District Not Recorded

WASHINGTON – A Bedford, Va., man was sentenced today to 96 months in prison and lifetime supervised release for transporting, receiving and possessing child pornography, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division and U.S. Attorney Timothy J. Heaphy of the Western District of Virginia.

John Michael Carter, 42, pleaded guilty on Aug. 5, 2010, in U.S. District Court in the Western District of Virginia to one count of transportation of child pornography, one count of receipt of child pornography and one count of possession of child pornography.

At the plea hearing, Carter admitted that he was a member of two online bulletin boards dedicated to the trading of child pornography. After he was identified by law enforcement authorities, Carter admitted to viewing child pornography on his computer, including still pictures and movies that featured young girls having sex with adult males. Forensic examination of Carter’s computer revealed the presence of files containing images of child pornography and search terms associated with child pornography websites.

Carter was identified through "Operation Joint Hammer," the U.S. component of an ongoing global enforcement operation targeting transnational rings of child pornographers. The operation has led to the arrest of more than 60 people in the United States involved in the trade of child pornography. Operation Joint Hammer was initiated through evidence developed by European law enforcement and shared with U.S. counterparts by Europol and Interpol. The European portion of this global enforcement effort, "Operation Koala," was launched after the discovery of the activities of several people in Europe who were abusing children and producing photographs of the abuse for commercial gain. Further investigation unveiled a number of online child pornography rings.

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

This case is being prosecuted by Trial Attorney Anitha S. Ibrahim of CEOS and Assistant U.S. Attorney Nancy Healey of the Western District of Virginia. The investigation is being handled by the U.S. Postal Inspection Service.

WASHINGTON – Two former humanitarian aid workers were convicted today for defrauding the U.S. Agency for International Development (USAID) of $1.9 million, announced Assistant Attorney General of the Criminal Division Lanny A. Breuer and U.S. Attorney Ronald C. Machen Jr. of the District of Columbia. 

Morris B. Fahnbulleh, 40, and Joe O. Bondo, 39, both of Monrovia, Liberia, were each convicted on one count of conspiracy to defraud the United States, four counts of mail fraud, two counts of wire fraud and four false claims counts. Fahnbulleh was also convicted of one count of conspiracy to commit mail and wire fraud. Bondo was also convicted of two counts of witness tampering. Fahnbulleh and Bondo have been in custody since their arrests in 2009. U.S. District Court Judge Reggie B. Walton scheduled sentencing for Feb. 3, 2011. At sentencing, the defendants face up to 20 years in prison.

“Rather than help their fellow citizens in need, these defendants sold food intended as aid and pocketed the proceeds,” said Assistant Attorney General Breuer.  “But their criminal scheme was uncovered, due in large part to the cooperation provided by World Vision, and today they have been held accountable.  Fraud involving taxpayer funds, whether in the United States or abroad, will not go unpunished.”

“Corruption is a disease and this case has ramifications far beyond its dollar amount,” U.S. Attorney Machen said.  “The work of the U.S. Attorney’s Office, the Department of Justice and USAID’s Office of Inspector General demonstrates the United States’ commitment to ensure that humanitarian aid worldwide is delivered to its intended recipients. Crimes like these leave behind thousands of victims and a legacy of cynicism and distrust. Today, hopefully we have redeemed some of that trust and sent a message that if you engage in this sort of corruption, you will be held accountable.”

 

After Liberia’s 14-year civil war, USAID awarded a grant in 2005, through Catholic Relief Services, to World Vision, an international non-profit Christian humanitarian foundation. The grant was a two-year humanitarian project in Liberia for community reconstruction projects. Under the agreement, Fahnbulleh and Bondo were assigned to supervise World Vision employees as they assisted Liberian communities with infrastructure projects, including road, latrine and water well construction. In return for their labor, USAID, through World Vision, was supposed to then distribute food to the residents of these communities.

 

However, in 2008, an internal audit conducted by World Vision revealed that up to 91 percent of the food never reached its intended beneficiaries. According to the trial evidence, the defendants sold the food and pocketed the proceeds; they then instructed World Vision employees to falsify the documents used to track food distributions. The defendants also directed USAID-salaried employees to perform work on their personal compounds and further concealed these activities from World Vision headquarters, Catholic Relief Services and USAID by intimidating the World Vision employees with threats of job loss and by paying some subordinates “hush money” to cement their silence and cooperation.

 

“USAID entrusted World Vision to carry out this important humanitarian assistance and unfortunately some of its employees violated that trust,” said Howard “Ike” Hendershot, USAID Assistant Inspector General for Investigations. “The convictions are an outstanding accomplishment for our office and an example of the positive relationship that we have with the Department of Justice.”

The case was prosecuted by Assistant U.S. Attorney John Borchert of the District of Columbia and Trial Attorney Liam Brennan of the Criminal Division’s Fraud Section. The Criminal Division’s Office of International Affairs assisted in the case. The investigation was conducted by USAID Office of the Inspector General. World Vision also provided assistance.

WASHINGTON — An Atlanta grand jury returned an indictment today against a former executive of Japan Airlines International Co. Ltd. (JAL) and two former executives of Nippon Cargo Airlines Co. Ltd. for participating in a conspiracy to fix and coordinate components of rates for air cargo shipments to and from the United States, the Department of Justice announced today.

The indictment, returned today in U.S. District Court in Atlanta, charges Takao Fukuchi, former president of JAL Cargo Sales, and Yoshio Kunugi and Naoshige Makino, both former senior executives for Nippon Cargo Airlines, with conspiring with others to suppress and eliminate competition by fixing and coordinating certain components of cargo rates charged to customers for international air shipments to and from the United States. Fukuchi and Kunugi are charged with entering into and participating in the conspiracy from at least as early as December 1999 until at least February 2006. Makino is charged with joining and participating in the conspiracy from at least as early as June 2001 until at least February 2006.

Air cargo carriers transport a variety of cargo shipments, such as heavy equipment, perishable commodities and consumer goods, on scheduled international flights.

According to the indictment, Fukuchi, Kunugi, Makino and co-conspirators participated in meetings, conversations and communications to discuss and fix certain components of cargo rates and coordinated the timing of changes to those rates. As part of the conspiracy, Fukuchi, Kunugi, Makino and co-conspirators implemented collusive cargo rates in accordance with the agreements reached, and accepted payments for shipments at collusive and noncompetitive rates.

Fukuchi, Kunugi and Makino are charged with price fixing in violation of the Sherman Act, which carries 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.

A total of 19 airlines and 17 executives, including Fukuchi, Kunugi and Makino, 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 13 executives, including Fukuchi, Kunugi and Makino.

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 Atlanta Field Office, the FBI’s field offices in Washington and Atlanta, 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 visit www.justice.gov/atr/contact/newcase.htm, or call the FBI’s Washington Field Office at 202-278-2000.

WASHINGTON - Jeffery Leon Ceaser, a resident of Montgomery, 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. The guilty plea took place in U.S. District Court in Montgomery.

According to charging documents, between March 2009 and September 2009, Ceaser conspired with others to defraud the United States by filing 158 false federal income tax returns. Ceaser fraudulently obtained names and social security numbers of individuals, and provided that information to a co-conspirator who filed the false tax returns without authorization from the individuals. The tax returns falsely claimed the first-time home buyer’s tax credit and fuel tax credits. The refunds from the false returns were deposited into bank accounts controlled by Ceaser and other co-conspirators. In total, the IRS disbursed $621,738 in false tax refunds.

No sentencing date has been scheduled. Ceaser faces a maximum of 25 years in prison.

The case was investigated by Special Agents of the IRS, Criminal Investigation. Trial Attorneys Jason Poole and Michael Boteler of the Justice Department’s Tax Division are prosecuting the case.

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

WASHINGTON -A jury in Rochester, N.Y., convicted Keith Gordon-Smith, and his Rochester-based asbestos abatement company, Gordon-Smith Contracting, Inc. (GSCI) of eight counts of knowing violations of the Clean Air Act asbestos work practice standards.  The jury also convicted Gordon-Smith and GSCI of lying to hide the violations at a demolition site in Rochester.

“Gordon-Smith knowingly exposed workers and public areas to the toxic air pollutant asbestos,” said Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division of the Department of Justice. “The verdict should send a strong message to those in the asbestos abatement industry.  We have zero tolerance for violations of the Clean Air Act asbestos work practice standards.”

After a three-week trial, the jury convicted Gordon-Smith of two counts of causing GSCI workers to violate asbestos work practice standards at the west wing of the Genesee Hospital complex located in Rochester. The west wing was scheduled to be demolished in summer 2009.  The first violations took place between January and May 2007, when Gordon-Smith ordered GSCI workers to tear out copper pipes, ceiling tiles and scrap metal from the west wing, a six-story structure that contained over 70,000 square feet of asbestos.  Gordon-Smith had a contract with the site owner that provided him with 50 percent of the salvage value of all copper pipe and scrap metal.   When the workers removed the pipes and scrap metal, they were repeatedly exposed to asbestos, described to the jurors as falling on them “like snow.”   The workers were not wearing any protective clothing and would often wear the asbestos-contaminated clothing back to their homes after work.

The jury convicted Gordon-Smith and the company of making false statements to an Occupational Safety and Health Administration (OSHA) inspector who had received complaints from GSCI workers. The OSHA inspector visited the site three times in September and October 2007, and on each occasion Gordon-Smith lied and told her that GSCI workers had not removed any copper pipes or other materials from the west wing.

The jury also convicted Gordon-Smith and his company of causing GSCI workers to illegally remove and dispose of asbestos during the actual asbestos abatement at the west wing, from May 2007 until February 2009.  Francis Rowe, a former project manager for GSCI, had been charged with one count of causing illegal asbestos removal and disposal from March 2008 until February 2009, and was acquitted of that charge.

“Exposure to asbestos can be fatal and the government will not tolerate illegal activity that puts the public at risk of cancer or other serious respiratory diseases,” said William V. Lometti, Special Agent-in-Charge for EPA Office of Criminal Enforcement in the New York region.  “The message is clear that those who endanger human health and the environment will be vigorously prosecuted.”

During the illegal removal, the asbestos was allowed to flow from upper floors through drains and holes in containment.  Large amounts of asbestos were left hidden in the west wing and were never disposed off-site at an EPA-approved site.  Gordon-Smith was fired from the site in February 2009.  A special agent from EPA Criminal Investigation Division inspected the west wing in April 2009 and shut the site down immediately.   The building was subsequently abated properly by another contractor and demolished in September 2010.

Gordon-Smith and the company were also convicted of six counts of failing to provide required notice to EPA prior to commencing asbestos abatement projects at six different sites in the Rochester area, between 2005 and June 2008.  The sites included the west wing of the Genesee Hospital Complex, Cobbles Elementary School in Penfield, Bloomfield Elementary School in East Bloomfield, the Al Sigl Center in Rochester, and the Hillside Children’s Center in Varick.  

Asbestos work practice standards under the Clean Air Act require that all asbestos be removed from any structure where it may be disturbed, such as the areas of the west wing where GSCI workers were ordered to remove pipes contaminated with asbestos.   While asbestos is removed during abatement, it must be wetted and kept adequately wet at all times and disposed of as soon as practical at an EPA-approved site. 

Gordon-Smith faces criminal penalties of up to five years imprisonment for each count and as well as criminal fines up to $250,000 per count.  GSCI faces a criminal fine of up to $500,000 per count.         

The case was prosecuted by the U.S. Attorney’s Office for the Western District of New York with the Environmental Crimes Section of the Environment and Natural Resources Division of the Department of Justice.  The case was investigated by the U.S. EPA Criminal Investigation Division and the U.S. Department of Labor Office of the Inspector General.  Criminal investigators were assisted by OSHA and the New York Department of Labor Asbestos Control Bureau. 

Any person who was, at some time, present in the west wing of the former Genesee Hospital during the time period Jan. 1, 2007, to present may have been exposed to the asbestos therein. Affected persons have the right to attend any public court proceedings. For more information, please refer to the website of the U.S. Attorney's Office at www.usdoj.gov/usao/nyw or call 1-800-799-6033.

WASHINGTON – The Justice Department today made available online the 2010 ADA Standards for Accessible Design (2010 Standards or Standards). These standards were adopted as part of the revised regulations for Title II and Title III of the Americans with Disabilities Act of 1990 (ADA). The standards can be found at www.ada.gov/2010ADAstandards_index.htm.

 

When the standards go into effect on March 15, 2012, they will set minimum requirements – both scoping and technical – for new construction and alterations of the facilities of more than 80,000 state and local governments and over seven million businesses. Until the 2012 compliance date, entities have the option to use the revised standards to plan current and future projects so that their buildings and facilities are accessible to more than 54 million Americans with disabilities.

 

“To protect the right of people with disabilities to participate in everyday life with family, friends, and colleagues, we must ensure access to buildings and facilities,” said Thomas E. Perez, Assistant Attorney General of the Civil Rights Division. “This online version of the 2010 ADA Standards for Accessible Design will enable architects, contractors, local government service providers, small business owners, disability rights advocates, and others to find in one place the information they need to provide that accessibility. Whether they search the standards on laptops, desktops or smart phones, in offices, in the field or at home, they can find answers to their questions quickly and efficiently.”

 

On July 26, 2010, the 20th anniversary of the ADA, President Obama announced newly revised ADA regulations. The final regulations were published in the Federal Register on Sept. 15, 2010. The 2010 Standards, which were adopted as part of the revised regulations, consist of regulatory text and the 2004 ADA Accessibility Guidelines, originally published in the Federal Register as 36 CFR part 1191, appendices B and D. To make it easier for readers to find the necessary requirements for their projects, the department assembled this online version that brings together the information in one easy-to-access location and enables viewers to search the text efficiently with their Internet browsers.

 

In addition to the official version of the 2010 Standards, the department has also posted on the website important guidance about the standards that is compiled from material in the Title II and Title III regulations. This guidance provides detailed information about the department’s adoption of the 2010 Standards, including changes to the standards, the reasoning behind those changes, and response to public comments received on these topics.

 

Title II of the ADA applies to state and local government entities and protects qualified individuals with disabilities from discrimination on the basis of disability in services, programs, and activities provided by state and local government entities.

 

Title III prohibits discrimination on the basis of disability in the activities of places of public accommodation (businesses that are generally open to the public and that fall into one of twelve categories listed in the ADA, such as restaurants, movie theaters, schools, day care facilities, recreational facilities and doctors’ offices) and requires newly constructed or altered places of public accommodation—as well as commercial facilities (privately owned, nonresidential facilities like factories, warehouses or office buildings)—to comply with the ADA Standards.

 

People interested in finding out more about the ADA or the 2010 ADA Standards for Accessible Design can call the toll-free ADA Information Line at 800-514-0301 (Voice) or 800-514-0383 (TTY), or access the ADA website at www.ada.gov.

 

WASHINGTON - Rico Rodrigus Williams, 33, a former Air Force senior airman, was convicted today of second degree murder and witness tampering charges in connection with the death of Army Sergeant Juwan Johnson in Hohenecken, Germany, in 2005, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division, U.S. Attorney Ronald C. Machen Jr. of the District of Columbia and Brigadier General Kevin J. Jacobsen, Commander of the Air Force Office of Special Investigations.

 

Following a 16-day trial in U.S. District Court for the District of Columbia, a jury convicted Williams of one count of second degree murder and one count of witness tampering.  Williams was acquitted of a second count of witness tampering.  U.S. District Judge Paul L. Friedman has not yet scheduled a sentencing date. The defendant faces up to life in prison.

 

According to the government’s evidence, Williams was the leader of a gang, the Gangster Disciples sect, in Ramstein, Germany. On July 3, 2005, Williams and others gathered in the small town of Hohenecken near the Ramstein Air Base, and killed 25-year-old Johnson in a gang initiation ceremony.

 

Evidence presented at trial showed that the defendant and others struck Johnson with their fists and kicked him. Johnson died the following day from blunt force trauma injuries, including hemorrhaging to the brain and heart.

 

According to evidence presented at trial, Williams later attempted to intimidate and made threats to another witness with the intent to hinder communication to law enforcement regarding Johnson’s death.

 

Williams is the sixth person to be convicted of charges in the investigation into Johnson’s death. Airman Nicholas Sims, Army Private Terrance Norman and Army Sergeant Rodney Howell were convicted in military court proceedings of involuntary manslaughter. Airman Jerome Jones was convicted in military court proceedings of conspiracy to commit assault, obstruction of justice, gang participation and other charges. Army Specialist Bobby Morissette was convicted in military court proceedings of gang participation and other charges.

 

“Today, a federal jury has held Rico Williams accountable for his role in the senseless and tragic death of Army Sergeant Johnson,” said Assistant Attorney General Breuer.  “Gang-related violence shatters the lives of far too many Americans, including those abroad.  The Justice Department is committed to ensuring that criminals who participate in such heinous acts are punished for their crimes.”

 

“Rico Williams led the Gangster Disciples in a savage gang-initiation ritual that led to the beating death of Army Sergeant Johnson,” U.S. Attorney Machen stated. “These guilty verdicts make him the sixth person to be convicted in connection with his brutal beating death.  We hope this conviction brings some measure of justice for Sergeant Johnson and his family.”

 

The case was prosecuted by Trial Attorney Christine Duey of the Criminal Division’s Human Rights and Special Prosecutions Section and Assistant U.S. Attorney Debra Long-Doyle of the District of Columbia. The case was investigated by the Air Force Office of Special Investigations and the Chesapeake Police Department.

 

 

WASHINGTON – Today a federal jury in Washington convicted Kevin A. Ring, a former lobbyist who worked with Jack A. Abramoff, on five counts related to a scheme to corrupt public officials by providing a stream of things of value, the Department of Justice announced.

 

The jury found Ring guilty on one count of conspiring to corrupt congressional and executive branch officials by providing things of value to them and their staff in order to induce or reward those who took official actions benefitting Ring and his clients. In addition, Ring was convicted of one count of paying a gratuity to a public official and three counts of honest services wire fraud for engaging in a scheme to deprive U.S. citizens of their right to the honest services of certain public officials. The jury acquitted Ring on three counts of honest services fraud. A previous federal jury failed to reach a verdict in the case and the court declared a mistrial.

 

“Through the talent and hard work of prosecutors from the Criminal Division’s Public Integrity and Fraud Sections, another member of ‘Team Abramoff’ has been held accountable for his actions.  For years, this team of lobbyists schemed to corrupt public officials, and, because of their actions, Americans were denied the honest services of public servants,” said Mythili Raman, Principal Deputy Assistant Attorney General for the Criminal Division.  “Through the continued vigilance of our prosecutors and our law enforcement partners, we are committed to bringing to justice those who seek to corrupt our democratic process.” 

 

“The public trusts that government processes will be untainted by those who would seek to corrupt them,” said John G. Perren, Acting Assistant Director of the FBI’s Washington Field Office. “The FBI will vigorously investigate those who seek to disregard the laws that our country was built on and illegally influence those in office.”

“The Office of the Inspector General is committed to holding accountable those who engage in illegal conduct as part of schemes to corrupt public officials,” said Glenn A. Fine, Inspector General for the Department of Justice.

According to evidence presented at trial, as a lobbyist working in Washington, Ring solicited and obtained business throughout the United States, including with Native American tribal governments operating and interested in operating gambling casinos. Trial testimony established that Ring sought to further his clients’ interests by lobbying public officials in the legislative and executive branches of the federal government.

 

Ring and his co-conspirators identified public officials who would perform official actions that would assist Ring and his clients, and then groomed those public officials by providing things of value with the intent of making those public officials more receptive to requests on behalf of their clients in the future. Evidence presented at trial showed that Ring and his co-conspirators provided things of value as a means of influencing, inducing and rewarding official actions, and in exchange for official actions. These things of value included all-expenses-paid travel, meals, drinks, golf outings, tickets to professional sporting events, concerts and other events, and an employment opportunity for the wife of a congressman. According to evidence introduced at trial, these things of value were often billed to Ring’s and Abramoff’s clients. Evidence established that Ring and his co-conspirators engaged in this illegal conduct with current and former congressional staff members, including chiefs of staff, as well as officials at the Department of Justice and the White House.

 

Evidence at trial demonstrated the nature of Ring’s lobbying efforts and his attempts to corrupt and reward public officials. In one e-mail message, Ring instructed his co-conspirators to “thank your friends on the Hill and in the Administration. In fact, thank them over and over again this week – preferably for long periods of time and at expensive establishments.” On another occasion, Ring described to a co-conspirator lobbyist what he expected of a public official who had attended a sporting event: “Glad he got a chance to relax. Now he can pay us back.” Similarly, Ring e-mailed a co-conspirator public official and stated: “You are going to eat free off our clients. Need to get us some [appropriations] money.” Testimony at trial from Ring’s co-conspirators described Ring joking about things of value he used to corrupt public officials by saying, “Hello quid, where’s the pro quo.”

 

Evidence presented at trial demonstrated that Ring corruptly sought assistance from public officials on numerous client projects, such as appropriations and authorizations, congressional letters to executive branch entities, as well as meetings and other legislative and official actions. Evidence at trial showed that Ring’s corrupt actions resulted in his clients receiving, among other actions, $14 million in congressional transportation appropriations and an additional $7 million from the Department of Justice to build a jail.

  

Ring faces a maximum sentence of five years in prison for conspiracy, two years in prison for payment of a gratuity and 20 years in prison for each of the three counts of honest services wire fraud. Ring could also be ordered to pay a fine of up to $250,000 on each count of conviction. U.S. District Judge Ellen S. Huvelle scheduled sentencing for Mar. 1, 2011, at 2 p.m.

 

Ring remains charged with an additional two counts of obstructing justice. Those charges stem from alleged efforts by Ring to thwart a grand jury and congressional investigation by preventing the reporting of his criminal conduct to federal authorities. The court severed those two counts and Ring is scheduled to stand trial at a later date. Ring is presumed innocent of these charges until proven guilty in a court of law.

 

To date, 20 individuals, including lobbyists and public officials, have pleaded guilty, been convicted at trial, or are awaiting trial in connection with the ongoing investigation into the activities of Abramoff and his associates. Abramoff pleaded guilty in January 2006 to conspiracy to commit honest services fraud, honest services fraud and tax evasion. He was sentenced in September 2008 to 48 months in prison.

 

The case is being prosecuted by Assistant Chief Nathaniel B. Edmonds of the Criminal Division’s Fraud Section and Trial Attorney Peter Koski of the Criminal Division’s Public Integrity Section. The investigation of this case is being conducted by the FBI’s Washington Field Office and the Department of Justice Office of the Inspector General.

 

 

WASHINGTON — The Department of Justice and the U.S. Department of Agriculture (USDA) today announced additional details for the Dec. 8, 2010, public workshop in Washington, which will examine the issue of margins at various levels of the agricultural supply chain. The workshop will be held in the Jefferson Auditorium at USDA, which is accessible through a designated entrance on Independence Avenue between 12th and 14th Streets, S.W.

 

This is the fifth in a series of five workshops intended to promote dialogue among interested parties and foster learning with respect to competition and regulatory issues in agriculture. The first workshop was held in March in Ankeny, Iowa, with a focus on row crops and hogs. Held in Normal, Ala, in May, the second workshop addressed issues in the poultry industry. The third workshop focused on issues in the dairy industry and was held in Madison, Wis., in June. The fourth workshop, held in August in Fort Collins, Colo., looked at the livestock industry.

 

The workshops, which were first announced by Attorney General Eric Holder and Agriculture Secretary Tom Vilsack on Aug. 5, 2009, are the first joint Department of Justice/USDA workshops ever to be held to discuss competition and regulatory issues in the agriculture industry.

Attendance at the workshops is free and open to the public. The general public and media interested in attending the Washington workshop on Dec. 8, 2010, should register at www.surveymonkey.com/s/marginsworkshop.

 

The workshop will begin with opening remarks from U.S. Attorney General Eric Holder, U.S. Agriculture Secretary Tom Vilsack and Assistant Attorney General for the Antitrust Division Christine Varney. The workshop will then move on to a series of panels discussing topics such as supply chain dynamics, issues in food retailing and margins in the beef, pork, poultry and dairy industries. Each panel will feature producers and industry representatives as well as academics with extensive research experience in the relevant field. Additionally, there will be two opportunities for public testimony from those attending the workshop.

 

Additional details on the schedule and panelists will be provided at a later date. For further information, including submitted public comments, transcripts and videos for past workshops, please visit the Antitrust Division’s agriculture workshop website at www.justice.gov/atr/public/workshops/ag2010/index.htm or contact [email protected].

 

WASHINGTON – The Department of Justice, the Commonwealth of Massachusetts and the state of Rhode Island announced today that Bouchard Transportation Co. Inc. and its affiliates will pay more than $6 million to settle a portion of the federal and state natural resource damages claims for the April 2003 spill of up to 98,000 gallons of oil into Buzzards Bay. The settlement announced today is in addition to damage assessment costs for federal and state governments of almost $1.6 million.

“Today’s settlement holds accountable those responsible for the spill that impacted 100 miles of New England coastline,” said Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division of the Department of Justice. “This settlement will restore shoreline and aquatic habitats vital to commercial and recreational fisheries, enhance breeding grounds for shorebirds such as the federally-threatened piping plover, and improve opportunities for public recreational use.”

The U.S. Coast Guard first reported an oil spill on April 27, 2003. At that time, the tug Evening Tide was towing the unmanned tank barge Bouchard B. 120, which was carrying No. 6 fuel oil. The barge was in route from Philadelphia to the Mirant Power Generating Facility in Sandwich, Massachusetts.

The barge grounded on a shoal soon after entering the western approach to Buzzards Bay, rupturing its hull and allowing the release of the cargo. In the days and weeks following the grounding, winds and currents drove the spilled oil ashore, affecting approximately 100 miles of shoreline in Massachusetts and Rhode Island. Cleanup of the oiled shoreline took months, including at Barney’s Joy and Hoppy’s Landing, where a heavy oil coated boulders and cobble.

Hundreds of loons, seaducks and other birds were killed as a result of the spill. The beaches, which function as breeding and forage habitats for shorebirds, such as piping plovers, were impacted by the spill. In addition, the oil spill adversely affected the public’s use of Buzzards Bay waters and the adjoining coastline, by causing the oiling and temporary closure of shellfishing beds throughout the bay and restricting boat and beach access.

Bouchard Transportation earlier reached a criminal plea agreement as a result of the spill, agreeing to a fine of $10 million. In the criminal matter, the company was charged with negligently piloting the Evening Tide resulting in the death of migratory birds in violation of the Federal Migratory Bird Act.

The natural resource trustees in this case include the National Oceanic and Atmospheric Administration, the Department of the Interior’s Fish and Wildlife Service, the Commonwealth of Massachusetts and the state of Rhode Island.

“The Bouchard oil spill in Buzzards Bay caused extensive damage to our shoreline, to wildlife in the area, and to Massachusetts businesses and citizens who rely on Buzzards Bay for their livelihoods and for recreation. This settlement, while not a substitute for prevention, will help to restore those precious resources,” said Massachusetts Attorney General Martha Coakley.

“I am pleased to join Attorney General Coakley and our federal partners in announcing this settlement, which will go a long way toward compensating the public for the environmental damage caused by the Bouchard oil spill,” said Ian Bowles, Secretary of the Massachusetts Executive Office of Energy and Environmental Affairs. “As the commonwealth’s NRD trustee, and with the public’s input, I intend to make sure that these funds are put to the highest and best use to restore the vital wildlife habitat, and important aquatic resources and recreational areas of Buzzards Bay.”

“The state of Rhode Island is pleased that restoration work for the natural resources impacted by the 2003 oil spill into Buzzards Bay can now begin,” said Rhode Island Department of Environmental Management Director W. Michael Sullivan.

The settlement will, once approved by the court, compensate the public for injuries to shoreline and aquatic resources, piping plovers and coastal recreational uses, such as beach access, shellfishing and boating that depend on the natural resources affected by the spill. The current settlement does not address injuries to terns, loons and other birds. The trustees continue to discuss these injuries with the responsible parties and also to pursue the recovery of additional damage assessment costs.

The federal and state trustees may use portions of the settlement funds, after public input, to restore salt marsh and river herring runs. In addition, the trustees may use some of the settlement funds to fund a potential project to stabilize a portion of shoreline of Ram Island, which is a state-owned wildlife sanctuary in Massachusetts and serves as critical nesting and fledgling habitat for roseate terns, a federally listed endangered species. The 2003 oil spill caused significant injury to the salt marsh on Ram Island.

“NOAA looks forward to continuing to fully participate with our co-trustees and the public to identify and implement successful restoration projects benefiting fishery resources and their habitats, as well as other restoration activities along the Massachusetts and Rhode Island coast,” said David Kennedy, Acting Assistant Administrator of NOAA’s National Ocean Service.

U.S. Fish and Wildlife Service Northeast Regional Director Marvin Moriarty added, “We are pleased that a settlement has been reached. These funds will help increase summer breeding success for piping plovers and other shorebirds.”

The proposed consent decree outlining the settlement was lodged in court today and is available at www.justice.gov/enrd/Consent_Decrees.html. It is subject to a 30-day public comment period and final court approval.

 

WASHINGTON - A federal grand jury indicted three men in Albuquerque, N.M., on federal hate crime charges related to a racially-motivated assault of a 22-year-old man of Navajo descent who has a significant cognitive impairment.

Paul Beebe, 27, William Hatch, 29, and Jesse Sanford, 25, all of Farmington, N.M., have been charged with one count of conspiracy and one count of violating the Matthew Shepard and James Byrd Jr. Hate Crimes Prevention Act that was enacted in October 2009. More specifically, the indictment alleges that the defendants branded the victim by heating a wire hanger on a stove and burning the victim’s flesh, causing a permanent swastika-shaped scar on his arm. It is alleged that as part of the plan and purpose of their conspiracy, the defendants further defaced the victim’s body with white supremacist and anti-Native American symbols, including shaving a swastika in the back of the victim’s head and using marker to write the words "KKK" and "White Power" within the lines of the swastika. The indictment also alleges that the defendants took advantage of the victim’s developmental disability to induce him to make a cell phone video in which he purportedly consents to the branding.

This case is being investigated by the FBI’s Albuquerque Division in cooperation with the Farmington Police Department and the San Juan County District Attorney’s Office. It is being prosecuted by Assistant U.S. Attorney Roberto D. Ortega for the District of New Mexico and Special Litigation Counsel Gerard Hogan and Trial Attorney Fara Gold of the Department of Justice’s Civil Rights Division.

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

WASHINGTON – David C. Kernell, 23, today was sentenced to one year and one day in prison for intentionally accessing without authorization the e-mail account of former Alaska governor Sarah Palin and obstruction of justice, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division and U.S. Attorney William C. Killian for the Eastern District of Tennessee. U.S. District Judge Thomas W. Phillips also imposed a three-year term of supervised released. In imposing the prison sentence, Judge Phillips recommended service at Midway Sanction Center, but noted that the Bureau of Prisons would decide where Kernell would serve his sentence.

On April 30, 2010, after a week-long trial, a jury found Kernell guilty of one count of misdemeanor unauthorized access to obtain information from a computer and one count of obstruction of justice. The jury found Kernell not guilty of wire fraud. The jury could not reach a verdict on the identity theft charge and the judge declared a mistrial as to that charge.

According to evidence presented at trial, on Sept. 16, 2008, Kernell, a resident of Knoxville, Tenn., obtained unauthorized access to former Gov. Palin’s personal e-mail account by resetting the account password. Evidence showed that after answering a series of security questions that allowed him to reset the password and gain access to the e-mail account, Kernell read the contents of the account and made screenshots of the e-mail directory, e-mail content and other personal information. Kernell posted screenshots of the e-mails and other personal information to a public website. Kernell also posted the new e-mail account password that he had created, thus providing access to the account by others.

Evidence at trial showed that Kernell became aware on Sept. 16, 2008, after the illegal entry into the email account, of a possible FBI investigation. Evidence showed that Kernell began a series of deletions of records and documents with the intent to impede an anticipated FBI investigation.

The case was prosecuted by Assistant U.S. Attorney Mark Krotoski currently detailed to the Criminal Division’s Computer Crime and Intellectual Property Section (CCIPS) and Assistant U.S. Attorney Greg Weddle of the U.S. Attorney’s Office for the Eastern District of Tennessee. CCIPS Trial Attorney Josh Goldfoot provided significant assistance. The case was investigated by the FBI’s Anchorage, Alaska, and Knoxville field offices.

WASHINGTON – A northern Virginia business owner was sentenced today in federal court in Alexandria, Va., for failing to collect, account for and pay over to the Internal Revenue Service (IRS) more than $200,000 in withholdings from employees’ paychecks, the Justice Department and IRS announced today. U.S. District Court Judge Ellis sentenced Eric Jon Eisenhower, a resident of Fairfax Station, Va., to 19 months in prison and ordered him to pay $88,826.79 in restitution to the IRS.

According to court documents, Eisenhower was the president of CoManage Inc., a computer software development company. From December 2004 through June 2008, Eisenhower failed to pay over to the IRS CoManage’s employees’ withholdings for Social Security, Medicare and federal income taxes.

Acting Assistant Attorney General John A. DiCicco of the Justice Department’s Tax Division and Neil H. MacBride, U.S. Attorney for the Eastern District of Virginia, commended the investigative efforts of the IRS agent involved in this case, as well as Assistant U.S. Attorney Mark Lytle and Tax Division Trial Attorney Caryn Finley, who prosecuted the case.

WASHINGTON – The United States has filed a lawsuit seeking to stop Aurelia Sanderson Johnson of Montgomery, Ala., from preparing tax returns for others, the Justice Department announced today. In the civil injunction suit, filed in U.S. District Court for the Middle District of Alabama, the United States alleges that Johnson, operating under the trade names "Johnson Tax Service" and "On-Time Tax Service" employed at least two schemes on returns she prepared for customers in order to obtain false or overstated refunds.

According to the complaint, Johnson has prepared at least 1,000 returns since 2006. Johnson allegedly prepared returns reporting fictitious information to inflate or generate false earned income tax credits. In addition, Johnson has allegedly prepared returns with fabricated business expense deductions on her customers’ returns leading to underreported income and bogus refunds.

The Internal Revenue Service has listed tax return preparer fraud as one of its "Dirty Dozen" tax scams for 2010. The Department of Justice has obtained injunctions against hundreds of tax-return preparers and tax-fraud promoters in the past 10 years. Information about these cases is available on the Justice Department website.

WASHINGTON – The Department of Justice announced today that it has reached a settlement agreement with Essex County, N.J., that, will resolve the department’s lawsuit against Essex County for refusing to permit a corrections officer to wear a religiously-mandated headscarf.

The lawsuit, if approved by the U.S. District Court for the District of New Jersey, alleges employment discrimination on the basis of religion in violation of Title VII of the Civil Rights Act of 1964, as amended.

The department’s complaint alleges that Essex County refused to permit Yvette Beshier to wear a khimar (religiously-mandated headscarf) while working as a corrections officer. According to the complaint, the Essex County Department of Corrections first suspended Beshier and then terminated her on the ground that her wearing a khimar violated its uniform policy for corrections officers. The complaint alleges that Beshier had requested a religious accommodation that would permit her to wear her khimar, but Essex County denied her request.

Title VII prohibits discrimination in employment on the basis of race, color, sex, national origin and religion. The act’s religious discrimination provisions require employers to make reasonable accommodation for applicants’ and employees’ religious observances, practices and beliefs.

The settlement agreement obtained by the department requires Essex County to pay Beshier a monetary award of $25,000. Under the terms of the settlement agreement, Essex County has adopted a religious accommodation policy and procedure and will provide employees with training regarding religious discrimination and accommodation.

"An individual should not have to choose between keeping a job and practicing their faith when accommodations can be reasonably made," said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. "We are pleased that Essex County has agreed to give fair consideration to its employees’ requests for reasonable accommodations."

"We are proud to partner with the Department of Justice in ensuring that the workplace is free of religious discrimination," said Jacqueline A. Berrien, Chair of the U.S. Equal Employment Opportunity Commission (EEOC), which enforces Title VII. "As our country becomes more diverse, we must remain vigilant about protecting workers from bias in the workplace."

The Newark, N.J., area office of the Equal Employment Opportunity Commission investigated and attempted to resolve Beshier’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 Civil Rights Division is committed to the vigorous enforcement of Title VII. Additional information about the Civil Rights Division is available on its websites at www.justice.gov/crt/ and www.justice.gov/crt/emp/.

WASHINGTON – An Ohio accountant was sentenced to 11 years in prison by U.S. District Court Judge Michael H. Watson in Columbus, Ohio, for conspiring to commit mortgage fraud, money laundering and obstruction of justice, the Justice Department and Internal Revenue Service (IRS) announced today.

According to court testimony and documents, Dennis G. Sartain of Hilliard, Ohio, was the accountant for convicted Columbus-area home builder, Thomas Parenteau. Sartain conspired with Parenteau to commit tax-fraud and money-laundering schemes through which the pair defrauded the IRS of more than $1 million and defrauded banks into lending more than $18 million to Parenteau and his nominees. A jury convicted Parenteau for his role in these crimes in July of this year after a two-month trial.

In addition to the prison term, Judge Watson ordered Sartain to pay restitution to the IRS and the defrauded banks in an amount to be determined and to forfeit to the U.S. government $120,000.

As part of the conspiracy to defraud the United States, Parenteau and Sartain prepared and filed with the IRS four false income tax returns for Parenteau’s mistress, Pamela A. McCarty. The false returns generated more than $850,000 in refunds from the IRS and state of Ohio that all went to Parenteau.

In additiona, Parenteau and Sartain, along with McCarty and Parenteau’s wife, Marsha K. Parenteau, committed a money-laundering conspiracy through which they obtained nearly $19 million in loans against a 27,000-square-foot home, by falsely representing income and submitting other false documents. They used the money to make more than $6 million in premium payments at $85,000 a month on four life insurance policies on the life of Thomas Parenteau’s father, who passed away on April 4, 2009. The government has moved for the forfeiture of the life insurance premiums and death benefits.

Finally, after learning of the IRS investigation into the tax, bank fraud and money laundering schemes, Thomas Parenteau, McCarty and Sartain engaged in a scheme to obstruct justice by concealing computers, creating false documents, destroying or altering evidence, tampering with a witness, and lying to federal and local investigators. Marsha K. Parenteau, and Pamela A. McCarty are scheduled to be sentenced for their respective roles in these schemes on Jan. 5, 2011. The sentencing for Thomas Parenteau is not yet scheduled.

John A. DiCicco, Acting Assistant Attorney General for the Justice Department’s Tax Division, commended the IRS Criminal Investigation special agents who investigated the case, as well as Tax Division trial attorneys Richard Rolwing and Sean O’Connell, who prosecuted the case.

WASHINGTON – CFP Group, located in McLean, Va., and its president, Roberto Clark, have agreed to pay the United States $150,000 to settle claims that they used false statements to obtain a contract from the Department of Veterans Affairs, the Justice Department announced today. The United States alleged that CFP Group and Clark made false statements to the Small Business Administration (SBA) to obtain certification as a Historically Underutilized Business Zone (HUBZone) company, and then used this certification to wrongfully obtain a Veterans Affairs contract for fire alarm installation.

Under the HUBZone program, companies that maintain their principal office in a designated HUBZone, and meet certain other requirements, can apply to the SBA for certification as a HUBZone small business company. HUBZone companies can then use this certification when bidding on government contracts. In certain cases, government agencies will restrict competition for a contract to HUBZone-certified companies.

The United States alleged that Roberto Clark submitted an application on behalf of CFP Group to the SBA to have it certified as a HUBZone company. On the application, Clark represented that CFP Group’s principal office was located in a designated HUBZone in Maryland. In fact, the United States alleged, no company employees worked at that location and Clark’s office was actually in Vienna, Va., which is not a designated HUBZone location. Based on the false application, the SBA certified CFP Group as a HUBZone small business company. CFP Group then used this certification to obtain a fire alarms systems contract from the Department of Veterans Affairs, which had been set aside for a qualified HUBZone company. The company is no longer participating in the HUBZone program and has relocated to McLean, Va.

"The HUBZone program is intended to benefit companies that create jobs in areas of high unemployment," said Tony West, Assistant Attorney General for the Civil Division of the Department of Justice. "Participants in this program must act honestly and deal fairly and we will take action against those who don’t play by the rules."

"This case is one of a series that the Government has pursued for false claims made to obtain HUBZone and other set-aside contracts. The SBA Office of Inspector General will continue to aggressively pursue and seek criminal or civil fraud prosecution of false statements made to obtain preferential contracting and other government benefits," said SBA Inspector General Peggy E. Gustafson.

"This case represents the cooperative effort of SBA’s Offices of the General Counsel and the Inspector General and the Department of Justice to uncover and remedy fraud in our procurement programs. Uncovering and pursuing fraud cases is one of SBA’s highest priorities," said SBA General Counsel Sara Lipscomb.

Assistant Attorney General West thanked the Justice Department’s Civil Division, the SBA Office of General Counsel, the SBA Office of Inspector General, and the Department of Veterans Affairs Office of Inspector General for the collaboration that resulted in the settlement announced today.

WASHINGTON – The United States has settled two whistleblower lawsuits for $16.25 million alleging that Hewlett-Packard Co. (HP) violated the competitive bidding rules of the Federal Communications Commission’s (FCC) E-Rate Program at the Dallas and Houston Independent School Districts in connection with technology services contracts with those school districts. At the same time, the United States announced that it was intervening in those same lawsuits against HP’s former business partners, Micro Systems Engineering (MSE) and Analytical Computer Services (ACS), as well as against several individuals.

 

The E-Rate program, created by Congress in the Telecommunications Act of 1996, provides funding for needy schools and libraries to connect to and utilize the Internet. The E-Rate program is funded by monies collected from telephone users. The FCC oversees the E-Rate program.

 

The two lawsuits were filed under the False Claims Act’s whistleblower provisions, which permit private parties to sue for false claims on behalf of the United States and share in any recovery. The first lawsuit was filed in Dallas by Dan Cain and Pamela Tingley. The United States is intervening in that lawsuit against MSE; Ruben Bohuchot, the former chief technology officer of the Dallas Independent School District; and Frankie Wong, the former chief executive officer of MSE. The second lawsuit was filed in Houston by Dave Richardson and Dave Gillis. The United States is intervening in the second lawsuit against ACS.

 

Both lawsuits allege that the defendants provided illegal gratuities and inducements to school officials, such as the use of several yachts and tickets to sporting events, including the 2004 Super Bowl, while the companies were bidding on school district contracts funded by the E-Rate Program. From the settlement with HP announced today, relators Cain and Tingley will receive $1,424,969, while Richardson and Gillis will receive $796,280.

 

The United States has elected to intervene in both lawsuits, under the authority of the False Claims Act which allows the government to intervene in and take over any whistleblower action filed. The United States’ notices of intervention stated that the United States expects to file its own complaint in each case within 45 days.

 

“The E-Rate Program provides much-needed funding that allows underprivileged students to access the Internet,” said Tony West, Assistant Attorney General for the Civil Division of the Department of Justice. “We will continue to pursue those who use improper inducements to undermine the integrity of this important program.”

 

In July 2008, both Wong and Bohuchot were found guilty of bribery in U.S. District Court in Dallas for their conduct relating to the Dallas Independent School District and sentenced to more than 10 years in prison. In addition, the United States previously settled related claims against the Dallas Independent School District for a payment of $750,000 and against the Houston Independent School District for a payment of $850,000. Both school districts also agreed not to seek payment for pending claims.

Assistant Attorney General West acknowledged the cooperation among the many government agencies participating in this ongoing matter, including the Justice Department’s Civil Division, the U.S. Attorney’s Offices for the Northern and Southern Districts of Texas, and the FCC’s Office of the Inspector General and Office of General Counsel.

 

The cases are U.S. ex rel. Cain v. Micro Systems Enterprises et al., No. 3-05CV1843-P (N.D. Tex.) and U.S. ex rel. Richardson v. Analytical Comp. Services et. al., Civ. No. H-05-3836 (S.D. Tex.).

WASHINGTON – Brent Oncale, 36, of Houston, pleaded guilty today in U.S. District Court in Richmond, Va., to conspiracy charges in connection with his role as a principal of the A&O entities, a group of businesses that acquired and marketed over $100 million of investments in life settlements to more than 800 victims across the United States and Canada, announced U.S. Attorney Neil H. MacBride of the Eastern District of Virginia and Assistant Attorney General Lanny A. Breuer of the Criminal Division.

Oncale pleaded guilty before U.S. Magistrate Judge Dennis W. Dohnal in the Eastern District of Virginia to a two-count criminal information alleging conspiracy to commit mail fraud and conspiracy to commit money laundering involving losses to investors of more than $50 million. At sentencing, he faces a maximum penalty of five years in prison and a $250,000 fine on each count.

According to court documents, Oncale admitted to making material misrepresentations and omissions to investors about A&O. Specifically, he admitted making false statements and omissions about A&O’s safekeeping and use of investor funds and about the risks of A&O’s investment offerings. Oncale also admitted that he and his co-conspirators failed to inform A&O investors that the vast majority of investor money was used for purposes wholly unrelated to purchasing and maintaining portfolios of life settlements.

This ongoing investigation is being conducted by the U.S. Postal Inspection Service, Internal Revenue Service and FBI, with significant assistance from the Texas State Securities Board. The case is being prosecuted by Assistant U.S. Attorneys Michael S. Dry and Jessica Aber Brumberg from the Eastern District of Virginia and Trial Attorney Albert B. Stieglitz Jr., of the Criminal Division’s Fraud Section.

The investigation has been coordinated by the Virginia Financial and Securities Fraud Task Force, an unprecedented partnership between criminal investigators and civil regulators to investigate and prosecute complex financial fraud cases in the nation and in Virginia. The task force is an investigative arm of the President’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.

COLUMBUS, Ohio – Todd M. Gongwer, of Columbus, Ohio, was sentenced today to two years in prison for conspiring with convicted Columbus area home builder Thomas Parenteau to commit a mortgage fraud scheme in which the pair defrauded banks into lending more than $10 million to Gongwer, his nominees and unqualified borrowers, the Justice Department announced today. Gongwer was also sentenced for committing tax evasion by using bank accounts of others to hide the income that he earned from ReMax Affiliates from 2000 through 2005.

In addition to the prison term, U.S. District Court Judge Michael H. Watson ordered Gongwer to forfeit $250,000 and pay restitution to the Internal Revenue Service (IRS) and the financial institutions he defrauded in amounts to be determined by the court.

On May 4, 2009, Todd Gongwer pleaded guilty to a two-count information charging conspiracy to commit bank fraud and tax evasion. According to court documents and testimony, Gongwer became a licensed real estate agent in 1998. During 2005 through 2007, Gongwer and others negotiated and participated in five real estate deals in which Gongwer, a nominee or another buyer would purchase a luxury home for a falsely-inflated purchase price and receive a kick-back. In each transaction, the buyer, or Gongwer on the buyer’s behalf, would misrepresent his or her income and assets in order to obtain approximately financing for approximately 90 percent of the inflated purchase price. The parties to the transactions attempted to justify the inflated purchase prices by creating false work-change orders and addenda that created the appearance that the inflated prices represented additional, substantial work to be completed on the homes. The object of each transaction was to use the loan proceeds in excess of the actual purchase price to fund hundreds of thousands of dollars in kick-back payments to the buyers. The buyers have been unable to maintain the mortgage payments on the luxury homes and have all defaulted on the loans.

Gongwer negotiated a sixth transaction that was similar to the luxury home transactions but involved the sale of 15 condominium units in three buildings located in Columbus. The condominium transaction involved inflated purchase prices, fraudulently obtained financing and a substantial kick-back payment to the buyer. The total fraud loss caused to the lenders was more than $5 million.

During tax year 2004, Gongwer worked for ReMax Affiliates Inc. and was paid approximately $158,333.32 in gross income. Gongwer deposited that income into nominee accounts to conceal his receipt of that income from the IRS. Gongwer failed to file income tax returns for tax years 2000 through 2005. The tax loss including relevant conduct is more than $200,000.

In imposing the sentence, Judge Watson lauded Gongwer’s cooperation with the government but said that "avarice and greed were [Gongwer’s] primary and motivating factors." The judge also said that he had seen "physical assault victims who were less devastated" than Gongwer’s aunt, whose identity Gongwer stole. In considering the amount of restitution due to the defrauded banks, Judge Watson said that he was "frustrated because of the willful blindness of the lending institutions, and the cooperation and participation of appraisers and many others."

IRS Criminal Investigation investigated the case, and Trial Attorneys Richard M. Rolwing and Sean O’Connell of the Justice Departments’s Tax Division prosecuted the case.

WASHINGTON - Kevin Shaffer of Sarasota, Fla., and Washington D.C., pleaded guilty to bank fraud and tax evasion before Alexandria, Va., federal district court Judge Gerald Bruce Lee, the Justice Department and the Internal Revenue Service (IRS) announced today. Judge Lee set sentencing for Feb. 4, 2011.

According to documents filed with the court, Shaffer was the president and a co-owner of a Manassas, Va.,-based consulting business named Matrix-DSS. Shaffer admitted to committing bank fraud against BB&T Corp. In connection with a $5,650,000 construction loan for a home in McLean, Va., Shaffer signed a false loan application. Shaffer submitted to BB&T fictitious documents, including Forms W-2, pay stubs, bank statements and retirement account statements. BB&T sustained a loss of $1,815,612 as a result of this fraud. The total bank fraud loss, which includes additional frauds that Shaffer committed against other banks, is $2,688,571.93.

Shaffer also pleaded guilty to tax evasion for the 2005 tax year. According to court documents, Shaffer did not file a timely tax return for that year and did not pay the taxes he owed. During an interview with IRS agents in December 2008, however, he falsely claimed that he had electronically filed a tax return for that year and had paid his taxes by credit card. Shaffer eventually filed a 2005 tax return in January 2009, but under-reported his income. The government sustained a $211,865.86 tax loss as a result. Including relevant conduct pertaining to Shaffer’s tax evasion for tax years 2004, 2006 and 2007, the total tax loss is $536,228.77.

Finally, Shaffer admitted failing to account for and pay over to the IRS $42,320.66 in federal taxes that he withheld from the paychecks of Matrix DSS employees during the quarter that ended Dec. 31, 2007. Including relevant conduct for other quarters, the total tax loss associated with this conduct is $272,209.14.

Shaffer faces up to 40 years in prison.

Acting Assistant Attorney General John A. DiCicco of the Justice Department’s Tax Division and Neil H. MacBride, U.S. Attorney for the Eastern District of Virginia, commended the IRS and Secret Service agents who investigated the case and Assistant U.S. Attorney Charles F. Connolly and Tax Division Trial Attorney Tracy L. Gostyla, who are prosecuting the case.

WASHINGTON – A Massachusetts man pleaded guilty today in U.S. District Court in Rhode Island to tax evasion related to his 2003 income tax filings, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division, U.S. Attorney Peter F. Neronha for the District of Rhode Island and Acting Assistant Attorney General John A. DiCicco of the Tax Division.

Gerald Diodati, 61, of Seekonk, Mass., pleaded guilty today before Chief U.S. District Judge Mary M. Lisi to one count of tax evasion. According to court documents, from approximately 2003 through 2006, Diodati concealed from the Internal Revenue Service (IRS) at least $586,000 he earned through his construction business by converting the proceeds of his businesses to cash and utilizing check cashing services for the purpose of evading assessment of income tax. For each year of the scheme, false income tax returns were prepared and filed, concealing additional taxes Diodati rightfully owed. In all, from 2003 through 2006, Diodati attempted to evade the assessment of more than $194,000 in federal income taxes.

 

According to information presented during the plea hearing, the case originated from an undercover investigation initiated by the FBI’s Providence, R.I., Field Office. As part of the investigation, the FBI established an undercover company, Hemphill Construction, which sought the award of union construction contracts. Diodati began working as a consultant to Hemphill Construction in 2002, operating his own businesses out of the construction company’s office in Johnston, R.I.

 

In 2003, Hemphill Construction was awarded a subcontract after signing a collective bargaining agreement with the Rhode Island Laborers District Council on behalf of 3 local unions, to perform demolition work at the Rising Sun Mills rehabilitation project in Providence. Hemphill, in turn, subcontracted the work to Diodati through RI Demolition Inc., a company Diodati formed for this purpose. According to information presented during the plea hearing, Diodati suggested to Hemphill in late 2003 that he be paid in cash for the work that his company performed on the Rising Sun Mills project. Diodati proposed that Hemphill keep 20 percent of what he was owed and pay him the balance in cash in order to reduce his taxable income, stating that, “Uncle Sam doesn’t have to know about it, so it keeps me down in the lower bracket.” Diodati later noted that both Hemphill and RI Demolition made money on the scheme and that, “the only one who is losing is the government.”

 

According to information presented at the plea hearing, Diodati opened a safety deposit box at a local bank. He then requested that the money owed him by Hemphill be paid in cash in installments placed in the safety deposit box rather than by business checks. Between December 2003 and March 2004, Diodati received more than $230,000 in cash payments for construction work placed into his safety deposit box.

As a result of this practice as well as other means Diodati used to conceal income, RI Demolition underreported business receipts to the IRS for 2003 by $244,486. In August 2004, Diodati tried to evade the assessment of a substantial income tax by causing to be prepared, signed and filed an individual income tax return for tax year 2003 that reported zero taxable income, which meant no taxes were due, when in fact his actual tax liability was $58,503.

 

At sentencing, scheduled for Feb. 10, 2011, Diodati faces a maximum sentence of five years in prison, a $250,000 fine and three years of supervised release following his prison term. Diodati has agreed to pay restitution in the amount of $194,031.

 

The case is being prosecuted by Trial Attorney Scott Lawson of the Criminal Division’s Organized Crime and Racketeering Section and Trial Attorney Jessica Nuzzellilo of the Tax Division.  The case was investigated by the IRS – Criminal Investigation and the FBI.

WASHINGTON – The Justice Department today announced that it has reached a settlement agreement with Hoover Inc., a leading manufacturer of vacuum and carpet cleaners with facilities in Ohio and Texas, to resolve allegations that Hoover engaged in a pattern or practice of employment discrimination by imposing unnecessary and discriminatory hurdles in the I-9 process upon lawful permanent residents.

According to the department’s findings, Hoover required all permanent residents who presented a permanent resident card (green card) for I-9 purposes to produce a new green card when theirs expired. In contrast, Hoover’s U.S. citizen workers were not required to present new documents. Like U.S. citizens, permanent residents are always work authorized, regardless of the expiration of their documentation. The Immigration and Nationality Act (INA) prohibits employers from treating permanent residents differently than U.S. citizens in the I-9 process.

Under the terms of the settlement, Hoover has agreed to pay $10,200 in civil penalties. Hoover will also train its human resources personnel about employers’ nondiscrimination responsibilities in the I-9 process, and it will provide periodic reports to the department for one year.

"All permanent residents in the United States have the right to continued employment without the burden of presenting new documentation when their green cards expire," said Thomas E. Perez, Assistant Attorney General for the Justice Department’s Civil Rights Division. "We are pleased to have reached the settlement with Hoover and look forward to continuing to work with all employers, both public and private, to educate them about their responsibilities under federal law."

The Civil Rights Division’s Office of Special Counsel for Immigration-Related Unfair Employment Practices (OSC) is responsible for enforcing the anti-discrimination provision of the INA, which protects work authorized individuals against discrimination in hiring, firing and recruitment or referral for a fee on the basis of citizenship status and national origin. The INA also protects all work-authorized individuals from discrimination in the employment eligibility verification process and from retaliation.

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

WASHINGTON – The Justice Department reached a settlement agreement with the University of South Carolina to resolve an investigation into the university’s policies and procedures related to discrimination and harassment.

After receiving a report of race discrimination on campus, the department examined the university’s policies and practices related to the handling of complaints of discrimination and harassment. Federal civil rights laws require public institutions to appropriately address and respond to such complaints. To meet this federal standard, the university agreed to improve its policies and practices for receiving, investigating and resolving complaints of discrimination and harassment. The settlement agreement will ensure that students, faculty and administrators understand and are trained on their responsibilities under the university’s policies, including when and how to report incidents of harassment or discrimination, and will require the university to respond to such complaints in a timely and effective manner. In order to ensure ongoing compliance with its revised policies, the university also will train select administrators, faculty and students to lead future trainings on campus. The settlement provides that the university will adopt revised anti-discrimination and harassment policies before the start of the 2011-12 school year and will initiate training during the spring 2012 semester.

"Public institutions of higher education must ensure that their students are not denied equal access to educational opportunities," said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. "Public institutions must adopt policies and procedures that allow them to identify and respond to allegations of discrimination and harassment in a reasonable, timely and effective manner. I applaud the University of South Carolina for entering into an agreement that will communicate to students, faculty, administrators, and the public at large, that discrimination and harassment will not be tolerated on its campus."

The enforcement of Title IV is a top priority of the Justice Department’s Civil Rights Division. Additional information about the Civil Rights Division of the Justice Department is available on its website at www.justice.gov/crt .

WASHINGTON – The Justice Department announced today that it has sued the owners and managers of Park Towers Apartments, a federally-subsidized apartment complex in Waterloo, Iowa, alleging a pattern or practice of sexual harassment in violation of the Fair Housing Act.

The suit, filed on Nov. 10, 2010, in the U.S. District Court for the Northern District of Iowa, alleges that Michael Nieman, the on-site manager of Park Towers, sexually harassed women who were tenants at the complex. The suit alleges that Nieman harassed these women by commenting on their body parts, making other sexual comments, making sexual gestures, entering women’s apartments without permission or notice, and conditioning housing benefits, such as rent, cable television, and lockout fees, on an exchange of sexual favors. The suit also names as defendants Elders, Inc., and J.S. Property Management, L.C., which jointly own and manage Park Towers.

"No woman should have to fear sexual harassment where she lives, as alleged in this case," said Thomas E. Perez, Assistant Attorney General for the Justice Department’s Civil Rights Division. "Conditioning housing benefits on sexual favors constitutes unlawful sex discrimination, and the Justice Department will prosecute landlords who engage in such discrimination."

"Sexual harassment by housing providers makes tenants feel uncomfortable and afraid to live in the place they call home," stated John Trasviña, Department of Housing and Urban Development (HUD) Assistant Secretary for Fair Housing and Equal Opportunity. "HUD will continue to enforce everyone’s right to live free from discrimination."

This lawsuit arose as a result of complaints filed with HUD by two former tenants. After an investigation of the complaints, HUD issued a charge of discrimination and referred to the Department of Justice after one of the complainants elected to have the case heard in federal court. The suit alleges that the defendants engaged in a pattern or practice of discrimination and seeks a court order prohibiting future discrimination by the defendants, monetary damages for those harmed by the defendants’ actions, and a civil penalty.

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

WASHINGTON – The Justice Department today announced that Harry Norman Realtors (HNR) and Jennifer Sherrouse have agreed to pay monetary damages and civil penalties of $60,000 to settle a Fair Housing Act lawsuit alleging that they discriminated against families with children.

The suit charged that HNR and Sherrouse, realtors in the Atlanta area, advertised a "no-child policy" at a unit for sale in the Georgian Manor Condominiums, located at 3648 Peachtree Road in Atlanta, and that they refused to show the unit to potential buyers with children.

"Real estate agents have no excuse for violating our nation’s fair housing laws," said Thomas E. Perez, Assistant Attorney General for the Justice Department’s Civil Rights Division. "We must be particularly vigilant against discrimination by repeat players in the housing field."

"‘No-children policies’ are against the law," stated John Trasviña, Department of Housing and Urban Development (HUD) Assistant Secretary for Fair Housing and Equal Opportunity. "The Fair Housing Act prohibits them and HUD will enforce the law to protect the rights of families with children."

The consent decree must still be approved by the U.S. District Court for the Northern District of Georgia. The decree requires HNR and Sherrouse to pay $5,000 to Metro Fair Housing Services Inc., $30,000 to a fund for individuals who suffered damages as a result of the defendants’ conduct and $25,000 to the government as a civil penalty. HNR and Sherrouse are prohibited from engaging in discrimination, and their employees and agents must undergo fair housing training.

This lawsuit arose as a result of a complaint filed with HUD by Metro Fair Housing. After investigating the complaint, HUD issued a charge of discrimination, and the case was referred to the Justice Department. The Justice Department earlier reached a settlement with the owner of a unit at Georgian Manor, who was required to pay $7,500 to Metro Fair Housing and $2,500 to the government. The department is continuing to litigate claims against the Georgian Manor Condominium Association for allegedly having maintained policies for 20 years that discouraged families with children from living in the building.

The federal Fair Housing Act prohibits discrimination in housing based on race, color, religion, national origin, sex, disability and familial status. More information about the Civil Rights Division and the laws it enforces is available at www.usdoj.gov/crt. Individuals who believe that they may have been victims of housing discrimination at Georgian Manor should call the Housing Discrimination Tip Line at 1-800-896-7743, mailbox number 9998, or e-mail the Justice Department at [email protected]. Individuals who believe they may have been victims of housing discrimination may also contact HUD at 1-800-669-9777.

WASHINGTON – Richard Chu, a former "VIP host" at Pure Nightclub located in Caesars Palace Hotel and Casino in Las Vegas, pleaded guilty in federal court to one count of filing a false federal income tax return for the 2006 tax year, the Justice Department and Internal Revenue Service, Criminal Investigation (IRS - CI) announced today. U.S. District Court Judge Kent Dawson presided over the plea hearing.

According to information disclosed at Chu’s guilty plea hearing, during the years 2005, 2006 and 2007, Chu’s responsibilities as a VIP host at Pure included promoting the club, booking reservations and seating patrons at tables.  In addition to paying an admission fee, Pure patrons typically made payments to Pure door personnel and VIP hosts to bypass the general admission line and to obtain more desirable seating. This money was collected, pooled and distributed on a weekly basis to Pure managers, door personnel and VIP hosts, including Chu. Chu’s distributions from the pool comprised the bulk of his compensation during the time he worked at Pure. Chu concealed large amounts of this income from the IRS.

Chu’s sentencing is set for Feb. 9, 2011 at 9:00 am.

"Tax evasion is not a victimless crime," said Victor Song, Chief, IRS - Criminal Investigation. "We all pay when someone like Mr. Chu pockets his income without paying taxes. Here’s a sure tip from the IRS . . . working with the Department of Justice, we will continue to investigate and prosecute those who ignore our country’s tax laws."

The case is being investigated by IRS Criminal Investigation and is being prosecuted by Tax Division Trial Attorneys Christopher J. Maietta and Joseph A. Rillotta.

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

WASHINGTON – A federal grand jury in San Francisco today returned an indictment against three former executives from two color display tube (CDT) manufacturing companies for their participation in a global conspiracy to fix prices of CDTs, a type of cathode ray tube used in computer monitors and other specialized applications, the Department of Justice announced today.

The indictment, filed today in U.S. District Court in San Francisco, charges Seung-Kyu "Simon" Lee, Yeong-Ug "Albert" Yang and Jae-Sik "J.S." Kim with conspiring with unnamed co-conspirators to suppress and eliminate competition by fixing prices, reducing output and allocating market shares of CDTs to be sold in the United States and elsewhere. Lee, Yang and Kim participated in the conspiracy during various time periods between at least as early as January 2000 and at least March 2006.

According to the indictment, Lee, Yang, Kim and co-conspirators agreed to charge prices of CDTs at certain target levels or ranges, to reduce output of CDTs by shutting down CDT production lines for certain periods of time and to allocate target market shares of CDTs. As part of the conspiracy, Lee, Yang, Kim and co-conspirators exchanged CDT sales, production, market share and pricing information for the purpose of implementing, monitoring and enforcing their agreements. The department charged that the conspirators met in Taiwan, Korea, Malaysia, China and elsewhere for their discussions.

Including today’s charge, six individuals have been indicted in connection with the CDT investigation. On Feb. 10, 2009, Cheng Yuan "C.Y." Lin was indicted for his participation in both the CDT conspiracy and a price-fixing conspiracy in the color picture tube industry. On Aug. 18, 2009, Wen Jun "Tony" Cheng was indicted for his participation in the CDT conspiracy. On March 30, 2010, Chung Cheng "Alex" Yeh was indicted for his participation in the CDT conspiracy.

Lee, Yang and Kim are each charged with violating the Sherman Act, which carries a maximum penalty of 10 years in prison and a $1 million fine for individuals. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims, if either of those amounts is greater than the statutory maximum fine.

This case is part of an ongoing joint investigation by the of the Department of Justice Antitrust Division’s San Francisco Office and the FBI in San Francisco. Anyone with information concerning illegal or anticompetitive conduct in the cathode ray tube industry is urged to call the Antitrust Division’s San Francisco Field Office at 415-436-6660 or visit www.justice.gov/atr/contact/newcase.htm.

BALTIMORE – St. Joseph Medical Center (SJMC) in Towson, Md., has agreed to pay the United States $22 million to settle allegations under the False Claims Act that it paid unlawful remuneration under the Anti-Kickback Act and violated the Stark Law when it entered into a series of professional services contracts with the Pikesville, Md., based cardiology group, MidAtlantic Cardiovascular Associates (MACVA), the Justice Department announced.

The allegations resolved in the settlement include the payment of kickbacks to MidAtlantic under the guise of professional services agreements, in return for MACVA’s referrals to the medical center of lucrative cardiovascular procedures, including cardiac surgery and interventional cardiology procedures, over the period from Jan. 1, 1996, to Jan. 1, 2006. The settlement agreement resolves issues relating to 11 professional services agreements between MidAtlantic and St. Joseph under which MACVA received payments above fair market value, for services not rendered or that were not commercially reasonable and were entered into for the purpose of inducing referrals by MACVA to SJMC.

Under the settlement the hospital also agrees to settle allegations that it received from federal health benefit programs between Jan. 1, 2008, and May 12, 2009, for medically unnecessary stents performed by Mark Midei, M.D., a one time partner in MACVA who was later employed by SJMC.

The settlement was announced by Tony West, Assistant Attorney General of the Justice Department’s Civil Division; Rod Rosenstein, U.S. Attorney for the District of Maryland; Nicholas DiGiulio, Special Agent in Charge, Office of Inspector General of the Department of Health and Human Services, Office of Investigations; Roger Craig, Special Agent in Charge of the Defense Criminal Investigative Service - Mid-Atlantic Field Office; and Jill Maroney, Special Agent in Charge of the Office of Personnel Management - Office of Inspector General.

"Kickbacks for medical services undermine the integrity of our health care system," said Tony West, Assistant Attorney General for the Civil Division of the Department of Justice. "When hospitals put their own financial interests ahead of the best interests of patients, we will take action."

The settlement resolves a lawsuit brought by whistleblowers, Stephen D. Lincoln, M.D.; Peter Horneffer, M.D.; and Garth McDonald, M.D., cardiac surgeons who practiced together as members of Cardiac Surgery Associates in Baltimore. The lawsuit, which was filed in the District of Maryland in June 2010, alleges that SJMC violated the Anti-Kickback Act, Stark Law and the False Claims Act by paying various forms of illegal remuneration to MACVA to induce referrals of patients insured by federal health care programs for cardiac procedures.

Drs. Lincoln, Hornefer and McDonald brought their suit under the qui tam or whistleblower provisions of the False Claims Act, which permit private citizens with knowledge of false claims against the government to bring a lawsuit on behalf of the United States and to share in any recovery. Under the civil settlement announced today, the relators will receive a portion of the federal share of the recovery.

"Kickbacks give doctors an incentive to pursue unnecessary treatments that are costly and sometimes even dangerous to patients," said U.S. Attorney Rosenstein. "Medical care providers are prohibited from giving or receiving kickbacks because of the risk that they will put their own financial interests ahead of their patients’ interests."

Saint Joseph's also signed a Corporate Integrity Agreement (CIA) with the Department of Health and Human Services, Office of Inspector General (HHS-OIG). It requires SJMC to engage in activities that will help ensure accurate billing and appropriate relationships with referral sources. The CIA also addresses patient care issues by requiring the hospital to: appoint physician executives to oversee medical staff quality-of-care matters; hire a Peer Review Consultant to evaluate SJMC’s peer review practices; and engage an Independent Review Organization to perform a Cardiac Catheterization Procedures Review, evaluating and analyzing the medical necessity and appropriateness of interventional procedures performed at SJMC. The hospital is subject to exclusion from Federal health care programs, including Medicare and Medicaid, for major noncompliance with this CIA and subject to stipulated penalties for less significant noncompliance.

"Payoffs to influence health care decision-making too often result in inappropriate, unnecessary and harmful medical practices," said Daniel R. Levinson, Inspector General of the Federal Department of Health and Human Services. "OIG is committed to protecting patients from needless medical procedures, such as the insertion of unnecessary cardiac stents -- as is alleged in this case."

The settlement announced today was the result of an investigation by the U.S. Attorney’s Office for the District of Maryland and the Commercial Litigation Branch of the Justice Department’s Civil Division with assistance from the U.S. Department of Health and Human Services, Office of Inspector General; the Department of Defense Office of the Inspector General, Defense Criminal Investigative Service; and the Office of Personnel Management, Office of Inspector General. The case was handled by Maryland Assistant U.S. Attorney Jamie M. Bennett.

WASHINGTON – An attorney for a major pharmaceutical company was charged with obstruction and making false statements, the Justice Department announced today. Lauren Stevens of Durham, N.C., was charged with one count of obstructing an official proceeding, one count of concealing and falsifying documents to influence a federal agency, and four counts of making false statements to the Food and Drug Administration (FDA).

The indictment states that in October 2002, the FDA asked for information about the company’s promotion of a prescription drug, as part of an inquiry into whether the drug was being promoted for uses that had not been approved by the FDA. Data demonstrating a drug’s safety and efficacy for a particular use is required for FDA approval. Federal law prohibits the marketing or promotion of drugs for unapproved – or "off-label" – uses.

The indictment alleges that, in response to the FDA’s inquiry, Stevens signed and sent a series of letters from the company to the FDA that falsely denied that the company had promoted the drug for off-label uses, even though she knew, among other things, that the company had sponsored numerous programs where the drug was promoted for unapproved uses. The indictment alleges that Stevens knew that the company had paid numerous physicians to give promotional talks to other physicians that included information about unapproved uses of the drug. According to the indictment, the company paid one such physician to speak at 511 promotional events in 2001-2002 and another physician to speak at 488 such events during that time period.

The indictment also alleges that Stevens did not provide the FDA with slide sets used by the physicians who were paid by the company to promote the drug, even though the FDA had asked for the slide sets and Stevens had previously promised to obtain and provide the FDA with such materials. The indictment alleges that a legal memorandum was prepared for Stevens that set forth the "pros" and "cons" of producing the slide sets to the FDA. According to the indictment, one of the "cons" was that the slide sets would provide "incriminating evidence about potential off-label promotion of [the drug] that may be used against [the company] in this or in a future investigation." Instead of providing the requested slide sets to the government, Stevens represented that the company’s responses to the FDA’s requests was "final" and "complete."

"Where the facts and law allow, the Justice Department will pursue individuals responsible for illegal conduct just as vigorously as we pursue corporations," said Tony West, Assistant Attorney General for the Civil Division of the Department of Justice. "Criminal charges are appropriate when false statements such as those alleged here are made to the FDA."

"There is a difference between legal advocacy based on the facts and distorting the facts to cover up the truth," said Carmen Ortiz, U.S. Attorney for the District of Massachusetts. "Federal agencies such as the FDA cannot protect the public health if the entities and individuals they regulate provide false information and conceal the true facts."

The charges were filed in the District of Maryland, where the FDA is located. The case is being prosecuted by the Civil Division’s Office of Consumer Litigation and U.S. Attorney’s Office for the District of Massachusetts. The case is being investigated by agents from the Office of Inspector General of the Department of Health and Human Services, the FBI, the FDA’s Office of Criminal Investigations and the Defense Criminal Investigative Service (DCIS).

"This indictment demonstrates that those who purposely subvert the regulatory functions of the FDA through false statements and misleading information will be held accountable for their deception," stated Dara Corrigan, FDA's Associate Commissioner for Regulatory Affairs. "We commend the efforts of the Department of Justice and the other law enforcement agencies that are vigorously pursuing the prosecution of this matter."

"Lauren Stevens allegedly misled investigators intentionally and failed to comply with our request for documents," said Susan J. Waddell, Special Agent in Charge of the Department of Health and Human Services Office of Inspector General’s Boston region.

"This indictment shows that we will investigate those responsible for unlawful acts done on a company's behalf. When individual employees are identified, they will be held accountable for their illegal activity. Individual employees now know that concealing information from the government, obstructing investigative activity and making false statements to federal investigators will be investigated and prosecuted," said Richard DesLauriers, Special Agent in Charge, FBI, Boston Division.

"This indictment demonstrates that misleading federal officials is a serious offense that will not be tolerated," said Leigh-Alistair Barzey, DCIS Resident Agent in Charge. " DCIS will continue to partner with other federal agencies, such as the FDA, in an effort to protect the DoD's TRICARE health plan, which provides medical care for America's military members and their families."

Each of the obstruction charges carries a maximum penalty of 20 years in prison. Each of the false statement counts carry a maximum penalty of five years in prison. Charges contained in the indictment are simply accusations, and not evidence of guilt.

The pharmaceutical company for whom Stevens worked has not been charged with a crime and was not identified in the indictment.

WASHINGTON - Remy Heath, alias "Remy", "King Remy" y "King Mellow", 26 de Hyattsvile, Md., se declaró culpable hoy de conspirar para participar en una empresa de delincuencia organizada en conexión con sus actividades pandilleras como miembro de la pandilla "Nación Todopoderosa de Reyes y Reinas Latinos" [Almighty Latin King y Queen Nation (Latin Kings)].

La declaración de culpabilidad 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, Md., 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.

Según el acuerdo de declaración de culpabilidad de Heath, 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.

Heath era un miembro original de la Tribu Royal Lion en Maryland, la que luego tomó el nombre de MOG, y luego Sun Tribe. Heath se unió al Tribu Royal Lion de los Latin Kings a principios del verano de 2007. Heath participó en reuniones en los que se recaudaban derechos monetarios de los miembros y se discutían negocios de la pandilla, y se comunicaba con los miembros y asociados de los Latin King por teléfono e Internet. Heath viajó de Maryland a Nueva York para actividades de los Latin Kings. De noviembre de 2008 a marzo de 2009, Heath ocupó una posición de liderazgo en la pandilla, donde era Segunda Corona o Cacique de la tribu MOG.

Heath enfrenta una sentencia máxima de prisión perpetua. El Juez Federal de Distrito Alexander Williams Jr. ha programado la lectura de su sentencia para el 27 de mayo de 2011, a las 9:30a.m. Heath permanece detenido.

Hasta la fecha, seis codemandados se han declarado culpables a la conspiración para cometer delincuencia organizada.
 

La Fuerza de Tarea de Control Antipandillas Regional [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.

Están 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.

WASHINGTON - Remy Heath, aka “Remy,” “King Remy,” and “King Mellow,” 26, of Hyattsville, Md., pleaded guilty today to 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 guilty plea 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, Md., Police Department; Montgomery County State’s Attorney John McCarthy; Chief Roberto L. Hylton of the Prince George’s County, Md., Police Department; and Prince George’s County State’s Attorney Glenn Ivey.

           

According to Heath’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.

 

Heath was an original member of the Royal Lion Tribe in Maryland, which later became MOG, and then the Sun Tribe.  Heath joined the Royal Lion Tribe of the Latin Kings in early summer of 2007.  Heathattended Latin King meetings where dues were collected from members and gang business was discussed, and he communicated with Latin King members and associates by phone and the Internet.   Heath traveled from Maryland to New York for Latin King activities.  From November 2008 to March 2009, Heath held a leadership position in the gang, serving as the Second Crown or Cacique for the MOG tribe.

 

Heath faces a maximum sentence of life in prison.  U.S. District Judge Alexander Williams Jr. has scheduled sentencing for May 27, 2011, at 9:30 a.m. Heath remains detained.

 

To date, six co-defendants have pleaded guilty to the racketeering conspiracy. 
 

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 is being prosecuted by Assistant U.S. Attorneys Emily Glatfelter and David Salem, and Trial Attorney Lara M. Peirce of the Criminal Division’s Gang Unit.

WASHINGTON – The Justice Department today announced a settlement of its lawsuit alleging that Lee Enterprises Inc. and its subsidiary, Lee Publications Inc., violated the Fair Housing Act (FHA) by publishing an advertisement that discriminated on the basis of familial status in the Elko Daily Free Press. The Elko Daily Free Press is a newspaper serving Elko, Nev. Lee Enterprises Inc. is a publisher of 49 daily newspapers and nearly 300 specialty publications across 23 states.

The case began when the Silver State Fair Housing Council (SSFHC) filed a fair housing complaint with the Department of Housing and Urban Development (HUD). SSFHC alleged that in or about November 2008, the defendants published in the Elko Daily Free Press an advertisement for rental housing stating that "no kids" were permitted. After investigating, HUD issued a charge of discrimination and referred the matter to the Justice Department, which filed this lawsuit in November 2009.

Under this nationwide settlement, which must still be approved by the U.S. District Court for the District of Nevada, the defendants will adopt procedures to screen out discriminatory advertisements for housing from all the defendants’ publications that include advertisements for housing. The settlement requires the defendants to screen out discriminatory advertisements for housing that appear in print or that appear both in print and on any associated websites. The settlement also requires the defendants to undergo training on the requirements on the Fair Housing Act, post notices informing readers about the requirements of the FHA, provide monetary compensation to SSFHC, and make periodic reports to the government.

"The Fair Housing Act applies to all those who participate in the housing industry, including those who publish advertisements for dwellings," said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. "This settlement will help eliminate the atmosphere of intolerance created by discriminatory advertisements."

"Families struggling to find suitable housing shouldn’t have their choices limited by discriminatory advertising and unlawful practices," stated John Trasvina, HUD Assistant Secretary for Fair Housing and Equal Opportunity. "HUD is committed to taking swift enforcement action anytime a family’s right to obtain the housing of their choice is illegally denied."  

The federal Fair Housing Act prohibits discrimination in housing based on race, color, religion, national origin, sex, disability and familial status. Individuals who believe that they may have been victims of housing discrimination should call the Housing Discrimination Tip Line (1-800-896-7743) or email the Justice Department at [email protected]. Such persons may also contact the HUD at 1-800-669-9777.

Fair housing enforcement is a priority of the Civil Rights Division. More information about the Civil Rights Division and the laws it enforces is available at www.usdoj.gov/crt.

WASHINGTON – The Justice Department and Hilton Worldwide Inc. today announced a comprehensive, precedent-setting agreement under the Americans with Disabilities Act (ADA) that will make state-of-the-art accessibility changes to approximately 900 hotels nationwide. The agreement is in the form of a proposed consent decree filed today in federal court to resolve a simultaneously filed lawsuit under the ADA.

The department’s complaint alleges that Hilton’s hotels designed and constructed after Jan. 26, 1993, fail to comply with the ADA and Department of Justice regulations. Hilton operates a system of hotels throughout the United States under the trade and service names of "Hilton," "Conrad Hotels & Resorts," "Doubletree," "Embassy Suites," "Hampton Inn," "Hilton Garden Inn," "Hilton Grand Vacations," "Homewood Suites," "the Waldorf Astoria" and "Home2Suites." Hilton Worldwide Inc. (HWI), owns, operates, or has entered into and maintains franchise license agreements for each hotel in the HWI system.

"The ADA protects the right of people with disabilities to stay in accessible hotel rooms, and to reserve those hotel rooms through the same convenient systems as everyone else," said Thomas E. Perez, Assistant Attorney General of the Civil Rights Division. "Persons with disabilities who travel for pleasure or business must be able to count on getting the accessible room they reserved, and the hotel must provide the choice of amenities that everyone comes to expect from a major national hotel chain like Hilton."

The agreement is the result of a lengthy investigation and negotiation. Hilton officials cooperated with the department throughout the process. Allegations in the department’s complaint include failure to provide the required number of accessible rooms, failure to disperse accessible rooms among the various categories of available accommodations, failure to provide individuals with disabilities the ability to reserve accessible rooms through Hilton’s central reservations system on-line or by telephone, and failure to provide individuals with disabilities with the accessible sleeping accommodations that they reserved.

Today’s settlement represents the first time the Department of Justice has required a franchisor to require all franchised or managed hotels that enter into a new franchise or management agreement, experience a change in ownership, or renew or extend a franchise agreement, to conduct a survey of its facilities and to certify that the hotel complies with the ADA. It is also the first time that an agreement under the ADA has specifically detailed how a hotel reservations system should be made accessible. The agreement also represents the first time that a hotel chain has been required to make its online reservations system accessible and to provide on its website current data about accessible features in guest rooms throughout the chain.

Under the agreement:

• All owned and joint venture hotels built after Jan. 26, 1993 will be surveyed and brought into compliance with Department of Justice ADA title III regulations, including dispersing accessible rooms among the various classes of available accommodations, providing accessible rooms with roll-in showers and tub seats, and providing accessible rooms for guests with hearing impairments;
• For franchised and managed hotels built after Jan. 26, 1993, where Hilton enters into a new franchise or management agreement, renews or extends an agreement for more than six months, or agrees to a change of ownership, Hilton will require the owners to survey their hotels for compliance with specified provisions of the ADA, and where necessary, bring their hotels into compliance;
• Hotels constructed in the future will be required to comply with the ADA;
• Specific ADA training will be provided for staff;
• Hilton’s reservations system will be improved so individuals with disabilities can reserve accessible rooms with specific available options and amenities, and have the same opportunity to guarantee a reservation for an accessible room as that offered for any other reservation;
• Hilton will improve the accessibility of its websites;
• Hilton will appoint a national ADA compliance officer responsible for Hilton’s compliance with the ADA and the consent decree;
• Hilton will appoint ADA on-site contact persons at each hotel responsible for resolving ADA-related complaints at the local level; and
• Hilton will pay a civil penalty of $50,000 to the United States.

People interested in finding out more about the ADA or this consent decree can call the toll-free ADA Information Line at 800-514-0301 or 800-514-0383 (TDD), or access the ADA website at www.ada.gov.

WASHINGTON – El Departamento de Justicia y Hilton Worldwide Inc. anunciaron hoy un acuerdo integral que establece precedentes, bajo la Ley de Personas con Discapacidades [Americans with Disabilities Act (ADA)] a través del cual se realizarán cambios de accesibilidad de última generación en aproximadamente 900 hoteles del todo el país. El acuerdo tiene la forma de un decreto por consentimiento propuesto presentado hoy en el tribunal federal para resolver una demanda entablada simultáneamente bajo la ADA.

La demanda del Departamento alega que los hoteles Hilton diseñados y construidos después del 26 de enero de 1993, no cumplen con las normas de la ADA y del Departamento de Justicia. Hilton opera un sistema de hoteles en todos los Estados Unidos bajo los nombres comerciales y de servicio "Hilton," "Conrad Hotels & Resorts," "Doubletree," "Embassy Suites," "Hampton Inn," "Hilton Garden Inn," "Hilton Grand Vacations," "Homewood Suites," "the Waldorf Astoria" y "Home2Suites." Hilton Worldwide Inc. (HWI), es propietaria, opera o ha realizado acuerdo de franquicia que mantiene para cada hotel del sistema HWI.

"La ADA protege los derechos de las personas discapacitadas a quedarse en habitaciones de hotel accesibles, y reservar dichas habitaciones de hotel a través de los mismos sistemas convenientes que cualquier otra persona", dijo Thomas E. Pérez, Secretario de Justicia Auxiliar de la División de Derechos Civiles. "Las personas discapacitadas que viajan por placer o negocios deben poder contar con obtener la habitación accesible que reservaron, y el hotel debe proveer la opción de amenidades que cualquiera podría esperar de una cadena hotelera nacional importante como Hilton".

El acuerdo es el resultado de una larga investigación y negociación. Autoridades del Hilton cooperaron con el Departamento a lo largo del proceso. Los alegatos en la demanda entablada por el Departamento incluyen dejar de proveer la cantidad requerida de habitaciones accesibles, dejar de dispersar las habitaciones accesibles a lo largo de diversas categorías de habitaciones disponibles, dejar de proveer a las personas discapacitadas la capacidad de reservar habitaciones accesibles a través del sistema central de reservas del Hilton, ya sea en Internet o por teléfono, y dejar de brindar a las personas discapacitadas las camas accesibles que reservaron.

El acuerdo conciliatorio de hoy representa la primera vez que el Departamento de Justicia ha exigido a un concesionario de franquicias que exija que todos los hoteles administrados o bajo franquicia que realicen un nuevo acuerdo de franquicia o administración, cambien de propietario, o renuevan o prorroguen un acuerdo de franquicia, realice una inspección de sus inspecciones para certificar que el hotel cumpla con la ADA. También es la primera vez que un acuerdo bajo la ADA detalla específicamente cómo debe hacer accesible un sistema de reserva de hotel. El acuerdo también representa la primera vez que se le exige a una cadena hotelera que haga accesible sus sistema de reservas en Internet provea en su portal en Internet datos actuales sobre características de accesibilidad en las habitaciones a lo largo de la cadena.

Según el acuerdo:

• Todos los hoteles de propiedad exclusiva o participantes en fusiones construidos después del 26 de enero de 1993 será inspeccionados y puestos en conformidad con las normas del título III de la ADA del Departamento de Justicia, incluida la dispersión de habitaciones accesibles entre las diversas clases de habitaciones disponibles, proveer habitaciones con duchas accesibles y asientos en las bañeras, y la provisión de habitaciones accesibles para huéspedes con deficiencias auditivas;
• Para hoteles bajo franquicia y administrados construidos después del 16 de enero de 1993, donde Hilton realice una nueva franquicia o acuerdo de administración, renueve o prorrogue el acuerdo por más de seis meses, o acepte un cambio de titularidad, el Hilton exigirá que los propietarios inspeccionen sus hoteles para asegurar el cumplimiento de las disposiciones especificadas de la ADA, y donde resulte necesario, realizar las reformas correspondientes;
• Los hoteles construidos en el futuro deberán cumplir con la ADA;
• Se proveerá al personal capacitación específica sobre la ADA;
• El sistema de reservas del Hilton se mejorará de modo que personas discapacitadas puedan reservar habitaciones accesibles con opciones y amenidades específicas disponibles, y puedan tener la misma oportunidad de garantizar una reserva para una habitación accesible que la que se ofrece para cualquier otra reserva;
• Hilton mejorará la accesibilidad de sus portales en Internet;
• Hilton designará un funcionario nacional de cumplimiento con la ADA responsable por el cumplimiento del Hilton con la ADA y el decreto por consentimiento;
• Hilton designará personas de contacto en cada hotel responsables por resolver quejas asociadas a la ADA y en el nivel local; y
• Hilton pagará una multa criminal de $50,000 dólares a los Estados Unidos.

Las personas interesadas en obtener más información sobre la ADA o este decreto por consentimiento pueden llamar a la Línea de Información de la ADA sin cargo al (800) 514-0301 ó (800) 514-0383 (TDD), o acceder al portal de Internet de la ADA en www.ada.gov.

WASHINGTON – The following statement may be attributed to Matthew Miller, Director, Office of Public Affairs:

"In January 2008, Attorney General Michael Mukasey appointed Assistant United States Attorney John Durham to investigate the destruction by CIA personnel of videotapes of detainee interrogations. Since that time, a team of prosecutors and FBI agents led by Mr. Durham has conducted an exhaustive investigation into the matter. As a result of that investigation, Mr. Durham has concluded that he will not pursue criminal charges for the destruction of the interrogation videotapes."

WASHINGTON – A Virginia man was sentenced today to 66 months in prison for possession and distribution of images containing child pornography, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division and U.S. Attorney Timothy J. Heaphy for the Western District of Virginia. Senior U.S. District Judge Norman K. Moon also ordered Rimmer to serve 10 years of supervised release following his prison term.

Gary Lee Rimmer, 56, was indicted in June 2010 and charged with one count of possession of child pornography and one count of distribution of child pornography. Rimmer pleaded guilty to both counts on July 30, 2010, in U.S. District Court for the Western District of Virginia.

At his plea hearing, Rimmer admitted that while living in Greene County, Va., in 2006, he started an online relationship with a 13-year-old girl from Florida. Throughout their Internet conversations and subsequent cell phone conversations, Rimmer portrayed himself as a 20-year-old man named "Jason," posting images he claimed to be of himself, but that were in fact images of another young man. According to court documents, Rimmer had conversations with the girl, whom he ultimately learned was under the age of 16, about starting a sexual relationship. Rimmer mailed the victim sexual items and sent her sexual images using the Internet. When investigators searched Rimmer’s computer, they found images of child pornography, including images of the victim with the items he previously mailed to her. Search terms associated with child pornography were also found on his computer. A forensic examination of Rimmer’s computer also revealed that he distributed child pornography to a person outside of Virginia during a chat session using an online message service.

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

This case was prosecuted by CEOS Trial Attorney James Silver and Assistant U.S. Attorney Nancy S. Healey of the Western District of Virginia. This case was investigated by the High Tech Investigative Unit of CEOS, the Virginia State Police and the Citrus County, Fla., Sheriff’s Department.

WASHINGTON - Daniel Lee Jones, a Portland, Ore., white supremacist, was sentenced today to 18 months in prison and three years supervised release for threatening the president of the Lima, Ohio, chapter of the NAACP by mailing him a noose. Jones entered a guilty plea on May 17, 2010, to using the U.S. Postal Service to send a threatening communication.

In the plea agreement, Jones admitted to mailing F.M. Jason Upthegrove a hangman’s noose, which arrived at Mr. Upthegrove’s home on or about Feb. 14, 2008. Jones stated in the plea agreement that he mailed the hangman’s noose in order to convey a threat to Mr. Upthegrove because he was an African-American who publicly advocated for better police services for African-Americans in Lima, Ohio. The indictment indicated that Mr. Upthegrove also spoke out in the media against Jones’s white supremacist group’s mailing of hate flyers related to the shooting of an African American woman by a member of the Lima Police Department.

"A noose, an unmistakable symbol of hatred in this nation, was used by this defendant as a threat of violence aimed at silencing a civil rights advocate," said Thomas E. Perez, Assistant Attorney General of the Civil Rights Division. "The Department of Justice will vigorously prosecute those who use threats of violence to attempt to silence proponents of racial equality."

"We will not tolerate those who use threats of violence, such as by mailing a noose, to intimidate individuals who are advocating for racial equality,"said U.S. Attorney for the Northern District of Ohio Steven M. Dettelbach.

The case was investigated by Special Agent Brian Russ of the FBI, and the prosecution was handled by Assistant U.S. Attorney David Bauer from the U.S. Attorney’s Office, and Special Legal Counsel Barry Kowalski and Trial Attorney Shan Patel from the Civil Rights Division of the U.S. Department of Justice.

WASHINGTON - Harold James Nicholson, 59, appeared before U.S. District Judge Anna J. Brown and pleaded guilty to the crimes of conspiracy to act as an agent of a foreign government and conspiracy to commit international money laundering, David Kris, Assistant Attorney General for National Security, and Dwight C. Holton, U.S. Attorney for the District of Oregon, announced today.

The maximum penalties for those crimes are five years in prison and a fine of $250,000 and 20 years in prison and a fine of $500,000, respectively. The plea agreement states both parties will ask the court at sentencing to impose an eight year prison sentence to be served consecutive to the sentence the defendant is currently serving. Judge Brown has scheduled sentencing on Jan. 18, 2011 at 1:30 p.m.

Harold J. Nicholson, a former CIA employee, is serving a 283-month sentence at the Federal Correctional Institution (FCI) in Sheridan, Ore., for a 1997 conviction of conspiracy to commit espionage. At the plea hearing, Harold J. Nicholson admitted that from 2006 to December 2008, with the assistance of his son Nathaniel, he acted on behalf of the Russian Federation, passed information to the Russian Federation, and received cash proceeds for his past espionage activities.

Harold J. Nicholson admitted that during the course of the conspiracy he met with his son Nathaniel on several occasions at FCI Sheridan and provided Nathaniel information intended for the Russian Federation. Defendant admitted that it was part of the conspiracy that Nathaniel would travel to several locations including San Francisco; Mexico City; Lima, Peru; and Nicosia, Cyprus, to meet with agents of the Russian Federation.

At these meetings, Nathaniel provided the Russian Federation information from the defendant and collected money for defendant’s past espionage activities. Defendant followed the instructions of the Russian Federation and provided information requested by the Russians to Nathaniel to deliver to Russian agents at the overseas locations. Defendant directed Nathaniel on how to covertly travel with the funds from the Russian Federation and how to disperse the funds to family members.

"Harold Nicholson, one of the highest-ranking CIA officials ever convicted of espionage, dispatched his son around the globe to collect on past espionage debts from Russian agents. Today, he admitted using this scheme to continue to profit from his spying activities while in prison. The many agents, analysts and prosecutors who worked on this matter deserve our thanks," said David Kris, Assistant Attorney General for National Security.

U.S. Attorney for Oregon, Dwight C. Holton stated, "Harold Nicholson has admitted not only betraying his country – again -- but also betraying his family by involving his son Nathaniel in his corrupt scheme to get more money for his past espionage activities. We applaud the outstanding work of the FBI on this criminal investigation and the extraordinary cooperation of the Bureau of Prisons."

"When he was hired by the CIA, Harold Nicholson took an oath to protect our nation’s security. He violated this oath," said Sean Joyce, Executive Assistant Director FBI National Security Division. "The FBI will relentlessly pursue those who breach the trust our country places in them."

"During his career with the CIA, this country entrusted Harold ‘Jim’ Nicholson with some of its most sensitive secrets," said Arthur Balizan, Special Agent in Charge of the FBI in Oregon. "Not once - but twice - he betrayed his oath, our nation and his family. Unfortunately, this is a legacy he and his children will live with from now on."

The FBI and the Federal Bureau of Prisons investigated this case. Assistant U.S. Attorneys Pamala Holsinger and Ethan Knight are prosecuting this case. Trial Attorney Patrick Murphy of the Counterespionage Section of the Justice Department’s National Security Division is also assisting.

WASHINGTON – A federal judge in Providence, R.I., entered a preliminary injunction against Michael Brier, individually, and doing business as Refunds Now Inc., RNTS Inc., FTIRS Inc., POTIRS Inc. and IHIRS Inc. from preparing federal tax returns for others. Also enjoined are Jeffrey Sroufe, Refunds Now’s director of operations and Esther Santiago, RNTS’s president.

The court found that at least 300 returns prepared by Brier and Refunds Now understated customers’ tax liabilities. It further found that Brier and his employees fabricated deductions and tax credits on the returns, for which they had no support. The court noted that with respect to one of Brier’s customers, a Refunds Now employee offered to provide the customer with fake receipts in order to substantiate amounts reported on her federal tax return.

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

WASHINGTON - Harold James Nicholson, 59, compareció ante la Jueza Federal de Distrito Anna J. Brown y se declaró culpable de los delitos de conspiración para actuar como agente de un gobierno extranjero y conspiración para cometer lavado de dinero internacional, anunciaron hoy David Kris, Secretario de Justicia Auxiliar de Seguridad Nacional, y Dwight C. Holton, Fiscal Federal para el Distrito de Oregón.

Las sentencias máximas para dichos delitos son cinco años en prisión y una multa de $250,000 dólares y 20 años en prisión y una multa de $500,000 dólares, respectivamente. El acuerdo de declaración de culpabilidad indica que ambas partes le pedirán al tribunal en la lectura de la sentencia que imponga una sentencia de prisión de ocho años a ser cumplida consecutivamente con la sentencia que el demandado está cumpliendo actualmente. La Juez Brown ha programado la lectura de la sentencia para el 18 de enero de 2011, a la 1:30pm.

Harold J. Nicholson, un ex empleado de la CIA, está cumpliendo una sentencia de 283 meses en la Institución Federal de Correcciones [Federal Correctional Institution (FCI)] de Sheridan, Ore., por una condena emitida en 1997 por conspiración para cometer espionaje. En la audiencia de declaración de culpabilidad, Harold J. Nicholson admitió que, de 2006 a diciembre de 2008, con la asistencia de su hijo Nathaniel, actuó en nombre de la Federación Rusa, pasó información a la Federación Rusa, y recibió dinero en efectivo por sus actividades de espionaje del pasado.

Harold J. Nicholson admitió que, durante la conspiración, se reunió con su hijo Nathaniel en diversas ocasiones en FCI Sheridan y proporcionó a Nathaniel información para ser entregada a la Federación Rusa. El demandado admitió que, como parte de la conspiración, Nathaniel viajaba a varios lugares, incluidos San Francisco, Ciudad de México; Lima, Perú; y Nicosia, Chipre, para reunirse con agentes de la Federación Rusa.

En estas reuniones, Nathaniel brindó a la Federación Rusa información del demandado y cobró dinero por actividades de espionaje realizadas por el demandado en el pasado. El demandado siguió las instrucciones de la Federación Rusa y brindó información solicitada por los rusos a Nathaniel para brindar a agentes rusos en lugares del exterior. El demandado instruyó a Nathaniel sobre cómo viajar en forma encubierta con los fondos de la Federación Rusa y cómo dispersar los fondos a familiares.

"Harold Nicholson, uno de los agentes de la CIA de más alta jerarquía ya condenado por espionaje, despachó a su hijo alrededor del mundo para cobrar deudas de agentes rusos por actividades de espionaje realizadas en el pasado. Hoy, admitió haber utilizado este ardid para seguir lucrando a partir de sus actividades de espionaje mientras se encuentra en la prisión. Los muchos agentes, analistas y fiscales que trabajaron en este asunto merecen nuestro agradecimiento", dijo David Kris, Secretario de Justicia Auxiliar de Seguridad Nacional.

El Fiscal Federal para Oregón, Dwight C. Holton señaló, "Harold Nicholson ha admitido no solo haber traicionado a su país nuevamente -- sino también haber traicionado a su familia al involucrar a su hijo Nathaniel en este ardid corrupto para obtener más dinero por sus actividades de espionaje del pasado. Aplaudimos la labor sobresaliente del Buró Federal de Investigaciones [Federal Bureau of Investigation (FBI)] en esta investigación criminal y la extraordinaria cooperación del Buró de Prisiones".

"Cuando fue contratado por la CIA, Harold Nicholson juró proteger la seguridad de nuestra nación. Violó su juramento", dijo Sean Joyce, Director Auxiliar Ejecutivo de la División de Seguridad Nacional del FBI. "El FBI buscará incansablemente a quienes violen la confianza que nuestro país les brinda".

"Durante su carrera con la CIA, este país confió a Harold 'Jim' Nicholson alguno de sus secretos más sensibles", dijo Arthur Balizan, Agente Especial a Cargo del FBI en Oregón. "No una, sino dos veces, traicionó su juramento, nuestra nación y su familia. Lamentablemente, este es el legado que él y sus hijos vivirán de ahora en adelante".

El FBI y el Buró Federal de Prisiones investigaron este caso. Están a cargo de la acusación en el caso los Fiscales Federales Pamala Holsinger y Ethan Knight. El Abogado Litigante Patrick Murphy de la Sección de Contraespionaje de la División de Seguridad Nacional del Departamento de Justicia también está asistiendo en el caso.

WASHINGTON – Un juez federal en Providence, R.I., emitió un interdicto preliminar contra Michael Brier, individualmente, y haciendo negocios como Refunds Now Inc., RNTS Inc., FTIRS Inc., POTIRS Inc. e IHIRS Inc. prohibiéndole preparar declaraciones de impuestos federal para terceros. También se prohibió a Jeffrey Sroufe, director de operaciones de Refunds Now y Esther Santiago, presidente de RNTS.

El tribunal encontró que al menos 300 declaraciones preparadas por Brier y Refunds Now subestimaron las obligaciones tributarias de clientes. Asimismo, encontró que Brier y sus empleados inventaban descuentos y créditos tributarios en sus declaraciones, para los cuales no tenían ningún tipo de respaldo. El tribunal observó que, con respecto a uno de los clientes de Brier, un empleado de Refunds Now ofreció proveerle a la cliente recibos falsos a fin de fundamentar la sumas informadas en su declaración de impuestos federal.

En la última década, la División de Impuestos del Departamento de Justicia ha obtenido centenas de interdictos contra preparadores de declaraciones de impuestos fraudulentos y promotores de fraude tributario deshonestos. Se puede encontrar información sobre estos casos en el portal del Departamento de Justicia.

WASHINGTON – The Department of Justice, the Environmental Protection Agency (EPA), and the state of Indiana have reached an agreement with the city of Indianapolis on important modifications to a 2006 consent decree that will make Indianapolis’ sewer system more efficient, leading to major reductions in sewage contaminated water at a savings to the city of approximately $444 million.

Prior to 2006, the city of Indianapolis and its 800,000 residents experienced Combined Sewer Overflows (CSO’s) totaling approximately 7.8 billion gallons per year. Combined sewer systems, which have not been constructed for decades in the United States, carry both sanitary wastewater (domestic sewage from homes, as well as industrial and commercial wastewater), and storm water runoff (from rainfall or snowmelt) in a single system of pipes to a publicly owned treatment works.

A consent decree approved by a federal court in 2006 required the city to construct 31 CSO control measures, including a 24-million gallon capacity shallow interceptor sewer, to reduce the city’s overflows to approximately 642 million gallons per year. Those improvements were expected to cost approximately $1.73 billion over a 20-year period.

After the 2006 consent decree was approved, the city undertook additional engineering studies of its system and ultimately proposed a number of changes to its system to make it more efficient and to further reduce the numbers and volumes of overflows. The first change, which was approved in a 2009 amendment to the 2006 consent decree, eliminated the shallow interceptor in favor of a 54-million gallon, 25 mile long Deep Rock Tunnel Connector.

The second set of changes to the system would be achieved through the amendment announced today. With the proposed changes, the city is now expected to reduce the amount of total annual discharge to about 414 million gallons, a significant improvement from the 642 million gallons that were expected under the original consent decree, and reduce the cost of the project by about $444 million.

The project’s modifications would also result in an accelerated construction schedule to capture 7 billion gallons of CSO discharges and their associated disease-causing organisms.

“Only under unique circumstances would we modify the terms of a settlement,” said Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division of the Department of Justice. “The proposed modifications will benefit the environment and reduce costs for the city of Indianapolis. In my view, this is a classic ‘win-win’”

“EPA is committed to enforcing laws that protect the public from discharges of raw sewage,” said EPA Regional Administrator Susan Hedman.  “As a result of the amendment, Indianapolis will further reduce its overflows and save money.”

A copy of the proposed Amendment , which must be approved by a federal court, is available on the Justice Department website at www.justice.gov/enrd/Consent_Decrees.html 

WASHINGTON – Steven W. Allen, a practicing attorney from Mesa, Ariz., and Allen Goodmansen, a certified public accountant, also from Mesa, were sentenced to prison for tax fraud by Phoenix federal district court Judge Roslyn O. Silver, the Justice Department and the Internal Revenue Service (IRS) announced today.

The court sentenced Allen to 46 months in prison and Goodmansen to 18 months in prison. According to court documents, Allen helped his clients evade their taxes by promoting and selling a fraudulent foreign triple-trust scheme. Goodmansen assisted Allen by preparing false foreign trust returns and individual income tax returns for Allen’s clients.

According to court documents, Allen set up three sham foreign trusts designed to conceal his clients’ income and their control of the trusts from the IRS. In fact, his clients never surrendered control of their money, which remained in the United States. Allen instructed his clients to open domestic bank accounts in the names of their trusts, using employer identification numbers that Allen received from the IRS, so that clients’ names and Social Security numbers would not be connected to their money. Allen sold the trust packages for between $10,000 and $30,000 and charged each client additional annual maintenance fees.

To further conceal the clients’ income from the IRS, Goodmansen prepared foreign trust returns that did not include any identifying information that could be used to identify Allen, Goodmansen, or the client. Goodmansen also prepared false individual income tax returns for Allen’s clients, which completely omitted the income that the clients had fraudulently shifted to the false foreign trust returns. Goodmansen used the scheme himself to evade taxes he owed in 2002.

John A. DiCicco, Acting Assistant Attorney General of the Justice Department’s Tax Division, commended the special agents from IRS Criminal Investigation who investigated the

case as well as Tax Division attorneys Monica Edelstein and Michael Romano who prosecuted the case. Acting Assistant Attorney General DiCicco also thanked the U.S. Attorney’s Office for the District of Arizona for their assistance in this matter.

Chevy Chase, MD – The United States Parole Commission has rejected Ronald Del Raine’s application for parole, announced Commission Chairman Isaac Fulwood, Jr. 

Del Raine, who has been incarcerated for 43 years on his current 209-year sentence, applied in July 2010 for release under Section 4206(d) of Title 18.  That statute generally requires the Commission to release a prisoner who has served two-thirds or 30 years – whichever is less – on each sentence imposed against him, unless the Commission determines that the prisoner has seriously or frequently violated institution rules or that there is a reasonable probability that the prisoner will commit more crimes.

Del Raine was convicted of murder while engaging in a bank robbery in Northlake, Illinois.  Two police officers died and two others were wounded during that offense.  Del Raine was also convicted of two subsequent escape attempts, one in 1975 and another in 1981.

Chairman Fulwood noted, “Public safety is the Commission’s paramount concern.  Mr. Del Raine’s prison record showed that his release would be incompatible with the public safety and that he must be denied parole under the statutory standard.”

For more information, please call Johanna Markind at (301) 492-5821 ext. 238.

WASHINGTON A State Department employee pleaded guilty today to lying to State Department officials in connection with an investigation into her alleged illegal access of hundreds of confidential passport application files, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division. Brooke E. Reyna, 28, of Barrington, N.H., pleaded guilty before U.S. District Judge Joseph N. Laplante in U.S. District Court for the District of New Hampshire to making false statements.

 

According to information contained in plea documents, from May 2004 until the present, Reyna worked in various capacities at the National Passport Center in Portsmouth, N.H., including most recently as a passport specialist. Reyna admitted she had access to official State Department computer databases in the regular course of her employment, including the Passport Information Electronic Records System (PIERS), which contains, among other data, all imaged passport applications dating back to 1994. The imaged passport applications on PIERS contain, among other things, a photograph of the passport applicant as well as certain personal information including the applicant’s full name, date and place of birth, current address, telephone numbers, parent information, spouse’s name and emergency contact information. These confidential files are protected by the Privacy Act of 1974, and access by State Department employees is strictly limited to official government duties.

 

In pleading guilty, Reyna admitted that between May 2004 and February 2008, she logged onto the PIERS database and viewed the passport applications of more than 500 celebrities, actors, reality television contestants, television personalities, musicians, models, athletes, and members of these individuals’ families, including their children, and other individuals identified in the press. Reyna admitted that she had no official government reason to access and view these passport applications, but that her sole purpose in accessing and viewing these passport applications was idle curiosity. She also admitted that, upon being sent an e-mail from State Department officials investigating her illegal use of PIERS and being confronted with numerous occasions on which she had viewed the passport applications of celebrities, she lied when she responded that she did not recall any of the occasions.

 

To date, 10 current or former State Department employees or contractors, including Reyna, have pleaded guilty in this continuing investigation.

 

This case is being prosecuted by Trial Attorney Timothy J. Kelly of the Criminal Division’s Public Integrity Section. The case is being investigated by the State Department Office of Inspector General.

WASHINGTON– Robert Jackson, 37, of Ruston, La., was sentenced to 12 months in federal prison for placing a hangman’s noose under the carport of the home of a Honduran immigrant who moved to Ruston from New Orleans in the aftermath of Hurricane Katrina. Jackson was also sentenced to one year of supervised release upon his release from prison. Today’s sentence was handed down by U. S. Magistrate Judge Karen L. Hayes in Monroe, La.

Jackson entered a guilty plea on June 24, 2010, to violating the Fair Housing Act by intimidating and interfering with another’s housing rights because of race.  According to court testimony, the victim and her children arrived home on June 13, 2008, and found a hangman’s noose suspended from a bird-feeder underneath the carport of her home.  Jackson admitted that he hung the noose in order “to send a message” to African-American males who visited the victim’s home.

“A noose is an unmistakable symbol of hate in our country, and using this symbol to intimidate a family will not be tolerated.” said Thomas E. Perez, Assistant Attorney General of the Civil Rights Division. “The Justice Department will vigorously prosecute those who resort to violent acts motivated by hate.”

“When a noose is used to interfere with federally protected rights, it is a crime which will be prosecuted by this office” said Stephanie Finley, U.S. Attorney for the Western District of Louisiana.  “The victim and her family sought nothing more than to live in their home peacefully. Everyone should feel safe in their homes without being subjected to hateful acts.” 

The case was investigated by the FBI, Monroe Resident Agency; and was prosecuted by Assistant U.S. Attorney Mary Mudrick and Trial Attorney Myesha Braden of the Civil Right Division of the Department of Justice.

WASHINGTON – Today, Department of Justice Attorney General Eric Holder and Department of Health and Human Services (HHS) Secretary Kathleen Sebelius visited Brooklyn, N.Y., where they participated in the third Regional Health Care Fraud Prevention Summit. The summits bring together a wide array of federal, state and local partners, beneficiaries, providers and other interested parties to discuss innovative ways to eliminate fraud within the U.S. health care system. The summits are part of a larger effort on behalf of the Obama Administration to root out waste, fraud and abuse within the U.S. health care system.

“Here in New York and in communities across the country, health-care fraud schemes are being aggressively and permanently shut down. That’s in large part because of the great work being led by the Health Care Fraud Prevention and Enforcement Action Team,” said Attorney General Holder. “Through this initiative, we are working in partnership with government, law enforcement and industry leaders to protect taxpayer dollars, control health-care costs and ensure the strength and integrity of our most essential health-care programs. Simply put, we have taken our fight against health-care fraud to a new level. And I am committed to continued collaboration, vigilance and progress.”

“Today, we continue to work with patients to protect their information, with providers to strengthen screening standards, and with private insurers to share strategies about how to prevent fraud,” said HHS Secretary Kathleen Sebelius. “The Affordable Care Act gives us new resources to eliminate waste and kick criminals out of the health care system. As long as we continue to aggressively put these tools to work preventing and prosecuting fraud, we can continue to protect and strengthen Medicare’s future.”

In addition to remarks by Attorney General Holder and Secretary Sebelius, the summit featured four educational panels aimed at identifying best practices for providers, law enforcement and beneficiaries in preventing health care fraud. The HHS Office of the Inspector General (OIG) also introduced a new tool for medical students called, “A Roadmap for New Physicians: Avoiding Medicare and Medicaid Fraud Abuse.”  The new program will go out to medical school across the country and explains the laws that apply to physicians so they can comply with federal law, avoid liability and spot signs of potential fraud. The “Roadmap” is available at www.oig.hhs.gov/fraud/PhysicianEducation/.

The recently enacted Affordable Care Act provides additional tools and resources to fight fraud in the health care system by providing an additional $350 million over the next 10 years through the Health Care Fraud and Abuse Control Account. The act toughens sentencing for criminal activity, enhances screenings and enrollment requirements, encourages increased sharing of data across government, expands overpayment recovery efforts and provides greater oversight of private insurance abuses.  For information on the 2009 Health Care Fraud and Abuse Control Program Report, please visit: www.justice.gov/dag/pubdoc/hcfacreport2009.pdf.

The Affordable Care Act also includes tools and resources to help states reduce improper payments through the establishment of recovery audit contractors (RACs).  Today, the Centers for Medicare & Medicaid Services expects to propose regulations outlining steps that states need to take to implement these Affordable Act provisions. Information about the Medicaid RACs can be found at www.cms.gov/apps/media/press_releases.asp and www.stopmedicarefraud.gov. 

Investments in fraud detection and enforcement pay for themselves many times over, and the administration’s tough stance against fraud is already yielding results. In FY 2009, anti-fraud efforts put $2.51 billion back in the Medicare Trust Fund, resulting from civil recoveries, fines in criminal matters and administrative recoveries. This was a $569 million, or 29 percent, increase over FY 2008. In FY 2009, more than $441 million in federal Medicaid money was returned to the treasury, a 28 percent increase from FY 2008.  Most recently, in FY 2010, the department obtained settlements and judgments of more than $2.5 billion in False Claims Act matters alleging health care fraud. This is more than ever before obtained in a single year and represents a 66 percent increase over FY 2009 in which $1.68 billion was obtained.

New York City is responsible for many of these recoveries. On Oct.13, 2010, more than 70 defendants were indicted in the largest Medicare fraud scheme ever perpetrated by a single criminal enterprise. The defendants are alleged to have participated in various health care fraud-related crimes involving more than $163 million in fraudulent billing. On July 16, 2010, more than 22 defendants were charged in Brooklyn for their alleged participation in schemes to submit fraudulent claims totaling nearly $80 million. These arrests were part of a larger, nationwide takedown that resulted in the indictment of more than 90 individuals.

The summits are part of the overall joint health care fraud fighting effort undertaken jointly by the Department of Justice and the Department of Health and Human Services through the Health Care Fraud Prevention and Enforcement Action Team (HEAT). As one part of HEAT’s efforts, Medicare Fraud Strike Force operations have expanded from South Florida and Los Angeles to a total of seven health care fraud hot spots including Houston; Detroit; Brooklyn; Baton Rouge, La.; and Tampa, Fla. The strike force is a partnership between the Criminal Division’s Fraud Section, U.S. Attorneys’ Offices, HHS-OIG, FBI and other federal, state and local law enforcement partners.

On June 8, 2010, President Obama announced this nationwide series of regional fraud prevention summits as part of a multi-faceted effort to crack down on health care fraud. The New York summit was the third in a series, with additional summits to follow in the coming months in Detroit, Boston, Philadelphia and Las Vegas. Previous summits were held in Miami (July 16, 2010) and Los Angeles (Aug. 26, 2010).

WASHINGTON – The Department of Justice announced today that another of its components, the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), implemented the Unified Financial Management System (UFMS), a core centralized accounting system that improves internal controls and standardizes data.

ATF is the second department law enforcement organization to convert to UFMS as the financial system of record. The Drug Enforcement Administration (DEA) implemented UFMS in January 2009, following a pilot deployment to the Justice Management Division’s (JMD) Asset Forfeiture Management Staff. UFMS now serves more than 2,500 Department of Justice users worldwide.

The ATF implementation was completed on schedule and on budget, employing a two-phased approach to minimize risk and capitalize on lessons learned from earlier implementations. More than 95 percent of ATF’s requirements were met by the standard processes, interfaces and reports already designed and available in the department’s foundation build of UFMS. As a result, the initial design and development was done on time, and deployed to many users.

The department shares the Office of Management and Budget (OMB)’s goal to reduce the risks and costs of implementing federal financial management systems. The most critical department business need for core accounting functionality is delivered by UFMS, implemented in phases across components with defined milestones, the department said.

The implementation of UFMS, based on CGI Federal’s Momentum 6.3, is a collaborative effort by JMD and ATF with the systems integrator, IBM.

For more information on the department’s UFMS program, visit: www.justice.gov/jmd/ufms/overview.htm

WASHINGTON – A global freight forwarding company, as well as five oil and gas service companies and subsidiaries, have all agreed to resolve investigations of Foreign Corrupt Practices Act (FCPA) violations, the Department of Justice and U.S. Securities and Exchange Commission (SEC) announced today. The companies have agreed to pay a total of $156,565,000 in criminal penalties. Also today, the SEC announced its settlements with these companies, which involve civil disgorgement, interest and penalties totaling approximately $80 million. The matters stem from an investigation that focused on allegations of foreign bribery in the oil field services industry.

In documents filed in U.S. District Court for the Southern District of Texas, Panalpina World Transport (Holding) Ltd., a global freight forwarding and logistics services firm based in Basel, Switzerland, and its U.S.-based subsidiary, Panalpina Inc., admitted that the companies, through subsidiaries and affiliates (collectively "Panalpina"), engaged in a scheme to pay bribes to numerous foreign officials on behalf of many of its customers in the oil and gas industry. They did so in order to circumvent local rules and regulations relating to the import of goods and materials into numerous foreign jurisdictions. Panalpina admitted that between 2002 and 2007, it paid thousands of bribes totaling at least $27 million to foreign officials in at least seven countries, including Angola, Azerbaijan, Brazil, Kazakhstan, Nigeria, Russia and Turkmenistan. Also today, Panalpina’s customers, including Shell Nigeria Exploration and Production Company Ltd. (SNEPCO), Transocean Inc. and Tidewater Marine International Inc., admitted that the companies approved of or condoned the payment of bribes on their behalf in Nigeria and falsely recorded the bribe payments made on their behalf as legitimate business expenses in their corporate books, records and accounts.

As part of the agreed resolution, the department today filed a criminal information charging Panalpina World Transport with conspiring to violate and violating the anti-bribery provisions of the FCPA. The department and Panalpina World Transport agreed to resolve the charges by entering into a deferred prosecution agreement. The department also filed a criminal information charging Panalpina Inc. with conspiring to violate the books and records provisions of the FCPA and with aiding and abetting certain customers in violating the books and records provisions of the FCPA. Panalpina Inc. has agreed to plead guilty to the charges. The agreements require the payment of a $70.56 million criminal penalty.

A criminal information was also filed today charging SNEPCO, a Nigerian subsidiary of Royal Dutch Shell plc (collectively "Shell"), with conspiring to violate the anti-bribery and books and records provisions of the FCPA, and with aiding and abetting a violation of the books and records provisions. Royal Dutch Shell is the owner of a global group of energy and petrochemicals companies. The charges relate to approximately $2 million SNEPCO paid to its subcontractors with the knowledge that some or all of the money would be paid as bribes to Nigerian customs officials by Panalpina to import materials and equipment into Nigeria. To resolve the matter, the department and Shell have entered into a deferred prosecution agreement that requires, among other things, SNEPCO to pay a $30 million criminal penalty.

Transocean Inc., a Caymans Island subsidiary of Transocean Ltd. (collectively "Transocean"), was charged today in a criminal information with conspiring to violate the anti-bribery and books and records provisions of the FCPA; violating the anti-bribery provision of the FCPA; and aiding and abetting the violation of the books and records provisions of the FCPA. Transocean Ltd. is a global provider of offshore oil drilling services and equipment based in Vernier, Switzerland. The charges relate to approximately $90,000 in bribes paid by Transocean Inc.’s freight forwarding agents in Nigeria to Nigerian customs officials to circumvent Nigerian customs regulations regarding the import of goods and materials and the import of Transocean’s deep-water oil rigs into Nigerian waters. The department and Transocean have agreed to enter into a deferred prosecution agreement that requires, among other things, Transocean Inc. to pay a $13.44 million criminal penalty.

The department also filed a criminal information charging Tidewater Marine International Inc., a Cayman Island subsidiary of Tidewater Inc. (collectively "Tidewater"), with conspiring to violate the anti-bribery and books and records provisions of the FCPA, and with violating the books and records provisions of the FCPA. Tidewater Inc. is a global operator of offshore service and supply vessels for energy exploration headquartered in New Orleans. The charges filed against Tidewater Marine relate to approximately $160,000 in bribes paid through its employees and agents to tax inspectors in Azerbaijan to improperly secure favorable tax assessments and approximately $1.6 million in bribes paid through Panalpina to Nigerian customs officials to induce the officials to disregard Nigerian customs regulations relating to the importation of vessels into Nigerian waters. To resolve the matter, the department and Tidewater have entered into a deferred prosecution agreement that requires, among other things, Tidewater Marine to pay a $7.35 million criminal penalty.

Also in documents filed in U.S. District Court for the Southern District of Texas, Pride International Inc., a Houston-based corporation, and Pride Forasol S.A.S., a wholly owned French subsidiary of Pride International (collectively "Pride"), admitted that Pride paid a total of approximately $800,000 in bribes directly and indirectly to government officials in Venezuela, India and Mexico. According to court documents, the bribes were paid to extend drilling contracts for three rigs operating offshore in Venezuela; to secure a favorable administrative judicial decision relating to a customs dispute for a rig imported into India; and to avoid the payment of customs duties and penalties relating to a rig and equipment operating in Mexico. During the course of the investigation, Pride provided information and substantially assisted in the investigation of Panalpina.

Pride International was charged in a criminal information filed today with conspiring to violate the anti-bribery and books and records provisions of the FCPA; violating the anti-bribery provisions of the FCPA; and violating the books and records provisions of the FCPA. The department and Pride International agreed to resolve the charges by entering into a deferred prosecution agreement. The department also filed a criminal information charging Pride Forasol with conspiring to violate the anti-bribery provisions of the FCPA; violating the anti-bribery provisions of the FCPA; and aiding and abetting the violation of the books and records provisions of the FCPA. Pride Forasol has agreed to plead guilty to the charges. The agreements require the payment of a $32.625 million criminal penalty.

Under the terms of the respective three-year deferred prosecution agreements, Panalpina World Transport, Shell, Pride International, Transocean and Tidewater are required to fully cooperate with U.S. and foreign authorities in any ongoing investigations of the companies’ corrupt payments. In addition, each of these companies is required to implement and adhere to a set of enhanced corporate compliance and reporting obligations.

Also announced today, the department and Noble Corporation, a Swiss corporation, reached an agreement in which Noble Corporation admitted that it had paid approximately $74,000 to a Nigerian freight forwarding agent, acknowledged that certain employees knew that some of the payments would be passed on as bribes to Nigerian customs officials, and admitted that the company falsely recorded the bribe payments as legitimate business expenses in its corporate books, records and accounts.

As part of the non-prosecution agreement entered into with the government, Noble will pay a $2.59 million criminal penalty. The non-prosecution agreement recognizes Noble’s early voluntary disclosure, thorough self-investigation of the underlying conduct, full cooperation with the department and extensive remedial measures undertaken by the company. As a result of these factors, among others, the department agreed not to prosecute Noble or its subsidiaries for the bribe payments, provided that Noble satisfies its ongoing obligations under the agreement.

The corporate resolutions announced today not only hold these companies accountable for the criminal conduct set forth in these charging instruments and agreements, but they also reflect the department giving appropriate and meaningful credit to these companies to the extent that they have voluntarily self-disclosed their conduct and commensurate with the quality and extent of their cooperation.

In related civil enforcement actions brought by the SEC today, Panalpina Inc. agreed to pay approximately $11.3 million in disgorgement of profits; Royal Dutch Shell and a U.S. subsidiary, Shell International Exploration and Production Inc., agreed to pay approximately $18.1 million in disgorgement of profits and prejudgment interest; Transocean agreed to disgorge approximately $7.2 million in profits and prejudgment interest; Tidewater Inc. agreed to pay approximately $8.3 million in disgorgement of profits, prejudgment interest and civil penalties; Pride International agreed to pay approximately $23.5 million in disgorgement of profits and prejudgment interest; Noble Corporation agreed to pay approximately $5.5 million in disgorgement of profits and prejudgment interest; and GlobalSantaFe Corp. agreed to pay approximately $5.85 million in disgorgement of profits and prejudgment interest.

These cases were prosecuted by Senior Trial Attorney Stacey K. Luck of the Criminal Division’s Fraud Section. Assistant Chief Adam G. Safwat assisted in the prosecution of the matters. The FBI’s Washington Field Office and Houston Field Office assisted in these investigations.

The department acknowledges and expresses its appreciation for the significant assistance provided by the staff of the SEC during the course of these investigations.

The court documents are available at: www.justice.gov/opa/opa_documents.htm.