District Not Recorded

The Justice Department announced today the filing of several criminal and civil business opportunity fraud cases, initiated as part of a joint sweep with the Federal Trade Commission and several states. Business opportunity fraud schemes take advantage of people looking for work by luring them in with false promises of big profits and leaving them worse off than they started. The cases include criminal charges against 14 individuals and civil cases against three businesses. The criminal and civil cases announced today are part of a series of investigations named “Operation Lost Opportunity.”

 

The Justice Department’s cases are part of the efforts of the President’s Financial Fraud Enforcement Task Force and are being handled by the Civil Division’s Consumer Protection Branch, in coordination with the U.S. Attorney’s Offices for the Central District of California, the Southern District of California, the Southern District of Florida, the District of Oregon, the Western District of North Carolina, the Western District of Pennsylvania and the Southern District of Texas.

 

Seven different business opportunity schemes are the targets of the Justice Department’s actions. According to the charging documents, the criminal schemes involved placement of advertisements online and in newspapers that touted the profits that could be earned by purchasing a business opportunity to own and operate vending machines or display racks. The United States alleges that the schemes operated as follows: Salespeople explained that consumers who purchased the opportunity would earn substantial income from the equipment. According to the sales pitch, the vending machines or display racks would be placed in store locations in the purchaser’s hometown and would offer candy, refreshments or jewelry, depending on which opportunity was being offered. According to the sales pitch, the purchaser would then receive profits based upon sales from the vending machines or display racks.

 

“In an attempt to lure wary consumers, fraudsters have crafted business opportunity schemes that promise what appear to be more realistic returns backed up by false success stories,” said Tony West, Acting Associate Attorney General. “But we are more determined than ever to bring to justice those who are defrauding Americans out of their time, money, and faith in our economic system – this law enforcement sweep represents a coordinated effort to combat business opportunity fraud on multiple fronts.”

 

“Although years of criminal law enforcement attention has disrupted and deterred many fraudulent business opportunity schemes, some perpetrators have not yet heard the message – that defrauding entrepreneurial Americans out of their hard-earned money will result in stiff penalties,” said Stuart F. Delery, Principal Deputy Assistant Attorney General for the Civil Division. “Members of the public should be on guard for the deceptive tactics used to attract victims, and avoid schemes that fail to abide by the FTC’s Business Opportunity Rule.”

 

Enticed by the promise of a “turnkey” business, hundreds of consumers lost millions of dollars purchasing the fraudulent business opportunities targeted in this sweep. The four businesses involved in the criminal component of the sweep include the following:

 

·          Mark Five Inc., a Houston company that promoted a jewelry business opportunity. O n November 12, 2012 and November 14, 2012, the Department of Justice filed criminal informations charging Billie Joyce Sanders and Michael Cupina in connection with their conduct at Mark Five. Each defendant was charged with conspiracy, which carries a maximum prison term of five years. According to the charging documents, Mark Five salespeople referred potential business opportunity buyers to Sanders and Cupina, who falsely claimed to own and operate successful jewelry display racks. One other individual was previously charged in connection with Mark Five. In February 2012, a grand jury in Houston indicted Mark Five principal Robert King on charges of conspiracy to commit mail and wire fraud, and substantive mail and wire fraud. King’s trial is scheduled for February 2013.

 

·          The Lauren Jewelry Collection, an Atascocita, Texas, company that promoted a jewelry business opportunity. On November 13, 2012, the Department of Justice filed a criminal information in the Southern District of Texas charging Regina Rush in connection with the Lauren Jewelry Collection. Rush was charged with one count of conspiracy, which carries a maximum prison term of five years. According to the charging document, Rush served as the proprietor of the firm and made false representations about the success of distributors and the authenticity of references. The charges state that Rush encouraged potential purchasers to call references who made false statements about their experiences with the Lauren Jewelry Collection.

 

·          American Vending Systems (AVS), a Colorado company that promoted energy candy business opportunities. On November 14, 2012, the Department of Justice filed a criminal information in the Western District of Pennsylvania charging Pearl Pastilock in connection with her conduct at AVS. Pastilock was charged with one count of conspiracy, which carries a maximum prison term of five years. According to the charging document, AVS salespeople referred potential buyers to Pastilock, who falsely claimed to own and operate successful energy candy vending machines. Five other individuals were previously charged for their conduct at AVS and related firms. Richard Black, Gary Luckner, Lou Gubitosa, Trey Friedmann and Mel Hendricks were all charged and pleaded guilty to conspiracy charges for this conduct.

 

·          Multivend LLC, dba Vendstar, a New York company that promoted candy vending machine business opportunities. On Oct. 10, 2012, a grand jury in the Southern District of Florida indicted 10 individuals for misrepresenting a number of facts in connection with the sale of Vendstar business opportunities. More information about these charges can be found at:

www.justice.gov/opa/pr/2012/October/12-civ-1217.html

 

The charging documents referred to above contain only accusations against the defendants and are not evidence of guilt. The defendants should be presumed innocent unless and until proven guilty.

 

The civil cases the Justice Department filed allege that three businesses violated the Federal Trade Commission’s Business Opportunity Rule. The businesses include:

 

·          The Zaken Corp., also doing business as The Zaken Corporation, QuickSell and QuikSell, (Zaken). Zaken is alleged to be a Thousand Oaks, Calif., corporation that offers a work-at-home business opportunity. According to the complaint against Zaken and its corporate officer Tiran Zaken, the defendants offer consumers a business plan to locate and contact businesses with excess inventory to sell. The complaint alleges that Zaken represents that once purchasers of the opportunity identify businesses interested in selling excess inventory, Zaken will find a buyer for the inventory and give the purchaser a “finder’s fee” equal to half of the total sales price. Among other allegations, the complaint filed by the Justice Department alleges that Zaken makes unsubstantiated claims, including that purchasers “can make thousands of dollars monthly for working just 2 to 4 hours a week from home.” This case was filed in the U.S. District Court for the Central District of California.

 

·          Christopher Andrew Sterling, doing business as Sterling Visa, Rebate Data Processors and Credit Card Workers. Sterling is alleged to have run several work-at-home schemes from Southern California. According to the complaint, Sterling represents that purchasers of his opportunity will make a substantial income by “processing” applications for product rebates or credit card applications. Among other allegations, the government’s civil complaint alleges that Sterling failed to make required disclosures under the FTC’s Business Opportunity Rule and made unsubstantiated earnings claims. This case was filed in the U.S. District Court for the Southern District of California.

 

·          Smart Tools LLC, a Tualatin, Ore., company. The complaint against Smart Tools and its corporate officer, Kirstin Hegg, alleges that the defendants have marketed a work-at-home business opportunity that teaches purchasers to locate people who are eligible for a partial refund of their FHA mortgage loan insurance premium. According to the complaint, the defendants tell potential buyers that they can charge a fee for information on how to obtain the refund. The defendants allegedly sent postcards to potential buyers stating that purchasers can earn up to $38,943 per year without stating what, if any, substantiation supports the earnings claim. Such a claim violates the FTC’s Business Opportunity Rule. This case was filed in the U.S. District Court for the District of Oregon.

 

Today’s announcement is part of efforts underway by the Consumer Protection Working Group (CPWG). The CPWG is part of President Obama’s Financial Fraud Enforcement Task Force which was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The CPWG brings together federal, state, and local law enforcement agencies, regulators, and other stakeholders to protect consumers from fraud that can devastate victims and cause widespread economic harm. Consumer fraud comes in many forms and can be found in fraud on our nation’s servicemembers, payday lending, high-pressure telemarketing schemes, internet scams, business opportunity scams, and unscrupulous third party payment processors. Scam artists often target vulnerable populations such as the unemployed and those already struggling with debt. Through this partnership, the CPWG is working to strengthen consumer protection efforts, leverage resources, enhance civil and criminal enforcement of consumer fraud and educate the public in an effort to prevent consumers from being victimized. For more information about the Financial Fraud Enforcement Task Force, visit www.stopfraud.gov .

WASHINGTON – A federal grand jury in the District of New Hampshire returned an indictment late yesterday charging a Dutch national with allegedly conspiring to hack into and disable computer servers belonging to Rampid Interactive, a New Hampshire-based company that publishes and hosts a multi-player online role-playing game called “Outwar,” Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney John P. Kacavas of the District of New Hampshire announced today.

Anil Kheda, 24, of the Netherlands, is charged with one count of conspiring to commit computer intrusion and one count of making extortionate interstate threats.

The indictment alleges that from November 2007 to August 2008, Kheda and other members of the conspiracy, all of whom were avid “Outwar” players, accessed Rampid’s computer servers without authorization and rendered “Outwar” unplayable for days at a time.  According to the indictment, Kheda and his alleged co-conspirators also used their unauthorized access to Rampid’s servers to alter user accounts – causing the restoration of suspended player accounts and the accrual of unearned game points – and obtain a copy of all or portions of the “Outwar” computer source code, which they used to help create a competitor online game, “Outcraft.”  The indictment also alleges that Kheda and his alleged co-conspirators sent Rampid interstate communications threatening to continue to hack into Rampid’s computer systems unless Rampid agreed to pay them money or provide them with other benefits. 

According to the indictment, as a result of the defendants’ hacking activities, Rampid was unable to operate “Outwar” for a total of approximately two weeks over a nine-month period and incurred over $100,000 in lost revenues, wages, hosting costs, long term loss of business, as well as the loss of exclusive use of their proprietary source code, which it had invested approximately $1.5 million in creating. 

According to court documents, Kheda earned approximately $10,000 in profits from operating “Outcraft,” which has approximately 10,000 players worldwide. 

If convicted, Kheda faces a maximum sentence of five years in prison on the conspiracy charge and two years in prison on the interstate threats charge.

The case was investigated by the FBI and is being prosecuted by Trial Attorney Mona Sedky of the Computer Crime and Intellectual Property Section in the Justice Department’s Criminal Division and Assistant U.S. Attorney Arnold H. Huftalen of the District of New Hampshire.

The details contained in the indictment are allegations. The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

The U.S. Department of Justice Office of Community Oriented Policing Services (COPS) today announced the completion and delivery of an eight-month review of the Las Vegas Metropolitan Police Department’s use of force policies and practices. The report, funded by a grant from the COPS Office, lists 75 findings and recommendations regarding officer-involved shootings and other use-of-force issues.

  The Las Vegas Metropolitan Police Department volunteered to undergo the review by the COPS Office after a series of shootings in 2011. The report focused on the use of deadly force over the last five years, including an analysis of policies and procedures, training and tactics, investigation and documentation and case reviews. Interviews were conducted with 95 area stakeholders, including community members, current and former officers and prosecutors, community organizations and police union officials.

“One of the most important issues facing law enforcement is the public perception of the legitimate use of force,” said COPS Office Director Bernard Melekian. “And far too often, the public perception of police use of force is different from those who are in law enforcement. We’ve now developed a tool to help assist agencies address community concerns, effectively revamp policies and practices, and enhance both community engagement and community support.”

The report was administered as part of the COPS Office’s Critical Response Technical Assistance initiative, designed to provide technical assistance to agencies facing significant law enforcement-related issues. Using subject matter experts, interviews, direct observations, as well as conducting extensive research and analysis, the COPS Office assists law enforcement agencies with enhancing and improving their policies and procedures, their operating systems and their professional culture. The COPS Office can issue a series of recommendations and be instrumental in assisting agencies with the implementation of those recommendations.

Among the findings in the Las Vegas Metropolitan Police Department report is the need for significant changes to the use of force review board, new tactical practices when multiple officers respond to a crime scene and the implementation of new technologies, such as body cameras. The report also found that while the department’s new use of force policy is comprehensive, the format of the policy is cumbersome and not structured in a clear and concise manner that would allow for quick guidance when needed. The report recommends that the new policy be separated into smaller, specific policies that quickly address issues such as the use of firearms and less-lethal weapons.

The Las Vegas Metropolitan Police Department has already made progress on implementing a number of the report’s recommendations, addressing nearly half of the calls for action prior to the release of the report from the COPS Office.

“The issues facing the Las Vegas Metropolitan Police Department are not unique. Numerous agencies are facing similar challenges,” stated Director Melekian. “We are very encouraged by the Department’s proactive commitment to identifying problems and fixing them. The Sheriff and his team have been a partner throughout and we have seen results. There is much hard work ahead, but important initiatives have already begun. The approach taken by the Sheriff should be a model for departments across the nation.”

The COPS Office is a federal agency responsible for advancing community policing nationwide. Since 1995, COPS has awarded over $17 billion to advance community policing, including grants awarded to more than 13,000 state, local, and tribal law enforcement agencies to fund the hiring and redeployment of approximately 120,000 officers and provide a variety of knowledge resource products including publications, training, and technical assistance.

BP Exploration and Production Inc. (BP) has agreed to plead guilty to felony manslaughter, environmental crimes and obstruction of Congress and pay a record $4 billion in criminal fines and penalties for its conduct leading to the 2010 Deepwater Horizon disaster that killed 11 people and caused the largest environmental disaster in U.S. history, Attorney General Eric Holder announced today. The 14-count information, filed today in U.S. District Court in the Eastern District of Louisiana, charges BP with 11 counts of felony manslaughter, one count of felony obstruction of Congress, and violations of the Clean Water and Migratory Bird Treaty Acts.

 

BP has signed a guilty plea agreement with the government, also filed today, admitting to its criminal conduct. As part of its guilty plea, BP has agreed, subject to the Court’s approval, to pay $4 billion in criminal fines and penalties – the largest criminal resolution in United States history.

 

“The $4 billion in penalties and fines is the single largest criminal resolution in the history of the United States and constitutes a major achievement toward fulfilling a promise that the Justice Department made nearly two years ago to respond to the consequences of this epic environmental disaster and seek justice on behalf of its victims,” said Attorney General Holder. “We specifically structured this resolution to ensure that more than half of the proceeds directly benefit the Gulf Coast region so that residents can continue to recover and rebuild.”

“The explosion of the rig was a disaster that resulted from BP’s culture of privileging profit over prudence,” said Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division. “We hope that BP's acknowledgment of its misconduct – through its agreement to plead guilty to 11 counts of felony manslaughter – brings some measure of justice to the family members of the people who died onboard the rig.”

 

“The oil spill was catastrophic for the environment, but by hiding its severity BP also harmed another constituency – its own shareholders and the investing public who are entitled to transparency, accuracy and completeness of company information, particularly in times of crisis,” said Robert Khuzami, Director of the U.S. Securities and Exchange Commission’s (SEC) Division of Enforcement.  “Good corporate citizenship and responsible crisis management means that a company can’t hide critical information simply because it fears the backlash.”

In addition to the resolution of charges against BP, Robert M. Kaluza, 62, of Henderson, Nev., and Donald J. Vidrine, 65, of Lafayette, La. – the highest-ranking BP supervisors onboard the Deepwater Horizon on April 20, 2010 – are alleged to have engaged in negligent and grossly negligent conduct in a 23-count indictment charging violations of the federal involuntary manslaughter and seaman’s manslaughter statutes and the Clean Water Act. David I. Rainey, 58, of Houston – a former BP executive who served as a Deputy Incident Commander and BP’s second-highest ranking representative at Unified Command during the spill response – is charged with obstruction of Congress and making false statements to law enforcement officials. A grand jury in the Eastern District of Louisiana returned the indictments against Kaluza, Vidrine and Rainey, which were unsealed today.

According to court documents, on April 20, 2010, while stationed at the Macondo well site in the Gulf of Mexico, the Deepwater Horizon rig experienced an uncontrolled blowout and related explosions. In agreeing to plead guilty, BP has admitted that 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 information details that, on the evening of April 20, the two supervisors, Kaluza and Vidrine, observed clear indications that the Macondo well was not secure and that oil and gas were flowing into the well. Despite this, BP’s well site leaders chose not to take obvious and appropriate steps to prevent the blowout. As a result of their conduct, control of the Macondo well was lost, resulting in catastrophe.

 

Kaluza and Vidrine each are charged with 11 felony counts of seaman’s manslaughter, 11 felony counts of involuntary manslaughter and one violation of the Clean Water Act. If convicted, Kaluza and Vidrine each face a maximum potential penalty of 10 years in prison on each seaman’s manslaughter count, up to eight years in prison on each involuntary manslaughter count, and up to a year in prison on the Clean Water Act count.

 

The information charging BP further details that the company, through senior executive Rainey, obstructed an inquiry by the U.S. Congress into the amount of oil being discharged into the Gulf while the spill was ongoing. As part of its plea agreement, BP has admitted that, through Rainey, it withheld documents and provided false and misleading information in response to the U.S. House of Representatives’ request for flow-rate information. Among other things, BP admitted that Rainey 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. BP has also admitted that, at the same time Rainey was preparing his manipulated estimates, BP’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.

 

Rainey is charged with one count of obstruction of Congress, and one count of making false statements to law enforcement officials. If convicted, Rainey faces a maximum potential penalty of five years in prison on each count.

 

The criminal resolution is structured such that more than half of the proceeds will directly benefit the Gulf region. Pursuant to an order presented to 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 will also 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.

 

In addition to the historic $4 billion in criminal fines and penalties, BP has agreed as part of its guilty plea 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 BP’s code of conduct for the purpose of seeking to ensure BP’s future candor with the United States government.

 

The United States continues to pursue a civil action to recover civil penalties under the Clean Water Act and hold BP and other defendants liable for natural resource damages under the Oil Pollution Act. A trial on liability matters is scheduled to begin in February 2013, during which the United States will seek to establish that the spill was caused by BP’s gross negligence. BP could face billions of dollars of additional exposure in the civil lawsuit.

 

The guilty plea agreement and charges 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, Department of Interior, 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.

 

Today, the SEC simultaneously resolved civil securities fraud charges with BP in a $525 million settlement. The Justice Department also acknowledges and expresses its appreciation for the significant assistance provided by the SEC’s Division of Enforcement.

 

These cases are being prosecuted by Deepwater Horizon Task Force Deputy Directors Derek A. Cohen and Avi Gesser, and task force prosecutors Richard R. Pickens II, Scott M. Cullen, Colin Black, Edward Kang and Rohan Virginkar.

 

An indictment or information is merely a charge and a defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.

 

 

Due to public interest in this case, the Department of Justice is releasing documents that may not be in an accessible format. If you have a disability and the format of any material on the site interferes with your ability to access some information, please email the Department of Justice webmaster at [email protected] or contact Michael Passman at 202.514.2007. To enable us to respond in a manner that will be of most help to you, please indicate the nature of the accessibility problem, your preferred format (electronic format (ASCII, etc.), standard print, large print, etc.), the web address of the requested material, and your full contact information so we can reach you if questions arise while fulfilling your request.

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Related Materials:

BP Guilty Plea
BP Information
Kaluza Vidrine Indictment
Rainey Indictment
Assistant Attorney General Lanny A. Breuer Speaks at the BP Press Conference

The Department of Justice has forfeited a Manhattan condominium and a Virginia residence – with a combined value of approximately $ 2.1 million – purchased with the proceeds of alleged bribes paid to the family of the former President of Taiwan, Shui-Bian Chen, as part of the department’s Kleptocracy Asset Recovery Initiative. Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division announced the forfeiture today with U.S . Immigration and Customs Enforcement (ICE) Director John Morton.

On Oct. 23, 2012, U.S. District Judge Norman M oon of the Western District of Virginia entered a final forfeiture judgment against a residence in Keswick, Va., and On Oct. 24, 2012, U.S. District Judge Katherine Forrest in the Southern District of New York entered a final forfeiture judgment against a condominium in Manhattan. Both properties were previously owned by the former first family of Taiwan through a British Virgin Islands shell company.

Today, ICE Homeland Security Investigations (HSI) took possession of the Virginia property.  The title of the Manhattan condominium has been vested through court order to the government.

According to the civil forfeiture complaints filed in this case, during former President Chen’s administration, Yuanta Securities Co. Ltd. paid a bribe of 200 million New Taiwan dollars (equivalent to approximately $6 million USD) to former first lady Sue-Jen Wu in 2004 to ensure that the Taiwan government would not oppose Yuanta’s bid to acquire a financial holding company.

The former first family used Hong Kong and Swiss bank accounts, British Virgin Island companies and a St. Kitts and Nevis trust to purchase the two properties. One of the shell companies, Avallo Limited, which held title to both properties through U.S. domestic companies, settled both forfeiture actions under terms that provide for the sale of the property and forfeiture to the U.S. government of approximately 85 percent of the net proceeds from the sale of both properties.

“The Kleptocracy Initiative was established to prevent corrupt leaders from using the United States as a safe haven for their ill-gotten gains,” said Assistant Attorney General Breuer.  “The former president of Taiwan’s family allegedly accepted millions in bribes in exchange for official action favoring Yuanta Securities, and we have now taken possession of two valuable properties purchased with their alleged spoils.  We are committed to using every tool available to root out foreign official corruption.”

“This most recent seizure of luxury properties in New York City and Keswick, Va. belonging to the son of the former President of Taiwan Shui-Bian Chen is part of a continued effort by Homeland Security Investigations special agents to identify, locate, and seize properties and accounts in the United States belonging to him and his family,” said ICE Director Morton. “HSI will continue to find and seize the U.S. assets of foreign corrupt officials who try to use our country to conceal the illicit proceeds and profits of their crimes.”

The case was prosecuted by Deputy Chief Linda Samuel and Trial Attorney Jennifer Wallis of the Criminal Division’s Asset Forfeiture and Money Laundering Section. The Criminal Division’s Office of International Affairs provided valuable assistance. The case was investigated by ICE- HSI’s Foreign Corruption Investigations Group, the HSI Miami Asset Identification and Removal Group and the HSI Attaché Hong Kong, with assistance from the Taiwan Ministry of Justice, Special Investigations Division.

This case is part of the Justice Department’s Kleptocracy Asset Recovery Initiative. This initiative is carried out by a dedicated team of prosecutors in the Asset Forfeiture and Money Laundering Section, working in partnership with federal law enforcement agencies to forfeit the proceeds of foreign official corruption and where appropriate return those proceeds to benefit those harmed.

Individuals with information about possible proceeds of foreign corruption located in or laundered through institutions in the United States should contact federal law enforcement or send an email to [email protected] .

HSI’s Foreign Corruption Investigations Group in Miami targets corrupt foreign officials around the world that attempt to utilize U.S. financial institutions to launder illicit funds. The group conducts investigations into the laundering of proceeds emanating from foreign public corruption, bribery or embezzlement. The objective is to prevent foreign derived ill-gotten gains from entering the U.S. financial infrastructure, to seize identified assets in the United States and repatriate these funds on behalf of those affected.

Two former employees of the Alabama Administrative Office of the Courts were indicted today in Montgomery, Ala., for stealing the programming code for a sensitive court data system, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney Joyce White Vance for the Northern District of Alabama.

 

The indictment charges Michael David Carroll, 58, and Jill Hawthorne, 35, both of Montgomery, with one count ofstealing property having a value of $5,000 or more by an employee of a state or local government agency that receives $10,000 or more annually in federal assistance. Carroll is the former Director of Information Systems for the Alabama Administrative Office of the Courts (AOC). Hawthorne is a former database administrator for AOC.

 

According to the indictment, Carroll and Hawthorne stole the code for the AOC’s county court records database called Namemaster. The indictment also alleges that Carroll and Hawthorne stole the digital blueprint, known as the schema, for how the Namemaster database was constructed. A database schema often includes information concerning tables, fields, relationships, views, indexes and other such elements.

 

According to a publicly filed search warrant affidavit, Hawthorne and Carroll facilitated the unlawful transfer of the code and schema for Namemaster to an Orlando-based private software development company CyberBest Technology Inc. They also allegedly facilitated the transfer to CyberBest of hundreds of thousands of Jefferson County, Ala., court records from the state Namemaster database.

 

If convicted, Carroll and Hawthorne each face a maximum penalty of 10 years in prison and a $250,000 fine.

The case is being prosecuted by Assistant U.S. Attorney David Estes for the Northern District of Alabama and Trial Attorney William Hall of the Criminal Division’s Computer Crime and Intellectual Property Section. The case was investigated by the U.S. Secret Service, Alabama Bureau of Investigation and Alabama Attorney General’s Office.

 

Indictments are only charges and not evidence of guilt. A defendant is presumed to be innocent until and unless proven guilty.

The Department of Justice (DOJ) and the U.S. Securities and Exchange Commission (SEC) today released A Resource Guide to the U.S. Foreign Corrupt Practices Act (the Guide). The 120-page Guide provides a detailed analysis of the U.S. Foreign Corrupt Practices Act (FCPA) and closely examines the DOJ and SEC’s approach to FCPA enforcement.

 

The Guide provides helpful information to enterprises of all sizes – from small businesses doing their first transactions abroad to multi-national corporations with subsidiaries around the world. The Guide addresses a wide variety of topics, including who and what is covered by the FCPA’s anti-bribery and accounting provisions; the definition of a “foreign official”; what constitute proper and improper gifts, travel and entertainment expenses; facilitating payments; how successor liability applies in the mergers and acquisitions context; the hallmarks of an effective corporate compliance program; and the different types of civil and criminal resolutions available in the FCPA context. On these and other topics, the Guide takes a multi-faceted approach toward setting forth the statute’s requirements and providing insights into DOJ and SEC’s enforcement practices. It uses hypotheticals, examples of enforcement actions and matters DOJ and SEC have declined to pursue, and summaries of applicable case law and DOJ opinion releases.

 

“The fight against corruption is a law enforcement priority of the United States,” said Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division. “Our FCPA enforcement is critical to protecting the integrity of markets for American companies doing business abroad, and we will continue to make clear that bribing foreign officials is not an acceptable shortcut. The Guide is an important illustration of our transparency and a useful reference for companies and individuals who wish to act responsibly and in compliance with the law.”

 

“Investors must have faith that the economic performance of public companies reflects lawful considerations of markets, price and product rather than a mirage resulting from bribery and corruption,” said Robert Khuzami, Director of the SEC’s Division of Enforcement. “This guide will protect investors by assisting businesses in preventing such unlawful behavior, thus avoiding FCPA violations in the first place, which is in the interest of law enforcement and business alike.”

 

The Guide is available to the public free of charge online at www.justice.gov/criminal/fraud/fcpa and at www.sec.gov/spotlight/fcpa.shtml.

Related Materials:

FCPA Guide Fact Sheet
A Resource Guide to the U.S. Foreign Corrupt Practices Act

WASHINGTON – Anthony L. Dinunzio, the acting leader of the New England La Cosa Nostra (NELCN) crime family, was sentenced today to serve 78 months in federal prison for his role in a racketeering conspiracy to extort protection payments from adult entertainment businesses in Rhode Island.

Dinunzio’s sentence was announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; Peter F. Neronha, U.S. Attorney for the District of Rhode Island; Richard Deslauriers, Special Agent in Charge of the FBI’s Boston Field Office; Colonel Steven G. O’Donnell, Superintendent of the Rhode Island State Police; and Providence, R.I., Public Safety Commissioner Steven M. Paré.

“Today, the admitted leader of the New England La Cosa Nostra was sentenced to prison for the years of significant harm he caused to the people of Rhode Island,” said Assistant Attorney General Breuer.  “Anthony Dinunzio and his NELCN subordinates used threats of violence to extort protection payments from business owners throughout the state, and his sentence sends a powerful message about the department’s determination to hold mafia leaders and associates to account.”

“Prosecution of Mr. Dinunzio and his fellow LCN leaders, members and associates was a true team effort, in which attorneys from the Criminal Division and this office, the Rhode Island State Police, the Providence Police and the FBI all played a critical part,” said U.S. Attorney Peter F. Neronha.  “As a result of their painstaking, excellent work, Mr. Dinunzio and his fellow career criminals are going to federal prison for long periods of time.  Rhode Island, and New England as a whole, is a better and safer place today as a result of their work.”

“Over the last several years, the FBI and its federal, state and local law enforcement partners have undeniably shattered Omerta, the New England LCN’s code of silence,” said FBI Boston Special Agent in Charge DesLauriers.  “Through persistent, methodical and unyielding investigations, Mr. Dinunzio and others in the LCN know they no longer are able to rely on their sworn bonds for protection from the FBI and our partners.”

Dinunzio, 53, of East Boston, Mass., was sentenced today by U.S. District Court Judge William E. Smith in Providence, R.I.  In addition to his prison term, Dinunzio was sentenced to serve three years of supervised release.

Dinunzio pleaded guilty on Sept. 13, 2012, to one count of conspiracy to participate in a racketeering enterprise (RICO).

According to court documents, Dinunzio was a member and leader of the NELCN from at least 2002.  At the time of his guilty plea, Dinunzio admitted to committing multiple acts of extortion and knowingly assisted in a criminal racketeering conspiracy through the oversight and receipt of $2,000 to $6,000 in monthly protection payments, paid in cash by the owners and operators of several adult entertainment businesses in Rhode Island.  Dinunzio also admitted to obstructing or impeding the administration of justice by, among other methods, attempting to influence, delay or prevent witness testimony related to the investigation and prosecution of NELCN members.

Previously, seven leaders, underbosses, members and associates of the NELCN have pleaded guilty and been sentenced to federal prison for their involvement in the racketeering and extortion conspiracy to extort protection payments from adult entertainment businesses and individuals in Rhode Island during the past two decades.  Admitted NELCN crime boss Luigi “Louie” Manocchio is serving a sentence of 66 months in prison.  Edward “Eddy” Lato, an admitted capo, is serving a sentence of 108 months in prison.  Alfred “Chippy” Scivola, an admitted NELCN member, is serving a sentence of 46 months in prison.  Admitted NELCN associates Richard Bonifiglia and Albino “Albie” Folcarelli are both serving sentences of 84 months in prison.  Raymond “Scarface” Jenkins is serving a sentence of 37 months in prison.  And Thomas Iafrate is serving a sentence of 30 months in prison.

A ninth defendant, Theodore Cardillo, 69, has signed a plea agreement and agreed to plead guilty to a racketeering charge contained in a second superseding indictment in this matter.  A change-of-plea and sentencing hearing has been scheduled for Dec. 11, 2012.

Colonel O’Donnell of the Rhode Island State Police said, “La Cosa Nostra historically prides itself on preying on the weak to exploit their ideology of greed and power.  The factors that brought them “power”, has contributed to their demise.”

Providence Public Safety Commissioner Paré added, “The prosecution and sentencing of Anthony Dinunzio is an example of government from federal, state and local law enforcement aggressively investigating organized criminal behavior and incarcerating those who use fear, intimidation, violence and threats to extort money from businesses in Providence.  We will continue to seek severe penalties with prison sentences for this type of criminal.  We will not let up until we rid this criminal activity from our community.”

The cases are being prosecuted by Assistant U.S. Attorney William J. Ferland of the District of Rhode Island and Trial Attorney Sam Nazzaro of the Criminal Division’s Organized Crime and Gang Section.  The matter was investigated by the FBI, the Rhode Island State Police and the Providence Police Department.

WASHINGTON – The Department of Justice’s Antitrust Division issued the following statement today regarding Entergy Corp.’s commitments to join a regional transmission organization (RTO) and divest its transmission system; Entergy’s proposed acquisitions of the Hinds and Hot Spring generating facilities in Mississippi and Arkansas, respectively, from KGen Power Corporation; and the division’s open investigation into Entergy’s alleged anticompetitive conduct:

 
“After a thorough review, and in light of the forthcoming changes in Entergy’s service area, the Antitrust Division has determined that Entergy’s acquisitions of KGen’s power plants in Jackson, Miss., and Hot Spring County, Ark., are unlikely to substantially lessen competition, and is closing its investigation into the proposed transactions.

 

“In addition to the merger investigation of the KGen transactions, the division has been examining allegations that Entergy has engaged in exclusionary conduct in its four-state utility service area spanning parts of Arkansas, Louisiana, Mississippi and Texas. That investigation remains open. The conduct investigation has focused on whether certain of Entergy’s power generation dispatch, transmission planning and power procurement practices constitute exclusionary conduct under Section 2 of the Sherman Act.

 

“If Entergy follows through on its transmission system commitments, the Antitrust Division’s concerns will be resolved.

 

“The division has been investigating the effect of several of Entergy’s practices on competition and barriers to entry. The division has also evaluated professed efficiency and regulatory justifications, which have not been persuasive.

 

“Specifically, the division has been exploring whether Entergy has harmed consumers by exercising its control over its transmission system and dominant fleet of gas-fired power plants to exclude rival operators of low-cost combined-cycle gas turbine (CCGT) power plants from competing to sell long-term power.  In particular, the division has been evaluating whether Entergy’s practices have effectively foreclosed these more efficient rivals from obtaining long-term firm transmission service, a necessary input for selling long-term power products to wholesale customers in the Entergy service area.  As part of the conduct investigation, the division has also been reviewing the competitive impact of, and circumstances surrounding, Entergy’s serial acquisition of rivals’ CCGT power plants, including the KGen plants.

 

“Since the division began its investigation, Entergy announced that it intends to join the Midwest Independent Transmission System Operator (MISO) RTO and has entered into an agreement to divest its electric transmission business to ITC Holdings Corp. (ITC), an independent transmission company. In recent months, Entergy has initiated the state and federal regulatory processes in support of these significant structural changes, secured conditional MISO approval from several state regulators, and committed its utilities to a target MISO integration date of December 2013.

 
“Entergy’s commitments to obtain membership in an RTO and divest its transmission system to a third party with the incentive to make efficient transmission investments are significant steps towards restoring competition in the Entergy service area. If Entergy follows through on its commitments, these measures will address the Antitrust Division’s concerns by eliminating Entergy’s ability to maintain barriers to wholesale power markets, ensuring that all Entergy service area generation is dispatched independently and at lowest cost, increasing market transparency and oversight, and properly aligning incentives for the construction of transmission. Such measures will also directly benefit consumers, who will ultimately enjoy lower electricity prices and improved reliability as a result of RTO integration and the transmission system divestiture. The division does not endorse any particular RTO or independent transmission company.

 

“The division will closely monitor developments, and in the event that Entergy does not make meaningful and timely progress, the division can and will take appropriate enforcement action, if warranted.”

The Department of Justice and the U.S. Environmental Protection Agency (EPA) today announced a settlement with two former importers of highway motorcycles, recreational vehicles and small spark ignition engines. The defendants, Yuan Cheng International Group Inc. (YCIG) and NST Inc. (NST), located in Montclair, Calif., allegedly imported and sold vehicles and engines from China in violation of Clean Air Act requirements.

The settlement resolves allegations that, between 2006 and 2011, the companies imported and introduced into commerce 17,521 recreational vehicles, highway motorcycles and nonroad spark ignition engines without proper EPA certifications required under the Clean Air Act to prevent excess emissions of pollutants. Vehicles and engines that are not certified may be operating without proper emissions controls and can emit excess carbon monoxide and nitrogen oxides and cause respiratory illnesses, aggravate asthma and contribute to the formation of ground level ozone or smog. The settlement also resolves claims for failure to adequately respond to EPA’s requests for information and labeling violations under the Clean Air Act.

The settlement requires the companies and John Cheng and Jenny Yu, senior company executives, to pay a combined civil penalty of $50,000. This amount is based on the United States’ determination that the parties have a limited ability to pay a civil penalty in this matter. Both companies have ceased importing vehicles and engines and are now dissolved. In the fall of 2010, NST agreed to pay $250,000 to the state of California to resolve similar violations concerning the illegal sale of uncertified vehicles.

“We will continue to vigorously enforce the law to ensure that imported vehicles and engines comply with U.S. laws so that American consumers get environmentally sound products and violators do not gain an unfair economic advantage,” said Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division of the Department of Justice. “By holding individuals personally accountable under the consent decree, this settlement shows not only that we will pursue companies who violate the law, but where appropriate, will take additional measures to ensure that individual executives who act on behalf of companies cannot repeat the same conduct under a new corporate identity.”

In addition, Mr. Cheng and Ms. Yu must enter into a compliance plan with EPA prior to any future importation, distribution, selling, or offering for sale of any products covered by the Clean Air Act. They must also provide EPA with notice prior to forming any U.S. business entity that engages in the importation, distribution, selling or offering for sale of any products covered by the Clean Air Act, or before individually engaging in such activities. Mr. Cheng and Ms. Yu may be liable for any additional penalties for any violations of the settlement agreement, including $25,000 per vehicle or engine imported, sold or distributed that is not in accordance with an EPA-approved compliance plan, and up to $5,000 per day for each failure to provide notice to EPA as mentioned above.

John Cheng (also known as Yuan Cheng) was the sole shareholder, director, president, secretary, chief financial officer and treasurer of the YCIG. NST was the corporate successor to YCIG after YCIG dissolved. Cheng’s wife, Jenny Yu, was the president, secretary, chief financial officer, one of two directors and a 50 percent shareholder of NST. Mr. Cheng was the other 50 percent shareholder of NST. Both Cheng and Yu are individually bound by the terms of the settlement and are personally jointly and severally liable for the liabilities and obligations arising from the consent decree.

The Clean Air Act prohibits any vehicle or engine from being imported and sold in the United States unless it is covered by a valid, EPA-issued certificate of conformity indicating that the vehicle or engine meets applicable federal emission standards. The certificate of conformity is the primary way EPA ensures that imported vehicles and engines meet emission standards. This settlement is part of an ongoing effort by EPA to ensure that all imported vehicles and engines comply with the Clean Air Act’s requirements.

The consent decree is subject to a 30-day public comment period and approval by the federal court. Once it is published in the Federal Register, a copy of the consent decree will be available on the Justice Department website at www.usdoj.gov/enrd/Consent_Decrees.html .

Robroy MacInnes, 54, of Fort Myers, Fla., Robert Keszey, 47, of Bushnell, Fla., and Glades Herp Farm Inc., were charged in a two-count indictment today in federal court in Philadelphia, announced Ignacia S. Moreno, Assistant Attorney General of the Justice Department’s Environment and Natural Resources Division and Zane David Memeger, U.S. Attorney for the Eastern District of Pennsylvania. The indictment charges MacInnes, Keszey and the Florida business they co-own, Glades Herp Farm, with conspiracy to traffic in endangered and threatened reptiles, as well as charging MacInnes and Glades with trafficking in protected timber rattlesnakes in violation of the Lacey Act.

According to the indictment, between 2007 and 2008, the defendants collected protected snakes from the wild in Pennsylvania and New Jersey, purchased protected eastern timber rattlesnakes that had been illegally collected from the wild in violation of New York law, and transported federally threatened eastern indigo snakes from Florida to Pennsylvania. The indictment also charges that defendants MacInnes and Glades violated the Lacey Act by purchasing illegal eastern timber rattlesnakes and having the snakes transported to Florida.

The eastern timber rattlesnake is a species of venomous pit viper native to the Eastern United States, and is considered endangered in New Jersey and threatened in New York. It is also illegal to possess an eastern timber rattlesnake without a permit in Pennsylvania. The eastern indigo snake, the longest native North American snake species, is listed as threatened by both Florida and Federal law.

The Lacey Act, one of the oldest statutes in the United States, prohibits interstate trafficking in wildlife known to be illegally obtained. The maximum penalty for conspiring to commit offenses and for violations of the Lacey Act is up to five years in prison and a $250,000 fine for each violation.

The allegations in the indictment are mere accusations and all persons are presumed innocent until and unless proven guilty beyond a reasonable doubt in a court of law.

This case is being investigated by the U.S. Fish and Wildlife Service, Office of Law Enforcement. 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 Assistant U.S. Attorney Mary Kay Costello of the U.S. Attorney’s Office for the Eastern District of Pennsylvania.

Chase McClary, 24, of Johnsonville, S.C., was sentenced today in federal court to four years in prison followed by three years supervised release for his racially-motivated attack of an African-American teenager.

In June 2012, McClary pleaded guilty to violating the Matthew Shepard James Byrd, Jr Hate Crimes Prevention Act by violently assaulting an African-American teenager. During his guilty plea, McClary admitted that in August 2010, he approached a 16-year-old African-American male and struck him numerous times with the jagged end of a broken coffee mug because of the victim’s race. The attack resulted in severe injuries to the victim’s head, face and neck.

“The Department of Justice is committed to aggressively prosecuting hate-fueled acts of violence,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “Today’s sentence makes clear that racially-motivated attacks will not be tolerated in this country.”

“Working with the Civil Rights Division, this U.S. Attorney’s Office will continue to prioritize the prosecution of hate crimes and other civil rights violations in the District of South Carolina,” said William N. Nettles, U.S. Attorney for the District of South Carolina.

This case was investigated by Special Agent Steven Stokes of the FBI, with assistance from the Florence County Sheriff’s Investigator Alvin Powell, and is being prosecuted by Assistant U.S. Attorney Brad Parham and Civil Rights Division Trial Attorney Christopher Lomax.

Khalid Ali-M Aldawsari, 22, a citizen of Saudi Arabia and resident of Lubbock, Texas, was sentenced today by U.S. District Judge Donald E. Walter in federal court in Amarillo, Texas, to life in prison.

 

Aldawsari was convicted on June 27, 2012, on an indictment charging one count of attempted use of a weapon of mass destruction in connection with his purchase of chemicals and equipment necessary to make an improvised explosive device (IED) and his research of potential U.S. targets, including persons and infrastructure. He was lawfully admitted into the United States in 2008 on a student visa and was enrolled at South Plains College near Lubbock.

 

Today’s announcement was made by Sarah R. Saldaña U.S. Attorney for the Northern District of Texas; Lisa Monaco, Assistant Attorney General for National Security; and Diego G. Rodriguez, Special Agent in Charge of the FBI Dallas Field Division.

 

According to court documents and evidence presented during trial, at the time of his arrest last year, Aldawsari had been researching online how to construct an IED using several chemicals as ingredients.  He had also acquired or taken a substantial step toward acquiring most of the ingredients and equipment necessary to construct an IED and he had conducted online research of several potential U.S. targets.  In addition, he had allegedly described his desire for violent jihad and martyrdom in blog postings and a personal journal.

 

“This case, in which private citizens paid attention to details and notified authorities of their suspicions, serves as a reminder to all private citizens that we must always be observant and vigilant, as there are some who intend to cause great harm,” said U.S. Attorney Saldaña. “Khalid Aldawsari, acting as a lone wolf, may well have gone undetected were it not for the keen observations of private citizens. We owe them, and all the hundreds of hard-working members of our law enforcement community, our deepest gratitude.”

 

“Khalid Aldawsari came to this country intent on carrying out an attack. He then began purchasing ingredients to construct a bomb and was actively researching potential targets in America. Thanks to the hard work of many agents, analysts and prosecutors, his plot was thwarted before anyone was harmed; he was convicted at trial and, today at sentencing, he was held accountable for his actions,” said Assistant Attorney General Monaco.

 

“Today’s sentencing demonstrates our commitment to detecting, investigating and prosecuting individuals who seek to do harm to others in our country. Our success was the result of the cooperation of law enforcement and intelligence resources, particularly, the FBI’s North Texas Joint Terrorism Task Force, the Texas Tech Police Department, the Lubbock Police Department and the Lubbock County Sheriff’s Office,” said FBI Special Agent in Charge Rodriguez. “The dedicated agents, officers, and analysts; the computer forensics team; and the linguists are all to be commended for their diligent work on this investigation and the U.S. Attorney’s Office in the Northern District for the successful prosecution of Mr. Aldawsari.”

 

The government presented evidence that on Feb. 1, 2011, a chemical supplier reported to the FBI a suspicious attempted purchase of concentrated phenol by a man identifying himself as Khalid Aldawsari.  Phenol is a toxic chemical with legitimate uses, but can also be used to make the explosive trinitrophenol, also known as T.N.P., or picric acid.  Ingredients typically used with phenol to make picric acid, or T.N.P., are concentrated sulfuric and nitric acids. 

 

Aldawsari attempted to have the phenol order shipped to a freight company so it could be held for him there, but the freight company told Aldawsari that the order had been returned to the supplier and called the police.  Later, Aldawsari falsely told the supplier he was associated with a university and wanted the phenol for “off-campus, personal research.”  Frustrated by questions being asked over his phenol order, Aldawsari cancelled his order, placed an order with another company, and later emailed himself instructions for producing phenol.  In December 2010, he had successfully purchased concentrated nitric and sulfuric acids.

 

Aldawsari used various email accounts in researching explosives and targets, and often sent emails to himself as part of this process. He emailed himself a recipe for picric acid, which was described in the email as a “military explosive” and also emailed himself instructions on how to convert a cell phone into a remote detonator and how to prepare a booby-trapped vehicle using household items.  Aldawsari also purchased many other items, including a Hazmat suit, a soldering iron kit, glass beakers and flasks, a stun gun, clocks and a battery tester.

 

Excerpts from a journal found at Aldawsari’s residence indicated that he had been planning to commit a terrorist attack in the United States for years.  One entry describes how Aldawsari sought and obtained a particular scholarship because it allowed him to come directly to the United States and helped him financially, which he said “will help tremendously in providing me with the support I need for Jihad.”  The entry continues: “And now, after mastering the English language, learning how to build explosives and continuous planning to target the infidel Americans, it is time for Jihad.” 

 

In another entry, Aldawsari wrote that he was near to reaching his goal and near to getting weapons to use against infidels and their helpers.  He also listed a “synopsis of important steps” that included obtaining a forged U.S. birth certificate; renting a car; using different driver’s licenses for each car rented; putting bombs in cars and taking them to different places during rush hour; and leaving the city for a safe place.

 

Aldawsari conducted research on various targets and emailed himself information on these locations and people. One of the documents he sent himself, with the subject line listed as “Targets,” contained the names and home addresses of three American citizens who had previously served in the U.S. military and had been stationed for a time at Abu Ghraib prison in Iraq. In others, Aldawsari sent himself the names of 12 reservoir dams in Colorado and California and listed two categories of targets: hydroelectric dams and nuclear power plants.  He also sent himself an email titled “Tyrant’s House,” in which he listed the Dallas address for former President George W. Bush.  Aldawsari also conducted research that indicated he considered using infant dolls to conceal explosives and the possible targeting of a nightclub with an explosive concealed in a backpack.

 

This case was investigated by the FBI’s Dallas Joint Terrorism Task Force, which includes many federal, state and local partners, with assistance from the Lubbock Police Department and the Texas Tech Police Department. The prosecution was handled by Assistant U.S. Attorneys Jeffrey R. Haag, Denise Williams and Matthew J. Kacsmaryk and Trial Attorney David Cora from the Counterterrorism Section of the Justice Department’s National Security Division.

Roquette America, Inc., has agreed to pay a $4.1 million civil penalty to settle alleged violations of the Clean Water Act and its National Pollutant Discharge Elimination System (NPDES) permit at its grain processing facility in Keokuk, Iowa, the Department of Justice and the Environmental Protection Agency (EPA) announced today.

As early as 2008, Roquette was aware that its waste water treatment plant was marginally adequate and that it could not handle spills or surges in loading. Instead of constructing additional containment structures for waste water surges, or routing spills to the waste water treatment plant, Roquette allowed the industrial waste to be discharged directly into the Mississippi River and Soap Creek.

“Roquette’s actions resulted in over a thousand permit violations and allowed the discharge of untreated industrial waste into the Mississippi River and another Iowa waterway even after it was informed on numerous occasions it was violating its state permit and federal law,” said Ignacia S. Moreno, Assistant Attorney General of the Justice Department’s Environment and Natural Resources Division. “This settlement holds Roquette accountable for its multiple violations of the nation’s Clean Water Act and requires sewer improvements, wastewater treatment upgrades, enhanced monitoring and independent compliance audits that will benefit public health and the environment for the people of Iowa for years to come.”

“The magnitude of these violations warrants the magnitude of the penalty,” said EPA Region 7 Administrator Karl Brooks. “The Mississippi River is a vital waterway, used by millions of Americans for commerce, recreation and drinking water. It is imperative that industrial facilities abide by their discharge permits to protect our valuable water resources.”

The Iowa Department of Natural Resources has issued three administrative orders and eight notices of violation to Roquette since 2000. Despite these orders and notices, Roquette continued to overload its waste water treatment plant and failed to address the deficiencies at other portions of its facility, resulting in permit violations and illegal discharges of untreated industrial waste.

The Keokuk facility violated its NPDES permit at least 1,174 times, and on at least 30 occasions illegally discharged via storm drains resulting in at least 250,000 gallons of industrial waste being released into the Mississippi River and Soap Creek. In addition to these permit violations and illegal discharges, Roquette discharged partially treated industrial waste from its waste water treatment plant, and discharged steam condensate into Soap Creek through an unpermitted outfall.

In addition to paying the penalty, Roquette will complete other requirements valued at more than $17 million to further protect the Mississippi River and Soap Creek. Among these requirements are the completion of a sewer survey to identify possible discharge locations, the implementation of sewer modifications, the construction of upgrades to the wastewater treatment plant, and the performance of enhanced effluent monitoring. In addition, Roquette will obtain annual third party audits of its compliance with the operations and maintenance program, the Storm Water Pollution Prevention Program, the company’s NPDES permits, and the compliance requirements set out in the consent decree.

The consent decree is subject to a 30-day public comment period and approval by the federal court. Once it is published in the Federal Register, a copy of the consent decree will be available on the Justice Department website at www.usdoj.gov/enrd/Consent_Decrees.html

Learn more about EPA’s civil enforcement of the Clean Water Act: www.epa.gov/compliance/civil/cwa/index.html

  The Justice Department has filed a lawsuit against the city of San Jacinto, Calif., alleging violations of the Fair Housing Act and the Americans with Disabilities Act based on its treatment of group homes for persons with disabilities. This lawsuit is part of the Justice Department’s continuing effort to enforce civil rights laws that require states and municipalities to end discrimination against, and unnecessary segregation of, persons with disabilities.

 

The lawsuit, filed on Friday in the U.S. District Court for the Central District of California, alleges that the city has impermissibly restricted the ability of group homes for people with disabilities to operate within the city. Under the city’s zoning code, group homes that are not required to be licensed by the state, as well as some licensed homes, are not permitted uses in any zoning district within the city, and their ability to operate in multi-family zones is restricted. The United States’ lawsuit further alleges that the city targeted housing for persons with disabilities for enforcement actions, including a November 2008 sweep in which city and county officials, including armed and uniformed police officers and sheriff’s deputies, appeared at homes unannounced and interrogated residents with disabilities from a prepared questionnaire that included intrusive questions targeted to persons with mental disabilities. The complaint also alleges that the city has conditioned the grant of reasonable accommodations on the adoption of unwarranted limitations on the residents of homes for persons with disabilities.

 

This lawsuit arose as a result of complaints filed with the U.S. Department of Housing and Urban Development (HUD) by the operators of group homes who were impacted by the city’s discriminatory enforcement activities.

 

The suit seeks a court order preventing the city from enforcing its laws in a way that unlawfully discriminates on the basis of disability, and prohibiting the city from failing to make reasonable accommodations. It also seeks monetary damages to compensate victims and a civil penalty.

 

“No person should be denied an equal opportunity for housing in his or her community, or suffer harassment or intimidation, because he or she is a person with a disability,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The Justice Department is committed to preventing discriminatory treatment of people with disabilities.”

 

“This suit is part of my office’s continuing efforts, in partnership with DOJ’s Civil Rights Division, to ensure that all residents of the Central District are accorded the rights to which they are entitled under the law,” said André Birotte Jr., U.S. Attorney for the Central District of California.  “Under the law, people with disabilities, including mental disabilities, must be given the opportunity to live in our community, free from discriminatory efforts to exclude them.  This suit seeks to ensure that this opportunity is fully and fairly provided.”

“Local governments may not zone out people with disabilities from the opportunity to live in mainstream communities,” said John Trasviña, HUD Assistant Secretary for Fair Housing and Equal Opportunity. “HUD and DOJ are united in our efforts to combat unlawful interference with the rights of people with disabilities, whether in the form of  unfair zoning restrictions, selective enforcement of ordinances, or otherwise.”

The federal Fair Housing Act prohibits discrimination in housing on the basis of race, color, national origin, religion, sex, familial status and disability. Title II of the Americans with Disabilities Act requires that State and local governments give people with disabilities an equal opportunity to benefit from all of their programs, services and activities. More information about the Civil Rights Division and the laws it enforces is available at www.usdoj.gov/crt . Individuals who believe they have been victims of housing discrimination or have information related to this lawsuit can call the Housing Discrimination Tip Line at 1-800-896-7743, e-mail the Justice Department at [email protected] , or contact the Department of Housing and Urban Development (HUD) at 1-800-669-9777.

 

The complaint is an allegation of unlawful conduct. The allegations must still be proven in federal court.

WASHINGTON – A former U.S. Army Major was sentenced today to 18 months in prison for his participation in a bribery scheme related to his activities as a contracting official in Camp Arifjan, Kuwait, in 2005 and 2006, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division.

 

James Momon Jr., 40, of Alexandria, Va., was sentenced today by U.S. District Judge Emmet G. Sullivan in the District of Columbia. In addition to his prison term, Momon was sentenced to serve three years of supervised release and pay $5.8 million in restitution, jointly and severally with co-defendants.

 

Momon pleaded guilty on Aug. 13, 2008, to two counts of bribery and one count of conspiracy.

 

According to plea documents, Momon, was involved in a criminal conspiracy to accept cash bribes from multiple U.S. Department of Defense (DoD) contracting firms that supplied bottled water and other goods and services to U.S. military bases in Kuwait. In return, Momon assisted in the award of contracts as well as blanket purchase agreements (BPA) – contracts that allow DoD to order supplies on an as-needed basis at a pre-negotiated price. Momon agreed to accept approximately $5.8 million from his co-conspirators as payment for his actions, including $1.6 million in cash and luxury items.

 

According to plea documents, Momon took over contracting duties at Camp Arifjan from former U.S. Army Major John C. Cockerham, who served as a contracting official in Kuwait in 2004 and 2005. Cockerham, who solicited and received bribes from DoD contractors in exchange for contracts and BPAs for bottled water and other goods and services, pleaded guilty for his role in the conspiracy in February 2008 and was sentenced to serve 210 months in prison and ordered to pay $9 million in restitution.

 

To date, a total of 19 individuals have pleaded guilty or been convicted at trial in the ongoing investigation of corrupt contracting at Camp Arifjan.

 

This case was prosecuted by Trial Attorneys Peter C. Sprung, Eric G. Olshan, Edward J. Loya Jr. and Timothy J. Kelly of the Criminal Division’s Public Integrity Section. The case is being investigated by special agents of the Defense Criminal Investigative Service, the Army Criminal Investigation Command Division, Internal Revenue Service-Criminal Investigation, the FBI and the Special Inspector General for Iraqi Reconstruction.

The United States has sued Charles Sewell of Bristol, Va., to bar him from promoting an alleged scheme involving fraudulent tax refund claims, the Justice Department announced today.

According to the government’s amended complaint, Sewell creates fraudulent types of Internal Revenue Service (IRS) Forms 1099 for other taxpayers and files them with the IRS. The fraudulent types of Forms 1099 are allegedly designed to help Sewell’s customers request large tax refunds to which they are not entitled, based on false claims of income earned and federal tax withheld. The complaint alleges that Sewell’s scheme is based on the “commercial redemption” theory, in which individuals make refund claims based on the bogus theory that the federal government maintains secret accounts for U.S. citizens and that taxpayers can gain access to the accounts by issuing 1099-OID forms to the IRS. The lawsuit alleges that Sewell’s customers sought $67 million in bogus refunds as a result of Sewell’s conduct.

Claiming bogus tax refunds based on false Forms 1099-OID is one of the IRS’s “Dirty Dozen” tax scams for 2012. 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 Documents:

United States v. Charles Sewell, et al.

First Amended Complaint for Permanent Injunction and Other Equitable Relief (PDF)

WASHINGTON – MoneyGram International Inc. – a global money services business headquartered in Dallas – has agreed to forfeit $100 million and enter into a deferred prosecution agreement (DPA) with the Justice Department in which it admits to criminally aiding and abetting wire fraud and failing to maintain an effective anti-money laundering program, as charged in an information filed today in the Middle District of Pennsylvania.

The announcement was made by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney Peter Smith for the Middle District of Pennsylvania; and Karen V. Higgins, Inspector in Charge, Philadelphia Division, U.S. Postal Inspection Service (USPIS).

According to court documents, MoneyGram was involved in mass marketing and consumer fraud phishing schemes, perpetrated by corrupt MoneyGram agents and others, that defrauded tens of thousands of victims in the United States.  MoneyGram also failed to maintain an effective anti-money laundering program in violation of the Bank Secrecy Act.  The Justice Department will return the forfeited funds to the victims of the fraud scheme through its Victim Asset Recovery Program.  

“MoneyGram’s broken corporate culture led the company to privilege profits over everything else,” said Assistant Attorney General Breuer.  “MoneyGram knowingly turned a blind eye to scam artists and money launderers who used the company to perpetrate fraudulent schemes targeting the elderly and other vulnerable victims.  In addition to forfeiting $100 million, which will be used to compensate victims, MoneyGram must for the next five years retain a corporate monitor who will report regularly to the Justice Department.”

U.S. Attorney Smith said, “Thousands of citizens in Pennsylvania and other states suffered heartbreaking financial losses for years because of these international telemarketing schemes which depended on MoneyGram’s facilities to give them an electronic highway to move their illegal profits quickly out of the country.  The determined work of U.S. Postal Inspectors and federal prosecutors disrupted and closed that electronic highway, hopefully for good.  This case provides a way to get restitution for victims and ensure that MoneyGram does its part to deter similar scams in the future.” 

“This agreement demonstrates the ongoing and important work of the U.S. Postal Inspection Service in protecting consumers all across America,” said Karen V. Higgins, Inspector in Charge, Philadelphia Division.  “Businesses are supposed to provide their customers with fair and honest services.  Today’s agreement reflects the commitment of the U.S. Postal Inspection Service in seeking justice and, to every extent possible, restitution for the most vulnerable in our society.”

As part of the DPA, MoneyGram has agreed to enhanced compliance obligations and structural changes to prevent a repeat of the charged conduct, including:

Creation of an independent compliance and ethics committee of the board of directors with direct oversight of the chief compliance officer and the compliance program; Adoption of a worldwide anti-fraud and anti-money laundering standard to ensure all MoneyGram agents throughout the world will, at a minimum, be required to adhere to U.S. anti-fraud and anti-money laundering standards; Adoption of a bonus system which rates all executives on success in meeting compliance obligations, with failure making the executive ineligible for any bonus for that year; and 
Adoption of enhanced due diligence for agents deemed to be high risk or operating in a high-risk area.

To oversee implementation and maintenance of these enhanced compliance obligations and evaluate the overall effectiveness of its anti-fraud and anti-money laundering programs, MoneyGram has agreed to retain an independent corporate monitor who will report regularly to the Justice Department.  Under the DPA, the department will recommend the dismissal of the criminal information in five years, provided MoneyGram fully abides by the DPA’s terms.

The Fraud Scheme

According to court documents, starting in 2004 and continuing until 2009, MoneyGram violated U.S. law by processing thousands of transactions for MoneyGram agents known to be involved in an international scheme to defraud members of the U.S. public.  MoneyGram profited from the scheme by collecting fees and other revenues on the fraudulent transactions. 

The scams – which generally targeted the elderly and other vulnerable groups – included posing as victims’ relatives in urgent need of money and falsely promising victims large cash prizes, various high-ticket items for sale over the Internet at deeply discounted prices or employment opportunities as “secret shoppers.”  In each case, the perpetrators required the victims to send them funds through MoneyGram’s money transfer system. 

Despite thousands of complaints by customers who were victims of fraud, MoneyGram failed to terminate agents that it knew were involved in scams.  As early as 2003, MoneyGram’s fraud department would identify specific MoneyGram agents believed to be involved in fraud schemes and recommended termination of those agents to senior management.  These termination recommendations were rarely accepted because they were not approved by executives in the sales department and, as a result, fraudulent activity grew from 1,575 reported instances of fraud by customers in the United States and Canada in 2004 to 19,614 reported instances in 2008.  Cumulatively, from 2004 through 2009, MoneyGram customers reported instances of fraud totaling at least $100 million. 

The USPIS and U.S. Attorney’s Office for the Middle District of Pennsylvania have been investigating and prosecuting telemarketing scams that used MoneyGram’s money transfer system and corrupt MoneyGram agents since 2007.  To date, the U.S. Attorney’s Office for the Middle District of Pennsylvania has brought conspiracy, fraud and money laundering charges against 28 former MoneyGram agents. 

Ineffective Anti-Money Laundering Program

MoneyGram’s involvement in this international fraud scheme resulted from a systematic, pervasive, and willful failure to meet its anti-money laundering (AML) obligations under the Bank Secrecy Act (BSA), a set of laws and regulations enacted by Congress to strengthen the U.S. financial system’s protections against criminal money laundering activity through financial institutions, including money services businesses like MoneyGram.  Court documents show that MoneyGram failed to meet its AML obligations by, among other things, failing to:

Implement policies or procedures governing the termination of agents involved in fraud and/or money laundering; Implement policies or procedures to file the required Suspicious Activity Reports (SARs) when victims reported fraud to MoneyGram on transactions over $2,000; File SARs on agents MoneyGram knew were involved in the fraud; Conduct effective AML audits of its agents and outlets; Conduct adequate due diligence on prospective and existing MoneyGram Agents by verifying that a legitimate business existed; and
Sufficiently resource and staff its AML program.

MoneyGram’s BSA failures spanned five years, and resulted, among other things, from the failure of its fraud and AML compliance functions to share information and from its regularly resolving disagreements between its sales and fraud departments in the sales department’s favor.  One notable such disagreement occurred in April 2007, when, at a meeting attended by senior MoneyGram executives, the fraud department recommended that 32 specific Canadian agents that were characterized as “the worst of the worst” in terms of fraud be immediately closed.  The sales department disagreed with the fraud department’s recommendation, and these outlets were not closed; instead, MoneyGram continued to process transactions from the 32 outlets despite continued complaints of fraud.

This case was prosecuted by Money Laundering and Bank Integrity Unit Trial Attorney Craig Timm of the Criminal Division’s Asset Forfeiture and Money Laundering Section (AFMLS) and Assistant U.S. Attorney Kim Douglas Daniel of the U.S. Attorney’s Office for the Middle District of Pennsylvania.  The forfeiture was handled by Acting Assistant Deputy Chief Jeannette Gunderson of AFMLS’ Forfeiture Unit.  The case was investigated by the Harrisburg, Pa., office of the USPIS, Philadelphia Division.

The Money Laundering and Bank Integrity Unit is a corps of prosecutors with a boutique practice aimed at hardening the financial system against criminal money laundering vulnerabilities by investigating and prosecuting financial institutions and professional money launderers for violations of the money laundering statutes, the Bank Secrecy Act and other related statutes. 

Information regarding victim compensation through the Victim Asset Recovery Program (VARP) will be posted on the Department of Justice’s victim website at http://www.justice.gov/criminal/vns/caseup/.  Persons who believe they were victims of the fraud scheme should visit that site for instructions on how to request compensation.

VARP, operated by AFMLS, is composed of a team of experienced professionals, including attorneys, accountants, auditors and claims analysts.  In hundreds of cases, VARP has successfully used its specialized expertise to efficiently convert forfeited assets to victim recoveries. 

An owner and sole operator of an environmental laboratory has been charged in U.S. District Court for the Southern District of Mississippi with falsification of records and obstructing a federal criminal investigation, announced U.S. Attorney for the Southern District of Mississippi Gregory K. Davis and Assistant Attorney General Ignacia S. Moreno of the Justice Department’s Environment and Natural Resources Division.

Tennie White, owner, operator and manager of Mississippi Environmental Analytical Laboratories Inc. was charged in a three-count felony indictment with two false statements counts and one count of obstructing proceedings.

According to the indictment, White was hired to perform laboratory testing of a manufacturer’s industrial process waste water samples and then to use those results to complete monthly discharge monitoring reports for submission to the Mississippi Department of Environmental Quality (MDEQ). The indictment alleges that from February to August 2009 White created three discharge monitoring reports (DMRs) that falsely represented that laboratory testing had been performed on samples when, in fact, such testing had not been done. The indictment further alleges that White created a fictitious laboratory report and presented it to her client for use in preparing another DMR.

The indictment further alleges that White made false statements to a federal agent during a subsequent criminal investigation.

An indictment is not a finding of guilt, and a defendant is presumed innocent unless and until proven guilty in a court of law.

The false statements charges carry a maximum sentence of five years in prison and a $250,000 fine per count. The obstructing proceedings charge carries a maximum sentence of 20 years in prison and a $250,000 fine.

This case is being prosecuted by Trial Attorney Richard J. Powers of the Environmental Crimes Section of the Justice Department’s Environment and Natural Resources Division, and Assistant U.S. Attorney Gaine Cleveland of the U.S. Attorney’s Office for the Southern District of Mississippi.

WASHINGTON – A Las Vegas mortgage agent was found guilty today for participation in a mortgage fraud scheme that netted $1.2 million in fraudulent mortgage loans, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney Daniel G. Bogden of the District of Nevada and Special Agent in Charge Kevin Favreau of the FBI’s Las Vegas Field Office.

After a four-day trial before U.S. District Judge Miranda Du in the District of Nevada, a federal jury convicted Heidi Haischer, 44, of one count of wire fraud and one count of conspiracy to commit wire fraud for submitting fraudulent loan documents to purchase two homes.

According to court documents and evidence presented at trial, Haischer submitted to lending institutions loan applications in which she misrepresented her income, submitted false verification of employment and misrepresented her intent to reside in one of the properties as her primary residence.  Evidence at trial established that Haischer participated in an illegal property flipping ring that fraudulently obtained properties that Haischer and her co-conspirators intended to sell for a profit.  Haischer and her co-conspirators also enriched themselves by collecting brokerage commissions generated by the sales of the properties.   

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

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

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

The Justice Department announced today that it has asked a federal court in Columbus, Ohio, to permanently bar John Allen from promoting tax-fraud schemes and preparing federal tax returns. The civil injunction lawsuit alleges that Allen, who does business as Allen & Associates, promotes several schemes involving the preparation of fraudulent federal income tax returns based on the false premise that his customers do not receive “wages” as defined by law.

The complaint alleges that Allen has promoted at least three tax-fraud schemes, moving from scheme to scheme when the Internal Revenue Service (IRS) identifies the bogus nature of the tax returns that are filed as part of Allen’s arrangement. The complaint alleges that, as part of the promotion, Allen prepares his customers’ tax returns, but does not sign the returns as the preparer. According to the complaint, Allen prepares frivolous letters addressed to the Secretary of the Treasury and the commissioner of the IRS on behalf of customers, and also aided a customer in an attempt to file a frivolous lien against the United States by preparing a bogus lien document and directing his customer to file it. Allen allegedly solicits up-front fees of $250 from customers to prepare their returns and handle any correspondence with the IRS, and asks for a “donation” of 10% of any refund issued to his customers by the IRS.

The complaint further alleges that Allen falsely holds himself out as an attorney to his customers and to third parties, including the IRS, despite being enjoined from the unauthorized practice of law by the Supreme Court of Ohio.

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

Related Documents:

United States v. John Allen, etc.

Complaint for Permanent Injunction and Other Relief

The Justice Department announced that it has entered into a settlement agreement with the Henry County School District in Henry County, Ga., to ensure that all students in the district are able to enroll in school, regardless of national origin or immigration status. The settlement agreement resolves the department’s investigation into allegations that the district improperly notified parents that their children would be withdrawn from school for not providing a social security number, and failed to make its enrollment procedures accessible to parents with limited proficiency in English.

 

Under the settlement agreement, the district will ensure that all parents understand that providing their child’s social security number is voluntary, and no child will be denied enrollment or attendance in school for declining to provide a social security number. The settlement agreement also requires the district to provide parents who have limited English proficiency with enrollment and registration information in a language they can understand. The district further agreed to conduct training for administrators and staff on registration and enrollment procedures and proper communication with limited English proficient parents.

 

“Public schools serve all children in this country, no matter where they or their parents were born,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “No one benefits when a child is kept out of the classroom. The Justice Department is committed to ensuring that all that students and their families are welcomed in school, regardless of background. ”

 

“No child should face barriers to enrolling in school,” said Sally Quillian Yates, U.S. Attorney for the Northern District of Georgia “We commend the Henry County School District for working collaboratively with the department and for taking the steps necessary to enroll all students and communicate effectively with limited English proficient families.”

 

The settlement agreement reflects guidance that the Georgia Department of Education issued to all Georgia school districts in September 2012, after the Justice Department raised concerns about student enrollment practices in the state. The new guidance makes clear that no student can be denied enrollment in any public school or program for declining to provide a social security number or declining to apply for a social security number.

 

The enforcement of Title IV of the Civil Rights Act of 1964, which prohibits discrimination on the basis of race or national origin in public schools, and of the Equal Educational Opportunities Act of 1974, which r equires schools to take appropriate action to overcome language barriers that impede students’ equal participation in instructional programs, are top priorities of the Justice Department’s Civil Rights Division. Additional information about the Civil Rights Division of the Justice Department is available on its website at www.justice.gov/crt.

Related Materials:

Henry County, Ga., School District Settlement

WASHINGTON – A former Special Agent in Charge of the U.S. Immigration and Customs Enforcement (ICE) Miami Office was sentenced today to serve 70 months in prison for transporting child pornography, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, Acting Special Agent in Charge Michael B. Steinbach of the FBI Miami Field Office and Sheriff Al Lamberti of the Broward County, Fla., Sheriff’s Office.

Anthony Mangione, 52, of Parkland, Fla., was sentenced by U.S. District Judge Kenneth A. Marra in West Palm Beach, Fla.  In addition to his prison term, Mangione was sentenced to serve 20 years of supervised release.

On July 16, 2012, Mangione pleaded guilty to one count of transportation of child pornography in U.S. District Court in the Southern District of Florida.  He was indicted on Sept. 27, 2011, by a grand jury in Fort Lauderdale, Fla.

According to court documents, between March 2010 and September 2010, Mangione used a computer and other means to transport visual depictions of minors engaging in sexually explicit conduct.  Specifically, according to court documents, Mangione established several AOL email accounts to transport numerous images of minors engaging in sexually explicit conduct, including transmitting several images to an individual in Delaware.

During the period of time in which he transported child pornography, Mangione served as the Special Agent in Charge for the ICE Miami Office.  Mangione was placed on administrative leave by ICE in April 2011 and has since retired.   

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

This case was prosecuted by Deputy Chief Alexandra R. Gelber and Trial Attorney Michael W. Grant of CEOS.  The investigation was conducted by the Broward County Sheriff’s Office and the FBI, with assistance from the Department of Homeland Security, Office of the Inspector General. 

An Army National Guard recruiter pleaded guilty today in the Western District of Texas for his role in a bribery and fraud scheme that caused approximately $98,000 in losses to the Army National Guard Bureau, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division.

 

Staff Sergeant Jermaine Britt, 39, of Richmond, Texas, pleaded guilty to a three-count criminal information charging him with one count of bribery, one count of conspiracy to commit bribery and wire fraud and one count of obstruction of justice. The criminal information was filed on Nov. 2, 2012, in the U.S. District Court for the Western District of Texas.

 

The case against Britt arises from an investigation involving allegations that former and current military recruiters and U.S. soldiers in the San Antonio and Houston areas engaged in a wide-ranging bribery and fraud scheme to illegally obtain fraudulent recruiting bonuses. To date, the investigation has led to charges againstten individuals, all of whom have now pleaded guilty.

 

According to court documents, in approximately September 2005, the National Guard Bureau entered into a contract with Document and Packaging Broker Inc. to administer a recruiting program designed to offer monetary incentives to soldiers of the Army National Guard who referred others to join. Through this program, a participating soldier could receive up to $2,000 in bonus payments for every person whom the participating soldier referred to join the Army National Guard. Based on certain milestones achieved by the referred soldier, a participating soldier would receive payment through direct deposit into the participating soldier’s designated bank account. To participate in the program, soldiers were required to create online recruiting assistant accounts.

 

According to court documents, Britt enlisted in the Army National Guard in approximately July 2005, and served as a military recruiter from approximately November 2006. Britt admitted that between approximately May 2008 and April 2011, he and other recruiters obtained the names and Social Security numbers of potential soldiers and provided them to recruiting assistants, including Stephanie Heller, with the understanding that these recruiting assistants would use the information to obtain fraudulent recruiting bonuses. The recruiting assistants used the information to claim they were responsible for referring these potential soldiers to join the Army National Guard, when they were not. In exchange, Britt admitted that he personally received a total of $23,750 in cash payments.

 

Britt also admitted that after learning of a federal investigation into the fraudulent bonus scheme, he attempted to persuade Heller to falsify her statements to special agents of the U.S. Army Criminal Investigation Command (Army CID agents), whom Britt understood at the time were conducting a federal investigation of Britt’s and Heller’s unlawful activities. Specifically, Britt coached Heller on how she could provide false exculpatory explanations to Army CID agents concerning, among other things, Heller’s large cash withdrawals from her personal bank account, Britt’s e-mails to Heller in which he provided her with the personal identifiers of potential soldiers, and Heller’s use of Britt’s military computer to make fraudulent referrals under her recruiting assistant account.

 

On Oct. 4, 2012, Stephanie Heller pleaded guilty to one count of bribery and one count of conspiracy to commit bribery and wire fraud in connection with her unlawful dealings with Britt and another recruiter and her personal receipt of approximately $44,500 in fraudulent recruiting bonuses.

 

The charge of bribery carries a maximum potential penalty of 15 years in prison, the charge of conspiracy carries a maximum potential penalty of five years in prison and the charge of obstruction carries a maximum potential penalty of 20 years in prison. Each charge also carries a maximum $250,000 fine, or twice the pecuniary gain or loss from the offense. Sentencing has been scheduled for Feb. 8, 2013, before Chief U.S. District Judge Fred Biery in San Antonio.

 

The case is being prosecuted by Trial Attorneys Edward J. Loya Jr., Brian A. Lichter, and Sean F. Mulryne of the Criminal Division’s Public Integrity Section. The case is being investigated by agents from the San Antonio Fraud Resident Agency of the Major Procurement Fraud Unit, U.S. Army Criminal Investigation Command.

William R. “Rusty” Miller, a real estate developer from Fairhope, Ala., has been indicted by a federal grand jury in Jackson, Miss., for the unpermitted filling of wetlands near Bay St. Louis, Miss., in violation of the Clean Water Act, announced U.S. Attorney for the Southern District of Mississippi Gregory K. Davis and Assistant Attorney General Ignacia S. Moreno of the Justice Department’s Environment and Natural Resources Division.

The indictment alleges that during 2007, Miller caused the excavation and filling of wetlands on a 1,710 acre parcel of undeveloped property in Hancock County, west of the intersection of Route 603 and Interstate 10. The indictment states that Miller was a part-owner of corporations that purchased and intended to develop the land. It alleges that in 2001 when Miller and his companies purchased the property, he was informed by a wetland expert that as much as 80 percent of the land was federally protected wetland connected by streams and bayous leading to the Gulf of Mexico and as such could not be developed without a permit from the U.S. Army Corps of Engineers. Such permits typically require that developers protect and preserve other wetlands to compensate for those they are permitted to fill and destroy. In spite of additional notice he had received of the prohibition against filling and draining wetland without authorization, the indictment alleges that Miller hired an excavation contractor to trench, drain, and fill large portions of the property to lower the water table and thus to destroy the wetland that would otherwise be an impediment to commercial development.

The indictment charges that Miller knowingly ditched, drained and filled wetland at 10 locations on the Hancock County property without having obtained a permit from the Army Corps of Engineers. It also charges him with the unauthorized discharge of silt, sand, vegetation, debris and other material into and from canals and ditches on the Hancock County property into tributaries of Bayou Marone, a tributary of the Jourdan River.

It is a felony under the Clean Water Act for any person knowingly to discharge pollutants into waters of the United States without a permit. Any person convicted of this offense is subject to imprisonment of up to three years and a penalty of not more than $250,000.

An indictment is merely an accusation, and a defendant is presumed innocent unless and until proven guilty in a court of law.

Thirty-four alleged members of the Aryan Brotherhood of Texas gang (ABT), including four of its most senior leaders,  have been indicted by a federal grand jury in Houston for allegedly conspiring to participate in a racketeering enterprise, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney Kenneth Magidson of the Southern District of Texas, Special Agent in Charge Melvin D. King of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Houston Division and FBI Special Agent in Charge Stephen L. Morris of the Houston Field Office.

The 17 count superseding indictment was returned by a federal grand jury on Oct. 22, 2012, and unsealed today in U.S. District Court in the Southern District of Texas. Fourteen individuals were taken into custody today, and 15 defendants charged in the superseding indictment are already in custody.  Five defendants remain at large.

 

“Today’s takedown represents a devastating blow to the leadership of ABT,” said Assistant Attorney General Breuer.  “Four ABT generals, 13 additional alleged ABT leaders, and numerous other gang members and associates are named in the indictment.  As charged, ABT uses extreme violence and threats of violence to maintain internal discipline and retaliate against those believed to be cooperating with law enforcement.  Through violence and intimidation, ABT allegedly exerts control over prison populations and neighborhoods, and instills fear in those who come in contact with its members.  As today’s operations show, the Criminal Division, working closely with its federal, state, and local law enforcement partners, is determined to continue disrupting and dismantling ABT and other violent, criminal gangs.”

 

“This indictment is the culmination of a joint federal, state and local law enforcement effort targeting a large-scale prison gang involved in violent organized crime,” said U.S. Attorney Magidson. “Only when we work in partnership utilizing all our resources can we attack a criminal organization and dismantle it entirely.”

 

“ATF is serious about fighting violent crime. We remain steadfast in our commitment to focus on those violent criminals who illegally use firearms to prey on their victims,” said ATF Special Agent in Charge King.  “Through a collective effort with our law enforcement partners this operation was a success today.”

 

“This multi-year investigation and indictment clearly targets the worst-of-the-worst among the ABT,” said FBI Special Agent in Charge Morris.  “This effort not only exemplifies the level of effort the FBI and our law enforcement partners will expend to prevent prison gang racism and criminal activity from poisoning our communities.  It sends a clear message that we will relentlessly pursue and prosecute the leaders and members of these criminal enterprises regardless of where they lay their heads.”

 

As charged, the defendants range from senior leaders to soldiers of the ABT, a “whites only,” prison-based gang with members operating inside and outside of state and federal prisons throughout Texas and elsewhere in the United States since at least the early 1980s. 

 

According to court documents, the ABT has a detailed and uniform organizational structure, with territory divided into five regions, each run by a “general.”  The superseding indictment charges four generals, Terry Ross Blake, 55, aka “Big Terry”; Larry Max Bryan, 51, aka “Slick”; William David Maynard, 42, aka “Baby Huey”; and Charles Lee Roberts, 68, aka “Jive,” with conspiracy to participate in the racketeering activities of the ABT, among other charges.

 

In total, the superseding indictment charges 34 alleged members of the ABT with conspiracy to participate in the racketeering activities of the ABT.  Alleged members of the ABT are also charged with involvement in three murders, multiple attempted murders, kidnappings, assaults and conspiracy to distribute methamphetamine and cocaine.

                                                                                                                    

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

 

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

 

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

Ten defendants have been charged with offenses that are eligible for the death penalty.  The remaining 24 defendants face a maximum penalty of life in prison.

An indictment is not evidence of guilt.  All defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

 

This case is being investigated by a multi-agency task force consisting of the ATF; Drug Enforcement Administration; FBI; U.S. Marshals Service; Federal Bureau of Prisons; U.S. Immigration and Customs Enforcement Homeland Security Investigations; Texas Rangers; Texas Department of Public Safety; the Montgomery County, Texas, Sheriff’s Department; Houston Police Department-Gang Division; Texas Department of Criminal Justice – Office of Inspector General; Harris County, Texas, Sheriff’s Office; Tarrant County, Texas, Sheriff’s Office; Atascosa County, Texas, Sheriff’s Office; Orange County, Texas, Sheriff’s Office; Waller County, Texas, Sheriff’s Office; Fort Worth, Texas, Police Department; San Antonio Police Department; Baytown, Texas, Police Department; Carrollton, Texas, Police Department; Alvin, Texas, Police Department; Montgomery County District Attorney’s Office; Atascosa County District Attorney’s Office; Harris County District Attorney’s Office; and the Kaufman County, Texas, District Attorney’s Office.

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

Related Materials:

Assistant Attorney General Lanny A. Breuer Speaks at Press Conference to Announce Charges Against Alleged Aryan Brotherhood of Texas Leaders
Fact Sheet of Defendants and Charges

WASHINGTON – Five charter fishing boat captains operating out of Rudee Inlet in Virginia Beach, Va. – Jeffery S. Adams, Raymond Carroll Webb, David Dwayne Scott, William W. “Duby” Lowery, IV and Nolan L. Agner – were indicted today for violating the Lacey Act by selling illegally harvested Striped Bass, the Department of Justice Environment and Natural Resources Division and the U.S. Attorney for the Eastern District of Virginia announced.  The captains also face charges of making false statements to law enforcement officers and destroying property to prevent its seizure by law enforcement. 

In 1984, Congress passed the Atlantic Striped Bass Conservation Act, recognizing that “Atlantic striped bass are of historic commercial and recreational importance and economic benefit to Atlantic coastal States and to the Nation,” and that it “is in the national interest to implement effective procedures and measures to provide for effective inter-jurisdictional conservation and management of this species.”  Since 1990, the Secretary of Commerce has imposed a moratorium on fishing for Striped Bass within the Exclusive Economic Zone (EEZ), the zone where the U.S. and other coastal nations have jurisdiction over economic and resource management.  The moratorium makes it unlawful to fish for or harvest Striped Bass in the EEZ.  The moratorium also makes it unlawful to retain any Striped Bass that were taken in or from the EEZ.

The Lacey Act makes it unlawful for any person to import, export, transport, sell, receive, acquire or purchase any fish and wildlife taken, possessed, transported or sold in violation of any law or regulation of the United States, or to attempt to do so.  Such conduct constitutes a felony crime if the defendant knowingly engaged in conduct involving the sale, offer to sell or intent to sell fish with a market value in excess of $350, knowing that the fish were taken, possessed, transported or sold in violation of, or in a manner unlawful under, a law or regulation of the United States.  Under the Lacey Act, it is a “sale” of fish or wildlife for any person, for money or other consideration, to offer or provide guiding, outfitting, or other services.  

Each of the five charter fishing boat captains face charges that they sold charter fishing trips and harvested Striped Bass from the EEZ.

Jeffrey Adams, captain of the F/V Providence II, and his corporation Adams Fishing Adventures, are charged with conspiracy, trafficking in illegally harvested Striped Bass in violation of the Lacey Act and making false statements to law enforcement officers.  The indictment alleges that, between March 4, 2009, and Feb. 9, 2011, the defendants sold charter fishing trips to harvest Striped Bass illegally from the EEZ.  The indictment also alleges that, as part of the conspiracy, Adams and others would puncture the air bladder of Striped Bass and, if contacted by law enforcement, would throw illegally-harvested Striped Bass into the sea in hopes of avoiding detection.  Adams is also charged with making a false statement to law enforcement officers regarding the location where his charter fishing clients harvested Striped Bass. 

Raymond Carroll Webb, captain of the F/V Spider Webb, and his corporation Peake Enterprisees, Ltd., were charged with trafficking in illegally harvested Striped Bass and Destruction of Evidence for actions taken during a Striped Bass charter fishing trip on Feb. 12, 2011.

David Dwayne Scott, captain of the Stoney’s Kingfisher, was charged with trafficking in illegally harvested Striped Bass and destruction of evidence for actions taken during a Striped Bass charter fishing trip on Feb. 7, 2009. 

William W. “Duby” Lowery, captain of the Anna Lynn, was charged with trafficking in illegally harvested Striped Bass and destruction of evidence for actions taken during a Striped Bass charter fishing trip on Jan. 15, 2010.

Nolan L. Agner, captain of the Flat Line, and his corporation, Agner, Inc., were charged with trafficking in illegally harvested Striped Bass for actions taken during a Striped Bass charter fishing trip on Jan. 16, 2011.

If convicted, the individual defendants face a maximum penalty of five years in prison, and a $250,000 fine per count, as well as forfeiture of the fishing vessels used during the commission of the crimes.  If convicted, the corporate defendants face a maximum penalty of a $500,000 fine per count, as well as forfeiture of the fishing vessels used during the commission of the crimes.

The case was investigated by the National Oceanic and Atmospheric Administration, Fisheries, Office for Law Enforcement, and the Virginia Marine Police with assistance from the Federal Communications Commission Enforcement Bureau, Norfolk Office.  The case is being prosecuted by Department of Justice’s Environmental Crimes Section of the Justice Department’s Environment and Natural Resources Division and the U.S. Attorney’s Office for the Eastern District of Virginia.

An indictment is a formal accusation and is not proof of guilt.  Defendants are presumed innocent until and unless they are found guilty.

The government has intervened in a lawsuit against Fluor Hanford Inc. and its parent company, Fluor Corporation (collectively Fluor), in the U.S. District Court for the Eastern District of Washington, the Justice Department announced today. Fluor Hanford, Inc. is a subsidiary of Fluor Corporation, a Texas-based corporation that provides a wide variety of services to government and private customers. The False Claims Act lawsuit was originally filed by whistleblower Loydene Rambo, a former employee of Fluor.

 

Between 1999 and 2008, Fluor had a prime contract with the Department of Energy (DOE) to provide a wide variety of security, maintenance and operational services at the DOE’s Hanford Nuclear Site in southeastern Washington State. As part of its contract, Fluor was responsible for managing and operating the Hazardous Materials Management and Emergency Response (HAMMER) Center, a federally-funded facility established to train Hanford site workers as well as first responders and law enforcement personnel.

The whistleblower complaint alleges that, as a condition of receiving its DOE contract, Fluor was required to certify that it would not use federal funds for lobbying activities. The complaint further alleges that between 2005 and 2008, Fluor ignored these restrictions and used DOE funding to lobby Congress and executive branch officials for more funding for HAMMER. The complaint alleges that Fluor, and two lobbying firms hired by Fluor and paid using DOE funds, Secure Horizons LLC and Congressional Strategies LLC, lobbied members of Congress and executive branch agencies to include additional funds for HAMMER in agency appropriations. The United States intervened in the lawsuit with respect to Fluor, but declined to intervene with respect to additional defendants, including Secure Horizons LLC and Congressional Strategies LLC.

“The taxpayer money Congress allocated for this program was for training federal emergency response personnel and first responders, not to lobby Congress and others for more funding,” said Stuart F. Delery, Acting Assistant Attorney General for the Civil Division of the Department of Justice. “When public funds are misused, as alleged in this case, the Justice Department will work to restore them to the Treasury.”

“The allegations set forth in the whistleblower complaint are troubling and very serious,”

said Michael C. Ormsby, U.S. Attorney for the Eastern District of Washington. “My Office will continue to work with the Justice Department to ensure a just resolution of these alleged violations of federal law.”

Ms. Rambo’s lawsuit was filed under the False Claims Act, which authorizes private parties to sue on behalf of the United States and share in any recovery. The act authorizes the United States to intervene in such a suit and take over the responsibility for litigating it. The United States has informed the court that it intends to file its own complaint in the action.

The case is being handled by the Civil Division of the Department of Justice and the U.S. Attorney’s Office for the Eastern District of Washington, with the assistance of the Department of Energy Office of Inspector General.

Ms. Rambo’s lawsuit is captioned U.S. ex rel. Rambo v. Fluor Hanford, et al., cv-11-5037. The claims asserted in this case are allegations only, and there has been no determination of liability.

WASHINGTON – Two former members of the U.S. military were sentenced today for their participation in a conspiracy to obtain approximately $244,000 in fraudulent recruiting referral bonuses from various U.S. military components and their contractor, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division.
 
Grant E. Bibb, 41, of Eagle Pass, Texas, and Paul Escobar, 32, of San Antonio, were sentenced today by Chief U.S. District Judge Fred Biery in the Western District of Texas.  Judge Biery sentenced Bibb to serve one year and one day in prison and three years of supervised release.  Escobar was sentenced to six months in prison, six months of community confinement and three years of supervised release.  Judge Biery also held Bibb and Escobar jointly and severally liable for $244,000 in restitution.

Bibb pleaded guilty to conspiracy to commit wire fraud on Jan. 30, 2012.  Escobar pleaded guilty to conspiracy to commit wire fraud on July 19, 2012.

According to court documents, Bibb served in the Texas National Guard between January 2003 and July 2007 and in the U.S. Army Reserves from October 2007 until November 2010.  In addition, from December 2007 until April 2009, Bibb worked as a contract military recruiter in Katy, Texas. 

Escobar served in the U.S. Army Reserves from November 2005 until February 2007.  Escobar then served in the U.S. Army from November 2007 to January 2010.

According to court documents, between 2005 and 2008, the U.S. Army, the U.S. Army Reserves and the National Guard Bureau entered into contracts with Document and Packaging Broker Inc. (Docupak) to administer recruiting bonus programs designed to offer monetary incentives to soldiers who referred others to join the U.S. military.   In addition, the Army managed its own recruiting bonus programs, which offered bonuses to soldiers who referred other individuals to join the Army or the Army Reserves after registering online as recruiting assistants (RA) or sponsors.  Through these recruiting programs, a participating soldier could receive up to $2,000 in bonus payments for every person he referred to serve in the U.S. military.

Bibb and Escobar admitted that they participated in a fraud scheme whereby active duty and civilian contract recruiters provided RAs and sponsors with the names and Social Security numbers of “walk-in” soldiers, which are individuals who decided to join the military without being referred by anyone.  Using this information, the RAs and sponsors claimed credit for referring these potential soldiers to join the military, when in fact they did not refer them.  As part of the fraud scheme, the RAs and sponsors split the bonus payments with the recruiters and others who provided the potential soldiers’ personal identifying information.

According to court documents, Bibb, Escobar and their co-conspirators received at least $244,000 in fraudulent recruiting referral bonuses in total.  Bibb personally received $35,000 in fraudulent recruiting referral bonuses using RA accounts in his name and an RA account in a relative’s name.  Bibb also worked with other soldiers and active duty recruiters to set up RA accounts in those soldiers’ names for the purpose of claiming fraudulent recruiting referral bonuses.  Bibb, the recruiters and at least four soldiers split a total of at least $4,000 in fraudulent bonuses.  Escobar permitted a co-conspirator to receive $6,000 in fraudulent recruiting referral bonuses using Escobar’s RA account and made fraudulent representations to Docupak to carry out the scheme. 

This case arose from an investigation concerning allegations that former and current soldiers and military and civilian contract recruiters in the San Antonio area engaged in a wide-ranging scheme to obtain fraudulent recruiting referral bonuses.  To date, 9 individuals have been charged, all of whom have pleaded guilty.  The investigation is ongoing. 

The case is being prosecuted by Trial Attorneys Edward J. Loya Jr., Brian A. Lichter and Sean F. Mulryne of the Criminal Division’s Public Integrity Section.  The case is being investigated by agents from the San Antonio Fraud Resident Agency of the Major Procurement Fraud Unit, U.S. Army Criminal Investigation Division.

John Hall, 27, an inmate at the Federal Correctional Institution in Seagoville, Texas, pleaded guilty today in federal court to violating the Matthew Shepard and James Byrd, Jr. Hate Crimes Prevention Act stemming from his assault of a fellow inmate, who he believed to be gay, the Department of Justice announced. Hall assaulted his fellow inmate with a dangerous weapon, causing bodily injury to the victim on Dec. 20, 2011.

According to information presented during the plea hearing, Hall targeted the victim, a fellow inmate, because of the victim’s perceived sexual orientation. Hall admitted that he assaulted the victim because of his perceived sexual orientation by repeatedly punching and kicking the victim while calling the victim gay slurs. The victim sustained multiple lacerations to his face, and chipped and fractured teeth as a result of Hall’s unprovoked attack. The assault occurred inside the Federal Correctional Institution, which is within the special maritime or territorial jurisdiction of the United States.

“The Justice Department continues to investigate and prosecute acts of violence targeting individuals because of their sexual orientation; this case is just another example of the department’s commitment to the pursuit of justice on behalf of all people regardless of their sexual preference or orientation.” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The department will continue to vigorously enforce the Matthew Shepard and James Byrd, Jr. Hate Crimes Prevention Act, and all the laws under our jurisdiction, to protect the rights of all individuals.”

Hall faces a maximum sentence of 10 years in prison for this crime.  

This case was investigated by the FBI Dallas Division.  The case was prosecuted by Assistant U.S. Attorney Errin Martin and Trial Attorney Adriana Vieco of the Civil Rights Division.

A real estate investor pleaded guilty today to conspiring to commit mail fraud at public real estate foreclosure auctions held in Raleigh, N.C., and surrounding areas, the Department of Justice announced. This is the second charge in the department’s ongoing investigation into real estate foreclosure auctions in eastern North Carolina.

According to the one-count felony charge filed on Oct. 4, 2012, in the U.S. District Court for the Eastern District of North Carolina, in Greenville, real estate investor, Darren K. Phillips, conspired with a group of real estate speculators to participate in a scheme to defraud financial institutions, homeowners and others with a legal interest in select properties, and to obtain money and property from financial institutions, homeowners and others with a legal interest in rigged properties through false and fraudulent pretenses or representations.  According to the plea agreement, Phillips has agreed to cooperate with the department’s ongoing investigation.

The primary purpose of the conspiracy was to fraudulently acquire title to rigged foreclosure properties offered through public auctions at artificially suppressed prices, to make and receive payoffs from co-conspirators and to divert money away from financial institutions, homeowners and others with a legal interest in the rigged foreclosure properties, the department said in court papers.  The conspiracy resulted in mortgage holders, some of which were financial institutions, receiving a lower price for the foreclosure property.  Philips is charged with participating in the conspiracy beginning at least as early as February 2001 and continuing until at least May 2004. 

“By artificially suppressing auction prices through payoffs and other illegal actions, the conspirators profited at the expense of homeowners and financial institutions,” said Scott D. Hammond, Deputy Assistant Attorney General in charge of the Antitrust Division’s criminal enforcement program.  “The division will continue to work with our law enforcement partners to investigate anticompetitive practices in real estate foreclosure auctions in North Carolina and elsewhere.”

Phillips is charged with conspiracy to commit mail fraud affecting a financial institution, which carries a maximum sentence of 30 years in prison and a $1 million fine.

Phillips is the second person to be charged in this investigation. In September 2010, Christopher Deans, a real estate speculator from Raleigh, pleaded guilty in the U.S. District Court in Greenville in connection with the investigation. 

Today’s plea arose from an ongoing federal antitrust investigation of fraud and bidding irregularities in certain real estate foreclosure auctions in the Eastern District of North Carolina.  The investigation is being conducted by the Antitrust Division’s Atlanta Field Office and the FBI’s Atlanta Field Office, with assistance from the U.S. Attorney’s Office for the Eastern District of North Carolina. Anyone with information concerning bid rigging or fraud related to real estate foreclosure auctions should contact the Antitrust Division’s Atlanta Field Office at 404-331-7100, or visit www.justice.gov/atr/contact/newcase.htm .

Today’s plea is part of efforts underway by President Barack Obama’s Financial Fraud Enforcement Task Force.  President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes.  The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources.  The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.  One component of the task force is the national Mortgage Fraud Working Group, co-chaired by Benjamin B. Wagner, U.S. Attorney for the Eastern District of California.  For more information on the task force, visit www.StopFraud.gov.

WASHINGTON – A Michigan man was arraigned today in U.S. District Court for the Eastern District of Michigan on charges of mail fraud and selling counterfeit Microsoft software with a retail value of more than $1.2 million, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney for the Eastern District of Michigan, Barbara L. McQuade and Lev J. Kubiak, Director of the National Intellectual Property Rights Coordination Center (IPR Center).

Bruce Alan Edward, 48, of Atlanta, Mich., was charged in an indictment returned on Oct. 24, 2012, and unsealed on Nov. 1, 2012, by the federal grand jury in Bay City, Mich.  The indictment charges Edward with five counts of criminal copyright infringement and one count of mail fraud. 

According to the indictment, Edward unlawfully distributed counterfeit copies of Microsoft Office 2003 Professional and Microsoft Windows XP Professional software by purchasing counterfeit copies of the copyrighted works from China and Singapore, selling the copyrighted works on eBay and then using the U.S. Postal Service to deliver the counterfeit software.   The indictment further alleges that Edward obtained more than $140,000 between May 2008 and September 2010 by selling more than 2,500 copies of counterfeit Microsoft software that had a retail value of over $1.2 million.

If convicted of all counts in the indictment, Edward faces a maximum of 45 years in prison and $1.5 million in fines.  The indictment also contains a forfeiture allegation that requires the defendant, if convicted, to forfeit all criminal proceeds and counterfeit items and any property used to commit the alleged criminal activity. 
       
The case is being prosecuted by Trial Attorney Thomas Dougherty of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney Janet Parker of the U.S. Attorney’s Office for the Eastern District of Michigan.

The investigation was conducted by the National Intellectual Property Rights Coordination Center (IPR Center) in Crystal City, Va., and U.S. Immigration and Customs Enforcement Homeland Security Investigations in Sault Ste. Marie, Mich.

The IPR Center is one of the U.S. government’s key weapons in the fight against criminal counterfeiting and piracy.  As a task force, the IPR Center uses the expertise of its 21 member agencies to share information, develop initiatives, coordinate enforcement actions and conduct investigations related to IP theft.  Through this strategic interagency partnership, the IPR Center protects the public's health and safety, the U.S. economy and our war fighters.

The enforcement action announced today is one of many efforts being undertaken by the Department of Justice Task Force on Intellectual Property (IP Task Force). Attorney General Eric Holder created the IP Task Force to combat the growing number of domestic and international intellectual property crimes, protect the health and safety of American consumers, and safeguard the nation’s economic security against those who seek to profit illegally from American creativity, innovation, and hard work. The IP Task Force seeks to strengthen intellectual property rights protection through heightened criminal and civil enforcement, greater coordination among federal, state, and local law enforcement partners, and increased focus on international enforcement efforts, including reinforcing relationships with key foreign partners and U.S. industry leaders. To learn more about the IP Task Force, go to www.justice.gov/dag/iptaskforce/.

Two Pakistani nationals have been indicted by a federal grand jury in the District of Columbia on charges alleging that they operated Internet sites that illegally shipped pharmaceuticals from Pakistan and the United Kingdom to customers in the United States. 

Sheikh Waseem Ul Haq, 39, and Tahir Saeed, 50, are accused of operating Internet sites that, since late 2005, illegally shipped $2 million of pharmaceuticals from Pakistan and the United Kingdom to customers worldwide, including nearly $780,000 in sales to U.S. purchasers.

 

According to the indictment, the defendants and others owned, operated and conducted business as Waseem Enterprises and Harry’s Enterprises, wholesale pharmaceutical companies that were located in Pakistan. The businesses were used to unlawfully distribute a wide variety of controlled substances and prescription drugs through Internet sites. The defendants and others also advertised their companies on Internet sites to generate business.

 

Ul Haq and Saeed directed U.S. customers to submit payments via Western Union to numerous individuals in Karachi, Pakistan, in order to conceal the fact that the funds were going to Ul Haq and Saeed. As alleged in the indictment, the defendants admitted in e-mails that they paid bribes to Pakistani customs officials to facilitate shipment of the drugs out of Pakistan, and warned that U.S. customers bore the risk of interception by U.S. customs officials. The indictment alleges that the defendants packaged the drug shipments in ways which reduced the likelihood of interdiction by customs inspectors and told customers that, despite the packaging, some of the shipments might not get through.

 

The drugs shipped into the United States included methylphenidate (sold as Ritalin); various anabolic steroids; alprazolam (sold as Xanax); diazepam (sold as Valium), lorazepam (sold as Ativan), clonazepam (sold as Klonapin) and other controlled and non-controlled substances.

 

The indictment, which was returned on Nov. 6, 2012, was announced today by Ronald C. Machen Jr., U.S. Attorney for the District of Columbia; Acting Assistant Attorney General Stuart F. Delery of the Department of Justice’s Civil Division; James W. McJunkin, Assistant Director in Charge of the FBI’s Washington Field Office; Robert Brisolari, Acting Special Agent in Charge of the Washington Division Office of the Drug Enforcement Administration; Gary R. Barksdale, Inspector in Charge, Washington Division, U.S. Postal Inspection Service, and Antoinette V. Henry, Special Agent in Charge of the Metro Washington Field Office of the U.S. Food & Drug Administration’s Office of Criminal Investigations.

 

The indictment was returned following a presentation of evidence by the U.S. Attorney’s Office for the District of Columbia, working in conjunction with the Department of Justice’s Consumer Protection Branch. It charges the defendants with conspiracy to import controlled substance pharmaceuticals into the United States; conspiracy to distribute controlled substance pharmaceuticals; conspiracy to introduce misbranded pharmaceuticals into interstate commerce; importation and distribution of controlled substance pharmaceuticals; introduction into interstate commerce of misbranded drugs, and conspiracy to commit international money laundering. It also includes a forfeiture allegation seeking all proceeds that can be traced to the scheme.

 

If convicted, the defendants face up to 20 years in prison for each of the two counts involving the conspiracy to import and distribute controlled substances, as well as up to 20 years for the conspiracy to commit international money laundering. They face a maximum penalty of five years for conspiracy to introduce misbranded pharmaceuticals into interstate commerce, and additional time if convicted of the other charges.

 

In early October 2012, a law enforcement task force investigating the case learned that the defendants would be traveling from Pakistan to northern Europe. With coordination from the U.S. Department of Justice’s Office of International Affairs, U.S. authorities lodged provisional arrest warrants for the defendants first in Germany and then in the United Kingdom.

 

With the assistance of Interpol and law enforcement agents in Germany and the United Kingdom, the defendants were tracked from Germany to London, where they were arrested by the London Metropolitan Police Service Fugitive Squad at a hotel near Heathrow Airport on Oct. 19, 2012. They were presented to Westminster Magistrate’s Court in London and ordered held pending extradition to the United States.

 

“This indictment alleges an international conspiracy to sell anabolic steroids, anti-anxiety medications, and other prescription drugs over the Internet to American consumers without any doctor involved,” said U.S. Attorney Machen. “These Pakistani nationals are alleged to have engaged in a scheme to ship unregulated pharmaceuticals to American consumers in exchange for money wired to their cohorts in Pakistan. The controlled substances were packaged to conceal the illegal shipments from being discovered by customs officials. Our Office, along with our law enforcement colleagues, will continue to aggressively investigate and prosecute those who are intent on shipping unregulated and potentially dangerous drugs into the United States.”

 

“This prosecution aims to curb the flow of dangerous drugs into the hands of United States citizens,” said Stuart F. Delery, Acting Assistant Attorney General for the Civil Division. “The drugs allegedly sold by the defendants were not approved for distribution into the United States, were not dispensed by U.S. licensed pharmacies, and were not prescribed by any physician.  Along with the FBI, FDA and our other law enforcement partners, we will continue to protect our citizens from unsafe and potentially harmful drugs.”

 

“This complex investigation and subsequent arrests disrupted an international black market for potentially dangerous drugs entering the United States,” said Assistant Director in Charge McJunkin.  “This indictment is the direct result of the hard work of FBI Agents in partnership with the Drug Enforcement Administration, U.S. Postal Inspection Service, U.S. Food & Drug Administration’s Office of Criminal Investigations and the London Metropolitan Police Service as well as the prosecutors working on this case.”

 

“This indictment shows the commitment of the U.S. Postal Inspection Service to keep its customers safe from potentially harmful products,” said Inspector in Charge Barksdale. “We would also like to thank our federal partners in our continued effort to rid the U.S. Mail of illegal pharmaceuticals.”

 

“The FDA Office of Criminal Investigations is committed to working with our international and domestic law enforcement partners in aggressively pursuing unscrupulous individuals who seek to sell adulterated and misbranded pharmaceuticals to U.S. citizens via the Internet,” said Special Agent in Charge Henry.

 

An indictment is merely a formal charge that a defendant has committed a violation of criminal laws and every defendant is presumed innocent until, and unless, proven guilty.

This investigation was sponsored and supported by the Department of Justice’s Organized Crime Drug Enforcement Task Force. The case was investigated by the FBI’s Washington Field Office; the Drug Enforcement Administration; the U.S. Postal Inspection Service, and the FDA’s Office of Criminal Investigations. It is being prosecuted by Assistant U.S. Attorney John P. Dominguez and Linda I. Marks, Senior Litigation Counsel for the Department of Justice’s Consumer Protection Branch, who coordinated the investigation and presented the evidence to the grand jury.

WASHINGTON – The owner of a pecan brokerage company in Ciudad Juarez, Chihuahua, Mexico, was sentenced today to serve 48 months in prison for his role in a scheme to defraud the Export-Import Bank of the United States (Ex-Im Bank) of approximately $400,000, 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.

Leopoldo Valencia-Urrea, 50, was sentenced by Judge Kathleen Cardone in U.S. District Court in El Paso, Texas.  Valencia pleaded guilty on Oct. 13, 2011, to one count of conspiracy to commit wire fraud, one count of wire fraud and one count of money laundering conspiracy in connection with a scheme to defraud the Ex-Im Bank of approximately $400,000.  In addition to his prison term, Valencia was sentenced to serve three years of supervised release and was ordered to pay $58,000 in restitution and $399,075 in forfeiture.

According to court documents, Valencia, a U.S. citizen, was the owner of a pecan brokerage company in Ciudad Juarez and resided in El Paso.  Valencia admitted that in 2006, he applied for an Ex-Im insured loan for $406,258 through a bank in Miami.  As part of his fraudulent loan application, Valencia and others submitted a fraudulent loan application, financial statements, invoices, letters and bills of lading to falsely represent to the Miami bank and the Ex-Im Bank the purchase and export of U.S. goods to Valencia in Mexico.  After the exporter who conspired with Valencia received $399,075 from the Miami bank, Valencia and others diverted the loan proceeds directly to Valencia and others in Mexico.  As a result of the fraud, Valencia’s loan defaulted, causing the Ex-Im Bank to pay a claim to the lending bank on a $371,962 loss.

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.  Significant financial analysis and strategic assistance was provided during the course of this investigation by the Financial Crimes Enforcement Network (FINCEN).

Andrew J. Watts, a Barbados national, was sentenced in Chicago by U.S. District Judge Joan Gottschall to 114 months in prison and ordered to pay restitution of just under $1.7 million for devising and executing a stolen identity federal income tax refund fraud scheme, the Justice Department and the Internal Revenue Service (IRS) announced today.

 

According to court documents, between 2007 and 2011, Watts filed false federal income tax returns in the names of deceased taxpayers seeking fraudulent refunds. Watts either signed the name of the deceased taxpayer to the tax return, or would falsely list himself as the deceased taxpayer’s representative. As part of the scheme, Watts filed over 470 false federal income tax returns, claiming fraudulent refunds in excess of $120 million, and the IRS issued refunds in excess of $10 million. Watts directed the IRS to either mail the refund checks to an address he controlled or to electronically deposit the refund into a bank account under his control.

 

“While all taxpayers are victims when criminals file false tax returns using stolen identities, those who falsely use the names of deceased individuals add to the grief and burdens of their families,” said Kathryn Keneally, Assistant Attorney General for the Justice Department's Tax Division. “We will prosecute and seek just punishment against those who seek to commit these crimes.”

 

“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 the U.S. tax system,” said Richard Weber, Chief, IRS-Criminal Investigation. “Individuals who commit refund fraud and identity theft of this magnitude deserve to be punished to the fullest extent of the law.”

 

On July 10, 2012, Watts pleaded guilty to one count of mail fraud and one count of aggravated identity theft.

 

The case was investigated by IRS-Criminal Investigation and prosecuted by Assistant U.S. Attorney Patrick J. King, Jr., Northern District of Illinois, and Trial Attorney Michelle Petersen, Department of Justice, Tax Division.

 

More information about the Justice Department’s Tax Division and its enforcement efforts is available at www.usdoj.gov/tax/ .

A Newport News, Va., federal jury has found Jeffrey Charles guilty for conspiring with his daughter and son-in-law to defraud the United States, the Justice Department and the Internal Revenue Service (IRS) announced today. Charles was found guilty of one count of conspiracy, three counts of aiding and assisting in the preparation of false tax returns and one count of filing a false tax return.

According to the evidence presented at trial, Charles conspired with his daughter and son-in-law to impair and impede the IRS in ascertaining, computing, assessing and collecting federal income taxes. The evidence also proved that Charles aided and assisted in the preparation of three false tax returns in his daughter’s name for tax years 2000, 2001 and 2005, and attached false documents to each tax return. The evidence at trial also established that Charles filed a false tax return in his own name for tax year 2006 in which he allegedly falsely reported earning $0.00 income.

Senior Judge Henry Coke Morgan, Jr. scheduled sentencing for Feb. 25, 2012 in Norfolk, Va.

The case was investigated by IRS Criminal Investigation and was prosecuted by Assistant U.S. Attorney Brian Samuels and Trial Attorney Justin K. Gelfand of the Justice Department’s Tax Division.

Lawrence Etsitty , 31, a former police officer with the Navajo Police Department (NPD), was sentenced today in federal court on charges related to the sexual abuse of a woman who was in his custody on Jan. 25, 2009. Earlier this year, Etsitty pleaded guilty to violating the civil rights of the victim when he groped, touched and kissed her against her will, while she was handcuffed. Etsitty also was charged and pleaded guilty to making false statements to the FBI.

 

According to court documents, on Jan. 25, 2009, at 2:40 a.m., Etsitty, while working in his capacity as an officer of the NPD, arrested the victim outside of the Fire Rock Casino in Churchrock, N.M. Etsitty then handcuffed the victim and placed her in the back of his patrol vehicle. Etsitty then drove the victim to an isolated road in the desert, opened the back door of his patrol car where the handcuffed victim was sitting, and forcibly pulled her toward him and out of the car. Etsitty then began groping the victim, while she struggled to get free, pleading for Etsitty to take her home. Ultimately, Etsitty agreed to do so and dropped the victim off in a parking lot near her home, at which point the victim ran away.

On Jan. 27, 2009, Etsitty voluntarily spoke to the FBI and falsely claimed that he did not grope the victim while she was in his custody. Etsitty later wrote a letter of apology to the victim in which he admitted to groping and kissing her while she was in his patrol car, and acknowledged that what he did was wrong and should not have happened.

Etsitty was sentencing to 54 months in prison followed by three years of supervised release. He will also be barred from serving in a law enforcement capacity.

“Police officers who use the power of their badge to sexually assault persons in their custody pose a serious threat to the rule of law,” said Thomas E. Perez, Assistant Attorney General of the Civil Rights Division.. “We commend the courage of the victim in coming forward and speaking out about this terrible crime. The Department of Justice and the Civil Rights Division will continue to vigorously investigate and prosecute these crimes.”

 

This case was investigated by the Albuquerque Division of the FBI and was prosecuted by Fara Gold of the Civil Rights Division of the U.S. Department of Justice.

WASHINGTON – The owner of a Miami-Dade County assisted living facility (ALF) was sentenced today to 15 months in prison for her role in a kickback scheme that funneled ALF patients to fraudulent mental health providers American Therapeutic Corporation (ATC) and Health Care Solutions Network (HCSN), announced Assistant Attorney General Lanny A. Breuer of the Justice Department's Criminal Division; U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida; Michael B. Steinbach, 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.

Alba Serrano, 66, of Miami, was sentenced today by U.S. District Judge Patricia A. Seitz in the Southern District of Florida.  In addition to her prison term, Serrano was sentenced to serve three years of supervised release and ordered to pay $258,329 in restitution.

On June 6, 2012, Serrano pleaded guilty in Miami to one count of conspiracy to commit health care fraud. 

According to court documents, Serrano was the owner of Elsa's House, an ALF that she operated for more than two decades in South Miami.  Serrano pleaded guilty to sending Medicare beneficiaries who resided at Elsa’s House to both ATC and HCSN for partial hospitalization program (PHP) services, a form of intensive treatment for severe mental illness, in exchange for illegal health care kickbacks.  In her plea agreement, Serrano admitted that she referred beneficiaries to both ATC and HCSN in exchange for cash kickbacks, even though she knew that some of the beneficiaries did not suffer from severe mental illness and accepting health care kickbacks was illegal.

According to the plea agreement, Serrano's participation in the fraud resulted in at least $591,385 in fraudulent billing to the Medicare program.
 
In related cases, ATC, its management company, Medlink Professional Management Group Inc., and various owners, managers, doctors, therapists, patient brokers and marketers of ATC, were charged with various health care fraud, kickback, money laundering and other offenses in two indictments unsealed in February 2011.  ATC, Medlink and more than 20 of the individual defendants charged in these cases have pleaded guilty or have been convicted at trial. 

An indictment unsealed on May 2, 2012, charged nine defendants for their alleged roles in the HCSN health care fraud scheme.  Four defendants have pleaded guilty, and five defendants are scheduled for trial on Jan. 14, 2013, before U.S. District Judge Cecilia M. Altonaga in Miami. Defendants are presumed innocent until proven guilty at trial.

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

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

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

Freeman Health System, a healthcare provider and hospital system located in Joplin, Mo., has agreed to pay $9,316,139 to resolve allegations that it violated the Stark Law and the False Claims Act by knowingly providing incentive pay to physicians in a manner that violated federal law, the Justice Department announced today.

 

The Stark Law forbids a hospital from billing Medicare for certain services referred by physicians that have a financial relationship with the hospital. A prohibited financial relationship includes an agreement between a hospital and a physician to compensate a physician based on the volume of the physician’s referrals or the revenue realized through those referrals.

 

Freeman disclosed to the U.S. Attorney for the Western District of Missouri that a number of its physicians were eligible for incentive compensation that may have taken into account the value and volume of their referrals. Based on its investigation of Freeman’s disclosures, the United States alleged that Freeman knowingly compensated some of its physicians in a manner that violated the Stark Law. Specifically, the United States alleged that Freeman provided incentive pay to 70 physicians employed at clinics operated by the health system based on the revenue generated by the physicians’ referrals for certain diagnostic testing and other services performed at the clinic, and that this financial arrangement created an incentive to refer patients for such procedures.

 

“Today’s resolution underscores our commitment to ensure that health care decisions are based on the best interests of patients rather than the personal financial interests of referring physicians,” said Stuart F. Delery, Acting Assistant Attorney General for the Department’s Civil Division. “The Department of Justice encourages companies to disclose potential violations of law, as was the case here .”

 

“Our priority is protecting the patients,” said David M. Ketchmark, Acting U.S. Attorney for the Western District of Missouri. “These laws are intended to ensure that physicians make referrals for health care services based solely on the medical needs of their patients rather than any financial incentives. These laws also protect the integrity of the government-funded health care benefit programs.”

This resolution is part of the government’s emphasis on combating health care fraud and another step for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced by Attorney General Eric Holder and Kathleen Sebelius, Secretary of the Department of Health and Human Services in May 2009. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover $10.1 billion since January 2009 in cases involving fraud against federal health care programs. The Justice Department’s total recoveries in False Claims Act cases since January 2009 are over $13.8 billion.

 

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

WASHINGTON – Five men pleaded guilty today in Virginia for conspiring to receive, distribute, possess and access with intent to view child pornography, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and the U.S. Attorney for the Western District of Virginia Timothy J. Heaphy.

Manuel Antonio Mares, 57, of Miami; Jeremy Hart Yost, 26, of West Bend, Ore.; Richard Phillip Allen, 66, of Redondo Beach, Calif.; and James Calvin Boyd, 58, of Pell City, Ala., pleaded guilty today before Senior District Judge Norman K. Moon in the Western District of Virginia to one count of conspiring to receive, distribute, possess and access with the intent to view child pornography.  Jesse Leon Coleman, 48, of Lynchburg, Va., pleaded guilty today before Judge Moon to one count of receiving child pornography.

Mares, Yost, Allen, Boyd and Coleman were charged along with four others in an indictment unsealed on Feb. 2, 2012.  Co-defendant Peter Franklin Ortiz, 56, of Greenville, S.C., pleaded guilty in the Western District of Virginia on Oct. 16, 2012, to one count of conspiring to receive, distribute, possess and access with the intent to view child pornography.  Co-defendants  Thomas Syfor, 71, and Matthew Ackerman, 49, both of Bethlehem, Pa., were previously transferred to the Eastern District of Pennsylvania for disposition in that district.  The ninth defendant, known as “Andy Danilov,” is believed to reside in Russia and remains at large.

According to court documents, beginning in August 2010 and continuing until at least November 2011, Danilov distributed emails to a group of individuals, including the defendants, that contained links to compressed files and file attachments depicting minors engaged in sexually explicit conduct.  Danilov often used the screen name “Cinemaboy” in the emails.  According to information presented at today’s plea hearing, forensic analysis of each of the defendants’ computers confirmed their involvement in the conspiracy, and some of the defendants were found to possess very large numbers of images and movies depicting the sexual abuse of children.

Each of the defendants who pleaded guilty today faces a maximum penalty of 20 years in prison, a $250,000 fine and lifetime supervised release at sentencing.  Due to one or more prior convictions involving the sexual exploitation of a minor, Ortiz faces enhanced penalties, including a maximum sentence of 40 years in prison.  All of the defendants will be required to register as sex offenders.

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

The investigation of the case was conducted by the FBI Innocent Images Operations Unit.  The case is being prosecuted by Assistant U.S. Attorney Nancy Healey of the Western District of Virginia and CEOS Trial Attorney Darcy Katzin. 

WASHINGTON – Two members of the Internet piracy group “IMAGiNE” were sentenced to prison today in Virginia, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney Neil H. MacBride for the Eastern District of Virginia and Special Agent in Charge John P. Torres of U.S. Immigration and Customs Enforcement Homeland Security Investigations (ICE-HSI) in Washington, D.C.

Willie Lambert, 57, of Pittston, Pa., was sentenced today by U.S. District Judge Arenda L. Wright Allen in the Eastern District of Virginia to serve 30 months in prison, three years of supervised release and $449,514 in restitution, jointly and severally with co-defendants.  Sean M. Lovelady, 28, of Pomona, Calif., was sentenced today by Judge Wright Allen to 23 months in prison, three years of supervised release and $7,500 in restitution.

Lambert and Lovelady were indicted along with two other defendants on April 18, 2012, for their roles in the IMAGiNE Group, an organized online piracy ring that sought to become the premier group to first release to the Internet copies of movies only showing in theaters.

 Lovelady and Lambert each pleaded guilty in U.S. District Court for the Eastern District of Virginia to one count of conspiracy to commit criminal copyright infringement on May 9, 2012, and June 22, 2012, respectively. 

According to court documents, Lambert, Lovelady and their co-conspirators sought to illegally obtain and disseminate digital copies of copyrighted motion pictures showing in theaters.  Both Lovelady and Lambert admitted that they went to movie theaters and secretly used receivers and recording devices to capture the audio sound tracks of copyrighted movies (referred to as “capping”). After obtaining, editing and filtering audio sound tracks and uploading them to servers utilized by the IMAGiNE Group, Lambert and Lovelady used and attempted to use software to synchronize the audio file with an illegally obtained video file to create a completed movie file suitable for sharing over the Internet among members of the IMAGiNE Group and others. 

Co-defendants Jeramiah B. Perkins and Gregory Cherwonik each pleaded guilty to one count of conspiracy to commit criminal copyright infringement on Aug. 29, 2012, and July 11, 2012, respectively.  Perkins is scheduled to be sentenced on Jan. 3, 2013, and Cherwonik is scheduled to be sentenced on Nov. 29, 2012.

The investigation of the case and the arrests were conducted by agents with HSI.  Assistant U.S. Attorney Robert J. Krask of the Eastern District of Virginia and Senior Counsel John H. Zacharia of the Justice Department Criminal Division’s Computer Crime and Intellectual Property Section (CCIPS) are prosecuting the case.  Significant assistance was provided by the CCIPS Cyber Crime Lab and the Criminal Division’s Office of International Affairs.

This case is part of efforts being undertaken by the Department of Justice Task Force on Intellectual Property (IP Task Force) to stop the theft of intellectual property.  Attorney General Eric Holder created the IP Task Force to combat the growing number of domestic and international intellectual property crimes, protect the health and safety of American consumers, and safeguard the nation’s economic security against those who seek to profit illegally from American creativity, innovation and hard work.  The IP Task Force seeks to strengthen intellectual property rights protection through heightened criminal and civil enforcement, greater coordination among federal, state and local law enforcement partners, and increased focus on international enforcement efforts, including reinforcing relationships with key foreign partners and U.S. industry leaders.  To learn more about the IP Task Force, go to www.justice.gov/dag/iptaskforce.

This investigation was supported by the HSI-led National Intellectual Property Rights Coordination Center (IPR Center) in Washington.  The IPR Center is one of the U.S. government’s key weapons in the fight against criminal counterfeiting and piracy.  As a task force, the IPR Center uses the expertise of its 21 member agencies to share information, develop initiatives, coordinate enforcement actions and conduct investigations related to IP theft.  Through this strategic interagency partnership, the IPR Center protects the public's health and safety, the U.S. economy and our war fighters.

Lisa Wright, 46, and Cathy Saffer, 52, of Pompano Beach, Fla., were sentenced today to serve 66 and 60 months respectively for defrauding homeowners and mortgage lenders as part of a foreclosure rescue scheme, the Justice Department announced. The two women were sentenced by U.S. District Judge Kenneth A. Marra in the Southern District of Florida.

 

Wright pleaded guilty on March 27, 2012, to one count of conspiracy to commit mail and wire fraud, one count of mail fraud and one count of wire fraud. Saffer was convicted of one count of conspiracy to commit mail and wire fraud, three counts of mail fraud and two counts of wire fraud, following a two week jury trial in July.

 

According to the indictment and evidence presented at trial, Wright and Saffer operated Foreclosure Solution Specialists (FSS) from 2006 to 2009. Through FSS, Wright and Saffer targeted homeowners facing foreclosure, advertising that FSS could assist those homeowners in remaining in their homes. When contacted by distressed homeowners seeking assistance, Wright and Saffer misrepresented to those homeowners that their homes would be sold to investors. They also claimed that customers could remain in their homes after the sales and promised them an opportunity to repurchase the homes at a later date. Rather than selling the homes to legitimate investors, Wright and Saffer designed sham sales to straw purchasers whom they paid to participate in the scheme.

 

According to the indictment and evidence presented at trial, Wright and Saffer paid Florida Certified Public Accountant Barrington Coombs to write a fraudulent letter which falsely vouched for the fraudulent information on various loan applications. Coombs, who was also convicted by the jury, is scheduled to be sentenced Dec. 7, 2012.

Mortgage transactions completed by FSS drew equity out of the homes, which Wright and Saffer pocketed for their own purposes. After doing so, Wright and Saffer allowed the loans to go into foreclosure. Homeowners ultimately lost all of the equity in their homes, and most of the victims were forced to move out of their homes.

 

“The individuals sentenced today took advantage of desperate homeowners hoping to shed the weight of debt and foreclosure, ,” said Stuart F. Delery, Acting Assistant Attorney General for the Civil Division. “We will continue to work with the FBI and our other law enforcement partners to investigate and prosecute mortgage fraud and foreclosure rescue schemes such as this one.”

 

Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida stated, “ This case illustrates the lengths that fraudsters will go to victimize and ruin the lives of hard working families. This mortgage fraud scheme robbed homeowners of more than just their homes; it also robbed them of hope and the American dream of home ownership. The best way to avoid being victimized is to do your homework and ask hard questions. Be wary of those whose promises seem too good to be true. Through this prosecution, these fraudsters have been brought to justice.”

The case was investigated by the FBI. The case is being prosecuted by Christopher E. Parisi and John Claud, Trial Attorneys at the Civil Division’s Consumer Protection Branch.

 

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

A bail bondsman in Portsmouth, Va., was sentenced today to serve 30 months in prison for bribing public officials in exchange for receiving favorable treatment, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney for the Eastern District of Virginia Neil H. MacBride.

 

Ulysses “Tugger” Stephenson, 51, of Portsmouth, was sentenced by U.S. Chief District Judge Rebecca Beach Smith in the Eastern District of Virginia. In addition to his prison term, Stephenson was sentenced to serve three years of supervised release.

 

Stephenson pleaded guilty on July 26, 2012, to one count of conspiracy to commit federal programs bribery and one count of federal programs bribery.

 

According to court documents, Stephenson earned money as a bail bondsman by charging arrestees a percentage of the amount of bond set by a magistrate. In order to obtain additional clients and thereby maximize his profits, Stephenson gave cash and gifts to Deborah Clark – a Portsmouth magistrate who pleaded guilty to bribery and was sentenced last month to 12 months in prison – in exchange for her referring arrestees to him as prospective clients and accepting his advice on the amount of bond to set in particular cases. From January 2009 through February 2012, Stephenson gave Clark up to $150 per month as well as expense money for trips and numerous cash payments for gas and meals. Additionally, according to court documents, from January 2009 through July 2010, Stephenson made cash payments of up to $150 per week to an employee of the Portsmouth Sheriff’s Office in exchange for referrals.

 

Stephenson is subject to prosecution for bribery under a federal statute because the two people he admitted to bribing were agents of an organization or state receiving annual benefits in excess of $10,000 under federal programs involving grants and other forms of assistance.       

 

This case was investigated by the FBI. Trial Attorneys Peter Mason and Monique Abrishami of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney Alan M. Salsbury and Special Assistant U.S. Attorney Amy E. Cross of the Eastern District of Virginia are prosecuting the case.

Bruce King, the owner and operator of Premier Tax, pleaded guilty in federal court this week to charges of conspiring to defraud the United States and filing false tax returns, the Justice Department and the Internal Revenue Service (IRS) announced today. Additionally, on Thursday, Vonecia Orum, a return preparer who worked at Premier Tax, pleaded guilty to delivering false tax returns to the IRS.

 

With the guilty pleas of King and Orum, a total of nine people associated with Premier Tax have now been convicted of crimes. Six were named in a 28-count indictment that was returned on March 28, 2012. These six were King and Orum, as well as Antoinette Djonret, Nakesha Donaldson, Angela Smith and Jenika Williams, all of whom had previously pleaded guilty. In July and August of 2011, three other defendants – Tonja Toney, Kimberly Womack and Kina Lane – pleaded guilty to criminal informations charging them with filing false tax returns.

 

According to court documents, Premier Tax was a tax preparation business operated by King that had several locations in Alabama and in Georgia. King held training sessions in which he taught preparers how to falsify tax returns in order to fraudulently increase clients’ tax refunds. Those he taught went on to work at Premier Tax and filed numerous false tax returns. According to court documents, the tax loss caused by these fraudulent returns exceeded $1 million.

 

Court records also indicated that in addition to falsifying tax returns , some preparers working at Premier Tax also used false dependents on tax returns – they would use people’s personal identifying information, without their consent, as dependents on clients’ tax returns. Four of the defendants—Djonret, Donaldson, Smith, and Williams—were involved in this aspect of Premier Tax and they pleaded guilty to charges of aggravated identity theft, in addition to charges of conspiracy to defraud the United States or filing false tax returns.

 

This case was investigated by Special Agents of the IRS - Criminal Investigation. Trial attorneys Jason Poole and Justin Gelfand of the Justice Department’s Tax Division and Assistant U.S. Attorney Jared Morris of the Middle District of Alabama are prosecuting this case.

 

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

Orthofix International NV, has agreed to pay the United States $30 million to settle allegations that an Orthofix subsidiary, Blackstone Medical Inc., paid illegal kickbacks to physicians in order to induce use of the company’s products, the Justice Department announced today. Orthofix, which manufactures spinal implants and other spinal surgery products, is a publicly traded company headquartered in Curacao.

 

The civil settlement resolves allegations that Blackstone paid kickbacks to spinal surgeons. These alleged kickbacks took a number of forms, including sham consulting agreements, sham royalty arrangements, sham research grants, travel and entertainment.

 

“Kickbacks to physicians are incompatible with a properly functioning health care system,” said Stuart F. Delery, the Acting Assistant Attorney General for the Department’s Civil Division. “They can corrupt physicians’ medical judgment and cause misallocation of vital health care resources. Today’s settlement reflects the progress we are making in the ongoing fight against abusive and illegal practices in the healthcare industry.”

 

“This settlement demonstrates the government’s continued resolve to ensure that patients receive, and the government pays for, health care that is based solely on sound medical judgment, not compromised by kickbacks,” said Carmen M. Ortiz, U.S. Attorney for the District of Massachusetts. “We believe that this is a just and meaningful resolution that is in the best interests of the citizens of the Commonwealth and taxpayers across the nation.”

 

“To those contemplating taking advantage of Medicare for their own gain, today’s settlement sends a loud, clear message,” said Susan Waddell, Special Agent in Charge of the U.S. Department of Health and Human Services Office of Inspector General New England region.  “Law enforcement will work aggressively to eliminate efforts to abuse vital taxpayer-funded health care programs.”

 

“Our men and women in uniform and their beneficiaries rely on their healthcare providers to perform their jobs without bias and make decisions in the best interest of their patients,” said Kathryn Feeney, Resident Agent in Charge for the Defense Criminal Investigative Service, New Haven Resident Agency.  “Kickbacks, like those alleged here, undermine the TRICARE Military Health System . A settlement like this helps maintain the integrity of an important program our armed services depend on.” 

“Blackstone Medical, Inc. now knows the FBI and our law enforcement partners are committed to investigating and uncovering healthcare fraud in all its forms, particularly schemes like the kickbacks Blackstone perpetrated to obtain profits at the expense of taxpayers,” said Richard DesLauriers, Special Agent in Charge of the Federal Bureau of Investigation Boston Field Division.

As part of the settlement, Orthofix also agreed to enter into a corporate integrity agreement with the Office of Inspector General of the Department of Health and Human Services, which provides for procedures and reviews to be put in place to avoid and promptly detect conduct similar to that alleged in this matter.

 

The allegations resolved by today’s settlement were initially alleged in a whistleblower suit filed under the False Claims Act, which authorizes private citizens to bring suit on behalf of the government for false claims for government funds, and share in any recovery. The whistleblower in this case, Susan Hutcheson, will receive $8 million as her share of the settlement amount.

This resolution is part of the government’s emphasis on combating health care fraud and another step for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced by Attorney General Eric Holder and Kathleen Sebelius, Secretary of the Department of Health and Human Services in May 2009. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover $9.5 billion since January 2009 in cases involving fraud against federal health care programs. The Justice Department’s total recoveries in False Claims Act cases since January 2009 are over $13.2 billion.

 

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

 

The lawsuit was captioned United States ex rel. Hutcheson v. Blackstone Medical, Inc., et al., Civil Action No. 06-11771-WGY (D. Mass.).

The Justice Department and Internal Revenue Service (IRS) announced today that attorney Aristotle R. Matsa (Rick Matsa), of Worthington, Ohio, was sentenced to 85 months in prison by the Judge Edmund A. Sargus Jr. of the U.S. District Court for the Southern District of Ohio. Judge Sargus also ordered Matsa to pay a criminal fine of $265,000, make restitution to the IRS in the amount of $388,000, and pay restitution to a client from whom Rick Matsa embezzled funds in the amount of $24,069.

 

After a five-week trial in Columbus, Ohio, a jury convicted Matsa of numerous tax fraud and obstruction of justice related offenses, including witness tampering and making a false statement. Matsa’s mother and co-defendant, Loula Z. Matsa, was sentenced today to three years of probation and ordered to pay a $150,000 criminal fine for her role in the conspiracy with her son to obstruct justice, commit perjury and make false statements.

 

Rick Matsa individually was convicted of one count of a corrupt endeavor to obstruct and impede the IRS, 15 counts of aiding and assisting in the preparation of false and fraudulent tax returns, that related to five different trusts; one count of willfully failing to file a Report of Foreign Bank and Financial Accounts (FBAR); one count of conspiracy to obstruct justice, commit perjury and make false statements; two counts of witness tampering; one count of submitting a false statement; and one count of obstruction of justice.

 

According to the indictment, which was returned on June 23, 2010, and the evidence admitted at trial, Rick Matsa, who in addition to being an attorney was also an architect, a real estate broker, and a licensed minister in Ohio, created and operated several nominee entities in order to disguise and conceal his income and assets from the IRS. The false trust return charges relate to filings for at least five separate trust entities during the tax years 2003 to 2005. In fact, the evidence at trial showed that he had been filing similarly false returns for the trusts dating back to 1990. Each of the trusts reported receiving significant amounts of interest income each year, yet no income tax was ever reported as due because the trust tax returns fraudulently claimed deductions for distributions purportedly paid annually to a foreign beneficiary.

 

The evidence at trial established, however, that Rick Matsa used funds from these trusts to purchase a 150-acre farm in Hocking County as well as a home in Worthington, both of which he used as a personal residence. In addition, the trusts’ purported foreign beneficiary was located in the Netherlands and testified that she was not the beneficiary of the trusts.

 

The evidence at trial also showed that Rick Matsa violated FBAR, the foreign bank account reporting requirements, by failing to disclose his ownership and control over a foreign bank account held in The Netherlands during calendar year 2003, where an account was maintained by Rick Matsa with funds in excess of $300,000 from at least August 2003 to November 2003.

 

The evidence at trial further showed that after learning of the federal grand jury investigation into his business activities in May of 2006, Rick Matsa, together with Loula Matsa and others, conspired to obstruct justice by concealing evidence from the grand jury, making false statements to the grand jury, creating false documents, tampering with witnesses and lying to federal investigators.

 

George Pappas, formerly an attorney in Urbana, Ohio, who previously pleaded guilty to making false statements to federal agents during the grand jury investigation, testified at trial. Pappas testified that he falsely claimed ownership of Rick Matsa’s law firm, located in the Short North area of Columbus, in their efforts to withhold records from the grand jury. Pappas was sentenced to two years probation and a home confinement term earlier this year.

 

Rick Matsa’s tenant, P. Maria Galloway, the owner of an art gallery located next door to Matsa’s law firm, also testified after pleading guilty to conspiracy to obstruct justice. Galloway testified that she signed numerous documents at Rick Matsa’s direction, including federal income tax returns for Matsa’s law firm and a number of his nominee entities, which Matsa used as part of his scheme to obstruct the IRS, and that she made false statements to agents and the grand jury during the investigation. Galloway also was sentenced to a two year term of probation earlier this year with some home confinement.

 

“Prosecuting individuals who evade taxes through fraudulent schemes has always been and will remain our priority,” said Kathryn Keneally, Assistant Attorney General for the Justice Department’s Tax Division. “The sentence handed down today demonstrates that nobody, and especially not an attorney, should expect to profit financially at the expense of the American taxpayer.”

 

“Mr. Matsa created and operated several nominee entities in order to disguise and conceal his income and assets from the IRS,” said Richard Weber, Chief, IRS Criminal Investigation. “Today, Mr. Matsa is finding out IRS special agents will untangle complex financial transactions to hold accountable those seeking to evade the legal responsibility to pay taxes.”

 

Assistant Attorney General Keneally and Mark D’Alessandro, Acting U.S. Attorney for the Southern District of Ohio on this matter, commended the IRS-Criminal Investigation special agents who investigated the case, as well as Tax Division Trial Attorneys Richard M. Rolwing, Jorge Almonte and Steve Descano who prosecuted the case.

 

More information about the Tax Division and its enforcement efforts is available at http://www.justice.gov/tax.

The Justice Department announced today that its Civil Rights Division plans to deploy more than 780 federal observers and department personnel to 51 jurisdictions in 23 states for the Nov. 6, 2012, general election.

Although state and local governments have primary responsibility for administering elections, the Civil Rights Division is charged with enforcing the federal voting rights laws that protect the rights of all citizens to access the ballot on Election Day.

In the days leading up to and throughout Election Day, Civil Rights Division staff members will be available by telephone to receive complaints related to possible violations of the federal voting rights laws (toll free 1-800-253-3931 or 202-307-2767 or TTY 1-877-267-8971).  In addition, individuals may also report such complaints by fax to 202-307-3961, by email to [email protected]  and by a complaint form on the department ’s website : www.justice.gov/crt/about/vot/.  

Allegations of election fraud are handled by the 94 U.S. Attorneys’ Offices across the country and the Criminal Division’s Public Integrity Section.  Complaints may be directed to any of the local U.S. Attorneys’ Offices, the local FBI offices or the Public Integrity Section at 202-514-1412.

Since the passage of the Voting Rights Act of 1 965, the department has regularly sent observers and monitors around the country to protect the rights of voters .  The Voting Rights Act prohibits discrimination in the election process on the basis of race, color or membership in a minority language group.  In addition, the act requires certain covered jurisdictions to provide language assistance during the election process.  Under the Voting Rights Act, the department is authorized to ask the Office of Personnel Management to send federal observers to areas that have been certified for coverage by a federal court or the attorney general.  The department also may send its own staff to monitor elections in other jurisdictions.

On Election Day, federal observers will monitor polling place activities in 17 jurisdictions:

• Russell County, Ala.;
• Maricopa County, Ariz.;
• Alameda County, Calif.;
• Riverside County, Calif.;
• Randolph County , G a.;
• East Carroll Parish, La.;
• Panola County, Miss.;
• Colfax County, Neb.;
• Sandoval County, N.M.;
• Orange County, N.Y.;
• Cuyahoga County, Ohio;
• Lorain County, Ohio;
• Williamsburg County, S.C.;
• Shannon County ; S.D.;
• Dallas County, Texas;
• Fort Bend County, Texas; and
• Jefferson County, Texas.

Justice Department personnel will monitor the election in an additional 34 jurisdictions:  

• Mobile County, Ala. ;
• Pima County, Ariz.;
• Arapahoe County, Colo.;
• Denver;
• Duval County, Fla.;
• Hendry County , Fl a.;
• Hillsborough County, Fla.;
• Lee County, Fla.;
• Miami-Dade County, Fla.;
• Orange County, Fla.;
• Osceola County, Fla.;
• Chicago & Cook County, Ill.;
• LaPorte County, Ind.;
• Finney County, Kan.;
• Detroit & Hamtramck, Mich.;
• Alamance County, N.C.;
• Wake County, N.C.;
• Bernalillo County, N.M.;
• Cibola County, N.M.;
• Queens County, N.Y.;
• Franklin County, Ohio;
• Hamilton County, Ohio;
• Allegheny County, Pa.;
• Chester County, Pa.;
• Delaware County, Pa.;
• Lehigh County, Pa.;
• Philadelphia ;
• Richland County, S.C.;
• Davidson County, Tenn.;
• Shelby County , Tenn. ;
• Harris County, Texas; and
• Milwaukee

The observers and department personnel will gather information on, among other things, whether voters are subject to different voting qualifications or procedures on the basis of race, color, or membership in a language minority group; whether jurisdictions are complying with the minority language provisions of the Voting Rights Act; whether jurisdictions permit voters to receive assistance by a person of his or her choice if the voter is blind, has a disability, or is unable to read or write; whether jurisdictions allow voters with disabilit ies to cast a private and independent ballot; whether jurisdictions comply with the voter registration list requirements of the National Voter Registration Act; and whether jurisdictions comply with the provisional ballot requirements of the Help America Vote Act.  To assist in these inquiries, the department has deployed observers and monitors who speak Spanish and a variety of Asian and Native American languages.  Both the federal observers and department personnel will coordinate monitoring activities, and department attorneys maintain contact with local election officials.

Last month, the Justice Department announced efforts to ensure that all qualified voters have the opportunity to cast their ballots and have their votes counted free of discrimination, intimidation or fraud in the election process. More information about the Voting Rights Act and other federal voting and election-related laws is available on the Civil Rights Division ’s web site at www.usdoj.gov/crt/voting

The Justice Department announced today that it will monitor portions of the early voting period for the Nov. 6, 2012, general election in Miami-Dade County, Fla., to ensure compliance with the Voting Rights Act of 1965.  The Voting Rights Act prohibits discrimination in the election process on the basis of race, color or membership in a minority language group.

 

Justice Department personnel will monitor polling place activities during early voting in this county.  Civil Rights Division attorneys will coordinate federal activities and maintain contact with local election officials.

 

Each year, the Justice Department deploys hundreds of federal observers from the Office of Personnel Management, as well as departmental staff, to monitor elections across the country.  To file complaints about discriminatory voting practices, including acts of harassment or intimidation, voters may call the Voting Section of the Justice Department’s Civil Rights Division at 1-800-253-3931. The Justice Department previously announced that it would be monitoring early voting for the general election in Dallas and Harris Counties in Texas.

 

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

WASHINGTON – Two German shipping companies pleaded guilty today in federal court in Houston to criminal charges that they concealed the illegal dumping of oil at sea from U.S. Coast Guard inspectors.

Nimmrich & Prahm Bereederung and Nimmrich & Prahm Reedrei, the operator and owner of the commercial cargo vessel M/V Susan K, will pay a $1.2 million dollar criminal penalty, $200,000 of which will go to the National Marine Sanctuaries Fund as a community service payment for projects aimed at preserving and restoring the Flower Garden Banks National Marine Sanctuary located off the Texas coast.  As a condition of probation, all vessels owned or operated by the defendants will be prohibited from entering U.S. ports or waters for five years.

Federal and international law requires that cargo vessels like the M/V Susan K dispose of oily bilge waste water by using an oil water separator (OWS) or disposing of the waste water at shore facilities.  The law also requires that the crew record the disposal of oily waste water in an oil record book that is presented to the Coast Guard during a port inspection.

According to the plea agreement, the chief engineer and other crew members on board the vessel repeatedly discharged oily bilge waste water from the vessel into the ocean from before Aug. 1, 2011, to March 4, 2012, by using a hose that bypassed the vessel’s OWS.  The chief engineer then falsified the vessel’s oil record book to conceal the dumping from Coast Guard inspectors when the vessel entered the U.S. ports in Alaska on Jan. 24, 2012, and then in Houston on March 4, 2012.

“Illegal discharges of oil at sea by commercial shippers is an all too common practice, and today’s sentence shows that there are serious consequences for it,” said Ignacia S. Moreno, Assistant Attorney General of the Justice Department’s Environment and Natural Resources Division. “The defendants will pay a significant penalty and be barred from U.S. waters for deliberately concealing from U.S. authorities their illegal dumping of oil from Alaska to the coast of Texas while at sea.  Vessel companies that deliberately violate the laws enacted to protect the oceans will be pursued and prosecuted.”

“The outcomes of these cases demonstrate the commitment of the U.S. Coast Guard and the Department of Justice to protecting our marine environment,” said Rear Admiral Roy A. Nash, Eighth Coast Guard District Commander.  “We continue to ensure that companies and individuals who break the law and endanger our natural resources are held accountable.”

The community service payment to the National Marine Sanctuary Foundation will be used to conduct critical monitoring, research and restoration projects in and around Flower Garden Banks National Marine Sanctuary in the Gulf of Mexico.  These projects will include coral reef surveys, especially to collect data on coral spawning events and coral resilience.  They will also include species monitoring projects, such as acoustic tagging of sensitive, threatened and endangered marine species including manta rays and tiger sharks, as well as commercially important species such as red snapper.

According to court documents, the Coast Guard boarded the vessel in Houston on April 6, 2012, after receiving a tip from a lower level crew member about the illegal dumping of oil and found the hose used to dump the oily waste overboard.  During the inspection, the chief engineer lied to the Coast Guard about the hose and the oil dumping and instructed a crew member to lie to the Coast Guard about the use of the hose.  The three whistle blowers on the vessel who assisted in the criminal investigation were each awarded $67,000 by the court.  

Overall, the companies pleaded to two obstruction of justice charges and one violation of the Act to Prevent Pollution from Ships for the violations in the District of Alaska and Southern District of Texas; the single obstruction of justice charge in Alaska was transferred procedurally to Houston.  On Sept. 10, 2012, the chief engineer of the vessel pleaded guilty to one criminal charge in Texas and was fined $1,000 and sentenced to one year probation.

This case is being investigated by the U.S. Coast Guard Investigative Service. It is being prosecuted by David P. Kehoe, Senior Trial Attorney, Environmental Crimes Section of the Justice Department’s Environment and Natural Resources Division, Gary Cobe, Assistant U.S. Attorney for the Southern District of Texas, and Kevin Feldis, Assistant U.S. Attorney, District of Alaska.

WASHINGTON – A Houston resident and member of the Aryan Brotherhood of Texas (ABT) gang was sentenced today to 72 months in prison for his role in an aggravated assault that took place in Tomball, Texas, in September 2008, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney Kenneth Magidson of the Southern District of Texas.

Bobby Teets, 46, aka “Bull,” pleaded guilty on Dec. 9, 2010, to racketeering aggravated assault for his role in the assault of an applicant for membership in the gang, and was sentenced today by U.S. District Court Judge Ewing Werlein Jr.  Teets is to serve the 72-month sentence consecutively to the state prison term he is currently serving.  In addition to the prison term, Teets was ordered to serve three years of supervised release and ordered to pay a $3,000 fine. 

According to court documents, Teets was a member of the ABT, a race-based, state-wide organization that operated inside and outside of state and federal prisons throughout the United States.  The ABT was established in the early 1980s within the Texas prison system.  The gang modeled itself after and adopted many of the precepts and writings of the Aryan Brotherhood, a California-based prison gang that was formed in that state’s prison system during the 1960s.  According to court documents, the ABT was concerned at one time primarily with the protection of white inmates, white supremacy and separatism.  Over time, the ABT has expanded its criminal enterprise to include illegal activities for profit.

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

According to court documents, on Sept. 22, 2008, Teets and 11 fellow ABT gang members participated in the beating of a prospective ABT member, at the home of ABT gang leader Steven Walter Cooke, 48, aka “Stainless,” in Tomball.  The prospective ABT member, who sustained serious bodily injury, was beaten by ABT gang members because he violated ABT rules of conduct. 

Eleven of the 12 defendants have pleaded guilty for their roles in the assault.  The 12th ABT gang member, David Harlow, 43, aka “Bam Bam,” was found guilty following his trial in the Southern District of Texas by Judge Werlein on March 21, 2012.

This case is being investigated by a multi-agency task force consisting of the Bureau of Alcohol, Tobacco, Firearms and Explosives; the Drug Enforcement Administration; the FBI; U.S. Marshals Service; Texas Rangers; Texas Department of Public Safety; Walker County, Texas, Sheriff’s Office; Montgomery County, Texas, Sheriff’s Department; Houston Police Department-Gang Division; Tomball Police Department; Texas Department of Criminal Justice – Inspector General; and Harris County, Texas, Sheriff’s Office.

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