District Not Recorded

The Justice Department announced today that St. Bernard Parish, La., has agreed to a settlement valued at more than $2.5 million to resolve separate lawsuits by the United States and private plaintiffs alleging that the parish sought to restrict rental housing to African Americans in the aftermath of Hurricane Katrina.

 

The United States’ lawsuit alleged, among other things, that the parish: (1) passed a law, known as the permissive use permit ordinance, that prevented homeowners from renting single-family homes in residential zones without first obtaining a permit from the parish; (2) revised its zoning code to reduce dramatically the amount of land available for multi-family apartments; and (3) interfered with individuals’ housing rights. The lawsuit further alleged that these actions were done to limit or deny rental housing to African-Americans in violation of the Fair Housing Act. These actions came on the heels of the parish’s other efforts after Hurricane Katrina to restrict rental housing opportunities, including halting the re-establishment or redevelopment of rental housing and enacting a permit requirement for single-family rentals but exempting renters who were “related by blood” to the homeowners. The parish later rescinded these restrictions.

“The Fair Housing Act is clear that local governments cannot use their zoning and land-use laws to discriminate on the basis of race,” said Eric Halperin, Senior Counsel and Special Counsel for Fair Lending in the Civil Rights Division.  “People should have the freedom to choose where they live, without regard to race, and this innovative settlement will create greater housing opportunities in the New Orleans area.”

“The right of all of our citizens to enjoy fair and equal access to housing opportunities is guaranteed by our laws,” said Dana Boente, U.S. Attorney for the Eastern District of Louisiana.  “The U.S. Department of Justice is committed to fiercely protecting those rights in order to ensure the quality of life all Americans deserve.”

 

“No community has the right to keep people from living in that community because of their race,” said John Trasviña, U.S. Department of Housing and Urban Development (HUD) Assistant Secretary for Fair Housing and Equal Opportunity. “HUD and the Justice Department are committed to taking action against municipalities that violate the Fair Housing Act by instituting discriminatory zoning and other housing practices.”

 

Under the settlement, which still must be approved by the U.S. District Court for the Eastern District of Louisiana, the parish must pay $275,000 to eight aggrieved persons identified by the United States and $15,000 to the United States as a civil penalty, establish a new Office of Fair Housing and hire a fair housing coordinator with a gross annual salary of at least $40,000, spend $25,000 each year in a marketing and advertising campaign to attract renters and developers of multi-family rental housing to the parish, and establish a rental land grant program through which the parish will transfer lands in its possession, free of cost, to qualified persons or entities who are willing to create or rehabilitate housing for rental purposes. The land grant program, which requires the parish to offer lands worth up to $83,000 each year, will last for five years; other programmatic features will last for three. Parish officials must also undergo fair-housing training and provide periodic reports to the United States. In a separate agreement, the parish agreed to pay $1.65 million in compensation, costs and attorneys’ fees to two sets of private plaintiffs.

 

On Jan. 28, 2011, HUD initiated a fair housing complaint against St. Bernard Parish alleging it adopted and implemented zoning ordinances that denied or restricted housing to persons based on their race. HUD demanded the parish rescind two key discriminatory ordinances and on April 8, 2011, the parish complied.  Following its investigation, HUD referred eight complaints from parish homeowners to the Justice Department alleging that the parish’s zoning processes were discriminatory In January 2012 HUD referred the secretary-initiated complaint to the Justice Department as well. The Justice Department conducted its own investigation and filed suit in January 2012.

The federal Fair Housing Act prohibits discrimination in housing based on race, color, religion, national origin, sex, disability and familial status.  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 HUD at 1-800-669-9777.

Related Materials:

St. Bernard Motion for Approval of the Settlement
St. Bernard Settlement

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

Charles Lee Roberts, aka “Jive,” 67, of Beaumont, Texas, pleaded guilty before U.S. District Judge Sim Lake in the Southern District of Texas to one count of conspiracy to participate in racketeering activity. 

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

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

According to the superseding indictment, the ABT was established in the early 1980s within the Texas prison system.  The gang modeled itself after and adopted many of the precepts and writings of the Aryan Brotherhood, a California-based prison gang that was formed in the California prison system during the 1960s.  According to the superseding indictment, previously, the ABT was primarily concerned with the protection of white inmates and white supremacy/separatism.  Over time, the ABT expanded its criminal enterprise to include illegal activities for profit.

Court documents allege that the ABT enforced its rules and promoted discipline among its members, prospects and associates through murder, attempted murder, conspiracy to murder, arson, assault, robbery and threats against those who violate the rules or pose a threat to the enterprise.  Members, and oftentimes associates, were required to follow the orders of higher-ranking members, often referred to as “direct orders.”

According to the superseding indictment, in order to be considered for ABT membership, a person must be sponsored by another gang member.  Once sponsored, a prospective member must serve an unspecified term, during which he is referred to as a prospect, while his conduct is observed by the members of the ABT.

At sentencing, scheduled for Sept. 26, 2013, Roberts faces a maximum penalty of life in prison.

Roberts is one of 35 defendants charged with conducting racketeering activity through the ABT criminal enterprise, among other charges.  Ben Christian Dillon, 40, of Houston; James Marshall Meldrum, 40, of Dallas; Chad Ray Folmsbee, 30, of Houston; and Chrisopher Morris, 37, of Dallas, each previously pleaded guilty to racketeering conspiracy for their roles in the criminal enterprise.
  
This case is being investigated by a multi-agency task force consisting of the Bureau of Alcohol, Tobacco, Firearms and Explosives; the Drug Enforcement Administration; FBI; U.S. Marshals Service; Federal Bureau of Prisons; U.S. Immigration and Customs Enforcement Homeland Security Investigations; Texas Rangers; Texas Department of Public Safety; Montgomery County, Texas, Sheriff’s Office; Houston Police Department-Gang Division; Texas Department of Criminal Justice – Office of Inspector General; Harris County, Texas, Sheriff’s Office; Atascosa County, Texas, Sheriff’s Office; Orange County, Texas, Sheriff’s Office; Waller County, Texas, Sheriff’s Office; Alvin, Texas, Police Department; Carrollton, Texas, Police Department; Mesquite, Texas, Police Department; Montgomery County District Attorney’s Office; and the Atascosa County District Attorney’s Office.

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

The Justice Department announced today that it will monitor municipal elections on May 11, 2013, in the cities of Corrigan, Farmers Branch, Irving and Orange, Texas, to ensure compliance with the Voting Rights Act of 1965. The Voting Rights Act prohibits discrimination in the election process on the basis of race, color or membership in a minority language group.

 

Under the Voting Rights Act, the Justice Department is authorized to ask the U.S. Office of Personnel Management (OPM) to send federal observers to jurisdictions that are certified by the attorney general or by a federal court order.  Federal observers will be assigned to monitor polling place activities in Farmers Branch and Irving based on the attorney general’s certification. The observers will watch and record activities during voting hours at polling locations, and a Civil Rights Division attorney will coordinate the federal activities and maintain contact with local election officials.

 

In addition, Justice Department personnel will monitor polling place activities in the cities of Corrigan and Orange. Civil Rights Division attorneys will coordinate federal activities and maintain contact with local election officials.

 

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

 

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

The United States has asked a federal court in St. Louis, Mo., to permanently bar Joseph Burns, d/b/a Electronic Tax Service, Joseph Thomas and International Tax Service Inc. (Thomas’s business), from preparing federal tax returns for others, the Justice Department announced today. The civil injunction suit alleges that Burns and Thomas, who previously worked together, prepare fraudulent tax returns for customers from the same office building in the midtown neighborhood of St. Louis.

According to the complaint, the defendants repeatedly fabricate deductions on customers’ returns and report false filing statutses in order to illegally lower their customers’ federal tax liabilities and to generate larger tax refunds. The government alleges that the defendants also prepare returns containing bogus Schedule C income which illegally allows some customers to claim the maximum earned income tax credit. Based on past audit results, the government alleges that the loss to the U.S. Treasury caused by these defendants’ ongoing return preparation activities could be as much as $6 million annually .

 

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

Related Materials:

Burns/Thomas Complaint

The Justice Department today announced an agreement with Stewart County, Ga., to improve access to all aspects of civic life for persons with disabilities. The agreement was reached under Project Civic Access (PCA), the department’s wide-ranging initiative to ensure that cities, towns and counties throughout the country comply with the Americans with Disabilities Act (ADA).

 

“Access to your county’s programs, services and activities is a basic civil right, and the doors to government must be open for people with disabilities,” said Eve L. Hill, Senior Counselor to the Assistant Attorney General for the Civil Rights Division. “I applaud Stewart County for its dedication to ensuring that all people have full access to the county’s public resources.”

 

PCA ensures that persons with disabilities have an equal opportunity to participate in civic life. As part of the PCA initiative, Justice Department staff, including investigators and architects, survey government facilities, services and programs in communities across the country. The survey identifies modifications needed for compliance with the ADA. The agreements set out steps each community must take to improve access. PCA agreements require physical modifications to facilities to make them accessible to people with disabilities.

 

Stewart County, established in 1830, is located in southwest Georgia approximately 37 miles from Columbus, Ga. During the compliance review, the department reviewed 11 county facilities, including the sheriff’s department, health department, senior center, municipal center and RV park, as well as several polling places. The agreement requires the county to correct accessibility barriers identified at the 11 facilities, and to conduct accessibility surveys at additional polling places and voter registration sites, as well as to survey any potential new polling places. The county will also make provisions for individuals with disabilities in its emergency management plans and procedures and will increase the accessibility of its website. Other provisions address effective communication, grievance procedures, sidewalks, and domestic violence programs. The agreement will remain in effect for three years and the department will monitor the county’s compliance with the agreement.

 

People interested in finding out more about the ADA, today’s agreement with Stewart County, the PCA initiative or the ADA Best Practices Tool Kit for state and local governments can access the ADA webpage at www.ada.gov or call the toll-free ADA Information Line at (800) 514-0301 (TDD 800-514-0383).

Related Materials:

Stewart County PCA Agreement

A former senior executive of Texas-based ArthroCare Corp., a publicly traded medical device company, pleaded guilty today for his role in a scheme to defraud the company’s shareholders and members of the investing public by falsely inflating ArthroCare’s earnings, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and U.S. Attorney Robert Pitman for the Western District of Texas.

David Applegate, 54, pleaded guilty before U.S. Magistrate Judge Mark Lane in Austin, Texas, to two counts of a superseding information which charges him with conspiracy to commit securities, mail and wire fraud and with a false statements violation. Applegate was the senior vice president in charge of ArthroCare’s Spine Division.  Applegate admitted that he and other co-conspirators inflated falsely ArthroCare’s sales and revenue through a series of end-of-quarter transactions involving ArthroCare’s distributors and that he and other co-conspirators caused ArthroCare to file a Form 10-K for 2007 with the U.S. Securities and Exchange Commission that materially misrepresented ArthroCare’s quarterly and annual sales, revenues, expenses and earnings.

According to court documents, Applegate and others determined the type and amount of product to be shipped to distributors, notably ArthroCare’s largest distributor, DiscoCare Inc.,  based on ArthroCare’s need to meet sales forecasts, rather than the distributors’ actual orders. Applegate and others then caused ArthroCare to “park” millions of dollars’ worth of ArthroCare’s medical devices at its distributors at the end of each relevant quarter. ArthroCare would then report these shipments as sales in its quarterly and annual filings at the time of the shipment, enabling the company to meet or exceed internal and external earnings forecasts.

According to the superseding information, DiscoCare agreed to accept shipment of approximately $37 million of product in exchange for substantial, upfront cash commissions, extended payment terms and the ability to return product, as well as other special conditions, allowing ArthroCare to inflate falsely its revenue by tens of millions of dollars.  To conceal the fact that DiscoCare owed ArthroCare a substantial amount of money on the unused inventory, ArthroCare, with Applegate’s knowledge, caused ArthroCare to acquire DiscoCare on Dec. 31, 2007.

According to court documents, between December 2005 and December 2008, ArthroCare’s shareholders held more than 25 million shares of ArthroCare stock. On July 21, 2008, after ArthroCare announced publicly that it would be restating its previously reported financial results from the third quarter 2006 through the first quarter 2008 to reflect the results of an internal investigation, the price of ArthroCare shares dropped from $40.03 to $23.21 per share. The drop in ArthroCare’s share price caused an immediate loss in shareholder value of more than $400 million.

Applegate faces a maximum prison sentence of five years in prison for each charge. A sentencing date has yet to be scheduled.

David Applegate’s co-defendant John Raffle is scheduled for trial on July 15, 2013. Defendants are presumed innocent unless and until proven guilty at trial.

This case was investigated by the FBI’s Austin Field Office. The case is being prosecuted by Deputy Chief Benjamin D. Singer and Trial Attorney Henry P. Van Dyck of the Criminal Division’s Fraud Section. The Department recognizes the substantial assistance of the U.S. Securities and Exchange Commission.

The former president of Port Arthur Chemical and Environmental Services, LLC (PACES) has pleaded guilty in federal court to occupational safety crimes which resulted in the death of an employee, announced Ignacia S. Moreno, Assistant Attorney General of the Justice Department’s Environment and Natural Resources Division and John M. Bales, U.S. Attorney for the Eastern District of Texas.

Matthew Lawrence Bowman, 41, of Houston, pleaded guilty to violating the Occupational Safety and Health Act (OSH Act) and making a false statement.   Bowman admitted to not properly protecting PACES employees from exposure to hydrogen sulfide, a poisonous gas resulting in the death of truck driver Joey Sutter on Dec. 18, 2008.  In addition, Bowman admitted to directing employees to falsify transportation documents to conceal that the wastewater was coming from PACES after a disposal facility put a moratorium on all wastewater shipments from PACES after received loads containing hydrogen sulfide.  The guilty plea was entered today before U.S. Magistrate Judge Zack Hawthorn.  

“Bowman’s actions showed a preference for profit above the safety of his employees, putting them and the public in life threatening situations by not properly identifying the dangerous materials PACES was handling,” said Assistant Attorney General Moreno. “The Justice Department will continue to vigorously enforce laws enacted for the protection of human health and the environment.”

“In this day and age, it seems inconceivable that workers would be exposed to the level of danger that was routine at PACES,” said U.S. Attorney Bales.  “Mr. Bowman’s actions as the leader of the company were more than just cavalier, they were criminal and he is being held to account.  We continue to grieve for the needless loss of life and the pain and suffering of Mr. Sutter’s family and friends.  This investigation and prosecution is the result of an excellent combined effort of the identified agencies and I am grateful for their hard work.”

“The plea agreement reached today sends a strong signal to all who would illegally transport hazardous materials,” said Max Smith, regional Special Agent-in-Charge, U.S. Department of Transportation, Office of Inspector General.  “Working with our law enforcement and prosecutorial colleagues, we will continue our efforts to ensure safety in the transport of these materials and vigorously pursue those who violate the law.”   

“Laws regarding the safe and legal handling of hazardous materials are in place for a reason – to save lives,” said Ivan Vikin, Special Agent in Charge of the U.S. Environmental Protection Agency’s (EPA) criminal enforcement program in Texas.  “The defendant admitted that his actions directly led to the death of one of his employees.  This plea demonstrates that EPA and its partner agencies, the Texas Commission on Environmental Quality’s Environmental Crimes Unit and the Department of Transportation’s Office of the Inspector General, will prosecute anyone whose actions place the public at risk.”

According to information presented in court, Bowman was president and owner of PACES, located in Port Arthur, Texas, and CES Environmental Services (CES) located in Houston.  PACES was in operation from November 2008 to November 2010, and was in the business of producing and selling caustic materials to paper mills.  The production of caustic materials involved hydrogen sulfide, a poisonous gas.  According to the National Institute for Occupational Safety and Health, hydrogen sulfide is an acute toxic substance that is the leading cause of sudden death in the workplace.  Employers are required by the Occupational Safety and Health Administration (OSHA) to implement engineering and safety controls to prevent employees from exposure above harmful limits of hydrogen sulfide.  
Bowman was responsible for approving and directing

PACES production operations, the disposal of hydrogen sulfide wastewater, and ensuring implementation of employee safety precautions. In some cases, Bowman personally handled the investigation of work-related employee injuries, directed the transportation of PACES wastewater, and determined what safety equipment could be purchased or maintained.  In the cases at issue, hazardous materials were transported illegally with false documents and without the required placards.  Most importantly, the workers were not properly protected from exposure to hazardous gases.  The exposure resulted in the deaths of two employees, Joey Sutter and Charles Sittig, who were truck drivers, at the PACES facility on Dec. 18, 2008, and Apr. 14, 2009.  Placarding is critical to ensure the safety of first responders in the event of an accident or other highway incident. Bowman and PACES were indicted by a federal grand jury on July 18, 2012. 

Bowman faces up to five years in federal prison and a fine of up to $250,000 at sentencing.  A sentencing date has not been set.  Charges remain pending against PACES.  The corporation faces a fine of up to $500,000 per count.

This case was investigated by EPA Criminal Investigation Division; the U.S. Department of Transportation Office of Inspector General; the Texas Commission on Environmental Quality - Environmental Crimes Unit, part of the Texas Environmental Enforcement Task Force; the Texas Parks & Wildlife Department - Environmental Crimes Unit; the Houston Police Department - Major Offenders, Environmental Investigations Unit; the Travis County, Texas - District Attorney’s Office; the Harris County, Texas, District Attorney’s Office - Environmental Crimes Division; the Houston Fire Department; OSHA; the U.S. Coast Guard; the Port Arthur Police Department; and the Port Arthur Fire Department.

The case was prosecuted by the U.S. Attorney’s Office for the Eastern District of Texas and the Environmental Crimes Section of the Justice Department’s Environment and Natural Resources Division.

A Texas man was sentenced today to serve 30 years in prison for producing and distributing material relating to the sexual exploitation of children, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and U.S. Attorney for the Western District of Texas Robert Pitman.

Robert Ramos Jr., 33, of Austin, Texas, was sentenced by U.S. District Judge Lee Yeakel in the Western District of Texas.  In addition to his prison term, Judge Yeakel sentenced Ramos to serve 10 years of supervised release.
 
Ramos pleaded guilty on Oct. 31, 2012, to one count of production of child pornography and one count of distribution of child pornography.

According to court documents and proceedings, Ramos, who was previously an assistant band director at Dessau Middle School in Pflugerville, Texas, admitted that he obtained sexually explicit images of a 13-year-old girl through communicating with her on Facebook using Facebook accounts that falsely portrayed him as a teenaged girl.  Ramos admitted to distributing those images to Timothy Bek, a teacher in New York who was also contacting minor boys and girls for the purpose of obtaining sexually explicit images. 

Ramos admitted at his plea hearing that he viewed via Internet webcam and saved to his computer a video of a five-year-old girl being sexually abused by Jennifer Mahoney, of New Jersey.

Both Bek and Mahoney have been prosecuted in their respective jurisdictions for their criminal activities relating to child pornography.  Bek was sentenced in the Western District of New York on May 23, 2012, to serve 30 years in prison for production and possession of child pornography.   Mahoney was sentenced in the District of New Jersey on Dec. 18, 2012, to serve 30 years in prison in for production of child pornography.

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

This case was investigated by the FBI and CEOS.  CEOS Trial Attorney Keith Becker and Assistant U.S. Attorney Matthew Devlin of the Western District of Texas are prosecuting this case.

The Department of Justice and the Department of Education’s Office for Civil Rights obtained a comprehensive resolution agreement today with the University of Montana-Missoula in Missoula, Mont., to ensure that it responds swiftly and effectively to allegations of sexual assault and harassment by students. In May 2012, the United States launched a comprehensive review of the university’s handling of sexual assault and harassment complaints over a three-year period, as well as its policies, procedures, training and student education efforts. The Department of Justice today also obtained a separate agreement with the university to resolve allegations that the university’s campus police force, the Office of Public Safety (OPS), discriminated against women by failing to adequately respond to reports of on-campus sexual assault.

 

The two agreements announced today resolve both of the United States’ investigations of the university: under Title IX of the Education Amendments of 1972 and Title IV of the Civil Rights Act of 1964, which both prohibit sex discrimination in education programs, including sexual assault and harassment, and the Department of Justice’s investigation of the university’s campus police under 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 Department of Justice continues to seek resolution in its investigations of the Missoula Police Department and the Missoula County Attorney’s Office for their alleged failure to adequately respond to complaints of sexual assault.

The first agreement details specific steps the university will take to:

 

• Revise the university’s policies, procedures and investigative practices to provide a grievance procedure that ensures prompt and equitable resolution of sexual harassment and sexual assault allegations;
• Adequately investigate and respond to allegations of retaliation by students who have alleged sexual assault;
• Take sufficient effective action to fully eliminate a hostile environment based on sex, prevent its recurrence and address its effects;
• Ensure that the individuals designated to coordinate its Title IX efforts receive adequate training and coordinate these efforts effectively; and
• Revise the university’s notice of nondiscrimination to adequately inform students that sex discrimination is prohibited. 

The university’s separate agreement with the Department of Justice resolving the investigation of the university’s OPS requires that the university:

• 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 university anticipates that it will achieve compliance with this agreement within two years.

 

“For students to feel safe and welcome on college campuses, sexual assault and harassment must be swiftly and effectively addressed,” said Jocelyn Samuels, Principal Assistant Attorney General for the Civil Rights Division of the Department of Justice. “We applaud the university for its cooperation and for taking the steps necessary to maintain a safe learning environment for all students. These agreements provide a blueprint for colleges and universities across the country to take effective steps to prevent and address sexual assault and harassment on their campuses.”

 

“Through these agreements, President Engstrom and the University of Montana staff have embraced change, not the status quo–they are problem solvers.  They are to be commended for developing and implementing a plan to resolve safety issues at the university. The agreements entered into today, between the United States and the University of Montana, when fully implemented, will ensure that a safe living and learning environment will exist at the university where our children will be well educated, nurtured and where they will be allowed to achieve their full potential in a wholesome academic setting,” said U.S. Attorney for the District of Montana Michael W. Cotter.

 

“Sexual harassment and sexual violence exact a devastating toll on students and interfere with their ability to learn in environments that are safe and free from discrimination.  The Department of Education expects that today’s resolution agreement will foster a safer environment and one that gives all students the chance to succeed at the University of Montana,” said Acting Assistant Secretary for Civil Rights at the Department of Education, Seth Galanter.

 

The prevention of sex-based discrimination is a top priority of the Justice Department’s Civil Rights Division and U.S. Attorney Offices.   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.    The enforcement of Title IX is also a top priority of the Department of Education’s Office for Civil Rights.  Additional information about the Office for Civil Rights is available on its website at www.ed.gov/ocr/.

Related Material:

• UM Office of Public Safety Letter of Findings
• UM Letter of Findings
• UM Agreement
• UM Office of Public Safety Agreement
• Deputy Assistant Attorney General for the Civil Rights Division Roy L. Austin Jr. Speaks at the Press Conference on the Agreements with the University of Montana

A federal grand jury in U.S. District Court for the Eastern District of California in Sacramento today returned a superseding indictment charging Andrew B. Katakis, of Danville, Calif., with obstruction of justice related to a federal investigation into conspiracies to rig bids and commit mail fraud at public real estate foreclosure auctions held in San Joaquin County, Calif., the Department of Justice announced.

The remaining allegations are unchanged from the original indictment, which was returned by a federal grand jury on Dec. 7, 2011. The pre-existing counts charge Katakis, Donald M. Parker, Anthony B. Joachim and W. Theodore Longley with conspiring with other unnamed co-conspirators to rig bids and commit mail fraud when purchasing selected properties at public real estate foreclosure auctions. Wiley C. Chandler, another real estate investor who was also charged in the original indictment, pleaded guilty on Feb. 24, 2012.

The added charge alleges that after Katakis received a letter notifying him that a federal grand jury had subpoenaed his bank account, he deleted and caused others to delete electronic records and documents related to the conspiracies. The superseding indictment alleges that Katakis also installed and caused others to install and use a software program that overwrote deleted electronic records and documents so that they could not be viewed or recovered.

“Obstruction of a grand jury investigation is a crime the Antitrust Division takes seriously,” said Bill Baer, Assistant Attorney General in charge of the Department of Justice's Antitrust Division. “We will prosecute those who subvert the competitive process, as well as those who attempt to conceal their illegal actions by destroying evidence.”      

According to the superseding indictment, Katakis, Parker, Joachim, Longley and co-conspirators agreed to suppress and restrain competition by rigging bids to obtain selected properties offered at public auctions in San Joaquin County. The conspirators also devised a scheme to fraudulently acquire titles to selected properties sold at the public auctions and to divert money to co-conspirators that would have gone to the beneficiaries. The indictment alleges that the conspiracy lasted from at least September 2008 until at least October 2009.

“This superseding indictment includes allegations that, in addition to the charges previously alleged, this defendant obstructed justice,” said Benjamin B. Wagner, U.S. Attorney for the Eastern District of California. “The new charge arises out of a long-running investigation that has already resulted in guilty pleas by numerous other defendants who participated in the scheme charged in this case.”

 

Katakis, Parker, Joachim and Longley are charged with bid rigging, a violation of the Sherman Act, which carries a maximum penalty of 10 years in prison and a $1 million 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. They are also charged with conspiracy to commit mail fraud, which carries a maximum sentence of 30 years in prison and a $1 million fine. The government can also seek to forfeit the proceeds earned from participating in the conspiracy to commit mail fraud. The newly added obstruction of justice charge against Katakis carries a maximum sentence of 20 years and a $250,000 fine.

To date, 10 individuals have pleaded guilty in U.S. District Court for the Eastern District of California in connection with the investigation: Anthony B. Ghio, John R. Vanzetti, Theodore B. Hutz, Richard W. Northcutt, Yama Marifat, Gregory L. Jackson, Walter Daniel Olmstead, Robert Rose, Kenneth Swanger and Chandler.

The additional charge today is the latest filed by the department in its ongoing federal antitrust investigation of fraud and bidding irregularities in certain real estate auctions in San Joaquin County. The investigation is being conducted by the Antitrust Division’s San Francisco office, the U.S. Attorney’s Office for the Eastern District of California, the FBI’s Sacramento Division, and the San Joaquin County District Attorney’s Office. Anyone with information concerning bid rigging or fraud related to real estate foreclosure auctions should contact the Antitrust Division’s San Francisco office at 415-436-6660, visit www.justice.gov/atr/contact/newcase.htm, contact the U.S. Attorney’s Office for the Eastern District of California at 916-554-2700 or contact the FBI’s Sacramento Division at 916-481-9110.

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 today announced that a federal grand jury sitting in Milwaukee has indicted Najee C. Moore, 22, on charges of conspiracy, sex trafficking and attempted forced labor, of both minor and adult victims.

 

The indictment alleges that Moore engaged in the sex trafficking of two different minor victims in 2010 and 2012, respectively, and used force, fraud, and coercion to compel both adult and minor victims to engage in commercial sex acts. The indictment further charges the defendant with conspiring and attempting to compel a victim into forced labor.

 

The matter is being investigated by the FBI, U.S. Immigrations and Customs Enforcement Homeland Security Investigations, Milwaukee Police Department and the Wisconsin Division of Criminal Investigation.  The case is being prosecuted by Assistant U.S. Attorney Karine Moreno-Taxman of the U.S. Attorney’s Office for the Eastern District of Wisconsin and Trial Attorney Daniel H. Weiss of the Department of Justice’s Civil Rights Division Human Trafficking Prosecution Unit.

 

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

The Department of Justice announced today the settlement of its lawsuit against the Golden Corral restaurant in Westland, Mich., which alleged that the owners and operators of the Golden Corral violated the Americans with Disabilities Act (ADA) by denying service to a mother and her minor children based on the appearance of the children’s skin due to a genetic skin disorder.

 

The Justice Department’s lawsuit, filed in the U.S. District Court for the Eastern District of Michigan in Detroit, alleged that the manager of the Golden Corral restaurant demanded that Danielle Duford and her four daughters leave the restaurant based on the appearance of the children’s skin caused by a genetic skin disorder, epidermolysis bullosa, which causes blisters to form on the skin in response to minor injuries and temperature changes. Despite Duford informing the restaurant manager of her children’s disability and repeatedly emphasizing that they did not have a contagious disease, the manager required the family to immediately leave the restaurant, claiming that he had received complaints from other customers. Title III of the ADA prohibits public accommodations, such as restaurants, from discriminating against people on the basis of disability, or their association with an individual with a disability, in the full and equal enjoyment of the goods or services offered.

 

Under the settlement agreement, which must still be approved by U.S. District Court Judge Stephen J. Murphy III, the defendants will pay $50,000 in damages to Duford and her children and $10,000 in civil penalties to the United States. The defendants will also develop and maintain a non-discrimination policy which covers service to customers with disabilities at the Golden Corral restaurant, and provide training to their employees on their obligations under the ADA.

 

“No one should be excluded from participating in the basic activities of daily living on account of fears of their disability, nor should children be shamed from going out in public,” said Eve Hill, Senior Counselor to the Assistant Attorney General for the Civil Rights Division. “We are confident today’s settlement sends that message.”

 

“We hope that today’s settlement will help prevent discrimination based on unfounded fears by raising awareness of the duties to accommodate individuals with less common disabilities,” said Barbara L. McQuade, the U.S. Attorney for the Eastern District of Michigan.

 

The case was handled by Assistant U.S. Attorney Susan K. DeClercq in the U.S. Attorney’s Office for the Eastern District of Michigan, in collaboration with the Disability Rights Section of the Civil Rights Division of the Justice Department.

 

More information about the ADA is available at the Justice Department’s toll-free ADA Information line at (800) 514-0301 or (800) 514-0383 (TTY) and via the ADA website at www.ada.gov or through contacting the U.S. Attorney’s civil rights hotline at 313-226-9151.

The Justice Department announced today that Oregon developer David Montagne and others affiliated with him have agreed to pay $80,000 and remove accessibility barriers at Gateway Village, a 275 unit apartment complex in Salem, Oregon, to settle a lawsuit alleging that they had violated the Fair Housing Act by building the complex with steps and other features that made it inaccessible to persons with disabilities.

 

Under the terms of the parties’ agreement, Montagne and the other developers, Montagne Development Company, Gateway II LLC, Dav II Investment Group LLC and William Jones, must take extensive actions to make the complex accessible to persons with disabilities. These corrective actions include removing steps from sidewalks, widening interior doorways, reducing threshold heights, replacing excessively sloped portions of sidewalks, and installing properly sloped curb ramps to allow persons with disabilities to access the sidewalks from the parking areas. In addition, these defendants will pay $48,000 to the Fair Housing Council of Oregon, whose investigation revealed the violations and which intervened in the United States’ lawsuit, and $32,000 to establish a settlement fund for the purpose of compensating disabled individuals impacted by the accessibility violations. This settlement does not resolve the entire lawsuit. The case continues against the defendant that provided design and engineering services for Gateway Village, Multi/Tech Engineering.

 

“The Fair Housing Act ensures that persons with disabilities do not face unnecessary barriers to access to housing of their choice and are able to make full use of that housing,” said Eric Halperin, Senior Counsel and Special Counsel for Fair Lending in the Civil Rights Division. “The Justice Department is strongly committed to the enforcement of the fair housing laws that protect the rights of persons with disabilities to have equal opportunities to enjoy the housing of their choice.”

 

“Accessible housing is a fundamental protection afforded by the Fair Housing Act,” stated U.S. Attorney for the District of Oregon, S. Amanda Marshall.  “I am committed to working with the Fair Housing Council of Oregon and our federal, state, and local partners to ensure Oregonians have accessible housing choices in accordance with federal law.”

 

The lawsuit, filed in September 2011, arose as a result of a complaint filed by the Fair Housing Council of Oregon with the U.S. Department of Housing and Urban Development (HUD). After HUD investigated the complaint, it issued a charge of discrimination and referred the matter to the Justice Department.

 

“Having accessible features in an apartment complex is not just a legal requirement. These features are essential for people with disabilities to live their lives fully and independently,” said John Trasviña, HUD Assistant Secretary for Fair Housing and Equal Opportunity. “HUD and the Justice Department are committed to ensuring that housing developers meet the accessibility requirements of the Fair Housing Act.”

 

Individuals who are entitled to share in the settlement fund will be identified through a process established in the settlement.  Persons who believe they were subjected to unlawful discrimination at Gateway Village either when they lived there or considered living there should contact the Justice Department toll-free at 1-800-896-7743 mailbox # 9993 or e-mail the Justice Department at [email protected] .

 

The federal Fair Housing Act prohibits discrimination in housing on the basis of race, color, religion, sex, familial status, national origin and disability.  More information about the Civil Rights Division and the laws it enforces is available at www.usdoj.gov/crt .  Individuals who believe that they have been victims of housing discrimination can call the Housing Discrimination Line at 1-800-896-7743, e-mail the Justice Department at [email protected] , or contact HUD at 1-800-669-9777.

Two former employees at the Marine Corps Logistics Base Albany (MCLB-Albany) have pleaded guilty to receiving bribes related to a scheme to funnel freight hauling business to a local transportation company resulting in the loss of millions of dollars to the United States government, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and U.S. Attorney Michael J. Moore for the Middle District of Georgia.

Mitchell D. Potts, 48, and Jeffrey S. Philpot, 35, both of Sylvester, Ga., each pleaded guilty today before U.S. District Judge W. Louis Sands in the Middle District of Georgia to one count of bribery of a public official.

During their guilty pleas, Potts, the former Traffic Office Supervisor for the Defense Logistics Agency (DLA) at MCLB-Albany, and Philpot, the former Lead Transportation Assistant in the Traffic Office, admitted to participating in a scheme whereby Potts and Philpot assisted Person A, the owner of several local commercial trucking companies, in obtaining trucking business from the DLA in exchange for the payment of cash and other things of value.  Both defendants admitted that they took a variety of steps designed to push business to Person A and his companies, including: 1) delaying shipments for a period of hours or days, thereby reducing the time available to fulfill the shipping request and assuring that it would be awarded to a local trucking company, usually one owned by Person A; 2) “short loading” shipments awarded to Person A’s companies so that it would appear to require more trucks than necessary to move the subject freight, resulting in additional loads being awarded to Person A’s companies; 3) indicating that removable gooseneck (RGN) trailers were required for shipments, which resulted in many loads being directed to Person A’s companies because they always had RGNs available; and 4) creating “ghost shipments” where Person A billed the DLA for shipments that were never made.  Both Potts and Philpot admitted that their actions led to millions of dollars of overcharges to the government.

Potts and Philpot admitted that they received cash payments from Person A when he visited the traffic office, sometimes multiple times per week.  They also admitted receiving lunches provided by Person A several times a week during the relevant period and that they also received gift cards and other things of value.  Potts admitted receiving approximately $209,000 in kickbacks from Person A during the roughly three-year scheme.  Philpot admitted receiving approximately $523,000 in cash and other things of value from Person A during the same period. 

At sentencing, Potts and Philpot each face a maximum penalty of 15 years in prison and a fine of not more than twice the pecuniary loss to the government.  As part of their plea agreements with the United States, both Potts and Philpot have agreed to forfeit the bribe proceeds they received from the scheme, as well as to pay full restitution to the Department of Defense.  Sentencing is scheduled for Aug. 15, 2013.

The case is being investigated by the Naval Criminal Investigative Service, with assistance from the Dougherty County District Attorney’s Office Economic Crime Unit, the Defense Criminal Investigative Service, and the Defense Logistics Agency Office of the Inspector General. The case is being prosecuted by Trial Attorneys Richard B. Evans and J.P. Cooney of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney K. Alan Dasher of the Middle District of Georgia. 

Today, the Justice Department announced that former Sheriff of Wilcox County, Ga., Stacy Bloodsworth was sentenced to 10 years in prison for assaulting an inmate inside the Wilcox County Jail and for conspiring to cover up the assault. Four other people have also been sentenced for their roles in the same assault and cover-up. Bloodsworth’s son, Austin Bloodsworth, was sentenced to 18 months in prison; former Wilcox County inmate-trustee Willie James Caruthers was sentenced to 18 months in prison; former South Central Georgia Drug Task Force Agent Timothy King Jr. was sentenced to 6 months in prison and former Wilcox County Jailer Casey Owens was sentenced to probation.

 

Stacy Bloodsworth pleaded guilty on Oct. 22, 2012. During his plea hearing, Stacy Bloodsworth admitted that on July 23, 2009, while he was the sheriff, he was inside the Wilcox County Jail with several other individuals, including Austin Bloodsworth, Caruthers, King and Owens. Stacy Bloodsworth ordered three inmates out of their cells because he was angry that one of them reportedly had a cell phone, in violation of Wilcox County Jail regulations. Bloodsworth hit all three inmates, and also watched as other participants struck and kicked the inmates. After it appeared that one inmate’s jaw had been broken, Stacy Bloodsworth used a wrench in an attempt to put his broken jaw back into place. Approximately one week later, the inmate was brought to a local hospital, where his jaw had to be wired shut. The other two inmates who had been assaulted suffered lacerations, bruising and pain.

 

During the plea hearing, Stacy Bloodsworth further admitted that he concocted a false cover story about the assaults in order to cover up the involvement of the law enforcement officials. Specifically, Stacy Bloodsworth ordered Caruthers, Austin Bloodsworth, King and Owens that, if they were ever questioned about the incident, they should say that Caruthers and the victim got into a fight after the inmate called Caruthers a racial slur. Stacy Bloodsworth, knowing that this statement was false, also instructed Caruthers and Owens to write this false cover story in a report. In addition, in August 2010, after learning that the inmate whose jaw had been broken had hired an attorney and had initiated a lawsuit, then-Sheriff Bloodsworth met with King and Owens and again instructed them that to relay the false story about the cause of the inmate’s broken jaw. In April 2011, then-Sheriff Bloodsworth relayed the false cover story regarding the cause of inmate’s broken jaw to FBI Special Agents.

 

“Today’s sentence reflects that law enforcement officers who assault inmates in their custody and make false statements erode the trust of the people they have sworn to protect,” said Roy L. Austin Jr., Deputy Assistant Attorney General for the Civil Rights Division. “The Justice Department is committed to prosecuting law enforcement officers who abuse their power and violate the constitutional rights of individuals in their custody.”

 

“We expect our law enforcement officers to protect and serve the public, but in this case the defendants did neither,” said U.S. Attorney for the Middle District of Georgia Michael Moore.  “The sentences handed down today bring closure to an alarming case, where those sworn to uphold the law now feel the full weight of it.”

 

Caruthers pleaded guilty to assaulting the inmate, and to conspiring to cover up the assault. Austin Bloodsworth and Timothy King Jr. each pleaded guilty to conspiring to cover up the assault, while Owens pleaded guilty to misprision of a felony.

 

This case was investigated by the FBI and was prosecuted by Trial Attorney Christine M. Siscaretti and Special Litigation Counsel Gerard V. Hogan of the Justice Department’s Civil Rights Division, with the assistance of the U.S. Attorney’s Office for the Middle District of Georgia.

Miami residents Raymond Arias, 42, and his wife, Emelitza Arias, 25, have been sentenced in Detroit to 100 months and 12 months in prison, respectively, for their participation in a $13.3 million Medicare fraud scheme.

Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; U.S. Attorney for the Eastern District of 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 Service’s Office of Inspector General’s (OIG) Chicago Regional Office, made the announcement after sentencing by U.S. District Paul D. Borman of the Eastern District of Michigan.

The Ariases were also sentenced to two years of supervised release following their respective prison terms. At sentencing on May 7, 2013, the court ordered Raymond Arias to pay $5.4 million in restitution. Today at sentencing, the court ordered Emelitza Arias to pay $531,883 in restitution, jointly and severally.  The defendants agreed to forfeit approximately $40,000 seized by federal agents during the investigation.  

The Ariases pleaded guilty on Oct. 17, 2012, to one count of conspiring to commit health care fraud.  According to the plea documents, beginning in approximately 2009, Raymond Arias opened Elite Wellness where he submitted claims to Medicare for infusion therapy treatments that were never rendered.  In three months, Elite Wellness submitted in excess of $10 million in claims to Medicare.  Emelitza Arias joined the scheme by opening a second clinic, Carefirst Physical Therapy & Rehabilitation Center, which submitted approximately $940,000 in claims to Medicare for infusion therapy treatments that were never rendered. 

The 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. This case was prosecuted by Trial Attorney Catherine 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, the Medicare Fraud Strike Force operations in nine districts have charged more than 1,480 individuals who collectively have falsely billed the Medicare program for more than $4.8 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with the 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.

Miami residents Raymond Arias, 42, and his wife, Emelitza Arias, 25, have been sentenced in Detroit to 100 months and 12 months in prison, respectively, for their participation in a $13.3 million Medicare fraud scheme.

Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; U.S. Attorney for the Eastern District of 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 Service’s Office of Inspector General’s (OIG) Chicago Regional Office, made the announcement after sentencing by U.S. District Paul D. Borman of the Eastern District of Michigan.

The Ariases were also sentenced to two years of supervised release following their respective prison terms. At sentencing on May 7, 2013, the court ordered Raymond Arias to pay $5.4 million in restitution. Today at sentencing, the court ordered Emelitza Arias to pay $531,883 in restitution, jointly and severally.  The defendants agreed to forfeit approximately $40,000 seized by federal agents during the investigation.  

The Ariases pleaded guilty on Oct. 17, 2012, to one count of conspiring to commit health care fraud.  According to the plea documents, beginning in approximately 2009, Raymond Arias opened Elite Wellness where he submitted claims to Medicare for infusion therapy treatments that were never rendered.  In three months, Elite Wellness submitted in excess of $10 million in claims to Medicare.  Emelitza Arias joined the scheme by opening a second clinic, Carefirst Physical Therapy & Rehabilitation Center, which submitted approximately $940,000 in claims to Medicare for infusion therapy treatments that were never rendered. 

The 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. This case was prosecuted by Trial Attorney Catherine 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, the Medicare Fraud Strike Force operations in nine districts have charged more than 1,480 individuals who collectively have falsely billed the Medicare program for more than $4.8 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with the 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.

Ignacia S. Moreno, Assistant Attorney General of the Environment and Natural Resources Division, announced today that she will be leaving the Department of Justice on June 7, 2013.

 “Over the last four years, Ignacia Moreno has been a powerful champion for the mission of the Environment and Natural Resources Division,” said Attorney General Eric Holder. “Under her leadership, the division has achieved extraordinary results on behalf of the American people – obtaining record-setting penalties against those responsible for the tragic Deepwater Horizon oil spill, successfully defending EPA’s historic greenhouse gas rules, negotiating landmark settlements with Indian tribes to resolve decades-long disputes over the management of trust resources and advancing the goals of environmental justice to protect America’s most vulnerable communities.  Although I wish her all the best as she takes the next steps in her already remarkable career, I will miss Ignacia’s expertise and sound judgment.  And I will always be grateful for her unwavering dedication to and outstanding service on behalf of the American people.”
 
“Serving in the administration of President Barack Obama and under the leadership of Attorney General Eric Holder has been a tremendous honor,” said Assistant Attorney General Moreno.  “I am grateful for the outstanding work of the division’s talented and dedicated public servants and the steadfast support of the department’s leadership.  Together, we have vigorously enforced and defended the nation’s environmental laws for the benefit of all Americans, promoted responsible stewardship of our nation’s natural resources, protected tribal sovereignty, treaty rights and natural resources, and found creative solutions to complex problems that had previously defied resolution.  I believe that the division’s work will benefit the American people for years to come.”

In 2009, President Obama nominated Moreno to serve as the Assistant Attorney General for the Environment and Natural Resources Division.  She was confirmed by a unanimous vote of 93 to 0 in the U.S. Senate on Nov. 5, 2009.  She had previously served in the Clinton administration from 1994 to 2001 as a special assistant, counsel and principal counsel to the Assistant Attorney General for the Environment and Natural Resources Division.  

Holding Accountable Those Responsible for the Deepwater Horizon Oil Spill

  On April 20, 2010, an explosion and fire destroyed the Deepwater Horizon offshore drilling rig in the Gulf of Mexico and triggered a massive oil spill.  Eleven people aboard the rig tragically lost their lives.  Since then, Assistant Attorney General Moreno’s top enforcement priority has been to bring to justice those responsible for the Deepwater Horizon oil spill.  Under her leadership, in December 2010, the United States brought a civil action in the Eastern District of Louisiana  against BP, Anadarko, MOEX and Transocean for civil penalties under the Clean Water Act and a declaration of liability for natural resources damages under the Oil Pollution Act.  The first phase trial on liability has recently concluded in New Orleans.  Other key milestones have been achieved in the litigation.  On June 18, 2012, the court approved a settlement under which MOEX agreed to pay $70 million in civil penalties under the Clean Water Act and to spend $20 million on projects that will preserve and protect habitat and resources in the Gulf States.  Under a settlement approved by the court on Feb. 19, 2013, Transocean will implement enhanced safety measures in its drilling operations and pay a $1 billion civil penalty—the largest environmental civil penalty in history. 

Record-Setting Enforcement Results

During Assistant Attorney General Moreno’s tenure, the division has achieved record recoveries from parties responsible for violating the nation’s environmental laws.  Since 2009, the division has secured more than $29 billion in corrective measures through court orders and settlements.  The division also has obtained nearly $3.4 billion in civil and stipulated penalties, cost recoveries, natural resource damages, and other civil monetary relief, including more than $1.4 billion recovered for the Superfund.  During that time period, the division prosecuted 192 criminal cases against 358 defendants, and obtained a total of 155 years in confinement and almost $256 million in criminal fines, restitution, community service funds and special assessments.  The division’s enforcement efforts have achieved significant reductions in emissions and discharges of harmful pollutants into the nation’s air, land and water.

Landmark Decision on Greenhouse Gas Regulations

Under Assistant Attorney General Moreno’s leadership, the division successfully defended the Environmental Protection Agency’s (EPA) historic rulemakings under the Clean Air Act designed to reduce the emission of greenhouse gases that contribute to global climate change.  In June 2012, in one of the most significant environmental decisions of the past decade, a unanimous panel of the D.C. Circuit Court in Coalition for Responsible Regulation v. EPA upheld EPA’s greenhouse gas regulations.  

Successful Defense of the Administration’s Domestic Energy Agenda

 Since 2009, the division has defended the administration’s efforts to safely and responsibly develop domestic energy sources.  Under Assistant Attorney General Moreno’s leadership, the division has successfully defended dozens of challenges to permits and rights-of-way issued by federal land managers to promote the development of renewable energy projects on public lands, including solar, wind and electric power transmission projects located in California, Delaware, Oregon, Maine, Massachusetts, Nevada, Tennessee and Vermont. 

Historic Results to Address Tribal Claims and to Protect Tribal Rights and Resources

Assistant Attorney General Moreno has been steadfast in strengthening the United States’ government-to-government relationship with Native American tribes and resolving longstanding disputes between the tribes and the United States.  She has made it a priority to protect tribal sovereignty, safeguard tribal lands and resources, and honor tribal treaty rights through affirmative litigation.  She led the development of the department’s Eagle Feathers Policy to clarify and expand the longstanding department practice of not prosecuting members of federally recognized tribes for possessing or using eagle feathers or other protected bird parts for religious or cultural purposes.  In addition, Assistant Attorney General Moreno led the division’s efforts to resolve decades-long and costly litigation brought by more than 100 tribes against the United States relating to the government’s management of trust funds and trust resources.  During her tenure, the United States has settled cases with 69 tribes, and has agreed to pay about $1.7 billion to resolve the tribes’ claims in a fair and reasonable manner. 

 Significant Progress in Advancing the Goals of Environmental Justice

During her tenure, Assistant Attorney General Moreno has been fully committed to achieving the goals of environmental justice.  She has traveled throughout the United States to inner cities, Indian reservations, the Gulf States, the southwest border, Appalachia, and rural America, and has observed first-hand that many communities still suffer disproportionately from the burdens of pollution.  The division has furthered the goals of environmental justice by ensuring that all communities enjoy the benefit of a fair and even-handed application of the law and have a meaningful opportunity for input into the consideration of appropriate remedies.  Under Assistant Attorney General Moreno’s leadership, environmental justice considerations have become a fully integrated part of the resolution of the cases handled by the division.  

Division Ranked One of the Best Places to Work in the Federal Government

 During each year of Assistant Attorney General Moreno’s tenure, the Environment and Natural Resources Division has not only performed great work, it has won recognition as a great place to work.  In the annual survey conducted by the Partnership for the Public Service, the division has been ranked one of the top-five best places to work in the entire federal government in each of the past three years—including two #1 rankings.  The division also has scored among the top federal agency subcomponents for effective leadership, empowerment, fairness, teamwork and strategic management.  Assistant Attorney General Moreno has made it a priority to promote diversity in the workplace and a better quality of life for all employees.

Personal Background

Assistant Attorney General Moreno was born in Cartagena, Colombia, and immigrated with her family to the United States as a child.  After receiving her law degree from New York University in 1990, she joined the law firm of Hogan & Hartson in Washington, D.C., and worked in the firm’s environmental and litigation practice groups.  In 1994, President Clinton appointed Moreno to the Department of Justice, where she led significant environmental enforcement initiatives and expanded the Environment and Natural Resources Division’s international program.  In 2001, she joined the law firm of Spriggs & Hollingsworth in Washington, D.C., where she was of counsel and then a partner, specializing in environmental and mass tort litigation.  In 2006, she assumed the position of counsel, corporate environmental programs at the General Electric Company, where she worked until her confirmation as Assistant Attorney General in 2009.  Throughout her career, Assistant Attorney General Moreno has been strongly committed to public service, and has served pro bono as general counsel of the Hispanic National Bar Association and president of the Hispanic Bar Association of the District of Columbia.  She also has held leadership positions with the American Bar Association, the District of Columbia Bar, the Washington Lawyers’ Committee for Civil Rights and Urban Affairs, and the Center for International Environmental Law.  

 

Two employees of a U.S. broker-dealer and a senior official in Venezuela’s state economic development bank have been charged in New York’s federal court for their alleged roles in a massive international bribery scheme.

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

According to the criminal complaint unsealed today, Tomas Alberto Clarke Bethancourt (Clarke) and Jose Alejandro Hurtado – who were both employees of a U.S. broker-dealer (Broker-Dealer) – and Maria de los Angeles Gonzalez de Hernandez (Gonzalez) – who is a senior official in Venezuela’s state economic development bank, Banco de Desarrollo Económico y Social de Venezuela (BANDES) – are accused of conspiring to pay bribes to Gonzalez in exchange for her directing BANDES’s financial trading business to the Broker-Dealer.  Gonzalez, 54, a resident of Caracas, Venezuela, was arrested in Miami on May 3, 2013.  Clarke, 43, and Hurtado, 38, were also arrested Friday in Miami, where they reside.  All three defendants were presented yesterday in federal court in Miami and remain in custody. 

   “Today’s announcement is a wake-up call to anyone in the financial services industry who thinks bribery is the way to get ahead,” said Acting Assistant Attorney General Raman. “The defendants in this case allegedly paid huge bribes so that foreign business would flow to their firm.  Their return on investment now comes in the form of criminal charges carrying the prospect of prison time.  We will not stand by while brokers or others try rig the system to line their pockets, and will continue to vigorously enforce the FCPA and money laundering statutes across all industries.”

“The defendants’ arrests lay bare a web of bribery and corruption in which employees of a U.S. broker-dealer allegedly generated tens of millions of dollars through transactions in order to fund kickbacks to a Venezuelan government official in exchange for her directing the Venezuelan economic development bank’s financial trading business to their employer,” said U.S. Attorney Bharara. “As alleged, the defendants also engaged in international money laundering to carry out their corrupt scheme.  This Office, along with all of our federal partners, is committed to holding individuals who violate the Foreign Corrupt Practices Act to account.”

  “As alleged, the defendants conspired to use Venezuela’s economic development bank as their personal piggy bank,” said FBI Assistant Director-in-Charge Venizelos. “Clarke and Hurtado reaped huge commissions from their trading of the bank’s assets, and kicked back significant sums to Gonzalez.  The brazenness of the alleged scheme was exemplified in their buying bank bonds and selling them back on the same day.”

  In a separate action, the U.S. Securities and Exchange Commission (SEC) announced civil charges against Clarke, Hurtado, and two others.

According to the allegations in the criminal complaint unsealed today, the forfeiture complaint, and other documents filed in Manhattan federal court, Clarke and Hurtado worked or were associated with the Broker-Dealer, based in New York City, principally through its Miami offices.  In 2008, the Broker-Dealer established a group called the Global Markets Group, which included Clarke and later Hurtado, and which offered fixed income trading services to institutional clients.  One of the Broker-Dealer’s clients was BANDES.  Gonzalez was an official at BANDES and oversaw the development bank’s overseas trading activity.  At her direction, BANDES conducted substantial trading through the Broker-Dealer.  Most of the trades executed by the Broker-Dealer on behalf of BANDES involved fixed income investments for which the Broker-Dealer charged the bank a mark-up on purchases and a mark-down on sales. 

From April 2009 through June 2010, Clarke, Hurtado, and Gonzalez participated in a bribery scheme in which Gonzalez directed trading business she controlled at BANDES to the Broker-Dealer, and in return, agents and employees of the Broker-Dealer split the revenue the Broker-Dealer generated from this trading business with Gonzalez.  During this time period, the Broker-Dealer generated over $60 million in mark-ups and mark-downs from trades with BANDES.  Agents and employees of the Broker-Dealer, including Clarke and Hurtado, devised a split with Gonzalez of the commissions paid by BANDES to the Broker-Dealer.  Emails, account records, and other documents collected from the Broker-Dealer and other sources reveal that Gonzalez received a substantial share of the revenue generated by the Broker-Dealer for BANDES -related trades.  Specifically, Gonzalez received monthly kickbacks from Broker-Dealer agents and employees that were frequently in six-figure amounts.

Some of the trades the Broker-Dealer executed for BANDES had no discernible business purpose.  For instance, in January 2010, the Broker-Dealer executed at least two round-trip trades between itself and BANDES for the same bonds on the same day.  In other words, the Broker-Dealer bought certain bonds from BANDES and then immediately sold those same bonds back to the bank.  The result of the trades was that BANDES was left with the same bond holdings as before the trades, except that it had paid the Broker-Dealer approximately $10.5 million in mark-ups in the course of the two round-trip transactions.  

Certain payments to Gonzalez directly from Hurtado and an entity controlled by Clarke totaled at least $3.6 million. When added together with other payments referenced in the Complaint, Gonzalez received a total of at least $5 million.    

To further conceal the scheme, the kickbacks to Gonzalez were often paid using intermediary corporations and offshore accounts that she held in Switzerland, among other places.  For instance, Clarke used an account he controlled in Switzerland to transfer funds to an account Gonzalez controlled in Switzerland.  Gonzalez then transferred some of this money to an account she held in the United States.  Additionally, Hurtado and his spouse received substantial compensation from the Broker-Dealer, portions of which Hurtado transferred to an account held by Gonzalez in Miami and to an account held by an associate of Gonzalez in Switzerland.  Hurtado also sought and received reimbursement from Gonzalez for the payment of U.S. income taxes related to the money that he used to make kickback payments to Gonzalez. 

In addition to the criminal complaint, on May 6, 2013, the government filed a civil forfeiture action in Manhattan federal court, seeking the forfeiture of assets held in a number of bank accounts associated with the scheme, including several bank accounts located in Switzerland.  The forfeiture complaint also seeks the forfeiture of several properties in the Miami area related to Hurtado that were purchased with his proceeds from the scheme.  As set forth in the forfeiture complaint, in addition to Gonzalez, another BANDES official, identified as CC-1 in the forfeiture complaint, also received kickback payments as part of the scheme.  Also on May 6, 2013, the Court issued seizure warrants for multiple bank accounts and a restraining order relating to the Miami properties.
                                                                                        
This ongoing investigation is being conducted by the FBI, with assistance from the SEC and the Justice Department’s Office of International Affairs. Assistant Chief James Koukios and Trial Attorneys Maria Gonzalez Calvet and Aisling O’Shea of the Criminal Division’s Fraud Section and Assistant United States Attorneys Harry A. Chernoff and Jason H. Cowley of the Southern District of New York’s Securities and Commodities Fraud Task Force are in charge of the prosecution.  Assistant United States Attorney Carolina Fornos is also responsible for the forfeiture aspects of the case.

Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa.

  The charges contained in the Complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.

A Romanian national pleaded guilty today to participating in an international, multimillion-dollar scheme to remotely hack into and steal payment card data from hundreds of U.S. merchants’ computers, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney for the District of New Hampshire John P. Kacavas and Holly Fraumeni, Resident Agent in Charge of the U.S. Secret Service, Manchester, N.H., Resident Office.

Adrian-Tiberiu Oprea, 29, of Constanta, Romania, pleaded guilty in U.S. District Court in the District of New Hampshire to one count of conspiracy to commit computer fraud, one count of conspiracy to commit wire fraud and two counts of conspiracy to commit access device fraud.

The indictment to which Oprea pleaded guilty charges that, from approximately 2009 to 2011, he conspired with co-defendants Iulian Dolan and Cezar Butu to hack into hundreds of U.S.-based computers to steal credit, debit and payment account numbers and associated data (collectively “payment card data”) that belonged to U.S. cardholders.

According to the indictment, Oprea and Dolan remotely hacked into U.S. merchants’ “point-of-sale” (POS) or “check out” computer systems, where customers’ payment card data was electronically stored.   Specifically, Oprea used the Internet to identify vulnerable POS systems that were based in the United States.  After identifying a vulnerable system, Oprea gained access to the system and installed software programs called “keystroke loggers” (or “sniffers”) onto the POS systems.  These programs recorded and stored all of the data that was keyed into or swiped through the merchants’ POS systems, including customers’ payment card data.
 
Oprea retrieved the card data and then electronically transferred it to various electronic storage locations (“dump sites”) that he had set up.  Oprea later attempted to use the stolen payment card data to make unauthorized charges on, or transfers of funds from, the accounts.  He also attempted to transfer the stolen payment card data to other co-conspirators for their use for similar purposes. 

During the course of the conspiracy, the co-conspirators hacked into several hundred U.S. merchants’ POS systems and stole payment card data belonging to more than 100,000 U. S. cardholders.

Dolan and Butu previously pleaded guilty for their roles in the scheme.  Dolan is scheduled to be sentenced on Aug. 15, 2013.  In his plea agreement, Dolan agreed to be sentenced to serve seven years in prison.  On Jan. 7, 2013, Butu was sentenced to serve 21 months in prison.
 
The case was investigated by the U.S. Secret Service, with the assistance of the New Hampshire State Police and Romanian authorities.

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

Xavier Jiménez-Benceví, aka “Xavi,” 28, faces life in prison following his conviction of murdering Delia Sánchez-Sánchez, a federal witness on a drug trafficking case, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and U.S. Attorney Rosa Emilia Rodríguez-Vélez.  

On April 30, 2013, Jiménez-Benceví was convicted of four counts of murder of a federal witness, possession of a firearm, attempted kidnapping and possession of a machine gun. According to court records and evidence at trial, on June 21, 2010, Jiménez-Benceví murdered a woman he believed was about to report his drug distribution activities to federal agents. He conspired with others to lure the woman, Delia Sánchez-Sánchez, to a public location, and then he fatally shot her.

 The counts of conviction on capital murder charges necessitated a separate penalty phase of the trial, which began on May 1, 2013. Today, the jury announced it was unable to reach a unanimous sentencing verdict. As a result, a sentence of life in prison will be imposed on Aug. 6, 2013.  The federal system does not have parole.

The case was investigated by the FBI and the Puerto Rico Police Department, and prosecuted by Assistant U.S. Attorneys José Capó-Iriarte, Ilianys Rivera-Miranda and Luke V. Cass and Trial Attorney James Dennis Peterson of the Capital Case Unit of the Justice Department’s Criminal Division.

Today the U.S. Marshals Service (USMS) concluded Operation Guardian, a three-year, national initiative specifically targeting the country’s most dangerous noncompliant sex offenders. Deputy Marshals and law enforcement partners arrested 345 individuals who had failed to register with state authorities as required by law.

 

Marshals worked with state and local officials to identify specific non-registering fugitives based on their danger to the public and prior convictions for sex offenses. As of today, USMS investigators have located 427 offenders of 444 sought (or 96 percent of those targeted), including 82 individuals found outside the United States. These individuals represent more than 500 prior convictions for sexual offenses.

 

“I’d like to thank each of the Deputy U.S. Marshals and state and local law enforcement officials who contributed to the success of this important operation.  These dedicated professionals have helped to make our communities safer by taking dangerous fugitives off the streets,” said Attorney General Eric Holder. “Today’s announcement sends a clear message: that the Justice Department and its allies are firmly committed to safeguarding our nation’s young people from all forms of exploitation and abuse.  And we are determined to bring noncompliant sex offenders to justice.”

 

“The U.S. Marshals Service will not tolerate noncompliant and violent sex offenders who evade the law. The message we send to these individuals is there is nowhere you can hide,” said USMS Director Stacia Hylton. “Operation Guardian enabled us to bring to bear the full weight of international, federal, state and local law enforcement resources and intelligence to locate the most egregious sex offenders—those who have victimized innocent children.”

 

The USMS assigns 129 criminal investigators to conduct sex offender, non-registrant investigations on a full-time basis. Operation Guardian was a collaborative effort led by the USMS in cooperation with Interpol, the Diplomatic Security Service, Customs and Border Protection, and the National Center for Missing and Exploited Children (NCMEC).

 

“The National Center for Missing & Exploited Children is proud to partner with the U.S. Marshals in helping to protect our nation’s children,” said John Ryan, chief executive officer, NCMEC.  “We applaud the overwhelming success of Operation Guardian which located hundreds of the country’s most dangerous noncompliant sex offenders.”

 

Among those arrested during Operation Guardian were:

·          Lee Roy Ramirez, one of “Wisconsin’s Most Wanted,” arrested on April 22, 2013, in Portland, Ore. Ramirez was wanted by the Wisconsin Department of Corrections since 2003 for probation violation on an original charge of second degree sexual assault of a child. The intensive fugitive investigation covered several states and ultimately led investigators to Oregon. Ramirez is in custody in Oregon awaiting extradition back to Wisconsin.

 

·          James K. Jenkins, arrested on Oct. 9, 2012, in Garland, Texas. Jenkins was wanted in DeKalb County, Ga., for failure to register as a sex offender and for probation violation based on a weapons offense. His original offense occurred Dec. 15, 1999, when he raped a 15-year-old girl. He was convicted of statutory rape and sentenced to three years in prison, 7 years of probation and required to register as a sex offender in the state of Georgia. Jenkins moved and did not notify the probation office or the sheriff’s office of his location. In October 2012, a Crimestoppers program received an online tip that placed Jenkins in Garland. Investigators conducted surveillance and arrested Jenkins with a loaded .38-caliber handgun in close proximity.

 

·          David Sherant, arrested Oct. 3, 2012, by Deputy U.S. Marshals from the District of Nevada and members of the Las Vegas SOAP Task Force. Sherant was wanted by the Utah Department of Corrections for violating his term of supervision by failing to register as a sex offender. He was convicted in August 2000 of sexual exploitation of a minor. After release from the Utah State Prison, Sherant absconded parole, and failed to register as a sex offender as required by law. Investigators learned that the 31-year-old Sherant was passing himself off as 18-year-old “Mikey Miller” currently residing in Las Vegas. On Oct. 15, 2012, Sherant was extradited to Utah. His probation was revoked and he was remanded to the custody of the Utah Department of Corrections.

 

·          Darrell Craig Sinclair, arrested on Feb. 28, 2012, in Mexico. Sinclair was wanted by the Riverside County, Calif., Sheriff’s Department for almost 10 years on a $500,000 arrest warrant for failure to register as a sex offender. He was previously convicted of one count of lewd acts against a child in Los Angeles County in 1976, and seven counts of lewd acts against a child in Orange County, Calif., in 1983. USMS investigators determined that Sinclair was in Ajajic, Mexico, and he was taken into custody by Mexican Immigration Officials. Mexican immigration officials escorted Sinclair to Los Angeles International Airport, where he was arrested by Deputy U.S. Marshals.

 

·          Michael Rybkin, arrested on Nov. 9, 2010, in New York. Rybkin was wanted by the Hudson County, N.J., Sheriff’s Department for a parole violation and by Immigration and Customs Enforcement on a warrant of deportation, and is a sex offender in the State of New Jersey. Rybkin is a German citizen. USMS investigators developed information that Rybkin was residing in New York City and using the internet. Rybkin, who was previously banned from New York City Public Libraries, was observed masturbating in front of two female children in October 2010 at a library, but eluded capture. On Oct. 27, 2010, Rybkin was charged by the USMS with violating the Adam Walsh Act and a federal warrant was issued for his arrest. On Nov. 9, 2010, USMS investigators arrested Rybkin at the Grand Central Branch of the New York City Public Library. On March 10, 2011, Rybkin pleaded guilty to the Adam Walsh Act violation, and was sentenced Jan. 19, 2012, by U.S. District Court Judge William Pauley to 63 months incarceration and lifetime supervised release on electronic monitoring.

 

The Behavioral Analysis Unit at the USMS National Sex Offender Targeting Center worked with the investigators to identify information related to the fugitives across a number of personal or social dimensions, including past sexual offending behavior. The prior convictions of the located offenders represent hundreds of victims and thousands of known sexual assaults. Most of the sexual assault events were engaged against children, and many involved extreme violence.

 

The NCMEC estimates more than 700,000 sex offenders reside in the United States and that more than 100,000 are classified as noncompliant or unregistered. Since its inception in 2006, the Sex Offender Investigations Branch has planned and executed more than 900 sex offender compliance and enforcement operations. During these operations, the USMS partnered with more than 4,800 state and local law enforcement agencies to conduct more than 150,000 compliance checks.

A Las Vegas mortgage agent was sentenced late yesterday to serve 15 months in prison for her participation in a mortgage fraud scheme that netted more than $1.2 million in fraudulent mortgage loans, Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Daniel G. Bogden of the District of Nevada and Acting Special Agent in Charge William C. Woerner of the FBI’s Las Vegas Field Office announced today. 

Heidi Haischer, 44, was sentenced by U.S. District Judge Miranda M. Du in the District of Nevada.  In addition to her prison term, Haischer was sentenced to serve three years of supervised release. 

In November 2012, after a four-day trial, a federal jury in Las Vegas found Haischer guilty of one count of wire fraud and one count of conspiracy to commit wire fraud for submitting fraudulent loan documents to purchase two homes.

According to court documents and evidence presented at trial, Haischer participated in a mortgage fraud scheme while employed as a mortgage broker in Nevada.  From December 2006 to January 2007, Haischer and her co-conspirators fraudulently secured loans totaling over $1 million to obtain properties with the intent to flip and sell them for profit.  Evidence at trial showed that Haischer and her co-conspirators subsequently enriched themselves by collecting brokerage commissions generated by the sales of the properties.

The court documents and trial evidence demonstrated that Haischer submitted multiple loan applications in which she overstated her income, submitted false verification of employment and misrepresented her intent to reside in one of the properties as her primary residence.  Additionally, Haischer presented inflated bank account balances supported by forged bank statements to make it appear that she had assets she did not have, in order to help qualify for mortgage loans for which she otherwise would not have been eligible. 

Co-conspirator Kelly Nunes was convicted in a related case in Las Vegas on Feb. 2, 2012, of one count of bank fraud and one count of conspiracy to commit wire and bank fraud.  On July 11, 2012, Nunes was sentenced to 51 months in prison.

This case was investigated by the FBI.  Trial Attorneys Thomas B.W. Hall and Brian R. Young of the Criminal Division’s Fraud Section prosecuted the case, with assistance from the U.S. Attorney’s Office for the District of Nevada.

This case was a result of efforts by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.StopFraud.gov.

Corey Thompson was sentenced today to serve 30 months in prison for his involvement in a sophisticated stolen identity refund fraud conspiracy, the Justice Department and the Internal Revenue Service (IRS) announced. In July 2012, Thompson pleaded guilty to one count of conspiracy to file false claims and to one count of aggravated identity theft.

According to court documents, in January 2012, Corey Thompson and his co-conspirators filed at least 27 fraudulent 2011 tax returns that requested a total of $91,304 in refunds. Thompson and his co-conspirators obtained the means of identification from a prison guard and from an employee at a debt collection agency.

 

Court documents also state that in 2011 and 2012, Thompson worked as an independent contractor for a cable company. As an independent contractor, Thompson installed cable and internet access. To perpetrate the conspiracy, Thompson hijacked the internet service of customers for whom he had performed work. From his home, Thompson used his laptop and his specialized knowledge and equipment to essentially shut down the customer’s internet and then take over that customer’s internet. Thompson would then file false tax returns using the hijacked internet which made it appear as if the false tax returns were being filed by the customer. Thompson directed the tax refunds to be placed on pre-paid debit cards. The pre-paid debit cards were intercepted by the U.S. Postal Service.

 

The case was investigated by Special Agents of the IRS - Criminal Investigation and Postal Inspectors of the U.S. Postal Service. Trial attorneys Jason H. Poole, Justin Gelfand and Michael Boteler of the Justice Department's Tax Division and Assistant U.S. Attorney Jared Morris prosecuted the case.

 

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

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WASHINGTON – Corey Thompson was sentenced today to serve 30 months in prison for his involvement in a sophisticated stolen identity refund fraud conspiracy, the Justice Department and the Internal Revenue Service (IRS) announced. In July 2012, Thompson pleaded guilty to one count of conspiracy to file false claims and to one count of aggravated identity theft.

According to court documents, in January 2012, Thompson and his co-conspirators filed at least 27 fraudulent 2011 tax returns that requested a total of $91,304 in refunds. Thompson and his co-conspirators obtained the means of identification from a prison guard and from an employee at a debt collection agency.

Court documents also state that in 2011 and 2012, Thompson worked as an independent contractor for a cable company. As an independent contractor, Thompson installed cable and internet access. To perpetrate the conspiracy, Thompson hijacked the internet service of customers for whom he had performed work. From his home, Thompson used his laptop and his specialized knowledge and equipment to essentially shut down the customer’s internet and then take over that customer's internet. Thompson would then file false tax returns using the hijacked internet which made it appear as if the false tax returns were being filed by the customer. Thompson directed the tax refunds to be placed on pre-paid debit cards. The pre-paid debit cards were intercepted by the U.S. Postal Service.

The case was investigated by Special Agents of the IRS - Criminal Investigation and Postal Inspectors of the U.S. Postal Service. Trial attorneys Jason H. Poole, Justin Gelfand and Michael Boteler of the Justice Department's Tax Division and Assistant U.S. Attorney Jared Morris prosecuted the case.

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

A former health care clinic director and licensed clinical psychologist pleaded guilty today in connection with a health care fraud scheme involving defunct health provider Health Care Solutions Network Inc. (HCSN), announced 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.

Alina Feas, 53, of Miami, pleaded guilty before U.S. District Judge Cecilia M. Altonaga in the Southern District of Florida to one count of conspiracy to commit health care fraud and one substantive count of health care fraud. 

During the course of the conspiracy, Feas was employed as a therapist and clinical director of HCSN’s Partial Hospitalization Program (PHP).  A PHP is a form of intensive treatment for severe mental illness.  HCSN operated two community mental health centers in Florida and one community mental health center in North Carolina.

In her capacity as clinical director, Feas oversaw the entire clinical program and supervised therapists and other personnel at HCSN in Florida (HCSN-FL).  Feas also conducted group therapy sessions when therapists were absent. 

According to court documents, Feas was aware that HCSN-FL paid illegal kickbacks to owners and operators of assisted living facilities (ALF) in Miami-Dade County in exchange for patient referral information to be used to submit false and fraudulent claims to Medicare and Medicaid.  Feas knew that many of the ALF referral patients were ineligible for PHP services because they suffered from either mental retardation, dementia or Alzheimer's disease, which are not effectively treated by PHP services. 

Court documents reveal that Feas submitted claims to Medicare for individual therapy she purportedly provided to HCSN-FL patients using her personal Medicare provider number, knowing that HCSN-FL was simultaneously billing the same patients for PHP services.  Feas continued to bill Medicare under her personal provider number while HCSN in North Carolina (HCSN-NC) simultaneously submitted false and fraudulent PHP claims.

Feas was aware that HCSN-FL personnel were fabricating patient medical records, according to court documents. Many of these medical records were created weeks or months after the patients were admitted to HCSN-FL for purported PHP treatment and were utilized to support false and fraudulent billing to government sponsored health care benefit programs, including Medicare and Florida Medicaid.  During her employment at HCSN-FL, Feas signed fabricated PHP therapy notes and other medical records used to support false claims to government sponsored health care programs.

At HCSN-NC, Feas was aware that her co-conspirators were fabricating medical records to support the fraudulent claims she was causing to be submitted to Medicare.  Feas was aware that a majority of the fabricated notes were created at the HCSN-FL facility for patients admitted to HCSN-NC.  In some instances, Feas signed therapy notes and other medical records even though she never provided services at HCSN-NC. 

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

Fifteen defendants have been charged for their alleged roles in the HCSN health care fraud scheme, and 13 defendants have pleaded guilty.  On April 25, 2013, Wondera Eason was convicted, following a five-day jury trial, on one count of conspiracy to commit health care fraud for her role in the scheme at HCSN.  Alleged co-conspirator Lisset Palmero is scheduled for trial on June 3, 2013.  Defendants are presumed innocent until proven guilty at trial.

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

A former medical doctor pleaded guilty today in Washington, D.C., to engaging in illicit sexual conduct in Kenya, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney for the District of Columbia Ronald C. Machen Jr. and Assistant Director in Charge Valerie Parlave of the FBI’s Washington Field Office. 

John D. Ott, 67, pleaded guilty before U.S. District Judge Reggie B. Walton in the District of Columbia to one count of engaging in illicit sexual conduct in a foreign place.  Ott was charged in an information filed on March 21, 2012.

According to filed court documents and proceedings, Ott was a former medical doctor who worked for non-governmental organizations and hospitals in Kenya.  Court records show that Ott also started an orphanage in Kenya.  Ott admitted that between approximately January 2004 and September 2012, he engaged in illicit sexual conduct in Muhuru Bay, Sori and Kendu Bay, Kenya, with at least 14 minors, who ranged in age from approximately nine to 17 years old when the illicit sexual conduct began.  Ott admitted that he frequently paid for schooling and provided other financial support, including housing, for minors with whom he engaged in illicit conduct.

Ott has been in federal custody since he was arrested in December 2012, following his deportation from Tanzania.  Engaging in illicit sexual conduct in a foreign place carries a maximum penalty of 30 years in prison and a $250,000 fine.  Ott’s sentencing has been scheduled for July 26, 2013.

The case is being prosecuted by Trial Attorney Keith A. Becker of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS) and Assistant U.S. Attorney Ari Redbord of the District of Columbia.  The investigation was conducted by the FBI’s Washington Field Office.  Significant assistance was provided by the Criminal Division’s Office of International Affairs.

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

The Justice Department reached a settlement agreement today with DeKalb County, Ga., school district to resolve the department’s investigation into allegations of religious and national origin harassment of a Sikh middle school student. Counsel for the Sikh Coalition filed the complaint with the department, alleging that the student had been repeatedly targeted with verbal and physical harassment because of his Sikh faith. The department has authority to investigate and resolve complaints of religious and national origin harassment through its enforcement of Title IV of the Civil Rights Act of 1964.

 

Following an inquiry into the student-specific complaints, the department notified the district of its concerns that the district had failed to respond promptly and appropriately to the Sikh Coalition’s allegations of harassment, including allegations that the student was called “Aladdin” because he wore a turban and was told by a fellow student to “go back to his country.” The department also raised concerns that the district had not investigated witness statements that the student had been called a “terrorist” and that there was a history of fellow students targeting him because of his turban. The department also found that the disciplinary measures the district did take had not been effective in ending the harassment, and that the student feared continued harassment.

 

The district worked cooperatively with the department to resolve the complaint and ensure greater protections for the student. The settlement agreement, which will be in effect until the end of the 2014-2015 school year, requires the district to: work with a consultant to develop and implement anti-harassment training at the student’s middle and high school; immediately implement a safety plan to ensure that the student is safe at school and, should incidents of harassment occur, that the district responds quickly and effectively; and meet with the student, his family, and administrators from his middle school and the high school where he will enroll, to identify key school personnel who can support the student should any future incidents of harassment occur. The department has opened a separate and ongoing inquiry into whether the district’s anti-harassment policies meet federal standards, whether its policies are consistently implemented, and whether employees are adequately trained to implement those policies.

 

“Students of all faiths must be protected from harassment and other forms of discrimination,” said Jocelyn Samuels, Principal Deputy Assistant Attorney General for the Civil Rights Division.  “We commend the district for stepping forward and putting student safety first. We are encouraged by the district’s resolve to support and provide anti-harassment training on issues facing students from the Sikh, Muslim, Arab-American and South Asian communities.”   

 

“Every student should be able to attend school without fear of being harassed and bullied because of his skin color or religious beliefs,” said United States Attorney Sally Quillian Yates. “I am encouraged by DeKalb County’s willingness to take immediate steps to ensure that students attending DeKalb County schools are free of this type of harassment and bullying.”

 

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

Related Materials:

DeKalb Settlement Agreement

FALLS CHURCH, Va. – The Executive Office for Immigration Review (EOIR) today announced the investiture of five immigration judges. Chief Immigration Judge Brian M. O’Leary presided over the investiture during a ceremony held at EOIR’s headquarters on May 3, 2013.

After a thorough application process, Attorney General Eric Holder appointed Timothy R. Everett, J. Traci Hong, Amy T. Lee, Elizabeth H. McGrail and John C. Odell to their new positions. “EOIR is committed to continuing to apply its resources toward its primary mission,” said O’Leary. “The arrival of these five professionals brings our immigration judge corps to nearly 260, all of whom will work to help mitigate EOIR’s pending caseload.”

Biographical information follows.

Timothy R. Everett, Immigration Judge, Los Angeles Immigration Court

Attorney General Eric Holder appointed Judge Everett in April 2013. Judge Everett received a bachelor of arts degree in 1980 from Louisiana State University; a master of arts degree and a juris doctorate in 1986 from Tulane University and Tulane University Law School respectively; and a master of studies in environmental law in 2000 from Vermont Law School. From March 2009 to April 2013, Judge Everett served as an assistant chief counsel, Department of Homeland Security, U.S. Immigration and Customs Enforcement, Los Angeles. From January 2000 to March 2009, he was a solo practitioner in Los Angeles. During that time from March 2000 to December 2000, he was an interim directing attorney for the Central American Resource Center in Los Angeles. From August 1999 to December 1999, Judge Everett worked as a legal intern at the National Wildlife Foundation in Washington, D.C. From May 1996 to August 1998, he was a solo practitioner in Los Angeles. From May 1991 to May 1996, Judge Everett served as a directing attorney of the Domestic Legal Department at El Rescate Legal Services in Los Angeles. From April 1990 to May 1991, he was a staff attorney at Ayuda Legal Services in Washington, D.C. From 1989 to 1990, he served as an associate attorney at the Law Office of William Van Wyke in Washington, D.C. Judge Everett is a member of the State Bar of California and the Florida Bar.

J. Traci Hong, Immigration Judge, Los Angeles Immigration Court

Attorney General Eric Holder appointed Judge Hong in April 2013. Judge Hong received a bachelor of arts degree in 1992 from The University of Texas at Austin and a juris doctorate in 1995 from The University of Texas School of Law. From February 2011 to April 2013, she served as a senior policy advisor for the Department of Homeland Security, Office for Civil Rights and Civil Liberties in Washington, D.C. From March 2007 to January 2011, Judge Hong served as counsel for the U.S. House of Representatives, Committee on the Judiciary, Subcommittee on Immigration, Citizenship, Refugees, Border Security, and International Law. From June 2003 to March 2007, she worked for the Asian American Justice Center in Washington, D.C. as an immigration staff attorney and the immigration program director. From January 2000 to May 2003, Judge Hong was a staff attorney for the American Immigration Law Foundation in Washington, D.C. From August 1995 to December 1999, she practiced immigration law with the law firm of Tidwell Swaim & Associates, P.C., in Dallas. Judge Hong is a member of the State Bar of Texas.

Amy T. Lee, Immigration Judge, Los Angeles Immigration Court

Attorney General Eric Holder appointed Judge Lee in April 2013. Judge Lee received a bachelor of arts degree in 1992 from Stanford University; a juris doctorate in 1995 from University of the Pacific, McGeorge School of Law; and a master of public administration in 2001 from California State University, East Bay. From February 2008 to April 2013, she was an attorney with Fallon, Bixby, Cheng & Lee, Inc. in San Francisco. From January 2006 to February 2008, Judge Lee was an attorney with the Law Offices of David M. Lederman in Antioch, Calif. From January 2005 to December 2005, she was a solo practitioner in Oakland, Calif. From January 2001 to January 2005, Judge Lee served as senior corporate counsel for PeopleSoft, Inc. From September 1995 to December 2000, she served as an assistant district counsel for the Department of Justice, U.S. Immigration and Naturalization Service, in San Francisco. Judge Lee is a member of the State Bar of California.

Elizabeth H. McGrail, Immigration Judge, Los Angeles Immigration Court

Attorney General Eric Holder appointed Judge McGrail in April 2013. Judge McGrail received a bachelor of arts degree in 1985 from Vanderbilt University and a juris doctorate in 1989 from the College of William and Mary, Marshall-Wythe School of Law. From 2008 to April 2013, she served as legal director at Capital Area Immigrants’ Rights Coalition (CAIR Coalition) in Washington, D.C. From 2007 to 2008, Judge McGrail served as an of counsel for the Law Office of Richard S. Bromberg in Washington, D.C. From 2005 to 2007, she served as the detention project director and legal consultant for CAIR Coalition. From 1994 to 2005, Judge McGrail was a solo practitioner in Washington, D.C. From 1991 to 1994, she was an associate at Wasserman, Mancini & Chang in Washington, D.C. From 1989 to 1990, Judge McGrail was an associate at Brown & Wood in New York. Judge McGrail is a member of the District of Columbia Bar.

John C. Odell, Immigration Judge, Tacoma Immigration Court

Attorney General Eric Holder appointed Judge Odell in April 2013. Judge Odell received a bachelor of science degree in 1983 from the United States Coast Guard Academy and a juris doctorate in 1994 from the Seattle University School of Law. From October 2007 to April 2013, he served as an assistant chief counsel, Department of Homeland Security, U.S. Immigration and Customs Enforcement, in Seattle, Wash., where, from December 2008 to December 2010, he served as a special assistant U.S. attorney. From 1997 to 2007, Judge Odell served in the U.S. Coast Guard where he held various legal positions, including staff judge advocate, 13th Coast Guard District, Seattle, and Coast Guard Academy, New London, Conn.; military judge, U.S. Coast Guard; senior defense counsel, Naval Legal Services Office, Bremerton, Wash.; and assistant legal officer, 13th Coast Guard District. Judge Odell is a member of the Washington State Bar.

- EOIR -

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

Executive Office for Immigration Review

A patient recruiter for a Miami health care company was sentenced today to serve 37 months in prison for his participation in a $20 million Medicare fraud scheme, announced 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.

Manuel Lozano, 65, was sentenced by U.S. District Judge Joan A. Lenard in the Southern District of Florida.  In addition to his prison term, Lozano was sentenced to serve two years of supervised release and ordered to pay $1,851,000 in restitution, jointly and severally with co-conspirators.

In February 2013, Lozano pleaded guilty to one count of conspiracy to receive health care kickbacks.

According to court documents, Lozano was a patient recruiter who worked for Serendipity Home Health, a Miami home health care agency that purported to provide home health and therapy services to Medicare beneficiaries.

According to court documents, from approximately April 2007 through March 2009, Lozano recruited patients for Serendipity, and in doing so he solicited and received kickbacks and bribes from the owners and operators of Serendipity in return for allowing the company to bill the Medicare program on behalf of the patients he recruited.  These Medicare beneficiaries were billed for home health care and therapy services that were medically unnecessary and/or not provided.

From approximately January 2006 through March 2009, Serendipity submitted approximately $20 million in claims for home health services that were not medically necessary and/or not provided, and Medicare paid approximately $14 million for these fraudulent claims. As a result of Lozano’s participation in the illegal scheme, the Medicare program was fraudulently billed more than $1 million but less than $2.5 million for purported home health care services.

 In a related case, on June 21, 2012, Ariel Rodriguez and Reynaldo Navarro, the owners and operators of Serendipity, were sentenced to 73 and 74 months in prison, respectively, and ordered to pay $14 million in restitution and severally with each other and their co-defendants, Melissa Rodriguez and Ysel Salado. Ariel and Melissa Rodriguez, Navarro and Salada each pleaded guilty in March 2012 to one count conspiracy to commit health care fraud.

This case is being prosecuted by Assistant Chief Joseph S. Beemsterboer of the Criminal Division’s Fraud Section.  The 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.

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.

NEW YORK -- Immigration Judge Terry Bain from the Executive Office for Immigration Review, New York Immigration Court, delivered the keynote speech and administered the oath of allegiance to approximately 150 candidates during a naturalization ceremony at 26 Federal Plaza in New York on May 3, 2013. The New York District Office of U.S. Citizenship and Immigration Services, Department of Homeland Security, hosted the ceremony.

Biographical Information

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

- EOIR -

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

Executive Office for Immigration Review

The Justice Department announced today that it will monitor elections on May 7, 2013, in the towns of Clarksdale, Como and Ruleville, Miss., and in Charleston County, S.C., to ensure compliance with the Voting Rights Act of 1965. The Voting Rights Act prohibits discrimination in the election process on the basis of race, color or membership in a minority language group.

 

Under the Voting Rights Act, the Justice Department is authorized to ask the U.S. Office of Personnel Management (OPM) to send federal observers to jurisdictions that are certified by the attorney general or by a federal court order.  Federal observers will be assigned to monitor polling place activities in Clarksdale, Como and Ruleville based on the attorney general’s certification. The observers will watch and record activities during voting hours at polling locations, and Civil Rights Division attorneys will coordinate the federal activities and maintain contact with local election officials.

 

In addition, Justice Department personnel will monitor polling place activities in Charleston 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 OPM, as well as departmental staff, to monitor elections across the country.  To file complaints about discriminatory voting practices, including acts of harassment or intimidation, voters may call the Voting Section of the Justice Department’s Civil Rights Division at 1-800-253-3931.

 

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

The mastermind of a $29.1 million Medicare fraud scheme involving approximately 30 purported medical clinics pleaded guilty today in Detroit for his role in the scheme.

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

Sachin Sharma, 37, of Detroit, pleaded guilty before U.S. District Judge Denise P. Hood in the Eastern District of Michigan to one count of conspiracy to commit health care fraud and one count of tax evasion. 

According to court documents, Sharma oversaw and directed operations of a broad network of home health, psychotherapy and other purported medical clinics in and around Detroit, including Reliance Home Care LLC, First Choice Home Health Care Services Inc. and Haven Adult Day Care Center LLC.  Working with co-conspirators, Sharma created and/or operated these companies for the purpose of billing Medicare for home health and psychotherapy services that Sharma knew were not provided.  Court documents show that Sharma paid kickbacks to patient recruiters in order to obtain the information of Medicare beneficiaries, which he then used at these companies to bill Medicare for services that were not medically necessary and/or were not provided to these beneficiaries. 

Court documents show that Sharma trained others on techniques to defraud Medicare and to conceal the fraud, and directed employees to fabricate and alter medical documents to give the false impression that home health and psychotherapy services were provided when, in fact, they were not. 

Sharma admitted that from 2007 through 2011, he received substantial proceeds of the fraud from these companies, but failed to report these proceeds on his individual federal income tax returns.  Sharma admitted that he filed no individual income tax returns from 2007 through 2011.

Court documents allege that between 2007 and 2012, Sharma caused these companies to submit approximately $29,171,017 in claims to Medicare for services that were not medically necessary and/or not provided. 

At sentencing, scheduled for Aug. 8, 2013, Sharma faces a maximum penalty of 10 years in prison and a $250,000 fine.

Sachin Sharma’s co-defendants Dana Sharma, Beverly Cooper and Clarence Cooper each previously pleaded guilty to one count of conspiracy to commit health care fraud for their roles in the scheme.  Co-defendants Abdul Malik al-Jumail, aka “Tony,” Felicar Williams and Jamella al-Jumail are scheduled for trial on June 10, 2013.  Co-defendant Firas Alky remains a fugitive.  Defendants are presumed innocent unless and until proven guilty at trial.

This case is being prosecuted by Trial Attorney William G. Kanellis and Deputy Chief Gejaa Gobena of the Criminal Division’s Fraud Section, with assistance from the Department of Justice Tax Division.  It was investigated by the FBI, HHS-OIG, and IRS-CI, 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.

The Justice Department announced today that, as part of its Barrier-Free Health Care Initiative, it has reached a settlement agreement with another health care provider, Medical Facilities of America XXIX Limited Partnership, t/a Burke Health and Rehabilitation Center in Burke, Va., to ensure that they provide effective communication to people who are deaf or have hearing loss. This settlement resolves allegations that Burke refused to provide a sign language interpreter for Melvin Warden, who is deaf, when a request was made on his behalf by Inova Fairfax via the AllScripts/Ecin system. This settlement addresses the requirements of the Americans with Disabilities Act (ADA) for health care providers, such as hospitals, rehabilitation centers, medical clinics, nursing homes and doctor’s offices, to provide effective communication to people who are deaf or have hearing loss in the provision of medical services.

 

The Department of Justice’s Barrier-Free Health Care Initiative is a partnership of the Civil Rights Division and U.S. Attorney’s offices across the nation to target enforcement efforts on a critical area for individuals with disabilities. The initiative, launched on the 22nd anniversary of the ADA in July 2012, includes the participation of more than 40 U.S. Attorney’s offices. 

 

To date, the department has entered into seven similar settlements with eight health care providers from across the United States regarding communication with people who are deaf or have hearing loss. In addition, the department reached four agreements in five weeks with health care providers regarding discrimination against individuals with HIV.

 

“Disability-based discrimination in health care is illegal under the Americans with Disabilities Act and may further compromise a person’s health when it limits a person’s full access to medical services,” said Eve L. Hill, Senior Counselor to the Assistant Attorney General for the Civil Rights Division. “The Department of Justice is committed to ensuring that all persons with disabilities are provided with equal access to health care services.”

 

Title III of the ADA requires health care providers to ensure that their communications with people with hearing disabilities are as effective as their communications with people without disabilities. To meet this obligation, health care providers, as well as other public accommodations, must provide auxiliary aids and services unless doing so would cause an undue burden to the facility or fundamentally alter the service being provided. The health care provider may not charge the individual with a disability for the cost of the auxiliary aid or service, including a sign language interpreter.

 

Under this settlement agreement, Burke will ensure effective communication, including providing qualified sign language interpreters, free of charge, to individuals who are deaf or who have hearing loss; establish a contract for the provision of sign language interpreter services; ensure that, for the duration of a patient’s treatment at Burke, at least one qualified sign language interpreter is available or on call for a patient or companion who is deaf or has hearing loss and whose primary means of communication is sign language; and train all staff on the provisions of the effective communication policy and procedures and the effective communication requirements of the ADA.

  

The department has a number of publications available to assist entities to comply with the ADA, including: a Business Brief on Communicating with People Who Are Deaf or Hard of Hearing in Hospital Settings, www.ada.gov/hospcombr.htm ; publications specific to health care providers, HIV discrimination, and effective communication with individuals with hearing and vision disabilities; and publications about tax credits available for providing access.  For more information on the ADA and to access these publications, visit www.ada.gov .  The Barrier-Free Health Care Initiative settlement agreements may be found at www.ada.gov/settlemt.htm .  For more information on the Barrier Free Health Care Initiative visit www.ada.gov/usao-agreements.htm .  Those interested in finding out more about these settlements or the obligations of public accommodations under the ADA may also call the Justice Department’s toll-free ADA information line at 800-514-0301 or 800-514-0383 (TDD), or access its ADA website at www.ada.gov .   ADA complaints may also be filed by email to [email protected] .

Algerian national Hamza Bendelladj, aka “Bx1,” has been extradited from Thailand to the United States to face charges in Atlanta for allegedly playing a critical role in developing, marketing, distributing and controlling “SpyEye,” a pernicious computer virus designed to steal unsuspecting victims’ financial and personally identifying information.

 The charges were announced today by Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Sally Quillian Yates of the Northern District of Georgia and FBI Special Agent in Charge Mark F. Giuliano of the Atlanta Field Office.

Bendelladj, 24, has been charged in a 23-count indictment that was returned on Dec. 20, 2011, and unsealed today.  The indictment charges Bendelladj with one count of conspiring to commit wire and bank fraud, 10 counts of wire fraud, one count of conspiracy to commit computer fraud and 11 counts of computer fraud.  Bendelladj is scheduled to be arraigned today in U.S. District Court in the Northern District of Georgia before U.S. Magistrate Judge Janet F. King.

On Jan. 5, 2013, Bendelladj was apprehended at Suvarnabhumi Airport in Bangkok, Thailand, while he was in transit from Malaysia to Egypt.  He was extradited from Thailand to the United States on May 2, 2013.

“Hamza Bendelladj has been extradited to the United States to face charges of controlling and selling a nefarious computer virus designed to pry into computers and extract personal financial information,” said Acting Assistant Attorney General Raman.  “The indictment charges Bendelladj and his co-conspirators with operating servers designed to control the personal computers of unsuspecting individuals and aggressively marketing their virus to other international cybercriminals intent on stealing sensitive information.  The extradition of Bendelladj to face charges in the United States demonstrates our steadfast determination to bring cybercriminals to justice, no matter where they operate.”

“No violence or coercion was used to accomplish this scheme, just a computer and an Internet connection,” said U.S. Attorney Yates.  “Bendelladj’s alleged criminal reach extended across international borders, directly into victims’ homes.  In a cyber-netherworld, he allegedly commercialized the wholesale theft of financial and personal information through this virus which he sold to other cybercriminals.  Cybercriminals take note; we will find you.  This arrest and extradition demonstrates our determination to bring you to justice.”

“The FBI has expanded its international partnerships to allow for such extraditions of criminals who know no borders,” said FBI Special Agent in Charge Giuliano.  “The federal indictment and extradition of Bendelladj should send a very clear message to those international cyber-criminals who feel safe behind their computers in foreign lands that they are, in fact, within reach.”

According to court documents, the SpyEye virus is malicious computer code or “malware,” which is designed to automate the theft of confidential personal and financial information, such as online banking credentials, credit card information, usernames, passwords, PINs and other personally identifying information.  The SpyEye virus facilitates this theft of information by secretly infecting victims’ computers, enabling cybercriminals to remotely control the computers through command and control (C&C) servers.  Once a computer is infected and under the cybercriminals’ control, a victim’s personal and financial information can be surreptitiously collected using techniques such as “web injects,” which allow cybercriminals to alter the display of web pages in the victim’s browser  in order to trick them into divulging personal information related to their financial accounts.  The financial data is then transmitted to the cybercriminals’ C&C servers, where  criminals use it to steal money from the victims’ financial accounts. 

According to court documents, from 2009 to 2011, Bendelladj and others allegedly developed, marketed and sold various versions of the SpyEye virus and component parts on the Internet and allowed cybercriminals to customize their purchases to include tailor-made methods of obtaining victims’ personal and financial information.  Bendelladj allegedly advertised the SpyEye virus on Internet forums devoted to cybercrime and other criminal activities.  In addition, Bendelladj allegedly operated C&C servers, including a server located in the Northern District of Georgia, which controlled computers infected with the SpyEye virus.  One of the files on Bendelladj’s C&C server in the Northern District of Georgia allegedly contained information from approximately 253 unique financial institutions.

If convicted, Bendelladj faces a maximum sentence of up to 30 years in prison for conspiracy to commit wire and bank fraud; up to 20 years for each wire fraud count; up to five years for conspiracy to commit computer fraud; up to five or 10 years for each count of computer fraud; and fines of up to $14 million dollars.

The public is reminded that the indictment contains only allegations, and the defendant is presumed innocent unless and until proven guilty.

This case is being investigated by the FBI and is being prosecuted by Special Assistant U.S. Attorney Nicholas Oldham and Assistant U.S. Attorney Scott Ferber of the Northern District of Georgia, and Trial Attorney Carol Sipperly of the Criminal Division’s Computer Crime and Intellectual Property Section.  Valuable assistance was provided by the Criminal Division’s Office of International Affairs, which worked with its international counterparts to effect the extradition.

A former consultant for Willbros International Inc. (Willbros International), a subsidiary of Houston-based Willbros Group Inc. (Willbros), was sentenced today for his role in a conspiracy to pay more than $6 million in bribes to government officials of the Federal Republic of Nigeria and officials from a Nigerian political party, Acting Assistant Attorney General Mythili Raman of the Criminal Division and Assistant Director in Charge Valerie Parlave of the FBI’s Washington Field Office announced today.

Paul G. Novak, 46, was sentenced today to serve 15 months in prison by U.S. District Judge Simeon T. Lake III of the Southern District of Texas.  The court took into consideration Novak’s cooperation, and the sentence was consistent with the government’s recommendation. In addition to the prison sentence, Novak was ordered to pay a $1 million fine and to serve two years of supervised release following his release from prison.  In sentencing Novak, the court took into consideration the assistance Novak provided the government in ongoing investigations.

Novak pleaded guilty to one count of conspiracy to violate the Foreign Corrupt Practices Act (FCPA) and one substantive count of violating the FCPA. Novak admitted that from approximately late-2003 to March 2005, he conspired with others to make a series of corrupt payments totaling more than $6 million to various Nigerian government officials and officials from a Nigerian political party to assist Willbros and its joint venture partner, a construction company based in Mannheim, Germany, in obtaining and retaining the Eastern Gas Gathering System (EGGS) Project, which was valued at approximately $387 million. The EGGS project was a natural gas pipeline system in the Niger Delta designed to relieve existing pipeline capacity constraints.

According to court records, Novak and his alleged co-conspirators Kenneth Tillery, Jason Steph, Jim Bob Brown, three employees from Willbros’s joint venture partner and others agreed to make the corrupt payments to, among others, government officials from the Nigerian National Petroleum Corporation, the National Petroleum Investment Management Services, a senior official in the executive branch of the federal government of Nigeria, and members of a Nigerian political party.  Court documents state the bribes were paid to assist in obtaining and retaining the EGGS contract and additional optional scopes of work.

According to information contained in plea documents, to secure the funds for those corrupt payments, Novak and his alleged conspirators caused Willbros West Africa Inc., a subsidiary of Willbros International, to enter into so-called “consultancy agreements” with two consulting companies Novak represented in exchange for purportedly legitimate consultancy services. In reality, those consulting companies were used to facilitate the payment of bribes.

In addition to Novak, to date, two Willbros employees have pleaded guilty for their roles in the EGGS bribery scheme, and Willbros has entered into a deferred prosecution agreement with the government:

• On May 14, 2008, Willbros Group Inc. and Willbros International entered into a deferred prosecution agreement with the government and agreed to pay a $22 million penalty, in connection with the company’s payment of bribes to government officials in Nigeria and Ecuador.  On March 30, 2012, the government moved to dismiss the charges following Willbros’s satisfaction of its obligations under the deferred prosecution agreement, and on April 2, 2012, the Court granted the United States’ motion.   
• On Sept. 14, 2006, Jim Bob Brown, a former Willbros executive, pleaded guilty to one count of conspiracy to violate the FCPA, in connection with his role in making corrupt payments to Nigerian government officials to obtain and retain the EGGS contract and in connection with his role in making corrupt payments in Ecuador. After a reduction for cooperation, Brown was sentenced on Jan. 28, 2010, to 12 months and one day in prison, two years of supervised release and a $17,500 fine.
• On Nov. 5, 2007, Jason Steph, also a former Willbros executive, pleaded guilty to one count of conspiracy to violate the FCPA, in connection with his role in making corrupt payments to Nigerian government officials to obtain and retain the EGGS contract. After a reduction for cooperation, Steph was sentenced on Jan. 28, 2010, to 15 months in prison, two years of supervised release and a $2,000 fine.

Kenneth Tillery was charged, along with Novak, for his alleged role in the bribery scheme in an indictment unsealed on Dec. 19, 2008. According to the indictment, Tillery was a Willbros International employee and executive from the 1980s through January 2005. From 2002 until January 2005, Tillery served as executive vice president and, later, as president of Willbros International. Tillery remains a fugitive. The charges against Tillery are merely accusations, and he is presumed innocent unless and until proven guilty.

The case is being investigated by FBI agents who are part of the Washington Field Office’s dedicated FCPA squad.  Significant assistance was provided by the Criminal Division’s Office of International Affairs. This case is being prosecuted by Senior Trial Attorney Laura N. Perkins of the Criminal Division’s Fraud Section.

Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa.

A federal court in Los Angeles has entered an order permanently barring Simon Jenkins from preparing federal income tax returns and other tax-related documents for others, the Justice Department announced today. Jenkins, who operated under the business name “Jenkins Tax Service” in Gardena , Calif., consented to the civil injunction order, which was signed by U.S. District Judge Dean D. Pregerson.

The government complaint, filed on Feb. 1, 2013, alleged that Jenkins engaged in a pattern of claiming false deductions, false credits, false expenses, and false claims for refunds on behalf of his customers for the tax years 2004 through 2008, causing the government to incur a tax loss of $238,024 for those years.

In addition to barring Jenkins from preparing tax returns, Judge Pregerson also required Jenkins to contact his customers and inform them of the entry of the Permanent Injunction within thirty days.

As noted in the complaint, in a prior related criminal proceeding, Jenkins pleaded guilty to one count of aiding and assisting in the preparation and presentation of false income tax returns. According to the plea agreement, filed in the criminal case on June 15, 2011, Jenkins agreed to enter into a binding civil injunction, barring him for life from aiding or assisting in the preparation of federal income tax returns for anyone other than himself and his legal spouse, and barring him from representing persons before the Internal Revenue Service.

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

Related Materials:

United States v. Simon Jenkins
Complaint for Permanent Injunction and Other Relief (PDF)
Stipulated Order of Permanent Injunction (PDF)

 Attorney General Eric Holder is traveling to Auckland, New Zealand, for the Fifth Annual Meeting of the Quintet of Attorneys General of the United States, the United Kingdom, Canada, Australia and New Zealand.  The central theme of the Quintet meeting will be strategies for combatting sexual violence against women and children. The Attorneys General will be exchanging best practices for domestic investigations and prosecutions of these serious crimes, as well as working to improve their joint response to transnational sexual violence, including in the contexts of human trafficking, online child pornography and armed conflicts.   

“The Quintet of Attorneys General is one of our most important channels for enhancing cooperation with key allies in the fight against terrorism and transnational crime,” said Attorney General Holder. “One of my highest priorities as Attorney General has been to work to prevent and to punish sexual violence against women and children. I greatly value this opportunity to meet with my counterparts from the United Kingdom, Canada, Australia and New Zealand – countries with which we share both common values and a common legal tradition – to discuss how we can improve our cooperation, with each other and with countries around the world, in the vital effort to fight sexual violence against women and children.”

Under the leadership of Attorney General Holder, the Justice Department has made significant strides in punishing and preventing sexual violence as well as assisting victims of sexual violence, including through the Sexual Assault Forensic Examination Protocol (SAFE), the Sexual Assault Backlog Initiative, the Defending Childhood Initiative, the expanded Project Safe Childhood as well as the Global Alliance Against Child Sexual Abuse Online. Fifty countries now participate in the Global Alliance Against Child Sexual Abuse Online which Attorney General Holder co-founded with European Union Commissioner Cecilia Malmstrom in 2012.

The Quintet will also focus on other forms of violent crime, including gun violence, as well as on victims’ rights and on the use of technology in prosecutions. In addition, experts will report on the Quintet’s ongoing collaboration against cybercrime and on the use of asset forfeiture to halt the financing of criminal and terrorist groups.

The goal of the Quintet meetings is to seek practical steps that can be taken to improve the abilities of the five countries to investigate and prosecute criminal and terrorist activity.  Themes of prior Quintet meetings have included: the use of national security information in terrorism prosecutions; improving mutual legal assistance to fight cybercrime; strategies for countering violent extremism; and cross-jurisdiction actions against organized crime groups.   

The U.S. Strategy to Combat Transnational Organized Crime specifically references the importance of supporting multilateral senior law enforcement exchanges to promote the sharing of criminal intelligence and enhance cooperation, such as the Quintet of Attorneys-General and the Strategic Alliance Group, established with the United Kingdom, Canada, New Zealand and Australia.  Prior meetings of the Quintet have taken place in the United Kingdom, the United States, Australia and Canada.  

On his return trip from New Zealand, Attorney General Holder will meet with U.S. Navy Admiral Samuel J. Locklear III, Commander of the U.S. Pacific Command (PACOM), and other officials to review ongoing law enforcement collaboration between the Department of Justice and PACOM, and to plan future cooperation in the region. The Attorney General and Admiral Locklear will continue their discussions on how they are working collaboratively to counter terrorism, transnational crime and narcotics trafficking in the Pacific region.  

Adventist Health System/West, dba Adventist Health, and its affiliated hospital White Memorial Medical Center have agreed to pay the United States and the state of California $14.1 million to settle claims that they violated the False Claims Act, the Justice Department announced today.   Adventist Health is headquartered in Roseville, Calif., in the Eastern District of California, and operates 19 hospitals and over 150 clinics in California, Hawaii, Oregon and Washington.  White Memorial Medical Center is a teaching hospital located in Los Angeles.

The settlement announced today resolves allegations that Adventist Health improperly compensated physicians who referred patients to the White Memorial facility by transferring assets, including medical and non-medical supplies and inventory, at less than fair market value.  Additionally, Defendant White Memorial paid referring physicians compensation that the United States contended was above fair market value to provide teaching services at its family practice residency program.  The United States alleged that these payments violated the Anti-Kickback Act and Stark Statute, and by extension, the False Claims Act.   Approximately $11.5 million of the settlement will be paid to the U.S. Government, most of which will benefit the Medicare Trust Fund.   The remaining $2.6 million will be paid to California’s Department of Health Care Services.       

The Anti-Kickback Act prohibits offering, paying, soliciting or receiving remuneration to induce referrals of items or services covered by Medicare, Medicaid and/or other federally-funded programs.   The Stark Statute prohibits a hospital from submitting claims for patient referrals made by a physician with whom the hospital has an improper financial arrangement.   Both the Anti-Kickback Act and Stark Statute are intended to ensure that a physician’s medical judgment is not compromised by improper financial incentives and is instead based on the best interests of the patient.   

“Kickbacks and other unlawful financial arrangements cost taxpayer dollars and undermine the integrity of medical judgments,” said Stuart F. Delery, the Acting Assistant Attorney General for the Civil Division. “The Department of Justice is committed to making sure that physician referrals do not involve payments made in violation of federal law.”

“The setttement announced today underscores one of the key purposes of the Stark and Anti-Kickback laws – to ensure that the judgment exercised by health care providers is based on legitimate patient needs and is not influenced by illegal payments,” said Benjamin B. Wagner, U.S. Attorney for the Eastern District of California.

“Payouts made by hospitals and clinics – as the government alleged in this case – raise substantial concerns about physician independence and objectivity,” said Ivan Negroni, Special Agent in Charge of the Office of Inspector General, U.S. Department of Health and Human Services San Francisco region.  “Taxpayers and vulnerable patients rightfully expect such payments to be investigated and pursued.”  

The settlement announced today resolves a lawsuit filed in the Eastern District of California under the qui tam, or whistleblower, provisions of the False Claims Act.   These provisions allow private citizens to bring civil actions on behalf of the United States and share in any recovery.   The whistleblowers in this case will collectively receive $2,839,219 of the recovery.  The lawsuit is captioned U.S. ex rel. Hector Luque et al. v. Adventist Health et al. No. 2:08CV1271 (E.D. Cal.). 

As part of the settlement, White Memorial has entered into a comprehensive five-year Corporate Integrity Agreement with the Office of Inspector General of the U.S. Department of Health and Human Services to ensure its continued compliance with federal health care benefit program requirements.

This 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 $14.2 billion.

This case was handled by the United States Attorney’s Office for the Eastern District of California, the Justice Department’s Civil Division, and the Office of Inspector General of the Department of Health and Human Services. The claims settled by this agreement are allegations only, and there has been no determination of liability.

Jean-Claude Bridges pleaded guilty earlier this year to deliberately setting a church on fire and was sentenced this morning in the U.S. District Court for the Western District of Virginia in Danville, Va. Bridges was sentenced to serve two years in prison, two years of supervised release and ordered to pay $141,773.68 in restitution .

Bridges, 18, of Henry County, Va., pleaded guilty to one count of destroying a religious property by fire. Prior to his guilty plea, the court granted a government motion to transfer Bridges to adult status for criminal prosecution. The defendant was 17-years-old when the criminal conduct occurred.

“The freedom to practice the religion that we choose in a safe environment without being subjected to hateful acts is among our nation’s most cherished rights,” said Roy L. Austin, Jr., Deputy Assistant Attorney General of the Justice Department’s Civil Rights Division. “Anyone who violates this right will be prosecuted to the fullest extent of the law.”

“Mr. Bridges’ racial bias led him to commit the dangerous crime of arson,” United States Attorney Timothy J. Heaphy said today. “When he set fire to the New Holy Deliverance Outreach Ministry, he endangered neighbors and first responders. This act of prejudice offended the entire community. This office will protect the civil rights of everyone and vigorously prosecute crimes like that committed by Mr. Bridges. Racism has no place in Axton or anywhere else in the Western District of Virginia.” 

According to filings in the case, on May 20, 2012, at approximately 1:20 a.m., Bridges and another juvenile intentionally set fire to New Holy Deliverance Outreach Ministry, a church with a predominantly African American congregation, located in Axton, Va. In pleading guilty to this offense, Bridges admitted that he burned down New Holy Deliverance Outreach Ministry because of the race, color and ethnic characteristics of its congregants.

The investigation of the case was conducted by the Henry County Department of Public Safety, the Henry County Sheriff’s Office and the Bureau of Alcohol, Tobacco, Firearms and Explosives. Assistant U.S. Attorney Thomas Cullen, assisted by Trial Attorney Christopher Lomax of the Department of Justice’s Civil Rights Division, will prosecute the case for the United States.

The United States has filed suit against Chemed Corporation and various wholly owned hospice subsidiaries, including Vitas Hospice Services LLC and Vitas Healthcare Corporation, alleging false Medicare billings for hospice services, the Justice Department announced today. Vitas is the largest for-profit hospice chain in the United States and provides hospice services to patients in 18 states (Alabama, California, Colorado, Connecticut, Delaware, Florida, Georgia, Illinois, Indiana, Kansas, Michigan, Missouri, New Jersey, Ohio, Pennsylvania, Texas, Virginia and Wisconsin) and the District of Columbia. Chemed, which is based in Cincinnati, Ohio and also owns Roto-Rooter Group Inc., a national drain cleaning and plumbing service company, acquired Vitas in 2004.

 

The Medicare hospice benefit is available for patients who elect palliative treatment (medical care focused on providing patients with relief from pain and stress) for a terminal illness, and have a life expectancy of six months or less if their disease runs its normal course. When a Medicare patient receives hospice services, that individual no longer receives services designed to cure his or her illness. Medicare reimburses for different levels of hospice care, including continuous home care, also called crisis care, which is available for patients who are experiencing acute medical symptoms resulting in a brief period of crisis. Crisis care is available when a patient’s acute medical symptoms require the immediate and short-term provision of skilled nursing services in order to keep the patient at home. The reimbursement rate for crisis care services is the highest daily rate a hospice can bill Medicare, and hospices are paid hundreds of dollars more on a daily basis for each patient they certify as having received crisis care services rather than routine hospice services.

 

The government’s complaint alleges that Chemed and Vitas Hospice knowingly submitted or caused the submission of false claims to Medicare for crisis care services that were not necessary, not actually provided, or not performed in accordance with Medicare requirements. According to the complaint, the companies set goals for the number of crisis care days that were to be billed to Medicare. The companies also allegedly used aggressive marketing tactics and pressured staff to increase the numbers of crisis care claims submitted to Medicare, without regard to whether the services were appropriate or were actually being provided. For example, the complaint contends that Vitas billed three straight days of crisis care for a patient, even though the patient’s medical records do not indicate that the patient required crisis care and, indeed, reflect that the patient was playing bingo part of the time.

 

In addition, the government’s complaint alleges that Chemed and Vitas knowingly submitted or caused the submission of false claims for hospice care for patients who were not terminally ill. The companies allegedly paid bonuses to staff based on the number of patients enrolled in the program and based on patients who were admitted for longer lengths of stay, and took adverse employment actions against marketing representatives who did not meet monthly hospice admissions goals. According to the Complaint, these business practices resulted in the admission of patients who were not eligible for hospice care. As an example, the Complaint alleges that Vitas admitted a patient to hospice who showed no signs of a terminal condition and was described in Vitas’ own records as, “very healthy given her age.”

 

As a result of the conduct alleged in the complaint, the government contends that Chemed and Vitas violated the False Claims Act and misspent tens of millions of taxpayer dollars from the Medicare program.

 

“The Medicare hospice benefit is intended to provide patients nearing the end of life with pain management and other palliative care to make them as comfortable as possible,” said Stuart F. Delery, Acting Assistant Attorney General for the Civil Division. “Too often, however, we hear reports of companies that abuse this critical service by using aggressive marketing tactics to push patients into services they don’t need in order to get higher reimbursements from the government. The Department of Justice will take swift action to protect taxpayer dollars and make sure that Medicare benefits are available to those who truly need them.”

 

The United States’ suit 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 $14.2 billion.

 

This matter was investigated by the Commercial Litigation Branch of the Justice Department’s Civil Division, the U.S. Attorney’s Office for the Western District of Missouri, the U.S. Attorney’s Office for the Northern District of Texas the U.S. Attorney’s Office for the Central District of California, and the Department of Health and Human Services’ Office of Inspector General. The claims asserted against Chemed and Vitas are allegations only, and there has been no determination of liability.

 

The lawsuit is captioned United States v. Vitas Hospice Services LLC, et al. (W.D. Mo.).

Three men were arrested and charged today in connection with the Boston Marathon bombings investigation.   

Dias Kadyrbayev, 19, and Azamat Tazhayakov, 19, both of New Bedford, Mass., were charged in a criminal complaint with conspiracy to obstruct justice by conspiring to destroy, conceal and cover-up tangible objects belonging to suspected Marathon bomber, Dzhokhar Tsarnaev, namely a laptop computer and backpack containing fireworks.  A third man, Robel Phillipos, 19, of Cambridge, Mass., was charged with willfully making materially false statements to federal law enforcement officials during a terrorism investigation.  According to the affidavit accompanying the complaint, Kadyrbayev and Tazhayakov are both nationals of Kazakhstan who entered the United States on student visas.  Kadyrbayev and Tazhayakov face a maximum sentence of five years in prison and $250,000 fine.  Phillipos, a U.S. citizen, faces a maximum sentence of eight years in prison and a $250,000 fine.

U.S. Attorney for the District of Massachusetts Carmen M. Ortiz and Richard DesLauriers, Special Agent in Charge of the Boston Field Office of the FBI, announced the charges today.  This investigation was conducted by the FBI's Boston Division, the Boston Police Department, the Massachusetts State Police and member agencies of the Boston Joint Terrorism Task Force, which is comprised of more than 30 federal, state and local enforcement agencies, including the Bureau of Alcohol, Tobacco, Firearms and Explosives; U.S. Immigration and Customs Enforcement - Homeland Security Investigations; U.S. Marshals Service; U.S. Secret Service; the Massachusetts Bay Transit Authority; and others.  In addition, the Watertown, Mass., Police Department, the Cambridge Police Department, the Massachusetts Institute of Technology (MIT) Police Department, the Boston Fire Department, the National Guard and police, fire and emergency responders from across Massachusetts and New England played critical roles in the investigation and response.
 
The charges contained in the criminal complaints are merely accusations, and the defendants are presumed innocent unless and until proven guilty.

Related Materials:

Kadyrbayev and Tazhayakov Complaint
Phillipos Complaint

St. Vincent Healthcare, a hospital located in Billings, Mont., and Holy Rosary Healthcare, a hospital located in Miles City, Mont., have agreed to pay $3.95 million plus interest to resolve allegations that they violated the Stark Law and the False Claims Act by improperly providing incentive pay to physicians that made referrals to the hospitals, the Justice Department announced today.

 

The Stark Law forbids a hospital from billing Medicare for certain services referred by physicians who have a financial relationship with the hospital unless that relationship falls within certain exceptions. A prohibited financial relationship includes a hospital’s agreement to compensate a physician in a manner that takes into account the volume of the physician’s referrals or the revenue realized through those referrals.

 

The settlement announced today resolves allegations that the hospitals paid several physicians incentive compensation that took into account the value or volume of their referrals by improperly including certain designated health services in the formula for calculating physician incentive compensation. These issues were disclosed by the hospitals to the government.

 

“The resolution of this matter underscores our commitment to ensure that services reimbursable by federal health care programs are based on the best interests of patients rather than the personal financial interests of referring physicians,” said Stuart F. Delery, Acting Assistant Attorney General for the Department’s Civil Division.

 

“Combating health care fraud is a top priority of the Department of Justice and the Montana U.S. Attorney’s Office. St. Vincent Healthcare and Holy Rosary Healthcare allegedly put their financial interest ahead of their responsibility to provide cost effective health care. The United States recovered $3,950,000 of taxpayers’ dollars from the hospitals. The U.S. Attorney’s Office is committed to enforcing the Stark Law and False Claims Act, as well as other health care laws and regulations against wrongdoers. This case also demonstrates how the Department of Justice will work with those health care providers who disclose their misconduct,” said Michael W. Cotter, U.S. Attorney for the District of Montana.

 

“There is an expectation that corporations providing services to Medicare and Medicaid beneficiaries adhere to the provision of the Stark Law. I applaud St. Vincent Healthcare and Holy Rosary Healthcare for recognizing their potential liability in this matter and making a disclosure,” said Gerry Roy, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services region including Montana. “Working closely with our partners at the Department of Justice, we will vigilantly protect federal health care programs against violations of the Stark Law.”

 

This 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 on 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 $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 $14.2 billion.

 

This case was handled by the U.S. Attorney’s Office for the District of Montana, the Department of Justice’s Civil Division, the Office of Inspector General of the U.S. Department of Health and Human Services, and the FBI. The claims settled by this agreement are allegations only, and there has been no determination of liability.

A former Texas state parole officer was sentenced to 20 months in prison today for taking bribes from one of her assigned parolees in exchange for not reporting his parole violations, announced Acting Assistant Attorney General Mythili Raman of the Department of Justice’s Criminal Division.

Nichelle Derricks, 38, of Cedar Hill, Texas, pleaded guilty on Jan. 22, 2013, to one count of honest services wire fraud in the Northern District of Texas.

According to court documents, while serving as a Texas Department of Criminal Justice (TDCJ) parole officer, Derricks and one of her assigned parolees developed an improper relationship in which Derricks secretly used her official position with TDCJ to enrich herself and others by soliciting and receiving cash payments, gifts, furniture, household goods and items, food and beverages and other things of value from the parolee in exchange for favorable official action benefitting the parolee. The scheme was conducted without the authorization, knowledge or approval of TDCJ and contrary to TDCJ procedures and requirements.

Derricks admitted she repeatedly failed to report the parolee for violating the terms of his parole, including, among other things, failing to report him for traveling outside Texas without prior, written approval and for engaging in prohibited financial transactions.

The case was investigated by the FBI’s Dallas Field Office, with assistance from the U.S. Secret Service and the TDCJ Office of Inspector General. The case is being prosecuted by Trial Attorneys Edward P. Sullivan of the Justice Department Criminal Division’s Public Integrity Section.  

A former executive of the U.S. subsidiary of a French power and transportation company was charged in a superseding indictment for his alleged participation in a scheme to pay bribes to foreign government officials, Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney for the District of Connecticut David B. Fein and Assistant Director in Charge Valerie Parlave of the FBI’s Washington Field Office announced today.

William Pomponi, 65, a former vice president of sales for the Connecticut-based U.S. subsidiary, was charged in a superseding indictment late yesterday in the District of Connecticut with conspiring to violate the Foreign Corrupt Practices Act (FCPA) and to launder money, as well as substantive charges of FCPA and money laundering violations.

On April 16, 2013, charges against Frederic Pierucci and a guilty plea by David Rothschild in connection with the bribery scheme were announced.  Pierucci is charged in the superseding indictment with Pomponi.  On Nov. 2, 2012, Rothschild pleaded guilty to a criminal information.

According to the charges, the defendants, together with others, paid bribes to officials in Indonesia, including a member of Indonesian Parliament and high-ranking members of Perusahaan Listrik Negara (PLN), the state-owned and state-controlled electricity company in Indonesia, in exchange for assistance in securing a $118 million contract, known as the Tarahan project, for the company and its consortium partner to provide power-related services for the citizens of Indonesia.  The charges allege that, in order to conceal the bribes, the defendants retained two consultants purportedly to provide legitimate consulting services on behalf of the power company and its subsidiaries in connection with the Tarahan project.  In reality, however, the primary purpose for hiring the consultants was allegedly to use the consultants to pay bribes to Indonesian officials.

The first consultant retained by the defendants allegedly received hundreds of thousands of dollars into his Maryland bank account to be used to bribe the member of Parliament, according to the charges.  The consultant then allegedly transferred the bribe money to a bank account in Indonesia for the benefit of the official.  According to court documents, emails between Pomponi, Pierucci, Rothschild and their co-conspirators discuss in detail the use of the first consultant to funnel bribes to the member of Parliament and the influence that the member of Parliament could exert over the Tarahan project.  However, when Pomponi, Pierucci and others determined that the first consultant was not effectively bribing key officials at PLN, they allegedly retained a second consultant to accomplish that purpose.  The charges allege that the power company deviated from its usual practice of paying consultants on a pro-rata basis in order to make a much larger up-front payment to the second consultant so that the consultant could “get the right influence.”  An employee at the power company’s subsidiary in Indonesia sent an email to Pomponi, Pierucci and others asking them to finalize the consultancy agreement with the front-loaded payments but stated that in the meantime the employee would give his word to a high-level official at PLN, according to the charges. 
  
The conspiracy to commit violations of the FCPA count carries a maximum penalty of five years in prison and a fine of the greater of $250,000 or twice the value gained or lost.  The substantive FCPA counts each carry a maximum penalty of five years in prison and a fine of the greater of $100,000 or twice the value gained or lost.  The conspiracy to commit money laundering count carries a maximum penalty of 20 years in prison and a fine of the greater of $500,000 or twice the value of the property involved in the transaction.  The substantive money laundering counts each carry a maximum penalty of 20 years in prison and a fine of the greater of $500,000 or twice the value of the property involved in the transaction.

  An indictment is merely an accusation, and defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.

The case is being prosecuted by Trial Attorney Daniel S. Kahn of the Criminal Division’s Fraud Section and Assistant U.S. Attorney David E. Novick of the District of Connecticut.  The case is being investigated by FBI agents who are part of the Washington Field Office’s dedicated FCPA squad, with assistance from the Meriden, Conn., Resident Agency of the FBI.  Significant assistance was provided by the Criminal Division’s Office of International Affairs, and the department has also worked closely with its law enforcement counterparts in Indonesia at the Komisi Pemberantasan Korupsi (Corruption Eradication Commission) and deeply appreciates KPK’s assistance in this matter.

Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa.

Related Materials:

Superseding Indictment

A New York woman was sentenced to 19 months in prison today for her role in a scheme to defraud consumer product manufacturers, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and the U.S. Attorney’s Office for the Southern District of Indiana.

Dina Wein Reis, 49, was sentenced by U.S. District Judge Jane E. Magnus-Stinson in the Southern District of Indiana and ordered to pay restitution of $5,678,190 and a fine of $1 million.

Reis pleaded guilty on May 19, 2011, to a criminal information charging her with one count of conspiracy to commit wire fraud. 

According to plea documents, between June 2003 and July 2006 Reis owned and operated a marketing business based in New York and used fraudulent means to obtain consumer goods at discounted prices from manufacturers and distributors of consumer products. Participants in the scheme “cold-called” executives at large consumer product companies to solicit their products, falsely promising that if each manufacturer sold its products to Reis, the products would be distributed to a variety of outlets that were typically difficult for these manufacturers to reach on their own. The scheme included a marketing venture called the “Goody Pak Program,” which distributed products free of charge to schools for school fundraisers and helped generate marketing information for these manufacturers.

Reis admitted that she negotiated a discount from the manufacturers based on the possibility of future profitable business for the manufacturers arising from her marketing efforts when, in fact, she made few efforts and sold the majority of the products to wholesalers for a profit.  As a result, a manufacturer in Indiana lost $180,000, and a Missouri manufacturer lost $500,000. Reis also agreed through her plea agreement to make restitution to manufacturing companies not specifically named in the information.  

The cases were investigated by the FBI and the U.S. Marshals Service. The cases were prosecuted by Trial Attorney Matthew Klecka of the Criminal Division’s Asset Forfeiture and Money Laundering Section, formerly a Trial Attorney in the Division’s Fraud Section, and Assistant U.S. Attorney Winfield Ong of the Southern District of Indiana. 

Odalis Castillo-Lopez, 41, a citizen of the Dominican Republic and a resident of New York, pleaded guilty today to theft of government property and money laundering in connection with a scheme to cash U.S. Treasury tax refund checks fraudulently obtained using the stolen identities of Puerto Rican residents. The guilty plea was announced by the Justice Department, the Internal Revenue Service – Criminal Investigation (IRS-CI), Homeland Security Investigations and the U.S. Secret Service.

At a hearing before U.S. District Court Chief Judge Patti B. Saris in the District of Massachusetts, Castillo pleaded guilty to theft of government property and money laundering. According to the documents filed in this case, the criminal conduct involved the attempted negotiation of U.S. Treasury income tax refund checks obtained in the name of stolen identities. Castillo faces a maximum potential sentence of 10 years in prison and a fine of up to $250,000 for the theft of government property charge, and a maximum of 20 years in prison and a fine of up to $500,000 for the money laundering charge. Sentencing is scheduled for May 30, 2013.

This investigation was conducted jointly by IRS-CI, Homeland Security Investigations and the U.S. Secret Service in Boston. The prosecution is being handled by Senior Litigation Counsel Corey J. Smith of the Justice Department’s Tax Division.

Related Materials:

United States v. Odalis Castillo-Lopez
Indictment (PDF)
 

A federal court in Los Angeles has entered an order permanently barring John Trunzo from preparing federal income tax returns and other tax-related documents for others, the Justice Department announced today. Trunzo, who operated under the business names “Your Taxman John Trunzo,” “Your Taxman” and “YTJT” in Los Angeles County, consented to the civil injunction order, which was signed by U.S. District Judge Michael W. Fitzgerald.

The government complaint, filed on February 14, 2013, alleged that Trunzo under reported gross receipts on his own income tax returns filed for the tax years 2005 – 2007, causing the government to incur a tax loss of $67,231 for those years. The complaint further alleged that Trunzo provided the Internal Revenue Service (IRS) with false documents in order to convince auditors that his clients had incurred expenses that Trunzo knew they had not incurred, and were entitled to deductions that Trunzo knew were fabricated, which obstructed and impeded the IRS from determining his clients’ true tax liability.

In addition to barring Trunzo from preparing tax returns, Judge Fitzgerald also required Trunzo to create a website to inform his customers of the entry of the permanent injunction within thirty days.

As noted in the complaint, Trunzo was previously charged with one count of subscribing to a false income tax return. He entered a guilty plea to this charge. According to the plea agreement, filed in the criminal case on July 9, 2012, Trunzo agreed to enter into a binding civil injunction, barring him for life from aiding or assisting in the preparation of federal income tax returns for anyone other than himself and his legal spouse, and barring him from representing persons before the IRS.

In the past decade the Justice Department’s Tax Division has obtained injunctions against hundreds of tax-return preparers and tax-fraud promoters. Information about these cases is available on the Justice Department website . For more information about choosing a tax return preparer, see the IRS website and the IRS YouTube Channel .

Related Materials:

United States v. John Trunzo
Stipulated Order of Permanent Injunction (PDF)
Complaint for Permanent Injunction and Other Relief (PDF)
 

New guidance released today by the U.S. Department of Housing and Urban Development (HUD) and the U.S. Department of Justice reinforces the Fair Housing Act requirement that multifamily housing be designed and constructed so as to be accessible to persons with disabilities.

 

The Fair Housing Act prohibits discrimination in housing based on disability, race, color, national origin, religion, sex and familial status. The Fair Housing Act also requires that multifamily housing with four or more units, built for first occupancy after March 1991, contain accessible features for persons with disabilities.

 

The new guidance is designed to help design professionals, developers and builders better understand their obligations and help persons with disabilities better understand their rights regarding the “design and construction” requirements of the federal Fair Housing Act.

 

“Everyone who is involved in designing and building multifamily housing must ensure that the required accessible features are present so that people with disabilities can use and enjoy their homes,” said Eric Halperin, Senior Counsel and Special Counsel for Fair Lending in the Civil Rights Division.  “This guidance will help design professionals and builders understand their obligations under this important component of the Fair Housing Act.”

 

“With one of five persons in this nation having a physical disability, housing units that include the required features of accessibility are more important than ever.” stated John Trasviña, HUD Assistant Secretary for Fair Housing and Equal Opportunity (FHEO). “This new guidance will assist developers in constructing housing that complies with the Fair Housing Act’s design and construction requirements from the start and avoid having to deal with costly retrofitting later.”

 

HUD and the Justice Department share responsibility for enforcing the federal Fair Housing Act.  HUD is the agency with the primary responsibility to investigate individual complaints of discrimination.  The Secretary of HUD, on his own initiative, may also file complaints alleging discrimination.  The Attorney General may commence a civil action in federal court when there is reasonable cause to believe that someone is engaged in a pattern or practice of discrimination or that a group of persons has been denied rights protected by the act.

 

Under the act, new multifamily housing must include:

 

·          Public and common use areas that are readily accessible to and usable by persons with disabilities; and

 

·          Doors that are designed to allow passage into and within all premises of covered dwellings and that are sufficiently wide to allow passage by persons with disabilities, including persons who use wheelchairs.

 

In addition, all premises within covered dwellings must contain:

 

·          An accessible route into and through the dwelling unit;

 

·          Light switches, electrical outlets, thermostats, and other environmental controls in accessible locations;

 

·          Reinforcements in bathroom walls to allow the later installation of grab bars;

 

·          Usable kitchens and bathrooms such that an individual using a wheelchair can maneuver about and use the space.

 

The new guidance, issued in the form of questions and answers, supplements previously-issued guidance and answers such questions as:

 

·          What are the design and construction requirements?

 

·          Who must comply with the design and construction requirements?

 

·          What types of dwellings are covered by the design and construction requirements?

 

·          What are accessible routes? 

 

·          What is an accessible entrance?

 

·          What is an accessible public and common use area?

 

·          What safe harbors are available for compliance with the design and construction requirements?

 

The new guidance is available here. Information about the guidance is also available at www.fairhousingfirst.org .

 

Since January 2009, HUD and its Fair Housing Assistance Program partners have investigated and either conciliated or charged nearly 5,000 cases that alleged discrimination based on disability, and the Justice Department’s Civil Rights Division has filed 141 cases to enforce the Fair Housing Act, 19 of which have alleged discrimination based on a failure to design and construct multifamily housing in compliance with the act. 

 

For more information about HUD and the civil rights laws it enforces, go to www.hud.gov/fairhousing and click on “Learn more about FHEO.” More information about the Justice Department’s Civil Rights Division and the laws it enforces is available at www.justice.gov/crt/index.php .

Individuals who believe that they may have been victims of housing discrimination should contact HUD at 1-800-669-9777 or go to HUD’s web site: www.hud.gov/fairhousing , or by downloading HUD’s free housing discrimination mobile application, which can be accessed through Apple devices, such as the iPhone, iPad and iPod touch .

In addition, individuals may contact the Justice Department at 1-800-896-7743 or by email at [email protected] .

The Justice Department announced that late yesterday a federal court in San Francisco entered an order authorizing the Internal Revenue Service (IRS) to serve a John Doe summons seeking information about U.S. taxpayers who may hold offshore accounts at Canadian Imperial Bank of Commerce FirstCaribbean International Bank (FCIB). The order was signed by Senior District Judge Thelton E. Henderson. The IRS summons seeks records of FCIB’s United States correspondent account at Wells Fargo N.A., which will allow the IRS to identify U.S. taxpayers who hold or held interests in financial accounts at FCIB and other financial institutions that used FCIB’s Wells Fargo correspondent account.

Pursuant to a petition filed by the United States, the Court granted the IRS permission to serve what is known as a “John Doe” summons on Wells Fargo. The IRS uses John Doe summonses to obtain information about possible violations of internal revenue laws by individuals whose identities are unknown. This John Doe summons directs Wells Fargo to produce records identifying U.S. taxpayers with accounts at FCIB and other banks that used FCIB’s correspondent account.

According to the declaration of IRS Revenue Agent Cheryl R. Kiger filed in support of the petition, FCIB is based in Barbados and has branches in 18 Caribbean countries. Although FCIB does not have U.S. branches, it maintains a correspondent account in the United States at Wells Fargo Bank N.A. As alleged in Agent Kiger’s declaration, the IRS learned that U.S. taxpayers were using FCIB to help them keep their offshore accounts undetected by the IRS and not to pay U.S. federal income tax on money placed in those offshore accounts. Kiger’s declaration describes her review of the information submitted by more than 120 FCIB customers who participated in the IRS’s Offshore Voluntary Disclosure Program. According to the Kiger declaration, many of the FCIB customers in the John Doe class may have been under-reporting income, evading income taxes, or otherwise violating the internal revenue laws of the United States.

“The Department of Justice and the IRS are committed to global enforcement to stop the use of foreign bank accounts to evade U.S. taxes,” said Kathryn Keneally, Assistant Attorney General for the Justice Department’s Tax Division. “This John Doe summons is a visible indication of how we are using the many tools available to us to pursue this activity wherever it is occurring. Those who are still hiding should get right with their country and their fellow taxpayers before it is too late.”

“This summons marks another milestone in international tax enforcement,” said IRS Acting Commissioner Steven T. Miller. “Our work here shows our resolve to pursue these cases in all parts of the world, regardless of whether the person hiding money overseas chooses a bank with no offices on U.S. soil.”

In a similar case, on Jan. 28, 2013, the U.S. District Court for the Southern District of New York entered an order authorizing the IRS to serve a John Doe summons on UBS AG, seeking records of Swiss bank Wegelin & Co.’s United States correspondent account at UBS, which will allow the United States to determine the identity of U.S. taxpayers who hold or held interests in financial accounts at Wegelin and other Swiss financial institutions to evade federal income taxes. 

Federal tax law requires U.S. taxpayers to pay taxes on all income earned worldwide. U.S. taxpayers must also report foreign financial accounts if the total value of the accounts exceeds $10,000 at any time during the calendar year. A deliberate failure to report a foreign account can result in a penalty of up to 50 percent of the amount in the account at the time of the violation. U.S. taxpayers are reminded that the IRS currently has in place an Offshore Voluntary Disclosure Program where U.S. taxpayers can come forward and disclose their offshore accounts and income. For more details, please go to the IRS’s website: www.irs.gov/uac/2012-Offshore-Voluntary-Disclosure-Program .

A correspondent account is a bank deposit account maintained by one bank for another bank. Financial transactions involving U.S. dollars flow through U.S. banks. Therefore, foreign banks that do business in U.S. dollars, but have no office in the U.S., obtain a correspondent account at a U.S. bank in order to engage in such transactions. These transactions leave a trail in the U.S. that the IRS can access through the records of the correspondent bank accounts. These correspondent bank accounts have records of money deposited, money paid out through checks and money moved through the correspondent account by wire transfers. All of this information the IRS can obtain through a John Doe summons issued to the U.S. bank holding the correspondent account.

Related Materials:

In the Matter of the Tax Liabilities of: John Does, etc.
Ex Parte Petition for Leave to Serve "John Doe" Summons (PDF)
Declaration of Revenue Agent Cheryl R. Kiger in Support of Ex Parte Petition for Leave to Serve "John Doe" Summons (PDF)
Memorandum in Support of Ex Parte Petition for Leave to Serve "John Doe" Summons (PDF)
Notice of Filing Ex Parte Petition for Leave to Serve "John Doe" Summons (PDF)
Order Granting Ex Parte Petition for Leave to Serve "John Doe" Summons (PDF)