District Not Recorded
The source did not name an office we could identify. These records remain unassigned rather than guessed.
Justice Department and San Francisco Restaurant Settle Immigration-Related Discrimination ClaimRead the Press Release
The Justice Department today reached an agreement with Kim Hoang Coffee and Fast Food, a restaurant in San Francisco, resolving claims that the company violated the anti-discrimination provision of the Immigration and Nationality Act (INA).
In a charge filed with the department, a work-authorized immigrant alleged, and the department found, that Kim Hoang Coffee and Fast Food improperly rejected valid work-authorization documents when re-verifying her authorization for employment, which caused the immigrant to believe she had been terminated. The investigation also revealed that the employer believed she could ask non-U.S. citizens to produce specific documents to establish work authorization upon initial hire, but did not need to make similar demands of U.S. citizens. The INA’s anti-discrimination provision prohibits employers from discriminating against non-U.S. citizens in the employment eligibility verification process by demanding different documentation than U.S. citizens are required to present.
In response to the department’s investigation, Kim Hoang Coffee and Fast Food offered to rehire the charging party and provide back pay for the charging party’s month of lost wages. Under the terms of the agreement, Kim Hoang Coffee and Fast Food must pay $485 in civil penalties to the United States, undergo department training on the anti-discrimination provision of the INA and be subject to monitoring of its employment eligibility verification practices for a period of three years. The employer also agreed to post the Office of Special Counsel for Immigration-Related Unfair Employment Practices’ (OSC) “Right to Work” poster, which highlights the anti-discrimination provision of the INA. The case settled prior to the department filing a complaint in this matter.
“Imposing different documentary requirements on individuals based on their citizenship status during the employment eligibility verification process is discrimination prohibited by the INA,” said Acting Assistant Attorney General for the Civil Rights Division Jocelyn Samuels. “The Department of Justice is committed to protecting U.S. citizens and all work-authorized immigrants from document abuse.”
The OSC is responsible for enforcing the anti-discrimination provision of the INA. For more information about protections against employment discrimination under the immigration laws, call the OSC’s worker hotline at 1-800-255-7688 (1-800-237-2525, TDD for hearing impaired), call the OSC’s employer hotline at 1-800-255-8155 (1-800-362-2735, TDD for hearing impaired), sign up for a no-cost webinar at www.justice.gov/crt/about/osc/webinars.php, email [email protected] or visit the website at www.justice.gov/crt/about/osc .
Former Miami Mortgage Broker and Real Estate Agent Sentenced for Role in Multimillion-Dollar Mortgage Fraud SchemeRead the Press Release
A former Florida-licensed real estate associate and mortgage broker was sentenced to serve 135 months in prison for his role in a $2.4 million mortgage fraud scheme.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division made the announcement.
Jose Armando Alvarado, 64, of Miami, was found guilty on Sept. 9, 2013, of eight counts of wire fraud and six counts of bank fraud and was sentenced on Nov. 14, 2013, by U.S. District Judge William J. Zloch of the Southern District of Florida. In addition to his prison term, Alvarado was ordered to serve three years of supervised release.
Two of Alvarado’s co-conspirators previously convicted at the same trial of various counts of wire and bank fraud were also sentenced on Nov. 14, 2013. Alberto Morejon, 27, of Miami, a former loan closer and title agent, was sentenced to serve 36 months in prison. Alvarado’s sister, Reyna Orts, 58, of Miami, a former mortgage broker and the mother of Morejon, was sentenced to serve 50 months in prison.
According to court documents and evidence presented at trial, Alvarado, along with his co-conspirators, operated a mortgage fraud scheme by controlling and operating three real estate entities in the Miami area: South Florida Realty; American Mortgage Lending, a mortgage broker; and Royal Atlantic Title, a title insurance agency. From February 2004 through November 2009, Alvarado and his co-conspirators used their control over these three companies to falsify and misrepresent important facts provided to financial institutions in order to fraudulently secure loans totaling more than $2.4 million. The loans were often obtained through submitting falsified supporting documentation, such as false tax returns, W2 forms, bank statements and employment verifications.
Evidence at trial showed that Alvarado and his co-conspirators subsequently enriched themselves by diverting loan proceeds, collecting brokerage fees and inflating real-estate commissions generated by the sales of the properties. Alvarado and his co-conspirators obtained control of multiple properties during the real estate market boom with the intent to flip and sell them for a profit or control them as rental properties. The defendants used their knowledge and experience in the real estate industry to conceal the scheme by executing quit-claim deeds and failing to record, and falsely recording, mortgage deeds and other documentation with the State of Florida.
The case was investigated by the FBI’s Miami Field Office and the Miami-Dade Police Department. The case was prosecuted by Trial Attorney Nathan Dimock of the Criminal Division’s Fraud Section.
Visa Fraud Scheme Results in Federal Criminal ChargesRead the Press Release
SAIPAN — Alicia A.G. Limtiaco, United States Attorney for the District of Guam and the Northern Marina Island, announced the filing on October 22, 2013, of federal criminal charges against MARIANO K. PANGELINAN, ROSABELLA P. CRUZ, and HELEN N. APARENTE, stemming from their involvement with a corporation called ARCH INTERNATIONAL (hereinafter called ARCH).
The federal criminal indictment is attached. It alleges that the three individuals held ARCH out as a recruiting agency that could help aliens obtain jobs and employment-based CW-1 permits for certain fees, but, after taking various fees from the aliens, did not find them jobs but instead submitted CW-1 petitions to federal immigration authorities in which they falsely stated that ARCH itself employed the aliens.
The indictment charges Conspiracy to Commit Visa Fraud and to Defraud the United States, in violation of Title 18, United States Code, § 371; Visa Fraud, in violation of Title 18, United States Code, § 1546(a); and False Statement, in violation of Title 18, United States Code, § 1001(a)(2). The Conspiracy and False Statement charges carry maximum potential sentences of five years in federal prison and a $250,000 fine. The Visa Fraud charges carry a maximum potential sentence of ten years in federal prison and a $250,000 fine.Defendants PANGELINAN and CRUZ made their initial appearances before U.S. Magistrate Judge Heather L. Kennedy on October 25, 2013, and were arraigned before U.S. District Court Judge Ramona V. Manglona on November 4, 2013. Trial is scheduled for December 30, 2013, at 10:00 AM. Defendant APARENTE is still at large.
The charges are merely accusations and the defendants are presumed innocent until and unless proven guilty. The investigation was conducted by Homeland Security Investigations. The case is being prosecuted by Assistant United States Attorney Ross K. Naughton.
Indictment
Sex Offender David James Hart Sentenced in U.S. District CourtRead the Press Release
ALICIA A.G. LIMTIACO, United States Attorney for the Districts of Guam and the Northern Mariana Islands, announced that DAVID JAMES HART, was sentenced November 5, 2013, in the District Court of Guam to 21months incarceration, and five years of supervised release.
Defendant HART pled guilty on December 19, 2012, to one count of Failure to Register as Sex Offender, in violation of Title 18 U.S.C. Section 2250(a). Defendant HART traveled to Guam from Pennsylvania. Upon his arrival on Guam, defendant HART failed to maintain information with the Guam Sex Offender Registry.
U.S. Attorney Limtiaco states “The purpose of the Guam Sex Offender Registry is to provide important notice to island residents that sex offenders are living, working and attending schools in our community. The Sex Offender Registry is a nationwide network that exists to increase public safety and community awareness. Defendants who have committed sexually violent offenses, criminal sex conduct offenses, or criminal offenses involving minor victims must all register and maintain their registrations with the Guam Sex Offender Registry. Defendants who refuse to register or update their information will face federal punishment. The United States Attorney’s Office is committed to the aggressive prosecution of non-compliant sex offenders.” Guam’s Sex Offender Registry can be found online at www.guamcourts.org.”
U.S. Attorney Limtiaco noted that this prosecution is part of the U.S. Department of Justice’s Project Safe Childhood (PSC) Initiative, a nationwide commitment to aggressively prosecute defendants who engage in the sexual victimization of children and adults, possess or receive child pornography, and sex offenders who fail to register with the jurisdiction’s Sex Offender Registry.
The investigation was conducted by the United States Marshals Service. The case was handled by Assistant U.S. Attorney R. San Nicolas.
Ohio-Based Basco Manufacturing Co. to Pay <br /> $1.1 Million for Allegedly Falsifying Customs Documents<br /> to Evade Import Duties on Chinese ProductsRead the Press Release
The Department of Justice announced today that Ohio-based Basco Manufacturing Co. (Basco) has agreed to pay $1.1 million to resolve allegations that it violated the False Claims Act by making false customs declarations to avoid paying duties on products imported from a Chinese manufacturer, and that it has filed a complaint against four other companies and two individuals based on similar allegations. The defendants named in the lawsuit are California-based C.R. Laurence Co.; Florida-based Southeastern Aluminum Products Inc.; Texas-based Waterfall Group LLC; New York-based Northeastern Aluminum Corp.; Northeastern’s owner, William Ma; and Robert Wingfield, the U.S. representative of Chinese exporter Tai Shan Golden Gain Aluminum Products Ltd. (Tai Shan).
“Companies that import products made abroad must comply with the law, including paying the import duties that protect domestic manufacturers and producers from unfair competition,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery. “The Department of Justice is committed to enforcing the law against those who fail to pay the government money it is owed, just as it will enforce the law against those who falsely claim government funds.”
The government’s settlement and complaint involve allegations that Basco and the companies named in the lawsuit made false declarations to the U.S. Department of Homeland Security Customs and Border Protection to avoid paying antidumping and countervailing duties on aluminum extrusions imported from manufacturer Tai Shan in the People’s Republic of China (PRC). Allegedly, these companies misrepresented that the aluminum extrusions, which are used in the manufacture of shower enclosures and other products, were imported from Malaysia.
The Department of Commerce assesses, and Customs and Border Protection collects, antidumping and countervailing duties to protect U.S. businesses and level the playing field for domestic products. Antidumping duties protect against foreign companies “dumping” products on U.S. markets at prices below cost, while countervailing duties offset foreign government subsidies. Imports of PRC-made aluminum extrusions have been subject to antidumping and countervailing duties since 2010. No such duties are due on imports of such items made in Malaysia.
“Circumvention of our country’s import laws causes substantive harm to U.S. businesses and our economy,” said Acting U.S. Attorney for the Middle District of Florida A. Lee Bentley III. “These laws must be strictly enforced so that our companies can remain competitive in markets throughout the world.”
Basco and the defendants named in the government’s lawsuit allegedly engaged in a scheme to avoid duties by shipping the aluminum extrusions manufactured by Tai Shan in the PRC through Malaysia – a practice called transshipping. The U.S. government alleges that Basco and the defendants knew that the aluminum extrusions were merely repackaged in Malaysia and did not undergo a substantial transformation that may have justified changing the product’s country of origin from the PRC to Malaysia.
“Antidumping and countervailing duties enforcement is a priority for Customs and Border Protection due to the significant role that it plays in the economic security of the United States,” said Director of Field Operations for Customs and Border Protection Vernon Foret. “Customs and Border Protection is responsible for facilitating the legitimate flow of trade, while enforcing the laws against the evasion of duties intended to protect against unfair trade practices.”
The allegations against Basco and asserted in the government’s complaint were brought by whistleblower James F. Valenti Jr. in the U.S. District Court for the Middle District of Florida under the qui tam, or whistleblower, provisions of the False Claims Act. The Act permits private parties to sue companies and individuals on behalf of the government who have falsely claimed federal funds or, as in this case, made false statements to avoid paying funds owed to the government. The Act also allows the government to intervene in and take over a lawsuit, as it has done in this case, and entitles the whistleblower to receive a share of any funds recovered through the lawsuit. Valenti’s share of the Basco settlement has not yet been determined.
The investigation was handled by the Department of Justice Civil Division, Commercial Litigation Branch; the U.S. Attorney’s Office for the Middle District of Florida; the Department of Homeland Security U.S. Customs and Border Protection and Immigration and Customs Enforcement; and the Department of Commerce International Trade Administration.
The lawsuit is captioned United States ex rel. Valenti v. Tai Shan Golden Gain Aluminum Products Ltd., et al., Case No. 11-cv-368 (M.D. Fla.). The government’s claims against Basco, and against the defendants named in the government’s complaint, are allegations only; there has been no determination of liability.
Justice Department Announces More Than $62 Million <br /> to Strengthen Reentry, Probation and Parole ProgramsRead the Press Release
The Justice Department has awarded more than $62 million in grants to strengthen efforts to help people returning from prison rejoin their communities and become productive, law-abiding citizens. This grant announcement was made by Attorney General Eric Holder today while in St. Louis, where he visited Project EARN, a Drug Reentry Court program. Attorney General Holder delivered remarks to the program’s graduates and emphasized that successful reentry is a top priority at the Justice Department and a central part of his new “Smart on Crime” initiative.
“Over the course of my career, I’ve seen just how important – and powerful – reentry programs can be,” said Attorney General Eric Holder. “I learned how this cycle weakens communities, tears families apart and destroys individual lives. If more communities adopt reentry programs like the one I witnessed today in St. Louis, it will reduce criminal justice spending, ensure the fairest possible outcomes, and forge the stronger, safer communities that all of our citizens deserve.”
Later today, Attorney General Holder will travel to Peoria, Ill., to attend a pre-court meeting with judges and pretrial service officers. He will also deliver remarks at an alternative to detention court hearing.
The Office of Justice Programs (OJP) made these 112 competitive and supplemental Second Chance Act (SCA) awards to state, tribal and local governments, and non-profit organizations to reduce recidivism, provide reentry services, conduct research and evaluate the impact of reentry programs. The SCA programs, administered through the Bureau of Justice Assistance (BJA) and the Office of Juvenile Justice and Delinquency Prevention (OJJDP), are designed to help communities develop and implement comprehensive strategies to reduce recidivism and address the challenges faced by incarcerated adults and youth when they return to their communities following release from confinement.
“Effective reentry services are critical to helping formerly incarcerated individuals remain crime-free and become productive, law-abiding citizens,” said Assistant Attorney General of the Office of Justice Programs Karol V. Mason. “The awards continue this Administration’s commitment to achieving sustainable reductions in recidivism and improving the safety of our communities.”
“We must continue to draw on the science of recidivism reduction and what works to ensure that the right people get the right integrated interventions at the right times,” said BJA Director Denise E. O’Donnell.
Of the over $62 million in funding provided, more than $57 million (91 BJA awards and 19 OJJDP awards) supports smart probation projects, treatment of returning adult and juveniles with co-occurring substance abuse and mental health disorders; adult and juvenile reentry demonstration projects; adult mentoring programs; technology career training projects for incarcerated adults and juveniles; and demonstration field experiments to test a parole reentry model. The remaining $5.4 million supports two awards for evaluation activities and training and technical assistance for Second Chance Act grantees and the reentry field in general.
OJJDP awarded more than $9.7 million in Second Chance Act Juvenile Reentry Program grant awards to reduce recidivism and assist youth in successfully returning to their communities after secure confinement. This includes $176,000 to assist four jurisdictions in planning a juvenile reentry program, and $6,573,177 for ten jurisdictions to implement evidence-based reentry programs that provide a comprehensive range of services for juveniles up to 18 years of age. This also includes $2,977,252 for five community programs to reduce long-term alcohol and other substance abuse among youth in secure confinement facilities and to increase drug treatment and mental health services for these youth.
“Too many young people caught up in the juvenile justice system fail to return to school, find a job, or live healthy, drug-free lives after being confined,” said OJJDP Administrator Robert L. Listenbee. “These grants will help them find a path out of crime and delinquency and begin to make positive contributions to their communities.”
OJP will also continue to provide reentry resources to the field through the National Reentry Resource Center (NRRC), through a cooperative agreement with the Council of State Governments (CSG) Justice Center, administered by BJA. The NRRC offers training and technical assistance for SCA grantees, provides distance learning and other reentry resources to the field, and administers the “What Works in Reentry Clearinghouse.” NRRC collaborates with other federal agencies focused on reentry activities and with the Attorney General’s Federal Interagency Reentry Council and its staff working group.
For a list of all OJP grant awards, please visit: www.ojp.gov/funding/funding.htm.
For more information on the NRRC, please visit: www.nationalreentryresourcecenter.org.
For more information on the Federal Reentry Council, please visit: csgjusticecenter.org/nrrc/projects/firc/.
The Office of Justice Programs, headed by Assistant Attorney General Karol V. Mason, provides federal leadership in developing the nation’s capacity to prevent and control crime, administer justice, and assist victims. OJP has six components: the Bureau of Justice Assistance; the Bureau of Justice Statistics; the National Institute of Justice; the Office of Juvenile Justice and Delinquency Prevention; the Office for Victims of Crime; and the Office of Sex Offender Sentencing, Monitoring, Apprehending, Registering, and Tracking.
Department of Defense Employee Pleads Guilty to<br /> Submitting False Claim for Housing AllowanceRead the Press Release
A Department of Defense (DOD) employee has pleaded guilty to filing a false claim with the DOD while stationed in the Republic of Korea (ROK) to fraudulently obtain $64,000 in housing allowance, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and U.S. Attorney Daniel G. Bogden of the District of Nevada.
Patrick Y. Kim, 56, of Reno, Nev., pleaded guilty today before U.S. District Judge Howard D. McKibben in the District of Nevada in Reno to one count of making a false claim. Kim faces a maximum penalty of five years in prison when he is sentenced on Feb. 12, 2014. As part of his plea agreement, Kim has agreed to pay full restitution to the DOD in the amount of $64,000.
The former chief of the Furniture Branch at the United States Army Garrison in Daegu, ROK, Kim admitted that he submitted a fraudulent lease to the housing office to obtain a living quarters allowance (LQA) that he was not entitled to receive. Kim began working at Daegu Garrison in or about October 2002, and, as a DOD civilian employee working in the ROK, he was entitled to receive certain housing allowances, including LQA under certain circumstances. To receive LQA, Kim was required to submit a copy of a housing lease in support of his application and acknowledge that the LQA payments were exclusively for the payment of rent and not for the payment of refundable security deposits or “key money” leases. Key money leases – sums of money paid to a lessor in lieu of rent, which are returned to the lessee at the end of the lease – are common in the ROK; however, they are prohibited by State Department regulations.
Kim admitted that in September 2008, he was looking for a new apartment as the lease for his current apartment was about to expire. He and his wife located a residence at an apartment complex; however, the owners of the apartments did not offer traditional rental leases – only key money leases and purchases. On or about Sept. 8, 2008, Kim’s wife entered into a key money lease for one of the apartments. Kim admitted that he knew that State Department regulations prohibited him from receiving LQA to pay for the key money lease signed by his wife. On or about Sept. 9, 2008, Kim created a fake rental lease for the subject property and submitted it to the housing office at Daegu Garrison in support of his request for LQA. The fake lease for the apartment purported to be a two-year lease with a total cost of $64,000. Kim admitted receiving $64,000 in LQA, which is non-taxable, and also admitted that he used the money to pay for a portion of the key money lease entered into by his wife.
Kim also admitted that he created a fake receipt for the purported $64,000 rental payment and submitted it to the housing office at Daegu Garrison to justify his receipt of the LQA. He received the $64,000 back at the end of the key money lease in 2010, and he used it for the purchase of a new residence in the ROK.
The case is being investigated by the U.S. Army Criminal Investigation Division and the FBI. The case is being prosecuted by Trial Attorney Richard B. Evans of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney Sue P. Fahami of the District of Nevada.
Attorney General Eric Holder Calls on Congress to Pass Bipartisan Second Chance ActRead the Press Release
WASHINGTON – Attorney General Eric Holder today endorsed the reauthorization of the Second Chance Act, bipartisan legislation introduced by Senators Patrick Leahy and Rob Portman and its companion legislation by Representatives Danny Davis and F. James Sensenbrenner, Jr. that provides resources and support to people reintegrating into their communities after being incarcerated. The Attorney General’s endorsement came while visiting a graduation ceremony for participants of Project EARN, a federal reentry court in St. Louis. The visit highlighted the department’s “Smart on Crime” initiative that seeks to reform the criminal justice system, improve reentry programs, and pursue alternatives to incarceration for low-level, non-violent offenses.
During Fiscal Year 2013 under the Second Chance Act, the Justice Department’s Bureau of Justice Assistance and the Office of Juvenile Justice funded over 100 grants, totaling more than $62 million, to support improved probation, parole, and reentry programs throughout America. The grants include mental health and substance abuse treatment initiatives, technology career training programs, juvenile reentry efforts, and smart probation projects. If Congress fails to reauthorize the Second Chance Act, countless neighborhoods will no longer have the critical support that has helped make profound and positive differences.
Please see below for the Attorney General’s prepared remarks in St. Louis.
REMARKS AS PREPARED FOR DELIVERY BY ATTORNEY GENERAL ERIC HOLDER AT PROJECT EARN GRADUATION CEREMONY
Thank you, Your Honor – and good morning, everyone. It is a pleasure to be here in St. Louis, and a privilege to stand with each of the participants – and, especially, the graduates – of this remarkable program.
I appreciate the opportunity to share this moment with you. And I am honored to join all of the proud family members and friends who are with us today in celebrating your achievements, reflecting on the progress you’ve made, and reaffirming your individual commitments to yourselves, your communities – and your futures.
First, to our graduates: I know the journey that has led you to this moment has not been easy. I know you’ve had to work hard and overcome tremendous adversity.
At times, it’s been an uphill battle. But the fact that you stand before this Court as Project EARN graduates is not only inspiring – it is proof of the strength, and the sheer determination, that defines you. And it’s emblematic of the courage that defines everyone who has the resolve to enter treatment and keep moving down the long and difficult – but ultimately rewarding – road to recovery.
For our graduates – and for those who aspire to join them – I know this program has presented both an opportunity and a challenge. It has required you to be honest with yourselves, and with your families and friends. It has demanded that you confront your weaknesses and acknowledge past mistakes. And it has given you the chance not only to reclaim your future, but to build a new one.
We can all be proud of the positive strides that our four distinguished graduates have made in this regard.
After a great deal of hard work, Kenneth Johnson is expected to earn his degree in HVAC next month. And he’s already giving back to those around him by helping others stay on the right path and maintain a sober lifestyle.
Roger Jenkins is a full-time college student who’s only three credits away from earning his degree. He’s keeping busy – running his own carpet cleaning business, which I’m glad to hear is thriving, and placing a renewed focus on his wonderful family.
Donald Westrich has turned his back on decades of drug use. He’s been sober for more than a year. And, in addition to maintaining full-time employment, he’s become active in his community through a local church.
Last but not least, Michael Stephens has undergone a remarkable transformation. After a difficult start in this program, he has been free of cocaine use for more than a year. He’s served as a source of inspiration to many of those around him. And I’m told that he always has a smile on his face.
Each of these graduates is here as a result of months of hard work, dedication, and willpower. Today, they stand among the ranks of well over a million people who have graduated from drug courts like this one across the country.
I hope those of you who are still making your way through this program will be encouraged by what they’ve accomplished.
As you keep moving forward, I want you to know that you have my support, and the support of my colleagues at every level of the Department of Justice – as well as President Obama and others throughout the Administration.
All of us are committed to the same goals that have driven leading criminal justice professionals to come together – here in St. Louis – to create this innovative program. And we’re determined to keep building on the successes you’re making possible – not only in this community, but across the country.
In fact, I am pleased to announce today that, during Fiscal Year 2013, the Justice Department funded over 100 grants totaling more than $62 million under the landmark Second Chance Act. These important funds support improved probation, parole, and reentry programs throughout America. And they have the potential to make a real difference in countless neighborhoods.
That’s why it’s imperative that we keep up the good work. I want to take this opportunity to call on Congress to pass legislation, introduced yesterday by U.S. Senators [Patrick] Leahy and [Rob] Portman, which would reauthorize and strengthen the Second Chance Act. This law enjoys broad, bipartisan support. And its timely reauthorization would enable us to institutionalize our commitments to programs like this one – and continue providing the resources necessary to make good on our nation’s promise of equality, opportunity, and justice under law.
We must support these programs because we recognize that – as our graduates here have shown – better treatment, and expanded access to the resources you need, can result in better outcomes and brighter futures for many who come into contact with the criminal justice system.
This is something I’ve seen firsthand. During my time as a judge on the Superior Court in Washington, D.C. – and later as United States Attorney for the District of Columbia – I learned how drug abuse, crime, and incarceration can trap people in a destructive cycle. A cycle that weakens communities, tears families apart, and destroys individual lives.
Day after day, I watched lines of young people – most often young men of color – stream through my courtroom. Too many of the faces I saw became familiar – because too many of the people I sentenced served their time, were released from prison, and sooner or later returned to the same behavior that had led them to my courtroom in the first place.
That’s one reason why I’m passionate about programs like this one – programs that can help strong, committed individuals like you to break that cycle and gain the tools you need to reenter your communities and lead productive and fulfilling lives.
But I’m also here today because I understand that our country has a broader obligation to stand with you, and to support you – because we’re not fundamentally different.
I grew up in a neighborhood – in Queens – where people like you would have been my friends. We would have gone to school, and partied, and played basketball together.
So I can’t help but feel mindful of the fact that, although I’m here in my capacity as Attorney General of the United States, a few of the people I grew up with – good people, like you –ended up taking very different paths. Some of them didn’t catch the same breaks. Some had to deal with drug issues. And some became involved with the criminal justice system – because of bad luck, or bad choices, or both.
I’ve seen how tough it can be for people in your shoes to turn your lives around, to deal with unfairness, and to overcome adversity. I know that everyone makes mistakes – everyone. Including me. And that’s why I wanted to be here today: to tell you in person how proud I am that each of you has decided not to let your mistakes define you – and not to make excuses – but to make the most of the opportunities that you’ve been given.
You’re here today because you’re smart. You have the skills and the determination not just to make positive contributions, but to become role models for those around you – especially the young people who will learn from your examples.
Never forget that you have a responsibility to these kids – to talk to them, to serve as mentors, to help them learn from your mistakes, and to ensure that their lives aren’t interrupted or cut short.
For those of you who are graduating today – Kenneth, Roger, Donald, and Michael – I congratulate you on this extraordinary achievement. For those who are just starting Project EARN, or who are well on your way – I am proud of every one of you.
I am confident in your ability to keep moving forward, to become leaders and role models in your neighborhoods, and to make the difference that our fellow citizens – and especially our young people – need and deserve.
Congratulations, once again – and keep up the great work. I expect to hear great things about all that you’ll do and achieve from this moment forward.
For more information about the department’s “Smart on Crime” initiative, please visit http://www.justice.gov/ag/smart-on-crime.pdf.
Alabama Man Sentenced to Federal Prison for Role in Identity Theft and Tax Refund SchemeRead the Press Release
Kevin Jackson of Montgomery, Ala., was sentenced to serve 102 months in federal prison and three years of supervised release, along with an order to pay $150,840.49 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 for the Middle District of Alabama George L. Beck Jr. Jackson had previously pled guilty to access device fraud and to aggravated identity theft.
According to court documents, Jackson possessed a storage locker in which law enforcement authorities found a computer, three cellular telephones, at least 500 names and Social Security numbers of identity theft victims and at least 70 prepaid debit cards, all tied to a scheme to obtain fraudulent federal tax refunds by causing federal tax returns to be filed in the names of stolen identities.
The case was investigated by special agents of the Internal Revenue Service - Criminal Investigation and the U.S. Secret Service, along with assistance from the Montgomery Police Department. Trial Attorneys Justin Gelfand and Jason Poole of the department’s Tax Division prosecuted the case.
Additional information about the Tax Division and its enforcement efforts may be found at www.justice.gov/tax .
Justice Department Officials Raise Awareness of Disaster Fraud Hotline Following Typhoon HaiyanRead the Press Release
The Department of Justice, the FBI, and the National Center for Disaster Fraud (NCDF) remind the public that there is a potential for disaster fraud in the aftermath of a natural disaster. Suspected fraudulent activity pertaining to relief efforts associated with Typhoon Haiyan should be reported to the toll-free NCDF hotline at 866-720-5721. The hotline is staffed by a live operator 24 hours a day, seven days a week, for the purpose of reporting suspected scams being perpetrated by criminals in the aftermath of disasters.
NCDF was originally established in 2005 by the Department of Justice to investigate, prosecute and deter fraud associated with federal disaster relief programs following Hurricanes Katrina, Rita and Wilma. Its mission has expanded to include suspected fraud related to any natural or man-made disaster. More than 20 federal agencies – including the Justice Department’s Criminal Division, U.S. Attorney’s Offices, Department of Homeland Security Office of Inspector General, FBI, U.S. Postal Inspection Service and the U.S. Secret Service – participate in the NCDF, allowing the center to act as a centralized clearinghouse of information related to disaster relief fraud.
In the wake of natural disasters, many individuals feel moved to contribute to victim assistance programs and organizations across the country. The Department of Justice and the FBI remind the public to apply a critical eye and conduct due diligence before giving to anyone soliciting donations on behalf of hurricane victims. Solicitations can originate as emails, websites, door-to-door collections, mailings, telephone calls and similar methods.
Before making a donation of any kind, consumers should adhere to certain guidelines, including the following:
• Do not respond to any unsolicited (spam) incoming emails, including by clicking links contained within those messages, because they may contain computer viruses.
• Be cautious of individuals representing themselves as victims or officials asking for donations via email or social networking sites.
• Beware of organizations with copycat names similar to but not exactly the same as those of reputable charities.
• Rather than following a purported link to a website, verify the existence and legitimacy of non-profit organizations by using Internet-based resources.
• Be cautious of emails that claim to show pictures of the disaster areas in attached files, because those files may contain viruses. Only open attachments from known senders.
• To ensure that contributions are received and used for intended purposes, make donations directly to known organizations rather than relying on others to make the donation on your behalf.
• Do not be pressured into making contributions; reputable charities do not use coercive tactics.
• Do not give your personal or financial information to anyone who solicits contributions. Providing such information may compromise your identity and make you vulnerable to identity theft.
• Avoid cash donations if possible. Pay by debit or credit card, or write a check directly to the charity. Do not make checks payable to individuals.
• Legitimate charities do not normally solicit donations via money transfer services. • Most legitimate charities maintain websites ending in .org rather than .com.
If you believe that you have been a victim of fraud by a person or organization soliciting relief funds on behalf of disaster victims, contact the NCDF by phone at (866) 720-5721, fax at (225) 334-4707 or email at [email protected].You can also report suspicious e-mail solicitations or fraudulent websites to the FBI’s Internet Crime Complaint Center at www.ic3.gov.
Internet Pharmacy Website Affiliate Pleads Guilty to Filing False Tax ReturnRead the Press Release
Pamela B. Reid pleaded guilty last night to one count of filing a false individual income tax return for the 2006 tax year, the Justice Department and Internal Revenue Service (IRS) announced. Reid was charged in the District of Minnesota by an information filed on Sept. 27, 2013.
According to the plea agreement, Reid worked as a website affiliate for an internet pharmacy organization from 2006 through 2012. As a website affiliate, Reid maintained websites based on templates provided from the internet pharmacy organization. These websites allowed U.S. customers to purchase prescription drugs from their personal computer. Reid was paid a percentage of the profit on each prescription sold through one of her websites and received her compensation by international wire from non-U.S. bank accounts under the control of the internet pharmacy organization.
Reid pleaded guilty to filing a false individual income tax return that failed to report any business income for the year 2006. According to the plea agreement, Reid admitted that in 2006 she had unreported gross receipts of at least $306,081.88 and additional federal income tax due and owing of at least $100,908. As part of her guilty plea, Reid also admitted that she failed to report business income from her internet pharmacy organization affiliated websites on her individual income tax returns from 2007 through 2010. The total federal income tax Reid did not report or pay for 2006 through 2010 was $270,397.
“In today’s economic environment, it’s more important than ever that the American people feel confident that everyone is playing by the rules and paying the taxes they owe,” said Kelly R. Jackson, IRS - Criminal Investigation Special Agent in Charge of the St. Paul Field Office. “Those Americans who file accurate, honest and timely returns can be assured that the government will hold accountable those who don’t. The IRS Criminal Investigation Division, together with the Department of Justice, will investigate and prosecute those who violate our tax system.”
Reid faces a potential maximum penalty of three years in prison and a potential maximum fine of $250,000 or twice the gross gain of the offense. Reid has also agreed to pay restitution to the IRS in the amount of $376,438.87. Sentencing will be scheduled at a later date.
Kathryn Keneally, Assistant Attorney General for the Department’s Tax Division, thanked Special Agents of IRS – Criminal Investigation, who investigated the case, and Tax Division Trial Attorney Dennis R. Kihm, who prosecuted the case.
City of Shreveport Agrees to $342 Million Sewer System Upgrade to Comply with Clean Water ActRead the Press Release
The city of Shreveport, La., has agreed to make significant upgrades to reduce overflows from its sanitary sewer system and pay a $650,000 civil penalty to resolve Clean Water Act (CWA) violations stemming from illegal discharges of raw sewage, the Department of Justice and the U.S. Environmental Protection Agency (EPA) announced today. The state of Louisiana, a co-plaintiff in this case, will receive half of the civil penalty.
When wastewater systems overflow, they can release raw sewage and other pollutants, threatening water quality and potentially contributing to disease outbreaks. To come into compliance with the CWA, the city estimates it will spend approximately $342 million over the next 12 years in order to improve the sewer system’s condition. While the city upgrades the system, it will also implement a program for capacity management, operation, and maintenance to help reduce sanitary sewer overflows.
“The key provisions of this settlement will eliminate overflows of raw sewage in neighborhoods that have for too long been subject to these contaminated overflows,” said Acting Assistant Attorney General Robert G. Dreher. “These provisions are critical to protecting the public health of all citizens of Shreveport.”
“The United States Attorney’s Office is committed to assisting our federal partners and the state in protecting the environment and public health,” said U.S. Attorney Stephanie Finley. “Sewer overflows are a public health hazard. The citizens of Shreveport are the beneficiaries of this settlement, which will eliminate these overflows.”
“Keeping these discharges out of our waterways is a priority for the EPA and the state of Louisiana,” said EPA Regional Administrator Ron Curry. “The residents of Shreveport deserve clean water and reliable infrastructure, and this agreement will help achieve that.”
The Justice Department, on behalf of the EPA, filed a complaint against the city alleging that, since 2005, the city has had untreated sewage overflows from its sanitary sewer system in violation of the CWA and state-issued discharge permits. The cause of these illegal overflows stems largely from the city’s failure to properly operate and maintain the condition of the sewer system, resulting in discharges of untreated sewage into local waterways and the community.
Shreveport’s wastewater collection and treatment system, including the Lucas and North Regional waste water treatment plants, serves approximately 220,000 people in an environmental justice area.
Keeping raw sewage out of the community and the waters of the United States is a national priority for EPA, as sewage overflows can present a significant threat to human health and the environment. These discharges can degrade water quality, spread bacteria and viruses, and cause diseases ranging from gastroenteritis to life-threatening conditions such as cholera and dysentery.
The settlement, which will be lodged in the U.S. District Court for the Western District of Louisiana, is subject to a 30-day public comment period before the court can give final approval and enter the consent decree as final judgment, at which time it will become effective. 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/city-shreveport-settlement
More information about EPA’s national enforcement initiative: www.epa.gov/compliance/data/planning/initiatives/2011sewagestormwater.html
More information about Integrated Municipal Stormwater and Wastewater Plans: cfpub.epa.gov/npdes/integratedplans.cfm
Attorney General Eric Holder Announces First Public Hearing of Task Force to Examine Impact of Violence on American Indian and Alaska Native ChildrenRead the Press Release
Attorney General Eric Holder today announced the first public hearing of a new task force to examine the impact of exposure to violence on American Indian and Alaska Native children. Joining President Obama and other officials at the Department of the Interior for the White House Tribal Nations Conference, Attorney General Holder shared the announcement with leaders from the 566 federally recognized tribes and emphasized the Justice Department’s long-standing collaboration with leaders in American Indian and Alaska Native communities to improve public safety.
“We must not accept the shameful reality that American Indians and Alaska Natives are disproportionately likely to be exposed to crime and violence – and that many who suffer exposure are children,” said Attorney General Holder. “By bringing together federal officials, tribal leaders, and local partners to focus on the unique challenges that Indian children face, this task force will enhance public safety. And these leaders will strengthen our communities by ensuring that every child can have the opportunity to learn, to grow, and to thrive – free from violence and fear.”
This task force is anchored by both a federal working group that includes U.S. Attorneys and officials from the Departments of the Interior and Justice and an advisory committee of experts appointed to examine the scope and impact of violence facing American Indian and Alaska Native children and make policy recommendations to Attorney General Holder on ways to address it.
The advisory committee will convene four public hearings across the country beginning in Bismarck, N.D., Dec. 9, focusing on violence in children’s homes, schools and communities in Indian country. Associate Attorney General Tony West will join the task force at the first hearing in Bismarck. The other hearings will be held in Phoenix, Ariz., Fort Lauderdale, Fla. and Anchorage, Alaska early in 2014.
The advisory committee will be co-chaired by former U.S. Senator Byron Dorgan and Iroquois composer and singer Joanne Shenandoah. They will be aided by tribal members and national experts on American Indian studies, child health and trauma, and child welfare and law. There are currently 12 advisory committee members:• Dolores Subia Bigfoot, Caddo Nation of Oklahoma, Director, Indian Child Trauma Center, University of Oklahoma
• Rear Admiral Eric Broderick, former Deputy Administrator, Substance Abuse and Mental Health Services Administration
• Eddie Brown, Pasqua Yaqui Tribe and Tohono O’odham Nation, Executive Director of the American Indian Policy Institute and Professor of American Indian Studies, Arizona State University
• Valerie Davidson, Orutsararmiut Native Council Member and Senior Director, Legal and Intergovernmental Affairs, Alaska Native Tribal Health Consortium
• The Hon. Byron Dorgan, Chairman, Board of Advisors, Center for Native American Youth; former U.S. Senator and chair of the Senate Committee on Indian Affairs
• Anita Fineday, White Earth Band of Ojibwe, Director, Indian Child Welfare, Casey Family Programs
• Matthew Fletcher, Grand Traverse Band of Ottawa and Chippewa Indians, Director, Indigenous Law and Policy Center, Michigan State University
• Alicia Lieberman, Director, Child Trauma Research Program, University of California at San Francisco
• Joanne Shenandoah, Iroquois, composer and musical artist
• Chaske Spencer, Lakota, actor
• Ron Whitener, Squaxin Island Tribe, Executive Director, Native American Law Center, University of Washington School of Law
• Marilyn J. Bruguier Zimmerman, Assiniboine-Sioux/Fort Peck Reservation, Director, National Native Children’s Trauma Center, University of Montana
This new task force is a key part of Attorney General Holder’s Defending Childhood initiative to prevent and reduce children’s trauma from experiencing violence as victims or witnesses. The task force was created in response to a recommendation in the Attorney General’s National Task Force on Children Exposed to Violence December 2012 final report. The report noted that American Indian and Alaska Native children have an exceptional degree of unmet needs for services and support to prevent and respond to the extreme levels of violence they experience.
For more information about the Defending Childhood initiative, please visit www.justice.gov/defendingchildhood.
To submit oral or written testimony to the committee, please contact the Tribal Law and Policy Institute, the Office of Juvenile Justice and Delinquency Prevention’s technical assistance provider to the committee, at [email protected]; or 323-650-5467.Alleged Leader of Mexican Narcotics <br /> Trafficking Organization Extradited to U.S.Read the Press Release
The alleged leader of a Mexican narcotics trafficking organization responsible for trafficking multi-ton quantities of cocaine, Juan Juarez Orosco, aka “El Abuelo,” was extradited to the United States from Panama on Nov. 8, 2013, and arraigned on Nov. 10, 2013, before U.S. Magistrate Judge Lois Bloom in the Eastern District of New York.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Loretta E. Lynch of the Eastern District of New York, Special Agent in Charge James T. Hayes Jr. of U.S. Immigration and Customs Enforcement Homeland Security Investigations (ICE HSI) and Special Agent in Charge Brian R. Crowell of the Drug Enforcement Administration’s (DEA) New York Division made the announcement.
According to court documents, from the early 1990s until his arrest by Panamanian law enforcement in March 2012, Juarez allegedly led a large-scale maritime and land transportation operation that was responsible for trafficking multi-ton quantities of cocaine from Central America via ship to the coast of Mexico. Once the cocaine arrived in Mexico, Juarez and his co-conspirators would transport the cocaine from the coast to Mexico City, where it was then destined for the United States. Throughout the 2000s, Juarez allegedly worked with major narcotics traffickers based in Colombia and Mexico, including the Norte Valle Cartel, the Beltran-Leyva Cartel and the Sinaloa Cartel. Through the mid-2000s, Juarez’s organization allegedly transported at least 35,000 kilograms of cocaine for the Beltran-Leyva organization alone. At the height of its activity, Juarez’s organization allegedly transported approximately eight tons a month in conjunction with the Sinaloa Cartel.
“As alleged in the indictment, Juarez’s trafficking organization was responsible for the importation of massive quantities of cocaine, across oceans and continents, into the United States,” said Acting Assistant Attorney General Raman. “Juarez’s arrest and extradition are a testament to the tenacity of law enforcement officers across the world, and show what we can accomplish when we work together with our partners around the globe to capture major drug traffickers and bring them to justice.”
“There is no escape from the reach of the law, no matter where drug kingpins operate their poisonous trade,” said U.S. Attorney Lynch. “Juan Juarez Orosco may have operated an international drug trafficking network that stretched across the Western Hemisphere, but today he faces justice in a courtroom in Brooklyn. Thanks to our law enforcement partners in Panama, today’s extradition also shows that there is no safe haven for drug traffickers on the run.”
Juarez was indicted on March 15, 2012, and charged with international narcotics importation and distribution conspiracy. If convicted, the defendant faces a mandatory minimum sentence of 10 years and a maximum penalty of life in prison.The charges in the indictment are merely allegations, and the defendant is presumed innocent unless and until proven guilty.
This case is being investigated by ICE HSI and DEA. This case is being prosecuted by Trial Attorney Adrian Rosales of the Criminal Division’s Narcotic and Dangerous Drugs Section and Assistant U.S. Attorneys Gina M. Parlovecchio and Tiana Demas of the Eastern District of New York, with the assistance of the Criminal Division’s Office of International Affairs.
Justice Department and HUD Settle Discrimination Claims Against the City of Joliet, Ill.Read the Press Release
Comprehensive Agreement Will Preserve Affordable Housing for City Residents for Next 20 Years
The Justice Department, the Department of Housing and Urban Development (HUD) and the City of Joliet, Ill., have settled housing discrimination litigation that will preserve affordable housing for low-income residents in the southwest Chicago suburb for at least the next 20 years, the U.S. Attorney’s Office for the Northern District of Illinois and the Civil Rights Division announced today.
The agreement, which was approved today by the U.S. District Court for the Northern District of Illinois, resolves the claims of the United States in two lawsuits in which the government contended that the city had discriminated against African Americans in violation of the Fair Housing Act when it attempted to condemn a federally subsidized affordable housing development. The development, known as Evergreen Terrace, contains 356 units of affordable housing that are currently operated by a private owner pursuant to a 20-year contract with HUD. The agreement ensures that, if the city acquires the property through condemnation or otherwise, any displaced resident will be able to remain in affordable housing in Joliet, and at least 115 low-income housing units will continue to be available for families at the property or, subject to HUD approval, elsewhere in Joliet.
“The United States is committed to ensuring that individuals and families, regardless of their race or income, have an opportunity to live in the community of their choosing,” said Jocelyn Samuels, Acting Assistant Attorney General for Civil Rights. “This settlement ensures that, if the city prevails in its eminent domain action, Evergreen Terrace residents will not be forced to leave the city and low-income housing opportunities will be preserved in the city.
“This settlement guarantees that the United States will attain its major goal in this litigation, namely to preserve the affordable housing rights of low-income residents in Joliet and those at Evergreen Terrace in particular,” said U.S. Attorney for the Northern District of Illinois Zachary T. Fardon. “Local governments that try to reduce affordable housing opportunities without providing meaningful alternatives risk running afoul of anti-discrimination laws. As a result of this settlement, the low-income residents of Evergreen Terrace will be able to either stay at Evergreen Terrace or move to suitable alternative housing in Joliet.”
“This settlement protects the housing rights of minority families living in Joliet and preserves affordable housing options for many years to come,” said HUD General Counsel Helen Kanovsky. “Government at every level should make certain they cultivate affordable housing and avoid creating obstacles that close doors on families who deserve a place to call home.”
Under today’s settlement, if the city acquires the property, consisting of eight buildings on North Broadway Street and North Bluff Street, it will still be bound by certain restrictions designed to protect residents and preserve affordable housing within the city of Joliet. Among other things, the agreement:
· Ensures that tenants who wish to remain in Joliet will not be displaced unless and until Joliet finds suitable housing in the city that will also accept the residents’ federal housing subsidies. The city will also provide relocation counseling to displaced residents through a HUD-approved organization and will provide all assistance required by the Uniform Relocation Act;
· Requires the city to preserve at least 115 of the low-income housing units for the next 20 years. The housing units would remain at the property initially, but the city could seek to transfer the subsidy to another development in Joliet pursuant to HUD’s program requirements for such transfers. No such transfer could be carried out until the replacement housing is ready for occupancy, and current and former Evergreen Terrace residents would have first priority for residency;
· Provides that to the extent any other housing is developed at the property, it would include the minimum number of affordable units required by the Low-Income Housing Tax Credit Program;
· Requires the city to construct and maintain a community center to provide services to current and former Evergreen Terrace residents and other low- and moderate-income residents of the city;
· Maintains most of the Evergreen Terrace site for use as a public purpose for at least twenty years;
· Restores to the city HUD funding under HUD’s Community Development Block Grant and HOME Investment Trust Funds program that HUD had previously withheld because of its conclusion that the city was not complying with the Fair Housing Act and other applicable civil rights laws; and
· Ends HUD’s participation in the ongoing trial in the condemnation lawsuit.
The current property owners of Evergreen Terrace and four current tenants had also challenged the city’s condemnation action, and today’s agreement does not resolve their claims.
The federal Fair Housing Act prohibits discrimination in housing based on race, color, religion, national origin, sex, disability and familial status. Fair housing enforcement is a priority of the Civil Rights Division. More information about the Civil Rights Division and the laws it enforces can be found at www.justice.gov/crt . Individuals who believe that they may have been victims of housing discrimination can call the housing Discrimination Tip Line at 1-800-896-7743, email the Justice Department at [email protected] , or contact the U.S. Department of Housing and Urban Development at 1-800-669-9777.
Justice Department Sues to Stop Louisiana Tax Return PreparerRead the Press Release
Return Preparer in La Place, La., Allegedly Overstated Refunds through Inflated Expenses, Deductions, Credits, and Fabricated Businesses
The United States has asked a federal court in New Orleans to permanently bar Shawanda Nevers (aka Shawanda Bryant, aka Shawanda Hawkins, aka Shawanda Johnson) of La Place, La., from preparing federal income tax returns for others, the Justice Department announced today. According to the complaint, Nevers has prepared federal income tax returns in Louisiana through a business named 3LJ’s Industrial Service Solutions LLC. The complaint alleges that she has prepared returns that unlawfully understate income tax liabilities and overstate refunds through a variety of schemes.
According to the complaint, Nevers prepared returns that claimed losses by fabricating expenses for fictitious businesses or overstating expenses incurred by legitimate enterprises. The deductions for these fictitious or overstated expenses were claimed on a Form Schedule C – Profit or Loss From Business, which Nevers often included in her clients’ returns without their knowledge. The returns Nevers prepared directed the Internal Revenue Service (IRS) to deposit the resulting refunds into her account, from which she deducted a fee before remitting the balance to her clients. The complaint states that the IRS has examined a sample of tax returns that Nevers prepared for her clients for the tax years 2009 through 2011 and almost all of the returns examined had Schedule C losses that audits proved were either overstated or falsified. Altogether, the complaint alleges that Nevers’ activities may have resulted in as much as $6 million of loss to the United States.
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 Justice Department’s Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers. Information about these cases is available on the Justice Department website.
Related Materials:
United States v.Shawanda Nevers, etc.
Complaint for Permanent Injunction and Other ReliefJustice Department Selects Four Courts to Identify Promising Practices <br /> in Custody and Visitation Decisions in Domestic Violence CasesRead the Press Release
The Department of Justice’s Office on Violence Against Women (OVW), in partnership with the National Council of Juvenile and Family Court Judges (NCJFCJ), announces the selection of four courts to participate in the Family Court Enhancement Project (FCEP) to improve custody and visitation decision-making for families who have experienced domestic violence. The four courts selected are: Circuit Court of Cook County in Chicago, Ill.; Family Court of the State of Delaware; Hennepin County Family Justice Center in Minneapolis, Minn.; and Multnomah County Family Court in Portland, Ore.
“In order to maintain safety for the entire family, it is crucial that judges weigh the dynamics of domestic violence and its impact on both adults and children when making custody and visitation decisions,” said OVW Acting Director Bea Hanson. “Ensuring the safety of domestic violence victims and their children during and after court proceedings is an essential component of the FCEP. This project will provide guidance to courts around the country in implementing proven procedures and practices that keep victims and children safe.”
The FCEP, a collaborative project of NCJFCJ, OVW, the Battered Women’s Justice Project, and the National Institute for Justice, is designed to determine what family court procedures, practices and structures related to custody and visitation can help keep victims of domestic violence and their children safe from further violence and trauma. The four courts chosen for the FCEP applied to an open call for concept papers that was issued by NCJFCJ. OVW, NCJFCJ and BWJP reviewed the concept papers based on the criteria set forth in the call.
OVW experts have identified, from a series of roundtable discussions and extensive research, challenges that affect the safety of domestic violence victims and their children involved in custody proceedings. These challenges include: failure to identify and understand domestic violence in court and in third-party assessments; structural and procedural barriers; limited legal and advocacy resources; and the effects of race, class, and gender biases on outcomes.
Over the next two years, the FCEP and the selected courts will work closely with national domestic violence and court improvement experts to implement better approaches for keeping domestic violence victims and their children safe through and beyond court proceedings. Additionally, the U.S. Department of Justice’s National Institute of Justice will lead efforts on data collection and assisting each site in measuring the impacts of their systems change.
According to the CDC, women experience two million injuries from domestic violence each year and approximately one third of all incidents involving female victims take place in homes in which children ages twelve and under reside. More than 15 million American children are exposed to domestic violence each year. Many domestic violence victims and their children will come before a family court, and these courts make custody, visitation and other decisions that will have a significant long-term effect on these children and adults.
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.
Justice Department Requires US Airways and American Airlines<br /> to Divest Facilities at Seven Key Airports to Enhance<br /> System-wide Competition and Settle Merger ChallengeRead the Press Release
The Department of Justice today announced that it is requiring US Airways Group Inc. and American Airlines’ parent corporation, AMR Corp. to divest slots and gates at key constrained airports across the country to low cost carrier airlines (LCCs) in order to enhance system-wide competition in the airline industry resulting in more choices and more competitive airfares for consumers.The department said the proposed settlement will increase the presence of the LCCs at Boston Logan International, Chicago O’Hare International, Dallas Love Field, Los Angeles International, Miami International, New York LaGuardia International and Ronald Reagan Washington National. Providing the LCCs with the incentive and ability to invest in new capacity and permitting them to compete more extensively nationwide will enhance meaningful competition in the industry and benefit airline travelers.
“This agreement has the potential to shift the landscape of the airline industry. By guaranteeing a bigger foothold for low-cost carriers at key U.S. airports, this settlement ensures airline passengers will see more competition on nonstop and connecting routes throughout the country,” said Attorney General Eric Holder. “The department’s ultimate goal has remained steadfast throughout this process - to ensure vigorous competition in airline travel. This is vital to millions of consumers who will benefit from both more competitive prices and enhanced travel options.”
Six state attorneys general–Arizona, Florida, Pennsylvania, Michigan, Tennessee and Virginia–and the District of Columbia joined in the department’s proposed settlement, which was filed in the U.S. District Court for the District of Columbia. If approved by the court, the settlement will resolve the department’s competitive concerns and the lawsuit.
“The extensive slot and gate divestitures at these key airports are groundbreaking and they will dramatically enhance the ability of LCCs to compete system-wide,” said Assistant Attorney General Bill Baer of the Department of Justice’s Antitrust Division. “This settlement will disrupt the cozy relationships among the incumbent legacy carriers, increase access to key congested airports and provide consumers with more choices and more competitive airfares on flights all across the country.”
On Aug. 13, 2013, the department, six state attorneys general and the District of Columbia filed an antitrust lawsuit against US Airways and American alleging that US Airway’s $11 billion acquisition of American would have substantially lessened competition for commercial air travel in local markets throughout the United States. The department alleged that the transaction would result in passengers paying higher airfares and receiving less service. In addition, the department alleged that the transaction would entrench the merged airline as the dominant carrier at Reagan National, where it would control 69 percent of take-off and landing slots, thus effectively foreclosing entry or expansion by competing airlines.
The settlement requires US Airways and American to divest slots, gates and ground facilities at key airports around the country. Specifically, the settlement requires the companies to divest or transfer to low cost carrier purchasers approved by the department:
All 104 air carrier slots (i.e. slots not reserved for use only by smaller, commuter planes) at Reagan National and rights and interest in other facilities at the airport necessary to support the use of the slots;
Thirty-four slots at LaGuardia and rights and interest in other facilities at the airport necessary to support the use of the slots; and
Rights and interests to two airport gates and associated ground facilities at each of Boston Logan, Chicago O’Hare, Dallas Love Field, Los Angeles International and Miami International.
The Reagan National and LaGuardia slots will be sold under procedures approved by the department. Under the terms of the settlement, JetBlue at Reagan National and Southwest at LaGuardia will be given the opportunity to acquire the slots they currently lease from American. The remaining 88 slots at Reagan National and 24 slots at LaGuardia plus any JetBlue or Southwest decline to acquire will be grouped into bundles, taking into account specific slot times to ensure commercially viable and competitive patterns of service for the recipients of the divested slots. The parties will divest these slot bundles and all rights and interests in any gates and other ground facilities (e.g., ticket counters, baggage handling facilities, office space and loading bridges) as necessary to support the use of the purchased slots.
The gates at the five airports will be transferred on commercially reasonable terms to the new acquirers. The acquirers of the slot and gate divestitures also require approval of the department. Preference will be given to airlines at each airport that do not currently operate a large share of slots or gates.
The proposed settlement allows the department to appoint a monitoring trustee to oversee the divestitures or transfers of the slots and gates. The settlement also prohibits the merged company from reacquiring an ownership interest in the divested slots or gates during the term of the settlement. The companies must also provide advance notice of any future slot acquisition at Reagan National regardless of whether or not it is a reportable transaction under the premerger notification law and further provides for waiting periods and opportunities for the department to obtain additional information in order to review the transaction.
AMR is a Delaware corporation with its principal place of business in Fort Worth, Texas. AMR is the parent company of American Airlines. Last year American flew more than 80 million passengers to more than 250 destinations worldwide and took in more than $24 billion in revenue. In November 2011, American filed for bankruptcy reorganization.
US Airways is a Delaware corporation with its principal place of business in Tempe, Ariz. Last year US Airways flew more than 50 million passengers to more than 200 destinations worldwide and took in more than $13 billion in revenue.
G.R.E.A.T. Graduation at Harry S. Truman Elementary SchoolRead the Press Release
United States Attorney Alicia A.G. Limtiaco, announced today that after undergoing a six-week curriculum taught by Gang Resistance Education And Training (G.R.E.A.T.) officers, over 71 fifth grade students at Harry S. Truman Elementary School will be receiving their certificates of completion on Wednesday, November 13, 2013, at 12:30 P.M., in the school's cafeteria.
Parents are invited and highly encouraged to attend and participate alongside our students, in the graduation. The G.R.E.A.T. Program's primary objective is awareness and prevention of delinquency, youth violence, and gang membership. The G.R.E.A.T. lessons, aimed at elementary and middle school students, focus on providing life skills to help students avoid delinquent behavior and violence to solve problems.
Mr. Jon Fernandez, Guam Department of Education Superintendent and Santa Rita Mayor Dale Alvarez have also been invited to attend.
U.S. Attorney Limtiaco stated, AWe praise the hard work, motivation and significant accomplishments of our students in completing the G.R.E.A.T. Program, and the continued commitment and dedication of the G.R.E.A.T. instructors to our youth in taking the G.R.E.A.T. message to our schools in Guam.
Anyone interested in learning more about the program can log on to www.great-online.org.
Former Defense Contractor Employee and Wife Plead Guilty to Conspiring to Defraud Millions in Scheme Involving Supplies to Afghan National ArmyRead the Press Release
Keith Johnson, 46, and his wife, Angela Johnson, 44, of Maryville, Tenn., pleaded guilty today to their roles in a $9.7 million procurement fraud scheme.
Mythili Raman, Acting Assistant Attorney General of the Justice Department’s Criminal Division; Dana J. Boente, Acting United States Attorney for the Eastern District of Virginia; Valerie Parlave, Assistant Director in Charge of the FBI’s Washington Field Office; Robert E. Craig, Defense Criminal Investigative Service (DCIS) Special Agent in Charge of Mid-Atlantic Field Office; John Sopko, Special Inspector General for Afghanistan Reconstruction (SIGAR); and Frank Robey, Director of the U.S. Army Criminal Investigation Command’s Major Procurement Fraud Unit (MPFU), made the announcement after the pleas were accepted by U.S. District Judge Leonie M. Brinkema of the Eastern District of Virginia.
The Johnsons were indicted on July 16, 2013, by a federal grand jury on conspiracy to commit wire fraud and wire fraud charges. Keith Johnson faces a maximum penalty of 20 years in prison, and Angela Johnson faces a maximum penalty of five years in prison when they are sentenced on Feb. 14, 2014.
In a statement of facts filed with the plea agreement, Keith Johnson admitted to serving as the program manager for a Department of Defense contractor that operated a central maintenance facility (CMF) in Kabul, Afghanistan, and other facilities in that country to maintain and repair vehicles used by the Afghan National Army. In his position during 2007 to 2008, Keith Johnson was involved in purchasing vehicle parts from vendors. The Johnsons formed a company in Tennessee, Military Logistics Support (MLS), and listed only the names of relatives as officials in the documents filed. Angela Johnson operated the company. When Keith Johnson’s company solicited quotes for different vehicle parts that were needed, Angela Johnson, using her maiden name of “Angela Gregory” to conceal her relationship to Keith Johnson, responded with quotes based on parts that she was able to purchase from other vendors of vehicle parts. Keith Johnson used his position as program manager to write letters justifying awards of purchase orders for parts to MLS without seeking competitive quotes, and in instances in which there had been competitive quotes, approving recommendations that the awards be made to MLS.
The Johnsons also conspired with John Eisner and Jerry Kieffer, two individuals who worked at the CMF as subcontractors to Keith Johnson’s company, to have Keith Johnson similarly steer purchase orders for other types of vehicle parts to Eisner’s and Kieffer’s separate company, Taurus Holdings. Eisner submitted the quotes for Taurus using a fake name to conceal his connection to the subcontractor. Eisner and Kieffer paid kickbacks to the Johnsons and on occasion engaged in collusive bidding with the Johnsons so that MLS could win competitions for certain purchase orders. Eisner and Kieffer previously pleaded guilty to conspiracy and will be sentenced on Dec. 18, 2013.
As a result of the scheme, Keith Johnson’s company awarded MLS at least $9.7 million worth of purchase orders for vehicle parts by Keith Johnson’s company.
This case was investigated by DCIS, FBI, SIGAR and Army MPFU. Trial Attorney Daniel Butler of the Criminal Division’s Fraud Section and Assistant United States Attorneys Jack Hanly and Ryan Faulconer of the Eastern District of Virginia are prosecuting the case on behalf of the United States.
Court Authorizes IRS to Issue Summonses for Records Relating to U.S. Taxpayers with Offshore Bank AccountsRead the Press Release
Five Banks Directed to Produce Records for Accounts at Zurcher Kantonalbank, The Bank of N.T. Butterfield & Son Limited and Affiliates
U.S. District Judge Kimba M. Wood of the Southern District of New York entered an order on Nov. 7, 2013, authorizing the IRS to issue summonses requiring Bank of New York Mellon (Mellon) and Citibank NA (Citibank) to produce information about U.S. taxpayers who may be evading or have evaded federal taxes by holding interests in undisclosed accounts at Zurcher Kantonalbank and its affiliates (collectively, ZKB) in Switzerland; and U.S. District Judge Richard M. Berman of the Southern District of New York entered an order today authorizing the IRS to issue summonses requiring Mellon, Citibank, JPMorgan Chase Bank NA (JPMorgan), HSBC Bank USA NA (HSBC), and Bank of America NA (Bank of America) to produce similar information in connection with undisclosed accounts at The Bank of N.T. Butterfield & Son Limited and its affiliates (collectively, Butterfield) in the Bahamas, Barbados, Cayman Islands, Guernsey, Hong Kong, Malta, Switzerland, and the United Kingdom. U.S. Attorney for the Southern District of New York Preet Bharara, Assistant Attorney General for the Justice Department’s Tax Division Kathryn Keneally, and Acting Commissioner of the Internal Revenue Service (IRS) Danny Werfel made the announcement today.
In these actions, the Court granted the IRS permission to serve what are known as “John Doe” summonses on Mellon, Citibank, JPMorgan, HSBC, and Bank of America. The IRS uses John Doe summonses to obtain information about possible tax fraud by individuals whose identities are unknown. The John Doe summonses approved today direct these five banks to produce records identifying U.S. taxpayers with accounts at ZKB, Butterfield and their affiliates, including other foreign banks that used ZKB and Butterfield’s U.S. correspondent accounts at Mellon, Citibank, JPMorgan, HSBC, and Bank of America to service U.S. clients.
“These cases once again demonstrate the department’s resolve to uncover and identify taxpayers who tried to hide money overseas as a way to avoid federal taxes,” said Assistant Attorney General Keneally. “These John Doe summonses will provide information about individuals using financial institutions from Switzerland to the Cayman Islands to Hong Kong to avoid their U.S. tax obligations. U.S. taxpayers still holding accounts who have not come clean should come forward and do the right thing before it’s too late.”
“Today’s action show that the use of foreign banks for tax evasion remains a high investigative priority of this office and U.S. citizens should understand that loud and clear,” said U.S. Attorney Bharara. “By issuing these John Doe summonses, we continue our joint efforts with the IRS to identify and hold accountable those who try to evade their legal responsibility to pay taxes.”
“International issues remain a major focus for the IRS, and we are continuing our efforts to fight tax evaders who use offshore accounts to skirt the law,” said IRS Acting Commissioner Werfel. “These John Doe summonses for correspondent account records show our determination to pursue evaders using offshore accounts, even if the person hiding money overseas chooses a bank that has no offices on U.S. soil.”
IRS Offshore Voluntary Disclosure programs and initiatives enable U.S. taxpayers to resolve their tax liabilities and minimize their chances of criminal prosecution by voluntarily disclosing previously undisclosed foreign accounts and income. To date, U.S. taxpayers have identified 371 previously undisclosed accounts at ZKB and 81 such accounts at Butterfield. In addition, a number of U.S. taxpayers with beneficial ownership and control over funds held in accounts at ZKB and Butterfield have admitted failing to report income earned from their offshore accounts on their federal tax returns. The IRS has reason to believe that other U.S. taxpayers who held or presently hold similar accounts at ZKB, Butterfield, and their affiliates have done the same in violation of federal tax law. In December 2012, three employees of ZKB were indicted for conspiring with U.S. taxpayers and others to hide at least $423 million from the IRS in secret Swiss bank accounts.
Federal tax law requires U.S. taxpayers to pay taxes on all income earned worldwide. U.S. taxpayers must also report foreign financial accounts if the total value of the accounts exceeds $10,000 at any time during the calendar year. Willful failure to report a foreign account can result in a fine of up to 50 percent of the amount in the account at the time of the violation.
These cases are being handled by the Office’s Tax and Bankruptcy Unit. Assistant U.S. Attorney Tomoko Onozawa is in charge of the Butterfield case and Assistant U.S. Attorney Christopher B. Harwood is in charge of the ZKB case.
Related Materials:
Five Banks Directed to Produced Records for Accounts
Butterfield and ZKB John Doe Summonses
Brooklyn Clinic Owner Sentenced for Role in $77 Million Medicare Fraud SchemeRead the Press Release
The owner of a Brooklyn medical clinic was sentenced today to serve 15 years in prison for her leading role in a $77 million Medicare fraud scheme.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney for the Eastern District of New York Loretta E. Lynch, Assistant Director in Charge George Venizelos of the FBI’s New York Field Office, and Special Agent in Charge Thomas O’Donnell of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) made the announcement.
Irina Shelikhova, 50, of Brooklyn, was sentenced by U.S. District Judge Nina Gershon of the Eastern District of New York. In addition to her prison term, Shelikhova was sentenced to serve three years of supervised release with a concurrent exclusion from Medicare, Medicaid and all Federal health programs, ordered to forfeit $36,241,545 and ordered to pay $50,943,386 in restitution. Shelikhova has been in custody since her arrest at the John F. Kennedy International Airport on June 15, 2012, after living as a fugitive in Ukraine for nearly two years. After serving her sentence, Shelikhova faces deportation from the United States.
Shelikhova pleaded guilty on Dec. 18, 2012, to one count of conspiracy to commit money laundering. Including Shelikhova, 13 individuals have been convicted in this case.
Court documents state that from 2005 to 2010, Shelikhova owned and operated a clinic in Brooklyn that billed Medicare under three corporate names: Bay Medical Care PC, SVS Wellcare Medical PLLC and SZS Medical Care PLLC (collectively, Bay Medical clinic). Shelikhova and her employees at the Bay Medical clinic paid cash kickbacks to Medicare beneficiaries and used the beneficiaries’ names to bill Medicare for more than $77 million in services that were medically unnecessary or never provided. The defendants billed Medicare for a wide variety of fraudulent medical services and procedures, including physician office visits, physical therapy and diagnostic tests.
According to trial testimony, Shelikhova masterminded the health care fraud at the Bay Medical clinic, which included hiring a medically unlicensed co-defendant to impersonate the clinic’s doctor and render medical care to patients. Shelikhova also directed employees to create phony medical notes in an attempt to back up the false billing and to forge doctors’ names on prescriptions and charts.
The government’s investigation included the use of a court-ordered audio/video recording device hidden in a room at the clinic, which showed conspirators paying cash kickbacks to corrupt Medicare beneficiaries. The conspirators were recorded paying approximately $500,000 in cash kickbacks during a period of approximately six weeks from April to June 2010. This room was marked “PRIVATE” and featured a Soviet-era poster of a woman with a finger to her lips and the words “Don’t Gossip” in Russian. The purpose of the kickbacks was to induce the beneficiaries to receive unnecessary medical services or to stay silent when services not provided to the patients were billed to Medicare.
To generate the large amounts of cash needed to pay the patients, Shelikhova directed the recruitment and operations of a network of external money launderers who cashed checks for the clinic. Shelikhova wrote clinic checks payable to various shell companies controlled by the money launderers. These checks did not represent payment for any legitimate service at or for the Bay Medical clinic, but rather were written to launder the clinic’s fraudulently obtained health care proceeds. The money launderers cashed these checks and provided the cash back to the clinic. Shelikhova used the cash to pay illegal cash kickbacks to the Bay Medical clinic’s purported patients.
The case was investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of New York. This case is being prosecuted by Trial Attorney Sarah M. Hall of the Fraud Section and Assistant U.S. Attorney Shannon Jones of the Eastern District of New York.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,500 defendants who have collectively billed the Medicare program for more than $5 billion. In addition, HHS’s Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.
Attorney General Eric Holder Selects Ronald Davis to <br /> Lead Office of Community Oriented Policing ServicesRead the Press Release
Attorney General Eric Holder today announced Ronald L. Davis as the director of the Office of Community Oriented Policing Services (COPS). Davis comes to COPS from the East Palo Alto Police Department, where he served as Chief of Police since 2005. Davis also worked with the Oakland Police Department for 19 years, where he rose to the rank of Captain and served in assignments including Police Academy Director, Criminal Investigations Commander, Patrol Commander and Inspector General of the Police Department.
“Ronald Davis is an experienced leader, a proven innovator, and an accomplished and highly-respected law enforcement officer. I am proud to welcome him to the Justice Department as Director of the COPS Office, where he will bring his considerable skills to bear in advancing our efforts to become smarter on crime,” said Attorney General Eric Holder. “Chief Davis’ leadership has been instrumental in reducing crime in each of the communities he has served. I look forward to working closely with Director Davis to keep building on the outstanding work of the COPS Office, and to support our law enforcement allies across the country.”
In East Palo Alto, Davis led an organizational reform and community-policing effort that increased public trust and confidence and achieved dramatic crime and violence reductions in a city once dubbed the murder capital of the United States. Davis also partnered with the California Department of Corrections and Rehabilitation to implement a pilot parole-reentry program that provided programming and enforcement services and a job program with the California Department of Transportation. The East Palo Alto Police Department was the first police agency in the state to operate a state-funded reentry program. Return-to-custody rates dropped from more than 60 percent to less than 20 percent during this program.
Davis is the co-author of the Harvard University and National Institute of Justice (NIJ) publication, “Exploring the Role of the Police in Prisoner Reentry,” and the Department of Justice publication, “How to Correctly Collect and Analyze Racial Profiling Data: Your Reputation Depends on It.” He is a contributing author to the Police Executive Research Forum (PERF) publications, “Chief Concerns: The Use of Force,” and “Early Release of Prisoners and Its Impact on Police Agencies and Communities in California.”
Davis earned a Bachelor of Science degree from Southern Illinois University (SIU) and completed the Senior Executives in State and Local Government Program at Harvard University’s John F. Kennedy School of Government.
The COPS Office is a federal agency responsible for advancing community policing nationwide. Since 1995, COPS has awarded more than $14 billion to advance community policing, including grants awarded to more than 13,000 state, local, and tribal law enforcement agencies to fund the hiring and redeployment of approximately 125,000 officers and provide a variety of knowledge resource products including publications, training, and technical assistance.
For more information on COPS, please visit: www.cops.usdoj.gov.
Former Belen, N.M., Police Department Detective Indicted for Using Excessive Force Against ArresteeRead the Press Release
A federal grand jury in Albuquerque, N.M., has returned a one-count indictment charging former Belen Police Department Detective John Lytle with unlawfully assaulting a victim, identified in the indictment as R.A., during an investigative stop and arrest on March 15, 2012.
Lytle is charged with violating R.A.’s right to be free from unreasonable search and seizure by a law enforcement officer, which includes freedom from the use of excessive force. The indictment alleges that Lytle unlawfully assaulted R.A. by striking R.A. while R.A. was in handcuffs. The indictment also alleges that Lytle’s actions resulted in bodily injury to R.A.
Lytle faces a statutory maximum penalty of 10 years in prison for the civil rights violation.
An indictment is merely an accusation, and the defendant is presumed innocent unless proven guilty.
This case is being investigated by the Albuquerque Division of the Federal Bureau Investigation. It is being prosecuted by Assistant U.S. Attorney for the District of New Mexico Mark T. Baker and Trial Attorney Julia Gegenheimer of the Civil Rights Division.
Northern California Real Estate Investor Agrees to Plead Guilty to Bid Rigging at Public Foreclosure AuctionsRead the Press Release
A Northern California real estate investor has agreed to plead guilty for his role in conspiracies to rig bids and commit mail fraud at public real estate foreclosure auctions in Northern California, the Department of Justice announced.
Felony charges were filed today in the U.S. District Court for the Northern District of California in Oakland against Chuokee “Joseph” Bo of Pleasanton, Calif.
Bo is the 38th individual to plead guilty or agree to plead guilty as a result of the department’s ongoing antitrust investigations into bid rigging and fraud at public real estate foreclosure auctions in Northern California.
According to court documents, Bo conspired with others not to bid against one another, but instead designated a winning bidder to obtain selected properties at public real estate foreclosure auctions in Alameda County, Calif. Bo was also charged with conspiring to use the mail to carry out a scheme to fraudulently acquire title to selected Alameda County properties sold at public auctions, to make and receive payoffs, and to divert money to co-conspirators that would have otherwise gone to mortgage holders and others by holding second, private auctions open only to members of the conspiracy. The department said that the selected properties were then awarded to the conspirators who submitted the highest bids in the second, private auctions. The private auctions often took place at or near the courthouse steps where the public auctions were held. Bo is charged with participating in the conspiracies beginning as early as August 2009 and continuing until about October 2010.
“Today’s plea agreement is the latest step in the Antitrust Division’s efforts to preserve open competition in local markets,” said Bill Baer, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. “The division remains committed to prosecuting individuals who subvert the competitive process for their own profit.”
The department said that the primary purpose of the conspiracies was to suppress and restrain competition and to conceal payoffs in order to obtain selected real estate offered at Alameda County public foreclosure auctions at non-competitive prices. When real estate properties are sold at these auctions, the proceeds are used to pay off the mortgage and other debt attached to the property, with remaining proceeds, if any, paid to the homeowner. According to court documents, these conspirators paid and received money that otherwise would have gone to pay off the mortgage and other holders of debt secured by the properties, and, in some cases, the defaulting homeowner.
"This is another example of justice being served in preserving the fairness of public real estate foreclosure auctions as well as the FBI’s commitment in investigating those who take advantage of a competitive marketplace,” said David J. Johnson, FBI Special Agent in Charge of the San Francisco Field Office. “Criminal activity like this takes place in our communities and we continue to rely on the public’s help in seeking those who cheat the system.”
A violation of the Sherman Act carries a maximum penalty of 10 years in prison and a $1 million fine for individuals. The maximum fine for the Sherman Act charges may be increased to twice the gain derived from the crime or twice the loss suffered by the victims if either amount is greater than $1 million. A count of conspiracy to commit mail fraud carries a maximum sentence of 30 years in prison and a $1 million fine. The government can also seek to forfeit the proceeds earned from participating in the conspiracy to commit mail fraud.
Today’s charges are the latest filed by the department in its ongoing investigation into bid rigging and fraud at public real estate foreclosure auctions in San Francisco, San Mateo, Contra Costa, and Alameda counties, Calif. These investigations are being conducted by the Antitrust Division’s San Francisco Office and the FBI’s San Francisco Office. Anyone with information concerning bid rigging or fraud related to public real estate foreclosure auctions should contact the Antitrust Division’s San Francisco Office at 415-436-6660, visit www.justice.gov/atr/contact/newcase.html or call the FBI tip line at 415-553-7400.
Today’s charges were brought in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants, including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.StopFraud.gov.
**The fraud charge(s) referenced in this press release were subsequently dismissed on the government’s motion.**
North Carolina Paving Contractor Pleads Guilty to Tax and Bank FraudRead the Press Release
Tommy Edward Clack pleaded guilty in federal court in Greensboro, N.C., to one count of willfully filing a false federal income tax return and one count of knowingly making a false statement to a federally-insured bank in order to obtain a mortgage loan, the Justice Department and the Internal Revenue Service (IRS) announced today.
According to filings with the court, for approximately the past 10 years Clack has been an itinerant, self-employed paving contractor doing business in North Carolina, South Carolina, Maryland, and Florida. Clack operated under several different business names, and he changed the names of his paving business frequently in order to avoid scrutiny by state and federal law enforcement agencies. As a result of his business practices, over the years Clack was charged with multiple state criminal violations in Maryland, North Carolina, South Carolina and Florida. Since June 2010, Clack has been under an injunction banning him from operating as a driveway paving contractor in North Carolina. He is also subject to a cease-and-desist order in Maryland banning him from various fraudulent practices.
According to court documents, Clack significantly underreported the income from his paving business on his tax returns. From 2004 to 2007, Clack earned gross income of over $5.7 million, but reported only a fraction of it to the IRS. Clack underreported his income by approximately $294,829 in 2004; $1,178,822 in 2005; $1,868,556 in 2006 and $2,428,710 in 2007. Clack’s returns were prepared by an accountant, but Clack knowingly provided her with false information upon which to base Clack’s returns, and signed his returns knowing that they significantly understated his income. Altogether, as a result of these false returns Clack underpaid his taxes during this period by approximately $1,350,597. To conceal his tax fraud, Clack employed a number of strategies: he did not maintain books and records, dealt extensively in cash, paid his employees in cash and structured currency transactions with his bank in amounts designed to evade the bank’s requirement to file Currency Transaction Reports with the IRS.
Court documents state that in 2003, Clack submitted a mortgage loan application in the name of his then-wife to a bank in Greensboro. The application sought a $640,000 loan to finance the purchase of a $1.2 million home. As part of the loan application, Clack provided the bank with a 2002 tax return in his wife’s name, which reported adjusted gross income of $372,748 and claimed total tax liability of $127,745. Clack represented that this tax return had been filed with the IRS, when in fact it had not been. In fact, Clack and his then-wife had filed a 2002 joint federal income tax return which claimed that the couple had adjusted gross income of $17,656 and total tax liability of $2,685. Had the bank known of the discrepancy, they would not have issued the loan. Clack ultimately defaulted on the loan, and the bank suffered a loss after foreclosing the collateral.
For the false tax return charge, Clack faces a maximum of three years in prison, one year of supervised release and a maximum fine of $250,000. Clack faces a maximum of 30 years in prison, five years of supervised release and a maximum fine of $1,000,000 for the bank fraud count. Sentencing is scheduled for March 7, 2014.
The case was investigated by special agents of the IRS - Criminal Investigation, with assistance from the North Carolina State Bureau of Investigation. It is being prosecuted by Trial Attorney Jonathan Marx of the Justice Department’s Tax Division.
New Hampshire Man Charged with Passing Fraudulent Documents in Connection with His Sale of Black Rhinoceros Horns for $35,000Read the Press Release
Ari B. Goldenberg, 46, of Milton, N.H., was charged today with trafficking in and making a false record for illegally selling a black rhinoceros head mount to an undercover U.S. Fish & Wildlife Service (FWS) special agent.
The indictment is a result of a nationwide effort led by the FWS and the Justice Department to investigate and prosecute those involved in the black market trade of endangered rhinoceros horns.
The indictment alleges that Goldenberg, seeking to profit from the sale of a black rhinoceros head mount he acquired for less than $1,000, illegally sold the mount to an undercover special agent of the FWS Office of Law Enforcement for $35,000. The indictment also charges Goldenberg with providing the undercover agent with a falsified receipt for the sale of the mount.
Rhinoceros are a herbivorous species of prehistoric origin and one of the largest remaining mega-fauna on earth. They have no known predators other than humans. All species of rhinoceros are protected under United States and international law, and all black rhinoceros species are endangered. Since 1976, trade in rhinoceros horn has been regulated under the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES), a treaty signed by more than 175 countries around the world to protect fish, wildlife and plants that are or may become imperiled due to the demands of international markets. Nevertheless, the demand for rhinoceros horn and black market prices have skyrocketed in recent years due to the value that some cultures have placed on ornamental carvings, good luck charms or alleged medicinal purposes, leading to a decimation of the global rhinoceros population. In China, there is a tradition dating back centuries of intricately carved rhinoceros horn cups. Drinking from such a cup was believed to bring good health, and such carvings are highly prized by collectors. As a result of this demand, rhino populations have declined by more than 90 percent since 1970. South Africa, for example, has witnessed a rapid escalation in poaching of live animals, rising from 13 in 2007 to more than 618 in 2012.
An indictment is merely an accusation and a defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
The case was investigated by the FWS Office of Law Enforcement and is being prosecuted by the Environmental Crimes Section of the Justice Department’s Environment and Natural Resources Division.Iraqi-Based Construction Company Pays $2.7 Million <br /> to U.S. for Alleged False Claims in Bribery SchemeRead the Press Release
Iraqi Consultants and Construction Bureau (ICCB) has paid the U.S. $2.7 million to resolve allegations that it violated the False Claims Act by bribing a U.S. government official to obtain U.S. government contracts in Iraq, the Department of Justice announced today. ICCB is a privately owned construction company headquartered in Baghdad, Iraq.
“Bribery will not be tolerated in government contracting,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery. “We will ensure that government contracts are awarded based on merit and pursue allegations of fraudulently procured contracts wherever they occur.”
The government alleged that, from 2007 to 2008, ICCB paid bribes to Army Corps of Engineers procurement official John Salama Markus, 41, of Nazareth, Pa., to obtain information that gave it an advantage in bidding on several construction contracts with the Department of Defense in Iraq. The contracts supported reconstruction efforts involving the Iraq war, including infrastructure and security projects and the building of medical facilities and schools. ICCB then knowingly overcharged the U.S. for services provided under the contracts, according to the government’s allegation.
“It is offensive that anyone would see projects to promote stability, health and education in a rebuilding country as a way to make illegal cash on the side,” said U.S. Attorney for the District of New Jersey Paul J. Fishman. “We will not abide companies paying to play in such a system.”
“The Defense Criminal Investigative Service (DCIS) is committed to protecting the integrity of the Defense acquisition process from personal and corporate avarice,” said Special Agent in Charge, DCIS Northeast Field Office Craig Rupert. “Ensuring the proper use of U.S. taxpayers’ dollars and preventing contract fraud is in our nation’s interest and remains a priority.”
The settlement is part of a larger investigation initiated by the U.S. Attorney’s Office for the District of New Jersey. As part of that investigation, Markus pleaded guilty on Sept. 7, 2012, to wire fraud, money laundering and failure to report a foreign bank account in connection with more than $50 million in contracts awarded to foreign companies in Gulf Region North, Iraq. Markus was sentenced to 13 years in prison on March 12, 2013, in Newark, N.J., federal court.
The investigation is being handled by the U.S. Attorney’s Office for the District of New Jersey and the Civil Division’s Commercial Litigation Branch, in cooperation with the Defense Criminal Investigative Service, the Major Procurement Fraud Unit of the Army’s Criminal Investigation Command, the Criminal Investigative Division of the Internal Revenue Service and the Department of Homeland Security. The claims resolved by the settlement are allegations only; there has been no determination of liability.
Home Health Agency Owner Sentenced for Role in $13.8 Million Medicare Fraud SchemeRead the Press Release
Detroit-area resident Javed Rehman was sentenced to serve 60 months in prison today for his role in a $13.8 million Medicare fraud scheme.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Barbara L. McQuade of the Eastern District of Michigan, Special Agent in Charge Paul M. Abbate of the FBI’s Detroit Field Office, and Special Agent in Charge Lamont Pugh III of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) Office of Investigations’ Detroit Office made the announcement.
Rehman, 50, of Farmington Hills, Mich., was sentenced by U.S. District Judge Gerald E. Rosen in the Eastern District of Michigan. In addition to his prison term, Rehman was sentenced to serve two years of supervised release and was ordered to pay $1,734,801 in restitution, jointly and severally with his co-defendants. Rehman pleaded guilty on July 12, 2013, before Judge Rosen to one count of conspiracy to commit health care fraud.
According to court records, in or around May 2009, Rehman purchased Quantum Home Care Inc. with co-conspirators Tausif Rahman and Muhammad Ahmad. Rehman paid kickbacks to recruiters to obtain Medicare beneficiary information used to bill Medicare for home health services – including physical therapy and skilled nursing services – that were never rendered. Rehman was the administrator of Quantum and was responsible for the submission of false and fraudulent claims to Medicare based on falsified files created by the co-conspirators.
Medicare paid approximately $1.7 million to Quantum for physical therapy and skilled nursing services that Quantum purported to render between approximately June 2009 and September 2011. According to court documents, between 2008 and 2009, Rehman’s co-conspirators acquired control of three other home health care companies. The four companies, including Quantum, received approximately $13.8 million from Medicare in the course of the conspiracy.
Rahman pleaded guilty on Jan. 5, 2012, to one count of conspiracy to commit health care fraud and one count of money laundering and is scheduled for sentencing on May 21, 2014. Ahmad pleaded guilty on Aug. 28, 2012, to one count of conspiracy to commit health care fraud and is scheduled for sentencing on May 14, 2014.
This case was investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Michigan. The case is being prosecuted by Assistant Chief Catherine K. Dick of the Fraud Section.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,500 defendants who have collectively billed the Medicare program for more than $5 billion. In addition, HHS’s Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.Federal Court in Ohio Shuts Down Nation’s Fourth-Largest<br /> Tax-Preparation Firm and Bars CEO from Tax-Preparation BusinessRead the Press Release
Judge Finds that Instant Tax Service Franchisor Defrauded Customers, Obstructed the IRS and Violated Court Orders on Lending Practices
A federal court has entered a permanent injunction ordering ITS Financial LLC, the parent company of the Instant Tax Service franchise, to cease operating, the Justice Department announced today. The injunction order, which was signed yesterday by Judge Timothy S. Black of the U.S. District Court for the Southern District of Ohio, also bars Fesum Ogbazion, the sole owner and CEO of ITS Financial, from operating or being involved with any business relating to tax-return preparation. The court issued the order following a two-week trial in Cincinnati in June 2013.
Instant Tax Service, which is based in Dayton, Ohio, claimed to be the fourth-largest tax-preparation firm in the nation. According to the court, ITS Financial had about 150 franchisees that filed over 100,000 tax returns each year in 2011 and 2012. Two other entities owned by Ogbazion, Tax Tree LLC and TCA Financial LLC, were also defendants in the case and were also ordered to cease operating.
The court found that Ogbazion and his defendant companies had:
· Filed tax returns for customers without their permission and encouraged franchisees to do the same;
· Clandestinely trained and encouraged franchisees to prepare and file tax returns prematurely with paycheck stubs that omitted and understated income and inevitably resulted in the submission of false federal tax returns;
· Defrauded customers, who were largely low-income, by marketing false and fraudulent loan products to lure them into the tax-preparation offices;
· Defrauded customers by requiring franchisees to charge phony and exorbitant fees;
· Forged customers’ signatures on loan checks and used those forged checks to operate Ogbazion’s businesses;
· Willfully failed to pay over $1 million of their own employment taxes and lied about assets in connection with the collection of those taxes, while hiding money in a secret bank account and defrauding the United States and third party creditors;
· Lied on government forms and encouraged franchisees to do the same;
· Obstructed government agents and materially assisted franchisees in circumventing Internal Revenue Service (IRS) law-enforcement efforts involving the suspension of electronic filing identification numbers; and
· Told franchisees to lie to government agents in connection with IRS compliance visits.
The court credited an IRS study concluding that the tax harm caused by Instant Tax Service franchisees in five cities in a single tax-filing season was between $10 million and $25 million.
“Defendants’ harm to the public is extensive and egregious, indeed appalling,” the court stated. “This is especially so given the nature of Instant Tax Service’s core customer – the working poor – who are particularly vulnerable to [the] Defendants’ fraudulent practices.”
The court further stated: “Defendants’ repeated attempts at trial and in argument to downplay the gravity of their lawlessness was stunning. The court concludes that even today [the] Defendants have not fully recognized their culpability. Ultimately, the nature, scope and gravity of [the] Defendants’ offenses, and the unrepentant attitude toward their commission, demonstrate the necessity for a complete injunction putting the Defendants permanently out of business.”
The court also concluded that Ogbazion and ITS Financial violated the terms of a preliminary injunction order that the court had entered in October 2012 with their consent. The court found that, despite their agreement to obey various lending and consumer-protection laws during the 2013 tax filing season, they violated several of those laws by discriminating against active-duty military personnel on loan applications and by failing to obtain a state lending license in a timely manner. The court determined that they violated the preliminary injunction by causing their franchisees to provide tens of thousands of customers with Truth-in-Lending Act disclosure forms falsely stating that the loans carried no finance charges and an annual percentage rate (APR) of zero.
“We are gratified by the court’s decision, which serves to protect hard-working taxpayers who were targeted by Instant Tax Service, and also safeguards all honest taxpayers from the harm done by fraudulent tax filings,” said Assistant Attorney General Kathryn Keneally of the Justice Department’s Tax Division. “As described by the court, this company grew large through abhorrent means – filing returns without customer authorization, forging customer signatures, pushing fraudulent loan products, and much more. As the court’s decision recognizes, a business model based on false and fraudulent conduct cannot be allowed to prevail.”
“The court's decision sends a clear message to those who might be tempted to abuse the public trust provided to the tax preparer community,” said Acting IRS Commissioner Danny Werfel. “Those who deceive their customers and defraud the U.S. Treasury will face swift legal action that puts an end to their corrosive conduct."
Assistant Attorney General Keneally thanked former and current Tax Division trial attorneys Nathan Clukey, Sean Green, Russell Edelstein, Jose Olivera and Gregory Van Hoey, along with paralegal Mahana Karimi, for their efforts on the case. She also thanked the many IRS attorneys and agents who participated in the investigation.
Return preparer fraud is one of the IRS’s Dirty Dozen Tax Scams for 2013 . The Internal Revenue Service has tips for choosing a tax preparer: www.irs.gov/Tax-Professionals/Choosing-a-Tax-Professional . In the past decade, the department’s Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers. Information about these cases is available on the department website .
Detroit-Area Home Health Care Agency Owner Sentenced for Role in $2.2 Million Medicare Fraud SchemeRead the Press Release
The owner of a Detroit-area home health care agency was sentenced today to serve 65 months in prison for her leading role in a $2.2 million Medicare fraud scheme.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Barbara L. McQuade of the Eastern District of Michigan, Special Agent in Charge Paul M. Abbate of the FBI’s Detroit Field Office, and Special Agent in Charge Lamont Pugh III of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) Office of Investigations’ Detroit Office made the announcement.
Mehran Javidan, 51, was sentenced by U.S. District Judge Denise Page Hood in the Eastern District of Michigan. In addition to her prison term, Javidan was sentenced to serve three years of supervised release and was ordered to pay $2.2 million in restitution, jointly and severally with her co-defendants.
Javidan was convicted by a federal jury on April 2, 2013, of one count of conspiracy to commit health care fraud, three counts of health care fraud, three counts of making false statements related to health care matters and one count of conspiracy to solicit or pay health care kickbacks in exchange for referrals of patients to home health care company Acure Home Care Inc. (Acure). The jury found Javidan not guilty of one count of making false statements and one count of health care fraud and did not reach a verdict on one additional count of health care fraud.
Javidan was initially charged along with two other defendants in an indictment unsealed on Feb. 17, 2011, as part of a nationwide Medicare fraud takedown. One co-defendant was also convicted on April 2, 2013, while the other remains a fugitive.
According to evidence presented at trial, Javidan owned and operated Acure, a home health care company in Oak Park, Mich., and later Troy, Mich. Javidan paid doctors to refer non-homebound patients for physical therapy treatment that was medically unnecessary. The evidence showed that she also paid patient recruiters to obtain Medicare information and pre-signed physical therapy documents from Medicare beneficiaries. The recruiters for Acure obtained the Medicare information and pre-signed forms by paying patients in cash and by promising that the referring doctors would prescribe them narcotic prescriptions.
Evidence presented at trial established that Javidan paid physical therapists and physical therapy assistants employed by Acure to create false and fraudulent physical therapy files using the blank, pre-signed forms to make it appear as if physical therapy services were actually rendered, when in fact, the services had not been rendered.
Javidan then directed the submission of Acure’s falsified billing to Medicare. Acure was paid more than $2.2 million from Medicare between December 2008 and November 2010.
The investigation was led by the FBI and HHS-OIG and was brought by the Medicare Fraud Strike Force under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Michigan. The case was prosecuted by Assistant Chief Catherine K. Dick and Trial Attorney Niall M. O’Donnell of the Fraud Section.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in Chicago and eight other cities across the country, has charged more than 1,500 defendants who have collectively billed the Medicare program for more than $5 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to www.stopmedicarefraud.gov.Dentist Pleads Guilty to Filing False Tax ReturnRead the Press Release
Jeffrey Paper of Potomac, Md., pleaded guilty yesterday to willfully filing a false tax return in the U.S. District Court in Greenbelt, Md., the Justice Department and the Internal Revenue Service (IRS) announced today.
According to court documents, Paper owned and operated a dental practice located in Lanham, Md., between 2008 and 2010. For the 2009 and 2010 tax years, Paper underreported the total gross receipts from his dental practice and overstated his business expenses on his individual income tax returns. As a result of his conduct, the total tax loss to the government was $215,711.
Paper faces a maximum sentence of three years in prison, one year of supervised release and a $250,000 fine. Sentencing is scheduled for March 10, 2014.
This case was investigated by special agents of IRS – Criminal Investigation. Trial Attorney Erin B. Pulice of the Department’s Tax Division is prosecuting the case, with the assistance of Assistant U.S. Attorney Kelly Hayes of the U.S. Attorney’s Office for the District of Maryland.
Chicago Lawyer Permanently Barred from Promoting Tax-Fraud Schemes and Preparing Related Tax ReturnsRead the Press Release
A federal court has permanently barred Gary J. Stern from promoting tax fraud schemes and from preparing related tax returns, the Justice Department announced today. The civil injunction order, to which Stern consented without admitting the allegations against him, was entered by Judge Robert Gettleman of the U.S. District Court for the Northern District of Illinois. The order permanently bars Stern from preparing various types of tax returns for individuals, estates and trusts, partnerships or corporations (IRS Forms 1040, 1041, 1065, and 1120), among others. The United States alleged that Stern used those returns to facilitate the unlawful schemes identified in the complaint.
According to the complaint, Stern designed at least three tax-fraud schemes that helped hundreds of customers falsely claim over $16 million in improper tax credits and avoid paying income tax on at least $3.4 million. Stern allegedly promoted the schemes to customers, colleagues, and business associates. The complaint alleges that his customers included lawyers, entrepreneurs and professional football players, and some of the latter, including NFL quarterback Kyle Orton, have sued Stern in connection with the tax scheme, alleging fraud, breach of fiduciary duty and professional malpractice.
Federal law allows an income tax credit with respect to certain sales of fuel from non-conventional sources (FNS), including methane produced from landfills. According to the complaint, beginning in the early 2000’s Stern created a web of partnerships, companies and other entities to serve as a conduit for sham transactions designed to funnel false FNS credits to his customers. Stern allegedly funneled over $11.4 million of these bogus FNS credits to customers and used a bogus trust arrangement to fraudulently distribute an additional $5.34 million in FNS credits to his customers.
Finally, according to the complaint, Stern promoted an abusive income-shifting technique to help his wealthiest customers illegally avoid taxes. Stern and his business associates allegedly kept most of the money that customers contributed to this scheme. The court has barred Stern from using any entity to assist others in illegally shifting income for the purpose of avoiding tax.
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 department website .
Related Materials:
United States v. Gary J. Stern
Final Judgment of Permanent Injunction ReliefAT&T Agrees to Settle Allegations Involving IP Relay Services <br /> Provided to Hearing- and Speech-Impaired PersonsRead the Press Release
AT&T has agreed to settle allegations that it violated the False Claims Act in connection with a program administered by the Federal Communications Commission (FCC), the Department of Justice announced today. The settlement resolves a civil lawsuit in which the government alleged that AT&T knowingly overbilled the Telecommunications Relay Services (TRS) Fund, which compensates IP Relay service providers for placing calls on behalf of hearing- or speech-impaired individuals in the U.S.“The TRS program provides vital communication assistance to hearing- and speech-impaired Americans,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery. “We are committed to protecting the integrity of the program, and the public funds used to support it, to ensure that hearing- and speech-impaired citizens can place emergency and other important phone calls.”
The settlement announced today involves the FCC’s IP Relay Program, which reimburses telecommunications companies that provide phone service for hearing- and speech-impaired individuals. Under this program, the companies employ communications assistants who facilitate calls to and from hearing- and speech-impaired citizens through instant messaging software. The companies are entitled to a per-minute reimbursement for each call that they handle.
The government alleged that, from December 2009 through December 2011, as much as 80 percent of the calls for which AT&T claimed reimbursement were ineligible because the calls did not originate in the U.S. or were not placed by hearing- or speech-impaired individuals. The government further alleged that it was common knowledge among AT&T communication assistants that a large percentage of their callers were from Nigeria or other foreign countries, and that they were using the TRS program to perpetrate credit card and other fraud schemes.
In 2008, the FCC issued two orders that required AT&T and other providers to register all callers and to institute procedures to verify registration information for their callers. Allegedly, AT&T initially used a postcard verification system for its IP Relay users, but the postcard system verified only a fraction of its users. Concerned about a potential drop in its IP Relay call volume, AT&T switched to a more relaxed eRegistration procedure. Upon switching to the eRegistration procedure, AT&T’s registrations increased from approximately two users per day to between 40 and 100 per day. Many of the users registered by AT&T through its eRegistration system provided AT&T with nonsensical or false names, e-mail addresses or street addresses including, for example, names composed of purely random letters such as “nbdk” or “jhgfajhs”. Despite receiving nonsensical and false registration information, AT&T enrolled the users and subsequently billed the government for their calls.
On May 7, 2013, AT&T entered into a consent decree with the FCC that resolved allegations based on conduct related to the subject matter of today’s settlement. Pursuant to that consent decree, AT&T paid a total of $18.25 million. Under the settlement announced today, AT&T has agreed to pay an additional $3.5 million to resolve its remaining liability under the False Claims Act.
“We would like to thank the Department of Justice for its assistance in ensuring the integrity of the TRS fund,” said Chief of the FCC’s Enforcement Bureau Michele Ellison. “Combined with our previous enforcement actions, today’s settlement makes it clear that we will not tolerate abuse of this system, which is vital to millions of Americans.”The government’s investigation was initiated by a qui tam, or whistleblower, lawsuit filed under the False Claims Act, which permits private citizens to bring lawsuits on behalf of the government and to share in any recovery. The lawsuit was filed in federal district court in Pittsburgh by Constance Lyttle. Lyttle will receive $525,000.
This case was handled by the U.S. Department of Justice Civil Division, Commercial Litigation Branch; the U.S. Attorney’s Office for the Western District of Pennsylvania and the FCC Office of the Inspector General and Office of the General Counsel.
The claims resolved by this settlement are allegations only, and there has been no determination of liability. The lawsuit is captioned United States ex rel. Lyttle v. AT&T Corp., Civil Action No. 2:10-cv-01376-NBF-RCM (W.D. Pa.).
Patient Broker of South Florida Psychiatric Hospital Sentenced for Role in $67 Million Health Care Fraud SchemeRead the Press Release
A patient broker of a South Florida psychiatric hospital was sentenced today to serve 24 months in prison followed by three years of supervised release for her participation in a $67 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 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.
Gloria Himmons, 54, of Union Springs, Ala., was sentenced by U.S. District Judge Jose E. Martinez in the Southern District of Florida. In March 2013, Himmons pleaded guilty to one count of conspiracy to receive health care kickbacks and one count of receiving a health care kickback. In addition to her prison term, Himmons was ordered to pay $14 million in restitution, joint and severally with her co-defendants.
According to court documents, Himmons was a patient broker at Hollywood Pavilion LLC (HP), a state-licensed psychiatric hospital in South Florida that purported to offer both inpatient and outpatient mental health services. Himmons would provide Medicare beneficiaries to HP in exchange for bribes and kickbacks, and she knew that the patients she provided to HP were not appropriate for inpatient psychiatric hospitalization or for outpatient mental health treatment. The patients she provided to HP included those who were not severely mentally ill, as well as substance abusers looking for rehabilitation programs. The patients did not have legitimate referrals from hospitals or doctors who had been treating acute-phase, severe mental illness.
From at least 2005 through September 2012, in exchange for bribes and kickbacks, Himmons knowingly and willfully provided to HP Medicare beneficiaries who did not need inpatient or outpatient psychiatric treatment. As a result of Himmons’s participation in this scheme, HP was improperly paid more than $7 million by Medicare. From at least 2003 through at least August 2012, HP billed Medicare approximately $67 million for services that were not properly rendered, for patients that did not qualify for the services being billed, and for claims for patients who were procured through bribes and kickbacks. Medicare reimbursed HP on approximately $40 million of those claims.
On Sept. 10, 2013, co-defendants Karen Kallen-Zury, Daisy Miller and Christian Coloma were sentenced on their June 2013 jury convictions. Kallen-Zury, the chief executive officer of HP, and Miller and Coloma were convicted on all counts at trial and sentenced to 300 months, 180 months and 144 months, respectively. Kallen-Zury and Miller were ordered to pay, jointly and severally with their co-defendants, nearly $40 million in restitution. Coloma was ordered to pay, jointly and severally, more than $20 million in restitution.
This case was investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Miami. This case is being prosecuted by Assistant Chief Robert A. Zink and Trial Attorneys Andrew H. Warren and Anne McNamara of the Fraud Section.
Since their inception in March 2007, Medicare Fraud Strike Force operations in nine locations have charged more than 1,500 defendants who collectively have falsely billed the Medicare program for more than $5 billion. In addition, the HHS Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.Navy Commander Charged with Accepting $100,000 Cash and Prostitutes in Widening International Bribery SchemeRead the Press Release
A third senior U.S. Navy official has been charged in a complaint unsealed today with accepting prostitutes, luxury travel and $100,000 cash from a foreign defense contractor in exchange for classified and internal U.S. Navy information, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and U.S. Attorney Laura E. Duffy of the Southern District of California.
U.S. Navy Commander Jose Luis Sanchez, 41, was arrested in Tampa, Fla., this morning and made his initial appearance in federal court in the Middle District of Florida this afternoon. Also named in a complaint unsealed today is Leonard Glenn Francis, 49, of Malaysia, the CEO of Glenn Defense Marine Asia (GDMA), who was arrested on Sept. 16, 2013, in San Diego.
Two other senior Navy officials – Commander Michael Vannak Khem Misiewicz, 46, and Naval Criminal Investigative Service Supervisory Special Agent John Bertrand Beliveau II, 44 – have been charged separately in connection with bribery allegations. GDMA executive Alex Wisidagama, 40, of Singapore, has also been charged with participating in a related scheme to overbill the Navy for services provided in ports throughout Southeast Asia.
“As described in the corruption charges unsealed today, senior officials with the United States Navy abused their trusted positions as leaders in our armed forces by peddling favorable treatment -- and even classified government information -- for their personal benefit,” said Acting Assistant Attorney General Raman. “In turn, the GDMA executives who illicitly sought information and favors from those Navy officials boasted about their unlawful access to those officials and then traded on the influence that they illegally bought. Day by day, this massive Navy fraud and bribery investigation continues to widen, and as the charges announced today show, we will follow the evidence wherever it takes us.”
“According to the allegations in this case, a number of officials were willing to sacrifice their integrity and millions of taxpayer dollars for personal gratification,” said U.S. Attorney Laura Duffy. “While the overwhelming majority of the 400,000 active duty Navy personnel conduct themselves in a manner that is beyond reproach, we and our law enforcement partners at Naval Criminal Investigative Service and Defense Criminal Investigative Service continue to investigate the allegations of fraud and corruption that tarnish the stellar reputation of the U.S. Navy.”
“The arrest and criminal complaint against Commander Sanchez is the result of an ongoing investigation by the Defense Criminal Investigative Service and its law enforcement partners to identify and prosecute those individuals who would abuse their positions of trust within the Department of Defense,” said Special Agent In Charge Chris D. Hendrickson of the Office of the Inspector General, Department of Defense, Defense Criminal Investigative Service Western Field Office. “Allegations like these against Commander Sanchez can tarnish the reputation of honest and hardworking government personnel and put military personnel defending our nation around the globe at risk. The mission of DCIS is to ‘Protect America’s Warfighters’ and we will continue to relentlessly identify and investigate those individuals seeking to enrich themselves at the expense of the U.S. taxpayers.”
According to the complaint, Sanchez received bribes in return for sending sensitive U.S. Navy information to Francis, and making recommendations within the Navy to benefit Francis’s company, GDMA. GDMA is a multinational corporation and longtime government contractor based in Singapore, which provides hundreds of millions of dollars of “husbanding” services for the U.S. Navy in at least a dozen countries throughout the Pacific. Husbanding involves supplying food, water, fuel, tugboats and fenders, security, transportation, trash and liquid waste removal, and other goods and services to ships and submarines in foreign ports.
Like Sanchez, Misiewicz is accused of providing sensitive Navy information to Francis and secretly working on behalf of GDMA in exchange for prostitutes and luxury travel. GDMA, which has operating locations in Japan, Singapore, Thailand, Malaysia, Korea, India, Hong Kong, Indonesia, Australia, Philippines, Sri Lanka and the United States, allegedly overcharged the Navy and submitted bogus invoices for millions of dollars in services. Beliveau, the NCIS agent, is charged in another complaint with illegally supplying Francis with sensitive information, including reports of investigations by NCIS into possible frauds committed by GDMA in billing the U.S. Navy under its contracts. Wisidagama is charged with conspiracy to defraud the United States related to the overbilling.
According to court records, Sanchez allegedly provided Francis with internal Navy information, such as U.S. Navy ship schedules – some of which were classified – and information about husbanding issues that could affect GDMA, in order to help GDMA win and maintain Navy business. Court records allege that Sanchez regularly emailed Francis internal Navy discussions about GDMA, including legal opinions, and made recommendations in GDMA’s favor about port visits and Navy personnel assignments. In return, Francis gave Sanchez over $100,000 in cash, together with travel expenses and prostitutes. Court records allege that the conspiracy started in January 2009, when Sanchez was the Deputy Logistics Officer for the Commander of the U.S. Navy Seventh Fleet in Yokosuka, Japan, and continued when he was transferred to serve as Director of Operations for Fleet Logistics Command in Singapore, until he transferred to Florida in April 2013.
Sanchez and Francis allegedly communicated regularly via email and Facebook. Sanchez referred to Francis as “Lion King” and “Boss” in the emails, while Francis called Sanchez “brudda.”
For his part, Francis allegedly hired female escorts for Sanchez and friends on multiple occasions, on one occasion emailing one escort: “Hey Love Jose is in Manila at the DIAMOND Hotel go and see him he needs some love asap.”
According to court records, in an email exchange on Oct. 16, 2009, Sanchez and Francis allegedly discussed a trip Sanchez planned to take to Kuala Lumpur and Singapore with Navy friends he called his “Wolf Pack.” They discussed the number of rooms the “Wolf Pack” needed, and Sanchez asked Francis for pictures of prostitutes for “motivation.” Francis replied: “J, got it we will hook up after the FLAG dinner, will arrange a nest for you guys and some birds [women].” A few days later, on Oct. 19, 2009, Sanchez sent a Facebook message to Francis saying, “Yummy . . . daddy like.” In an Oct. 23, 2009, Facebook message, Sanchez asked Francis, “Where r we staying in KL [Kuala Lumpur]? No pictures to get our spirits up?”
Between Aug. 26 and 28, 2011, Francis allegedly communicated through email to the address of an escort whom Francis had previously hired for Sanchez. Francis wrote: “Hey Love, Jose is in Manila at the Diamond Hotel go and see him he needs some love asap room.” The escort responded to Francis, “Papi, I'm here jose's fon is not answering. I'm here [h]aving dri[n]ks at the lobby. Call him:: (( maybe his sleeping?” Later that day, she emailed Francis, “I'm with h[i]m already heehhe.”
Court records alleges that Francis sent an email on Oct. 20, 2011, asking Sanchez to help “swing” business his way regarding a U.S. Navy ship’s need to refuel at a port in Thailand. The Navy can use “sea cards” to purchase fuel for its ships at a price negotiated by the Defense Logistics Agency for Energy, as opposed to procuring fuel at usually higher prices from the husbanding contractor. In an email from Sanchez the next day, he told Francis: “Ask and you shall receive...we worked this out this morning…” According to court records, the USS Mustin did conduct a port visit to Laem Chabang, Thailand, during which it purchased fuel from GDMA, not via “sea cards.” As a result, the USS Mustin allegedly paid more than $1 million for fuel – more than twice what the fuel would have cost through use of the “sea card.”
The criminal complaint alleges that in an alleged Dec. 2, 2011, email discussion in which Sanchez told Francis about the status of an investigation of GDMA, Francis replied: “I have inside Intel from NCIS and read all the reports. I will show you a copy of a Classified Command File on me from NCIS ha ha.”
This ongoing investigation is being conducted by NCIS, the Defense Criminal Investigative Service, the Defense Contract Audit Agency, and the Drug Enforcement Administration. The Criminal Division’s Office of International Affairs provided significant assistance in this matter, and the Royal Thai Police and the Corrupt Practices Investigation Bureau Singapore also provided law enforcement assistance. This case is being prosecuted by Assistant U.S. Attorneys Mark Pletcher and Robert Huie of the Southern District of California, and Catherine Votaw, Director of Procurement Fraud, and Brian Young, Trial Attorney, of the Criminal Division’s Fraud Section.
The details contained in the criminal complaints are allegations. The defendants are presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Those with information relating to fraud, corruption or waste in government contracting should contact the NCIS anonymous tipline at www.ncis.navy.mil or call the Department of Defense Hotline at (800) 424-9098.
Lutz, Fla., Man Convicted on Drug Distribution and Sex Trafficking ChargesRead the Press Release
Acting U.S. Attorney A. Lee Bentley III and Acting Assistant Attorney General Jocelyn Samuels of the Civil Rights Division today announced the conviction of Andrew Blane Fields, 62, of Lutz, Fla., in the Middle District of Florida on charges of possession with intent to distribute controlled substances, namely Oxycodone, Dilaudid and Morphine, and sex trafficking by force, fraud and coercion. Fields faces a mandatory minimum of 15 years in prison and a statutory maximum of life in prison on each of the five sex trafficking convictions.
In a superseding indictment returned Aug. 22, 2013, a federal grand jury charged Fields with engaging in a sex trafficking scheme whereby he controlled his victims by supplying them with highly addictive controlled substances and by using their fear of withdrawal symptoms to force them into prostitution for his profit. At trial, the government presented evidence that the defendant recruited vulnerable young women who were engaging in prostitution or performing at strip clubs and then rapidly escalated their drug use into full-blown addiction. Other evidence included the testimony of five victims of the defendant’s scheme, quantities of narcotics seized from the defendant’s possession and images of the defendant surreptitiously distributing narcotics to a hospitalized victim.
During the execution of a federal search warrant, law enforcement officers recovered thousands of prescription pills from Fields' residence. As a result, Fields was charged by criminal complaint on March 20, 2013 and by indictment on April 18, 2013.
“This defendant preyed on vulnerable members of our society--young women living in the shadows and on the margins, struggling to get by,” said Acting Assistant Attorney General Jocelyn Samuels of the Civil Rights Division. “Using false promises to lure them in, he cruelly exploited them for his own profit, destroying them with drugs and selling them for sex, using highly addictive illegal drugs to hold them under his control. Our Constitution guarantees freedom from involuntary servitude and slavery to all members of our society, and we will continue to enforce our human trafficking laws to restore freedom and dignity to victims of modern day slavery.”
“Today’s verdict provides a measure of justice for the vulnerable victims this defendant systematically forced into prostitution,” said Acting U.S. Attorney A. Lee Bentley III. “The United States Attorney’s Office and the Civil Rights Division are committed to prosecuting all human trafficking, regardless of the form it takes.”
“Sex trafficking is one of the most heinous crimes our special agents investigate and HSI is committed to protecting those who cannot protect themselves”, said Susan McCormick special agent in charge of HSI Tampa. “These cases are extremely difficult to investigate and prosecute and it would not be possible without the hard work and dedication of our special agents and law enforcement partners.”
This case was investigated by U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI), with the assistance of the Clearwater Police Department and members of the Clearwater Area Human Trafficking Task Force. It is being prosecuted by Assistant U.S. Attorney Josephine W. Thomas and Trial Attorney William E. Nolan with the Civil Rights Division's Human Trafficking Prosecution Unit.
Former Tennessee Police Officer Pleads Guilty to Assaulting Handcuffed ArresteeRead the Press Release
Christopher Eugene Reynolds, 39, a former police officer of the Selmer, Tenn., Police Department (SPD), pleaded guilty today in the U.S. District Court for the Western District of Tennessee to violating the civil rights of an arrestee, the Justice Department announced.
During his guilty plea before U.S. District Judge J. Daniel Breen, Reynolds admitted that, while using his authority as a SPD officer, he slammed a handcuffed arrestee to the floor of the McNairy Regional Hospital and struck him in the face. According to information presented in court, Reynolds acknowledged that this assault was unreasonable and did not serve a legitimate law enforcement purpose. The victim was injured as a result of the assault.
“Mr. Reynolds has admitted that he used unjustified and unlawful force against a handcuffed arrestee,” said Acting Assistant Attorney General for the Civil Rights Division Jocelyn Samuels. “The Justice Department will continue to prosecute law enforcement officers who violate the constitutional rights of individuals in their custody.”
Sentencing has been scheduled for Feb. 5, 2014. Reynolds faces a maximum statutory penalty of 10 years in prison.
This case was investigated by FBI Special Agent Christopher Miller with the assistance of the Tennessee Bureau of Investigation. The case is being prosecuted by Civil Rights Division Trial Attorney Ryan J. Murguía and Special Litigation Counsel Gerard V. Hogan, with the assistance of Assistant U.S. Attorney Victor L. Ivy of the Western District of Tennessee.
Former Mental-Health Clinic Therapist Sentenced for Role in $55 Million Medicare Fraud SchemeRead the Press Release
A former therapist for Biscayne Milieu, a Miami-based mental-health clinic, was sentenced today to serve 120 months in prison for his participation in a $55 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) Miami office made the announcement.
Jose Rojo, 39, of Miami, was sentenced by U.S. District Judge Marcia G. Cooke in the Southern District of Florida. Rojo was convicted on Aug. 7, 2013, of one count of conspiring to commit health care fraud following a one-month jury trial. In addition to the prison term, Rojo was ordered to pay more than $11 million in restitution, jointly and severally with his co-defendants, and to serve three years of supervised release.
According to the evidence at trial, Rojo and his co-conspirators caused the submission of more than $55 million dollars in fraudulent claims to Medicare through Biscayne Milieu, which purportedly operated a partial hospitalization program (PHP) – a form of intensive treatment for severe mental illness. Instead of providing PHP services, the defendants devised a scheme in which they paid patient recruiters to refer ineligible Medicare beneficiaries to Biscayne Milieu for services that were never provided. Many of the patients admitted to Biscayne Milieu were not eligible for PHP because they were chronic substance abusers, suffered from severe dementia and would not benefit from group therapy, or had no mental health diagnosis but were seeking exemptions for their U.S. citizenship applications.
The evidence at trial further showed that, as a therapist at Biscayne Milieu, Rojo conducted sham therapy sessions for patients he knew were ineligible for PHP treatment. Often Rojo showed up late for these sessions or not at all, but Medicare was still billed as if a full session took place. Rojo created fraudulent documents to help cover-up Biscayne Milieu’s massive fraud, including bogus treatment plans and phony group therapy notes that were copied from one document to the other. Deliberately inaccurate group therapy notes for different patients on different days – often years apart – were in many respects identical, including having the same descriptions of patients’ statements in group sessions and even the same misspelled words. Further, Rojo provided other therapists at the clinic with fake group therapy notes for a fee. Biscayne Milieu billed Medicare for tens of millions of dollars in PHP treatments for these patients.
Various owners, doctors, managers, therapists, patient brokers and other employees of Biscayne Milieu have also been charged with health care fraud, kickback violations, money laundering and other offenses in two indictments unsealed in September 2011 and May 2012. Biscayne Milieu, its owners, and more than 25 of the individual defendants charged in these cases have pleaded guilty or have been convicted at trial. Antonio and Jorge Macli and Sandra Huarte – the owners and operators of Biscayne Milieu – were each convicted at trial and were sentenced in April 2013 to 30 years, 25 years and 22 years in prison, respectively.
This case was investigated by the FBI with the assistance of HHS-OIG and was brought by the the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida. The case is being prosecuted by Assistant U.S. Attorneys Marlene Rodriguez and James V. Hayes of the Southern District of Florida; Hayes was formerly a trial attorney of the Fraud Section.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,500 defendants who have collectively billed the Medicare program for more than $5 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to www.stopmedicarefraud.gov.
Orlando, Fla., Area Hospice to Pay $3 Million to Resolve Allegations That It Billed Medicare for Patients Not Terminally IllRead the Press Release
Hospice of the Comforter Inc. (HOTCI) has agreed to pay $3 million to resolve allegations that it violated the False Claims Act by submitting false claims to the Medicare program for hospice services provided to patients who were not eligible for the Medicare hospice benefit, the Justice Department announced today. HOTCI is headquartered in Altamonte Springs, Fla., and provides hospice services to patients residing in Seminole, Osceola and Orange counties in Florida.
“This settlement is a result of the Justice Department’s continuing efforts to prevent the abuse of the taxpayer-funded Medicare hospice program, which is intended to provide comfort and care to terminally ill persons during the last six months of their lives,” said Assistant Attorney General for the Civil Division Stuart F. Delery. “We will pursue those who seek to misuse this important benefit for their own enrichment.”
The government alleged that between December 2005 and December 2010, HOTCI engaged in practices that resulted in billing Medicare for patients who were not terminally ill. Specifically, HOTCI allegedly directed its staff to admit all referred patients without regard to whether they were eligible for the Medicare hospice benefit, falsified medical records to make it appear that certain patients were eligible for the benefit when they were not, employed field nurses without hospice training, established procedures to limit physicians’ roles in assessing patients’ terminal status and delayed discharging patients when they became ineligible for the benefit.
As part of this settlement, HOTCI has agreed to enter into a Corporate Integrity Agreement with the Inspector General of the Department of Health and Human Services that provides for procedures and reviews to be put in place to promptly detect and prevent future conduct similar to that which gave rise to the settlement. In addition, HOTCI’s former Chief Executive Officer Robert Wilson has agreed to a three-year, voluntary exclusion from Medicare, Medicaid and other federal health care programs.
“This settlement represents a fair and appropriate resolution of this troubling matter,” said Acting U.S. Attorney for the Middle District of Florida A. Lee Bentley III. “Hospice providers in our district should be on notice that our office will do what it takes to protect our citizens from this kind of misconduct.”
“Hospice care is a sacred trust from which no provider should fraudulently profit,” said Inspector General of the U.S. Department of Health and Human Services Daniel R. Levinson. “Claiming tax dollars for people who are not terminally ill ?? and therefore ineligible for hospice care ?? cannot be tolerated.”
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 allegations settled today arose from a lawsuit filed by a former HOTCI employee, Douglas Stone, 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. Stone’s share of the recovery has not been determined.
This matter was handled by the Justice Department’s Civil Division, Commercial Litigation Branch; the U.S. Attorney’s Office for the Middle District of Florida and the Department of Health and Human Services Office of the Inspector General.
The case is United States ex rel. Stone v. Hospice of the Comforter Inc ., No. 6:11-cv-1498-ORL-22-DAB (M.D. Fla.). The claims settled by this agreement are allegations only; there has been no determination of liability.
New York Check Cashing Company and Owner Plead Guilty for Roles in $19 Million SchemeRead the Press Release
Belair Payroll Services Inc. (Belair), a multi-branch check cashing company in Flushing, N.Y., and its owner, Craig Panzera, 47, pleaded guilty today for failing to follow reporting and anti-money laundering requirements for more than $19 million in transactions, in violation of the Bank Secrecy Act (BSA). Panzera also pleaded guilty to conspiring to defraud the United States by willfully failing to pay income and payroll taxes.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Loretta Lynch of the Eastern District of New York, Acting Director John Sandweg of U.S. Immigration and Customs Enforcement (ICE), and Chief Richard Weber of the Internal Revenue Service Criminal Investigation (IRS-CI) made the announcement.
As part of the guilty plea, Belair will forfeit $3,267,252.10, and Panzera will pay restitution in the amount of $946,841.17 to the IRS. Sentencing for Belair and Panzera will be determined at a later date.
According to court records, from in or about June 2009 through June 2011, certain individuals presented to Belair’s manager and other employees checks to be cashed at Belair. The checks were written on accounts of shell corporations that appeared to be health care related, but in fact, the corporations did no legitimate business. The shell corporations and their corresponding bank accounts on which the checks were written were established in the names of foreign nationals, many of whom were no longer in the United States.
Belair accepted these checks and provided cash in excess of $10,000 to the individuals. Panzera and others at Belair never obtained any identification documents or information from those individuals. Belair filed currency transaction reports (CTRs) that falsely stated the checks were cashed by the foreign nationals who set up the shell corporations, and in certain CTRs, Belair failed to indicate the full amount of cash provided to the individuals. The individuals cashed more than $19 million through Belair during the course of the scheme. Panzera and Belair willfully failed to maintain an effective anti-money laundering program by cashing these checks.
The charges in the indictment against Panzera’s and Belair’s co-defendants remain pending and are merely accusations. Those defendants are presumed innocent unless and until proven guilty.
The cases are being investigated by agents from ICE Homeland Security Investigations and IRS-CI. These cases are being prosecuted by Trial Attorneys Claiborne W. Porter and Kevin G. Mosley of the Criminal Division’s Asset Forfeiture and Money Laundering Section’s (AFMLS) Money Laundering and Bank Integrity Unit, Trial Attorney Darrin McCullough of AFMLS’s Forfeiture Unit, and Assistant U.S. Attorney Patricia Notopoulos of the Eastern District of New York.
The Money Laundering and Bank Integrity Unit investigates and prosecutes complex, multi-district and international criminal cases involving financial institutions and individuals who violate the money laundering statutes, the Bank Secrecy Act and other related statutes. The Unit’s prosecutions generally focus on three types of violators: financial institutions, including their officers, managers and employees, whose actions threaten the integrity of the individual institution or the wider financial system; professional money launderers and gatekeepers who provide their services to serious criminal organizations; and individuals and entities engaged in using the latest and most sophisticated money laundering techniques and tools.
Irish National Pleads Guilty in New York to Crimes Relating to Illegal Trafficking of Endangered Rhinoceros HornsRead the Press Release
Michael Slattery Jr., 25, an Irish national, pleaded guilty today in federal court in Brooklyn, N.Y., to conspiracy to violate the Lacey Act in relation to illegal rhinoceros horn trafficking, announced Robert G. Dreher, Acting Assistant Attorney General for the Environment and Natural Resources Division of the Department of Justice, and Loretta E. Lynch, U.S. Attorney for the Eastern District of New York.
Slattery pleaded guilty to one count of conspiracy to violate the Lacey Act, which carries a maximum penalty of five years in prison. Under the terms of the plea agreement, any proceeds from the illegal trafficking that remain in the United States will be forfeited or put toward the criminal fine. Slattery is scheduled to be sentenced by U.S. District Judge John Gleeson in the Eastern District of New York on Jan. 10, 2014.
In the plea agreement, Slattery admitted that he, along with others, traveled throughout the United States to illegally purchase and sell endangered rhinoceros horns. Slattery was arrested in September as part of “Operation Crash,” a nationwide, multi-agency crackdown on those involved in the black market trade of endangered rhinoceros horn.
“Slattery and his co-conspirators traveled to the United States to profit from the illegal trade in black rhinoceros horns,” said Acting Assistant Attorney General Dreher. “The black rhino is a species that, without our protection, could be headed for extinction in our own time. Rhino horn trafficking is a violation of the laws enacted by Congress to protect endangered species from extinction and the Justice Department will aggressively prosecute those who engage in this egregious market.”
“Today’s guilty plea highlights our commitment to protect endangered species, like the black rhinoceros, by prosecuting those who would profit from the rhinos’ extinction,” said U.S. Attorney Lynch. “Michael Slattery traveled the world in pursuit of illicit profit from the sale of blank rhino horns. But instead of gaining a windfall by contributing to the demise of an age-old species, Slattery now faces up to five years in prison for his illegal conduct.”
“The involvement of an alleged member of an organized criminal group in rhino horn trafficking speaks to the scope, scale, and lawlessness of this problem,” said U.S. Fish and Wildlife Service Director Dan Ashe. “We will continue to work closely with the Department of Justice to crack down on profiteers whose crimes are pushing rhinos to the brink of extinction.”
“The black rhinoceros has been driven to the brink of extinction by this illicit trade,” said Special Agent in Charge James T. Hayes of the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI) in New York. “HSI, along with our partners at the U.S. Fish and Wildlife Service and the Department of Justice, stand ready to protect these beautiful creatures from the villains who would trade the rhino’s continued existence on this planet for a quick buck.”
Rhinoceros are a herbivore species of prehistoric origin and one of the largest remaining mega-fauna on earth. They have no known predators other than humans. All species of rhinoceros are protected under United States and international law, and all black rhinoceros species are endangered.
Since 1976, trade in rhinoceros horn has been regulated under the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES), a treaty signed by over 170 countries around the world to protect fish, wildlife and plants that are or may become imperiled due to the demands of international markets. Nevertheless, the demand for rhinoceros horn and black market prices have skyrocketed in recent years due to the value that some cultures have placed on ornamental carvings, good luck charms or alleged medicinal purposes, leading to a decimation of the global rhinoceros population.
Operation Crash is a continuing investigation being conducted by the Department of the Interior’s U.S. Fish and Wildlife Service in coordination with other federal and local law enforcement agencies including U.S. Immigration and Customs Enforcement’s Homeland Security Investigations. A “crash” is the term for a herd of rhinoceros. Operation Crash is an ongoing effort to detect, deter and prosecute those engaged in the illegal killing of rhinoceros and the unlawful trafficking of rhinoceros horns. The investigation is being led by the Special Investigations Unit of the FWS Office of Law Enforcement and involves a nationwide task force of agents focused on rhino trafficking.
According to the information, plea agreement and statements made during court proceedings:
Beginning in May 2010 and continuing until April 2011, Slattery, along with others, traveled within the United States to purchase rhinoceros horns, which he, along with others, then resold to private individuals or consigned to auction houses in the United States. The profits from the sale of the rhinoceros horns were distributed via cashier’s checks made out to Slattery and others. Slattery used a fictitious “Endangered Species Bill of Sale” in connection with the purchase and sale of rhinoceros horns.
In September 2010, Slattery, along with others, traveled from London to Houston, where they attempted to purchase a taxidermied black rhinoceros mount with two horns from a business in Austin, Texas. The manager of the business refused to sell the mount to the defendant because Slattery and the others did not have proof that they resided in the State of Texas. Within days of being refused, Slattery returned to the establishment in Austin, where, with the assistance of a “straw buyer” that Slattery and his co-conspirators hired, the group purchased the mount for $18,000. At the time of the sale, the purchasers were given an “Endangered Species Bill of Sale” that stated “[s]eller expressly states that the described taxidermy is an endangered species and that interstate or foreign sales, barter and trade are strictly prohibited …. [p]ursuant to [the Endangered Species Act]. Buyer has expressly stated that he/she is a current resident of the State of Texas and has no intention of participating in any form of interstate commerce involving the described taxidermy.”
Following the purchase of the mount, Slattery and his co-conspirators traveled to Flushing, N.Y., where they sold the horns from the mount and other horns they had acquired to an individual for $50,000. At the time of the sale, Slattery and his co-conspirators provided the purchaser with a false and fictitious “Endangered Species Bill of Sale.” The “Endangered Species Bill of Sale” stated that the two pair of black rhinoceros horns were purchased in August 2010. The falsified document also included a false and fictitious FWS emblem, which it did not have at the time of purchase from the establishment in Texas. Pursuant to instructions from Slattery and his co-conspirators, the purchaser paid for the horns with cashier’s checks. One check in the amount of $12,500 was made payable to Michael Slattery Jr.
U.S. Attorney Lynch and Acting Assistant Attorney General Dreher commended FWS and ICE-HSI for their outstanding work in this investigation.
The case is being handled by the U.S. Attorney’s Office for the Eastern District of New York and the Environmental Crimes Section of the U.S. Department of Justice’s Environment and Natural Resources Division. Assistant U.S. Attorney Julia Nestor and Trial Attorney Gary N. Donner of the Justice Department’s Environmental Crimes Section are in charge of the prosecution.Alabama Husband and Wife Plead Guilty to Identity Theft SchemeRead the Press Release
Mary Young and Christian Young each pleaded guilty yesterday to one count of conspiracy to defraud the United States and one count of aggravated identity theft for their role in a stolen identity refund fraud (SIRF) scheme , announced Assistant Attorney General Kathryn Keneally of the Justice Department's Tax Division and U.S. Attorney for the Middle District of Alabama George L. Beck Jr.
According to court documents, between January 2010 and June 2012, Mary Young, Christian Young, Octavious Reeves and others obtained stolen identities from individuals and used those stolen identities to file false tax returns. The false tax returns were filed from the Youngs’ residence and the conspirators directed the false tax refunds to prepaid debit cards in the names of the identity theft victims. The Youngs and others used the prepaid debit cards to withdraw the fraudulent proceeds, which allegedly totaled over $400,000.
Sentencing has not yet been scheduled. The Youngs each face a minimum sentence of two years imprisonment with a maximum of twelve years, as well as three years of supervised release, restitution and a maximum fine of $250,000, or twice the loss caused by the offense. Reeves previously pleaded guilty and will be sentenced on Feb. 19, 2013.
The case was investigated by Special Agents of the IRS - Criminal Investigation. Trial Attorneys Michael Boteler, Charles Edgar Jr. and Gregory Bailey of the Department’s Tax Division and Assistant U.S. Attorney Todd Brown are prosecuting the case.
Additional information about the Tax Division and its enforcement efforts may be found at www.justice.gov/tax.
Two Florida Residents Arrested inConnection with International Lottery ScamRead the Press Release
Two individuals charged in connection with the operation of a fraudulent lottery scheme were arrested today in south Florida following their indictment by a federal grand jury in Miami on Oct. 31, 2013, the Justice Department, U.S. Postal Inspection Service, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) and the U.S. Marshals Service announced. Althea Angela Peart and Charmaine Anne King were arrested on charges that they and their co-conspirators, some of whom operated from outside of the U.S., participated in a fraudulent lottery scheme. As alleged in the indictment, co-conspirators induced elderly victims in the U.S. to send thousands of dollars to Peart and King to cover fees for lottery winnings that victims had not won. The indictment, unsealed with Peart’s and King’s arrests, is part of the government’s crackdown on fraudulent international lottery schemes.
“Operators of foreign lottery schemes often cannot succeed without the assistance of co-conspirators in the United States,” said Stuart F. Delery, Assistant Attorney General for the Justice Department’s Civil Division. “These schemes can cause devastating financial harm to their victims, and the Department of Justice is committed to prosecuting those who engage in this criminal activity.”
From March 2012, Peart’s and King’s co-conspirators are alleged to have contacted victims in the U.S. and falsely informed them that they had won more than a million dollars in a lottery. According to the indictment, the co-conspirators sent letters to the victims from a purported sweepstakes company in the U.S. and included false and fraudulent cashier’s checks made out to the victims for thousands of dollars. As alleged in the indictment, these letters told victims to call “claims agents” who were actually co-conspirators, and when the victims called the purported claims agents, the agents informed the victims that they had to pay several thousand dollars in order to collect their purported lottery winnings. The claims agents allegedly told the victims to deposit the cashier’s checks in the victims’ bank accounts in order to purportedly cover the money they had to pay. The co-conspirators allegedly instructed the victims on how to send and wire this money to Peart and King.
The indictment charges that Peart and King each kept a percentage of the money they received from victims and sent the rest of the money to their co-conspirators. According to the indictment, because the cashier’s checks were false and fraudulent and had no value, any payments the victims sent to Peart and King were funded by their own money, and victims never received any lottery winnings.“As fraudsters from outside of the United States seek to take advantage of some of the most vulnerable in our community, they rely on co-conspirators in the United States for help,” said U.S. Attorney for the Southern District of Florida Wifredo A. Ferrer. “As I have previously stated, we will continue to vigorously pursue and prosecute those responsible for these illegal schemes.”
Peart is charged with conspiracy, eight counts of mail fraud and three counts of wire fraud and with committing these offenses via telemarketing. King is charged with conspiracy, four counts of mail fraud and three counts of wire fraud and with committing these offenses via telemarketing.
“The U.S. Postal Inspection Service is committed to investigating fraudulent lottery schemes designed to defraud innocent victims,” said U.S. Postal Inspector in Charge in Miami Ronald Verrochio. “Combating international lottery fraud is a priority of the Postal Inspection Service given that a significant amount of the money in these frauds is sent through the U.S. mail. We are actively taking steps to educate Americans about the dangers of lottery frauds.”
“These arrests show that HSI is committed to stopping individuals who prey on our senior citizens,” said Special Agent in Charge of HSI Miami Alysa D. Erichs. “We will continue to work with our international partners and other law enforcement agencies to put an end to these criminal organizations.”
“The U.S. Marshals Service is proud to be part of the team bringing scam artists such as these to justice,” said Acting U.S. Marshal Neil DeSousa. “These international lottery scams that prey on our elderly cannot be allowed to continue. The arrests of these two perpetrators are a testament to federal law enforcement’s dedication to protecting our citizens against all types of crimes.”
Assistant Attorney General Delery and U.S. Attorney Ferrer commended the investigative efforts of the U.S. Postal Inspection Service, Homeland Security Investigations and the U.S. Marshals Service. The case is being prosecuted by Assistant Director Jeffrey Steger and Trial Attorney Kathryn Drenning with the Department of Justice’s Civil Division, Consumer Protection Branch.
An indictment is merely an allegation, and every defendant is presumed innocent until proven guilty beyond a reasonable doubt.
Northern California Real Estate Investor Pleads Guilty to Bid Rigging at Public Foreclosure AuctionsRead the Press Release
A Northern California real estate investor pleaded guilty today for his role in conspiracies to rig bids and commit mail fraud at public real estate foreclosure auctions in Northern California, the Department of Justice announced.
Kuo Hsuan “Chuck” Chang, of San Francisco, entered his guilty plea in U.S. District Court for the Northern District of California in San Francisco. Felony charges were filed against Chang on Oct. 9, 2013.
Chang is the 37th individual to plead guilty or agree to plead guilty as a result of the department’s ongoing antitrust investigations into bid rigging and fraud at public real estate foreclosure auctions in Northern California.
According to court documents, Chang conspired with others not to bid against one another, but instead to designate a winning bidder to obtain selected properties at public real estate foreclosure auctions in San Francisco County, Calif. Chang was also charged with conspiring to use the mail to carry out schemes to fraudulently acquire title to selected properties sold at public auctions, to make and receive payoffs, and to divert co-conspirators’ money that would have otherwise gone to mortgage holders and others. Chang is charged with participating in these conspiracies beginning as early as October 2009 and continuing until about November 2010.
“The Antitrust Division will continue to vigorously prosecute anticompetitive schemes that compromise local markets and cause financial harm to consumers,” said Bill Baer, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. “Collusion at foreclosure auctions harmed both lenders and distressed homeowners in an already struggling real estate market, and the conspirators must be held accountable.”
As described in the charging document, the primary purpose of the conspiracies was to suppress and restrain competition and to conceal payoffs in order to obtain selected real estate offered at San Francisco County public foreclosure auctions at non-competitive prices. When real estate properties are sold at these auctions, the proceeds are used to pay off the mortgage and other debt attached to the property, with remaining proceeds, if any, paid to the homeowner. According to court documents, these conspirators paid and received money that otherwise would have gone to pay off the mortgage and other holders of debt secured by the properties, and, in some cases, the defaulting homeowner.
“We urge anyone with information regarding fraudulent anticompetitive practices at foreclosure auctions to contact the FBI or our partners at the Antitrust Division,” said FBI San Francisco Special Agent in Charge David J. Johnson. “The FBI will continue to work with our law enforcement partners and the community to root out and bring to justice those individuals who undermine the real estate market and victimize legitimate consumers.”
A violation of the Sherman Act carries a maximum penalty of 10 years in prison and a $1 million fine for individuals. The maximum fine for the Sherman Act charges may be increased to twice the gain derived from the crime or twice the loss suffered by the victims if either amount is greater than $1 million. A count of conspiracy to commit mail fraud carries a maximum sentence of 30 years in prison and a $1 million fine.
The charges against Chang are the latest filed by the department in its ongoing investigation into bid rigging and fraud at public real estate foreclosure auctions in San Francisco, San Mateo, Alameda and Contra Costa counties, Calif. These investigations are being conducted by the Antitrust Division’s San Francisco Office and the FBI’s San Francisco Office. Anyone with information concerning bid rigging or fraud related to public real estate foreclosure auctions should contact the Antitrust Division’s San Francisco office at 415-436-6660, visit www.justice.gov/atr/contact/newcase.html or call the FBI tip line at 415-553-7400.
This case was brought in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants, including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.StopFraud.gov.
**The fraud charge(s) referenced in this press release were
subsequently dismissed on the government’s motion.**
Nine Members of Violent Outlaw Motorcycle Gang ArrestedRead the Press Release
Nine members of a violent, armed, outlaw motorcycle gang were indicted and arrested today, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and U.S. Attorney Barbara L. McQuade of the Eastern District of Michigan.
The nine individuals are members of the Phantom Outlaw Motorcycle Club, which is headquartered in northwest Detroit and has chapters throughout Michigan, Ohio, and Kentucky. According to court records, the club and its members are allegedly involved in a range of criminal activity including murder and attempted murder, robbery, narcotics trafficking, the possession and sale of stolen motor vehicles and motorcycles, and witness intimidation.
The indictment charged the following individuals:
• Antonio Johnson, 39, of Detroit, charged with conspiracy to commit murder in aid of racketeering, assault with a dangerous weapon in aid of racketeering, conspiracy to commit assault with a dangerous weapon in aid of racketeering, use and carry of firearms during and in relation to a crime of violence, and felon in possession of firearms.
• Marvin Nicholson, 45, of Detroit, charged with conspiracy to commit murder in aid of racketeering, assault with a dangerous weapon in aid of racketeering, conspiracy to commit assault with a dangerous weapon in aid of racketeering, use and carry of firearms during and in relation to a crime of violence, assault of federal officers, and felon in possession of firearms.
• Raynard Brown, 37, of Detroit, charged with conspiracy to commit murder in aid of racketeering, assault with a dangerous weapon in aid of racketeering, conspiracy to commit assault with a dangerous weapon in aid of racketeering, and use and carry of firearms during and in relation to a crime of violence.
• Christopher Odum, 28, of Detroit, charged with conspiracy to commit murder in aid of racketeering.
• Roger Valdez, 28, of Pontiac, Mich., charged with conspiracy to commit murder in aid of racketeering, assault with a dangerous weapon in aid of racketeering, conspiracy to commit assault with a dangerous weapon in aid of racketeering, and use and carry of firearms during and in relation to a crime of violence.
• Brian Sorrell, 27, of Detroit, charged with conspiracy to commit murder in aid of racketeering, assault with a dangerous weapon in aid of racketeering, conspiracy to commit assault with a dangerous weapon in aid of racketeering, and use and carry of firearms during and in relation to a crime of violence.
• Brian Jackson, 46, of Detroit, charged with conspiracy to commit murder in aid of racketeering.
Two additional individuals, known at this time only by their club nicknames, have been charged with conspiracy to commit murder in aid of racketeering.
The details contained in the indictment are allegations. The defendants are presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
The arrests were made as part of the Detroit One Initiative, a collaborative effort between law enforcement and the community to reduce homicide and other violent crime in Detroit, and through the lead efforts of the CVRP (Comprehensive Violence Reduction Partnership) Task Force, which consists of representatives of the Bureau of Alcohol, Tobacco, Firearms and Explosives; Detroit Police Department; Michigan State Police; Michigan Department of Corrections; and the FBI. By working collaboratively, local, state, and federal law enforcement is striving to maximize its ability to identify and arrest the persons and groups initiating the violence in Detroit. This indictment is a tangible and significant result of this joint effort.
The case is being prosecuted by the Criminal Division’s Organized Crime and Gang Section and the U.S. Attorney’s Office for the Eastern District of Michigan in Detroit.
Los Angeles Businessman Pleads Guilty to Conspiring to Defraud the United States by Concealing Israeli Bank AccountsRead the Press Release
Defendant is Latest in a Series of Defendants Charged with Failing to Report Income from Undeclared Accounts in Israel
David Raminfard of Los Angeles pleaded guilty today in the U.S. District Court for the Central District of California to conspiracy to defraud the United States, the Justice Department and Internal Revenue Service-Criminal Investigation (IRS-CI) announced.
According to court documents, Raminfard, a U.S. citizen, maintained undeclared bank accounts at an international bank headquartered in Tel Aviv, Israel, identified in court documents as Bank A. The accounts were held in the names of nominees in order to keep them secret from the U.S. government. One of the accounts was held in the name of Westrose Limited, a nominee entity formed in the Turks and Caicos Islands. To further ensure that his undeclared accounts remained secret, Raminfard placed a mail hold on his accounts. Rather than having his account statements mailed to him, Raminfard would receive them from an international accounts manager with Bank A in Israel, who brought the statements to Los Angeles and reviewed them with Raminfard during meetings at a hotel.
In or about 2000, Raminfard began secretly using the funds in his undeclared accounts as collateral for back-to-back loans obtained from the Los Angeles branch of Bank A. Raminfard used one of the loans to purchase commercial real estate in Los Angeles. By using back-to-back loans, Raminfard was able to access his funds in Israel without the U.S. Government finding out about his undeclared accounts. These loans also enabled Raminfard to claim the interest paid on the loans as a business expense on his companies’ business tax returns, while not reporting the interest earned in Israel as income on his individual income tax returns filed with the IRS. For tax years 2005 through 2010, Raminfard failed to report approximately $521,000 in income. The highest balance in Raminfard’s undeclared accounts was approximately $3 million.
Raminfard is the latest in a series of defendants charged in the U.S. District Court for the Central District of California with conspiring to defraud the United States in connection with using undeclared bank accounts in Israel to obtain back-to-back loans in the United States.
U.S. citizens and residents who have an interest in, or signature or other authority over, a financial account in a foreign country with assets in excess of $10,000 are required to disclose the existence of such account on Schedule B, Part III, of their individual income tax returns. Additionally, U.S. citizens and residents must file a Report of Foreign Bank and Financial Reports (FBAR) with the U.S. Treasury disclosing any financial account in a foreign country with assets in excess of $10,000 in which they have a financial interest or over which they have signature or other authority.
Raminfard faces a potential maximum prison term of five years and a maximum fine of $250,000. In addition, Raminfard has agreed to pay a civil penalty to the IRS in the amount of 50 percent of the high balance of his undeclared accounts for failing to file FBARs.
Assistant Attorney General Kathryn Keneally of the Department’s Tax Division and U.S. Attorney for the Central District of California André Birotte Jr. thanked special agents of IRS-CI, who investigated the cases, Tax Division Senior Litigation Counsel John E. Sullivan and Assistant Chief Elizabeth C. Hadden, who prosecuted the cases, and Assistant U.S. Attorney Sandra A. Brown of the U.S. Attorney’s Office, who assisted with the prosecutions.
Additional information about the Tax Division and its enforcement efforts may be found at www.justice.gov/tax /.
Justice Department to Monitor Elections in Michigan, <br /> New York and OhioRead the Press Release
The Justice Department announced today that it will monitor elections on Nov. 5, 2013, in Detroit and Hamtramck, Mich.; Orange County, N.Y.; and Cuyahoga and Lorain Counties, Ohio. The monitoring is designed to ensure compliance with the Voting Rights Act, which prohibits discrimination in the election process on the basis of race, color or membership in a minority language group.
In Cuyahoga, Lorain and Orange Counties, the Department will assign federal observers from the U.S. Office of Personnel Management (OPM) to monitor polling place activities based on court orders. The observers will watch and record activities during voting hours at polling locations in these jurisdictions and Civil Rights Division attorneys will coordinate the federal activities and maintain contact with local election officials.
In addition, Justice Department personnel will monitor polling place activities in Detroit and Hamtramck. Civil Rights Division attorneys will coordinate federal activities and maintain contact with local election officials.
Each year, the department deploys federal observers from OPM, as well as departmental staff, to monitor elections across the country. To file complaints about discriminatory voting practices, including acts of harassment or intimidation, voters may call the Voting Section of the department’s Civil Rights Division at 1-800-253-3931.
Visit www.justice.gov/crt/about/vot/ for more information about the Voting Rights Act and other federal voting rights laws.
Johnson & Johnson to Pay More Than $2.2 Billion to Resolve Criminal and Civil InvestigationsRead the Press Release
WASHINGTON - Global health care giant Johnson & Johnson (J&J) and its subsidiaries will pay more than $2.2 billion to resolve criminal and civil liability arising from allegations relating to the prescription drugs Risperdal, Invega and Natrecor, including promotion for uses not approved as safe and effective by the Food and Drug Administration (FDA) and payment of kickbacks to physicians and to the nation’s largest long-term care pharmacy provider. The global resolution is one of the largest health care fraud settlements in U.S. history, including criminal fines and forfeiture totaling $485 million and civil settlements with the federal government and states totaling $1.72 billion.
“The conduct at issue in this case jeopardized the health and safety of patients and damaged the public trust,” said Attorney General Eric Holder. “This multibillion-dollar resolution demonstrates the Justice Department’s firm commitment to preventing and combating all forms of health care fraud. And it proves our determination to hold accountable any corporation that breaks the law and enriches its bottom line at the expense of the American people.”
The resolution includes criminal fines and forfeiture for violations of the law and civil settlements based on the False Claims Act arising out of multiple investigations of the company and its subsidiaries.
“When companies put profit over patients’ health and misuse taxpayer dollars, we demand accountability,” said Associate Attorney General Tony West. “In addition to significant monetary sanctions, we will ensure that non-monetary measures are in place to facilitate change in corporate behavior and help ensure the playing field is level for all market participants.”
In addition to imposing substantial monetary sanctions, the resolution will subject J&J to stringent requirements under a Corporate Integrity Agreement (CIA) with the Department of Health and Human Services Office of Inspector General (HHS-OIG). This agreement is designed to increase accountability and transparency and prevent future fraud and abuse.
“As patients and consumers, we have a right to rely upon the claims drug companies make about their products,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery. “And, as taxpayers, we have a right to ensure that federal health care dollars are spent appropriately. That is why this Administration has continued to pursue aggressively – with all of our available law enforcement tools -- those companies that corrupt our health care system.”
J&J Subsidiary Janssen Pleads Guilty to Misbranding Antipsychotic Drug
In a criminal information filed today in the Eastern District of Pennsylvania, the government charged that, from March 3, 2002, through Dec. 31, 2003, Janssen Pharmaceuticals Inc., a J&J subsidiary, introduced the antipsychotic drug Risperdal into interstate commerce for an unapproved use, rendering the product misbranded. For most of this time period, Risperdal was approved only to treat schizophrenia. The information alleges that Janssen’s sales representatives promoted Risperdal to physicians and other prescribers who treated elderly dementia patients by urging the prescribers to use Risperdal to treat symptoms such as anxiety, agitation, depression, hostility and confusion. The information alleges that the company created written sales aids for use by Janssen’s ElderCare sales force that emphasized symptoms and minimized any mention of the FDA-approved use, treatment of schizophrenia. The company also provided incentives for off-label promotion and intended use by basing sales representatives’ bonuses on total sales of Risperdal in their sales areas, not just sales for FDA-approved uses.
In a plea agreement resolving these charges, Janssen admitted that it promoted Risperdal to health care providers for treatment of psychotic symptoms and associated behavioral disturbances exhibited by elderly, non-schizophrenic dementia patients. Under the terms of the plea agreement, Janssen will pay a total of $400 million, including a criminal fine of $334 million and forfeiture of $66 million. Janssen’s guilty plea will not be final until accepted by the U.S. District Court.The Federal Food, Drug, and Cosmetic Act (FDCA) protects the health and safety of the public by ensuring, among other things, that drugs intended for use in humans are safe and effective for their intended uses and that the labeling of such drugs bear true, complete and accurate information. Under the FDCA, a pharmaceutical company must specify the intended uses of a drug in its new drug application to the FDA. Before approval, the FDA must determine that the drug is safe and effective for those specified uses. Once the drug is approved, if the company intends a different use and then introduces the drug into interstate commerce for that new, unapproved use, the drug becomes misbranded. The unapproved use is also known as an “off-label” use because it is not included in the drug’s FDA-approved labeling.
“When pharmaceutical companies interfere with the FDA’s mission of ensuring that drugs are safe and effective for the American public, they undermine the doctor-patient relationship and put the health and safety of patients at risk,” said Director of the FDA’s Office of Criminal Investigations John Roth. “Today’s settlement demonstrates the government’s continued focus on pharmaceutical companies that put profits ahead of the public’s health. The FDA will continue to devote resources to criminal investigations targeting pharmaceutical companies that disregard the drug approval process and recklessly promote drugs for uses that have not been proven to be safe and effective.”
J&J and Janssen Settle Civil Allegations of Targeting Vulnerable Patients with the Drugs Risperdal and Invega for Off-Label Uses
In a related civil complaint filed today in the Eastern District of Pennsylvania, the United States alleges that Janssen marketed Risperdal to control the behaviors and conduct of the nation’s most vulnerable patients: elderly nursing home residents, children and individuals with mental disabilities. The government alleges that J&J and Janssen caused false claims to be submitted to federal health care programs by promoting Risperdal for off-label uses that federal health care programs did not cover, making false and misleading statements about the safety and efficacy of Risperdal and paying kickbacks to physicians to prescribe Risperdal.
“J&J’s promotion of Risperdal for unapproved uses threatened the most vulnerable populations of our society – children, the elderly and those with developmental disabilities,” said U.S. Attorney for the Eastern District of Pennsylvania Zane Memeger. “This historic settlement sends the message that drug manufacturers who place profits over patient care will face severe criminal and civil penalties.”
In its complaint, the government alleges that the FDA repeatedly advised Janssen that marketing Risperdal as safe and effective for the elderly would be “misleading.” The FDA cautioned Janssen that behavioral disturbances in elderly dementia patients were not necessarily manifestations of psychotic disorders and might even be “appropriate responses to the deplorable conditions under which some demented patients are housed, thus raising an ethical question regarding the use of an antipsychotic medication for inappropriate behavioral control.”
The complaint further alleges that J&J and Janssen were aware that Risperdal posed serious health risks for the elderly, including an increased risk of strokes, but that the companies downplayed these risks. For example, when a J&J study of Risperdal showed a significant risk of strokes and other adverse events in elderly dementia patients, the complaint alleges that Janssen combined the study data with other studies to make it appear that there was a lower overall risk of adverse events. A year after J&J had received the results of a second study confirming the increased safety risk for elderly patients taking Risperdal, but had not published the data, one physician who worked on the study cautioned Janssen that “[a]t this point, so long after [the study] has been completed … we must be concerned that this gives the strong appearance that Janssen is purposely withholding the findings.”
The complaint also alleges that Janssen knew that patients taking Risperdal had an increased risk of developing diabetes, but nonetheless promoted Risperdal as “uncompromised by safety concerns (does not cause diabetes).” When Janssen received the initial results of studies indicating that Risperdal posed the same diabetes risk as other antipsychotics, the complaint alleges that the company retained outside consultants to re-analyze the study results and ultimately published articles stating that Risperdal was actually associated with a lower risk of developing diabetes.
The complaint alleges that, despite the FDA warnings and increased health risks, from 1999 through 2005, Janssen aggressively marketed Risperdal to control behavioral disturbances in dementia patients through an “ElderCare sales force” designed to target nursing homes and doctors who treated the elderly. In business plans, Janssen’s goal was to “[m]aximize and grow RISPERDAL’s market leadership in geriatrics and long term care.” The company touted Risperdal as having “proven efficacy” and “an excellent safety and tolerability profile” in geriatric patients.
In addition to promoting Risperdal for elderly dementia patients, from 1999 through 2005, Janssen allegedly promoted the antipsychotic drug for use in children and individuals with mental disabilities. The complaint alleges that J&J and Janssen knew that Risperdal posed certain health risks to children, including the risk of elevated levels of prolactin, a hormone that can stimulate breast development and milk production. Nonetheless, one of Janssen’s Key Base Business Goals was to grow and protect the drug’s market share with child/adolescent patients. Janssen instructed its sales representatives to call on child psychiatrists, as well as mental health facilities that primarily treated children, and to market Risperdal as safe and effective for symptoms of various childhood disorders, such as attention deficit hyperactivity disorder, oppositional defiant disorder, obsessive-compulsive disorder and autism. Until late 2006, Risperdal was not approved for use in children for any purpose, and the FDA repeatedly warned the company against promoting it for use in children.
The government’s complaint also contains allegations that Janssen paid speaker fees to doctors to influence them to write prescriptions for Risperdal. Sales representatives allegedly told these doctors that if they wanted to receive payments for speaking, they needed to increase their Risperdal prescriptions.
In addition to allegations relating to Risperdal, today’s settlement also resolves allegations relating to Invega, a newer antipsychotic drug also sold by Janssen. Although Invega was approved only for the treatment of schizophrenia and schizoaffective disorder, the government alleges that, from 2006 through 2009, J&J and Janssen marketed the drug for off-label indications and made false and misleading statements about its safety and efficacy.
As part of the global resolution, J&J and Janssen have agreed to pay a total of $1.391 billion to resolve the false claims allegedly resulting from their off-label marketing and kickbacks for Risperdal and Invega. This total includes $1.273 billion to be paid as part of the resolution announced today, as well as $118 million that J&J and Janssen paid to the state of Texas in March 2012 to resolve similar allegations relating to Risperdal. Because Medicaid is a joint federal-state program, J&J’s conduct caused losses to both the federal and state governments. The additional payment made by J&J as part of today’s settlement will be shared between the federal and state governments, with the federal government recovering $749 million, and the states recovering $524 million. The federal government and Texas each received $59 million from the Texas settlement.
Kickbacks to Nursing Home Pharmacies
The civil settlement also resolves allegations that, in furtherance of their efforts to target elderly dementia patients in nursing homes, J&J and Janssen paid kickbacks to Omnicare Inc., the nation’s largest pharmacy specializing in dispensing drugs to nursing home patients. In a complaint filed in the District of Massachusetts in January 2010, the United States alleged that J&J paid millions of dollars in kickbacks to Omnicare under the guise of market share rebate payments, data-purchase agreements, “grants” and “educational funding.” These kickbacks were intended to induce Omnicare and its hundreds of consultant pharmacists to engage in “active intervention programs” to promote the use of Risperdal and other J&J drugs in nursing homes. Omnicare’s consultant pharmacists regularly reviewed nursing home patients’ medical charts and made recommendations to physicians on what drugs should be prescribed for those patients. Although consultant pharmacists purported to provide “independent” recommendations based on their clinical judgment, J&J viewed the pharmacists as an “extension of [J&J’s] sales force.”
J&J and Janssen have agreed to pay $149 million to resolve the government’s contention that these kickbacks caused Omnicare to submit false claims to federal health care programs. The federal share of this settlement is $132 million, and the five participating states’ total share is $17 million. In 2009, Omnicare paid $98 million to resolve its civil liability for claims that it accepted kickbacks from J&J and Janssen, along with certain other conduct.
“Consultant pharmacists can play an important role in protecting nursing home residents from the use of antipsychotic drugs as chemical restraints,” said U.S. Attorney for the District of Massachusetts Carmen Ortiz. “This settlement is a reminder that the recommendations of consultant pharmacists should be based on their independent clinical judgment and should not be the product of money paid by drug companies.”
Off-Label Promotion of the Heart Failure Drug Natrecor
The civil settlement announced today also resolves allegations that J&J and another of its subsidiaries, Scios Inc., caused false and fraudulent claims to be submitted to federal health care programs for the heart failure drug Natrecor. In August 2001, the FDA approved Natrecor to treat patients with acutely decompensated congestive heart failure who have shortness of breath at rest or with minimal activity. This approval was based on a study involving hospitalized patients experiencing severe heart failure who received infusions of Natrecor over an average 36-hour period.
In a civil complaint filed in 2009 in the Northern District of California, the government alleged that, shortly after Natrecor was approved, Scios launched an aggressive campaign to market the drug for scheduled, serial outpatient infusions for patients with less severe heart failure – a use not included in the FDA-approved label and not covered by federal health care programs. These infusions generally involved visits to an outpatient clinic or doctor’s office for four- to six-hour infusions one or two times per week for several weeks or months.
The government’s complaint alleged that Scios had no sound scientific evidence supporting the medical necessity of these outpatient infusions and misleadingly used a small pilot study to encourage the serial outpatient use of the drug. Among other things, Scios sponsored an extensive speaker program through which doctors were paid to tout the purported benefits of serial outpatient use of Natrecor. Scios also urged doctors and hospitals to set up outpatient clinics specifically to administer the serial outpatient infusions, in some cases providing funds to defray the costs of setting up the clinics, and supplied providers with extensive resources and support for billing Medicare for the outpatient infusions.
As part of today’s resolution, J&J and Scios have agreed to pay the federal government $184 million to resolve their civil liability for the alleged false claims to federal health care programs resulting from their off-label marketing of Natrecor. In October 2011, Scios pleaded guilty to a misdemeanor FDCA violation and paid a criminal fine of $85 million for introducing Natrecor into interstate commerce for an off-label use.
“This case is an example of a drug company encouraging doctors to use a drug in a way that was unsupported by valid scientific evidence,” said First Assistant U.S. Attorney for the Northern District of California Brian Stretch. “We are committed to ensuring that federal health care programs do not pay for such inappropriate uses, and that pharmaceutical companies market their drugs only for uses that have been proven safe and effective.”
Non-Monetary Provisions of the Global Resolution and Corporate Integrity Agreement
In addition to the criminal and civil resolutions, J&J has executed a five-year Corporate Integrity Agreement (CIA) with the Department of Health and Human Services Office of Inspector General (HHS-OIG). The CIA includes provisions requiring J&J to implement major changes to the way its pharmaceutical affiliates do business. Among other things, the CIA requires J&J to change its executive compensation program to permit the company to recoup annual bonuses and other long-term incentives from covered executives if they, or their subordinates, engage in significant misconduct. J&J may recoup monies from executives who are current employees and from those who have left the company. The CIA also requires J&J’s pharmaceutical businesses to implement and maintain transparency regarding their research practices, publication policies and payments to physicians. On an annual basis, management employees, including senior executives and certain members of J&J’s independent board of directors, must certify compliance with provisions of the CIA. J&J must submit detailed annual reports to HHS-OIG about its compliance program and its business operations.
“OIG will work aggressively with our law enforcement partners to hold companies accountable for marketing and promotion that violate laws intended to protect the public,” said Inspector General of the U.S. Department of Health and Human Services Daniel R. Levinson. "Our compliance agreement with Johnson & Johnson increases individual accountability for board members, sales representatives, company executives and management. The agreement also contains strong monitoring and reporting provisions to help ensure that the public is protected from future unlawful and potentially harmful off-label marketing."
Coordinated Investigative Effort Spans Federal and State Law Enforcement
This resolution marks the culmination of an extensive, coordinated investigation by federal and state law enforcement partners that is the hallmark of the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which fosters government collaborations to fight fraud. Announced in May 2009 by Attorney General Eric Holder and Health and Human Services Secretary Kathleen Sebelius, the HEAT initiative has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation.
The criminal cases against Janssen and Scios were handled by the U.S. Attorney’s Offices for the Eastern District of Pennsylvania and the Northern District of California and the Civil Division’s Consumer Protection Branch. The civil settlements were handled by the U.S. Attorney’s Offices for the Eastern District of Pennsylvania, the Northern District of California and the District of Massachusetts and the Civil Division’s Commercial Litigation Branch. Assistance was provided by the HHS Office of Counsel to the Inspector General, Office of the General Counsel-CMS Division, the FDA’s Office of Chief Counsel and the National Association of Medicaid Fraud Control Units.
This matter was investigated by HHS-OIG, the Department of Defense’s Defense Criminal Investigative Service, the FDA’s Office of Criminal Investigations, the Office of Personnel Management’s Office of Inspector General, the Department of Veterans Affairs, the Department of Labor, TRICARE Program Integrity, the U.S. Postal Inspection Service’s Office of the Inspector General and the FBI.
One of the most powerful tools in the fight against Medicare and Medicaid financial fraud 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 department enforces the FDCA by prosecuting those who illegally distribute unapproved, misbranded and adulterated drugs and medical devices in violation of the Act. Since 2009, fines, penalties and forfeitures that have been imposed in connection with such FDCA violations have totaled more than $6 billion.
The civil settlements described above resolve multiple lawsuits filed under the qui tam, or whistleblower, provisions of the False Claims Act, which allow private citizens to bring civil actions on behalf of the government and to share in any recovery. From the federal government’s share of the civil settlements announced today, the whistleblowers in the Eastern District of Pennsylvania will receive $112 million, the whistleblowers in the District of Massachusetts will receive $27.7 million and the whistleblower in the Northern District of California will receive $28 million. Except to the extent that J&J subsidiaries have pleaded guilty or agreed to plead guilty to the criminal charges discussed above, the claims settled by the civil settlements are allegations only, and there has been no determination of liability.
Court documents related to today’s settlement can be viewed online at www.justice.gov/opa/jj-pc-docs.html.Former Corrections Officers Sentenced for Federal Civil Rights Offenses and Obstruction of Justice for Beating Death of an Inmate at Ventress Correctional Facility in AlabamaRead the Press Release
The Justice Department announced today that U.S. District Court Judge Myron H. Thompson sentenced four former corrections officers of the Alabama Department of Corrections – Michael Smith, Matthew Davidson, Joseph Sanders and Scottie Glenn – in connection with the beating death of former inmate Rocrast Mack. Smith, 39, who was convicted by a federal jury on June 25, 2013, of seven counts of civil rights violations and obstruction of justice, was sentenced to 30 years imprisonment. Davidson, 45, who pled guilty to two civil rights violations and an obstruction of justice violation, was sentenced to seven years. Sanders, 32, who pled guilty to an obstruction of justice violation, was sentenced to five years. Glenn, 30, who pled guilty to a civil rights violation and a conspiracy violation, was sentenced to five years.
The incident occurred at Ventress Correctional Facility in Clayton, Ala., on Aug. 4, 2010, and at the time of the incident Smith was a lieutenant with supervisory authority over other officers on his shift. According to the evidence presented at trial, Smith assaulted Mack in an office in the prison, repeatedly striking him with a baton, stomping on him and kicking him. The evidence also showed that Smith assaulted Mack again several minutes later in the medical unit by repeatedly stomping on Mack’s head. Mack died the following morning in a Montgomery, Ala., hospital.
“These defendants each played a role in the vicious and fatal beating of Mr. Mack, and then they lied to authorities to conceal their culpability,” said Acting Assistant Attorney General for the Department’s Civil Rights Division Jocelyn Samuels. “Their actions run completely counter to the responsibilities and trust given to law enforcement officers. The Justice Department will continue to vigorously prosecute those officers who commit such heinous criminal acts, and I hope that these sentencings help bring some measure of closure to the Mack family.”
“The majority of our corrections officers are dedicated to protecting and serving the public,” said U.S. Attorney for the Middle District of Alabama George L. Beck Jr. “These correctional officers were not so dedicated. These correctional officers savagely beat, stomped, and tortured a restrained man and then lied to protect themselves. There is no excuse for such behavior. Correctional officers walk a tough line, but they cannot cross that line into the criminal element. I hope that these sentences bring some sense of justice to the victim’s family and reinforce the notion that no one is above the law.”
This case was investigated by the Mobile, Ala., Division of the FBI in partnership with the Alabama Bureau of Investigation, and was prosecuted by Trial Attorney Patricia Sumner of the department’s Civil Rights Division and Assistant U.S. Attorney Jerusha Adams of the U.S. Attorney’s Office for the Middle District of Alabama.