District Not Recorded

Two DENSO Corp. executives – Yuji Suzuki and Hiroshi Watanabe – have agreed to plead guilty for their roles in international conspiracies to fix prices and rig bids of certain automotive components installed in U.S. cars, the Department of Justice announced today.  The executives, both Japanese nationals, have also agreed to serve time in a U.S. prison.

Yuji Suzuki, a senior manager in DENSO’s Toyota Sales Division, has agreed to serve 16 months in a U.S. prison, to pay a $20,000 criminal fine and to cooperate with the department’s ongoing investigation. Hiroshi Watanabe, a group leader in DENSO’s Toyota Sales Division at the time of the offense, has agreed to serve 15 months in a U.S. prison, to pay a $20,000 criminal fine and to cooperate with the department’s ongoing investigation. 

“The conspirators reached agreements to fix prices and allocate bids, and took measures such as using code names and meeting in secret to cover their tracks,” said Scott D. Hammond, Deputy Assistant Attorney General for the Antitrust Division’s criminal enforcement program.  “Cracking down on international price-fixing cartels that target U.S. businesses and consumers has been, and will continue to be, among the top priorities for the Antitrust Division.”

According to the two-count felony charge filed today in U.S. District Court for the Eastern District of Michigan in Detroit, Suzuki, along with co-conspirators, engaged in a conspiracy to rig bids for, and to fix, stabilize and maintain the prices of, electronic control units and heater control panels sold to Toyota Motor Corporation and Toyota Motor Engineering and Manufacturing North America Inc. in the United States and elsewhere.  According to the charges, Suzuki participated in the electronic control units conspiracy from at least as early as August 2005 until at least December 2008 and participated in the heater control panels conspiracy from at least as early as July 2005 until at least December 2008.

According to a one-count felony charge filed today in the U.S. District Court for the Eastern District of Michigan in Detroit, Watanabe participated in a conspiracy to rig bids for, and to fix, stabilize and maintain the prices of, heater control panels sold to Toyota from at least as early as June 2008 and continuing until at least February 2010 in the United States and elsewhere. 

In March 2012, DENSO  pleaded guilty and was sentenced to pay a $78 million criminal fine for its role in the conspiracies related to electronic control units and heater control panels.

Electronic control units are electrical components, similar to tiny computers, which are embedded throughout cars and control various electrical systems or subsystems in an automobile.  For example, a body electronic control unit controls the power windows, power locks and other electronic components on the door.  Heater control panels are located in the center console of a car and control the temperature inside the car.

“Those individuals who engage in price fixing and bid rigging negatively impact the automotive industry by causing vehicle buyers and makers to pay higher prices.  The FBI is committed to pursuing and prosecuting these criminals,” said Robert D. Foley III, Special Agent in Charge, FBI Detroit Division.

According to the charges against Suzuki and Watanabe, they carried out the conspiracies by participating, or directing the participation of subordinate employees, in meetings and conversations to coordinate and fix prices of automotive parts installed in U.S. cars and elsewhere.

To date, nine companies and 14 executives have pleaded guilty or agreed to plead guilty in the department’s ongoing investigation into price fixing and bid rigging in the automotive parts industry.  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 pleaded guilty and were sentenced to pay a total of more than $809 million in criminal fines.  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.

Suzuki and Watanabe are charged with price fixing in violation of the Sherman Act, which carries a maximum penalty of 10 years in prison and a $1 million criminal fine for individuals.  The maximum fine 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.

Related Materials:

Watanabe Information
Suzuki Information

Arturo Rojas-Coyotl, Odilon Martinez-Rojas, and Severiano Martinez-Rojas, all of Tenancingo in the state of Tlaxcala, Mexico have been indicted on charges of sex trafficking and alien harboring, announced the Justice Department’s Civil Rights Division and the U.S. Attorney’s Office for the Northern District of Georgia. A fourth man, Daniel Garcia-Tepal, also of Tlaxcala, Mexico, is charged with encouraging and inducing aliens to enter and reside in the United States unlawfully. 

 According to U.S. Attorney Yates, the charges and other information presented in court: Rojas-Coyotl and his uncles Odilon Martinez-Rojas and Severiano Martinez-Rojas used force, fraud and coercion to compel three women to engage in prostitution in Atlanta and Norcross, Ga. at various times between 2006 and 2008. Daniel Garcia-Tepal and Arturo Rojas-Coyotl are also charged with encouraging and inducing a fourth woman to unlawfully enter and remain in the United States between 2010 and 2013. 

 Special Agents of the FBI and ICE Homeland Security Investigations arrested Arturuo Rojas-Coyotl, Odilon Martinez-Rojas, and Daniel Garcia-Tepal in a highly coordinated law enforcement sweep today. Severiano Martinez-Rojas remains a fugitive and is believed to be in Mexico.  The FBI will coordinate with its legal attaché in Mexico City to affect his arrest and subsequent extradition back to the U.S.  Four search warrants were also executed today in Atlanta and Norcross, Ga. in conjunction with the arrests.

 Rojas-Coyotl, 26, Martinez-Rojas, 41, Martinez-Rojas, 48, and Garcia-Tepal, 28, are scheduled for arraignment today.  Each sex trafficking charge carries a maximum sentence of life in prison while each alien harboring charge has a maximum sentence of 10 years in prison, with all counts carrying a fine of up to $250,000 each.  In determining the actual sentence, the Court will consider the United States Sentencing Guidelines, which are not binding but provide appropriate sentencing ranges for most offenders.

 This case is being investigated by Special Agents of the FBI and the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations.  Interagency cooperation in international sex trafficking operations is imperative and vital to the success of the prosecution. 

 Assistant U.S. Attorney Susan Coppedge and Trial Attorney Benjamin Hawk of the Civil Rights Division’s Human Trafficking Prosecution Unit are prosecuting the case. 

 Anyone with information related to sex trafficking should call the Atlanta FBI hotline at 404-679-9000 or the National Human Trafficking Resource Center at 1-888-3737-888.

 Members of the public are reminded that the indictment contains only allegations.  A defendant is presumed innocent of the charges and it will be the government's burden to prove a defendant's guilt beyond a reasonable doubt at trial.

Attorney Mitchell J. Stein, 53, of Hidden Hills, Calif., was convicted by a jury in the Southern District of Florida for his role in operating a five-year, multimillion-dollar market manipulation and fraud scheme, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division.

Stein was charged in a December 2011 indictment and on May 20, 2013, he was convicted on all counts: conspiracy to commit mail and wire fraud and three counts each of mail fraud and wire fraud, each of which carries a maximum penalty of 20 years in prison; three counts of securities fraud, which each carry a maximum penalty of 25 years; three counts of money laundering, which each carry a maximum penalty of 10 years; and one count of conspiracy to obstruct justice, which carries a maximum penalty of five years in prison. Stein is being detained until sentencing, which is scheduled for Aug. 16, 2013.

 According to evidence presented at trial, Stein’s wife held a controlling interest in Signalife Inc., a publicly-traded company currently known as Heart Tronics that purportedly sold electronic heart monitoring devices.  Stein engaged in a scheme to artificially inflate the price of Signalife stock by creating the false impression of sales activity for Signalife.  Specifically, the evidence at trial showed that Stein and his co-conspirators created fake purchase orders and related documents from fictitious customers, then caused Signalife to issue press releases and file documents with the U.S. Securities and Exchange Commission (SEC) trumpeting these fictitious sales.  Evidence at trial also proved that in a further effort to create the false appearance of sales activity, Stein arranged to have Signalife products shipped to and temporarily stored with an individual who had not purchased any products.

 Evidence at trial further proved that Stein disguised his selling of stock during the conspiracy by placing shares in purportedly blind trusts, and that he had a co-conspirator sell shares of Signalife stock after Stein caused false information to be disseminated to the public.  Stein also caused Signalife to issue shares to third parties so that those third parties could sell the shares and remit the proceeds of those sales to Stein.  From one co-conspirator alone, Stein received illicit gains of over $1.8 million. 
  
 In addition, evidence at trial proved that Stein conspired to obstruct the SEC’s investigation into Heart Tronics by testifying falsely and arranging for others to testify falsely in an effort to conceal the scheme described above.

This case was investigated by the U.S. Postal Inspection Service and the Office of the Special Inspector General for the Troubled Asset Relief Program.

This matter was referred to the Department by the SEC, which conducted a parallel investigation and in December 2011 announced the filing of a civil enforcement action against Stein and others.  The Department thanks the SEC for its substantial assistance in this matter.  The Department also acknowledges the substantial assistance of FINRA’s Criminal Prosecution Assistance Group. 
  
This case is being prosecuted by Assistant Chief Albert B. Stieglitz, Jr. and Trial Attorneys Kevin B. Muhlendorf and Andrew H. Warren of the Criminal Division’s Fraud Section.

Michael Parker, of Baltimore, Md., who was the chief operating officer of TransCapital Corporation, a tax-advantaged investments company based in Northern Virginia, was sentenced yesterday to 54 months in prison by U.S. District Judge Sandra S. Beckwith in Cincinnati, Ohio, the Justice Department and Internal Revenue Service (IRS) announced. In addition, Parker was sentenced to serve three years of supervised release after his release from prison. In December 2009, Parker pleaded guilty to one count of conspiracy to defraud the United States for his role in KPMG’s promotion, marketing, and implementation of a tax shelter product known as SLOTS. 

According to the plea agreement and statements made during trial and related proceedings before U.S. District Judge Sandra S. Beckwith in Cincinnati, Ohio, Parker admitted to conspiring with others to defraud the IRS with regard to tax shelter transactions. Parker, a CPA and an attorney, acted as the Chief Operating Officer of TransCapital Corporation during the alleged conspiracy. Parker testified at the trial of an accountant who was a tax partner at KPMG, LLC, at its Tysons Corner, Va., office, and an attorney for TransCapital, both of whom were acquitted of conspiracy charges after a four-week jury trial.  

According to the plea agreement, trial testimony and other statements, from 1998 through 2006, Parker and others marketed and implemented a tax shelter to KPMG clients called the Sale Leaseback of Tenant Improvements Strategy (SLOTS). The SLOTS shelter enabled client corporations to claim tax deductions totaling more than $240 million on corporate income tax returns filed with the IRS. During 2002 through 2004, the IRS audited three U.S. corporations that had claimed losses generated by SLOTS transactions, including The Kroger Company. Parker identified Kroger as the Fortune 500 corporation that did the largest SLOTS tax shelter transaction, and which claimed over $178 million in loss deductions, causing over $64 million in tax loss to the IRS. Parker admitted that he and the others conspired to impede and impair the IRS by making false and misleading statements to IRS agents and attorneys during these audits, including the Kroger audit. Additionally, Parker admitted that he and others concealed certain aspects of the tax shelter transaction from SLOTS clients, including Kroger, for the purpose of impeding and impairing the IRS. Parker further acknowledged that the SLOTS tax shelter and related transactions were themselves nothing more than devices to disguise and conceal mere financing transactions.

 Kathryn Keneally, Assistant Attorney General for the Justice Department’s Tax Division, thanked the U.S. Attorney’s Office for the Southern District of Ohio for their assistance in this case, and also thanked the IRS-Criminal Investigation agents who investigated the case, as well as Tax Division Attorneys John E. Sullivan, Richard M. Rolwing, and Alexander Robbins who prosecuted the case.

 Additional information about the Tax Division and its enforcement efforts may be found at http://www.usdoj.gov/tax.

Two Alabama real estate investors and their company were sentenced today in U.S. District Court for the Southern District of Alabama in Mobile, for their participation in conspiracies to rig bids and commit mail fraud at public real estate foreclosure auctions in southern Alabama, the Department of Justice announced.

Robert M. Brannon, of Laurel, Miss., and his son, Jason R. Brannon, of Mobile, Ala., were each sentenced to serve 20 months in prison for their participation in the conspiracies. The Brannons and their Mobile-based company, J&R Properties LLC, were ordered to pay $21,983 in restitution to the victims of the crime.

“Today’s sentences send a strong message that the Antitrust Division will continue to hold individuals and companies accountable for their anticompetitive conduct,” said Bill Baer, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. “Whether on a local, national or international scale, bid rigging and fraud subvert the competitive process and the division will remain vigilant in vigorously pursuing those who violate the antitrust laws for their own financial enrichment.”

On Dec. 12, 2012, the Brannons and their company, pleaded guilty to an indictment originally returned on June 28, 2012, in the U.S. District Court for the Southern District of Alabama, charging each of them with one count of bid rigging and one count of conspiracy to commit mail fraud. According to court documents, the Brannons and their company conspired with others not to bid against one another at public real estate foreclosure auctions in southern Alabama. After a designated bidder bought a property at a public auction, which typically takes place at the county courthouse, the conspirators would generally hold a secret, second auction, at which each participant would bid the amount above the public auction price he or she was willing to pay. The highest bidder at the secret, second auction won the property.
 
The indictment also charged the Brannons and their company with conspiring to use the U.S. mail to carry out a fraudulent scheme to acquire title to rigged foreclosure properties sold at public auctions at artificially suppressed prices; to make payoffs to and to receive payoffs from co-conspirators; and to cause financial institutions, homeowners and others with a legal interest in rigged foreclosure properties to receive less than the competitive price for the properties. The indictment charged the Brannons and their company with participating in the bid-rigging and mail fraud conspiracies from as early as October 2004 until at least August 2007.

“The success of this investigation represents the FBI’s staunch commitment to target and investigate those who are willing to abuse and exploit illegal advantages during this legal process for personal gain at the expense of suffering citizens and businesses,” said Stephen E. Richardson, Special Agent in Charge of the FBI’s Mobile Division.

A total of eight individuals and two companies have pleaded guilty in the U.S. District Court for the Southern District of Alabama, in connection with this investigation. The sentences announced today resulted from an ongoing investigation conducted by the Antitrust Division and the FBI’s Mobile Office, with the assistance of the U.S. Attorney’s Office for the Southern District of Alabama. Anyone with information concerning bid rigging or fraud related to public real estate foreclosure auctions should contact the Antitrust Division’s Citizen Complaint Center at 1-888-647-3258 or visit www.justice.gov/atr/contact/newcase.html¬.

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

The Department of Justice announced today that it has reached a settlement with Cinemark Holdings Inc. and Rave Holdings LLC (Rave Cinemas) that requires Cinemark to divest movie theaters in Kentucky, New Jersey and Texas, in order to proceed with its $220 million acquisition of Rave Cinemas movie theaters.  In addition, Cinemark’s chairman is required to divest Movie Tavern Inc., which operates theaters in Ft. Worth and Denton, Texas, that compete with Rave Cinemas.  The department said that the original deal is likely to lead to higher ticket prices for moviegoers and that the divestitures of theaters in Louisville, Ky., southern New Jersey, Fort Worth, and Denton or Hickory Creek, Texas, will preserve competition in those areas, benefitting consumers.

            The department’s Antitrust Division and the state of Texas filed a civil lawsuit today in U.S. District Court in Washington, D.C., to block the proposed acquisition.  At the same time, the department and the state of Texas filed a proposed settlement that requires the divestitures.  If approved by the court, the settlement would resolve the lawsuit and the department’s and the state of Texas’ concerns about the competitive harm to consumers that would result from the acquisition.

            “Cinemark’s proposed acquisition of Rave Cinemas would likely reduce competition among theaters showing first-run, commercial movies in the affected areas of Kentucky, New Jersey and Texas, causing moviegoers to pay higher ticket prices,” said Bill Baer, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. “The divestitures required by the department and the state of Texas will ensure that competition among movie theaters in the affected areas is preserved.”

            According to the complaint, the movie theaters compete on multiple dimensions to attract moviegoers, such as the quality of the viewing experience, sound systems, largest screens, best picture clarity, best seating, and quality of food and drinks.  More than 1 billion movie tickets were sold in the United States in 2012, with total box office revenue reaching about $9.7 billion.

            The department said that Cinemark and Rave Cinemas are each other’s most significant competitor in the area in and around Voorhees-Somerdale, N.J., and in the eastern portion of Louisville, Ky., and that Rave Cinemas and Movie Tavern are each other’s most significant competitor in the western portion of Fort Worth, Texas.  In the area in and around Denton, Texas, all three companies presently operate theatres.  In markets in which Movie Tavern and Rave Cinemas currently compete, the department said that Cinemark’s chairman, Lee Roy Mitchell, would have an ability and financial incentive to dampen competition once Rave Cinemas was acquired by Cinemark. 

            The proposed acquisition would likely reduce price competition among Cinemark, Rave Cinemas and Movie Tavern in the affected markets.  The complaint states that if no longer motivated to compete, Cinemark, Rave Cinemas and Movie Tavern would also have less incentive to maintain, upgrade and renovate their theaters, to improve those theaters’ amenities and services and to license the most popular movies, reducing the quality of the viewing experience for the moviegoer.

The requirement to divest three movie theaters in the locations where Cinemark and Rave Cinemas are currently each other’s closest competitor and to require Mitchell to divest Movie Tavern and its 16 theaters will alleviate the competitive harm to moviegoers from this transaction. 

Cinemark, a Plano, Texas-based company, owns and operates 298 theaters with a total of 3,916 screens in 39 states.  Its U.S. box office revenues were approximately $1 billion in 2012. 

Rave Cinemas, a Dallas-based company, owns and operates 35 movie theaters with a total of 518 screens in 12 states.  Its U.S. box office revenues were approximately $169 million in 2012. 

Movie Tavern, also a Dallas-based company, owns and operates 16 movie theaters with a total of 130 screens in seven states.  Its U.S. box office revenues were approximately $31 million in 2012.  Movie Tavern is owned by Alder Wood Partners L.P., a Dallas-based limited partnership controlled by Mitchell and his wife.

As required by the Tunney Act, the proposed settlement and the department’s competitive impact statement will be published in the Federal Register.  Any person may submit written comments concerning the proposed settlement during a 60-day comment period to John R. Read, Chief, Litigation III Section, Antitrust Division, U.S. Department of Justice, 450 5th Street, N.W., Suite 4000, Washington, D.C. 20530 (telephone: 202-307-0468).  At the conclusion of the 60-day comment period, the U.S. District Court for the District of Columbia may enter the proposed consent decree upon finding that it serves the public interest.

Sean Rosales, a dual United States and Costa Rican citizen, was sentenced today in connection with a series of business opportunity fraud ventures based in Costa Rica, the Justice Department and the U.S. Postal Inspection Service announced today.  Rosales was sentenced by U.S. District Court Judge Ursula M. Ungaro in Miami to 97 months in prison and 5 years supervised release.  Rosales was also ordered to pay more than $7.3 million in restitution.

On March 20, Rosales pled guilty to one count of an indictment pending against him, charging conspiracy to commit mail and wire fraud.  Rosales was arrested in Chicago, Illinois late last year following his indictment by a federal grand jury in Miami on Nov. 29, 2011.   The indictment alleged that Rosales and his co-conspirators purported to sell beverage and greeting card business opportunities, including assistance in establishing, maintaining and operating such businesses.  The charges form part of the government’s continued nationwide crackdown on business opportunity fraud.

Prior to Rosales’ sentencing today, eleven other individuals were charged in connection with business opportunity fraud ventures based in Costa Rica.  Rosales is the eighth of those individuals to be convicted and sentenced in the United States.

“Many Americans dream of owning and operating their own small business, but fraud schemes such as the one perpetrated by this defendant can turn that dream into a nightmare,” said Stuart F. Delery, Acting Assistant Attorney General for the Justice Department’s Civil Division. “The Department of Justice will continue to be aggressive in prosecuting those who take advantage of innocent, hardworking Americans through business opportunity fraud.”

Beginning in May 2005, Rosales and his coconspirators fraudulently induced purchasers in the United States to buy business opportunities in USA Beverages Inc., Twin Peaks Gourmet Coffee Inc., Cards-R-Us Inc., Premier Cards Inc., The Coffee Man Inc., and Powerbrands Distributing Company.  The business opportunities cost thousands of dollars each, and most purchasers paid at least $10,000.  Each company operated for several months, and after one company closed, the next opened.  The various companies used bank accounts, office space and other services in the Southern District of Florida and elsewhere.

Rosales, using aliases, participated in a conspiracy that used various means to make it appear to potential purchasers that the businesses were located entirely in the United States.  In reality, Rosales operated out of Costa Rica to fraudulently induce potential purchasers in the United States to buy the purported business opportunities. 

The companies made numerous false statements to potential purchasers of the business opportunities, including that purchasers would likely earn substantial profits; that prior purchasers of the business opportunities were earning substantial profits; that purchasers would sell a guaranteed minimum amount of merchandise, such as greeting cards and beverages; and that the business opportunity worked with locators familiar with the potential purchaser’s area who would secure or had already secured high-traffic locations for the potential purchaser’s merchandise stands.  Potential purchasers also were falsely told that the profits of some of the companies were based in part on the profits of the business opportunity purchasers, thus creating the false impression that the companies had a stake in the purchasers’ success and in finding good locations.

The companies employed various types of sales representatives, including fronters, closers and references.  A fronter spoke to potential purchasers when the prospective purchasers initially contacted the company in response to an advertisement.  A closer subsequently spoke to potential purchasers to finalize deals.  References spoke to potential purchasers about the financial success they purportedly had experienced since purchasing one of the business opportunities.  The companies also employed locators, who were typically characterized by the sales representatives as third parties who worked with the companies to find high-traffic locations for the prospective purchaser's merchandise display racks.

Rosales, using aliases, was a fronter for USA Beverages, a fronter and reference for Twin Peaks, a fronter and reference for Cards-R-Us, a fronter, locator and reference for Premier Cards, a locator for Coffee Man, and a locator for Powerbrands.

Each of the companies was registered as a corporation and rented office space to make it appear to potential purchasers that its operations were fully in the United States.  USA Beverages was registered as a Florida and New Mexico corporation and rented office space in Las Cruces, N.M.  Twin Peaks was registered as a Florida and Colorado corporation and rented office space in Fort Collins, Colo., and Cards-R-Us was registered as a Nevada corporation and rented office space in Reno, Nev.  Premier Cards was registered as a Colorado and Pennsylvania corporation and rented office space in Philadelphia, and The Coffee Man was registered as a Colorado corporation and rented office space in Denver.  Powerbrands was registered as a Wisconsin corporation and rented office space in Glendale, Wisconsin and Palm Beach Gardens, Fla. 
 
“Fraudulent business opportunity sellers must realize that financial fraud victimizing Americans will be prosecuted vigorously, even if the fraudsters conduct their operations from abroad,” said Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida.  “Increased international law enforcement cooperation eliminates safe havens for those who seek to cheat Americans from overseas.”

“The success of this investigation shows that the U.S. Postal Inspection Service is committed to working with the Department of Justice and our law enforcement partners, both foreign and domestically, to protect Americans from the predatory nature of business opportunity frauds,” said Ronald Verrochio, U.S. Postal Inspector in Charge, Miami Division.

Acting Assistant Attorney General Delery commended the investigative efforts of the Postal Inspection Service.  The case was being prosecuted by Assistant Director Jeffrey Steger and trial attorney Alan Phelps with the U.S. Department of Justice Consumer Protection Branch.

The Department of Justice has filed a lawsuit and sought a preliminary injunction against N.Y. Fish Inc.; New York City Fish Inc.; Maxim Kutsyk, Pavel Roytkov, Leonid Staroseletesky, and Steven Koyfman under the federal Food, Drug, and Cosmetic Act (FDCA).  New York City Fish manufactures and distributes ready-to-eat fishery products, including smoked salmon and mackerel, and operates out of a food processing facility located at 738 Chester Street in Brooklyn. N.Y. Fish previously operated a similar fish processing business out of the same location, employing virtually all of the same employees.  Although N.Y. Fish has ceased manufacturing, FDA believes that N.Y. Fish products continue to be distributed and sold.  The complaint alleges that all defendants have a history of processing fishery products under insanitary conditions, with inadequate safety procedures.

“Consumers depend on food producers to follow the right procedures to make sure our food is safe to eat,” said Acting Assistant Attorney General for the Civil Division Stuart F. Delery.  “As this case demonstrates, the Department of Justice is committed to taking action against those who produce or process food under insanitary conditions or with inadequate safety procedures.”

“Inspectors who visited the defendants’ facility found more than Nemo; they found life-threatening bacteria.  Despite repeated warnings and direction to sanitize the facility, the defendants have failed to do so.  They cannot be allowed to continue to distribute potentially unsafe food to our families.  Those who store, package and sell the food that we eat must maintain basic standards of cleanliness in their facilities.  We are committed to protecting the public from health risks by ensuring that food manufacturers comply with federal laws prohibiting them from preparing, packing and holding food products under insanitary conditions,” stated Loretta E. Lynch, the United States Attorney for the Eastern District of New York. 

According to the complaint, FDA conducted seven inspections of the Chester Street facility between 2006 and 2013.  The inspections showed a repeated failure to minimize the risk of contamination by two dangerous types of bacteria: Listeria monocytogenes and Clostridium botulinum.  People who eat food contaminated with Listeria monocytogenes can contract the disease listeriosis, which can be serious,even fatal,for vulnerable groups such as newborns and those with impaired immune systems.  Complications from the disease can also lead to miscarriage.  Clostridium botulinum spores can produce the toxin that causes botulism.  Eating food tainted with this toxin can lead to paralysis and potentially death.

FDA’s most recent inspection occurred in February 2013, when New York City Fish was operating the Chester Street facility.  According to court filings, the company missed critical processing steps that are essential to prevent the growth and toxin production of Clostridium botulinum and to eliminate any Listeria monocytogenes contamination, including heating fish for a dangerously short time and using insufficiently salty brining solution. 

FDA previously investigated the facility in August 2012, when it was operated by N.Y. Fish.  FDA inspectors discovered widespread sanitation problems and a similar failure to meet critical steps necessary to prevent contamination.  They also found salmon products and production equipment contaminated with Listeria monocytogenes, even after the company attempted to clean and sanitize the facility. 

Further testing by the FDA revealed that certain strains of Listeria monocytogenes it found likely had persisted in the Chester Street facility for years.  FDA contends that the facility is so infiltrated with Listeria monocytogenes that New York City Fish must institute heightened monitoring and strict sanitation procedures to have any hope of eradicating this life-threatening organism, but that it has failed to do so. 

The lawsuit is being brought by Assistant U.S. Attorney Elliot M. Schachner of the Eastern District of New York, and Trial Attorney Adrienne Fowler of the Civil Division’s Consumer Protection Branch, with the assistance of Associate Chief Counsel for Enforcement Julie Dohm of the FDA.

Indian national Kaushik Jayantibhai Thakkar and Brazilian national Fabiano Augusto Amorim were each sentenced today to serve 36 months in prison for their roles in smuggling undocumented migrants to the United States for private financial gain, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Kenneth Magidson for the Southern District of Texas and U.S. Immigration and Customs Enforcement (ICE) Director John Morton.

Thakkar, 33, and Amorim, 28, were sentenced by U.S. District Judge Ewing Werlein Jr. in the Southern District of Texas.  In addition to their prison terms, Thakkar and Amorim were sentenced to serve two years of supervised release.

On Dec. 2, 2012, and Jan. 4, 2013, respectively, Thakkar and Amorim each pleaded guilty to one count of conspiracy to bring undocumented migrants into the United States for profit and to one count of unlawfully bringing two undocumented migrants into the United States for profit. 

According to court documents, Thakkar and Amorim worked together and with other co-conspirators to smuggle individuals from India into the United States.  In support of the conspiracy, Thakkar and others recruited individuals in India who were willing to pay up to $60,000 to be smuggled into the United States.  For their smuggling operations, Thakkar and Amorim and their associates used a network of co-conspirators in South America, Central America, the Caribbean and the United States, including the state of Texas.  Using this network, Thakkar, Amorim and their co-conspirators transported groups of undocumented migrants from locations within India through South America, Central America and the Caribbean and then into the United States by various means, including by air travel, automobiles, water craft and foot.  Many of these smuggling events involved illegal entry into the United States via the border between the United States and Mexico near McAllen and Laredo, Texas.

A third co-conspirator, Maria Adela De Luna, pleaded guilty on Nov. 9, 2012, to one count of conspiracy to harbor undocumented migrants in the United States.  On Feb. 15, 2013, De Luna was sentenced to serve 19 months in prison and three years of supervised release for her role in the conspiracy. 

The investigation was conducted by agents with ICE-Homeland Security Investigations (HSI) in McAllen and Houston, with the assistance of U.S. Customs and Border Protection’s Alien Smuggling Interdiction Unit.  This case is being prosecuted jointly by Assistant U.S. Attorneys Leo J. Leo III and Casey MacDonald of the Southern District of Texas and Trial Attorney Stephen Curran of the Criminal Division’s Human Rights and Special Prosecutions Section.
 
The investigation was conducted under the Extraterritorial Criminal Travel Strike Force (ECT) program, a joint partnership between the Justice Department’s Criminal Division and HSI.  The ECT program focuses on human smuggling networks that may present particular national security or public safety risks, or present grave humanitarian concerns.  ECT has dedicated investigative, intelligence and prosecutorial resources.  ECT coordinates and receives assistance from other U.S. government agencies and foreign law enforcement authorities.

Connie M. Knight, 47, previously of Belle Chasse, La., was sentenced to serve 57 months in prison in New Orleans federal court late yesterday for providing fraudulent hazardous waste safety training in the wake of the Deepwater Horizon explosion and spill, announced Ignacia S. Moreno, Assistant Attorney General of the Justice Department’s Environment and Natural Resources Division, and Dana Boente, U.S. Attorney for the Eastern District of Louisiana. In addition, Ms. Knight was ordered to pay victim restitution in the amount of $25,300.

“On the heels of the largest environmental disaster in U.S. history, Knight illegally profited from a community already suffering from the impacts of the oil spill by impersonating a federal official and raising false hopes for employment.  For that she is being held accountable to the fullest extent of the law,” said Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division.  “The Department of Justice is committed to environmental justice and will vigorously prosecute those who victimize vulnerable communities.”

“Knight took advantage of an environmental disaster and the resulting vulnerabilities of an immigrant community,” said U.S. Attorney Boente.  “Her callous crime focused on her financial gain, ignoring the potential harm to the restoration of the Louisiana coastal region.”

On Jan. 24, 2013, Knight pleaded guilty to three felony criminal charges and one misdemeanor criminal charge for creating false identification documents and impersonating a federal official. Court documents explained how, in the wake of the Deepwater Horizon oil spill, Knight impersonated a high-ranking Occupational Safety and Health Administration (OSHA) hazardous waste safety instructor and inspector in order to collect money from individuals who hoped to work on the cleanup effort that followed the spill.  Knight created and used multiple false federal identifications to bolster her credibility as an OSHA employee and to convince attendees, who were primarily from the Southeast Asian fishing community, that she could ensure them lucrative employment cleaning the spill.  In reality, Knight did not have any connection to OSHA, to the cleanup effort, nor did she have training in hazardous waste safety.

Daniel R. Petrole, Deputy Inspector General for the U.S. Department of Labor’s Office of Inspector General stated, “Today’s sentencing sends a strong message to those who would intentionally engage in fraudulent activity that compromises the integrity of the Department of Labor’s OSHA program.”

“The defendant not only defrauded  people who were desperate for jobs, but also created a risk that poorly trained workers could expose both themselves and the public to hazardous waste that was improperly handled or cleaned up,” said Cynthia Giles, Assistant Administrator for EPA’s Office of Enforcement and Compliance Assurance.

Knight claimed her classes satisfied the various safety requirements that all individuals were to complete in order to be employed at a Deepwater Horizon hazardous waste cleanup site. Her fraudulent classes, however, lasted as little as two hours, while the legitimate certifications would take at least six days of classroom training followed by three days of on-site training.  At least some attendees later gained access to hazardous waste cleanup sites based on the fraudulent certifications created by Knight.

“OSHA will not tolerate fraudulent training or unscrupulous activity when workers' health and lives may be at stake,” said Assistant Secretary of Labor for Occupational Safety and Health Dr. David Michaels. “Inadequate training jeopardizes the safety and health of workers cleaning up hazardous waste sites.”

At the sentencing, Federal District Court Judge Lance Africk considered statements from victims who recounted how Knight targeted the Southeast Asian fishing communities in southern Louisiana, many of whom did not speak or read English.  Court documents explained that because many shrimp grounds were closed from the time of the spill through late 2010, Gulf fishermen had to seek other means of employment.  To gain access to these fishermen and their families, Knight convinced young bilingual individuals from Southern Louisiana, who believed her to be an OSHA trainer, that she could be a source of employment for their struggling communities.  She then used those individuals to publicize her trainings throughout the Vietnamese, Cambodian and Laotian neighborhoods.

According to court documents, Knight required each attendee to pay between $150 and $300 cash to enter a class, and there were at least 950 victims in the Eastern District of Louisiana.   After a short presentation in English, Knight would provide false completion certifications and tell attendees to ready their vessels for BP cleanup work, which she claimed would be coming any day.

This case was investigated by the U.S. Department of Labor Office of Inspector General and the U.S. Environmental Protection Agency Criminal Investigation Division, with assistance from the Occupational Safety and Health Administration, the FBI, investigators from the Florida Fish and Wildlife Conservation Commission and the Plaquemines Parish, La., Sheriff’s office.

The case was prosecuted by Patrick M. Duggan of the Environmental Crimes Section of the Justice Department’s Environment and Natural Resources Division and Emily K. Greenfield of the U.S. Attorney’s Office for the Eastern District of Louisiana.

Today, a federal judge unsealed a three-count indictment returned by a grand jury in the Southern District of Florida charging Jetta McPhee, 59, of Tamarac, Fla., for her role in bringing 143 Haitian nationals to the United States on fraudulently obtained guest worker visas that McPhee and her co-conspirator secured based on false representations that there were jobs awaiting those workers.

The indictment alleges that from April 2008 to July 2009, McPhee conspired with Marie Nicole Dorval to commit visa fraud by making false representations to the federal government about the availability of construction jobs in order to secure H-2B guest worker visas for Haitian nationals.  Dorval previously pleaded guilty to visa fraud conspiracy in connection with her role in the scheme.  According to the indictment, McPhee prepared a fraudulent contract falsely representing that an American company needed 150 full-time construction workers for 10 months at an hourly wage of $8.42.  McPhee and her co-conspirator then submitted this fraudulent contract to the U.S. Department of Labor and to U.S. Citizenship and Immigration Services in connection with their application for the H-2B guest worker visas.

According to the indictment, McPhee and her co-conspirator recruited workers in Haiti, promising them full-time employment and other benefits, including the possibility of obtaining permanent residency, and charged the workers fees for the employment opportunity.  The indictment alleges that after several recruits were denied visas, McPhee traveled to the U.S. embassy in Port-au-Prince, Haiti to facilitate approval of the visas based on the false representations of available construction jobs. According to the indictment, 143 Haitian nationals ultimately entered the U.S. on guest worker visas the co-conspirators obtained based on the false representations.  When the workers arrived, there were no jobs for them.

The indictment charges McPhee with one count of conspiracy to commit visa fraud,   and two counts of visa fraud for aiding and abetting the presentation of fraudulent documents to the U.S. Department of Labor and to the U.S. Citizenship and Immigration Services.

If convicted, McPhee could face a maximum sentence of five years in prison and a fine of $250,000 on the conspiracy charge, and 10 years in prison and a fine of $250,000 on each of the two visa fraud charges.

 This case is being investigated by the Department of Homeland Security, Homeland Security Investigations, and the Department of Labor Office of the Inspector General.  The case is being prosecuted by Trial Attorneys Chiraag Bains and Roy Conn from the Justice Department’s Civil Rights Division.

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

A Texas Army National Guard captain has been charged for his alleged role in a bribery and wire fraud scheme and two former soldiers in the Texas Army National Guard were sentenced for their roles in a separate scheme to defraud the National Guard Bureau and its contractor, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division.

These cases arose from an investigation concerning allegations that former and current soldiers and military and civilian contract recruiters in the San Antonio and Houston areas engaged in a wide-ranging scheme to obtain fraudulent recruiting referral bonuses.  To date, 11 people have been charged in this ongoing investigation, including yesterday’s 17-count indictment of Fabian Barrera, 46, of Schertz, Texas, a Captain in the Army National Guard accused of personally obtaining more than $185,500 in fraudulent recruiting bonuses.  Barrera made his initial appearance on May 16, 2013, in the U.S. District Court for the District of Maryland, before U.S. Magistrate Judge Jillyn K. Schulze.  The public is reminded that an indictment is merely a charge and the defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

According to court documents, in approximately September 2005, the National Guard Bureau entered into a contract with Document and Packaging Broker, Inc., to administer the Guard Recruiting Assistance Program (G-RAP), which was designed to offer monetary incentives to soldiers who referred others to join the U.S. military.  To participate in the G-RAP, an eligible soldier needed to establish an online recruiting assistant (RA) account.  Through these recruiting programs, a participating soldier could receive up to $3,000 in bonus payments for every person he or she referred to serve in the U.S. military.

Barrera, an RA in the G-RAP between approximately December 2005 and February 2012, is alleged to have paid Army National Guard recruiters for the names and Social Security numbers of potential soldiers and used this information to claim that he was responsible for referring dozens of potential soldiers to join the military, though he allegedly did not recruit any of those people.  As a result, Barrera is accused of receiving more than approximately $185,000 in fraudulent recruiting bonuses, and the indictment alleges that Barrera paid various recruiters in the form of checks and cash payments.

 Former Staff Sergeant Jermaine Britt, 39, of Richmond, Texas, was sentenced today to 30 months in prison by Chief U.S. District Judge Biery for his role in obtaining $86,500 in fraudulent bonus payments. According to court documents, Britt served as a recruiter in the Houston area from approximately November 2006 until November 2012. He conspired with former Specialist Stephanie Heller, 37, of Wharton, Texas, who was an RA in the G-RAP and claimed approximately $44,500 in fraudulent bonuses through her account.  Heller made approximately $19,750 in bribe payments to Britt, who served as a recruiter in the Houston area from approximately November 2006 until November 2012. Heller also made a $1,000 bribe payment to another recruiter in exchange for Britt and that recruiter providing the personal information of potential soldiers.  In addition to accepting bribes from Heller, Britt worked with at least two other RAs to claim fraudulent bonus payments and accepted a total of $23,750 in bribe payments in exchange for providing the personal information of potential soldiers.

Britt also admitted that he obstructed justice by coaching Heller to make false statements to federal agents.  In September of 2012, Heller recorded two conversations with Britt.  In those conversations, Britt told Heller how she could provide false stories to federal agents to innocently explain incriminating conduct, such as large cash withdrawals from her bank account, her receipt of emails from Britt in which Britt provided the personal identifiers of potential soldiers, and her use of Britt’s military computer to make referrals under her RA account.

Britt pleaded guilty to conspiracy to commit bribery and wire fraud, bribery, and obstruction of justice on Nov. 9, 2012. Heller pleaded guilty to conspiracy to commit bribery and wire fraud and bribery on Oct. 4, 2012. Heller was also sentenced today to five years’ probation, and her cooperation was instrumental in the case against Britt.

These cases are being prosecuted by Trial Attorneys Edward J. Loya Jr., Brian A. Lichter, and Sean F. Mulryne of the Criminal Division’s Public Integrity Section.  These cases are being investigated by agents from the San Antonio Fraud Resident Agency of the Major Procurement Fraud Unit, U.S. Army CID, and from the San Antonio Field Office of the Internal Revenue Service Criminal Investigation.

Larreka Jackson was sentenced yesterday to 48 months in prison for her role in a multi-million dollar conspiracy to use stolen identities to obtain tax refunds, the Department of Justice and the Internal Revenue Service (IRS) announced today. Jackson was also ordered to pay restitution in the amount of $721,519.12. In January 2013, Jackson pleaded guilty to one count of conspiracy to file false claims and  one count of aggravated identity theft.

On Aug. 15, 2012, a federal grand jury in Montgomery, Ala., returned a 25-count indictment charging Larreka Jackson with conspiring to file false tax returns using stolen identities, filing false claims, wire fraud and aggravated identity theft.  According to court documents, Jackson and Chiquanta Davis operated a tax preparation business called It’s Tax Time in Montgomery, Ala. Jackson and Davis used It’s Tax Time as a front to file false tax returns using stolen identities. Jackson and Davis unlawfully obtained the names and Social Security numbers of actual persons and filed false tax returns using those names. Jackson directed the fraudulent tax refund to bank accounts controlled by her and her co-conspirators.  

 Chiquanta Davis was previously sentenced to 66 months in prison for her role in the conspiracy.

The case was investigated by special agents of IRS - Criminal Investigation. Trial Attorneys Jason H. Poole and Michael Boteler of the Justice Department’s Tax Division and Assistant U.S. Attorney Todd Brown are prosecuting the case.

Additional information about the Tax Division and its enforcement efforts may be found at www.justice.gov/tax.

For more than 40 years, the federal Witness Security (WitSec) Program has enabled the government to bring to justice the most dangerous criminals by providing critical protection for witnesses fearing for their safety.  Over the last two decades, it has been a key tool in thwarting planned attacks and prosecuting those responsible for some of the worst acts of terrorism in American history, including the 1993 World Trade Center bombing, the 1995 bombing of the Alfred P. Murrah Federal Building in Oklahoma City and the 2009 New York City subway suicide-bomb plot.  No terrorism-linked witness has ever committed an act of terrorism after entering the program. 

The number of former known or suspected terrorists ever admitted into the WitSec Program represents a fraction of one percent of the total WitSec population, and the vast majority were admitted into the program prior to Sept. 11, 2001.  To date, the FBI has not identified a national security threat tied to the participation of terrorism-linked witnesses in the WitSec program.

All WitSec participants undergo careful vetting before being admitted into the program, including a complete psychological evaluation and consideration of the witness’s value to the underlying prosecution, the nature of the threat against the witness and the potential risk to the relocation community.  Witnesses are admitted only if relevant federal law enforcement officials have determined that the witness is suitable for the program and the need to admit the witness outweighs any potential risk to the public. Those officials include: the FBI or other sponsoring law enforcement agency investigating the underlying criminal conduct; the U.S. Attorney for the district prosecuting the underlying criminal conduct; the U.S. Marshals Service (USMS), which protects witnesses who require a change of identity and relocation services; and the Department’s Office of Enforcement Operations (OEO), which oversees the WitSec Program.

The Justice Department agrees with the Inspector General’s audit report that the WitSec Program’s requirements for admitting and monitoring participants needed to be enhanced for terrorism-linked witnesses.  In May 2012, the Justice Department developed and implemented formal protocols that the Inspector General recognized as a “significant milestone.”  These enhancements, which have been in effect for a year, include:

• Complete information sharing between USMS, OEO, FBI, the Terrorist Screening Center (TSC) and the National Joint Terrorism Task Force (NJTTF)

• A highly restrictive travel policy that prohibits without exception WitSec participants with a Watchlist status of “No Fly” from traveling on commercial flights

• Consultation with the Justice Department’s National Security Division whenever a terrorism-linked witness is admitted into the WitSec Program

• Close coordination with the Department of Homeland Security in cases involving foreign nationals

The Justice Department has completed action on 15 of the 16 recommendations made in the Inspector General’s report.  The sole remaining recommendation requires the Department to perform a manual review of all 18,000-plus case files of WitSec Program participants dating back to the 1970s.  The department has thus far completed its review of nearly 20 years of records.

Related Materials:

ODAG Public Response to OIG WitSec Interim Audit Report

An Oregon man has been charged with allegedly orchestrating a $50 million securities fraud scheme, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and U.S. Attorney Laura E. Duffy of the Southern District of California.

Bradley Holcom, 55, of Canby, Ore., was arrested Tuesday following his indictment in U.S. District Court for the Southern District of California.  The indictment, which was filed on May 9, 2013, and unsealed late yesterday, charges Holcom with eight counts of mail fraud, four counts of wire fraud and one count of securities fraud.

According to the indictment, Holcom made false statements to investors in connection with the sale of approximately $50 million worth of promissory notes that he sold to more than 150 investors located throughout the United States from at least 2004 through 2010.  The indictment alleges that Holcom solicited investors to provide funds for the development of raw land for commercial and residential purposes through an investment program he operated called the Trust Deed Investment Program.  Holcom allegedly falsely told investors who purchased notes through the Trust Deed Investment Program that they would receive a lien on a specific piece of property he was developing and that the lien would be in first position, which would allow investors to directly foreclose on the underlying development property if Holcom was unable to repay the principal due under the notes.

Despite his statements to investors, Holcom allegedly never provided investors with a lien on the property he was purportedly developing and instead conveyed to investors a lesser interest that did not allow investors to directly foreclose on the property to protect their investment.  In addition, the indictment alleges that while Holcom promised investors that their purported lien would be in first position, Holcom solicited investments for properties that he knew were already encumbered by first position liens. 

 
According to the indictment, Holcom also allegedly sold properties that were supposedly serving as the security for investors without informing investors that the property they had financed for development was gone. 

The indictment alleges that by approximately 2008, Holcom’s financial condition had seriously deteriorated, but he continued to solicit investors for new funds by making misrepresentations about his true financial condition and the manner in which he was using investor money.

The maximum penalty for each wire fraud and mail fraud count is 20 years in prison.  The count of securities fraud carries a maximum penalty of 25 years in prison.

The charges contained in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.

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

This case was investigated by the FBI’s Phoenix Division – Yuma Resident Agency.  The case is being prosecuted by Trial Attorney Henry P. Van Dyck and Deputy Chief Daniel Braun of the Criminal Division’s Fraud Section, and by Assistant U.S. Attorney Stephen Clark of the U.S. Attorney’s Office for the Southern District of California.  The department recognizes the substantial assistance of the U.S. Securities and Exchange Commission.

Mosii Mays Blackwell, of Detroit, Mich., pleaded guilty in the Eastern District of Michigan to obstructing the Internal Revenue Service (IRS) and bank fraud, the Justice Department and the IRS announced today.

According to the information and other documents filed in court, from April 2004 to December 2012, Blackwell failed to report to the IRS over $4.5 million in gross receipts generated by Detroit area businesses that he operated and controlled through various entities, such as the Detroit Manufacturing Group, Moci Jeans, Arzel Corp., Renaissance Contractors and Greentree Entertainment Group, LLC.

In addition, the information states that on November 5, 2004, Blackwell executed a bank fraud scheme by causing a loan application to be submitted to mortgage lender that falsely reported the applicant was employed by one of his business entities at a salary of $18,000 each month.

Blackwell faces a maximum potential sentence of 33 years in prison and a fine of up to $1,250,000.
Kathryn Keneally, Assistant Attorney General of the Justice Department’s Tax Division, thanked Special Agents of IRS – Criminal Investigation, who investigated the case, and Tax Division Trial Attorneys Mark McDonald and Christopher O’Donnell for prosecuting the case.

The Justice Department today announced a settlement with the architects and civil engineers involved in the design and construction of multifamily housing complexes located in Mississippi, Louisiana and Tennessee.  The department’s lawsuit alleges that nine multifamily housing complexes with more than 800 units covered by the Fair Housing Act’s accessibility requirements were designed and built without required accessible features.  No settlement has been reached with the developer, builder or former owners of these properties, who are alleged to have violated not only the Fair Housing Act, but also the Americans with Disabilities Act.

Under the settlement, which was approved today by the U.S. District Court for the Southern District of Mississippi yesterday evening, nine architects and civil engineers will pay a total of $865,000 to make the complexes for which they were responsible accessible to persons with disabilities.  They will also pay $60,000 to compensate aggrieved persons harmed by the inaccessible housing alleged in the government’s lawsuit.  The settlement requires these defendants to undergo training on the Fair Housing Act and to provide periodic reports to the government.

“Persons with disabilities are entitled to equal access to housing under the Fair Housing Act,” said Eric Halperin, Senior Counsel and Special Counsel for Fair Lending in the Civil Rights Division.  “This settlement makes clear that the department takes seriously the accessibility requirements for multifamily housing.”

“The U.S. Attorney’s Office is committed to working with the Civil Rights Division to help ensure that those who design and construct housing units make them accessible to persons with disabilities in compliance with the Fair Housing Act and the Americans with Disabilities Act,” said Gregory K. Davis, U.S. Attorney for the Southern District of Mississippi.

The architects and civil engineers involved in this settlement are Stephen G. Hill, Pickering Firm Inc. a/k/a Pickering Inc.; Larry Singleton d/b/a Singleton Hollomon Architects, H D Lang And Associates Inc.; Richard A. Barron, Architect, Shows, Dearman & Waits Inc.; Canizaro Cawthon Davis f/k/a Canizaro Trigiani Architects; Evans-Graves Engineers Inc. and J.V. Burkes & Associates Inc. 

The Fair Housing Act prohibits discrimination in housing based on race, color, religion, national origin, sex, disability and familial status.  Title III of the Americans with Disabilities Act requires, among other things, that public accommodations comply with specific requirements related to architectural standards to ensure accessible public and common use areas.   More information about the Civil Rights Division and the laws it enforces is available at www.usdoj. gov/crt .  Individuals who believe that they may have been victims of housing discrimination can call the Housing Discrimination Tip Line at 1-800-896-7743, e-mail the Justice Department at [email protected] , or contact the U.S. Department of Housing and Urban Development at 1-800-669-9777. 

WASHINGTON - INTERPOL Washington, the United States National Central Bureau (USNCB), announced the capture and return of Shilo Watts, 38, a United States citizen and resident of Atascosa County, Texas from Oman to the United States. Watts is wanted in Texas for charges of aggravated sexual assault of a minor, beginning when the minor was three years old and continuing over a prolonged period of time. In 2012, Watts fled the United States, resulting in the issuance of federal felony charge of unlawful flight to avoid prosecution.

In April, INTERPOL Washington expedited the publication of an INTERPOL Red Notice, or international wanted persons notice, for Watts based on the charges in Texas. The Red Notice was disseminated via INTERPOL's network to its 190 member countries around the world. Based on the efforts of investigators from the U.S. Marshals Service (USMS) International Investigations Branch, USMS Western District of Texas, and the U.S. Department of State Bureau of Diplomatic Security Service, Watts' was traced to Oman where the INTERPOL Red Notice provided police with the authority to arrest and lawfully return Watts to the United States on May 15. Watts is currently in the custody of U.S. authorities and faces a maximum sentence of life in prison.

INTERPOL Washington Director Shawn Bray stated, “The capture of Shilo Watts is a great example of partnership between foreign, federal, state, and local law enforcement authorities, including the U.S. Marshals Service, Diplomatic Security Service, Office of International Affairs at the U.S. Department of Justice, and INTERPOL Washington. Through the close coordination of these authorities paired with the use of INTERPOL's international resources, the U.S. Marshals Service and the Diplomatic Security Service located, arrested and returned Watts to face justice in Texas in a matter of days.”

 A former stock broker was sentenced to prison today for his role in an extensive pump-and-dump stock manipulation scheme, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division , U.S. Attorney Danny C. Williams Sr. of the Northern District of Oklahoma, Special Agent in Charge James E. Finch of the FBI’s Oklahoma City Division and Internal Revenue Service-Criminal Investigation (IRS-CI) Chief Richard Weber.

Joshua Wayne Lankford, 39, of Dallas, was sentenced by U.S. District Judge James H. Payne in the Northern District of Oklahoma to serve 84 months in prison.  In addition to his prison term, Lankford was ordered to forfeit $250,000.  Proceeds from forfeited assets will be used to partially restitute victims. 

On Dec. 10, 2012, Lankford pleaded guilty to one count of money laundering.

“Mr. Lankford and his co-conspirators took advantage of innocent investors to the tune of millions of dollars, pumping and dumping penny stocks without regard to anything but their wallets,” said Acting Assistant Attorney General Raman.  “As this case shows, stockbrokers and other professionals will be punished if they break the law.  Lankford now faces substantial time in prison for his manipulation scheme.”

“The U.S. Attorney’s Office and the Department of Justice are committed to identifying and prosecuting criminals who defraud investors and steal their savings,” said U.S. Attorney Williams.  “Pump and dump schemes like these have a devastating financial impact on the victims and undermine public confidence in our nation’s financial system.”

According to court documents and evidence presented at the 2010 trial, Lankford and his co-defendants manipulated the stocks of three companies: Deep Rock Oil & Gas Inc. and Global Beverage Solutions Inc., formerly known as Pacific Peak Investments, both of Tulsa, Okla., and National Storm Management Group Inc. of Glen Ellyn, Ill.  The defendants devised and engaged in a scheme to defraud investors known as a “pump and dump,” in which they manipulated publicly traded penny stocks.  A penny stock is a common stock that trades for less than $5 per share in the over the counter market, rather than on national exchanges.  Lankford and his co-defendants executed the scheme by obtaining a majority of the free-trading shares of stock of the company they intended to manipulate, using fraudulent and deceptive means to acquire the stock and/or remove the trading restrictions on the shares they obtained.

“Stock manipulation and securities fraud are high investigative priorities of the FBI,” said FBI Special Agent in Charge Finch.  “This case is the result of a lengthy investigation which involved outstanding cooperation between the FBI, IRS Criminal Investigations, and the SEC.  The FBI will continue to work with our law enforcement partners to protect investors and bring those who commit these types of fraud to justice.”

“Using fraud and deception to jeopardize the financial markets and launder funds are not victimless crimes,” said IRS-CI Chief Weber.  “Mr. Lankford and his co-defendants thought they latched onto a clever scheme to reap a vast wealth of illegal profits.  Today, justice has been served.  IRS-CI works in close alliance with our law enforcement partners, and together we will hold those who engage in similar conduct accountable.”

According to court records, Lankford and other conspirators “parked” their shares with various nominees, such as friends, relatives or other entities that they owned and controlled. Subsequently, they engaged in coordinated trading in order to create the appearance of an emerging market for these stocks, after which they conducted massive promotional campaigns in which unsolicited fax and email “blasts” were sent to millions of recipients.  According to evidence presented at the 2010 trial, these blasts touted the respective stocks without accurately disclosing who was paying for the promotions, omitted that the defendants intended to sell their shares, and induced unsuspecting legitimate investors to purchase stock in the companies.  The defendants and their nominees obtained significant profits by selling large amounts of shares after they had artificially inflated the stock price.  For each of the three manipulated stocks, the conspirators’ sell-off caused declines of the stock price and left legitimate investors holding stock of significantly reduced value. 

According to Lankford’s guilty plea, he laundered $250,000 in proceeds derived from the stock manipulation scheme.

Evidence presented in the 2010 trial showed that the overall scheme resulted in illegal proceeds of more than $43 million from more than 17,000 investor victims.

Lankford was originally charged in a 24-count indictment unsealed on Feb. 10, 2009, against five defendants.  Prior to trial, Lankford fled to Costa Rica, where he remained until he was extradited to the United States in May 2012.  James Reskin, 54, of Louisville, Ky., was sentenced today to serve five years of probation for his role in the scheme.  Co-defendants George David Gordon and Richard Clark, were convicted by a federal jury in May 2010 for their roles in the scheme.  Gordon was sentenced to serve 188 months in prison, and Clark was sentenced to serve 151 months in prison.  The fifth defendant, Dean Sheptycki, remains a fugitive.

The case is being prosecuted by Trial Attorneys Andrew Warren and Kevin Muhlendorf of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Catherine Depew for the Northern District of Oklahoma.  The case is being investigated by IRS-CI and the FBI.  The department wishes to thank the Securities and Exchange Commission, which referred the matter for prosecution.  The department also wishes to thank the Criminal Division’s Office of International Affairs, the U.S. Department of State and the U.S. Marshals Service for their work in securing Lankford’s extradition.

This case 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 2,900 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.

Drs. David Leon Fredrick and Patricia Lynn Hough, of Englewood, Fla., were indicted by a federal grand jury in Fort Myers, Fla., for conspiring to defraud the Internal Revenue Service (IRS) by concealing millions of dollars in assets and income in offshore bank accounts at UBS and other foreign banks, the Department of Justice and IRS announced today.   

According to the indictment, Fredrick and Hough, married doctors, served on the Board of Directors of two Caribbean-based medical schools – one located on Saba, Netherlands Antilles, and one located on Nevis, West Indies. Fredrick had an ownership interest in the medical school on Nevis until 2007, when both medical schools were sold. 

The indictment alleges that Fredrick and Hough conspired with each other and with Beda Singenberger, a citizen and resident of Switzerland who is under indictment in the Southern District of New York, and a UBS banker to defraud the IRS. They carried out the conspiracy by creating and using nominee entities and undeclared bank accounts in their names and the names of the nominee entities at UBS and other foreign banks to conceal assets and income from the IRS, including the sale of real estate associated with the medical school on Saba and shares they owned in the medical school on Nevis. The real estate was sold for more than $33 million, all of which was deposited into one of their undeclared accounts in the name of a nominee entity.

It is further alleged in the indictment that Fredrick and Hough used emails, telephone and in-person meetings to instruct Swiss bankers and asset managers to make investments and transfer funds from their undeclared accounts at UBS. It is alleged that Fredrick and Hough caused funds from the medical schools’ undeclared accounts to be transferred to undeclared accounts in their individual names or in the names of nominee entities. Fredrick and Hough then used the funds in their undeclared accounts to purchase an airplane, two homes in North Carolina and a condominium in Sarasota, Fla. Fredrick also transferred more than $1 million to his relatives. 

Fredrick and Hough were also charged with four counts of filing false tax returns for 2005, 2006, 2007 and 2008. The indictment alleges that Fredrick and Hough filed false tax returns which substantially understated their total income and failed, on Schedule B, Parts I and III, to report that they had an interest in or signature or other authority over bank, securities or other financial accounts located in foreign countries. U. S. citizens, resident aliens and legal permanent residents of the United States have an obligation to report to the IRS on the Schedule B of a U.S. Individual Income Tax Return, Form 1040, whether they had a financial interest in, or signature authority over, a financial account in a foreign country in a particular year by checking “Yes” or “No” in the appropriate box and identifying the country where the account was maintained. U. S. citizens and residents also have an obligation to report all income earned from foreign bank accounts on their tax returns. 

A trial date has not been scheduled.  An indictment is merely an accusation, and every defendant is presumed innocent unless and until proven guilty. 

The conspiracy charge carries a maximum potential penalty of five years in prison and a $250,000 fine. The false return charges each carry a maximum potential penalty of three years in prison and a $250,000 fine.

This case is being prosecuted by Trial Attorney Caryn Finley of the Justice Department’s Tax Division and was investigated by IRS – Criminal Investigation.

Additional information about the Tax Division and its enforcement efforts may be found at  www.justice.gov/tax

Fazliddin Kurbanov, 30, was arrested Thursday morning in Boise, Idaho, as part of a federal terrorism investigation.  Federal terrorism charges were filed Thursday afternoon in Boise and Salt Lake City, Utah.  Kurbanov, an Uzbekistan national, legally present in the United States, was living in Boise at the time of his arrest.

 A federal grand jury in Boise returned a three-count indictment charging Kurbanov with one count of conspiracy to provide material support to a designated foreign terrorist organization, one count of conspiracy to provide material support to terrorists and one count of possessing an unregistered destructive device.
 
A federal grand jury in Salt Lake City returned an indictment charging Kurbanov with one count of distribution of information relating to explosives, destructive devices and weapons of mass destruction. 

 The charges were announced by David B. Barlow, U.S. Attorney for the District of Utah; Wendy J. Olson, U.S. Attorney for the District of Idaho; John Carlin, Acting Assistant Attorney General for National Security at the U.S. Department of Justice; and Mary Rook, Special Agent in Charge of the FBI’s Salt Lake City Division.

 The arrest was the culmination of an investigation by the FBI’s Salt Lake City Division, which covers Idaho and Utah; and Joint Terrorism Task Forces (JTTF) in Idaho and Utah, which include a number of federal, state and local law enforcement agencies.

Kurbanov’s activities were closely monitored by federal agents during the investigation and any potential threat posed by Kurbanov has been contained.  Kurbanov is scheduled to make his initial appearance in federal court in Boise tomorrow.  He will be transferred to Utah at the conclusion of the prosecution in Idaho.   

 “Today’s arrest and these indictments underscore our commitment to aggressively and thoroughly investigate those who conspire to engage in unlawful terrorist activities,” said U.S. Attorney Olson.  “The thorough and exhaustive work of our JTTF, in partnership with our investigating and prosecuting partners in Utah, Colorado and at the National Security Division, put a stop to this criminal activity and ensured the public’s safety.  I commend the men and women at every level of law enforcement, including the FBI, the Department of Homeland Security, Homeland Security Investigations, Ada County and Canyon County Sheriff’s Offices and the Boise City Police Department, who assisted in this effort.”

 “One of our highest priorities is disrupting potential acts of terrorism.  The coordinated investigation, arrest, and indictments in this case demonstrate the commitment of all involved to do just that. The tireless work of agents, analysts and law enforcement officers to detect and guard against acts of terrorism has helped ensure the safety of the communities they serve,” U.S. Attorney Barlow said today. “The judicial part of the process will now begin in Idaho and Utah.”

 “Today’s arrest underscores the need for continued vigilance against terrorist threats both at home and abroad.  I thank the many agents, analysts and prosecutors responsible for this important investigation,” said Acting Assistant Attorney General Carlin.

 “As always, the FBI’s top priority is the safety and security of our nation and its citizens.  The indictments and arrest are the result of months of exhaustive investigation on the part of agents, analysts, and officers who worked indefatigably to achieve that end,” said FBI Special Agent in Charge Rook.
   
Idaho Charges

 The Idaho indictment alleges in count one that between August 2012 and May 2013, Kurbanov knowingly conspired with unnamed co-conspirators to provide material support and resources to the Islamic Movement of Uzbekistan, a designated foreign terrorist organization.  The indictment alleges that the material support and resources included himself, computer software and money. 

In count two, the indictment further alleges that the defendant conspired to provide material support and resources, including himself, to terrorists knowing that the material support was to be used in preparation for and in carrying out an offense involving the use of a weapon of mass destruction.  

The indictment also alleges in count three that on or about Nov.15, 2012, Kurbanov possessed a destructive device consisting of a combination of parts intended for use in converting any device into a destructive device and from which a destructive device could be readily assembled.  According to the indictment, the parts were a hollow hand grenade, hobby fuse, aluminum powder, potassium nitrate and sulfur. 

 If convicted on the Idaho charges, Kurbanov faces a maximum of 15 years in prison on each of the conspiracy counts and 10 years in prison on the possession of an unregistered destructive device count.  The Idaho charges are being prosecuted by Assistant U.S. Attorneys Aaron Lucoff and Heather Patricco and National Security Division Trial Attorney Larry Schneider.

Utah Charges

 The one-count indictment filed in Utah alleges that from about Jan. 14, 2013, continuing through Jan. 24, 2013, Kurbanov taught and demonstrated how to make explosive devices and distributed information relating to the manufacture and use of an explosive or weapon of mass destruction with the intent that the teaching, demonstration and information be used for, and in furtherance of, an activity that would constitute a federal crime of violence.

 The indictment alleges the defendant showed internet videos, conducted instructional shopping trips, provided written recipes and gave verbal instructions on where to obtain the necessary components to construct and use improvised explosive devices.  The indictment also alleges that Kurbanov intended that the videos, written recipes, verbal instructions and shopping trips be used for training in the construction and use of explosive devices to commit a crime of violence, such as the use of weapons of mass destruction; bombings of a place of public use, a public transportation system or infrastructure facility; or destroying a building in interstate commerce.

 If convicted on the Utah charge, Kurbanov faces up to 20 years in federal prison.

 The Utah charges are being prosecuted by U.S. Attorney Barlow, Assistant U.S. Attorney John W. Huber and National Security Division Trial Attorney Larry Schneider.
 
 An indictment is not a finding of guilt and is not evidence.  Individuals charged in an indictment are presumed innocent unless or until proven guilty beyond a reasonable doubt in a court of law.

(If you have questions regarding the Idaho case, please call Pam Bearg, PIO in the Idaho U.S. Attorney’s Office, at 208-334-1211. For questions on the Utah case, please call Melodie Rydalch, PIO in the Utah U.S. Attorney’s Office at 801-325-3206. Questions for the FBI Salt Lake City Division can be directed to Public Affairs Specialist Deb Bertram at 801-579-1400 or by e-mail at [email protected].)    

Related Materials:

Utah Indictment
Idaho Indictment

Glenn Powell Jr. pleaded guilty today in the Middle District of Alabama to his role in a large scale stolen identity refund fraud, the Justice Department and the Internal Revenue Service (IRS) announced.  

On April 17, 2013, a federal grand jury in Montgomery, Ala., indicted Powell on conspiracy and theft of government money charges.  According to court documents, Powell opened two bank accounts on which he was the only authorized signer. Between August 2009 and February 2011, at least 49 false federal income tax refunds totaling approximately $95,926 were directed to Powell’s bank accounts.  Powell was able to withdraw approximately $46,423.71 in false tax refunds before the IRS stopped him.  The overall scheme Powell participated in is alleged to have involved over $500,000 in false refunds. 

As a result of his plea, Powell faces a maximum potential sentence of 10 years in prison.

This case was investigated by special agents of IRS - Criminal Investigation. Trial Attorneys Charles M. Edgar Jr., Michael Boteler and Greg Bailey of the Justice Department’s Tax Division are prosecuting the case, with the assistance from the U.S. Attorney’s Office for the Middle District of Alabama and, in particular, Assistant U.S. Attorney Todd Brown.

FALLS CHURCH, Va. - In order to better serve its stakeholders, including the detainee population, the Executive Office for Immigration Review today announced it will be establishing a full-time presence and opening an immigration court in the Department of Homeland Security contract detention facility in Adelanto, Calif., on May 20, 2013.

Contact information for the new location is as follows:

LOCATION: Adelanto Detention Facility
10250 Rancho Road, Suite 201A
Adelanto, Calif. 92301

HOURS OF OPERATION: 7:30 a.m. to 4 p.m. Monday through Friday

TELEPHONE:    (760) 246-5404

- EOIR -

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

The Justice Department today announced that a federal grand jury in Memphis, Tenn., has returned a one-count indictment charging Justin Shawn Baker, 25, of Jackson, Tenn., with violating the civil rights of students and faculty of the Margolin Hebrew Academy.

The indictment alleges that on or about Jan. 12, 2013, Baker defaced a Torah and religious prayer books which the students and faculty of the Margolin Hebrew Academy were using for a worship service conducted at the Doubletree Hotel in Jackson.

“This kind of vandalism strikes at the heart of religious freedom in this country, and it will not be tolerated,” said Roy L. Austin Jr., Deputy Assistant Attorney General for the Civil Rights Division. “Our nation’s civil rights laws protect all denominations, and those who would strike at the right of peaceful citizens to worship will be held accountable.”

“Freedom to practice one’s religion without prejudice is one of the bedrock principles upon which our nation was founded,” said Edward L. Stanton III, U.S. Attorney for the Western District of Tennessee. “Criminal acts such as those alleged in the indictment represent an attack on the rights that generations of Americans have fought and died to ensure and protect.  Our dedicated civil rights unit will continue to protect and defend the rights of our citizens through vigorous enforcement of federal law.”

An indictment is merely an accusation, and the defendant is presumed innocent unless proven guilty. If convicted, the defendant faces a maximum penalty of 1 year in prison.

This case was investigated by the FBI and is being prosecuted by Assistant U.S. Attorneys Larry Laurenzi and Jonathan Skrmetti of the U.S. Attorney’s Office for the Western District of Tennessee and Trial Attorney Douglas Kern of the Civil Rights Division’s Criminal Section.

Vinh Chuong “Jimmy” Kha, 50, and Felix Kha 26, were sentenced today in federal district court in Los Angeles to serve 42 and 46 months, respectively, in prison for crimes related to illegal international trafficking of rhinoceros horn, announced Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division of the Department of Justice and André Birotte Jr., U.S. Attorney for the Central District of California.

In addition to the prison sentences, the two defendants were ordered to pay a total of $20,000 in criminal fines and pay a $185,000 tax fraud penalty and assessment.  In addition, Jimmy Kha’s Win Lee Corporation was ordered to pay a $100,000 fine.  Jimmy and Felix Kha, along with Win Lee Corporation, were also ordered to pay a total of $800,000 in restitution to the Multinational Species Conservation Fund, a statutorily created fund that is managed by the U.S. Fish and Wildlife Service (FWS) to support international efforts to protect and conserve rhinos and other critically endangered species around the world.  The defendants previously abandoned their portion of interest in $2 million worth of rhino parts and vehicles seized in the investigation.

The Khas are among several individuals charged so far with federal crimes as a result of “Operation Crash,” an ongoing FWS-led investigation of the black market rhino horn trade named for the term used to describe a herd of rhinoceros.

“The Khas engaged in egregious criminal conduct by taking the horns of a species on the brink of extinction and making millions of dollars in the illegal trade in rhino horns,” said Ignacia S. Moreno, Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division.  “The Khas sentence sends a strong message that those who violate the law by illegally trading in rhino horns will be held accountable to the fullest extent of the law.”

“The Khas’ smuggling operation fueled international demand and played a significant role in driving the price of rhino horn to nearly $25,000 per pound,” said U.S. Attorney Birotte. “It was that rising value of rhino horn that encouraged ruthless poachers to scour the South African wilderness in search of profits. The Khas played a role in pushing species like the African black rhino to the brink of extinction, which is why we aggressively prosecuted this case and sought lengthy prison terms.”

“On average, a rhino is slaughtered in Africa every 11 hours to feed the black market for their horns,” said FWS Director Dan Ashe.  “Criminals in this country who are cashing in on this illegal trade should know that the United States will hold them accountable for their crimes and do everything possible to protect wild populations of rhinos.”

On Sept. 14, 2012, the Khas pleaded guilty to charges of conspiracy, smuggling, wildlife trafficking in violation of the Lacey Act, money laundering and tax fraud, and Win Lee Corporation pleaded guilty to smuggling and wildlife trafficking in violation of the Lacey Act.  In February 2012, at the time of the arrest of Jimmy and Felix Kha, FWS agents seized rhinoceros mounts and horns, $1 million in cash, approximately $1 million in gold ingots, jewelry, watches and precious stones, a 2009 BMW 759 Li Sedan and a 2008 Toyota Forerunner from the defendants and their co-conspirators.  Under the plea agreement, the defendants agreed to the forfeiture of these items, which include nine rhino horns and six rhino feet.  Ultimately, prior to sentencing, the defendants formally abandoned all the wildlife and the instrumentalities of the crimes seized from them (such as the vehicles) to the United States.  The Khas’ portion of the seized cash and gold, proceeds of their illegal activities, will be used to pay the $800,000 in restitution ordered at sentencing.
 
Background on Rhinos

With no known predators other than humans, rhinoceros are a prehistoric species and one of the largest herbivores on earth.  All rhinoceros species are protected under U.S. and international law, and the black rhinoceros is listed as endangered.  Despite national and international protection efforts dating back to 1976, the demand for rhino horn and black market prices have skyrocketed in recent years due to the value that some cultures have placed on the horns for ornamental carvings, good luck charms or alleged medicinal purposes.  This has led to a decimation of the global rhinoceros population, which has declined by more than 90 percent since 1970.  By the peak of the Kha’s wildlife trafficking conspiracy in 2011, 448 wild rhinos had been slaughtered for their horns in South Africa alone.  Between 2007 and the end of 2011, the poaching of wild South African rhinos increased a tragic and astonishing 3,400 percent, rising from a low of 13 animals in 2007 to 448 animals in 2011.

The Criminal Conduct

Over the course of at least two years from January 2010, through February 2012, Jimmy and Felix Kha conspired with individuals throughout the United States to purchase white and black rhinoceros horn despite knowing that these animals were protected by federal law as endangered and threatened species.  Although Jimmy Kha paid, on average, between $5,000 to $7,000 per pound of rhinoceros horn, the horn acquired by the defendants had a fair market value of at least $1 million to $2.5 million.  Under the plea agreement, the defendants admitted that they purchased the horns in order to export them overseas to be sold and made into libation cups or used for traditional medicine; made illegal payments to Vietnamese customs officials to ensure clearance of horn shipments to that country; and knowingly evaded income taxes owed in 2009 and 2010.  

U.S. Attorney Birotte and Assistant Attorney General Moreno commended FWS and its partners for their outstanding work on this investigation.  Assisting agencies included the U.S. Postal Inspection Service, the Internal Revenue Service Criminal Investigations, and U.S. Immigration and Customs Enforcement’s Homeland Security Investigations.  The case is being prosecuted by Assistant U.S. Attorneys Joseph O. Johns and Dennis Mitchell of the U.S. Attorney’s Office for the Central District of California, and Shennie Patel, a Trial Attorney with the Environmental Crimes Section of the Justice Department’s Environment and Natural Resources Division.

A federal inmate was sentenced today to life in prison for the violent murder of a fellow inmate in Pennsylvania’s Allenwood Correctional Complex, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and U.S. Attorney for the Middle District of Pennsylvania Peter J. Smith.

Ritz D. Williams Jr., 32, of Gila River Indian Reservation, Sacaton, Ariz., pleaded guilty to one count of first degree murder and possession of a weapon on April 15, 2013.  U.S. District Court Judge Yvette Kane sentenced Williams to life without the possibility of parole on May 15, 2013, for his role in the murder of fellow inmate Alvin Allery.

Williams and his co-conspirator Shawn Cooya were indicted by a federal grand jury in February 2008 and a superseding indictment was returned in July 2009.

According to court documents, Williams and Cooya aided each other in the premeditated murder of Allery.  On Sept. 28, 2005, Williams and Cooya stabbed Allery 10 times with a homemade knife and repeatedly kicked him in the head and torso, which resulted in Allery’s death. 

On Jan. 8, 2013, Cooya pleaded guilty to one count of first degree murder and was sentenced to serve life in prison on March 18, 2013.

The case was investigated by the Bureau of Prisons and the FBI. The case was prosecuted by Assistant U.S. Attorneys Wayne P. Samuelson and Michelle Olshefski of the Middle District of Pennsylvania, Trial Attorneys Julie B. Mosley and Mike Warbel of the Criminal Division’s Capital Case Unit, and Assistant U.S. Attorney C.J. Williams of the Northern District of Iowa and formerly with the Capital Case Unit.

Mississippi-based Hancock County Land LLC (HCL) pleaded guilty today to the unpermitted filling of wetlands near Bay St. Louis, Miss., and agreed to pay a $1 million fine and take remedial measures for two felony violations of the Clean Water Act, announced Assistant Attorney General Ignacia S. Moreno of the Justice Department’s Environment and Natural Resources Division and U.S. Attorney for the Southern District of Mississippi Gregory K. Davis.  HCL admitted causing the unauthorized excavation and filling of wetlands on a 1,710 acre parcel of undeveloped property in Hancock County, west of the intersection of Route 603 and Interstate 10.

According to the charges filed in federal court in Jackson, Miss., when HCL purchased the property, it had been informed by a wetland expert that as much as 80 percent of its land was federally protected wetland connected by streams and bayous to the Gulf of Mexico and, therefore, that the property could not be developed without a permit from the U.S. Army Corps of Engineers.  Such permits typically require that developers protect and preserve other wetlands to compensate for those they are permitted to fill and destroy. 

The charges allege that in spite of additional notice of the prohibition against filling and draining wetlands without authorization, HCL, principally through its minority owner /general contractor, hired an excavation contractor to trench, drain and fill large portions of the property to lower the water table and thus to destroy the wetland that would otherwise have been an impediment to commercial development.  In pleading guilty, HCL admitted that it knowingly ditched, drained and filled wetlands at multiple locations on the Hancock County property without having obtained a permit from the Army Corps of Engineers as required under the Clean Water Act.
 
It is a felony under the Clean Water Act for any person knowingly to discharge pollutants into waters of the United States, including wetlands, without a permit.  A corporation convicted of this offense is subject to a penalty of not more than $500,000 per count.

HCL agreed and was ordered to pay to the federal government a total penalty of $1 million ($500,000 for each of the two counts).  HCL also agreed and was ordered by the court to restore and preserve the damaged wetlands as provided in separate agreements HCL reached with the U.S. Environmental Protection Agency (EPA) and a citizen group, the Gulf Restoration Network.   The agreements require HCL to re-grade and then re-plant, with appropriate native vegetation, the wetland area it excavated and filled and donate approximately 272 acres of the southwest quadrant of its property to the Land Trust for the Mississippi Coastal Plain to be preserved in perpetuity.  HCL is also required to fund its management and maintenance, to pay $100,000 toward the litigation costs of the Gulf Restoration Network, and to pay a civil penalty to the U.S. Treasury of $95,000.
 
HCL entered its plea before senior U.S. District Judge Walter J. Gex III. 

"The defendant deliberately destroyed wetlands that are protected by the law," said Maureen O'Mara, Special Agent in Charge of EPA's criminal enforcement program in Mississippi. "This is a great example of local, state, and federal agencies working together to hold companies accountable for putting profit above the requirements of the law."

U.S. Attorney Davis praised the efforts of the EPA’s Office of Criminal Investigation for its diligent work in the investigation of this matter.  Senior Trial Attorney Jeremy F. Korzenik of the Justice Department’s Environmental Crimes Section of the Environment and Natural Resources Division, and Assistant U.S. Attorney Gaines Cleveland are the prosecutors in charge of the case.

Real estate developer and HCL minority owner, William R. Miller, was charged in November 2012 with  Clean Water Act violations related to the same unauthorized excavation and filling of wetlands near Bay St. Louis.  That case is expected to be scheduled for trial over the next few months. 

The Department of Justice announced today that it has reached a final settlement with the city of Corpus Christi, Texas, to resolve the department’s claim that the city violated Title VII of the Civil Rights Act of 1964 by engaging in a pattern or practice of discrimination against female applicants for entry-level police officer positions.
 
The Justice Department’s complaint, filed in the U.S. District Court for the Southern District of Texas, alleges that Corpus Christi’s use of a physical abilities test between 2005 and 2011 violated Title VII because it unlawfully screened out female applicants for entry-level positions with the police department without the required evidence showing that the test did not properly evaluate whether a candidate was in fact qualified for a police officer position.  Title VII prohibits discrimination in employment on the basis of race, color, sex, national origin or religion, whether the discrimination is intentional or involves the use of employment practices, like physical abilities tests, that have a disparate impact and are not job-related and consistent with business necessity.  

The Justice Department and the city of Corpus Christi initially entered a settlement and requested the court to approve a consent decree in September 2012.  Prior to final entry of the decree by the district court, the Corpus Christi Police Officers’ Association, a union representing most of the city’s police officers, intervened as a party in the lawsuit.  This settlement is the culmination of negotiations between all three parties and has resulted in a joint motion by all parties for entry of an amended consent decree.  The proposed amended consent decree must be approved by the court; upon its approval, all issues raised by the Justice Department’s complaint against the city of Corpus Christi, and the union’s claims, will be resolved.  
 
“The Department of Justice is committed to eliminating artificial barriers that keep qualified women out of public safety work,” said Jocelyn Samuels, Principal Deputy Assistant Attorney General for the Civil Rights Division.  “The department commends Corpus Christi for working to adopt new hiring procedures that comply with Title VII and to provide relief to those who were harmed by the city’s previous hiring practices.” 

The amended proposed consent decree requires Corpus Christi to replace the physical abilities test challenged by the United States with a new selection procedure that complies with Title VII.   Additionally, the amended proposed consent decree requires the city to pay $700,000 as back pay to eligible female applicants who took and failed the challenged physical abilities test between 2005 and 2011.  Also under the decree, some women who took and failed the challenged physical abilities test between 2005 and 2011, but who are qualified to perform as police officers, may receive offers of priority employment with retroactive seniority and benefits.  Applicants interested in priority employment must pass the new, lawful selection procedure developed by Corpus Christi under the decree, and they must meet other qualifications required of all applicants considered for entry-level police officer positions with the city.    
 
Enforcement of federal employment discrimination laws is a top priority for the Justice Department.  Additional information about Title VII and other federal employment laws is available on the Civil Rights Division’s website at www.justice.gov/crt.

Related Materials:

Joint Motion Re 2d Amd Decree
Dkt 56-1 -- 2d Amd Decree
Dkt 56-2 -- Proposed Order

The Justice Department today paid tribute to nine individuals for their extraordinary efforts to recover missing children, rescue children from abuse and prosecute sexual predators during its annual commemoration of National Missing Children’s Day.
 
“The achievements of these honorees, and the stories behind them, remind us that it takes someone very special to do the work that they do,” said Acting Associate Attorney General Tony West. “Days, weeks, months, and as we saw in Cleveland last week, even years can pass between a child’s disappearance and her recovery.  It takes tremendous faith, but more importantly, it takes incredible resolve and resourcefulness to pursue those cases to certain resolution.”
 
“As our Missing Children’s Day honorees demonstrate, community members who remain alert and respond, rescue children every day,” said Acting Assistant Attorney General for the Office of Justice Programs Mary Lou Leary.  “Through support for programs such as AMBER Alert and Internet Crimes Against Children task forces, our office remains committed to assisting communities across the country in protecting the lives and safety of children.”
 
Other speakers included Office of Juvenile Justice and Delinquency Prevention (OJJDP) Administrator Robert L. Listenbee; child protection advocate Heather Bish, whose sister Molly Bish was abducted from her lifeguard job and later found murdered; and John Ryan, president and CEO of the National Center for Missing & Exploited Children.  The nearly 300 ceremony attendees included families of missing children, child advocates and others who support programs to recover missing children.
 
“On this day each year, we pause for a few moments to remember those children who are lost and the families who have been torn apart apart by this unspeakable tragedy,” said  OJJDP Administrator Robert L. Listenbee. “We are also here today to celebrate those children and families who have been reunited and to honor the dedicated citizens who work tirelessly to bring these missing children home.”
 
During the ceremony, Acting Associate Attorney General West presented the following awards:   Attorney General’s Special Commendation: Recognizes the extraordinary efforts of an Internet Crimes Against Children task force or affiliate agency for making significant investigative or program contributions.  Recipients: Assistant District Attorney Eric R. Bellas, North Carolina’s 25th Prosecutorial District; Det. Scott Carico, Burke County, N.C. Sheriff’s Office; Special Agent Casey Drake, N.C. State Bureau of Investigation; Selena Moretz, Burke County Child Advocacy Center; and Special Agent John D. Wydra, Jr., Federal Bureau of Investigation, whose efforts led to the arrest and conviction of a N.C. elementary school teacher who had been sexually molesting children and videotaping and photographing pornographic images of them for many years.
 
Missing Children’s Law Enforcement Award: Recognizes the extraordinary efforts of a law enforcement officer who made a significant investigative or program contribution to the safety of children.  Recipient: Det. Anjanette Biswell of the Quincy, Ill. Police Department, whose work as a computer forensic specialist led to the arrest and guilty plea of a man who was producing, downloading, and distributing pornographic images of two young relatives and other children in Quincy. 
 
Missing Children’s Citizen Award: Honors the extraordinary efforts of private citizens for their unselfish acts to safely recover missing or abducted children.  Recipients: Brandy V. Hinesly and Casey Quillman, Walmart employees in Aberdeen, Wash., for their quick response that led to the rescue of a missing Arkansas teenager who was about to leave the country with her former boyfriend.
 
Missing Children’s Child Protection Award: Honors the extraordinary efforts of a law enforcement officer who made a significant investigative or program contribution to protect children from abuse or victimization.  Recipient: Assistant U.S. Attorney John Luke Walker for the Western District of Louisiana, who served as the lead prosecutor and a driving force behind Operation Delego, the largest child exploitation case ever prosecuted.  His efforts resulted in more than 29 convictions, including a teacher, a police officer, and a high-ranking member of the military. 
 
Esther Jung, a fifth grader from Edwin Rhodes Elementary School in Chino, Calif., received the award as the 14th winner of the Annual National Missing Children’s Day Art Contest. 
 
President Ronald Reagan proclaimed May 25, 1983, the first National Missing Children’s Day to remember Etan Patz, a six-year-old boy who disappeared from a New York City street corner on May 25, 1979. Missing Children’s Day honors his memory and the memories of children still missing.
 
The Office of Justice Programs (OJP), headed by Acting Assistant Attorney General Mary Lou Leary, provides federal leadership in developing the nation’s capacity to prevent and control crime, administer justice, and assist victims. OJP has six components: the Bureau of Justice Assistance; the Bureau of Justice Statistics; the National Institute of Justice; the Office of Juvenile Justice and Delinquency Prevention; the Office for Victims of Crime; and the Office of Sex Offender Sentencing, Monitoring, Apprehending, Registering, and Tracking. For more information about OJP, please visit: www.ojp.gov.

The Department of Justice today reached a comprehensive agreement with the Missoula, Mont., Police Department to ensure that the police department fairly and effectively responds to reports of sexual assault.  In May 2012, the Justice Department launched an investigation into allegations that the Missoula Police Department was failing to adequately respond to and investigate reports of sexual assault, due to unlawful gender discrimination in violation of the Violent Crime Control and Law Enforcement Act of 1994, and the anti-discrimination provisions of the Omnibus Crime Control and Safe Streets Act of 1968.  The Agreement announced today resolves the Justice Department’s investigation of the Missoula Police Department.  The department also released a letter of findings outlining the results of the investigation.

The agreement with the Missoula Police Department requires that the police department:

• implement or revise policies, provide training and change practices to improve its response to sexual assault, including combating gender bias;
• work with an independent Monitor, community-based organizations and other stakeholders, to develop and implement the reforms described in the agreement, and to evaluate OPS’ success in effecting meaningful reform;
• demonstrate that its implementation of the agreement has eliminated a pattern or practice of constitutional violations and that it has put in place systems and oversight that will prevent patterns or practices of unconstitutional conduct from recurring; and
• develop procedures for gathering and analyzing data to assess the incidence and outcomes of reports of sexual assault.

  The city of Missoula anticipates that it will achieve compliance with this agreement within two years.

 
“A police department cannot truly protect women in its community without being prepared to respond to reports of sexual assault effectively and without bias,” said Roy L. Austin Jr., Deputy Assistant Attorney General for the Civil Rights Division.  “Equal access to the protection of police and the courts is a matter of basic justice.  We commend the City of Missoula and the Missoula Police Department for its cooperation and for taking the steps necessary to maintain women’s safety and promote the community’s confidence in its police response to sexual assault.  The leadership of Mayor Engen and Chief Muir has been indispensable to this process.”

“As the first responder to most reports of sexual assault in Missoula, the Missoula Police Department plays an absolutely critical role in protecting women victims of sexual assault and ensuring that perpetrators of sexual assault are brought to justice,” said Michael Cotter, U.S. Attorney for the District of Montana.  “This agreement will ensure that the department’s officers and detectives are fully prepared to play that role.”

The Justice Department’s review of the Missoula Police Department was one of three simultaneous civil pattern or practice investigations into allegations that law enforcement was systematically failing to protect women victims of sexual assault in Missoula.  Alongside its investigation of the Missoula Police Department, the Justice Department conducted parallel investigations of the Missoula County Attorney’s Office and the University of Montana’s Office of Public Safety.  Last week, the Justice Department and the Department of Education’s Office of Civil Rights entered into twin agreements with the University of Montana to address the university’s response to reports of sexual assault and sexual harassment on campus; those agreements resolved the Justice Department investigation of the university’s Office of Public Safety.  The Justice Department’s investigation of the Missoula County Attorney’s Office is ongoing. 

 
The investigation was conducted jointly by the Special Litigation Section of the Department of Justice’s Civil Rights Division and the U.S. Attorney’s Office for the District of Montana.  The prevention of sex-based discrimination is a top priority of the Justice Department’s Civil Rights Division and U.S. Attorney Offices.  The Civil Rights Division has worked to ensure that women are not subject to discriminatory practices related to police services in New Orleans, Puerto Rico and elsewhere.  Additional information about the Civil Rights Division of the Justice Department is available on its website at www.justice.gov/crt.  Additional information about the U.S. Attorney’s Office for the District of Montana is available on its website at www.justice.gov/usao/mt. 

Attorney General Eric Holder and Acting Assistant Attorney General for the Office of Justice Programs Mary Lou Leary announced several improvements to the Public Safety Officers’ Benefits (PSOB) Program following the completion of a comprehensive review of the program ordered by the Attorney General in May 2012. 

In the coming months, the PSOB office will move to an entirely paperless electronic case management system that will allow claimants to file and monitor the progress of their claims online, in order to improve efficiency, increase timeliness and reduce duplication in its claims administration process.  The PSOB claims process will also be streamlined, consolidating legal and other functions within the Bureau of Justice Assistance (BJA) and eliminating duplicative documentation requirements.  As part of the department’s ongoing efforts to improve the PSOB, BJA will continue to convene its series of stakeholder listening sessions in order to ensure transparency and a positive dialogue between the PSOB Office and its public safety partners in the field. 
        
“These fundamental improvements to the Public Safety Officers’ Benefits Program will help us cut through red tape – and ensure that fallen or injured officers and their families can get the benefits they need in a timely manner,” said Attorney General Holder.  “These improvements are representative of the value that I, the women and men of the Justice Department, and our entire country, must always place on the work of our law enforcement officers. And it’s emblematic of our commitment to standing with all who bravely serve our nation, especially in the toughest of times.”
  
“Over the past five years, the PSOB Office has provided more than $426 million in benefits to fallen police officers, firefighters and other first responders, processing more than 2,857 claims,” said Acting Assistant Attorney General Leary. “But we can do even better.  These improvements will allow BJA to process cases and serve claimants even more efficiently.  We are committed to ensuring that fallen public safety officers and their families get the benefits to which they are entitled under the law in a timely and transparent manner.”

Enacted in 1976, the Public Safety Officers’ Benefits Act allows the Justice Department to recognize the ultimate sacrifice of law enforcement officers, firefighters and other first responders killed in the line of duty by providing a federal benefit to their eligible survivors. BJA’s PSOB Office administers the Death, Disability and Educational Assistance Programs; these benefits assist families who may be struggling with finances in the aftermath of tragedy, as well as officers catastrophically injured in the line of duty and spouses and children seeking educational assistance to attend institutions of higher education. The PSOB Office considers it an honor to assist families and agencies of America’s fallen law enforcement heroes throughout the review of their PSOB cases.

The Office of Justice Programs (OJP), headed by Acting Assistant Attorney General Mary Lou Leary, provides federal leadership in developing the nation’s capacity to prevent and control crime, administer justice and assist victims. OJP has six components: the Bureau of Justice Assistance; the Bureau of Justice Statistics; the National Institute of Justice; the Office of Juvenile Justice and Delinquency Prevention; the Office for Victims of Crime; and the Office of Sex Offender Sentencing, Monitoring, Apprehending, Registering, and Tracking. For more information about OJP please visit: http://www.ojp.gov. To read the Attorney General’s speech at the 25th Annual National Law Enforcement Officers Memorial Candlelight Vigil, please visit: http://www.justice.gov/iso/opa/ag/speeches/2013/ag-speech-130513.html.

Two Spring Hill, Tenn., men pleaded guilty in federal court today for their involvement in a racially-motivated conspiracy to interfere with the housing rights of African-American residents of the Spring Lake subdivision of Spring Hill, the Justice Department announced. Dakota James Calderhead, 20, and Kristian Chancellor Mathis, 19, each pleaded guilty in U.S. District Court in Nashville, Tenn., to one count of conspiracy to deprive a person of his civil rights.

According to their plea agreements, on or about December 30, 2011, Calderhead and Mathis conspired to vandalize homes in the Spring Lake subdivision. Mathis admitted to spray painting a swastika and racial slurs on the driveway of an African-American family’s residence.

Calderhead admitted that he fashioned a noose which Mathis hung from a tree outside of the residence. Calderhead also admitted to hanging a second noose from the driver’s side rearview mirror of the school bus located in front of another African-American family’s residence. Both defendants further admitted that their acts of vandalism were intimidating, and motivated, in part, by the race, color, or ethnicity of the victims.

“These innocent families were targeted and subjected to acts of harassment and intimidation for no other reason than their race,”  said Deputy Assistant Attorney General Roy L. Austin Jr. of the Civil Rights Division. "The Justice Department will continue to vigorously enforce federal laws that guarantee the civil rights of all people.”  

“The U.S. Attorney’s Office and our law enforcement partners remain committed to protecting the civil rights of all persons,” said David Rivera, Acting U.S. Attorney for the Middle District of Tennessee.  “Conduct which seeks to deprive any person of their civil rights will always receive the full attention of this office.”

The defendants face maximum statutory penalties of 10 years in prison. U.S. District Judge Todd J. Campbell has scheduled sentencing for August 21, 2013.

This case was investigated by the Memphis Division, Columbia Resident Agency of the FBI and the Maury County Sherriff’s Department. It is being prosecuted by Senior Litigation Counsel Gerard Hogan and Trial Attorney Ryan Murguía of the Justice Department’s Civil Rights Division and Assistant U.S. Attorney Hal McDonough of the U.S. Attorney’s Office for the Middle District of Tennessee. Assistance was provided by District Attorney Mike Bottoms from the 22nd Judicial District of Tennessee.

A Detroit-area physician pleaded guilty today to making fraudulent referrals for home health care as part of a $1.6 million home health care fraud scheme, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney for the Eastern District of Michigan Barbara L. McQuade, Special Agent in Charge Robert D. Foley III of the FBI’s Detroit Field Office and Special Agent in Charge Lamont Pugh III of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG), Chicago Regional Office.

 
Dr. Sonjai Poonpanij, 82, of Rochester, Mich., pleaded guilty before Senior U.S. District Judge Arthur J. Tarnow in the Eastern District of Michigan to one count of conspiracy to commit health care fraud. 

 
According to court documents, Dr. Poonpanij admitted that beginning in approximately July 2010, he conspired with others to commit health care fraud by referring Medicare beneficiaries for home health care that was not medically necessary and causing false and fraudulent claims to be submitted to Medicare. 

 
Dr. Poonpanij admitted that he saw patients at a psychotherapy center in Flint, Mich., known as New Century Adult Day Program Services LLC, and referred Medicare beneficiaries at New Century to home health care companies – including a home health care company known as Angle’s Touch Home Health Care LLC – even though he knew that those beneficiaries did not qualify for home health care.  According to court documents, Dr. Poonpanij wrote prescriptions for narcotics requested by the beneficiaries in exchange for their enrollment with Angle’s Touch for home health care that they did not need or receive.  In addition to referring patients that he saw at New Century, Dr. Poonpanij also referred beneficiaries whom he had never seen or treated to Angle’s Touch and other home health agencies.  Dr. Poonpanij signed plans of care for these beneficiaries that were used to bill Medicare for services that were either never actually performed or were not performed in the beneficiaries’ homes as required. 

Court documents allege that between September 2008 and September 2012, Dr. Poonpanij caused Angle’s Touch and two other home health agencies to submit claims to Medicare for services that were not medically necessary and/or not provided, which caused Medicare to pay these companies approximately $1,318,954.

At sentencing, scheduled for Aug. 14, 2013, Dr. Poonpanij faces a maximum penalty of 10 years in prison and a $250,000 fine.

 
This case is being prosecuted by Trial Attorney Niall M. O’Donnell of the Criminal Division’s Fraud Section.  It was 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 Eastern District of Michigan.

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,480 defendants who have collectively billed the Medicare program for more than $4.8 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.

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

Steven Kern, of Marine City, Mich., was sentenced to serve one year and one day in prison by U.S. District Court Judge Arthur J. Tarnow in the Eastern District of Michigan, the Justice Department and Internal Revenue Service (IRS) announced. On January 28, 2013, Kern pleaded guilty to an indictment charging him with eight counts of filing false corporate tax returns and eight counts of failing to file his individual income tax returns. 

According to court documents, Kern operated the Kern Chiropractic Center in Marine City. From 2003 through 2010, Kern filed false corporate returns for Kern Chiropractic that did not include as gross receipts cash and check payments that Kern diverted from the business for his own personal use. During the same years, Kern failed to file individual tax returns, despite earning more $1.2 million in gross income during that time period. F iled court documents and court proceedings further established that Kern has not filed an individual federal income tax return since 2002 and told IRS – Criminal Investigation special agents he believed signing and filing a completed individual federal tax return was a violation of his constitutional rights.

Assistant Attorney General for the Justice Department’s Tax Division Kathryn Keneally commended the efforts of special agents of IRS – Criminal Investigation in investigating the case and Tax Division Trial Attorneys Mark McDonald and Jeff Bender for prosecuting the case.

Attorney General Eric Holder and Department of Health and Human Services (HHS) Secretary Kathleen Sebelius announced today that a nationwide takedown by Medicare Fraud Strike Force operations in eight cities has resulted in charges against 89 individuals, including doctors, nurses and other licensed medical professionals, for their alleged participation in Medicare fraud schemes involving approximately $223 million in false billings. 

Attorney General Holder and Secretary Sebelius were joined in the announcement by Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, FBI Assistant Director Ron Hosko, Inspector General Daniel R. Levinson of the HHS Office of Inspector General (HHS-OIG) and Deputy Administrator and Director of Centers for Medicare & Medicaid Services (CMS) Center for Program Integrity Peter Budetti. 

This coordinated takedown was the sixth national Medicare fraud takedown in Strike Force history.  In total, almost 600 individuals have been charged in connection with schemes involving almost $2 billion in fraudulent billings in these national takedown operations alone. 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 their inception in March 2007, Strike Force operations in nine locations have charged more than 1,500 defendants who collectively have falsely billed the Medicare program for more than $5 billion.  In addition, CMS, working in conjunction with HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

The joint Department of Justice and HHS Medicare Fraud Strike Force is a multi-agency team of federal, state and local investigators designed to combat Medicare fraud through the use of Medicare data analysis techniques and an increased focus on community policing.  Approximately 400 law enforcement agents from the FBI, HHS-OIG, multiple Medicaid Fraud Control Units and other state and local law enforcement agencies participated in the takedown. 

“Today’s announcement marks the latest step forward in our comprehensive efforts to combat fraud and abuse in our health-care systems,” said Attorney General Holder.  “These significant actions build on the remarkable progress that the HEAT has enabled us to make – alongside key federal, state, and local partners – in identifying and shutting down fraud schemes.  They are helping to deter would-be criminals from engaging in fraudulent activities in the first place. And they underscore our ongoing commitment to protecting the American people from all forms of health-care fraud, safeguarding taxpayer resources and ensuring the integrity of essential health-care programs.”

“The Affordable Care Act has given us additional tools to preserve Medicare and protect the tens of millions of Americans who rely on it each day,” said Secretary Sebelius.  “By expanding our authority to suspend Medicare payments and reimbursements when fraud is suspected, the law allows us to better preserve the system and save taxpayer dollars.  Today we’re sending a strong, clear message to anyone seeking to defraud Medicare: You will get caught and you will pay the price. We will protect a sacred trust and an earned guarantee.”

The defendants charged are accused of various health care fraud-related crimes, including conspiracy to commit health care fraud, violations of the anti-kickback statutes and money laundering.  The charges are based on a variety of alleged fraud schemes involving various medical treatments and services, primarily home health care, but also mental health services, psychotherapy, physical and occupational therapy, durable medical equipment (DME) and ambulance services. 

According to court documents, the defendants allegedly participated in schemes to submit claims to Medicare for treatments that were medically unnecessary and often never provided.  In many cases, court documents allege that patient recruiters, Medicare beneficiaries and other co-conspirators were paid cash kickbacks in return for supplying beneficiary information to providers, so that the providers could then submit fraudulent billing to Medicare for services that were medically unnecessary or never performed.  Collectively, the doctors, nurses, licensed medical professionals, health care company owners and others charged are accused of conspiring to submit a total of approximately $223 million in fraudulent billing.

“We have made it part of our core mission at the Department of Justice to hold accountable those who steal from the Medicare program to line their own pockets,” said Acting Assistant Attorney General Raman.  “There are Medicare fraudsters in prisons across the country – some who will be there for decades – who can attest to our determination, and our effectiveness.”

“We all feel the effects of health care fraud,” said FBI Assistant Director Hosko. “It leads to higher health care costs and makes it harder for seniors and those who are ill to get the care they need.  The FBI and our law enforcement partners are committed to preventing and prosecuting health care fraud at all levels.  But we need the public’s help.  Take the time to be aware of fraud and call law enforcement if you see anything suspicious included in the billings to your insurance, Medicare, or Medicaid or have any unusual encounters with health care providers.  We can work together to ensure your hard-earned dollars are used to care for the sick and not to line the pockets of criminals.”

“Taxpayers expect us to work harder and smarter, and that is exactly what happened across the nation today,” said HHS Inspector General Levinson. “In addition to the work of my agents and other federal, state, and local law enforcement officials, investigators from nine other IG offices joined us today.  Working together we can break down silos, pool expertise, reduce costs, and the successful result speaks for itself.” 

“Today’s takedown is the result of dedicated commitment to working with our law enforcement partners to root out fraud in the Medicare program,” said CMS Program Integrity Deputy Administrator Budetti.  “This collaboration has been strengthened by the Affordable Care Act, which provided CMS with the tools it needs to stop the flow of money while working to rid our programs of fraud, waste and abuse.”

In Miami, a total of 25 defendants, including two nurses, a paramedic and a radiographer, were charged today and yesterday for their participation in various fraud schemes involving a total of $44 million in false billings for home health care, mental health services, occupational and physical therapy, DME and HIV infusion.  In one case, three defendants were charged for participating in a $20 million home health fraud scheme involving a home health agency, Trust Care Health Services.  Court documents allege that the defendants bribed Medicare beneficiaries for their Medicare information, which was used to bill for home health services that were not rendered or that were not medically necessary.  According to court documents, the lead defendant spent much of the money from the scheme, and purchased multiple luxury vehicles, including two Lamborghinis, a Ferrari and a Bentley. 

Eleven individuals were charged by the Baton Rouge Strike Force.  Five individuals were charged today, including two doctors, in New Orleans by the Baton Rouge Strike force for participating in a different $51 million home health fraud scheme.  According to court documents, the defendants recruited beneficiaries, offering cash and other incentives in exchange for their Medicare information, which was used to bill medically unnecessary home health services. The Baton Rouge Strike Force also announced a superseding indictment and an information charging six individuals, including another doctor, with over $30 million in fraud in connection with a community mental health center called Shifa Texas.  These charges come on top of charges brought against the owners and operators of Shifa Baton Rouge, a related community mental health center which is at the center of an alleged $225 million scheme charged in an earlier indictment. 

In Houston, two individuals, including a nurse and a social worker, were charged today with fraud schemes involving at total of $8.1 million in false billings for home health care.  The defendants, who are brother and sister, allegedly used patient recruiters to obtain Medicare beneficiary information that they then used to bill for services that were not medically necessary and not provided.

Thirteen defendants were charged in Los Angeles for their roles in schemes to defraud Medicare of approximately $23 million.  In one case, three individuals allegedly billed Medicare for more than $8.7 million in fraudulent billing for DME. According to the indictment, the defendants allegedly paid illicit kickbacks to patient recruiters to bribe beneficiaries to participate in the scheme. Once the individuals provided their Medicare information to recruiters, doctors and medical clinics conspiring with the defendants allegedly wrote prescriptions for medically unnecessary power wheelchairs, which they sold to the defendants for illegal kickbacks.

In Detroit, 18 defendants, including two doctors, a physician’s assistant and two therapists, were charged for their roles in fraud schemes involving approximately $49 million in false claims for medically unnecessary services, including home health, psychotherapy and infusion therapy.  In one case, three individuals were charged in a $12 million scheme where they allegedly held themselves out to be licensed physicians – which they were not – and signed prescriptions for drugs and documents about purported psychotherapy they provided.

In Tampa, nine individuals were charged in a variety of schemes, ranging from pharmacy fraud health care-related money laundering. In one case, four individuals were charged for their alleged roles in establishing and operating four supposed healthcare clinics in Tampa, Fl. – Palmetto General Health Care Inc., United Healthcare Center Inc., New Imaging Center Inc. and Lord Physical Rehabilitation Center Inc. – which they allegedly used to steal more than $2.5 million from Medicare for surgical procedures that were never performed.  The defendants allegedly billed Medicare for surgical procedures used to treat patients with high blood pressure by collapsing veins in the legs, but they did not actually perform the procedures.    

In Chicago, seven individuals were charged, including two doctors, with a variety of health care fraud schemes. 

In Brooklyn, N.Y., four individuals, including two doctors, were charged in fraud schemes involving $9.1 million in false claims. In one case, three additional individuals were allegedly involved in what is now alleged to be a $15 million scheme where massages by unlicensed therapists were billed to Medicare as physical therapy.  Six defendants were previously charged in the scheme.
 
The cases announced today are being prosecuted and investigated by Medicare Fraud Strike Force teams comprised of attorneys from the Fraud Section of the Justice Department’s Criminal Division and from the U.S. Attorney’s Offices for the Southern District of Florida, the Eastern District of Michigan, the Eastern District of New York, the Southern District of Texas, the Central District of California, the Middle District of Louisiana; the Northern District of Illinois, and the Middle District of Florida; and agents from the FBI, HHS-OIG and state Medicaid Fraud Control Units.

An indictment is merely a charge and defendants are presumed innocent until proven guilty.

To learn more about HEAT, go to: www.stopmedicarefraud.gov.

A federal grand jury in Nevada today returned an indictment against a former construction company owner for evading federal income and employment taxes, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, Internal Revenue Service-Criminal Investigation (IRS-CI) Chief Richard Weber, FBI Acting Special Agent in Charge William C. Woerner of the Las Vegas Field Office, and Sheriff Doug Gillespie of the Las Vegas Metropolitan Police Department.

Leon Benzer, 46, of Las Vegas, was charged in U.S. District Court in the District of Nevada with two counts of tax evasion.

In January 2013, Benzer was indicted in a related case on charges of wire fraud and conspiracy to commit wire and mail fraud.  According to court documents, from approximately August 2003 through February 2009, Benzer orchestrated a scheme to direct construction defect litigation and repairs at condominium complexes to a conspiring law firm and Benzer’s construction company, Silver Lining Construction (SLC).  As a result of this scheme, the indictment alleges that SLC was awarded a contract worth over $7 million for work at the Vistana Homeowner’s Association (Vistana HOA) in Las Vegas.  The case is pending.

According to the indictment returned today, in August 2006 Benzer filed five years’ worth of personal tax forms and business tax returns without any payments accompanying those returns.  As of April 2007, Benzer had allegedly failed to pay his personal tax liability of approximately $459,000 and SLC’s employment tax liability of approximately $687,000 and unemployment tax liability of approximately $18,000.  In May 2007, the IRS issued a notice of intent to file a levy; Benzer subsequently appealed this process and indicated that he wanted to enter into an “offer-in-compromise” with the IRS to pay a portion of what was owed in full satisfaction of all his tax liabilities.  According to the indictment, during this offer-in-compromise process, the IRS requested detailed financial information from Benzer.

Between March 2005 and January 2008, the indictment alleges that Benzer and SLC received over $7 million from the Vistana HOA contract, including a wire transfer of over $1 million on Sept. 21, 2007, to a personal US Bank account that Benzer opened in August 2007. The indictment alleges that when Benzer filed certain IRS forms related to the offer-in-compromise process on Sept. 25, 2007, he failed to disclose this personal U.S. Bank account or the assets contained in it.

The maximum prison sentence for each count of tax evasion is five years in prison and a maximum fine of $100,000.

The charges and allegations against the indicted defendant are merely accusations, and the defendant is considered innocent unless and until proven guilty.

The case is being prosecuted by Senior Deputy Chief Kathleen McGovern, Deputy Chief Charles La Bella and Trial Attorney Thomas B.W. Hall of the Criminal Division’s Fraud Section.  The case is being investigated by IRS-CI, the FBI and the Las Vegas Metropolitan Police Department, Criminal Intelligence Section.

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

ALICIA A.G. LIMTIACO, United States Attorney for the Districts of Guam and the Northern Mariana Islands, announced the guilty verdict of JIAN BING WU yesterday in the United States District Court for Guam. The jury found WU guilty of conspiracy to commit marriage fraud and marriage fraud, based on his fraudulent marriage to Lynda Kathryn Laracuente for an immigration benefit. The charges stem from an Indictment filed on August 22, 2012 against WU and Bradley Jiblits.

The guilty verdict is the result of a six-day jury trial in front of Chief Judge Francis Tydingco-Gatewood. The jury found WU guilty of Count One, Conspiracy to Commit Marriage Fraud, in violation of 18, United States Code, Section 371, and Count Two, Marriage Fraud, in violation of Title 8, United States Code, Section 1325(c). Three co-defendants in related cases pleaded guilty previously and are awaiting sentencing. Defendant Jiblits entered his guilty plea to Conspiracy to Commit Marriage Fraud on November 28, 2012. Lynda Kathryn Laracuente pleaded guilty to Marriage Fraud on November 4, 2011, and Yingzi Zhang pleaded guilty to Aiding and Abetting False Statements on May 3, 2013.

WU’s sentencing hearing is scheduled for August 22, 2013. He faces a statutory maximum penalty of five years imprisonment and a maximum fine of $250,000.

U.S. Attorney Limtiaco stated, “Our immigration laws allow aliens who enter into legitimate marriages with U.S. citizens to gain the right to stay in the United States as permanent resident legal aliens. But aliens who engage in sham marriages to gain legal status in this country, and anyone who helps them to do so, undermine the integrity of that system and commit a fraud against the United States.”

The case was investigated by the Homeland Security Investigations. The case was prosecuted by Assistant United States Attorney Stephen F. Leon Guerrero and First Assistant United States Attorney Stephen P. Sinnott.

WASHINGTON – A former program coordinator at the defunct health provider Health Care Solutions Network Inc. (HCSN) was sentenced in Miami to 70 months in prison today for her role in a $63 million fraud scheme.

 
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida; 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, made the announcement after sentencing by U.S. District Judge Cecilia M. Altonaga.

Dana Gonzalez, 43, of High Point, N.C., pleaded guilty on March 6, 2013, to conspiracy to commit health care fraud. In addition to the prison sentence, Gonzalez was also sentenced to three years of supervised release and ordered to pay $19,428,120 in restitution.

During the course of the conspiracy, Gonzalez was employed as a therapist and program coordinator of HCSN’s Partial Hospitalization Program (PHP).  A PHP is a form of intensive treatment for severe mental illness.

According to court documents, HCSN of Florida (HCSN-FL) operated community mental health centers at two locations.  Gonzalez was aware that HCSN-FL paid illegal kickbacks to owners and operators of Miami-Dade County Assisted Living Facilities (ALF) in exchange for patient referral information to be used to submit false and fraudulent claims to Medicare and Medicaid. 

Gonzalez admitted that she routinely fabricated medical records for purported mental health treatment that were used to support false and fraudulent claims to health care benefit programs, including Medicare and Medicaid.  Gonzalez admitted that she routinely fabricated these medical records, despite knowing that many of the ALF referral patients were ineligible for PHP services because many patients suffered from mental retardation, dementia and Alzheimer's disease.  Gonzalez, an unlicensed clinical social worker intern at the time, also admitted to providing unlicensed therapy to PHP patients when licensed therapists were absent.

In total, Gonzalez admitted that during her employment at HCSN, she and her co-conspirators submitted approximately $46,959,975 in false and fraudulent claims. According to court documents, from 2004 through 2011, HCSN billed Medicare and the Florida Medicaid program approximately $63 million for purported mental health services.

This case was 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 was prosecuted by Trial Attorney Allan J. Medina and former Special Trial Attorney William J. Parente of the Criminal Division’s Fraud Section. In support of the Medicare Fraud Strike Force, the FBI Criminal Investigative Division’s Financial Crimes Section has funded the Special Trial Attorney position.

 
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,480 defendants who have collectively billed the Medicare program for more than $4.8 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.

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

Safieh Fard, 52, of Escondido, Calif., was sentenced late yesterday to 63 months in prison by U.S. District Judge Cormac J. Carney. Fard was also ordered to pay $594,000 in restitution to the Internal Revenue Service (IRS) for unpaid individual income taxes. Assistant Attorney General for the Justice Department’s Tax Division Kathryn Keneally, U.S. Attorney Andre Birotte Jr., and the IRS made the announcement.

Fard was convicted by a Santa Ana, Calif., jury on Nov. 21, 2012, of one count of conspiracy to defraud the IRS and one count of conspiracy to launder the proceeds of bank fraud. Fard’s co-conspirators, her sister Sedigheh Bahramian, and two of her sons, Mohsen Kikalaye and Ahmad Kikalaye, pleaded guilty and were sentenced to related counts of bank fraud in 2010.

According to the indictment and evidence introduced at trial, starting in 1997 and continuing through 2004, Fard and her co-conspirators purchased valuable residential real estate properties, including numerous beachfront properties in Newport Beach, Calif. To obtain mortgages to purchase these properties, Fard and her co-conspirators provided false information to federally insured banks that substantially overstated their income and assets on mortgage applications. Fard submitted mortgage applications that falsely stated she earned over $40,000 per month, despite claiming no taxable income on her federal income tax returns during the eight year conspiracy.

Evidence introduced at trial established that Fard and her co-conspirators bought, sold, and transferred ownership of the properties between and among themselves. Ultimately, the properties were sold to third parties resulting in substantial monetary gain. Fard and her co-conspirators then failed to report capital gains on more than $3.7 million from these sales on their federal income tax returns.

The evidence further established that Fard and her co-conspirators Mohsen Kikalaye and Ahmad Kikalaye sold Newport Beach properties to unrelated third parties and received the proceeds in a large lump-sum payment by either wire transfer or check. Fraud proceeds were then transferred through multiple bank accounts to an account in the name of Fard’s co-conspirator Ahmad Kikalaye, who withdrew proceeds in cash in amounts slightly below the $10,000 federal reporting requirement. Fraud proceeds were also used to buy new real estate properties.

The case was investigated by special agents from IRS - Criminal Investigation and the Department of Homeland Security - Homeland Security Investigations and prosecuted by Tax Division Trial Attorneys Erin S. Mellen and Mark L. Williams, with valuable support from the U.S. Attorney’s Office in Santa Ana, Calif.

Robert David Forsyth, of Las Vegas, was sentenced late Friday in U.S. District Court in Las Vegas to 27 months in prison for income tax evasion and failing to file income tax returns, the Justice Department and the Internal Revenue Service (IRS) announced. He was also sentenced to 3 years of supervised release and ordered to pay $306,171. Forsyth was indicted in April 2012 and pleaded guilty to the indictment on April 22, 2013.

According to court documents, from 1999 through 2008, Forsyth worked as a physician and earned income from a variety of sources, including his medical practice, expert witness fees, and, beginning in 2002, Social Security benefits. Forsyth, however, failed to file an individual income tax return from 1999 through 2008. In fact, according to the indictment, Forsyth has not filed an income tax return since the 1994 tax year.

Court documents further established that instead of filing tax returns and paying his taxes, Forsyth, a Canadian citizen and U.S. permanent resident alien, closed all of his personal bank accounts and used a third party business to cash his paychecks. He made extensive use of cash including using cash to pay personal expenses in an effort to avoid detection. Throughout the years that Forsyth evaded payment of his taxes, he used income that he earned to fund his own lifestyle. Instead of paying the IRS, Forsyth spent money on gambling, luxury items, and hotel accommodations in San Jose, Calif., Costa Rica and Bangkok.

Assistant Attorney General Keneally commended the efforts of special agents from IRS-Criminal Investigation, who investigated the case, and Tax Division Trial Attorney Mark L. Williams, who prosecuted the case.

The Justice Department announced today that the Civil Rights Division will monitor the election on May 14, 2013, in Douglas County, Neb. The monitoring will ensure compliance with the Voting Rights Act of 1965 and other federal voting rights statutes.  The Voting Rights Act prohibits discrimination in the election process on the basis of race, color or membership in a minority language group.

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

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

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

The Department of Justice announced today the filing of a lawsuit against Niagara County, N.Y., alleging that Niagara County discriminated against Carisa Boddecker, a corrections officer with the Niagara County Sheriff’s Department, when it forced her to take a leave of absence during her pregnancy. According to the complaint, Niagara County’s actions were a 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, including pregnancy, as well as race, color, national origin and religion.

The suit, filed in the U.S. District Court for the Western District of New York in Buffalo, N.Y., alleges that Boddecker informed her employer of her pregnancy and requested an assignment with no inmate contact, as she was entitled to do under her employer’s pregnancy policy. However, according to the complaint, Niagara County failed to follow its own policy regarding assignments for pregnant corrections officers and also failed to provide the same accommodations to Boddecker that it had provided to corrections officers with other temporary medical disabilities. Instead, Niagara County placed Boddecker on an involuntary leave of absence and allowed her to return to work only after she filed a complaint of discrimination with the Equal Employment Opportunity Commission (EEOC). The United States’ complaint seeks a court order requiring Niagara County to develop and implement policies that would prevent its employees from being subjected to discrimination based upon sex. The United States also seeks monetary relief for Boddecker to compensate her for the damages she sustained as a result of the alleged discrimination.

Boddecker originally filed a charge of sex discrimination with the EEOC, whose Buffalo 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.

“Employers must provide pregnant women with the same accommodations they provide to employees who are not pregnant but who are similarly able or unable to work,” said Jocelyn Samuels, Principal Deputy Assistant Attorney General for the Civil Rights Division. “Women should not have to choose between their pregnancies and their jobs, and the Civil Rights Division will continue to vigorously enforce the right of pregnant employees to be free of discrimination in the workplace.”

The continued 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 .

Related Materials:

Niagara County Complaint

Michael George Fitzpatrick, 51, of Hope, Idaho, was sentenced to 42 months in prison by U.S. District Judge Larry A. Burns, the Justice Department and Internal Revenue Service (IRS) announced today. Fitzpatrick was also ordered to serve three years super vised released and to pay just under $1.4 million in restitution to the IRS for unpaid individual and corporate federal income taxes.

Fitzpatrick was convicted of two counts of tax evasion in January 2013 by a Coeur d’Alene, Idaho, jury. A previous jury had convicted him in September 2012 on two counts of failure to file corporate income tax returns but was unable to reach verdicts on the tax evasion counts. Fitzpatrick was remanded into custody immediately after the second trial.

According to the indictment and evidence introduced at both trials, Fitzpatrick operated a business selling products which purported to help individuals eliminate credit card debt. During 2003 and 2004, gross sales from the business, operating under the names Dynamic Solutions Inc. (DSI) and North American Educational Services Inc. (NAES), exceeded $9 million. At trial the government proved the corporations failed to report $3.7 million and Fitzpatrick himself failed to report over $500,000 in income, resulting in a total tax loss of $1,397,762.

The evidence further established that Fitzpatrick last filed an individual income tax return in 1996. At trial, Fitzpatrick argued at length that the income tax laws did not apply to him. However, the evidence showed he expended significant time and expense to put all of his property in the names of nominees.

The evidence at trial also established Fitzpatrick sent over $5 million offshore to a bank located in the Dominican Republic. Fitzpatrick accessed this money through the use of a debit card and through wire transfers. During this two-year period Fitzpatrick used over $1 million of his money hidden offshore to buy real estate and to gamble in Las Vegas on nine separate trips to the Bellagio Casino. He also paid a contractor to build a schoolhouse for his kids in his backyard in Hope, Idaho.

“This case sends a strong message that those who defy our nation's tax laws will be investigated and prosecuted to the fullest extent of the law,” said Assistant Attorney General for the Justice Department’s Tax Division Kathryn Keneally. “The sentence imposed today demonstrates that anyone who attempts to evade taxes by hiding assets in offshore bank accounts faces significant time in prison for these crimes.”

“Paying taxes is a solemn obligation of citizenship,” said U.S. Attorney Wendy J. Olson. “Mr. Fitzpatrick’s conviction and sentence make clear that those who try to hide income or knowingly and falsely claim that the income tax laws do not apply to them will be prosecuted and ordered to pay. I commend the fine work of the Tax Division lawyers and the IRS criminal investigators in this case.”

“The license to run a business is not a license to avoid paying taxes,” said IRS Criminal Investigation Chief Richard Weber. “Today, Mr. Fitzpatrick has been held accountable for his actions of dodging his legal tax responsibilities to report all his income and pay his fair share of taxes. No one should doubt that IRS is committed to pursuing people hiding income offshore.”

Assistant Attorney General for the Justice Department’s Tax Division Kathryn Keneally and U.S. Attorney Olson thanked special agents from the Boise, Idaho, and Seattle offices of IRS Criminal Investigation, who investigated the case, and Tax Division Trial Attorneys Lori A. Hendrickson, Christopher P. O’Donnell, and Erin S. Mellen, who prosecuted the case with valuable support from the U.S. Attorney’s Offices in Boise and Coeur d’Alene.

Aurelio Cano Flores, a Mexican national and high ranking member of the Gulf Cartel, was sentenced today to serve 35 years in prison for conspiring to import multi-ton quantities of cocaine and marijuana into the United States, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and Administrator Michele M. Leonhart of the Drug Enforcement Administration (DEA). 

Cano Flores, 40, aka “Yankee” and “Yeyo,” was sentenced by U.S. District Judge Barbara J. Rothstein in the District of Columbia.  In addition to his prison term, Cano Flores was ordered to forfeit $15 billion in drug proceeds as part of a money judgment.  At a post-trial hearing, the United States proved that from 2000 to 2010, the Gulf Cartel distributed in excess of 1.4 million kilograms of cocaine and 8,000 metric tons of marijuana.  The money judgment represents the gross receipts of the Gulf Cartel’s drug sales into the United States from its principal distribution centers located along the U.S.-Mexico border.

“For over a decade, Aurelio Cano Flores worked with some of the most dangerous criminals in the world to import massive quantities of cocaine and marijuana into the United States,” said Acting Assistant Attorney General Raman.  “As a leader of the Gulf Cartel, one of the most notorious criminal enterprises in Mexico or the United States, he endangered the lives of innocent people on both sides of the border.  As a result of today’s sentencing, he will spend 35 years in federal prison as punishment for his crimes.”

“DEA and its partners use every law enforcement tool possible to bring to justice drug cartel leaders and facilitators who inflict damage on both sides of the border,” said DEA Administrator Leonhart.  “Aurelio Cano-Flores used his position as a Mexican police officer to help one of the most violent and brutal drug trafficking organizations in the world bring vast amounts of drugs into the United States.  Like many other cartel leaders, he posed a threat to the citizens of both the United States and Mexico.  We are confident and pleased that justice was served today by the pronouncement of his lengthy U.S. prison sentence."

Following a trial that lasted over two weeks, Cano Flores was convicted by a federal jury on Feb. 26, 2013, of one count of conspiracy to distribute five kilograms or more of cocaine and 1,000 kilograms or more of marijuana, knowing and intending the substances would be unlawfully imported into the United States. 

Cano Flores was one of 19 defendants charged in a superseding indictment on Nov. 4, 2010, with drug trafficking offenses.  He was extradited to the United States from Mexico in August 2011 and was ordered detained in federal custody pending trial.  

Evidence presented at trial included dozens of lawfully intercepted telephone conversations between Cano Flores and other leaders of the Gulf Cartel, as well as testimony from previously convicted Cartel members.  According to the trial evidence, Cano Flores began working for the Gulf Cartel in approximately 2001, while he was serving as a police officer in Mexico.  During his time as a police officer, Cano Flores recruited others into the Gulf Cartel, collected drug money and escorted large shipments of cartel drugs to the U.S. border. 

Cano Flores ultimately rose through the ranks of the Gulf Cartel to become a major transporter of narcotics within Mexico to the U.S. border and became the Cartel’s top representative in the important border town of Los Guerra, Tamaulipas, Mexico.  As the “plaza boss” for Los Guerra, Cano Flores oversaw the mass distribution of cocaine and marijuana into the United States on a daily basis.  Testimony established that between 2000 and 2010, the Gulf Cartel grew from an organization of only 100 members controlling three border towns to an organization of 25,000 people controlling the drug trade over approximately half of Mexico.  As established during the trial, the means and methods of this conspiracy included corruption, murder, kidnapping and intimidation.

The case was prosecuted by Trial Attorneys Darrin McCullough and Sean Torriente of the Criminal Division’s Narcotic and Dangerous Drug Section.  The Criminal Division’s Office of International Affairs provided significant assistance in the provisional arrest and extradition of Cano Flores, and the Asset Forfeiture and Money Laundering Section provided assistance at sentencing.  The investigation in this case was led by the DEA Houston Field Division’s Organized Crime Drug Enforcement Strike Force and the DEA Bilateral Investigation Unit.  The case was part of the Organized Crime Drug Enforcement Task Force’s Operation “Day of Reckoning.” 

In the largest drug safety settlement to date with a generic drug manufacturer, Ranbaxy USA Inc. , a subsidiary of Indian generic pharmaceutical manufacturer Ranbaxy Laboratories Limited, pleaded guilty today to felony charges relating to the manufacture and distribution of certain adulterated drugs made at two of Ranbaxy’s manufacturing facilities in India, the Justice Department announced today. Ranbaxy also agreed to pay a criminal fine and forfeiture totaling $150 million and to settle civil claims under the False Claims Act and related State laws for $350 million.

The federal Food, Drug and Cosmetic Act (FDCA) prohibits the introduction or delivery for introduction into interstate commerce of any drug that is adulterated. Under the FDCA, a drug is adulterated if the methods used in, or the facilities or controls used for, its manufacturing, processing, packing, or holding do not conform to, or are not operated or administered in conformity with, current Good Manufacturing Practice (cGMP) regulations. This assures that a drug meets the requirements as to safety and has the identity and strength, and meets the quality and purity characteristics, which the drug purports or is represented to possess.

Ranbaxy USA pleaded guilty to three felony FDCA counts, and four felony counts of knowingly making material false statements to the FDA. The generic drugs at issue were manufactured at Ranbaxy’s facilities in Paonta Sahib and Dewas, India. Under the plea agreement, the company will pay a criminal fine of $130 million, and forfeit an additional $20 million.

“When companies sell adulterated drugs, they undermine the integrity of the FDA’s approval process and may cause patients to take drugs that are substandard, ineffective, or unsafe,” said Stuart F. Delery, Acting Assistant Attorney General for the Civil Division of the Department of Justice.  “We will continue to work with our law enforcement partners to ensure that all manufacturers of drugs approved by the FDA for sale in the United States, both domestic and foreign, follow the FDA guidelines that protect all of us.”

“This is the largest false claims case ever prosecuted in the District of Maryland, and the nation’s largest financial penalty paid by a generic pharmaceutical company for FDCA violations,” said U.S. Attorney for the District of Maryland Rod J. Rosenstein.  “The joint criminal and civil settlement, which reflects many years of work by FDA agents and federal prosecutors, holds Ranbaxy accountable for a pattern of violations and should improve the reliability of generic drugs manufactured in India by Ranbaxy.”

Ranbaxy USA admitted to introducing into interstate commerce certain batches of adulterated drugs that were produced at Paonta Sahib in 2005 and 2006, including Sotret, gabapentin, and ciprofloxacin. Sotret is Ranbaxy’s branded generic form of isotretinoin, a drug used to treat severe recalcitrant nodular acne; gabapentin is a drug used to treat epilepsy and nerve pain; ciprofloxacin is a broad-spectrum antibiotic. In a Statement of Facts filed along with the Information, Ranbaxy USA acknowledged that FDA’s inspection of the Paonta Sahib facility in 2006 found incomplete testing records and an inadequate program to assess the stability characteristics of drugs. “Stability” refers to how the quality of a drug varies with time under the influence of a variety of factors, such as temperature, humidity, and light.  Such testing is used to determine appropriate storage conditions and expiration dates for the drug, as well as to detect any impurities in the drug. 

Ranbaxy also acknowledged that the FDA’s 2006 and 2008 inspections of the Dewas facility found the same issues with incomplete testing records and an inadequate stability program, as well as significant cGMP deviations in the manufacture of certain active pharmaceutical ingredients and finished products. Ranbaxy USA also acknowledged that in 2003 and 2005 the company was informed of cGMP violations by consultants it hired to conduct audits at the Paonta Sahib and Dewas facilities. Those cGMP violations resulted in the introduction into interstate commerce of some adulterated drugs.

Ranbaxy USA further admitted to failing to timely file required reports known to FDA as “field alerts” for batches of Sotret and gabapentin that had failed certain tests. With respect to Sotret, Ranbaxy USA was aware in January 2003 that a batch of Sotret failed an accelerated dissolution stability test but continued to distribute the batch into the United States for another 13 months. With respect to gabapentin, Ranbaxy USA was aware at various times between June and August 2007 that certain batches of gabapentin were testing out-of-specification, had unknown impurities, and would not maintain their expected shelf life. Nevertheless, Ranbaxy USA did not notify FDA and institute a voluntary recall until October 2007.

Ranbaxy USA also admitted to making false, fictitious, and fraudulent statements to the FDA in Annual Reports filed in 2006 and 2007 regarding the dates of stability tests conducted on certain batches of Cefaclor, Cefadroxil, Amoxicillin, and Amoxicillin and Clavulanate Potassium, which were manufactured at the Dewas facility. Ranbaxy USA was found to have conducted stability testing of certain batches of these drugs weeks or months after the dates reported to FDA. In addition, instead of conducting some of the stability tests at prescribed intervals months apart, the tests were conducted on the same day or within a few days of each other. This practice resulted in unreliable test results regarding the shelf life of the drugs. Ranbaxy USA also acknowledged that drug samples waiting to be tested were stored for unknown periods of time in a refrigerator, which did not meet specified temperature and humidity ranges for an approved stability chamber, and that this was not disclosed to the FDA.

The criminal case is U.S. v. Ranbaxy USA, Inc., JFM-13-CR-0238 (D. Md.).

Under the civil settlement, Ranbaxy has agreed to pay an additional $350 million to resolve allegations that it caused false claims to be submitted to government health care programs between April 1, 2003, and September 16, 2010, for certain drugs manufactured at the Paonta Sahib and Dewas facilities. The United States contends that Ranbaxy manufactured, distributed, and sold drugs whose strength, purity, or quality differed from the drug’s specifications or that were not manufactured according to the FDA-approved formulation. The United States further contends that, as a result, Ranbaxy knowingly caused false claims for those drugs to be submitted to Medicaid, Medicare, TRICARE, the Federal Employees Health Benefits Program, the Department of Veterans Affairs, and the U.S. Agency for International Development (USAID), which administers the U.S. President’s Emergency Plan for AIDS Relief (PEPFAR).

The federal government’s share of the civil settlement amount is approximately $231.8 million, and the remaining $118.2 million will go to the states participating in the agreement.

The civil settlement resolves a lawsuit filed in U.S. District Court for the District of Maryland under the qui tam, or whistleblower, provisions of the False Claims Act, which allow private citizens to bring civil actions on behalf of the United States and share in any recovery. As part of today’s resolution, the whistleblower, Dinesh Thakur, a former Ranbaxy executive, will receive approximately $48.6 million from the federal share of the settlement amount. The case is U.S. ex rel. Thakur v. Ranbaxy Laboratories Limited, Case No. JFM-07-962 (D. Md.).

With the exception of the allegations to which Ranbaxy pleaded guilty in the Criminal Information, there has been no determination of liability as to the claims settled by the civil agreement.

Last year, FDA and Ranbaxy agreed to an injunction that prevents drugs produced at the Paonta Sahib and Dewas facilities from entering the U.S. market until the facilities have been brought into full compliance with the FDCA and its implementing regulations. Since September 16, 2008, when the FDA placed drugs from those facilities on an Import Alert, Ranbaxy has not imported drugs from those facilities into the U.S. In addition, the injunction requires Ranbaxy to review and verify data contained in Ranbaxy’s past drug applications to the FDA. United States v. Ranbaxy Laboratories, Ltd., et al. , Case No. JFM-12-250 (D. Md).

“The FDA expects that companies will comply with the cGMP requirements mandated by law so that consumers can be assured that their medical products are safe and pure,” said John Roth, director of the FDA’s Office of Criminal Investigations. “The investigation that led to this settlement uncovered evidence showing that certain lots of specific drugs produced at the Paonta Sahib facility were defective, in that their strength differed from, or their purity or quality fell below, that which they purported to possess. The FDA and its law enforcement partners will continue to aggressively pursue companies and their executives who erode public confidence in the quality and safety of medical products by distributing products that do not comply with the law.” 

“I would like to express my appreciation for the exceptional work of our investigators and that of their FDA and Department of Justice partners,” said Michael G. Carroll, USAID Deputy Inspector General. “This settlement represents the culmination of years of investigative effort and signals our continuing commitment to the integrity of U.S. government systems and our determination to hold those who seek to defraud or mislead to account.”

The criminal case was prosecuted by the U.S. Attorney’s Office for the District of Maryland and the Civil Division’s Consumer Protection Branch. The civil settlement was negotiated by the U.S. Attorney’s Office for the District of Maryland and the Civil Division’s Commercial Litigation Branch. The case was investigated by agents from the FDA’s Office of Criminal Investigations and USAID’s Office of Inspector General. The FDA’s Office of Chief Counsel, HHS Office of Counsel to the Inspector General, Office of the General Counsel-CMS Division, and the National Association of Medicaid Fraud Control Units also provided assistance.

This criminal and civil resolution is part of the government’s emphasis on combating health care fraud and another step for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced by Attorney General Eric Holder and Kathleen Sebelius, Secretary of the Department of Health and Human Services in May 2009. 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 that effort is the False Claims Act, which the Justice Department has used to recover more than $10.3 billion since January 2009 in cases involving fraud against federal health care programs. The Justice Department’s total recoveries in False Claims Act cases since January 2009 are over $14.3 billion.

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Information
Attachment A
Attachment B
Attachment C

A federal court permanently barred Larry J. Heath, a Cartersville, Ga., area tax preparer who operated Heath’s Income Tax, Heath & Hames Income Tax and Heath’s Income Tax II, from preparing tax returns for others, the Justice Department announced today. The civil injunction order, to which Heath agreed without admitting the allegations against him, was signed by Judge Harold L. Murphy of the U.S. District Court for the Northern District of Georgia. The government’s complaint in the injunction suit was brought against both Larry Heath and his brother, Andrew R. Heath. The case against Andrew Heath remains pending.

The government complaint alleged that Larry Heath and his businesses repeatedly prepared federal tax returns that unlawfully understated customers’ federal tax liabilities. The suit alleged that Larry Heath concocted bogus losses, expenses, education credits, business expenses and charitable contributions, which he falsely reported on his customers’ federal-income-tax returns.

The Internal Revenue Service (IRS) previously suspended Larry Heath’s IRS-issued electronic filing identification number (EFIN) because of the large number of erroneous returns he prepared, according to the complaint. Larry Heath then supposedly “sold” his business to two different women and used their EFINs to continue to file tax returns, the complaint alleged. The injunction applies to the businesses that were purportedly sold, Heath & Hames Income Tax and Heath’s Income Tax II.

Claiming bogus tax refunds is one of the IRS’s Dirty Dozen Tax Scams .

In the past decade, the Justice Department’s Tax Division has obtained injunctions against hundreds of tax fraud promoters and unscrupulous tax preparers. Information about these cases is available on the Justice Department website .

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A Detroit-area adult day care center owner was sentenced today to serve 40 months in prison for billing for unnecessary psychotherapy services, or services that were not provided, as part of a health care fraud conspiracy which led to more than $19 million in fraudulent Medicare billings.

The sentence was announced by Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; U.S. Attorney for the Eastern District of Michigan Barbara L. McQuade; Special Agent in Charge Robert D. Foley III of the FBI’s Detroit Field Office; and Special Agent in Charge Lamont Pugh III of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Chicago Regional Office.

Checarol Robinson, 41, was sentenced by U.S. District Judge Nancy G. Edmunds in the Eastern District of Michigan.  In addition to her prison term, Robinson was sentenced to serve two years of supervised release and was ordered to pay $599,438 in restitution, jointly and severally with her co-defendant, Louisa Thompson, who awaits sentencing following a guilty plea for her role in the scheme.
 
Robinson pleaded guilty on Aug. 2, 2012, to an indictment charging her with one count of conspiracy to commit health care fraud and three counts of health care fraud.

According to Robinson’s admissions during her guilty plea proceeding, Robinson owned group homes where Medicare beneficiaries resided.  In return for payments, Robinson provided these Medicare beneficiaries’ information to a fraudulent psychotherapy company – Caldwell Thompson Manor Inc. – owned by co-conspirator Thompson.  That information was then used to bill Medicare for psychotherapy services that were not provided or were not medically necessary.

Robinson later owned and operated P&C Adult Day Center, which was incorporated in May 2010 and purported to provide psychotherapy services.  Robinson admitted she falsely billed Medicare for individual and group therapy services that were not provided by P&C or were not medically necessary, using the Medicare beneficiaries from her group homes.  Thompson, a licensed social worker and Robinson’s co-conspirator from the scheme at Caldwell Thompson, signed patient charts for psychotherapy services purportedly performed at P&C that were medically unnecessary or never performed.

According to court documents, a total of more than $19 million in false claims were submitted by the co-conspirators throughout the course of the conspiracy.   Evidence presented at today’s sentencing demonstrated that Robinson was responsible for causing the submission of more than $2 million in fraudulent billings.

This case was prosecuted by Assistant Chiefs Gejaa T. Gobena and Catherine K. Dick of the Criminal Division’s Fraud Section, and Assistant U.S. Attorney for the Eastern District of Michigan Philip A. Ross.  It was 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 Eastern District of Michigan.

 Since their inception in March 2007, strike force operations in nine locations have charged more than 1,480 defendants who collectively have falsely billed the Medicare program for more than $4.8 billion.  In addition, the HHS Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

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

A Detroit-area home health care agency owner was sentenced today to 60 months in prison for causing the submission of over $1 million in false and fraudulent billing to Medicare as part of a $13.8 million health care fraud conspiracy.

The sentence was announced by Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; U.S. Attorney for the Eastern District of Michigan Barbara L. McQuade; Special Agent in Charge Robert D. Foley III of the FBI’s Detroit Field Office; and Special Agent in Charge Lamont Pugh, III of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Chicago Regional Office.

According to plea documents, Rehan Khan was an owner of Moonlite Home Care Inc.  As the co-owner of Moonlite, Khan paid and directed the payment of sums to doctors to refer patients for home health care services to Moonlite that were not medically necessary and/or never rendered.  Khan also worked as a physical therapy assistant for several home health agencies in the Detroit area, known as Physicians Choice Home Health Care LLC and First Care Home Health Care LLC.  Khan paid and directed the payment of kickbacks to beneficiaries for Physicians Choice, First Care and Moonlite.  The Medicare beneficiaries sometimes pre-signed forms and visit sheets that were later falsified to indicate that they had received home health services that they had never received.  Other times, the Medicare beneficiaries’ signatures were forged on forms and visit sheets to indicate that they received home health services that they had never received.

               Khan paid and directed the payment of various medical professionals, including nurses, physical therapists, and physical therapy assistants, to create fictitious patient files to document home health services purportedly provided by Moonlite that were never rendered.  Khan also signed fictitious patient files purporting to have given physical therapy services at all three home health care agencies that were in fact never rendered.

                From about January 2011 through about September 2011, Khan submitted or caused the submission of fraudulent claims by Moonlite, for which Medicare paid approximately $891,473. From about January 2009 through about September 2011, Medicare paid approximately $866,512 to Physicians Choice and First Care for fraudulent physical therapy claims based on falsified files and notes signed by Khan.  In total, Khan was responsible for approximately $1,757,985 in false and fraudulent claims to Medicare.

This case was 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 Eastern District of Michigan. The case was prosecuted by Assistant Chief Catherine K. Dick of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Philip A. Ross of the Eastern District of Michigan.

Since their inception in March 2007, strike force operations in nine locations have charged more than 1,480 defendants who collectively have falsely billed the Medicare program for more than $4.8 billion.  In addition, the HHS Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

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

At a hearing today in federal court in the Eastern District of North Carolina, Hysen Sherifi, 29, of Raleigh, N.C., was sentenced by Senior U.S. District Judge W. Earl Britt to life in prison. Sherifi’s co-defendants, Shkumbin Sherifi, 23, and Nevine Aly Elshiekh, 48, were also sentenced to 36 months and 42 months in prison, respectively, both followed by three years of supervised release.

The sentences were announced by John Carlin, Acting Assistant Attorney General for National Security; Thomas G. Walter, U.S. Attorney for the Eastern District of North Carolina; and John Strong, Special Agent in Charge of the FBI Charlotte Division. 

“Today, a convicted terrorist who plotted from his prison cell to behead federal agents and witnesses received the justice he deserved.  As this sentence demonstrates, those who attempt to thwart the judicial process through violence will be prosecuted to the fullest extent of the law.  I thank all those who worked to ensure that Hysen Sherifi’s original terrorist plans against U.S. military personnel and others were derailed, and that his subsequent murder-for-hire plot against those who testified against him was thwarted,” said John Carlin, Acting Assistant Attorney General for National Security.

U.S. Attorney Walker stated, “This case serves as an unfortunate reminder that we must remain ever vigilant in our efforts to detect violent extremists who seek to harm our people and property.”

“Hysen Sherifi, while in prison on a terrorism conviction, hatched a sinister murder for hire plot against the witnesses and FBI agents who helped convict him.   The sentences handed down today send a clear message the FBI and our law enforcement partners will not tolerate attempts to thwart the judicial process,” said FBI Special Agent in Charge Strong.  
 
On Nov. 8, 2012, Hysen Sherifi (Sherifi) was found guilty by a jury of all nine counts of the indictment filed against him.  Sherifi was charged with plotting to kill six witnesses who had testified against him at his 2011 terrorism trial (United States v. Boyd, et al.).  On Nov. 1, 2012, his co-conspirators, Shkumbin Sherifi and Nevine Aly Elshiekh, pleaded guilty to one count of conspiracy to commit murder-for-hire and each testified during the murder-for-hire trial of Sherifi.
 
After his October 2011 terrorism conviction, and while awaiting his sentencing for the same, Sherifi plotted to kill three FBI agents and three government informants who testified at his terrorism trial.  Sherifi sought to kill these individuals as revenge for his conviction; to prevent their testimony at co-conspirator Anes Subasic’s upcoming trial; and to get a new trial for himself.  Sherifi recruited his brother, Shkumbin Sherifi, and Elshiekh, a local school teacher to assist him in his plot.  The Sherifis and Elshiekh then raised money to pay for the murders.
 
In January 2012, Elshiekh met with a government informant whom she believed to be the “middleman” for a hit man in order to discuss the murder plot and possible targets.  Elshiekh then relayed that information to Sherifi during a jail visit.  Sherifi specified that he wanted each target to be beheaded and photographed after the beheading.  At a second meeting with the middleman, Elshiekh confirmed the identity of a government witness to be murdered and made a down payment.  The conspirators then worked together to collect the remaining funds needed to pay for the first murder.  After collecting the funds, the conspirators arranged another series of meetings with the middleman to pay for the murder and get photographic confirmation of the first murder.  On Jan. 22, 2012, the conspirators were all arrested shortly after Shkumbin Sherifi accepted pictures from the supposed middleman, purporting to show a beheaded government witness.
 
On Feb. 21, 2012, a nine-count indictment was filed charging Sherifi, Shkumbin Sherifi, and Elshiekh with conspiracy and aiding and abetting in the attempt to use interstate commerce facilities in the commission of murder-for-hire; conspiracy and aiding and abetting in the attempt to kill another person with intent to retaliate against any person for testimony given by a witness in an official proceeding; and conspiracy and aiding and abetting in the attempt to kill another person with intent to prevent the attendance or testimony of any person in an official proceeding. 
 
The investigation of this case was conducted by the FBI Resident Agencies in Raleigh and Wilmington, N.C., with the assistance of the New Hanover County, N.C., Sheriff’s Office. 
 
The prosecution is being handled by Assistant U.S. Attorneys J. Frank Bradsher and Brian S. Meyers of the U.S. Attorney’s Office for the Eastern District of North Carolina, and Trial Attorney Matthew F. Blue of the Counterterrorism Section in the Justice Department’s National Security Division.

C.R. Bard Inc. has agreed to pay the U nited States $48.26 million to resolve claims that it knowingly caused false claims to be submitted to the Medicare program for brachytherapy seeds used to treat prostate cancer in violation of the False Claims Act. Bard is a New Jersey based corporation that develops, manufacturers, and markets medical products used for a variety of conditions, including prostate cancer.

The settlement requires that Bard pay $48.26 million and it resolves claims relating to Bard’s sale of brachytherapy seeds, a form of radiation therapy, to hospitals. The United States alleged that from 1998 to 2006, Bard provided illegal remuneration to customers and physicians to induce them to purchase Bard’s seeds, in violation of the Anti-Kickback Statute.   The illegal remuneration allegedly took the form of certain grants, guaranteed minimum rebates, conference fees, marketing assistance and/or free medical equipment that Bard paid to customers and/or physicians who used the seeds to perform treatment for prostate cancer.   Hospitals ultimately submitted bills to Medicare for these seeds, which the government alleged were rendered false by Bard’s illegal kickback activity. The government alleged that Bard was liable under the False Claims Act for causing the submission of those false claims.

“This settlement is part of the United States’ on-going effort to comb at  the payment of illegal kickbacks to health care providers,” said Stuart F. Delery, Acting Assistant Attorney General for the Department of Justice’s Civil Division.   “Such illegal payments subvert the medical marketplace and provide an unfair advantage to those who break the law.”

“Illegal kickbacks in any form pervert our health care system, which is designed to insure that health care providers make decisions based solely on what is best for the patient,” said U.S. Attorney for the Northern District of Georgia Sally Quillian Yates.

“We will continue to work with our various law enforcement partners in the pursuit of those who abuse publicly funded health care programs such as Medicare and Medicaid, through criminal prosecutions or civil settlements under the False Claims Act,” stated Mark F. Giuliano, Special Agent in Charge, FBI Atlanta Field Office.   “Such abuses as we’ve seen in this case will not be tolerated.”

“Medicare beneficiaries should never have to question whether treatment recommendations are based on their doctors’ best financial interests rather than their best medical advice,” said Daniel R. Levinson, Inspector General of the U.S. Department of Health and Human Services.  “Companies paying these kickback bribes should expect aggressive investigation and prosecution.”

The civil settlement resolves a lawsuit filed in the U.S. District Court for the Northern District of Georgia by Julie Darity, a former Bard manager for brachytherapy contracts administration under the qui tam, or whistleblower provisions, of the False Claims Act.   United States ex rel. Darity v. C.R. Bard, Inc., et al., Civ. Action No. 1:06-cv-0208-SCJ (N.D. Ga.). Under the False Claims Act, private citizens may bring suit for false claims on behalf of the United States and share in any recovery obtained by the government.   The former manager will receive $10,134,600 as her share of the civil settlement.    

In addition, according to a non-prosecution agreement with the United States, Bard has agreed to pay an additional $2.2 million and to take numerous remedial steps, many of which the company identified and began to implement prior to the criminal investigation, to enhance its corporate compliance program to prevent similar illegal actions in the future.   For example, Bard has agreed to refine its Code of Conduct and other written policies and procedures that promote Bard’s commitment to full compliance with all Federal health care program requirements and to develop an effective program to monitor medical education grants provided by Bard to ensure compliance with those requirements.    
 
The resolutions announced today are part of the government’s emphasis on combating health care fraud and another step for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced by Attorney General Eric Holder and Kathleen Sebelius, Secretary of the Department of Health and Human Services in May 2009.   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 that effort is the False Claims Act, which the Justice Department has used to recover nearly $10.3 billion since January 2009 in cases involving fraud against federal health care programs.  The Justice Department’s total recoveries in False Claims Act cases since January 2009 are over $14.3 billion.

These settlements were the result of a coordinated effort by the U.S. Attorney’s Office for the Northern District of Georgia; the Department of Justice, Civil Division, Commercial Litigation Branch; the FBI and HHS-OIG, in investigating the allegations in this case.