District Not Recorded

WASHINGTON – A federal court in Providence, R.I., has ordered that Michael Brier, the owner of the tax return preparation firm Refunds Now Inc., and his employees, Jeffrey Sroufe, Esther Santiago and Carmen Miranda, be permanently barred from preparing federal income tax returns for others, the Justice Department announced today. The permanent injunction order, to which the four individuals consented, applies to them personally and doing business under the names Refunds Now Inc., RNTS Inc., FTIRS Inc., POTIRS Inc. and IHIRS Inc.

 

In November 2010 the court entered a preliminary injunction against Brier, Sroufe and Santiago after finding that at least 300 tax returns prepared by Brier and Refunds Now understated customers’ tax liabilities and that Brier and his employees fabricated tax deductions and credits on the returns. The court also noted that a Refunds Now employee had offered to provide one of Brier’s customers with fake receipts in order to substantiate amounts reported on the customer’s tax return.

 

According to the court, Brier and his employees prepared approximately 24,000 federal income tax returns between 2003 and 2007. The court found that the Internal Revenue Service examined 350 of those returns and determined that 92 percent of them required adjustments, resulting in a government-estimated loss of more than $1.1 million in tax revenue based on the examined returns.

 

The court’s permanent injunction order requires Brier, Sroufe and Santiago to mail a copy of the order to all customers for whom they have prepared tax returns since Jan. 1, 2004. The order additionally requires Brier to remove or cover all exterior signs at 381 Wickenden Street in Providence indicating that tax preparation service is offered there and to post a copy of the court’s order at the front and back entrances of that address.

 

Since 2001, the Justice Department’s Tax Division has obtained hundreds of injunctions to stop the promotion of tax-fraud schemes and the preparation of false tax returns. More information about these cases can be found at the Tax Division’s website .

WASHINGTON - Treinta y cinco miembros y asociados de la pandilla Barrio Azteca (BA) fueron acusados en una tercera acusación formal sobreviviente revelada hoy de diversos cargos de asociación ilícita, homicidio, delitos asociados a drogas, lavado de dinero y obstrucción de la justicia, anunció el Secretario de Justicia de los Estados Unidos Eric Holder. De los 35 demandados, 10 ciudadanos mexicanos fueron acusados de los asesinatos del 13 de marzo de 2010 en Juárez, México, de la empleada del Consulado de EE.UU. Leslie Ann Enríquez Catton, su esposo Arthur Redelfs, y Jorge Alberto Salcido Ceniceros, el marido de una empleada del Consulado de EE.UU.

Acompañaron al Secretario de Justicia de EE.UU. Holder en el anuncio de los cargos el Secretario de Justicia Auxiliar Lanny A. Breuer de la División de lo Penal, el Fiscal Federal John E. Murphy para el Distrito Oeste de Texas, el Director Auxiliar Ejecutivo del Buró Federal de Investigaciones [Federal Bureau of Investigation (FBI)] Shawn Henry y la Administradora Michele Leonhart de la Administración de Control de Drogas de EE.UU. [U.S. Drug Enforcement Administration (DEA)].

Hoy, equipos de autoridades federales, estatales y locales estadounidenses arrestaron en Texas y Nuevo México a 12 de los demandados acusados aún sin detener. Siete de los 10 demandados acusados de los homicidios del 13 de marzo de 2010 y otros dos demandados contra los que se formularon cargos se encuentran detenidos en México. Las autoridades de EE.UU. están trabajando con las autoridades mexicanas en la extradición y otros asuntos relacionados con este enjuiciamiento en curso.

"La acusación formal revelada hoy representa nuestra acción continua para garantizar la seguridad a lo largo de nuestra frontera sudoeste, obtener justicia para las víctimas de delitos violentos en esta región y debilitar a organizaciones delictivas peligrosas que operan actualmente en México y los Estados Unidos", dijo el Secretario de Justicia de los Estados Unidos Holder. "Estos arrestos y cargos criminales desmantelarán las operaciones actuales de Barrio Azteca, y reafirman que no toleraremos actos de violencia contra quienes sirven y protegen a los ciudadanos estadounidenses. Seguiremos trabajando con nuestros asociados en México y, juntos, incrementaremos nuestra labor conjunta sin precedentes para combatir la violencia y proteger a los pueblos estadounidense y mexicano".

"La acusación formal revelada hoy ofrece un panorama escalofriante de una pandilla altamente organizada y extremamente brutal", dijo el Secretario de Justicia Auxiliar Breuer. "Las víctimas, como tantas otras víctimas de las guerras mexicanas del narcotráfico, se encontraron, totalmente sin sentido, en el blanco de mira de una violenta empresa criminal". Se trata, a veces, de una batalla macabra. Pero que no queden dudas: dedicaremos toda nuestra fuerza a llevar a Barrio Azteca y otras pandillas ante la justicia por sus actos de violencia e intimidación a lo largo de nuestra frontera".

"Los crueles asesinatos de Leslie Enríquez, su marido Arthur Redelfs, y Jorge Salcido ilustran cuán insensata se ha vuelto la violencia cometida por los cárteles de narcotráfico y sus pandillas delictivas afiliadas", dijo el Fiscal Federal Murphy. "Acompañamos en su dolor a las familias de estas tres inocentes víctimas, así como a las miles de otras que han sufrido pérdidas trágicas para las que no hay reparación. La acusación formal es un reflejo de nuestra determinación de perseguir enérgicamente a los responsables por estos actos injustificables y hacerlos pagar por sus actos bajo el imperio de la ley".

"La violencia trasfronteriza es una amenaza grave para cuya prevención y eliminación estamos utilizando el poder de las asociaciones", dijo el Director Auxiliar Ejecutivo del FBI Henry. "Junto con nuestros otros homólogos de las fuerzas del orden público federales, estatales y locales, estamos especialmente agradecidos a nuestras dependencias mexicanas asociadas por el apoyo crítico que brindaron para ayudar a resolver este caso y hacer con que los autores de estos delitos deban enfrentar a la justicia. Podemos estar en lados opuestos de la frontera, pero estamos del mismo lado de la ley".

"Los miembros de la pandilla Barrio Azteca son delincuentes con sangre fría sin ningún respeto por la ley o la justicia, y que asesinan a víctimas inocentes, trafican drogas e incitan a la violencia", dijo la Administradora de la DEA Leonhart. "Sin embargo, junto con nuestros asociados del FBI y el apoyo del gobierno de México, hemos demostrado que el imperio de la ley prevalecerá, y trabajando juntos enjuiciaremos a esos individuos para que paguen por sus actividades delictivas despiadadas".

La acusación formal alega que los demandados son miembros o asociados de la BA, la que comenzó a fines de la década de 1980 como una pandilla violenta de prisión, ampliándose hasta convertirse en una organización criminal transnacional. La BA está sedeada, principalmente, en el Oeste de Texas; Juárez, México; y en prisiones estatales y federales en los Estados Unidos y México. La pandilla cuenta con una estructura de comando militarista e incluye capitanes, tenientes, sargentos y soldados - todo con la finalidad de mantener el poder y enriquecer a sus miembros y asociados a través del narcotráfico, el lavado de dinero, la extorsión, la intimidación, la violencia, amenazas de violencia y asesinato.

La acusación formal alega que, para incrementar su poder e influencia, la BA formó una alianza con la organización de narcotráfico Vicente Carrillo-Fuentes (VCF) en México. Como parte de esta alianza, se alega que la BA conduce operaciones de coacción contra rivales de la VCF y que la VCF provee drogas ilegales a la BA a precios con descuento.

La acusación formal alega una infinidad de actividades criminales cometidas por miembros y asociados de la BA desde el 1º de enero de 2003, incluidos narcotráfico, extorsión, lavado de dinero, secuestro y asesinato, incluidos los del 13 de marzo de 2010 en el consulado en Juárez.

Específicamente, la acusación formal alega que, el 13 de marzo de 2010, Ricardo Valles de la Rosa llamó a un individuo en el Distrito Oeste de Texas y recibió verificación de la descripción de una persona a ser asesinada. La acusación formal alega que 10 miembros de la BA nombrados, entre otros, participaron en los homicidios de Enríquez, Redelfs y Salcido en Juárez.

José Antonio Acosta Hernández, alias “Diego”; Eduardo Ravelo, alias “Tablas”; Luis Méndez, alias “Alex”; Arturo Gallegos Castrellon, alias “Benny”; Ricardo Valles de la Rosa, alias “Chino”; José Guadalupe Díaz Díaz, alias “Zorro”; Martin Pérez Marrufo, alias “Popeye”; Luis Humberto Hernández Celis, alias “Pac”; Miguel Ángel Nevarez, alias “Lentes”; y Enrique Guajardo López, alias “Kiki” están imputados en la acusación formal con conspiración para matar personas en un país extranjero, homicidio resultante del uso y portación de un arma de fuego y homicidio con la finalidad de cometer delincuencia organizada por su supuesta participación en el homicidio de Enríquez, Redelfs y Salcido.

Hernández, Ravelo y Méndez se encuentran actualmente fugitivos. Los Estados Unidos han presentado órdenes de arresto provisionales al gobierno de México para la detención de estos hombres en conexión con este caso. Ravelo es actualmente uno de los Diez Fugitivos Más Buscados del FBI, y el FBI está ofreciendo una recompensa de hasta $100,000 por información que lleve directamente a su arresto.

Además de los homicidios del consulado, la acusación formal alega que, en diciembre de 2006, un miembro de la BA baleó y mató a José Luis Oviedo en El Paso. En 2007, se alega que miembros de la BA secuestraron a un hombre en El Paso y lo llevaron al otro lado de la frontera entre EE.UU. y México, a la ciudad de Juárez. En marzo de 2008, se alega que la BA ordenó el homicidio del miembro de la BA David Merez, quien fue asesinado ese mismo mes en Juárez. Asimismo, la acusación formal alega que la BA hizo que dos personas fueran baleadas y asesinadas en Socorro, Texas, el 2 de julio de 2009. En agosto de 2010, alega la acusación formal que miembros de la BA secuestraron a la esposa y padres de un miembro de la BA quien creían estar cooperando con las fuerzas del orden público de EE.UU. y también mataron a la hijastra del miembro de la BA.

De acuerdo con la acusación formal, la BA obtiene ganancias a través de la importación de México a los Estados Unidos de heroína, cocaína y marihuana. La acusación formal señala actos específicos en los que más de 8 kilos de heroína, más de 100 kilos de cocaína y casi 300 libras de marihuana están asociados a la posesión, distribución o importación de sustancias controladas a los Estados Unidos.

También se alega que miembros y asociados de la BA cobran un "impuesto callejero" o "cuota" a empresas y delincuentes que operan en su territorio. Estas ganancias son utilizadas para mantener a los miembros de la BA que se encuentran en prisión al encauzar dinero a cuentas de tiendas de prisiones de líderes de pandillas y para pagar por abogados de defensa o multas. También se alega que las ganancias provenientes de las "cuotas" se reinvierten en la organización para la compra de drogas, armas y municiones.

Si se los condena, los demandados enfrentan una variedad de penas máximas por cargo, incluida prisión perpetua.

Una acusación formal es apenas una acusación. Se supone que todos los demandados son inocentes hasta que se pruebe lo contrario en un juicio, más allá de la duda razonable.

Están a cargo de la acusación en este caso los Abogados Litigantes Joseph A. Cooley de la Unidad de Pandillas de la División de lo Penal, el Abogado Litigante Brian Skaret de la Sección de Derechos Humanos y Enjuiciamientos Especiales de la División de lo Penal y fiscales de la Fiscalía Federal para el Distrito Oeste de Texas. La Fiscalía Federal para el Distrito de Nuevo México brindó importante asistencia en este caso, incluida la Fiscal Federal Auxiliar Sarah Davenport. Las Oficinas de Asuntos Internacionales y Operaciones de Coacción de la División de lo Penal brindaron asistencia valiosa. Las autoridades de las fuerzas del orden público estadounidenses y mexicanas, incluidas la Procuraduría General de la República (PGR) y la Policía Federal (Secretaría de Seguridad Pública o SSP) mexicanas cooperaron y brindaron asistencia recíproca en este caso en curso.

El caso fue investigado por el FBI y la DEA. Brindaron asistencia especial el Buró de Alcohol, Tabaco, Armas de Fuego y Explosivos; el Servicio de Inmigración y Control de Aduanas; el Servicio de Alguaciles Federales; Control de Aduanas y Protección de Fronteras de EE.UU.; el Buró Federal de Prisiones; el Servicio de Seguridad Diplomática de EE.UU.; el Departamento de Seguridad Pública de Texas; el Departamento de Justicia Penal de Texas; el Departamento de Policía de El Paso; la Oficina del Alguacil del Condado de El Paso; el Departamento de Policía del Distrito Escolar Independiente de El Paso; la Comisión de Alcohol y Bebidas de Texas; el Área de Alta Intensidad de Narcotráfico del Oeste de Texas; el Servicio de Libertad Condicional de EE.UU.; la Policía del Estado de Nuevo México; la Oficina del Alguacil del Condado de Dona Ana, N.M.; el Departamento de Policía de Las Cruces, N.M.; el Establecimiento Correccional del Sur de Nuevo México y la Prisión del Condado de Otero, N.M.

WASHINGTON – Thirty-five members and associates of the Barrio Azteca (BA) gang have been charged in a third superseding indictment unsealed today with various counts of racketeering, murder, drug offenses, money laundering and obstruction of justice, announced Attorney General Eric Holder. Of the 35 defendants, 10 Mexican nationals were charged with the March 13, 2010, murders in Juarez, Mexico, of U.S. Consulate employee Leslie Ann Enriquez Catton, her husband Arthur Redelfs and Jorge Alberto Salcido Ceniceros, the husband of a U.S. Consulate employee.

 

Attorney General Holder was joined in announcing the charges by Assistant Attorney General Lanny A. Breuer of the Criminal Division, U.S. Attorney John E. Murphy for the Western District of Texas, FBI Executive Assistant Director Shawn Henry and Administrator Michele Leonhart of the U.S. Drug Enforcement Administration (DEA).

 

Today, teams of U.S. federal, state and local authorities arrested in Texas and New Mexico 12 of the charged defendants not already in custody. Seven of the 10 defendants charged with the March 13, 2010, murders, and two other indicted defendants, are in custody in Mexico. U.S. authorities are working with Mexican authorities regarding extradition and other matters related to this ongoing prosecution.

 

“The indictment unsealed today represents our continued action to ensure safety along our Southwest border, to seek justice for victims of violent crime in this region, and to weaken dangerous criminal organizations currently operating in Mexico and the United States,” said Attorney General Holder. “These arrests and criminal charges will disrupt Barrio Azteca’s current operations, and they reaffirm that we will not tolerate acts of violence against those who serve and protect American citizens. We will continue to stand with our partners in Mexico, and together, build on our unprecedented joint efforts to combat violence and protect the safety of the American and the Mexican people.”

 

“The indictment unsealed today offers a chilling picture of a highly organized, and extremely brutal gang,” said Assistant Attorney General Breuer.  “The victims – like so many other victims of the Mexican drug wars – were senselessly caught in the crosshairs of a violent criminal enterprise. This is, at times, a gruesome battle.  But let there be no mistake:  we will devote our might to bringing Barrio Azteca and other gangs to justice for their acts of violence and intimidation along our border.”

“The vicious murders of Leslie Enriquez, her husband Arthur Redelfs, and Jorge Salcido illustrate how senseless the violence perpetrated by the drug cartels and their affiliated criminal gangs has become,” said U.S. Attorney Murphy.  “Our hearts go out to the families of these three innocent victims, as well as thousands of others, who have suffered tragic losses for which there can be no reparation. The indictment reflects our resolve to vigorously pursue those responsible for these wanton acts and hold them accountable under the rule of law.”

“Trans-border violence is a serious threat that we are using the power of partnerships to combat and prevent,” said FBI Executive Assistant Director Henry. “Along with our other federal, state and local law enforcement counterparts, we are especially grateful to our Mexican partner agencies for the critical support they provided to help resolve this case and bring the subjects to justice. We may stand on opposite sides of the border, but we stand together on the same side of the law.”

 

“Barrio Azteca gang members are cold blooded criminals who show no respect for the law or justice , murdering innocent victims, trafficking drugs and inciting violence,” said DEA Administrator Leonhart. “But, along with our FBI partners and the support of the government of Mexico, we have shown that the rule of law will prevail, and working together we will bring these individuals to justice to answer for their ruthless criminal activities.”

 

The indictment alleges that the defendants are members or associates of the BA, which began in the late 1980s as a violent prison gang and has expanded into a transnational criminal organization. The BA is primarily based in West Texas; Juarez, Mexico; and throughout state and federal prisons in the United States and Mexico. The gang has a militaristic command structure and includes captains, lieutenants, sergeants and soldiers – all with the purpose of maintaining power and enriching its members and associates through drug trafficking, money laundering, extortion, intimidation, violence, threats of violence and murder.

 

The indictment alleges that to increase its power and influence, the BA formed an alliance with the Vicente Carrillo-Fuentes (VCF) drug trafficking organization in Mexico. As part of this alliance, the BA allegedly conducts enforcement operations against VCF rivals and the VCF provides illegal drugs to the BA at discounted prices.

 

The indictment alleges a host of criminal activity committed by members and associates of the BA since Jan. 1, 2003, including drug trafficking, extortion, money laundering, kidnapping and murder, including the March 13, 2010, consulate murders in Juarez.

 

Specifically, the indictment alleges that on March 13, 2010, Ricardo Valles de la Rosa called an individual in the Western District of Texas and received verification of the description of an intended target for murder. The indictment alleges that 10 named BA members, among others, participated in the murders of Enriquez, Redelfs and Salcido in Juarez.

 

Jose Antonio Acosta Hernandez, aka “Diego”; Eduardo Ravelo, aka “Tablas”; Luis Mendez, aka “Alex”; Arturo Gallegos Castrellon, aka “Benny”; Ricardo Valles de la Rosa, aka “Chino”; Jose Guadalupe Diaz Diaz, aka “Zorro”; Martin Perez Marrufo, aka “Popeye”; Luis Humberto Hernandez Celis, aka “Pac”; Miguel Angel Nevarez, aka “Lentes”; and Enrique Guajardo Lopez, aka “Kiki” are charged in the indictment with conspiracy to kill persons in a foreign country, murder resulting from the use and carrying of a firearm and murder in aid of racketeering for their alleged participation in the murder of Enriquez, Redelfs and Salcido.

 

Hernandez, Ravelo and Mendez are currently at large. The United States has filed provisional arrest warrants with the government of Mexico for the arrest of these men in connection with this case. Ravelo is currently one of the FBI’s Top Ten Most Wanted Fugitives, and the FBI is offering a reward of up to $100,000 for information leading directly to his arrest.

 

In addition to the consulate murders, the indictment alleges that in December 2006, a BA member shot and killed Jose Luis Oviedo in El Paso. In 2007, BA members allegedly kidnapped a man in El Paso and took him across the U.S./Mexico border to Juarez. In March 2008, the BA allegedly ordered the murder of BA member David Merez, who was killed that same month in Juarez. The indictment also alleges that the BA caused two persons to be shot and killed in Socorro, Texas, on July 2, 2009. In August 2010, the indictment alleges that BA members kidnapped the wife and parents of a BA member whom they believed was cooperating with U.S. law enforcement and also killed the BA member’s step-daughter.

 

According to the indictment, the BA profits by importing heroin, cocaine and marijuana into the United States from Mexico. The indictment points to specific acts in which more than 8 kilos of heroin, more than 100 kilograms of cocaine, and nearly 300 pounds of marijuana are associated with the possession, distribution or importation of controlled substances into the United States.

 

BA members and associates also allegedly charge a “street tax” or “cuota” on businesses and criminals operating in their turf. These profits are used to support BA members in prison by funneling money into prison commissary accounts of gang leaders and to pay for defense lawyers or fines. The “cuota” profits are also allegedly reinvested into the organization to purchase drugs, guns and ammunition.

If convicted, the defendants face a variety of maximum penalties per charge, including up to life in prison.

 

An indictment is merely an accusation. All defendants are presumed innocent until proven guilty at trial beyond a reasonable doubt.

 

The case is being prosecuted by Trial Attorneys Joseph A. Cooley of the Criminal Division’s Gang Unit, Trial Attorney Brian Skaret of the Criminal Division’s Human Rights and Special Prosecutions Section and prosecutors from the U.S. Attorney’s Office for the Western District of Texas. The U.S. Attorney’s Office for the District of New Mexico provided significant assistance in this case, including Assistant U.S. Attorney Sarah Davenport. Valuable assistance was provided by the Criminal Division’s Offices of International Affairs and Enforcement Operations. U.S. and Mexican law enforcement authorities, including the Mexican Attorney General’s Office ( Procuradura General de la República or PGR) and the Mexican Federal Police (Secretaría de Seguridad Pública or SSP) have cooperated and provided assistance to one another in this ongoing matter.

 

The case was investigated by the FBI and the DEA. Special assistance was provided by the Bureau of Alcohol, Tobacco, Firearms and Explosives; Immigration and Customs Enforcement; the U.S. Marshals Service; U.S. Customs and Border Protection; the Federal Bureau of Prisons; U.S. Diplomatic Security Service; the Texas Department of Public Safety; the Texas Department of Criminal Justice; El Paso Police Department; El Paso County Sheriff’s Office; El Paso Independent School District Police Department; Texas Alcohol and Beverage Commission; the West Texas High Intensity Drug Trafficking Area; U.S. Probation Service; New Mexico State Police; Dona Ana County, N.M., Sheriff’s Office; Las Cruces, N.M., Police Department; Southern New Mexico Correctional Facility and Otero County, N.M., Prison Facility.

WASHINGTON – Puerto Rico Senator Hector Martinez Maldonado and Juan Bravo Fernandez, the former president of one of the largest private security companies in Puerto Rico, were convicted by a jury in San Juan, Puerto Rico, for their roles in a bribery scheme involving legislation beneficial to Bravo Fernandez’ business, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division.

 

Martinez Maldonado , 42, of Carolina, Puerto Rico, and Bravo Fernandez, 55, of San Juan, were each convicted late yesterday of federal program bribery. In addition, Bravo Fernandez was convicted of traveling in interstate commerce in aid of racketeering and conspiracy to commit to travel in interstate commerce in aid of racketeering. Martinez Maldonado was acquitted of conspiracy, traveling in interstate commerce in aid of racketeering and obstruction of justice.

 

“ By participating in a brazen scheme involving the exchange of cash and lavish trips for votes and official acts, these defendants subverted the democratic process,” said Assistant Attorney General Breuer. “Now they are seeing the consequences. As these convictions show, the Justice Department is committed to investigating and prosecuting public corruption wherever we find it.”

 

“Corruption relies on connections, forcing businessmen to forge questionable relationships with government officials, who facilitate their requests and grant them favors.  This corrupt behavior, ingrained so deeply in the Puerto Rican government's fabric, allows money and power to become one.  Law abiding citizens must denounce those dishonest government officials in order to weed out corruption from our society,” said Luis Fraticelli, Special Agent in Charge of the FBI-San Juan Field Office.

 

Martinez Maldonado was elected to the Puerto Rican Senate in 2004 and began serving a four-year term in January 2005. He was reelected in 2008. Bravo Fernandez was the president and chief executive officer of Ranger American, one of the largest private security firms in Puerto Rico.

 

The jury convicted the defendants for their role in a bribery scheme in which Bravo Fernandez conspired to secure the passage of two bills favorable to his business interests by bribing Martinez Maldonado and Jorge de Castro Font, a former Puerto Rican senator. De Castro Font served in the Puerto Rico House of Representatives from 1989 to 2004, and served in the Puerto Rico Senate from 2005 to 2008. Beginning in 2005, De Castro Font served as Chairman of the Committee on Rules and Calendars, exercising significant control over which bills, confirmations and other matters were brought to a vote on the floor of the Senate and when they were brought to a vote. Beginning in 2005, Martinez Maldonado served as Chairman of the Puerto Rico Public Safety Committee, exercising significant control over legislation related to the security and community safety.

 

According to court documents and evidence presented at trial, Martinez Maldonado and De Castro Font exercised significant control over the fate of the legislation benefitting Bravo Fernandez’ business interests. Specifically, Martinez Maldonado’s committee had jurisdiction over Bravo Fernandez’ two bills and was required to approve the legislation before De Castro Font could schedule them for a vote before the entire Senate. Evidence at trial showed that in order to secure passage of the two bills, Martinez Maldonado and De Castro Font made an agreement with Bravo Fernandez to take official acts supporting the legislation benefitting his business interests in exchange for things of value provided by Bravo Fernandez. Specifically, Bravo Fernandez provided numerous cash payments to De Castro Font.

 

According to court documents and evidence presented at trial, Bravo Fernandez also agreed to provide to Martinez Maldonado and De Castro Font a trip to Las Vegas to watch the May 14, 2005, championship boxing match between Winky Wright and Felix “Tito” Trinidad, a popular Puerto Rican boxer. As part of this agreement, Bravo Fernandez provided, among other things, first-class airfare, hotel rooms at the Mandalay Bay Resort and Casino, tickets to the Trinidad vs. Wright boxing match worth $1,000, hotel rooms in Miami for the return trip, as well as meals and drinks. Evidence at trial showed that on March 2, 2005, the day that Bravo Fernandez paid for the boxing tickets, Martinez Maldonado submitted one of the bills for consideration by the Puerto Rico Senate. Also, on April 21, 2005, Bravo Fernandez used his personal credit card to reserve a hotel room at the Mandalay Bay Resort and Casino. The deposit for this hotel room was credited to Martinez Maldonado’s hotel room. According to court documents, the reservation was made the day after Martinez Maldonado presided over a Public Safety Committee hearing for one of the two bills at which Bravo Fernandez was the only representative from the private security industry to testify. Martinez Maldonado authorized a committee report in support of Bravo Fernandez’ bill immediately after the hearing. According to evidence at trial, on May 17, 2005, the day after the three men returned from their trip to Las Vegas, Martinez Maldonado and De Castro Font both cast their vote in support of one of Bravo Fernandez’ bills in front of the entire Puerto Rico Senate. On May 18, 2005, the other bill was approved by the Puerto Rico Public Safety Committee, Chaired by Martinez Maldonado. That bill was passed by the Puerto Rico Senate on May 23, 2005.

 

De Castro Font pleaded guilty on Jan. 21, 2009, to 20 counts of honest services wire fraud and one count of conspiracy to commit extortion. He is currently awaiting sentencing.

 

Bravo Fernandez faces a maximum penalty of five years in prison and a $250,000 fine for each count of conspiracy and travel in aid of racketeering and 10 years in prison and a $250,000 fine for the bribery count. Martinez Maldonado faces a maximum penalty of 10 years in prison and a $250,000 fine for the bribery count.  Sentencing has been scheduled for June 7, 2011.

This case is being prosecuted by Trial Attorneys Peter Koski and Deborah Sue Mayer of the Criminal Division’s Public Integrity Section. The case is being investigated by the FBI.

WASHINGTON – American Education and Travel Services Inc. (AETS) in Antioch, Calif., has agreed to pay $10,000 in back pay and compensatory damages to a lawful permanent resident who was denied a residential counselor position because he was not a U.S. citizen or native English speaker, the Justice Department announced today. 

 

The settlement agreement was jointly negotiated by the department and the Equal Employment Opportunity Commission (EEOC).  The underlying charge alleged that AETS violated both the anti-discrimination provision of the Immigration and Nationality Act (INA) and Title VII of the Civil Rights Act of 1964, as amended.  In addition to monetary relief for the victim, the agreement requires AETS to provide its managers and employees training on the anti-discrimination requirements of both the INA and Title VII, adopt nondiscrimination policies with respect to recruitment and hiring, and maintain and submit records to the United States for the two-year term of the agreement.

 

“Federal law protects authorized workers discrimination based on unlawful citizenship requirements,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division.  “The Justice Department is committed to working with the EEOC to eliminate this kind of discrimination.” 

 

The Office of Special Counsel for Immigration-Related Unfair Employment Practices (OSC) is responsible for enforcing the anti-discrimination provision of the INA, which prohibits employers from discriminating against work-authorized individuals on the basis of citizenship status or national origin in hiring, firing, recruitment or referral for a fee.

For more information about protections against employment discrimination under federal immigration law, call OSC’s worker hotline at 1-800-255-7688 (1-800-237-2525, TDD for hearing impaired), OSC’s employer hotline at 1-800-255-8255 (1-800-362-2735, TDD for hearing impaired), or 202-616-5594; email [email protected] ; or visit the website at www.justice/gov/crt/osc .

 

WASHINGTON – The owners and operators of Summerhill Place Apartments, a 268 apartment complex in Renton, Wash., have agreed to pay $110,000 in damages and civil penalties to settle a lawsuit alleging that the complex had discriminated against African-Americans, Hispanic Americans, Indian Americans and families with children in violation of the Fair Housing Act, the Justice Department announced today.   The settlement must still be approved by the U.S. District Court for the Western District of Washington.

           

“Working families already face enough challenges finding affordable housing,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division.  “Unlawful discrimination because of their race, their national origin, or because they have children, should not be one of them.”

           

“I am pleased that this settlement will both assist those who were discriminated against, and ensure rights are protected going forward,” said U.S. Attorney for the Western District of Washington Jenny A. Durkan.  “The fair housing training for Summerhill’s employees and the plan to provide a recreation area for all the tenants, including children, will provide a brighter future for all prospective residents.”

           

The lawsuit, filed on July 16, 2010, named as Summerhill Place LLC (the owner of Summerhill Place Apartments), Gran Inc. (the management company) and Rita Lovejoy (the former on site manager).   Lovejoy is no longer employed by the other defendants.  The suit alleged, among other things, that defendants steered Indian tenants away from one of the five buildings at Summerhill, treated tenants from India less favorably than other tenants and discouraged African-Americans, Hispanics and families with children from living at Summerhill.  The suit arose after the Fair Housing Council of Washington conducted testing at Summerhill, and the results of that testing were reported to the Department of Housing and Urban Development (HUD).  After an investigation, the secretary of HUD determined that there was reasonable cause to believe that discriminatory housing practices had occurred, issued a charge of discrimination, and referred the matter to the Department of Justice. 

           

“HUD has the authority to bring cases under the Fair Housing Act based on any credible evidence that discrimination is occurring at a housing development, even if no specific individual steps forward to file a formal complaint,” said John Trasviña, HUD’s  Assistant Secretary for Fair Housing and Equal Opportunity.  “Whenever HUD discovers that a housing provider is turning away potential tenants or mistreating current residents because of their race, ethnicity, or family composition, HUD will vigorously enforce the Fair Housing Act.”

           

Under the terms of the settlement, the defendants will:  

• Pay $85,000 to tenants and prospective tenants who were harmed by the discriminatory practices alleged in the lawsuit;
• Pay $25,000 to the government as a civil penalty;  
• Maintain a common recreational area for all their tenants, including children;
• Provide fair housing training to their employees; and
• Develop and maintain non-discrimination policies at Summerhill.   

Individuals who are entitled to share in the settlement fund will be identified through a process established in the settlement.  Persons who believe they were subjected to unlawful discrimination at Summerhill should contact the Justice Department toll-free at 1-800-896-7743 mailbox # 9997 or e-mail the Justice Department at [email protected] .

 

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

WASHINGTON - Edward Gurary, formerly of Orange Village, Ohio, pleaded guilty today in federal court in the Northern District of Ohio to filing false personal income tax returns for the years 2004 through 2008, the Justice Department and Internal Revenue Service (IRS) announced. Gurary’s guilty plea was accepted by U.S. District Judge Dan Polster in Cleveland.

 

According to court documents, Gurary, 45, has resided in Switzerland since 2010, but lived in Orange Village during the prosecution years.  Gurary admitted that from approximately 2002 through 2008, he owned and controlled a financial account at UBS AG which was in the name of a Bahamian entity called Demko Ltd. and which contained balances ranging from $490,000 to $947,000. Gurary controlled transactions in the Demko account by sending faxes using a code name “Vanda” to UBS from an OfficeMax store in the Cleveland area rather than his home or business. UBS would in turn send his requests for authorizations to officers of Demko in the Bahamas in order to make it appear that Demko owned and controlled the account. During the prosecution years, interest was paid by UBS into the Demko account, in amounts ranging from $3,400 to more than $21,000, all of which Gurary admitted he failed to report on his tax returns. 

 

According to court documents, Gurary also admitted that for three of the years (2004, 2006 and 2007) he not only failed to report the interest income from his UBS account, but he also falsely stated on his Schedule B attached to his income tax return that he did not have signature or other authority over a foreign financial account. Gurary further admitted that in addition to the account at UBS in Switzerland he also had a foreign financial account with significant assets at Credit Suisse AG. Further, because Gurary did not file any Report of Foreign Bank or Financial Account (FBAR) form or otherwise disclose to the IRS his Demko account at UBS or his Credit Suisse account, he is subject to significant penalties. An FBAR form is a form separate from an income tax return that the law requires taxpayers to file with the IRS every June to disclose additional information about foreign financial accounts over which a taxpayer has signature or other control over, and which had an aggregate value exceeding $10,000 at any time during the year. Gurary agreed to pay a penalty amount of 50 percent of the highest aggregate amount in the two accounts between the years 2002 and 2009, which according to his plea agreement was at least $473,000. At the plea hearing, Gurary tendered a check in the amount of $300,000 made payable to the government and he has agreed to surrender the $200,000 cash bond he already paid on the date of his sentencing. Gurary faces a maximum of three years in prison and a fine of $250,000. Judge Polster scheduled sentencing for June 1, 2011.  

 

The announcement was made by Bruce M. Salad, Acting Deputy Assistant Attorney General for Offshore Matters of the Justice Department’s Tax Division; Steven M. Dettelbach, U.S. Attorney for the Northern District of Ohio; and Jose A. Gonzalez, Special Agent in Charge, IRS-Criminal Investigation, Cincinnati.

 

The case is being prosecuted by Assistant U.S. Attorney John M. Siegel and Tax Division Trial Attorney Richard M. Rolwing, following an investigation by the IRS-Criminal Investigation, Cleveland.

 

Additional information about the Justice Department’s Tax Division and its enforcement efforts may be found at www.usdoj.gov/tax

WASHINGTON – Jamie Paulin Ramirez, 32, a U.S. citizen and former resident of Colorado, pleaded guilty today to one count of conspiracy to provide material support to terrorists. Ramirez faces a potential maximum penalty of 15 years in prison and a $250,000 fine at sentencing.

 

The guilty plea, which was entered today before U.S. District Court Judge Petrese B. Tucker in the Eastern District of Pennsylvania, was announced by Todd Hinnen, acting Assistant Attorney General for National Security; Zane David Memeger, U.S. Attorney for the Eastern District of Pennsylvania; and George C. Venizelos, Special Agent-in-Charge of the FBI’s  Philadelphia Division.

 

Ramirez was first charged in a superseding indictment filed in April 2010, along with co-defendant Colleen R. LaRose, a U.S. citizen and former resident of Montgomery County, Pa. On Feb. 1, 2011, LaRose, aka “JihadJane, aka “Fatima LaRose,” pleaded guilty to conspiracy to provide material support to terrorists, conspiracy to kill in a foreign country, making false statements and attempted identity theft.

 

According to documents filed with the court, Ramirez, LaRose and others conspired to obtain military-style training in South Asia and then traveled to and around Europe to participate in and in support of violent jihad.

 

In a series of electronic communications dated July 19, 2009, one co-conspirator (identified as CC#2 in the superseding indictment) directed another to recruit online “some brothers that can travel freely . . . with eu passports . . . [A]nd I also need some sisters too.” The co-conspirator further explained that “sister fatima will be in charge of other sister care. . . .[W]e have already organized everything for her. . . . [W]e are will[ing] to die in order to protect her no matter what the risk is.”

 

Ramirez exchanged e-mail messages with LaRose during the summer of 2009, in which LaRose invited Ramirez to join her in Europe to attend a training camp. For example, on Aug. 1, 2009, LaRose sent electronic communications to Ramirez stating that “soon i will be moving to Europe to be with other brothers & sisters . . . . when i get to europe, i will send for you to come be with me there . . . . [T]his place will be like a training camp as well as a home.”

 

In electronic communications dated on or about August 7, 2009, CC #2 recruited another individual to find brothers and sisters to go to a “camp for [military-style] training . . . and th[e]n come back to europe to do the job . . . . [T]he job is to [k]nock down some individual[s] that are harming islam.”  CC#2 goes on to explain that he is structuring “an ORGANIZATION” divided into a “plan[n]ing team . . . research team . . . action team . . . recruitment team . . . finance team.”

Ramirez accepted LaRose’s invitation to travel to Europe and asked to bring along her minor male child. On Sept, 12, 2009, Ramirez traveled to Ireland with her child with the intent to live and train with jihadists. The day after she arrived in Ireland, Ramirez married CC#2, whom she had never before met in person, in an Islamic ceremony, knowing and intending that her presence in Europe, her marriage to CC#2 and her future actions would provide support for the conspiracy.

 

“Today’s guilty plea by Jamie Ramirez, coupled with that of Colleen LaRose last month, underscores the evolving nature of the terrorist threat we face,” said acting Assistant Attorney General Hinnen. “Many counterterrorism and law enforcement officials worked tirelessly to deal with the threat these defendants posed; I applaud their efforts and those of all of the national security professionals and prosecutors that work to keep the country safe.”

 

“Keeping our community and the country safe are a top priority of this office,” said U.S. Attorney Memeger. “This case and the guilty pleas are a culmination of the vigilant efforts by the FBI agents in this district, the prosecutors in my office and law enforcement officers around the globe.  It underscores the importance and success of international collaboration when fighting terrorism.”

 

“The guilty plea in this case today is yet one more success our efforts against the continuing and evolving threats that we face,” said FBI Special Agent in Charge Venizelos. “Our Joint Terrorism Task Forces work very closely with all of our partners in the law enforcement and intelligence communities to ensure that we remain vigilant, alert and creative in our approaches to identifying and preventing acts of terrorism.”

 

This case was investigated by the FBI Field Division in New York, the FBI’s Joint Terrorism Task Force in Philadelphia, the FBI Field Division in Denver, and the FBI Field Office in Washington, D.C.  Authorities in Ireland also provided assistance in this matter. 

 

The case is being prosecuted by Assistant U.S. Attorney Jennifer Arbittier Williams, in the Eastern District of Pennsylvania, and Matthew F. Blue, Trial Attorney from the Counterterrorism Section in the Justice Department’s National Security Division.  The Office of International Affairs in the Justice Department’s Criminal Division also provided assistance.

WASHINGTON – The Attorney General made the following statement today:

 

As the Administration has long stated, it is essential that the government have the ability to use both military commissions and federal courts as tools to keep this country safe. Unfortunately, some in Congress have unwisely sought to undermine this process by imposing restrictions that challenge the Executive Branch’s ability to bring to justice terrorists who seek to do Americans harm. We oppose those restrictions, and will continue to seek their repeal.

 

It is important, however, that military commissions, as reformed by the Military Commissions Act in 2009 and other reforms, be allowed to resume. In November of that year, after consulting with the Secretary of Defense, I referred a number of cases for consideration for prosecution in military commissions. For the remaining cases the Guantanamo Review Task Force deemed suitable to pursue for prosecution, we will continue to work, along with the Department of Defense, to ensure that justice is done as swiftly as possible.

 

The executive order issued by the President today strengthens the legal framework under which we will continue to detain those individuals who are at war with our country and who pose a significant threat to the security of the United States. In addition, federal courts will continue to review the legality of detention of individuals at Guantanamo. While we continue to work to close Guantanamo, these steps will ensure that the detention of individuals there is appropriate under our laws.

WASHINGTON – A Las Vegas woman pleaded guilty today to falsely representing to Medicare that she owned a Los Angeles-area durable medical equipment (DME) company that was actually owned and operated by her brother, and used by her brother and others to submit more than $3.5 million in false claims to Medicare, the Departments of Justice and Health and Human Services (HHS) announced.

 

Jummal Joy Ibrahim, 55, pleaded guilty today before U.S. District Judge George H. King in the Central District of California. Ibrahim admitted that between January 2006 and September 2009, she allowed her brother, Christopher Iruke, to use her identity to conceal his ownership and control of Contempo Inc., dba Contempo Medical Supplies. Contempo was a fraudulent DME supply company located in Inglewood, Calif., which Iruke and others used to submit false claims to Medicare for expensive, high-end power wheelchairs and other DME.

 

According to court documents, in 2006, Iruke told Ibrahim that Medicare would not accredit Iruke’s DME company, Pascon Medical Supply, and as a result, Iruke had to close Pascon. Iruke asked Ibrahim if he could use her name, Social Security number and driver’s license to open Contempo. Ibrahim agreed to serve as the straw owner of Contempo even though she knew nothing about the DME business and did not intend to have any role in the operation of Contempo or share in its profits. Ibrahim sent Iruke a copy of her Social Security card and driver’s license, signed articles of incorporation and other documents necessary to the formation of Contempo, and allowed Iruke and others to use her identity to obtain a Medicare provider number for Contempo which Iruke then used to submit false claims to Medicare.

 

Ibrahim also admitted that she opened a bank account in her name for Contempo, but that she allowed Iruke unrestricted access to the account so that he could transact business in her name. Medicare reimbursement payments to Contempo were deposited into this bank account.

 

Ibrahim admitted that as a result of her conduct, Iruke and others were able to conceal Iruke’s ownership and control of Contempo and submit approximately $3.5 million in false power wheelchair and DME claims to Medicare. Medicare reimbursed Contempo approximately $1.7 million on these false claims.

 

At sentencing, scheduled for June 13, 2011, Ibrahim faces a maximum penalty of five years in prison and a $250,000 fine.

 

Iruke was indicted in October 2009 on health care fraud charges. His trial is scheduled to begin on May 3, 2011, and he is presumed innocent unless proven guilty beyond a reasonable doubt in a court of law.

Today’s guilty plea was announced by Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney André Birotte Jr. for the Central District of California; Tony Sidley, Assistant Chief of the California Department of Justice, Bureau of Medi-Cal Fraud and Elder Abuse; Glenn R. Ferry, Special Agent-in-Charge for the Los Angeles Region of the HHS Office of Inspector General (HHS-OIG); and Steven Martinez, Assistant Director in Charge of the FBI’s Los Angeles Field Office.

 

The case is being prosecuted by Trial Attorney Jonathan T. Baum of the Criminal Division’s Fraud Section. The case is being investigated by HHS-OIG.

 

The case was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Central District of California. The Medicare Fraud Strike Force operations are part of the Health Care Fraud Prevention & Enforcement Action Team (HEAT), a joint initiative announced in May 2009 between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country.

 

Since their inception in March 2007, Strike Force operations in nine districts have charged 1,000 defendants who collectively have falsely billed the Medicare program for more than $2.3 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 HEAT, go to: www.stopmedicarefraud.gov

WASHINGTON – The Justice Department announced today that it will monitor municipal elections on March 8, 2011, in Maricopa County, Ariz. The Voting Rights Act prohibits discrimination in the election process on the basis of race, color or membership in a minority language group. In addition, the act requires certain covered jurisdictions to provide language assistance during the election process. Maricopa County is required to provide assistance in the Spanish and O’odham languages.

 

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

 

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

 

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

WASHINGTON – The Justice Department announced today that the Hillsboro, Oregon, School District will allow Jordan “Scooter” Givens to bring his trained autism service dog into his classroom in the Hillsboro School District.

 

The highly trained service dog, Madison, provides critical assistance to Scooter, recognizing when he is about to engage in behavior that might endanger him, and distracting him to obstruct this type of behavior. For nearly three years, Scooter’s parents’ efforts to get permission for Scooter to bring Madison to school had been rebuffed. After U.S. Attorney Dwight Holton and a senior attorney from the Civil Rights Division met in late January with the superintendent of the Hillsboro School District regarding the failure to accommodate the Givens’ request, the school district announced last Friday that it would allow Scooter to be accompanied by the service dog for a trial period.

 

The Department of Justice investigation resulted from a complaint filed with the department by Joel Greenberg, an attorney with Disability Rights of Oregon (DRO).

 

“Service animals assist students with disabilities across the United States every day of the school year without incident,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “Fears, generalizations and stereotypes are simply insufficient to deny access to a student’s service dog, and the department will continue to provide school districts with technical assistance to make sure they comply with the ADA.”

 

“Kids with autism deserve the same opportunity as the rest of us to grow and learn,” said U.S. Attorney Holton. “Scooter’s service dog will help him grow up to meet his full potential – which is something we should all expect and hope for our children.” Holton praised the school district’s decision to engage in a trial period with the service dog: “The last thing we need is years of litigation, costing the people of Hillsboro hundreds of thousands of dollars – Scooter is growing up, and doesn’t have time for lawyers to wrangle.”

 

The specific terms and parameters of the assessment period are still being worked out, but the school board’s vote shows a good faith effort to voluntarily resolve this dispute without more formal action by the department.

 

The Americans with Disabilities Act (ADA) requires schools and other public entities and businesses to allow individuals with disabilities to be accompanied by service animals. Service animals cannot be denied access except for the rare instances in which their actual behavior poses a direct threat to the safety of others or results in a fundamental alteration of the nature of a program.

 

Service animals are individually trained to do work or perform tasks for the benefit of individuals with disabilities, including individuals with neurological disabilities caused by autism. Because of a recent change in rules on service animals adopted by the Justice Department, beginning March 15, 2011, service animals will be limited to dogs. Service dogs perform a wide variety of functions. Examples of these functions include guiding persons who are blind or have low vision; alerting individuals who are deaf or hard of hearing to sounds; warning persons about impending seizures or other medical conditions; performing a variety of tasks for persons with psychiatric disabilities, and picking up items, opening doors, flipping switches, providing physical support and pulling wheelchairs for individuals with mobility disabilities.

 

The case is being handled by Jeanine Worden, Deputy Chief of the Civil Rights Division’s Disability Rights Section, and Assistant U.S. Attorney Adrian Brown.

 

More information about the ADA, rights and responsibilities under the ADA relating to service animals, and instructions on filing an ADA complaint with the Justice Department is available at www.ada.gov . This information includes two publications specifically addressing service animal access: “ADA Business Brief: Service Animals” and “Commonly Asked Questions About Service Animals in Places of Business.” Those interested in obtaining copies of these documents or additional information about the ADA can also call the Justice Department’s toll-free ADA Information Line (800) 514-0301 or (800) 514-0383 (TTY).

WASHINGTON – The United States has asked a federal court to stop an Atlanta-area financial planner from assisting persons in preparing false tax returns claiming fraudulent tax refunds based on fabricated income tax withholdings, the Justice Department announced today. The suit, filed in U.S. District Court in Atlanta, alleges that T. Michael Haney promotes a scheme in which his customers falsely report tax withholdings to generate large bogus refund claims on their tax returns.

According to the government complaint, Haney advises his customers to prepare false Internal Revenue Service (IRS) forms, such as Form 1099-OID, to request fraudulent refunds based on phony claims of large income tax withholding. He allegedly tells his customers that the “OID” program is a little known government benefit. The complaint alleges that Haney’s customers have submitted fraudulent refund claims of more than $3.5 million. Haney allegedly has filed two federal tax returns for himself that falsely claim refunds totaling more than $360,000.

 

In November 2010, a federal court barred another Atlanta-area man, Robert Knupp , from promoting the OID scheme and preparing federal tax returns.

 

Claiming bogus refunds based on false Forms1099-OID is identified by the IRS as one of the “Dirty Dozen” tax scams that taxpayers are urged to avoid. Since 2001, the Justice Department’s Tax Division has obtained hundreds of injunctions to stop the promotion of tax fraud schemes and the preparation of fraudulent tax returns. Information about these cases is available on the Justice Department website .

WASHINGTON - Siete miembros de la MS-13 y líderes de La Mara Salvatrucha, o MS-13, fueron sentenciados a prisión esta semana, después de haber sido condenados o haberse declarado culpables de cargos penales que incluyen asociación ilícita, homicidio, intento de homicidio, agresión, tráfico de cocaína y numerosos delitos federales de armas de fuego relacionados. Las sentencias fueron anunciadas por el Secretario de Justicia Auxiliar Lanny A. Breuer de la División de lo Penal y la Fiscal Federal Anne M. Tompkins del Distrito Oeste de Carolina del Norte.

Hasta la fecha, 25 de los 26 demandados originalmente acusados en la acusación formal de junio de 2008 fueron sentenciados por sus papeles en actividades de asociación ilícita de la MS-13, una organización delictiva nacional e internacional.

"Estas sentencias reflejan la gravedad de los delitos cometidos por los demandados, entre los que se incluyen homicidio, intento de homicidio y asociación ilícita", dijo el Secretario de Justicia Auxiliar Breuer. "Como lo hemos hecho en este caso, seguiremos enjuiciando a los líderes y miembros más violentos de pandillas callejeras como la MS-13. Nos negamos a permitir que estos grupos violentos aterroricen a nuestras comunidades, y, como lo han aprendido estos demandados, pediremos sentencias largas de prisión por sus delitos".

"Hoy, vimos que la delincuencia organizada no logrará evadir a las fuerzas del orden público. Los secuaces de la MS-13 acecharon a los más vulnerables e indefensos", dijo la Fiscal Federal Tompkins. "Debido a la labor conjunta de las fuerzas del orden público locales, estatales y federales, la amenaza que representa esta organización delictiva ha sido neutralizada. Las sentencias de hoy demuestran que las pandillas delictivas pueden esperar justicia rápida y castigos duros. La MS-13 y otras pandillas tienen toda mi atención".

"Estamos desmantelando constantemente el poder de la MS-13 sobre comunidades en Charlotte, desbaratando su liderazgo y afectando significativamente su capacidad de operar. No solo irán estos líderes de pandilla a la prisión por periodos prolongados de sus vidas, sino que la capacidad de reemplazarlos se dificultará debido a nuestra labor de investigación persistente entre dependencias", dijo Joseph S. Campbell, Agente Especial Interino a Cargo del Buró Federal de Investigaciones [Federal Bureau of Investigation (FBI)] en Carolina del Norte. "Este caso fue investigado con éxito por fiscales y personal de las fuerzas del orden público dedicados, y se ha vuelto pionero en su alcance".

El Juez Federal de Distrito Principal Robert J. Conrad Jr. sentenció a los siguientes demandados esta semana:

• Julio Cesar Rosales Lopez, 24, alias “Stiler,” del Condado de Guilford, N.C.; fue sentenciado hoy a 320 meses en prisión;
• Juan Gilberto Villalobos, 44, alias “Smoke,” de Charlotte, N.C., fue sentenciado hoy a 204 meses en prisión;
• Elvin Pastor Fernandez Gradis, 34, alias “Tigre,” de Charlotte, fue sentenciado hoy a prisión perpetua;
• Johnny Elias Gonzalez, 22, alias “Solo,” de Charlotte, fue sentenciado hoy a 360 meses en prisión;
• Santos Anibal Caballero Fernandez, 26, alias “Garra,” de Charlotte, fue sentenciado hoy a 150 meses en prisión;
• Carlos Roberto Figeroa-Pineda, 28, alias “Drogo,” de Charlotte, fue sentenciado ayer a 420 meses en prisión: y
• Carlos Ferufino-Bonilla, 31, alias “Tigre,” de Charlotte, fue sentenciado ayer a 78 meses en prisión.

Todos estos demandados, excepto Ferufino-Bonilla, fueron condenados en un juicio en enero de 2010 por conspirar para participar en una asociación ilícita en el Distrito Oeste de Carolina del Norte, El Salvador y otros lugares, a partir de, al menos, enero de 2003 y hasta el 27 de julio de 2009. Las pruebas presentadas en el juicio demostraron que la organización MS-13 planeó y cometió diversos actos delictivos, incluidos robo y extorsión, obstrucción de la justicia, manipulación de testigos, conspiración para distribuir y poseer cocaína y marihuana, distribución y posesión con la intención de distribuir cocaína, uso ilegal de instalaciones de comunicaciones, homicidio y conspiración para cometer homicidio. Testimonios y pruebas presentados durante el juicio demostraron que la organización también se comunicó con su liderazgo en El Salvador, protegió su territorio, ejerció acciones disciplinarias entre sus miembros y cobró deudas a través de un patrón de actividades de asociación ilícita que incluyeron los asesinatos de siete personas en Carolina del Norte y Los Ángeles, intento de homicidio, agresiones y amenazas de violencia. El miembro de la MS-13 Alejandro Umana fue condenado anteriormente en un juicio y sentenciado a la pena de muerte por cinco de los homicidios en Carolina del Norte y Los Ángeles.

Fernandez-Gradis fue condenado por dos cargos asociados a disparos contra y el asesinato de Ulisses Mayo-De La Torre, de 17 años de edad, en South Charlotte, N.C., el 12 de abril de 2008. Pruebas presentadas en el juicio demostraron que Fernandez-Gradis mató a Mayo-De La Torre porque su primo llevaba puesta una camisa roja, el color de un pandilla rival. Fernandez-Gradis realizó múltiples disparos hacia dentro del vehículo en el que la víctima era apenas un pasajero, matando a Mayo-De La Torre. Caballero Fernandez, cuya presencia en el tiroteo quedó demostrada por pruebas presentadas en el juicio, fue condenado por ser cómplice por encubrimiento del homicidio. Las pruebas presentadas en el juicio demostraron que Caballero Fernandez ayudó a Fernandez-Gradis a escapar y tomó el arma utilizada para el homicidio el día siguiente. Caballero Fernandez fue encontrado con el arma utilizada para el homicidio aproximadamente un mes después del homicidio. Tanto Fernandez-Gradis como Caballero Fernandez fueron condenados por posesión ilegal de un arma de fuego por un extranjero ilegal, así como otros cargos.

Rosales Lopez, uno de los líderes de la pandilla, quien, según las pruebas presentadas, fue enviado por líderes de la MS-13 en El Salvador para ejecutar lo que los miembros llamaban "El programa" en las áreas de Charlotte y Greensboro, N.C., fue condenado por robar a una víctima quien sospechaba que estaba traficando drogas en un club nocturno de Charlotte controlado por la MS-13. Rosales Lopez también fue condenado por ser cómplice por encubrimiento de un homicidio doble cometido por Umana en un restaurante en Greensboro en 2007. Además, Rosales Lopez fue condenado por conspiración para cometer extorsión.

Villalobos, quien, según las pruebas presentadas en el juicio, era uno de los principales proveedores de drogas para la pandilla y cuidador de muchas de sus armas, fue condenado por una variedad de delitos asociados a drogas y armas en conexión con su membresía en la MS-13, así como conspiración para cometer extorsión. Las pruebas presentadas en el juicio demostraron que Villalobos "controlaba" los clubes nocturnos Mi Cabana y El Vaquero en Charlotte en nombre de la MS-13.

Gonzales fue condenado por conspiración asociada a la Ley de Organizaciones Corruptas e Influenciadas por la Delincuencia Organizada [Racketeer Influenced and Corrupt Organizations Act (RICO)]. En conexión con dicho cargo, el jurado encontró que Gonzalez participó y fue responsable por un robo-homicidio de Yonni Alexander Morales Maradiaga, quien fue baleado y muerto por otro miembro de la MS-13 durante el robo en East Charlotte, N.C., a principios de agosto de 2005.

Figueroa Pineda fue condenado por conspiración asociada a la RICO, conspiración para cometer narcotráfico, dos cargos de posesión con intención de distribuir marihuana y posesión de un arma durante uno de dichos delitos de narcotráfico. En conexión con el cargo de conspiración asociado a la RICO, el tribunal lo encontró responsable del intento de homicidio de una víctima utilizando un vehículo, causando lesión cerebral permanente.

Ferufino-Bonilla se declaró culpable el 10 de julio de 2009 a conspiración asociada a la RICO incluyendo múltiples robos armados, extorsión y posesión de un arma de fuego por un extranjero ilegal.

Cuatro demandados adicionales también han sido sentenciados desde junio de 2010, cuando se anunciaron sentencias de prisión para 11 de los 26 demandados:

• Cesar Yoaldo Castillo, 23, alias “Chino,”fue sentenciado el 4 de enero de 2011 a 392 meses en prisión;
• Michael Steven Mena, 24, alias “Cholo,” fue sentenciado el 5 de octubre de 2010, a 127 meses en prisión.
• José Amílcar García-Bonilla, 27, alias “Psicópata,” “Sicario,” ‘Lucio Caesario” y “José Luis Ferufino” fue sentenciado el 4 de octubre de 2010 a 78 meses en prisión; y
• Mario Melgar-Díaz, 32, alias “Nino,” fue sentenciado el 5 de octubre de 2010 a 68 meses en prisión.

Las pruebas presentadas en el juicio de enero de 2010 demostraron que la investigación prolongada de cuatro de los homicidios fue iniciada por la Fuerza de Tarea Antipandillas "Calles Seguras" del FBI de Carolina del Norte, cuando un testigo se presentó y explicó cómo los homicidios fueron parte de las operaciones violentas de una única célula de la MS-13 que operaba en el área de Charlotte. La Fuerza de Tarea está compuesta por el FBI, el Buró de Alcohol, Tabaco, Armas de Fuego y Explosivos [Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF)], el Servicio de Inmigración y Control de Aduanas de EE.UU. [U.S. Immigration and Customs Enforcement (ICE)], el Departamento de Policía de Charlotte-Mecklenburg, y el Departamento de Policía de Gastonia, N.C. La Fuerza Nacional de Tareas Antipandilla MS-13 del FBI tuvo un papel significativo en coordinar los aspectos internacionales de la investigación; asistencia crítica adicional fue brindada por la Unidad Transnacional Antipandillas [Transnational Anti-Gang (TAG)]. El Buro de Investigaciones del Estado de Carolina del Norte, así como el Departamento de Policía de Greensboro y el Departamento de Policía de Durham brindaron apoyo de investigación adicional. El Servicio de Alguaciles Federales para el Distrito Oeste de Carolina brindó importante asistencia con respecto a la seguridad durante el enjuiciamiento de dos semanas de duración.

Estuvieron a cargo del enjuiciamiento en el caso los Fiscales Federales Auxiliares Kevin Zolot, Jill Rose y Adam Morris de la Fiscalía Federal para el Distrito Oeste de Carolina del Norte, y el Abogado Litigante Sam Nazzaro de la Unidad Antipandillas de la División de lo Penal.

WASHINGTON – Seven MS-13 members and leaders of La Mara Salvatrucha, or MS-13, have been sentenced to prison this week, after being convicted or pleading guilty to criminal charges that include racketeering, murder, attempted murder, assault, cocaine trafficking and numerous related federal firearms offenses.  The sentences were announced by Assistant Attorney General Lanny A. Breuer of the Criminal Division and U.S. Attorney Anne M. Tompkins for the Western District of North Carolina.

 

To date, 25 of the 26 defendants originally charged in the June 2008 indictment have been sentenced for their roles in the racketeering activities of MS-13, a national and international criminal enterprise.

 

“These sentences reflect the severity of the defendants’ crimes, which included murder, attempted murder and racketeering,” said Assistant Attorney General Breuer.  “As we have done in this case, we will continue to target the leaders and most violent members of street gangs like MS-13.  We refuse to let these violent groups terrorize our communities and, as these defendants have learned, we will seek stiff prison sentences for their crimes.”

 

“Today we saw that organized crime is no match for law enforcement.  The thugs of MS-13 preyed on the most vulnerable and defenseless amongst us,” said U.S. Attorney Tompkins.  “Due to the combined efforts of local, state and federal law enforcement, the threat posed by this criminal enterprise has been neutralized. The sentences today demonstrate that criminal gangs can expect swift justice and harsh punishment.  MS-13 and other gangs have my full attention.” 

 

“We are steadily disrupting MS-13’s grip on communities in Charlotte, dismantling the leadership and significantly impacting its ability to operate.  Not only are these gang leaders going to prison for extended periods of their lives, the ability to replace them will be made difficult by our persistent interagency investigative efforts,” said Joseph S. Campbell, Acting Special Agent in Charge of the FBI in North Carolina.  “This case was successfully investigated by dedicated prosecutors and law enforcement personnel, and has become groundbreaking in scope.”  

 

Chief U.S. District Judge Robert J. Conrad Jr. sentenced the following defendants this week:

 

• Julio Cesar Rosales Lopez, 24, aka “Stiler,” of Guilford County, N.C.; was sentenced today to 320 months in prison;
• Juan Gilberto Villalobos, 44, aka “Smoke,” of Charlotte, N.C., was sentenced today to 204 months in prison;
• Elvin Pastor Fernandez Gradis, 34, aka “Tigre,” of Charlotte, was sentenced today to life in prison;
• Johnny Elias Gonzalez, 22, aka “Solo,” of Charlotte, was sentenced today to 360 months in prison;
• Santos Anibal Caballero Fernandez, 26, aka “Garra,” of Charlotte, was sentenced today to 150 months in prison;
• Carlos Roberto Figeroa-Pineda, 28, aka “Drogo,” of Charlotte, was sentenced yesterday to 420 months years in prison; and
• Carlos Ferufino-Bonilla, 31, aka “Tigre,” of Charlotte, was sentenced yesterday to 78 months in prison.

 

All of these defendants, except Ferufino-Bonilla, were convicted at trial in January 2010 of conspiring to engage in a racketeering enterprise in the Western District of North Carolina, El Salvador and elsewhere, beginning at least in January 2003 and continuing through July 27, 2009.  The evidence at trial showed that the MS-13 enterprise planned and committed various criminal acts, including robbery and extortion, obstruction of justice, tampering with witnesses, conspiring to distribute and possessing cocaine and marijuana, distributing and possessing with intent to distribute cocaine, illegally using communication facilities, murder and conspiring to commit murder.  Testimony and evidence introduced during the trial showed that the enterprise also communicated with its leadership in El Salvador, protected its territory, enforced discipline among members, and collected debts through a pattern of racketeering activities that included the murders of seven people in North Carolina and Los Angeles, attempted murder, assaults and threats of violence.  MS-13 member Alejandro Umana was previously convicted at trial and sentenced to receive the death penalty for five of the murders in North Carolina and Los Angeles.

 

Fernandez-Gradis was convicted of two charges involving the shooting and killing of 17-year-old Ulisses Mayo-De La Torre in South Charlotte, N.C., on April 12, 2008.  Evidence at trial showed that Fernandez-Gradis killed Mayo-De La Torre because his cousin was wearing a red shirt, the color of a rival gang.  Fernandez-Gradis fired multiple shots into the vehicle where the victim was merely a passenger, killing Mayo-De La Torre .  Caballero Fernandez, who the evidence at trial showed was present at the shooting, was convicted of being an accessory after the fact to the murder.  The evidence at trial showed that Caballero Fernandez helped Fernandez-Gradis escape and took the murder weapon the next day.  Caballero Fernandez was found with the murder weapon approximately one month after the murder.  Both Fernandez-Gradis and Caballero Fernandez were also convicted of unlawful possession of a firearm by an illegal alien, as well as other charges.

 

Rosales Lopez, one of the gang’s leaders whom the evidence showed was sent by MS-13 leaders in El Salvador to run what members called “The Program” in the Charlotte and Greensboro, N.C.-areas, was convicted of robbing a victim whom he suspected of dealing drugs in a Charlotte nightclub controlled by MS-13.  Rosales Lopez was also convicted of being an accessory after the fact to a double homicide perpetrated by Umana in a restaurant in Greensboro in 2007.  In addition, Rosales Lopez was convicted of conspiracy to commit extortion. 

 

Villalobos, whom the evidence at trial showed was the one of the main drug suppliers for the gang and  keeper of many of its guns, was convicted of a variety of drug and gun crimes in connection with his MS-13 membership, as well as conspiracy to commit extortion.  The evidence at trial showed that Villalobos “controlled” the Mi Cabana and El Vaquero nightclubs in Charlotte on behalf of MS-13.

 

Gonzalez was convicted of RICO conspiracy.  In connection with that charge, the jury found that Gonzalez participated in and was responsible for a robbery-murder of Yonni Alexander Morales Maradiaga, who was shot and killed by another MS-13 member during the robbery in East Charlotte, N.C., in early August 2005. 

 

Figueroa Pineda was convicted of RICO conspiracy, drug conspiracy, two counts of possession with intent to distribute marijuana and possessing a gun during one of those drug crimes.  In connection with the RICO conspiracy charge, the court found him responsible for the attempted murder of a victim by use of a vehicle, causing permanent brain injury.

 

Ferufino-Bonilla pleaded guilty on July 10, 2009, to RICO c onspiracy involving multiple armed robberies, extortion and possession of a firearm by illegal alien.

 

Four additional defendants have also been sentenced since June 2010, when prison sentences were announced for 11 of the 26 defendants:

 

·          Cesar Yoaldo Castillo, 23, aka “Chino,” was sentenced on Jan. 4, 2011, to 392 months in prison;

·          Michael Steven Mena, 24, aka “Cholo,” was sentenced on Oct. 5, 2010, to 127 months in prison.

·          Jose Amilcar Garcia-Bonilla, 27, aka “Psicopata,” “Sicario,” ‘Lucio Caesario” and “Jose Luis Ferufino” was sentenced on Oct. 4, 2010, to 78 months in prison; and

·          Mario Melgar-Diaz, 32, aka “Nino,” was sentenced on Oct. 5, 2010, to 68 months in prison.

 

Evidence presented at the January 2010 trial showed that the long-term investigation of four of the murders was initiated by the FBI’s “Safe Streets” Gang Task Force from North Carolina when a witness came forward and explained how the killings were part of the violent operation of a single MS-13 cell operating out of the Charlotte area.  The Task Force is composed of the FBI, the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF), U.S. Immigration and Customs Enforcement (ICE), the Charlotte-Mecklenburg Police Department, and the Gastonia, N.C., Police Department.  The FBI’s MS-13 National Gang Task Force played a significant role in coordinating the international aspects of the investigation, and additional critical assistance was provided by the Transnational Anti-Gang (TAG) Unit.  Additional law enforcement investigative support was provided by the North Carolina State Bureau of Investigation, as well as the Greensboro Police Department and the Durham Police Department.  Substantial assistance has been afforded by the U.S. Marshals Service for the Western District of North Carolina, especially with regard to security during the two-week jury trial. 

 

The cases were prosecuted by Assistant U.S. Attorneys Kevin Zolot, Jill Rose and Adam Morris from the U.S. Attorney’s Office for the Western District of North Carolina, and Trial Attorney Sam Nazzaro from the Criminal Division’s Gang Unit.

WASHINGTON - Un propietario y una médica asociados a una clínica de terapia de infusión del área de Detroit fueron sentenciados a 10 meses y 97 meses en prisión, respectivamente, por sus papeles principales en un ardid de fraude contra Medicare por un valor de 2.3 millones de dólares, anunciaron los Departamentos de Justicia y de Salud y Servicios Humanos [Health and Human Services (HHS)]. En un caso separado, un autor de lavado de dinero fue sentenciado a un año en prisión en conexión con un ardid de fraude contra Medicare en otra clínica del área de Detroit.

Juan De Oleo, 51, un propietario de Xpress Center Inc. (XPC); Dra. Rosa Genao, 52, una médica asociada a XPC; y Noel Freytes, 36, un autor de lavado de dinero de Dearborn Medical Rehabilitation Center (DMRC), fueron sentenciados por la Juez Federal de Distrito Denise Page Hood en el Distrito Este de Michigan. Además de sus sentencias en prisión, De Oleo y Genao fueron sentenciados a tres años de libertad bajo supervisión y se les ordenó pagar mancomunada y solidariamente 1.7 millones de dólares en restitución. Freytes también fue sentenciado a dos años de libertad bajo supervisión y se le ordenó pagar 519,540 dólares en restitución, mancomunada y solidariamente con sus codemandados.

De Oleo y Genao fueron condenados después de un juicio de siete días de duración en agosto de 2010. De Oleo fue condenado por un cargo de conspiración para cometer fraude de atención médica, cinco cargos de fraude de atención médica y dos cargos de lavado de dinero. Genao fue condenada por un cargo de conspiración para cometer fraude de atención médica, cinco cargos de fraude de atención médica y un cargo de destrucción o alteración de registros.

De acuerdo con pruebas presentadas en el juicio, De Oleo y otros establecieron XPC con la única finalidad de defraudar a Medicare. XPC era una clínica ambulatoria que alegaba especializarse en terapia de infusión e inyección. Asimismo, De Oleo y sus coconspiradores importaron el concepto de fraude de clínica de infusión a Detroit desde el Sur de Florida después de que se intensificara el escrutinio por parte de las fuerzas del orden público en este último lugar.

De Oleo contrató a su esposa, Genao, para que ayudara a falsificar registros médicos en XPC para que aparentara que los pacientes de la clínica efectivamente necesitaban los medicamentos facturados a Medicare. De acuerdo con pruebas presentadas en el juicio, Genao anotó síntomas ficticios en los registros de los pacientes mantenidos por la clínica, a fin de justificar medicamentos costos y exóticos que la clínica facturó a Medicare.

Las pruebas presentadas en el juicio demostraron que XPC compró apenas una pequeña fracción de los medicamentos que la clínica facturó al programa Medicare. Se les recetaba a los pacientes medicamentos en la clínica con base no en necesidad médica, sino en qué medicamentos generarían los reembolsos más altos por parte de Medicare.

Las pruebas presentadas en el juicio demostraron que los beneficiarios de Medicare no eran remitidos a XPC por sus médicos de cabecera, o para cualquier otra finalidad médica legítima, sino que era reclutados para concurrir a la clínica a través del pago de comisiones ilícitas. A cambio por esas comisiones ilícitas, los beneficiarios de Medicare visitaban la clínica y firmaban documentos indicando que habían recibido los servicios facturados a Medicare.

Según demostraron las pruebas presentadas en el juicio, entre aproximadamente noviembre de 2006 y marzo de 2007, los demandados presentaron aproximadamente 2.3 millones de dólares en reclamos a Medicare por servicios de terapia de inyección que nunca fueron provistos y que no eran médicamente necesarios. Medicare pagó aproximadamente 1.7 millones de dólares de dichos reclamos.

En un caso separado de fraude contra Medicare, Freytes se declaró culpable en septiembre de 2010 a lavado de dinero en nombre de un propietario de DMRC, una clínica separada en el área de Detroit. El lavado de dinero de Freytes fue diseñado de modo a disimular el origen del producto obtenido a través del ardid de terapia de infusión fraudulento en DMRC. Freytes admitió que depositó cheques de una cuenta de DMRC emitidos a una compañía que le pertenecía. Freytes retiró un gran porcentaje del dinero en la cuenta de su compañía y devolvió la mayor parte del mismo a los propietarios y operadores codemandados de DMRC. Freytes admitió haber lavado o intentado lavar 519,540 dólares en nombre de los propietarios de DMRC.

Las sentencias de hoy fue anunciada por el Secretario de Justicia Auxiliar Lanny A. Breuer de la División de lo Penal; la Fiscal Federal para el Distrito Este de Michigan Barbara L. McQuade; el Agente Especial a Cargo Andrew G. Arena de la Oficina Local de Detroit del Buró Federal de Investigaciones [Federal Bureau of Investigation (FBI)]; y el Agente Especial a Cargo Lamont Pugh III de la Oficina Regional de Chicago del Departamento de Salud y Servicios Humanos de los EE.UU., Oficina del Inspector General [U.S. Department of Health and Human Services, Office of Inspector General’s (HHS-OIG)].

Estuvieron a cargo de la acusación en el caso los Abogados Litigantes Benjamin D. Singer y Gejaa T. Gobena de la Sección de Fraude de la División de lo Penal. Estuvieron a cargo de la acusación en el caso de DMRC el Abogado Litigante Gejaa T. Gobena, el Fiscal Federal Auxiliar Philip A. Ross del Distrito Este de Michigan y el Fiscal Federal Auxiliar Especial Thomas W. Beimers del Distrito Este de Michigan. Los casos fueron investigados por el FBI y la HHS-OIG, y se iniciaron como parte de la Fuerza de Ataque al Fraude contra Medicare, supervisada por la Sección de Fraude de la División de lo Penal y la Fiscalía Federal para el Distrito Este de Michigan.

Desde su creación en marzo de 2007, las operaciones de las Fuerzas de Ataque de Fraude contra Medicare en nueve distritos obtuvieron las acusaciones formales de 1,000 demandados que, en conjunto, facturaron de manera fraudulenta al programa Medicare más de 2.3 mil millones de dólares. Además, los Centros para Servicios de Medicare y Medicaid del HHS, trabajando en conjunto con la HHS-OIG, están tomando medidas para aumentar la responsabilización y reducir la presencia de proveedores fraudulentos.

Para obtener más información sobre el Equipo de Prevención de Fraude de Atención Médica y Acción de Coacción [Healthcare Fraud Prevention and Enforcement Action Team (HEAT)], visite: www.stopmedicarefraud.gov.

WASHINGTON – An owner and a physician associated with a Detroit-area infusion therapy clinic were sentenced to 120 months and 97 months in prison, respectively, for their leading roles in a $2.3 million Medicare fraud scheme, the Departments of Justice and Health and Human Services (HHS) announced. In a separate case, a money launderer was sentenced to one year in prison in connection with a Medicare fraud scheme at a separate Detroit-area clinic.

Juan De Oleo, 51, an owner of Xpress Center Inc. (XPC); Dr. Rosa Genao, 52, a physician associated with XPC; and Noel Freytes, 36, a money launderer for Dearborn Medical Rehabilitation Center (DMRC), were all sentenced by U.S. District Court Judge Denise Page Hood in the Eastern District of Michigan. In addition to their prison terms, De Oleo and Genao were sentenced to three years of supervised release and were ordered to pay jointly and severally $1.7 million in restitution. Freytes was also sentenced to two years of supervised release and ordered to pay $519,540 in restitution, jointly and severally with his co-defendants.

De Oleo and Genao were convicted after a seven-day trial in August 2010. De Oleo was convicted of one count of conspiracy to commit health care fraud, five counts of health care fraud and two counts of money laundering. Genao was convicted of one count of conspiracy to commit health care fraud, five counts of health care fraud and one count of destruction or alteration of records.

 

According to evidence presented at trial, De Oleo and others established XPC for the sole purpose of defrauding Medicare. XPC was an outpatient clinic that purported to specialize in infusion and injection therapy. Further, De Oleo and his co-conspirators imported the concept of infusion clinic fraud to Detroit from South Florida after increased law enforcement scrutiny there.

 

De Oleo enlisted his wife, Genao, to help falsify medical files at XPC to make it appear that the clinic’s patients actually needed the medications being billed to Medicare. According to the evidence presented at trial, Genao wrote down fictitious symptoms in the patient charts maintained by the clinic in order to justify expensive and exotic medications that the clinic billed to Medicare.

 

Evidence at trial showed that XPC purchased only a small fraction of the medications that the clinic billed the Medicare program for providing. Patients were prescribed medications at the clinic based not on medical need, but rather on what medications were likely to generate the highest Medicare reimbursements.

 

Evidence at trial showed that Medicare beneficiaries were not referred to XPC by their primary care physicians, or for any other legitimate medical purpose, but rather were recruited to come to the clinic through the payment of cash kickbacks. In exchange for those kickbacks, the Medicare beneficiaries would visit the clinic and sign documents indicating that they had received the services billed to Medicare.

 

As the evidence at trial showed, between approximately November 2006 and March 2007, the defendants submitted approximately $2.3 million in claims to Medicare for injection therapy services that were never provided and were not medically necessary. Medicare paid approximately $1.7 million of those claims.

 

In a separate Medicare fraud case, Freytes pleaded guilty in September 2010 to laundering money on behalf of an owner of DMRC, a separate clinic in the Detroit-area. Freytes’ money laundering efforts were designed to disguise the origins of proceeds obtained through a fraudulent infusion therapy scheme at DMRC. Freytes admitted that he deposited checks from a DMRC account that were made out to a company he owned. Freytes withdrew a large percentage of the money in his company’s account and returned most of it to the co-defendant owners and operators of DMRC. Freytes admitted to having laundered or having attempted to launder $519,540 on behalf of the DMRC owners.

 

Today’s sentences were announced by Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney for the Eastern District of Michigan Barbara L. McQuade; Special Agent in Charge Andrew G. Arena of the FBI’s Detroit Field Office; and Special Agent in Charge Lamont Pugh III of the HHS Office of Inspector General’s (HHS-OIG) Chicago Regional Office.

 

The XPC case was prosecuted by Trial Attorneys Benjamin D. Singer and Gejaa T. Gobena of the Criminal Division’s Fraud Section. The DMRC case was prosecuted by Trial Attorney Gejaa T. Gobena, Assistant U.S. Attorney Philip A. Ross of the Eastern District of Michigan and Special Assistant U.S. Attorney Thomas W. Beimers of the Eastern District of Michigan. The cases were investigated by the FBI and HHS-OIG, and were brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Michigan.

 

Since its inception in March 2007, Medicare Fraud Strike Force operations in nine districts have obtained indictments of 1,000 defendants that collectively have billed the Medicare program for more than $2.3 billion. In addition, HHS’s 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 – An owner and a physician associated with a Detroit-area infusion therapy clinic were sentenced to 120 months and 97 months in prison, respectively, for their leading roles in a $2.3 million Medicare fraud scheme, the Departments of Justice and Health and Human Services (HHS) announced. In a separate case, a money launderer was sentenced to one year in prison in connection with a Medicare fraud scheme at a separate Detroit-area clinic.

Juan De Oleo, 51, an owner of Xpress Center Inc. (XPC); Dr. Rosa Genao, 52, a physician associated with XPC; and Noel Freytes, 36, a money launderer for Dearborn Medical Rehabilitation Center (DMRC), were all sentenced by U.S. District Court Judge Denise Page Hood in the Eastern District of Michigan.  In addition to their prison terms, De Oleo and Genao were sentenced to three years of supervised release and were ordered to pay jointly and severally $1.7 million in restitution. Freytes was also sentenced to two years of supervised release and ordered to pay $519,540 in restitution, jointly and severally with his co-defendants.

De Oleo and Genao were convicted after a seven-day trial in August 2010. De Oleo was convicted of one count of conspiracy to commit health care fraud, five counts of health care fraud and two counts of money laundering.  Genao was convicted of one count of conspiracy to commit health care fraud, five counts of health care fraud and one count of destruction or alteration of records.

According to evidence presented at trial, De Oleo and others established XPC for the sole purpose of defrauding Medicare.  XPC was an outpatient clinic that purported to specialize in infusion and injection therapy.  Further, De Oleo and his co-conspirators imported the concept of infusion clinic fraud to Detroit from South Florida after increased law enforcement scrutiny there. 

 

De Oleo enlisted his wife, Genao, to help falsify medical files at XPC to make it appear that the clinic’s patients actually needed the medications being billed to Medicare.  According to the evidence presented at trial, Genao wrote down fictitious symptoms in the patient charts maintained by the clinic in order to justify expensive and exotic medications that the clinic billed to Medicare.

 

Evidence at trial showed that XPC purchased only a small fraction of the medications that the clinic billed the Medicare program for providing.  Patients were prescribed medications at the clinic based not on medical need, but rather on what medications were likely to generate the highest Medicare reimbursements. 

 

Evidence at trial showed that Medicare beneficiaries were not referred to XPC by their primary care physicians, or for any other legitimate medical purpose, but rather were recruited to come to the clinic through the payment of cash kickbacks.  In exchange for those kickbacks, the Medicare beneficiaries would visit the clinic and sign documents indicating that they had received the services billed to Medicare.  

 

As the evidence at trial showed, between approximately November 2006 and March 2007, the defendants submitted approximately $2.3 million in claims to Medicare for injection therapy services that were never provided and were not medically necessary.  Medicare paid approximately $1.7 million of those claims.

In a separate Medicare fraud case, Freytes pleaded guilty in September 2010 to laundering money on behalf of an owner of DMRC, a separate clinic in the Detroit-area. Freytes’ money laundering efforts were designed to disguise the origins of proceeds obtained through a fraudulent infusion therapy scheme at DMRC.  Freytes admitted that he deposited checks from a DMRC account that were made out to a company he owned. Freytes withdrew a large percentage of the money in his company’s account and returned most of it to the co-defendant owners and operators of DMRC.  Freytes admitted to having laundered or having attempted to launder $519,540 on behalf of the DMRC owners.

Today’s sentences were announced by Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney for the Eastern District of Michigan Barbara L. McQuade; Special Agent in Charge Andrew G. Arena of the FBI’s Detroit Field Office; and Special Agent in Charge Lamont Pugh III of the HHS Office of Inspector General’s (HHS-OIG) Chicago Regional Office.

The XPC case was prosecuted by Trial Attorneys Benjamin D. Singer and Gejaa T. Gobena of the Criminal Division’s Fraud Section.  The DMRC case was prosecuted by Trial Attorney Gejaa T. Gobena, Assistant U.S. Attorney Philip A. Ross of the Eastern District of Michigan and Special Assistant U.S. Attorney Thomas W. Beimers of the Eastern District of Michigan. The cases were investigated by the FBI and HHS-OIG, and were brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Michigan. 

 

Since its inception in March 2007, Medicare Fraud Strike Force operations in nine districts have obtained indictments of 1,000 defendants that collectively have billed the Medicare program for more than $2.3 billion.  In addition, HHS’s 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 – A federal court in Detroit has ordered Ypsilanti, Mich., property owner and Washtenaw County Commissioner Ronnie Peterson, and his former manager Glen E. Johnson to pay a total of $82,500 in civil penalties in a sexual harassment case, the Justice Department announced today.   The civil penalty is in addition to the $115,000 jury verdict obtained by the department on behalf of six victims of the sexual harassment in August 2010.

“This decision makes clear that property owners can be held accountable for sexual harassment carried out by their rental agents,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division   “It is disturbing that some landlords will take advantage of vulnerable women and force them to choose between a roof over their heads or being sexually harassed.  It is even more troubling when the harasser is enabled by a property owner who hands him the keys and looks the other way.  Rental property owners must establish clear policies against sexual harassment, provide an avenue for tenants to make complaints directly to them, and take those complaints seriously.” 

“This order ensures that Mr. Johnson will never again be in a position to prey on tenants who desperately need housing, not harassment,” said U.S. Attorney for the Eastern District of Michigan Barbara McQuade.  “It also serves as a warning to other landlords that they will be held accountable if they engage in or enable others to engage in egregious sexual harassment.”    

The order, issued yesterday afternoon by Judge Julian Abele Cook Jr., requires Johnson to pay a $55,000 civil penalty, the maximum civil penalty for a first violation of the Fair Housing Act, and orders Peterson to pay a $27,500 penalty.  The order also permanently bars Johnson from having any further involvement in the management, rental or maintenance of housing.  The order requires Peterson to adopt and implement a comprehensive sexual harassment policy and complaint procedure at his properties. 

In its decision, the court noted that Johnson repeatedly sexually harassed six women tenants and that his behavior “was egregious and interfered with the women’s peaceful enjoyment of their homes, which should have been the one place where they could turn for refuge.”  The court also noted that Peterson had not taken any corrective action after two of his tenants complained to him about Johnson’s contact.  The court noted that Peterson’s conduct was “troubling inasmuch as he was willfully impervious to the complaints from two of his tenants.  At the very least, their troubling comments should have put him on notice that he should have given closer attention to Johnson’s supervisory control over his tenants.”   

Yesterday’s order is the culmination of a successful civil prosecution against Johnson and Peterson carried out jointly by the Justice Department’s Civil Rights Division and the Civil Rights Unit of the U.S. Attorney’s Office for the Eastern District of Michigan.  Department attorneys obtained a $115,000 jury verdict against Johnson and Peterson on Aug. 6, 2010, after a six day trial.  That verdict required Johnson and Peterson to pay monetary damages to six victims of the harassment.  After the verdict, the department asked the court to order civil penalties and issue an injunction to prevent future violations by the defendants.  While damages for victims are awarded by a jury, civil penalties and injunctions must be ordered by the court.  

Fighting illegal housing discrimination is a top priority of the Justice Department.  The federal Fair Housing Act prohibits discrimination in housing based on race, color, religion, national origin, sex, disability and familial status.  More information about the Civil Rights Division and the laws it enforces is available at www.justice.gov/crt .

Individuals who believe that they may have been victims of housing discrimination can call the Housing Discrimination Tip Line at 1-800-896-7743, e-mail the Justice Department at [email protected] or contact the U.S. Department of Housing and Urban Development at 1-800-669-9777.

TUCSON, Ariz. - A federal grand jury yesterday returned a 49-count superseding indictment against Jared Lee Loughner of Tucson for the murder of a federal judge and a Congressional staff member, as well as for causing the deaths of four other participants and injuries to many more during his alleged attempt to assassinate U.S. Representative Gabrielle D. Giffords at her Congress on Your Corner event held on Jan. 8.

Loughner, 22, is charged with the murder of U.S. District Judge John M. Roll and Gabriel M. Zimmerman, a staff member and Director of Community Outreach for Rep. Giffords, according to the new indictment. Loughner will also face charges for causing the death of participants at a federally provided activity, namely the killings of Dorothy J. Morris, Phyllis C. Schneck, Dorwan C. Stoddard, and a child, referred to in the indictment as C-T G., who were shot while waiting to see Rep. Giffords at the Congress on Your Corner event.

 

“This was an attack on Congresswoman Giffords, her constituents, and her staff,” said U.S. Attorney Dennis K. Burke. “We will seek justice for the federal officials, Judge Roll and Gabriel M. Zimmerman, and for Dorothy J. Morris, Phyllis C. Schneck, Dorwan C. Stoddard, and C-T G. These final four Arizonans’ lives were extinguished while exercising one of the most precious rights of American citizens, the right to meet freely and openly with their Member of Congress. The deceased are not the only ones whose rights are being defended. Those citizens who were peaceably assembled to speak to their Member of Congress are also named victims in this indictment. This indictment involves potential death-penalty charges, and Department rules require us to pursue a deliberate and thorough process. That process is ongoing, and we will continue to work diligently to see that justice is done.”

 

The indictment also includes allegations brought forward in a previous indictment in January that Loughner attempted to assassinate Rep. Giffords, who was shot in the head and is undergoing rehabilitation in Houston, and attempted to murder two federal employees who worked for Giffords, District Director Ronald S. Barber and Community Outreach Coordinator Pamela K. Simon, who were both shot multiple times and are recovering.

Loughner will be arraigned on the new charges at a hearing on Wednesday, March 9, in Tucson before U.S. District Judge Larry A. Burns. Loughner has been held in federal custody since Jan. 8. As stated previously, the Pima County Attorney’s Office intends to pursue all state charges against Loughner.

 

An indictment is simply the method by which a person is charged with criminal activity and raises no inference of guilt. An individual is presumed innocent until competent evidence is presented to a jury that establishes guilt beyond a reasonable doubt.

In determining an actual sentence should Loughner be convicted, Judge Burns will also consult the U.S. Sentencing Guidelines, which provide appropriate sentencing ranges. The judge, however, is not bound by those guidelines in determining a sentence.

 

Burke emphasized that the procedure in any case which may result in a punishment of death requires a careful and deliberate process, and includes consultation with the victims of the crimes and their families, consideration of all evidence relevant to guilt and punishment, including aggravating and mitigating evidence, and consultation with all the law enforcement agencies investigating the case.

Also, in order to pursue the death penalty the U.S. Attorney’s Office for Arizona must provide information to the Capital Review Committee. For more detailed information about this process, click here.

 

The investigation preceding the indictment was conducted by a multi-jurisdictional law enforcement team led by the FBI. The prosecution is being handled by Assistant U.S. Attorneys Wallace H. Kleindienst, Beverly K. Anderson, Christina M. Cabanillas and Mary Sue Feldmeier of the District of Arizona, Tucson.

SEATTLE – Arthur Joel Eisenberg of Seattle was sentenced today to three years probation by U.S. District Court Judge John Coughenour, the Justice Department and the Internal Revenue Service (IRS) announced today. Eisenberg pleaded guilty in December 2010 to willfully filing a false individual income tax return.

 

According to court documents filed in this case and statements made in court, Eisenberg admitted to filing a false tax return for 2004 in which he failed to report that he had an interest in or signature authority over financial accounts at UBS AG, one of Switzerland’s largest banks. He also admitted failing to report the income earned on his UBS financial accounts on his tax return. At the end of 2004, the total balance of Eisenberg’s various UBS financial accounts exceeded $3.1 million.

 

As part of his guilty plea, Eisenberg admitted that he opened a bank account at UBS in the Islands as early as 1983. The assets held in the account were later transferred to UBS AG in Zurich. In May of 2004, Eisenberg authorized and caused the formation of a Hong Kong corporation named East West Universal Limited and promptly transferred his assets from his existing UBS account to a new UBS account in the name of the corporation. However, Eisenberg continued to be the beneficial owner of the account and earned income from it through 2008. In 2008, Eisenberg instructed UBS to close the account and transfer the funds in the account to another large global Swiss bank headquartered in Zurich. The highest year-end balance of Eisenberg’s various accounts occurred in 2007 and exceeded $4.2 million.

 

Eisenberg paid a $2.1 million penalty for failing to file a Report of Foreign Bank or Financial Account (FBAR) form.  An FBAR is a form separate from an income tax return that a taxpayer is required to file with the IRS every June to disclose additional information about foreign financial accounts over which the taxpayer has signature authority or other control over, and which had an aggregate value exceeding $10,000 at any time during the year.

Acting Deputy Assistant Attorney General for Offshore Matters Bruce Salad of the Justice Department’s Tax Division and Jenny A. Durkan, U.S. Attorney for the Western District of Washington, commended the investigative efforts of the IRS agents involved in this case, as well as trial attorney Stephanie M. Carowan of the Tax Division and Assistant U.S. Attorney Nicholas W. Brown who prosecuted the case.

WASHINGTON – The former campaign treasurer for Representative Frank LoBiondo of New Jersey pleaded guilty today to embezzling more than $450,000 from the congressman’s election and re-election campaign accounts, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division, U.S. Attorney Paul J. Fishman for the District of New Jersey and Special Agent in Charge Michael B. Ward of the FBI’s Newark, N.J. Field Office.

 

Andrew J. McCrosson Jr., 59, of Egg Harbor Township, N.J., pleaded guilty today before Senior U.S. District Judge Joseph E. Irenas in Camden, N.J., to a two-count criminal information charging him with one count of wire fraud and one count of embezzling and converting funds contributed to a federal candidate.

 

According to the court document, McCrosson was the campaign treasurer for Congressman LoBiondo from 1995 through Aug. 23, 2010. The election and re-election campaign committees were known as LoBiondo for Congress. As campaign treasurer, McCrosson was responsible for maintaining the campaign committee’s financial records, keeping track of contributions to and expenditures of the campaign committee and filing necessary submissions with the Federal Election Commission (FEC.) McCrosson was paid a fee for his services ranging between $3,000 and $8,000, either per election cycle or per calendar year.

 

As outlined in the court document, the campaign committee maintained bank accounts into which campaign contributions were deposited and from which expenditures were paid. During the guilty plea hearing, McCrosson acknowledged that he controlled those bank accounts on behalf of the campaign committee and was responsible for reporting all campaign contributions and expenses to the FEC. McCrosson admitted that from 1995 to August 2010, he wrote checks totaling approximately $458,000 from the LoBiondo for Congress bank accounts to himself without authorization and for no legitimate campaign purpose. According to the court document, McCrosson used the embezzled funds for personal purposes such as the repayment of a federal income tax lien, home mortgage payments, college tuition payments for his children and other living expenses.

 

According to the court document, McCrosson failed to report to the FEC all of the checks he wrote to himself, in an effort to conceal his theft. McCrosson also admitted that he materially misrepresented in these FEC filings the amount of cash on hand held by the campaign committee in its bank accounts to further conceal his embezzlement from Congressman LoBiondo, the campaign committee, the FEC and the public.

 

Congressman LoBiondo represents the Second Congressional District of New Jersey which includes all of Salem, Cumberland and Cape May counties and parts of Gloucester, Atlantic and Burlington counties. McCrosson performed his duties as campaign treasurer for the committee from his home in Marmora, N.J., and later from his home in Egg Harbor Township.

 

Judge Irenas scheduled sentencing for June 16, 2011. The charge of wire fraud carries a maximum prison sentence of 20 years and the charge of embezzlement carries a maximum prison sentence of five years. McCrosson could also be fined on each count up to $250,000 or twice the gross profits to him or loss to the victim. Pending sentencing, the defendant was released on a personal recognizance bond of $100,000.

 

The case was investigated by the FBI and is being prosecuted by Assistant U.S. Attorney Kevin T. Smith, Acting Attorney in Charge of the U.S. Attorney’s Trenton, N.J. branch office, as well as Trial Attorneys Tracee Plowell and Nancy Simmons of the Criminal Division’s Public Integrity Section.

WASHINGTON – David Chiaradio of Westerly, R.I., was sentenced today in U.S. District Court in Providence, R.I., to 97 months in prison and a lifetime of supervised release for distribution and possession of child pornography, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division and U.S. Attorney Peter F. Neronha of the District of Rhode Island. 

 

In November 2010, Chiaradio, 28, was found guilty of one count of distribution of child pornography and two counts of possession of child pornography after a two-day jury trial before U.S. District Court Chief Judge Mary M. Lisi. Evidence presented at trial established that in February 2006, Chiaradio, using Limewire, a peer-to-peer file sharing program, distributed three images of child pornography to an undercover FBI agent.  FBI agents continued their investigation of Chiaradio and obtained a search warrant that was executed at Chiaradio’s home in late August 2006.  During the search, agents seized a laptop and a desktop computer.  The computers and various hard drives were examined by a computer forensics expert from the FBI and more than 2,000 images and videos of child pornography were discovered.

This case was prosecuted by Assistant U.S. Attorney Terrence P. Donnelly of the District of Rhode Island and Trial Attorney Andrew McCormack of the Criminal Division’s Child Exploitation and Obscenity Section.  The case was investigated by the FBI’s Providence Field Office with the assistance of FBI agents from the Innocent Images Task Force in Tulsa, Okla. 

WASHINGTON - Un propietario de una empresa tecnológica con sede en Illinois se ha declarado culpable de participar en una conspiración para defraudar al programa federal E-Rate, anunció hoy el Departamento de Justicia. Barrett C. White fue originalmente acusado en el Tribunal Federal de Distrito en Nueva Orleáns el 18 de noviembre de 2010 por su papel en la conspiración para defraudar al programa E-Rate.

White se declaró culpable hoy en el Tribunal Federal de Distrito en Nueva Orleáns de conspiración para defraudar al programa E-Rate al pagar sobornos y comisiones ilícitas a funcionarios escolares en múltiples estados. El departamento dijo que White participó en la conspiración a partir de febrero de 2004 o fecha aproximada, hasta agosto de 2005. De acuerdo con el expediente judicial, White ofreció y pagó sobornos y comisiones ilícitas a funcionarios escolares responsables por la contratación de servicios de acceso a Internet a cambio de contratos de E-Rate para las empresas de sus coconspiradores.

El programa E-Rate fue creado por el Congreso en la Ley de Telecomunicaciones de 1996 y es administrado por Universal Service Administrative Company, bajo la supervisión de la Comisión Federal de Comunicaciones [Federal Communications Commission (FCC)]. El programa provee subsidios a escuelas y bibliotecas en desventaja económica. Dependiendo de las necesidades financieras de las escuelas solicitantes, el programa paga del 20 al 90 por ciento del costo de acceso a Internet y servicios de telecomunicaciones, así como redes internas de informática y comunicaciones.

Como resultado de la investigación llevada a cabo por la División Antimonopolios del fraude y conducta anticompetitiva en el programa E-Rate, incluida la declaración de culpabilidad de hoy, un total de siete compañías y 21 personas se han declarado culpables, han sido condenadas en juicio o realizaron acuerdos conciliatorios. Dichas empresas y personas han sido sentenciadas a pagar multas penales y restitución por un total de más de 40 millones de dólares. Quince personas han sido sentenciadas a prisión.

Se acusa a White de conspiración, delito que conlleva una pena máxima de cinco años en prisión y una multa penal de 250,000 dólares para individuos. La multa máxima puede aumentar al doble de las ganancias originadas en el delito o el doble de las pérdidas sufridas por las víctimas del delito, si cualquiera de dichas sumas es superior a la multa máxima legal.

La declaración de culpabilidad anunciada hoy es el resultado de una investigación llevada a cabo por la Oficina Local de Dallas de la División Antimonopolios del Departamento de Justicia, la Oficina Local de Dallas del FBI y la Oficina del Inspector General de la FCC, con la asistencia de la Fiscalía Federal para el Distrito Este de Louisiana. Se insta a cualquier persona con información acerca de violaciones del programa E-Rate que llame a la Oficina Local de Dallas de la División Antimonopolios al 214-661-8600 o visite www.justice.gov/atr/contact/newcase.htm.

WASHINGTON - An owner of an Illinois-based technology company has pleaded guilty to participating in a conspiracy to defraud the federal E-Rate program, the Department of Justice announced today.  Barrett C. White was originally charged in U.S. District Court in New Orleans on Nov. 18, 2010, for his role in the conspiracy to defraud the E-Rate program.

 

White pleaded guilty today in U.S. District Court in New Orleans to conspiring to defraud the E-Rate program by providing bribes and kickbacks to school officials in multiple states.  The department said that White participated in the conspiracy beginning on or about February 2004 through August 2005.  According to the court document, White offered and delivered bribes and kickbacks to school officials responsible for the procurement of Internet access services in return for E-Rate contracts to his co-conspirators’ companies.               

 

The E-Rate program was created by Congress in the Telecommunications Act of 1996 and is administered by the Universal Service Administrative Company, under the oversight of the Federal Communications Commission (FCC).  The program provides subsidies to economically disadvantaged schools and libraries.  Depending on the financial needs of the applicant schools, the program pays 20 to 90 percent of the cost for Internet access and telecommunications services, as well as internal computer and communications networks.                                                             

As a result of the Antitrust Division’s investigation into fraud and anticompetitive conduct in the E-Rate program, including today’s plea, a total of seven companies and 21 individuals have pleaded guilty, been convicted at trial or entered civil settlements.  Those companies and individuals have been sentenced to pay criminal fines and restitution totaling more than $40 million.  Fifteen individuals have been sentenced to serve jail time.

 

White is charged with conspiracy, which carries a maximum penalty of five years in prison and a $250,000 criminal fine for individuals.  The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either amount is greater than the statutory maximum fine.

 

The plea announced today resulted from an investigation by the Department of Justice Antitrust Division’s Dallas Field Office, the FBI’s Dallas Field Office and the FCC’s Office of Inspector General, with assistance from the U.S. Attorney’s Office for the Eastern District of Louisiana.  Anyone with information concerning violations of the E-Rate program is urged to call the Antitrust Division’s Dallas Field Office at 214-661-8600 or visit www.justice.gov/atr/contact/newcase.htm.

WASHINGTON – A jury in Natchez, Miss., yesterday convicted a Natchez Police Department officer of violating the civil rights of an arrestee by stealing credit and debit cards from the arrestee.  The officer, Dewayne Johnson, 33, will be sentenced on July 12, 2011.

 

The evidence at trial showed that while Johnson drove a man under arrest to jail, he stopped the patrol car and stole credit and debit cards from the arrestee in his custody.  Johnson’s cousin, Patricia A. Wilson, testified at trial and admitted that Johnson had given one of the stolen cards to her to use for personal purchases.  Wilson further testified that Johnson had used one of the stolen cards to buy sneakers at retail stores in Natchez and that he later admitted to her that he had tried to use a second stolen card.  Evidence at trial showed that the cards were used at a gas station, restaurants and retail stores in Natchez and Vidalia, La.  Wilson, 34, of Ferriday, La., had previously pleaded guilty to conspiring with Johnson to commit identity theft, credit card fraud and bank fraud. 

 

“Every community must be able to rely on their law enforcement officers to serve and protect, and Officer Johnson violated that public trust when he broke the law he had pledged to uphold,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division.  “The department will aggressively prosecute any officer who violates the Constitution.”

 

“This guilty verdict should not reflect negatively on law enforcement or the Natchez Police Department,” said John Dowdy, U.S. Attorney for the Southern District of Mississippi.  “There are thousands of law enforcement officers who maintain the highest level of integrity and professionalism as they put their lives on the line every day, but when a cop goes bad and crosses the line, like this defendant, then they will be prosecuted and punished just like the criminals they arrest every day.”

 

Johnson and a fellow officer, Elvis Prater, 36, were also charged with civil rights offenses related to the physical abuse of two arrestees and with lying to the FBI.  Johnson was also charged with conspiracy to commit identity theft, credit card fraud and bank fraud.  The jury acquitted Prater on one abuse count and failed to reach a verdict on the remaining counts.  Retrial of both officers will begin on June 13, 2011.

 

The case was investigated by the FBI and the Mississippi State Office of the Attorney General, and was prosecuted by trial attorneys Erin Aslan and Kevonne Small of the Justice Department’s Civil Rights Division and Assistant U.S. Attorney Glenda Haynes of the U.S. Attorney’s Office for the Southern District of Mississippi. 

WASHINGTON - A jury in St. Louis today convicted Vernon Wilson, 57, former chief deputy of the Washington County Sheriff’s Department, of violating the civil rights of four former inmates of the Washington County Jail on four separate occasions by beating two of the inmates and by arranging for the beatings of two other inmates, announced the Department of Justice.  Wilson was also convicted of two counts of lying to the FBI about his role in two of the attacks.  Wilson will be sentenced on June 1, 2011.

 

According to evidence presented at trial, on two occasions, Wilson struck the inmates repeatedly in the face, banging their heads into a concrete wall.  Two other times, Wilson orchestrated the beatings of inmates by using another inmate known for fighting to assault them.  Both times Wilson rewarded the inmate for the beatings by giving the inmate cigarettes.  One of the inmates was so severely beaten he had to be hospitalized for his injuries, which included a broken orbital bone.

 

“Wilson used the power of his position to punish these inmates,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division.  “His actions brought shame to his fellow law enforcement officers, but even more than that, they served to undermine our faith and confidence in the criminal justice system.”

“When Vernon Wilson goes to prison, he should not experience the same vulnerability he made his victims feel,” said Dennis L. Baker, Special Agent in Charge of the FBI St. Louis Division.  “Fortunately, the vast majority of the men and women who swore to uphold the law are not like him.”

 

Wilson’s daughter, Valeria Wilson Jackson, 26, previously pleaded guilty on July 14, 2010, to one count of obstruction of justice for lying to the FBI about her role in one of the beatings.

The case was investigated by the St. Louis Division of the FBI and was prosecuted by Fara Gold and Patricia Sumner of the Civil Rights Division of the Department of Justice.

WASHINGTON - A jury in St. Louis today convicted Vernon Wilson, 57, former chief deputy of the Washington County Sheriff’s Department, of violating the civil rights of four former inmates of the Washington County Jail on four separate occasions by beating two of the inmates and by arranging for the beatings of two other inmates, announced the Department of Justice. Wilson was also convicted of two counts of lying to the FBI about his role in two of the attacks. Wilson will be sentenced on June 1, 2011.

 

According to evidence presented at trial, on two occasions, Wilson struck the inmates repeatedly in the face, banging their heads into a concrete wall.  Two other times, Wilson orchestrated the beatings of inmates by using another inmate known for fighting to assault them.  Both times Wilson rewarded the inmate for the beatings by giving the inmate cigarettes.  One of the inmates was so severely beaten he had to be hospitalized for his injuries, which included a broken orbital bone.

 

“Wilson used the power of his position to punish these inmates,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “His actions brought shame to his fellow law enforcement officers, but even more than that, they served to undermine our faith and confidence in the criminal justice system.”

“When Vernon Wilson goes to prison, he should not experience the same vulnerability he made his victims feel,” said Dennis L. Baker, Special Agent in Charge of the FBI St. Louis Division.  “Fortunately, the vast majority of the men and women who swore to uphold the law are not like him.”

 

Wilson’s daughter, Valeria Wilson Jackson, 26, previously pleaded guilty on July 14, 2010, to one count of obstruction of justice for lying to the FBI about her role in one of the beatings.

 

The case was investigated by the St. Louis Division of the FBI and was prosecuted by Fara Gold and Patricia Sumner of the Civil Rights Division of the Department of Justice.

WASHINGTON - Andrew Warren, 43, a former official with the Central Intelligence Agency (CIA), was sentenced today to 65 months in prison on charges of abusive sexual contact and unlawful use of cocaine while possessing a firearm, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division, U.S. Attorney Ronald C. Machen Jr., and Eric J. Boswell, Assistant Secretary of State for Diplomatic Security.

 

Warren pleaded guilty to the charges in June 2010 and was sentenced in U.S. District Court for the District of Columbia by the U.S. District Court Judge Ellen S. Huvelle. Judge Huvelle also sentenced Warren to 10 years of supervised release following his prison term.

During the plea hearing last year, Warren admitted that on Feb. 17, 2008, he committed abusive sexual contact while on U.S. embassy property in Algiers, Algeria, by engaging in sexual contact with a female victim after he rendered her unconscious. Additionally, Warren admitted that on April 26, 2010, he unlawfully used cocaine while possessing a Glock, 9 millimeter semi-automatic pistol in Norfolk, Va.

 

This case was investigated by Diplomatic Security Service; the U.S. Marshals Service in Norfolk; the Bureau of Alcohol, Tobacco, Firearms and Explosives; the Norfolk Police Department; and the Inspector General and the General Counsel of the CIA. The case was prosecuted by Trial Attorney Christine Duey of the Criminal Division’s Human Rights and Special Prosecutions Section, Assistant U.S. Attorney Julieanne Himelstein of the District of Columbia and Assistant U.S. Attorney Steve Haynie from the Eastern District of Virginia.

WASHINGTON - Un jurado en St. Louis condenó hoy a Vernon Wilson, 57, ex ayudante en jefe del Departamento del Alguacil del Condado de Washington, por violar los derechos civiles de cuatro ex presidiarios de la Cárcel del Condado de Washington en cuatro ocasiones distintas, al golpear a dos de los prisioneros y realizar arreglos para golpizas contra los otros dos presidiarios, anunció el Departamento de Justicia. Wilson también fue condenado por dos cargos de mentir al Buró Federal de Investigaciones [Federal Bureau of Investigation (FBI)] acerca de su papel en dos de los ataques. Wilson será sentenciado el 1º de junio de 2011.

De acuerdo con pruebas presentadas en el juicio, en dos ocasiones, Wilson golpeó repetidas veces a prisioneros en el rostro, golpeando sus cabezas contra una pared de cemento. Otras dos veces, Wilson orquestó las golpizas de prisioneros utilizando a otro prisionero conocido por pelear para atacarlos. En ambas oportunidades, Wilson recompensó al prisionero por las golpizas dándole cigarrillos. Uno de los prisioneros recibió una golpiza tan brutal que tuvo que ser hospitalizado por sus lesiones, las que incluyeron un hueso orbital fracturado.

"Wilson utilizó el poder de su cargo para castigar a estos prisioneros", dijo Thomas E. Perez, Secretario de Justicia Auxiliar de la División de Derechos Civiles. "Sus acciones avergüenzan a sus colegas de las fuerzas del orden público, pero más que eso, sirvieron para socavar la fe y la confianza en el sistema de justicia penal".

"Cuando Vernon Wilson vaya a la prisión, no experimentará la misma vulnerabilidad que hizo sentir a sus víctimas", dijo Dennis L. Baker, Agente Especial a Cargo del FBI, División de St. Louis. "Afortunadamente, la gran mayoría de los hombres y mujeres que juraron respetar la ley no son como él".

La hija de Wilson, Valeria Wilson Jackson, 26, se había declarado culpable anteriormente, el 14 de julio de 2010, de un cargo de obstrucción de la justicia por mentir al FBI acerca de su papel en una de las golpizas.

El caso fue investigado por la División de St. Louis del FBI; estuvieron a cargo de la acusación Fara Gold y Patricia Sumner de la División de Derechos Civiles del Departamento de Justicia.

WASHINGTON – An agreement has been reached with the city of Des Moines, Iowa, and the Des Moines Public Library, to improve access to all aspects of civic life for persons with disabilities, the Justice Department today announced.  The agreement was reached under Project Civic Access (PCA), the department’s wide-ranging initiative to ensure that cities, towns and counties throughout the country comply with the Americans with Disabilities Act (ADA).

 

“Access to public programs and facilities is a civil right, and individuals with disabilities must have the opportunity to participate in local government programs, services and activities on an equal basis with their neighbors,” said Thomas E. Perez, Assistant Attorney General of the Civil Rights Division.  “In reaching this agreement, the city of Des Moines and the city’s public library have made an important commitment to residents and visitors with disabilities.” 

 

“I am very pleased that the city of Des Moines and the Department of Justice have reached an amicable agreement in this matter to ensure access to persons with disabilities,” said Nicholas A. Klinefeldt, U.S. Attorney for the Southern District of Iowa.

 

As part of the PCA initiative, Justice Department investigators, attorneys and architects survey state and local government facilities, services and programs in communities across the country to identify the modifications needed for compliance with ADA requirements. The agreements are tailored to address the steps each community must take to improve access.  This agreement is the 188th under the PCA initiative.

 

Under the agreement announced today, Des Moines will take important steps to improve access for individuals with disabilities, such as:

•   Making physical modifications to facilities surveyed by the department so that parking, routes into buildings, entrances, service areas and counters, restrooms, public telephones and drinking fountains are accessible to people with disabilities;
• Surveying other facilities and programs and making modifications wherever necessary to achieve full compliance with ADA requirements;
• Adopting a grievance procedure to deal with complaints of disability discrimination relating to city programs, services, activities and facilities;
• Posting, publishing and distributing a notice to inform members of the public of the provisions of Title II and their applicability to the city’s programs, services, and activities;
• Officially recognizing the Iowa telephone relay service as a key means of communicating with individuals who are deaf, are hard-of-hearing, or have speech impairments and training staff in using the relay service for telephone communications;
• Ensuring that the city’s official website and other web-based services are accessible to people with disabilities; and
• Implementing a comprehensive plan to improve the accessibility of the city’s sidewalks and pedestrian crossings by installing accessible curb ramps throughout Des Moines.

Des Moines, incorporated in 1851, is the capital of and the most populous city in the state of Iowa.  It is located just south of the center of the state.  More than 20 percent of Des Moines residents have a disability and will benefit from this agreement.

 

Today’s agreement was reached under Title II of the ADA, which prohibits discrimination against individuals with disabilities by state and local governments.  The agreement requires most actions to be completed within three years.  For the required accessibility modifications to sidewalks, pedestrian crossings, transportation stops and curb ramps, the city will work with the disability community to prioritize and complete these modifications within seven years.  The department will actively monitor compliance with the agreement, which will remain in effect until the department has confirmed that all required actions have been completed.

 

People interested in finding out more about the ADA, today’s agreement with Des Moines, the PCA initiative or the ADA Best Practices Tool Kit for State and Local Governments can access the ADA Web page at www.ada.gov or call the toll-free ADA Information Line at 800-514-0301 or 800-514-0383 (TTY).

WASHNGTON - Jeffrey Leon Ceaser, un residente del Condado de Montgomery, Ala., fue sentenciado hoy a 36 meses en prisión, anunciaron hoy el Departamento de Justicia y el Servicio de Impuestos Internos [Internal Revenue Service (IRS)]. Además de la sentencia en prisión, se le ordenó a Ceaser pagar 621,738.41 dólares en restitución a los Estados Unidos y cumplir con tres años de libertad bajo supervisión.

De acuerdo con el expediente judicial, entre marzo de 2009 y septiembre de 2009, Ceaser conspiró con terceros para defraudar a los Estados Unidos al presentar 158 declaraciones de impuestos a la renta federales falsas. Ceaser obtuvo fraudulentamente nombres y números de Seguro Social de personas y proporcionó dicha información a Ora Mae Adamson, quien presentó las declaraciones de impuestos falsas sin la autorización de dichas personas. Las declaraciones de impuestos reclamaban falsamente créditos de comprador de primera vivienda y créditos de impuestos al combustible. Los reembolsos de las declaraciones de impuestos falsas fueron depositados en cuentas bancarias controladas por Ceaser y otros coconspiradores. En total, el IRS desembolsó 621,738 dólares en reembolsos de impuestos falsos. Adamson también se declaró culpable de conspiración y cargos de robo de identidad y deberá recibir su sentencia el 10 de marzo de 2011.

John A. DiCicco, Secretario de Justicia Auxiliar Interino de la División de Impuestos del Departamento de Justicia y Leura G. Canary, Fiscal Federal para el Distrito Medio de Alabama, felicitaron a los agentes especiales del IRS que investigaron este caso y los abogados litigantes de la División de Impuestos Jason Poole y Michael Boteler, quienes estuvieron a cargo de la acusación en el caso.

Existe información adicional sobre la División de Impuestos del Departamento de Justicia y su labor de coacción en www.usdoj.gov/tax/. Para obtener información adicional sobre la labor reciente del Departamento de Justicia para acabar con los reclamos fraudulentos de créditos de comprador de primera vivienda, haga clic aquí .

WASHINGTON – Catherine Kissick, a former senior vice president of Colonial Bank and head of its Mortgage Warehouse Lending Division, pleaded guilty today to conspiring to commit bank, wire and securities fraud for her role in a fraud scheme that contributed to the failures of Colonial Bank and Taylor, Bean & Whitaker (TBW).

 

The guilty plea was announced today by Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney Neil H. MacBride for the Eastern District of Virginia; Special Inspector General Neil Barofsky for the Troubled Asset Relief Program (SIGTARP); Assistant Director in Charge James W. McJunkin of the FBI’s Washington Field Office; Michael P. Stephens, Inspector General of the Department of Housing and Urban Development (HUD OIG); Jon T. Rymer, Inspector General of the Federal Deposit Insurance Corporation (FDIC OIG); Steve A. Linick, Inspector General of the Federal Housing Finance Agency (FHFA OIG); and Victor F. O. Song, Chief of the Internal Revenue Service (IRS) Criminal Investigation.

 

Kissick, 50, of Orlando, Fla., pleaded guilty before U.S. District Judge Leonie M. Brinkema in the Eastern District of Virginia. Kissick faces a maximum penalty of 30 years in prison when she is sentenced on June 17, 2011. In a related action, the U.S. Securities and Exchange Commission (SEC) today filed an enforcement action against Kissick in the Eastern District of Virginia.

 

 

According to court documents, Kissick admitted that from 2002 through August 2009, she and her co-conspirators, including former TBW chairman Lee Farkas, engaged in a scheme to defraud various entities and individuals, including Colonial Bank, a federally-insured bank; Colonial BancGroup Inc.; the Troubled Asset Relief Program (TARP); and the investing public. Kissick admitted that she knowingly and intentionally placed Colonial Bank and Colonial BancGroup at significant risk by causing them to purchase and hold more than $400 million in assets on their books that had no value.

 

Court documents state that in early 2002, TBW began running overdrafts in its master bank account at Colonial Bank because of TBW’s inability to meet its operating expenses, which included payroll, servicing payments owed to third-party purchasers of loans and/or mortgage-backed securities and other obligations. Kissick and her co-conspirators engaged in a series of fraudulent actions to cover up the overdrafts, first by sweeping overnight money from one TBW account with excess funds into another, and later through the fictitious “sales” of mortgage loans to Colonial Bank, a fraud scheme the conspirators dubbed “Plan B.” The conspirators accomplished this by sending mortgage data to Colonial Bank for loans that did not exist or that TBW had already committed or sold to other third-party investors. Kissick admitted that she knew and understood she and her co-conspirators had caused Colonial Bank to pay TBW for assets that were worthless to the bank.

 

According to court documents, Kissick and her conspirators also caused TBW to engage in sales to Colonial Bank of fictitious trades that had no collateral backing them and had no value. Kissick or another co-conspirator at Colonial Bank were the points of contact for conspirators at TBW when the mortgage company needed an advance from the bank, and Kissick would generally discuss new advances with Farkas before releasing the funds to TBW. Conspirators at TBW would wire a request that included false documentation purporting to represent the sale of the trades to Colonial Bank to support the release of the funds. Kissick and others caused the false information to be entered into Colonial Bank’s books and records, giving the appearance that Colonial Bank owned a 99 percent interest in legitimate securities, when in fact the securities had no value and could not be sold.

 

In the fall of 2008, Colonial BancGroup submitted an application to obtain $570 million in taxpayer funding through the Capital Purchase Program, a sub-program of the U.S. Treasury Department’s TARP program. Court documents indicate that in connection with the application, Colonial BancGroup submitted financial data and filings that included materially false information related to mortgage loan and securities assets held by Colonial Bank as a result of the fraudulent scheme perpetrated by Kissick and her co-conspirators. Colonial BancGroup never received the TARP funding, and Kissick admitted that she deleted and instructed members of her staff to delete electronic communications on their Blackberry PDAs to evade subpoenas for documents from the Special Inspector General for TARP.

 

In August 2009, the Alabama State Banking Department, Colonial Bank’s regulator, seized the bank and appointed the FDIC as receiver. Colonial BancGroup also filed for bankruptcy in August 2009.

 

In June 2010, Farkas was arrested and charged in a 16-count indictment for his role in the fraud scheme. His trial is scheduled to begin in April 2011. An indictment is merely a charge and a defendant is presumed innocent until proven guilty. Desiree Brown, the former treasurer of TBW, pleaded guilty on Feb. 24, 2011, for her role in the fraud scheme.

 

The case is being prosecuted by Deputy Chief Patrick Stokes and Trial Attorney Robert Zink of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Charles Connolly and Paul Nathanson of the Eastern District of Virginia.  This case was investigated by SIGTARP, FBI’s Washington Field Office, FDIC OIG, HUD OIG, FHFA OIG and the IRS Criminal Investigation.  The Financial Crimes Enforcement Network (FinCEN) of the Department of the Treasury also provided support in the investigation.

 

This case was brought in coordination with the President’s Financial Fraud Enforcement Task Force, which 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.  The task force is also making the public aware of resources available to protect against these types of fraud and how to report fraud when it occurs.  To learn more about the task force visit its website, www.StopFraud.gov .   

WASHINGTON - A federal jury in Decatur, Ala., has convicted Eddie Pressley, a former U.S. Army Major, and his wife, Eurica Pressley, on 22 counts in connection with a bribery and money laundering scheme related to defense contracts awarded in support of Operation Iraqi Freedom, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division.

 

Eddie and Eurica Pressley were found guilty yesterday of one count of bribery, one count of conspiracy to commit bribery, eight counts of honest services fraud, one count of money laundering conspiracy and 11 counts of engaging in monetary transactions with criminal proceeds.

 

The case against the Pressleys arose from a corruption probe focusing on Camp Arifjan, a U.S. military base in Kuwait.  As a result of this investigation, 16 individuals including the Pressleys, have pleaded guilty or been found guilty at trial for their roles in the scheme. 

 

“The Pressleys are the latest in a line of 16 defendants to be convicted at trial or plead guilty for the bribery scheme at Camp Arifjan,” said Assistant Attorney General Breuer.  “Eddie Pressley recruited his wife to join him in an audacious plan to take bribes in exchange for official contracting action on behalf of the U.S. Army, and together they accepted nearly $3 million in illegal payments.  They hid their criminal proceeds in off-shore bank accounts and spent their gains on lavish personal items. Thanks to the hard work and dedication of prosecutors from the Criminal Division’s Public Integrity Section and federal law enforcement agents, the Pressleys are today facing the consequences for their flagrant betrayal of the public trust.”

 

“The government places special trust in its contracting officers, whether military or civilian, and the egregious behavior exhibited in this case undermines the tremendous efforts by those honorable service members and civilians risking their lives to protect U.S. interests,” said Special Agent in Charge Robert E. Craig Jr. for the Defense Criminal Investigative Service-Mid-Atlantic Field Office. “The Defense Criminal Investigative Service continues to aggressively investigate and bring to justice those who, for their own personal gain, criminally violate the special trust and confidence instilled in them by the Department of Defense.”

 

“This guilty verdict of the Pressley’s sends a very strong message to all who attempt to defraud the U.S. Army,” said James Podolak, Director of Army Criminal Investigation Division’s Major Procurement Fraud Unit. “Regardless of how perpetrators attempt to disguise their thievery, we will ultimately catch them and we will work diligently to see them brought to justice. Secret bank accounts abroad and an elaborate bribery scheme are not enough to hide illegal actions from our specially-trained Army CID Special Agents working in cooperation with our other law enforcement partners.”

 

“Today’s verdict demonstrates the value IRS Criminal Investigation brings to multi-agency investigations,” said Victor Song, Chief, Internal Revenue Service-Criminal Investigation (IRS-CI.)  “Our expertise in following the money in this case, along with the collective efforts of our law enforcement partners, has resulted in justice for the American taxpayer.”

 

Evidence presented at trial demonstrated that Eddie Pressley took various contracting actions to benefit certain contractors who paid him bribes, including Terry Hall. Pressley served as a U.S. Army contracting official at Camp Arifjan between 2004 and 2005. From spring 2004 through fall 2007, Hall operated and had an interest in several companies, including Freedom Consulting and Catering Co. and Total Government Allegiance.  In February 2005, Eddie Pressley arranged for Hall to obtain a blanket purchase agreement (BPA) to deliver goods and services to the U.S. Department of Defense (DoD) and its components in Kuwait and elsewhere.

 

A BPA is a type of contract by which the DoD agrees to pay a contractor a specified price for a particular good or service. Based on a BPA, the DoD orders the supplies on an as-needed basis. The contractor is then obligated to deliver the supplies ordered at the price agreed upon in the BPA. The term for such an order by the DoD is a “call.”

 

According to Hall’s testimony and other evidence presented at trial, Pressley demanded a $50,000 bribe before he would issue bottled water calls to Hall. Hall testified that in April 2005, he and his associates arranged for Pressley to receive the money in a bank account established in the name of a shell company, EGP Business Solutions Inc.

 

Hall’s testimony and other evidence at trial showed that soon after the $50,000 bribe was paid, Pressley and John Cockerham, another U.S. Army contracting official, increased the bribe demand to $1.6 million, which consisted of $800,000 for Pressley and $800,000 for Cockerham. After Hall and others agreed to pay the money, Pressley and Cockerham took various official acts to benefit Hall, including, among other things, issuing calls for bottled water and fencing, arranging for Hall to receive a fence contract, and modifying Hall’s BPA to remove the upper limit of the money Hall could receive from the DoD under the bottled water BPA.

 

Evidence at trial also showed that Eddie Pressley enlisted the help of his wife, Eurica, to receive the bribes. On March 9, 2005, he sent his wife an e-mail in which he told her, among other things, “You will be getting some paperwork with your maiden name on it,” “I need you to sign it and mail to whatevery (sic) address on it,” “I am doing some consulting,” and “Of course I am not going to turn down any money, but I can’t have anyone paying me in my name because I am in the military so I had them put everything in your maiden name.”

 

According to evidence presented at trial, Eurica Pressley traveled to Dubai in May 2005 and to the Cayman Islands in June 2005 to open bank accounts to receive the bribe money. She also took control of the U.S.-based account in the name of EGP Business Solutions Inc. A law enforcement agent testified at the trial about various false and misleading statements Eurica Pressley made to him during a voluntary interview at her home, including her denial that she had any foreign bank accounts. In addition, the evidence presented at trial demonstrated that Eddie and Eurica Pressley, Hall and others attempted to conceal the true nature of their corrupt scheme by having Eurica Pressley execute bogus “consulting agreements.” They also prepared false invoices that were designed to justify the bribe payments as payment for non-existent “consulting services.”

 

Bank statements and wire transfer reports demonstrated that, in total, the Pressleys received approximately $2.9 million in bribe payments, approximately $1.6 million of which consisted of payments from other contractors that Hall facilitated for Eddie Pressley. Bank statements, wire transfer reports and other records presented at trial showed that the Pressleys used the money to purchase real estate, expensive automobiles and home decorating services, among other things.

 

Former U.S. Army Major James Momon also testified at trial that Pressley and Cockerham recruited him to join the bribe scheme and that he took various official acts to receive bribes from some of the same contractors who paid Pressley and Cockerham, including Hall. Additionally, he testified that Pressley told him that if they got caught they would spend “six years in jail” and that Cockerham and Pressley warned him to be careful.

 

Eddie and Eurica Pressley each face a maximum sentence of 15 years in prison for bribery, five years in prison for conspiracy, 20 years in prison for each of the eight counts of honest services fraud, 20 years in prison for money laundering conspiracy and 15 years in prison for each of the counts of engaging in monetary transactions with criminal proceeds.  They also face maximum fines of $250,000 per count. Following the guilty verdict, the defendants agreed to forfeit $27,178,407. U.S. District Judge Virginia Emerson Hopkins scheduled sentencing for June 29, 2011. 

 

On Feb. 18, 2010, Hall pleaded guilty to bribery conspiracy and money laundering conspiracy and agreed to forfeit $15.7 million to the U.S. government in connection with his payment of more than $3 million in bribes to Cockerham, Eddie Pressley, Momon and Christopher Murray.

On Aug. 13, 2009, Momon pleaded guilty to receiving approximately $1.6 million in bribes and agreed to pay $5.7 million in restitution.  On Jan. 8, 2009, Murray pleaded guilty to charges of bribery and making a false statement.  He was sentenced on Dec. 17, 2009, to 57 months in prison and ordered to pay $245,000 in restitution.

On Jan. 31, 2008, Cockerham pleaded guilty to participating in a bribery and money laundering scheme at Camp Arifjan.  He was sentenced on Dec. 2, 2009, to 210 months in prison and ordered to pay $9.6 million in restitution.

 

The case is being prosecuted by Trial Attorneys Peter C. Sprung and Edward J. Loya Jr. of the Criminal Division’s Public Integrity Section. The case is being investigated by special agents of the Defense Criminal Investigative Service, the Army Criminal Investigation Command Division , IRS-CI, the FBI’s Washington Field Office and the Special Inspector General for Iraq Reconstruction.

WASHINGTON - La fabricante de medicamentos Forest Pharmaceuticals Inc. fue sentenciada hoy por la Juez Federal de Distrito Nancy Gertner a pagar una multa penal de 150 millones de dólares y a la confiscación de activos por 14 millones de dólares después de que la empresa se declarara culpable en noviembre de 2010 de un cargo penal de obstrucción de la justicia, un delito menor de distribuir un medicamento nuevo no aprobado en comercio interestatal y un delito menor de distribuir un medicamento indebidamente rotulado en comercio interestatal, anunció el Departamento de Justicia. La empresa, una subsidiaria de Forest Laboratories Inc. con sede en la Ciudad de Nueva York, se declaró culpable de cargos relacionados con la obstrucción de una inspección regulatoria de la Administración de Fármacos y Alimentos [Food and Drug Administration (FDA)], la distribución de Levothroid, en dicho momento un medicamento nuevo no aprobado, y la promoción ilegal del medicamento antidepresivo Celexa para su uso en el tratamiento de niños y adolescentes.

La sentencia emitida contra Forest hoy fue el componente final de una resolución global por un total de más de 313 millones de dólares en resolución de alegatos penales y civiles contra Forest y su empresa madre en conexión con la distribución y comercialización de ciertos medicamentos. En septiembre de 2010, Forest Laboratories y Forest Pharmaceuticals realizaron un acuerdo civil en resolución de cargos de violación de la Ley de Reclamos Falsos asociados a tres de sus medicamentos. Levothroid, Celexa y Lexapro. Como parte del acuerdo conciliatorio civil, Forest aceptó pagar más de 149 millones de dólares, incluidos más de 88 millones de dólares al gobierno federal y más de 60 millones de dólares a los estados.

De acuerdo con el expediente judicial, Forest Pharmaceuticals comenzó a distribuir el Levothroid para el tratamiento del hipotiroidismo a principios de la década de 1990 sin haber obtenido primero la aprobación de la FDA. En 1997, la FDA, después de haber determinado que los medicamentos eran médicamente necesarios, les dio a los fabricantes un plazo determinado para conducir los estudios necesarios y obtener la aprobación de la FDA. En 2001, la FDA indicó que seguiría permitiendo a los fabricantes de medicamentos de sodio de levotiroxina no aprobados distribuir sus medicamentos no aprobados después del 14 de agosto de 2001, bajo ciertas condiciones. Una de esas condiciones era que cualquier fabricante que no hubiera obtenido la aprobación necesaria debía realizar una reducción gradual de la distribución de su medicamento no aprobado hasta obtener la aprobación de la FDA. De acuerdo con el expediente judicial, Forest tomó la decisión deliberada de seguir distribuyendo su producto Levothroid no aprobado en cantidades muy superiores a las permitidas por el plan de reducción gradual de la distribución de la FDA.

La FDA envió una carta de advertencia a Forest Pharmaceuticals el 7 de agosto de 2003, informando a la empresa que ya no tendría derecho a distribuir su producto Levothroid no aprobado.

De acuerdo con los fiscales a cargo de la acusación, después de haber recibido la carta, Forest instruyó a sus empleados en su centro de distribución de St. Louis que trabajaran horas extras hasta aproximadamente la 1 de la mañana siguiente y que, durante ese tiempo, siguieran embarcando todo el Levothroid no aprobado posible.

El expediente judicial también indica que Forest obstruyó una inspección regulatoria de la FDA relacionada con Levothroid en la fábrica de Cincinnati de Forest en noviembre de 2003. De acuerdo con los fiscales, el personal gerencial en la fábrica de Cincinnati sabía que el malfuncionamiento grave de equipos había resultado en condiciones de prueba que, por centenas de días y miles de horas, no cumplían con las exigencias de la FDA para el Levothroid fabricado para fines de investigación. Los fiscales indicaron que, en un intento de corregir este problema, ciertos miembros de la gerencia de Forest en la fábrica de Cincinnati decidieron utilizar un humidificador doméstico portátil en la sala de pruebas como solución temporal. Más tarde, cuando los inspectores de la FDA vieron este humidificador en la sala de pruebas durante una inspección regulatoria de la fábrica, ciertos miembros de la gerencia dijeron falsamente a los investigadores que simplemente se estaba guardando el humidificador portátil en la sala y que el mismo no había sido utilizado para controlar la humedad. Esta conducta fue la base para el cargo de delito mayor de obstrucción del que Forest se declaró culpable.

Forest detuvo su distribución comercial de su versión no aprobada de Levothroid a partir del 9 de agosto de 2003. Desde el otoño de 2003, Forest ha venido distribuyendo comercialmente otro medicamento de sodio de levotiroxina administrado oralmente, también llamado Levothroid. Esta resolución no está asociada a dicha producto.

Con respecto a Celexa, el expediente judicial indica que Forest promovió el uso del medicamento en tratamientos para niños y adolescentes que padecen depresión, a pesar del hecho de que la FDA solo había aprobado el medicamento para el tratamiento de la depresión adulta. Los fiscales indicaron que la promoción por Forest del uso no aprobado consistió en diversas técnicas de ventas, incluidos instruir a sus representantes que promovieran el uso de Celexa en llamadas de ventas a médicos que trataban a niños y adolescentes, y la contratación de oradores externos para que hablaran a especialistas pediátricos sobre los beneficios de recetar Celexa a niños y adolescentes. Los fiscales indicaron que, en conjunto con esta promoción de uso no aprobado, Forest publicitó enérgicamente los resultados positivos del estudio doble ciego controlado por placebo sobre el uso de Celexa en adolescentes mientras que, al mismo tiempo, Forest Pharmaceuticals ocultó los resultados negativos de un estudio europeo doble ciego y controlado por placebo contemporáneo sobre el uso de Celexa en adolescentes.

"Forest Pharmaceuticals se declaró culpable de obstruir la justicia y comercializar medicamentos para usos no aprobados, incluida la promoción indebida de un antidepresivo para uso en niños y adolescentes", dijo Tony West, Secretario de Justicia Auxiliar de la División de lo Civil del Departamento de Justicia. "Como demuestra la sentencia estricta del tribunal, no solo es inaceptable dicha conducta, sino que los contribuyentes no deben tener que pagar la cuenta por prácticas que violan la ley. "

"Tanto los casos penales como civiles se basaron en el hecho de que Forest Pharmaceuticals tomó una decisión calculada de dar mayor prioridad a aumentar las ventas de la empresa que en cumplir con las exigencias básicas legales que el Congreso y la FDA crearon para proteger al público estadounidense", dijo Carmen Ortiz, Fiscal Federal para el Distrito de Massachusetts.

Además de su sentencia de hoy, y habiendo aceptado previamente un acuerdo conciliatorio civil, Forest también ya había firmado un Acuerdo de Integridad Empresarial con el Departamento de Salud y Servicios Humanos, Oficina del Inspector General [Department of Health and Human Services, Office of Inspector General (HHS-OIG)].

"La sentencia de hoy contra Forest Pharmaceuticals es una victoria para el sistema diseñado para proteger a los pacientes contra medicamentos bajo receta potencialmente nocivos", dijo Daniel R. Levinson, Inspector General del Departamento de Salud y Servicios Humanos. "Los intentos de evadir dicho sistema al vender medicamentos indebidamente rotulados y sin aprobación sencillamente no se tolerarán".

El caso penal fue investigado y enjuiciado por el Fiscal Federal Auxiliar James E. Arnold de la Fiscalía Federal para el Distrito de Massachusetts y el Abogado Litigante Jeffrey I. Steger de la Oficina de Litigio de Consumo del Departamento de Justicia. El caso fue investigado por agentes del FBI, la HHS-OIG, la Oficina de Investigaciones Penales de la FDA y la Oficina del Inspector General del Departamento de Asuntos Veteranos. También brindaron asistencia la Oficina del Consejero General y la Oficina de Administración de Personal de la FDA.

WASHINGTON -- Drug manufacturer Forest Pharmaceuticals Inc. was sentenced today by U.S. District Judge Nancy Gertner to pay a criminal fine of $150 million and forfeit assets of $14 million following the company’s guilty plea in November 2010 to one felony count of obstructing justice, one misdemeanor count of distributing an unapproved new drug in interstate commerce and one misdemeanor count of distributing a misbranded drug in interstate commerce, the Justice Department announced. The company, a subsidiary of New York City-based Forest Laboratories Inc., pleaded guilty to charges related to obstruction of an FDA regulatory inspection, to the distribution of Levothroid, which at the time was an unapproved new drug, and to the illegal promotion of the anti-depressant drug Celexa for use in treating children and adolescents.

Today’s sentencing of Forest was the final component of a global resolution totaling more than $313 million to resolve criminal and civil allegations against Forest and its parent company in connection with the distribution and marketing of certain drugs. In September 2010, Forest Laboratories and Forest Pharmaceuticals entered a civil settlement to resolve False Claims Act charges involving three of its drugs: Levothroid, Celexa and Lexapro. As part of the civil settlement, Forest agreed to pay more $149 million, including more than $88 million to the federal government and more than $60 million to the states.

According to court documents, Forest Pharmaceuticals began distributing Levothroid for treatment of hypothyroidism in the early 1990s without first obtaining Food and Drug Administration (FDA) approval. In 1997, the FDA, after determining that the drugs were medically necessary, gave manufacturers a certain amount of time to conduct the necessary studies and obtain FDA approval. In 2001, the FDA stated that it would continue to permit manufacturers of unapproved levothyroxine sodium drugs to distribute their unapproved drugs after Aug. 14, 2001, on certain conditions. One of those conditions was that any manufacturer which had not obtained approval needed to comply with a gradual distribution phase-down of its unapproved drug until it obtained FDA approval. According to court documents, Forest made a deliberate decision to continue distributing its unapproved Levothroid product in quantities far exceeding the amounts permitted by the FDA’s distribution phase-down plan.

The FDA sent a warning letter to Forest Pharmaceuticals on Aug. 7, 2003, informing the company that it was no longer entitled to distribute its unapproved Levothroid product.

According to prosecutors, after Forest received the letter, the company directed its employees at its St. Louis distribution center to work overtime until approximately 1:00 a.m. the following morning and, during that time, to continue shipping as much of its unapproved Levothroid as possible.

Court documents also indicate that Forest obstructed an FDA regulatory inspection relating to Levothroid at Forest’s Cincinnati plant in November 2003. According to prosecutors, management personnel at the Cincinnati plant were aware that serious equipment malfunctions had resulted in testing conditions that, for hundreds of days and thousands of hours, did not comply with the FDA’s requirements for Levothroid that had been manufactured for research purposes. Prosecutors stated that in an attempt to remedy this problem, certain Forest management personnel at the Cincinnati plant decided to use a portable home humidifier in the testing room as a temporary fix. Later, when FDA inspectors saw this humidifier in the testing room during a regulatory inspection of the plant, certain management personnel falsely told the investigators that the portable humidifier was merely being stored in the room and had not been used for humidity control. This conduct was the basis for the felony obstruction charge to which Forest pleaded guilty.

Forest halted its commercial distribution of its unapproved version of Levothroid as of August 9, 2003. Since the fall of 2003, Forest has been commercially distributing a different orally administered levothyroxine sodium drug, also called Levothroid. This resolution does not involve that product.

Regarding Celexa, court documents state that Forest promoted the drug for use in treating children and adolescents suffering from depression despite the fact that the FDA had only approved the drug to treat adult depression. Prosecutors stated that Forest’s off-label promotion consisted of various sales techniques, including directing its representatives to promote pediatric use of Celexa in sales calls to doctors who treated children and adolescents, and hiring outside speakers to talk to pediatric specialists about the benefits of prescribing Celexa to children and teens. Prosecutors stated that in conjunction with this off-label promotion, Forest aggressively publicized the positive results of a double-blind, placebo-controlled Forest study on the use of Celexa in adolescents while, at the same time, Forest Pharmaceuticals suppressed the negative results of a contemporaneous double-blind, placebo-controlled European study on the use of Celexa in adolescents.

" Forest Pharmaceuticals pleaded guilty to obstructing justice and marketing drugs for unapproved uses, including improperly promoting an anti-depressant to children and adolescents," said Tony West, Assistant Attorney General for the Justice Department’s Civil Division. "As the court’s stiff sentence demonstrates, not only is such conduct unacceptable, taxpayers should not foot the bill for practices that violate the law."

 

“Both the criminal and civil cases were predicated upon the fact that Forest Pharmaceuticals made a calculated decision to place a higher priority on increasing corporate sales than on complying with the basic, legal requirements that Congress and the FDA created to protect the American public,” said Carmen Ortiz, U.S. Attorney for the District of Massachusetts.

 

In addition to its sentence today, and previously agreeing to a civil settlement, Forest also previously signed a Corporate Integrity Agreement with the Department of Health and Human Services, Office of Inspector General (HHS-OIG).

"Today’s sentencing of Forest Pharmaceuticals is a victory for the system designed to protect patients from potentially harmful prescription drugs," said Daniel R. Levinson, Inspector General of the Department of Health & Human Services. "Attempts to circumvent that system by selling misbranded and unapproved drugs simply will not be tolerated."

The criminal case was investigated and prosecuted by Assistant U.S. Attorney James E. Arnold of the U.S. Attorney’s Office for the District of Massachusetts and Trial Attorney Jeffrey I. Steger of the Justice Department’s Office of Consumer Litigation. The case was investigated by agents from the FBI, the HHS-OIG, the FDA’s Office of Criminal Investigations and the Department of Veterans Affairs’ Office of Inspector General. Assistance was also provided by the FDA’s Office of General Counsel and the Office of Personnel Management.

WASHINGTON – Jeffery Leon Ceaser, a resident of Montgomery County, Ala., was sentenced today to 36 months in prison, the Justice Department and the Internal Revenue Service (IRS) announced today. In addition to the prison sentence, Ceaser was also ordered to $621,738.41 in restitution to the United States and serve three years of supervised release.

According to court documents, between March 2009 and September 2009, Ceaser conspired with others to defraud the United States by filing 158 false federal income tax returns. Ceaser fraudulently obtained names and Social Security numbers of individuals and provided that information to Ora Mae Adamson, who filed the false tax returns without authorization from the individuals. The tax returns falsely claimed the first-time home buyer credits and fuel tax credits. The refunds from the false tax returns were deposited into bank accounts controlled by Ceaser and other co-conspirators. In all, the IRS disbursed $621,738 in false tax refunds. Adamson has also pleaded guilty to conspiracy and identity theft charges and is scheduled to be sentenced on March 10, 2011.

John A. DiCicco, Acting Assistant Attorney General for the Justice Department’s Tax Division and Leura G. Canary, U.S. Attorney for the Middle District of Alabama, commended the IRS special agents who investigated this case and Tax Division trial attorneys Jason Poole and Michael Boteler, who prosecuted the case.

More information about the Justice Department’s Tax Division and its enforcement efforts is available at www.usdoj.gov/tax/. Additional information about the Justice Department’s recent efforts to combat fraudulent claims for the first-time home buyer tax credit is available here

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WASHINGTON - Teresa Little Moss, a tax return preparer from McCormick, S.C., was sentenced today to 30 months in prison by U.S. District Judge J. Michelle Childs in Greenville, S.C., the Justice Department and Internal Revenue Service (IRS) announced.

On Oct. 14, 2010, Moss, formerly known as Teresa Waller Little, pleaded guilty to two counts of aiding and assisting in the preparation of false tax returns. According to court documents, Moss owned and operated The Little Tax Shop, a tax return preparation business with locations in McCormick and Abbeville, S.C.. The business served clients from throughout the state. For tax years 2004 through 2007, she willfully prepared, and aided and assisted in the preparation of, materially false tax returns for numerous clients.

The charges to which Moss pleaded guilty relate to the 2005 and 2006 tax returns of a particular client. The tax loss associated with these charged counts was $18,977. Including relevant conduct, the tax loss associated with this case was $557,429.

Acting Assistant Attorney General John A. DiCicco of the Justice Department’s Tax Division commended the investigative efforts of the IRS agents involved in the case and Tax Division trial attorneys Tracy Gostyla and Michelle Petersen, who prosecuted the case.

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

WASHINGTON – Victor Kaganov, who emigrated from Russia and set up numerous shell corporations in Oregon on behalf of Russian clients, pleaded guilty today to charges of operating an unlicensed money transmitting business, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division and U.S. Attorney Dwight C. Holton for the District of Oregon. The shell corporations were used to move more than $172 million into the United States and out to more than 50 countries.

"Using shell corporations to hide his illegal activities, Mr. Kaganov funneled more than $170 million into the United States and then back out to more than 50 countries around the world," said Assistant Attorney General Breuer. "Following the money trail is a hallmark of good law enforcement, but those efforts depend on transparency in financial transactions. Now more than ever, we are determined to bring to justice those who attempt to hide funds in U.S. financial institutions."

"When shell corporations are illegally manipulated in the shadows to hide the flow of tens of millions dollars overseas, it threatens the integrity of our financial system.  Sunshine kills the stink of corruption – our laws aim to bring the sunshine in, and we will enforce these laws vigorously," said U.S. Attorney Holton.

"We will not allow Oregon to be used like the corner ATM for people in foreign countries," said Arthur Balizan, Special Agent in Charge of the FBI in Oregon. "Crimes like these eat away at the stability and prosperity of the American financial system."

Kaganov, 69, a naturalized U.S. citizen living in Tigard, Ore., pleaded guilty to one count of operating an unlicensed money transmitting business after more than 4,200 wire transactions had been made. Kaganov was charged with the offense on March 3, 2010.

According to court documents, Kaganov emigrated from Russia to the United States in 1998. In order to move money in and out of the United States, Kaganov created various shell corporations under Oregon law, and then opened bank accounts into which he deposited money he received from his Russian clients. Kaganov admitted he would then wire the money out of the accounts based on wire instructions he received from his clients.

According to court documents, Kaganov did not comply with Oregon laws requiring him to obtain a license to operate the money transmitting business and he failed to register his money transmitting operation with the U.S. Department of Treasury, as required by federal statutes and regulations.

At sentencing, scheduled for April 19, 2011, Kaganov faces a maximum penalty of five years in prison, a $250,000 fine and three years of supervised release following the prison term. However, as part of Kaganov’s plea agreement, the government has agreed to recommend a sentence of not more than 18 months. 

This case was investigated by the FBI as part of a larger investigation into the use of Oregon shell corporations by foreign businesses and individuals to facilitate the movement of illicit funds.  This case included significant assistance received from FBI field offices located throughout the United States, as well as various FBI Legal Attaché offices in Europe and Asia.

This case is being prosecuted by Assistant U. S. Attorney and Senior Litigation Counsel Allan M. Garten for the District of Oregon, Trial Attorney Robert Livermore of the Criminal Division’s Organized Crime and Racketeering Section and Trial Attorney Michael Mosier of the Criminal Division’s Asset Forfeiture and Money Laundering Section.

WASHINGTON—David L. Place, owner of Manor House Antiques Cooperative in Nantucket, Mass., was sentenced to 33 months in prison for illegally importing and trafficking in Narwhal tusks and Sperm Whale teeth, the Department of Justice and the National Oceanic and Atmospheric Association (NOAA) announced today.

On Nov. 19, 2010, a federal jury in Boston convicted Place of eight counts including conspiracy, Lacey Act violations and smuggling for buying and illegally importing Sperm Whale teeth and Narwhal tusks into the United States, as well as selling the teeth and tusks after their illegal importation. The market value of the teeth and tusks illegally imported and sold by Place was determined to be between $200,000 and $400,000. One of Place’s co-conspirators, Andrei Mikhalyov of Odessa, Ukraine, pleaded guilty in federal court in Boston on related charges. Mikhalyov served a nine month prison sentence and was deported to the Ukraine.

Sperm Whales are listed as “endangered” under the Endangered Species Act (ESA), and are listed on Appendix I of the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES). Narwhals are listed as “threatened” under the ESA, and are listed on Appendix II of CITES. It is illegal to import parts of either the Sperm Whale or the Narwhal into the United States without the requisite permits/certifications, and without declaring the merchandise at the time of importation to U.S. Customs and Border Protection and the U.S. Fish and Wildlife Service.

“The unlawful importation of endangered species is a serious crime that the Justice Department is committed to stopping,” said Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division of the Department of Justice. “We will not tolerate the illegal market in endangered species such as the Narwhal and the Sperm Whale, and we will continue to prosecute those who violate the law.”

“NOAA takes its responsibilities for protection of marine species under the Endangered Species Act and CITES very seriously,” said Eric Schwaab, Assistant Administrator for NOAA's Fisheries Service. “We applaud today's decision and hope it serves as a strong warning to others who would harm threatened or endangered species for commercial gain.”

The case was investigated by agents from the Law Enforcement Offices of NOAA, U.S. Fish and Wildlife Service and Immigration and Customs Enforcement. The case was prosecuted by Trial Attorneys Gary N. Donner and James B. Nelson of the Department of Justice’s Environmental Crimes Section.

WASHINGTON - FBI agents today arrested four people in connection with an armed home invasion robbery in Bartonsville, Penn., announced Assistant Attorney General Lanny A. Breuer of the 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.

A federal grand jury in Philadelphia returned the seven-count indictment unsealed today, which charges Buu Huu Truong, aka "Thanh," 35, of Upper Darby, Penn.; Den Van Nguyen, aka "Son," 40, of Philadelphia; Tahn Le, 43, of Philadelphia; and Thach Van Truong aka "Michael," 33, of Wall Township, N.J. The defendants are charged variously with conspiracy to commit robbery that interferes with interstate commerce, robbery that interferes with interstate commerce, brandishing a firearm during a crime of violence and possession of a firearm by a convicted felon. The defendants were arrested without incident this morning and will make initial appearances in U.S. District Court in Philadelphia today.

According to the indictment, in January 2010, Truong, Den Van Nguyen, Thach Van Nguyen, Le and Teo Van Bui met in Philadelphia and discussed the fact that they believed that a nail salon owner kept a large amount of proceeds from his businesses in his residence. On Jan. 26, 2010, these defendants entered the owner’s residence shortly after he and his family arrived home. The defendants brandished weapons, threatened the victims and tied the nail salon owner up with duct tape. The indictment alleges the defendants stole, or attempted to steal, cash, jewelry and other valuables from the home.

Bui was previously indicted on Nov. 3, 2010, for the same offenses. The conspiracy to commit robbery and robbery charges each carry a maximum penalty of 20 years in prison and a $250,000 fine. The firearms charges each carry a maximum penalty of life in prison and a $250,000 fine.

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

The case was investigated by the FBI; the Pocono, Penn., Township Police; the Philadelphia Police Department and the Pennsylvania State Police. The case is being prosecuted by Trial Attorney Robert J. Livermore of the Criminal Division’s Organized Crime and Racketeering Section.

WASHINGTON -- Arch Coal Inc., the second largest supplier of coal in the United States, has agreed to pay a $4 million penalty to settle alleged violations of the Clean Water Act in Virginia, West Virginia and Kentucky, the U.S. Environmental Protection Agency (EPA) and the U.S. Department of Justice announced today. Under the settlement, Arch Coal will implement changes to its mining operations in Virginia, West Virginia and Kentucky to ensure compliance with the Clean Water Act.

“The measures required by this settlement will prevent pollutants from entering waterways and bring wide-ranging improvements to mining operations in four mining complexes across three states,” said Ignacia. S. Moreno, Assistant Attorney General of the Environment and Natural Resources Division of the Department of Justice. “These changes will mean a healthier environment for local communities and will help ensure Arch Coal’s compliance with the Clean Water Act.”

“Violations at mining operations can have significant environmental and public health consequences, including the pollution of the waters that people use for drinking, swimming and fishing,” said Cynthia Giles, Assistant Administrator for EPA’s Office of Enforcement and Compliance Assurance. “It is critical that companies operating next door to homes, schools and other businesses meet the standards established to protect the health and the environment for these communities.”

As part of the settlement, Arch Coal has agreed to take measures that will prevent an estimated two million pounds of pollution from entering the nation’s waters each year. Arch will also implement a treatment system to reduce discharges of selenium, a pollutant found in mine discharges. Selenium runoff from mining operations can build up in streams and have an adverse impact on aquatic organisms.

A joint federal-state complaint filed in U.S. District Court in the Southern District of West Virginia by the United States, West Virginia and Kentucky alleged numerous violations of Arch Coal’s permits that set limits on pollutants to be discharged into streams. The alleged excess discharges of iron, total suspended solids, manganese and other pollutants reflect deficiencies in operation and maintenance of wastewater treatment systems in place at four of the company’s mining facilities: Coal Mac Inc; Lone Mountain Processing Inc; Cumberland River Coal Co.; and Mingo Logan Coal Co.

As part of the settlement, the company has agreed to implement a series of inspections, audits and tracking measures to ensure treatment systems are working properly and that future compliance is achieved. The company is also required to develop and implement a compliance management system to help foster a top-down, compliance and prevention-focused approach to Clean Water Act issues.

Under the settlement, $2 million of the $4 million civil penalty will be paid to the United States and the remaining $2 million will be divided between West Virginia and Kentucky based on the percentage of alleged violations in each state.

The consent decree, which is subject to a 30-day public comment period and final court approval, is available at: www.justice.gov/enrd/

More information on the settlement: www.epa.gov/compliance/resources/cases/civil/cwa/arch.html

WASHINGTON – Four alleged members and associates of the New England La Cosa Nostra (LCN), including an alleged former boss, were charged with crimes involving racketeering, extortion and related crimes in a superseding indictment unsealed today in Providence, R.I.

 

The charges and arrests were announced today by Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney Peter F. Neronha for the District of Rhode Island; Richard DesLauriers, Special Agent in Charge of the FBI’s Boston Field Office; Colonel Brendan P. DohertySuperintendent of the Rhode Island State Police; Steven M. Pare, Providence Public Safety Commissioner; and William P. Offord, Special Agent in Charge of the Boston office of the Internal Revenue Service, Criminal Investigations (IRS-CI.)

The superseding indictment charges alleged longtime New England LCN boss Luigi Manocchio, 83, aka “Louie,” aka “Baby Shacks,” aka “the Professor,” and aka “the Old Man;” and associates Thomas Iafrate, 61; Richard Bonafiglia, 57; and Theodore Cardillo, 67, with racketeering conspiracy and extortion conspiracy. Manocchio and Iafrate, who were charged previously in an indictment unsealed on Jan. 20, 2011, also face extortion charges.

 

The department announced charges against 127 individuals, including 91 alleged leaders, members and associates – including Manocchio and Iafrate - of LCN families in four districts on Jan. 20, 2011, as part of a coordinated enforcement action against the LCN.

 

“Today’s arrests and charges are among a series of recent blows to organized crime across the country, including in Rhode Island,” said Assistant Attorney General Breuer. “This indictment comes on the heels of last month’s takedown of over 100 defendants associated with Armenian Power and other transnational organized crime groups, and of our historic enforcement action in January against nearly 100 La Cosa Nostra members and associates. If the mafia thought they could operate in the shadows and get away with it, they now know better. Our recent and sustained efforts leave no doubt that we are pursuing La Cosa Nostra and other violent organized crime groups aggressively.”

“As Attorney General Holder stated in New York earlier this year, battling organized crime remains a priority for the Department of Justice. Unchecked, it extends its tentacles into our citizens’ everyday lives. This office will continue to work closely with the investigative team and our colleagues in the department’s Criminal Division to deal with this threat,” said U.S. Neronha. “This indictment is the result of a multi-year investigation in which my office has worked closely with the Department of Justice’s Organized Crime and Racketeering Section in Washington. I also want to acknowledge the excellent work of investigators in this case, from the FBI, the Rhode Island State Police and the Providence Police Department. I have seen no better example of federal, state and local law enforcement cooperation.”

 

“The investigation that led to today’s indictment is an example of the cooperative efforts of the Providence Organized Crime Task Force,” said Special Agent in Charge DesLauriers of the FBI’s Boston Field Office. “The combined decades of investigative experience and knowledge of La Cosa Nostra of the Rhode Island State Police, Providence Police Department, IRS, FBI and the U.S. Attorney’s Office resulted in this extraordinary investigation. In Rhode Island, and throughout New England, organized crime will continue to be a top criminal priority of the FBI.  Our joint efforts will continue to disrupt and dismantle national and transnational criminal syndicates.  Through our task force and intelligence based model, we will use every capability and tool we have at our disposal to target the NELCN and other similar organized crime groups.”

 

The superseding indictment alleges that for more than two decades, the defendants and others extorted local adult bookstores and nightclubs for monthly “protection” payments by promoting a climate of fear through threats of force and violence, among other illegal activity.

 

Bonafiglia and Cardillo were arrested this morning and made initial appearances in U.S. District Court in Providence today. The court entered not guilty pleas on Bonafiglia and Cardillo’s behalf. Cardillo was released on a $50,000 unsecured bond and was ordered to have no contact with the business, employees or owners of any adult entertainment establishment. Bonafiglia was detained, pending a bail hearing on March 10, 2011. Manocchio was arrested in Miami on Jan. 19, 2011, and was removed to Rhode Island, where he continues to be detained pending a bail hearing on March 8, 2011.  Iafrate was arrested in Providence on Jan. 20, 2011, and released on bail.

 

According to the indictment, the New England LCN family operates in Providence, among other places, and routinely engages in violence and threatens violence to promote a climate of fear, preserve its power, and enrich its members and associates through extortion. The New England LCN has a hierarchical structure, with an administration comprised of a boss, underboss and capos at the top overseeing crews of criminals, including members and associates who commit crimes and serve as insulation from criminal exposure for the leadership of the enterprise.

 

The superseding indictment alleges that Manocchio received monthly protection payments, paid in cash by the owners and operators of certain adult entertainment businesses in Providence, including the Satin Doll and the Cadillac Lounge. Iafrate served as the bookkeeper for these and other businesses. Iafrate was responsible for setting aside, collecting and delivering the protection payments to Manocchio on behalf of these businesses. According to the superseding indictment, the monthly payments ranged from $4,000 to $6,000 per month. Finally, Bonafiglia and Cardillo allegedly were hired as a bouncer and manager, respectively, at the Cadillac Lounge upon direction from Manocchio to the owner. The indictment alleges that Bonafiglia and Cardillo provided information to Manocchio about the ongoing business affairs of the lounge in order for Manocchio to maintain control over the club.

 

Each charge of racketeering conspiracy, extortion conspiracy and extortion carries a maximum penalty of 20 years in prison and a $250,000 fine. The charges announced today are merely allegations, and defendants are presumed innocent unless proven guilty in a court of law.

The case is being prosecuted by Trial Attorney Scott Lawson of the Criminal Division’s Organized Crime and Racketeering Section, Trial Attorney Sam Nazzaro of the Criminal Division’s Gang Unit and by Assistant U.S. Attorney William Ferland for the District of Rhode Island. The case is being investigated by the FBI, IRS-CI, the Rhode Island State Police and the Providence Police Department.

WASHINGTON – Mississippi-based PowerTrain Inc., Wood Sales Inc., and Tool Mart Inc., (collectively known as “PowerTrain”) will jointly pay a civil penalty of $2 million to resolve claims that the company imported and sold almost 80,000 nonroad engines and equipment that were not covered by emissions-related certificates of conformity, and in most cases could not be certified because they exceeded emissions standards under the Clean Air Act, the U.S. Justice Department and the U.S. Environmental Protection Agency (EPA) announced today.

Under the settlement filed in federal court today, PowerTrain will implement a plan to ensure that the engines and equipment they import in the future comply with Clean Air Act regulatory requirements. PowerTrain will also implement projects to offset the excess pollution from these engines. For one of its offset projects, which is estimated to cost $600,000, PowerTrain will provide subsidies for consumers to replace older, dirtier wood stoves with efficient, EPA-certified wood stoves.

“As this settlement shows, we will vigorously enforce the law to ensure that Americans buying foreign imports get environmentally sound products that conform with U.S. laws,” said Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division of the Department of Justice.  “We will not allow those who cut corners and violate federal emission standards to gain an unfair economic advantage over responsible businesses who comply with our nation's clean air law.”

“We enforce the standards for emissions from imported engines to protect the air we breathe and at the same time protect responsible companies that play by the rules,” said Cynthia Giles, Assistant Administrator for EPA’s Office of Enforcement and Compliance Assurance. “Today’s settlement helps ensure cleaner air and a level playing field for companies that meet U.S. emissions standards.”

Between 2002 and 2008, PowerTrain Inc. imported 79,830 nonroad engines or pieces of equipment into the U.S. that were not covered by Clean Air Act-required certificates of conformity. The engines and equipment were then sold to businesses and individuals through Wood Sales Inc. and Tool Mart Inc. The engines and equipment were not covered by certificates of conformity because they were different models, had different power ratings or were made by a different manufacturer than was listed on the certificates. The engines also lacked two-year emissions-related warranties, as required by law.

EPA estimates that the PowerTrain engines that were sold to the public caused excess emissions of hydrocarbons and nitrogen oxides, which contribute to the formation of ground-level ozone. Ground level ozone can trigger a variety of health problems, including chest pain, coughing, throat irritation and congestion. It can also worsen bronchitis, emphysema and asthma.

The settlement is the latest in a series of cases brought as part of EPA’s effort to ensure that vehicles and engines imported into the U.S. comply with Clean Air Act standards. The Justice Department and EPA announced settlements with Pep Boys – Manny, Moe and Jack and Baja Inc., in 2010 and with the McCulloch Corporation, Jenn Feng Industrial Co. Ltd., MTD Southwest Inc. and MTD Products Inc. in 2008.

The proposed consent decree lodged with the U.S. District Court for the District of Columbia, will be subject to a 30-day public comment period.

Information on EPA requirements for imported vehicles and engines: www.epa.gov/otaq/imports/index.htm

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WASHINGTON - The United States has asked a federal court to bar Scott Waage, a San Diego tax lawyer, and Robert Jensen, a San Diego accountant, from promoting several fraudulent tax schemes and from preparing any more federal tax returns, the Justice Department announced today. According to the government’s civil injunction complaint, Waage promotes schemes that illegally reduce the taxes of his high-income customers through the use of sham consulting companies and through the creation of discriminatory pension and employee benefit plans that only benefit highly-compensated employees. Jensen allegedly prepares tax returns claiming bogus tax deductions associated with these schemes.

As alleged in the complaint, one of the schemes involves creating sham consulting corporations, purportedly headquartered in customers’ personal residences, that do not actually perform consulting services. Rather, customers allegedly funnel funds to the corporations to pay for their personal expenses, which they then deduct on the corporate income tax returns. Other alleged schemes involve unlawfully using employee benefit plans to pay customers’ personal expenses and unlawfully using pension plans to increase and accelerate deductions and avoid income taxes on plan pay outs.

In an example detailed in the government complaint, Waage allegedly assisted a Solana Beach, Calif., couple in establishing a new consulting corporation “headquartered” in their personal residence. Waage and Jensen then allegedly helped the couple improperly deduct their personal living expenses, including utility bills, gardening expenses and even personal vacations to Hawaii. The complaint also alleges that Waage has used these fraudulent schemes to reduce his own reported taxable income by $4.5 million and that Jensen has used them to deduct personal vacations and his daughter’s college tuition. The government alleges that the Internal Revenue Service has audited more than 1,000 tax returns as a result of Waage and Jensen’s tax schemes, and it estimates that the harm to the U.S. Treasury from the schemes exceeds $10.8 million.

Since 2001, the Justice Department’s Tax Division has obtained hundreds of injunctions to stop the promotion of tax fraud schemes and the preparation of fraudulent tax returns. Information about these cases is available on the Tax Division’s website.

Related Documents:

  United States v. Scott Waage, et al.
Complaint for Permanent Injunction and Other Relief

(PDF document)

Portable Document Format (PDF) files may be viewed with a free copy of Adobe Acrobat Reader

Accessibility Information

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WASHINGTON - Walter Allen Johnson, aka “Beau” Johnson, a former Tennessee prison inmate, has pleaded guilty to an indictment charging a conspiracy to defraud the United States by filing false claims as well as 11 counts of filing false claims against the United States, the Justice Department and the Internal Revenue Service (IRS) announced today.

According to charging documents, from February 2006 through January 2007, Johnson, while incarcerated in the Tennessee Department of Correction, conspired to defraud the United States by submitting false tax returns claiming refunds on behalf of inmates. Johnson collected Social Security numbers from inmates and recruited other inmates to collect the numbers for him. Johnson and his co-conspirators then used those numbers to file false income tax forms with the IRS in the names of inmates, claiming refunds to which the inmates were not entitled.

According to the indictment, as a result of the scheme to file false tax returns, Johnson and his co-conspirators collected approximately 88 U.S. Treasury checks totaling $58,651.80.

A sentencing date has not yet been set. If convicted, Johnson faces a maximum potential sentence of 65 years in prison and maximum fines of $3 million.

The case is being prosecuted by Tax Division trial attorneys Michelle M. Petersen and Kathryn B. Ward. The case was investigated by the IRS-Criminal Investigation Division.

Additional information about the Justice Department’s Tax Division and its enforcement efforts may be found at http://www.justice.gov/tax/.

WASHINGTON – Edward Lee Sullivan, of Oakland, Calif., was convicted on Feb. 25, 2011, of one count of producing and one count of possessing child pornography, announced U.S. Attorney Melinda Haag of the Northern District of California and Assistant Attorney General Lanny A. Breuer of the Criminal Division.

Sullivan, 38, was found guilty by U.S. District Court Judge D. Lowell Jensen of the Northern District of California after a bench trial.

 

Evidence presented at trial showed that during a two-week period in March 2008, Sullivan trained a 14 year-old girl to work for him as a child prostitute. During the course of those two weeks, Sullivan produced numerous photographs and videos of the minor, which documented the steps Sullivan took to prepare the 14 year-old to work as a prostitute. According to trial evidence, Sullivan filmed at least one pornographic video of the minor, which depicted Sullivan instructing the minor as she performed oral sex on him. Evidence at trial established that Sullivan uploaded at least one photograph to the Internet as part of a sexually explicit posting on an adult dating website.

Sullivan is scheduled to be sentenced on June 10, 2011, and faces a maximum sentence of up to life in prison and a fine of $250,000.

 

The case is being prosecuted by Assistant U.S. Attorneys Andrew S. Huang and Maureen C. Bessette of the Northern District of California and Trial Attorney Alecia Riewerts Wolak of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS). The investigation was conducted by the FBI, the Berkeley Police Department and the Oakland Police Department.

WASHINGTON – Patrick Carney of Manchester, N.H., was sentenced today in the Western District of Pennsylvania to 15 years in prison and a lifetime of supervised release for engaging in a child exploitation enterprise, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division, U.S. Attorney for the Western District of Pennsylvania David J. Hickton and U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI) Special Agent in Charge John Kelleghan.

 

Carney, 67, pleaded guilty before U.S. District Court Judge Arthur J. Schwab on June 4, 2010, to one count of engaging in a child exploitation enterprise. According to court documents and proceedings, Carney and others distributed images and videos of children being sexually abused to other members of an international group that had restricted membership and was formed on a social networking website.  Members of the group distributed to one another thousands of sexually explicit images and videos of children, many of which graphically depicted prepubescent, male children, including some infants, being sexually abused and sometimes sodomized or subjected to bondage.   

 

This case was investigated by HSI in Pittsburgh and the High Technology Investigative Unit of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS). Assistant U.S. Attorney Craig W. Haller of the Western District of Pennsylvania and CEOS Trial Attorney Andrew McCormack prosecuted the case.

 

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

WASHINGTON – William F. Murphy, 51, of West Roxbury, Mass., was sentenced today to 10 years in prison to be followed by 10 years of supervised release for a child pornography offense, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division, U.S. Attorney for the District of Massachusetts Carmen M. Ortiz and Richard DesLauriers, Special Agent in Charge of the FBI’s Boston Field Office.

 

Murphy was sentenced by U.S. District Court Chief Judge Mark L. Wolf in the District of Massachusetts. On Aug. 13, 2010, Murphy pleaded guilty to one count of knowingly accessing child pornography with intent to view. This case arose from an FBI investigation of Murphy’s use of online peer-to-peer software to access and view visual depictions of minor females engaging in sexually explicit conduct. These images included depictions of prepubescent girls, and sadistic and masochistic conduct.

 

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

 

The case against Murphy was prosecuted by Assistant U.S. Attorney Michael I. Yoon of the District of Massachusetts and CEOS Trial Attorney Bonnie L. Kane of the Criminal Division. The case was investigated by the FBI.

WASHINGTON – The Department of Justice announced today that it has reached a settlement with United Regional Health Care System of Wichita Falls, Texas, that prohibits it from entering into contracts that improperly inhibit commercial health insurers from contracting with United Regional’s competitors. The department said that United Regional unlawfully used these contracts to maintain its monopoly for hospital services in violation of Section 2 of the Sherman Act, causing consumers to pay higher prices for health care services. This is the first case brought by the department since 1999 that challenges a monopolist with engaging in traditional anticompetitive unilateral conduct.  

The Department of Justice’s Antitrust Division, along with the Texas Attorney General’s office, filed a civil antitrust lawsuit in U.S. District Court for the Northern District of Texas, along with a proposed settlement that, if approved by the court, would resolve the lawsuit.

"Unfettered competition among hospitals is vital to ensuring that patients receive high-quality, low-cost health care," said Christine Varney, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. "Today’s settlement prevents a dominant hospital from using its market power to harm consumers by undermining its competitors’ ability to compete in the marketplace."

According to the complaint, United Regional is by far the largest hospital in Wichita Falls. Its share of general acute-care inpatient hospital services is approximately 90 percent, and its share of outpatient surgical services is more than 65 percent. It is the region’s only provider of certain essential services such as cardiac surgery, obstetrics and high-level trauma care. In Wichita Falls, United Regional’s average per-day rate for inpatient hospital services sold to commercial health insurers is about 70 percent higher than its closest competitor for the services that are offered by both hospitals.

The department said that in order to maintain its monopoly in the provision of inpatient hospital and outpatient surgical services, United Regional systematically required most commercial health insurers to enter into contracts that effectively prohibited them from contracting with United Regional’s competitors. United Regional’s contracts required these insurers to pay significantly higher prices if they contracted with a nearby competing facility. Since United Regional is a must-have hospital for any insurer that wants to sell health insurance in the Wichita Falls area, and because the penalty for contracting with United Regional’s rivals was so significant, almost all insurers offering health insurance in Wichita Falls entered into exclusionary contracts with United Regional. As a result, competing hospitals and facilities could not obtain contracts with most insurers and were less able to compete, helping United Regional maintain its monopoly in the relevant markets and raising health-care costs to the detriment of consumers.

The proposed settlement, which if accepted by the court would be in effect for seven years, restores lost competition by prohibiting United Regional from using agreements with commercial health insurers that improperly inhibit insurers from contracting with United Regional’s competitors. In particular, United Regional is prohibited from conditioning the prices or discounts that it offers to commercial health insurers based on whether those insurers contract with other health-care providers and from inhibiting insurers from entering into agreements with United Regional’s rivals. United Regional is also prohibited from taking any retaliatory actions against an insurer that enters into an agreement with a rival provider.

United Regional Health Care System is a private Texas nonprofit corporation, with its principal place of business in Wichita Falls. United Regional had net patient revenues of approximately $265 million for 2009.

The proposed settlement, along with the department’s competitive impact statement, will be published in the Federal Register, as required by the Antitrust Procedures and Penalties Act. Any person may submit written comments concerning the proposed settlement within 60 days of its publication to Joshua H. Soven, Chief, Litigation I Section, Antitrust Division, U.S. Department of Justice, 450 Fifth St. N.W., Suite 4100, Washington, D.C. 20530. At the conclusion of the 60-day comment period, the court may enter the final judgment upon a finding that it serves the public interest.