District Not Recorded
The source did not name an office we could identify. These records remain unassigned rather than guessed.
Department of Justice and USDA Hold Competition Workshop Focused on Margins in the Agriculture Supply ChainRead the Press Release
WASHINGTON — The Department of Justice and the U.S. Department of Agriculture (USDA) today held the fifth of five joint public workshops to explore the appropriate role for antitrust and regulatory enforcement in American agriculture. The workshop, led by Agriculture Secretary Tom Vilsack and U.S. Attorney General Eric Holder, examined margins at various levels of the agricultural supply chain. The workshop also included opportunities for public comments.
"These workshops have marked an important and unprecedented chapter in public-private collaboration, and although this is the last workshop, it is not the final chapter. Vigorous and appropriate enforcement is an essential component of our commitment to ensuring market fairness and robust competition," said Attorney General Holder. "The Departments of Justice and Agriculture will continue working in close coordination to ensure fairness and opportunity for America’s farmers, producers and agriculture industry."
"Today’s open and transparent dialogue with farmers, ranchers, industry and academics is resulting in a clearer understanding of the complex competitive issues facing American agriculture," said Secretary Vilsack. "A fair and competitive marketplace is important not only for producers, but also for consumers."
These joint workshops are the first-ever to be held by the Department of Justice and USDA to discuss competition and regulatory issues in the agriculture industry. The goals of the workshops are to promote dialogue and foster learning with a diverse group of stakeholders regarding the agricultural marketplace. Additional information about the workshops can be found at www.justice.gov/atr/public/workshops/ag2010/index.htm#overview.
Secretary Vilsack and Attorney General Holder began the workshop with opening remarks before moderating a discussion with participants representing each level of the agricultural supply chain, followed by a panel consisting of dairy farmers, academics and industry representatives to discuss dairy margins. In the afternoon a third panel looked at issues in the retail sector, examining concentration, margins and similar trends. The final panel discussed margins in the livestock and poultry industries. Assistant Attorney General for the Antitrust Division Christine Varney gave closing remarks. Officials also received public testimony from audience members.
Videos and transcripts from today’s workshop will be available for review at a later date on the Antitrust Division’s website at www.justice.gov/atr/public/workshops/ag2010/index.htm#dates. Individuals seeking more information on the workshops should contact [email protected].
President of Iowa Ready-Mix Concrete Company Pleads Guilty to Price FixingRead the Press Release
WASHINGTON — The president of an Iowa ready-mix concrete company pleaded guilty yesterday to participating in a conspiracy to fix prices for sales of ready-mix concrete, the Department of Justice announced today.
According to a one-count felony charge filed on Nov. 30, 2010, in U.S. District Court in Sioux City, Iowa, Chad Van Zee, the president of a ready-mix concrete company located in Rock Valley, Iowa, participated in a conspiracy to fix prices for sales of ready-mix concrete in the Northern District of Iowa beginning as early as January 2006 and continuing until as late as August 2009.
According to the charge, Van Zee participated in a conspiracy in which he and Steven Keith VandeBrake, a former executive of another ready-mix concrete company, discussed and reached agreements regarding annual price increases for ready-mix concrete, sold ready-mix concrete at collusive and noncompetitive prices, and accepted payment for those sales. Under the plea agreement filed today, Van Zee has agreed to cooperate with the department’s ongoing antitrust investigation. In May 2010, VandeBrake pleaded guilty and agreed to serve 19 months in prison for participating in three separate conspiracies to fix prices and rig bids for sales of ready-mix concrete.
Ready-mix concrete is a product whose ingredients include cement, aggregate (sand and gravel), water and other additives. The concrete generally is produced in a concrete plant and is transported by concrete-mixer trucks to work sites, where it is used in various types of construction projects, including buildings and roads.
Van Zee is charged with violating the Sherman Act, which carries a maximum penalty for individuals of 10 years in prison and a $1 million fine. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.
Van Zee is the third individual to plead guilty in an ongoing federal antitrust investigation of the ready-mix concrete industry in Iowa and its surrounding states. The investigation is being conducted by the Department of Justice Antitrust Division’s Chicago Field Office, the FBI’s Sioux City Resident Agency and the U.S. Department of Transportation’s Office of Inspector General, with the assistance of the U.S. Attorney’s Office in Sioux City, Iowa.
Anyone with information concerning bid rigging, price fixing or territorial allocation related to the ready-mix concrete industry in Iowa and its surrounding states should contact the Antitrust Division’s Chicago Field Office at 312-353-7530 or visit www.justice.gov/atr/contact/newcase.htm.
Pharmaceutical Manufacturers to Pay $421.2 Million to Settle False Claims Act CasesRead the Press Release
WASHINGTON — Abbott Laboratories Inc., B. Braun Medical Inc. and Roxane Laboratories Inc. n/k/a Boehringer Ingelheim Roxane Inc. and affiliated entities have agreed to pay $421 million to settle False Claims Act allegations, the Justice Department announced today. These settlements resolve claims by the United States that the defendants engaged in a scheme to report false and inflated prices for numerous pharmaceutical products knowing that federal healthcare programs relied on those reported prices to set payment rates. The actual sales prices for the products were far less than what defendants reported.
The difference between the resulting inflated government payments and the actual price paid by healthcare providers for a drug is referred to as the “spread.” The larger the spread on a drug, the larger the profit for the health care provider or pharmacist who gets reimbursed by the government. The government alleges that Abbott, Roxane and Braun created artificially inflated spreads to market, promote and sell the drugs to existing and potential customers. Because payment from the Medicare and Medicaid programs was based on the false inflated prices, the government alleged that the defendants caused false claims to be submitted to federal healthcare programs, and as a result, the government paid millions of claims for far greater amounts than it would have if Abbott, B. Braun and Roxane had reported truthful prices.
These significant settlements are a part of the Attorney General’s aggressive effort to combat fraud on the federal treasury, said Assistant Attorney General for the Civil Division Tony West. Since January of 2009, the Justice Department’s Civil Division and the U.S. Attorneys around the nation have recovered more than $9 billion in cases alleging false claims, fraud against the government, and violations of the Food, Drug and Cosmetic Act. Cases alleging fraud or false claims against government health care programs are the largest portion of these recoveries, and during this period the Justice Department has opened more health care fraud cases, secured larger fines and judgments, and recovered more dollars lost to health care fraud than in any other period: more than $5 billion. Criminal fines, forfeitures, restitution and disgorgement under the Food, Drug and Cosmetic Act have yielded another $3 billion, again a record number.
Roxane is paying $280 million to resolve claims against it and related entities (Roxane Laboratories Inc., Boehringer Ingelheim Corp. and Boehringer Ingelheim Pharmaceuticals Inc.). The United States intervened and filed suit against Roxane on Jan. 18, 2007. The United States alleged that Roxane reported false prices for the following drugs: Azathioprine, Diclofenac Sodium, Furosemide, Hydromorphone, Ipratropium Bromide, Oramorph SR, Roxanol, Roxicodone and Sodium Polystyrene Sulfonate.
Abbott is paying $126.5 million to resolve the claims against it in two qui tam cases. In the first, the United States intervened and filed suit against Abbott in May 2006. This case initially was filed in the Southern District of Florida before being transferred for pre-trial proceedings to pending multi-district litigation in the District of Massachusetts. In this case, the United States alleged violations by Abbott of the False Claims Act with respect to its pricing of dextrose solutions, sodium chloride solutions, sterile water and vancomycin. Dextrose solutions, sodium chloride solutions and sterile water are generic, water-based solutions primarily used to facilitate the intravenous infusion or injection of other drugs. Vancomycin is a powerful, intravenous antibiotic. The second lawsuit was filed by a whistleblower, and involved Abbott’s pricing of the drug erythromycin, an oral antibiotic.
B. Braun Medical Inc., a U.S. subsidiary of German pharmaceutical company, B. Braun Melsungen AG, has agreed to pay $14,744,000 to resolve allegations that it caused the Medicaid program to pay inflated amounts for 49 of its drug products. These products included water-based solutions used to facilitate the intravenous infusion of other drugs and for fluid replacement, including dextrose solutions, sodium chloride solutions, sterile water and lactated ringers solution. They also included intravenously administered nutritional solutions and a variety of other intravenously administered drugs.
“With these settlements, the Department of Justice has now recovered more than $1.8 billion from pharmaceutical manufacturers arising from similar unlawful drug pricing schemes. By offering their customers one price and then falsely reporting a greatly inflated price to the lists the government uses when determining how much to pay for the drugs, we believe pharmaceutical companies created an incentive for the purchase of their drugs, since buyers could obtain government payment at the inflated price and pocket the difference,” said Tony West, Assistant Attorney General for the Justice Department’s Civil Division. “Taxpayer-funded kickback schemes like this not only cost federal healthcare programs millions of dollars, they threaten to undermine the integrity of the choices health care providers make for their patients.”
“Some pharmaceutical manufacturers have asserted that a culture within the industry gave them license to manipulate the system to suit their interests. This is not the case,” said Carmen M. Ortiz, U.S. Attorney for the District of Massachusetts. “When manufacturers report drug pricing information that they know will be relied upon by government health care programs, they are obliged to report honest prices. It is unlawful to do otherwise.”“Abbott, B. Braun and Roxane have agreed to pay more than $421 million to the United States to settle allegations that they engaged in a scheme to artificially inflate prices for numerous pharmaceutical products,” said Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida. “This practice came to light thanks to an alert South Florida whistleblower. As a result, hundreds of millions of dollars that were being siphoned off have now been recovered and will be used to provide services as intended – to the sick and elderly who need them. We encourage other whistleblowers who have information about potential wrongdoing to come forward and help us stop fraud and abuse in our health care industries.”
“The Office of Inspector General (OIG) has played a significant role in identifying the shortcomings of reported drug prices including ‘Average Wholesale Price’. In dozens of reports over many years, OIG has monitored drug price reporting practices and identified excessive Medicare and Medicaid payments resulting from these practices,” said Daniel R. Levinson, Inspector General of the Department of Health and Human Services. “These settlements with Abbott, B. Braun and Roxane underscore OIG’s longstanding commitment to protect patients and taxpayers against artificially inflated drug prices.”
The settlements resolve allegations brought by a whistleblower under the qui tam provisions of the False Claims Act. The False Claims Act suits were filed by a Florida home infusion company, Ven-A-Care of the Florida Keys Inc., and its principals. The False Claims Act allows for private persons to file suits to provide the government information about wrongdoing. Under the statute, if it is established that a person has knowingly submitted or caused others to submit false or fraudulent claims to the United States, the government can recover treble damages and $5,500 to $11,000 for each violation of the statute. If the government is successful in resolving or litigating its claims, the whistle blower who initiated the action can receive a share of between 15 percent to 25 percent of the amount recovered. As part of these settlements, the Ven-A-Care whistleblowers will receive approximately $88.4 million.
The cases were handled by the Justice Department’s Civil Division, the U.S. Attorneys’ Offices for the District of Massachusetts and the Southern District of Florida and the Office of Inspector General of the Department of Health and Human Services.
These settlements are part of the government’s emphasis on combating health care fraud. One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover approximately $4.6 billion since January 2009 in cases involving fraud against federal health care programs. The Justice Department’s total recoveries in False Claims Act cases since January 2009 have topped $5.8 billion.
Kos Pharmaceuticals to Pay More Than $41 Million to Resolve Kickback and Off-Label Promotion AllegationsRead the Press Release
WASHINGTON -- Kos Pharmaceuticals, a subsidiary of Abbott Laboratories, has agreed to pay more than $41 million to resolve criminal and civil liability arising from conduct relating to its drugs Advicor and Niaspan, the Justice Department announced today.
According to the agreement reached with the government, the Delaware-based company will pay more than $38 million to settle civil allegations under the False Claims Act. Specifically, the civil settlement resolves allegations that Kos offered and paid doctors, other medical professionals, physician groups and managed care organizations, illegal kickbacks in the form of money, free travel, grants, honoraria and other valuable goods and services, in violation of the Anti-Kickback Statute to get them to prescribe or recommend Niaspan and Advicor.
In addition, the United States contends that Kos promoted the sale and use of Advicor for use as first-line therapy for management of mixed dyslipidemias (a disruption of the lipids in the blood). Such an off-label use was not approved by the Food and Drug Administration nor was it a medically-accepted indication for which the United States and state Medicaid programs provided coverage for Advicor. The federal share of the civil settlement is $33,705,310 and the state Medicaid share is $4,454,432.
As part of today’s resolution, Kos also has entered into a deferred prosecution agreement and agreed to the filing of a criminal information in U.S. District Court for the Middle District of Louisiana charging the company with one count of conspiracy to violate the Anti-Kickback Statute. According to the criminal information, Kos conspired to violate the statute by agreeing to pay physicians kickbacks in exchange for their writing prescriptions for Kos drugs.
Specifically, two doctors proposed that they would endorse the use of Kos products, including Advicor, for the treatment of cholesterol in exchange for a series of payments. Between January 2002 and June 2006, one of the doctors wrote 4,130 prescriptions for Kos products. According to the court documents, some of those prescriptions were paid for by Medicare and Medicaid. From 2002 to 2004, Kos made a series of payments to the two doctors or a third party intermediary in the form of “sponsorship” of continuing medical education classes conducted by the doctors and purported speakers’ fees. Kos has agreed to pay a $3.36 million criminal fine as a condition of the deferred prosecution agreement.
The department agreed to enter into a deferred prosecution agreement with Kos based in part on the company’s undertaking of a thorough internal investigation of misconduct; its reporting of information from the investigation to the department on a regular basis; its continued and ongoing cooperation with the department’s investigation of the matter; and in recognition of the remedial measures undertaken by the company.
“Pharmaceutical companies that pay kickbacks to medical professionals take from the taxpayers and undermine the integrity of choices that doctors make for their patients,” said Tony West, Assistant Attorney General for the Civil Division of the Department of Justice. “We will work with our federal partners to ensure that important health care decisions are based on sound medicine, not illegal payments.”
“Today’s resolution exemplifies the strong commitment of the Criminal Division, the Civil Division, and the U.S. Attorneys’ Offices to work collaboratively to ensure that kickbacks and off-label drug promotions are prosecuted to the fullest extent of the law,” said Assistant Attorney General Lanny A. Breuer of the Criminal Division. “As this case shows, pharmaceutical companies that don’t play by the rules will face serious criminal and civil consequences.”
The civil settlement resolves two lawsuits filed under the qui tam, or whistleblower, provisions of the False Claims Act, which allow private citizens with knowledge of fraud to bring civil actions on behalf of the United States and share in any recovery. As a part of today’s resolution, the whistleblowers, all former employees of Kos, will receive payments totaling more than $6.4 million from the federal share of the civil recovery.
“Today’s resolution of claims against Kos underscores one of the key purposes of the Anti-Kickback law–that is, to ensure that the judgment exercised by health care providers in treating Medicare and Medicaid patients is not influenced by illegal payments,” said James L. Santelle, U.S. Attorney for Eastern District of Wisconsin.
“Kos Pharmaceuticals made illegal payments to physicians and participated in an unlawful marketing scheme,” said Stephanie A. Finley, U.S. Attorney of the Western District of Louisiana. “This settlement reflects the commitment of the U.S. Attorney's Office to aggressively investigate and pursue healthcare providers who seek public funds through unlawful methods.”
“This resolution reflects our office’s continued commitment to combat health care fraud at all levels,” said Donald J. Cazayoux Jr., U.S. Attorney for the Middle District of Louisiana. “We greatly appreciate our partners in the Criminal Division who led the effort on the criminal side.”
“Paying kickbacks to doctors and marketing drugs for off-label purposes will simply not be tolerated," said Daniel R. Levinson, Inspector General of the Department of Health and Human Services. "Kos, which currently does not sell any products that are reimbursed by federal health care programs, has agreed that, should it seek to sell such products anytime in the next five years, the company will enter into a formal compliance program with OIG.”
The criminal case was handled by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Middle District of Louisiana. The Justice Department’s Civil Division, the U.S. Attorney for the Eastern District of Wisconsin and the U.S. Attorney’s Office for the Western District of Louisiana handled the civil lawsuits, with assistance from the Office of Inspector General for Health and Human Services and the National Association of Medicaid Fraud Control Units.
This resolution is part of the government’s emphasis on combating health care fraud and another step for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced by Attorney General Eric Holder and Kathleen Sebelius, Secretary of the Department of Health and Human Services in May 2009. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in that effort is the FCA, which the Justice Department has used to recover almost $4.6 billion since January 2009 in cases involving fraud against federal health care programs. The Justice Department’s total recoveries in False Claims Act since January 2009 have topped $5.8 billion.
Four Detroit-Area Residents Arrested in Connection with $14.5 Million Home Health Care Fraud SchemeRead the Press Release
WASHINGTON – Four Detroit-area residents were arrested today by federal agents from the Department of Health and Human Services, Office of the Inspector General (HHS-OIG) and FBI as part of an ongoing investigation into a $14.5 million home health care fraud scheme, announced the Departments of Justice and HHS.
In a two-count second superseding indictment returned on Dec. 2, 2010, and unsealed today, four additional individuals are alleged to have participated in a Medicare fraud scheme operated out of Patient Choice Home Healthcare (Patient Choice) and All American Home Care (All American), two Oakland County, Mich., home health agencies that purported to provide in-home health services. Maira Suleman, 30; John Thomas, 32; Sherry Prescott, 50; and Myra Jones, 50, were each charged with conspiracy to commit health care fraud. Pramod Raval, M.D., 57, who was previously charged with conspiracy to violate the Anti-Kickback Statute, was also charged with conspiracy to commit health care fraud in the indictment unsealed today.
Twenty-one individuals, including the four arrested today, have now been charged for their alleged roles in this health care fraud scheme. The original indictment was returned on Jan. 12, 2010, with the first superseding indictment returned on July 13, 2010. To date, 10 defendants have pleaded guilty for their roles.
According to the superseding indictment unsealed today, the defendants’ co-conspirators owned and operated Patient Choice and All American. The se agencies purported to provide home health therapy services to Medicare beneficiaries that were unnecessary and/or were never performed. Suleman, Thomas and Prescott are alleged to have falsified medical records used to justify and/or bill services to Medicare. In addition, the indictment alleges that Jones and several other individuals recruited Medicare beneficiaries for the owners of Patient Choice and All American, paying the beneficiaries kickbacks for their Medicare information and their signatures on documents that detailed physical therapy services that were either never rendered or not medically necessary.
In addition, the indictment alleges that Dr. Raval and the owner and operator of Patient choice, Muhammad Shahab, engaged in a conspiracy where Shahab would pay kickbacks to Raval in exchange for patient referrals and access to Medicare beneficiaries under Dr. Raval’s care. Shahab was charged in the original indictment and he pleaded guilty on Feb. 25, 2010, to conspiracy to commit healthcare fraud. Sentencing in his case has been scheduled for Feb. 11, 2011.
The indictment also alleges that Medicare paid Patient Choice and All American more than $14.5 million for services that were medically unnecessary and/or not provided between August 2007 and September 2009. The charge of health care fraud conspiracy carries a maximum penalty of 10 years in prison and a $250,000 fine. The charge of conspiracy to violate the Anti-Kickback Statute carries a maximum prison sentence of five years and a fine of up to $25,000.
An indictment is merely a charge and defendants are presumed innocent until proven guilty.
Today’s arrests were announced by Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney Barbara L. McQuade of the Eastern District of Michigan; 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-OIG Chicago Regional Office.
This case is being prosecuted by Assistant Chief John K. Neal and Trial Attorney Gejaa T. Gobena of the Criminal Division’s Fraud Section. The case was investigated by the FBI and 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 Eastern District of Michigan.
Since their inception in March 2007, Strike Force operations in seven districts have obtained indictments of more than 825 individuals who collectively have falsely billed the Medicare program for more than $2 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 .
Bank of America acepta pagar $137.3 millones de dólares en restitución adependencias federales y estatales como condición del Programa deIndulgencia Empresarial Antimonopolios del Departamento de JusticiaRead the Press Release
WASHINGTON – Entidades del Bank of America han acordado pagar un total de $137.3 millones de dólares en restitución a dependencias federales y estatales por su participación en una conspiración para manipular subastas en el mercado de derivados de bonos municipales y como condición de su admisión al Programa de Indulgencia Empresarial Antimonopolios del Departamento de Justicia, anunció hoy el Departamento de Justicia.
El Bank of America realizó acuerdos con la Comisión de Títulos y Valores de EE.UU. [U.S. Securities and Exchange Commission (SEC)], el Servicio de Impuestos Internos [Internal Revenue Service (IRS)], la Oficina del Contralor de la Moneda [Office of the Comptroller of Currency (OCC)] y 20 Secretarios de Justicia Estatales. La resolución global con estas entidades federales y estatales provee el pago de restitución al IRS y a municipalidades perjudicadas por la conducta anticompetitiva del Bank of America en el mercado de derivados de bonos municipales. En un tema asociado, el Bank of America realizó un acuerdo por escrito con la Junta de la Reserva Federal para tratar de ciertas medidas correctivas.
Según los acuerdos anunciados hoy, empleados del Bank of America exhibieron conducta ilegal, incluida la manipulación de subastas y otras prácticas engañosas, en conexión con la comercialización y la venta de contratos de derivados de bonos municipales exentos de impuestos.
El Bank of America fue la primera y única entidad en presentarse espontáneamente e informar su conducta indebida al Departamento de Justicia antes de que el Departamento iniciara su investigación de la conducta anticompetitiva del ramo de los derivados de bonos municipales. La investigación en curso del Departamento ha resultado en cargos contra siete ejecutivos y una entidad empresarial y declaraciones de culpabilidad por parte de ocho ejecutivos asociadas a delitos de violación de las leyes antimonopolios y federales. La investigación sigue en curso y activa.
"El Programa de Indulgencia Empresarial Antimonopolios del Departamento de Justicia es esencial para hacer valer nuestras leyes antimonopolios", dijo Christine Varney, Secretaria de Justicia Auxiliar a cargo de la División Antimonopolios del Departamento de Justicia. "La divulgación por Bank of America de su conducta indebida y su cooperación ha permitido una investigación enérgica en curso conducida por el Departamento de Justicia, asociada a la actividad anticompetitiva en el ramo de los derivados de bonos municipales. La participación del banco en el programa de indulgencia también ha resultado en la resolución de hoy de tratar del perjuicio causado por su conducta indebida. La investigación de este asunto por parte de la División continúa y el enjuiciamiento de conducta anticompetitiva en los mercados financieros sigue siendo nuestra más alta prioridad".
Como condición de su admisión al Programa de Indulgencia Empresarial Antimonopolios del Departamento de Justicia, Bank of America debe ser la primera entidad en autodenunciar su conducta anticompetitiva, reconocer su conducta indebida, proveer cooperación permanente en la investigación y realizar la restitución integral a las víctimas de la conspiración. Bank of America sigue proporcionando importante cooperación a las autoridades federales y estatales de las fuerzas del orden público en sus investigaciones paralelas en curso del ramo de los derivados de bonos municipales.
El Programa de Indulgencia Empresarial Antimonopolios del Departamento de Justicia fue diseñado para disuadir y detectar comportamientos anticompetitivos. A través del Programa de Indulgencia, una sociedad puede evitar condenas y multas criminales, y los individuos pueden evitar una condena criminal, sentencias en prisión y multas, si la empresa o la persona es la primera en informar sobre su participación en una violación criminal antimonopolios y si se satisfacen otras exigencias del programa especificadas. Las exigencias del programa incluyen la autodenuncia, el reconocimiento de la conducta indebida, cooperación plena en la investigación del Departamento de la conducta, y el pago de restitución a las víctimas. Las exigencias proveen a la división información crítica para conducir investigaciones y hacer valer las leyes antimonopolios criminales.
Con los acuerdos anunciados hoy, el Bank of America ha cumplido su obligación, bajo el Programa de Indulgencia, de pagar restitución integral al IRS y a las municipalidades con base en conducta anticompetitiva identificada por dichas dependencias federales y estatales. Los acuerdos del banco con SEC, IRS, OCC y los Secretarios de Justicia Estatales representan los beneficios sustanciales para las víctimas que pueden resultar del Programa de Indulgencia Empresarial Antimonopolios del Departamento de Justicia, y reflejan el compromiso del Bank of America de tratar del daño causado por la conducta que descubrió.
Como resultado de su divulgación voluntaria de su conducta anticompetitiva y su cooperación constante, el Bank of America no tendrá que pagar multas como parte de los acuerdos realizados hoy. Al finalizar la cooperación exitosa y otras exigencias del Programa de Indulgencia, el Bank of America y sus actuales empleados que han cooperado con la investigación en curso no serán enjuiciados por la División Antimonopolios por la conducta informada. La investigación de la División Antimonopolios con respecto a otras entidades y personas continúa.
Para más información sobre el Programa de Indulgencia Empresarial Antimonopolios del Departamento de Justicia, visite: www.justice.gov/atr/public/criminal/leniency.htm.
La División Antimonopolios y otras dependencias que participan en este tema son parte de la
Fuerza de Tarea de Control contra el Fraude Financiero. El Presidente Obama estableció la Fuerza de Tarea interagencia de Control contra el Fraude Financiero para llevar a cabo una iniciativa enérgica, coordinada y proactiva para investigar y enjuiciar los delitos financieros. La fuerza de tarea incluye a representantes de una amplia gama de dependencias federales, autoridades regulatorias, inspectores generales y miembros de las fuerzas del orden público estatales y locales, quienes, trabajando juntos, aprovechan un poderoso espectro de recursos de aplicación legal criminal y civil. La fuerza de tarea está trabajando para mejorar la labor en todo el poder ejecutivo federal, y con asociados estatales y locales, para investigar y enjuiciar los delitos financieros importantes, asegurar un castigo justo y eficaz para quienes cometan delitos financieros, combatir la discriminación en los mercados de préstamos y financieros, y recuperar fondos para las víctimas de delitos financieros. Para obtener más información sobre la fuerza de tarea, visite www.StopFraud.gov. 10-1400 AntimonopoliosBank of America Agrees to Pay $137.3 Million in Restitution to Federal and State Agencies as a Condition of the Justice Department’s Antitrust Corporate Leniency ProgramRead the Press Release
Bank of America entities have agreed to pay a total of $137.3 million in restitution to federal and state agencies for its participation in a conspiracy to rig bids in the municipal bond derivatives market and as a condition of its admission into the Department of Justice’s Antitrust Corporate Leniency Program, the Department of Justice announced today.
Bank of America entered into agreements with the U.S. Securities and Exchange Commission (SEC), the Internal Revenue Service (IRS), the Office of the Comptroller of Currency (OCC), and 20 State Attorneys General. The global resolution with these federal and state entities provides for payment of restitution to the IRS and to municipalities harmed by Bank of America’s anticompetitive conduct in the municipal bond derivatives market. In a related matter, Bank of America entered into a written agreement with the Federal Reserve Board to address certain remedial measures.
According to agreements announced today, Bank of America employees engaged in illegal conduct, including bid rigging and other deceptive practices, in connection with the marketing and sale of tax-exempt municipal bond derivatives contracts.
Bank of America was the first and only entity to come forward and report its wrongdoing to the Department of Justice before the department opened its investigation into anticompetitive conduct in the municipal bond derivatives industry. The department’s ongoing investigation has resulted in charges against seven executives and one corporate entity and guilty pleas by eight executives for antitrust and related federal crimes. The investigation remains active and ongoing.
"The Department of Justice’s Antitrust Corporate Leniency Program is essential to our criminal enforcement of the antitrust laws," said Christine Varney, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. "Bank of America’s disclosure of wrongdoing and cooperation has led to an aggressive, ongoing investigation by the Department of Justice into anticompetitive activity in the municipal bond derivatives industry. The bank’s participation in the leniency program has also resulted in today’s resolution to address the harm caused by its wrongdoing. The Division’s investigation of this matter continues and the prosecution of anticompetitive conduct in the financial markets remains our highest priority."
As a condition of its admission into the Department of Justice’s Antitrust Corporate Leniency Program, Bank of America was required to be the first entity to self report the anticompetitive conduct, acknowledge its wrongdoing, provide ongoing cooperation in the investigation and make full restitution to the victims of the conspiracy. Bank of America continues to provide significant cooperation to the federal and state enforcement officials in their ongoing parallel investigations in the municipal bond derivatives industry.
The Department of Justice’s Antitrust Corporate Leniency Program is designed to deter and detect anticompetitive behavior. Through the Leniency Program, a corporation can avoid criminal conviction and fines, and individuals can avoid criminal conviction, prison terms and fines, if the corporation or individual is the first to report participation in a criminal antitrust violation and if other specified requirements of the program are met. The requirements of the program include self-reporting, acknowledgment of wrongdoing, full cooperation with the department’s investigation into the conduct, and payment of restitution to victims. The requirements provide the division with critical information to conduct investigations and enforce the criminal antitrust laws.
With the agreements announced today, Bank of America has met its obligation, under the Leniency Program, to pay full restitution to the IRS and municipalities based on anticompetitive conduct identified by these federal and state agencies. The bank’s agreements with the SEC, IRS, OCC and State Attorneys General represent the substantial benefits for victims that can result from the Department of Justice’s Antitrust Corporate Leniency Program, and reflect Bank of America’s commitment to address the harm caused by the conduct it discovered.
As a result of its voluntary disclosure of its anticompetitive conduct and its ongoing cooperation, Bank of America will not be required to pay penalties as a part of the agreements reached today. Upon successful completion of cooperation and other requirements of the Leniency Program, Bank of America and its current employees who have cooperated with the ongoing investigation will not be prosecuted by the Antitrust Division for the reported conduct. The Antitrust Division’s investigation regarding other entities and individuals continues.
More information about the Department of Justice’s Antitrust Corporate Leniency Program is available at: www.justice.gov/atr/public/criminal/leniency.htm.
The Antitrust Division and other agencies involved in this matter are part of the
Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. For more information on the task force, visit www.StopFraud.gov.UK Citizen Pleads Guilty to Conspiring to Bribe Nigerian Government Officials <br /> to Obtain Lucrative Contracts as Part of KBR Joint Venture SchemeRead the Press Release
WASHINGTON – Wojciech J. Chodan, a former commercial vice president and consultant to a United Kingdom subsidiary of Kellogg, Brown & Root Inc. (KBR), pleaded guilty today to conspiring to violate the Foreign Corrupt Practices Act (FCPA) for his participation in a decade-long scheme to bribe Nigerian government officials to obtain engineering, procurement and construction (EPC) contracts, the Department of Justice announced. The EPC contracts to build liquefied natural gas (LNG) facilities on Bonny Island, Nigeria, were valued at more than $6 billion.
Chodan, 72, a U.K. citizen, was extradited from the United Kingdom to the United States on Dec. 3, 2010, and pleaded guilty today in U.S. District Court in Houston before U.S. District Judge Keith P. Ellison to one count of conspiracy to violate the FCPA. Chodan was originally charged on Feb. 17, 2009. Sentencing has been scheduled for Feb. 22, 2011. Chodan faces a maximum penalty of 60 months in prison on the conspiracy charge. As part of his plea agreement, Chodan agreed to forfeit $726,885.
KBR, Technip S.A. (Technip), Snamprogetti Netherlands B.V. (Snamprogetti) and a Japanese engineering and construction company were part of a four-company joint venture that was awarded four EPC contracts by Nigeria LNG Ltd. (NLNG) between 1995 and 2004 to build LNG facilities on Bonny Island. Chodan admitted that from approximately 1994 through June 2004, he and his co-conspirators agreed to pay bribes to Nigerian government officials, including top-level executive branch officials, in order to obtain and retain the EPC contracts. Chodan recommended and agreed to the joint venture’s hiring of two agents, Jeffrey Tesler and a Japanese trading company, to pay the bribes. During the course of the bribery scheme, the joint venture paid approximately $132 million to a Gibraltar corporation controlled by Tesler and more than $50 million to the Japanese trading company. At crucial junctures preceding the award of EPC contracts, Chodan and his co-conspirators met with successive holders of a top-level office in the executive branch of the Nigerian government to ask the office holders to designate a representative with whom the joint venture should negotiate the bribes to Nigerian government officials.
In related cases, KBR’s former CEO, Albert "Jack" Stanley, pleaded guilty in September 2008 to conspiring to violate the FCPA for his participation in the bribery scheme, while KBR’s successor company, Kellogg Brown & Root LLC, pleaded guilty in February 2009 to FCPA-related charges for its participation in the scheme to bribe Nigerian government officials. Kellogg Brown & Root LLC was ordered to pay a $402 million fine and to retain an independent compliance monitor for a three-year period to review the design and implementation of its compliance program. In addition, Tesler was indicted in February 2009 on FCPA-related charges for his alleged participation in the bribery scheme, and the United States has requested his extradition from the United Kingdom.
In another related criminal case, the department filed a deferred prosecution agreement and criminal information against Technip on June 28, 2010. According to that agreement, Technip agreed to pay a $240 million criminal penalty and to retain an independent compliance monitor for two years. On July 7, 2010, the department filed a deferred prosecution agreement and criminal information against Snamprogetti Netherlands BV, which also agreed to pay a $240 million criminal penalty.
The case is being prosecuted by Assistant Chief William J. Stuckwisch and Deputy Chief Patrick F. Stokes of the Criminal Division’s Fraud Section, with investigative assistance from the FBI-Houston Division. The Criminal Division’s Office of International Affairs provided substantial assistance. Significant assistance was provided by the SEC’s Division of Enforcement and by authorities in France, Italy, Switzerland and the United Kingdom, including in particular the Crown Prosecution Service, the Serious Fraud Office’s International Assistance and Anti-Corruption Units, the London Metropolitan Police and the City of London Police.
Tres ciudadanos extranjeros han sido sentenciados a 23 meses en prisión cada uno por ardid de contrabando de extranjeros y fraude de visasRead the Press Release
WASHINGTON – Tres ciudadanos extranjeros fueron sentenciados cada uno a 23 meses en prisión hoy por sus papeles en una conspiración para realizar contrabando de extranjeros por ganancias monetarias y conspiración para cometer fraude de visa en un ardid de fraude de visas amplio y sofisticado a través del cual obtuvieron visas fraudulentamente en la Embajada de EE.UU. en Bogotá, Colombia.
Las sentencias fueron anunciadas por el Fiscal Federal Auxiliar Lanny A. Breuer de la División Criminal; el Fiscal Federal Ronald C. Machen Jr. del Distrito de Colombia; Eric J. Boswell, Secretario Auxiliar de Seguridad Diplomática y Director de la Oficina de Misiones Extranjeras, Departamento de Estado de EE.UU.; y el Director del Servicio de Inmigración y Control de Aduanas de EE.UU. [U.S. Immigration and Customs Enforcement (ICE)] John Morton.
La Juez Federal de Distrito Ellen S. Huvelle también ordenó a Heliber Toro Mejía, 52; Humberto Toro Mejía, 60; y Luz Elena Acuna Ríos, 53; todos de Bogotá, cumplir tres años de libertad bajo supervisión después de haber cumplido sus sentencias en prisión. La Juez Huvelle también emitió órdenes de expulsión para los demandados.
Los demandados se declararon culpables el 29 de septiembre de 2010 de un cargo de conspiración para cometer contrabando de extranjeros por ganancias monetarias y un cargo de conspiración para cometer fraude de visas. Fueron acusados en una acusación formal compuesta por tres cargos emitida por un gran jurado federal en el Distrito de Columbia el 4 de febrero de 2009. Los demandados fueron arrestados el 2 de junio de 2009 por autoridades colombianas en Bogotá a partir de órdenes provisionales de arresto en respuesta a una solicitud del gobierno de EE.UU. de su arresto, siendo luego extraditados a los Estados Unidos para su enjuiciamiento.
De acuerdo con el expediente judicial, Heliber Toro Mejía, Humberto Toro Mejía y Luz Elena Acuna Ríos admitieron que operaban una red amplia y sofisticada de fraude de visas al ayudar a ciudadanos colombianos que, de lo contrario, no serían admitidos, a conseguir visas fraudulentamente en la Embajada de EE.UU. en Bogotá. De acuerdo con los documentos de la declaración de culpabilidad, para respaldar las solicitudes de visas de solicitantes extranjeros, los demandados y otros conspiradores crearon antecedentes ficticios para los extranjeros y documentación de respaldo fraudulenta, incluidos documentos que parecían ser documentos oficiales emitidos por el gobierno colombiano, tales como declaraciones de impuestos y certificados de nacimiento y casamiento, registros de titularidad de propiedad y documentos de sociedades. De acuerdo con los documentos de la declaración de culpabilidad, los conspiradores instruyeron a los extranjeros con respecto a cómo aprobar la entrevista para la visa en la Embajada de EE.UU. en Bogotá al contestar preguntas de manera engañosa, así también cómo mentirles a las autoridades de inmigración de EE.UU. sobre sus antecedentes al ingresar a los Estados Unidos. Los demandados admitieron haber ayudado a más de 100 extranjeros a obtener o intentar obtener fraudulentamente una visa de EE.UU. durante la conspiración. De acuerdo con los documentos de la declaración de culpabilidad, muchos de dichos extranjeros que lograron obtener una visa de manera fraudulenta utilizaron dicha visa para entrar a los Estados Unidos.
Como parte de sus sentencias, se les ordenó a los demandados entregar activos relacionados con el ardid de contrabando de extranjeros y fraude de visas, incluida una oficina en Bogotá y $234,533 dólares del producto del ardid. Los demandados aceptaron asistir plenamente a los gobiernos de los Estados Unidos y la República de Colombia en la identificación y ubicación de toda propiedad directamente confiscable y activos sustitutos y transferirle el título de propiedad de propiedad directamente confiscable y activos sustitutos a los Estados Unidos. Si el gobierno de EE.UU. así lo solicita, los demandados también entregarán voluntariamente al gobierno de Colombia todo activo sujeto a confiscación como resultado de sus actividades delictivas.
Los cargos fueron el resultado de la "Operación país del café", una investigación internacional coordinada por el Servicio de Seguridad Diplomática - Oficina de Seguridad Regional en Bogotá y la Oficina del Agregado de Investigaciones de Seguridad Nacional [Homeland Security Investigations (HSI)] del ICE en Bogotá. El Servicio de Seguridad Diplomática - División de Investigaciones Criminales y el Agente Especial a Cargo de HSI del ICE en Washington, D.C. brindaron importante asistencia.
El gobierno de Colombia, incluido el Departamento Colombiano de Seguridad Administrativa y fiscales colombianos, brindaron asistencia y apoyo significativos durante la investigación, el arresto y la extradición de los demandados. La Oficina de Asuntos Internacionales de la División Criminal y la Embajada de EE.UU. en Bogotá trabajaron con sus colegas en Colombia para efectuar la extradición.
Están a cargo de la acusación en el caso el Abogado Litigante Principal James S. Yoon de la Sección de Derechos Humanos y Enjuiciamientos Especiales de la División Criminal y el Fiscal Federal Auxiliar Frederick W. Yette de la Fiscalía Federal para el Distrito de Columbia. La Abogada Litigante Nicolette Romano de la Oficina de Asuntos Internacionales de la División Criminal brindó significativa ayuda. La Abogada Litigante Principal Jean Weld de la Sección de Confiscación de Activos y Lavado de Dinero de la División Criminal y la Secretaria de Justicia Auxiliar Diane Lucas también brindaron asistencia.
Three Foreign Nationals Each Sentenced to 23 Months in Prison for Alien Smuggling and Visa Fraud SchemeRead the Press Release
WASHINGTON – Three foreign nationals each were sentenced today to 23 months in prison for their roles in a conspiracy to smuggle aliens for profit and conspiracy to commit visa fraud in an extensive and sophisticated visa fraud scheme through which they fraudulently procured visas from the U.S. Embassy in Bogotá, Colombia.
The sentences were announced by Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney Ronald C. Machen Jr. of the District of Columbia; Eric J. Boswell, Assistant Secretary for Diplomatic Security and Director of the Office of Foreign Missions, U.S. State Department; and Director John Morton of U.S. Immigration and Customs Enforcement (ICE).
U.S. District Judge Ellen S. Huvelle also ordered Heliber Toro Mejia, 52; Humberto Toro Mejia, 60; and Luz Elena Acuna Rios, 53; all of Bogotá, to serve three years of supervised release following their prison terms. Judge Huvelle also entered removal orders for the defendants.
The defendants pleaded guilty on Sept. 29, 2010, to one count of conspiracy to commit alien smuggling for profit and one count of conspiracy to commit visa fraud. They were charged in a three-count indictment returned by a federal grand jury in the District of Columbia on Feb. 4, 2009. The defendants were arrested on June 2, 2009, by Colombian authorities in Bogotá on provisional arrest warrants in response to a U.S. government request for their arrest and were subsequently extradited to the United States for prosecution.
According to court documents, Heliber Toro Mejia, Humberto Toro Mejia and Luz Elena Acuna Rios admitted that they operated an extensive and sophisticated visa fraud ring that profited by assisting otherwise inadmissible Colombian nationals in fraudulently procuring visas from the U.S. Embassy in Bogotá. According to plea documents, to support the visa applications of alien applicants, the defendants and other conspirators created fictitious backgrounds for the aliens and fraudulent supporting documentation, including paperwork that appeared to be official Colombian government-issued documents such as tax filings and birth and marriage certificates, property ownership records, and corporation documents. According to plea documents, the conspirators coached the aliens on how to pass the visa interview at the U.S. Embassy in Bogotá by answering questions untruthfully as well as how to lie to U.S. immigration authorities about their backgrounds when entering the United States. The defendants admitted to assisting more than 100 aliens in fraudulently obtaining or attempting to fraudulently obtain a U.S. visa during the course of the conspiracy. According to plea documents, many of those aliens who did obtain a fraudulently-procured visa used that visa to enter the United States.
As part of their sentences, the defendants were ordered to forfeit assets related to the alien smuggling and visa fraud scheme, including an office in Bogotá and $234,533 in proceeds. The defendants agreed to fully assist the governments of the United States and the Republic of Colombia in the identification and location of all directly forfeitable property and substitute assets and to pass clear title to directly forfeitable property and substitute assets to the United States. If requested by the U.S. government, the defendants also agreed to voluntarily forfeit to the government of Colombia any and all assets which are subject to forfeiture as the result of their criminal activities.
The charges were a result of "Operation Coffee Country," a coordinated international investigation by the Diplomatic Security Service - Regional Security Office in Bogotá and ICE Homeland Security Investigations (HSI) Attaché’s Office in Bogotá. The Diplomatic Security Service - Criminal Investigations Division and the ICE HSI Special Agent in Charge for in Washington, D.C. provided substantial assistance.
The government of Colombia, including the Colombian Department of Administrative Security and Colombian prosecutors, provided significant assistance and support during the investigation, arrest, and extradition of the defendants. The Criminal Division’s Office of International Affairs and the U.S. Embassy in Bogotá worked with their counterparts in Colombia to effect the extradition.
The case is being prosecuted by Senior Trial Attorney James S. Yoon of the Criminal Division’s Human Rights and Special Prosecutions Section and Assistant U.S. Attorney Frederick W. Yette of the U.S. Attorney’s Office for the District of Columbia. Significant assistance from the Criminal Division’s Office of International Affairs was provided by Trial Attorney Nicolette Romano. Senior Trial Attorney Jean Weld from the Criminal Division’s Asset Forfeiture and Money Laundering Section and Assistant U.S. Attorney Diane Lucas also provided assistance.
Financial Fraud Enforcement Task Force Announces Results of Largest-Ever Nationwide Operation Targeting Investment FraudRead the Press Release
WASHINGTON – Attorney General Eric Holder announced today the results of Operation Broken Trust, a nationwide operation organized by the Financial Fraud Enforcement Task Force to target investment fraud. To date, the operation has involved enforcement actions against 310 criminal defendants and 189 civil defendants for fraud schemes that harmed more than 120,000victims throughout the country. The operation’s criminal cases involved approximately $8.3 billion in estimated losses and the civil cases involved estimated losses of more than $2.1 billion. Operation Broken Trust is the first national operation of its kind to target a broad array of investment fraud schemes that directly prey upon the investing public.*
In announcing the results of Operation Broken Trust, Attorney General Holder was joined by FBI Executive Assistant Director Shawn Henry, U.S. Securities and Exchange Commission (SEC) Director of Enforcement Robert Khuzami, U.S. Postal Inspection Service (USPIS) Chief Postal Inspector Guy Cottrell, Deputy Chief Rick Raven of the Internal Revenue Service Criminal Investigation (IRS-CI), Acting Director of Enforcement Vince McGonagle of the U.S. Commodity Futures Trading Commission (CFTC), and other members of the Financial Fraud Enforcement Task Force.
The interagency Financial Fraud Enforcement Task Force was established by President Obama to lead an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. Starting on Aug. 16, 2010, within a three-and-a-half month period, Operation Broken Trust involved 211criminal cases and 60 civil enforcement actions. Ninety-onedefendants have been sentenced, including several sentences of more than 20 years in prison.
“With this operation, the Financial Fraud Enforcement Task Force is sending a strong message,” said Attorney General Holder. “To the public: be alert for these frauds, take appropriate measures to protect yourself, and report such schemes to proper authorities when they occur. And to anyone operating or attempting to operate an investment scam: cheating investors out of their earnings and savings is no longer a safe business plan - we will use every tool at our disposal to find you, to stop you, and to bring you to justice.”
“This operation highlights the scope of this problem, and its impact on individuals from all walks of life,” said FBI Executive Assistant Director Henry. “This one sweep alone involves fraud schemes that harmed more than 120,000 victims. The schemes may change, but the underlying greed does not. Working with our partners, we in the FBI will use all the investigative techniques in our arsenal, including undercover operations, to bring those responsible to justice.”
“Fraud by well-known companies or high-profile executives gets the biggest headlines, but other scams are equally devastating to hard working families and retirees,” said Robert Khuzami, Director of the SEC’s Division of Enforcement. “Victims want justice and don’t much care who the fraudster is or how unique the fraud. Today’s actions underscore that law enforcement agrees and will pursue fraud in whatever form.”
Enforcement actions taken as a result of Operation Broken Trust involve a range of different investment fraud schemes, all of which prey directly on the investing public. The operators of these schemes often promise high returns to investors, but engage in little to no legitimate investment activity. Such schemes include Ponzi schemes, affinity fraud, prime bank/high-yield investment scams, foreign exchange (FOREX) frauds, business opportunity fraud and other similar schemes. In some instances, operators of these schemes filed for bankruptcy in an attempt to avoid claims by victim-investors.
“The U.S. Postal Inspection Service has a long tradition of protecting postal customers from these types of investment and Ponzi scams and bringing those responsible to justice,” said USPIS Chief Postal Inspector Cottrell. “The Postal Inspection Service constantly strives to protect our customers and the general public from falling victim to these scams that claim millions of dollars every year.”
“The results announced today demonstrate the effectiveness of federal civil and criminal law enforcement in bringing to justice those who have engaged in financial fraud schemes,” said Acting Director McGonagle of the Division of Enforcement for CFTC. “The CFTC continues to devote substantial enforcement resources to combat financial fraud. We appreciate the partnership with the other members of the President’s Financial Fraud Enforcement Task Force to protect the public from financial fraudsters.”
“Securities and investment frauds are serious offenses which have brought financial ruin to many citizens. Promoters of Ponzi schemes prey upon trusting investors and then steal their hard earned money,” said Rick Raven, Deputy Chief, IRS Criminal Investigation. “IRS Criminal Investigation is proud to bring our forensic accounting skills to this joint venture with our law enforcement partners to put a stop to this and other types of white collar fraud.”
Operation Broken Trust was conducted in conjunction with various Department of Justice components – including the U.S. Attorney Offices, the FBI, the Criminal and Civil Divisions and the U.S. Trustee Program – as well as the SEC, USPIS, the CFTC, IRS-CI, the Federal Trade Commission, the U.S. Secret Service and the National Association of Attorneys General.
As a part of Operation Broken Trust, the task force is 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 investment scams, how to take steps to protect yourself from scams, or how to report investment fraud if you believe you have been victimized, go to StopFraud.gov. The website includes links to a wide array of task force member resources.
The President’s Financial Fraud Enforcement Task Force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. For more information on the task force, visit www.StopFraud.gov.
*Numbers updated as of Dec. 14, 2010.
Tres ejecutivos de Florida West International Airways Inc. fueron acusados formalmente enconspiración para fijar tarifas en envíos de cargaaéreaRead the Press Release
WASHINGTON — Se emitió una acusación formal de un cargo tarde ayer en el Tribunal Federal de Miami acusando a la empresa con sede en Miami Florida West International Airways Inc., uno de sus ex ejecutivos y dos ejecutivos de una transportadora de carga aérea de la competencia de participación en una conspiración para fijar y coordinar ciertos componentes de envíos de carga aérea de Colombia a Miami, anunció hoy el Departamento de Justicia. Entre los componentes fijados estaban los sobreprecios cobrados en temporada alta antes del Día de San Valentín y el Día de las Madres, cuando aumentan las importaciones de flores frescas, así como sobreprecios de seguridad y combustible.
La acusación formal compuesta por un cargo acusa a Luis Augusto Afanador, Rodrigo Hernàn Hidalgo y Jaime Lara Rueda Sr. de conspiración para contener y eliminar a la competencia al fijar y coordinar ciertos componentes de tarifas de carga, incluidos temporadas altas, sobrecargos para seguridad y combustible para envíos aéreos internacionales de Colombia a Miami. El Departamento indicó que la conspiración comenzó por lo menos en enero de 2002 y siguió hasta por lo menos el 14 de febrero de 2006. Se acusa a Florida West de unirse a la conspiración y participar en la misma desde al menos agosto de 2002 y hasta al menos el 14 de febrero de 2006.
Las transportadoras de carga aérea transportan una variedad de carga, incluidas flores frescas, bienes de consumo y productos electrónicos en vuelos internacionales programados.
De acuerdo con la acusación formal, Florida West, Afanador, Hidalgo, Lara y coconspiradores participaron en reuniones, conversaciones y comunicaciones para discutir y acordar ciertos componentes de tarifas de carga y la eliminación de descuentos de Bogotá a Miami. Para facilitar los acuerdos realizados, Florida West, Afanador, Hidalgo, Lara y los coconspiradores estimularon a proveedores de carga aérea a que mantuvieran y aumentaran ciertos componentes de las tarifas de carga aérea para envíos de Miami a Bogotá. A fin de ampliar los acuerdos logrados, Florida West, Afanador, Hidalgo, Lara y los coconspiradores acordaron no competir para ciertos clientes de Medellín, Colombia, a Miami, a partir del verano de 2005. Como parte de la conspiración, Florida West, Afanador, Hidalgo, Lara y coconspiradores implementaron y observaron los acuerdos alcanzados, y aceptaron pagos por envíos a tarifas no competitivas e ilegales.
Afanador y Lara son ejecutivos principales de una transportadora de carga aérea colombiana en Bogotá. Hidalgo es un ex vicepresidente de ventas y publicidad de Florida West. Hidalgo fue acusado formalmente el 28 de octubre de 2010 por un gran jurado en Miami de participar en una conspiración separada para fijar sobrecargos en envíos de carga aérea de los Estados Unidos a América del Sur y Central después de los Huracanes Katrina y Rita en 2005. Dicho cargo está pendiente.
Florida West, Afanador, Hidalgo y Lara han sido acusados de fijar precios en violación de la Ley Sherman, lo que conlleva una multa máxima criminal de $100 millones de dólares para una empresa y una sentencia máxima de 10 años en prisión y una multa criminal de $1 millón de dólares para cada persona. 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.
Incluidos Florida West, Afanador, Hidalgo y Lara, como resultado de esta investigación, un total de 21 líneas aéreas y 19 ejecutivos han sido acusados en la investigación en curso del Departamento de Justicia de la fijación de precios en el ramo del transporte aéreo. Hasta la fecha, se han impuesto más de $1.7 billones de dólares en multas criminales y cuatro ejecutivos han sido sentenciados a sentencias en prisión. Los cargos contra los 15 restantes ejecutivos están pendientes.
La investigación conjunta del ramo del transporte aéreo está siendo realizada por la Sección Nacional de Control Criminal de la División Antimonopolios y la Oficina Local de Chicago, las oficinas locales del FBI en Miami y Washington, la Oficina del Inspector General del Departamento de Transportación de E.U. y la Oficina del Inspector General del Servicio Postal de EE.UU. Se insta a cualquier persona con información sobre fijación de precios o cualquier otra conducta anticompetitiva en el ramo del transporte aéreo que llame a la Sección Nacional de Control Criminal de la División Antimonopolios al (202) 307-6694 o la Oficina Local de Chicago al (312) 353-7530, visite www.justice.gov/atr/contact/newcase.htm, o llame a la Oficina Local de Miami el FBI al (305) 654-1918.
President Barack Obama Grants PardonsRead the Press Release
WASHINGTON – Today President Barack Obama granted pardons to the following nine individuals:
- James Bernard Banks - Liberty, Utah
Offense: Illegal possession of government property; 18 U.S.C. § 641.
Sentence: Oct. 31, 1972; District of Utah; two years of probation.- Russell James Dixon - Clayton, Ga.
Offense: Felony liquor law violation; 26 U.S.C. § 5604(a)(1).
Sentence: June 23, 1960; Northern District of Georgia; two years of probation.- Laurens Dorsey - Syracuse, N.Y.
Offense: Conspiracy to defraud the United States by making false statements to the U.S. Food and Drug Administration; 18 U.S.C. §§ 371, 1001.
Sentence: Aug. 31, 1998; District of New Jersey; five years of probation and $71,000 restitution.
- Ronald Lee Foster - Beaver Falls, Penn.
Offense: Mutilation of coins; 18 U.S.C. § 331.
Sentence: Oct. 4, 1963; Eastern District of North Carolina; one year of probation and $20 fine.- Timothy James Gallagher - Navasota, Texas
Offense: Conspiracy to distribute and possess with intent to distribute cocaine; 21 U.S.C. § 846.
Sentence: Oct. 18, 1982; District of Arizona; three years of probation.- Roxane Kay Hettinger - Powder Springs, Ga.
Offense: Conspiracy to distribute cocaine; 21 U.S.C. §§ 841(a)(1) and 846.
Sentence: March 31, 1986; Northern District of Iowa; 30 days in jail followed by three years of probation.- Edgar Leopold Kranz Jr. - Minot, N.D.
Offense: Wrongful use of cocaine, adultery and writing three insufficient fund checks; Articles 112a and 134, Uniform Code of Military Justice.
Sentence: Sept. 14, 1994, as approved Nov. 4, 1994; General court-martial convened at Hickam Air Force Base, Hawaii; bad conduct discharge (suspended), 24 months of confinement and reduction to pay grade E-1.
- Floretta Leavy - Rockford, Ill.
Offense: Distribution of cocaine, conspiracy to distribute cocaine, possession of marijuana with intent to distribute, and possession of cocaine with intent to distribute; 21 U.S. C. §§ 841(a)(1), (a)(2) and 846, 18 U.S.C. § 2.
Sentence: Oct. 19, 1984; District of Kansas; one year and one day in prison and three years of special parole.
- Scoey Lathaniel Morris - Crosby, Texas
Offense: Passing counterfeit obligations or securities; 18 U.S.C. §§ 472 and 2.
Sentence: May 21, 1999; Western District of Texas; three years of probation and $1,200 restitution, jointly and severally.Justice Department Reaches Agreement to Correct Conditions at Lake County JailRead the Press Release
WASHINGTON – The Justice Department today announced that it has entered into an agreement with Lake County, Ind., and the Lake County Sheriff to resolve its complaint concerning conditions of confinement at the Lake County Jail (LCJ). LCJ is located in Crown Point, Ind., and houses approximately 1,050 adult male and female inmates.
Under the terms of the settlement agreement, Lake County will implement remedial measures to ensure that inmates at LCJ are safe and receive the services necessary to meet their constitutional rights. Some of these measures include provisions to protect inmates from harm due to suicide and the excessive use of force, and comprehensive relief in a wide range of important areas, including medical care, mental health care, fire and life safety and sanitation. The agreement also provides for improved training for staff and reform of policies, procedures and practices. The department will monitor compliance with the settlement agreement.
"It is a jurisdiction’s basic responsibility to protect those persons in its custody from harm and to uphold their constitutional rights," said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. "We commend county officials for their willingness to work aggressively to remedy these problems."
The Civil Rights of Institutionalized Persons Act (CRIPA) authorizes the department to investigate conditions of confinement in certain institutions owned or operated by, or on behalf of, state and local governments. In addition to psychiatric hospitals, these institutions include nursing homes, residential facilities serving persons with developmental disabilities, jails, prisons and juvenile correctional facilities. CRIPA’s focus is on systemic deficiencies rather than individual, isolated problems. Please visit www.justice.gov/crt to learn more about CRIPA and other laws enforced by the Justice Department’s Civil Rights Division.
Former Federal Correctional Officer Pleads Guilty to Civil Rights Violation and Obstruction of JusticeRead the Press Release
WASHINGTON – Benjamin Montgomery, a former correctional officer at the U.S. Penitentiary in Atlanta pleaded guilty today to a two-count information charging him with civil rights crimes for assaulting an inmate and for subsequently writing a false report about the incident.
According to the charging document and information presented in court, on June 2, 2010, Montgomery, while working as a correctional officer in the penitentiary, physically assaulted an inmate without legal justification and thereby violated the inmate’s constitutional right to be free from cruel and unusual punishment. Additionally, Montgomery admitted that following the incident, he wrote a memorandum to his supervisor about his use of force in which he falsely accused the inmate of making aggressive movements toward Montgomery. Montgomery agreed he wrote the false memorandum in an attempt to impede the investigation of the inmate’s complaint.
“Correctional officers are entrusted to perform their critical public safety duties and not to abuse the civil and constitutional rights of inmates under their supervision,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “Those officers who abuse their power and public trust will be prosecuted to the fullest extent of the law.”
U.S. Attorney Sally Quillian Yates said, "We recognize that correctional officers have a difficult job as they guard and protect inmates in our federal prisons. But under no circumstances can we allow an officer to abuse his power to commit violent and unnecessary assaults on an inmate, nor can we stand by and allow that officer to obstruct our investigations. The U.S. Attorney’s Office is committed to vigorously investigating and prosecuting any law enforcement officer who engages in such conduct.”
Montgomery is scheduled to be sentenced on Feb. 24, 2011. The defendant faces a maximum sentence of 10 years in prison on the deprivation of rights charge and 20 years in prison on the obstruction of justice charge. Each count also carries a maximum fine of $250,000.
This case was investigated by the Department of Justice’s Office of Inspector General. It is being prosecuted by Assistant U.S. Attorney Brent Gray and Trial Attorney Nicole Lee Ndumele of the Department of Justice’s Civil Rights Division.
Former Employee of Florida Property Management Company Pleads Guilty to Wire FraudRead the Press Release
WASHINGTON — A former residential sales manager at a Florida property management company pleaded guilty to wire fraud in connection with housing repair contracts for the U.S. Department of Veterans Affairs (VA), the Department of Justice announced today.
Benjamin K. Graves, formerly a residential sales manager at West Palm Beach, Fla.-based Ocwen Loan Servicing LLC, pleaded guilty today in U.S. District Court in Orlando, Fla., to wire fraud. According to the one-count felony charge filed on Nov. 12, 2010, in the Middle District of Florida, Ocwen managed foreclosed properties under contract with the VA, which guaranteed qualifying residential mortgages for veterans. Under the contract between the VA and Ocwen, if a veteran defaulted, Ocwen completed necessary repairs and re-sold the property.
According to the court document, Graves engaged in fraud by steering the repair contracts to companies affiliated with a particular contractor, in exchange for cash payments, from at least as early as January 2006 and continuing until at least as late as March 2007. The department said, in order to execute the scheme, Graves sent competitive bid information to the contractor and transmitted sham bids to Ocwen via wire communication.
The wire fraud charge carries a maximum penalty of 20 years in prison and a maximum fine of $250,000. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.
Graves’s guilty plea is the first to arise from an ongoing federal investigation of housing repair contracts performed under contract with the VA. The investigation is being conducted by the Antitrust Division’s Chicago Field Office and the Central Field Office of the U.S. Department of Veterans Affairs, Office of Inspector General, Criminal Investigations Division, located in Hines, Ill. Anyone with information concerning suspicious activity relating to housing repairs performed under a contract with the VA should contact the Antitrust Division’s Chicago Field Office at 312-353-7530 or visit www.justice.gov/atr/contact/newcase.htm.
Florida West International Airways Inc., Three Executives Indicted in Conspiracy to Fix Rates on Air Cargo ShipmentsRead the Press Release
WASHINGTON — A one-count indictment was returned late yesterday in U.S. District Court in Miami charging Miami-based Florida West International Airways Inc., one of its former executives and two executives of a competing air cargo carrier with participating in a conspiracy to fix and coordinate certain components of air cargo shipments from Colombia to Miami, the Department of Justice announced today. Among the components fixed were peak season surcharges imposed before Valentine’s Day and Mother’s Day, when imports of fresh-flowers increase, as well as security and fuel surcharges.
The one-count indictment charges Luis Augusto Afanador, Rodrigo Hernan Hidalgo and Jaime Lara Rueda Sr. with conspiring to suppress and eliminate competition by fixing and coordinating certain components of cargo rates, including peak season, security and fuel surcharges for international air shipments from Colombia to Miami. The department said the conspiracy began at least as early as January 2002 and continued until at least Feb. 14, 2006. Florida West is charged with joining and participating in the conspiracy from at least as early as August 2002 and continuing until at least Feb. 14, 2006.
Air cargo carriers transport a variety of cargo, including fresh flowers, consumer goods, and electronics, on scheduled international flights.
According to the indictment, Florida West, Afanador, Hidalgo, Lara and co-conspirators participated in meetings, conversations and communications to discuss and agree on certain components of cargo rates and the elimination of discounts from Bogota to Miami. To facilitate the agreements reached, Florida West, Afanador, Hidalgo, Lara and co-conspirators discussed encouraging air cargo providers to maintain and increase certain components of air cargo rates for shipments from Miami to Bogota. In order to expand the agreements reached, Florida West, Afanador, Hidalgo, Lara and co-conspirators agreed not to compete for certain customers from Medellin, Colombia, to Miami beginning in the summer of 2005. As part of the conspiracy, Florida West, Afanador, Hidalgo, Lara and co-conspirators implemented and monitored the agreements reached, and accepted payments for shipments at collusive and noncompetitive rates.
Afanador and Lara are senior executives of a Colombian air cargo carrier based in Bogota. Hidalgo is a former vice president of sales and marketing for Florida West. Hidalgo was indicted on Oct. 28, 2010, by a Miami grand jury for participating in a separate conspiracy to fix surcharges on air cargo shipments from the United States to South and Central America following Hurricanes Katrina and Rita in 2005. That charge is pending.
Florida West, Afanador, Hidalgo and Lara are charged with price fixing in violation of the Sherman Act, which carries a maximum $100 million criminal fine for a corporation and a maximum penalty for each individual of 10 years in prison and a $1 million criminal fine. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.
Including Florida West, Afanador, Hidalgo and Lara, as a result of this investigation, a total of 21 airlines and 19 executives have been charged in the Justice Department’s ongoing investigation into price fixing in the air transportation industry. To date, more than $1.7 billion in criminal fines have been imposed and four executives have been sentenced to serve prison time. Charges are pending against the remaining 15 executives.
The joint investigation into the air transportation industry is being conducted by the Antitrust Division’s National Criminal Enforcement Section and Chicago Field Office, the FBI’s field offices in Miami and Washington, the Department of Transportation’s Office of Inspector General and the U.S. Postal Service’s Office of Inspector General. Anyone with information concerning price fixing or other anticompetitive conduct in the air transportation industry is urged to call the Antitrust Division’s National Criminal Enforcement Section at 202-307-6694 or the Chicago Field Office at 312-353-7530, visit www.justice.gov/atr/contact/newcase.htm or call the FBI’s Miami Field Office at 305-654-1918.
Department of Justice and USDA Announce Agenda for December 8 Margins WorkshopRead the Press Release
WASHINGTON — The Department of Justice and the U.S. Department of Agriculture (USDA) announced today the agenda and panelists for the Dec. 8, 2010, joint public workshop on margins in agriculture. This workshop, the last in a series of five, is focused on the margins at various levels of the agricultural supply chain.
The workshop will be held in the Jefferson Auditorium of USDA’s South Building, 1400 Independence Avenue S.W., Washington, D.C. Attendance is free and open to the public. The general public and media interested in attending the workshop should register at www.surveymonkey.com/s/marginsworkshop.
The workshop will begin with opening remarks by U.S. Attorney General Eric Holder and U.S. Agriculture Secretary Tom Vilsack. Following the introduction, there will be four panels composed of producers, academics and other industry stakeholders. First, Secretary Vilsack, Attorney General Holder and Assistant Attorney General for the Justice Department’s Antitrust Division Christine Varney, will moderate a discussion that includes participants at each level of the agricultural supply chain. Second, a panel on margins in the dairy industry will look at the costs and profits from farmers to retailers. The third panel of the day will look at issues in the retail sector, examining concentration, margins and similar trends. The final panel will discuss margins in the livestock and poultry industries. The workshop will conclude with remarks from Assistant Attorney General Varney.
Additionally, there will be two hours dedicated to public testimony. This will be split into two sessions, one at mid-day and the other after the final panel.
The schedule for the day is as follows:
8:30 a.m - 8:45 a.m. EST Opening Remarks
Eric Holder, Attorney General, U.S. Department of Justice
Tom Vilsack, Secretary of Agriculture, U.S. Department of Agriculture
Christine Varney, Assistant Attorney General, Antitrust Division, U.S. Department of Justice8:45 a.m. - 10:00 a.m. EST Panel I - Industry Dynamics from Farm to Consumers
Panelists will offer their perspective on supply chain issues that impact producers, processors, retailers and consumers.
Moderators: Eric Holder, Attorney General, U.S. Department of Justice
Tom Vilsack, Secretary of Agriculture, U.S. Department of Agriculture
Christine Varney, Assistant Attorney General, Antitrust Division, U.S. Department of JusticeBen Burkett, producer and local distributor, Mississippi Association of Cooperatives
Barry Carpenter, chief executive officer, National Meat Association
Erik Lieberman, regulatory counsel, Food Marketing Institute
Vaughn Meyer, cattle producer, South Dakota
Dan Vincent, president and chief executive officer, Pacific Coast Producers
Christopher Waldrop, director, Food Policy Institute, Consumer Federation of America10:00 a.m. - 10:30 a.m. EST Coffee Break
10:30 a.m. - 11:30 a.m. EST Panel II - Margins in the Dairy IndustryThis panel will discuss the various levels of the dairy supply chain, offering explanations for recent trends and the effects of these trends.
Moderator: Mark Tobey, Special Counsel for Agriculture and State Relations, Antitrust Division, U.S. Department of Justice
Eunice Biel, dairy producer, Minnesota
David DeSantis, chief of enforcement and accounting, Pennsylvania Milk Marketing Board
Buster Goff, dairy producer, New Mexico
Rigoberto Lopez, professor of economics, University of Connecticut
Chuck Nicholson, professor of agribusiness, California Polytechnic State University
11:30 a.m. - 12:30 p.m. EST Public Testimony12:30 p.m. - 1:15 p.m. EST Lunch
1:15 p.m. - 2:45 p.m. EST Panel III – Issues in Food Retailing
This panel will examine retailing sector trends and incentives relating to supply arrangements, product placement and consumer choice, and possible explanations on how they have occurred and the impact on all levels of the supply chain.
Moderator: Sharis Arnold Pozen, Chief of Staff, Antitrust Division, U.S. Department of Justice
Albert A. Foer, president, American Antitrust Institute
Wenonah Hauter, executive director, Food & Water Watch
Mary Hendrickson, extension associate professor of rural sociology, University of Missouri
Erik Lieberman, regulatory counsel, Food Marketing Institute
Howard Shelanski, deputy director for antitrust, Bureau of Economics, Federal Trade Commission
Kyle Stiegert, professor of economics, University of Wisconsin
Alvin Vincent, Jr., region 2 director, United Food & Commercial Workers International Union
Tom Wenning, executive vice president and general counsel, National Grocers Association
Bob Young, chief economist, American Farm Bureau Federation2:45 p.m. - 3:00 p.m. EST Break
3:00 p.m. - 4:00 p.m. EST Panel IV - Margins in the Livestock and Poultry Industries
This panel will look at trends in the beef, pork and poultry industries. Panelists will discuss the division of the retail dollar, possible explanations for changes and the margins in which the market participants operate in general.
Moderator: James MacDonald, Chief, Agricultural Structure and Productivity Branch, Economic Research Service, U.S. Department of Agriculture
John Crespi, professor of economics, Kansas State University
Allen Lund, cattle producer, North Dakota
Valerie Ruddle, poultry grower, West Virginia
C. Robert Taylor, professor of economics, Auburn University
Eugene Versteeg, pork producer, Iowa
Michael Wohlgenant, professor of economics, North Carolina State University4:00 p.m. - 4:05 p.m. EST Introduction of Public Testimony and Concluding Remarks
Christine Varney, Assistant Attorney General, Antitrust Division, U.S. Department of Justice
4:05 p.m. - 5:00 p.m. EST Public Testimony
Additional information, including submitted public comments and transcripts for past workshops can be found at the Antitrust Division’s agriculture workshop website at www.justice.gov/atr/public/workshops/ag2010/index.htm. While no streaming webcast will be available, transcripts and video will be available for this workshop at a later date on the Antitrust Division’s website. Individuals seeking more information on the workshops should contact [email protected].
Media who wish to attend the workshop may begin arriving at 7:00 a.m. EST and cameras must be pre-set by 7:30 a.m. EST. The closest Metro station to the Jefferson Auditorium of USDA’s South Building is Smithsonian.
Shipping Company and Senior Crewmembers Convicted of Covering up Oil PollutionRead the Press Release
WASHINGTON – Atlas Ship Management Ltd., a Turkish Corporation, pleaded guilty in U.S. District Court in Tampa, Fla. to federal charges of making false statements and knowingly failing to accurately maintain an Oil Record Book as required by international treaty and U.S. law, Assistant Attorney General Ignacia S. Moreno and U.S. Attorney Robert E. O’Neill announced today.
The company was sentenced to pay an $800,000 criminal fine, pay $100,000 in community service to the Pinellas County, Fla., Environmental Fund, and to implement a comprehensive Environmental Compliance Program that requires detailed inspection and auditing of the defendant’s ships that sail into the United States.
"As this case clearly demonstrates, there is no benefit to deliberately bypassing pollution prevention equipment and dumping oil waste into the ocean. This is simply criminal behavior," said Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division of the Department of Justice. "Thanks to a tip from crew members, the operators of the M/V Avenue Star will pay a significant penalty for breaking the law."
"The investigation and prosecution of this case sends a clear message to owners and operators of commercial vessels that those who choose to intentionally pollute our oceans will be held accountable," said U.S. Attorney Robert E. O’Neill."
"The oceans must be protected from shipping companies that look to cut corners by dumping waste improperly," said Maureen O’Mara, Special Agent in Charge of EPA’s Criminal Enforcement program for the Tampa region. "Illegally disposed waste endangers the environment and today’s action sends a clear message that those who violate the law and pollute our waters will be vigorously prosecuted."
"We applaud the courage of two whistleblowers who alerted Coast Guard inspectors to the illegal dumping of waste from the Motor Vessel Avenue Star last year," said Capt. Sheryl Dickinson, Commanding Officer for the U.S. Coast Guard Sector in St. Petersburg. "Marine Environmental Protection is a primary Coast Guard mission and this case not only illustrates a joint commitment to keeping our waterways clean, but should also serve as a warning to would-be polluters."
Atlas Ship Management Ltd. operated a 10,965 ton, 471.5 foot commercial ocean going ship named the M/V Avenue Star that carried bulk cargo throughout the world including into and out of Tampa. On Oct. 21, 2009, the U.S. Coast Guard boarded the ship to conduct an inspection of the vessel to ascertain if it was in compliance with international and United States law. During the inspection, two crewmembers provided information to the Coast Guard that indicated that senior engineers on the vessel were illegally dumping oily waste from the engine room directly into the sea. The crewmembers also informed the Coast Guard that some oil waste was being stored in the clean sea water ballast tanks on the vessel. The Coast Guard inspection confirmed what the crewmembers had alleged. Engineers on the vessel had installed and used a bypass hose, also referred to as a "magic pipe" or "magic hose", specially crafted to fit between the welden sludge pump discharge line and the "gooseneck" on the Oil Water Separator discharge line, to bypass pollution prevention equipment on board the M/V Avenue Star. The ship's engineers discharged oily bilge wastes that had accumulated in the engineering spaces on the M/V Avenue Star through this "magic pipe" on two or more occasions.
From Oct. 10 until Oct. 21, 2009, engineering officers and other crew members aboard the M/V Avenue Star transferred oily bilge wastes that had accumulated in the engineering machinery spaces into the aft port peak ballast tank. The ballast tanks are used to adjust the stability and trim of the vessel, and are filled with clean sea water and are not intended to be used to store oil waste. Prior to Oct. 21, 2009, while the M/V Avenue Star was transiting from Honduras to Tampa, some volume of the oily waste was discharged from the ballast tank directly into international waters. All discharges of oil from a vessel into the sea, even if illegal, are required to be recorded in the vessel’s Oil Record Book. None of these discharges were recorded in the Oil Record Book for the M/V Avenue Star.
The chief engineer of the vessel, Gunduz Avaz, previously pleaded guilty to and was sentenced for his role in covering up the illegal overboard oil discharges. The second assistant engineer, Yavuz Molgultay, also previously pleaded guilty and was sentenced for his involvement in covering up the illegal discharges of oil from the ship.
For their role in providing valuable information to the U.S. Coast Guard that led to convictions in this case, the two crewmembers who "blew the whistle" in this case were each awarded $125,000 by the district court. The award money is derived directly from the fine paid by Atlas Ship Management Ltd.
The Pinellas County Environmental Fund will receive $100,000 from this case as a community service payment. The Pinellas County Environmental Fund is a partnership among Pinellas County, the National Oceanographic and Atmospheric Administration and the National Fish and Wildlife Foundation. The purpose of this partnership is to provide grants for projects that conserve and restore fish and wildlife habitat in Tampa Bay.
This case was investigated by the U.S. Coast Guard Investigative Service and the U.S. Environmental Protection Agency. The case was prosecuted by the U.S. Attorney's Office in the Middle District of Florida and by the Environmental Crimes Section of the Department of Justice.
Residential Homebuilder Settles Clean Water Act Violations in 21 StatesRead the Press Release
WASHINGTON — Beazer Homes USA Inc., a national residential homebuilder, has agreed today to pay a $925,000 civil penalty to resolve alleged Clean Water Act violations at its construction sites in 21 states, the Justice Department and U.S. Environmental Protection Agency (EPA) announced.
As part of the settlement, Beazer will also implement a company-wide storm water program to improve compliance with storm water runoff requirements at current and future construction sites around the country.
"This settlement will help many communities across the nation by protecting their waterways from harmful pollutants in stormwater runoff," said Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division of the Department of Justice. "Contamination from runoff can be easily prevented, and those who do not take the necessary measures face the prospect of enforcement action under the Clean Water Act."
"Contaminated stormwater puts children and families at risk as it may carry pollutants, including sediment, debris, and pesticides that contribute to water quality problems. These pollutants affect our nation’s rivers, lakes and sources of drinking water," said Cynthia Giles, Assistant Administrator for EPA’s Office of Enforcement and Compliance and Assurance. "Today’s settlement will help protect public health and the environment by requiring Beazer to meet the requirements of our nation’s environmental laws and improve its oversight of its construction facilities."
The government complaint, filed simultaneously with the settlement agreement in federal court in Nashville, Tenn. alleges a pattern of violations that was discovered through site inspections and by reviewing documentation submitted by the company. The alleged violations include failure to obtain permits until after construction began, or failing to obtain them at all. At sites with permits, violations included failure to prevent or minimize the discharge of pollutants such as silt and debris in storm water runoff.
"This settlement, which covers more than 30 Beazer Homes construction sites in middle Tennessee, demonstrates yet again that this office will act vigorously to protect the health and safety of citizens and residents of the district, and to safeguard the environment for all," said Jerry E. Martin, U.S. Attorney for the Middle District of Tennessee.
The settlement requires Beazer to develop improved pollution prevention plans for each construction site, conduct additional site inspections, and promptly correct any problems detected. The company must properly train construction managers and contractors and designate trained staff for each site. Beazer must also implement a management and internal reporting system to improve oversight of on-the-ground operations and submit annual reports to EPA.
The Clean Water Act requires that construction sites have controls in place to prevent pollution from being discharged with storm water into nearby waterways. These controls include simple pollution prevention techniques such as silt fences, phased site grading, and sediment basins to prevent common construction contaminants from entering the nation’s waterways.
Keeping contaminated stormwater out of America’s waters is one of EPA’s national enforcement initiatives. Construction projects have a high potential for environmental harm because they disturb large areas of land and significantly increase the potential for erosion. Without onsite pollution controls, sediment-laden runoff from construction sites can flow directly to the nearest waterway and degrade water quality. In addition, storm water can pick up other pollutants, including concrete washout, paint, used oil, pesticides, solvents and other debris. Polluted runoff can harm or kill fish and wildlife, degrade aquatic habitat, and affect drinking water quality.
A portion of the settlement helps EPA efforts to protect the Chesapeake Bay, North America’s largest and most biologically diverse estuary. The bay and its tidal tributaries are threatened by pollution from a variety of sources, and overburdened with nitrogen, phosphorus and sediment that can be carried by storm water. The settlement will result in a reduction of approximately 10.4 million pounds of pollutants to the bay watershed.
This settlement is the latest in a series of enforcement actions to address storm water violations from construction sites around the country. In the last several years, EPA and DOJ have reached consent decrees with nine residential construction companies for stormwater violations resulting in approximately $6.3 million in penalties. In 2009, Beazer ranked as the nation’s 10th-largest home building company.
Seven states have joined the settlement. The states of Colorado, Florida, Indiana, Maryland, Nevada, Tennessee and the Commonwealth of Virginia will receive a portion of the $925,000 penalty.
The consent decree, lodged in the U.S. District Court for the Middle District of Tennessee, is subject to a 30-day public comment period and approval by the federal court. A copy of the consent decree is available on the Justice Department website at www.justice.gov/enrd/Consent_Decrees.html.
Kaua‘i Island Utility Pleads Guilty to Endangered Species Act and Migratory Bird Treaty Act Violation, Agrees to Help Protect Threatened SeabirdsRead the Press Release
WASHINGTON – The Kaua‘i Island Utility Cooperative (KIUC) entered a plea agreement today in federal court in Honolulu to resolve violations of the Endangered Species Act (ESA) and Migratory Bird Treaty Act (MBTA), the U.S. Department of Justice announced today. KIUC pleaded guilty to count one and count 16 of a 19-count indictment returned by a federal grand jury in May 2010.
Count one charged a violation of the ESA by knowingly "taking" at least 14 Newell’s shearwaters, a federally protected threatened species, at or near Keâlia Beach. Count 16 charged a violation of the MBTA by the "taking" of at least 18 Newell’s shearwaters, also protected as a migratory species, at KIUC’s Port Allen facility.
Under the ESA, "take" means to harass, harm, pursue, hunt, shoot, wound, kill, trap, capture or collect, or to attempt to engage in any such conduct.
"The Department of Justice sought a criminal prosecution of KIUC only after a long history of attempts to resolve ongoing violations," said Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division of the Department of Justice. "The resolution of this case will set an example for others and help in the successful recovery of the Newell’s shearwaters, a threatened native species that is part of Hawaii’s cultural and natural heritage."
In accordance with the terms of the plea agreement, KIUC was sentenced to the maximum statutory fine of $40,000 for the two counts to which KIUC pleaded guilty and a period of probation of 18 months with specific conditions intended to avoid additional violations during the period of probation. KIUC agreed to modify and reconfigure power lines associated with the highest incidences of take. KIUC must also monitor two stretches of inland power lines to help determine the number of protected birds colliding with those lines. KIUC is also required to apply for an incidental take permit that would authorize, as required by law, the taking of such threatened species under certain conditions and requirements.
The plea agreement also required that, as community service, KIUC make a payment of $225,000 to an account, established at the National Fish and Wildlife Foundation, to benefit protected seabirds on Kaua‘i. The plea agreement stated that this requirement was aimed at repairing the loss to Kaua‘i of these culturally and ecologically important seabirds, while recognizing KIUC’s annual funding of the Save Our Shearwaters program since 2003.
"What would we and Hawaii be if these birds vanished from the earth? I say we would be diminished as a community and as a place; a place so special compared to all others," said Paul Chang, Special Agent in Charge of Law Enforcement in the Fish and Wildlife Service’s Pacific Region. "The result of this case allows me to believe there is hope for all of us working together to preserve Hawaii's unique wildlife."
The Newell’s shearwater (known in the Hawaiian language as ‘a‘o) is a seabird native to the Hawaiian Islands. The majority of the world’s population of Newell’s shearwaters nests on the island of Kaua‘i, specifically in burrows on inland mountains. Adult Newell’s shearwaters fly between the ocean and these nesting areas from spring through fall of each year. Young shearwaters leave these inland mountain nests and make their first flight to the sea from September to December each year, typically at night. The young birds use mountain air currents or physical drop offs to become airborne. If a young shearwater falls to the ground in a location without conditions such as those that occur in the inland mountains or at sea, it usually will be unable to regain flight. The species is identified as endangered on the International Union for Conservation of Nature (IUCN) red list.
In its plea agreement, KIUC admitted that it knew Newell’s shearwaters could collide with its power lines and that such collisions could kill and otherwise harm the birds. A scientific report completed and made public in 1995 recommended actions to reduce the take of seabirds by utility lines, including modifying the configuration and locations of power lines. According to the indictment, KIUC did not undertake any of the recommended line modification/reconfiguration actions except for a limited stretch of power line near Ke âlia Beach after being notified in March 2007 that it was a target of a federal investigation.
KIUC admitted in its plea agreement that since June 2005, at least 14 Newell’s shearwaters were found dead near KIUC power lines near Ke âlia Beach and Donkey Beach. At least ten more shearwaters were found since 2005 near other KIUC power lines, including lines in and near the Wailua River Valley, Waimea River Valley, ‘Ele‘ele, and Kapa‘a. Necropsies of some birds concluded that they died from blunt force trauma consistent with a collision with a power line or other solid object. Eyewitnesses have observed such collisions with KIUC power lines.
KIUC further admitted it knew that young shearwaters are attracted to lights and this attraction may cause the birds to collide into power lines or fall to the ground from exhaustion due to circling the lights. KIUC acknowledged it knew that modifying or shielding lights so they shine only downward significantly reduced the light attractions and related harm to the birds. KIUC admitted that although it shielded streetlights in 2003, after being required to do so in an agreement with the U.S. Fish and Wildlife Service, it failed to shield its lights at the Port Allen facility. KIUC acknowledged that nine Newell’s shearwaters were found on the ground at or near the Port Allen facility in an eight-day period in October 2006.
The Endangered Species Act prohibits the unauthorized taking, including harming and harassing, of species listed as threatened or endangered. The Migratory Bird Treaty Act prohibits the unauthorized "taking", including wounding or killing, of bird species listed as migratory.
Assistant Attorney General Moreno credited special agents from the U.S. Fish and Wildlife Service for the investigation of the case culminating in the Indictment and subsequent plea agreement.
The case is being prosecuted by the Environmental Crime Section, Environment and Natural Resources Division, U.S. Department of Justice.
Former New York City Hospital Purchasing Official Pleads Guilty to Bid Rigging and Fraud ConspiraciesRead the Press Release
WASHINGTON — A former purchasing official at Mount Sinai Medical Center and School of Medicine in New York pleaded guilty to participating in bid rigging and fraud conspiracies related to contracts for maintenance and insulation work performed at Mount Sinai, the Department of Justice announced today.
Mario Perciavalle, a former associate director of plant services at Mount Sinai and resident of Stormville, N.Y., pleaded guilty today to all three counts contained in an indictment returned in U.S. District Court in New York City on April 6, 2010. According to court documents, as associate director, Perciavalle was responsible for obtaining bids from vendors and awarding contracts to them on a competitive basis. Perciavalle pleaded guilty to entering into a conspiracy with co-conspirators, between June 2004 and September 2005, to rig bids on maintenance and insulation services contracts at Mount Sinai by submitting intentionally high, non-competitive bids to make it appear that there had been competition for the contracts when, in fact, there had not been.
Perciavalle also pleaded guilty to engaging in a mail fraud conspiracy between March 2003 and September 2005 in which he awarded work at Mount Sinai to a co-conspirator’s company at the same time he asked for and received cash kickbacks totaling at least $20,500 from the co-conspirator. Perciavalle also pleaded guilty to mail fraud as a result of payments mailed by Mount Sinai to Perciavalle’s co-conspirator for work done on the rigged contracts.
The bid rigging charge carries a maximum penalty of 10 years in prison and a $1 million fine for an individual. The mail fraud conspiracy charge and the mail fraud charge each carries a maximum penalty of 20 years in prison and a $250,000 fine. The maximum fine for each of the three charges may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.
Today’s plea resulted from an ongoing federal antitrust investigation of bid rigging, fraud, bribery and tax-related offenses in connection with construction, maintenance and service contracts administered by the Engineering Department of Mount Sinai and the Facilities Operations Department and the Engineering Department at New York Presbyterian Hospital (NYPH). Including Perciavalle, 10 individuals and three companies have pleaded guilty to charges arising out this investigation. Eight other defendants have been indicted and are awaiting trial.
The investigation is being conducted by the Antitrust Division’s New York Field Office, the FBI’s New York Division and the Internal Revenue Service Criminal Investigation’s New York Field Office. Anyone with information concerning bid rigging, bribery, tax offenses or fraud related to contracts administered by the Facilities Operation Department at NYPH or the Engineering Departments at Mount Sinai or NYPH should contact the Antitrust Division’s New York Field Office at 212-264-9308, visit www.justice.gov/atr/contact/newcase.htm or contact the FBI’s New York Division at 212-384-1000.
Former New Jersey Sales Representative Pleads Guilty to Fraud and Bribery Conspiracy in Power Generation IndustryRead the Press Release
WASHINGTON — A former sales representative of a Lyndhurst, N.J.-based industrial pipe supply company pleaded guilty today to participating in a conspiracy to commit fraud and pay bribes to a Consolidated Edison of New York (Con Edison) purchasing manager in return for the manager’s efforts to steer contracts to the sales representative’s company, the Department of Justice announced today.
Robert D. Rosenberg of Florham Park, N.J., pleaded guilty in U.S. District Court in Manhattan to participating in a conspiracy to defraud Con Edison. According to a one-count felony charge, Rosenberg and others paid approximately $297,000 in bribes to the former department manager in the purchasing department at Con Edison. In exchange, the former department manager steered industrial pipe supply contracts to the company Rosenberg represented. The department said the conspiracy took place from approximately November 2003 through approximately August 2008. According to the plea agreement, Rosenberg has agreed to cooperate with the department’s ongoing investigation into anticompetitive conduct in the power generation industry.
Con Edison is a regulated utility headquartered in Manhattan. It provides electric service to approximately 3.2 million customers and gas service to approximately 1.1 million customers in New York City and Westchester County, N.Y. Con Edison received more than $10,000 in federal funding each year between 2003 through 2008.
Rosenberg is charged with conspiracy which carries a maximum penalty of five years in prison and a $250,000 fine. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victim of the crime, if either of those amounts is greater than the statutory maximum fine.
Today’s plea is the second to arise from an ongoing federal investigation of bid rigging, bribery, fraud and tax-related offenses in the power generation industry. On Nov. 19, 2010, James M. Woodason, a former Con Edison manager, pleaded guilty in U.S. District Court in Manhattan to charges that he accepted and agreed to accept bribes from two Con Edison industrial pipe supply vendors. The investigation is being conducted by the Antitrust Division’s New York Field Office, with the assistance of the FBI’s New York Division and the Internal Revenue Service Criminal Investigation. Con Edison cooperated with the department’s investigation.
Anyone with information concerning bid rigging, bribery, tax offenses or fraud in the power generation industry should contact the Antitrust Division’s New York Field Office at 212-264-9308, visit www.justice.gov/atr/contact/newcase.htm or contact the FBI’s New York Division at 212-384-3252.
Former Employee of a Financial Institution Subsidiary Arrested on Criminal Complaint for Role in Fraud Scheme Involving Municipal BondsRead the Press Release
A former employee of a subsidiary of a financial institution was arrested on a criminal complaint at John F. Kennedy International Airport in New York yesterday after entering the United States, announced the Department of Justice. Peter Ghavami, a Belgian national currently residing in Moscow, was arraigned today in U.S. District Court for the Southern District of New York on one count of wire fraud charged in criminal complaint unsealed today. The criminal complaint, filed on Sept. 16, 2010, alleges that Ghavami participated in a scheme to defraud a municipal bond issuer with respect to the investment of municipal bond proceeds.
According to the criminal complaint, from approximately January 2001 through approximately March 2004, Ghavami worked in the municipal derivatives group of the financial institution’s subsidiary as managing director and co-head of the municipal bond reinvestment and derivatives desk. The financial institution and its subsidiary acted as a broker of investment agreements and other municipal finance contracts, such as swaps, to public entities. Public entities typically hire a broker to conduct a competitive bidding process for the award of investment agreements to invest money from a variety of sources, primarily the proceeds of municipal bonds that they issued. Competitive bidding for these agreements by major financial institutions, often referred to as providers, is the subject of regulations issued by the U.S. Department of the Treasury and is related to the tax-exempt status of the bonds.
“Pernicious fraud schemes like the one alleged in this complaint undermine the public’s confidence and trust in the municipal bond and derivatives markets,” said Christine Varney, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. “This type of anticompetitive conduct will be prosecuted to the fullest extent.”
According to the court document, Ghavami engaged in a fraudulent scheme beginning on or about Oct. 24, 2001, and continuing to at least Feb. 11, 2002, to deprive a municipal bond issuer of money by causing it to award an investment agreement at an artificially determined or suppressed rate. The municipal bond issuer hired the financial institution subsidiary that Ghavami worked for to act as its broker to conduct a competitive bidding process to select a provider in which to invest proceeds from a municipal bond offering. As a part of the scheme, Ghavami designated in advance which provider would be the winning bidder for a certain investment agreement in exchange for a kickback to be paid to his employer. The undisclosed kickback, in the amount of $100,000, was disguised as a fee and paid in exchange for Ghavami’s assistance in manipulating and controlling the bidding process for the investment agreement.
The wire fraud charge with which Ghavami is charged carries a maximum penalty of 20 years in prison and a $250,000 fine. 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.
To date, eight people have pleaded guilty to charges based on an ongoing investigation into the municipal bond industry, which is being conducted by the Department of Justice’s Antitrust Division, the FBI and IRS Criminal Investigation. The department is coordinating its investigation with the Securities and Exchange Commission, the Office of the Comptroller of the Currency and the Federal Reserve Bank of New York.
Three former employees of Beverly Hills, Calif.-based Rubin/Chambers, Dunhill Insurance Services Inc. (CDR) have pleaded guilty to bid-rigging and fraud conspiracies in relation to the ongoing investigation. Five other individuals have pleaded guilty to charges related to the ongoing investigation. In addition, three former financial services executives were indicted on July 27, 2010, for participating in fraud schemes and conspiracies related to the bidding for investment agreements. In October 2009, CDR, two of its employees and one former employee were charged for participating in bid-rigging and fraud conspiracies and related crimes. The CDR trial is scheduled to begin on Sept. 12, 2011.
The ongoing investigation is part of efforts underway by President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. For more information on the task force, visit http://www.StopFraud.gov.
Anyone with information concerning bid rigging and related offenses in any financial markets should contact the Antitrust Division’s New York Field Office at 212-264-0390 or visit http://www.justice.gov/atr/contact/newcase.htm, or the FBI at 212-384-5000.
Florida West International Airways Inc., Three Executives Indicted in Conspiracy to Fix Rates on Air Cargo ShipmentsRead the Press Release
WASHINGTON — A Miami grand jury returned an indictment today against Miami-based Florida West International Airways Inc., one of its former executives and two executives of a competing air cargo carrier for participating in a conspiracy to fix and coordinate certain rates for air cargo shipments from Colombia to Miami, the Department of Justice announced today. Among the rates fixed were peak season surcharges imposed before Valentine’s Day and Mother’s Day, when imports of fresh-flowers increase, as well as security and fuel surcharges.
The one-count indictment, returned today in U.S. District Court in Miami, charges Luis Augusto Afanador, Rodrigo Hernan Hidalgo and Jaime Lara Rueda Sr. with conspiring to suppress and eliminate competition by fixing and coordinating certain cargo rates, including peak season, security and fuel surcharges for international air shipments from Colombia to Miami. The department said the conspiracy began at least as early as January 2002 and continued until at least Feb. 14, 2006. Florida West is charged with joining and participating in the conspiracy from at least as early as August 2002 and continuing until at least Feb. 14, 2006.
Air cargo carriers transport a variety of cargo, including fresh flowers, consumer goods, and electronics, on scheduled international flights.
According to the indictment, Florida West, Afanador, Hidalgo, Lara and co-conspirators participated in meetings, conversations and communications to discuss and agree on certain components of cargo rates and the elimination of discounts from Bogota to Miami. To facilitate the agreements reached, Florida West, Afanador, Hidalgo, Lara and co-conspirators discussed encouraging air cargo providers to maintain and increase certain components of air cargo rates for shipments from Miami to Bogota. In order to expand the agreements reached, Florida West, Afanador, Hidalgo, Lara and co-conspirators agreed not to compete for certain customers from Medellin, Colombia, to Miami beginning in the summer of 2005. As part of the conspiracy, Florida West, Afanador, Hidalgo, Lara and co-conspirators implemented and monitored the agreements reached, and accepted payments for shipments at collusive and noncompetitive rates.
Afanador and Lara are senior executives of a Colombian air cargo carrier based in Bogota. Hidalgo is a former vice president of sales and marketing for Florida West. Hidalgo was indicted on Oct. 28, 2010, by a Miami grand jury for participating in a separate conspiracy to fix surcharges on air cargo shipments from the United States to South and Central America following Hurricanes Katrina and Rita in 2005. That charge is pending.
Florida West, Afanador, Hidalgo and Lara are charged with price fixing in violation of the Sherman Act, which carries a maximum $100 million criminal fine for a corporation and a maximum penalty for each individual of 10 years in prison and a $1 million criminal fine. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.
Including today’s charges, as a result of this investigation, a total of 21 airlines and 19 executives have been charged in the Justice Department’s ongoing investigation into price fixing in the air transportation industry. To date, more than $1.7 billion in criminal fines have been imposed and four executives have been sentenced to serve prison time. Charges are pending against the remaining 15 executives.
Today’s charge is the result of a joint investigation into the air transportation industry being conducted by the Antitrust Division’s National Criminal Enforcement Section and Chicago Field Office, the FBI’s field offices in Miami and Washington, the Department of Transportation’s Office of Inspector General and the U.S. Postal Service’s Office of Inspector General. Anyone with information concerning price fixing or other anticompetitive conduct in the air transportation industry is urged to call the Antitrust Division’s National Criminal Enforcement Section at 202-307-6694 or the Chicago Field Office at 312-353-7530, visit www.justice.gov/atr/contact/newcase.htm, or call the FBI’s Miami Field Office at 305-654-1918.
Alabama Woman Pleads Guilty to Tax Fraud and Identity TheftRead the Press Release
MONTGOMERY, Ala. – Ora Mae Adamson, a resident of Montgomery County, Ala., pleaded guilty to one count of conspiring to defraud the United States and one count of identity theft, the Justice Department and the Internal Revenue Service (IRS) announced today. Adamson pleaded guilty before federal Magistrate Judge Charles S. Coody in the U.S. District Court in Montgomery.According to charging documents, between March 2009 and September 2009, Adamson conspired with others to defraud the United States by fraudulently obtaining the names and social security numbers of individuals, and filing false tax returns in these individuals’ names without authorization. The tax returns falsely claimed first-time homebuyer’s and fuel tax credits. As a result of Adamson’s scheme, the IRS disbursed a total of 158 false refunds. Adamson caused these refunds to be deposited into bank accounts she and her co-conspirators controlled. In all, the conspiracy defrauded the United States of $621,738.
Sentencing has not yet been scheduled. Adamson faces a maximum of 25 years in prison, three years of supervised release, restitution and a maximum fine of $500,000 or twice the loss resulting from her offenses.
John A. DiCicco, Acting Assistant Attorney General of the Justice Department’s Tax Division, thanked the U.S. Attorney’s Office for the Middle District of Alabama, IRS Criminal Investigation agents who investigated this case, as well as Tax Division trial attorneys Jason H. Poole and Michael Boteler, who prosecuted the case.
10-1377Líder de Latin Kings sentenciado a 262 meses de prisión por conspiración para cometer delincuencia organizadaRead the Press Release
WASHINGTON - Francisco Ortiz, alias “Francis Gabriel Ortis,” “Pone,” y “King Pone,” 26, de Rockville, Md., fueron sentenciados hoy por el Juez Federal de Distrito Alexander Williams Jr. en Greenbelt, Md, a 262 meses de prisión, seguidos de cinco años de libertad bajo supervisión, por conspiración para participar en una empresa de extorsión, en conexión con sus actividades pandilleras como miembro y líder de la pandilla "Nación Todopoderosa de Reyes y Reinas Latinos" [Almighty Latin King and Queen Nation (Latin Kings)].
La sentencia fue anunciada por el Secretario de Justicia Auxiliar Lanny A. Breuer de la División Criminal; el Fiscal Federal para el Distrito de Maryland Rod J. Rosenstein; la Agente Especial a Cargo Theresa R. Stoop de la División Local en Baltimore del Buró de Control de Bebidas Alcohólicas, Tabaco, Armas de Fuego y Explosivos [Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF)]; el Jefe J. Thomas Manger del Departamento de Policía del Condado de Montgomery; el Fiscal Estatal del Condado de Montgomery John McCarthy; el Jefe Roberto L. Hylton del Departamento de Policía del Condado de Prince George; y el Fiscal Estatal del Condado de Prince George Glenn F. Ivey.
"Como parte de su declaración del culpabilidad, el Sr. Ortiz admitió ser líder de esta pandilla violenta, y hoy está viendo las consecuencias de sus actos", dijo el Secretario de Justicia Breuer. "Al ir contra líderes de pandillas, debilitamos la estructura de la pandilla, y, finalmente, logramos una mayor seguridad en las comunidades aterrorizadas por las pandillas".
"La estrategia de combinar los recursos y la inteligencia de las dependencias locales, estatales y federales de las fuerzas del orden público de buscar formular cargos federales contra la delincuencia organizada está demostrando ser eficaz", dijo el Fiscal Federal Rod J. Rosenstein.
"Esta sentencia demuestra la seriedad y la determinación del Buró de Control de Bebidas Alcohólicas, Tabaco, Armas de Fuego y Explosivos [Bureau of Alcohol, Tobacco and Firearms (ATF)] y nuestros asociados de las fuerzas del orden público en llevar ante la justicia a los delincuentes violentos", dijo la Agente Especial a Cargo de la ATF Theresa R. Stoop. "Hemos trabajado sin descanso, y seguiremos haciéndolo, para proteger a nuestras comunidades contra los actos sin sentido de la violencia y la intimidación pandillera. Los delincuentes violentos que participan en actividades pandilleras no tienen lugar en nuestras comunidades y buscaremos retirarlos de las calles para garantizar la seguridad del público".
Según el acuerdo de declaración de culpabilidad de Ortiz, Latin Kings es una pandilla callejera violenta con miles de miembros en todos los Estados Unidos y el extranjero. Los Latin Kings tienen una estructura organizativa detallada y uniforme que se detalla – junto con diversas "oraciones", códigos de conducta y rituales – en un "manifiesto" escrito distribuido comúnmente a miembros de todo el país. Los miembros de los Latin Kings también reciben tradicionalmente "nombres de King" o "nombres de Queen", que son nombres distintos a sus nombres legales por los cuales son conocidos por otros miembros de la pandilla y terceros en la calle. A nivel local, los grupos de Latin Kings se organizan en "tribus", incluidos Royal Lion Tribe, MOG, Sun Tribe y UTL.
De acuerdo con el acuerdo de declaración de culpabilidad, a mediados de 2007, Ortiz se hizo miembro del Royal Lion Tribe en Maryland y la Tercera Corona/Forzador de la Tribu. Ortiz fue Primera Corona/Inca de la tribu en 2008, cuando miembros de la tribu Royal Lion formaron la tribu MOG. Ortiz lideró la tribu MOG hasta mediados de 2009, cuando fue retirado del poder; luego formó y se volvió líder de la tribu UTL. Como líder de los Latin Kings, Ortiz organizó reuniones donde se recogieron cuotas de miembros y se discutieron negocios de la pandilla. Como Primera Corona/Inca, Ortiz viajó a Pensilvania, Nueva York y Florida, donde se reunió con otros líderes de los Latin Kings.
Ortiz admitió que, como parte de sus actividades pandilleras, a fines del verano u otoño de 2007, Ortiz y otros miembros de los Latin Kings llevaron a cabo el robo armado de un narcotraficante en condominios en Langley Park, Md. De acuerdo con la declaración de culpabilidad, uno de los Latin Kings golpeó en la puerta del narcotraficante y cuando se abrió la puerta, Ortiz y otros dos miembros y asociados de los Latin Kings entraron al apartamento a la fuerza, cada uno portando un revolver. Una vez adentro, apuntaron sus revólveres contra las cabezas del narcotraficante y su joven hija. Los miembros de los Latin Kings mantuvieron al narcotraficante y a su hija a punta de pistola en la habitación mientras allanaban el domicilio, eventualmente robando algunas bolsas de cocaína en polvo.
De acuerdo con la declaración de culpabilidad, en diciembre de 2007, Ortiz y otros miembros y asociados de los Latin Kings participaron en el intento de asesinato de un sospechoso de ser miembro de una pandilla rival. Cuando varios miembros de los Latin Kings comenzaron a caminar en el área arbolada detrás de un complejo de condominios en Langley Park, una o más personas que se sospechaba eran miembros de la MS-13 comenzaron a dispararles. Después de que los Latin Kings corrieron a sus automóviles, Ortiz les hizo parar, salir de sus autos y cometió represalias contra los sospechosos de ser miembros de la MS-13. Cuando los Latin Kings encontraron a una persona que creían ser miembro de la MS-13, lo atacaron y acuchillaron.
Ortiz admitió que el 19 de enero de 2009, él y otros miembros y asociados de los Latin Kings amenazaron y agredieron físicamente a una Latin Queen, quien era la víctima pretendida de un bombardeo previo. Tres días antes, tres miembros de los Latin Kings habían sido sentenciados después de declararse culpables en ese caso. Ortiz y otros Latin Kings estuvieron presentes en la emisión de la sentencia en el Tribunal Federal de Distrito en Greenbelt. Bajo la creencia de que si la Latin Queen no era testigo o cambiaba su testimonio, los tres Latin Kings podrían apelar sus condenas por el bombardeo con éxito, Ortiz y otros Latin Kings implementaron un plan para agredir a la Latin Queen con la intención de influenciar, cambiar o evitar su testimonio. Agentes del ATF se enteraron del plan y pudieron prevenir el ataque.
Finalmente, Ortiz admitió que el 8 de julio de 2009, él y miembros de la tribu UTL intentaron asesinar a una persona en Germantown, Md. La víctima estaba caminando sobre una calle residencial con dos amigos cuando el automóvil se les acercó. Varias personas salieron del automóvil y se pusieron a perseguir a la víctima. En determinado momento, atraparon a la víctima y le golpearon en la parte posterior de la cabeza. La víctima calló al suelo donde Ortiz y otros Latin Kings golpearon a la víctima con un palo de béisbol, la patearon, golpearon y acuchillaron varias veces. Ortiz fue arrestado dos días después del ataque y en el momento de su arresto tenía tres machetes en su posesión.
Seis codemandados ya se han declarado culpables al cargo de conspiración para cometer delincuencia organizada. Todos permanecen bajo custodia federal.
La Fuerza de Tarea Regional de Control Antipandillas [Regional Anti-Gang Enforcement (RAGE) Task Force] liderada por el Buró de Control de Bebidas Alcohólicas, Tabaco, Armas de Fuego y Explosivos [ATF - Bureau of Alcohol, Tabaco, Firearms and Explosives], la que incluye al Departamento de Policía de Gaithersburg, Md., el Departamento de Policía del Condado de Montgomery; la Fiscalía Federal del Condado de Montgomery, el Departamento de Policía del Condado de Prince George; la Oficina del Alguacil del Condado de Montgomery; La Policía Estatal de Maryland, así como el Departamento de Policía de Nueva York, el Servicio Secreto de EE.UU. y el Servicio de Impuestos Internos - Investigación Criminal, proporcionaron asistencia en la investigación y la acusación.
Estuvieron a cargo de la acusación en el caso los Fiscales Federales Emily Glatfelter y David Salem, y la Abogada Litigante Lara M. Peirce de la Unidad de Pandillas de la División Criminal.
Latin Kings Leader Sentenced to 262 Months in Prison for Racketeering ConspiracyRead the Press Release
WASHINGTON - Francisco Ortiz, aka “Francis Gabriel Ortis,” “Pone,” and “King Pone,” 26, of Rockville, Md., was sentenced today by U.S. District Judge Alexander Williams Jr. in Greenbelt, Md., to 262 months in prison, followed by five years of supervised release, for conspiracy to participate in a racketeering enterprise, in connection with his gang activities as a member and leader of the Almighty Latin King and Queen Nation (Latin Kings).
The sentence was announced by Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Theresa R. Stoop of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) - Baltimore Field Division; Chief J. Thomas Manger of the Montgomery County Police Department; Montgomery County State’s Attorney John McCarthy; Chief Roberto L. Hylton of the Prince George’s County Police Department; and Prince George’s County State’s Attorney Glenn Ivey.
“As part of his plea, Mr. Ortiz admitted to being the leader of this violent gang, and today he is seeing the consequences,” said Assistant Attorney General Breuer. “By targeting gang leaders, we weaken a gang’s structure and, ultimately, make safer the communities that gangs terrorize.”
“The strategy of combining the resources and intelligence of local, state and federal law enforcement agencies to pursue federal racketeering charges is proving effective,” said U.S. Attorney Rod J. Rosenstein.
“This sentencing demonstrates how serious and determined ATF and our law enforcement partners are in bringing violent criminals to justice,” says ATF’s Special Agent in Charge Theresa R. Stoop. “We have and will continue to work tirelessly to protect our communities from senseless acts of gang violence and intimidation. Violent criminals involved in gang activity have no place within our communities and we will target and remove them to ensure the public is safe.”
According to Ortiz’s plea agreement, the Latin Kings is a violent street gang with thousands of members across the country and overseas. The Latin Kings have a detailed and uniform organizational structure, which is outlined – along with various “prayers,” codes of behavior and rituals – in a written “manifesto” widely distributed to members throughout the country. Members of the Latin Kings are also traditionally given “King Names” or “Queen Names,” which are names other than their legal names, by which they are known to members of the gang and to others on the street. At the local level, groups of Latin Kings are organized into “tribes,” including the Royal Lion Tribe, MOG, Sun Tribe and UTL.
According to the plea agreement, in mid-2007, Ortiz became a member of the Royal Lion Tribe in Maryland and the tribe’s Third Crown/Enforcer. Ortiz became the First Crown/Inca of the tribe in 2008, when members of the Royal Lion tribe formed the MOG tribe. Ortiz led the MOG tribe until mid-2009, when he was removed from power, then formed and became the leader of the UTL tribe. As a Latin King leader, Ortiz organized meetings where dues were collected from members and gang business was discussed. As First Crown/Inca, Ortiz traveled to Pennsylvania, New York and Florida where he met with other Latin King leaders.
Ortiz admitted that as part of his gang activities, in late summer or fall of 2007, Ortiz and other Latin King members carried out the armed robbery of a drug dealer at condominiums in Langley Park, Md. According to the plea agreement, one of the Latin Kings knocked on the drug dealer’s door and when the door opened, Ortiz and two other Latin King members and associates forced their way into the apartment, each carrying a gun. Once inside, they put their guns to the heads of the dealer and his young daughter. The Latin King members held the drug dealer and his daughter at gunpoint in the bedroom while they searched the residence, eventually stealing a few bags of powder cocaine.
According to the plea agreement, in December 2007, Ortiz and other Latin King members and associates participated in the attempted murder of a suspected rival gang member. When several Latin King members began walking in the wooded area behind a condominium complex in Langley Park, one or more people suspected to be MS-13 members began shooting at them. After the Latin Kings began running to their cars, Ortiz made them stop, get out of their cars and retaliate against the suspected MS-13 members. When the Latin Kings found an individual who they believed was a member of MS-13, they attacked and stabbed him.
Ortiz admitted that on Jan. 19, 2009, he and other Latin King members and associates threatened and attempted to physically assault a Latin Queen, who was the intended victim of an earlier firebombing. Three days earlier, three members of the Latin Kings had been sentenced after pleading guilty in that case. Ortiz and other Latin Kings attended the sentencing at U.S. District Court in Greenbelt. Believing that if the Latin Queen was not a witness or changed her testimony the three Latin Kings would be able to successfully appeal their convictions for the firebombing, Ortiz and other Latin Kings put a plan in place to assault the Latin Queen in an attempt to influence, change or prevent her testimony. ATF agents learned of the plan and were able to prevent the attack.
Finally, Ortiz admitted that on July 8, 2009, he and members of the UTL tribe attempted to murder a person in Germantown, Md. The victim was walking on a residential street with two friends when a car approached them. Several people got out of the car and began chasing the victim. The victim was eventually caught and struck in the back of the head. The victim fell to the ground where Ortiz and other Latin Kings beat the victim with a bat, kicked, punched and stabbed him multiple times. Ortiz was arrested two days after the attack and at the time of his arrest had three machetes with him.
Six co-defendants previously pleaded guilty to the racketeering conspiracy. All remain in federal custody.
The ATF-led Regional Anti-Gang Enforcement (RAGE) Task Force, which includes the Gaithersburg, Md., Police Department; the Montgomery County Police Department; the Montgomery County State’s Attorney’s Office; the Prince George’s County Police Department; the Prince George’s County State’s Attorney’s Office; the Montgomery County Sheriff’s Office; the Maryland National Capital Park Police - Prince George’s County Division; and the Maryland State Police; as well as the New York Police Department, the U.S. Secret Service and the Internal Revenue Service - Criminal Investigation provided assistance in the investigation and prosecution.
The case was prosecuted by Assistant U.S. Attorneys Emily Glatfelter and David Salem, and Trial Attorney Lara M. Peirce with the Criminal Division’s Gang Unit.
Former NOPD Officer Sentenced in Connection with Shootings on Danziger BridgeRead the Press Release
WASHINGTON – A former officer with the New Orleans Police Department (NOPD), was sentenced today to eight years in prison for conspiracy to obstruct justice and for misprision of a felony (for concealing a known crime), in connection with a federal investigation of two police-involved shootings that left two civilians dead and four others seriously wounded in the area of the Danziger Bridge in the days after Hurricane Katrina. In addition, Michael Hunter was ordered to pay a $2,500 fine and serve three years supervised release. On April 7, 2010, Hunter, 33, entered a guilty plea in federal court in New Orleans before U.S. District Court Judge Sarah S. Vance.
According to court documents, Hunter drove to the Danziger Bridge on Sept. 4, 2005, in a large Budget rental truck carrying officers in response to a radio call that said officers on the nearby I-10 bridge had come under fire. Hunter has admitted that officers on the east side of the Danziger Bridge fired at civilians even though the civilians did not appear to have any weapons. According to Hunter, one officer (Sergeant A) leaned over a concrete barrier, held out an assault rifle and, in a sweeping motion, fired repeatedly at the civilians, who were at that point lying wounded and apparently unarmed on the ground. Hunter also has admitted that he fired his weapon repeatedly at civilians who were running away over the bridge. In addition, Hunter has acknowledged that he did not see any weapons on these civilians, and that the civilians did not appear to pose a threat to officers as they ran up the bridge.
Hunter further admitted that he was present on the west side of the Danziger Bridge when an officer, identified as Officer A, shot and killed Ronald Madison, a civilian who was running away from officers with his hands in view, and did not have a weapon or pose a threat. Without warning, Officer A fired a shotgun at Madison’s back as Madison ran toward a motel at the bottom of bridge. Hunter also has described watching Sergeant A physically abuse Ronald Madison as he lay on the ground injured, but still alive.
Hunter has admitted that, in the wake of the shootings on the Danziger Bridge, he participated in a conspiracy to cover up the truth about what happened on the bridge. Specifically, he admitted, among other things, that he and other officers provided false statements about what happened on the Danziger Bridge; that before giving formal statements on tape, he and other officers met in a gutted-out police station and discussed their false stories; and that he lied to a state grand jury about what happened on the Danziger Bridge.
This case, which is ongoing, is being investigated by the New Orleans Field Office of the FBI, and is being prosecuted by Deputy Chief Bobbi Bernstein and Trial Attorney Forrest Christian of the Justice Department’s Civil Rights Division, along with Assistant U.S. Attorneys Julia K. Evans and Theodore Carter of the Eastern District of Louisiana.
Florida Man Indicted in “Ponzi” SchemeRead the Press Release
WASHINGTON – David R. Lewalski, formerly of Gainesville, Fla., was indicted today on conspiracy, mail fraud and wire fraud charges in connection with his participation in an investment fraud scheme, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division and U.S. Attorney Robert E. O’Neill of the Middle District of Florida.
Lewalski, 47, was originally charged by a criminal complaint and arrested on Nov. 4, 2010. If convicted, Lewalski faces a maximum penalty of 20 years in prison on each of the four counts in the indictment.
According to court documents, Lewalski and one or more coconspirators allegedly solicited money from investors in Florida and throughout the country based on false statements that Lewalski could earn them up to 10% interest per month through trading in the foreign currency (forex) market. Based on these and other fraudulent promises, Lewalski and his coconspirators allegedly took in approximately $30 million from hundreds of investors in Florida and across the country.
Court documents allege that Lewalski invested only a small portion of these investor funds in trading activities and generated little if any profits trading foreign currency. Lewalski made “interest payments” totaling approximately $15 million to investors using other investors’ money. According to court documents, Lewalski spent lavishly on himself, his friends and his family, spending millions of dollars leasing real estate and private jets, and purchasing luxury automobiles, clothing and jewelry.
An indictment is merely a formal charge that a defendant has committed a violation of the federal criminal laws. Every defendant is presumed innocent unless, and until, proven guilty.
This case is being prosecuted by Assistant U.S. Attorney Mandy Riedel and Trial Attorney Glenn Chernigoff of the Criminal Division’s Fraud Section. It is being investigated by the U.S. Postal Inspection Service and the Florida Department of Law Enforcement, with assistance from the Florida Office of the Attorney General.
Today’s charge is part of efforts being undertaken by President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.
For more information on the task force, visit StopFraud.gov.
Singapore Airlines Cargo Pte Ltd. Agrees to Plead Guilty to Price Fixing on Air Cargo ShipmentsRead the Press Release
WASHINGTON – Singapore Airlines Cargo Pte Ltd. has agreed to plead guilty and to pay a $48 million criminal fine for its role in a conspiracy to fix prices in the air transportation industry, the Department of Justice announced today.
According to a one-count felony charge filed today in U.S. District Court for the District of Columbia, Singapore-based Singapore Airlines Cargo engaged in a conspiracy to fix the cargo rates charged to certain customers in the United States and elsewhere for international air shipments from as early as February 2002, until at least Feb. 14, 2006. Under the plea agreement, which is subject to court approval, Singapore Airlines Cargo has also agreed to cooperate with the department’s ongoing antitrust investigation.
Singapore Airlines Cargo transports a variety of cargo shipments, such as heavy equipment, perishable commodities and consumer goods, on scheduled international flights, including to and from the United States.
According to the charges, Singapore Airlines Cargo and co-conspirators carried out the conspiracy by agreeing during meetings, conversations and other communications on one or more components of the cargo rates to be charged for shipments on certain routes to and from the United States. As part of the conspiracy, Singapore Airlines Cargo and co-conspirators levied cargo rates in accordance with the agreements reached, and monitored and enforced adherence to the agreed-upon cargo rates.
Singapore Airlines Cargo is charged with price fixing in violation of the Sherman Act, which carries a maximum fine for corporations of $100 million. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.
Including today’s charge, as a result of this investigation, a total of 20 airlines and 17 executives have been charged in the Justice Department’s ongoing investigation into price fixing in the air transportation industry. To date, more than $1.7 billion in criminal fines have been obtained and four executives have been sentenced to serve prison time. Charges are pending against the remaining 13 executives.
Today’s charge is the result of a joint investigation into the air transportation industry being conducted by the Antitrust Division’s National Criminal Enforcement Section, the FBI’s Washington Field Office, the Department of Transportation’s Office of Inspector General and the U.S. Postal Service’s Office of Inspector General. Anyone with information concerning price fixing or other anticompetitive conduct in the air transportation industry is urged to call the Antitrust Division’s National Criminal Enforcement Section at 202-307-6694, visit www.justice.gov/atr/contact/newcase.htm, or call the FBI’s Washington Field Office at 202-278-2000.
Nigerian Woman Sentenced to 15 Months in Prison for Her Role in Medicare Fraud SchemeRead the Press Release
WASHINGTON – A Nigerian woman was sentenced to 15 months in prison and three years of supervised release for her role in a Medicare fraud scheme, announced the Departments of Justice and Health and Human Services (HHS).
On March 1, 2010, Linda Eteimo Ere Kendabie, 29, of Nigeria, pleaded guilty to conspiring to commit health care fraud. Kendabie was sentenced yesterday by U.S. District Court Judge Vanessa D. Gilmore of the Southern District of Texas. Kendabie was also ordered to pay $461,244 in restitution to Medicare.
According to court documents, Kendabie worked as an administrative assistant for B.I. Medical Supply LLC, a Houston-area durable medical equipment (DME) company. Kendabie admitted that B.I. Medical billed Medicare for expensive, rigid orthotics and braces that were packaged together and referred to as an arthritis kit, at a cost of approximately $4,000 per kit, when, in fact, they supplied Medicare beneficiaries with different, less expensive products. Kendabie also admitted that the equipment supplied was not medically necessary. In total, B.I. Medical submitted approximately $846,000 in fraudulent claims to Medicare.
On Sept. 7, 2010, Modupe Babanumi, a patient recruiter for B.I. Medical Supply, was sentenced to 12 months and a day in prison. Babanumi pleaded guilty to one count of conspiracy to commit health care fraud on March 1, 2010.
Today’s sentencing was announced by Assistant Attorney General of the Criminal Division Lanny A. Breuer; U.S. Attorney José Angel Moreno of the Southern District of Texas; Special Agent-in-Charge Richard C. Powers of the FBI’s Houston Field Office; Special Agent-in-Charge Mike Fields of the Dallas Regional Office of HHS Office of Inspector General (HHS-OIG), Office of Investigations; and Texas Attorney General Greg Abbott.
This case is being prosecuted by Trial Attorneys Katherine Houston, Charles D. Reed, Sam S. Sheldon and Jennifer Saulino, of the Criminal Division’s Fraud Section. The case was brought as part of the Medicare Fraud Strike Force, supervised by the U.S. Attorney’s Office for the Southern District of Texas and the Criminal Division’s Fraud Section.
Since their inception in March 2007, Medicare Fraud Strike Force operations in seven districts have obtained indictments of more than 825 individuals who collectively have falsely billed the Medicare program for more than $2 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.
Justice Department Files Lawsuit Alleging Retaliation by the Puerto Rico Police DepartmentRead the Press Release
WASHINGTON — The Department of Justice announced today the filing of a lawsuit against the Policía de Puerto Rico (Puerto Rico Police Department or PRPD) alleging the PRPD retaliated against Agent Investigator Sofía Figueroa Rossy (Figueroa) for complaining about a hostile work environment based on sex, in violation of Title VII of the Civil Rights Act of 1964, as amended.
According to the Justice Department’s complaint, the PRPD retaliated against Figueroa when, after she complained of sexual harassment, the PRPD failed to keep Figueroa’s complaint confidential, involuntarily transferred her out of the PRPD’s Sex Crimes Division, and failed or refused to take action on Figueroa’s appeal of the involuntary transfer.
“All workers have the right to go to work each day without fear of discrimination or retaliation. Public employers should set an example for others by upholding the law and taking prompt and effective action to stop discrimination and retaliation,” said Assistant Attorney General Thomas E. Perez of the Civil Rights Division. “The Department of Justice will vigorously pursue such violations of Title VII.”
The Justice Department is seeking an order from the court that the PRPD take remedial steps to ensure a non-retaliatory workplace for its employees; that the PRPD supplement its mandatory training for all supervisors regarding sex discrimination and retaliation under Title VII so that complaints like Figueroa’s remain confidential and do not result in retaliation; and that the PRPD provide Figueroa with make-whole remedial relief , including compensatory damages for mental and/or physical injuries caused by the PRPD’s retaliatory conduct.
The San Juan Local Office of the Equal Employment Opportunity Commission investigated and attempted to resolve Figueroa’s charge of discrimination before referring it to the department for litigation. More information about the EEOC is available on its website at www.eeoc.gov
The enforcement of Title VII is a top priority of the Justice Department’s Civil Rights Division. Additional information about the Civil Rights Division is available on its websites at www.justice.gov/crt/ and www.justice.gov/crt/emp/
Houston Medical Equipment Company Manager Sentenced to 120 Months in Prison and Delivery Driver Sentenced to 41 Months in Prison for Roles in Medicare Fraud SchemeRead the Press Release
WASHINGTON – Houston-area residents Oliver Nkuku and Callistus Edozie were sentenced to 120 months in prison and 41 months in prison, respectively, for their roles in a durable medical equipment (DME) Medicare fraud scheme, the Departments of Justice and Health and Human Services (HHS) announced today.
Nkuku was sentenced yesterday by U.S. District Court Judge Lynn Hughes to 120 months in prison and three years of supervised release. Nkuku was also ordered to pay $453,112 in restitution jointly and severally with Edozie. Edozie was sentenced today by Judge Hughes to 41 months in prison and three years of supervised release. Edozie was ordered to pay $80,000 in restitution jointly and severally with Nkuku.
According to court documents, Nkuku was the manager of and controlled the day-to-day operations of KO Medical Inc., a Houston-area DME company. Edozie was a delivery driver for KO. Nkuku was convicted of one count of conspiracy to commit health care fraud and three counts of health care fraud after a week-long trial in July 2010. Upon conviction, Judge Hughes ordered Nkuku detained prior to sentencing and he has remained in federal detention since his trial. Edozie pleaded guilty prior to trial to one count of conspiracy to commit health care fraud and one count of defrauding a health care benefit program.
KO began billing Medicare for fraudulent DME in 2007, according to court documents. According to evidence introduced at trial, Nkuku submitted over $1.1 million in claims to Medicare on behalf of KO for DME, including power wheelchairs, that was medically unnecessary. The wheelchairs and accessories were billed as catastrophe-related in connection with Hurricanes Katrina, Rita, Ike and Gustav, even though many of the Medicare beneficiaries, including some who testified at trial, had never owned a power wheelchair during these catastrophes or had owned one that was not damaged during these catastrophes. According to court documents and evidence introduced at trial, Nkuku was previously convicted of fraud, and he failed to admit that previous conviction on documents he submitted to Medicare.
Edozie, as a part of his plea, admitted to delivering medically unnecessary DME, including power wheelchairs, to Medicare beneficiaries whom he knew did not need, and in some cases did not even want, the DME.
The sentences were announced by Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney José Angel Moreno of the Southern District of Texas; Richard C. Powers, Special Agent-in-Charge of the FBI’s Houston office; Special Agent-in-Charge Mike Fields of the Dallas Regional Office of the HHS Office of Inspector General (OIG), Office of Investigations; and Texas Attorney General Greg Abbott on behalf of the Texas Attorney General’s Medicaid Fraud Control Unit (MFCU).
The cases were prosecuted by Trial Attorney Jennifer L. Saulino and Deputy Chief Kathleen McGovern of the Criminal Division’s Fraud Section. The cases were investigated by the FBI, HHS-OIG and MFCU.
The case was brought as part of the Medicare Fraud Strike Force, supervised by the U.S. Attorney’s Office for the Southern District of Texas and the Criminal Division’s Fraud Section. Since their inception in March 2007, Strike Force operations in seven districts have obtained indictments of more than 825 individuals who collectively have falsely billed the Medicare program for more than $2 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.
Former Employee of a Financial Institution Subsidiary Pleads Guilty for Role in Bid-rigging and Fraud Conspiracies Involving Municipal BondsRead the Press Release
A former employee of a subsidiary of a financial institution pleaded guilty today for his participation in bid-rigging and fraud conspiracies related to contracts for the investment of municipal bond proceeds and other municipal finance contracts, the Department of Justice announced.
According to the plea proceeding held today in U.S. District Court in New York City, James L. Hertz, a resident of Cranford, N.J., engaged in separate bid-rigging and fraud conspiracies related to the provision of a type of contract, known as an investment agreement, and other municipal finance contracts, including derivatives contracts, to public entities throughout the United States, such as state, county and local governments and agencies. Hertz also pleaded guilty to one count of wire fraud. According to the plea agreement, Hertz has agreed to cooperate with the ongoing investigation.
According to the court document, from approximately 1994 through approximately December 2007, Hertz worked in the municipal derivatives group of the financial institution’s subsidiary as a vice president and a marketer of investment agreements and other municipal finance contracts. The Manhattan, N.Y.-based financial institution was a provider of investment agreements and other municipal finance contracts, such as swaps, to public entities. Public entities seek to invest money from a variety of sources, primarily the proceeds of municipal bonds that they issued, to raise money for, among other things, public projects. Public entities typically hire a broker to conduct a competitive bidding process for the award of the investment agreements to invest such money. Competitive bidding for these agreements is the subject of regulations issued by the U.S. Department of the Treasury and is related to the tax-exempt status of the bonds
The department said in court documents that Hertz was authorized to act as an agent of the financial institution in marketing investment agreements and other municipal finance contracts.
According to the court document, Hertz and co-conspirators engaged in a bid-rigging conspiracy from at least as early as October 2001 until at least November 2006. As a part of the bid-rigging conspiracy, Hertz and co-conspirators designated in advance which co-conspirator provider, either his employer or another financial institution, would be the winning bidder for certain investment agreements or other municipal finance contracts. Hertz and co-conspirators also agreed to submit intentionally losing bids for investment agreements or other municipal finance contracts that were steered to other financial institutions, giving the false appearance that these deals had been bid competitively in accordance with relevant U.S. Treasury regulations, or the requirements of the municipality.
According to the court documents, Hertz also participated in a fraud conspiracy with a broker located in Minnesota from as early as 1998 until at least November 2006. As part of this conspiracy, the broker gave Hertz information about the prices, price levels or conditions in competitors’ bids, a practice known as a “last look,” which is explicitly prohibited by U.S. Treasury regulations. On some occasions, the broker signaled Hertz to change his bids to specific numbers so that his employer could make more money. Hertz and co-conspirators also submitted intentionally losing bids to the broker for certain investment agreements to make it appear that his employer had competed for those agreement or contracts, when in fact, it had not. As a result of the bid manipulation, Hertz’s employer won investment agreements and other municipal finance contracts at artificially determined price levels, which deprived municipal issuers of money and property.
The court documents also charge that Hertz and co-conspirators misrepresented to municipal issuers or their bond counsel that the bidding process was in compliance with U.S. Treasury regulations. This caused the municipal issuers to award investment agreements and other municipal finance contracts to providers that otherwise would not have been awarded the contracts if the issuers had true and accurate information regarding the bidding process. Such conduct caused municipal issuers to file inaccurate reports with the Internal Revenue Service (IRS) and placed the tax-exempt status of the underlying bonds in jeopardy.
The bid-rigging conspiracy with which Hertz is charged carries a maximum penalty of 10 years in prison and a $1 million fine. The fraud conspiracy with which Hertz is charged carries a maximum penalty of five years in prison and a $250,000 fine. The wire fraud charge carries a maximum penalty of 20 years in prison and a $250,000 fine. The maximum fines for each of these offenses may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.
This is the eighth guilty plea to arise from an ongoing investigation into the municipal bonds industry, which is being conducted by the Antitrust Division’s New York Field Office, the FBI and IRS Criminal Investigation. The department is coordinating its investigation with the Securities and Exchange Commission, the Office of the Comptroller of the Currency and the Federal Reserve Bank of New York.
Three former employees of Beverly Hills, Calif.-based Rubin/Chambers, Dunhill Insurance Services Inc. (CDR) have pleaded guilty to bid-rigging and fraud conspiracies in relation to the ongoing investigation. Four other individuals have pleaded guilty to charges related to the ongoing investigation. In addition, three former financial services executives were indicted on July 27, 2010, for participating in fraud schemes and conspiracies related to the bidding for investment agreements. In October 2009, CDR, two of its employees and one former employee were charged for participating in bid-rigging and fraud conspiracies and related crimes. The CDR trial is scheduled to begin on Sept. 12, 2011.
Today’s guilty plea is part of efforts underway by President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. For more information on the task force, visit www.StopFraud.gov.
Anyone with information concerning bid rigging and related offenses in any financial markets should contact the Antitrust Division’s New York Field Office at 212-264-0390 or visit www.justice.gov/atr/contact/newcase.htm, or the FBI at 212-384-5000.
El Secretario de Justicia de los Estados Unidos Eric Holder, los Secretarios Salazar y Visackaplauden la aprobación final de la Ley de Acuerdos Conciliatorios por ReclamosRead the Press Release
WASHINGTON – Hoy, los Departamentos de Justicia, del Interior y Agricultura aplaudieron la aprobación bipartidista por el Congreso de la Ley de Acuerdos Conciliatorios por Reclamos. La ley, recientemente aprobada por el Senado, proveerá fondos esperados hace muchos tiempo para los acuerdos alcanzados en la demanda Pigford II entablada por agricultores afroestadounidenses; la demanda Cobell entablada por indígenas estadounidenses con respecto a la administración de cuentas fiduciarias y recursos indígenas; y cuatro demandas separadas asociadas a derechos sobre el agua entabladas por tribus indígenas estadounidenses. El Presidente Barack Obama ha dicho que firmará la ley.
"Se trata de acuerdos verdaderamente históricos que no solo resuelven litigios, sino que también ofrecen una nueva relación entre muchos estadounidenses merecedores y dependencias federales que ocupan un papel importante en sus vidas", dijo el Secretario de Justicia de los Estados Unidos Eric Holder. "El cierre de este litigio ha sido una prioridad para este gobierno, y el voto de hoy en el Congreso es un importante logro histórico. Estos casos proveen acuerdos justos para los demandantes y para los contribuyentes estadounidenses.
"La aprobación del acuerdo conciliatorio del caso Cobell y los cuatro acuerdos conciliatorios sobre derechos indígenas al agua son hechos históricos para las naciones indígenas", dijo el Secretario del Interior Ken Salazar. "Los acuerdos conciliatorios tratan, de forma honorable y responsable, de injusticias existentes hace mucho tiempo y representan un paso hacia adelante en la intención del Presidente Obama de otorgar a los gobiernos tribales, cumplir con nuestras responsabilidades fideicomisarias para con los miembros tribales y ayudar a los líderes tribales a construir comunidades más seguras, más fuertes, más saludables y más prósperas".
"El Presidente Obama y yo realizamos un compromiso firme no solo de tratar a todos los agricultores de manera justa e igualitaria, sino también arreglar las injusticias cometidas por el Departamento de Agricultura de EE.UU. [U.S. Department of Agriculture (USDA)] en el pasado", dijo el Secretario de Agricultura Tom Vilsack. "Aplaudo a quienes tomaron este paso histórico para asegurar que los agricultores negros que fueron objeto de discriminación cometida por su gobierno finalmente tengan justicia. Y felicito a quienes lideraron esta lucha en el Congreso de EE.UU. y agradezco su determinación inquebrantable. El voto de hoy ayudará al Departamento de Agricultura a dejar atrás este capítulo triste de la historia. La legislación aprobada por el Senado y el Congreso incluye fuertes protecciones contra el desperdicio, el fraude y el abuso para garantizar la integridad del proceso de reclamos. En los meses y años que vienen, no dejaremos de trabajar en transportar al Departamento a una nueva era como empleador modelo y proveedor de servicios de primera línea. También debemos continuar el buen trabajo que comenzamos y resolver todos los demás reclamos administrativos".
El Secretario de Justicia de los Estados Unidos Eric Holder habla en la conferencia de prensasobre la Operación en Nuestros Portales IIRead the Press Release
Buenos días y gracias a todos por venir.
Me acompañan hoy dos de los principales líderes en la labor realizada por el gobierno de EE.UU. para combatir los delitos de propiedad intelectual – John Morton, el Director del Servicio de Inmigración y Control de Aduanas, y Ron Machen, el Fiscal Federal para el Distrito de Columbia.
Nos complace anunciar un paso importante en nuestra labor constante para proteger los intereses y la seguridad de los consumidores, para asegurar la fuerza de nuestros mercados y para proteger los derechos de propiedad intelectual de innovadores y empresarios.
A lo largo de los últimos días, la División Criminal del Departamento de Justicia, el Departamento de Seguridad Nacional y nueve Fiscalías Federales de todo el país obtuvieron y ejecutaron órdenes de confiscación contra 82 nombres de dominios de portales en Internet dedicados a la venta y distribución de mercaderías falsificadas y obras ilegales objeto de violación de derechos de autor.
Esta labor coordinada de las fuerzas del orden público - conocida como "Operación en Nuestros Portales II" - se concentró en detallistas en el Internet de una amplia gama de mercaderías falsificadas, incluidos equipos deportivos, calzado, carteras, ropa deportiva, gafas solares y copias ilegales de DVDs, música y programas de informática.
En el transcurso de esta operación, agentes de las fuerzas del orden público federales realizaron compras encubiertas de una variedad de detallistas en el Internet bajo sospecha de vender mercaderías falsificadas. En el caso de los artículos en que se pudo confirmar que eran falsificados o violaban la ley, se obtuvieron órdenes de confiscación para los nombres de los dominios de los portales en Internet que vendían estas mercaderías a través de Jueces Auxiliares Federales.
A partir de hoy - lo que se conoce como "Lunes Cibernético" y como el día de más compras en Internet del año - cualquier persona que intente acceder a uno de estos sitios utilizando su nombre de dominio ya no logrará realizar una compra. En su lugar, los compradores en Internet encontrarán un aviso que les notifica que el nombre del dominio del portal ha sido confiscado por autoridades federales.
Con las confiscaciones de hoy, estamos obstaculizando la venta de miles de artículos falsificados. Les estamos cortando los fondos a quienes busquen obtener ganancias a través de la venta de mercadería ilegal y de aprovecharse de la ingenuidad ajena. Y, a medida que avanza la temporada de compras para las fiestas de fin de año, aprovechamos para recordar a los consumidores que tengan cuidado al buscar buenos negocios y descuentos en Internet. Dicho de manera simple: Si el negocio parece demasiado bueno para ser real, probablemente lo sea.
El compromiso del Departamento de Justicia hacia hacer valer las leyes de PI nunca ha sido más fuerte. Esta labor es una de sus principales prioridades. Y a través del liderazgo de la División Criminal del Departamento y nuestras Fiscalías Federales - y con la ayuda del Servicio de Inmigración y Control de Aduanas [Immigration and Customs Enforcement (ICE)], el Buró Federal de Investigaciones [Federal Bureau of Investigation (FBI)], y muchas otras dependencias y asociados de las fuerzas del orden público - seguiremos adelante con nuestra labor de proteger los derechos de propiedad intelectual y desmantelar los mercados de mercaderías falsificadas o ilícitas.
Hace demasiado tiempo que el robo de ideas innovadoras o la venta de mercaderías falsificadas, defectuosas y peligrosas vienen aceptándose como "algo normal". Esto ha dejado de ser así. Los delitos de PI ponen en peligro las oportunidades económicas y la estabilidad financiera. Destruyen empleos. Contienen la innovación. Y pueden poner en peligro la salud y la seguridad de los hombres y mujeres que juramos proteger.
No se equivoquen: Los delitos de propiedad intelectual sí tienen víctimas, y no están libres de riesgos.
Las confiscaciones de nombres de dominios de hoy son el resultado de una serie de pasos críticos que tomamos recientemente para asegurar la protección de los derechos de propiedad intelectual.
Durante la "Operación Nuestros Portales I" a lo largo del verano, las autoridades ejecutaron órdenes de confiscación contra los nombres de dominios de varios portales que ofrecían copias ilegales de estrenos de películas. En febrero último, reestablecí la Fuerza de Tarea de Propiedad Intelectual del Departamento, la cual está fortaleciendo nuestra labor de investigación y enjuiciamiento de los delitos de PI. Y el mes pasado, viajé a Hong Kong y Beijing para encontrarme con nuestros colegas de las fuerzas del orden público de China y de alrededor del mundo para pedirles que hagan más para luchar contra estos delitos.
A través de la Fuerza de Tarea y otras iniciativas, hemos mejorado la coordinación con nuestros asociados en las fuerzas del orden público federales. En particular, deseo mencionar la gran labor que se está realizando a través del Centro nacional de Coordinación de Derechos de Propiedad Intelectual, liderado por nuestros colegas en ICE y que reúne a investigadores y analistas de una serie de dependencias federales.
Sin estas asociaciones, el éxito de hoy no hubiera sido posible.
Estoy especialmente agradecido por los aportes de la Sección de Delitos de Informática y Propiedad Intelectual de la División Criminal, así como de nuestras Fiscalías Federales en el Distrito de Columbia, el Distrito Sur de Nueva York, el Distrito Medio de Florida, el Distrito de Colorado, el Distrito Sur de Texas, el Distrito Central de California, el Distrito Norte de Ohio, el Distrito de Nueva Jersey y el Distrito Oeste de Washington.
Todos los que han contribuido con la operación de hoy - los muchos agentes, investigadores, abogados y personal de apoyo - han trabajado largas horas en proteger a los consumidores y los derechos de propiedad intelectual. Gracias a todos ustedes por su trabajo sobresaliente.
Y si bien el progreso alcanzado hoy es un paso importante, no podemos darnos por satisfechos. No debemos dormirnos sobre nuestros laureles.
Nuestra lucha contra los delitos de propiedad intelectual continúa. En los días críticos que nos esperan, insto a los consumidores a que estén atentos y compartan inquietudes e información con nosotros. Insto a todos nuestros asociados de las fuerzas del orden público a que sigan adelante con el fantástico trabajo que vienen realizando.
Con su ayuda, creo que podremos resolver un problema que representa una amenaza para la seguridad de los consumidores y para la seguridad económica de nuestra nación.
Gracias a todos. Ahora, entrego la palabra al Director John Morton.
El Departamento de Justicia entabla demanda que alega represalias por parte del Departamento de Policía de Puerto RicoRead the Press Release
WASHINGTON – El Departamento de Justicia anunció hoy que se entabló una demanda contra la Policía de Puerto Rico [Puerto Rico Police Department o PRPD], alegando represalias por parte del PRPD contra la Agente Investigadora Sofía Figueroa Rossy (Figueroa) por quejarse de un ambiente de trabajo hostil basado en el sexo, en violación del Título VII de la Ley de Derechos Civiles de 1964 y sus enmiendas.
De acuerdo con la demanda del Departamento de Justicia, el PRPD tomó represalias contra Figueroa después de que se quejó de acoso sexual, el PRPD dejó de mantener la confidencialidad de la queja de Figueroa, la transfirió contra su voluntad de la División de Delitos Sexuales del PRPD, y dejó de o se negó a tomar acción con respecto a la apelación de la transferencia involuntaria presentada por Figueroa.
“Todos los trabajadores tienen derecho a dirigirse al trabajo sin temor a la discriminación o represalias. Los empleadores públicos debe ser ejemplos para los demàs, respetando la ley y tomando acción inmediata y efectiva para acabar con la discriminación y las represalias”, dijo el Secretario de Justicia Auxiliar Thomas E. Pérez de la División de Derechos Civiles. “El Departamento de Justicia enjuiciarà enérgicamente dichas violaciones del Título VII”.
El Departamento de Justicia ha solicitado una orden al tribunal para que el PRPD tome medidas correctivas para asegurar un ambiente de trabajo sin represalias para sus empleados; para que el PRPD suplemente su capacitación obligatoria para todos lo supervisores con relación a la discriminación sexual y las represalias bajo el Título VII, de modo que quejas como las de Figueroa permanezcan confidenciales y no resulten en represalias; y para que el PRPD proporcione a Figueroa compensación completa, incluidos daños compensatorios debido a lesiones mentales y/o físicas causadas por la conducta vengativa del PRPD.
La Oficina Local de San Juan de la Comisión para la Igualdad de Oportunidades en el Empleo [Equal Employment Opportunity Commission (EEOC)] investigó e intentó resolver el cargo de discriminación presentado por Figueroa antes de referirlo al Departamento para litigio. Para obtener màs información sobre la EEOC, visite su portal en www.eeoc.gov.
Hacer valer el Título VII es una de las principales prioridades de la División de Derechos Civiles del Departamento de Justicia. Para obtener información adicional sobre la División de Derechos Civiles, visite sus portales www.justice.gov/crt/ y www.justice.gov/crt/emp/.
Attorney General Holder, Secretaries Salazar and Vilsack Applaud Final Passage of the Claims Settlement ActRead the Press Release
WASHINGTON – Today, the Departments of Justice, Interior and Agriculture applauded the bipartisan House passage of the Claims Settlement Act. The act, which recently passed the Senate, will provide long-awaited funding for the agreements reached in the Pigford II lawsuit, brought by African American farmers; the Cobell lawsuit, brought by Native Americans over the management of Indian trust accounts and resources; and four separate water rights suits made by Native American tribes. President Barack Obama has said that he will sign the legislation into law.
"These are truly historic settlements that do not only resolve litigation, but also offer a new relationship between many deserving Americans and the federal agencies that play an important role in their lives," said Attorney General Eric Holder. "Bringing this litigation to a close has been a priority for this administration, and today’s vote in Congress is a significant, historic achievement. These cases provide fair deals for the plaintiffs and for the American taxpayers."
"Congress’ approval of the Cobell settlement and the four Indian water rights settlements is nothing short of historic for Indian nations," Secretary of the Interior Ken Salazar said. "The settlements honorably and responsibly address long-standing injustices and represent a major step forward in President Obama’s agenda to empower tribal governments, fulfill our trust responsibilities to tribal members and help tribal leaders build safer, stronger, healthier and more prosperous communities."
"President Obama and I made a firm commitment not only to treat all farmers fairly and equally, but to right the wrongs in USDA’s past," said Agriculture Secretary Tom Vilsack. "I applaud those who took this historic step to ensure black farmers who faced discrimination by their government finally receive justice. And I commend those who led this fight in the U.S. Congress and I am thankful for their unwavering determination. Today’s vote will help the Department of Agriculture move beyond this sad chapter in history. The bill that passed the Senate and House includes strong protections against waste, fraud, and abuse to ensure integrity of the claims process. In the months and years ahead, we will not stop working to move the Department into a new era as a model employer and premier service provider. We also must continue the good work we started to resolve all remaining administrative claims."
Tribunales Federales ordenan la confiscación de 82 dominios de portales en Internet involucrados en la venta de mercadería falsificada como parte de unainiciativa del DOJ y del ICE del "Lunes Cibernético"Read the Press Release
WASHINGTON – Se han ejecutado órdenes de confiscación contra los nombres de 82 nombres de dominios de portales comerciales en Internet dedicados a la venta y distribución ilegal de mercaderías falsificadas y obras protegidas por leyes de propiedad intelectual como parte de la Operación en nuestros Portales v 2.0, anunciaron hoy el Secretario de Justicia de los Estados Unidos Eric Holder y el Director John Morton del Servicio de Inmigración y Control de Aduanas [Immigration and Customs Enforcement (ICE)] del Departamento de Seguridad Nacional.
La operación coordinada de las fuerzas del orden público federales tuvo como objetivo a vendedores detallistas en el Internet de una amplia gama de mercaderías falsificadas, incluidos equipos deportivos, calzado, carteras, ropa deportiva y gafas solares, así como copias ilegales de juegos en caja en DVDs de música y programas de computadora con derechos de autor.Durante la operación, agentes de las fuerzas del orden público federales realizaron compras encubiertas de vendedores detallistas en Internet sospechados de vender mercaderías falsificadas. En muchos casos, las mercaderías fueron enviadas directamente a los Estados Unidos de proveedores en otros países a través de correo expreso internacional. Si se confirmaba que la mercadería era falsificada o ilegal, se obtenían órdenes de confiscación de los nombres de los dominios de los portales que vendían los productos a través de Jueces Auxiliares Federales de EE.UU. Las personas que intenten acceder a los portales encontrarán ahora un aviso de que el nombre del dominio de dicho portal ha sido confiscado por las autoridades federales.
"Al confiscar dichos nombres de dominios, hemos obstaculizado la venta de miles de artículos falsificados, cortándoles también los ingresos a quienes están dispuestos a aprovecharse de la ingenuidad ajena por ganancias personales", dijo el Secretario de Justicia de los Estados Unidos Holder. "Los delitos de propiedad intelectual dejan víctimas. El robo de ideas y la venta de mercaderías falsificadas representan una amenaza a las oportunidades económicas y la estabilidad financiera, contienen la innovación y destruyen empleos. El Departamento de Justicia, con la ayuda de nuestros asociados de las fuerzas del orden público, está cambiando la percepción de que estos delitos son libres de riesgos con acciones de control como la que se anuncia hoy".
"La venta de marcas estadounidenses falsificadas en Internet roba la labor creativa de otros, le cuesta empleos e ingresos a nuestra economía y puede poner en riesgo la salud y la seguridad de los consumidores estadounidenses", dijo el Director de ICE John Morton. "La protección de la propiedad intelectual es una de las principales prioridades de Investigaciones de Seguridad Nacional y el Centro nacional de Coordinación de Derechos de Propiedad Intelectual. Nos dedicamos a proteger los empleos, los ingresos y los ingresos tributarios que desaparecen cuando se trafican mercaderías falsificadas".
La operación se base en la Operación en Nuestros Portales I, anunciada en junio de 2010. En dicha prima acción de esta iniciativa de control más amplia, las autoridades ejecutaron órdenes de confiscación contra nueve nombres de dominios de portales en Internet que ofrecían copias pirateadas de películas recién lanzadas.
La operación nacional estuvo liderada por el Centro Nacional de Coordinación de Propiedades Intelectuales [National Intellectual Property Rights Coordination Center (IPR Center) ], liderado por Investigaciones de Seguridad Nacional [Homeland Security Investigations (HSI)] del ICE, en coordinación con la Sección de Delitos de Informática y la Sección de Propiedad Intelectual de la División Criminal y nueve Fiscalías Federales, incluidos el Distrito Sur de Nueva York; el Distrito de Columbia; el Distrito Medio de Florida; el Distrito de Colorado; el Distrito Sur de Texas; el Distrito Central de California; el Distrito Norte de Ohio; el Distrito de Nueva Jersey; y el Distrito Oeste de Washington. La Sección de Confiscación de Activos y Lavado de Dinero de la División Criminal también brindó importante asistencia.
El Centro IPR es una de las principales armas del gobierno de EE.UU. en la lucha contra la falsificación y la piratería criminal. El Centro IPR está liderado por HSI del ICE e incluye a asociados de la Oficina de Aduanas y Protección Fronteriza de los EE.UU.; el Buró Federal de Investigaciones [Federal Bureau of Investigation (FBI)]; el Departamento de Comercio; la Administración de Medicamentos y Alimentos de los EE.UU.; el Servicio de Inspección Postal; la Administración de Servicios Generales, la Oficina del Inspector General; el Servicio Naval de Investigaciones Criminales; el Servicio de Investigaciones Criminales de Defensa; la Unidad de Fraude de Compras Mayores de la División de Investigaciones Criminales del Ejército; la Comisión de Seguridad de Productos de Consumo; INTERPOL; y el Servicio Administrativo de Impuestos del Gobierno de México. El Centro IPR permite a las fuerzas del orden público y al sector privado tratar en forma conjunta del problema transnacional creciente de los productos falsificados. El Centro IPR coordina las iniciativas de extensión comunitaria a los que poseen los derechos de autor estadounidenses y conduce iniciativas de aplicación legal domésticas e internacionales, así como coordina y dirige investigaciones contra la falsificación. Para conocer más sobre el Centro IPR, visite www.ice.gov
Las acciones de cumplimiento anunciadas hoy son un ejemplo del tipo de labor realizada por la Fuerza de Tarea sobre la Propiedad Intelectual [Task Force on Intellectual Property (IP Task Force)]. El Secretario de Justicia de los Estados Unidos Eric Holder creó la Fuerza de Tarea IP para combatir el número creciente de delitos nacionales e internacionales contra la propiedad intelectual, proteger la salud y la seguridad de los consumidores estadounidenses, y salvaguardar la seguridad económica de la nación contra quienes busquen obtener ganancias ilegalmente a partir de la creatividad, la innovación y el trabajo arduo ajenos. La Fuerza de Tarea de PI busca fortalecer la protección de los derechos de propiedad intelectual a través de una mayor aplicación legal criminal y civil, una mayor coordinación entre asociados federales, estatales y locales de las fuerzas del orden público y una mayor concentración en la labor de control internacional, incluido el refuerzo de relaciones con asociados extranjeros clave y líderes industriales estadounidenses. Para conocer más sobre la Fuerza de Tarea de PI, visite www.justice.gov/dag/iptaskfor ce/.
Statement of Attorney General Eric Holder on Glenn FineRead the Press Release
WASHINGTON - “For more than fifteen years, Glenn Fine’s commitment to integrity and professionalism has helped the Department of Justice fulfill its most important responsibilities. It has been a privilege to work with Glenn during my service as both Attorney General and Deputy Attorney General. Throughout his decade-long tenure as Inspector General, he has embodied the Justice Department’s highest ideals and greatest traditions of service.
“In the Justice Department’s most critical operations and practices, especially our efforts to combat corruption, fraud, waste and abuse, the work done by the Office of the Inspector General is essential. Thanks to Glenn’s outstanding leadership, this Office has never been stronger.
“I am grateful for his service, and I am certain that the Justice Department and the American people will continue to benefit from Glenn’s enduring contributions.”
Justice Department Requires GrafTech International to Make Key Changes to Supply Contracts in Order to Proceed with its Acquisition of Seadrift LPRead the Press Release
WASHINGTON – The Department of Justice announced today that it has reached a settlement that will require GrafTech International Ltd., a major producer of graphite electrodes, to make significant modifications to its supply agreement with ConocoPhillips Company, along with reporting and firewall obligations, in order to proceed with its proposed acquisition of Seadrift Coke LP.
The department said, in its current form, the GrafTech-Conoco supply agreement and intended ongoing supply arrangements could encourage the exchange of pricing and output information or enable coordination between competitors –Conoco and Seadrift –for the production and sale of a critical petroleum product used in the production of graphite electrodes. The department said that requiring GrafTech to remove certain provisions from the GrafTech-Conoco supply agreement along with providing reports on demand and capacity utilization and implementing firewalls removes the ability and incentive for GrafTech and Conoco to coordinate on price and output post-acquisition.
The Department of Justice’s Antitrust Division filed a civil antitrust lawsuit today in U.S. District Court for the District of Columbia to prevent the proposed acquisition from extending the audit and most favored nation (MFN) provisions under the Conoco supply agreement to Seadrift and imposing conditions as a result of the ongoing supply arrangement. At the same time, the department filed a proposed settlement that, if approved by the court, would resolve the competitive concerns alleged in the lawsuit.
Graphite electrodes are used by steel manufacturers to conduct electricity into electric arc furnaces, which melt steel for a variety of applications. The supply agreement involves a critical petroleum product, called petroleum needle coke, which is an important input into the production of graphite electrodes. Seadrift makes petroleum needle coke.
"The proposed settlement removes a means for potential price and output coordination that otherwise likely would result in higher prices and reduced supply for consumers of this critical petroleum product," said Christine Varney, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. "At the same time, the settlement will permit quality improvements by GrafTech in Seadrift’s equipment and processes, benefiting consumers."
The department’s complaint alleges that the GrafTech-Conoco supply agreement includes provisions such as MFN pricing which, combined with a right for GrafTech to audit the books, records and documents of Conoco, could incentivize the exchange of contemporaneous, customer-specific pricing information between competitors Conoco and Seadrift post-acquisition. In this case, the MFN provision would have required that Conoco guarantee that no other customer can receive a lower price than GrafTech. Reporting and firewall obligations reduce the possibility of coordination on price or output as a result of ongoing supply arrangements.
The inclusion of reporting and firewall requirements in the terms of the proposed settlement, provides an important tool in the Antitrust Division’s efforts to ensure competition remains in this industry, Varney added.
The proposed settlement requires GrafTech to remove the audit rights and MFN pricing from its supply agreement with Conoco, and agree not to include similar provisions in future supply agreements for the 10-year term of the consent decree. During that time, GrafTech also must provide the department with copies of all supply agreements with Conoco, as well as copies of business documents relating to production, capacity and sales. The settlement also sets up firewalls that protect confidential and valuable competitor data. The reporting and firewall requirements will ensure that GrafTech will be precluded from sharing confidential Conoco information with Seadrift employees, that GrafTech will not share certain Seadrift information with Conoco, and Seadrift may not share confidential customer information with GrafTech.
GrafTech is a Delaware corporation headquartered in Parma, Ohio. GrafTech produces graphite electrodes at facilities in Mexico, Brazil, Africa, France and Spain. In 2009, GrafTech’s revenue from the sale of graphite electrodes was approximately $483 million.
Seadrift is a Delaware limited partnership, headquartered in Port Lavaca, Texas. Seadrift produces petroleum needle coke from a manufacturing plant in Port Lavaca that ships petroleum coke internationally. In 2009, Seadrift’s revenues were approximately $62 million.
As required by the Tunney Act, the proposed settlement, along with a competitive impact statement, will be published in the Federal Register. Any person may submit written comments concerning the proposed settlement during a 60-day comment period to Maribeth Petrizzi, Chief, Litigation II Section, 450 Fifth Street, N.W., Suite 8700, Washington, D.C. 20530. At the conclusion of the 60-day comment period, the U.S. District Court for the District of Columbia may enter the proposed settlement upon finding that it is in the public interest.
Justice Department Asks Federal Court to Shut Down Colorado Tax Return PreparerRead the Press Release
WASHINGTON - The United States has filed a complaint in federal court in Colorado against George Thomas Gaines of Aurora, Colo, the Justice Department announced today. The government’s lawsuit seeks to bar Gaines and his tax preparation companies from preparing federal tax returns for others.
According to the government’s complaint in the case, Gaines, through his companies, G&G Tax Service and American Benefits, prepares federal income tax returns for customers that claim losses for non-existent businesses and inflated or fabricated deductions in order to unlawfully understate tax liabilities or claim the earned income tax credit.
According to the complaint, the Internal Revenue Service has identified 210 returns prepared by Gaines between 2004 and 2007 that contain understatements of customers’ tax liabilities, out of 218 returns audited. The government alleges that these understatements have resulted in a tax harm of more than $900,000, and the total lost revenue could be as much as nearly $4 million.
This civil injunction action is part of the Justice Department’s nationwide crackdown on tax scams, including the preparation of fraudulent federal tax returns. Since 2001, the Justice Department has obtained hundreds of injunctions to stop the promotion of tax fraud schemes and the preparation of fraudulent returns. More information about the Justice Department’s Tax Division can be found at www.usdoj.gov/tax.
Related Documents:
United States v.
GeorgeThomas Gaines, et al.
Complaint for Permanent Injunction
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10-1356Federal Courts Order Seizure of 82 Website Domains Involved in Selling Counterfeit Goods as Part of DOJ and ICE Cyber Monday CrackdownRead the Press Release
WASHINGTON – Seizure orders have been executed against 82 domain names of commercial websites engaged in the illegal sale and distribution of counterfeit goods and copyrighted works as part of Operation In Our Sites v. 2.0, Attorney General Eric Holder and Director John Morton of the Department of Homeland Security’s Immigration and Customs Enforcement (ICE) announced today.
The coordinated federal law enforcement operation targeted online retailers of a diverse array of counterfeit goods, including sports equipment, shoes, handbags, athletic apparel and sunglasses as well as illegal copies of copyrighted DVD boxed sets, music and software.During the course of the operation, federal law enforcement agents made undercover purchases from online retailers suspected of selling counterfeit goods. In many instances, the goods were shipped directly into the United States from suppliers in other countries using international express mail. If the goods were confirmed as counterfeit or otherwise illegal, seizure orders for the domain names of the websites that sold the goods were obtained from U.S. magistrate judges. Individuals attempting to access the websites will now find a banner notifying them that the domain name of that website has been seized by federal authorities.
"By seizing these domain names, we have disrupted the sale of thousands of counterfeit items, while also cutting off funds to those willing to exploit the ingenuity of others for their own personal gain,” said Attorney General Holder. “Intellectual property crimes are not victimless. The theft of ideas and the sale of counterfeit goods threaten economic opportunities and financial stability, suppress innovation and destroy jobs. The Justice Department, with the help of our law enforcement partners, is changing the perception that these crimes are risk-free with enforcement actions like the one announced today.”
“The sale of counterfeit U.S. brands on the Internet steals the creative work of others, costs our economy jobs and revenue and can threaten the health and safety of American consumers,” said ICE Director John Morton. “The protection of intellectual property is a top priority for Homeland Security Investigations and the National Intellectual Property Rights Coordination Center. We are dedicated to protecting the jobs, the income and the tax revenue that disappear when counterfeit goods are trafficked.”
The operation builds upon Operation in Our Sites I, which was announced in June 2010. In that first action of this broader law enforcement initiative, authorities executed seizure warrants against nine domain names of websites offering pirated copies of first-run movies.
The nationwide operation was spearheaded by the National Intellectual Property Rights Coordination Center (IPR Center) led by ICE’s Office of Homeland Security Investigations (HSI), in coordination with the Criminal Division’s Computer Crime and Intellectual Property Section and nine U.S. Attorneys’ Offices including the Southern District of New York; District of Columbia; Middle District of Florida; District of Colorado; Southern District of Texas; Central District of California; Northern District of Ohio; District of New Jersey; and the Western District of Washington. The Criminal Division’s Asset Forfeiture and Money Laundering Section also provided significant assistance.
The IPR Center is one of the U.S. government’s key weapons in the fight against criminal counterfeiting and piracy. The IPR Center is led by ICE’s HSI and includes partners from U.S. Customs and Border Protection; the FBI; the Department of Commerce; the Food and Drug Administration; the Postal Inspection Service; the General Services Administration, Office of the Inspector General; the Naval Criminal Investigative Service; the Defense Criminal Investigative Service; the Army Criminal Investigative Division’s Major Procurement Fraud Unit; the Consumer Product Safety Commission, INTERPOL; and the Government of Mexi co Tax Administrative Service. The IPR Center allows law enforcement and the private sector jointly to address the growing transnational problem of counterfeit products. The IPR Center coordinates outreach to U.S. rights holders and conducts domestic and international law enforcement as well as coordinates and directs anti-counterfeiting investigations. To learn more about the IPR Center, visit www.ice.gov
The enforcement actions announced today are an example of the type of efforts being undertaken by the Department of Justice Task Force on Intellectual Property (IP Task Force). Attorney General Eric Holder created the IP Task Force to combat the growing number of domestic and international intellectual property crimes, protect the health and safety of American consumers, and safeguard the nation’s economic security against those who seek to profit illegally from American creativity, innovation and hard work. The IP Task Force seeks to strengthen intellectual property rights protection through heightened criminal and civil enforcement, greater coordination among federal, state and local law enforcement partners, and increased focus on international enforcement efforts, including reinforcing relationships with key foreign partners and U.S. industry leaders. To learn more about the IP Task Force, go to www.justice.gov/dag/iptaskforce/.
El Departamento deJusticia exige que GrafTech International realice cambios clave en contratosde suministro a fin de proseguir con su adquisición de Seadrift LPRead the Press Release
WASHINGTON – El Departamento de Justicia anunció hoy que ha logrado un acuerdo conciliatorio que exigirá que GrafTech International Ltd., un importante productor de electrodos de grafito, realice modificaciones importantes en su acuerdo de provisión con ConocoPhillips Company, junto con obligaciones de emisión de informes y firewall, a fin de proseguir con su adquisición de Seadrift Coke LP propuesta.
El Departamento dijo que, en su forma actual, el acuerdo de suministro GraftTech-Conoco y arreglos de provisión continua propuestos podrían estimular el intercambio de información de precios y salidas o permitir la coordinación entre competidores - Conoco y Seadrift - para la producción y la venta de un producto de petróleo crítico utilizado en la producción de electrodos de grafito. El Departamento dijo que exigir a GrafTech que eliminara ciertas disposiciones del acuerdo de suministro entre GraftTech y Conoco junto con la provisión de informes a pedido y utilización de capacidad e implementación de firewalls elimina la habilidad y el estimulo para que GraftTech y Conoco coordinen el precio y la salida después de la adquisición.
La División Antimonopolios del Departamento de Justicia presentó una demanda civil antimonopolios en el Tribunal Federal de Distrito para el Distrito de Columbia para evitar que la adquisición propuesta extendiera las disposiciones de auditoría y nación más favorecida [most favored nation (MFN)] bajo el acuerdo de provisión por Conoco a Seadrift e impusiera condiciones como resultado del arreglo de suministro continuo. Al mismo tiempo, el Departamento presentó una propuesta de acuerdo conciliatorio que, si es aprobada por el tribunal, resolvería las inquietudes en la demanda respecto de la competencia.
Los electrodos de grafito son utilizados por fabricantes de acero para conducir electricidad hacia hornos de arco eléctrico, los cuales derriten acero para una variedad de aplicaciones. El acuerdo de suministro se refiere aun producto de petróleo crítico llamado aguja de coque de petróleo, el cual es un suministro importante para la producción de electrodos de grafito. Seadrift fabrica agujas de coque de petróleo.
"El acuerdo propuesto elimina un medio de potencial coordinación de precios y producción que probablemente resultaría en precios más altos y suministro reducido para los consumidores de este producto de petróleo crítico", dijo Christine Varney, Secretaria de Justicia Auxiliar a cargo de la División Antimonopolios del Departamento de Justicia. "Al mismo tiempo, el acuerdo permitirá mejoras de calidad por GrafTech en los equipos y procesos de Seadrift, en beneficio de los consumidores".
La demanda entablada por el Departamento alega que el acuerdo de suministro GrafTech-Conoco incluye disposiciones tales como precios MFN, los cuales, combinados con el derecho de GrafTech a auditar los libros, registros y documentos de Conoco, podría estimular el intercambio de información contemporánea específica a clientes entre los competidores Conoco y Seadrift después de la adquisición. En este caso, la disposición de MFN hubiera exigido que Conoco garantizara que ningún otro cliente puede recibir un precio más bajo que GrafTech. Las obligaciones de emisión de informes e implementación de firewalls reducen la posibilidad de coordinación de precios o producción como resultado de arreglos de provisión continua.
La inclusión de las exigencias de emisión de informes y firewalls en lo que se refiere al acuerdo propuesto, provee una herramienta importante en la labor de la División Antimonopolios de asegurar que la competencia permanezca en este ramo, agregó Varney.
El acuerdo conciliatorio propuesto exige que GrafTech elimine los derechos de auditoría y precios MFN de su acuerdo de suministro con Conoco, y acepte no incluir disposiciones similares en futuros acuerdos de suministro durante el plazo de 10 años del decreto por consentimiento. Durante dicho tiempo, GrafTech también debe proveer al Departamento copias de todos los acuerdos de suministro con Conoco, así como copias de documentos comerciales relacionados con la producción, la capacidad y las ventas. El acuerdo conciliatorio también establece firewalls que protegen datos confidenciales y valiosos de la competencia. Las exigencias de emisión de informes e implementación de firewalls asegurarán que GrafTech no pueda compartir información confidencial de Conoco con empleados de Seadrift, que GrafTech no pueda compartir cierta información de Seadrift con Conoco, y que Seadrift no pueda compartir información confidencial de clientes con GrafTech.
GrafTech es una empresa establecida en Delaware con sede central en Parma, Ohio. GrafTech produce electrodos de grafito en establecimientos en México, Brasil, África, Francia y España. En 2009, los ingresos de GrafTech provenientes de la venta de electrodos de grafito fueron de aproximadamente $483 millones de dólares.
Seadrift es una sociedad limitada de Delaware, con sede en Port Lavaca, Texas. Seadrift produce aguja de coque de petróleo en una planta de manufactura en Port Lavaca que envía coque de petróleo a todo el mundo. En 2009, los ingresos de Seadrift fueron de aproximadamente $62 millones de dólares.
Como lo requiere la Ley Tunney, el acuerdo conciliatorio propuesto, junto con una declaración de impacto sobre la competencia, será publicado en el Registro Federal. Cualquier persona puede presentar comentarios por escrito relacionados con el acuerdo conciliatorio propuesto durante un periodo de comentario de 60 días a Maribeth Petrizzi, Chief, Litigation II Section, 450 Fifth Street, N.W., Suite 8700, Washington, D.C. 20530. Al finalizar el periodo de comentario de 60 días, el Tribunal Federal de Distrito para el Distrito de Columbia puede firmar el acuerdo conciliatorio propuesto al determinar que el mismo es de interés público.
D.C. Fish Wholesaler Profish Ltd. Owner and Employee Sentenced for Purchasing Illegally Harvested Striped BassRead the Press Release
WASHINGTON — Ocean Pro Ltd. dba Profish, one of the District of Columbia’s largest seafood wholesalers, as well as its vice-president and its fish buyer, were sentenced on Wednesday in U.S. District Court in Greenbelt, Md., for their roles in a more than decade-long conspiracy to illegally harvest striped bass from the Potomac River, the Department of Justice and U.S. Attorney’s Office for the District of Maryland announced today.
On Nov. 24, 2010, Timothy Lydon of Bethesda, Md., a part owner as well as officer in the company, was sentenced to 21 months in prison and ordered to pay $60,000 fine. Benjamin Clough of Graysonville, Md., a fish-buyer for Profish, was sentenced to 15 months in prison and ordered to pay a $7,500 fine. Profish was sentenced to three years probation, ordered to pay a fine of $575,000, restitution in the amount of $300,000 (for which both Lydon and Clough are also jointly liable) and a special assessment of $5,000. All the defendants’ fines will go to the Cooperative Endangered Species Conservation Fund, and restitution will be paid to the Commonwealth of Virginia Marine Resources Commission and the State of Maryland Department of Natural Resources.
Also sentenced today was Gordon Jett, of Fredericksburg, Va., the last of seven fishermen who supplied the striped bass that Lydon, Clough and Profish knew was illegal.
"When fisherman and fish wholesalers do not comply with the law, they imperil the entire fishery and adversely impact livelihoods of those in the fishing industry who abide by the law, and reap an impermissible economic advantage through their non-compliance," said Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division of the Department of Justice. "The Chesapeake Bay watershed is a national treasure, and the striped bass fishery is an important resource that we must protect from plunder for our enjoyment and that of future generations."
"If commercial fishermen and wholesalers obey the rules, we can all enjoy rockfish forever," said U.S. Attorney for the District of Maryland Rod J. Rosenstein. "If they don’t, the rockfish population could be wiped out very quickly. This case sends a message that we are serious about protecting the rockfish population in the Chesapeake Bay watershed.
On July 1, 2010, following a five-week jury trial, the Lydon, Clough and Profish were found guilty of purchasing illegally harvested striped bass, known locally as rockfish. The rockfish had been illegally harvested from the Potomac River in Virginia and Maryland from 1995 through 2007. All the defendants were convicted of conspiracy and violations of the Lacey Act, which prohibits individuals or corporations from transporting, selling or buying fish and wildlife harvested illegally. Clough was also convicted of making a false statement when he denied purchasing the illegally harvested fish to law enforcement during the investigation.
Jett, who, along with a number of other fishermen testified at trial, plead guilty a Lacey Act felony for his role in harvesting rockfish illegally. Jett admitted that in 2007 he commercially caught from the Potomac River in Virginia 14,850 pounds of rockfish that were either over size limits designed to protect spawning fish, were untagged, or were falsely tagged. Profish, Lydon and Clough then bought those illegal rockfish. Jett was sentenced today to five months in prison, five months of home of detention and to pay $4,572 in restitution.
"This cooperative investigation exposed a pattern of abuse that undermines state fishing laws in the name of profit and at the expense of the majority of fisherman who make their living lawfully," said Special Agent in Charge Sal Amato of the U.S. Fish and Wildlife Service’s Northeast Region. "Enforcing striped bass quotas ensures that future generations can continue to make their living on the Potomac River and Chesapeake Bay."
The sentencings last week and today cap a multi-state investigation and the prosecutions of illegal commercial striped bass harvest and sales that began in 2003 in the Chesapeake Bay watershed, and resulted in the conviction of 19 individuals in Maryland, Virginia and the District of Columbia, in addition to three corporate fish wholesalers.
Combined, the individuals have been sentenced to more than 140 months in prison, and total fines and restitution have exceeded $1,361,000. The cases revealed that in excess of one million pounds of striped bass worth more than $5 million were illegally harvested and sold through a number of schemes that involved the failure to affix required tags to the fish, fishing during closed season, falsely affixing required tags, taking fish in violations of size restrictions, falsifying required harvest records, and creating false receipts and records to conceal the harvests and sales from state regulators. The exploitation revealed during the investigation also contributed to Maryland revising portions of its striped bass regulations last year.
The evidence at the trial proved that Profish and Lydon began buying striped bass from Virginia fishermen fishing on the Potomac River in 1995. Lydon and Profish agreed to buy striped bass that they knew was illegally harvested by seven fishermen between 1995 and 2007. Clough joined Profish in 2001, and he continued to knowingly purchase the illegally harvested striped bass through 2007. In total, the defendants purchased more than 212,700 pounds of striped bass illegally harvested from Maryland and Virginia waters, with a fair market retail value more than $875,000. Evidence also showed that they altered records regarding their striped bass purchases, and changed records indicating the harvest date on shellfish to make it appear that they were harvested more recently than they were. Profish, Lydon and Clough also bought commercially caught striped bass more than the applicable size limit during the spawning season and did not have the required tags affixed. This allowed commercial fishermen to catch and sell more striped bass than they were allowed, and to catch and sell protected spawning striped bass from 1995 through 2007.
Fishermen are given a quota of striped bass that they are allowed to catch each year. The fishermen are issued plastic tags that they are required to affix to every striped bass harvested. In addition, during certain times of the spring, commercial striped bass fishing is prohibited, or, if allowed, a maximum striped bass size limit is imposed that prohibits the harvest of striped bass over that size. The quota restrictions and tagging requirements are designed to prevent the over-harvest of striped bass, and the seasonal closing and size restrictions are designed to protect striped bass while they are spawning and to protect the larger, sexually mature and more productive spawning fish. These restrictions were implemented in the early 1990s following the crash of the striped bass fishery in the 1980s, which resulted in a moratorium on commercial striped bass harvest from 1985 to 1990.
In early spring each year, striped bass (Morone saxatilis), enter the estuary or river where they were born to spawn, and then return to ocean waters to live, migrating along the coastline. Fish spawned from the Chesapeake Bay ecosystem contribute the greatest number of striped bass to the Atlantic coastal fishery, and the commercial fishery for Atlantic coastal striped bass is based primarily on migrations of fish born in the Chesapeake Bay area. Striped bass do not die after spawning. They may live up to 30 years and reach 50 pounds or more. The population of coastal Atlantic striped bass depends heavily upon the capability of older, larger, female striped bass to successfully reproduce.
The charges are a result of the investigation by an interstate task force formed by the U.S. Fish and Wildlife Service, the Maryland Natural Resources Police and the Virginia Marine Police, Special Investigative Unit in 2003. The task force conducted undercover purchases and sales of striped bass in 2003, engaged in covert observation of commercial fishing operations in the Chesapeake Bay and Potomac River area, and conducted detailed analysis of area striped bass catch reporting and commercial business sales records from 2003 through 2007.
These cases were prosecuted by Wayne D. Hettenbach and Kevin M. Cassidy of the Justice Department’s Environmental Crimes Section and Stacy Belf of the U.S. Attorney’s Office for the District of Maryland.
Oregon Resident Arrested in Plot to Bomb Christmas Tree Lighting Ceremony in PortlandRead the Press Release
PORTLAND – Mohamed Osman Mohamud, 19, a naturalized U.S. citizen from Somalia and resident of Corvallis, Ore., has been arrested on charges of attempting to use a weapon of mass destruction (explosives) in connection with a plot to detonate a vehicle bomb at an annual Christmas tree lighting ceremony earlier this evening in Portland, Ore., the Justice Department announced.
According to a criminal complaint signed in the District of Oregon, Mohamud was arrested by the FBI and Portland Police Bureau at approximately 5:40 p.m. (PST) Nov. 26, 2010 after he attempted to detonate what he believed to be an explosives-laden van that was parked near the tree lighting ceremony in Portland’s Pioneer Courthouse Square. The arrest was the culmination of a long-term undercover operation, during which Mohamud had been monitored closely for months as his alleged bomb plot developed. The device was in fact inert; and the public was never in danger from the device.
Mohamud is expected to make his initial appearance in federal court in Portland on Monday. He faces a maximum statutory sentence of life in prison and a $250,000 fine if convicted of the charge of attempting to use a weapon of mass destruction.
“The complaint alleges that Mohamud attempted to detonate what he believed to be a vehicle bomb at a crowded holiday event in downtown Portland, but a coordinated undercover law enforcement action was able to thwart his efforts and ensure no one was harmed,” said David Kris, Assistant Attorney General for National Security. “While the public was never in danger from the device, this case serves as yet another reminder of the need for continued vigilance both at home and abroad.”
Dwight C. Holton, U.S. Attorney for the District of Oregon, said, “This defendant’s chilling determination is a stark reminder that there are people -- even here in Oregon -- who are determined to kill Americans. The good work of law enforcement protected Oregonians in this case -- and we have no reason to believe there is any continuing threat arising from this case.”
“The threat was very real. Our investigation shows that Mohamud was absolutely committed to carrying out an attack on a very grand scale,” said Arthur Balizan, Special Agent in Charge of the FBI in Oregon. “At the same time, I want to reassure the people of this community that, at every turn, we denied him the ability to actually carry out the attack.”
According to the affidavit filed in support of the criminal complaint, in August 2009, Mohamud was in email contact with an unindicted associate (UA1) overseas who is believed to be involved in terrorist activities. In December 2009, while UA1 was located in the northwest frontier province of Pakistan, Mohamud and UA1 discussed the possibility of Mohamud traveling to Pakistan to engage in violent jihad. UAI allegedly referred Mohamud to a second unindicted associate (UA2) overseas and provided Mohamud with a name and email address to facilitate the process.
In the months that followed, Mohamud allegedly made several unsuccessful attempts to contact UA2. Ultimately, an FBI undercover operative contacted Mohamud via email in June 2010 under the guise of being an associate of UA1. Mohamud and the FBI undercover operative then agreed to meet in Portland in July 2010. At this meeting, Mohamud allegedly told the FBI undercover operative that he had written articles that were published in Jihad Recollections, an online magazine that advocated violent jihad. Mohamud also indicated that he wanted to become “operational.” Asked what he meant by “operational,” Mohamud stated that he wanted to put an “explosion” together, but needed help.
At a second meeting in August 2010, Mohamud allegedly told undercover FBI operatives he had been thinking of committing violent jihad since the age of 15. According to the affidavit, Mohamud then told the undercover FBI operatives that he had identified a potential target for a bomb: the annual Christmas tree lighting ceremony in Portland’s Pioneer Courthouse Square on Nov. 26, 2010.
According to the affidavit, the undercover FBI operatives cautioned Mohamud several times about the seriousness of this plan, noting there would be many people at the event, including many children, and emphasized that Mohamud could abandon his attack plans at any time with no shame. “You know there’s gonna be a lot of children there?” an undercover FBI operative asked Mohamud. According to the affidavit, Mohamud responded that he was looking for a “huge mass that will . . . be attacked in their own element with their families celebrating the holidays.” Further discussing the attack, Mohamud allegedly stated, “…it’s in Oregon; and Oregon like you know, nobody ever thinks about it.”
The affidavit alleges that in subsequent months, Mohamud continued to express his interest in carrying out the attack and worked on logistics. He allegedly identified a location to place the bomb and mailed bomb components to the undercover FBI operatives, who he believed were assembling the device. He also mailed them passport photos, as part of a plan to help him sneak out of the country after the attack. In addition, Mohamud provided the undercover FBI operatives with a thumb drive that contained detailed directions to the bomb location and operational instructions for the attack.
According to the affidavit, on November 4, 2010, Mohamud and the undercover FBI operatives traveled to a remote location in Lincoln County, Ore., where they detonated a bomb concealed in a backpack as a trial run for the upcoming attack. Afterwards, on the drive back to Corvallis, undercover FBI operatives questioned Mohamud as to whether he was capable of looking at the bodies of those who would be killed in the upcoming attack in Portland. According to the affidavit, Mohamud responded, “I want whoever is attending that event to leave, to leave either dead or injured.”
Upon returning to Corvallis that same day, the affidavit alleges that Mohamud recorded a video of himself with the undercover FBI operatives in which he read a written statement that offered a rationale for his bomb attack. On Nov. 18, 2010, undercover FBI operatives picked up Mohamud to travel to Portland in order to finalize the details of the attack.
Earlier this evening, Mohamud was arrested after he attempted to remotely detonate what he believed to be explosives in a van that was parked near the Christmas tree lighting ceremony in Portland, the affidavit alleges.
This case was investigated by the FBI, with assistance from the Oregon State Police, the Corvallis Police Department, the Lincoln County Sheriff’s Office and the Portland Police Bureau. The prosecution is being handled by Assistant U.S. Attorneys Ethan D. Knight and Jeffrey Sweet from the U.S. Attorney’s Office for the District of Oregon. Trial Attorneys Jolie F. Zimmerman and David Cora, from the Counterterrorism Section of the Justice Department’s National Security Division, are assisting.
The charges and allegations contained in the criminal complaint are merely allegations, and the defendant is presumed innocent unless and until proven guilty.
Oregon Resident Arrested in Plot to Bomb Christmas Tree Lighting Ceremony in PortlandRead the Press Release
PORTLAND – Mohamed Osman Mohamud, 19, a naturalized U.S. citizen from Somalia and resident of Corvallis, Ore., has been arrested on charges of attempting to use a weapon of mass destruction (explosives) in connection with a plot to detonate a vehicle bomb at an annual Christmas tree lighting ceremony earlier this evening in Portland, Ore., the Justice Department announced.
According to a criminal complaint signed in the District of Oregon, Mohamud was arrested by the FBI and Portland Police Bureau at approximately 5:40 p.m. (PST) Nov. 26, 2010 after he attempted to detonate what he believed to be an explosives-laden van that was parked near the tree lighting ceremony in Portland’s Pioneer Courthouse Square. The arrest was the culmination of a long-term undercover operation, during which Mohamud had been monitored closely for months as his alleged bomb plot developed. The device was in fact inert; and the public was never in danger from the device.
Mohamud is expected to make his initial appearance in federal court in Portland on Monday. He faces a maximum statutory sentence of life in prison and a $250,000 fine if convicted of the charge of attempting to use a weapon of mass destruction.
“The complaint alleges that Mohamud attempted to detonate what he believed to be a vehicle bomb at a crowded holiday event in downtown Portland, but a coordinated undercover law enforcement action was able to thwart his efforts and ensure no one was harmed,” said David Kris, Assistant Attorney General for National Security. “While the public was never in danger from the device, this case serves as yet another reminder of the need for continued vigilance both at home and abroad.”
Dwight C. Holton, U.S. Attorney for the District of Oregon, said, “This defendant’s chilling determination is a stark reminder that there are people -- even here in Oregon -- who are determined to kill Americans. The good work of law enforcement protected Oregonians in this case -- and we have no reason to believe there is any continuing threat arising from this case.”
“The threat was very real. Our investigation shows that Mohamud was absolutely committed to carrying out an attack on a very grand scale,” said Arthur Balizan, Special Agent in Charge of the FBI in Oregon. “At the same time, I want to reassure the people of this community that, at every turn, we denied him the ability to actually carry out the attack.”
According to the affidavit filed in support of the criminal complaint, in August 2009, Mohamud was in email contact with an unindicted associate (UA1) overseas who is believed to be involved in terrorist activities. In December 2009, while UA1 was located in the northwest frontier province of Pakistan, Mohamud and UA1 discussed the possibility of Mohamud traveling to Pakistan to engage in violent jihad. UAI allegedly referred Mohamud to a second unindicted associate (UA2) overseas and provided Mohamud with a name and email address to facilitate the process.
In the months that followed, Mohamud allegedly made several unsuccessful attempts to contact UA2. Ultimately, an FBI undercover operative contacted Mohamud via email in June 2010 under the guise of being an associate of UA1. Mohamud and the FBI undercover operative then agreed to meet in Portland in July 2010. At this meeting, Mohamud allegedly told the FBI undercover operative that he had written articles that were published in Jihad Recollections, an online magazine that advocated violent jihad. Mohamud also indicated that he wanted to become “operational.” Asked what he meant by “operational,” Mohamud stated that he wanted to put an “explosion” together, but needed help.
At a second meeting in August 2010, Mohamud allegedly told undercover FBI operatives he had been thinking of committing violent jihad since the age of 15. According to the affidavit, Mohamud then told the undercover FBI operatives that he had identified a potential target for a bomb: the annual Christmas tree lighting ceremony in Portland’s Pioneer Courthouse Square on Nov. 26, 2010.
According to the affidavit, the undercover FBI operatives cautioned Mohamud several times about the seriousness of this plan, noting there would be many people at the event, including many children, and emphasized that Mohamud could abandon his attack plans at any time with no shame. “You know there’s gonna be a lot of children there?” an undercover FBI operative asked Mohamud. According to the affidavit, Mohamud responded that he was looking for a “huge mass that will . . . be attacked in their own element with their families celebrating the holidays.” Further discussing the attack, Mohamud allegedly stated, “…it’s in Oregon; and Oregon like you know, nobody ever thinks about it.”
The affidavit alleges that in subsequent months, Mohamud continued to express his interest in carrying out the attack and worked on logistics. He allegedly identified a location to place the bomb and mailed bomb components to the undercover FBI operatives, who he believed were assembling the device. He also mailed them passport photos, as part of a plan to help him sneak out of the country after the attack. In addition, Mohamud provided the undercover FBI operatives with a thumb drive that contained detailed directions to the bomb location and operational instructions for the attack.
According to the affidavit, on November 4, 2010, Mohamud and the undercover FBI operatives traveled to a remote location in Lincoln County, Ore., where they detonated a bomb concealed in a backpack as a trial run for the upcoming attack. Afterwards, on the drive back to Corvallis, undercover FBI operatives questioned Mohamud as to whether he was capable of looking at the bodies of those who would be killed in the upcoming attack in Portland. According to the affidavit, Mohamud responded, “I want whoever is attending that event to leave, to leave either dead or injured.”
Upon returning to Corvallis that same day, the affidavit alleges that Mohamud recorded a video of himself with the undercover FBI operatives in which he read a written statement that offered a rationale for his bomb attack. On Nov. 18, 2010, undercover FBI operatives picked up Mohamud to travel to Portland in order to finalize the details of the attack.
Earlier this evening, Mohamud was arrested after he attempted to remotely detonate what he believed to be explosives in a van that was parked near the Christmas tree lighting ceremony in Portland, the affidavit alleges.
This case was investigated by the FBI, with assistance from the Oregon State Police, the Corvallis Police Department, the Lincoln County Sheriff’s Office and the Portland Police Bureau. The prosecution is being handled by Assistant U.S. Attorneys Ethan D. Knight and Jeffrey Sweet from the U.S. Attorney’s Office for the District of Oregon. Trial Attorneys Jolie F. Zimmerman and David Cora, from the Counterterrorism Section of the Justice Department’s National Security Division, are assisting.
The charges and allegations contained in the criminal complaint are merely allegations, and the defendant is presumed innocent unless and until proven guilty.
Bureau of Prisons Implements Key Provision of Tribal Law and Order Act with Pilot Program to Incarcerate Tribal Prisoners in Federal PrisonsRead the Press Release
WASHINGTON – The Department of Justice Federal Bureau of Prisons today implemented a key provision of the Tribal Law and Order Act of 2010 by launching a four-year pilot program to begin accepting certain tribal offenders sentenced in tribal courts for placement in Bureau of Prisons institutions.
The pilot program allows any federally recognized tribe to request that the bureau incarcerate a tribe member convicted of a violent crime under the terms of Section 234 of the Tribal Law and Order Act and authorizes the bureau to house up to 100 tribal offenders at a time, nation-wide. By statute, the pilot will conclude on Nov. 26, 2014.
"The launch of the Bureau of Prisons pilot program is an important step forward in addressing violent offenders and under-resourced correctional facilities in Indian country," said Associate Attorney General Tom Perrelli. "This is one step among many to bolster the safety and security in tribal communities. Under the landmark Tribal Law and Order Act of 2010, the Justice Department will continue to work with our tribal partners on a multilateral approach that includes better law enforcement training, enhanced treatment and prevention programs, and improved tribal crime data gathering and information sharing." In anticipation of the Tribal Law and Order Act , Attorney General Eric Holder in January 2010 directed all U.S. Attorneys’ Offices with districts containing Indian country (44 out of 93) to: meet and consult with tribes in their district annually; develop an operational plan addressing public safety in Indian country; work closely with tribal law enforcement on improving public safety in tribal communities, and to pay particular attention to violence against women in Indian country and make prosecuting these crimes a priority. The Justice Department routinely briefs Congress, and state, local and tribal governments on the progress of the Tribal Law and Order Act implementation.
A fundamental goal of the Bureau of Prisons is to reduce future criminal activity by encouraging inmates to participate in a range of programs that have been proven to help them adopt a crime-free lifestyle upon their return to the community. Accordingly, the bureau provides many self-improvement programs, including work in prison industries and other institution jobs, vocational training, education, substance abuse treatment, parenting, anger management, counseling, religious observance opportunities and other programs that teach essential life skills.
Additional information and referral materials on the bureau’s pilot program may be found at: www.bop.gov/inmate_programs/tloa.jsp . To review the Tribal Law and Order Act, visit: http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=111_cong_public_laws&docid=f:publ211.111.pdf.
U.S. Court Approves Agreement Between Saginaw Chippewa Indian Tribe, United States, State of Michigan, Isabella County and City of Mt. Pleasant to Settle JurisdictionRead the Press Release
WASHINGTON – On Nov. 23, 2010, Judge Thomas L. Ludington, of the U.S. District Court for the Eastern District of Michigan, approved a settlement of Saginaw Chippewa Indian Tribe of Michigan and United States v. Granholm, et al. The settlement declares the entire Isabella Reservation to be Indian Country, resolving longstanding disputes over the boundaries and existence of the Isabella Reservation in south central Michigan.
The settlement also encompasses various intergovernmental memoranda of agreement regarding the Indian Child Welfare Act, taxation, regulation, land use, revenue sharing and law enforcement jurisdiction that seek to resolve the manner in which the tribe, state, city of Mt. Pleasant and Isabella County operate on a day-to-day basis.
"This historic settlement brings resolution and clarity to the jurisdictional boundaries of the Saginaw Chippewa Reservation and serves the interests of the people of the state of Michigan, the county of Isabella, the city of Mt. Pleasant, the Saginaw Chippewa Indian Tribe and the United States," said Ignacia S. Moreno, Assistant Attorney General of the Environment and Natural Resources Division of the Department of Justice. "This will resolve a complex patchwork of jurisdiction, and pave the way for greater coordination and communication that will strengthen public safety for all."
The Department of Justice seeks to facilitate cooperative government-to-government agreements, such as this one, between tribes, states and local governments in order to resolve jurisdictional disputes while avoiding protracted litigation.