District Not Recorded

The Department of Justice today announced that it will require Heraeus Electro-Nite LLC to divest certain assets that it acquired from Midwest Instrument Company Inc. (Minco) to Keystone Sensors LLC in order to resolve the department’s competitive concerns.  The department said that, without the divestiture, Heraeus’ acquisition of Minco’s assets substantially lessens competition in the market for the development, production, sale and service of single-use sensors and instruments used to measure and monitor the temperature and chemical composition of molten steel in the steel manufacturing process. 

 
The department’s Antitrust Division filed a civil antitrust lawsuit today in the U.S. District Court for the District of Columbia challenging the consummated acquisition.  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. 

 
Heraeus acquired Minco in September 2012.  The department learned of the transaction, which was not required to be reported under the premerger notification law, shortly after it was completed.  According to the complaint, prior to the acquisition, Heraeus and Minco competed head-to-head on price, service and innovation in supplying sensors and instruments to steel manufacturers, for whom the reliability and precise performance of these products is of critical importance.

“The proposed settlement will benefit consumers in the single-use sensors and instruments market by facilitating the entry of a new competitor into this market,” said Deputy Assistant Attorney General Renata B. Hesse of the Department of Justice’s Antitrust Division.  “Today’s enforcement action shows that the department is committed to redressing anticompetitive mergers, including consummated mergers for which reporting is not required under the premerger notification law.” 

 
The department required the divestiture of a package of assets to an identified purchaser, Keystone, that had been evaluated and approved by the department.  The department said the proposed settlement will ensure that the assets Keystone requires in order to enter the U.S. market and compete more effectively with Heraeus are readily available to it.  In this way, the divestiture to Keystone will promote competition in the sensors and instruments market, which was reduced when Heraeus acquired Minco.  Keystone was formed in May 2013 for the purpose of entering the U.S. market for sensors and instruments and to offer customers an additional alternative to Heraeus. 

 
The proposed settlement also requires Heraeus to waive noncompete provisions it had imposed on some former employees.  The waiver of these provisions will enable Keystone to hire experienced individuals with expertise in this specialized business.  By making experienced individuals available to be hired immediately, Heraeus’ agreement to waive these noncompete provisions will also enhance competition in the single-use sensors and instruments market by facilitating the entry or expansion of other new competitors into the market.  Heraeus also is required to provide the department with advance notice of any future acquisition in the market for sensors and instruments in the United States that is not subject to the reporting requirements of the premerger notification law.   

 
Heraeus Electro-Nite Co. LLC is a Delaware corporation with its headquarters in Langhorne, Pa. 

 
The acquirer, Keystone Sensors LLC, is a Delaware corporation headquartered in Cranberry Township, Pa.  Its principal place of business will be located in Johnson City, Tenn.

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 Maribeth Petrizzi, Chief, Litigation II Section, 450 Fifth Street, N.W., Suite 8700, Washington, D.C. 20530.  At the conclusion of the 60-day comment period, the court may enter the proposed settlement upon finding that it is in the public interest.

United States Attorney ALICIA A.G. LIMTIACO, U.S. Attorney for the Districts of Guam and the Northern Mariana Islands, was the guest speaker on October 12, 2013 at the Inauguration and Swearing-in Ceremony of the “We Are You” (WAY) Officers of John F. Kennedy High School.

U.S. Attorney Limtiaco congratulated the newly admitted officers and acknowledged their families and friends who continue to support them as they pursue their educational, professional and personal aspirations and, as they embark on their journey as WAY officers to represent and serve their fellow students, and collaborate with the administration, faculty and Parent Teacher School Association of John F. Kennedy High School.

U.S. Attorney Limtiaco encouraged the students to realize that “there is a larger value to learn about the world we live in – that it is a world full of different cultures, customs, economies, political and legal systems.  And, most of all, a world of different, unique people all trying to carve out their own independent lives in their own unique societies.  How people interact and relate to each other matters.”

She shared, “Each one of you is embarking on your next journey as a leader and representative of your fellow students – to serve and engage your fellow students in the dialogue of issues that affect and have an impact – on each one of you as students, on your school, on your community, on humanity and on the world.”  She quoted President John F. Kennedy, “Leadership and learning are indispensable to each other.”  “Change is the law of life and those who look only to the past or the present are certain to miss the future.”

U.S. Attorney Limtiaco encouraged the WAY officers to “represent, serve and lead their follow students with integrity, dignity, and respect.  Stay grounded – listen and learn from those you represent – your fellow students; and from each other.  Ask yourselves what you and WAY can do to make a positive impact – to make a positive change – in the lives of your fellow students, our community and the world; that will be your legacy and make a difference for future generations of students at John F. Kennedy High School and our island.”

            Photo of U.S. Attorney Alicia Limtiaco, together with one of the newly admitted officers, Pim Limtiaco is attached.

St. James Healthcare (St. James), a hospital located in Butte, Mont., and its parent company, Sisters of Charity of Leavenworth Health System (Sisters of Charity), a health care organization based in Denver, Colo., have agreed to pay $3.85 million to resolve allegations that they violated the Anti-Kickback Statute, the Stark Law and the False Claims Act by improperly providing financial benefits to physicians and physician groups that made referrals to the hospital, the Justice Department announced today.

The Anti-Kickback Statute prohibits the provision of remuneration with the intent to induce referrals of government health care program business.  The Stark Law restricts financial relationships that hospitals may enter into with physicians who refer patients to them.  Federal law prohibits payment by federal health care programs of medical claims that result from arrangements that violate the Anti-Kickback Statute or the Stark Law.

 
“Improper financial arrangements between hospitals and physicians not only undermine the integrity of the decisions that doctors make, they raise the cost of health care for all of us,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery.  “The department has longstanding concerns about such conduct and is committed to working with health care providers that come forward to disclose their misconduct.”

The settlement announced today resolves allegations that St. James and Sisters of Charity provided various improper financial incentives to physicians and physician groups that were involved in a joint venture with St. James to own and operate a medical office building on the St. James campus.  These incentives included a payment to the joint venture that increased the share values for the physicians and physician groups in the joint venture and resulted in below fair market value lease rates for the physicians renting space in the medical office building.  Additional incentives provided by St. James and Sisters of Charity included below fair market value lease rates for the land upon which the medical office building was constructed and other below fair market value arrangements related to shared facilities, use and maintenance.  These issues were disclosed by St. James and Sisters of Charity to the government.

“This matter is of great significance to Montanans because it helps ensure federal health care programs deliver services in a cost-effective and efficient manner,” said U.S. Attorney for the District of Montana Michael W. Cotter.  “We are encouraged that hospitals like St. James Healthcare are taking these issues seriously by reviewing their operations and making disclosures to the government where necessary.”

This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by Attorney General Eric Holder and Health and Human Services Secretary Kathleen Sebelius.  The partnership between the two departments has focused on 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.

This case was handled by the U.S. Attorney’s Office for the District of Montana, the Department of Justice Civil Division, Commercial Litigation Branch and the Department of Health and Human Services Office of Inspector General.  The claims settled by this agreement are allegations only, and there has been no determination of liability. 

An Eastern California real estate investor pleaded guilty today to conspiring to rig bids and commit mail fraud at public real estate foreclosure auctions in Eastern California, the Department of Justice announced.

 
Anthony B. Joachim of Stockton, Calif., entered his guilty plea in U.S. District Court for the Eastern District of California in Sacramento.  Joachim was originally indicted by a federal grand jury in Sacramento on Dec. 7, 2011, along with three other investors – Andrew B. Katakis, Donald M. Parker and Wiley C. Chandler – and one auctioneer – W. Theodore Longley. All five individuals were charged with conspiring with other unnamed co-conspirators to rig bids and commit mail fraud when purchasing selected properties at public real estate foreclosure auctions in San Joaquin County, Calif.  The indictment was superseded on May 8, 2013, to include an obstruction of justice charge against Katakis.  Chandler pleaded guilty on Feb. 24, 2012, and trial is scheduled to begin against the remaining individuals on Jan. 28, 2014.

 
According to court documents, Joachim conspired with others not to bid against one another and to instead designate a winning bidder to obtain selected properties at public real estate foreclosure auctions in San Joaquin County.  Joachim was also charged with conspiring to use the mail to carry out a scheme to fraudulently acquire title to selected San Joaquin County properties sold at public auctions, to make and receive payoffs and to divert money to co-conspirators that would have otherwise gone to mortgage holders and others by holding second, private auctions open only to members of the conspiracy.  The department said that the selected properties were then awarded to the conspirators who submitted the highest bids in the second, private auctions.  The private auctions often took place at or near the courthouse steps where the public auctions were held.  According to Joachim’s plea agreement, he participated in the conspiracies between about April 2009 until about October 2009.

 
“Today’s plea is the 11th in the Antitrust Division’s ongoing investigation of bid rigging and fraud involving real estate foreclosure auctions in the Eastern District of California,” said Bill Baer, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division.  “The division has uncovered similar schemes across the country and continues to prosecute those who profit by undermining competition at real estate foreclosure auctions.”

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

 
“My office will continue to fight real estate fraud in all its forms, including bringing to justice those who would subvert public foreclosure auctions for their own personal gain,” said United States Attorney Benjamin B. Wagner of the Eastern District of California.

 
Joachim pleaded guilty to bid rigging, a violation of the Sherman Act, which carries a maximum penalty of 10 years in prison and a $1 million fine.  The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime if either of those amounts is greater than the statutory maximum fine.  Joachim also pleaded guilty to conspiracy to commit mail fraud, which carries a maximum sentence of 30 years in prison and a $1 million fine.

           
The guilty plea entered today is the latest in the department’s ongoing federal antitrust investigation of fraud and bidding irregularities in certain real estate auctions in San Joaquin County.  The investigation is being conducted by the Antitrust Division’s San Francisco office, the U.S. Attorney’s Office for the Eastern District of California, the FBI’s Sacramento Division and the San Joaquin County District Attorney’s Office.  Anyone with information concerning bid rigging or fraud related to real estate foreclosure auctions should contact the Antitrust Division’s San Francisco office at 415-436-6660, visit www.justice.gov/atr/contact/newcase.htm, contact the U.S. Attorney’s Office for the Eastern District of California at 916-554-2700 or contact the FBI’s Sacramento Division at 916-481-9110.

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

United States Attorney ALICIA A.G. LIMTIACO, U.S. Attorney for the Districts of Guam and the Northern Mariana Islands, announced that her office conducted training to law enforcement on human trafficking investigations at the “Joint Interagency Task Force West Transnational Crime Workshop” held in the Republic of Palau on July 26, 2013.   U.S. Attorney Limtiaco, Assistant U.S. Attorney (AUSA) Rosetta San Nicolas and AUSA Rami Badawy, also conducted training and presentations at the 2nd Pacific Regional Response to Combat Human Trafficking International Conference held on July 22-26, 2013, in the Republic of Palau.

The “Joint Interagency Task Force West Transnational Crime Workshop” was attended by approximately 30 officers of the Pacific regional community, some of whom are in the photos below.

                                                                 

United States Attorney ALICIA A.G. LIMTIACO, U.S. Attorney for the Districts of Guam and the Northern Mariana Islands (NMI), was invited to speak at Vicente S.A. Benavente Middle School on October 28, 2013.  She addressed and shared with over 430 eighth grade students the significance of Red Ribbon Week and being healthy and drug free.  U.S. Attorney Limtiaco also talked with the students about preventing and stopping bullying and cyber-bullying, and how to be safe on the Internet.

The first Red Ribbon Celebration was organized in 1986 by a grassroots organization of parents concerned about the destruction caused by alcohol and drug abuse.  The red ribbon was adopted as a symbol of the movement in honor of Enrique “Kiki” Camarena, an agent with the U.S. Drug Enforcement Administration who was kidnapped and killed while investigating drug traffickers.  The Campaign has reached millions of children and has been recognized by the U.S. Congress.  Red Ribbon Week is a chance to be visible and vocal in our desire for a drug-free community.  The Campaign provides communities with a forum to bring together parents, schools and businesses to find new and innovative ways to keep kids drug free.

Attached are photos taken at the school.

Left to Right, U.S Attorney Alicia Limtiaco, Myles Macaraig (student), Victoria Ananich (student), Chona Eco (PFC-Outreach Social Worker), and Kin Fernanez (Asst. Principal).

Students listening to U.S. Attorney Alicia Limtiaco.

United States Attorney ALICIA A.G. LIMTIACO, U.S. Attorney for the Districts of Guam and the Northern Mariana Islands (NMI), was invited to speak on November 6, 2013 at the Federal Bureau of Investigation’s (FBI) Citizens Academy.  This is the 6th FBI Citizens Academy held in Guam.  U.S. Attorney Limtiaco has previously presented at the FBI Citizens Academy on topics related to the Department of Justice and U.S. Attorney’s Office.

U.S. Attorney Limtiaco discussed the mission and priorities of the Department of Justice and U.S. Attorney’s Office, the type of cases handled by the Criminal and Civil Divisions of the U.S. Attorney’s Office, and the various initiatives of the Department and U.S. Attorney’s Office including the “Smart on Crime Initiative” announced by Attorney General Eric Holder in August 2013.

The FBI offers members of the community an up close and personal look at how it operates through their Citizens Academy program.  The program brings the community’s civic, business, and religious leaders together to experience firsthand how the FBI investigates crimes and threats to our national security and learn about the various tools and techniques we employ to carry out our mission.

FBI Citizens Academy class members are nominated by a Bureau employee or a previous academy graduate. To be eligible, you must be at least 21 years old, with no felony convictions, and because of the classified investigative techniques discussed, nominees must also undergo a background check and get an interim security clearance.  The FBI Citizens Academy curriculum mirrors new-agent training. That means class members get plenty of hands-on instruction — from shooting firearms and learning how to fingerprint and handcuff suspects to collecting evidence from a crime scene and operating vehicles under emergency situations.

United States Attorney ALICIA A.G. LIMTIACO, U.S. Attorney for the Districts of Guam and the Northern Mariana Islands (NMI), announced that Assistant U.S. Attorney (AUSA) Stephen Leon Guerrero was invited to speak at Jose Rios Middle School for Career Day on April 12, 2013.  AUSA Leon Guerrero spoke to two 6th and 7th grade classes with approximately 25 students in each.  He talked to them about the educational process of becoming an attorney and his duties as an Assistant U.S. Attorney.  He also talked about the U.S. Attorney’s role with Red Ribbon Week, as well as the G.R.E.A.T. Program and Cyber-bullying. 
           
The first Red Ribbon Celebration was organized in 1986 by a grassroots organization of parents concerned about the destruction caused by alcohol and drug abuse.  The red ribbon was adopted as a symbol of the movement in honor of Enrique “Kiki” Camarena, an agent with the U.S. Drug Enforcement Administration who was kidnapped and killed while investigating drug traffickers.  The Campaign has reached millions of children and has been recognized by the U.S. Congress.  Red Ribbon Week is a chance to be visible and vocal in our desire for a drug-free community.  The Campaign provides communities with a forum to bring together parents, schools and businesses to find new and innovative ways to keep kids drug free.

The G.R.E.A.T. Program=s primary objective is awareness and prevention of delinquency, youth violence, and gang membership.  The G.R.E.A.T. lessons, aimed at elementary and middle school students, focus on teaching life skills to help students avoid delinquent behavior and violence, and learn to solve problems.    

The U.S. Attorney’s Office (“USAO”) for the Districts of Guam and the Northern Mariana Islands (“NMI”), continues to conduct presentations at various schools on the topics of Bullying and Cyber-bullying.

Attached are photos of AUSA Leon Guerrero addressing the students.

United States Attorney ALICIA A.G. LIMTIACO, U.S. Attorney for the Districts of Guam and the Northern Mariana Islands, was presented with and awarded the Patriot Award on October 24, 2013 by the Employer Support of the Guard and Reserve (ESGR).  She was nominated by an employee of the U.S. Attorney’s Office presently serving in the National Air Guard.

U.S. Attorney Limtiaco expressed her appreciation to all Veterans and to all service members for their courage, fortitude and commitment to protecting our freedoms as Americans, and to the ESGR for their continued efforts to raise awareness among employers about the significant role and responsibilities employers have in supporting and protecting the rights of employees in military service.  

According to the ESGR, the Patriot Award reflects the efforts made to support Citizen Warriors through a wide-range of measures including flexible schedules, time off prior to and after deployment, caring for families and granting leaves of absence if needed.  Patriot Awards are awarded to individual supervisors, not to an entire staff or organization as a whole.Supervisors receive a Patriot Award certificate and accompanying lapel pin.

            Please see attached photo of the ESGR’s presentation of the Patriot Award to U.S. Attorney Limtiaco.

 
U.S. Attorney Alicia Limtiaco is seen here receiving the ESGR Award from ESGR
State Chair David Sablan and members of the ESGR, together with First Assistant
Steve Sinnot, second from the right, from the U.S. Attorney’s Office

Abbott Laboratories has agreed to pay the United States $5.475 million to resolve allegations that it violated the False Claims Act by paying kickbacks to induce doctors to implant the company’s carotid, biliary and peripheral vascular products, the Justice Department announced today.  Abbott is a global pharmaceuticals and health care products company based in Abbott Park, Ill.

“Patients have a right to treatment decisions that are based on their own medical needs, not the personal financial interests of their health care providers,” said Assistant Attorney General Stuart F. Delery of the Civil Division of the Department of Justice.  “Kickbacks undermine the ability of health care providers to objectively evaluate and treat their patients, and will continue to be a primary focus of the Department’s health care enforcement efforts.”  

The settlement resolves allegations that Abbott knowingly paid prominent physicians for teaching assignments, speaking engagements and conferences with the expectation that these physicians would arrange for the hospitals with which they were affiliated to purchase Abbott’s carotid, biliary and peripheral vascular products.  As a result, the United States alleged Abbott violated the Anti-Kickback Act and caused the submission of false claims to Medicare for the procedures in which these Abbott products were used.

“Physicians should make decisions regarding medical devices based on what is in the best interest of patients without being induced by payments from manufacturers competing for their business,” said U.S. Attorney Bill Killian of the Eastern District of Tennessee.

“Offering financial inducements can distort health care decision-making,” said Special Agent in Charge Derrick L. Jackson of the U.S. Department of Health and Human Services, Office of Inspector General in Atlanta.  “OIG and our law enforcement partners vigilantly protect government health programs from such alleged abuses.”

Carotid and peripheral vascular products are used to treat circulatory disorders by increasing blood flow to the head and various parts of the body, respectively.  Biliary products are used to treat obstructions that occur in the bile ducts.

The settlement resolves allegations originally brought in a lawsuit filed by Steven Peters and Douglas Gray, former Abbott employees, under the qui tam provision of the False Claims Act , which allows whistleblowers to file suit on behalf of the United States for false claims and share in any recovery   As part of today’s resolution, Peters and Gray will receive a total payment of more than $1 million. 

This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by Attorney General Eric Holder and 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.

This settlement was the result of an investigation by the Justice Department’s Civil Division, the U.S. Attorney’s Offices for the Eastern District of Tennessee and the Northern District of California and the Office of Inspector General at the U.S. Department of Health and Human Services.

The lawsuit is captioned United States ex rel. Peters et al. v. Abbott Laboratories, Inc., Civil Action No. 3:09-CV-430 (E.D. Tenn.).   The claims settled by this agreement are allegations only, and there has been no determination of liability.

United States Attorney ALICIA A.G. LIMTIACO, U.S. Attorney for the Districts of Guam and the Northern Mariana Islands (NMI), was invited to speak at the “No More! Coming Together to End the Violence” 2013 Regional Summit held on October 25, 2013, and sponsored by the Guam Coalition Against Sexual Assault & Family Violence.

U.S. Attorney Limtiaco spoke on the topic of “Sexual Assault and Human Trafficking in Our Region” and presented “Strategies for Justice:  A Pacific Regional Response to Combat Human Trafficking.”  The “Pacific Regional Response to Combat Human Trafficking” initiative employs a multidisciplinary model, including participation, coordination, and collaboration among law enforcement; prosecution; victim service providers; social services; medical, mental and public health professionals; faith based organizations; educational institutions; Consulates; and other community stakeholders.  The response calls for the establishment and provision of victim services, investigation and prosecution of human trafficking, training opportunities, community outreach/ public awareness and prevention programs, and creation of human trafficking task forces and coalitions in the Pacific region island communities.  Providing fundamental training in human trafficking, including victimization, investigation and prosecution, prevention efforts, and other related topics, to law enforcement; prosecution; victim service providers; social services; medical, mental and public health professionals; faith based organizations; educational institutions; Consulates; and other community stakeholders, in our Pacific region island communities, is critical to effective prevention and enforcement efforts in the region.

U.S. Attorney Limtiaco also provided an overview of the Blue Lighting Campaign.  The Blue Lightning Campaign was created in recognition of the fact that victims of human trafficking are trafficked through the use of airlines.  It is a Department of Homeland Security initiative that provides U.S. commercial airlines and their employees training materials on the indicators of suspected human trafficking and more importantly, provides airlines with a voluntary mechanism to identify suspected human trafficking victims and notify federal authorities.   U.S. Attorney Limtiaco further discussed domestic and international trafficking, human trafficking laws, and public awareness and enforcement efforts.

The two-day Summit was attended by approximately 154 participants, including participants from our neighboring islands, the Commonwealth of the Northern Mariana Islands and the Republic of the Marshall Islands.

Attached is a photo taken at the 2013 Guam Coalition Against Sexual Assault & Family Violence Regional Summit.

United States Attorney ALICIA A.G. LIMTIACO, U.S. Attorney for the Districts of Guam and the Northern Mariana Islands (NMI), announced that U.S. Attorney’s Office for the Districts of Guam and the Northern Mariana Islands participated at the 2013 Foreign Labor Compliance Conference held in Guam on March 19-20, 2013.  U.S. Attorney Limtiaco spoke on the topic, “An Overview of the Pacific Regional Response to Combat Human Trafficking – Collaboration in the Western Pacific.”  The conference was sponsored by the Guam Department of Labor and over 200 people attended the two-day training.

At the Conference, U.S. Attorney Limtiaco discussed Department of Justice initiatives, including Project Safe Childhood (PSC), Project Safe Neighborhoods (PSN) and Diverse Community Outreach. 

Launched in May 2006, PSC is a nationwide initiative designed to protect children from online sexual exploitation and abuse.  Led by U.S. Attorneys= Offices, the Child Exploitation and Obscenity Section of the Department=s Criminal Division, and Internet Crimes Against Children task forces, PSC marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as identify and rescue victims.  PSC’s goal is to educate parents about the potential dangers that their children face online, and warns potential online predators that exploiting a child online is a serious federal offense. 

PSN is a nationwide commitment to aggressively prosecute defendants who engage in drug distribution, gang involvement and violent crime.   

The purpose of the Diverse Community Outreach is to increase and improve communication and collaboration between the community and law enforcement.  Faith-based community members and Consulate Offices are invited and participate in the initiative.  Issues discussed at the Diverse Community Outreach meetings include human trafficking; hate crimes and civil rights; immigration; labor; cultural competency; national security; and crime prevention. 

See attached photo of U.S. Attorney Alicia Limtiaco addressing the participants.

Conrad Alvin Barrett, 27, has been charged with a federal hate crime related to a racially-motivated assault of a 79-year-old African American man, announced Acting Assistant Attorney General Jocelyn Samuels of the Civil Rights Division along with U.S. Attorney Kenneth Magidson of the Southern District of Texas and Special Agent in Charge Stephen L. Morris of the FBI.

“Hate crimes tear at the fabric of entire communities,” said Acting Assistant Attorney General Samuels. “As always, the Civil Rights Division will work with our federal and state law enforcement partners to ensure that hate crimes are identified and prosecuted, and that justice is done.”

The criminal complaint was filed under seal Dec. 24, 2013, and unsealed today upon Barrett's arrest. He is expected to make an initial appearance before U.S. Magistrate Judge Frances Stacy at 10:00 a.m. CST.

The complaint charges Barrett, of Katy, Texas, with one count of violating the Matthew Shepard and James Byrd Jr. Hate Crimes Prevention Act. According to the complaint, on Nov. 24, 2013, Barrett attacked the elderly man because of the man’s race and color in what Barrett called a “knockout.”

“Suspected crimes of this nature will simply not be tolerated,” said U.S. Attorney Magidson. “Evidence of hate crimes will be vigorously investigated and prosecuted with the assistance of all our partners to the fullest extent of the law.”

Barrett allegedly recorded himself on his cell phone attacking the man and showed the video to others. The complaint alleges Barrett made several videos, one in which he identifies himself and another in which he makes a racial slur. In addition, Barrett had allegedly been working up the “courage” to play the “knockout game” for approximately a week.

The “knockout game” is an assault in which an assailant aims to knock out an unsuspecting victim with one punch. According to the complaint, the conduct has been called by other names and there have been similar incidents dating as far back as 1992.

According to the complaint, Barrett comments in a video that “the plan is to see if I were to hit a black person, would this be nationally televised?” The complaint further alleges Barrett claims he would not hit “defenseless people” just moments before punching the elderly man in the face. Barrett allegedly hit the man with such force that the man immediately fell to the ground. Barrett then laughed and said “knockout,” as he ran to his vehicle and fled, according to allegations. The complaint indicates the victim suffered two jaw fractures and was hospitalized for several days as a result of the attack.

“It is unimaginable in this day and age that one could be drawn to violently attack another based on the color of their skin,” said Special Agent in Charge Morris. “We remind all citizens that we are protected under the law from such racially motivated attacks, and encourage everyone to report such crimes to the FBI.”

If convicted, Barrett faces a statutory maximum of 10 years in prison and a $250,000 fine.

The investigation was conducted by the FBI in cooperation with the Fulshear and Katy, Texas, Police Departments as well as the Drug Enforcement Administration. The case is being prosecuted by Civil Rights Division Trial Attorneys Saeed Mody and Olimpia Michel and Assistant United States Attorneys Ruben R. Perez and Joe Magliolo in cooperation with Ft. Bend County District Attorney John Healey.

A criminal complaint is merely an accusation of criminal conduct, not evidence. A defendant is presumed innocent unless proven guilty through due process of law.

U.S. District Court Judge Kim R. Gibson of the Western District of Pennsylvania has entered a consent decree of permanent injunction against Metzler & Sons LLC and Pleasant View Farms Inc., the Justice Department announced today. The permanent injunction was also entered against Rodney L. Metzler, Gretchen A. Metzler, Rodney T. Metzler and Lee M. Metzler, all of whom have ownership in the firms. The permanent injunction is designed to prevent the distribution of foods that contain excessive drug residue.

The Pennsylvania firms, Metzler & Sons LLC and Pleasant View Farms Inc., own and operate several farms that sell cows for slaughter and for use as food. As set forth in the complaint filed on Dec. 18, 2013, inspections by United States Food and Drug Administration (FDA) and laboratory analyses performed by the United States Department of Agriculture (USDA) indicated that the defendants sold for slaughter for use as food dairy cows and bob veal calves that contained excessive and illegal residues of drugs in their edible tissues. According to the complaint, these inspections revealed that the defendants delivered adulterated food into interstate commerce in violation of the Federal Food, Drug and Cosmetic Act (FDCA). As set forth in the complaint, the defendants received numerous warnings from both FDA and USDA that their conduct violated the law, and despite these warnings, the defendants continued to hold animals that they sold for slaughter as food in a manner that may have rendered the animals’ edible tissues injurious to the public health.

As set forth in the complaint, levels of new animal drugs in the edible tissues of animals in amounts above the tolerances established in federal regulations pose a significant public health

risk. For example, consumers of edible animal tissues who are susceptible to antibiotics may experience severe allergic reactions as a result of ingesting food containing out-of-tolerance

antibiotic levels. Furthermore, food containing above-tolerance antibiotic levels contributes to the development of antibiotic-resistant strains of bacteria in those who eat or handle food containing residues of such drugs.

The complaint filed by the United States asked the court to permanently enjoin the firms and individual defendants from violating the FDCA. The permanent injunction entered by the court requires the firms and individual defendants to take a wide range of actions to correct their violations and ensure that they do not happen again. Among other actions, the firms must establish and implement a written record-keeping system for every animal receiving drugs to prevent the firms from selling or distributing any animals whose edible tissues contain new animal drugs in amounts above the levels permitted by law. The firms must also establish and implement a system that ensures that their use of new animal drugs conforms to the uses approved by the FDA or, for new animal drugs used in an extra-label manner, to the lawful written order of a licensed veterinarian.

“Foods that contain excessive levels of antibiotics and other drugs pose a significant risk to the public health,” said Stuart F. Delery, Assistant Attorney General for the Justice Department’s Civil Division.  “Along with our partners at HHS, FDA and USDA, the Department of Justice is committed to making sure that the food on our tables is safe to eat.”

FDA recently said that it is implementing a voluntary plan with industry to phase out the use of certain antibiotics for enhanced food production. For more information on this, you can visit the FDA website at http://www.fda.gov/ForConsumers/ConsumerUpdates/ucm378100.htm .

Assistant Attorney General Delery thanked the FDA for referring this matter to the Department of Justice. Roger Gural, Trial Attorney at the Consumer Protection Branch of the Justice Department, in conjunction with Assistant U.S. Attorney David Lew in the Western District of Pennsylvania, and Christopher Fanelli, Assistant Chief Counsel for Enforcement of the Food and Drug Division, Department of Health and Human Services, brought this case on behalf of the United States.

A federal court in Montgomery, Ala., permanently barred Kenya Hendrix Adams from preparing tax returns for others, the Justice Department announced today. The permanent injunction order was signed by U.S. District Court Judge Mark E. Fuller of the Middle District of Alabama.

The order, filed on Dec. 20, 2013, also requires Adams to turn over to the United States copies of all returns or claims for refund that she prepared after Jan. 1, 2008, and to notify each person for whom she prepared returns since that date. The order authorizes the United States to monitor Adams’ compliance with the terms of the order.

The government’s complaint alleged that Adams repeatedly prepared federal tax returns that understated her clients’ federal tax liabilities. According to the complaint, Adams did so by falsely claiming or inflating tax credits or fabricating deductions. The suit alleges that the harm to the United States Treasury as a result of her conduct could be in the millions of dollars.

“These fraudulent tax preparers create a horrible problem in this area,” said U.S. Attorney George L. Beck Jr. of the Middle District of Alabama. “What these people are doing must be stopped. I applaud the IRS for taking the steps to shut down those fraudulent tax preparers.”

Claiming bogus tax refunds is one of the IRS’s Dirty Dozen Tax Scams. In the past decade, the Justice Department’s Tax Division has obtained injunctions against hundreds of tax fraud promoters and unscrupulous tax preparers. Information about these cases is available on the Justice Department website . For more information about choosing a tax return preparer, see the IRS website and the IRS YouTube Channel .

An Ohio attorney and lobbyist pleaded guilty today for his role in a bribery and money laundering scheme involving the Ohio Treasurer’s Office.

Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, First Assistant U.S. Attorney Mark T. D’Alessandro of the Southern District of Ohio, and Special Agent in Charge Kevin R. Cornelius of the FBI’s Cincinnati Division made the announcement.

Mohammed Noure Alo, 35, of Columbus, Ohio, appeared before U.S. District Judge Michael H. Watson of the Southern District of Ohio and pleaded guilty to aiding and abetting honest services wire fraud. He faces a maximum penalty of 20 years in prison, and sentencing will be set at a later date.

Alo is a partner and founding member of a Columbus-based law firm and became a registered lobbyist to the State of Ohio in 2010. Court records state that from approximately January 2009 through January 2011, Alo admitted he conspired with his close personal friend Amer Ahmad, 38, of Chicago, and others to use Ahmad’s role as deputy treasurer to direct official State of Ohio broker services business to Douglas E. Hampton, 39, a securities broker from Canton, Ohio, in return for payments from Hampton. Hampton funneled in excess of $123,000 to Alo. Ahmad and Joseph M. Chiavaroli, 33, of Chicago, concealed additional payments from Hampton by passing them through the accounts of a landscaping business in which Ahmad and Chiavaroli held ownership interests.

As a result of the scheme, Hampton received approximately $3.2 million in commissions for 360 trades on behalf of the Ohio Treasurer’s Office. Ahmad and his co-conspirators received in excess of $500,000 from Hampton. Both Hampton and Chiavaroli entered guilty pleas in August 2013.

Ahmad was indicted on Aug. 15, 2013, on charges of conspiracy, honest services wire fraud, money laundering, conspiracy to commit money laundering, federal program bribery, and false statements. He is scheduled for trial on March 3, 2014. A criminal indictment is a formal accusation of criminal conduct, not evidence. A defendant is presumed innocent unless convicted through due process of law.

The case was investigated by the FBI’s Central Ohio Public Corruption Task Force, which includes special agents from the FBI and the Ohio Bureau of Criminal Investigation. The case is being prosecuted by Assistant U.S. Attorney Douglas W. Squires of the Southern District of Ohio and Trial Attorney Eric L. Gibson of the Criminal Division’s Public Integrity Section.

The Justice Department and the Consumer Financial Protection Bureau filed a consent order today to resolve allegations that National City Bank engaged in a pattern or practice of discrimination that increased loan prices for African-American and Hispanic borrowers who obtained residential mortgages between 2002 and 2008 from National City Bank’s retail offices and nationwide network of mortgage brokers. 

The settlement, which is subject to court approval, was filed in conjunction with the agencies’ complaint in the U.S. District Court for the Western District of Pennsylvania.  The complaint alleges that National City Bank violated the Fair Housing Act and the Equal Credit Opportunity Act (ECOA) by charging more than 75,000 African-American and Hispanic borrowers higher loan prices not based on borrower risk, but because of their race or national origin.  Specifically, the allegations involve loans made to African-American and Hispanic borrowers through the more than 400 retail offices directly operated by National City Bank nationwide between 2002 and 2008.  The allegations also involve loans made to African-American and Hispanic borrowers between 2003 and 2008 through National City Bank’s national network of mortgage brokers.  National City Bank, which was headquartered in Cleveland , Ohio, was purchased in 2009 by Pittsburgh-based PNC Financial Services Group, which is the successor in interest to National City Bank. 

“This settlement will provide deserved relief to thousands of African-American and Hispanic borrowers who suffered discrimination at the hands of National City Bank,” said Attorney General Eric Holder.  “As alleged, the bank charged borrowers higher rates not based on their creditworthiness, but based on their race and national origin.  This alleged conduct resulted in increased loan prices for minority borrowers.  This case marks the Justice Department’s latest step to protect Americans from discriminatory lending practices, and shows we will always fight to hold accountable those who take advantage of consumers for financial gain.”

“With today’s settlement, thousands of African-American and Hispanic borrowers who were discriminated against by National City Bank will be entitled to compensation,” said Acting Assistant Attorney General Jocelyn Samuels for the Justice Department’s Civil Rights Division.  “We look forward to further collaboration with the Bureau in protecting consumers from illegal and discriminatory lending practices.”

“Borrowers should never have to pay more for a mortgage loan because of their race or national origin,” said Consumer Financial Protection Bureau Director Richard Cordray.  “Today’s enforcement action puts money back in the pockets of harmed consumers and makes clear that we will hold lenders accountable for the effects of their discriminatory practices.”

"It undermines confidence in our banking system when people get different deals not only based on their credit scores, but their skin color,” said U.S. Attorney for the Northern District of Ohio Steve Dettelbach.  “With all the positive things for which National City Bank stood for so many years, this is a troubling epilogue to be entered on the other side of the ledger.  Hopefully, today's settlement will afford some relief to customers who were shortchanged by this conduct."

“Our commitment to assure fair and equal treatment under the law is absolute,” said David J. Hickton, U.S. Attorney for the Western District of Pennsylvania.  “This settlement addresses a serious failure by National City to protect potential homebuyers from discriminatory lending practices.”

           National City Bank’s business practices allowed its loan officers and mortgage brokers discretion to vary a loan’s interest rate and fees from the price it set based on the borrower’s objective credit-related factors.  This subjective and unguided pricing discretion resulted in African-American and Hispanic borrowers paying more than similarly qualified non-Hispanic White borrowers.

The allegations in the complaint relate solely to loans originated by National City Bank and do not relate to any mortgage lending practices of PNC Financial Services Group.

Under the terms of the proposed settlement, PNC will pay $35 million dollars into a fund for the benefit of victims of National City Bank’s mortgage discrimination.  The proposed settlement provides for an independent administrator to contact and disburse payments to borrowers whom the agencies’ identify as victims of National City Bank’s discrimination, at no cost to the borrowers.  PNC will pay all costs and expenses of the administrator.  Borrowers who are eligible for compensation will be contacted by the administrator.  The department will make a public announcement and post contact information on its website once the administrator begins contacting victims.  Individuals who believe that they may have been victims of lending discrimination by National City Bank and have questions about the settlement may email the department at [email protected] .

The Justice Department’s enforcement of fair lending laws is conducted by the Fair Lending Unit of the Housing and Civil Enforcement Section in the Civil Rights Division.  Since the Fair Lending Unit was established in February 2010, it has filed or resolved 31 lending matters under the Fair Housing Act, ECOA and the Servicemembers Civil Relief Act.  The settlements in these matters provide for over $800 million in monetary relief for impacted communities and individual borrowers.  The Attorney General’s annual reports to Congress subject to ECOA highlight the department’s accomplishments in fair lending and are available at www.justice.gov/crt/publications .

The Civil Rights Division and the Consumer Financial Protection Bureau are members of the Financial Fraud Enforcement Task Force.  President Obama established the interagency task force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes.  The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources.  The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets and recover proceeds for victims of financial crimes.  For more information on the task force, visit www.StopFraud.gov.

A copy of the complaint and proposed order, as well as additional information about fair lending enforcement by the Justice Department, can be obtained from the Justice Department website at www.justice.gov/fairhousing.

A 63-count superseding indictment charging Chatonda Khofi, Ishmael Kosh, Amadou Sangaray and Francis Saygbay in a conspiracy to defraud the Internal Revenue Service (IRS) was unsealed on Monday, December 23, in Minneapolis, Minn., the Justice Department and IRS announced today.  The superseding indictment was returned by a federal grand jury on Nov. 19, 2013, and alleges that Primetime Tax Services Inc. was a tax return preparation business with three storefronts in the Minneapolis area.  Khofi worked as the Chief Executive Officer of Primetime, and Kosh and Sangaray worked as managers of the Brooklyn Center location of Primetime.  All four named defendants allegedly prepared false tax returns under the name of Primetime.

According to court documents, Khofi, Kosh, Sangaray and Saygbay conspired amongst themselves and with others to prepare and file false individual income tax returns for the customers of Primetime.  Some of these returns reported false dependents, false deductions, false Schedule C business losses and false wage income.  These false entries resulted in fraudulently inflated refunds for their customers.  As part of the scheme, court documents allege that the defendants prepared and filed false Minnesota state income tax returns for their customers that contained the same or similar false information as reported on the federal income tax returns.  From 2007 to 2009, Primetime filed over 2,000 customer federal income tax returns with the IRS.

The indictment further charges each defendant with multiple counts of aggravated identity theft and multiple counts of aiding and assisting in the preparation of false individual income tax returns.  The aggravated identity theft charges stem from the defendants’ alleged use of the names and social security numbers of actual persons to falsely claim as dependents on their customers’ individual income tax returns.

According to the indictment, the defendants also accompanied some customers to check-cashing businesses to cash their falsely inflated tax refund checks, then demanded a portion of the cashed refund check in addition to tax preparation fees already collected.  The indictment alleges that, in some instances, the defendants withdrew cash from debits cards containing their customers’ refunds without permission, again in addition to the tax preparation fees they had already collected. 

An indictment is merely an allegation and all defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.  If convicted, the defendants face a maximum potential sentence of five years in prison for the conspiracy count and three years in prison for each count of aiding in the preparation of a false tax return.  The aggravated identity theft counts have a mandatory two year sentence. 

The case was investigated by special agents of IRS-Criminal Investigation.  It is being prosecuted by Trial Attorneys Dennis Kihm and Thomas Flynn of the Justice Department's Tax Division.

The former Ohio deputy treasurer pleaded guilty today for his role in leading a bribery and money laundering scheme involving the Ohio Treasurer’s Office.

Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, First Assistant U.S. Attorney Mark T. D’Alessandro of the Southern District of Ohio, and Special Agent in Charge Kevin R. Cornelius of the FBI’s Cincinnati Division made the announcement.

Amer Ahmad, 38, of Chicago, appeared before U.S. District Judge Michael H. Watson of the Southern District of Ohio and pleaded guilty to conspiracy, which carries a maximum penalty of five years in prison, and federal program bribery, which carries a maximum penalty of 10 years in prison. Sentencing will be scheduled at a later date.

According to court documents, from approximately January 2009 through January 2011, Ahmad and others conspired to use Ahmad’s role as deputy treasurer to direct official State of Ohio broker services business to Douglas E. Hampton, 39, a securities broker from Canton, Ohio, in return for payments from Hampton. Ahmad and Joseph M. Chiavaroli, 33, of Chicago, concealed those payments from Hampton by passing them through the accounts of a landscaping business in which Ahmad and Chiavaroli held ownership interests. Hampton also funneled in excess of $123,000 to Mohammed Noure Alo, 35, of Columbus, Ohio, an attorney and lobbyist who was Ahmad’s close personal friend and business associate.

As a result of the scheme, Hampton received approximately $3.2 million in commissions for 360 trades on behalf of the Ohio Treasurer’s Office. Ahmad and his co-conspirators received in excess of $500,000 from Hampton. Hampton and Chiavaroli entered guilty pleas in August 2013 and Alo pleaded guilty on Dec. 20, 2013.

The case was investigated by the FBI’s Central Ohio Public Corruption Task Force, which includes special agents from the FBI and the Ohio Bureau of Criminal Investigation. The case is being prosecuted by Assistant U.S. Attorney Douglas W. Squires of the Southern District of Ohio and Trial Attorney Eric L. Gibson of the Criminal Division’s Public Integrity Section.

WASHINGTON - El Departamento de Justicia y la Oficina para la Protección Financiera del Consumidor [Consumer Financial Protection Bureau (CFPB)] presentaron hoy una orden por consentimiento en resolución de alegatos de que National City Bank exhibió un patrón o práctica de discriminación que aumentó los precios de los préstamos para prestatarios afroestadounidenses e hispanos que obtuvieron hipotecas residenciales entre 2002 y 2008 de las oficinas minoristas y la red nacional de corredores hipotecarios de National City Bank.

El acuerdo conciliatorio, que está sujeto a aprobación del tribunal, fue presentado junto con la demanda de las agencias en el Tribunal Federal de Distrito del Distrito Oeste de Pensilvania. La demanda alega que National City Bank violó la Ley de Vivienda Justa y la Ley de Igualdad de Oportunidades de Crédito [Equal Credit Opportunity Act (ECOA)] al cobrarles a más de 75,000 prestatarios afroestadounidenses e hispanos precios de préstamos más altos no basados en el riesgo que presentaba el prestatario, sino en su raza u origen nacional. Específicamente, los alegatos se refieren a préstamos realizados a prestatarios afroestadounidenses e hispanos a través de más de 400 oficinas minoristas operadas directamente por National City Bank en todo el país entre 2002 y 2008. Los alegatos también se refieren a préstamos realizados a prestatarios afroestadounidenses e hispanos entre 2003 y 2008 a través de la red nacional de corredores hipotecarios de National City Bank. National City Bank, con sede central en Cleveland , Ohio, fue comprada en 2009 por PNC Financial Services Group, con sede en Pittsburgh, la sucesora en interés de National City Bank.

"El acuerdo conciliatorio permitirá merecida compensación a miles de prestatarios afroestadounidenses e hispanos que sufrieron discrimen por National City Bank", señaló el Secretario de Justicia de los Estados Unidos Eric Holder. "Según los alegatos, el banco les cobró a los prestatarios tasas más altas no basadas en su solvencia, sino en su raza y origen nacional. Esta presunta conducta resultó en precios de préstamos más altos para los prestatarios minoritarios. Este caso marca la más reciente medida del Departamento de Justicia para proteger a los estadounidenses contra las prácticas de otorgamiento de préstamos discriminatorias, y demuestra que seguiremos luchando siempre contra quienes se aprovechen de los consumidores por ganancia financiera".

"Con el acuerdo conciliatorio de hoy, miles de prestatarios afroestadounidenses e hispanos que fueron víctimas de discriminación por parte de National City Bank tendrán derecho a indemnización", indicó la Secretaria de Justicia Auxiliar Interina Jocelyn Samuels de la División de Derechos Civiles del Departamento de Justicia. "Nos complacerá seguir colaborando en el futuro con la CFPB para proteger a los consumidores contra prácticas de otorgamiento de préstamos ilegales y discriminatorias".

"Prestatarios nunca deberán tener que pagar más por una hipoteca debido a su raza u origen nacional", señaló el Director la Oficina para la Protección Financiera del Consumidor Richard Cordray. "La acción de legal de hoy devuelve dinero a los bolsillos de consumidores perjudicados y deja claro que responsabilizaremos a los prestamistas por los efectos de sus prácticas discriminatorias".

"Se socava la confianza en nuestro sistema bancario cuando las personas obtienen diferentes condiciones de préstamo no basadas en sus puntajes de crédito, sino en el color de su piel", dijo el Fiscal Federal para el Distrito Norte de Ohio Steve Dettelbach. "Con todas las cosas positivas que National City Bank representó durante tantos años, éste es un epílogo preocupante a ser ingresado en el lado opuesto de hoja de contabilidad. Esperamos que el acuerdo conciliatorio de hoy le brinde cierta reparación a los clientes perjudicados por esta conducta".

"Nuestro compromiso de asegurar un tratamiento justo e igualitario bajo la ley es absoluto", dijo David J. Hickton, Fiscal Federal para el Distrito Oeste de Pensilvania. "Este acuerdo conciliatorio resuelve la falla grave por parte de National City de no proteger a potenciales compradores de vivienda contra las prácticas de otorgamiento de préstamos discriminatorias".

Las prácticas comerciales de National City Bank permitieron que sus agentes de préstamos y corredores hipotecarios variaran la tasa de interés y los cargos de préstamos respecto del precio que estableció con base en factores crediticios objetivos del prestatario. Debido a esta libertad subjetiva y libre, los prestatarios afroestadounidenses e hispanos acabaron por pagar más que prestatarios blancos no hispanos con calificaciones similares.

Los alegatos de la demanda se refieren únicamente a préstamos originados por National City Bank y no están relacionados con las prácticas de otorgamiento de préstamos hipotecarios de PNC Financial Services Group.

Bajo los términos del acuerdo conciliatorio propuesto, PNC pagará 35 millones de dólares a un fondo para el beneficio de las víctimas de la discriminación hipotecaria exhibida por National City Bank. El acuerdo conciliatorio propuesto dispone que un administrador independiente contacte y realice los pagos a prestatarios identificados por las agencias como víctimas de discriminación por parte de National City Bank, sin ningún costo para los prestatarios. PNC pagará todos los costos y gastos del administrador. Los prestatarios que reúnan los requisitos para compensación serán contactados por el administrador. El Departamento realizará un anuncio público y publicará información de contacto en su portal en Internet una vez que el administrador comience a comunicarse con las víctimas. Las personas que crean que pueden haber sido víctimas de discriminación en el otorgamiento de préstamo por parte de National City Bank y tengan preguntas sobre el acuerdo conciliatorio pueden enviar un mensaje de correo electrónico al departamento a [email protected].

La Unidad de Préstamos Justos de la Sección de Vivienda y Cumplimiento de la Ley Civil de la División de Derechos Civiles es responsable, en el Departamento de Justicia, de hacer valer las leyes de otorgamiento justo de préstamos. Desde su fundación en febrero de 2010, la Unidad de Préstamos Justos ha iniciado o resuelto 31 casos asociados con préstamos bajo la Ley de Vivienda Justa [Fair Housing Act], ECOA y la Ley de Amparo Civil para Militares [Servicemembers Civil Relief Act]. Los acuerdos conciliatorios logrados en estos casos consistieron en más de 800 millones de dólares en indemnizaciones a comunidades y prestatarios individuales afectados. Los informes anuales del Secretario de Justicia de EE.UU. al Congreso bajo ECOA destacan los logros del Departamento en el otorgamiento de préstamos justos y están disponibles en www.justice.gov/crt/publications.

La División de Derechos Civiles y la Oficina para la Protección Financiera del Consumidor son miembros de la Fuerza de Tarea de Coacción contra el Fraude Financiero. El Presidente Obama estableció la fuerza de tarea interagencial para llevar a cabo una iniciativa enérgica, coordinada y proactiva para investigar y enjuiciar los delitos financieros. La fuerza de tarea incluye a representantes de una amplia gama de dependencias federales, autoridades reguladoras, inspectores generales y miembros de las fuerzas del orden público estatales y locales, quienes, trabajando juntos, aprovechan un poderoso espectro de recursos de coacción penal y civil. La fuerza de tarea está trabajando para mejorar la labor en todo el poder ejecutivo federal, y con asociados estatales y locales, para investigar y enjuiciar los delitos financieros importantes, asegurar un castigo justo y eficaz para quienes cometan delitos financieros, combatir la discriminación en los mercados de préstamos y financieros, y recuperar fondos para las víctimas de delitos financieros. Para obtener más información sobre la fuerza de tarea, visite www.StopFraud.gov.

Para obtener una copia de la demanda y la orden propuesta, así como también información adicional sobre la labor del Departamento de Justicia para hacer valer las leyes de otorgamiento justo de préstamos, visite el portal del Departamento de Justicia en www.justice.gov/fairhousing.

An unlicensed nurse who fled after being charged in 2008 and was captured this year was sentenced today to serve 108 months in prison for her role in a fraud scheme that resulted in more than $11 million in fraudulent claims to Medicare.

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.

Carmen Gonzalez, 39, of Cape Coral, Fla., worked at St. Jude Rehabilitation Center, a fraudulent HIV infusion clinic in Miami, that was controlled by her cousins, Jose, Carlos and Luis Benitez, aka the Benitez Brothers. Gonzalez was also sentenced for failing to appear at a June 2008 bond hearing. The sentencing follows her conviction at trial to one count of conspiracy to defraud the United States to cause the submission of false claims and to pay health care kickbacks and one count of conspiracy to commit health care fraud. Gonzalez had previously pleaded guilty to a separate charge of failure to appear.

Gonzalez was sentenced by Chief United States District Judge Federico A. Moreno in Miami, who also sentenced her to serve three years of supervised release.

Evidence at trial revealed that Gonzalez was an unlicensed nurse who paid thousands of dollars over a five month period to HIV beneficiaries so that St. Jude could submit millions of dollars in false and fraudulent claims to Medicare. Gonzalez knew that St. Jude billed millions of dollars to Medicare for expensive HIV infusion therapy that was neither medically necessary nor provided. Gonzalez fabricated patient medical records to facilitate and conceal the fraud, and these fabricated records were utilized to support the false and fraudulent claims submitted to Medicare on behalf of St. Jude.

On Oct. 17, 2013, Gonzalez pleaded guilty to knowingly and willfully failing to appear at a June 2008 hearing as directed by Judge Moreno. Court documents reveal that Gonzalez was released on bond pending trial, but she knowingly and willfully failed to appear as directed by the court to a June 2008 hearing.

In January 2013, Gonzalez’s father, Enrique Gonzalez, was sentenced to 70 months in prison by U.S. District Judge Cecilia M. Altonaga in the Southern District of Florida for his role in separate health care fraud conspiracy.

The Benitez Brothers remain fugitives. Anyone with information regarding their whereabouts is urged to contact HHS-OIG at 202-619-0088.

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 Attorneys Allan Medina and Nathan Dimock 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

Timothy Stafford, 41,  pleaded guilty today in federal court in Nashville, Tenn.,  for his role in the April 30, 2012, cross burning in front of an interracial family’s home in Minor Hill, Tenn., the Department of Justice announced.

 Stafford pleaded guilty to conspiring with others to threaten, intimidate and interfere with an interracial couple’s enjoyment of their housing rights.  Stafford admitted in court that on the night of April 30, 2012, he and two other individuals devised a plan to burn a cross in the yard of an interracial couple in Minor Hill, Tenn..  Stafford constructed a wooden cross in a workshop behind his house.  Stafford and his co-conspirators then purchased diesel fuel and covered the cross in diesel fuel-soaked cloth.  Stafford then drove his conspirators and the cross to the victims’ residence.  Upon arriving at the residence, the other conspirators placed the cross in the driveway and ignited it.  Stafford and the conspirators chose to burn the cross at the victims’ house, because of their race, as well as the race of their child.  Stafford admitted to targeting the interracial couple because he did not want interracial dating in his community.

Ivan “Rusty” London IV, 21, of Lexington, Ky., previously pleaded guilty for his role in the conspiracy, and is currently awaiting sentencing. 

“Hate motivated crimes will not be tolerated in our country,” said Jocelyn Samuels, Acting Assistant Attorney General for the Civil Rights Division.  “The Justice Department will vigorously prosecute individuals that violate the rights of others because of race.”

 “The right to live in a community of your choosing, free of acts of intimidation that are meant to inspire fear, is a fundamental right in the United States,” said David Rivera, U.S. Attorney for the Middle District of Tennessee.  “The Department of Justice takes these transgressions very seriously and to the extent that individuals interfere with fundamental civil rights, they will be prosecuted to the full extent of the law.”

Timothy Stafford faces a statutory maximum of 10 years in prison.  Ivan London faces a statutory maximum of 5 years in prison.

This case was investigated by the Columbia, Tenn., Division of the FBI and is being prosecuted by Assistant U.S. Attorney Blanche Cook of the Middle District of Tennessee and Trial Attorney Jared Fishman of the Civil Rights Division.

A patient recruiter and a therapy staffing company owner were sentenced today to serve 50 months and 46 months in prison, respectively, for their participation in a $7 million health care fraud scheme involving defunct home health care company Anna Nursing Services Corp.

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.

Ivan Alejo, 48, and Hugo Morales, 37, both of Miami, were sentenced by U.S. District Judge Jose E. Martinez in the Southern District of Florida. In addition to their prison terms, Alejo and Morales were both sentenced to serve three years of supervised release. Alejo and Morales were also ordered to pay jointly and severally with their co-defendants $6,928,931 and $1,958,279, respectively, in restitution.

In August 2013, Alejo and Morales pleaded guilty before Judge Martinez to conspiracy to commit health care fraud.

Alejo worked as a patient recruiter at Anna Nursing, a Miami home health care agency that purported to provide home health and therapy services to Medicare beneficiaries. Morales owned a therapy staffing company, Professionals Therapy Staffing Services Inc., which provided therapists to Anna Nursing.

According to court documents, co-conspirators of Alejo and Morales operated Anna Nursing for the purpose of billing the Medicare Program for, among other things, expensive physical therapy and home health care services that were not medically necessary and/or not provided.

Alejo’s primary role in the scheme at Anna Nursing involved negotiating and paying kickbacks and bribes, interacting with patient recruiters and assisting in the submission of fraudulent claims to the Medicare program. Alejo and his co-conspirators would pay kickbacks and bribes to patient recruiters in return for the recruiters providing patients to Anna Nursing for home health and therapy services that were medically unnecessary and/or not provided. Alejo and his co-conspirators would pay kickbacks and bribes to co-conspirators in doctors’ offices and clinics in exchange for home health and therapy prescriptions, medical certifications and other documentation. Alejo and his co-conspirators would use the prescriptions, medical certifications and other documentation to fraudulently bill the Medicare program for home health care services, which Alejo knew was in violation of federal criminal laws.

Morales’s primary role in the scheme at Anna Nursing involved operating Professionals Therapy, where he and others created fictitious progress notes and other patient files indicating that therapists from Professionals Therapy had provided physical or occupational therapy services to particular Medicare beneficiaries, when in many instances those services had not been provided and/or were not medically necessary. Morales knew the documents he and others from Professionals Therapy falsified were used to support false claims for home health care services billed to Medicare by his co-conspirators at Anna Nursing, which Morales knew was in violation of federal criminal laws.

From approximately October 2010 through approximately April 2013, Anna Nursing was paid by Medicare approximately $7 million for fraudulent claims for home health care 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 .

Francis Marimo was sentenced today in connection with an odometer tampering scheme, the Justice Department announced.  Marimo was sentenced by U.S. District Court Judge Louise Wood Flanagan in New Bern, N.C., to serve 18 months in prison and one year of supervised release.  Marimo also was ordered to pay $190,845 in restitution.

“Used car shoppers rely on mileage readings to judge both the value and safety of vehicles they might purchase,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery.  “Tampering with a vehicle’s odometer in order to swindle a would-be buyer is a federal crime that will be prosecuted.” 

In June, Marimo pleaded guilty to two counts of odometer tampering.  According to the Information filed in the case, from 2008 through 2012, Marimo purchased used vehicles primarily through online advertisements, then replaced the existing odometers with odometers showing lower mileages.  Marimo sold these vehicles to consumers in the Raleigh, N.C., area while representing the low mileages on the replacement odometers as accurate.  Mileage for one of the vehicles described in the Information was “rolled back” more than 100,000 miles.  As part of a plea agreement, Marimo agreed that his conduct had caused between $120,000 and $200,000 in losses to consumers.

“The importance of accurate mileage readings on used car odometers cannot be overstated,” said U.S. Attorney for the Eastern District of North Carolina Thomas G. Walker.  “This case demonstrates our determination to protect the consumer from this type of fraud.”

The North Carolina Division of Motor Vehicles and the National Highway Traffic Safety Administration (NHTSA) Office of Odometer Fraud Investigation investigated this case.  The case was prosecuted by the Justice Department’s Civil Division, Consumer Protection Branch.

More information on odometer fraud is available at www.nhtsa.gov/Odometer-Fraud .

The Department of Justice and the Consumer Financial Protection Bureau (CFPB) today announced the federal government’s largest auto loan discrimination settlement in history to resolve allegations that Detroit-based Ally Financial Inc. and Ally Bank have engaged in an ongoing nationwide pattern or practice of discrimination against African-American, Hispanic and Asian/Pacific Islander borrowers in their auto lending since April 1, 2011.  The agreement is the first joint fair lending enforcement action by the department and CFPB.  With this agreement, eight of the top 10 largest fair lending settlements in the department’s history have been under Attorney General Eric Holder’s leadership.

 
The settlement provides $80 million in compensation for victims of past discrimination by one of the nation’s largest auto lenders and requires Ally to pay $18 million to the CFPB’s Civil Penalty Fund.  Ally also must refund discriminatory overcharges to borrowers for the next three years unless it significantly reduces disparities in unjustified interest rate markups.  This system will create a strong financial incentive to eliminate discriminatory overcharges.

 
“With this largest-ever settlement in an auto loan discrimination case, we are taking a firm stand against discrimination in a critical lending market,” said Attorney General Eric Holder.  “By requiring Ally to provide refunds to those who are overcharged because of their race or national origin, this agreement will ensure relief for Americans who are victimized. It will enable the Justice Department and the CFPB to work closely with Ally and others to prevent discriminatory practices in the future. And it will reinforce our determination to respond aggressively to discrimination in America’s lending markets – wherever it is found.”

 
The settlement resolves claims by the department and the CFPB that Ally discriminated by charging approximately 235,000 African-American, Hispanic and Asian/Pacific Islander borrowers higher interest rates than non-Hispanic white borrowers.  The agencies claim that Ally charged borrowers higher interest rates because of their race or national origin, and not because of the borrowers’ creditworthiness or other objective criteria related to borrower risk.  The average victim paid between $200 and $300 extra during the term of the loan.  The Equal Credit Opportunity Act (ECOA) prohibits such discrimination in all forms of lending, including auto lending.  Ally’s settlement with the DOJ, which is subject to court approval, was filed today in the U.S. District Court for the Eastern District of Michigan in conjunction with the DOJ’s complaint.  Ally resolved the CFPB’s claims by entering into a public administrative settlement.

“Discrimination is a serious issue across every consumer credit market,” said CFPB Director Richard Cordray. “We are returning $80 million to hard-working consumers who paid more for their cars or trucks based on their race or national origin. We look forward to working closely with the Justice Department and Ally to make sure this serious issue will be addressed appropriately in the years ahead as well.”

Rather than taking applications directly from consumers, Ally makes most of its loans through over 12,000 car dealers nationwide who help their customers pay for their new or used car by submitting their loan application to Ally.  Ally’s business practice, like most other major auto lenders, allows car dealers discretion to vary a loan’s interest rate from the price Ally initially sets based on the borrower’s objective credit-related factors.  Dealers receive greater payments from Ally on loans that include a higher interest rate markup.  The coordinated investigations by the department and the CFPB that preceded today’s settlement determined this system of subjective and unguided pricing discretion directly results in Ally’s qualified African-American, Hispanic and Asian/Pacific Islander borrowers paying more than qualified non-Hispanic white borrowers.

 
The agencies claim that Ally fails to adequately monitor its interest rate markups for discrimination or require dealers to document their markup decisions.  Ally’s first effort to monitor for discrimination in interest rate markups began only earlier this year after it learned of the CFPB’s preliminary findings of discrimination, and resulted in only two dealers being sanctioned and subjected to nothing more than voluntary training. 

 
“This settlement provides relief to those who were harmed by this discrimination,” said U.S. Attorney for the Eastern District of Michigan Barbara McQuade.  “Lenders must consider an individual borrower’s credit worthiness, based on income, savings, credit history and other objective factors when determining the terms of a loan.  This settlement will ensure that in the future, borrowers will be able to obtain loans from Ally based on their own credit history free from discrimination based on race or national origin.” 

Today’s settlement represents the first resolution of the department’s joint effort with the CFPB to address discriminatory auto lending practices.  The 2010 Dodd-Frank Act gave both the DOJ and the CFPB authority to take action against large banks like Ally for violating the ECOA.  Although the department has filed previously filed lawsuits alleging violations of ECOA involving car loans, today is the first ECOA lawsuit against an auto lender that operates nationwide.

 
In addition to the $98 million in payments for its past conduct and requirement to refund future discriminatory charges, the settlement requires Ally to improve its monitoring and compliance systems.  The settlement allows Ally to experiment with different approaches toward lessening discrimination and requires it to regularly report to the department and the CFPB on the results of its efforts as well as discuss potential ways to improve results.  The department commends Ally for working cooperatively to reach an appropriate resolution of this case.  The department looks forward to Ally’s commitment, as part of the settlement, to work with the Civil Rights Division and the CFPB to find improved ways to fairly charge all consumers while also fairly compensating auto dealers for the services they provide.

 
The department’s enforcement of fair lending laws is conducted by the Fair Lending Unit of the Housing and Civil Enforcement Section in the Civil Rights Division.  Since the Fair Lending Unit was established in February 2010, it has filed or resolved 30 lending matters under the Fair Housing Act, ECOA and the Servicemembers Civil Relief Act.  The settlements in these matters provide for a minimum of $775 million in monetary relief for impacted communities and more than 535,000 individual borrowers.  The Attorney General’s annual reports to Congress subject to ECOA highlight the department’s accomplishments in fair lending and are available at www.justice.gov/crt/publications .

 
The settlement provides for an independent administrator to locate victims and distribute payments of compensation at no cost to borrowers whom the department and the CFPB identify as victims of Ally’s discrimination.  The department and the CFPB will make a public announcement and post information on their websites once more details about the compensation process become available.  Borrowers who are eligible for compensation from the settlement will be contacted by the administrator, and do not need to contact the department or the CFPB at this time.  Individuals who have auto loan questions or would like to submit a complaint can contact the CFPB at (855) 411-2372.

 
The Civil Rights Division, the U.S. Attorney’s Office for the Eastern District of Michigan and the CFPB are members of the Financial Fraud Enforcement Task Force.  President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes.  The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring a powerful array of criminal and civil enforcement resources.  The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets and recover proceeds for victims of financial crimes.  For more information on the task force, visit www.StopFraud.gov

The Department of Justice announced today that it has entered a consent decree with the Reading Parking Authority (RPA) in the City of Reading, Pa., which, if approved by the court, will resolve a lawsuit filed by the United States on June 27, 2013.  The complaint alleged that the RPA violated Title VII of the Civil Rights Act of 1964 when it discriminated against former employee Henry Perez and other current and former employees of the RPA by subjecting them to harassment based on national origin (Hispanic), and then retaliating against Perez when he complained about the discrimination and harassment. 

Under the terms of the consent decree, the RPA will institute new policies and procedures to ensure that its employees are not subjected to discrimination, harassment and retaliation.  These policies and procedures will include a new reporting and investigation process to ensure that employees may report allegations of discrimination, harassment and retaliation, and that upon receiving such complaints, designated individuals will ensure that all such complaints are investigated appropriately.  Additionally, the RPA will be required to provide training to all employees regarding discrimination, harassment and retaliation, as well as the terms of the new policies and procedures put in place as a result of the consent decree.  Finally, the RPA will pay a total of $77,500 in monetary relief to individuals harmed by the discrimination, harassment and retaliation.

“No one should have to endure harassment due to their national origin or retaliation for speaking out against such discrimination,” said Acting Assistant Attorney General Jocelyn Samuels for the Civil Rights Division.  “This lawsuit sends a clear message that the department will vigorously protect the rights of those in the public sector facing discrimination.  The department commends the RPA for working to put in place new policies and procedures to protect its employees from discrimination, harassment and retaliation.”

The Philadelphia District Office of the Equal Employment Opportunity Commission (EEOC) investigated and attempted to resolve Perez’s charge of discrimination before referring it to the Department of Justice for litigation. 

 
“By working together closely in appropriate cases, the EEOC and Department of Justice can marshal public resources more effectively and strategically,” said EEOC District Director Spencer H. Lewis Jr. of the EEOC’s Philadelphia District Office.  “This settlement demonstrates once again that our partnership can yield significant results and will ensure all public employees are protected from egregious and unlawful discrimination, harassment and retaliation in the workplace.”

 
More information about the EEOC is available on its website at www.eeoc.gov .  The enforcement of the Title VII is a top priority of the Justice Department’s Civil Rights Division.  Additional information about the Civil Rights Division is available on its website at www.justice.gov/crt .  

The Justice Department secured $3. 8 billion in settlements and judgments from civil cases involving fraud against the government in the fiscal year ending Sept. 30, 2013, Assistant Attorney General for the Civil Division Stuart F. Delery announced today.  This dollar amount, which is the second largest annual recovery of its type in history, brings total recoveries under the False Claims Act since January 2009 to $ 17 billion – nearly half the total recoveries since the Act was amended 27 years ago in 1986.

The Justice Department’s fiscal year 2013 efforts recovered more than $3 billion for the fourth year in a row and are surpassed only by last year’s nearly $5 billion in recoveries. As in previous years, the largest recoveries related to health care fraud, which reached $2. 6  billion.  Procurement fraud (related primarily to defense contracts) accounted for another $ 890  million – a record in that area.

“It has been another banner year for civil fraud recoveries, but more importantly, it has been a great year for the taxpayer and for the millions of Americans, state agencies and organizations that benefit from government programs and contracts,” said Assistant Attorney General Delery.  “The $3. 8 billion in federal False Claims Act recoveries in fiscal year 2013, plus another $443 million in recoveries for state Medicaid programs, restores scarce taxpayer dollars to federal and state governments.  The government’s success in these cases is also a strong deterrent to others who would misuse public funds, which means government programs designed to keep us safer, healthier and economically more prosperous can do so without the corrosive effects of fraud and false claims.”

The False Claims Act is the government’s primary civil remedy to redress false claims for government funds and property under government contracts, including national security and defense contracts, as well as under government programs as varied as Medicare, veterans benefits, federally insured loans and mortgages, transportation and research grants, agricultural supports, school lunches and disaster assistance. In 1986, Congress strengthened the Act by amending it to increase incentives for whistleblowers to file lawsuits on behalf of the government, which has led to more investigations and greater recoveries.

Most false claims actions are filed under the Act’s whistleblower, or qui tam, provisions, which allow private citizens to file lawsuits alleging false claims on behalf of the government.  If the government prevails in the action, the whistleblower, known as a relator, receives up to 30 perc ent of the recovery.  The number of qui tam suits filed in fiscal year 2013 soared to 752 –100 more than the record set the previous fiscal year.  Recoveries in qui tam cases during fiscal year 2013 totaled $2. 9 billion , with whistleblowers recovering $345 million.

Health Care Fraud

The $2. 6 billion in health care fraud recoveries in fiscal year 2013 marks four straight years the department has recovered more than $2 billion in cases involving health care fraud.  This steady, significant and continuing success can be attributed to the high priority the Obama Administration has placed on fighting health care fraud. In 2009, Attorney General Eric Holder and Health and Human Services Secretary Kathleen Sebelius announced the creation of an interagency task force, the Health Care Fraud Prevention and Enforcement Action Team (HEAT), to increase coordination and optimize criminal and civil enforcement.  This coordination has yielded historic results: From January 2009 through the end of the 2013 fiscal year, the department used the False Claims Act to recover $12 .1 billion in federal health care dollars.  Most of these recoveries relate to fraud against Medicare and Medicaid.  Additional information on the government’s efforts in this area is available at StopMedicareFraud.gov, a webpage jointly established by the Departments of Justice and Health and Human Services.

Some of the largest recoveries this past fiscal year involved allegations of fraud and false claims in the pharmaceutical and medical device industries.  Of the $2. 6 billion in federal health care fraud recoveries, $1.8 billion were from alleged false claims for drugs and medical devices under federally insured health programs that, in addition to Medicare and Medicaid, include TRICARE, which provides benefits for military personnel and their families, veterans’ health care programs and the Federal Employees Health Benefits Program.  The department recovered an additional $443 million for state Medicaid programs.

Many of these settlements involved allegations that pharmaceutical manufacturers improperly promoted their drugs for uses not approved by the Food and Drug Administration (FDA) – a practice known as “off-label marketing.”  For example, drug manufacturer Abbott Laboratories Inc. paid $1.5 billion to resolve allegations that it illegally promoted the drug Depakote to treat agitation and aggression in elderly dementia patients and schizophrenia when neither of these uses was approved as safe and effective by the FDA.  This landmark $1.5 billion settlement included $575 million in federal civil recoveries, $225 million in state civil recoveries and nearly $700 million in criminal fines and forfeitures.  In another major pharmaceutical case, biotech giant Amgen Inc. paid the government $762 million, including $598.5 million in False Claims Act recoveries, to settle allegations that included its illegal promotion of Aranesp, a drug used to treat anemia, in doses not approved by the FDA and for off-label use to treat non-anemia-related conditions.  For details, see Abbott, Abbott sentencing, and Amgen.

The department also settled allegations relating to the manufacture and distribution of adulterated drugs.  For example, generic drug manufacturer Ranbaxy USA Inc. paid $505 million to settle allegations of false claims to federal and state health care programs for adulterated drugs distributed from its facilities in India.  The settlement included $237 million in federal civil claims, $118 million in state civil claims and $150 million in criminal fines and forfeitures. For details, see Ranbaxy.

Adding to its successes under the False Claims Act, the Civil Division’s Consumer Protection Branch, together with U.S. Attorneys across the country, obtained 16 criminal convictions and more than $1. 3 billion in criminal fines, forfeitures and disgorgement under the Federal Food, Drug and Cosmetic Act (FDCA).  The FDCA protects the health and safety of the public by ensuring, among other things, that drugs intended for use in humans are safe and effective for their intended uses and that the labeling of such drugs bears true, complete and accurate information.

In other areas of health care fraud, the department obtained a $237 million judgment against South Carolina-based Tuomey Healthcare System Inc., after a four-week trial, for violating the Stark Law and the False Claims Act.  The Stark Law prohibits hospitals from submitting claims to Medicare for patients referred to the hospital by physicians who have a prohibited financial relationship with the hospital.  Tuomey’s appeal of the $237 million judgment is pending.  If the judgment is affirmed on appeal, this will be the largest judgment in the history of the Stark Law. For the court’s opinion, see Tuomey.

The department also recovered $26.3 million in a settlement with Steven J. Wasserman M.D., a dermatologist practicing in Florida, to resolve allegations that he entered into an illegal kickback arrangement with Tampa Pathology Laboratory that resulted in increased claims to Medicare.  Tampa Pathology Laboratory previously paid the government $950,000 for its role in the alleged scheme.  The $26.3 million settlement is one of the largest with an individual in the history of the False Claims Act.  For details, see Wasserman.

Procurement Fraud

Fiscal year 2013 was a record year for procurement fraud matters.  The department secured more than $887 million in settlements and judgments based on allegations of false claims and corruption involving government contracts.  Prominent among these successes was the department’s $664 million judgment against Connecticut-based defense contractor United Technologies Corp. (UTC).  A federal court found UTC liable for making false statements to the Air Force in negotiating the price of a contract for fighter jet engines.  In 2004, the department had won a smaller judgment after a three-month trial.  Both sides appealed, but the government’s arguments prevailed, resulting in the case being returned to the trial court to reassess damages. The $664 million judgment, which UTC has appealed, is the largest judgment in the history of the False Claims Act and, if the appellate court affirms, will be the largest procurement recovery in history.  For details, see UTC.

The department also settled allegations of false claims with two companies in connection with their contracts with the General Services Administration (GSA) to market their products through the Multiple Award Schedule (MAS) program.  To be awarded a MAS contract, and thereby gain access to the broad government marketplace, contractors must provide GSA with complete, accurate and current information about their commercial sales practices, including discounts afforded to their commercial customers.  The government alleged that W.W. Grainger Inc., a national hardware distributor headquartered in Illinois, and Ohio-based RPM International Inc. and its subsidiary, Tremco Inc., a roofing supplies and services firm, failed to disclose discounts given to their commercial customers, which resulted in government customers paying higher prices.  The department recovered $70 million from W.W. Grainger in a settlement that also included allegations relating to a U.S. Postal Services contract and $61 million from RPM International Inc. and Tremco.  For details, see Grainger, RPM/Tremco.

Other Fraud Recoveries

A $45 million settlement with Japan-based Toyo Ink S.C. Holdings Co. Ltd. and its Japanese and United States affiliates (collectively Toyo) demonstrates the breadth of cases the department pursues.  This settlement resolved allegations that Toyo misrepresented the country of origin on documents presented to the Department of Homeland Security’s U.S. Customs and Border Protection to evade antidumping and countervailing duties on imports of the colorant carbazole violet pigment into the United States.  These duties protect U.S. businesses by offsetting unfair foreign pricing and foreign government subsidies.  For details, see Toyo.

The False Claims Act also is used to redress grant fraud.  In a significant case involving a grant from the Department of Education, Education Holdings Inc. (formerly The Princeton Review Inc.) paid $10 million to resolve allegations that the company fabricated attendance records for thousands of hours of afterschool tutoring of students that was funded by the federal grant.  For details, see Education Holdings.

Recoveries in Whistleblower Suits

Of the $3. 8 billion the department recovered in fiscal year 2013, $2. 9 billion related to lawsuits filed under the qui tam provisions of the False Claims Act.  During the same period, the department paid out more than $345 million to the courageous individuals who exposed fraud and false claims by filing a qui tam complaint.  (The average share paid to whistleblowers in fiscal year 2013 cannot be determined from these numbers because the awards paid to whistleblowers in one fiscal year do not always coincide with the fiscal year in which the case was resolved, and the fiscal year’s recoveries may include amounts to settle allegations outside the whistleblower’s complaint.)

Whistleblower lawsuits were in the range of three to four hundred per year from 2000 to 2009, when they began their climb from 433 lawsuits in fiscal year 2009 to 752  lawsuits in fiscal year 2013.  Due to the complexity of fraud investigations generally, the outcomes of many of the qui tam cases filed this past fiscal year are not yet known, but the growing number of lawsuits filed since 2009 have led to increased recoveries.  Qui tam recoveries exceeded $2 billion for the first time in fiscal year 2010 and have continued to exceed that amount every year since.  Qui tam recoveries this past fiscal year bring the department’s totals since January 2009 to $13.4 billion.  During the same period, the department paid out $1.98 billion in whistleblower awards.

“These recoveries would not have been possible without the brave contributions made by ordinary men and women who made extraordinary sacrifices to expose fraud and corruption in government programs,” said Assistant Attorney General Delery. “We are also grateful to Congress and its continued support of strengthening the False Claims Act, including its qui tam provisions, giving the department the tools necessary to pursue false claims.”

In 1986, Senator Charles Grassley and Representative Howard Berman led successful efforts in Congress to amend the False Claims Act to, among other things, encourage whistleblowers to come forward with allegations of fraud.  In 2009, Senator Patrick J. Leahy, along with Senator Grassley and Representative Berman, championed the Fraud Enforcement and Recovery Act of 2009, which made additional improvements to the False Claims Act and other fraud statutes.  And in 2010, the passage of the Affordable Care Act provided additional inducements and protections for whistleblowers and strengthened the provisions of the federal health care Anti-Kickback Statute.

Assistant Attorney General Delery also expressed his deep appreciation for the dedicated public servants who investigated and pursued these cases.  These individuals include attorneys, investigators, auditors and other agency personnel throughout the Justice Department’s Civil Division, the U.S. Attorneys’ Offices, the Departments of Defense and Health and Human Services, the various Offices of Inspector General and the many other federal and state agencies that contributed to the department’s recoveries this past fiscal year.

“The department’s continued success in recovering fraudulent claims for taxpayer money this past fiscal year is a product of the tremendous skill and dedication of the people who worked on these cases and investigations and continue to work hard to protect against the misuse of taxpayer dollars,” said Delery.

The U.S. Department of Justice today announced the opening of a comprehensive grant solicitation for funding to support public safety, victim services, and crime prevention by American Indian and Alaska Native governments. The department’s FY 2014 Coordinated Tribal Assistance Solicitation (CTAS) is available at www.justice.gov/tribal/open-sol.html .

“Over the past four years, more than $437 million in much-needed assistance has been provided to American Indian and Alaska Native communities through the Coordinated Tribal Assistance Solicitation,” said Associate Attorney General Tony West.  “These resources are helping to strengthen justice, hope, and healing in tribal communities and are supporting efforts to intervene in the lives of at-risk youth, prevent violence against women, improve community policing, and explore alternatives to incarceration.”

CTAS is administered by the Justice Department’s Office of Justice Programs (OJP), the Office of Community Oriented Policing Services (COPS) and the Office on Violence Against Women (OVW). The funding can be used to enhance law enforcement; bolster adult and juvenile justice systems; prevent and control juvenile delinquency; serve victims of sexual assault, domestic violence, and elder abuse; and support other efforts to combat crime.

Applications for CTAS are submitted through the Justice Department’s Grants Management System (GMS) which enables grantees to register and apply for CTAS online. Applicants should register early, and no later than Tuesday, March 4, 2014, in order to resolve difficulties in advance of the application deadline. The deadline for submitting applications in response to this grant announcement is 7:00 p.m. EST on Monday, March 24, 2014 .

The FY 2014 CTAS reflects improvements and refinements from earlier versions. The department received feedback from tribal leaders during tribal consultations and listening sessions, from written comments from applicants and grantees, and from a specially developed assessment tool that was used to obtain information about the application experience.

For the FY 2014 CTAS, a tribe or tribal consortium will submit a single application and select from nine competitive grant programs referred to as Purpose Areas. This approach allows the department’s grant-making components to consider the totality of a tribe’s overall public safety needs.

The nine purpose areas are:

1.       Public Safety and Community Policing (COPS)

2.       Comprehensive Tribal Justice Systems Strategic Planning (BJA)

3.       Justice Systems, and Alcohol and Substance Abuse (BJA)

4.       Corrections and Correctional Alternatives (BJA)

5.       Violence Against Women Tribal Governments Program (OVW)

6.       Children’s Justice Act Partnerships for Indian Communities (OVC) 

7.       Comprehensive Tribal Victim Assistance Program (OVC)

8.       Juvenile Justice (OJJDP)

9.       Tribal Youth Program (OJJDP)   

Tribes or tribal consortia are encouraged to explore other funding opportunities for which they may be eligible under non-tribal, government-specific federal grant programs. Additional funding information may be found at www.grants.gov or the websites of individual agencies.

Today’s announcement is part of the Justice Department’s ongoing initiative to increase engagement, coordination, and action on public safety in tribal communities.

Genzyme Corp. has agreed to pay $22.28 million to resolve allegations that it marketed, and caused false claims to be submitted to federal and state health care programs for use of, a “slurry” version of its Seprafilm adhesion barrier, the Justice Department announced today.  Seprafilm is a thin film intended to reduce adhesions after surgery by forming a bio-resorbable barrier between abdominal tissue and organs.  Genzyme is a biotechnology corporation based in Cambridge, Mass., and was acquired by Sanofi-Aventis SA in April 2011.
 
“There will be consequences when medical device companies alter products to increase sales and profits without regard for risks to patient safety,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery.  “Federal health care participants should receive only devices that are medically reasonable and necessary.”

The government alleges that Genzyme sales representatives taught doctors and other staff to cut the Seprafilm sheets into small pieces, add saline and allow the pieces to dissolve until the desired consistency was reached.  This mixture was referred to as “slurry.”  Genzyme sales representatives traded recipes for slurry, and trained each other in how to create it.  The slurry was used in laparoscopic or “key hole” surgeries by inserting a catheter filled with the mixture into the body and squirting it into the abdominal cavity.  Seprafilm is FDA-approved for use in open abdominal surgery but not for minimally invasive surgeries, such as laparoscopic or key hole surgery.  Allegedly, as a result of this conduct, Genzyme knowingly caused hospitals and other purchasers of Seprafilm to submit false and fraudulent claims to federal health care programs for uses of Seprafilm that were not reimbursable.
 
“Beneficiaries of federal health care plans, including Medicare recipients and military families, should not be treated with devices that have been improperly altered,” said Acting U.S. Attorney for the Middle District of Florida A. Lee Bentley III.  “When companies promote such practices, resulting in the submission of health care claims that cannot legally be reimbursed, they will be made to pay by this office and the Department of Justice.”

“As with drugs, patients need assurance that medical devices are safe and effective,” said Inspector General of the U.S. Department of Health and Human Services Daniel R. Levinson.  “The government contends that Genzyme marketed an altered, untested device.  Taxpayers and patients deserve better.”
 
The allegations resolved by today’s settlement were originally raised in two lawsuits filed against Genzyme under the qui tam, or whistleblower, provisions of the False Claims Act, which allows private citizens with knowledge of false claims to bring civil actions on behalf of the government and to share in any recovery.  The whistleblowers, or relators’, share of the settlement has not been determined.

Assistant Attorney General Delery thanked the Office of Chief Counsel for the Food and Drug Administration, the U.S. Attorney’s Office for the Middle District of Florida, the Justice Department’s Commercial Litigation Branch, the Defense Health Agency, the Office of Personnel Management, the Department of Veterans Affairs and the Department of Health and Human Services Office of Inspector General for the collaboration that resulted in the settlement. 

This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by Attorney General Eric Holder and 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 claims settled by this agreement are allegations only, and there has been no determination of liability.  The two lawsuits are captioned United States ex rel. Fuentes, Russo v. Genzyme Corp., No. 09-cv-1245 (M.D. Fla.) and United States ex rel. Kelley v. Genzyme Corp., No. 10-cv-549 (M.D. Fla.).  

WASHINGTON – El Departamento de Justicia y la Oficina para la Protección Financiera del Consumidor [Consumer Financial Protection Bureau (CFPB)] anunciaron hoy el mayor acuerdo conciliatorio realizado por el gobierno federal en relación a alegatos de discriminación en el otorgamiento de préstamos para la compra de vehículos alegando que Ally Financial Inc. y Ally Bank, con sede en Detroit, exhibieron un patrón o práctica nacional de discriminación contra prestatarios afroestadounidenses, hispanos y asiáticos/isleños del Pacífico en sus préstamos de vehículos desde el 1° de abril de 2011. El acuerdo es la primera acción conjunta del departamento y la CFPB para hacer valer las leyes de otorgamiento justo de préstamos. Con este acuerdo, ocho de los 10 principales acuerdos conciliatorios asociados con el otorgamiento justo de préstamos en la historia del departamento se han producido bajo el liderazgo del Secretario de Justicia de los Estados Unidos Eric Holder.

El acuerdo dispone que se destinen 80 millones de dólares para indemnizar a víctimas de discriminación pasada por uno de los mayores prestamistas de crédito para vehículos y exige que Ally pague 18 millones de dólares al Fondo de Multas Civiles de la CFPB. Asimismo, Ally debe reembolsar los sobrecargos discriminatorios a prestatarios durante los próximos tres años, si no reduce significativamente las disparidades en incrementos injustificados de la tasa de interés. Este sistema creará un fuerte incentivo financiero para eliminar los sobrecargos discriminatorios.

"Con este acuerdo conciliatorio, el mayor logrado en un caso de discriminación en el otorgamiento de crédito para vehículos, estamos adoptando una postura firme contra la discriminación en un mercado crítico de préstamos ", señaló el Secretario de Justicia de los Estados Unidos Eric Holder. "Al exigir que Ally reembolse a los prestatarios a los que se les cobró demás debido a su raza u origen nacional, este acuerdo asegurará la reparación para los estadounidenses victimizados. Esto permitirá que el Departamento de Justicia y la CFPB trabajen estrechamente con Ally y otros para prevenir prácticas discriminatorias en el futuro. Y reforzará nuestra determinación de tener una respuesta enérgica a la discriminación en los mercados de préstamos de los Estados Unidos, donde sea que se produzca".

El acuerdo conciliatorio resuelve las alegaciones del departamento y la CFPB de que Ally discriminó al cobrarles tasas de interés más altas a alrededor de 235,000 prestatarios afroestadounidenses, hispanos y asiáticos/isleños del Pacífico que a los prestatarios blancos no hispanos. Las agencias alegan que Ally les cobró a prestatarios tasas de interés más altas debido a su raza u origen nacional, y no debido a la solvencia de los prestatarios u otros criterios objetivos relacionados con el riesgo que presentaban. La víctima media pagó entre 200 y 300 dólares más a lo largo de la vida del préstamo. La Ley de Igualdad de Oportunidades de Crédito [Equal Credit Opportunity Act (ECOA)] prohíbe la discriminación en todas las formas de préstamo, incluidos los préstamos para la compra de vehículos. El acuerdo conciliatorio de Ally con el Departamento de Justicia [Department of Justice (DOJ)] se presentó hoy en el Tribunal Federal de Distrito para el Distrito Este de Michigan en junto con la demanda del DOJ. Con respecto a la acción iniciada por la CFPB, Ally realizó un acuerdo conciliatorio administrativo público.

"La discriminación es un problema grave en todos los mercados de crédito de consumo", indicó el Director de la CFPB Richard Cordray. "Les estamos devolviendo 80 millones de dólares a consumidores trabajadores que pagaron más por sus automóviles o camionetas debido a su raza u origen nacional. Nos complacerá trabajar estrechamente con el Departamento de Justicia y Ally para asegurarnos que se tomen las medidas correspondientes para resolver este grave problema en los próximos años también".

En lugar de recibir solicitudes directamente de los consumidores, Ally otorga la mayoría de sus préstamos a través de 12,000 concesionarios de automóviles de todo el país que ayudan a sus clientes a pagar por sus vehículos nuevos o usados al presentar sus solicitudes de crédito a Ally. La práctica comercial de Ally, así como la de otras importantes sociedades de préstamos de vehículos, permiten que los concesionarios varíen la tasa de interés de un préstamo de la tasa inicialmente establecida por Ally según factores objetivos crediticios del prestatario. Los concesionarios reciben pagos más altos de Ally por préstamos que incluyan una tasa de interés más alta. Las investigaciones coordinadas por el departamento y la CFPB que precedieron al acuerdo conciliatorio de hoy determinaron que este sistema de determinación subjetiva y libre de los precios hace con que los prestatarios de Ally afroestadounidenses, hispanos y asiáticos/isleños del Pacífico acaben pagando más que los prestatarios blancos no hispanos calificados.

Las agencias alegan que Ally no controla adecuadamente que los incrementos de tasa de interés no se produzcan debido a la discriminación, ni exige que los concesionarios documenten sus decisiones de aumento de tasa de interés. La primera iniciativa por parte de Ally de controlar que no ocurra discriminación en los incrementos de la tasa de interés recién comenzó hace unos meses después de que se enteró de la determinación preliminar por parte de la CFPB de hechos de discriminación, y como resultado, solo dos concesionarios fueron sancionados y lo único que se les exigió fue la realización de capacitación voluntaria.

"Este acuerdo conciliatorio brinda reparación a las personas perjudicadas por esta discriminación", señaló la Fiscal Federal para el Distrito Este de Michigan Barbara McQuade. "Los prestamistas deben tener en cuenta la solvencia crediticia del prestatario individual basado en sus ingresos, ahorros, historial de crédito y otros factores objetivos al determinar los términos de un préstamo. Este acuerdo conciliatorio garantizará que, en el futuro, los prestatarios puedan obtener préstamos de Ally basado en su propio historial de crédito, libres de discriminación debido a su raza u origen nacional".

El acuerdo conciliatorio de hoy representa la primera resolución de la labor conjunta del departamento y la CFPB respecto de las prácticas discriminatorias en el otorgamiento de préstamos de vehículos. La Ley Dodd-Frank de 2010 le otorgó al DOJ y a la CFPB autoridad para tomar medidas contra bancos grandes como Ally por violaciones de la ECOA. Si bien el departamento presentó demandas anteriormente por violaciones de la ECOA asociadas a préstamos de vehículos, la de hoy es la primera demanda relacionada con la ECOA contra una sociedad de préstamos de vehículos con operaciones en todo el país.

Además de los 98 millones de dólares en pagos por su conducta en el pasado y la exigencia de reembolsar futuros cargos discriminatorios, el acuerdo conciliatorio exige que Ally mejore sus sistemas de control y cumplimiento. El acuerdo conciliatorio le permite a Ally probar diferentes medios de reducir la discriminación y exige que informe al departamento y a la CFPB periódicamente los resultados de sus iniciativas y que discuta posibles maneras de mejorar los resultados. El departamento considera encomiable la cooperación de Ally para alcanzar una resolución adecuada para este caso. El departamento ve con agrado el compromiso de Ally, como parte del acuerdo conciliatorio, de trabajar con la División de Derechos Civiles y la CFPB en encontrar mejores maneras de cobrarles a todos los consumidores de manera justa, sin dejar de recompensar de forma justa a los concesionarios de vehículos por los servicios que brindan.

La Unidad de Préstamos Justos de la Sección de Vivienda y Cumplimiento de la Ley Civil de la División de Derechos Civiles es responsable, en el departamento, de hacer valer las leyes de otorgamiento justo de préstamos. Desde su fundación en febrero de 2010, la Unidad de Préstamos Justos ha iniciado o resuelto 30 casos asociados con préstamos bajo la Ley de Vivienda Justa [Fair Housing Act], ECOA y la Ley de Amparo Civil para Militares [Servicemembers Civil Relief Act]. Los acuerdos conciliatorios logrados en estos casos consistieron en casi 775 millones de dólares en indemnizaciones a comunidades afectadas y más de 535,000 prestatarios individuales. Los informes anuales del Secretario de Justicia de EE.UU. al Congreso bajo ECOA destacan los logros del Departamento en el otorgamiento de préstamos justos y están disponibles en www.justice.gov/crt/publications.

El acuerdo conciliatorio propuesto dispone que un administrador independiente ubique a las víctimas y distribuya los pagos indemnizatorios sin ningún costo a los prestatarios identificados por el departamento y la CFPB como víctimas de la discriminación por parte de Ally. El departamento y la CFPB realizarán un anuncio público y publicarán información en sus portales en Internet cuando existan más detalles disponibles sobre el proceso de indemnización. Los prestatarios elegibles para indemnización debido al acuerdo conciliatorio serán contactados por el administrador y no necesitan comunicarse con el departamento o la CFPB en este momento. Las personas con preguntas sobre préstamos de vehículos o que deseen presentar una queja pueden comunicarse con la CFPB llamando al (855) 411-2372.

La División de Derechos Civiles, la Fiscalía Federal para el Distrito Este de Michigan y la CFPB son miembros de la Fuerza de Tarea de Coacción contra el Fraude Financiero. El Presidente Obama estableció la Fuerza de Tarea Interagencial para llevar a cabo una iniciativa enérgica, coordinada y proactiva para investigar y enjuiciar los delitos financieros. La fuerza de tarea incluye a representantes de una amplia gama de dependencias federales, autoridades reguladoras, inspectores generales y miembros de las fuerzas del orden público estatales y locales, quienes, trabajando unidos, aportan un poderoso espectro de recursos de coacción penal y civil. La fuerza de tarea está trabajando para mejorar la labor en todo el poder ejecutivo federal, y con asociados estatales y locales, para investigar y enjuiciar los delitos financieros importantes, asegurar un castigo justo y eficaz para quienes cometan delitos financieros, combatir la discriminación en los mercados de préstamos y financieros, y recuperar fondos para las víctimas de delitos financieros. Para obtener más información sobre la fuerza de tarea, visite www.StopFraud.gov.

A retired colonel and a sergeant in the Army National Guard have been charged in a nine-count indictment in Albuquerque, N.M., for allegedly defrauding the National Guard Bureau and its contractor of approximately $12,000 by fraudulently obtaining recruiting bonuses, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division.

Retired Colonel Isaac Alvarado, 74, of Albuquerque, N.M. was charged with one count of conspiracy to commit wire fraud, four counts of wire fraud and four counts of aggravated identity theft in an indictment that was filed this week in the U.S. District Court for the District of New Mexico. Sergeant First Class Travis Nau, 40, also of Albuquerque, N.M., was charged with one count of conspiracy to commit wire fraud, three counts of wire fraud and three counts of aggravated identity theft.

According to court documents, in approximately September 2005, the National Guard Bureau entered into a contract with Document and Packaging Broker Inc. to administer the Guard Recruiting Assistance Program (G-RAP). The G-RAP was a recruiting program that was designed to offer monetary incentives to soldiers of the Army National Guard who referred others to join the Army National Guard. Through this program, a participating soldier could receive bonus payments for referring another individual to join. 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. The rules prohibited Army National Guard recruiters from participating in the G-RAP.

According to court documents, between approximately November 2007 and February 2012, Alvarado participated as a recruiting assistant in the G-RAP. Nau, who worked in a recruiting office and is Alvarado’s son-in-law, allegedly provided Alvarado with the names and Social Security numbers of potential soldiers. This enabled Alvarado to claim that he was responsible for referring these potential soldiers to join the military, when in fact he did not recruit any of them. In addition, Nau advised at least two potential soldiers to falsely report that Alvarado had assisted in their recruitment even though he had not. As a result, Alvarado allegedly received a total of approximately $12,000 in fraudulent recruiting bonuses.

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

If convicted, the defendants face up to five years in prison on the conspiracy count. Each wire fraud count carries a maximum penalty of 20 years in prison. Each count of aggravated identity theft carries a mandatory two-year sentence in prison. Each charged count carries a maximum fine of up to $250,000, or twice the gross gain.

The case is being investigated by special agents from the Fort Bliss Army Criminal Investigation Command. The case is being prosecuted by Trial Attorneys Sean F. Mulryne, Mark J. Cipolletti and Heidi Boutros Gesch of the Criminal Division’s Public Integrity Section.

A subsidiary of Archer Daniels Midland Company (ADM) pleaded guilty today and has agreed to pay more than $17 million in criminal fines to resolve charges that it paid bribes through vendors to Ukrainian government officials to obtain value-added tax (VAT) refunds, in violation of the Foreign Corrupt Practices Act (FCPA).

Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney James A. Lewis of the Central District of Illinois and Special Agent in Charge David A. Ford of the FBI’s Springfield Division made the announcement.

“As today’s guilty plea shows, paying bribes to reap business benefits corrupts markets and undermines the rule of law,” said Acting Assistant Attorney General Raman.  “ADM’s subsidiaries sought to gain a tax benefit by bribing government officials, and then attempted to deliberately conceal their conduct by funneling payments through local vendors.  ADM, in turn, failed to implement sufficient policies and procedures to prevent the bribe payments, although ultimately ADM disclosed the conduct, cooperated with the government, and instituted extensive remedial efforts.  Today’s corporate guilty plea demonstrates that combating bribery is and will remain a mainstay of the Criminal Division’s mission.  We are committed to working closely with our foreign and domestic law enforcement partners to fight global corruption.”

Alfred C. Toepfer International Ukraine Ltd. (ACTI Ukraine), a subsidiary of ADM, pleaded guilty in the Central District of Illinois to one count of conspiracy to violate the anti-bribery provisions of the FCPA and agreed to pay $17.8 million in criminal fines. The Department of Justice also entered into a non-prosecution agreement (NPA) with ADM in connection with the company’s failure to implement an adequate system of internal financial controls to address the making of improper payments both in Ukraine and by an ADM joint venture in Venezuela.

In a parallel action, ADM consented with the U.S. Securities and Exchange Commission (SEC) to a proposed final judgment that orders the company to pay roughly $36.5 million in disgorgement and prejudgment interest, bringing the total amount of U.S. criminal and regulatory penalties to be paid by ADM and its subsidiary to more than $54 million.

According to the charges, from 2002 to 2008, ACTI Ukraine, a trader and seller of commodities based in the Ukraine, together with Alfred C. Toepfer International G.m.b.H. (ACTI Hamburg), another subsidiary of ADM, paid third-party vendors to pass on bribes to Ukrainian government officials to obtain VAT refunds. The charges allege that, in total, ACTI Ukraine and ACTI Hamburg paid roughly $22 million to two vendors, nearly all of which was to be passed on to Ukrainian government officials to obtain over $100 million in VAT refunds, resulting in a benefit to ACTI Ukraine and ACTI Hamburg of roughly $41 million.

According to the NPA with ADM, a number of concerns were expressed to ADM executives, including an e-mail calling into question potentially illegal “donations” by ACTI Ukraine and ACTI Hamburg to recover the VAT refunds, yet nonetheless failed to implement sufficient anti-bribery compliance policies and procedures to prevent corrupt payments.

In addition to the monetary penalty, ADM and ACTI Ukraine also agreed to cooperate with the department, to periodically report the companies’ compliance efforts, and to continue implementing enhanced compliance programs and internal controls designed to prevent and detect FCPA violations.

The agreements acknowledge ADM’s timely, voluntary and thorough disclosure of the conduct; ADM’s extensive cooperation with the department, including conducting a world-wide risk assessment and corresponding global internal investigation, making numerous presentations to the department on the status and findings of the internal investigation, voluntarily making current and former employees available for interviews, and compiling relevant documents by category for the department; and ADM’s early and extensive remedial efforts.

The department acknowledges and expresses its appreciation for the cooperation and assistance of German law enforcement authorities, which, in a parallel investigation, reached a resolution with ACTI Hamburg regarding its role in the bribery scheme.

In addition, the department acknowledges and expresses its appreciation for the significant assistance provided by the SEC’s Division of Enforcement.

This ongoing investigation is being conducted by the FBI. The case is being prosecuted by Trial Attorney Daniel S. Kahn of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Eugene Miller of the Central District of Illinois, with significant assistance from the Criminal Division’s Office of International Affairs.

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

A woman from Trinidad and Tobago was sentenced today to serve 20 years in prison for her role in the 2005 kidnapping of naturalized U.S. citizen Balram “Balo” Maharaj, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and Special Agent in Charge Michael B. Steinbach of the FBI’s Miami Field Office.

Doreen Alexander, 47, of Arima, Trinidad and Tobago, was sentenced by U.S. District Judge Emmet G. Sullivan in the District of Columbia. Alexander pleaded guilty on Oct. 3, 2013, to conspiracy to commit hostage taking, a lesser included offense under count one of the indictment, which charged conspiracy to commit hostage taking that resulted in death. Judge Sullivan also sentenced Alexander to serve five years of supervised release to follow her prison term.

Alexander was the last charged co-conspirator involved in the kidnapping of Maharaj, Alexander’s former boyfriend and the father of one of her sons.  The other 12 co-conspirators were previously extradited and prosecuted by the U.S. Attorney’s Office for the District of Columbia.

According to court documents, Alexander initiated the April 2005 kidnapping of Maharaj and provided information that allowed the kidnappers to identify, locate and track Maharaj.  Alexander alerted the kidnappers to Maharaj’s visits to Trinidad and Tobago; gave them information on his wealth, which was used to calculate the ransom; and reassured the kidnappers that they had the right man after the ransom negotiations went awry. Maharaj died as a result of the kidnapping.

The case was investigated by the FBI’s Miami Division Extraterritorial Squad with the assistance of the Criminal Division’s Office of International Affairs and the FBI’s Legal Attache’s Office in Port of Spain, Trinidad and Tobago. Special assistance was further provided by the Trinidad & Tobago Police Service Anti-Kidnapping Squad and Homicide Bureau.

The case is being prosecuted by Senior Trial Attorneys Matthew C. Singer and Teresa A. Wallbaum of the Criminal Division’s Human Rights and Special Prosecutions Section. 

Cardiologist Dr. Elie H. Korban will pay $1.15 million to resolve False Claims Act allegations that he billed Medicare and Medicaid for medically unnecessary cardiac stent placements, the Justice Department announced today.  Korban owns Delta Clinic, with offices in Jackson, Tenn., and Lexington, Tenn., and has privileges at Jackson-Madison County General Hospital and Regional Hospital of Jackson, both in Jackson, Tenn.

 
“ Billing Medicare for cardiac procedures that are not necessary or appropriate contributes to the soaring costs of health care and can harm patients ,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery.  “ Protecting public funds and safeguarding Medicare beneficiaries continues to be a Department of Justice priority .”

Cardiac stents are mesh tubes placed in coronary arteries of patients to keep their arteries open during the treatment of coronary heart disease.  The government contends that, from January 1, 2005, through December 31, 2008, Korban placed cardiac stents in Medicare and Medicaid patients when the stents were not medically necessary .  The government also claims that Korban improperly billed Medicare for work performed by substitute doctors when he was available to perform the services himself. 

 
“This case is one of many that underscores our commitment to holding accountable those who would cheat the health care system for their own personal profit,” said U.S. Attorney for the Western District of Tennessee Edward L. Stanton III.  “We will continue to vigorously protect citizens from schemes that damage the ability of health care providers and patients to participate in a system free of false claims and dishonesty.”

 
As part of the settlement, Korban entered into an Integrity Agreement with the Department of Health and Human Services Office of Inspector General intended to deter wrongful conduct in the future.  The agreement requires enhanced accountability and monitoring activities to be conducted by both internal and independent external reviewers. 

“Too many recent frauds involve medically unnecessary heart stents,” said Derrick L. Jackson, Special Agent in Charge at the U.S. Department of Health and Human Services Office of Inspector General region including Tennessee.  “Providers are warned that they can be aggressively investigated and held accountable for falsely billing federal health programs.”

Assistant Attorney General Delery thanked the Department of Health and Human Services Office of Inspector General, the Tennessee Bureau of Investigation, the U.S. Attorney’s Office for the Western District of Tennessee and the Commercial Litigation Branch of the Justice Department’s Civil Division for the collaboration that resulted in the settlement. 

The allegations resolved by the settlement were first raised in a lawsuit filed against Korban under the qui tam, or whistleblower, provisions of the False Claims Act.  The Act allows private citizens with knowledge of fraud to bring civil actions on behalf of the government and to share in any recovery.  As part of the settlement, the whistleblower, Dr. Wood M. Deming, will receive a share of the settlement amount.  Deming’s share has not been determined. 

 
This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by Attorney General Eric Holder and 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 is captioned United States ex rel. Wood M. Deming  v. Jackson-Madison County General Hosp., et al., Case No. 07-1116-BBD (W.D. Tenn.).  The claims settled by this agreement are allegations only, and there has been no determination of liability.  

Zhifei Li, the owner of an antique business in China, pleaded guilty today to being the organizer of an illegal wildlife smuggling conspiracy in which 30 rhinoceros horns and numerous objects made from rhino horn and elephant ivory worth more than $4.5 million were smuggled from the United States to China.

The guilty plea was announced by Robert G. Dreher, the Acting Assistant Attorney General for the Environment and Natural Resources Division of the Department of Justice, Paul J. Fishman, U.S. Attorney for the District of New Jersey, Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida, and Dan Ashe, Director of the U.S. Fish and Wildlife Service (USFWS).

Li, 29, of Shandong, China, the owner of Overseas Treasure Finding in Shandong, pleaded guilty today before U.S. District Judge Esther Salas in Newark, N.J., to a total of 11 counts: one count of conspiracy to smuggle and violate the Lacey Act; seven counts of smuggling; one count of illegal wildlife trafficking in violation of the Lacey Act; and two counts of making false wildlife documents.

Li was arrested in Florida in January 2013 on federal charges brought under seal in New Jersey and shortly after arriving in the country. Before he was arrested, he purchased two endangered black rhinoceros horns from an undercover USFWS agent in a Miami Beach hotel room for $59,000 while attending an antique show. Li was arrested as part of “Operation Crash” – a nationwide effort led by the USFWS and the Justice Department to investigate and prosecute those involved in the black market trade of rhinoceros horns and other protected species.

In papers filed in Newark federal court, Li admitted that he was the “boss” of three antique dealers in the United States whom he paid to help obtain wildlife items and smuggle them to him via Hong Kong. One of those individuals was Qiang Wang, aka “Jeffrey Wang,” who was sentenced to serve 37 months in prison on Dec. 5, 2013, in the Southern District of New York . Li played a leadership and organizational role in the smuggling conspiracy by arranging for financing to pay for the wildlife, purchasing and negotiating the price, directing how to smuggle the items out of the United States and obtaining the assistance of additional collaborators in Hong Kong to receive the smuggled goods and then smuggle them to him in mainland China.

“The take-down of the Li smuggling ring is an important development in our effort to enforce wildlife protection laws,” said Acting Assistant Attorney General Dreher for the Justice Department’s Environment and Natural Resources Division. “Rhino horn can sell for more than gold and is just as rare, but rhino horn and elephant ivory are more than mere commodities. Each illegally traded horn or tusk represents a dead animal, poaching, bribery, smuggling and organized crime.  The Justice Department will continue to vigorously enforce the law designed to protect wildlife. This is a continuing investigation."

“The brutality of animal poaching, wherever it occurs, feeds the demand of a multibillion-dollar illegal international market,” said U.S. Attorney Fishman. “As a major hub of international commerce through our ports and busy airport, the District of New Jersey plays an important role in curbing the escalation of this devastating trade. Zhifei Li’s conviction is a warning to those who would be lured by the profits of dealing in cruelty.”

“The illegal trade in rhino horn has devastated the wild population of these magnificent animals, with the real possibility emerging that all sub-species will be extinct in the wild within our lifetimes,” said U.S. Attorney Ferrer. “Additionally, the poaching activities have cost the lives of enforcement rangers and wardens as the traffickers have resorted to greater levels of violence to feed the black market. This case reflects the seriousness with which we regard these activities and our commitment to work collectively to quash the conduct and hold the law-breakers accountable.”

“The staggering prices paid for rhino horn by criminals like Zhifei Li and his accomplices ensure that unscrupulous poachers continue to slaughter these animals, and it’s our hope that his conviction serves as a warning to other traffickers of the severe consequences they face,” said Fish and Wildlife Service Director Ashe. “The unparalleled greed of criminal trafficking rings like Li’s fuel the poaching epidemic that is decimating rhinoceros populations in the wild. Regardless of whether the horns he smuggled were sawed off the corpse of a rhino last year or a decade ago, each one represents the death of one of the world’s most endangered animals.”

Rhinoceros are a 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 (known as 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.

In pleading guilty, Li admitted that he sold 30 smuggled, raw rhinoceros horns worth approximately $3 million – approximately $17,500 per pound – to factories in China where raw rhinoceros horns are carved into fake antiques known as Zuo Jiu (which means “to make it as old” in Mandarin). In China, there is a centuries-old tradition of drinking from an intricately carved “libation cup” made from a rhinoceros horn. Owning or drinking from such a cup is believed by some to bring good health, and true antiques are highly prized by collectors.  The escalating value of such items has resulted in an increased demand for rhinoceros horn that has helped fuel a thriving black market, including recently carved fake antiques.

According to the charges, plea agreement and a detailed joint factual statement filed in in Newark federal court , the investigation of Li began in November 2011, after a confidential informant sold two raw rhino horns to a middleman at the Vince Lombardi rest stop on the New Jersey Turnpike in an Operation Crash undercover sale. These government-supplied rhino horns were, in turn, sold to a Long Island City antiques dealer who was working for Li.

At Li’s direction, raw rhino horns were hidden by wrapping them in duct tape, hiding them in porcelain vases and falsely describing them on customs and shipping documents, including by labeling them as porcelain vases or handicrafts.

Li purchased 25 raw rhino horns, including 13 endangered black rhinoceros horns weighing approximately 151 pounds, through connections in New York and New Jersey, and another five raw rhino horns weighing at least 20 pounds through an accomplice in Dallas.

Li sold whole rhino horns to factories where they would be carved into fake antiques. The leftover pieces from the carving process were sold for alleged “medicinal” purposes even though rhino horn is made of compressed keratin, the same material in human hair and nails and has no proven medical efficacy.

Between 2011 and 2013, Li purchased approximately 60 carved ivory items from U.S. auction houses with an approximate market value of $500,000, all of which were smuggled to China at Li’s direction.

Before arriving in Miami, Li sent a text message to the Long Island City antiques dealer saying that he had as much as $500,000 to spend in the U.S. on antiques and rhino horn. When purchasing two rhino horns from an undercover USFWS agent at a Miami Beach hotel, Li told the covert agent that he was interested in buying more rhino horns regardless of quality, as much as the agent could find, and inquired if the horns could be shipped directly to Hong Kong.

In April 2012, after a Dallas-based accomplice purchased a large, eight-pound raw rhino horn for Li in Florida worth more than $140,000, Li sent the dealer an email directing him to cut the horn into two pieces, wrap them in electrical tape, and send them to Hong Kong in separate packages. The email included a photo of the rhino horn with a red line drawn though it indicating where the lengthy horn should be cut.

After Li’s conspirator in Long Island City purchased two raw elephant tusks for Li weighing more than 100 lbs, Li sent instructions by email that the shipper should declare the contents as “automobile parts” and not use the word “tusk” on the shipping documents.

Li smuggled libation cups carved from rhinoceros horns from the U.S. to Hong Kong. Rhino carvings valued as much as $242,500 were sold to Li’s customers in China. In early 2013, one of those customers, Shusen Wei, pleaded guilty in the Southern District of Florida to knowingly buying a smuggled rhino carving from Li.

The plea agreement requires Li to forfeit $3.5 million in proceeds of his criminal activity as well as several Asian artifacts. Also, various ivory objects seized by the USFWS as part of the investigation will be surrendered. The maximum potential penalty is 10 years for each of the smuggling counts and five years for each of the other offenses, as well as a $250,000 fine per count, or twice the gross gain or loss from the offense. Sentencing before Judge Salas has been scheduled.

The investigation is continuing and is being handled by the U.S. Fish & Wildlife Service’s Office of Law Enforcement, the U.S. Attorney’s Office for the District of New Jersey, the U.S. Attorney’s Office for the Southern District of Florida and the Justice Department’s Environmental Crimes Section. The government is represented by Assistant U.S. Attorneys Kathleen P. O’Leary and Barbara Ward of the New Jersey U.S. Attorney’s Office Criminal Division and Asset Forfeiture and Money Laundering Unit, Assistant U.S. Attorney Thomas Watts-FitzGerald of the U.S. Attorney’s Office for the Southern District of Florida and Senior Counsel Richard A. Udell of the Justice Department’s Environmental Crimes Section of the Environment and Natural Resources Division.

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Terrance Anderson, aka Scooby, has been sentenced to federal prison on charges of sex trafficking of a minor and two counts of transporting adults in interstate commerce for prostitution. Anderson, 42, of Ellenwood, Ga., was sentenced by U.S. District Judge Thomas W. Thrash to serve 25 years in prison to be followed by seven years supervised release. Anderson was ordered to pay restitution to three victims totaling $154,500. Anderson pleaded guilty to the charges on July 19, 2013.

 
“This sentence makes clear that those who prey upon women and girls and coerce them into prostitution will be punished severely,” said Acting Assistant Attorney General Jocelyn Samuels for the Civil Rights Division. “The Department of Justice will continue to devote its full efforts to investigating and prosecuting those who commit such heinous crimes.”

 
“This defendant chose to earn a living exploiting minors, even continuing to do so after previously serving a federal sentence for sex trafficking-related conduct,” said U.S. Attorney Sally Quillian Yates of the Northern District of Georgia. “Our office will remain vigilant in our efforts to prosecute those who exploit children and young women in this district.”

"Today's sentencing removes a dangerous individual from our streets who has repeatedly shown a callous disregard for the basic human rights of others,” said Acting Special Agent in Charge Ricky Maxwell for the Federal Bureau of Investigation (FBI) Atlanta Field Office. “Human trafficking and child exploitation cases such as this reaffirm the FBI's mission as we work to protect and help those that may not be able to help themselves."

According to U.S. Attorney Yates, the charges and other information presented in court, from February 2008 through December 2011, Anderson ran a prostitution ring in which he advertised the sexual services of a minor and young women on the internet, including K.B., T.B., A.C. and other victims. He advertised on sites such as Backpage, Craig’s List and Eros, as well as his own website, Rentsomethingsexy.com. Anderson caused K.B., a 17-year-old girl, to engage in commercial sex acts in multiple states, requiring her to earn $1,000 a day, work seven days-a-week and give all of her earnings to him. Anderson also transported 18-year-old T.B. and 24-year-old A.C. from Georgia to Virginia, where he required the young women to perform numerous commercial sex acts for his financial gain.

Anderson previously pleaded guilty in August 2001 to using a cell phone, which is a facility of interstate commerce, to cause a juvenile to engage in prostitution and to being a felon in possession of a firearm. He received a sentence of seven years in federal prison after providing information to federal investigators about other sex trafficking crimes and testifying at the trial of two other human traffickers. However, Anderson resumed his sex trafficking activities after completing his prison sentence.

This case was investigated by Special Agents of the FBI. If anyone has any information about human trafficking, they are encouraged to report the information to the FBI at 404-679-9000.

Assistant U.S. Attorney Susan Coppedge of the Northern District of Georgia and Deputy Chief Karima Maloney of the Civil Rights Division prosecuted the case.

For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the home page for the U.S. Attorney’s Office for the Northern District of Georgia Atlanta Division is http://www.justice.gov/usao/gan/.

Today President Barack Obama granted clemency to 21 individuals, consisting of eight commutations and 13 pardons.

The President granted commutations to the following eight individuals:

• Clarence Aaron - Mobile, Ala.
  Offense: Conspiracy to possess with intent to distribute cocaine and cocaine base; possession with intent to distribute cocaine; attempt to possess cocaine with intent to distribute (Southern District of Alabama)
  Sentence:  Life imprisonment, five years' supervised release (Dec. 10, 1993)
  Commutation Grant: Prison sentence commuted to expire on April 17, 2014 
• Stephanie Yvette George - Pensacola, Fla.
  Offense: Conspiracy to possess cocaine base with intent to distribute (Northern District of Florida)
  Sentence:  Life imprisonment, ten years' supervised release (May 5, 1997)
  Commutation Grant: Prison sentence commuted to expire on April 17, 2014 
• Ezell Gilbert - Tampa, Fla.
  Offense: Possession with intent to deliver cocaine base; possession with intent to distribute marijuana (Middle District of Florida)
  Sentence:  292 months' imprisonment, five years' supervised release (Mar. 25, 1997)
  Commutation Grant: Prison sentence commuted to time already served 
• Helen R. Alexander Gray - Ty Ty, Ga.
  Offense: Conspiracy to possess with intent to distribute cocaine base; possession with intent to distribute cocaine base; possession of a firearm by a convicted felon (Middle District of Georgia)
  Sentence:  240 months' imprisonment; 10 years’ supervised release (Oct. 8, 1996)
  Commutation Grant: Prison sentence commuted to expire on April 17, 2014 
• Jason Hernandez - McKinney, Tex.
  Offense: Conspiracy to possess with intent to distribute controlled substances; possession with intent to distribute cocaine base; possession with intent to distribute methamphetamine; possession with intent to distribute a mixture of methamphetamine and cocaine hydrochloride; distribution of a controlled substance within 1,000 feet of a protected property; establishing a place for manufacture and distribution of controlled substances (Eastern District of Texas)
  Sentence:  Life imprisonment; eight years' supervised release; $5,000 fine (Oct. 2, 1998)
  Commutation Grant: Prison sentence commuted to 240 months (20 years) 
• Ricky Eugene Patterson - Fort Pierce, Fla.
  Offense: Conspiracy to possess with intent to distribute cocaine base; possession with intent to distribute cocaine base (Southern District of Florida)
  Sentence: Life imprisonment, 10 years’ supervised release (Aug. 3, 1995)
  Commutation Grant: Prison sentence commuted to expire on April 17, 2014 
• Billy Ray Wheelock - Belton, Tex.
  Offense: Conspiracy to distribute more than 50 grams of crack cocaine; possession with intent to distribute more than 5 grams of crack cocaine within 1,000 feet of a school; possession with intent to distribute crack cocaine; aiding and abetting possession with intent to distribute and distributing more than 5 grams of crack cocaine within 1,000 feet of a school (Western District of Texas)
  Sentence: Life imprisonment, 10 years' supervised release, $3,000 fine (Jun. 9, 1993)
  Commutation Grant: Prison sentence commuted to expire on April 17, 2014 
• Reynolds Allen Wintersmith, Jr. - Rockford, Ill.
  Offense: Conspiracy to possess with intent to distribute and distribute cocaine and cocaine base; possession with intent to distribute cocaine base (Northern District of Illinois)
  Sentence: Life imprisonment, five years' supervised release, $1,000 fine (Nov. 23, 1994)
  Commutation Grant: Prison sentence commuted to expire on April 17, 2014 

The President granted pardons to the following thirteen individuals:

• William Ricardo Alvarez - Marietta, Ga.
  Offense: Conspiracy to possess with intent to distribute heroin ; conspiracy to import heroin (District of Puerto Rico)
  Sentence:  Time served after service of nine months' imprisonment, four years' supervised release (Apr. 30, 1997; amended Jul. 31, 1997) 
• Charlie Lee Davis, Jr . - Wetumpka, Ala.
  Offense: Possession with intent to distribute and distribution of cocaine base; use of a minor to distribute cocaine base (Middle District of Alabama)
  Sentence: 87 months' imprisonment, five years' supervised release (Mar. 21, 1995) 
• Ronald Eugene Greenwood - Crane, Mo.
  Offense: Conspiracy to violate the Clean Water Act  (District of South Dakota)
  Sentence: Three years' probation, conditioned on six months' home confinement and 100 hours’ community service, $5,000 restitution, $1,000 fine (Nov. 18, 1996) 
• Little Joe Hatch , aka Joe Hatch Sr. - Lake Placid, Fla.
  Offense: Possession with intent to distribute marijuana  (Southern District of Florida)
  Sentence: 60 months' imprisonment, four years' supervised release (May 15, 1990) 
• Martin Alan Hatcher . - Foley, Ala.
  Offense: Distribution and possession with intent to distribute marijuana (Southern District of Alabama)
  Sentence: Five years' probation (Nov. 9, 1992) 
• Derek James Laliberte - Auburn, Me.
  Offense: Money laundering (District of Maine)
  Sentence: 18 months imprisonment, 2 years' supervised release (Oct. 2, 1992, as amended May 21, 1993) 
• Alfred J. Mack - Manassas, Va.
  Offense: Unlawful distribution of heroin  (District of Columbia Superior Court)
  Sentence: 18 to 54 months' imprisonment (Apr. 5, 1982) 
• Robert Andrew Schindler - Goshen, Va.
  Offense: Conspiracy to commit wire fraud; conspiracy to commit mail and wire fraud (District of Utah)
  Sentence: Three years' probation conditioned on four months' home confinement, $10,000 restitution (May 14, 1996) 
• Willie Shaw, Jr. - Myrtle Beach, S.C.
  Offense: Armed bank robbery (District of South Carolina)
  Sentence: Fifteen years' imprisonment (Aug. 7, 1974) 
• Kimberly Lynn Stout , formerly known as Kimberly Lynn Cooley - Bassett, Va.
  Offense: Bank embezzlement; false entries in the books of a lending institution (Western District of Virginia)
  Sentence: One day of imprisonment, three years' supervised release, conditioned on five months’ home detention) (Nov. 9, 1993) 
• Bernard Anthony Sutton, Jr. - Norfolk, Va.
  Offense: Theft of personal property (Eastern District of Virginia)
  Sentence: Three years' probation, $825 restitution, $500 fine (Apr. 4, 1989) 
• Chris DeAnn Switzer , formerly known as Chris DeAnn Rasco - Omaha, Neb.
  Offense: Conspiracy to violate narcotics laws (methamphetamine) (District of Nebraska)
  Sentence: Four years' probation, conditioned on six months’ home confinement and 200 hours' community service (Jun. 25, 1996) 
• Miles Thomas Wilson - Williamsburg, Ohio.
  Offense: Mail fraud (Southern District of Ohio)
  Sentence: Three years’ probation (Jul. 15, 1981)

The Justice Department announced today that the United States and a coalition of mental health advocacy organizations have entered into a comprehensive settlement agreement with the state of New Hampshire that will transform New Hampshire’s mental health system by significantly expanding and enhancing mental health service capacity in integrated community settings.

The settlement agreement will provide people with serious mental illness in New Hampshire with robust community alternatives that will reduce or eliminate the need for hospitalization. Individuals who receive expanded services in New Hampshire will have fewer visits to emergency rooms and will avoid unnecessary institutionalization at state mental health facilities, including New Hampshire Hospital and the Glencliff Home.

“Today’s agreement realizes the promise of the Americans with Disabilities Act for people with serious mental illness in New Hampshire,” said Acting Assistant Attorney General Jocelyn Samuels for the Civil Rights Division. “It will better ensure that effective community services will get to the people most in need when and where they need services – in their homes and communities. These services will help people with mental illness avoid and respond to crises without escalating them and without giving up their important connections to their communities. This agreement is also a testament to the vision and leadership of Governor Maggie Hassan and Attorney General Joe Foster.”

“The settlement of this landmark federal civil rights lawsuit marks a major step forward in New Hampshire’s treatment of one of its most vulnerable populations – those who suffer from mental illness,” said U.S. Attorney John P. Kacavas for the District of New Hampshire. “I commend the progressive leadership of Governor Hassan and New Hampshire Attorney General Joe Foster and their respective staffs, without whose efforts and will this achievement would not have been possible.”

The agreement requires the state to create and expand services over the next six years. The state will: create new mobile crisis teams and new community crisis apartments in Manchester, Concord and Nashua; expand and enhance Assertive Community Treatment team services, which will provide state-wide coverage for at least 1,500 people; add hundreds of new supported housing units and work to create community alternatives for people with complex health care needs; and expand effective supported employment services for hundreds of people. An independent expert reviewer will evaluate the state’s compliance with the agreement and will issue public reports on the state’s ongoing implementation efforts.

The settlement resolves outstanding issues in a 2012 federal class action lawsuit brought under the Americans with Disabilities Act (ADA) – Amanda D. v. Hassan; United States v. New Hampshire. The ADA and the Supreme Court’s landmark decision in Olmstead v. L.C. affords individuals with disabilities the right to receive services in the most integrated setting appropriate to their needs, and today’s agreement will help ensure that adults with serious mental illness in New Hampshire can exercise that right.

 
In recent years, the Justice Department’s Civil Rights Division has entered into a number of statewide ADA/Olmstead settlements, including comprehensive agreements with Georgia, Delaware, Virginia, North Carolina, and now New Hampshire, that give thousands of persons with disabilities new and meaningful opportunities to live in and be active members of their communities – outside of segregated institutional settings.  Visit www.ada.gov/olmstead to learn more about these settlement agreements, the Olmstead decision, the ADA, and other laws enforced by the Civil Rights Division.

The parties’ proposed class action settlement agreement must still be approved by U.S. District Court Judge Steven J. McAuliffe, who is presiding over the lawsuit. In September 2013, the Court certified a class of plaintiffs that includes all persons with serious mental illness who are unnecessarily institutionalized in NHH or Glencliff or who are at serious risk of unnecessary institutionalization in these facilities. The parties have proposed that appropriate notice of the settlement be provided to class members, that they be able to submit concerns or comments to the proposed settlement by the end of January 2014, and that the Court schedule a fairness hearing on or after Feb. 17, 2014.

The New Hampshire settlement agreement was realized due to the efforts of the following attorneys in the Special Litigation Section: Deputy Chief Judy C. Preston and Trial Attorneys Richard J. Farano, Deena S. Fox, Katherine V. Houston and Alexandra L. Shandell. In addition, the Civil Rights Division received ongoing support and assistance from Assistant U.S. Attorney John J. Farley for the District of New Hampshire.

The Justice Department announced today that Fort Davis State Bank, based in Fort Davis, Texas, will implement uniform pricing policies, conduct employee training and pay $159,000 as part of a settlement to resolve allegations that it engaged in a pattern or practice of discrimination on the basis of national origin.

The settlement, which is subject to court approval, was filed in conjunction with the department’s complaint in the U.S. District Court for the Western District of Texas.  The complaint alleges that Fort Davis State Bank violated the Equal Credit Opportunity Act (ECOA) by charging higher prices for unsecured consumer loans to Hispanic borrowers than to similarly qualified non-Hispanic borrowers. 

 
Fort Davis State Bank is a community bank with three branches that for many years has been a significant presence in the local Hispanic community. 

 
“This settlement ensures that Hispanic borrowers who paid more for their loans will be properly compensated,” said Acting Assistant Attorney General Jocelyn Samuels for the department’s Civil Rights Division.  “We commend Fort Davis State Bank’s commitment to meeting the special lending needs of all individuals within its community on an equal basis and to working cooperatively with the Justice Department in reaching an appropriate resolution of this case.”

The lawsuit originated from a 2011 referral to the Department by the Federal Deposit Insurance Corporation (FDIC).  Fort Davis State Bank is regulated by the FDIC.

 
The proceeds of the settlement will be used to compensate Hispanic victims of Fort Davis State Bank’s alleged discrimination.  Under the proposed settlement, a list of individual victims will be identified by the United States and receive notification of eligibility from the bank, and the department will monitor the compensation process. 

Prior to the settlement, Fort Davis State Bank implemented uniform pricing policies that substantially reduced the discretion of its loan officers to vary a loan’s interest rate from the price it set based on borrower’s objective credit-related factors.  Today’s settlement requires Fort Davis State Bank to keep its improved policies in place for at least the next three years, as well as to continue to monitor its lending for signs of discrimination and provide monitoring reports to the United States.

The department’s enforcement of fair lending laws is conducted by the Fair Lending Unit of the Housing and Civil Enforcement Section in the Civil Rights Division.  Since the Fair Lending Unit was established in February 2010, it has filed or resolved 29 lending matters under the Fair Housing Act, ECOA and the Servicemembers Civil Relief Act.  The settlements in these matters provide for nearly $700 million in monetary relief for impacted communities and individual borrowers.  The Attorney General’s annual reports to Congress subject to ECOA highlight the department’s accomplishments in fair lending and are available at www.justice.gov/crt/publications .

The Civil Rights Division and the FDIC are members of the Financial Fraud Enforcement Task Force.  President Obama established the interagency task force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes.  The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring a powerful array of criminal and civil enforcement resources.  The task force is working to improve efforts across the federal executive branch, along with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.  For more information on the task force, visit www.StopFraud.gov .

A copy of the complaint and proposed order, as well as additional information about fair lending enforcement by the Justice Department, can be obtained from the Justice Department website at www.justive.gov/fairhousing .

The Justice Department announced today that developer Douglas Pauley and entities affiliated with him have agreed to pay $110,000 and make all retrofits required to remove accessibility barriers at 30 apartment complexes, involving more than 750 units, in West Virginia that were developed through the federal government’s Low-Income Housing Tax Credit program. The parties’ agreement will settle the United States’ claims that defendants violated the Fair Housing Act by building the complexes with a variety of features that made them inaccessible to persons with disabilities.

 
Under the terms of the parties’ agreement, Pauley, as general partner of 30 limited liability partnerships, must take extensive actions to make the complexes accessible to persons with disabilities.  These corrective actions include replacing cabinets in bathrooms and kitchens to provide sufficient room for wheelchair users, reducing door threshold heights, replacing excessively sloped portions of sidewalks and installing properly sloped curb ramps that allow persons with disabilities access to sidewalks from the parking areas. In addition, the defendants will pay $100,000 to establish a settlement fund for the purpose of compensating disabled individuals impacted by the accessibility violations and $10,000 as a civil penalty.

 
“The Fair Housing Act protects the rights of persons with disabilities to have equal opportunities to enjoy the housing of their choice,” said Acting Assistant Attorney General Jocelyn Samuels for the Civil Rights Division .  “The Justice Department is strongly committed to the enforcement of the fair housing laws. It is especially important that multi-family properties developed using federal programs are designed to provide accessible and affordable housing to those who need it the most.”

 
“When developers and building professionals fail to design and construct homes with the required accessibility features, we will vigorously enforce the law," said U.S. Attorney R. Booth Goodwin for the Southern District of West Virginia. 

 
Individuals who are entitled to share in the settlement fund will be identified through a process established in the settlement.  Notices of the settlement and a list of subject properties will be published in the Charleston Gazette. Persons who believe they were subjected to unlawful discrimination at one of those properties either when they lived there or considered living there should contact the Justice Department toll-free at 1-800-896-7743 mailbox # 9993 or e-mail the Justice Department at [email protected]

The federal Fair Housing Act prohibits discrimination in housing on the basis of race, color, religion, sex, familial status, national origin and disability.  More information about the Civil Rights Division and the laws it enforces is available at www.usdoj.gov/crt .  Individuals who believe that they have been victims of housing discrimination can call the Housing Discrimination Line at 1-800-896-7743, e-mail the Justice Department at [email protected] or contact The Department of Housing and Urban Development at 1-800-669-9777.

Siarhei Baltutski, aka Sergey Boltutskiy, 41, of Minsk, Belarus, was sentenced today to serve 180 months in prison for conspiracy to violate the Arms Export Control Act, conspiracy to violate the International Emergency Economic Powers Act and conspiracy to commit money laundering.

Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, Acting Assistant Attorney General John Carlin of the Justice Department’s National Security Division and U.S. Attorney Zane David Memeger of the Eastern District of Pennsylvania made the announcement.

Baltutski pleaded guilty on Jan. 25, 2013.  In addition to the prison term, U.S. District Court Judge Paul S. Diamond of the Eastern District of Pennsylvania ordered Baltutski to serve three years of supervised release.

Between Jan. 1, 2008, and Sept. 21, 2011, Baltutski organized a network of buyers in the United States to obtain and illegally export to Belarus high-tech military hardware such as Scorpion Thermal Weapon Sights, ThOR 2 Thermal Imaging Scopes, Thermal-Eye Renegade 320’s, and other night vision targeting devices.  During the course of the conspiracy, Baltutski and his associates illegally exported hundreds of these items.  Baltutski then arranged for hundreds of thousands of dollars to be secretly wired, via offshore shell companies, to purchase these items, to pay for shipping, and to pay his network of buyers.

The Arms Export Control Act and the International Emergency Economic Power Act prohibit the export of high-tech military technology.  Keeping this technology out of the hands of current and potential adversaries is critical to national interest and the safety and success of U.S. service members in combat.

This case was investigated by the U.S. Immigration and Customs Enforcement Homeland Security Investigations and the FBI.  The case was prosecuted by Trial Attorney Jerome Maiatico of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorney Robert Livermore of the Eastern District of Pennsylvania, with assistance from Trial Attorney David Recker of the National Security Division’s Counterespionage Section.

The owner of a Miami home health care company was sentenced to serve 235 months in prison today for her participation in a $7 million health care fraud scheme involving defunct home health care company Anna Nursing Services Corp.

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.

Dora Moreira, 46, was sentenced by U.S. District Judge Jose E. Martinez in the Southern District of Florida. In addition to her prison term, Moreira was sentenced to serve three years of supervised release and ordered to pay $6,928,931 in restitution.

In October 2013, Moreira was convicted by a jury of one count of conspiracy to commit health care fraud, one count of conspiracy to defraud the United States and receive and pay health care kickbacks, one count of payment of kickbacks in connection with a federal health care program, one count of conspiracy to commit money laundering and five counts of money laundering.

Moreira was the owner and operator of Anna Nursing, a Miami home health care agency that purported to provide home health and physical therapy services to Medicare beneficiaries.

According to evidence presented at trial, Moreira operated Anna Nursing for the purpose of billing the Medicare Program for, among other things, expensive physical therapy and home health care services that were not medically necessary and/or not provided.

Moreira paid kickbacks and bribes to patients, negotiated and interacted with patient recruiters, and coordinated and oversaw the submission of fraudulent claims to the Medicare program. Moreira also laundered money received from Medicare in order to conceal her financial transactions and generate cash needed to pay kickbacks to patients, patient recruiters, and others in return for assisting her in the fraudulent scheme at Anna Nursing.

From approximately July 2010 through approximately May 2013, Anna Nursing was paid approximately $7 million by Medicare for fraudulent claims for home health services that were not medically necessary and/or not provided.

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

The Department of Justice and the U.S. Environmental Protection Agency (EPA) announced today that Chesapeake Appalachia LLC, a subsidiary of Chesapeake Energy, the nation’s second largest natural gas producer, will spend an EPA-estimated $6.5 million to restore 27 sites damaged by unauthorized discharges of fill material into streams and wetlands and to implement a comprehensive plan to comply with federal and state water protection laws at the company’s natural gas extraction sites in West Virginia, many of which involve hydraulic fracturing operations.

The company will also pay a civil penalty of $3.2 million, one of the largest ever levied by the federal government for violations of Section 404 of the Clean Water Act (CWA), which prohibits the filling or damming of wetlands, rivers, streams, and other waters of the United States without a federal permit.

“With this agreement, Chesapeake is taking important steps to comply with state and federal laws that are essential to protecting the integrity of the nation’s waters, wetlands and streams,” said Robert G. Dreher, Acting Assistant Attorney General of the Justice Department’s Environment and Natural Resources Division.  “We will continue to ensure that oil and gas development, including development through the use of hydraulic-fracturing techniques, complies with the Clean Water Act and other applicable federal laws.”

“Ensuring environmentally-sound and legal natural gas production is critical to protecting wetlands and local water supplies that communities depend on,” said Cynthia Giles, Assistant Administrator of EPA’s Office of Enforcement and Compliance Assurance. “By enforcing the law with a large producer like Chesapeake Appalachia, we’re also helping to level the playing field for businesses in this industry.”

The federal government and the West Virginia Department of Environmental Protection (WVDEP) allege that the company impounded streams and discharged sand, dirt, rocks and other fill material into streams and wetlands without a federal permit in order to construct well pads, impoundments, road crossings and other facilities related to natural gas extraction. The alleged violations being resolved by today’s settlement occurred at 27 sites located in the West Virginia Counties of Boone, Kanawha, Lewis, Marshall, Mingo, Preston, Upshur and Wetzel, including 16 sites involving hydraulic fracturing operations.  The government alleges that the violations impacted approximately 12,000 linear feet of stream, or approximately 2.2 miles, and more than three acres of wetlands.

The settlement requires that the company fully restore the wetlands and streams wherever feasible, monitor the restored sites for up to 10 years to assure the success of the restoration, and implement a comprehensive compliance program to ensure future compliance with the CWA and applicable state law. To offset the impacts to sites that cannot be restored, the company will perform compensatory mitigation, which will likely involve purchasing credits from a wetland mitigation bank located in a local watershed.

EPA discovered some of the violations through information provided by the public and routine inspections. In addition, the company voluntarily disclosed potential violations at 19 of the sites following an internal audit. In 2010 and 2011, EPA issued administrative compliance orders for violations at 11 sites. Since that time, the company has been correcting the violations and restoring those sites in full compliance with EPA’s orders.

The settlement also resolves alleged violations of state law brought by WVDEP. The state of West Virginia is a co-plaintiff in the settlement and will receive half of the civil penalty.

In a related case, in December 2012, the company pleaded guilty to three violations of the CWA related to natural gas extraction activity in Wetzel County, at one of the sites subject to today’s settlement. The company was sentenced to pay a $600,000 penalty to the federal government for discharging crushed stone and gravel into Blake Fork, a local stream, to create a roadway to improve access to a drilling site. The company has already fully restored the damage done to the site.

Filling wetlands illegally and damming streams can result in serious environmental consequences. Streams, rivers, and wetlands benefit the environment by reducing flood risks, filtering pollutants, recharging groundwater and drinking water supplies, and providing food and habitat for aquatic species.

Chesapeake Appalachia engages in the exploration and production of natural gas in the Appalachian Basin. The company has oil and natural gas properties in West Virginia, Pennsylvania, and Ohio.

The consent decree, lodged today in the Northern District of West Virginia, is subject to a 30-day public comment period and court approval. The consent decree is available for review at www.justice.gov/enrd/Consent_Decrees.html.

More information about the settlement: www2.epa.gov/enforcement/chesapeake-appalachia-llc-clean-water-settlement.

El Departamento de Justicia anunció hoy que Fort Davis State Bank, con sede en Fort Davis, Texas, implementará políticas de precios uniformes, brindará capacitación a empleados y pagará 159,000 dólares como parte de un acuerdo conciliatorio en resolución de alegatos que había mantenido un patrón o práctica de discriminación basado en origen nacional.

El acuerdo conciliatorio, que está sujeto a aprobación del tribunal, fue presentado junto con la demanda del departamento en el Tribunal Federal de Distrito del Distrito Oeste de Texas. La demanda alega que Fort Davis State Bank violó la Ley de Igualdad de Oportunidades de Crédito [Equal Credit Opportunity Act [ECOA]) al cobrar precios más altos a prestatarios hispanos por préstamos de consumidor sin garantía, que a prestatarios no hispanos con cualificaciones similares.

Fort Davis State Bank es un banco comunitario con tres sucursales con presencia significativa en la comunidad hispana local hace muchos años.

"Este acuerdo conciliatorio asegura que los prestatarios hispanos que pagaron más por sus préstamos serán debidamente indemnizados", señaló la Secretaria de Justicia Auxiliar Interina de la División de Derechos Civiles del departamento Jocelyn Samuels. "Consideramos encomiable el compromiso de Fort Davis State Bank de satisfacer las necesidades especiales de préstamo de consumidor de esta comunidad de manera igualitaria y trabajar en conjunto con el Departamento de Justicia para lograr una resolución adecuada para este caso".

La demanda surgió de una remisión al departamento realizada en 2011 por la Federal Deposit Insurance Corporation (FDIC). Fort Davis State Bank está regulada por la FDIC.

Los fondos del acuerdo conciliatorio se utilizarán para indemnizar a víctimas hispanas de la presunta discriminación llevada a cabo por Fort Davis State Bank. Según el acuerdo conciliatorio propuesto, los Estados Unidos identificarán una lista de víctimas, quienes recibirán un aviso de elegibilidad del banco, y el departamento controlará el proceso de indemnización.

Con anterioridad al acuerdo conciliatorio, Fort Davis State Bank implementó políticas de precios uniformes que redujeron significativamente la libertad de sus agentes de crédito de variar la tasa de interés de un préstamo respecto del precio establecido con base en factores crediticios objetivos del prestatario. El acuerdo conciliatorio de hoy exige que Fort Davis State Bank mantenga sus políticas optimizadas como mínimo durante los próximos tres años, siga controlando su otorgamiento de préstamos de modo a evitar la discriminación y provea informes de sus controles a los Estados Unidos.

La Unidad de Préstamos Justos de la Sección de Vivienda y Cumplimiento de la Ley Civil de la División de Derechos Civiles es responsable, en el departamento, de hacer valer las leyes de otorgamiento justo de préstamos. Desde su fundación en febrero de 2010, la Unidad de Préstamos Justos ha iniciado o resuelto 29 casos asociados a préstamos bajo la Ley de Vivienda Justa [Fair Housing Act], ECOA y la Ley de Amparo Civil para Militares [Servicemembers Civil Relief Act]. Los acuerdos conciliatorios logrados en estos casos consistieron en casi 700 millones de dólares en indemnizaciones a comunidades y prestatarios individuales afectados. Los informes anuales del Secretario de Justicia de EE.UU. al Congreso bajo ECOA destacan los logros del Departamento en el otorgamiento de préstamos justos y están disponibles en www.justice.gov/crt/publications.

La División de Derechos Civiles y la FDIC son miembros de la Fuerza de Tarea de Coacción contra el Fraude Financiero. El Presidente Obama estableció la fuerza de tarea interagencial para llevar a cabo una iniciativa enérgica, coordinada y proactiva para investigar y enjuiciar los delitos financieros. La fuerza de tarea incluye a representantes de una amplia gama de dependencias federales, autoridades reguladoras, inspectores generales y miembros de las fuerzas del orden público estatales y locales, quienes, trabajando unidos, aportan un poderoso espectro de recursos de coacción penal y civil. La fuerza de tarea está trabajando para mejorar la labor en todo el poder ejecutivo federal, y con asociados estatales y locales, para investigar y enjuiciar los delitos financieros importantes, asegurar un castigo justo y eficaz para quienes cometan delitos financieros, combatir la discriminación en los mercados de préstamos y financieros, y recuperar fondos para las víctimas de delitos financieros. Para obtener más información sobre la fuerza de tarea, visite www.StopFraud.gov.

Para obtener una copia de la demanda y la orden propuesta, así como también información adicional sobre la labor del Departamento de Justicia para hacer valer las leyes de otorgamiento justo de préstamos, visite el portal del Departamento de Justicia en www.justice.gov/fairhousing.

A Canadian man was arrested today in St. John, New Brunswick, Canada, on an extradition warrant requested by the United States for money laundering crimes related to the illegal importation and illegal trafficking of narwhal tusks, announced Robert G. Dreher, Acting Assistant Attorney General for the Environment and Natural Resources Division .

On Nov. 14, 2012, a federal grand jury sitting in Bangor, Maine, returned an indictment that was partially unsealed today upon the arrest of Gregory R. Logan of Grand Prairie, Alberta, Canada. The indictment also names Jay G. Conrad of Lakeland, Tenn., and Andrew L. Zarauskas of Union, N.J. Logan was arrested on charges in the indictment for money laundering conspiracy and substantive money laundering violations. The indictment also charges Conrad and Zarauskas with conspiracy to smuggle narwhal tusks, money laundering conspiracy, smuggling narwhal tusks and money laundering violations. According to the indictment, Logan illegally laundered the money earned from his illegal imports and sales of narwhal tusks in the United States. It further charges that Conrad and Zarauskas bought the narwhal tusks from Logan, knowing the tusks had been illegally imported into the United States, and sold or attempted to sell the tusks after their illegal importation.

The arrest of Logan on an extradition warrant in Canada begins the extradition process to the U.S. The extradition process is governed by a 1971 extradition treaty between the U.S. and Canada.

The charges contained in the indictment are merely accusations and the defendants are presumed innocent unless and until proven guilty in a court of law. If convicted of these charges, the defendants each face up to twenty years in prison on each of the most serious charges, as well as fines up to $250,000.

The case was investigated by agents from National Oceanic and Atmospheric Administration Office of Law Enforcement and the U.S. Fish and Wildlife Service Office of Law Enforcement. The case is being prosecuted by Trial Attorney Todd S. Mikolop of the Justice Department’s Environmental Crimes Section, with assistance from the Justice Department's Office of International Affairs.

A south Florida man has pleaded guilty today for his role in a $10.5 million Medicare fraud scheme involving physical and occupational therapy services.

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

Luis Alberto Garcia Perojo, 42, pleaded guilty in the U.S. District Court for the Middle District of Florida to conspiring to commit health care fraud. He faces a maximum penalty of 10 years in prison, and his sentencing will be scheduled at a later date.

According to documents filed in the case, Garcia conspired with others to execute a health care fraud scheme through Renew Therapy Center of Port St. Lucie LLC, a comprehensive outpatient rehabilitation facility that he helped operate. From November 2007 through August 2009, Renew Therapy submitted approximately $10,549,361 in fraudulent claims for reimbursement to Medicare for therapy services that were not legitimately prescribed and not legitimately provided to Medicare beneficiaries. As a result of those fraudulent claims, Medicare deposited approximately $6,248,056 into a Renew Therapy bank account. The fraud proceeds in that account were later disbursed to various entities, including a combined total of $1,847,222 to Ariguanabo Investment Group Inc. and IRE Diagnostic Center Inc. Garcia was President of Ariguanabo Investment Group and had authority over bank accounts for Ariguanabo Investment Group and IRE Diagnostic Center, both of which were shell companies. Garcia and others used this money from Renew Therapy for, among other purposes, paying kickbacks to obtain Medicare beneficiary identifying information that was used in Renew Therapy’s fraudulent reimbursement claims.

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 U.S. Attorney’s Office for the Middle District of Florida. This case is being prosecuted by Trial Attorney Christopher J. Hunter 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, the HHS Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

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

A Reno, Nev. man has been charged with providing material support to terrorism groups in India and Pakistan in order to intimidate the Indian government and to harm persons that were not supporting their cause, announced John Carlin, Acting Assistant Attorney General for National Security, Daniel G. Bogden, U.S. Attorney for the District of Nevada, and Laura A. Bucheit, Special Agent in Charge of the FBI for Nevada.

 
“A thorough investigation and cooperation among agencies led to these charges,” said U.S. Attorney Bogden.  “Investigating and prosecuting matters of national security is the top priority of the U.S. Department of Justice.”

Balwinder Singh, aka Jhajj, aka, Happy, aka Possi, aka Baljit Singh, 39, of Reno, is charged in an indictment with one count of conspiracy to murder, kidnap, and maim persons in a foreign country, one count of conspiracy to provide material support to terrorists, one count of making a false statement on an immigration document, two counts of use of an immigration document procured by fraud, and one count of unlawful production of an identification document.   Singh was arrested on Tuesday, Dec. 17, 2013, in Reno, and is scheduled to appear before a U.S. Magistrate Judge on Friday, Dec. 20, 2013, for an initial appearance and arraignment. 

 “After an extensive investigation, the FBI-led Joint Terrorism Task Force (JTTF) of Northern Nevada has disrupted an individual’s involvement in facilitation activities in support of a foreign terrorist organization, targeting an ally of the United States,” said FBI Special Agent in Charge Bucheit. “We will continue to work with our international partners to prevent acts of terrorism on U.S. soil or, as in this case, on that of an ally. This investigation demonstrates the importance of law enforcement coordination and collaboration here and around the world.”

According to the indictment, Singh was a citizen of India who fled to the United States and claimed asylum.  Singh lived in the United States where he eventually obtained a permanent resident card from the United States.  The indictment alleges that Singh is a member of two terrorist organizations, Babbar Khalsa International (BKI) and Khalistan Zindabad Force (KZF), whose members aim to establish an independent Sikh state in part of the Punjab region of India known as Khalistan. These groups engage in bombings, kidnappings and murders in India to intimidate and compel the Indian government to create the state of Khalistan.  These groups also target for assassination persons they consider traitors to the Sikh religion and government officials who they consider responsible for atrocities against the Sikhs. 

 
The indictment alleges that the object of the conspiracy was to advance the goals of BKI and KZF by raising money and obtaining weapons to support acts of terrorism in India.  It is alleged that the conspiracy began on a date unknown but no later than Nov. 30, 1997.  It is alleged that Singh used a false identity and obtained false identification documents in the United States so that he could travel back to India without being apprehended by the Indian authorities.  It is alleged that Singh communicated with other coconspirators by telephone while he was in the United States to discuss acts of terrorism to be carried out in India.  It is alleged that Singh sent money from Reno, Nev., to co-conspirators in India for the purchase of weapons that would be provided to members of the BKI and KZF to support acts of terrorism in India. It is alleged that Singh traveled from the United States to Pakistan, India, and other countries to meet with coconspirators to assist in the planning of terrorism in India, and that Singh provided advice to coconspirators about how to carry out acts of terrorism.

If convicted, Singh faces up to life in prison and fines of up to $250,000 on each count. 

The case is being investigated by the FBI-led Joint Terrorism Task Force in northern Nevada, and prosecuted by Assistant U.S. Attorneys Sue Fahami and Brian L. Sullivan, and Trial Attorney Mara M. Kohn of the U.S. Department of Justice Counterterrorism Section.      

The public is reminded that an indictment contains only charges and is not evidence of guilt.  The defendant is presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.

Today, we announce significant developments in a securities fraud investigation involving the large-scale theft of client funds by a global brokerage and trading firm.

This afternoon, ConvergEx Global Markets Limited, or CGM – a brokerage subsidiary of ConvergEx Group located in Bermuda – pleaded guilty to conspiring to commit securities and wire fraud and to substantive wire fraud charges.  In addition, two traders, Jonathan Daspin – who was the head of trading at CGM – and Thomas Lekargeren – who was a sales trader of a ConvergEx affiliate – also pleaded guilty to conspiracy to commit wire and securities fraud.  The Justice Department has also charged CGM Limited’s parent company, ConvergEx Group, for its role in the same criminal conduct. ConvergEx Group has entered into a two-year deferred prosecution agreement to resolve those charges.  Together, ConvergEx Group and CGM are paying criminal penalties and restitution of over $43 million.

As described in the guilty plea agreements and charging documents, ConvergEx – which was a broker for some of the most sophisticated institutional investors in the world – engaged in a concerted and coordinated effort to fleece its clients by charging them millions of dollars in unwarranted fees – which ConvergEx called “trading profits,” or “spread” – and then concealing those charges from its clients through a pattern of deception. Although the theft of money from ConvergEx’s clients was large in scale, the fraud scheme was committed in the most basic of ways:  ConvergEx and its traders, plain and simple, lied to their clients to hide that they were stealing their money.

As described in the court documents, ConvergEx’s lies were repeated, deliberate, and came in many different forms.  As one example, ConvergEx employees simply doctored up false transaction reports – which included completely fabricated details about execution orders, including the number of shares involved in a trade, the time a trade was executed, and the price at which shares were bought or sold – to hide that they were charging a “spread” to their clients. In one instance, Jonathan Daspin (the head trader at CGM) instructed a sales trader while creating a false report to “Please put all Prints in one spreadsheet in the least Friendly Format….If possible take this out of spreadsheet Format and make a PDF – Or put this in picture file or something tricky to manipulate.” At other times, when clients questioned the payments, ConvergEx employees intentionally provided misleading explanations to conceal the “spread” they were charging. And, to avoid having their scheme uncovered, ConvergEx employees deliberately took smaller spreads on their more sophisticated, price-sensitive clients; and they took larger spreads when they were less likely to be discovered. In addition, at times, they used multiple local brokers during the course of a trade so that a client would not be able to track the execution of its order through publicly available resources.

The scheme itself, and the lies told by ConvergEx to its clients to conceal the scheme, were astonishingly brazen.  As just one example, when certain clients instructed ConvergEx to provide them their transactional data in real time so that they could more closely track the trades that ConvergEx was executing for them, Jonathan Daspin, along with others, quickly realized that such a real-time data feed would make it far more difficult for them to steal client funds and conceal the theft from their clients.  So, their response was simply to “turn off” the real-time data feed for certain portions of their clients’ orders – during which periods they took the spread on their clients’ trades – and then blamed the purported failure of the real-time data feed on “IT issues.”

This coordinated bilking of clients by a broker-dealer – accomplished through intentional and repeated misrepresentations – caused significant harm.  This kind of scheme not only inflicts real financial losses on investors, but also undermines investors’ confidence in the integrity and reliability of the financial markets.  As today’s announcement demonstrates, we will not tolerate this type of criminal conduct and we will hold both institutions and individuals to account.

We would like to thank the FBI and Postal Inspection Service, which tirelessly investigated the case.  We are also grateful to the SEC for referring the matter to the Criminal Division and for its significant assistance in the investigation.  We also acknowledge the substantial cooperation that ConvergEx provided during the investigation. Finally, I would like to thank the dedicated prosecutors at the Criminal Division’s Fraud Section for their excellent work on this important, and ongoing, investigation.

Robin Smith, a former corrections officer at the Alvin S. Glenn Detention Center in Richland County, S.C., pleaded guilty today in federal court in Columbia, S.C., to violating the civil rights of a pre-trial detainee.

During his guilty plea, Smith admitted that on Feb. 11, 2012, while working as a corrections officer, he used unreasonable, unprovoked force against a restrained inmate with mental illness.  During the course of a routine search of the victim’s cell, Smith twisted the victim’s wrist and arm and kicked him in the upper body.  During the assault, the victim was lying on the floor of the cell with one hand cuffed.  The victim was not combative and did not pose a threat to Smith.

“The overwhelming majority of correctional officers dispatch their difficult duties with honor and professionalism,” said Acting Assistant Attorney General Jocelyn Samuels for the Civil Rights Division.  “The Justice Department will aggressively prosecute those who cross the line to engage in acts of criminal misconduct.”           

“Every minute of every day, corrections officers across this state handle extraordinarily difficult situations in a way that protects the detainees, the institution and the public,” said U.S. Attorney Bill Nettles for the District of South Carolina.  “However, when a corrections officer’s conduct crosses the line between lawful use of force and an abuse of authority, we will take that case before the grand jury.”  

U.S. Attorney Nettles thanked Sheriff Lott and the Richland County Sheriff’s Department for their commitment to the investigation, without which the prosecution would have been nearly impossible.  Today’s plea resulted from the investigative work of the Federal Bureau of Investigation and the Richland County Sheriff’s Office.  The case is being prosecuted by Trial Attorneys Jared Fishman and Nicholas Murphy for the Civil Rights Division, and First Assistant U.S. Attorney Beth Drake for the District of South Carolina.

Kurt Mix, a former engineer for BP plc, was convicted today of intentionally destroying evidence requested by federal criminal authorities investigating the April 20, 2010, Deepwater Horizon disaster.

Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and Special Agent in Charge Michael J. Anderson of the FBI’s New Orleans Division made the announcement after the verdict was announced by U.S. District Judge Stanwood R. Duval Jr.

Mix, 52, of Katy, Texas, was convicted by a federal jury in the Eastern District of Louisiana of one count of obstruction of justice and was acquitted on a second count of obstruction of justice. He faces a maximum penalty of 20 years in prison when he is sentenced on March 26, 2014.

“Today a jury in New Orleans found that Kurt Mix purposefully obstructed the efforts of law enforcement during the investigation of the largest environmental disaster in U.S. history,” said Acting Assistant Attorney General Raman. “This prosecution shows the commitment of the Justice Department to hold accountable those who attempt to interfere with the administration of justice.  I want to thank the committed prosecutors and agents who have worked tirelessly over so many years on the Deepwater Horizon Task Force for their dedication and tenacity.”

According to court documents and evidence at trial, on April 20, 2010, the Deepwater Horizon rig experienced an uncontrolled blowout and related explosions while closing the Macondo well.  The catastrophe killed 11 men on board and resulted in the largest environmental disaster in U.S. history.

Mix was a drilling and completions project engineer for BP.  Following the blowout, Mix worked on internal BP efforts to estimate the amount of oil leaking from the well and was involved in various efforts to stop the leak.  Those efforts included Top Kill, the failed BP effort to pump heavy mud into the blown-out wellhead to try to stop the oil flow.  BP sent numerous notices to Mix requiring him to retain all information concerning Macondo, including his text messages.

On or about Oct. 4, 2010, after Mix learned that his electronic files were to be collected by a vendor working for BP’s lawyers, Mix deleted on his iPhone a text string containing more than 300 text messages with his BP supervisor.  The deleted messages included a text sent on the evening of May 26, 2010, at the end of the first day of Top Kill.  In the text, Mix stated, among other things, “Too much flowrate – over 15,000.”  Before Top Kill commenced, Mix and other engineers had concluded internally that Top Kill was unlikely to succeed if the flow rate was greater than 15,000 barrels of oil per day (BOPD).  At the time, BP’s public estimate of the flow rate was 5,000 BOPD – three times lower than the minimum flow rate indicated in Mix’s text.

By the time Mix deleted these texts, he had received numerous legal hold notices requiring him to preserve such data and had been put on notice of the Department of Justice’s criminal investigation of the Deepwater Horizon disaster.

The Deepwater Horizon Task Force, based in New Orleans, is supervised by Acting Assistant Attorney General Raman and led by William Pericak, a deputy chief in the Criminal Division’s Fraud Section who serves as the director of the task force.  The task force includes prosecutors from the Criminal Division and the Environment and Natural Resources Division of the Department of Justice, the U.S. Attorney’s Office for the Eastern District of Louisiana and other U.S. Attorney’s Offices, and investigating agents from the FBI, Environmental Protection Agency, Department of Interior, U.S. Coast Guard, U.S. Fish and Wildlife Service and other federal law enforcement agencies.  The task force’s investigation of this and other matters concerning the Deepwater Horizon disaster is ongoing.

The case is being prosecuted by Senior Trial Attorney Jennifer L. Saulino and Trial Attorney Leo R. Tsao of the Fraud Section.