District Not Recorded

An indictment was unsealed today in Montgomery, Ala., charging Nakia Jackson with conspiracy to file false tax returns, theft of public funds and aggravated identity theft, announced Assistant Attorney General Kathryn Keneally of the Justice Department's Tax Division and U.S. Attorney for the Middle District of Alabama George L. Beck Jr.  The indictment was unsealed following Jackson’s arrest.

 
According to the indictment, between January 2009 and March 2011, Jackson conspired with several individuals to file false tax returns using stolen identities, some of which Jackson obtained from a state employee.  He used the stolen identities to file false tax returns and directed the tax refunds to several bank accounts.  The bank accounts were opened by individuals Jackson recruited to receive the false refunds and directed them to withdraw the false refund money.  Jackson also recruited a bank teller to aide in the scheme.   

 
An indictment merely alleges that crimes have been committed, and the defendant is presumed innocent until proven guilty beyond a reasonable doubt.  If convicted, Jackson faces a maximum potential sentence of 10 years in prison for the charge of conspiracy to defraud the United States and for each count of theft of government money count, and a mandatory two-year sentence for the aggravated identity theft counts.  He is also subject to forfeiture, fines and mandatory restitution if convicted.

 
This case was investigated by special agents of IRS - Criminal Investigation. Trial Attorneys Charles M. Edgar Jr. and Michael Boteler of the Justice Department’s Tax Division are prosecuting the case.

The Justice Department and the Internal Revenue Service (IRS) announced that yesterday Leslie Louise Brewster of Durham, N.C. was sentenced to serve 70 months in federal prison for crimes related to preparing false tax returns and identity fraud.  She was also ordered to pay restitution to the IRS of $92,910.  Brewster was sentenced by Chief U.S. District Judge for the Middle District of North Carolina William Osteen Jr., in Greensboro, N.C. 

On Feb. 20, 2013, Brewster pleaded guilty to three felonies relating to her preparation of false tax returns: one count of aiding and assisting the preparation of a false tax return; one count of wire fraud; and one count of aggravated identity theft.

According to court documents, Brewster was the manager of the Burlington, N.C. branch of Nothing But Taxes, a tax return preparation franchise with locations throughout North Carolina. Brewster falsified federal income tax returns for hundreds of Nothing But Taxes clients in order to obtain larger tax refunds for the clients than they were actually entitled to receive.  The returns Brewster prepared for clients reported, among other items, false dependents, fictitious businesses and bogus education credits.

Brewster also purchased personal identifying information, including names and Social Security numbers, from members of the community.  Brewster used this personal identifying information to claim false dependents on tax returns she prepared for clients, and provided some of the identities she purchased to other return preparers at Nothing But Taxes’ Burlington location for their use in a similar fashion.  Brewster typically charged Nothing But Taxes clients a cash fee, above Nothing But Taxes’ normal flat fee for preparation of a return, to prepare a return containing false dependent information.

Recently, two defendants in related cases were also sentenced to prison for tax crimes arising out of the Nothing But Taxes scheme.  Saichelle McNeill, a return preparer at the Greensboro branch of Nothing But Taxes, was sentenced to serve 27 months in prison on Aug. 20, 2013.  McNeill previously pleaded guilty to wire fraud, aggravated identity theft and aiding and assisting the preparation of a false tax return.  Tiffany Rogers, a return preparer at the Burlington branch of Nothing But Taxes, was sentenced to serve 48 months incarceration on Aug. 14, 2013.  Rogers previously pleaded guilty to wire fraud, aggravated identity theft, willfully filing a false personal income tax return and aiding and assisting the preparation of a false tax return.

Two other Nothing But Taxes employees, Nikki Brewster and Dawn Williams, are currently awaiting sentencing in the U.S. District Court for the Middle District of North Carolina.  Each of them pleaded guilty to wire fraud, aggravated identity theft and aiding and assisting the preparation of false tax returns.  Court documents associated with their respective guilty pleas allege that Nikki Brewster was the manager of a Nothing But Taxes branch in Durham, N.C., while Dawn Williams was a return preparer at the Burlington branch.

Court documents in the cases of Nikki Brewster, Dawn Williams, Tiffany Rogers, and Saichelle McNeill stated that those defendants, like Leslie Brewster, also prepared false tax returns for Nothing But Taxes clients, and committed identity theft by claiming false dependents on clients’ tax returns. 

“The Justice Department will investigate and prosecute fraudulent tax return preparers and those who steal identities to use in their tax fraud, whether the crime is committed by a single thief or a ring of thieves,” said Kathryn Keneally, Assistant Attorney General for the Justice Department’s Tax Division.  “The prison sentence handed down today demonstrates that such invasions of personal privacy and theft of public monies will not be tolerated.”

Ripley Rand, U.S. Attorney for the Middle District of North Carolina, said, “We thank the Criminal Investigative Division of the IRS for their hard work in dismantling this tax fraud syndicate.  We will continue to hold those accountable who attempt to cheat the government and place the burden of their fraud on lawful taxpayers.”

This case and the related Nothing But Taxes cases are being investigated by special agents of the IRS- Criminal Investigation Division, and are being prosecuted by Assistant U.S. Attorney Frank Chut and Trial Attorney Jonathan Marx of the Justice Department’s Tax Division.

The Justice Department filed a lawsuit yesterday against the owners, builders and designers of an eight unit apartment complex at 175 and 195 Silsbee Avenue in Helena, Mont. for violations of the Fair Housing Act.  The lawsuit alleges that the defendants violated the law when they designed and constructed the complex with barriers that make it inaccessible to persons with disabilities.

“Since 1991, the Fair Housing Act has required that when new multifamily housing is built, it must be accessible to persons with disabilities,” said Jocelyn Samuels, Acting Assistant Attorney General for the Justice Department’s Civil Rights Division.  “When apartment complexes are built with steps and other barriers, those with disabilities are denied that equal housing opportunity.”

The suit, filed in U.S. District Court in Helena, alleges that various barriers at the Silsbee Avenue property deny persons with disabilities equal access to four ground floor units and the associated public and common use areas.  Such barriers include inaccessible building entrances; no accessible parking; insufficient accessible routes into and through the units; light switches, electrical outlets, thermostats and other environmental controls inside the units in inaccessible locations; and kitchens that are inaccessible to persons in wheelchairs.

“Congress has recognized that it is important that individuals with disabilities have equal access to multiple family housing.  This case serves as a reminder that persons with disabilities, including the elderly, veterans, and those with a disability from birth or from an accident, should enjoy as much as possible the same access to multiple family housing as persons without such disabilities” said Michael Cotter, U.S. Attorney for the District of Montana. 

The lawsuit arises out of a complaint filed with the Department of Housing and Urban Development (HUD) by the Montana Fair Housing Council Inc. (MFH), a private nonprofit corporation whose mission it is to ensure compliance with fair housing laws for all persons in Montana.  MFH inspected the Silsbee Avenue property and observed accessibility barriers there.  After conducting an investigation, HUD issued a charge of discrimination and referred the case to the Justice Department.

“The Fair Housing Act's modest design and construction requirements allow people with disabilities to live independently and to fully use and enjoy their homes,” said Bryan Greene, HUD's Acting Assistant Secretary for Fair Housing and Equal Opportunity.  “These requirements have been law for more than 20 years.  HUD is committed to enforcing the nation’s fair housing laws and working to create equal housing opportunities for people with disabilities.”

Named in the suit are the owners and builders of the property, Gabriel and Sommer Nistler and Nistler Electric LLC, and the designer of the property, Derek Brown, and his firm, Derek Brown Consulting Inc.  The suit seeks a court order requiring the defendants to retrofit the Silsbee Avenue property to bring it into compliance with the Fair Housing Act, as well as monetary damages for MFH and for persons harmed by the lack of accessibility at the complex.

The federal Fair Housing Act prohibits discrimination in housing based on race, color, religion, national origin, sex, familial status and disability.  Among other things, the Act requires all multifamily housing constructed after March 12, 1991 to have basic accessibility features, including accessible routes without steps to all ground floor units.  More information about the Civil Rights Division and the laws it enforces is available at www.usdoj.gov/crt .  Individuals who believe that they may have been victims of housing discrimination can call the Housing Discrimination Tip Line at 1-800-896-7743, email the Justice Department at [email protected] , or contact the U.S. Department of Housing and Urban Development at 1-800-669-9777.

The complaint is an allegation of unlawful conduct.  The allegations in the complaint must still be proven in federal court.   

Anthony K. Mastrogiovanni, 30, of Crofton, Md., was sentenced today to serve 25 years in prison for sexually exploiting more than 30 male juveniles – ranging from 9 to 16 years of age – in Maryland and Louisiana to produce child pornography.

The sentence was announced by Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney for the District of Maryland Rod J. Rosenstein and Postal Inspector in Charge Gary R. Barksdale of the U.S. Postal Inspection Service’s Washington Division.

Mastrogiovanni was sentenced today by U.S. District Judge J. Frederick Motz in the District of Maryland.  In additional to his prison term, Mastrogiovanni was sentenced to serve lifetime supervised release.
 
On May 29, 2013, Mastrogiovanni pleaded guilty to one count of the sexual exploitation of minors to produce child pornography. 

According to court documents and proceedings, between 2006 and 2012, Mastrogiovanni, a U.S. Navy reservist, met and befriended his victims through his involvement in civic organizations or his military affiliation.  Mastrogiovanni captured sexually explicit video of the victims on cameras hidden in his residences in Louisiana and Maryland.

Mastrogiovanni has been in federal custody since he was arrested by inspectors of the U.S. Postal Inspection Service in Las Vegas on July 19, 2012.  A search of his Las Vegas hotel room recovered external hard drives containing over 30,000 images of child pornography, including video of his juvenile victims.  That same day, federal agents searched Mastrogiovanni’s apartment in Crofton where they discovered a hidden video camera and video transmitting equipment as well as digital media containing additional child pornography.

As part of his plea agreement, Mastrogiovanni will be required to register as a sex offender in the place where he resides, where he is an employee and where he is a student, under the Sex Offender Registration and Notification Act.

The investigation was conducted by the U.S. Postal Inspection Service, with the assistance of the Air Force Office of Special Investigations, Naval Criminal Investigative Service and FBI’s Maryland Child Exploitation Task Force.  The case was prosecuted by Trial Attorney Keith A. Becker of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS) and Assistant U.S. Attorney P. Michael Cunningham of the District of Maryland.

This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse, launched in May 2006 by the Department of Justice.  Led by U.S. Attorney’s Offices and CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.

Radiation oncology providers in Pensacola, Fla., will pay $3.5 million to the government and the state of Florida to resolve allegations that they billed Medicare, Medicaid and TRICARE – the health care program for uniformed service members, retirees and their families worldwide – for radiation oncology services that were not eligible for payment, the Justice Department announced today. The defendants include Gulf Region Radiation Oncology Centers Inc. (GRROC), Gulf Region Radiation Oncology MSO LLC, Sacred Heart Health System Inc., West Florida Medical Center Clinic P.A., Emerald Coast Radiation Oncology Center LLC (ECROC), Dr. Gerald Lowrey and Dr. Rod Krentel.

 
The government alleged that between 2007 and 2011, the defendants regularly billed for radiation oncology services that were not supervised by a physician, as required by Medicare, Medicaid and TRICARE, and that, in fact, these services were often performed while the defendant doctors were on vacation or were working at another radiation oncology clinic. The government also alleged that the defendants billed for other treatment services even when patients’ medical records provided no evidence that the services were rendered. The defendants also allegedly billed twice for the same services and misrepresented the level of a service provided to increase their reimbursement from the federal health care programs.

“It is critical that federal health care beneficiaries receive care that is properly supervised,” said Stuart F. Delery, Assistant Attorney General for the Justice Department’s Civil Division. “We will continue to pursue companies and individuals that seek to boost their profits at the expense of taxpayers.”

 
Since December 2007, Sacred Heart Health System Inc. and West Florida Medical Center Clinic P.A. have been the sole shareholders of Gulf Region Radiation Oncology MSO LLC and GRROC. GRROC provides radiation oncology services at two locations in Pensacola, Fla. Sacred Heart was also a shareholder in ECROC, a radiation oncology center located in Destin, Fla., approximately 60 miles from Pensacola. Beginning in December 2007, Lowrey and Krentel, both radiation oncologists, began providing physician services at the GRROC clinics, and in June 2008, they began providing services at ECROC.

 
“Submitting false claims for medical services raises the cost of health care for all of us as patients and taxpayers,” said Pamela C. Marsh, U.S. Attorney for the Northern District of Florida. “Patients, employees and others who suspect billing fraud on the part of health care providers should not hesitate to report such fraud to federal authorities. Health care providers – both corporations and individuals – must be held accountable when they submit false information.”

The allegations resolved by today’s settlement were first raised in a lawsuit filed against the defendants under the qui tam, or whistleblower, provisions of the False Claims Act. The act allows private citizens with knowledge of fraud to bring civil actions on behalf of the government and to share in any recovery. As part of the settlement, the whistleblower, Richard Koch, who previously worked at GRROC, will receive approximately $609,796 from the federal share of the settlement amount.

In addition to the $3.5 million payment, defendants GRROC, Lowrey and Krentel entered into Integrity Agreements with the U.S. Department of Health and Human Services’ Office of Inspector General (HHS-OIG) intended to deter wrongful conduct in the future. The agreements require enhanced accountability and monitoring activities to be conducted by both internal and independent external reviewers.

“Patient care supervision is critical for ensuring that Medicare beneficiaries receive needed, top-quality care,” said Christopher B. Dennis, Special Agent in Charge, HHS-OIG, Office of Investigations, Miami Region. “Our increased investigative efforts in the Florida panhandle show that we will protect taxpayer-funded government health programs regardless of where perpetrators might be located.”

Assistant Attorney General Delery thanked the Department of Health and Human Services’ Office of Inspector General; TRICARE Management Activity; the U.S. Attorney’s Office for the Northern District of Florida and the Justice Department’s Civil Division, Commercial Litigation Branch for the collaboration that resulted in the settlement.

This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by Attorney General Eric Holder and Health and Human Services Secretary Kathleen Sebelius.  The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation.  One of the most powerful tools in this effort is the False Claims Act.  Since January 2009, the Justice Department has recovered a total of more than $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 case is captioned United States ex rel. Koch v. Gulf Region Radiation Oncology Centers Inc., et al., No. 3:12-cv-00504 (N.D. Fla.). The claims settled by this agreement are allegations only, and there has been no determination of liability.

Muhammad Shahab, the mastermind of an almost $11 million Medicare fraud scheme in Detroit, was sentenced today to 50 months in prison.

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 and Special Agent in Charge Lamont Pugh III of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) Chicago Regional Office made the announcement.

Shahab, 53, was sentenced by U.S. District Judge Denise Page Hood in the Eastern District of Michigan.  In addition to his prison term, Shahab was sentenced to three years of supervised release and was ordered to pay more than $10.8 million in restitution, jointly and severally with his co-defendants. 
 
Shahab pleaded guilty to one count of health care fraud in February 2010.  According to information contained in plea documents, Shahab helped finance and establish two Detroit-area home health agencies, Patient Choice Home Healthcare Inc. (Patient Choice) and All American Home Care Inc. (All American).  Shahab admitted that while operating or being associated with both home health agencies, he and his co-conspirators billed Medicare for home health visits that never occurred.  
     
Shahab admitted that he and his co-conspirators recruited and paid cash kickbacks and other inducements to Medicare beneficiaries in exchange for the beneficiaries’ Medicare numbers and signatures on documents falsely indicating that they had visited Patient Choice and All American for the purpose of receiving physical or occupational therapy.  Shahab admitted that a large number of the beneficiaries were neither homebound nor in need of any physical therapy services.
     
Shahab also admitted to securing physician referrals for medically unnecessary home health services through the payment of kickbacks to physicians or individuals associated with physicians.  Shahab employed several physical therapists and physical therapy assistants to sign medical documentation needed to begin billing for home health care services, including initial payments and payments for each visit to a Medicare beneficiary.  Shahab acknowledged that he knew the physical therapists and physical therapy assistants were not actually conducting a large majority of the visits or treating a large majority of the patients, and confessed to billing and receiving payment from Medicare for services not rendered or medically unnecessary services.  
     
Between approximately August 2007 and October 2009, Shahab and his co-conspirators at Patient Choice and All American submitted approximately $10.8 million in claims to the Medicare program for physical and occupational therapy services that were never rendered or were medically unnecessary. 
 
This case was investigated by the FBI, HHS-OIG and the Internal Revenue Service 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 was prosecuted by Deputy Chief Gejaa Gobena, Assistant Chief Catherine Dick and Trial Attorney Niall O’Donnell 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.

The Justice Department and Internal Revenue Service (IRS) announced that Richard L. Furnelli, formerly of Holyoke and South Hadley, Mass., was indicted today in Springfield, Mass.  Furnelli is charged in a nine-count indictment with one count of obstructing the internal revenue laws, four counts of tax evasion and four counts of failing to file his individual income tax returns.

The indictment alleges that from 1994 to 2009, Furnelli obstructed the IRS’s ability to identify his income and compute the income taxes due and owing by using nominee owners to disguise his ownership interests in a network of businesses and assets, including entities operating an adult entertainment venue called the Gold Club. 
 
The indictment also alleges Furnelli earned over $2 million in total income from 2006 to 2009 and evaded his individual income taxes for that time period by, among other things, directing the payment of his income to the nominee entity, RLF Ventures LLC, utilizing a bank account in the name of a nominee in order to deposit his income and pay his personal expenses, as well as using cash extensively. The indictment further alleges that Furnelli failed to file his individual income tax returns from 2006 to 2009.
 
Furnelli 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; 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 was investigated by special agents of the IRS - Criminal Investigation. Tax Division Trial Attorneys Thomas Voracek and Mark McDonald are prosecuting the case.

A former mayor of South Pittsburg, Tenn., and a co-conspirator pleaded guilty today in Chattanooga, Tenn., to conducting an illegal gambling business, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and Special Agent in Charge Kenneth Moore of the FBI’s Knoxville, Tenn., Field Office. 

Former South Pittsburg Mayor James Michael Killian, 56, and Robert Barry Cole, 53, both of South Pittsburg, pleaded guilty today before U.S. District Judge Curtis L. Collier in the Eastern District of Tennessee to criminal informations charging them each with one count of conducting an illegal gambling business. 

According to court documents, Killian was mayor of South Pittsburg from 2005 until 2012.  During that time, Killian conducted a gambling operation that involved video gambling machines located at a convenience store he owned in South Pittsburg.  Killian also managed an “outlaw” lottery, in which bettors placed illegal bets on legal state lotteries.

In addition, Killian ran an illegal sports betting ring in partnership with Cole.  Cole received sports bets, collected wagers and paid successful bettors their winnings, and Killian and Cole split the proceeds of the operation.
 
At sentencing, scheduled for Jan. 9, 2013, Killian and Cole both face up to five years in prison and a $250,000 fine.  Killian is subject to criminal forfeiture of $38,475, four computers and 12 video gambling machines.  Cole is subject to criminal forfeiture of $19,020, a ring appraised at $17,500 and two computers. 

This case is being prosecuted by Trial Attorneys Mark Angehr, Barak Cohen and Peter Sprung of the Criminal Division’s Public Integrity Section and is being investigated by the FBI.

A former executive of Ryan International Airlines, a charter airline company located in Rockford, Ill., was sentenced today to serve 87 months in prison and to pay restitution for participating in kickback schemes to defraud Ryan, the Department of Justice announced.

Wayne E. Kepple, the former vice president of ground operations for Ryan, was sentenced to serve 87 months in prison and to pay $529,998 in restitution.  On Nov. 4, 2011, Kepple pleaded guilty in U.S. District Court in West Palm Beach, Fla., to three counts of conspiracy to commit wire fraud and honest services fraud and three counts of wire fraud.  The charges against Kepple stem from a kickback scheme involving Robert A. Riddell, the former owner and operator of an airline security and ground service company, as well as separate kickback schemes involving David A. Chaisson, the former owner and operator of an Indiana flight management services company, James E. Murphy, the former owner and operator of a Florida aviation fuel supply company, and others. 

Ryan provided air passenger and cargo services for corporations, private individuals and the U.S. government – including the U.S. Department of Defense and the U.S. Department of Homeland Security.

 
“Today’s sentence should serve as a stiff deterrent to executives who might be tempted to solicit a kickback from their supplies in exchange for their honest services,” said Bill Baer, Assistant Attorney General in charge of the Antitrust Division. “The Antitrust Division is committed to ensuring that contracts are won based on competition and not collusion.”

According to court documents, Kepple was in charge of contracting with providers of goods and services on behalf of Ryan and approving the invoices submitted by the providers to Ryan for payment. From October 2005 through at least August 2009, Kepple participated in three separate conspiracies in which he received kickback payments of more than $520,000 from Riddell, Murphy, Chaisson and others in exchange for Kepple awarding them Ryan airline services and fuel contracts.  According to court documents, the payments from Chaisson and Riddell included the proceeds of fabricated invoices submitted by their companies to Ryan.

As a result of the ongoing investigation, four individuals, including Kepple, have pleaded guilty and been sentenced to prison.  On Oct. 28, 2011, Murphy was sentenced to serve 23 months in prison and to pay $42,500 in restitution and Chaisson was sentenced to serve 16 months in prison and to pay $50,742 in restitution.  On Jan. 27, 2012, Riddell was sentenced to serve 24 months in prison and to pay $131,540 in restitution. Kepple’s 87-month sentence reflects his central role in multiple kickback schemes.

On Aug. 13, 2013, a fifth individual, Sean E. Wagner, and his company, Aviation Fuel International Inc. (AFI), a Florida-based airline fuel supply company, were indicted for participating in a conspiracy to defraud Ryan by making kickback payments to Kepple in exchange for awarding business to AFI.  That case is ongoing.

The investigation is being conducted by the Antitrust Division’s National Criminal Enforcement Section and the U.S. Department of Defense’s Office of Inspector General with assistance from the U.S. Attorney’s Office for the Southern District of Florida.  Anyone with information concerning anticompetitive conduct in the airline charter services industry is urged to call the Antitrust Division’s National Criminal Enforcement Section at 202-307-6694 or visit www.justice.gov/atr/contact/newcase.htm.

SACRAMENTO, California — Tamara Teresa Tikal, de 43 años de edad, de Brentwood en el Contado de Contra Costa y Ray Jan Kornfeld, de 57 años de edad, de Las Vegas, fueron arrestados hoy por su participación en una estafa que ha defraudado a propietarios de viviendas por todo California y en otros lugares, anunciaron el Abogado de los Estados Unidos, Benjamin B. Wagner, y el Abogado Genral de California, Kamala D. Harris.

El miércoles, un gran jurado federal emitió un pliego acusatorio contra Alan David Tikal, de 45 años de edad, para añadir cargos contra él y acusar a su esposa, Tamara Tikal y Kornfeld, quienes alegadamente continuaron la estafa mientras él estaba en arrestado esperando por un juicio. El pliego acusatorio fue abierto hoy después de los arrestos.

Conforme a los documentos del tribunal, a principios de enero de 2010 Alan Tikal operó un esquema de estafa a gran escala de rescate de hipotecas al ofrecer eliminar las hipotecas de los dueños de propiedades y reemplazarlas con una deuda nueva con su compañía, KATN Trust. Él afirmaba que el préstamo nuevo sólo sería por el 25% del principal original. Las víctimas pagaron miles de dólares en cuotas por adelantado y luego le hicieron pagos regulares a él por sus nuevos préstamos. Tikal y sus subordinados les ordenaron a las víctimas no pagar sus hipotecas originales y que hicieran caso omiso de toda la correspondencia de los prestamistas originales. Esto tuvo como resultado que muchas de las víctimas perdieran sus casas mediante ejecución hipotecaria. Alan Tikal fue arrestado el 28 de septiembre de 2012 y acusado mediante pliego acusatorio por cargos de fraude de correo.

Luego de su arresto, las autoridades federales del orden público continuaron investigando el caso. En noviembre de 2012, la policía se enteró de que el esquema continuaba y registraron la oficina de KATN en Las Vegas, incautando múltiples computadoras y miles de documentos. Màs tarde este año, la policía se enteró que a pesar de estos esfuerzos, el esquema continuó con las víctimas propietarios de vivienda que siguieron haciendo pagos a la compañía de los acusados. Conforme al pliego acusatorio anterior, Tamara Tikal y Kornfeld habían tenido una función central en continuar operando el esquema. Un elemento significativo del esquema que continuó fue un caso de bancarrota en el Distrito de Nevada, presentado a nombre de Alan Tikal. Tikal ha nombrado la propiedad de muchos de sus clientes víctimas como su propiedad personal, evitando así que las instituciones financieras que tenían intereses en esas propiedades pudieran ejecutar las hipotecas. En total, el esquema de Tikal victimizó a màs de mil propietarios de viviendas, quienes habían pagado màs de $3.4 millones. De los propietarios de vivienda identificados, aproximadamente el 95 por ciento reside en California y por lo menos 185 residían dentro del Distrito del Este de California.

El Fiscal de los EE.UU., Wagner, dijo: “Procesar los casos de fraude hipotecario continúa siendo una de las prioridades màs importantes de esta oficina. Los que victimizan a los propietarios de viviendas cuando màs vulnerables estàn, cuando tienen el temor de que van a perder sus casas, son los estafadores hipotecarios màs deplorables. Continuaremos procesando sin descansar a los que participen en ese tipo de estafa.”

“A través de su alegado esquema fraudulento de alivio hipotecario, Tikal, su esposa y su co-conspirador Kornfeld se metieron al bolsillo màs de $3.4 millones en cuotas iniciales y pagos de  ‘préstamo’ que hicieron los propietarios de vivienda que estaban teniendo dificultades para mantener un techo donde vivir”, dijo Christy Romero, Inspectora General Especial para TARP (SIGTARP). La petulancia de su alegada estafa que engañó a màs de 1,000 víctimas quedó demostrada por el mismo nombre de la entidad comercial, KATN Trust, que supuestamente es una abreviatura, por sus siglas en inglés, para “Pateando Traseros, Tumbando Cabezas”. Se alega que la estafa explotaba la ley de bancarrota como una manera de detener los procesos de ejecución hipotecaria por parte de los prestamistas hipotecarios, incluyendo a participantes de TARP. Muchos de los propietarios de vivienda que fueron engañados no hablaban inglés como su primer idioma. SIGTARP y nuestros socios del orden público investigaràn a fondo los alegatos de fraude relacionados con TARP y se aseguraràn de que los que lo cometen sean juzgados por sus delitos.”

“Mientras continúa la crisis de las ejecuciones hipotecarias, estamos viendo un alza en las estafas que se dirigen a los propietarios de vivienda que tienen dificultades”, dijo el Abogado General de California, Harris. “Estos depredadores les roban los ahorros de toda la vida y su porción del sueño americano a familias inocentes. Agradezco el buen trabajo que ha hecho el Grupo de Fuerza Operativa contra el Fraude Hipotecario de California y de nuestros colegas en el  Departamento de Justicia de los EE.UU por resolver este caso.”

“Las estafas de rescates hipotecarios se aprovechan de los dueños de viviendas que estàn teniendo dificultades y se confían. El impacto de este tipo e delito es de extrema importancia”, dijo José M. Martínez, Agente Especial a Cargo de Investigaciones Criminales del IRS (IRS-CI, por sus siglas en inglés). “El fraude en la industria hipotecaria ha tenido una función importante en casi destruir la economía de esta nación. IRS-CI està comprometida con procesar a los que se llenan los bolsillos con ganancias producto de estos esquemas.”

Este caso es una acusación conjunta por la Oficina del Abogado General de los Estados Unidos para el Distrito del Este de California y la Oficina del Abogado General de California. Es producto de una investigación extensa por la Inspectora General Especial para el Programa de Alivio para los Activos en Dificultad (SIGTARP), el Servicio de Rentas Internas - Investigaciones Criminales, el Departamento de Justicia de California  la Oficina del Abogado de Distrito del Condado de Stanislaus. El Abogado Asistente de los Estados Unidos, Philip Ferrari, y la Abogada General Auxiliar, Maggy Krel, son los fiscales del caso.

Tamara Tikal comparecerà al Tribunal hoy para leerle sus cargos y derechos. Se espera que traigan a Kornfeld a Sacramento en el futuro cercano. Alan Tikal tiene fecha de juicio programada para el 3 de febrero de 2014. Si se determina que son culpables, enfrentan una sentencia de hasta 30 años en prisión. Sin embargo, cualquier sentencia impuesta se determinarà a discreción del tribunal después de considera cualesquiera factores de sentencia mandados por estatuto y las Guías Federales de Sentencia, que toman en cuenta ciertas variables. Los cargos solamente son alegados pues se presume que los acusados son inocentes a menos que se les pruebe culpables màs allà de duda razonable.

Este caso se hizo en relación con el Grupo Operativo de Detección de Fraude Financiero que estableció el presidente de los EE.UU. El grupo operativo se estableció para poner en pràctica un esfuerzo enérgico para investigar y procesar los delitos financieros. Con màs de 20 agencias federales, 94 oficinas del abogado de los EE.UU. y los socios estatales y locales, es la coalición policíaca màs amplia que nunca hayan formado las agencias de investigación y regulación para combatir el fraude. Desde que se formó, el grupo operativo ha logrado avanzar mucho en facilitar las investigaciones y acusaciones de delitos financieros; mejorar la coordinación y cooperación entre las autoridades federales, estatales y locales; atender el discrimen en los mercados de crédito y financieros y establecer contacto con el público, las víctimas, las instituciones financieras y otras organizaciones. Para màs información, visite www.StopFraud.gov.

A pest control services company and its owner have been charged today in the U.S. District Court for the Middle District of Georgia with conspiracy, unlawful use of pesticides, false statements, falsification of records and mail fraud, announced Robert G. Dreher, Acting Assistant Attorney General of the Justice Department’s Environment and Natural Resources Division and Michael J. Moore, U.S. Attorney for the Middle District of Georgia. 

Steven A. Murray, 54, of Pelham, Ala., and his company, Bio-Tech Management Inc., were charged in a felony indictment with one count of conspiracy, 10 counts of making false statements, 20 counts of falsifying records, 10 counts of mail fraud and 10 counts of unlawful use of a pesticide.
 
The indictment alleges that from October 2005 to June 2009, Steven Murray and Bio-Tech repeatedly misapplied the registered pesticide Termidor SC in nursing homes in the state of Georgia and falsified documents to conceal the unlawful use.  The indictment further alleges that Murray and Bio-Tech sent invoices through the U.S. Mail to their nursing home clients to solicit payment for the unlawful pesticide applications.   

According to the indictment, Steve Murray and Bio-Tech provided monthly pest control services to nursing homes in Georgia by spraying pesticides in and around their clients’ facilities.  The indictment alleges that, at the direction of Murray, Bio-Tech employees routinely applied the pesticide Termidor indoors more than twice a year, contrary to the manufacturer’s label instructions.  The indictment further alleges that after the Georgia Department of Agriculture made inquiries regarding Bio-Tech’s misuse of Termidor and other pesticides, Murray directed several of his Bio-Tech employees to alter company service reports with the intent to obstruct an investigation.         

U.S. Environmental Protection Agency (EPA) regulations require that all pesticides be registered, properly labeled, and applied as specified by manufacturer’s labeling to protect public health and the environment.

A criminal indictment is not a finding of guilt.  An individual or company charged by criminal indictment is presumed innocent unless and until proven guilty in a court of law. 

The falsifying records and mail fraud charge carry a maximum sentence of 20 years in prison and $250,000 fine per count.  The false statements charges each carry a maximum sentence of five years in prison and a $250,000 fine.  
 
These cases are being investigated by Special Agents of the EPA’s Criminal Investigations Division in Atlanta and prosecuted by Trial Attorneys Richard J. Powers and Adam C. Cullman of the Justice Department’s Environment and Natural Resources Division, Environmental Crimes Section.

One of the leaders of a criminal conspiracy that laundered more than $20 million through “shell” business bank accounts was sentenced today to 151 months in prison.

Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and U.S. Attorney Kenneth Magidson of the Southern District of Texas made the announcement.
 
Willie Whitehurst, 45, of Houston, was sentenced by U.S. District Judge Lee H. Rosenthal of the Southern District of Texas.  In January and February 2013, Whitehurst and co-conspirators Enrique Morales, Fulton Smith and Anthony Foster pleaded guilty to conspiracy to commit money laundering and conspiracy to operate an unlicensed money transmitting business.  Another co-conspirator, Sarah Combs, also pleaded guilty to conspiracy to operate an unlicensed money transmitting business.
 
In August 2012, a federal grand jury in Houston indicted the five defendants for their parts in a large “Black Market Peso Exchange” scheme.  From October 2009 to September 2011, the defendants placed U.S. currency gained through the sale of drugs in U.S. cities into bank accounts held in the names of the organization’s “shell” companies.  The money was then transferred to different accounts in the U.S. and in Mexico.  In exchange, pesos were transferred back to accounts owned by the organization’s clients.

Morales was previously sentenced to 188 months in prison, and Foster received a sentence of 121 months in prison.  Smith was sentenced to 30 months, while Combs was sentenced to 24 months in prison.

The case was investigated by the Drug Enforcement Administration and the Internal Revenue Service – Criminal Investigation Division.  Assistant U.S. Attorney Ted Imperato of the Southern District of Texas and Trial Attorney Keith Liddle of the Money Laundering and Bank Integrity Unit of the Criminal Division’s Asset Forfeiture and Money Laundering Section prosecuted the case.

A federal grand jury in Covington, Ky., has returned an indictment against G.S. Electech Inc. executive, Shingo Okuda for his role in an international conspiracy to fix prices and rig bids of auto parts used on antilock brake systems installed in U.S. cars, the Department of Justice announced today. Today’s charge is the first to be filed in Kentucky in the department’s ongoing investigation into anticompetitive conduct in the automotive parts industry.

The indictment, filed today in the U.S. District Court for the Eastern District of Kentucky, charges Okuda, a Japanese national, with engaging in a conspiracy to rig bids for, and to fix, stabilize, and maintain the prices of speed sensor wire assemblies, which are installed in automobiles with an antilock brake system (ABS), sold to Toyota Motor Corp. and Toyota Motor Engineering and Manufacturing North America Inc. (collectively Toyota) in the United States and elsewhere.

G.S. Electech Inc. manufactures, assembles and sells a variety of automotive electrical parts, including speed sensor wire assemblies. The speed sensor wire assemblies connect a sensor on each wheel to the ABS to instruct it when to engage.

According to the charge, Okuda and his co-conspirators carried out the conspiracy by, among other things, agreeing during meetings and discussions to coordinate bids and fix prices of automotive parts submitted to Toyota. According to the charge, Okuda’s involvement in the conspiracy lasted from at least as early as January 2003 until at least February 2010.

“ Today’s indictment marks the 16th executive to be charged in the Antitrust Division’s continuing investigation of price fixing in the auto parts industry,” said Scott D. Hammond, Deputy Assistant Attorney General of the Antitrust Division’s criminal enforcement program. “Holding individuals accountable for their actions is the surest way to deter executives from choosing to collude rather than to compete for business.”

“Those who engage in price fixing, bid rigging and other fraudulent schemes harm the automotive industry by driving up costs for vehicle makers and buyers,” said John Robert Shoup, Acting Special Agent in Charge, FBI Detroit Division.  “The FBI is committed to pursuing and prosecuting these individuals for their crimes.”

Okuda is charged with price fixing in violation of the Sherman Act, which carries a maximum sentence for individuals of 10 years in prison and a criminal fine of $1 million. The maximum fine for an individual may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.

Including Okuda, 11 companies and 16 executives have been charged in the Justice Department’s ongoing investigation into the automotive parts industry. To date, more than $874 million in criminal fines have been imposed and 14 individuals have been sentenced to pay criminal fines and to serve jail sentences ranging from a year and a day to two years each. One other executive has agreed to serve time in prison and is scheduled to be sentenced on Sept. 25, 2013.

In May 2012, G.S. Electech Inc. pleaded guilty and was sentenced to pay a $2.75 million criminal fine for its role in the conspiracy related to speed sensor wire assemblies.

Today’s charge is the result of an ongoing federal antitrust investigation into price fixing, bid rigging and other anticompetitive conduct in the automotive parts industry, which is being conducted by each of the Antitrust Division’s criminal enforcement sections and the FBI. Today’s charges were brought by the Antitrust Division’s National Criminal Enforcement Section and the FBI’s Detroit Field Office, with the assistance of the FBI headquarters’ International Corruption Unit. Anyone with information on price fixing, bid rigging and other anticompetitive conduct related to other products in the automotive parts industry should contact the Antitrust Division’s Citizen Complaint Center at 1-888-647-3258, visit www.justice.gov/atr/contact/newcase.html or call the FBI’s Detroit Field Office at 313-965-2323.

13-1013

A federal grand jury in St. Louis has indicted Stan Lee Stanback, 47, a police officer formerly with the Velda City Police Department, on charges related to the assaults of two juveniles and one adult on Sept.17, 2008.

Stanback is charged with three counts of using unreasonable force on the three victims listed in the indictment when he punched and struck each one of them.  The first two counts allege that Stanback used a police baton to assault the victims.  All three counts allege that Stanback’s actions resulted in injury to all of the victims.

The indictment also charges Stanback with making false statements to FBI agents when he intentionally lied, claiming that prior to his assaults on the victims, he was surrounded by 15 men in the parking lot of the Velda City Police Department and was forced to draw his gun during the encounter.  The indictment alleges that this was not true because Stanback knew at the time he spoke with FBI agents that he had only been approached by three juveniles and one adult and that he did not draw his gun.  

Stanback faces a statutory maximum penalty of 10 years in prison for each of the civil rights violations and five years in prison for the false statements charge.

An indictment is merely an accusation, and the defendant is presumed innocent unless proven guilty.

This case is being investigated by the St. Louis Division of the Federal Bureau Investigation and is being prosecuted by Fara Gold of the Civil Rights Division of the U.S. Department of Justice.

Four members and associates of the Armenian Power gang and four other individuals pleaded guilty late yesterday to charges relating to the activities of the Armenian Power criminal enterprise, including racketeering conspiracy, bank fraud, aggravated identity theft, drug-trafficking and illegal possession of firearms.

The guilty pleas were announced today by 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 and Assistant Director in Charge Bill L. Lewis of the FBI’s Los Angeles Field Office.

 The following defendants pleaded guilty before U.S. District Judge Dean D. Pregerson in the Central District of California:

• Karo Yerkanyan, aka “Guilty,” 32, of Tujunga, Calif., pleaded guilty to racketeering conspiracy, bank fraud, aggravated identity theft, conspiracy to possess with intent to distribute marijuana and felon-in-possession of a firearm; • Arman Tangabekyan, aka “Spito” and “Thick Neck,” 34, of Encino, Calif., pleaded guilty to racketeering conspiracy, bank fraud and aggravated identity theft; • Artur Pembejian, aka “Cham,” 36, of Burbank, Calif., pleaded guilty to racketeering conspiracy; • Raymond Tarverdyan, aka “Rye,” 35, of Montrose, Calif., pleaded guilty to racketeering conspiracy and bank fraud; • Simon Antonyan, aka “Simo,” 38, of Hollywood, Calif., pleaded guilty to aggravated identity theft; • Khachatur Arakelyan, aka “Khecho,” 39, of Glendale, Calif., pleaded guilty to aggravated identity theft; • Vartenie Ananian, 29, of Tujunga, pleaded guilty to bank fraud; and

• Adam Davoodian, 32, of Glendale, Calif., pleaded guilty to conspiracy to possess with intent to distribute marijuana.

The defendants who pleaded guilty yesterday were among 70 individuals charged in a 140-count indictment in July 2011 for criminal activities associated with the Armenian Power gang.  The indictment accused 29 defendants, including four of those who pleaded guilty yesterday, of participation in the Armenian Power RICO conspiracy.  The RICO conspiracy charge alleges a host of illegal activities, many of which involved sophisticated fraudulent schemes of identity theft, bank fraud, credit card skimming, manufacturing counterfeit checks and laundering criminal proceeds, often electronically.  In addition, defendants were involved in a variety of violent crimes, such as extortion, kidnapping and firearms offenses.  Among the schemes charged in the racketeering indictment is a bank fraud and identity theft scheme that victimized hundreds of customers of 99 Cents Only Stores throughout Southern California.  Through the scheme, defendants caused more than $2 million in losses when they secretly installed sophisticated “skimming” devices to steal customer debit card account information at cash registers, and then used the skimmed information to create counterfeit debit cards to steal money from victims’ bank accounts.

The eight defendants who pleaded guilty yesterday played various roles in the activities of the Armenian Power gang, including participating in bank fraud, drug distribution, access device fraud, identity theft and illegal firearm possession. 

Yerkanyan, a member of the Armenian Power conspiracy, participated in a bank fraud scheme that obtained the personal identifying information and account information of victims.  He and his co-conspirators used the information to open fraudulent bank accounts, loans and lines of credit at HSBC Bank and Bank of America without the knowledge of the victims.  Tangabekyan, a member of the Armenian Power conspiracy, participated in a bank fraud scheme by obtaining personal information and account information for victims and then obtaining or transferring over $475,000 in funds. 

Yerkanyan also participated, along with Davoodian, in a scheme to steal approximately 207 pounds of marijuana, worth approximately $450,000, from another drug distributor. 

Pembejian, a member of the Armenian Power conspiracy, abetted the illegal possession of a firearm by a leader of the Armenian Power gang, Mher Darbinyan. 

Tarverdyan, an Armenian Power member, and Antonyan, Arakelyan and Ananian participated in the scheme to install secret “skimming” devices at the 99 Cents Only Stores in order to obtain victims’ account information.

According to court documents, the Armenian Power street gang formed in the East Hollywood district of Los Angeles in the 1980s.  The gang’s membership consisted primarily of individuals of Armenian descent, as well as of other countries within the former Soviet bloc.  The Armenian Power has been designated under California state law as a criminal street gang and is believed to have over 250 documented members, as well as hundreds of associates. According to court documents, Armenian Power members and associates regularly carry out violent criminal acts, including murders, attempted murders, kidnappings, robberies, extortions, and witness intimidation in order to enrich its members and associates and preserve and enhance the power of the criminal enterprise.

The defendants are scheduled to be sentenced beginning on Nov. 25, 2013.  Yerkanyan faces a maximum penalty of 102 years in prison.  Tangabekyan faces a maximum penalty of 52 years in prison.  Tarverdyan faces a maximum penalty of 50 years in prison.  Ananian faces a maximum penalty of 30 years in prison.  Pembejian and Davoodian each face a maximum penalty of 20 years in prison.  And Antonyan and Arakelyan each face a maximum penalty of two years in prison.

Fifty-one defendants have previously pleaded guilty for their roles in the activities of the Armenian Power gang. 
 
The case is being prosecuted by Assistant U.S. Attorneys Martin Estrada, Elizabeth Yang and Stephen Wolfe of the Central District of California and Trial Attorney Andrew Creighton of the Criminal Division’s Organized Crime and Gang Section.  The case was investigated by the Eurasian Organized Crime Task Force, which is comprised of the FBI, the U.S. Secret Service, the Los Angeles Police Department, the Glendale Police Department, the Burbank Police Department, the Internal Revenue Service and U.S. Immigration and Customs Enforcement – Homeland Security Investigations.

Beginning on Oct. 1, 2013, all mail addressed to the Executive Office for Immigration Review’s (EOIR) Headquarters in Falls Church, VA, will be processed through a different mail processing facility. This facility change requires that EOIR use a new zip code. The street address of 5107 Leesburg Pike, Falls Church, VA, will remain the same, but the zip code will change from 22041 to 20530. The new mailing address is:

Mail and filings for the Office of the Chief Administrative Hearing Officer should be addressed to:

The Board of Immigration Appeals will no longer maintain a Post Office Box and will only accept mail sent to its street address. All Board filings and correspondence should be addressed to:

Mail addressed with the zip code 22041 after Oct. 1, 2013, may result in delayed delivery to all Headquarters EOIR offices.

- EOIR -

The Executive Office for Immigration Review (EOIR) is an agency within the Department of Justice. Under delegated authority from the Attorney General, immigration judges and the Board of Immigration Appeals interpret and adjudicate immigration cases according to United States immigration laws. EOIR’s immigration judges conduct administrative court proceedings in immigration courts located throughout the nation. They determine whether foreign-born individuals—whom the Department of Homeland Security charges with violating immigration law—should be ordered removed from the United States or should be granted relief from removal and be permitted to remain in this country. The Board of Immigration Appeals primarily reviews appeals of decisions by immigration judges. EOIR’s Office of the Chief Administrative Hearing Officer adjudicates immigration-related employment cases. EOIR is committed to ensuring fairness in all of the cases it adjudicates.

A former officer of Fendih Medical Supply Inc. was sentenced to serve 51 months in prison yesterday in Los Angeles for his role in a fraud scheme that resulted in $1.5 million in fraudulent claims to Medicare.  In addition, a physician was sentenced to 27 months in prison for his role in the 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.

Godwin Onyeabor, 49, of San Bernandino, Calif., was sentenced on Sept. 9, 2013, by U.S. District Judge Manuel L. Real in the Central District of California to 51 months in prison.  In addition to his prison term, Onyeabor was sentenced to three years of supervised release. Restitution will be determined at a later date.  Dr. Sri J. Wijegunaratne, 58, of Anaheim, Calif., was sentenced to 27 months in prison by Judge Real.  In addition to his prison term, Wijegunaratne was sentenced to three years of supervised release and ordered to pay restitution in the amount of $87,846.

On April 24, 2013, a jury in Los Angeles federal court found Wijegunaratne, Onyeabor and Heidi Morishita, 48, guilty of one count of conspiracy to pay and receive kickbacks.  In addition, Wijegunaratne and Onyeabor were found guilty of conspiracy to commit health care fraud.  Wijegunaratne was found guilty of seven counts of health care fraud, and Onyeabor was found guilty of eleven counts of health care fraud. 

During trial, the evidence showed that Onyeabor, as the former officer of a durable medical equipment (DME) supply company, fraudulently billed more than $1 million to Medicare for DME that was either never provided to its Medicare beneficiaries or was not medically necessary.  Wijegunaratne provided Onyeabor and others with medically unnecessary power wheelchair prescriptions, and both Wijegunaratne and Morishita sold power wheelchair prescriptions to Onyeabor and others.  

The evidence showed that Onyeabor and others paid Wijegunaratne and Morishita cash kickbacks for fraudulent prescriptions for DME, and Onyeabor and others used these prescriptions to bill Medicare for the power wheelchairs and other DME.  Several Medicare beneficiaries testified that they were lured to medical clinics with the promise of free items such as vitamins and juice, only to receive power wheelchairs which they did not need and did not want, and were unsuccessful in their attempts to reject delivery of the power wheelchairs from Onyeabor’s supply company. 

As a result of this fraud scheme, Onyeabor, Wijegunaratne and others submitted and caused the submission of approximately $1.5 million in false and fraudulent claims to Medicare and received almost $1 million on those claims.

Morishita’s sentencing is scheduled for Sept. 30, 2013. 

The case is being investigated by the FBI and the Los Angeles Region of the HHS-Office of Inspector General (HHS-OIG) and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Central District of California.  The case is being prosecuted by Assistant Chief Benton Curtis, Trial Attorneys Fred Medick and Alexander Porter 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, are taking steps to increase accountability and decrease the presence of fraudulent providers.  To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.

A former Lorain County, Ohio corrections officer pleaded guilty today to one count of deprivation of rights under color of law, announced Jocelyn Samuels, Acting Assistant Attorney General for the Civil Rights Division, Steven M. Dettelbach, U.S. Attorney for the Northern District of Ohio and Stephen D. Anthony, Special Agent in Charge of the FBI’s Cleveland Office.

According to court documents, Marlon Tayor, 47, of Vermilion, Ohio, assaulted an inmate by striking him repeatedly while working as a corrections officer in the Lorain County Jail.

These actions caused bodily injury to the inmate and deprived the inmate of the right to be free from cruel and unusual punishment, according to court documents.

“We in the Civil Rights Division are committed to working with our partners in the U.S. Attorney’s Office and the FBI to identify, and where appropriate, prosecute instances of law enforcement abuse,” said Acting Assitant Attorney General Samuels.

 “The vast majority of law enforcement officials do a great job,” said U.S. Attorney Dettelbach said. “When someone abuses the power and privileges of their office, however, they can and will be held accountable.”

“The acknowledgment of excessive force exhibited by a fellow officer in law enforcement is disconcerting,” said Special Agent in Charge Anthony.  “The public should be reminded that the vast majority of those serving within the criminal justice system do so with honor and integrity.  Any allegation of abuse or excessive force involving law enforcement officers takes on a particular sense of urgency and will continue to be a priority for the FBI.”

Taylor is scheduled to be sentenced on Dec. 19, 2013.

This investigation was conducted by the FBI’s Cleveland Office.  The case is being prosecuted by Assistant U.S. Attorneys Antoinette T. Bacon and Lauren Bell and Civil Rights Division Trial Attorney Betsy Biffl.

WASHINGTON – The Department of Justice, U.S. Environmental Protection Agency (EPA), and South Carolina Department of Health and Environmental Control (DHEC) announced a proposed settlement with the City of Columbia to resolve violations of the Clean Water Act (CWA), including unauthorized overflows of untreated raw sewage.  Columbia has agreed to undertake a thorough assessment of, and implement extensive improvements to, its sanitary sewer system at an estimated cost of $750 million. 

In addition, Columbia will implement a $1 million supplemental environmental project to restore streams, reduce flooding, and improve water quality in segments of Rocky Branch, Smith Branch and Gills Creek, waterways that run through historically low income and minority neighborhoods.

“This settlement will bring badly needed improvements to Columbia’s aging sewer infrastructure, reduce the dangers of sewage contamination and improve the quality of waterways in historically disadvantaged communities,” said Robert G. Dreher, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division.  “It is good news for human health and the environment of South Carolina’s capital city today and for future generations.”

“In this settlement, the city of Columbia has taken responsibility for its aging sewer treatment system,” said U.S. Attorney for the District of South Carolina Bill Nettles.  “The city’s leadership and engineers have worked many long, hard hours with the engineers at the EPA and the Department of Health and Environmental Control in hammering out a solution that addresses the problems in the city sewer system, improves the quality of our rivers and streams, and the health and safety of South Carolinians for decades to come.  For that we are grateful.”

“Sewage overflows are a major problem that affects water quality in the Southeast and across the entire country because of aging infrastructure,” said Acting EPA Regional Administrator Stan Meiburg.  “Bringing systems like Columbia’s into compliance is one of EPA’s top enforcement priorities, and through this settlement the city is taking positive steps to correct longstanding sewer overflow problems.”

“We are pleased this matter has been resolved through a consent decree, rather than costly litigation,” said DHEC Director Catherine Templeton.  “This agency will continue to work closely with the city of Columbia and our federal partners to ensure the agreed-upon improvements are realized, and the health of the citizens and environment are protected.”

The proposed consent decree requires Columbia to implement a comprehensive sewer system assessment and rehabilitation program to address the existing problems of raw sewage overflows.  Based on the sewer system assessment, the city will develop and implement remedial projects and infrastructure upgrades to address conditions causing sewer overflows.  These remedial projects will be in addition to infrastructure upgrades already underway or planned by Columbia, which the consent decree also requires to be completed.  Lastly, the city will develop and implement specific programs designed to ensure proper management, operation and maintenance of its sewer system over the long-term to prevent future sewer overflows. 

Keeping raw sewage out of the waters of the United States is one of the EPA’s national enforcement initiatives for 2011 to 2013.  The initiative focuses on reducing sewer overflows, which can present a significant threat to human health and the environment.  These reductions are accomplished by obtaining cities’ commitments to implement timely, affordable solutions to these problems.

The United States has reached similar agreements in the past with numerous municipal entities across the Southeast, including Mobile and Jefferson County (Birmingham), Alabama; Miami-Dade County, Fla.; Atlanta and Dekalb County, Ga.; Northern Kentucky Sanitation District #1, Louisville/Jefferson County MSD, and Lexington-Fayette Urban County Government, Ky.; Jackson, Miss.; Wilmington/New Hanover County/Cape Fear Public Utility Authority, N.C.; and Memphis, Knoxville Utilities Board, Chattanooga and Nashville MWS, Tenn..   

The proposed settlement is memorialized in a consent decree that was lodged yesterday in the U.S. District Court for the District of South Carolina.  The proposed consent decree is subject to a 30-day public comment period and final court approval. A copy is available on the Department of Justice website at: www.justice.gov/enrd/Consent Decrees.html.

More information on EPA’s national enforcement initiative is available at: www.epa.gov/compliance/data/planning/initiatives/2011sewagestormwater.html

NEW YORK -- Immigration Judge Terry A. Bain from the Executive Office for Immigration Review, New York Immigration Court, delivered the keynote speech and administered the oath of allegiance to approximately 150 candidates during a naturalization ceremony at 26 Federal Plaza in New York on September 6, 2013. The New York District Office of U.S. Citizenship and Immigration Services, Department of Homeland Security, hosted the ceremony.

Biographical Information

Attorney General Janet Reno appointed Judge Bain in February 1994. Judge Bain received a bachelor of arts degree in 1973 from George Washington University, and a juris doctorate in 1980 from Brooklyn Law School. From 1986 to 1994, she worked as an attorney for Whitman, Breed, Abbott & Morgan in New York. From 1981 to 1986, she worked in private practice with Barst & Mukamal in New York. Judge Bain is a member of the New York State Bar.

- EOIR -

The Executive Office for Immigration Review (EOIR) is an agency within the Department of Justice. Under delegated authority from the Attorney General, immigration judges and the Board of Immigration Appeals interpret and adjudicate immigration cases according to United States immigration laws. EOIR’s immigration judges conduct administrative court proceedings in immigration courts located throughout the nation. They determine whether foreign-born individuals—whom the Department of Homeland Security charges with violating immigration law—should be ordered removed from the United States or should be granted relief from removal and be permitted to remain in this country. The Board of Immigration Appeals primarily reviews appeals of decisions by immigration judges. EOIR’s Office of the Chief Administrative Hearing Officer adjudicates immigration-related employment cases. EOIR is committed to ensuring fairness in all of the cases it adjudicates.

The Justice Department announced today that it will monitor elections on Sept. 10, 2013, in Cuyahoga County, Ohio, and in Queens County, N.Y.  The monitoring will ensure compliance with the Voting Rights Act, which prohibits discrimination in the election process on the basis of race, color or membership in a minority language group. 

In Cuyahoga County, the Department will assign federal observers from the U.S. Office of Personnel Management (OPM) to monitor polling place activities based on a court order.  The observers will watch and record activities during voting hours at polling locations in this jurisdiction, and Civil Rights Division attorneys will coordinate the federal activities and maintain contact with local election officials.

In addition, Justice Department personnel will monitor polling place activities in Queens County.  A Civil Rights Division attorney will coordinate federal activities and maintain contact with local election officials.

Each year, the Justice Department deploys federal observers from OPM, as well as departmental staff, to monitor elections across the country.  To file complaints about discriminatory voting practices, including acts of harassment or intimidation, voters may call the Voting Section of the Justice Department’s Civil Rights Division at 1-800-253-3931.

Visit www.justice.gov/crt/about/vot/ for more information about the Voting Rights Act and other federal voting rights laws.

The Justice Department announced today that it reached an agreement with Kelly Services Inc., a staffing company based in Troy, Mich., resolving an allegation of discrimination based on citizenship status during the employment eligibility re-verification process at one of its branch locations in Schaumburg, Ill.  The investigation was initiated by the department’s Office of Special Counsel for Immigration-Related Unfair Employment Practices (OSC) based on information obtained from a former employee of the company who had contacted that office. 

The department’s investigation concluded that Kelly Services terminated the individual’s employment during the employment eligibility re-verification process when he did not produce a new U.S. Citizenship and Immigration Services (USCIS)-issued document, even though he had a valid unrestricted Social Security card at the time that was also acceptable to show continued employment eligibility.  To resolve the matter, Kelly Services has agreed to compensate the former employee for lost wages in the amount of $1,888.60 and pay a $1,100 civil penalty to the United States.  Designated Kelly Services staff will also participate in Justice Department training on employers’ responsibilities under the anti-discrimination provision of the Immigration and Nationality Act (INA).

 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

The Justice Department announced today that Kevin Casaus, 24, a former corrections officer at the Bernalillo County Metropolitan Detention Center (MDC) in Albuquerque, N.M., was sentenced this morning to serve 15 months in federal prison followed by one year of supervised release for his conviction on obstruction of justice and falsification of records charges.

Casaus and fellow former MDC corrections officers, Demetrio Juan Gonzales, 41, and Matthew Pendley, 26, were indicted in June 2012, and charged with various crimes related to the Dec. 21, 2011 assault of an inmate housed at MDC, and subsequent attempts to cover up and impede the investigation of the assault. 

On March 6, 2013, a federal jury convicted Casaus on obstruction of justice and falsification of records charges, and acquitted him on a related assault charge.  According to the evidence at trial, during the early morning hours of Dec. 21, 2011, Gonzales was assigned to the Receiving-Discharge-Transfer (RDT) Unit at MDC where individuals are brought to be booked soon after they are arrested.  His job was to photograph and fingerprint those who are brought to RDT for booking.  The victim, who had been arrested for driving while intoxicated, was verbally uncooperative during the booking process, but was not a physical threat to anyone.  Gonzales, who had previously pleaded guilty, testified that he became angry at the victim and walked him to the shower room where he knew there were no surveillance cameras.  Several other corrections officers, including Casaus, followed Gonzales to the shower room.  There, Gonzales physically assaulted the victim, striking him multiple times, and choking him.  Gonzales testified that he beat the victim “in a blind rage” and then had to wash the victim’s blood off his hands.  He further testified that the victim did not do anything to justify the beating.

According to the testimony, Casaus and two other corrections officers were present in the shower room during the beating.  Additionally, a former inmate who was in the hallway outside the shower room at the time of the beating, overheard groans and sounds consistent with the assault coming from the shower room. The former inmate was then tasked with cleaning the blood that was on the floors and walls of the shower room.  Casaus falsely stated during a recorded interview with a Bernalillo County Sheriff’s Office investigator that the victim was not assaulted in the shower room, the victim was not bleeding and that they only brought the victim to the shower room to ask him to change out of his clothes.  Casaus falsified his report when he wrote that he saw blood on the victim's clothes, but did not know where the blood came from.

In October  2012, Gonzales pleaded guilty to violating the civil rights of an individual in his custody when he struck and choked the victim in the shower room/dress out area of MDC and subsequently was sentenced to 33 months in prison followed by three years of supervised release.  Pendley pleaded guilty in February 2012 to obstructing justice by making false statements to law enforcement during their investigation of the assault on an inmate and was sentenced to a five year term of probation.

“Law enforcement officers who lie and obstruct justice to cover a fellow officer’s criminal acts do a disservice to the community that they swore to serve and protect,” said Acting Assistant Attorney General for Civil Rights Jocelyn Samuels.  “As the prosecution of these three MDC corrections officers demonstrate, the Civil Rights Division, in conjunction with our partners at the U.S. Attorney’s Office and FBI, is committed to holding law enforcement officers accountable when they violate their sworn duty to uphold the Constitution.”

“A correction officer who actively covers up illegal violence perpetrated by another officer re-victimizes a victim, undermines the public’s confidence in the justice system and fosters a belief that correction officer violence perpetrated on inmates will be met with impunity rather than justice,” said Acting U.S. Attorney Steven C. Yarbrough of the District of New Mexico.  “Such a culture cannot, and will not, be tolerated.”

“Correctional officers are given tremendous power to enforce the law.  When that authority is abused, it's not just the civil rights of prison inmates that are threatened, but the public's trust in our democratic institutions as well,” said Carol K.O. Lee, Special Agent in Charge of the Albuquerque Division of the FBI.  “The FBI, as the lead agency for investigating abuses of government officials, places a high priority on these cases.  I would like to commend the FBI Special Agents who worked on this case, with the assistance of the U.S. Attorney's Office, the Justice Department's Civil Rights Division, the Bernalillo County Sheriff's Office and the Metropolitan Detention Center's executive management and internal affairs staff.”

This case was investigated by the Albuquerque Division of the FBI and was prosecuted by Assistant U.S. Attorney Mark T. Baker for the District of New Mexico and Trial Attorney Fara Gold of the Civil Rights Division.

Attorney General Eric Holder met with Mexican Attorney General Jesús Murillo Karam today to discuss the release by the Mexican government of Rafael Caro Quintero, who was convicted of murdering Drug Enforcement Administration (DEA) Agent Enrique "Kiki" Camarena in February 1985. 

Caro Quintero was convicted and sentenced in Mexico for charges related to the 1985 kidnapping, torture and murder of DEA Camarena.  He was sentenced to serve 40 years in a Mexican prison in December 1989 but, after serving only 28 years of his sentence, a Mexican court ruled that he had been improperly tried in a Mexican federal court rather than a state court and ordered his release on August 9, 2013. Mexican authorities are seeking reversal of that decision. Nonetheless, Caro Quintero remains at large.
Attorney General Holder expressed grave concerns and disappointment immediately after learning of Caro Quintero’s premature release. At today’s meeting with Mexican Attorney General Murillo, Attorney General Holder reiterated those concerns. 

“I appreciated the chance to discuss the recent developments in the case connected to the murder of DEA special agent Kiki Camarena and other important matters with Attorney General Murillo this afternoon.  I look forward to working with him to continue to advance our shared commitment to the rule of law. Nothing will weaken our resolve to hold accountable those who commit acts of violence against our brave law enforcement agents,” said Attorney General Holder.  “The kidnapping and murder of Agent Camarena was a heinous crime that shocked criminal justice professionals on both sides of the border.  Like many, I was surprised and deeply concerned to learn about the release of Rafael Caro Quintero last month.  We will continue to work with our Mexican counterparts to ensure that Caro Quintero does not escape justice.”

In May 1987, the Department of Justice, through the United States Attorney’s Office in the Central District of California, indicted Caro Quintero and several others, for conspiracy and racketeering charges related to the kidnapping, torture and murder in Mexico of Agent Camarena.  Since then, the Department of Justice has continued to make clear to Mexican authorities the continued interest of the United States in ensuring that Caro Quintero faces justice.

A member of the Aryan Brotherhood of Texas (ABT) gang pleaded guilty today to racketeering charges related to his membership in the ABT’s criminal enterprise, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and U.S. Attorney Kenneth Magidson of the Southern District of Texas.

Benjamin Troy Johnson, aka “South,” 42, of Corpus Christi, Texas, pleaded guilty before U.S. District Judge Sim Lake in the Southern District of Texas to one count of conspiracy to participate in racketeering activity. 

According to court documents, Johnson and other ABT gang members and associates agreed to commit multiple acts of murder, robbery, arson, kidnapping and narcotics trafficking on behalf of the ABT gang.  Johnson and numerous ABT gang members met on a regular basis at various locations throughout Texas to report on gang-related business, collect dues, commit disciplinary assaults against fellow gang members and discuss acts of violence against rival gang members, among other things.  

By pleading guilty to racketeering charges, Johnson has admitted to being a member of the ABT criminal enterprise.

According to the superseding indictment, the ABT was established in the early 1980s within the Texas prison system.  The gang modeled itself after and adopted many of the precepts and writings of the Aryan Brotherhood, a California-based prison gang that was formed in the California prison system during the 1960s.  According to the superseding indictment, previously, the ABT was primarily concerned with the protection of white inmates and the promotion of white supremacy/separatism.  Over time, the ABT 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 commit murder, arson, assault, robbery and threats against those who violated the rules or posed 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 the superseding indictment, in order to be considered for ABT membership, a person must be sponsored by another gang member.  Once sponsored, a prospective member must serve an unspecified term, during which he is referred to as a prospect while his conduct is observed by the members of the ABT.
 
Judge Lake has set sentencing for Jan. 30, 2013, at which time Johnson faces a maximum penalty of life in prison.

Johnson is one of 36 defendants charged with, among other things, conducting racketeering activity through the ABT criminal enterprise.  He is the 13th defendant charged in the indictment to plead guilty. 
 
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;  Waller County, Texas, Sheriff’s Office; Alvin, Texas, Police Department; Carrollton, Texas, Police Department; Mesquite Texas, Police Department; Montgomery County District Attorney’s Office;  and the Atascosa County District Attorney’s Office.  

The case is being prosecuted by the Criminal Division’s Organized Crime and Gang Section and the U.S. Attorney’s Office for the Southern District of Texas.

Assistant Attorney General Bill Baer of the Department of Justice’s Antitrust Division issued the following statement today after the U.S. District Court for the Southern District of New York issued an order regarding a remedy to address Apple Inc.’s illegal conduct:

“We’re pleased that the court has issued an order supporting the Department of Justice’s efforts to address Apple’s illegal price fixing conduct.  Consumers will continue to benefit from lower e-books prices as a result of the department’s enforcement action to restore competition in this important industry. By appointing an external monitor to ensure future compliance with the antitrust laws, the court has helped protect consumers from further misconduct by Apple.  The court’s ruling reinforces the victory the department has won for consumers.”

The court’s order requires Apple to modify its existing agreements with the five major publishers with which it conspired – Hachette Book Group (USA), HarperCollins Publishers L.L.C., Holtzbrinck Publishers LLC, which does business as Macmillan, Penguin Group (USA) Inc. and Simon & Schuster Inc. – to allow retail price competition and to eliminate the most favored nation (MFN) pricing clauses that led to higher e-book prices.  Apple is prohibited from serving as a conduit of information among the conspiring publishers or from retaliating against publishers for refusing to sell e-books on agency terms. Apple is also prohibited from entering into agreements with e-books publishers that are likely to increase the prices at which Apple’s competitor retailers may sell that content.

Additionally, the court has decided to appoint an external monitor to ensure that Apple’s internal antitrust compliance policies will be sufficient to catch future anticompetitive activities before they result in harm to consumers. The monitor, whose salary and expenses will be paid by Apple, will work with an internal antitrust compliance officer who will be hired by and report exclusively to the outside directors comprising Apple’s audit committee. The antitrust compliance officer will be responsible for training Apple’s senior executives about the antitrust laws and ensuring that Apple abides by the relief ordered by the court.

On April 11, 2012, the department filed a civil antitrust lawsuit in the U.S. District Court for the Southern District of New York against Apple, Hachette, HarperCollins, Macmillan, Penguin and Simon & Schuster, for conspiring to end e-book retailers’ freedom to compete on price by taking control of pricing from e-book retailers and substantially increasing the prices that consumers paid for e-books.

At the same time that it filed the lawsuit, the department reached settlements with three of the publishers – Hachette, HarperCollins and Simon & Schuster. Those settlements were approved by the court in September 2012. The department settled with Penguin on Dec. 18, 2012, and with Macmillan on Feb. 8, 2013.  The Penguin settlement was approved by the court on May 20, 2013, and the Macmillan settlement on Aug. 14, 2013.  Under the settlements, each publisher was required to terminate agreements that prevented e-book retailers from lowering the prices at which they sell e-books to consumers and to allow for retail price competition in renegotiated e-book distribution agreements.

The department’s trial against Apple, which was overseen by Judge Denise Cote, began on June 3, 2013. The trial lasted for three weeks, with closing arguments taking place on June 20, 2013. The court issued its opinion that Apple Inc. violated Section 1 of the Sherman Act on July 10, 2013. The department and 33 state attorneys general submitted a proposed remedy to the court on Aug. 2, 2013.  Apple submitted a separate remedy.  The court held remedy hearings on Aug. 9 and 27, 2013, and asked the parties to revise their proposals.  The department, 33 state attorneys general and Apple submitted a joint remedy to the court on Sept. 5, 2013. 

The United States has settled a lawsuit alleging that an automobile dealership formerly doing business in Los Angeles violated the Equal Credit Opportunity Act (ECOA) by charging non-Asian customers higher interest rate markups than other customers for a period of at least three years, the Justice Department announced today.  Union Auto Sales Inc., has agreed to pay $125,000 to resolve the allegations against it.  The court entered the consent decree on Sept. 4, 2013.

           
The department’s amended complaint, filed in federal court in Los Angeles in March 2010, alleged that Union Auto Sales Inc., doing business as Union Mitsubishi, as well as other dealerships that are now out of business and in bankruptcy proceedings, charged higher interest rate markups on car loans to non-Asian customers, many of whom were Hispanic, than to similarly-situated Asian customers.  In the auto industry, it is common practice for banks and other lenders to set a base interest rate or “buy rate” and then for the auto dealership to “mark up” the interest rate to the final rate the customer pays on the loan for the car.  The complaint alleges that Union Auto Sales Inc., charged higher interest rate markups to non-Asian customers from at least 2004 to 2006.

           
Union Auto Sales Inc., is not currently in, and has no plans to re-enter, the business of automobile sales. Under the consent decree, Union Auto Sales will pay up to $125,000 to non-Asian customers who were charged higher dealer interest rate markups.  If Union Auto Sales or  its principal shareholder re-enter the business of automobile lending within the two year duration of the consent decree, it will implement clear guidelines for setting dealer markup and pricing, in compliance with ECOA, and establish appropriate fair lending training for its employees and officers.   

 
“The Civil Rights Division enforces federal laws that protect consumers from auto lending discrimination,” said Jocelyn Samuels, Acting Assistant Attorney General for the Civil Rights Division. “Every consumer should be treated fairly in the pursuit of credit, without regard to their race or nationality.” 

           
This case came out of a referral from the Federal Reserve Board involving Nara Bank.  The department entered into a partial consent decree with Nara Bank, a bank that financed many loans for Union Auto Sales and other car dealerships, in 2009.  The partial consent decree required the bank to pay $410,000 to compensate several hundred non-Asian borrowers who were aggrieved by the discriminatory conduct.

A copy of the complaint, the consent decree, and the partial consent decree entered into with Nara Bank, as well as additional information about fair lending enforcement by the Justice Department, can be obtained from the Justice Department website at www.usdoj.gov/fairhousing.

The Depatment of Justice and U.S. Attorney Wendy J. Olson for the District of Idaho announced today that they reached an agreement with the Jerome County, Id., Sheriff’s Office to resolve the allegations that Jerome County violated the employment rights of Idaho Army National Guard Member Mervin Jones while he was recuperating from a knee injury that he sustained while performing military service. 

The department’s complaint alleged that the Jerome County Sheriff’s Office violated the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA) by failing to properly reemploy and subsequently terminating Jones following his service with the Idaho Army National Guard.  The complaint states that Jones began working for the Jerome County Sheriff’s Office as a correctional deputy in 2002.  By 2007, he had been promoted through the ranks to corporal.  During his employment with the sheriff’s office, Jones suffered a knee injury while deployed to Iraq in 2004, which Jones later aggravated in 2008 during a weekend training event with his guard unit.  The complaint alleges that in 2009, while Jones was still recuperating from multiple knee surgeries, the sheriff’s office forced  him to complete Family Medical Leave Act paperwork even though his leave was protected under USERRA, denied him light duty work to accommodate his physical limitations caused by the knee injury, attempted to subject him to an unlawful “fitness for duty” evaluation and physical fitness test before allowing him to return to work, and terminated his employment during the period of time permitted by USERRA to recover from an injury incurred in the line of duty. The settlement reached is a compromise to avoid the expense and uncertainty of litigation.

Subject to certain limitations, USERRA requires that service members who leave their civilian jobs to serve in the military be reemployed promptly by their civilian employers in the positions they would have held if their employment had not been interrupted by military service or in positions of comparable seniority, pay and status.  In addition, USERRA requires employers to accommodate service members who are injured in the line of duty, and allows service members who are recuperating from such an injury up to two years to obtain reemployment without facing termination by their civilian employers. 
 
Under the terms of the agreement, which was filed as a consent decree in the U.S. District Court for the District of Idaho, Jerome County has agreed to pay $150,000, which includes $75,000 in lost wages, to Jones.  Jerome County has also agreed to provide a letter that requests Jones’ return to the state employment eligibility register maintained by the Idaho Division of Human Resources.

“This settlement demonstrates our commitment to vigorous enforcement of the laws that protect the employment rights of our servicemembers,” said Jocelyn Samuels, Acting Assistant Attorney General for the Civil Rights Division. “The department is pleased that we were able to work cooperatively with Jerome County to resolve this matter without the need for contested litigation.”
“USERRA affords military members who leave their civilian careers behind for significant periods of time to serve our country certain protections against unjust terminations,” said U.S. Attorney Olson.  “It is important that all veterans and especially those veterans who are injured serving their country, have the opportunity to return to civilian life and their careers free from worry about termination without cause.”

The case stems from a referral by the United States Department of Labor following an investigation by the Department of Labor’s Veterans’ Employment and Training Service.  This case is being handled by the Civil Rights Division and the U.S. Attorney’s Office for the District of Idaho.

Additional information about USERRA can be found on the Justice Department website: www.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.

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Consent decree

A Brooklyn, N.Y., resident pleaded guilty today for his role as a patient recruiter in a $13 million kickback and health care fraud scheme, the fourth defendant to plead guilty in the scheme based at the Cropsey Medical Care PLLC clinic in Brooklyn.

Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; U.S. Attorney Loretta E. Lynch of the Eastern District of New York; Assistant Director in Charge George Venizelos of the FBI’s New York Field Office; and Special Agent in Charge Thomas O’Donnell of the U.S. Department of Health and Human Services’ Office of Inspector General (HHS-OIG) made the announcement.

Gregory Konoplya, 57, pleaded guilty before U.S. Magistrate Judge Roanne Mann of the Eastern District of New York to one count of conspiracy to pay and receive illegal health care kickbacks.  At sentencing before U.S. District Judge Nina Gershon, scheduled for Dec. 4, 2013, Konoplya faces a maximum penalty of five years in prison.

Court documents state that Konoplya, working through an ambulette company in Brooklyn, recruited patients to attend Cropsey Medical.  An ambulette is a vehicle that is licensed by New York State’s Medicaid program to transport beneficiaries to and from medical facilities when such transportation is medically necessary.  From 2009 to 2012, Konoplya paid employees of Cropsey Medical a per beneficiary cash kickback so that Cropsey Medical would accept Konoplya’s beneficiaries as patients and so that Konoplya’s ambulette company could bill Medicaid for the transportation of beneficiaries to and from Cropsey Medical.  Once Konoplya’s beneficiaries were transported to Cropsey Medical, they were paid cash kickbacks to induce them to continue to attend the clinic and to receive medically unnecessary physical therapy, diagnostic testing and other services.  Such purported medical services were then billed by Cropsey Medical to Medicare and Medicaid.

According to court documents, from approximately November 2009 to October 2012, Cropsey Medical submitted more than $13 million in claims to Medicare and Medicaid, seeking reimbursement for a wide variety of fraudulent medical services and procedures, including physician office visits, physical therapy and diagnostic tests.

The case was investigated by the FBI and HHS-OIG and brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of New York.  The case is being prosecuted by Fraud Section Trial Attorney Sarah M. Hall and Assistant U.S. Attorneys Shannon Jones and Ilene Jaroslaw of the Eastern District of New York.

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,500 defendants who have collectively billed the Medicare program for more than $5 billion.  In addition, HHS’s Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.

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

The owners and operators of several Miami home health care agencies and a patient recruiter pleaded guilty today in connection with a health care fraud scheme involving defunct home health care company Trust Care Health Services Inc. (Trust Care).

Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida; Special Agent in Charge Michael B. Steinbach of the FBI’s Miami Field Office; Special Agent in Charge Christopher B. Dennis of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) Office of Investigations Miami office; and Acting Special Agent in Charge Michael J. DePalma of the Internal Revenue Service—Criminal Investigation’s (IRS-CI) Miami Field Office made the announcement.

Roberto Marrero, 60; Sandra Fernandez Viera, 49; and Enrique Rodriguez, 59, all of Miami, pleaded guilty before U.S. Magistrate Judge Edwin G. Torres in the Southern District of Florida to conspiracy to commit health care fraud and conspiracy to receive and pay health care kickbacks. 

Marrero and Fernandez Viera were owners and operators of Trust Care, a Miami home health care agency that purported to provide home health and physical therapy services to Medicare beneficiaries.  Rodriguez worked as a patient recruiter on behalf of Trust Care and Marrero and Fernandez Viera.

According to court documents, Marrero and Fernandez Viera operated Trust Care for the purpose of billing the Medicare Program for, among other things, expensive physical therapy and home health care services that were not medically necessary and/or were not provided. 

Marrero largely controlled Trust Care and, in light of that role, oversaw the schemes operating out of the company.  Fernandez Viera’s primary role, among others, involved managing and supervising personnel at Trust Care.  Both Marrero and Fernandez Viera were responsible for negotiating and paying kickbacks and bribes, interacting with patient recruiters, and coordinating and overseeing the submission of fraudulent claims submitted to the Medicare program. 

Marrero, Fernandez Viera and their co-conspirators paid kickbacks and bribes to patient recruiters, including Rodriguez, in return for the recruiters providing patients to Trust Care for home health and therapy services that were medically unnecessary and/or not provided.  Marrero, Fernandez Viera and their co-conspirators at Trust Care also paid kickbacks and bribes to co-conspirators in doctors’ offices and clinics in exchange for home health and therapy prescriptions, medical certifications and other documentation.  Marrero, Fernandez Viera and their co-conspirators used these prescriptions, medical certifications and other documentation to fraudulently bill the Medicare program for home health care services, which Marrero and Fernandez Viera knew was in violation of federal criminal laws.

Rodriguez offered and paid kickbacks and bribes to Medicare beneficiaries in return for those beneficiaries allowing Trust Care to bill Medicare for services that were medically unnecessary and/or not provided.  Rodriguez solicited and received kickbacks and bribes from the owners and operators of Trust Care, including Marrero and Fernandez Viera, in return for his patient recruiting.  Rodriguez knew that in many instances the patients he recruited for Trust Care did not qualify for the services billed to Medicare.

From approximately March 2007 through at least October 2010, Trust Care submitted more than $20 million in claims for home health services.  Medicare paid Trust Care more than $15 million for these fraudulent claims. 

Marrero, Fernandez Viera and Rodriguez also acknowledged their involvement in similar fraudulent schemes at several other Miami health care agencies in addition to Trust Care with estimated total losses of approximately $50 million, including Global Nursing Home Health Inc., Lovable Home Health Services Corp., New Concepts In Health Inc., Ubieta Health System Inc., R&M Health Care Inc., Vital Care Home Health Services Inc., Centrum Home Health Care Inc. and A&B Health Services Inc. 

At sentencing, scheduled for Nov. 12, 2013, the defendants face a maximum penalty of 10 years in prison for conspiracy to commit health care fraud and five years in prison for conspiracy to receive and pay health care kickbacks. 

The case was investigated by the FBI and HHS-OIG, with the assistance of IRS-CI, and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida. This case was prosecuted by Trial Attorney A. Brendan Stewart of the Criminal Division’s Fraud Section.   
  
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,500 defendants who have collectively billed the Medicare program for more than $5 billion.  In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

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

A Northern California real estate investor has agreed to plead guilty for his role in conspiracies to rig bids and commit mail fraud at public real estate foreclosure auctions in Northern California, the Department of Justice announced.

Felony charges were filed today in the U.S. District Court for the Northern District of California in San Francisco against Daniel Rosenbledt of Hillsborough, Calif. Rosenbledt is the 36th individual to plead guilty or agree to plead guilty as a result of the department’s ongoing antitrust investigations into bid rigging and fraud at public real estate foreclosure auctions in Northern California.

According to court documents, Rosenbledt conspired with others not to bid against one another, but instead to designate a winning bidder to obtain selected properties at public real estate foreclosure auctions in San Mateo and San Francisco counties, Calif. Rosenbledt was also charged with conspiring to use the mail to carry out schemes to fraudulently acquire title to selected properties sold at public auctions, to make and receive payoffs, and to divert to co-conspirators money that would have otherwise gone to mortgage holders and others.

Court papers stated Rosenbledt conspired with others to rig bids and commit mail fraud at public real estate foreclosure auctions in San Mateo County beginning as early as April 2008 and continuing until about January 2011. Rosenbledt was also charged with similar conduct in San Francisco County beginning as early as November 2009 and continuing until about January 2011.

“The Antitrust Division remains committed to vigorously pursuing conspirators who collude at foreclosure auctions at the expense of lenders and distressed homeowners,” said Bill Baer, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. “A competitive process benefits those homeowners who are looking for the best possible outcome during a difficult situation.”

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

“For those who engage in illegal anticompetitive practices at foreclosure actions, we will hold you accountable for your actions and bring you to justice,” said David J. Johnson, FBI Special Agent in Charge of the San Francisco Field Office.  “The FBI and the Antitrust Division are committed to rooting out those who undermine the real estate market and take advantage of legitimate home buyers and sellers.”

A violation of the Sherman Act carries a maximum penalty of 10 years in prison and a $1 million fine for individuals. The maximum fine for the Sherman Act charges may be increased to twice the gain derived from the crime or twice the loss suffered by the victims if either amount is greater than $1 million. A count of conspiracy to commit mail fraud carries a maximum sentence of 30 years in prison and a $1 million fine. The government can also seek to forfeit the proceeds earned from participating in the conspiracy to commit mail fraud.

The charges today are the latest filed by the department in its ongoing investigation into bid rigging and fraud at public real estate foreclosure auctions in San Francisco, San Mateo, Alameda and Contra Costa counties, Calif. These investigations are being conducted by the Antitrust Division’s San Francisco Office and the FBI’s San Francisco Office. Anyone with information concerning bid rigging or fraud related to public real estate foreclosure auctions should contact the Antitrust Division’s San Francisco Office at 415-436-6660, visit www.justice.gov/atr/contact/newcase.htm or call the FBI tip line at 415-553-7400.

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

**The fraud charge(s) referenced in this press release were

subsequently dismissed on the government’s motion.**

Today, the Civil Rights Division of the Justice Department and the U.S. Attorney for the Middle District of Georgia announced that Kadarius Thomas, a former member of the Correctional Emergency Response Team (CERT) and a former supervisor at Macon State Prison (MSP), in Oglethorpe, Ga., pleaded guilty to obstruction of justice. Thomas is the fourth former MSP officer to enter a guilty plea in connection with an ongoing federal investigation into staff assaults of inmates at the prison. 

In connection with his plea, Thomas admitted that he and other CERT members escorted an inmate to the gym, where CERT members hit the handcuffed inmate in retaliation for his prior assault on an MSP supervisor.  Thomas saw that the inmate had been injured by the unjustified use of force by CERT members.  Thomas knew from past experience that the CERT members would not report the force used on the inmate.  In keeping with directions from a supervisor, Thomas knowingly omitted from his report any reference to the unjustified force used on, or injuries inflicted upon, the inmate.  Thomas submitted his false MSP witness statement even though he understood it was inaccurate, incomplete, and untruthful. 
 
Thomas, 26, from Americus, Ga., faces a maximum penalty of 20 years in prison. 

“Mr. Thomas, by his statements, attempted to conceal the CERT team’s practice of using force to punish an inmate they swore an oath to protect,” said Acting Assistant Attorney General for the Civil Rights Division Jocelyn Samuels.  “Such actions have no place in our corrections system and the Department of Justice will continue to vigorously prosecute those who try to cover up such crimes.”

Michael J. Moore, the U.S. Attorney for the Middle District of Georgia, stated: “Today’s guilty plea is another example of the zero tolerance the Department of Justice has for correctional officers who use their position to try to cover up official misconduct.” 

This case is being investigated by the FBI and is being prosecuted by Special Litigation Counsel Forrest Christian and Trial Attorney Tona Boyd of the Civil Rights Division of the Department of Justice, with the assistance of the U.S. Attorney’s Office for the Middle District of Georgia and the support of the Georgia Bureau of Investigation. 

The Department of Justice’s Civil Rights Division has reached a comprehensive settlement agreement with the Prince William County School District in Virginia to improve services for approximately 13,000 students who are English Language Learners (ELLs) and provide language access for Limited English Proficient (LEP) parents district-wide.  With the district’s cooperation, the department conducted an extensive examination of the ELL programs offered by all 93 schools in the district to determine whether ELL students were receiving adequate services as required by the Equal Educational Opportunities Act of 1974 (EEOA).  This examination was prompted by compliance issues identified during the department’s earlier EEOA investigation of a complaint regarding the ELL program at a district middle school.

The department identified several issues in its review, including inadequate ELL services for ELL students, an insufficient number of properly qualified teachers and administrators, inadequate ELL materials, gaps in the district’s communications with LEP parents, insufficient procedures for identifying and serving ELL students with disabilities and ensuring nondiscriminatory discipline of ELL students, an incomplete process for families to opt out of ELL services, and a lack of effective monitoring and evaluation of the district's ELL programs.

The agreement requires the district to address these compliance issues identified beginning in the 2013-14 school year and continuing for at least a three-year period.  Specifically, the district agrees to:

• Provide all ELL students, including students with disabilities, at all 93 schools with adequate English Language Development (ELD) and sheltered content instruction provided by teachers with appropriate qualifications or training; • Monitor the progress of ELL teachers and administrators towards obtaining required training, and ensure that administrators account for the use of appropriate ELD and sheltering techniques in teacher evaluations; • Require principals or other designated administrators to receive training regarding their ELL program-related responsibilities, including but not limited to establishing meaningful communications with parents of ELL students and LEP parents, ensuring that parents’ decisions to opt their children out of ELL services are informed and monitored, reviewing current and former ELL student performance and recommending program adjustments as needed and providing ELL students with adequate instructional materials; • Modify the district’s registration and enrollment practices to ensure that students are able to access its programs regardless of race, national origin or immigration status; • Provide ELL students and LEP parents with meaningful access to discipline and special education forms, codes, notices, procedures and meetings; • Institute cultural responsiveness training for teachers to promote effective engagement with students from diverse cultural and linguistic backgrounds; and
• Collect and review data to identify and address any student disparities and to evaluate the effectiveness of ELL programs.

“We applaud the Prince William County school district for working cooperatively with the United States to ensure that all English language learner students have access to the services to which they are entitled,” said Jocelyn Samuels, Acting Assistant Attorney General for the Civil Rights Division. “We will continue to work cooperatively with the district to monitor its compliance with the agreement.”

The enforcement of the Equal Educational Opportunities Act is a top priority of the Justice Department’s Civil Rights Division.  Additional information about the Civil Rights Division of the Justice Department is available on its website at www.justice.gov/crt.

Related Materials:

Agreement

Saipan, MP – United States Attorney for the Districts of Guam and the Northern Mariana Islands Alicia A.G. Limtiaco, together with the Federal Bureau of Investigation (FBI), Commonwealth of the Northern Mariana Islands (CNMI) Attorney General’s Office, and CNMI Department of Public Safety announced today the filing of a federal charge stemming from a joint investigation of sex offenses involving children:

- RAYMOND BORJA ROBERTO, acting Director of the CNMI Division of Fish and Wildlife, was charged in a federal criminal complaint with Coercion and Enticement, in violation of Title 18, United States Code, Section 2422(b).  A conviction carries a statutory minimum of at least ten years and a maximum sentence of life imprisonment.

U.S. Attorney Limtiaco stated that this prosecution is part of the U.S. Department of Justice’s Project Safe Childhood initiative, a nationwide initiative to protect children from sexual predators.

The investigation originated with the CNMI Department of Public Safety and was investigated jointly by DPS Criminal Bureau of Investigations and the FBI.  The case is being prosecuted by Assistant United States Attorneys Rami Badawy and Ross Naughton.

The charge is merely an accusation and the defendant is presumed innocent until and unless proven guilty.

Copies of the complaints are attached.

Former U.S. Army Specialist Stephanie Charboneau pleaded guilty today to bribery charges for her role in the theft of fuel at Forward Operating Base (FOB) Fenty, near Jalalabad, Afghanistan, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division. 

Charboneau, 34, of Fountain, Colo., pleaded guilty before U.S. District Judge Phillip A. Brimmer in the District of Colorado to one count of conspiracy to commit bribery and one substantive count of bribery.

According to court documents, from approximately February through May 2010, Charboneau was involved in overseeing the delivery of fuel from FOB Fenty to other military bases.  As part of this process, documents generally described as transportation movement requests (TMRs) were created to authorize the movement of fuel. 

Court documents state that Charboneau created fraudulent TMRs that purported to authorize the transport of fuel from FOB Fenty to other military bases, even though no legitimate fuel transportation was required.  After the trucks were filled with fuel, the fraudulent TMRs were used by the drivers of the fuel trucks at FOB Fenty’s departure checkpoint in order to justify the trucks’ departures from FOB Fenty.  In truth, the fuel was simply stolen.

Charboneau pleaded guilty to receiving payments from a representative of the trucking company in exchange for facilitating the theft of approximately 90 fuel trucks.  According to court documents, the loss to the United States as a result of the theft was in excess of $1.5 million.

At sentencing, scheduled for Dec. 12, 2013, Charboneau faces a maximum penalty of five years in prison for conspiracy and 15 years in prison for bribery.

Charboneau’s plea is the fourth guilty plea arising from this investigation of fuel thefts at FOB Fenty.  On Aug. 3, 2012, Jonathan Hightower, a civilian employee of a military contractor who had conspired with Charboneau, pleaded guilty to similar charges.  On Oct.10, 2012, Christopher Weaver, who also conspired with Charboneau, pleaded guilty to fuel theft charges.  Both Weaver and Hightower pleaded guilty in the District Court of Colorado.   On Aug. 29, 2013, Sergeant Bilal Kevin Abduallah, who succeeded Charboneau at FOB Fenty, pleaded guilty in the Western District of Kentucky to fuel theft related charges. 

This case was investigated by the Special Inspector General for Afghanistan Reconstruction; Department of the Army, Criminal Investigations Division; Defense Criminal Investigative Service; and FBI. This case is being prosecuted by Fraud Section Trial Attorney Mark H. Dubester of the Justice Department’s Criminal Division.       

David Haigler, of Montgomery County, Ala., pleaded guilty in U.S. District Court for the Middle District of Alabama today to one count of theft of public funds and to one count of passing U.S. Treasury checks with forged endorsements, the Justice Department, the Internal Revenue Service (IRS) and U.S. Secret Service announced today.

According to court documents, between November 2011 and July 2012, Haigler obtained 263 fraudulent U.S. Treasury refund checks and refund anticipation loan checks totaling $606,781.34. The refund checks were in the names of different individuals who had not authorized Haigler to cash them. Haigler cashed the refund checks at a store in Millbrook, Ala., by providing the store with copies of fictitious powers of attorney in the names of the individuals on the checks.
 
For his involvement in the scheme, Haigler faces a maximum potential sentence of 20 years in jail and a fine of up to $500,000.

Trial Attorneys Jason Poole and Michael Boteler of the Justice Department’s Tax Division prosecuted the case. Special Agents of IRS - Criminal Investigation and the U.S. Secret Service conducted the investigation.

The U.S. District Court in Utah has concluded proceedings and approved a settlement of a lawsuit involving three claimed highway rights-of-way on Bureau of Land Management (BLM) administered public land adjacent to and within the Deep Creek Mountains Wilderness Study Area (WSA).  The court approved the settlement between the United States, the state of Utah and Juab County, and the Southern Utah Wilderness Alliance, The Wilderness Society, and the Sierra Club.

Under the settlement, negotiated by the Justice Department on behalf of the U.S. Department of the Interior and the BLM, public highway rights-of-way are recognized in those segments of the three claimed routes for which evidence of historic use satisfies the requirements of R.S. 2477.  R.S. 2477 is a provision enacted by Congress in 1866 that provided for public access across public lands by granting rights-of-way for the construction of highways. R.S. 2477 was repealed in 1976, but such rights-of-way that were established before its repeal are considered to be valid existing rights.

The terms of the settlement state that the roads shall not be developed, widened or otherwise enlarged, although they may be repaired if necessary.  In addition, the public may once again access the clearing known as Camp Ethel at the end of the Granite Canyon Road.  The parties also agreed that vehicle travel on some segments of the roads is subject to seasonal restrictions, and that Juab County would adopt an ordinance requiring vehicles to stay on the roads and not travel past their ending points, which the County passed in February 2013, and for the County to help patrol the roads on high-use weekends. 

BLM has agreed to conduct monitoring concerning water quality in Granite Canyon Creek and other resources, and the County and BLM will continue to work together in balancing needs for public access and protection of the WSA and its resources.  The State and Juab County have agreed not to claim other R.S. 2477 rights-of-way in the WSA and will limit their claims to rights-of-way on federal lands adjoining the WSA to twelve designated routes.

“The agreement is the first to settle longstanding claims by the state and counties of Utah for highway rights-of-way on federal lands, and does so in an environmentally sound and responsible manner,” said Robert G. Dreher, Acting Assistant Attorney General for the Justice Department’s  Environment and Natural Resources Division. “This landmark settlement will recognize three historic rights-of-way claimed by Utah and Juab County that will remain in their primitive, undeveloped condition, while providing ample protection for the unique environment of the Deep Creek Mountains Wilderness Study Area.”

“I am very pleased that all the parties involved were able to work together to resolve this issue and settle this lawsuit in a way that promotes public interests and protects the resources on our public lands,” said Juan Palma, BLM Utah State Director. “This settlement serves as a tangible reminder that certain R.S. 2477 issues can be resolved through good-faith negotiations and cooperation.”

The Deep Creek Mountains WSA, spread across 68,910 acres in Tooele and Juab Counties, is an extremely remote location known for its combination of biological and geological wonders.  Stretching 32 miles in length and 15 miles at its widest point, the area is considered an “island” ecosystem due to its distance from inhabited areas.  It is home to alpine meadows, evergreen and aspen forests, and habitats for the peregrine falcon and six other sensitive bird species.  Some of the nine perennial streams that run through the WSA are populated by a pure strain of the Bonneville cutthroat trout, a state sensitive species.  It also features impressive geological formations such as quartzite cliffs. 

The State and Juab County filed the lawsuit in 2005 pursuant to the federal Quiet Title Act, and claimed that they held public highway rights-of-way, under R.S. 2477, to segments of three primitive roads known as the Trout Creek Road, Toms Creek Road and Granite Canyon Road.  

The three environmental groups were allowed to intervene as defendants in the lawsuit.  The parties engaged in long-term, good faith negotiations that resulted in the detailed and comprehensive settlement that has now been approved by the Federal District Court, and which dismisses the lawsuit.

The settlement underscores that representatives of the federal government, the State of Utah and its counties, and the environmental community can, through good-faith negotiations, resolve R.S. 2477 claims.  This is especially important given that in the last few years, the State and counties across Utah have filed over 25 similar Quiet Title Act lawsuits asserting claims for approximately 12,000 R.S. 2477 rights-of-way on federal public lands across the State. 

In a settlement agreement with the United States, Safeway, the nation’s second largest grocery store chain, has agreed to pay a $600,000 civil penalty and implement a corporate-wide plan to significantly reduce its emissions of ozone-depleting substances from refrigeration equipment at 659 of its stores nationwide, estimated to cost approximately $4.1 million, announced the U.S. Environmental Protection Agency (EPA) and Department of Justice today. 

The settlement involves the largest number of facilities ever under the Clean Air Act (CAA)’s regulations governing refrigeration equipment. 

The settlement resolves allegations that Safeway violated the federal CAA by failing to promptly repair leaks of HCFC-22, a hydro-chlorofluorocarbon that is a greenhouse gas and ozone-depleting substance used as a coolant in refrigerators, and failed to keep adequate records of the servicing of its refrigeration equipment. Safeway will now implement a corporate refrigerant compliance management system to comply with stratospheric ozone regulations. In addition, Safeway will reduce its corporate-wide average leak rate from 25 percent in 2012 to 18 percent or below in 2015. The company will also reduce the aggregate refrigerant emissions at its highest-emission stores by 10 percent each year for three years.

“Safeway’s new corporate commitment to reduce air pollution and help protect the ozone layer is vital and significant,” said Cynthia Giles, Assistant Administrator for EPA’s Office of Enforcement and Compliance Assurance. “Fixing leaks, improving compliance and reducing emissions will make a real difference in protecting us from the dangers of ozone depletion, while reducing the impact on climate change.”

 “This first-of-its-kind settlement will benefit all Americans by cutting emissions of ozone-depleting substances across Safeway’s national supermarket chain,” said Robert G. Dreher, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division.  “It can serve as a model for comprehensive solutions that improve industry compliance with the nation’s Clean Air Act.”

HCFC-22 is up to 1,800 times more potent than carbon dioxide in terms of global warming emissions. The measures that Safeway has committed to are expected to prevent over 100,000 pounds of future releases of ozone-depleting refrigerants that destroy the ozone layer. 

EPA regulations issued under Title VI of the CAA require that owner or operators of commercial refrigeration equipment that contains over 50 pounds of ozone-depleting refrigerants, and that has an annual leak rate greater than 35 percent repair such leaks within 30 days. 

HCFCs deplete the stratospheric ozone layer, which allows dangerous amounts of cancer-causing ultraviolet rays from the sun to strike the earth, leading to adverse health effects that include skin cancers, cataracts, and suppressed immune systems. Pursuant to the Montreal Protocol, the United States is implementing strict reductions of ozone-depleting refrigerants, including a production and importation ban by 2020 of HCFC-22, a common refrigerant used by supermarkets. 

The settlement is part of EPA’s national enforcement initiative to control harmful air pollution from the largest sources of emissions, including large grocery stores. 

Corporate commitments to reduce emissions from refrigeration systems have been increasing in recent years. EPA’s GreenChill Partnership Program works with food retailers to reduce refrigerant emissions and decrease their impact on the ozone layer and climate change by transitioning to environmentally friendlier refrigerants, using less refrigerant and eliminating leaks, and adopting green refrigeration technologies and best environmental practices.

Safeway, headquartered in Pleasanton, Calif., is the second largest grocery chain in North America with 1,412 stores in the United States and 2012 revenues of $44.2 billion. Safeway operates companies under the banner of Vons in southern California and Nevada, Randalls in Texas, and Carrs in Alaska. The settlement covers 659 Safeway stores – all Safeway stores in the United States that have commercial refrigeration equipment regulated by the CAA except for those stores in Safeway’s Dominick’s Division, which was the subject of a 2004 settlement with the United States.

The settlement was lodged today in the U.S. District Court for the Northern District of California, and is subject to a 30-day public comment period and final court approval. It will be available for viewing at www.justice.gov/enrd/Consent_Decrees.

For more information: http://www2.epa.gov/enforcement/safeway-inc-clean-air-act-settlement.

Adrian-Tiberiu Oprea, 29, of Constanta, Romania, and Iulian Dolan, 28, of Craiova, Romania, were sentenced today to serve 15 years and seven years in prison, respectively, for participating in an international, multimillion-dollar scheme to remotely hack into and steal payment card data from hundreds of U.S. merchants’ computers, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; U.S. Attorney John P. Kacavas of the District of New Hampshire; and Holly Fraumeni, Resident Agent in Charge of the U.S. Secret Service, Manchester, N.H., Resident Office.

On May 7, 2013, Oprea, who was extradited to the United States from Romania, pleaded guilty to one count of conspiracy to commit computer fraud, one count of conspiracy to commit wire fraud and two counts of conspiracy to commit access device fraud.  On Sept. 17, 2012, Dolan pleaded guilty to one count of conspiracy to commit computer fraud and two counts of conspiracy to commit access device fraud. 

 Court documents state that, from approximately 2009 to 2011, Oprea conspired with Dolan and Cezar Butu, 27, of Ploiesti, Romania, to hack into hundreds of computers located in the United States to steal credit, debit and payment account numbers and associated data (collectively “payment card data”) that belonged to U.S. cardholders. 

According to court documents, Oprea and Dolan remotely hacked into hundreds of U.S. merchants’ point-of-sale (POS) or “check out” computer systems, where customers’ payment card data was electronically stored.  Specifically, Oprea, who was the leader of the scheme, and Dolan, who was his trusted aide, first used the Internet to identify U.S.-based vulnerable POS systems.  After identifying a vulnerable system, Oprea and Dolan would gain access and install software programs called “keystroke loggers” (or “sniffers”) onto the POS systems.  These programs would record, and then store, all of the data that was keyed into or swiped through the merchants’ POS systems, including customers’ payment card data.
 
Oprea and Dolan retrieved the card data and then electronically transferred it to various electronic storage locations (“dump sites”) that Oprea had set up.  Oprea later attempted to use the stolen payment card data to make unauthorized charges on, or transfers of funds from, the accounts.  He also attempted to transfer the stolen payment card data to other co-conspirators for them to use in a similar manner.  During the course of the conspiracies, the co-conspirators hacked into several hundred U.S. merchants’ POS systems, including 250 Subway restaurant franchises, and stole payment card data belonging to more than 100,000 U.S. cardholders.  Their criminal conduct caused losses of at least $17.5 million in unauthorized charges and remediation expenses. 

 The case was investigated by the U.S. Secret Service, with assistance from the New Hampshire State Police and Romanian authorities.

The case is being prosecuted by Trial Attorney Mona Sedky of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney Arnold H. Huftalen of the District of New Hampshire.  Significant assistance was provided by the Criminal Division’s Office of International Affairs.

Two patient recruiters of a Miami health care company pleaded guilty late yesterday for their participation in a $48 million home health Medicare fraud scheme.

Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida; Special Agent in Charge Michael B. Steinbach of the FBI’s Miami Field Office; and Special Agent in Charge Christopher Dennis of the HHS Office of Inspector General (HHS-OIG) Office of Investigations Miami Office made the announcement.

           Elizabeth Monteagudo, 33, and Cristobal Gonzalez, 39, both of Miami, pleaded guilty on Sept. 3, 2013, before U.S. District Judge Joan A. Lenard to one count each of conspiracy to receive health care kickbacks. Monteagudo also pleaded guilty to receipt of kickbacks in connection with a federal health care program. Both charges carry a maximum penalty of five years in prison, and sentencing for both defendants is scheduled for Dec. 2, 2013.

 According to court documents, Monteagudo and Gonzalez were patient recruiters who worked for Caring Nurse Home Health Care Corp., and Gonzalez also worked for Good Quality Home Health Care, Inc. Caring Nurse and Good Quality were Miami home health care agencies that purported to provide home health and therapy services to Medicare beneficiaries.  
           
According to court documents, from approximately January 2009 through approximately June 2011, Monteagudo and Gonzalez would recruit patients for Caring Nurse and/or Good Quality and would solicit and receive kickbacks and bribes from the owners and operators of Caring Nurse and/or Good Quality in return for allowing the agency to bill the Medicare program on behalf of the recruited patients.  These Medicare beneficiaries were billed for home health care and therapy services that were medically unnecessary and/or not provided.

Monteagudo also admitted to her involvement with $7 million in fraudulent billings for Starlite Home Health Agency Inc., which she owned and operated. 

In a related case, on Feb. 27, 2013, Rogelio Rodriguez and Raymond Aday, the owners and operators of Caring Nurse and Good Quality, were sentenced to serve 108 and 51 months in prison, respectively.  Their sentencings followed their December 2012 guilty pleas each to one count of conspiracy to commit health care fraud charged in an October 2012 indictment, which charged that from approximately January 2006 through June 2011, Caring Nurse and Good Quality submitted approximately $48 million in claims for home health services that were not medically necessary and/or not provided. Medicare actually paid approximately $33 million for these fraudulent claims.          

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

Since their inception in March 2007, Medicare Fraud Strike Force operations in nine locations have charged more than 1,500 defendants who collectively have falsely billed the Medicare program for more than $5 billion.  In addition, the HHS Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

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

Four current and former soldiers of the U.S. Army National Guard pleaded guilty today for their roles in bribery and fraud schemes that caused a total of more than $210,000 in losses to the U.S. Army National Guard Bureau.

 
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and U.S. Attorney Kenneth Magidson of the Southern District of Texas made the announcement.

Melanie D. Moraida, 33, of Pearland, Texas; Kimberly N. Hartgraves, 28, of League City, Texas; Lashae C. Hawkins, 27, of San Antonio; and Vanessa Phillips, 35, of Houston, all pleaded guilty to one count of conspiracy and one count of bribery.

The cases against all four 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, 15 of whom have pleaded guilty.

According to court documents filed in all four cases, in approximately September 2005, the National Guard Bureau entered into a contract with Document and Packaging Broker, Inc. (Docupak) to administer the Guard Recruiting Assistance Program (G-RAP).  The G-RAP was a recruiting program that offered monetary incentives to soldiers of the Army National Guard who referred others to join the Army National Guard.  Through this program, a participating soldier could receive 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.

Moraida, Hartgraves, Hawkins and Phillips all admitted that they paid Army National Guard recruiters for the names and Social Security numbers of potential Army National Guard soldiers.  They further admitted that they used the personal identifying information for these potential soldiers in claiming that they were responsible for referring the potential soldiers to join the Army National Guard, when in fact they had not referred them.

As a result of these fraudulent representations, Moraida collected approximately $14,500 in fraudulent bonuses; Hartgraves collected approximately $2,000 in fraudulent bonuses; Hawkins collected approximately $33,000 in fraudulent bonuses; and Phillips collected approximately $10,000 in fraudulent bonuses.    
 
The charge of bribery carries a maximum penalty of 15 years in prison and a maximum fine of $250,000 or twice the pecuniary gain or loss.  The charge of conspiracy carries a maximum penalty of five years in prison and a maximum fine of $250,000 or twice the pecuniary gain or loss.

The defendants are all scheduled to be sentenced on Dec. 17, 2013, before U.S. District Judge Lee H. Rosenthal in Houston.

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. These cases are being prosecuted by Trial Attorneys 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. 

The Justice Department announced today that a federal court has permanently barred Nina Thompson Price from preparing federal tax returns for others. The civil injunction order, to which Thompson Price consented, was signed Sept. 3, 2013, by Judge Nancy F. Atlas of the U.S. District Court for the Southern District of Texas. 

In the consent order, Thompson Price agreed that she, individually, and doing business as N.M. & T. Tax Service, prepared over 1,500 federal tax returns for customers during tax years 2009, 2010 and 2011 claiming false and exaggerated Schedule C business deductions and education credits, as well as other deductions to understate her clients’ tax liabilities and overstate their tax refunds.  The complaint alleges the United States suffered a total harm exceeding $100,000.   

The Internal Revenue Service lists tax-preparer fraud as one of the “Dirty Dozen” tax scams.  In the last decade the Justice Department has obtained injunctions against hundreds of tax-return preparers and tax-fraud promoters. Information about these cases is available at www.justice.gov/tax/taxpress2013.htm.

Related Materials:

United States v. Nina Thompson Price, etc.
Complaint for Permanent Injunction and Other Relief
Stipulated Judgment of Permanent Injunction Against Nina Thompson Price also known as Nina Thompson d/b/a N.M. & T Tax Service

In the Obama administration’s latest step to ensure equal treatment for same-sex married couples following the Supreme Court’s decision to strike down a key section of the Defense of Marriage Act, U.S. Attorney General Eric Holder announced Wednesday that President Obama has directed the Executive Branch to take steps allowing for same-sex spouses of military veterans to collect federal benefits.

The new policy means that the administration will no longer enforce statutory language governing the Department of Veterans Affairs (VA) and the Department of Defense (DoD) that restricts the awarding of spousal benefits to opposite-sex marriages only. The language, contained within Title 38 of the U.S. Code, has, until now, prevented the Executive Branch from providing spousal benefits to veterans—and in some instances active-duty service members and reservists—who are in same-sex marriages recognized under state law. 

In a letter to Congressional leaders, Holder stated that the President’s decision was consistent with the Court’s decision in Windsor in June.

“Although the Supreme Court did not directly address the constitutionality of the Title 38 provisions in Windsor, the reasoning of the opinion strongly supports the conclusion that those provisions are unconstitutional under the Fifth Amendment,” Holder wrote.

The decision not to enforce Title 38 aligns with the Obama administration’s determination last year that two provisions of Title 38 that govern benefits for veterans and their families were unconstitutional as applied to legally married same-sex couples.  At that time, the Attorney General informed Congress that the Department would no longer defend the Title 38 provisions, but that the Executive Branch would continue to enforce them. Today’s announcement makes clear that enforcement of the provision in Title 38 defining marriage as between a man and a woman will now cease.

The announcement comes after the House Bipartisan Legal Advisory Group (BLAG) recently decided to stop defending the Title 38 provisions in pending cases. In addition, last week, a federal district court in California held the Title 38 provisions unconstitutional on equal protection grounds. After consideration of these developments and a recommendation by the Attorney General, the President directed the Executive Branch to cease enforcement of the Title 38 provisions.

A copy of the letter from the Attorney General to Congressional leaders is attached.

Related Materials:

Attorney General Holder's Letter to Congress

Angelique Djonret of Montgomery, Ala., was sentenced today to serve two years in prison for her involvement in a million dollar identity theft tax fraud scheme, announced Assistant Attorney General Kathryn Keneally of the Justice Department's Tax Division and U.S. Attorney for the Middle District of Alabama George L. Beck Jr.  Angelique Djonret pleaded guilty to identity theft on April 19, 2013.

According to court documents, between October 2009 and April 2012, Angelique Djonret’s sister, Antoinette Djonret, orchestrated a tax refund scheme using stolen identities to file over 1,000 false tax returns that fraudulently claimed over $1.7 million in tax refunds.  Antoinette Djonret obtained stolen identities from multiple sources, including Alabama state databases.  She also established an elaborate network for laundering the refund money.  Antoinette Djonret recruited her sister, Angelique, into the conspiracy, whose role was to obtain prepaid debit cards in her name and others’ names for purposes of receiving the fraudulent tax refunds.  Antoinette Djonret and her co-conspirators used the cards to obtain the refund proceeds.  Angelique Djonret also assisted in the filing of false tax returns using stolen identities.  Antoinette Djonret was previously sentenced to 12 years in prison. 

Assistant Attorney General Keneally and U.S. Attorney Beck commended the efforts of Special Agents of Internal Revenue Service - Criminal Investigation, who investigated the case, and Tax Division Trial Attorneys Jason H. Poole and Michael Boteler, and Assistant U.S. Attorney Todd Brown, who prosecuted the case.

Three employees of a New York-based U.S. broker-dealer have pleaded guilty for their roles in bribery schemes involving two state economic development banks in Venezuela.

Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Preet Bharara of the Southern District of New York and Assistant Director in Charge George Venizelos of the New York Office of the FBI made the announcement.

Ernesto Lujan, Jose Alejandro Hurtado and Tomas Alberto Clarke Bethancourt pleaded guilty in New York federal court to conspiring to violate the Foreign Corrupt Practices Act (FCPA), to violate the Travel Act and to commit money laundering, as well as substantive counts of these offenses.  These charges relate to a scheme to bribe a foreign official named Maria de los Angeles Gonzalez de Hernandez at Banco de Desarrollo Económico y Social de Venezuela (BANDES), a state economic development bank in Venezuela, in exchange for receiving trading business from BANDES.  Lujan, Hurtado and Clarke each also pleaded guilty to an additional charge of conspiring to violate the FCPA in connection with a similar scheme to bribe a foreign official employed by Banfoandes (the “Banfoandes Foreign Official”), another state economic development bank in Venezuela, and to conspiring to obstruct an examination by the U.S. Securities and Exchange Commission (SEC) of the New York-based broker-dealer (the “Broker-Dealer”) where all three defendants had worked, to conceal the true facts of the Broker-Dealer’s relationship with BANDES. 

Lujan, 50, and Clarke, 43, entered their guilty pleas yesterday before U.S. Magistrate Judge James C. Francis IV, and Hurtado, 38, pleaded guilty today, also before Judge Francis. The men each pleaded guilty to the same six offenses and face a maximum penalty of five years in prison on each count except money laundering, which carries a maximum penalty of 20 years in prison.  Sentencing for Lujan and Clarke is scheduled for Feb. 11, 2014, before U.S. District Judge Paul G. Gardephe.  Hurtado is scheduled for sentencing before U.S. District Judge Harold Baer Jr. on March 6, 2014.

According to the informations filed against Lujan, Hurtado and Clarke this week, the criminal complaints previously filed, and statements made during the plea proceedings, Lujan, Clarke and Hurtado worked or were associated with the Broker-Dealer, principally through its Miami offices.  In 2008, the Broker-Dealer established a group called the Global Markets Group, which included Lujan, Clarke and Hurtado, and which offered fixed income trading services to institutional clients. 

One of the Broker-Dealer’s clients was BANDES, which operated under the direction of the Venezuelan Ministry of Finance.  The Venezuelan government had a majority ownership interest in BANDES and provided it with substantial funding.  Gonzalez was an official at BANDES and oversaw the development bank’s overseas trading activity.  At her direction, BANDES conducted substantial trading through the Broker-Dealer.  Most of the trades executed by the Broker-Dealer on behalf of BANDES involved fixed-income investments for which the Broker-Dealer charged the bank a mark-up on purchases and a mark-down on sales. 

The Broker-Dealer also conducted business with Banfoandes, another state development bank in Venezuela that, along with its 2009 successor Banco Bicentenario, operated under the direction of the Venezuelan Ministry of Finance.  Banfoandes acted as a financial agent of the Venezuelan government in order to promote economic and social development by, among other things, offering credit to low-income Venezuelans.  The Banfoandes Foreign Official was responsible for some of Banfoandes’s foreign investments.

Court records state that from early 2009 through 2012, Lujan, Clarke and Hurtado participated in a bribery scheme in which Gonzalez allegedly directed trading business she controlled at BANDES to the Broker-Dealer, and in return, agents and employees of the Broker-Dealer split the revenue the Broker-Dealer generated from this trading business with Gonzalez.  During this time period, the Broker-Dealer generated over $60 million in mark-ups and mark-downs from trades with BANDES.  Agents and employees of the Broker-Dealer, including Lujan, Clarke and Hurtado, devised a split with Gonzalez of the commissions paid by BANDES to the Broker-Dealer.  Emails, account records and other documents collected from the Broker-Dealer and other sources reveal that Gonzalez allegedly received a substantial share of the revenue generated by the Broker-Dealer for BANDES-related trades.  Specifically, Gonzalez allegedly received kickbacks and payments from Broker-Dealer agents and employees that were frequently in six-figure amounts.

To further conceal the scheme, the kickbacks to Gonzalez were often paid using intermediary corporations and offshore accounts that she held in Switzerland, among other places.  For instance, Lujan, Clarke and Hurtado used accounts they controlled in Switzerland to transfer funds to an account Gonzalez allegedly controlled in Switzerland.  Additionally, Hurtado and his spouse received substantial compensation from the Broker-Dealer, portions of which Hurtado transferred to an account allegedly held by Gonzalez in Miami and to an account held by an associate of Gonzalez in Switzerland.  Hurtado also sought and allegedly received reimbursement from Gonzalez for the U.S. income taxes he had paid on money that he used to make kickback payments to Gonzalez.  Lujan and Clarke also derived substantial profit from their roles in the bribery scheme.
   
According to court records, beginning in or about November 2010, the SEC commenced a periodic examination of the Broker-Dealer, and from November 2010 through March 2011 the SEC’s examination staff made several visits to the Broker-Dealer’s offices in Manhattan.  In early 2011, Lujan, Clarke and Hurtado discussed their concern that the SEC was examining the Broker-Dealer’s relationship with BANDES and asking questions regarding certain emails and other information that the SEC examination staff had discovered.  Lujan, Clarke and Hurtado agreed that they would take steps to conceal the true facts of the Broker-Dealer’s relationship with BANDES, including deleting emails.  Lujan, Clarke and Hurtado then, in fact, deleted emails.  Additionally as part of this effort to obstruct the SEC examination, Clarke lied to SEC examination staff in response to an interview question about his relationship to an individual who had received purported foreign associate payments relating to BANDES. 

In a related scheme, from 2008 through mid-2009, Lujan, Clarke and Hurtado paid bribes to the Banfoandes Foreign Official, who, in exchange, directed Banfoandes trading business to the Broker-Dealer.

Gonzalez was charged in a criminal complaint and arrested on May 3, 2013, in connection with the BANDES bribery scheme.  The charges against Gonzalez are merely accusations, and she is presumed innocent unless and until proven guilty.

This ongoing investigation is being conducted by the FBI, with assistance from the SEC and the Justice Department’s Office of International Affairs.

Assistant Chief James Koukios and Trial Attorneys Maria Gonzalez Calvet and Aisling O’Shea of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Harry A. Chernoff and Jason H. Cowley of the Southern District of New York’s Securities and Commodities Fraud Task Force are in charge of the prosecution.  Assistant U.S. Attorney Carolina Fornos is responsible for the forfeiture aspects of the case.
 
Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa.

A former office manager at the defunct health care provider Health Care Solutions Network Inc. (HCSN) was sentenced today in Miami to serve 68 months in prison for her role in a fraud scheme that resulted in more than $63 million in fraudulent claims to Medicare and Florida Medicaid.

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.

 Lisset Palmero, 45, of Miami, was sentenced by U.S. District Judge Cecilia M. Altonaga in the Southern District of Florida.  In addition to her prison term, Palmero was sentenced to three years of supervised release and ordered to pay restitution in the amount of $17.4 million.

During the course of the conspiracy, Palmero was employed as a receptionist and office manager at HCSN, a mental health facility that purported to provide Partial Hospitalization Program (PHP) services.  A PHP is a form of intensive treatment for severe mental illness.
        
HCSN of Florida (HCSN-FL) operated community mental health centers at two locations.  According to court documents, Palmero was aware that HCSN-FL paid illegal kickbacks to owners and operators of Miami-Dade County Assisted Living Facilities (ALF) in exchange for patient referral information to be used to submit false and fraudulent claims to Medicare and Medicaid.  Palmero also knew that many of the ALF referral patients were ineligible for PHP services because they suffered from mental retardation, dementia or Alzheimer's disease. 

 Court documents reveal that Palmero was aware that HCSN-FL personnel were fabricating patient medical records. Many of these medical records were created weeks or months after the patients were admitted to HCSN-FL for purported PHP treatment.  Palmero was also aware that medical records were fabricated for “ghost patients” who were never admitted to the HCSN-FL PHP.  During her employment at HCSN-FL, Palmero actively concealed the fabrication of medical records by preparing, and causing others to prepare, documentation that was later utilized to support false and fraudulent billing to government-sponsored health care benefit programs, including Medicare and Florida Medicaid. 

 According to court documents, from 2004 through 2011, HCSN billed Medicare and the Florida Medicaid program approximately $63 million for purported HCSN-FL mental health services.

 This case is being investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, under supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida. This case was prosecuted by Trial Attorney Allan J. Medina and former Special Trial Attorney William J. Parente.   
  
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.

The Department of Justice today announced a program that will encourage Swiss banks to cooperate in the department’s ongoing investigations of the use of foreign bank accounts to commit tax evasion.  The department also released a joint statement with the Swiss Federal Department of Finance, stating that Switzerland will encourage its banks to participate in the program.

“This program will significantly enhance the Justice Department's ongoing efforts to aggressively pursue those who attempt to evade the law by hiding their assets outside of the United States,” said Attorney General Eric Holder.  “In addition to strengthening our partnership with the Swiss government, the program’s requirement that Swiss banks provide detailed account information will improve our ability to bring tax dollars back to the U.S. treasury from across the globe.”

“This program will provide us with additional information to prosecute those who used secret offshore bank accounts and those here and abroad who established and facilitated the use of such accounts,” said Deputy Attorney General James M. Cole.  “Now is the time for all U.S. taxpayers who hid behind Swiss bank secrecy laws or have undeclared offshore accounts in other foreign countries to come forward and resolve their outstanding tax issues with the United States.”

Under the program, which is available only to banks that are not currently under criminal investigation by the department for their offshore activities, participating Swiss banks will be required to:

·          Agree to pay substantial penalties

·          Make a complete disclosure of their cross-border activities

·          Provide detailed information on an account-by-account basis for accounts in which U.S. taxpayers have a direct or indirect interest

·          Cooperate in treaty requests for account information

·          Provide detailed information as to other banks that transferred funds into secret accounts or that accepted funds when secret accounts were closed

·          Agree to close accounts of account holders who fail to come into compliance with U.S. reporting obligations

Banks meeting all of the above requirements will be eligible for non-prosecution agreements.  Banks currently under criminal investigation related to their Swiss banking activities, and all individuals, are expressly excluded from the program. 

The program holds banks to a higher degree of responsibility for opening secret accounts after it became publicly known that the department was actively investigating offshore tax evasion in Switzerland.  Under the penalty provisions of the program, banks seeking a non-prosecution agreement must agree to a penalty in an amount equal to 20 percent of the maximum aggregate dollar value of all non-disclosed U.S. accounts that were held by the bank on Aug.1, 2008.  The penalty amount will increase to 30 percent for secret accounts that were opened after that date but before the end of February 2009 and to 50 percent for secret accounts opened later than that.    

The program will significantly assist the department’s efforts to investigate and prosecute U.S. taxpayers who, when faced with the risk of detection, chose to move funds away from banks under investigation to banks that they believed might be better havens for tax secrecy.  A key component of the program requires cooperating banks to provide information that will enable the United States to follow the money to other Swiss banks and to banks located in other countries.

The program also provides a path to resolution for Swiss banks that were not engaged in wrongful acts with U.S. taxpayers but nonetheless want a resolution of their status.  Most banks in this category will be asked to provide an internal investigation report prepared by an independent examiner, as well as any additional information requested by the department.  A smaller group of banks will be allowed to show that they met certain criteria for deemed-compliance under the Foreign Account Tax Compliance Act (FATCA).  Banks in these two groups will be eligible to receive non-target letters.

The program is intended to enable every Swiss bank that is not already under criminal investigation to find a path to resolution.  It also creates significant risks for individuals and banks that continue to fail to cooperate, including for those Swiss banks that facilitated U.S. tax evasion but fail to cooperate now, for all U.S. taxpayers who think that they can continue to hide income and assets in offshore banks, and for those advisors and others who facilitated these crimes.

Since 2009, the department has charged more than 30 banking professionals and 68 U.S. accountholders with violations arising from their offshore banking activities.  Fifty-four U.S. taxpayers and four bankers and financial advisors have pled guilty, and five taxpayers have been convicted at trial.  One Swiss bank entered into a deferred prosecution agreement, and a second Swiss bank was indicted and pleaded guilty.  Currently, the department is actively investigating the Swiss-based activities of 14 financial institutions.  The department’s enforcement activities are global and have also included public actions concerning activities in India, Luxembourg, Israel and the Caribbean.

The program does not address current or future investigations and pending cases concerning bank employees, financial advisors and other individuals.  The department will address each of these cases only with the individual’s counsel, in a manner that gives consideration to the particular facts and circumstances of each case.  In those cases in which indictments are pending, any resolution will also require addressing outstanding issues with the court.  Counsel for banks currently under investigation, individuals who have been indicted, or bank employees who are concerned about whether they have potential criminal liability should contact the department’s Tax Division or the prosecutors handling their case if they wish to seek resolution.    

The department notes that the joint statement with the Swiss Federal Department of Finance provides that if personal data are provided, they should only be used for purposes of law enforcement, which may include regulatory action, in the United States or as otherwise permitted by U.S. law.  Additionally, the department has assured its Swiss counterparts that it understands that simply because the names of individuals are included in the information that it receives from a bank does not necessarily mean that any particular individual is or is not culpable of wrongdoing.  The support that Switzerland has shown for this program may also help those banks already under investigation take some of the steps necessary to reach a resolution. 

“Banks that come forward under the program that we have announced today have the opportunity to reach a resolution with the United States,” said Assistant Attorney General for the Tax Division Kathryn Keneally.  “The program will give us yet more information to pursue U.S. taxpayers who are continuing to hide their assets in offshore accounts, and creates significant risks for those Swiss banks that fail to come forward.  We recognize and express our appreciation for Switzerland’s support of the program.”

“The program the Department of Justice announced today is another positive step forward in the U.S. government’s continuing efforts to combat offshore tax evasion,” said Danny Werfel, Acting Commissioner of the Internal Revenue Service.  “On behalf of the IRS, I extend my appreciation to both the Justice Department and the Swiss government for developing a way forward that provides the United States with information that will be critical to the enforcement of our tax laws and will bring closure for Swiss banks that meet the requirements of the program.”

Related Materials:

Joint Statement and Program
Signed Joint Statement and Program
Comments on Program for Non-Prosecution Agreements or Non-Target Letters for Swiss Banks
 

Two Los Angeles-based consulting firms, MotorScience Inc., and MotorScience Enterprise Inc., (MotorScience) and their owner, Chi Zheng, have agreed to settle alleged Clean Air Act (CAA) violations stemming from the illegal import of 24,478 all-terrain, recreational vehicles into the U.S. from China without testing to ensure emissions would meet applicable limits on harmful air pollution, announced the Department of Justice, the U.S. Environmental Protection Agency (EPA) and the California Air Resources Board (ARB).

MotorScience and Zheng have agreed to have a stipulated judgment entered against them for a $3.55 million civil penalty and to pay an additional $60,000 civil penalty within six months.  The United States will receive 80 percent of collected penalties, and California will receive the remaining 20 percent.

“Vehicles and engines that are manufactured overseas and sold in the U.S. must meet the same Clean Air standards as domestically-made products,” said Robert G. Dreher, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division.  “We will continue to vigorously enforce these laws to ensure that American consumers get environmentally sound products that do not pollute the atmosphere and violators do not gain an unfair economic advantage by skirting the law.”

“This illegal importation of over 20,000 vehicles evaded federal emission standards, jeopardizing human health,” said Cynthia Giles, Assistant Administrator for EPA’s Office of Enforcement and Compliance Assurance.  “Engines operating without proper emissions controls can emit excess carbon monoxide, hydrocarbons and oxides of nitrogen which can cause respiratory illnesses, aggravate asthma and contribute to the formation of ground level ozone or smog.”

“The integrity of new vehicle standards are the foundation for achieving our air quality goals in California,” said ARB Enforcement Chief James Ryden.  “When a manufacturer circumvents these requirements, they not only cheat their customers and competitors, but they also shortchange every citizen of our state who relies upon our shared actions to clean the air.”

Today’s settlement also requires that for the next 15 years, before either MotorScience or Zheng may engage in any further work involving non-road vehicles and engines, they must follow a rigorous compliance plan to ensure that any emissions testing and certification applications submitted to EPA or the ARB accurately represent those vehicles and engines.  Non-road vehicles and engines include recreational vehicles, generators, lawn and garden equipment, and other non-road internal combustion engines.

EPA’s investigation showed that MotorScience obtained EPA certificates of conformity for numerous vehicles without conducting required emissions testing.  As alleged in separate complaints filed in federal district court by the United States and the state of California in September 2011, MotorScience arranged for emissions testing of a limited number of vehicles, and then reused those results to obtain certificates of conformity for numerous other, dissimilar vehicles.  For at least three of those vehicles, EPA confirmed that their emissions exceeded the federal limits for hydrocarbons and nitrogen oxides. 

MotorScience and its president, Zheng, provide consulting services for vehicle manufacturers and other clients interested in obtaining certificates of conformity from EPA to allow import of their vehicles into the U.S.  In 2010, EPA voided 12 certificates held by four of the defendants’ clients, who were U.S.-based importers for Chinese recreational vehicle manufacturers.  The complaints filed by the U.S. and California alleged that defendants caused four of their clients to illegally import vehicles under federal certificates and California executive orders that were voided. The complaints further alleged that defendants caused their clients to fail to create and maintain required records on emissions testing.

The CAA prohibits any vehicle or engine from being imported into or sold in the United States unless it is covered by a valid, EPA-issued certificate of conformity demonstrating that the vehicle or engine meets applicable federal emission standards.  The CAA also prohibits any actions that cause the importation of uncertified vehicles or that cause recordkeeping violations.  Similarly, the California Health and Safety Code prohibits any vehicle or engine from being distributed or sold in California, unless such vehicle or engine is covered by a valid, ARB-issued executive order demonstrating that the vehicle or engine meets applicable California emission standards.

The certificate of conformity is the primary way EPA ensures that vehicles and engines meet emission standards.  This enforcement action is part of an ongoing effort by EPA to ensure that all imported vehicles and engines comply with the CAA’s requirements.

More information on the settlement: www2.epa.gov/enforcement/motorscience-and-chi-zheng-clean-air-act-settlement.

More information on EPA’s Clean Air Act mobile source enforcement programs: www2.epa.gov/enforcement/air-enforcement#mobile.

Jonathan Deck, 59, of Norwood, N.J., was sentenced today in federal court in Utica, N.Y., to 15 months in prison for conspiring to commit wire fraud in connection with the illegal dumping of thousands of tons of asbestos-contaminated construction debris on a 28-acre piece of property on the Mohawk River in upstate New York, the Justice Department announced. 

Deck was the last individual sentenced in a series of prosecutions that involved at least two companies and five individuals including Eagle Recycling, Mazza & Sons Inc., Julius DeSimone, Donald Torriero, Dominick Mazza, and Cross Nicastro. The investigation of this conspiracy spanned more than five years and resulted in more than 10 years of incarceration and more than $1 million in criminal fines, restitution, and cleanup costs to remediate a site now contaminated with more than 400 truckloads of asbestos-contaminated wastes. 

With respect to Mr. Deck, U.S. District Judge David N. Hurd sentenced him to serve 15 months in prison, followed by three years of supervised release.  He was further ordered to pay $492,000 in restitution for, among other things, cleanup expenses at the site.  Given the ongoing nature of the cleanup, Judge Hurd further authorized the United States to recoup additional, future cleanup costs from the conspirators as well.

Deck pleaded guilty to conspiring to violate the wire fraud statute.  According to the evidence, Deck and others conspired to fill in the entire property over the course of five years with pulverized construction and demolition debris that was processed at New Jersey solid waste management facilities and then transported to open property in Frankfort, N.Y.  The plot was uncovered by law enforcement just months after the operation began, but not before the conspirators had already dumped at least 400 truckloads of debris at the site.  Much of the material that was dumped was placed in and around waters of the United States and some of the material was found to be contaminated with asbestos.  The conspirators then concealed the illegal dumping and recruited others to join in the illegal dumping by fabricating a New York State Department of Environmental Conservation (DEC) permit and forged the name of a DEC official on the fraudulent permit. 

This case was investigated by the New York State Environmental Conservation Police, Bureau of Environmental Crimes, EPA’s Criminal Investigation Division, Internal Revenue Service, New Jersey State Police Office of Business Integrity Unit, New Jersey Department of Environmental Protection, and Ohio Department of Environmental Protection.  The case was prosecuted by Assistant U.S. Attorney Craig A. Benedict of the Northern District of New York, and Trial Attorneys Todd W. Gleason and Gary Donner of the Environmental Crimes Section of the Justice Department’s Environment and Natural Resources Division.

Today, the U.S. Department of Justice announced an update to its federal marijuana enforcement policy in light of recent state ballot initiatives that legalize, under state law, the possession of small amounts of marijuana and provide for the regulation of marijuana production, processing, and sale.

In a new memorandum outlining the policy, the Department makes clear that marijuana remains an illegal drug under the Controlled Substances Act and that federal prosecutors will continue to aggressively enforce this statute. To this end, the Department identifies eight (8) enforcement areas that federal prosecutors should prioritize.  These are the same enforcement priorities that have traditionally driven the Department’s efforts in this area.

Outside of these enforcement priorities, however, the federal government has traditionally relied on state and local authorizes to address marijuana activity through enforcement of their own narcotics laws. This guidance continues that policy.

For states such as Colorado and Washington that have enacted laws to authorize the production, distribution and possession of marijuana, the Department expects these states to establish strict regulatory schemes that protect the eight federal interests identified in the Department’s guidance. These schemes must be tough in practice, not just on paper, and include strong, state-based enforcement efforts, backed by adequate funding. Based on assurances that those states will impose an appropriately strict regulatory system, the Department has informed the governors of both states that it is deferring its right to challenge their legalization laws at this time.  But if any of the stated harms do materialize—either despite a strict regulatory scheme or because of the lack of one—federal prosecutors will act aggressively to bring individual prosecutions focused on federal enforcement priorities and the Department may challenge the regulatory scheme themselves in these states.

A copy of the memorandum, sent to all United States Attorneys by Deputy Attorney General James M. Cole, is available below.

Related Materials:

DAG Memo 8-29-13