District Not Recorded
The source did not name an office we could identify. These records remain unassigned rather than guessed.
CVS’ Caremark Will Pay $4.25 Million<br /> for Allegedly Denying Medicaid Claims for Reimbursement of Prescription Drug CostsRead the Press Release
Caremark LLC, a pharmacy benefit management company (PBM), will pay the government and five states a total of $4.25 million to settle allegations that it knowingly failed to reimburse Medicaid for prescription drug costs paid on behalf of Medicaid beneficiaries, who also were eligible for drug benefits under Caremark-administered private health plans, the Justice Department announced today. Caremark is operated by CVS Caremark Corp., one of the largest PBMs and retail pharmacies in the country. A PBM administers and manages the drug benefits for clients who offer drug benefits under a health insurance plan.
Under the terms of the agreement, the government will receive approximately $2.31 million. In addition, five states -- Arkansas, California, Delaware, Louisiana and Massachusetts -- will share $1.94 million.
“It is vitally important that cash-strapped Medicaid programs receive reimbursement for costs they incur that should have been paid for by other insurers,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery. “We will take action against those who seek to gain at the expense of Medicaid or other federal health care programs.”
Caremark served as the PBM for private health plans that insured a number of individuals receiving prescription drug benefits under both a Caremark-administered plan and Medicaid. When an individual is covered by both Medicaid and a private health plan, the individual is called a “dual eligible.” Under the law, the private insurer, rather than the government, must assume the costs of health care for dual eligibles. If Medicaid erroneously pays for the prescription claim of a dual eligible, Medicaid is entitled to seek reimbursement from the private insurer or its PBM, in this case Caremark.
According to the government, Caremark allegedly used a computer claims processing platform called “Quantum Leap” to cancel claims for reimbursement submitted by Medicaid for dual eligibles. The government alleged that Caremark’s actions caused Medicaid to incur prescription drug costs for dual eligibles that should have been paid for by the Caremark-administered private health plans rather than Medicaid.
The allegations settled today arose from a lawsuit filed by Janaki Ramadoss, a former Caremark quality assurance representative, under the qui tam, or whistleblower, provisions of the False Claims Act. Under the Act, private citizens can bring suit on behalf of the government for false claims and share in any recovery. The Act also allows the government to intervene in the lawsuit, as it has done in this case. Ramadoss will receive approximately $505,680 from the federal government’s share of the settlement. Ramadoss also will receive additional amounts from the settling states.
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 $12.1 billion of that amount recovered in cases involving fraud against federal health care programs.
This case was jointly litigated by the U.S. Attorney’s Office for the Western District of
Texas; the Justice Department’s Civil Division, Commercial Litigation Branch; and the attorneys general for the states of Arkansas, California and Louisiana.The case is captioned United States ex rel. Ramadoss v. CVS Caremark Inc., SA-12-CA-929WRF (W.D. Texas). The claims settled by this agreement are allegations only; there has been no determination of liability.
Alabama Man Sentenced to Federal Prison for Stolen Identity Tax Refund Fraud SchemeRead the Press Release
Clarence Hicks, of Montgomery, Ala., was sentenced to serve 57 months in federal prison and three years of supervised release and ordered to pay $210,555.62 in restitution for his role in a stolen identity refund fraud scheme, announced Assistant Attorney General Kathryn Keneally of the Justice Department's Tax Division and U.S. Attorney George L. Beck Jr. for the Middle District of Alabama. Hicks had previously pleaded guilty to filing a false claim for a federal tax refund and to aggravated identity theft.
According to court documents, Hicks had access to an Internal Revenue Service (IRS) Electronic Filing Identification Number assigned to another person and used that number to file false federal income tax returns in the names of stolen identities. The court found that Hicks intended to steal more than $300,000 from the IRS, which paid out $210,555.62 in false claims based on fraudulent returns Hicks filed.
This case was investigated by special agents of the Internal Revenue Service - Criminal Investigation. Trial Attorneys Justin Gelfand and Jason Poole of the department's Tax Division prosecuted the case.
Additional information about the department's Tax Division and its enforcement efforts may be found at www.justice.gov/tax
Former KKK Leader Indicted for Cross Burning in Alabama; Second KKK Member Indicted for PerjuryRead the Press Release
Steven Joshua Dinkle, former Exalted Cyclops of a chapter of the Ku Klux Klan (KKK) in Ozark, Ala., was arrested on Wednesday, Nov. 27, in Mississippi for burning a cross at the entrance to a predominantly African-American neighborhood and for obstructing the investigation into the offense. Pamela Morris, Dinkle’s mother and the former secretary of the KKK chapter, was arrested on Nov. 21, 2013, for committing perjury before the grand jury investigating the cross burning.
Dinkle, 28, was charged in a five-count indictment returned by a federal grand jury in the Middle District of Alabama that was unsealed on Nov. 27. The indictment charges him with one count of conspiracy to violate housing rights, one count of criminal interference with the right to fair housing, one count of using fire to commit a federal felony and two counts of obstruction of justice.
The indictment alleges that on May 8, 2009, Dinkle conspired with another person to burn a cross in an African-American neighborhood to threaten and intimidate residents of that neighborhood and thereby interfere with their federally protected housing rights. Dinkle allegedly constructed a six-foot cross, wrapping jeans and a towel around it. He and his co-conspirator drove the cross to an African-American community near Johntown Road in Ozark where Dinkle poured fuel on the cross, erected it in the ground and set it on fire. The indictment further contends that Dinkle obstructed justice by lying to local investigators in 2009, and federal investigators in 2012. Dinkle claimed he had withdrawn from the KKK months before the cross burning, provided a false alibi and denied knowing a person who was, in fact, his superior in the KKK.
The grand jury returned a separate indictment against Morris, 45, charging her with two counts of perjury. The indictment alleges that Morris made multiple false statements to the grand jury investigating the cross burning when she denied her own involvement in the KKK and knowing that Dinkle was also involved.
If convicted, Dinkle could face a maximum statutory sentence of 10 years in prison and a $250,000 fine on the conspiracy and criminal-interference counts; sentence maximum of 10 years in prison for the use-of-fire; a maximum of 20 years in prison and a $250,000 fine for obstructing justice by making false statements to local investigators; and a maximum of five years in prison and a $250,000 fine for making false statements to the FBI.
If convicted, Morris could face a maximum statutory sentence of five years in prison and a $250,000 fine on each count of perjury.
This case is being investigated by the FBI, with the assistance of the Dale County Sheriff’s Office and the Ozark Police Department. The case is being prosecuted by Assistant U.S. Attorney Jerusha T. Adams of the Middle District of Alabama and Trial Attorney Chiraag Bains of the Justice Department’s Civil Rights Division.
An indictment is merely an accusation, and the defendants are presumed innocent unless and until proven guilty.
Stanley Electric Co. Ltd. Agrees to Plead Guilty to Price Fixing on Automobile Parts Installed in U.S. CarsRead the Press Release
Stanley Electric Co. Ltd., a Tokyo-based company, has agreed to plead guilty and to pay a $1.44 million criminal fine for its participation in a conspiracy to fix prices of lamp ballasts installed in cars sold in the United States and elsewhere, the Department of Justice announced today.
According to a one-count felony charge filed today in U.S. District Court for the Eastern District of Michigan in Detroit, Stanley Electric engaged in a conspiracy to rig bids for, and to fix, stabilize and maintain the prices of, automotive high-intensity discharge (HID) lamp ballasts sold to automakers in the United States and elsewhere. Stanley Electric has also agreed to cooperate with the department’s ongoing investigation. The plea agreement is subject to court approval.The department said that Stanley Electric and its co-conspirators sold or supplied the ballasts at noncompetitive prices to automakers in the United States and elsewhere. Stanley Electric’s involvement in the conspiracy to fix prices of automotive HID lamp ballasts lasted from as early as July 1998 until at least February 2010.
Stanley Electric manufactures and sells automotive HID headlamps, which contain automotive HID lamp ballasts. An automotive HID lamp ballast is an electrical device that is essential for the operation of an HID headlamp. It regulates the electrical current used to ignite and control the electrical arc that generates the intensely bright light emitted by an automotive HID headlamp fixture.
The department said the company and its co-conspirators carried out the conspiracy through meetings and conversations in which they discussed and agreed upon bids, price quotations and price adjustments and agreed to allocate among the companies certain sales of HID lamp ballasts sold to automobile and component manufacturers.
Including Stanley, 23 corporations have been charged in the department’s investigation into price fixing and bid rigging in the auto parts industry. Those companies have agreed to pay a total of over $1.8 billion in fines. Additionally, 26 individuals have been charged.
Stanley Electric Co. Ltd. is charged with price fixing in violation of the Sherman Act, which carries a maximum penalty of a $100 million criminal fine for corporations. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.
Today’s prosecution arose from an ongoing federal antitrust investigation into price fixing, bid rigging and other anticompetitive conduct in the automotive parts industry, which is being conducted by each of the Antitrust Division’s criminal enforcement sections and the FBI. Today’s charges were brought by the National Criminal Enforcement Section, with the assistance of the Detroit, Michigan Field Office of the FBI and the FBI headquarters’ International Corruption Unit. Anyone with information concerning the focus of this investigation should contact the Antitrust Division’s Citizen Complaint Center at 1-888-647-3258, visit www.justice.gov/atr/contact/newcase.html, or call the Detroit Field Office of the FBI at 313-965-2323.
Justice Department Reaches Agreement with Oklahoma Child Care Center to Ensure Equal Rights for Children with DisabilitiesRead the Press Release
The Justice Department announced today that it has reached a settlement with Camelot Child Development Center of Oklahoma City and Edmond, Okla., under the Americans with Disabilities Act (ADA). The settlement resolves allegations that Camelot violated the ADA by prohibiting a child with Down syndrome from field trips, and threatening to expel her, because of her developmental delays. Because the child is not fully toilet-trained, she wears pull-up diapers and requires help with toileting. Camelot provides toileting assistance to younger children, but Camelot refused to provide such assistance to the child with Down syndrome during field trips. As a result, the child could not join in these outings with the other children. In addition, at one point, Camelot threatened to expel the child because of her need for toileting assistance.
Title III of the ADA prohibits discrimination on the basis of disability in child care centers. Under the ADA, child care centers must make reasonable modifications to their policies, practices or procedures when necessary to provide equal access to a child with a disability, unless a modification would fundamentally alter the nature of the goods and services. Personal services, such as diapering or toileting assistance, may be required for children who need it due to a disability, regardless of age, when such personal services are provided to other children.
Camelot worked cooperatively with the Justice Department throughout the investigation to change its policies to ensure the center will treat children with disabilities fairly and equally. Under the agreement, Camelot will also pay $3,000 to the family and provide one full year of child care services free of charge to compensate the child and the mother for the harm they have endured as a result of Camelot’s actions. In addition, Camelot will train its staff on the ADA and develop and implement an anti-discrimination policy. The department will monitor Camelot’s compliance for three years.
“Equal access to school and after-school programs is essential to children and parents across the country,” said Acting Assistant Attorney General Jocelyn Samuels for the Civil Rights Division. “School and after-school programs allow children with disabilities to learn and play with their peers and develop important social skills. The Civil Rights Division takes disability discrimination in child care settings very seriously and will not allow the exclusion of children with developmental delays.”
“Children are our most valuable resource and must be afforded equal opportunities to grow, learn, and develop,” said U.S. Attorney Sanford C. Coats. “The Americans with Disabilities Act ensures that a child with a disability has the same access to those opportunities as a child who is not disabled.”
The enforcement of the ADA is a top priority of the department’s Civil Rights Division. Those interested in finding out more about this settlement or the obligations of child care centers under the ADA may call the Justice Department’s toll-free ADA information line at 800-514-0301 or 800-514-0383 (TDD), or access its ADA website at www.ada.gov . ADA complaints may be filed by email to [email protected] .
Former Suppliers of Beef to National School Lunch Program<br /> Settle Allegations of Improper Practices and Mistreating CowsRead the Press Release
Several California companies and individuals that formerly supplied beef to the National School Lunch Program have agreed to settle allegations of inhumane handling of cattle, circumventing appropriate inspection of nonambulatory disabled (“downer”) cattle and false representations regarding their eligibility to process beef, the Justice Department announced today. The announcement follows approval of the last of these settlements by a California probate court.
“Children across the country depend on the National School Lunch Program to provide them with a healthy meal each day, so we all depend on companies providing food to the program to follow the rules designed to ensure those meals are safe to eat,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery. “The Justice Department will pursue aggressively anyone whose unlawful conduct puts the safety of our food at risk.”
“The contractors who supply beef and other meat products to schools and child-care facilities have a responsibility to provide our nation’s young people with products that come only from healthy and humanely handled animals,” said U.S. Attorney for the Central District of California André Birotte Jr. “This settlement holds accountable businesses that mistreated cows on a regular basis and routinely evaded a critically important USDA inspection procedure that allowed ‘downer cows’ to be processed into food.”
The settlements will conclude a lawsuit initiated by the Humane Society of the United States (HSUS) under the whistleblower provisions of the False Claims Act (FCA) after an HSUS investigator videotaped alleged inhumane cattle handling and improper downer cattle inspection practices at the slaughterhouse and meat processing facility of Westland Meat Co. and Hallmark Meat Packing Co. in Chino, Calif. The government later joined the lawsuit and brought additional claims that the defendants concealed their ineligibility to process beef because a convicted felon, Aaron “Arnie” Magidow, was a partner in and otherwise responsibly connected with the facility’s operations. U.S. Department of Agriculture (USDA) regulations applicable to suppliers of the National School Lunch Program prohibit the inhumane handling of cattle, require the proper inspection and disposition of downer cattle and require suppliers to identify convicted felons who are responsibly connected to the suppliers’ operations.
The National School Lunch Program, administered by the USDA, is a federally assisted meal program operating in public and nonprofit private schools and residential child-care institutions. The program provides nutritionally balanced, low-cost or free lunches to children each school day. All ground beef containing the defendants’ products was recalled as of Feb. 16, 2008, and the defendants no longer supply beef to the National School Lunch Program.
“A top priority for USDA’s Office of Inspector General (OIG) is protecting the integrity of America’s food supply by investigating violations of the Federal Meat Inspection Act,” said USDA-OIG Western Region Special Agent in Charge Lori Chan. “Agents from OIG’s Diamond Bar, Calif., office conducted an extensive investigation of the Hallmark/Westland facility, which supplied ground beef to schools through USDA’s National School Lunch Program. The government’s joint investigation led to one of the largest civil settlements in OIG’s history.”
Under the settlements, Westland Meat Co., based in Corona Del Mar, Calif., and its owner Steve Mendell will pay $240,000, and Westland will enter into a consent judgment for $155.68 million. M&M Management, also based in Corona Del Mar, Calif., and Cattleman’s Choice, based in Commerce, Calif., and the estate of Cattleman’s deceased owner, Arnie Magidow, and Magidow’s surviving spouse will pay a total of approximately $2.45 million. Magidow’s surviving spouse was named in the lawsuit as a successor in interest to Magidow and is not alleged to have engaged in any wrongdoing. In October 2012, defendants Donald R. Hallmark and Donald W. Hallmark settled allegations for $304,130.The FCA’s whistleblower provisions, under which HSUS filed the lawsuit, permit a private entity to bring a lawsuit on behalf of the government and to share in any proceeds from the suit. The FCA also allows the government to intervene in the lawsuit, as it has done in this case. As a result of the settlements announced today, HSUS will receive approximately $600,000.
The case was handled by the U.S. Attorney’s Office for the Central District of California and the Justice Department’s Civil Division, Commercial Litigation Branch; in cooperation with the USDA Office of Inspector General. The claims resolved by the settlement are allegations only; there has been no determination of liability.
Toyo Tire & Rubber Co. Ltd. Agrees to Plead Guilty to <br /> Price Fixing on Automobile Parts Installed in U.S. CarsRead the Press Release
Osaka, Japan-based Toyo Tire & Rubber Co. Ltd. has agreed to plead guilty and to pay a $120 million criminal fine for its role in two separate conspiracies to fix the prices of automotive components involving anti-vibration rubber and driveshaft parts installed in cars sold in the United States and elsewhere, the Department of Justice announced today.
According to a two-count felony charge filed today in U.S. District Court for the Northern District of Ohio in Toledo, Toyo engaged in a conspiracy to allocate sales of, to rig bids for, and to fix the prices of automotive anti-vibration rubber parts it sold to Toyota Motor Corp., Nissan Motor Corp., Fuji Heavy Industries Ltd. – more commonly known by its brand name, Subaru – and certain of their subsidiaries, affiliates and suppliers, in the United States and elsewhere. According to the charge, Toyo and its co-conspirators carried out the anti-vibration rubber parts conspiracy from as early as March 1996 until at least May 2012.
In addition, according to the charge, Toyo engaged in a separate conspiracy to allocate sales of, and to fix, raise and maintain the prices of automotive constant-velocity-joint boots it sold to U.S. subsidiaries of GKN plc, a British automotive parts supplier . According to the charge, Toyo and its co-conspirators carried out the constant-velocity-joint boots conspiracy from as early as January 2006 until as late as September 2010.
Toyo, which has subsidiaries based in Franklin, Ky., and White, Ga., has agreed to cooperate with the department’s ongoing investigation. The plea agreement is subject to court approval.
“Today’s charge is the latest step in the Antitrust Division’s effort to hold automobile part suppliers accountable for their illegal and collusive conduct,” said Renata B. Hesse, Deputy Assistant Attorney General for the Department of Justice’s Antitrust Division. “The division continues to vigorously prosecute companies and individuals that seek to maximize their profits through illegal and anticompetitive means.”
Automotive anti-vibration rubber parts are comprised primarily of rubber and metal, and include engine mounts and suspension bushings. They are installed in automobiles for the purpose of reducing road and engine vibration. Automotive constant-velocity-joint boots are composed of rubber or plastic, and are used to cover the constant-velocity-joints of an automobile to protect the joints from contaminants.
The department said the company and its co-conspirators carried out the conspiracies through meetings and conversations, discussed and agreed upon bids, price quotations and price adjustments, and agreed to allocate among the companies certain sales of the anti-vibration rubber and constant-velocity-joint boots parts sold to automobile and component manufacturers.
Including Toyo, 22 companies and 26 executives have been charged in the Justice Department’s ongoing investigation into the automotive parts industry. All 22 companies have either pleaded guilty or have agreed to plead guilty and have agreed to pay more than $1.8 billion in criminal fines. Of the 26 executives, 20 have been sentenced to serve time in U.S. prisons or have entered into plea agreements calling for significant prison sentences.
Toyo is charged with price fixing in violation of the Sherman Act, which carries a maximum penalty of a $100 million criminal fine for corporations. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.
The charges are the result of an ongoing federal antitrust investigation into price fixing, bid rigging and other anticompetitive conduct in the automotive parts industry, which is being conducted by each of the Antitrust Division’s criminal enforcement sections and the FBI. Today’s charges were brought by the Antitrust Division’s Chicago Office and the FBI’s Cleveland Field Office, with the assistance of the FBI headquarters’ International Corruption Unit and the U.S. Attorney’s Office for the Northern District of Ohio. Anyone with information concerning the focus of this investigation should contact the Antitrust Division’s Citizen Complaint Center at 1–888–647–3258, visit www.justice.gov/atr/contact/newcase.html or call the FBI’s Cleveland Field Office at 216-522-1400.Three Subsidiaries of Weatherford International Limited<br /> Agree to Plead Guilty to FCPA and Export Control ViolationsRead the Press Release
Three subsidiaries of Weatherford International Limited (Weatherford International), a Swiss oil services company that trades on the New York Stock Exchange, have agreed to plead guilty to anti-bribery provisions of the Foreign Corrupt Practices Act (FCPA) and export controls violations under the International Emergency Economic Powers Act (IEEPA) and the Trading With the Enemy Act (TWEA). Weatherford International and its subsidiaries have also agreed to pay more than $252 million in penalties and fines.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Kenneth Magidson of the Southern District of Texas, and Assistant Director in Charge Valerie Parlave of the FBI’s Washington Field Office made the announcement.
Weatherford Services Limited (Weatherford Services), a subsidiary of Weatherford International, today agreed to plead guilty to violating the anti-bribery provisions of the FCPA. As part of a coordinated FCPA resolution, the department today also filed a criminal information in U.S. District Court for the Southern District of Texas charging Weatherford International with one count of violating the internal controls provisions of the FCPA. To resolve the charge, Weatherford International has agreed to pay an $87.2 million criminal penalty as part of a deferred prosecution agreement with the department.
“Effective internal accounting controls are not only good policy, they are required by law for publicly traded companies – and for good reason,” said Acting Assistant Attorney General Raman. “This case demonstrates how loose controls and an anemic compliance environment can foster foreign bribery and fraud by a company’s subsidiaries around the globe. Although Weatherford’s extensive remediation and its efforts to improve its compliance functions are positive signs, the corrupt conduct of Weatherford International’s subsidiaries allowed it to earn millions of dollars in illicit profits, for which it is now paying a significant price.”“When business executives engage in bribery and pay-offs in order to obtain contracts, an uneven marketplace is created and honest competitor companies are put at a disadvantage,” said Assistant Director in Charge Parlave. “The FBI is committed to investigating corrupt backroom deals that influence contract procurement and threaten our global commerce.”
In a separate matter, Weatherford International and four of its subsidiaries today agreed to pay a combined $100 million to resolve a criminal and administrative export controls investigation conducted by the U.S. Attorney’s Office for the Southern District of Texas, the Department of Commerce’s Bureau of Industry and Security, and the Department of the Treasury’s Office of Foreign Assets Control. As part of the resolution of that investigation, Weatherford International has agreed to enter into a deferred prosecution agreement for a term of two years and two of its subsidiaries have agreed to plead guilty to export controls charges.
“The resolution today of these criminal charges represents the seriousness that our office and the Department of Justice puts on enforcing the export control and sanctions laws,” said U.S. Attorney Magidson.
In a related FCPA matter, the U.S. Securities and Exchange Commission ( SEC) filed a settlement today in which Weatherford International consented to the entry of a permanent injunction against FCPA violations and agreed to pay $65,612,360 in disgorgement, prejudgment interest, and civil penalties. Weatherford International also agreed with the SEC to comply with certain undertakings regarding its FCPA compliance program, including the retention of an independent corporate compliance monitor.
The combined investigations resulted in the conviction of three Weatherford subsidiaries, the entry by Weatherford International into two deferred prosecution agreements and a civil settlement, and the payment of a total of $252,690,606 in penalties and fines.
FCPA Violations
According to court documents filed by the department, prior to 2008, Weatherford International knowingly failed to establish an effective system of internal accounting controls designed to detect and prevent corruption, including FCPA violations. The company failed to implement these internal controls despite operating in an industry with a substantial corruption risk profile and despite growing its global footprint in large part by purchasing existing companies, often themselves in countries with high corruption risks. As a result, a permissive and uncontrolled environment existed within which employees of certain of Weatherford International’s wholly owned subsidiaries in Africa and the Middle East were able to engage in corrupt conduct over the course of many years, including both bribery of foreign officials and fraudulent misuse of the United Nations’ Oil for Food Program.
Court documents state that Weatherford Services employees established and operated a joint venture in Africa with two local entities controlled by foreign officials and their relatives from 2004 through at least 2008. The foreign officials selected the entities with which Weatherford Services would partner, and Weatherford Services and Weatherford International employees knew that the members of the local entities included foreign officials’ relatives and associates. Notwithstanding the fact that the local entities did not contribute capital, expertise or labor to the joint venture, neither Weatherford Services nor Weatherford International investigated why the local entities were involved in the joint venture. The sole purpose of those local entities, in fact, was to serve as conduits through which Weatherford Services funneled hundreds of thousands of dollars in payments to the foreign officials controlling them. In exchange for the payments they received from Weatherford Services through the joint venture, the foreign officials awarded the joint venture lucrative contracts, gave Weatherford Services inside information about competitors’ pricing, and took contracts away from Weatherford Services’ competitors and awarded them to the joint venture.
Additionally, Weatherford Services employees in Africa bribed a foreign official so that he would approve the renewal of an oil services contract, according to court documents. Weatherford Services funneled bribery payments to the foreign official through a freight forwarding agent it retained via a consultancy agreement in July 2006. Weatherford Services generated sham purchase orders for consulting services the freight forwarding agent never performed, and the freight forwarding agent, in turn, generated sham invoices for those same nonexistent services. When paid for those invoices, the freight forwarding agent passed at least some of those monies on to the foreign official with the authority to approve Weatherford Services’ contract renewal. In exchange for these payments, the foreign official awarded the renewal contract to Weatherford Services in 2006.
Further, according to court documents, in a third scheme in the Middle East, from 2005 through 2011, employees of Weatherford Oil Tools Middle East Limited (WOTME), another Weatherford International subsidiary, awarded improper “volume discounts” to a distributor who supplied Weatherford International products to a government-owned national oil company, believing that those discounts were being used to create a slush fund with which to make bribe payments to decision-makers at the national oil company. Between 2005 and 2011, WOTME paid approximately $15 million in volume discounts to the distributor.
Weatherford International’s failure to implement effective internal accounting controls also permitted corrupt conduct relating to the United Nations’ Oil for Food Program to occur, according to court documents. Between in or about February 2002 and in or about July 2002, WOTME paid approximately $1,470,128 in kickbacks to the government of Iraq on nine contracts with Iraq’s Ministry of Oil, as well as other ministries, to provide oil drilling and refining equipment. WOTME falsely recorded these kickbacks as other, seemingly legitimate, types of costs and fees. Further, WOTME concealed the kickbacks from the U.N. by inflating contract prices by 10 percent.
According to court documents, these corrupt transactions in Africa and the Middle East earned Weatherford International profits of $54,486,410, which were included in the consolidated financial statements that Weatherford International filed with the SEC .
In addition to the guilty plea by Weatherford Services, the deferred prosecution agreement entered into by Weatherford International and the Department requires the company to cooperate with law enforcement, retain an independent corporate compliance monitor for at least 18 months, and continue to implement an enhanced compliance program and internal controls designed to prevent and detect future FCPA violations. The agreement acknowledges Weatherford International’s cooperation in this matter, including conducting a thorough internal investigation into bribery and related misconduct, and its extensive remediation and compliance improvement efforts.
Export Control Violations
According to court documents filed today in a separate matter, between 1998 and 2007, Weatherford International and some its subsidiaries engaged in conduct that violated various U.S. export control and sanctions laws by exporting or re-exporting oil and gas drilling equipment to, and conducting Weatherford business operations in, sanctioned countries without the required U.S. Government authorization. In addition to the involvement of employees of several Weatherford International subsidiaries, some Weatherford International executives, managers, or employees on multiple occasions participated in, directed, approved, and facilitated the transactions and the conduct of its various subsidiaries.
This conduct involved persons within the U.S.-based management structure of Weatherford International participating in conduct by Weatherford International foreign subsidiaries, and the unlicensed export or re-export of U.S.-origin goods to Cuba, Iran, Sudan, and Syria. Weatherford subsidiaries Precision Energy Services Colombia Ltd. (PESC) and Precision Energy Services Ltd. (PESL), both headquartered in Canada, conducted business in the country of Cuba. Weatherford’s subsidiary Weatherford Oil Tools Middle East (WOTME), headquartered in the United Arab Emirates (UAE), conducted business in the countries of Iran, Sudan, and Syria. Weatherford’s subsidiary Weatherford Production Optimisation f/k/a eProduction Solutions U.K. Ltd. (eProd-U.K.), headquartered in the United Kingdom, conducted business in the country of Iran. Weatherford generated approximately $110 million in revenue from its illegal transactions in Cuba, Iran, Syria and Sudan.
To resolve these charges, Weatherford and its subsidiaries will pay a total penalty of $100 million, with a $48 million monetary penalty paid pursuant to a deferred prosecution agreement, $2 million paid in criminal fines pursuant to the two guilty pleas, and a $50 million civil penalty paid pursuant to a Department of Commerce settlement agreement to resolve 174 violations charged by Commerce’s Bureau of Industry and Security. Weatherford International and certain of its affiliates are also signing a $91 million settlement agreement with the Department of the Treasury to resolve their civil liability arising out of the same underlying course of conduct, which will be deemed satisfied by the payments above.
The FCPA case was investigated by the FBI’s Washington Field Office and its team of special agents dedicated to the investigation of foreign bribery cases. The case is being prosecuted by Trial Attorney Jason Linder of the Criminal Division’s Fraud Section, with the assistance of Assistant U.S. Attorney Mark McIntyre of the Southern District of Texas. The case was previously investigated by Fraud Section Trial Attorneys Kathleen Hamann and Allan Medina, with assistance from the Criminal Division’s Asset Forfeiture and Money Laundering Section. The Justice Department also acknowledges and expresses its appreciation for the significant assistance provided by the SEC’s FCPA Unit.
The export case was investigated by the Department of Commerce’s Bureau of Industry and Security, Office of Export Enforcement, and the Department of the Treasury’s Office of Foreign Assets Control. The case is being prosecuted by Assistant U.S. Attorney S. Mark McIntyre and was previously investigated by Assistant U.S. Attorney Jeff Vaden.
Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa .Justice Department Seeks to Intervene in Lawsuit Alleging H&R Block’s Tax Preparation Website Is Inaccessible to Individuals with DisabilitiesRead the Press Release
The Civil Rights Division and U.S. Attorney Carmen Ortiz announced today that they have moved to intervene in National Federation of the Blind et al v. HRB Digital LLC et al, a private lawsuit alleging disability discrimination by HRB Digital LLC and HRB Tax Group Inc., subsidiaries of H&R Block Inc. In the memorandum and proffered complaint filed by the United States in support of its motion to intervene, the United States alleges that the H&R Block companies discriminate against individuals with disabilities and that their website, www.hrblock.com , is being operated in violation of Title III of the Americans with Disabilities Act (ADA), notwithstanding well-established and readily available guidelines for delivering web content in an accessible manner. The motion, attached complaint in intervention and supporting memorandum were filed in U.S. District Court for the District of Massachusetts’ Boston Division.
As alleged in the filings today, H&R Block is one of the largest tax return preparers in the United States. Its companies offer a wide range of services through www.hrblock.com , including professional and do-it-yourself tax preparation, instructional videos, office location information, interactive live video conference and chat with tax professionals, hybrid online and in-store services and electronic filing. Their website, however, is not accessible to many individuals with disabilities and prevents some people with disabilities from completing even the most basic activities on the site.
Today’s filings further state that many individuals with disabilities, including, among others, people who are blind, deaf or have physical disabilities with an impact on manual dexterity, use computers and the Internet with the help of assistive technologies. For example, screen reader software makes audible information that is otherwise presented visually on a computer screen; captioning translates video narration and sound into text; and keyboard navigation allows keyboard input rather than a mouse to navigate a website for individuals with visual, hearing or manual dexterity disabilities. Such technologies have been widely used for some time and there are readily available, well-established, consensus-based guidelines – the Web Content Accessibility Guidelines (WCAG) 2.0 – for making web content accessible to individuals with disabilities.
The complaint in intervention seeks a court order that would ensure that tax services offered through www.hrblock.com are fully and equally accessible to individuals with disabilities. The department also seeks an award of monetary damages for aggrieved individuals, including the two named plaintiffs and a civil penalty to vindicate the public interest.
“The web revolutionizes our lives daily and maximizes our independence in many areas,” said Acting Assistant Attorney General Jocelyn Samuels for the Civil Rights Division. “Inaccessible websites of public accommodations are not simply an inconvenience to individuals with disabilities – they deny persons with disabilities access to basic goods and services that people without disabilities take advantage of every day. An inaccessible website can also mean a business loses a customer it never knew it had.”
“We are building an electronic world in which we ever-increasingly live,” said U.S. Attorney Carmen Ortiz for the District of Massachusetts. “All benefit when, as the ADA requires, we build our online businesses, schools and other public spaces in a manner equally accessible to all.”
Title III of the ADA prohibits discrimination on the basis of disability by public accommodations in the full and equal enjoyment of the goods, services, facilities, privileges, advantages and accommodations. It also requires public accommodations to take necessary steps to ensure individuals with disabilities are not excluded, denied services, segregated or otherwise treated differently because of the absence of auxiliary aids and services, such as accurate captioning of audible materials and labeling of visual materials.
To find out more about federal disability rights laws, call the department’s toll-free ADA information line at 800-514-0301 or 800-514-0383 (TDD) or access its ADA website at www.ada.gov . ADA complaints, including those involving the inaccessibility of www.hrblock.com , may be filed by email to [email protected] .
Accessible versions of the motion to intervene, proposed complaint to intervene and memorandum in support of the motion can be found at www.ada.gov.
Justice Department Charges Minn. Condominium Association, Management Company and Property Manager with Discrimination Against Families with ChildrenRead the Press Release
The Justice Department filed a lawsuit today against the homeowner’s association, management company and property manager of a Minnetonka, Minn., condominium complex, alleging that they discriminated against families with children in violation of the Fair Housing Act.
“Families with children should have the same ability to enjoy their homes as all other tenants,” said Acting Assistant Attorney General Jocelyn Samuels for the department’s Civil Rights Division. “The department is committed to enforcing the Fair Housing Act and ensuring that housing providers do not enact policies that discriminate against tenants or deprive tenants of certain amenities due to their familial status.”
The lawsuit, filed in the U.S. District Court for the District of Minnesota, involves the Condominiums of Greenbrier Village, a six-building complex that contains approximately 462 condominium units. The lawsuit alleges that the Greenbrier Village homeowners association, property management company Gassen Company Inc. and Gassen employee Diane Brown adopted and enforced policies that discriminatorily limited or prohibited children from playing in the complex’s common grounds.
This lawsuit arose as a result of a complaint filed with the Department of Housing and Urban Development (HUD) by one family with children who lives at Greenbrier Village. After HUD investigated the complaint, it issued a charge of discrimination and the matter was referred to the department.
“Housing providers cannot impose more restrictive policies on families with children or evict them simply because their children leave the unit,” said HUD Acting Assistant Secretary Bryan Greene for Fair Housing and Equal Opportunity. “HUD and DOJ are committed to enforcing the fair housing rights of all people, including families with children.”
The lawsuit seeks a court order prohibiting future discrimination by the defendants, monetary damages for those harmed by the defendants’ actions and a civil penalty.
“Each person is entitled to fair treatment under the law, a foundation for all thriving communities,” said Acting U.S. Attorney John R. Marti of the District of Minnesota. “Unfortunately, families with children may be confronted with discrimination in housing. The Department of Justice and the United States Attorney’s Office will intervene to obtain fair treatment for all Minnesotans.”
The federal Fair Housing Act prohibits discrimination in housing on the basis of race, color, religion, sex, familial status, national origin and disability. Individ uals who believe they may have been victims of housing discrimination may contact the department at 1-800-896-7743 or by e-mail at [email protected] , or contact HUD at 1-800-669-9777 or through www.hud.gov/fairhousing .
The complaint is an allegation of unlawful conduct. The allegations still must be proven in federal court.
In 61st Year of DOJ Awards Program, Attorney General Holder Recognizes Department Employees and Others for Their ServiceRead the Press Release
Attorney General Eric Holder recognizes 270 Justice Department employees for their distinguished public service today as part of the 61st Annual Attorney General Awards program. In addition, 53 other individuals, including federal employees and civilians, are also honored for their work. These annual awards recognize department employees and other individuals for their dedication to carrying out the Department of Justice’s mission.
“Despite significant challenges, evolving threats, and unprecedented budgetary difficulties, these dedicated employees have exemplified the very best of what it means to serve the American people,” said Attorney General Eric Holder. “Over the past year, each of them has gone above and beyond the call of duty to carry out the Justice Department’s critical mission and protect our fellow citizens. Some of these remarkable men and women have placed their own lives at great risk in order to save others. All of these employees and their families have made tremendous sacrifices in the name of public service. I am proud, and humbled, to count them as colleagues. And I congratulate them on this prestigious and well-deserved recognition.”
Attorney General Holder bestows the Attorney General’s Award for Exceptional Service – the department’s highest award – to two teams this year. The awards are given to teams involved in the defense of the Affordable Care Act and the prosecution of companies involved in the Deepwater Horizon rig disaster.
The Attorney General’s Award for Exceptional Service is presented to the following team for its successful defense of the Affordable Care Act, a landmark piece of legislation. With high stakes and a staggering volume of work to be done, this team withstood intense pressure and showcased superb litigation skills in drafting the law’s defense to constitutional challenges and lawsuits.
From the Civil Division Federal Programs Branch recipients include: Jennifer D. Ricketts, Director; Sheila M. Lieber, Deputy Director; Brian G. Kennedy and Joel McElvain, Senior Trial Counsels; and Eric Beckenhauer, Michelle R. Bennett, Ethan P. Davis, Kimberly Herb, Tamra T. Moore, Scott A. Risner, Justin M. Sandberg, Eric Richardson Womack and Kathryn L. Wyer, Trial Attorneys. From the Appellate Staff of the Civil Division, recipients include: Mark B. Stern and Michael S. Raab, Appellate Litigation Counsels; Alisa B. Klein, Appeals Counsel; and Samantha L. Chaifetz, Anisha Dasgupta and Dana Kaersvang, Trial Attorneys. From the Office of the Solicitor General, recipients include: Edwin S. Kneedler, Deputy Solicitor General, and Joseph R. Palmore, Trial Attorney. From the Office of Legal Counsel, recipients include: Leondra R. Kruger, Deputy Assistant Attorney General. From the Appellate Staff of the Tax Division, recipients include: Gilbert S. Rothenberg, Section Chief; Francesca Ugolini, Attorney; and Teresa E. McLaughlin, Reviewer.
The Attorney General’s Award for Exceptional Service is also presented to the following team that dedicated itself to the historic prosecution of BP in connection with the Deepwater Horizon rig disaster and its aftermath. From the Deepwater Horizon Task Force, recipients include: John D. Buretta, Director and Principal Deputy Assistant Attorney General for the Criminal Division (former); Avi Gesser, Deputy Director and Counsel to the Chief of the Fraud Section (former); and Derek A. Cohen, Deputy Director and Deputy Chief of the Fraud Section (former. From the Fraud Section of the Criminal Division, recipients include: Rohan A. Virginkar, Trial Attorney, and Katelynn Loughnane, Paralegal. From the Environmental Crimes Section of the Environment and Natural Resources Division, recipients include: Colin L. Black, Trial Attorney. From the U.S. Attorney’s Office for the Eastern District of Pennsylvania, recipients include Scott M. Cullen, Assistant U.S. Attorney. From the U.S. Attorney’s Office for the Eastern District of Louisiana, recipients include: Richard R. Pickens II, Assistant U.S. Attorney. From the New Orleans Field Office of the FBI, recipients include: Sandra M. Zulli, Supervisory Special Agent; Kelly C. Bryson, Michael R. Forrester, J.R. Smith, and Jeffrey T. Wright, Special Agents; Barbara G. O’Donnell, Special Agent (retired); and Darrell W. Hill, Intelligence Analyst.
The Attorney General’s Award for Exceptional Heroism recognizes an extraordinary act of courage and voluntary risk of life during the performance of official duties. One award is presented this year.
The Attorney General’s Award for Exceptional Heroism goes to a team of federal, state and local law enforcement officers involved in the apprehension of a dangerous fugitive on Feb. 29, 2012 in Cambridge, Md. The 30-minute gun battle that ensued with the fugitive injured a member of the team, who ultimately was saved by the courageous efforts of his colleagues. After the team member was injured, his colleagues urged him to jump out of a window, where he was quickly rescued and taken to a police vehicle. During the firefight, the injured detective also managed to protect the fugitive’s girlfriend from the ensuing gunfire. From the Investigative Operations Division of the U.S. Marshals Service, recipients include: Barry S. Boright, Supervisory Inspector, and Brian P. Sheppard, Inspector. From the Maryland State Police, recipients include: Christopher Snyder, Senior Trooper. From the Wicomico County Sheriff’s Office, recipients include: Thomas Funk, Detective. From the Salisbury Police Department, recipients include: Milton Rodriguez, Detective. From the Cambridge Police Department, recipients include: Christopher Flynn and Antoine Patton, Detectives; Justin Todd, Sergeant; and Joseph Jones, Private First Class.
The Edward H. Levi Award for Outstanding Professionalism and Exemplary Integrity pays tribute to the memory and achievements of former Attorney General Edward H. Levi, whose career as an attorney, law professor, dean and public servant exemplified these qualities in the best traditions of the department. This year, the award is presented to Ronald A. Cimino, Deputy Assistant Attorney General for Criminal Matters in the Office of the Assistant Attorney General for the Tax Division.
Cimino, through his nearly 40-year career, has enabled the government to achieve successful results in many important criminal tax cases, each time demonstrating himself to be a primer criminal litigator and senior manager. Over the course of his service to the department, Cimino has mentored and inspired countless attorneys, and is held in the highest regard within the tax community.
The Mary C. Lawton Lifetime Service Award recognizes employees who have served at least 20 years in the Department and have demonstrated high standards of excellence and dedication throughout their careers. This year’s award is presented to Daniel L. Koffsky, Deputy Assistant Attorney General in the Office of Legal Counsel (OLC). Koffsky is honored for his exceptional contributions to OLC, the department, and the rest of the Executive Branch, including especially the sharing of his expertise across an extremely wide range of legal topics. A living repository of OLC’s precedents and practice, Koffsky has brilliantly served the department and his colleagues. He is a lawyer with the utmost integrity and judgment.
The William French Smith Award for Outstanding Contributions to Cooperative Law Enforcement is an honorary award granted to recognize state and local law enforcement officials who have made significant contributions to cooperative law enforcement endeavors. This year’s award is presented to Timothy J. Johnstone, Executive Director of the Sacramento Regional Threat Assessment Center of the Central California Intelligence Center, for his development of the office’s “Fusion Center” model in the Eastern District of California. With his leadership, more than 250 law enforcement agencies over 88,000 square miles and 34 counties have been able to communicate effectively with one another on key law enforcement planning matters.
The Attorney General’s Award for Meritorious Public Service is the top public service award granted by the Department of Justice, and is designed to recognize the most significant contributions of citizens and organizations that have assisted the department in the accomplishment of its mission and objectives. This year’s award is presented to Ernie Allen, President and Chief Executive Office (former) of the National Center for Missing and Exploited Children. Allen, who served from 1984 until 2012 at the Center, is awarded for his leadership in circulating millions of photos of missing children and increasing the organization’s recovery rate from 62 percent in 1990 to 97 percent today.
The Attorney General’s Award for Distinguished Service is the Justice Department’s second-highest award for employee performance. The recipients of this award exemplify the highest commitment to the department’s mission. Ten awards are presented this year to individuals and teams.
One award is presented to Richard Zayas, Special Agent in the Special Operations Division of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF). Special Agent Zayas displayed exemplary performance in the creation of Operation Gideon, an undercover operation designed to use ATF agents to reduce violent crime and target firearms. Special Agent Zayas directed numerous undercover operations that resulted in 200 defendants being referred for federal prosecution and more than 100 firearms being seized.
The Attorney General’s Award for Distinguished Service is also presented to a team for its extraordinary work in implementing the President’s conclusion that the Defense of Marriage Act (DOMA) is unconstitutional and warrants heightened scrutiny. This dedicated team of litigators and staff showed a deep understanding of the law and sound strategic vision in litigating matters ranging from bankruptcy to federal benefits and immigration.
From the Civil Division Office of Immigration Litigation, recipients include: Jeffrey S. Robins, Assistant Director; Aaron S. Goldsmith, Senior Litigation Counsel; and Timothy M. Belsan and Jesi J. Carlson, Trial Attorneys. From the Appellate Staff of the Civil Division, recipients include: Robert E. Kopp, Director (retired); Michael Jay Singer, Assistant Director; and August E. Flentje, Helen L. Gilbert, Adam C. Jed, and Benjamin S. Kingsley (former), Trial Attorneys. From the Federal Programs Branch of the Civil Division, recipients include: Arthur R. Goldberg, Assistant Director; Christopher R. Hall and Jean Lin, Senior Counsels; Steven Y. Bressler and W. Scott Simpson, Senior Trial Counsels; and Judson O. Littleton, Trial Attorney. From the Office of the Assistant Attorney General for the Civil Rights Division, recipients include: Matthew S. Nosanchuk, Senior Counsel to the Assistant Attorney General (former). From the Appellate Staff of the Civil Rights Division, recipients include: Holly Thomas, Trial Attorney, and Sharon M. McGowan, Trial Attorney (former). From the Office of the Attorney General, recipients include Jenny R. Mosier, Deputy Chief of Staff and Counselor to the Attorney General. From the Office of Legal Policy, recipients include: Lamar W. Baker, Deputy Assistant Attorney General (former), and Steven B. Siger, Chief of Staff. From the Office of the Solicitor General, recipients include Pratik A. Shah and Eric J. Feigin, Trial Attorneys. From the Office of the General Counsel for the Executive Office for the U.S. Trustees, recipients include: Lisa A. Tracy, Deputy General Counsel.The Attorney General’s Award for Distinguished Service also is presented to a team of attorneys for their outstanding investigation and litigation in United States v. Wells Fargo Bank. Their efforts led to a settlement of $234 million, including compensation for more than 38,000 African-American and Hispanic borrowers nationwide who were systemically steered into subprime mortgage products or charged higher prices because of their race or national origin. From the Office of the Assistant Attorney General for the Civil Rights Division, recipients include Eric I. Halperin, Special Counsel for Fair Lending. From the Housing and Civil Enforcement Section of the Civil Rights Division, recipients include Steven H. Rosenbaum, Chief; Jon M. Seward, Deputy Chief; and Elizabeth Parr Hecker, Holly C. Lincoln and Coty R. Montag, Trial Attorneys.
The Attorney General’s Award for Distinguished Service also goes to a team recognized for their successful investigation and prosecution of Colonial Bank/Taylor, Bean and Whitaker. Within weeks of the cooperation of an insider familiar with the conspirators’ actions during the financial crisis, this dedicated team of prosecutors and federal agents executed search warrants that ultimately led to an indictment returning only 11 months later for wire and securities fraud. From the Fraud Section of the Criminal Division, recipients include: Patrick F. Stokes, Deputy Chief, Robert A. Zink, Trial Attorney, Brigham Q. Cannon and Charles D. Reed, Trial Attorneys (former), and Jennifer Z. Gindin, Paralegal Specialist (former); From the Asset Forfeiture and Money Laundering Section of the Criminal Division, recipients include: Jeannette M. Gunderson, Acting Assistant Deputy Chief. From the Appellate Staff of the Criminal Division, recipients include: Kirby A. Heller, Attorney. From the U.S. Attorney’s Office for the Eastern District of Virginia, recipients include: Charles F. Connolly, Chief of the Financial Crimes and Public Corruption Unit (former); Paul J. Nathanson, Assistant U.S. Attorney; and Lisa K. Porter, Paralegal Specialist. From the Operational Technology Division of the FBI, recipients include: W.L. Scott Bean III, Section Chief. From the Washington Field Office of the FBI, recipients include: John M. Gardner, Special Agent, and Scott J. Turner, Special Agent (retired). From the Office of Inspector General of the Federal Housing Finance Agency, recipients include: Peter C. Emerzian, Deputy Inspector General of Investigations; Paul G. Conlon, Supervisory Special Agent; Timothy A. Mowery, Senior Special Agent; and Kari E. Meyer and David A. Mosakowski, Special Agents. From the Office of the Special Inspector General for the Troubled Asset Relief Program, recipients include: C. Ed Slage, Special Agent in Charge. From the Office of Inspector General for the Federal Deposit Insurance Corporation, recipients include: John T. Crawford, Senior Special Agent.
Also being awarded with the Attorney General’s Award for Distinguished Service for their outstanding and historic achievement in successful investigation and prosecuting GlaxoSmithKline is a team of attorneys nominated for their exceptional creativity, determination and perseverance in resolving the largest health care fraud settlement in department history. The $3 billion civil and criminal resolution will significantly deter future pricing misconduct and future fraud by pharmaceutical companies who withhold important safety information about their products and seek to manipulate the marketplace. From the U.S. Attorney’s Office for the District of Massachusetts, recipients include: Sara Miron Bloom, Brian Pérez-Daple, Amanda Strachan, Susan G. Winkler and Edwin G. Winstead, Assistant U.S. Attorneys. From the Consumer Protection Branch of the Civil Division, recipients include: David A. Frank and Patrick Jasperse, Trial Attorneys. From the Civil Fraud Section of the Civil Division, recipients include: Andy J. Mao and Jamie Ann Yavelberg, Assistant Directors; and Charles J. Biro, Natalie A. Priddy, Douglas J. Rosenthal, Lisa Katz Samuels and Jeffrey A. Toll, Trial Attorneys.
The Attorney General’s Award for Distinguished Service also is presented to a team responsible for the successful investigation and conviction of Jared Lee Loughner, an Arizona man who attempted to assassinate Congresswoman Gabrielle Giffords and killed six others at a mass shooting in Tucson, Ariz. In the wake of this tragedy, the team demonstrated skill, professionalism and compassion in dutifully carrying out their responsibilities. Due to the team’s efforts, Loughner was sentenced to serve seven consecutive life terms and an additional 140 consecutive years in prison. From the U.S. Attorney’s Office for the District of Arizona, recipients include: Wallace H. Kleindienst, Senior Litigation Counsel; Mary Sue Feldmeier, Beverly K. Anderson, Christina M. Cabanillas and Bruce M. Ferg, Assistant U.S. Attorneys; Shawn M. Cox, Victim Witness Coordinator; Delores J. Arter and Mary-Anne Estrada, Victim Witness Specialists; Thomas J. Jefferson, Victim Witness Specialist (former); Wendy A. Dolph, Supervisory Legal Assistant; Celeste Maniscalco, Legal Assistant; and Sylvia Romero, Appellate Paralegal Specialist. From the Tucson Field Office of the FBI, recipients include: Tony M. Taylor Jr. and Alan P. Misiaszek, Special Agents.
The Attorney General’s Award for Distinguished Service also goes to a team involved in the successful investigation and prosecution of public officials in Cuyahoga County, Ohio, effectively ending the reign of a corrupt regime in the state’s largest county. This team proved at several trials that a County Commissioner orchestrated a decade-long racketeering conspiracy that involved almost 20 separate schemes and more than 100 bribes. From the U.S. Attorney’s Office for the Northern District of Ohio, recipients include: Antoinette T. Bacon, Henry DeBaggis, Nancy L. Kelley, Sharon L. Long, Robert J. Patton, Justin J. Roberts, Ann C. Rowland and Bernard A. Smith, Assistant U.S. Attorneys. From the Cleveland Division of the FBI, recipients include: Gregory D.L. Curtis, Melissa L. Fortunato, Raymond Michael Massie, Kirk P. Spielmaker and William M. Werner, Special Agents. From the Wilmington Resident Agency of the FBI, recipients include: Christine C. Oliver, Special Agent. From the Internal Revenue Service of the U.S. Department of Treasury, recipients include: Kelly D. Fatula, Special Agent.
Also awarded the Attorney General’s Award for Distinguished Service are members of a team that demonstrated exemplary performance in Operation Red Coalition, an investigation into Manssor Arbabsiar, a 56-year-old naturalized U.S. citizen from Iran who attempted to hire a Mexican drug dealer to assassinate the Saudi Ambassador to the United States. The team’s dedicated service helped to foil the elaborate plan coordinated in part by members of the highest levels of the Iranian government. From the Houston Field Office of the FBI, recipients include: Christopher G. Raia and O. Robert Woloszyn, Special Agents; Kenneth S. Smith, Intelligence Analyst; and Patricia Swagerty, Forensic Accountant. From the Detroit Field Office of the FBI, recipients include: Matthew Aken, Special Agent. From the Washington Field Office of the FBI, recipients include: Thatcher P. Mohajerin, Assistant Special Agent in Charge. From the Security Division of the FBI, recipients include: Luis G. Ortiz, Supervisory Special Agent. From the Counterterrorism Division of the FBI, recipients include: April Yufeng Qian and Liane K. Roach, Intelligence Analysts. From the Baghdad Attaché for the International Operations Division of the FBI, recipients include: James F. Walsh Jr., Supervisory Special Agent. From the Office of the General Counsel of the FBI, recipients include: John B. O’Keefe, General Attorney. From the Houston Field Division of the Drug Enforcement Agency (DEA), recipients include: James R. Thornton and Nathaniel C. Fountain, Special Agents. From the U.S. Attorney’s Office for the Southern District of New York, recipients include: Edward Y. Kim and Glen A. Kopp, Assistant U.S. Attorneys.
Also awarded the Attorney General’s Award for Distinguished Service is Dean C. Sovolos, Special Agent in the New York
Field Office of the FBI. Special Agent Sovolos is nominated for his role as a program manager on the New York Field Office Counterterrorism squad for the United Kingdom (UK) portfolio. The UK is widely deemed to be one of the most important international partners in fighting terrorism, and the United States’ relationship with the UK serves as a model for other European nations. Moreover, Special Agent Sovolos has worked to disrupt terrorist cells and enhance the FBI’s relationship with the UK. He manages a caseload of more than 15 investigations and has advanced matters of significance to the United States.The Attorney General’s Award for Distinguished Service also goes to the team responsible for ensuring that the department sustained its clean financial audit opinion. This opinion matters as it demonstrates to the American taxpayers that the department’s finances associated with a $28 billion budget are sound. In the face of shrinking resources and avenues to conduct audit reviews and evaluate internal controls, the team was able to design and deploy many cost saving initiatives that did not jeopardize the outcome of the audit. From the Quality Control and Compliance Group of the Financial Staff in the Justice Management Division, recipients include: Stephanie A. Irby, Assistant Director; Yolanda Little, Deputy Assistant Director; Vu C. Truong, Supervisory Computer Specialist; and Lauren M. Webster, Accountant. From the Financial Statements Group of the Finance Staff of the Justice Management Division, recipients include: Valerie D. Grant, Assistant Director; David M. Bethea, Deputy Assistant Director; and Jerri N. Jones, Accountant.
The Award for Excellence in Law Enforcement recognizes outstanding professional achievements by law enforcement officers of the Department of Justice. Two awards are presented this year.
The Award for Excellence in Law Enforcement is presented to the team that investigated organized drug crime in Florida and had a far reaching impact, from Miami Dade and Broward Counties to Colombia, Mexico, Amsterdam, Spain and Greece. Due to the highly competent nature of their undercover investigations, several drug “kingpins,” operating abroad to complicate prosecutorial efforts, were foiled and their operations crippled, preventing thousands of kilograms of cocaine and other drugs from becoming available. From the Miami Field Division of the DEA, recipients include: Daniel G. Escobar, Group Supervisor; and Scott G. Meisel, Christopher C. Goumenis, Victoria J. Metker, Kirk L. Johnson, and Kristine E. Kibble, Special Agents. From the North Miami Beach Police Department, recipients include: William Beauparlant, Sergeant, and Sergio Diaz, Task Force Agent. From the North Bay Village Police Department, recipients include: John Costa, Task Force Agent. From the Coconut Creek Police Department, recipients include: Kevin Vernetti, Sergeant.
Another Award for Excellence in Law Enforcement is presented to John Jaehnig, Senior Inspector of the U.S. Marshals Service’s Investigative Operations Division, for going above and beyond the call of duty to bring justice to those wanted for the kidnapping and murder of two witnesses in a shooting trial. After leads began to diminish, Senior Inspector Jaehnig’s investigative efforts narrowed down the search for the two kidnapped women and he ultimately developed information which led authorities to a Detroit city park on March 28, 2012, where the young ladies’ remains were recovered. His investigative measures also led to an additional suspect who had been hired to commit these crimes. His efforts resulted in the conviction of all five defendants involved.
The Attorney General’s Award for Exceptional Service in Indian Country recognizes extraordinary efforts by department employees who demonstrate the department’s commitment to fighting crime in Indian Country. This award is being presented to a team of dedicated department attorneys and staff who fought to combat violence against Native American women. Due to their exceptional work, tribes will be able to prosecute non-Indian perpetrators of domestic violence in Indian Country for the first time in decades. This system-wide change in Indian Country will hold accountable all perpetrators of domestic and dating violence against women regardless of race or tribal affiliation.
From the Office of the Associate Attorney General, recipients include: Samuel Hirsch, Deputy Associate Attorney General. From the Office of Violence Against Women, recipients include: Virginia S. Davis, Deputy Director for Policy Development and Communication; Lorraine P. Edmo, Deputy Director for Tribal Affairs; and Jennifer E. Kaplan, Supervisory Attorney-Advisor. From the Appellate Staff of the Criminal Division, recipients include: Richard A. Friedman, Appellate Attorney. From the Office of Legal Education in the Executive Office for U.S. Attorneys, recipients include: Leslie A. Hagen, National Indian Country Training Coordinator. From the Office of the Assistant Attorney General in the Office of Justice Programs, recipients include: Eugenia Tyner-Dawson, Senior Advisor for Tribal Affairs. From the Office of Public Affairs, recipients include: Wyn Hornbuckle, Public Affairs Specialist. From the Office of Tribal Justice, recipients include: Tracy S. Toulou, Director, and Gaye L. Tenoso, Deputy Director. From the Office of Legislative Affairs, recipients include: Rita Aguilar, Attorney-Advisor (former). From the Office of Legal Counsel, recipients include: Zachary Price, Attorney-Advisor (former).The Attorney General’s Award for Excellence in Management recognizes outstanding administrative or managerial achievements that have significantly improved operations and productivity, or reduced costs.
John Ely, a Management and Program Analyst in the Office of Security and Technology of the Federal Bureau of Prisons, is awarded the Attorney General's Award for Excellence in Management for his outstanding work and research into new security technologies, as applied in the correctional environment. His dedication in researching and implementing these new technologies has led to increased safety and protection of staff, inmates and the public. Ely's skill in fostering partnerships with law enforcement experts, technologists, and equipment manufacturers has benefitted the department and federal prisons, ensuring that they remain on the forefront of any developments and advancements in correctional security and employee safety.
The Attorney General’s Award for Excellence in Information Technology recognizes outstanding achievements in applying information technology to improve operations and productivity, reduce or avoid costs and solve problems. This award is presented to one team this year.
The team awarded the Attorney General’s Award for Excellence in Information Technology led the adoption of a next generation case management system for the FBI. In late 2010, when the Information Technology Branch Sentinel Agile Team assumed responsibility for the new system, it had minimal workflow capability. Upon their successful efforts, the system was fully implemented in July of 2012 and became the FBI’s case management system of record. Due to their dedicated service to the FBI, the system reduces the time it takes to serialize a case and dramatically shortens the time necessary to share information between field offices, agents and intelligence analysts. With the critical nature and complexity of today’s threats, this new management system enables the FBI to coordinate case information across the globe and is one of the most sweeping technological contributions to its mission in the agency’s history.
From the Denver Field Office of the FBI, recipients include: Nathan Burrows and Dorian Deligeorges, Special Agents. From the Las Vegas Field Office of the FBI, recipients include: Scott M. Baugher, Special Agent. From the Charlotte Field Office of the FBI, recipients include: Ronald L. Godfrey, Special Agent. From the Los Angeles Field Office of the FBI, recipients include: Nathaniel Le, Supervisory Special Agent. From the Sacramento Field Office of the FBI, recipients include: Tiffany Kelley Martin, Special Agent. From the Directorate of Intelligence, recipients include: Debra McDougall, Supervisory Intelligence Analyst. From the Counterterrorism Division of the FBI, recipients include: Timothy P. Bell, Supervisory Special Agent. From the Information Technology Services Division of the FBI, recipients include: Michael J. Malinowski, Assistant Section Chief. From the Information Technology Management Division of the FBI, recipients include: Caryl T. Tallon, Unit Chief, and Robert T. Blake, Special Assistant. From the Information Technology Engineering Division of the FBI, recipients include: Erich Wiederhold, Supervisory Special Agent; Kevin Matthew Tunks, Supervisory Information Technology Specialist; and Susan Dawn High and Michael R. Kenney, Information Technology Specialists.
The Attorney General’s Award for Excellence in Furthering the Interests of U.S. National Security recognizes outstanding achievements and contributions towards protecting U.S. national security. Two awards are presented this year.
The Attorney General’s Award for Excellence in Furthering the Interests of U.S. National Security is presented to the team that successfully convicted Mahamud Said Omar, after a nearly five-year investigation into men traveling from Minneapolis to Somalia to join the foreign terrorist organization al-Shabaab. This dedicated team of attorneys and agents crippled this recruitment program and convicted eight defendants responsible for its administration. Their efforts also resulted in cooperation from several witnesses, which provided the United States with a significant window into the activities of al-Shabaab’s leadership and the foreign fighters under their direction.
From the Counterterrorism Section of the National Security Division (NSD), recipients include: William M. Narus, Trial Attorney. From the U.S. Attorney’s Office for the District of Minnesota, recipients include: LeeAnn K. Bell, Charles J. Kovats, Jr. and John F. Docherty, Assistant U.S. Attorneys; and W. Anders Folk, Assistant U.S. Attorney (retired). From the Minneapolis Field Office of the FBI, recipients include: Earl Kent Wilson, Supervisory Special Agent; and Michael N. Cannizzaro Jr., Karie A. Gibson, Jeffrey T. Moniz, Patrick M. Rielly, Harry M. Samit, Kiann Vandenover and Scott L. Zimmerman, Special Agents. From the U.S. Department of the Army, recipients include: Corrine M. Tullos, Special Agent. From the Ramsey County Sheriff’s Office, recipients include: Bradley A. Otremba, Task Force Officer and Investigator.
Another team receiving the Attorney General’s Award for Excellence in Furthering the Interests of U.S. National Security is a team that investigated and prosecuted Khalid Ali Aldawsari, who attempted to construct a powerful improvised explosive device to target high profile locations, including the residence of a former President of the United States. With extensive coordination and technical expertise, Aldawsari was convicted after a jury trial and sentenced to life in prison for his actions.
From the Counterterrorism Section of the NSD, recipients include: David P. Cora, Trial Attorney, and Pamela J. Hall, Legal Administrative Specialist. From the Office of Intelligence of the NSD, recipients include: Robert J. Lloyd, Supervisory Attorney-Advisor, and Charles E. Luftig, Attorney-Advisor. From the U.S. Attorney’s Office for the Northern District of Texas, recipients include: Linda C. Groves and Denise Williams, Supervisory Assistant U.S. Attorneys; Jeffrey R. Haag and Matthew Kacsmaryk, Assistant U.S. Attorneys; and Clyde Richard Baker, Assistant U.S. Attorney (retired). From the Dallas Field Office of the FBI, recipients include: Kevin L. Gentry, Kathryn A. Hughes, Michael N. Orndorff and Loretta Smitherman, Special Agents. From the Laboratory Division of the FBI, recipients include: W. Mark Whitworth, Supervisory Special Agent, and Robert F. Mothershead II, Supervisory Chemist. From the Counterterrorism Division of the FBI, recipients include: R. David Collins, Unit Chief, and Michael Bonsiewich, Intelligence Analyst. From the Office of the General Counsel of the FBI, recipients include: Sunjeet Singh Randhawa, General Attorney.
The Attorney General’s Award for Equal Employment Opportunity is the department’s highest award for performance in support of the Equal Employment Opportunity Program. This year’s recipient is a team of department staff who provided an exceptional Equal Employment Opportunity (EEO) program in the Richmond Field Office of the FBI that worked towards achieving diversity and inclusion in the FBI. Each member of this program team volunteered and commendably balanced their full-time jobs with the additional EEO program duties. In 2012, the EEO committee acknowledged every federally recognized observance with educational events meant to inspire communication and raise awareness of cultural differences amongst employees. This feat is remarkable considering the field office operates without a budget for EEO programming and all costs for the events were borne through the generosity of employees and committee members. From the Richmond Field Office of the FBI, recipients include: Antoinette L. Allen, Administrative Officer; Christopher A. Thurston, Operational Support Technician; Hannah Bradley Gray, Intelligence Analyst; Freddie Hornedo, Information Technology Specialist; and Tijwana L. Simmons, Secretary.
The Attorney General’s Award for Excellence in Legal Support in the Paralegal Category goes to the Land Acquisition Section of the Environment and Natural Resources Division’s (ENRD) Betty R. Wilson, Supervisory Paralegal Specialist. For almost 40 years, Wilson has been an integral part of every federal eminent domain case brought on behalf of the United States. Without her tireless work and dedication, the ENRD Land Acquisition Section would not have been as successful in accomplishing critical land acquisitions, such as the Border Fence Initiative, vital military training, environmental preservation and development of the Flight 93 National Memorial.
The Attorney General’s Award for Excellence in Administrative Support recognizes outstanding performance in administrative or managerial support by an administrative employee or secretary. This year, the award goes to four recipients, two in the Administrative category and two in the Secretarial category. The Administrative category awardees include, Mary Sipe, Security Specialist for the Security and Emergency Planning Staff of the Justice Management Division; and Donna Gale Wright, Administrative Officer in the Memphis Regional Office of the U.S. Trustee Program. The Secretarial category awardees include: Estelle Brown, Secretary in the National Courts Section of the Commercial Litigation Section of the Civil Division; and Shanedda L. Bogan, Staff Assistant in the Office of the Assistant Attorney General for the ENRD.
The Claudia J. Flynn Award for Professional Responsibility recognizes a Department of Justice attorney who has made significant contributions in the area of professional responsibility by successfully handling a sensitive and challenging professional responsibility issue in an exemplary fashion and/or leading efforts to ensure that department attorneys carry out their duties in accordance with the rules of professional conduct. This year, the award goes to Robin C. Ashton, Counsel in the Office of Professional Responsibility (OPR). Ashton is awarded for her tireless and dedicated efforts to ensure that department attorneys and agents maintain and are held accountable to the highest standards of professional responsibility. Through skillful and creative management, she has enabled OPR to reduce its backlogged investigations and inquiries while producing thorough, well-reasoned reports of its investigations.
The Attorney General’s Award for Outstanding Service in Freedom of Information Act Administration recognizes exceptional dedication and effort to the implementation of the Freedom of Information Act. This year’s recipient is Varudhini Chilakamarri, Trial Attorney in the Federal Programs Branch of the Civil Division. In less than one year, Chilakmarri has provided exceptional dedication to the implementation of the Freedom of Information Act (FOIA), and has effected significant institutional changes that have fostered more coordinated, timely, and accurate responses to FOIA requesters. The policies she has enacted have ensured that department leadership offices are well-informed about the department’s FOIA requests and has improved the Office of Information Policy’s ability to facilitate coordination between components where needed.
The Attorney General’s Award for Fraud Prevention recognizes exceptional dedication and effort to prevent, investigate, and prosecute fraud, white-collar crimes, and official corruption. Awards are presented to two teams this year.
An award is presented to the team that spearheaded an investigation into a local law enforcement entity that was engaging in a high volume of anti-money laundering operations without required federal oversight. As a result, this team facilitated the department’s recovery of approximately $1.2 million in Equitable Sharing Program funds from that law enforcement entity. From the Investigations Division of the Miami Field Office of the Office of the Inspector General, recipients include Matthew L. McCloskey, Special Agent. From the Asset Forfeiture and Money Laundering Section of the Criminal Division, recipients include: Gene Patton, Assistant Deputy Chief.
Also receiving the Attorney General’s Award for Fraud Prevention is the team leading efforts to prosecute tax refund fraud committed through identity theft, which victimizes unsuspecting, law-abiding citizens and steals billions of dollars from the government. This team brought great expertise and energy to the prosecution of individuals and groups who commit these crimes by pushing for long prison sentences that serve as a strong deterrent for would-be future offenders. From the Southern Region of the Criminal Enforcement Section of the Tax Division, recipients include: Larry J. Wszalek, Assistant Chief; and Michael C. Boteler, Charles M. Edgar Jr., Justin K. Gelfand, and Jason H. Poole, Trial Attorneys. From the U.S. Attorney’s Office for the Middle District of Alabama, recipients include: Todd A. Brown, Assistant U.S. Attorney.
The Attorney General’s Award for Outstanding Contributions to Community Partnerships for Public Safety recognizes outstanding achievement in the development and support of community partnerships designed to address public safety within a community. The award recognizes the significant contributions of citizens and organizations that have assisted the department in the accomplishment of these programs. This year’s award is to a team of individuals responsible for a collaborative effort to reduce youth violence in New York City. This team founded the Saturday Night Lights program led by the Juvenile Justice and Reentry Unit of the Manhattan District Attorney’s Office. The partnership of this program with local law enforcement and social service agencies helps reduce youth violence and increase high school graduation rates of students in Manhattan, N.Y.
From the New York Field Division of the DEA, recipients include: Wilbert L. Plummer, Associate Special Agent in Charge, and Michael Abraham Jr., Special Agent. From the New York County District Attorney’s Office, recipients include: Cyrus R. Vance Jr., District Attorney; Chauncey Parker, Executive Assistant District Attorney for Crime Prevention Strategies; Estelle Strykers, Director; and Joselinne Minaya, Supervisor. From the Community Affairs Bureau of the New York City Police Department, recipients include: Philip Banks, Chief, and Kevin O’Connor, Assistant Commissioner for Juvenile Justice. From the New York City Housing Authority, recipients include: John Rhea, Commissioner. From Pro Hoops Inc., recipients include: Ross Burns, Director. From AllStarr Volleyball, recipients include: Reilly Starr, Managing Director. From the Police Athletic League, recipients include: Alana Sweeny, Executive Director. From the Henry Street Settlement, recipients include: Greg Rideout, Deputy Program Officer for Youth Services and Workforce Development. From the Supportive Children Advocacy Network, recipients include: Lew Zuchman, Executive Director. From Children’s Village, recipients include: Tonyna McGhee, Assistant Vice President and Director.
The Cubby Dorsey Award for Outstanding Contributions by a Wage Grade System Employee recognizes extraordinary performance and contributions by wage grade system employees, including laborers, mechanics and skilled craft workers. One award is presented this year to Anthony Thomas Naumoff, Maintenance Mechanic Supervisor, in the Facilities and Logistics Services Division of the FBI. Naumoff is awarded for his responsibility to all around-the-clock mission critical facility operations at the FBI’s headquarters building. When a potentially devastating leak threatened the operations of critical infrastructure, Naumoff quickly solved the issue and prevented a major failure of communications that would have threatened the FBI’s day-to-day mission.
The Attorney General’s Award for Outstanding Contributions by a New Employee recognizes exceptional performance and notable accomplishments towards the department’s mission by an employee with fewer than five years of federal career service. Recipients include: Colleen Melody, Trial Attorney for the Housing and Civil Enforcement Section of the Civil Rights Division; James M. Crotty, Intelligence Research Specialist in the Intelligence Division of the DEA; Timothy C. Perry, Assistant U.S. Attorney for the U.S. Attorney’s Office in the Southern District of California; and Ashley Lauren Hall, Victim Specialist in the New Haven Field Office of the FBI.
The John Marshall Awards are the Department of Justice’s highest awards offered to attorneys, for contributions and excellence in specialized areas of legal performance. Thirteen awards in nine categories are presented this year.
The John Marshall Award for Trial of Litigation is presented to attorneys from the Civil Rights Division and U.S. Attorney’s Office for the Eastern District of Wisconsin for their extraordinary work to secure justice in United States v. Cates, a matter involving the sexual assault of a victim by an individual using his enforcement authority as a Milwaukee police officer. Seizing on the defendant’s inconsistent statements, the team of attorneys established that the victim had been truthful about the event. After a hotly contested trial, the jury convicted the defendant for raping the victim, and sentenced him to serve 24 years in prison. From the Criminal Section of the Civil Rights Division, recipients include: Saeed Mody, Trial Attorney. From the U.S. Attorney’s Office for the Eastern District of Wisconsin, recipients include: Mel S. Johnson, Assistant U.S. Attorney.
The John Marshall Award for Trial of Litigation is also presented to a team of attorneys from the Criminal Division and the U.S. Attorney’s Offices for the Southern District of Texas and the District of Columbia for the successful prosecution of Allen Stanford, a perpetrator of one of the largest white collar crimes in history. The tenacity and skill of this team of attorneys directly led to a 110-year prison conviction for devastating the lives of over 30,000 victims in a fraudulent scheme that cost the perpetrator’s investors more than $7 billion in losses. Over the course of two hard-fought jury trials, this team’s work ethic and meticulous attention to detail proved successful in finding justice for these victims. From the Fraud Section of the Criminal Division, recipients include: Jeffrey A. Goldberg and William J. Stellmach, Deputy Chiefs, and Andrew H. Warren, Trial Attorney. From the U.S. Attorney’s Office for the Southern District of Texas, recipients include: Jason S. Varnado, Senior Litigation Counsel; Kristine E. Rollinson, Assistant U.S. Attorney; and Gregg J. Costa, Assistant U.S. Attorney (former). From the U.S. Attorney’s Office for the District of Columbia, recipients include: Kondi Kleinman, Assistant U.S. Attorney and former Trial Attorney for the Criminal Division’s Asset Forfeiture and Money Laundering Section.
The John Marshall Award for Participation in Litigation was awarded to members of the team that successfully negotiated the consent decree that will lead to the reform of the New Orleans Police Department after months of intense negotiation and a long history of civil rights violations within the NOPD. The team worked for nearly three years to address the problems within the NOPD, resulting in a consent decree that was the broadest ever entered by the department to correct a police pattern or practice authority. These efforts worked to ensure that law enforcement agencies respect the civil rights of all individuals. From the Office of the Assistant Attorney General, recipients include: Roy L. Austin, Deputy Assistant Attorney General. From the Special Litigation Section of the Civil Rights Division, recipients include: Christy E. Lopez and Shaheena A. Simons, Deputy Chiefs; and Emily A. Gunston, Corey M. Sanders and Jude J. Volek, Trial Attorneys. From the U.S. Attorney’s Office for the Western District of Tennessee, recipients include: Stephen C. Parker, Assistant U.S. Attorney.
Another John Marshall Award for Participation in Litigation is awarded to an attorney from the department’s Office of International Affairs, Mary D. Rodriguez. In little more than a decade, Rodriguez has transformed the United States? extradition relationship with Mexico from a hit-or-miss effort in which a mere dozen fugitives were extradited in 2000, to a record 115 fugitives in 2012 returned to the United States to face trial in federal and state courts. In those years, which ultimately saw the extradition of nearly 800 defendants to the United States, Ms. Rodriguez, tackled every challenge, secured landmark decisions in the Mexican Supreme Court, and met every setback with greater determination to succeed. In each case she used her experience as a federal prosecutor, as well as her deep knowledge of Mexican law and political structures, to solve legal problems and overcome bureaucratic inertia to capitalize on the law enforcement cooperation that emerged in Mexico.
The John Marshall Award for Support of Litigation is presented to the Deputy Chief of the Capital Case Section of the Criminal Division, Gwynn “Charlie” Kinsey, for his exceptional contributions to pursuing capital punishment in the most significant violent crime cases handled by department prosecutors. With more than 22 years of experience in capital matters, his holistic approach to providing guidance to federal prosecutors requires extraordinary commitment and persistence. While being asked over the past two years to significantly increase the amount of litigation-related guidance he provides to federal prosecutors, Kinsey also continues to shoulder his policy and protocol review responsibilities on behalf of the department. His work has substantially contributed to the strong partnership between the Criminal Division and the United States Attorney’s Offices, and the result of this collaboration has been the successful prosecution of numerous significant violent crime cases.
The John Marshall Award for Support of Litigation is also presented to Michael K. Baker, Georgia Garthwaite, Michael J. Krainak and Erika B. Kranz, Trial Attorneys in the Land Acquisition Section of the ENRD. This team of attorneys is awarded for their devotion to acquiring land for critical military training, including of approximately 2,560 acres within the El Centro Naval Air Facility for training use. After months of extensive discovery, motion practice, and expert witness preparation, the landowners agreed to an almost unprecedented settlement whereby they accepted only $300,000 more than the United States? initial deposit, and nearly 85 percent less than their own final valuation. The landowners originally valued the property and mining interests at several hundred million dollars and then settled at $1.5 million based on the hard work, dedication and successful investigation and negotiation by these award recipients. During these times of significant financial concerns, the nominees played a vital role in ensuring the Navy obtained property needed for military training, while also saving the government millions of dollars.
The John Marshall Award for the Handling of Appeals is presented to Alexander P. Robbins, a Trial Attorney in the Criminal Appeals and Tax Enforcement Policy Section of the Tax Division. Robbins is awarded for his extraordinary service to the department for representing the government on tax matters before the Supreme Court and other appellate and district courts. He has handled the most difficult tax matters for the department, including successfully advancing the application of the required records doctrine to grand jury subpoenas issued in international tax cases.
This year’s John Marshall Award for Providing Legal Advice is presented to a team of attorneys for their outstanding work in developing the department’s tribal eagle feathers enforcement policy. This team created the first-ever formal department policy statement addressing the ability of members of federally-recognized Indian tribes to possess or use eagle feathers. The awardees coordinated and worked closely with tribal groups to balance the interest of tribes with the enforcement interests of the department and wildlife laws. From the Office of the Assistant Attorney General for the ENRD, recipients include: Ethan G. Shenkman, Deputy Assistant Attorney General. From the Indian Resource Section of the ENRD, recipients include: S. Craig Alexander, Chief. From the Law and Policy Section of ENRD, recipients include: Karen M. Wardzinksi, Chief; Amber Blaha, Assistant Chief; and Stacy R. Stoller, Trial Attorney. From the Environmental Crimes Section of the ENRD, recipients include: Stacy H. Mitchell, Chief, and Elinor Colbourn, Assistant Chief. From the Office of Tribal Justice, recipients include: Christopher Brent Chaney, Deputy Director (former).
The John Marshall Award for Preparation or Handling of Legislation is awarded to Nathan A. Forrester, an Attorney-Adviser in the Office of Legal Counsel. In his role as editor of published Office of Legal Counsel opinions, he is clearing away the publication backlog. In addition, his self-initiated work in compiling, analyzing, and producing a volume of OLC opinions from 1934-1977 is making an important historic contribution. Forrester deftly and fairly supervises the other Attorney-Advisers in the Office who look to his example and wisdom for guidance in their own work. Despite a massive workload, his work is always of the highest quality and his love of the Constitution and its history makes him a model of government lawyering.
The John Marshall Award for Asset Forfeiture is presented to Daniel H. Claman, Assistant Deputy Chief for the Asset Forfeiture and Money Laundering Section of the Criminal Division. Claman is nominated for his exemplary work in implementing the Department’s Kleptocracy Asset Recovery Initiative and using civil forfeiture actions to recover the proceeds of foreign official corruption. He is a leader in the forfeiture of foreign corruption, and in the return of those ill-gotten gains to the victims of these crimes.
The John Marshall Award for Alternative Dispute Resolution recipient is L. Misha Preheim, Senior Trial Counsel in the Commercial Litigation Branch of the Civil Division, for his work in resolving the disputes of military personnel who were challenging the Department of Defense’s decision to award only one-half separation pay upon their discharge from the military pursuant to the “Don’t Ask Don’t Tell” policy. Preheim spearheaded the drive to resolve this case and brokered a framework that provided for payment to a large number of former service members who, without Preheim’s efforts, were likely to wait a substantial period of time for relief through the courts or military review boards.
The John Marshall Interagency Cooperation in Support of Litigation Award goes to Luke B. Marsh, Chief Trial Attorney for the Division of Enforcement at the U.S. Commodity Futures Trading Commission, for his work in addressing schemes to manipulate LIBOR interest rates. Marsh is nominated for his exceptional assistance to the department in the high-profile investigations and prosecutions of individuals, multi-national banks and other financial institutions engaged in wide-ranging and complex schemes to manipulate LIBOR and other benchmark interest rates affecting trillions of dollars of loans, mortgages and complex financial products worldwide. He has been one of the lead prosecutors on this matter from the inception of the investigations, and was responsible for investigating more than 20 banks and hundreds of individuals involved in the scheme.
Also awarded the John Marshall Interagency Cooperation in Support of Litigation Award is a team of attorneys from the U.S. Attorney’s Office for the District of Puerto Rico for their exemplary partnership in supporting the district’s violent crime reduction initiative. This team is responsible for prosecuting more than 500 individuals as part of an effort to target violent criminals and halt the surging murder rate in Puerto Rico. From November 2011 until December 2012, the team achieved an almost perfect conviction rate, and the targeted areas of San Juan, Bayamon, Caguas, Carolina and Ponce have seen a combined decrease in the number of homicides of 25 percent, amounting to 150 fewer murders when compared to the murder rate in 2011. From the U.S. Attorney’s Office for the District of Puerto Rico, recipients include: Victor O. Acevedo, Max Perez-Bouret, Amanda C. Soto, Maria L. Montanez and Kelly Zenón, Special Assistant U.S. Attorneys.
Utility Company Sentenced in Wyoming for Killing Protected Birds at Wind ProjectsRead the Press Release
Duke Energy Renewables Inc., a subsidiary of Duke Energy Corp., based in Charlotte, N.C., pleaded guilty in U.S. District Court in Wyoming today to violating the federal Migratory Bird Treaty Act (MBTA) in connection with the deaths of protected birds, including golden eagles, at two of the company’s wind projects in Wyoming. This case represents the first ever criminal enforcement of the Migratory Bird Treaty Act for unpermitted avian takings at wind projects.
Under a plea agreement with the government, the company was sentenced to pay fines, restitution and community service totaling $1 million and was placed on probation for five years, during which it must implement an environmental compliance plan aimed at preventing bird deaths at the company’s four commercial wind projects in the state. The company is also required to apply for an Eagle Take Permit which, if granted, will provide a framework for minimizing and mitigating the deaths of golden eagles at the wind projects.
The charges stem from the discovery of 14 golden eagles and 149 other protected birds, including hawks, blackbirds, larks, wrens and sparrows by the company at its “Campbell Hill” and “Top of the World” wind projects in Converse County between 2009 and 2013. The two wind projects are comprised of 176 large wind turbines sited on private agricultural land.
According to the charges and other information presented in court, Duke Energy Renewables Inc. failed to make all reasonable efforts to build the projects in a way that would avoid the risk of avian deaths by collision with turbine blades, despite prior warnings about this issue from the U.S. Fish and Wildlife Service (USFWS). However, the company cooperated with the USFWS investigation and has already implemented measures aimed at minimizing avian deaths at the sites.
“This case represents the first criminal conviction under the Migratory Bird Treaty Act for unlawful avian takings at wind projects,” said Robert G. Dreher, Acting Assistant Attorney General for the Justice Department's Environment and Natural Resources Division. “In this plea agreement, Duke Energy Renewables acknowledges that it constructed these wind projects in a manner it knew beforehand would likely result in avian deaths. To its credit, once the projects came on line and began causing avian deaths, Duke took steps to minimize the hazard, and with this plea agreement has committed to an extensive compliance plan to minimize bird deaths at its Wyoming facilities and to devote resources to eagle preservation and rehabilitation efforts.”
“The Service works cooperatively with companies that make all reasonable efforts to avoid killing migratory birds during design, construction and operation of industrial facilities,” said William Woody, Assistant Director for Law Enforcement of the U.S. Fish and Wildlife Service. “But we will continue to investigate and refer for prosecution cases in which companies - in any sector, including the wind industry - fail to comply with the laws that protect the public’s wildlife resources.”
More than 1,000 species of birds, including bald and golden eagles, are protected under the Migratory Bird Treaty Act (MBTA). The MBTA, enacted in 1918, implements this country’s commitments under avian protection treaties with Great Britain (for Canada), Mexico, Japan and Russia. The MBTA provides a misdemeanor criminal sanction for the unpermitted taking of a listed species by any means and in any manner, regardless of fault. The maximum penalty for an unpermitted corporate taking under the MBTA is $15,000 or twice the gross gain or loss resulting from the offense, and five years’ probation.
According to papers filed with the court, commercial wind power projects can cause the deaths of federally protected birds in four primary ways: collision with wind turbines, collision with associated meteorological towers, collision with, or electrocution by, associated electrical power facilities, and nest abandonment or behavior avoidance from habitat modification. Collision and electrocution risks from power lines (collisions and electrocutions) and guyed structures (collision) have been known to the utility and communication industries for decades, and specific methods of minimizing and avoiding the risks have been developed, in conjunction with the USFWS. The USFWS issued its first interim guidance about how wind project developers could avoid impacts to wildlife from wind turbines in 2003, and replaced these with a “tiered” approach outlined in the Land-Based Wind Energy Guidelines (2012 LBWEGs), developed with the wind industry starting in 2007 and released in final form by the USFWS on March 23, 2012. The Service also released Eagle Conservation Plan Guidance in April 2013 and strongly recommends that companies planning or operating wind power facilities in areas where eagles occur work with the agency to implement that guidance completely.
For wind projects, due diligence during the pre-construction stage—as described in the 2003 Interim Guidelines and tiers I through III in the 2012 LBWEGs—by surveying the wildlife present in the proposed project area, consulting with agency professionals, determining whether the risk to wildlife is too high to justify proceeding and, if not, carefully siting turbines so as to avoid and minimize the risk as much as possible, is critically important because, unlike electric distribution equipment and guyed towers, at the present time, no post-construction remedies, except “curtailment” (i.e., shut-down), have been developed that can “render safe” a wind turbine placed in a location of high avian collision risk. Other experimental measures to reduce prey, detect and deter avian proximity to turbines are being tested. In the western United States, golden eagles may be particularly susceptible to wind turbine blade collision by wind power facilities constructed in areas of high eagle use.
The $400,000 fine imposed in the case will be directed to the federally-administered North American Wetlands Conservation Fund. The company will also pay $100,000 in restitution to the State of Wyoming, and perform community service by making a $160,000 payment to the congressionally-chartered National Fish and Wildlife Foundation, designated for projects aimed at preserving golden eagles and increasing the understanding of ways to minimize and monitor interactions between eagles and commercial wind power facilities, as well as enhance eagle rehabilitation and conservation efforts in Wyoming. Duke Energy Renewables is also required to contribute $340,000 to a conservation fund for the purchase of land, or conservation easements on land, in Wyoming containing high-use golden eagle habitat, which will be preserved and managed for the benefit of that species. The company must implement a migratory bird compliance plan containing specific measures to avoid and minimize golden eagle and other avian wildlife mortalities at company’s four commercial wind projects in Wyoming.
According to papers filed with the court, Duke Energy Renewables will spend approximately $600,000 per year implementing the compliance plan. Within 24 months, the company must also apply to the U.S. Fish and Wildlife Service for a Programmatic Eagle Take Permit at each of the two wind projects cited in the case.
The case was investigated by Special Agents of the U.S. Fish and Wildlife Service and prosecuted by Senior Counsel Robert S. Anderson of the Justice Department’s Environmental Crimes Section of the Environment and Natural Resources Division and Assistant U.S. Attorney Jason Conder of the District of Wyoming.
Ms-13 Members Convicted of Murders<br /> and Attempted MurdersRead the Press Release
After a three-week trial, a federal jury has convicted two MS-13 members for their roles in committing murders, attempted murders and armed robberies in Gwinnett and DeKalb counties in northern Georgia.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Sally Quillian Yates of the Northern District of Georgia, Special Agent in Charge Brock D. Nicholson of the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations in Atlanta, and Special Agent in Charge Mark F. Giuliano of the FBI’s Atlanta Field Office made the announcement.
“These MS-13 gang members engaged in a ruthless – and senseless – string of attacks and murders, terrorizing the communities in which they operated,” said Acting Assistant Attorney General Raman. “Thanks to the investigators and prosecutors who made today’s convictions possible, these violent gang members are off the streets of northern Georgia and face up to life in prison behind bars.”
“These two defendants set the standard for violence as members of MS-13, an international gang infamous for its disregard for human life,” said U.S. Attorney Yates. “They spread fear throughout the community by killing innocent pedestrians, shooting suspected rival gang members and robbing innocent people at gunpoint. By finding them guilty, this jury has held them accountable for their crimes.”
“As active members of one of the most violent gangs in the world, these men posed a significant threat to the public safety of our communities,” said HSI Special Agent in Charge Nicholson, who is responsible for agency investigations in Georgia and the Carolinas. “HSI and our partners at the FBI and local law enforcement agencies have taken a strong stand against transnational gangs in Atlanta. These are just the latest convictions that show how successful our efforts have been.”
“Today's conviction in federal court of two violent members of the international gang known as MS-13 adds to the list of successes for those law enforcement officers, investigators and prosecutors who are working hard to neutralize this dangerous criminal enterprise,” said FBI Special Agent in Charge Giuliano. “While these successes are important for the FBI and its various law enforcement partners, it is more important to those particular communities impacted by MS-13's violent crimes.”
Remberto Argueta, aka Pitufo, 27, of Lilburn, Ga., and William Espinoza, aka Cheberria and Crazy, 31, of Norcross, Ga., were convicted today by a federal jury and will be sentenced at a later date before U.S. District Judge Richard W. Story. Each defendant was convicted of RICO conspiracy involving murder. Argueta was also convicted of violent crime in aid of racketeering and a firearms offense related to the murder of Arpolonio Rios-Jarquin. Espinoza was also convicted of violent crime in aid of racketeering and a firearms offense related to the attempted murder of Jayro Arango-Sanchez. Violent crime in aid of racketeering for murder carries a mandatory sentence of life in prison, while RICO conspiracy involving murder carries a sentence of up to life in prison. Parole has been abolished in the federal system.
According to court records, MS-13 is an international gang that has operated in the Atlanta area since at least 2005. The gang members staked out Gwinnett and DeKalb Counties as their home territory.
Evidence presented at trial showed that Argueta, along with other gang members, planned to rob Arpolonio Rios-Jarquin, a suspected drug dealer, at a hotel in April 2007. When Rios-Jarquin turned out to have his own gun, Argueta and his fellow MS-13 members engaged in a shootout with Rios-Jarquin that spilled outside the hotel room. Surveillance video showed one of the MS-13 members stopping to pick up Rios-Jarquin’s weapon, which he later showed off as a trophy.
In October 2007, Argueta and several other MS-13 members were at an apartment complex in Gwinnett County when Argueta spotted suspected rival gang members. According to evidence at trial, he approached them and asked them who they “claimed”—that is, what gang they belonged to. When Christian Escobar responded that he and his friend, Jose Garcia-Barajas, were members of the rival gang 18th Street, Argueta said, “You’re going to die.” Argueta pulled out a handgun and started chasing and shooting at Escobar and Garcia-Barajas. He shot Escobar in the back and Garcia-Barajas in the hip and arm. While shooting at them, Argueta also fired shots into the apartments of nearby residents. An elderly woman testified that one of Argueta’s bullets hit an armchair that she had been sitting in just a few minutes earlier.
Evidence at trial showed that in early July 2008, Espinoza lent his .380 caliber handgun to fellow gang members so that they could retaliate against a member of La Raza, a rival gang. An MS-13 member shot a 15-year-old boy who was taking a shortcut across through an apartment complex. The boy was not a member of a gang and had traveled from Ohio with his family to visit other family members for the Fourth of July holiday.
A few weeks later in July 2008, Espinoza and other members of MS-13 were at El Pueblito, a nightclub in DeKalb County, when a fight broke out with suspected members of the rival gang 18th Street. Surveillance video showed Espinoza going out to the parking lot and retrieving a .380 handgun from a car. He approached the club entrance and shot Jayro Arango-Sanchez in the stomach. Arango-Sanchez testified at trial that he was not a gang member and that he was at the club with his girlfriend and brother to celebrate his birthday.
According to evidence at trial, just two days later, Espinoza and four other MS-13 members drove to an apartment complex in Gwinnett County to look for pedestrians to rob. After spotting a victim, Espinoza and another gang member got out of their SUV and approached Aurelio Vasquez. Espinoza put his .380 handgun to Vasquez’s head while the other MS-13 member started to search Vasquez’s pockets for money. Vasquez, who was returning home after buying groceries, resisted being robbed, so Espinoza shot him through the head. Espinoza and his fellow gang members wanted to rob Vasquez to get money for beer.
This case is being investigated by ICE-HSI and FBI, with assistance from Gwinnett County Police Department, DeKalb County Police Department and Gwinnett County Sheriff’s Office.
Trial Attorney Joseph K. Wheatley of the Criminal Division’s Organized Crime and Gang Section and Assistant United States Attorney Paul R. Jones are prosecuting the case.Long Island Fisherman and Fish Dealer Sentenced for Wire Fraud and Falsifying RecordsRead the Press Release
The operator of the dragger F/V Norseman and an associated fish dealer were sentenced today in federal court in Central Islip, N.Y., for criminal violations stemming from their role in systematically underreporting fluke (summer flounder) that was being harvested as part of the federal Research Set-Aside Program, the Justice Department’s Environment and Natural Resources Division announced.
On Aug. 15, 2013, Wertz pleaded guilty to one count of wire fraud and two counts of falsification of federal records for knowingly submitting 137 falsified dealer reports from May 2009 through December 2011, and 70 falsified fishing logs, known as fishing vessel trip reports (FVTRs), from May 2011 through December 2011, as part of a scheme to defraud the United States of overharvested and unreported fluke. C&C Ocean Fishery Ltd. pleaded guilty to one count of wire fraud and three counts of falsification of federal records for its participation in the scheme, which included aiding and abetting the submission of falsified dealer reports and FVTRs.
C&C Ocean was not only aware of the false Norseman FVTRs, but it aided and abetted the perpetration of the FVTR scheme through its preparation of federal dealer reports. As a federal dealer, C&C Ocean was required to prepare and submit federal dealer reports to NOAA. The dealer reports include information such as date of landing, port of landing, catch vessel, corresponding FVTR numbers, commercial grade, species, price, and weight. In order to cover up the overharvesting that occurred on the water, C&C Ocean’s dealer report had to match the catch data that was submitted on the corresponding FVTR. In other words, if the FVTR falsely underreported the Norseman’s catch of fluke, then the scheme would likely be detected unless the corresponding dealer report was similarly falsified. Both defendants prepared and submitted false dealer reports for each of the trips set forth in the table.
The case was investigated by special agents of NOAA's National Marine Fisheries Service, Office of Law Enforcement, with assistance from the New York State Department of Environmental Conservation Police. The case is being prosecuted by Christopher L. Hale of the Justice Department’s Environmental Crimes Section, Environment and Natural Resources Division.
The defendants electronically submitted the 137 false dealer reports from Wertz’s desktop computer in New York, through an out-of-state internet server, to NOAA’s Regional Fisheries Administrator in Gloucester, Mass. Under NOAA regulations, all of the Norseman’s catch had to be reported to NOAA on FVTRs. During the years 2009, 2010, and 2011, the Norseman principally targeted fluke. However, on multiple occasions the vessel exceeded its relevant federal and New York State quotas for fluke for 137 trips, totaling 86,080 pounds of fluke worth approximately $200,000.
In order to cover up the illegal fluke harvesting, the operators of the Norseman falsified the FVTRs that were submitted to NOAA. For each of the 137 trips, a false FVTR was submitted. During 2009 and 2010, another individual submitted the false FVTRs, but by May 2, 2011, Wertz was falsifying and submitting the FVTRs himself. The defendants were aware that the FVTRs were utilized by NOAA as part of the administration of its statutory-mandated fisheries management program. Charles Wertz, Jr., a commercial fisherman from East Meadow, N.Y., was sentenced to serve one year and a day in prison to be followed by three years of supervised release, 100 hours of community service, a $5,000 fine, $99,800 in restitution and a $300 special assessment. The fish dealer, C&C Ocean Fishery Ltd., was sentenced to pay a $275,000 fine, $99,800 in restitution, and a $1,600 special assessment. The court also sentenced the defendants to comply with multiple sentence conditions, including relinquishment of federal fishing permits, a ban on participation in the Research Seat-Aside Program, divestiture of any interest in the F/V Norseman, and winding down and dissolving the company, C&C Ocean Fishery Ltd., within 90 days.
Former High School Football Player Pleads Guilty to Making Racially Motivated Threats to African-American Assistant Football CoachRead the Press Release
Jonathan Caine, 20, of Nashville, Tenn., pleaded guilty today to a federal hate crime for making racially motivated threats to an African-American assistant football coach at a local high school, the Justice Department announced.
Caine, formerly a student and football player at the high school where the victim works as a coach, pleaded guilty to threatening the victim with violence because of the victim’s race and employment before U.S. Magistrate Judge John Bryant in federal court in Nashville, Tenn.
According to the information presented in court, Caine made repeated anonymous threats to the assistant coach, and others in the high school administration, which included racial slurs and references to violent acts. In court, Caine admitted that on Aug. 10, 2012, he left an anonymous threatening voice mail on the assistant coach’s cellular phone, saying, “And thus sayeth the Lord all [epithet] shall be killed. Amen, amen I say to you [unintelligible] as the Lord Christ says if a [epithet] shall be born unto thee, the [epithet] shall be killed.” Caine admitted that he targeted the coach because of the coach’s race. Prior to law enforcement identifying Caine as the caller, the team took security measures to protect the coach.
“The Department of Justice will not hesitate to prosecute such acts of hate-motivated intimidation,” said Acting Assistant Attorney General Jocelyn Samuels for the Civil Rights Division. “Hate crimes have no place in our society; not only did this former student and player threaten his coach’s safety, he violated the victim’s civil rights by using racist, discriminatory language. The Civil Rights Division will remain vigilant in our efforts to bring these individuals to justice.”
“When individuals choose to act out their hatred by making threats based on a person’s race, they can expect to face prosecution by the U.S. Attorney’s Office,” said U.S. Attorney David Rivera for the Middle District of Tennessee. “Every arm of the Justice Department is committed to protecting the civil rights of all individuals and insuring they remain free from acts of violence and intimidation when those acts are based on the color of their skin.”
Sentencing is scheduled for Feb. 24, 2014. Caine faces a statutory maximum penalty of a 12-month sentence in prison and a $100,000 fine.
The case was investigated by the Nashville Division of the FBI and is being prosecuted by Assistant U.S. Attorney Blanche Cook of the Middle District of Tennessee and Trial Attorney Nicholas Murphy of the Civil Rights Division.
Alabama Sheriff’s Investigator Indicted for Unlawfully Detaining and Assaulting Handcuffed Man at County JailRead the Press Release
The Department of Justice announced today that a federal grand jury in the Middle District of Alabama has returned an indictment against J. Keith McCray, a criminal investigator with the Macon County, Ala., Sheriff’s Office for violating the rights of a man he unlawfully seized and assaulted.
McCray, 41, is charged with two counts of deprivation of rights under color of law and one count of witness tampering. On July 4, 2013, the victim was going door-to-door in McCray’s neighborhood attempting to sell alarm systems. According to the indictment, McCray unlawfully seized the victim using a firearm, and then brought the victim to the county jail. The indictment alleges that at the jail, McCray struck the victim while he was handcuffed, which resulted in bodily injury. The indictment further alleges that McCray engaged in witness tampering when he intimidated the victim and corruptly persuaded him not to file a complaint for the assault.
If convicted, McCray could face a statutory maximum sentence of 10 years in prison and a $250,000 fine for each deprivation-of-rights count. He could face a statutory maximum sentence of 20 years in prison and a $250,000 fine for the witness tampering charge.
An indictment is merely an accusation, and the defendant is presumed innocent unless proven guilty.
This case is being investigated by the Federal Bureau of Investigation and the Alabama Bureau of Investigation. The case is being prosecuted by Assistant U.S. Attorney Jerusha T. Adams of the Middle District of Alabama and Trial Attorney Chiraag Bains of the department’s Civil Rights Division.
Vantage Oncology LLC to Pay More Than $2.08 Million for <br /> False Medicare Claims for Radiation Oncology ServicesRead the Press Release
Vantage Oncology LLC (Vantage) has agreed to pay the government more than $2.08 million to settle allegations that it submitted false claims to Medicare for radiation oncology services performed at its Illinois centers from 2007 through June 2012, the Justice Department announced today. Vantage owns and manages radiation oncology centers in multiple states, including two centers in Spring Valley and Streator, Ill.
“Billing Medicare for patient care that is not necessary or appropriate contributes to the soaring costs of health care,” said Assistant Attorney General for the Civil Division Stuart F. Delery. “The Department of Justice is committed to protecting public funds and guarding against abuse of the Medicare system.”The government alleged that Vantage double billed and overbilled Medicare for certain procedures, billed for services that lacked supporting documentation and improperly billed for radiation treatment provided to patients without proper physician supervision.
“Our office remains committed to ensuring appropriate patient care and protecting the integrity of government insurance programs,” said U.S. Attorney for the Southern District of Ohio C arter M. Stewart .
“Cheating taxpayers by double billing, overbilling and wrongly billing for services without required medical oversight will not be tolerated,” said Special Agent in Charge with the Office of Inspector General of the U.S. Department of Health and Human Services Lamont Pugh III. “The Office of Inspector General is committed to identifying, investigating and holding accountable those who improperly profit at the expense of the Medicare program.”This settlement resolves a lawsuit filed by former Vantage employee Suleiman Refaei 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. Refaei will receive $354,450.
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 $16.7 billion through False Claims Act cases, with more than $11.9 billion of that amount recovered in cases involving fraud against federal health care programs.
The investigation was jointly handled by the U.S. Attorney’s Office for the Southern District of Ohio; the Justice Department’s Civil Division, Commercial Litigation Branch and the Department of Health and Human Services Office of the Inspector General.
The case is captioned United States ex rel. Suleiman Refaei v. Vantage Oncology, et al., Case No. 1:10-cv-833 (S.D. Ohio). The claims resolved by the settlement are allegations only, and there has been no determination of liability.
Two Executives Indicted for Roles in Fixing Prices<br /> on Automobile Parts Sold to Toyota<br /> to Be Installed in U.S. CarsRead the Press Release
A Cleveland federal grand jury returned an indictment against two executives of a Japanese automotive supplier for their roles in an international conspiracy to fix prices of automotive anti-vibration rubber parts sold to Toyota and installed in U.S. cars, the Department of Justice announced today.
The indictment, filed yesterday in U.S. District Court for the Northern District of Ohio in Toledo, charges Masao Hayashi and Kenya Nonoyama, both Japanese nationals, with participating in a conspiracy to suppress and eliminate competition in the automotive parts industry by agreeing to allocate the supply of, to rig bids for and to fix, raise and maintain the prices of anti-vibration rubber parts sold to Toyota Motor Corp., Toyota Motor Engineering & Manufacturing North America Inc. and affiliated companies (collectively Toyota) for installation in automobiles manufactured and sold in the United States and elsewhere.
Automotive anti-vibration rubber products are comprised primarily of rubber and metal, and include engine mounts and suspension bushings. They are installed in automobiles for the purpose of reducing road and engine vibration.
The indictment alleges, among other things, that from as early as March 1996 until at least December 2008, Hayashi and Nonoyama and their co-conspirators conducted meetings and communications in Japan to reach collusive agreements. The indictment alleges that the conspiracy involved agreements affecting the Toyota Corolla, Avalon, Tacoma, Camry, Tundra, Sequoia, Rav4, Sienna, Venza and Highlander.
“Today’s indictment reaffirms the Antitrust Division’s commitment to hold executives accountable for actions that corrupt the competitive landscape and harm consumers,” said Renata B. Hesse, Deputy Assistant Attorney General for the Department of Justice’s Antitrust Division. “The Antitrust Division continues to work closely with its fellow competition enforcers abroad to ensure that there are no safe harbors for executives who engage in international cartel crimes.”
Hayashi and Nonoyama are charged with a violation of the Sherman Act, which carries a maximum penalty of 10 years in prison and a $1 million criminal fine for individuals. 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.
Including Hayashi and Nonoyama, 21 companies and 26 executives have been charged in the Justice Department’s ongoing investigation into the automotive parts industry. To date, more than $1.6 billion in criminal fines have been obtained and seventeen of the charged executives have been sentenced to serve time in U.S. prisons or have entered into plea agreements calling for significant prison sentences.
The charges are the result of an ongoing federal antitrust investigation into price fixing, bid rigging and other anticompetitive conduct in the automotive parts industry, which is being conducted by each of the Antitrust Division’s criminal enforcement sections and the FBI. Today’s charges were brought by the Antitrust Division’s Chicago Office and the FBI’s Cleveland Field Office, with the assistance of the FBI headquarters’ International Corruption Unit and the U.S. Attorney’s Office for the Northern District of Ohio. Anyone with information on price fixing, bid rigging and other anticompetitive conduct related to other products in the automotive parts industry should contact the Antitrust Division’s Citizen Complaint Center at (888) 647–3258, visit www.justice.gov/atr/contact/newcase.html or call the FBI’s Cleveland Field Office at (216) 522-1400.Three Takata Corp. Executives Agree to Plead Guilty to Participating in Global Seatbelt Price Fixing ConspiracyRead the Press Release
Three high-level executives of Tokyo-based Takata Corp. have agreed to plead guilty for their participation in a conspiracy to fix prices of seatbelts installed in cars sold in the United States, the Department of Justice announced today. The executives have also agreed to serve time in a U.S. prison.
According to the one-count felony charges filed separately against each of the executives today in the U.S. District Court for the Eastern District of Michigan in Detroit, Yasuhiko Ueno, Saborou Imamiya and Yoshinobu Fujino participated in a conspiracy to rig bids for, and to fix, stabilize and maintain the prices of seatbelts sold to Toyota Motor Corp., Honda Motor Co. Ltd., Nissan Motor Co. Ltd., Fuji Heavy Industries Inc. – more commonly known by its brand name, Subaru – and Mazda Motor Corp. in the United States and elsewhere. The three executives have agreed to serve prison sentences ranging from 14 to 19 months, and to cooperate with the department’s ongoing investigation.
Ueno was employed by Takata’s Auburn Hills, Mich.-based U.S. subsidiary, TK Holdings Inc., in the United States as senior vice president for sales for Japanese manufacturers from at least January 2006 through December 2007. From early 2008 through June 2009, Ueno was employed by Takata in Japan as deputy division director of the customer relations division, and as director of the customer relations division from June 2009 through at least February 2011. According to the charge, Ueno’s involvement in the conspiracy lasted from at least as early as January 2006 until at least February 2011. Ueno has agreed to serve 19 months in prison and to pay a $20,000 criminal fine.
Imamiya was employed by Takata in Japan as general manager for Toyota sales from at least January 2008 to July 2009, and as director of the customer relations division from July 2009 through at least February 2011. According to the charge, Imamiya’s involvement in the conspiracy lasted from at least as early as January 2008 until at least February 2011. Imamiya has agreed to serve 16 months in prison and to pay a $20,000 criminal fine.
Fujino was employed by Takata in Japan as the manager of the Toyota group within the customer relations division from at least January 2004 through June 2005, and as the manager of the Mazda group within the customer relations division from June 2005 through the end of 2007. From the beginning of 2008 through at least February 2011, Fujino was employed by TK Holdings in the United States as assistant vice president for sales for Japanese manufacturers. According to the charge, Fujino’s involvement in the conspiracy lasted from at least as early as January 2004 until at least February 2011. Fujino has agreed to serve 14 months in prison and to pay a $20,000 criminal fine.
Takata Corp. is a manufacturer of automotive occupant safety systems, including seatbelts. Seatbelts are safety strap restraints designed to secure an occupant in position in a vehicle in the event of an accident, and may be sold bundled with related parts according to the needs of the automobile manufacturer. According to the charges, the Takata executives and their co-conspirators carried out the conspiracy by, among other things, agreeing during meetings and communications to coordinate bids submitted to the automobile manufacturers.
On Sept. 26, 2013, Gary Walker, an executive of TK Holdings Inc., agreed to plead guilty and serve a sentence of 14 months in prison for his involvement in the same conspiracy. On Oct. 9, 2013, Takata Corp. agreed to plead guilty for its involvement in the conspiracy and to pay a criminal fine of $71.3 million.
Each of the executives is charged with price fixing in violation of the Sherman Act, which carries a maximum penalty of 10 years in prison and a $1 million criminal fine for individuals. The maximum fine for an individual 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.
Including today’s charges, 24 individuals have been charged in the department’s investigation into price fixing and bid rigging in the auto parts industry. Additionally, 21 corporations have been charged.
The current prosecution arose from an ongoing federal antitrust investigation into price fixing, bid rigging and other anticompetitive conduct in the automotive parts industry, which is being conducted by each of the Antitrust Division’s criminal enforcement sections and the FBI. Today’s charges were brought by the National Criminal Enforcement Section, with the assistance of the Detroit, Michigan, Field Office of the FBI. Anyone with information concerning the focus of this investigation should contact the Antitrust Division’s Citizen Complaint Center at 1-888-647-3258, visit www.justice.gov/atr/contact/newcase.html, or call the Detroit Field Office of the FBI at 313-965-2323.
Three Aryan Brotherhood of Texas Gang Members <br /> Plead Guilty to Federal Racketeering ChargesRead the Press Release
Three members of the Aryan Brotherhood of Texas (ABT) gang have pleaded guilty to racketeering charges related to their membership in the ABT’s criminal enterprise, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and U.S. Attorney Kenneth Magidson of the Southern District of Texas.
Sammy Keith Shipman, aka “Stubby,” 31, of Houston, pleaded guilty today before U.S. Judge Sim Lake in the Southern District of Texas to one count of conspiracy to participate in racketeering activity.
William David Maynard, aka “Baby Huey,” 43, of Houston, pleaded guilty Nov. 20, 2013, and Dustin Lee Harris, aka “Lightning,” 29, of Dallas, pleaded guilty Nov. 19, 2013. Each defendant pleaded guilty to one count of conspiracy to participate in racketeering activity.
According to court documents, Shipman, Maynard, Harris and other ABT gang members and associates agreed to commit multiple acts of murder, robbery, arson, kidnapping and narcotics trafficking on behalf of the ABT gang. The defendants and numerous other ABT gang members met on a regular basis at various locations throughout Texas to report on gang-related business, collect dues, commit disciplinary assaults against fellow gang members and discuss acts of violence against rival gang members, among other things.By pleading guilty to racketeering charges, Shipman, Maynard and Harris admitted to being members of the ABT criminal enterprise and to committing multiple acts of violence and/or narcotics trafficking on behalf of the ABT.
According to the superseding indictment, the ABT was established in the early 1980s within the Texas prison system. The gang modeled itself after and adopted many of the precepts and writings of the Aryan Brotherhood, a California-based prison gang that was formed in the California prison system during the 1960s. According to the superseding indictment, the ABT was primarily concerned with the protection of white inmates and white supremacy/separatism. Over time, the ABT expanded its criminal enterprise to include illegal activities for profit.
Court documents allege that the ABT enforces its rules and promotes discipline among its members, prospects and associates through murder, attempted murder, conspiracy to murder, arson, assault, robbery and threats against those who violate the rules or pose a threat to the enterprise. Members, and oftentimes associates, are required to follow the orders of higher-ranking members, often referred to as “direct orders.”
According to the superseding indictment, in order to be considered for ABT membership, a person must be sponsored by another gang member. Once sponsored, a prospective member must serve an unspecified term, during which he is referred to as a prospect, while his conduct is observed by the members of the ABT.
At sentencing, scheduled for Feb. 20, 2014, Shipman, Maynard and Harris each face a maximum penalty of life in prison.
Shipman, Maynard and Harris are three of 36 defendants charged with, among other things, conducting racketeering activity through the ABT criminal enterprise. To date, 17 defendants have pleaded guilty.This case is being investigated by a multi-agency task force consisting of the Bureau of Alcohol, Tobacco, Firearms and Explosives; the Drug Enforcement Administration; FBI; U.S. Marshals Service; Federal Bureau of Prisons; U.S. Immigration and Customs Enforcement Homeland Security Investigations; Texas Rangers; Texas Department of Public Safety; Montgomery County, Texas, Sheriff’s Office; Houston Police Department-Gang Division; Texas Department of Criminal Justice – Office of Inspector General; Harris County, Texas, Sheriff’s Office; Atascosa County, Texas, Sheriff’s Office; Orange County, Texas, Sheriff’s Office; Waller County, Texas, Sheriff’s Office; Alvin, Texas, Police Department; Carrollton, Texas, Police Department; Mesquite, Texas, Police Department; Montgomery County District Attorney’s Office; and the Atascosa County District Attorney’s Office.
The case is being prosecuted by the Criminal Division’s Organized Crime and Gang Section and the U.S. Attorney’s Office for the Southern District of Texas.Superseding Indictment Returned Charging Father and Son with Sex Trafficking OffensesRead the Press Release
A federal grand jury in Milwaukee has returned an 11-count superseding indictment adding David B. Moore, 45, as a defendant in the federal sex trafficking case involving his son, Najee Moore, 22.
Both men are charged with conspiracy to engage in the sex trafficking and forced labor of a minor and sex trafficking of a minor. David Moore is also charged with soliciting his son to engage in sex trafficking. Najee Moore is charged with an additional conspiracy to engage in sex trafficking and forced labor, two counts of sex trafficking of an adult, attempted sex trafficking of a minor, attempted forced labor, evidence tampering and attempted witness tampering. The previous indictment in the case, returned on June 18, 2013, charged only Najee Moore with sex trafficking, attempted forced labor and related offenses.
According to the superseding indictment, between February 2008 and December 2009 David Moore and Najee Moore conspired to compel a minor to engage in prostitution and strip club dancing and caused that minor to engage in acts of prostitution. In July 2011, David Moore allegedly solicited his son to engage in further acts of sex trafficking. Between 2011 and 2013, Najee Moore allegedly engaged in the conduct charged in the remaining counts.
Both Moores face a statutory maximum sentence of life imprisonment.
An indictment is merely an accusation. All defendants are presumed innocent until proven guilty.
The case is being investigated by the FBI, the Milwaukee Police Department, DHS Homeland Security Investigations and the Wisconsin Department of Criminal Investigation. The case is being jointly prosecuted by Assistant U.S. Attorney Karine Moreno-Taxman and Trial Attorney Daniel H.Weiss of the Civil Rights Division's Human Trafficking Prosecution Unit.
Owner of Home Health Companies Sentenced for Role in <br /> $20 Million Health Care Fraud SchemeRead the Press Release
The owner and operator of several Miami health care agencies was sentenced today to serve 120 months in prison for his role in a health care fraud scheme involving defunct home health care company Trust Care Health Services Inc.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida; Special Agent in Charge Michael B. Steinbach of the FBI’s Miami Field Office; 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; and Acting Special Agent in Charge Michael J. DePalma of the Internal Revenue Service—Criminal Investigation’s (IRS-CI) Miami Field Office made the announcement.
Roberto Marrero, 60, of Miami, was sentenced by U.S. District Judge K. Michael Moore in the Southern District of Florida. In September 2013, Marrero pleaded guilty to conspiracy to commit health care fraud and conspiracy to receive and pay health care kickbacks.
Marrero was an owner and operator of Trust Care, a Miami home health care agency that purported to provide home health and physical therapy services to Medicare beneficiaries.
Co-conspirators Sandra Fernandez Viera, 49, Patricia Morcate, 34, and Enrique Rodriguez, 59, all of Miami, have also pleaded guilty to related charges, including conspiracy to commit health care fraud and conspiracy to receive and pay health care kickbacks. On Nov. 13, 2013, Fernandez Viera was sentenced to serve 120 months in prison; Morcate was sentenced to serve 60 months; and Rodriguez was sentenced to serve 57 months.
Together with Marrero, Fernandez Viera was an owner and operator of Trust Care. Morcate worked at and was an investor in Trust Care. Rodriguez served as a patient recruiter on behalf of Trust Care.
According to court documents, Marrero and his co-conspirators operated Trust Care 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 were not provided.
Marrero primarily controlled Trust Care and, in light of that role, oversaw the schemes operating out of the company. Marrero was also responsible for negotiating and paying kickbacks and bribes, interacting with patient recruiters, and coordinating and overseeing the submission of fraudulent claims to the Medicare program.
Marrero and his co-conspirators paid kickbacks and bribes to patient recruiters in return for the recruiters providing patients to Trust Care for home health and therapy services that were medically unnecessary and/or not provided. Marrero and his co-conspirators at Trust Care also paid kickbacks and bribes to co-conspirators in doctors’ offices and clinics in exchange for home health and therapy prescriptions, medical certifications and other documentation. Marrero and his co-conspirators used these prescriptions, medical certifications and other documentation to fraudulently bill the Medicare program for home health care services, which Marrero knew was in violation of federal criminal laws.
From approximately March 2007 through at least October 2010, Trust Care submitted more than $20 million in claims for home health services. Medicare paid Trust Care more than $15 million for these fraudulent claims.
Marrero and his co-conspirators have also acknowledged their involvement in similar fraudulent schemes at several other Miami health care agencies in addition to Trust Care with estimated total losses of approximately $50 million. Those agencies include A&B Health Services Inc. , Centrum Home Health Care Inc., Global Nursing Home Health Inc., Lovable Home Health Services Corp., New Concepts In Health Inc., Nursemed Home Care Corp., R&M Health Care Inc., Ubieta Health System Inc., and Vital Care Home Health Services Inc.
The case was investigated by the FBI and HHS-OIG, with the assistance of IRS-CI, and was brought as part of the Medicare Fraud Strike Force initiative, 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.govFour Commercial Fishermen Indicted in Maryland for Illegal Harvest and Interstate Sale of Striped Bass from Chesapeake BayRead the Press Release
Four commercial fishermen and one company were indicted yesterday by a federal grand jury in Baltimore for a criminal conspiracy involving the illegal harvesting and interstate sale of striped bass on the Chesapeake Bay, announced Robert G. Dreher, Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division, and Rod J. Rosenstein, U.S. Attorney for the District of Maryland.
According to court documents, Michael D. Hayden Jr., his company, William J. Lednum, Kent Sadler and Daniel Murphy engaged in a multi-year conspiracy during which time they harvested tens of thousands of pounds of striped bass on the Chesapeake Bay in violation of Maryland fishing regulations, falsified documents filed with the State of Maryland, and then transported and sold those poached fish in interstate commerce. In addition, after the investigation of these crimes began, it is alleged that Hayden attempted to manipulate some witnesses’ testimony while trying to outright prevent the testimony and cooperation of others. In addition, it is alleged that in at least one incident, Hayden threatened to retaliate against another potential witness he believed to be cooperating with investigators. Hayden was arrested on Sept. 17, 2013, having been charged in a criminal complaint with several counts of witness intimidation and retaliation.
The 26-count indictment charges the defendants with conspiracy, and Lacey Act violations. These charges carry possible terms of incarceration of five years. In addition, the witness intimidation/retaliation charges against Mr. Hayden each carry a maximum-term of 20 years in prison.
An indictment is a charging document and all defendants are innocent until proven guilty.
This case is being investigated by criminal investigators with the Maryland Department of Natural Resources, Natural Resources Police and Special Agents from the U.S. Fish and Wildlife Service. The case is being jointly prosecuted by the United States Attorney’s Office for the District of Maryland and the Environmental Crimes Section of the United States Department of Justice.
Federal Court Shuts Down Two St. Louis Tax Return PreparersRead the Press Release
A federal district judge in St. Louis has permanently barred defendants Joseph Burns, Joseph Thomas and International Tax Service Inc. from preparing federal tax returns for others, the Justice Department announced today. The defendants consented to the permanent injunction after the government filed a complaint and a motion for preliminary injunction. A hearing on that preliminary injunction motion, which resolves the case, was scheduled to commence today.
The complaint alleged that, from 2005 until late 2011, Thomas worked as a tax return preparer for Burns, who was doing business as Electronic Tax Service, but in early 2012, Thomas opened his own tax preparation business, called International Tax Service Inc. Burns and Thomas operated their respective tax preparation businesses from the same building, located at 4144 Lindell Boulevard in the Midtown neighborhood of St. Louis. According to the complaint, the defendants repeatedly fabricated expenses and deductions on customers’ returns and falsely claimed head of household status for customers who were married in order to illegally understate their customers’ federal tax liabilities and to obtain fraudulent tax refunds. The complaint also alleged that the defendants falsely claimed that some of their customers earned income from businesses that the defendants fabricated or increased the amount of business income their customers earned in order to illegally claim the maximum earned income tax credit on customers’ returns. In one example cited in the complaint, a customer of Burns told him that she made approximately $1200 for the year styling hair, but Burns claimed the customer had a beautician business and fabricated $16,900 in income which he reported on the customer’s tax return. As alleged in the complaint, the IRS estimates that the annual tax loss from the returns prepared by the defendants could be as much as $6 million.
Return preparer fraud is one of the IRS's Dirty Dozen Tax Scams for 2013 . The IRS has tips for choosing a tax preparer www.irs.gov/Tax-Professionals/Choosing-a-Tax-Professional . In the past decade, the department's Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers. Information about these cases is available on the Justice Department website.
Relatd Materials:
United States v. Joseph L. Burns, et al.
Final Stipulated Permanent Injunction Order Against Joseph L. Burns
Final Stipulated Permanent Injunction Order Against Joseph Thomas and International Tax Service, Inc.Durable Medical Equipment Clinic Owner Pleads Guilty in Miami for Role in $11 Million Health Care Fraud SchemeRead the Press Release
The former owner of a defunct durable medical equipment (DME) clinic based in Miami pleaded guilty today for his role in an $11 million Medicare fraud scheme.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida, Special Agent in Charge Michael B. Steinbach of the FBI’s Miami Field Office and Special Agent in Charge Christopher B. Dennis of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) Office of Investigations’ Miami Office made the announcement.
Francisco Enrique Chavez, 36, of Miami, pleaded guilty before U.S. District Judge Patricia A. Seitz in the Southern District of Florida to one count of health care fraud. He faces a maximum penalty of 10 years in prison when he is sentenced on Feb. 11, 2014.
According to court records, Chavez served as the president and sole corporate officer of World Class Medical Clinic Corp. (World Class) . From March 27, 2006, through Aug. 22, 2006, Chavez submitted or caused to be submitted approximately $11,303,494 in fraudulent claims to the Medicare program on behalf of World Class for DME that was neither prescribed by a physician nor medically necessary. Medicare paid more than $1,713,959 on these fraudulent claims. The proceeds of the World Class fraud scheme were deposited into corporate bank accounts that were controlled by Chavez, and he made numerous cash withdrawals and deposits into personal and shell entity bank accounts to conceal the nature of the scheme.
Chavez was a fugitive who was extradited from Spain to Miami on Aug. 30, 2013.
This case is being investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida. This case was prosecuted by Trial Attorneys Allan J. Medina and Sarah M. Hall of the Fraud Section . The Criminal Division’s Office of International Affairs provided significant assistance in the extradition.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,700 defendants who have collectively billed the Medicare program for more than $5.5 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.govABT Amended Settlement Agreement Granted Final Approval; Implementation to Begin by December 3, 2013Read the Press Release
On November 4, 2013 the United States District Court for the Western District of Washington granted final approval to the amended ABT Settlement Agreement (Agreement). The Agreement provides that individuals who file or intend to file asylum applications with either the United States Citizenship and Immigration Service (USCIS) or the Executive Office for Immigration Review (EOIR) are entitled to new procedures relating to the crediting of time toward eligibility for employment authorization.
The original Agreement was amended in September 2013 to clarify two points. First, a clarification was added to the Agreement, stating that when an asylum case is remanded to an immigration judge from the Board of Immigration Appeals (Board) for adjudication of an asylum claim (including Board remands to an immigration judge following an appeal to a U.S. Court of Appeals), the applicant will not only be credited with the total number of days between the immigration judge's decision and the date of the Board's remand order for employment eligibility purposes, but the time going forward from the date of the Board remand order will also be credited to the applicant, excluding any delays requested or caused by the applicant. Second, the agreement was amended to clarify that Remand Claim relief would be implemented pursuant to the six month timeframe provided for most other provisions of the agreement.
Due to the government shutdown, the six month implementation timeframe was extended by several weeks, so that implementation will now begin by December 3, 2013.
Additional information on the ABT Settlement Agreement is available on www.justice.gov/eoir.
Three Investment Advisors Sentenced in California <br /> for $1 Billion High-yield Investment FraudRead the Press Release
Three former investment advisers were sentenced on Nov. 19, 2013 for their roles in attempting to defraud a wealthy investor of $1 billion through a high-yield investment fraud scheme.
Acting Assistant Attorney General Mythili Raman of the Criminal Division and U.S. Attorney Andre Birotte Jr. of the Central District of California made the announcement.
William J. Ferry, a former stock broker and investment advisor; Dennis J. Clinton, a former real estate investment manager; and Paul R. Martin, a former senior vice president and managing director of Bankers Trust, were convicted on July 31, 2012, of conspiracy, mail fraud and wire fraud. The investor they attempted to defraud was, in reality, part of an undercover FBI team that posed as wealthy investors and investment managers to stop fraudsters before they actually harmed victims.
Ferry, 71, of Newport Beach, Calif., was sentenced to serve 15 months in prison. Clinton, 65, of San Diego, Calif., was sentenced to serve 30 months in prison. Martin, 64, of New Jersey, was sentenced to 30 months in prison.
Evidence at trial established that from February to December 2006, Ferry, Clinton, Martin and others conspired to promote a high-yield investment fraud scheme that promised an extremely high return at little or no risk to principal. The defendants claimed their investment program was a “Fed Trade Program” that was regulated by the Federal Reserve Bank, that they had to follow strict Fed guidelines, and that a Fed trade administrator administered their program, with compliance duties handled by a Fed compliance officer.
Investors also were told that once the investment program passed compliance, it would become registered in Washington, D.C., with the Fed. The defendants falsely represented to FBI undercover agents that they would arrange for them to meet a Federal Reserve official and/or the chairman of the board of a major U.S. bank to confirm the existence of the defendants’ investment program. The defendants falsely claimed that these Fed investment programs existed primarily to generate funds for project funding and humanitarian purposes, such as Hurricane Katrina relief. The promised profits from investing in a Fed program had to be divided in equal amounts, with one portion going to some humanitarian purpose, another portion to some kind of project financing and the remainder to the investor. The defendants represented to the undercover agents that the agents’ offshore bank account would be managed by a Swiss banker who was already managing billions of dollars for the defendants.
Throughout the scheme, Ferry acted as an underwriter and member of the compliance team; Martin acted as a banking expert; and Clinton acted as a trouble shooter during the compliance phase and transfer of funds to the Swiss banker.
Another conspirator, Brad Keith Lee, of California, who acted as the contact with the Swiss banker, pleaded guilty to conspiracy and wire fraud on April 13, 2009, and was sentenced to 24 months in prison on Jan. 11, 2010. Oregon resident John Brent Leiske, who acted as a trader during the scheme, pleaded guilty in the District of Oregon to conspiracy, mail fraud and wire fraud on Jan. 24, 2012, and was sentenced to 120 months in prison on Feb. 14, 2013.
This continuing investigation is being conducted by the FBI. This case is being prosecuted by Senior Litigation Counsel David Bybee and Trial Attorney Fred Medick of the Criminal Division’s Fraud Section.Former Jefferson Parish Sheriff’s Deputy Pleads Guilty to Civil Rights, Bank Fraud and Aggravated Identity Theft ViolationsRead the Press Release
Former Jefferson Parish Sheriff’s Deputy Mark Hebert, 48, pled guilty today to one civil rights violation, five bank fraud violations and one aggravated identity theft violation, announced Acting Assistant Attorney General Jocelyn Samuels for the Civil Rights Division, U.S. Attorney Kenneth A. Polite Jr. for the Eastern District of Louisiana, Special Agent in Charge Michael J. Anderson of the FBI New Orleans Field Office and Sheriff Newell Normand from the Jefferson Parish Sheriff’s Office.
According to the plea agreement and other documents, Hebert engaged in a scheme to defraud J.P. Morgan Chase Bank (Chase Bank) from Aug. 2, 2007 through Nov. 21, 2007. The scheme began when Hebert, in his capacity as a Jefferson Parish Sheriff’s Deputy, responded to an automobile accident involving Albert Bloch and stole Bloch’s VISA debit card, as well as other items. While Bloch was hospitalized following the accident, Hebert used that debit card to make unauthorized purchases of merchandise, including two Global Positioning System units, and to withdraw funds from Bloch’s Chase Bank account via Automatic Teller Machines (ATMs). After Chase Bank cancelled the debit card due to Bloch filing a dispute with the bank, Hebert continued his scheme to defraud by negotiating and attempting to negotiate forged checks drawn from Bloch’s account. Hebert then obtained the replacement debit card sent to Bloch and used that card to make further unauthorized transactions at Chase Bank ATMs. Bloch has not been seen since 2007.
By pleading guilty, Hebert admitted that he violated Bloch’s civil rights when he responded in his official capacity to Bloch’s automobile accident and unreasonably seized and converted Bloch’s property, including funds that Bloch had on deposit with Chase Bank. Hebert also admitted that on at least five occasions he executed his bank fraud scheme against Chase Bank by unlawfully using Bloch’s original ATM card, replacement ATM card and Chase Bank checks. In addition, Hebert admitted that on at least one occasion he used Bloch’s driver’s license number and social security number in order to execute his bank fraud scheme and thereby committed aggravated identity theft.
“When the defendant officer responded to an automobile accident and stole the victim’s credit cards and used them to commit fraud, he violated not only the law, but the core law enforcement values of trust and respect for civil rights,” said Acting Assistant Attorney General Jocelyn Samuels for the Civil Rights Division. “The Civil Rights Division will continue to work with our partners in the U.S. Attorney Offices and FBI to ensure that civil rights violations are identified and where appropriate prosecuted.”
“Mark Hebert’s guilty plea occurred as a result of the successful collaboration of local and state law enforcement agencies in our continued fight to eradicate corruption in our community,” said U.S. Attorney Kenneth A. Polite for the Eastern District of Louisiana. “The U.S. Attorney’s Office and its law enforcement partners are delivering the same message in a unified voice: we will not tolerate abuse of power and official position. If you violate the public trust in Southeast Louisiana, you will be held accountable.”
“In as much as I am very disappointed in the behavior of former JPSO officer Mark Hebert as outlined in his guilty plea today, I am extremely proud of the persistence of my criminal investigators and the efforts of the U. S. Attorney's Office in this investigation,” stated Jefferson Parish Sheriff Newell Normand. “My office will not tolerate any form of corruption.”
A sentencing hearing has been scheduled before the Honorable Jane Triche-Milazzo on March 24, 2014. For each of the five counts of bank fraud, Hebert faces a maximum statutory sentence of 30 years in prison and a $1,000,000 fine. For the count of aggravated identity theft, Hebert faces a maximum statutory sentence of two years in prison and a $250,000 fine. For the count charging a civil rights violation, Hebert faces a maximum statutory penalty of one year in prison and a $100,000 fine.
The investigation of this matter was conducted by the Jefferson Parish Sheriff’s Office Detective’s Bureau and the FBI. The case is being prosecuted by Assistant U.S. Attorney Steve Parker, Assistant U.S. Attorney Tony Sanders and Civil Rights Division Trial Attorney Shan Patel.
Department of Justice Announces New Policy to Address Domestic Violence, Sexual Assault and Stalking in the WorkplaceRead the Press Release
Deputy Attorney General James M. Cole today announced the release of a new Department of Justice policy for employees addressing the effects of domestic violence, sexual assault, and stalking in the workplace. The Department of Justice has long been at the forefront of addressing domestic violence in the workplace.
“With approximately 114,000 employees in 53 components, the Justice Department is a diverse workplace and it is our hope that this policy will serve as a model for other employers to address domestic violence, dating violence, sexual assault, and stalking,” said Deputy Attorney General Cole. “This new policy, and the steps it requires components to take, will improve the safety of the department’s workplaces and will help us better support victims.”
On April 18, 2012, President Obama issued a memorandum entitled “Establishing Policies for Addressing Domestic Violence in the Federal Workforce,” which required the Office of Personnel Management to issue guidance on the development of agency-specific policies to address domestic violence in the workplace. All federal agencies are required to develop an agency-specific policy based on the guidance. The department welcomed the chance to build upon the existing policy first created by Attorney General Janet Reno in 1999, which established support and resources for department employees who experience domestic violence. This order unequivocally stated that domestic violence perpetrated in the workplace was unacceptable and would not be tolerated.
Today, the department adopted a robust workplace policy that fully responds to the president’s call to federal agencies, and addresses not only domestic violence in the workplace, but also sexual assault and stalking.
“The impact of domestic and sexual violence is far reaching,” said Acting Director Bea Hanson of the Office on Violence Against Women. “And it is clear that we all have a part to play in creating a work environment that is safe for all of us. As we introduce this new policy, we must educate ourselves on how we can support co-workers who may be experiencing domestic violence, sexual assault, or stalking. And I am proud that the Office on Violence Against Women has led the charge in supporting organizations that work to address domestic violence, sexual assault and stalking in the workplace.”
The Office on Violence Against Women (OVW), a component of the U.S. Department of Justice, provides leadership in developing the nation’s capacity to reduce violence against women through the implementation of the Violence Against Women Act (VAWA) and subsequent legislation. Created in 1995, OVW administers financial and technical assistance to communities across the country that are developing programs, policies and practices aimed at ending domestic violence, dating violence, sexual assault and stalking. In addition to overseeing 22 federal grant programs, OVW often undertakes initiatives in response to special needs identified by communities facing acute challenges. More information is available at www.ovw.usdoj.gov.
If you, or someone you know, are a victim of domestic violence, please call the National Domestic Violence Hotline at 800-799-SAFE (7233), 800-787-3224 (TTY). For more information on resources that may be available to you, visit: http://www.ovw.usdoj.gov/statedomestic.htm.
Six Investors Indicted for Their Roles in Bid-Rigging Scheme at Municipal Tax Lien Auctions in New JerseyRead the Press Release
Note: The defendants in this case, Joseph Wolfson; Gregg Gehring; Robert Jeffrey; Betty Simon, Trustee LLC.; and Richard Simon, Trustee, were acquitted by a jury of the charges alleged in the indictment.
A federal grand jury in Newark, N.J., returned an indictment against six investors for their roles in a conspiracy to rig bids at auctions conducted by New Jersey municipalities for the sale of tax liens, the Department of Justice announced.
The indictment, filed today in U.S. District Court for the District of New Jersey in Newark, charges four individuals, Joseph Wolfson, Gregg Gehring, James Jeffers Jr. and Robert Jeffrey, and two entities, Betty Simon Trustee LLC and Richard Simon Trustee, with participating in a conspiracy to rig bids at tax lien auctions in New Jersey. According to the indictment, from at least as early as 1998 and continuing until as late as February 2009, the investors participated in a conspiracy to rig bids at auctions for the sale of municipal tax liens in New Jersey by agreeing to allocate among certain bidders which liens each would bid on. The indictment alleges that the investors proceeded to submit bids in accordance with the agreements and purchased tax liens at collusive and non-competitive interest rates.
Joseph Wolfson, of Margate, N.J., was a part-owner of two entities that invested in municipal tax liens, Betty Simon Trustee and Richard Simon Trustee, both of Northfield, N.J. Gregg Gehring, of Newton, N.J., was employed by a major tax lien investment company as a vice president. James Jeffers Jr., of Burlington, N.J., was a bidder for Crusader Servicing Corp., which pleaded guilty to its role in the conspiracy in September 2012, and also a bidder for Crusader’s successor corporation. Robert Jeffrey, of Bradenton, Fla., was a bidder for both Crusader and its successor corporation.
“The individuals and entities charged today demonstrated a blatant disregard for the competitive process by allocating the purchase of certain municipal tax liens by, from time to time, flipping a coin, drawing numbers out of a hat or drawing from a deck of cards,” said Leslie C. Overton, Deputy Assistant Attorney General for the Antitrust Division. “The Antitrust Division remains committed to prosecuting those who thwart the competitive bidding process.”
The department said that the primary purpose of the conspiracy was to suppress and restrain competition in order to obtain selected municipal tax liens offered at public auctions at non-competitive interest rates. When the owner of real property fails to pay taxes on that property, the municipality in which the property is located may attach a lien for the amount of the unpaid taxes. If the taxes remain unpaid after a waiting period, the lien may be sold at auction. State law requires that investors bid on the interest rate delinquent property owners will pay upon redemption. By law, the bid opens at 18 percent interest and, through a competitive bidding process, can be driven down to zero percent. If a lien remains unpaid after a certain period of time, the investor who purchased the lien may begin foreclosure proceedings against the property to which the lien is attached. Since the conspiracy permitted the conspirators to purchase tax liens with limited competition, each conspirator was able to obtain liens which earned a higher interest rate. Property owners were therefore made to pay higher interest on their tax debts than they would have paid had their liens been purchased in open and honest competition, the department said.
The indictment alleges, among other things, that from at least as early as 1998 and continuing until as late as February 2009, prior to the commencement of certain tax lien auctions in New Jersey, the investors and their co-conspirators agreed not to compete for the purchase of certain municipal tax liens.
A violation of the Sherman Act carries a maximum penalty of 10 years in prison and a $1 million fine for individuals. The maximum fine for a Sherman Act violation may be increased to twice the gain derived from the crime or twice the loss suffered by the victim if either amount is greater than the $1 million statutory maximum.Including today’s charges, 20 individuals and entities have been charged as part of an ongoing investigation into bid rigging or fraud related to municipal tax lien auctions in New Jersey. To date, 11 individuals – Isadore H. May, Richard J. Pisciotta Jr., William A. Collins, Robert W. Stein, David M. Farber, Robert E. Rothman, Stephen E. Hruby, David Butler, Norman T. Remick, Robert U. Del Vecchio Sr., and Michael Mastellone – and three companies, DSBD LLC, Crusader Servicing Corp., and Mercer S.M.E. Inc., have pleaded guilty as part of this investigation.
Today’s charge is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants, including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
This ongoing investigation is being conducted by the Antitrust Division’s New York Field Office and the FBI’s Atlantic City, N.J., office. Anyone with information concerning bid rigging or fraud related to municipal tax lien auctions should contact the Antitrust Division’s New York Field Office at 212-335-8000, visit www.justice.gov/atr/contact/newcase.htm or contact the Atlantic City Resident Agency of the FBI at 609-677-6400.
Procurador General De Ee.Uu. Anuncia Acuerdo Historico De Liquidacion De $13 Mil Millones Con Jpmorgan Por La Venta De Valores Respaldados Por Hipotecas DefectuosasRead the Press Release
SACRAMENTO, California - El procurador general de los EE.UU., Eric Holder, el procurador general auxiliar Tony West y el procurador federal de los Estados Unidos Benjamin B. Wagner anunciaron que los Estados Unidos han llegado a un acuerdo de liquidación civil con JPMorgan Chase relacionado con la venta que hicieron JPMorgan y otros dos bancos que adquirió JPMorgan en el 2008, Bear Stearns y Washington Mutual, de valores respaldados por hipotecas residenciales.
El acuerdo resuelve las posibles reclamaciones de miles de millones de dólares por las sanciones civiles bajo la Ley de Reforma, Recuperación y Ejecución de Instituciones Financieras (FIRREA, por sus siglas en inglés), así como las reclamaciones por las compensaciones de pérdidas de la Agencia Federal de Crédito para la Vivienda (FHFA, por sus siglas en inglés), la Administración Nacional de Cooperativas de Crédito (NCUA, por sus siglas en inglés), la Corporación Federal de Seguros de Depósitos (FDIC, por sus siglas en inglés) y los estados de California, Nueva York, Illinois, Massachusetts y Delaware. Este requiere que JPMorgan le pague $2 mil millones al Departamento de Justicia de los EE.UU., màs un total de $7 mil millones a las agencias estatales y federales, y provea una compensación adicional de $4 mil millones para los propietarios de viviendas y vecindarios afectados por la crisis financiera que comenzó en el año 2008.
El acuerdo de liquidación, que es de $2 mil millones de dólares, constituye la sanción civil màs grande que jamàs se le haya impuesto a algún banco por emitir valores respaldados por hipotecas defectuosas. Este es el resarcimiento màs grande de la historia de un caso en que haya trabajado la Procuraduría General de los EE.UU. para el Distrito Este de California.
El acuerdo de liquidación fue producto en parte de una investigación que hiciera el procurador auxiliar de los EE.UU. y los agentes especiales de la FHFA-OIG en el Distrito Este de California sobre las posibles violaciones de FIRREA en la titulación y venta de valores respaldados por hipotecas residenciales (RMBS, por sus siglas en inglés) por parte de JPMorgan como tal (no Bear Stearns ni Washington Mutual) entre los años 2005 y 2007. Luego de la investigación, el procurador federal Wagner concluyó que JPMorgan vendió miles de millones de dólares de RMBS con tasa no preferencial respaldados por grupos de préstamos hipotecarios que el banco sabía contenían préstamos que no cumplían con las guías de aseguramiento del tramitador del préstamo, estaban garantizados por propiedades con tasaciones infladas, estaban respaldados por índices incorrectos de préstamo-valor o deuda-ingresos o se originaron en violación a las leyes y regulaciones federales y estatales, a la vez que les dio información falsa a los inversionistas sobre la calidad de los préstamos en los grupos y el riesgo de pérdida.
En el proceso de adquisición de los grupos de préstamos hipotecarios de los tramitadores de préstamos, JPMorgan actuó con la “debida diligencia” al contratar empresas de aseguramiento externas para inspeccionar una muestra de los archivos de préstamos, generalmente entre 20 y 30 por ciento de los préstamos en un grupo. Estas empresas externas examinaron si los préstamos se realizaron de acuerdo con los estàndares de aseguramiento del tramitador del préstamo y si la documentación del préstamo cumplía con las leyes federales y estatales aplicables. Las empresas externas también realizaron las revisiones de valores para garantizar que las propiedades que servían como colaterales de los préstamos hubiesen sido correctamente tasadas.
Los inversionistas de RMBS no pudieron evaluar completamente el riesgo de pérdida de los incumplimientos de los prestatarios porque no tenían acceso directo a los datos subyacentes de los préstamos. JPMorgan sabía esto y les promocionó su supuestamente estricto proceso de diligencia debida a los inversionistas de RMBS potenciales.
Como parte del acuerdo de liquidación, JPMorgan admitió que las empresas externas de diligencia debida le informaron a JPMorgan que varios préstamos en las muestras al azar de préstamos hipotecarios estaban violando las guías de aseguramiento sin factores de compensación para justificar los préstamos. A pesar de esta información, JPMorgan liberó muchos de los préstamos en incumplimiento a los grupos de titulación que compró y luego los vendió a los inversionistas. De acuerdo con un informe de prueba de una de las empresas externas de diligencia debida, el 27 por ciento de los préstamos de la muestra que revisó la empresa en 2006 y a principios de 2007 recibió la clasificación de préstamos hipotecarios en incumplimiento o “rechazados”. JPMorgan luego liberó la mitad de esos préstamos a los grupos que se vendieron a los inversionistas. Aunque la diligencia debida en las muestras al azar indicó que los grupos de titulación muy posiblemente contenían muchos màs préstamos con violaciones de aseguramiento, JPMorgan no identificó ni eliminó esos préstamos del grupo. Por lo tanto, tal y como lo admite JPMorgan en el acuerdo de liquidación, no les reveló a los inversionistas que los RMBS incluían préstamos hipotecarios que no cumplían con las guías de aseguramiento aplicables. El banco también admitió en el acuerdo de liquidación que no reveló que tenía una pràctica establecida de admitir préstamos en el grupo para los que los valores de la propiedad en garantía determinados en el proceso de diligencia debida diferían de la tasación del tramitador en hasta un 15 por ciento, incluso cuando el índice préstamo-valor era tan alta como 100 por ciento.
JPMorgan también admitió que en una ocasión un empleado de JPMorgan, quien participó en la adquisición de grupos de préstamos, les advirtió a sus supervisores que los grupos contenían préstamos hipotecarios de baja calidad que no deberían comprarse ni titularse. A pesar de la advertencia, JPMorgan compró el grupo y tituló muchos de los préstamos.
Entre otros asuntos civiles resueltos como parte del acuerdo de liquidación anunciado hoy se incluyen las reclamaciones relacionadas con la titulación y venta de valores respaldados por hipotecas por parte de Bear Stearns y Washington Mutual entre 2005 y 2007. Ademàs de las reclamaciones del Departamento de Justicia de los EE.UU., el acuerdo de liquidación resuelve las demandas que presentaron la FHFA, NCUA y el procurador general de Nueva York, y las posibles reclamaciones de la FDIC, el procurador general de California y los procuradores generales de los estados de Illinois, Massachusetts y Delaware. La parte de la FHFA del acuerdo de liquidación se anunció previamente. El acuerdo de liquidación solo libera las reclamaciones civiles monetarias en contra de JPMorgan y las corporaciones afiliadas. No libera ninguna posible responsabilidad penal ni a ningún individuo de demandas civiles ni penales. JPMorgan ha acordado cooperar con el Departamento de Justicia en la investigación actual de esta conducta.
“Los abusos en la industria de valores respaldados por hipotecas favorecieron el deterioro de los estàndares de aseguramiento entre muchos prestamistas hipotecarios, y alimentó la crisis financiera”, dijo el procurador federal Wagner. “Los efectos fueron sorprendentes. JPMorgan vendió màs de $25 mil millones en certificados de RMBS con tasa no preferencial respaldados por préstamos tóxicos. Las cooperativas de crédito, los bancos comerciales y muchos inversionistas en el país fueron víctimas, incluyendo algunos en el Distrito Este de California, y sufrieron pérdidas por miles de millones de dólares. Esta oficina, que sirve a un distrito que fue saqueado por la crisis financiera, tuvo una función importante en que se hiciera justicia en este caso. Quiero agradecer particularmente a Rich Elias, Colleen Kennedy y Kelli Taylor de esta oficina por su extraordinario trabajo en este caso”.
Michael P. Stephens, inspector general interino de la FHFA declaró: "JP Morgan y los bancos que compró, Bear Stearns y Washington Mutual, vendieron miles de millones de dólares de hipotecas defectuosas en los mercados de valores, lo que ayudó a precipitar la crisis financiera. Los inversionistas, incluyendo Fannie Mae y Freddie Mac, sufrieron pérdidas enormes al comprar RMBS de JPMorgan, Washington Mutual y Bear Stearns sin saber sobre esos defectos. El acuerdo de liquidación de hoy es significativo, pero no es de ninguna manera la última medida que tomaran la FHFA-OIG y sus asociados en el cumplimiento de la ley para que los responsables de los actos de fraude y engaño rindan cuentas. Estamos orgullosos de haber trabajado en este caso con el procurador general de los EE.UU. Benjamin Wagner y los abogados de su oficina en el Distrito Este de California y esperamos continuar trabajando juntos".
La investigación del Distrito Este de California fue realizada por los procuradores auxiliares de los EE.UU. Richard M. Elias y Colleen M. Kennedy, junto con Kelli L. Taylor, Jefe de la Unidad Ejecución Civil Afirmativa, y bajo la supervisión de David Shelledy, Jefe de la División Civil, con la asistencia de los agentes especiales de la FHFA OIG, en conjunto con el Grupo de Trabajo de Valores Respaldados por Hipotecas Residenciales, un componente de la Unidad de Ejecución contra el Fraude Financiero.
La unidad de ejecución la creó el presidente Obama en el 2009 para luchar con mano dura, coordinada y proactiva e investigar y procesar los delitos financieros. Con màs de 20 agencias federales, 94 oficinas de procuradores generales de los EE.UU. y socios estatales y locales, es la màs amplia colaboración de agencias de ejecución legal, investigación y regulación que se haya ensamblado nunca para combatir el fraude. Para obtener màs información sobre la unidad de ejecución, por favor visite:
www.StopFraud.gov.
Nursing Home Operator to Pay $48 Million to Resolve Allegations <br /> That Six California Facilities Billed for Unnecessary TherapyRead the Press Release
The Ensign Group Inc., a skilled nursing provider based in Mission Viejo, Calif., that operates nursing homes across the western U.S. has agreed to pay $48 million to resolve allegations that it knowingly submitted to Medicare false claims for medically unnecessary rehabilitation therapy services, the Justice Department announced today. Six of Ensign’s skilled nursing facilities in California allegedly submitted the false claims: Atlantic Memorial Healthcare Center, located in Long Beach; Panorama Gardens, located in Panorama City; The Orchard Post-Acute Care (a.k.a. Royal Court), located in Whittier; Sea Cliff Healthcare Center, located in Huntington Beach; Southland, located in Norwalk; and Victoria Care Center, located in Ventura.
“Skilled nursing facilities that place their own financial interests above the needs of their patients will be held accountable,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery. “We will continue to advocate for the appropriate use of Medicare funds and the proper care of our senior citizens.”
Between January 1, 1999, and August 31, 2011, these six Ensign skilled nursing facilities allegedly submitted false claims to the government for physical, occupational and speech therapy services provided to Medicare beneficiaries that were not medically necessary. Specifically, Ensign provided therapy to patients whose conditions and diagnoses did not warrant it, solely to increase its reimbursement from Medicare. The government further alleged that Ensign created a corporate culture that improperly incentivized therapists and others to increase the amount of therapy provided to patients to meet planned targets for Medicare revenue. These targets were set without regard to patients’ individual therapy needs and could only be achieved by billing at the highest reimbursement levels. The government also alleged that Ensign billed for inflated amounts of therapy it had not provided and that certain patients were kept in these facilities for periods of time exceeding what was medically necessary for treatment of their conditions.“The case against The Ensign Group involves a company that regularly bilked Medicare by submitting inflated bills that, in some cases, sought money for services that simply were never provided to patients,” said U.S. Attorney for the Central District of California André Birotte Jr. “This settlement – one of the largest Medicare fraud cases against a nursing home chain in U.S. history – demonstrates our commitment to protecting taxpayers who fund important programs that benefit millions of Americans, but don’t want to see their hard-earned money wasted on fraud or abuse.”
In addition to paying the settlement amount, Ensign also agreed that each of its skilled nursing facilities across the nation would be bound by the terms of a Corporate Integrity Agreement with the Department of Health and Human Services Office of Inspector General (HHS-OIG).
"Billing Medicare for costly, unnecessary skilled nursing services -- as the government alleged here -- inflates health care costs borne by taxpayers," said Special Agent in Charge for the Los Angeles Region of the HHS-OIG Glenn R. Ferry. “This settlement again puts on notice those who would consider defrauding federally funded health care programs."
This civil settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by Attorney General Eric Holder and 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 more than $16.7 billion through False Claims Act cases, with more than $11.9 billion of that amount recovered in cases involving fraud against federal health care programs.
The allegations settled today arose from lawsuits filed by two former Ensign therapists under the qui tam, or whistleblower, provisions of the False Claims Act, which allow private citizens to bring suit on behalf of the government and to share in any recovery. The dollar amount that the whistleblowers in this case, Gloria Patterson and Carol Sanchez, will receive has not been determined. The lawsuits are captioned as United States of America ex rel. Gloria Patterson v. Ensign Group Inc., Case No. SACV 06-6956 CJC (ANx) (C.D. Calif.) and United States of America ex rel. Carol Sanchez v. Ensign Group Inc., Case No. SACV 06-0643 CJC (ANx) (C.D. Calif.).
The case was handled by the U.S. Attorney’s Office for the Central District of California, with assistance from the Commercial Litigation Branch, Civil Division, U.S. Department of Justice and the U.S. Department of Health and Human Services Office of Inspector General. This action was supported by the Elder Justice and Nursing Home Initiative, which coordinates the department’s activities combating elder abuse, neglect and financial exploitation, especially as they impact beneficiaries of Medicare, Medicaid and other federal health care programs.
The claims settled by this agreement are allegations only; there has been no determination of liability.Justice Department, Federal and State Partners Secure Record $13 Billion Global Settlement with JPMorgan for Misleading Investors About Securities Containing Toxic MortgagesRead the Press Release
*CORRECTION: The release below previously stated that New York is receiving $613.8 million in this settlement, however, the number is $613.0 million. This correction notice was posted on Nov. 20, 2013.*
The Justice Department, along with federal and state partners, today announced a $13 billion settlement with JPMorgan - the largest settlement with a single entity in American history - to resolve federal and state civil claims arising out of the packaging, marketing, sale and issuance of residential mortgage-backed securities (RMBS) by JPMorgan, Bear Stearns and Washington Mutual prior to Jan. 1, 2009. As part of the settlement, JPMorgan acknowledged it made serious misrepresentations to the public - including the investing public - about numerous RMBS transactions. The resolution also requires JPMorgan to provide much needed relief to underwater homeowners and potential homebuyers, including those in distressed areas of the country. The settlement does not absolve JPMorgan or its employees from facing any possible criminal charges.
This settlement is part of the ongoing efforts of President Obama’s Financial Fraud Enforcement Task Force’s RMBS Working Group.
“Without a doubt, the conduct uncovered in this investigation helped sow the seeds of the mortgage meltdown,” said Attorney General Eric Holder. “JPMorgan was not the only financial institution during this period to knowingly bundle toxic loans and sell them to unsuspecting investors, but that is no excuse for the firm’s behavior. The size and scope of this resolution should send a clear signal that the Justice Department’s financial fraud investigations are far from over. No firm, no matter how profitable, is above the law, and the passage of time is no shield from accountability. I want to personally thank the RMBS Working Group for its tireless work not only in this case, but also in the investigations that remain ongoing.”
The settlement includes a statement of facts, in which JPMorgan acknowledges that it regularly represented to RMBS investors that the mortgage loans in various securities complied with underwriting guidelines. Contrary to those representations, as the statement of facts explains, on a number of different occasions, JPMorgan employees knew that the loans in question did not comply with those guidelines and were not otherwise appropriate for securitization, but they allowed the loans to be securitized – and those securities to be sold – without disclosing this information to investors. This conduct, along with similar conduct by other banks that bundled toxic loans into securities and misled investors who purchased those securities, contributed to the financial crisis.
“Through this $13 billion resolution, we are demanding accountability and requiring remediation from those who helped create a financial storm that devastated millions of Americans,” said Associate Attorney General Tony West. “The conduct JPMorgan has acknowledged - packaging risky home loans into securities, then selling them without disclosing their low quality to investors - contributed to the wreckage of the financial crisis. By requiring JPMorgan both to pay the largest FIRREA penalty in history and provide needed consumer relief to areas hardest hit by the financial crisis, we rectify some of that harm today.”Of the record-breaking $13 billion resolution, $9 billion will be paid to settle federal and state civil claims by various entities related to RMBS. Of that $9 billion, JPMorgan will pay $2 billion as a civil penalty to settle the Justice Department claims under the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA), $1.4 billion to settle federal and state securities claims by the National Credit Union Administration (NCUA), $515.4 million to settle federal and state securities claims by the Federal Deposit Insurance Corporation (FDIC), $4 billion to settle federal and state claims by the Federal Housing Finance Agency (FHFA), $298.9 million to settle claims by the State of California, $19.7 million to settle claims by the State of Delaware, $100 million to settle claims by the State of Illinois, $34.4 million to settle claims by the Commonwealth of Massachusetts, and $613 million to settle claims by the State of New York.
JPMorgan will pay out the remaining $4 billion in the form of relief to aid consumers harmed by the unlawful conduct of JPMorgan, Bear Stearns and Washington Mutual. That relief will take various forms, including principal forgiveness, loan modification, targeted originations and efforts to reduce blight. An independent monitor will be appointed to determine whether JPMorgan is satisfying its obligations. If JPMorgan fails to live up to its agreement by Dec. 31, 2017, it must pay liquidated damages in the amount of the shortfall to NeighborWorks America, a non-profit organization and leader in providing affordable housing and facilitating community development.
The U.S. Attorney’s Offices for the Eastern District of California and Eastern District of Pennsylvania and the Justice Department’s Civil Division, along with the U.S. Attorney’s Office for the Northern District of Texas, conducted investigations into JPMorgan’s, Washington Mutual’s and Bear Stearns’ practices related to the sale and issuance of RMBS between 2005 and 2008.
“Today’s global settlement underscores the power of FIRREA and other civil enforcement tools for combatting financial fraud,” said Assistant Attorney General for the Civil Division Stuart F. Delery, co-chair of the RMBS Working Group. “The Civil Division, working with the U.S. Attorney’s Offices and our state and agency partners, will continue to use every available resource to aggressively pursue those responsible for the financial crisis.”
“Abuses in the mortgage-backed securities industry helped turn a crisis in the housing market into an international financial crisis,” said U.S. Attorney for the Eastern District of California Benjamin Wagner. “The impacts were staggering. JPMorgan sold securities knowing that many of the loans backing those certificates were toxic. Credit unions, banks and other investor victims across the country, including many in the Eastern District of California, continue to struggle with losses they suffered as a result. In the Eastern District of California, we have worked hard to prosecute fraud in the mortgage industry. We are equally committed to holding accountable those in the securities industry who profited through the sale of defective mortgages.”
“Today's settlement represents another significant step towards holding accountable those banks which exploited the residential mortgage-backed securities market and harmed numerous individuals and entities in the process,” said U.S. Attorney for the Eastern District of Pennsylvania Zane David Memeger. “These banks packaged and sold toxic mortgage-backed securities, which violated the law and contributed to the financial crisis. It is particularly important that JPMorgan, after assuming the significant assets of Washington Mutual Bank, is now also held responsible for the unscrupulous and deceptive conduct of Washington Mutual, one of the biggest players in the mortgage-backed securities market.”This settlement resolves only civil claims arising out of the RMBS packaged, marketed, sold and issued by JPMorgan, Bear Stearns and Washington Mutual. The agreement does not release individuals from civil charges, nor does it release JPMorgan or any individuals from potential criminal prosecution. In addition, as part of the settlement, JPMorgan has pledged to fully cooperate in investigations related to the conduct covered by the agreement.
To keep JPMorgan from seeking reimbursement from the federal government for any money it pays pursuant to this resolution, the Justice Department required language in the settlement agreement which prohibits JPMorgan from demanding indemnification from the FDIC, both in its capacity as a corporate entity and as the receiver for Washington Mutual.
“The settlement announced today will provide a significant recovery for six FDIC receiverships. It also fully protects the FDIC from indemnification claims out of this settlement,” said FDIC Chairman Martin J. Gruenberg. “The FDIC will continue to pursue litigation where necessary in order to recover as much as possible for FDIC receiverships, money that is ultimately returned to the Deposit Insurance Fund, uninsured depositors and creditors of failed banks.”
“NCUA’s Board extends our thanks and appreciation to our attorneys and to the Department of Justice, who have worked closely together for more than three years to bring this matter to a successful resolution,” said NCUA Board Chairman Debbie Matz. “The faulty mortgage-backed securities created and packaged by JPMorgan and other institutions created a crisis in the credit union industry, and we’re pleased a measure of accountability has been reached.”
“JPMorgan and the banks it bought securitized billions of dollars of defective mortgages,” said Acting FHFA Inspector General Michael P. Stephens. “Investors, including Fannie Mae and Freddie Mac, suffered enormous losses by purchasing RMBS from JPMorgan, Washington Mutual and Bear Stearns not knowing about those defects. Today’s settlement is a significant, but by no means final step by FHFA-OIG and its law enforcement partners to hold accountable those who committed acts of fraud and deceit. We are proud to have worked with the Department of Justice, the U.S. attorneys in Sacramento and Philadelphia and the New York and California state attorneys general; they have been great partners and we look forward to our continued work together.”
The attorneys general of New York, California, Delaware, Illinois and Massachusetts also conducted related investigations that were critical to bringing about this settlement.
“Since my first day in office, I have insisted that there must be accountability for the misconduct that led to the crash of the housing market and the collapse of the American economy,” said New York Attorney General Eric Schneiderman, Co-Chair of the RMBS Working Group. “This historic deal, which will bring long overdue relief to homeowners around the country and across New York, is exactly what our working group was created to do. We refused to allow systemic frauds that harmed so many New York homeowners and investors to simply be forgotten, and as a result we’ve won a major victory today in the fight to hold those who caused the financial crisis accountable.”
“JP Morgan Chase profited by giving California’s pension funds incomplete information about mortgage investments,” California Attorney General Kamala D. Harris said. “This settlement returns the money to California’s pension funds that JP Morgan wrongfully took from them.”
“Our financial system only works when everyone plays by the rules,” said Delaware Attorney General Beau Biden. “Today, as a result of our coordinated investigations, we are holding accountable one of the financial institutions that, by breaking those rules, helped cause the economic crisis that brought our nation to its knees. Even as the American people recover from this crisis, we will continue to seek accountability on their behalf.”
“We are still cleaning up the mess that Wall Street made with its reckless investment schemes and fraudulent conduct,” said Illinois Attorney General Lisa Madigan. “Today’s settlement with JPMorgan will assist Illinois in recovering its losses from the dangerous and deceptive securities that put our economy on the path to destruction.”
“This is a historic settlement that will help us to hold accountable those investment banks that played a role in creating and exacerbating the housing crisis,” said Massachusetts Attorney General Martha Coakley. “We appreciate the work of the Department of Justice and the other enforcement agencies in bringing about this resolution and look forward to continuing to work together in other securitization cases.”
The RMBS Working Group is a federal and state law enforcement effort focused on investigating fraud and abuse in the RMBS market that helped lead to the 2008 financial crisis. The RMBS Working Group brings together more than 200 attorneys, investigators, analysts and staff from dozens of state and federal agencies including the Department of Justice, 10 U.S. attorney’s offices, the FBI, the Securities and Exchange Commission (SEC), the Department of Housing and Urban Development (HUD), HUD’s Office of Inspector General, the FHFA-OIG, the Office of the Special Inspector General for the Troubled Asset Relief Program, the Federal Reserve Board’s Office of Inspector General, the Recovery Accountability and Transparency Board, the Financial Crimes Enforcement Network, and more than 10 state attorneys general offices around the country.
The RMBS Working Group is led by five co-chairs: Assistant Attorney General for the Civil Division Stuart Delery, Acting Assistant Attorney General for the Criminal Division Mythili Raman, Co-Director of the SEC’s Division of Enforcement George Canellos, U.S. Attorney for the District of Colorado John Walsh and New York Attorney General Eric Schneiderman.
Learn more about the RMBS Working Group and the Financial Fraud Enforcement Task Force at: www.stopfraud.gov.
Related Materials:
JPMorgan Settlement Agreement
Annex 1: Statement of Facts
Annex 2: Consumer Relief
Annex 3: List of RMBS covered by the settlement
Exhibit A: Claims resolved by the State of New York
Exhibit B: Claims resolved by the Federal Housing Finance Agency
Exhibit C: Claims resolved by the National Credit Union Administration
Exhibit D: Claims resolved by the Federal Deposit Insurance CorporationFreshPoint Inc. to Pay $4.2 Million for Overbilling the Department of Defense for ProduceRead the Press Release
The Justice Department announced today that FreshPoint Inc., a Houston, Texas-based food distribution company and wholly owned subsidiary of Sysco Corp., has agreed to pay $4.2 million to resolve allegations that it overcharged the Department of Defense for fresh fruit and vegetables purchased under 15 separate contracts. The contracts were awarded to East Coast Fruit Company and subsequently performed by FreshPoint following FreshPoint’s acquisition of East Coast Fruit Company in 2007.
“The Department of Justice is committed to ensuring the integrity of federal contracts and will pursue contractors that knowingly overcharge the government for goods or services,” said Assistant Attorney General for the Department of Justice’s Civil Division Stuart F. Delery. “Contractors that do business with the government must do so honestly and fairly or suffer the consequences of their misconduct.”
“This settlement demonstrates one of the many types of fraud inflicted upon the American taxpayers,” said U.S. Attorney for the Southern District of Georgia Edward Tarver. “The U.S. Attorney’s Office will honor our commitment to vigorously enforce the False Claims Act in order to protect the financial soundness of our nation and its military.”
The settlement resolves allegations that from Dec. 17, 2007, through Sept. 11, 2009, FreshPoint overcharged the government on hundreds of sales of fresh fruit and vegetables by improperly inflating its prices to the government to reflect FreshPoint’s view of the prevailing market price of the goods at the time of sale. The government alleged that this practice violated FreshPoint’s contracts with the government that required FreshPoint to provide the produce at cost, plus a pre-established mark-up for profit, and did not allow FreshPoint to make additional price adjustments based upon perceived changes in market prices.
The allegations arose from a lawsuit filed under the whistleblower provisions of the False Claims Act, which allow private individuals to sue on behalf of the government and to share in the proceeds of any settlement or judgment. The whistleblower in this case, former FreshPoint employee Charles Hall, will receive $798,000.This settlement was the result of a coordinated effort by the Justice Department’s Civil Division, Commercial Litigation Branch; the U.S. Attorney’s Office for the Southern District of Georgia; the Defense Criminal Investigative Service; the Defense Contract Audit Agency and the Defense Logistics Agency Office of General Counsel. The claims settled by this agreement are allegations only, and there has been no determination of liability. The case is captioned U.S. ex rel. Hall v. SYSCO Corp., et al., Case No: 4:11-CV-57 (S.D. Ga.).
Cabot Corporation Agrees to Spend over $84 Million to Control Harmful Air Pollution at Louisiana and Texas FacilitiesRead the Press Release
Boston-based Cabot Corporation, the second largest carbon black manufacturer in the United States, has agreed to pay a $975,000 civil penalty and spend an estimated $84 million on state of the art technology to control harmful air pollution, resolving alleged violations of the New Source Review (NSR) provisions of the Clean Air Act (CAA) at its three facilities in the towns of Franklin and Ville Platte, La., and Pampa, Texas, the Department of Justice and the U.S. Environmental Protection Agency (EPA) announced today. This agreement is the first to result from a national enforcement initiative aimed at bringing carbon black manufacturers into compliance with the CAA’s NSR provisions.
The state of Louisiana Department of Environmental Quality is a co-plaintiff in the case and will receive $292,500 of the penalty.
“By agreeing to pay an appropriate penalty and install state of the art technology to control harmful air pollution, Cabot Corp. is taking a positive step forward to address these alleged violations of the Clean Air Act,” said Acting Assistant Attorney General Robert G. Dreher of the Justice Department’s Environment and Natural Resources Division. “This agreement will serve as a model for how the industry can come into compliance with the Clean Air Act by installing controls that prevent harmful pollution and improve air quality for surrounding communities.”
“With today’s commitment to invest in pollution controls, Cabot has raised the industry standard for environmental protection,” said Assistant Administrator Cynthia Giles of EPA’s Office of Enforcement and Compliance Assurance. “These upgrades will have lasting, tangible impacts on improved respiratory health for local communities. We expect others in the industry to take notice and realize their obligation to protect the communities in which they operate.”
“This is a huge win for the citizens of our district,” said U.S. Attorney Stephanie A. Finley. “These harmful pollutants can cause serious, long term respiratory harm. The United States Attorney’s Office is committed to the enforcement of the environmental laws and protection of the community. This settlement promotes a healthier environment and an opportunity to allow the residents of the district to breathe cleaner air.”
At all three facilities, the settlement requires that Cabot optimize existing controls for particulate matter or soot, operate an “early warning” detection system that will alert facility operators to any particulate matter releases, and comply with a plan to control “fugitive emissions” which result from leaks or unintended releases of gases. To address nitrogen oxide (NOx) pollution, Cabot must install selective catalytic reduction technology to significantly reduce emissions, install continuous monitoring, and comply with stringent limits. At the two larger facilities in Louisiana, Cabot must address sulfur dioxide (SO2) pollution by installing wet gas scrubbers to control emissions, install continuous monitoring, and comply with stringent emissions limits. In addition, the Texas facility is required to comply with a limit on the amount of sulfur in feedstock that is the lowest for any carbon black plant in the United States.
These measures are expected to reduce NOx emissions by approximately 1,975 tons per year, SO2 emissions by approximately 12,380 tons per year, and significantly improve existing particulate matter controls. Exposure to NOx emissions can cause severe respiratory problems and contribute to childhood asthma. SO2 and NOx can be converted to fine particulate matter once released in the air. Fine particulates can be breathed in and lodged deep in the lungs, leading to a variety of health problems and even premature death. The harmful health and environmental impacts from these pollutants can occur near the facilities as well as in communities far downwind from the plants.
In the complaint filed by DOJ on behalf of EPA, the government alleged that, between 2003 and 2009, Cabot made major modifications at its carbon black facilities without obtaining pre-construction permits and without installing and operating required pollution technology. The complaint further alleges that these actions resulted in increased emissions of NOx and SO2, violating CAA requirements stating that companies must obtain the necessary permits prior to making modifications at a facility and must install and operate required pollution control equipment if those modifications will result in increases of certain pollutants.
Today’s action also requires that Cabot spend $450,000 on energy saving and pollution reduction projects that will benefit the communities surrounding the facilities in Franklin and Ville Platte, La., and in Pampa, Texas, such as upgrading air handling units at municipal buildings in the three communities to more efficient technology.
Carbon black is a fine carbonaceous powder used as a structural support medium in tires and as a pigment in a variety of products such as plastic, rubber, inkjet toner and cosmetics. It is produced by burning oil in a low oxygen environment; the oil is transformed into soot (carbon black), which is collected in a baghouse. Because the oil used in the process is low value high sulfur oil, the manufacturing process creates significant amounts of SO2 and NOx, as well as particulate matter.
This settlement is part of EPA’s national enforcement initiative to control harmful air pollution from the largest sources of emissions. Since 2010, EPA has been focusing enforcement efforts on reducing emissions at carbon manufacturing plants in the United States. Currently, none of the 15 carbon black manufacturing plants located in the United States have controls on emissions of SO2 and NOx or have continuous emissions monitors.
Cabot Corporation manufactures global specialty chemicals and performance materials, which include rubber additives for tires and brake pads, activated carbon for air purifiers, chemicals used in the manufacture of lithium-ion batteries, and inkjet colorants.
The proposed consent decree will be lodged with the U.S. District Court for the Western District Court for Louisiana and will be subject to a 45-day public comment period. The company is required to pay the penalty within 30 days after the court approves the settlement. The proposed consent decree can be viewed online at www.justice.gov/enrd/Consent_Decrees.html
More information about the settlement:
www2.epa.gov/enforcement/cabot-corporation-clean-air-act-settlement
More information about EPA’s national enforcement initiative: www.epa.gov/compliance/data/planning/initiatives/2011airpollution.html
“Strategies for Justice – Collaboration in the Western Pacific: A Pacific Regional Response to Combat Human Trafficking”Read the Press Release
U.S. Attorney’s Office for the District of Guam and the Northern Mariana Islands Co-sponsors Human Trafficking Training in Palau
Alicia A.G. Limtiaco, U.S. Attorney for the Districts of Guam and the Northern Mariana Islands, announced that her office co-sponsored the 2nd Pacific Regional Response to Combat Human Trafficking International Conference held in the Republic of Palau on July 22-26, 2013. U.S. Attorney Limtiaco, Assistant U.S. Attorney (AUSA) Rosetta San Nicolas and AUSA Rami Badawy, conducted training and presentations on topics including, “Pacific Regional Response to Combat Human Trafficking - Collaboration in the Western Pacific”; “Investigation and Prosecution of Sexually Oriented Businesses and Civil Code Enforcement”; and “Child Sexual Exploitation, Child Pornography and Human Trafficking of Minors.” U.S. Attorney Limtiaco, AUSA San Nicolas and AUSA Badawy were also instructors of the Human Trafficking Trial Advocacy Course, held at the Conference.
The U.S. Attorney’s Office (“USAO”) for the Districts of Guam and the Northern Mariana Islands (“NMI”) has been and continues to work collaboratively with the National District Attorney’s Association (NDAA); U.S. Department of Interior, Office of Insular Affairs, Federal Ombudsman Office; and U.S. Department of State, Monitoring of Trafficking in Persons Office, on a Pacific Regional Response to Combat Human Trafficking initiative. This response is a critical component of the USAO’s human trafficking strategic plan given increased concerns in the Pacific region regarding sex and labor trafficking, violence against women, and child abuse and sexual exploitation. Also of significance are the source countries within the Asia Pacific region from which victims are recruited and trafficked, and their close proximity to Guam, the NMI, Republic of Palau, Republic of the Marshall Islands, and Federated States of Micronesia (“FSM”); and the trafficking of victims in the islands themselves.
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.
The conference provided a forum for governmental and non-governmental organizations to engage in dialogue and discuss issues, concerns, problems, plans, strategies and solutions relating to human trafficking in their respective Pacific island communities, in the Pacific region, and globally. The conference also provided an opportunity for the participants to establish professional relationships and partnerships, and to engage in cooperative and collaborative domestic and international efforts to prevent and fight against human trafficking, establish victim services, and prosecute and hold traffickers accountable for these heinous crimes.
The “2nd Pacific Regional Response to Combat Human Trafficking International Conference” was attended by approximately 100 leaders and members of the Pacific regional community.
Photos of the conference are attached.
Conference attendees from Guam and Saipan, left to right,
Assistant U.S. Attorney Rami Badawy, Cynthia Kinto, UOG Student, Mary Kate Donnell, UOG Student, U.S. Attorney Alicia Limtiaco. Lauri Ogumoro, Director, Guma Esperanza, Saipan Attorney General Joey San Nicolas and Assistant U.S. Attorney Rosetta San Nicolas.U.S. Attorney Alicia Limtiaco addressing conference participants.
William K. Harrington to Serve as U.S. Trustee for New York, Connecticut, VermontRead the Press Release
WASHINGTON – William K. Harrington, the U.S. Trustee for Massachusetts, New Hampshire, Maine and Rhode Island (Region 1), has been designated by Attorney General Eric Holder also to serve as the U.S. Trustee for New York, Connecticut and Vermont (Region 2), effective on November 27, 2013, the Executive Office for U.S. Trustees announced today. Mr. Harrington replaces Tracy Hope Davis, who has been appointed U.S. Trustee for Northern and Eastern California and Nevada (Region 17).
“The U.S. Trustee Program is tremendously fortunate to have Bill Harrington able to step in to serve as U.S. Trustee for this extremely significant region,” stated Clifford J. White III, Director of the Executive Office for U.S. Trustees. “Bill has many years of experience in the oversight of complex chapter 11 reorganizations, including as head of our office in Wilmington, Delaware, and he was a leader in the development of the updated chapter 11 attorneys’ fee guidelines that we issued in June.”
Mr. Harrington has served as U.S. Trustee for Region 1 since October 2010. Prior to that appointment, he served for two years as the Assistant U.S. Trustee in Wilmington, Del., after joining the U.S. Trustee Program (USTP) in March 2004 as a Trial Attorney. Previously, Mr. Harrington practiced law in a large regional law firm concentrating on bankruptcy, corporate and commercial litigation matters. Before attending law school, he worked as a senior accountant for an investment management firm in Boston.
Mr. Harrington received a law degree from Villanova University School of Law in Villanova, Pa., and a Bachelor of Science (Economics) degree from the Wharton School, University of Pennsylvania, in Philadelphia.
The USTP is the component of the Justice Department that protects the integrity of the bankruptcy system by overseeing case administration and litigating to enforce the bankruptcy laws. The USTP has 21 regions and 95 field offices. Region 2 is headquartered in New York City with additional offices in Albany, Brooklyn, Buffalo, Central Islip, Rochester and Utica, N.Y., and New Haven, Conn.
Contact:Jane Limprecht, Public Information Officer
Executive Office for U.S. Trustees
(202) 305-7411U.S. Attorney’s Office for the Districts of Guam and the Northern Mariana Islands Conducts Training in Palau, Pohnpei and ChuukRead the Press Release
Alicia A.G. Limtiaco, U.S. Attorney for the Districts of Guam and the Northern Mariana Islands (NMI), announced that her office, together with the FBI, conducted training in the Republic of Palau; Pohnpei State, Federated States of Micronesia (FSM), and Chuuk State, FSM. The training was held in Palau in December 6-7, 2012, in Ponape on January 7- 8, 2013, and in Chuuk on January 9-10, 2013. U.S. Attorney Limtiaco, AUSA Rosetta San Nicolas, and AUSA Rami Badawy conducted presentations on topics including, “Pacific Regional Response to Combat Human Trafficking - Collaboration in the Western Pacific;” “Introduction to Human Trafficking Investigation and Prosecution;” and “Nuts and Bolts: Investigation and Prosecution of Human Trafficking Cases;” and “Bullying and Cyberbullying.” FBI Special Agent Jason Todd provided training on “Active Listening; Suspect Interviews;” “Crime Scene Investigation;” and “Introduction to Cyber Crime.”The U.S. Attorney’s Office (“USAO”) for the Districts of Guam and the NMI has been and continues to work collaboratively with the National District Attorney’s Association; U.S. Department of Interior, Office of Insular Affairs, Federal Ombudsman Office; and U.S. Department of State, Monitoring of Trafficking in Persons Office, on 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.
Participants also learned about human trafficking, including sex trafficking and labor trafficking, the seriousness of the problem, and how to identify, communicate with, and respond to the needs of victims. Also discussed was a review of the Trafficking Victims Protection Act and other related federal laws.
The second day brought to the participants an overview of technology, what cybercrime is and related issues such as terrorism. Participants were also given an overview of bullying and cyberbullying; the seriousness of the problem; the impact on the community including youth suicide; enforcement efforts including civil rights lawsuits and consent decrees issued against school districts; and prevention efforts including public awareness outreaches to schools and parent groups, training of school districts, and other related activities.
Participants were provided information about child sexual and physical abuse. Also discussed were issues relating to children with special needs, and the relationship between child abuse and human trafficking of children.
U.S. Attorney’s Office for the Districts of Guam and the Northern Mariana Islands Conducts Training in Palau, Pohnpei and ChuukRead the Press Release
“Strategies for Justice – Collaboration in the Western Pacific”
Alicia A.G. Limtiaco, U.S. Attorney for the Districts of Guam and the Northern Mariana Islands (NMI), announced that her office, together with the FBI, conducted training in the Republic of Palau; Pohnpei State, Federated States of Micronesia (FSM), and Chuuk State, FSM. The training was held in Palau in December 6-7, 2012, in Ponape on January 7- 8, 2013, and in Chuuk on January 9-10, 2013. U.S. Attorney Limtiaco, AUSA Rosetta San Nicolas, and AUSA Rami Badawy conducted presentations on topics including, “Pacific Regional Response to Combat Human Trafficking - Collaboration in the Western Pacific;” “Introduction to Human Trafficking Investigation and Prosecution;” and “Nuts and Bolts: Investigation and Prosecution of Human Trafficking Cases;” and “Bullying and Cyberbullying.” FBI Special Agent Jason Todd provided training on “Active Listening; Suspect Interviews;” “Crime Scene Investigation;” and “Introduction to Cyber Crime.”
The U.S. Attorney’s Office (“USAO”) for the Districts of Guam and the NMI has been and continues to work collaboratively with the National District Attorney’s Association; U.S. Department of Interior, Office of Insular Affairs, Federal Ombudsman Office; and U.S. Department of State, Monitoring of Trafficking in Persons Office, on 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.
Participants also learned about human trafficking, including sex trafficking and labor trafficking, the seriousness of the problem, and how to identify, communicate with, and respond to the needs of victims. Also discussed was a review of the Trafficking Victims Protection Act and other related federal laws.
The second day brought to the participants an overview of technology, what cybercrime is and related issues such as terrorism. Participants were also given an overview of bullying and cyberbullying; the seriousness of the problem; the impact on the community including youth suicide; enforcement efforts including civil rights lawsuits and consent decrees issued against school districts; and prevention efforts including public awareness outreaches to schools and parent groups, training of school districts, and other related activities.
Participants were provided information about child sexual and physical abuse. Also discussed were issues relating to children with special needs, and the relationship between child abuse and human trafficking of children.
A photo of some of the speakers at the training is attached
From left to right, U.S. Attorney Alicia Limtiaco, Dr. Sharon Cooper, Suzanna Tiapula, NDAA Executive Director, and Dr. Kimberly Chang.Tracy Hope Davis Is Appointed U.S. Trustee for Northern and Eastern California, NevadaRead the Press Release
WASHINGTON–Tracy Hope Davis has been appointed by Attorney General Eric Holder as U.S. Trustee for Northern and Eastern California and Nevada (Region 17), effective on November 27, 2013, the Executive Office for U.S. Trustees announced today. She replaces August B. Landis, who has been appointed to the U.S. Bankruptcy Court for the District of Nevada.
“I am delighted to announce the appointment of Tracy Hope Davis as U.S. Trustee for Northern and Eastern California and Nevada,” stated Clifford J. White III, Director of the Executive Office for U.S. Trustees. “Tracy has done an outstanding job as U.S. Trustee in New York, Connecticut and Vermont, and is nationally recognized for her superb oversight of complex chapter 11 cases in the Southern District of New York. We are fortunate to have her bring her expertise to another vital region of the country and to continue to rely on her leadership in developing national policies and initiatives.”
Ms. Davis was appointed as U.S. Trustee in New York, Connecticut and Vermont (Region 2) in August 2010. She joined the U.S. Trustee Program (USTP) in 1997 as a Trial Attorney before being named as the Assistant U.S. Trustee in the Southern District of New York. She has also served as the Acting Assistant U.S. Trustee in the Eastern District of New York (Brooklyn) and the Acting U.S. Trustee for Region 2. Previously, she practiced bankruptcy law in New York City and served as law clerk to the Honorable Cornelius Blackshear, U.S. Bankruptcy Court, Southern District of New York (retired).
Ms. Davis received a law degree from Rutgers Law School in Newark, N.J., and a Bachelor of Arts degree from Wells College in Aurora, N.Y. She has served in various capacities as a Wells College alumna, including as a member of the Wells College Board of Trustees and as a vice president on the Alumnae Board of Wells College.
The USTP is the component of the Justice Department that protects the integrity of the bankruptcy system by overseeing case administration and litigating to enforce the bankruptcy laws. The USTP has 21 regions and 95 field offices. Region 17 is headquartered in San Francisco, with additional offices in Fresno, Oakland, Sacramento and San Jose, Calif., and Las Vegas and Reno, Nev.
Contact:Jane Limprecht, Public Information Officer
Executive Office for U.S. Trustees
(202) 305-7411Statement of Mythili Raman Acting Assistant Attorney General U.S. Justice Department Criminal Division Before the Committee on Homeland Security and Governmental Affairs United States Senate for a Hearing Entitled "Beyond the Silk Road"Read the Press Release
Chairman Carper, Ranking Member Coburn, and distinguished Members of the Committee: Thank you for the opportunity to appear before the Committee today to discuss the Department of Justice’s work regarding virtual currencies. I am honored to represent the Department at this hearing and to describe for you our approach to virtual currencies, our recent successes in prosecuting criminals who use virtual currencies for illicit purposes, and some of the challenges we face as virtual currency systems continue to evolve.
The Department of Justice recognizes that many virtual currency systems offer legitimate financial services and have the potential to promote more efficient global commerce. We have also seen, however, that certain aspects of virtual currencies appeal to criminals and present a host of new challenges to law enforcement.
The concept of virtual currencies is not new to the Department and, indeed, the Department has investigated and prosecuted the illicit use of virtual currencies since the late 1990s, when criminals first began using systems such as WebMoney and e-Gold to conduct their business. Over the last 15 years, however, virtual currencies have evolved and diversified significantly, challenging the Department to adapt our capabilities to deal with new systems and threats.
As with all emerging technologies, the Department has aggressively used our existing tools and capabilities to combat illegal activities involving virtual currencies. The Department has two primary law enforcement interests in virtual currency: (1) deterring and prosecuting criminals using virtual currency systems to move or hide money that is used to facilitate, or is derived from, criminal or terrorist acts, i.e., money laundering; and (2) investigating and prosecuting those virtual currency services that themselves violate laws aimed at illegal money transmission and money laundering. As I will describe in my testimony, the Department is committed to using all the tools at our disposal to ensure that those law enforcement interests are met, even as virtual currency systems evolve.
“Virtual currency” is a medium of exchange circulated over a network, typically the Internet, which is not backed by a government. These systems can be both centralized and decentralized.
Early centralized models, where the currency is controlled by a single private entity, have expanded and now encompass a wide range of business concepts. Some centralized virtual currencies take the form of digital precious metals, such as e-Gold and Pecunix, where users exchange digital currency units ostensibly backed by gold bullion or other precious metals. Others exist within popular online games or virtual worlds, such as Farmville, Second Life, or World of Warcraft. Still others are online payment systems such as WebMoney and Liberty Reserve, which are available generally outside of specific online communities and denominate users’ accounts in virtual currency rather than U.S. Dollars, Euros, or some other national currency. Decentralized systems such as Bitcoin, which have no centralized administrating authority and instead operate as peer-to-peer transaction networks, entered the scene relatively recently but are growing rapidly. A network of sites and services, including exchangers who buy and sell virtual currencies in exchange for national currencies or other mediums of value, have developed around virtual currency systems, as well.
Criminals are nearly always early adopters of new technologies and financial systems, and virtual currency is no exception. As virtual currency has grown, it has attracted illicit users along with legitimate ones. Our experience has shown that some criminals have exploited virtual currency systems because of the ability of those systems to conduct transfers quickly, securely, and often with a perceived higher level of anonymity than that afforded by traditional financial services. The irreversibility of many virtual currency transactions additionally appeals to a variety of individuals seeking to engage in illicit activity, as does their ability to send funds cross-border.
Cyber criminals were among the first illicit groups to take widespread advantage of virtual currency. We have seen that many players in the cyber underground rely on virtual currency to conduct financial transactions. Early users of virtual currency also included criminals involved in the trafficking of child pornography, credit card fraud, identity theft, and high-yield investment schemes. As virtual currency became more widespread and criminals became increasingly computer savvy, other criminal groups moved to capitalize on virtual currency, as well. There are now public examples of virtual currency being used by nearly every type of criminal imaginable.
It is not surprising that criminals are drawn to services that allow users to conduct financial transactions while remaining largely anonymous. And, indeed, some of the criminal activity occurs through online black markets, many of which operate as Tor hidden services. Tor hidden services are sites accessible only through Tor, an anonymizing network that masks users’ Internet traffic by routing it through a series of volunteer servers, called “nodes,” across the globe. Online black markets capitalize on Tor’s anonymizing features to offer a wide selection of illicit goods and services, ranging from pornographic images of children to dangerous narcotics to stolen credit card information.
At the same time, we have seen that though virtual currency systems are growing rapidly, few systems currently exist that could easily accommodate the hundreds of millions of dollars often moved in a single large-scale money laundering scheme. Transaction size is limited by the carrying capacity of the virtual currency systems and the exchangers. When taken in the aggregate, however, the relatively small dollar values associated with most illicit virtual currency transactions quickly add up. At their prime, e-Gold and Liberty Reserve, two virtual currency systems prosecuted by the Department, each moved the equivalent of over $1 billion in illegal proceeds annually. As virtual currencies grow, the capacity for larger single transactions grows, as well.
The Department has prosecuted several of these systems, such as e-Gold, based on evidence that they can be, and often are, intentionally designed to facilitate illegal activity. These services typically do not conduct any meaningful customer due diligence and do not screen for transactions related to money laundering or terrorist financing. At the same time, these complicit and illicit businesses allow users to conceal their identities and maintain high levels of anonymity during transactions.
To be clear, virtual currency is not necessarily synonymous with anonymity. A convertible virtual currency with appropriate anti-money laundering and know-your-customer controls, as required by U.S. law, can safeguard its system from exploitation by criminals and terrorists in the same way any other money services business could. As virtual currency systems develop, it is imperative to law enforcement interests that those systems comply with applicable anti-money laundering and know-your-customer controls.
Exploitation by malicious actors is a problem faced by all types of financial services and is not unique to virtual currency systems. Although malicious actors have utilized emerging technologies to further their criminal schemes, the Department has thus far been able to apply existing tools to ensure vigorous prosecution of these schemes.
The Department relies on money services business, money transmission, and anti-money laundering statutes to curtail this sort of unlawful activity. Many virtual currency systems, exchangers, and related services operate as money transmitters, which are part of a larger class of institutions called money services businesses. Money transmitters are required under 31 U.S.C. § 5330 to register with the Financial Crimes Enforcement Network (FinCEN). Most states also require money transmitters to obtain a state license in order to conduct business in the state. Any money transmitter that fails to register with FinCEN or to obtain the requisite state licensing may be subject to criminal prosecution under 18 U.S.C. § 1960. Additionally, the general money laundering and spending statutes, 18 U.S.C. §§ 1956 and 1957, cover financial transactions involving virtual currencies. Finally, where virtual currencies are used in furtherance of underlying criminal activity, the Department can rely on traditional criminal statutes proscribing that activity, such as narcotics, cybercrime, child exploitation, and firearms laws.
Some of the major prosecutions in recent years involving virtual currency services are as follows.
The Department first took major action against an illicit virtual currency service in 2007, when it indicted e-Gold and its three principal owners on charges related to money laundering and operating an unlicensed money transmitting business. E-Gold offered digital accounts purportedly backed by physical gold bullion. A valid e-mail address was the only information required to set up an account, allowing users to conduct highly anonymous international transactions over the Internet. As a result, e-Gold became a popular payment method for sellers of child pornography, operators of investment scams, and perpetrators of credit card and identity fraud. At its peak, e-Gold reportedly moved over $6 million each day for more than 2.5 million accounts. In 2008, e-Gold and the three individuals pleaded guilty.Following the e-Gold indictment, several similar but smaller systems and exchangers were indicted or closed themselves down to evade law enforcement detection. According to publicly filed charging documents, an executive of one of those businesses, Arthur Budovsky, then set out to create Liberty Reserve, an improved centralized virtual currency variation allegedly designed to evade U.S. law enforcement. Among other things, Liberty Reserve operated offshore –it was based in Costa Rica--and purportedly recommended that its customers use money exchangers located in countries without significant governmental money-laundering oversight or regulation. Moreover, Budovsky, the principal founder of Liberty Reserve, was so committed to avoiding the reach of U.S. law that, according to the indictment, in 2011, he formally renounced his U.S. citizenship and became a Costa Rican citizen in order to avoid facing justice in the United States .
Despite Budovsky’s alleged efforts, earlier this year, the Department indicted Liberty Reserve and its executives, including Budovsky, for running a $6 billion money laundering operation. In a coordinated action, the Department of the Treasury identified Liberty Reserve as a financial institution of primary money laundering concern under Section 311 of the USA PATRIOT Act, effectively cutting it off from the U.S. financial system.
According to the indictment, Liberty Reserve allowed users to send and receive funds with a high level of anonymity by not requiring users to validate their identities and allowing users to make untraceable fund transfers in exchange for a privacy fee. Many of the transactions were sent to or from users in the United States, but Liberty Reserve never registered with the appropriate U.S. authorities. As revealed in the Department’s filings, Liberty Reserve became a system of choice for cyber criminals and was used in a wide array of illegal activity, including credit card fraud, identity theft, investment fraud, computer hacking, and child pornography. As a result of the Department’s action, the site was shuttered and effectively put out of business, and five defendants were arrested. One is in custody in the United States, one has entered a guilty plea, and three others, including the lead defendant Budovsky, are pending extradition. The case exemplifies the Department’s resolve to pursue purported major money laundering facilitators, even those who hide offshore.
Just last month, the Department took action against one of the most popular online black markets, Silk Road. Allegedly operated by a U.S. citizen living in California at the time of his arrest, Silk Road accepted bitcoins exclusively as a payment mechanism on its site. The Department’s complaint alleges that, in less than three years, Silk Road served as a venue for over 100,000 buyers to purchase hundreds of kilograms of illegal drugs and other illicit goods from several thousand drug dealers and other criminal vendors. The site also purportedly laundered the proceeds of these transactions, amounting to hundreds of millions of dollars in bitcoins. In addition to arresting the site’s operator and shutting down the service, the Department to date has seized over 170 thousand bitcoins, valued as of Friday, November 15, 2013, at over $70 million.
A separate indictment charges Silk Road’s operator with drug distribution conspiracy, attempted witness murder, and using interstate commerce facilities in the commission of murder-for-hire. With regard to the murder-related charges, the indictment alleges that the Silk Road operator paid an undercover federal agent to murder one of the operator’s employees.
The cases I just described illustrate not only Department successes in combating illicit use of virtual currency, but also many of the challenges investigators face when they encounter these systems, some of which may ultimately require additional legal or regulatory tools.
Virtual currency allows users to send money across the globe without dealing with a traditional financial institution. While this feature provides several benefits for legitimate customers, it can significantly complicate law enforcement efforts to follow the money.
Virtual currency systems have a global reach and clientele. Virtual currency businesses can cater to U.S. clientele while operating on the other side of the world. Investigations into illicit virtual currency businesses therefore often require considerable cooperation from international partners. The Liberty Reserve investigation and takedown, for example, involved coordinated law enforcement action in 17 countries.
The international nature of the transactions poses an additional challenge where the overseas regulatory regime treats virtual currency differently or, as is true in some cases, fails to cover it at all. While this challenge may diminish with the Financial Action Task Force’s recent guidance addressing the need for all countries to develop a risk-based approach to new payment products and services, incongruent regulatory regimes will likely remain a challenge when dealing with virtual currency services overseas.
Among the most significant challenges the Department faces in dealing with virtual currency is the difficulty in obtaining customer records. Because decentralized systems lack any sort of administering authority to collect user information or receive legal process, investigators must rely on information collected by other sources, such as exchangers. Even if the target used a centralized system or exchanger, however, accurate customer records may still be difficult to obtain, or may not exist at all. Illicit users are typically attracted to systems with lax anti-money laundering and know-your-customer controls. These services often attempt to evade U.S. action by operating out of countries that have poor regulatory oversight and are less willing to cooperate with U.S. law enforcement. Even if the system at issue operates in a country with effective regulation and a cooperative relationship with the United States, the legal process for obtaining foreign records is relatively slow when compared to the near-instantaneous speed at which the virtual currency user can send the funds to another jurisdiction.
A final challenge arises from the link between virtual currency and encryption. Decentralized virtual currencies typically rely on an encryption algorithm, rather than a central authority, to administer the currency. These encryption-based currencies, also known as cryptocurrencies, lack a central administering authority that might otherwise possess valuable evidence. In addition, users of these currencies often encrypt their digital wallets, complicating our efforts to seize and forfeit criminal proceeds.
The Department recognizes that virtual currency’s ability to facilitate the global movement of funds by a wide array of illicit actors necessitates a comprehensive and collaborative approach with our domestic and international partners. To promote such coordination, the Department is an active participant in the Virtual Currency Emerging Threats Working Group (VCET). VCET was founded by the Federal Bureau of Investigation (FBI) in early 2012 to mitigate the cross-programmatic threats arising from illicit actors’ use of virtual currency systems. The group leverages the collective subject matter expertise of its members to address issues arising from illicit actors’ use of virtual currency, and deconflicts and shares information and concerns. VCET members represent an array of U.S. Government agencies, including, within the Department, the FBI, the Drug Enforcement Administration, multiple U.S. Attorney’s Offices, and the Criminal Division’s Asset Forfeiture and Money Laundering Section and Computer Crime and Intellectual Property Section.
The Department contributes to several additional interagency groups concerning virtual currencies and emerging payment systems, including the New Payment Methods Ad Hoc Working Group, a subgroup of the Terrorist Finance Working Group, led by the State Department. The FBI specifically has issued numerous intelligence products related to virtual currency, many of which were coauthored with other members of the U.S. Intelligence Community.
The Department is committed to working with our regulatory partners to ensure appropriate coordination on regulatory issues related to virtual currency. The Department participated in meetings and discussions with FinCEN regarding the July 2011 Final Rule on Money Services Businesses and its applicability to virtual currencies, as well as the related March 18, 2013, FinCEN guidance. The Department regards FinCEN’s regulation of many virtual currency services as money transmitters, as well as the resulting applicability of anti-money laundering and know-your-customer requirements under the Bank Secrecy Act, as crucial tools in preventing malicious actors from exploiting virtual currency systems in furtherance of illicit activity.
The Department works closely with FinCEN and the Department of Treasury to coordinate enforcement actions when appropriate. This relationship allowed the Department to unseal the Liberty Reserve indictment in coordination with Treasury’s announcement naming the company as a financial institution of primary money laundering concern under Section 311 of the USA PATRIOT Act. Such coordinated actions are integral tools in combating illicit finance.
The Department anticipates that virtual currency will continue to evolve and grow in popularity. That growth inevitably will be accompanied by an increase in illicit transactions, which makes it critical that virtual currency services understand their legal obligations and requirements. The Department is encouraged by the increasing prominence of legitimate virtual currency services that are attempting to comply with U.S. law. While a number of services have registered at the federal level, many are still struggling with implementing appropriate anti-money laundering, know-your-customer, and customer due diligence programs, as well as complying with state-level regulations and licensing requirements. As members of the U.S. financial community, virtual currency services can and must safeguard themselves from exploitation by criminals and terrorists by implementing legally required anti-money laundering and know-your-customer controls.
As the Administration’s Strategy to Combat Transnational Organized Crime recognizes, transnational organized crime networks are increasingly involved in cybercrime, and can imperil consumers’ faith in emerging digital systems. We must also pay close attention to the critical role of facilitators who cross both the licit and illicit worlds and provide services to legitimate customers and criminals alike.
The Department recognizes that malicious actors are often resourceful, and even legitimate virtual currency services can become unwitting conduits for illicit transactions when these actors are able to defeat or circumvent anti-money laundering controls. Outreach to these systems, much as the Department conducts with the formal financial sector, is an important tool in combating the exploitation of the systems for criminal and terrorist purposes. Because centralized payment systems and exchangers often interact with the traditional financial sector and hold bank accounts at major financial institutions, the range of such Department outreach extends to the financial services community at large, complementing the outreach and training efforts of FinCEN, the primary BSA regulator, and the Department of the Treasury. Department of Justice personnel routinely provide trainings to the private sector, as well as to domestic and international law enforcement and intelligence personnel, and specifically address virtual currency.
Law enforcement, Congress, and regulators must remain vigilant to ensure that the U.S. legal and regulatory structure is sufficiently robust to cover decentralized virtual currencies. The Department looks forward to working with Congress to ensure that law enforcement continues to have the tools necessary to combat the use of virtual currency for illicit purposes.
Chairman Carper and Ranking Member Coburn, I thank you for this opportunity to discuss the Department’s work on virtual currency.
I look forward to any questions that you may have.
Puerto Rico Man Pleads Guilty to Felony Violation of the Lacey Act for Illegal Sale of Sea Turtle MeatRead the Press Release
SAN JUAN, Puerto Rico – Manuel Garcia-Figueroa, a resident of Playa Añasco, Puerto Rico, pleaded guilty to a bill of information charging him with a felony violation of the Lacey Act for the illegal sale of sea turtle meat, the Justice Department announced today.
According to the information filed in the U.S. District Court in Puerto Rico, Garcia-Figueroa knowingly sold more than $350 of meat and carapaces from endangered hawksbill sea turtles (Eretmochelys imbricata) and meat from a threatened green sea turtle (Chelonia mydas), while knowing that the sea turtles had been taken in violation of the Endangered Species Act (ESA). The illegal sales took place on or about Dec.11, 2009, to on or about Jan. 4, 2010, in and around Playa Añasco. The case resulted from a joint-undercover operation by the National Oceanic and Atmospheric Administration Office of Law Enforcement (NOAA-OLE) and the FBI.
All species of sea turtles found in the Gulf of Mexico, Atlantic Ocean, Caribbean Sea and waters adjacent to the United States are protected by the ESA. Sea turtles are long-lived and slow to reach maturity. Pressures from habitat loss, fishing operations, pollution, illegal harvesting of eggs, and poaching of adults exacerbate the extinction risk faced by these animals. In Puerto Rico, the green sea turtle (Chelonia mydas) is listed as “threatened” under the ESA; the hawksbill sea turtle (Eretmochelys imbricata) is listed as “endangered.”
The Lacey Act is the principal U.S. statute designed to reduce the role that wildlife poaching, selling, and smuggling plays in depleting protected species. Once an ESA-listed wildlife species is taken or possessed illegally, it is unlawful to “import, export, transport, sell, receive, acquire, or purchase” that species. A person commits a criminal violation of the Lacey Act if the illegal conduct involves the sale or purchase of wildlife with a market value in excess of $350, while knowing that the wildlife was taken in violation of or in a manner unlawful under, any underlying law, treaty, or regulation.
The waters around Puerto Rico are designated as a critical habitat for the hawksbill and the green sea turtle. The most significant nesting for the hawksbill within the U.S. occurs in Puerto Rico and the U.S. Virgin Islands. Each year, about 500-1,000 hawksbill nests are laid on Mona Island, Puerto Rico. The green sea turtle population has declined by 48-65 percent over the past century. Puerto Rico is also home to nesting sites for the endangered leatherback sea turtle, the largest species of turtle in the world.
The commonwealth of Puerto Rico contains six national wildlife refuges (Cabo Rojo, Culebra, Desecheo, Laguna Cartagena, Navassa Island and Vieques) and is home to 25 endangered and threatened animal species, 21 of which are found nowhere else on earth
In 2013, the Justice Department’s Environment and Natural Resources Division and the U.S. Attorney’s Office in Puerto Rico announced the formation of the Puerto Rico Environmental Crimes Task Force to investigate and prosecute environmental crimes on the island. Under the new task force, federal investigative agencies are coordinating their efforts to investigate and prosecute those responsible for committing serious environmental crimes.The cases are being prosecuted by Trial Attorney Christopher Hale of the Environmental Crimes Section of the Justice Department’s Environment and Natural Resources Division and Assistant U.S. Attorneys Carmen Márquez and Hector Ramirez of the District of Puerto Rico. If convicted, the defendant faces a maximum sentence of five years in prison and a $250,000 fine.
Sentencing is scheduled for Feb. 18, 2014.
For more information of environmental crime laws: www.justice.gov/enrd/ENRD_ecs.htmlFor more information on marine turtles: www.nmfs.noaa.gov/pr/species/turtles/
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Joint Statement Following the<br /> EU-US Justice and Home Affairs <br /> Ministerial MeetingRead the Press Release
Attorney General Eric Holder and Acting Department of Homeland Security (DHS) Secretary Rand Beers today hosted an EU/U.S. Justice and Home Affairs Ministerial with their counterparts in the European Union: Lithuanian Minister of Justice Juozas Bernatonis and Lithuanian Vice Minister of Interior Elvinas Jankevicius representing the Lithuanian Presidency of the Council of the EU; Greek Minister of Justice, Transparency and Human Rights Charalampos Athanasiou representing the incoming Greek Presidency of the EU; and European Commission Vice President Viviane Reding and Commissioner Cecilia Malmström representing the EU Commission.
The U.S. and EU together released the following statement on the meeting:
“Our meeting was constructive and productive. We discussed a broad array of issues critical to the European Union and the United States, including: addressing the problem of sexual abuse of children online; coordinating work on counter-terrorism and security issues; countering violent extremism; expanding cooperation in criminal matters; joint efforts in the areas of cybercrime and cybersecurity; and mobility, migration and border issues. In addition, we discussed the rights of victims of crime, the rights of persons with disabilities and the prosecution of hate crimes.
Of special note, we discussed the threat posed by foreign fighters going to third countries, in particular Syria, and the possible response to address it. We intend to promote close information sharing between our respective agencies, as well as coordinated initiatives in third countries. We also discussed efforts of the U.S. and the EU in countering violent extremism, and agreed to intensify our cooperation.
Our meeting also addressed data protection, and issues related to alleged activities of U.S. intelligence agencies. We together recognize that this has led to regrettable tensions in the transatlantic relationship, which we seek to lessen. In order to protect all our citizens, it is of the utmost importance to address these issues by restoring trust and reinforcing our cooperation on justice and home affairs issues.
The EU and the U.S. are allies. Since 9/11 and subsequent terrorist attacks in Europe, the EU and U.S. have stepped up cooperation, including in the areas of police and criminal justice. Sharing relevant information, including personal data, while ensuring a high level of protection, is an essential element of this cooperation, and it must continue.
We are therefore, as a matter of urgency, committed to advancing rapidly in the negotiations for a meaningful and comprehensive data protection umbrella agreement in the field of law enforcement. The agreement would act as a basis to facilitate transfers of data in the context of police and judicial cooperation in criminal matters, by ensuring a high level of personal data protection for U.S. and EU citizens. We are committed to working to resolve the remaining issues raised by both sides, including judicial redress (a critical issue for the EU). Our aim is to complete the negotiations on the agreement ahead of summer 2014.
We also underline the value of the EU-U.S. Mutual Legal Assistance Agreement. We reiterate our commitment to ensure that it is used broadly and effectively for evidence purposes in criminal proceedings. There were also discussions on the need to clarify that personal data held by private entities in the territory of the other party will not be accessed by law enforcement agencies outside of legally authorized channels. We also agree to review the functioning of the Mutual Legal Assistance Agreement, as contemplated in the Agreement, and to consult each other whenever needed.
We take stock of the work done by the joint EU-U.S. ad hoc Working Group. We underline the importance of the ongoing reviews in the U.S. of U.S. Intelligence collection activities, including the review of activities by the Privacy and Civil Liberties Oversight Board (PCLOB) and the President’s Review Group on Intelligence and Communications Technology (Review Group). The access that has been given to the EU side of the ad hoc Working Group to officials in the U.S. intelligence community, the PCLOB, the Review Group, and U.S. congressional intelligence committees will help restore trust. This included constructive discussions about oversight practices in the U.S. The EU welcomes that the U.S. is considering adopting additional safeguards in the intelligence context that also would benefit EU citizens.
As these ongoing processes continue, they contribute to restoring trust, and to ensuring that we continue our vital law enforcement cooperation in order to protect EU and U.S. citizens.”
High-Ranking Bank Official at Venezuelan State Development Bank Pleads Guilty to Participating in Bribery SchemeRead the Press Release
A senior official in Venezuela’s state economic development bank has pleaded guilty in New York federal court to accepting bribes from agents and employees of a New York-based broker-dealer (Broker-Dealer) in exchange for directing her bank’s security-trading business to the Broker-Dealer.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Preet Bharara of the Southern District of New York, and Assistant Director in Charge George Venizelos of the New York Office of the FBI made the announcement.
Maria De Los Angeles Gonzalez De Hernandez, 55, pleaded guilty today before U.S. District Judge Paul A. Engelmayer in the Southern District of New York to conspiring to violate the Travel Act and to commit money laundering, as well as substantive counts of these offenses. Sentencing for Gonzalez is scheduled for Aug. 15, 2014, before Judge Engelmayer.
At all times relevant to the charges, Banco de Desarrollo Económico y Social de Venezuela (BANDES) was a state-run economic development bank in Venezuela. The Venezuelan government had a majority ownership interest in BANDES and provided it with substantial funding.
According to court records, Gonzalez was an official at BANDES and oversaw the development bank’s overseas trading activity. At her direction, BANDES conducted substantial trading through the Broker-Dealer. Most of the trades executed by the Broker-Dealer on behalf of BANDES involved fixed income investments for which the Broker-Dealer charged the bank a mark-up on purchases and a mark-down on sales.
From early 2009 through 2012, Gonzalez participated in a bribery scheme in which she directed trading business she controlled at BANDES to the Broker-Dealer and, in return, agents and employees of the Broker-Dealer shared the revenue the Broker-Dealer generated from this trading business with Gonzalez. During this time period, the Broker-Dealer generated over $60 million in mark-ups and mark-downs from trades with BANDES. Agents and employees of the Broker-Dealer devised a split with Gonzalez of the commissions paid by BANDES to the Broker-Dealer. Emails, account records, and other documents collected from the Broker-Dealer and other sources reveal that Gonzalez received a substantial share of the revenue generated by the Broker-Dealer for BANDES-related trades. Specifically, Gonzalez received millions in bribe payments from Broker-Dealer agents and employees.
Additionally, Gonzalez paid a portion of the bribe payments she received to another BANDES employee who was also involved in the scheme.
To further conceal the scheme, the kickbacks to Gonzalez were often paid using intermediary corporations and offshore accounts that Gonzalez and others held in Switzerland, among other places.
Previously, three former employees of the Broker-Dealer – Ernesto Lujan, Jose Alejandro Hurtado, and Tomas Alberto Clarke Bethancourt – each pleaded guilty in New York federal court to conspiring to violate the Foreign Corrupt Practices Act (FCPA), to violate the Travel Act and to commit money laundering, as well as substantive counts of these offenses, relating, among other things, to the scheme involving bribe payments to Gonzalez. Sentencing for Lujan and Clarke is scheduled for Feb. 11, 2014, before U.S. District Judge Paul G. Gardephe. Hurtado is scheduled for sentencing before U.S. District Judge Harold Baer Jr. on March 6, 2014.
This ongoing investigation is being conducted by the FBI, with assistance from the SEC and the Justice Department’s Office of International Affairs. Assistant Chief James Koukios and Trial Attorneys Maria Gonzalez Calvet and Aisling O’Shea of the Criminal Division’s Fraud Section and Assistant United States Attorneys Harry A. Chernoff and Jason H. Cowley of the Southern District of New York’s Securities and Commodities Fraud Task Force are in charge of the prosecution. Assistant United States Attorney Carolina Fornos is also responsible for the forfeiture aspects of the case.
Additional information about the Justice Department’s FCPA enforcement efforts can befound at www.justice.gov/criminal/fraud/fcpa
Former Puerto Rico Police Officers Sentenced for Roles in Scheme to Extort a State Defendant for $50,000Read the Press Release
Two former police officers with the Police of Puerto Rico were sentenced to serve 63 and 60 months in prison for attempting to extort a defendant and soliciting bribe payments of $50,000.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and U.S. Attorney Rosa Emilia Rodriguez of the District of Puerto Rico made the announcement.
Abimael Arroyo-Cruz, 30, of Rio Grande, Puerto Rico, was convicted by a jury on May 29, 2013, of conspiracy to commit federal programs bribery, bribery, conspiracy to commit extortion and attempted extortion. Josue Becerril-Ramos, 36, of Carolina, Puerto Rico, pleaded guilty to all four counts on May 17, 2013, midway through his trial. Arroyo was sentenced to serve 63 months in prison, and Becerril was sentenced to serve 60 months in prison.
Arroyo and Becerril arrested eight individuals for possessing unregistered firearms and marijuana on Aug. 2, 2012. The officers then solicited from one defendant a bribe payment of $50,000 to have his case dismissed. Beginning on Sep. 11, 2012, both officers spoke with the defendant multiple times over the telephone, discussing payment details and strategies for dismissing the defendant’s case.
Arroyo and Becerril collected approximately $35,000 of the $50,000 demanded from the defendant in two different payment installments. Unbeknownst to the officers, however, the individuals who dropped off the payments were cooperating with federal law enforcement.In exchange for the bribes, Arroyo and Becerril devised a plan whereby the officers would misidentify a co-defendant in court, leading to the dismissal of the defendant’s case. When asked under oath at the preliminary hearing to identify the defendant, Arroyo instead identified a co-defendant. Arroyo confirmed to the defendant following the hearing that he deliberately misidentified the co-defendant as part of the plan to have the defendant’s case dismissed.
The case was investigated by the FBI’s San Juan field office. The case was prosecuted by Trial Attorneys Menaka Kalaskar and Marquest J. Meeks of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney Timothy Henwood of the District of Puerto Rico.
Department of Justice Announces Investigation of the St. Louis County Family CourtRead the Press Release
The Justice Department announced today that it has opened a pattern or practice investigation of the Family Court of St. Louis. The investigation will focus on whether the court provides constitutionally required due process to all children appearing for delinquency proceedings and whether the court’s administration of juvenile justice provides equal protection to all children regardless of race.
This investigation will include a comprehensive review of policies, procedures, court documents and statistical data. As part of this investigation, the department will reach out to juvenile justice stakeholders, including community members and groups with knowledge of the Family Court’s processes.
“Protecting the constitutional rights of all children appearing in court is critical to achieving our goals of improving juvenile courts, increasing the public’s confidence in the juvenile justice system and maintaining public safety,” said Acting Assistant Attorney General Jocelyn Samuels for the Civil Rights Division. “During the course of this investigation, we will consider all relevant information, particularly any efforts the court has undertaken to ensure compliance with the Constitution and federal law.”
The department will conduct the investigation using its authority under Section 14141 of the Violent Crime Control and Law Enforcement Act of 1994, which prohibits a pattern or practice of deprivation of civil rights for juveniles in the administration of juvenile justice, and Title VI of the Civil Rights Act of 1964, which prohibits discrimination on the basis of race, color or national origin by recipients of federal financial assistance. The department has conducted similar investigations in other jurisdictions, and most recently obtained important reforms in its investigation of the Juvenile Court of Memphis and Shelby County, Tennessee.
The Special Litigation Section of the Civil Rights Division is conducting this investigation. Individuals with relevant information are encouraged to contact the department via email at [email protected] or by phone at 855-228-2151.
Additional information about the Civil Rights Division is available on its website at www.justice.gov/crt .
2013 CNMI Women’s SummitRead the Press Release
United States Attorney ALICIA A.G. LIMTIACO, U.S. Attorney for the Districts of Guam and the Northern Mariana Islands, was invited to speak at the Commonwealth of the Northern Mariana Islands (CNMI) Women’s Summit held in Susupe, Saipan, on August 1-2, 2013. The CNMI Women’s Summit was sponsored by the CNMI Women’s Association.
U.S. Attorney Limtiaco provided an overview of “Human Trafficking”, including how to identify victims, and ways in which the community can assist and provide for the needs of victims. U.S. Attorney Limtiaco also discussed issues relating to “Drug Abuse”, including public awareness and prevention efforts addressing drug abuse among youth and the elderly, such as the Red Ribbon Campaign and National Prescription Drug Take Back initiative.
Approximately one hundred participants attended the CNMI Women’s Summit which also included workshops on various topics, such as Leadership and Women; Education & Training; Effective Communication; Women in the Labor Force; Business Opportunities; Writing Business Plans; and Language & Culture.
U.S. Attorney Limtiaco was also invited and conducted outreach on human trafficking issues in an interview by Glenn Manglona, host of the Marianas Agupa Chamorro Radio talk show.
Attached are photos taken at the CNMI Women’s Summit.
Two Florida Men Convicted in Philadelphia of Conspiring and Trafficking in Protected ReptilesRead the Press Release
A federal jury today found Robroy MacInnes, 54, of Inverness, Fla., and Robert Keszey, 47, of Bushnell, Fla., guilty of conspiracy to traffic in state and federally protected reptiles. MacInnes also was convicted of trafficking in protected timber rattlesnakes in violation of the Lacey Act.
Between 2007 and 2008, the defendants, who own the reptile wholesaler Glades Herp Farm Inc., collected protected snakes from the wild in Pennsylvania and New Jersey, purchased protected eastern timber rattlesnakes that had been illegally collected from the wild in violation of New York law, and transported federally threatened eastern indigo snakes from Florida to Pennsylvania. MacInnes also violated the Lacey Act by purchasing illegal eastern timber rattlesnakes and having the snakes transported from Pennsylvania to Florida. The evidence at trial showed that the protected species were destined for sale at reptile shows in Europe, where a single timber rattlesnake can sell for up to $800. Snakes that were not sold in Europe were sold through the defendants’ business in the United States.
“These defendants broke numerous wildlife laws seeking to profit from an illegal trade in threatened species,” said Robert G. Dreher, Acting Assistant Attorney General for the Environment and Natural Resources Division. “The Justice Department is committed to enforcing wildlife laws like the Endangered Species Act and the Lacey Act that protect our environment and these threatened species from a destructive and dangerous black market trade.”
The eastern timber rattlesnake is a species of venomous pit viper native to the eastern United States, and is listed as threatened in New York. It is also illegal to possess an eastern timber rattlesnake without a permit in Pennsylvania. The eastern indigo snake, the longest native North American snake species, is listed as threatened by both Florida and federal law.
The Lacey Act, one of the oldest statutes in the United States, prohibits interstate trafficking in wildlife known to be illegally obtained. The maximum penalty for conspiring to commit offenses and for violations of the Lacey Act is up to five years in prison and a $250,000 fine for each violation.
This case was investigated by the U.S. Fish and Wildlife Service, Office of Law Enforcement, with assistance from the New York Department of Environmental Conservation. The case was prosecuted by Trial Attorney Patrick M. Duggan and paralegal Ashleigh Nye of the Environmental Crimes Section of the Justice Department’s Environment and Natural Resources Division and Assistant U.S. Attorney Mary Kay Costello of the U.S. Attorney’s Office for the Eastern District of Pennsylvania.
Pittsburgh Repeat Offender Sentenced to Prison for Tax ObstructionRead the Press Release
Michael Carlow, a resident of Pittsburgh, Pa., was sentenced today to serve 35 months in prison for corruptly endeavoring to obstruct the Internal Revenue Service (IRS), the Justice Department and IRS announced. The sentence was imposed by U.S. District Judge David Cercone for the Western District of Pennsylvania.
Carlow pleaded guilty to tax obstruction on Jan. 4, 2013. In an earlier case, Carlow pleaded guilty in 1996 to bank fraud and tax fraud in federal court and was sentenced to eight years in prison. After his release in 2002, Carlow resided with his girlfriend, Elizabeth Jones, in Pittsburgh.
According to documents filed in the case, the IRS assessed more than $6 million in overdue taxes, interest and penalties against Carlow for the years 1992 through 1996. However, from 2000 through 2011, in order to thwart efforts by the IRS to collect what he owed, Carlow concealed his assets and income through Jones and numerous nominee corporations. According to documents filed in the case, Carlow maintained a secret interest in various corporations and had fees and royalties paid to Jones rather than to himself. He also failed to report his ownership and control of corporate assets to the U.S. Probation Office and the IRS. Carlow filed false U.S. individual income tax returns for 2003-2006 and failed to file U.S. individual income tax returns from 2008 through 2011. In August 2011, Jones pleaded guilty to her conduct related to acting as a nominee for Carlow. Sentencing for Jones is scheduled for Dec. 18, 2013.
Kathryn Keneally, Assistant Attorney General for the department’s Tax Division, commended the investigative efforts of IRS - Criminal Investigation Special Agents, who investigated the case, and Tax Division Trial Attorneys Kenneth Vert and Jeffrey McLellan, who are prosecuting the case.
Northern California Couple Indicted for Filing False Claims for Refunds and for Filing Liens Against the IRS CommissionerRead the Press Release
Robert Eldon Robertson and his wife Esther Lynne Robertson of Manteca, Calif., were indicted on charges of filing two false claims for federal tax refunds, filing liens against the former Internal Revenue Service (IRS) commissioner and impeding the administration of federal tax laws, the Justice Department and IRS announced today. The indictment was unsealed yesterday in the Eastern District of California.
According to the indictment, the Robertsons filed two false federal income tax returns claiming large refunds based on fictitious Form 1099-OID withholdings: one for tax year 2005 claiming a $90,538 refund and one for 2007 claiming a $313,248 refund. The indictment also charges each of the Robertsons with filing a false lien against the property of the IRS commissioner for “a sum certain amount determined as triple the stated amount of any purported determination of tax liability.” According to the indictment, the Robertsons also sent a bogus “international promissory note” with a request that the IRS apply the purported $800,000 face value of the note towards their outstanding tax liabilities. The IRS also received a letter containing credit card bills belonging to the Robertsons asking the IRS to pay nearly $20,000 worth of their credit card debt.
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 Robertsons face a maximum of five years in prison for each false claim count, three years for the obstruction count and 10 years for the count of filing false liens.
The case was investigated by both IRS-Criminal Investigation and the Treasury Inspector General for Tax Administration. It is being prosecuted by Trial Attorney Ignacio Perez de la Cruz of the department’s Tax Division and Assistant U.S. Attorney Matthew Segal in the Eastern District of California.