District Not Recorded
The source did not name an office we could identify. These records remain unassigned rather than guessed.
Louisiana Tax Return Preparer Convicted of Stolen Identity Refund FraudRead the Press Release
Following a four-day jury trial in Baton Rouge, La., a federal jury convicted Angela Myers today of wire fraud, making false claims, subscribing to false tax returns and aggravated identity theft, the Justice Department and Internal Revenue Service (IRS) announced.
Based on the evidence presented at trial, Myers operated “Angie’s Tax Service,” a tax preparation business located in Baton Rouge. Myers electronically filed false claims for tax refunds using the names and Social Security numbers of identity theft victims. Myers filed the identity theft tax returns using a unique preparer identification number assigned to her daughter. Many of the victims were nursing home patients who resided at Port Allen Care Center in Port Allen, La., and who did not have the ability to leave the nursing home.
The evidence also revealed that Myers lied on her own 2007 and 2008 federal income tax returns, failing to report hundreds of thousands of dollars of tax preparation fees that she earned at Angie’s Tax Service and used to buy various items, including an RV and a $50,000 investment product.
“Prosecuting stolen identity refund fraud is a top priority of the Justice Department,” said Assistant Attorney General for the Justice Department’s Tax Division Kathryn Keneally. “The verdicts returned today demonstrate that the American people will not tolerate criminals who prey on the most vulnerable in our society to enrich themselves.”
“Identity theft is a very serious crime that victimizes honest taxpayers and causes immense hardship,” stated Richard Weber, Chief, IRS Criminal Investigation. “Many of Myers’ victims were nursing home patients. Be assured that IRS has made a commitment to pursue identity theft and we will work tirelessly with our partners at the U.S. Attorney’s Office to hold those who engage in similar conduct accountable.”
Assistant Attorney General Keneally commended the efforts of special agents of IRS - Criminal Investigation, who investigated the case, and Trial Attorneys Justin Gelfand and Jason Poole, who prosecuted the case with the assistance of the U.S. Attorney’s Office for the Middle District of Louisiana.
Health Care Clinic Director Pleads Guilty in Miami for Role in $63 Million Health Care Fraud SchemeRead the Press Release
A former health care clinic director and licensed therapist 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.
Paul Thomas Layman, 66, 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.
Layman’s co-conspirator Dana Gonzalez, 43, of Miami, a registered clinical social worker intern in Florida, pleaded guilty yesterday to one count of conspiracy to commit health care fraud for her role in the scheme.
During the course of the conspiracy, Layman was employed as a substance abuse counselor, therapist and clinical director of HCSN’s Partial Hospitalization Program (PHP). A PHP is a form of intensive treatment for severe mental illness.
In Florida, HCSN operated community mental health centers at three locations. During his employment, Layman worked full time at all HCSN locations in Florida in various capacities. According to court documents, Layman was aware that HCSN in Florida paid illegal kickbacks to owners and operators of Miami-Dade County Assisted Living Facilities (ALF) in exchange for patient referral information to be used to submit false and fraudulent claims to Medicare and Medicaid. Layman also knew that many of the ALF referral patients were ineligible for PHP services because many patients suffered from mental retardation, dementia and Alzheimer's disease.Court documents reveal that Layman was aware that HCSN personnel in Florida were fabricating patient medical records. Many of these medical records were created weeks or months after the patients were admitted to HCSN facilities in Florida for purported PHP treatment and were utilized to support false and fraudulent billing to government sponsored health care benefit programs, including Medicare and Florida Medicaid. During his employment at HCSN in Florida, Layman signed fabricated PHP therapy notes and other medical records used to support false claims to government sponsored health care programs.
HCSN also operated one location in Hendersonville, N.C. At the Hendersonville location, Layman served as the clinical director and assisted HCSN owner Armando Gonzalez in obtaining necessary licensing, credentials and Medicare authorizations for HCSN. According to court documents, from 2008 through 2009, Layman purportedly supervised therapists at HCSN in Hendersonville, including Alexandra Haynes, who was an unlicensed therapist purportedly performing PHP therapy to HCSN patients. For their roles in the conspiracy, Gonzalez pleaded guilty to one count of conspiracy to commit health care fraud and one count of conspiracy to commit money laundering, and Haynes pleaded guilty to one count of conspiracy to commit health care fraud. On Monday, Feb. 25, 2013, Gonzalez was sentenced to serve 168 months in prison for his role in the scheme.
According to court documents, Dana Gonzalez worked at HCSN in Florida from approximately April 2005 through December 2010. At HCSN in Florida, Gonzalez fabricated patient medical records, which were used to support false and fraudulent billing to Medicare and Florida Medicaid. In 2011, Gonzalez worked at HCSN in North Carolina, where she fabricated therapy notes and medical records, and provided unlicensed therapy when licensed therapists were absent.
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 12 defendants have pleaded guilty. Alleged co-conspirator Wondera Eason is scheduled for trial on April 22, 2013, before Judge Altonaga in Miami. Alleged co-conspirators Alina Feas and Lisset Palmero are scheduled for trial on June 3, 2013. Defendants are presumed innocent until proven guilty at trial.
The cases are being prosecuted by Special Trial Attorney William Parente and Trial Attorneys Allan J. Medina and Steven Kim of the Criminal Division's Fraud Section. 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.
Former Texas Police Officer Pleads Guilty to Violating the Civil Rights of an ArresteeRead the Press Release
Frank William Carter, 43, a former police officer of the Laredo, Texas, Police Department (LPD), pleaded guilty today in federal court to violating the civil rights of an arrestee, the Justice Department announced today.
During his guilty plea before U.S. District Judge Diana Saldaña, Carter admitted that while using his authority as a LPD officer, he entered the backseat of a LPD patrol car where the victim was handcuffed and detained and struck the victim several times. According to information presented in court, rear-facing dash camera audio and video recordings revealed that Carter yelled obscenities at the victim while he punched the victim in the head and body. Carter also repeatedly slammed the victim’s face into the back of the seat. The victim remained handcuffed during the entire incident and never resisted or attempted to harm Carter.
“Mr. Carter has admitted that he used unjustified and unlawful force against a handcuffed arrestee,” said Assistant Attorney General for the Civil Rights Division Thomas E. Perez. “The Justice Department will continue to prosecute law enforcement officers who violate the constitutional rights of individuals in their custody.”
Judge Saldaña has ordered a pre-sentence report to be due April 11, 2013, at which time she will set sentencing date and decide whether to accept the guilty plea Carter entered today. Carter faces a maximum penalty of ten years in prison.
This case was investigated by FBI Special Agent Anthony Manganaro and Texas Ranger Nathan Mutz. The case is being prosecuted by Civil Rights Division Trial Attorneys Ryan Murguía and Christopher Lomax, with the assistance of the U.S. Attorney’s Office for the Southern District of Texas.
Former New Mexico Corrections OfficerConvicted on Obstruction of Justice ChargesRead the Press Release
A federal jury late yesterday convicted Kevin Casaus, 25, a former corrections officer at the Bernalillo County, N.M., Metropolitan Detention Center (MDC) in Albuquerque, N.M., on obstruction of justice and falsification of records charges, announced the Justice Department.
Casaus and fellow former MDC corrections officers, Demetrio Juan Gonzales, 40, and Matthew Pendley, 26, were indicted in June 2012, and charged with various crimes related to the assault of an inmate housed at MDC on Dec. 21, 2011, and subsequent attempts to cover up and impede the investigation of the assault. In Oct. 2012, Gonzales pleaded guilty to violating the civil rights of an individual in his custody when he struck and choked the victim in the shower room/dress out area of MDC. Pendley pleaded guilty in Feb. 2012 to obstructing justice by making false statements to law enforcement during their investigation of the assault on an inmate.
According to the evidence at trial, during the early morning hours of Dec. 21, 2011, Gonzales was assigned to the Receiving-Discharge-Transfer (RDT) Unit at MDC where individuals are brought to be booked soon after they are arrested. His job was to photograph and fingerprint those who are brought to RDT for booking. The victim, who had been arrested for Driving While Intoxicated, was verbally uncooperative during the booking process, but was not a physical threat to anyone. Gonzales testified that he became angry at the victim and walked him to the shower room where he knew there were no surveillance cameras. Several other corrections officers, including Casaus, followed Gonzales to the shower room. There, Gonzales physically assaulted the victim, striking him multiple times, and choking him. Gonzales testified that he beat the victim “in a blind rage” and then had to wash the victim’s blood off his hands. He further testified that the victim did not do anything to justify the beating.
According to the testimony, Casaus and two other corrections officers were present in the shower room during the beating. Additionally, a former inmate who was in the hallway outside the shower room at the time of the beating, overheard groans and sounds consistent with the assault coming from the shower room. He was then tasked with cleaning the blood that was on the floors and walls of the shower room. The victim testified that, after Gonzales left the shower room, Casaus assaulted him by shoving him and striking him. Casaus falsely stated during a recorded interview with a Bernalillo County Sheriff’s Office investigator that the victim was not assaulted in the shower room, the victim was not bleeding, and that they only brought the victim to the shower room to ask him to change out of his clothes. Casaus falsified his report when he wrote that he saw blood on the victim's clothes, but did not know where the blood came from.
The jury deliberated approximately four hours before returning a verdict of guilty on the obstruction of justice and falsification of records charges, and not guilty on the assault charge.
“Today's verdict affirms that law enforcement officers are not above the very laws they are sworn to uphold,” said Assistant Attorney General Thomas E. Perez. “As in this case, the Civil Rights Division will work closely with our United States Attorneys to vigorously prosecute police misconduct.”
Casaus faces a maximum penalty of 20 years in prison when he is sentenced. His sentencing hearing has yet to be scheduled. Gonzales was sentenced in Jan. 2013 to 33 months in prison. Pendley’s sentencing hearing also has not been scheduled.
“When those who are sworn to uphold the law and protect others instead abuse their power and position, they undermine the public’s confidence in the justice system and our government institutions,” said Kenneth J. Gonzales, U.S. Attorney for the District of New Mexico. “The U.S. Attorney’s Office and the Department of Justice are committed to promoting trust in our system of justice by vigorously prosecuting those who obstruct justice.”
“Corrections officers have a special duty to safeguard the civil rights of the inmates they oversee. That is why the Albuquerque FBI aggressively investigated this case that also resulted in the guilty pleas of two other former MDC officers,” said Carol K.O. Lee, Special Agent in Charge of the Albuquerque Division of the FBI. “I would like to congratulate the FBI Special Agents for their hard work, and the U.S. Attorney's Office and the Justice Department’s Civil Rights Division for three successful and important civil rights prosecutions. I also want to thank the Bernalillo County Sheriff's Office and the Metropolitan Detention Center's executive management and internal affairs staff.”
This case was investigated by the Albuquerque Division of the FBI and is being prosecuted by Assistant U.S. Attorney Mark T. Baker for the District of New Mexico and Trial Attorney Fara Gold of the Civil Rights Division of the U.S. Department of Justice.
Department of Justice Awards $1 Million to the National Crime Prevention Council to Support Gun Safety CampaignRead the Press Release
The Bureau of Justice Assistance (BJA) awarded $1 million to the National Crime Prevention Council (NCPC) to support the development of a National Public Education Campaign on the subject of responsible gun ownership and safe gun storage. With the award, NCPC will create, produce, and distribute television, radio, and outdoor Public Service Announcements (PSAs) that encourage gun owners to safely store their firearms so that they do not fall into the wrong hands. The campaign will also emphasize the importance of immediately reporting lost or stolen guns to local law enforcement to ensure public safety.
“As part of President Obama's comprehensive plan to reduce gun violence, the Administration is committed to working with firearm owners and enthusiasts to prevent tragic accidents and keep guns from falling into the wrong hands,” said Attorney General Eric Holder. “We are determined to implement the kinds of common-sense solutions that our citizens - and especially our young people - deserve.”
Ensuring the public is educated in responsible gun ownership and firearm safety is a critical aspect to reducing gun violence. Gun owners, community groups and businesses must be aware and reminded to practice safe firearm storage and to make certain that firearms in the home are not casually accessible. This public awareness campaign will endeavor to decrease the threat of gun violence by promoting principles of responsible firearm ownership nationwide and providing guidelines for the safe usage and storage of firearms.
NCPC, founded in 1982, is the nation’s nonprofit leader in crime prevention. For 30 years, they have delivered crime prevention tips and public service advertising campaigns that empower citizens individually and collectively to keep themselves, their families and their communities safe from crime.
It is planned that the PSAs created through this award will be distributed to more than 1,700 television stations, nearly 15,000 radio stations and more than 500 cable networks in 210 markets in summer 2013.
CIA Contractors Settle False Claims Act and<br /> Kickback Allegations for $3 MillionRead the Press Release
The Justice Department announced today that American Systems Corporation, Anixter International Inc., and Corning Cable Systems LLC have agreed to pay the U nited States $3 million to settle allegations that they violated the False Claims Act and the Anti-Kickback Act in bidding on a contract with the CIA.
The settlement announced today resolves claims against these contractors related to a CIA contract awarded to American Systems in early 2009 to provide supplies and services. American Systems teamed with Anixter to bid on the contract with Corning as a supplier. The United States alleged t hat American Systems, Anixter and Corning provided gratuities, including meals, entertainment, gifts and tickets to sporting and other events, to CIA employees and outside consultants in order to influence contract specifications that would favor the three companies in the award of the contract. The settlement also resolves allegations that the three companies improperly received source selection information from a CIA employee to whom they had provided gratuities, and that they had concealed the gratuities prior to award.
“This settlement shows that the United States will protect the integrity of the federal procurement process from the wrongful activities of unscrupulous contractors,” said Stuart F. Delery, Principal Deputy Assistant Attorney General for the Department of Justice, Civil Division. “Plying government officials with meals and entertainment to gain favorable treatment in the award of federal contracts corrupts the procurement process and will not be allowed.”
“Improper gifts and gratuities paid to government officials are a corrupting influence on government contracts. Combating this type of conduct is a high priority in the Eastern District of Virginia,” said U.S. Attorney for the Eastern District of Virginia Neil MacBride.
“This case clearly reflects that the CIA will respond effectively to allegations of fraud affecting agency programs,” said CIA Inspector General David B. Buckley. “My office treats contract fraud and related employee misconduct as one of our top investigative priorities, and we work closely with agency employees and the Department of Justice to ensure that illegal acts are addressed in an effective manner.”
The allegations resolved by the settlement were initiated by a lawsuit filed in the Eastern District of Virginia under the qui tam, or whistleblower, provisions of the False Claims Act by former Anixter sales representative, William Jones. Under the False Claims Act, private citizens may sue on behalf of the United States for false claims and share in any recovery obtained by the government. Jones will receive $585,000 as his share of the government’s recovery.
This settlement was the result of a coordinated effort by the United States Attorney's Office for the Eastern District of Virginia; the Department of Justice, Civil Division, Commercial Litigation Branch; and the CIA, Office of Inspector General. The claims settled by this agreement are allegations only; there has been no determination of liability.
CH2M Hill Hanford Group Inc. Admits Criminal Conduct, Parent Company Agrees to Cooperate in Ongoing Investigation and Pay $18.5 Million to Resolve Civil and Criminal AllegationsRead the Press Release
The Justice Department, in conjunction with the U.S. Attorney’s Office for the Eastern District of Washington, announced today that Colorado-based CH2M Hill Hanford Group Inc. (CHG) and its parent company, CH2M Hill Companies Ltd. (CH2M Hill) have agreed that CHG committed federal criminal violations, defrauding the public by engaging in years of widespread time card fraud. In order to resolve CHG’s civil and criminal liability, CH2M Hill has agreed to pay a total of $18.5 million, commit an additional $500,000 towards accountability systems, consent to a corporate monitor, and to continue actively cooperating with the ongoing fraud investigation .
Between 1999 and 2008, CH2M Hill had a Department of Energy contract to manage and clean 177 large underground storage tanks containing mixed radioactive and hazardous waste at the Department of Energy’s Hanford Nuclear Site in southeastern Washington (the Tank Farms Contract). The Hanford Site was used for the production of nuclear weapons during World War II and the Cold War. According to the statement of facts agreed to by the United States and CH2M Hill, CHG hourly employees involved in the cleanup routinely overstated the number of hours they worked, and CHG management condoned the practice and submitted inflated claims to the Department of Energy that included the fraudulently claimed hours.
Specifically, CH2M Hill and the United States agreed that CHG’s hourly workers “consistently refuse[d] to perform any overtime work unless that overtime was offered, or ‘called out,’ in 8 hour blocks.” As stated in the agreed statement of facts, “[t]he inability of CHG’s upper management to secure the necessary overtime volunteers for various jobs threatened CHG’s ability to complete various projects linked to the Tank Farms Contract performance incentives. This in turn threatened CHG’s ability to earn certain fees, and therefore profits under the Tank Farms Contract.” According to the agreed statement of facts, the inability to obtain performance based incentives would have directly impacted the personal corporate bonuses of certain members of CHG’s upper management. Consequently, “certain members of CHG’s upper management, certain direct supervisors of the hourly workers, and certain other supervisory personnel, accepted the practice of hourly workers only working until the particular overtime job was completed, leaving Hanford, and falsely claiming a full 8 hours even when the job took less than 8 hours,” according to the agreed statement of facts.
Unfortunately, the widespread time card fraud at CHG was not limited to overtime abuse and had occurred for many years, in some instances even pre-dating the Tank Farms Contact, as stated in the agreed statement of facts. Further the agreed statement of facts provides that, “[c]ertain members of CHG’s upper management, certain direct supervisors of hourly employees, and other certain supervisory personnel, did not discipline, formally or informally, CHG hourly workers for routinely engaging in known time card fraud. In fact, certain of CHG’s direct supervisors of hourly workers engaged in patterns designed to avoid the detection of the routine time card fraud by law enforcement and internal auditors.” In this manner, as CH2M Hill agrees, CHG “knowingly, willfully, and with intent to defraud, facilitated CHG’s hourly workers routinely getting paid for hours they did not work and combined, conspired, and agreed with CHG hourly workers to accomplish the same, all at the sole expense of the citizens of the United States.”
“Contractors owe a duty to the taxpayers to accurately bill the United States for work performed,” said Stuart F. Delery, Principal Deputy Assistant Attorney General for the Civil Division of the Department of Justice. “This settlement demonstrates that the Department of Justice, working together with its law enforcement partners, will hold contractors accountable for false billing and restore wrongfully taken funds to the Treasury.”
“This sort of systemic fraud is an appalling abuse of the trust we place in our contractors at Hanford and it simply will not be tolerated,” said Michal C. Ormsby, U.S. Attorney for the Eastern District of Washington. “However, we are pleased that CH2M Hill has stepped up and admitted to the criminal conduct of its subsidiary and has agreed to pay back a good faith estimate of what was taken, including criminal proceeds from the conspiracy.” U.S. Attorney Ormsby went on to outline that pursuant to the global agreement, “CH2M Hill has also agreed to take substantial remedial steps going forward including having its remaining subsidiary at the Hanford Site, CH2M Hill Plateau Remediation Company, consent to a corporate monitor for 3 years, and to commit an additional $500,000 towards making sure something like this does not happen again.” U.S. Attorney Ormsby also noted that, “under this global resolution, CH2M Hill will continue its commendable cooperation and help ensure that all individuals who participated in this conspiracy and profited from it will be brought to justice as well.”
“I am pleased with today’s announcement. I would like to express my thanks to the entire team – including Inspector General Special Agents, the United States Attorney's Office, the Department of Justice Civil Frauds Division and the FBI—for their efforts on this investigation,” said Gregory H. Friedman, the Department of Energy Inspector General. “It is essential that Department of Energy contractors be held accountable for effective stewardship of U.S. taxpayer dollars.”
The global resolution consists of CH2M Hill paying $16,550,000 to resolve its civil liability under the False Claims Act. In addition, CH2M Hill entered into a Non-Prosecution Agreement with the United States Attorney’s Office for the Eastern District of Washington to resolve its criminal liability. Under the terms of that agreement, CH2M Hill will refund an additional $1.95 million in wrongfully obtained profits, dedicate $500,000 to foster increased accountability at the Hanford Site, and pay for independent monitoring to ensure that CH2M Hill takes adequate corrective actions. To date, eight individuals have pleaded guilty to engaging in the same time card fraud scheme and conspiracy that CH2M Hill has now admitted CHG itself was a conspirator in.
The civil fraud allegations under the False Claims Act resolved by today’s settlement were initially alleged in a whistleblower lawsuit filed by Carl Schroeder, a former employee of CH2M Hill and one of those who pleaded guilty to the scheme. Under the False Claims Act, private citizens can sue on behalf of the United States and share in the recovery. The act, however, bars whistleblowers from recovering if they were convicted based on their role in the scheme.
This case was handled by the Civil Division of the Department of Justice and the U.S. Attorney’s Office for the Eastern District of Washington, with investigative assistance provided by the Department of Energy Office of Inspector General and the FBI.
The False Claims Act suit was filed in the United States District Court for the Eastern District of Washington, and is captioned United States ex rel. Schroeder v. CH2M Hill, No. 09-cv-5038 (E.D. Wash.).
Alabama Defendants Sentenced for Their Role in a Million Dollar Identity Theft Tax SchemeRead the Press Release
Corey Means was sentenced yesterday to 20 months in prison and Melba Wilson to eight months home detention for their involvement in a million dollar identity theft tax scheme, the Justice Department and the Internal Revenue Service (IRS) announced.
According to court documents, between October 2009 and April 2012, Antoinette Djonret and her co-conspirators used stolen identities to file over 1,000 false tax returns that fraudulently claimed over $1.7 million in tax refunds. Djonret orchestrated this scheme. She obtained stolen identities from multiple sources, including Alabama state databases. She also established an elaborate network for laundering the refund money. Djonret recruited Corey Means, Melba Wilson and others into the conspiracy. Melba Wilson and Corey Means recruited individuals to obtain prepaid debit cards and gave the cards to Djonret. Corey Means also provided addresses to Djonret for the purpose of receiving prepaid debit cards. The fraudulent tax refunds obtained by the conspiracy were directed to these prepaid debit cards and Djonret and her co-conspirators would then use the cards to obtain the proceeds. Djonret was previously sentenced to 144 months in prison for her role in this scheme and for other criminal conduct.
Assistant Attorney General Keneally commended the efforts of Special Agents of IRS - Criminal Investigation, who investigated the case, and Tax Division Trial Attorneys Jason H. Poole and Michael Boteler, and Assistant U.S. Attorney Todd Brown, who prosecuted the case.
Additional information about the Tax Division and its enforcement efforts may be found at www.justice.gov/tax .
Par Pharmaceuticals Pleads Guilty and Agrees to Pay $45 Million to Resolve Civil and Criminal Allegations Related to Off-Label MarketingRead the Press Release
New Jersey-based Par Pharmaceutical Companies Inc. pleaded guilty in federal court today and agreed to pay $45 million to resolve its criminal and civil liability in the company’s promotion of its prescription drug Megace ES for uses not approved as safe and effective by the Food and Drug Administration (FDA) and not covered by federal health care programs, the Justice Department announced.
Chief Executive Officer Paul V. Campanelli pleaded guilty on behalf of Par before U.S. Magistrate Judge Madeline Cox Arleo earlier today in Newark, N.J., federal court. Judge Arleo fined Par $18 million and ordered $4.5 million in criminal forfeiture. Par also agreed to pay $22.5 million to resolve its civil liability.
“Today’s resolution emphasizes the importance of the U.S. government’s coordinated efforts to combat health care fraud. We expect companies to make honest, lawful claims about the drugs they sell. We will be vigorous in our enforcement efforts when they break the law, to ensure that they are held accountable,” said Stuart F. Delery, Principal Deputy Assistant Attorney General for the Justice Department’s Civil Division.
“The FDA requires drug makers to go through a stringent approval process before new drugs – or new uses for existing drugs – are made available to doctors and their patients,” said Paul J. Fishman, U.S. Attorney for the District of New Jersey. “Today, Par admitted that it chose to ignore that process in pursuit of more sales and greater profits. It is paying the price for its choice.”
“Individual accountability of Par’s board and executives is required under the comprehensive five-year integrity agreement the Office of the Inspector General has with the company,” said Daniel R. Levinson, Inspector General of the U.S. Department of Health and Human Services. “For example, company executives may have to forfeit annual bonuses if they or their subordinates engage in significant misconduct, and sales representatives may not be paid incentive compensation for the drug involved in the case, or successor branded versions of that drug.”
“The public has been well served by this investigation and the FDA commends the efforts of the U.S. Attorney's Office in New Jersey, the Department of Justice and the other law enforcement agencies that worked with us to vigorously pursue this matter,” said Mark Dragonetti, Special Agent in Charge of the FDA’s Office of Criminal Investigation's New York Field Office. “Today’s settlement demonstrates the FDA’s continued commitment to target companies that disregard the safeguards of the drug approval process and promote drugs for uses before they have been proven to be safe and effective.”
Par pleaded guilty to an information charging it with a criminal misdemeanor for misbranding Megace ES in violation of the Federal Food, Drug and Cosmetic Act (FDCA). Megace ES, a megestrol acetate drug product was approved by the FDA to treat anorexia, cachexia, or other significant weight loss suffered by patients with AIDS. The Megace ES distributed nationwide by Par was criminally misbranded because its FDA-approved labeling lacked adequate directions for use in the treatment of non-AIDS-related geriatric wasting, a use that was intended by Par but never approved by the FDA. The FDCA requires companies such as Par to specify the intended uses of a product in its new drug application to the FDA. Once approved, a drug may not be distributed in interstate commerce for unapproved or “off-label” uses until the company receives FDA approval for the new intended uses. In addition to the criminal fine and forfeiture, the plea agreement mandates that Par implement several compliance measures and annually provide the U.S. Attorney’s Office with a sworn certification from its chief executive officer that the company has not unlawfully marketed any of its pharmaceutical products.
The civil settlement agreement requires Par to pay $22.5 million to the federal government and various states to resolve claims arising from its off-label marketing. The civil settlement resolves allegations that Par, by promoting the sale and use of Megace ES for uses that were not FDA-approved and not covered by Federal health care programs, caused false claims to be submitted to these programs. The United States further alleged that Par deliberately and improperly targeted sales to elderly nursing home residents with weight loss, whether or not such patients suffered from AIDS, and launched a long-term care sales force to market to this population. During this marketing campaign, Par was allegedly aware of adverse side effects associated with the use of megestrol acetate in elderly patients, including an increased risk of deep vein thrombosis, toxic reactions in elderly patients with impaired renal function, and mortality. The United States alleged that Par made unsubstantiated and misleading representations about the superiority of Megace ES over generic megestrol acetate for elderly patients to encourage providers to switch patients from generic megestrol acetate to Megace ES, despite having conducted no well-controlled studies to support a claim of greater efficacy for Megace ES. Except as admitted in the plea agreement, the claims settled by the civil settlement agreement are allegations only, and there has been no determination of liability as to those claims.
In addition to the criminal and civil resolutions, Par also agreed to enter into a five-year corporate integrity agreement with the Office of the Inspector General of the Department of Health and Human Services (HHS-OIG) that requires enhanced accountability, increased transparency and wide-ranging monitoring activities conducted by both internal and independent external reviewers.
The plea agreement and corporate integrity agreement include provisions that require Par to implement changes to the way it does business. The plea agreement and agreement prohibit Par from providing compensation to sales representatives or their managers based on the volume of sale of Megace ES, and in the corporate integrity agreement, based on the volume of Megace ES and any branded successor megestrol acetate drug. Under the agreement, Par is also required to change its executive compensation program to permit the company to recoup annual bonuses from covered executives if they, or their subordinates, engage in significant misconduct.
The settlement resolves three lawsuits filed under the whistleblower provisions of the False Claims Act, which permit private parties to file suit on behalf of the United States and obtain a portion of the government’s recovery. The civil lawsuits were filed in the District of New Jersey and are captioned U.S. ex rel. McKeen and Combs v. Par Pharma ceutical, et al., U.S. ex rel. Thompson v. Par Pha rmac eutical, et al., and U.S. ex rel. Elliott & Lundstrom v. Bristol-M yers Squibb, Par Pharma ceutical, et al. As part of today’s resolution, relators McKeen and Combs will receive $4.4 million.
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 $10.2 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 $14.1 billion.
Owner and Operator of Houston-Area Ambulance Service Convicted in Medicare Fraud SchemeRead the Press Release
The owner and operator of a Houston-area ambulance company was convicted by a federal jury in Houston of multiple counts of health care fraud for submitting false and fraudulent claims to Medicare, Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Kenneth Magidson of the Southern District of Texas, Special Agent in Charge Stephen L. Morris of the FBI’s Houston Field Office and Special Agent in Charge Mike Fields of the U.S. Health and Human Services Office of Inspector General, Office of Investigations Houston Office announced today.
Olusola Elliott, 44, of Fort Bend County, Texas, was convicted late yesterday by a federal jury in U.S. District Court in the Southern District of Texas of one count of conspiracy to commit health care fraud and six counts of health care fraud.
Elliott was the owner and operator of Double Daniels LLC, a Texas entity that purportedly provided non-emergency ambulance services to Medicare beneficiaries in the Houston area. According to evidence presented at trial, Elliott and others conspired from April 2010 through December 2011 to unlawfully enrich themselves by submitting false and fraudulent claims to Medicare for ambulance services that were medically unnecessary and not provided. Evidence showed that Elliott falsified patient records in order to fraudulently bill Medicare on behalf of beneficiaries who were not in need of ambulance services.
During the course of the scheme, Elliott submitted and caused the submission of approximately $1,713,716 in fraudulent ambulance service claims to Medicare. According to court documents, Elliot transferred the proceeds of the fraud to himself and others after Medicare payments were sent to Double Daniels.
Elliot is scheduled for sentencing on May 31, 2013, in Houston. The six health care fraud counts and the conspiracy count each carry a maximum potential penalty of 10 years in prison and a $250,000 fine
This case is being prosecuted by Trial Attorneys Christopher Cestaro and Laura M.K. Cordova of the Criminal Division’s Fraud Section with assistance from former Special Assistant U.S. Attorney James S. Seaman. The case was investigated by the FBI, HHS-OIG and the Texas Attorney General Medicaid Fraud Control Unit. The case was brought as part of the Medicare Fraud Strike Force, supervised by the U.S. Attorney’s Office for the Southern District of Texas and the Criminal Division’s Fraud Section.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,480 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.
Justice Department Settles with the University of Medicine and Dentistry of New Jersey over Discrimination Against People with Hepatitis BRead the Press Release
The Justice Department announced today that it has reached a settlement with the University of Medicine and Dentistry of New Jersey School (UMDNJ) under the Americans with Disabilities Act (ADA). The settlement resolves complaints that the UMDNJ School of Medicine and the UMDNJ School of Osteopathic Medicine unlawfully excluded applicants because they have hepatitis B. This is the first ADA settlement ever reached by the Justice Department on behalf of people with hepatitis B.
In 2011, the two applicants in this matter applied and were accepted to the UMDNJ School of Osteopathic Medicine, and one of them was also accepted to the UMDNJ School of Medicine. The schools later revoked the acceptances when the schools learned that the applicants have hepatitis B. The Justice Department determined that the schools had no lawful basis for excluding the applicants, especially because students at the schools are not even required to perform invasive surgical procedures, and that the exclusion of the applicants contradicts the Centers for Disease Control and Prevention’s (CDC) updated guidance on this issue.
According to the CDC’s July 2012 “Updated Recommendations for Preventing Transmission and Medical Management of Hepatitis B Virus (HBV) – Infected Health Care Workers and Students,” no transmission of Hepatitis B has been reported in the United States from primary care providers, clinicians, medical or dental students, residents, nurses, or other health care providers to patients since 1991.
“Excluding people with disabilities from higher education based on unfounded fears or incorrect scientific information is unacceptable,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “We applaud the UMDNJ for working cooperatively with the Justice Department to resolve these matters in a fair manner.”
“It is especially important that a public institution of higher learning – especially one with a mission to prepare future generations of medical professionals – strictly follow the laws Congress has enacted to protect from discrimination those people who have health issues,” said U.S. Attorney for the District of New Jersey Paul Fishman. “The remedies to which the school has agreed should ensure this does not happen again.”
Under the settlement agreement, the UMDNJ must adopta disability rights policy that is based on the CDC’s Hepatitis B recommendations, permit the applicants to enroll in the schools, provide ADA training to their employees and provide the applicants a total of $75,000 in compensation and tuition credits.
Both of the applicants in this matter come from the Asian American Pacific Islander community. The CDC reports that Asian American Pacific Islanders (AAPIs) make up less than 5 percent of the total population in the United States, but account for more than 50 percent of Americans living with chronic Hepatitis B. Nearly 70 percent of AAPIs living in the United States were born, or have parents who were born, in countries where hepatitis B is common. Most AAPIs with Hepatitis B contracted Hepatitis B during childbirth . The Civil Rights Division is committed to ensuring that this community is not subjected to discrimination because of disability.
Title II of the ADA prohibits state and local government entities, like the UMDNJ, from discriminating against individuals with disabilities in programs, services, and activities. State and local governments must also make reasonable modifications in policies, practices, and procedures when the modifications are necessary to avoid discrimination on the basis of disability, unless those modifications would result in a fundamental alteration.
More information about the Civil Rights Division and the laws it enforces is available at the website www.justice.gov/crt. More information about the ADA and today’s agreement with UMDNJ can be accessed at the ADA website at www.ada.gov or by calling the toll-free ADA information line at 800-514-0301 or 800-514-0383 (TTY).
Indictment Charges Two Former Maryland Correctional Officers in Relation to an Assault of an InmateRead the Press Release
A third indictment, this time charging two former officers at Roxbury Correctional Institution (RCI), was returned today, in relation to assaults of an inmate, identified as K.D., and subsequent obstruction of justice, announced Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. On Feb. 26, 2013, a grand jury returned two indictments charging a total of nine current or former RCI officers with two subsequent assaults of the same inmate, K.D.
In the indictment returned today, former RCI Lieutenant Robert Harvey and former Correctional Officer Keith Morris are charged with a civil rights offense for their alleged assault on K.D., an inmate, during the 3 p.m. to 11 p.m. shift on March 8, 2013. Harvey also faces an obstruction of justice charge for allegedly filing a false report related to the assault.
Harvey faces a maximum sentence of 30 years in prison, and Morris faces a maximum term of 10 years in prison.
These indictments bring the total number of individuals charged in relation to this case to 14. Including today’s charges, seven current or former RCI officers have been charged with a civil rights offense for their alleged involvement in a series of assaults on K.D. Two former RCI officers, Dustin Norris and Philip Mayo, recently entered guilty pleas acknowledging that they conspired with other officers to assault K.D. Ten current or former RCI officers have been charged with conspiracy or obstruction offenses for their alleged efforts to cover up staff involvement in the assaults on K.D. Ryan Lohr, a former RCI officer, previously entered a guilty plea admitting that he conspired with other officers to obstruct the investigation into an assault on K.D.
These three cases, which are ongoing, are being investigated by the Frederick Resident Agency of the FBI, and are being prosecuted by Special Litigation Counsel Forrest Christian and Trial Attorney Sanjay Patel of the Justice Department’s Civil Rights Division, with the assistance of P. Michael Cunningham of the U.S. Attorney’s Office for the District of Maryland.
An indictment is merely an accusation, and the defendants are presumed innocent unless proven guilty.
Former U.S. Consulate Guard Sentenced to Nine Years in Prison <br /> for Attempting to Communicate National Defense Information to ChinaRead the Press Release
Bryan Underwood, a former civilian guard at a U.S. Consulate compound under construction in China, was sentenced today to nine years in prison in connection with his efforts to sell for personal financial gain classified photographs, information and access related to the U.S. Consulate to China’s Ministry of State Security (MSS), announced Lisa Monaco, Assistant Attorney General for the Justice Department’s National Security Division; Ronald C. Machen Jr., U.S. Attorney for the District of Columbia; Valerie Parlave, Assistant Director in Charge of the FBI’s Washington Field Office; and Gregory B. Starr, Director of the U.S. State Department’s Diplomatic Security Service.
Underwood pleaded guilty Aug. 30, 2012, in the U.S. District Court for the District of Columbia to one count of attempting to communicate national defense information to a foreign government with intent or reason to believe that the documents, photographs or information in question were to be used to the injury of the United States or to the advantage of a foreign nation. He was sentenced by the Honorable Ellen S. Huvelle. Upon completion of his prison term, Underwood will be placed on two years of supervised release.
Underwood, 32, a former resident of Indiana, was first charged in an indictment on Aug. 31, 2011, with two counts of making false statements and was arrested on Sept. 1, 2011. On Sept. 21, 2011, he failed to appear at a scheduled status hearing in federal court in the District of Columbia. The FBI later located Underwood in a hotel in Los Angeles and arrested him there on Sept. 24, 2011. On Sept. 28, 2011, Underwood was charged in a superseding indictment with one count of attempting to communicate national defense information to a foreign government, two counts of making false statements and one count of failing to appear in court pursuant to his conditions of release.
“Bryan Underwood betrayed America’s trust by attempting to sell access to secure areas of the very U.S. Consulate compound he was charged to protect,” said Assistant Attorney General Monaco. “Today, he is being held accountable for his actions. As this case demonstrates, we remain vigilant in protecting America’s secrets and in bringing to justice those who seek to compromise them.”
“Access to classified information is a special responsibility to be honored, not a financial opportunity to be exploited,” said U.S. Attorney Machen. “Bryan Underwood is going to prison because he tried to make millions by selling secret photos of a U.S. Consulate to a foreign government. His sentence demonstrates our dedication to jealously guarding our nation’s secrets. We all owe a great debt of gratitude to the agents who detected and stopped Underwood before he succeeded in betraying our country.”
“Bryan Underwood attempted to betray his country by using his access to sensitive information for his own benefit. Fortunately, he was stopped before classified information fell into the wrong hands,” said FBI Assistant Director in Charge Parlave. “Together with our partner agencies, the FBI will continue to diligently work to combat potential acts of espionage that threaten our national security.”“The close working relationship between the U.S. Department of State’s Diplomatic Security Service, the FBI and the U.S. Attorney’s Office resulted in the conviction of Bryan Underwood before he could potentially harm the security of our country,” said Director Starr of the Diplomatic Security Service. “This was a great success by all of the agencies involved.”
According to court documents, from November 2009 to August 2011, Underwood worked as a cleared American guard (CAG) at the site of a new U.S. consulate compound that was under construction in Guangzhou, China. During this time, the compound was not yet operational. CAGs are American civilian security guards with top secret clearances who serve to prevent foreign governments from improperly obtaining sensitive or classified information from the construction site. Underwood received briefings on how to handle and protect classified information as well as briefings and instructions on security protocols for the U.S. Consulate, including the prohibition on photography in certain areas of the consulate.
In February 2011, Underwood was asked by U.S. law enforcement to assist in a project at the consulate and he agreed. In March and April of 2011, Underwood lost a substantial amount of money in the stock market. According to court documents, Underwood then devised a plan to use his assistance to U.S. law enforcement as a “cover” for making contact with the Chinese government. According to his subsequent statements to U.S. law enforcement, Underwood intended to sell his information about and access to the U.S. Consulate to the Chinese MSS for $3 million to $5 million. If any U.S. personnel caught him, he planned to falsely claim he was assisting U.S. law enforcement.
As part of his plan, Underwood wrote a letter to the Chinese MSS, expressing his “interest in initiating a business arrangement with your offices” and stating, “I know I have information and skills that would be beneficial to your offices [sic] goals. And I know your office can assist me in my financial endeavors.” According to court documents, Underwood attempted to deliver this letter to the offices of the Chinese MSS in Guangzhou, but was turned away by a guard who declined to accept the letter. Underwood then left the letter in the open in his apartment hoping that the Chinese MSS would find it, as he believed the MSS routinely conducted searches of apartments occupied by Americans.
In May 2011, Underwood secreted a camera into the new U.S. consulate compound and took photographs of a restricted building and its contents. Several of these photographs depict areas or information classified at the Secret level. Underwood also created a schematic that listed all security upgrades to the U.S. consulate and drew a diagram of the surveillance camera locations at the consulate. In addition, according to his subsequent statements to U.S. law enforcement, Underwood “mentally” constructed a plan in which the MSS could gain undetected access to a building at the U.S. consulate to install listening devices or other technical penetrations.
According to court documents, the photographs Underwood took were reviewed by an expert at the State Department’s Bureau of Diplomatic Security who had original classification authority for facilities, security and countermeasures at the U.S. Consulate. The expert determined that several of the photographs contained images classified at the Secret level and that disclosure of such material could potentially cause serious damage to the United States.
In early August 2011, Underwood was interviewed several times by FBI and Diplomatic Security agents, during which he admitted making efforts to contact the Chinese MSS, but falsely claimed that he took these actions to assist U.S. law enforcement. On Aug. 19, 2011, Underwood was again interviewed by law enforcement agents and he admitted that he planned to sell photos, information and access to the U.S. Consulate in Guangzhou to the Chinese MSS for his personal financial gain.
After initially being arraigned in this case on Sept. 1, 2011, Underwood was released on his personal recognizance, with certain conditions, including staying within the Washington, D.C. metropolitan area and returning to court for a status hearing on Sept. 21, 2011. Instead of returning to court as promised, Underwood purchased a bicycle, racks, panniers, helmet and multiple energy snack bars. He left a fake suicide note at his hotel room in Springfield, Va. Then, alive and well, he pedaled west out of Springfield and eventually boarded a bus in Wytheville, Va., under a false name. He was arrested on Sept. 24, 2011 in a hotel room in Los Angeles, with over $10,000 in cash and 80,000 Japanese yen. He has been in custody ever since.
The U.S. government has found no evidence that Underwood succeeded in passing classified information concerning the U.S. Consulate in Guangzhou to anyone at the Chinese MSS.
This investigation was conducted jointly by the FBI’s Washington Field Office and the State Department’s Bureau of Diplomatic Security. The prosecution was handled by the U.S. Attorney’s Office for the District of Columbia and Trial Attorney Brandon L. Van Grack from the Counterespionage Section of the Justice Department’s National Security Division.
Three Philippine Nationals Convicted in Los Angeles of Importing Military Grade WeaponsRead the Press Release
Three Philippine nationals were convicted today in Los Angeles of illegally importing military grade weapons into the United States after being caught in a sting operation that was conducted in the Philippines, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and Bill Lewis, Assistant Director in Charge of the FBI's Los Angeles Field Office.
Sergio Syjuco, 26, Cesar Ubaldo, 27, and Arjyl Revereza, 26, each of the Philippines, were convicted after a four-week trial by a federal jury in U.S. District Court in the Central District of California of conspiring to illegally import the weapons into the United States, and aiding and abetting the importation of those weapons. The defendants were charged in an indictment filed on Jan. 12, 2012.
According to the evidence presented at trial, the defendants conspired to sell high-powered military and assault weapons to a buyer interested in bringing weapons into the United States to arm drug dealers in Mexican drug cartels and Mexican Mafia gang members. In November 2010, Ubaldo met with a prospective weapons buyer, who was actually an undercover FBI agent, and offered to introduce the agent to suppliers of high-powered firearms. Ubaldo subsequently introduced the undercover agent to Syjuco, who supplied the weapons, and Revereza, who was a police officer in the Philippines Bureau of Customs who facilitated the movement of the illegal weapons through Philippines customs and eventually into the United States. The weapons supplied included a rocket propelled grenade launcher, a mortar launcher, an M203 single-shot grenade launcher and 12 Bushmaster machine guns, as well as explosives including mortars and grenades. The trial evidence demonstrated that the defendants also illegally imported into the United States the highest level military body armor.
The weapons, which were tracked and safeguarded by the FBI during their shipment, landed in Long Beach, Calif., on June 7, 2011, where they were seized by the FBI.
At sentencing, which is scheduled for June 10, 2013, each defendant faces a maximum potential penalty of five years in prison and a $250,000 fine for conspiracy to import weapons into the United States, as well as 20 years in prison and a $1,000,000 fine for causing the importation of all of the weapons, excluding the 12 fully automatic Bushmaster firearms. In addition, defendants Syjuco and Revereza face a maximum potential penalty of 20 years in prison and a $1,000,000 fine for causing the importation of all of the weapons in this case, and five years in prison and a $250,000 fine for causing the importation of the 12 fully automatic Bushmaster firearms in this case.
The investigation was conducted by agents and investigators of the FBI, the U.S. Secret Service and the Philippine National Bureau of Investigation. Deputy Chief Kim Dammers and Trial Attorney Margaret Vierbuchen of the Criminal Division’s Organized Crime and Gang Section prosecuted the case.
The Executive Office for Immigration Review Swears in Two Immigration JudgesRead the Press Release
FALLS CHURCH, Va. – The Executive Office for Immigration Review (EOIR) today announced the investiture of two immigration judges. Deputy Chief Immigration Judge Michael C. McGoings presided over the investiture during a ceremony held at EOIR’s headquarters on March 1, 2013.
After a thorough application process, Attorney General Eric Holder appointed Craig A. Harlow and Sunita B. Mahtabfar to their new positions. “The efficient and timely adjudication of detained aliens’ cases are the highest priority for EOIR,” said McGoings. “The addition of Mr. Harlow and Ms. Mahtabfar to our immigration judge corps will allow us to better address our detained caseload.”
Biographical information follows.
Craig A. Harlow, Immigration Judge, Pearsall Immigration Court
Attorney General Eric Holder appointed Judge Harlow in February 2013. Judge Harlow received a bachelor of arts degree in 1989 from Lubbock Christian University in Lubbock, Texas, and a juris doctorate in 1992 from St. Mary’s University School of Law in San Antonio. From June 2012 to February 2013, he served as an assistant chief counsel, Office of Chief Counsel, U.S. Immigration and Customs Enforcement (ICE), Department of Homeland Security, in Dallas. From October 2010 to May 2012, Judge Harlow served as deputy chief counsel for ICE in Oakdale, La. From September 2007 to September 2010, he was the senior attorney for the New Orleans Office of Chief Counsel. From October 1992 to August 2007, Judge Harlow was an assistant chief counsel for ICE in Oakdale, entering on duty through the Attorney General’ s Honors Program. From May 1991 to August 1991, he was a summer law intern in the Oakdale Immigration Court. Judge Harlow is a member of the State Bar of Texas.
Sunita B. Mahtabfar, Immigration Judge, El Paso Service Processing Center
Attorney General Eric Holder appointed Judge Mahtabfar in February 2013. Judge Mahtabfar received a bachelor of arts degree in 1994 from the University of Texas at Austin in Austin, Texas, and a juris doctorate in 1998 from Thurgood Marshall School of Law in Houston. From November 2006 to February 2013, she served as an attorney in the Office of the Assistant Chief Counsel, U.S. Customs and Border Protection, Department of Homeland Security (DHS), in El Paso, Texas. From February 2003 to November 2006, she served as an asylum officer for U.S. Citizenship and Immigration Services, DHS, in Houston. From June 2000 to February 2003, Judge Mahtabfar served as a staff attorney for the Department of Public Safety in Houston. Judge Mahtabfar is a member of the State Bar of Texas.
- 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.
Former North Carolina Builder Pleads Guilty to Tax ObstructionRead the Press Release
William B. Clayton, a residential builder formerly of Corolla, N.C., pleaded guilty today before Judge Terrence W. Boyle to corruptly obstructing and impeding the due administration of the tax laws, the Justice Department and the Internal Revenue Service (IRS) announced.
According to the indictment, Clayton failed to file federal income tax returns over a six-year period, resulting in the assessment of taxes and penalties and the initiation of IRS collection proceedings. Between May 2007 and August 2010, Clayton took steps to obstruct the IRS’s efforts to collect his unpaid tax liabilities, such as concealing property from the IRS and destroying a former property in Corolla that had been acquired by the government. According to court records, in an effort to pay down Clayton’s tax liabilities, the IRS scheduled a public auction of Clayton’s former property. In the days leading up to the auction, Clayton committed, or caused the commission of, various acts of destruction and demolition at the Corolla property, including destroying an outdoor pool deck and pool house, forcibly removing a guest house from the property and transporting it to a non-consenting neighbor’s property, and forcibly removing cabinets, counter tops, a kitchen island, sinks, toilets, and light fixtures.
Clayton’s sentencing hearing is scheduled for May 28, 2013. Clayton faces a maximum potential penalty of three years’ imprisonment, one year of supervised release, and a $250,000 fine.
The investigation of this case was conducted by IRS-Criminal Investigation. The case is being prosecuted by Trial Attorney Adam Hulbig of the Justice Department’s Tax Division.
Federal Court Bars Nashville, Tenn., Mo’ MoneyTaxes Licensee from Preparing Tax ReturnsRead the Press Release
A federal court permanently barred Toney Fields and Trumekia Shaw, who do business as Fields Mo’ Money Taxes in Nashville, Tenn., from preparing federal tax returns, the Justice Department announced today. The civil injunction order was signed by Judge Kevin H. Sharp of the U.S. District Court for the Middle District of Tennessee. It found that the defendants engaged repeatedly in fraudulent conduct that interfered with enforcement of federal tax laws.
The government complaint in the civil injunction lawsuit alleged that Fields is a licensee of Mo’ Money Taxes LLC and MoneyCo USA LLC, both located in Memphis, Tenn. According to the complaint Fields and Shaw get an improper jump on their competition by opening Mo’ Money Taxes in Nashville immediately after Christmas, before the tax year ends. According to the complaint, Fields and Shaw use customers’ end-of-year pay stubs to prepare tax returns, before employers have issued Internal Revenue Service (IRS) W-2 wage-statement forms to employees. Preparing tax returns based on pay stubs rather than proper W-2 Forms violates IRS rules. Fields and Shaw allegedly use the pay stubs to create fake W-2 Forms to include with the returns. End-of-year pay stubs frequently omit income and distributions that are shown on employer-issued W-2 Forms. This inevitably results in errors on federal tax returns.
The complaint alleged that Fields and Shaw inflate or claim false tax credits on customers’ tax returns. According to the complaint, Fields and Shaw frequently claim improper dependent exemptions in order to claim inflated earned-income credits or child tax credits for their customers. The complaint also alleged that the defendants include false filing statuses and bogus claims for charitable contributions on customers’ returns. The complaint says the government estimates that the defendants’ misconduct may have caused revenue losses of over $5 million from the more than 1,100 tax returns they prepared in 2011.
The IRS lists return preparer fraud as one of its “Dirty Dozen” tax scams .
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. Toney Fields, et al.
Order of Permanent Injunction (PDF)Department of Justice Settles Two Civil Complaints Against Two Employers for Violations of Federal Statutes Relating to Military Reserve DutyRead the Press Release
A settlement agreement was filed in U.S. District Court in Denver resolving a complaint alleging that two employers, Delaware Resource Group of Oklahoma LLC (DRG), and FlightSafety Services Corporation (FlightSafety), violated the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA) by not paying money into two U.S. Air Force veterans’ 401(k) plans, announced Assistant Attorney General for the Civil Rights Division Thomas E. Perez and U.S. Attorney for the District of Colorado John Walsh.
USERRA prohibits employers from discriminating against or taking any adverse employment action against any person because that person has performed service in the uniformed services. USERRA also allows returning service members to make “catch up” contributions to their civilian employers’ 401(k) retirement plans, and receive the employers’ matching contributions that were missed while they were on military leave. The Justice Department’s Civil Rights Division and the U.S. Attorney’s Offices have given a high priority to the enforcement of service members’ rights under USERRA.
The two veterans, Michael J. Sipos and Gary D. Smith, are the plaintiffs in this case. According to the complaint, their employers, DRG and FlightSafety, violated USERRA by not allowing the veterans to make “catch up” contributions to their company’s 401(k) plans upon their return from duty and not matching contributions that the veterans missed while on active duty in the Air Force.
Under the settlement agreement, the defendants, DRG and FlightSafety, will allow the plaintiffs to make their “catch up” contributions to their respective 401(k) plans. In addition, DRG and FlightSafety will provide matching employer contributions to each of the veterans’ 401(k) plans.
“We rely on our servicemembers to protect us, and the Department of Justice is committed to ensuring that their civilian employment benefits are protected as well,” said Assistant Attorney General Perez. “The department commends FlightSafety and DRG for agreeing to resolve this matter amicably without contested litigation, which shows a good faith commitment by the companies to ensure that they are in compliance with USERRA.”
The case was litigated by Assistant U.S. Attorney Juan G. Villaseñor in the U.S. Attorney’s Office for the District of Colorado, in collaboration with the Civil Rights Division of the Justice Department. The lawsuit was filed after the Veterans’ Employment and Training Service (VETS) of the Department of Labor referred Sipos’ and Smith’s complaints to the Justice Department upon completion of its investigation and failed settlement efforts. The Departments of Labor and Justice work cooperatively together to protect the jobs and benefits of National Guard and Reserve service members upon their return to civilian life. More information about USERRA is available at www.dol.gov/vets/programs/userra/main.htm .
Related Materials:
FlightSafety Complaint
FlightSafety Settlement AgreementBaltimore Immigration Judge Participates in Naturalization CeremonyRead the Press Release
BALTIMORE --Immigration Judge Lisa Dornell from the Executive Office for Immigration Review, Baltimore Immigration Court, delivered the keynote speech and administered the oath of allegiance to approximately 75 candidates during a naturalization ceremony at the George H. Fallon Federal Building in Baltimore, Md., on March 1, 2012. The Baltimore District Office of U.S. Citizenship and Immigration Services, Department of Homeland Security, hosted the ceremony.
Biographical Information
Attorney General Janet Reno appointed Judge Dornell in April 1995. Judge Dornell received a bachelor of arts degree in 1983 from the University of Vermont and a juris doctorate in 1986 from the University of Texas at Austin School of Law. From 1990 to 1995, Judge Dornell served as senior litigation counsel, Office of Immigration Litigation, Civil Division, Department of Justice. From 1986 to 1990, she served as a trial attorney for the former Immigration and Naturalization Service (INS), New York district office, and as an assistant general counsel, INS Headquarters, Washington, D.C. Judge Dornell lectures on immigration topics and court procedure at several local law schools. She is a member of the District of Columbia and State of Texas Bars.
- 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 ReviewTexas Man Convicted in Corporate Hacking CaseRead the Press Release
A Texas resident was convicted today by a federal jury for conspiring to hack into his former employer’s computer network, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and U.S. Attorney for the Northern District of Texas Sarah R. Saldaña.
Michael Musacchio, 61, of Plano, Texas, was found guilty by a federal jury in Dallas of one felony count of conspiracy to make unauthorized access to a protected computer (hacking) and two substantive felony counts of hacking.
According to the evidence submitted at trial, from 2002 to 2004, Musacchio was the president of Exel Transportation Services, a third party logistics or intermodal transportation company that facilitated links between shippers and common carriers in the manufacturing, retail and consumer industries. In 2004, Musacchio left Exel to form a competing company, Total Transportation Services, where he was the original president and CEO. Two other former Exel employees, Joseph Roy Brown and John Michael Kelly, also went to work at Musacchio’s new company. Trial testimony and exhibits established that between 2004 and 2006, Musacchio, Brown and Kelly engaged in a scheme to hack into Exel’s computer system for the purpose of conducting corporate espionage. Through their repeated unauthorized accesses into Exel’s email accounts, the co-conspirators were able to obtain Exel’s confidential and proprietary business information and use it to benefit themselves and their new employer.
A federal grand jury had returned an indictment against the three men on Nov. 2, 2010. Brown and Kelly entered guilty pleas on May 19, 2011, and Aug. 2, 2012, respectively, and are awaiting sentencing. Musacchio is scheduled to be sentenced on June 14, 2013, before U.S. District Judge Jorge A. Solis in the Northern District of Texas.
The case was investigated by the FBI Dallas Field Office and was prosecuted by Assistant U.S. Attorneys Linda Groves and Candina Heath and Trial Attorney Rick Green of the Criminal Division’s Computer Crime and Intellectual Property Section.President Barack Obama Grants PardonsRead the Press Release
Today President Barack Obama granted pardons to the following seventeen individuals:
- Robert Leroy Bebee – Rockville, Md.
Offense: Misprision of a felony, 18 U.S.C. § 4.
Sentence: Two years probation.
- James Anthony Bordinaro – Gloucester, Mass.
Offenses: Conspiracy to restrain, suppress, and eliminate competition in violation of the Sherman Act, 15 U.S.C. § 1; conspiracy to submit false statements, 18 U.S.C. § 371.
Sentence: 12 months imprisonment, three years supervised release and a $55,000 fine.
- Kelli Elisabeth Collins – Harrison, Ark.
Offense: Aiding and abetting a wire fraud, 18 U.S.C. §§ 1343, 2.
Sentence: Five years probation.
- Edwin Hardy Futch Jr. – Pembroke, Ga.
Offense: Theft from an interstate shipment, 18 U.S.C. §§ 659, 2.
Sentence: Five years probation, $2,399.72 restitution.
- Cindy Marie Griffith – Moyock, N.C.
Offense: Distribution of satellite cable television decryption devices, 47 U.S.C.
§ 605(e)(4), 18 U.S.C. § 2.
Sentence: Two years probation with 100 hours of community service.
- Roy Eugene Grimes Sr. – Athens, Tenn.
Offenses: Falsely altering a United States postal money order, 18 U.S.C. § 500; passing,
uttering, and publishing a forged and altered money order with intent to defraud,
18 U.S.C. § 500.
Sentence: 18 months probation.
- Jon Christopher Kozeliski – Decatur, Ill.
Offense: Conspiracy to traffic counterfeit goods, 18 U.S.C. §§ 371, 2320.
Sentence: One year of probation with six months of home confinement, $10,000 fine.
· Jimmy Ray Mattison – Anderson, S.C.
Offenses: Conspiracy to transport and cause the transportation of altered securities in
interstate commerce, 18 U.S.C. §§ 371, 2314; transporting and causing the transportation
of altered securities in interstate commerce, 18 U.S.C. §§ 2314, 2.
Sentence: Three years probation.
- An Na Peng – Honolulu
Offense: Conspiracy to defraud the Immigration and Naturalization Service,
18 U.S.C. § 371.
Sentence: Two years probation, $2,000 fine.
- Michael John Petri – Montrose, S.D.
Offense: Conspiracy to possess with intent to distribute and distribution of a controlled
substance (cocaine), 21 U.S.C. §§ 841(a), 846.
Sentence: Five years imprisonment, three years supervised release.
- Karen Alicia Ragee – Decatur, Ill.
Offense: Conspiracy to traffic counterfeit goods, 18 U.S.C. §§ 371, 2320.
Sentence: One year of probation with six months of home confinement, $2,500 fine.
- Jamari Salleh – Alexandria, Va.
Offense: False claims upon and against the United States, 18 U.S.C. §§ 287, 2.
Sentence: Four years probation, $5,000 fine, $5,900 restitution.
- Alfor Sharkey – Omaha, Neb.
Offense: Unauthorized acquisition of food stamps, 7 U.S.C. § 2024(b)(1).
Sentence: Three years probation with 100 hours of community service, $2,750 restitution.
- Donald Barrie Simon Jr. – Chattanooga, Tenn.
Offense: Aiding and abetting in the theft of an interstate shipment, 18 U.S.C. §§ 659, 2.
Sentence: Two years imprisonment, three years probation.
- Lynn Marie Stanek – Tualatin, Ore.
Offense: Unlawful use of a communication facility to distribute cocaine,
21 U.S.C. § 843(b).
Sentence: Six months in jail, five years probation conditioned on residence in a
community treatment center for a period not to exceed one year.
- Larry Wayne Thornton – Forsyth, Ga.
Offense: Possession of an unregistered firearm, 26 U.S.C. §§ 5861(d), 5871; possession
of a firearm without a serial number, 26 U.S.C. §§ 5861(i), 5871.
Sentence: Four years probation.
- Donna Kaye Wright – Friendship, Tenn.
Offense: Embezzlement and misapplication of bank funds, 18 U.S.C. § 656.
Sentence: 54 days imprisonment, three years probation conditioned on performance of six hours of community service per week.
North Carolina Commodities Firm Owner Sentenced to 36 Months in Prison for Multimillion-dollar FraudRead the Press Release
The principal and co-owner of North Carolina-based Integra Capital Management LLC, was sentenced today to serve 36 months in prison for his role in a scheme to defraud commodities trading investors of more than $3.2 million, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney of the Western District of North Carolina Anne M. Tompkins.
Nicholas Cox, 35, of Lexington, N.C., was sentenced by U.S. District Judge Max O. Cogburn Jr., in the Western District of North Carolina. In addition to his prison term, Cox was sentenced to serve three years of supervised release and ordered to pay $1,981,477 in restitution.
On Dec. 22, 2012, Cox pleaded guilty in the Western District of North Carolina to one count of conspiracy to commit mail fraud, five counts of mail fraud and one count of conspiracy to commit money laundering.
According to court documents, between September 2006 and January 2009, Cox and his co-conspirator, Rodney Whitney, 50, of Archdale, N.C., the co-owner of Integra, engaged in a scheme to defraud investors in commodity trading pools operated by the firm. Integra was established purportedly for the purpose of pooling investors’ funds in commodity pools, and investing in commodity futures and foreign currency exchange trading. According to court documents, Cox and Whitney obtained and misappropriated more than $3.2 million in investor funds and fabricated account statements and tax forms to conceal their fraud.
According to court documents, Cox and Whitney falsely represented, among other things, that Integra’s managers had more than 30 years of combined market experience; that Integra paid dividends of two to five percent of the investor’s initial investment, which was derived from Integra’s trading profits; and investors could remove their principal investments within five days upon giving notice to Integra. According to court documents, Cox and Whitney used the money invested by later investors to pay the monthly investment returns they had promised to earlier investors, to purchase real estate, to fund other business ventures and to purchase automobiles and other personal goods and services.
On March 21, 2011, Whitney pleaded guilty to one count of conspiracy to commit mail and wire fraud and one count of conspiracy to commit money laundering. He was sentenced on Jan. 7, 2013, to 60 months in prison for his role in the scheme.
The case was prosecuted by Trial Attorney Luke Marsh of the Criminal Division=s Fraud Section and Benjamin Bain-Creed and Kenny Smith of the U.S. Attorney’s Office for the Western District of North Carolina. The case was investigated by the U.S. Postal Inspection Service.
This prosecution was done in coordination 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.
Former Commander of Mexican State Police and Member of the Gulf Cartel Pleads Guilty to Drug Conspiracy ChargesRead the Press Release
Gilberto Lerma Plata, a former commander of the Mexican State Police and member of the Gulf Cartel, pleaded guilty today to conspiracy to import multi-ton quantities of marijuana into the United States, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and Administrator Michele M. Leonhart of the Drug Enforcement Administration (DEA).
Lerma Plata, 50, pleaded guilty before U.S. District Judge Colleen Kollar-Kotelly in the District of Columbia.
On July 29, 2011, Lerma Plata was charged with conspiracy to manufacture and distribute five kilograms or more of cocaine and 1,000 kilograms or more of marijuana for importation into the United States. Lerma Plata was arrested in McAllen, Texas, on May 9, 2012.
“As a Mexican police officer, Gilberto Lerma Plata was supposed to protect the public from harm. Instead, he abused his power to further the notorious Gulf Cartel’s violent narcotics trafficking operations,” said Acting Assistant Attorney General Raman. “This prosecution is the product of the Justice Department’s unwavering commitment to working with its domestic and foreign law enforcement partners to bring cartel members and associates to justice for their crimes.”
“Using operatives such as former Mexican state police commander Gilberto Lerma Plata, the Gulf Cartel has smuggled huge amounts of dangerous drugs into the United States for far too long, while using violence, intimidation and public corruption to strengthen their ability to traffic drugs,” said DEA Administrator Leonhart. “DEA will continue our aggressive and sustained efforts against the Gulf Cartel and other criminal groups by attacking not only their high level leadership and financial networks, but the drug trafficking facilitators who harm neighborhoods and communities in Mexico and the United States.”
Lerma Plata was employed as the commander of the state police in Miguel Aleman, Tamaulipas, Mexico. According to court documents, Lerma Plata was on the Gulf Cartel’s payroll while he was employed by the state police, and he used his position of authority to engage in drug trafficking activities with the cartel. Intercepted conversations revealed that Lerma Plata and high ranking members of the Gulf Cartel discussed the shipment of large quantities of marijuana for distribution in the United States as well as the transportation from the United States of proceeds from the sales of the drugs and firearms.
The case is being prosecuted by Trial Attorneys Adrián Rosales and Darrin McCullough of the Criminal Division’s Narcotic and Dangerous Drug Section. The investigation in this case was led by the DEA’s Houston Field Division and the DEA Bilateral Investigation Unit.
California Man Arrested in Federal Sex Trafficking CaseRead the Press Release
A Long Beach, Calif., man was arrested yesterday arraigned this afternoon on federal sex trafficking charges that allege he worked with a previously charged defendant to coerce women to work as prostitutes.
Marquis Monte Horn, also known as “Taylor,” 34, was named in an eight-count superseding indictment returned by a federal grand jury on Wednesday. The indictment includes charges of one count of conspiracy to engage in sex trafficking, and one count of sex trafficking by force, fraud or coercion.
The second man charged in the case – Roshaun Nakia Porter, 37, also of Long Beach – was arrested and indicted on sex trafficking charges in April 2012.
According to the superseding indictment, Horn used websites such as www.modelmayhem.com to recruit victims to work in a prostitution organization by claiming he and Porter were running an upscale escort service in which women could make $500 per day. Horn, Porter and others used various coercive tactics to induce the victims into engaging in prostitution. For example, they allegedly developed a romantic relationship with some victims, falsely promised victims they would only be working as an escort, falsely promised financial assistance for the victims and their families, falsely promised help to obtain lawful immigration status in the United States, and isolated some victims from their friends and family.
The indictment further alleges that Horn recruited one victim into the prostitution organization who was subsequently beaten, whipped and forced to engage in prostitution by Porter.
Investigators believe that there are additional, as-yet unidentified victims in this case. Anyone with information about this case is encouraged to contact the FBI’s Los Angeles Field Office at (310) 477-6565.
Horn was arraigned on the indictment this afternoon in U.S. District Court in Santa Ana, Calif.
If convicted of the charges in the indictment, Horn would face a statutory maximum penalty of life in federal prison.
Porter has previously pleaded not guilty in this case and was ordered to be held without bond. A trial for Porter is scheduled for May 7, 2013, before U.S. District Judge Josephine Staton Tucker.
This week’s superseding indictment in the result of an ongoing investigation being conducted by the FBI. The case is being prosecuted by the U.S. Attorney’s Office and the Department of Justice’s Human Trafficking Prosecution Unit.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty.
Aryan Brotherhood of Texas Gang Member Pleads Guilty to Federal Racketeering ChargesRead the Press Release
A member 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 Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney Kenneth Magidson of the Southern District of Texas.
Christopher James Morris, aka, “Rockstar,” 37, of Dallas, 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.
On Feb. 22, 2013, Morris’s co-conspirator Chad Ray Folmsbee, aka, “Polar Bear,” 30, of Houston, pleaded guilty to one count of conspiracy to participate in racketeering activity.
According to court documents, Morris, Folmsbee 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. Morris, Folmsbee 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, Morris and Folmsbee have admitted to being members 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, Morris and Folmsbee each face a maximum penalty of life in prison. Morris and Folmsbee are both scheduled for sentencing on Sept. 26, 2013.
Morris and Folmsbee are two of 35 defendants charged with conducting racketeering activity through the ABT criminal enterprise, among other charges. Ben Christian Dillon, 40, of Houston and James Marshall Meldrum, 40, of Dallas each pleaded guilty to racketeering conspiracy on Jan. 31, 2013.
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; Tarrant County, Texas, Sheriff’s Office; Atascosa County, Texas, Sheriff’s Office; Orange County, Texas, Sheriff’s Office; Waller County, Texas, Sheriff’s Office; Fort Worth, Texas, Police Department; Alvin, Texas, Police Department; Carrollton, Texas, Police Department; Montgomery County District Attorney’s Office; Atascosa County District Attorney’s Office; and the Kaufman County, Texas, 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.
Statement by Attorney General Eric Holder on the U.S. Government’s Filing in Hollingsworth v. PerryRead the Press Release
Attorney General Eric Holder issued the following statement today on the U.S. government’s filing in Hollingsworth v. Perry:
“In our filing today in Hollingsworth v. Perry, the government seeks to vindicate the defining constitutional ideal of equal treatment under the law. Throughout history, we have seen the unjust consequences of decisions and policies rooted in discrimination. The issues before the Supreme Court in this case and the Defense of Marriage Act case are not just important to the tens of thousands of Americans who are being denied equal benefits and rights under our laws, but to our Nation as a whole.”
Statement by Attorney General Eric Holder on the House Passage of the Reauthorization of the Violence Against Women ActRead the Press Release
Attorney General Eric Holder issued the following statement today on the House passage of the reauthorization of the Violence Against Women Act:
“I am pleased that Congress has voted to reauthorize the Violence Against Women Act (VAWA), a landmark law that has transformed the way we respond to domestic and sexual violence. This reauthorization includes crucial new provisions to improve our ability to bring hope and healing to the victims of these crimes, expand access to justice, and strengthen the prosecutorial and enforcement tools available to hold perpetrators accountable.
“Congress has also taken an historic step to finally close the loophole that left many Native American women without adequate protection. With this bill, tribes and the federal government can better work together to address domestic violence against Native American women, who experience the highest rates of assault in the United States. The bill also provides funding to improve the criminal justice response to sexual assault, ensuring that victims can access the services they need to heal. And it will help to build on evidence-based practices for reducing domestic violence homicides and prevent violence against our nation’s children, teens, and young adults.
“I applaud Congress for passing a bipartisan reauthorization that protects everyone – women and men, gay and straight, children and adults of all races, ethnicities, countries of origin, and tribal affiliations. The Department of Justice looks forward to implementing this historic legislation after it is signed into law.”
Michigan Man Found Guilty in Florida of Child Sex Tourism ChargesRead the Press Release
A former Michigan resident was found guilty by a federal jury today in Miami of child sex tourism charges, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney for the Southern District of Florida Wifredo A. Ferrer and Special Agent in Charge Alysa D. Erichs of the U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI) Miami office.
Matthew Andrew Carter, aka “William Charles Harcourt” and “Bill Carter,” 67, formerly of Brighton, Mich., was found guilty in U.S. District Court for the Southern District of Florida of five counts of traveling in foreign commerce from the United States to Haiti for the purpose of engaging in illicit sexual conduct with children and one count of attempting to do so. Carter was charged in a second superseding indictment returned on Jan. 12, 2012.
According to court documents and evidence presented at trial, from 1995 to 2011, Carter resided at and operated the Morning Star Center near Port-au-Prince, Haiti, prior to his arrest on May 8, 2011. The Morning Star Center was a residential facility that provided shelter, food, clothing and school tuition to Haitian children. The children who lived at the Morning Star Center were from impoverished families that could not feed them, send them to school or otherwise support their children. The evidence at trial showed that Carter specifically targeted children in need and preyed on their vulnerability. Between 1995 and 2011, Carter frequently traveled between the United States and Haiti in order to raise funds from churches and donors for the continued operation of the center. Carter sexually and physically abused the children in his care and custody at the center during this period of time. According to court documents and evidence presented at trial, Carter used force to get these children to comply with his sexual demands and required the children to participate in sexual acts in order to receive food, remain at the center and/or continue to receive school tuition payments.At trial, 16 Haitian victims who resided at the Morning Star Center between 1995 and 2011 testified. Additionally, four witnesses testified that they were sexually abused by Carter in London during the 1970s. Carter previously was charged with and acquitted of charges related to the sexual abuse of children in London, Cairo, Egypt and Winter Haven, Fla.
At sentencing, Carter faces a maximum sentence of 15 years in prison on one count and a maximum sentence of 30 years in prison for each of the other five counts. Carter is scheduled for sentencing on May 20, 2013, in Miami before U.S. District Judge Joan A. Lenard.
The case is being prosecuted by Assistant U.S. Attorney Maria K. Medetis of the Southern District of Florida and Child Exploitation and Obscenity Section Trial Attorney Bonnie L. Kane of the Criminal Division. The case against Carter was investigated by ICE-HSI in Miami, the ICE-HSI Assistant Attaché’s Office in Santo Domingo, Dominican Republic and the ICE-HSI Santo Domingo Transnational Criminal Investigative Unit. Substantial assistance was provided by the U.S. Secret Service Miami field office; the Haitian National Police Brigade for the Protection of Minors; Haitian Social Services; the Ministry of the Interior for Haiti; the Bureau of Diplomatic Security, Regional Security Office for the U.S. Embassy in Port-au-Prince, Haiti; the Consular Section of the U.S. Embassy in Port-au-Prince, Haiti; the London Metropolitan Police Service; the FBI’s Washington, Boston and Miami field offices; and the ICE-HSI Attaché’s Offices in London and Cairo.Justice Department Settles Immigration-Related Discrimination Claim Against Illinois Staffing AgencyRead the Press Release
The Justice Department today reached an agreement with The Agency Staffing located in West Dundee, Ill., resolving claims that the staffing company violated the anti-discrimination provisions of the Immigration and Nationality Act (INA).
The Justice Department’s investigation was initiated based on a referral from the U.S. Citizenship and Immigration Services (USCIS) under a memorandum of agreement between the Civil Rights Division and USCIS. The department’s investigation concluded that The Agency Staffing applied enhanced employment eligibility procedures to work-authorized non-U.S. citizens that were run through E-Verify. The company did not utilize these additional procedures when it ran U.S. Citizens through E-Verify. E-Verify is an Internet-based system run by USCIS that confirms employment eligibility by comparing information from an employee’s Form I-9.
Under the settlement agreement, The Agency Staffing will pay $8,400 in civil penalties to the United States, undergo Justice Department training on the anti-discrimination provision of the INA, and be subject to monitoring of its employment eligibility verification practices for a period of three years. The case settled prior to the Justice Department filing a complaint in this matter.
“Employers cannot create higher hurdles for non-U.S. citizens in the employment eligibility verification process, which includes E-Verify, than those required of U.S. citizens or those required by law,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “We commend The Agency Staffing for restructuring its hiring processes to ensure that it will no longer be treating new hires differently based on their citizenship status.”
The Office of Special Counsel for Immigration-Related Unfair Employment Practices (OSC) is responsible for enforcing the anti-discrimination provision of the INA. For more information about protections against employment discrimination under the immigration laws, call the OSC’s worker hotline at 1-800-255-7688 (1-800-237-2525, TDD for hearing impaired), call the OSC’s employer hotline at 1-800-255-8155 (1-800-362-2735, TDD for hearing impaired), sign up for a no-cost webinar at www.justice.gov/about/osc/webinars.php , email [email protected] or visit the website at www.justice.gov/crt/about/osc .
Justice Department Announces More Than $12.6 Million in Grants to 20 Communities to Reduce Dating ViolenceRead the Press Release
The Department of Justice’s Office on Violence Against Women (OVW ) today announced $12.6 million dollars in grants awarded to 20 communities as part of a new, consolidated program designed to more effectively reduce dating violence . For the first time, grantees can implement a comprehensive approach to dating violence that includes services for victims, prevention programs, partnering with schools and engaging men and boys in ending violence against women . OVW combined four separate grant programs into one, enabling more efficient, effective work and responding to the call for bold new initiatives from The Attorney General’s Task Force on Children Exposed to Violence.
Grantees of the Consolidated Grant Program to Address Children and Youth Experiencing Domestic and Sexual Violence and Engaging Men and Boys as Allies will provide services to children and youth exposed to violence, training for professionals to improve interventions and responses, coordinated school-based strategies, supportive services for non-abusing parents and coordinated community responses. The Program also supports innovative prevention strategies that encourage men and boys to work as allies with women and girls to prevent domestic violence, dating violence, sexual assault and stalking.
Acting Associate Attorney General Tony West announced the grants to a room full of high school and college students at a White House event commemorating Teen Dating Violence Awareness and Prevention Month.
“Teen dating violence is about our community, our schools and our relationships. And that means it’s about us. Each one of us, as well as, importantly, those of us who are men,” Acting Associate Attorney General West said. “As fathers, brothers, coaches, teachers and classmates – men’s voices must be part of this conversation – as men, both young and old, this is our individual and collective responsibility.”
Research shows that our nation’s teens and young adults experience particularly high rates of violence. One-in-ten 9th-12th grade students were physically hurt, on purpose, by a boyfriend or girlfriend in 2011. According to the latest CDC data, 80% of rape victims were raped for the first time before their 25th birthday. Many young people do not know where to turn for help. A 2008 study found that 67 percent of students who were abused in a relationship talked to a friend, but only 13 percent also talked to a parent or other adult.
“Every year, millions of children and adolescents across the United States are victimized and exposed to violence in their homes and neighborhoods, and often suffer severe, long-term emotional and physical consequences,” said Acting Director of OVW Bea Hanson. “As we work to help keep our children safe, we must view prevention and intervention as intertwined, not separate and distinct. This grant program is an essential part of our vision for safe and healthy communities, places where young people can grow to their fullest potential.”
Grantees will receive awards ranging from $350,000 to $1,000,000 based on the scope of their projects. The selected applicants are: Aleut Community of St. Paul Island, Alaska; The Alaska Network on Domestic Violence and Sexual Assault, Alaska; Center for Hope and Healing, Mass.; Deaf Abused Women’s Network, Washington, D.C.; The Family Partnership, Minn.; Family Violence and Rape Crisis Services, N.C.; Jenesse Center Inc., Calif.; Jewish Women International, Inc., Washington, D.C.; HOPE Works, Vt.; Mecklenburg County, N.C.; Meriden-Wallingford Chrysalis Inc., Conn.; Kalispel Tribe of Indians, Wash.; King County Sexual Assault Resource Center, Wash.; Nashville Young Women’s Christian Association, Tenn.; Peace Over Violence, Calif.; Project Pave, Colo.; SafeHaven of Tarrant County, Texas; Wiconi Wawokiya Inc., S.D.; Youth Organizations Umbrella Inc., Ill.; and YWCA Knoxville, Tenn.
For more information on OVW and its programs, please visit: www.ovw.usdoj.gov .
Former Maryland Correctional Officer Pleads Guiltyto Conspiring to Assault an InmateRead the Press Release
Philip Mayo, a former correctional officer at the Roxbury Correctional Institution (RCI) in Hagerstown, Md., pleaded guilty to conspiring with other RCI officers to assault an inmate at the state prison during the 11 p.m. to 7 a.m. (midnight) shift on March 8-9, 2008.
Mayo, 41, of Randolph, N.Y., pleaded guilty to conspiring with other RCI officers to beat K.D. during the midnight shift on March 9, 2008.
According to court documents filed in connection with his guilty plea, Mayo and other officers met at RCI during the midnight shift and agreed to assault K.D. in retaliation for a prior incident involving K.D. and another officer. Mayo and three other correctional officers then entered K.D.’s cell in order to assault inmate K.D., while a fourth officer watched. Officers then assaulted K.D.
“Mr. Mayo has admitted that he and other officers conspired to use unlawful force to punish an inmate,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The Justice Department will continue to vigorously prosecute those officers who violate the rights of inmates.”
Mayo faces a maximum penalty of five years in prison and a fine of $250,000. Sentencing is set for Oct. 28, 2013, before U.S. District Judge James K. Bredar.
In connection with an assault on inmate KD that occurred during the 7 a.m. to 3 p.m. shift on March 9, 2008, former RCI Correctional Officers Ryan Lohr and Dustin Norris each recently entered guilty pleas before Judge Bredar.
The investigation by the Frederick, Md., Resident Agency of the FBI is ongoing. The case is being prosecuted by Special Litigation Counsel Forrest Christian and Trial Attorney Sanjay Patel of the Civil Rights Division of the Department of Justice, with the assistance of the U.S. Attorney’s Office for the District of Maryland.
Departments of Justice and Labor Announce Availability of $32 Million in Grants to Help Formerly Incarcerated Juveniles and Women Prepare to Enter the WorkforceRead the Press Release
The Departments of Justice and Labor today announced the availability of approximately $32 million through two grant competitions that will offer job training, education and support services to formerly incarcerated youths and women.
“Expanding access to job training programs and educational opportunities is a proven strategy for reducing recidivism and preventing crime,” said Attorney General Eric Holder. “By supporting efforts to help formerly incarcerated women and young adults rebuild their lives – and become productive, law-abiding members of their communities – the Departments of Justice and Labor are making good on our shared commitment to improving outcomes and ensuring public safety.”
“We are a country that believes in second chances,” said Department of Labor Acting Secretary Seth D. Harris. “Job training offers opportunities to learn skills and reshape lives. The grants announced today will provide critical support for women and young people who are eager for employment and a productive role in their communities.”
The Department of Labor will award a total of $20 million to four organizations to operate programs that work with juvenile offenders and youths at-risk of becoming juvenile offenders in high-poverty, high-crime communities. Each organization may submit only one application for a grant of up to $5 million.
Additionally, the Department of Labor will award a total of $12 million to eight organizations to provide job training for formerly incarcerated individuals of all ages that leads to industry-recognized credentials. Mentoring and assistance connecting to supportive services such as housing, substance abuse and mental health treatment, and assistance with parenting and child reunification, also will be available to participants. These grants are designed to expand opportunities for both youths and adults who demonstrate characteristics most common to female former offenders. However, services must also be open to eligible formerly incarcerated males. Each organization may submit only one application for a grant of up to $1.5 million.
Reintegrating formerly incarcerated individuals is a government-wide effort supported by the Federal Interagency Reentry Council. Established by the U.S. Department of Justice and chaired by Attorney General Eric Holder, the council brings together numerous federal agencies to advance policies and programs to make communities safer, assist individuals returning to communities from prison or jail in becoming productive taxpaying citizens, and save taxpayer dollars by lowering the direct and collateral costs of incarceration.
Any nonprofit organization with 501 (3)(c) status that meets the requirements of the solicitation may apply. The solicitations for grant applications, which include information about how to apply, are available at www.grants.gov .
CountryMark Refining and Logistics LLC to Install $18 Million in Pollution Controls to Resolve Clean Air Act Violations at Indiana RefineryRead the Press Release
The U.S. Environmental Protection Agency (EPA) and the U.S. Department of Justice announced that CountryMark Refining and Logistics LLC (CountryMark) has agreed to pay a $167,000 civil penalty, perform environmental projects totaling more than $180,000, and spend $18 million on new pollution controls to resolve Clean Air Act (CAA) violations at its refinery, located in Mount Vernon, Ind.
Once fully implemented, the pollution controls required by the settlement will reduce emissions of harmful air pollution that can cause respiratory problems, such as asthma, and are significant contributors to acid rain, smog, and haze, by an estimated 1,000 tons or more per year.
“This settlement requires CountryMark to install new controls and implement new practices at its refinery to reduce air pollution from all significant sources at the refinery,” said Ignacia S. Moreno, Assistant Attorney General for the Justice Department's Environment and Natural Resources Division. “Notably, CountryMark will be the third refiner to put in place new measures to substantially reduce gas emissions from its flare, and the company’s commitment to retrofit diesel school buses will also reduce air emissions that affect the area’s residents.”
“Under the settlement, CountryMark will implement new practices and install innovative, cutting-edge pollution controls at its Indiana refinery,” said Cynthia Giles, assistant administrator for EPA’s Office of Enforcement and Compliance Assurance. “These innovative controls include ensuring that pollution control devices, such as flares, are operated properly to minimize pollution emitted into the air and to improve their overall efficiency.”
“Because oil production and refining is an important source of jobs in southwest Indiana, my office worked with our state and federal partners to ensure this settlement agreement is carefully structured to address the violations of law and assist the local community with needed improvements to environmental safety and air quality,” said Indiana Attorney General Greg Zoeller, whose office represented the Indiana Department of Environmental Management (IDEM) in settlement negotiations.
The complaint alleges that the company made modifications to its refinery that increased emissions without first obtaining pre-construction permits and installing required pollution control equipment. The CAA requires major sources of air pollution to obtain such permits before making changes that would result in a significant net emissions increase of any pollutant. The complaint also alleges CAA violations related to flare operation, the New Source Performance Standards, and applicable requirements for leak detection and repair (LDAR).
The settlement requires new and upgraded pollution controls, more stringent emission limits, and aggressive LDAR practices to reduce emissions from refinery equipment and processing units. The settlement also requires new controls on the refinery’s flaring devices, which are used to burn-off waste gases. The amount of pollution that flares emit depends on the total amount of waste gases sent to a flare and the efficiency at which the flare is operated when burning those gases. The settlement will ensure proper combustion efficiency for any gases that are sent to a flare and will also cap the total amount of waste gases that can be sent to a flare at the refinery. The flares requirements are part of EPA’s national effort to reduce emissions from flares at refineries, petrochemical, and chemical plants.
The flaring efficiency requirements are settlement with CountryMark are part of EPA’s national enforcement initiative to improve compliance among petroleum refiners and to reduce significant amounts of air pollution from refineries nationwide through comprehensive, company-wide enforcement settlements. The settlement with CountryMark is the 32nd under the EPA initiative. With today’s settlement, 109 refineries operating in 32 states and territories – more than 90 percent of the total refining capacity in the United States – are under judicially enforceable agreements to significantly reduce emissions of pollutants. As a result of the settlement agreements, refiners have agreed to invest more than $6 billion in new pollution controls designed to reduce emissions of sulfur dioxide, nitrogen oxides, and other pollutants by over 360,000 tons per year.
The state of Indiana actively participated in the settlement with CountryMark and has received over $110,000 to fund a supplemental environmental project to remove asbestos-containing material from an old grain elevator in downtown Mount Vernon. The settlement also requires CountryMark to provide at least $70,000 in funding for a supplemental environmental project that will install diesel retrofit and/or idle reduction technologies on school buses and/or non-school bus, publicly-owned vehicles located within 50 miles of the refinery.The consent decree, lodged in the Southern District of Indiana, is subject to a 30-day public comment period and court approval. The consent decree is available for review at www.justice.gov/enrd/Consent_Decrees.html
More information about the settlement: www.epa.gov/enforcement/air/cases/countrymarkrefiningandlogisticsllc.html
More information about EPA’s Air Toxics National Enforcement Initiative: www.epa.gov/compliance/data/planning/initiatives/2011airtoxics.html
Enforcement Alert: EPA Enforcement Targets Flaring Efficiency Violations (August 2012): www.epa.gov/enforcement/air/documents/newsletters/flaringviolations.pdf
More information about EPA’s Petroleum Refinery Initiative: www.epa.gov/compliance/resources/cases/civil/caa/oil/index.htmlStock Manipulators Sentenced in Texas to Prison<br /> for $1 Million Securities Fraud SchemeRead the Press Release
An employee of a Texas securities firm and a broker-dealer who conspired with him and others to artificially pump up the stock prices of several publicly traded companies were sentenced to prison terms today for their roles in the $1 million scheme, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and Assistant Director in Charge of the FBI’s Washington Field Office Valerie Parlave.
Blake Williams, 30, of Dallas, and Derek Lopez, 46, of Torrance, Calif., were sentenced to 32 and 24 months in prison, respectively. U.S. District Judge Ed Kinkeade imposed the sentences today in Dallas federal court. In addition to the prison terms, Williams was ordered to forfeit $125,000; Lopez was ordered to forfeit $72,442; and the pair was sentenced to serve two years of supervised release. Each defendant previously pleaded guilty to one count of conspiracy and one count of securities fraud.
Williams was an employee of TBeck Capital Inc., a purported investment banking and securities trading firm in Grapevine, Texas. Lopez was a securities broker-dealer who provided services to TBeck Capital. According to court documents, from June 2006 through December 2008, Williams, Lopez and their co-conspirators engaged in a scheme to manipulate the price and volume of stocks traded in the over-the-counter market.
According to court documents, companies owned and controlled by a co-conspirator obtained control of large positions of free-trading stock in various publicly traded companies. Williams, Lopez and others then coordinated trades with each other and with other alleged co-conspirators to create the false appearance of greater investor interest in the stock. Williams and Lopez admitted to trading stock in their own names as well as through TBeck Capital and other companies to keep the stock price artificially inflated. These actions allowed the defendants and their alleged co-conspirators to then sell that stock at an artificially high price.
Specifically, Lopez admitted to trading in his own name, as well as in the name “Da Big Kahuna” to disguise his trades. Williams admitted to trading in the names of several companies to make it appear there were multiple unrelated entities buying and selling the stock. According to court documents, Williams received cash payments and Lopez received free-trading stock and cash payments in return for their assistance in manipulating the stock prices of companies in which TBeck Capital owned and controlled large positions of free-trading stock.
The gain to all the co-conspirators from the fraudulent scheme exceeded $1 million, according to court documents.
The case is being prosecuted by Senior Trial Attorney Nicholas Acker and Trial Attorney Luke B. Marsh of the Criminal Division’s Fraud Section and is being investigated by the FBI’s Washington Field Office. The U.S. Attorney’s Office for the Northern District of Texas provided valuable assistance.
This case was prosecuted 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.
Owners of Miami Home Health Companies Sentenced to Prison<br /> in $48 Million Health Care Fraud SchemeRead the Press Release
The owners and operators of two Miami health care agencies were sentenced to nine years and more than four years in prison today, respectively, and ordered to pay millions in restitution for their participation in a $48 million home health Medicare fraud scheme that billed for unnecessary home health care and therapy services.
The sentences, imposed in federal court in the Southern District of Florida, were announced by Assistant Attorney General Lanny A. Breuer 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.
U.S. District Judge Frederico A. Moreno sentenced Rogelio Rodriguez, 43, and Raymond Aday, 48, both of the Miami-Dade area, to 108 months and 51 months in prison, respectively. In addition to the prison term, Judge Moreno sentenced Rodriguez to pay $33 million in restitution, and Aday to pay $2.1 million in restitution. Both defendants were also sentenced to serve three years of supervised release and pay a $100,000 fine. In December 2012, each pleaded guilty to one count of conspiracy to commit health care fraud.
According to court documents, Rodriguez was the owner of both Caring Nurse Home Health Corp. and Good Quality Home Health Inc., and Aday was a manager at Caring Nurse and owner of Good Quality.
According to plea documents, Rodriguez and Aday conspired with patient recruiters for the purpose of billing the Medicare program for unnecessary home health care and therapy services. Rodriguez, Aday and their co-conspirators paid kickbacks and bribes to patient recruiters. In return, recruiters provided patients to Caring Nurse and Good Quality, as well as prescriptions, plans of care (POCs) and certifications for medically unnecessary therapy and home health services for Medicare beneficiaries. Rodriguez and Aday used these prescriptions, POCs and medical certifications to fraudulently bill the Medicare program for home health care services, which both Rodriguez and Aday knew was in violation of federal criminal laws.
According to court documents, nurses and office staff at Caring Nurse and Good Quality falsified patient files to make it appear the Medicare beneficiaries qualified for services they did not. Rodriguez admitted to knowing that these files were falsified so the Medicare program could be billed for medically unnecessary therapy and home health related services.
From approximately January 2006 through June 2011, Caring Nurse and Good Quality submitted approximately $48 million in claims for home health services that were not medically necessary and/or were not provided. According to court documents, Medicare paid approximately $33 million for these fraudulent claims.
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.
Nine Current or Former Roxbury Correctional Officers Chargedin Connection with Two Assaults on an InmateRead the Press Release
Two separate indictments charging a total of nine current or former officers at Roxbury Correctional Institution (RCI) were unsealed today, in relation to two assaults of an inmate, and subsequent obstruction of justice, announced Thomas E. Perez, Assistant Attorney General for the Civil Rights Division.
In the first indictment, four current or former RCI officers face federal charges in connection with an assault on K.D., an inmate, during the 11 p.m. to 7 a.m. (midnight) shift on March 8-9, 2008. Former RCI Correctional Officers James Kalbflesh and Jeremy McCusker face civil rights and conspiracy charges for their roles in the midnight shift assault on K.D.
In addition, Kalbflesh, McCusker, RCI Correctional Officer Walter Steele and RCI Lieutenant Jason Weicht face conspiracy charges for their efforts to cover up information related to the midnight shift assault on K.D. RCI Lieutenant Weicht also faces an obstruction of justice charge for encouraging officers to get together to get their stories straight, providing home telephone numbers for the involved officers so that they could arrange for a cover-up meeting, and giving an officer books on interrogation techniques so that he would be prepared to mislead investigators. Finally, RCI Officer Steele faces two more counts for providing false and misleading information to state and federal authorities.
McCusker faces a maximum sentence of 50 years in prison. Kalbflesh and Weicht face a maximum of 25 years in prison. Steele faces a maximum term of 30 years in prison.
In the second indictment, five current or former RCI officers are charged. RCI Lieutenant Edwin Stigile and former Correctional Officers Tyson Hinckle, Reginald Martin, and Michael Morgan were charged with conspiring to have officers assault K.D. during the 7 a.m. to 3 p.m. (daylight) shift on March 9, 2008. RCI Sergeant Josh Hummer and former Correctional Officers Hinckle, Martin, and Morgan also were charged with a civil rights violation for the daylight assault on K.D. The indictment alleges that RCI officers kicked and punched inmate K.D. inside his cell in order to punish K.D. for a prior incident involving another officer. K.D. had to be transported to a local hospital following this beating.
All of the defendants in the second indictment are charged with conspiring to obstruct the investigation into assault. In addition, the indictment alleges that Lieutenant Stigile obstructed justice when he used a magnetic device to destroy and alter surveillance tapes related to the assault on inmate K.D. Sergeant Hummer also faces two obstruction of justice counts for making false and misleading statements to state and administrative authorities.
Lieutenant Stigile faces a maximum sentence of 35 years in prison. Sergeant Hummer faces a maximum of 55 years in prison. Hinckle, Morgan, and Martin each face a maximum term of imprisonment of 25 years.
These cases, which are ongoing, are being investigated by the Frederick Resident Agency of the FBI, and are being prosecuted by Special Litigation Counsel Forrest Christian and Trial Attorney Sanjay Patel of the Justice Department’s Civil Rights Division, with the assistance of the U.S. Attorney’s Office for the District of Maryland.
An indictment is merely an accusation, and the defendants are presumed innocent unless proven guilty.
Justice Department Prevails in Tax Shelter Case Involving $1 Billion in Tax DeductionsRead the Press Release
A federal court in Baton Rouge, La., on Monday rejected two tax shelter transactions entered into by The Dow Chemical Company that purported to create approximately $1 billion in phony tax deductions. In addition to rejecting the tax benefits from the shelter transactions, Chief Judge Brian A. Jackson also imposed penalties.
As stated in the opinion, the schemes were created by Goldman Sachs and the law firm of King & Spalding, and involved creating a partnership that Dow operated out of its European headquarters in Switzerland. Chief Judge Jackson wrote in his 74-page opinion that the government was correct to reject the artificial tax benefits created by these schemes that were designed to exploit perceived weaknesses in the tax code and not designed for legitimate business reasons. Judge Jackson noted that “tax law deals in economic realities, not legal abstractions.” Judge Jackson also wrote that penalties were appropriate because any reasonable and prudent person should have known that the artificial tax benefits created by the scheme were “too good to be true.” Judge Jackson noted in his opinion that “Dow viewed its tax department as a profit center,” and had at its disposal “numerous lawyers and tax professionals.”
Assistant Attorney General Kathryn Keneally of the Justice Department’s Tax Division hailed the Louisiana court’s opinion. “It is offensive to all taxpayers who pay their fair share when our largest corporations believe that they can claim hundreds of millions of dollars in tax deductions that are manufactured by abusive tax schemes,” said Keneally. Keneally thanked the agents and attorneys at the Internal Revenue Service who assisted the Justice Department, as well as Tax Division trial attorneys, Thomas Sawyer, Robert Welsh, Thomas Koelbl and Philip Schreiber.
Related Materials:
United States v. Chemtech Royalty Associates, L.P., etc.
Memorandum Ruling (PDF)Former Correctional Officer Pleads Guilty to Conspiring to Assault an InmateRead the Press Release
Dustin Norris, a former correctional officer at the Roxbury Correctional Institution (RCI) in Hagerstown, Md., pleaded guilty to conspiring with other RCI officers to assault an inmate at the state prison on March 9, 2008.
Norris, 28, pleaded guilty to conspiring with other RCI officers to beat K.D. on March 9, 2008.
According to court documents filed in connection with his guilty plea, Norris and other officers met at RCI and agreed to assault K.D. in retaliation for a prior incident involving K.D. and another officer. Norris and four other correctional officers then entered K.D.’s cell and assaulted inmate K.D., while a fifth officer, Ryan Lohr, watched from the cell door. The officers beat inmate K.D. even though the inmate already had visible facial injuries. Following this assault, K.D. was transported to a local hospital.
Norris further admitted that he lied to state investigators when he was asked about the injuries K.D. suffered while held in a single-occupant segregation cell.
“Mr. Norris has admitted that he and other officers used unjustified and unlawful force to punish an inmate,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The Justice Department will continue to vigorously prosecute those officers who violate the constitutional rights of inmates.”
Norris faces a maximum penalty of 5 years in prison and a fine of $250,000. Sentencing is set for Oct. 28, 2013, before U.S. District Judge James K. Bredar.
In a related case, former RCI Correctional Officer Ryan Lohr entered a guilty plea on Jan. 30, 2013, also before Judge Bredar.
The investigation by the Frederick Resident Agency of the FBI is ongoing. The case is being prosecuted by Special Litigation Counsel Forrest Christian and Trial Attorney Sanjay Patel of the Civil Rights Division of the Department of Justice, with the assistance of the U.S. Attorney’s Office for the District of Maryland.
Detroit Preparer Charged with Preparing False Tax ReturnsRead the Press Release
Matthew Bender, a paid preparer of tax returns residing in Detroit, was charged in a superseding indictment with preparing false tax returns and tax obstruction, the Justice Department, Internal Revenue Service (IRS), and the Treasury Inspector General for Tax Administration (TIGTA) announced today.
Bender had been arrested on a portion of those charges on January 10, 2013. The superseding indictment charges Bender with 16 counts of assisting in the presentation of false tax returns to the IRS along with one count of corruptly endeavoring to obstruct the due administration of the Internal Revenue laws.
According to the superseding indictment, between 2004 and 2012, Bender prepared returns for taxpayers that falsely claimed refunds and contained false deductions and tax withholdings. The superseding indictment also alleges that Bender filed false tax returns for himself for 2007 and 2009 and failed to file his own tax returns for 2003, 2004, 2005, 2006, 2008, 2010, and 2011.
An indictment merely alleges that crimes have been committed, and a defendant is presumed innocent until proven guilty beyond a reasonable doubt. If convicted, the defendant faces a potential maximum sentence of three years in prison and a $250,000 fine on each count.
This case was investigated by special agents of IRS-Criminal Investigation and TIGTA and is being prosecuted by Trial Attorneys Jeffrey McLellan and Kenneth Vert of the Justice Department’s Tax Division.
California Woman Convicted for Impersonating<br /> Congressional Aide to Deceive Tax ClientRead the Press Release
The operator of a California-based tax consulting business has been convicted by a federal jury in Fresno, Calif. for impersonating an aide to a U.S. Congressman in order to deceive a client, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division.
Susan Tomsha-Miguel, 52, of Atwater, Calif., was convicted late yesterday, Feb. 26, 2013, of the sole count in the indictment against her: impersonating an officer or employee of the United States. The jury deliberated for only 15 minutes before returning a guilty verdict.
As the evidence at trial showed, Tomsha-Miguel operated a tax consulting and bookkeeping business in Atwater. A client, who owned a commercial business in Merced, Calif., hired Tomsha-Miguel to resolve a tax dispute with the Internal Revenue Service (IRS).
Tomsha-Miguel requested help with the tax problems from the office of U.S. Representative Dennis A. Cardoza, who represents the 18th Congressional District – which includes Merced County, as well as parts of San Joaquin, Stanislaus, Madera and Fresno Counties. As the evidence revealed, Representative Cardoza’s office agreed to help, and transmitted written material – including a form printed under his official Congressional letterhead – to Tomsha-Miguel.
According to the evidence presented in court, Tomsha-Miguel then sent her client a counterfeit letter written under Representative Cardoza’s official letterhead and purportedly written and signed by a congressional aide. The letter falsely claimed that due to Tomsha-Miguel’s efforts on behalf of her client, the aide had contacted an IRS official. The counterfeit letter claimed that the IRS official had agreed to make resolving the client’s tax dispute his “number one priority” after he returned from “Washington, D.C. for an emergency strategy meeting with the U.S. Treasury Secretary and others for a planning session in the event a budget does not get passed by both the House and Senate.”
In reality, the aide did not exist, and Tomsha-Miguel had forged the letterhead by copying the official letterhead onto a blank sheet of paper. The evidence also showed that Tomsha-Miguel had written the letter from the non-existent aide herself and then sent it to her client in order to mislead him into believing she had succeeded in alleviating his tax problems.
Tomsha-Miguel faces a maximum potential penalty of three years in prison and a $250,000 fine at sentencing, currently scheduled for June 24, 2013 before U.S. District Judge Lawrence J. O’Neill, who presided over the trial.
The case was prosecuted by Trial Attorney Barak Cohen of the Public Integrity Section in the Justice Department’s Criminal Division and investigated by the Sacramento, Calif. Division of the FBI.Two Virginia Businessmen Plead Guilty to<br /> Illegally Reimbursing Campaign ContributionsRead the Press Release
William P. Danielczyk Jr. and Eugene R. Biagi pleaded guilty today to reimbursing $186,600 in contributions to the Senate and Presidential campaign committees of a candidate for federal office, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division, U.S. Attorney Neil H. MacBride of the Eastern District of Virginia and Valerie Parlave, Assistant Director in Charge of the FBI’s Washington Field Office.
Danielczyk, 51, and Biagi, 78, both of Oakton, Va., pleaded guilty to making illegal conduit campaign contributions. The charge carries a maximum penalty of five years in prison. Danielczyk also faces a fine of not less than 300 percent of the amount involved and not more than the greater of $50,000 or 1,000 percent of the amount involved, and Biagi faces a potential fine of not more than $250,000 when they are sentenced on May 17, 2013.
“With today’s guilty pleas, Danielczyk and Biagi admit they used straw donors to circumvent the rules of the electoral process,” said AAG Breuer. “Our democracy depends on voters honoring campaign contribution limits and other campaign finance laws, and the Justice Department will continue to pursue corrupt individuals whose illegal tricks threaten the legitimacy of elections and undermine public confidence in the democratic process.”
“Today Mr. Danielczyk admitted that he tried to corrupt the electoral process by evading corporate contribution limits,” said U.S. Attorney MacBride. “Mr. Danielczyk abused his power as an employer and abused his power as a participant in a U.S. election. Direct contribution limits for corporations provide an important check in the integrity of our electoral process, and today’s convictions help ensure that those who illegally go beyond those limits are held accountable.”
“With today’s guilty pleas, Mr. Danielczyk and Mr. Biagi admitted their roles in a scheme in which they evaded FEC law to donate money to a Senate and Presidential candidate. By doing so, they funneled more than $186,600 through their company by creating fraudulent invoices for straw donors and falsely back-dating letters to those individual contributors,” said Assistant Director in Charge Parlave. “The FBI will continue to work with the U.S. Attorney’s office to investigate allegations of campaign finance abuse, which are in place to ensure openness and fairness in our elections so the people’s interests are protected.”
According to court records, Danielczyk was the Chairman of Galen Capital Corporation, and Biagi served as the corporation’s secretary and treasurer. In September 2006, Danielczyk co-hosted a fundraiser for a candidate’s campaign for the U.S. Senate and in March 2007 he co-hosted a fundraiser for the same candidate’s 2008 campaign for the President of the United States.
Danielczyk admitted that he recruited individuals, including Biagi and other corporate employees, to serve as “straw donors” to the campaigns, assuring the donors that they would be reimbursed for their contributions. Danielczyk’s assistant collected the contributions, and Danielczyk and Biagi then reimbursed the straw donors for their contributions using Galen Capital Corporation’s corporate funds.
Biagi admitted that he disguised the nature of the reimbursement payments by writing “consulting fees” on the checks’ memorandum lines and by issuing the checks for amounts slightly larger than the campaign contributions. Danielczyk and Biagi also created falsely back-dated letters to the individual contributors, which characterized the reimbursement payments as “consulting fees” or that a contributor would receive money for certain work.
Danielczyk and Biagi admitted they used corporate funds to reimburse a total of $186,600 to the two campaigns. The campaigns unwittingly reported the straw donations as lawful contributions from the individual donors.
This case was investigated by the FBI’s Washington Field Office. Trial Attorney Eric L. Gibson of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorneys Mark D. Lytle and Timothy D. Belevetz from the U.S. Attorney’s Office for the Eastern District of Virginia are prosecuting the case on behalf of the United States.
North Carolina Poultry Processing Plant Sentenced for Violating Clean Water ActRead the Press Release
A federal judge sentenced House of Raeford Farms Inc., a poultry slaughtering and processing facility located in Raeford, N.C., to a fine of $150,000, a two year period of probation and to pay a special assessment of $4,000 on Feb. 26, 2013, for 10 counts of knowingly violating the Clean Water Act.
House of Raeford Inc. allowed plant employees to bypass the facility’s pretreatment system and send its untreated wastewater directly to the City of Raeford’s Wastewater Treatment Plant, without notifying city officials. House of Raeford Inc. failed to prevent employees from sending thousands of gallons of wastewater into a pretreatment system that did not have the capacity to adequately treat the amount of wastewater before it discharged to the city plant. The untreated wastewater discharged directly to the city plant was contaminated with waste from processing operations, including blood, grease, and body parts from the slaughtered turkeys. A House of Raeford, Inc. former employee admitted that the facility would continue to “kill turkeys” despite being warned that the unauthorized bypasses had an adverse impact on the city’s Wastewater Treatment Plant. The city plant was responsible for treating industrial, commercial and residential wastewater before it was discharged to Rockfish Creek in Hoke County.
The bypasses and failure to report them were in violation of House of Raeford’s pretreatment permit as well as the city’s sewer use ordinance. Many of the bypasses took place while House of Raeford was subject to a consent order with the city that required it to construct a new pretreatment system and comply with all requirements of its pretreatment permit. A number of the bypasses were recorded in log books kept by House of Raeford Inc. wastewater operators, and were never revealed to the City.
The case was prosecuted by the Justice Department’s Environmental Crimes Section and was investigated by U.S. Environmental Protection Agency-Criminal Investigation Division and North Carolina State Bureau of Investigation.
Justice Department Reaches Settlement with School District of Palm Beach County, Fla., to Prevent and Address Discrimination in School Enrollment and Student DisciplineRead the Press Release
The Justice Department announced that it has reached a comprehensive settlement agreement with the School District of Palm Beach County, Fla., the nation’s eleventh-largest school district, to prevent and address discrimination in school enrollment and student discipline. The agreement resolves the department’s investigation into complaints that the district failed to enroll children based on their or their parents’ national origin or immigration status, and that its system of discipline discriminated against students based on national origin and limited English proficiency. The district serves more than 179,000 students, including 20,000 English language learners (ELLs).
“All children deserve an equal opportunity to learn, no matter where they are from or what language they speak,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “We commend the School District of Palm Beach County for working collaboratively with the department to remove barriers to student enrollment, and for taking strong action to promote a safe, inclusive school environment for all students.”
Under the agreement, the district will enroll all area students regardless of background and will provide translation and interpretation services throughout the registration process. The district will also limit the use of disciplinary measures that remove students from the classroom and implement behavior management and discipline practices that support and protect students. The agreement:
- Requires that ELL students and parents who are limited English proficient receive translation and interpretation services throughout the discipline process ;
- Places limits on exclusionary discipline, such as suspension, and prohibits exclusionary discipline for minor misbehavior;
- Expands the use of positive behavior interventions and supports, and requires that these interventions and supports be accessible to ELL students, including through appropriate translation or interpretation services;
- Prohibits school officials from involving law enforcement officers to respond to behavior that can be safely and appropriately handled under school disciplinary procedures;
- Requires school law enforcement officers to communicate with students in a language the student understands, including by securing an interpreter when appropriate;
- Requires monitoring of discipline data to identify and respond to disparities; and
- Requires training for relevant personnel on all revised policies and procedures.
The enforcement of Title IV of the Civil Rights Act of 1964, which prohibits discrimination on the basis of race or national origin, among other bases, in public schools, and the Equal Educational Opportunities Act of 1974, which requires schools to take appropriate action to overcome language barriers that impede students’ equal participation in instructional programs, are top priorities of the Justice Department’s Civil Rights Division. The Civil Rights Division also works to protect the right of all children to enroll in public schools regardless of immigration status, as set forth in the Supreme Court’s Plyler v. Doe decision. Additional information about the Civil Rights Division of the Justice Department is available on its website at www.justice.gov/crt.
Related Materials:
Palm Beach County Settlement Agreement
High Ranking Gulf Cartel Member Convicted in Washington for Drug TraffickingRead the Press Release
Aurelio Cano Flores, a Mexican national and high ranking member of the Gulf Cartel, was found guilty today by a federal jury of conspiring to import multi-ton quantities of cocaine and marijuana into the United States, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and Administrator Michele M. Leonhart of the Drug Enforcement Administration (DEA).
Cano Flores, 40, aka “Yankee” and “Yeyo,” was convicted by a federal jury in U.S. District Court in the District of Columbia. Cano Flores was one of 19 defendants charged in a superseding indictment on Nov. 4, 2010, with conspiracy to manufacture and distribute five kilograms or more of cocaine and 1,000 kilograms or more of marijuana for importation into the United States. Cano Flores was extradited to the United States from Mexico in August 2011 and was ordered detained in federal custody pending trial.
“Aurelio Cano Flores was convicted today of leading one of the world’s most notorious criminal organizations in a conspiracy to traffic massive quantities of illegal drugs into the United States,” said Assistant Attorney General Breuer. “Cano Flores is the highest ranking Gulf Cartel member to be convicted by a U.S. jury in the past 15 years, and his conviction demonstrates the Justice Department’s commitment to hold ruthless cartel leaders responsible for importing narcotics into the United States – no matter where they conduct their illegal business. Along with our domestic and international law enforcement partners, we will continue to bring our resource to bear to ensure that cartel members and associates are brought to justice for the damage they inflict on both sides of the border.”
“Our strategy of targeting the highest levels of the Gulf Cartel continues to pay off,” said DEA Administrator Leonhart. “DEA and our law enforcement counterparts on both sides of the border remain committed to using every law enforcement tool available to attack these criminal organizations, while taking out their financial infrastructure to thwart their illicit business models and deprive them of their ill-gotten gains.”
Evidence presented at trial included dozens of lawfully intercepted telephone conversations between Cano Flores and other leaders of the Gulf Cartel, as well as testimony from previously convicted Cartel members. According to evidence presented at trial, Cano Flores began working for the Gulf Cartel in approximately 2001 while serving as a police officer in Mexico. While serving as a police officer, Cano Flores recruited others into the Gulf Cartel, collected drug money and escorted large shipments of cartel drugs to the U.S. border.
Cano Flores ultimately rose through the ranks of the Gulf Cartel to become a major transporter of narcotics within Mexico to the U.S. border and became the cartel’s top representative in the important border town of Los Guerra, Tamaulipas, Mexico. As the “plaza boss” for Los Guerra, Cano Flores oversaw the mass distribution of cocaine and marijuana into the United States on a daily basis. Testimony also established that between 2000 and 2010, the Gulf Cartel grew from an organization of only 100 members controlling three border towns to an organization of 25,000 people controlling the drug trade over approximately half of Mexico. As established during the trial, the means and methods of this conspiracy included corruption, murder, kidnapping and intimidation.
At sentencing, scheduled for May 13, 2013, before U.S. District Judge Barbara J. Rothstein, Cano Flores faces a mandatory minimum sentence of 10 years in prison and a maximum sentence of life in prison.
The case was prosecuted by Trial Attorneys Darrin McCullough and Sean Torriente of the Criminal Division’s Narcotic and Dangerous Drug Section. The Criminal Division’s Office of International Affairs provided significant assistance in the provisional arrest and extradition of Cano Flores. The investigation in this case was led by the DEA Houston Field Division’s Organized Crime Drug Enforcement Strike Force and the DEA Bilateral Investigation Unit.Former Owners of Los Angeles-Area Medical Equipment Wholesaler Plead Guilty to Conspiring with Customers<br /> to Defraud MedicareRead the Press Release
Two former owners of a Los Angeles-area medical equipment wholesale supply company pleaded guilty today to conspiring with their customers to defraud Medicare.
The pleas were announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney André Birotte Jr. of the Central District of California; Glenn R. Ferry, Special Agent in Charge for the Los Angeles Region of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG); Bill L. Lewis, Assistant Director in Charge of the FBI’s Los Angeles Field Office; and Joseph Fendrick, Special Agent in Charge of the California Department of Justice, Bureau of Medi-Cal Fraud and Elder Abuse (Cal-DOJ).
Rajinder Singh Paul, 69, and Baljit Kaur Paul, 65, of Redlands, Calif., each pleaded guilty before U.S. District Judge Percy Anderson in the Central District of California to one count of conspiracy to commit health care fraud.
In court documents, Rajinder and Baljit Paul admitted that they were the president and vice president, respectively, and shareholders of AHPK Inc., a medical equipment wholesale supply company located in Redlands and Ontario, Calif., and formally known as Major’s Wholesale Medical Supply Inc. The Pauls later sold Major’s Wholesale Medical Supply Inc. to Major’s Wholesale Medical Supply LLC (collectively, “Major’s”) and, according to court documents, remained employed at Major’s Wholesale Medical Supply LLC as consultants until they were terminated in February 2009.
During the time the Pauls either owned or worked as consultants for Major’s, Major’s sold durable medical equipment (DME) almost exclusively to customers who owned and operated DME supply companies, according to court documents. A majority of Major’s customers were Medicare providers and relied on Medicare to make money, which they did by billing Medicare for the DME that they purchased from Major’s.
One of the more popular items of DME that the Pauls sold at Major’s were power wheelchairs. Court documents indicate that to attract customers, the Pauls sold power wheelchairs to Major’s customers wholesale for between $850 to $1,000 each. Major’s customers, however, billed these power wheelchairs to Medicare at a rate of between $3,000 to $6,000 per wheelchair.
The Pauls admitted they knew that Major’s customers were dependent on Medicare for their revenue, and that Major’s customers could not pay Major’s unless Medicare paid the customers first. To foster customer loyalty, the Pauls engaged in a variety of conduct over a period of six years that helped Major’s customers defraud Medicare, including by providing Major’s customers with false inventory purchase agreements that showed they had higher credit limits than they really did. Major’s customers submitted these false inventory purchase agreements to Medicare to prove, as required by Medicare, the ability to purchase the volume of DME they billed.
The Pauls also admitted they provided Major’s customers with backdated invoices, knowing customers were billing Medicare for power wheelchairs and DME before the customers actually purchased or delivered the equipment. The Pauls admitted that by backdating these invoices, they provided Major’s customers with the paper trail the customers needed to prove to Medicare that they had both purchased the DME and purchased it before they submitted their claims to Medicare. According to court documents, the Pauls backdated or falsified invoices for more than 100 different customers.
Court documents indicate that two of many customers who conspired with the Pauls to defraud Medicare owned and operated a number of fraudulent DME supply companies in the Los Angeles area, including one customer who used “straw” or nominee owners to operate the customer’s companies. The Pauls admitted they provided these two customers with false inventory purchase agreements and backdated invoices that the customers used to defraud Medicare. The Pauls admitted that as a result of their conduct, these two customers were able to use their fraudulent DME supply companies to submit approximately $16,662,143 in false claims to, and receive approximately $9,743,609.42 in ill-gotten reimbursement payments from, Medicare.
At sentencing, scheduled for July 8, 2013, the Pauls each face a maximum penalty of 10 years in prison and a $250,000 fine.
This case is being prosecuted by Jonathan T. Baum of the Criminal Division’s Fraud Section. The case was investigated by the FBI, HHS-OIG, and Cal DOJ 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 Central District of California.
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, are taking steps to increase accountability and decrease the presence of fraudulent providers. To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.
Florida Couple Pleads Guilty for Roles<br /> in Procurement Contract Bribery SchemeRead the Press Release
A Florida couple who owned a military contracting company pleaded guilty today in federal court in Salt Lake City for their roles in a bribery and fraud scheme involving federal procurement contracts, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney David B. Barlow for the District of Utah.
Sylvester Zugrav, 70, of Sarasota, Fla., pleaded guilty to conspiracy to commit bribery and procurement fraud. His wife, Maria Zugrav, 67, also of Sarasota, pleaded guilty to misprision of a felony related to her efforts to conceal the conspiracy. The Zugravs were charged in an indictment, returned on Oct. 12, 2011, along with Jose Mendez, 51, of Farr West, Utah, a procurement program manager for the U.S. Air Force Foreign Materials Acquisition Support Office (FMASO) at Hill Air Force Base, in Ogden, Utah.
Mendez was charged in the indictment with conspiracy, bribery and procurement fraud, and has since pleaded guilty to all charges and agreed to forfeit more than $180,000 he received as part of the bribery scheme and awaits sentencing.
According to court documents, the Zugravs owned Atlas International Trading Company, a business that contracted to provide foreign military materials to the U.S. government through FMASO.
In his plea agreement, Sylvester Zugrav admitted that, from 2008 through August 2011, he gave Mendez more than $180,000 in bribe payments, and offered Mendez more than $1.05 million in additional bribe payments contingent upon Atlas’s receipt of future contracts with FMASO. In exchange for Sylvester Zugrav’s bribe payments and offers, Mendez ensured that Atlas and Sylvester Zugrav received favorable treatment in connection with procurement contracts, including, among other things, assisting Atlas in obtaining and maintaining procurement contracts; assisting Atlas in receiving payments on such contracts; and providing Atlas with contract bid or proposal information or source selection information before the award of procurement contracts.
In her plea agreement, Maria Zugrav admitted that she was aware of Sylvester Zugrav’s bribe payments to Mendez and assisted with concealment of the crime. According to court records, Sylvester Zugrav provided bribe payments to Mendez in three ways: cash payments via Federal Express to Mendez’s residential address; in-person payments of cash and other things of value; and electronic wire transfers to a bank account in Mexico opened by and in the name of Mendez’s cousin. Between November 2009 and August 2011, Sylvester Zugrav sent nine FedEx packages to Mendez’s home address. Each package contained $5,000 in cash, except the last package, containing $3,000, which was seized by law enforcement. Maria Zugrav assisted her husband and Mendez’s bribe scheme by limiting cash withdrawals from Atlas’ bank account to not more than $5,000 to avoid scrutiny by banking officials and law enforcement.
According to the plea documents, on multiple occasions when Sylvester Zugrav and Mendez traveled to the same location, Sylvester Zugrav would give Mendez cash payments and other things of value. From 2008 through August 2011, Sylvester Zugrav gave Mendez seven in-person cash payments ranging from $500 to $10,000, and purchased a laptop computer and software package worth over $2,900.As Mendez admitted, during the course of the corrupt scheme, Mendez opened a foreign bank account so that Sylvester Zugrav could pay Mendez larger bribe payments. Mendez asked his cousin in Mexico to open an account there. After the account was opened by Mendez's cousin, Maria Zugrav made wire transfers to the bank account located in Mexico in the name of Mendez's cousin to avoid detection of the larger bribe payments by law enforcement. From 2008 through August 2011, Maria Zugrav sent 10 wire transfers to the Mexico account ranging from $350 to $26,700.
Court records also describe additional steps taken to conceal the bribery scheme, including creating and using covert e-mail accounts, using encrypted documents, adopting false names and using code words. For instance, to avoid detection of their e-mail communications, Sylvester Zugrav and Mendez established e-mail accounts to be used only to communicate requests and offers for bribe payments. Sylvester Zugrav and Mendez also created password-protected documents for e-mail communications, and used code words and false names. Within the encrypted documents, Mendez adopted the moniker “Chuco” and Sylvester Zugrav used the codename “Jugo.” They referred to cash as “literature.”
Sylvester Zugrav faces a maximum potential penalty of five years in prison and a $250,000 fine on the conspiracy count, and Maria Zugrav faces a maximum penalty of three years in prison and a $250,000 fine on the misprision count. Sentencing for the Zugravs is scheduled for June 19, 2013.
The case was investigated by the FBI and the Air Force Office of Special Investigations. The case is being prosecuted by Trial Attorneys Marquest J. Meeks and Edward P. Sullivan of the Criminal Division’s Public Integrity Section, Assistant U.S. Attorney Carlos A. Esqueda for the District of Utah and Trial Attorney Deborah Curtis of the National Security Division’s Counterespionage Section.
Federal Court Enjoins Former Los Angeles Instant Tax Service FranchiseeRead the Press Release
A federal court in Los Angeles permanently barred a Rancho Palos Verdes, Calif., married couple – Henock Teferi and Ruth Berhane – and their company, Plover Financial Services LLC, from engaging in certain abusive tax-preparation practices, the Justice Department announced today. The defendants are former owners of a Los Angeles-area Instant Tax Service franchise. Instant Tax Service is a national tax-preparation chain based in Dayton, Ohio, and claims to be the fourth-largest tax-preparation firm in the nation.
According to the government complaint in the civil case the defendants operated Instant Tax Service offices at multiple locations in the Los Angeles area until 2011. During that time, defendants’ employees allegedly engaged in a variety of misconduct, including preparing tax forms with unsubstantiated business income, falsely claiming education credits, improperly claiming false filing status, reporting false dependents, selling deceptive loan products, and preparing tax returns based on information from employee paystubs rather than employer-issued W-2 forms.
Judge Michael Fitzgerald of the U.S. District Court for the Central District of California signed the permanent injunction order, barring the defendants from violating the federal tax laws and consumer protection laws, and requiring an outside monitor to review a sample of tax returns that the defendants prepare in connection with their current tax preparation business, and report to a designated representative of the United States to ensure compliance with the injunction. The order also bars the defendants from marketing abusive loan products, including holiday or instant cash loans or advance loan products offered to customers based on information obtained from customers’ paystubs. The defendants consented to the permanent injunction without admitting the allegations against them.
The Justice Department brought five civil injunction suits against Instant Tax Service and some franchisees last year. One of those suits is pending against the nationwide franchisor of Instant Tax Service and its owner, Fesum Ogbazion, in Dayton. The court in that case has entered a preliminary injunction , and trial on the government’s request to shut down the Instant Tax Service franchisor permanently is scheduled for May 2013.
In the past ten years, the Justice Department’s Tax Division has obtained hundreds of injunctions to stop the promotion of tax-fraud schemes and the preparation of fraudulent returns. Information about these cases is available on the Justice Department’s website .
Related Materials:
United States v. Henock Teferi, et al.
Complaint for Permanent Injunction and Other Relief (PDF)
Order of Permanent Injunction Against Henock Teferi, Ruth Berhane, and Plover Financial Services LLC (PDF)Arizona Man Sentenced for Illegally Selling Golden Eagle and Other Migratory Bird PartsRead the Press Release
Patrick Scott, 47, of Tuba City, Arizona, was sentenced in Phoenix today to 30 days in prison, five months home confinement, one year supervised release and a $2,000 fine for illegally selling golden eagle and other migratory bird parts, a felony criminal offense, announced Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division, and John S. Leonardo, U.S. Attorney for the District of Arizona.
Scott pleaded guilty in December 2012 to a single felony count of violating the Migratory Bird Treaty Act. According to the plea agreement filed in U.S. District Court in Arizona and accepted by the court today, in January 2008, Scott used the internet to illegally offer to sell a golden eagle fan for $950. A covert law enforcement officer exchanged e-mails with Scott and ultimately agreed on a purchase price of $900. In February 2008, a second undercover law enforcement officer went to Scott’s house and bought the golden eagle fan by making an initial payment of $550 and later deposited the remainder directly into Scott’s bank account in two installments. The court also found today that between July 2007 and February 2009, Scott sold, purchased, and/or offered to sell other migratory bird parts, from species including bald eagle, red-tailed hawk, golden eagle, crested caracara, anhinga and rough-legged hawk.
Golden eagles and other migratory birds are protected by federal laws and regulations. Under the Migratory Bird Treaty Act, it is unlawful to possess, offer to sell, sell, offer to purchase or purchase any migratory bird or migratory bird part, or any product that consists, or is composed in whole or part, of any such bird or bird part. It is a federal enforcement priority to prosecute those who violate federal laws by engaging in commercial activities involving federally protected bird feathers or other bird parts. The objective of these enforcement efforts is to reduce and eliminate the unlawful taking of federally protected birds by prosecuting not only individuals who kill protected birds but also individuals who seek to profit from the commercialization of federally protected birds or their feathers or other parts. This helps to ensure that golden eagle and other bird populations remain healthy and sustainable.
The investigation was conducted by the U.S. Fish and Wildlife Service’s Office of Law Enforcement in coordination with the Navajo Fish and Wildlife Division of Natural Resources. The case was prosecuted by the Environmental Crimes Section of the Justice Department and the U.S. Attorney’s Office for the District of Arizona.
South Carolina Ambulance Company to Pay U.S $800,000<br /> to Resolve False Claims AllegationsRead the Press Release
Williston Rescue Squad Inc. has agreed to pay the United States $800,000 to resolve allegations that it violated the False Claims Act by making false claims for payment to Medicare for ambulance transports, the Justice Department announced today. Williston, based in Williston, S.C., provides ambulance transport services in the southwestern part of South Carolina.
Medicare is a federally-funded health care program that is intended to provide basic medical insurance to people over the age of 65. Medicare reimburses providers only for non-emergency ambulance transports if the patient transported is bed-confined or has a medical condition that requires ambulance transportation. The settlement resolves allegations that Williston billed Medicare for routine, non-emergency ambulance transports that were not medically necessary and that Williston created false documents to make the transports appear to meet the Medicare requirements.
“Billing Medicare for unnecessary ambulance transports contributes to the soaring costs of health care,” said Stuart F. Delery, Principal Deputy Assistant Attorney General for the Civil Division. “The Department of Justice is committed to pursuing companies that waste limited Medicare funds.”
“Medicare fraud is stealing, and it is crippling America’s health care system. We have doubled the number of attorneys working these cases in South Carolina. Take notice, if you are bilking the Medicare system designed to support our elders, we are working to find you. For the honest service providers, which is a greater majority of the community, you can report fraud at 1-800-MEDICARE,” said William N. Nettles, U.S. Attorney for the District of South Carolina.
The settlement resolves a lawsuit filed by Sandra McKee under the qui tam, or whistleblower provisions, of the False Claims Act. McKee is a clinical social worker at a facility that regularly received patients transported by Williston’s ambulances. Under the False Claims Act, private citizens can bring suit on behalf of the United States and share in any recovery. Ms. McKee will receive $160,000 as her share of the government’s recovery.
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 nearly $10.2 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 billion.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov .
The United States’ investigation was conducted by the U.S. Attorney’s Office for the District of South Carolina, the Justice Department’s Civil Division, and the U.S. Department of Health and Human Services, Office of the Inspector General. The claims settled by this agreement are allegations only; there has been no determination of liability.
The False Claims Act suit was filed in the U.S. District Court for the District of South Carolina and is captioned United States ex rel. McKee v. Williston Rescue Squad, Inc. , No. 11-CV-00186 (D.S.C.).
Owner of Mental Health Facilities Sentenced to 168 Months in Prison in Connection with $63 Million Health Care Fraud SchemeRead the Press Release
A former owner of mental health facilities in Florida and North Carolina was sentenced today to serve 168 months in prison for his leadership role in a health care fraud scheme involving defunct health provider Health Care Solutions Network Inc. (HCSN), announced Assistant Attorney General Lanny A. Breuer 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.
Armando Gonzalez, 50, of Miami, was sentenced by U.S. District Judge Cecilia M. Altonaga in the Southern District of Florida. In addition to his prison term, Gonzalez was sentenced to serve three years of supervised release and ordered to pay 28,092,283 in restitution, which, under the terms of Gonzalez’s plea agreement, will be satisfied in part by seized assets including $987,000 in currency seized in July 2012 and Gonzalez’s mansion in Hendersonville, N.C.
On Dec. 17, 2012, Gonzalez pleaded guilty to one count of conspiracy to commit health care fraud and one count of conspiracy to commit money laundering.
According to court documents, HCSN operated community mental health centers at three locations in Miami-Dade County, Fla., and one location in Hendersonville. HCSN purported to provide partial hospitalization program (PHP) services to individuals suffering from mental illness. A PHP is a form of intensive treatment for severe mental illness. According to court documents, HCSN obtained Medicare beneficiaries to attend HCSN for purported PHP treatment that was unnecessary and, in many instances, not even provided.
Gonzalez orchestrated the HCSN fraud scheme, which centered on the recruitment and admission of patients who could not benefit from PHP services. In Miami, Gonzalez utilized patient recruiters to pay cash kickbacks in exchange for referrals from Assisted Living Facilities (ALF) patients who often suffered from conditions such as dementia and mental retardation. Once the unqualified patients were admitted to HCSN, Gonzalez’s employees would fabricate virtually every portion of the patients’ mental health medical records. The fake medical records were then utilized to support false billings to government sponsored health care benefit programs and to avoid detection by Medicare auditors.
In North Carolina, HCSN employees also routinely submitted false billing for patients watching movies, attending BBQs and, more commonly, patients who were not even present at the Miami and North Carolina facilities.
Gonzalez also admitted to his role in a money laundering scheme involving Psychiatric Consulting Network Inc. (PCN), a Florida corporation that was utilized by HCSN as a shell corporation to launder millions in health care fraud proceeds.
According to court documents, from 2004 through 2011, HCSN billed Medicare and the Florida Medicaid program approximately $63 million for purported mental health services that resulted in more than $28 million in payments.
Fifteen defendants have been charged for their alleged roles in the HCSN health care fraud scheme, and ten defendants have pleaded guilty. Alleged co-conspirators Wondera Eason and Paul Layman are scheduled for trial on March 11, 2013, before Judge Altonaga in Miami. Alleged co-conspirators Dr. Alina Feas, Dana Gonzalez and Lisset Palmero are scheduled for trial on June 3, 2013. Defendants are presumed innocent until proven guilty at trial.
The cases are being prosecuted by Special Trial Attorney William Parente and Trial Attorney Allan J. Medina of the Criminal Division’s Fraud Section. This case was investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida. In support of the Medicare Fraud Strike Force, the FBI Criminal Investigative Division’s Financial Crimes Section has funded the Special Trial Attorney position.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,480 defendants who have collectively billed the Medicare program for more than $4.8 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.