District Not Recorded
The source did not name an office we could identify. These records remain unassigned rather than guessed.
United States Reaches an Agreement with XTO Energy to Prevent Waste Spills from Natural Gas Exploration and ProductionRead the Press Release
The U.S. Environmental Protection Agency and the U.S. Department of Justice announced a settlement with XTO Energy Inc., a subsidiary of Exxon Mobil Corporation, to resolve an alleged violation of the Clean Water Act (CWA) related to the discharge of wastewater from XTO’s Penn Township, Lycoming County, Pa. facility used for the storage of wastewater generated by natural gas exploration, commonly known as fracking, and production.
The federal settlement requires that XTO pay a penalty of $100,000 to the United States and spend a federal government-estimated $20 million on a comprehensive plan to improve wastewater management practices to recycle, properly dispose of, and prevent spills of wastewater generated from natural gas exploration and production activities in Pennsylvania and West Virginia. Among other things, XTO must install a continuous, remote monitoring system for all of its permanent production located throughout Pennsylvania and West Virginia with alarms that will be triggered to alert operators immediately in the event of any future spills and implement a program to actively monitor interconnected wastewater storage tanks located throughout Pennsylvania and West Virginia.
The discharge was discovered by the Pennsylvania Department of Environmental Protection (PADEP) during an inspection of the Penn Township facility, where a PADEP inspector observed wastewater spilling from an open valve from a series of interconnected tanks. At the time, XTO stored wastewater generated from energy extraction activities conducted throughout Pennsylvania at its Penn Township facility and, at the time of the release, stored produced fluid from its operations in the area.
Pollutants from the release were found in a tributary of the Susquehanna River basin. EPA, in consultation with PADEP, conducted an investigation and determined that wastewater stored in the tanks at the Penn Township facility contained the same variety of pollutants, including chlorides, barium, strontium, and total dissolved solids, that were observed in those surface waters.“Today’s settlement holds XTO accountable for a previous violation of the Clean Water Act and requires operational changes and improved management practices to help ensure the safe and responsible handling of wastewater produced during natural gas exploration and production activities,” said Robert G. Dreher, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. “The Justice Department is committed to ensuring that our natural resources are developed in an environmentally responsible manner.”
Under the settlement with the United States, the substantial improvements to XTO’s wastewater management are estimated by the federal government to reduce discharges of total dissolved solids by 264 million pounds over the course of the next three years. These reductions will occur in large part because XTO will increase wastewater recycling and will properly dispose of wastewaters generated by its natural gas activities across the mid-Atlantic region. In addition XTO will implement a region-wide program of operational best management practices which include: secondary containment for tanks used to store wastewater, improved standard operating procedures designed to reduce the risk of a spill, a prohibition on using pits or open-top tanks to store wastewater which will prevent air emissions, remote monitoring of tank volumes to prevent overfilling and spills, and proper signage on all tanks with safety information and a manned, 24-hour emergency phone number.
“The operational improvements required by today’s settlement will help to protect precious surface and drinking water resources in Pennsylvania and West Virginia,” said Cynthia Giles, assistant administrator for EPA’s Office of Enforcement and Compliance Assurance. “EPA continues to push for responsible development of domestic sources of energy and to insist that companies play by the rules that protect public health.”
“This consent decree establishes a program of best practices that should be a model for the industry and, if followed, will give a level of assurance to the people of the Commonwealth that their waters will be protected. This settlement is in the long-term best interest of the taxpayers, the industry, and our children,” stated Peter J. Smith, U.S. Attorney for the Middle District of Pennsylvania.
Untreated discharges of wastewaters from natural gas exploration and production activities typically contain high levels of total dissolved solids and other pollutants and can adversely impact fresh water aquatic life and drinking water quality.
The consent decree, lodged in the Middle District of Pennsylvania, is subject to a 30-day public comment period and court approval. The consent decree is available for review at www.justice.gov/enrd/Consent_Decrees.html
More information about the settlement:
http://www2.epa.gov/enforcement/xto-energy-inc-settlement
More information about EPA Region III’s activities related to natural gas extraction: http://www.epa.gov/region3/marcellus_shale/US Army Sergeant Pleads Guilty in Georgia to Stealing <br /> Identity Information from US Army Computer SystemRead the Press Release
Ammie Brothers, 29, of Columbus, Ga., a sergeant in the U.S. Army, pleaded guilty today to unlawfully obtaining personal information from the U.S. Army’s Army Knowledge Online computer system.
The guilty plea was announced by Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; U.S. Attorney for the Eastern District of Virginia Neil H. MacBride; U.S. Attorney for the Middle District of Georgia Michael J. Moore; and Director Daniel T. Andrews of the U.S. Army Criminal Investigation Command’s Computer Crime Investigative Unit.
Brothers pleaded guilty before U. S. District Judge Clay Land in Columbus, Ga., to one count of unauthorized access to information from a U.S. Army computer system. She was charged on Feb. 14, 2013, in a five-count indictment returned by a federal grand jury in Alexandria, Va.
In a statement of facts filed with the plea agreement, Brothers admitted that between April 24, 2009, and Oct. 5, 2011, she repeatedly and intentionally accessed two victims’ Army Knowledge Online accounts, which contain personnel files for members of the armed services. Brothers initially gained access by calling the Army Knowledge Online help desk in the Eastern District of Virginia and providing the victims’ Social Security numbers and dates of birth in order to obtain temporary passwords.
When law enforcement searched Brothers’s home in Columbus, they recovered numerous documents printed from the Army Knowledge Online system that contained victims’ Social Security numbers, bank account numbers and employment history, including the Social Security number of one minor child. Brothers admitted to law enforcement that, in addition to illegally accessing the victims’ Army Knowledge Online accounts, she regularly harassed the victims by telephone and accessed several credit card accounts belonging to one victim, and in one case authorized charges without the victim’s knowledge or consent.
At sentencing, scheduled for Oct. 24, 2013, Brothers faces a maximum penalty of five years in prison.
This case was investigated by the Computer Crime Investigative Unit of U.S. Army Criminal Investigation Command.
The case is being prosecuted by Trial Attorney Peter V. Roman of the Justice Department’s Computer Crime and Intellectual Property Section, Assistant U.S. Attorney Lindsay Kelly of the Eastern District of Virginia and Assistant U.S. Attorney Crawford L. Seals of the Middle District of Georgia.Six Colombian Nationals Charged with Murder of DEA AgentRead the Press Release
Six Colombian nationals were indicted today by a federal grand jury in the Eastern District of Virginia for the kidnapping and murder of Drug Enforcement Administration (DEA) Special Agent James Terry Watson.
“Special Agent Watson was a brave public servant who dedicated his life to protecting the country he loved. He was a hero, in every sense of the word, who was taken from us far too suddenly and far too soon," said Attorney General Eric Holder. “With today's arrests, we take an important step towards ensuring that those allegedly responsible for his senseless murder are brought to justice. We also send an unmistakable message to all who commit acts of violence against America's law enforcement professionals: no matter who you are or where you live, we will do everything in our power to hold you accountable to the fullest extent of the law.”
Gerardo Figueroa Sepulveda, 38; Omar Fabian Valdes Gualtero, 27; Edgar Javier Bello Murillo, 26; Hector Leonardo Lopez, 23; Julio Estiven Gracia Ramierez, 30; and Andrés Alvaro Oviedo-Garcia, 21, were each charged with two counts of second degree murder, one count of kidnapping and one count of conspiracy to kidnap. Oviedo-Garcia was also charged with two counts of assault.
Additionally, the grand jury indicted Wilson Daniel Peralta-Bocachica, 30, also a Colombian national, for his alleged efforts to destroy evidence associated with the murder of Special Agent Watson.
According to the indictment, Figueroa, Valdes, Bello, Lopez, Gracia and Oviedo-Garcia were part of a kidnapping and robbery conspiracy that utilized taxi cabs in Bogota, Colombia, to lure victims into a position where they could be attacked and robbed. Once an intended victim entered a taxi cab, the driver of the taxi cab would signal other conspirators to commence the robbery and kidnapping operation.
The indictment alleges that on June 20, 2013, while he was working for the U.S. Mission in Colombia, Special Agent Watson entered a taxi cab operated by one of the defendants. Special Agent Watson was then allegedly attacked by two other defendants – one who stunned Special Agent Watson with a stun gun and another who stabbed Special Agent Watson with a knife, resulting in his death.
The charges were announced by Attorney General Holder; Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; U.S. Attorney Neil H. MacBride of the Eastern District of Virginia; Assistant Director in Charge Valerie Parlave of the FBI’s Washington Field Office; Special Agent in Charge Derek S. Maltz of the Drug Enforcement Administration’s Special Operations Division; and Director Gregory B. Starr of the Diplomatic Security Service for the U.S. Department of State.
This case is being investigated by the FBI, DEA and Diplomatic Security Service, in close cooperation with Colombian authorities, and with assistance from INTERPOL and the Justice Department’s Office of International Affairs. Assistant U.S. Attorney Michael P. Ben’Ary from the U.S. Attorney’s Office for the Eastern District of Virginia and Special Counsel Stacey Luck and Trial Attorney Christine Duey from the Criminal Division’s Human Rights and Special Prosecutions Section are prosecuting the case on behalf of the United States. The Department of Justice gratefully acknowledges the Colombian Attorney General’s Office, Colombian National Police, Colombian Directorate of Criminal Investigation and Interpol (DIJIN), DIJIN Special Investigative Unit, Bogota Metropolitan Police and Colombian Technical Investigation Team for their extraordinary efforts, support and professionalism in responding to this incident.
Criminal indictments are only charges and not evidence of guilt. A defendant is presumed to be innocent until and unless proven guilty.
Panasonic and Its Subsidiary Sanyo Agree to Plead Guilty <br /> in Separate Price-Fixing Conspiracies Involving Automotive Parts <br /> and Battery CellsRead the Press Release
Panasonic Corp. and its subsidiary, SANYO Electric Co. Ltd., have agreed to plead guilty and to pay a total of $56.5 million in criminal fines for their roles in separate price-fixing conspiracies involving automotive parts and battery cells, the Department of Justice announced today. LG Chem Ltd., a leading manufacturer of secondary batteries, has agreed to plead guilty and to pay a $1.056 million criminal fine for price fixing involving battery cells.
Osaka, Japan-based Panasonic agreed to pay a $45.8 million criminal fine for its role in the automotive parts conspiracy. SANYO agreed to pay a $10.731 million criminal fine for its role in the battery cells conspiracy. The guilty pleas against SANYO and LG Chem are the first in the department’s ongoing investigation into anticompetitive conduct in the cylindrical lithium ion battery cell industry.
The three-count felony charge against Panasonic was filed in U.S. District Court for the Eastern District of Michigan. Separate one-count felony charges were filed against SANYO and LG Chem in U.S. District Court for the Northern District of California. As part of the plea agreements, which are subject to court approval, the charged companies have agreed to cooperate in the department’s ongoing antitrust investigations.
Panasonic has agreed to plead guilty for its role in a conspiracy to fix prices of switches, steering angle sensors and automotive high intensity discharge (HID) ballasts installed in cars sold in the United States and elsewhere. SANYO and LG Chem Ltd. have agreed to plead guilty for their roles in a conspiracy to fix the prices of cylindrical lithium ion battery cells sold worldwide for use in notebook computer battery packs.
“Panasonic is charged with participating in separate price-fixing conspiracies affecting numerous parts used in cars made and sold in the United States while its subsidiary was also fixing prices on battery cells used by consumers of notebook computers,” said Scott D. Hammond, Deputy Assistant Attorney General for the Antitrust Division’s criminal enforcement program. “Pleading guilty and cooperating with the division’s ongoing investigations is a necessary step in changing a corporate culture that turned customers into price-fixing victims.”
According to the first count of a three-count felony charge filed today in U.S. District Court for the Eastern District of Michigan in Detroit, Panasonic participated in a conspiracy to rig bids for, and to fix, stabilize and maintain the prices of steering wheel switches, turn switches, wiper switches, combination switches and door courtesy switches sold to Toyota Motor Corp. and Toyota Motor Engineering & Manufacturing North America Inc. in the United States and elsewhere. According to the court document, Panasonic and its co-conspirators carried out the conspiracy from at least as early as September 2003 until at least February 2010.
The second count charges that Panasonic, during this same time period, participated in a conspiracy to rig bids for, and to fix, stabilize, and maintain the prices of steering angle sensors sold to Toyota in the United States and elsewhere. The department said that Panasonic and its co-conspirators agreed, during meetings and conversations, to suppress and eliminate competition in the automotive parts industry by agreeing to rig bids for, and to fix, stabilize, and maintain the prices of steering angle sensors sold to Toyota Motor Corp. and Toyota Motor Engineering & Manufacturing North America Inc. in the United States and elsewhere.
According to the third count of the charge, from at least as early as July 1998 and continuing until at least February 2010, Panasonic and its co-conspirators participated in a conspiracy to suppress and eliminate competition in the automotive parts industry by agreeing, during meetings and conversations, to rig bids for, and to fix, stabilize, and maintain the prices of automotive HID ballasts sold to Honda Motor Co. Ltd. and American Honda Motor Co. Inc., Mazda Motor Corp. and Mazda Motor of America Inc., and Nissan Motor Co. Ltd. and Nissan North America Inc. in the United States and elsewhere.
I ncluding Panasonic, 11 companies and 15 executives have pleaded guilty or agreed to plead guilty and have agreed to pay a total of more than $874 million in criminal fines as a result of the auto parts investigation. Additionally, 12 of the individuals have been sentenced to pay criminal fines and to serve jail sentences ranging from a year and a day to two years each. The three additional executives have agreed to serve time in prison and are currently awaiting sentencing.
“The FBI remains committed to protecting American consumers and businesses from corporate corruption. The conduct of Panasonic, SANYO, and LG Chem resulted in inflated production costs for notebook computers and cars purchased by U.S. consumers,” said Joseph S. Campbell, FBI Criminal Investigative Division Deputy Assistant Director. “These investigations illustrate our efforts to ensure market fairness for U.S. businesses by bringing corporations to justice when their commercial activity violates antitrust laws.”
According to the one-count felony charge filed today in the U.S. District Court for the Northern District of California in San Francisco, SANYO and LG Chem engaged in a conspiracy to fix the price of the cylindrical lithium ion battery cells used in notebook computer battery packs from about April 2007 until about September 2008. Cylindrical lithium ion battery cells are rechargeable batteries that are often incorporated in groups into more powerful battery packs commonly used to power electronic devices.
According to the charges, SANYO, LG Chem and their co-conspirators carried out the conspiracy by, among other things, agreeing during meetings and conversations to price cylindrical lithium ion battery cells for use in notebook computer battery packs to customers at predetermined levels and issuing price quotations to customers in accordance with those agreements. The department also said that SANYO, LG Chem and their co-conspirators collected and exchanged information for the purpose of monitoring and enforcing adherence to the agreed-upon prices and took steps to conceal the conspiracy.
Panasonic, SANYO and LG Chem are each charged with price fixing in violation of the Sherman Act, which carries a maximum penalty of a $100 million criminal fine for corporations. The maximum fine for the company may be increased to twice the gain derived from the crime or twice the loss suffered by the victims, if either of those amounts is greater than the statutory maximum fine.
Today’s charges arose from an ongoing investigation in the cylindrical lithium ion battery cells industry being conducted by the Antitrust Division’s San Francisco Office and the FBI in San Francisco as well as 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 automotive parts 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. Anyone with information concerning illegal or anticompetitive conduct in the battery industry is urged to call the Antitrust Division’s San Francisco Office at 415-436-6660 or visit www.justice.gov/atr/contact/newcase.htm.Owner of Los Angeles-area DME Company Pleads Guilty to<br /> Conspiring to Defraud Medicare and Medi-CalRead the Press Release
The owner of a Los Angeles-area durable medical equipment (DME) supply company has pleaded guilty to conspiring to defraud Medicare and Medi-Cal of more than $650,000.
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 for the Los Angeles Region of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG); Assistant Director in Charge Steven Martinez of the FBI’s Los Angeles Field Office; and Special Agent in Charge Joseph Fendrick of the California Department of Justice’s Bureau of Medi-Cal Fraud and Elder Abuse, made the announcement.
Kim Ricks, of Moreno Valley, Calif., pleaded guilty on July 17, 2013, before U.S. District Judge Fernando M. Olguin in the Central District of California to one count of conspiracy to commit health care fraud.
In court, Ricks admitted that she owned and operated Kim’s Medical Supplies (“KMS”), a DME company that was located in Moreno Valley. Ricks enrolled KMS in both Medicare and Medi-Cal, which allowed her to submit claims to both programs. Ricks admitted that between approximately December 2005 and September 2012, she submitted claims to Medicare and Medi-Cal for power wheelchairs (PWCs) and other DME on behalf of people who did not have a legitimate medical need for the equipment, a practice that, Ricks admitted in court, she knew violated Medicare and Medi-Cal rules and regulations.
Ricks also admitted that she submitted claims to Medicare and Medi-Cal for PWCs and other DME that neither she nor her co-conspirators delivered to KMS’s customers, which Ricks knew violated the rules and regulations of both Medicare and Medi-Cal. In some cases, Ricks obtained the Medicare billing and personal information of individuals and, without their knowledge, used that information to submit claims to Medicare and Medi-Cal for PWCs and other DME that neither she nor her co-conspirators provided to the individuals. Ricks admitted that she submitted these types of claims to Medicare and Medi-Cal because she needed the money to keep KMS viable. Ricks also admitted that she submitted claims to Medicare and Medi-Cal for power wheelchairs and DME that she knew were supported by fraudulent prescriptions forged by her co-conspirators.
Ricks admitted that she was responsible for the claims that KMS submitted to Medicare and Medi-Cal, although, at times, her co-conspirators used her Medicare and Medi-Cal provider numbers to submit false and fraudulent claims to both programs. As a result of this conspiracy, Ricks admitted that she and her co-conspirators submitted and caused the submission of approximately $643,468 in fraudulent Medicare claims and received approximately $236,882 in ill-gotten reimbursement payments. Ricks admitted further that she and her co-conspirators submitted and caused the submission of approximately $11,849 in fraudulent Medi-Cal claims and received approximately $8,660 in ill-gotten reimbursement payments.
At sentencing, scheduled for Oct. 24, 2013, Ricks faces a maximum penalty of 10 years in prison.
The case is being prosecuted by Trial Attorney Jonathan T. Baum of the Criminal Division’s Fraud Section. The case is being investigated by the HHS-OIG and the California Department of Justice.
The case was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Central District of California. The Medicare Fraud Strike Force operations are part of the Health Care Fraud Prevention & Enforcement Action Team (HEAT), a joint initiative announced in May 2009 between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country.
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 & Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.
Louisiana Stolen Identity Tax Refund Fraud Defendant Sentenced to Federal PrisonRead the Press Release
The Justice Department and Internal Revenue Service (IRS) announced that Angela Myers, a resident of Baton Rouge, La., was sentenced today in the Middle District of Louisiana to 132 months in federal prison for wire fraud, making false claims, subscribing to false tax returns and aggravated identity theft.
Based on the evidence presented during a four-day trial in March 2013, Myers operated “Angie’s Tax Service,” a tax preparation business located in Baton Rouge Myers electronically filed false claims for tax refunds using the names and Social Security numbers of identity theft victims. Myers filed the identity theft tax returns using a unique preparer identification number assigned to her daughter. Many of the victims were nursing home patients who resided at Port Allen Care Center in Port Allen, La., and who did not have the ability to leave the nursing home.
The evidence also revealed that Myers lied on her own 2007 and 2008 federal income tax returns, failing to report hundreds of thousands of dollars of tax preparation fees that she earned at Angie’s Tax Service and used to buy various items, including an RV and a $50,000 investment product.
“This thief victimized vulnerable nursing home patients and stole from all honest taxpayers,” said Kathryn Keneally, Assistant Attorney General for the Justice Department’s Tax Division. “The severe prison sentence handed down today demonstrates that such crimes will not be tolerated.”
“We are very pleased with the sentencing of Angela Myers, many of whose victims were residents of a nursing home,” said Richard Weber, Chief of IRS-Criminal Investigation. “The IRS aggressively pursues those that use stolen social security numbers to file false tax returns. This sentence should serve as a reminder that there is a price to pay for scamming innocent people and defrauding the government. Many taxpayers put their trust in return preparers and when that trust is violated, the taxpayers and the tax system suffer.”
In addition to the prison sentence, the court ordered Myers to pay $202,685 in restitution to the IRS in addition to $39,030 that was already forfeited in this case.
Assistant Attorney General Keneally commended the efforts of special agents of IRS-Criminal Investigation, who investigated the case, and Tax Division Trial Attorneys Justin Gelfand and Jason Poole, who prosecuted the case.
Former U.S. Customs and Border Protection Officer and Four Associates Sentenced for Carrying out Bribery and Alien Smuggling Activities Along Mexican BorderRead the Press Release
A former U.S. Customs and Border Protection (CBP) officer, his girlfriend, his nephew and two of their associates were sentenced today in federal court for their participation in bribery and alien smuggling activities along the U.S./Mexico border spanning approximately two years, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division.
Former CBP Officer Juan Carlos Guerrero, 39, of Mission, Texas, was sentenced to 108 months in prison and ordered to pay a $30,000 fine by U.S. District Judge Andrew S. Hanen in the Southern District of Texas after pleading guilty last year to one count of substantive bribery, one count of conspiracy to commit bribery and one count of alien smuggling conspiracy. Guerrero’s girlfriend, Claudia Flores, 34, of Mission, was sentenced to 60 months in prison and also ordered to pay a $30,000 fine; Maribel Rivera, 43, also of Mission, was sentenced to 30 months in prison; and Rodolfo Caballero Rojas, 40, of Oklahoma City, was sentenced to 24 months in prison and ordered to pay a $6,000 fine. Each pleaded guilty last year to separate informations charging each of them with one count of conspiracy to commit bribery and alien smuggling. Guerrero’s nephew, Jose P. Cantu, 20, of Mission, was sentenced to 52 months in prison after having pleaded guilty to conspiracy to commit bribery and alien smuggling and a separate charge of conspiracy to import marijuana and cocaine.
According to court documents, between approximately October 2008 and approximately May 2011, Guerrero worked the midnight shift at the Hidalgo, Pharr and Anzaldvas Ports of Entry, where he was responsible for, among other things, vehicle inspections of northbound traffic traveling from Mexico to the United States.
According to court documents, between approximately January 2009 and approximately May 2011, Guerrero and Flores organized a bribery and alien smuggling operation, whereby Guerrero, Flores, Rivera, Rojas, Cantu and other co-conspirators arranged for aliens from Mexico to be smuggled into the United States through Guerrero’s inspection lanes in exchange for bribe payments ranging from $500 to $3,000 per alien. Guerrero admitted that he organized and directed a total of approximately 80 to 150 different smuggling events and that he knowingly permitted approximately 80 to 165 aliens to gain illegal entry into the United States.
According to court documents, Flores admitted that she helped Guerrero organize and direct a total of approximately 50 to 75 of the illegal crossings, in which approximately 50 to 100 aliens from Mexico gained illegal entry into the United States. Rivera admitted that she assisted Guerrero and Flores by identifying and soliciting aliens, communicating smuggling prices and details of the illegal crossings to the aliens and collecting bribe payments from the aliens on the behalf of Guerrero and Flores. Rojas admitted, among other things, that he assisted Guerrero by personally driving aliens through Guerrero’s inspection lane at the Anzalduas Point of Entry and that he paid Guerrero a bribe of approximately $1,500 as payment for Guerrero’s decision to permit an alien to pass illegally through his inspection lane.
Court documents further indicate that Cantu admitted to helping Guerrero separately organize and carry out approximately 40 illegal crossings, in which approximately 45 to 60 aliens from Mexico gained illegal entry into the United States. Additionally, Cantu independently smuggled 168.8 kilograms of marijuana and 3.9 kilograms of cocaine through Guerrero’s inspection lane in exchange for approximately $5,000 from another associate.
Guerrero, who was placed on administrative leave upon his arrest in October of last year, formally resigned his CBP post on Dec. 13, 2012, as part of his plea agreement.
The case was prosecuted by Trial Attorneys Edward J. Loya Jr. and J.P. Cooney of the Criminal Division’s Public Integrity Section. The case was investigated by agents from the FBI’s South Texas Border Corruption Task Force, which includes agents from the FBI, U.S. Immigration and Customs Enforcement Office of Professional Responsibility, CBP Office of Internal Affairs, U.S. Department of Homeland Security Office of Inspector General, CBP U.S. Border Patrol and the Texas Rangers Division.Former Owner of Employee Leasing Company Sentenced to Federal Prison for Failing to Pay Payroll Taxes to the IRSRead the Press Release
The Justice Department and the Internal Revenue Service (IRS) announced today that Richard R. Whatley, a former owner of Alliance Staffing Management Inc. (ASM), was sentenced to 51 months in prison today for willfully failing to account for and pay over employment taxes. Whatley was also ordered to pay $541,513.61 in restitution to the IRS. Whatley appeared before U.S. District Judge David Nuffer in Salt Lake City.
In January 2010, a federal grand jury charged Whatley with five counts of willfully failing to account for and pay over employment taxes, relating to three different employee leasing companies that he allegedly operated and controlled between the years 2001 and 2006. The employee leasing companies included American Employment Group Inc., ASM and Intermountain Consulting Group Inc. The tax loss associated with Whatley’s criminal conduct during these years totaled more than $2.3 million. Whatley pleaded guilty in January 2013 to one of the charged counts.
According to the plea agreement, during the 2002 through 2004 tax years, Whatley held an ownership interest in and had the ability to control the finances of ASM, an employee leasing company. Whatley’s control included determining the amount of employment taxes that had to be paid over to the IRS and the authority to decide which bills would be paid and which bills would not be paid. As charged in the superseding indictment, in the fourth tax quarter of 2003, Whatley caused the collection of employment taxes from ASM’s employees’ wages and then willfully failed to pay over $541,513 for the employees’ portion of employment taxes to the IRS.
The case was investigated by special agents of IRS - Criminal Investigation and was prosecuted by Trial Attorneys Christopher J. Maietta and Stuart A. Wexler of the Justice Department’s Tax Division.
More information about the Tax Division and its enforcement efforts is available at www.usdoj.gov/tax .
Brooklyn Owner of Sportswear Distribution Business Pleads Guilty to Tax EvasionRead the Press Release
The Justice Department and Internal Revenue Service (IRS) announced today that Harry Neuhoff, a resident of Brooklyn, N.Y., has pleaded guilty to tax evasion.
According to documents filed with the court, Neuhoff was president and an owner of EVA TEES Inc., formerly of Long Island City, N.Y. and presently located in Piscataway, N.J. From approximately 2006 to 2008, Neuhoff manipulated EVA TEES accounts through an accounting software program to delete cash sales from the general ledger accounts maintained on the computer accounting system. As a result, Neuhoff filed false corporate tax returns on behalf of EVA-TEES with the IRS that underreported the gross receipts of EVA TEES. Neuhoff’s conduct also correspondingly resulted in his filing of false personal income tax returns with the IRS for those years. According to the documents filed with the court, Neuhoff underreported the gross receipts of EVA TEES through computer manipulations by at least $1.5 million. Sentencing is scheduled for Nov. 8, 2013 before U.S. District Court Judge Edward Korman.
Neuhoff faces a maximum sentence of five years in prison, three years of supervised release, a $250,000 fine and a $100 special assessment. He has agreed to pay restitution to the IRS.
The case was investigated by IRS-Criminal Investigation. Trial Attorneys Mark Kotila and Karen E. Kelly of the Justice Department’s Tax Division prosecuted this case.
Aryan Brotherhood of Texas Gang Associate Pleads Guilty to Federal Racketeering ChargesRead the Press Release
An associate of the Aryan Brotherhood of Texas (ABT) gang pleaded guilty today to racketeering charges related to her involvement in the ABT’s criminal enterprise, announced Acting Assistant Attorney Mythili Raman of the Justice Department’s Criminal Division and U.S. Attorney Kenneth Magidson of the Southern District of Texas.
Samantha Goldman, 29, of Houston, 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, Goldman 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. According to court documents, Goldman held the position of ABT “Hub” and was often referred to as a “Featherwood.” In her capacity with ABT, she facilitated communication of criminal activities among imprisoned gang members regarding gang-related business, collection of dues, commission of disciplinary assaults against fellow gang members and acts of violence against rival gang members, among other things.
By pleading guilty to racketeering charges, Goldman has admitted to being an associate 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 murder, arson, assault, robbery and threats against those who violate the rules or pose a threat to the enterprise. Members, and oftentimes associates, were required to follow the orders of higher-ranking members, often referred to as “direct orders.”
Judge Lake has set sentencing for Oct. 17, 2013, at which time Goldman faces a maximum penalty of life in prison.Goldman is one of 35 defendants charged with conducting racketeering activity through the ABT criminal enterprise, among other charges. She is the eighth 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; Orange County, Texas, Sheriff’s Office; Waller County, Texas, Sheriff’s Office; Alvin, Texas, Police Department; Carrollton, Texas, Police Department; Mesquite Texas, Police Department; Montgomery County District Attorney’s Office; and 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.
Philadelphia La Cosa Nostra Capo Sentenced to<br /> 97 Months in PrisonRead the Press Release
Anthony Staino was sentenced today to serve 97 months in prison for his participation in a racketeering conspiracy involving extortion, loan sharking and illegal gambling, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Zane David Memeger of the Eastern District of Pennsylvania and Edward J. Hanko, Special Agent in Charge of the FBI’s Philadelphia Division.
Staino, 57, of Swedesboro, N.J., was sentenced by U.S. District Judge Eduardo C. Robreno in the Eastern District of Pennsylvania. In addition to his prison term, Staino was sentenced to serve three years of supervised release.
On Apr. 19, 2013, Staino pleaded guilty to conspiring to conduct and participate in the affairs of the Philadelphia La Cosa Nostra (LCN) Family through a pattern of racketeering activity. Through court documents and statements made in court at the time of the plea, Staino admitted that, as a made member and capo of the Philadelphia LCN Family, he gave a usurious loan to an undercover FBI agent and used threats of violence to collect payments on the loan. Staino also admitted that he ran an illegal electronic gambling device business for the mob, providing video poker machines and other gambling devices for bars, restaurants, convenience stores, coffee shops and other locations in Philadelphia and its suburbs, and then collected the illegal gambling proceeds.
A total of 12 leaders, members and associates of the Philadelphia LCN Family have pleaded guilty or been convicted by a jury as part of this case. Eight of the defendants, including Staino, have been sentenced, and four are awaiting sentencing.
The case is being prosecuted by Trial Attorney John S. Han of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorneys Frank A. Labor III and Suzanne B. Ercole of the Eastern District of Pennsylvania. Valuable prosecutorial assistance was provided by the Pennsylvania Office of the Attorney General.
The case is being investigated by the FBI, Internal Revenue Service-Criminal Investigation, Pennsylvania State Police, New Jersey State Police, Philadelphia Police Department, U.S. Department of Labor’s Office of Inspector General Office of Labor Racketeering and Fraud Investigations, and U.S. Department of Labor’s Employee Benefits Security Administration. Additional assistance was provided by the New Jersey Department of Corrections.
Justice Department Enters into Far-reaching Agreement with the Commonwealth of Puerto Rico to Reform the Puerto Rico Police DepartmentRead the Press Release
The Justice Department today entered into a sweeping civil rights agreement with the commonwealth of Puerto Rico to modernize and reform the Puerto Rico Police Department (PRPD). The agreement resolves a civil suit initiated by the department in December 2012 to remedy a pattern and practice of police misconduct by PRPD. The agreement represents a joint commitment to effective and constitutional policing and is the product of extensive negotiations between the department, PRPD and the administrations of Governor Alejandro García-Padilla and his predecessor Luis Fortuño. The agreement was filed with the federal court today and will become court-enforceable once it is approved by District Judge Gustavo A. Gelpí.
The agreement is designed not only to promote constitutional policing, but also to enhance public and officer safety and increase community confidence in PRPD. The far-reaching agreement is among the most extensive agreements ever obtained by the department under the police misconduct provision of the Violent Crime Control and Law Enforcement Act of 1994, and requires corrective action in 11 core areas. These areas include use of force, searches and seizures, equal protection, policies and procedures, training, supervision, civilian complaints and internal investigations, community engagement and information systems. The agreement will also provide the public with meaningful opportunities to participate in the reform process through periodic community meetings, public reports, civilian interaction committees, community surveys and the implementation of community policing principles. The agreement is expected to be fully implemented in ten years, although there is no expiration date. A technical compliance advisor will assess and report on PRPD’s compliance, as well as provide technical assistance to promote constitutional policing.
The agreement is also tailored to the unique needs of PRPD and with a recognition of the public safety challenges facing Puerto Rico. With a diverse mission and a police force of 17,000 officers, PRPD is the second largest police department in the country and serves close to four million residents. An initial capacity-building period will allow PRPD to modernize its administrative systems and professionalize its police force. Through the development of action plans, PRPD will have broad flexibility to stage implementation and allocate resources to achieve measurable results within established time frames. Once the plans are implemented, officers in all police regions will have the policy guidance, training, supervision, equipment and support they need to carry out their duties in a lawful, effective and efficient manner.
“We commend the administrations of Governor Alejandro García-Padilla and his predecessor Luis Fortuño for taking on the formidable challenge of transforming PRPD into a modern police force that embraces constitutional policing as part of its core mission,” said Attorney General Eric Holder. “Police departments that respect the rights of the people they serve earn the confidence of the public and become more effective in fighting crime. Because the agreement we are announcing today will institutionalize a culture of accountability, Puerto Rico will now have access to nearly $10 million in asset forfeiture funds, which it can use to implement the reforms contained in the agreement.”
“Under the leadership of Justice Secretary Luis Sánchez Betances, Superintendent Héctor Pesquera, and their staff, we have been able to craft a historic agreement that will give the hard-working men and women of PRPD the support and tools they need to protect civil rights and effectively engage with the community to address public safety,” said Acting Associate Attorney General Tony West. “We are also grateful to all of the community leaders, police officers and members of the public who came forward to assist our investigation and who made this day possible.”
The department’s December 2012 civil lawsuit followed a thorough investigation of PRPD’s policies and practices. The investigation uncovered wide-ranging and long-standing deficiencies that gave rise to a pattern and practice of police misconduct, including use of excessive force, use of unreasonable force designed to suppress protected speech and unconstitutional searches and seizures. The investigation also uncovered evidence that PRPD has failed to adequately investigate gender-based violence and engaged in discriminatory policing. PRPD cooperated throughout the investigation and began initiating corrective actions in response to the investigative team’s recommendations and technical assistance.
The department began negotiating an agreement with the administration of former Governor Luis Fortuño after completing the investigation in September 2011. The negotiations culminated in a preliminary agreement that was filed concurrently with the department’s complaint in December 2012. The court granted a joint request to stay the proceedings to provide Governor García-Padilla’s administration the opportunity to review and negotiate a final agreement. Once the federal court approves the agreement, the parties will select a technical compliance advisor and begin implementation.
A copy of the complaint, the final agreement, the joint motion seeking approval of the agreement, and the September 2011 letter of findings can be found at www.justice.gov/crt If individuals have information that is relevant to the case and PRPD, you may contact the Department of Justice at [email protected] or at 877-871-9726.
Former CEO and Former CFO of ArthroCare Corp.<br /> Charged with Orchestrating $400 Million<br /> Securities Fraud SchemeRead the Press Release
The former chief executive officer and former chief financial officer of ArthroCare Corp., a publicly traded medical device company based in Austin, Texas, were charged for their alleged leading roles in a $400 million scheme to defraud the company’s shareholders and members of the investing public by falsely inflating ArthroCare’s earnings by tens of millions of dollars, announced Acting Assistant Attorney Mythili Raman of the Department of Justice’s Criminal Division and U.S. Attorney Robert Pitman of the Western District of Texas.
A 17-count indictment was unsealed today in the U.S. District Court for the Western District of Texas against Michael Baker, the former chief executive officer and director of ArthroCare, and Michael Gluk, the former chief financial officer of ArthroCare. Both defendants surrendered to authorities this morning.
The indictment, which was returned on July 16, 2013, charges Baker and Gluk with one count of conspiracy to commit wire and securities fraud, 11 counts of wire fraud, and two counts of securities fraud; it charges Baker alone with three counts of false statements. The indictment also seeks forfeiture of assets held by Baker and Gluk.
“Truthful corporate earnings reports are critical to the soundness of our financial system,” said Acting Assistant Attorney General Raman. “Today’s indictment alleges that those at the top of ArthroCare deceived investors and regulators by manipulating the company’s reports to inflate its stock, ultimately causing hundreds of millions in losses in shareholder value. The Criminal Division will continue to aggressively pursue corporate executives who undermine our financial markets for personal gain.”
According to the indictment, from at least December 2005 through December 2008, Baker, Gluk and other senior executives and employees of ArthroCare allegedly falsely inflated ArthroCare’s sales and revenue through a series of end-of-quarter transactions involving several of ArthroCare’s distributors. According to court documents, Baker, Gluk and other ArthroCare employees determined the type and amount of product to be shipped to distributors based on ArthroCare’s need to meet Wall Street analyst forecasts, rather than distributors’ actual orders. Baker, Gluk and others then allegedly caused ArthroCare to “park” millions of dollars worth of ArthroCare’s medical devices at its distributors at the end of each relevant quarter. ArthroCare would then report these shipments as sales in its quarterly and annual filings at the time of the shipment, enabling the company to meet or exceed internal and external earnings forecasts.
The indictment alleges that ArthroCare’s distributors agreed to accept shipment of millions of dollars of product in exchange for substantial, upfront cash commissions, extended payment terms and the ability to return product, as well as other special conditions, allowing ArthroCare to falsely inflate its revenue by tens of millions of dollars.
Baker, Gluk and others allegedly used DiscoCare, a privately owned Delaware corporation, as one of the distributors to cover shortfalls in ArthroCare’s revenue. According to the indictment, at Baker and Gluk’s direction, ArthroCare shipped product to DiscoCare that far exceeded DiscoCare’s needs.
In addition, Baker, Gluk and others allegedly lied to investors and analysts about ArthroCare's relationships with its distributors, including its largest distributor, DiscoCare. According to the indictment, Baker and Gluk caused ArthroCare to acquire DiscoCare specifically to conceal from the investing public the nature and financial significance of ArthroCare's relationship with DiscoCare.
The indictment further alleges that when Baker was deposed by the U.S. Securities and Exchange Commission about the DiscoCare relationship in November 2009, he lied again on multiple occasions.
According to court documents, between December 2005 and December 2008, ArthroCare’s shareholders held more than 25 million shares of ArthroCare stock. On July 21, 2008, after ArthroCare announced publicly that it would be restating its previously reported financial results from the third quarter 2006 through the first quarter 2008 to reflect the results of an internal investigation, the price of ArthroCare shares dropped from $40.03 to $23.21 per share. The drop in ArthroCare’s share price caused an immediate loss in shareholder value of more than $400 million.
If convicted, Baker and Gluk would face a maximum prison sentence of 25 years for the conspiracy charge, 20 years for each count of wire fraud, and 25 years for each securities fraud count. Baker faces five years for each count of false statements.
An indictment is merely a charge, and the defendants are presumed innocent until proven guilty.
This case was investigated by the FBI’s Austin office. The case is being prosecuted by Deputy Chief Benjamin D. Singer and Trial Attorneys Henry P. Van Dyck and William Chang of the Criminal Division’s Fraud Section. The Department recognizes the substantial assistance of the U.S. Securities and Exchange Commission.
El Departamento de Justicia realiza acuerdo amplio con el Estado Libre Asociado de Puerto Rico para la reforma del Departamento de Policía de Puerto RicoRead the Press Release
WASHINGTON - Hoy, el Departamento de Justicia realizó un acuerdo amplio de derechos civiles con el Estado Libre Asociado de Puerto Rico para la modernización y la reforma del Departamento de Policía de Puerto Rico [PRPD - Puerto Rico Police Department]. El acuerdo resuelve una demanda civil presentada por el Departamento de Justicia de EE.UU. [U.S. Department of Justicia (DOJ)] en diciembre de 2012 para remediar un patrón y una práctica de conducta policial indebida por parte del PRPD. El acuerdo representa un compromiso conjunto los servicios policiales efectivos y constitucionales y es producto de negociaciones amplias entre el departamento, el PRPD y los gobiernos del Gobernador Alejandro García Padilla y su predecesor Luis Fortuño. El acuerdo fue presentado al tribunal federal hoy y adquirirá fuerza de orden judicial una vez aprobado por el Juez de Distrito Gustavo A. Gelpí.
El acuerdo fue diseñado no solo para promover los servicios policiales constitucionales, sino también para optimizar la seguridad pública y de los agentes e incrementar la confianza de la comunidad en el PRPD. El acuerdo amplio se encuentra entre los acuerdos más exhaustivos ya obtenidos por el departamento bajo la disposición de conducta policial indebida de la Ley de Control de Delitos Violentos y Coacción Legal de 1994, y requiere acción correctiva en once áreas principales. Estas áreas incluyen el uso de fuerza, allanamientos y confiscaciones, protección igualitaria, políticas y procedimientos, capacitación, supervisión, quejas de civiles e investigaciones internas, participación comunitaria y sistemas de información. El acuerdo también brindará al público oportunidades significativas de participar en el proceso de reforma a través de reuniones comunitarias periódicas, informes públicos, comités de interacción civiles, encuestas comunitarias, y la implementación de principios de prestación de servicios policiales comunitarios. Se prevé que el acuerdo será implementado en el plazo de diez años, aunque no existe una fecha de vencimiento. Un asesor en cumplimiento técnico evaluará e informará acerca del cumplimiento del PRPD, y brindará asistencia técnica para promover la prestación de servicios policiales constitucionales.
El acuerdo también fue diseñado de acuerdo con las necesidades singulares del PRPD y con el reconocimiento de los desafíos de seguridad que Puerto Rico enfrenta. Con una misión diversificada y una fuerza policial de 17,000 agentes, el PRPD es el segundo departamento de policía del país en tamaño y atiende a más de cuatro millones de residentes. Un periodo inicial de creación de capacidad le permitirá al PRPD modernizar sus sistemas administrativos y profesionalizar su fuerza policial. A través del desarrollo de planes de acción, el PRPD tendrá amplia flexibilidad para realizar la implementación y asignar recursos para lograr resultados mensurables en los plazos establecidos. Una vez implementados los planes, los agentes de todas las regiones policiales tendrán la orientación sobre la política, la capacitación, la supervisión, los equipos y el apoyo que requieren para llevar a cabo sus tareas de manera legal, eficaz y eficiente.
"Felicitamos a los gobiernos del Gobernador Alejandro García Padilla y su predecesor Luis Fortuño por aceptar el desafío formidable de transformar al PRPD en una fuerza policial moderna que incluye la prestación de servicios policiales constitucionales en su misión esencial", señaló el Secretario de Justicia de EE.UU. Eric Holder, Jr. "Los departamentos de policía que respetan los derechos de las personas que atienden se ganan la confianza del público y pasan a ser más eficaces en la lucha contra la delincuencia. Debido a que este acuerdo que anunciamos hoy institucionalizará la cultura de la rendición de cuentas, Puerto Rico ahora tendrá acceso a casi 10 millones de dólares de fondos de confiscación de bienes, que podrá utilizar para implementar las reformas contenidas en el acuerdo".
"Bajo el liderazgo del Secretario de Justicia Luis Sánchez Betances, el Superintendente Héctor Pesquera y sus equipos, hemos logrado dar forma a un acuerdo histórico que brindará a los hombres y las mujeres trabajadores del PRPD el apoyo y las herramientas que necesitan para proteger los derechos civiles y lograr la participación efectiva de la comunidad en iniciativas de seguridad pública", dijo el Subsecretario de Justicia Interino Tony West. "También agradecemos a todos los líderes comunitarios, agentes de la policía y miembros del público que se ofrecieron para ayudar en nuestra investigación y que hicieron que este día fuera posible".
La demanda civil de diciembre de 2012 del departamento se entabló después de una investigación de las políticas y prácticas del PRPD. La investigación reveló deficiencias amplias y antiguas que provocaron un patrón y una práctica de conducta policial indebida, incluidos el uso de fuerza excesiva, uso de fuerza irrazonable diseñados para suprimir la libertad de expresión protegida, y allanamientos y confiscaciones inconstitucionales. La investigación también reveló pruebas de que el PRPD ha dejado de investigar adecuadamente casos de violencia de género y que ha prestado servicios policiales discriminatorios. El PRPD cooperó a lo largo de la investigación y comenzó a implementar acciones correctivas como respuesta a las recomendaciones del equipo de investigación y la asistencia técnica.
El departamento comenzó a negociar un acuerdo con el gobierno del ex Gobernador Luis Fortuño después de completar la investigación en septiembre de 2011. Las negociaciones culminaron con un acuerdo preliminar presentado junto con la demanda del departamento en diciembre de 2012. La corte federal aceptó el pedido de suspensión conjunto para brindarle al gobierno del Gobernador García Padilla la oportunidad de examinar y negociar un acuerdo definitivo. Una vez que el tribunal federal apruebe el acuerdo, las partes seleccionarán un asesor de cumplimiento técnico y comenzarán la implementación.
Se encuentran una copia de la demanda, el acuerdo final, una petición conjunta de aprobación del acuerdo y la carta de hallazgos de septiembre de 2011 en www.justice.gov/crt. Si tiene información relevante al caso y al PRPD, comuníquese con el Departamento de Justicia escribiendo a [email protected] o llamando al 877-871-9726.
California Businessman Pleads Guilty to Concealing Foreign Bank Account at Israeli Bank on His Tax ReturnRead the Press Release
CALIFORNIA BUSINESSMAN PLEADS GUILTY TO CONCEALING FOREIGN BANK ACCOUNT AT ISRAELI BANK ON HIS TAX RETURN
Saratoga Resident is the Latest in a Series of Defendants Charged With Concealing Bank Accounts at Israeli Banks
Assistant Attorney General for the Tax Division Kathryn Keneally and U.S. Attorney Melinda Haag for the Northern District of California announced that Moshe Handelsman of Saratoga, Calif., pleaded guilty today to filing a false tax return for tax year 2007.
According to the plea agreement, between approximately 1993 and 2000, Handelsman, a U.S. citizen, used three bank accounts held in the names of two different foreign corporations at foreign banks to falsely reduce his taxes. The last of those accounts was held at an Israeli bank located in Tel-Aviv, Israel. The foreign bank accounts and foreign corporations were set up with the assistance of his tax return preparers.
According to court documents, in approximately 2000, Handelsman traveled to Israel and met with a banker at the Israeli bank who referred him to an Israeli attorney to set up a foreign corporation. The foreign corporation was called Exportus Ltd. and was the named account holder of the account at the Israeli bank. From 2003 through 2008, Handelsman sent $1,808,075 from a domestic corporation he controlled called Advanced Forecasting Corp. to the Exportus Ltd. bank account. With the assistance of his tax return preparers, the funds transferred offshore were then deducted as false “Information Acquisition” expenses on the Advanced Forecasting Corp.’s tax returns. The false business expenses on the corporate tax returns resulted in an under-reporting of Handelsman’s income on his individual income tax returns for 2003 through 2008. Handelsman also failed to disclose the existence of his foreign bank account on his individual income tax returns. According to the plea agreement, in 2009, Handelsman closed his account at the Israeli bank and repatriated the money by transferring the funds into a second Israeli bank account and then to a U.S.-based Charles Schwab account in the name of a relative. The funds were then transferred from the Charles Schwab account to Handelsman to make it appear that the funds were a non-taxable gift from the relative.
U.S. citizens and residents who have an interest in, or signature or other authority over, a financial account in a foreign country with assets in excess of $10,000 are required to disclose the existence of such account on Schedule B, Part III, of their individual income tax returns. Additionally, U.S. citizens and residents must file a Report of Foreign Bank and Financial Reports (FBAR) with the U.S. Treasury disclosing any financial account in a foreign country with assets in excess of $10,000 in which they have a financial interest, or over which they have signature or other authority.
Handelsman faces a potential maximum prison term of three years and a maximum fine of $250,000. In addition, Handelsman has agreed to pay a civil penalty to the Internal Revenue Service (IRS) in the amount of 50 percent of the high balance of his undeclared accounts for failing to file FBARs. His sentencing is scheduled for Nov. 6, 2013.
Assistant Attorney General Keneally and U.S. Attorney Melinda Haag thanked special agents of IRS-Criminal Investigation, who investigated the case, and Tax Division Trial Attorneys Ellen M. Quattrucci and Christopher S. Strauss, who prosecuted the case, and Assistant U.S. Attorneys Thomas Moore and Thomas Newman of the U.S. Attorney’s Office for the Northern District of California, who assisted with the prosecution.
Additional information about the Tax Division and its enforcement efforts may be found at www.justice.gov/tax.
Seven Defendants in Mortgage Origination Fraud Scheme Indicted for Bank Fraud Conspiracy Along with Other ChargesRead the Press Release
The Justice Department announced that seven defendants were arrested and arraigned today for their roles in a mortgage fraud conspiracy that operated in Detroit.
A federal grand jury in the Eastern District Court of Michigan indicted Peter Allen, Suhail Hallak, Al Karana, Joey Murad, Jason Najor, Jeffrey Najor and Wasseem Shamoun with conspiracy to commit bank fraud, numerous counts of bank fraud and other fraud charges.
The indictment alleges that from approximately January 2006 to December 2008, the defendants conspired to defraud lending institutions by obtaining mortgage loans using fraudulent information. According to the indictment, the defendants devised a scheme wherein they purchased property for approximately $5,000 to $40,000 per home, then recruited straw buyers to submit fraudulent loan applications for home mortgages in exchange for a fee. According to the indictment, the scheme caused financial institutions to pay approximately $10 million in fraudulent mortgage loan funds.
In addition to the conspiracy charge, Hallak, Karana, Jason Najor, Jeffrey Najor, and Shamoun are charged with 20 counts of bank fraud, Murad is charged with seven counts of bank fraud and Allen is charged with two counts of bank fraud. Jeffrey Najor is also charged with two counts of assisting in the filing of false tax returns, in connection with his filings on behalf of J.A. Najor Corporation. Jeffrey Najor is also charged with one count of bankruptcy fraud.
An indictment is not a finding of guilt. Individuals charged in indictments are presumed innocent until proven guilty. If convicted of the conspiracy charge, the defendants face up to 30 years in prison and a $1 million fine. Each count of bank fraud carries a maximum penalty of 30 years in prison and $1 million fine. Assisting in the filing of a false return is punishable by up to three years in prison and a fine of $250,000. The bankruptcy fraud charge has a maximum penalty of five years in prison and a fine of $250,000.
This case was investigated by Internal Revenue Service – Criminal Investigation, the Drug Enforcement Administration and the FBI and is being prosecuted by Senior Litigation Counsel Corey Smith and Trial Attorney Mark McDonald of the Justice Department’s Tax Division.
Pizza Franchise Owner and Four Others Indicted for Tax FraudRead the Press Release
The Justice Department announced today that Happy Asker, franchise owner of multiple “Happy’s Pizza” franchises, was indicted by a federal grand jury in Detroit along with Maher Bashi, Tom Yaldo, Arkan Summa and Tagrid Bashi for multiple tax offenses arising from a conspiracy to underreport taxable income and payroll taxes of nine Happy’s Pizza franchises. All defendants with the exception of Happy Asker were arrested.
A multiple count indictment was unsealed in the Eastern District of Michigan charging Happy Asker, Maher Bashi and Tom Yaldo with conspiracy to defraud the United States by keeping fraudulent accounting records and falsely reporting income taxes and payroll taxes due and owing.
The indictment alleges that from approximately June 2004 through April 2011, the defendants conspired with each other to divert business receipts, underreport wages and understate the true income and expenses of specified Happy’s Pizza franchises. According to the indictment, the scheme resulted in the specified franchises paying more than $2.1 million in unreported wages to employees and shareholders
Additional charges in the indictment include three counts of filing a false individual income tax return as to Happy Asker; 21 counts of aiding in the filing of false payroll tax returns as to Happy Asker and Maher Bashi; 23 counts of aiding in the filing of false payroll tax returns as to Tom Yaldo on behalf of specified Happy’s Pizza franchises; and 11 counts as to Happy Asker and Maher Bashi for aiding in filing false corporate tax returns on behalf of specified Happy’s Pizza franchises.
Finally, the indictment also charges Happy Asker and Maher Bashi with one count of obstructing the due administration of the internal revenue laws. Arkan Summa and Tagrid Bashi are also charged together in a count of obstructing the due administration of the internal revenue laws and Tom Yaldo is also charged with one count of obstructing the due administration of the internal revenue laws.
An indictment is not a finding of guilt. Individuals charged in indictments are presumed innocent until proven guilty. If convicted of the conspiracy charge, the defendants face up to 5 years in prison and a $250,000 fine. The charges of filing a false income tax return and aiding or assisting in filing a false return carry a maximum penalty of three years in prison and a fine of $250,000 for each count. The obstruction charge carries a maximum penalty of three years in prison and a fine of $250,000 for each count.
This case was investigated by Internal Revenue Service – Criminal Investigation, the Drug Enforcement Administration and the FBI and is being prosecuted by Senior Litigation Counsel Corey Smith and Trial Attorney Mark McDonald of the Justice Department’s Tax Division.
Related Materials:
United States v. Happy Asker, et al.
Indictment ((PDF)Philadelphia La Cosa Nostra Member Sentenced to <br /> 137 Months in PrisonRead the Press Release
Damion Canalichio was sentenced today to serve 137 months in prison for his participation in a racketeering conspiracy involving loan sharking and illegal gambling, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Zane David Memeger of the Eastern District of Pennsylvania and Edward J. Hanko, Special Agent in Charge of the FBI’s Philadelphia Division.
Canalichio, 43, of Turnersville, N.J., was sentenced by U.S. District Judge Eduardo C. Robreno in the Eastern District of Pennsylvania. In addition to his prison term, Canalichio was sentenced to serve three years of supervised release.
On Feb. 5, 2013, after a four-month trial, a jury convicted Canalichio of conspiring to conduct and participate in the affairs of the Philadelphia La Cosa Nostra (LCN) Family through a pattern of racketeering activity. The evidence at trial proved that, in furtherance of the racketeering conspiracy, Canalichio, as a “made” member, engaged in loan sharking and illegal sports bookmaking activities on behalf of the mob. Canalichio exploited the violent reputation of the Philadelphia LCN Family in extending usurious loans and collecting payments on the loans, leaving the borrowers in fear of physical harm if they did not pay promptly. Canalichio also directed and supervised the participation of associates in his crew to carry out these racketeering crimes.
A total of 12 leaders, members and associates of the Philadelphia LCN Family have pleaded guilty or been convicted by a jury as part of this case. Seven of the defendants, including Canalichio, have been sentenced, and five are awaiting sentencing.
The case is being prosecuted by Trial Attorney John S. Han of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorneys Frank A. Labor III and Suzanne B. Ercole of the Eastern District of Pennsylvania. Valuable prosecutorial assistance was provided by the Pennsylvania Office of the Attorney General.
The case is being investigated by the FBI, Internal Revenue Service-Criminal Investigation, Pennsylvania State Police, New Jersey State Police, Philadelphia Police Department, U.S. Department of Labor’s Office of Inspector General Office of Labor Racketeering and Fraud Investigations, and U.S. Department of Labor’s Employee Benefits Security Administration. Additional assistance was provided by the New Jersey Department of Corrections.Pennsylvania Man Sentenced for Terrorist Solicitation and Firearms OffenseRead the Press Release
Emerson Winfield Begolly, 24, of New Bethlehem, Penn., was sentenced today in Pittsburgh to 102 months in prison for soliciting others to engage in acts of terrorism within the United States and for using a firearm during and in relation to an assault on FBI agents.
In addition, he was sentenced to serve five years supervised release. Begolly pleaded guilty on Aug. 9, 2011, to charges filed in the Eastern District of Virginia and the Western District of Pennsylvania.
The sentence was announced by David J. Hickton, U.S. Attorney for the Western District of Pennsylvania; Neil H. MacBride, U.S. Attorney for the Eastern District of Virginia; John P. Carlin, Acting Assistant Attorney General for National Security; Valerie Parlave, Assistant Director in Charge of the FBI’s Washington Field Office; and Gary Perdue, Special Agent in Charge of the FBI’s Pittsburgh Division.
“Emerson Begolly used the Internet to solicit likeminded radical jihadists to commit atrocities and murder,” stated U.S. Attorney Hickton. “Through effective use of court-sanctioned investigative tools, mass tragedy was averted.”
“We now find ourselves in an era where one of the greatest innovations of the modern era – the Internet—is being utilized by radical jihadists who seek to use that medium to endanger American lives,” said U.S. Attorney MacBride. “Those, like Mr. Begolly, who solicit others to engage in acts of terrorism will be brought to justice and prosecuted to the fullest extent of law.”
“This case highlights the need for continued vigilance against homegrown extremism and use of the Internet to incite violence,” said Acting Assistant Attorney General Carlin. “I want to thank the agents, analysts and prosecutors whose work resulted in today’s sentence.”
“Today’s sentence is the result of the effective coordination and enduring resolve of law enforcement to protect our citizens,” said Assistant Director Parlave. “Together with our partners, we will continue to work to combat the threat of violent homegrown extremism and keep our country safe.”
“The case against Mr. Begolly is an important reminder that online-inspired terrorism can occur anywhere, including Western Pennsylvania. Our efforts to detect and disrupt this threat are enduring,” said Special Agent in Charge Perdue. “The FBI, along with our law enforcement partners in the FBI Joint Terrorism Task Force, will continue to proactively employ all necessary resources in order to predict and prevent terrorist attacks from occurring and to ensure the ongoing safety of our communities.”
According to information presented by the government in court, Begolly was an active administrator on the Ansar al-Mujahideen English Forum (AMEF), which is an internationally used Islamic extremist Internet forum. Using the pseudonym of Abu Nancy, Begolly systematically solicited jihadists to use firearms, explosives and propane tanks against targets such as police stations, post offices, Jewish schools and daycare centers, military facilities, train lines, bridges, cell phone towers and water plants.
In the summer of 2010, Begolly urged jihadists on the AMEF to “write their legacy in blood.” Begolly promised a special place in the afterlife for violent action in the name of Allah. Following the reported shootings in Northern Virginia at the Pentagon and the Marine Corps Museum in October 2010, Begolly posted a comment online that praised the shootings and hoped the shooter had followed his previous postings encouraging similar acts of violence. On Dec. 28, 2010, Begolly further solicited his AMEF audience to violence by posting a manual on how to manufacture a bomb.
Days later, on Jan. 4, 2011, FBI agents were assaulted by Begolly as they attempted to prevent him from reaching a loaded 9 mm semi-automatic handgun, which he had concealed on his body. While violently struggling with the agents, Begolly bit the agents on their fingers in an attempt to free himself to reach his firearm. His actions are consistent with a posting in which he urged his audience not to be taken alive by law enforcement, to always carry a loaded firearm, and to aggressively resist any law enforcement encounter including biting fingers if necessary.
These cases were investigated by the FBI Washington Field Office and the FBI Pittsburgh Field Office. Assistant U.S. Attorney Neil Hammerstrom of the U.S. Attorney’s Office for the Eastern District of Virginia’s National Security and International Crime Unit, Assistant U.S. Attorney James Kitchen of the U.S. Attorney’s Office for the Western District of Pennsylvania’s National Security and Cybercrime Section, and Trial Attorney Stephen Ponticiello of the Counterterrorism Section in the Justice Department’s National Security Division are prosecuting the cases.
MS-13 Members Convicted in Atlanta for Murders <br /> and Attempted MurdersRead the Press Release
After a four-week trial, a federal jury has convicted Miguel Alvarado-Linares, Ernesto Escobar, Dimas Alfaro-Granados and Jairo Reyna-Ozuna for committing multiple murders, attempted murders, armed robberies and firearms offenses in Gwinnett and DeKalb Counties.
The convictions were announced today by Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; U.S. Attorney for the Northern District of Georgia Sally Quillian Yates; Brock D. Nicholson, Special Agent in Charge of U.S. Immigration and Customs Enforcement (ICE) – Homeland Security Investigations (HSI) in Atlanta; and Mark F. Giuliano, Special Agent in Charge of the FBI Atlanta Field Office.
Miguel Alvarado-Linares, aka “Joker,” 24, of Norcross, Ga.; Ernesto Escobar, aka “Pink Panther,” 30, of Norcross; Dimas Alfaro-Granados, aka “Toro,” 30, of Duluth, Ga.; and Jairo Reyna-Ozuna, aka “Flaco,” 28, of Norcross, were convicted late yesterday in U.S. District Court in the Northern District of Georgia.
“These four MS-13 members committed a host of brutal crimes that devastated countless lives in Northern Georgia,” said Acting Assistant Attorney General Raman. “As a result of the tireless work by the prosecutors and investigators who tackled this case, the defendants will be removed from the streets they have terrorized.”
“These defendants were the leaders of MS-13, an international gang known for its gratuitous murders,” said U.S. Attorney Yates. “They spread fear throughout the community by killing suspected rival gang members and others who cross their path. We will continue to work with our law enforcement partners to protect our streets from turning into battlegrounds.”“The defendants in this case indiscriminately brought murderous violence against rival gang members and innocent civilians alike,” said Brock D. Nicholson, Special Agent in Charge of HSI Atlanta. “HSI is proud to continue to partner with the FBI and the U.S. Attorney’s Office to target violent transnational gang members who threaten the safety of Atlanta communities.”
“Removing these violent gang members from the streets of metro Atlanta not only makes for a safer community but further weakens the Southeastern U.S. roots of this international criminal enterprise known as MS-13,” said Special Agent in Charge Mark F. Giuliano of the FBI Atlanta Field Office. “The FBI will continue to work with its various law enforcement partners in targeting this group, and others like them, in a unified and effective manner.”
According to the charges and other information presented in court, MS-13 is an international gang that has operated in the Atlanta area since at least 2005. During the course of this investigation, which ended in 2010, more than 75 MS-13 members were arrested, charged and/or deported. MS-13 members were organized into “cliques,” or groups, but they operated under the larger umbrella of MS-13. Each clique had a leader, usually referred to as “the first word,” who conducted weekly meetings, where members discussed their crimes against rival gang members and their plans to retaliate against their rivals. The clique leader collected dues from the gang members and used the money to buy guns and post bail for jailed members. Some of the money was sent back to the MS-13 leaders in El Salvador and Honduras. Clique leaders communicated with MS-13 leaders in their home countries to update them on gang activities in the Atlanta area. The gang members staked out Gwinnett and DeKalb Counties as their home territory, where they committed murders, attempted murders and armed robberies. They also sold cocaine as part of their gang activity.
The evidence presented at trial showed that the defendants committed the following crimes:
• Alvarado-Linares and Alfaro-Granados, along with another gang member, killed Lal Ko in October 2006. Ko was a fellow MS-13 member, but Alvarado-Linares, one of the gang leaders, thought that Ko was cooperating with police and ordered his murder.
• In December 2006, when another MS-13 gang member wanted to quit the gang, Alvarado-Linares and Alfaro-Granados ordered him to kill a rival gang member as a condition of leaving MS-13. On Christmas Eve 2006, that gang member, following orders, shot at a car on Highway 316 that he believed contained rival gang members. The passenger, Angel Gonzalez, was murdered. He was 20 years old.
• On New Year’s Eve 2006, Alvarado-Linares was at an apartment complex where he exchanged gang hand signs and insults with two members of the rival gang SUR-13. Alvarado-Linares then pulled out a gun and shot the men.
• In August 2007, Escobar got into a scuffle with two teenagers at a Shell gas station in Gwinnett County. Escobar reported the incident to Reyna-Ozuna, who was the gang leader at the time. Reyna-Ozuna gave Escobar a .45 caliber semi-automatic handgun to retaliate. Escobar went back to the Shell station and shot and killed one of the teenagers as he was painting lines in the parking lot. The victim was only 16 years old.
• In October 2007, Alvarado-Linares was in Gwinnett County and came across a suspected member of the 18th Street gang. Alvarado fired a shotgun and killed the victim, who was 15 years old.
Alvarado-Linares, Escobar and Alfaro-Granados were convicted of RICO conspiracy involving murder, which carries a maximum penalty of life in prison. Reyna-Ozuna was convicted of RICO conspiracy, which carries a maximum penalty of 20 years in prison. Alvarado-Linares, Escobar and Alfaro-Granados were also convicted of committing violent crimes in aid of racketeering, which carries a mandatory sentence of life in prison. All of the defendants were convicted of firearms offenses, which carry a sentence of up to and including life in prison. There is no parole in the federal system.
The sentencing for the four defendants will be scheduled at a later date before U.S. District Judge Richard W. Story in the Northern District of Georgia.
This case is being investigated by Special Agents from U.S. Immigration and Customs Enforcement’s Homeland Security Investigations and the Federal Bureau of Investigation, with assistance from the U.S. Marshals Service, Gwinnett County Police Department, DeKalb County Police Department, Norcross Police Department, Chamblee Police Department and Gwinnett County Sheriff’s Office.
Assistant U.S. Attorneys Paul R. Jones and Kim S. Dammers of the Northern District of Georgia and Trial Attorney Joseph K. Wheatley of the Criminal Division’s Organized Crime and Gang Section are prosecuting the case.
Florida Health Care Medical Director and Six Therapists<br /> Arrested for Alleged Roles in $63 Million Fraud SchemeRead the Press Release
The former medical director at defunct health provider Health Care Solutions Network (HCSN) and six therapists were arrested today, accused of conspiring to fraudulently bill Medicare and Florida Medicaid more than $63 million.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; U.S. Attorney for the Southern District of Florida Wifredo A. Ferrer; 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 after the indictment was unsealed following the arrests.
The former HCSN medical director, Roger Rousseau, 71, of Miami, was indicted on July 11, 2013, and charged with conspiracy to commit health care fraud and two counts of health care fraud. In addition, six therapists from Miami – Doris Crabtree, 61; Angela Salafia, 65; Liliana Marks, 46; Ruben Busquets, 49; Alina Fonts, 47; and Blanca Ruiz, 59 – were also charged in the same indictment with conspiracy to commit health care fraud. Fonts was also charged with two counts of health care fraud, and Crabtree, Salafia, Marks and Busquets were each charged with two counts of making false statements related to health care matters. The indictment also seeks forfeiture of proceeds from the alleged healthcare fraud offenses.
According to the indictment, HCSN purported to provide intensive mental health treatment to Medicare and Medicaid beneficiaries in Miami and Hendersonville, N.C., from approximately 2004 through 2011 for purported mental health services that were not medically necessary and often never provided. The indictment also alleges that in Miami, HCSN paid kickbacks to assisted living facility owners and operators who, in exchange, referred beneficiaries to HCSN. In total, HCSN is alleged to have fraudulently billed Medicare and Medicaid approximately $63.7 million, from which HCSN allegedly received payments totaling approximately $28 million.
Rousseau served as the medical director for HCSN in Florida, and the indictment alleges that he routinely signed what he knew to be fabricated and altered medical records without ever reviewing the materials, and, in most instances, without ever meeting with the patient. The indictment also alleges that Crabtree, Salafia, Marks, Busquets, Fonts and Ruiz fabricated HCSN medical records to support false and fraudulent claims for partial hospitalization program services that were not medically necessary and were not provided.
The charges and allegations contained in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
The case is being investigated by the FBI and HHS-OIG, and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division's Fraud Section and the U.S. Attorney's Office for the Southern District of Florida. The case is being prosecuted by Fraud Section Trial Attorney Allan J. Medina.
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.
Diamond Electric Mfg. Co. Ltd. and an Autoliv Inc. Executive Agree to Plead Guilty to Price Fixing on Automobile Parts Installed in U.S. CarsRead the Press Release
Osaka, Japan-based Diamond Electric Mfg. Co. Ltd. has agreed to plead guilty and to pay a $19 million criminal fine for its role in a conspiracy to fix prices of ignition coils installed in cars sold in the United States and elsewhere, the Department of Justice announced today. This is the first case in the department’s antitrust investigation involving parts sold directly to an automobile company headquartered in the United States – Ford Motor Co. The department also announced that an Autoliv Inc. executive has agreed to plead guilty for his role in a conspiracy to fix the prices of certain seatbelts sold to Toyota Motor Corp. for installation in cars manufactured and sold in the United States and elsewhere.
Diamond Electric has agreed to cooperate with the department’s ongoing investigation. Takayoshi Matsunaga, a current employee of Autoliv and former vice president of the Toyota Global Business Unit at Autoliv Japan, agreed to serve one year and one day in a U.S. prison, to pay a $20,000 criminal fine and to cooperate with the department’s ongoing investigation. The plea agreements for both Diamond Electric and Matsunaga are subject to court approval.According to a one-count felony charge filed today in U.S. District Court for the Eastern District of Michigan in Detroit, Diamond Electric engaged in a conspiracy, by agreeing during meetings and conversations, to rig bids for, and to fix, stabilize and maintain the prices of ignition coils it sold to Ford Motor Co., Toyota Motor Corp., Fuji Heavy Industries Ltd. and certain of their subsidiaries, in the United States and elsewhere, on a model-by-model basis. According to the charge, Diamond Electric and its co-conspirators carried out the conspiracy from at least as early as July 2003 until at least February 2010.
“Today’s prosecutions brings the total to 10 companies and 15 executives held accountable for fixing prices on parts used to manufacture cars in the United States,” said Scott D. Hammond, Deputy Assistant Attorney General of the Antitrust Division’s criminal enforcement program. “The Antitrust Division and its law enforcement partners will protect American businesses and consumers from harmful price-fixing cartels and bring those responsible to justice.”
Diamond Electric manufactures and sells ignition coils. Ignition coils are part of the fuel ignition system. They are responsible for quickly releasing electricity to the spark plugs for ignition.
According to a one-count felony charge filed today in the U.S. District Court for the Eastern District of Michigan in Detroit, Matsunaga, a Japanese national, engaged in a conspiracy to rig bids for, and to fix, stabilize and maintain the prices of certain seatbelts sold to Toyota in the United States and elsewhere. According to the charge, Matsunaga’s involvement in the conspiracy lasted from on or about May 2008 until at least February 2011.
“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 Robert D. Foley III, Special Agent in Charge, FBI Detroit Division. “The FBI is committed to pursuing and prosecuting these individuals for their crimes.”
According to the charge, Matsunaga and his co-conspirators carried out the conspiracy by, among other things, agreeing during meetings and discussions to coordinate bids submitted to Toyota. Matsunaga is the 15th individual to agree to plead guilty in the department’s ongoing antitrust investigation into price fixing and bid rigging in the auto parts industry.
Stockholm-based Autoliv Inc. is a manufacturer of automotive occupant safety systems, including certain seatbelts. In June 2012, Autoliv agreed to plead guilty and to pay a $14.5 million criminal fine for its role in a conspiracy to fix the prices of certain seatbelts, airbags and steering wheels installed in U.S. cars.Including Diamond Electric and Matsunaga, 10 companies and 15 executives have pleaded guilty or agreed to plead guilty in the division’s ongoing investigation into price fixing and bid rigging in the auto parts industry and have agreed to pay a total of $828 million in criminal fines. DENSO, Nippon Seiki Ltd., Tokai Rika Co. Ltd., Furukawa Electric Co. Ltd, Yazaki Corp., G.S. Electech Inc., Fujikura Ltd., Autoliv Inc. and TRW Deutschland Holding GmbH have already pleaded guilty. Additionally, 12 individuals have been sentenced to pay criminal fines and to serve jail sentences ranging from a year and a day to two years each. Two additional executives have agreed to serve time in prison and are currently awaiting sentencing.
Diamond Electric and Matsunaga are charged with price fixing in violation of the Sherman Act, which carries maximum penalties of a $100 million criminal fine for corporations and 10 years in prison and a $1 million criminal fine for individuals. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.The charges are the result of an ongoing federal antitrust investigation into price fixing, bid rigging and other anticompetitive conduct in the automotive parts industry, which is being conducted by each of the Antitrust Division’s criminal enforcement sections and the FBI. Today’s charges were brought by the Antitrust Division’s 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.
Ashland, Ohio, Trio Indicted for Labor Trafficking and Other CrimesRead the Press Release
A five-count indictment was filed charging three people from Ashland, Ohio, with engaging in a labor trafficking conspiracy and related crimes for holding a woman with cognitive disabilities and her child against their will and forcing the woman to perform manual labor for them, law enforcement officials said today.
According to the indictment, Jordie L. Callahan, 26, Jessica L. Hunt, 31, and Dezerah L. Silsby, 21, used a combination of violence, threats, sexual assaults, humiliation and monitoring to establish and continue a pattern of domination and control over their victims, identified only as S.E. and her child B.E. A fourth person, Daniel K. Brown, 33, of Ashland, was charged in a criminal information filed today with one count of conspiracy.
The conspiracy between Callahan, Hunt, Silsby and Brown took place between August 2010 and October 2012. The object of the conspiracy included holding S.E. in a condition of forced labor and involuntary servitude; obtaining S.E.’s and B.E.’s public assistance benefits; and intentionally causing painful injuries to S.E. so they could use the narcotic pain medications she was prescribed.
According to court documents, the defendants’ tactics included beating S.E., threats of beatings to S.E. and B.E., taunting and threatening the victims with pit bulls and snakes, causing the victims to sleep in unsafe and unsanitary conditions, restricting S.E. and B.E.’s access to the bathroom, preventing them from eating regular and suitable meals and forcing S.E. to eat dog food and crawl on the floor while wearing a dog collar.
Callahan and Hunt recruited S.E. and B.E. to live with them in their two-bedroom apartment in Ashland, knowing that S.E. has a cognitive disability and that S.E. and B.E. received monthly public assistance payments.
According to the indictment, in or around September 2010, Callahan and Hunt forced S.E. to have her and B.E.’s public assistance benefits issued on a debit card rather than paper check. They then took control of the card, forced S.E. to give them the PIN and used the card for their own benefit and the benefit of their family and friends.
On multiple occasions between August 2010 and October 2012, Callahan and Hunt threatened S.E. and B.E. with serious physical harm, including death, if S.E. did not clean up the apartment, care for their numerous pit bull dogs, snakes and other reptiles, purchase items at the store and perform other labor and services. On one occasion, Callahan pointed a firearm at S.E.’s head and threatened to kill her if she did not perform the labor and services he and other conspirators commanded. Callahan also forced S.E. on multiple occasions to engage in sex acts with him and threatened that he and Hunt would kill S.E. if she told anyone about the forced sexual acts .
In August 2011, Silsby, at the direction of Callahan and Hunt, smashed S.E.’s hand with a rock with such force that S.E. needed to go to the hospital emergency room. In December 2011, Callahan and Hunt injured S.E.’s back with such force that she needed medical treatment. In March 2012, Callahan kicked S.E. in the hip with such force that she needed medical treatment. After each incident, Callahan and Hunt forced S.E. to give them the narcotic pain pills and prescriptions for the medication as stated in the indictment.
Callahan and Hunt used a video camera to monitor S.E. and B.E.’s activities and conversations in the apartment. They often forced S.E. to walk to the store to buy groceries, cigarettes, dog food and other items for Callahan, Hunt and Hunt’s four sons and to pay for these purchases with her public assistance card. They allotted S.E. only a brief time period to complete the shopping and warned her that she was not allowed to speak with anyone while she was out. They frequently required B.E. to remain with them at the apartment while S.E. was out and threatened physical harm to B.E. and S.E. if S.E. broke any of their rules.
The indictment also states that Callahan and Hunt threatened to contact Ashland County Job and Family Services and have B.E. taken away if S.E. purchased any items at the store other than those they ordered or if she told anyone about their unlawful conduct.
In June 2011, after S.E. and B.E. had attempted to flee the apartment, Callahan and Hunt ordered Brown and Silsby to find S.E. and B.E. and bring them back to the apartment. Brown and Silsby lured S.E. and B.E. into their vehicle by promising to take them to Dairy Queen, only to drive them afterwards back to the apartment.
On multiple occasions, Callahan and Brown locked S.E. and B.E. in a room with a window that was nailed shut and a door that had been locked from the outside according to court documents.
As stated in the indictment, in October 2011, Callahan and Hunt forced S.E. to hit her child while they recorded a video, and threatened to inflict much greater physical harm on both S.E. and B.E. if S.E. did not comply. One month later, Callahan and Hunt again forced S.E. to strike B.E. while they captured a video recording of the staged incident on Callahan’s cell phone. Callahan and Hunt repeatedly threatened have B.E. taken away by showing the videos to authorities in order to secure S.E.’s compliance to the conspirators’ commands.
Callahan, Hunt and Silsby face one count each of the following: conspiracy; forced labor; theft of government benefits; and acquiring a controlled substance by deception. Callahan and Hunt face an additional charge of tampering with a witness.
The case is being prosecuted by Assistant U.S. Attorneys Chelsea Rice and Thomas E. Getz and Trial Attorney Victor Boutros of the Civil Rights Division’s Human Trafficking Prosecution Unit, following an investigation by the FBI and Ashland Police Department, with assistance from the Ashland County Prosecutor’s Office.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
U.S. Trustee Program Announces Settlement with CitiGroup Inc. Protecting Consumers’ Personal Information in Bankruptcy CasesRead the Press Release
Nationwide Agreement Requires Citigroup to Protect Personal Information of Nearly 150,000 Consumers
WASHINGTON — The U.S. Trustee Program (USTP) today announced the unsealing of a settlement with Citigroup Inc. (Citi) that protects the personal information of nearly 150,000 consumers in 85 jurisdictions around the country. Citi agreed to redact proofs of claim filed in bankruptcy cases nationwide in which the personal information of consumer debtors and third parties, including Social Security numbers and birthdates, had not been properly redacted as required by the bankruptcy rules. Citi also agreed to notify all affected consumers and offer them one year of free credit monitoring. An independent auditor appointed under the settlement is reviewing the accuracy of the correction process.
The settlement, approved by the U.S. Bankruptcy Court for the Southern District of New York on March 13, 2012, had been sealed to prevent potential wrongdoers from learning of the breach and seeking to victimize the affected consumers. On July 11, 2013, the bankruptcy court granted the parties’ motion to unseal the proceedings.
“Under this unprecedented settlement, nearly 150,000 consumers whose personal information was placed at risk through no fault of their own have received notice of the improper disclosure and can further protect their information through free credit monitoring,” stated Clifford J. White III, Director of the Executive Office for U.S. Trustees. “Creditors in bankruptcy cases have a legal duty to protect certain personal information of their customers. This settlement should remind all major financial institutions and other creditors that violations cannot be tolerated.”
The settlement resolved the objection of the U.S. Trustee for Region 2, Tracy Hope Davis, to a motion Citi filed under seal in September 2011. Citi’s motion disclosed that between 2007 and 2011 its subsidiaries, including CitiMortgage Inc., Citibank N.A. and CitiFinancial Inc., filed proofs of claim in thousands of consumer bankruptcy cases seeking payment of amounts alleged to be owed by debtors. In April 2011, Citi discovered that certain personal information that should have been redacted under bankruptcy court rules, including consumers’ Social Security numbers and birth dates, had not been properly redacted.
The U.S. Trustee agreed that the information should be redacted, but objected to Citi’s motion because it did not disclose the nationwide scope of the breach. In addition, Citi did not propose a verifiable solution to correct the problem or provide assurance that the matter would be made public and the seal lifted once the information was redacted and affected consumers received notice.
On March 13, 2012, the bankruptcy court approved the settlement calling for the redaction and electronic filing of replacement claims at Citi’s expense. The settlement also included specific consumer protections, including: assurance that the original claims would not be overwritten or altered in the replacement process; notification to the affected debtors and third parties that their personal information was not properly redacted and of its correction; and an offer of one year of free credit monitoring.
Under the settlement, the court also appointed an independent auditor to review and file certifications with the court confirming that Citi’s investigation to determine the scope of the breach was adequate, that Citi filed properly redacted claims and did not overwrite or replace the original claims in the process, and that Citi’s policies and procedures for future filings are reasonably calculated to prevent recurrence of the redaction error.
On July 19, 2012, Citi certified to the bankruptcy court the successful redaction and replacement of the filings in the Southern District of New York. During that process, Citi discovered additional redaction issues and, in accordance with the settlement, filed a plan of corrective action expanding the scope of the settlement to include the redaction of approximately 50,000 additional bankruptcy filings.
Courts in 60 other jurisdictions served by the USTP have entered the settlement under seal and accepted the redacted replacement filings. Courts in the remaining jurisdictions handled the correction of the filings according to their local rules and orders, and Citi is otherwise following the terms of the settlement in those jurisdictions.
On June 4, 2013, the independent auditor certified to the U.S. Bankruptcy Court for the Southern District of New York and the 60 other participating courts that Citi had mailed letters notifying affected consumers of the privacy breach, its correction and the availability of one year of free credit monitoring at Citi’s expense. The independent auditor is reviewing Citi’s redaction and replacement process and is expected to issue its certification on that process by the end of the year.
Consumer debtors who believe they were affected may contact Citigroup Customer Service at 1-866-613-5636.
The U.S. Trustee Program is the component of the Justice Department that protects the integrity of the bankruptcy system by overseeing case administration and litigating to enforce the bankruptcy laws.
The settlement is filed in In re Matter of Citi Replacement Filings, No. 11-00405 (Bankr. S.D.N.Y.).
Contact:Jane Limprecht, Public Information Officer
Executive Office for U.S. Trustees
(202) 305-7411Settlement Agreement (Stipulation and Order) [PDF - 1.07 MB]
The Gallup Organization Agrees to Pay $10.5 Million to Settle Allegations That It Improperly Inflated Contract Prices and Engaged in Prohibited Employment Negotiations with Fema OfficialRead the Press Release
The Justice Department announced today that the Gallup Organization has agreed to pay $10.5 million to settle allegations that it violated the False Claims Act and the Procurement Integrity Act for conduct involving several of its federal government contracts and subcontracts. Gallup is a polling and market research firm headquartered in Washington, D.C.
The settlement announced today resolves allegations in a complaint filed by the United States in November 2012. The United States’ complaint alleged that Gallup knowingly overstated its true estimated labor hours in proposals to the U.S. Mint and State Department for contracts and task orders that were to be awarded without competition. Because of Gallup’s conduct, the complaint alleged, the two federal agencies awarded Gallup contracts and task orders at falsely inflated prices. The settlement also resolves allegations that Gallup engaged in improper employment negotiations with a then Federal Emergency Management Agency (FEMA) official, Timothy Cannon, in order to obtain a FEMA subcontract at an inflated price and additional FEMA funding after the subcontract had been awarded.
“Contractors must be honest and straightforward in their contract proposals to the government,” said Stuart F. Delery, Acting Assistant Attorney General for the Civil Division of the Department of Justice. “We will pursue contractors that seek to take advantage of the government by providing estimates that do not reflect their best judgment, or by offering employment to federal officials who have a conflict of interest. This type of misconduct results in inflated contract prices and undermines the integrity of the government’s contracting process.”
Separately, in April 2013, Cannon agreed to pay $40,000 to the United States to resolve allegations that he violated the Procurement Integrity Act by improperly negotiating for and accepting an offer of employment from Gallup while being personally and substantially involved in Gallup’s subcontract with FEMA. In related criminal proceedings, on January 15, 2013, Cannon pled guilty to a violation of 18 U.S.C. § 208, a federal conflict of interest statute, and was subsequently sentenced to probation.
“This case exposed a cozy arrangement between a contractor and a government employee where nobody was looking out for the American taxpayer,” said Ronald C. Machen Jr., U.S. Attorney for the District of Columbia. “With this settlement, we have held the contractor accountable for overbilling the government and returned $10.5 million to the federal treasury. This significant corporate settlement and the related criminal prosecution should send a clear message that contractors and government officials alike must operate with honor and integrity.”
The False Claims Act allegations against Gallup were originally brought in a lawsuit filed under the whistleblower provisions of the Act by Michael Lindley, Gallup’s former Director of Client Services. The False Claims Act prohibits the submission of false claims for government money or property and allows the United States to recover treble damages and penalties for a violation. Under the Act’s whistleblower provisions, a private party may file suit on behalf of the United States and share in any recovery. The United States may elect to intervene and take over the case, as it did here. As a result of the settlement with Gallup, Lindley will receive $1,929,363 as his share of the government’s recovery.
The settlement announced today is part of a global civil, criminal, and administrative resolution involving the Department of Justice’s Civil Division, the U.S. Attorney’s Office for the District of Columbia, and the United States Department of Homeland Security (DHS). After the United States’ civil complaint was filed, DHS, the parent organization of FEMA, suspended Gallup from government contracting. In contemplation of resolving the criminal and civil investigations, Gallup recently entered into an Administrative Agreement with DHS, under which Gallup agreed to enhance its corporate compliance and ethics programs. As a result, DHS lifted the suspension of Gallup. Contemporaneous with the civil settlement, Gallup has entered into a Non-Prosecution Agreement with the U.S. Attorney’s Office for the District of Columbia related to the FEMA conflict of interest allegations, in which Gallup has further agreed to strengthen its corporate compliance and ethics programs and to pay a penalty of $50,000.
The criminal investigation was conducted by the FBI and the Inspectors General for DHS and the General Services Administration (GSA).
The Deputy Inspector General for the Department of State, Harold W. Geisel, said, “We are very pleased with the successful resolution of this case, and I commend the dedication of our OIG investigators in these complicated investigations. Our efforts should reinforce our commitment to American taxpayers to recover funds from contractors who have unlawfully claimed them.”
P. Brian Crane, Assistant Inspector General for Investigations, Treasury Office of Inspector General, would like to thank the U.S. Department of Justice and all agents involved in this case, and states that his office is committed to investigating contract fraud within Treasury’s bureaus, and is pleased with the outcome of this investigation.
"We are vigilant to protect taxpayers from contractors who overcharge the government," said GSA Inspector General Brian D. Miller.
The claims asserted in the government’s complaint are allegations only and there has been no determination of liability. The case is United States ex rel. Lindley v. The Gallup Organization, No-09-cv-01985 (D.D.C.).
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Settlement AgreementNorth Carolina Used Oil Recycling Business and Owner Plead Guilty to Unlawful Handling of PCB-Contaminated Used Oiland Other CrimesRead the Press Release
Benjamin Franklin Pass, 60, and P&W Waste Oil Services Inc. of Wilmington, N.C., pleaded guilty today in federal court in the Eastern District of North Carolina for violations of the Toxic Substances Control Act, as well as for making false statements and failing to pay several years of taxes, announced the Department of Justice’s Environment and Natural Resources Division and the U.S. Attorney’s Office for the Eastern District of North Carolina. The defendants admitted to, among other things, the unlawful handling of a toxic substance that resulted in widespread contamination.
The P&W facility in Leland, N.C., included a tank farm consisting of multiple tanks ranging from 20,000 gallons to 500,000 gallons. The facility is located approximately 500 feet to the east of the Cape Fear River and a federally recognized wetland.
As part of its business operations, P&W transported, processed and marketed used oil contaminated with polychlorinated biphenyls (PCBs). P&W received the used oil from small and large companies, such as automotive service stations, transformer repair companies and marinas. P&W also conducted tank cleaning and waste removal.
According to the charges filed in federal court in Raleigh, N.C., and information stated in open court, the defendants knowingly failed to comply with regulations covering PCB-contaminated used oil by unlawfully transporting, storing and disposing of used oil contaminated with PCBs. Specifically, in July 2009, an employee transported waste oil containing fluid from five PCB transformers from a site in Wallace, S.C., to the P&W facility. The investigation revealed that the waste oil was contaminated with PCB concentrations in excess of 500 parts per million.
“Enforcing our environmental laws is essential to protecting the health of North Carolina’s residents and their natural resources,” said Robert G. Dreher, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. “PCBs are well known to pose substantial risks to human health and the environment and must be handled responsibly and lawfully. We will continue to vigorously prosecute those who ignore the laws Congress enacted in order to protect the people and the environment from coming into contact with this toxic substance.”
“This disregard of environmental protections resulted in significant contamination,” said U.S. Attorney for the Eastern District of North Carolina Thomas G. Walker. “The defendant’s conduct placed an economic burden on the United States and an unreasonable risk to the health and safety of the citizens of North Carolina.”
Despite knowledge of the investigation into the defendants’ illegal handling of PCB-contaminated used oil, Pass and an employee of P&W (at Pass’ direction) continued to unlawfully dilute the contaminated used oil. The mishandling of the PCB-contaminated used oil resulted in the wide-spread contamination at the site and other sites, resulting in millions of dollars in cleanup costs.
PCBs pose such an unreasonable risk of injury to human health and the environment that effective Jan. 1, 1978, Congress banned the production of PCBs and mandated that no person may distribute in commerce, or use any PCBs other than in a totally enclosed manner, and directed the U.S. Environmental Protection Agency (EPA) to promulgate rules phasing out the manufacture of PCBs and regulating their disposal.
As part of the plea agreements, Pass agreed to pay $538,587, plus interest, in restitution to the Internal Revenue Service. P&W agreed to pay restitution in the amount of $19 million as compensation to Colonial Oil and International Paper for the costs associated with the storage and proper disposal of PCB-contaminated used oil as well as any monetary losses associated with the illegal handling, storage and transportation of toxic substances. P&W also agreed to a five-year term of probation and to take remedial action to address the environmental contamination at its facility in eastern North Carolina and other leased property in eastern North Carolina, including but not limited to, the proper treatment and/or disposal of PCB-contaminated waste oil.
Currently, efforts are underway to clean up the contamination at P&W’s facility in Leland, N.C., which has been designated a Superfund site by the EPA. Superfund is the name given to the federal environmental program established to clean up the nation’s uncontrolled hazardous waste sites.
“The license to run a business is not a license to avoid paying taxes,” said Richard Weber, Chief, Internal Revenue Service (IRS) Criminal Investigation. “IRS Criminal Investigation provides financial investigative expertise in our work with our law enforcement partners. As today’s announcement shows, our skills support a wide range of investigations. Pass’ plea demonstrates the strength of our collective efforts to enforce the law and ensure public trust.”
“The defendant's failure to notify EPA of the presence and intentional dilution of PCB-contaminated fuel oil not only posed a risk to public health and the environment, but also demonstrated the level of disregard for the laws that were designed to protect us.” said Maureen O'Mara, Special Agent in Charge of Environmental Protection Agency’s (EPA) criminal enforcement office in Atlanta. “Today’s guilty plea sends a clear message that the government will prosecute those who recklessly endanger the health of our communities and environment by ignoring the law.”
The defendants entered their plea before U.S. District Judge James C. Dever III of the Eastern District of North Carolina.
U.S. Attorney Walker and Acting Assistant Attorney General Dreher praised the efforts of the EPA’s Criminal Investigation Division and the IRS’s Office of Criminal Investigations and the U.S. Coast Guard’s Criminal Investigative Services for their diligent work in the investigation of this matter. Assistant U.S. Attorney Banumathi Rangarajan of the Eastern District of North Carolina and Trial Attorney Shennie Patel of the Justice Department’s Environmental Crimes Section of the Environment and Natural Resources Division are the prosecutors in charge of the case.Navajo Nation Human Rights Commission and Civil Rights Division Indian Working Group Create Communication BridgeRead the Press Release
Today marked the establishment of a memorandum of understanding (MOU) between the Navajo Nation Human Rights Commission and the Civil Rights Division’s Indian Working Group (IWG). The MOU will establish a communication process that will ensure that civil rights violations are brought to the IWG when the civil rights of a member of the Navajo Nation is violated.
The commission was established as an entity of the Navajo Nation government to operate as a clearinghouse entity to address discriminatory actions against citizens of the Navajo Nation. The commission works to ensure that Navajo citizens are free from discrimination and are free to enjoy basic human rights and fundamental freedoms. The commission is authorized to receive reports of discriminatory and racially motivated acts perpetrated against citizens of the Navajo Nation and refer such incidents to the proper authorities.
The IWG is a part of the Justice Department’s Civil Rights Division and is comprised of members from throughout the Civil Rights Division. The mission and purpose of the IWG is to assist the Civil Rights Division in its law enforcement duties and responsibilities toward Native Americans. The IWG works to identify issues that affect Native Americans and to refer, coordinate, support and monitor enforcement and outreach activities involving Native Americans.
The MOU evolved from discussions on May 25, 2012 between the commission, Albert Sanchez, Program Analyst for the New Mexico Equal Employment Opportunity Commission (NMEEOC), and Albert Baltazar, Special Counsel of the Civil Rights Division regarding civil rights violations in border towns surrounding the Navajo Nation.
The MOU promotes and encourages enforcement of federal civil rights laws by increasing communication between the Commission and IWG. The MOU outlines procedures and provides guidance to the Commission and IWG in sharing information about civil rights issues affecting citizens of the Navajo Nation.
“This MOU will assist the Commission by streamlining and expediting information between agencies to resolve civil rights violations that are not afforded the same investigative measures that non-indigenous victims receive. This MOU will be that stepping stone toward resolving issues that this Commission has had difficulty with pursuing in the border towns surrounding the Navajo Nation” said Commissioner Darden, chairperson of the Commission.
“This MOU between the Navajo Nation Human Rights Commission and the Indian Working Group establishes a strong mechanism to assist the Civil Rights Division to address civil rights issues involving citizens of the Navajo Nation, “ said Eve Hill, Senior Counselor to the Assistant Attorney General for Civil Rights. “For far too long Native Americans have experienced discrimination and injustice, and the federal government can and must stop such discrimination.”
“With the MOU approved by both the Navajo Nation and U.S. civil rights office, the Navajo Human Rights Office now looks forward to working on common strategy to address race discrimination against Navajo citizens,” said Leonard Gorman, Executive Director of the Office of Navajo Nation Human Rights Commission.
A copy of the signed MOU may be viewed at http://www.justice.gov/crt/publications/mouiwg.pdf
Massachusetts Man Charged with Selling Counterfeit Semiconductors Intended for Use on Nuclear SubmarinesRead the Press Release
Peter Picone, 40, of Methuen, Mass., has been charged with importing counterfeit semiconductors from China for sale in the United States.
The charges were announced today by Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; Acting U.S. Attorney for the District of Connecticut Deirdre M. Daly; Special Agent in Charge Bruce Foucart of U.S. Immigration and Customs Enforcement (ICE) - Homeland Security Investigations (HSI) in Boston; Acting Special Agent in Charge of Defense Criminal Investigative Service (DCIS) Northeast Field Office Craig W. Rupert; and Special Agent in Charge of the Naval Criminal Investigative Service (NCIS) Northeast Field Office Cheryl A. DiPrizio.
The eight-count indictment charges Picone with conspiring to traffic in counterfeit goods, conspiring to traffic in counterfeit military goods, trafficking in counterfeit goods, conspiring to commit wire fraud, wire fraud and conspiring to commit money laundering. The indictment was returned by a federal grand jury in New Haven on June 25, 2013, and was unsealed today.
The indictment charges that from February 2007 through April 2012, Picone, through two companies he owned and operated, Tytronix Inc. and Epic International Electronics, purchased counterfeit semiconductors from sources in Hong Kong and China. According to the indictment, Picone made false representations about the semiconductors and sold them to customers throughout the United States, including companies believed by Picone to be defense contractors in Connecticut and Florida. Certain semiconductors sold by Picone were intended for use on nuclear submarines.
“By allegedly purchasing and reselling counterfeit semiconductors for military applications, Peter Picone put personal gain above the safety and well-being of dedicated U.S. servicemen and women,” said Acting Assistant Attorney General Raman. “As charged in the indictment, Picone went to great lengths to conceal the true origin of counterfeit semiconductors in order to sell the devices as seemingly legitimate and reliable components for use in nuclear submarines and other complex machinery. The charges unsealed today demonstrate our steadfast commitment to working with our law enforcement partners to prosecute counterfeiters and others who risk the security of the men and women of the U.S. military.”
“Counterfeit semiconductors pose a serious health and safety risk to consumers and end-users, and an even greater threat to the safety of the men and women of our armed services when they are sold for use in the military,” said Acting U.S. Attorney Daly. “We will prosecute these types of cases to the fullest extent of the law.”
“Today’s charges demonstrate the continued commitment of the Defense Criminal Investigative Service and our peer agencies to protect the Department of Defense’s supply chain from being infiltrated and compromised with inferior components,” said DCIS Northeast Field Office Acting Special Agent in Charge Rupert. “Safeguarding our warfighters and ensuring their equipment functions at the absolute highest levels is vital to our nation’s defense and readiness. Detecting and dismantling the operations of suppliers who choose to make a profit by supplying counterfeit or inferior products is a DCIS priority. I applaud the agents and prosecutors who worked tirelessly to bring about this result.”
“Trafficking in counterfeit sensitive technologies is an extremely dangerous practice on several fronts. Not only are there significant risks associated with the transportation of this faulty equipment, but our own American servicemembers are also put in harm’s way when they encounter substandard equipment,” said ICE-HSI Special Agent in Charge Foucart. “One of HSI's top enforcement priorities is protecting the integrity of U.S. military products and other sensitive technology.”
“Counterfeit semiconductors represent a serious threat to the safety of our military service members and raise national security concerns,” said NCIS Special Agent in Charge DiPrizio. “The introduction of defective equipment into the military supply chain can result in product failure, property damage and even serious bodily injury, including death. Some of these counterfeit devices can also be preprogrammed with malicious code and enable computer network intrusion. NCIS has worked closely with our law enforcement partners at DCIS and ICE-HSI in identifying unscrupulous suppliers and bringing them to justice.”
Picone was arraigned before U.S. Magistrate Judge Donna F. Martinez of the District of Connecticut in Hartford, Conn., and was released on bond. Trial is scheduled for Sept. 9, 2013, before U.S. District Judge Alvin W. Thompson in Hartford.
If convicted of conspiracy to traffic in counterfeit goods, Picone faces a maximum penalty of five years in prison. If convicted of conspiracy to traffic in counterfeit military goods, Picone faces a maximum term of 20 years in prison. If convicted of trafficking in counterfeit goods, Picone faces a maximum term of 10 years in prison. If convicted of conspiracy to commit wire fraud, or wire fraud, Picone faces a maximum penalty of 20 years in prison. If convicted of conspiracy to commit money laundering, Picone faces a maximum term of 20 years in prison.
The indictment also seeks forfeiture of proceeds from illicit trafficking in counterfeit goods and wire fraud as well as the seizure of the goods and any property involved in the money laundering conspiracy.
The charges and allegations contained in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
The case was jointly investigated by HSI, DCIS and NCIS. The case is being prosecuted by Assistant U.S. Attorney Edward Chang of the District of Connecticut and Trial Attorneys Kendra Ervin and Carol Sipperly of the Criminal Division’s Computer Crime and Intellectual Property Section. Trial Attorney Kristen M. Warden of the Criminal Division’s Asset Forfeiture and Money Laundering Section is assisting with the forfeiture aspects of the case.
The enforcement action announced today is one of many efforts being undertaken by the Department of Justice Task Force on Intellectual Property (IP Task Force). Attorney General Eric Holder created the IP Task Force to combat the growing number of domestic and international intellectual property crimes, protect the health and safety of American consumers, and safeguard the nation’s economic security against those who seek to profit illegally from American creativity, innovation, and hard work. The IP Task Force seeks to strengthen intellectual property rights protection through heightened criminal and civil enforcement, greater coordination among federal, state, and local law enforcement partners, and increased focus on international enforcement efforts, including reinforcing relationships with key foreign partners and U.S. industry leaders. To learn more about the IP Task Force, go to www.justice.gov/dag/iptaskforce/.
Justice Department Statement on the Trayvon Martin-George Zimmerman CaseRead the Press Release
"As the Department first acknowledged last year, we have an open investigation into the death of Trayvon Martin. The Department of Justice's Criminal Section of the Civil Rights Division, the United States Attorney's Office for the Middle District of Florida, and the Federal Bureau of Investigation continue to evaluate the evidence generated during the federal investigation, as well as the evidence and testimony from the state trial. Experienced federal prosecutors will determine whether the evidence reveals a prosecutable violation of any of the limited federal criminal civil rights statutes within our jurisdiction, and whether federal prosecution is appropriate in accordance with the Department's policy governing successive federal prosecution following a state trial.”
Statement of Attorney General Eric Holder on the Justice Department Report on Revised Media GuidelinesRead the Press Release
After conducting a rigorous review of internal Justice Department guidelines governing investigations and other law enforcement matters that involve journalists, Attorney General Eric Holder today released a report outlining several key reforms to the department’s protocols, as well as the following statement:
“The Department of Justice is firmly committed to ensuring our nation’s security, and protecting the American people, while at the same time safeguarding the freedom of the press. These revised guidelines will help ensure the proper balance is struck when pursuing investigations into unauthorized disclosures. While these reforms will make a meaningful difference, there are additional protections that only Congress can provide. For that reason, we continue to support the passage of media shield legislation. I look forward to working with leaders from both parties to achieve this goal, and am grateful to all of the journalists, free speech advocates, experts, and Administration leaders who have come together in recent weeks – in good faith, and with mutual respect – to guide and inform the changes we announce today.”During the review, Attorney General Holder personally held seven meetings with approximately 30 news media organizations as well as with First Amendment groups, media industry associations and academic experts.
A copy of the full Justice Department report is attached.
Related Materials:
Report on Review of News Media Policies
Philadelphia La Cosa Nostra Associate<br /> Sentenced to 96 Months in PrisonRead the Press Release
Gary Battaglini was sentenced today to serve 96 months in prison for his participation in a racketeering conspiracy involving loan sharking and illegal gambling, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Zane David Memeger of the Eastern District of Pennsylvania and Edward J. Hanko, Special Agent in Charge of the FBI’s Philadelphia Division.
Battaglini, 52, of Sewell, N.J., was sentenced by U.S. District Judge Eduardo C. Robreno in the Eastern District of Pennsylvania. In addition to his prison term, Battaglini was sentenced to serve three years of supervised release.
On Feb. 5, 2013, after a four-month trial, a jury convicted Battaglini of conspiring to conduct and participate in the affairs of the Philadelphia La Cosa Nostra (LCN) Family through a pattern of racketeering activity. The evidence at trial proved that, in furtherance of the racketeering conspiracy, Battaglini, as an LCN Family “associate,” engaged in loan sharking and illegal sports bookmaking activities on behalf of the mob. Battaglini exploited the violent reputation of the Philadelphia LCN Family in extending usurious loans and collecting payments on the loans, leaving the borrowers in fear of physical harm if they did not pay promptly.
The case is being prosecuted by Trial Attorney John S. Han of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorneys Frank A. Labor III and Suzanne B. Ercole of the Eastern District of Pennsylvania. Valuable prosecutorial assistance was provided by the Pennsylvania Office of the Attorney General.A total of 12 leaders, members and associates of the Philadelphia LCN Family have pleaded guilty or been convicted by a jury as part of this case. Six of the defendants, including Battaglini, have been sentenced, and six are awaiting sentencing.
The case is being investigated by the FBI, Internal Revenue Service-Criminal Investigation, Pennsylvania State Police, New Jersey State Police, Philadelphia Police Department, U.S. Department of Labor’s Office of Inspector General Office of Labor Racketeering and Fraud Investigations, and U.S. Department of Labor’s Employee Benefits Security Administration. Additional assistance was provided by the New Jersey Department of Corrections.
Court Approves Comprehensive Assignment Plan in Longstanding Tennessee Desegregation CaseRead the Press Release
Today, the U.S. District Court for the Western District of Tennessee approved a comprehensive consent order in McFerren v. County Board of Education of Fayette County, which the Department of Justice negotiated with the Board of Education of Fayette County, Tenn., and the NAACP Legal Defense & Educational Fund to desegregate the Fayette County public schools.
The consent order requires the district to take the following steps:
· Close four of its seven elementary schools, including a racially identifiable white school and two racially identifiable black schools.
· Construct a new elementary school to be opened by the start of the 2014-15 school year.
· Revise its attendance zone lines.
· Implement a controlled choice program between two of its schools.
· Explore and possibly create a magnet program at the elementary school with the highest projected African-American enrollment.
· Continue intra-district student transfers that further desegregation among its schools.
Today’s consent order replaces a previous consent order approved in 2012, as part of a collective effort by the parties to ensure even greater desegregation of the schools while achieving financial savings for the district. Before it can be declared unitary, the district must comply in good faith with its desegregation obligations for a minimum of three years, until the end of the 2016-17 school year, and eliminate the vestiges of segregation in its schools.
“The parties’ diligence and creativity resulted in meaningful progress towards desegregation of the schools,” said Jocelyn Samuels, Principal Assistant Attorney General for the Civil Rights Division. “Their efforts demonstrate that a district can desegregate its schools in a fiscally responsible manner that ensures educational opportunities for all students.”
The enforcement of Title IV of the Civil Rights Act of 1964 in school districts 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.
Contrack International Inc. Agrees to Pay<br /> $3.5 Million to Resolve False Claims Act AllegationsRead the Press Release
Contrack International Inc., a global design and construction company headquartered in McLean, Va., has agreed to pay $3.5 million to settle allegations that it submitted false claims in connection with U. S. Agency for International Development (USAID) contracts, the Justice Department announced today.
“Misrepresentations during contract negotiations undermine the integrity of the government procurement process,” said Stuart F. Delery, Acting Assistant Attorney General for the Civil Division. “The Justice Department will take action where contractors misrepresent their qualifications for government contracts and programs.”
The settlement concerns USAID-funded contracts for the construction of water and wastewater infrastructure projects in the Arab Republic of Egypt in the 1990s. The bidders for these contracts were required to receive prequalification and, in some cases, establish that they were U. S. companies. However, the contracts were ultimately performed by a joint venture partnership among Contrack; Washington Group International, Inc., a subsidiary of URS Corporation; and Misr Sons Development S.A.E. (Hassan Allam Sons), an Egyptian company. The government filed suit under the False Claims Act and the Foreign Assistance Act alleging that the joint venture partners evaded the prequalification requirement by concealing the identity of the joint venture partners, which prevented USAID from accurately evaluating their qualifications. As a result, the government alleged that Contrack and its partners received USAID-funded contracts for which they were ineligible.
“Proper public contracting, government efficiency and government accountability rely on complete information from contractors,” said Wendy J. Olson, U.S. Attorney for the District of Idaho. “Along with our partners at USAID and the Department of Justice’s Commercial Litigation Branch, we will aggressively seek to recover improperly awarded taxpayer dollars.”This settlement – which resolves only Contrack’s liability – was the result of a coordinated effort by the Department of Justice, Civil Division, Commercial Litigation Branch; the U.S. Attorney’s Office for the District of Idaho; and the USAID Office of Inspector General. The government is continuing to pursue its claims against the other two defendants in the suit.
The case is United States v. Washington Group International Inc. f/k/a/ Morrison Knudsen, Corporation; Contrack International, Inc.; and Misr Sons Development S.A.E. a/k/a Hassan Allam Sons, No. 04-555 (N.D. Idaho). The claims resolved by this settlement are allegations only, and there has been no determination of liability.
Philadelphia La Cosa Nostra Underboss Sentenced to<br /> 188 Months in PrisonRead the Press Release
Joseph Massimino was sentenced today to serve 188 months in prison for his participation in a racketeering conspiracy involving extortion, loan sharking and illegal gambling, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Zane David Memeger of the Eastern District of Pennsylvania and Edward J. Hanko, Special Agent in Charge of the FBI’s Philadelphia Division.
Massimino, 63, of Philadelphia, was sentenced by U.S. District Judge Eduardo C. Robreno in the Eastern District of Pennsylvania. In addition to his prison term, Massimino was sentenced to serve three years of supervised release.
On Feb. 5, 2013, after a four-month trial, a jury convicted Massimino of conspiring to conduct and participate in the affairs of the Philadelphia La Cosa Nostra Family through a pattern of racketeering activity. The evidence at trial proved that, in furtherance of the racketeering conspiracy, Massimino, as a “made” member and underboss, extorted “street tax” payments from a bookmaker, used threats of violence against debtors to collect loan sharking payments and forced the owners of a vending company to sell the portion of their business related to the operation of illegal video poker machines. In addition, Massimino ran an illegal electronic gambling device business for the mob, providing video poker machines and other gambling devices for bars, restaurants, convenience stores, coffee shops and other locations in Philadelphia and its suburbs. In one of these locations, Massimino also operated an illegal sports bookmaking business.
The case is being prosecuted by Trial Attorney John S. Han of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorneys Frank A. Labor III and Suzanne B. Ercole of the Eastern District of Pennsylvania. Valuable prosecutorial assistance was provided by the Pennsylvania Office of the Attorney General.
The case is being investigated by the FBI, Internal Revenue Service-Criminal Investigation, Pennsylvania State Police, New Jersey State Police, Philadelphia Police Department, U.S. Department of Labor’s Office of Inspector General Office of Labor Racketeering and Fraud Investigations, and the U.S. Department of Labor’s Employee Benefits Security Administration. Additional assistance was provided by the New Jersey Department of Corrections.Las Vegas Agent Convicted in Mortgage Fraud SchemeRead the Press Release
A Las Vegas mortgage agent has been convicted for his role in a “cash back at closing” mortgage fraud scheme that netted $1.43 million in fraudulent mortgage loans, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Daniel G. Bogden of the District of Nevada, and Acting Special Agent in Charge William C. Woerner of the FBI’s Las Vegas Field Office.
After a three-day trial before U.S. District Judge Larry Hicks in the District of Nevada, a federal jury convicted Jawad “Joe” Quassani, 42, on July 10, 2013, of one count of conspiracy to commit wire fraud and mail fraud, two counts of wire fraud, and two counts of mail fraud.
According to court documents and evidence presented at trial, Quassani participated in a scheme in which the prices of two homes were falsely inflated, mortgage loans were obtained through the submission of loan applications containing false and fraudulent information about the buyer’s income and intent to occupy the homes as primary residences, a portion of the loan proceeds was diverted at the close of escrow to the defendant’s co-conspirators, and commissions on the fraudulent loans were paid to Quassani and his co-conspirator. Evidence at trial established that Quassani, a licensed mortgage agent at Rapid Funding Group, conceived the scheme together with two of his co-conspirators, prepared one of the loan applications and arranged for the preparation of the other, and shared in the commissions generated by transactions that had no purpose other than to generate profits for the co-conspirators.
Co-conspirators Anita Mathur and Shirjil “Sean” Qureshi previously pleaded guilty in related cases in Las Vegas to one count of conspiracy to commit bank fraud, wire fraud and mail fraud. Both are awaiting sentencing.
This case was investigated by the FBI. Trial Attorneys Stephen J. Spiegelhalter and Gary A. Winters of the Criminal Division’s Fraud Section are prosecuting the case.
Today’s conviction is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF), which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ Offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants, including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.Justice Department Releases Educational Video About Discrimination in Employment Eligibility VerificationRead the Press Release
The Justice Department announced today the launch of a new educational video to assist employers in avoiding charges of discrimination in the employment eligibility verification form I-9 process and in the use of E-Verify. The video also helps educate employees about their legal rights. The Office of Special Counsel for Immigration-Related Unfair Employment Practices (OSC) within the department’s Civil Rights Division enforces the anti-discrimination provision of the Immigration and Nationality Act (INA), which prohibits employers from discriminating against work-authorized individuals in hiring, firing, recruitment or referral for a fee, regardless of their citizenship status or national origin. The law also prohibits discrimination during the form I-9 and E-Verify processes.
OSC developed its latest video to address issues that frequently arise from calls to its hotline and charges filed. Employers sometimes incorrectly believe that they need to request more documents than are necessary for the employment eligibility verification form I-9. Additionally, employers using E-Verify may improperly request specific documents due to misunderstanding of E-Verify requirements. OSC’s new video highlights some practices that are not permissible and may lead to claims under the anti-discrimination provision.
“We believe this video will help both employers and employees across the country understand employment eligibility verification rules,” said Gregory Friel, Deputy Assistant Attorney General for the Civil Rights Division. “Federal law prohibits discrimination in the employment eligibility verification process, and the Justice Department is committed to enforcing the law.”
The video may be viewed at http://youtu.be/VNHFDusJqRg
The latest OSC video is part of OSC’s educational video series that can be found here: http://go.usa.gov/2P6m . OSC also operates a hotline for employers and workers, frequently providing guidance to employers on how to avoid discrimination and educating employees on rights protected by the anti-discrimination provision. OSC offers live webinars for both employers and employees to educate employers on avoiding workplace discrimination and to educate employees about their rights. For more information about protections against employment discrimination under the immigration law, call OSC’s worker hotline at: 1-800-255-7688 (1-202-616-5525, TTY for the hearing impaired); call OSC’s employer hotline at: 1-800-255-8155 (1-202-616-5525, TTY for the hearing impaired); send an e-mail to: [email protected] ; or visit OSC’s website http://www.justice.gov/crt/about/osc .
Justice Department Files Lawsuit Against California Department of Corrections and Rehabilitationfor Sex DiscriminationRead the Press Release
The Department of Justice announced today the filing of a lawsuit, against the California Department of Corrections and Rehabilitation (CDCR), alleging that CDCR discriminated against Joe B. Cummings on the basis of his sex in violation of Title VII of the Civil Rights Act of 1964, as amended. Title VII is a federal statute that prohibits employment discrimination on the basis of sex, race, color, national origin and religion.
The lawsuit filed in the U.S. District Court for the Central District of California, alleges that Cummings’s former co-worker at CDCR sexually harassed him for more than a year until she was placed on administrative leave, for unrelated reasons, in October 2009. According to the complaint, Cummings, a male cook with CDCR, was subjected to frequent unwanted and unwelcomed sexual advances made towards him by a female co-worker, including frequent profane and suggestive comments and inappropriate touching of his person. The complaint alleges that the female co-worker’s misconduct escalated in August 2008, when she forced her hand down Cummings’s pants and struck him in the head.
The United States alleges that Cummings made numerous complaints to his supervisors about the sexual harassment and that CDCR failed to take timely steps to end the harassment or to discipline the harasser. The complaint alleges that the CDCR failed to follow its own anti-discrimination policy, which charges CDCR’s supervisors with preventing and correcting allegations of sexual harassment of which they become aware through either a report made to them or by personal observation. Through this lawsuit, the United States seeks declaratory and injunctive relief requiring the CDCR to develop and implement policies that would prevent CDCR employees from being subjected to sexual harassment. The United States also seeks monetary relief for Cummings to compensate him for the damages he sustained as a result of the alleged discrimination.
Cummings originally filed a charge of sex discrimination with the California Department of Fair Employment and Housing, which referred the charge to the U.S. Equal Employment Opportunity Commission (EEOC). The EEOC’s Los Angeles District Office investigated the matter, determined that there was reasonable cause to believe that discrimination had occurred, and referred the matter to the Department of Justice.
“Employees, regardless of their sex, have the right to work in an environment that is free from sexual harassment,” said Jocelyn Samuels, Principal Deputy Assistant Attorney General for the Civil Rights Division. "The Civil Rights Division will continue to vigorously enforce that right."
The enforcement of Title VII is a priority of the Justice Department’s Civil Rights Division. Additional information about the Civil Rights Division of the Department of Justice is available on its website at www.usdoj.gov/crt.
Shell Oil to Spend over $115 Million to Reduce Harmful Air Pollution at Houston Area Refinery and Chemical PlantRead the Press Release
The Department of Justice and the U.S. Environmental Protection Agency (EPA) announced today that Shell Oil and affiliated partnerships (Shell) have agreed to resolve alleged violations of the Clean Air Act at a large refinery and chemical plant in Deer Park, Texas, by spending at least $115 million to control harmful air pollution from industrial flares and other processes, and by paying a $2.6 million civil penalty. Shell has agreed to spend $1 million on a state-of-the-art system to monitor benzene levels at the fenceline of the refinery and chemical plant near a residential neighborhood and school and to make the data available to the public through a website.
Shell will spend $100 million on innovative technology to reduce harmful air pollution from industrial flares, which are devices used to burn waste gases. Shell is required to take the following actions to improve flaring operations: minimize flaring by recovering and recycling waste gases (which may then be reused by Shell as a fuel or product); comply with limitations on how much waste gas can be burned in a flare (flare caps); and install and operate instruments and monitoring systems to ensure that gases that are sent to flares are burned with 98% efficiency. Shell’s agreement to recover and recycle waste gases (flare gas recovery) at its chemical plant is a first of its kind.
Once fully implemented, the pollution controls required by the settlement will reduce harmful air emissions of sulfur dioxide, volatile organic compounds (VOCs) including benzene, and other hazardous air pollutants by an estimated 4,550 tons or more per year. These controls will also reduce emissions of greenhouse gases by approximately 260,000 tons per year.“This settlement will result in substantial reductions in toxic air pollution through state of the art technology and increased efficiencies at the Deer Park plant,” said Acting Assistant Attorney General Robert G. Dreher of the Justice Department’s Environment and Natural Resources Division. “This agreement will bring Shell Oil’s refinery and chemical plant in Deer Park into compliance with the nation’s Clean Air Act and result in cleaner, healthier air for residents in the local communities for many years to come.”
“The innovative emission controls required by today’s settlement will cut harmful air pollution in communities near Houston,” said Cynthia Giles, Assistant Administrator of EPA’s Office of Enforcement and Compliance Assurance. “This case is part of EPA’s nationwide enforcement effort to protect fenceline neighborhoods by significantly reducing toxic pollution from flares and making information about pollution quickly available to affected communities.”
The settlement was filed at the same time the Justice Department filed a complaint on behalf of EPA alleging, among other things, that the company improperly operated its 12 steam-assisted flaring devices in such a way that excess VOCs, including benzene and other hazardous air pollutants, were emitted.
In addition to reducing pollution from flares, Shell will significantly modify its wastewater treatment plant; replace and repair tanks as necessary; inspect tanks biweekly with an infrared camera to better identify potential integrity problems that may lead to leaks; and implement enhanced monitoring and repair practices at the benzene production unit. When fully implemented, these specific projects are estimated to cost between $15 and $60 million.
Also, in a second project to benefit the community, Shell has agreed to spend $200,000 on retrofit technology to reduce diesel emissions from government-owned vehicles which operate in the vicinity of the Deer Park complex.
These actions will cut emissions of pollutants that can cause significant harm to public health. Exposure to high concentrations of sulfur dioxide can affect breathing and aggravate existing respiratory and cardiovascular disease. VOCs are a key component in the formation of smog or ground-level ozone, a pollutant that irritates the lungs, exacerbates diseases such as asthma, and can increase susceptibility to respiratory illnesses, such as pneumonia and bronchitis. Chronic exposure to benzene, which EPA classifies as a carcinogen, can cause numerous health impacts, including leukemia and adverse reproductive effects in women.
Today’s settlement is part of EPA’s national effort to reduce emissions toxic air pollutants, with a particular focus on industrial flares. These requirements focus on reducing the amount of waste gas sent to flares and on improving flare operations, both of which work to reduce toxic emissions. Improper operation of an industrial flare can send hundreds of tons of hazardous air pollutants into the air. The more waste gas a company sends to a flare, the more pollution occurs. The less efficient a flare is in burning waste gas, the more pollution occurs. EPA wants companies to flare less, and when they do flare, to fully burn the harmful chemicals found in the waste gas.
Shell, which is headquartered in Houston, processes approximately 330,000 barrels per day of crude oil at its Deer Park facility, making it the 11th largest refinery in the United States. In addition, the Deer Park chemical plant produces approximately 8,000 tons per day of products that include ethylene, benzene, toluene, xylene, phenol, and acetone. Both the chemical plant and the refinery operate 24 hours a day, 365 days a year.The consent decree, lodged in federal court in the Southern District of Texas, is subject to a 30-day public comment period and court approval. The consent decree will be available for viewing at www.justice.gov/enrd/Consent_Decrees.html.
More information about the settlement:
www.epa.gov/enforcement/air/cases/sdp.htmlMore information about EPA’s Air Toxics National Enforcement Initiative:
www.epa.gov/compliance/data/planning/initiatives/2011airtoxics.htmlPrior enforcement settlements related to industrial flaring:
BP North America:
www.epa.gov/compliance/resources/cases/civil/caa/bp-whiting.htmlMarathon Petroleum Company:
yosemite.epa.gov/opa/admpress.nsf/2467feca60368729852573590040443d/e841a5bbc6dd1082852579d7005b6347!OpenDocument&Highlight=2,MarathonCountryMark Refining and Logistics:
yosemite.epa.gov/opa/admpress.nsf/2467feca60368729852573590040443d/b511e565ba2af7f985257b20005cb737!OpenDocument&Highlight=2,CountryMarkEnforcement Alert: EPA Enforcement Targets Flaring Efficiency Violations (August 2012): www.epa.gov/enforcement/air/documents/newsletters/flaringviolations.pdf
Justice Department Settles Lawsuit Against Erie County, N.Y., over Disability DiscriminationRead the Press Release
The Justice Department today announced it filed a lawsuit in the U.S. District Court for the Western District of New York against Erie County, N.Y., alleging that the county discriminated against an employee with a disability. The department simultaneously filed a consent decree to resolve the claims. In its lawsuit, the department alleges that the county violated the Americans with Disabilities Act (ADA) by refusing to promote a maintenance worker with monocular vision because he did not have a commercial driver’s license. The Justice Department found that the employee was qualified for the promotion and that he could perform all the important job duties associated with the promotion. The department also found that there were other employees who did not have a commercial driver’s license who had been promoted to the position.
“The result of the county’s action was to deny a promotion to someone who should have received it,” said Eve L. Hill, Senior Counselor to the Assistant Attorney General for the Civil Rights Division. “The Justice Department is committed to removing these types of discriminatory barriers, and to ensuring equal employment opportunities for people with disabilities.”
The consent decree, which must be approved by the court, requires the county to pay the employee $22,486 in back pay and interest, offer him a promotion with remedial seniority, provide training on the ADA and file periodic reports with the Justice Department.
Title I of the ADA prohibits employers, such as Erie County, from discriminating against people on the basis of disability in various aspects of employment. These prohibitions include using qualification standards that screen out individuals with disabilities and that are not job-related and consistent with business necessity. The ADA also requires employers to provide reasonable accommodations to otherwise qualified individuals with disabilities, where such an accommodation does not pose an undue hardship.
Those interested in finding out more about the ADA may call the Justice Department’s toll-free ADA information line at 800-514-0301 (TDD 800-514-0383) or visit www.ada.gov.
Justice Department Issues Statement on U.S. District Court<br /> Ruling That Apple Violated Antitrust LawsRead the Press Release
Assistant Attorney General Bill Baer in charge of the Department of Justice’s Antitrust Division made the following statement today after the U.S. District Court for the Southern District of New York found that Apple Inc. violated Section 1 of the Sherman Act by conspiring to raise e-book prices and end e-book retailers’ freedom to compete on price:“This result is a victory for millions of consumers who choose to read books electronically. After carefully weighing the evidence, the court agreed with the Justice Department and 33 state attorneys general that executives at the highest levels of Apple orchestrated a conspiracy with five major publishers – Hachette, HarperCollins, Macmillan, Penguin and Simon & Schuster – to raise e-book prices. Through today’s court decision and previous settlements with five major publishers, consumers are again benefitting from retail price competition and paying less for their e-books.
“As the department’s litigation team established at trial, Apple executives hoped to ensure that its e-book business would be free from retail price competition, causing consumers throughout the country to pay higher prices for many e-books. The evidence showed that the prices of the conspiring publishers’ e-books increased by an average of 18 percent as a result of the collusive effort led by Apple.
“Companies cannot ignore the antitrust laws when they believe it is in their economic self-interest to do so. This decision by the court is a critical step in undoing the harm caused by Apple’s illegal actions.
“I am proud of the outstanding work done by the trial team. The Antitrust Division will continue to vigorously protect competition and enforce the antitrust laws in this important business, and in other industries that affect the everyday lives of consumers.”Background
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 Book Group (USA), HarperCollins Publishers L.L.C., Holtzbrinck Publishers LLC, which does business as Macmillan, Penguin Group (USA) Inc. and Simon & Schuster Inc., 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 in May 2013. Final approval of the Macmillan settlement is pending before the court. 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 has not yet scheduled a hearing to address the parties’ proposed remedies.Former U.S. Army Reserve Captain Pleads Guilty<br /> in Nevada to Bribery SchemeRead the Press Release
A former U.S. Army Reserve captain pleaded guilty today to accepting more than $90,000 in bribes from contractors while he was deployed to Iraq, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and U.S. Attorney Daniel G. Bogden of the District of Nevada.
Edward William Knotts III, 51, of Gibbon, Neb., pleaded guilty before U.S. District Judge James Mahan in the District of Nevada to a criminal information charging him with one count of bribery. He faces a maximum penalty of 15 years in prison when he is sentenced on Oct. 8, 2013.
According to court documents, from December 2005 until December 2007, Knotts was stationed at Camp Buehring, Kuwait, as a contracting officer’s representative for contracts between the U.S. Army and local contractors to provide services to support the operations at Camp Buehring and another U.S. camp in Kuwait.
In November 2006, Knotts entered into an agreement with a Kuwait-based corporation to receive a monthly fee from the corporation in return for providing confidential bidding information about U.S. Army contracts. Between November 2006 and November 2007, the corporation paid him approximately $31,500 in cash. In June 2007, a representative of the corporation paid Knotts $40,000 at a hotel room in Las Vegas in return for his promise to provide confidential bid information and in anticipation of the corporation hiring him. Knotts received another similar cash payment of $20,000 in August 2008 in a different Las Vegas hotel.
This case was investigated by the Special Inspector General for Iraq Reconstruction, Defense Criminal Investigative Service and U.S. Army Criminal Investigation Command. The case is being prosecuted by Director of Procurement Fraud Litigation Catherine Votaw and Trial Attorney Brian Young of the Criminal Division’s Fraud Section.
Former Preschool Director Pleads Guilty to Tax EvasionRead the Press Release
The Justice Department and the Internal Revenue Service (IRS) announced that Susan C. Valentine, a resident of Fairfax County, Va., pleaded guilty today to tax evasion.
According to documents filed with the court, Valentine was the former director at the Epiphany Weekday School (EWS) in Alexandria, Va. From 2008 through 2010, Valentine received a salary and also took additional funds from EWS for herself and members of her family. Despite earning this income, Valentine did not file income tax returns or pay income taxes for 2008 through 2010. Moreover, as director, Valentine caused false payroll tax forms to be filed on behalf of ESW with the IRS.
Sentencing was scheduled by U.S. District Court Judge James Cacheris for Oct. 18, 2013. Valentine faces a maximum sentence of five years in prison, three years of supervised release, a $250,000 fine and a $100 special assessment. She has agreed to pay restitution to the IRS.
Kathryn Keneally, Assistant Attorney General for the Justice Department’s Tax Division, commended the efforts of special agents of IRS–Criminal Investigation, who investigated the case, and Tax Division Trial Attorneys Melissa Siskind and Karen E. Kelly, who are prosecuting the case.
Justice Department Releases Investigative Findings on the City of Miami Police Department and Officer-involved ShootingsRead the Press Release
Following a comprehensive investigation, the Justice Department today released its letter of findings determining that the city of Miami Police Department (MPD) has engaged in a pattern or practice of excessive use of force through officer-involved shootings in violation of the Fourth Amendment of the Constitution. Between 2008 and 2011, officers intentionally shot at individuals on 33 separate occasions, three of which MPD itself found unjustified. The department found that a number of MPD practices, including deficient tactics, improper actions by specialized units, as well as egregious delays and substantive deficiencies in deadly force investigations, contributed to the pattern or practice of excessive force.
The department's findings noted that MPD did not provide close supervision or hold individuals accountable for their actions by failing to complete thorough, objective and timely investigations of officer-involved shootings. For a significant number of the shootings, including one that occurred in 2008, MPD has not reached a conclusion internally as to whether or not the officer’s firearm discharge was lawful and within policy. The Justice Department found that MPD’s failure to complete timely and thorough investigations of officer-involved shootings undermined accountability and exposed MPD officers and the community to unreasonable risks that might have been addressed through prompt corrective action, noting that several investigations remained open for more than three years. Significantly, a small number of officers were involved in a disproportionate number of shootings, while the investigations into their shootings continued to be egregiously delayed. The findings released today mark the conclusion of the department’s second investigation of MPD in recent years. The department noted that similar deficiencies were found in its previous investigation that began in 2002.
“Although MPD appeared to correct course after our first investigation, many of the systemic problems that we previously identified returned to root deeply in MPD’s practices. Our findings should serve as a catalyst to help MPD and the city of Miami restore the community’s confidence in fair, effective and accountable law enforcement,” said Roy L. Austin Jr, Deputy Assistant Attorney General for the Civil Rights Division. “We look forward to collaborating with Chief Orosa, Mayor Regalado and the people of Miami to create and implement a comprehensive, court-enforceable plan to ensure sustainable reform.”
Wifredo Ferrer, U.S. Attorney for the Southern District of Florida stated, “In November 2011, the Civil Rights Division of the Department of Justicebegan a formal investigation to determine whether the city of Miami Police Department had engaged in a pattern or practice of excessive use of deadly force by firearms. After a careful and thorough review of the facts and circumstances surrounding a series of police-involved shootings, the Civil Rights Division found that the police department in fact engaged in such prohibited conduct. Today, we are releasing the detailed findings of the investigation, with the dual goal of shining a light on past wrongs and – more importantly – setting a clear course for the future that will assure the residents of the city of Miami that this type of behavior will not be repeated in our city. We commend Chief Orosa for recognizing some of the problems the Civil Rights Division found and for pursuing initiatives to address them. We are confident that the findings and recommendations will be heeded, and will result in institutional long-term reform that will make our city and police force better than ever.”
The department’s investigation involved an in-depth review of thousands of documents, including written policies and procedures, training materials, and internal reports, photographs, video and audio recordings and investigative files. The review benefited from productive dialogue with MPD supervisors and officers, city of Miami officials, the Office of the State Attorney, the Civilian Investigative Panel, and members of the Miami community. The Justice Department provided feedback to MPD during the investigation and commends Chief Manuel Orosa for taking steps to address some of the deficiencies identified since the investigation began.
The investigation was conducted by the Special Litigation Section of the Department of Justice’s Civil Rights Division and the U.S. Attorney’s Office for the Southern District of Florida, with the assistance of an experienced law enforcement expert, pursuant to the pattern or practice provision of the Violent Crime Control and Law Enforcement Act of 1994. The findings letter will be available on the department’s website at http://www.justice.gov/crt/about/spl/ . The department welcomes comments or concerns from the community via email at [email protected] .
Iraqi Company Business Manager Pleads Guilty in Texas <br /> to Illegal Gratuities SchemeRead the Press Release
A business manager for an Iraqi company pleaded guilty today to giving thousands of dollars in illegal gratuities to a U.S. pay agent from contractors while the business manager was in Iraq, 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.
Mario G. Khalil, 50, of Houston, pleaded guilty before U.S. District Judge David Hittner in the Southern District of Texas to a criminal information charging him with one count of giving a gratuity to a public official. At sentencing, scheduled for Oct. 3, 2013, he faces a maximum sentence of two years in prison.
According to court documents, from 2007 through 2009, Khalil worked at Camp Liberty in Iraq as a business manager for an Iraqi contracting company, holding various contracts with the U. S. Army, Air Force and Department of Defense to provide logistical services and supplies.
Khalil told Richard Gilliland – a U.S. Army staff sergeant serving as a pay agent for civil investment projects in Iraq from October 2007 through November 2008 – that Khalil’s company was interested in obtaining contracts and acquiring used and non-working generators from the Defense Reutilization and Marketing Office (DRMO) and was seeking Gilliland’s assistance as an Army official. Khalil gave and offered Gilliland approximately $10,000 in cash and a laptop computer in return for his influence in obtaining generators and future contracts.
Gilliland pleaded guilty in February 2013 to an information stemming from the same scheme and is awaiting an August 2013 sentencing.
The case was investigated by the Special Inspector General for Iraq Reconstruction. The case is being prosecuted by Director of Procurement Fraud Litigation Catherine Votaw and Trial Attorney Mark Grider of the Criminal Division’s Fraud Section and Assistant U.S. Attorney James Buchanan of the Southern District of Texas.
El Departamento de Justicia Revela los Descubrimientos de Su Investigación sobre el Departamento de Policía de Miami y los Incidentes de Disparos que Involucran a la PolicíaRead the Press Release
WASHINGTON - Después de una exhaustiva investigación, el Departamento de Justicia (el departamento) reveló hoy la carta sobre los hallazgos que determinan que el Departamento de Policía de la ciudad de Miami (Miami Police Department, MPD) ha seguido un patrón o práctica de uso excesivo de la fuerza mediante disparos que involucran a la policía, violando así la Cuarta Enmienda de la Constitución. Entre 2008 y 2011, los agentes dispararon intencionalmente a individuos en 33 ocasiones distintas, tres de las cuales fueron consideradas injustificadas por el mismo MPD. El departamento encontró una serie de prácticas del MPD que contribuyeron al patrón o práctica de fuerza excesiva, tales como tácticas deficientes, acciones inadecuadas por parte de unidades especializadas y retrasos indignantes y deficiencias importantes en las investigaciones de fuerza letal.
Los descubrimientos del departamento demostraron que el MPD no supo brindar supervisión o responsabilizar a los individuos por sus acciones ya que no completaron en su totalidad y en tiempo y forma las investigaciones de disparos que involucran agentes. Para una gran cantidad de disparos, incluyendo el ocurrido en 2008, el MPD no ha llegado a una conclusión interna respecto de si el disparo del oficial fue legal y acorde a las políticas. El Departamento de Justicia determinó que la ineficiencia del MPD para completar en tiempo y forma las investigaciones de disparos que involucran agentes socavó la rendición de cuentas y expuso a los agentes del MPD y a la comunidad a riesgos irracionales que podrían haberse evitado mediante la acción correctiva inmediata. Se demostró también que varias investigaciones permanecieron abiertas por más de tres años. Considerablemente, un pequeño grupo de agentes estuvieron involucrados en una cantidad desproporcionada de disparos, mientras que las investigaciones sobre sus disparos permanecen retrasadas de manera indignante. Los descubrimientos revelados hoy exponen la conclusión de la segunda investigación del departamento sobre el MPD en los últimos años. El Departamento notó que se encontraron deficiencias similares en investigaciones previas que comenzaron en 2002.
“Aunque parecía que el MPD había corregido su curso luego de nuestra primera investigación, muchos de los problemas sistémicos que identificamos previamente se han vuelto a enraizar profundamente en las prácticas del MPD. Nuestros descubrimientos deben ser un catalizador para ayudar al MPD y a la ciudad de Miami a restaurar la confianza de la comunidad en un orden público justo, efectivo y lógico,” dijo Roy L. Austin Jr., Asistente Suplente del Fiscal General de la División de Derechos Civiles. “Esperamos poder colaborar con el Prefecto Orosa, el Alcalde Regalado y la gente de Miami para diseñar e implementar un plan exhaustivo, supervisado por la corte, que asegure una reforma sostenible.”
El Fiscal de los Estados Unidos Wifredo Ferrer declaró: “En noviembre de 2011, la División de Derechos Civiles del Departamento de Justicia comenzó una investigación formal para determinar si el Departamento de Policía de la ciudad de Miami había seguido un patrón o práctica de uso excesivo de la fuerza letal por arma de fuego. Después de un análisis cuidadoso y profundo de los hechos y circunstancias que rodearon a la serie de disparos que involucran a la policía, la División de Derechos Civiles determinó que el Departamento de Policía sí mantuvo tal conducta prohibida. Hoy revelamos los descubrimientos detallados de la investigación, con la meta doble de arrojar luz sobre errores pasados y, aun es más importante, de marcar un curso claro para el futuro que garantice a los residentes de la ciudad de Miami que este tipo de conducta no se repetirá en nuestra ciudad. Agradecemos al Prefecto Orosa por reconocer algunos de los problemas que encontró la División de Derechos Civiles y por implementar iniciativas para solucionarlos. Confiamos en que los descubrimientos y recomendaciones serán oídos y conllevarán a una reforma institucional a largo plazo que mejorará más que nunca nuestra ciudad y policía.”
La investigación del departamento implicó un análisis profundo de miles de documentos, entre los que se incluyeron procedimientos y políticas escritas, material de entrenamiento, informes internos, fotografías, videos y audios grabados y expedientes de investigación. El análisis se nutrió del diálogo productivo con los agentes y supervisores del MPD, agentes de la ciudad de Miami, el Fiscal del Estado, el Panel de Investigación Civil y miembros de la comunidad de Miami. El Departamento de Justicia brindó devoluciones al MPD durante la investigación y agradece al Prefecto Manuel Orosa por dar pasos hacia la solución de algunas de las deficiencias identificadas desde que la investigación comenzó.
La investigación fue llevada a cabo por la Sección de Litigación Especial de la División de Derechos Civiles del Departamento de Justicia y la Fiscalía de los Estados Unidos para el Distrito Sur de Florida, con la ayuda de un experto en aplicación de la ley, conforme a la disposición en relación al patrón o práctica del Acta de 1994 sobre Control de Crímenes Violentos y Aplicación de la Ley. La carta sobre los descubrimientos estará disponible en la página Web del Departamento en: http://www.justice.gov/crt/about/spl/. El Departamento recibe comentarios o dudas de la comunidad en el siguiente correo electrónico: [email protected].
US Joins False Claims Act Lawsuit Alleging<br /> Illegal Physician Compensation by Mobile, Ala., Health FirmRead the Press Release
The government has intervened in a False Claims Act lawsuit against Infirmary Health System Inc. and its related entities: IMC-Diagnostic and Medical Clinic P.C., Diagnostic Physicians Group P.C. and Infirmary Medical Clinics P.C., the Department of Justice announced today. The lawsuit alleges that IMC-Diagnostic and Medical Clinic, in Mobile, Ala., billed Medicare for services referred by Diagnostic Physicians Group physicians, in violation of the Stark Law and Anti-Kickback Statute. IMC-Diagnostic and Medical Clinic is owned by Infirmary Medical Clinics, a subsidiary of Infirmary Health System, also based in Mobile.
“Financial arrangements that compensate physicians for referrals encourage physicians to make decisions based on financial gain rather than patient needs,” said Stuart F. Delery, Acting Assistant Attorney General for the Civil Division. “The Department of Justice is committed to preventing illegal financial relationships that corrupt the integrity of our public health programs.”Enforcement of the Stark Law and the Anti-Kickback Statute is intended to ensure that physicians’ medical judgment is not compromised by improper financial incentives. The Stark Law forbids a clinic or hospital from billing Medicare for certain services referred by physicians who have a financial relationship with the entity. The Anti-Kickback Statute prohibits offering, paying, soliciting or receiving remuneration to induce referrals of services or items covered by federal health care programs, including Medicare. The lawsuit alleges that the IMC-Diagnostic and Medical Clinic improperly paid Diagnostic Physicians Group physicians compensation that included a percentage of the money collected from Medicare for tests and procedures the doctors referred to the clinic. These improper payments, and resulting submission of false claims to the Medicare program, violated the Stark Law and Anti-Kickback Statute.
“The Stark Law and Anti-Kickback Statute were enacted to prevent financial ties from influencing the level of care provided to patients,” said Kenyen Brown, U.S. Attorney for the Southern District of Alabama. “By bringing cases such as this one against Infirmary Health System, we hope to ensure that precious health care resources are not wasted due to improper financial relationships among health care providers.”
The lawsuit was filed in July 2011 by former Diagnostic Physicians Group physician, Dr. Christian Heesch, under the qui tam, or whistleblower, provisions of the False Claims Act, which authorize private parties to sue on behalf of the U.S. and receive a portion of any recovery. The act also permits the government to intervene and take over a lawsuit, as it has done in this case.The government’s intervention in this lawsuit illustrates its 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 $14.7 billion through False Claims Act cases, with more than $10.7 billion of that amount recovered in cases involving fraud against federal health care programs.
The government’s investigation has been a coordinated effort by the Department of Justice, Civil Division, Commercial Litigation Branch; the U.S. Attorney’s Office for the Southern District of Alabama; the Department of Health and Human Services Office of Inspector General; and the FBI. The government has 30 days to file and serve a superseding complaint in this matter.
The case is captioned U.S. ex rel. Heesch v. Diagnostic Physicians Group, P.C. et al., Civil Action No. 11-0364-KD-B (S.D. Ala.). The claims in the complaint are allegations only; there has been no determination of liability.Supervisor of $63 Million Health Care Fraud Scheme <br /> Sentenced in Florida to 10 Years in PrisonRead the Press Release
A former supervisor at defunct health provider Health Care Solutions Network Inc. (HCSN) was sentenced today in Miami to serve 10 years in prison for her central role in a fraud scheme that resulted in more than $63 million in fraudulent claims to Medicare and Florida Medicaid.
The sentence was announced by 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; Michael B. Steinbach, Special Agent in Charge 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.
Wondera Eason, 51, of Miami, was sentenced by U.S. District Judge Cecilia M. Altonaga in the Southern District of Florida. In addition to her prison term, Eason was sentenced to serve three years of supervised release and ordered to pay $14,985,876 in restitution.
On April 25, 2013, a federal jury found Eason guilty of conspiracy to commit health care fraud.
Eason was employed as the director of medical records at HCSN’s partial hospitalization program (PHP). A PHP is a form of intensive treatment for severe mental illness. In Florida, HCSN operated community mental health centers at two locations. After stealing millions from Medicare and Medicaid in Florida, HCSN’s owner, Armando Gonzalez, expanded the scheme to North Carolina, opening a third HCSN location in Hendersonville, N.C.
Evidence at trial showed that at all three locations, Eason, a certified medical records technician, oversaw the alteration, fabrication and forgery of thousands of documents that purported to support the fraudulent claims HCSN submitted to Medicare and Medicaid. Many of these medical records were created weeks or months after the patients were admitted to HCSN facilities in Florida for purported PHP treatment and were utilized to support false and fraudulent billing to government-sponsored health care benefit programs, including Medicare and Medicaid. Eason directed therapists to fabricate documents, and she also forged the signatures of therapists and others on documents that she was in charge of maintaining. Eason interacted with Medicare and Medicaid auditors, providing them with false and fraudulent documents, while certifying the documents were accurate.
The “therapy” at HCSN oftentimes consisted of nothing more than patients watching Disney movies, playing bingo and having barbeques. Eason directed therapists to remove any references to these recreational activities in the medical records.
According to evidence at trial, Eason was aware that HCSN in Florida 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. Eason also knew that many of the ALF referral patients were ineligible for PHP services because many patients suffered from mental retardation, dementia and Alzheimer's disease.
From 2004 through 2011, HCSN billed Medicare and the Medicaid program more than $63 million for purported mental health services.
Fifteen defendants have been charged and have pleaded guilty or been convicted by a jury for their roles in the HCSN health care fraud scheme.
This case is being investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida. This case was prosecuted by Trial Attorney Allan J. Medina, former Special Trial Attorney William Parente and Deputy Chief Benjamin D. Singer of the Criminal Division’s Fraud Section.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,500 defendants who have collectively billed the Medicare program for more than $5 billion. In addition, HHS’s Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.
Naples Residents Plead Guilty to Tax Fraud for <br /> Failing to Pay Employment TaxesRead the Press Release
The Justice Department and the Internal Revenue Service (IRS) announced that Anthony Chaudhuri and Margaret Chaudhuri, of Naples, Fla., pleaded guilty today to one count each of conspiracy to defraud the United States.
According to court documents, the Chaudhuris owned and operated a hospital inventory control software company under the name Ariel Computing and various other nominee names, including ADI. Ariel Computing was operated from various addresses in Ann Arbor, Mich. Court documents indicate that between 1996 and 2008, the Chaudhuris withheld approximately $888,353 in employment taxes from Ariel Computing employees, but failed to pay over to the IRS approximately $704,488 of these withheld taxes, instead diverting those funds for their own personal use.
At sentencing, the Chaudhuris face a maximum of five years in prison and a $250,000 fine for the conspiracy charge. A sentencing date has not yet been set.
Kathryn Keneally, Assistant Attorney General for the Justice Department’s Tax Division, commended the efforts of special agents IRS–Criminal Investigation, who investigated the case, and Tax Division Trial Attorneys Tiwana Wright and Mark McDonald, who are prosecuting the case.
Justice Department Statement on Meeting with European UnionRead the Press Release
"This morning the Department of Justice hosted the initial meeting in the U.S.-E.U./E.U. Member State dialogue on intelligence practices, as first suggested by Attorney General Holder during a ministerial gathering with E.U. officials in Dublin last month.
“Officials from the Justice Department, Office of the Director of National Intelligence and the State Department represented the United States government. Officials from the E.U. included representatives of the Lithuanian Presidency of the EU, the European Council, the European Commission, the External Action Service of the EU, and EU Member States.
“This meeting focused on next steps for discussion of these issues, including the possibility of a follow-on meeting in the coming weeks. This open and constructive dialogue illustrates the extent and depth of the relationship between the U.S. and our European partners as we strive to protect both the safety and individual liberties of citizens on both sides of the Atlantic.“We look forward to this continued dialogue and cooperation with the EU and EU Member States.”
Justice Department Seeks to Shut Down Indiana Tax PreparerRead the Press Release
The Justice Department announced today that it has asked a federal court in Indianapolis, to bar Cynthia Hawk, who operates Gain Tax Services, from preparing tax returns. The civil injunction suit alleges that Hawk fails to comply with due diligence requirements imposed by federal law on tax preparers who claim the earned income tax credit (EITC) on customers’ income tax returns. According to the complaint, Hawk also falsified customers’ incomes in order to claim the maximum EITC for them.
The EITC is a refundable federal income tax credit available to certain low to moderate income working individuals and families. As a refundable credit, the EITC may entitle a taxpayer to a refund from the U.S. Treasury. The amount of the EITC depends on the taxpayer’s income, filing status and claimed number of dependents. The maximum credit in 2010 was $5,666. The range of earned income generating a maximum EITC is sometimes called the “sweet spot.” According to the complaint, Hawk fabricated businesses and reported fake business income on her customers’ tax returns to reach the EITC sweet spot.
The complaint alleges that the Internal Revenue Service (IRS) determined that Hawk failed to comply with due-diligence requirements when claiming the EITC for her customers. The IRS penalized Hawk in 2011 for her failures. When the IRS performed a follow-up investigation in 2012, as it routinely does, the complaint alleges that it again found ongoing failures and fraudulent claims by Hawk. According to the complaint, Hawk, who previously prepared tax returns in Atlanta, prepared at least 1,501 returns from 2009 through 2012, with unusually high refund rates ranging from 96 to 99 percent these years.
The complaint also alleges that Hawk claimed education credits on her customers’ tax returns, when the customers did not actually have any qualifying education expenses.
In the past decade the Justice Department’s Tax Division has obtained injunctions against hundreds of tax-return preparers and tax-fraud promoters. Information about these cases is available on the Justice Department’s Tax Division website www.justice.gov/tax.Related Materials:
United States v. Cynthia E. Hawk, etc.
Complaint for Permanent Injunction and Other Equitable Relief (PDF)