District Not Recorded
The source did not name an office we could identify. These records remain unassigned rather than guessed.
Justice Department Requires Divestiture from Gannett Co. Inc. <br /> in Order to Proceed with Its Acquisition of Belo Corp.Read the Press Release
The Department of Justice announced today that it will require Gannett Co. Inc., Belo Corp. and Sander Media LLC to divest their interests in KMOV‑TV, a CBS affiliate in St. Louis, in order to proceed with Gannett’s acquisition of Belo, and Sander’s related acquisition of six Belo television stations that Gannett cannot hold under Federal Communications Commission (FCC) rules. The department said that, without the required divestiture, Gannett would have gained a dominant position in broadcast television spot advertising in the St. Louis area, resulting in higher prices advertisers.
In addition to acquiring the six stations from Belo, Sander will enter into several agreements with Gannett in order to both finance purchasing the stations and facilitate operating the stations. KMOV-TV is one of the six stations Sander would acquire from Belo and would be subject to agreements between Sander and Gannett. These agreements, however, do not include any joint negotiation of retransmission rights in St. Louis. The Gannett-Belo acquisition is valued at approximately $2.2 billion.The department’s Antitrust Division filed a civil antitrust lawsuit today in the U.S. District Court for the District of Columbia to block the proposed acquisition and related agreements between Gannett and Sander, including an option for Gannett to assign or acquire the Belo stations sold to Sander, a financing guarantee and a long-term shared services agreement. At the same time, the department filed a proposed settlement that, if approved by the court, would resolve the competitive concerns alleged in the lawsuit.
“Gannett’s KSDK‑TV and Belo’s KMOV‑TV compete head-to-head in the sale of broadcast television spot advertising in the St. Louis area, and this rivalry constrains advertising rates,” said Bill Baer, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. “The full divestiture required by the department will ensure that KMOV-TV will remain a vigorous competitor in St. Louis.”
The department’s complaint alleges that the proposed acquisition would lessen competition in broadcast television spot advertising in the St. Louis Designated Market Area (DMA). Even though the two stations would maintain separate sales forces, the various agreements between Gannett and Sander, KMOV‑TV’s new owner, would align the incentives of the two stations. To remedy this harm, the proposed settlement requires Gannett, Belo and Sander to divest all assets primarily used in the operation of KMOV‑TV to an independent purchaser to be approved by the United States. That purchaser will not be permitted to have any agreements with Gannett concerning KMOV-TV that could limit competition with KSDK-TV, including options to acquire or assign, financing agreements and shared services or joint sales agreements.
Gannett, a Delaware corporation with headquarters in McLean, Va., owns and operates 23 broadcast television stations nationwide, 12 of which are in the top 25 markets, as well as numerous newspapers. Gannett’s KSDK‑TV is the NBC affiliate in St. Louis.
Belo, a Delaware corporation with headquarters in Dallas, owns and operates 20 broadcast television stations nationwide, nine of which are in the top 25 markets. Belo’s KMOV‑TV is the CBS affiliate in St. Louis.
Sander, a Delaware limited liability company with headquarters in Scottsdale, Ariz., has no current business activity other than preparing to acquire six Belo stations, including KMOV‑TV in St. Louis, as part of the transactions between Gannett, Belo and Sander.
As required by the Tunney Act, the proposed settlement, along with a competitive impact statement, will be published in the Federal Register. Any person may submit written comments concerning the proposed settlement during a 60‑day comment period to Scott A. Scheele, Chief, Telecommunications and Media Enforcement Section, Antitrust Division, U.S. Department of Justice, 450 Fifth Street, N.W., Suite 7000, Washington, D.C. 20530. At the conclusion of the 60‑day comment period, the U.S. District Court for the District of Columbia may approve the proposed settlement upon finding that it is in the public interest.
INTERPOL and INTERPOL Washington request public assistance to track international fugitives across AmericasRead the Press Release
USDOJ: INTERPOL Washington: Updates
Department of Justice
INTERPOL Washington FOR IMMEDIATE RELEASE Friday, December 16, 2013INTERPOL and INTERPOL Washington request public assistance to track
international fugitives across AmericasLYON, France - INTERPOL is calling for the public's assistance in helping to track down international fugitives linked to organized crime networks and wanted for offenses including murder and drug trafficking.
Operation Infra (International Fugitive Round Up and Arrest) Americas was launched in Costa Rica on 18 November, involving 46 countries and territories and targeting 266 fugitives. Members of the public are now being asked to provide information to help locate 15 individuals, including Rafael Caro-Quintero the former leader of the Guadalajara Cartel in Mexico.
The fugitives are believed to be hiding out in Central America, Colombia, Ecuador, Peru, Venezuela or the Caribbean. They are all cases where no new leads were generated during the initial phase of Infra Americas or where there is no current intelligence on the potential location of these individuals.
“Any piece of information, no matter how small or apparently insignificant could be the missing piece in the puzzle which will help locate these dangerous criminals,” said Ervin Prenci, criminal intelligence officer with INTERPOL's Fugitive Investigative Unit.
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Former Contractor of a Florida Property Management Company <br /> Sentenced to Serve Time in Prison for Wire FraudRead the Press Release
A former repair contractor of a Florida property management company was sentenced to serve time in prison for his participation in a wire fraud scheme related to housing repairs made under a contract between Ocwen Loan Servicing LLC, and the U.S. Department of Veterans Affairs (VA), the Department of Justice announced today.Ronald B. Hurst was sentenced by Judge Philip G. Reinhard of the U.S. District Court for the Northern District of Illinois in Rockford to serve 24 months in prison for his role in the conspiracy.
In addition, a second former repair contractor, Bryant A. Carbonell, was sentenced by Judge Reinhard to serve six months of home confinement for his role in the conspiracy. Hurst and Carbonell were sentenced to pay $147,825 jointly and severally in restitution to the VA. Hurst pleaded guilty on Feb. 15, 2013, to two wire fraud counts of a 10-count indictment and Carbonell pleaded guilty on Sept. 21, 2012, to the same charges.An indictment, originally filed in January 2012, charged Hurst, Carbonell and Ryan J. Piana with conspiring to commit bribery and wire fraud from at least January 2006 until as late as September 2007. Hurst, Carbonell and Piana were also charged with bribery and wire fraud. As part of the plea agreements, the United States agreed to dismiss the remaining counts against Hurst and Carbonell at the time of their sentencing.
“By paying kickbacks in exchange for contracts to companies they secretly owned or with which they were affiliated, the conspirators created the illusion of competition while illegally steering contracts to themselves,” said Bill Baer, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. “Today’s sentencing reaffirms the Antitrust Division’s commitment to prosecuting schemes that undermine competition in the VA Mortgage Guarantee Program.”
Hurst and Carbonell were former contractors for West Palm Beach, Fla.-based Ocwen Loan Servicing LLC. Piana was a former residential sales manager at Ocwen. According to court documents, Ocwen managed foreclosed properties under contract with the VA, which guaranteed qualifying residential mortgages for veterans. Under the contract between the VA and Ocwen, if a veteran defaulted, Ocwen completed necessary repairs and re-sold the property. Proceeds from the re-sale of VA-acquired properties directly benefit the VA by reducing the cost of guaranteeing residential mortgages to veterans.
According to the charges, Hurst and Carbonell paid Piana to steer housing repair work to companies affiliated with Hurst and Carbonell. Piana recruited other Ocwen employees into the scheme and paid them on behalf of himself and the other conspirators. The department said in order to execute the scheme, the conspirators sent, or caused to be sent, various transmissions via wire communication.This is the third case involving properties managed by Ocwen under contract with the VA. On Dec. 3, 2010, Benjamin K. Graves, also a former Ocwen employee, pleaded guilty in U.S. District Court in Orlando, Fla., to wire fraud in connection with the VA contract. On Jan. 25, 2012, Joshua R. Nusbaum, another former Ocwen employee, and Andrew J. Nusbaum, a former Ocwen contractor, pleaded guilty in U.S. District Court in Orlando, Fla., to wire fraud in connection with the same VA contract. Piana pleaded guilty to the same counts as Carbonell and Hurst on July 16, 2013, in U.S. District Court in Orlando, Fla. Piana was sentenced on Sept. 30, 2013, to serve 24 months in prison and to pay $147,285 in restitution to the VA.
The sentence announced today resulted from a federal investigation of housing repair contracts performed under contract with the VA. The investigation is being conducted by the Antitrust Division’s Chicago Office and the Central Field Office of the U.S. Department of Veterans Affairs, Office of Inspector General, Criminal Investigations Division, located in Hines, Ill. Anyone with information concerning suspicious activity relating to housing repairs performed under a contract with the VA should contact the Antitrust Division s Chicago Office at 312-353-7530 or visit www.justice.gov/atr/contact/newcase.htm.
Two Army National Guard Soldiers Plead Guilty<br /> in Connection with Bribery and Fraud Schemes<br /> to Defraud the U.s. Army National Guard BureauRead the Press Release
Two U.S. Army National Guard soldiers pleaded guilty for their roles in bribery and fraud schemes that caused a total of at least $70,000 in losses to the U.S. Army National Guard Bureau. 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.
Specialist Edia Antoine, 28, and former Staff Sergeant Ernest Millien, 49, both of Houston, each pleaded guilty to one count of conspiracy and one count of bribery. The cases against both defendants arise from an investigation involving allegations that former and current military recruiters and U.S. soldiers in the San Antonio and Houston areas engaged in a wide-ranging corruption scheme to illegally obtain fraudulent recruiting bonuses. To date, the investigation has led to charges against 25 individuals, 19 of whom have pleaded guilty.
According to court documents filed in both cases, in approximately September 2005, the National Guard Bureau entered into a contract with Document and Packaging Broker Inc. (Docupak) to administer the Guard Recruiting Assistance Program (G-RAP). The G-RAP was a recruiting program that offered monetary incentives to soldiers of the Army National Guard who referred others to join the Army National Guard. Through this program, a participating soldier could receive up to $3,000 in bonus payments for referring another individual to join. Based on certain milestones achieved by the referred soldier, a participating soldier would receive payment through direct deposit into the participating soldier’s designated bank account. To participate in the program, soldiers were required to create online recruiting assistant accounts.
Antoine and Millien both admitted they paid Army National Guard recruiters for the names and Social Security numbers of potential Army National Guard soldiers. They used the personal identifying information for these potential soldiers to claim that they were responsible for referring these potential soldiers to join the Army National Guard, when in fact they had not referred them. As a result of these fraudulent representations, Antoine and Millien collected approximately $17,000 and at least $12,500 in fraudulent bonuses, respectively.
The charge of bribery carries a maximum penalty of 15 years in prison and a maximum fine of $250,000 or twice the pecuniary gain or loss. The charge of conspiracy carries a maximum penalty of five years in prison and a maximum fine of $250,000 or twice the pecuniary gain or loss.
Antoine and Millien are scheduled to be sentenced before U.S. District Judge Lee H. Rosenthal of the Southern District of Texas on June 24, 2014.
These cases are being investigated by Special Agents from the San Antonio Fraud Resident Agency of Army Criminal Investigation Command’s Major Procurement Fraud Unit. The cases are being prosecuted by Trial Attorneys Sean F. Mulryne, Mark J. Cipolletti and Heidi Boutros Gesch of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney John Pearson of the Southern District of Texas.Kansas Man Charged in Plot to Explode Car Bomb at AirportRead the Press Release
A man has been charged in federal court with attempting to explode a car bomb at Wichita Mid Continent Airport, Acting Assistant Attorney General for National Security, John Carlin and U.S. Attorney Barry Grissom announced today. The defendant was arrested as part of an FBI undercover investigation, and the device used by the defendant was, in fact, inert and at no time posed a danger to the public.
Terry Lee Loewen, 58, of Wichita, Kan., is charged in a criminal complaint filed today in U.S. District Court in Wichita with one count of attempting to use a weapon of mass destruction, one count of attempting to damage property by means of an explosive and one count of attempting to provide material support to a designated foreign terrorist organization.
“There was no breach of Mid-Continent’s Airport’s security,” said U.S. Attorney Grissom. “At no time was the safety of travelers or members of the public placed in jeopardy.”
Loewen, who works as an avionics technician, is alleged to have spent months developing a plan that involved using his access card to airport grounds to drive a van loaded with explosives to the terminal. He planned to pull the trigger on the explosives himself and die in the explosion.
Agents arrested Loewen about 5:40 a.m. Friday after he attempted to enter the airport tarmac and deliver a vehicle loaded with what he believed were high explosives. Members of the FBI’s Joint Terrorism Task Force (JTTF) took him into custody without incident.
Loewen has been under investigation by the Wichita Joint Terrorism Task Force since early summer 2013. It is alleged that, prior to his attempted attack, he made statements that he was resolved to commit an act of violent jihad against the United States. Over a period of months, he took a series of actions to advance the plot. According to an affidavit filed in support of the criminal complaint, Loewen:- studied the layout of the airport and took photographs of access points;
- researched flight schedules;
- assisted in acquiring components for the car bomb;
- and talked about his commitment to trigger the device and martyr himself.
On Friday, Loewen went to Mid-Continent Airport to detonate the car bomb. He was taken into custody when he attempted to open a security access gate. FBI Evidence Response Teams are executing search warrants related to the case. Although the investigation is ongoing, no additional arrests are anticipated.
“Lone wolves - home grown violent extremists remain a very serious threat to our nation’s security, said FBI Special Agent in Charge Michael Kaste. “Today’s arrest emphasizes the continual need for the public to remain vigilant as law enforcement relies on the public’s assistance.”If convicted, Loewen would face a maximum penalty of life in federal prison.
The investigation was conducted by the Wichita FBI Joint Terrorism Task Force, which includes members from the FBI, Sedgwick County Sheriff’s Office and Kansas Highway Patrol. Assisting with the investigation were the FBI Kansas City Division, the Transportation Security Administration, the Wichita Airport Authority, and the Wichita Police Department.
The case is being handled by prosecutors from the United States Attorney’s Office and the Justice Department’s National Security Division.In all cases, defendants are presumed innocent until and unless proven guilty. The charges merely contain allegations of criminal conduct.
Ukrainian National Who Co-founded Cybercrime<br /> Marketplace Sentenced to 18 Years in PrisonRead the Press Release
One of the world’s most prolific cybercriminals was sentenced today to serve 18 years in prison for his role in co-founding the notorious website CarderPlanet. At the time of his arrest, Vega possessed more than half a million stolen credit card numbers.
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, and Special Agent in Charge Steven G. Hughes of the U.S. Secret Service’s New York Field Office made the announcement after sentencing by Senior U.S. District Judge Allyne R. Ross of the Eastern District of New York.
Roman Vega, 49, a Ukrainian national, pleaded guilty in 2009 to conspiracies to commit money laundering and access device fraud. According to court documents, Vega – who at various times was also known as “Boa,” “Roman Stepanenko” and “Randy Riolta” – conspired with others to steal large volumes of credit card information through hacking and other sophisticated means, and then sold that stolen information to others, who ultimately used the information to purchase merchandise and services. Vega founded two different online marketplaces for this stolen credit card information.
“Today’s sentence is a significant milestone in our ongoing effort to aggressively target and dismantle global cybercrime organizations that operate from every corner of the world,” said Acting Assistant Attorney General Raman. “Vega helped create one of the largest and most sophisticated credit card fraud sites in the cybercrime underworld – a distinction that has earned him the substantial sentence he received today.”
“The defendant and his group of cybercriminals emulated the mafia in organizing their criminal operations,” said U.S. Attorney Lynch. “Now, the defendant shares the same fate as so many mafia bosses – a long term of imprisonment. This investigation has spanned the globe and should send the unmistakable message that when it comes to dismantling global cybercrime organizations, we will not be held back by distance or complexity.”
“The Secret Service is pleased to have participated in this multi-agency criminal investigation that lead to the arrest of Roman Vega also known as ‘Boa’,” said Secret Service Special Agent in Charge Hughes. “This case demonstrates by constricting this criminal enterprise, there is no such thing as anonymity in the cyber world. The Secret Service continues to seek new and innovative ways to combat emerging cyber threats. Our success in this case and other similar investigations is a result of our close work with our network law enforcement partners.”
In the late 1990s, Vega founded the Boa Factory, one of the earliest websites to provide a forum for sellers of stolen credit card information to meet potential buyers. In the early 2000s, he co-founded and became a high-ranking administrator of a second criminal website, CarderPlanet, which became one of the first and busiest online marketplaces for the sale of stolen financial information, computer hacking services and money laundering.
At its height, CarderPlanet had more than 6,000 members and had a hierarchical leadership structure that borrowed its leadership titles from La Cosa Nostra. For example, CarderPlanet was headed by a “Godfather.” Immediately below the Godfather were a number of “Dons,” including the defendant, who used the name “Boa” when serving in this role. Three levels below the Dons was the “Consigliere,” who was an advisor. Vega, using the name “RioRita,” also served as the Consigliere.
CarderPlanet became a premier online criminal bazaar in significant part as a result of Vega’s leadership. Most notably, the defendant helped institute a quality control system for sales. If a cyberthief wanted to sell stolen credit card information on CarderPlanet, the information was subjected to a vetting process overseen by a manager to ensure that buyers obtained usable stolen data. In addition, the website used e-currencies, such as WebMoney, to provide the participants with security and a layer of anonymity. Vega and his co-conspirators thus created an efficient and trustworthy online marketplace for the buyers and sellers of stolen financial information not unlike legitimate e-commerce sites.
Vega also sold stolen data on the marketplaces he founded and managed. He directed cells of cybercriminals located throughout the globe who hacked into financial institutions to steal credit card and other financial information that would in turn be sold on carding forums, including CarderPlanet. Vega’s criminal career was cut short when he was arrested in Cyprus in February 2003 and extradited to the Northern District of California for prosecution. In November 2007, Vega was transferred to the Eastern District of New York following his indictment on the instant charges, and he pleaded guilty in January 2009. Vega has been incarcerated continuously since 2003.
The case was investigated by the U.S. Secret Service, with assistance from the U.S. Postal Inspection Service. The case was prosecuted by Senior Counsel Thomas Dukes of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney William P. Campos of the Eastern District of New York.Two Patient Recruiters for Miami Home Health Companies<br /> Sentenced for Roles in $48 Million Health Care Fraud SchemeRead the Press Release
WASHINGTON - Two patient recruiters for Miami health care companies were sentenced today for their participation in a $48 million home health 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 after sentencing by U.S. District Judge Joan A. Lenard in the Southern District of Florida.
Elizabeth Monteagudo, 33, of Miami, was sentenced to serve 70 months in prison, followed by three years of supervised release, and ordered to pay $3.5 million in restitution jointly and severally with co-defendants. Cristobal Gonzalez, 39, of Miami, was sentenced to serve 46 months in prison, followed by two years of supervised release, and ordered to pay $2 million in restitution jointly and severally with co-defendants.
In September 2013, Monteagudo and Gonzalez each pleaded guilty to one count of conspiring to receive health care kickbacks. Monteagudo also pleaded guilty to receiving kickbacks in connection with a federal health care program.
According to court documents, Monteagudo and Gonzalez were patient recruiters who worked for Caring Nurse Home Health Care Corp., and Gonzalez also worked for Good Quality Home Health Care Inc. Caring Nurse and Good Quality were Miami home health care agencies that purported to provide home health and therapy services to Medicare beneficiaries.
According to court documents, from approximately January 2009 through approximately June 2011, Monteagudo and Gonzalez would recruit patients for Caring Nurse and/or Good Quality and would solicit and receive kickbacks and bribes from the owners and operators of Caring Nurse and/or Good Quality in return for allowing the agency to bill the Medicare program on behalf of the recruited patients. These Medicare beneficiaries were billed for home health care and therapy services that were medically unnecessary and/or not provided.
Monteagudo also admitted to her involvement with $7 million in fraudulent billings for Starlite Home Health Agency Inc., which she owned and operated.
In a related case, on Feb. 27, 2013, Rogelio Rodriguez and Raymond Aday, the owners and operators of Caring Nurse and Good Quality, were sentenced to serve 108 and 51 months in prison, respectively. Their sentencings followed their December 2012 guilty pleas each to one count of conspiring to commit health care fraud charged in an October 2012 indictment. According to that indictment, from approximately January 2006 through June 2011, Caring Nurse and Good Quality submitted approximately $48 million in claims for home health services that were not medically necessary and/or not provided. Medicare actually paid approximately $33 million for these fraudulent claims.
The case was investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, under supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida. This case is being prosecuted by Assistant Chief Joseph S. Beemsterboer of the Criminal Division’s Fraud Section.
Since their inception in March 2007, Medicare Fraud Strike Force operations in nine locations have charged more than 1,700 defendants who collectively have falsely 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 Action Team (HEAT), go to: www.stopmedicarefraud.gov .Therapist Pleads Guilty in Miami for His Role <br /> in $63 Million Health Care Fraud SchemeRead the Press Release
A former licensed mental health counselor at the defunct health provider Health Care Solutions Network Inc. (HCSN) pleaded guilty today in Fort Lauderdale, Fla., for his role in a $63 million health care 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.
Ruben Busquets, 50, of Miami, pleaded guilty before U.S. District Judge William J. Zloch in the Southern District of Florida to one count of conspiracy to commit health care fraud. He faces a maximum penalty of 10 years in prison when he is sentenced on Feb. 20, 2014.
According to court records, Busquets was employed as a licensed therapist at HCSN, a mental health facility that purported to provide Partial Hospitalization Program (PHP) services. A PHP is a form of intensive treatment for severe mental illness. HCSN of Florida (HCSN-FL) operated community mental health centers at two locations. Court records indicate that Busquets was aware that HCSN-FL personnel were routinely fabricating patient medical records. Many of these medical records were created weeks or months after the patients were admitted to HCSN-FL for purported PHP treatment and were utilized to support false and fraudulent billing to government sponsored health care benefit programs, including Medicare and Florida Medicaid. During his employment at HCSN-FL, Busquets and his co-conspirators signed fabricated PHP therapy notes and other medical records used to support false claims to government-sponsored health care programs.
According to court documents, from 2004 through 2011, HCSN billed Medicare and the Florida Medicaid program approximately $63 million for purported mental health services.
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 Southern District of Florida. This case was prosecuted by Trial Attorney Allan J. Medina of the Fraud Section.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,700 defendants who have collectively billed the Medicare program for more than $5.5 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov .Pennsylvania Man Sentenced to 18 Months in Prison <br /> for Hacking into Multiple Computer NetworksRead the Press Release
A Pennsylvania man was sentenced to serve 18 months in prison for his role in a scheme to hack into computer networks and sell access to those networks.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and U .S. Attorney Carmen M. Ortiz of the District of Massachusetts made the announcement after sentencing by U.S. District Judge Mark Wolf in the District of Massachusetts on Dec. 11, 2013.
Andrew James Miller, 23, of Devon, Pa., pleaded guilty to conspiracy and computer fraud on Aug. 26, 2013. According to court documents, from 2008 to 2011, Miller remotely hacked into a variety of computers located in Massachusetts and elsewhere, and, in some instances, surreptitiously installed “backdoors” into those computers. These “backdoors” were designed to provide future administrator-level, or “root,” access to the compromised computers.
Miller obtained login credentials to the compromised computers. He and his co-conspirators then sold access to these backdoors, as well as other login credentials. The access sold by Miller and his co-conspirators allowed unauthorized people to access various commercial, education and government computer networks. Miller attempted to sell access for $50,000 to two supercomputers at the Lawrence Berkeley Laboratory in California that were part of the National Energy Research Scientific Computing Center.
The case was investigated by the FBI and prosecuted by Senior Trial Attorney Mona Sedky of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney Adam Bookbinder of the U.S. Attorney’s Office for the District of Massachusetts.First Deadline Approaches for Participation in the Program for Non-Prosecution Agreements or Non-Target Letters for Swiss BanksRead the Press Release
The Tax Division of the Department of Justice today strongly encouraged Swiss banks that want to seek non-prosecution agreements to resolve past cross-border criminal tax violations to submit letters of intent by the Dec. 31, 2013 deadline required by the Program for Non-Prosecution Agreements or Non-Target Letters for Swiss Banks (the Program). The Program was announced on Aug. 29, 2013, in a joint statement signed by Deputy Attorney General James M. Cole and Ambassador Manuel Sager of Switzerland.
“The Program offers Swiss banks a unique opportunity to resolve criminal issues relating to their offshore banking activities that will not be available after the deadline,” said Assistant Attorney General Kathryn Keneally. “Banks that facilitated U.S. tax evasion but do not come forward by the December 31 deadline bear significant risks that information provided by others may cause the bank to be targeted and prosecuted. As the Program and our ongoing investigations provide the U.S. government a wealth of additional information, the risk for those that have engaged in or facilitated U.S. tax evasion grows by the day. The Program offers Swiss banks that engaged in this wrongdoing their best chance to resolve outstanding criminal issues.”
The Program provides a framework that permits every Swiss bank not currently under formal criminal investigation concerning offshore activities to provide the cooperation necessary to resolve potential criminal matters with the department. Currently, the department is actively investigating the Swiss-based activities of 14 banks. Those banks, referred to as Category 1 banks in the Program, are expressly excluded from the Program. The Swiss Federal Department of Finance has released a model order and guidance note that will allow all other Swiss banks to cooperate with the Department of Justice and fulfill the requirements of the Program.
Swiss banks that have committed violations of U.S. tax laws and wish to cooperate and receive a non-prosecution agreement under the Program, known as Category 2 banks, must submit a letter of intent by Dec. 31, 2013. To be eligible for a non-prosecution agreement, Category 2 banks must meet several requirements, which include agreeing to pay penalties based on the amount held in undeclared U.S. accounts, fully disclosing their cross-border activities, and providing detailed information on an account-by-account basis for accounts in which U.S. taxpayers have a direct or indirect interest. Providing detailed information regarding other banks that transferred funds into secret accounts or that accepted funds when secret accounts were closed is also a stipulation for eligibility.
The Tax Division has committed that it will not authorize formal criminal investigations of any additional Swiss banks prior to the Dec. 31, 2013, deadline. However, the Tax Division continues to aggressively pursue those who attempt to evade the law by hiding income and assets outside the United States and those who assist them. In the last six months, the Tax Division has secured two convictions after trial and six guilty pleas of defendants who maintained, or assisted others in maintaining, undeclared bank accounts in foreign countries. Some of those cases include:
· In October 2013, Dr. Patricia Lynn Hough of Englewood, Fla., was convicted by a jury in Fort Myers, Fla., of conspiring to defraud the IRS and of filing false individual income tax returns. According to evidence presented at trial, Hough concealed millions of dollars in assets and income in offshore bank accounts at UBS and other foreign banks, and filed tax returns that failed to report the existence of those foreign accounts or the income earned in those accounts.
· In October 2013, Ashvin Desai, the owner of a medical device company in San Jose, Calif., was convicted of filing false tax returns, aiding and assisting in the preparation of false tax returns and failing to file Reports of Foreign Bank and Financial Accounts (FBARs) following a three-week trial. According to evidence presented at trial, Desai, his wife and two adult children maintained bank accounts worth more than $7 million with The Hongkong and Shanghai Banking Corporation Ltd. (HSBC) in India. Desai prepared and filed income tax returns for his family members that failed to report the accounts or over $1.1 million in interest generated by them over three years.
· In August 2013, Edgar Paltzer, a former partner at a Swiss law firm, pleaded guilty to conspiring with U.S. taxpayer-clients and others to help U.S. taxpayers hide millions of dollars from the IRS in offshore accounts and to evade U.S. taxes on the income earned in those accounts.
· In August 2013, Henry Seggerman of New York and Los Angeles pleaded guilty to charges related to his participation in a scheme with family members to hide over $12 million in secret Swiss bank accounts inherited upon their father’s death. Seggerman’s siblings Suzanne Seggerman, Yvonne Seggerman and Edmund Seggerman each previously pleaded guilty to one count of conspiracy to defraud the United States and two counts of subscribing to false and fraudulent tax returns.
In addition, in July 2013, Liechtensteinische Landesbank AG, a bank based in Vaduz, Liechtenstein, entered into a non-prosecution agreement and agreed to pay more than $23.8 million stemming from its offshore banking activities, and turned over more than 200 account files of U.S. taxpayers who held undeclared accounts at the bank.
The Tax Division is committed to using every tool available to identify, investigate and prosecute those who hide income and assets in offshore bank accounts. Two court orders entered in November 2013 in a New York federal court will further aid these investigations by authorizing the IRS to serve what are known as “John Doe” summonses on five banks to obtain information about possible tax fraud by individuals whose identities are unknown. The John Doe summonses direct the five banks to produce records identifying U.S. taxpayers holding interests in undisclosed accounts at Zurcher Kantonalbank (ZKB) and its affiliates in Switzerland and at The Bank of N.T. Butterfield & Son Limited (Butterfield) and its affiliates in Switzerland, the Bahamas, Barbados, Cayman Islands, Guernsey, Hong Kong, Malta and the United Kingdom. The summonses also direct the five banks to produce information identifying foreign banks that used ZKB’s and Butterfield’s correspondent accounts at the five banks to service U.S. clients.
The Program also provides that Swiss banks that did not engage in wrongful acts with U.S. taxpayers, but nonetheless want a resolution of their status, may apply for a non-target letter. Those banks may not submit a letter of intent until July 1, 2014.
U.S., U.K. Law Enforcement Launch <br /> Task Force to Counter Online Child ExploitationRead the Press Release
The U.S. Department of Justice today hosted a meeting to launch a joint task force between the United Kingdom and the United States to counter online child exploitation.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and U.K. Minister for Policing, Criminal Justice and Victims Damian Green made the announcement.
“Sexual predators are using technology to exploit and harm children, and we need to consider whether technology-based solutions can help curb this abuse and give parents the tools they need to keep their children safe,” said Acting Assistant Attorney General Raman. “Law enforcement is committed to protecting children from abuse, but we know that the help and support of the innovators in the tech community are critical to this important effort. We look forward to collaborating with experts throughout the digital industry on the work of this taskforce.”
“Child abuse is a vile crime,” said Minister Green. “ The UK government is working hard with partners in the US to ensure the Internet cannot be used to sexually abuse children or trade child abuse imagery no matter how technically savvy an offender may be. We have set up the US-UK task force to counter online child exploitation and are drawing on the brightest and best minds from across industry, law enforcement and academia to tackle the dark web, catch abusers and make it much more difficult to access child abuse images online. Today experts from the online industry were invited to attend the first task force meeting, and more companies, both large and small, will be invited to join us in the coming months.”
The task force – co-chaired by Acting Assistant Attorney General Raman and Minister Green – was established to find new technological solutions to combat child sexual exploitation crimes on the Internet and to reduce the volume of child sexual exploitation images online. The task force members include the FBI, Homeland Security Investigations of the Department of Homeland Security, and the U.K. National Crime Agency’s Child Exploitation and Online Protection Centre Command.
The growth of crimes involving the sexual exploitation of children on the Internet is a significant law enforcement challenge shared by all countries. An epidemic volume of child sexual exploitation images is stored and transmitted online by offenders whose crimes are increasingly facilitated by evolving and complex technologies. The task force will seek to leverage the intellectual talent and technical resources of the digital industry by forming and collaborating with an Industry Solutions Group, which will include experts from sectors across the industry to help address the varied and complex technical issues and challenges raised by online child exploitation offenses.
The task force will report back to the U.S. Attorney General and U.K. Prime Minister on its achievements in November 2014.John Charles Mccluskey to Receive Life Prison<br /> Sentence for Murdering Oklahoma CoupleRead the Press Release
John Charles McCluskey, 48, will receive a life prison sentence for a host of crimes arising out of the carjacking and murder of a couple from Tecumseh, Okla., after a federal jury today announced that it could not reach a unanimous decision on whether to impose the death penalty.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, Acting U.S. Attorney Steven C. Yarbrough of the District of New Mexico, Special Agent in Charge Carol K.O. Lee of the FBI’s Albuquerque Division, and New Mexico State Police Chief Pete N. Kassetas made the announcement.
McCluskey was charged with several capital offenses in a 20-count indictment arising out of the carjacking and murders of Gary and Linda Haas, both 61, in Quay County, N.M., on Aug. 2, 2010. On Oct. 7, 2013, the jury found McCluskey guilty on all counts of the indictment after an eight-week trial. On Nov. 5, 2013, the jury found McCluskey eligible for the death penalty following a three-week proceeding. The capital trial concluded today when the jury said it was unable to reach a unanimous verdict on the death penalty. McCluskey will receive a sentence of life in prison. The court has not yet scheduled a date for the imposition of the sentence.
“During an exceptionally violent criminal episode in the summer of 2010, John Charles McCluskey escaped from prison where he was serving a sentence for attempted murder, committed multiple kidnappings during his interstate flight from justice, and mercilessly killed two innocent victims to eliminate them as witnesses,” said Acting Assistant Attorney General Raman. “Through the hard work of federal and state law enforcement and Department of Justice prosecutors, McCluskey and his co-defendants have been brought to justice. Our thoughts are with the victims and their family.”
“The men and women on this jury dedicated the last six months of their lives to performing a very difficult, but necessary, civil service. I respect their verdict and thank them for their personal sacrifice,” said Acting U.S. Attorney Steven C. Yarbrough. “Hopefully, the fact that John Charles McCluskey has been found guilty of every count charged and will now spend the rest of his life in prison with no possibility of parole will bring some measure of comfort and closure to the friends and family Gary and Linda Haas left behind. The prosecutors and investigators who so tirelessly have worked toward the pursuit of justice are also to be commended.”
According to the evidence presented at trial, on July 30, 2010, McCluskey and co-defendant Tracy Allen Province, 46, escaped from an Arizona state prison with the aid of co-defendant Casslyn Mae Welch, 47. On Aug. 2, 2010, McCluskey, Province and Welch carjacked Mr. and Mrs. Haas and their pickup truck and camping trailer at a rest stop off Interstate 40 in Quay County, N.M. McCluskey shot and killed Mr. and Mrs. Haas in the trailer in a remote location east of Tucumcari, N.M. The three confederates then drove the Haases’ truck and trailer to a remote area in Guadalupe County, N.M., where they unhitched, burned and abandoned the trailer with the Haases’ remains still inside. On Aug. 4, 2010, the New Mexico State Police discovered the burned remains of Mr. and Mrs. Haas in the trailer. Province was arrested in Wyoming on Aug. 9, 2010, and McCluskey and Welch were arrested in Arizona on Aug. 19, 2010, following a nationwide, multi-agency manhunt.
The trial evidence also established that McCluskey has the following prior convictions: convictions in 1993 in Pennsylvania for aggravated assault with a firearm and three armed robberies for which he served 15 years in state custody; convictions in 2009 in Arizona for attempted second degree murder and aggravated assault with a firearm, for which he received a 15-year state prison sentence in Arizona; and convictions in 2011 in Arizona for escape, kidnapping, armed robbery, aggravated assault, and felon in possession of a firearm, for which he received a 43-year prison sentence to run consecutive to his 15-year sentence.
On Jan. 20, 2012, Province and Welch each entered a guilty plea to numerous crimes arising out of the carjacking and murder of Mr. and Mrs. Haas, and both testified during the guilt phase of McCluskey’s trial. Under the terms of his plea agreement, Province will be sentenced to five consecutive terms of life in prison without the possibility of release. Welch faces a maximum penalty of life in prison under her plea agreement. Both remain in custody pending their sentencing hearings, which have yet to be scheduled.
“A long, painful ordeal for the Haas family has finally come to an end. Nothing we can do or say here today can return Gary and Linda Haas to their loved ones, but we hope this sentence gives them some measure of closure,” said FBI Special Agent in Charge Carol K.O. Lee. “I would like to recognize the FBI investigators and support personnel who contributed to this case, as well as the federal prosecutors, victim/witness specialists, the New Mexico State Police, and U.S. Marshals Service. The Albuquerque FBI Division will continue to combat violent crime in our big cities and small towns by working closely with our state and local partners.”
“I hope the conviction of John McCluskey brings a sense of closure to the family of Gary and Linda Haas,” said New Mexico State Police Chief Pete N. Kassetas. “This was a difficult and complex investigation but is yet another example of the exemplary relationship the New Mexico State Police maintains with our Federal law enforcement partners. I would like to thank the Federal Bureau of Investigation, United States Attorney’s Office, the Criminal Division of the Department of Justice and all the other New Mexico and Arizona law enforcement agencies that participated in the investigation, capture of John McCluskey and subsequent successful prosecution.”
The case was investigated by Albuquerque and Phoenix Divisions of the FBI and the New Mexico State Police. It is being prosecuted by Assistant U.S. Attorneys Linda Mott and Gregory J. Fouratt of the District of New Mexico and Trial Attorney Michael S. Warbel of the Criminal Division’s Capital Case Section.German Engineering Firm Bilfinger Resolves <br /> Foreign Corrupt Practices Act Charges <br /> and Agrees to Pay $32 Million Criminal PenaltyRead the Press Release
Bilfinger SE, an international engineering and services company based in Mannheim, Germany, has agreed to pay a $32 million penalty to resolve charges that it violated the Foreign Corrupt Practices Act (FCPA) by bribing government officials of the Federal Republic of Nigeria to obtain and retain contracts related to the Eastern Gas Gathering System (EGGS) project, which was valued at approximately $387 million.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and Assistant Director in Charge Valerie Parlave of the FBI’s Washington Field Office made the announcement.
As part of the agreed resolution, the department today filed a three-count criminal information in U.S. District Court for the Southern District of Texas charging Bilfinger with violating and conspiring to violate the FCPA’s anti-bribery provisions. The department and Bilfinger agreed to resolve the charges by entering into a deferred prosecution agreement for a term of three years. In addition to the monetary penalty, Bilfinger agreed to implement rigorous internal controls, continue cooperating fully with the department, and retain an independent corporate compliance monitor for at least 18 months. The agreement acknowledges Bilfinger’s cooperation with the department and its remediation efforts.
According to court documents, from late 2003 through June 2005, Bilfinger conspired with Willbros Group Inc. and others to make corrupt payments totaling more than $6 million to Nigerian government officials to assist in obtaining and retaining contracts related to the EGGS project. Bilfinger and Willbros formed a joint venture to bid on the EGGS project and inflated the price of the joint venture’s bid by 3 percent to cover the cost of paying bribes to Nigerian officials. As part of the conspiracy, Bilfinger employees bribed Nigerian officials with cash that Bilfinger employees sent from Germany to Nigeria. At another point in the conspiracy, when Willbros employees encountered difficulty obtaining enough money to make their share of the bribe payments, Bilfinger loaned them $1 million, with the express purpose of paying bribes to the Nigerian officials.
Including today’s action, the department has filed criminal charges in the Southern District of Texas against three institutions and four executives and consultants in connection with the EGGS bribery scheme:· On Sept. 14, 2006, Jim Bob Brown, a former Willbros executive, pleaded guilty to one count of conspiracy to violate the FCPA in connection with his role in making corrupt payments to Nigerian government officials to obtain and retain the EGGS contract and in connection with his role in making corrupt payments in Ecuador. Brown was sentenced on Jan. 28, 2010, to serve 12 months and one day in prison, to be followed by two years of supervised release, and ordered to pay a $17,500 fine.
· On Nov. 5, 2007, Jason Steph, also a former Willbros executive, pleaded guilty to one count of conspiracy to violate the FCPA in connection with his role in making corrupt payments to Nigerian government officials to obtain and retain the EGGS contract. Steph was sentenced on Jan. 28, 2010, to serve 15 months in prison, to be followed by two years of supervised release, and ordered to pay a $2,000 fine.
· On May 14, 2008, Willbros Group Inc. and Willbros International Inc. entered into a deferred prosecution agreement and agreed to pay a $22 million criminal penalty in connection with the company’s payment of bribes to government officials in Nigeria and Ecuador. On March 30, 2012, the government moved to dismiss the charges against Willbros on the grounds that Willbros had satisfied its obligations under the deferred prosecution agreement, and on April 2, 2012, the court granted the United States’ motion.
· On Dec. 19, 2008, Kenneth Tillery, a former Willbros executive, was charged with conspiring to make and making bribe payments to Nigerian and Ecuadoran officials in connection with the EGGS project and pipeline projects in Ecuador and conspiring to launder the bribe payments. Tillery remains a fugitive. The charges against Tillery are merely accusations, and he is presumed innocent unless and until proven guilty.
· On Nov. 12, 2009, Paul Grayson Novak, a former Willbros consultant, pleaded guilty to one count of conspiracy to violate the FCPA and one substantive count of violating the FCPA in connection with his role in making corrupt payments to Nigerian government officials to obtain and retain the EGGS contract. Novak was sentenced on May 3, 2013, to serve 15 months in prison, to be followed by two years of supervised release, and ordered to pay a $1 million fine.
The case was investigated by the FBI’s Washington Field Office and its team of special agents dedicated to the investigation of foreign bribery cases. The case is being prosecuted by Senior Trial Attorney Laura N. Perkins of the Criminal Division’s Fraud Section.
Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa .Former Washington, D.C.-Area Accountant Sentenced to Prison for Tax FraudRead the Press Release
The Justice Department and Internal Revenue Service (IRS) announced today that John T. Hoang, of Woodbridge, Va., was sentenced in federal district court in Washington, D.C., for willfully aiding and assisting in the preparation of false income tax returns for the 2004 tax year. U.S. District Judge Richard J. Leon sentenced Hoang to serve 48 months in prison, 24 months of supervised release and 240 hours of community service. Judge Leon also ordered him to pay $331,896 in restitution to the IRS. Hoang previously pled guilty on July 31, 2013.
According to court documents and statements made in court, Hoang was a certified public accountant (CPA) and an attorney. From January 2005 through April 2007, Hoang operated John T. Hoang CPA, a tax return preparation business,, and was one of two partners who owned Tax-Smart Technology Services. Hoang operated these businesses from various locations in Washington, D.C., and Fairfax, Va. In 2008, a federal district court in Virginia barred Hoang from preparing federal tax returns.
As alleged in court documents, in his capacity as a tax return preparer, Hoang prepared and supervised the preparation of client tax returns to be filed with the IRS and various state taxing authorities. For the tax years 2004, 2005 and 2006, Hoang prepared hundreds of U.S. Individual Income Tax Returns and earned substantial income from his tax preparation activities. Hoang further received a substantial portion of the refunds issued by the IRS to his clients through his businesses. Despite earning revenue through his businesses of approximately $1 million in 2004; $2 million in 2005; and $3 million in 2006, Hoang failed to file any federal income tax returns or pay any federal income taxes for himself or his businesses during this time.
Hoang admitted that he prepared and caused the preparation of false and fraudulent 2004, 2005 and 2006 income tax returns for his clients. When preparing these false tax returns and related schedules for his clients, Hoang created wholly fictitious business income and expenses for what seemed to be a technology licensing business. The false information resulted in the client-taxpayers reporting fake losses from business activity and receiving either refunds larger than those they were entitled or decreases in the amount of taxes due. Hoang admitted that the tax loss caused by certain false returns he prepared was greater than $30,000 per return, and that he prepared at least 24 such false returns for the 2004 through 2006 tax years.
As part of the plea agreement, Hoang admitted that the total tax loss caused by his criminal conduct is greater than $1.5 million.
The case was investigated by IRS-Criminal Investigation and was prosecuted by Trial Attorneys Jorge Almonte and Jeffrey B. Bender of the Justice Department’s Tax Division.
Former Chief Executive of Mortgage Servicing Company Sentenced for Scheme to Withhold Funds from <br /> Wells Fargo BankRead the Press Release
Earl Gross, 74, of Las Vegas, the former President and Chief Executive Officer of U.S. Mortgage, a loan servicing company, was sentenced to serve 18 months in prison for his role in an $8 million scheme to defraud Wells Fargo Bank.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Daniel G. Bogden of the District of Nevada and Special Agent in Charge Laura A. Bucheit of the FBI’s Las Vegas Field Office made the announcement after the sentence was imposed by U.S. District Court Judge Andrew P. Gordon of the District of Nevada.
On June 11, 2013, Gross pleaded guilty to one count of bank fraud. In addition to his prison term, Gross was ordered to forfeit $8,440,439 in fraudulent proceeds.
According to plea documents, Wells Fargo Bank contracted with U.S. Mortgage to service pools of residential mortgage loans held by investors in mortgage backed securities. Under the agreement, Gross and U.S. Mortgage were obligated to collect from the borrowers the monthly payments that the borrowers made toward their mortgage obligations and forward these proceeds to Wells Fargo Bank. In the event that a borrower paid off the loan – usually by selling the mortgaged property – U.S. Mortgage was obligated to remit to Wells Fargo Bank the full payoff amount. U.S. Mortgage agreed to provide Wells Fargo Bank with monthly reports that described the status of the loans, and it received servicing fees for each loan it serviced.
According to the indictment, from 2004 to 2009, Mr. Gross and U.S. Mortgage withheld over $8 million in loan payoffs that were due Wells Fargo Bank by submitting to the bank reports stating that numerous borrowers were continuing to make monthly payments when in fact they had paid off the loans in full. Rather than remit the full payoff amount to Wells Fargo Bank, Gross and U.S. Mortgage forwarded only what the borrowers’ monthly payments would have been and retained the difference in U.S. Mortgage’s bank account. To deceive Wells Fargo Bank about the status of paid-off loans, Gross and U.S. Mortgage created fake amortization schedules indicating that borrowers who had sold and paid off homes were continuing to make monthly payments. In addition to withholding loan payoff amounts to which he was not entitled, Gross charged Wells Fargo Bank fees to service mortgage loans that had been paid off.
The case was investigated by the FBI and prosecuted by Deputy Chief Charles La Bella and Trial Attorney Brian R. Young of the Criminal Division’s Fraud Section, with assistance from Roberto Iraola of the Office of International Affairs and the United States Attorney’s Office for the District of Nevada.
Today’s guilty plea was a result of efforts by President Obama’s Financial Fraud Enforcement Task Force (FFETF), which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorney’s Offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory, and regulatory agencies ever assembled to combat fraud. Since its formation, the Task Force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants, including more than 2,700 mortgage fraud defendants. For more information on the Task Force, visit www.StopFraud.gov .Federal Court Shuts Down Atlanta-Area Tax PreparerRead the Press Release
A federal court in Atlanta permanently barred Matthew Adegbite and his companies, MAS & Associates CPA LLC and Mathew A. Adegbite CPA PC, from preparing federal income tax returns for others, the Justice Department announced today. The permanent injunction order was signed today by Judge Clarence Cooper of the U.S. District Court for the Northern District of Georgia.
According to the complaint, Adegbite has prepared more than 1,000 returns since 2008. Allegedly, Adegbite repeatedly understated his clients’ federal tax liabilities by claiming false or inflated tax deductions and credits his clients were not eligible to take. Adegbite’s alleged schemes include claiming the First Time Home Buyer Credit for taxpayers who did not actually purchase homes, deducting fictitious business expenses for taxpayers who did not operate a business and inflating deductions for legitimate businesses to claim losses for otherwise profitable enterprises. The complaint further alleged that the harm to the U.S. Treasury as a result of his conduct could amount to millions of dollars and that a permanent injunction was warranted to prevent further harm.
Return preparer fraud is one of the Internal Revenue Service’s Dirty Dozen Tax Scams for 2013 . The IRS has tips for choosing a tax preparer: www.irs.gov/Tax-Professionals/Choosing-a-Tax-Professional . In the past decade, the department’s 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. Matthew Adegbite, et al.
Final Judgment and Permanent InjunctionEmergency Room Doctor Sentenced for Failure to File Tax ReturnsRead the Press Release
Dr. Michael Austin, 57, of Atlanta, Ga., was sentenced today to serve one year and one day in federal prison for willfully failing to file individual income tax returns for tax years 2008 and 2009, announced Assistant Attorney General Kathryn Keneally of the Justice Department's Tax Division and U.S. Attorney Michael J. Moore for the Middle District of Georgia. Austin was further ordered to serve one year of supervised release and to pay restitution to the Internal Revenue Service (IRS). Austin previously pleaded guilty to these charges on Aug. 27, 2013.
According to documents filed in court, during 2008 and 2009, Austin was a medical doctor licensed by the state of Georgia who earned substantial income from practicing of medicine at various hospitals, clinics and other health care institutions. As alleged in the case, Austin earned at least $213,931 in 2008 and $210,644 in 2009, which required him to file an income tax return with the Internal Revenue Service (IRS). Nonetheless, as Austin admitted in his plea agreement, he willfully failed to file an individual income tax return for both years. In total, Dr. Austin agreed to pay restitution of at least $215,906.44 to the IRS.
This case was investigated by special agents of the IRS - Criminal Investigation. Trial Attorney Hayden Brockett of the department's Tax Division prosecuted the case, with the assistance of the U.S. Attorney’s Office for the Middle District of Georgia.
Court Prohibits S.C. Tax Return Preparer from Preparing Returns for OthersRead the Press Release
A federal district judge in Charleston, S.C., has permanently barred Jessica Geddis, of Summerville, S.C., from preparing federal income tax returns for others, the Justice Department announced today. Geddis consented to the entry of the injunction.
According to the government’s complaint, Geddis prepared federal income tax returns from her home and as a tax preparer at Smith’s Tax Service and, later, at MBM Tax and Accounting Services LLC. As alleged in the complaint, Geddis prepared returns that unlawfully overstated tax refunds through a household help scheme. The complaint alleged that Geddis prepared returns for herself and others that overstated income by reporting fictitious household help income in order to increase the amount of her customers’ refundable tax credits, including the Earned Income Tax Credit, Child Tax Credit and Making Work Pay Credit. The complaint further alleged that Geddis directed the Internal Revenue Service (IRS) to deposit all, or a portion of, her customers’ overstated refunds into bank accounts that she controlled. According to the complaint, the IRS reviewed Geddis’ bank records and determined that she received at least 148 tax refunds totaling $281,678 between January 2008 and May 2012.
Return preparer fraud is one of the IRS’ Dirty Dozen Tax Scams for 2013, which can be viewed at www.irs.gov/uac/Newsroom/IRS-Releases-the-Dirty-Dosen-Tax-Scams-for-2013 . The IRS has tips for choosing a tax preparer: www.irs.gov/Tax-Professionals/Choosing-a-Tax-Professional . In the past decade, the Justice Department’s Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers. Information about these cases is available on the Justice Department website at www.justice.gov/tax/taxpress2013.htm.
Related Materials:
United States v. Jessica Geddis
Permanent Injunction
Alabama Shrimper Convicted for Shooting DolphinRead the Press Release
An Alabama man pleaded guilty yesterday in a federal court in Gulfport, Miss., to knowingly shooting a dolphin, the Justice Department announced.
Brent Buchanan, 38, of Bayou La Batre, Ala., pleaded guilty to one misdemeanor count of knowingly taking a protected marine mammal, a federal crime under the Marine Mammal Protection Act. In court documents, Buchanan admitted to knowingly shooting a dolphin with a shotgun while shrimping in the Mississippi Sound in July or August 2012.
A sentencing hearing is set for Feb. 24, 2014. The maximum penalty is one year in prison, a $100,000 fine, and a $25 special assessment.
The Marine Mammal Protection Act is a federal law which makes it illegal to harass, hunt, capture, or kill, or to attempt to harass, hunt, capture, or kill, any marine mammal in waters under the jurisdiction of the United States. The Act protects all species of dolphins, as well as other marine mammals such as whales and seals.
The case was investigated by the National Oceanic and Atmospheric Administration’s (NOAA) Office of Law Enforcement, with assistance from the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives, the U.S. Customs and Border Protection Office of Air and Marine, the Alabama Marine Police, and Alabama Department of Conservation and Natural Resources, Marine Resource Division. The case was prosecuted by the U.S. Attorney’s Office for the Southern District of Mississippi and the Environmental Crimes Section of the Justice Department’s Environment and Natural Resources Division.
NOAA Office of Law Enforcement is actively investigating a number of other possible dolphin shootings along the northern Gulf Coast since 2012. Anyone possessing information relating to such an incident is requested to contact NOAA Office of Law Enforcement at 1-800-853-1964 or a state wildlife law enforcement agency.
Utah Resident Pleads Guilty to Filing False Claims for Tax Refunds Totaling $653,884Read the Press Release
Stanley J. Wardle, 65, of Spanish Fork, Utah, pleaded guilty today in the U.S. District Court in Salt Lake City to nine counts of filing false claims for income tax refunds, the Justice Department and Internal Revenue Service (IRS) announced. Wardle, who was indicted on Feb. 15, 2012, is scheduled to be sentenced before U.S. District Judge Dee Benson on Feb. 27, 2014.
According to the indictment, on or about Jan. 22, 2009, Wardle prepared and filed a false U.S. Individual Income Tax Return for the year 2008, in which he claimed a tax refund of $32,115. In addition, between Dec. 8, 2008 and May 13, 2009, he caused additional false claims for tax refunds to be made on behalf of others. In total, Wardle was involved in false claims for refunds totaling $653,884.
Wardle faces a statutory maximum sentence of five years in prison and a fine of up to $250,000 or twice the gross gain or loss caused by the defendant for each false claim charge.
Assistant Attorney General Kathryn Keneally for the department’s Tax Division commended the special agents of IRS - Criminal Investigation who investigated the case, and Tax Division Trial Attorneys Michael Romano and Stuart Wexler, who prosecuted the case.
Northrop Grumman Corp. Pays $11.4 Million to Resolve Allegations That It Improperly Charged Costs to Government ContractsRead the Press Release
The Justice Department announced today that Northrop Grumman Corp. has paid the United States $11.4 million to settle a government claim for penalties provided under the Federal Acquisition Regulation (FAR) and False Claims Act allegations stemming from its failure to abide by a 2002 settlement agreement with the Defense Contract Management Agency (DCMA). The government alleged that Northrop charged to its federal contracts certain costs for deferred compensation awards to key employees, even though it had promised not to do so as part of the earlier 2002 settlement.
“Federal contractors must abide by the obligations they accept when contracting with the government, including compliance with federal regulations restricting the types and amount of costs they can charge to their federal contracts,” said Assistant Attorney General for the Department of Justice’s Civil Division Stuart F. Delery. “The Department of Justice is committed to enforcing these fundamental obligations using every available tool, including FAR penalties assessed under the contract and, where appropriate, fraud-based counterclaims.”
Northrop had agreed in its 2002 settlement with DCMA that it would limit the amount of deferred compensation it would include in proposals for subsequent contracts. The government’s contracting officer found that Northrop had failed to honor this commitment and should be assessed a penalty equal to twice the amount of the unallowable costs claimed. Northrop challenged the decision in a complaint filed in the U.S. Court of Federal Claims in Washington, D.C. The Department of Justice responded to the suit with counterclaims alleging that in addition to the FAR penalties, Northrop also had violated the False Claims Act by passing along these unallowable costs to the government in indirect rates applicable to hundreds of 2004 contracts with the government. The government alleged that as a consequence of Northrop’s knowing misrepresentations, it was induced to pay more than $1.9 million in unallowable costs in thousands of vouchers and invoices.The settlement was the result of a consolidated effort spearheaded by the Civil Division’s Commercial Litigation Branch in conjunction with the DCMA and the Defense Contract Audit Agency, Western Region Investigative Support Division. The claims settled by this agreement are allegations only, and there has been no determination of liability. The case is captioned Northrop Grumman Corporation v. United States, Fed. Cl. No. 07-482C.
NOAA Special Agent Charles A. Raterman Honored by U.S. Attorney Alicia A.G. LimtiacoRead the Press Release
HAGATNA, GU – United States Attorney ALICIA A.G. LIMTIACO, United States Attorney for the Districts of Guam and the Northern Mariana Islands (NMI), presented a special award today to National Oceanic and Atmospheric Administration (NOAA) Special Agent Charles (Chuck) A. Raterman in recognition of his work to establish a Sea Turtle reward program for this region.
The poaching of sea turtles is prevalent on Guam. It is a challenge to prosecute such violators because they typically reside in the smaller villages on the southern part of Guam, where hunting and killing sea turtles is a source of increased status. A network of friends and relatives are often aware of their activities and they maintain a traditional code of silence as to the violators. This reward program was initiated to raise awareness of the effect of this poaching and to break that code of silence, encouraging citizens to come forward, even if it might involve persons within their social or village network.
This is NOAA’s first permanent reward program for turtles, known as “haggan” in the Chamorro language. Chuck created flyers urging people to be “Haggan Heroes,” posted them at mayors= offices, stores, charter dive shops and fish markets on Guam and Saipan. He has appeared at numerous Saturday public outreach events sponsored by law enforcement, as well as fishing derbies, career days and local festivals, radio and school appearances. He has enlisted the support of the Guam Department of Wildlife Resources, whose agents have assisted him in distributing more than 200 posters around this region.
To date, three individuals have qualified for this $1,000 reward by providing information that has led to the arrest and conviction of turtle poachers. We are hopeful that more people will come forward to help us put an end to this destructive poaching, so this species has a chance to recover.
See attached photos.
From left to right, First Assistant Steve Sinnott, Civil Chief Mikel Schwab, U.S.
Attorney Alicia Limtiaco, NOAA Special Agent Chuck Raterman and AUSA Karon Johnson.
NOAA Special Agent Chuck Raterman with the U.S. Attorney’s Staff for the District
of Guam after being presented with a plaque and a turtle with the staff’s congratulatory remarks.Joaquin F. Taitano Sentenced in U.S. District CourtRead the Press Release
United States Attorney ALICIA A.G. LIMTIACO, U.S. Attorney for the Districts of Guam and the Northern Mariana Islands (NMI), announced that Defendant JOAQUIN TAITANO, age 35, from Yigo, was sentenced on December 6, 2013, in the District Court of Guam, to 30 months incarceration, three years supervised release, and 100 hours community service for Conspiracy to Distribute less than five grams of methamphetamine. TAITANO was charged in an indictment on April 27, 2013, with Possession of Methamphetamine with Intent to Distribute, in violation of Title 21, U.S.C. § 841(a)(1). He pled guilty on June 28, 2011.
The investigation was conducted by Task Force Agents from the Superior Court’s probation office assigned to the Drug Enforcement Administration. The case was handled by Assistant U.S. Attorney Clyde Lemons.Government Intervenes in False Claims Lawsuit Against Ipc the Hospitalist Co. Inc. Alleging Overbilling of Physician ServicesRead the Press Release
The government has intervened in a lawsuit against IPC The Hospitalist Co. Inc., and its subsidiaries (IPC), alleging that IPC submitted false claims to federal health care programs, the Justice Department announced today. IPC, based in North Hollywood, Calif., is one of the largest providers of hospitalist services in the United States, employing physicians and other health care providers who work in more than 1,300 facilities in 28 states. Hospitalists are physicians who work only in hospitals and other long-term care facilities, overseeing and coordinating inpatient care from admission to discharge.
The lawsuit alleges that IPC physicians sought payment for higher and more expensive levels of medical service than were actually performed – a practice commonly referred to as “upcoding.” Specifically, the lawsuit alleges that IPC encouraged its physicians to bill at the highest levels regardless of the level of service provided, trained physicians to use higher level codes and encouraged physicians with lower billing levels to “catch up” to their peers.
“We continue to be vigilant in our enforcement efforts to ensure that health care programs funded by the taxpayers pay only for appropriate costs,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery.
The lawsuit was filed by Dr. Bijan Oughatiyan, a former IPC physician, under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private parties to sue for false claims on behalf of the government and to share in any recovery. The Act also allows the government to intervene or take over the lawsuit, as it has done in this case, and to recover three times its damages plus civil penalties. The government has asked the U.S. District Court in Chicago for 120 days to file its own complaint stating its allegations.
This intervention 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 Health and Human Services Secretary 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 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 was investigated by the Commercial Litigation Branch, Civil Division, U.S. Department of Justice and the U.S. Attorney’s Office for the Northern District of Illinois, with assistance from the Department of Health and Human Services Office of Inspector General.
The case is captioned United States ex rel. Oughatiyan v. IPC The Hospitalist Company Inc., et al., Civ. No. 09 C 5418 (N.D. Ill.). The claims asserted against IPC are allegations only; there has been no determination of liability.First Public Hearing of the American Indian and Alaska Native Children Exposed to Violence Task Force Held in Bismarck, N.D.Read the Press Release
The Attorney General’s Advisory Committee of the Task Force on American Indian/Alaska Native Children Exposed to Violence held its first public hearing today in Bismarck, N.D., convening tribal researchers, advocates and local community members to discuss domestic violence and child physical and sexual abuse in Indian Country.
The task force is comprised of a federal working group that includes U.S. Attorneys and officials from the Departments of the Interior and Justice and an advisory committee of experts on American Indian studies, child health and trauma and child welfare.
“Today represents an important step in protecting American Indian and Alaska Native children,” said Associate Attorney General Tony West. “This task force has already begun addressing children’s exposure to violence in tribal communities in ways that recognize the unique government-to-government relationship between the United States and tribes, and it will continue to develop approaches that will help us protect our children.”
“The problem of American Indian and Alaska Native children’s exposure to violence is complex and widespread and can have devastating consequences for these children,” said Assistant Attorney General for the Office of Justice Programs Karol V. Mason. “I’m pleased that this group of experts will help us understand the challenges before us and give us the information we need to reduce the incidence of violence and trauma among native children.”
During the hearing, experts on the trauma of sexual abuse of American Indian children discussed their experiences and recommended ways to improve the identification, assessment and treatment of children. Other topics addressed included violence in the home, healing from trauma and programs for children exposed to violence in Indian Country and urban communities.
In addition to today’s hearing, the advisory committee will convene three public hearings in early 2014 in Phoenix, Fort Lauderdale, Fla., and Anchorage, Alaska, focusing on violence in homes, schools and communities in Indian country. The 13-member advisory committee is co-chaired by former U.S. Senator Byron Dorgan and Iroquois composer and singer Joanne Shenandoah. The advisory committee will draw upon research and information gathered through public hearings to draft a final report of policy recommendations that it will present to Attorney General Eric Holder by late 2014.
Attorney General Holder created the task force this year as part of his Defending Childhood initiative to prevent and reduce children’s exposure to violence as victims and witnesses. The task force is also a component of the Justice Department’s ongoing collaboration with leaders in American Indian and Alaska Native communities to improve public safety.
For more information about the advisory committee and public hearings, please visit www.justice.gov/defendingchildhood.Alabama Man Pleads Guilty for His Role in Racially Motivated Cross BurningRead the Press Release
Thomas Windell Smith, 24, of Dothan, Ala., turned himself in and pleaded guilty in federal court on Friday, Dec. 6, 2013, to one count of conspiring to violate housing rights, the Justice Department announced today. The information charging Smith was unsealed today. The charge relates to his participation in a cross burning at the entrance to an African-American community in Ozark, Ala., on May 8, 2009, with a former KKK leader who was arrested and charged with a five-count indictment on Wednesday, Nov. 27, 2013.
During his plea, Smith admitted that he and a co-conspirator agreed to burn a cross together in order to intimidate the neighborhood’s African-American residents. Using materials from around his home, the co-conspirator constructed a wooden cross about six feet tall and wrapped cloth around the cross. The co-conspirator loaded the cross into Smith’s truck, and, with Smith driving while the co-conspirator provided directions, the two men transported the cross to a predominantly African-American residential neighborhood. They unloaded the cross at the entrance to the community, where the co-conspirator poured fuel on the cross, stood it up in view of several houses and set it on fire.
“The defendant’s crime illustrates the damage hate crimes can do to entire communities, making people feel unsafe in their own homes,” said Acting Assistant Attorney General Jocelyn Samuels for the Civil Rights Division. “We’d like to think these offenses are a thing of the past, but the reality is that they happen here in the 21st century. The Justice Department is committed to stamping them out.”
“This defendant not only committed a federal crime, but committed a contemptible action of hate,” said U.S. Attorney George L. Beck Jr. “Citizens in the Middle District of Alabama should not and will not tolerate such actions. I hope this prosecution sends a clear message that these hateful demonstrations will not be tolerated and will be prosecuted to the fullest extent of the law.”
Smith faces a statutory maximum penalty of 10 years in prison and a fine of up to $250,000.
This case was investigated by the Federal Bureau of Investigation, with the assistance of the Dale County Sheriff’s Office and the Ozark Police Department. The case is being prosecuted by Assistant U.S. Attorney Jerusha T. Adams of the Middle District of Alabama and Trial Attorney Chiraag Bains of the department’s Civil Rights Division.
Virginia Man Sentenced for <br /> Conducting $270 Million Investment Fraud SchemeRead the Press Release
The owner of a Virginia-based investment firm was sentenced today to serve 144 months in prison for orchestrating a $270 million stock loan scheme that defrauded his clients of more than $35 million.
Acting Assistant Attorney General Mythili Raman of the Department of Justice’s Criminal Division, Acting United States Attorney Dana J. Boente of the Eastern District of Virginia and Assistant Director in Charge Valerie Parlave of the FBI’s Washington Field Office made the announcement after sentencing by U.S. District Judge Gerald Bruce Lee of the Eastern District of Virginia.
William Dean Chapman, 44, of Sterling, Va., pleaded guilty to one count of wire fraud on May 23, 2013. Chapman was the founder and owner of Alexander Capital Markets (ACM), whose primary business was to offer a financial product that provided customers with a purportedly fully hedged loan at an above-market rate of interest against a customer’s securities. This served as collateral for the transaction for a percentage – typically between 85 percent and 90 percent – of the securities’ value. For example, in exchange for a customer’s Apple stock, ACM would provide a cash loan to that customer worth 85 percent or 90 percent of the stock’s value. After a period of time – between two and seven years, and typically three years – the customer could receive back their securities, or the equivalent cash value, if they repaid the balance of the loan plus accrued interest. Alternatively, because the loans were non-recourse, the customer could walk away at the end of the redemption period having already received up to 90 percent of the value of their securities.
ACM’s customers were assured that ACM was engaged in hedging transactions such that ACM would be able to return the full value of the securities, or the cash equivalent, at the end of the contract period. In reality, ACM simply sold the securities upon receipt, remitted up to 90 percent of the sales proceeds to its customers as the loan, and retained the remaining sales proceeds for itself and the parties who sold, marketed or facilitated the product.
Because ACM simply sold the securities upon receipt and no legitimate hedge existed, ACM could not return securities, or the cash equivalent, to the customers at the end of the redemption period unless it had sufficient funds to buy back the securities. By in or about April 2008, ACM was functionally insolvent. ACM did not have – and could not have expected to have – sufficient funds to cover its outstanding liabilities. Nevertheless, Chapman continued to solicit new customers despite knowing that ACM would never be able to fulfill its financial obligations.
Over seven years, Chapman took in more than $270 million in stock, and 122 victims lost more than $35 million as a result of this scheme. At the same time that ACM was amassing massive liabilities and failing to repay its existing clients, Chapman used his clients’ money to support a lavish lifestyle by purchasing a custom-built $3 million home in Great Falls, Va.; condominiums in the Turks & Caicos and Pompano Beach, Fla.; and a Lamborghini and Ferrari.
This case was investigated by the FBI’s Washington Field Office. The Criminal Division and the U.S. Attorney’s Office for the Eastern District of Virginia recognize the substantial assistance of the U.S. Securities and Exchange Commission on this case. Assistant United States Attorney Chad Golder and Trial Attorney Henry Van Dyck of the Criminal Division’s Fraud Section prosecuted the case on behalf of the United States.Owner of New York Sportswear Distribution Business Sentenced for Tax FraudRead the Press Release
Harry Neuhoff, a resident of Brooklyn, N.Y., was sentenced to serve 12 months and one day in prison and three years supervised release for tax evasion, the Justice Department and Internal Revenue Service (IRS) announced today.
According to documents filed with the court, Neuhoff was the president and an owner of EVA TEES Inc., a wholesale distributor of sportswear. EVA TEES was formerly located in Long Island City, N.Y., and is presently located in Piscataway, N.J. From approximately 2006 to 2008, Neuhoff manipulated EVA TEES accounts through his accounting software program to delete cash sales from the general ledger accounts maintained on the computer accounting system. As a result, Neuhoff caused false corporate tax returns to be filed with the IRS that underreported the company’s gross receipts. During those years, Neuhoff’s behavior also resulted in his filing false personal income tax returns with the IRS. According to documents filed with the court, Neuhoff underreported the gross receipts of EVA TEES by at least $1.5 million using computer manipulation.
The case was investigated by IRS-Criminal Investigation. Trial Attorneys Mark Kotila and Karen E. Kelly of the Justice Department’s Tax Division prosecuted this case.
Justice Department Reaches Settlement with Newseum to Improve Access for People with DisabilitiesRead the Press Release
The Department of Justice announced today that it has reached a settlement with Newseum Inc., which owns and operates the Newseum, to address alleged violations of the Americans with Disabilities Act (ADA). The settlement agreement resolves allegations that the Newseum, a museum of news and history in Washington, D.C., was operating exhibits and providing facilities that were not accessible to people with disabilities.
Under the settlement, the Newseum must take steps to ensure that all of its programs, exhibits and facilities are accessible to people with disabilities, including:
· Providing additional wheelchair spaces and companion seats in the Walter and Leonore Annenberg Theater;
· Providing assistive listening devices for patrons who are deaf or hard of hearing in the Newseum’s 15 theaters, and providing captioning and other auxiliary aids and services throughout its more than 20 galleries of exhibitions and interactive programs;
· Ensuring that the operating controls of all Newseum interactive programs are within the reach-range of people who use wheelchairs;
· Providing museum tours that are audio described and include tactile experiences for individuals who are blind or have impaired vision ; and
· Providing printed materials and maps in alternate formats (e.g., audio, large print and Braille).
“This agreement ensures that people with disabilities will have an equal opportunity to enjoy the Newseum as other visitors,” said Acting Assistant Attorney General Jocelyn Samuels for the Civil Rights Division. “The Justice Department is committed to knocking down these types of barriers, and we commend the Newseum for its innovative efforts to improve accessibility for all visitors.”
The agreement resolves a compliance review under the ADA. People interested in finding out more about the ADA, the Standards for Accessible Design or this agreement can call the department’s toll-free ADA Information Line at 1-800-514-0301 or 1-800-514-0383 (TTY) or visit its ADA website at www.ada.gov.
Justice Department Files Lawsuit to Stop Tennessee Man from Preparing Tax ReturnsRead the Press Release
The Department of Justice filed a civil lawsuit today in Memphis federal court to stop Grady Smith, who does business as One Price Refunds, from preparing federal tax returns. According to the complaint, Smith and One Price Refunds have prepared over 2,000 tax returns since 2009.
The complaint filed with the U.S. District Court for the Western District of Tennessee alleges that Smith understates his customers’ federal tax liabilities by reporting false or inflated business expenses, reporting false or inflated educational expenses and improperly claiming the earned income tax credit. In addition, the complaint alleges that Smith has prepared tax returns using fictitious taxpayer identification numbers, thereby obscuring his identity as the tax return preparer. According to the complaint, Smith’s activities may have caused a total of over $800,000 in harm to the government.
Return preparer fraud is one of the Internal Revenue Service’s Dirty Dozen Tax Scams for 2013, which can be viewed at www.irs.gov/uac/Newsroom/IRS-Releases-the-Dirty-Dozen-Tax-Scams-for-2013 . The Internal Revenue Service has some tips for choosing a tax preparer: www.irs.gov/Tax-Professionals/Choosing-a-Tax-Professional . In the past decade, the department’s Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers. Information about these cases is available on the Justice Department website at www.justice.gov/tax/taxpress2013.htm .
Related Materials:
United States v. Grady Smith
Complaint for Preliminary and Permanent Injunction
Jesus Sablan Palacios Found Guilty on Federal Firearm ChargesRead the Press Release
United States Attorney ALICIA A.G. LIMTIACO, U.S. Attorney for the Districts of Guam and the Northern Mariana Islands (NMI), announced that Jesus Sablan Palacios was found guilty on Wednesday, December 5, 2013, of the following charges: three counts of Felon in Possession of Firearm and/or Ammunition, and three counts of Unlawful User of a Controlled Substance in Possession of Firearm and/or Ammunition, in violation of Title 18 U.S.C. §§ 922(g)(1) and (3).
Defendant Palacios will be sentenced on March 14, 2014 in the U.S. District Court for the Northern Mariana Islands. Palacios is facing a mandatory minimum of 15 years imprisonment and a maximum sentence of life, under the armed career criminal sentencing enhancement.
The Indictment filed on August 22, 2013 charged that Defendant Palacios, after having been convicted of a crime, knowingly possessed six .22 caliber bullets, ten Winchester 38SPL .38 caliber bullets, eight .9 mm caliber bullets and one Ruger, Model 10/22, .22 caliber rifle, one .22 caliber rifle with its barrel and stock sawed off, and three .22 caliber bullets, all items that had been shipped and transported in interstate and foreign commerce. Defendant Palacios was also charged with being an unlawful user of a controlled substance while knowingly possessing these items.
U.S. Attorney Limtiaco stated, “The possession of firearms and drugs is a potentially deadly combination. Innocent civilians and law enforcement are unnecessarily placed at great risk of harm by the exposure to firearms in the wrong hands. Those who use firearms to protect their illegal activities must know that they will face hard time.” U.S. Attorney Limtiaco also stated, “Methamphetamine has been linked to an increase in violent crimes and results in devastating effects to individuals and to the community. Those who engage in the use of this illegal drug and found to be in possession of firearms will be prosecuted and face severe penalties.”
This case was investigated by Special Agents from the Bureau of Alcohol, Tobacco, Firearms and
explosives (ATF), and the Drug Enforcement Administration (DEA), and officers from the CNMI
Department of Public Safety. Assistant United States Attorneys Rami Badawy and Ross Naughton
prosecuted the case.Information Technology Specialist at <br /> National Science Foundation <br /> Pleads Guilty to Stealing $90,000 from GovernmentRead the Press Release
An information technology specialist working for the National Science Foundation (NSF) pleaded guilty late yesterday to theft of government property totaling more than $90,000, announced 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.
According to court records, James Troy Clark, 51, of Fredericksburg, Va., was responsible for purchasing information technology supplies and services for his office at NSF using government-issued purchase cards. From 2010 through July 2013, Clark used these purchase cards to purchase items for his personal use and the personal use of others, including cellular telephones and the attendant monthly service charges for those phones; multiple laptop computers and tablets; thousands of dollars in movies, music, and other content from the Apple iTunes store; and numerous other electronic devices and accessories.
The total amount of purchases made by Clark for his and others’ personal use was approximately $94,493. Clark faces a maximum penalty of 10 years in prison when he is sentenced on Feb. 21, 2014.
The case was investigated by National Science Foundation’s Office of Inspector General. The case was prosecuted by Trial Attorneys Kevin Driscoll and Menaka Kalaskar of the Criminal Division’s Public Integrity Section and Mark D. Lytle of the U.S. Attorney’s Office for the Eastern District of Virginia.Former Sea Star Line President Sentenced to Serve Five Years in <br /> Prison for Role in Price-Fixing Conspiracy Involving Coastal <br /> Freight Services Between the Continental United States and <br /> Puerto RicoRead the Press Release
The former president of Sea Star Line LLC, a Jacksonville, Fla.-based water freight carrier, was sentenced to serve five years in prison and to pay a $25,000 criminal fine for his participation in a conspiracy to fix rates and surcharges for freight transported by water between the continental United States and Puerto Rico, the Department of Justice announced today.
Frank Peake was sentenced today by Judge Daniel R. Dominguez in U.S. District Court for the District of Puerto Rico in San Juan. Peake’s two-week trial took place in January 2013.
“The sentence imposed today reflects the serious harm these conspirators inflicted on American consumers, both in the continental United States and in Puerto Rico,” said Bill Baer, Assistant Attorney General in charge of Department of Justice’s Antitrust Division. “The Antitrust Division will continue to vigorously prosecute executives who collude to fix prices at the expense of consumers.”
According to court documents and evidence presented at trial, Peake and his co-conspirators conspired through meetings and other communications in the continental United States and Puerto Rico to fix, stabilize and maintain rates and surcharges for Puerto Rico freight services, to allocate customers of Puerto Rico freight services between and among the conspirators and to rig bids submitted to customers of Puerto Rico freight services. Peake was involved in the conspiracy from at least late 2005 until at least April 2008.As a result of the ongoing investigation, the three largest water freight carriers serving routes between the continental United States and Puerto Rico, including Peake’s former employer Sea Star, have pleaded guilty and been ordered to pay more than $46 million in criminal fines for their roles in the conspiracy. Sea Star pleaded guilty on Dec. 20, 2011, and was sentenced by Judge Dominguez to pay a $14.2 million criminal fine. Sea Star transports a variety of cargo shipments, such as heavy equipment, perishable food items, medicines and consumer goods, on scheduled ocean voyages between the continental United States and Puerto Rico.
Peake and five other individuals have been ordered to serve prison sentences ranging from seven months to five years. Additionally, Thomas Farmer, the former vice president of price and yield management of Crowley Liner Services, was indicted in March 2013 for his role in the conspiracy and is scheduled to go to trial in May 2014.This case is part of an ongoing investigation being conducted by the Antitrust Division’s National Criminal Enforcement Section and the Defense Criminal Investigative Service. Anyone with information concerning price fixing or other anticompetitive conduct in the coastal water freight transportation industry is urged to call the Antitrust Division’s National Criminal Enforcement Section at 202-307-6694.
Statement of Attorney General Eric Holder on the Death of Nelson MandelaRead the Press Release
Attorney General Eric Holder issued the statement below following the death of Nelson Mandela:
“I join President Obama in expressing my heartfelt condolences to the people of South Africa, and the entire Mandela family, on the passing of Nelson Mandela.
The world has lost an extraordinary pioneer and an unsurpassed champion for freedom and justice. As a lawyer and an activist, he inspired millions – not only in South Africa, but around the globe – to stand united against oppression and apartheid. As a statesman, he fought throughout his career to advance democratic values, working tirelessly to combat poverty, AIDS, and human rights abuses. As South Africa’s first democratically-elected president, he sought to bring healing to a torn and deeply divided country. And he became much more than the ‘father of a nation.’
Like so many – in every corner of the globe – I have regarded President Mandela as a personal hero for decades. I was inspired years ago by his courage and his devotion to improving the lives of those around him. And when I had the privilege of meeting with him, as Deputy Attorney General, I found him to be a remarkable man and a brilliant and principled leader. His legacy will endure, and his important work will go on, in the efforts of all who continue to speak out for peace, for freedom, for justice, and for the dignity to which every human being is entitled. I was deeply saddened to hear of his passing today, and will hold his friends, loved ones, and countrymen and -women in my thoughts and prayers.”
New York Antiques Dealer Sentenced to 37 Months in Prison for Wildlife SmugglingRead the Press Release
Qiang Wang, aka Jeffrey Wang, a New York antiques dealer, was sentenced in federal court in Manhattan today to 37 months in prison to be followed by three years of supervised release for conspiracy to smuggle Asian artifacts made from rhinoceros horns and ivory and violate wildlife trafficking laws, announced Robert G. Dreher, the Acting Assistant Attorney General for the Environment and Natural Resources Division of the Department of Justice, Preet Bharara, U.S. Attorney for the Southern District of New York, and Dan Ashe, Director of the U.S. Fish and Wildlife Service.
Wang was arrested in February 2013 as part of “Operation Crash,” a nation-wide crackdown in the illegal trafficking in rhinoceros horns, for his role in smuggling “libation cups” carved from rhinoceros horns from New York to China. Wang was sentenced today by U.S. District Judge Katherine B. Forrest of the Southern District of New York.
“Smuggling wildlife artifacts made from rhino horn and elephant ivory undermines the international conservation protections put in place to save these species from extinction ,” said Acting Assistant Attorney General Dreher. “This is an active and ongoing investigation that is designed to send a clear message to buyers and sellers that we will vigorousl y investigate and prosecute those who are involved in this devastating trade.”
“With his sentence today, Qiang Wang is held accountable for his role in feeding the flourishing black market for artifacts made from endangered species,” said U.S. Attorney Bharara. “This Office will continue its work to prosecute those who contribute to the illegal wildlife trade, and to uphold the rules designed to protect wildlife.”
“ We’re reaching a tipping point, where the unprecedented slaughter of rhinos and elephants happening now threatens the viability of these iconic species’ wild populations in Africa,” said U.S. Fish and Wildlife Service Director Dan Ashe. “This slaughter is fueled by illegal trade, including that exposed by Operation Crash. We will continue to work relentlessly across the United States government and with our international partners to crack down on poaching and wildlife trafficking.”
According to the information, plea agreement and statements made during court proceedings:
In China, there is a tradition dating back centuries of intricately carving rhinoceros horn cups. Drinking from such a cup was believed by some to bring good health, and antique carvings are highly prized by collectors. Libation cups and other ornamental carvings are particularly sought after in China and in other Asian countries, as well as in the United States. The escalating value of such items has resulted in an increased demand for rhinoceros horn that has helped fuel a thriving black market, including fake antiques made from more recently hunted rhinoceros.
In pleading guilty, Wang admitted to participating in a conspiracy to smuggle objects carved from rhinoceros horn and elephant ivory out of the United States knowing that it was illegal to export such items without required permits. Due to their dwindling populations, all rhinoceros and elephant species are protected under international trade agreements. Wang falsely labeled the packages in order to conceal the true contents and did not declare them as required. Special Agents with the U.S Fish & Wildlife Service executed a search of Wang’s apartment in Flushing, New York, and found documents showing Wang was involved in buying rhino horn and ivory artifacts and smuggling them to China. Agents seized two ivory carvings, including one found hidden behind Wang’s bed that were forfeited as part of the sentence. Numerous photographs of raw and carved rhinoceros horn, including approximately 10 different raw rhinoceros horns, were found on Wang’s computer and telephone consistent with a common practice of emailing or texting photographs of items for sale in order to receive instructions on whether to purchase the items and how much to pay. According to prosecutors, Wang had told other dealers that he was seeking raw rhino horns to send to China.
In sentencing Wang , Judge Forrest said that his behavior helped “create and sustain a marketplace for goods made from endangered wildlife.” Judge Forrest also said that Wang’s conduct was “illegal and extremely troubling.”
In addition to the prison term, Judge Forrest ordered Wang, 34, of Flushing, N.Y., to forfeit certain ivory goods in his possession, and banned him from all future trade in elephant ivory and rhino horn. Wang was also sentenced to serve a term of three years of supervised release.
Rhinoceros are an herbivore species of prehistoric origin and one of the largest remaining mega-fauna on earth. They have no known predators other than humans. All species of rhinoceros are protected under United States and international law. Since 1976, trade in rhinoceros horn has been regulated under the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES), a treaty signed by over 170 countries around the world to protect fish, wildlife and plants that are or may become imperiled due to the demands of international markets.
Operation Crash is a continuing investigation being conducted by the Department of the Interior’s Fish and Wildlife Service (FWS), in coordination with other federal and local law enforcement agencies including U.S. Immigration and Customs Enforcement’s Homeland Security Investigations. A “crash” is the term for a herd of rhinoceros. Operation Crash is an ongoing effort to detect, deter and prosecute those engaged in the illegal killing of rhinoceros and the unlawful trafficking of rhinoceros horns.
The investigation by was handled by the U.S. Fish & Wildlife Service, U.S. Attorney’s Office Complex Frauds Unit and the Justice Department’s Environmental Crimes Section, with assistance from the New York State Department of Environmental Conservation . Assistant U.S. Attorney Janis M. Echenberg and Senior Counsel Richard A. Udell of the Justice Department’s Environmental Crimes Section are in charge of the prosecution.
Government Files Suit Against Canton, Ohio-based Tab Construction and Its Owner for Allegedly Defrauding the Historically Underutilized Business Zone ProgramRead the Press Release
The government has filed a complaint against Canton, Ohio-based TAB Construction Co. Inc. (TAB) and its owner, William E. Richardson III, for allegedly making false statements to the Small Business Administration (SBA) to obtain certification as a Historically Underutilized Business Zone (HUBZone) company, the Justice Department announced today.
“The HUBZone program is intended to create jobs in areas that historically have had trouble attracting business,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery. “The Justice Department will take strong enforcement action when companies obtain contracts to which they are not entitled.”
The government alleges that TAB used its fraudulently procured HUBZone certification to obtain four U.S. Army Corps of Engineers’ construction contracts worth millions of dollars. Each of those contracts had been set aside for qualified HUBZone companies. The government’s complaint asserts claims against TAB and Richardson under the False Claims Act and the Financial Institutions Reform, Recovery and Enforcement Act of 1989.
Allegedly, Richardson originally applied to the HUBZone program in 2000 by claiming that TAB’s principal office was located in a designated HUBZone when no TAB employees worked out of the HUBZone office, and TAB actually was located in a non-HUBZone. Even though Richardson told the SBA that TAB was located in a HUBZone, Richardson consistently used his non-HUBZone address in conducting TAB’s other business affairs, at one point even stating under oath in private litigation that TAB’s office was located in a non-HUBZone. In 2006, Richardson allegedly applied for re-certification to the HUBZone program, again falsely stating that eight employees worked in the designated HUBZone. The government alleges that just six weeks after Richardson re-certified its eligibility with the SBA, TAB completed an affidavit in an unrelated matter, which stated that TAB’s principal office was located in a non-HUBZone.
Under the HUBZone program, companies that maintain their principal office in a designated HUBZone, and meet certain other requirements, can apply to the SBA for certification as a HUBZone small business company. HUBZone companies can then use this certification when bidding on government contracts. In certain cases, government agencies will restrict competition for a contract to HUBZone-certified companies.
“We will not tolerate fraud in the HUBZone or any other SBA program,” said SBA Inspector General Peggy E. Gustafson. “With our interagency partners, this office will continue to pursue those who defraud the government by lying to gain access to federal set-aside contracts.”
“SBA’s contracting programs, including the HUBZone program, provide small businesses with the opportunity to grow and create jobs,” said SBA General Counsel Sara D. Lipscomb. “SBA has no tolerance for waste, fraud or abuse in any government contracting program and is committed to working with our federal partners to ensure the benefits of these programs flow to the intended recipients.”
The government filed its complaint in two consolidated lawsuits filed under the qui tam, or whistleblower, provisions of the False Claims Act. Under the Act, a private citizen can sue on behalf of the government and share in any recovery. The government also is entitled to intervene in the lawsuit, as it has done in this case.
This matter was handled by the Commercial Litigation Branch of the Justice Department’s Civil Division in conjunction with the Small Business Administration’s Office of Inspector General and Office of General Counsel and the Defense Criminal Investigative Service.
The consolidated civil cases are U.S. ex rel. Roy. J. Fairbrother Jr. and Louis Petit v. TAB Construction Co. Inc., et al., No. 5:11-cv-1432 (N.D. Ohio) and U.S. ex rel. Patricia Hopson and Vince Pavkov v. TAB Construction Co. Inc., No. 5:12-cv-135 (N.D. Ohio). The claims asserted against TAB and Richardson are allegations only, and there has been no determination of liability.
California Businessman Sentenced to Prison for Conspiring to Defraud the IRSRead the Press Release
Gary Mach, of Palm Desert, Calif., was sentenced to 16 months in prison, two months of house arrest, and 18 months of probation and ordered to pay $270,725 in restitution to the Internal Revenue Service (IRS), the Justice Department and IRS announced today. Mach previously pleaded guilty to conspiracy to defraud the United States on Aug. 18, 2013.
Court documents state that, beginning around January 2002 and continuing through December 2010, Mach failed to report substantial income he earned from CSPS, a pool-servicing business operated throughout Riverside County. Mach and others established fictitious trusts which they used to receive income and hold assets in an attempt to conceal the assets and income from the IRS.
According to court documents, Mach purported to operate a trust called “Quintessential,” and directed that his paychecks be made payable to Quintessential. He also opened a bank account in the name of Quintessential where he deposited CSPS proceeds. Mach admitted that he did not report to the IRS any of the income he earned from CSPS between 2002 and 2010, and used Quintessential to conceal income from the IRS. In furtherance of the conspiracy, Mach also attempted to impede an IRS summons issued to a bank for business account records. Mach closed his bank account after the bank complied with the IRS summons. As set forth in the plea agreement, Mach admitted that his total unreported income for the tax years 2002 through 2010 was $1,410,430, upon which the total tax due and owed to the IRS is $270,275.
Assistant Attorney General Kathryn Keneally of the department’s Tax Division, commended the investigative efforts of the special agents of IRS-Criminal Investigation, who investigated the case, Tax Division Trial Attorneys Sonia M. Owens and Mark L. Williams, who prosecuted the case, and Assistant U.S. Attorneys Sandra R. Brown and Paul Rochmes of the U.S. Attorney’s Office for the Central District of California, who assisted in the prosecution.
20 Detroit-area Residents Charged in Medicare Fraud Strike Force Takedown for Approximately $34 Million in False BillingRead the Press Release
Twenty Detroit-area residents have been charged for their roles in physician home visit, home health care, chiropractic and psychotherapy schemes to submit more than $34 million in false billing to Medicare.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney for the Eastern District of Michigan Barbara L. McQuade, Special Agent in Charge Paul M. Abbate of the FBI’s Detroit Field Office and Special Agent in Charge Lamont Pugh III of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) Chicago Regional Office made the announcement.
“Medicare fraud hits every taxpayer and harms so many who are in need of critical health care,” said Acting Assistant Attorney General Raman. “The defendants arrested yesterday and today include doctors, physical therapists and home health care agency owners who were entrusted by Medicare to provide their patients with necessary care and services. Instead, they abused that trust for their own profit. The Strike Force’s operation reflects our continuing and unflagging commitment to put an end to these harmful fraud schemes.”
“Doctors and clinic owners should take note that we are scrutinizing billing data to detect fraud and bring offenders to justice,” said U.S. Attorney McQuade. “We are committed to recovering tax dollars intended for patient care.”
“These charges clearly send the message to criminals that committing fraud against government health care programs puts them squarely in the sights of the Medicare Fraud Strike Force,” said HHS-OIG Special Agent in Charge Pugh. “Taxpayers and patients should know that OIG with its Strike Force partners will continue to root out, expose, and hold accountable those who attack the Medicare program.”
“When medical doctors, physical therapists, and other health care providers conspire to defraud our government health care programs and undermine the public trust, they not only betray their profession, but also steal directly from the American people,” said FBI Special Agent in Charge Abbate. “The FBI and our law enforcement partners in the Medicare Fraud Strike Force will continue our efforts on behalf of the American taxpayer to prevent health care fraud and bring these criminal perpetrators to justice.”
Court documents unsealed this week in the Eastern District of Michigan charge defendants including physicians, owners and operators of companies, office employees and patient recruiters with submitting fraudulent claims for services that were never rendered and with paying kickbacks to obtain patients to be billed. Nineteen of the defendants were arrested or surrendered to authorities yesterday morning and this morning, and one defendant remains at large. In addition, law enforcement agents yesterday and today executed search warrants at nine locations and seizure warrants of 14 bank accounts related to the alleged fraud schemes.
The following charges were unsealed:
United States v. Goldfein, et al.
Two individuals, both medical doctors, were charged in an indictment with conspiring to commit health care fraud for their roles in a $5.4 million scheme to defraud Medicare by submitting fraudulent claims for physician home services that were not provided. The indictment alleges that the fraudulent claims were submitted by a physician clinic that provides both in-home and outpatient health care services. The clinic, with locations in Livonia, Mich., and Swartz Creek, Mich., is known as Tri City Medical Centers P.C.
The defendants charged in the indictment are Aaron Scott Goldfein, 49, of Bloomfield Hills, Mich., and William Clay Sokoll, 58, of Royal Oak, Mich.United States v. Elhorr, et al.
Three individuals, one of whom is a medical doctor and one of whom is a nurse, were charged in a superseding indictment with conspiracy to commit health care fraud for their roles in an $11.5 million scheme to defraud Medicare by submitting fraudulent claims for physician home services that were not provided. The superseding indictment alleges that the fraudulent claims were submitted by a home visiting physician practice. The practice, located in Allen Park, Mich., was known as House Calls Physicians P.L.L.C.
The defendants charged in the superseding indictment are Ali Elhorr, 44, of Dearborn, Mich.; Lama Elhorr, 31, of Hollywood, Fla. (formerly of Dearborn, Mich.); and Kelly White, 44, of Dearborn, Mich.United States v. Khan, et al.
Ten individuals were charged in an indictment with conspiracy to commit health care fraud or conspiracy to pay and receive illegal kickbacks for their roles in a $7 million scheme to defraud Medicare. The defendants include two medical doctors and three owners of home health care agencies, one of whom is also a physical therapist, as well as patient recruiters and office staff. The indictment alleges that the defendants caused the submission of fraudulent claims to Medicare for medically unnecessary home health care services and paid kickbacks in the form of cash payments and prescription narcotics to Medicare beneficiaries for the use of their Medicare beneficiary numbers. The indictment also alleges that physicians received kickbacks in the form of cash payments to certify Medicare beneficiaries for medically unnecessary home health care services. The fraudulent claims were submitted by two home health care agencies, Advance Home Health Care Services Inc. and Perfect Home Health Care Services LLP.
The defendants charged in the indictment are Walayat Khan, 65, of Ypsilanti, Mich.; Adelina Herrero, 72, of Ann Arbor, Mich.; Amer Ehsan, 44, of Canton, Mich.; Haroon Ur Rashid, 47, of West Bloomfield, Mich.; Mohammad Rafiq, 47, of West Bloomfield, Mich.; Salman Ali Sapru, 51, of Ypsilanti, Mich.; Farhan Khan, 25, of Ann Arbor, Mich.; James Zadorski, 48, of Detroit, Mich.; Cynthia Bell, 55, of Detroit, Mich.; and John Sanders, 59, of Pontiac, Mich.United States v. Hassan, et al.
Two individuals were charged in an indictment with conspiracy to commit health care fraud and conspiracy to pay and receive illegal kickbacks for their roles in a $4.5 million scheme to defraud Medicare. The indictment alleges that the defendants, the owner of a home health care agency who is also a physical therapist and a recruiter, caused the submission of fraudulent claims to Medicare for medically unnecessary home health care services and paid kickbacks in the form of cash payments to Medicare beneficiaries for the use of their Medicare beneficiary numbers. The indictment also alleges that physicians received kickbacks in the form of cash payments to certify Medicare beneficiaries for medically unnecessary home health care services. The fraudulent claims were submitted by Cherish Home Health Services LLC.
The defendants charged in the indictment are Zia Hassan, 47, of Saline, Mich., and Nathaniel Miller, 52, of Detroit, Mich.United States v. Minhas
Naseem Minhas, 47, of West Bloomfield, Mich., was charged with conspiracy to commit health care fraud and conspiracy to pay and receive illegal kickbacks for his role in a $5.7 million scheme to defraud Medicare. The indictment alleges that the defendant, the beneficial owner of a home health care agency, caused the submission of fraudulent claims to Medicare for medically unnecessary home health care services and paid kickbacks in the form of cash payments to marketers to recruit Medicare beneficiaries and to certify Medicare beneficiaries for medically unnecessary home health care services. The indictment alleges that the fraudulent claims were submitted by Tricounty Home Care Services Inc.United States v. Lovett, et al.
The owners of a Detroit-area billing company were charged in a criminal complaint for their roles in a health care fraud scheme involving claims for chiropractic and psychotherapy services. The complaint alleges that the operators of ABIX LLC obtained the Medicare numbers of licensed medical service providers in and around Detroit and used this information to bill Medicare for chiropractic and psychotherapy services that were not provided.
The defendants charged in the criminal complaint are Elaine Lovett, 58, of Wayne County, Mich., and Michelle Freeman, 54, of Livingston County, Mich.
An indictment or criminal complaint is merely an allegation, and the defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
The Medicare Fraud Strike Force operations are part of the Health Care Fraud Prevention & Enforcement Action Team (HEAT), a joint initiative announced in May 2009 between the Department of Justice and the Department of Health and Human Services to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country.
These cases were investigated by the FBI and HHS-OIG and were 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. These cases are being prosecuted by Trial Attorney William G. Kanellis, Trial Attorney Matthew C. Thuesen, and Special Trial Attorney Katie R. Fink 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 .Miami Home Health Company Owner and Recruiter<br /> Sentenced for Role in $48 Million Health Care Fraud SchemeRead the Press Release
A patient recruiter of a Miami health care company was sentenced to serve 108 months in prison today for his participation in a $48 million home health 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.
Emilio Amador, 46, was sentenced by U.S. District Judge Federico A. Moreno in the Southern District of Florida. In addition to his prison term, Amador was sentenced to serve three years of supervised release and ordered to pay $24 million in restitution, jointly and severally with co-defendants.
In September 2013, Amador pleaded guilty before Judge Moreno to one count of conspiring to receive health care kickbacks and two counts of receiving health care kickbacks.
According to court documents, Amador was a patient recruiter who worked for Caring Nurse Home Health Care Corp., a Miami home health care agency that purported to provide home health and therapy services to Medicare beneficiaries.
From approximately January 2006 through June 2011, Amador would recruit patients for Caring Nurse, and in doing so would solicit and receive kickbacks and bribes from the owners and operators of Caring Nurse in return for allowing Caring Nurse to bill the Medicare program on behalf of the patients Amador had recruited. These Medicare beneficiaries were billed for home health care and therapy services that were medically unnecessary and/or not provided.
According to court documents, Amador also pleaded guilty to his involvement with fraudulent billings for Nation’s Best Care Home Health Corp. as relevant conduct. Amador was the owner, operator and president of Nation’s Best. The fraudulent billings for Nation’s Best totaled approximately $30 million.
In a related case, on Feb. 27, 2013, Rogelio Rodriguez, 44, and Raymond Aday, 49, the owners and operators of Caring Nurse and Good Quality, were sentenced to serve 108 and 51 months in prison, respectively. The sentencings followed their December 2012 guilty pleas to one count each of conspiracy to commit health care fraud charged in an October 2012 indictment, which alleged that from approximately January 2006 through June 2011, Caring Nurse and Good Quality submitted approximately $48 million in claims for home health services that were not medically necessary and/or not provided. Medicare paid approximately $33 million for those fraudulent claims.
The case was investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida. This case is being prosecuted by Assistant Chief Joseph S. Beemsterboer of the Criminal Division’s Fraud Section.
Since their inception in March 2007, Medicare Fraud Strike Force operations in nine locations have charged more than 1,700 defendants who collectively have falsely 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 Action Team (HEAT), go to: www.stopmedicarefraud.gov .
Justice Department Sues to Stop Somerville, N.J., Man from Preparing Tax ReturnsRead the Press Release
The United States filed a lawsuit yesterday in The District of New Jersey to bar Eric Majette of Somerville, N.J., from preparing federal tax returns, the Justice Department announced today. As alleged in the complaint, Majette owned and operated a tax preparation business named “Berrisford Group” with offices in Plainfield and Somerville.
According to the complaint, from 2006 until 2011, Majette prepared and filed tax returns that contained false or inflated itemized deductions for items such as medical and dental expenses, gifts, and business expenses that resulted in his customers receiving larger tax refunds than they were entitled. The complaint further alleges that Majette encouraged his customers to submit false documents, such as fraudulent charitable contribution receipts, to the Internal Revenue Service (IRS).
Earlier this year, Majette pleaded guilty to corruptly endeavoring to obstruct and impede the internal revenue laws and to preparing a false tax return. He was sentenced to serve 30 months in prison and one year of supervised probation upon release, and ordered to pay $123,440 in restitution. The civil complaint filed yesterday alleges that between 2009 and 2012, Majette prepared 1,853 tax returns for customers and 93 percent of these returns claimed tax refunds. According the complaint, the IRS examined 428 of these returns and determined that they understated the customers’ correct tax liability by a total of $838,837, an average of $1,960 per return. The complaint estimates that the total harm caused by the 1,723 tax refunds claiming returns could be as much as $3 million.
Return preparer fraud is one of the IRS’ Dirty Dozen Tax Scams for 2013 which can be viewed at www.irs.gov/uac/Newsroom/IRS-Releases-the-Dirty-Dozen-Tax-Scams-for-2013 . The IRS has some tips for choosing a tax preparer: www.irs.gov/Tax-Professionals/Choosing-a-Tax-Professional. In the past decade, the department’s Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers. Information about these cases is available on the Justice Department website at www.justice.gov/tax/taxpress2013.htm.
Related Materials:
United States v. Eric Majette
ComplaintFormer Medical Doctor Sentenced to 20 Years in Prison<br /> for Engaging in Illicit Sexual Conduct with Minors in KenyaRead the Press Release
A former medical doctor was sentenced today to serve 20 years in prison for engaging in illicit sexual conduct with minors in Kenya.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney for the District of Columbia Ronald C. Machen Jr., and Assistant Director in Charge Valerie Parlave of the FBI’s Washington Field Office made the announcement.
John D. Ott, 68, pleaded guilty in May 2013 before the Honorable Reggie B. Walton in the U.S. District Court for the District of Columbia to one count of engaging in illicit sexual conduct in a foreign place. Upon completion of his prison term, Ott will be placed on supervised release for the rest of his life. In addition, he will be required to register as a sex offender for the rest of his life.
According to court documents and proceedings, Ott was a former medical doctor who worked for non-governmental organizations and hospitals in Kenya. Court records show that Ott also started an orphanage in Kenya. Ott admitted that between approximately January 2004 and September 2012, he engaged in illicit sexual conduct in Muhuru Bay, Sori and Kendu Bay, Kenya, with at least 14 minors, who ranged in age from approximately nine to 17 years old when the illicit sexual conduct began. Ott admitted that he frequently paid for schooling and provided other financial support, including housing, for minors with whom he engaged in illicit conduct.
Ott has been in federal custody since he was arrested in December 2012, following his deportation from Tanzania.
The investigation was conducted by the FBI’s Washington Field Office. Significant assistance was provided by the Criminal Division’s Office of International Affairs as well as by personnel at the U.S. Embassy in Dar es Salaam, Tanzania, and the U.S. Customs and Border Protection National Targeting Center.
The case was prosecuted by Trial Attorney Keith A. Becker of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS) and Assistant U.S. Attorney Ari Redbord of the District of Columbia.
This case was brought as part of Project Safe Childhood, a nationwide initiative, launched in May 2006 by the Department of Justice, to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorney’s Offices and CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.Federal Agents Arrest Operators of Loan Modification Scam That Targeted Struggling HomeownersRead the Press Release
Federal agents arrested yesterday Bryan D’Antonio, 47, of Brea, Calif., and Charles Wayne Farris, 53, of Aliso Viejo, Calif., for operating the Rodis Law Group and America’s Law Group, businesses that allegedly offered bogus loan modification assistance to struggling homeowners. Attorney Ronald Rodis, 49, of Irvine, Calif., surrendered today to federal agents on charges alleging that he participated in, and lent his name and the law license he formerly possessed to, the fraudulent operation. All three defendants were named in a federal indictment unsealed yesterday following an investigation by the FBI and IRS-Criminal Investigation.According to the indictment, as a result of the scheme run by D’Antonio, Farris and Rodis, more than 1,800 financially distressed homeowners lost a total of at least $12 million in fees they paid to the companies. Many homeowners also lost their homes to foreclosure. During a nine month period that began in October 2008, the Rodis Law Group and America’s Law Group allegedly defrauded distressed homeowners by making false promises and guarantees regarding the companies’ ability to negotiate loan modifications from the homeowners’ mortgage lenders, falsely representing that a “team of attorneys” would represent the homeowners and advising homeowners to cease making their mortgage payments.
“These arrests send a strong message to those who would prey on vulnerable homeowners during these tough financial times,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery. “If you defraud homeowners, you will be found and brought to justice.”
The Rodis Law Group, and its successor company, America’s Law Group, allegedly advertised loan modification assistance on radio stations nationwide. According to the indictment, many of these radio advertisements featured Rodis’ voice telling homeowners that a “team of experienced attorneys,” who were “highly skilled in negotiating lower interest rates and even lowering your principal balance,” would negotiate with mortgage lenders. Sales staff hired and trained by Farris and D’Antonio allegedly told interested homeowners that Rodis Law Group was “100% successful,” “routinely lowered monthly payments” and obtained reduced principal balances. According to the indictment, once the defendants and their co-conspirators convinced homeowners to pay a fee of several thousand dollars, little to no effort was made to obtain loan modifications. After making their payments, homeowners who tried to get updates on the status of their cases were often unable to contact anyone at either company.
The indictment further alleges that D’Antonio committed these crimes after having been convicted of mail and wire fraud for his role in a previous telemarketing scheme. The previous scheme resulted in a civil case by the Federal Trade Commission and ultimately a court order, entered in 2001, which permanently banned D’Antonio from participating in future telemarketing operations. The indictment in this case alleges that D’Antonio committed criminal contempt of court by directing the telemarketing activities of Rodis Law Group and America’s Law Group and by misrepresenting the services they provided.
“Posing as successful lawyers, these defendants offered struggling homeowners false hopes and bogus promises of quality legal representation,” said U.S. Attorney for the Central District of California André Birotte Jr. “The market offering loan modifications is rife with fraud, which is why we have redoubled our efforts to investigate and prosecute those who engage in financial crimes that target distressed homeowners.”“The unconscionable act of scamming homeowners already facing foreclosure is far too common,” said Assistant Director in Charge of the FBI’s Los Angeles Field Office Bill Lewis. “This indictment should send a clear message to anyone contemplating similar crimes, and should also remind potential victims to be cautious before paying fees to those offering financial rescue, regardless of whether the solicitor holds a law degree.”
D’Antonio, Farris and Rodis are each charged with 10 felony counts – nine counts of wire fraud and one count of conspiracy. Each of these counts carries a statutory maximum penalty of 20 years’ imprisonment. In addition, D’Antonio is charged with 13 counts of criminal contempt for violating the 2001 court order. Criminal contempt of court has no statutory maximum penalty.
This indictment was brought in coordination with the President’s Financial Fraud Enforcement Task Force’s Mortgage Fraud Working Group. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.StopFraud.govAn indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty in court.
United States Agrees to Comprehensive Settlement with Suffolk County Police Department to Resolve Investigation of Discriminatory Policing Against LatinosRead the Press Release
The Civil Rights Division of the U.S. Department of Justice and the U.S. Attorney’s Office for the Eastern District of New York announced today that they have tentatively agreed to a settlement with the Suffolk County Police Department (SCPD) which calls for SCPD to implement new and enhanced policies and procedures to ensure nondiscrimination in the provision of police services to Latino communities in Suffolk County. The agreement, which the Department of Justice has agreed to, requires approval of the Suffolk County Legislature before it will be formally executed by the parties.
The United States commenced an investigation of SCPD in 2009 in the wake of the killing of Marcelo Lucero, an Ecuadorian national, who was murdered by a group of teenagers in Patchogue, N.Y., as he was walking home on the evening of Nov. 8, 2008. The United States’ investigation, pursuant to the Violent Crime and Law Enforcement Act of 1994 and the Omnibus Crime Control and Safe Streets Act of 1968, focused on discriminatory policing allegations, including claims that SCPD discouraged Latino victims from filing complaints and cooperating with the police, and failed to investigate crimes and hate crime incidents involving Latinos. The United States issued a Technical Assistance letter on Sept. 13, 2011, which recommended a wide range of reforms to improve policing by the SCPD, and primarily focused on promoting trust between SCPD and the Latino community. The County cooperated with the United States’ investigation, and has already instituted a number of the recommendations from the Technical Assistance letter. The agreement announced today memorializes those recommendations and commits SCPD to significant changes in how it engages the Latino community.
Specifically, the agreement calls for SCPD to ensure that it polices equitably, respectfully and free of unlawful bias. Other highlights include enhanced training and investigation of allegations of hate crimes and bias incidents, meaningful access to police services for individuals with limited English proficiency (LEP), strengthened SCPD outreach efforts in Latino communities, and the development and maintenance of a true Community Oriented Policing Enforcement (COPE) program throughout the county. The United States will monitor compliance with the agreement, which terminates only when SCPD has substantially complied with all of the requirements for at least one year.
“We look forward to working alongside the Suffolk County Police Department and Suffolk County to implement our agreement,” said Acting Assistant Attorney General Jocelyn Samuels for the Civil Rights Division. “By working together, our goal is for all Suffolk residents -- existing and future -- to know that SCPD is there to serve and protect them and that they stand equal with their neighbors before the law.”
“All residents of Suffolk County deserve full and unbiased police protection, regardless of national origin, race, or citizenship status,” said U.S. Attorney Loretta E. Lynch for the Eastern District of New York. “When people feel they cannot turn to the police for protection, they have lost one of our most basic rights – the right to feel safe in one’s community. Law enforcement also suffers when it does not hear from everyone under its umbrella of protection. I commend Suffolk County and SCPD for its cooperation with the United States’ investigation and its willingness to ensure fairness and equal treatment for all.”
The case was handled by Assistant U.S. Attorney Michael J. Goldberger, Chief of Civil Rights in the Civil Division of the U.S. Attorney’s Office; Special Litigation Counsel Laura Coon in the Special Litigation Section of the Civil Rights Division; and Trial Attorneys Silvia Dominguez and Jack Morse in the Special Litigation Section.
Two Foreign Nationals Plead Guilty in <br /> Puerto Rican Identity Trafficking ConspiracyRead the Press Release
A Dominican national and a Mexican national each pleaded guilty today in connection with their roles in trafficking the identities of Puerto Rican U.S. citizens and corresponding identity documents.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Rosa E. Rodríguez-Vélez of the District of Puerto Rico, Acting Director John Sandweg of U.S. Immigration and Customs Enforcement (ICE), Chief Postal Inspector Guy J. Cottrell of the U.S. Postal Inspection Service (USPIS), Director Gregory B. Starr of the U.S. State Department’s Diplomatic Security Service (DSS) and Chief Richard Weber of the Internal Revenue Service-Criminal Investigation (IRS-CI) made the announcement.
Jorge Luis “Daniel” Mendez, 37, formerly of San Juan, Puerto Rico, and Enrique Rogelio Mendez-Solis, 37, formerly of Seymour, Ind., pleaded guilty before U.S. District Judge Juan M. Pérez-Giménez in the District of Puerto Rico to one count of conspiracy to commit identification fraud, one count of conspiracy to commit alien smuggling for financial gain and three counts of aggravated identity theft. They face a maximum sentence of 15 years in prison for conspiracy to commit identification fraud, 10 years in prison for conspiracy to commit alien smuggling for financial gain, and two years in prison for each aggravated identity theft count when they are sentenced on April 28, 2014.
Both 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, 49 defendants have been arrested, and 49 have pleaded guilty.
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, Penn.; Houston; Abingdon and Albertville, Ala.; and Providence, R.I.
Mendez admitted that he operated as a Savarona supplier. Mendez-Solis admitted that he operated as an identity broker in the Seymour, Ind., area.
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 it 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 .Three Patient Recruiters for Miami Home Health Company<br /> Plead Guilty for Roles in $48 Million Fraud SchemeRead the Press Release
Three patient recruiters for a Miami health care company pleaded guilty today for their participation in a $48 million home health 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 residents Marianela Martinez, 45; Omar Hernandez, 48; and Celia Santovenia, 49, pleaded guilty before U.S. District Judge Donald L. Graham in the Southern District of Florida to one count each of conspiracy to receive health care kickbacks. Sentencing has been scheduled for Feb. 11, 2014.
According to court documents, Martinez, Hernandez and Santovenia were patient recruiters who worked for Caring Nurse Home Health Care Corp., and Santovenia also worked for Good Quality Home Health Care Inc. Caring Nurse and Good Quality were Miami home health care agencies that purported to provide home health and therapy services to Medicare beneficiaries.
From approximately January 2006 through June 2011, the defendants would recruit patients for Caring Nurse and/or Good Quality and would solicit and receive kickbacks and bribes from the owners and operators of Caring Nurse and/or Good Quality in return for allowing the agency to bill the Medicare program on behalf of the recruited patients. These Medicare beneficiaries were billed for home health care and therapy services that were medically unnecessary and/or not provided.
In a related case, on Feb. 27, 2013, Rogelio Rodriguez, 44, and Raymond Aday, 49, the owners and operators of Caring Nurse and Good Quality, were sentenced to serve 108 and 51 months in prison, respectively. The sentencings followed their December 2012 guilty pleas to one count each of conspiracy to commit health care fraud charged in an October 2012 indictment, which alleged that from approximately January 2006 through June 2011, Caring Nurse and Good Quality submitted approximately $48 million in claims for home health services that were not medically necessary and/or not provided. Medicare paid approximately $33 million for those fraudulent claims.
The case was investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, under supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida. This case is being prosecuted by Assistant Chief Joseph S. Beemsterboer of the Criminal Division’s Fraud Section.
Since their inception in March 2007, Medicare Fraud Strike Force operations in nine locations have charged more than 1,700 defendants who collectively have falsely 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 Action Team (HEAT), go to: www.stopmedicarefraud.gov .Massachusetts Man Pleads Guilty to Tax Fraud and Mail FraudRead the Press Release
Michael Edwards pleaded guilty today to one count of corruptly endeavoring to obstruct the Internal Revenue Service (IRS) and one count of mail fraud, t he Justice Department and IRS announced. Both charges arise from Edwards’ operation of his tax return preparation business Boston Financial Associates (BFA) and Edwards’ misappropriation of income tax refunds from two of his clients in 2009.
According to court documents, Edwards admitted that he misled an IRS auditor reviewing one of his client’s 2007 and 2008 income tax returns by giving her false documentation that claimed to support the false entries on the returns. Edwards misappropriated federal income tax refunds of $573,518 from one client and $202,143 from a second client.
Sentencing for Edwards has been scheduled for Feb. 25, 2014. The statutory maximum penalty for corruptly endeavoring to obstruct the IRS is three years in prison and a $250,000 fine. The statutory maximum penalty for mail fraud is 20 years in prison and a $250,000 fine.
This case was investigated by IRS – Criminal Investigation and prosecuted by Tax Division Senior Litigation Counsel Corey J. Smith.
Justice Department Files Lawsuit to Stop Tennessee Woman from Preparing Tax ReturnsRead the Press Release
The Department of Justice filed a civil lawsuit in a federal court in Memphis today to stop Stephanie Edmond and her businesses, the Tax Factory and Tax Factory Enterprise Inc., from preparing federal income tax returns. According to the complaint, Edmond and her businesses have prepared more than 9,000 tax returns since 2011.
The complaint filed with the U.S. District Court for the Western District of Tennessee alleges that Edmond understates her customers’ federal tax liabilities by creating fake businesses, then listing those phony businesses on returns and fabricating expenses for them. Edmond also improperly claims the earned income tax credit on the income tax returns that she prepares for her customers. In one case, according to the complaint, two returns prepared for a customer by The Tax Factory claimed bogus business losses of approximately $30,000 for each of the two years, and as a result, the customer improperly received tax refunds of approximately $7,000 both years. In total, the complaint alleges that Edmond’s activities over the last three years have cost the Treasury $9.7 million or more in lost income tax revenue.
Return preparer fraud is one of the Internal Revenue Service’s Dirty Dozen Tax Scams for 2013 which can be viewed at www.irs.gov/uac/Newsroom/IRS-Releases-the-Dirty-Dozen-Tax-Scams-for-2013. The Internal Revenue Service has some tips for choosing a tax preparer: http://www.irs.gov/Tax-Professionals/Choosing-a-Tax-Professional. In the past decade, the department’s Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers. Information about these cases is available on the Justice Department website at www.justice.g ov/tax/taxpress2013.htm.
Related Materials:
United States v. Stephanie Edmond
Complaint for Permanent InjunctionJustice Department Files Lawsuit Alleging Disability-Based Discrimination at Hartville, Ohio, Condominium ComplexRead the Press Release
The Justice Department filed a lawsuit late yesterday against the owners, builders and designers of a 54-unit condominium complex in Hartville, Ohio, for violations of the Fair Housing Act (FHA). The lawsuit alleges that the defendants violated the law when they designed and constructed the complex with barriers that make it inaccessible to persons with disabilities.
“Since 1991, the Fair Housing Act has required that when new multifamily housing is built, it be accessible to persons with disabilities,” said Acting Assistant Attorney General Jocelyn Samuels for the department’s Civil Rights Division. “When condominium complexes are built with steps and other barriers, those with disabilities are denied that equal housing opportunity.”
“We will continue to work to make sure people with disabilities are free to live where they choose, as is their legal right,” said U.S. Attorney Steven M. Dettelbach for the Northern District of Ohio.
The suit, filed in U.S. District Court in Cleveland alleges that various barriers at the Windham Bridge property in Hartville deny persons with disabilities equal access to 52 condominiums and the associated public and common-use areas at the property that are covered by the FHA. Such barriers include inaccessible building entrances; no accessible parking spaces; insufficient accessible routes into and through the units; and kitchens and bathrooms that are inaccessible to persons in wheelchairs.
The lawsuit arises from a complaint filed with the Department of Housing and Urban Development (HUD) by the Fair Housing Advocates Association (FHAA), a private nonprofit corporation whose mission is to provide education regarding fair housing laws and to ensure compliance with those laws in Ohio. FHAA inspected the Windham Bridge property and observed accessibility barriers. After conducting an investigation, HUD issued a charge of discrimination and referred the case to the Justice Department.
“The Fair Housing Act's accessibility requirements have been on the books for over two decades. So, today, when a person with a disability cannot enter the front door of a condominium complex, or find accessible parking there, it sends the message: 'You are not welcome here,'" said HUD's Acting Assistant Secretary Bryan Greene for Fair Housing and Equal Opportunity. “HUD and DOJ are committed to enforcing the nation’s fair housing laws to make certain persons with disabilities have the same access to multifamily housing as anyone else."
Named in the suit are the prior owners and builders of the property, Noble Homes Inc., Guardian Property Management Inc., Dean Windham, Hersh Construction Inc., and John Hershberger, as well as the designer of the property, Milton Studer, and his firm, Studer Architects LLC. The suit seeks a court order requiring the defendants to retrofit the Windham Bridge property to bring it into compliance with the FHA, as well as monetary damages for FHAA and for persons harmed by the lack of accessibility at the complex.
The federal FHA prohibits discrimination in housing based on race, color, religion, national origin, sex, familial status and disability. Among other things, the Act requires all multifamily housing constructed after March 12, 1991, to have basic accessibility features, including accessible routes without steps to all ground floor units. More information about the Civil Rights Division and the laws it enforces is available at www.usdoj.gov/crt . Individuals who believe that they may have been victims of housing discrimination can call the Housing Discrimination Tip Line at 1-800-896-7743, email the Justice Department at [email protected] , or contact HUD at 1-800-669-9777.
The complaint is an allegation of unlawful conduct. The allegations in the complaint must still be proven in federal court.
Federal Jury Returns Guilty Verdicts in Gambling and Money Laundering CaseRead the Press Release
United States Attorney ALICIA A.G. LIMTIACO, U.S. Attorney for the Districts of Guam and the Northern Mariana Islands (NMI), announced today that a federal jury in the District of Guam returned a verdict finding defendants William M. Perez and Jennie Wen Chin Pau guilty, as follows:
Defendant William M. Perez –
Count 1 – Conspiracy to Commit Illegal Gambling
Count 2 – Illegal Gambling Business
Counts 18-38 – Money LaunderingDefendant Jennie Wen Chin Pau -
Count 1 – Conspiracy to Commit Illegal Gambling
Count 2 – Illegal Gambling Business
Counts 18-35 – Money Laundering
Counts 40-44 - StructuringThe jury found the defendants not guilty as to money laundering charges in Counts 3-17. Defendants Perez and Pau will be sentenced by the Hon. Frances Tydingco-Gatewood, Chief Judge, on March 28, 2014 at 10:00 A.M.
Two co-defendants, Jimmy Hsieh and Pauline Perez, pleaded guilty before trial and are awaiting sentencing. Co-defendant Wai Kam Ho remains charged, with a trial anticipated in early 2014.
The evidence at trial showed that from at least January 2006 until December 14, 2010, defendants Perez and Pau conspired with other individuals to conduct an illegal gambling business in a manner which violated the laws of the Territory of Guam. The defendants offered card games of chance, including baccarat and poker, at the MGM Spa building approximately five times a week. The games violated Guam law in that the defendants, as the “house,” took a percentage of the winnings from each poker game, and also charged $5 per $100 of bets for food and drink.
The evidence at trial also showed that defendants Perez and Pau committed money laundering by knowingly conducting financial transactions affecting interstate commerce, which transactions involved the proceeds of a specified unlawful activity, namely conducting an illegal gambling business.
The evidence at trial further showed that defendant Pau knowingly and for the purpose of evading reporting requirements, structured transactions with domestic financial institutions, in violation of federal law.
U. S. Attorney Limtiaco stated, “The defendants participated in illegal gambling and laundered illegal gambling proceeds. The convictions demonstrate the commitment of the U.S. Attorney’s Office, Department of Justice, to hold accountable those involved in facilitating illegal gambling businesses.” U.S. Attorney Limtiaco further stated, “This case involved the collaborative investigative efforts, skills and resources of the Internal Revenue Service Criminal Investigations Unit (IRS-CI), the Federal Bureau of Investigations (FBI) and the Naval Criminal Investigative Service (NCIS). We thank our law enforcement agencies for their diligent work in the investigation and prosecution of this illegal gambling operation. ”
The Conspiracy, Illegal Gambling, and Structuring counts each carries a maximum prison term of five years. Each count of Money Laundering carries a maximum prison term of 20
years.This case was investigated by Special Agents from the Internal Revenue Service Criminal Investigations Unit (IRS-CI), the Federal Bureau of Investigations (FBI) and the Naval Criminal Investigative Service (NCIS). Assistant United States Attorney Karon V. Johnson prosecuted the case.
Health Care Clinic Owners Sentenced for Role in <br /> $8 Million Health Care Fraud SchemeRead the Press Release
Two health care clinic owners were sentenced today in connection with an $8 million health care fraud scheme involving the now-defunct home health care company Flores Home Health Care Inc.
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.
Miguel Jimenez, 43, and Marina Sanchez Pajon, 29, both of Miami, were sentenced by U.S. District Judge Ursula Ungaro in the Southern District of Florida. Jimenez was sentenced to serve 87 months in prison and Pajon was sentenced to serve 57 months in prison. Jimenez and Pajon pleaded guilty in August to conspiracy to commit health care fraud.
Jimenez and Pajon, who are married, were owners and operators of Flores Home Health, a Miami home health care agency that purported to provide home health and physical therapy services to Medicare beneficiaries.
According to court documents, Jimenez and Pajon operated Flores Home Health for the purpose of billing Medicare for, among other things, expensive physical therapy and home health care services that were not medically necessary and/or not provided. Jimenez’s primary role at Flores Home Health involved controlling the company and running and overseeing the schemes conducted through Flores Home Health. Both Jimenez and Pajon were responsible for negotiating and paying kickbacks and bribes, interacting with patient recruiters, and coordinating and overseeing the submission of fraudulent claims to the Medicare program.
Jimenez, Pajon, and their co-conspirators paid kickbacks and bribes to patient recruiters in return for the recruiters providing patients to Flores Home Health for home health and therapy services that were medically unnecessary and/or not provided. They also paid kickbacks and bribes to co-conspirators in doctors’ offices and clinics in exchange for home health and therapy prescriptions, medical certifications, and other documentation. Jimenez, Pajon, and their co-conspirators used the prescriptions, medical certifications, and other documentation to fraudulently bill Medicare for home health care services, which Jimenez and Pajon knew was in violation of federal criminal laws.
From approximately October 2009 through approximately June 2012, Flores Home Health was paid approximately $8 million by Medicare for fraudulent claims for home health services that were not medically necessary and/or not provided.
The case was investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida. This case was prosecuted by Trial Attorney A. Brendan Stewart of the Criminal Division’s Fraud Section.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,700 defendants who have collectively billed the Medicare program for more than $5.5 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov .