District Not Recorded

Delane F. Alston, a resident of Rocky Mount, N.C., pleaded guilty today before Judge Terrence W. Boyle to two counts of aiding and assisting in the preparation of false federal income tax returns, the Justice Department and the Internal Revenue Service (IRS) announced today. Alston’s sentencing hearing is scheduled for May 6, 2013.

According to the charging documents, Alston worked as a return preparer at P&A Tax Services, a tax return preparation business, between 2007 through 2011. Alston initially prepared returns at a P&A Tax Services office located in Rocky Mount, but she later transferred to the Spring Hope, N.C., office. Alston was the manager of the Spring Hope office in 2008, 2009 and 2011. At the hearing, Alston pleaded guilty to preparing false 2008-2010 tax returns for P&A Tax Services clients that contained false and fraudulent claims for tax refunds. Alston generated the refunds by reporting false information on client tax returns, including false dependent information and false deductions.

Alston is subject to a maximum potential sentence of three years in prison and a fine of up to $250,000 for each count of conviction.

This case was investigated by IRS-Criminal Investigation. Trial Attorney Adam Hulbig of the Justice Department’s Tax Division is prosecuting the case.

Willie C. Grant, a tax return preparer from Macon, Ga., was sentenced to 60 months in prison by for filing false claims for tax refunds, theft of government money and aggravated identity theft, the Justice Department and the Internal Revenue Service (IRS) announced today. U.S. District Court Chief Judge C. Ashley Royal also ordered Grant to pay over $200,000 in restitution to the IRS.

According to court documents, from 2003 through 2008, Grant owned and operated a tax return preparation business, Grant Income Tax Bookkeeping and Check Cash (GIT) out of his home in Macon. During this time period, Grant filed false federal income tax returns in the names of deceased individuals and used many of his former clients’ names and Social Security numbers to file wholly fraudulent returns without their knowledge or consent. Grant directed the IRS to either electronically deposit refunds into his personal or business bank accounts or issue paper refund Treasury checks which he cashed or deposited into bank accounts he controlled. Grant spent the proceeds of his false refund scheme on personal items including expensive cars and personal living expenses. Grant admitted that that he abused his position of private trust as a professional paid tax preparer in committing these crimes.

“Honest taxpayers are doubly harmed when they entrust return preparers with their information, who turn out to be thieves who steal that information to enrich themselves by making fraudulent refund claims,” said Assistant Attorney General Kathryn Keneally. “The Justice Department will investigate and prosecute stolen identity refund fraud in all of its various forms.”

“When Mr. Grant stole these identities and defrauded the IRS, he victimized not only the people whose names and social security numbers he used, but every tax paying citizen in the United States.  My office, with the continued cooperation of our law enforcement partners, will make sure that people like Mr. Grant are held to account for their fraud,” said Michael Moore, U.S. Attorney for the Middle District of Georgia.

“Mr. Grant used a foundation of fraud and deceit in order to cheat the government and victimize innocent taxpayers and is now being held accountable for his egregious behavior,” said Richard Weber, Chief IRS Criminal Investigation. “As a paid tax preparer, Grant held a position of trust in the eyes of his clients. He violated that trust and caused immeasurable harm to innocent victims. IRS Criminal Investigation has made investigating refund fraud and identity theft a top priority and we will vigorously pursue those who undermine the integrity of those individuals whose identities were stolen, as well as the U.S. tax system.”

Assistant Attorney General Keneally commended the efforts of special agents of IRS – Criminal Investigation, who investigated the case, and Tax Division Trial Attorneys Charles M. Edgar, Jr. and Justin K. Gelfand, who prosecuted the case.

Ryan Lohr, 26, a former correctional officer at the Roxbury Correctional Institution (RCI) in Hagerstown, Md., pleaded guilty today to conspiring to obstruct justice and destroy evidence from a March 9, 2008, assault of an inmate by RCI officers.

According to court documents filed in connection with his guilty plea, Lohr opened the door to inmate K.D.’s cell to allow other correctional officers to assault K.D. in retaliation for a prior incident involving K.D. and another officer. Lohr watched RCI officers use their fists and feet to strike K.D., who was restrained at the time of the assault. After Lohr learned that there would be an investigation into this beating, he met with other RCI officers and agreed to cover up the assault. Lohr directed others to clean up blood in K.D.’s cell, and watched a supervisor use what appeared to be a magnetic device in an effort to destroy surveillance video footage. A supervisor also told Lohr not to write a report about inmate K.D. and his injuries.

Lohr further admitted in court documents that he lied to RCI investigators and the Maryland State Police, when these agencies asked him about K.D.’s injuries. Lohr also told RCI officers to provide investigators with false information.

“Mr. Lohr admitted that he opened the door so that other correctional officers could assault an inmate, watched other correctional officers assault the restrained inmate, and conspired with others to cover up the assault,” said Assistant Attorney General Thomas E. Perez.  “The U.S. Constitution protects inmates and the Justice Department will continue to vigorously prosecute correctional officers who use their official position to assault inmates or to cover up crimes committed by their fellow officers.”

Lohr faces a maximum penalty of 5 years in prison and a fine of $250,000. Sentencing is set for June 18, before U.S. District Judge James K. Bredar.

The case is ongoing and is being investigated by the Frederick Resident Agency of the FBI and 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 United States Attorney’s Office for the District of Maryland.

A federal court in Indianapolis has barred David Ray Franklin and his company, Instant Refund Tax Service (IRTS) – which does business as Instant Tax Service—from preparing tax returns and from operating a tax-preparation business, the Justice Department announced today.  Instant Tax Service is a national tax-preparation chain operated by ITS Financial LLC, based in Dayton, Ohio.  A federal court entered a preliminary injunction against the Ohio firm and its owner last November.

The Indiana preliminary injunction order, which remains in effect pending final resolution of the civil lawsuit, was signed by Judge Sarah Evans Barker of the U.S. District Court for the Southern District of Indiana.  The court also permanently barred an alleged IRTS manager, William Brown, from preparing federal tax returns for others.  The defendants consented to the court orders without admitting the allegations against them. 

The government complaint in the case alleges that Franklin owned and operated 22 Instant Tax Service locations that prepared and filed over 10,000 federal tax returns in 2010 and 2011 combined.  Brown allegedly worked for Franklin and managed one of Franklin’s busiest Instant Tax Service offices.  The United States accused Franklin’s offices and Brown of preparing false and fraudulent income tax returns for customers, fabricating income for phony businesses to obtain larger tax credits, forging forms W-2, filing returns improperly based on paycheck stubs rather than W-2 wage statements, claiming false education tax credits and reporting false filing status.  The complaint also alleged that Franklin’s offices filed tax returns without authorization and sold false and deceptive loan products to Instant Tax Service customers.

The case is one of five similar civil actions that the Justice Department brought against Instant Tax Service franchises and the corporate franchisor, ITS Financial, which claims to be the fourth-largest tax-preparation firm in the nation. The trial on the government’s request in the Ohio case to permanently shut down the Instant Tax Service franchisor is scheduled for May.

In the past decade, 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. More information about those cases is available on the Justice Department website.

Related Materials:

United States v. David Ray Franklin, et al.
Stipulated Order for Permanent Injunction Against William Brown
Agreed Preliminary Injunction Order Against David Franklin and Instant Refund Tax Service, Inc.
 

Christopher B. Berg of Portola Valley, Calif., entered a plea of guilty today before the U.S. District Court in San Jose, Calif., to an information charging him with willful failure to file the required report of foreign bank account (FBAR) for an account he controlled at UBS in Switzerland in the year 2005.

According to the information, in 1999, Berg began working as a consultant. In 2000, Berg met with Beda Singenberger, a Swiss financial consultant, and a vice president of banking at UBS in San Francisco regarding setting up a bank account at UBS in Switzerland to shelter a portion of his consulting income from taxation. Beginning in 2001 and continuing through 2005, funds representing $642,069 in compensation earned by Berg from consulting services were deposited by wire transfer to UBS accounts. Berg used the money in these accounts at UBS in Switzerland to purchase a vehicle, to obtain cash while in Europe, and to pay the balance on a Eurocard he used while traveling in Europe. Berg did not disclose the existence of his accounts at UBS in Switzerland to his certified public accountant, and did not disclose the income earned by these accounts or the consulting income deposited to the accounts. The tax harm associated with Berg?s conduct is $270,757.

"Individuals who shirk their civic duty and evade taxes by hiding their income and assets in offshore accounts are making a very poor choice," said Kathryn Keneally, Assistant Attorney General for the Justice Department's Tax Division. "They risk criminal prosecution and jail, still owe the taxes due and may lose most of those assets to severe civil penalties.?"

?Those who hide their assets and income in offshore accounts should realize that there is no safe haven from the IRS,? said Richard Weber, Chief Internal Revenue Service Criminal Investigation. ?Mr. Berg admitted he disregarded his legal responsibility to file the required report of a foreign bank account and report all his income and interest. He now faces substantial monetary penalties and the risk of incarceration. Combating offshore tax evasion continues to be one of the IRS? top priorities.?

United States citizens and residents who have an interest in, or signature or other authority over, a financial account in a foreign country with assets in excess of $10,000 are required to disclose the existence of such account on Schedule B, Part III, of their individual income tax returns. Additionally, U.S. citizens and residents must file an FBAR with the U.S. Treasury disclosing any financial account in a foreign country with assets in excess of $10,000 in which they have a financial interest, or over which they have signature or other authority.

Sentencing has been scheduled for July 8, 2013. Berg faces a maximum penalty of five years in prison and a fine of up to $250,000.

The case was investigated by IRS - Criminal Investigation and prosecuted by trial attorneys from the Tax Division.

The Justice Department announced today that Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division will leave the department on March 1, 2013.

“Lanny has led one of the most successful and aggressive Criminal Divisions in the history of the Department of Justice, accomplishing record penalties in corruption cases at home and abroad and dismantling major organized crime and health care fraud networks around the country while also protecting the integrity of our banking systems and fighting financial fraud,” said Attorney General Eric Holder.  “Throughout his tenure, Lanny has demonstrated an unwavering commitment to the mission of this Department and I want to thank him for his dedication and exceptional service.”

 “Serving as Assistant Attorney General for the Criminal Division has been the greatest privilege of my professional life,” said Assistant Attorney General Breuer.  “From my first day on this job, nearly four years ago, I have loved it, and I am so proud of what the Criminal Division has accomplished over the past four years.  I have had no higher honor than to work alongside the talented and dedicated men and women of the Criminal Division, and I will forever be grateful for the opportunity to serve the American people together with them.”

 Assistant Attorney General Breuer was unanimously confirmed by the U.S. Senate on April 20, 2009, and is the longest-serving head of the Criminal Division in recent history.
 
 Under the leadership of Assistant Attorney General Breuer, the Criminal Division has taken significant steps to fight corruption at home and abroad, including by developing the innovative Kleptocracy Asset Recovery Initiative to identify and forfeit the proceeds of foreign official corruption – ensuring that corrupt officials from other countries are prevented from hiding their ill-gotten gains in the United States.  The Criminal Division has also substantially increased enforcement of the Foreign Corrupt Practices Act (FCPA), convicting three dozen individuals for FCPA-related offenses – a record number – and entering into more than 40 corporate resolutions involving eight of the top 10 largest FCPA penalties in history.  The Criminal Division also partnered with the Securities and Exchange Commission to publish groundbreaking guidance on FCPA enforcement.

 Assistant Attorney General Breuer was asked by the Attorney General to oversee the Deepwater Horizon Task Force – created to investigate conduct leading up to, and following, the Deepwater Horizon explosion on April 20, 2010.  The Task Force reached the largest criminal resolution in U.S. history with BP.  On Jan. 29, 2013, BP was ordered to pay $4 billion in criminal fines and penalties after previously having agreed to plead guilty to 11 felony manslaughter charges, environmental crimes and obstruction of congress.  The Criminal Division brought charges against four individuals in connection with the explosion and its aftermath as part of the ongoing investigation.  Additionally, Assistant Attorney General Breuer has overseen efforts to combat fraud arising from the oil spill, as well as to detect and deter fraud in the wake of natural disasters such as Hurricane Sandy, through the Disaster Fraud Task Force.

Protecting the integrity of the banking system and fighting financial fraud have been hallmarks of the Criminal Division during Assistant Attorney General Breuer’s tenure.  The division’s aggressive, ongoing investigation into manipulation of the London Interbank Offered Rate by global financial institutions has thus far led to nearly $2 billion in criminal penalties, as well as a guilty plea by a UBS subsidiary and charges against individuals.  Assistant Attorney General Breuer also spearheaded the development of the division’s Money Laundering and Bank Integrity Unit to pursue financial institutions and individuals who violate money laundering statutes and the Bank Secrecy Act.  Along with U.S. Attorney partners, the groundbreaking unit already has secured approximately $3.1 billion in criminal forfeitures from major financial institutions – including the largest forfeiture ever by a bank. 

 The Criminal Division has also prosecuted, together with U.S. Attorneys’ Offices, numerous significant perpetrators of financial fraud, including Lee Bentley Farkas, former chairman of Taylor, Bean & Whitaker, who perpetrated an approximately $3 billion bank fraud; and R. Allen Stanford, former chairman of Stanford International Bank, who perpetrated a $7 billion investment fraud scheme.  Both were convicted at trial and are serving 30 and 110 years in prison, respectively.

 Assistant Attorney General Breuer has also focused on combating healthcare fraud, helping to expand the Medicare Fraud Strike Force from two to nine cities and to carry out the two largest Medicare fraud takedowns in history, one involving 111 defendants charged and the other involving $452 million in alleged fraudulent billings.

 The Criminal Division under Assistant Attorney General Breuer’s leadership, working alongside its partners at U.S. Attorneys’ Offices, has pursued innovative cybercrime and intellectual property crime prosecutions.  Those prosecutions include the indictment of Megaupload and its leadership for intellectual property infringement in one of the largest criminal copyright cases brought by the United States.

 During Assistant Attorney General Breuer’s tenure, the Criminal Division has made great strides in the fight against violent crime along the southwest border and across the country.  Among other successes, the division, along with several U.S. Attorneys’ Offices, brought charges against 127 members and associates of La Cosa Nostra in the largest traditional organized crime takedown in U.S. history.  The Criminal Division and U.S. Attorney partners also have brought prosecutions against 35 Barrio Azteca gang members and associates – including those allegedly responsible for the death of a U.S. Consular official and others in Juarez, Mexico, on March 13, 2010; individuals allegedly responsible for the murder of ICE Special Agent Jaime Zapata; and dozens of members and associates of the Aryan Brotherhood of Texas, including the gang’s top “generals.”  Assistant Attorney General Breuer has traveled frequently to Mexico to develop close relationships with Mexican counterparts and created new prosecutorial units dedicated to targeting Mexican cartels and seizing their assets.  In 2012, the Criminal Division secured 115 extraditions from Mexico, a record for a calendar year.

Along with these new or expanded teams and initiatives, Assistant Attorney General Breuer has taken significant steps to reform the Criminal Division to meet the needs of the modern law enforcement climate, including creating the Organized Crime and Gang Section and the Human Rights and Special Prosecutions Section, and hiring hundreds of talented prosecutors and several new Section Chiefs into the division.

In his role as head of the Criminal Division, Assistant Attorney General Breuer has engaged on issues of criminal law policy throughout the United States and around the world, delivering dozens of keynote and special addresses across the country as well as in Russia, the Ukraine, the United Kingdom, Romania, Sweden, Liechtenstein, Spain and at the World Bank and United Nations.

 Prior to joining the Justice Department, Assistant Attorney General Breuer was a partner in the law firm of Covington and Burling LLP.  He earlier served as special counsel to President William Jefferson Clinton, and began his legal career as an Assistant District Attorney in Manhattan.  He is a graduate of Columbia College and Columbia Law School.

Two Iraqi citizens living in Bowling Green, Ky., who admitted using improvised explosive devices (IEDs) against U.S. soldiers in Iraq and who attempted to send weapons and money to Al-Qaeda in Iraq (AQI) for the purpose of killing U.S. soldiers, were sentenced today to serve federal prison terms by Senior Judge Thomas B. Russell in U.S. District Court for the Western District of Kentucky.

The sentences was announced Lisa Monaco, Assistant Attorney General for National Security; David J. Hale, U.S. Attorney for the Western District of Kentucky; and Perrye K. Turner, Special Agent in Charge of the FBI Louisville Division. 

Mohanad Shareef Hammadi, 25, a former resident of Iraq, was sentenced to life in federal prison, and Waad Ramadan Alwan, 31, a former resident of Iraq, was sentenced to 40 years in federal prison, followed by a life term of supervised release. Both defendants had pleaded guilty to federal terrorism charges.
        
“These two former Iraqi insurgents participated in terrorist activities overseas and attempted to continue providing material support to terrorists while they lived here in the United States. With today’s sentences, both men are being held accountable,” said Assistant Attorney General Monaco. “I thank the dedicated professionals in the law enforcement and intelligence communities who were responsible for this successful outcome.”

“These are experienced terrorists who willingly and enthusiastically participated in what they believed were insurgent support operations designed to harm American soldiers in Iraq,” stated U.S. Attorney Hale. “The serious crimes of both men merit lengthy punishment, and only the value of Alwan’s immediate and extensive cooperation with law enforcement justifies our recommendation of a reduced sentence for him.  Bringing these men to justice is the result of a comprehensive law enforcement effort.  The FBI agents of the Louisville Division, along with the federal and local law enforcement members of the Joint Terrorism Task Forces here in Kentucky, including the Bowling Green Police Department, and our many other partners, are to be commended.”

“Protecting the United States from terrorist attacks remains the FBI's top priority,” said FBI Special Agent in Charge Turner. “Using our growing suite of investigative and intelligence capabilities, FBI agents and analysts assigned to our Bowling Green office were able to neutralize a potential threat.  Our local Joint Terrorism Task Force, comprised of FBI Agents and other local, state and federal agencies from across the Commonwealth, remains committed to dismantling extremist networks and cutting off financing and other forms of support provided by terrorist sympathizers, whether they are operating in Kentucky or worldwide.”
 
“Today, the sentencing of Alwan and Hammadi represents the culmination of the extensive, effective and focused efforts of the U.S. Attorney's Office and the Kentucky Division of the FBI for their roles in the investigation and prosecution of these would-be terrorists.  I want to thank U.S. Attorney David Hale, the Kentucky Division of the FBI and the members of the FBI Bowling Green local office for their individual and collective efforts in bringing Alwan and Hammadi to justice for their crimes against the people of Kentucky and the United States,” stated Chief Doug Hawkins, Bowling Green Police Department. 

Alwan, whose fingerprints were found on an unexploded IED found in Iraq, pleaded guilty earlier in the case on Dec. 16, 2011, to all counts of a 23-count federal indictment.  He pleaded guilty to conspiring to kill U.S. nationals abroad; conspiring to use a weapon of mass destruction (explosives) against U.S. nationals abroad; distributing information on the manufacture and use of IEDs; attempting to provide material support to terrorists and to AQI and conspiring to transfer, possess and export Stinger missiles. 

Hammadi pleaded guilty on Aug. 21, 2012, to a 12-count superseding indictment.  Charges against him included attempting to provide material support to terrorists and to AQI; conspiring to transfer, possess and export Stinger missiles; and making a false statement in an immigration application.  At today’s sentencing, at the request of the United States, Alwan received a reduced sentence due to his cooperation with federal law enforcement.  The United States asked for no reduction of Hammadi’s sentence. 

According to information presented by the United States in connection with today’s sentencings, Hammadi and Alwan both admitted, in FBI interviews that followed waiver of their Miranda rights, to participation in the purported material support operations in Kentucky, and both provided the FBI details of their prior involvement in insurgent activities while living in Iraq.  Both men believed their activities in Kentucky were supporting AQI.  Alwan admitted participating in IED attacks against U.S. soldiers in Iraq, and Hammadi admitted to participating in 10 to 11 IED attacks as well as shooting at a U.S. soldier in an observation tower.  
 
Court documents filed in this case reveal that the Bowling Green office of the FBI’s Louisville Division initiated an investigation of Alwan in which they used a confidential human source (CHS).  The CHS met with Alwan and recorded their meetings and conversations beginning in August 2010.   The CHS represented to Alwan that he was working with a group to ship money and weapons to Mujahadeen in Iraq.  From September 2010 through May 2011, Alwan participated in ten separate operations to send weapons and money that he believed were destined for terrorists in Iraq.  Between October 2010 and January 2011, Alwan drew diagrams of multiple types of IEDs and instructed the CHS how to make them.  In January 2011, Alwan recruited Hammadi, a fellow Iraqi national living in Bowling Green, to assist in these material support operations.  Beginning in January 2011 and continuing until his arrest in late May 2011, Hammadi participated with Alwan in helping load money and weapons that he believed were destined for terrorists in Iraq.

Documents filed by the United States describe in detail the material support activities of the men in Bowling Green.  Without Hammadi present, Alwan loaded money and weapons he believed were being sent to Iraq on five occasions from September 2010 through February 2011, handling five rocket-propelled grenade launchers, five machine guns, two sniper rifles, two cases of C4 explosive and what he believed to be $375,000.  After Hammadi joined Alwan in January 2011, the two men loaded money and weapons together on five occasions from January to May 2011.  Together, on these five occasions, they loaded five rocket-propelled grenade launchers, five machine guns, five cases of C4 explosive, two sniper rifles, one box of 12 hand grenades, two Stinger surface-to-air missile launchers and what they believed to be a total of $565,000.  Alwan and Hammadi were recorded by video during these operations. 

In speaking with the CHS, Alwan spoke of his efforts to kill U.S. soldiers in Iraq, stating “lunch and dinner would be an American.”  Hammadi told the CHS that he had experience in Iraq with “Strelas” (a Russian made, portable, shoulder-fired surface-to-air missile launcher) and discussed shipping “Strelas” in future operations.

According to the charging documents, Hammadi entered the United States in July 2009, and, after first residing in Las Vegas, moved to Bowling Green.  Hammadi and Alwan were arrested on May 25, 2011, in Bowling Green on criminal complaints.  Both defendants were closely monitored by federal law enforcement authorities in the months leading up to their arrests.  Neither was charged with plotting attacks within the United States.  All of the weapons, including Stinger missiles, had been rendered inert before being handled by Hammadi and Alwan.  The weapons and money handled by the men in the United States were never provided to AQI, but instead were carefully controlled by law enforcement as part of the undercover operation.

This case was investigated by the Louisville Division of the FBI.  Assisting in the investigation were members of the Louisville and Lexington Joint Terrorism Task Forces, U.S. Immigration and Customs Enforcement, U.S. Marshals Service, U.S. Department of Defense, U.S. Citizenship and Immigration Services and the Bowling Green Police Department.

The prosecution was handled by Assistant U.S. Attorneys Michael Bennett and Bryan Calhoun from the U.S. Attorney’s Office for the Western District of Kentucky and Trial Attorney Larry Schneider from the Counterterrorism Section of the Justice Department’s National Security Division.

WASHINGTON – Following a two-week trial, a federal jury in Puerto Rico today convicted a former executive of a Florida-based coastal water freight transportation company for his participation in a conspiracy to fix rates and surcharges for water transportation of freight between the continental United States and Puerto Rico, the Department of Justice announced.

Frank Peake, the former president of Sea Star Line LLC, was found guilty today in the U.S. District Court for the District of Puerto Rico, of participating in a conspiracy to fix rates and surcharges for water transportation of freight between the continental United States and Puerto Rico from at least as early as late 2005, until at least April 2008.

“The coastal shipping price-fixing conspiracy affected the price of nearly every product that was shipped to and from Puerto Rico during the conspiracy,” said Bill Baer, Assistant Attorney General in charge of the Department of Justice's Antitrust Division. “This successful prosecution shows that the division will hold accountable high-level executives who perpetuate these crimes.”

Sea Star pleaded guilty on Dec. 20, 2011, and was sentenced by Judge Daniel R. Dominguez to pay a $14.2 million criminal fine for its role in the conspiracy from as early as May 2002, until at least April 2008. Sea Star transports a variety of cargo shipments, such as heavy equipment, perishable food items, medicines and consumer goods, on scheduled ocean voyages between the continental United States and Puerto Rico.

According to evidence presented at trial, Sea Star, Peake and co-conspirators carried out the conspiracy by agreeing during meetings and communications to allocate customers of Puerto Rico freight services and to rig bids and fix the rates and surcharges to be charged to purchasers of water transportation of freight between the continental United States and Puerto Rico. The department said the conspirators also engaged in meetings for the purpose of monitoring and enforcing adherence to the agreed-upon rates and sold Puerto Rico freight services at collusive and noncompetitive rates.

Including today’s jury conviction, as a result of this ongoing investigation, three companies and six individuals have pleaded guilty or been convicted at trial. The five individuals and three companies that have been sentenced have been ordered to serve a total of more than 11 years in prison and to pay more than $46 million in criminal fines.

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

Today’s conviction arose from an ongoing federal antitrust investigation into price fixing, bid rigging and other anticompetitive conduct in the coastal water freight transportation industry, which is being conducted by the Antitrust Division’s National Criminal Enforcement Section; the Baltimore Resident Agency of the Department of Defense’s Office of the Inspector General, Defense Criminal Investigative Service (DCIS); the Miami Field Office of the Department of Transportation’s Office of Inspector General; and the J acksonville Field Office of the FBI. Anyone with information concerning anticompetitive conduct in the coastal water freight transportation industry is urged to call the Antitrust Division’s National Criminal Enforcement Section at 202-307-6694, visit www.justice.gov/atr/contact/newcase.htm or contact DCIS’s Baltimore Resident Agency at 410-347-1620.

A federal grand jury today indicted a former Town Creek, Ala., police officer for violating an individual’s civil rights during the course of an arrest, announced Assistant Attorney General for the Civil Rights Division Thomas E. Perez, U.S. Attorney Joyce White Vance and FBI Special Agent in Charge Richard D. Schwein Jr.

The indictment charges Brandon Shane Mundy, 32, of Oxford, Ala., with striking a man with a dangerous weapon and causing bodily injury during the man’s November 2009 arrest in a northern Alabama town. Mundy’s action deprived the man, identified as J.T., of the constitutional right to be free from the use of unreasonable force by someone acting under the color of law, according to the indictment.

If convicted, Mundy could face a maximum sentence of 10 years in prison and a $250,000 fine. An indictment is merely an allegation and the defendant is presumed innocent until proven guilty beyond a reasonable doubt.

The FBI is investigating the case, and is being prosecuted by Assistant U.S. Attorney Elizabeth Holt and Justice Department Civil Rights Division Trial Attorney Daniel H. Weiss.

A Dominican national was sentenced today to 63 months in prison for his leading role in trafficking the identities of Puerto Rican U.S. citizens and corresponding identity documents, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney Rosa E. Rodríguez-Vélez of the District of Puerto Rico; Director John Morton of U.S. Immigration and Customs Enforcement (ICE), which oversees Homeland Security Investigations (HSI); Chief Postal Inspector Guy J. Cottrell of the U.S. Postal Inspection Service (USPIS); Gentry Smith, Acting Director of the U.S. State Department’s Diplomatic Security Service (DSS); and Internal Revenue Service-Criminal Investigation (IRS-CI) Chief Richard Weber.

Rafael Joaquin Beltre-Beltre, 36, formerly of Caguas, Puerto Rico, was sentenced by U.S. District Judge Gustavo A. Gelpí, in the District of Puerto Rico.  In addition to Beltre-Beltre’s prison term, Judge Gelpí ordered him to forfeit $424,793 in illegal proceeds and ordered the removal of Beltre-Beltre from the United States to the Dominican Republic after the completion of his sentence.  On Sept. 4, 2012, Beltre-Beltre pleaded guilty in Puerto Rico to one count of conspiracy to commit identification fraud, one count of conspiracy to commit alien smuggling for financial gain and one count of international money laundering.

Beltre-Beltre was charged in a superseding indictment returned by a federal grand jury in Puerto Rico on March 22, 2012.  To date, a total of 53 individuals have been charged for their roles in the identity trafficking scheme, and 25 defendants have pleaded guilty.

Court documents allege that individuals located in the Savarona area of Caguas, Puerto Rico (Savarona suppliers), obtained Puerto Rican identities and corresponding identity documents.  Other conspirators located in various cities throughout the United States (identity brokers) allegedly solicited customers and sold Social Security cards and corresponding Puerto Rico birth certificates for prices ranging from $700 to $2,500 per set.  The superseding indictment alleges that identity brokers ordered the identity documents from Savarona suppliers, on behalf of the customers, by making coded telephone calls.  The conspirators are charged with using text messages, money transfer services and express, priority or regular U.S. mail to complete their illicit transactions.

Court documents allege that some of the conspirators assumed a Puerto Rican identity themselves and used that identity in connection with the trafficking operation.  Their customers allegedly generally obtained the identity documents to assume the identity of Puerto Rican U.S. citizens and to obtain additional identification documents, such as legitimate state driver’s licenses.  Some customers allegedly obtained the documents to commit financial fraud and attempted to obtain a U.S. passport.

According to court documents, various identity brokers were operating in Rockford, Ill.; DeKalb, Ill.; Aurora, Ill.; Seymour, Ind.; Columbus, Ind.; Indianapolis; Hartford, Conn.; Clewiston, Fla.; Lilburn, Ga.; Norcross, Ga.; Salisbury, Md.; Columbus, Ohio; Fairfield, Ohio; Dorchester, Mass.; Lawrence, Mass.; Salem, Mass.; Worcester, Mass.; Grand Rapids, Mich.; Nebraska City, Neb.; Elizabeth, N.J.; Burlington, N.C.; Hickory, N.C.; Hazelton, Pa.; Philadelphia; Houston; Abingdon, Va.; Albertville, Ala.; and Providence, R.I.

Beltre-Beltre admitted that he operated as a Savarona supplier and was a leader and organizer in the conspiracy.  He also admitted that he and his co-conspirators sold personal identifying information pertaining to real Puerto Rican U.S. citizens, including minors, and that he knew some of the identities would be used to commit tax fraud and some would be used to fraudulently apply for U.S. passports.  According to court documents, in June 2011, an unauthorized alien in Arlington, Va., applied for a U.S. passport using legitimate Puerto Rico identity documents that had been supplied by Beltre-Beltre.  Law enforcement agents uncovered the fraudulent application and prevented the issuance of the U.S. passport.

On Jan. 11, 2012, Beltre-Beltre was arrested and found to be in possession of over 100 legitimate identity documents in other people’s names, in addition to four legitimate but blank Puerto Rico birth certificates.  Beltre-Beltre admitted that at the time of his arrest he possessed a firearm with an obliterated serial number in relation to his identity trafficking and alien smuggling operation.  Beltre-Beltre is the 12th defendant to be sentenced in this case.

The charges are the result of Operation Island Express, an ongoing, nationally-coordinated investigation led by the ICE-HSI Chicago Office and USPIS, DSS and IRS-CI offices in Chicago, in coordination with the ICE-HSI San Juan Office and the DSS Resident Office in Puerto Rico.  The Illinois Secretary of State Police; Elgin, Ill., Police Department; Seymour, Ind., Police Department; and Indiana State Police provided substantial assistance.  The ICE-HSI Assistant Attaché office in the Dominican Republic and International Organized Crime Intelligence and Operations Center (IOC-2) as well as various ICE, USPIS, DSS and IRS-CI offices around the country provided invaluable assistance.

The case is being prosecuted by Trial Attorneys James S. Yoon, Hope S. Olds, Courtney B. Schaefer and Christina Giffin of the Criminal Division’s Human Rights and Special Prosecutions Section, with the assistance of Acting Assistant Deputy Chief Jeannette Gunderson of the Criminal Division’s Asset Forfeiture and Money Laundering Section, and the support of the U.S. Attorney’s Office for the District of Puerto Rico.  The U.S. Attorney’s Offices in the Northern District of Illinois, Southern District of Indiana, District of Connecticut, District of Massachusetts, District of Nebraska, Middle District of North Carolina, Southern District of Ohio, District of Rhode Island, Southern District of Texas and Western District of Virginia provided substantial assistance.

Potential victims and the public may obtain information about the case at: www.justice.gov/criminal/vns/caseup/beltrerj.html.  Anyone who believes their identity may have been compromised in relation to this investigation may contact the ICE toll-free hotline at 1-866-DHS-2ICE (1-866-347-2423) and its online tip form at www.ice.gov/tipline.  Anyone who may have information about particular crimes in this case should also report it to the ICE tip line or website.

Anyone who believes that they have been a victim of identity theft, or wants information about preventing identity theft, may obtain helpful information and complaint forms on various government websites including the Federal Trade Commission ID Theft Website, www.ftc.gov/idtheft.  Additional resources regarding identity theft can be found at www.ojp.usdoj.gov/ovc/pubs/ID_theft/idtheft.html; www.ssa.gov/pubs/10064.html;  www.fbi.gov/about-us/investigate/cyber/identity_theft; and www.irs.gov/privacy/article/0,,id=186436,00.html.

BP Exploration and Production Inc. pleaded guilty today to 14 criminal counts for its illegal conduct leading to and after the 2010 Deepwater Horizon disaster, and was sentenced to pay $4 billion in criminal fines and penalties, the largest criminal resolution in U.S. history, Attorney General Holder announced today. 

“Today’s guilty plea and sentencing represent a significant step forward in the Justice Department’s ongoing efforts to seek justice on behalf of those affected by one of the worst environmental disasters in American history,” said Attorney General Holder.  “I’m pleased to note that more than half of this landmark resolution – which totals $4 billion in penalties and fines, and represents the single largest criminal resolution ever – will help to provide direct support to Gulf Coast residents as communities throughout the region continue to recover and rebuild.”

“The Deepwater Horizon explosion was a national tragedy that resulted in the senseless deaths of 11 people and immense environmental damage,” said Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division.  “Through the tenacious work of the Task Force, BP has received just punishment for its crimes leading up to and following the explosion.  The Justice Department will keep a watchful eye on BP’s compliance with the plea agreement’s terms, including the requirements of full cooperation with the department’s ongoing criminal investigation, implementation of enhanced safety protocols and adherence to the recommendations of two newly installed monitors.  Should BP fail to comply, we will act swiftly and firmly.”

 BP’s guilty plea was accepted, and the sentence was imposed, by U.S. District Judge Sarah S. Vance of the Eastern District of Louisiana.  During the guilty plea and sentencing proceeding, Judge Vance found, among other things, that the consequential fines imposed under the plea agreement far exceed any imposed in U.S. history, and are structured so that BP will feel the full brunt of the penalties.  She also noted that the agreement provides just punishment and significant deterrence, requiring detailed drilling safeguards, monitors and other stringent, special conditions of probation so that BP’s future conduct will be closely watched.  

BP pleaded guilty to each count charged in an information filed in U.S. District Court in the Eastern District of Louisiana, including 11 counts of felony manslaughter, one count of felony obstruction of Congress and violations of the Clean Water and Migratory Bird Treaty Acts.  In its guilty plea today, BP admitted that, on April 20, 2010, the two highest-ranking BP supervisors onboard the Deepwater Horizon, known as BP’s “Well Site Leaders” or “company men,” negligently caused the deaths of 11 men and the resulting oil spill.  The company also admitted that on that evening, the two well site leaders observed clear indications that the Macondo well was not secure and that oil and gas were flowing into the well, but chose not to take obvious and appropriate steps to prevent the blowout.  Additionally, BP admitted that as a result of the Well Site Leaders’ conduct, control of the Macondo well was lost, resulting in catastrophe. 

BP also admitted during its guilty plea that the company, through a senior executive, obstructed an inquiry by the U.S. Congress into the amount of oil being discharged into the Gulf while the spill was ongoing.  BP also admitted that the senior executive withheld documents, provided false and misleading information in response to the U.S. House of Representatives’ request for flow-rate information, manipulated internal estimates to understate the amount of oil flowing from the well and withheld data that contradicted BP’s public estimate of 5,000 barrels of oil per day.  At the same time that the senior executive was preparing his manipulated estimates, BP admitted, the company’s internal engineering response teams were using sophisticated methods that generated significantly higher estimates.  The Flow Rate Technical Group, consisting of government and independent scientists, later concluded that more than 60,000 barrels per day were leaking into the Gulf during the relevant time, contrary to BP’s representations to Congress.

According to the sentence imposed by Judge Vance pursuant to the plea agreement, more than $2 billion dollars will directly benefit the Gulf region.  By order of the court, approximately $2.4 billion of the $4.0 billion criminal recovery is dedicated to acquiring, restoring, preserving and conserving – in consultation with appropriate state and other resource managers – the marine and coastal environments, ecosystems and bird and wildlife habitat in the Gulf of Mexico and bordering states harmed by the Deepwater Horizon oil spill.  This portion of the criminal recovery is also to be directed to significant barrier island restoration and/or river diversion off the coast of Louisiana to further benefit and improve coastal wetlands affected by the oil spill.  An additional $350 million will be used to fund improved oil spill prevention and response efforts in the Gulf through research, development, education and training.

BP was also sentenced to five years of probation – the maximum term of probation permitted under law.  The company is also required, according to the order entered by the court pursuant to the plea agreement, to retain a process safety and risk management monitor and an independent auditor, who will oversee BP’s process safety, risk management and drilling equipment maintenance with respect to deepwater drilling in the Gulf of Mexico.  BP is also required to retain an ethics monitor to improve its code of conduct to ensure BP’s future candor with the U.S. government.

The charges and allegations pending against individuals in related cases are merely accusations, and those individuals are considered innocent unless and until proven guilty.

The guilty plea and sentence announced today are part of the ongoing criminal investigation by the Deepwater Horizon Task Force into matters related to the April 2010 Gulf oil spill.  The Deepwater Horizon Task Force, based in New Orleans, is supervised by Assistant Attorney General Breuer and led by Deputy Assistant Attorney General John D. Buretta, who serves as the director of the task force.  The task force includes prosecutors from the Criminal Division and Environment and Natural Resources Division of the Department of Justice; the U.S. Attorney’s Office for the Eastern District of Louisiana, as well as other U.S. Attorneys’ Offices; and investigating agents from: the FBI; Environmental Protection Agency, Criminal Investigative Division; Environmental Protection Agency, Office of Inspector General; Department of Interior, Office of Inspector General; National Oceanic and Atmospheric Administration Office of Law Enforcement; U.S. Coast Guard; U.S. Fish and Wildlife Service; and the Louisiana Department of Environmental Quality.

This case was prosecuted by Deepwater Horizon Task Force Director John D. Buretta, Deputy Directors Derek A. Cohen and Avi Gesser, and task force prosecutors Richard R. Pickens II, Scott M. Cullen, Colin Black, and Rohan Virginkar.

A federal grand jury in Montgomery, Ala., returned an indictment charging LaQuanta Clayton with aggravated identity theft and theft of government money, the Justice Department and the Internal Revenue Service (IRS) announced today.

According to the indictment, Clayton used stolen identity information to facilitate the theft of federal tax refunds. As alleged, Clayton used the stolen identity information to open bank accounts at the bank where she was working and then stole federal tax refunds that were deposited into the bank accounts.

An indictment merely alleges that crimes have been committed and the defendant is presumed innocent until proven guilty beyond a reasonable doubt. If convicted, Clayton faces a maximum potential sentence of 10 years in prison for each of the 15 theft of government money counts and a mandatory two-year sentence for the aggravated identity theft counts. She is also subject to fines and mandatory restitution if convicted.

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

A federal grand jury in Montgomery, Ala., returned an indictment charging Scottie Alice Johnson with a conspiracy to commit theft of public funds and to defraud the Internal Revenue Service (IRS) and with theft of public funds, the Justice Department and the IRS announced today.

According to the indictment, between 2006 and 2012, Johnson conspired with others to defraud the IRS and commit theft of public funds. Co-conspirators filed false federal income tax returns with stolen identities and had refunds directly deposited into several bank accounts, including bank accounts in the name of Scottie Alice Johnson and another individual. The bank accounts associated with the conspiracy received at least $1.3 million in false tax refunds.

An indictment merely alleges that crimes have been committed, and the defendant is presumed innocent until proven guilty beyond a reasonable doubt. If convicted, Johnson faces five years in prison for the conspiracy count and 10 years in prison for each theft of public funds count. Johnson is also subject to fines, mandatory restitution and forfeiture.

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

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

Chequ li a Motley, a resident of Montgomery, Ala., was indicted by a federal grand jury for her involvement in a conspiracy to use stolen identities to file fraudulent tax returns, the Justice Department and the Internal Revenue Service (IRS) announced today. Motley was indicted on various charges, including conspiracy, five counts of wire fraud and five counts of aggravated identity theft.

According to the indictment, Motley worked for an Alabama state government agency and had access to individuals’ personal identifying information as part of her job. She stole identities and sold them to several co-conspirators, the indictment alleges. Those co-conspirators used the stolen identities to file false tax returns that fraudulently requested tax refunds from the IRS.

An indictment merely alleges that crimes have been committed, and the defendant is presumed innocent until proven guilty beyond a reasonable doubt. If convicted, Motley faces a maximum potential sentence of 10 years in prison for the conspiracy charge, up to 20 years in prison for each wire fraud charge and a mandatory two-year sentence for the aggravated identity theft counts. She will also be subject to fines and mandatory restitution if convicted.  

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

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

A federal grand jury in Montgomery, Ala., returned an indictment charging Lea’Tice Phillips for conspiring to file false tax returns using stolen identities, the Justice Department and the Internal Revenue Service (IRS) announced today. The 37 count indictment charges Phillips with conspiracy to file false claims, wire fraud, computer fraud and aggravated identity theft.

According to the court documents, Phillips worked for an Alabama state agency and had access to state databases which contained means of identification of individuals.  Between October 2009 and April 2012, Phillips conspired with Antoinette Djonret and others to file false tax returns using stolen identities. On multiple occasions, Phillips accessed a state database to obtain means of identification. Phillips used her state email to send means of identification to Djonret. Djonret and others used those means of identification to file false tax returns. Djonret and her co-conspirators filed most of the tax returns from her residence in Montgomery. Djonret and her co-conspirators used an elaborate network of individuals to launder the tax refunds. They recruited individuals to purchase prepaid debit cards and to provide the cards to Djonret and her co-conspirators. The fraudulent tax refunds were directed to the prepaid debit cards. Djonret and her co-conspirators would then use the prepaid debit cards to obtain the proceeds. Some of the prepaid debit cards were in the name of Lea’Tice Phillips. In total, Djonret filed over 1,000 false tax returns that claimed over $1.7 million in fraudulent tax refunds. 

On Aug. 9, 2012, a federal grand jury in Montgomery returned a superseding indictment charging Antoinette Djonret, Angelique Djonret, Tabitha Stinson, Melba Wilson, Chantresa Hayes and Corey Means for their roles in the same conspiracy.

An indictment merely alleges that crimes have been committed, and the defendant is presumed innocent until proven guilty beyond a reasonable doubt.  If convicted, the Phillips faces 10 years imprisonment for the conspiracy to file false claims, 20 years for each wire fraud count, 10 years imprisonment for each computer fraud count and a mandatory two-year sentence for the aggravated identity theft counts.  She is also subject to fines, mandatory restitution and forfeiture.     

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

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

An Orange County, Va., man was sentenced today to serve 168 months in prison following his March 2011 guilty plea to child pornography charges that originated in three different federal districts.

The sentence was announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney Timothy J. Heaphy of the Western District of Virginia, U.S. Attorney Neil H. MacBride of the Eastern District of Virginia and U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida.

Anthony C. Jeffries was sentenced by Senior U.S. District Judge Norman K. Moon in the Western District of Virginia.  On March 28, 2011, Jeffries pleaded guilty to one count of distributing child pornography and one count of possessing child pornography on charges contained in an indictment filed in the Western District of Virginia and two separate one-count criminal informations originally filed in the Eastern District of Virginia and the Southern District of Florida, each charging him with distributing child pornography.  Jeffries was sentenced to 168 months in prison for each count of distributing child pornography and 120 months in prison for possessing child pornography.  The prison sentences for each count will be served concurrently.  In addition to his prison term, Jeffries was sentenced to serve lifetime supervised release.

According to information presented in court, Jeffries assisted in running an online forum from his Orange County home that was dedicated to posting pictures and chatting about young girls. The defendant was responsible for one-fourth of the images available on the forum.

In February 2010, undercover FBI agents working in Richmond, Va., and Miami logged onto a peer-to-peer file sharing network and downloaded numerous images of child pornography from Jeffries.  In June 2010, a search warrant was obtained and computer equipment was seized from the defendant’s Virginia home.  A forensic examination of that equipment revealed thousands of image files, including images of young children engaged in sexual acts with adults.

The investigation of the case was conducted by the Orange County Sheriff’s Office, the FBI, the Charlottesville, Va., Police Department, the University of Virginia Police Department and the High Technology Investigative Unit of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS).  Assistant U.S. Attorney Nancy Healey and Trial Attorney Darcy Katzin with the Criminal Division’s CEOS are prosecuting the case for the Western District of Virginia. Elizabeth Wu is prosecuting the case for the Eastern District of Virginia.

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

U.S. District Judge David M. Lawson, of the Eastern District of Michigan, entered a consent decree of permanent injunction against Ann Arbor, Michigan-based Green Hope LLC, dba Rosewood Products, and its president, Phil G. Ye, the Justice Department announced today.

The company manufactures and sells ready-to-eat organic tofu and soy milk products to businesses in Michigan and Minnesota, including organic supermarket chains. As alleged in the complaint filed against the company and Ye, numerous Food and Drug Administration (FDA) inspections since 2009 found persistent violations at the company’s manufacturing facility involving insanitary conditions. FDA’s inspections found that Green Hope did not store food properly, did not address employee cleanliness issues, permitted waste water to come into contact with tofu during processing and failed to clean all food-contact surfaces and equipment. These violations raised the possibility of contamination of the company’s food products.

The consent decree orders Green Hope and Ye to take a wide range of actions to correct the violations and ensure that they do not happen again. Among other actions, Green Hope must develop and implement sanitation control programs; provide FDA the opportunity to inspect the facilities to assure Green Hope’s compliance with the consent decree, the Food, Drug and Cosmetic Act, and applicable regulations; and receive written authorization from FDA to resume operations. Green Hope must also make structural repairs to its facility necessary to protect against contamination of raw ingredients, in-process and finished articles of food, containers and packaging materials.

“This company has a long history of not complying with federal statutes and regulations intended to protect the public health,” said Stuart F. Delery, Principal Deputy Assistant Attorney General for the Justice Department’s Civil Division. “Consumers expect, and deserve, that their food be safe to eat, and the Department of Justice will continue to take enforcement action against food manufacturers whose conduct can endanger public safety.” 

This case was litigated by Dan Baeza of the Consumer Protection Branch in the Department of Justice’s Civil Division in conjunction with Assistant U.S. Attorney Peter A. Caplan of the U.S. Attorney’s Office for the Eastern District of Michigan and Christopher Fanelli of the FDA’s Office of Chief Counsel. The case was investigated by the FDA’s Detroit District Office.

The FDA Warning Letter against Green Hope can be found at: www.fda.gov/ICECI/EnforcementActions/WarningLetters/2011/ucm254923.htm

Steven Kern of Marine City, Mich., pleaded guilty today before U.S. District Court Judge Arthur J. Tarnow in the Eastern District of Michigan to eight counts of filing false corporate tax returns and eight counts of failing to file his individual tax returns, the Justice Department and Internal Revenue Service (IRS) announced today.

According to filed court documents and court proceedings, Kern operated the Kern Chiropractic Center from Marine City and diverted cash and check payments from the business for his own personal use. The indictment alleges that Kern failed to file individual tax returns for tax years 2003 to 2010, despite earning more $1.2 million in gross income during that time period. According to filed court documents and court proceedings, Kern told IRS-Criminal Investigation Special Agents he believed signing and filing a completed tax return was a violation of his constitutional rights. 

Each count of filing a false corporate tax return carries a maximum penalty of three years in prison and a $250,000 fine. Each count of failing to file an individual tax return carries a maximum penalty of twelve months imprisonment and a fine of up to $100,000.  Kern is scheduled to be sentenced on April 30, 2013. 

The case is being prosecuted by Trial Attorneys Mark McDonald and Jeff Bender of the Justice Department’s Tax Division.  The investigation was conducted by IRS Criminal Investigation.

Miami-area resident Nichole Eckert, former therapist at the mental health care company American Therapeutic Corporation (ATC), was sentenced today to serve 48 months in prison for participating in a $205 million Medicare fraud scheme.

The sentence was announced today 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; Special Agent-in-Charge Michael B. Steinbach of the FBI’s Miami Field Office; and Special Agent-in-Charge Christopher Dennis of the Health and Human Services’ Office of Inspector General (HHS-OIG), Office of Investigations Miami office.
 
Eckert, 35, was sentenced by U.S. District Judge Patricia A. Seitz in the Southern District of Florida.  In addition to the prison term, Judge Seitz sentenced Eckert to serve three years of supervised release and ordered her to pay more than $72 million in restitution, jointly and severally with her co-defendants.

On Nov. 15, 2012, a federal jury in the Southern District of Florida found Eckert guilty of one count of conspiracy to commit health care fraud after a 16-day trial.  She has been in federal custody since her conviction.
 
Evidence at trial demonstrated that the defendant and her co-conspirators caused the submission of false and fraudulent claims to Medicare through ATC, a Florida corporation headquartered in Miami that operated purported partial hospitalization programs (PHPs) in seven different locations throughout South Florida and Orlando.  A PHP is a form of intensive treatment for severe mental illness. The defendant and her co-conspirators also used a related company, American Sleep Institute, to submit fraudulent Medicare claims.

Evidence at trial revealed that ATC secured patients by paying kickbacks to assisted living facility owners and halfway house owners who would then steer patients to ATC. These patients attended ATC, where they were ineligible for the treatment ATC billed to Medicare and where they did not receive the treatment that was billed to Medicare.  After Medicare paid the claims, some of the co-conspirators then laundered the Medicare money in order to create cash to pay the patient kickbacks.

Eckert was a therapist at ATC’s Ft. Lauderdale, Fla., center from September 2005 to September 2007, and returned to ATC as a therapist from late 2009 to October 2010, when ATC closed its doors as a result of federal charges.  Evidence at trial revealed that Eckert fabricated therapist notes and other documents for patient files and submissions, and taught others to fabricate them, to make it appear both that ATC patients were qualified for PHP treatment and that they were receiving the intensive, individualized treatment PHP is supposed to be.  ATC used those patient files to substantiate false and fraudulent claims to Medicare.  Included in these submissions were claims for patients who were in the late stages of diseases causing permanent cognitive memory loss and patients who had substance abuse issues and were living in halfway houses.  These patients were ineligible for PHP treatments, and because they were forced by their assisted living facility owners and halfway house owners to attend ATC, they were not receiving treatment for the diseases they actually had.

ATC and related company Medlink pleaded guilty in May 2011 to conspiracy to commit health care fraud. ATC also pleaded guilty to conspiracy to defraud the United States and to pay and receive illegal health care kickbacks. On Sept. 16, 2011, the two corporations were sentenced to five years of probation per count and ordered to pay restitution of $87 million. Both corporations have been defunct since their owners were arrested in October 2010.  Dozens of individuals have been convicted at trial or pleaded guilty for their participation in the scheme.

Evidence at trial showed that the ATC scheme resulted in a total of $205 million in fraudulent Medicare billings.   

The cases were prosecuted by Senior Trial Attorney Jennifer L. Saulino and Trial Attorney Laura M.K. Cordova of the Justice Department 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. 

The Justice Department filed suit today asking the U.S. District Court for the Middle District of Florida to permanently bar Torrey Burden from preparing federal tax returns for others. The civil injunction suit alleges that Burden prepares returns through A&L Financial Solutions in St. Petersburg, Fla.

According to the complaint, Burden prepares tax returns using false information in order to reduce his customers’ tax liabilities. Specifically, the government alleges that Burden claims false or overstated deductions and claims tax credits that his customers were not eligible to claim. The Internal Revenue Service (IRS) has examined 80 returns prepared by Burden and found that 92.5 percent resulted in additional taxes owed. As alleged in the complaint, the IRS projects that the tax loss from the returns prepared by Burden could exceed $1,000,000.

Over the past decade, the Justice Department’s Tax Division has obtained hundreds of injunctions to stop tax fraud promoters and dishonest tax return preparers. Information about these cases is available on the Justice Department website .

Related Materials:

United States v. Torrey Burden, et al.
Complaint (PDF)
 

The Justice Department has reached an agreement with the city of Memphis, Tenn., under the Americans with Disabilities Act (ADA) to improve physical accessibility for people with disabilities at Liberty Bowl Memorial Stadium, home of the AutoZone Liberty Bowl, Memphis Tigers and Southern Heritage Classic football games.

“Today’s agreement marks a new chapter for historic Liberty Bowl Memorial Stadium, which will permit all spectators, with and without disabilities, to attend college football games – both regular season and bowl games -- at the stadium,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division.

Under the settlement agreement, Memphis will install a total of 282 wheelchair spaces and an equal number of companion seats around the stadium at Row 25, and in the upper concourses on the home and away sides of the Liberty Bowl. The agreement requires installation of additional wheelchair spaces in seating areas renovated in the future, such as the suites and press boxes. The 282 wheelchair spaces will be dispersed vertically and horizontally throughout the Liberty Bowl, and will provide people in wheelchairs with lines of sight over standing spectators that are comparable to those offered to individuals without disabilities.

In addition, Memphis will ensure ADA compliance for concession stands, gates, elevators, suites and press boxes, ramps, and restrooms throughout the Liberty Bowl. Memphis will retain an architect to certify that the city has corrected each ADA violation. Memphis must report its progress to the United States.

Today’s agreement was reached under Title II of the ADA, which prohibits discrimination against individuals with disabilities by state and local governments. The Department will actively monitor the city’s compliance with the agreement, which will remain in effect for three years.

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 the City of Memphis 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).

Related Materials:

Liberty Bowl Settlement Agreement

BALTIMORE --Immigration Judge Phillip T. Williams 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 Jan. 25, 2013. 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 Williams in March 1995. Judge Williams received a bachelor of arts degree in 1978 from Temple University, a master of arts degree in 1981 from Howard University, and a juris doctorate in 1986 from Howard University School of Law. From 1997 to 2008, he was an assistant chief immigration judge. From 1995 to 1997, he served as an immigration judge in New York. From 1987 to 1995, Judge Williams was an attorney with Maggio & Kattar in Washington, D.C. From 1984 to 1986, he worked as a District of Columbia pre-trial services officer. Judge Williams is a member of the District of Columbia and Pennsylvania 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.

PNC Bank N.A. has agreed to pay the United States $7.1 million to settle claims under the False Claims Act that it failed to engage in prudent underwriting practices in connection with the issuance of loans guaranteed by the Small Business Administration (SBA), the Justice Department announced today. PNC has also agreed to take corrective action to prevent similar occurrences in the future. PNC is a national banking association located in Pittsburgh.

The SBA Act allows banks to partner with the SBA to make loans to qualified small businesses. Participants in the SBA’s Preferred Lenders Program, like PNC, have authority to make and close these loans without obtaining the prior approval of the SBA. SBA guaranteed 75 percent of the balance of the loans in question. Banks are required to exercise prudent lending standards when making loans under the Preferred Lenders Program.

In 2005, under the Preferred Lender Program, PNC issued 64 SBA-guaranteed loans for the purchase of 98 Uni-Marts stores located primarily in the mid-Atlantic region. The United States alleges that in connection with these loans, PNC relied upon unaudited financial statements without further verifying whether the information contained in the financial statements was accurate. Of the 64 SBA-guaranteed loans issued by PNC, 36 have defaulted, triggering SBA’s obligations to pay PNC 75 percent of the balance of the defaulted loans. In May 2008, Uni-Marts filed for bankruptcy under Chapter 11 of the U.S. Bankruptcy Code.

“Banks that are SBA preferred lenders have a duty to prudently guard the public funds they commit to borrowers,” said Stuart F. Delery, Principal Deputy Assistant Attorney General for the Civil Division of the Department of Justice. “The government will pursue vigorously lenders that fail to adequately safeguard public funds due to deficient lending standards.”

Principal Deputy Assistant Attorney General Delery thanked the Justice Department’s Civil Division, the SBA Office of General Counsel and the SBA Office of Inspector General for the collaboration that resulted in the settlement announced today. The claims settled by this agreement are allegations only; there has been no determination of liability.

The former program director and two former marketers for Miami-based mental health care company American Therapeutic Corporation (ATC) have been sentenced to prison for  their roles in a $205 million Medicare fraud and kickback scheme in which patients were forced to attend inappropriate treatment programs.

The sentences 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; Special Agent-in-Charge Michael B. Steinbach of the FBI’s Miami Field Office; and Special Agent-in-Charge Christopher Dennis of the Health and Human Services’ Office of Inspector General (HHS-OIG), Office of Investigations Miami office.

Miami-area residents Lydia Ward, 47, a former program director, and Hilario Morris, 47, a former marketer, were sentenced today by U.S. District Judge Patricia A. Seitz in Miami federal court to 99 months and 60 months in prison, respectively.  In addition to the prison term, Judge Seitz sentenced Ward and Morris each to serve three years of supervised release and ordered them to pay more than $34.1 million and $82.2 million in restitution, respectively, jointly and severally with their co-defendants.

Ward was convicted on Nov. 15, 2012, by a federal jury of conspiracy to commit health care fraud.  Morris was convicted on June 1, 2012, by a federal jury of conspiracy to pay illegal health care kickbacks.  Ward and Morris have been in federal custody since their convictions.

Former marketer Sandra Jimenez, 39, also from the Miami area, was sentenced to 36 months in prison yesterday, Jan. 24, 2013.  In addition to the prison term, Judge Seitz sentenced Jimenez to serve three years of supervised release and ordered her to pay $20.5 million in restitution, jointly and severally with her co-defendants.

On Jan. 17, 2012, Jimenez pleaded guilty to one count of conspiracy to commit health care fraud and one count of conspiracy to defraud the United States and to receive and pay health care kickbacks.

In pleading guilty, Jimenez admitted that she served as a marketer for ATC and American Sleep Institute (ASI).  ATC, a Florida corporation headquartered in Miami, operated purported partial hospitalization programs (PHPs) in seven different locations throughout South Florida and Orlando. A PHP is a form of intensive treatment for severe mental illness. Jimenez also admitted that she and co-conspirators used related company ASI to submit fraudulent Medicare claims. 

Additionally, Jimenez admitted she participated in a separate Medicare fraud scheme through Priority Home Health, a Miami home health agency that submitted fraudulent claims to Medicare for home health services. Jimenez and her co-conspirators recruited Medicare beneficiaries to Priority Home Health who did not qualify for the services.

According to the plea agreement, Jimenez’s participation in the ATC fraud and the Priority Home Health fraud resulted in $46 million in fraudulent billings to Medicare.

Evidence at Ward’s and Morris’ trials demonstrated that the defendants and their co-conspirators caused the submission of false and fraudulent claims to Medicare through ATC and ASI, and that ATC secured patients by paying kickbacks to assisted living facility owners and halfway house owners who would then steer patients to ATC. 

According to the evidence, Morris was a marketer for ATC from September 2004 through October 2010, when ATC closed its doors due to the federal case.  In that capacity, Morris acted as a liaison, maintaining relationships between ATC and those who were selling their patients to ATC.  Morris would physically pay the kickbacks throughout North Miami and Florida’s Broward County.  These patients, who attended ATC, were ineligible for the services billed to Medicare and did not receive them.  After Medicare paid the claims, some of the co-conspirators then laundered the Medicare money in order to create cash to pay the kickbacks for patients.

Evidence at trial revealed that Ward was a program director at ATC’s Ft. Lauderdale, Fla., center from November 2008 until ATC’s closing in October 2010.  The evidence showed Ward helped doctors at ATC sign patient files without reading them or seeing the patients, and that Ward and others would assist the owners of ATC in fabricating doctor notes, therapist notes and other documents to make it falsely appear in ATC’s patient files that patients were qualified for the individualized, specialized treatment.  Included in these false and fraudulent submissions to Medicare were claims for patients who were in the late stages of diseases causing permanent cognitive memory loss and patients who had substance abuse issues and were living in halfway houses.  These patients were ineligible for PHP treatments, and because they were forced by their assisted living facility owners and halfway house owners to attend ATC, they were not receiving treatment for the diseases they actually had.

ATC executives Lawrence Duran, Marianella Valera and Judith Negron were previously sentenced to 50 years, 35 years and 35 years in prison, respectively, for their roles in the fraud scheme. The 50- and 35-year sentences represent the longest federal sentences for health care fraud ordered to date in the United States.

ATC and Medlink pleaded guilty in May 2011 to conspiracy to commit health care fraud. ATC also pleaded guilty to conspiracy to defraud the United States and to pay and receive illegal health care kickbacks. On Sept. 16, 2011, the two corporations were sentenced to five years of probation per count and ordered to pay restitution of $87 million. Both corporations have been defunct since their owners were arrested in October 2010.  Dozens of individuals have been convicted at trial or pleaded guilty for their participation in the scheme, including doctors Mark Willner and Alberto Ayala, who were each sentenced to 10 years in prison.

Evidence at trial showed that the ATC scheme resulted in a total of $205 million in fraudulent Medicare billings.   

The cases were prosecuted by Senior Trial Attorney Jennifer L. Saulino and Trial Attorney Laura M.K. Cordova of the Justice Department Criminal Division’s Fraud Section and James V. Hayes, Assistant U.S. Attorney in the Southern District of Florida.  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. 

Manuel Ernesto Ortiz-Barraza, an independent financial consultant, was extradited to the United States today for his alleged role in a scheme to defraud the Export-Import Bank of the United States (Ex-Im Bank) of over $2.5 million, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney for the Western District of Texas Robert Pitman and Osvaldo L. Gratacos, Inspector General of the Ex-Im Bank.

Ortiz-Barraza, 56, was charged in an indictment unsealed on Oct. 19, 2011, in the Western District of Texas with one count of conspiracy to commit wire and bank fraud, three counts of wire fraud and one count of bank fraud for his alleged role in a scheme with several others to defraud the Ex-Im Bank.  Based on a provisional arrest warrant, Mexican authorities arrested Ortiz-Barraza in Mexico on Feb. 13, 2012, and he has been awaiting extradition to the United States, a process which was recently finalized by the Mexican courts.

According to the U.S. indictment and court documents, Ortiz-Barraza and his co-conspirators allegedly conspired to obtain Ex-Im Bank guaranteed loans through banks by creating false loan applications, false financial statements and other documents purportedly for the purchase and export of U.S. goods into Mexico.  Ortiz-Barraza and his co-conspirators allegedly falsified shipping records to support their claims of doing legitimate business and did not ship the goods that were guaranteed by the Ex-Im Bank.  After the loan proceeds were received, Ortiz-Barraza and his co-conspirators allegedly split the loan proceeds among themselves.  As a result of the alleged fraud, the conspirators’ loans defaulted, causing the Ex-Im Bank to pay claims to lending banks on a loss of over $2.5 million.

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

The Ex-Im Bank is an independent federal agency that helps create and maintain U.S. jobs by filling gaps in private export financing.  The Ex-Im Bank provides a variety of financing mechanisms to help foreign buyers purchase U.S. goods and services.

The case is being prosecuted by Senior Litigation Counsel Patrick Donley and Trial Attorney William Bowne of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Steven Spitzer of the Western District of Texas, El Paso Division.  The case was investigated by the Ex-Im Bank Office of Inspector General, Homeland Security Investigations in El Paso, under the leadership of Acting Special Agent in Charge Dennis Ulrich; Internal Revenue Service-Criminal Investigation in Washington, D.C., under the leadership of Special Agent in Charge Rick A. Raven; and the U.S. Postal Inspection Service in Washington, D.C., under the leadership of Inspector in Charge Daniel S. Cortez.  Substantial assistance was provided by the U.S. Marshals Service and the Criminal Division’s Office of International Affairs in Washington, D.C.  The Department of Justice is particularly grateful to the government of Mexico for their assistance in this matter. 

A federal judge in Cleveland today sentenced William R. Herder of Bellville, Ohio, to 20 months in prison for tax crimes, Assistant Attorney General for the Justice Department’s Tax Division Kathryn Keneally, U.S. Attorney for the Northern District of Ohio Stephen M. Dettelbach and Special Agent in Charge, Internal Revenue Service (IRS) - Criminal Investigation, Cincinnati Field Office, Darryl K. Williams announced. U.S. District Judge Donald C. Nugent also ordered Herder to pay restitution to the IRS of $149,238 plus interest and penalties.

Herder pleaded guilty in October 2012 to corruptly endeavoring to obstruct the administration of the tax laws and currency structuring. According to documents filed in the case, Herder, an independent insurance salesman for Aflac Inc., failed to file timely and accurate income tax returns for the years 2000-2009 despite earning substantial insurance commissions and receiving warnings and notices from the IRS. Herder filed returns for the years 2010 and 2011 on which he reported that he owed taxes to the government, but failed to pay the almost $50,000 in taxes that he owed for those years.

According to the plea agreement and indictment filed in this case, to prevent the IRS from collecting his unpaid taxes, Herder attempted to conceal his assets and income. In 2004, Herder formed two entities in Nevada – one for the purpose of hiding his automobiles and another for the purpose of hiding his insurance business. Herder also began converting his insurance commission checks to cash and paying his expenses in cash to prevent the IRS from collecting his taxes from his bank account.

The plea agreement and indictment filed in this case also stated that Herder submitted numerous obstructive letters and documents to the IRS, Aflac and his credit union in an effort to prevent the IRS from assessing and collecting his taxes. In these letters, Herder falsely claimed, among other things, that the tax laws were not applicable to him. In 2005, Herder attempted to pay his taxes with a fake financial instrument called an “International Bill of Exchange.”

Last year, William R. Herder’s father, William A. Herder, was found guilty at trial of tax evasion, corruptly endeavoring to obstruct the administration of the tax laws and five counts of failing to file tax returns and was sentenced to 37 months in prison. William A. Herder also sold insurance for Aflac Inc. as an independent contractor. Another insurance salesman, Thomas Mitchell, the uncle of William R. Herder, also pleaded guilty to failing to file a tax return in 2012. William R. Herder has admitted in court papers that he, his father and his uncle participated in a tax defier “program” promoted by convicted felon Joseph Flickinger.

Assistant Attorney General Keneally commended the efforts of Special Agents of IRS – Criminal Investigation, who investigated the case, and Tax Division Trial Attorneys Melissa S. Siskind and Jeffrey A. McLellan, who prosecuted the case.

Connie M. Knight, 46, previously of Belle Chasse, La., pleaded guilty in federal court in New Orleans today to three felony criminal charges and one misdemeanor criminal charge for creating false identification documents an impersonating a federal official, announced Ignacia S. Moreno, Assistant Attorney General of the Justice Department’s Environment and Natural Resources Division, and Dana Boente, U.S. Attorney for the Eastern District of Louisiana. 

According to the plea agreement, in the wake of the Deepwater Horizon oil spill, Knight impersonated a high-ranking Occupational Safety and Health Administration (OSHA) hazardous waste safety instructor and inspector in order to collect money from individuals who hoped to work on the cleanup effort that followed the spill.  The plea agreement describes Knight’s methods, which included creating a false federal identification badge declaring that she was an “OSHA Master Level V Instructor and Inspector.”  In reality, OSHA has no such designation.  Knight also created false federal identification badges for her employees, who believed that they were working for OSHA.  The employees were residents of Southeast Asian fishing communities in Southern Louisiana, and provided Knight a way to access those communities.

From the time of the spill through the end of 2010, many fisheries were closed and Gulf fishermen were seeking other means of employment.  Knight held fake OSHA training seminars and assured attendees that they would receive lucrative employment working on the Deepwater Horizon oil spill cleanup once they paid for and completed her course.  Knight did not, however, actually have any connection to the cleanup effort. 

Court documents also describe the training seminars themselves.  Knight required each attendee to pay between $150 and $400 cash to enter a class. She claimed her classes satisfied the various safety requirements that all individuals were to complete in order to be employed at a Deepwater Horizon hazardous waste cleanup site.  Knight’s classes lasted as little as two hours, while the legitimate certifications would take at least six days of classroom training and three days of on-site training. Though many of her attendees were Vietnamese, Laotian or Cambodian, Knight spoke only English at the classes, and all materials were in English.  At least some attendees later gained access to hazardous waste cleanup sites based on the fraudulent certifications created by Knight.

Producing fraudulent federal identification documents carries a maximum sentence of 15 years in prison and a fine of $250,000. Possessing a fraudulent federal identification document carries a maximum sentence of one year in prison and a fine of $100,000.  The two counts of falsely impersonating a federal employee each carry a maximum sentence of three years in prison and a fine of $250,000.

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

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

The owners of three Miami-area assisted living facilities and an affiliated psychologist were sentenced to prison today in connection with a health care fraud scheme, involving now-defunct Miami-area health provider Health Care Solutions Network Inc. (HCSN), in which Medicare was billed for mental health treatments that were unnecessary or not provided.

The sentences 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, Acting 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 Cecilia M. Altonaga sentenced Serena Joslin, 32, of Looneyville, W.Va., to 63 months in prison, following her previous guilty plea to conspiracy to commit health care fraud.  Raymond Rivero, 55, Daniel Martinez, 46, and Ivon Perez, 50, all of Miami, were each sentenced to 28 months in prison.  All three had previously pleaded guilty to conspiracy to violate the anti-kickback statute.

According to court documents, HCSN operated community mental health centers both in Miami and North Carolina, including partial hospitalization programs (PHP) – a form of intensive treatment for severe mental illness.  HCSN obtained Medicare beneficiaries to attend HCSN for purported PHP treatment that was unnecessary and, in many instances, not provided. 

In Miami, HCSN obtained beneficiaries by paying kickbacks to owners and operators of assisted living facilities (ALF) or by otherwise recruiting them from the facilities and from nursing homes.  Rivero, Martinez and Perez admitted during their guilty pleas to referring Medicare beneficiaries to HCSN in exchange for cash bribes.  Rivero, former owner of Miami-based God Is First ALF; Martinez, former owner of Homestead, Fla.-based Mi Renacer ALF; and Perez, former owner of Homestead-based Kayleen and Denis Care Corp., are no longer permitted to operate such facilities as a condition of their guilty pleas.

According to court documents, ALF residents referred to HCSN by Rivero, Martinez and Perez were not qualified to be placed in PHP and were only selected because they had Medicare or state of Florida Medicaid benefits.  In some cases, ALF patients suffered from dementia, Alzheimer’s disease or mental retardation, or were otherwise unable to benefit from mental health services.

According to court documents, Joslin, a licensed psychologist, was hired by HCSN in North Carolina in April of 2010 as a clinical coordinator and later promoted to clinical director. In those roles, she conspired with other HCSN employees to fabricate medical documents to substantiate alleged PHP treatment that was medically unnecessary and, in many instances, not even provided to the beneficiaries.  Joslin admitted that many of the HCSN patients were unqualified for the PHP program because they suffered from conditions such as mental retardation and dementia, and that she directed therapists to fabricate medical records to support HCSN’s fraudulent billing to the Medicare program.  Joslin was also required to surrender her North Carolina license to provide mental health treatment as part of her plea agreement.

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

In addition to the prison terms, Judge Altonaga sentenced Joslin, Rivero, Martinez and Perez each to serve three years of supervised release, and ordered them to pay $4,464,728; $90,896; $76,358; and $89,245 in restitution, respectively.

The cases are being prosecuted by Special Trial Attorney William Parente and Trial Attorney Allan J. Medina of the Criminal Division’s Fraud Section.  The cases were investigated by the FBI and HHS-OIG and were brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida.

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

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

A former co-owner of a U.S. civilian contractor company was sentenced today in San Antonio to serve 30 months in prison for falsifying official documents in connection with Iraq reconstruction government contracts, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney Robert Pitman for the Western District of Texas.

Jill Ann Charpia, 33, formerly of San Antonio and currently of Colorado, was sentenced today by U.S. District Judge Orlando L. Garcia in the Western District of Texas.  In addition to her prison term, Charpia was sentenced to serve three years of supervised release and ordered to pay $920,000 plus interest in restitution to the United States. 

According to court documents, from 2008 through 2009, Charpia was the co-owner of Sourcing Specialist LLC, a privately owned company that contracted with the U.S. government to provide services in Iraq.  In September 2008, she contracted to provide a turn-key housing facility located outside Iraq’s International Zone to facilitate the introduction of multi-national firms desiring to develop business opportunities in Iraq.  That same month, Charpia signed and submitted to the Department of Defense (DOD) Joint Contracting Command Iraq/Afghanistan, for payment through the contract, a false invoice in the amount of $1,270,075 purportedly for mobilization costs.  She followed up with two invoices, one representing that she had paid $700,000 for the rental of two villas in Baghdad, and the other representing that she had paid $570,075 on the purchase of three armored vehicles from an Iraqi company.  In October 2008, as a result of her false and fraudulent statements, DOD caused $1,270,075 to be wired to Charpia’s bank account.  Charpia admitted that she fabricated both invoices and forged the signatures on the documents.  She also admitted that she did not purchase any armored vehicles and paid only half the submitted cost for the villas. 

This case is being prosecuted by Special Trial Attorney Mark Grider of the Criminal Division’s Fraud Section, on detail from the Special Inspector General for Iraq Reconstruction (SIGIR), and by Assistant U.S. Attorney Judith A. Patton of the Western District of Texas.  The case is being investigated by SIGIR, Internal Revenue Service-Criminal Investigation and the Major Procurement Fraud Unit of the U.S. Army Criminal Investigation Command.

David Coleman Headley, a U.S. citizen partly of Pakistani descent, was sentenced today to 35 years in prison for a dozen federal terrorism crimes relating to his role in planning the November 2008 terrorist attacks in Mumbai, India, and a subsequent proposed attack on a newspaper in Denmark. Headley pleaded guilty in March 2010 to all 12 counts that were brought against him following his arrest in October 2009 as he was about to leave the country. Immediately after his arrest, Headley began cooperating with authorities.

Headley, 52, was ordered to serve 35 years, followed by five years of supervised release by U.S. District Judge Harry Leinenweber. There is no federal parole and defendants must serve at least 85 percent of their sentence. “Mr. Headley is a terrorist,” Judge Leinenweber said in imposing the sentence.

“There is little question that life imprisonment would be an appropriate punishment for Headley’s incredibly serious crimes but for the significant value provided by his immediate and extensive cooperation,” the government argued in seeking a sentence of 30 to 35 years.

In pleading guilty and later testifying for the government at the trial of a co-defendant, Headley admitted that he attended training camps in Pakistan operated by Lashkar e Tayyiba, a terrorist organization operating in that country, on five separate occasions between 2002 and 2005. In late 2005, Headley received instructions from three members of Lashkar to travel to India to conduct surveillance, which he did five times leading up to the Mumbai attacks in 2008 that killed approximately 164 people, including six Americans, and wounded hundreds more. Headley’s plea agreement in March 2010 stated that he “has provided substantial assistance to the criminal investigation, and also has provided information of significant intelligence value.”

In consideration of Headley’s past cooperation and anticipated future cooperation, which would include debriefings for the purpose of gathering intelligence and national security information, as well as testifying in any foreign judicial proceedings held in the United States by way of deposition, video-conferencing or letters rogatory, the Attorney General of the United States authorized the U.S. Attorney’s Office in Chicago not to seek the death penalty.

“Today’s sentence is an important milestone in our continuing efforts to hold accountable those responsible for the Mumbai terrorist attacks and to achieve justice for the victims. Our investigations into Mumbai attacks and the Denmark terror plot are ongoing and active. I thank the many agents, analysts and prosecutors responsible for this investigation and prosecution,” said Lisa Monaco, Assistant Attorney General for National Security.

Headley was convicted of conspiracy to bomb public places in India; conspiracy to murder and maim persons in India; six counts of aiding and abetting the murder of U.S. citizens in India; conspiracy to provide material support to terrorism in India; conspiracy to murder and maim persons in Denmark; conspiracy to provide material support to terrorism in Denmark; and conspiracy to provide material support to Lashkar.

According to Headley’s guilty plea and testimony, he attended the following training camps operated by Lashkar: a three-week course starting in February 2002 that provided indoctrination on the merits of waging jihad; a three-week course starting in August 2002 that provided training in the use of weapons and grenades; a three-month course starting in April 2003 that taught close combat tactics, the use of weapons and grenades, and survival skills; a three-week course starting in August 2003 that taught counter-surveillance skills; and a three-month course starting in December 2003 that provided combat and tactical training.

Mumbai Terror Attacks

After receiving instructions in late 2005 to conduct surveillance in India, Headley changed his given name from Daood Gilani in February 2006 in Philadelphia to facilitate his activities on behalf of Lashkar by portraying himself in India as an American who was neither Muslim nor Pakistani. In the early summer of 2006, Headley and two Lashkar members discussed opening an immigration office in Mumbai as a cover for his surveillance activities.

Headley eventually made five extended trips to Mumbai — in September 2006, February and September 2007, and April and July 2008 — each time making videotapes of various potential targets, including those attacked in November 2008. Before each trip, Lashkar members and associates instructed Headley regarding specific locations where he was to conduct surveillance. After each trip, Headley traveled to Pakistan to meet with Lashkar members and associates, report on the results of his surveillance, and provide the surveillance videos.

Before the April 2008 surveillance trip, Headley and co-conspirators in Pakistan discussed potential landing sites in Mumbai for a team of attackers who would arrive by sea. Headley returned to Mumbai with a global positioning system device and took boat trips around the Mumbai harbor and entered various locations into the device.

Between Nov. 26 and 28, 2008, 10 attackers trained by Lashkar carried out multiple assaults with firearms, grenades and improvised explosive devices against multiple targets in Mumbai, including the Taj Mahal and Oberoi hotels, the Leopold Café, the Chabad House and the Chhatrapati Shivaji Terminus train station, each of which Headley had scouted in advance, killing approximately 164 victims and wounding hundreds more.

The six Americans killed during the siege were Ben Zion Chroman, Gavriel Holtzberg, Sandeep Jeswani, Alan Scherr, his daughter Naomi Scherr and Aryeh Leibish Teitelbaum.

In March 2009, Headley made a sixth trip to India to conduct additional surveillance, including of the National Defense College in Delhi, and of Chabad Houses in several cities.

Denmark Terror Plot

Regarding the Denmark terror plot, Headley admitted and testified that in early November 2008, he was instructed by a Lashkar member in Pakistan, to conduct surveillance of the Copenhagen and Aarhus offices of the Danish newspaper Morgenavisen Jyllands-Posten in preparation for an attack in retaliation for the newspaper’s publication of cartoons depicting the Prophet Mohammed. After this meeting, Headley informed co-defendant Abdur Rehman Hashim Syed (Abdur Rehman), also known as “Pasha,” of his assignment. Abdur Rehman told Headley words to the effect that if Lashkar did not go through with the attack, Abdur Rehman knew someone who would. Although not identified by name at the time, Headley later learned this individual was co-defendant Ilyas Kashmiri. Abdur Rehman previously told Headley that he was working with Kashmiri and that Kashmiri was in direct contact with a senior leader of Al Qaeda

While in Chicago in late December 2008 and early January 2009, Headley exchanged emails with Abdur Rehman to continue planning for the attack and to coordinate his travel to Denmark to conduct surveillance. In January 2009, at Lashkar’s direction, Headley traveled from Chicago to Copenhagen to conduct surveillance of the Jyllands-Posten newspaper offices in Copenhagen and Aarhus and scouted and videotaped the surrounding areas.

In late January 2009, Headley met separately with Abdur Rehman and a Lashkar member in Pakistan, discussed the planned attack on the newspaper, and provided them with videos of his surveillance. About the same time, Abdur Rehman provided Headley a video produced by the media wing of Al Qaeda in approximately August 2008, which claimed credit for the June 2008 attack on the Danish embassy in Islamabad, Pakistan, and called for further attacks against Danish interests to avenge the publication of the offending cartoons.

In February 2009, Headley and Abdur Rehman met with Kashmiri in the Waziristan region of Pakistan, where they discussed the video surveillance and ways to carry out the attack. Kashmiri told Headley that he could provide manpower for the operation and that Lashkar’s participation was not necessary. In March 2009, a Lashkar member advised Headley that Lashkar put the newspaper attack on hold because of pressure resulting from the Mumbai attacks. In May 2009, Headley and Abdur Rehman again met with Kashmiri in Waziristan. Kashmiri told Headley to meet with a European contact who could provide Headley with money, weapons and manpower for the Denmark attack, and relate Kashmiri’s instructions that this should be a suicide attack and the attackers should prepare martyrdom videos beforehand. Kashmiri also stated that the attackers should behead captives and throw their heads on to the street in Copenhagen to heighten the response from Danish authorities, and added that the “elders,” whom Headley understood to be Al Qaeda leadership, wanted the attack to happen as soon as possible.

In late July and early August 2009, Headley traveled from Chicago to various places in Europe, and met with and attempted to obtain assistance from Kashmiri’s contacts and, while in Copenhagen, he made approximately 13 additional surveillance videos. When he returned to the United States on Aug. 5, 2009, Headley falsely told a U.S. Customs and Border Protection inspector in Atlanta that he had visited Europe for business reasons. On Oct. 3, 2009, Headley was arrested at O’Hare International Airport in Chicago, intending ultimately to travel to Pakistan to deliver the approximately 13 surveillance videos to Abdur Rehman and Kashmiri.

One of Headley’s co-defendants, Tahawwur Rana, 52, of Chicago, was sentenced last week to 14 years in prison for conspiracy to provide material support to the Denmark terror plot and providing material support to Lashkar. Headley testified for the government at Rana’s trial in June 2011.

The government is being represented by Assistant U.S. Attorneys Daniel Collins and Sarah E. Streicker, with assistance from the Counterterrorism Section of the Justice Department’s National Security Division. Federal prosecutors in Los Angeles have worked on a broader investigation of the Mumbai attacks. The investigation was conducted by the Chicago Joint Terrorism Task Force, led by the Chicago Office of the FBI, with assistance from FBI offices in Los Angeles, Philadelphia and Washington, D.C., as well as both U.S. Customs and Border Protection and the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations.

A federal grand jury in Salt Lake City returned an indictment Wednesday afternoon charging Gerrit Timmerman III, 70, of Midvale, Utah, and Carol Sing, 73, of Henderson, Nevada, with one count of conspiracy to defraud the United States. The indictment was announced by Kathryn Keneally, Assistant Attorney General for the Justice Department’s Tax Division and U.S. Attorney for the District of Utah David B. Barlow.

According to the indictment, from April 23, 2004, through March 5, 2007, Timmerman and Sing conspired to defraud the United States by marketing corporations sole as a part of a scheme to evade the assessment and payment of federal income taxes. Timmerman and Sing falsely told their clients that so-called “corporations sole” were exempt from United States income tax laws, had no obligation to file tax returns, and had no obligation to apply for tax exempt status. They further claimed that individuals could render their own income non-taxable by assigning it to the corporation sole, could draw a tax-free stipend from their corporation sole, and could render property immune from Internal Revenue Service (IRS) collection activity by transferring property to the corporation sole. During the life of the conspiracy, Timmerman and Sing were responsible for the creation of approximately 90 corporations sole; at the time their corporation soles were created, these clients had outstanding federal income tax assessments totaling at least $5,000,000.

An indictment is not a finding of guilt. Individuals charged in indictments are presumed innocent until proven guilty beyond a reasonable doubt. If convicted, Timmerman and Sing each face a maximum of five years in prison and a fine of up to $250,000.

The case is being investigated by IRS-Criminal Investigation and is being prosecuted by Tax Division Trial Attorneys Michael Romano and Dennis Kihm.

Stephen Thomas of York, Penn., was sentenced today in U.S. District Court for the District of Columbia for tax evasion, the Justice Department and Internal Revenue Service (IRS) announced today. U.S. District Judge Amy Berman Jackson sentenced Thomas to 18 months in prison and ordered him to pay $154,362 in restitution to the IRS.

On Sept. 11, 2012, Thomas pleaded guilty to attempting to evade his 2006 federal income taxes. According to court records, between 2002 and 2004, in the District of Columbia, Thomas formed multiple entities whose names contained the initials ECG, which stood for ESOP Capital Group. ECG purported to provide financial, business and other management services to companies that were interested in creating ESOPs, which are employee stock ownership plans. In or about 2005 and 2006, Thomas, through ECG, contracted to provide such services to two companies in Maine.

As part of his guilty plea, Thomas admitted that he failed to file his 2005 through 2007 individual income tax returns and failed to file 2005 through 2007 corporate income tax returns for ECG. Thomas further admitted that he engaged in a series of affirmative acts of evasion during 2005 through 2007, including concealing his income by moving earnings from the Maine companies into bank accounts in the name of his wife, withdrawing cash on a weekly basis which totaled more than $400,000, using cashier’s checks, and titling his primary residence in the name of his wife. Thomas further admitted that he failed to report at least $573,785 of income and that his tax evasion during 2005 through 2007 resulted in a tax loss to the IRS of at least $154,362.

Kathryn Keneally, Assistant Attorney General for the Justice Department’s Tax Division, commended the efforts of a special agent of IRS-Criminal Investigation and an investigator from Department of Labor, Employee Benefits Security Administration, who investigated the case, and Trial Attorneys Jessica Moran and Jeffrey Bender of the Justice Department’s Tax Division, who prosecuted the case.

WASHINGTON – A former resident of New Jersey was sentenced today to serve 42 months in prison for her role in trafficking the identities of Puerto Rican U.S. citizens and corresponding identity documents, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney Rosa E. Rodríguez-Vélez of the District of Puerto Rico; Director John Morton of U.S. Immigration and Customs Enforcement (ICE), which oversees Homeland Security Investigations (HSI); Chief Postal Inspector Guy J. Cottrell of the U.S. Postal Inspection Service (USPIS); Gentry Smith, Acting Director of the U.S. State Department’s Diplomatic Security Service (DSS); and Internal Revenue Service-Criminal Investigation (IRS-CI) Chief Richard Weber.

Martina Montero-de-Ortiz, 52, formerly of Elizabeth, N.J., was sentenced by U.S. District Judge Gustavo A. Gelpí in the District of Puerto Rico.  In addition to Montero-de-Ortiz’s prison term, Judge Gelpí ordered her to forfeit $33,250 in illegal proceeds and ordered the removal of Montero-de-Ortiz from the United States to the Dominican Republic after the completion of her sentence.

 On Aug. 15, 2012, Montero-de-Ortiz pleaded guilty in Puerto Rico to one count of conspiracy to commit identification fraud and one count of conspiracy to commit alien smuggling for financial gain.

Montero-de-Ortiz was charged in a superseding indictment returned by a federal grand jury in Puerto Rico on March 22, 2012.  To date, a total of 53 individuals have been charged for their roles in the identity trafficking scheme, and 25 defendants have pleaded guilty.

Court documents allege that individuals located in the Savarona area of Caguas, Puerto Rico (Savarona suppliers), obtained Puerto Rican identities and corresponding identity documents.  Other conspirators located in various cities throughout the United States (identity brokers) allegedly solicited customers and sold Social Security cards and corresponding Puerto Rico birth certificates for prices ranging from $700 to $2,500 per set.  The superseding indictment alleges that identity brokers ordered the identity documents from Savarona suppliers, on behalf of the customers, by making coded telephone calls.  The conspirators are charged with using text messages, money transfer services and express, priority or regular U.S. mail to complete their illicit transactions.

Court documents allege that some of the conspirators assumed a Puerto Rican identity themselves and used that identity in connection with the trafficking operation.  Their customers allegedly generally obtained the identity documents to assume the identity of Puerto Rican U.S. citizens and to obtain additional identification documents, such as legitimate state driver’s licenses.  Some customers allegedly obtained the documents to commit financial fraud and attempted to obtain a U.S. passport.

According to court documents, various identity brokers were operating in Rockford, Ill.; DeKalb, Ill.; Aurora, Ill.; Seymour, Ind.; Columbus, Ind.; Indianapolis; Hartford, Conn.; Clewiston, Fla.; Lilburn, Ga.; Norcross, Ga.; Salisbury, Md.; Columbus, Ohio; Fairfield, Ohio; Dorchester, Mass.; Lawrence, Mass.; Salem, Mass.; Worcester, Mass.; Grand Rapids, Mich.; Nebraska City, Neb.; Elizabeth, N.J.; Burlington, N.C.; Hickory, N.C.; Hazelton, Pa.; Philadelphia; Houston; Abingdon, Va.; Albertville, Ala.; and Providence, R.I.

Montero-de-Ortiz admitted that she trafficked the identities of Puerto Rican U.S. citizens and corresponding identity documents in New Jersey.  Montero-de-Ortiz is the 11th defendant to be sentenced in this case.

Another defendant involved in the scheme, Vidal Contreras-Galicia, 30, formerly of Ft. Wayne, Ind., pleaded guilty yesterday before U.S. District Judge Gelpi to one count of conspiracy to commit identification fraud.  As part of his plea agreement, Contreras-Galicia agreed to forfeit $3,000 in illegal proceeds as well as deportation to Mexico after serving his sentence.  According to court documents, Contreras-Galicia admitted that he trafficked the identities of Puerto Rican U.S. citizens and corresponding identity documents in Indiana and that he used a Puerto Rican identity himself to commit financial fraud.  At sentencing, Contreras-Galicia faces a maximum sentence of 15 years in prison and a maximum fine of $250,000.

The charges are the result of Operation Island Express, an ongoing, nationally-coordinated investigation led by the ICE-HSI Chicago Office and USPIS, DSS and IRS-CI offices in Chicago, in coordination with the ICE-HSI San Juan Office and the DSS Resident Office in Puerto Rico.  The Illinois Secretary of State Police; Elgin, Ill., Police Department; Seymour, Ind., Police Department; and Indiana State Police provided substantial assistance.  The ICE-HSI Assistant Attaché office in the Dominican Republic and International Organized Crime Intelligence and Operations Center (IOC-2) as well as various ICE, USPIS, DSS and IRS-CI offices around the country provided invaluable assistance.

The case is being prosecuted by Trial Attorneys James S. Yoon, Hope S. Olds, Courtney B. Schaefer and Christina Giffin of the Criminal Division’s Human Rights and Special Prosecutions Section, with the assistance of Acting Assistant Deputy Chief Jeannette Gunderson of the Criminal Division’s Asset Forfeiture and Money Laundering Section, and the support of the U.S. Attorney’s Office for the District of Puerto Rico.  The U.S. Attorney’s Offices in the Northern District of Illinois, Southern District of Indiana, District of Connecticut, District of Massachusetts, District of Nebraska, Middle District of North Carolina, Southern District of Ohio, District of Rhode Island, Southern District of Texas and Western District of Virginia provided substantial assistance.

Potential victims and the public may obtain information about the case at: www.justice.gov/criminal/vns/caseup/beltrerj.html.  Anyone who believes their identity may have been compromised in relation to this investigation may contact the ICE toll-free hotline at 1-866-DHS-2ICE (1-866-347-2423) and its online tip form at www.ice.gov/tipline.  Anyone who may have information about particular crimes in this case should also report it to the ICE tip line or website.

Anyone who believes that they have been a victim of identity theft, or wants information about preventing identity theft, may obtain helpful information and complaint forms on various government websites including the Federal Trade Commission ID Theft Website, www.ftc.gov/idtheft.  Additional resources regarding identity theft can be found at www.ojp.usdoj.gov/ovc/pubs/ID_theft/idtheft.html; www.ssa.gov/pubs/10064.html;  www.fbi.gov/about-us/investigate/cyber/identity_theft; and www.irs.gov/privacy/article/0,,id=186436,00.html.

A former Miami HIV infusion clinic director was sentenced today to serve 70 months in prison for his role in a $26.2 million HIV infusion fraud scheme, announced Assistant Attorney General Lanny Breuer of the Criminal Division, U.S. Wifredo A. Ferrer of the Southern District of Florida, Acting Special Agent in Charge  Michael B. Steinbach of the FBI’s Miami Field Office and Special Agent in Charge Christopher B. Dennis of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG), Office of Investigations Miami office.
 
Enrique Gonzalez, 67, formerly of Miami, was sentenced by U.S. District Judge Cecilia M. Altonaga in the Southern District of Florida.  In addition to his prison term, Judge Altonaga sentenced Gonzalez to serve three years of supervised release and ordered him to pay $17,590,896 in restitution to HHS.

On Nov. 13, 2012, Gonzalez pleaded guilty to one count of conspiracy to defraud the United States, to cause the submission of false claims, and to pay health care kickbacks, and one count of conspiracy to commit health care fraud.

Gonzalez admitted that between August 2002 and March 2004, he conspired with co-defendant Ronald Harris, a Miami physician, and alleged co-conspirators to operate Physicians Med-Care and Physicians Health (together the “Physicians Clinics”), two Miami HIV infusion clinics.  According to court documents, the Physicians Clinics were owned and controlled by alleged co-conspirators Carlos Benitez and his brother Luis Benitez.  The Physicians Clinics purported to specialize in treating patients with HIV, but were operated for the sole purpose of committing Medicare fraud, according to court documents.  Gonzalez was a director of Physicians Med-Care and, at the direction of his co-conspirators, was responsible for the finances of the Physicians Clinics.
 
Gonzalez admitted that he agreed with his co-conspirators to handle the finances for the Physicians Clinics, moving the money paid by the Medicare program out of the Physicians Clinics’ accounts and into accounts owned and controlled by his co-conspirators.  According to court documents, Harris signed blank checks that Gonzalez used to transfer funds to various Benitez-owned entities and others, as directed by his co-conspirators.  In addition, Gonzalez agreed to provide cash to various co-conspirators at the Physicians Clinics to be used to pay bribes and kickbacks to the Medicare beneficiaries in return for those beneficiaries allowing the Physicians Clinics to bill the Medicare program for HIV infusion services that were not medically necessary and often not provided.

Gonzalez admitted that during his association with Physicians Med-Care, the clinic billed the Medicare program approximately $24.5 million in HIV infusion therapy claims, for which the clinic received $16.7 million in payments.  Gonzalez also admitted that during his time with Physicians Health, the clinic billed Medicare approximately $1.7 million and received approximately $800,000 in payment from the Medicare program for fraudulent services. 

Gonzalez was a fugitive from justice from the time of his indictment in 2008, until he was located and detained in Peru in late 2011.  Gonzalez was extradited to the United States in July of 2012.  Gonzalez’ daughter, Carmen Gonzalez, was indicted in a related case and is currently a fugitive. 

Co-defendant Harris pleaded guilty on Aug. 26, 2008, to one count of conspiracy to defraud the United States, to cause the submission of false claims and to pay health care kickbacks; one count of conspiracy to commit health care fraud; and three counts of submitting false claims to the Medicare program.  Harris pleaded guilty in connection with his role as the medical director for the Physicians Clinics.  On Nov. 4, 2008, Harris was sentenced to serve 84 months in prison for his role in the scheme. 

Carlos and Luis Benitez and Thomas McKenzie were charged separately with health care fraud and money laundering crimes in an indictment unsealed on June 11, 2008.  According to the separate indictment, the defendants provided the money and staff necessary to open the Physicians Clinics, the Medicare patients that the clinics needed to bill the Medicare program and transportation for the HIV patients who visited the clinics.  Carlos and Luis Benitez and McKenzie were charged for their role in committing approximately $109 million in HIV infusion fraud and money laundering through the Physicians Clinics and nine other HIV infusion clinics. 

On Sept. 18, 2008, McKenzie pleaded guilty to one count of conspiracy to commit health care fraud and one count of submitting false claims to the Medicare program, and admitted to his role in a $119 million HIV infusion fraud scheme.  On Dec. 18, 2008, McKenzie was sentenced to serve 14 years in prison.

Carlos and Luis Benitez are also fugitives.  Anyone with information regarding the whereabouts of the fugitives is urged to contact HHS-OIG fugitive reporting phone line at 888-476-4453. 
 
The defendants who have not been convicted are presumed innocent unless and until proven guilty.

The Physicians Med-Care and Physicians Health case is being prosecuted by Trial Attorney N. Nathan Dimock of the Criminal Division’s Fraud Section.  The case was investigated by the FBI and the DHS Office of Inspector General.

The case was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida.  The Department also thanks the Peruvian National Police Interpol Unit for their assistance.

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.

Linda Weston, her daughter and three co-defendants are charged in a 193-count indictment, unsealed today, with racketeering, murder in aid of racketeering, hate crimes, sex trafficking, forced labor, theft, fraud and other crimes. The indictment alleges that Weston and her associates carried out a racketeering enterprise that targeted victims with mental disabilities as part of a scheme to steal disability payments from the victims and the Social Security system. As part of the scheme, Weston persuaded each victim to make her the designated recipient of their Social Security disability payments in exchange for the promise of a comfortable place to live. Once appointed as the designated recipient of disability payments, Weston, aided by the co-defendants, subjected the victims to subhuman conditions of captivity.

According to the indictment, the defendants beat the victims, kept them captive in locked closets, basements and attics, deprived them of adequate food and medical care, and moved them between Philadelphia, Pennsylvania, Texas, Virginia and Florida in order to further the scheme and evade law enforcement. According to the indictment, some of the victims endured this abuse for years, until Oct. 15, 2011, when Philadelphia Police Department officers rescued them from the sub-basement of an apartment building in the city’s Tacony section.

Today’s indictment was announced at a press conference by U.S. Attorney for the Eastern District of Pennsylvania Zane David Memeger, FBI Acting Special Agent-in-Charge John Brosnan, Special Agent-in-Charge Michael McGill with the Social Security Administration’s Office of Inspector General and Philadelphia Police Commissioner Charles Ramsey.

Along with Weston and her daughter Jean McIntosh, the indictment charges Weston’s paramour, Gregory Thomas Sr., Eddie Wright and Nicklaus Woodard. According to the indictment, the defendants used isolation, intimidation, threats of violence and violence to control the victims with mental disabilities and each defendant had a role in the racketeering enterprise:

?? Linda Weston was the leader and organizer of the enterprise that operated from at least the fall of 2001 through October of 2011. She enticed all of the victims into coming to live with the enterprise and controlled all aspects of their captivity.

?? Jean McIntosh was also a leader of the enterprise who acted as her mother’s right hand woman. She assisted in confining, controlling, disciplining, housing and transporting the victims.

?? Gregory Thomas Sr. assisted in obtaining, confining, controlling, housing and transporting the victims. He installed locks on the doors and windows of every residence where the victims were kept to prevent them from escaping.

?? Eddie Wright assisted in confining, controlling, housing and transporting the victims.

?? Nicklaus Woodard assisted in confining, controlling and disciplining the victims.

The indictment charges that in confining the victims, the defendants practiced what is described as “abusive control and confinement techniques” in which the defendants:

·          Confined the victims to locked basements, rooms, closets, attics and apartments;

·          Sedated the victims by putting drugs in the food and drink served to them by Weston and others, at Weston’s direction;

·          Subdued the victims by serving them a low calorie, high starch diet consisting exclusively of Ramen noodles, beans and stew and generally limited them to, at most, one meal a day;

·          Punished the victims by slapping, punching, kicking, stabbing, burning and hitting them with closed hands, belts, sticks, bats and hammers or other objects, including the butt of a pistol, when the victims tried to escape, stole food or otherwise protested their confinement and treatment.

The indictment alleges that Weston’s use of these techniques caused the deaths of two of the victims. For example, in 2002, Weston met M.L. and lured her to come live with the family. M.L. was forced to cook, clean, wash clothes and babysit without compensation. M.L. was beaten when she tried to escape or when she begged for food and was not provided with any medical attention for her injuries. When Weston moved the enterprise to Virginia in 2008, M.L. died of bacterial meningitis and starvation. Weston allegedly ordered other members of the household to move M.L.’s body to a bedroom and stage the scene before calling law enforcement and the next day the family left for Philadelphia. In addition, in April 2005, Weston and Thomas allegedly targeted victim D.S. who they saw standing on a street corner. They brought D.S. to the WF home at 2211 Glenview Avenue in Philadelphia. D.S. was kept in the basement with the other victims, fed a substandard diet, and not allowed to use the bathroom. On June 26, 2005, D.S. was found dead in the basement. Weston allegedly ordered other members of the household to move D.S.’s body to a bedroom and stage an accidental overdose before calling law enforcement.

The indictment also alleges that Weston forced two female captives to engage in prostitution while the enterprise operated in Killeen, Texas, and West Palm Beach, Fla.

The defendants are charged in four counts of violating the Matthew Shepard and James Byrd Jr. Hate Crimes Prevention Act. The Shepard-Byrd Act criminalizes certain acts of physical violence causing bodily injury motivated by any person's actual or perceived disability, race, color, national origin, religion, sexual orientation, gender or gender identity.

“The allegations in this indictment describe a scheme to physically abuse and subjugate persons with disabilities for purposes of de-humanizing them, stealing their money, and unlawfully obtaining their labor,” said Assistant Attorney General Thomas E. Perez of the Department of Justice’s Civil Rights Division.  “The laws against violently assaulting individuals because of their disabilities and those that prohibit human trafficking were designed to combat conduct aimed at vulnerable members of society, such as the alleged victims in this case.” 

“Those with physical and mental disabilities are among the most vulnerable in our society. As with everyone else, they deserve to be treated with respect, not violence,” said U.S. Attorney Memeger. “Linda Weston and others, in fact, decided to prey on these victims specifically because of their disabilities and they did so through violence, fear and intimidation for the purpose of stealing social security payments that were meant for the victims’ long-term care. ‘Shocking’ does not begin to describe the criminal allegations in this case where the victims were tied-up and confined like zoo animals and treated like property akin to slaves. Hopefully, today’s announcement of a 196-count indictment will help begin the process of restoring the victims’ faith in humanity.”

“Today’s indictment represents just one more step towards closure and healing, not only for the victims of this heinous hate crime, but for the community as a whole,” said Special Agent-in-Charge John Brosnan. “The FBI, along with the U.S. Attorney’s Office, the Philadelphia Police Department and the Social Security Administration Office of Inspector General remain committed to protecting each and every citizen's civil rights, and will aggressively investigate any violation of those rights, bringing the perpetrators to justice.”

"The Office of the Inspector General investigates many cases involving the misuse of Social Security benefits by representative payees, but thankfully, we've never seen a case involving this level of cruelty and inhumanity to our most vulnerable beneficiaries," said Special Agent-in-Charge Michael McGill. "We're pleased to see justice served, and grateful to the U.S. Attorney and our investigative partners for their unflagging support in this investigation."

If convicted of all charges, each of the defendants faces a statutory maximum sentence of life in prison with advisory guideline sentencing ranges that involve substantial terms of imprisonment. Weston also faces mandatory restitution in the amount of approximately $212,000, fines, and special assessments.

An indictment is merely an accusation; all defendants are presumed innocent until proven guilty.

The case was investigated by the FBI, the Social Security Administration Office of Inspector General, the Internal Revenue Service Criminal Investigation, the Philadelphia Police Department, with assistance from the Bureau of Alcohol, Tobacco, Firearms, and Explosives, West Palm Beach Field Office.  It is being prosecuted by Department of Justice Civil Rights Division Trial Attorney Betsy Biffl and Assistant U.S. Attorneys Richard P. Barrett and Faithe Moore Taylor.  The case was originally charged by the Philadelphia District Attorney’s Office.

Joseph McDaniels, 43, of Shoreline, Wash., was sentenced today in U.S. District Court for interstate transportation of a 22 year old woman for purposes of prostitution. Judge James L. Robart sentenced McDaniels to 10 years in prison followed by three years of supervised release. Requirements during the supervised release include registration under the Sex Offender Registration and Notification Act, sexual deviancy evaluation and treatment, restrictions and monitoring of his use of computers and restrictions on contact with minors.

On Sept. 28, 2012 McDaniels pleaded guilty to interstate transportation for prostitution. The indictment alleged that between August 2011 and April 2012, McDaniels compelled the woman to engage in commercial sex acts through force, fraud and coercion and that McDaniels transported her between Washington state and Oregon for purposes of prostitution.

According to court filings, McDaniels is a registered sex offender and had completed serving a 15-year sentence for a series of robberies in the mid-1990’s when he was released from state prison in early 2011. Only a few months later, McDaniels met and recruited the woman, preying upon her youth and drug addiction to coerce her into engaging in acts of prostitution.

According to court documents, McDaniels advertised the woman on Backpage.com, transported her to prostitution dates, took all of her money and supplied her with drugs. He threatened to harm her and her family, and in December 2011, McDaniels was arrested and later convicted in state court for assaulting the woman. He was arrested again in May 2012 after he had taken her to Portland, Ore., for prostitution, and then attempted to have the woman withdraw a state-issued no contact order against him.

“The exploitation and sexual abuse of a vulnerable young woman is intolerable and the Justice Department will continue to prosecute and seek justice for victims of such abhorrent crimes,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division.

“We will continue our battle against human trafficking in western Washington,” said U.S. Attorney for the District of Washington Jenny A. Durkan. “We are fortunate to have committed local, state and federal officers working together to find and stop sexual predators like the defendant. Today the court ensured that other young women will not be exploited by him.”

This case was investigated by the Kent Police Department, Auburn Police Department, and the FBI’s Innocence Lost Task Force, and prosecuted by Assistant U.S. Attorney Ye-Ting Woo and Trial Attorney Daniel H. Weiss of the Civil Rights Division’s Human Trafficking Prosecution Unit.

The FBI’s Innocence Lost Task Force provides a rapid and effective investigative response to reported federal crimes involving the victimization of children. The task force strives to reduce the vulnerability of children to acts of sexual exploitation and abuse and strengthens the capabilities of federal, state and local law enforcement through training programs and investigative assistance.

Billy James Hammett, 28, and Perry Sylvester Jackson, 27, were arrested today in Yuba County, Calif., on federal hate crime charges for their racially motivated attack on an African American woman and white man in Marysville, Calif., on April 18, 2011. A third defendant, Anthony Merrell Tyler, 32, has turned himself in to authorities in Sacramento, Calif.

The defendants were charged in a three-count indictment returned by a federal grand jury in the Eastern District of California and unsealed today. They are charged with one count of conspiracy and two counts of violating the Matthew Shepard and James Byrd Jr. Hate Crimes Prevention Act. The Shepard-Byrd Act criminalizes certain acts of physical violence causing bodily injury motivated by any person’s actual or perceived race, color, national origin, religion, sexual orientation, gender, gender identity or disability.

The indictment alleges that when an African American woman accompanied by a white male drove into the parking lot of a convenience store, Jackson shouted a racial epithet at the male. Hammett then approached the driver’s side of the car, using a racial epithet to refer to the African American driver, while Jackson and Tyler attacked from the other side of the car. The indictment further alleges that Hammett and Jackson punched and kicked the African American woman driver and white male passenger and that Tyler smashed the car windshield with a crowbar and used racial epithets again.

If convicted, the defendants could face a maximum sentence of five years in prison and a fine of $250,000 on the conspiracy charge, and 10 years in prison and a fine of $250,000 on each of the two hate-crime charges.

This case is being investigated by the FBI. The case is being prosecuted by Assistant U.S. Attorney R. Steven Lapham for the Eastern District of California and Trial Attorney Chiraag Bains from the Justice Department’s Civil Rights Division.

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

Former Fort Deposit, Ala., police officer Carlos Tyson Bennett, 37, was sentenced today by U.S. District Judge Mark Fuller to 37 months in prison, two years of supervised release and ordered to pay $500 in restitution. Bennett was sentenced for stealing money from motorists during traffic stops, with another former Fort Deposit police officer, Jessie Alan Fuller, on Interstate 65 in 2009.

Bennett pleaded guilty on Aug. 29, 2012, to one count of conspiracy against rights and four counts of deprivation of rights under color of law. During his plea, Bennett admitted that he and Fuller conspired to pull over vehicles under the guise of legitimate law enforcement activity and to steal cash from drivers and passengers in violation of their Fourth Amendment rights. Bennett acknowledged that he and Fuller worked together, acting with each other’s knowledge and cooperation and typically sharing the stolen money. In May and June 2009, Bennett committed four specific thefts, taking between $100 and $200 per victim. Bennett further acknowledged that he and Fuller tried to cover up their conspiracy when authorities began to investigate.

Fuller previously pleaded guilty to conspiracy and one count of deprivation of rights under color of law. He was sentenced to 37 months in prison on Aug. 28, 2012.

“This defendant betrayed the public trust when he took advantage of his position of authority to steal from those he pledged to serve,” said Thomas E. Perez, Assistant Attorney General for Civil Rights Division. “The Department of Justice is committed to prosecuting those who abuse their authority and violate the Constitution.”

“Police officers are here to protect public, not exploit the public,” stated U.S. Attorney George L. Beck Jr.  “When law enforcement officers take advantage of people they are supposed to be serving, they must be punished.  This case shows that my office will continue to do everything under law to protect public from criminals, even when the criminal is a law enforcement officer.” 

This case was investigated by the Alabama Bureau of Investigation; the Butler County, Ala., Sheriff’s Office; and the Lowndes County, Ala., Sheriff’s Office. The case was prosecuted by Assistant U.S. Attorney Gray Borden for the Middle District of Alabama and Trial Attorney Chiraag Bains from the Justice Department’s Civil Rights Division.

The United States has asked a federal court in Florence, S.C., to permanently bar Susann Allen of Darlington County, S.C., and Rachel D. Watson of Florence County, S.C., from preparing federal income tax returns for others, the Justice Department announced today. According to the government complaint, Allen and Watson have prepared federal income tax returns at a number of businesses in South Carolina including, most recently, Fludd’s Express Tax Service and Gold Valley Pawn. The complaint alleges that they have prepared returns that unlawfully understate income tax liabilities and overstate refunds through a variety of schemes.

The government complaint alleges that Allen and Watson prepared returns that unlawfully claim the Earned Income Tax Credit by reporting fictitious Schedule C businesses or business income or fictitious dependents. The complaint also alleges that Allen and Watson fabricated or inflated deductions. According to the complaint, the Internal Revenue Service has examined 32 returns prepared by Watson and six prepared by Allen and found that every single one overstated their client’s refund. The total excessive refund of those returns is alleged to be greater than $100,000. Altogether, the government complaint alleges that Allen’s and Watson’s activities may have resulted in millions of dollars of loss to the United States.

Over the past decade, the Justice Department’s Tax Division has obtained hundreds of injunctions to stop tax fraud promoters and dishonest tax return preparers. Information about these cases is available on the Justice Department website.

Related Materials:

United States v. Susann Allen, et al.
Complaint (PDF)

WASHINGTON – A former Texas state parole officer pleaded guilty today in Dallas for taking bribes from one of her assigned parolees in exchange for not reporting his parole violations, announced Assistant Attorney General Lanny A. Breuer of the Department of Justice’s Criminal Division.

 
Nichelle Derricks, 37, of Cedar Hill, Texas, pleaded guilty to one count of honest services wire fraud before U.S. Magistrate Judge Renee Harris Toliver of the Northern District of Texas, who then recommends U.S. District Judge Ed Kinkeade accept the plea.

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

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

 
Derricks faces a maximum potential penalty of 20 years in prison and a $250,000 fine on the honest services wire fraud charge. She is scheduled to be sentenced on April 24, 2013.

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

James M. Davis, 64, formerly of Baldwyn, Miss., the former chief financial officer of Stanford International Bank (SIB) and Houston-based Stanford Financial Group, was sentenced today to five years in prison for his role in helping Robert Allen Stanford perpetrate a fraud scheme involving SIB, and for conspiring to obstruct a U.S. Securities and Exchange Commission (SEC) investigation into SIB.

Today’s sentence was announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney Kenneth Magidson of the Southern District of Texas; FBI Assistant Director Ronald T. Hosko of the Criminal Investigative Division; Assistant Secretary of Labor for the Employee Benefits Security Administration (DOL EBSA) Phyllis C. Borzi; Chief Postal Inspector Guy J. Cottrell of the U.S. Postal Inspection Service (USPIS); and Chief Richard Weber, of Internal Revenue Service-Criminal Investigation (IRS-CI).

The prison sentence was imposed by U.S. District Judge David Hittner of the Southern District of Texas, who also sentenced Davis to serve three years of supervised release. As part of Davis’ sentence, the court also imposed a personal money judgment of $1 billion, which is an ongoing obligation for Davis to pay back criminal proceeds.

During the sentencing proceeding, Judge Hittner noted that Davis began cooperating with the government in early 2009, shortly after SIB’s collapse. Judge Hittner also noted that over the following three years, Davis provided substantial assistance to the authorities in the investigation and prosecution of others, including testifying at Stanford’s trial; testifying during the trial of Gilbert T. Lopez Jr. and Mark J. Kuhrt, Stanford’s former chief accounting officer and global controller, respectively; and preparing to testify against Laura Pendergest-Holt, Stanford’s chief investment officer. Holt eventually pleaded guilty; Stanford, Lopez and Kuhrt were convicted at trial. Stanford and Holt are currently serving 110 years and three years in prison, respectively. Lopez and Kuhrt are in federal custody and await sentencing, scheduled for Feb. 14, 2013.

As part of his 2009 guilty plea, Davis admitted that he was aware of Stanford’s misuse of SIB’s assets, kept the misuse hidden from the public and from almost all of Stanford’s other employees and worked to prevent the misuse from being discovered. In addition, Davis acknowledged that in January 2009, when the SEC sought testimony and documents related to SIB’s entire investment portfolio, he conspired with others in an effort to impede the SEC’s investigation and help SIB continue operating.

The investigation was conducted by the FBI, USPIS, IRS-CI and DOL EBSA. The case against Davis is being prosecuted by Deputy Chief Jeffrey Goldberg, Deputy Chief William Stellmach and Trial Attorney Andrew Warren of the Justice Department Criminal Division’s Fraud Section, and by Assistant U.S. Attorney Jason Varnado of the Southern District of Texas. The Justice Department also thanks the SEC for their assistance and cooperation in this matter.

WASHINGTON– A two-count superseding indictment was unsealed today in the Northern District of Florida charging a Florida resident with providing campaign contributions in the names of others and causing a presidential campaign committee to make a false statement to the Federal Election Commission (FEC), announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and Robert O. Davis, Acting U.S. Attorney for the Northern District of Florida.

Jay Odom, 56, of Destin, Fla., was charged in federal court in the Northern District of Florida with one count of providing campaign contributions in the name of another and one count of causing another to make false statements to the FEC.

The indictment alleges that in 2007, Odom directly or indirectly used personal funds aggregating more than $10,000 to reimburse individual contributions to the authorized campaign committee of a presidential candidate.  As a result, Odom allegedly caused the authorized campaign committee of that presidential candidate to file reports with the FEC that falsely stated that certain individuals had made federal campaign contributions when in fact each contribution was made by Odom.  According to the indictment, Odom was aware of the maximum donation that could be made by an individual to the campaign, and he knowingly devised a scheme to funnel his own money through the names of others in order to conceal from the FEC the true source and amount of the campaign contribution.

The charge of causing another person to make a false statement to the FEC carries a maximum sentence of five years in prison.  The charge of providing campaign contributions in the name of another carries a maximum sentence of two years in prison. 

The charges in the indictment are only allegations, and the defendant is presumed innocent unless and until proven guilty.

The superseding indictment results from an investigation by the FBI.  This case is being prosecuted by Assistant U.S. Attorney Randall J. Hensel and Trial Attorney Brian K. Kidd of the Criminal Division’s Public Integrity Section.

BALTIMORE --Immigration Judge John F. Gossart, Jr. 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 Jan. 18, 2013. The Baltimore District Office of U.S. Citizenship and Immigration Services, Department of Homeland Security, hosted the ceremony.

Biographical Information

Attorney General William French Smith appointed Judge Gossart in October 1982. Judge Gossart received a bachelor of science degree in 1967 from the University of Maryland and a juris doctorate in 1974 from the University of Baltimore School of Law. From 1975 through 1982, he served in various positions at the former Immigration and Naturalization Service, including general attorney, trial attorney, and deputy assistant commissioner for naturalization. Since 1997, Judge Gossart has served as an adjunct professor of immigration law at the University of Baltimore School of Law; has been a faculty member at the National Judicial College; and has guest lectured at numerous law schools and for the Maryland Institute for Continuing Professional Education of Lawyers. From 1967 to 1969, he served in the U.S. Army. Judge Gossart is a member of the Maryland State and District of Columbia 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.

A federal grand jury in Philadelphia unsealed an indictment yesterday charging Kyle Novitsky, 45, and Judith Aloe, 52, both of North Miami Beach, Fla., with making false odometer statements, securities fraud and conspiracy to commit these offenses, the Justice Department announced today. According to the indictment, as early as 2004, and through at least 2010, the defendants devised a scheme to defraud buyers of used motor vehicles by misrepresenting the mileage of approximately 247 vehicles they sold.

As part of the scheme, the indictment charges that Novitsky and Aloe purchased high-mileage, used motor vehicles in Florida, California and elsewhere from a national vehicle leasing company. The defendants are charged with conspiring to alter the odometers in these vehicles to reflect false, lower mileage. The indictment alleges that Novitsky and Aloe then fraudulently altered the motor vehicle titles and sales documentation associated with these vehicles to reflect the false, lower mileage. As a result, the commonwealth of Pennsylvania issued motor vehicle titles reflecting this false, low er mileage, which the defendants knew to be untrue.

Novitsky and Aloe subsequently sold the motor vehicles at wholesale automobile auctions in Manheim, Pa., and elsewhere, and provided to the buyers Pennsylvania titles bearing the lower false mileage. The indictment alleges that in some instances, the true mileage of the vehicle was greater than 100,000 miles more than what the title indicated, and as a result of selling the vehicles with false, lower mileages, the defendants received higher sales prices for the vehicles they sold.

“Mileage information is important for consumers to assess the value and safety of the vehicles they purchase,” said Stuart F. Delery, Principal Deputy Assistant Attorney General for the Civil Division of the Department of Justice. “Automobile purchases are one of the biggest investments consumers make, and false odometer statements can cause the buyers of these vehicles to lose thousands of dollars of their hard-earned money. In these difficult economic times, we take seriously our obligation to prosecute those who engage in this serious form of fraud.”

The charges in the indictment are only allegations, and the defendants are presumed innocent unless and until proven guilty. Principal Deputy Assistant Attorney General Delery thanked the Office of Odometer Fraud Investigation at the National Highway Traffic Safety Administration, U.S. Department of Transportation, for their assistance in investigating and prosecuting this case

A Texas federal judge convicted the owner of two Texas-based durable medical equipment companies today on multiple health care fraud charges following a five-day bench trial, announced Assistant Attorney General Lanny A. Breuer of the Justice Department?s Criminal Division.
 
Hugh Marion Willet, 69, of Fort Worth, Texas, was found guilty by U.S. District Judge Jane J. Boyle in the Northern District of Texas on all seven counts of the June 2012 second superseding indictment: one count of conspiracy to commit health care fraud and six counts of health care fraud stemming from a durable medical equipment (DME) fraud scheme.  Willett?s wife, Jean Willett, previously pleaded guilty to the same charges and was sentenced in September 2012 to serve 50 months in prison.  
            
The evidence at trial showed that between 2006 and 2010, the Willets co-owned and operated JS&H Orthopedic Supply LLC and Texas Orthotic and Prosthetic Systems Inc., which claimed to provide orthotics and other DME to beneficiaries of Medicare and private insurance benefit programs including Aetna, Blue Cross Blue Shield and CIGNA.  
 
Evidence presented in court proved that both of these companies intentionally submitted claims to Medicare and other insurers for products that were materially different from and more expensive than what was actually provided, and that Hugh Marion Willett was a knowing and willing participant in the fraud.     
 
At sentencing, currently scheduled for April 18, 2013, Hugh Marion Willett faces a maximum potential penalty of 10 years in prison and a $250,000 fine on each count. 
 
The case is being prosecuted by Fraud Section Trial Attorney Ben O?Neil and Deputy Chief Sam Sheldon of the Justice Department?s Criminal Division.  The case was investigated by the FBI and the Department of Health and Human Services Office of Inspector General (HHS-OIG) and brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division?s Fraud Section.
 
Since their inception in March 2007, strike force operations in nine locations have charged more than 1,480 defendants who collectively have falsely billed the Medicare program for more than $4.8 billion.  In addition, the HHS Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

WASHINGTON – A former minister pleaded guilty today in North Carolina to engaging in illicit sexual conduct in Haiti, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney for the Western District of North Carolina Anne M. Tompkins and Brock D. Nicholson, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) in Georgia and the Carolinas. 

Larry Michael Bollinger, 67, of Gastonia, N.C., pleaded guilty before U.S. District Judge David S. Cayer in the Western District of North Carolina to two counts of engaging in illicit sexual conduct in a foreign place.  Bollinger was charged in an indictment filed on May 15, 2012.

According to filed court documents and court proceedings, Bollinger was a former Lutheran minister who performed missionary work in Haiti.   Court records show that Bollinger regularly travelled to Haiti and served as the Haiti director for a Lutheran charity.  Bollinger admitted that from about August 2009 to October 2009, he sexually molested four Haitian females, between the ages of 11 and 16.  According to court records, one of the victims said that Bollinger offered to give her food and money in exchange for sexual acts.   

Bollinger has been in federal custody since he was charged in May 2012.   Each count of engaging in illicit sexual conduct in a foreign place carries a maximum penalty of 30 years in prison and a $250,000 fine.  A sentencing date for Bollinger has not been set yet. 

The case is being prosecuted by Assistant U.S. Attorney Kimlani M. Ford of  the Western District of North Carolina and Trial Attorney Michael W. Grant of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS).  The investigation was conducted by ICE-HSI. 

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

A federal court has permanently barred Nafeesah H. Hines and Rodney N. Chestnut from promoting an alleged tax fraud scheme, as well as preparing tax returns for anyone other than themselves, the Justice Department announced today.  The civil injunction orders, to which Hines and Chestnut consented without admitting the allegations against them, were entered by Judge Kiyo Matsumoto of the U.S. District Court for the Eastern District of New York.         

According to the government complaint in the case, Hines and Chestnut promoted and personally participated in a scheme based on the frivolous “redemption” theory, which promoters falsely claim allows taxpayers to obtain funds from supposed secret Treasury accounts.  The government alleged that Hines and Chestnut used Internal Revenue Service (IRS) forms, including Forms 1099-OID and 1099-A, to report large amounts of fictitious income tax withholding to claim large tax refunds on customer tax returns prepared by Chestnut or prepared by the customers with Chestnut’s help.      

Chestnut, the government alleges, is a former captain with the New York City Corrections Department and promoted the scheme to former co-workers.  Hines, who the complaint alleges is a U.S. Food and Drug Administration employee, prepared or filed false 1099 forms with the IRS, both for Chestnut’s customers as well as for other people, according to the lawsuit. The complaint alleges that Hines prepared or filed more than 3,000 fraudulent IRS forms that falsely reported over $54 million of purportedly withheld income taxes.        

Claiming bogus tax refunds based on false 1099 Forms is one of the IRS’s “Dirty Dozen” tax scams . In the past decade, the Justice Department’s Tax Division has obtained injunctions against hundreds of tax fraud promoters and unscrupulous tax preparers. Information about these cases is available on the Justice Department website .

Related Materials:

United States v. Nafeesah H. Hines, et al.
Chestnut Injunction
Hines Injunction

The Justice Department announced today that a federal court has permanently barred Cash Management Systems, a Virginia corporation, from promoting two tax schemes that allegedly involve disguising wages as tool-reimbursement or tool-rental payments. Also subject to the civil injunction order were Cash Mangement’s marketing arm, Xell Enterprises, incorporated in Kansas; its principals, Bruce Lemay and Richard Herson Mills; and Allen Davison, of Overland Park, Kan. According to the government complaint, Davison provided legal opinion letters regarding the schemes and served on Cash Management’s board of directors.

Judge Eric F. Melgren of the U.S. District Court for the District of Kansas entered the permanent injunction, which the defendants consented to without admitting to the allegations against them. Davison was enjoined from promoting other tax schemes in 2010.

The complaint alleges that defendants promoted and implemented two fraudulent tax schemes to employers and employees in the automotive, construction and trucking industries across the United States. In the first, employers allegedly re-characterize a portion of employees’ wages as purported reimbursements for tools in order to evade federal income and employment taxes. The second plan allegedly involves re-characterizing a portion of wages as purported tool rental payments. The suit alleges that both plans are specifically designed and promoted as ways to reduce reported income and employment taxes.

The government asserts in its complaint that from 2004 through 2010 the schemes cost the U.S. Treasury an estimated $17 million.

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

Related Materials:

United States v. Cash Management Systems, Inc., et al.
Complaint for Permanent Injunction and Other Relief
Amended Stipulated Order for Permanent Injunction

Assistant Attorney General Ignacia S. Moreno announced today the publication of the Environment and Natural Resources Division’s (ENRD) Fiscal Year 2012 Accomplishments Report.  The full report, which details the division’s work across the nation during FY2012, is posted at www.justice.gov/enrd/Current_topics.html. 

Outstanding Enforcement Results

 Through its civil and criminal environmental enforcement actions, ENRD achieved dramatic reductions in emissions and discharges of harmful pollutants to America’s air, water and land.  In 2012, the division secured more than $397 million in civil and stipulated penalties, cost recoveries, natural resource damages and other civil monetary relief, including almost $133 million recovered for the Superfund.  The division obtained over $6.9 billion in corrective measures through court orders and settlements and concluded 47 criminal cases against 83 defendants, resulting in nearly 21 years in confinement and over $38 million in criminal fines, restitution, community service funds and special assessments.  These outstanding results continue the division’s success in obtaining record-setting results over the past four years.  During this time, the division has also advanced environmental justice, incorporating this important priority in a meaningful and enduring way into the work of the division.  

“The extraordinary work reflected in this report is due to the dedication, expertise and professionalism of the division staff,” said Assistant Attorney General Moreno. “I am extremely proud of our achievements over the past year.  They have resulted in immeasurable benefits for human health and the environment for all of the American people, who should all enjoy the benefits of a fair and even-handed application of environmental and natural resources laws. Together with our colleagues at client agencies and state, local and tribal governments, the Department of Justice will continue to vigorously enforce the federal civil and criminal environmental and natural resources laws that protect our air, land and water from pollution and that preserve our natural resources for the use and enjoyment of generations to come.”

Holding Those Responsible for the Deepwater Horizon Oil Spill Accountable

ENRD’s top civil and criminal enforcement priority is to bring to justice those responsible for the April 20, 2010 Deepwater Horizon explosion, fire and oil spill. Under a consent decree lodged on Jan. 3, 2013, Transocean pleaded guilty to violating the Clean Water Act and agreed to pay $1.4 billion in civil and criminal fines and penalties, including a record-setting $1 billion to resolve Clean Water Act civil claims. On Feb. 17, 2012, the Department of Justice announced an agreement with MOEX, which will pay $70 million in civil penalties to resolve alleged violations of the Clean Water Act and will spend at least $20 million to facilitate land acquisition projects in several Gulf States that will preserve and protect in perpetuity habitat and resources important to water quality.

Landmark Decisions Reducing Greenhouse Gases

ENRD’s responsibilities include defending lawsuits brought against the federal government challenging agency actions and programs.  In a landmark example of its defensive work, the division, with agency counsel, successfully defended rulemakings under the Clean Air Act that reduce the emission of greenhouse gases that contribute to global warming. In June 2012, in one of the most significant environmental regulatory decisions of the past decade, a unanimous panel of the D.C. Circuit in Coalition for Responsible Regulation v. EPA upheld EPA’s greenhouse gas-related regulatory actions against all challenges.  
 
Successfully Defending the Country’s Energy Agenda

The Obama Administration’s energy policy includes the responsible development of additional fossil fuels and renewable energy sources.  In 2012, the division successfully defended challenges to permits and rights-of-way put in place to promote the development of renewable energy projects on western public lands.  ENRD is defending more than 20 cases involving solar, wind and transmission projects located in California, Oregon, Tennessee, Delaware, Massachusetts and Vermont, and has successfully defeated motions for injunctive relief in California, Tennessee and Delaware to allow responsible energy development to proceed consistent with the permitting requirements of the issuing agencies.
 
Promoting National Security and Military Preparedness

Increasingly, the division is responsible for defending agency actions that support the national security of the United States.  For example, in fiscal year 2012, the division successfully defended against challenges to critical Department of Defense training programs that ensure military preparedness, various agency projects to secure the nation’s borders and waters, and U.S. development of all forms of domestic energy to reduce our dependence on foreign oil.  

Historic Results Protecting Tribal Rights and Resources and Addressing Tribal Claims

In 2012, the division achieved historic results for Indian tribes and resolved decades-long and costly litigation over tribal claims regarding the government’s management of trust funds and trust resources.  In the past year, the United States settled cases with 62 tribes, agreeing to pay about $1.25 billion in total to resolve the tribes’ claims. The division will continue, through its cases, to vigilantly protect tribal sovereignty, safeguard tribal lands and resources, and honor tribal treaty rights.

One of the Best Places to Work in the Federal Government

At the same time that the division has achieved outstanding results in its cases, in each of the last three years, the Partnership for the Public Service (PPS) has ranked ENRD as one of the “Best Places to Work in the Federal Government.”  ENRD’s overall ranking has been in the top five for each of the past three years, including two #1 rankings.  The division has also continued to make great strides in promoting diversity and a better quality of life for all its employees.

A Pakistani native who operated a Chicago-based immigration business was sentenced today to 14 years in prison for conspiracy to provide material support to a terrorist plot in Denmark and providing material support to Lashkar e Tayyiba, a terrorist organization operating in Pakistan that was responsible for the November 2008 attacks in Mumbai, India.  The defendant, Tahawwur Hussain Rana, was convicted of the charges on June 9, 2011, following a three-week trial in U.S. District Court in Chicago. 
 
Rana, 52, a Canadian citizen, was ordered to serve 14 years, followed by five years of supervised release by U.S. District Judge Harry Leinenweber.  “This certainly was a dastardly plot,” Judge Leinenweber said in imposing the sentence.
 
Rana was convicted of conspiracy to provide material support to a plot from October 2008 to October 2009 to commit murder in Denmark, including a horrific plan to behead employees of Morgenavisen Jyllands-Posten, a Danish newspaper, and throw their heads on to the street in Copenhagen, as well as providing material support, from late 2005 to October 2009, to Lashkar, a militant jihadist organization operating in Pakistan.  Lashkar planned and carried out the November 2008 attacks in Mumbai that killed more than 160 people, including six Americans, before initially planning the terrorist attack in Denmark in retaliation for the newspaper’s publication of cartoons depicting the Prophet Mohammed.  Rana was acquitted of conspiracy to provide material support to the Mumbai attacks.

 “This serious prison sentence should go a long way towards convincing would-be terrorists that they can’t hide behind the scenes, lend support to the violent aims of terrorist organizations, and escape detection and punishment,” said Gary S. Shapiro, Acting U.S. Attorney for the Northern District of Illinois.
 
“Today’s sentence demonstrates that, just as vigorously as we pursue terrorists and their organizations, we will also pursue those who facilitate their violent plots from a safe distance.  As established at trial, Tahawwur Rana provided critical support to David Headley and other terrorists from his base in the United States, knowing they were plotting attacks overseas.  I thank the many agents, analysts and prosecutors who helped bring about today’s result,” said Lisa Monaco, Assistant Attorney General for National Security.
 
“It is my hope that the judge’s decision today sends a message to those who plot attacks and those who provide the support to make the plots possible, both here and abroad, that you will be held accountable for your actions.  Our mission, detecting and preventing terrorist acts and eliminating the enabling support provided by terrorist sympathizers, remains our top priority,” said Cory B. Nelson, Special Agent-in-Charge of the Chicago Office of the FBI.
 
Rana is one of two defendants to be convicted, among a total of eight defendants who have been indicted, in this case since late 2009.  Co-defendant David Coleman Headley, 52, pleaded guilty in March 2010 to 12 terrorism charges, including aiding and abetting the murders of the six Americans in Mumbai.  Headley, who is scheduled to be sentenced next Thursday, has cooperated with the government since he was arrested in October 2009, and testified as a government witness at Rana’s trial.  He is facing a maximum of life in prison
 
The evidence at Rana’s trial showed that he knew he was assisting a terrorist organization and murderers, knew their violent goals, and readily agreed to play an essential role in achieving their aims.  The government contended that Rana knew the objective of his co-conspirators was to retaliate against and influence the Danish government for its perceived role in the publication of the Prophet Mohammed cartoons, and he knew that the goal of Lashkar was to retaliate against and influence the Indian and Danish governments and intended that the support he provided – enabling Headley’s activities – would be used toward that purpose.
 
In a post-arrest statement in October 2009, Rana admitted knowing that Lashkar was a terrorist organization and that Headley had attended training camps that Lashkar operated in Pakistan.  Headley testified that he attended the training camps on five separate occasions between 2002 and 2005.  In late 2005, Headley received instructions from members of Lashkar to travel to India to conduct surveillance, which he did five times leading up to the Mumbai attacks three years later that killed more than 160 people and wounded hundreds more.
 
In the early summer of 2006, Headley and two Lashkar members discussed opening an immigration office in Mumbai as a cover for his surveillance activities.  Headley testified that he traveled to Chicago and advised Rana, his long-time friend since the time they attended high school together in Pakistan, of his assignment to scout potential targets in India.  Headley obtained approval from Rana, who owned First World Immigration Services in Chicago and elsewhere, to open a First World office in Mumbai as cover for his activities.  Rana directed an individual associated with First World to prepare documents supporting Headley’s cover story, and advised Headley how to obtain a visa for travel to India, according to Headley’s testimony, as well as emails and other documents that corroborated his account.
Between Nov. 26-28, 2008, 10 attackers trained by Lashkar carried out multiple assaults with firearms, grenades and improvised explosive devices against multiple targets in Mumbai, some of which Headley had scouted in advance.

Regarding the Denmark terror plot, Headley testified that in the fall of 2008, he met with a Lashkar member in Karachi, Pakistan, and was instructed to conduct surveillance of the Jyllands-Posten newspaper offices in Copenhagen and Aarhus.

In late 2008 and early 2009, after reviewing with Rana how he had performed surveillance of the targets attacked in Mumbai, Headley testified that he advised Rana of the planned attack in Denmark and his intended travel there to conduct surveillance of the newspaper’s facilities.  Headley obtained Rana’s approval and assistance to identify himself as a representative of First World and gain access to the newspaper’s offices by falsely expressing interest in placing advertising for First World in the newspaper.  Headley and Rana caused business cards to be made that identified Headley as a representative of the Immigration Law Center, the business name of First World, according to the evidence at trial.
 
The trial evidence also included transcripts of recorded conversations, including those in September 2009, when Headley and Rana spoke about reports that a co-defendant, Ilyas Kashmiri, an alleged Pakistani terrorist leader, had been killed and the implications of his possible death for the plan to attack the newspaper.  In other conversations, Rana told Headley that the attackers involved in the Mumbai attacks should receive Pakistan’s highest posthumous military honors.  In the late summer of 2009, Rana and Headley agreed that funds that had been provided to Rana could be used to fund Headley’s work in Denmark, and the evidence showed that Rana, pretended to be Headley in sending an email to the Danish newspaper. 
 
The government is being represented by Assistant U.S. Attorneys Daniel Collins and Sarah E. Streicker, with assistance from the Counterterrorism Section of the Justice Department’s National Security Division.  Federal prosecutors in Los Angeles have worked on a broader investigation of the Mumbai attacks.  The investigation has been conducted by the Chicago Joint Terrorism Task Force, led by the Chicago Office of the Federal Bureau of Investigation, with assistance from FBI offices in Los Angeles, New York and Washington, D.C., as well as both U.S. Customs and Border Protection and the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations.