District Not Recorded

            ALICIA A.G. LIMTIACO, United States Attorney for Guam, announced that  DWAYNE J. SAN NICOLAS, BALBINO K. LEON GUERRERO and DEDRICK J. AGUON, were sentenced today by Chief Judge Frances Tydingco-Gatewood in the District Court of Guam. 

            DWAYNE J. SAN NICOLAS was sentenced to serve 138 months incarceration.  DEDRICK J. AGUON was sentenced to serve 117 months incarceration.  BALBINO K. LEON GUERRERO was sentenced to serve 91 months incarceration.  Each defendant was placed on a five-year term of supervised release, was ordered to perform community service, and ordered to pay $856.49 in restitution to New Nana’s Market.

            All three defendants pleaded guilty on July 2012 to Hobbs Act Robbery in violation of Title 18 U.S.C. § 1951(a), and to the Discharging or Brandishing of a Firearm During a Crime of Violence, in violation of 18 U.S.C. § 924(c)(1)(a). 

            The defendants admitted to the following facts.  On September 8, 2011, AGUON provided LEON GUERRERO and SAN NICOLAS with a .22 caliber firearm and a .9 mm Beretta.  AGUON then drove SAN NICOLAS and LEON GUERRERO to New Nana’s Mart in Agana Heights.   LEON GUERRERO and SAN NICOLAS entered New Nana’s Mart and pointed the firearms directly at the cashier and demanded money.  SAN NICOLAS chambered a round and fired off a shot shattering a glass door on a cooler.  The cashier handed over approximately $700 in cash to LEON GUERRERO and SAN NICOLAS.     The men then fled New Nana’s Mart, stopping only to grab a 12-pack of beer.  AGUON acted as the getaway driver.   The robbery was captured on video surveillance. 

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

            U.S. Attorney Limtiaco noted that this prosecution is part of the U.S. Department of Justice’s Project Safe Neighborhood (PSN) Initiative, a nationwide commitment to aggressively prosecute defendants who engage in violent crime, drug distribution and gang involvement.  

            U.S. Attorney Limtiaco commended the investigative efforts of the Guam Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Special Agents and Task Force Officers.

Pavel Zborovskiy, 57, of Brooklyn, N.Y., pleaded guilty today to conspiracy to pay and receive illegal health care kickbacks in connection with a $13 million health care fraud and money laundering scheme.

Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Loretta E. 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.

Zborovskiy pleaded guilty before U.S. District Judge Nina Gershon of the Eastern District of New York and is the sixth defendant to plead guilty in connection with the scheme. At sentencing on May 28, 2014, Zborovskiy faces a maximum penalty of five years in prison and a fine of more than $2.5 million.

According to court documents, from 2010 to 2012, Zborovskiy, working through an ambulette company, recruited patients to attend a Brooklyn clinic called Cropsey Medical Care PLLC. An ambulette is a vehicle that is licensed by New York State’s Medicaid program to transport beneficiaries to and from medical facilities when such transportation is medically necessary. Zborovskiy’s ambulette company transported the patients he had recruited to and from Cropsey Medical, and billed Medicaid for such transportation. Once Zborovskiy’s beneficiaries were transported to Cropsey Medical, Zborovskiy and others paid such beneficiaries cash kickbacks to induce them to continue to attend the clinic and to receive medically unnecessary physical therapy, diagnostic testing and other services. Such purported medical services were then billed by Cropsey Medical to Medicare and Medicaid.

According to court documents, from approximately November 2009 to October 2012, Cropsey Medical submitted more than $13 million in claims to Medicare and Medicaid, seeking reimbursement for a wide variety of fraudulent medical services and procedures, including physician office visits, physical therapy and diagnostic tests.

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 U.S. Attorney’s Office for the Eastern District of New York. The case is being prosecuted by Trial Attorney Sarah M. Hall of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Shannon Jones of the Eastern District of New York.

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

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

A former Puerto Rico Department of Corrections officer was sentenced today to serve 811 months in prison for his role in providing armed security for three drug transactions.

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

Bernis Gonzalez Miranda, 27, was sentenced by U.S. District Judge Juan Perez Gimenez of the District of Puerto Rico. He was charged in a superseding indictment unsealed on Oct. 28, 2010, along with 89 law enforcement officers in Puerto Rico and 44 other individuals, as part of the FBI undercover operation known as Guard Shack.

In April 2012, a federal jury in San Juan found Gonzalez Miranda guilty of three counts of conspiracy to possess with intent to distribute more than five kilograms of cocaine, three counts of attempting to possess with the intent to distribute more than five kilograms of cocaine and three counts of possessing a firearm in furtherance of a drug transaction. According to the evidence presented in court, Gonzalez Miranda provided security for what he believed were illegal cocaine deals on June 15, July 2, and July 7, 2010. In fact, the purported drug transactions were part of an undercover FBI operation. On those days, the defendant’s actions included providing armed protection for the deals and escorting the buyer into and out of the transaction.

In return for the security he provided, Gonzalez Miranda received a cash payment of $2,000 for each transaction, and at sentencing he was ordered to forfeit the $6,000 he received.

The case was investigated by the FBI. The case was prosecuted by Trial Attorneys Kevin Driscoll and Monique Abrishami of the Criminal Division’s Public Integrity Section. The U.S. Attorney’s Office for the District of Puerto Rico also participated in the investigation and prosecution of this case.

Aleksandr Andreevich Panin, a Russian national also known as “Gribodemon” and “Harderman,” has pleaded guilty to conspiracy to commit wire and bank fraud for his role as the primary developer and distributor of the malicious software known as “SpyEye,” which, according to industry estimates, has infected over 1.4 million computers in the United States and abroad.

Acting Assistant Attorney General Mythili Raman of the Department of Justice’s Criminal Division, U.S. Attorney Sally Quillian Yates of the Northern District of Georgia and Acting Special Agent in Charge Ricky Maxwell of the FBI’s Atlanta Field Office made the announcement.

“Given the recent revelations of massive thefts of financial information from large retail stores across the country, Americans do not need to be reminded how devastating it is when cyber criminals surreptitiously install malicious codes on computer networks and then siphon away private information from unsuspecting consumers,” said Acting Assistant Attorney General Raman.  “Today, thanks to the tireless work of prosecutors and law enforcement agents, Aleksandr Panin has admitted to his orchestration of this criminal scheme to use ‘SpyEye’ to invade the privacy of Americans by infecting their computers through a dangerous botnet.  As this prosecution shows, cyber criminals – even when they sit on the other side of the world and attempt to hide behind online aliases – are never outside the reach of U.S. law enforcement.”

“As several recent and widely reported data breaches have shown, cyber-attacks pose a critical threat to our nation’s economic security,” said U.S. Attorney Yates. “Today’s plea is a great leap forward in our campaign against those attacks. Panin was the architect of a pernicious malware known as ‘SpyEye’ that infected computers worldwide. He commercialized the wholesale theft of financial and personal information. And now he is being held to account for his actions. Cyber criminals be forewarned: you cannot hide in the shadows of the Internet. We will find you and bring you to justice.”

“This investigation highlights the importance of the FBI’s focus on the top echelon of cyber criminals,” said Acting FBI SAC Maxwell. “The apprehension of Mr. Panin means that one of the world’s top developers of malicious software is no longer in a position to create computer programs that can victimize people around the world. Botnets such as SpyEye represent one of the most dangerous types of malicious software on the Internet today, which can steal people’s identities and money from their bank accounts without their knowledge. The FBI will continue working with partners domestically and internationally to combat cyber-crime.”

According to the charges and other information presented in court, SpyEye is a sophisticated malicious computer code that is designed to automate the theft of confidential personal and financial information, such as online banking credentials, credit card information, usernames, passwords, PINs, and other personally identifying information. The SpyEye virus facilitates this theft of information by secretly infecting victims’ computers, enabling cyber criminals to remotely control the infected computers through command and control (C2) servers. Once a computer is infected and under their control, cyber criminals can remotely access the infected computers, without authorization, and steal victims’ personal and financial information through a variety of techniques, including “web injects,” “keystroke loggers,” and “credit card grabbers.” The victims’ stolen personal and financial data is then surreptitiously transmitted to the C2 servers, where it is used to steal money from the victims’ financial accounts.

Panin was the primary developer and distributor of the SpyEye virus. Operating from Russia from 2009 to 2011, Panin conspired with others, including codefendant Hamza Bendelladj, an Algerian national also known as “Bx1,” to develop, market and sell various versions of the SpyEye virus and component parts on the Internet. Panin allowed cyber criminals to customize their purchases to include tailor-made methods of obtaining victims’ personal and financial information, as well as marketed versions that specifically targeted designated financial institutions. Panin advertised the SpyEye virus on online, invitation-only criminal forums. He sold versions of the SpyEye virus for prices ranging from $1,000 to $8,500. Panin is believed to have sold the SpyEye virus to at least 150 “clients,” who, in turn, used them to set up their own C2 servers. One of Panin’s clients, “Soldier,” is reported to have made more than $3.2 million in a six-month period using the SpyEye virus.

According to industry estimates, the SpyEye virus has infected more than 1.4 million computers in the United States and abroad, and it was the preeminent malware toolkit used from approximately 2009 to 2011. Based on information received from the financial services industry, over 10,000 bank accounts have been compromised by SpyEye infections since 2013 alone. Some cyber criminals continue to use SpyEye today, although its effectiveness has been limited since software makers have added SpyEye to malicious software removal programs.

In February 2011, pursuant to a federal search warrant, the FBI searched and seized a SpyEye C2 server allegedly operated by Bendelladj in the Northern District of Georgia. That C2 server controlled over 200 computers infected with the SpyEye virus and contained information from numerous financial institutions.

In June and July 2011, FBI covert sources communicated directly with Panin, who was using his online nicknames “Gribodemon” and “Harderman,” about the SpyEye virus. FBI sources then purchased a version of SpyEye from Panin that contained features designed to steal confidential financial information, initiate fraudulent online banking transactions, install keystroke loggers, and initiate distributed denial of service (DDoS) attacks from computers infected with the malware.

On Dec. 20, 2011, a Northern District of Georgia grand jury returned a 23-count indictment against Panin, who had yet to be fully identified, and Bendelladj. The indictment charged one count of conspiracy to commit wire and bank fraud, 10 counts of wire fraud, one count of conspiracy to commit computer fraud, and 11 counts of computer fraud. A superseding indictment was subsequently returned identifying Panin by his true name.

Bendelladj was apprehended at Suvarnabhumi Airport in Bangkok, Thailand, on Jan. 5, 2013 and was extradited from Thailand to the United States on May 2, 2013. His charges are currently pending in the Northern District of Georgia.

Panin was arrested by U.S. authorities on July 1, 2013, when he flew through Hartsfield-Jackson Atlanta International Airport.

The investigation also has led to the arrest of four of Panin’s SpyEye clients and associates in the United Kingdom and Bulgaria.

On Jan. 28, 2014, Panin pleaded guilty to conspiring to commit wire and bank fraud. Sentencing for Panin is scheduled for April 29, 2014, before United States District Judge Amy Totenberg of the Northern District of Georgia.

The case is being investigated by the FBI. Assistant United States Attorney Scott Ferber of the Northern District of Georgia, Trial Attorney Ethan Arenson of the Criminal Division’s Computer Crime and Intellectual Property Section and Senior Litigation Counsel Carol Sipperly of the Criminal Division’s Fraud Section are prosecuting the case. Former Assistant United States Attorney Nicholas Oldham also participated in the prosecution while with the Criminal Division.

Valuable assistance was provided by the Criminal Division’s Office of International Affairs and the following international law enforcement agencies: The United Kingdom’s National Crime Agency, the Royal Thai Police-Immigration Bureau, the National Police of the Netherlands - National High Tech Crime Unit (NHTCU), Dominican Republic’s Departamento Nacional de Investigaciones (DNI), the Cybercrime Department at the State Agency for National Security-Bulgaria and the Australian Federal Police (AFP).

Valuable assistance also was provided by the following private sector partners: Trend Micro’s Forward-looking Threat Research (FTR) Team, Microsoft’s Digital Crimes Unit, Mandiant, Dell SecureWorks, Trusteer and the Norwegian Security Research Team known as “Underworld.no”.

Attorney General Eric Holder today announced the appointment of the following eight U.S. Attorneys to serve two-year terms on the Attorney General’s Advisory Committee (AGAC): A ndré Birotte Jr., Central District of California; Thomas E. Delahanty II, District of Maine; Zachary T. Fardon, Northern District of Illinois; Wifredo A. Ferrer, Southern District of Florida; Kerry B. Harvey, Eastern District of Kentucky; Zane D. Memeger, Eastern District of Pennsylvania; Tim Q. Purdon, District of North Dakota; and Sarah R. Saldaña, Northern District of Texas.

“In the face of daunting staff and resource constraints, our U.S. Attorneys’ Offices are performing tremendous work in their districts across the country, standing on the front lines of federal law enforcement efforts,” said Attorney General Holder.  “Each of the U.S. Attorneys who serves on the Attorney General’s Advisory Committee plays an indispensable role in guiding the Justice Department’s work as we confront a range of challenging issues and opportunities.  I welcome the eight new members of the AGAC I’ve chosen to appoint today, and look forward to working closely with them to take fresh, and smart, approaches to fighting crime and achieving justice across the nation.”

The Attorney General also thanked the following U.S. Attorneys who have completed their two-year terms and are rotating off the committee: Laura E. Duffy, Southern District of California; Timothy J. Heaphy, Western District of Virginia; Brendan V. Johnson, District of South Dakota; Pamela C. Marsh, Northern District of Florida; Carmen M. Ortiz, District of Massachusetts; Robert L. Pitman, Western District of Texas; James Santelle, Eastern District of Wisconsin; Carter M. Stewart, Southern District of Ohio.

Chaired by U.S Attorney for the Eastern District of New York Loretta E. Lynch, the AGAC represents the voice of the U.S. Attorneys and provides advice and counsel to the Attorney General on policy, management and operational issues impacting the Offices of the U.S. Attorneys.

A brief bio on each new appointee is below: A ndré Birotte Jr. was presidentially appointed and sworn in as the U.S. Attorney for the Central District of California on March 4, 2010. He previously served as the Inspector General for the Los Angeles Police Commission from 2003 to 2010 and as an Assistant Inspector General from 2001 to 2003. From 1995 to 1999, Birotte served as an Assistant United States Attorney for the Central District of California. He started his legal career as a Deputy Public Defender in the Los Angeles County Public Defender’s Office from 1991 to 1995. Birotte serves as Co-Chair of the AGAC’s Terrorism/National Security Subcommittee, and as a member of the Border and Immigration Law Enforcement Subcommittee, Civil Rights Subcommittee, Cyber/Intellectual Property Subcommittee, Violent and Organized Crime Subcommittee and White Collar/Fraud Subcommittee.

Thomas E. Delahanty II was presidentially appointed and sworn in as the U.S. Attorney for the District of Maine on July 1, 2010. Prior to his appointment, he served as a Justice for the Maine Superior Court for more than 26 years, and as Chief Justice from 1990 until 1995. From 1981 until 1983, he was a partner in the firm Delahanty & Longley. He previously served as the U.S. Attorney for the District of Maine from 1980 to 1981. Prior to this, Delahanty served as a District Attorney for Prosecutorial District 3 for Androscoggin, Franklin and Oxford Counties (1975 to 1980); as a County Attorney and Assistant County Attorney with the Androscoggin County Attorney’s Office (1971 to 1975); and as an associate at Marshall, Raymond & Beliveau (1970 to 1974). Delahanty serves as Chair of the AGAC’s Controlled Substances and Asset Forfeiture Working Group, as a member of the AGAC’s Medical Marijuana Working Group and the AGAC’s Border and Immigration Law Enforcement Subcommittee, and as a participant in the department’s Arab American and Muslim Outreach Program.

Zachary T. Fardon was presidentially appointed and sworn in as the U.S. Attorney for the Northern District of Illinois on Oct. 23, 2013. Prior to his appointment, Fardon was a partner at the law firm of Latham & Watkins where he served as the Chair of the Litigation Department in their Chicago office. Previously, Fardon served as the First Assistant United States Attorney in the Middle District of Tennessee from 2003 to 2006 and as an Assistant United States Attorney in the Northern District of Illinois from 1997 to 2003. He began his legal career working as an Assistant Public Defender in the Nashville Metropolitan Public Defender’s Office from 1996 to 1997 and as an associate at the law firm of King & Spalding from 1992 to 1996.

Wifredo A. Ferrer was presidentially appointed and sworn in as the U.S. Attorney for the Southern District of Florida on May 4, 2010. Ferrer previously served as an Assistant County Attorney and as Chief of the Federal Litigation Section in the Miami-Dade County’s Attorney’s Office from 2006 to 2010. From 2000 until 2006, he was an Assistant United States Attorney in the United States Attorney’s Office in the Southern District of Florida. While at the U.S. Attorney's Office, he served in the Public Integrity and National Security Section, the Economic Crimes Section, the Major Crimes Section, and the Appellate Division of the Office. Prior to that, he had been Counsel and Deputy Chief of Staff to the United States Attorney General from 1995 to 2000. From 1994 to 1995, Ferrer was a White House Fellow and Special Assistant to the United States Secretary of Housing and Urban Development. From 1991 to 1994, he had been a Litigation Associate with Steel Hector & Davis in Miami, Florida. From 1990 until 1991, Ferrer was a law clerk to then- District (now 11th Circuit) Judge Stanley Marcus. Ferrer serves as Vice Chair of the AGAC’s Controlled Substances and Asset Forfeiture Working Group.

Kerry B. Harvey was presidentially appointed and sworn in as the U.S. Attorney for the Eastern District of Kentucky on May 14, 2010. Harvey previously served as the General Counsel and Acting Inspector General of the Kentucky Cabinet for Health and Family Services from 2008 to 2010. He was a partner at Owen, Harvey, and Carter from 1991 to 2008; at Prince, Harvey, Brien & Carter from 1986 to 1991; and at Prince & Harvey from 1984 to 1986. Mr. Harvey worked as the Marshall County, Kentucky, Attorney from 1986 to 1994. He began his legal career as an associate at Brown, Todd & Heyburn from 1982 to 1984. Harvey serves as a member of the AGAC’s Health Care Fraud Working Group.

Zane David Memeger was presidentially appointed and sworn in as the U.S. Attorney for the Eastern District of Pennsylvania on May 10, 2010. Prior to his appointment, Memeger was a Partner at Morgan, Lewis & Bockius, LLP from 2006 to 2010. Previously, Memeger had served as an Assistant United States Attorney in the United States Attorney’s Office for the Eastern District of Pennsylvania from 1995 until 2006. From 1991 until 1995, Memeger was an Associate at Morgan, Lewis & Bockius, LLP. Memeger serves as a member of the AGAC’s Cyber/Intellectual Property Subcommittee, LECC/Victim/Community Issues Subcommittee, Violent and Organized Crime Subcommittee, White Collar/Fraud Subcommittee and Health Care Fraud Working Group.

Timothy Q. Purdon was presidentially appointed and sworn in as the U.S. Attorney for the District of North Dakota on August 24, 2010. Prior to his appointment, Purdon was a partner at Vogel Law Firm from 2005 to 2010; prior to his promotion he also served as an associate at the firm. From 1996 until 2001, Purdon worked as an associate at Dickson & Purdon, and he became a partner in the firm in 2001. From 1995 through 1996, he was an associate at Olson & Cichy. Purdon has also served as a law clerk for the Honorable Bruce M. Van Sickle of the United States District Court for the District of North Dakota. Purdon serves as a member of the AGAC’s Border and Immigration Law Enforcement Subcommittee, Native American Issues Subcommittee, Environmental Issues Working Group, and Local Government Coordination Working Group.

Sarah R. Saldaña was presidentially appointed and sworn in as the U.S. Attorney for the Northern District of Texas on Sept. 29, 2011. She previously served as an Assistant United States Attorney for the Northern District of Texas since 2004, serving as Deputy Criminal Chief for Fraud and Public Corruption since 2009. Ms. Saldaña was an attorney for Baker Botts, L.L.P, from 1987 to 1998, and Haynes Boone from 1985 to 1987. Following law school, she served as a judicial clerk to the Honorable Barefoot Sanders, U.S. District Court Judge for the Northern District of Texas, from 1984 to 1985. Saldaña serves as a member of the AGAC’s Border and Immigration Law Enforcement Subcommittee, Cyber/Intellectual Property Subcommittee, LECC/Victim/Community Issues Subcommittee and White Collar/Fraud Subcommittee.

The full AGAC membership is listed below: Loretta E. Lynch, United States Attorney, Eastern District of New York, Chair

Sally Quillian Yates, United States Attorney, Northern District of Georgia, Vice Chair

David Barlow, United States Attorney, District of Utah

Andre Birotte Jr. – Central District of California

Thomas E. Delahanty II – District of Maine

Zachary T. Fardon – Northern District of Illinois

Wifredo A. Ferrer – Southern District of Florida

Richard S. Hartunian, United States Attorney, Northern District of New York

Kerry B. Harvey – Eastern District of Kentucky

Barbara L. McQuade, United States Attorney, Eastern District of Michigan

Zane D. Memeger – Eastern District of Pennsylvania

Wendy J. Olson, United States Attorney, District of Idaho

Timothy Q. Purdon – District of North Dakota

Sarah R. Saldan͂a – Northern District of Texas

Ronald W. Sharpe, United States Attorney, District of the Virgin Islands

Anne Tompkins, United States Attorney, Western District of North Carolina

Ronald C. Machen, United States Attorney, District of Columbia, ex officio

Daniel Bella, Criminal Chief, Northern District of Indiana, ex officio

Suzanne Bauknight, Civil Chief, Eastern District of Tennessee, ex officio

Robert Zauzmer, Appellate Chief, Eastern District of Pennsylvania, ex officio

            ALICIA A.G. LIMTIACO, United States Attorney for the Districts of Guam and the Northern Mariana Islands, announced that Defendant Trifon Pineda, age 44, was sentenced on January 16, 2014, in the District Court of Guam by Chief Judge Frances Tydingco-Gatewood. Pineda was sentenced to 55 months imprisonment, five years supervised release, ordered to pay a $100 assessment fee, and subject being deported.

            Defendant and his co-defendant, Les Vitug, were arrested on a complaint on March 20, 2011.  On March 23, 2011 the grand jury indicted the defendants for conspiracy to distribute more than 50 grams of methamphetamine and attempted possession with intent to distribute methamphetamine.  On March 6, 2011, postal inspectors seized a package addressed from Les Vitug in California to Joan Vitug in Guam.  Agents searched the package pursuant to a federal search warrant and recovered 27 grams of ice that was 99% pure.  Les Vitug (sentenced on March 27, 2012 to 48 months) claimed the package and was detained by law enforcement agents. Vitug told agents he was picking up the package for his pare’ Pineda.  Vitug called Pineda (with agents listening) to tell him the package was in.  Pineda went to Vitug’s house where he was arrested.  Pineda admitted that the package was his and it was sent to him by his brother Pablito Pineda who has also been indicted and has pled guilty.  Pablito Pineda is awaiting sentencing.

            Credit for the investigation is given to the Drug Enforcement Administration (DEA), U.S. Postal Service Inspectors, the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Task Force Agents from the Superior Court of Guam’s Probation Office assigned to the DEA, Guam Customs and Quarantine, and the Guam Police Department.  The case was handled by Assistant U.S. Attorney Clyde Lemons.

The Justice Department’s Medicare Fraud Strike Force has set record numbers for health care prosecutions in Fiscal Year 2013, demonstrating the targeted and coordinated approach remains strong as the strike force enters its eighth year of fighting fraud against the government’s health care programs.

“These record results underscore our determination to hold accountable those who take advantage of vulnerable populations, commit fraud on federal health care programs, and place the safety of others at risk for illicit financial gain,” said Attorney General Eric Holder. “By targeting our enforcement efforts to ‘hot spots’ in nine cities, the Medicare Fraud Strike Force is allowing us to fight back more effectively than ever before.”

“The Medicare Fraud Strike Force is one of this country’s most productive investments,” said Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division. “We are not only putting hundreds of criminals who steal from Medicare in prison, but also stopping their theft in its tracks, recovering millions of dollars for taxpayers, and deterring potential criminals who ultimately decide the crime isn’t worth it.”

“Those perpetrating Medicare fraud cheat both taxpayers and vulnerable patients, and our Strike Forces are successfully fighting back – holding criminals accountable and recovering stolen dollars,” said Inspector General Daniel R. Levinson of the U.S. Department of Health and Human Services. “Our joint commitment to bring the fight against fraud to criminal hotspots around the country is steadfast.”

Under the supervision of the Criminal Division and U.S. Attorney’s Offices, the Medicare Fraud Strike Force is formed by coordinated teams of investigators and prosecutors – including personnel from the Justice Department, the U.S. Department of Health and Human Services and the FBI – who analyze Medicare claims data to target specific geographic areas showing unusually high levels of Medicare billing.

By focusing on the worst offenders engaged in current fraud schemes in the highest intensity regions, the strike force seeks to deter fraud in the target community and prevent it from spreading to other areas. The strike force is currently operating in nine cities: Baton Rouge, La.; Brooklyn, N.Y.; Chicago; Dallas; Detroit; Houston; Los Angeles; Miami and Tampa, Fla. S ince its inception in March 2007, strike force prosecutors have charged more than 1,700 defendants who have collectively billed the Medicare program more than $5.5 billion.

In Fiscal Year 2013, the strike force set records in the number of cases filed (137), individuals charged (345), guilty pleas secured (234) and jury trial convictions (46). In addition, 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.

According to a recent report by the Inspector General for the U.S. Department of Health and Human Services, for every dollar the Departments of Justice and Health and Human Services have spent fighting health care fraud, they have returned an average of nearly eight dollars to the U.S. Treasury, the Medicare Trust Fund and others.

The Medicare Fraud Strike Force is part of an unprecedented partnership between the Departments of Justice and Health and Human Services called HEAT (Health care Enforcement and Prevention Action Team). Formed in May 2009, this partnership brings together high-level leaders from both departments to share information, spot trends, coordinate strategy and strengthen our fraud prevention efforts.

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

Attorney General Eric Holder and Director of National Intelligence James Clapper released the following joint statement Monday:

“As indicated in the Justice Department’s filing with the Foreign Intelligence Surveillance Court, the administration is acting to allow more detailed disclosures about the number of national security orders and requests issued to communications providers, and the number of customer accounts targeted under those orders and requests including the underlying legal authorities. Through these new reporting methods, communications providers will be permitted to disclose more information than ever before to their customers.
 
“This action was directed by the President earlier this month in his speech on intelligence reforms. While this aggregate data was properly classified until today, the office of the Director of National Intelligence, in consultation with other departments and agencies, has determined that the public interest in disclosing this information now outweighs the national security concerns that required its classification.
 
“Permitting disclosure of this aggregate data resolves an important area of concern to communications providers and the public.  In the weeks ahead, additional steps must be taken in order to fully implement the reforms directed by the President.
 
“The declassification reflects the Executive Branch’s continuing commitment to making information about the Government’s intelligence activities publicly available where appropriate and is consistent with ensuring the protection of the national security of the United States.”

Related Materials:

DAG Letter
Stipulation of Voluntary Dismissal
Notice of Declassification

A federal district judge in the Statesboro Division of the Southern District of Georgia has permanently barred Lakesia Michelle Mills of Adrian, Ga., from preparing federal income tax returns for others, the Justice Department announced today.  The injunction also requires Mills to send copies of the injunction to her customers.

According to the complaint filed by the department on ­­­­Nov. 1, 2013, Mills is a paid tax return preparer who does business as Willis Tax Service.  The complaint alleges that, since January 2011, Mills has prepared at least 455 amended federal income tax returns that claimed overstated refunds based upon fabricated First-Time Homebuyer Credit claims for $8,000, which is the maximum amount.  Mills also allegedly provided customers with false settlement statements and proof of insurance to support the credit.  The complaint also alleges that Mills failed to sign the returns she prepared or to include her tax preparer identification number as required.  Altogether, Mills allegedly claimed over $3.6 million in bogus credits on the amended returns.  Mills consented to the entry of the injunction without admitting to any findings of fact.     

Return preparer fraud is one of the IRS’s Dirty Dozen Tax Scams for 2013.  The Internal Revenue Service has tips for choosing a tax preparer www.irs.gov/Tax-Professionals/Choosing-a-Tax-Professional In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers.  Information about these cases is available on the department website.

Related Materials:

United States v. Lakesia Michelle Mills
Complaint for Injunctive Relief
Final Judgment of Permanent Injunction Against Lakesia Michelle Mills d/b/a Willis Tax Service

ALICIA A.G. LIMTIACO, United States Attorney for the Districts of Guam and the Northern Mariana Islands, announced that defendant BERNICE RIVERA was sentenced on January 21, 2014, by Chief Judge Frances Tydingco-Gatewood in the District Court of Guam, to time served and two years of supervised release for the offense of Bank Misapplication.

The defendant, BERNICE RIVERA, was a bank employee at Coast 360 Federal Credit Union, and misapplied funds from a customer account in the amount of $11,891.  The defendant had paid full restitution in advance of her sentencing.

This case was investigated by the Federal Bureau of Investigations and was prosecuted by Assistant
U.S. Attorney Frederick A. Black.

Richard Reyes, a member of the Almighty Imperial Gangsters, has been convicted at trial for his role in violent acts as a member of a criminal street gang that operated in Northwest Indiana and is accused of engaging in drug trafficking and acts of violence, including murder, attempted murder and robbery.

Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and U.S. Attorney David Capp of the Northern District of Indiana made the announcement.

Reyes, 41, of Hammond, Ind., was convicted by a federal jury on Jan. 24, 2014, for his role in the murder of rival Latin King gang member Rene Alonzo on Sept. 16, 2007. According to evidence at trial, Reyes fatally shot Alonzo outside of the U.S. Bar in East Chicago. Reyes was convicted of conspiracy to participate in racketeering activity, conspiracy to distribute cocaine and marijuana, and murder in aid of racketeering activity, which each carry a maximum penalty of life in prison; and murder resulting from the use and carrying of a firearm during a crime of violence, which carries a minimum mandatory penalty of 10 years in prison consecutive to any other sentence and a maximum of life in prison.

Reyes was among 24 individuals charged in this investigation, and 22 have pleaded guilty, including six men who pleaded guilty in January 2014. Those charged are accused of having participated collectively in 14 murders and eight attempted murders from 2002 to 2012 as part of their criminal enterprise. Defendants are presumed innocent unless and until proven guilty at trial.

On Jan. 13, 2014, Salvador Chavez, 34, pleaded guilty before U.S. District Chief Judge Philip P. Simon in the Northern District of Indiana to conspiracy to participate in racketeering activity.

On Jan. 10, 2014, Jason Medina, aka Burns, 30; Edward Raye Serna, 34; and Armando Jose Velasquez, aka Money, age 26, all of East Chicago, Ind., pleaded guilty before Chief Judge Simon. Medina pleaded guilty to conspiracy to participate in racketeering activity; murder resulting from the use and carrying of a firearm during a crime of violence; and attempted murder in aid of racketeering activity, which carries a maximum penalty of 10 years in prison. Medina admitted that he used a firearm to murder Guadalupe Trevino on July 24, 2005, and attempted to murder a victim on June 6, 2011. Sentencing for Medina is scheduled for June 19, 2014. Edward Serna pleaded guilty to conspiracy to participate in racketeering activity and attempted murder in aid of racketeering activity and admitted to his participation in the same attempted murder on June 6, 2011. Sentencing for Edward Serna is also set for June 19, 2014. Velasquez pleaded guilty to conspiracy to participate in racketeering activity, murder resulting from the use and carrying of a firearm during a crime of violence, and attempted murder in aid of racketeering activity. Velasquez admitted he used a firearm on Dec. 3, 2011, when he attempted to murder a victim in aid of racketeering activity. Sentencing for Velasquez is scheduled for June 6, 2014.

On Jan. 3, 2014, Julian Guillermo Serna, aka Big Ju, 24, and Vincent Garza, aka Chente, 22, pleaded guilty before Chief Judge Simon. Julian Serna pleaded guilty to conspiracy to participate in racketeering activity and to murder resulting from the use and carrying of a firearm during a crime of violence. Julian Serna admitted that he used a firearm to murder Mario Soriano on March 25, 2008. Sentencing for Julian Serna is scheduled for July 25, 2014. Garza pleaded guilty to conspiracy to participate in racketeering activity and two counts of homicide in aid of racketeering activity, which each carry a maximum penalty of life in prison. Garza admitted that he participated in the murder of Michael Sessum and Miguel Mejias on June 3, 2008. Sentencing for Garza is scheduled for July 24, 2104.

This case is being investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives, the East Chicago Police Department and the Federal Bureau of Investigation, with assistance from the Gary Police Department, the Hammond Police Department and the Lake County High Intensity Drug Trafficking Area. The case is being prosecuted by Assistant United States Attorney David J. Nozick of the United States Attorney’s Office for the Northern District of Indiana and Trial Attorney Bruce Hegyi of the Criminal Division’s Capital Case Section.

Deundra Milhouse was indicted for his role in a stolen identity refund fraud crime, 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 after the indictment was unsealed following Milhouse’s arrest. 

Milhouse was charged with one count of access device fraud, three counts of wire fraud, four counts of aggravated identity theft and two counts of theft of public funds.  According to the indictment, Milhouse filed and caused to be filed false federal income tax returns using the identities of other individuals.  He then directed the refunds claimed on those returns to be deposited into accounts linked to prepaid debit cards and into an account at a credit union, from which Milhouse would then withdraw the fraudulently obtained refunds in cash.

An indictment merely alleges that crimes have been committed, and the defendant is presumed innocent until proven guilty beyond a reasonable doubt.  If convicted, Milhouse faces a statutory maximum potential sentence of 20 years in prison for the wire fraud count, a statutory maximum potential sentence of 10 years in prison for each theft of public money count and a mandatory two-year sentence for the aggravated identity theft counts.  Milhouse is also subject to possible fines, forfeiture and mandatory restitution if convicted.

This case was investigated by special agents of the Internal Revenue Service - Criminal Investigation and the Elmore County Sheriff’s Office.  Trial Attorneys Jason Poole and Michael Boteler of the Tax Division are prosecuting the case with the assistance of Assistant U.S. Attorney Todd Brown and the U.S. Attorney’s Office for the Middle District of Alabama. 

Following a week-long trial, a jury in the Middle District of Alabama convicted Bryant Thompson and Quincy Walton of conspiracy to defraud the United States on Jan. 24, 2014, announced Assistant Attorney General Kathryn Keneally of the Justice Department's Tax Division and U.S. Attorney George L. Beck Jr. for the Middle District of Alabama.  Thompson, an Alabama corrections officer, was also convicted of seven counts of wire fraud and seven counts of aggravated identity theft, and Walton, a former Alabama corrections officer, was also convicted of one count of aggravated identity theft.

According to evidence introduced at trial, Thompson was assigned to the shift clerk position at an Alabama state prison, which gave him access to the personal identifying information of every inmate in the custody of the Alabama Department of Corrections, past and present.  Thompson and Walton, his former co-worker, used information stolen from the databases to file false federal income tax returns in the names and Social Security numbers of inmates.  All of the inmates testified that they did not consent to the filing of the tax returns in their names, and many testified that they did not know tax returns were filed in their names until being called as witnesses in this trial. 

According to the evidence introduced at trial, the investigation revealed that several internet protocol (IP) addresses were used to file the fraudulent tax returns, including one IP address directly assigned to Thompson’s residence at the time certain tax returns were filed.  Circumstantial evidence tied both Thompson and Walton to the other IP addresses. 

Also according to evidence introduced at trial, Thompson and Walton directed stolen tax refunds onto prepaid debit cards and requested other refunds in the form of U.S. Treasury Checks.  Evidence showed that the cards and checks were mailed to several addresses associated with Thompson and Walton in Montgomery and Prattville, Ala., and that several of the checks were cashed at a local retail store by Walton’s uncle and at a local check casher.  During this time, Thompson purchased a new paint job and new rims for his SUV and later purchased a BMW.

At sentencing, Thompson and Walton face a statutory maximum sentence of five years in federal prison for the conspiracy count and a statutory minimum of two years in prison for each aggravated identity theft conviction.  Thompson also faces a statutory maximum of 20 years in prison for each wire fraud count.  In addition to prison time, Thompson and Walton also face the possibility of fines and restitution to the IRS and other victims.  Their sentences will be determined by a federal judge after consideration of the sentencing guidelines and statutory factors.

The case was investigated by IRS-Criminal Investigation and was prosecuted by Trial Attorneys Justin Gelfand, Jason Poole and Alexander Effendi of the Tax Division, with the assistance of the U.S. Attorney’s Office for the Middle District of Alabama.  

Two orthopedic clinics will pay a combined $1.85 million to resolve state and federal False Claims Act allegations that they knowingly billed state and federal health care programs for reimported osteoarthritis medications, known as viscosupplements, the Department of Justice announced today.  Tennessee Orthopaedic Clinics P.C., headquartered in Knoxville, Tenn., will pay $1.3 million, and Appalachian Orthopaedic Clinics P.C., headquartered in Kingsport, Tenn., will pay $550,000. 

“The Department of Justice will not tolerate the conduct of companies that impermissibly shift risks onto patients in order to increase their own profits,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery.  “The department is committed to maintaining the integrity of the health care system, ensuring that patients receive drugs and devices that are safe and effective and taking action against companies that take chances with the health of consumers so as to improve their own bottom lines.” 

Viscosupplements, such as Synvisc and Orthovisc, are injections approved by the Food and Drug Administration for the treatment of osteoarthritis pain in the knee.  Viscosupplements are reimbursed by Medicare, Medicaid and other federal health care programs at a set rate based on the average sales price of the domestic product.  The government contended that the clinics knowingly purchased deeply discounted viscosupplements that were reimported from foreign countries and billed them to state and federal health care programs in order to profit from the reimbursement system, when such reimported viscosupplements were not reimbursable by those programs.  Allegedly, the reimported product included labeling in foreign languages and in English for additional uses not approved in the United States, which demonstrated that the product was reimported.  Moreover, because the product was reimported, the government alleged there was no manufacturer assurance that it had not been tampered with or that it was stored appropriately.    

“This scheme is yet another example of illegal actions by health care providers to profit from drugs imported into the United States,” said U.S. Attorney for the Eastern District of Tennessee William C. Killian.  “Medicare and FDA requirements are designed to prevent potential harm to patients.  Noncompliance with the law to increase profit at the risk of patients will be pursued by the Department of Justice.”

“Attempts to increase profits by circumventing the law will not be tolerated,” said Special Agent in Charge of the U.S. Department of Health and Human Services Office of Inspector General in Atlanta Derrick L. Jackson.  “Health care providers buying cut-rate, cheap drugs from foreign sources will end up paying a steep price.”

The allegations resolved by the settlement were first raised in a lawsuit filed against the clinics under the qui tam, or whistleblower, provisions of the False Claims Act by Douglas Estey, a physician’s assistant who was occasionally paid by Genzyme Corp. to speak to medical providers about the use of Synvisc.  The Act allows private citizens with knowledge of fraud to bring civil actions on behalf of the government and to share in any recovery.  Estey will receive $323,750. 

The government’s investigation was a coordinated effort by the Civil Division of the Department of Justice, the U.S. Attorney’s Office for the Eastern District of Tennessee, the Department of Health and Human Services Office of Inspector General and Office of General Counsel, the Food and Drug Administration Office of Criminal Investigations and Office of Chief Counsel, the Federal Bureau of Investigation and the Tennessee Bureau of Investigation.

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 $17.1 billion through False Claims Act cases, with more than $12.2 billion of that amount recovered in cases involving fraud against federal health care programs.

The case is captioned United States ex rel. Estey v. Tennessee Orthopaedic Clinics P.C., Appalachian Orthopaedic Associates P.C. and Appalachian Orthopaedic Partners LLC, Docket No. 3:12-cv-85 Varlan/Guyton.  The claims settled by these agreements are allegations only; there have been no determinations of liability.   

A home health agency owner who participated in a Medicare fraud scheme that totaled almost $11 million was sentenced in Detroit today to serve 120 months in prison.

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 Robert D. Foley III 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.

Chiradeep Gupta, 39, was sentenced by U.S. District Judge Denise Page Hood in the Eastern District of Michigan.  In addition to his prison term, Gupta was sentenced to serve three years of supervised release and was ordered to pay more than $10 million in restitution, jointly and severally with his co-defendants.

On Oct. 26, 2012, Gupta, a physical therapist and part-owner of All American, a home health care company located in Oak Park, Mich., was found guilty at trial of one count of conspiracy to commit health care fraud, one count of conspiracy to commit money laundering and three substantive counts of money laundering.

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

The evidence showed that Gupta and his co-conspirators used patient recruiters, who paid Medicare beneficiaries to sign blank documents for physical therapy services that were never provided and/or medically unnecessary.  The owners of Patient Choice and All American paid physicians to sign referrals and other therapy documents necessary to bill Medicare.  Physical therapists and physical therapist assistants provided through contractors, including two owned by Gupta, would then create fake medical records using the blank, pre-signed forms obtained by the patient recruiters to make it appear as if physical therapy services had actually been rendered, when, in fact, the services had not been rendered.

According to evidence presented at trial, Gupta provided to Patient Choice and All American physical therapists and physical therapist assistants who created fake patient files using blank, pre-signed forms obtained by patient recruiters to make it appear as if the physical therapy services billed to Medicare had actually been provided.  Gupta also doctored and directed the doctoring of fake patient files.  The evidence at trial showed that Gupta laundered the proceeds of the fraud through multiple shell companies.

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

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

Four individuals have been charged in the Northern District of Georgia for their alleged roles in piracy groups engaged in the illegal distribution of copies of copyrighted Android mobile device applications, or “apps.”

Acting Assistant Attorney General Mythili Raman of the Department of Justice’s Criminal Division, U.S. Attorney Sally Quillian Yates of the Northern District of Georgia and Acting Special Agent in Charge Ricky Maxwell of the FBI’s Atlanta Field Office made the announcement.

“These crimes involve the large-scale violation of intellectual property rights in a relatively new and rapidly growing market,” said Acting Assistant Attorney General Raman.  “While this represents the first counterfeit apps case by the Department of Justice, it exemplifies our longstanding commitment to prosecute those who steal the creative works of others.”

“Copyright laws are designed to protect creative thinkers and encourage them to use their talents in ways that benefit society,” said U.S. Attorney Yates. “These defendants are charged with violating the law by stealing copyrighted apps, thereby depriving the creators of the apps the fruits of their labor. We are committed to protecting copyright owners, and we will continue to vigorously prosecute those who steal all forms of copyrighted work.”

“The protection of intellectual property is the cornerstone of a free market that rewards innovation and forward thinking,” said FBI SAC Maxwell. “The federal charges presented in this case illustrates the problems facing technology based companies in particular but also highlights the FBI and U.S. government response to those engaged in such wholesale criminal activity involving the piracy of copyrighted products.”

An information filed on Jan. 23, 2014, charges Kody Jon Peterson, 22, of Clermont, Fla., with one count of conspiracy to commit criminal copyright infringement. A separate information filed today charges Thomas Allen Dye, 21, of Jacksonville, Fla.; Nicholas Anthony Narbone, 26, of Orlando, Fla.; and Thomas Pace, 38, of Oregon City, Ore., with one count of conspiracy to commit criminal copyright infringement. Peterson was arraigned on Jan. 23, 2014, and Dye, Narbone and Pace were arraigned today.

According to the information filed yesterday, Peterson and his fellow conspirators identified themselves as the SnappzMarket Group. From May 2011 until August 2012, Peterson conspired with other members of the SnappzMarket Group to reproduce and distribute over one million copies of copyrighted Android mobile device apps through the SnappzMarket alternative online market, without permission from the software developers and other copyright owners of the apps, who would otherwise sell copies of the apps on legitimate online markets for a fee.

According to the information filed today, Dye, Narbone, Pace and their fellow conspirators identified themselves as the Appbucket Group. From August 2010 to August 2012, defendants conspired with other members of the Appbucket Group to reproduce and distribute over one million copies of copyrighted Android mobile device apps through the Appbucket alternative online market without permission from the copyright owners of the apps.

The informations charge the SnappzMarket Group and the Appbucket Group with renting computer servers to host websites such as www.snappzmarket.com and www.appbucket.net , respectively, to provide digital storage for the pirated copies of copyrighted Android apps that each group distributed to their members or subscribers. On Aug. 21, 2012, seizure orders were executed against these two website domain names for the illegal distribution of copies of copyrighted Android mobile device apps – the first time website domains involving mobile device app marketplaces have been seized.

The maximum prison sentence for the charge of conspiracy to commit criminal copyright infringement is five years in prison.

Charges contained in a criminal information are merely allegations, and the defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

The investigation of the case was conducted by the FBI. Assistant Deputy Chief for Litigation John H. Zacharia of the Criminal Division’s Computer Crime and Intellectual Property Section (CCIPS) and Assistant U.S. Attorney Christopher Bly of the Northern District of Georgia are prosecuting the case on behalf of the United States, with the assistance of Assistant U.S. Attorney Brian M. Pearce of the Northern District of Georgia. The Office of International Affairs provided assistance in the matter. Significant assistance in the case has also been provided by the CCIPS Cybercrime Lab.

A North Carolina woman has pleaded guilty for her involvement in a $28.3 million Medicare fraud scheme involving physical and occupational therapy services.

Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, Acting U.S. Attorney A. Lee Bentley III of the Middle District of Florida, Special Agent in Charge Paul Wysopal of the FBI’s Tampa Field Office and Special Agent in Charge Christopher Dennis of the U.S. Health and Human Services Office of Inspector General (HHS-OIG) made the announcement.

Margarita M. Grishkoff, 59, of Charlotte, N.C., and formerly of southwest Florida, pleaded guilty today in the U.S. District Court for the Middle District of Florida to conspiracy to commit health care fraud. Her sentencing date will be set by the court. She faces a maximum penalty of 10 years in prison.

According to documents filed in the case, Grishkoff and her co-conspirators used various physical therapy clinics and other business entities throughout Florida and elsewhere to submit approximately $28.3 million in fraudulent reimbursement claims to Medicare from 2005 through 2009. Medicare paid approximately $14.4 million on those claims.

Grishkoff, a former attorney who was disbarred in 1997, was vice president, director and registered agent in Florida for a Delaware holding company known as Ulysses Acquisitions Inc. Grishkoff and co-conspirators used Ulysses Acquisitions to purchase comprehensive outpatient rehabilitation facilities and outpatient physical therapy providers, including West Coast Rehab Inc. in Fort Myers, Fla.; Rehab Dynamics Inc. in Venice, Fla.; Polk Rehabilitation Inc. in Lake Wales, Fla.; and Renew Therapy Center of Port St. Lucie LLC in Port St. Lucie, Fla., to gain control of these clinics’ Medicare provider numbers.

Working with co-conspirators in Miami and elsewhere, Grishkoff and her co-conspirators obtained identifying information of Medicare beneficiaries through paying kickbacks. They also obtained unique identifying information of physicians. Grishkoff and her co-conspirators then used this information to create and submit false claims to Medicare through the clinics Ulysses Acquisitions purchased. These claims sought reimbursement for therapy services that were not legitimately prescribed and not actually provided.

Grishkoff and co-conspirators also paid kickbacks to co-conspirators who owned other therapy clinics that were used to further the fraud scheme. For example, Grishkoff and co-conspirators used the clinics they controlled to submit false reimbursement claims to Medicare on behalf of Miami-based therapy clinics such as Hallandale Rehabilitation Inc., Tropical Physical Therapy Corporation, American Wellness Centers Inc., and West Regional Center Inc. Grishkoff and co-conspirators would retain approximately 20 percent of the money Medicare paid on these claims and pay the other 80 percent of the fraud proceeds to the co-conspirator clinic owners.

When Grishkoff and her co-conspirators were done using the clinics they acquired through Ulysses Acquisitions, they engaged in sham sales of the clinics to nominee or straw owners, all of whom were recent immigrants to the United States with no background or experience in the health care industry. Grishkoff and others did this in an effort to try to disassociate themselves from the fraudulent operations of their clinics.

This case is being investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Middle District of Florida. This case is being prosecuted by Trial Attorneys Christopher J. Hunter and Andrew H. Warren of the Criminal Division’s Fraud Section and Assistant United States Attorney Simon A. Gaugush of the U.S. Attorney’s Office for the Middle District of Florida.

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, the HHS Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

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

The Justice Department and the Internal Revenue Service (IRS) announced that John Cote, formerly of Danielson, Conn., was convicted today of four counts of tax evasion along with conspiracy to defraud the IRS following a jury trial in the U.S. District Court for the District of Connecticut.

According to court documents and evidence produced at trial, Cote had not filed a timely or valid tax return for the years 1995 through 2009, despite earning income from his work as a consultant in the high technology welding industry.  The evidence showed that Cote and his wife responded to IRS efforts to assess and collect taxes by concealing income and assets from the government and by submitting obstructive letters and other documents, including false criminal complaints against IRS employees.  From 1998 to 2009, Cote caused the companies for which he worked to pay his compensation to nominee entities, including through accounts in Costa Rica and Sweden.  Cote also used a nominee entity in his wife’s name to conceal income and assets from the IRS and in 2003, Cote's wife conveyed their personal residence to this entity.

Following the jury verdict, U.S. District Judge Vanessa Bryant scheduled Cote’s sentencing for April 16, 2014, and Cote remains detained pending sentencing.  For each of the five counts of conviction, Cote faces a statutory maximum sentence of five years in prison and a maximum fine of $250,000.

The case was investigated by special agents of IRS – Criminal Investigation.  Trial Attorneys Jennifer Laraia, Melissa Siskind and Jeffrey McLellan of the Tax Division prosecuted the case.

The government has filed a complaint against Kellogg, Brown & Root Services Inc. (KBR) and Kuwaiti companies La Nouvelle General Trading & Contracting Co. (La Nouvelle) and First Kuwaiti Trading Co. (First Kuwaiti) for submitting false claims in connection with KBR’s contract with the Army to provide logistical support in Iraq, the Department of Justice announced.  KBR is an engineering, construction and services firm headquartered in Houston, Texas.  Kuwait-based La Nouvelle and First Kuwaiti provided transportation, maintenance and other services in support of KBR’s contract with the Army.  

“We depend on companies like KBR and its subcontractors to provide valuable services to our military,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery.  “We will en sure that contractors do not engage in corrupt practices at the expense of our troops abroad, while profiting at the expense of taxpayers at home.”

Allegedly, KBR made claims to the government, knowing them to be false, under a contract with the Army to provide wartime logistical support, known as the Logistics Civil Augmentation Program (LOGCAP) III.  The award of LOGCAP III paved the way for the company to become a critical source for logistical support services in Iraq, which included transportation, maintenance, food, shelter and facilities management.  KBR performed many of these services through subcontracts awarded to foreign companies local to the region, such as La Nouvelle and First Kuwaiti. 

In its complaint, filed in federal court in Rock Island, Ill., the government alleged that, in 2003 and 2004, KBR employees took kickbacks from La Nouvelle and First Kuwaiti in connection with the award and oversight of subcontracts awarded to these companies.  KBR then claimed reimbursement from the government for costs it incurred under the subcontracts that allegedly were inflated, excessive or for goods and services that were grossly deficient or not provided.  For example, KBR allegedly awarded La Nouvelle a subcontract to supply fuel tankers for more than three times the tankers’ value.  La Nouvelle later rewarded the KBR employee who awarded the subcontract with a $1 million bank draft.  As another example, KBR allegedly continued to make monthly lease payments to First Kuwaiti for trucks KBR had already returned to the subcontractor.  KBR billed the government for the costs of both of these subcontracts.  The lawsuit also alleges that KBR used refrigerated trailers to transport ice for consumption by the troops that had previously been used as temporary morgues without first sanitizing them.

“Our office investigated the actions of KBR and related companies, as well as certain KBR employees,” said U.S. Attorney for the Central District of Illinois Jim Lewis.  “We were able to obtain criminal convictions against several subcontract managers whose actions were illegal and caused damage to our military, and we are now committed to pursue these civil claims against the companies themselves.”

The U.S. Attorney’s Office in Rock Island has convicted 10 companies and individuals in connection with wartime contracts in Iraq.  The convictions include three KBR subcontract managers who admitted taking kickbacks or making false statements in connection with the allegations made in the government’s complaint.  Anthony J. Martin pleaded guilty in 2007 to taking kickbacks in return for awarding First Kuwaiti subcontracts for trucks and trailers and also admitted including the amount of the kickbacks in the price of the subcontracts.  In 2005, Jeff Alex Mazon pleaded guilty to making a false written statement in connection with a subcontract for fuel tankers awarded to La Nouvelle in 2003.  And in 2006, Stephen Lowell Seamans admitted taking kickbacks from La Nouvelle, during a guilty plea to a kickback arrangement with another subcontractor, Saudi Arabia-based Tamimi Global Co. Ltd. (Tamimi).  The government previously entered into criminal and civil agreements with Tamimi in which Tamimi paid the U.S. government $13 million, including $7.4 million for civil claims and $5.6 million in criminal fines, to resolve its liability for the kickbacks.

The government is suing KBR, La Nouvelle and First Kuwaiti under the False Claims Act, as well as the Anti-Kickback Act.

“Contractors and subcontractors are expected to comply with their statutory obligations and act in good faith when dealing with the United States government,” said Special Agent in Charge of the Defense Criminal Investigative Service’s Southwest Field Office Janice M. Flores.  “The lawsuit demonstrates the commitment of DCIS and its partner agencies to prevent false billing and corrupt practices involving the military contracting process.”         

Some of the allegations contained in the government’s complaint were originally alleged in a lawsuit filed in a federal court in Houston by a whistleblower, Bud Conyers, under the qui tam provisions of the False Claims Act.  The case was later transferred to the U.S. District Court for the Central District of Illinois in Rock Island, Ill., where LOGCAP III is administered by the Department of Defense at the Rock Island Arsenal.  The False Claims Act authorizes private parties to sue, on behalf of the government, companies and persons whom they believe have falsely claimed federal funds and to share in any recovery.  The Act also allows the government to intervene and take over the action, as it has done in this case.  The government notified the court earlier this year that it was intervening in Conyers’ case and intended to file its own complaint with additional allegations.

The lawsuit is being handled by the Civil Division of the Department of Justice with investigative support by the Defense Contract Audit Agency, the Defense Criminal Investigative Service and the Army Criminal Investigation Command.  The U.S. Attorney’s Office for the Southern District of Texas also participated in the investigation. 

The case is captioned United States ex rel. Conyers v. Kellogg Brown & Root Inc. et al., No. 4:12-cv-04095-SLD-JAG (C.D. Ill.).  The claims asserted in this case are allegations only; there has been no determination of liability except to the extent of admissions made in the criminal proceedings. 

Huey P. Williams Jr., the owner and operator of two durable medical equipment (DME) companies, was arrested yesterday for his alleged role in a $3.4 million Medicare fraud scheme.

Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Kenneth Magidson of the Southern District of Texas, Special Agent in Charge Stephen L. Morris of the FBI’s Houston Field Office, Special Agent in Charge Mike Fields of the Dallas Regional Office of HHS’s Office of the Inspector General (HHS-OIG), and the Texas Attorney General’s Medicaid Fraud Control Unit (MFCU) made the announcement.

The indictment charges Williams, 44, of Katy, Texas, with one count of health care fraud, which carries a maximum penalty of 10 years in prison upon conviction. Williams is expected to make his initial appearance in U.S. District Court for the Southern District of Texas in Houston.

According to the indictment, Williams orchestrated and executed a scheme to defraud Medicare beginning in 2006 and continuing until July 2010. Williams allegedly submitted false and fraudulent claims to Medicare through his Houston-area DME companies – Hermann Medical Supplies Inc. and Hermann Medical Supplies II (Hermann Medical) – which purported to provide orthotics and other DME to Medicare beneficiaries.

Hermann Medical allegedly submitted claims to Medicare for DME, including orthotic devices, which were medically unnecessary and/or never provided. Many of the orthotic devices were components of an arthritis kit and were purported to be for the treatment of arthritis-related conditions. From December 2006 through July 2010, Williams submitted claims of approximately $3.4 million to Medicare.

An indictment is merely a formal accusation. Defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

The case was investigated by the FBI, HHS-OIG and MFCU and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Texas. The case is being prosecuted by Trial Attorney Ashlee Caligone McFarlane of the Fraud Section.

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,700 defendants who have collectively billed the Medicare program for more than $5.5 billion. In addition, HHS’s Centers for Medicare & 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 .

Acting Assistant Attorney General Jocelyn Samuels for the Civil Rights Division and U.S. Attorney Tammy Dickinson for the Western District of Missouri announced that a man and a woman, both from Independence, Mo., were sentenced in federal court today for violating the civil rights of an African-American family by setting fire to their residence.

On Aug. 28, 2013, Logan J. Smith, 25, and Victoria A. Cheek Herrera, 34, pleaded guilty before U.S. District Judge Brian C. Wimes to one count of conspiring to threaten and intimidate a family in Independence from exercising their constitutional right to reside in their home because of their race or color and one count of a civil rights violation for committing a racially-motivated arson.  At the sentencing hearing today, Judge Wimes sentenced Smith to serve 63 months in prison and Cheek Herrera to serve 77 months in prison.

Smith and Cheek Herrera previously admitted that on June 26, 2008, they conspired to injure, oppress, threaten and intimidate an African-American couple and their children in the free exercise of their constitutional rights to occupy and rent their home in Independence, and that they committed this crime because of the victims’ race and color.  According to the defendants’ plea agreements, the incident began when the defendants discussed their desire to set the victim family’s home on fire and they drew a swastika and wrote the words “White Power” on the driveway.  The defendants then asked a juvenile acquaintance for gasoline and created a Molotov cocktail by filling a glass bottle with gasoline and inserting a rag into the bottle to serve as a wick.  The defendants then lit the wick and threw the bottle into the side of the house, which set the residence on fire.

“Every person in America has the right to occupy a home free from racially-motivated violence and threats,” said Assistant Attorney General Samuels.  “Today’s sentences reflect the Civil Rights Division’s commitment to work together with our United States Attorneys and the FBI to ensure that this right is aggressively enforced.” 

“Today’s tough sentences send a strong message that racially-motivated violence and threats will not be tolerated in our community,” said U.S. Attorney Dickinson.  “No American should feel unwelcome or unsafe in any neighborhood because of their race or color.  We will bring to justice those who violate the civil rights of others and hold them accountable for their actions.”

This case is being prosecuted by First Assistant U.S. Attorney David M. Ketchmark and Trial Attorney Shan Patel of the Civil Rights Division.  It was investigated by the FBI.

The Justice Department reached an agreement today with SD Staffing LLC (SD Staffing), aka Atwork Personnel Services Inc., a company based in Methuen, Mass., resolving claims that the staffing company engaged in citizenship status discrimination in violation of the Immigration and Nationality Act (INA).

The department’s investigation, which was initiated based on a referral from the U.S. Citizenship and Immigration Services (USCIS), found that SD Staffing required work-authorized non-U.S. citizens to produce specific documents in connection with SD Staffing’s use of the E-Verify program.  E-Verify is an Internet-based electronic verification system used by employers and administered by USCIS that confirms an individual’s employment eligibility.  The department’s investigation confirmed that SD Staffing requested unnecessary documents to work-authorized non-U.S. citizens, but not to similarly-situated U.S. citizens.

Under the settlement agreement, SD Staffing will identify and provide back pay to individuals who suffered lost wages between September 2011 and January 2014 as a result of the company’s alleged discriminatory documentary practices; pay $10,500 in civil penalties to the United States; undergo training on the anti-discrimination provision of the INA; and be subject to monitoring of its employment eligibility verification practices for two years. 

“Employers cannot create discriminatory hurdles for work-authorized non-U.S. citizens in the employment eligibility verification process, which includes the E-Verify program,” said Acting Assistant Attorney General Jocelyn Samuels for the Civil Rights Division.  “We commend SD Staffing for restructuring its hiring processes and documentary practices to ensure that it will no longer treat work-authorized new hires differently based on their citizenship status.”

The Office of Special Counsel for Immigration-Related Unfair Employment Practices (OSC) is responsible for enforcing the anti-discrimination provision of the INA.  The case was handled by OSC Trial Attorney Luz V. Lopez-Ortiz.  For more information about protections against employment discrimination under immigration laws, call the OSC’s worker hotline at 1-800-255-7688 (1-800-237-2525, TDD for hearing impaired), call the OSC’s employer hotline at 1-800-255-8155 (1-800-362-2735, TDD for hearing impaired), sign up for a no-cost webinar at www.justice.gov/about/osc/webinars.php, email [email protected] or visit the website at www.justice.gov/crt/about/osc.  

Applicants or employees who believe they were subjected to different documentary requirements based on their citizenship or immigration status or national origin should contact the above-mentioned worker hotline for assistance.

The operator and director of nursing of a home health agency based in Richmond, Texas, was arrested yesterday for her alleged role in a Medicare fraud scheme and a conspiracy to structure bank withdrawals. The owner and operator of the same home health agency was also arrested yesterday for his alleged role in the conspiracy to structure bank withdrawals.

Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Kenneth Magidson of the Southern District of Texas, Special Agent in Charge Stephen L. Morris of the FBI’s Houston Field Office, Special Agent in Charge Lucy Cruz of the Houston Field Office of the IRS-Criminal Investigation Division (IRS-CI), Special Agent in Charge William Fergus of the Chicago Regional Office of the United States Railroad Retirement Board-Office of Inspector General (RRB-OIG), Special Agent in Charge Mike Fields of the Dallas Regional Office of HHS’s Office of the Inspector General (HHS-OIG), and the Texas Attorney General’s Medicaid Fraud Control Unit (MFCU) made the announcement.

The director of nursing, Stella Maduka, 49, of Richmond, was charged with one count of healthcare fraud and eight counts of structuring withdrawals, which each carry a maximum penalty of 10 years in prison, and one count of making false statements relating to healthcare matters and one count of conspiracy to structure bank withdrawals to avoid reporting requirements, which each carry a maximum penalty of five years in prison. The owner, Felix Maduka, 54, of Richmond, who is also Stella Maduka’s husband, was charged with one count of conspiracy to structure bank withdrawals to avoid reporting requirements and eight counts of structuring bank withdrawals.

According to the indictment, Stella Maduka used a Texas-based billing service to bill Medicare for home health services that were never provided and, in many instances, not medically necessary. Stella Maduka also created phony medical records to perpetrate the healthcare fraud. Stella Maduka and Felix Maduka structured more than $100,000 in cash withdrawals from the bank accounts where they received Medicare payments to avoid detection by the federal government.

An indictment is merely a formal accusation. Defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

The case was investigated by the FBI, IRS-CI, RRB-OIG, HHS-OIG, and MFCU under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Texas. The case is being prosecuted by Trial Attorney William S.W. Chang of the Criminal Division’s Fraud Section.

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,700 defendants who have collectively billed the Medicare program for more than $5.5 billion. In addition, Health and Human Services’ Centers for Medicare & Medicaid Services, working in conjunction with Health and Human Services-Office of the Inspector General, 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 Boeing Company, General Dynamics Corporation, and the United States have formally asked the United States Court of Federal Claims to dismiss, as part of a settlement, their 23-year old dispute involving the Department of the Navy's 1991 default termination of a $4.8 billion contract awarded to Boeing's predecessor, McDonnell Douglas Corporation, and General Dynamics, to develop the A-12 carrier-based stealth aircraft. Under the settlement, the contractors will provide aircraft and services to the military valued at $400 millionand the government will not pay any money in connection with the contractors’ claims against the United States.  The settlement was authorized as part of the National Defense Authorization Act for Fiscal Year 2014.

 
While performing the contract in the late 1980s, the contractors experienced significant schedule delays and cost overruns.  After the secretary of defense declined to recommend that the president provide extraordinary relief to the contractors in early 1991, the Department of the Navy terminated the contract for default and sought the return of $1.33 billion which had been paid to the contractors under the terms of the contract.  The contractors brought suit in the Court of Federal Claims to challenge the default termination, to retain the $1.33 billion paid and to assert a claim for an additional amount well over $1 billion, plus interest, for their purported unreimbursed performance costs.   

 
After five trials and three appeals over two decades of litigation, including an appeal to the United States Supreme Court, the courts resolved most of the case.  Litigation over one unresolved issue remained in the Court of Federal Claims. 

 
“We are gratified that this decades-long litigation has been amicably resolved,” said Assistant Attorney General for the Civil Division Stuart F. Delery.  “The resolution provides value to the government and brings this protracted and complex dispute to an end.  The Department of Justice thanks the Department of the Navy for its commitment and support in this long-running effort.”

 
“We are closing a 23-year-long chapter in the annals of naval aviation and further strengthening, through the contractors’ in-kind payment, the Navy’s capabilities and capacities,” said Secretary of the Navy Ray Mabus.  “The litigation was protracted and difficult, but it saved the Navy billions of dollars.  We thank the Justice Department for its superb representation over these many years.”

The contractors will each provide the Navy with approximately $200 million in goods or services under the agreement announced today.  General Dynamics will provide a credit against a contract to build the DDG-1002 guided missile destroyer, and Boeing will provide three EA-18G aircraft and a credit for converting the existing multi-year contract to a firm-fixed price contract.   The settlement was authorized as part of the National Defense Authorization Act for Fiscal Year 2014, which the President signed into law on December 26, 2013.

 
The government’s litigation team was staffed by the Department of Justice, Civil Division, Commercial Litigation Branch, and the Department of the Navy’s Office of the General Counsel. 

The case is captioned The Boeing Co. (successor to McDonnell Douglas Corp.) and General Dynamics Corp. v. United States , No. 91-1204C (Fed. Cl.).                                              

The Justice Department announced today that General Electric Hitachi Nuclear Energy Americas LLC (GE Hitachi) has agreed to pay $2.7 million to resolve allegations under the False Claims Act that it made false statements and claims to the Department of Energy and the Nuclear Regulatory Commission (NRC) concerning an advanced nuclear reactor design.  GE Hitachi, a provider of nuclear energy products and services headquartered in Wilmington, N.C., is a subsidiary of General Electric Company (GE) that is also partially owned by Hitachi Ltd., a multinational engineering and manufacturing firm headquartered in Tokyo, Japan.  GE is headquartered in Fairfield, Conn. 

 
“Transparency and honesty are absolutely critical when dealing with issues relating to the design of a nuclear reactor,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery.  “The Department of Justice will protect federal funds and the Nuclear Regulatory Commission’s crucial mandate of ensuring public safety.”   

 
“Fraud involving government contracts will be zealously pursued in North Carolina,” said U.S. Attorney for the Eastern District of North Carolina Thomas G. Walker.  “We encourage our citizens to report fraud related to government contracts and our federal programs.” 

 
GE Hitachi allegedly made false statements to the NRC and Department of Energy about a component of the advanced nuclear Economic Simplified Boiling-Water Reactor (ESBWR) known as the steam dryer.  A steam dryer removes liquid water droplets from steam produced by the nuclear reaction that generates electricity in boiling-water type reactors.  The NRC requires that applicants for nuclear reactor design certification, such as GE Hitachi, demonstrate that vibrations caused by the steam dryer will not result in damage to a nuclear plant.  The government alleged that GE Hitachi concealed known flaws in its steam dryer analysis and falsely represented that it had properly analyzed the steam dryer in accordance with applicable standards and had verified the accuracy of its modeling using reliable data.     

Between 2007 and 2012, GE Hitachi received funding from the Department of Energy to cover up to half of the cost of developing, engineering and obtaining design certification for the advanced nuclear ESBWR.  The NRC, which regulates the civilian use of nuclear power in the U.S., is responsible for determining whether to approve GE Hitachi’s application for the reactor design certification.  The NRC is still reviewing the application and has not reached a final decision on the certification. 

 
“The Nuclear Regulatory Commission supports the settlement and appreciates the Department of Justice’s close coordination during its investigation of these allegations,” said Director of NRC’s Office of New Reactors Glenn Tracy.  “The NRC continues to rigorously review the ESBWR application in order to reach a final design certification decision, ensure compliance with NRC regulations and protect public health and safety.”

 
The allegations resolved by this settlement arose from a whistleblower lawsuit filed under the False Claims Act by LeRay Dandy, a former employee of GE Hitachi.  Under the False Claims Act, private citizens can sue on behalf of the government and share in any recovery.  Dandy’s share of the settlement has not been determined.   

This case was handled by the Department of Justice Civil Division, Commercial Litigation Branch; the U.S. Attorney’s Office for the Eastern District of North Carolina and the Offices of Inspector General for the Nuclear Regulatory Commission and the Department of Energy.  

The lawsuit is captioned United States ex rel. Dandy v. General Electric Hitachi Nuclear Energy Americas LLC, General Electric Company, 7:12-cv-009 (E.D.N.C.).  The claims resolved by the settlement are allegations only, and there has been no determination of liability.

U.S. Attorney General Eric Holder on Thursday urged Congress to pass the bipartisan Smarter Sentencing Act, introduced by Senators Dick Durbin and Mike Lee. A copy of the Attorney General's statement, which was recorded as an online video, appears below:   “Our criminal justice system works only when all Americans are treated equally under the law. 

That’s why, in 2010, Congress passed the landmark Fair Sentencing Act, marking the culmination of persistent efforts – with the leadership of President Obama – to reduce unjust disparities in sentencing for similar offenses involving different types of drugs.

More recently, President Obama took another step by commuting the sentences of eight individuals who were sentenced under the outdated sentencing regime. 

And at the Justice Department, we’ve announced additional reforms – under our “Smart on Crime” initiative – to ensure that individuals accused of certain low-level federal drug crimes no longer face excessive mandatory minimum sentences that are out of proportion with their alleged conduct – and serve no deterrent purpose.

These reforms have the potential to help make our criminal justice system not only fairer, but also – by reducing the burden on our overcrowded prison system – more efficient. 

And now, we have the opportunity for leaders from both parties to come together to do even more.

Today, I’m urging Congress to pass common-sense reforms like the bipartisan Smarter Sentencing Act, introduced by Senators Dick Durbin and Mike Lee – which would give judges more discretion in determining appropriate sentences for people convicted of certain federal drug crimes.

 This bill would also provide a new mechanism for some individuals – who were sentenced under outdated laws and guidelines – to petition judges for sentencing reductions that are consistent with the Fair Sentencing Act.

Thanks to the leadership of Senators Durbin and Lee – along with Chairman Patrick Leahy and Senator Rand Paul – it’s clear that these and similar proposals enjoy bipartisan support on Capitol Hill. 

These reforms would advance the goals of the Smart on Crime initiative – and other efforts that are currently underway – by fundamentally improving policies that exacerbate, rather than alleviate, key criminal justice challenges.

And such legislation could ultimately save our country billions of dollars in prison costs while keeping us safe.

I look forward to working with members of both parties to refine and advance these proposals in the days ahead. 

And I pledge my own best efforts – and those of my colleagues throughout the Justice Department – to continue to strengthen America’s criminal justice system, and to build the more just society that everyone in this country deserves.”

The full video message can be viewed online at: http://www.justice.gov/agwa.php.

Three Georgia men have been charged in a 51-count indictment for their alleged participation in fraud and corruption schemes at the Marine Corps Logistics Base (MCLB) in Albany, Ga., resulting in the loss of millions of dollars to the United States government.

Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and U.S. Attorney Michael J. Moore for the Middle District of Georgia made the announcement after the indictment was unsealed in the Middle District of Georgia today.

Christopher Whitman, 48, co-owner of United Industrial of Georgia Inc. (also known as ULOC), an Albany-based trucking company and freight transportation broker , was indicted on 43 counts of money, property and honest services wire fraud, five counts of bribery and one count of theft of government property. Shawn McCarty, 36, of Albany, a former employee at the MCLB-Albany, was charged with 30 counts of money, property and honest services wire fraud and one count of bribery; and Bradford Newell, 43, of Sylvester, Ga., also a former employee at the MCLB-Albany, was charged with 13 counts of money, property and honest services wire fraud, one count of bribery, and one count of theft of government property.

The three men were arrested earlier today and appeared before U.S. Magistrate Judge Thomas Q. Langstaff. Judge Langstaff ordered the three men detained pending further hearings next week.

According to the indictment, Whitman paid nearly $1 million in bribes to Mitchell Potts, the former traffic office supervisor for the Defense Logistics Agency (DLA) at MCLB-Albany, Jeff Philpot, the former lead transportation assistant in the traffic office, and Shawn McCarty, another transportation assistant in the traffic office, to obtain commercial trucking business from the DLA. The indictment alleges that Potts, Philpot and McCarty used their official positions to defraud the government and benefit ULOC by helping ULOC obtain transportation contracts loaded with unnecessary premium-priced requirements – including expedited service; removable gooseneck trailers, which do not require a loading dock and are therefore more expensive than standard trailers; and exclusive use, which requires that freight be shipped separately from other equipment – even if that results in a truck not being filled to capacity. The indictment alleges that Whitman and ULOC brokered these shipments for service without the premium specifications and on fewer trucks than requisitioned by DLA, but they billed the government at rates approved by the corrupt officials. These actions are alleged to have resulted in ULOC profits grossing more than $20 million over less than four years.

Whitman is accused of orchestrating a scheme to steal and sell surplus equipment from MCLB-Albany worth more than $1 million. Whitman allegedly paid approximately $200,000 in total bribes to Shelby Janes, the former inventory control manager of the Distribution Management Center (DMC) at MCLB-Albany, and Newell, an assistant to Janes, who used their official positions to help Whitman steal surplus equipment from the base, including bulldozers, cranes and front-end loaders. The indictment alleges that Whitman improved and painted the stolen equipment.

An indictment is merely a charge and the defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

If convicted, the defendants face up to 20 years in prison for each wire fraud count and 15 years in prison for each bribery count. The theft count carries a maximum prison term of 10 years. Each charged count carries a maximum fine of $250,000 or twice the gross gain.

Prior to this indictment, one former ULOC employee and three DLA officials pleaded guilty in connection with the fraud and corruption schemes alleged in the indictment. On Oct. 10, 2013, Kelli Durham, ULOC’s former manager, pleaded guilty to conspiracy to commit wire fraud, admitting to intentionally overbilling the United States for services ULOC did not perform, resulting in losses ranging from $7 million to $20 million, and for receiving $905,685 for her role. She faces a maximum penalty of five years in prison. In May 2013, Potts and Philpot pleaded guilty to bribery for collectively accepting more than $700,000 in bribes; and in February 2013, Janes pleaded guilty to bribery for receiving nearly $100,000 in bribes. The three former officials each face up to 15 years in prison.

The case is being investigated by the Naval Criminal Investigative Service, with assistance from the Dougherty County District Attorney’s Office Economic Crime Unit, Defense Criminal Investigative Service, DLA Office of the Inspector General, and the Department of Labor Office of the Inspector General. The case is being prosecuted by Trial Attorneys Richard B. Evans and J.P. Cooney of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney K. Alan Dasher of the Middle District of Georgia.

A campaign worker was indicted yesterday by a federal grand jury in the Southern District of Texas for allegedly paying voters to vote in a Donna, Texas school board election. Two other campaign workers were indicted on similar charged last week for alleged vote-buying in the election.

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 made the announcement.

The three indictments charge Donna residents Diana Balderas Castaneda, 48; Guadalupe Zapata Escamilla, 72; and Rebecca Gonzalez, 44, with one count each of vote-buying. They face a maximum penalty of five years in prison upon conviction.

According to the indictments, a general election was held in Donna on Nov. 6, 2012, which included candidates for the presidential election, as well as for various state, county and local offices, including Donna School Board. The three defendants are alleged to have assisted in the campaign to elect the Democratic candidates to the Donna School Board. In the course of that work, the three women are accused of knowingly and willfully paying and offering to pay voters for voting in this election.

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

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

SUMMARY: The Executive Office for Immigration Review invites interested parties to participate in a meeting regarding the new Country Pages section of the Virtual Law Library, the agency’s online legal research resource. The new section is an extensive collection of information about the conditions in countries around the world.

DATE: Friday, Jan. 31, 2014, at 2 p.m.

MEETING LOCATION: 5107 Leesburg Pike, Suite 1800, Falls Church, VA.

RSVP: To RSVP for the meeting, please contact Lauren Alder Reid, Counsel for Legislative and Public Affairs, 703-305-0289, [email protected], by noon on Jan. 30, 2014. Attendance will be limited to the first forty (40) individuals to RSVP. Those who are unable to attend in person will be able to participate via teleconference. Call-in information will be available to those who RSVP. To attend the meeting via conference call, please RSVP with the name(s) of the attendee(s), the attendee’s organization, and an email address where instructions may be sent for accessing the conference call.

- EOIR -

The Executive Office for Immigration Review (EOIR) is an agency within the Department of Justice. Under delegated authority from the Attorney General, immigration judges and the Board of Immigration Appeals interpret and adjudicate immigration cases according to United States immigration laws. EOIR’s immigration judges conduct administrative court proceedings in immigration courts located throughout the nation. They determine whether foreign-born individuals—whom the Department of Homeland Security charges with violating immigration law—should be ordered removed from the United States or should be granted relief from removal and be permitted to remain in this country. The Board of Immigration Appeals primarily reviews appeals of decisions by immigration judges. EOIR’s Office of the Chief Administrative Hearing Officer adjudicates immigration-related employment cases. EOIR is committed to ensuring fairness in all of the cases it adjudicates.

John Mills and Terrance Allen, both of Malone, New York, pleaded guilty yesterday in federal court in Albany, New York, to conspiracy to violate the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) and substantive CERCLA counts in relation to the illegal removal, handling, and disposal of asbestos from properties owned and operated by John Mills, announced Robert G. Dreher, Acting Assistant Attorney General for the Environment and Natural Resources Division of the Department of Justice.

Mills and Allen were charged in an 11-count indictment alleging a conspiracy to impede the functions of the U.S. Environmental Protection Agency (EPA) and the U.S. Department of Labor, Occupational Safety and Health Administration, and to violate the Clean Air Act and CERCLA, along with substantive violations of the Clean Air Act and CERCLA. The indictment further charged Mills and Allen with making false statements to law enforcement officers and Mills with retaliating against a witness. CERCLA requires that owners and operators of regulated facilities notify the National Response Center immediately after becoming aware of the release of more than one pound of asbestos into the environment.

Mills and Allen pleaded guilty to one count of conspiracy to violate CERCLA. Mills also pleaded guilty to two counts of knowingly violating CERCLA for failing to immediately report the release of more than a pound of asbestos from properties owned by Mills. In addition to the conspiracy, Allen pleaded guilty to one count of knowingly violating CERCLA.

In open court Tuesday, Mills and Allen admitted that they knowingly failed to report to the National Response Center the release of asbestos, in the form of thermal system insulation, or “pipe wrap,” that had been removed from the basement of buildings owned and operated by John Mills, as soon as they knew of the release.  According to the indictment, the defendants illegally removed and disposed of more than 260 linear feet of pipe wrap containing asbestos.  The defendants directed an employee to remove the asbestos containing pipe wrap without warning him or giving him adequate personal protective equipment.  They transported and caused others to transport that pipe wrap, which was in open bags, in the open bed of a pickup truck.

They further admitted that they conspired together to violate CERCLA.  The asbestos pipe wrap was deposited by the defendants in a UHaul-style box truck owned by Mills and a shed maintained by the Malone Department of Public Works in an effort to conceal the material from authorities.

Conspiracy to violate CERCLA carries a maximum penalty of five years in prison and a $250,000 fine.  The defendants are scheduled to be sentenced by in Albany on May 12, 2014.

The investigation was conducted by the Environmental Protection Agency Criminal Investigation Division and the New York State Department of Labor Asbestos Control Bureau with assistance from the New York State Department of Environmental Conservation, the Malone Police Department, and the Malone Department of Public Works.  The case is being prosecuted by Trial Attorneys Gary N. Donner and Lana N. Pettus, paralegal Puja Moozhikkattu, and litigation support specialist Elga Ozols of the Environmental Crimes Section of the U.S. Department of Justice’s Environment and Natural Resources Division.     

Today the Justice Department’s Civil Rights Division announced its letter of findings determining that prison officials at the Alabama Department of Corrections (ADOC) and the Julia Tutwiler Prison for Women (Tutwiler) violate women prisoners’ constitutional rights by failing to take reasonable steps to protect them from harm due to sexual abuse and sexual harassment caused by correctional staff.  Specifically, the Justice Department found that prison officials have long been on notice of the risks to women prisoners and have chosen to ignore them.  The findings also included a notice that the investigation will be expanded to examine allegations of additional constitutional violations.

The department found that women prisoners at Tutwiler live in a toxic environment with repeated and open sexual behavior.  The conduct to which women are exposed includes:  officers forcing women to engage in sexual acts with officers in exchange for basic sanitary supplies; male officers openly watching women shower or use the toilet; a staff facilitated “strip show”; a constant barrage of sexually offensive language; punishment of prisoners who report improper conduct; and encouraging improper sexual contact between prisoners.  The sexual abuse and harassment is grossly underreported due to insufficient staffing and supervision, inadequate policies and procedures, a heightened fear of retaliation and an inadequate investigative process. 

“Our investigation has revealed serious systemic operational deficiencies at Tutwiler that have exposed women prisoners to harm and serious risk of harm from staff-on-prisoner sexual abuse and sexual harassment,” said Acting Assistant Attorney General Jocelyn Samuels for the Civil Rights Division.  “These problems have been festering for years, and are well known to Alabama prison officials.  Remedying these deficiencies is critical to ensuring constitutionally protected treatment of women prisoners at Tutwiler and will promote public safety.” 

The department’s comprehensive investigation involved an in-depth review and analysis of documents, including policies and procedures, incident reports, investigative reports, orientation materials and staff training materials.  The department also interviewed prison officials and administrative and security staff, as well as current and former women prisoners. 

The expanded investigation will examine allegations of excessive use of force, constitutionally inadequate conditions of confinement, constitutionally inadequate medical and mental health care and discriminatory treatment based on national origin, sexual orientation and gender identity.  The department’s decision to expand its investigation of conditions at Tutwiler stemmed from the department’s review of information suggesting that the systemic deficiencies at Tutwiler that facilitated staff sexual misconduct may also lead to constitutionally inadequate conditions of confinement. 

“The department stands ready to work with the state of Alabama on solving the problems at Tutwiler,” said U.S. Attorney George L. Beck Jr. for the Middle District of Alabama.  “The report has identified a very serious and troubling situation at the facility.  Action needs to be taken immediately.  I am certain that Commissioner Thomas and the governor’s office will continue to cooperate in eradicating these deplorable conditions.”

The department commends Commissioner Kim Thomas and his staff for the cooperation they have shown, and for their receptivity to concerns raised, and looks forward to continuing to work with ADOC and Tutwiler officials in a collaborative manner on the expanded investigation and to resolve the existing findings expeditiously and under mutually agreeable terms. 

For more information on the Civil Rights Division, please visit www.justice.gov/crt

Four individuals were sentenced this week for their respective roles in trafficking the identities and corresponding identity documents of Puerto Rican U.S. citizens.

Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and U.S. Attorney Rosa E. Rodríguez-Vélez of the District of Puerto Rico made the announcement. The sentencings took place in front of U.S. District Judge Gustavo A. Gelpí in the District of Puerto Rico.

Domingo Pablo Gutierrez, 52, a Guatemalan national formerly of Albertville, Ala., was sentenced today to serve 30 months in prison to be followed by three years of supervised release. Gutierrez agreed to forfeit $40,000 in proceeds and to be removed from the United States after the completion of his sentence. On Aug. 22, 2013, Gutierrez pleaded guilty in front of U.S. Magistrate Judge Bruce J. McGiverin of the District of Puerto Rico to one count of conspiracy to commit identification fraud and one count of conspiracy to commit human smuggling for financial gain.

On Jan. 21, 2014, Moises Lara-Ceballos, 38, a Mexican national formerly of Seymour, Ind., was sentenced to serve 54 months in prison to be followed by three years of supervised release. Lara-Ceballos agreed to forfeit $422,793 in proceeds and to be removed from the United States after the completion of his sentence. On Sept. 20, 2013, Lara-Ceballos pleaded guilty in front of U.S. Magistrate Judge Marcos E. López to one count of conspiracy to commit identification fraud, one count of aggravated identity theft, and one count of illegal reentry after deportation.

Juan Quero-Mendez, 28, a Mexican national formerly of Lilburn, Ga., was also sentenced on Jan. 21, 2014, to serve 36 months in prison and three years of supervised release. The court ordered the defendant to forfeit $17,180 in proceeds and to be removed from the United States after the completion of his sentence. On Sept. 20, 2013, Quero-Mendez pleaded guilty in front of U.S. Magistrate Judge Camille L. Vélez-Rive of the District of Puerto Rico to one count of conspiracy to commit identification fraud and one count of conspiracy to commit human smuggling for financial gain.

Adonis Ramirez-Segura, 54, a Dominican national and a legal permanent resident of Columbus, Ohio, was sentenced on Jan. 21, 2014, to serve 22 months in prison to be followed by three years of supervised release. On Sept. 20, 2013, Ramirez-Segura pleaded guilty in front of U.S. Magistrate Judge Camille L. Vélez-Rive to one count of conspiracy to commit identification fraud and one count of Social Security fraud.

The four defendants were charged in a superseding indictment returned by a federal grand jury in Puerto Rico on March 22, 2012. To date, 53 individuals have been charged for their roles in the identity trafficking scheme. All 49 arrested defendants have pleaded guilty and 36 defendants have been sentenced.

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

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

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

According to court documents, Quero-Mendez was an identity broker who operated in Lilburn, Ga.; Ramirez-Segura was an identity broker who operated in Columbus, Ohio; Lara-Ceballos was an identity broker who operated in Seymour, Ind.; and Gutierrez was an identity broker who operated in Albertville, Ala.

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

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

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

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

The Justice Department and the Internal Revenue Service (IRS) announced today that on Jan. 21, 2014, a federal jury in Palm Beach, Fla., convicted Paul F. Wrubleski, a resident of Weston, Fla., of one count of corruptly impeding the due administration of the internal revenue laws and four counts of filing false claims for tax refunds.  Wrubleski was remanded into custody yesterday.

According to court documents and the evidence presented at trial, Wrubleski had a decade-long pattern of filing false documents with the IRS.  Wrubleski impeded the IRS by filing false W-4 forms that claimed he was exempt from income tax withholding and by filing false tax returns, including four tax returns that requested over $1.5 million in federal refunds.  Wrubleski also sent obstructive letters, tax returns and other false documents to the IRS between 1999 and 2010.  In addition, the indictment alleged and the evidence proved that Wrubleski filed for bankruptcy in 2006 in order to impede IRS collection actions.

Sentencing is scheduled for April 3, 2014.  Wrubleski faces a statutory maximum potential sentence of 23 years in prison and faces a fine of up to $1.2 million.

Assistant Attorney General Kathryn Keneally of the Tax Division commended the efforts of special agents of IRS – Criminal Investigation who investigated the case, as well as Tax Division Trial Attorneys Charles Edgar Jr. and Jed Silversmith, who prosecuted the case, with local assistance from the U.S. Attorney’s Office for the Southern District of Florida.

Additional information about the Tax Division and its enforcement efforts may be found at  www.justice.gov/tax .

The U.S. Justice Department released the following statement by department spokesman Brian Fallon in response to President Obama’s speech on U.S. signals intelligence:

“The Attorney General believes that the President’s reforms will further ensure that the proper balance is struck between the need to keep the nation safe and the need to safeguard our civil liberties. In the weeks ahead, the Justice Department will work closely with the intelligence community and other key administration officials to implement the President’s reforms.”

Contract therapy providers RehabCare Group Inc., RehabCare Group East Inc. and Rehab Systems of Missouri and management company Health Systems Inc. have agreed to pay $30 million to resolve claims that they violated the False Claims Act by engaging in a kickback scheme related to the referral of nursing home business, the Justice Department announced today. Additionally, as part of this settlement, the entities have agreed to restructure their business arrangement.

“Health care providers that attempt to profit from illegal kickbacks will be held accountable,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery.  “We will continue to advocate for the appropriate use of Medicare funds and the proper care of our senior citizens.”

Between March 1, 2006, and Dec. 31, 2011, RehabCare allegedly arranged with Rehab Systems of Missouri to obtain Rehab Systems of Missouri ’s contracts to provide therapy to patients residing in 60 nursing homes controlled by Rehab Systems majority-owner James Lincoln. In exchange for this stream of referrals, RehabCare allegedly paid Rehab Systems a $400,000 to $600,000 upfront payment and allowed Rehab Systems to retain a percentage of the revenue generated by each referral.

“The Anti-Kickback Statute is intended to protect patients and federal health care programs from fraud and abuse,” said Acting U.S. Attorney for the District of Minnesota John Marti. “We will remain vigilant in pursuing entities that improperly further their financial interest at the expense of the Medicare Trust Fund.”

“This settlement sends a message to those who seek to improperly take advantage of the Medicare program,” said U.S. Department of Health and Human Services Office of Inspector General Special Agent in Charge Gerald T. Roy. “The Office of the Inspector General, Kansas City Regional Office will continue to work aggressively to eliminate this type of misconduct from our health care system.”

“The FBI will continue to work with its partners to combat this type of abuse,” said Special Agent in Charge of the FBI’s Minneapolis Office J. Chris Warrener. “It remains committed to the elimination of fraud to ensure the integrity of federal health care programs.”

This civil 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 more than $17.1 billion through False Claims Act cases, with more than $12.2 billion of that amount recovered in cases involving fraud against federal health care programs.

The settlement resolves allegations originally brought in a lawsuit filed by a whistleblower under the qui tam provisions of the False Claims Act, which allow private parties to bring suit on behalf of the government and to share in any recovery.  The whistleblower will receive $5.7 million as its share of the recovery in this case.

The case was handled by the U.S. Attorney’s Office for the District of Minnesota with assistance from the Justice Department’s Civil Division, the U.S. Attorney’s Office for the Eastern District of Missouri, the Federal Bureau of Investigation and the U.S. Department of Health and Human Services Office of Inspector General.  This action was supported by the Elder Justice and Nursing Home Initiative that coordinates the department’s activities combating elder abuse, neglect and financial exploitation, especially as they impact beneficiaries of Medicare, Medicaid and other federal health care programs. 

The lawsuit is captioned U.S. ex rel. Health Dimensions Rehabilitation Inc. v. RehabCare Group Inc., et. al., Case No. 4:12-cv-00848 AGF (E.D. Mo.). The claims settled by this agreement are allegations only; there has been no determination of liability. 

A patient recruiter for a fraudulent Miami-area mental health company, American Therapeutic Corporation (ATC), pleaded guilty today for her participation in a $190 million Medicare fraud scheme.

Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida, Special Agent in Charge Michael B. Steinbach of the FBI’s Miami Field Office and Special Agent in Charge Christopher B. Dennis of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) Office of Investigations Miami Office made the announcement.

Miami resident Mayelin Santoyo, 28, pleaded guilty before U.S. District Judge K. Michael Moore in the Southern District of Florida to one count of conspiracy to receive health care kickbacks. Sentencing has been scheduled for March 28, 2014. On Nov. 25, 2013, co-defendant Jose Martin Olivares, 36, also a Miami resident and patient recruiter, pleaded guilty to one count of conspiracy to receive health care kickbacks before U.S. District Judge Donald L. Graham for his role in this scheme. Olivares’s sentencing is set for Feb. 4, 2014.

According to court documents, Santoyo was a patient recruiter for the now-defunct ATC. ATC and its management company, Medlink Professional Management Group Inc., were Florida corporations headquartered in Miami. ATC operated purported partial hospitalization programs (PHPs), a form of intensive treatment for severe mental illness, in seven different locations throughout South Florida and Orlando.

Santoyo recruited Medicare beneficiaries to attend ATC’s PHP program in exchange for kickbacks in the form of checks and cash. The amounts of the kickbacks were based on the number of days each recruited patient spent at ATC. Santoyo knew that the patients she recruited for ATC were not qualified to receive PHP treatment.

ATC’s owners and operators paid millions of dollars in kickbacks to the owners and operators of various assisted living facilities and halfway houses, as well as to patient recruiters, like Santoyo, in exchange for delivering ineligible patients to ATC. According to court documents, to obtain the cash required to support the kickbacks to recruiters such as Santoyo, the co-conspirators laundered millions of dollars of payments from Medicare.

In related cases, ATC, Medlink and various owners, managers, doctors, therapists and patient recruiters of ATC and Medlink have already pleaded guilty or have been convicted at trial. In September 2011, ATC’s owner, Lawrence Duran, was sentenced to 50 years in prison for his role in orchestrating and executing the scheme to defraud Medicare.

This case was investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida. The case was prosecuted by Assistant Chief Robert A. Zink and Trial Attorney Anne P. McNamara of the Criminal Division’s Fraud Section.

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

Two men have been indicted by a federal grand jury in Las Vegas for offenses involving the federal renewable fuel program that allegedly netted them more than $37 million, announced the Justice Department’s Environment and Natural Resources Division, Criminal Division, and the U.S. Attorney’s Office for the District of Nevada. The 57-count indictment against James Jariv, 63, of Las Vegas, and Nathan Stoliar, 64, of Australia, includes allegations of conspiracy, wire fraud, false statements under the Clean Air Act, obstruction of justice and conspiracy to engage in money laundering.

The indictment was unsealed late Wednesday following Jariv’s initial appearance in federal court in Las Vegas, which followed his arrest on Tuesday. Stoliar resides in Australia.

The Energy Independence and Security Act of 2007 created a number of federally-funded programs that provided monetary incentives for the production of biodiesel and to encourage biodiesel use in the United States. Biodiesel producers and importers could generate and attach credits known as “renewable identification numbers” or RINs to biodiesel they produced or imported. Because certain companies need RINs to comply with regulatory obligations, RINs have significant market value. In addition, in order to create an incentive for biodiesel in the United States to be used in the United States, anyone who exports biodiesel is required to obtain these valuable RINs and provide them to EPA. The market price charged for exported biodiesel therefore includes the value an exporter is required to later spend to acquire these RINs.

The indictment alleges that beginning around June of 2009, the two defendants, James Jariv and Nathan Stoliar, operated and controlled a company -- City Farm Biofuel in Vancouver, British Columbia, Canada -- that held itself out as a producer of biodiesel from “feedstocks” such as animal fat and vegetable oils. Jariv also operated and controlled a company based in Las Vegas, Nevada, called Global E Marketing. The government alleges that these defendants claimed to produce biodiesel at the City Farm facility, claimed to import and sell biodiesel to Global E Marketing, and then generated and sold RINs based upon this claimed production, sale and importation. In reality, little to no biodiesel produced at City Farm was ever imported and sold to Global E Marketing as claimed. The indictment alleges that the defendants’ scheme allowed them to generate approximately $7 million in RINs that were fraudulent, which were then sold to companies that needed to obtain them.

The indictment also alleges that, beginning around the same time period and continuing through Dec. 31, 2013, the defendants, using their company MJ Biodfuels, bought over 23 million gallons of RIN-less biodiesel that had been blended with small amounts of petroleum diesel, known as B99, from companies in the United States. The defendants sold some of this biodiesel to purchasers in the United States, claiming it was pure biodiesel, known as B100, produced at the City Farm facility and imported into the United States. By claiming this biodiesel was B100 and not RIN-less B99, the defendants were able to claim the fuel was eligible to be used to generate credits and incentives, and were able to sell the fuel for significantly more than they otherwise would have been able. The defendants also exported the RIN-less B99 they bought in the United States to Canada. The defendants then sold the biodiesel in Canada, and conspired not to acquire and provide RINs for these exports to the United States as they were required to do, but instead to keep the money they received from the sales for themselves. The indictment alleges that, in doing so, the defendants failed to give to the United States RINs worth in excess of $30 million, keeping this money for themselves instead.

The indictment alleges that the defendants created false records and made false statements to conceal their fraudulent claims of biodiesel production, importation, sale and fraudulent RIN generation. Finally, the indictment alleges that the defendants engaged in a conspiracy to launder the proceeds of their crimes, utilizing foreign banking institutions and complex financial transactions to conceal the illegal nature of the funds they received, and to attempt to protect these funds from government enforcement. Today the United States also seized and restrained the assets contained in a number bank accounts utilized by the defendants, as well as several pieces of real and personal property in Las Vegas, Nevada.

An indictment is only a charge and is not evidence of guilt. All defendants are presumed innocent and are entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.

The collaborative investigation that led to today’s arrest and seizures was the result of work by the EPA’s Criminal Investigation Division and the FBI, with assistance from the United States Secret Service and the Department of Homeland Security.

The case is being prosecuted by Senior Trial Attorney Wayne D. Hettenbach of the Environmental Crimes Section of the Justice Department’s Environment and Natural Resources Division , Assistant U.S. Attorneys Crane M. Pomerantz and Daniel D. Hollingsworth of the U.S. Attorney’s Office in Nevada, and Trial Attorney Darrin L. McCullough of the Justice Department’s Criminal Division, Asset Forfeiture and Money Laundering Section, with the assistance of the Justice Department’s Office of International Affairs.

Koito Manufacturing Co. Ltd., a Tokyo-based company, has agreed to plead guilty and to pay a total of $56.6 million in criminal fines for its roles in separate price-fixing conspiracies involving automobile lighting fixtures and lamp ballasts installed in cars sold in the United States and elsewhere, the Department of Justice announced today.

 
A ccording to a two-count felony charge filed today in U.S. District Court for the Eastern District of Michigan in Detroit, Koito engaged in separate conspiracies to rig bids for, and to fix, stabilize and maintain the prices of automobile lighting fixtures and automotive high-intensity discharge (HID) lamp ballasts sold to automakers in the United States and elsewhere.  In addition to the criminal fine, Koito has also agreed to cooperate with the department’s ongoing auto parts investigations.  The plea agreement is subject to court approval.

 
“The conspirators engaged in long-term conspiracies to fix the prices of essential components used in the production of automobiles,” said Brent Snyder, Deputy Assistant Attorney General of the Antitrust Division’s criminal enforcement program.  “Today’s criminal fine demonstrates the Antitrust Division’s continued commitment to hold companies accountable for collusive behavior that impacts American consumers.”

 
According to the charges, Koito and its co-conspirators sold the lighting fixtures and ballasts at noncompetitive prices to automakers in the United States and elsewhere.  Koito and its co-conspirators carried out the conspiracies through meetings and conversations in which they discussed and agreed upon bids and price quotations and agreed to allocate among the companies certain sales of automotive lighting fixtures and HID lamp ballasts sold to automobile and component manufacturers.  Koito’s involvement in the conspiracy to fix prices of automotive lighting fixtures lasted from at least as early as June 1997 until about July 2011.  Koito’s involvement in the conspiracy to fix prices of automotive HID lamp ballasts lasted from at least as early as July 1998 until at least February 2010.

 
Koito manufactures and sells automotive lighting fixtures, which include automobile headlamps and rear combination lamp assemblies that employ various bulb technologies and are used for forward illumination, visibility and to signal various vehicular functions, such as braking, reversing direction and turning.

 
Koito also manufactures and sells HID lamp ballasts – electrical devices that are essential for the operation of an HID headlamp.  HID lamp ballasts regulate the electrical current used to ignite and control the electrical arc that generates the intensely bright light emitted by an automotive HID headlamp fixture.

Including Koito, 24 corporations have pleaded guilty or agreed to plead guilty in the department’s investigation into price fixing and bid rigging in the auto parts industry, and have agreed to pay a total of more than $1.8 billion in fines.  Additionally, 26 individuals have been charged.

Koito 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 prosecution arose from an ongoing federal antitrust investigation into price fixing, bid rigging and other anticompetitive conduct in the automotive parts industry, which is being conducted by each of the Antitrust Division’s criminal enforcement sections and the FBI.  Today’s charges were brought by the National Criminal Enforcement Section, with the assistance of the Detroit Field Office of the FBI and the FBI headquarters’ International Corruption Unit.  Anyone with information concerning this investigation should contact the Antitrust Division’s Citizen Complaint Center at 1-888-647-3258, visit www.justice.gov/atr/contact/newcase.html or call the Detroit Field Office of the FBI at 313-965-2323.

            January 2014 has been proclaimed as National Slavery and Prevention and Awareness of Human Trafficking Month by President Barack Obama.  On January 10, 2014, Governor of Guam Eddie Baza Calvo and Governor Eloy S. Inos of the CNMI proclaimed “Stalking and Human Trafficking” month.  Communities nationwide join together to raise awareness about the ills of human trafficking, slavery and stalking. 

            The Guam Human Trafficking Task Force (HTTF) has organized the following events to commemorate Human Trafficking Awareness and Prevention Month in Guam:

• Friday January 17, 2014

• Wednesday, January 22, 2014

            The CNMI Human Trafficking Intervention Coalition has planned a community outreach for January 23, 2014, from 5:00 p.m. to 9:00 p.m. at the Thursday Night Market in Garapan, and a Human Trafficking Awareness Workshop on January 29, 2014, from 8:00 a.m. to 9:00 a.m. to be held at Commonwealth Health Care Corporation.

            The Guam Human Trafficking Task Force and the CNMI Human Trafficking Intervention Coalition comprised of representatives from federal and local law enforcement agencies, victim service providers, social service providers, medical and health professionals, faith based organizations, and other community partners, will continue to respond to the needs of human trafficking victims and their families and to hold offenders accountable.

            For more information about the events, please contact Mae Blas at (671) 477-4144 or via email at [email protected].

Attached are photos taken at the Proclamation Signing in Guam and in the CNMI.


Guam photo of some of the Human Trafficking Task Force members, courtesy of Cynthia Cabot from the Guam Coalition Against Sexual
Assault & Family Violence.


CNMI photo of Human Trafficking Intervention Coalition, courtesy of
Angel Demapan from the CNMI Governor’s Office.

Four men have pleaded guilty for their roles in a highly sophisticated and violent organization that targeted jewelry couriers in Georgia and Texas. The defendants were caught as part of a national effort to find and prosecute roving groups of robbers who travel around the country targeting jewelry couriers and other business people.

Acting Assistant Attorney General Mythili Raman and U.S. Attorney Sally Quillian Yates of the Northern District of Georgia made the announcement.

Honorio Sanchez-Valencia, 46, of Gwinnett, Ga., and Jose Vicente Ramirez-Rodriguez, 38, John Rodriguez, 37, and Ali Alejandro Godoy-Maximo, 25, each of Los Angeles, Ca., pleaded guilty this week in the Northern District of Georgia to Hobbs Act robbery for participating in the robbery of a jewelry courier on Jan. 31, 2013, at a QuikTrip gas station in Buford, Ga. The charge carries a maximum penalty of 20 years in prison. In addition, Rodriguez pleaded guilty to being an illegal alien in possession of a handgun, which carries a maximum penalty of 10 years in prison. Sentencing has not been scheduled.

Court records show that on Jan. 31, 2013, as part of a plan to identify and rob a jewelry courier, the courier-victim was followed by Ramirez-Rodriguez to a QuikTrip gas station. As he was following the courier, Ramirez-Rodriguez contacted Sanchez-Valencia to help him with the robbery. Sanchez-Valencia, in turn, contacted the other defendants, all of whom came to the gas station together. When the courier was putting gas in his vehicle, two of the defendants approached him, with one restraining him with a knife while another smashed the vehicle window and took a briefcase containing over $125,000 in assorted jewelry.

Sanchez-Valencia also admitted his involvement in a similar robbery that occurred in Dallas on Aug. 27, 2012. In that robbery, two jewelry couriers were at a restaurant when Sanchez-Valencia briefly came into the restaurant to conduct surveillance on them and to determine the layout of the restaurant. Within a few minutes after Sanchez-Valencia left, three masked men with a gun came into the restaurant and robbed the jewelry couriers of two briefcases containing over $500,000 of jewelry. Some of that jewelry was recovered during the execution of a search warrant at a storage unit rented by Sanchez-Valencia.

This case was investigated by the FBI, ICE and the Gwinnett County Police Department, with assistance from the Dallas Police Department. This case is being prosecuted by Laura Gwinn of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorney Kim Dammers of the Northern District of Georgia.

A former sergeant of the Portsmouth Sheriff’s Office (PSO) was sentenced to serve 15 months in prison today for accepting bribes in exchange for favors and referrals.

Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and Acting U.S. Attorney Dana J. Boente of the Eastern District of Virginia made the announcement.

Melvin Hike, 65, of Portsmouth, Va., was sentenced by U.S. District Judge Arenda L. Wright Allen of the Eastern District of Virginia. Hike was also sentenced to serve three years of supervised release and to pay a $10,000 fine.

On Oct. 8, 2013, Hike pleaded guilty to conspiracy and federal programs bribery. According to court documents, throughout the relevant time period of 2008 to 2012, Hike was a PSO sergeant assigned to the warrant squad. Ulysses Stephenson, aka “Tugger,” was a bail bondsman based in Portsmouth whose income depended on the number of arrestee clients he served. At various times between 2008 and 2012, Stephenson gave Hike cash payments and other items of value, and in exchange, Hike referred arrestees to Stephenson as prospective clients. Stephenson previously pleaded guilty to conspiracy and federal programs bribery in connection with bribing Hike, and he was sentenced to 30 months in prison on Nov. 2, 2012.

This case was investigated by the FBI. The case was prosecuted by Trial Attorneys Monique Abrishami and Peter Mason of the Criminal Division’s Public Integrity Section and Special Assistant U.S. Attorney Amy E. Cross of the Eastern District of Virginia.

David Haigler of Montgomery County, Ala., was sentenced today to serve 37 months in federal prison for his involvement in a stolen identity tax refund fraud scheme, Assistant Attorney General Kathryn Keneally of the Justice Department's Tax Division, U.S. Attorney George L. Beck Jr. for the Middle District of Alabama and the Internal Revenue Service (IRS) announced today.  Haigler was also ordered to serve three years of supervised release and to pay restitution to the IRS in the amount of $606,781.  Haigler previously pleaded guilty in the U.S. District Court for the Middle District of Alabama on Sept. 6, 2013.

According to court documents, between November 2011 and July 2012, Haigler obtained 263 fraudulent U.S. Treasury refund checks and Refund Anticipation Loan checks totaling $606,781.  The refund checks were in the names of different individuals and those individuals did not authorize Haigler to cash the checks.  Haigler obtained fictitious powers of attorney in the names of the individuals on the checks, which purportedly appointed Haigler to handle financial affairs, including the cashing of checks.  Haigler cashed all of the fraudulent refund checks at a store in Millbrook, Ala., and provided the store with copies of the ficticious powers of attorney.  Haigler retained a portion of the checks and provided the remainder to the individuals who brought him the fraudulent checks.

This case was investigated by special agents of the IRS - Criminal Investigation and the U.S. Secret Service.  Trial Attorneys Michael Boteler and Jason Poole of the Tax Division and Assistant U.S. Attorney Todd Brown prosecuted the case.

Additional information about the Justice Department's Tax Division and its enforcement efforts may be found at  www.justice.gov/tax

Russell Burroughs, a resident of Montgomery, Ala., was indicted on 33 counts of filing false tax returns, 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 yesterday.

According to the indictment, Burroughs owned and operated Computer Services, a tax return business located in Montgomery, Ala.  Burroughs allegedly prepared and filed 33 false tax returns.  The indictment alleges that the false items on the tax returns included false energy and education credits, false deductions and other false information.

An indictment merely alleges that crimes have been committed, and the defendant is presumed innocent until proven guilty beyond a reasonable doubt.  If convicted, Burroughs faces a statutory maximum potential sentence of three years in prison for each count of filing a false return. 

The case was investigated by special agents of the Internal Revenue Service - Criminal Investigation.  Trial Attorneys Charles Edgar Jr., Katherine Reinhart and Michael Boteler of the Tax Division are prosecuting the case with the assistance of Assistant U.S. Attorney Todd Brown and the U.S. Attorney’s Office for the Middle District of Alabama. 

Sasha Webb and Charlie Jackson have each been indicted for stolen identity refund fraud crimes, 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 their indictments after their arrests.  Webb was arrested on Dec. 20, 2013, and Jackson’s arrest took place on Jan. 15, 2014.

Webb was charged with conspiracy to file false claims, mail fraud and aggravated identity theft.  According to the indictment, Webb worked as a medical records clerk at an Alabama Department of Corrections facility in Elmore County, Ala.  Webb had access to the means of identification of inmates and sold the information to Jacqueline Slaton and Harvey James, who then used the inmates’ information to file hundreds of false tax returns that claimed over one million dollars in false refunds.  Slaton and James knowingly paid Webb for stolen identities. 

Charlie Jackson, a resident of Montgomery, Ala., was charged with wire fraud and aggravated identity theft.  According to the indictment, between October 2010 and April 2013, Jackson obtained stolen identities and used those identities to file false tax returns.  Jackson directed the tax refunds to prepaid debit cards in the names of other individuals. 

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

The cases were investigated by special agents of the Internal Revenue Service - Criminal Investigation, U.S. Postal Inspectors and the Elmore County Sheriff’s Office.  Trial Attorneys Jason Poole, Charles Edgar Jr. and Michael Boteler of the  Tax Division are prosecuting the cases with the assistance of Assistant U.S. Attorney Todd Brown and the U.S. Attorney’s Office for the Middle District of Alabama. 

Granville Robinson, 25, aka Bear and HB, Duane Phillips, 28, aka P-nut, and Anthony Ellis, 25, aka Anthony Deshun Lloyd, Animal and AD, were arrested today for offenses related to their involvement in sex trafficking adult victims to New Orleans as charged in a five-count indictment dated Dec. 20, 2013, and unsealed today by Chief Judge Sarah S. Vance of the U.S. District Court for the Eastern District of Louisiana, announced Acting Assistant Attorney General Jocelyn Samuels for the Justice Department’s Civil Rights Division and U.S. Attorney Kenneth Allen Polite Jr. for the Eastern District of Louisiana.  Robinson, Phillips and Ellis are from Memphis, Tenn.

According to the indictment, from May 20, 2013, until Dec. 20, 2013, Robinson, Phillips and Ellis conspired to recruit, entice, harbor and transport several adult women by means of force, threats of force, fraud and coercion in order to engage in commercial sex acts in New Orleans and elsewhere.  In addition to being charged with conspiring to commit sex trafficking, Robinson and Phillips are each charged with a substantive count of sex trafficking by force, fraud or coercion, and with transporting women in interstate commerce for the purpose of prostitution between May 20, 2013, and July 2, 2013.

If convicted of conspiracy to commit sex trafficking and sex trafficking by force, fraud or coercion, Robinson, Phillips and Ellis each face a statutory maximum sentence of life imprisonment, a $250,000 fine and a lifetime of supervised release.  Robinson and Phillips face a statutory maximum of 10 years in prison, a $250,000 fine and three years of supervised release if convicted of transportation for the purpose of prostitution.

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

This case was investigated by agents from the New Orleans Field Offices of the FBI and the Department of Homeland Security, as well as the Memphis Field Office of the FBI.  The prosecution of this case is being handled by Special Litigation Counsel John Cotton Richmond and Trial Attorney Christine M. Siscaretti of the Civil Right Division’s Human Trafficking Prosecution Unit along with Assistant U.S. Attorney Julia K. Evans of the Eastern District of Louisiana.

SACRAMENTO, Calif. - El procurador federal Benjamin B. Wagner y el Jefe  Adjunto Inspector Postal para las Operaciones del Campo Occidental Dr. Gregory Campbell Jr. anunciaron los resultados obtenidos hasta el momento por la Operación Buzón Roto, un esfuerzo continuo en el que participa una creciente cantidad de inspectores postales y analistas trabajando en colaboración con las fuerzas del orden público para investigar y procesar infracciones de correo robado.

La Operación Buzón comenzó luego de las quejas de un cliente postal sobre ladrones de correo que estaban atacando buzones de recolección por medio de técnicas de “pesca”, fisgoneando buzones abiertos en los vestíbulos de las oficinas postales, irrumpiendo en camiones de repartición de correo y falsificando llaves postales para poner en peligro los buzones de recolección y Unidades de Buzones de Entrega Centralizada de Barrio (NDCBUs). El Servicio de Inspección Postal ocupó en el Distrito Oriental de California a inspectores postales y analistas de todo el país con fuerte experiencia en investigación de robo de correo para que comenzaran en abril de 2013 a trabajar con inspectores postales ya asignados a Sacramento, Fresno y Bakersfield.

En menos de un año, los equipos completaron las investigaciones que llevaron a la imputación de cargos contra 21 acusados.  Nueve de estos acusados ya han sido sentenciados y seis màs estàn esperando la sentencia después de declararse culpables. Adicionalmente, al menos otras seis personas han sido acusadas por fiscales en los condados de Kern y de Sacramento.  La Operación Buzón Roto continúa en marcha y se esperan màs acusaciones.

“Proteger la seguridad del correo de los Estados Unidos y proteger a los clientes del correo de la pérdida de objetos valiosos e información de identidad personal es una responsabilidad importante del Servicio de Inspección Postal de los Estados Unidos y de su oficina”, dijo el procurador Wagner.  “Aprecio la receptividad que el Servicio de Inspección Postal ha mostrado en entregar recursos para abordar este problema en el Central Valley.  También quiero agradecer a nuestros socios de las fuerzas del orden público por trabajar de una manera tan efectiva con nosotros en este esfuerzo”.

El jefe adjunto inspector postal Campbell afirmó:  “Trabajamos de cerca con la Procuraduría y con nuestros socios en la fuerza de orden público para arrestar y procesar a quienes roban correo con fines criminales.  Una meta principal para el Servicio de Inspección Postal es proteger el correo de los clientes postales y asegurar que su correo se encuentre a salvo de robo”.

Entre los casos que surgieron durante la operación se encuentran los siguientes:

• Sacramento: Los inspectores postales aseguraron la imputación de cargos a tres acusados que obtuvieron correo robado tras forzar las NDCBU en Elk Grove y Sacramento.  Una de las acusadas usó su trabajo como vendedora en un establecimiento para abrir cuentas fraudulentas y usar la información de cuentas que obtuvo de correo robado.  Los inspectores postales también aseguraron la imputación de cargos de otros cinco acusados que forzaron en Rancho Cordova, Elverta, Rocklin, Roseville, Natomas, Rio Linda, Elkhorn y Antelope.  Varias órdenes de registro resultaron en la recuperación de cientos de piezas de correo robado y llaves postales robadas.

• Fresno: Los inspectores postales llevaron a cabo el registro a un reincidente que se encontraba en libertad bajo palabra y que presuntamente està involucrado en forzar NDCBU en Fresno y Madera, y recuperaron correo robado y seis llaves postales falsificadas.

• Bakersfield: Los inspectores postales identificaron un grupo que pescaba buzones de recolección y llevaron a cabo vigilancia que dio como resultado el arresto de tres acusados por robo de correo. Los registros subsecuentes a los arrestos recuperaron un gran volumen de correo robado y varias llaves postales.  La investigación resultó en la imputación de cinco sospechosos.

A la fecha, la Operación Buzón Roto dio como resultado al menos 22 arrestos, 33 registros, la recuperación de diez llaves robadas o falsificadas y la identificación de màs de 2,100 víctimas y casi $400,000 en pérdidas.  El Servicio de Inspección Postal trabajó de cerca con varias agencias del orden público, incluyendo el Departamento de Policía de Sacramento, el Departamento de Polícia de Bakersfield, el Departamento de Polícia de Elk Grove, la Oficina del Alguacil del Condado de Kern y la Oficina del Alguacil del Condado de Placer.  El trabajo de la Operación Buzón Roto continúa.

SACRAMENTO, Calif. - En octubre y noviembre de 2011, fueron interpuestas demandas en cada uno de los cuatro distritos judiciales federales de California buscando detener la ejecución federal de la Ley de Sustancias Controladas contra los dispensarios de marihuana sobre una variedad de fundamentos.  Las demandas alegaban que el gobierno federal no podría tomar medidas legales contra los dispensarios porque esa acción es una violación a la Novena y la Décima Enmienda, la Claúsula de Protección de Igualdad y la Claúsula del Comercio.  Con procesos judiciales separados en cada distrito, cada uno de los cuatro jueces de los tribunales distritales emitió órdenes desestimando los casos.  Los demandantes en tres de esos casos apelaron esas decisiones.  Hoy, en un dictamen no publicado, el Circuito Noveno afirmó las desestimaciones de los tres casos.

La Corte del Distrito Oriental de California fue la primera corte distrital en rechazar las demandas de los dispensarios.  La acción en el Distrito Oriental fue interpuesta a finales de 2011 por el Sacramento Nonprofit Collective, haciendo negocios como El Camino Wellness Center y Ryan Landers.  Fue desestimada por el juez de la Corte del Distrito de Los Estados Unidos, Garland E. Burrell Jr., el 28 de febrero de 2012.

Benjamin Wagner, procurador federal del Distrito Oriental de California dijo:  “Nuestra responsabilidad como procuradores es hacer cumplir la Ley de Sustancias Controladas.  La decisión de hoy rechazando la demanda del dispensario es una aplicación directa del precedente existente, que solamente confirma que la Ley de Sustancias Controladas continúa estando vigente y vàlida, pese a la ley estatal”.

En la Corte del Distrito de California del Sur, la demanda interpuesta por Alternative Community Health Care Cooperative Inc, fue desestimada el 5 de marzo de 2012 por la juez de la Corte del Distrito de los Estados Unidos Dana M. Sabraw. Laura E. Duffy, la procuradora federal del Distrito del Sur de California dijo: “ La decisión del Noveno Circuito reconoce que los procuradores conservan  el derecho de hacer cumplir la Ley de Sustancias Controladas.  Continuaremos enfocàndonos en los intereses federales de evaluar los procesos por marihuana en el Distrito de California del Sur, y colaboraremos con nuestro estado y con socios locales para asegurar la seguridad de nuestras comunidades”.

El caso del Noveno Circuito es Sacramento Nonprofit Collective v. Titular   Caso No. 12-15991.

A jury in the Middle District of Georgia convicted Kimberly Michelle Banks on Jan. 14, 2014, of conspiring to file false federal income tax returns in the names of stolen identities, the Justice Department and Internal Revenue Service (IRS) announced today.  Banks was also convicted of wire fraud, aggravated identity theft and theft of government money.

According to evidence introduced at trial, Banks obtained the names and Social Security numbers of nursing home patients from her employer and conspired with Donalene Mosely, Arneshia Austin and others to use the stolen identifying information to steal money from the government.  Mosely and Austin each pleaded guilty to related charges before trial.  Several victims testified that they did not consent to the use of their names and Social Security numbers on these tax returns and testified that they did not receive any money from refunds generated from the false tax returns filed with the IRS.  The tax returns at issue were filed from two internet protocol addresses assigned to Banks, and the fraudulent tax refunds were deposited onto prepaid debit cards mailed to addresses belonging to Banks and others, including Mosely and Austin.  The evidence also revealed that Banks and others used the stolen proceeds to make payments on their car loans, to throw a party and to buy products online. 

The court has not yet scheduled sentencing for Banks, Mosely or Austin.  Banks faces a statutory minimum of two years in prison for aggravated identity theft, a statutory maximum of 20 years in prison for each wire fraud count and 10 years in prison for each theft of government money count.  Banks, Mosely and Austin each face a statutory maximum of five years in prison for the conspiracy count.  

This case was investigated by IRS-Criminal Investigation and is being prosecuted by Trial Attorneys Justin Gelfand, Kimberly Shartar and Alexander Effendi for the Tax Division.  Assistant Attorney General Kathryn Keneally thanked the U.S. Attorney’s Office in the Middle District of Georgia and the Crisp County Sheriff’s Office for their assistance with this prosecution.

Two former Miami real estate agents were sentenced today for their roles in a $2.4 million mortgage fraud scheme, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division.

Jose Filgueiras, 43, was found guilty at trial on Sept. 9, 2013, of three counts of bank fraud and was sentenced by U.S. District Judge William J. Zloch of the Southern District of Florida to serve 57 months in prison. Jose Filgueiras’s wife, Raquel Filgueiras, 39, was found guilty at trial on the same day of one count of bank fraud and was sentenced by Judge Zloch to serve 30 months in prison.

Three co-conspirators in the case were sentenced on Nov. 12, 2013. Jose Armando Alvarado, a former Miami area real estate agent and mortgage broker and Raquel Filgueiras’s father, was sentenced to serve 135 months in prison. Alberto Morejon, a former loan closer and title agent, was sentenced to serve 36 months in prison. Alvarado’s sister, Reyna Orts, a former mortgage broker and the mother of Morejon, was sentenced to serve 50 months in prison. Each of the co-defendants was convicted at trial of various counts of wire and bank fraud.

According to court documents and evidence presented at trial, Alvarado, along with his co-conspirators, operated a mortgage fraud scheme by controlling and operating three real estate entities in the Miami area: South Florida Realty; American Mortgage Lending, a mortgage broker; and Royal Atlantic Title, a title insurance agency.  From February 2004 through November 2009, Alvarado and his co-conspirators used their control over these three companies to falsify and misrepresent important facts provided to financial institutions in order to fraudulently secure loans totaling more than $2.4 million.  The loans were often obtained through submitting falsified supporting documentation, such as false tax returns, W2 forms, bank statements and employment verifications.

Evidence at trial showed that Alvarado and his co-conspirators subsequently enriched themselves by diverting loan proceeds, collecting brokerage fees and inflating real estate commissions generated by the sales of the properties.  Alvarado and his co-conspirators obtained control of multiple properties during the real estate market boom with the intent to flip and sell them for a profit or control them as rental properties.  The defendants used their knowledge and experience in the real estate industry to conceal the scheme by executing quit-claim deeds and failing to record, and falsely recording, mortgage deeds and other documentation with the State of Florida.

The case was investigated by the FBI’s Miami Field Office and the Miami-Dade Police Department. The case was prosecuted by Trial Attorney N. Nathan Dimock of the Criminal Division’s Fraud Section.

NEW YORK - U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI) returned three recovered sculptures, valued at more than $1.5 million, to the government of India Tuesday during a repatriation ceremony at the consulate in New York City. One of the objects - a 350-pound sandstone sculpture stolen from an Indian temple in 2009 - was listed as one of INTERPOL's top 10 most wanted stolen works of art.

HSI Executive Associate Director James A. Dinkins presented the artifacts to Consul General of India Dnyaneshwar M. Mulay, alongside INTERPOL Washington Director Shawn Bray.

“The excellent international cooperation between the United States and India led to the recovery and return of these priceless antiquities,” said Dinkins. “The pilfering of a nation's cultural patrimony cannot and will not be tolerated.”

“Prevention of illegal trade in antiquities has emerged as an important area of cooperation between India and the United States as can be seen from this recent recovery of stolen Indian antiquities,” said Mulay. “I deeply appreciate the excellent work done by ICE HSI in getting these three priceless Indian assets recovered. The successful investigations and repatriation of these cultural artifacts underscores the importance of growing institutional partnership, which is of great significance to both countries.”

“There is no better example of what can be accomplished through the collaboration between US and international law enforcement via INTERPOL than the astounding results of this investigation, which have led to today's repatriation of these artifacts to their rightful place with the people of India,” said Bray. “INTERPOL Washington is proud to have been able to assist ICE Homeland Security Investigations in obtaining the documentation and images necessary to help identify the objects as those stolen from India.”

Two of the three artifacts returned to India were reported in 2009 by the Archaeological Survey of India (ASI), who notified the Indian Consulate about two sandstone sculptures stolen from the Gadgach Temple in Atru, Rajasthan, India. The 350-pound “Vishnu and Lakshmi” sandstone sculpture dates back to the 11th or 12th century and was listed as No. 6 on INTERPOL's top 10 most wanted works of art. Also stolen from the temple and repatriated during the Jan. 14 ceremony was the 600-pound “Vishnu and Parvati” sandstone sculpture, dating to the same period.

The third artifact is a male deity black sandstone sculpture, depicting a Bodhisattva, a popular subject in Buddhist art, and is believed to date back to the 11th or early 12th century from either the Indian State of Bihar or Bengal.

The investigation that led to this repatriation began April 13, 2010, when HSI New York special agents received information that the Indian sandstone sculptures recently looted from India were being offered for sale in the United States. HSI special agents discovered that the “Vishnu and Lakshmi” was transported from India to Hong Kong. From there, it was sold to a dealer in Thailand, and then resold to a buyer in London. The London buyer shipped the sculpture to New York City for an exhibition in March 2010. On April 15, 2010, HSI special agents recovered the piece while it was being shipped back to London.

On July 12, 2010, as a direct result of the “Vishnu and Lakshmi” seizure, a sister piece, the “Vishnu and Parvati,” was seized. It was transported to Hong Kong, sold to a buyer in New York and then sold and shipped to a buyer in Basel, Switzerland.

On July 7, 2011, the Indian black stone Bodhisattva figure was discovered being smuggled into the United States at Newark Airport by U.S. Customs and Border Protection officers. HSI special agents seized it after discovering that its accompanying paperwork declared Great Britain as a false country of origin. In addition, the item was grossly undervalued.

The New York County District Attorney's Office assisted in this investigation.

The last ICE cultural property repatriation to India was in 2006 when ICE agents in NY returned a ninth century stone idol that had been stolen from a temple in Mandsaur in Madhya Pradesh in 2000.

HSI plays a leading role in criminal investigations that involve the illegal importation and distribution of cultural property, including the illicit trafficking of cultural property, especially objects that have been reported lost or stolen. The HSI Office of International Affairs, through its 67 attaché offices in 48 countries, works closely with foreign governments to conduct joint investigations, when possible.

HSI specially trained investigators, assigned to both domestic and international offices, partner with governments, agencies and experts to protect cultural antiquities. They also provide cultural property investigative training to law enforcement partners for crimes involving stolen property and art, and how to best enforce the law to recover these items when they emerge in the marketplace.

Since 2007, more than 7,150 artifacts have been returned to 26 countries, including paintings from France, Germany, Poland and Austria, 15th to 18th century manuscripts from Italy and Peru, as well as cultural artifacts from China, Cambodia and Iraq.

Learn more about HSI cultural property, art and antiquities investigations. Members of the public who have information about suspected stolen cultural property are urged to call the toll-free HSI tip line at 1-866-DHS-2-ICE or to complete its online tip form.