District Not Recorded

WASHINGTON - A federal court in Kansas City, Mo, has permanently barred Missouri lawyer A. Blair Stover Jr. from promoting a variety of improper tax schemes, the Justice Department announced today. In entering the civil injunction order against Stover, U.S. District Judge Ortrie D. Smith found that Stover for years promoted schemes in which business owners use sham companies and sham transactions to improperly reduce their reported income tax liabilities. The court said that "very conservative estimates" of the tax losses to the government from Stover’s conduct were around $100 million, and noted that an Internal Revenue Service (IRS) revenue agent estimated the total tax loss to be $300 million.

The court’s decision focused on three schemes, two of which Stover promoted while working in the Kansas City office of Grant Thornton LLP, a national accounting firm where he was formerly a senior tax manager and principal. Stover left that firm in 2001, and has been an equity partner in the Kruse Mennillo LLP, accounting firm since then.

All three tax arrangements "have a common thread," the court said: "they are premised on a business owner forming a separate business denominated as a management company. The ‘operating company’ – the initial, pre-existing business – retains the new company to perform ‘management services.’"

The court cited numerous examples of Stover’s customers using sham management companies and sham transactions to reduce their reported tax liabilities. According to the court, the "end result" of a Stover-designed arrangement used by a St. Joseph, Mo., construction firm was "the creation of a series of phantom deductions that allowed [the firm] to avoid reporting $350,000 in income, all by paying for illusory management services to paper entities that had no economic substance."

In an another example, the court noted that Stover’s arrangements to help a doctor reduce his taxes were "nothing more than backdating in order to avoid the effects" of a law that prohibited the scheme after a certain date.

In response to one of Stover’s asserted defenses in the case, the court said that his "reasoning is so specious that he should have known it was wrong." The court later added that Stover "has been quite adept at hiding his involvement" in schemes he promoted "in an effort to develop what he believes is plausible deniability. Ultimately, his denials are implausible."

The court acknowledged "the clients left in defendant’s wake." Stover’s clients "were provided with inaccurate information about the risks they were undertaking. All had to pay other professionals. . . to ‘undo’" the tax arrangements that Stover promoted. The court noted that Stover "describes himself as a ‘rainmaker,’" and found "that practically everything he has done in that capacity has been improper."

The court concluded that the "promotion of tax schemes and structures is now defendant’s modus operandi," and said that it "has no reason to believe he would not concoct and promote some other scheme of doubtful validity."

The court ordered that Stover must in the future provide the IRS in advance with a detailed plans of any financial or tax arrangement he intends to promote and must further notify the IRS of any business entity that is formed at his direction. He must also notify the IRS of any new clients with whom he consults or who retain him for tax advice.

Acting Assistant Attorney General John DiCicco thanked Justice Department trial attorneys Allyson Baker, Daniel Applegate and Russell Edelstein, who handled the case, as well as Janice Mallon of the IRS’s Small Business/Self Employed Division, who was the primary revenue agent conducting the investigation.

Last May a different judge on the same federal court enjoined Stover’s former Grant Thornton colleague, Allen Davison, from promoting similar improper tax schemes.

In the last 10 years the Justice Department Tax Division has obtained injunctions against hundreds of tax preparers and tax-fraud promoters. Details of these cases are available on the Tax Division website.

WASHINGTON – Associate Attorney General Tom Perrelli issued the following statement on the Department of Justice’s negotiations to establish an escrow account for the Deepwater Horizon oil spill:

"Today, the department announced that it had completed negotiations to establish a $20 billion fund to provide the necessary resources to those suffering from the effects of the oil spill in the Gulf of Mexico. We are pleased that BP made an initial contribution and has taken an important step toward honoring its commitment to the President and the residents and business owners in the Gulf region. We have made clear that the company still needs to ensure that the necessary funds will be available if something happens to the subsidiary that established the trust and we look forward to completion of an appropriate security arrangement in the near future."

WASHINGTON – The second of two agreements to resolve longstanding problems with landfill gas emissions and their negative impacts on air quality at the Middlesex County and Edgeboro landfills in New Jersey has been reached to bring them into compliance with the Clean Air Act, the Justice Department and Environmental Protection Agency (EPA) announced today.

The two settlements together resolve all outstanding compliance issues at the landfill facilities. The New Jersey Department of Environmental Protection was also a party to the agreement.

Under the agreements, both facilities will enhance environmental controls at the site, conduct regular monitoring and make other required infrastructure improvements to meet federal standards. Landfill gas collected by the separate Middlesex County Utilities Authority (MCUA) and Edgeboro Disposal Inc. (EDI) gas collection systems is treated and then used to generate electricity.

As part of the settlement, MCUA has installed 19 additional landfill gas collection wells in its newest landfill cell, to improve its collection of landfill gasses. MCUA also agreed to an innovative plan to monitor the surface of the Middlesex landfill for excess methane emissions. Under the terms of the agreement, the defendants must collectively pay a civil penalty of more than $1.3 million.

The active Middlesex County landfill, owned and operated by MCUA, is located directly adjacent to and on top of the Edgeboro landfill, an older, closed landfill. The facility is located in East Brunswick Township, N.J. This “piggyback” landfill design, in which MCUA landfill space is constructed on top of the capped Edgeboro landfill, contributed to challenging environmental compliance issues. Today’s agreement was reached with the MCUA, and with NERC Middlesex Gas Co. LLC and Middlesex Generating Co. LLC, the operators of the Middlesex County landfill at the time the violations occurred.

“The United States filed these actions to ensure that landfill operators, including the defendants in these cases, follow the requirements of the Clean Air Act by capturing and controlling their emissions of harmful air pollutants,” said Ignacia S. Moreno, Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. “In resolving these actions, the United States secures relief that will improve air quality and harness landfill gasses to generate energy.”

“This agreement represents years of hard work to turn an environmental problem into an environmental asset,” said Judith Enck, EPA Regional Administrator. “Landfill gas is the by-product of the decomposing solid waste and mainly composed of carbon dioxide and methane. Instead of being allowed to escape into the atmosphere, landfill gas can be captured, converted, and used as an energy source. Converting landfill gases to energy offsets the need for coal and oil, and provides communities greater environmental protection by reducing the impacts on air quality.”

The first of the two agreements was reached on July 13, 2010, with EDI, Edgeboro Inc., NEO Edgeboro LLC and O’Brien Biogas IV LLC, the owner and operators of the Edgeboro landfill. As part of this settlement, EDI completed construction of a new $6 million landfill gas collection and control system to capture and redirect harmful air pollution from the landfill for potential reuse as an energy supply. The defendants also paid $750,000 in penalties to resolve the Clean Air Act violations.

The landfill owners and operators had failed to comply with federal law that applies to large scale landfills that have been expanded or modified since 1991. The Edgeboro landfill did not have an adequate landfill gas collection and control system in place, which allowed excessive amounts of landfill gases to escape into the surrounding area. The facility’s air pollution control devices were also not operated properly, and various types of monitoring were not conducted.

The nonmethane organic compounds (NMOC) in landfill gas contain volatile organic compounds and hazardous air pollutants that can result in adverse effects to the respiratory system, damage to the nervous system and cancer. Landfill gas also contain carbon dioxide and methane gas which contributes to climate change. Methane gas can also cause fires or explosions when it accumulates in structures on or off the landfill site.

After EPA determined that the Edgeboro facility’s old gas collection system was inadequate to continue to comply with federal law, it worked with the defendants to design a new, horizontal gas collection system, which is now installed and operational. EPA anticipates extensive environmental improvements at the landfill, resulting in the capture and control of about 129 tons/yr of NMOC, a contributor to smog, and 20,000 tons/yr of methane and 58,000 tons/yr of carbon dioxide, pollutants that contribute to climate change.

WASHINGTON – The United States has sued Gwenn Wycoff and Frank Ozak of Los Angeles seeking to bar them from promoting the formation and operation of "common-law" trusts for the purpose of tax avoidance, the Justice Department announced today.

According to the government’s complaint, filed in the U.S. District Court for the Central District of California, Wycoff and Ozak promote - through personal appearances, a website and a self-published two-volume work they co-wrote entitled The Art of Passing the Buck - the creation of common-law trusts. Wycoff and Ozak urge taxpayers to place all personal assets, as well as their businesses, into a variety of related trusts in order to create the impression that the taxpayer no longer owns the assets at issue. Thereafter, the complaint alleges, the trusts are ostensibly run by independent trustees (often Ozak and Wycoff themselves), when in fact the customers who created the trusts continue to exercise control over the assets placed into the trusts in many ways (although Ozak and Wycoff also made investment decisions with respect to some of their customers’ trusts without their knowledge).

A major goal in creation of such trusts, the complaint asserts, is to make it appear as if the taxpayers themselves have little to no income, and thereby evade the payment of federal income taxes. Indeed, as the complaint alleges, Wycoff and Ozak have their customers sign an "Oath of Privacy" (in which they agree to not disclose trust business or face penalties of up to $100,000) as a means of preventing customers from disclosing to the governmentfacts revealing the illegality of the trusts.

The government’s lawsuit contends that the trusts created with the assistance of Wycoff and Ozak (including one they created for themselves) either to be sham entities or to have made false and fraudulent claims in the trust income tax returns. Wycoff and Ozak’s misconduct, the complaint alleges, has caused great harm; the total amount of tax deficiencies assessed by the government to date in just four cases involving Wycoff and Ozak-created trusts is over $1.1 million.

In the past decade, the Justice Department’s Tax Division has obtained more than 470 injunctions to stop tax fraud promoters and tax return preparers. Information about these cases is available on the Justice Department website.

WASHINGTON – A federal jury in U.S. District Court for the District of Hawaii today found Noshir S. Gowadia, age 66, of Maui, guilty of five criminal offenses relating to his design for the People’s Republic of China (PRC) of a low signature cruise missile exhaust system capable of rendering a PRC cruise missile resistant to detection by infrared missiles. The jury also convicted Gowadia of illegally communicating classified information on three other occasions and unlawfully exporting technical information on those three occasions, illegally retaining defense information, and filing false tax returns for the years 2001 and 2002. The jury acquitted Gowadia of three other offenses alleging illegal communication of information to the PRC.

 

The verdict was announced by David Kris, Assistant Attorney General for National Security, and Florence T. Nakakuni, U.S. Attorney for the District of Hawaii. The verdict followed six days of deliberation and a 40-day trial in the District of Hawaii.

 

“Mr. Gowadia provided some of our country’s most sensitive weapons-related designs to the Chinese government for money. Today, he is being held accountable for his actions. This prosecution should serve as a warning to others who would compromise our nation’s military secrets for profit. I commend the many prosecutors, analysts, and agents - including those from the FBI and the Air Force - who were responsible for this investigation and prosecution,” said Assistant Attorney General Kris.

 

“The United States entrusts people with important and sensitive information critical to our nation’s defense. Today’s verdict demonstrates that there is a serious consequence to betraying that trust,” said U.S. Attorney Nakakuni.

 

“The FBI will continue to pursue anyone who treats America's national security as a commodity to be sold for personal enrichment,” said Charlene Thornton, Special Agent in Charge of the Honolulu Field Office of the FBI.

 

“This case is a superb example of interagency cooperation with one single goal in mind: to protect Americans from harm. The successful prosecution of Mr. Gowadia for espionage and other crimes highlights the many contributions of AFOSI personnel and our partner organizations worldwide,” said Colonel Keith Givens, Vice Commander, Headquarters, U.S. Air Force Office of Special Investigations.

 

Gowadia was first arrested in October 2005 on a criminal complaint alleging that he willfully communicated national defense information to a person not entitled to receive it. He was charged with additional violations in a 2005 indictment, a 2006 superseding indictment and a 2007 second superseding indictment.

 

According to information produced during the trial, Gowadia was an engineer with Northrop Grumman Corporation from approximately 1968 to 1986, during which time he contributed to the development of the unique propulsion system and low observable capabilities of the B-2 Spirit bomber, sometimes referred to as the “Stealth” bomber. Gowadia also continued to work on classified matters as a contractor with the with the U.S. government until 1997, when his security clearance was terminated.

 

Evidence at the trial revealed that from July 2003 to June 2005, Gowadia took six trips to the PRC to provide defense services in the form of design, test support and test data analysis of technologies for the purpose of assisting the PRC with its cruise missile system by developing a stealthy exhaust nozzle and was paid at least $110,000 by the PRC. The jury convicted Gowadia of two specific transmissions of classified information: a PowerPoint presentation concerning the exhaust nozzle of a PRC cruise missile project and an evaluation of the effectiveness of a redesigned nozzle, and a computer file providing his signature prediction of a PRC cruise missile outfitted with his modified exhaust nozzle and associated predictions in relation to a U.S. air-to-air missile.

 

The prosecution also produced evidence which documented Gowadia’s use of three foreign entities he controlled, including a Liechtenstein charity purportedly for the benefit of children, to disguise the income he received from foreign countries. In addition to demonstrating that Gowadia under-reported his income and falsely denied having control over foreign bank accounts for the two tax years involved in his convictions, the evidence at trial revealed that Gowadia had not paid any income tax since from at least 1997 until 2005 when he was arrested.

 

Chief U.S. States District Judge Susan Oki Mollway set sentencing for Nov. 22, 2010. At that time, Gowadia faces the following maximum terms of imprisonment.

• Life imprisonment for each of two counts of willfully communicating classified national defense information to the PRC with the intent that it be used to the advantage of the PRC or to the injury of the United States.
• Ten years imprisonment for each of three counts of willfully communicating classified national defense information to persons not entitled to receive it in the PRC and elsewhere, and one count of illegally retaining defense systems information at his Maui residence.
• Ten years imprisonment for each of four counts of exporting technical data related to a defense article without an export license (in violation of the Arms Export Control Act).
• Five years imprisonment for one count of conspiracy to violate the Arms Export Control Act.
• Ten years imprisonment for one money laundering charge based on proceeds from the Arms Export Control Act violations.
• Three years imprisonment for each of two counts of filing false tax returns for the years 2001 and 2002.

This case was investigated by FBI, the U.S. Air Force Office of Special Investigations, the Internal Revenue Service’s Criminal Investigation Division, U.S. Customs and Border Protection, U.S. Immigration and Customs Enforcement and the State Department’s Directorate of Defense Trade Controls.

 

The case was prosecuted by Assistant U.S. Attorney Kenneth M. Sorenson of the U.S. Attorney’s Office for the District of Hawaii and Senior Trial Attorney Robert E. Wallace Jr., of the Counterespionage Section of the Justice Department’s National Security Division.

WASHINGTON - CF Industries Inc. (CFI) has agreed to spend approximately $12 million to implement facility-wide operational changes to reduce and properly manage hazardous wastes generated at its Plant City, Fla., phosphoric acid and ammoniated fertilizer manufacturing facility, the Justice Department and Environmental Protection Agency (EPA) announced today. The settlement resolves CFI’s Resource Conservation and Recovery Act (RCRA) violations and requires the company to pay a civil penalty of $701,500 and provide $163.5 million in financial assurances to guarantee appropriate closure and long-term care of the facility. This is the first case concluded under EPA’s National Enforcement Initiative for Mining and Mineral Processing.

CFI, a manufacturer of phosphate and nitrogen fertilizers, operates a 400-acre phosphogypsum stack and associated ponds for storing mineral processing wastes from its phosphoric acid production operations, in which the company was commingling hazardous wastes from its fertilizer plant. Between December 2004 and January 2005, inspectors from EPA and the Florida Department of Environmental Protection discovered that CFI was treating, storing and disposing of hazardous wastes in its stack and associated ponds without a permit and failing to meet land disposal restrictions required under RCRA, which addresses the appropriate handling, storage and disposal of hazardous wastes. The manufacturer also had failed provide adequate financial assurance for closure, long-term care and third-party liability for its facility.

As part of the agreement, CFI has implemented comprehensive waste containment and spill prevention measures to better manage its wastes; has reconfigured scrubbers to eliminate all corrosive fertilizer wastewaters and reduce ammonia releases to the environment; and has constructed a treatment system for hazardous wastes generated in fertilizer operations. CFI additionally has completed the full site investigation also required under the settlement to assess the degree of environmental contamination emanating from the phosphogypsum stacks and ponds, and will take steps to remove and treat contaminated soils. In addition, the company will implement several management plans to ensure future compliance with RCRA.

CFI also has agreed to financial assurance to cover the $163.5 million needed to fund all closure and long-term care obligations after the facility’s useful life ends. The company further will pay a civil penalty of $701,500 for its past violations, to be split evenly between the United States and the Florida Department of Environmental Protection, which is a co-plaintiff in this action.

Phosphoric acid is primarily used for agricultural chemical fertilizers. In a national enforcement effort, EPA has focused on compliance in the phosphoric acid industry because of the high risk of releases of acidic wastewaters at these facilities, which can cause groundwater contamination and fish kills. Examples include a 65 million gallon release of acidic wastewaters from the Mosaic Riverview facility into Tampa Bay which led to a massive local fish kill. In addition, the state of Florida has incurred nearly $200 million in clean-up costs for treatment of acidic wastewaters at the bankrupt Mulberry Phosphates Piney Point facility in Polk County, Fla. A 2007 incident at the Agrifos phosphoric acid facility in Houston released 50 million gallons of acidic wastewaters into the Houston Ship Channel.

Mining and mineral processing facilities generate more toxic and hazardous waste than any other industrial sector, based on EPA’s Toxic Release Inventory. If not properly managed, these facilities pose a high risk to human health and the environment. Since 2003, EPA has been investigating a total of twenty phosphoric acid facilities in seven states.

"Mismanagement of hazardous waste from mining and mineral processing is a serious matter," said Assistant Attorney General Ignacia S. Moreno. "The companies targeted in the National Enforcement Initiative for Mining and Mineral Processing cannot proceed with business as usual. The agreement being lodged today requires, in addition to future compliance and an appropriate penalty, that CFI reduce and change its handling of hazardous wastes throughout its facility."

"Wastes from mineral processing and associated fertilizer production can pose a serious risk to our nation’s drinking water and the health of families," said Cynthia Giles, assistant administrator for EPA’s Office of Enforcement and Compliance Assurance. "Mining and mineral processing is one of our National Enforcement Initiatives and we are working to minimize or eliminate risks to communities and the environment from illegal hazardous waste operations at phosphoric acid and other high risk mineral processing facilities."

The proposed settlement agreement, lodged in the U.S. District Court for the Middle District of Florida, is subject to a 30-day public comment period and approval by the federal court. A copy of the consent decree is available on the Justice Department website at www.justice.gov/enrd/Consent_Decrees.html and on the EPA website at http://cfpub.epa.gov/compliance/cases/index.cfm.

WASHINGTON – Jose Garcia, 55, who was a fugitive for nearly two years, pleaded guilty today in U.S. District Court in Miami for his participation in a Medicare fraud scheme involving a Miami-area HIV clinic, the Departments of Justice and Health and Human Services (HHS) announced. Garcia was indicted in 2008 and self-surrendered to FBI agents in May 2010.

Garcia pleaded guilty before U.S. District Judge Adalberto Jordan to one count of conspiracy to cause the submission of false claims to the Medicare program and to pay health care kickbacks; and one count of conspiracy to commit health care fraud. At sentencing, scheduled for Nov. 18, 2010, Garcia faces a maximum penalty of five years in prison for the false claims and kickback conspiracy count and a maximum penalty of 10 years in prison for the health care fraud conspiracy count.

According to court documents, Garcia operated Global Med-Care Corp. Inc., a medical clinic in Miami that purported to specialize in treating patients with HIV. Garcia, his co-defendant Nayda Freire and their co-conspirators caused Global to submit claims to the Medicare program for expensive HIV medication that was medically unnecessary or never provided. In return for a share of Global’s profits, Garcia and Freire agreed with their co-conspirators to oversee the staff necessary to operate Global, the Medicare patients whom Global billed to the Medicare program and the transportation for the patients. Garcia admitted that he knew that Global would need to pay kickbacks to its patients and that Global could bill Medicare for HIV infusion services three times a week, for up to three months, for each patient. Garcia also admitted that from approximately April 2003 through approximately August 2003, Global submitted approximately $10.9 million in claims to the Medicare program for HIV infusion services that were never provided and/or medically unnecessary.

Freire pleaded guilty on Aug. 28, 2008, to one count of conspiracy to defraud the Medicare program, and was sentenced by Judge Jordan on Nov. 12, 2008, to 30 months in prison. Freire was also sentenced to two years of supervised release following her prison term and ordered to pay $7.9 million in restitution to the Medicare program.

Freire admitted that after payments from Medicare were made into the bank accounts of Global Med-Care, she and others transferred approximately $6 million of the fraud proceeds to sham management, marketing and investment companies owned and operated by co-conspirators Carlos, Luis and Jose Benitez.  Co-conspirators Carlos and Luis Benitez and Thomas McKenzie were charged separately with health care fraud and money laundering crimes in an indictment unsealed on June 11, 2008.  According to the separate indictment, these co-conspirators allegedly provided the money and staff necessary to open Global Med-Care; the Medicare patients whom the clinic would bill to the Medicare program; and transportation for the HIV patients who visited the clinic.  That indictment also alleges that Carlos and Luis Benitez were the true owners of Global Med-Care. 

The three Benitez brothers and McKenzie were charged with participating in the commission of approximately $109 million in HIV infusion fraud and money laundering through Global Med-Care and 10 other HIV infusion clinics.  On Sept. 18, 2008, McKenzie pleaded guilty to one count of conspiracy to commit health care fraud and one count of submitting false claims to the Medicare program, and also admitted his role in a $119 million HIV infusion fraud scheme.  McKenzie was sentenced by U.S. District Judge Alan S. Gold on Dec. 18, 2008, to 14 years in prison in connection with his role in the HIV infusion Medicare fraud scheme.  In addition to the prison sentence, McKenzie was ordered to serve three years of supervised release following his prison term and pay $84 million in restitution to the Medicare program.  The Benitez brothers remain fugitives.

Today’s guilty plea was 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 Global case was prosecuted by Deputy Chief Hank Bond Walther and Trial Attorney N. Nathan Dimock of the Criminal Division’s Fraud Section, and investigated by the FBI and HHS Office of Inspector General (HHS-OIG). The case was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the 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

WASHINGTON – The Mercator Corporation, a merchant bank with offices in New York, pleaded guilty today in federal court in Manhattan, N.Y., to one count of making an unlawful payment to a senior government official of the Republic of Kazakhstan, in violation of the Foreign Corrupt Practices Act (FCPA), announced Assistant Attorney General Lanny A. Breuer of the Criminal Division and U.S. Attorney Preet Bharara for the Southern District of New York. Additionally, James H. Giffen, 69, of Mamaroneck, N.Y., and Mercator’s chairman, pleaded guilty today in federal court in Manhattan to one count of failing to disclose control of a Swiss bank account on his income tax return. Both pleas were before U.S. District Judge William H. Pauley III.

According to court documents, Mercator advised Kazakhstan in connection with various transactions related to the sale of portions of Kazakhstan’s oil and gas wealth. Three senior officials in the government of Kazakhstan had the power to substantially influence whether Mercator obtained and retained lucrative business, as well as the authority to pay Mercator substantial success fees if certain oil transactions closed, as well as to decide whether or not those transactions would close. According to court documents, Mercator was therefore dependent upon the goodwill of those senior officials, and in an effort to maintain its lucrative position, Mercator caused the purchase of two snowmobiles in November 1999. The snowmobiles were shipped to Kazakhstan for delivery to one of the officials.

According to the criminal information to which Giffen pleaded guilty, Giffen filed a U.S. Individual Income Tax Return, Form 1040, on March 27, 1997, for himself for the calendar year 1996, which failed to report that he maintained an interest in, and a signature and other authority over, a bank account in Switzerland in the name of Condor Capital Management, a British Virgin Islands corporation he controlled.

In 2007, the United States brought a separate, related civil forfeiture action in U.S. District Court in Manhattan against approximately $84 million on deposit in Switzerland.  The civil complaint alleged that the funds were traceable to unlawful payments to senior Kazakh officials in connection with oil and gas transactions arranged by Mercator for Kazakhstan.  According to a 2007 agreement between the United States, Switzerland and Kazakhstan, the funds are being used by a non-governmental organization in Kazakhstan, independent of the Kazakh Government, to benefit underprivileged Kazakh children.

Mercator faces a maximum fine of the greater of $2 million or twice the gross gain or loss resulting from the offense. Giffen faces a maximum sentence of one year in prison and a fine of up to $25,000.

The case was prosecuted by Assistant U.S. Attorneys Anirudh Bansal and Lee Renzin of the U.S. Attorney’s Office for the Southern District of New York and Trial Attorney James M. Koukios of the Criminal Division’s Fraud Section. Assistant U.S. Attorney Barbara A. Ward and Assistant Chief Daniel H. Claman of the Criminal Division’s Asset Forfeiture and Money Laundering Section are handling the related civil forfeiture proceedings. The Criminal Division’s Office of International Affairs provided assistance in this case. The matter was investigated by the FBI.

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.

 

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.

 

 

 

 

 

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.

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.

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.

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.

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.

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.

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.

 

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.

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 )

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.

 

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.

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.

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.

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/.

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

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

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.

 

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.

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.

 

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

 

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.

 

 

 

 

 

 

 

 

 

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.

 

 

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.

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 .

 

"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."

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.

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)

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.

 

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.

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.

 

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.