District Not Recorded

The Justice Department and the U.S. Attorney’s Office for the Western District of Texas announced today that there is insufficient evidence to pursue federal criminal charges against a U.S. Customs and Border Protection (CBP), Office of Border Patrol agent for the fatal shooting of the late Sergio Hernandez-Guereca, a 15-year-old Mexican national shot within a spillway of the Rio Grande River along the United States – Mexico border on June 7, 2010.      

The Justice Department conducted a comprehensive and thorough investigation into the shooting, which occurred while smugglers attempting an illegal border crossing hurled rocks from close range at a CBP agent who was attempting to detain a suspect.  In conjunction with agents from the FBI and Department of Homeland Security, Office of the Inspector General (DHS-OIG), prosecutors from the Justice Department’s Civil Rights Division and the U.S. Attorney’s Office interviewed more than 25 law enforcement and civilian witnesses.  In addition, they collected, analyzed and reviewed:  evidence from the scene of the shooting; civilian and surveillance video; law enforcement radio traffic; 911 recordings; volumes of CBP agent training and use of force materials; and the shooting agent’s training, disciplinary records, and personal history.  Also, they conducted site visits and analysis and consulted with the International Boundary and Water Commission concerning jurisdictional issues.  

The team of experienced prosecutors examined the shooting as a possible violation of U.S. criminal civil rights laws and as a possible violation of federal homicide statutes.   With regard to the federal homicide statutes, the team of prosecutors and agents concluded that there is insufficient evidence to pursue prosecution of the CBP agent for a federal homicide offense.  This review took into account evidence indicating that the agent’s actions constituted a reasonable use of force or would constitute an act of self defense in response to the threat created by a group of smugglers hurling rocks at the agent and his detainee. The investigation also revealed that, on these particular facts, the agent did not act inconsistently with CBP policy or training regarding use of force.  Based on a careful review and analysis of all the evidence, the team concluded that evidence would not be sufficient to prove beyond a reasonable doubt that the CBP agent violated the federal homicide laws in the shooting of Hernandez-Guereca.

 

The Justice Department also concluded that no federal civil rights charges could be pursued in this matter.  Under the applicable civil rights statutes, prosecutors must establish, beyond a reasonable doubt, that a law enforcement officer willfully deprived an individual of a constitutional right, meaning with the deliberate and specific intent to do something the law forbids.  This is the highest standard of intent imposed by law.  Accident, mistake, misperception, negligence and bad judgment are not sufficient to establish a federal criminal civil rights violation.  After a careful and thorough review, a team of experienced federal prosecutors and FBI agents determined that the evidence was insufficient to prove, beyond a reasonable doubt, that the CBP agent acted willfully and with the deliberate and specific intent to do something the law forbids, as required by the applicable federal criminal civil rights laws.  Moreover, a prosecution under the federal criminal civil rights statutes would be barred because the investigation determined that Hernandez-Guereca was neither within the borders of the United States nor present on U.S. property, as required for jurisdiction to exist under the applicable federal civil rights statute. 

Accordingly, the investigation into this incident has been closed without prosecution.

The U.S. government regrets the loss of life in this matter, and the Civil Rights Division, the U.S. Attorney's Office for the Western District of Texas, the FBI and DHS devoted significant time and resources into conducting a thorough and complete investigation. The USG commits to continue to work with the Mexican government within existing mechanisms and agreements to prevent future incidents.  The Justice Department is committed to investigating allegations of excessive force by law enforcement officers and will continue to devote the resources required to ensure that all allegations of federal civil rights violations are fully and completely investigated.  The department aggressively prosecutes criminal civil rights violations whenever there is sufficient evidence to do so.

Ira Isaacs, 60, was found guilty today in U.S. District Court in Los Angeles on one count of engaging in the business of producing and selling obscene videos and four counts of distributing obscene videos, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division, U.S. Attorney André Birotte Jr. of the Central District of California, Assistant Director in Charge Steve Martinez of the FBI’s Los Angeles Field Office, and Los Angeles Police Department Chief Charlie Beck. 

A federal jury in the Central District of California found Isaacs guilty on all charged counts of a superseding indictment filed in April 2011.

 

Evidence presented at trial established that beginning in or about 1999 and continuing until at least 2011, Isaacs, doing business under the name L.A. Media, operated numerous websites, through which he advertised and sold obscene videos which he acquired from other persons.  The obscene videos included a video approximately two hours in length of a female engaging in sex acts involving human bodily waste and a video one hour and 37 minutes in length of a female engaged in sex acts with animals.

 

The evidence presented at trial also established that in or about 2004, Isaacs began operating under the name Stolen Car Films, and made obscene videos in which he instructed women to engage in sexual activity involving human bodily waste.  He subsequently advertised and sold the videos through his various websites. 

 

Isaacs is scheduled to be sentenced on Aug. 6, 2012. 

 

The case is being prosecuted by Trial Attorney Michael W. Grant and Deputy Chief Damon King of the Criminal Division's Child Exploitation and Obscenity Section (CEOS), with the assistance of Jeannette Gunderson, a trial attorney with the Asset Forfeiture and Money Laundering Section.  The investigation was conducted by the FBI and Los Angeles Police Department.  

An Alabama real estate investor has agreed to plead guilty and to serve one year in prison for his role in conspiracies to rig bids and commit mail fraud at public real estate foreclosure auctions in southern Alabama, the Department of Justice announced today.  To date, as a result of the ongoing investigation, four individuals and one company have pleaded guilty.

Charges were filed yesterday in the U.S. District Court for the Southern District of Alabama in Mobile, Ala., against Steven J. Cox of Mobile.  Cox was charged with one count of bid rigging and one count of conspiracy to commit mail fraud.  According to the plea agreement, which is subject to court approval, Cox has agreed to serve one year in prison, to pay a $10,000 criminal fine and to cooperate with the department’s ongoing investigation.

According to court documents, Cox conspired with others not to bid against one another at public real estate foreclosure auctions in southern Alabama.  After a designated bidder bought a property at the public auctions, which typically take place at the county courthouse, the conspirators would generally hold a secret, second auction, at which each participant would bid the amount above the public auction price he or she was willing to pay.  The highest bidder at the secret, second auction won the property.

Cox was also charged with conspiring to use the U.S. mail to carry out a scheme to acquire title to rigged foreclosure properties sold at public auctions at artificially suppressed prices, to make and receive payoffs to co-conspirators and to cause financial institutions, homeowners and others with a legal interest in rigged foreclosure properties to receive less than the competitive price for the properties.  Cox participated in the bid-rigging and mail fraud conspiracies from as early as January 2004 until at least May 2010. 

           
“The Antitrust Division continues to work with its law enforcement partners to ensure that real estate foreclosure auctions are fair and competitive,” said Acting Assistant Attorney General in charge of the Department of Justice’s Antitrust Division Sharis A. Pozen.  “The division will vigorously pursue those who engage in collusive schemes to eliminate competition in the marketplace.” 

FBI Special Agent in Charge of the Mobile FBI Office Lewis M. Chapman recognized the perseverance of agents and prosecutors in this complex investigation.  Chapman stated, “This investigation sends the message that real estate fraud including antitrust violations will continue to be pursued in these tough economic times, no matter how intricate the scheme.”

Each violation of the Sherman Act carries a maximum penalty of 10 years in prison and a $1 million fine for individuals.  The maximum fine for a Sherman Act charge may be increased to twice the gain derived from the crime or twice the loss suffered by the victim if either amount is greater than the statutory maximum fine.  Each count of conspiracy to commit mail fraud carries a maximum penalty of 20 years in prison and a fine in an amount equal to the greatest of $250,000, twice the gross gain the conspirators derived from the crime or twice the gross loss caused to the victims of the crime by the conspirators.

The investigation into fraud and bid rigging at certain real estate foreclosure auctions in southern Alabama is being conducted by the Antitrust Division’s Atlanta Field Office and the FBI’s Mobile Office, with the assistance of the U.S. Attorney’s Office for the Southern District of Alabama.  Anyone with information concerning bid rigging or fraud related to public real estate foreclosure auctions should contact the Antitrust Division’s Atlanta Field Office at 404-331-7100 or visit www.justice.gov/atr/contact/newcase.htm.

Yesterday’s charges are part of efforts underway by President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency 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.  For more information on the task force, visit www.StopFraud.gov.

Two northern California real estate investors have agreed to plead guilty for their roles in conspiracies to rig bids and commit mail fraud at public real estate foreclosure auctions in northern California, the Department of Justice announced.

The felony charges were filed today in the U.S. District Court for the Northern District of California in San Francisco, against Lydia Fong and Matthew Worthing, both of San Francisco. 

According to court documents, Fong and Worthing conspired with others for various lengths of time between October 2009 and November 2010, not to compete against one another, but instead to designate a winning bidder to obtain selected properties at public real estate foreclosure auctions in San Francisco County.  Worthing was also charged with participating in a similar conspiracy in San Mateo County, Calif. from September 2010 until January 2011.  Fong and Worthing also were charged with conspiracies to use the mail to carry out a scheme to fraudulently acquire title to selected properties sold at public auctions. 

“The collusion taking place at these auctions eliminated competition from the marketplace and allowed the conspirators to profit from the financial distress of others,” said Acting Assistant Attorney General Sharis A. Pozen in charge of the Department of Justice’s Antitrust Division.  “The division will continue to pursue the perpetrators of these fraudulent schemes so they are held accountable for their actions.”

“Fraudulent bid rigging and other anticompetitive activities at foreclosure auctions by conspirators are illegal and unfair to individuals who are forced to sell and legitimate buyers looking to purchase homes in our communities,” said FBI Special Agent in Charge Stephanie Douglas of the San Francisco Field Office.  “We continue to work closely with our partners at the Antitrust Division to identify and bring to justice those who engage in this type of activity.”

The department said that the primary purpose of the conspiracies was to suppress and restrain competition and to make and receive payoffs in order to obtain selected real estate offered at San Mateo and San Francisco Counties public foreclosure auctions at non-competitive prices.  When real estate properties are sold at these auctions, the proceeds are used to pay off the mortgage and other debt attached to the property, with remaining proceeds, if any, paid to the homeowner.

Each violation of the Sherman Act carries a maximum penalty of 10 years in prison and a $1 million fine for individuals.  The maximum fine for the Sherman Act charges may be increased to twice the gain derived from the crime or twice the loss suffered by the victim if either amount is greater than the $1 million statutory maximum. Each count of conspiracy to commit mail fraud carries a maximum sentence of 30 years in prison and a $1 million fine.  The government can also seek to forfeit the proceeds earned from participating in the conspiracy to commit mail fraud. 

The charges today are the latest cases filed by the department in its ongoing investigation into bid rigging and fraud at public real estate foreclosure auctions in San Francisco, San Mateo, Contra Costa and Alameda Counties, Calif.  To date, as a result of the investigation, 22 individuals, including Fong and Worthing, have agreed to plead or have pleaded guilty.

The ongoing investigation into fraud and bid rigging at certain real estate foreclosure auctions in northern California is being conducted by the Antitrust Division’s San Francisco Office and the FBI’s San Francisco office.  Anyone with information concerning bid rigging or fraud related to public real estate foreclosure auctions should contact the Antitrust Division’s San Francisco Office at 415-436-6660, visit www.justice.gov/atr/contact/newcase.htm or call the FBI tip line at 415-553-7400.

Today’s charges are 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.  For more information on the task force, visit www.StopFraud.gov.

**The fraud charge against Lydia Fong referenced in this press release was subsequently dismissed on the government’s motion.**

WASHINGTON – Two alleged members of the Philadelphia organized crime family of La Cosa Nostra (LCN) were arrested today on racketeering charges contained in a second superseding indictment, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney Zane David Memeger for the Eastern District of Pennsylvania and Special Agent in Charge George C. Venizelos of the FBI’s Philadelphia Field Office. 

 

Joseph Licata, 70, of Florham Park, N.J., and Louis Fazzini, 45, of Caldwell, N.J., were arrested today in the Newark, N.J., area and will make initial court appearances in U.S. District Court in Philadelphia at 1:30 p.m. EST.  They are each charged with racketeering conspiracy.  According to the second superseding indictment, Licata served as a “caporegime” of North Jersey crew of the Philadelphia LCN Family and supervised Louis Fazzini, a fully initiated or “made” member of this crew, in the operation of an illegal sports gambling business and other activities. 

 

The 52-count second superseding indictment also charges 12 defendants who were previously charged in a May 23, 2011, superseding indictment: Philadelphia LCN Family acting boss Joseph Ligambi, Philadelphia LCN Family underboss Joseph Massimino, George Borgesi, Martin Angelina, Anthony Staino Jr., Gaeton Lucibello, Damion Canalichio, Louis Barretta, Gary Battaglini, Robert Verrecchia, Eric Esposito and Robert Ranieri. 

 

The second superseding indictment adds two new charges against Philadelphia LCN Family acting boss Ligambi relating to theft from an employee benefit plan administered by the Teamsters Health and Welfare Fund of Philadelphia and Vicinity.  According to the second superseding indictment, from 2003 to 2011, Ligambi unlawfully caused the Teamsters Health and Welfare Fund of Philadelphia and Vicinity to pay the cost of health benefits provided to him and several of his family members through a “no show” job at Top Job Disposal, a Philadelphia-based waste hauling and removal company.  As a “no show” employee, he performed no work or productive services for Top Job Disposal, while still receiving pay and health benefits. 

 

The second superseding indictment alleges that for more than a decade, 11 of the defendants, including Ligambi as the acting boss and Massimino as the underboss, as well as other members and associates of the Philadelphia LCN Family in Philadelphia and New Jersey, conspired to conduct and participate in the affairs of the Philadelphia LCN Family through a pattern of racketeering activity and through the collection of unlawful debts.  The alleged racketeering activity includes numerous acts involving extortion, extortionate extensions of credit through usurious loans, extortionate collections, illegal gambling, witness tampering and theft from an employee benefit plan.  The organization’s collection of unlawful debts allegedly relates to its loan sharking operations and debts that arose from their illegal gambling businesses.

 

According to the second superseding indictment, the defendants promoted and furthered their illegal money-making activities through violence, actual and implied threats, and the cultivation and exploitation of the Philadelphia LCN Family’s long-standing reputation for violence.  The defendants also used this reputation for violence to intimidate and prevent victims and witnesses from cooperating with law enforcement.  The second superseding indictment alleges various instances where defendants used phrases such as “chop him up” and “put a bullet in your head” when threatening victims.  In one instance, Canalicho allegedly used a bat to beat a victim for not paying a loan debt.

 

The second superseding indictment alleges that some of the defendants continued their racketeering activities even after being sent to prison.  For example, Borgesi and Massimino, while in prison, allegedly generated criminal proceeds for themselves and the Philadelphia LCN Family by using intermediaries to operate criminal businesses and to make extortionate demands at their direction. 

 

Each charge of racketeering conspiracy, collection of unlawful debt, collection of extensions of credit through extortionate means, making extortionate extensions of credit, financing extortionate extensions of credit and witness tampering carries a maximum penalty of 20 years in prison and a $250,000 fine.  The illegal gambling and theft from an employee benefit plan charges each carry a maximum penalty of five years in prison and a $250,000 fine. 

 

The case is being prosecuted by Trial Attorney John S. Han of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorney Frank A. Labor III for the Eastern District of Pennsylvania.  Valuable prosecutorial assistance was provided by the Pennsylvania Office of the Attorney General.

 

The case is being investigated by the FBI, the Internal Revenue Service Criminal Investigation Division, the Pennsylvania State Police, the New Jersey State Police, the Philadelphia Police Department and the U.S. Department of Labor Office of Inspector General Office of Labor Racketeering and Fraud Investigations and the Employee Benefits Security Administration.  Additional assistance was provided by the New Jersey Department of Corrections.

     

An indictment is merely an accusation and each defendant is presumed innocent until and unless they are proven guilty. 

The Attorney General made the following statement today on the Senate’s approval of the reauthorization of the Violence Against Women Act (VAWA):

 

“No one should suffer from domestic violence, sexual assault, dating violence or stalking, which is why I applaud the passage of the bill to reauthorize the critical Violence Against Women Act (VAWA) through the Senate.  This legislation originally transformed our nation’s response to crimes against women, and today it helps us bring justice to victims and hold offenders accountable.  The Department of Justice is committed to ending violence against women and vigorously enforcing the provisions of VAWA.”

 

About the Office of Violence Against Women (OVW):

 

Since the passage of VAWA in 1994, OVW has awarded over $4.6 billion in grants and cooperative agreements. VAWA grant funds train an average of over 500,000 law enforcement officers, prosecutors, judges, victim advocates, and other personnel every year and provide services to more than 700,000 victims. These investments have supported a wide variety of critical efforts – from initiatives aimed at preventing teen dating violence and sexual assaults, to improving the reporting of these crimes, reducing the backlog of rape kits, and building the capacity of Tribal Courts to combat domestic violence.   And several OVW programs support initiatives and organizations that – by providing women with job training, financial literacy training, and housing services – have already had a clear economic impact.

 

For more information on OVW, go to www.ovw.usdoj.gov.

Billie Ray Pratt, age 24, of Halethorpe, Md., pleaded guilty today to his involvement in hanging a raccoon on the porch of a family from Africa.

According to his plea agreement, in April 2010 Pratt, Joshua Wall and three other co-conspirators agreed on a plan to hang a dead raccoon from a noose on the porch of an African family to frighten them and to interfere with their housing rights.  Pratt claimed that two of his co-conspirators drove around until they found a dead raccoon and made the noose to put around the raccoon’s neck.  Wall and a co-conspirator hung the raccoon on the porch of the home in the middle of the night while Pratt acted as a look-out.

“The hanging of a noose is a powerful symbol of hate that has no place in our country,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The department will continue to prosecute acts such as this one to the fullest extent of the law.”

The investigation remains is ongoing.

Pratt faces a maximum penalty of 10 years in prison and a $250,000 fine for conspiracy to deprive a person of civil rights.  U.S. District Judge Ellen L. Hollander has scheduled sentencing for Aug. 17, 2012. 

Joshua Wall, age 20, of Essex, Md., pleaded guilty on March 5, 2012 to his involvement in the conspiracy and faces the same maximum penalty at his sentencing scheduled for Aug. 17, 2012.

U.S. Attorney Rod J. Rosenstein and Assistant Attorney General Thomas E. Perez commended the FBI for its work in the investigation and thanked U.S. Department of Justice Trial Attorney AeJean Cha of the Civil Rights Division and Assistant U.S. Attorney P. Michael Cunningham, who are prosecuting the case.

WASHINGTON – Integrated Production Services Inc. (IPS), a Houston-based natural gas and oil drilling contractor, was sentenced today in federal court in Muskogee, Okla., to pay a criminal fine of $140,000 for violations of the Clean Water Act at its hydraulic fracturing operation in Atoka County, Okla., the Justice Department announced.

Gabriel Henson, a crew supervisor for IPS, was sentenced to two years probation and a fine of $2,500.

In May 2007, IPS was performing hydraulic fracturing (fracking) at the Pettigrew 18-3H well site in Atoka County, where Henson was a crew supervisor.  IPS’s fracking operations included using hydrochloric acid to penetrate though bedrock and thousands of feet of substrata.

On May 24, 2007, a tank leaked an estimated 400-700 gallons of hydrochloric acid onto the earthen pad surface of the well site.  The earthen pad was also flooded with water from recent heavy rainfall.  In order to remove the rainwater from the well site, Henson drove a pickup truck owned by IPS through an earthen berm, causing the rainwater contaminated with hydrochloric acid to flow off the well pad and down into Dry Creek, a tributary of Boggy Creek, a water of the United States under the Clean Water Act.  Henson and IPS both pleaded guilty to a negligent violation of the Clean Water Act, on July 10, 2011, and Sept. 21, 2011, respectively.  
 
IPS was also sentenced to a community service payment of $22,000 to the Oklahoma Department of Wildlife Conservation for ecological studies and remediation of Boggy Creek, located in the Eastern District of Oklahoma.  IPS will serve a two-year period of probation, during which it will be required to implement and perform an Environmental Compliance Program at a cost of no less than $38,000 to train IPS employees regarding proper hazardous waste handling and spill response procedures. 

This case was investigated by the U.S. Environmental Protection Agency Criminal Investigation Division and the Oklahoma Attorney General’s Office of Inspector General.  The case is a joint prosecution between the U.S. Attorney’s Office for the Eastern District of Oklahoma and the Environmental Crimes Section of the U.S. Department of Justice, Environment and Natural Resources Division.

McKesson Corporation has agreed to pay the United States more than $190 million to resolve claims that it violated the False Claims Act by reporting inflated pricing information for a large number of prescription drugs, causing Medicaid to overpay for those drugs.

 

Stuart F. Delery, Acting Assistant Attorney General for the Justice Department’s Civil Division; New Jersey U.S. Attorney Paul J. Fishman; and Daniel R. Levinson, Inspector General of the U.S. Department of Health and Human Services announced the settlement today.

 

The government alleges that McKesson, a large drug wholesaler, reported the inflated pricing data to First DataBank (FDB), a publisher of drug prices that are used by most state Medicaid programs to set payment rates for pharmaceuticals.

 

The Medicaid program is funded jointly by the federal and state governments. This settlement resolves claims based on the federal share of Medicaid overpayments caused by McKesson’s conduct. In addition to the $190 million – which represents the $187 million settlement and interest – state governments can separately negotiate with McKesson to resolve claims based on the states’ shares of the Medicaid overpayments.

 

The drug pricing data at issue here relates to the “Average Wholesale Price” (AWP) benchmark used by Medicaid and other programs to set payment rates for pharmaceuticals. The settlement announced today is based on the United States’ allegations that McKesson reported inflated mark-up percentages to FDB for a wide variety of brand name drugs, causing FDB to publish inflated AWPs for those drugs.

 

To date, federal and state governments have recovered more than $2 billion from drug manufacturers that were alleged to have reported inflated AWP information to FDB and other publishers of drug prices.

 

“This case demonstrates the Department of Justice’s commitment to ensuring that Medicaid funds are expended appropriately,” said Acting Assistant Attorney General Delery. “Companies that report pricing data that affect government payment rates, whether those companies are manufacturers, wholesalers, or otherwise, are required to report that data accurately.”

 

“This is the latest example of a corporation’s intentionally manipulating the complicated system by which drug purchases are reimbursed,” said U.S. Attorney Fishman.  “We have no tolerance for those who take advantage of that system to bring in more business by falsely increasing reimbursements to retailers.”  

 

“This settlement with McKesson highlights the Office of Inspector General’s commitment to protecting against artificially inflated drug prices,” said Inspector General Levinson. “Our analyses of drug price reporting practices – including the use of ‘Average Wholesale Price’ – have consistently identified excessive Medicare and Medicaid payments resulting from these practices.”

 

U.S. Attorney Fishman credited special agents of the U.S. Department of Health and Human Services Office of Inspector General, under the direction of Special Agent in Charge Thomas O’Donnell of the New York Regional Office, for the investigation leading to today’s settlement.

 

The government is represented by Assistant U.S. Attorney Alex Kriegsman of the U.S. Attorney’s Office Civil Division in Newark and Jeffrey A. Toll and Justin Draycott of the U.S. Department of Justice’s Civil Division.

 

McKesson does not admit to any liability regarding the claims settled by this agreement.

Howard Levine, owner of a Dix Hill, N.Y., tax preparation business was sentenced to 37 months in prison for tax crimes, the Justice Department and Internal Revenue Service (IRS) announced today. On Jan. 5, 2012, Levine pleaded guilty to obstructing the internal revenue laws and aiding in the preparation of false income tax returns for clients.

According to the plea agreement and statements made in court, Howard Levine owned and operated Milaur Associates, also known as Milaur Inc. Many of the tax returns prepared by Levine for 2004 through 2009 were false and contained fictitious deductions, business expenses and corporate losses created by Levine. According to court documents, Levine admitted to preparing no fewer than 56 false income tax returns, resulting in a tax loss of more than $620,000.

 

In 2009, the U.S. District Court for the Eastern District of New York issued an injunction that barred Levine from preparing federal income tax returns for anyone other than himself. According to the plea agreement, Levine violated that court injunction and continued to prepare false income tax returns for clients. In order to obstruct and mislead the IRS from determining his role in preparing the returns, Levine provided false information in the paid preparer section of the returns he prepared.

 

U.S. District Court Judge Joseph F. Bianco, sitting in Central Islip, N.Y., also ordered Levine to pay $320,998 in restitution to the IRS.

 

The case was investigated by Special Agents of IRS - Criminal Investigation and was prosecuted by Trial Attorneys Mark Kotila and Jeffrey B. Bender of the Justice Department’s Tax Division.

The Justice Department today announced that it has reached a consent decree with Waupaca County, Wis., to resolve allegations that the county discriminated against an employee by denying her a promotion because of her sex.

 

The Justice Department filed its complaint against the county in June 2011 in the U.S. District Court for the Eastern District of Wisconsin.  The complaint alleged that the county violated Title VII of the Civil Rights Act of 1964 when it failed to promote a female patrol officer in its sheriff’s department to sergeant because of her sex.  Title VII of the Civil Rights Act of 1964 prohibits discrimination in employment on the basis of race, color, sex, national origin and religion.

 

According to the Justice Department’s complaint, the county denied Julie Thobaben a promotion to detective sergeant in its sheriff’s department because she is a woman.  Although Ms. Thobaben was the most qualified applicant for the position, the county promoted a male patrol officer instead, even though, at the time, he was not eligible for promotion as a result of discipline the county had imposed upon him.  The county argued that it lawfully denied Ms. Thobaben the promotion because its nepotism policy prohibited it from making Ms. Thobaben a detective sergeant since, in that capacity, Ms. Thobaben would supervise her husband, who is a patrol officer at the county sheriff’s department.  However, the county has not applied its nepotism policy to at least eight other male employees who supervise immediate family members. 

 

Under the terms of the consent decree, which must still be approved by the federal court, the county must promote Ms. Thobaben to the position of detective sergeant within three years and increase her current pay rate to that of a detective sergeant.  The county must also pay her $141,641.10 in monetary relief, including backpay with interest, attorney’s fees, and compensatory damages.   In addition, the county must review and, if appropriate, amend its equal employment opportunity and nepotism policies in order to protect its employees from discrimination and retaliation.  The county must also conduct training of its personnel regarding these policies.  

 

“Title VII ensures that women in the workplace have the right to be considered for promotion without regard to their sex, and the Department of Justice will not tolerate discrimination in employment on the basis of sex,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The Civil Rights Division is pleased that Waupaca County will review and amend its policies, provide training to its employees regarding the requirements of Title VII, and provide Ms. Thobaben with the relief to which she is entitled.”

 

James L. Santelle, U.S. Attorney for the Eastern District of Wisconsin, stated: “Our uniform, focused enforcement of Title VII, including its prohibition on gender-based discrimination in the employment setting, continues to be a significant priority within our diverse affirmative civil docket.  The announcement today of the settlement of the claims by Ms. Thobaben not only ensures that she will be compensated monetarily for past discrimination but that she will be serving the people of Waupaca County as a detective sergeant based upon her merit-based qualifications for that position.."

 

The continued enforcement of Title VII has been and remains a priority of the Justice Department’s Civil Rights Division.  Additional information about the Civil Rights Division of the Justice Department is available on its website at www.usdoj.gov/crt/ .

Former Tuscaloosa County Sheriff’s sergeant, Althea Mallisham, 52, has been sentenced to 61 months in prison for civil rights convictions for wrongfully using a Taser against three detainees during separate incidents over a four month period in 2008.

On Nov. 16, 2011, Mallisham pleaded guilty to three felony civil rights offenses at which time she admitted that on separate occasions while she was on duty as a Tuscaloosa Sheriff's sergeant and acting under color of state law, she used an X26 Taser to electro-shock three pre-trial detainees as a means of punishment. In each instance, the pre-trial detainees were either restrained in handcuffs or securely locked in a jail cell. None of the three detainees posed a physical threat to any officers or other detainees when they were electro-shocked. In each instance, Mallisham willfully exceeded and abused her authority under state law.

 

“Law enforcement officers who abuse their power to maliciously subject those in their custody to extreme pain will be held accountable,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The Justice Department will continue to vigorously prosecute those who cross the line to engage in acts of criminal misconduct.”

 

“Officer Mallisham took an oath to uphold the law. Virtually all of our law enforcement officers respect their oaths and the power they are entrusted with to enforce the law, and they perform their duties with honor and integrity,” said Joyce White Vance, U.S. Attorney for the Northern District of Alabama. “Mallisham, however, violated her oath and broke the law.  Today, she has been held accountable and sentenced to five years in prison.”

This case was investigated by the Tuscaloosa resident agency of the FBI’s Birmingham Field Office. The case was prosecuted by Trial Attorney D.W. Tunnage of the Justice Department’s Civil Rights Division and Assistant U.S. Attorney Tamarra Matthews-Johnson for the Northern District of Alabama.

Former District of Columbia Department of Corrections Officer Victor Bell, 25, pleaded guilty today to a criminal civil rights charge for assaulting an inmate in the District of Columbia Central Detention Facility (D.C. jail).

 

During the plea proceedings, Bell admitted that on Jan. 4, 2012, he became upset with an inmate who was expressing his disapproval of a pat-down search that Bell was conducting of another inmate in a third-floor corridor. Bell then began following the disapproving inmate as he started to walk away. Bell confronted him chest-to-chest, and the inmate again attempted to walk away. After handing off his eyeglasses to another D.C. jail employee, Bell once again followed the inmate, and with both hands, pushed him in the back.

 

As the confrontation continued, Bell grabbed the inmate by the shoulder, pushed him into a corner of the corridor, and began punching him repeatedly in the head. In addition, Bell grabbed the inmate’s dreadlocks, pulling one out. Even after another corrections officer called for assistance, Bell continued punching the inmate until other officers pulled him away.

 

At no point during the incident did the inmate physically fight the defendant. The inmate, who was disoriented, was taken to the infirmary, where a cut to his right eye was sutured.

 

“While the vast majority of law enforcement officers perform their duties with great care and honor, those who seek to violate the civil rights of those in their custody will be held accountable,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The Justice Department will continue to vigorously prosecute officers who cross the line to engage in acts of criminal conduct.”

 

“No one is above the law, and no one is undeserving of the law’s protection,” said U.S. Attorney Ronald C. Machen Jr. “In the District of Columbia, we expect corrections officers to perform their duties as professionals, which the vast majority do under challenging circumstances every day.  This prosecution illustrates the strength of our commitment to vindicating the civil rights of all people.”

 

“Today, Victor Bell admitted to abusing the power afforded to him as a corrections officer,” said FBI Assistant Director in Charge James W. McJunkin. “This investigation and guilty plea demonstrate that the FBI and our law enforcement partners will pursue justice against anyone who deprives another individual of their civil rights.”

Bell faces a maximum sentence of one year in prison and a $100,000 fine. Sentencing has been set for July 11, 2012.

 

As part of the plea agreement, Bell agreed to resign from the Department of Corrections and to never again seek employment as a law enforcement officer, in any capacity and in any jurisdiction. In addition, he has agreed to perform 150 hours of community service.

 

This case was investigated by the FBI and the Office of Internal Affairs of the District of Columbia Department of Corrections and was prosecuted by Assistant U.S. Attorney Jean Sexton of the U.S. Attorney’s Office for District of Columbia and Trial Attorney William Nolan of the Civil Rights Division.

WASHINGTON – Seizure orders have been executed against 36 domain names of websites engaged in the illegal sale and distribution of stolen credit card numbers, Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney Neil H. MacBride of the Eastern District of Virginia and Acting Executive Assistant Director Kevin Perkins of the FBI’s Criminal, Cyber, Response and Services Branch, announced today. 

The seizures are the result of Operation Wreaking hAVoC, an FBI and Justice Department operation targeting the sale of stolen credit card numbers via the Internet.  The operation was coordinated with international law enforcement, including the United Kingdom’s Serious Organised Crime Agency (SOCA). 

The 36 seized domains are in the custody of the federal government.  Visitors to the sites will now find a seizure banner that notifies them that the domain name has been seized by federal authorities. 

“The websites we are targeting today were commercial outlets for stolen credit card information,” said Assistant Attorney General Breuer.  “By making this information available on the Internet, these websites facilitated fraud on credit card holders around the world.  The actions announced today are the result of extraordinary coordination with our international law enforcement partners, and reflect our commitment to use every tool at our disposal to shut down fraudulent, criminal enterprises.”

“Countless lives are thrown into financial turmoil because of these websites,” said U.S. Attorney MacBride.  “With a few simple clicks, thousands of stolen credit card numbers can be bought or sold to fraudsters anywhere in the world.  Today’s seizures are part of an ongoing campaign to disrupt this online market regardless of where it operates.”

“By seizing the websites the criminal underground uses to blatantly sell stolen personal information, Operation Wreaking hAVoC shows that we are committed to protecting individuals online and preventing criminals from using the Internet to line their pockets,” said FBI Acting Executive Assistant Director Perkins.  “The FBI and our partners around the world are committed to disabling these criminal networks.  No single law enforcement agency can fight cyber crime on its own, and the FBI is proud to be a part of such an outstanding effort by all of the participating agencies.”

The websites of the seized domain names are commonly referred to as Automated Vending Carts (AVCs).  An AVC is a website that functions as an open-ended invitation to any visitor to purchase stolen credit card numbers.  AVCs allow a user to buy stolen credit card data over the Web, even using an online “shopping cart,” just like a traditional online retailer.  Some AVC sites allow a buyer to select which type of credit card number to purchase, the account’s country of origin, and, in some cases, the state in which the account holder lives.  AVCs allow sellers to traffic stolen credit card data without communicating directly with buyers.

During this operation, law enforcement officials made undercover purchases of credit card numbers, including credit card numbers issued by Bank of America, Sun Trust and Capital One.  The banks confirmed that the sites were not authorized to sell the credit card numbers.  Seizure orders were obtained from a federal magistrate judge in the Eastern District of Virginia. 

This U.S. operation was led by FBI’s Washington Field Office, the Computer Crime and Intellectual Property and Asset Forfeiture and Money Laundering Sections of the Justice Department’s Criminal Division and the U.S. Attorney’s Office for the Eastern District of Virginia.  The FBI’s Pittsburgh Field Office and the U.S. Attorney’s Office for the Western District of Pennsylvania also assisted in the investigation. 

The international operation was led by the United Kingdom’s SOCA.  The Australian Federal Police (AFP); German Bundeskriminalamt (BKA); United Kingdom’s Dedicated Cheque and Plastic Crime Unit (DCPCU); Macedonian Ministry of Interior Cyber Crime Unit (MOI); Ukraine Ministry of Internal Affairs; Romanian Ministry of Interior; and the Dutch High-Tech Crimes Unit (KLPD) provided assistance.  Activities conducted by these international law enforcement agencies included arrests of AVC operators and purchasers, additional domain seizures and data seizures.

Following a comprehensive investigation, the Justice Department today announced its findings regarding the Juvenile Court of Memphis and Shelby County (JCMSC), and the Shelby County Juvenile Detention Center in Tennessee.   The Justice Department found that the juvenile court fails to provide constitutionally required due process to all children appearing for delinquency proceedings, that the court’s administration of juvenile justice discriminates against African-American children, and that its detention center violates the substantive due process rights of detained youth by not providing them with reasonably safe conditions of confinement.   The investigation, opened in August 2009, was conducted under provision of the Violent Crime Control and Law Enforcement Act of 1994 and Title VI of the Civil Rights Act of 1964.   

“This report is a step toward our goal of improving the juvenile court, increasing the public’s confidence in the juvenile justice system, and maintaining public safety,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division.   “Upholding the constitutional rights of children appearing before the court is necessary to achieve these ends. The department will work with Memphis leadership to create a comprehensive blueprint that will create sustainable reforms in the juvenile justice system.”

“While the Civil Rights Division findings are serious and compelling, I am encouraged that the leadership and staff of the Juvenile Court of Memphis, Shelby County and the Shelby Juvenile Detention Center have demonstrated that they intend to take immediate action to remedy the various constitutional deficiencies identified,” said Edward L. Stanton III, U.S. Attorney for the Western District of Tennessee.  “Our central objective is to ensure that our juvenile justice system works and adequately protects the rights of all youths who come before juvenile court. We look forward to working together to reach this goal, and ultimately establishing a model juvenile court.”

In January 2010 and 2011, with the full cooperation of JCSMC Judge Curtis S. Person, Justice Department attorneys visited the court and detention center with consultants in the fields of juvenile representation, statistical analysis and juvenile protection from harm.   The Justice Department and consultants interviewed magistrates, probation counselors, attorneys, administrators and children appearing before the court on delinquency matters.   As part of the investigation, the department’s attorneys and consultants conducted an in-depth analysis of over 60,000 youth files and reviewed policies and procedures, recordings of hearings, court documents, case files, detention material and statistical data.    

The Justice Department found a pattern or practice of unconstitutional conduct in several areas, including:

• Failure to provide timely and adequate notice of charges to children appearing on delinquency proceedings;
• Failure to protect youth from self-incrimination during probation conferences;
• Failure to hold timely probable cause hearings for youth arrested without a warrant;
• Failure to provide adequate due process protections for children before transferring them to the adult criminal court;
• The disparate treatment of African-American children; and
• Failure to adequately protect detained youth from self-harm and unnecessary and excessive restraints.

The Justice Department has received extensive cooperation from Judge Person who encouraged court personnel to provide full access to the information necessary for our review.   Judge Person and his staff have made improvements since the department began its investigation and demonstrated a desire to continue in a collaborative manner to remedy the deficiencies within the juvenile court and its detention center.   The department welcomes this opportunity to continue working with Judge Person and the other stakeholders to improve the court’s services to those children appearing before it and housed in the detention center.

This investigation was conducted by the Special Litigation Section of the Civil Rights Division.

The full report can be found here. For more information on the Justice Department’s Civil Rights Division, please visit www.justice.gov/crt.

WASHINGTON – An executive of Japanese-based DENSO Corporation has agreed to plead guilty and to serve 14 months in a U.S. prison for his role in a conspiracy to fix prices and rig bids for heater control panels (HCPs) installed in U.S. cars, the Department of Justice announced today.

 

According to the one-count felony charge filed today in the U.S. District Court for the Eastern District of Michigan in Detroit, Makoto Hattori, along with co-conspirators, engaged in a conspiracy to rig bids for and to fix, stabilize and maintain the prices of HCPs sold to a customer in the United States and elsewhere. HCPs are located in the center console of an automobile and control the temperature of the interior environment of a vehicle.

 

According to the charge, Hattori participated in the conspiracy from at least as early as July 2005, until at least July 2008. During the conspiracy, Hattori was an assistant manager in the Toyota Sales Division at DENSO from July 2005 until December 2006, and a manager in the Toyota Sales Division from December 2006 until at least July 2008.  According to the plea agreement, which is subject to court approval, Hattori has agreed to serve 14 months in a U.S. prison, to pay a $20,000 criminal fine and to cooperate with the department’s ongoing investigation.

“The Antitrust Division remains committed to holding executives accountable for engaging in illegal conduct that directly impacts the pocketbooks of American consumers and businesses,” said Acting Assistant Attorney General Sharis A. Pozen in charge of the Department of Justice’s Antitrust Division. “Criminal antitrust enforcement remains a top priority and the division will continue to work with the FBI and our law enforcement counterparts to root out this kind of cartel conduct that results in higher, non-competitive prices.”

According to court documents, Hattori and co-conspirators carried out the conspiracy by agreeing, during meetings and conversations, to allocate the supply of HCPs on a model-by-model basis and to coordinate price adjustments requested by an automobile manufacturer in the United States and elsewhere. The department said that Hattori and the co-conspirators sold HCPs at non-competitive prices and engaged in meetings and conversations for the purpose of monitoring and enforcing adherence to the agreed-upon bid-rigging and price-fixing scheme.

Including Hattori, nine individuals and five companies have been charged in the department’s ongoing investigation into price fixing and bid rigging in the auto parts industry.  Furukawa Electric Co. Ltd, DENSO Corporation and Yazaki Corporation have pleaded guilty and been sentenced to pay a total of more than $748 million in criminal fines.  G.S. Electech Inc. and Fujikura Ltd have agreed to plead guilty and await sentencing.  Additionally, seven of the individuals - Junichi Funo, Hirotsugu Nagata, Tetsuya Ukai, Tsuneaki Hanamura, Ryoji Kawai, Shigeru Ogawa and Hisamitsu Takada – have been sentenced to pay criminal fines and to serve jail sentences ranging from a year and a day to two years each.  The remaining two individuals, Hattori and Norihiro Imai, have agreed to plead guilty and await sentencing.

 

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

           

Today’s charge arose from an ongoing federal antitrust investigation into bid rigging, price fixing and other anticompetitive conduct in the automotive parts industry, which is being conducted by the Antitrust Division’s National Criminal Enforcement Section and the FBI’s Detroit Field Office with the assistance of the FBI headquarters’ International Corruption Unit. Anyone with information concerning the focus of this investigation is urged to call the Antitrust Division’s National Criminal Enforcement Section at 202-307-6694 visit www.justice.gov/atr/contact/newcase.htm, or the FBI’s Detroit Field Office at 313-965-2323.

WASHINGTON – Three operators of a Miami health care agency were sentenced today to 120, 87 and 87 months in prison, respectively, for their participation in a $60 million home health Medicare fraud scheme, announced the Department of Justice, the FBI and the Department of Health and Human Services (HHS).
  
U.S. District Judge Ursula Ungaro in Miami sentenced Roberto Gonzalez to 120 months in prison, Olga Gonzalez to 87 months in prison and Fabian Gonzalez to 87 months in prison.  Each defendant was also sentenced to three years of supervised release and was ordered to pay $40 million in restitution, jointly and severally with co-defendants. 
 
Roberto, Olga and Fabian Gonzalez each pleaded guilty last year to one count of conspiracy to commit health care fraud. 

According to the court documents, Roberto Gonzalez, 61, was the president and Olga Gonzalez, 57, was the vice president of Nany Home Health Inc., a Florida home health agency that purported to provide home health care and physical therapy services to eligible Medicare beneficiaries.  Fabian Gonzalez, 39, was head of the Quality and Assurance Department for Nany.  

According to plea documents, the defendants conspired with patient recruiters, including Miami-area staffing agencies, for the purpose of billing the Medicare program for unnecessary home health care and therapy services.  The staffing agencies functioned as patient recruiters and provided patients to Nany.  The Gonzalezes and their co-conspirators paid kickbacks and bribes to patient recruiters and the staffing agencies in return for providing patients to Nany, as well as prescriptions, plans of care (POCs) and certifications for medically unnecessary therapy and home health services for Medicare beneficiaries. 

The Gonzalezes used the prescriptions, POCs and medical certifications to fraudulently bill Medicare for home health care services, which the Gonzalezes knew was in violation of federal criminal laws.

According to court documents, Nany nurses and office staff falsified patient files for Medicare beneficiaries to make it appear that the beneficiaries qualified for home health care and therapy services from Nany when, in fact, the Gonzalezes knew that the beneficiaries did not qualify for and did not receive such services.  The nurses and office staff at Nany described in the nursing notes and patient files symptoms that were non-existent.  The Gonzalezes knew that these files were falsified so that Medicare could be billed for medically unnecessary services.

From approximately January 2006 through November 2009, Roberto, Olga and Fabian Gonzalez, and their co-conspirators submitted approximately $60 million in false and fraudulent claims to Medicare, and Medicare paid approximately $40 million on those claims.

The pleas were announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida; John V. Gillies, Special Agent-in-Charge of the FBI’s Miami Field Office; and Special Agent-in-Charge Christopher Dennis of the HHS Office of Inspector General (HHS-OIG), Office of Investigations Miami Office.

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

Since their inception in March 2007, Medicare Fraud Strike Force operations in nine locations have charged more than 1,190 defendants who collectively have falsely billed the Medicare program for more than $3.6 billion.  In addition, the HHS Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

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

WASHINGTON – Hess Corporation has agreed to pay an $850,000 civil penalty and spend more than $45 million in new pollution controls to resolve Clean Air Act violations at its Port Reading, N.J., refinery, the Department of Justice and the U.S. Environmental Protection Agency (EPA) announced today.  Once fully implemented, the controls required by the settlement are estimated to reduce emissions of nitrogen oxide (NOx) by 181 tons per year and result in additional reductions of volatile organic compounds (VOCs).  High concentrations of NOx and VOCs, key pollutants emitted from refineries, can have adverse impacts on human health, including contributing to childhood asthma, and are significant contributors to smog.

“This settlement is the 31st such agreement with petroleum refineries across the nation. Hess joins a growing list of corporations who have entered into comprehensive and innovative agreements with the United States that will result in cleaner, healthier air for communities across the nation,” said Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division of the Department of Justice.  “For example, this agreement will improve air quality for New Jersey residents by requiring Hess to install advanced pollution control and monitoring technology and adopt more stringent emissions limits.”  

“EPA is committed to protecting communities by reducing air pollution from the largest sources,” said Cynthia Giles, Assistant Administrator for EPA’s Office of Enforcement and Compliance Assurance.  “This settlement will reduce harmful emissions that impact air quality, protecting the residents of Port Reading and New Jersey.”

The settlement requires new and upgraded pollution controls, more stringent emission limits, and aggressive monitoring, leak-detection and repair practices to reduce emissions from refinery equipment and processing units.

The government’s complaint, filed on April 19, 2012, alleged that the company made modifications to its refinery that increased emissions without first obtaining pre-construction permits and installing required pollution control equipment.  The Clean Air Act requires major sources of air pollution to obtain such permits before making changes that would result in a significant emissions increase of any pollutant.

The state of New Jersey actively participated in the settlement with Hess and will receive half of the civil penalty.

The settlement with Hess is the 31st under an EPA initiative to improve compliance among petroleum refiners and to reduce significant amounts of air pollution from refineries nationwide through comprehensive, company-wide enforcement settlements.  The first of these settlements was reached in 2000.  With today’s settlement, 108 refineries operating in 32 states and territories – more than 90 percent of the total refining capacity in the United States – are under judicially enforceable agreements to significantly reduce emissions of pollutants.  As a result of the settlement agreements, refiners have agreed to invest more than $6 billion in new pollution controls designed to reduce emissions of sulfur dioxide, nitrogen dioxide and other pollutants by over 360,000 tons per year.

The consent decree, lodged in the District of New Jersey, is subject to a 30-day public comment period and court approval.  A copy of the consent decree is available at www.justice.gov/enrd/Consent_Decrees.html.

More information on the Hess settlement is available at www.epa.gov/compliance/resources/cases/civil/caa/hesscorp.html.

For more information on EPA’s Petroleum Refinery Initiative, visit: www.epa.gov/compliance/resources/cases/civil/caa/oil/index.html.

WASHINGTON – A former managing director for Morgan Stanley’s real estate business in China pleaded guilty today for his role in a conspiracy to evade the company’s internal accounting controls, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney Loretta E. Lynch for the Eastern District of New York; and Janice Fedarcyk, Assistant Director in Charge of the FBI’s New York Field Office.

Garth Peterson, 42, an American citizen living in Singapore, pleaded guilty to one-count criminal information charging him with conspiring to evade internal accounting controls that Morgan Stanley was required to maintain under the Foreign Corrupt Practices Act (FCPA).  Peterson pleaded guilty in Brooklyn, N.Y., before Senior U.S. District Judge Jack B. Weinstein. 

“Mr. Peterson admitted today that he actively sought to evade Morgan Stanley’s internal controls in an effort to enrich himself and a Chinese government official,” said Assistant Attorney General Breuer.  “As a managing director for Morgan Stanley, he had an obligation to adhere to the company’s internal controls; instead, he lied and cheated his way to personal profit.  Because of his corrupt conduct, he now faces the prospect of prison time.”

“This defendant used a web of deceit to thwart Morgan Stanley’s efforts to maintain adequate controls designed to prevent corruption.  Despite years of training, he circumvented those controls for personal enrichment. We take seriously our role in detecting and prosecuting efforts to evade those controls,” said U.S. Attorney Lynch.

“The defendant engaged in a pattern of self-dealing and deception that perpetuated his unjust enrichment,” said FBI Assistant Director Fedarcyk.  “He not only circumvented his employer’s internal controls; he violated the law.”

According to court documents, Morgan Stanley maintained a system of internal controls meant to ensure accountability for its assets and to prevent employees from offering, promising or paying anything of value to foreign government officials.  Morgan Stanley’s internal policies, which were updated regularly to reflect regulatory developments and specific risks, prohibited bribery and addressed corruption risks associated with the giving of gifts, business entertainment, travel, lodging, meals, charitable contributions and employment.  Morgan Stanley frequently trained its employees on its internal policies, the FCPA and other anti-corruption laws.  Between 2002 and 2008, Morgan Stanley trained various groups of Asia-based personnel on anti-corruption policies 54 times.  During the same period, Morgan Stanley trained Peterson on the FCPA seven times and reminded him to comply with the FCPA at least 35 times.  Morgan Stanley’s compliance personnel regularly monitored transactions, randomly audited particular employees, transactions and business units, and tested to identify illicit payments.  Moreover, Morgan Stanley conducted extensive due diligence on all new business partners and imposed stringent controls on payments made to business partners.

According to court documents, Peterson conspired with others to circumvent Morgan Stanley’s internal controls in order to transfer a multi-million dollar ownership interest in a Shanghai building to himself and a Chinese public official with whom he had a personal friendship.  The corruption scheme began when Peterson encouraged Morgan Stanley to sell an interest in a Shanghai real-estate deal to Shanghai Yongye Enterprise (Group) Co. Ltd., a state-owned and state-controlled entity through which Shanghai’s Luwan District managed its own property and facilitated outside investment in the district.  Peterson falsely represented to others within Morgan Stanley that Yongye was purchasing the real-estate interest, when in fact Peterson knew the interest would be conveyed to a shell company controlled by him, a Chinese public official associated with Yongye and a Canadian attorney.  After Peterson and his co-conspirators falsely represented to Morgan Stanley that Yongye owned the shell company, Morgan Stanley sold the real-estate interest in 2006 to the shell company at a discount to the interest’s actual 2006 market value.  As a result, the conspirators realized an immediate paper profit of more than $2.5 million.  Even after the sale, Peterson and his co-conspirators continued to claim falsely that Yongye owned the shell company, which in reality they owned.  In the years since Peterson and his co-conspirators gained control of the real-estate interest, they have periodically accepted equity distributions and the real-estate interest has appreciated in value.
 
At sentencing, scheduled for July 17, 2012, Peterson faces a maximum penalty of five years in prison and a maximum fine of $250,000 or twice his gross gain from the offense.  After considering all the available facts and circumstances, including that Morgan Stanley constructed and maintained a system of internal controls, which provided reasonable assurances that its employees were not bribing government officials, the Department of Justice declined to bring any enforcement action against Morgan Stanley related to Peterson’s conduct.  The company voluntarily disclosed this matter and has cooperated throughout the department’s investigation.

The Securities and Exchange Commission today announced civil charges and a settlement with Peterson. 

The criminal case is being prosecuted by Trial Attorney Stephen J. Spiegelhalter of the Criminal Division’s Fraud Section and Assistant U.S. Attorney John Nowak of the Eastern District of New York.  The Criminal Division’s Office of International Affairs also provided assistance in this matter.  The case was investigated by the FBI’s New York Field Office.

A federal court in New Orleans has permanently barred Cathy and Lashanda Vinnett from preparing federal tax returns for others, the Justice Department announced today. The civil injunction order, to which the Vinnetts agreed without admitting the government’s allegations, was signed by Judge Helen G. Berrigan of the U.S. District Court for the Eastern District of Louisiana.

The government’s complaint alleged that Cathy Vinnett and her daughter Lashanda, both from Destrehan, La., and their companies – M&C Tax Service, D&C Tax Service, River Parish Tax Professionals and Remarkable Tax Services – prepared federal tax returns for customers claiming fraudulent tax refunds based on fabricated telephone excise tax refund claims, earned-income tax credits and first-time homebuyer tax credits. After claiming these improper refunds, the lawsuit alleged, the Vinnetts kept most of the resulting money for themselves, without telling their customers. The lawsuit alleges that the defendants’ misconduct caused as much as $2.2 million in harm to the government.

The court order also requires the Vinnetts to inform their customers of the order and to provide the government with a list of their customers since Jan. 1, 2007.

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

Related Documents: United States v. Cathy R. Vinnett, et al

Order for Permanent Injunction by Consent

Anthony L. Dinunzio, 53, of East Boston, Mass., the alleged leader of the New England organized crime family of La Cosa Nostra (NELCN), was arrested today on racketeering and extortion charges.

 

The arrest and charges were 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’DonnellSuperintendent of the Rhode Island State Police; and Providence Public Safety Commissioner Steven M. Pare.

 

Dinunzio was ordered detained following an initial appearance in U.S. District Court in Providence, R.I. A third superseding indictment returned on April 24, 2012, and unsealed today in the District of Rhode Island, alleges, among other things, that Dinunzio and other leaders, members and associates of the NELCN extorted protection payments from adult entertainment businesses in Rhode Island.

 

“According to the indictment unsealed today, as the leader of the New England LCN for more than two years, Mr. Dinunzio used fear and intimidation to control the corrupt activities of his criminal enterprise,” said Assistant Attorney General Breuer. “Among other charged criminal conduct, he allegedly asked an LCN member to extort a businessman in the adult entertainment industry and told others he would use violence against insubordinates. These charges are another step in our unrelenting efforts to stamp out the mafia.”

 

“This superseding indictment is the latest in a step by step, block by block, effort by this office, our partners in the Department of Justice’s Criminal Division, the FBI, the Rhode Island State Police and the Providence Police Department to charge, prosecute and send to federal prison long-time members of, and in particular, the leadership of, organized crime,” said U.S. Attorney Neronha.

 

“The FBI and its law enforcement partners have shattered Omerta, the New England LCN’s code of silence.  In doing so , we have severely disrupted their criminal activity,” said FBI SAC DesLauriers.  “Our persistent, methodical, and unyielding investigation of those who are part of the LCN and other groups will not stop.  Looking forward, organized crime groups and transnational criminal enterprises are emerging from every corner of the globe.  Through our task-force and intelligence based model, our joint efforts will continue to disrupt and dismantle emerging organized crime syndicates to prevent their entrenchment in our communities.”

  

Dinunzio is charged with one count each of racketeering and extortion, and five counts of travel in aid of racketeering. Since January 2011, he is the ninth alleged leader, underboss, member or associate of the NELCN to be indicted by a federal grand jury in Providence on federal racketeering and related charges. Five of the defendants, including admitted longtime former NELCN underboss and boss Luigi Manocchio and admitted capo regime Edward Lato, have pleaded guilty and are detained while awaiting sentencing. A sixth defendant pleaded guilty and was sentenced on Dec. 12, 2011, to 30 months in prison.

 

The third superseding indictment alleges that Anthony Dinunzio, a member and capo of the NELCN, assumed a leadership role of the NELCN in late 2009 and early 2010, and ultimately became the acting boss. This superseding indictment alleges that Dinunzio participated with other NELCN members and associates in a racketeering conspiracy in which monthly cash payments for protection of $2,000 to $6,000 were demanded from the owners and operators of several adult entertainment businesses in Rhode Island. Several of those NELCN members and associates have previously pleaded guilty to racketeering charges. This superseding indictment also alleges that on several occasions, at Dinunzio’s direction, crime family members from New England, New York and New Jersey were consulted with and/or traveled to Massachusetts to discuss various criminal activities and crime family matters. Dinunzio also allegedly directed NELCN members to travel to various locations, including New York, for meetings to discuss various criminal activities and crime family matters.

According to this indictment, it is alleged that one such meeting occurred on Nov. 3, 2009, in Boston, at a wake of an NELCN member’s mother, and later that same evening at a local restaurant. During these meetings, Dinunzio and another NELCN member allegedly discussed, among other things, the distribution of proceeds from the extortion of the Rhode Island adult entertainment businesses. Dinunzio allegedly indicated that a portion of those extorted monies would now be coming to him and to the NELCN leadership in Boston. Previously, as alleged, the money had been going to former Rhode Island NELCN boss Luigi Manocchio who had stepped down as boss in 2009.

 

In addition, this indictment alleges that in late 2009 or early 2010, Dinunzio asked another NELCN member to extort money from a prominent businessman in the adult entertainment industry in Rhode Island, who had paid protection money to the Gambino crime family from New York over the years. Dinunzio allegedly dispatched an NELCN member to New York to meet with Gambino crime family members on several occasions to receive Gambino family permission to extort money from the businessman for businesses he was operating in New England.

 

According to this indictment, it is alleged that on June 22, 2011, Dinunzio met with a senior made member of the Gambino crime family at a restaurant in Malden, Mass. Dinunzio allegedly discussed the extortion of the Rhode Island strip clubs, indicating that “it is still going.” Dinunzio also discussed a May 5, 2011, FBI search of his person and the seizure of $5,000 cash in alleged protection money paid by Rhode Island businesses and brought to him by a NELCN leader from Rhode Island.

 

In this June 22, 2011, meeting with a senior Gambino crime family member, Dinunzio allegedly discussed the rules for joining the NELCN. In discussing a fellow LCN member, Dinunzio allegedly stated, “You know what I can’t understand? How the hell did he get made, because he’s half Irish…I don’t understand that...that’s not the rules…you gotta do one hundred percent (Italian).” Referring to a person sponsored for membership, Dinunzio allegedly stated, ‘I said he’s good.’ For ten years he waited. Then he come and see me and said ‘Thank you Anthony. You know I’m with you all the way.’ He deserved it though.”

According to this indictment, at the same June 22, 2010, meeting with a senior Gambino crime family member, Dinunzio allegedly discussed his NELCN leadership style stating, “As soon as I took over I changed everything. One guy… ‘What if nobody wants to listen to you?’ ‘I said you’re shelved.’ He said ‘What if they don’t wanna get shelved?’ ‘Well then you and I get to watch you die in the ground….I’ll bury you right in the [expletive] ground puts all the dirt. You’re alive. They stay there. I’ll stay there [expletive] 10 hours until you’re dead. And I’ll dig you back up and make sure you’re dead.’”

 

The indictment alleges that Dinunzio continued to be concerned about the investigation, arrests of other members and possible government cooperators in the case. The third superseding indictment alleges that despite these concerns, he continued to try to get other members to assist in running the Rhode Island part of the criminal enterprise. At one point, during a Dec. 7, 2011, meeting with a senior Gambino made member, Dinunzio allegedly commented, “If I go to the can. I’m still the boss…no matter what.”

 

An indictmentis merely an allegation and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.

 

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

 

The United States has intervened in a lawsuit against Japanese company, Toyo Ink Manufacturing Co. Ltd. and its U.S. subsidiaries: Toyo Ink International Corp., located in New York; Toyo Ink America LLC, located in Illinois; and Toyo Ink Manufacturing America LLC, located in New Jersey, the Justice Department announced today. Toyo Ink, which has operations worldwide, is a leading provider of printing inks.

 

The suit alleges that the Toyo Ink companies knowingly misrepresented the country of origin on documents presented to U.S. Customs and Border Protection to avoid paying antidumping and countervailing duties on imports of the colorant carbazole violet pigment number 23 (CVP-23). The Department of Commerce assesses antidumping and countervailing duties, which are collected by U.S. Customs, to protect U.S. businesses by offsetting unfair foreign pricing and government subsidies. Imports of CVP-23 from China and India have been subject to these duties since 2004.

 

The suit alleges that Toyo misrepresented Japan and Mexico as the countries of origin for its CVP-23 imports to avoid these duties. Although Toyo’s CVP-23 imports from China and India underwent a finishing process in Japan and Mexico, the complaint alleges that this process was insufficient to change the country of origin.

“Companies taking advantage of United States markets must comply with the law, including the payment of import duties levied to protect domestic manufacturers and producers from unfair competition abroad,” said Stuart F. Delery, Acting Assistant Attorney General for the Civil Division of the Department of Justice. “As we have done today, the Department of Justice will take action against those we believe have inappropriately avoided paying money owed to the United States.”

 

The lawsuit was filed in the U.S. District Court for the Western District of North Carolina by whistle blower John Dickson under the qui tam, or whistleblower, provisions of the False Claims Act. The act permits private parties to sue companies and individuals on behalf of the United States that they believe have falsely claimed federal funds or, as in this case, made misrepresentations to avoid paying funds owed to the government. The government may intervene and take over the action, as it has done here. The act allows the government to recover three times its damages plus civil penalties to ensure that the public treasury is made whole for the loss and for the costs of investigating and prosecuting false claims. The whistle blower is entitled to a share of any funds recovered through the lawsuit.

 

The claims asserted in the complaint against Toyo are allegations only, and there has been no determination of liability.

Kevin P. Mahoney of Attleboro, Mass., was sentenced today to 60 months in prison, following trial convictions on corruptly endeavoring to obstruct the administration of the Internal Revenue laws, filing false tax returns with the Internal Revenue Service (IRS) and criminal contempt of court, the Justice Department and the IRS announced. U.S. District Judge Joseph L. Tauro presided over the trial and imposed the sentence. A Boston jury convicted licensed stockbroker, insurance agent and financial advisor Mahoney on Jan. 25, 2012. Mahoney was charged with one count of corruptly endeavoring to obstruct the administration of the Internal Revenue laws, eight counts of contempt of court and eight counts of filing false tax returns. He was convicted on all counts. Judge Tauro also ordered Mahoney to pay $367,000 in restitution to the IRS. Mahoney was remanded to prison immediately following the sentencing hearing.

 

The evidence at trial showed that Mahoney had failed to pay all of his taxes for the years 1996 through 2001 but had attempted to pay tax-related debts by submitting to the IRS more than $2.2 million in fictitious financial instruments, called Bills of Exchange, and checks drawn on a closed bank account. The evidence further showed that Mahoney obtained fake Bills of Exchange from American Rights Litigators (ARL), a now-defunct Florida-based organization that was permanently enjoined from promoting and selling certain fraudulent tax schemes based on its prior promotion and sale of the same. ARL was also used by imprisoned actor Wesley Snipes . After filing for bankruptcy, Mahoney caused a worthless promissory note made by now-deceased “sovereign citizen” Jerry Ralph Kane to be submitted to the IRS as purported payment for approximately $805,000 in taxes that Mahoney owed at that time.

 

The evidence also showed that Mahoney submitted to the IRS false individual income tax returns for the years 2000 through 2006 that he knew failed to report more than $1.3 million in taxable income received from various financial institutions. Along with his tax returns, Mahoney had submitted altered IRS Forms 1099-MISC on which he changed to zero the amount of non-employee compensation that the financial institutions had reported paying him. For instance, Mahoney attached to his 2006 tax return an altered Form 1099-MISC in which he claimed that a life insurance company paid him non-employee compensation of zero when it had actually paid him approximately $73,000. Mahoney also filed a false 2007 Nonresident Alien Tax Return in which he falsely claimed a refund of almost $389,000.

 

According to evidence at trial, the U.S. District Court for the District of Massachusetts had permanently enjoined Mahoney in July 2002 from, among other things, engaging in conduct that interfered with the administration of the Internal Revenue laws. The injunction proceedings were brought against Mahoney in accordance with a lawsuit filed by the Justice Department’s Tax Division. Mahoney committed criminal contempt by violating the permanent injunction in that he assisted in the preparation and submission to the IRS of income tax returns for other people that falsely claimed more than $50 million dollars in refunds based on false IRS Forms 1099-OID and an IRS Form 1099-C falsely reporting $300 million in debt purportedly owed to a third party by an IRS employee.

 

The case was investigated by Special Agents from IRS - Criminal Investigation and was prosecuted by Trial Attorneys Jeffrey McLellan and Kenneth Vert of the Justice Department’s Tax Division. Assistant Attorney General Kathryn Keneally of the Tax Division commended the special agents and thanked U.S. Attorney Carmen M. Ortiz and her entire office for their assistance.

 

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

WASHINGTON – Mevlid Jasarevic, 23, a citizen of Serbia, was indicted today by a federal grand jury in the District of Columbia on charges of attempted murder and other violations in connection with his alleged machine gun attack on the U.S. Embassy in Sarajevo, Bosnia-Herzegovina, on Oct. 28, 2011.

The indictment was announced by Lisa Monaco, Assistant Attorney General for National Security; Ronald C. Machen Jr., U.S. Attorney for the District of Columbia; and James W. McJunkin, Assistant Director in Charge of the FBI’s Washington Field Division.

The 10-count indictment charges Jasarevic with one count of attempt to murder U.S. officers or employees; one count of attempt to murder U.S. nationals within the special maritime and territorial jurisdiction of the United States (the U.S. Embassy); one count of assault with a dangerous weapon with intent to do bodily harm within the special maritime and territorial jurisdiction of the United States; one count of assaulting U.S. officers or employees with a deadly weapon; one count of destruction of property within the special maritime and territorial jurisdiction of the United States; and five counts of use of a firearm during a crime of violence. 

Yesterday, authorities in Bosnia-Herzegovina brought charges against Jasaveric and two others in connection with the alleged attack on the U.S. Embassy.  Jasaveric is in the custody of Bosnia-Herzegovina authorities.  The United States has closely cooperated with Bosnia-Herzegovina authorities in their investigation of the U.S. Embassy attack and strongly supports their decision to charge and prosecute those allegedly involved.  The United States will continue to cooperate fully with authorities in Bosnia-Herzegovina to bring to justice those involved.

The case is being investigated by the FBI Washington Field Office.  The case is being prosecuted by Assistant U.S. Attorney Robert Bowman of the U.S. Attorney’s Office for the District of Columbia and Trial Attorney Joshua Larocca of the Counterterrorism Section of the Justice Department’s National Security Division.  The Office of International Affairs in the Justice Department’s Criminal Division also provided assistance.

The attempted murder charges against Jasarevic, as well as the charges of assaulting U.S. officers and employees with a deadly weapon, and destruction of property each carry a maximum sentence of 20 years.  Each charge of using a firearm during a crime of violence carries a mandatory minimum sentence of 30 years for use of a machinegun.  The charge of assault with a dangerous weapon with intent to do bodily harm within the special maritime and territorial jurisdiction of the United States carries a maximum sentence of 10 years.

The public is reminded that an indictment contains mere allegations.  Defendants are presumed innocent unless and until proven guilty in a court of law.

Related Materials:

Jasarevic Indictment (PDF)

WASHINGTON – The Department of Justice and the Department of the Interior announced today that Freeport-McMoRan Corporation and Freeport-McMoRan Morenci Inc. (Freeport-McMoRan) have agreed to pay $6.8 million to settle federal and state natural resource damages claims related to the Morenci copper mine in southeastern Arizona.

The complaint, which was filed jointly by the United States and the state of Arizona on April 24, 2012, in the U.S. District Court for the District of Arizona, alleges that Freeport-McMoRan is civilly liable for injuries to natural resources that resulted from hazardous substance releases at and from Freeport-McMoRan’s Morenci Mine site.  The complaint further alleges that surface waters, terrestrial habitat and wildlife, and migratory birds have been injured, destroyed or lost as a result of releases of hazardous substances at and from the mine site.  The hazardous substances that have been released include sulfuric acid and metals.  The cause of action for natural resource damages is based on Section 107(a) of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended (CERCLA).  Historically, the Morenci Mine was owned and operated by Phelps Dodge Corporation until that company was acquired by Freeport-McMoRan entities in 2007.

Under the consent decree lodged today in federal court, Freeport-McMoRan will pay $6.8 million to the U.S. Department of the Interior’s Natural Resource Damage Assessment and Restoration Fund.  This money will be used by the federal and state natural resources trustees to plan and implement projects designed to restore, replace or acquire the equivalent of wildlife and wildlife habitat in the vicinity of the impacted area.  Of this amount, $98,000 is designated for payment to the Department of the Interior for its remaining unpaid past damage assessment costs.  Freeport-McMoran has already repaid over $842,000 in injury assessment costs.

“Today’s settlement will help compensate the people of Arizona for the loss of habitat and wildlife, and the injuries to the overall quality of the local environment caused by open-pit mining at the Morenci Mine,” said Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division.  “This agreement also fosters federal and state efforts to restore and protect important wildlife habitat in injured areas.”

“Mining has long been, and continues to be, an important part of Arizona’s history and economy,” said Ann Birmingham Scheel, Acting U.S. Attorney for the District of Arizona.  “Likewise, protecting Arizona’s environment has long been, and continues to be, a priority for the U.S. Attorney’s Office and the Department of Justice. This settlement strikes a balance between mining and protecting the environment and will allow the natural resources trustees to focus on restoration efforts rather than on litigation.”
 
The designated natural resources trustees for the Morenci Mine area include the Department of the Interior’s Fish and Wildlife Service and the Trustee for Natural Resources for the State of Arizona. 

This is the second settlement with Freeport-McMoRan Corporation and its mining subsidiaries in as many months.  On Feb. 21, 2012, the federal district court in New Mexico approved a consent decree between the United States, the state of New Mexico and Freeport-McMoRan entities that resolved natural resource damages claims at three Freeport-McMoRan mining sites in southwestern New Mexico.

The proposed consent decree, lodged in the District of Arizona, is subject to a 30-day public comment period and court review and approval.  A copy of the consent decree is available at www.usdoj.gov/enrd/Consent_Decrees.html.

Related Materials:

Freeport-McMoRan Consent Decree (PDF)

WASHINGTON – Four individuals have been charged in the Eastern District of Virginia for their alleged roles in an Internet piracy group that distributed via the Internet copies of movies showing only in theaters, Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney for the Eastern District of Virginia Neil H. MacBride and U.S. Immigration and Customs Enforcement (ICE) Director John Morton announced today.

An indictment returned on April 18, 2012, and unsealed yesterday charges Jeramiah Perkins, 39, of Portsmouth, Va.; Gregory Cherwonik, 53, of New York; Willie Lambert, 57, of Pennsylvania; and Sean Lovelady, 27, of California; with one count of conspiracy to commit criminal copyright infringement and two counts of criminal copyright infringement.  Perkins, Cherwonik and Lambert are charged with two additional counts of criminal copyright infringement, and Perkins and Cherwonik are charged with a sixth count of criminal copyright infringement of a work being prepared for commercial distribution. 

Perkins, Cherwonik and Lambert were arrested yesterday and Lovelady reported to authorities today.  The defendants are scheduled to be arraigned on May 9, 2012. 

“These four defendants are charged with serious intellectual property crimes,” said Assistant Attorney General Breuer.  “Through IMAGiNE, they allegedly sought to become the leading source of pirated movies on the Internet.  This Justice Department, working with our partners at ICE, has made fighting intellectual property crime a top priority, and we will continue to bring cases against individuals and entities devoted to cheating consumers and undermining artistic pursuits.”  

“Piracy is outright theft, regardless of the technology or business model used,” said U.S. Attorney MacBride.  “Large-scale copyright infringement is a serious crime that hurts not only those in the entertainment industry but also those who legally pay for that entertainment.”

“The indictment in this case demonstrates ICE Homeland Security Investigations’ commitment to identifying and dismantling pirates that are weakening our economy through their illegal acts,” said ICE Director Morton.  “Criminals engaged in piracy are stealing from the 2.4 million Americans employed by the entertainment industry.  ICE, along with our partners at the Justice Department, will continue to vigorously investigate and prosecute cases involving piracy and counterfeiting.”

According to the indictment, the defendants and their co-conspirators identified themselves as the IMAGiNE Group and sought to become the premier group to first release Internet copies of new movies only showing in theaters.  From September 2009 until September 2011, they allegedly reproduced and distributed over the Internet tens of thousands of illegal copies of copyrighted works.  The indictment charges that the group regularly and illicitly obtained copies of the video and audio components of motion pictures showing in theaters and then edited and combined them into one infringing movie file, which thousands of members of the group shared with one another by use of BitTorrent file sharing technology and then released to the Internet.

The indictment alleges that the IMAGiNE Group rented computer servers to host websites that included member profiles, a server called a torrent tracker that assists in communications among members using BitTorrent file sharing technology, discussion forums, a message board and news, rules and other information about making donations to and using the website. 

The maximum prison sentence for the charge of conspiracy to commit criminal copyright infringement and for each count of criminal copyright infringement is five years in prison. 

Charges contained in an indictment are merely allegations, and the defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

The investigation of the case and the arrests were conducted by agents with ICE Homeland Security Investigations.  Assistant U.S. Attorney Robert J. Krask of the Eastern District of Virginia and Senior Counsel John H. Zacharia of the Criminal Division’s Computer Crime and Intellectual Property Section are prosecuting the case on behalf of the United States.

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.

WASHINGTON – Kurt Mix, a former engineer for BP plc, was arrested today on charges of intentionally destroying evidence requested by federal criminal authorities investigating the April 20, 2010, Deepwater Horizon disaster, announced Attorney General Eric Holder, Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney Jim Letten of the Eastern District of Louisiana and Kevin Perkins, Acting Executive Assistant Director for the FBI’s Criminal Cyber Response and Services Branch. 

Mix, 50, of Katy, Texas, was charged with two counts of obstruction of justice in a criminal complaint filed in the Eastern District of Louisiana and unsealed today.

“The department has filed initial charges in its investigation into the Deepwater Horizon disaster against an individual for allegedly deleting records relating to the amount of oil flowing from the Macondo well after the explosion that led to the devastating tragedy in the Gulf of Mexico,” said Attorney General Holder.  “The Deepwater Horizon Task Force is continuing its investigation into the explosion and will hold accountable those who violated the law in connection with the largest environmental disaster in U.S. history.”

According to the affidavit in support of a criminal complaint and arrest warrant, on April 20, 2010, the Deepwater Horizon rig experienced an uncontrolled blowout and related explosions while finishing the Macondo well.  The catastrophe killed 11 men on board and resulted in the largest environmental disaster in U.S. history. 

According to court documents, Mix was a drilling and completions project engineer for BP.  Following the blowout, Mix worked on internal BP efforts to estimate the amount of oil leaking from the well and was involved in various efforts to stop the leak.  Those efforts included, among others, Top Kill, the failed BP effort to pump heavy mud into the blown out wellhead to try to stop the oil flow.  BP sent numerous notices to Mix requiring him to retain all information concerning Macondo, including his text messages.

On or about Oct. 4, 2010, after Mix learned that his electronic files were to be collected by a vendor working for BP’s lawyers, Mix allegedly deleted on his iPhone a text string containing more than 200 text messages with a BP supervisor.  The deleted texts, some of which were recovered forensically, included sensitive internal BP information collected in real-time as the Top Kill operation was occurring, which indicated that Top Kill was failing.  Court documents allege that, among other things, Mix deleted a text he had sent on the evening of May 26, 2010, at the end of the first day of Top Kill.  In the text, Mix stated, among other things, “Too much flowrate – over 15,000.”  Before Top Kill commenced, Mix and other engineers had concluded internally that Top Kill was unlikely to succeed if the flow rate was greater than 15,000 barrels of oil per day (BOPD).  At the time, BP’s public estimate of the flow rate was 5,000 BOPD – three times lower than the minimum flow rate indicated in Mix’s text. 

In addition, on or about Aug. 19, 2011, after learning that his iPhone was about to be imaged by a vendor working for BP’s outside counsel, Mix allegedly deleted a text string containing more than 100 text messages with a BP contractor with whom Mix had worked on various issues concerning how much oil was flowing from the Macondo well after the blowout.  By the time Mix deleted those texts, he had received numerous legal hold notices requiring him to preserve such data and had been communicating with a criminal defense lawyer in connection with the pending grand jury investigation of the Deepwater Horizon disaster.

A complaint is merely a charge and a defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.

If convicted, Mix faces a maximum penalty of 20 years in prison and a fine of up to $250,000 as to each count.‪

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 the Environment and Natural Resources Division of the Department of Justice, the U.S. Attorney’s Office for the Eastern District of Louisiana and other U.S. Attorney’s Offices, and investigating agents from the FBI, Environmental Protection Agency, Department of Interior, U.S. Coast Guard, U.S. Fish and Wildlife Service and other federal law enforcement agencies. 

The task force’s investigation of this and other matters concerning the Deepwater Horizon disaster is ongoing.

The case is being prosecuted by task force Deputy Directors Derek Cohen and Avi Gesser of the Justice Department’s Criminal Division, and task force prosecutors Assistant U.S. Attorney Richard Pickens II of the Eastern District of Louisiana and Assistant U.S. Attorney Scott Cullen of the Eastern District of Pennsylvania.

Related Materials:

Mix Complaint (PDF)
Mix Affidavit (PDF)

Ernst Pierre, a Port St. Lucie, Fla., tax preparer, pleaded guilty today to wire fraud and aggravated identity theft, the Justice Department and Internal Revenue Service (IRS) announced. Pierre was charged with a scheme to file false federal income tax returns using stolen identity information.

 

According to the indictment and Pierre’s admissions in his plea, from October 2009 through May 2011, Pierre filed false tax returns for clients of Tax Max, a Port St. Lucie tax return preparation business he owned and operated. Pierre obtained the names and Social Security numbers of relatives of clients for whom he had prepared and submitted federal income tax returns and then fraudulently used those names and Social Security numbers as “dependents” on other client tax returns and on his own tax return. Inclusion of a dependent on a federal income tax return can result in a higher tax refund.

 

Sentencing has been set for July 2, 2012, before the Judge Donald L. Graham of the Southern District of Florida. Pierre faces a maximum potential sentence of 20 years in prison for the wire fraud count and a mandatory two-year sentence for the aggravated identity theft count. Pierre also faces up to $500,000 in fines and an order of mandatory restitution.

This case was investigated by IRS - Criminal Investigation special agents. Trial Attorneys Justin K. Gelfand and Thomas J. Krepp of the Justice Department’s Tax Division are prosecuting the case with the assistance of the U.S. Attorney’s Office in the Southern District of Florida.

 

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

Gary D. Osborn and his corporation, ApothéCure Inc., pleaded guilty today in the U.S. District Court for the Northern District of Texas to two misdemeanor criminal violations of the Food, Drug and Cosmetic Act (FDCA). The pleas are in connection with ApothéCure’s interstate shipment of two lots of misbranded colchicine injectable solution that led to the deaths of three people in the Pacific Northwest.

 

ApothéCure, which is located in Dallas, is a compounding pharmacy. Compounding Pharmacies create particular pharmaceutical products to fit the unique needs of patients by combining appropriate ingredients.

 

Colchicine is used to prevent gout attacks (sudden, severe pain in one or more joints caused by abnormally high levels of a substance called uric acid in the blood) in adults, and to relieve the pain of gout attacks when they occur.

 

The government’s charges were based on ApothéCure’s February 2007 shipment of 72 vials of compounded colchicine to a now-defunct medical center in Portland, Ore. On March 19, 2007, a patient in Yakima, Wash., who received colchicine from this shipment, died after receiving the infusion. The medical examiner determined that the cause of death was multiple organ failure and acute colchicine toxicity.

 

On March 30, 2007, colchicine from ApothéCure was administered to two other patients who were suffering from back pain. Within hours of receiving the colchicine injections, both patients became seriously ill, were taken to local hospitals, and died shortly thereafter. The medical examiner in Oregon determined colchicine toxicity to be the cause of death for both patients.

 

FDA testing of vials selected from the lethal shipment revealed that some of the vials were super-potent, containing 640 percent of the level of colchicine declared on the label. Other vials were determined to be sub-potent, and contained less than 62 percent of the declared levels on the labels.

 

“This plea shows that the Department of Justice will enforce the Food, Drug and Cosmetic Act against responsible corporate officers of companies that fail to control the quality of their products,” said Stuart F. Delery, Acting Assistant Attorney General of the Civil Division of the Department of Justice. “The drugs mixed by Mr. Osborn’s company  were not merely misbranded, but lethal. Drug makers of all sizes, from large corporations to small compounding pharmacies, have a duty to ensure their products are safe.”

 

Sentencing is scheduled for July 27, 2012.

 

This case was investigated by Food and Drug Administration’s Office of Criminal Investigations, which referred this matter to the Justice Department. The case is being prosecuted by Trial Attorneys John Claud and Patrick Runkle of the Civil Division’s Consumer Protection Branch.

 

At the final hearing of Attorney General Eric Holder’s National Task Force on Children Exposed to Violence in Detroit, officials from the Justice Department and the city of Detroit underscored efforts to keep kids safe and prevent youth violence. The task force is a key part of Attorney General Holder’s Defending Childhood Initiative to prevent and reduce children’s exposure to violence.

 

At the hearing, Acting Associate Attorney General Tony West announced the release of a new Justice Department research bulletin showing that 46 percent of victimized children were known to school, police or medical authorities. The bulletin, Child and Youth Victimization Known to Police, School, and Medical Authorities draws from the National Survey of Children’s Exposure to Violence sponsored by the Office of Justice Programs’ Office of Juvenile Justice and Delinquency Prevention with support from the Centers for Disease Control and Prevention.

 

“While more children are reporting violence to authorities, many continue to endure the pain of victimization in silence,” said Acting Associate Attorney General West.  “Through the work of the Attorney General’s task force, we hope to find more ways to identify those children in need and make sure they have access to effective prevention and treatment options.”

 

The task force is co-chaired by Joe Torre, chairman of the board of the Joe Torre Safe At Home Foundation, and Robert Listenbee, Jr., chief of the Juvenile Unit of the Defender Association of Philadelphia. Co-chair Listenbee, a Detroit-area native, highlighted the urgency and opportunity of the task force’s work.

 

“I grew up just 20 miles outside of Detroit in Mt. Clemens, Michigan. During my high school years, violence was commonplace,” said Listenbee. “Similar violence still occurs in cities and towns across the country, but today we know so much more about how to address it. The resounding message this task force has heard is that we can – and must – change the norm of violence in children’s lives.”

 

During the opening session, Detroit Police Chief Ralph Godbee discussed the police department’s work with youth. He was joined by Lawnya Sherrod, a former Detroit gang member turned community organizer, who highlighted her work to get youth out of gangs and to help them graduate from high school and become productive, successful members of the community.

 

In a panel discussion about successful programs, Wayne County Child and Family Services Director Tadarial Sturdivant described his agency’s efforts to reform the juvenile justice system through a program called First Contact.

 

“[The program] creates an opportunity to collaborate with the Detroit Police Department and offer services at the street level to support the patrol officer who has first contact with the juvenile,” said Sturdivant. “As an alternative to arrest and detention, [the department] will convey youth to the Juvenile Assessment Center for stabilization, parental contact, brief assessment, transportation home, and referral for voluntary services.”

 

In a panel about public-private partnerships, Dr. William Bell, President and CEO of Casey Family Programs, discussed the need to meet the “overwhelming circumstances” of violence against children “with deliberate and intentional action.” Bell outlined concrete steps that every city in America could take to build “communities of hope” to reverse these violent trends.

 

Mary Lee, Deputy Director of PolicyLink, described how place influences many child outcomes. “ Just by knowing his or her zip code, a young person’s health, life expectancy, success in school, adult income¯all of these can be predicted,” noted Lee in her testimony, which described ways to improve the places children live to improve long-term outcomes.

 

The task force is composed of 13 leading experts, including practitioners, child and family advocates, academic experts and licensed clinicians, who will identify promising practices, programming and community strategies to prevent and respond to children’s exposure to violence. Their findings will inform their final report to the Attorney General in late 2012, which will present policy recommendations and serve as a blueprint for preventing and reducing the negative effects of such violence across the United States.

 

For more information about Attorney General Holder’s Defending Childhood Initiative and the task force, please visit: www.justice.gov/defendingchildhood.

Related Materials:

Bulletin: Child and Youth Victimization Known to Police, School, and Medical Authorities
Acting Associate Attorney General Tony West Speaks at the Defending Childhood Task Force Meeting
Acting Assistant Attorney General for the Office of Justice Programs Mary Lou Leary Speaks at the Defending Childhood Task Force Meeting

WASHINGTON – Two members of the Aryan Brotherhood of Texas (ABT) have been sentenced to federal prison for their role in an aggravated assault that took place in Tomball, Texas, in September 2008, Assistant Attorney General Lanny A. Breuer of the Criminal Division and U.S. Attorney Kenneth Magidson of the Southern District of Texas announced today.

On April 20, 2012, U.S. District Court Senior Judge Ewing Werlein Jr. sentenced Michael Burkett, 34, aka “Redneck,” to 27 months in prison and Shane Dallmeyer, 31, aka “Lock Jaw,” to 33 months in prison.

 

Burkett and Dallmeyer, both of the greater Houston area, pleaded guilty to racketeering aggravated assault for their role in the beating of an ABT prospect member.

 

According to court documents, the defendants were members of the ABT, a powerful 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 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 has expanded its criminal enterprise to include illegal activities for profit.

 

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

According to court documents, Burkett and Dallmeyer, along with nine fellow ABT gang members, participated in the beating of an ABT prospect member at the home of another ABT gang leader, Steven Walter Cooke, 48, aka “Stainless,” in Tomball, on Sept. 22, 2008. The ABT prospect, who sustained serious bodily injury, was beaten by ABT gang members because he violated ABT rules of conduct.

 

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

 

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; the U.S. Marshals Service; the Bureau of Prisons; the Texas Ranger Division – Texas Department of Public Safety; the Montgomery County, Texas, Sheriff’s Department; the Houston Police Department-Gang Division; the Tomball Police Department; the Texas Department of Criminal Justice – Inspector General; and the 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.

WASHINGTON – Tahn Le, 44, of Philadelphia, was sentenced today to 400 months in prison for his participation in a conspiracy to commit violent home invasion robberies of successful Asian business owners in Pennsylvania, New Jersey, Maryland and Virginia, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney Zane David Memeger of the Eastern District of Pennsylvania.

 

U.S. District Court Judge Legrome D. Davis also ordered Le to serve five years of supervised release following his prison term and to pay $112,689 in restitution. After a four-day trial, a federal jury in the Eastern District of Pennsylvania found Tahn Le guilty on Jan. 20, 2012, of conspiracy to interfere with interstate commerce through multiple home invasion robberies and related firearms violations. To date, seven co-defendants have pleaded guilty for their roles in the conspiracy and are awaiting sentencing: Teo Van Bui, Buu Huu Truong, Thach Van Nguyen, Den Van Nguyen, Denise Novelli, Sidney Biggs and Hung T. Ngo.

 

According to evidence presented at trial, Le and his co-defendants targeted successful Asian business owners in Pennsylvania, New Jersey, Maryland and Virginia for home invasion robberies because they believed that the owners stored significant amounts of business proceeds in their homes. In carrying out the robberies, the defendants brandished handguns, tied up, and in some instances, beat their victims, and stole business proceeds as well as expensive jewelry.

The case was prosecuted by Trial Attorneys John S. Han and Robert Livermore of the Criminal Division’s Organized Crime and Gang Section.

The case was investigated by the FBI; the Poconos Township, Penn., Police Department; the Freehold Borough, N.J., Police Department; the Monroe Township, N.J., Police Department; and the Fairfax County, Va., Police Department. Additional assistance was provided by the Bureau of Alcohol, Tobacco, Firearms and Explosives.

Anthony Allega Cement Contractor Inc., a Cleveland construction firm, has agreed to pay the United States $500,000 to resolve allegations that it knowingly submitted false claims related to a federally-funded construction project, the Justice Department announced today.  The United States alleged that Allega submitted false claims that made it appear that the company was in compliance with the U.S. Department of Transportation’s (DOT) Disadvantaged Business Enterprise (DBE) program, as required in order to obtain and maintain Allega’s contract with the government.  The DBE program provides opportunities to businesses owned by minorities and women, as well as socially and economically disadvantaged individuals, to participate in federally-funded construction and design projects.

           

Allega was the prime contractor on a project to construct and pave a new runway at Cleveland’s Hopkins International Airport between 2001 and 2006.  To obtain and maintain its contract, Allega was required to comply with DOT DBE regulations and to accurately report DBE participation on the project. The United States alleged that Allega claimed that materials and services for the project were provided by a company known as Chem-Ty Environmental, when in fact Chem-Ty was merely a “pass-through” entity used to make it appear as if a DBE had performed the work.

           

“The Disadvantaged Business Enterprises program helps businesses owned by minorities and women work on federal construction projects,” said Stuart F. Delery, Acting Assistant Attorney General for the Justice Department’s Civil Division. “Those who falsely claim credits under the program in order to obtain federal funds take advantage both of the taxpayers and the businesses that the program is designed to assist.”

 

The government’s claims were based upon an investigation conducted by the Justice Department’s Civil Division, the U.S. Attorney’s Office for the Northern District of Ohio, DOT’s Office of Inspector General (OIG) and the Federal Aviation Administration.

 

“When businesses misrepresent those working with them to obtain government contracts, they violate the law and economically harm subcontractors who already face numerous disadvantages in the workplace,” added Steven M. Dettelbach, U.S. Attorney for the Northern District of Ohio. “This resolution helps to correct that injustice in this instance.”       

 

“Preventing and detecting DBE fraud are priorities for the Secretary of Transportation and the USDOT-OIG,” said Michelle McVicker, OIG regional Special Agent in Charge. “Prime contractors and subcontractors are cautioned not to engage in fraudulent DBE activity and are encouraged to report any suspected DBE fraud to the USDOT-OIG. Our agents will continue to work with the Secretary of Transportation, the Federal Aviation Administrator, and our law enforcement and prosecutorial colleagues to expose and shut down DBE fraud schemes throughout Ohio and the United States.”

 

The claims settled by this agreement are allegations only, and there has been no determination of liability.

 

The Justice Department’s total recoveries in False Claims Act cases since January 2009 have topped $9.2 billion.

A financial investor who purchased municipal tax liens at auctions in New Jersey, as well as a company in which he was a partner, pleaded guilty today for their roles in a conspiracy to rig bids for the sale of tax liens auctioned by municipalities throughout the state, the Department of Justice announced.

A felony charge was filed today in the U.S. District Court for the District of New Jersey in Newark, N.J., against David Butler of Cherry Hill, N.J. A charge was also filed against DSBD LLC, a New Jersey company responsible for managing tax lien investments in which Butler had a partnership interest. Under the plea agreements, which are subject to court approval, Butler and DSBD have each agreed to cooperate with the department’s ongoing investigation.

According to the felony charges, from at least as early as the beginning of 2005 until approximately February 2009, Butler and his company participated in a conspiracy to rig bids at auctions for the sale of municipal tax liens in New Jersey by agreeing to allocate among certain bidders on which liens to bid. The department said that both Butler and DSBD proceeded to submit bids in accordance with their agreements and purchased tax liens at collusive and non-competitive interest rates.

“The Antitrust Division is committed to holding accountable those who seek to exploit and undermine the competitive process at municipal tax lien auctions,” said Acting Assistant Attorney General Sharis A. Pozen in charge of the Department of Justice’s Antitrust Division. “The division will continue to work with its law enforcement partners to prosecute those who harm our local communities by engaging in this kind of anticompetitive conduct in municipal tax lien auctions.”

The department said that the primary purpose of the conspiracy was to suppress and restrain competition to obtain selected municipal tax liens offered at public auctions at non-competitive interest rates. When the owner of real property fails to pay taxes on that property, the municipality in which the property is located may attach a lien for the amount of the unpaid taxes. If the taxes remain unpaid after a waiting period, the lien may be sold at auction. State law requires that investors bid on the interest rate delinquent homeowners will pay upon redemption. By law, the bid opens at 18 percent interest and, through a competitive bidding process, can be driven down to zero percent. If a lien remains unpaid after a certain period of time, the investor who purchased the lien may begin foreclosure proceedings against the property to which the lien is attached. 

According to the court documents, Butler and DSBD conspired with others not to bid against one another at municipal tax lien auctions in New Jersey. Since the conspiracy permitted the conspirators to purchase tax liens with limited competition, each conspirator was able to obtain liens which earned a higher interest rate. Property owners were therefore made to pay higher interest on their tax debts than they would have paid had their liens been purchased in open and honest competition.

Each violation of the Sherman Act carries a maximum penalty of 10 years in prison and a $1 million fine for individuals. The maximum penalty for a corporation is a $100 million criminal fine. The maximum fine for a Sherman Act violation may be increased to twice the gain derived from the crime or twice the loss suffered by the victim if either amount is greater than the statutory maximum.

Today’s guilty pleas are the eighth and ninth pleas resulting from an ongoing investigation into bid rigging or fraud related to municipal tax lien auctions. On Aug. 24, 2011, Isadore H. May, Richard J. Pisciotta Jr. and William A. Collins each pleaded guilty to one count of bid rigging in connection with their participation in a conspiracy to allocate liens at New Jersey auctions. On Feb. 23, 2012, Robert W. Stein and David M. Farber also pleaded guilty to conspiring to allocate liens at municipal tax lien auctions in New Jersey. On March 27, 2012, Robert E. Rothman pleaded guilty for his role in a conspiracy to rig bids for the sales of tax liens auctioned by municipalities throughout New Jersey. On April 17, 2012, Stephen E. Hruby also pleaded guilty for his role in a conspiracy to rig bids for the sale of tax liens auctioned by municipalities throughout New Jersey.

Today’s charges are part of efforts underway by President Barack Obama’s Financial Fraud Enforcement Task Force (FFETF). President Obama established the interagency FFETF 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. For more information on the task force, visit www.StopFraud.gov.

The ongoing investigation is being conducted by the Antitrust Division’s New York Field Office and the FBI’s Atlantic City, N.J., office. Anyone with information concerning bid rigging or fraud related to municipal tax lien auctions should contact the Antitrust Division’s New York Field Office at 212-335-8000, visit www.justice.gov/atr/contact/newcase.htm or contact the FBI’s Atlantic City Resident Agency at 609-677-6400.

The Justice Department announced today that it has reached a settlement with the city of Pittsfield, Mass., to resolve allegations that the city violated the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA) by failing to promote a navy reservist and Pittsfield firefighter, and by retaliating against him after he invoked his rights.

 

The Justice Department’s complaint, filed in the U.S. District Court for the District of Massachusetts, alleges that the city violated Pittsfield firefighter Jeffrey Rawson’s rights by passing him over for promotion to lieutenant in the Pittsfield Fire Department because of his military service obligations.  In 2009, Rawson took a promotional exam for lieutenant. Based on the results of the examination, Rawson was ranked second on the promotional list.  In July 2010, the city informed Rawson that he was being skipped for promotion and that a firefighter ranked lower on the promotional list was instead being promoted to lieutenant. The lower ranked firefighter was promoted in September 2010.

 

The lawsuit further alleges that, after Rawson filed a USERRA complaint with the U.S. Department of Labor’s Veterans’ Employment and Training Service, the city retaliated against him by refusing to reinstate him to the list of firefighters eligible to serve as an acting lieutenant.

 

Under the terms of the settlement, embodied in a consent decree that has been submitted for approval to the federal district court, the city will promote Rawson to lieutenant retroactive to September 2010. The settlement also requires the city to provide Rawson with over $22,000 in back pay, pension contributions and interest. The settlement further mandates the city to provide USERRA training to city department heads and supervisors on the rights and obligations of covered employees and their employers.

 

“Our military servicemembers sacrifice tremendously to serve our country,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “This settlement demonstrates our vigilant protection of the employment opportunities of our servicemembers, and our commitment to vigorous enforcement of the laws that protect them.”

 

“Employers face incredible challenges when an employee leaves his position temporarily to serve our country. However, our servicemembers endure much greater challenges to protect our precious freedom,” said U.S. Attorney Carmen M. Ortiz for the District of Massachusetts. “We are pleased that the city of Pittsfield agreed to restore Mr. Rawson’s rights and provide him with the promotion to which he was entitled.”

 

This case was litigated by the Employment Litigation Section of the Justice Department’s Civil Rights Division and the Civil Division of the U.S. Attorney’s Office for the District of Massachusetts. 

Civil rights enforcement is a priority of the Department of Justice and District of Massachusetts. The rights of our servicemembers are protected under USERRA, which prohibits civilian employers from discriminating against members of the military, including reservists, with respect to employment opportunities, including promotions, based on their past, current, or future uniformed service obligations.  The federal law also prohibits employers from retaliating against service members for exercising their rights under USERRA, including by filing a complaint. Additional information about USERRA can be found on the Justice Department’s websites, www.usdoj.gov/crt/emp and www.servicemembers.gov , as well as the Labor Department’s website at www.dol.gov/vets/programs/userra/main.htm .

The Justice Department today filed a lawsuit against the city of Jacksonville, Fla., alleging that the city is engaged in a pattern or practice of employment discrimination against African-Americans in its fire and rescue department in violation of Title VII of the Civil Rights Act of 1964.  The lawsuit challenges the fire department’s use of written examinations for the promotion of firefighters to four ranks – Lieutenant, Captain, and District Chief, all in the suppression line, and Engineer.

 

“This complaint should send a clear message to all public employers that employment practices that have the effect of excluding qualified candidates on account of race will not be tolerated,” said Thomas Perez, Assistant Attorney General for the Civil Rights Division. “At best, these tests measure only a slice of what is necessary to be a supervisor, but they stand in the way of qualified African-Americans advancing in the fire department.  The Justice Department will take all necessary action to ensure that such discriminatory practices are eliminated and that the victims of such practices are made whole.” 

 

The United States’ complaint alleges that the examinations impact African-American candidates in two ways.  First, African-American candidates for promotion to the four positions pass the examinations at significantly lower rates than white candidates.  Second, even those African-Americans who pass the examinations are rarely promoted because the fire department selects candidates for promotion in descending rank-order based primarily upon each candidate’s written examination score and African-American candidates score significantly lower than whites. 

 

Title VII prohibits employment practices that result in a disparate impact on the basis of race unless the employer can prove that such practices really test for what the job requires--are “job related and consistent with business necessity.”  The complaint alleges that the City’s examinations do not meet this standard and, thus, qualified African-Americans have been kept out of the promotional ranks unnecessarily. 

 

The Justice Department seeks a court order that would require the city to stop using the challenged examinations, develop selection procedures for promotions that comply with Title VII and provide make-whole relief, including offers of promotion, back pay and retroactive seniority, to individual African-Americans who have been harmed as a result of the city’s use of the examinations.

 

Additional information about Title VII and other federal employment laws is available on the Civil Rights Division’s Web site at www.justice.gov/crt/ .

WASHINGTON – Tokyo-based Fujikura Ltd. has agreed to plead guilty and to pay a $20 million criminal fine for its role in a conspiracy to fix prices of automotive wire harnesses and related products installed in U.S. cars, the Department of Justice announced today.

 

According to a one-count felony charge filed today in the U.S. District Court for the Eastern District of Michigan in Detroit, Fujikura engaged in a conspiracy to rig bids for and to fix, stabilize and maintain the prices of automotive wire harnesses and related products sold to an automaker in the United States and elsewhere. According to the charge, Fujikura’s involvement in the conspiracy lasted from at least as early as January 2006 until at least February 2010. According to the plea agreement, which is subject to court approval, Fujikura has agreed to pay a criminal fine and to cooperate with the department’s ongoing investigation.

 

“The Antitrust Division will remain vigilant in its efforts to detect and prosecute anticompetitive conduct in this important industry, which affects virtually every American consumer,” said Acting Assistant Attorney General Sharis A. Pozen in charge of the Department of Justice’s Antitrust Division.  “The division has focused its enforcement efforts in industries essential to consumers’ everyday lives, and we, along with our law enforcement partners, have been successful in bringing to justice companies and executives engaged in illegal price fixing conspiracies.”

 

To date, including Fujikura, eight executives and five companies have been charged and have agreed to plead guilty in the department’s ongoing antitrust investigation into the auto parts industry. Three of the companies have pleaded guilty and have been sentenced to pay criminal fines totaling more than $748 million. Seven of the executives have pleaded guilty and have been sentenced to serve a total of more than 122 months in jail.

 

Fujikura manufactures and sells automotive wire harnesses, which are automotive electrical distribution systems used to direct and control electronic components, wiring and circuit boards in cars. 

 

According to the charge, Fujikura and its co-conspirators carried out the conspiracy by agreeing, during meetings and conversations in Japan, to allocate the supply of automotive wire harnesses and related products on a model-by-model basis and sold the parts at non-competitive prices to an automaker in the United States and elsewhere.

 

Fujikura is charged with price fixing in violation of the Sherman Act, which carries a maximum fine of $100 million for corporations. The maximum fine for the company may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.

 

The current prosecution arose from an ongoing federal antitrust investigation into price fixing, bid rigging and other anticompetitive conduct in the automotive parts industry, which is being conducted by the Antitrust Division’s National Criminal Enforcement Section and the FBI’s Detroit Field Office with the assistance of the FBI headquarters’ International Corruption Unit. Anyone with information concerning the focus of this investigation is urged to call the Antitrust Division’s National Criminal Enforcement Section at 202-307-6694, visit www.justice.gov/atr/contact/newcase.htm or call the FBI’s Detroit Field Office at 313-965-2323.

The Department of Justice and the Department of Education reached agreement with the Boston Public Schools (the district) and its superintendent today to ensure that English Language Learner (ELL) students in Boston receive the services and supports they need to overcome language barriers, as required by the Equal Educational Opportunities Act of 1974 and Title VI of the Civil Rights Act of 1964.  This agreement replaces an interim settlement agreement entered on Oct. 1, 2010, which required the district to implement short-term remedies to ensure that thousands of students improperly excluded from the district’s ELL programs were promptly assessed and provided services. 

 

The agreement reached today governs the district’s transition from these short-term remedies to longer-term policies and programs that expand the coverage of Boston’s ELL program and are designed to ensure that the services provided to ELL students are of high quality, delivered by qualified teachers and tailored to the specific needs of each individual student. The agreement requires the district to continue its efforts to accurately identify and place ELL students, and further ensures that ELL students, who face unique challenges, including students with interrupted former education and students with disabilities, receive assessments and services that are specially designed to address and ameliorate those challenges. The agreement also affords ELL students greater access to the higher-level learning opportunities in the district. To ensure these programmatic changes are effective, the agreement further requires the district to evaluate the effect of these changes on student achievement over time through robust, disaggregated data analyses.

 

“We applaud the Boston Public Schools for working collaboratively with the United States to develop a comprehensive plan to effectively serve all students who are not proficient in English,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division.  “We believe this plan can guide other school districts seeking to ensure that its English Language Learner programs not only meet the requirements of federal law, but also empower English Language Learner students to strive for success in their education and lives.”   

 

“A key to success is access to a high quality education and today, the Boston Public Schools is promising to provide limited English proficient students an equal opportunity for success by giving them access to programs and services tailored to meet their needs, including access to accelerated programs,” said Russlynn Ali, Assistant Secretary for the Office for Civil Rights at the Department of Education. “The Department of Education is committed to working with the Boston School Committee as it implements this comprehensive plan.”

 

“ Our education system must provide our children with opportunities to develop into productive citizens regardless of their proficiency in English.  When English language learners lack properly trained teachers, those opportunities are curtailed,” said U.S. Attorney Carmen M. Ortiz of the District of Massachusetts.  “We share the goal of continued improvement to Massachusetts schools and look forward to the progress of this collaborative effort.”

 

The enforcement of the Equal Educational Opportunities Act and Title VI 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 . Enforcement of Title VI is also a top priority of Department of Education’s Office for Civil Rights. Additional information about the Department of Education’s Office for Civil Rights is available on its website at www2.ed.gov/about/offices/list/ocr/index.html .

ATK Launch Systems Inc. has agreed to a $36,967,160 settlement with the United States to resolve allegations that ATK sold dangerous and defective illumination flares to the Army and the Air Force. According to the government’s allegations, from 2000 to 2006, ATK delivered LUU-2 and LUU-19 illuminating para-flares to the Defense Department. These flares, which burn in excess of 3,000 degrees Fahrenheit for over five minutes, are used for nighttime combat, covert and search and rescue operations and have been used extensively by American forces in Iraq and Afghanistan in the global war on terror. The government alleged that the flares delivered by ATK were incapable of withstanding a 10-foot drop test without exploding or igniting, as required by specifications, and that ATK was aware of this when it submitted claims for payment.

 

ATK has agreed to pay the United States $21 million in cash and provide necessary in-kind services worth $15,967,160 to fix the 76,000 unsafe para-flares remaining in the government’s inventory. The settlement resolves a False Claims Act suit filed in the U.S. District Court for the District of Utah.

 

The lawsuit was initially filed by an ATK employee under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private individuals, called “relators” to bring lawsuits on behalf of the United States and receiv e a portion of the proceeds of a settlement or judgment awarded against a defendant.

 

“Our men and women in combat deserve equipment that meets critical safety and performance requirements,” said Stuart F. Delery, Acting Assistant Attorney General for the Civil Division. “This case demonstrates that the Department of Justice will pursue cases where contractors knowingly provide defective equipment that puts the safety of American military service members at risk.”

 

“This settlement demonstrates our commitment to aggressively go after contractors who recklessly disregard and deliberately ignore critical safety defects in munitions used by America’s uniformed fighting men and women on the front lines of the war on terror,” said David B. Barlow, U.S. Attorney for the District of Utah. “This office fully supported the federal investigators in their efforts to uncover these fraudulent claims and recover the ill-gotten gains for the American taxpayers.”

 

The investigation team, which was led by the Defense Criminal Investigative Service, included the Air Force Office of Special Investigation, the Navy Naval Criminal Investigative Service, the Army Criminal Investigative Command and auditors from the Defense Contract Audit Agency and the Defense Contract Management Agency. Additional technical support was provided by the Army Research Laboratory in Aberdeen, Md., the Army Aviation and Missile Command in Huntsville, Ala., the Naval Sea Systems Command at Crane, Ind. and Portsmouth, R.I., the Defense Standardization Program Office at Fort Belvoir, Va., the Air Force Materiel Command at Wright Patterson Air Force Base, Ohio and Hill Air Force Base, Utah, and the Army Materiel Command at Rock Island Arsenal, Ill.

Walgreens, an Illinois-based corporation operating a national retail pharmacy chain, has paid the United States and participating states $7.9 million to resolve allegations that Walgreens violated the False Claims Act, the Justice Department announced today. 

 

The settlement resolves allegations that Walgreens offered illegal inducements to beneficiaries of government health care programs, including Medicare, Medicaid, TRICARE and the Federal Employees Health Benefits Program (FEHBP), in the form of gift cards, gift checks and other similar promotions that are prohibited by law, to transfer their prescriptions to Walgreens pharmacies.  The government investigation alleged that Walgreens had offered government health beneficiaries $25 gift cards when they transferred a prescription from another pharmacy to Walgreens.  The company’s advertisements that promoted gift cards and gift checks for transferred prescriptions typically acknowledged that the offer was not valid with Medicaid, Medicare or any other government program.  Nevertheless, the government alleged that Walgreens employees frequently ignored the stated exemptions on the face of the coupons and handed gift cards to customers who were beneficiaries of government health programs, in violation of federal law.

 

“This case represents the government's strong commitment to pursuing improper practices in the retail pharmacy industry that have the effect of manipulating patient decisions,” said Stuart F. Delery, Acting Assistant Attorney General for the Civil Division of the Department of Justice. 

 

The allegations were brought to the government by two whistleblowers, known as relators, in two separate whistleblower lawsuits filed under the qui tam, or whistleblower, provisions of the False Claims Act and state False Claims Act statutes.  The relators, Cassie Bass, a pharmacy technician formerly employed by Walgreens, and Jack Chin, an independent pharmacist, will receive $1,277,172 from the United States for their role in filing the qui tam actions.  The federal share of the settlement is $7,298,124.  

 

“This case vindicates and protects the interests of consumers throughout the nation by ensuring that they remain free from undue influence by large retail chains when making decisions about which pharmacies to entrust their own individual health care,” said André Birotte Jr, U.S. Attorney for Central District of California. 

      

“The law prohibits pharmacies from using their retail clout to lure patients whose prescriptions are subsidized by the government,” said Barbara L. McQuade, U.S. Attorney for the Eastern District of Michigan.  “Continuity with a pharmacist is important to detect problems with dosages and drug interactions.  Patients should make decisions based on legitimate health care needs, not on inducements like gift cards.” 

 

“This settlement makes clear that corporations seeking increased profits over their patients' needs will pay a substantial price,” said Daniel R. Levinson, Inspector General for the Department of Health and Human Services.  “Violating Federal health care laws, as Walgreens allegedly did by offering incentives for new business, cannot be tolerated.”

 

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 Secretary of the Department of Health and Human Services Kathleen Sebelius in May 2009.  The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation.  One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover more than $6.7 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 $9 billion.

 

This case was investigated jointly by the Commercial Litigation Branch of the Justice Department’s Civil Division, the U.S. Attorney’s Offices for the Central District of California and the Eastern District of Michigan, the National Association of Medicaid Fraud Control Units and the Department of Health and Human Services, Office of Inspector General. 

             

The claims settled by today’s agreement are allegations only; there has been no determination of liability.

The Justice Department and Internal Revenue Service (IRS) announced today that attorney Aristotle “Rick” R. Matsa, of Worthington, Ohio, was convicted of numerous tax fraud and obstruction of justice related offenses, including witness tampering and making a false statement. In addition, Rick Matsa and his mother, Loula Z. Matsa, were convicted of conspiracy to obstruct justice, commit perjury, and make false statements, following a five-week trial in Columbus, Ohio, before the Honorable Edmund A. Sargus Jr.

 

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 the trusts had been filing similar returns dating back to 1990. Each of the trusts reported receiving significant amounts of interest income each year, generated from funds held in numerous bank accounts, yet no income tax was reported due as a result of fraudulently claimed deductions for distributions on the trust returns that were purportedly paid to a foreign beneficiary each year. However, the evidence at trial showed, instead, that Rick Matsa used funds from those trusts to purchase a 150-acre farm in Hocking County and a home in Worthington, both of which he used as a personal residence.

 

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. The evidence at trial was that Rick Matsa maintained more than $300,000 in funds in that undisclosed foreign bank during 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 the investigation by misleading and 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 and 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.

 

Rick Matsa’s tenant, P. Maria Galloway, the owner of an art gallery next door to Rick 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 Rick Matsa’s law firm and a number of his nominee entities, which Rick Matsa used as part of his scheme to obstruct the IRS.

 

“Today’s verdict shows that attorneys and other professionals who violate the tax laws or who attempt to obstruct justice will be held accountable for their actions,” said Assistant Attorney General for the Tax Division Kathryn Keneally. “Those who illegally attempt to hide their income and assets from the IRS through fraudulent trusts or offshore bank accounts will be prosecuted and punished.”

 

“The government will not tolerate abusive tax schemes that use offshore accounts to illegally escape taxes,” said Rick A. Raven, Acting Chief, IRS Criminal Investigation. “Those Americans who file accurate, honest and timely tax returns can be assured that the government will hold accountable those who don’t.”

 

Rick Matsa faces a maximum potential sentence of 108 years imprisonment, a fine of up to $3.25 million, and five years of supervised release. Loula Matsa faces a maximum potential sentence of five years imprisonment, a fine of $250,000, and three years of supervised release. No sentencing date has yet been scheduled.

 

Assistant Attorney General Kathryn 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 Justice Department’s Tax Division and its enforcement efforts is available at www.justice.gov/tax .

WASHINGTON – Daniyar Zhaxalyk, 25, a citizen of Kazakhstan who entered the United States on a student visa, pleaded guilty today in Houston to one count of money laundering, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division and U.S. Attorney Kenneth Magidson for the Southern District of Texas.

Zhaxalyk pleaded guilty before U.S. District Judge Ewing Werlein Jr. in the Southern District of Texas.  Zhaxalyk and three co-conspirators were charged in an indictment filed in the Southern District of Texas and unsealed in December 2011.

Zhaxalyk admitted to laundering funds generated in a sophisticated “hack and dump” stock scheme that caused more than $400,000 in losses.  The indictment charged that Zhaxalyk’s co-conspirators illegally accessed brokerage accounts to engage in a stock fraud scheme in which the compromised accounts were used to purchase borrowed shares of stock at above-market prices from the defendants’ personal brokerage accounts.  Zhaxalyk’s co-conspirators then allegedly repurchased the borrowed shares at the considerably lower market price, returned the borrowed shares to the stock lender and claimed as profit the difference between the market price and the inflated price paid by the compromised victim accounts.  Zhaxalyk admitted that he received and made wire transfers and withdrawals of the funds generated from the fraudulent stock sales and supervised other Houston-based students recruited into the scheme to launder funds.

A co-defendant, Alexey Li, also a citizen of Kazakhstan who entered the United States on a student visa, previously pleaded guilty in Houston on March 2, 2012, and is awaiting sentencing.  Two other defendants remain at large.

At sentencing, Zhaxalyk will face a maximum penalty of 10 years in prison and a $250,000 fine.

This case was investigated by the St. Louis, San Francisco and Houston offices of the FBI.  The case is being prosecuted by Trial Attorney Ethan Arenson of the Computer Crime and Intellectual Property Section in the Justice Department’s Criminal Division and Assistant U.S. Attorney Mark McIntyre of the Southern District of Texas.

WASHINGTON - The International Competition Network (ICN) launched and approved three new initiatives on international enforcement cooperation, the investigative process in competition cases and working with the courts, the Department of Justice announced today.  The ICN also adopted new materials on unilateral conduct investigations, raising anti-cartel awareness and explaining the benefits of competition.

The 11th annual ICN conference, hosted by the Brazilian Competition Policy System, was held on April18-20, 2012, in Rio de Janeiro.  More than 450 delegates participated, representing more than 80 antitrust agencies from around the world, and included competition experts from international organizations and the legal, business, consumer and academic communities. Acting Assistant Attorney General Sharis A. Pozen of the Department of Justice’s Antitrust Division and Federal Trade Commission (FTC) Commissioner Edith Ramirez led the U.S. delegates at the conference. The conference showcased the achievements of ICN working groups on mergers, unilateral conduct, cartels, competition advocacy and competition agency effectiveness.

“The ICN has become a central forum for dialogue within the global antitrust community to share experiences and develop practical recommendations,” said Acting Assistant Attorney General Pozen. “Its work is enabling more effective and efficient antitrust enforcement worldwide, to the benefit of competition agencies and, ultimately, consumers.”

 

The ICN Steering Group introduced and members approved three new initiatives.  The Department of Justice and the Turkish Competition Authority co-chaired the international competition enforcement cooperation initiative, which was presented by the Acting Assistant Attorney General Pozen.  The FTC and the European Commission’s Competition Directorate co-chaired the investigative process initiative, which was presented by the Competition Directorate’s Director General Alexander Italianer.  The working with courts and judges initiative, co-chaired by the Chilean Competition Tribunal and Poland’s Office of Competition and Consumer Protection,was presented by Malgorzata Krasnodebska-Tomkiel, President of the Polish authority. 

The ICN’s working groups also presented their work to the conference.  The Merger Working Group, co-chaired by the Department of Justice, the Irish Competition Authority and the Italian Competition Authority, aims to promote best practices in the design and operation of merger review regimes. Acting Assistant Attorney General Pozen led the conference discussion of current trends and developments in merger enforcement, including developments in economic analysis and effective merger remedies. 

 

The Cartel Working Group produced a paper on cartel awareness and outreach efforts and compiled comparative information on information exchanges in cartel cases.  Deputy Assistant Attorney General of the Department of Justice’s Antitrust Division Scott D. Hammond, led a panel discussion focused on the challenges of bid-rigging enforcement.

 

The ICN’s Unilateral Conduct Working Group, co-chaired by the FTC, Germany’s Bundeskartellamt and the Swedish Competition Authority, promotes convergence and sound enforcement of laws governing conduct by firms with substantial market power. The working group drafted chapters on the objectives of unilateral conduct laws and on predatory pricing for its workbook for agency investigators.  FTC Counsel Cynthia Lagdameo led a panel discussion on predatory pricing by dominant firms.

 

The Advocacy Working Group finalized a competition advocacy toolkit with guidance tools for agencies and a handbook on conducting market studies.  In addition, the group issued a report on raising awareness of the benefits of competition. 

 

The conference also highlighted the work of the Agency Effectiveness Working Group, which is developing a competition agency manual as a resource to enhance agencies’ effectiveness and presented new material on knowledge management and human resources management.  Former FTC Chairman William E. Kovacic participated in a discussion on resource management for competition authorities.

 

The conference’s Brazilian host agencies conducted a special project devoted to effective settlements in competition cases, including cartel, merger and unilateral conduct enforcement areas. FTC Commissioner Ramirez presented remarks and participated in the discussion focusing on settlements of unilateral conduct cases.

 

“Designing and implementing effective remedies in unilateral conduct cases presents one of the most important, yet daunting challenges competition authorities face,” stated FTC Commissioner Ramirez.  “While the right remedy can restore much needed competition in a market, an ill-advised remedy can turn what could be a big victory for consumers into little more than a Pyrrhic victory.”

 

The conference showcased the ICN Curriculum Project, a project led by the FTC to create a “virtual university” of training materials on competition law and practice.  Randolph W. Tritell, Director of the FTC’s Office of International Affairs, presented the curriculum project at the conference. 

 

The ICN also approved new leadership positions. Chairman Eduardo Pérez Motta of the Mexican Federal Competition Commission was selected as the new chair of the ICN Steering Group.  He succeeds outgoing chair Chief Executive John Fingleton of the United Kingdom’s Office of Fair Trading. The Department of Justice will co-chair the Cartel Working Group and the FTC will co-chair the Agency Effectiveness Working Group.

 

The ICN was created in October 2001, when the Department of Justice and the FTC joined antitrust agencies from 13 other jurisdictions to increase understanding of competition policy and promote convergence toward best practices around the world. The ICN now includes 123 member agencies from 108 jurisdictions.

 

ICN documents are available at www.internationalcompetitionnetwork.org.

Marking the ninth annual Earth Day Service Celebration today, Acting Associate Attorney General Tony West and Assistant Attorney General Ignacia S. Moreno marked a day of service, commending volunteers from the Justice Department’s Environment and Natural Resources Division (ENRD), Washington Parks & People and the DC Green Corps as they continue work on environmental restoration projects near the Community Greening Center in Marvin Gaye Park in Northeast Washington, D.C.

“As a nation, we have taken great strides since the first Earth Day more than 40 years ago, from the landmark environmental legislation of the 1970s to recent efforts to address greenhouse gas emissions,” said Acting Associate Attorney General Tony West.  “The story of Marvin Gaye Park’s renewal is an inspiration.  Over the past decade, volunteers have removed countless tires and bags of garbage from this area, cleared and reopened miles of trail and streams, and planted thousands of native trees and shrubs.  Earth Day provides an opportunity for us to reflect on and celebrate this progress, but it also reminds us that there is much left to be done.”

 

In her remarks, Assistant Attorney General Moreno said:  “Today, on the second anniversary of the Deepwater Horizon explosion and resulting massive oil spill in the Gulf of Mexico, we remember the 11 lives that were tragically lost.  We also are reminded that our natural resources are precious and that we must continue to protect these resources and the communities across the nation who rely on them for their livelihood.  The Department of Justice will continue to vigorously enforce the federal civil and criminal environmental and natural resources laws that protect our air, land and water from pollution and that preserve our natural resources for the use and enjoyment of generations to come.”

 

Assistant Attorney General Moreno also announced this morning the publication of ENRD’s Fiscal Year 2011 Accomplishments Report. The full report, which details the division’s work across the nation during FY2011, is posted at www.justice.gov/enrd/Current_topics.html .  Among other things, the report details the civil and criminal enforcement of the nation’s environmental laws, resulting in immeasurable benefits for human health and the environment derived from significant reductions in emissions and discharges of harmful pollutants. Other results detailed in the report show:

 

·          Over $625 million in civil and stipulated penalties, cost recoveries, natural resource damages and other civil monetary relief, including almost $420 million recovered for the Superfund.

 

·          More than $10.9 billion in corrective measures through civil court orders and settlements – the highest injunctive relief in any fiscal year to date.

 

·          52 criminal cases against 77 defendants, obtaining nearly 53 years in confinement and over $31.2 million in criminal fines, restitution, community service funds and special assessments.

 

A core mission of the division is the strong enforcement of civil and criminal environmental laws to protect our nation’s air, land, water and natural resources. The division’s mission also includes vigorous defense of environmental, wildlife and natural resources laws and agency actions; effective stewardship of our public lands and natural resources; and careful and respectful management of the United States’ obligations to American Indian tribes and their members, including litigation to protect tribal sovereignty, rights and resources. Also in 2011, with colleagues in the Civil Division, ENRD attorneys continued to play an instrumental role in the litigation that followed the catastrophic oil spill in the Gulf of Mexico.

2012 will mark the ninth consecutive Earth Day service celebration at Marvin Gaye Park. ENRD has devoted over 5,500 hours of employee time to planting trees, removing trash, laying sod and gardening.

 

“It's a real honor to have ENRD staff back again this year,” said Washington Parks & People Director Steve Coleman. “Their inspiring dedication and hard work have helped these communities to create a beautiful lasting legacy of environmental reclamation, justice and opportunity for all in this stream valley.

 

The Community Greening Center is a neighborhood-based nursery for plants and trees as well as an environmental education resource center located near the intersection of 51st Street and Nannie Helen Burroughs Ave., N.E. ENRD volunteers broke ground on the Greening Center last year together with Washington Parks & People and volunteers from the DC Green Corps. This is the first native plant tree staging area in the city.

 

This year, ENRD volunteers were joined by graduates from the DC Green Corps urban forestry job training program. Tree planting will take place at a nearby public housing complex and on a hillside in the stream valley. Planting trees will provide shade for green space for residents and children who play in the area and more stormwater capture for the stream valley, which is part of the sub-watershed of the Anacostia River. Volunteers will also be adding irrigation systems to the Community Greening Center.

 

The DC Green Corps, based at the Marvin Gaye Community Greening Center in the Watts Branch sub-watershed of the Anacostia River, will provide a city-wide gateway to 50 different green career tracks in urban and community forestry and forest-based ecosystem and watershed restoration. Helping under-served sub-watershed communities across the city, the Green Corps job program will focus on environmental justice, sustainable native reforestation, riparian buffer planting, invasive removal and green controls of urban systems, such as storm and sewer flows. The Green Corps and Center will develop a referral system to help participants connect to jobs through a wide range of agencies, professional and trade associations, trades, professions and industries.

 

For more information about Washington Parks & People and Marvin Gaye Park, visit http://www.washingtonparks.net/ .

 

For more information about Environmental Justice efforts at the Department of Justice, visit http://www.justice.gov/ej/ .

Attorney General Eric Holder today honored award recipients as part of the 29th observance of National Crime Victims’ Rights Week (NCVRW), April 22-28. This year’s theme, “Extending the Vision: Reaching Every Victim” highlights the importance of ensuring services and support to all victims, their families and communities as they heal and seek a successful future. National Crime Victims’ Service Awards honor those working on behalf of crime victims who have earned the esteem of their colleagues in the victim service and criminal justice fields.   

“This year’s 12 awardees have touched, improved and even saved lives. Perhaps most impressively, many of today’s award recipients have achieved these results by transforming their own experiences into a positive force for sweeping change,” said Attorney General Holder. “Every one of them deserves the commendation that is being bestowed today – not only for their remarkable contributions in responding to protecting and defending crime victims and their loved ones but also for the examples they have set for others to follow.”

 Among those honored today is Hollywood icon Mickey Rooney, who in March 2011, testified before the U.S. Senate at a hearing entitled, “Justice for All: Ending Elder Abuse, Neglect and Financial Exploitation” regarding his emotional, verbal and financial abuse at the hands of his stepchildren. Also honored is Julia Dunkins who turned her own personal tragedy into support for survivors of homicide.

 

The awards and their recipients, who are nominated by their colleagues and approved by the Attorney General, are:

Allied Professional Award:  Recognizes an individual or organization outside the victim assistance field for services or contributions to the victims’ field. Recipient: Dr. Dora Schriro, East Elmhurst, N.Y.; Commissioner, New York City Department of Correction.

Crime Victims Financial Restoration Award: Recognizes individuals, programs, organizations or teams that have developed innovative ways of funding services for crime victims or have instituted innovative approaches for securing financial restoration for crime victims. Recipients:  Maricopa County Adult Probation Department’s Financial Compliance Program, (FINCOM) Scottsdale, Ariz. Accepting the award on behalf of FINCOM are Michael Cimino, Barbara Broderick, Stephen Hartley and Kendra Neal. Also receiving the Financial Restoration Award is Wingate Grant, Assistant U.S. Attorney, Eastern District of Virginia, Richmond, Va.

Federal Service Award:  Honors exceptional contributions and extraordinary impact on behalf of victims in Indian Country, on military installations, in national parks or other areas governed by federal jurisdiction.  Recipients: Roi Holt, Victim Assistance Coordinator, Department of Interior, Washington, D.C. and Michelle Scott, U.S. Attorney’s Office, Eastern District of North Carolina, Raleigh, N.C.

National Crime Victim Service Award:  Honors extraordinary efforts in direct service to crime victims. Recipients: Dr. Linda Ledray, Director, Sexual Assault Nurse Examiner – Sexual Assault Rape Team (SANE-SART) Resource Service, Minneapolis; Victoria Cruz, Senior Domestic Violence Counselor/Advocate, Anti-Violence Project, Brooklyn, N.Y.; and the Girls Educational & Mentoring Services (GEMS), New York, N.Y. Accepting the award on behalf of GEMS is Rachel Lloyd.

Professional Innovation in Victim Service Award:  Recognizes the development of effective methods for expanding the reach of victims’ rights and services. Recipient: Common Justice, Brooklyn, N.Y. Accepting the award on behalf of the organization are Danielle Sered and Shameeka Mattis.

Special Courage Award:  Recognizes extraordinary bravery in the aftermath of a crime or courageous act on behalf of a victim or potential victim. Recipients: Actor Mickey Rooney, Alhambra, Calif. Accepting on behalf of Mr. Rooney is Bruce Ross. Other award recipients are Julia Dunkins, Executive Director of Survivors of Homicide, Inc. and Justin Fennell, a crime victim and survivor, both from Washington, D.C.  

The Department of Justice’s Office of Justice Programs’ Office for Victims of Crime (OVC) organized the awards presentation. The Attorney General was joined by Acting Assistant General for the Office of Justice Programs Mary Lou Leary and Acting Director for the Office of Victims of Crime Joye Frost at the award ceremony. Descriptive narratives of the contributions of all recipients are available at OVC’s Gallery.

The Office of Justice Programs (OJP), headed by Acting Assistant Attorney General Mary Lou Leary, provides federal leadership in developing the nation’s capacity to prevent and control crime, administer justice, and assist victims. OJP has six components: the Bureau of Justice Assistance; the Bureau of Justice Statistics; the National Institute of Justice; the Office of Juvenile Justice and Delinquency Prevention; the Office for Victims of Crime; and the Office of Sex Offender Sentencing, Monitoring, Apprehending, Registering, and Tracking. More information about OJP can be found at www.ojp.gov

An Alabama real estate investor has agreed to plead guilty and to serve prison time for his role in conspiracies to rig bids and commit mail fraud at public real estate foreclosure auctions in southern Alabama, the Department of Justice announced today. To date, as a result of the ongoing investigation, three individuals and one company have pleaded guilty.

Charges were filed today in the U.S. District Court for the Southern District of Alabama in Mobile, Ala., against Lawrence B. Stacy of Mobile.  Stacy was charged with one count of bid rigging and one count of conspiracy to commit mail fraud.  According to the plea agreement, which is subject to court approval, Stacy has agreed to serve six months in prison.  Additionally, Stacy has agreed to pay a $10,000 criminal fine and to cooperate with the department’s ongoing investigation.

According to court documents, Stacy conspired with others not to bid against one another at public real estate foreclosure auctions in southern Alabama.  After a designated bidder bought a property at the public auctions, which typically take place at the county courthouse, the conspirators would generally hold a secret, second auction, at which each participant would bid the amount above the public auction price he or she was willing to pay.  The highest bidder at the secret, second auction won the property.

Stacy was also charged with conspiring to use the U.S. mail to carry out a scheme to acquire title to rigged foreclosure properties sold at public auctions at artificially suppressed prices, to make and receive payoffs to co-conspirators and to cause financial institutions, homeowners and others with a legal interest in rigged foreclosure properties to receive less than the competitive price for the properties. Stacy participated in the bid-rigging and mail fraud conspiracies from at least as early as May 2002 until at least January 2007.

The Antitrust Division will continue to pursue vigorously the perpetrators involved in these real estate foreclosure auction schemes,” said Sharis A. Pozen, Acting Assistant Attorney General in charge of the Department of Justice’s Antitrust Division.  “Those who eliminate competition from the marketplace and prey on the misfortune of others will be held accountable for their actions.”

FBI Special Agent in Charge of the Mobile FBI office, Lewis M. Chapman recognized the perseverance of agents and prosecutors in this complex investigation.  Chapman stated, “This investigation sends the message that real estate fraud including antitrust violations will continue to be pursued in these tough economic times, no matter how intricate the scheme.”

Each violation of the Sherman Act carries a maximum penalty of 10 years in prison and a $1 million fine for individuals.  The maximum fine for a Sherman Act charge may be increased to twice the gain derived from the crime or twice the loss suffered by the victim if either amount is greater than the statutory maximum fine. Each count of conspiracy to commit mail fraud carries a maximum penalty of 20 years in prison and a fine in an amount equal to the greatest of $250,000, twice the gross gain the conspirators derived from the crime or twice the gross loss caused to the victims of the crime by the conspirators.

The investigation into fraud and bid rigging at certain real estate foreclosure auctions in southern Alabama is being conducted by the Antitrust Division’s Atlanta Field Office and the FBI’s Mobile Office, with the assistance of the U.S. Attorney’s Office for the Southern District of Alabama. Anyone with information concerning bid rigging or fraud related to public real estate foreclosure auctions should contact the Antitrust Division’s Atlanta Field Office at 404-331-7100 or visit www.justice.gov/atr/contact/newcase.htm.

Today’s charges are part of efforts underway by President Barack Obama’s Financial Fraud Enforcement Task Force.  President Obama established the interagency 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.  For more information on the task force, visit www.StopFraud.gov. 

Stephen Murphy, a Utah resident, pleaded guilty in federal court in Salt Lake City to one count of conspiracy to defraud the United States, and was sentenced the same day to 24 months in prison, the Justice Department and Internal Revenue Service (IRS) announced today. U.S. District Court Judge Dee Benson presided over the plea hearing and sentencing, which took place yesterday.

 

According to information disclosed at the hearing, Murphy, with the assistance of several tax defier promoters, filed numerous false income tax returns for the years 2002 through 2009, espousing various false and frivolous tax positions. For example, he filed a false return for 2002 reporting zero income and zero tax due, on the ground that he was “not a U.S. person” subject to tax. He filed several subsequent false returns fraudulently claiming income tax refunds, including a false return for 2008 based on fictitious Forms 1099-OID. Also disclosed at the hearing, Murphy established two fake charities, which were actually just names attached to certain of his personal bank accounts. He fraudulently claimed “charitable contribution” tax deductions for funds siphoned to these accounts. As part of his scheme, Murphy submitted Forms W-4 to his employers vastly overstating his withholding allowances, so as to minimize or eliminate tax withholdings from his wages. Murphy admitted that he intended to cause the U.S. Treasury a loss exceeding $200,000.

 

After accepting the plea, Judge Benson sentenced Stephen Murphy to two years imprisonment and one year of supervised release. Murphy was also ordered to pay restitution to the IRS in the amount of $83,831.

 

This case was investigated by IRS - Criminal Investigation and was prosecuted by Assistant U.S. Attorney Stewart Waltz in the Utah U.S. Attorney’s Office and Trial Attorneys Joseph A. Rillotta and Christopher P. O’Donnell of the Justice Department’s Tax Division.

 

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

American pharmaceutical company Merck, Sharp & Dohme was sentenced by U.S. District Court Judge Patti B. Saris in Boston to pay a criminal fine in the amount of $321,636,000 in connection with its guilty plea related to its promotion and marketing of the painkiller Vioxx (rofecoxib), the Justice Department announced today. In December 2011, Merck pleaded guilty to violating the Food, Drug and Cosmetic Act (FDCA) for introducing a misbranded drug, Vioxx, into interstate commerce.

 

Merck’s guilty plea was part of a global resolution involving its illegal promotional activity. In November 2011, Merck entered into a civil settlement agreement under which it will pay $628,364,000 to resolve additional allegations regarding off-label marketing of Vioxx and false statements about the drug’s cardiovascular safety.  Of the total civil settlement, $426,389,000 will be recovered by the United States, and the remaining share of $201,975,000 will be distributed to the participating Medicaid states. The settlement and today’s sentencing conclude a long-running investigation of Merck’s promotion of Vioxx, which was withdrawn from the marketplace in September 2004.

 

Merck’s criminal plea related to the misbranding of Vioxx by promoting the drug for treating rheumatoid arthritis, before that use was approved by the Food and Drug Administration (FDA). Under the provisions of the FDCA, a company is required to specify the intended uses of a product in its new drug application to FDA. Once approved, the drug may not be marketed or promoted for so-called “off-label” uses – any use not specified in an application and approved by FDA – unless the company applies to the FDA for approval of the additional use. The FDA approved Vioxx for three indications in May 1999, but did not approve its use for rheumatoid arthritis until April 2002. In the interim, for nearly three years, Merck promoted Vioxx for rheumatoid arthritis, conduct for which it was admonished in an FDA warning letter issued in September 2001.

 

At today’s sentencing, Judge Saris said in substance that off label promotion has been a big problem, she has seen a barrage of off-label marketing cases, and that she hoped that the size of today’s settlement and the fact that the government continues to press these cases will send a signal to the industry that this is not acceptable conduct.

 

The parallel civil settlement covered a broader range of allegedly illegal conduct by Merck. The settlement resolved allegations that Merck representatives made inaccurate, unsupported, or misleading statements about Vioxx’s cardiovascular safety in order to increase sales of the drug, resulting in payments by the federal government. It also resolved allegations that Merck made false statements to state Medicaid agencies about the cardiovascular safety of Vioxx, and that those agencies relied on Merck’s false claims in making payment decisions about the drug. Finally, like the criminal plea, the civil settlement also recovered damages for allegedly false claims caused by Merck’s unlawful promotion of Vioxx for rheumatoid arthritis.

 

"The United States will not tolerate unlawful conduct by pharmaceutical companies," said Stuart F. Delery, Acting Assistant Attorney General for the Justice Department's Civil Division. "As the court's sentence makes clear, those who put profits before patient safety by promoting their products for unapproved uses will be prosecuted and held accountable."

 

“We are pleased to see this case brought to a conclusion with the recovery of over three hundred million dollars in criminal fines, and a total of almost a billion dollars in combined civil and criminal penalties.  The severity of these criminal and civil sanctions should serve as a reminder of this Office, and this department’s unwavering commitment to holding drug companies fully accountable for failures to comply with their public safety and marketing obligations, and to recovering taxpayer funds that have gone towards the purchase of illegally marketed products,” announced Carmen M. Ortiz, U.S. Attorney for the District of Massachusetts. “Any marketing activity that ignores the importance of FDA approval, or that makes unsupported safety claims about a drug is unacceptable, and will be pursued vigorously in both the criminal and civil arena.”

As part of the settlement, Merck also agreed to enter into an expansive corporate integrity agreement with the Office of Inspector General of the Department of Health and

Human Services (HHS-OIG), which will strengthen the system of reviews and oversight procedures imposed on the company. Although Vioxx is no longer on the market, this ongoing monitoring of Merck’s conduct is aimed to deter and detect similar conduct in the future.

 

“If all pharmaceutical manufacturers complied with the law, there would be no need for law enforcement actions,” said Susan Waddell, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services. “But until they stop abusing the health care system and putting profits ahead of patient safety, OIG will continue to vigorously pursue corporations that flout the law.”

 

“Today’s announcement demonstrates the commitment of FDA's Office of Criminal Investigations to pursue investigations of companies that disregard their regulatory obligations and place profits over the public’s health,” said Mark Dragonetti, Special Agent in Charge for the New York Field Office. “We commend the hard work of the U.S. Attorney's Office and our law enforcement counterparts in bringing about this result.”  

“In 2004, the FBI began participating in a seven year investigation that led to Merck's decision to plead guilty to a criminal violation of federal law related to its promotion and marketing of Vioxx and to pay nearly a billion dollars in a criminal fine and civil damages,” said Richard DesLauriers, Special Agent in Charge of the FBI in Boston. “Merck now knows that no corporation is immune from being held accountable for criminal and civil violations of law and also knows why the FBI, its federal law enforcement partners, and the U.S. Attorney's Office have earned a national reputation for leading the government’s effort to detect, deter and prevent health care fraud.”

 

This case was handled by the Justice Department’s Civil Division and the U.S. Attorney’s Office for the District of Massachusetts. The investigation was conducted by Office of Inspector General of the Deapartment of Health and Human Services, the FBI, the Office of Criminal Investigations for the FDA, the Veterans Administration’s Office of Criminal Investigations, the Office of the Inspector General for the Office of Personnel Management, the National Association of Medicaid Fraud Control Units, and the offices of various state attorneys general.

Attorney General Eric Holder and Dominican Prosecutor General Radhamés Jiménez Peña met today in Washington, D.C., to sign a permanent agreement to share forfeited assets between the governments of the United States and the Dominican Republic. The permanent sharing agreement acknowledges the consistent forfeiture-related cooperation that United States authorities have received from the Dominican Republic and creates a more efficient process for sharing assets with the Dominican Republic.

 

“The steady stream of forfeiture cooperation we receive from our Dominican law enforcement counterparts has been indispensible to our efforts to recover millions of dollars in criminal assets located abroad,” Attorney General Holder said. “In a world where criminals increasingly operate across borders, strengthening international partnerships is critical. Today’s agreement will serve as a highly beneficial and useful tool for asset sharing in the future.”

 

The permanent agreement requires the United States and the Dominican Republic to return all fraud and theft proceeds for purposes of making victims whole. It also streamlines the asset sharing process by eliminating the need for individual agreements each time assets are shared in recognition of forfeiture assistance provided by the Dominican authorities. In addition, the agreement is reciprocal, allowing for Dominican sharing with the United States.

 

Assets shared under the agreement must be used by the recipient country in accordance with domestic laws governing the use of forfeited assets. Dominican law provides that forfeited assets be disbursed to the Office of the Prosecutor General; the National Drug Council; the National Counter Drug Directorate; the National Police; and non-government organizations engaged in efforts to prevent drug abuse.

 

To date, the Department of Justice has shared a total of $8.67 million in forfeited assets with Dominican authorities on four prior occasions since 2002. This includes a case-specific sharing agreement that was signed on Nov. 14, 2011, to share approximately $7.5 million in forfeited assets with the Dominican Office of the Prosecutor General. The November 2011 agreement represents approximately 20 percent of the estimated $37.5 million in forfeited assets located in the Dominican Republic that stem from a conspiracy led by brothers Carlos, Luis and Jose Benitez, who allegedly defrauded the U.S. Medicare program of approximately $80 million.

 

The permanent agreement was negotiated on behalf of the United States by the Asset Forfeiture and Money Laundering Section’s International Unit in the Justice

Department’s Criminal Division and the Office of International Affairs in the Justice Department’s Criminal Division, in cooperation with the FBI’s Attaché in the Dominican Republic and the Department of State.

The United States has asked a federal court to bar three Philadelphia-area tax preparers from preparing federal tax returns for others, the Justice Department announced today. According to the government complaint in the civil injunction suit, defendants Deron Joe, Edmund Dassin and James Tokpawhiea are Liberian nationals who are legal permanent residents of the United States. The suit alleges that most of the customers of their business, Urban Tax Professionals, are also from Liberia and were referred to the defendants by family or friends.

 

According to the complaint, the defendants have repeatedly prepared fraudulent federal income tax returns that intentionally understate their customers’ tax liabilities. They are alleged to have falsely claimed the first-time-homebuyer credit and the earned-income tax credit in order to claim large tax refunds. According to the complaint, Joe and Dassin told one of their employees to claim the first-time-homebuyer credit on every return he prepared. The complaint also alleges that the defendants claimed false dependents and fabricated deductions for employee business expenses.

 

The complaint states that the Internal Revenue Service (IRS) has disallowed at least $1.4 million in tax credits claimed by the defendants on customer returns.

 

Claiming bogus tax refunds 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 return preparers. Information about these cases is available on the Justice Department website.

Related Documents: United States v. Deron O. Joe, et al. Complaint for Permanent Injunction and Other Relief