District Not Recorded
The source did not name an office we could identify. These records remain unassigned rather than guessed.
Attorney General Eric Holder Announces $2.5 Million <br /> to Connecticut Law Enforcement for Costs Related to <br /> Sandy Hook School ShootingsRead the Press Release
Attorney General Eric Holder announced today that the Justice Department’s Bureau of Justice Assistance (BJA) will provide $2.5 million in funding to the Connecticut State Police, the Newtown, Conn., Police Department and their partner agencies that provided assistance in response to the shootings at Sandy Hook Elementary School last year. The funding compensates the agencies and jurisdictions for costs related to overtime, forensics and security during and in the aftermath of the crime.
“Providing support to the law enforcement agencies that responded to the horrific scene that awaited them at Sandy Hook Elementary School is one small action we can take to bring healing to a community that’s been devastated,” said Attorney General Holder. “Just over eight months after this senseless tragedy, those who lost their lives, and those who continue to grieve, remain in our thoughts and prayers.”
The funding is made available through BJA’s FY 2013 Edward Byrne Justice Assistance Grant Program and is scheduled for distribution as follows:
Connecticut State Police $663,444
Town of Newtown $602,293
Town of Monroe $882,812
Partner Agencies* $296,836* Connecticut jurisdictions of Avon, Bethel, Bloomfield, Bridgeport, Brookfield, Clinton, Coventry, Danbury, Darien, Easton, Fairfield, Glastonbury, Groton, Meriden, Middletown, New Britain, Newington, New Canaan, New Milford, Norwalk, Orange, Plainville, Redding, Ridgefield, Seymour, Shelton, Southington, Stratford, Trumball, Waterbury, Watertown, Wilton, Weston and Wolcott.
“This critical funding will compensate the Connecticut State Police and Newtown Police Department for their tireless work investigating this crime, as well as more than two dozen police departments from across the state whose officers responded to Newtown within minutes of this horrific act and, for months, helped to provide security and comfort to a courageous community,” said Acting U.S. Attorney for the District of Connecticut Deirdre M. Daly.
The Bureau of Justice Assistance is one of six components of the Office of Justice Programs (OJP) which is headed by Assistant Attorney General Karol V. Mason. OJP provides federal leadership in developing the nation's capacity to prevent and control crime, administer justice and assist victims. OJP’s six components include: 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.
For more information about OJP, please visit: www.ojp.gov.
Three Missourians Sentenced for Defrauding Consumers Seeking Immigration ServicesRead the Press Release
Three defendants who previously pleaded guilty in connection with an immigration services fraud scheme were sentenced in federal court, the Justice Department announced today. The three defendants formerly worked at Immigration Forms and Publications (IFP), a Sedalia, Mo., company that falsely represented to consumers that IFP was affiliated with the federal government and sales representatives were immigration agents, fees paid to IFP covered government filing fees for immigration documents and that IFP could speed up application processing. All three defendants pleaded guilty to mail and wire fraud charges in August 2012.
U. S. District Judge Brian C. Wimes of the Western District of Missouri sentenced Thomas Laurence, 31, to 130 months in prison; Thomas Strawbridge, 50, to 82 months in prison and Elizabeth Meredith, 25, to a year and a day in prison. In sentencing the defendants, the court found that they caused customers to lose a total of more than $400,000. In addition to prison time, the court ordered the three defendants to pay a total of $613,969 in restitution to victims.
“Immigrants who come to this country and try to play by the rules deserve fair treatment under the law – not to be bilked out of their hard-earned savings by those looking for a quick buck,” said Stuart F. Delery, Assistant Attorney General of the Justice Department’s Civil Division. “We are pleased to have worked with our law enforcement partners to bring to justice the leaders of this fraudulent operation.”
"This company exploited more than a thousand law-abiding immigrants by selling them government forms that anyone can obtain for free," said U.S. Attorney for the Western District of Missouri Tammy Dickinson. "They preyed on legal immigrants who were doing their best to follow the law, and they are being held accountable for their fraud and deceit."
According to court documents, Strawbridge founded and owned IFP, which operated in 2009 and 2010. The IFP representatives falsely represented to consumers that IFP handled excess call volume for U.S. Citizenship and Immigration Services (USCIS). The company also sold immigration forms, which are generally available at no charge from the government, to immigrants using fraudulent means. The representatives falsely told consumers that the company employed paralegals who would help customers correctly fill out the immigration forms, and that forms purchased through IFP would be processed more quickly than if consumers dealt directly with USCIS.
The IFP representatives also falsely told consumers that fees paid to IFP included government processing fees. However, the IFP employees concealed the fact that the government routinely charged processing fees that IFP customers would be required to pay in addition to IFP charges. They also concealed that a high percentage of IFP customers had complained to the company and requested refunds when they discovered that payments to IFP did not include government processing fees and that IFP sales representatives had no particular expertise in immigration matters.
The case was prosecuted by Trial Attorneys Alan Phelps and Adrienne Fowler of the Justice Department’s Consumer Protection Branch, Civil Division and Tony Gonzalez, Assistant U.S. Attorney for the Western District of Missouri. It was investigated by the FBI, the U.S. Postal Inspection Service, the Missouri Secretary of State’s Corporate Division and Securities Division and the Missouri Attorney General’s Office. The Federal Trade Commission also provided important assistance.
For information on avoiding immigration services fraud, go to the U.S. Citizenship and Immigration Services website: www.uscis.gov/avoidscams.
Pennsylvania Man Pleads Guilty in Massachusetts to Hacking into Multiple Computer NetworksRead the Press Release
A Pennsylvania man pleaded guilty today to charges stemming from his participation in a scheme to hack into computer networks and sell access to those networks.
The guilty plea was announced by Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and U.S. Attorney Carmen M. Ortiz of the District of Massachusetts.
Andrew James Miller, 23, of Devon, Penn., pleaded guilty before U.S. District Judge Mark Wolf in the District of Massachusetts to one count of conspiracy and two counts of computer intrusion.
According to court documents, from 2008 to 2011, Miller remotely hacked into a variety of computers located in Massachusetts and elsewhere, and, in some instances, surreptitiously installed “backdoors” into those computers. These “backdoors” were designed to provide future administrator-level, or “root,” access to the compromised computers. According to court documents, Miller obtained log-in credentials to the compromised computers. He and his co-conspirators then sold access to these backdoors, as well as other log-in credentials. The access sold by Miller and his co-conspirators allowed unauthorized people to access various commercial, education and government computer networks.
Judge Wolf scheduled sentencing for Nov. 19, 2013. The maximum penalty for the conspiracy count is five years in prison. One of the computer intrusion counts carries a maximum penalty of five years in prison and the other, involving intentional damage to a protected computer, carries a maximum penalty of 10 years in prison.
The case was investigated by the FBI. It is being prosecuted by Trial Attorney Mona Sedky of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney Adam Bookbinder of the U.S. Attorney’s Office for the District of Massachusetts.
MRI Diagnostic Testing Company, Imagimed LLC, and Its Former Owners <br /> and Chief Radiologist to Pay $3.57 Million to Resolve False Claims Act AllegationsRead the Press Release
New York-based Imagimed LLC, the company’s former owners, William B. Wolf III and Dr. Timothy J. Greenan, and the company’s former chief radiologist, Dr. Steven Winter, will pay $3.57 million to resolve allegations that they submitted to federal healthcare programs false claims for magnetic resonance imaging (MRI) services, the Justice Department announced today. Imagimed owns and operates fifteen MRI facilities, located primarily in New York state, under the name “Open MRI.”
Allegedly, from July 1, 2001, through April 23, 2008, Imagimed, Greenan, Wolf and Winter submitted claims to Medicare, Medicaid and TRICARE for MRI scans performed with a contrast dye without the direct supervision of a qualified physician. Since a potential adverse side effect of contrast dye is anaphylactic shock, federal regulations require that a physician supervise the administration of contrast dye when it is used for an MRI. Also, allegedly, from July 1, 2005, to April 23, 2008, Imagimed, Greenan, Wolf and Winter submitted claims for services referred to Imagimed by physicians with whom Imagimed had improper financial relationships. In exchange for these referrals, Imagimed entered into sham on-call arrangements, provided pre-authorization services without charge and provided various gifts to certain referring physicians, in violation of the Stark Law and the Anti-Kickback Statute.
“The Department of Justice is committed to guarding against abuse of federal healthcare programs,” said Stuart F. Delery, Assistant Attorney General for the Civil Division. “We will help protect patients’ health by ensuring doctors who submit claims to federal healthcare programs follow proper safety precautions at all times.”
U.S. Attorney for the Northern District of New York, Richard S. Hartunian said: “This case is an example of our commitment to using all of the remedies available, including civil actions under the False Claims Act, to ensure patient safety and combat health care fraud. Stripping away the profit motive for circumventing physician supervision requirements has both a remedial and a deterrent effect. The settlement announced today advances our critical interest in both the integrity of our health care system and the safe delivery of medical services.”
The allegations resolved by the settlement were brought in a lawsuit filed under the False Claims Act’s whistleblower provisions, which permit private parties to sue for false claims on behalf of the government and to share in any recovery. The whistleblower in this case, Dr. Patrick Lynch, was a local radiologist and will receive $565,500.
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 $14.8 billion through False Claims Act cases, with more than $10.8 billion of that amount recovered in cases involving fraud against federal health care programs.
The investigation and settlement were the result of a coordinated effort among the U.S. Attorney’s Office for the Northern District of New York; the Justice Department’s Civil Division, Commercial Litigation Branch and the Department of Health and Human Services’ Office of Inspector General.
The case is United States of America ex rel. Lynch v. Imagimed LLC, et al. (N.D. N.Y.). The claims released by the settlement are allegations only, and there has been no determination of liability.
Laboratory Operator Sentenced to 40 Months for Fabricating Industrial Wastewater ResultsRead the Press Release
Tennie White, the owner and operator of an environmental laboratory located in Jackson, Miss., was sentenced in federal court late yesterday to 40 months in prison in connection with her conviction for faking laboratory testing results and lying to federal investigators, announced Gregory K. Davis, U.S. Attorney for the Southern District of Mississippi, and Robert G. Dreher, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division.
White also was sentenced to three years of supervised release to follow her prison sentence and was ordered to pay a $1,000 fine and a $100 special assessment. White was sentenced by U.S. District Judge Henry T. Wingate at the federal courthouse in Jackson, where he also presided over the May 2013 trial of the case.
“Independent laboratories play a critical role in assisting businesses to accurately monitor and report discharges of industrial pollutants that may adversely affect the environment,” said Acting Assistant Attorney General Dreher. “Businesses cannot fulfill this important responsibility if these laboratories are not honest brokers and falsify test results and monitoring reports. This prosecution shows that fraudulent testing and reporting by laboratories will not be tolerated.”
“Americans expect their public water supply to be clean and safe to use,” said Maureen O’Mara, Special Agent in Charge of the Environmental Protection Agency’s criminal enforcement program in Mississippi. “In order to safeguard public health it is absolutely essential that governments receive accurate test results and measurements. This case demonstrates that individuals who falsify environmental records and try to mislead the government will be prosecuted and held accountable.”
White, owner, operator and manager of Mississippi Environmental Analytical Laboratories Inc., was found guilty in May 2013 of two false statement counts and one count of obstructing proceedings. Evidence at trial established that White was hired to perform laboratory testing of a manufacturer’s industrial process waste water samples and then to use those results to complete monthly discharge monitoring reports for submission to the Mississippi Department of Environmental Quality. However, for the months October to December 2008, White created discharge monitoring reports (DMRs) that falsely represented that laboratory testing had been performed on samples when, in fact, such testing had not been done. White further created a fictitious laboratory report and presented it to her client for use in preparing another DMR for January 2009. White made false statements to a federal agent during a subsequent criminal investigation.
The case was prosecuted by Trial Attorney Richard J. Powers of the Environmental Crimes Section of the Justice Department’s Environment and Natural Resources Division, and Assistant U.S. Attorney Gaines Cleveland of the U.S. Attorney’s Office for the Southern District of Mississippi.
Justice Department Sues to Shut Down South Carolina Tax Return PreparerRead the Press Release
The United States has requested the federal district court in Charleston, S.C. to permanently bar Jessica Geddis of Summerville, S.C., from preparing federal income tax returns for others, the Justice Department announced today.
According to the complaint, Geddis prepared federal income tax returns from her home and as a tax preparer at MBM Tax and Accounting Services LLC. The complaint alleges that Geddis prepared returns for herself and others that overstate income by reporting fictitious household help income. Geddis overstated her customers’ income in order to increase the amount of her customers’ refundable tax credits, including the Earned Income Tax Credit, Child Tax Credit and Making Work Pay Credit.
The complaint further alleges that Geddis directed the Internal Revenue Service (IRS) to deposit all, or a portion of, her customers’ overstated refunds into bank accounts that she controls. According to the complaint, the IRS has reviewed Geddis’ bank records and determined that she has received at least 148 fraudulent tax refunds totaling $281,678 between January 2008 and May 2012.
In the past ten years the Justice Department’s Tax Division has obtained injunctions against hundreds of tax-return preparers and tax-fraud promoters. Information about these cases is available on the Justice Department Website at www.justice.gov/tax/taxpress2013.htm.
Related Materials:
United States v. Jessica A. Geddis
Complaint for Permanent Injunction and Other ReliefJustice Department Obtains $22,000 Settlement in Housing Discrimination Lawsuit Against Mt. Washington, KY., LandlordRead the Press Release
The Justice Department announced today that Jerry L. Wilson, a Mt. Washington, Ky., landlord has agreed to pay $22,000 to resolve allegations that he violated the Fair Housing Act by discriminating against African-American apartment seekers and making statements indicating a preference for families without children for certain available apartments.
The lawsuit, filed in the U.S. District Court for the Western District of Kentucky, charges that Wilson and EME LLC, misrepresented the availability of, and refused to negotiate for the rental of, apartments at Treva Court Apartments based on race or color. The lawsuit also alleges that Mr. Wilson made statements indicating a preference for families without children to rent second floor apartments at the complex he operates, located at 272 Treva Court in Mt. Washington. The allegations are based on evidence generated by the department’s Fair Housing Testing Program, in which individuals pose as renters to gather information about possible discriminatory practices.
The consent decree resolving this matter, which is subject to approval by the U.S. District Court, imposes a $22,000 civil penalty against Wilson and EME, LLC. In addition, the consent decree enjoins the defendants from further acts of discrimination and requires Wilson to undergo fair housing training.
“Housing discrimination based on race and against families with children remains a persistent problem.” said Jocelyn Samuels, Acting Assistant Attorney General for the Justice Department’s Civil Rights Division. “The Justice Department will continue its vigorous enforcement of fair housing laws that protect the rights of individuals and families to live where they choose free from discrimination.”
The federal Fair Housing Act prohibits discrimination in housing on the basis of race, color, religion, sex, familial status, national origin and disability. More information about the Civil Rights Division and the laws it enforces is available at www.justice.gov/crt .
Man Who Threatened Synagogue in Fargo, North Dakota, Charged with Civil Rights ViolationRead the Press Release
Acting Assistant Attorney General for the Civil Rights Division Jocelyn Samuels and U.S. Attorney for the District of North Dakota Timothy Q. Purdon announced that Dominique Jason Flanigan was arraigned today on civil rights and threats charges.
Flanigan was indicted under seal by a grand jury on Dec. 12, 2012, for threatening a synagogue in Fargo, N.D. The two-count indictment charges Flanigan with issuing a threatening interstate communication and with interfering with a federally protected activity. The indictment was unsealed prior to his arraignment.
The indictment alleges that, on Jan. 4, 2011, Flanigan called Temple Beth El in Fargo, and left a voice mail message threatening the employees of the synagogue. The indictment charges that this threat intimidated and interfered with Temple Beth El employees because of their religion.
An indictment is merely an accusation and the defendant is presumed innocent unless proven guilty.
This case is being investigated by the FBI and is being prosecuted by Assistant U.S. Attorneys Lynn C. Jordheim and Megan A. Healy of the U.S. Attorney’s Office for the District of North Dakota and Trial Attorney Dana Mulhauser of the Criminal Section of the Civil Rights Division.
Justice Department Sues South Dakota Drug Manufacturer for Improperly Producing Sterile Eye DropsRead the Press Release
The government filed suit in the U.S. District Court for South Dakota against Dakota Laboratories LLC and its owner, Charles L. Voellinger, Sr., to block them from violating the Food, Drug and Cosmetic Act (FDCA) in connection with their alleged violations of Current Good Manufacturing Practices (CGMP). The alleged violations concerned problems with the manufacture of eye drops that may have caused the products to be non-sterile. The Justice Department filed the suit on behalf of the Food and Drug Administration (FDA).
“Consumers must be able to trust that drugs presented as sterile are, in fact, sterile,” said Stuart F. Delery, Assistant Attorney General for the Justice Department’s Civil Division. “We cannot take the chance that a manufacturer’s failure to establish proper controls for sterile drug production could result in products becoming contaminated, placing consumers at risk of infection and potentially serious injury.”
In conjunction with the filing of the complaint, Dakota Laboratories agreed to settle the litigation and be bound by a Consent Decree of Permanent Injunction that prohibits them from committing violations of the FDCA. The consent decree also acknowledges that Dakota Laboratories is no longer in operation, and requires that if they wish to resume manufacturing drug products in the future, the FDA first must determine that Dakota Laboratories’ manufacturing practices have come into compliance with the law. The proposed consent decree, along with the complaint, has been filed with the court and is awaiting judicial approval.
The government’s action resulted from a series of inspections of Dakota Laboratories’ Mitchell, S. D., manufacturing facility, which revealed that Dakota Laboratories failed to establish and implement appropriate procedures for preventing microbiological contamination of drug products. They allegedly lacked sufficient control over the environment in their sterile processing area to prevent products from becoming contaminated and failed to establish and implement appropriate laboratory procedures for determining whether batches of eye drops conformed to their safety specifications.
Compliance with CGMP requirements ensures that drugs meet the safety requirements of the law and have the identity, strength, quality and purity that the drugs purport to possess. FDA regulations, which establish the minimum CGMP requirements applicable to human drugs, require manufacturers to control all aspects of the processes and procedures by which drugs are manufactured to prevent the production of unsafe and ineffective products.
After the inspections of Dakota Laboratories in 2010 and 2011, FDA warned them that their conduct violated the FDCA. In 2012, a third FDA inspection documented the continuing nature of Dakota Laboratories’ CGMP violations. Consequently, the government filed its complaint and settled with Dakota Laboratories.
The complaint was filed by the Department of Justice’s Consumer Protection Branch, Civil Division; the U.S. Attorney’s Office for the District of South Dakota and FDA’s Office of the General Counsel. A complaint is merely a set of allegations that, if the case were to proceed to trial, the government would need to prove by a preponderance of the evidence.
Former Utah Chiropractor Sentenced to Prison for Tax EvasionRead the Press Release
The Justice Department and the Internal Revenue Service (IRS) announced that today Douglas R. Madsen, a former chiropractor from Ephraim, Utah, was sentenced by the U.S. District Judge Clark Waddoups to 33 months in prison and resitutition of over $500,000 following a conviction for attempted evasion of payment of income tax in the District of Utah.
On Jan. 12, 2012, a jury convicted Madsen of one count of tax evasion. According to court documents, Madsen owed approximately $1.3 million in assessed income tax, interest and penalties for the years 1995 and 1999 to 2004. Madsen’s tax debt had grown, by the trial date, to over $1.7 million, after accrued interest.
The evidence presented at trial established that Madsen used nominee trusts to conceal the ownership of numerous acres of property, ultimately causing the transfer of that property to Grand Scale Inc., a Washington state corporation of which he was the president, vice president, secretary, treasurer and chairman of the board. In addition, the evidence showed that Madsen used other entities to encumber property and cloud equity in that property through use of mortgages and Uniform Commercial Code financing statements. Madsen was previously held in civil contempt by the U.S. District Court for the District of Utah for failure to comply with court orders with respect to an IRS summons.
Assistant Attorney General for the Justice Department’s Tax Division Kathryn Keneally commended the efforts of Tax Division Trial Attorneys Jennifer R. Laraia and Leslie A. Goemaat, who prosecuted the case, and special agents of IRS – Criminal Investigation, who investigated the case.
Former Owner of Los Angeles Medical Equipment Supply Company Pleads Guilty to $2.6 Million Medicare Fraud SchemeRead the Press Release
A former owner of a Los Angeles-area medical equipment supply company pleaded guilty today to a $2.6 million Medicare fraud scheme.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; U.S. Attorney André Birotte Jr. of the Central District of California; Special Agent in Charge Glenn R. Ferry of the Los Angeles Region of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG); and Assistant Director in Charge Bill L. Lewis of the FBI’s Los Angeles Field Office made the announcement.
Akinola Afolabi, 54, of Long Beach, Calif., pleaded guilty before U.S. District Judge Philip S. Gutierrez in the Central District of California to one count of health care fraud.
According to court documents, Afolabi was the owner and president of Emmanuel Medical Supply, a durable medical equipment (DME) supply company located in Long Beach. Afolabi admitted that from approximately June 2006 through September 2009, he engaged in a scheme to commit health care fraud through the operation of Emmanuel by providing medically unnecessary power wheelchairs and other DME to Medicare beneficiaries and by submitting false and fraudulent claims to Medicare. Afolabi admitted that he obtained Medicare beneficiary information through various means, including “marketers,” whom he paid to refer Medicare beneficiaries to Emmanuel for the purpose of using that information to submit, and cause the submission of, false and fraudulent claims to Medicare on behalf of Emmanuel. Afolabi admitted knowing that the prescriptions and medical documents were fraudulent and that some of the beneficiaries did not receive the DME, yet he certified to Medicare with the submission of each claim that the DME was received and was medically necessary.
From approximately June 7, 2006, through Sept. 28, 2009, Afolabi, through Emmanuel, submitted approximately $2,668,384 in fraudulent claims to Medicare for power wheelchairs and related services, and Medicare paid Emmanuel approximately $1,490,532 on those claims.
At sentencing, scheduled for Nov. 25, 2013, Afolabi faces a maximum penalty of 10 years in prison and a $250,000 fine.
This case was investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, under supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Central District of California. This case is being prosecuted by Trial Attorney Fred Medick of the Criminal Division’s Fraud Section.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,500 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.
Former Alabama Postal Employee Pleads Guilty for His Involvement in a Fraudulent Tax Refund SchemeRead the Press Release
Antoine Green, a former U.S. Postal Service (USPS) employee, pleaded guilty today in U.S. District Court for the Middle District of Alabama to crimes related to his involvement in a stolen identity tax refund fraud scheme, the Justice Department announced.
According to court documents, between November 2011 and October 2012, Green, who was employed as a postal carrier with the USPS in Montgomery, Ala., stole at least 61 U.S. Treasury tax refund checks from his mail route. The checks, which totaled approximately $145,952, were issued by the Internal Revenue Service (IRS) in connection with fraudulent tax returns filed in the names of identity theft victims.
For his involvement in the scheme, Green pleaded guilty to one count of theft of government money and one count of theft of mail by a postal employee. He faces a maximum potential sentence of 15 years in prison and a fine of up to $500,000.
Trial Attorneys Chad Edgar and Michael Boteler of the Justice Department’s Tax Division prosecuted the case. Special Agents of IRS - Criminal Investigation and USPS Office of Inspector General conducted the investigation.
Related Materials:
United States v. Antoine Green
Plea Agreement
InformationTexas Tax Preparer Is Permanently Barred from Tax Preparation for Allegedly Falsifying Returns for Overseas Customers and Impeding AuditsRead the Press Release
The Justice Department announced that yesterday a federal court in Ft. Worth, Texas permanently barred Karena Mondrianh, of Southlake, Texas, from preparing tax returns and from operating a tax-preparation business. Mondrianh consented to entry of the preliminary injunctions without admitting the allegations against her.
In its complaint, the government alleged that Mondrianh prepared fraudulent tax returns understating customers’ income by inventing – sometimes without customers’ knowledge – false business expenses and by falsely claiming that customers’ income was exempt from tax. According to the complaint most of Mondrianh’s customers work overseas for defense contractors. The permanent injunction order was signed by Judge John H. McBryde of the U.S. District Court for the Northern District of Texas.
The complaint further alleged that Mondrianh provided false information to the Internal Revenue Service (IRS) in improper attempts to delay IRS audits of customers. She also allegedly urged a customer to lie to an IRS agent in order to forestall an IRS audit. For more information about this complaint visit www.justice.gov/tax/2013/txdv13690.htm .
Return preparer fraud is one of the IRS’s Dirty Dozen Tax Scams for 2013 , which can be viewed at www.irs.gov/uac/Newsroom/IRS-Releases-the-Dirty-Dozen-Tax-Scams-for-2013 . In the past decade, the Justice Department’s Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers. Information about these cases is available on the Justice Department website at www.justice.gov/tax/taxpress2013.htm.
Big West Oil to Pay Penalty and Spend $18 Million on Emission Controls to Resolve Clean Air Act Violations at North Salt Lake RefineryRead the Press Release
Big West Oil LLC has agreed to pay a $175,000 penalty and to spend approximately $18 million to install emission controls at its refinery in North Salt Lake, Utah, announced the Department of Justice and the U.S. Environmental Protection Agency (EPA) today. Big West Oil will also invest $253,000 to improve the monitoring and management of potential releases of hydrofluoric acid at the facility.
Today’s agreement resolves alleged violations of key provisions of the Clean Air Act at the refinery, including requirements associated with the Prevention of Significant Deterioration and New Source Performance Standards.
When fully implemented, the controls and requirements under the agreement will reduce emissions of sulfur dioxide (SO2) by approximately 158 tons per year (tpy), nitrogen oxides (NOx) by approximately 32 tpy, and particulate matter (PM) by approximately 36 tpy. Additional reductions of volatile and hazardous pollutants, such as benzene, are expected as a result of compliance with leak detection and repair requirements.
Sulfur dioxide and nitrogen oxides contribute to ground-level ozone, acid rain and the degradation of terrestrial and aquatic ecosystems and can also irritate the lungs and contribute to respiratory illnesses. Fine particle pollution contains microscopic solids and liquid droplets that can penetrate deep into the lungs and cause significant lung and heart damage.
“This settlement will result in substantial reductions in harmful air pollution and, building on previous settlements with area refineries, marks another step forward in improving the quality of air Utahns breathe in the Salt Lake City area,” said Robert G. Dreher, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. “Big West Oil will be required to install advanced technology pollution controls that will benefit the health and environment of its neighbors and future generations.”
“EPA continues to secure significant settlements with refineries that benefit public health and improve air quality in our communities,” said EPA Regional Administrator Shaun McGrath. “Today’s agreement will help bring Big West Oil’s refinery up to date with industry standards to protect the environment.”
Today’s settlement requires Big West Oil to install a state-of-the-art flue gas filter system to control emissions of PM and to place ultra-low NOx burners on four heaters and boilers. The company will also undertake measures to reduce SO2 emissions from the refinery by, among other things, restricting hydrogen sulfide (H2S) in fuel gas and installing and operating a caustic scrubber system at the sulfur recovery plant.
Additionally, Big West Oil has agreed to make numerous upgrades to its leak detection and repair program, including the installation of low-leaking valves, and to enhance its waste operations to minimize or eliminate fugitive benzene emissions. The cost of the measures to be taken by the refinery is estimated at $18 million.
In addition, the company will spend $253,000 on a supplemental environmental project to install a laser detection system around the perimeter of the Hydrofluoric Acid Alkylation Unit that will improve the detection and response to releases of potentially hazardous acid. This system will reduce emissions and enhance safety for refinery workers and nearby communities.
The reduction in pollutants will benefit communities near the refinery, which include significant minority and low-income populations. The refinery is also located in an area designated as nonattainment for the federal 24-hour standard for fine particles (PM2.5).
Under the PSD permitting requirements, certain large industrial facilities making modifications that increase air pollutant emissions are required to install state-of-the-art air pollution controls. EPA investigations in various industries, including petroleum refining, reveal that many facilities fail to install pollution controls after modifications, causing them to emit pollutants that can impact air quality and public health. The Clean Air Act’s New Source Performance Standards require additional control measures at refineries. Enforcing these requirements reduces air pollution and ensures that facilities that are complying with the requirements are not at a competitive disadvantage.
Since March 2000, the EPA has entered into 31 settlements with companies that refine greater than 90 percent of the domestic petroleum refining capacity. These settlements cover 107 refineries in 32 states and territories. Once the settlements are fully implemented, the companies will have reduced emissions of NOx, SO2, and other pollutants by more than 360,000 tons per year. The settling refiners have invested or will invest more than $6.5 billion in new pollution control technologies and have paid more than $93 million in penalties. In addition, the settlements reached to date account for more than $80 million in supplemental environmental projects.
The consent decree was lodged in U.S. District Court for the District of Utah. A copy of the consent decree is available on the Department of Justice website at: www.justice.gov/enrd/Consent_Decrees.html.For more information on the Clean Air Act: www.epa.gov/air/caa/.
Alleged Members of Violent Loan Sharking and Illegal Gambling Organization Charged in PhiladelphiaRead the Press Release
An indictment was unsealed today charging nine people in a loan sharking and illegal gambling ring allegedly run out of several Philadelphia businesses.
The charges were announced today by Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Zane David Memeger of the Eastern District of Pennsylvania and Edward J. Hanko, Special Agent in Charge of the FBI’s Philadelphia Division.
Ylli Gjeli, 48, Fatimir Mustafaraj, 41, George Markakis, 43, Gezim Asllani, 34, Rezart Rahmi Telushi, 40, Eneo Jahaj, 26, and Ardit Pone, 35, all of Philadelphia; Erion Murataj, 35, of Huntingdon Valley, Penn.; and Brian Jackson, 35, of Harleysville, Penn., were arrested this morning. The defendants are named in an indictment charging racketeering conspiracy, racketeering collection of unlawful debt, making extortionate extensions of credit, collections of extensions of credit by extortionate means, operating an illegal gambling business and possession of a firearm in furtherance of a crime of violence.
“The indictment unsealed today charges nine defendants with operating a criminal enterprise built on illegal gambling and a violent extortion racket,” said Acting Assistant Attorney General Raman. “The Justice Department will not stand by as criminal organizations victimize our communities. Today’s charges demonstrate our ongoing commitment to working alongside our federal, state and local counterparts to root out organized crime.”
“The indictment charges the defendants with running a violent loan sharking and gambling enterprise, using intimidation, threats and actual violence as part of their illegal business,” said U.S. Attorney Memeger. “We will not tolerate this type of criminal activity that preys upon financial weakness and threatens the physical safety of the individuals in debt and their innocent family members.”
“The defendants allegedly victimized people twice over,” said FBI Special Agent in Charge Hanko. “They provided loans at outrageous interest rates to those unable to obtain loans from traditional sources and then used threats and violence to collect on those illegal loans. Today's arrests demonstrate the FBI’s continued commitment to ridding Philadelphia of organized crime, wherever we find it.”“Individuals who engage in this type of financial fraud should know they will not go undetected and will be held accountable,” said Special Agent in Charge of Internal Revenue Service-Criminal Investigation (IRS-CI) Akeia Conner. “IRS Criminal Investigation is committed to ‘following the money trail’ to ensure that those who engage in these illegal activities are vigorously investigated and brought to justice.”
According to the indictment, the defendants and their associates used businesses located in Philadelphia – including the Lion Bar, Blackbird Café, “Ylli’s 2 Brothers,” First England Pizza and various coffee shops, among others – to conduct the enterprise’s loan sharking activities and illegal gambling business. The defendants allegedly generated money by making and collecting on loans with usurious rates of interest; using intimidation, threats and violence to make and collect on loans; and making loans to betting customers whose debts were incurred through the enterprise’s illegal gambling business.
Members and associates of the enterprise allegedly cultivated their reputation for violence by threatening customers with dangerous weapons such as a firearm or hatchet; using implied threats and intimidation; telling customers that if they did not pay their debts someone would kill them, break their legs or physically harm them or their family members in some other way; and physically assaulting subordinate members and associates. For example, the indictment alleges that Gjeli asked a customer why he had come to the basement of the Lion Bar. He then grabbed a hatchet with one hand, grabbed the customer’s arm with the other hand and slammed the hatchet onto the table right after the customer pulled his hand away. It is further alleged that defendant Gjeli placed a gun to the same customer’s head and threatened him.
It is further alleged that the defendants attempted to conceal the existence and operations of the enterprise from law enforcement by: limiting their discussions of criminal activities when on the phone, using cryptic and coded language to describe criminal activities, such as “pizza” to describe a loan; conducting pat-downs and body searches of customers to check for weapons and recording devices; and conducting the enterprise’s transactions primarily in cash.
According to the indictment, Gjeli was a leader and “boss” of the organization; Mustafaraj, aka “Tony,” was a leader and “muscle.” Both allegedly directed other members in the loan sharking activities and illegal gambling business, approved loans, used intimidation and threats of violence against customers, collected weekly loan payments, physically assaulted subordinate members and their associates, supervised the illegal gambling business, provided cash to pay customer’s gambling wins and otherwise financed the gambling business, collected gambling debts and made loans to customers whose debts were incurred through the illegal gambling business. Markakis, aka “George the Greek” and “Fat George,” was allegedly a leader of the enterprise who directed other members in the illegal gambling business. Murataj, aka “Ben” and “Paul,” and Asllani, aka “Sam,” were allegedly “collectors” who assisted Gjeli and Mustafaraj in making loans and regularly collected weekly loan payments from customers. Telushi, aka “Luigi,” was allegedly a “collector” who regularly collected weekly loan payments from customers. Jahaj, aka “Nimo,” Jackson, aka “Mark,” and Pone were allegedly “bookies” who operated parts of the illegal gambling business and regularly collected gambling debts. Jahaj and Jackson also allegedly set up and administered online accounts to facilitate customer betting and used the enterprise’s loan sharking activities to convert the gambling debts to loans.
If convicted of all charges, Gjeli and Mustafaraj face a maximum sentence of life in prison. The remaining defendants each face a maximum sentence of 20 years in prison.
An indictment is an accusation, and defendants are presumed innocent unless and until proven guilty.
The case was investigated by the FBI, IRS-CI, U.S. Immigration and Customs Enforcement (ICE) – Homeland Security Investigations (HSI), Pennsylvania State Police, Montgomery County, Penn., Detectives and the New Jersey State Police. It is being prosecuted by Assistant U.S. Attorney Salvatore L. Astolfi and Trial Attorney Jerome Maiatico of the Criminal Division’s Organized Crime and Gang Section.
Related Materials:
Indictment
Texas-Based School Chain to Pay Government $3.7 Million for Submitting False Claims for Federal Student Financial AidRead the Press Release
ATI Enterprises Inc. will pay the government $3.7 million to resolve False Claims Act allegations that it falsely certified compliance with federal student aid programs’ eligibility requirements and submitted claims for ineligible students, the Justice Department announced today.
“Federal financial aid is meant to help students obtain a quality education from an eligible institution, and the Department of Justice is committed to ensuring colleges comply with the rules to make certain that happens,” said Stuart F. Delery, Assistant Attorney General for the Civil Division.
Allegedly, ATI Enterprises knowingly misrepresented to the Texas Workforce Commission and to the Accrediting Commission of Career Schools and Colleges its job placement statistics to maintain its state licensure and accreditation. To participate in federal student aid programs, as authorized by Title IV of the Higher Education Act of 1965, as amended (Title IV), schools must enter into a contract with the Secretary of Education called a Program Participation Agreement, in which they agree to a number of terms. For example, if an institution advertises its job placement rates as a means of attracting students to enroll, it must make available to prospective students its most recent and accurate employment statistics to substantiate the truthfulness of its advertisements. The government alleged that, by misrepresenting its job placement statistics, ATI Enterprises fraudulently maintained its eligibility for federal financial aid under Title IV.
The government further alleged that ATI employees engaged in fraudulent practices to induce students to enroll and maintain their enrollment in the schools. This falsely increased the schools’ enrollment numbers, and consequently, the amount of federal dollars they received at the expense of taxpayers and students, who incurred long-term debt.
“Misuses of the federal student aid system must not be tolerated, for the sake of the taxpayers and of the innocent individuals who are seeking a quality education,” said Sarah R. Saldaña, U.S. Attorney for the Northern District of Texas, where some of the ATI campuses involved in the lawsuit are located.
Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida said: “Federal financial aid is there to help students attain their dreams and goals, and misuse of these funds to increase corporate profits is unacceptable. We are committed to ensuring that federal student aid is used for the benefit of students.”
The settlement amount will be paid from funds supporting three letters of credit that ATI provided to the Department of Education. In addition to the False Claims Act settlement, the Department of Education will disburse from the letter of credit funds $2 million for student loan refunds in relation to cases students filed against ATI in Texas state courts and other related arbitrations.
“Federal student aid exists so that students can make the dream of a higher education a reality. That’s why misuse in any way of these vital funds cannot be tolerated,” said Kathleen Tighe, Inspector General of the U.S. Department of Education. “I’m proud of the work of OIG special agents for holding ATI Enterprises accountable and for protecting the integrity of federal education dollars.”
The settlement resolves allegations made in two separate complaints against ATI Enterprises Inc., and related entities filed under the False Claims Act’s qui tam, or whistleblower, provisions, which permit a private individual to file suit for false claims to the government and to share in any recovery. The first complaint, U.S. ex rel. Aldridge, et al. v. ATI Enterprises Inc., et al., was filed in July 2009 in the U.S. District Court for the Northern District of Texas. The second complaint, U.S. ex rel. Ramirez-Damon v. ATI Enterprises Inc., was filed in July 2011 in the U.S. District Court for the Southern District of Florida.
This matter was investigated by the Commercial Litigation Branch of the Justice Department’s Civil Division, the U.S. Attorney’s Office for the Northern District of Texas, the U.S. Attorney’s Office for the Southern District of Florida, and the Department of Education’s Office of Inspector General and Office of General Counsel. The claims settled by this agreement are allegations only, and there has been no determination of liability.
Statement of the Attorney General on Resignation of U.S. Attorney for the Eastern District of Virginia Neil H. MacBrideRead the Press Release
Attorney General Eric Holder issued the following statement today on the resignation of U.S. Attorney for the Eastern District of Virginia Neil H. MacBride:
“Throughout his tenure as United States Attorney for the Eastern District of Virginia, Neil has worked tirelessly to make a lasting difference for Americans across – and far beyond – his district.
“At every turn, he has exemplified the highest standards of excellence, integrity, and professionalism. He has distinguished himself as an exceptional leader, a committed public servant, and a brilliant attorney – handling complicated cases with extraordinary skill.
“Over the many years we have worked together, I’ve always been grateful for Neil’s dedicated service, his personal friendship, and his principled stewardship of our nation’s justice system. I am certain that his enduring contributions, his many achievements, and his fine example will guide the men and women who serve the Eastern District for years to come. And I wish him all the best as he takes the next steps in his already remarkable career.”
Justice and Education Departments Announce New Research Showing Prison Education Reduces Recidivism, Saves Money, Improves EmploymentRead the Press Release
Attorney General Eric Holder and Secretary of Education Arne Duncan today announced research findings showing that, on average, inmates who participated in correctional education programs had 43 percent lower odds of returning to prison than inmates who did not. Each year approximately 700,000 individuals leave federal and state prisons; about half of them will be reincarcerated within three years. The research, funded by the Justice Department’s Bureau of Justice Assistance, was released today by the RAND Corporation.
“These findings reinforce the need to become smarter on crime by expanding proven strategies for keeping our communities safe, and ensuring that those who have paid their debts to society have the chance to become productive citizens,” said Attorney General Holder. “We have an opportunity and an obligation to use smart methods – and advance innovative new programs – that can improve public safety while reducing costs. As it stands, too many individuals and communities are harmed, rather than helped, by a criminal justice system that does not serve the American people as well as it should. This important research is part of our broader effort to change that.”
The findings, from the largest-ever analysis of correctional educational studies, indicate that prison education programs are cost effective. According to the research, a one dollar investment in prison education translates into reducing incarceration costs by four to five dollars during the first three years after release, when those leaving prison are most likely to return.
“Correctional education programs provide incarcerated individuals with the skills and knowledge essential to their futures,” said Secretary of Education Duncan. “Investing in these education programs helps released prisoners get back on their feet—and stay on their feet—when they return to communities across the country.”
With funding from The Second Chance Act (P.L. 110-199) of 2007, the RAND Corporation’s analysis of correctional education research found that employment after release was 13 percent higher among prisoners who participated in either academic or vocational education programs than among those who did not. Those who participated in vocational training were 28 percent more likely to be employed after release from prison than those who did not receive such training.
The report is a collaborative effort of the Departments of Justice and Education, two of 20 federal agencies that make up the federal interagency Reentry Council. The Reentry Council’s members are working to make communities safer by reducing recidivism and victimization; assisting those who return from prison and jail in becoming contributing members of their communities; and saving taxpayer dollars by lowering the direct and collateral costs of incarceration. Attorney General Holder chairs the Reentry Council which he established in January 2011.
To view the research, please visit: www.bja.gov/Publications/RAND_Correctional-Education-Meta-Analysis.pdf.
For more information about the federal interagency Reentry Council, please visit: http://csgjusticecenter.org/nrrc/projects/firc/.Justice Department to File New Lawsuit Against State of Texas over Voter I.D. LawRead the Press Release
The Department of Justice announced today that it will file a new lawsuit against the State of Texas, the Texas Secretary of State, and the Director of the Texas Department of Public Safety over the State’s strict voter photo identification law (SB 14). The United States’ complaint seeks a declaration that SB 14 violates Section 2 of the Voting Rights Act, as well as the voting guarantees of the Fourteenth and Fifteenth Amendments to the United States Constitution.
Separately, the Department is filing a motion to intervene as a party and a complaint in intervention against the State of Texas and the Texas Secretary of State in the ongoing case of Perez v. Perry (W.D. Tex.), which concerns the state’s redistricting laws. The United States had already filed a statement of interest in this case last month. Today’s action represents a new step by the Department in this case that will allow the United States to formally present evidence about the purpose and effect of the Texas redistricting plans.
“Today’s action marks another step forward in the Justice Department’s continuing effort to protect the voting rights of all eligible Americans,” said Attorney General Eric Holder. “We will not allow the Supreme Court’s recent decision to be interpreted as open season for states to pursue measures that suppress voting rights. The Department will take action against jurisdictions that attempt to hinder access to the ballot box, no matter where it occurs. We will keep fighting aggressively to prevent voter disenfranchisement. We are determined to use all available authorities, including remaining sections of the Voting Rights Act, to guard against discrimination and, where appropriate, to ask federal courts to require preclearance of new voting changes. This represents the Department’s latest action to protect voting rights, but it will not be our last.”
In the voter ID lawsuit, the United States’ complaint contends that SB 14 was adopted with the purpose, and will have the result, of denying or abridging the right to vote on account of race, color, or membership in a language minority group. The complaint asks the court to prohibit Texas from enforcing the requirements of its law, and also requests that the court order bail-in relief under Section 3 of the Voting Rights Act. If granted, this would subject Texas to a new preclearance requirement.
In the Department’s other filing announced today, the United States seeks a declaration that Texas’s 2011 redistricting plans for the U.S. Congress and the Texas State House of Representatives were adopted with the purpose of denying or abridging the right to vote on account of race, color, or membership in a language minority group in violation of Section 2, as well as the voting guarantees of the Fourteenth and Fifteenth Amendments to the United States Constitution. The complaint also requests that the court order bail-in pursuant to Section 3(c) of the Voting Rights Act, to remedy persistent, intentional discrimination in voting within the State of Texas.
“The Department of Justice will use all the tools it has available to ensure that each citizen can cast a ballot free from impermissible discrimination,” said Jocelyn Samuels, Acting Assistant Attorney General for the Justice Department’s Civil Rights Division. “The right to the franchise is one of the most fundamental promises of American democracy.”
If the federal courts in either the redistricting or voter identification cases find that the State of Texas should be covered by Section 3(c), then the State would be required to submit voting changes to the U.S. Attorney General or to the federal court for review prior to implementation to ensure that the changes do not have a discriminatory effect or a discriminatory purpose. The Department has previously participated as amicus in the Perez case, and last month advised the federal court in Texas that the Department believed the imposition of a new preclearance requirement on Texas under Section 3(c) of the Voting Rights Act was appropriate. Today’s filing asks the Court to allow the Department to participate as a party in further proceedings on the question of whether Texas should be made subject to Section 3(c).
A federal court in the District of Columbia has previously held that Texas had failed to meet its burden of proving that its 2011 redistricting plans and its 2011 voter identification law were not discriminatory under Section 5 of the Voting Rights Act. These decisions were vacated after the Supreme Court’s June decision in Shelby County v. Holder. The Supreme Court’s decision left unaffected the non-discrimination requirements of Section 2 of the Voting Rights Act, as well as the bail-in provisions of Section 3 of the Voting Rights Act, and today’s filings seek to enforce those important protections.
The filings in the Texas redistricting and Texas voter identification matters will be available on the Civil Rights Division’s website later today. More information about the Voting Rights Act and other federal voting laws is available on the Department of Justice website at www.justice.gov/crt/about/vot/. Complaints about discriminatory voting practices may be reported to the Voting Section of the Justice Department’s Civil Rights Division at 1-800-253-3931.
Related Materials:
Texas ID Complaint
Motion to Intervene (Western District of Texas)
Motion to Intervene Exhibit 1Houston Investment Manager Pleads Guilty in Utah for Role in $72 Million Fraud SchemeRead the Press Release
Robert Andres, 62, an investment manager based in Houston, pleaded guilty yesterday in federal court in Salt Lake City for his role in a $72 million investment fraud scheme.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney David B. Barlow for the District of Utah, Special Agent in Charge Mary Rook of the FBI’s Salt Lake City Field Office, and Special Agent in Charge Paul A. Camacho of the Internal Revenue Service-Criminal Investigation (IRS-CI) Las Vegas Field Office made the announcement.
Andres pleaded guilty on Aug. 21, 2013, to one count of wire fraud. He faces a maximum penalty of 20 years in prison and a fine of $250,000 when he is sentenced on Jan. 7, 2014.
According to the indictment and other publicly filed documents, Andres operated Winsome Investment Trust, an investment entity, and served as its sole manager, attorney and trustee. From October 2005 until at least January 2011, Andres recruited investors for Winsome by misrepresenting Winsome’s assets and asset allocation and the way in which funds were invested.
Between October 2005 and April 2007, Andres raised more than $39 million from Winsome investors by disseminating false and misleading Winsome balance sheets and by representing to investors that Andres would invest all of their funds in a trading program or a mostly automated trading business.
According to publicly filed documents, between April 2007 and January 2011, Andres used false and misleading information to raise an additional $32 million from new investors. Furthermore, Andres failed to disclose that new investors’ funds would be used to pay earlier investors. In addition, Andres used new investor funds to make purported “profit” payments to earlier investors to create the false impression that Winsome was profitable. During this period, Andres misappropriated approximately $2.2 million in investor proceeds for personal use, including hotel bills and living expenses.
This case was investigated by the FBI’s Salt Lake City Field Office and IRS-CI Las Vegas Field Office. The department thanks the Commodity Futures Trading Commission and the Securities and Exchange Commission for their assistance in the investigation. The case is being prosecuted by Trial Attorney Thomas B.W. Hall of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Jason R. Burt and Mark Y. Hirata for the District of Utah.Florida Woman Sentenced for Role in <br /> Reverse Mortgage Fraud SchemeRead the Press Release
A Miami title agent and former mortgage broker was sentenced today for her role in a reverse mortgage loan 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, and Special Agent in Charge Lester Fernandez of the U.S. Department of Housing and Urban Development, Office of Inspector General (HUD-OIG) made the announcement after sentencing by Senior Judge Richard W. Goldberg, sitting by designation in the Southern District of Florida.
Yesenia Pouparina, aka “Yesenia Campos,” 42, was sentenced today to 46 months in prison, followed by three years of supervised release, and was ordered to pay $207,810 in restitution. Pouparina was convicted in February 2013 of four counts of wire fraud and one count of mail fraud.
According to court documents and evidence presented at trial, Pouparina, a licensed title agent in the state of Florida, sought to obtain a reverse mortgage loan worth more than $400,000 on her own property in the name of her mother, an individual who failed to meet the requirements of the Home Equity Conversion Mortgage (HECM) program. She submitted a false loan application and doctored records in support of that application, misrepresenting her mother’s eligibility to participate in the program. Pouparina acted as the title agent for the loan and disbursed the loan proceeds directly to her own personal bank accounts. Pouparina also enriched herself by collecting fees generated by the loan, and further profited by using the loan proceeds in connection with her business as a hard-money lender in other mortgage deals.
Following Pouparina’s conviction on the fraud counts, the jury also found forfeitable three bank accounts controlled by the defendant, which were seized by the government during the course of the investigation.
This case was investigated by HUD-OIG. Trial Attorney Sandra L. Moser of the Criminal Division’s Fraud Section prosecuted the case with assistance from the U.S. Attorney’s Office for the Southern District of Florida.
Today’s conviction is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF), which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorney’s offices and state and local partners, it is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants, including more than 2,900 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
United States and the Commonwealth of Kentucky Reach Agreement with AK Steel Corporation to Resolve Clean Air Act ViolationsRead the Press Release
The United States and the Commonwealth of Kentucky have reached a settlement with the AK Steel Corporation (AK Steel) in Ashland, Ky., resolving alleged violations of the Clean Air Act, AK Steel’s title V permit, and the Kentucky State Implementation Plan, announced the Department of Justice and the U.S. Environmental Protection Agency (EPA).
Under the terms of settlement, AK Steel will pay a civil penalty of $1.65 million, of which $25,000 will be paid to the Commonwealth of Kentucky, for the alleged violations that occurred at AK Steel’s former coke production facility in Ashland. AK Steel shut down the coke plant on June 21, 2011. Coke is used as a carbon source and as a fuel to heat and melt iron ore at steel making facilities.
Although AK Steel closed the plant involved in this enforcement action, AK Steel is currently operating the Ashland West Works facility a few miles away from the former coke plant. Under the agreement, AK Steel has agreed to spend at least $2 million on state projects to reduce particulate matter emissions at the Ashland West Works facility.
“This settlement holds AK Steel accountable for years of violations at its now closed coke plant in Ashland,” said Robert G. Dreher, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. “As a result of this agreement, state projects to reduce particulate matter emissions at the Ashland West Works facility will continue to improve air quality for area residents for many years to come.”
“This settlement promotes a healthier environment for our citizens and represents a just resolution of this matter,” said U.S. Attorney for the Eastern District of Kentucky Kerry B. Harvey. “We are committed to the effective enforcement of the environmental laws designed to protect the health of our people”
“We are proud to join with our partners in the Commonwealth of Kentucky in this step toward cleaner air and better health for the citizens of Ashland,” said Stan Meiburg, EPA Acting Regional Administrator in Atlanta.
The consent decree was lodged in the U.S. District Court for the Eastern District of Kentucky. Notice of the lodging of the consent decree will appear in the Federal Register allowing for a 30-day public comment period before the consent decree can be entered by the court as final judgment. The consent decree will available for viewing at www.justice.gov/enrd/Consent_Decrees.html
Two Plead Guilty to Involvement in Aryan Brotherhood of Texas Racketeering MurderRead the Press Release
An Aryan Brotherhood of Texas (ABT) gang member and an ABT associate have pleaded guilty to charges related to the May 2008 murder of Mark Davis Byrd Sr. in Atascosa County, Texas.
The guilty pleas were announced today by Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and U.S. Attorney Kenneth Magidson of the Southern District of Texas.
Shane Gail McNiel, aka “Dirty,” 34, of San Antonio, pleaded guilty today before U.S. District Judge Sim Lake in the Southern District of Texas to the charge of accessory after the fact in the murder of Byrd. Destiny Nicole Feathers, 24, of Jourdanton, Texas, pleaded guilty to the same offense on Aug. 14, 2013.
According to information presented in court, McNiel was an ABT member and Feathers was associated with the gang, a powerful race-based, statewide organization that operates inside and outside of state and federal prisons throughout Texas and elsewhere in the United States. According to court documents, Byrd, an ABT prospect, was murdered by Jim Flint McIntyre, aka “Q-Ball,” Michael Dewayne Smith, aka “Bucky,” and another ABT gang member for allegedly stealing drugs he was ordered to deliver to a customer on behalf of the ABT. According to court documents, Byrd was murdered as a result of a “discipline” ordered by Frank Lavell Urbish, aka “Thumper,” and his superiors. Byrd’s body was discovered in Atascosa County on May 4, 2008. McIntyre, Smith and Urbish each pleaded guilty in 2011 to the racketeering murder of Byrd.
According to their plea agreements, McNiel and Feathers helped hide a shotgun that they knew had been used to murder Byrd. Following the murder, Urbish and Feathers drove to McNiel’s house with the shotgun wrapped in a sheet and gave it to McNiel who then hid the shotgun in a metal shed behind his house. According to court documents, Feathers further assisted McIntyre by disposing of Byrd’s bloody clothing.
According to court documents, the ABT was established in the early 1980s within the Texas prison system. The gang modeled itself after and adopted many of the precepts and writings of the Aryan Brotherhood, a California-based prison gang that was formed in the California prison system during the 1960s. While the ABT was at its inception primarily concerned with the protection of white inmates and white supremacy/separatism, over time the ABT has expanded its criminal enterprise to include illegal activities for profit.
Court documents allege that the ABT enforced its rules and promoted discipline among its members, prospects and associates through murder, attempted murder, conspiracy to murder, arson, assault, robbery and threats against those who violate the rules or pose a threat to the enterprise. Members, and oftentimes associates, were required to follow the orders of higher-ranking members, often referred to as “direct orders.”
According to court documents, in order to be considered for ABT membership, a person must be sponsored by another gang member. Once sponsored, a prospective member must serve an unspecified term, during which he is referred to as a prospect, while his conduct is observed by members of the ABT.
At sentencing, scheduled for Jan. 30, 2014, McNiel and Feathers each face a maximum penalty of 15 years in prison.
This case is being investigated by a multi-agency task force consisting of the Bureau of Alcohol, Tobacco, Firearms and Explosives; Drug Enforcement Administration; FBI; U.S. Marshals Service; Federal Bureau of Prisons; U.S. Immigration and Customs Enforcement Homeland Security Investigations; Texas Rangers; Texas Department of Public Safety; Montgomery County, Texas, Sheriff’s Office; Houston Police Department-Gang Division; Texas Department of Criminal Justice – Office of Inspector General; Harris County, Texas, Sheriff’s Office; Tarrant County, Texas, Sheriff’s Office; Atascosa County, Texas, Sheriff’s Office; Orange County, Texas, Sheriff’s Office; Waller County, Texas, Sheriff’s Office; Alvin, Texas, Police Department; Carrollton, Texas, Police Department; Mesquite Texas, Police Department; Montgomery County District Attorney’s Office; and the Atascosa County District Attorney’s Office.The case is being prosecuted by the Criminal Division’s Organized Crime and Gang Section and the U.S. Attorney’s Office of the Southern District of Texas.
Therapy Staffing Company Owner and Patient Recruiter<br /> Plead Guilty in $7 Million Health Care Fraud SchemeRead the Press Release
A patient recruiter and a therapy staffing company owner pleaded guilty today in connection with a $7 million health care fraud scheme involving the now defunct home health care company Anna Nursing Services Corp.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida; Special Agent in Charge Michael B. Steinbach of the FBI’s Miami Field Office; and Special Agent in Charge Christopher B. Dennis of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) Office of Investigations’ Miami office made the announcement.
Ivan Alejo, 48, and Hugo Morales, 36, pleaded guilty before U.S. District Judge Jose E. Martinez in the Southern District of Florida to one count of conspiracy to commit health care fraud. At sentencing, scheduled for Nov. 5, 2013, Alejo and Morales each face a maximum penalty of 10 years in prison.
Alejo worked as a patient recruiter at Anna Nursing, a home health care agency in Miami Springs, Fla., that purported to provide home health and therapy services to Medicare beneficiaries but in reality billed Medicare for expensive physical therapy and home health care services that were not medically necessary and/or were not provided. Morales owned Professionals Therapy Staffing Services Inc., which provided therapists to Anna Nursing.
Alejo and his co-conspirators negotiated and paid kickbacks and bribes to patient recruiters in return for the recruiters providing patients to Anna Nursing for home health and therapy services that were medically unnecessary and/or not provided. He and others also paid kickbacks and bribes to co-conspirators in doctors’ offices and clinics in exchange for home health and therapy prescriptions, medical certifications, and other documentation. Alejo and his co-conspirators would use the prescriptions, medical certifications and other documentation to fraudulently bill the Medicare program for home health care services.
Morales and others created fictitious progress notes and other patient files indicating that therapists from Professionals Therapy had provided physical or occupational therapy services to particular Medicare beneficiaries, when in many instances those services had not been provided and/or were not medically necessary. Morales knew the falsified documents were used to support false claims for home health care services billed to Medicare by his co-conspirators at Anna Nursing.
From approximately October 2010 through approximately April 2013, Anna Nursing was paid by Medicare approximately $7 million for fraudulent claims for home health care services that were not medically necessary and/or not provided.This case is being investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division's Fraud Section and the U.S. Attorney's Office for the Southern District of Florida. This case was prosecuted by Trial Attorney A. Brendan Stewart of the Criminal Division’s Fraud Section.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,500 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.
Long Island Physician to Pay U.S. $388,000 to Settle <br /> False Claims Act Allegations Related to Overbilling MedicareRead the Press Release
Richard S. Obedian, a Long Island, N.Y., orthopedic surgeon, will pay the government $388,000 to settle allegations that he violated the False Claims Act by submitting false claims to Medicare for minimally invasive spine procedures, the Justice Department announced today.
Allegedly, throughout 2005, Obedian knowingly submitted improper claims to Medicare for a procedure known as kyphoplasty, a minimally invasive procedure used to treat compression fractures of the spine that often are due to osteoporosis. Prior to 2006, Medicare billing rules required the use of a specific billing code to denote the performance of a kyphoplasty procedure. Those same rules precluded the use of other codes assigned to more invasive and complicated, and therefore more expensive, surgeries. The government alleged that Obedian knowingly circumvented lower payment rates for kyphoplasty procedures performed throughout 2005 by using incorrect billing codes assigned to more complicated surgeries, thereby inflating his Medicare reimbursements.
“We expect physicians who participate in federal health care programs to bill for their services accurately and honestly,” said Stuart F. Delery, Assistant Attorney General for the Civil Division. “Neither the Department of Justice nor the taxpayers will tolerate those who knowingly overbill federal health care programs.”“We will continue to vigorously enforce the False Claims Act for the protection of the taxpayers and the United States government,” said William J. Hochul, Jr., U.S. Attorney for the Western District of New York.
“The Obedian settlement vividly illustrates the role of dynamic law enforcement partnerships in the battle to protect Medicare from those who would bill inappropriately,” said Thomas O’Donnell, Special Agent in Charge of the Office of Inspector General for the U.S. Department of Health and Human Services, New York region. “Our office continues working to ensure that taxpayer money is spent wisely.”
“This resolution is a prime example of CMS’ successful partnership with the Office of Inspector General for the Department of Health and Human Services and the Department of Justice to carry out our mission to prevent and detect Medicare fraud and protect the Medicare Trust Fund,” said Peter Budett, Deputy Administrator and Director, Center for Program Integrity in the Centers for Medicare and Medicaid Services.
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 $14.8 billion through False Claims Act cases, with more than $10.8 billion of that amount recovered in cases involving fraud against federal health care programs.
This settlement was the result of a coordinated effort among the Justice Department’s Civil Division, the U.S. Attorney’s Office for the Western District of New York and the Department of Health and Human Services’ Office of Inspector General. The settlement is part of the Department’s broader investigation into kyphoplasty billing practices among hospitals, which has resulted in settlements with more than 100 hospitals totaling approximately $75 million to resolve allegations that they mischarged Medicare for kyphoplasty procedures. In addition, the government previously settled with Medtronic Spine LLC, the corporate successor to Kyphon Inc., for $75 million to settle allegations that the company defrauded Medicare by counseling hospital providers to perform kyphoplasty procedures as inpatient rather than outpatient procedures.
The claims resolved by this settlement are allegations only, and there has been no determination of liability.Northern California Residents Indicted for Filing False Liens Against IRS Employees and Tax FraudRead the Press Release
The Justice Department announced today the unsealing of a superseding indictment returned by a federal grand jury in Sacramento, Calif., charging Teresa Marie Marty, Charles Tingler and Victoria Tingler, all of Placerville, Calif., with conspiracy to defraud the United States and filing multi-million dollar liens against government officials.
Marty is charged with filing liens against the property of three Internal Revenue Service (IRS) employees involved in the collection of taxes she owed the IRS. She also filed liens of at least $84 million against the property of two Justice Department attorneys involved in a lawsuit filed against her in 2009 to enjoin her and her business, Advanced Financial Services (AFS), from preparing tax returns.
According to the superseding indictment, the Tinglers were clients of Marty and AFS, who filed a false tax return in 2008 fraudulently claiming a refund of $358,415. The indictment charges the Tinglers, as well as Marty, with filing this tax return. When the IRS tried to collect the fraudulently obtained refund, both Mr. and Mrs. Tingler filed multiple liens against the IRS revenue officer who was handling their collection case.
According to the charging documents the liens disclosed the social security numbers of the respective government employees. Marty and the Tinglers are also charged with multiple counts of unlawfully using the social security numbers of the government employees in the liens they filed with the California Secretary of State.
Finally, the indictment charges Marty, Mr. Tingler and AFS office manager Pamela Harris, of Placerville with participating in a conspiracy to defraud the IRS. The indictment alleges that as part of the conspiracy, Harris and Marty engaged a commercial collection agency to collect one of the three false liens that Mr. Tingler had filed, one of which was in the amount of $500,000.
Marty, Harris, and Marty’s daughter, Rebecca Bandera-Marty, had previously been indicted in June 2013 for a large-scale tax-fraud scheme. Those charges are included in this superseding indictment. According to the superseding indictment, in 2008 and 2009 Marty, Bandera-Marty, and Harris conspired to file at least 250 false individual federal income tax returns on behalf of individuals who resided in twenty-six states, and which claimed more than $60 million in false federal income tax refunds.
An indictment is merely an allegation and all defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law. If convicted, the defendants face up to five years in prison for the conspiracy charge as well as each charge of filing a false claim and unlawfully disclosing a social security number. Each retaliatory lien count carries a maximum penalty of 10 years in prison.
The case was investigated by the Treasury Inspector General for Tax Administration and by IRS-Criminal Investigation and is being prosecuted by Justice Department Tax Division Trial Attorney Ignacio Perez de la Cruz and Assistant U.S. Attorney Matthew Segal in the Eastern District of California.
New York Maintenance and Construction Company Owner Pleads Guilty in Manhattan Federal Court to Failing to Pay Payroll TaxesRead the Press Release
Kathryn Keneally, Assistant Attorney General for the Justice Department’s Tax Division, announced today the guilty plea of Thomas Nastasi III, 46, of Mt. Kisco, N.Y., to one count of willful failure to pay the Internal Revenue Service (IRS) the payroll taxes of his company, Nastasi Maintenance & Construction LLC. Nastasi pleaded guilty before U.S. District Judge Paul G. Gardephe in the Southern District of New York.
According to the previously filed indictment and statements made during Nastasi’s guilty plea, from 2001 through 2011, Thomas Nastasi III owned and operated several Manhattan construction and maintenance companies, including Nastasi Maintenance & Construction. As the president of the companies, Nastasi was responsible for withholding payroll taxes from his employees and paying them over to the IRS. Those taxes included the employees’ income taxes, Social Security, and Medicare taxes. Nastasi accumulated over $1.7 million in payroll taxes that were owed but never paid to the IRS. Those taxes included the employer’s portion of Social Security and Medicare taxes for his employees.
Court documents and statements also established that instead of paying the companies’ payroll taxes to the IRS, Nastasi used company funds to pay hundreds of thousands of dollars in personal expenses, for items including boat-related expenses and cigars. Nastasi also made false statements to the IRS in the course of its attempts to obtain delinquent tax returns and collect the corporate and personal taxes owed by Nastasi and his companies.
“Employers who use taxes withheld from their employees’ paychecks to fund their own lavish lifestyles instead of paying over the funds to the government show a blatant disregard not only for the law, but also for all honest taxpayers who work hard and play by the rules,” said Assistant Attorney General Kathy Keneally. “Business owners who commit these crimes not only face jail time, but also must repay the stolen taxes, with interest and penalties.”
“Business owners who misdirect employment taxes to their own personal ends are stealing from their employees and all taxpayers’ futures,” said Richard Weber, Chief of IRS Criminal Investigation. “Thomas Nastasi III funded an extravagant lifestyle with his ill-gotten gains, including $67,000 spent on cigars. When investigated, he made false statements in an attempt to obstruct our special agents. IRS Criminal Investigation vigorously pursues anyone who collects taxes and fails to timely remit those taxes.”
Sentencing is set for Dec.19, 2013, at 2:30 p.m. before Judge Paul Gardephe.
Assistant Attorney General Keneally thanked special agents of IRS-Criminal Investigation and the U.S. Attorney’s Office for the Southern District of New York for their efforts in this case.
Tax Division Assistant Section Chief Nanette L. Davis is prosecuting this case.
Justice Department Settles Fair Housing Lawsuit with Multi/Tech Engineering Services Inc.Read the Press Release
The Justice Department announced today that Multi/Tech Engineering Services Inc., an engineering firm based in Salem, Ore., has agreed to pay more than $60,000 to settle a lawsuit alleging that it had violated the Fair Housing Act by designing Gateway Village Apartments with steps and other features that made it inaccessible to people with disabilities.
“Steps, narrow doors and other accessibility barriers prevent people with disabilities from exercising the same rights to obtain housing of their choice that other people enjoy” said Acting Assistant General for the Civil Rights Division Jocelyn Samuels. “We will hold builders and designers accountable and those who fail to follow the law will face enforcement action.”
This settlement will assist in compensating victims of discrimination and in removing accessibility barriers at Gateway Village, a 275 unit apartment complex in Salem. In May 2013, the Justice Department and the Fair Housing Council of Oregon (FHCO) also reached a settlement with the developers of the property to resolve the rest of the lawsuit, filed in September 2011. The settlement must still be approved by the court.
Under the terms of the parties’ agreement, Multi/Tech will pay $32,000 to a settlement fund to compensate individuals with disabilities who were impacted by the accessibility violations. Multi/Tech will also contribute $21,000 to the corrective actions already being undertaken by the developer according to the prior settlement agreement to make Gateway Village accessible to people with disabilities. These corrective actions include removing steps from sidewalks, widening interior doorways, reducing threshold heights, replacing excessively sloped portions of sidewalks and installing properly sloped curb ramps to allow people with disabilities to access the sidewalks from the parking areas. In addition, Multi/Tech will pay $7,902.70 in damages to the FHCO, the plaintiff-intervenor, whose investigation revealed the accessibility violations.
“The right to accessible housing is a fundamental protection afforded by law,” said U.S. Attorney for the District of Oregon Amanda Marshall. “I am committed to working with the Fair Housing Council of Oregon, and our federal, state and local partners to ensure that those who design and construct housing units make them accessible to people with disabilities in compliance with the Fair Housing Act.”
The lawsuit arose as a result of a complaint filed by FHCO with the U.S. Department of Housing and Urban Development (HUD). After HUD investigated the complaint, it issued a charge of discrimination and referred the matter to the Justice Department.
“For more than two decades the law has required that newly-built multifamily housing provide equal access to people with disabilities,” said Bryan Greene, HUD’s Acting Assistant Secretary for Fair Housing and Equal Opportunity. “Throughout that time, HUD and the Department of Justice have educated builders, design professionals and others on those requirements, most recently through guidance issued this past April. Where those efforts fail, our agencies will gain compliance through enforcement of the law."
Individuals who are entitled to share in the settlement fund will be identified through a process established in the settlement. Those who believe they were subjected to unlawful discrimination at Gateway Village, either when they lived there or when they considered living there, should contact the Justice Department toll-free at 1-800-896-7743 mailbox # 9993, or e-mail the Justice Department at [email protected] .
The federal Fair Housing Act prohibits discrimination in housing on the basis of race, color, religion, sex, familial status, national origin and disability. Among other things, the Fair Housing Act requires that newly constructed multifamily housing with four or more units contain certain accessibility features so that the housing is accessible to and usable by people with disabilities.
For more information about the Civil Rights Division and the laws it enforces please visit www.usdoj.gov/crt .
Individuals who believe that they have been victims of housing discrimination can call the Housing Discrimination Line at 1-800-896-7743, e-mail the Justice Department at [email protected] , or contact HUD at 1-800-669-9777.
Alabama Tax Return Preparers and 19 Foreign Nationals Charged with Conspiring to Defraud the United States, Identity Theft and Money LaunderingRead the Press Release
Justice Department announced that a 14-count superseding indictment was unsealed today, charging JB Tax Professional Services Inc., Jacqueline J. Arias and Jose Bayron Estrada, of Spruce Pine, Ala., along with 19 foreign nationals, many of whom resided in the New Orleans area, with conspiracy to defraud the United States and conspiracy to commit mail and wire fraud by filing fraudulent income tax returns. The indictment also charges certain defendants with aggravated identity theft and conspiracy to commit money laundering. Most of the defendants were previously indicted in May 2013 and arrested in June 2013.
According to the indictment, members of the conspiracy obtained Forms W-2, often by purchasing them for cash, for the purposes of filing fraudulent income tax returns. Conspirators further obtained individual taxpayer identification numbers (ITINs) for use in filing fraudulent tax returns, in some cases using false applications filed with the assistance of Arias and JB Tax Professional Services. An ITIN is a tax processing number issued by the Internal Revenue Service (IRS) to individuals who do not have, and are not eligible to obtain, a social security number. Both Arias and the business were designated by the IRS as certified acceptance agents, which are entrusted by the IRS with the responsibility of reviewing the documentation of an ITIN applicant’s identity and alien status for authenticity, completeness and accuracy before submitting their application to the IRS.
The charging documents allege that the defendants used the social security numbers of real persons to conduct mail and wire fraud. The defendants also allegedly disguised and concealed the proceeds of their fraud by agreeing to conduct certain types of financial transactions.
An indictment merely alleges that crimes have been committed, and each defendant is presumed innocent until proven guilty. Each defendant faces a maximum potential sentence of five years in prison for the conspiracy charge. Each aggravated identity theft charge carries a mandatory two-year prison sentence, and the defendants charged in the money laundering conspiracy count face a possible maximum sentence of twenty years in prison. The defendants will also be subject to fines, mandatory restitution and forfeiture if convicted.
The case is being investigated by U.S. Immigration and Customs Enforcement, which oversees Homeland Security Investigations; IRS-Criminal Investigation; the U.S. Secret Service; the U.S. Postal Inspection Service; and the Social Security Administration, Office of the Inspector General, in partnership with the St. Tammany Parish, La. and Jefferson Parish, La. Sheriffs’ Departments. The case is being prosecuted by Tax Division Trial Attorneys Hayden Brockett and Kevin Lombardi.
Shands Healthcare to Pay $26 Million to Resolve Allegations<br /> Related to Inpatient Stays at Six Florida HospitalsRead the Press Release
Shands Teaching Hospital & Clinics Inc., Shands Jacksonville Medical Center Inc. and Shands Jacksonville Healthcare Inc. (collectively, Shands Healthcare), which operates a network of health care providers in Florida, will pay the government and the state of Florida a total of $26 million to settle allegations that six of its health care facilities submitted false claims to Medicare, Medicaid and other federal health care programs for inpatient procedures that should have been billed as outpatient services, the Justice Department announced today. The six Florida hospitals are: Shands at Jacksonville; Shands at Gainesville, also known as Shands at the University of Florida; Shands Alachua General Hospital; Shands at Lakeshore; Shands Starke and Shands Live Oak.
“The Department of Justice is committed to ensuring that Medicare funds are expended appropriately, based on the medical needs of patients rather than the desire of health care providers to maximize profits,” said Stuart F. Delery, Assistant Attorney General for the Civil Division. “Hospitals participating in Medicare must bill for their services accurately and honestly.”
Allegedly, from 2003 through 2008, the six hospitals knowingly submitted inpatient claims to Medicare, Medicaid and TRICARE for certain services and procedures that Shands Healthcare knew were correctly billable only as outpatient services or procedures.
“The public expects its medical professionals to operate with a high degree of integrity,” said A. Lee Bentley III, Acting U.S. Attorney for the Middle District of Florida. “When health care providers seek higher profits at the expense of their professional judgment, the public trust in the medical system is compromised.”
“Regardless of the complexity of these schemes to siphon off crucial health care dollars,” said Daniel R. Levinson, Inspector General of the U.S. Department of Health and Human Services, “our law enforcement officials will work tirelessly to seek justice.”The six Florida hospitals were named as defendants in a qui tam, or whistleblower, lawsuit brought under the False Claims Act, which permits private citizens to sue on behalf of the government and receive a portion of the proceeds of any settlement or judgment awarded against a defendant. The lawsuit was filed in federal district court in Jacksonville, Fla., by Terry Myers, the president of a healthcare consulting firm, YPRO Corp. Of the $26 million settlement, $25,170,400 will go to Medicare and other federal health care payors. The settlement also resolved allegations under the Florida False Claims Act; the state of Florida will receive $829,600. Myers’ portion of these recoveries has yet to be determined.
This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by Attorney General Eric Holder and Health and Human Services Secretary Kathleen Sebelius. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $14.8 billion through False Claims Act cases, with more than $10.8 billion of that amount recovered in cases involving fraud against federal health care programs.
The settlement was the result of a coordinated effort among the U.S. Attorney’s Office for the Middle District of Florida, the Commercial Litigation Branch of the Justice Department’s Civil Division, the Department of Health and Human Services’ Office of Inspector General and Office of Counsel to the Inspector General, and the Florida Attorney General’s Office.
The claims resolved by these settlements are allegations only, and there has been no determination of liability. The lawsuit is captioned United States of America and the State of Florida ex rel. Terry L. Myers v. Shands Healthcare et al., Civil Action No. 3:08-cv-441-J-16HTS (M.D. Fla.).Retired Educator Sentenced to Prison for FraudRead the Press Release
The Justice Department and Internal Revenue Service (IRS) announced that Gloria Donoghue was sentenced today in federal court in the Eastern District of New York to18 months in prison for using the mail in her tax refund scheme. Donoghue was also ordered to pay restitution of $320,621 to the IRS.
According to the superseding indictment, Donoghue was charged with making false claims against the United States, through the filing of three trust returns, each of which claimed false refunds of $300,000. She was also charged with causing Treasury checks for those years to be mailed to Roosevelt, N.Y. In April 2013, Donoghue pleaded guilty to one count of mail fraud. As part of her plea agreement, Donoghue agreed to the forfeiture of over $579,378.
This case was investigated by IRS-Criminal Investigation and prosecuted by Trial Attorneys Jennifer R. Laraia and Erin Pulice of the Justice Department's Tax Division.
Justice Department Reaches Interim Olmstead Settlement with the State of TexasRead the Press Release
The Justice Department’s Civil Rights Division announced today that it has joined with private plaintiffs in entering an interim settlement agreement with the state of Texas intended to enable Texans with intellectual and other developmental disabilities to live in community settings rather than nursing facilities. The interim agreement calls for the state to begin expanding community alternatives to nursing facilities for thousands of persons with these types of disabilities, while the parties temporarily suspend their ongoing litigation and work to negotiate a comprehensive settlement of all remaining issues in the case.
The litigation involves claims that the state has not complied with the Americans with Disabilities Act (ADA), other federal statutes and the Supreme Court’s landmark decision in Olmstead v. L.C. in ways leading to the needless institutionalization of people with intellectual and other developmental disabilities in nursing facilities.
“We applaud the state’s commitment to initiate steps providing real options to Texans with intellectual and other developmental disabilities, so that they can live and engage in their own communities, rather than spend their lives in nursing facilities,” said Acting Assistant Attorney General for Civil Rights Jocelyn Samuels. “The Supreme Court made clear more than a decade ago that people with disabilities must be provided the same opportunities to participate in community life as those without disabilities. This agreement is an important step to making that promise a reality in Texas.”
The interim agreement offers meaningful improvement in the lives of people like plaintiff Eric Steward. After spending nearly a decade in a nursing facility, Mr. Steward recently moved to his own home in San Antonio and, for the first time, attended the city’s annual celebration and street festival. There are thousands of people who remain unnecessarily segregated, and the interim agreement will help ensure that they, like Mr. Steward, have opportunities to live their lives as they want.
The interim agreement calls for the state to identify people with developmental disabilities in nursing facilities, inform them about community options and help those who want to move to the community receive the services that they need there, instead of in a nursing facility. In addition, the state will establish a system to help divert people from avoidable nursing facility admission.
Private plaintiffs filed suit against the state in 2010, represented by Disability Rights Texas, the Center for Public Representation, and the law firm of Weil, Gotshal & Manges LLP. The Justice Department intervened in the case in 2012. The department and private plaintiffs subsequently entered into extensive settlement negotiations with the state, leading to this interim agreement. It is the Department of Justice’s first statewide settlement to vindicate the Olmstead rights of individuals in nursing facilities.
The Civil Rights Division enforces the ADA, which authorizes the Attorney General to investigate whether a state is serving individuals in the most integrated settings appropriate to their needs. Please visit http://www.justice.gov/crt and http://www.ada.gov to learn more about the ADA and other laws enforced by the Justice Department’s Civil Rights Division.
This agreement is due to the efforts of Alison Barkoff, Special Counsel for Olmstead Enforcement and the following staff members of the Civil Rights Division, Special Litigation Section: Jonathan Smith, Chief ; Benjamin Tayloe, Deputy Chief; Robert Koch, Regan Rush and Alexandra Shandell, Trial Attorneys; and Gary Graca, paralegal
Federal Court Permanently Bars Indiana Instant Tax Service Franchisee from Tax PreparationRead the Press Release
A federal court in Indianapolis permanently barred David Franklin and his company, Instant Refund Tax Service (IRTS), from preparing tax returns and from operating a tax-preparation business, the Justice Department announced today. The government alleged that IRTS, which Franklin wholly owns, operated as a franchisee of Instant Tax Service, a large national tax-preparation franchisor operated by ITS Financial LLC, based in Dayton, Ohio. The order follows an earlier preliminary injunction against the defendants. In a separate case, a federal court in Ohio preliminarily enjoined the Dayton-based franchisor last November. The defendants in both cases consented to entry of the preliminary injunctions without admitting the allegations against them.
The Indiana permanent injunction order was signed by Judge Sarah Evans Barker of the U.S. District Court for the Southern District of Indiana. The government complaint in the case alleged that Franklin owned and operated 22 Instant Tax Service locations that prepared and filed false and fraudulent income tax returns for customers, fabricated income for phony businesses to obtain larger tax credits, forged W-2 forms, filed returns improperly based on paycheck stubs rather than W-2 forms, claimed false education tax credits and reported false filing statuses for customers. The government also accused Franklin’s offices of filing tax returns without customers’ authorization and selling false and deceptive loan products to customers.
The case is one of five similar civil actions that the Justice Department brought against Instant Tax Service franchises and the corporate franchisor, ITS Financial, which claims to be the fourth-largest tax-preparation firm in the nation. The court recently conducted a two-week trial in the Ohio case, in connection with the government’s request to permanently enjoin the Instant Tax Service franchisor. A decision has not yet been issued.
For more information on the earlier preliminary injunction against Franklin and IRTS visit www.justice.gov/tax/2013/txdv13129.htm and for more information on actions brought against the Instant Tax Service franchise visit www.justice.gov/tax/2012/txdv121304.htm. In the past decade, the Justice Department’s Tax Division has obtained hundreds of injunctions to stop tax-fraud promoters. More information about those cases is available on the Justice Department website.
United States v. David R. Franklin, et al.
Stipulated Order for Permanent Injunction Against David Ray Franklin and Instant Refund Tax Service, Inc. (PDF)Fourteen More Army National Guard Recruiters and Soldiers<br /> Charged in Ongoing Bribery and Fraud InvestigationRead the Press Release
Fourteen current and former recruiters and soldiers of the U.S. Army National Guard have been charged in the Southern District of Texas for engaging in a multi-year scheme to defraud the U.S. Army National Guard Bureau, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and U.S. Attorney Kenneth Magidson of the Southern District of Texas.
The cases against all 14 defendants arise from an investigation involving allegations that former and current military recruiters and U.S. soldiers in the San Antonio and Houston areas engaged in a wide-ranging corruption scheme to illegally obtain fraudulent recruiting bonuses. To date, the investigation has led to charges against 25 individuals, 11 of whom have pleaded guilty.
According to court documents, in approximately September 2005, the National Guard Bureau entered into a contract with Document and Packaging Broker Inc. (Docupak) to administer the Guard Recruiting Assistance Program (G-RAP). The G-RAP was a recruiting program that offered monetary incentives to Army National Guard soldiers who referred others to join the Army National Guard. Through this program, a participating soldier could receive up to $3,000 in bonus payments for referring another individual to join. Based on certain milestones achieved by the referred soldier, a participating soldier would receive payment through direct deposit into the participating soldier’s designated bank account. To participate in the program, soldiers were required to create online recruiting assistant accounts.
In an indictment unsealed today in its entirety, Michael Rambaran, 50, of Pearland, Texas; and Edia Antoine, 27, Ernest A. Millien III, 49, and Christopher D. Renfro, 25, all of Houston, were charged with conspiracy, bribery, wire fraud and aggravated identity theft. According to court documents, between February 2008 and August 2011, Rambaran was a National Guard recruiter and Antoine, Millien and Renfro were recruiting assistants in G-RAP. Rambaran allegedly provided the names, addresses and Social Security numbers of potential soldiers to Antoine, Millien and Renfro so they could claim fraudulent recruiting referral bonus payments by falsely claiming they were responsible for referring those potential soldiers to join the military. The indictment alleges Antoine, Millien and Renfro paid kickbacks to Rambaran by providing a portion of the fraudulent bonus payments.
In a separate indictment unsealed on Aug. 9, 2013, Zaunmine O. Duncan, 37, of Austin, Texas, was charged with conspiracy, bribery, wire fraud, aggravated identity theft and witness tampering. According to court documents, between February 2008 and August 2010, Duncan, an Army National Guard recruiter, allegedly provided the personal identifiers of potential soldiers to four co-conspirators, identified as Recruiting Assistants 1 through 4, who used the personal identifiers to claim fraudulent recruiting referral bonuses through their G-RAP accounts. According to the indictment, Recruiting Assistants 1 through 4 paid kickbacks to Duncan by providing a portion of the fraudulent proceeds. The indictment also alleges Duncan and Recruiting Assistant 1, without permission or lawful authority, used the identity of a potential soldier to set up a G-RAP account through which Duncan and Recruiting Assistant 1 received additional fraudulent bonus payments. The indictment also charges Duncan with witness tampering, alleging Duncan instructed a witness, identified in the indictment as Recruiting Assistant 1, to make certain false exculpatory statements to federal law enforcement officers.
In another related but separate indictment also unsealed on Aug. 9, 2013, Jammie T. Martin, 36, and Michelle H. Davis, 32, both of Katy, Texas; and Danielle V. Applin, 27, of Harker Heights, Texas, were charged with conspiracy, bribery, wire fraud and aggravated identity theft. According to the indictment, from February 2009 through April 2011, Martin served as an Army National Guard recruiter and Applin and Davis served as recruiting assistants with the G-RAP. According to court documents, Martin allegedly provided the personal identifiers of potential soldiers to Applin and Davis so they could claim fraudulent recruiting referral bonus payments by falsely claiming they were responsible for referring the potential soldiers to join the military. The indictment alleges Applin and Davis paid kickbacks to Martin by providing a portion of the fraudulent bonus payments.
In addition, in the last three weeks, Melanie D. Moraida, 33, of Pearland, Texas; Elisha M. Ceja, 26, of Barboursville, W.Va.; Kimberly N. Hartgraves, 28, of League City, Texas; Lashae C. Hawkins, 27, of San Antonio; Annika S. Chambers, 27, of Houston; and Vanessa Phillips, 35, of Houston, were all charged in separate criminal informations with one count of conspiracy and one count of bribery.
A conviction for bribery carries as possible punishment a maximum penalty of 15 years in federal prison. Witness tampering and wire fraud, upon conviction, could each result in a maximum of 20 years imprisonment, while a conviction for the conspiracy charge carries a five-year maximum sentence. If convicted of aggravated identity theft, a defendant will also have to serve a mandatory penalty of two years in prison, which must be served consecutively to any other sentence imposed. All charges also carry a possible $250,000 maximum fine or twice the pecuniary gain or loss.
A criminal indictment or information is a formal accusation of criminal conduct, not evidence. A defendant is presumed innocent unless convicted through due process of law.
The cases are being investigated by special agents from the San Antonio Fraud Resident Agency of Army Criminal Investigation Command’s Major Procurement Fraud Unit. Trial Attorneys Edward J. Loya Jr., Brian A. Lichter, Sean F. Mulryne and Mark J. Cipolletti of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney John Pearson of the Southern District of Texas are prosecuting the case.Former Lorain County, Ohio, Corrections Officer Charged for Assaulting an InmateRead the Press Release
Acting Assistant Attorney General for the Civil Rights Division Jocelyn Samuels, U.S. Attorney for the Northern District of Ohio Steven M. Dettelbach and Special Agent in Charge for the FBI Cleveland Field Office Stephen D. Anthony, announced today that former Lorain County, Ohio corrections officer Marlon Taylor, 47, of Vermilion, Ohio, was charged in the U.S. Court for the Northern District of Ohio with one count of deprivation of rights under color of law.
The criminal information alleges that on July 29, 2012, Taylor, while working as a corrections officer in the Lorain County Jail, assaulted an inmate identified as Victim 1 by striking him repeatedly, causing bodily injury and depriving Victim 1 the right to be free from cruel and unusual punishment.
If convicted, Taylor faces a potential maximum sentence of 10 years in prison and a $250,000 fine. A charge is not evidence of guilt and all defendants are presumed innocent until proven guilty.
The investigation has been conducted by the FBI Cleveland Field Office. Assistant U.S. Attorneys Antoinette T. Bacon and Lauren Bell, and, Trial Attorney Betsy Biffl of the Civil Rights Division, Criminal Section will prosecute the case.
Complaints Filed in Joint Investigation of Sex Offenses Involving ChildrenRead the Press Release
U.S. v. Richard Sullivan Benavente (293.97 KB)Saipan, MP – United States Attorney for the Districts of Guam and the Northern Mariana Islands Alicia A.G. Limtiaco, together with Commonwealth of the Northern Mariana Islands (CNMI) Attorney General Joey P. San Nicolas, Honolulu Federal Bureau of Investigation (FBI) Special Agent in Charge Vida Bottom, and CNMI Department of Public Safety Commissioner James Deleon Guerrero announced today the filing of federal charges stemming from a joint investigation of sex offenses involving children:
- a federal criminal complaint charging ANNETTE NAKATSUKASA BASA with Sex Trafficking of Children. A conviction carries a statutory minimum of at least ten years of imprisonment and up to a maximum sentence of life imprisonment.
- a federal criminal complaint charging RICHARD SULLIVAN BENAVENTE with Sexual Exploitation of Children. A conviction carries a statutory minimum of fifteen years of imprisonment and up to a maximum sentence of thirty years of imprisonment.
- Defendants BASA and BENAVENTE made their initial appearance today in the U.S. District Court before the Honorable Chief Judge Ramona V. Manglona. Detention hearings for both defendants will be held on Wednesday, August 21, 2013 at 9:00 AM and preliminary hearings will be held on Friday, August 30, 2013, at 9:00 AM, in the U.S. District Court for the NMI.
“Protecting our children and community from those who engage in human trafficking and the exploitation of children is a top priority of the Department of Justice,” said U.S. Attorney Limtiaco. “This investigation shows the commitment of federal and local law enforcement to work together to investigate and prosecute child exploitation and to rescue and assist victims.”
The investigation originated with the CNMI Department of Public Safety and was investigated jointly by DPS Criminal Bureau of Investigations and the FBI. The cases are being prosecuted by Assistant United States Attorneys Rami Badawy and Ross Naughton.
The charges are merely accusations and the defendants are presumed innocent until and unless proven guilty.
Three Members and One Associate of Violent North Carolina Latin Kings Gang Sentenced to PrisonRead the Press Release
Three members and one associate of the North Carolina Almighty Latin King/Queen Nation (ALKQN) have been sentenced this week in federal court in the Middle District of North Carolina.
The announcement was made today by Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; U.S. Attorney Ripley Rand of the Middle District of North Carolina; Special Agent in Charge John A. Strong of the FBI’s Charlotte Division; Chief of the Greensboro, N.C., Police Department Ken Miller; and B.J. Barnes, Sheriff of Guilford County, N.C.
U.S. District Court Judge James A. Beaty Jr. sentenced the following defendants:
• Jorge Peter Cornell, 36, of Greensboro, N.C., aka “King Jay,” was sentenced on Aug. 14, 2013, to serve 336 months in prison;
• Jason Paul Yates, 32, originally of Chicago but recently living in North Carolina, aka “King Squirrel,” was sentenced on Aug. 15, 2013, to serve 206 months in prison;
• Steaphan Acencio-Vasquez, 22, of Raleigh, N.C., aka “King Leo,” was sentenced on Aug. 13, 2013, to serve 96 months in prison and three years of supervised release; and
• Ernesto Wilson, 55, of New York City, aka “Yayo,” was sentenced on Aug. 13, 2013, to serve 204 months in prison and three years of supervised release.
Cornell, the leader of the North Carolina ALKQN, was convicted by a federal jury on Nov. 21, 2012, of racketeering conspiracy, violent crimes in aid of racketeering activity and use of a firearm during and in relation to a crime of violence for an April 2008 assault with a dangerous weapon.
Wilson, an ALKQN associate, was convicted by a federal jury on Nov. 21, 2012, of racketeering conspiracy.ALKQN members Yates and Acencio-Vasquez previously pleaded guilty to racketeering conspiracy.
According to court documents and evidence presented at trial, the defendants were members and associates of ALKQN, a violent street gang that originated in Chicago in the 1960s and ultimately migrated to cities throughout the United States, including New York City and ultimately Greensboro in 2002. From approximately 2005 until December 2011, ALKQN gang members met on a regular basis to increase their knowledge base of the gang rules; discuss criminal activity and how to deal with rival gangs, including by attempted murder; purchase firearms; circulate firearms for use in criminal activity by other ALKQN members; and engage in violent crimes such as robberies, bank fraud, arson and carjacking. The proceeds of this criminal activity helped to finance the gang’s illegal activities. ALKQN members also attempted to murder members of the gang when they attempted to terminate their membership.
Evidence presented at trial also showed that Cornell conspired with other ALKQN members to commit racketeering acts, including the April 2008 shooting of a rival gang member; the commissioning of no fewer than five Hobbs Act Robberies of businesses located throughout the Greensboro area; the plotting of firebomb attacks on the residences of former ALKQN members; attacks on former ALKQN members; and the killing of former ALKQN members through drive-by shootings. Cornell also provided firearms to members of ALKQN to commit several of these crimes.
ALKQN member Wesley Anderson Williams, who pleaded guilty on Oct. 1, 2012, to racketeering conspiracy, will be sentenced by Judge Beaty on Aug. 20, 2013. Russell Lloyd Kilfoil, an ALKQN member who was convicted by a federal jury on Nov. 21, 2012, will be sentenced on Aug. 28, 2013.
The investigation was a joint operation conducted by the FBI’s Greensboro Field Office, Greensboro Police Department and the Guilford County Sheriff’s Office.
The case was prosecuted by Trial Attorney Leshia Lee-Dixon of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorney Robert A.J. Lang of the Middle District of North Carolina.
Pulaski County Sheriff’s Deputy Indicted for Federal Civil Rights ViolationRead the Press Release
U.S. Attorney for the Western District of Kentucky David J. Hale and Acting Assistant Attorney General for the Civil Rights Division Jocelyn Samuels announced that Steven Molen, a Sheriff’s Deputy with the Pulaski County Sheriff’s Office, was indicted yesterday by a federal grand jury on one count of violating the civil rights of a victim by using excessive force in August 2008.
The indictment alleges that on Aug. 24, 2008, Molen assaulted a victim identified in the indictment as “C.F.,” resulting in bodily injury.
On June 27, 2013, a federal grand jury in the Eastern District of Kentucky indicted Molen on two other counts of violating the civil rights of different victims by using excessive force in 2009 and 2011.
The investigation was conducted by the FBI. The cases against Molen will be prosecuted by Assistant U.S. Attorney Joshua Judd from the Western District of Kentucky, Assistant U.S. Attorneys Pat Molloy and Ron Walker from the Eastern District of Kentucky, and Trial Attorney Ali Ahmad from the Civil Rights Division.
The charges set forth in an indictment are merely accusations and the defendant is presumed innocent until proven guilty.
Operators of Louisiana Home Health Company Sentenced <br /> for $17.1 Million Health Care Fraud SchemeRead the Press Release
The owner of South Louisiana Home Health Care Inc. and the director of nursing for the Louisiana home health agency were sentenced today for their roles in a Medicare fraud scheme involving the payment of kickbacks and the falsification of documents.
Acting Assistant Attorney General Mythili Raman of the Criminal Division; Acting U.S. Attorney Walt Green of the Middle District of Louisiana; Special Agent in Charge Mike Fields of the Dallas Region of the HHS Office of the Inspector General (HHS-OIG); Special Agent in Charge Michael Anderson of the FBI’s New Orleans Division; and Louisiana State Attorney General James Buddy Caldwell made the announcement.
Louis T. Age Jr., 64, owned and operated South Louisiana Home Health Care and operated this company along with his former wife, Verna Age, 60, who served as the company’s director of nursing. Louis Age and Verna Age, both of Slidell, La., were sentenced today by U.S. District Judge James J. Brady of the Middle District of Louisiana to 180 months and 60 months in prison, respectively, and ordered to forfeit $9.2 million and pay $17.1 in restitution.After a jury trial in March 2013, Louis Age and Verna Age each were convicted of one count of conspiracy to commit health care fraud, and Louis Age also was convicted of one count of conspiracy to defraud the United States and to pay or receive illegal health care kickbacks. Verna Age previously was convicted of one count of conspiracy to defraud the United States and to pay or receive illegal health care kickbacks after a jury trial in October 2012.
According to evidence presented at trial, Louis Age and Verna Age paid kickbacks to patient recruiters to obtain Medicare beneficiary information. Nurses, including registered nurse Verna Age, then falsified qualification documents to make it appear that these beneficiaries qualified for home health services. The evidence also showed that Louis Age hired and paid kickbacks to medical doctors to sign fraudulent referrals and certifications for home health services that were not medically necessary. Louis Age and Verna Age then used the Medicare beneficiary information and false documents to bill Medicare for the medically unnecessary home health services. From 2005 through 2011, Medicare paid South Louisiana Home Health Care approximately $17.1 million based on these fraudulent home health care claims.
This case was investigated by the FBI, HHS-OIG and Medicaid Fraud Control Unit of the Louisiana State Attorney General’s Office and was brought as part of the Medicare Fraud Strike Force, under supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Middle District of Louisiana. The case was prosecuted by Trial Attorneys David M. Maria and Abigail B. Taylor of the Fraud Section, with assistance from Trial Attorney Arunabha Bhoumik.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.
Michigan Physical Therapist and Home Health Agency Owner Pleads Guilty for Role in Medicare Fraud SchemeRead the Press Release
A greater Detroit-area physical therapist who was also an owner of a home health agency pleaded guilty yesterday for his role in a $22 million home health care fraud scheme.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney for the Eastern District of Michigan Barbara L. McQuade, Special Agent in Charge Robert D. Foley III of the FBI’s Detroit Field Office, Special Agent in Charge Lamont Pugh III of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) Chicago Regional Office, and Special Agent in Charge Erick Martinez of Internal Revenue Service Criminal Investigation made the announcement.Hemal Bhagat, 32, of Troy, Mich., pleaded guilty on Aug. 14, 2013, before U.S. District Judge Bernard A. Friedman in the Eastern District of Michigan to one count of conspiracy to commit health care fraud. At sentencing, scheduled for Nov. 12, 2013, Bhagat faces a maximum penalty of 10 years in prison and a $250,000 fine.
According to information contained in plea documents, Bhagat admitted that from approximately May 2009 through October 2011, he conspired with others to commit health care fraud through billing Medicare for home health care services that were not actually rendered and/or not medically necessary. A licensed physical therapist, Bhagat began working in June 2009 for Troy-based Prestige Home Health Services Inc., a home health agency owned by alleged co-conspirators. In approximately August 2009, he and other co-conspirators became owners of Royal Home Health Care Inc., a home health agency also located in Troy.
Bhagat admitted that his co-conspirators at Prestige and Royal paid kickbacks to patient recruiters to obtain the information of Medicare beneficiaries, which the co-conspirators then used to bill Medicare for services that were not provided to these beneficiaries and/or were not medically necessary. He and his co-conspirators then created fictitious therapy files appearing to document physical therapy services provided to Medicare beneficiaries, when in fact no such services had been provided and/or were not medically necessary. Bhagat’s role in creating the fictitious therapy files was to sign documents – including physical therapy evaluations, supervisory patient visits, and patient discharge forms – indicating that he and others had provided physical therapy services to particular Medicare beneficiaries, when in fact they had not. Bhagat admitted to knowing that the documents he falsified would be used to support false claims to Medicare by his co-conspirators at Prestige and Royal. He submitted or caused the submission of claims to Medicare for services that were not medically necessary and/or not provided, which in turn caused Medicare to pay approximately $4,767,359.03.This case was investigated by the FBI, HHS-OIG and IRS Criminal Investigation and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Michigan. This case is being prosecuted by Trial Attorney Niall M. O’Donnell, Deputy Chief Charles E. Duross, and Trial Attorney James McDonald of the Criminal Division’s Fraud Section.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,500 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.
MS-13 Leader Sentenced for Multiple Racketeering OffensesRead the Press Release
Jose Armando Bran, aka “Pantro,” was sentenced today to serve two consecutive life sentences for his role in a murder and maiming that he ordered while he was an MS-13 gang leader in Richmond, Va.
The sentencing was announced by Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; U.S. Attorney Neil H. MacBride of the Eastern District of Virginia; Special Agent in Charge Jeffrey C. Mazanec of the FBI’s Richmond Field Office; Special Agent in Charge John P. Torres of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) in Washington; Richmond Commonwealth Attorney Michael Herring; Chesterfield Commonwealth Attorney Billy Davenport; Chief Ray J. Tarasovic of the Richmond Police Department; and Col. Thierry G. Dupuis of the Chesterfield County Police Department.Bran, 30, of Richmond, was sentenced by Senior U.S. District Judge Robert E. Payne in the Eastern District of Virginia.
On May 20, 2013, Bran was found guilty of two counts of conspiracy to commit murder, murder, maiming and use of a firearm during a crime of violence resulting in death.
According to evidence presented at trial, Bran was responsible for orchestrating the gangland-style execution of Osbin Hernandez-Gonzalez. Bran, who served as the leader of MS-13’s Sailors Locos Salvatrucha clique in Richmond, suspected that Hernandez-Gonzalez had violated MS-13 rules by aiding a rival gang. Based upon this suspicion, Bran created a ruse to lure Hernandez-Gonzalez to the “Pony Pasture” area on the banks of the James River. Bran ordered MS-13 associate Karen San Jose to contact Hernandez-Gonzalez and convince him to gather with other MS-13 members. Bran also enlisted the help of two juveniles, Luis Cabello and Jeremy Soto, who were tasked with actually carrying out the murder of Hernandez-Gonzalez. Finally, to ensure the murder was carried out, Bran instructed MS-13 member Michael Arevalo, aka “Reptile,” to accompany the juveniles on the “mission” and to ensure the juveniles completed the murder, which Arevalo did.
Evidence at trial also showed that in approximately January 2012, Bran was told that an individual with the initials F.A. was supplying information about the Richmond Sailors Clique to a rival gang. A plan was developed to have MS-13 associate Justin Amador kill F.A. to both punish the supposed informant and test Amador’s loyalty.On Jan. 14, 2012, Bran directed that the plan be carried out. Sometime that evening, Giovanny Torres, along with Amador, Mario Molina and Marvin De Leon, drove the victim to a nightclub in Richmond. They left after 45 minutes, telling the victim that they were all going to commit a burglary. They drove to the vicinity of the 3800 block of Terminal Avenue in Richmond, and De Leon and Amador got out of the car. After a signal from Torres, De Leon grabbed the victim, pulled his sweatshirt over his head and held him while Amador stabbed the victim at least 14 times. The victim escaped and fled to a nearby residence while the others drove away. As a result of the attack, the victim lost a portion of one lung.
The other members and associates of the MS-13 Sailors Locos Salvatrucha clique in Richmond that have been convicted include the following individuals:
• On Jan. 23, 2013, Arevalo pleaded guilty in federal court. He was sentenced on July 25, 2013, to serve life in prison plus 10 years.
• On March 15, 2013, San Jose pleaded guilty in federal court. On July 23, 2013, she was sentenced to serve 20 years in prison.
• Cabello was charged as an adult by the Richmond Commonwealth Attorney’s Office, and on Jan. 25, 2012, he was found guilty by a jury. On June 24, 2013, Cabello was sentenced to serve 34 years in prison.
• Soto was charged as an adult by the Richmond Commonwealth Attorney’s Office and pleaded guilty on July 31, 2012. On July 19, 2013, Soto was sentenced to serve 18 years in prison.
• On Aug. 15, 2012, Molina pleaded guilty in federal court. On Dec. 12, 2013, he was sentenced to serve 293 months in prison.
• On June 29, 2012, Torres pleaded guilty in federal court. On March 14, 2013, he was sentenced to serve 235 months in prison.
• On May 10, 2012, De Leon pleaded guilty in federal court. On July 23, 2013, he was sentenced to serve 235 months in prison.
• On June 18, 2012, Amador pleaded guilty in federal court. On July 25, 2013, he was sentenced to serve 235 months in prison.
• Jose Mancia-Martinez, aka “Ready,” was charged as an adult in Chesterfield County Circuit Court. On Jan. 9, 2013, he was found guilty by a jury of forcible rape. On July 17, 2013, he was sentenced to serve 20 years in prison.
This case was investigated by the FBI, HSI, the Richmond Police Department and the Chesterfield County Police Department. Assistant U.S. Attorney Roderick C. Young of the Eastern District of Virginia and Trial Attorney Andrew L. Creighton of the Criminal Division’s Organized Crime and Gang Section prosecuted the case on behalf of the United States.
Long Island Fisherman and Fish Dealer Plead Guilty to Wire Fraud and Records FalsificationRead the Press Release
The operator of the dragger F/V Norseman and an associated fish dealer pleaded guilty Thursday in federal court in Central Islip, N.Y., to federal violations stemming from their role in systematically underreporting fluke (summer flounder) that was being harvested as part of the federal Research Set-Aside Program, the Justice Department’s Environment and Natural Resources Division announced.
Charles Wertz Jr., a commercial fisherman from East Meadow, N.Y., pleaded guilty to one count of wire fraud and two counts of falsification of federal records for knowingly submitting 137 falsified dealer reports from May 2009 through December 2011, and 70 falsified fishing logs, known as fishing vessel trip reports (FVTRs), from May 2011 through December 2011, as part of a scheme to defraud the United States of overharvested and underreported fluke. The fish dealer, C&C Ocean Fishery Ltd., pleaded guilty to one count of wire fraud and three counts of falsification of federal records for its participation in the scheme, which included aiding and abetting the submission of falsified dealer reports and FVTRs.
As part of the plea deal, the defendants agreed to pay between $480,000 and $516,000 in combined fines and forfeitures. The defendants also agreed to multiple sentence conditions, including relinquishment of federal fishing permits, a ban on participation in the Research Seat-Aside Program, divestiture of any interest in the F/V Norseman, and shutting down the company, C&C Ocean Fishery Ltd. The court will hear sentencing recommendations at a hearing set for Nov. 22, 2013.
“Protecting the integrity of the Research Set Aside program supports the goal of ensuring sustainable fisheries for future generations,” said Robert G. Dreher, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. “When individuals like the defendant willfully defraud the government in order to turn a larger profit for themselves they are also cheating their fellow fishermen who choose to play by the rules. Today’s plea demonstrates that we will hold those who break the rules accountable and make sure that this valuable resource remains available to everyone.”“Our office takes these violations very seriously,” said Logan Gregory, Special Agent in Charge of the National Oceanic and Atmospheric Administration (NOAA) Office of Law Enforcement's Northeast Division. “This type of illegal activity has a ripple effect on seafood markets and impacts fishing communities by driving down the price of fluke which reduces the potential profits of fishermen and dealers who abide by the regulations. We hope the outcome of this case deters others from coming up with similar schemes to circumvent federal fisheries laws and regulations and from gaining an unfair advantage over those who comply with the regulations.”
Under NOAA regulations, all of the Norseman’s catch had to be reported to NOAA on FVTRs. During the years 2009, 2010, and 2011, the Norseman principally targeted fluke. However, on multiple occasions the vessel exceeded its relevant federal and New York State quotas for fluke for 137 trips, totaling 86,080 pounds of fluke worth approximately $200,000.
In order to cover up the illegal fluke harvesting, the operators of the Norseman falsified the FVTRs that were submitted to NOAA. For each of the 137 trips, a false FVTR was submitted. During 2009 and 2010, another individual submitted the false FVTRs, but by May 2, 2011, Mr. Wertz was falsifying and submitting the FVTRs himself. The defendants were aware that the FVTRs were utilized by NOAA as part of the administration of its statutory-mandated fisheries management program.C&C Ocean was not only aware of the false Norseman FVTRs, but it aided and abetted the perpetration of the FVTR scheme through its preparation of federal dealer reports. As a federal dealer, C&C Ocean was required to prepare and submit federal dealer reports to NOAA. The dealer reports include information such as date of landing, port of landing, catch vessel, corresponding FVTR numbers, commercial grade, species, price, and weight. In order to cover up the overharvesting that occurred on the water, C&C Ocean’s dealer report had to match the catch data that was submitted on the corresponding FVTR. In other words, if the FVTR falsely underreported the Norseman’s catch of fluke, then the scheme would likely be detected unless the corresponding dealer report was similarly falsified. Both defendants prepared and submitted false dealer reports for each of the trips set forth in the table.
The defendants electronically submitted the 137 false dealer reports from Wertz’s desktop computer in New York, through an out-of-state internet server, to NOAA’s Regional Fisheries Administrator in Gloucester, Mass.
The case was investigated by agents of NOAA’s National Marine Fisheries Service, with assistance from the New York State Department of Environmental Conservation Police. The case is being prosecuted by Christopher L. Hale of the Justice Department’s Environmental Crimes Section, Environment and Natural Resources Division.Related Materials:
Wertz Plea Agreement
C&C Plea AgreementDepartment of Justice Reaches Agreement to Improve Conditions at St. Tammany Parish Jail in LouisianaRead the Press Release
The Justice Department announced today that it has entered into a comprehensive agreement with the Parish of St. Tammany, La., and the St. Tammany Parish Sheriff to correct conditions of confinement at the St. Tammany Parish Jail and to ensure that improvements made since the Department’s investigation will be maintained. The St. Tammany Parish Jail is located in Covington, La., and houses approximately 1,000 adult male and female prisoners. The jail is staffed by approximately 225 sworn law enforcement officers and civilian employees.
The agreement outlines significant remedial measures to address deficiencies in correctional mental health care and suicide prevention. Under the terms of the agreement, St. Tammany will work to ensure that prisoners are safe and receive care and services necessary to meet their constitutional rights. The agreement underscores the Parish’s obligation to protect prisoners the substantial risk of serious harm.
“We commend Sheriff Jack Strain, St. Tammany Parish President Patricia Brister, and other St. Tammany officials for their willingness to work aggressively to address the problems identified during the course of our investigation,” said Jocelyn Samuels, Acting Assistant Attorney General, Civil Rights Division. “Based on the productive relationship we have established to date, we expect to continue to work cooperatively with St. Tammany to improve conditions of confinement at this facility.”
In April 2011, the Justice Department initiated its investigation of the St. Tammany Jail under the Civil Rights of Institutionalized Persons Act (CRIPA). The Department issued its findings in July 2012, concluding that certain conditions at St. Tammany violated prisoners’ constitutional rights to adequate mental health care, including adequate suicide prevention.
Today’s agreement comprehensively addresses the department's findings through an in-depth focus on the systemic problems that caused the unconstitutional conditions at the jail. The agreement also builds on improvements made by St. Tammany during the department’s investigation, most notably the removal of small booking cages that had been used for the confinement of suicidal prisoners and the construction of a specialized housing unit to manage and monitor prisoners in mental health crisis. The agreement requires:
- Improved screening and assessments of prisoners with serious mental health needs.
- Adequate and timely mental health treatment for prisoners, including group or individual therapy services, better monitoring when medication is administered to prisoners and follow-up and crisis services.
- Improved suicide precautions.
- Enhanced staff training on mental health and suicide prevention.
- The collection and tracking of data to identify triggers and trends involving suicide and self-injurious behavior, with the goal of preventing or reducing further incidents.
- The appointment of an independent auditor, jointly selected by St. Tammany and the department, with expertise in the areas covered by this agreement. As part of overseeing the implementation of the agreement, the independent auditor will periodically inspect the facility for compliance and provide technical assistance to St. Tammany staff.
CRIPA authorizes the Attorney General to investigate conditions of confinement in certain institutions owned or operated by, or on behalf of, state and local governments. In addition to adult and juvenile correctional facilities, these institutions include psychiatric hospitals, nursing homes and residential facilities serving persons with developmental disabilities. CRIPA’s focus is on systemic deficiencies rather than individual, isolated problems. Please visit http://www.justice.gov/crt to learn more about CRIPA and other laws enforced by the Justice Department’s Civil Rights Division
The investigation of the St. Tammany Parish Jail was conducted by Corey M. Sanders, Trial Attorney in the Special Litigation Section of the Civil Rights Division.
Related Material:
Findings Letter: http://www.justice.gov/crt/about/spl/documents/tammany_findings_7-12-12.pdf
Two Idaho Men Sentenced to Prison for Asbestos ViolationsRead the Press Release
Bradley Eberhart, 51, of Garden Valley, Idaho, and Douglas Greiner, 53, of Eagle, Idaho, were sentenced this week in federal court for violating the asbestos work practice standards of the Clean Air Act, announced Robert G. Dreher, Acting Assistant Attorney General for Environment and Natural Resources Division, and Wendy J. Olson, U.S. Attorney for the District of Idaho.
U.S. District Judge Edward J. Lodge sentenced Eberhart on Monday to six months in prison plus six months of home confinement, followed by six months of supervised release, 200 hours of community service, and restitution of $3.98 million, in joint and several liability. Greiner was also sentenced to six months in prison and six months of home confinement, to be followed by six months of supervised release. The amount of restitution by Greiner will be the subject of further briefing by the parties.
Both defendants previously pleaded guilty on Feb. 26, 2013.
Boise-based Owyhee Construction Inc., was the successful bidder on a $2.1 million waterline renovation project in Orofino, Idaho, a rural community in north central Idaho. Greiner was the project superintendent and Eberhart was the onsite supervisor of the project. The contract documents warned Owyhee Construction that the company may encounter up to 5,000 linear feet of cement asbestos pipe (CAP) during the renovation. CAP is a non-friable form of asbestos that is encapsulated in a cement matrix. When the CAP is broken or crushed by heavy equipment or subjected to cutting and grinding by machinery it becomes subject to regulation because of the threat to public health from airborne fibers.
Eberhart and Greiner failed to properly supervise the renovation. Eberhart supervised employees who were not properly trained in asbestos work and were not properly outfitted with protective gear while cutting CAP with saws. While working in the trenches to replace pipe, workers would remove CAP from the trenches, crush it and then place it back in the trenches. Large quantities of CAP were also removed from the trenches and ended up as fill material on sixteen properties around Orofino. Greiner pleaded guilty to orchestrating one of the disposals. The EPA cleanup cost just under $4 million.
“These prison sentences reflect the serious consequences of the failure of these defendants to comply with EPA’s regulations that protect public health from asbestos, a human carcinogen,” said Robert G. Dreher, Acting Assistant Attorney General for the Environment and Natural Resources Division. “Such criminal acts endanger workers and the community and can, as demonstrated here, cost the federal government millions of dollars to cleanup. The Justice Department will continue to vigorously prosecute these crimes.”“This case demonstrates the commitment of law enforcement and the Department of Justice to ensure the health of our residents,” said U.S. Attorney Olson. “Threats to the environment and to public health may not be readily apparent from a construction project. Renovation projects like these often generate dust with fine asbestos particles that may have the potential to cause serious health and environmental problems if safety precautions are not taken. The full extent of injury from airborne asbestos may not be noticed or diagnosed for years. It is important that companies, their foremen and their operators comply with environmental laws to avoid serious harm.”
“These two Defendants carelessly subjected Orofino residents to asbestos exposure,” said Tyler Amon, Special Agent in Charge of EPA’s Criminal Investigation Division in Seattle. “In the course of their enterprise, they also created sixteen separate asbestos disposal sites that threatened the community, jeopardized workers and cost taxpayers $4 million to cleanup. Today’s sentence sends a clear message: if you risk people’s lives to save time and money, you will pay the price.”
The case was investigated by the U.S. Environmental Protection Agency. The case was prosecuted by Assistant U.S. Attorney D. Marc Haws from the District of Idaho and Senior Trial Attorney J. Ronald Sutcliffe of the Justice Department’s Environmental Crimes Section of the Environment and Natural Resources Division.
Kentucky Resident Charged with Tax Evasion and Other Tax Fraud ChargesRead the Press Release
Kathryn Keneally, Assistant Attorney General of the Justice Department’s Tax Division, and Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky, jointly announced today that James S. Faller II, of Russell Springs, Ky., was indicted by a federal grand jury in Bowling Green, Ky. Faller, a consultant and private investigator, is charged in an eleven count indictment with obstructing the internal revenue laws, evading his individual income taxes, making and subscribing to a false form that he filed with the Internal Revenue Service (IRS) and failing to file his individual income tax returns.
The indictment alleges that Faller obstructed the IRS’s ability to collect payment of a substantial penalty he owed to the government and the IRS’s ability to identify his income from 2006 through 2009. According to the indictment, Faller evaded the payment of a $216,000 penalty related to unpaid employment taxes of Call Center Communications Inc., of which Faller was the president. In addition, Faller was charged with evading his individual income taxes from 2006 through 2009. He allegedly failed to report more than $960,000 of income during this four-year period and committed various affirmative acts of evasion.
Faller faces a maximum punishment of three years in prison for the charge of obstructing the internal revenue laws; five years for each count of evading his individual income taxes; three years for making and subscribing to a false form that he filed with the IRS; and one year for each count of failing to file his individual income tax returns. He faces a maximum fine of $100,000 on each count of failing to file his income tax returns and $250,000 for each of the other counts. An indictment merely alleges that a crime has been committed, and a defendant is presumed innocent until proven guilty beyond a reasonable doubt.
The case resulted from an investigation by special agents of the IRS - Criminal Investigation. Tax Division Trial Attorney Thomas Voracek and Assistant U.S. Attorney Lee Gentry are prosecuting the case.
Justice Department Settles Immigration-related Discrimination Claim Against SOS Employment GroupRead the Press Release
The Justice Department today reached an agreement with SOS Employment Group, based in Salt Lake City resolving claims that the company violated the anti-discrimination provision of the Immigration and Nationality Act (INA).
The department’s investigation confirmed allegations made by a work-authorized individual that SOS Employment Group had, at both initial hire and when subsequently re-verifying the refugee’s employment authorization, rejected the employee’s valid driver’s license and unrestricted Social Security card and required him to produce a Department of Homeland Security Employment Authorization Document (EAD). The department’s investigation further determined that SOS Employment’s documentary demands were based on the individual’s status as a non-U.S. citizen. The anti-discrimination provision of the INA, prohibits employers from using discriminatory documentary policies, procedures or requirements based on citizenship status or national origin when initially determining or subsequently re-verifying an employee’s authorization for employment.
Under the terms of the settlement agreement, SOS Employment Group has agreed to pay $9,157.50 in back pay to the victim and $1,200 in civil penalties to the United States, undergo Justice 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 one year.
“The INA’s anti-discrimination provision requires that the statute’s employment eligibility verification requirements be implemented in a nondiscriminatory manner without regard to citizenship status or national origin,” said Jocelyn Samuels, Acting Assistant Attorney General for the Civil Rights. “The Civil Rights Division is fully committed to vigorously enforcing this important component of the INA.”
The Office of Special Counsel for Immigration-Related Unfair Employment Practices (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 (1-800-237-2515, TTY for hearing impaired), call the OSC’s employer hotline at 1-800-255-8155 (1-800-237-2515, TTY for hearing impaired), sign up for a no-cost webinar at www.justice.gov/about/osc/webinars.php , email [email protected] or visit the website at www.justice.gov/crt/about/osc
Justice Department Settles Immigration-related Discrimination Claim Against Forever 21Read the Press Release
The Justice Department announced today that it reached an agreement with Forever 21 resolving allegations that the company violated the anti-discrimination provision of the Immigration and Nationality Act (INA) when it rejected a work-authorized individual’s Department of Homeland Security-issued Employment Authorization Document (EAD), and required her to produce a Permanent Resident Card (commonly known as a “Green Card”) as a condition of employment. The individual, who was employment-authorized as an applicant for permanent residence, was unable to work following the rejection of her EAD. The anti-discrimination provision of the INA prohibits employers from discriminating in the employment eligibility verification process by demanding specific documents or rejecting acceptable documents based on citizenship status or national origin.
Under the terms of the settlement agreement, Forever 21 has agreed to pay $1705.50 in back pay to the individual and $280 in civil penalties to the United States, undergo Justice 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 one year.
“The INA’s anti-discrimination provision requires that the INA’s employment eligibility verification requirements be implemented in a nondiscriminatory manner without regard to citizenship status or national origin,” said Jocelyn Samuels, Acting Assistant Attorney General for the Civil Rights. “The Civil Rights Division is fully committed to vigorously enforcing the anti-discrimination provision’s protections against discriminatory documentary practices.”
The Office of Special Counsel for Immigration-Related Unfair Employment Practices (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 (1-800-237-2515, TTY for hearing impaired), call the OSC’s employer hotline at 1-800-255-8155 (1-800-237-2515, TTY for hearing impaired), sign up for a free webinar at www.justice.gov/about/osc/webinars.php , email [email protected] or visit the website at www.justice.gov/crt/about/osc
Justice Department Files Lawsuit in Delaware Against Regal Contractors LLC Et Al., to Enforce the Employment Rights of Air Force Reserve MemberRead the Press Release
The Justice Department and U.S. Attorney for the District of Delaware Charles M. Oberly III announced today the filing of a lawsuit alleging that Regal Contractors LLC, Regal Builders LLC and Noble Pond Homes willfully violated the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA) by terminating U.S. Air Force Reserve Member Lon Fluman following his return from required military training with his reserve unit.Fluman is a Senior Airman with the U.S. Air Force Reserve serving with the 712th Aircraft Maintenance Squadron at Dover Air Force Base. According to the complaint, filed in the U.S. District Court for Delaware, Fluman was scheduled for reserve military duty to begin on Sept. 3, 2012 but was rescheduled on short notice to start one day later. Subsequently, Fluman served weekend reserve duty in early December of 2012. Following his second duty, the defendants terminated Fluman from his position as a maintenance technician. Although Fluman satisfied USERRA’s notification requirements before departing for his military leaves, according to the complaint, the defendants terminated Fluman anyway, claiming the notice provided was not sufficient.
USERRA explicitly protects the rights of members of the uniformed services to retain their employment following absences due to military service obligations. “Congress enacted USERRA to protect our men and women in uniform from experiencing this kind of injustice,” said Jocelyn Samuels, Acting Assistant Attorney General for the Civil Rights Division. “The Justice Department is committed to vigorously enforcing federal laws that protect the employment rights of our servicemembers.”
“Members of the Air Force Reserve sacrifice time away from their jobs to serve their country,” said U.S. Attorney Oberly. “USERRA ensures that they are not discriminated against and that their employment rights are protected.”
This case stems from a referral by the U.S. Department of Labor following an investigation by the Department of Labor’s Veterans’ Employment and Training Service. The case is being handled by the Civil Rights Division and the U.S. Attorney’s Office for the District of Delaware, who work collaboratively with the Department of Labor to protect the jobs and benefits of National Guard and Reserve servicemembers upon their return to civilian life.
Additional information about USERRA can be found on the Justice Department website: w ww.servicemembers.gov and www.usdoj.gov/crt/emp, as well as on the Labor Department’s website at www.dol.gov/vets/programs/userra/main.htm.
Justice Department Announces Charges Filed Against Two Derivatives Traders in Connection with Multi-Billion Dollar Trading Loss at JPMorgan Chase & CompanyRead the Press Release
U.S. Attorney General Eric Holder, U.S. Attorney for the Southern District of New York Preet Bharara and Assistant Director-in-Charge of the FBI’s New York Field Office George Venizelos announced the unsealing of criminal complaints against Javier Martin-Artajo and Julien Grout for their alleged participation in a conspiracy to hide the true extent of losses in a credit derivatives trading portfolio maintained by the Chief Investment Office (CIO) of JPMorgan Chase & Company (JPMorgan). Martin-Artajo served as a Managing Director and Head of Credit and Equity Trading for the CIO, and Grout was a Vice President and derivatives trader in the CIO.
“Our financial system has been hurt in recent years not just by risky bets gone bad, but also, in some cases, by criminal wrongdoing,” said Attorney General Holder. “We will not stop pursuing those who violate the public trust and compromise the integrity of our markets. I applaud U.S. Attorney Bharara, his colleagues in the Southern District of New York, and all of our partners on the President’s Financial Fraud Enforcement Task Force for their longstanding commitment to combating all forms of financial fraud. And I pledge that we will continue to move both fairly and aggressively to bring the perpetrators of financial crimes to justice.”
“As alleged, the defendants, Javier Martin-Artajo and Julien Grout, deliberately and repeatedly lied about the fair value of billions of dollars in assets on JPMorgan's books in order to cover up massive losses that mounted month after month at the beginning of 2012, which ultimately led JPMorgan to restate its losses by $660 million,” said U.S. Attorney Bharara. “The defendants’ alleged lies misled investors, regulators, and the public, and they constituted federal crimes. As has already been conceded, this was not a tempest in a teapot, but rather a perfect storm of individual misconduct and inadequate internal controls. The difficulty inherent in precisely valuing certain kinds of financial positions does not give people a license to lie or mislead to cover up losses; it does not confer a license to create false books and records or to make false public filings. And that goes double for handsomely-paid executives at a public company whose actions can roil markets and upend the economy.”
“The complaints tell a story of a group of traders who got in over their heads, and to get out, doubled down on a series of risky positions,” said FBI Assistant Director-in-Charge Venizelos. “In the first quarter of 2012, boom turned to bust, as the defendants, concerned about losing control to other traders at the bank, fudged the numbers on their daily book, and in some cases completely made them up. It brought a whole new meaning to cooking the books.”
In a separate action, the U.S. Securities and Exchange Commission (SEC) announced civil charges against Martin-Artajo and Grout.According to the allegations in the criminal complaints unsealed today in Manhattan federal court:
JPMorgan’s CIO, is a component of the bank’s Corporate/Private Equity line of business, which, according to the bank, exists to manage the bank’s excess deposits – approximately $350 billion in 2012. Since approximately 2007, the CIO’s investments have included a so-called Synthetic Credit Portfolio (SCP), which consists of indices and tranches of indices of credit default swaps (CDS). A credit default swap is essentially an insurance contract on an underlying credit risk, such as corporate bonds. CDS indices are collections of CDSs that are traded as one unit, while CDS tranches are portions of those indices, usually sliced up by riskiness.
Under U.S. Generally Accepted Accounting Principles (GAAP) and according to JPMorgan policy, CDS traders were required to value the securities in their portfolios on a daily basis. Those values, or “marks,” became part of the bank’s daily books and records. Because CDS indices and tranches are not traded over an exchange, traders are required to look to various data points in order to value their securities, such as actual transaction prices, price quotations from market makers, and values provided by independent services (such as Totem and MarkIT). JPMorgan’s accounting policy, which used the same methodology employed by the independent services, provided that the “starting point for the valuation of a derivatives portfolio is mid-market,” meaning the mid-point between the price at which market-makers were willing to buy or sell a security. Through about January 2012, CIO traders generally marked the securities in the SCP approximately to this mid-point, which they sometimes referred to as the “crude mid.”
The SCP was extremely profitable for JPMorgan – it produced approximately $2 billion in gross revenues since its inception – but in the first quarter of 2012, the SCP began to sustain consistent and considerable losses. From at least March 2012, Martin-Artajo and Grout conspired to artificially manipulate the SCP marks to disguise those losses. They did so, among other reasons, to avoid losing control of the SCP to other traders at JPMorgan.
Although Martin-Artajo pressured his traders, including Grout, to “defend the positions” in early 2012 by executing trades at favorable prices, the SCP lost approximately $130 million in January 2012 and approximately $88 million in February 2012. In March 2012, when the market moved even more aggressively against the CIO’s positions, Martin-Artajo specifically instructed Grout and the head SCP trader, Bruno Iksil (who has entered a non-prosecution agreement), not to report losses in the SCP unless they were tied to some identifiable market event, such as a bankruptcy filing by a company whose bonds were in the CDS index. Martin-Artajo explained that “New York” – meaning, among others, JPMorgan’s Chief Investment Officer – did not want to see losses attributable to market volatility.
By mid-March 2012, Grout was explicitly and admittedly “not marking at mids.” He maintained a spreadsheet that kept track of the difference between the price that Grout recorded in JPMorgan’s books and records, on the one hand, and the “crude mids,” on the other. By March 15, 2012, according to Grout’s spreadsheet, the difference had grown to approximately $292 million. In a recorded on-line chat the same day, Grout explained that he was trying to keep the marks for most of the SCP’s positions “relatively realistic,” with the marks for one particular security “put aside.” That is, Grout mispriced that one particular security, of which the SCP held billions of dollars’ worth, by the full $292 million. The following day, Iksil told Martin-Artajo that the difference had grown to $300 million, and “I reckon we get to 400 [million] difference very soon.” In a separate conversation, Iksil remarked to Grout that “I don’t know where he [Martin-Artajo] wants to stop, but it’s getting idiotic.”
In the days that followed, Grout at times ignored Iksil’s instructions on how to mark the positions, and instead, followed Martin-Artajo’s mandate to continue to hide the losses. By March 20, 2012, Iksil insisted that Grout show a significant loss: $40 million for the day. In a recorded call, Martin-Aartajo excoriated Iksil, finally emphasizing, “I didn’t want to show the P&L [the profit and loss].” Throughout the remainder of March 2012, while Iksil continued to try to insist that Martin-Artajo acknowledge the reality of the losses, Grout, at Martin-Artajo’s instructions, continued to hide them. As of March 30, 2012 – the last day of the first quarter of 2012 – Grout continued to fraudulently understate the SCP’s losses. These incorrect figures in the SCP were not only integrated into JPMorgan’s books and records, but also – as Martin-Artajo and Grout were well aware – into the bank’s quarterly financial filing for the first quarter of 2012 with the SEC.
During the course of the mis-marking scheme carried out by Martin-Artajo and Grout, the CIO’s Valuation Control Group (VCG) was supposed to serve as an independent check on the valuations assigned by traders to the securities that the traders were marking at month-end. The VCG, however, was effectively only staffed by one person and did not perform any independent review of the valuations. Instead, the VCG tolerated valuations outside of the bid-offer spread as presented by Martin-Artajo and other CIO traders.
In Aug. 2012, after Martin-Artajo and Grout were stripped of their responsibilities over the SCP and their scheme was discovered, JPMorgan restated its first quarter 2012 earnings, and recognized an additional loss of $660 million in net revenue attributable to the mis-marking of the SCP. JPMorgan announced that it was restating its earnings because it had lost confidence in the “integrity” of the marks submitted by Grout, at Martin-Artajo’s direction.
Martin-Artajo, 49, a Spanish citizen, and Grout, 35, a French citizen, are charged in one count of conspiracy; one count of falsifying the books and records of JPMorgan; one count of wire fraud; and one count of causing false statements to be made in JPMorgan’s filings with the SEC. They each face a maximum sentence of five years in prison on the conspiracy count, and 20 years in prison on each of the three remaining counts in the complaints, and a fine of the greater of $5,000,000 or twice the gross gain or gross loss as to certain of the offenses.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force, on which Mr. Bharara serves as a Co-Chair of the Securities and Commodities Fraud Working Group. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations.The case was investigated by the FBI. The SEC and the Justice Department’s Office of International Affairs were also involved.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Eugene Ingoglia and Matthew L. Schwartz are in charge of the prosecutions.
The charges contained in the complaints are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Individual Arrested in Florida in Connection with a Lottery Scam in JamaicaRead the Press Release
A Jamaican citizen charged in connection with the operation of a fraudulent lottery was arrested Tuesday in Orlando, Fla., following his indictment by a federal grand jury in Fort Lauderdale, Fla., on Aug. 9, 2012, the Justice Department, U.S. Postal Inspection Service, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations and U.S. Marshals Service announced today. Oneike Mickhale Barnett was arrested based on charges that he and his co-conspirators ran a lottery scam in Jamaica that fraudulently induced elderly victims in the United States to send them thousands of dollars to cover fees for lottery winnings that victims had not in fact won. The indictment unsealed with Barnett’s arrest forms part of the government’s crackdown on fraudulent lottery scams based in Jamaica.
Beginning in October 2008, Barnett and his co-conspirators are alleged to have contacted victims in the U.S., announced that the victims had won cash and prizes and persuaded the victims to send them thousands of dollars in fees to release the money. The victims never received cash or prizes. The defendant and his co-conspirators allegedly made calls from Jamaica using Voice Over Internet Protocol technology that allowed them to use a telephone number with a U.S. area code. According to the indictment, Barnett convinced victims to send money to middlemen in South Florida, who forwarded the money to Jamaica.
“Lottery scams that target older Americans, such as the one alleged here, are the most pernicious kind of fraud – often swindling seniors out of their life savings,” said Stuart F. Delery, Assistant Attorney General for the Justice Department’s Civil Division. “The Justice Department will continue to combat these schemes and bring those responsible to justice.”
“The alleged lottery scheme in this case is most vile because it targeted the elderly, one of the most vulnerable members in our society,” said Wifredo Ferrer, U.S. Attorney for the Southern District of Florida. “While the scam was based in Jamaica, it targeted victims in the United States, including South Florida. We will continue to pursue and prosecute those responsible for these illegal schemes in an effort to bring those responsible to justice and protect those in our society.”
Barnett was charged with conspiracy and 37 counts of wire fraud, and with committing these offenses via telemarketing. If convicted, he faces a statutory maximum sentence of 30 years per count, a possible fine and mandatory restitution.
“This arrest highlights the joint effort between U.S. and Jamaican law enforcement to prosecute those who prey on our nation’s senior citizens,” said U.S. Postal Inspector in Charge for the Miami Division Ronald Verrochio. “The mission of the Postal Inspection Service is to protect consumers by ensuring the nation’s mail system is not used as a tool for fraud.”
Special Agent in Charge for Homeland Security Investigations in Miami Alysa D. Erichs added, “These individuals are preying on some of the most vulnerable members in our communities. We will continue to work with our partners in Jamaica and other law enforcement agencies to put these criminal enterprises out of business.”
Acting U.S. Marshal Neil DeSousa said, “The U.S. Marshals Service in the Southern District of Florida, along with the Jamaica Foreign Field Office and the Organized Crime Drug Enforcement Task Force, remain committed to locating and apprehending criminals who defraud elderly Americans. We will continue to work with the U.S. Postal Inspection Service and Department of Homeland Security on the JOLT task force in the ongoing effort to combat lottery fraud targeting some of our most vulnerable citizens.”
U.S. Attorney Ferrer and Assistant Attorney General Delery both commended the investigative efforts of the U.S. Postal Inspection Service, Homeland Security Investigations, the U.S. Marshals Service and Jamaica’s Major Organized Crime and Anti-Corruption Task Force. The case is being prosecuted by Assistant U.S. Attorney Bertha Mitrani and Consumer Protection Branch, Civil Division attorneys Jeffrey Steger and Kathryn Drenning.
An indictment is merely an allegation, and every defendant is presumed innocent until proven guilty beyond a reasonable doubt.