District Not Recorded
The source did not name an office we could identify. These records remain unassigned rather than guessed.
MS-13 Gang Leader Pleads Guilty to Racketeering Offenses Including the Murder of a WitnessRead the Press Release
WASHINGTON - Juan Carlos Moreira, aka “Stokey” and “Stocky,” 30, a native of El Salvador who resided in Silver Spring, Md., pleaded guilty today to conspiracy to commit murder in aid of a racketeering enterprise known as MS-13, conspiracy to participate in racketeering, murder in aid of racketeering, witness tampering murder and assault with a dangerous weapon in aid of racketeering.
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 Roberto L. Hylton of the Prince George’s County Police Department; Special Agent in Charge Richard A. McFeely of the FBI; Special Agent in Charge William Winter of U.S. Immigration and Customs Enforcement; Chief J. Thomas Manger of the Montgomery County Police Department; and Chief Darien L. Manley of the Maryland National Capital Park Police.
According to Moreira’s plea agreement, he was a leader of the Sailor Locos Salvatruchos Westside (SLSW) clique of La Mara Salvatrucha, also known as MS-13, a gang composed primarily of immigrants or descendants of immigrants from El Salvador, with members operating throughout Prince George’s County and Montgomery County, Md., and elsewhere inside and outside of the United States. Moreira was born in El Salvador where he was “jumped in” to the SLSW clique. In 1998, Moreira entered the United States illegally and, along with four other people, founded the SLSW clique in Maryland in the summer of 2000. From that time until the summer of 2003, Moreira held the leadership position of “First Word” of the Maryland SLSW clique, which required him to lead clique meetings, represent the clique at general and regional meetings, direct the activities of the clique and pay dues.
According to the statement of facts, Moreira and other members of SLSW stabbed an MS-13 member from a Virginia clique on Jan. 1, 2003, after Moreira and the other MS-13 member had a verbal confrontation at a party.
Moreira also admitted that in the early months of 2003, he and the Sailors clique possessed a MAC-90 automatic assault rifle, as well as 7.62 mm ammunition for the rifle. On April 9, 2003, Moreira sold the rifle for $1,500 to an undercover law enforcement agent.
According to the plea agreement, MS-13 members Nelson Bernal and Randy Calderon murdered a suspected rival gang member, Eliuth Madrigal, in Moreira’s apartment in Silver Spring on Nov. 22, 2003. Moreira was in an upstairs bedroom at the time of the murder. When Moreira was informed of the murder, he ordered Calderon and Bernal to remove the body from the apartment and led the group in cleaning up the murder scene. Moreira later attempted to cover up the murder by painting the walls and changing the carpet in the apartment, where Madrigal had been stabbed repeatedly.
Shortly after the Madrigal murder, and still on Nov. 22, 2003, Moreira directed Bernal and Calderon to accompany him to the apartment of Israel Ramos-Cruz aka Taylor, who held the “First Word” leadership position of the Sailors clique at the time. After arriving at the residence, Moreira and Ramos-Cruz had a private discussion in the kitchen area while the others were in the living room, then returned to the living room and told Calderon that he and others were to paint MS-13 graffiti in celebration of Calderon’s murder of Madrigal. Ramos-Cruz gave Calderon a can of blue spray paint and instructed another member of the Sailors clique, Santos Maximino Garcia, aka “Curley,” to drive Moreira and Calderon to their destination. After Garcia and Calderon left the apartment, Ramos-Cruz gave Moreira a handgun. Moreira directed Garcia to take them to an area behind a store in Mount Rainier, Md., where Sailors members had previously spray-painted graffiti. Moreira and Calderon exited the vehicle and a short time later Moreira fired a single shot into Calderon’s head, killing him. According to the statement of facts, Moreira and Ramos-Cruz later made statements to the effect that Calderon had to be killed because he would not have been tough and would have told police about the Madrigal murder.
On Jan. 5, 2005, Moreira and Omar Vasquez aka Duke, a fellow Sailors member, were involved in a fight with members of a rival gang at a McDonald’s restaurant in Alexandria, Va. Moreira and Vasquez lost the fight and Moreira admitted that in response, on Jan. 21, 2005, he and multiple other MS-13 members went in search of the rival gang involved in the fight. They drove to an apartment building in Alexandria, Va., where they saw a group of youths that they believed included a member of the rival gang that had fought with Moreira earlier in the month. Moreira and another MS-13 member approached the group and each fired multiple shots at the group, wounding three juvenile males, one of whom died as a result of multiple gunshot wounds.
Chief U.S. District Judge Deborah K. Chasanow scheduled sentencing for Sept. 14, 2010, at 9:30 a.m. The parties have agreed that a sentence of life in prison is the appropriate disposition of this case. As part of the plea agreement, the government has withdrawn its notice of intent to seek the death penalty against Moreira.
Israel Ramos Cruz, aka “Taylor,” aka “Sastre,” 33, Garcia, 33, and Vasquez, 32, were convicted at trial. Ramos Cruz and Vasquez were sentenced to life in prison and Garcia was sentenced to 32 years in prison. Bernal, 29, of Hyattsville, Md., pleaded guilty to charges related to his role in the gang; a sentencing date for Bernal has not been set.
To date, 51 MS-13 members have been charged in the District of Maryland with various federal offenses; 26 members have been convicted at trial or pleaded guilty to RICO charges and 19 have pleaded guilty to other charges, primarily immigration or gun violations. Four defendants have been sentenced to life in prison.
Attorney General Breuer and U.S. Attorney Rosenstein and Assistant praised ATF’s RAGE Task Force, and thanked Prince George’s County State’s Attorney Glenn F. Ivey and Montgomery County State’s Attorney John McCarthy for the assistance that they and their offices provided.
The case was prosecuted by Assistant U.S. Attorneys Robert K. Hur and William D. Moomau, Trial Attorney Michael Warbel of the Criminal Division’s Capital Case Unit, currently on detail to the Criminal Division’s Gang Unit; and James M. Trusty, Principal Deputy Chief for Litigation of the Gang Unit.
Jury Awards $115,000 to Victims of Housing DiscriminationRead the Press Release
WASHINGTON – A federal jury in Detroit today returned a $115,000 verdict against an Ypsilanti, Mich., man for sexually harassing female tenants in his capacity as a property manager, the Justice Department announced today. The jury also found the property owner and his company liable for the illegal harassment.
The lawsuit, filed in U.S. District Court in Detroit, alleged that Glenn Johnson subjected female tenants to discrimination on the basis of sex, including severe, pervasive and unwelcome sexual harassment, in violation of the federal Fair Housing Act. The complaint also alleged that Ronnie Peterson and First Pitch Properties LLC, the owners of the properties, are liable for Johnson’s discriminatory conduct.
“Civil rights laws in this country – including the Fair Housing Act – seek to ensure that all individuals may live free from discrimination and harassment,” said Thomas E. Perez, Assistant Attorney General for Civil Rights. “Today’s jury verdict reminds landlords and rental agents that tenants should never be subjected to sexual harassment and that the Justice Department will vigorously fight to protect tenants from illegal discrimination.”
Over the course of a six day trial, the United States presented evidence that Glenn Johnson subjected six women to severe and pervasive sexual harassment, ranging from unwelcome sexual comments and sexual advances, to requiring sexual favors in exchange for their tenancy. One woman testified that Johnson refused to give her keys to her apartment until she agreed to have sex with him. Another woman testified that she had sex with Johnson at least 20 times because he threatened that the owner would evict her if she did not.
The United States also presented evidence that Washtenaw County Commissioner Ronnie Peterson, who owned the properties, knew that Johnson was sexually harassing tenants but did nothing to stop it. One woman testified that she complained in person to Peterson about Johnson’s conduct yet Johnson continued to handle properties for Peterson for nearly two more years.
“Today’s verdict sends a message to landlords and rental agents that they cannot abuse their positions and sexually harass tenants,” said U.S. Attorney for the Eastern District of Michigan Barbara L. McQuade. “Women should be safe from sexual harassment in their own homes.”
Compensatory and punitive damages in the amount of $115,000 will be divided among the six female tenants whom the jury found were victims of the harassment. The United States will file a post-trial motion seeking civil penalties against the three defendants as well as comprehensive injunctive relief. This case was referred to the Department of Justice by the Fair Housing Center of Southeastern Michigan.
Fighting illegal discrimination in housing is a top priority of the Justice Department. The federal Fair Housing Act prohibits discrimination in housing on the basis of race, color, religion, sex familial status, national origin and disability. More information about the Civil Rights Division and the laws it enforces is available at www.usdoj.gov/crt. Individuals who believe that they have been victims of housing discrimination or have information related to this lawsuit can call the Housing Discrimination Tip Line at 1-800-896-7743, e-mail the Justice Department at [email protected] or contact the Department of Housing and Urban Development at 1-800-669-9777.Estonian Hacker Extradited to the United States to Face Computer Hacking ChargesRead the Press Release
WASHINGTON - Sergei Tšurikov, 26, of Tallinn, Estonia, has been extradited to the United States to face charges of hacking into a computer network operated by an Atlanta-based credit card processing company, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division and U.S. Attorney Sally Quillian Yates of the Northern District of Georgia. Tšurikov was arraigned today before U.S. Magistrate Judge E. Clayton Scofield III in the Northern District of Georgia.
Tšurikov; Viktor Pleshchuk, 29, of St. Petersburg, Russia; Oleg Covelin , 29, of Chişinãu, Moldova; and a person known only as "Hacker 3" were charged in a Nov. 10, 2009, indictment with conspiracy to commit wire fraud, wire fraud, conspiracy to commit computer fraud, computer fraud and aggravated identity theft. The indictment also charged Igor Grudijev, 32; Ronald Tsoi, 32; Evelin Tsoi, 21; and Mihhail Jevgenov, 34; each of Tallinn, Estonia, with access device fraud offenses.
"Computer hackers who steal from American financial networks must be held accountable for their crimes, whether they operate here or abroad," said Assistant Attorney General Breuer. "The Department of Justice, working hand in hand with our international law enforcement partners, is committed to vigorously prosecuting these crimes and to ensuring that these criminals are extradited and brought to justice."
"In November 2008, in just one day, an American credit card processor was hacked in perhaps the most sophisticated and organized computer fraud attack ever conducted. Almost exactly one year later, the leaders of this attack were charged," said U.S. Attorney Yates. "With cooperation from law enforcement partners around the world, and most particularly in Estonia, we have now extradited to Atlanta one of the leaders of this ring. This success would not have been possible without the efforts of the victim, and unprecedented cooperation from various law enforcement agencies worldwide."
According to court documents, in November 2008, Pleshchuk, TšurikovandCovelin allegedly obtained unauthorized access into the computer network of RBS WorldPay, the U.S. payment processing division of the Royal Bank of Scotland Group PLC, located in Atlanta. The indictment alleges that the group used sophisticated hacking techniques to compromise the data encryption that was used by RBS WorldPay to protect customer data on payroll debit cards. Payroll debit cards are used by various companies to pay their employees. By using a payroll debit card, employees are able to withdraw their regular salaries from an ATM.
Once the encryption on the card processing system was compromised, the hacking ring allegedly raised the account limits on compromised accounts, and then provided a network of "cashers" with 44 counterfeit payroll debit cards, which were used to withdraw more than $9 million from over 2,100 ATMs in at least 280 cities worldwide, including cities in the United States, Russia, Ukraine, Estonia, Italy, Hong Kong, Japan and Canada. The $9 million loss occurred within a span of less than 12 hours.
The hackers then allegedly sought to destroy data stored on the card processing network in order to conceal their hacking activity. The indictment alleges that the "cashers" were allowed to keep 30 to 50 percent of the stolen funds, but transmitted the bulk of those funds back to Tšurikov, Pleshchuk and other co-defendants, using means such as WebMoney accounts and Western Union. Throughout the duration of the cash-out, Pleshchuk and Tšurikov allegedly monitored the fraudulent ATM withdrawals in real-time from within the computer systems of RBS WorldPay. Upon discovering the unauthorized activity, RBS WorldPay immediately reported the breach, and has substantially assisted in the investigation.
Tšurikov also distributed fraudulently obtained debit card account numbers and PIN codes to Grudijev, who, in turn, allegedly distributed the information to defendants Ronald Tsoi, Evelin Tsoi and Jevgenov in Estonia. Together, Ronald and Evelin Tsoi and Mihhail Jevgenov allegedly withdrew approximately $289,000 in U.S. funds from ATMs in Tallinn, Estonia.
"Complex cyber based criminal investigations such as this are becoming all too prevalent. The advances in technology, while aiding the corporate world and the consumer, also aid the criminal in conducting well coordinated fraud or theft based schemes, often across international borders," said Atlanta FBI Special Agent in Charge Brian D. Lamkin. "The FBI extends its gratitude to those international partners who assisted not only with this investigation but also with the extradition to the United Statesof one of its chief ring leaders in this multimillion dollar, multi-national theft ring."
The indictment charging Tšurikov and his co-defendants seeks forfeiture of over $9.4 million of proceeds of the crimes.
Tšurikov, Pleshchuk, Covelin, and "Hacker 3" each face a maximum sentence of up to 20 years in prison for conspiracy to commit wire fraud and for each wire fraud count; up to five years for conspiracy to commit computer fraud; up to five or 10 years for each count of computer fraud; a two year mandatory minimum for aggravated identity theft; and fines up to $3.5 million dollars. The charges against Grudijev, the Tsois, and Jevgenov carry a maximum of up to 15 years in prison for each count and a fine of up to $250,000.
An indictment is merely an accusation and is not evidence of guilt. The defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
The early detection of fraudulent ATM withdrawal activities in Tallinn, Estonia, led to an immediate response by the Estonian Central Criminal Police. Their investigative efforts led to the prompt identification of Tšurikov, Grudijev, the Tsois, and Jevgenov. Cooperation between the Hong Kong Police Force and the FBI also led to a parallel investigation, resulting in the identification and arrest of two individuals who were responsible for withdrawing RBS WorldPay funds from ATM terminals in Hong Kong. The Netherlands Police Agency National Crime Squad High Tech Crime Unit and the Netherlands National Prosecutor’s Office provided key assistance in the investigation.
Since the United States indictment was announced in November 2009, Tšurikov, Grudijev, the Tsois and Jevgenov have been convicted in Estonia of fraud relating to ATM withdrawals.
This case is being prosecuted by Assistant U.S. Attorneys Lawrence R. Sommerfeld and Gerald Sachs of the Northern District of Georgia, and Assistant Deputy Chief Howard W. Cox of the Criminal Division’s Computer Crime and Intellectual Property Section. Senior Trial Attorney Deborah Gaynus of the Criminal Division’s Office of International Affairs assisted with the extradition. Assistance was also provided by Senior Trial Attorneys Betsy Burke and Judith Friedman and Trial Attorneys Blair Berman and Roman Chaban of the Office of International Affairs.
This case is being investigated by special agents of the FBI. Assistance was provided by international law enforcement partners. The U.S. Secret Service also participated in the investigation. RBS World Pay immediately reported the crime and has substantially assisted in the investigation.
Court Shuts Down Los Angeles-area Tax PreparerRead the Press Release
WASHINGTON - A federal judge in Santa Ana, Calif., has permanently barred Thanh Viet Jeremy Cao and his business, Phoenix Financial Management Group, from preparing federal tax returns, the Justice Department announced today. U.S. District Judge James V. Selna of the Central District of California entered the civil injunction order.
The court found that Cao prepared numerous federal tax returns claiming a total of over $200 million in tax refunds based on false representations of tax withholdings. The court noted that in 2010 the Internal Revenue Service (IRS) continued to receive fraudulent tax returns prepared by Cao, including a bogus $82 billion refund claim on his own 2009 income tax return.
The court barred Cao from preparing federal tax returns for others and from filing frivolous IRS tax returns and forms for himself. Cao is required to provide the government with a list of people for whom he has prepared tax returns since Jan. 1, 2005, and notify those people of the court’s order.
The court said that Cao apparently subscribes to "redemption" or "straw man" theories. The alleged basis of these frivolous theories is that in the 1930s the United States created secret accounts in the Treasury Department for each citizen. The proponents of these theories assert that they can draw on the secret Treasury account by issuing an IRS Form 1099-OID or other forms to a creditor of the citizen. Redemption scheme proponents assert that the issuance of the Form 1099-OID or some other form allows a creditor to make a claim with the Treasury Department and receive full payment of the debt.
The injunction suit against Cao was one of seven lawsuits filed last year to stop OID redemption scheme promoters.
Cao was recently indicted in Las Vegas for allegedly filing false liens against federal employees.
John DiCicco, Acting Assistant Attorney General for the Justice Department’s Tax Division, thanked Tax Division Trial Attorney John Monroe and Assistant U.S. Attorney Valerie Makarewicz, who handled the case, and Shauna Henline, of the IRS’s Small Business/Self Employed Division, who conducted the investigation.
In the past decade the Justice Department has obtained injunctions against hundreds of tax preparers and tax-fraud promoters. Information about these cases is available on the Justice Department website.
Alliance One International Inc. and Universal Corporation Resolve Related FCPA Matters Involving Bribes Paid to Foreign Government OfficialsRead the Press Release
WASHINGTON – Two foreign subsidiaries of Alliance One International Inc., a global tobacco leaf merchant headquartered in Morrisville, N.C., pleaded guilty today to violating various provisions of the Foreign Corrupt Practices Act (FCPA). In a related matter, the Department of Justice filed FCPA charges today against Universal Leaf Tabacos Ltda. (Universal Brazil), a subsidiary of Universal Corporation, which is a Virginia corporation. The resolutions were announced by Assistant Attorney General Lanny A. Breuer of the Criminal Division and U.S. Attorney Neil H. MacBride for the Eastern District of Virginia.
Alliance One International AG (AOIAG), a Swiss corporation, pleaded guilty in U.S. District Court for the Western District of Virginia in Danville, Va., to a three-count criminal information charging it with conspiring to violate the FCPA, violations of the anti-bribery provisions of the FCPA and violations of the books and records provisions of the FCPA. The charges relate to bribes paid to Thai government officials to secure contracts with the Thailand Tobacco Monopoly, a Thai government agency, for the sale of tobacco leaf. Alliance One Tobacco Osh LLC (AOI-Kyrgyzstan), a Kyrgyzstan corporation, also pleaded guilty today to a separate three-count criminal information charging the corporation with conspiracy to violate the FCPA, violations of the anti-bribery provisions of the FCPA and violations of the books and records provisions of the FCPA relating to bribes paid to Kyrgyzstan government officials in connection with its purchase of Kyrgyz tobacco.
According to court documents, Alliance One is an independent leaf tobacco merchant that purchases, processes and sells tobacco to manufacturers of consumer tobacco products worldwide. Alliance One was formed in 2005 as the result of a merger of Dimon Incorporated and Standard Commercial Corporation, both of which were wholesale leaf tobacco merchants. The guilty pleas today relate to conduct that was committed by employees and agents of foreign subsidiaries of both Dimon and Standard prior to the merger.
As part of the plea agreements, AOIAG agreed to pay a fine of $5,250,000 and AOI-Kyrgyzstan agreed to pay a fine of $4,200,000, for a total of $9.45 million in fines. Sentencing of both AOI subsidiaries has been scheduled for Oct. 21, 2010, before Senior U.S. District Court Judge Jackson L. Kiser in the Western District of Virginia. In addition, the Department of Justice and Alliance One entered into a non-prosecution agreement in which Alliance One agreed to cooperate with the ongoing investigation and to retain an independent compliance monitor for a minimum of three years to oversee the implementation of an anti-bribery and anti-corruption compliance program and to report periodically to the department.
In addition, the Department of Justice filed a two-count information in the Eastern District of Virginia charging Universal Brazil with conspiring to violate the anti-bribery provisions and books and records provisions of the FCPA, and with violating the anti-bribery provisions of the FCPA relating to bribes paid to Thailand Tobacco Monopoly employees for the sale of Brazilian tobacco. The Department of Justice also filed a plea agreement signed by Universal Brazil whereby the company admitted to the conduct contained in the charging document. In addition, Universal and the Department have entered into a separate, non-prosecution agreement. According to the plea agreement and the non-prosecution agreement, Universal Brazil has agreed to pay a $4.4 million criminal fine, and Universal and Universal Brazil have agreed to retain an independent compliance monitor for a minimum of three years to oversee the implementation of an anti-bribery and anti-corruption compliance program and to report periodically to the Department.
According to court documents, from 2000 to 2004, Dimon, Standard and Universal Brazil sold Brazilian-grown tobacco to the Thailand Tobacco Monopoly. Each of the three companies retained sales agents in Thailand, and collaborated through those agents to apportion tobacco sales to the Thailand Tobacco Monopoly among themselves, coordinate their sales prices, and pay kickbacks to officials of the Thailand Tobacco Monopoly in order to ensure that each company would share in the Thai tobacco market. Each of the companies made annual sales to the Thailand Tobacco Monopoly. To secure the sales contracts, each company admitted it paid kickbacks to certain Thailand Tobacco Monopoly representatives based on the number of kilograms of tobacco sold to the Thailand Tobacco Monopoly. To obtain these contracts, Dimon paid bribes totaling $542,590 and Standard paid bribes totaling $696,160, for a total of $1,238,750 in bribes paid to the Thailand Tobacco Monopoly officials during the course of four years. Universal Brazil admitted that the company paid approximately $697,000 in kickbacks to the Thailand Tobacco Monopoly officials. Court documents detail how the companies conspired to set the price of the tobacco sales, pay the kickbacks to the officials, and then falsely characterized the payments on each of the companies’ respective books and records as "commissions" paid to their sales agents.
In addition, according to court documents, AOI-Kyrgyzstan admitted that employees of Dimon’s Kyrgyz subsidiary paid a total of approximately $3 million in bribes from 1996 to 2004 to various officials in the Republic of Kyrgyzstan, including officials of the Kyrgyz Tamekisi, a government entity that controlled and regulated the tobacco industry in Kyrgyzstan . Also, according to court documents, the employees paid bribes totaling $254,262 to five local provincial government officials, known as "Akims," to obtain permission to purchase tobacco from local growers during the same period. In addition, the employees paid approximately $82,000 in bribes to officers of the Kyrgyz Tax Police in order to avoid penalties and lengthy tax investigations.
In related matters, Alliance One today settled a civil complaint filed by the U.S. Securities and Exchange Commission (SEC), charging Alliance One with violating the FCPA’s anti-bribery, internal controls, and books and records provisions in connection with the misconduct described in court documents. Alliance One will disgorge approximately $10 million in profits to the SEC. Also today, Universal Corporation settled a civil complaint filed by the SEC, charging Universal Leaf with violating the FCPA’s anti-bribery, internal controls, and books and records provisions in connection with the misconduct described in the court documents. Universal Leaf will disgorge approximately $4.5 million in profits to resolve the civil matter.
The Alliance One case is being prosecuted by Senior Trial Attorney John Michelich of the Criminal Division’s Fraud Section. The U.S. Attorney’s Office for the Western District of Virginia also provided assistance in the Alliance One case. The Universal Case is being prosecuted by Senior Trial Attorney Stacey Luck from the Criminal Division’s Fraud Section, with assistance from Assistant U.S. Attorney Michael S. Dry for the Eastern District of Virginia. Investigative assistance for the Universal matter was provided by the FBI’s Richmond office.
The Department of Justice and the SEC worked together to reach these global settlements. The department acknowledges and expresses its appreciation for the significant assistance provided by the staff of the SEC’s Division of Enforcement during the course of this investigation.
Virginia Man Pleads Guilty to Child Pornography ChargesRead the Press Release
WASHINGTON – A Bedford, Va., man pleaded guilty today to 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, 41, pleaded guilty in U.S. District Court for the Western District of Virginia to one count of receipt of child pornography, one count of transportation of child pornography and one count of possession of child pornography. Carter was originally indicted in January 2010 on child pornography charges.
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.
Sentencing has been set for Oct. 20, 2010. At sentencing, Carter faces a maximum sentence of 20 years in prison for each count of transporting and receiving child pornography and a maximum of 10 years in prison for possessing child pornography. He also faces forfeiture of all seized property, a maximum fine of $250,000 and the possibility of lifetime supervised release.
This case is being prosecuted by Trial Attorney Anitha S. Ibrahim of the Criminal Division’s Child Exploitation and Obscenity Section 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.
Two South Florida Residents Plead Guilty in Medicare Fraud CasesRead the Press Release
WASHINGTON – Two South Florida residents pleaded guilty today in U.S. District Court in Miami for their participation in separate Medicare fraud schemes, announced the Departments of Justice and Health and Human Services (HHS). Both individuals worked for Miami health care companies that billed the Medicare program for services that were medically unnecessary or never provided.
Gladis Badia, 40, pleaded guilty before U.S. District Court Judge Adalberto Jordan to one count of conspiracy to defraud the United States, to cause submission of false claims to Medicare, and to pay health care kickbacks; one count of conspiracy to commit health care fraud; and three counts of submitting false claims, as charged in a March 2010 indictment. In a separate case, Alain Fernandez, 47, pleaded guilty before Judge Jordan to one count of conspiracy to commit health care fraud and one count of making false statements in patient files.
According to court documents, Badia was employed by T&R Rehabilitation Professional Corp., a Miami clinic that purported to provide injection and infusion treatments to patients with HIV. Badia admitted that she created and entered false information into patient files to make it appear that patients qualified for services, when in fact, they did not. According to court documents, Badia knew Medicare would be fraudulently billed for the purported services. Badia admitted that she knew the patients did not qualify for and in some instances did not receive the HIV infusion services, and that her co-conspirators could bill Medicare for HIV infusion services three times a week, for up to three months, for each patient. Badia also admitted that the conspiracy resulted in over $13.7 million in fraudulent billing to the Medicare program.
In a separate case, Fernandez admitted that he worked for Florida Home Health Providers Inc., a Miami home health agency that purported to provide home health and therapy services to Medicare beneficiaries. Fernandez, a licensed practical nurse, admitted that he falsified patient files for Medicare beneficiaries to make it appear that they qualified for home health care and therapy services, when in fact, the beneficiaries did not qualify for and did not receive the services. Fernandez admitted that he did so in agreement with his co-conspirators so that the Medicare program could be billed for medically unnecessary services. Fernandez further admitted that as a result of his role in the scheme, Medicare was billed approximately $43,000 for purported home health care services that were not medically necessary and/or were not rendered.
Badia and Fernandez are scheduled to be sentenced on Nov. 12, 2010. Badia faces a maximum penalty of five years in prison for the conspiracy to defraud the United States count and for each false claims count, and 10 years in prison for the health care fraud conspiracy count. Fernandez faces a maximum penalty of 10 years in prison for the health care fraud conspiracy count and 5 years in prison for the false statement count.
Today’s guilty pleas were announced by Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida; John V. Gillies, Special Agent-in-Charge of the FBI’s Miami field office; and Special Agent-in-Charge Christopher Dennis of the HHS Office of Inspector General (HHS-OIG), Office of Investigations Miami office.
The cases are being prosecuted by Trial Attorneys N. Nathan Dimock, Joe Beemsterboer, Sam Sheldon and Henry Van Dyck, former Trial Attorney Michael Padula and former Special Trial Attorney Martha Talley of the Criminal Division’s Fraud Section. The cases were investigated by the FBI and HHS-OIG, and were brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida.
Since its inception in March 2007, the Medicare Fraud Strike Force operations in seven districts have obtained indictments of more than 810 individuals and organizations that collectively have billed the Medicare program for more than $1.85 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.Lobbyist Indicted for Orchestrating Illegal Campaign Contribution SchemeRead the Press Release
WASHINGTON – Paul Magliocchetti, the founder and president of PMA Group Inc. (PMA), a lobbying firm in Arlington, Va., was arrested today on charges of making illegal campaign contributions and making false statements to a federal agency, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division, U.S. Attorney Neil H. MacBride of the Eastern District of Virginia and Assistant Director Shawn Henry of the FBI’s Washington Field Office.
A federal grand jury returned the indictment on Aug. 4, 2010, which was unsealed today in U.S. District Court in Alexandria, Va., following Magliocchetti’s arrest by FBI agents. He will make an initial appearance this afternoon before U.S. Magistrate Judge T. Rawles Jones Jr., in federal court in Alexandria.
According to the indictment, Magliocchetti orchestrated a scheme to make hundreds of thousands of dollars in illegal conduit and corporate federal campaign contributions in an effort to enrich himself and PMA by increasing the firm’s influence, power and prestige among the firm’s current and potential clients, as well as among the elected public officials to whom PMA and its lobbyists sought access. The federal campaigns that received these funds were unaware of Magliocchetti’s alleged scheme.
According to the indictment, the Federal Election Campaign Act limits the amounts individuals can contribute to election campaigns and political campaign committees (PACs), and prohibits corporations from making contributions, either directly or through officers of the corporation. In order to evade the legal limits on individual contributions and the outright ban on corporate contributions, the indictment alleges that Magliocchetti caused straw donors to make contributions to scores of federal campaign committees, which in fact were actually paid for by Magliocchetti or PMA, rather than the named donor.
As alleged in the indictment, Magliocchetti concealed from the Federal Election Commission (FEC) and the public the fact that he and PMA were the true source of the funds for these illegal federal campaign contributions. At the same time, Magliocchetti allegedly ensured that he and PMA received credit for these contributions from the campaigns and candidates by, among other things, using family members, PMA employees and others associated with Magliocchetti as the conduits, and by hosting fund-raising events in which he or his associates delivered the contributions.
According to the indictment, from 2003 through 2008, Magliocchetti allegedly used personal and corporate money to advance funds to or reimburse these individuals for the contributions they made on his behalf. The funding of the conduits’ contributions took several forms, including Magliocchetti issuing personal checks and authorizing PMA to issue business checks, and to make salary and bonus payments to cover the costs of the contributions. In one instance, Magliocchetti allegedly used two acquaintances that lived near his Florida vacation home to make contributions by, among other things, designating them as members of PMA’s board of directors and paying them with PMA funds even though they lived in Florida, never worked as lobbyists and never attended PMA board meetings.
Through this scheme, Magliocchetti caused various federal campaign committees to unknowingly create and file false reports with the FEC regarding the contributions they had received. As alleged in the indictment, these reports, which the FEC made available to the public, falsely stated that the conduits had made contributions, when in fact the contributions were made by Magliocchetti or PMA.
The 11-count indictment charges Magliocchetti with four counts of making illegal campaign contributions in the name of another; four counts of making illegal campaign contributions from a corporation; and three counts of causing federal campaigns to unwittingly make false statements.
In connection with this investigation, Mark Magliocchetti pleaded guilty today before Judge Jones in U.S. District in Alexandria to making illegal corporate campaign contributions. According to court documents, Mark Magliocchetti admitted to receiving payments from an individual and a company with the understanding that those monies were to be used for federal campaign contributions. According to court documents, the amount of contributions made by Mark Magliocchetti and his wife, and funded by the individual and the company, exceeded $120,000 but was less than $200,000. Sentencing has been scheduled for Nov. 16, 2010.
This case is being prosecuted by Trial Attorneys M. Kendall Day, Justin V. Shur and Kevin O. Driscoll of the Criminal Division’s Public Integrity Section, and by Assistant U.S. Attorney Mark D. Lytle of the U.S. Attorney’s Office for the Eastern District of Virginia. The case is being investigated by the FBI.
An indictment is merely an accusation and is not evidence of guilt. The defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
Fourteen Charged with Providing Material Support to Somalia-Based Terrorist Organization Al-ShabaabRead the Press Release
WASHINGTON — The Justice Department announced that four separate indictments were unsealed today in the District of Minnesota, the Southern District of Alabama and the Southern District of California charging 14 individuals with terrorism violations for providing money, personnel and services to the foreign terrorist organization al-Shabaab.
In the Southern District of Alabama, prosecutors unsealed a superseding indictment charging Omar Shafik Hammami, a U.S. citizen and former resident of Alabama, with providing material support to al-Shabaab. Separately, prosecutors in the Southern District of California unsealed an indictment charging Jehad Serwan Mostafa, a U.S. citizen and former resident of California, with providing material support to al-Shabaab.
In the District of Minnesota, prosecutors unsealed two indictments. One indictment charges Amina Farah Ali and Hawo Mohamed Hassan with providing funds to al-Shabaab. These two defendants, who are naturalized U.S. citizens and residents of Minnesota, were arrested today. Separately, prosecutors unsealed a third superseding indictment charging 10 men with terrorism offenses for leaving the United States to join al-Shabaab. Seven of these defendants had been previously charged by either indictment or criminal complaint. The remaining three defendants had not been charged before.
The arrests and charges were announced by Attorney General Eric Holder and FBI Director Robert S. Mueller, III, as well as David Kris, Assistant Attorney General for National Security; B. Todd Jones, U.S. Attorney for the District of Minnesota; Kenyen R. Brown, U.S. Attorney for the Southern District of Alabama; and Laura E. Duffy, U.S. Attorney for the Southern District of California.
“The indictments unsealed today shed further light on a deadly pipeline that has routed funding and fighters to the al-Shabaab terror organization from cities across the United States,” said Attorney General Holder. “While our investigations are ongoing around the country, these arrests and charges should serve as an unmistakable warning to others considering joining terrorist groups like al-Shabaab – if you choose this route you can expect to find yourself in a U.S. jail cell or a casualty on the battlefield in Somalia.”
“For those who would become terrorists, these cases send a strong message,” said FBI Director Mueller. “They underscore the need for continued vigilance against those who may seek to harm us and our way of life. Our agents and analysts will continue to confront this threat with a strong and coordinated effort as we work to protect all Americans.”
Omar Hammami – Southern District of Alabama
Today in the Southern District of Alabama, prosecutors unsealed a September 2009 superseding indictment against Omar Hammami, 26, a U.S. citizen and former resident of Daphne, Alabama, also known as “Abu Mansour al-Amriki,” or “Farouk.”
The three-count indictment alleges that Hammami provided material support, including himself as personnel, to terrorists; conspired to provide material support to a designated foreign terrorist organization, al-Shabaab, and provided material support to al-Shabaab. Hammami faces a potential 15 years in prison for each of the three counts of the indictment. He is not in custody and is currently believed to be in Somalia.
Jehad Mostafa – Southern District of California
In the Southern District of California, prosecutors today unsealed an October 2009 indictment against Jehad Serwan Mostafa, 28, aka “Ahmed,” “Emir Anwar,” “Awar,” a U.S. citizen and former resident of San Diego, California.
The indictment alleges that Mostafa conspired to provide material support, including himself as personnel, to terrorists; conspired to provide material support to al-Shabaab; and provided material support to al-Shabaab. Mostafa faces a potential 15 years in prison for each of the three counts of the indictment. He is not in custody and is currently believed to be in Somalia.
Amina Ali and Hawo Hassan – District of Minnesota
Earlier today, FBI agents arrested Amina Farah Ali, 33, and Hawo Mohamed Hassan, 63, both naturalized U.S. citizens from Somalia and residents of Rochester, Minn. Each is charged in an indictment unsealed today with one count of conspiracy to provide material support to al-Shabaab from Sept. 17, 2008 through July 19, 2010. Ali is also charged in the indictment with 12 substantive counts of providing material support to al-Shabaab. Hassan is also charged with three counts of making false statements.
The indictment alleges that, as part of the conspiracy, Ali communicated by telephone with people in Somalia who requested financial assistance for al-Shabaab. Ali, Hassan and others allegedly raised money for these individuals by soliciting funds door-to-door in Somali communities in Minneapolis, Rochester and other locations in the United States and Canada. In addition, the defendants allegedly raised money by direct appeal to individuals participating in teleconferences that featured speakers who encouraged donations to support al-Shabaab. Ali also allegedly raised funds under the false pretense that such funds were for the poor and needy.
The indictment alleges that Ali and others transferred funds to al-Shabaab through the hawala money remittance system. Ali and others allegedly used false names to identify the recipients of the funds to conceal that the funds were being provided to al-Shabaab. The indictment lists 12 money transfers allegedly directed to al-Shabaab by Ali.
The indictment alleges several overt acts to carry out the fund-raising conspiracy. For example, on Oct. 26, 2008, Ali allegedly hosted a teleconference in which an unindicted co-conspirator told listeners that it was not the time to help the poor and needy in Somalia; rather the priority was to give to the mujahidin. Ali and Hassan allegedly recorded $2,100 in pledges at the conclusion of the teleconference. On Feb. 10, 2009, Ali allegedly conducted another fundraising teleconference in which she told listeners to “forget about the other charities” and focus on “the jihad.”
On July 14, 2009, the day after the FBI executed a search warrant at her home, Ali allegedly contacted an unindicted co-conspirator and said, “I was questioned by the enemy here . . . . they took all my stuff and are investigating it . . . do not accept calls from anyone.” The indictment further alleges that when Hassan was questioned by agents in an investigation involving international terrorism, she made false statements.
The defendants are expected to make their initial appearances later today in federal court in Minneapolis. If convicted, they face a potential 15 years in prison on the conspiracy count. Ali also faces a potential 15 years in prison on each material support count, and Hassan also faces a potential eight years in prison on each false statement count.
Third Superseding Indictment – District of Minnesota
In addition to the two arrests, prosecutors in the District of Minnesota also unsealed a July 2010 third superseding indictment that charges Abdikadir Ali Abdi, 19, a U.S. citizen; Abdisalan Hussein Ali, 21, a U.S. citizen; Cabdulaahi Ahmed Faarax, 33, a U.S. citizen; Farah Mohamed Beledi, 26; and Abdiweli Yassin Isse, 26. These defendants are charged with, among other things, conspiring to and providing material support to al-Shabaab and conspiring to kill, maim and injure persons abroad. Faarax and Isse had been charged in a criminal complaint previously.
Five other defendants who had been previously charged by indictment are named in the third superseding indictment. They are Ahmed Ali Omar, 27; Khalid Mohamud Abshir, 27; Zakaria Maruf, 31; Mohamed Abdullahi Hassan, 22; and Mustafa Ali Salat, 20. These defendants are charged with conspiracies to provide material support to terrorists and foreign terrorist organizations; conspiracy to kill, kidnap, maim and injure persons abroad; possessing and discharging a firearm during a crime of violence; and solicitation to commit a crime of violence.
The unsealed indictment alleges that the 10 defendants provided financial support and personnel, including themselves as fighters, both to a conspiracy to kill abroad and to the foreign terrorist organization al-Shabaab. Specifically, the indictment alleges that the five newly-added defendants traveled to Somalia in 2008 and 2009. In addition, the charges allege that Faarax solicited Salah Osman Ahmed, Shirwa Ahmed (now deceased) and Kamal Said Hassan to provide support to al-Shabaab, and that Faraax made false statements to the FBI in a matter involving international terrorism. The indictment also alleges that, in October 2009, Beledi committed passport fraud.
An affidavit previously filed in the case alleges that, in the fall of 2007, Faarax and others met at a Minneapolis mosque to telephone co-conspirators in Somalia to discuss the need for Minnesota-based co-conspirators to go to Somalia to fight. The affidavit also alleges that Faarax attended a subsequent meeting in Minneapolis where he encouraged others to fight in Somalia and told them how he had experienced true brotherhood while fighting jihad in Somalia. Faarax was later interviewed three times by authorities and each time denied knowing anyone who had fought in Somalia or encouraging anyone to fight in Somalia.
The affidavit also alleges that Abdiweli Yassin Isse encouraged others to travel to Somalia to fight. At a gathering of co-conspirators, Isse purportedly described his plans to wage “jihad” against Ethiopians in Somalia, and later raised money to purchase airline tickets for others to travel to Somalia for the same purpose. In raising this money, he allegedly misled community members into thinking they were contributing money to send young men to Saudi Arabia to study the Koran. The 10 defendants charged in the third superseding indictment are not in custody and are believed to be overseas.
The charges against all the defendants in Minnesota stem from an ongoing, two-year investigation into the recruitment of persons from the United States to train with or fight for al-Shabaab. To date, a total of 19 persons have been charged in the District of Minnesota in indictments or criminal complaints that have been unsealed. Nine of these Minnesota defendants have been arrested in the United States or overseas, five of whom pleaded guilty. The remaining defendants are at large and believed to be abroad.
The case in the Southern District of Alabama is being investigated by the FBI’s Joint Terrorism Task Force in Mobile, Ala., and is being prosecuted by Assistant U.S. Attorney Sean P. Costello, of the U.S. Attorney’s Office for the Southern District of Alabama, and Trial Attorney Sharon Lever of the Counterterrorism Section of the Justice Department’s National Security Division.
The case in the Southern District of California is being investigated by the FBI’s San Diego Joint Terrorism Task Force and is being prosecuted by Assistant U.S. Attorneys William P. Cole and Shane P. Harrigan of the U.S. Attorney’s Office for the Southern District of California, and Trial Attorney Sharon Lever of the Counterterrorism Section of the Justice Department’s National Security Division.
The cases in the District of Minnesota are being investigated by the FBI’s Minneapolis Joint Terrorism Task Force, with the assistance of the Dutch KLPD; the Dutch Ministry of Justice; the Justice Department’s Office of International Affairs; the State Department, including U.S. Embassies in the United Arab Emirates and Yemen; the Hague in the Netherlands; and the Department of Defense. The cases are being prosecuted by Assistant U.S. Attorneys W. Anders Folk and Jeffrey S. Paulsen, of the U.S. Attorney’s Office for the District of Minnesota, and Trial Attorneys William M. Narus and Steven Ward of the Counterterrorism Section of the Justice Department’s National Security Division.
The public is reminded that an indictment contains mere allegations. A defendant is presumed innocent until he or she pleads guilty or is proven guilty at trial.
North Carolina Businessman Pleads Guilty to Role in Foreign Bribery SchemeRead the Press Release
WASHINGTON – A former Kyrgyzstan country manager for a U.S. tobacco company has pleaded guilty for his role in a conspiracy to pay bribes to officials of the Republic of Kyrgyzstan, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division, and Shawn Henry, Assistant Director in Charge of the FBI’s Washington Field Office.
Bobby Jay Elkin Jr., 50, of Washington, N.C., pleaded guilty yesterday to a one-count criminal information charging him with conspiracy to violate the Foreign Corrupt Practices Act (FCPA) before Senior U.S. District Judge Jackson L. Kiser for the Western District of Virginia in Danville, Va. At sentencing, Elkin faces a maximum penalty of five years in prison and a $250,000 fine. A sentencing date has not been scheduled.
Elkin admitted to conspiring to make corrupt payments totaling more than $3 million to foreign government officials in Kyrgyzstan from 1996 through 2004 for the purpose of securing business advantages for his employer. Elkin admitted he made cash payments to officials of the Kyrgyz tobacco authority, an instrumentality of the government, in order to obtain export licenses and to gain access to government-owned tobacco processing facilities. According to court documents, the payments were based on the number of kilograms of Kyrgyz tobacco Elkin’s employer purchased and processed for export. In addition, Elkin admitted he made cash payments to local government officials, known as Akims, to obtain permission to purchase tobacco from local growers, and to the Kyrgyz Tax Inspection Police to influence their decisions and avoid lengthy tax inspections and penalties.
The case is being prosecuted by Senior Trial Attorney John A. Michelich of the Criminal Division’s Fraud Section. The Criminal Division’s Office of International Affairs also provided assistance in this matter. The case was investigated by the FBI’s Washington Field Office.
Massachusetts Bay Transportation Authority to Spend Millions to Reduce Commuter Train Emissions in Clean Air Act SettlementRead the Press Release
WASHINGTON – In response to a federal enforcement action for excessive train engine idling, the Massachusetts Bay Transportation Authority (MBTA) and the Massachusetts Bay Commuter Railroad Company (MBCR) will spend more than $2 million to reduce diesel locomotive emissions throughout the MBTA’s commuter rail system, the Justice Department and Environmental Protection Agency (EPA) announced today. Under a consent decree lodged in federal court, MBTA and MBCR will spend over $1 million on anti-idling equipment at all end-of-line stations and maintenance facilities, and will spend another $1 million on ultra-clean diesel fuel for all trains in the commuter rail system for two years.
These emission-reducing measures are the result of a federal enforcement action brought by the Justice Department on behalf of EPA in response to MBTA’s and MBCR’s excessive locomotive idling at the Widett Circle layover facility in South Boston and the Greenbush line station in Scituate, Mass. Neighboring residents have complained of excessive train idling at both locations.
To settle the enforcement action, MBTA and MBCR will:
- Install or upgrade electric plug-in stations as anti-idling equipment to supply all commuter locomotives with electric auxiliary power to prevent excess idling during train layovers;
- Switch to cleaner burning, ultra-low sulfur diesel fuel for all trains on the MBTA’s commuter rail lines for a two year period at an estimated cost of $1 million;
- Install new, less polluting auxiliary engines on fourteen commuter locomotives by no later than December 2012; and
- Pay a $225,000 fine.
The anti-idling measures, clean diesel fuel switch and new auxiliary engines required by the federal settlement will have significant clean air benefits. For example, a reduction in commuter locomotive idling by even one hour per day per locomotive, together with the fuel switch and new engines, could result in yearly carbon dioxide emission reductions of an estimated 800 tons, nitrogen oxides reductions of nearly 170 tons, carbon monoxide reductions of about 80 tons, particulate reductions of 23 tons, and sulfur dioxide reductions of 1-2 tons.
MBTA owns 80 commuter locomotives used on 13 commuter rail routes in Eastern Massachusetts. Since 2003, MBCR has managed and operated the commuter train system for the MBTA. The system includes 14 layover facilities where the locomotives and passenger cars are parked and serviced between runs. Electric plug-in stations at these facilities supply the trains with electric power for lights and ventilation. If a plug-in is not available, a train on layover idles its auxiliary diesel engine to supply any needed electric power.
Under today’s settlement, which must be approved by the court, commuter train layovers will only be allowed at locations where there are sufficient electric plug-in stations for all trains.
The Massachusetts locomotive idling regulation, a federally-enforceable state regulation, prohibits all unnecessary diesel locomotive idling for more than 30 minutes. According to a 2008 notice of violation issued by EPA, MBTA and MBCR committed 33 violations of this regulation at Widett Circle and Greenbush in three months. At Widett, the average idling time during the violations was just under four hours (234 minutes).
“This precedent-setting, multi-million dollar settlement for train idling is appropriate in light of the defendants’ conduct,” said Ignacia S. Moreno, Assistant Attorney General for the Justice Department's Environment and Natural Resources Division. “The settlement will provide immediate and lasting environmental benefits to the residents of Eastern Massachusetts, particularly those in environmental justice communities.”
“It is imperative that anti-idling laws are followed, given the proximity of these layover facilities to densely-populated communities and environmental justice neighborhoods,” said Curt Spalding, regional administrator of EPA’s New England Office. “Diesel pollution can be very harmful, especially to sensitive populations such as the young, elderly and people who suffer from asthma.”
Diesel emissions contribute to a number of serious air pollution problems such as smog, acid rain and increased carbon concentrations in the atmosphere. Diesel exhaust contains fine particles that can cause lung damage and aggravate respiratory conditions, such as asthma and bronchitis. Based upon human and laboratory studies, there is also considerable evidence that diesel exhaust is a likely carcinogen.
Since 2002, EPA has brought more than a dozen federal enforcement cases to stop diesel engine idling violations in Mass., Conn. and R.I. Most of the cases have involved diesel truck and bus idling, including a judicial settlement announced in July 2010 against National Car Rental for shuttle bus idling at two airports. Only Massachusetts and Rhode Island have federally-enforceable locomotive idling regulations, and today’s action marks the first time EPA and DOJ have sued a railroad for excessive idling violations.
The consent decree, lodged in the U.S. District Court, will be subject to a 30-day public comment period and approval by the federal court. Once it is published in the Federal Register, a copy of the consent decree and instructions on how to comment will be available on the Justice Department Web site at www.usdoj.gov/enrd/Consent_Decrees.html.
Diesel exhaust and anti-idling guidelines ( www.epa.gov/ne/eco/diesel )
Fourth Chi Mei Executive Agrees to Plead Guilty and Serve Jail Time for Participating in Global LCD Price-Fixing ConspiracyRead the Press Release
WASHINGTON – A former executive from Chi Mei Optoelectronics Corporation has agreed to plead guilty and to serve jail time in the United States for participating in a global conspiracy to fix the price of thin-film transistor-liquid crystal display (TFT-LCD) panels, the Department of Justice announced today.
According to a one-count felony charge filed in U.S. District Court in San Francisco, Chen-Lung Kuo conspired with others to suppress and eliminate competition by fixing the prices of TFT-LCD panels. Kuo, a resident of Taiwan and the former vice president of sales of Chi Mei, participated in the conspiracy from as early as April 2004, to on or about Dec.1, 2006.
Under his plea agreement, which is subject to court approval, Kuo has agreed to serve nine months in jail, to pay a $35,000 criminal fine and to assist the department in its ongoing TFT-LCD investigation.
TFT-LCD panels are used in computer monitors and notebooks, televisions, mobile phones and other electronic devices. By the end of the conspiracy period, the worldwide market for TFT-LCD panels was valued at $70 billion. Companies directly affected by the LCD price-fixing conspiracy are some of the largest computer and television manufacturers in the world, including Apple, Dell and Hewlett Packard.
The department charged that Kuo participated in a conspiracy in which the participants met and agreed to charge prices of TFT-LCD panels at certain predetermined levels. The participants in that conspiracy also issued price quotations in accordance with the agreements reached and exchanged information on the sales of TFT-LCD panels for the purpose of monitoring adherence to the agreed-upon prices, the department said.
As a result of this investigation, more than $890 million in criminal fines have been obtained to date. Including today’s filing, 19 executives and eight companies have been charged in the department’s ongoing investigation into price fixing in the LCD industry.
Kuo is 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.
Today’s charge is the result of a joint investigation by the Department of Justice Antitrust Division’s San Francisco Field Office and the FBI in San Francisco.
Anyone with information concerning illegal conduct in the TFT-LCD 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.
Minneapolis Police Officer Charged with Civil Rights ViolationRead the Press Release
WASHINGTON – A federal grand jury in St. Paul, Minn., returned an indictment today charging Minneapolis Police Officer Jason Andersen, 33, with a felony civil rights crime for assaulting a juvenile during an arrest , the Justice Department announced.
Andersen was charged with one count of willfully depriving a juvenile arrestee of his constitutional right to be free from the unreasonable use of force by a police officer If convicted, Andersen faces a maximum punishment of 10 years in prison for this charge.
According to the indictment, Andersen kicked the juvenile during his arrest, which resulted in bodily injury to the victim. The charge set forth in the indictment is merely an accusation and the defendant is presumed innocent until proven guilty.
This case was investigated by the FBI. The case is being prosecuted by Special Litigation Counsel Gerard Hogan and Trial Attorney Nicole Lee Ndumele from the Justice Department’s Civil Rights Division.
Justice Department Enters Settlement with Rainbow River Child Development Center on Care for Children with DiabetesRead the Press Release
WASHINGTON – The Department of Justice and the Rainbow River Child Development Center of Hawthorne, Calif., have joined in a settlement agreement to assure that children with diabetes will receive appropriate care so that they may participate fully in the programs and activities at the center.
The settlement was entered today to resolve a complaint filed with the department by parents of a five-year-old boy with Type I diabetes. The complaint alleged that Rainbow River refused in 2008 to provide proper diabetes care management. Under the previous policies and practices, a child’s parent was required to come at lunch and snack times to supervise the child’s use of an insulin pump. It was also alleged that the center would not allow the child to participate in field trips. Insulin pumps are commonly used in lieu of routine insulin injections, especially by children. In many cases, pumps offer a better quality of insulin administration and the ease of use.
The complaint was filed under Title III of the Americans with Disabilities Act (ADA), which covers public accommodations including private child care centers. Rainbow River denies any allegations of ADA violation, and has cooperatively joined in the settlement of these claims.
"A child with Type I diabetes should never be subjected to discrimination and denied the opportunity to participate in the same activities as all other children. Child care centers must make reasonable modifications of policies to permit children with disabilities to participate fully in the programs it offers, unless doing so would cause a fundamental alteration in the program or service," said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. "We commend Rainbow River for working cooperatively with the department on today’s settlement, and for welcoming children and families of children with disabilities."
People interested in finding out more about the ADA or the agreement can call the Justice Department’s toll-free ADA Information Line at 800-514-0301 or 800-514-0383 (TTY), or access its ADA website at www.ada.gov.
Founder and Principal Manager of Genesis Fund Sentenced to 70 Months in Prison on Tax ChargesRead the Press Release
WASHINGTON - John S. Lipton, formerly of Mission Viejo and Laguna Hills, Calif., was sentenced by U.S. District Judge Dale S. Fischer in Los Angeles to 70 months in prison, the Justice Department and Internal Revenue Service (IRS) announced today. The court also ordered Lipton to pay restitution of $2,915,427.16 to the IRS.
On April 8, 2010, Lipton pleaded guilty to conspiracy to defraud the United States and tax evasion. Lipton and several co-defendants were indicted on charges stemming from the operation of the Genesis Fund, a bogus foreign currency exchange investment fund that operated as a Ponzi scheme from May 1998 to June 2002 and received investments of millions of dollars. The remaining defendants are scheduled to begin trial in April 2011.
According to the indictment, the defendants falsely claimed that investors received monthly returns of four percent, when investments were actually used to make "profit" distributions to defendants and early investors. Lipton was one of the founding members of the Genesis Fund and its principal manager. The defendants promoted the Genesis Fund as having no reporting obligations to the IRS. Bank accounts in the names of trusts and offshore bank accounts were allegedly used to receive distributions from the Genesis Fund that were not reported to the IRS. Some of the defendants allegedly created "disclosed" and "undisclosed" Genesis Fund accounts for themselves and certain fund investors in order to conceal from the IRS all but a small portion of the fund’s distributions. In addition, some Genesis Fund investors were allegedly advised to create nominee offshore corporations and bank accounts to receive distributions from the fund.
The indictment further alleged that to obscure the operations of the fund and to limit scrutiny of its operations by investors and the government, the defendants caused the Genesis Fund to maintain no financial statements or other statements of operation. Additionally, in or about April 2000, to conceal the true nature of its operations from investors and the government, Genesis Fund’s administrative operations were relocated from Anaheim, Calif., to Costa Rica. At about the same time, paper records were moved to Costa Rica and electronic data on computers was destroyed.
In his plea agreement, Lipton admitted that he used, and conspired with others to use, foreign trusts, corporations, and bank accounts, to receive distributions from the Genesis Fund and did not report these distributions to the IRS. Lipton also admitted that he directed the transfer of approximately 19 boxes of Genesis Fund documents to Costa Rica, rather than turn them over in response to a grand jury subpoena. Lipton acknowledged that he did not file federal individual income tax returns from 1989 through 2005.
Three defendants, Richard B. Leonard, Victor H. Preston and Teresa R. Vogt have entered guilty pleas in this matter. The trial of the remaining four defendants on tax fraud and conspiracy charges is set for April 2011. A separate trial on charges related to the Ponzi scheme is set for September 2011.
"The IRS will continue to aggressively investigate individuals who use offshore bank accounts and abusive trusts arrangements to conceal investment income and evade taxes," said Victor S.O. Song, Chief, IRS Criminal Investigation.
Acting Assistant Attorney General John A. DiCicco commended the special agents from IRS Criminal Investigation who investigated the case, as well as Tax Division trial attorneys Lori A. Hendrickson, Ellen M. Quattrucci, Danny N. Roetzel and Matthew J. Kluge, who are prosecuting the case. Acting Assistant Attorney General DiCicco also thanked the U.S. Attorney’s Office in Los Angeles for its valuable support throughout the litigation of this matter.
Owners of “Super Soda Center Stores” in Maryland and Delaware Settle Allegations of Underground Storage Tank ViolationsRead the Press Release
PHILADELPHIA The United States has settled alleged violations of federal and state underground storage tank (UST) regulations at 17 gas stations in Delaware and Maryland formerly owned by Duncan Petroleum Corp., the Justice Department, Environmental Protection Agency (EPA) and U.S. Attorney’s Office for the District of Delaware announced today.
The case stems from the alleged failure of Robert M. Duncan and Duncan Petroleum Corp. to comply with the regulations governing underground storage tanks at Duncan’s 17 gas stations in Delaware and Maryland and for failing to perform compliance tasks under a 2006 Consent Agreement. Duncan had agreed to complete the tasks in order to bring five of the Maryland gas stations into compliance with the underground storage tank regulations.
"These defendants violated their obligation to bring several large underground storage tanks into compliance with the law," said Ignacia S. Moreno, Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. "The precedent-setting $2 million civil penalty that they will pay in this settlement is appropriate in light of the unacceptable risk created by their misconduct."
"Properly maintaining underground storage tanks is essential to protecting our soil and valuable groundwater resources," said EPA mid-Atlantic Regional Administrator Shawn M. Garvin. "Today’s settlement shows that EPA and DOJ will not hesitate to pursue companies that violate the law."
"By refusing to comply with the terms of the consent decree defendants endangered the lives of citizens of Delaware and Maryland," said David C. Weiss, U.S. Attorney for the District of Delaware. "This settlement holds defendants accountable and demonstrates that such misconduct will not be tolerated."
Robert M. Duncan will pay a $2 million penalty for these violations on or before Dec. 15, 2010, plus interest beginning on August 2, the date the Stipulation and Order was filed with the court.
The civil judicial complaint was filed on Dec. 17, 2008, under the Resource Conservation and Recovery Act alleging violations of Delaware and Maryland UST regulations requiring that owners and operators of petroleum UST systems: 1) provide release detection for underground storage tanks; 2) provide release detection for underground piping; 3) provide and annually test line leak detectors; 4) provide overfill protection; 5) investigate and report suspected releases; 6) provide and test cathodic protection systems; 7) inspect impressed current protection systems; and 8) maintain corrosion protection on out-of-service UST systems. The company failed to comply with one or more of these requirements at each of the facilities.
The eight Delaware gas stations were located in Seaford, Bridgeville, Rehoboth, Dover, and Camden. In Maryland, there were nine locations in Salisbury, Snow Hill, Cambridge, Chestertown, Easton, Federalsburg and Preston.
With millions of gallons of gasoline, oil and other petroleum products stored in underground storage tanks throughout the U.S., leaking tanks are a major source of soil and groundwater contamination. EPA and state UST regulations are designed to reduce the risk of underground leaks and to promptly detect and properly address leaks which do occur, thus minimizing environmental harm and avoiding the costs of major cleanups.
For more information on EPA’s underground storage tank program, visit www.epa.gov/swerust1/.
Department of Justice and USDA Announce Registration for August 27 Livestock Workshop in ColoradoRead the Press Release
WASHINGTON — The Department of Justice and the U.S. Department of Agriculture (USDA) announced today additional details for the August 27, 2010, public workshop in Fort Collins, Colo., which will examine competition in the livestock industry. The workshop will be held at Colorado State University, the main ballroom of the Lory Student Center, 1101 Centre Avenue Mall, Fort Collins.
This is the fourth 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. The second workshop focused on issues in the poultry industry and was held in Normal, Ala. The third workshop focused on issues in the dairy industry and was held in Madison, Wis.
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 Colorado workshop should register at https://regstg.com/Registration/RegForm.aspx?rid=d91b419b-cf8e-43e9-8f20-919ca06562dc&action=addhttp://www.conferences.colostate.edu/LiveStockWorkshop.
The workshop will begin with opening remarks from U.S. Attorney General Eric Holder and U.S. Agriculture Secretary Tom Vilsack. After opening remarks, Attorney General Holder and Secretary Vilsack will participate in a roundtable discussion with Assistant Attorney General for Antitrust Christine Varney. Federal and state officials from Colorado have been invited to participate in the workshop. There will be public testimony from those attending the workshop and panels will feature ranchers, academics, processors and other industry representatives.
Additional details on the schedule and panelists will be provided at a later date. For further information, including submitted public comments and transcripts 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].
The Justice Department and USDA will hold the next public workshop on margins in agriculture in Washington in December.
MEDIA CONTACTS:
U.S. Department of Justice
Office of Public Affairs
Gina Talamona
202-514-2007
U.S. Department of Agriculture
Office of Communications
Jim Brownlee
202-720-4623
Department of Justice Releases First National Strategy for Child Exploitation Prevention and InterdictionRead the Press Release
WASHINGTON – Attorney General Eric Holder today announced that the Department of Justice released its first-ever National Strategy for Child Exploitation Prevention and Interdiction. The strategy also provides the first-ever comprehensive threat assessment of the dangers facing children from child pornography, online enticement, child sex tourism, commercial sexual exploitation and sexual exploitation in Indian Country, and outlines a blueprint to strengthen the fight against these crimes. The strategy builds upon the department’s accomplishments in combating child exploitation by establishing specific, aggressive goals and priorities and increasing cooperation and collaboration at all levels of government and the private sector.
As part of the overall strategy, the U.S. Marshals Service is launching a nationwide operation targeting the top 500 most dangerous, non-compliant sex offenders in the nation. Additionally, the department will create a national database to allow federal, state, tribal, local and international law enforcement partners to deconflict their cases with each other, engage in undercover operations from a portal facilitated or hosted by the database, share information and intelligence and conduct analysis on dangerous offenders and future threats and trends. The department also created 38 additional Assistant U.S. Attorney positions to devote to child exploitation cases, and over the coming months will work to fill the vacancies and train the new assistants in this specialized area.
"Although we’ve made meaningful progress in protecting children across the country, and although we’ve brought a record number of offenders to justice in recent years, it is time to renew our commitment to this work. It is time to intensify our efforts," said Attorney General Holder. "This new strategy provides the roadmap necessary to do just that – to streamline our education, prevention and prosecution activities; to improve information sharing and collaboration; and to make the most effective use of limited resources. Together, we are sending an important message – that the U.S. government, and our nation’s Department of Justice, has never been more committed to protecting our children and to bringing offenders to justice."
"Thanks to law enforcement operations like Operation Nest Egg and Operation Achilles, the department and our law enforcement partners have brought thousands of offenders to justice in the last year. But this progress is only a start," said Acting Deputy Attorney General Gary G. Grindler. "Tangible steps outlined in the National Strategy will bring our fight to the next level."
The strategy first analyzed the threat to our nation’s children and described the current efforts at all levels of the government against this threat. Since FY 2006, the Department of Justice has filed 8,464 Project Safe Childhood (PSC) cases against 8,637 defendants. These cases include prosecutions of online enticement of children to engage in sexual activity, interstate transportation of children to engage in sexual activity, production, distribution and possession of child pornography and other offenses.
Despite vigorously fighting all aspects of child exploitation, the department recognized that more work remains to be done. To that end, the department’s strategy lays out goals to increase coordination among the nation’s investigators, better train investigators and prosecutors, advance law enforcement’s technological capabilities and enhance research to inform decisions on deterrence, incarceration and monitoring. The strategy also includes a renewed commitment to public awareness and community outreach.
As part of its public outreach efforts, the department is re-launching ProjectSafeChildhood.gov, PSC’s public website. PSC is a department initiative launched in 2006 that aims to combat the proliferation of technology-facilitated sexual exploitation crimes against children. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, PSC marshals federal, state, tribal 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 regarding the National Strategy to Combat Child Exploitation, Prevention and Interdiction, please visit: www.projectsafechildhood.gov/docs/natstrategyreport.pdf
Virginia Man Pleads Guilty to Child Pornography ChargesRead the Press Release
WASHINGTON – A Virginia man pleaded guilty today to charges related to his 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.
Gary Lee Rimmer, 55, was indicted in June 2010 and charged with one count of possession of child pornography and one count of distribution of child pornography. The defendant pleaded guilty to both counts in U.S. District Court of the Western District of Virginia.
At the 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 cellular phone conversations, Rimmer portrayed himself as a 20-year-old man named "Jason." The defendant posted images of a young man and claimed they were of himself. 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 via the Internet. When investigators searched the contents of Rimmer’s computer, they found images of child pornography, including images of the victim from Florida with the items he previously mailed to her. Search terms associated with child pornography were also found on the defendant’s 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 Yahoo Messenger.
At sentencing, scheduled for Nov. 1, 2010, the defendant faces a maximum penalty of 20 years in prison for the distribution count and 10 years in prison for the possession count. Each count carries a maximum fine of up to $250,000.
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 is being 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 Florida Sheriff’s Department.
Two Brothers Plead Guilty in Miami HIV Infusion Medicare Fraud SchemeRead the Press Release
WASHINGTON – Two brothers pleaded guilty today in U.S. District Court in Miami for participating in a $13.7 million HIV infusion Medicare fraud scheme, announced the Departments of Justice and Health and Human Services (HHS).
Rolando Nogueira, 48, and his brother, Jose Nogueira, 52, pleaded guilty before U.S. District Court Judge Adalberto Jordan in the Southern District of Florida to one count of conspiracy to defraud the United States, to cause submission of false claims to Medicare, and to pay health care kickbacks; one count of conspiracy to commit health care fraud; and three counts of submitting false claims. Rolando and Jose Nogueira were originally charged in a March 2010 indictment. At sentencing, scheduled for Nov. 5, 2010, the Nogueiras each face a maximum penalty of five years in prison for the conspiracy to defraud the United States count and each false claims count, and 10 years in prison for the health care fraud conspiracy count.
According to plea documents, Rolando Nogueira was an owner and operator of T&R Rehabilitation Professional Corp., a Miami clinic that purported to provide expensive injection and infusion treatments to patients with HIV. Jose Nogueira worked at T&R. Rolando Nogueira admitted at his plea hearing that he agreed with his co-defendants and others to have them enlist patient recruiters and patients, among others, into a scheme to defraud Medicare. Rolando and Jose Nogueira admitted that they knew the patients at T&R did not need and/or did not receive the purported services, and that it would be necessary to pay kickbacks and bribes to the patients so that T&R could bill the Medicare program for the HIV infusion services that were not medically necessary and/or were not provided.
The defendants admitted that from approximately January 2003, through approximately July 2005, they and their co-defendants caused T&R to submit fraudulent claims to the Medicare program in the amount of approximately $13.7 million. Medicare paid approximately $4.1 million of these fraudulent claims.
Co-defendants Modesto and Victoria de la Vega pleaded guilty on July 23, 2010, and are scheduled to be sentenced on Nov. 5, 2010. Co-defendant Gladis Badia is awaiting trial.
Today’s guilty pleas and sentences were announced by Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida; John V. Gillies , Special Agent-in-Charge of the FBI’s Miami field office; and Special Agent-in-Charge Christopher Dennis of the HHS Office of Inspector General (HHS-OIG), Office of Investigations Miami office.
The cases were prosecuted by attorneys from the Criminal Division’s Fraud Section, including Trial Attorneys N. Nathan Dimock, Joseph Beemsterboer, and former Trial Attorney Michael Padula. The cases were investigated by the FBI and HHS-OIG and were brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division's Fraud Section and the U.S. Attorney's Office for the Southern District of Florida.
Since its inception in March 2007, the Medicare Fraud Strike Force operations in seven districts have obtained indictments of more than 810 individuals and organizations that collectively have billed the Medicare program for more than $1.85 billion. In addition, HHS's Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.
Northwest Airlines LLC Agrees to Plead Guilty for Fixing Prices on Air Cargo ShipmentsRead the Press Release
WASHINGTON — Northwest Airlines LLC has agreed to plead guilty and to pay a $38 million criminal fine for its role, through Northwest Airlines Cargo, in a conspiracy to fix prices in the air transportation industry, the Department of Justice announced today.
According to a one-count felony charge filed today in U.S. District Court for the District of Columbia, Northwest Airlines Cargo, which is no longer in operation, engaged in a conspiracy to fix the cargo rates charged to customers in the United States and elsewhere for international air cargo shipments from at least July 2004 until at least February 2006. Under the plea agreement, which is subject to court approval, Northwest Airlines LLC has agreed to cooperate with the department’s ongoing antitrust investigation.
Air cargo carriers transport a variety of cargo shipments, such as heavy equipment, perishable commodities and consumer goods, on scheduled international flights. During the time period covered by the felony charge, Northwest Airlines Cargo earned more than $80 million from its air cargo services between the United States and Japan.
According to the charge, Northwest Airlines Cargo carried out the conspiracy by agreeing during meetings, conversations and communications on certain components of cargo rates for shipments on routes between the United States and Japan and by levying cargo rates in accordance with the agreements reached. As a part of the conspiracy, Northwest Airlines Cargo monitored and enforced adherence to the agreed-upon rates.
Northwest Airlines LLC is charged with price fixing in violation of the Sherman Act, which carries a maximum fine of $100 million for corporations. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.
Including today’s charge, as a result of this investigation, a total of 16 airlines have pleaded guilty or have agreed to plead guilty in the Justice Department’s ongoing investigation into price fixing in the air transportation industry. To date, more than $1.6 billion in criminal fines have been imposed and four executives have been sentenced to serve prison time. Charges are pending against a fifth executive.
The airlines that have pleaded guilty as a result of the department’s ongoing investigation into the air transportation industry are: British Airways Plc, Korean Air Lines Co. Ltd., Qantas Airways Limited, Japan Airlines International Co. Ltd., Martinair Holland N.V., Cathay Pacific Airways Limited, SAS Cargo Group A/S, Société Air France, Koninklijke Luchtvaart Maatschappij N.V. (KLM Royal Dutch Airlines), EL AL Israel Airlines Ltd., LAN Cargo S.A., Aerolinhas Brasileiras S.A., Cargolux Airlines International S.A., Nippon Cargo Airlines Co. Ltd. and Asiana Airlines Inc. Airline executives who have pleaded guilty as a result of the investigation are Bruce McCaffrey of Qantas, Keith Packer of British Airways, Franciscus Johannes de Jong of Martinair and Timothy Pfeil of SAS. On Aug. 12, 2009, Jan Lillieborg, a citizen and resident of Sweden and former vice president of global sales for SAS Cargo, was indicted for participating in a conspiracy to suppress and eliminate competition by allocating customers and coordinating surcharge increases for international air shipments to and from the United States.
Today’s charge is the result of a joint investigation into the air transportation industry being conducted by the Antitrust Division’s National Criminal Enforcement Section, the FBI’s Washington Field Office, the Department of Transportation’s Office of Inspector General and the U.S. Postal Service’s Office of Inspector General. Anyone with information concerning price fixing or other anticompetitive conduct in the air transportation industry is urged to call the Antitrust Division’s National Criminal Enforcement Section at 202-307-6694 or visit www.justice.gov/atr/contact/newcase.htm or call the FBI’s Washington Field Office, Northern Virginia Resident Agency at 202-278-2000.
Louisiana Vessel Company Pleads Guilty to Dumping Oil on High Seas, Will Pay $2.1 Million in PenaltiesRead the Press Release
WASHINGTON – Offshore Vessels LLC (OSV) has entered a plea of guilty to knowingly discharging waste oil from one of its vessels, in violation of the Act to Prevent Pollution from Ships (APPS), the Justice Department announced today. OSV, based in Louisiana, entered the plea in U.S. District Court in New Orleans.
OSV owned and operated the R/V Laurence M. (L.M.) Gould (R/V Gould). The R/V Gould is a 2,966 gross ton American-flagged vessel that served on a contractual basis as an ice-breaking research vessel for the National Science Foundation on research voyages to and from Antarctica. OSV admitted that on or about Sept. 8, 2005, on the high seas, R/V Gould crew members knowingly discharged oily wastewater from the bilge tank of the ship overboard, in violation APPS. Regulations under APPS require that oily wastewater be discharged only after it has been processed through an oily water separator, to ensure that the concentration of oil in the wastewater is below the legal limit.
OSV’s plea agreement with the Justice Department requires the company to pay a criminal fine of $1.75 million and remit a payment of $350,000 as community service to the National Marine Sanctuary Foundation, to be used for study of polar water pollution and protection of vulnerable marine ecosystems in the Antarctic region. OSV will also serve a period of probation for three years, during which it will be subject to an Environmental Compliance Plan.
"The Department of Justice will vigorously pursue all vessel companies, American and foreign, that deliberately violate the laws enacted to protect the oceans," said Assistant Attorney General Ignacia S. Moreno. "This case is particularly egregious because the defendant is an American company tasked with providing passage for the National Science Foundation in order for it to perform important environmental research in Antarctica."
The case was investigated by the U.S. Coast Guard Investigative Service and was prosecuted by Senior Trial Attorney Daniel Dooher, Environmental Crimes Section, Department of Justice; and Assistant U.S. Attorney Dorothy Manning Taylor, Eastern District of Louisiana.
Freight Forwarder Panalpina Pays U.S. $375,000 to Settle False Claims and Kickbacks AllegationsRead the Press Release
WASHINGTON. – Swiss-based freight forwarder Panalpina Inc. has agreed to pay the United States $375,000 to settle allegations that the company paid kickbacks to employees of Kellogg Brown & Root Inc. (KBR). The kickbacks, which related to shipping orders issued in connection with KBR’s contract with the U.S. Army to provide logistical support to the U.S. military in Iraq and elsewhere, are alleged to violate the False Claims Act and the Anti-Kickback Act.
The settlement resolves allegations that Panalpina provided kickbacks in the form of meals, drinks, tickets to sports events and golf outings to employees in KBR’s transportation department in order to gain favorable treatment on subcontracts under the U.S. military’s Logistics Civil Augmentation Program (LOGCAP III). Under the LOGCAP III contract, KBR was to provide logistical support for U.S. military operations abroad.
Under the terms of the settlement agreement, Panalpina will pay the United States $375,000 to resolve its potential liability under the False Claims Act, the Anti-Kickback Act and common law theories. The United States previously settled claims with Eagle Global Logistics (EGL) (now CEVA) related to the same lawsuit for a total of $5,050,000. The government is continuing to pursue claims against KBR based on its employees taking kickbacks from Panalpina and EGL.
"Kickbacks paid for military subcontracts undermine the integrity of the government contracting process," said Tony West, Assistant Attorney General for the Civil Division of the Department of Justice. "We will not tolerate wartime profiteering at the expense of taxpayer dollars."
The allegations against Panalpina were originally raised in the course of a lawsuit filed in the U.S. District Court for the Eastern District of Texas by David Vavra and Jerry Hyatt, two individuals active in the air cargo business. Under the qui tam, or whistleblower, provisions of the False Claims Act, private citizens can file suit on behalf of the United States and share in any recovery. Vavra and Hyatt will receive $78,750 as their share of this settlement.
This case is being prosecuted as part of a National Procurement Fraud Initiative. In October 2006, the Deputy Attorney General announced the formation of a National Procurement Fraud Task Force designed to promote the early detection, identification, prevention and prosecution of procurement fraud associated with the increase in government contracting activity for national security and other government programs. The Procurement Fraud Task Force is chaired by the Assistant Attorney General for the Criminal Division and includes the Civil Division, U.S. Attorneys’ Offices, the FBI, the U.S. Inspectors General community and a number of other federal law enforcement agencies. The Defense Criminal Investigative Service and FBI participated in the investigation of this matter. This case, as well as others brought by members of the task force, demonstrates the Department of Justice’s commitment to ensuring the integrity of the government procurement process.
Florida Businessman Sentenced to 57 Months in Prison for Role in Foreign Bribery SchemeRead the Press Release
WASHINGTON – A Miami businessman was sentenced today to 57 months in prison for his participation in a conspiracy to pay bribes to former officials of the Republic of Haiti, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida; and Daniel W. Auer, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation (IRS-CI) Miami Field Office.
Juan Diaz, 52, was also ordered by U.S. District Court Judge Jose E. Martinez to serve three years of supervised release following his prison term. Judge Martinez ordered Diaz to pay $73,824 in restitution and to forfeit $1,028,851. Diaz pleaded guilty on May 15, 2009, to a one-count information charging him with conspiracy to violate the Foreign Corrupt Practices Act (FCPA) and money laundering.
In his plea, Diaz admitted to conspiring to make corrupt payments to foreign government officials for the purpose of securing business advantages for three different Miami-Dade County telecommunications companies from the Republic of Haiti’s state-owned national telecommunications company, Telecommunications D’Haiti. Diaz concealed these payments in part by laundering the funds through his company, J.D. Locator Services. According to court documents, Diaz paid and concealed $1,028,851 in bribes to former Haitian government officials while serving as an intermediary for the three private telecommunications companies. One of these officials, Robert Antoine, admitted his acceptance of bribes, including bribes from Diaz and pleaded guilty on March 12, 2010, to money laundering conspiracy. Antoine was sentenced to four years in prison.
A portion of the J.D. Locator funds was also laundered by Jean Fourcand of Fourcand Enterprises, who pleaded guilty on Feb. 19, 2010, to money laundering, and was sentenced to six months in prison for his involvement in the scheme. Antonio Perez was, at times, the controller of one of the Miami-Dade County telecommunications companies. Perez pleaded guilty on April 27, 2009, to conspiring to commit FCPA violations and money laundering and is awaiting sentencing.
Joel Esquenazi and Carlos Rodriguez, the owners of one of the Miami-Dade County telecommunications companies; Jean Rene Duperval, who was director of international relations of Haiti Teleco from June 2003 to April 2004; and Duperval’s sister, Marguerite Grandison, were indicted along with Antoine on Dec. 4, 2009. Trial for these remaining defendants is scheduled to begin Dec. 6, 2010, in U.S. District Court in Miami. An indictment is merely an accusation, and defendants are presumed innocent until proven guilty beyond a reasonable doubt.
The Department of Justice is grateful to the government of Haiti for providing substantial assistance in gathering evidence during this investigation. In particular, Haiti’s financial intelligence unit, the Unité Centrale de Renseignements Financiers, the Bureau des Affaires Financières et Economiques, which is a specialized component of the Haitian National Police, and the Ministry of Justice and Public Security provided significant cooperation and coordination in this ongoing investigation.
The case was prosecuted by Assistant U.S. Attorney Aurora Fagan of the U.S. Attorney’s Office for the Southern District of Florida, Senior Trial Attorney Nicola J. Mrazek of the Criminal Division’s Fraud Section and Trial Attorney Kevin Gerrity of the Criminal Division’s Asset Forfeiture and Money Laundering Section. The Criminal Division’s Office of International Affairs also provided assistance in this matter. The case was investigated by the IRS-CI Miami Field Office.
United States Files Complaint Against Oracle Alleging Contract FraudRead the Press Release
WASHINGTON – The United States has intervened and filed a complaint under the False Claims Act against Oracle Corporation and Oracle America Inc. The government alleges that Oracle defrauded the United States on a General Services Administration (GSA) software contract that was in effect from 1998 to 2006 and involved hundreds of millions of dollars in sales.
Under the contract, GSA used Oracle’s disclosures about its commercial sales practices to negotiate the minimum discounts for government agencies who bought Oracle software. The contract required Oracle to update GSA when commercial discounts improved and extend the same improved discounts to government customers. The suit contends that Oracle misrepresented its true commercial sales practices, ultimately leading to government customers receiving deals far inferior to those Oracle gave commercial customers.
"We take seriously allegations that a government contractor has dealt dishonestly with the United States," said Tony West, Assistant Attorney General for the Civil Division of the Department of Justice. "When contractors misrepresent their business practices to the government, taxpayers suffer."
The suit was originally filed on by Paul Frascella, Senior Director of Contract Services at Oracle. The False Claims Act allows private citizens with knowledge of fraud to file whistleblower suits on behalf of the United States and share in any recovery. If the United States intervenes in the action and proves that a defendant has knowingly submitted false claims, it is entitled to recover three times the damage that resulted and a penalty of $5,500 to $11,000 per claim.
Assistant Attorney General West acknowledged the investigative efforts of the Justice Department’s Civil Division, the U.S. Attorney’s Office for the Eastern District of Virginia, and the General Services Administration’s Office of Inspector General. The Civil Division and the U.S. Attorney’s Office for the Eastern District of Virginia will litigate this matter on the government’s behalf. The suit is United States ex rel. Frascella v. Oracle Corp. et al., No. 1:07cv:529 (E.D. Va.).
This case was investigated as part of a National Procurement Fraud Initiative. In October 2006, the Deputy Attorney General announced the formation of a National Procurement Fraud Task Force designed to promote the early detection, identification, prevention and prosecution of procurement fraud associated with the increase in government contracting activity for national security and other government programs. The Procurement Fraud Task Force is chaired by the Assistant Attorney General for the Criminal Division and includes the Civil Division, the U.S. Attorneys’ Offices, the FBI, the U.S. Inspectors General community and a number of other federal law enforcement agencies. This case, as well as others brought by members of the task force, demonstrate the Justice Department’s commitment to helping ensure the integrity of the government procurement process.
Two New Orleans Police Officers Charged in Connection with the Beating Death of a CivilianRead the Press Release
WASHINGTON – Two officers with the New Orleans Police Department (NOPD) have been charged in a three-count indictment with federal crimes in connection with the beating death of civilian Raymond Robair in July 2005.
Today’s indictments were announced by Thomas E. Perez, Assistant Attorney General for the Civil Rights Division; Jim Letten, U.S. Attorney for the Eastern District of Louisiana; and David Welker, Special Agent in Charge of the FBI New Orleans Field Office.
Officer Melvin Williams is charged with violating Robair’s constitutional rights by beating him on July 30, 2005. The indictment alleges that Officer Williams kicked Robair and struck him with a baton, resulting in his death. Robair, who suffered fractured ribs and a ruptured spleen, was pronounced dead at Charity Hospital later on July 30, 2005.
The indictment also charges Williams, along with NOPD Officer Matthew Dean Moore, with obstructing justice by writing and submitting a false and inaccurate incident report regarding their interactions with Robair. Moore also faces one additional felony count, for making false statements to FBI agents in March 2010.
Williams faces a possible maximum sentence of life in prison. Moore faces a possible maximum sentence of 25 years in prison.
This case, which is ongoing, is being investigated by the New Orleans Field Office of the FBI, and is being prosecuted by Trial Attorneys Forrest Christian and Jared Fishman of the Justice Department’s Civil Rights Division, along with Assistant U.S. Attorney Edward Rivera for the Eastern District of Louisiana.
An indictment is merely an accusation, and the defendants are presumed innocent unless proven guilty.
Three Indicted for Civil Rights Conspiracy, False Statements and Perjury in Connection with Cross-burning in Athens, LouisianaRead the Press Release
WASHINGTON – A federal grand jury in Shreveport, La., returned an indictment yesterday charging Joshua James Moro, 23; Jeremy Matthew Moro, 33; and Sonya Marie Hart, 31, with offenses related to a cross-burning in Athens, La., in October 2008, near the home of an interracial couple. Another man, Daniel Danforth, was previously convicted by a federal jury for participating in the same cross-burning.
Joshua Moro was charged with one count of conspiring to interfere with another person’s civil rights. If convicted, he faces a maximum punishment of 10 years in prison for this charge. Joshua Moro, Jeremy Moro and Sonya Hart were each charged with one count each of making false statements to Special Agents of the FBI, and Joshua Moro and Sonya Hart were each charged with one count of perjury before the grand jury. The defendants face a maximum penalty of five years in prison for each of the false statements and perjury charges.
According to the indictment, between Oct. 23 and 26, 2008, Joshua Moro agreed with his cousin, Daniel Danforth, and another person known to the grand jury, to build, erect and burn a cross near the home of their cousin, the cousin’s African American boyfriend, her 11-year-old son and another relative who was believed to approve of the cousin’s interracial relationship. Specifically, Joshua Moro offered Danforth diesel fuel to use to burn the cross and sent a text message later that evening to see if Danforth and his other co-conspirator still needed the diesel. The indictment further alleges that Joshua Moro falsely denied his involvement in the cross-burning conspiracy to FBI agents and in his testimony before the grand jury. Finally, the indictment alleges that Jeremy Moro, whom Danforth invited to help burn the cross, and Sonya Hart, whose truck was used to help carry-out the cross-burning, falsely denied having any knowledge about the cross-burning.
Danforth was sentenced to 48 months in prison in May 2010 for his role in the cross-burning and attempted cover-up.
This case was investigated by the FBI. The case is being prosecuted by Assistant U.S. Attorney Mary J. Mudrick for the Western District of Louisiana and Trial Attorney Erin Aslan from the Justice Department’s Civil Rights Division.
The charges set forth in an indictment are merely accusations and the defendants are presumed innocent until proven guilty.
Promoters of Sham Tax Elimination Scheme Sentenced for Tax Fraud in FloridaRead the Press Release
WASHINGTON - Four of eight promoters of a fraudulent tax- and debt-elimination scheme have been sentenced to length prison terms for their roles in tax fraud, wire fraud and money laundering, the Justice Department and Internal Revenue Service (IRS) announced today. The remaining four will be sentenced over the next two months.
On March 31, 2010, a federal jury returned guilty verdicts against eight people, following a month-long trial in Pensacola, Fla., involving the promotion of fraudulent schemes through Pinnacle Quest International, also known as PQI and Quest International.
Arnold Ray Manansala of Renton, Wash., was sentenced to 12 years in prison for conspiracy to defraud the United States and to commit wire fraud, and conspiracy to commit money laundering. Dover Eugene Perry, also of Renton, was sentenced to 10 years in prison for conspiracy to defraud the United States and to commit wire fraud, and conspiracy to commit money laundering. Michael Guy Leonard of Troy, N.Y., was sentenced to nine years and one month in prison for conspiracy to defraud the United States and to commit wire fraud, and conspiracy to commit money laundering. Mark Daniel Leitner of Fairport, N.Y., was sentenced to five years in prison for conspiracy to defraud the United States and to commit wire fraud.
According to the evidence presented during trial, PQI was an umbrella organization for numerous vendors of tax and credit card debt elimination scams. Some of the PQI vendors, such as Southern Oregon Resource Center for Education (SORCE), sold bogus theories and strategies for tax evasion. For fees starting at $10,000, SORCE assisted its customers in the creation of a series of sham business entities in the United States and Panama. Other tax-related PQI vendors denied the legitimacy of the income tax system on various theories and provided customers with a "reliance defense" that consisted of a paper trail of frivolous correspondence which a client could allegedly use as evidence of good faith if the client were prosecuted.
At trial, the government established that other PQI vendors sold fraudulent schemes for eliminating credit card debt, the most successful of which was called Financial Solutions. Financial Solutions charged its customers thousands of dollars for a series of letters to send to credit card companies disputing the lawfulness of the underlying debt. The product was wholly ineffective, and customers typically were sued by their creditors and often forced into bankruptcy.
According to the evidence, another PQI vendor, MYICIS, operated as a sophisticated, computerized "warehouse bank." MYICIS was a single bank account in which customers pooled their money. MYICIS was promoted to PQI’s clients as a method to hide their assets from the IRS as a result of the pooled nature of the account. MYICIS had 3,000 clients and approximately $100 million in deposits over a three year period.
Evidence introduced at trial showed that PQI purported to sell only CDs and tickets to offshore conferences. However, PQI acted as a gateway to its fraudulent vendors. PQI clients seeking the tax evasion and debt elimination vendors could only access the product if they joined PQI first. The cost of membership ranged from $1,350 to $18,750, depending on the level of access. In May 2008, a federal district court issued a preliminary injunction against the promoters of Pinnacle Quest International.
"Today’s sentences send a powerful and unequivocal message to those who seek to evade and help others evade their taxes," said Acting Assistant Attorney General John A. DiCicco of the Justice Department’s Tax Division. "Those who promote tax fraud schemes will be investigated, prosecuted, and convicted, and they also face substantial prison sentences."
"Today’s sentencings serve as a reminder that IRS is committed to ensuring all taxpayers pay their fair share of taxes," said Victor S. O. Song, Chief, IRS Criminal Investigation. "There is no secret formula that can eliminate an individual’s tax obligations, and those who create elaborate schemes that have no purpose other than to mislead others and defraud the Internal Revenue Service will be prosecuted."
Mr. DiCicco thanked Department of Justice Trial Attorneys Michael Watling, Adam Hulbig and Jonathan Marx, as well as paralegal Iris Wright, for their hard work in prosecuting the case. Mr. DiCicco also thanked the team of IRS Special Agents who investigated the case, particularly Stephen Walker and Wendy Kilpatrick, for their efforts.
Miami-area Clinic Owner, Patient Recruiter, Two Nurses and Medicare Beneficiary Plead Guilty in Home Health Care Fraud SchemeRead the Press Release
WASHINGTON – Five South Florida residents pleaded guilty today in U.S. District Court in Miami for participating in a home health care fraud scheme, the Departments of Justice and Health and Human Services (HHS) announced.
Arturo Fonseca, Isis Torres, Francisco Portillo, Eduardo Romero and William Madrigal pleaded guilty before U.S. District Judge Adalberto Jordan to various health care fraud charges. The five individuals were originally charged in an indictment in December 2009.
Arturo Fonseca, 47, pleaded guilty to one count of conspiracy to commit health care fraud and five counts of soliciting and receiving health care kickbacks. At the plea hearing, Fonseca admitted to being an owner and operator of Courtesy Medical Group Inc., a purported medical clinic in Miami. In pleading guilty, Fonseca admitted that Courtesy operated in part to provide prescriptions, plans of care and medical certifications, among other things, to Miami-area home health agencies. According to court documents, Courtesy provided these medical documents so that the home health agencies could bill the Medicare program for expensive home health services and therapy for beneficiaries that did not need and in some cases did not receive the purported treatments. According to the indictment, approximately 344 prescriptions were issued through Courtesy and signed by Fonseca’s co-defendant, Dr. Fred Dweck. As a result, the Medicare program was fraudulently billed approximately $16.6 million for home health services.
Eduardo Romero, 44, pleaded guilty to one count of conspiracy to commit health care fraud, and three counts of soliciting and receiving health care kickbacks. According to plea documents, Romero admitted to being a patient recruiter for ABC Home Health Care Inc. , and Florida Home Health Care Providers Inc., two Miami-area home health care agencies. Romero admitted that in his role as a patient recruiter, he would solicit and receive kickbacks and bribes from the owners of ABC and Florida Home Health in return for providing Medicare beneficiaries that the home health agencies could use to bill the Medicare program for unnecessary home health care services. Romero also admitted to paying kickbacks and bribes to the owners and operators of Courtesy in return for the prescriptions for unnecessary home health care services. Medicare was billed approximately $391,593 for purported home health care services that were not medically necessary or were not rendered for the patients recruited by Romero and one of his co-defendants. The owners and operators of ABC and Florida Home Health pleaded guilty in a separate case and are awaiting sentencing.
Francisco Portillo, 41, and Isis Torres, 37, each pleaded guilty to one count of conspiracy to commit health care fraud and one count of making false statements in patient files. According to plea documents, Portillo and Torres were nurses and falsified patient files for ABC and Florida Home Health to make it appear that the patients qualified for home health care services, when in fact they did not qualify and in some instances never received any treatments. According to court documents, Portillo was responsible for approximately $142,000 in fraudulent Medicare billing and Torres was responsible for approximately $528,400 in fraudulent Medicare billing.
William Madrigal, 56, pleaded guilty to one count of conspiracy to commit health care fraud and one count of soliciting and receiving health care kickbacks. According to plea documents, Madrigal, a Medicare beneficiary, admitted that he solicited and received kickbacks and bribes in return for allowing ABC and Florida Home Health to bill Medicare for home health care services for which he did not qualify. Madrigal admitted that as a result of his role in the scheme, approximately $68,760 was fraudulently billed to Medicare for unnecessary home health care and therapy.
Today’s guilty pleas were announced by Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida; John V. Gillies , Special Agent-in-Charge of the FBI’s Miami field office; and Special Agent-in-Charge Christopher Dennis of the HHS Office of Inspector General (HHS-OIG), Office of Investigations Miami office.
These cases are being prosecuted by Trial Attorneys N. Nathan Dimock, Sam Sheldon and Henry Van Dyck, and former Trial Attorney Michael Padula and Special Trial Attorney Martha Talley of the Criminal Division’s Fraud Section. The cases were investigated by the FBI and HHS-OIG, and were brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida.
Since its inception in March 2007, the Medicare Fraud Strike Force operations in seven districts have obtained indictments of more than 810 individuals and organizations that collectively have billed the Medicare program for more than $1.85 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.
Georgia Defense Contractor and Its President to Pay $750,000 to Resolve False Claims Act AllegationsRead the Press Release
WASHINGTON – Quantum Dynamics Inc, located in Macon, Ga., and its president, Audrey Price, have agreed to pay the United States $750,000 to settle claims that they fraudulently obtained contracts from the Army, the Justice Department announced today. The contracts had been set aside for companies that qualified for the Small Business Administration’s Historically Underutilized Business Zone (HUBZone) program. Quantum was allowed to participate in the HUBZone program based on false statements made to the government.
Under the HUBZone program, companies that maintain their principal office in a designated HUBZone and employ 35 percent of their workforce from a HUBZone, among other requirements, can apply to the Small Business Administration (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 Quantum did not actually maintain its principal office in a designated HUBZone location in Washington, D.C., as they had represented to the Army and the SBA, but rather set up their office in a Virginia suburb. Additionally, the government alleged that Quantum Dynamics did not employ a sufficient percentage of employees who lived in a HUBZone. Despite not properly qualifying for the HUBZone program, Quantum Dynamics was awarded Army contracts that had been set aside for qualified HUBZone companies based upon the false statements they made to the Army and the SBA.
"The Department of Justice is committed to rooting out fraud in government contracting programs," said Tony West, Assistant Attorney General for the Civil Division of the Department of Justice. "We will take action against those contractors who seek to gain an unfair advantage over qualified HUBZone small businesses."
"This settlement sends a strong message that the government will not tolerate fraud in the HUBZone or any other SBA program, and that we will pursue civil fraud and all other remedies against those who seek to obtain government contracts through false statements," 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," said SBA General Counsel Sara Lipscomb.
Assistant Attorney General West thanked the Justice Department’s Civil Division, the SBA Office of General Counsel, and the SBA Office of Inspector General for the collaboration that resulted in the settlement announced today.
Former Husband and Wife Sentenced for Their Roles in $5.8 Million Fraudulent HIV Infusion Scheme in MiamiRead the Press Release
WASHINGTON – David Marrero, a founder of and consultant at a fraudulent Miami-area HIV/AIDS infusion clinic known as Tendercare Medical Center Inc., was sentenced today to 10 years in prison for his role in a $5.8 million scheme to defraud the Medicare program, announced the Departments of Justice and Health and Human Services (HHS). Marrero’s ex-wife, Maria Valero Marrero, the owner and operator of Tendercare, was also sentenced today to 70 months in prison.
In addition to the prison terms, David and Maria Marrero each were sentenced by U.S. District Judge Ursula Ungaro in the Southern District of Florida to three years of supervised release. David and Maria Marrero were also ordered to pay restitution jointly and severally with co-defendants in the amount of $2.7 million.
David Marrero was convicted by a federal jury in May 2010 of one count of health care fraud, one count of conspiracy to commit money laundering and one count of money laundering. Maria Marrero pleaded guilty to one count of conspiracy to commit health care fraud in April 2010. According to court documents and evidence presented at trial, David and Maria Marrero participated in a scheme to defraud Medicare by submitting claims for injection and infusion treatments that were medically unnecessary and, in most instances, were not provided. Maria Marrero admitted to conspiring to pay kickbacks to induce Medicare beneficiaries to provide their Medicare numbers and their signatures, which were used by Tendercare to submit fraudulent claims to Medicare for injection and infusion services. According to court documents, David Marrero transferred ownership of the fraudulent HIV clinic to Maria Valero Marrero as part of a divorce settlement.
According to court documents, between January 2005 and December 2007, Tendercare submitted approximately $5.8 million in false and fraudulent claims to Medicare. Medicare paid Tendercare approximately $2.7 million.
Today’s sentences were announced by Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida; John V. Gillies, Special Agent-in-Charge of the FBI’s Miami field office; and Special Agent-in-Charge Christopher Dennis of the HHS Office of Inspector General (HHS-OIG), Office of Investigations Miami office.
The cases were prosecuted by Fraud Section Trial Attorney Charles D. Reed and former Special Trial Attorney Martha Talley, on detail from HHS-OIG.
The cases were brought as part of the Medicare Fraud Strike Force, supervised by the U.S. Attorney’s Office for the Southern District of Florida and the Criminal Division’s Fraud Section. Since their inception in March 2007, Medicare Fraud Strike Force operations in seven districts have obtained indictments of more than 810 individuals who collectively have fraudulently billed the Medicare program for more than $1.85 billion. In addition, the HHS Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.
Former Deputy Sheriff from Choctaw County, Oklahoma, Sentenced for Civil Rights ViolationsRead the Press Release
WASHINGTON – Former Choctaw County, Okla., deputy sheriff Ben Westley Milner was sentenced today in Muskogee, Okla., to serve 18 months in prison and two years supervised release for violating the civil rights of three men by assaulting them without legal justification.
In one incident, which took place on Oct. 31, 2005, Milner physically abused a truck driver following a traffic stop. In a second incident on Oct. 18, 2007, Milner assaulted two inmates at the Choctaw County Jail with a large axe handle. Milner was convicted on Sept. 24, 2009, on three counts of violating the civil rights of his victims and two counts of falsifying official reports.
"The investigation and prosecution of this case shows that the Department of Justice does not tolerate abuse of authority by the people we entrust to enforce our laws. The sentence imposed today shows the seriousness of these crimes," said Thomas E. Perez , Assistant Attorney General for the Civil Rights Division.
"Law enforcement officers in the Eastern District of Oklahoma are generally well trained in the exercise of reasonable force. We expect that they will survive the dangers inherent in their shifts of work and return home to their families and loved ones. But when those who swear to obey the law, violate that law, a day of reckoning awaits," said U.S. Attorney Sheldon J. Sperling for the Eastern District of Oklahoma.
The convictions resulted from an investigation by the Oklahoma Division of the FBI, and a prosecution by Assistant U.S. Attorney Dean Burris for the Eastern District of Oklahoma, and Trial Attorney Ryan McKinstry for the Civil Rights Division.
Agency Chief FOIA Officers Respond to the President’s and Attorney General’s Call for TransparencyRead the Press Release
WASHINGTON – Responding to the President’s and Attorney General’s call for increased transparency, federal agencies across the government have released more documents, made more information available on websites and decreased backlogs in the past year, the Department of Justice today announced. This year, for the first time ever, 94 agencies were required to submit reports from their Chief FOIA (Freedom of Information Act) Officers detailing their progress in improving transparency as part of the President’s FOIA Memorandum and the Attorney General’s FOIA Guidelines.
“These 94 agencies have taken significant steps forward in providing the American people with the transparency they want and deserve,” said Attorney General Eric Holder. “Much work needs to be done in the effort to open up the government’s FOIA process and improve its efficiency, but these results indicate we have made important strides in the right direction.”
In the Chief FOIA Officers’ Reports, agencies were asked to describe the steps they had taken to improve transparency in accordance with the President’s FOIA Memorandum, www.whitehouse.gov/the_press_office/FreedomofInformationAct/, and the Attorney General’s FOIA Guidelines, www.justice.gov/ag/foia-memo-march2009.pdf. The department’s Office of Information Policy (OIP) analyzed the reports and provided a summary of its findings and guidance for further improvements that can be found at www.justice.gov/oip/foiapost/2010foiapost23.htm. The results are significant. Among other things:
- All agencies reported progress in implementing the presumption of openness, with over half having that progress rated as “remarkable.”
- Almost half of the 94 agencies reported divulging documents in discretionary releases – i.e., the documents were requested under the FOIA and the agency could legally have withheld information, but chose not to. Over half looked for opportunities to do so.
- More information is being released to FOIA requesters. In Fiscal Year 2009, the number of responses with released records, either records released in full or in part, increased overall. The number of partial releases increased by approximately 50,000 documents.
- Eighty-nine percent of agencies reported proactively disclosing material on their websites – i.e., producing material that has not (yet) been requested by the public.
- Ninety-five percent of agencies, including all cabinet agencies, can receive FOIA requests electronically, rather than merely via mail or other non-technological methods. Ninety one percent track the requests electronically as well.
- Sixty percent of agencies either had no backlog in processing FOIA requests or reduced that backlog in Fiscal Year 2009. Eighty-five percent reduced the age of the oldest request or had no backlogged request to close.
President Obama’s Memorandum concerning transparency and open government was issued on Jan. 21, 2009. Attorney General Holder’s FOIA Guidelines were issued on March 19, 2009.
The Office of Information Policy is responsible for encouraging agency compliance with the FOIA and ensuring that the President’s FOIA Memorandum and the Attorney General’s FOIA Guidelines are fully implemented across the government. To carry out these responsibilities OIP develops and provides guidance to agencies relating to the FOIA and regularly conducts training for FOIA personnel. OIP also manages the department’s responsibilities related to the FOIA. Additional information regarding the OIP and FOIA can be found at OIP’s website, www.justice.gov/oip/oip.html.
Virginia Man Pleads Guilty to Defrauding the U.S. Department of Defense of More Than $450,000Read the Press Release
WASHINGTON - A Virginia man pleaded guilty today to one count of mail fraud for his participation in a scheme to defraud the U.S. Department of Defense, announced Assistant Attorney General of the Criminal Division Lanny A. Breuer and U.S. Attorney Neil H. MacBride of the Eastern District of Virginia.
Jonathan Feeney, 28, of Woodbridge, Va., waived his right to an indictment and pleaded guilty to a one-count criminal information in U.S. District Court in the Eastern District of Virginia before U.S. District Court Judge Leonie Brinkema. The information charges Feeney with using the U.S. mails to execute a scheme involving fraudulent invoices to defraud the U. S. Department of Defense.
According to court documents, BAE Systems Training Services Inc. (BAE) maintained a procurement contract with the Defense Department during 2005 and 2006. Under the terms of the contract, BAE would purchase surveillance equipment and subsequently bill the U.S. government for those purchases. According to court documents, Feeney worked as a logistics engineer at BAE and was responsible for purchasing the items needed under the contract.
According to court documents, Feeney started making secret purchases in BAE’s name beginning in August 2005. He admitted that he used his position to authorize the purchase of camera lenses and video equipment, intending to keep the equipment for his personal use but to bill BAE for the purchases. This would in turn cause BAE to use the mail to bill those purchases to the United States. Between Aug. 6, 2005, and June 30, 2006, Feeney admitted he made 15 illicit purchases, totaling $476,424 in fraudulent charges, of which $464,819 was billed to the U.S. government. According to court documents, Feeney subsequently sold many of the purchases on an Internet auction site for profit.
The mail fraud count carries a maximum penalty of 20 years in prison, a $250,000 fine or twice the gross gain or loss, whichever is greater, as well as three years of supervised release. Sentencing is scheduled for Oct. 18, 2010, at 2:00 p.m.
The case is being prosecuted by Fraud Section Trial Attorney Liam Brennan and Special Assistant U.S. Attorney Steve A. Linick, Deputy Chief of the Criminal Division’s Fraud Section. The investigation is being conducted by Defense Criminal Investigative Service and members of the National Procurement Fraud Task Force.
Today’s charges are an example of the Department of Justice’s commitment to protect U.S. taxpayers from procurement fraud through the National Procurement Fraud Task Force. The National Procurement Fraud Initiative, announced in October 2006, is designed to promote the early detection, identification, prevention and prosecution of procurement fraud associated with the increase in contracting activity for national security and other government programs.
Third Chi Mei Executive Agrees to Plead Guilty and Serve Jail Time for Participating in Global LCD Price-Fixing ConspiracyRead the Press Release
WASHINGTON – A former executive from Chi Mei Optoelectronics Corporation (Chi Mei) has agreed to plead guilty and to serve jail in the United States for participating in a global conspiracy to fix the price of thin-film transistor-liquid crystal display (TFT-LCD) panels, the Department of Justice announced today.
According to a one-count felony charge filed in U.S. District Court in San Francisco, Wen-Hung “Amigo” Huang conspired with others to suppress and eliminate competition by fixing the prices of TFT-LCD panels. Huang, a resident of Taiwan and the former director of sales of Chi Mei, participated in the conspiracy from on or about Sept. 14, 2001, to on or about Dec.1, 2006.
Under his plea agreement which is subject to court approval, Huang, who was charged today, has agreed to serve 9 months in jail, to pay a $25,000 criminal fine and to assist the department in its ongoing TFT-LCD investigation.
TFT-LCD panels are used in computer monitors and notebooks, televisions, mobile phones and other electronic devices. By the end of the conspiracy period, the worldwide market for TFT-LCD panels was valued at $70 billion. Companies directly affected by the LCD price-fixing conspiracy are some of the largest computer and television manufacturers in the world, including Apple, Dell and Hewlett Packard.
The department charged that Huang participated in a conspiracy in which the participants met and agreed to charge prices of TFT-LCD panels at predetermined levels. The participants in that conspiracy also issued price quotations in accordance with the agreements reached and exchanged information on the sales of TFT-LCD panels for the purpose of monitoring adherence to the agreed-upon prices, the department said.
As a result of this investigation, more than $890 million in criminal fines have been obtained to date. Including today’s filing, 18 executives and eight companies have been charged in the department’s ongoing investigation into price fixing in the LCD industry.
Huang is 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.
Today’s charge is the result of a joint investigation by the Department of Justice Antitrust Division’s San Francisco Field Office and the FBI in San Francisco.
Anyone with information concerning illegal conduct in the TFT-LCD 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 .
Statement of the Attorney General on Passage of the Fair Sentencing ActRead the Press Release
"I congratulate the House of Representatives on today’s passage of the Fair Sentencing Act. The bill greatly reduces the unwarranted disparity in sentences for crack and powder cocaine offenses, and will go a long way toward ensuring that our sentencing laws are tough, consistent, and fair.
"By sending the bill to the President, the House has taken an important step toward more just sentencing policies while enhancing the ability of law enforcement officials to protect our communities from violent and dangerous drug traffickers.
"This day was long in coming, and I want to express my appreciation to the members of the House and Senate who worked tirelessly to bring about this result. Particular thanks are due to Majority Whip Clyburn, House Judiciary Committee Chairman Conyers and Crime Subcommittee Chairman Scott, and to the bipartisan leadership of the Senate Judiciary Committee, including Chairman Leahy, Ranking Member Sessions and Senators Durbin and Graham.
"I join them in celebrating this achievement, and look forward to working with them to implement the new law."
Spokane, Washington, Man Pleads Guilty to Civil Rights Charges Related to Threats to Reproductive Health Services ClinicRead the Press Release
WASHINGTON – Donald Hertz, 70, of Spokane, Wash., pleaded guilty today in federal court in Spokane to one count of violating the Freedom of Access to Clinic Entrances (FACE) Act and one count of transmitting a threat in interstate commerce. The FACE Act makes it a federal crime to injure, intimidate or interfere with, by force or threat of force, employees of a facility that provides reproductive health services.
During the plea proceedings and in documents filed in court, Hertz admitted that he intentionally intimidated and interfered with employees of the Boulder Abortion Clinic, located in Boulder, Colo., because they were and had been providing reproductive health services. Specifically, on June 23, 2009, approximately three weeks after the murder of Dr. George Tiller, a Kansas physician who provided reproductive health services, Hertz anonymously contacted the Boulder Abortion Clinic and stated that two of his associates were driving to Boulder to kill members of a clinic employee’s family in order to make that employee suffer.
"Threats of violence against facilities that provide reproductive health services are illegal, and they will not be tolerated in this country," said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. "The defendant’s conviction should send a clear message to others who would carry out similar criminal acts that they will be brought to justice and held accountable for their actions."
Sentencing has been scheduled for Oct. 27, 2010. Hertz faces a maximum prison sentence of up to six years and a fine of up to $350,000.
The case was investigated by special agents from the Denver and Spokane Divisions of the FBI and deputies from the U.S. Marshals Service. The case is being prosecuted by the Civil Rights Division of the Justice Department with the assistance of the U.S. Attorney’s Office for the Eastern District of Washington.
Settlement Reached to Expedite Cleanup for Walpole, Massachusetts, Superfund SiteRead the Press Release
BOSTON – A $13 million settlement has been reached between four parties and the United States to expedite cleanup of the contaminated Blackburn and Union Privileges Superfund Site in Walpole, Mass., the Justice Department and Environmental Protection Agency (EPA) announced today. The parties involved in the settlement include W.R. Grace & Co.-Conn., a former owner and operator of the site; Tyco Healthcare Group, also former owner and operator; as well as BIM Investment Corp. and Shaffer Realty Nominee Trust, the current owners.
Under the settlement, the four parties will, among other things:
- Excavate and dredge contaminated soil and sediment;
- Treat contaminated groundwater that poses a risk to surface waters;
- Establish land use restrictions for the site; and
- Perform long-term monitoring of soils, sediment and groundwater.
Under the agreement, the private parties will be required to maintain the cap and culvert, and perform engineering studies needed to ensure the long-term integrity of the structures.
“EPA is pleased that, if approved, this settlement will re-enforce the 'polluter pays' principle that is central to the Superfund program by obtaining a commitment for millions of dollars in cleanup work from the responsible parties at this Site,” said Curt Spalding, regional administrator of EPA’s New England office.
The site, which was listed on the National Priorities List in 1994, includes about 21 parcels of land. The Neponset River runs through the 22-acre site, which has been used for commercial and industrial purposes since the 1700s. From about 1915 to 1936, a predecessor of W.R. Grace manufactured asbestos brake linings and clutch linings on a large portion of the property. From 1946 to about 1983, a predecessor of Tyco Healthcare operated a cotton fabric manufacturing business, which used caustic solutions, on a portion of the property.
As a result of these operations, soils, sediment and groundwater are contaminated with inorganic chemicals, including asbestos and metals, volatile organic compounds (VOCs), polycyclic aromatic hydrocarbons (PAHs), and highly alkaline compounds.
The group will reimburse the federal government for the $1.4 million in response costs associated with the site, as well as for all future oversight costs up to $2 million.
The consent decree, lodged in U.S. District Court for the District of Massachusetts, is subject to a 30-day public comment period and court approval. A copy of the consent decree and instructions about how to submit comments is available on the Department of Justice website at www.usdoj.gov/enrd/Consent_Decrees.html. The consent decree has already been approved by the U.S. Bankruptcy Court for the District of Delaware as part of W.R. Grace’s pending bankruptcy proceeding.
During a cleanup in the early 1990s, Grace consolidated asbestos-contaminated soils and sediments and installed a cap and containment cell at the site. In addition, a culvert was installed along the Neponset River to prevent the erosion of asbestos contaminated soils along the banks of the river.
More information: Blackburn and Union Privileges Superfund Site (www.epa.gov/region1/superfund/sites/blackburn)
Justice Department Files Fair Housing Lawsuit Against Dalton Township, MichiganRead the Press Release
WASHINGTON - The Justice Department today filed a lawsuit against Dalton Township, Mich., alleging violations of the Fair Housing Act and the Americans with Disabilities Act. The lawsuit, filed in U.S. District Court for the Western District of Michigan, charges that the township discriminated against persons with disabilities based on its treatment of a group home for persons recovering from drug and alcohol addiction and its failure to grant a reasonable accommodation or modification to the owner of the group home.
This lawsuit arose as a result of a complaint filed with the U.S. Department of Housing and Urban Development (HUD) by Joel Kruszynski Sr., who, through Cedar Creek Investments Inc., and Serenity Shores Apartments LLC, owns and operates a group home known as "Serenity Shores."
The suit seeks a court order prohibiting future discrimination by the township and requiring the township to make a reasonable accommodation to permit the continued operation of Serenity Shores as a sober home for eight individuals and a resident manager. It also seeks payment of monetary damages to compensate victims and a civil penalty.
"The Fair Housing Act and the Americans with Disabilities Act seek to ensure that individuals with disabilities can live in communities of their choice without facing discrimination," said Thomas E. Perez, Assistant Attorney General for Civil Rights. "We will continue our vigorous enforcement efforts to make certain that persons with disabilities are granted their rights under federal law."
"Under the Fair Housing Act and the Americans with Disabilities Act, persons with disabilities have the right to reside in communities and housing of their choice," said John Trasviña, Assistant Secretary for Fair Housing & Equal Opportunity. "HUD will take legal actions to ensure that they can live in the most integrated setting."
The federal Fair Housing Act prohibits discrimination in housing on the basis of race, color, religion, sex familial status, national origin and disability. Title II of the Americans with Disabilities Act requires that State and local governments give people with disabilities an equal opportunity to benefit from all of their programs, services and activities. More information about the Civil Rights Division and the laws it enforces is available at www.usdoj.gov/crt. Individuals who believe that they have been victims of housing discrimination or have information related to this lawsuit can call the Housing Discrimination Tip Line at 1-800-896-7743, e-mail the Justice Department at [email protected], or contact HUD at 1-800-669-9777.
The complaint is an allegation of unlawful conduct. The allegations must still be proven in federal court.
Founding Member of Abu Sayyaf Group Pleads Guilty to 1995 Hostage Taking Involving U.S. and Philippine CitizensRead the Press Release
WASHINGTON – The Justice Department announced that Madhatta Haipe, a citizen of the Philippines and founding member of Al-Harakat Al-Islamiyyah, also known as the Abu Sayyaf Group (ASG), pleaded guilty today in federal court in the District of Columbia to four counts of hostage taking in connection with the 1995 abduction of 16 people, including four U.S. citizens, in the Philippines. The guilty plea was announced by David Kris, Assistant Attorney General for National Security; Ronald C. Machen Jr., U.S. Attorney for the District of Columbia; and Charlene B. Thornton, Special Agent in Charge of the FBI Honolulu Field Office.
According to the factual proffer in support of the guilty plea, to which Haipe agreed in court, at the time of the hostage taking, Haipe was serving as the General Secretary of the ASG, or second-in-command of the organization, under the Amir. The Amir of the ASG had directed that members of the group engage in kidnappings for ransom in order to raise funds for the group and to raise the public’s awareness of the group’s purpose. The ASG was subsequently designated as a Foreign Terrorist Organization by the U.S. Secretary of State, and remains so designated today.
As admitted by Haipe as part of his guilty plea, on Dec. 27, 1995, several armed members of the ASG kidnapped 16 individuals, including four U.S. citizens, one U.S. permanent resident alien, and 11 Philippine citizens, in the rugged area around Trankini Falls, near Lake Sebu, in southern Mindanao, in the Philippines. The hostages, including six children, were forced to march up a mountainside. Some of the adult hostages had rope tied around their hands or neck.
Haipe informed the hostages that they were being kidnapped for ransom, and he individually questioned some of the hostages to determine the amount of ransom to be demanded. Later that same day, Haipe decided to release four of the 16 hostages to allow them to collect a ransom totaling at least one million Filipino pesos (equivalent to about $38,000 U.S. dollars, at the time). Haipe threatened that if the released hostages told anyone about the kidnapping, then hostages would be killed.
After releasing the four hostages, Haipe and his group forced the remaining hostages to continue marching up the mountainside to evade capture by the Philippine authorities. Four days later, on December 31, 1995, Haipe and his group released the remaining hostages after a ransom was paid.
"For roughly 15 years, FBI agents, Justice Department prosecutors and authorities in the Philippines relentlessly pursued this matter on behalf of the victims, who were held hostage and threatened with death by this Abu Sayyaf leader. With today’s guilty plea, Mr. Haipe is finally being held accountable for his actions," said David Kris, Assistant Attorney General for National Security.
"Today’s guilty plea sends a clear message -- we will never tire in our pursuit of justice for those who seek to harm American citizens, whether at home or abroad," said Ronald C. Machen Jr., United States Attorney for the District of Columbia. "Today’s guilty plea demonstrates that there will be serious consequences for those who commit such crimes."
"The FBI Honolulu Division has investigated this matter in close coordination with the Philippine authorities for approximately 15 years," said Charlene Thornton, Special Agent in Charge of the FBI in Honolulu. "Through this international cooperation, despite the time and distance, we have managed to bring to justice a defendant who had sought to harm our U.S. citizens abroad."
Haipe, who is now 48 years old, was indicted for this crime by a federal grand jury in Washington, D.C. in November 2000. In August 2009, he was extradited from the Philippines to face the charges against him. He is now scheduled to be sentenced before Judge Richard Roberts on Dec. 14, 2010. He faces up to life in prison on each of the four counts to which he pleaded guilty. As part of the plea agreement, the government may advocate for a sentence of up to 25 years in prison.
The Department of Justice and the FBI, working with their partners in the Philippines, have vigorously pursued this case for years. The investigation was conducted by FBI Honolulu Field Office, with substantial assistance from the Philippines Department of Justice, the Philippine National Police, the National Bureau of Investigation and the Philippine Department of Foreign Affairs. The Criminal Division’s Office of International Affairs and, in particular, Robert Courtney, the U.S. Justice Department’s Attaché to the Philippines, also provided substantial assistance in this case.
The prosecution is being handled by Assistant U.S. Attorneys Gregg Maisel and Anthony Asuncion of the U.S. Attorney’s Office for the District of Columbia, as well as Trial Attorney T. J. Reardon, III, of the Counterterrorism Section of the Justice Department’s National Security Division.
Former St. Louis, Missouri, Area Police Officer Pleads Guilty to Civil Rights ViolationsRead the Press Release
WASHINGTON – The Justice Department announced today that Leon Pullen, 32, of Foley, Mo., pleaded guilty to civil rights violations stemming from several incidents where he sexually assaulted and stole money from women. Pullen was a police officer employed by the Uplands Park Police Department in suburban St. Louis.
According to court documents, on July 15, 2009, Officer Pullen responded to an advertisement placed on the Internet by a woman who posted her picture and contact information as a prostitute. Pullen contacted the woman via cell phone and identified himself as “Jimmy,” and without identifying himself as a police officer, arranged to meet her at a specific location in Uplands Park. He agreed to pay $400 for sexual acts, and also asked her to bring a friend. When they arrived, a police vehicle pulled behind her car. Pullen, who was on duty and dressed in full uniform, including a badge and sidearm, approached her, showed her the ad she had posted on the Internet, and demanded to know how much money she had with her. Pullen made her follow him to the police station, where he sexually assaulted her.
In February or March of 2009, Pullen answered another ad from a different woman and arranged to meet her at a hotel room that she had rented in St. Louis. When he arrived, he was wearing a blue jacket over a gray golf shirt that had a police badge embroidered onto the front with the words “Detective Pullen.” Once inside, he identified himself as a police officer and told her that she was under arrest. He displayed his firearm and handcuffs. After he sexually assaulted her, he took $100 in cash and her laptop computer. The victim told the FBI later that she was initially afraid to report the assault when it happened because Pullen identified himself as a police officer.
Pullen sexually assaulted two more women using the same tactics in May and June 2009.
Following his arrest on Sept. 20, 2009, Pullen gave a voluntary statement to the FBI. First, he told the agents that he had never taken money from the victims, and denied to the FBI that he had ever engaged in sexual activity - consensual or otherwise - while on-duty.
“An officer’s badge entrusts him or her with a great deal of power. Officers who abuse that power, as was done in this case, must be prosecuted to the fullest extent of the law,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division.
Pullen pleaded guilty to one felony count of conspiracy to deprive individuals of their rights under color of law, four felony counts of deprivation of rights under color of law, one felony count of conspiracy to commit interference with commerce by color of right, one felony count of interference with commerce by color of right, one felony count of tampering with a witness and one felony count of making false statements.
These charges carry penalty ranges of five years to life in prison. Sentencing has been set for Oct. 15, 2010, before Judge Rodney W. Sippel.
This case was investigated by the FBI and prosecuted by Assistant U.S. Attorney Howard Marcus and Civil Rights Division Trial Attorney Eric Gibson.
Court Awards Back Pay to Returning Veteran and Injunctive Relief Against Alabama Department of Mental HealthRead the Press Release
WASHINGTON – A U.S. District Court in Montgomery, Ala., granted judgment in favor of the United States yesterday in a lawsuit brought to enforce the Uniformed Services Employment and Reemployment Rights Act (USERRA) against the Alabama Department of Mental Health (ADMH).
After a trial in June, U.S. District Court Chief Judge Mark E. Fuller held that ADMH violated USERRA when it failed to promptly reemploy Roy Hamilton when he returned from active duty military service in Iraq. The court awarded Hamilton $23,350.77 in back pay and retirement contributions; $2,997.96 in annual and sick leave; and restoration of his continuous service date to his original hire date, July 13, 1987. The court also found that the United States is entitled to injunctive relief to ensure ADMH’s future compliance with USERRA. The injunctive relief includes amendments to ADMH’s policies and procedures and mandatory training for all ADMH managers and personnel officials.
USERRA was enacted in 1994 to protect service members from being disadvantaged in their civilian careers due to serving in the uniformed services. Subject to certain limitations, USERRA requires that individuals who leave their jobs to serve in the U. S. armed forces be timely reemployed by their civilian employers in the same or similar position that they would have held had they not left to serve in the military.
The complaint alleged that ADMH violated USERRA by failing or refusing to promptly reemploy Hamilton upon his return from military service. Hamilton was deployed to Iraq in July 2004. Upon his completion of active duty in April 2005, Hamilton received an honorable discharge and contacted ADMH to seek immediate reemployment. ADMH did not offer Hamilton reemployment, nor did ADMH contact Hamilton about reemployment. Hamilton was rehired as a new employee in August 2007.
“Members of our armed forces deserve the comfort of knowing that they will not be sacrificing their civilian careers when they make the choice to serve our nation in the military,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “Mr. Hamilton will be made whole, and the Department of Justice will continue to seek relief on behalf of other servicemembers for violations of USERRA.”
The Department of Justice brought this case after a referral from the U.S. Department of Labor (DOL). DOL’s Veterans’ Employment and Training Service investigated Mr. Hamilton’s compliant, found that it had merit, and attempted to resolve it before referring it for litigation by the Department of Justice.
U.S. Files Suit Against Georgia Medical Center and Physician; Allegedly Submitted Claims for Worthless Services to Federal Health Care ProgramsRead the Press Release
WASHINGTON - The United States has filed a complaint under the False Claims Act against Dr. Najam Azmat and the Satilla Regional Medical Center in Waycross, Ga., the Justice Department announced today. The complaint, filed in U.S. District Court for the Southern District of Georgia, alleges that the defendants submitted false or fraudulent claims to federal health care programs, such as Medicare. Specifically, the United States contends that certain operative procedures performed by Dr. Azmat at Satilla, and hospital services provided by Satilla in connection with those procedures, were not reasonable and necessary, were incompatible with standards of acceptable medical practice, and were of no medical value. The United States further alleges that the defendants’ misconduct endangered the lives of federal health care program beneficiaries.
The government’s complaint alleges that in the Spring of 2005, Satilla recruited Dr. Azmat, a general surgeon by training, to relocate to Waycross and join the hospital’s medical staff. Shortly after Dr. Azmat came aboard, Satilla allowed him to begin performing endovascular procedures – highly specialized operative procedures that require formal training – in Satilla’s Heart Center cath lab. Satilla did so despite the fact that Dr. Azmat lacked training to perform such procedures, was not qualified or competent to perform such procedures, had never performed such procedures before at any of the hospitals where he had been on staff, and did not even have privileges at Satilla to perform such procedures.
The complaint further alleges that it was obvious to the cath lab nursing staff that Dr. Azmat was not qualified or competent to perform endovascular procedures. The nurses repeatedly voiced their concerns to Satilla’s management, but the hospital took no formal action for at least five months, during which patients were seriously injured and one patient died from hemorrhagic shock following an endovascular procedure during which Dr. Azmat perforated her renal artery. The complaint also states that not only did Satilla’s management ignore its nurses’ concerns for several months, but it also performed no formal oversight of Dr. Azmat, categorically excluding all of his endovascular procedures from Satilla’s peer review process.
"When health care providers cut corners by allowing unqualified doctors to perform complicated medical procedures, patients suffer," said Tony West, Assistant Attorney General for the Civil Division of the Department of Justice. "Here, we allege individuals were endangered because of these defendants. The seriousness of this case illustrates why we remain committed to protecting patient safety and the integrity of our federal health care programs by aggressively enforcing our health care fraud laws."
"The filing of this complaint is but one example of the willingness of the Department of Justice to take action to protect the health and safety of the American people. The United States Attorney’s Office will take the necessary legal actions to comply with our vigorous enforcement responsibilities under the False Claims Act," said Edward Tarver, U.S. Attorney for the Southern District of Georgia .
This lawsuit was originally filed by Lana Rogers, a nurse who formerly worked in Satilla’s Heart Center. Under the qui tam, or whistleblower, provisions of the False Claims Act, a private citizen can file an action on behalf of the United States and receive a portion of any recovery. In April of this year, the United States intervened in the lawsuit, and today filed its own complaint. Under the False Claims Act, the government may recover up to three times the amount of its losses, plus civil penalties based on the number of false claims filed.
The suit is entitled United States ex rel. Lana Rogers v. Najam Azmat, M.D. and Satilla Health Services Inc., dba Satilla Regional Medical Center.
The United States’ intervention is part of the government’s emphasis on combating health care fraud. One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover approximately $3 billion since January 2009 in cases involving fraud against federal health care programs. The Justice Department’s total recoveries in False Claims Act cases since January 2009 have topped $4 billion.
Three Former Financial Services Executives Indicted for Roles in Fraud Schemes and Conspiracies Involving Investment Contracts for the Proceeds of Municipal BondsRead the Press Release
WASHINGTON — Three former financial services executives were indicted today for their participation in fraud schemes and conspiracies related to bidding for contracts for the investment of municipal bond proceeds and other municipal finance contracts, the Department of Justice announced.
The 12-count indictment was filed today in U.S. District Court in New York City. The indictment charges Dominick P. Carollo, Steven E. Goldberg and Peter S. Grimm, all former executives at financial service companies or financial institutions, with participating in wire fraud schemes and separate fraud conspiracies at various time periods from as early as 1999 until 2006.
The charged conspiracies and schemes all relate to the provision of a type of contract, known as an investment agreement, to public entities, such as state, county and local governments and agencies throughout the United States. Major financial institutions, including banks, investment banks, insurance companies and financial services companies, are among the providers of investment agreements and other related municipal finance contracts. Public entities seek to invest money from a variety of sources, primarily the proceeds of municipal bonds that they issued to raise money for, among other things, public projects. Public entities typically hire a broker to conduct a competitive bidding process among various providers for the award of an investment agreement to invest such money. Competitive bidding for these agreements is the subject of regulations issued by the U.S. Department of the Treasury and is related to the tax-exempt status of the bonds. The companies that employed Carollo, Goldberg and Grimm all marketed financial products and services, including services as a provider of investment agreements.
"The individuals charged today allegedly participated in complex fraud schemes and conspiracies to manipulate what was supposed to be a competitive process," said Christine Varney, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. "The Antitrust Division has previously indicted several individuals and their employer in this matter. Our investigation is ongoing and we will continue to prosecute those who engage in such illegal and anticompetitive behavior."
The indictment charges that Carollo, Goldberg and Grimm conspired with various brokers to attempt to increase the number and profitability of investment agreements and other municipal finance contracts awarded to the provider companies where they were employed. According to court documents, Beverly Hills, Calif.-based Rubin/Chambers, Dunhill Insurance Services Inc., also known as CDR Financial Products, was one of the co-conspirator brokers. Carollo, Goldberg and Grimm obtained from CDR and other co-conspirator brokers information about the prices, price levels or conditions in competing providers’ bids, a practice known as a "last look," which is explicitly prohibited by U.S. Treasury regulations. As a result of the information, various providers won investment agreements and other municipal finance contracts at artificially determined price levels. In exchange for this information, Carollo, Goldberg and Grimm submitted intentionally losing bids for certain investment agreements and other contracts when requested, and, on occasion, agreed to pay or arranged for kickbacks to be paid to CDR and other co-conspirator brokers.
The indictment also alleges that Carollo, Goldberg, Grimm and co-conspirators misrepresented to municipal issuers or bond counsel that the bidding process was in compliance with U.S. Treasury regulations. This caused the municipal issuers to award investment agreements and other municipal finance contracts to providers that otherwise would not have been awarded the contracts if the issuers had true and accurate information regarding the bidding process. Such conduct placed the tax-exempt status of the underlying bonds in jeopardy.
According to court documents, the efforts by Carollo, Goldberg, Grimm and their co-conspirators to control and manipulate the bidding for investment contracts, and the execution of a variety of certifications that covered up their scheme, also obstructed the Internal Revenue Service’s (IRS) ability to monitor compliance with U.S. Treasury regulations and impeded the IRS’s ability to determine whether municipal issuers had correctly accounted for any money that was owed to the U.S. Treasury.
"The elaborate schemes outlined in the indictment boil down to efforts by these defendants to subvert the competitive bidding process for investment agreements. In the process, they defrauded public entities – and therefore, the public – and put bondholders at risk," said FBI Acting Assistant Director-in-Charge George Venizelos. "The FBI will continue to work with the Antitrust Division to ensure the integrity of competitive bidding in public finance."
"This case demonstrates the value of a coordinated approach by multiple agencies and law enforcement authorities," said IRS Special Agent in Charge Charles R. Pine. "IRS Criminal Investigation contributed to this joint effort by providing financial investigative expertise to uncover this complex and sophisticated scheme. Professionals, including financial service executives, should know we will devote all resources necessary to bring to justice those who commit financial crimes."
The fraud conspiracies with which Carollo, Goldberg and Grimm are charged each carry a maximum penalty per count of five years in prison and a $250,000 fine. The wire fraud charges each carry a maximum penalty per count of 20 years in prison and a $1 million fine. Goldberg is charged with eight counts of conspiracy and two counts of wire fraud, Grimm is charged with five counts of conspiracy and one count of wire fraud, and Carollo is charged with four counts of conspiracy and one count of wire fraud. The maximum fines for each of these offenses may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.
The charges announced today resulted from an ongoing investigation conducted by the Antitrust Division’s New York Field Office, the FBI and IRS Criminal Investigation. The division is coordinating its investigation with the U.S. Securities and Exchange Commission, the Office of the Comptroller of the Currency and the Federal Reserve Bank of New York. To date, four individuals have pleaded guilty in relation to this investigation. In addition, on Oct. 29, 2009, CDR, two of its employees and one former employee were indicted and charged with participating in bid-rigging and fraud conspiracies and related crimes. The CDR trial is scheduled to begin on Sept. 12, 2011.
Today’s charges are part of efforts underway by President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. For more information on the task force, visit www.StopFraud.gov.
Anyone with information concerning bid rigging and related offenses in any financial markets should contact the Antitrust Division’s New York Field Office at 212-264-0390 or the FBI at 212-384-5000.
MS-13 Gang Member Sentenced to Death After Conviction on Racketeering Charges Related to Double MurdersRead the Press Release
WASHINGTON – Chief U.S. District Court Judge Robert J. Conrad Jr. today formally imposed the federal death penalty sentence on Alejandro Enrique Ramirez Umana, aka "Wizard," announced Assistant Attorney General Lanny A. Breuer of the Criminal Division and U.S. Attorney Anne M. Tompkins of the Western District of North Carolina. A 12-person federal jury in Charlotte, N.C., voted unanimously on April 28, 2010, to impose the death penalty against Umana after convicting him on April 19, 2010, on charges related to the murders on Dec. 8, 2007, of Ruben Garcia Salinas and his brother, Manuel Garcia Salinas. Umana is the first La Mara Salvatrucha or MS-13 member in the United States to receive the federal death penalty.
Umana, 25, of Charlotte, was convicted by the jury on all charged counts, including conspiracy to participate in racketeering; two counts of murder in aid of the racketeering enterprise known as MS-13; two counts of murder resulting from the use of a gun in a violent crime; possession of a firearm by an illegal alien; one count of extortion; and two criminal counts associated with witness tampering or intimidation. During the sentencing phase, the jury also found that Umana was responsible for other murders. Specifically, the jury found that on July 27, 2005, Umana killed Jose Herrera and Gustavo Porras in Los Angeles, and on Sept. 28, 2005, Umana participated and aided and abetted the killing of Andy Abarca in Los Angeles.
Umana was indicted by a federal grand jury on June 23, 2008. Witnesses testified at his trial that Umana was a veteran member of MS-13 who illegally came to Charlotte to assist in reorganizing the Charlotte MS-13 cell. Witnesses also testified that on Dec. 8, 2007, while in Las Jarochitas, a family-run restaurant in Greensboro, N.C., Umana shot Ruben Garcia Salinas fatally in the chest and Manuel Garcia Salinas in the head. Witnesses testified that the shootings took place after the Garcia Salinas brothers had "disrespected" Umana’s gang signs by calling them "fake." Firing three more shots in the restaurant, according to trial testimony, Umana injured another individual with his gunfire. Trial testimony and evidence showed that Umana later fled back to Charlotte with MS-13 assistance. Umana was arrested five days later in possession of the murder weapon. Additional evidence and testimony from the trial revealed that while Umana was incarcerated pending trial, he coordinated attempts to kill witnesses and informants. During trial, Umana attempted to bring a knife with him to the courtroom, which was discovered by U.S. Marshals prior to Umana being transported to the courthouse.
"Violent gangs like MS-13 terrorize communities across this country," said Assistant Attorney General Breuer. "As the evidence in this case showed, murder and intimidation are a way of life for some members of this gang. Although there is no punishment that will bring back the lives taken by the defendant, this series of prosecutions of MS-13, and the punishments imposed, should make abundantly clear to gang members that we will not let them operate with impunity. As today’s sentence shows, their criminal actions have serious consequences."
"The imposition of the death penalty - the harshest sentence in the criminal justice system - is a sobering event for all involved in the investigation and prosecution," said U.S. Attorney Tompkins. "The death penalty in this case is fair, just, and merited. The U.S. Attorney’s Office, based upon the facts and evidence, advocated for the death penalty, and the jury agreed that Umana deserved nothing less than the death penalty. I commend the investigators and prosecutors for engaging in this critical process with professionalism and integrity."
"While the outcome of today’s hearing does not change that two innocent people are dead, it will hopefully bring closure to the families and loved ones of the men who were killed and the many other victims left in the wake of the MS-13 crime spree. This case has spanned international borders, taken years of investigation and thousands of hours of arduous work. It proves our law enforcement partners are determined to bring those who break the law to justice, regardless of the obstacles that may block the path," said Owen D. Harris, Special Agent in Charge of the Charlotte Division of the FBI.
"Our goals as law enforcement officers are to put an end to gang violence and see that those who are responsible are punished. This sentence serves as a reminder that gang violence has harsh consequences, and those who choose to be involved in gangs need to understand that their actions will not be tolerated. We have the motivation and determination to keep pursuing gang members. That motivation creates a safer Charlotte," said Charlotte-Mecklenburg Police Chief Rodney Monroe.
The investigation of the MS-13 enterprise in Charlotte has led to charges against 26 MS-13 members. In addition to Umana, six defendants were convicted at trial in January 2010, and 18 others have pleaded guilty. One defendant remains in custody in El Salvador. To date, 11 of the 25 defendants convicted have been sentenced to prison terms ranging from two to 20 years.
The case was investigated by the Charlotte Safe Streets Task Force. The case was prosecuted by Chief Criminal Assistant U.S. Attorney Jill Westmoreland Rose of the U.S. Attorney’s Office for the Western District of North Carolina, and Trial Attorney Sam Nazzaro from the Criminal Division’s Gang Unit. Assistant U.S. Attorneys Don Gast and Adam Morris of the U.S. Attorney’s Office for the Western District of North Carolina were also members of the government’s trial team.
Former CEO of the Morgan Crucible Co. Found Guilty of Conspiracy to Obstruct JusticeRead the Press Release
WASHINGTON — A federal jury in Philadelphia today convicted Ian P. Norris, the former CEO of The Morgan Crucible Company plc, a United Kingdom corporation, of conspiring with others to obstruct justice, the Department of Justice announced.
In 2004, a federal grand jury indicted Norris, a citizen of the United Kingdom, on one count of fixing prices of carbon brushes and other carbon products, one count of conspiring to obstruct justice, and two counts of obstructing justice in connection with the Department of Justice’s antitrust investigation of price fixing in the carbon products industry. Norris was extradited to the United States in March 2010 on the three obstruction charges. The jury returned a guilty verdict today on the conspiracy to obstruct justice count and not guilty verdicts on the witness tampering count and the count of corruptly persuading others to destroy or conceal documents. Sentencing has been scheduled for Nov. 2, 2010.
The department said that Norris conspired with his subordinates to obstruct the grand jury’s investigation. Morgan Crucible employees conspired with Norris to create a false script that employees of both Morgan Crucible and a competitor were to follow when questioned in the investigation. Also, a document destruction task force was formed to collect and destroy or conceal documents from the grand jury, the department said.
"The Antitrust Division uncovered this elaborate and egregious obstruction of justice scheme," said Christine Varney, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. "Today’s verdict holds Norris accountable for his actions and sends a message that corporate leaders must promote a culture of law abiding conduct within their companies or be prepared to face stiff prison sentences. The Antitrust Division will remain vigilant in protecting the integrity of its criminal investigations from obstruction in order to effectively carry out its mandate to protect American businesses and consumers from price-fixing cartels."
Carbon products are used to transfer electrical current in automobiles, trains, public transit vehicles and consumer products and are used in pumps and compressors to contain liquids and gases.
Including today’s conviction, more than $11 million in criminal fines have been obtained and four executives and two companies have pleaded guilty or have been convicted as a result of the department’s antitrust investigation of price fixing in the carbon products industry.
The Morgan Crucible Company plc, based in Windsor, England, pleaded guilty in 2002 to one count of tampering with witnesses and one count of document destruction. The company paid a $1 million criminal fine.
A former subsidiary of the company, Morganite Inc., which was based in Dunn, N.C., pleaded guilty in 2002 to fixing prices of carbon brushes and other carbon products and paid a $10 million fine.
In addition, three subordinates of Norris previously pleaded guilty to obstruction charges. Jacobus Johan Anton Kroef, the former Chairman of the Industrial and Traction Division of The Morgan Crucible Company plc, pleaded guilty in 2003 to witness tampering. Robin D. Emerson, former pricing coordinator at Morganite Electrical Carbon Ltd. of Swansea, U.K., pleaded guilty in 2003 to corruptly persuading another person to destroy or conceal documents in connection with the investigation. F. Scott Brown, the former Global President and a member of the Board of Directors of Morgan Advanced Materials and Technology Inc. (MAMAT), now headquartered in Greenville, S.C., pleaded guilty in 2003 to aiding and abetting document destruction in connection with the investigation. Morganite Electrical Carbon Ltd. and MAMAT are subsidiaries of The Morgan Crucible Company plc.
The conspiracy count carries a maximum penalty of five years in prison and a $250,000 fine.
Trial attorneys Lucy McClain, Richard Rosenberg, and Kimberly Justice of the Antitrust Division’s Philadelphia Field Office prosecuted the case.
Former Army Contractor Charged with Involuntary Manslaughter and Assault After Collision in Kuwait Kills One Sailor and Seriously Injures AnotherRead the Press Release
WASHINGTON – A former U.S. Army contractor was arrested today in Newport News, Va., for allegedly killing one sailor and seriously injuring another in a vehicular collision in Kuwait, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division, U.S. Attorney Neil H. MacBride for the Eastern District of Virginia and Brigadier General Colleen McGuire, Provost General of the Army and Commanding General of the U.S. Army Criminal Investigation Command.
Morgan Hanks, 25, of Newport News, was arrested on charges contained in a two-count indictment returned by a federal grand jury on July 13, 2010, and unsealed today in the Eastern District of Virginia. The indictment charges Hanks with one count of involuntary manslaughter for the death of Brian Patton, and one count of assault resulting in serious bodily injury for injuring David Morgan.
According to the indictment, in November 2009, Hanks was employed in Kuwait as a canine handler by Combat Support Associates and Combat Support Associates Ltd. (CSA). CSA provided site security and force protection at U.S. Army bases in Kuwait. The indictment alleges that on approximately Nov. 19, 2009, Hanks was operating a motor vehicle in excess of the posted speed limit on Alternate Supply Route Aspen in Kuwait. The indictment alleges that Hanks attempted to pass an eight-vehicle convoy on the two-lane road while traveling uphill and caused a collision with another vehicle in which Patton and Morgan were traveling. The collision killed Patton and left Morgan with a serious brain injury and multiple fractures.
Hanks is charged under the Military Extraterritorial Jurisdiction Act (MEJA), a statute that gives U.S. courts jurisdiction to prosecute crimes committed outside the United States by, among others, contractors or subcontractors of the Department of Defense. If convicted, Hanks faces up to 10 years in prison.
The case was investigated by the U.S. Army’s Criminal Investigative Division and is being prosecuted by Senior Trial Attorneys Micah D. Pharris and Steven C. Parker of the Criminal Division’s Human Rights and Special Prosecutions Section (HRSP) and Assistant U.S. Attorney Eric Hurt for the Eastern District of Virginia.
The Criminal Division announced the formation of HRSP on March 30, 2010. The new section represents a merger of the Criminal Division’s Domestic Security Section (DSS) and the Office of Special Investigations (OSI).
An indictment is a formal accusation of criminal conduct, not evidence of guilt. A defendant is presumed innocent unless and until convicted through due process of law.
Subsidiary of Univision Communications Inc. Pleads Guilty to Conspiracy to Commit Mail Fraud and Agrees to Pay $1 Million to Resolve Related Criminal and Administrative CasesRead the Press Release
WASHINGTON – Univision Services Inc., a wholly-owned subsidiary of Univision Communications Inc., pleaded guilty today to one count of conspiracy to commit mail fraud in connection with a scheme to obtain increased radio broadcast time, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division and U.S Attorney André Birotte Jr. of the Central District of California.
According to court documents, Univision Communications formerly owned Univision Music Group, a collection of entities that produced recordings and published music for the Latin music market. Univision Services admitted that executives, employees and agents of Univision Music Group conspired to commit and did commit mail fraud from approximately 2002 to September 2006. According to court documents, the mail fraud was related to a nationwide scheme in which Univision Music Group executives, employees and agents made illegal cash payments to radio station programmers and managers in exchange for increased radio broadcast time for Univision Music Group recordings. The cash payments were made without on-air acknowledgments or payment of broadcast fees to the radio stations, as required by law.
According to court documents, executives, music promoters and agents of Univision Music Group used fraudulent contract invoices and payments to obtain and conceal the nature of the cash that funded the scheme.
"Illegal cash payments never make for a good business model. Listeners have a right to know if someone has paid for increased air time or promotions," said Assistant Attorney General Breuer. "The Department of Justice will continue to work cooperatively with our partners at the FCC to ensure businesses operate within established laws and regulations."
Under its plea agreement, Univision Communications, which is no longer involved in the Latin music recording and publishing business, agreed to plead guilty to one count of conspiracy to commit mail fraud, to pay a fine of $500,000 and to cooperate fully with the department and other law enforcement agencies in related matters.
In a related administrative proceeding, Univision Radio Inc., another wholly-owned subsidiary of Univision Communications, has agreed to pay the U.S. Treasury $500,000 and implement a compliance plan to end a parallel investigation by the Federal Communications Commission’s (FCC) Enforcement Bureau.
The case was prosecuted by Senior Trial Attorney Peter B. Loewenberg of the Criminal Division’s Fraud Section with assistance from Assistant U.S. Attorney for the Central District of California, Richard Robinson. The investigation was conducted by the Department of Justice, the U.S. Postal Inspection Service and the FCC Office of Inspector General.
Miami-Area Husband and Wife Plead Guilty in $13.7 Million HIV Infusion Clinic Fraud SchemeRead the Press Release
WASHINGTON – Miami-area husband and wife Modesto and Victoria de la Vega pleaded guilty today in U.S. District Court in Miami for their participation in a $13.7 million HIV infusion Medicare fraud scheme, announced the Departments of Justice and Health and Human Services (HHS). Also today, two Miami-area residents were sentenced to prison for their participation in a separate HIV infusion Medicare fraud scheme.
Modesto de la Vega, 59, and his wife, Victoria de la Vega, 59, pleaded guilty before U.S. District Court Judge Adalberto Jordan to one count of conspiracy to defraud the United States, to cause submission of false claims to Medicare, and to pay health care kickbacks; one count of conspiracy to commit health care fraud; and three counts of submitting false claims, as charged in a March 2010 indictment. At sentencing, scheduled for Nov. 5, 2010, Modesto and Victoria de la Vega each face a maximum penalty of five years in prison for the conspiracy to defraud the United States count and each false claims count, and 10 years in prison for the health care fraud conspiracy count.
According to plea documents, Modesto de la Vega was an owner and operator of T&R Rehabilitation Professional Corp., a Miami clinic that purported to provide expensive injection and infusion treatments to patients with HIV. Victoria de la Vega was an office assistant at T&R. Modesto de la Vega admitted at his plea hearing that he agreed with his co-defendants and others to enlist patient recruiters and patients, among others, into a scheme to defraud Medicare. Modesto and Victoria de la Vega admitted that they knew the patients at T&R did not need and/or did not receive the purported services, and that it would be necessary to pay kickbacks and bribes to the patients so that T&R could bill the Medicare program for the HIV infusion services that were not medically necessary and/or were not provided.
The defendants admitted that from approximately January 2003, through approximately July 2005, they and their co-defendants caused T&R to submit fraudulent claims to the Medicare program in the amount of approximately $13.7 million. Medicare paid approximately $4.1 million of these fraudulent claims.
In a separate and unrelated case, two Miami-area residents were sentenced today by U.S. District Judge Ursulla Ungaro in the Southern District of Florida for their participation in a similar HIV infusion Medicare fraud scheme. Keith Earnest Humes, a patient recruiter for a fraudulent HIV/AIDS infusion clinic known as Tendercare Medical Center Inc., was sentenced to 84 months in prison and three years of supervised release, and was ordered to pay restitution jointly and severally with co-defendants in the amount of $539,485. Lawrence Edward Humes, also a patient recruiter for Tendercare, was sentenced to 33 months in prison and three years of supervised release, and was ordered to pay restitution jointly and severally with co-defendants in the amount of $222,967. In addition, based on the court’s consideration of relevant conduct, Keith Humes was ordered to pay further restitution in the amount of $346,889.
According to court documents, Keith Humes and Lawrence Humes admitted that they conspired with each other and other individuals to defraud Medicare by submitting false claims for injection and infusion treatments that were medically unnecessary and that in most instances were not provided. Keith Humes and Lawrence Humes paid kickbacks to beneficiaries in return for their Medicare numbers and signatures, which Tendercare used to submit the false claims. Between January 2005 and December 2007, Tendercare submitted approximately $5.8 million in false and fraudulent claims to Medicare for treatments that were medically unnecessary or never provided. Medicare paid Tendercare approximately $2.7 million.
Today’s guilty pleas and sentences were announced by Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida; John V. Gillies , Special Agent-in-Charge of the FBI’s Miami field office; and Special Agent-in-Charge Christopher Dennis of the HHS Office of Inspector General (HHS-OIG), Office of Investigations Miami office.
The cases were prosecuted by attorneys from the Criminal Division’s Fraud Section, including Trial Attorneys N. Nathan Dimock, Joseph Beemsterboer, Charles D. Reed, former Trial Attorney Michael Padula, former Fraud Section Assistant Chief John S. (Jay) Darden and former Fraud Section Special Trial Attorney Martha Talley, on detail from HHS-OIG. The cases were investigated by the FBI and HHS-OIG and were brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida.
Since its inception in March 2007, the Medicare Fraud Strike Force operations in seven districts have obtained indictments of more than 810 individuals and organizations that collectively have billed the Medicare program for more than $1.85 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.
Indiana-Based Hoosier Energy Rural Electric Cooperative Reaches Settlement to Resolve Clean Air Act ViolationsRead the Press Release
WASHINGTON - Hoosier Energy Rural Electric Cooperative Inc., an Indiana electric generation and transmission cooperative, has agreed to install state-of-the-art pollution control technology at its two coal-fired power plants in Indiana, the Justice Department and Environmental Protection Agency (EPA) announced today. The settlement, filed in federal court today, will reduce harmful air pollution by more than 24,500 tons per year, and requires Hoosier to pay a civil penalty of $950,000 and spend $5 million on environmental mitigation projects.
The settlement requires Hoosier to reduce air pollution from the cooperative’s Merom and Ratts Stations, located in southwest Indiana. Emissions of sulfur dioxide (SO2) will be reduced by almost 20,000 tons and nitrogen oxides (NOx) by more than 1800 tons. The settlement will also reduce harmful sulfuric acid mist and particulate matter emissions. To achieve these reductions, Hoosier will upgrade existing, and install new, pollution controls at the Merom and Ratts plants, and comply with annual tonnage limitations across its system. Hoosier estimates that it will spend between $250 and $300 million upgrading and installing pollution controls at its coal-fired units through the end of 2015.
The state of Indiana joined in the settlement and will receive $100,000 of the $950,000 civil penalty.
“The large reductions in harmful air pollutants including sulfuric acid mist emissions secured by this settlement will have a significant beneficial impact on air quality in Indiana and downwind states,” said Ignacia S. Moreno, Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. “The Justice Department is committed to vigorously enforcing our nation’s environmental laws, and we are pleased that Hoosier has agreed to install state-of-the art controls that will significantly reduce harmful emissions.”
“This settlement continues our important enforcement initiative to reduce harmful air pollution from coal-fired power plants and provide the public with cleaner, healthier air to breathe,” said Cynthia Giles, assistant administrator for EPA’s Office of Enforcement and Compliance Assurance. “Pollution from these sources can cause severe respiratory and cardiovascular impacts, and are significant contributors to acid rain, smog and haze. Coal-fired power plants of all sizes are large sources of air emissions, and EPA is committed to making sure that they all comply with the law.”
Hoosier will spend $5 million on environmental mitigation projects in its service territory to address the impacts of past emissions. Hoosier must direct $200,000 for projects to mitigate the harm caused by Hoosier’s excess emissions at lands owned by the U.S. Forest Service. The remaining $4.8 million will be spent on one or more of the following projects:
- Coal Bed Methane: Hoosier will capture and combust methane from coal beds to generate at least 10 megawatts of electricity. Carbon dioxide emissions resulting from the combustion of methane will be supplied to a greenhouse for use as a fertilizer.
- Wood Appliance Changeout and Retrofits: Hoosier will sponsor a wood-burning appliance changeout and retrofit project. Hoosier will provide incentives through rebates, discounts, and in some instances, actual replacement of old, inefficient, high polluting wood-burning technology.
- Clean Diesel Retrofits: Hoosier will retrofit in-service, public diesel engines with emission control equipment designed to reduce air pollutants.
- Solar Technologies: Hoosier will install solar power systems on public schools or non-profit groups in the company’s service territory.
The settlement marks the federal government’s 20th settlement under its national enforcement initiative to reduce emissions from coal-fired power plants under the Clean Air Act’s New Source Review requirements. SO2 and NOx, two key pollutants emitted from power plants, have numerous adverse effects on human health and the environment. These pollutants are converted in the air to fine particles of particulate matter that can cause severe respiratory and cardiovascular impacts, and premature death. SO2 and NOx are also significant contributors to acid rain, smog and haze. In addition, air pollution from power plants can drift significant distances downwind, thereby effecting not only local communities, but also communities in a much broader area.
The proposed settlement was lodged in the U.S. District Court for the Southern District of Indiana and is subject to a 30-day public comment period and final court approval.