District Not Recorded

WASHINGTON – Daimler AG, a German corporation, and three of its subsidiaries have resolved charges related to a Foreign Corrupt Practices Act (FCPA) investigation into the company’s worldwide sales practices, the Department of Justice announced today.

At a hearing today before U.S. District Court Judge Richard J. Leon in the District of Columbia, Daimler AG’s Russian subsidiary DaimlerChrysler Automotive Russia SAO (DCAR), now known as Mercedes-Benz Russia SAO, and its German subsidiary, Export and Trade Finance GmbH (ETF), each pleaded guilty to criminal informations charging the companies with one count of conspiracy to violate the anti-bribery provisions of the FCPA and one count of violating those provisions. As part of the plea agreements, DCAR and ETF agreed to pay criminal fines of $27.26 million and $29.12 million, respectively.

Daimler AG entered into a deferred prosecution agreement and agreed to the filing of a criminal information charging that company with one count of conspiracy to violate the books and records provisions of the FCPA and one count of violating those provisions. Daimler AG’s Chinese subsidiary DaimlerChrysler China Ltd. (DCCL), now known as Daimler North East Asia Ltd., also entered into a deferred prosecution agreement and agreed to the filing of a criminal information charging it with one count of conspiracy to violate the anti-bribery provisions of the FCPA and one count of violating those provisions. In total, Daimler AG and its subsidiaries will pay $93.6 million in criminal fines and penalties.

According to court documents, Daimler AG, whose shares trade on multiple exchanges in the United States, engaged in a long-standing practice of paying bribes to foreign government officials through a variety of mechanisms, including the use of corporate ledger accounts known internally as “third-party accounts” or “TPAs,” corporate “cash desks,” offshore bank accounts, deceptive pricing arrangements and third-party intermediaries. According to court documents, Daimler AG and its subsidiaries made hundreds of improper payments worth tens of millions of dollars to foreign officials in at least 22 countries – including China, Croatia, Egypt, Greece, Hungary, Indonesia, Iraq, Ivory Coast, Latvia, Nigeria, Russia, Serbia and Montenegro, Thailand, Turkey, Turkmenistan, Uzbekistan, Vietnam and others – to assist in securing contracts with government customers for the purchase of Daimler vehicles. The contracts were valued at hundreds of millions of dollars. In some cases, Daimler AG or its subsidiaries wire transferred these improper payments to U.S. bank accounts or to the foreign bank accounts of U.S. shell companies, in order for those entities to pass on the bribes. Within Daimler AG and its subsidiaries, bribe payments were often identified and recorded as “commissions,” “special discounts,” and/or “nützliche Aufwendungen” or “N.A.” payments, which translates to “useful payment” or “necessary payment,” and was understood by certain Daimler employees to mean “official bribe.” According to court documents, certain corrupt payments continued as late as January 2008, after the Department of Justice had begun its investigation. In all cases, Daimler AG improperly recorded these corrupt payments in its corporate books and records. Daimler AG admitted that it earned more than $50 million in profits from corrupt transactions with a nexus to the territory of the United States. Daimler AG also admitted that it agreed to pay kickbacks to the former Iraqi government in connection with contracts to sell vehicles to Iraq under the U.N.’s Oil for Food program.

“In a decade-long scheme involving tens of millions of dollars, Daimler AG and three of its subsidiaries brazenly offered bribes in exchange for business around the world,” said Principal Deputy Assistant Attorney General Mythili Raman of the Criminal Division.  “Using offshore bank accounts, third-party agents and deceptive pricing practices, these companies saw foreign bribery as a way of doing business.  The guilty pleas and deferred prosecution agreements entered today by Daimler AG and its subsidiaries should serve as a message to other companies subject to the FCPA and conducting business around the world that corrupt business is bad business.”

In connection with its guilty plea, DCAR admitted that it made improper payments to Russian federal and municipal government officials to secure contracts to sell vehicles by over-invoicing the customer and paying the excess amount back to the government officials, or to other designated third parties that provided no legitimate services to DCAR or Daimler AG. When requested, DCAR or Daimler AG employees caused the wire transfer of payments from Daimler AG’s bank accounts in Germany to, among other destinations, U.S. and Latvian bank accounts held by shell companies with the understanding that the money, in whole or in part, was for the benefit of Russian government officials.

In connection with its guilty plea, ETF admitted that it made corrupt payments directly to Croatian government officials and to third parties, including two U.S.-based corporate entities, with the understanding that the payments would be passed on, in whole or in part, to Croatian government officials, to assist in securing the sale of 210 fire trucks.

In connection with its deferred prosecution agreement, DCCL admitted that it made improper payments in the form of commissions, delegation travel, and gifts for the benefit of Chinese government officials or their designees in connection with sales of commercial vehicles and Unimogs to various Chinese government customers. DCCL admitted that in certain cases it used U.S.-based agents to facilitate the bribe payments.

Under the terms of its deferred prosecution agreement, Daimler AG agreed to retain an independent compliance monitor for a three-year period to oversee the company’s continued implementation and maintenance of an FCPA compliance program, and to make reports to the company and the Department of Justice. DCAR, ETF and DCCL are covered by the monitoring provisions of the deferred prosecution agreement with their parent company Daimler AG. Daimler AG also agreed to fully cooperate with investigations by U.S. and foreign authorities of the company’s corrupt payments.

Today, Judge Leon also entered a separate judgment against Daimler AG resolving a related civil complaint filed by the U.S. Securities and Exchange Commission (SEC). Daimler AG agreed to pay $91.4 million in disgorgement of profits relating to those violations.

The criminal case is being prosecuted by Assistant Chief John S. (Jay) Darden and Deputy Chief Mark F. Mendelsohn of the Criminal Division’s Fraud Section. The department acknowledges and expresses its appreciation for the significant assistance provided by the staff of the SEC during the course of this investigation. The department also acknowledges the significant contributions to this investigation by former Fraud Section Trial Attorney Amanda L. Riedel.

WASHINGTON - Shell Chemical L.P. and Shell Chemical Yabucoa have agreed to install pollution reduction equipment on two petroleum refining facilities at an estimated cost of $6 million as part of two comprehensive Clean Air Act settlements, the Justice Department and the Environmental Protection Agency today announced.

The two companies will also pay a combined $3.3 million civil penalty to the United States as well as Alabama and Louisiana and $200,000 to Louisiana organizations for environmental education and emergency operations.

Under the settlements, Shell Chemical L.P. will apply new air pollution control technologies and implement other measures to reduce emissions from some of the largest emitting units at its petroleum refining facilities in Saraland, Ala. and St. Rose, La.

“These two settlements are excellent examples of businesses working with government to achieve compliance at their facilities around the country, which will benefit the health of local communities and the environment,” said Ignacia S. Moreno, Environment and Natural Resource Division Assistant Attorney General. “We will continue to work with industry to achieve compliance under the Clean Air Act to remove harmful pollution from the air we breathe.”

“These settlements demonstrate EPA’s continuing commitment to increase compliance and reduce emissions from this industrial sector” said Cynthia Giles, Assistant Administrator for EPA’s Office of Enforcement and Compliance Assurance. “As a result of today’s actions, the communities living nearby these refineries can look forward to cleaner, healthier air.”

Shell Chemical Yabucoa operates a facility in Yabucoa, Puerto Rico. For independent business reasons, Shell Chemical Yabucoa decided to shut down its refining operations at the facility in Puerto Rico in the summer of 2009. The company still continues to operate the existing gasoline terminal there. Collectively the three facilities had a combined production capacity of approximately 235,000 barrels per day.

In addition, the two refineries in Alabama and Louisiana, and the terminal operations in Puerto Rico will upgrade their leak-detection and repair practices to reduce harmful emissions from pumps and valves, implement programs to minimize the number and severity of flaring events and adopt new strategies for ensuring continued compliance with benzene waste requirements under the Clean Air Act.

Together, both settlements will reduce air emissions of sulfur dioxide (SO2), nitrogen oxides (NOx) and other harmful pollutants by more than 1,450 tons per year.

The annual emission reductions from all three refineries, including the emissions associated with the shutdown at Yabucoa, are estimated to be approximately 645 tons of SO2 and approximately 813 tons of NOx, as well as additional reductions of volatile organic compounds and benzene.

The settlements are the 25th and 26th in a series of “global” multi-issue, multi-facility settlements being pursued by EPA under its National Petroleum Refinery Initiative. With today’s settlements, 102 refineries operating in 30 states and territories are now covered by global settlements, representing more than 89 percent of the nation’s refining capacity.

For more information on EPA’s Petroleum Refinery Initiative, please visit http://www.epa.gov/compliance/resources/cases/civil/caa/oil/index.html.

The states of Alabama and Louisiana actively participated in and are joining in the settlement with Shell Chemical, which was filed with the U.S. District Court for the Southern District of Texas. The settlement with Shell Chemical Yabucoa was filed with the U.S. District Court for the District of Puerto Rico. Each settlement is subject to a 30-day public comment period and approval by the federal court. Copies of the proposed consent decrees are available on the Justice Department Web site at http://www.justice.gov/enrd/Consent_Decrees.html.

WASHINGTON – Two Baton Rouge, La., tax return preparers were indicted today on charges of aiding in the preparation of false tax returns, the Justice Department and Internal Revenue Service (IRS) announced. Cynthia Peters, who worked at Jasmine and Melissa’s Tax Service in Baton Rouge, was charged with seven counts of aiding in the preparation of false tax returns for clients. In a separate indictment, Melissa Edwards, who also worked at Jasmine and Melissa’s Tax Service, was charged with ten counts of aiding in the preparation of false tax returns for clients.

 

According to the indictment filed against her, Peters prepared fraudulent tax returns for seven clients that reported false amounts of telephone excise tax refund (TETR) credits. The TETR credit was a one-time credit available to taxpayers for the 2006 year. The credit was available in standard amounts ranging from $30 to $60 or in the amount of actual excise tax paid, which was 3% of the cost of long distance and bundled service over the period beginning after Feb. 28, 2003, and before Aug. 1, 2006. According to the indictment, Peters filed taxpayer returns claiming fraudulent TETR credits in amounts ranging from $1,190 to $4,900.

 

According to the indictment filed against her, Edwards prepared fraudulent tax returns for 10 clients that reported false amounts of TETR credits. The fraudulent TETR credit amounts ranged from $4,800 to $7,475.

 

An indictment is merely a formal charge by the grand jury. Each defendant is presumed innocent unless and until proven guilty in a U.S. District Court. If convicted, Peters faces a maximum potential sentence of 21 years in prison and a maximum fine of $1,750,000. If convicted, Edwards faces a maximum potential sentence of 30 years in prison and a maximum fine of $2,500,000.

 

Both cases are being prosecuted by Tax Division attorneys Kevin Lombardi and Matthew Mueller. The cases were investigated by the IRS, Criminal Investigation Division.

 

Additional information about the Justice Department’s Tax Division and its enforcement efforts may be found at www.usdoj.gov/tax/. Additional information about tax fraud schemes to watch out for may be found on the IRS Criminal Investigation Web site.

WASHINGTON - A settlement with Honeywell International Inc. estimated to be worth more than $10 million will ensure that cleanup of the remaining areas of the Allied Chemical and Ironton Coke Superfund Site in Ironton, Ohio, will move forward, the Justice Department and U.S. Environmental Protection Agency (EPA) announced today.

The agreement, lodged in U.S. District Court in Cincinnati, resolves federal liability claims against Honeywell for cleanup of the remaining areas of the site. As a result of this settlement with Honeywell and the previous agreements with Honeywell and another potentially responsible party, Amcast Industrial Corp., the United States will recover substantially all of the costs incurred by the government in responding to the contamination at the site. This settlement and the previous agreements will result in cleanup work estimated to cost in excess of $75 million.

The Allied Chemical and Ironton Coke site lies on the banks of the Ohio River near the point where the Ohio, Kentucky and West Virginia borders converge. The facility produced a number of products during its operations including phthalic anhydride, pitch, creosote, naphthalene, anthracene and carbolic acids. The process wastes included anthracene residue, anthracene salts, phthalic anhydride residue and coal tar pitch scrap. The result of operations and waste disposal practices was extensive contamination of soil, sediment (mud) in nearby Ice Creek and ground water.

Under the settlement, Honeywell International Inc. will be responsible for cleanup and containment of the former tar plant area of the site. Honeywell will also pay for all of the United States’ response costs relating to the tar plant area, including oversight costs incurred by EPA. Contaminants released at the tar plant area include polycyclic aromatic hydrocarbons, benzene, toluene, and naphthalene.

The remedy will address soil, soil vapor and Ohio River sediment contaminated by the former tar plant. Contaminated soil in this area will be covered with a cap that complies with Ohio solid waste regulations; land use controls will be put in place to ensure the cap remains intact and thereby protects people from remaining contaminated soil and soil vapor; and dredging, off-site disposal and/or capping will address contaminated sediment in the Ohio River adjacent to the tar plant’s loading dock. The total cost for the selected remedy is estimated to be approximately $10 million.

The tar plant, located on South Third Street, manufactured products from the crude tar produced in the coking process at the now-closed coke plant. During its period of operation, the plant contained approximately 124 above-ground storage tanks and process tanks varying in size from several hundred to 750,000 gallons. The site contains three areas that are major sources of contamination: the tar plant area, which is the subject of this agreement; the coke plant/lagoon area, a dismantled former coke plant; and the Goldcamp disposal area, a former sand and gravel pit used as a disposal area for chemical process wastes. Cleanup activities associated with the coke plant/lagoon area and the Goldcamp disposal area have been performed and response costs related to these areas recovered under separate agreements. The contaminated site-wide groundwater beneath the three source areas is continuously being treated by an on-site waste water treatment plant and monitored for compliance.

“We are pleased that under this agreement Honeywell will perform cleanup of the remaining areas of the Allied Ironton Site and reimburse the government’s costs of overseeing the cleanup. I remind those who are responsible for polluting the environment that they will be held accountable for not only cleanup costs but also for future response and oversight costs,” said Ignacia S. Moreno, Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division.

“The cleanup required by this consent decree will complete all work at the site and open the door for the potential reuse of some portions of the property,” said Richard Karl, Superfund Director for EPA Region 5.

The consent decree, lodged in the U.S. District Court for the Southern District of Ohio, 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 Web site at http://www.justice.gov/enrd/Consent_Decrees.html.

More information on the Allied Ironton Superfund Site can be found at http://www.epa.gov/region5/superfund/sites/alliedironton.

Complaint

Consent Decree

WASHINGTON – Harold Hutcheson, a former captain at the Northwest Correctional Complex (NCC), in Tiptonville, Tenn., pleaded guilty today in federal court in Jackson, Tenn., to violating the civil rights of an inmate and then lying about it during the state and federal investigations, the Justice Department announced.

During his guilty plea, Hutcheson admitted that on April 15, 2008, while working as a corrections officer at the NCC, he used unreasonable force when he repeatedly kicked a handcuffed inmate without provocation. Hutcheson agreed that his assault violated the inmate’s constitutional right to be free from cruel and unusual punishment by law enforcement officers. Additionally, Hutcheson admitted that he obstructed justice when he provided false information about the incident to federal investigators.

Hutcheson faces a maximum sentence of six years in prison and a maximum fine of $350,000.

Previously, Ryan Joshua Jones and Roger Forrester, both former corrections officers at NCC, each pleaded guilty for their roles in the assault of the inmate and for lying during the investigation. Jones and Forrester are scheduled to be sentenced on July 22, 2010.

“Correctional officers are given a great amount of authority to effectively carry out their critical public safety responsibilities. The Justice Department will aggressively prosecute those officers who abuse that authority by violating the rights of those under their supervision,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division.

Today’s plea resulted from the investigative work of the FBI and the Civil Rights Division’s Criminal Section. The case is being prosecuted by Civil Rights Division Trial Attorneys Jared Fishman and Chris Lomax.

WASHINGTON — An indictment by a Manhattan grand jury was unsealed today charging a former contractor for participating in a bid-rigging conspiracy related to contracts at New York Presbyterian Hospital (NYPH) and for filing a false tax return. The indictment also charges the former contractor and a co-conspirator for their participation in a conspiracy to defraud the Internal Revenue Service (IRS), the Department of Justice announced today.

The three-count indictment, originally filed under seal on Feb. 18, 2010, was unsealed today in the U.S. District Court in Manhattan. The indictment charges David Porath, a former owner of a maintenance and insulation company, with engaging in a conspiracy to rig bids on NYPH contracts for re-insulation services. According to the indictment, between approximately 2000 and March 2005, NYPH awarded a number of contracts for re-insulation services to Porath’s company. Porath and his co-conspirators created the false appearance that NYPH was awarding contracts based on competitive bids by submitting fraudulently high bids by competitor companies, which allowed Porath’s company to appear to be the low bidder and thus win the contracts.

The indictment further charges Porath and another individual, Andrzej Gosek, with participating in a conspiracy to defraud the IRS. Gosek was the owner of a Langhorne, Pa., company that provides asbestos abatement services. According to the indictment, between October 2000 and February 2005, Porath gave Gosek checks made out to companies in Brooklyn, N.Y., purportedly for work done at NYPH by those companies as sub-contractors to Porath’s company when, in fact, the companies had not performed such work. The Brooklyn companies cashed the checks and Gosek delivered the cash back to Porath. Based upon these checks to the Brooklyn companies, Porath took false deductions on his company’s and his personal federal tax returns, allowing Porath to fraudulently reduce his taxable income. Porath is also charged with filing a false federal tax return on or about Feb. 17, 2005, which substantially understated his income.

The bid-rigging violation that Porath is charged with carries a maximum penalty of 10 years in prison, and a $1 million fine. The tax fraud conspiracy violation that Porath and Gosek are charged with carries a maximum penalty of five years in prison, and a $250,000 fine. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victim of the crime, if either of those amounts is greater than the statutory maximum fine. Porath’s violation of false subscription on his tax return carries a maximum penalty of three years in prison and a $100,000 fine.

The charges announced today resulted from an ongoing federal antitrust investigation of bid rigging, fraud, bribery and tax-related offenses relating to contracts administered by the Facilities Operations Department and the Engineering Department at NYPH and the Engineering Department at Mount Sinai Medical Center. To date, eight individuals and three companies have pleaded guilty to charges arising out of the same investigation.

The investigation is being conducted by the Antitrust Division’s New York Field Office, the FBI and the IRS Criminal Investigation’s New York Field Office. Anyone with information concerning bid rigging, bribery, tax offenses or fraud related to contracts administered by the Facilities Operation Department or the Engineering Department at NYPH or the Engineering Department at Mount Sinai should contact the Antitrust Division’s New York Field Office at 212-264-9308 or the FBI’s New York Division at 212-384-1000 or visit http://www.justice.gov/atr/contact/newcase.htm.

WASHINGTON—The federal government announced today that it would remove the remaining 52 ships that currently sit in the Suisun Bay as part of an agreement with environmental groups that was filed in federal court in Sacramento, Calif., the Department of Justice and Department of Transportation announced today.

The Department of Transportation’s Maritime Administration (MARAD) has already begun removing obsolete ships from Suisun Bay for recycling including four ships that have been removed since November 2009 and a fifth that was removed today.

The agreement outlines MARAD’s commitment to remove 20 of the ships that are in the poorest condition prior to Sept. 30, 2012. Before their removal, these ships will be sent to a local dry-dock for cleaning that involves removing marine growth from the underwater hull and removing flaking paint from areas above the water. All other ships at the site will be cleaned of flaking paint within two years and removed from the fleet by Sept. 30, 2017.

Additionally, MARAD will clean the horizontal surfaces of the ships every 90 days to prevent peeling paint from dropping into the water, inspect the ships on a monthly and quarterly basis and collect water runoff samples for testing. No new ships with excess flaking will be admitted to the site.

“This agreement is evidence of the Obama Administration’s pledge to work with our local partners toward a common goal of better protecting the environment,” said U.S. Secretary of Transportation Ray LaHood.

“The Department of Justice is pleased to have negotiated a resolution of this matter that is good for the environment and a demonstration of effective state and federal cooperation,” said Ignacia S. Moreno, Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. “All the parties are to be commended for developing a comprehensive program for the management of the Suisun Bay Reserve Fleet.”

“We are following through on our commitment to clean and maintain these vessels in an environmentally sound manner, said David Matsuda, Acting Administrator of the USDOT’s Maritime Administration, the agency tasked with managing the fleet. “We are moving expeditiously to remove the worst-polluting ships first and diligently moving to clean the rest.”

The Suisun Bay Reserve Fleet Site serves as a reserve of ships for national defense and national emergency purposes. MARAD’s two other fleet storage sites are in James River, Va. and Beaumont, Texas.

WASHINGTON - Eight promoters of a fraudulent tax and debt elimination scheme were convicted of tax, wire fraud and money laundering charges by a federal jury following a month long trial in Pensacola, Fla., the Justice Department and Internal Revenue Service (IRS) announced today. The defendants, who were indicted in September 2008, promoted fraudulent schemes through Pinnacle Quest International, also known as PQI and Quest International.

The charges and convictions were as follows:

Claudia Constance Hirmer and Mark Steven Hirmer of Niceville, Fla., were each convicted of conspiracy to defraud the United States and to commit wire fraud, conspiracy to commit money laundering, and tax evasion.

Eugene “Gino” Joseph Casternovia of Ashland, Ore., Arnold Ray Manansala of Renton, Wash., Dover Eugene Perry of Renton, Wash., and Michael Guy Leonard of Troy, N.Y., were each convicted of conspiracy to defraud the United States and to commit wire fraud, and conspiracy to commit money laundering.

Mark Daniel Leitner of Fairport, N.Y., and Arthur Ramirez Merino of Renton, Wash., were each convicted of 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 purported “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 Financial Solutions, owned and operated by defendant Arthur Merino. 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.

According to the evidence presented during trial, 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.

As established at trial by the government, defendants Claudia Hirmer, Dover Perry, Arnold Manansala, Michael Leonard and Arthur Merino were members of the executive council of PQI. The executive council selected vendors, guided the day-to-day operations of the company, planned offshore conferences, and fielded customers complaints, which were voluminous. Defendant Mark Hirmer managed PQI’s finances on a day-to-day basis. Between 2002 and 2008, PQI had over 11,000 members throughout the United States. Executive council member Joseph McPhillips pleaded guilty prior to trial.

According to the evidence presented, none of the defendants filed tax returns while they were involved in the PQI conspiracy. Claudia Hirmer and Mark Hirmer were convicted for evading the payment of over $2 million in income taxes, penalties, and interest for years 1996 through 2001. The Hirmers sought to evade the payment of their tax liability in numerous ways, including extensive use of cashier’s checks and cash and extensive use of nominee companies and offshore accounts. Additionally, the Hirmers attempted to strip the equity out of one of their homes by granting a bogus mortgage to a Panamanian nominee entity they controlled.

Judge Rodgers scheduled sentencing for July 6, 2010. Claudia Hirmer and Mark Hirmer each face a maximum sentence of 30 years in prison and a maximum fine of $1 million. Casternovia, Manansala, Perry, and Leonard each face a maximum sentence of 25 years in prison and a maximum fine of $750,000. Leitner and Merino each face a maximum sentence of five years in prison and a maximum fine of $250,000.

“Today’s convictions 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.”

“The use of abusive trust schemes and fraudulent debt elimination tactics intended to conceal income from the IRS isn't tax planning; it’s criminal activity. There is no secret formula that can eliminate a person's tax obligations,” said Victor S. O. Song, Chief, IRS Criminal Investigation. “Today's verdict reinforces our commitment to every American taxpayer that we will identify and prosecute those who promote illegal financial transactions designed to evade the payment of taxes.”

Judge Rodgers set aside the jury verdict as to a ninth defendant, Robert Pendell, and acquitted him of all counts.

Acting Assistant Attorney General DiCicco commended the IRS - Criminal Investigation Division special agents who investigated the case, as well as Tax Division trial attorneys Michael J. Watling, Adam F. Hulbig, and Jonathan R. Marx, who prosecuted the case.

WASHINGTON – A two-count bill of information filed today in federal court charges New Orleans Police Department (NOPD) Officer Michael Hunter with misprision of a felony (for concealing a known felony) and with conspiring with fellow NOPD officers to obstruct justice by covering up a police-involved shooting in the days after Hurricane Katrina, announced 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.

The Sept. 4, 2005, shooting on the Danziger Bridge left two civilians dead and four others seriously injured. According to the bill of information, the incident involved at least six other NOPD officers whom Hunter, 33, of Slidell, La., drove to the Danziger Bridge in a Budget rental truck. On the east side of the bridge, the officers encountered six civilians (five members of the B Family, and J. B., a friend of the B Family), who were walking across the bridge to get food and supplies from a supermarket.

Officers fired at the group of civilians, killing J. B. and seriously wounding four members of the B Family. Hunter and other officers then traveled to the west side of the bridge, where they encountered Lance and Ronald Madison, who were crossing the bridge on their way to the dentistry office of one of their other brothers. On the west side of the bridge, an officer shot and killed Ronald Madison, a 40-year-old man who had a severe disability.

The two-count bill of information charges Hunter with violating the federal conspiracy statute by agreeing with other officers to provide false and misleading information about the Sept. 4, 2005, shootings on the Danziger Bridge and with covering up other information in order to ensure that the shootings would appear to be legally justified. Hunter also was charged with misprision of a felony. The defendant faces a possible maximum sentence of eight years in prison and a fine of $500,000.

This case, which is ongoing, is being investigated by the New Orleans Field Office of the FBI, and is being prosecuted by Deputy Chief Bobbi Bernstein and Trial Attorney Forrest Christian of the Justice Department’s Civil Rights Division, along with Assistant U.S. Attorney Julia K. Evans for the Eastern District of Louisiana. No further details or information will be made available at this time.

WASHINGTON - The Justice Department announced today that it has reached an out-of-court settlement in the matter of J.L. v. Mohawk Central School District, a lawsuit which the United States sought to join to address alleged violations of the Equal Protection Clause of the Fourteenth Amendment to the United States Constitution and Title IX of the Education Amendments of 1972, both of which prohibit discrimination based on sex, including discrimination based on gender stereotypes.

On Jan. 14, 2010, in the Northern District of New York, the United States sought to join a lawsuit filed by the New York Civil Liberties Union on behalf of a student, J.L., who was the alleged victim of severe and pervasive student-on-student harassment based on sex. According to the United States’ motion, J.L. failed to conform to gender stereotypes in both behavior and appearance. He exhibited feminine mannerisms, dyed his hair, wore makeup and nail polish, and maintained predominantly female friendships. The United States alleged that the harassment against J.L. escalated from derogatory name-calling to physical threats and violence.

The United States further alleged that the Mohawk Central School District had knowledge of the harassment, that the school district was deliberately indifferent in its failure to take timely, corrective action, and that the deliberate indifference restricted J.L.’s ability to fully enjoy the educational opportunities and benefits of his school. The district denied these allegations.

The settlement among the United States, private plaintiff and the district was approved yesterday by the U.S. District Court in the Northern District of New York and requires the Mohawk Central School District to, among other things: (1) retain an expert consultant in the area of harassment and discrimination based on sex, gender identity, gender expression, and sexual orientation to review the District’s policies and procedures; (2) develop and implement a comprehensive plan for disseminating the District’s harassment and discrimination policies and procedures; (3) retain an expert consultant to conduct annual training for faculty and staff, and students as deemed appropriate by the expert, on discrimination and harassment based on sex, gender identity, gender expression, and sexual orientation; (4) maintain records of investigations and responses to allegations of harassment for five years; and (5) provide annual compliance reports to the United States and private plaintiffs. As part of this settlement, $50,000 will be paid to J.L. and $25,000 in attorneys’ fees will be paid to the New York Civil Liberties Foundation.

“All students have the right to go to school without fearing harassment based on sex, including stereotypes about appropriate gender behavior,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “Such conduct has no place in our schools, and the Justice Department looks forward to working with the District and the NYCLU to ensure that all students enjoy educational opportunities without discrimination or harassment.”

The enforcement of the Equal Protection Clause and Title IX in school districts is a top priority of the Justice Department’s Civil Rights Division. Additional information about the Civil Rights Division of the Justice Department is available on its Web site at http://www.justice.gov/crt.

WASHINGTON – The Justice Department today announced a federal court has approved a consent decree resolving an Americans with Disabilities Act (ADA) discrimination lawsuit against attorney Patric LeHouillier and his law firm, LeHouillier & Associates, P.C., based in Colorado Springs, Colo. The consent decree was approved by Judge Marcia S. Krieger in U.S. District Court for the District of Colorado.

In its November 2009 complaint, the Justice Department alleged that LeHouillier and his firm violated Title III of the ADA when they unlawfully barred a woman, her husband and her attorney from entering LeHouillier’s law office for a deposition because the woman was accompanied by her service animal, an Australian Shepherd dog. The woman, who is a veterinarian, has a traumatic brain injury and other conditions that affect mobility and balance, and individually trained her service animal to provide disability-related assistance.

Under the terms of the consent decree, LeHouillier and his firm will:

• Adopt an ADA-compliant service animal policy and post the policy in a conspicuous location;
• Post a “Service Animals Welcome” sign;
• Self-report allegations of discrimination to the department;
• Undergo training and provide training to staff;
• Pay $30,000 to the complainant and $10,000 to her husband as a person associated with a person with a disability; and
• Pay a $10,000 civil penalty.

“For almost two decades, the ADA has ensured that individuals with disabilities are guaranteed full and equal access to public accommodations, both large and small," said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The Justice Department is unrelenting in eradicate discrimination against people with disabilities and ensuring that owners and operators of public accommodations recognize their obligations to provide equal access.”

A service animal is any animal individually trained to work or perform tasks for the benefit of an individual with a disability. Service animals – most commonly dogs – perform a wide variety of functions. Examples of these functions include guiding persons who are blind or have low vision; alerting individuals who are deaf or hard of hearing to sounds; warning persons about impending seizures or other medical conditions; performing a variety of tasks for persons with psychiatric disabilities and picking up items, opening doors, flipping switches, providing physical support and pulling wheelchairs for individuals with mobility disabilities.

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

WASHINGTON – A federal grand jury in San Francisco today returned an indictment against a former executive of a large Taiwan-based color display tube (CDT) manufacturing company for his participation in a global conspiracy to fix prices of CDTs, a type of cathode ray tube used in computer monitors and other specialized applications, the Department of Justice announced.

The indictment, filed today in the U.S. District Court in San Francisco, charges Chung Cheng (Alex) Yeh, a resident of Taiwan, with conspiring with unnamed co-conspirators to suppress and eliminate competition by fixing prices, reducing output, and allocating market shares of CDTs beginning at least as early as May 1999, until at least March 2005.

According to the charges, Alex Yeh, a former director of sales, and co-conspirators agreed to charge prices of CDTs at certain target levels or ranges and to reduce output of CDTs by shutting down CDT production lines for certain periods of time. The indictment alleges that Yeh and co-conspirators also agreed to allocate target market shares for the CDT market overall and for certain CDT customers. The conspirators are alleged to have exchanged CDT sales, production, market share and pricing information for the purpose of implementing, monitoring and enforcing their agreements. According to the indictment, Yeh and co-conspirators implemented an auditing system that permitted co-conspirators to visit each other’s production facilities to verify that CDT production lines had been shut down as agreed.

Yeh is the third individual to be indicted in connection with the CDT investigation. On Feb. 10, 2009, Cheng Yuan (C.Y.) Lin was indicted for his participation in both the CDT conspiracy and a price-fixing conspiracy in the color picture tube industry. On Aug. 18, 2009, Wen Jun (Tony) Cheng was indicted for his participation in the CDT conspiracy.

Yeh 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 maximum fine.

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

Indictment

WASHINGTON – A federal district judge in New Hampshire has permanently barred Faith A. Bartlett, individually and operating as Atlantic Bookkeeping & Tax Services and Newbury Business Services Inc., from preparing federal tax returns for others, the Justice Department announced today. The court also ordered Bartlett to provide her customer lists to the government and to mail copies of the court order to her clients. Bartlett consented to the civil injunction order.

According to the government complaint in the case, Bartlett had been an enrolled agent with the Internal Revenue Service (IRS) since 1979, but allowed this certification to expire in January 2009. On October 30, 2009, Bartlett was interviewed by representatives of the IRS about her tax preparation activities. Bartlett told IRS representatives that she accepts whatever information her customers provide her without question and that she performs no analysis or review prior to filing the returns to determine if the information on the returns passes a “common sense” test.

In addition, Ms. Bartlett told IRS representatives that she does not always: (1) meet with her customers prior to electronically filing their tax returns; (2) return documents provided to her by her customers; (3) sign the returns which she prepares for others for compensation; and (4) secure authorization from her customers to electronically file their tax returns.

The IRS has examined 62 returns prepared by Bartlett for 37 of her customers for the 2006, 2007 and 2008, tax years. The IRS has incurred an actual tax loss to date from these examined returns of approximately $699,000.

WASHINGTON - A federal judge in St. Louis has barred two St. Louis tax preparers and their businesses from certain conduct the Justice Department announced today. The order entered by Judge Richard E. Webber of the U.S. District Court for the Eastern District of Missouri bars Frank “Tiger” Zerjav Jr. from preparing tax returns and providing tax advice for three years, and permanently bars his father, Frank Zerjav Sr., from engaging in specified conduct.

The court order, to which the defendants consented, requires one of the Zerjavs’ businesses, The Advisory Group Inc., to be shut down by April 1, 2010. The Zerjavs’ other business, Zerjav & Co., is permanently barred from specified conduct.

Among the specified conduct enjoined is

• claiming business deductions for non-deductible personal expenses;
• improperly deducting restaurant meals, child care expenses and education expenses;
• changing customers’ accounting records without informing the customers of the changes;
• reporting compensation that is not reasonable or related to work performed; and
• claiming deductions for wages paid to children unless services are actually rendered and the wages are reasonable.

The court also imposed a five-year monitoring period during which a neutral monitor, who must be a licensed CPA or attorney, will annually at the defendants’ expense inspect and review a sample of tax returns prepared by defendants to ensure that the court’s order has not been violated.

John A. DiCicco, Acting Assistant Attorney General for the Justice Department’s Tax Division, thanked Justice Department trial attorneys Michael Pahl, Michael Roessner, Martin Shoemaker and Natalie Sexsmith for handling the case. Mr. DiCicco also thanked Mark Stone and James Graczyk of the Internal Revenue Service’s Small Business/Self Employed Division, who conducted the investigation.

Since 2001, the Justice Department’s Tax Division has obtained more than 460 injunctions against tax-fraud promoters and tax preparers. Information about these cases is available on the Justice Department Web site.

WASHINGTON - Samuel Abrahaley Fessahazion, 23, an Eritrean national, has pleaded guilty to helping smuggle illegal aliens to the United States for private financial gain, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division, U.S. Attorney José Angel Moreno of the Southern District of Texas and U.S. Immigration and Customs Enforcement (ICE) Assistant Secretary John Morton.

Fessahazion, aka “Sami,” aka “Sammy,” aka “Alex” and aka “Alex Williams” pleaded guilty yesterday in Houston before U.S. District Court Judge Nancy A. Atlas to one count of conspiracy, and two counts of encouraging and inducing aliens to come to, enter or reside in the United States in violation of law for the purpose of private financial gain.

 

“By bringing this smuggler to justice, we have broken a chain that runs from Africa to South and Central America, directly into the United States,” said Assistant Attorney General Lanny A. Breuer. “We will not allow these dangerous smuggling organizations to profit from bringing people illegally into the United States.”

 

“This prosecution strikes a significant blow to a criminal organization engaged in a sophisticated international alien smuggling operation,” said U.S. Attorney José Angel Moreno of the Southern District of Texas, “and highlights the continuing cooperation and success of multiple law enforcement agencies in interdicting such activities.”

 

“Breaking this global alien smuggling network puts smugglers on notice that we are coming after them and we will shut them down,” said ICE Assistant Secretary John Morton. “ICE will continue to identify the most dangerous international human smuggling organizations for investigation and prosecution.”

 

According to plea documents, from at least June 2007 until approximately January 2008, Fessahazion was the Guatemalan link of an alien smuggling network that spans East Africa, Central and South America. Specifically, according to the court documents, Fessahazion illegally entered the United States at McAllen, Texas, on March 20, 2008. He applied for asylum on Sept. 30, 2008, claiming in his application that he was traveling across Africa in 2007 and 2008, fleeing persecution in Eritrea. However, according to court documents, Fessahazion was actually in Guatemala during that period facilitating the smuggling of East African aliens to the United States. Fessahazion was granted asylum by the United States on Nov. 13, 2008.

 

Fessahazion admitted that for profit, he encouraged or induced at least six and up to 24 illegal aliens, primarily East Africans, to come to, enter, or reside in the United States knowing that they were not authorized to do so. Fessahazion admitted he moved aliens from Honduras through Guatemala and into Mexico illegally, at which point he referred aliens to a smuggler who brought the aliens into the United States.

 

In one instance, according to court documents, Fessahazion and his co-conspirators moved two illegal aliens from South Africa to Sao Paulo, Brazil, then through Venezuela to Honduras where they were instructed to contact Fessahazion. Once in contact, Fessahazion sent a driver to pick up the two aliens and bring them to Guatemala City, Guatemala. I n exchange for $800, Fessahazion took the two aliens by bus to a house bordering Guatemala and Mexico. There, working with a co-conspirator, Fessahazion provided information to the couple on how to cross the border into Mexico illegally and how to proceed once in Mexico to the United States border. Fessahazion and the co-conspirator provided the couple with a guide who physically took them into Mexico and provided contact information for an unidentified smuggler known only by the alias “Matamoros,” who would in turn take the two aliens to the United States from Reynosa, Mexico. In February 2008, the couple was illegally brought to the United States by guides working for “Matamoros.” According to court documents, the guides carried guns and ferried the couple across the river on the Mexico/U.S. border in inner tubes.

 

In another example, an alien was moved from Dubai to Brazil, then to Honduras via Colombia and Costa Rica. According to court documents, a co-conspirator told the alien he could get him from Dubai to Brazil, at which point others would assist the alien each step of the way to the United States in a “chain like” fashion.

 

According to court documents, once the alien arrived in Honduras, Fessahazion sent a driver to retrieve him and bring him to Guatemala City. In exchange for $700, Fessahazion took the alien to the Guatemala/Mexico border and, along with a co-conspirator, gave the alien information on how to cross the border into Mexico illegally and how to proceed once in Mexico to the United States border, including contact information for “Matamoros.” The alien then traveled into Mexico, contacted “Matamoros” and traveled to Reynosa as “Matamoros” instructed. In December 2007, according to court documents, guides working for “Matamoros” took the alien and others to the United States illegally by ferrying them across the river on the Mexican/U.S. border in inner tubes. Shortly after crossing the border into the United States, the alien and others were apprehended.

 

At sentencing, scheduled for June 14, 2010, Fessahazion faces a maximum penalty of 10 years in prison and a $250,000 fine. 

The case was prosecuted by Trial Attorney Pragna Soni of the Criminal Division’s Domestic Security Section, with the assistance of Assistant U.S. Attorneys Edward Gallagher and Douglas Davis of the Southern District of Texas. 

The investigation was conducted by the ICE Special Agent in Charge (SAC) Washington, with the assistance of SAC San Francisco, the ICE Human Smuggling and Trafficking Unit, ICE Office of Intelligence, ICE Office of International Affairs and U.S. Custom and Border Protection’s Office of Alien Smuggling Interdiction.

WASHINGTON – Today Assistant Attorney General Lanny A. Breuer of the Criminal Division announced the formation of the Human Rights and Special Prosecutions Section (HRSP), the first new section to be formed in the Criminal Division since 2008. The new section represents a merger of the Criminal Division’s Domestic Security Section (DSS) and the Office of Special Investigations (OSI).

“Since its founding, the United States has been a steadfast champion for the cause of justice around the world,” said Assistant Attorney General Lanny A. Breuer. “In that great tradition, the new Human Rights and Special Prosecutions Section is poised to be a global leader in combating human rights violations and ensuring that war criminals are held to account for their crimes.”

Current chief of the Domestic Security Section, Teresa L. McHenry, will serve as the chief of the new HRSP section. Current OSI Director Eli M. Rosenbaum will be the Director of Human Rights Enforcement Strategy and Policy. Current deputy chiefs David Jaffe and William Ho-Gonzalez in DSS and Robert G. Thomson and Dr. Elizabeth B. White in OSI will serve as deputy chiefs in the HRSP section.

McHenry has served the Department of Justice with distinction for more than two decades, including since 2002 as the chief of DSS. She previously led the Criminal Division’s Alien Smuggling Task Force and has served as a trial attorney in the Organized Crime and Racketeering Section, an Assistant U.S. Attorney in the District of Columbia and a prosecutor at the International Criminal Tribunal for the former Yugoslavia in The Hague. She graduated magna cum laude from Harvard Law School and Rice University.

Rosenbaum began his legal career as an intern in the Office of Special Investigations and ultimately became its director in 1995. He also served previously as a corporate litigation associate with Simpson Thacher & Bartlett in Manhattan and as general counsel of the World Jewish Congress. Rosenbaum received his juris doctorate from Harvard Law School and graduated summa cum laude from the Wharton School of the University of Pennsylvania, from which he also received his MBA degree.

“The passion and intelligence both Teresa and Eli bring to their work is evident in the extraordinary record of successful investigations and prosecutions amassed by OSI and DSS,” added Breuer. “Together, these two extraordinary leaders and the attorneys they guide will raise our already impressive human rights program to new heights.”

The possible merger was first announced during Assistant Attorney General Breuer’s Oct. 6, 2009, testimony before the Senate Judiciary Subcommittee on Human Rights and the Law. Congress formally approved the merger on March 24, 2010.

OSI was originally created in 1979 to investigate and prosecute participants in World War II-era acts of Nazi-sponsored persecution.  In December 2004, its mission was expanded under the Intelligence Reform and Terrorism Prevention Act to include investigating and bringing federal legal actions to revoke the citizenship of any naturalized U.S. citizen who committed, ordered, incited, assisted, or otherwise participated abroad in genocide or, under color of foreign law, torture or extrajudicial killing.  OSI has been widely recognized as the world leader in identifying, investigating and prosecuting World War II-era Nazi criminals, and the unit has achieved outstanding results in its “modern” human rights violator enforcement work as well. Since its inception, OSI has won cases against 107 individuals who participated in Nazi-sponsored persecution.  In addition, more than 180 suspected participants in Axis crimes who sought to enter the United States have been blocked from doing so as a result of OSI’s “Watchlist” program, which is enforced in cooperation with the Departments of State and Homeland Security.

DSS was formed in 2002 and since that time has worked to ensure the security of the United States through prosecution and policy work in three areas: international human rights violations; certain federal crimes of violence committed outside the United States including those brought under the Military Extraterritorial Jurisdiction Act; and complex immigration and border crimes. HRSP will continue DSS’s work in all three areas. As part of its work against human rights violators, in 2008, DSS trial attorneys, along with their partner Assistant U.S. Attorneys in the Southern District of Florida, obtained the first federal torture conviction against Roy M. Belfast Jr., aka Chuckie Taylor, for crimes related to the torture of people in Liberia between April 1999 and July 2003.

WASHINGTON - Almighty Latin King and Queen Nation (ALKQN) member John Guzman, 31, of Big Spring, Texas, was sentenced today to 210 months in prison by U.S. District Judge Sam R. Cummings, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division and U.S. Attorney James T. Jacks for the Northern District of Texas.

 

Guzman pleaded guilty to a superseding indictment charging him with one count of conspiracy to distribute and possess with intent to distribute five kilograms or more of cocaine and 100 kilograms or more of marijuana. Guzman has been in custody since his arrest in February 2009.

 

According to court documents, Guzman admitted that he was a member of a conspiracy that included Jose Robledo Nava, aka “Chino;” Luis Nava, aka “Flaco;” Reynaldo Nava, aka “Rat;” Robert Allen Ramirez, aka “Nesyo;” Marie Chavez, aka “Shorty;” Carol Ann Rivas Nava; Cecily Dominique Juarez; Jesus Martinez, aka “Solid;” David Hellums, aka “Cutthroat;” Eduardo Daniel Mares, aka “Pitt;” Gabriel Lee Gonzales; Michael Conde, aka “Psycho;” Guerrero Olivas, aka “Screech;” Eliseo Perez, aka “Wicked;” and others. Guzman admitted that he and the other participants in the conspiracy agreed to distribute, and possess with intent to distribute, cocaine and marijuana. Guzman also admitted that he collected drug debts on behalf of the ALKQN. According to the superseding indictment, Guzman and his co-defendants acquired the cocaine and marijuana from Mexico and brought it to the South Texas region, where it was packaged, stored and transported to Big Spring, Lubbock and Midland, Texas for further distribution.

 

To date, 17 co-defendants have pleaded guilty and been sentenced for their roles in this conspiracy. Nava and Cole were found guilty on Feb. 24, 2010, by a federal jury in Lubbock on two counts of using a firearm to commit murder during and in relation to a drug trafficking crime, and one count of a conspiracy to distribute and possess with intent to distribute five kilograms or more of cocaine and 100 kilograms or more of marijuana.  The jury also found Nava guilty on one count of possession with intent to distribute 500 grams or more of cocaine, one count of conspiracy to engage in the business of dealing in firearms and one count of possession of stolen firearms.

 

Nava and Cole were also found guilty for their involvement in a drive-by shooting in Big Spring on May 4, 2008, in which six people were shot with an AK-47 type rifle.  According to the evidence presented at trial, the victims included Michael Cardona and Valerie Garcia, who was 26 weeks pregnant at the time of the shooting.  Cardona and Garcia ultimately died as a result of their wounds.   Evidence presented at trial proved that after the shootings, Nava ordered two of his co-conspirators to destroy the murder weapon.

 

Nava and Cole face a maximum statutory sentence of life in prison.  A sentencing date has not yet been set by the court.

 

The case was investigated by the National Gang Targeting, Enforcement and Coordination Center (GangTECC); the Organized Crime Drug Enforcement Task Force; the U.S. Drug Enforcement Administration; the FBI; U.S. Immigration and Customs Enforcement; the Bureau of Alcohol, Tobacco, Firearms and Explosives; the El Paso Intelligence Center; U.S. Customs and Border Protection; the U.S. Marshals Service; the Texas Department of Public Safety; the Police Departments of Lubbock, Midland, Houston, San Antonio and Big Spring, Texas; the Lubbock County, Texas, Sheriff’s Office; and the Howard County, Texas, District Attorney’s Office. 

Trial Attorneys Cody L. Skipper and Joseph A. Cooley of the Criminal Division’s Gang Unit and Assistant U.S. Attorney Denise Williams of the U.S. Attorney’s Office for the Northern District of Texas prosecuted the case.

WASHINGTON – Daniel Cowart pleaded guilty today to eight counts in a federal indictment charging him with crimes related to a racially-motivated plot to murder dozens of people, the Justice Department announced.

Cowart, 21, of Bells, Tenn., admitted to conspiring with Paul Schlesselman of West Helena, Ark., to engage in a killing spree specifically targeting African-Americans. He further acknowledged that he intended to culminate these attacks by assassinating President Obama, a U.S. Senator and a presidential candidate at the time of the planned attacks.

Cowart also admitted to shooting the window of the Allen Baptist Church in Brownsville, Tenn. Under the plea agreement, Cowart faces a sentence of at least 10 years and could face up to 75 years in prison.

"Despite great civil rights progress, this unthinkable conspiracy serves as a reminder that hate-fueled violence remains all too common in our country," said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. "Tragedy was averted thanks to the capable work of the Crockett County Sheriff’s Department and their willingness to work with the ATF, the Secret Service and the FBI."

"Crimes committed against individuals because of their race will not be tolerated," said Lawrence J. Laurenzi, U.S. Attorney for the Western District of Tennessee. "I commend the work of the investigative agencies in thwarting what could have been a series of tragic events."

Cowart pleaded guilty to threatening to kill and inflict bodily harm upon a major candidate for the office of President of the United States, conspiracy, interstate transportation of a short-barreled shotgun, interstate transportation of a firearm for the purpose of committing a felony, unlicensed transportation of an unauthorized short-barreled shotgun, possession of a short-barreled shotgun, intentional damage to religious real property, and discharge of a firearm during and in relation to a crime of violence.

Schlesselman pleaded guilty on Jan. 14, 2010, to one count of conspiracy, one count of threatening to kill and inflict bodily harm upon a presidential candidate, and one count of possessing a firearm in furtherance of a crime of violence. Schlesselman is scheduled to be sentenced on April 15, 2010, and faces 10 years in prison under the plea agreement.

The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives; the U.S. Secret Service; the FBI; and the Crockett County, Tenn., Sheriff’s Office. The case is being prosecuted by U.S. Attorney Larry Laurenzi, Assistant U.S. Attorney James Powell and Civil Rights Division Trial Attorney Jonathan Skrmetti.

WASHINGTON – Pamrapo Savings Bank S.L.A., a wholly-owned subsidiary of Pamrapo Bancorp Inc., based in Bayonne, N.J., pleaded guilty today in U.S. District Court for the District of New Jersey to conspiracy to violate the Bank Secrecy Act and has agreed to forfeit $5 million to the United States. 

The announcement was made by Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney Paul J. Fishman for the District of New Jersey; Special Agent in Charge William P. Offord, Internal Revenue Service (IRS)-Criminal Investigation; Acting Director John E. Bowman of the Office of Thrift Supervision (OTS); and Inspector General Jon T. Rymer, Federal Deposit Insurance Corporation-Office of Inspector General (FDIC-OIG). 

"This case is a good example of how disregarding reporting and compliance can turn into a crime," said Assistant Attorney General Lanny A. Breuer of the Criminal Division.  "Today’s guilty plea by Pamrapo Savings Bank should remind financial institutions, large and small across the country, of the high price they will pay for ignoring the law." 

"Pamrapo Savings Bank’s repeated and blatant violation of the Bank Secrecy Act shielded criminals and their activities from detection and prosecution by law enforcement. This case should send a strong message to banks that we will vigorously investigate and prosecute financial institutions that provide safe harbor to criminals," said U.S. Attorney Paul J. Fishman. 

"Law enforcement relies on banks as the first layer of defense against money launderers and other criminal enterprises who choose to utilize our nation’s financial institutions to further their criminal activity," said William P. Offord, Special Agent in Charge, IRS-Criminal Investigation. "Pamrapo Savings Bank’s blatant disregard for the Bank Secrecy Act reporting requirement rules removed that layer of defense, making it more difficult to identify, detect and deter these types of criminals." 

According to the criminal information filed today in U.S. District Court in Trenton, N.J., Pamrapo Savings Bank conspired with others to conceal its customers’ illegal or suspicious activities by failing to file currency transaction reports (CTRs) and suspicious activity reports (SARs) and by willfully failing to maintain adequate anti-money laundering programs. Pamrapo Savings Bank admitted that it willfully violated the Bank Secrecy Act to avoid the expenses associated with compliance, despite federal and state banking regulators telling Pamrapo Savings Bank as early as 2004 that its Bank Secrecy Act and anti-money laundering programs contained serious and systemic deficiencies in critical areas required under the law. 

Specifically, Pamrapo Savings Bank admitted during its guilty plea that it unlawfully failed to file CTRs and SARs related to approximately $35 million in illegal and suspicious financial transactions, including more than $5 million in structured currency transactions. The bank acknowledged that its willful failure to maintain adequate Bank Secrecy Act and anti-money laundering programs resulted in numerous and repeated violations of the law. 

In one specific example outlined in court documents, from approximately March 2005 to September 2006, a co-conspirator cashed approximately 586 checks worth a total of $3.2 million, payable to "cash" at multiple branches of Pamrapo Savings Bank. Each check was under $10,000, thus structured to evade the bank’s obligation to file CTRs. Ultimately, according to the court documents, Pamrapo Savings Bank willfully failed to file a SAR related to these known and repeated violations of the Bank Secrecy Act. 

In addition, Pamrapo Savings Bank admitted that it made false and misleading statements to bank regulators, including OTS, to prevent regulatory oversight and enforcement of its deficient Bank Secrecy Act compliance programs. 

‪ "Even during an economic downturn, institutions must remain focused on complying with important laws and regulations to ensure that criminals do not use our nation’s financial system for their illicit enterprises," said OTS Acting Director John E. Bowman.  "As this enforcement order demonstrates, the OTS takes these obligations very seriously." ‬‪ 

"The Federal Deposit Insurance Corporation Office of Inspector General is pleased to join the U.S. Attorney’s Office for the District of New Jersey, the U.S. Department of Justice, and our law enforcement colleagues in defending the integrity of the financial services industry.  Prosecutions of entities involved in criminal misconduct helps maintain the safety and soundness of the nation’s financial institutions," stated Inspector General Jon T. Rymer. 

OTS assessed a $5 million civil money penalty against Pamrapo Savings Bank for violations of the Bank Secrecy Act, which will be deemed satisfied by the $5 million forfeiture. The Financial Crimes Enforcement Network (FinCEN) of the U.S. Department of the Treasury is also investigating Pamrapo Savings Bank for noncompliance with the Bank Secrecy Act and may impose additional civil money penalties. 

The Bank Secrecy Act is a federal law enacted to prevent banks from being used to facilitate and perpetuate criminal activity, such as narcotics trafficking, organized crime, terrorist financing and other financial crimes. To permit federal law enforcement authorities to detect, investigate, prevent and prosecute such criminal activities, the Bank Secrecy Act requires banks, such as Pamrapo Savings Bank, to file certain reports with the United States, including CTRs and SARs. CTRs must be filed for every currency transaction involving more than $10,000. SARs must be filed related to any possible violation of law, including transactions suspected to be involved in money laundering, tax crimes and "structuring," among other crimes. Structuring involves conducting multiple cash transactions, each in an amount under $10,000, to evade the bank’s obligation to file a CTR and camouflage illegal activities from law enforcement. Additionally, under the Bank Secrecy Act, banks are required to establish and maintain an adequate anti-money laundering compliance program. 

Pamrapo Bancorp Inc. is a publicly-held savings and loan holding company traded on the NASDAQ stock market. It is operated through approximately 11 branch offices located in and around Bayonne. 

Pamrapo Savings Bank waived indictment, agreed to the filing of the information, and accepted and acknowledged responsibility for its conduct during the plea hearing before Chief Judge Garrett E. Brown Jr. As a result of its guilty plea, Pamrapo Savings Bank faces no less than one but not more than five years probation and a statutory maximum fine equal to the greatest of $500,000; twice the gross amount of any financial gain that any persons derived from the offense; or twice the gross amount of any financial loss sustained by any victims of the offense. The court scheduled sentencing for May 6, 2010. 

The case was prosecuted by Senior Trial Attorney John W. Sellers of the Criminal Division’s Asset Forfeiture and Money Laundering Section and Assistant U.S. Attorney Anthony Moscato of the U.S. Attorney’s Office Strike Force in Newark, N.J. The case was investigated by IRS Criminal Investigation Division; FDIC-OIG; FBI; OTS; FinCEN; and the Bayonne Police Department’s Special Investigation Unit.

 

WASHINGTON - Six Michigan residents, along with two residents of Ohio and a resident of Indiana, were indicted by a federal grand jury in Detroit on charges of seditious conspiracy, attempted use of weapons of mass destruction, teaching the use of explosive materials, and possessing a firearm during a crime of violence, Attorney General Eric Holder, U.S. Attorney for the Eastern District of Michigan Barbara L. McQuade and FBI Special Agent in Charge Andrew Arena announced today.

The five count indictment, which was unsealed today, charges that between August 2008 and the present, the defendants, David Brian Stone, 45; his wife, Tina Stone, 44; his son, Joshua Matthew Stone, 21, of Clayton, Mich.; and his other son, David Brian Stone, Jr., 19, of Adrian, Mich.; Joshua Clough, 28, of Blissfield, Mich.; Michael Meeks, 40 of Manchester, Mich.; Thomas Piatek, 46, of Whiting, Ind.; Kristopher Sickles, 27, of Sandusky, Ohio; and Jacob Ward, 33, of Huron, Ohio, acting as a Lenawee County, Mich., militia group called the Hutaree, conspired to oppose by force the authority of the U.S. government. According to the indictment, Hutaree members view local, state, and federal law enforcement as the “brotherhood”, their enemy, and have been preparing to engage them in armed conflict.

The indictment also alleges that the Hutaree planned to kill an unidentified member of local law enforcement and then attack the law enforcement officers who would gather in Michigan for the funeral. According to the plan, the Hutaree would attack law enforcement vehicles during the funeral procession with improvised explosive devices with explosively formed projectiles, which, according to the indictment, constitute weapons of mass destruction. Subsequently, and in furtherance of this plan, David Brian Stone, the Hutaree’s leader, obtained information about such devices over the Internet and e-mailed diagrams of such devices to a person he believed capable of manufacturing the devices. He then had his son, Joshua Matthew Stone, and others gather materials necessary for the manufacturing of such devices.

According to the indictment, in June 2009, David Brian Stone and his other son, David Brian Stone Jr., taught other Hutaree members how to make and use explosive devices intending or knowing that the information would be used to further a crime of violence. In addition, the grand jury charged all nine defendants with carrying or possessing a firearm during a crime of violence on at least one occasion.

“The indictment unsealed today outlines an insidious plan by anti-government extremists to murder a law enforcement officer in order to lure police from across the nation to the funeral where they would be attacked with explosive devices. Thankfully, this alleged plot has been thwarted and a severe blow has been dealt to an dangerous organization that today stands accused of conspiring to levy war against the United States,” said Attorney General Eric Holder.

U.S. Attorney McQuade said, “Because the Hutaree had planned a covert reconnaissance operation for April which had the potential of placing an unsuspecting member of the public at risk, the safety of the public and of the law enforcement community demanded intervention at this time.”

Andrew Arena, FBI Special Agent in Charge, said, “This is an example of radical and extremist fringe groups which can be found throughout our society. The FBI takes such extremist groups seriously, especially those who would target innocent citizens and the law enforcement officers who protect the citizens of the United States. The FBI would like to thank our federal, state and local law enforcement partners who are member of the Joint Terrorism Task Force for their assistance in this case.”

Eight of the nine defendants are in custody and seven of them made their initial appearance before U.S. Magistrate Judge Donald A. Scheer in the Eastern District of Michigan this morning. Joshua Stone is currently a fugitive. Any person with information as to the whereabouts of this individual should contact the FBI at (313) 965-2323.

The charge of seditious conspiracy carries a statutory maximum penalty of 20 years in prison; attempted use of a weapon of mass destruction carries a statutory maximum penalty of life in prison; teaching the use of explosives materials carriers a statutory maximum penalty of 20 years in prison; and possessing a firearm during a crime of violence carries a mandatory minimum penalty of five years in prison.

An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.

The case was investigated by special agents of the FBI and the Michigan State Police.

WASHINGTON - A Mississippi man was sentenced today by U.S. District Judge Louis Guirola Jr., in the Southern District of Mississippi to 36 months in prison for involuntary manslaughter, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division. Kyle Palmer, 27, of Biloxi, Miss., was also ordered to serve three years of supervised release following the prison term, to pay $2,000 in restitution and to pay a $4,000 fine.

According to factual information provided to the court as part of the plea hearing, Palmer and Justin Pope, the victim, worked as security contractors for DynCorp, a Department of State contractor, at the U.S. embassy regional office in Erbil, Iraq. According to information provided to the court, during an informal party that took place on the night of March 4, 2009, Palmer became considerably intoxicated, in violation of rules in place at the time. During the course of the party, Pope and Palmer engaged in a series of actions in which they pointed a 9 millimeter Glock-19 handgun at each other. According to information provided to the court, at a point during the party, Palmer discharged Pope’s weapon without checking whether the gun was loaded. A bullet was accidentally fired, which struck and killed Pope.

The case was prosecuted by Deputy Chief David Jaffe and Trial Attorney Christine Duey of the Criminal Division’s Domestic Security Section. The case was investigated by the Diplomatic Security Service of the Department of State.

WASHINGTON – The Department of Justice announced today that it will not challenge Cisco Systems Inc.’s acquisition of Tandberg ASA. The department has concluded that the proposed deal is not likely to be anticompetitive due to the evolving nature of the videoconferencing market and the commitments that Cisco has made to the European Commission (EC) to facilitate interoperability.

During the course of its investigation the Department of Justice cooperated closely with the EC in its parallel review of the transaction, aided by waivers from the parties and industry participants. This permitted the agencies to share information and assessments of likely competitive effects and potential remedies.

"This investigation was a model of international cooperation between the United States and the European Commission," said Christine Varney, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. "The parties should be commended for making every effort to facilitate the close working relationship between the Department of Justice and the European Commission."

The Department of Justice’s Antitrust Division analyzed the effect of combining the videoconferencing businesses of Cisco and Tandberg, focusing on a type of videoconferencing known as "telepresence," in which Cisco and Tandberg are competitors. Telepresence is a form of high-definition videoconferencing that provides an immersive experience to users, simulating face-to-face meetings. The department conducted an extensive investigation of this dynamic marketplace, including numerous interviews of industry participants and customers, and review of documents provided by the parties and other firms in the videoconferencing business.

The EC also announced today that it has cleared the transaction. Cisco has made commitments to facilitate interoperability between its telepresence products and those of other companies as part of the EC’s merger clearance process. The commitments are designed to foster the development of open operating standards. The department views those commitments as a positive development that likely will enhance competition among producers of telepresence systems. Open standards lower barriers to entry, and can be especially procompetitive in rapidly evolving high technology markets. The department has taken the commitments into account, along with various market factors, such as the evolving nature of the telepresence business, in reaching its decision to close its investigation.

Cisco, based in San Jose, Calif., is the leading manufacturer of networking equipment and solutions for the Internet, with annual revenues of approximately $35 billion in 2009. It is also the largest provider of telepresence equipment worldwide.

Tandberg, which has dual headquarters in Oslo, Norway, and New York had annual revenues of approximately $900 million in 2009, and is the largest provider of videoconferencing equipment overall worldwide.

WASHINGTON – Christian Rodney Ice, 19, of Mobile, Ala., pleaded guilty today in federal court in Mobile to one count of violating the Church Arson Act by placing threatening graffitti and neo-Nazi markings on a synagogue in Mobile, the Justice Department and the U.S. Attorney’s office for the Southern District of Alabama announced. Sentencing has been scheduled for Sept. 23, 2010. Ice faces a maximum prison sentence of one-year in prison and a fine of up to $100,000.

During the plea proceedings and in documents filed in court, Ice admitted that during the late night and early morning hours of Jan. 3-4, 2009, he and an associate used spray paint to place anti-Semitic graffiti and neo-Nazi markings on the Congregation Tree of Life Messianic Synagogue in Mobile. The graffiti and markings included the German words "Juden Raus" ("Jews Out"), and the statement "Hitler was right."

"Threats against religious institutions and their members will not be tolerated in this country," said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. "This case 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."

"The U.S. Attorney’s Office will continue to use all the tools at its disposal to stamp out hate crimes and instances of bigotry," said Kenyen R. Brown, United States Attorney for the Southern District of Alabama.

The case was investigated by special agents from the Mobile Division of the Federal Bureau of Investigation and the City of Mobile Police Department. The case is being prosecuted by Assistant U.S. Attorney George May of the U.S. Attorney’s Office for the Southern District of Alabama and Trial Attorney Donald Tunnage of the Civil Rights Division.

WASHINGTON – The leader of the largest hacking and identity theft ring ever prosecuted by the U.S. government has been sentenced to 20 years and one day in prison for his role in a series of hacks into a major payment processor and several retail networks, announced Assistant Attorney General for the Criminal Division Lanny A. Breuer; U.S. Attorney for the District of Massachusetts Carmen Milagros Ortiz; U.S. Attorney for the Eastern District of New York Benton J. Campbell; U.S. Attorney for the District of New Jersey Paul J. Fishman; and Director of the U.S. Secret Service Mark Sullivan.

On March 25, 2010, Albert Gonzalez, 28, of Miami, was sentenced by U.S. District Court Judge Patti B. Saris in U.S. District Court in Boston to 20 years in prison for conspiracy, computer fraud wire fraud, access device fraud and aggravated identity theft related to hacks into numerous major U.S. retailers, including the TJX Companies, BJ’s Wholesale Club, OfficeMax, Boston Market, Barnes & Noble and Sports Authority.

Thursday’s sentence also addresses the charges brought in the Eastern District of New York and transferred to Boston for plea and sentence. The New York indictment charged Gonzalez with, among other things, conspiracy to commit wire fraud relating to his breach of the electronic payment systems of the Dave and Buster’s restaurant chain. Gonzalez was also ordered to serve three years of supervised release following his prison term and to pay a fine of $25,000.

Today, Gonzalez was sentenced by U.S. District Court Judge Douglas P. Woodlock to 20 years and one day in prison for two counts of conspiracy relating to his efforts to assist others in gaining access to the payment card networks of Heartland Payment Systems, a New Jersey-based card processor; 7-Eleven, a Texas-based nationwide convenience store chain; and Hannaford Brothers Co. Inc., a Maine-based supermarket chain. Gonzalez was also ordered to serve three years of supervised release following his prison term. The prison term and the term of supervised release will run concurrently with the sentence imposed yesterday against Gonzalez. Gonzalez was ordered to pay a fine of $25,000 in addition to the fine imposed yesterday. The charges in this case were originally brought in the District of New Jersey. Restitution in all three cases will be determined by the court at a later date.

"Every day, as cyber criminals try to steal the debit and credit card numbers of unsuspecting American consumers, federal agents and prosecutors are there to catch them," said Assistant Attorney General Lanny A. Breuer.  "These sentences – some of the longest ever imposed for hacking crimes – send a powerful message to hackers around the globe that U.S. law enforcement will not allow them to breach American computer networks and payment systems, or illegally obtain identities."

"Investigations of this magnitude – the largest of its kind in the country - remind us that as technology rapidly advances, so do our vulnerabilities.  While electronic payments are simply a way of life, we must be mindful that with the stroke of the keyboard, criminal enterprises can strike from anywhere in the world," said U.S. Attorney Carmen M. Ortiz.  "I want to assure consumers that we continue to use all available resources to detect and investigate computer hacking crimes, no matter where in the world they are committed."

"Computer hackers and identity thieves pose serious risks to our commercial, personal and financial security," stated U.S. Attorney for the Eastern District of New York Benton J. Campbell.  "Today’s sentence should serve as a warning to would-be hackers everywhere, including those who commit their crimes from abroad – you will be found, prosecuted and convicted."

"These sentences reflect the tremendous harm Mr. Gonzalez caused millions of innocent Americans," said U.S. Attorney Paul J. Fishman of the District of New Jersey.  "They go a long way to deterring like-minded criminals who mistakenly believe they can escape arrest and prosecution by committing their crimes online and hiding behind a computer screen.  This investigation demonstrates the ongoing commitment of the Department of Justice to ensure the safety and security of online commercial transactions." 

"Technology has virtually erased geographic boundaries and changed the way we do business," said U.S. Secret Service Director Mark Sullivan. "As we have seen with this case, even with the increasing complexity of network intrusions, it remains difficult for criminals to remain anonymous. The Secret Service continues to seek new and innovative ways to combat emerging cyber threats. Our success in this case and similar investigations is a result of our close work with our worldwide network of law enforcement partners."

According to court documents related to his conviction in the Massachusetts and New York cases, Gonzalez and his co-conspirators broke into retail credit card payment systems through a series of sophisticated techniques, including "wardriving" and installation of sniffer programs to capture credit and debit card numbers used at the victim retail stores. Wardriving involves driving around in a car with a laptop computer looking for unsecure wireless computer networks of retailers. Using these techniques, Gonzalez and his co-defendants were able to steal more than 40 million credit and debit card numbers from victim retailers. According to court documents, Gonzalez and his co-conspirators sold the numbers to others for their fraudulent use and engaged in ATM fraud by encoding the data on the magnetic stripe of blank cards and withdrawing thousands of dollars at a time from ATMs.

Gonzalez and his co-conspirators concealed and laundered their fraud proceeds by using anonymous Internet-based currencies both within the United States and abroad, and by channeling funds through bank accounts in Eastern Europe. Gonzalez’s co-conspirators were located throughout the United States, Estonia and the Ukraine. In the New Jersey case, Gonzalez provided malware to other hackers that allowed them to circumvent anti-virus programs and firewalls, and gain access to the victim companies’ networks. Gonzalez admitted in court documents that it was foreseeable that, based upon his assistance, his co-conspirators would be able to steal tens of millions of credit and debit card numbers, affecting more than 250 financial institutions.

To date, six co-conspirators have pleaded guilty in the United States. One co-conspirator, an Estonian national, was apprehended at the United States’ request by German authorities while he was travelling in Germany. He was subsequently extradited to the United States, where he pleaded guilty to his role in the hacking and identity theft scheme. Another co-conspirator was arrested and convicted in Turkey on related identity theft charges, and was sentenced to 30 years in prison.

The Boston case was prosecuted by Assistant U.S. Attorneys Stephen Heymann and Donald Cabell of the District of Massachusetts. The New York case was prosecuted by Assistant U.S. Attorney William Campos of the Eastern District of New York and by Senior Counsel Kimberly Kiefer Peretti and Trial Counsel Evan Williams of the Criminal Division’s Computer Crime and Intellectual Property Section (CCIPS). The New Jersey case was prosecuted by Assistant U.S. Attorneys Erez Liebermann and Seth Kosto for the District of New Jersey, Assistant U.S. Attorney Stephen Heymann for the District of Massachusetts and by Senior Counsel Kimberly Kiefer Peretti of CCIPS. All of these cases were investigated by the U.S. Secret Service.

WASHINGTON - Louisville, Ky., attorney James Reskin, 51, pleaded guilty late yesterday in U.S. District Court in Tulsa for his role in a scheme to defraud investors through the manipulation of the publicly traded stocks of three companies, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division and U.S. Attorney for the Northern District of Oklahoma Thomas Scott Woodward.

Reskin pleaded guilty to one count of conspiracy to commit wire fraud, securities fraud and money laundering, as charged in the indictment returned by a federal grand jury in Tulsa on Jan. 15, 2009. Reskin also pleaded guilty to one count of obstruction of justice, contained in a criminal information filed March 25, 2010. Specifically, Reskin pleaded guilty to making false and misleading statements to the Internal Revenue Service (IRS) and to the Department of Justice regarding stock promotions and movement of stock proceeds.

Two companies based in Tulsa at the time of the alleged scheme were among those whose stock was manipulated: Deep Rock Oil & Gas Inc., and Global Beverage Solutions Inc., formerly known as Pacific Peak Investments. The third company, National Storm Management Group Inc., is based in Glen Ellyn, Ill.

G. David Gordon, a Tulsa, Okla., attorney; Richard Clark, also of Tulsa; Dean Sheptycki, a resident of the Bahamas; and Dallas-area resident Joshua Wayne Lankford were also charged in the Jan. 15, 2009, indictment for their alleged roles in the scheme. The U.S. Securities and Exchange Commission (SEC) also filed a civil enforcement action against Gordon, Lankford and Sheptycki. Trial for Gordon and Clark is scheduled to begin April 5, 2010. Lankford and Sheptycki remain under indictment. The charges contained in the indictment are merely allegations and the defendants are presumed innocent unless and until proven guilty.

According to the indictment, between April 2004 and December 2006, Reskin and his co-conspirators devised and engaged in a scheme to defraud investors known as a "pump and dump," in which they manipulated three publicly traded penny stocks. A penny stock is a common stock that trades for less than $5 per share in the over the counter market, rather than on national exchanges. According to the indictment, the scheme reaped the defendants more than $41 million.

The co-conspirators allegedly executed the scheme by obtaining a majority of the free-trading shares of stock of the company they intended to manipulate, using fraudulent and deceptive means to acquire the stock and/or remove the trading restrictions on the shares they obtained. Reskin admitted that he authored false documents regarding Global Beverage to further the manipulation of that company’s stock.

The co-conspirators then allegedly "parked" their shares with various nominees, such as friends, relatives or other entities that they owned and controlled to conceal their ownership. After "parking" the shares, the co-conspirators allegedly engaged in coordinated trading in order to create the appearance of an emerging market for these stocks, after which they allegedly conducted massive promotional campaigns in which unsolicited fax and e-mail "blasts" were sent to millions of recipients. The promotions touted the respective stocks without accurately disclosing that the co-conspirators paid for the promotions, controlled the majority of free-trading shares and intended to sell their shares. According to the indictment, the promotions induced unsuspecting legitimate investors to purchase stock in the companies. During and after dissemination of the promotions, the co-conspirators allegedly sold their stock at artificially inflated prices, leaving legitimate investors holding stock of significantly reduced value.

Reskin admitted relocating his brokerage account in order to coordinate stock trading and further the manipulation of Global Beverage stock. He also admitted using his attorney trust account to conceal ownership of Global Beverage and to transfer proceeds from the sale of stock.

The conspiracy charge to which Reskin pleaded guilty carries a maximum sentence of five years in prison and a $250,000 fine or twice the amount of the gain/loss caused by Mr. Reskin’s conduct. The obstruction of justice charge carries a maximum penalty of five years in prison and a $250,000 fine. Sentencing has been scheduled for Aug. 25, 2010.

The case is being prosecuted by Trial Attorney Andrew Warren of the Criminal Division’s Fraud Section, Assistant U.S. Attorney Catherine Depew for the Northern District of Oklahoma, and Special Assistant U.S. Attorney Kevin Muhlendorf, who is detailed to the U.S. Attorney’s Office from the SEC. The case is being investigated by the FBI, the IRS-Criminal Investigation Division and the U.S. Postal Inspection Service.

WASHINGTON - The Justice Department today announced that it entered into a settlement agreement with the Monroe City School District in Louisiana to address the educational inequities between schools serving virtually all black student populations and those schools that serve most of the district’s white students. The settlement agreement, in the form of a consent decree and subject to court approval, stems from a longstanding desegregation order governing the Monroe City School District to ensure that the district complies with Title IV of the Civil Rights Act of 1964, and provides all students with the equal protections of the law.

The consent decree will, among other things, address disparities between the courses offered at the district’s virtually all black high schools and its high school that serves almost all of the district’s white population, as well as a significant black population. For instance, at a 100 percent black high school, there were no Advanced Placement (AP) courses and only five Gifted and Honors classes. However, at the school with a population that is 43 percent white, the District offered over 70 Gifted, Honors and AP courses. The agreement requires the district to take specific steps to offer the same courses at every high school in the district, including AP, pre-AP, Honors and Gifted classes. Additionally, the agreement requires that the district work with a third-party organization, the Equity Assistance Center of the Intercultural Development Research Association, to ensure an equitable opportunity for all district students to participate in Gifted, Honors, pre-AP and AP programming. The district has already begun the process of engaging the Equity Assistance Center to address these inequities. http://www.justice.gov/crt .

"Education is the most important gift we can give to children to help them succeed, and all students must have access to a quality education that provides them with equal opportunities, regardless of their race," said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. "We will continue to ensure that all students have such access and will carefully scrutinize school districts that operate pursuant to federal desegregation orders to ensure that these districts are meeting their obligations to their students."

The enforcement of the Equal Protection Clause and Title IV in school districts is a top priority of the Justice Department’s Civil Rights Division. Additional information about the Civil Rights Division of the Justice Department is available on its Web site at

WASHINGTON – Donna J. Scott, 49, a former U.S. Department of Energy (DOE) employee, pleaded guilty today to criminal conflict of interest for personally participating in DOE’s purchase of furniture when she knew her husband had a financial interest in the deals, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division and U.S. Attorney for the District of Maryland Rod J. Rosenstein. Scott’s husband, Timothy Scott, 56, also pleaded guilty today to making a false statement to federal agents when he denied having a financial interest in the furniture purchases.

According to court documents, Donna Scott, of Damascus, Md., was employed by the DOE in various positions between July 2006 and June 2008 in which she coordinated the use and renovation of DOE office space, including as the Assistant to the Director of the Office of Logistics and Facility Operations.

According to court documents, Donna Scott was tasked in 2006 with overseeing the renovation of the lobby and a conference room in a DOE building in Germantown, Md., including the acquisition of new furniture for these spaces. In July 2006, she recommended to a co-worker that the co-worker obtain price quotes for furniture from her husband, Timothy Scott. Timothy Scott provided these price quotes to Donna Scott’s co-worker, both of which referenced Timothy Scott as the manufacturer’s representative. According to court documents, in August 2006, Donna Scott’s co-worker attempted to purchase the furniture using the price quotes provided by Timothy Scott, but was advised that she needed two additional price quotes for each transaction to satisfy competitive bidding requirements. Donna Scott’s co-worker communicated to her the need for the additional price quotes. Donna Scott admitted that she subsequently obtained two additional price quotes for each transaction from her husband and provided them to her co-worker as the competitive price quotes. Donna Scott admitted that she knew, unlike the original price quotes, that none of these new price quotes referenced Timothy Scott by name. Moreover, the additional quotes bid a higher price for the furniture than the initial quote, making Timothy Scott’s original bid the lowest. The DOE ultimately purchased the furniture using the original price quote provided by Timothy Scott

Additionally, according to court documents, Donna Scott was assigned in April 2008 to oversee the renovation of the cafeteria in the DOE’s headquarters in Washington. In April and May 2008, Donna Scott selected furniture worth approximately $300,000 from particular manufacturers for the cafeteria renovation project. Donna Scott admitted that she knew these manufacturers’ representatives planned to use her husband as their dealer of record for these transactions, thus earning her husband a commission. In May and June 2008, Donna Scott arranged for the furniture to be purchased by the General Services Administration (GSA) on behalf of the DOE. As a result, Timothy Scott earned approximately $24,174 in commissions from the manufacturers.

On Sept. 25, 2008, Donna Scott signed and submitted a confidential financial disclosure report in connection with her employment at the DOE, omitting any reference to commissions received by her husband or any other reportable sources of income for him.

According to his plea agreement, federal agents interviewed Timothy Scott on March 24, 2009, about business he and his companies conducted related to the DOE, as well as Donna Scott’s role in his obtaining that business. Federal agents asked Timothy Scott if he had received any compensation related to the renovation of the headquarters cafeteria in 2008. Timothy Scott admitted that he lied to the agents, telling them he had attempted to get business and make sales during that renovation, but that he was unable to receive any compensation related to that project.

Donna and Timothy Scott each face maximum sentences of five years in prison and fines of $250,000 or the greater of twice the gross gain or loss from the offense. U.S. District Judge Peter J. Messitte has scheduled sentencing for June 3, 2010.

This case was prosecuted by Trial Attorney Timothy J. Kelly of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney Stacy Dawson Belf of the District of Maryland. The case was investigated by the DOE and GSA Office of Inspector General.

CHICAGO — A Chicago man who claims to be acquainted with an alleged terrorist leader in Pakistan was arrested today on federal charges of providing material support to a foreign terrorist organization for allegedly attempting to provide funds overseas to al Qaeda, federal law enforcement officials announced. Although the defendant, Raja Lahrasib Khan, a Chicago taxi driver and native of Pakistan who became a naturalized U.S. citizen in 1988, allegedly discussed attacking a stadium in the United States this summer, there was no imminent domestic danger, officials said.

The investigation leading to Khan’s arrest is unrelated to a separate investigation that resulted in federal terrorism charges against Chicagoans Tahawwur Hussain Rana and David Coleman Headley in connection with the 2008 terror attacks in Mumbai and a plot to attack targets in Denmark, the officials added.

Khan, 56, of the city’s north side, was charged with two counts of providing material support to terrorism in a criminal complaint that was filed yesterday in U.S. District Court in Chicago and unsealed today following his arrest, announced Patrick J. Fitzgerald, United States Attorney for the Northern District of Illinois, and Robert D. Grant, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation. The investigation is continuing, they said.

Khan was arrested this morning while working in downtown Chicago without incident by the Chicago FBI’s Joint Terrorism Task Force. He was scheduled to appear at 3:30 p.m. today before U.S. Magistrate Judge Geraldine Soat Brown in Federal Court in Chicago.

"While there was no imminent danger in the Chicago area or elsewhere, these charges, once again, affirm that law enforcement must remain constantly vigilant to guard against domestic support of foreign terrorist organizations. I am deeply grateful to the FBI agents and other members of the Joint Terrorism Task Force for their extremely hard work on this matter," said Mr. Fitzgerald.

Mr. Grant said: "Over the past six months, FBI-led Joint Terrorism Task Forces across the country have disrupted plots, charged and apprehended a number of individuals and secured significant intelligence, which has been of benefit here and to our allies overseas. Notable as most of these successes have been, it also illustrates the reality of the environment we face today, along with the critical responsibility domestic law enforcement agencies and intelligence services have in protecting the public from the violent designs of others. It is a complex threat that we face and we are pleased with the results today," he added.

"Today’s arrest and charges are the result of an outstanding cooperative law enforcement and intelligence effort and underscore the domestic and international aspects of the terror threat we face," said David Kris, Assistant Attorney General for National Security.

According to a 35-page complaint affidavit, by at least 2008, Khan, who claims to have known Ilyas Kashmiri for approximately 15 years, learned that Kashmiri was working with al Qaeda, and that Kashmiri was purportedly receiving orders from al Qaeda’s leader, Osama bin Laden. According to Khan, during his meeting or meetings with Kashmiri, among other things, Khan learned that Kashmiri wanted to train operatives to conduct attacks in the United States; Kashmiri showed Khan a video depicting the detonation of an improvised explosive device; and Kashmiri told Khan that he needed money, in any amount, to be able to purchase materials from the "black market."

The complaint identifies Kashmiri as the leader in Kashmir of Harakat ul-Jihad-I-Islami (HUJI), a Sunni extremist group located in Pakistan and Kashmir with links to al Qaeda. In a reported interview last October, Kashmiri purportedly said that he had joined forces with al Qaeda. In January 2010, Kashmiri, together with a former Pakistani military officer, Rana and Headley, were indicted in Chicago for their alleged roles in a conspiracy to murder and maim persons in a planned attack against the facilities and employees of the Danish newspaper Morgenavisen Jyllands-Posten, in Denmark, as retribution for the publication of cartoons that depicted the Prophet Mohammed.

The charges against Khan allege that on Nov. 23, 2009, he sent a money transfer of approximately $950 from a currency exchange located on North LaSalle Street in Chicago to Individual A, who was in either Mirpur or Bhimber, in Pakistan. Khan later spoke with Individual A by telephone and instructed him to give "Lala" 25,000 Pakistani rupees (approximately $300) of the money he had sent. According to the affidavit, Khan told an undercover agent that "Lala," which means "older brother" in Urdu, is a nickname Khan uses to refer to Kashmiri, who he told the agent he had met most recently in 2008 in Miran Shah in northwest Pakistan. Khan also told the agent that Khan believed that his telephones were being monitored, and if Khan or the undercover agent were ever questioned about their discussions regarding "Lala," they should claim to have been referring to Khan’s actual older brother.

Just two weeks ago, on March 11, Khan and an associate, identified as "Individual B," allegedly had a discussion during which they appeared to talk about attacking a stadium in the United States in "August." Among other things, Khan described that bags containing remote controlled bombs could be placed in several different locations, and then "boom, boom, boom, boom." Khan further said that he would ask "Lala" [Kashmiri] to teach him how to conduct such an attack, the complaint alleges. However, there are no allegations that Khan either knew Kashmiri’s current whereabouts or had yet discussed his stadium plan with him.

On March 17, after agreeing to personally deliver to Kashmiri any funds that the undercover agent wanted to provide, Khan allegedly accepted $1,000 (ten $100 bills) from the agent. The complaint states that Khan accepted these funds after having had prior conversations with the undercover agent in which: Khan confirmed that Kashmiri was working with al Qaeda; Khan assured that Kashmiri would use the undercover agent’s funds to purchase weapons and, possibly, other supplies; Khan assured that he had provided Kashmiri with money in the past, including in approximately December 2009; and Khan discussed the possibility of having his son transport the money from the United States to England, where Khan would rendevous with his son, retrieve the money, and deliver it to Kashmiri in Pakistan.

On March 23, government agents at Chicago’s O’Hare International Airport came into contact with Khan’s son, who was traveling to England. During this contact, agents discovered that Khan’s son possessed seven of the ten $100 bills that the undercover agent had given to Khan, according to the affidavit.

Each count of providing material support to a foreign terrorist organization carries a maximum penalty of 15 years in prison and a $250,000 fine. If convicted, the court is required to impose a reasonable sentence under the advisory United States Sentencing Guidelines.

The ongoing investigation is being conducted by the Chicago FBI Joint Terrorism Task Force, with particular assistance from the Chicago Police Department, the Illinois State Police, and the Department of Homeland Security’s U.S. Customs and Border Protection and U.S. Immigration and Customs Enforcement.

The prosecution is being handled by Assistant U.S. Attorneys Christopher Veatch and Steven Dollear, of the Northern District of Illinois, with assistance from the Counterterrorism Section of the Justice Department’s National Security Division.

The public is reminded that a criminal complaint contains mere allegations that are not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.

WASHINGTON – U.S. District Court Judge Daniel R. Dominguez sentenced former San Juan, Puerto RicoPolice Officers, Carlos Pagan Ferrer, 32, and Juan Morales Rosado, 32, today for their role in the fatal assault by San Juan officers against Jose Rivera Robles, an unarmed civilian, the Justice Department announced. Defendants Pagan Ferrer and Morales Rosado both received sentences of 10 years, after conviction at trial for using excessive force, resulting in bodily injury, and for committing various obstruction of justice offenses.

At trial, the government presented evidence that on July 20, 2003, in the course of arresting the victim at a Citgo gas station, defendants Morales Rosado and Carlos Pagan, as well as other co-defendants repeatedly kicked and otherwise assaulted Rivera Robles when he was lying face down on the ground, in no way resisting or posing a threat to the officers. DefendantAaronVidal Maldonado was the senior officer on the scene during the gas station beating, and failed to discourage the excessive force used by his subordinates. After this beating, defendant Vidal Maldonado directed officers to transport the badly injured, semiconscious victim to a nearby police station, where a co-defendant again assaulted the victim in Vidal Maldonado’s presence. The injuries to the victim caused by the beatings resulted in his death.

"Law enforcement officers who use their badges as an excuse to commit egregious acts of violence are an affront to the rule of law," said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. "The Civil Rights Division will continue to aggressively prosecute officers who abuse their power in this manner."

On December 20, 2009, co-defendants Elias Perocier Morales and Eliezer Rivera Gonzalez were sentenced to 10 years in prison and 6-and-a-half years in prison, respectively, for their roles in the unlawful beating. Co-defendants Aaron Vidal Maldonado and Jose Pacheco Cruz are scheduled for April 30, 2010.

Special Agent Luis Rivero of the FBI’s San Juan Office investigated this matter. The case was prosecuted by Assistant U.S. Attorney Antonio Bazan, Special Litigation Counsel Gerard Hogan, and Trial Attorney Avner Shapiro of the Justice Department’s Civil Rights Division.

WASHINGTON – Senior Judge Robert L. Echols of the Middle District of Tennessee today sentenced Eric Ian Baker to 183 months in prison for vandalizing and burning down the Islamic Center of Columbia, Tenn., the Justice Department announced. Baker pleaded guilty on Sept. 18, 2009, to destruction of religious property and using fire to commit a felony.

Baker, 34, previously admitted to the court that he and two others constructed Molotov cocktail explosive devices, ignited them and used them to destroy the mosque on Feb. 9, 2008. Baker further admitted that he committed the arson because of the religious character of the property and that he painted swastikas and the phrase "White Power" on the mosque in the course of the arson.

One of Baker’s co-defendants, Michael Corey Golden, was sentenced to 171 months for his role in the arson. The other co-defendant, Jonathan Edward Stone, pleaded guilty but has not yet been sentenced.

"The right to worship without fear of this kind of violent interference is among our most fundamental civil rights," said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. "We will aggressively prosecute anyone who seeks to intimidate or injure any congregation because of what they believe, how they worship, or who they are."

"This type of crime strikes at the heart of our civil rights and religious freedoms in America. I am very pleased that through local, state and federal cooperation, all defendants responsible for this vile attack have been brought to justice," said U.S. Attorney Edward M. Yarbrough for the Middle District of Tennessee.

This case was investigated by the FBI, the Bureau of Alcohol, Tobacco, Firearms and Explosives, Tennessee State Bomb and Arson and the Columbia, Tenn., Police Department. Assistant U.S. Attorney Hal McDonough from the U.S. Attorney’s Office in Nashville and Trial Attorney Jonathan Skrmetti from the Civil Rights Division prosecuted the case.

A federal court issued an order yesterday sentencing the owner and operator of a Los Angeles-area durable medical equipment (DME) company to prison in connection with an approximately $1 million power wheelchair fraud scheme, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney André Birotte Jr., for the Central District of California; Tony Sidley, Assistant Chief of the California Department of Justice, Bureau of Medi-Cal Fraud and Elder Abuse (Cal DOJ); Glenn R. Ferry, Special Agent-in-Charge for the Los Angeles Region of the Office of Inspector General (OIG) for the Department of Health and Human Services (HHS); and Steven Martinez, Assistant Director in Charge of the FBI’s Los Angeles Field Office.

Leonard Nwafor, 44, was sentenced in absentia by U.S. District Judge John F. Walter of the Central District of California to nine years in prison. In addition, Nwafor was ordered to serve three years of supervised release following his prison term, pay $526,243 in restitution and $25,000 in fines, and forfeit more than $526,000 in stolen Medicare funds to the U.S. government.

Nwafor was convicted at trial in September 2008 of conspiracy to commit health care fraud and health care fraud. After his conviction, Nwafor fled the jurisdiction and is considered a fugitive.

At trial, evidence established that Nwafor, through his company, Pacific City Group Inc., aka Pacific City Medical Equipment, submitted $1,109,438 in fraudulent claims to Medicare. As a result of the fraudulent claims, Nwafor received $526,243 in payments from Medicare. The evidence presented at trial showed that almost all the claims Nwafor submitted to Medicare were for expensive, high-end power wheelchairs and wheelchair accessories that were not needed by the beneficiaries.

At trial, elderly and disabled Medicare beneficiaries testified that individuals known as "marketers" approached them on the street, at home or in church and encouraged the beneficiaries to give the marketers their Medicare numbers and other personal information in exchange for free power wheelchairs. Evidence presented at trial established that Nwafor billed Medicare for power wheelchairs on behalf of more than 170 beneficiaries, none of whom actually needed the wheelchairs. The power wheelchairs Nwafor claimed Pacific City provided to the beneficiaries can be billed to Medicare for up to $7,000 each.

The evidence also showed that Nwafor supplied power wheelchairs to beneficiaries who were not able to use the chairs. One beneficiary, who was blind, testified that he could not see to operate the wheelchair and never used it. The same beneficiary also testified that a delivery driver working for Nwafor and the delivery driver’s girlfriend paid him $200 to refer them to other Medicare beneficiaries.

Another beneficiary testified about the aggressive techniques marketers used to recruit her and her husband into the fraudulent scheme. This beneficiary testified that an individual purporting to be from Medicare, but who was actually associated with Nwafor and his co-conspirators, threatened to terminate the Medicare benefits of the beneficiary and her husband unless they accepted two power wheelchairs that the beneficiary and her husband did not need.

The evidence at trial included testimony from Los Angeles-area physicians whose names appeared on prescriptions Nwafor used to support his false claims to Medicare. One of these physicians, a psychiatrist, testified that he does not prescribe power wheelchairs as part of his practice, and had never written a prescription for one. Other physicians testified that the prescriptions bearing their names were phony and that their handwriting was not on any of the prescriptions.

After his conviction, Nwafor admitted in documents he filed with the court that he purchased the prescriptions and documents he used to support his false claims to Medicare from a co-conspirator for approximately $1,300 per prescription. One of Nwafor’s co-conspirators, Ajibola Sadiqr, admitted that he purchased fraudulent prescriptions and documents from Nwafor to perpetrate his own fraudulent power wheelchair Medicare fraud scheme. Sadiqr pleaded guilty and is scheduled to be sentenced on April 12, 2010.

The case was prosecuted by Trial Attorney Jonathan Baum, former Special Trial Attorney Spencer Turnbull and Assistant Chief John S. (Jay) Darden of the Criminal Division’s Fraud Section, with the investigative assistance of the Cal DOJ and HHS-OIG. The case was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Central District of California.

Since their inception in March 2007, Strike Force operations in seven districts have obtained indictments of more than 500 individuals who collectively have falsely billed the Medicare program for more than $1.1 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

The National Drug Intelligence Center (NDIC), a component of the Department of Justice and the nation’s principal center for strategic drug intelligence, has released the National Drug Threat Assessment 2010 (NDTA 2010), detailing drug trafficking and abuse trends within the United States. In releasing the assessment, NDIC Director, Michael T. Walther stated, "The trafficking and abuse of drugs affects everyone. The economic cost alone is estimated at nearly $215 billion annually."

In receiving the 2010 National Drug Threat Assessment, Attorney General Eric Holder stated, "This report presents a comprehensive analysis of the drug threat to our nation and will be valuable in helping direct our fight against drug trafficking and abuse."

The NDTA 2010 addresses emerging developments related to the trafficking and use of illicit drugs, the non-medical use of controlled prescription drugs (CPDs), and the laundering of proceeds generated through illicit drug sales. It also addresses the role that drug trafficking organizations and organized gangs serve in domestic drug trafficking, the significant role that the Southwest Border plays in the illicit drug trade, and the societal impact of drug abuse. NDIC analysts estimate that the overall threat posed by illicit drugs will not diminish in the near term.

Director of National Drug Control Policy, Gil Kerlikowske said, "The 2010 National Drug Threat Assessment highlights diversion and abuse of prescription drugs as a serious and increasing problem. As part of the Obama Administration's comprehensive approach to reduce drug use and its consequences, ONDCP and Federal partner agencies have developed a plan to curb prescription drug abuse, which includes expanding prescription drug monitoring programs and educating healthcare providers and patients about the danger of abusing prescription drugs."

Notably, the NDTA 2010 details the rising availability of most illicit drugs in the United States largely the result of Mexican DTO efforts to increase drug production and distribution. In fact, in 2009 the prevalence of four of the five major drugs—heroin, methamphetamine, marijuana, and MDMA (3,4-methylenedioxymethamphetamine)—was widespread and increasing in some areas. The diversion and abuse of CPDs are also increasing throughout the country. Conversely, cocaine shortages first identified in 2007 persisted in many markets. Additionally, Mexican drug trafficking organizations (DTOs) remain the single greatest drug trafficking threat to the United States.

Significant trends include:

• Increased heroin availability evidenced by higher purity, lower prices, and elevated numbers of heroin-related overdoses and overdose deaths is partly attributable to increased production in Mexico from 17 pure metric tons in 2007 to 38 pure metric tons in 2008, according to U.S. Government estimates.
• Despite recent government of Mexico (GOM) efforts to prohibit the importation of methamphetamine precursor chemicals, methamphetamine availability increased as the result of higher production in Mexico using alternative, less-efficient precursors. Sustained domestic production also contributed to the increased availability levels.
• Cocaine shortages have persisted in many U.S. drug markets since early 2007, primarily because of decreased cocaine production in Colombia but also because of increased worldwide demand for cocaine, especially in Europe; high cocaine seizure levels that continued through 2009; and enhanced GOM counterdrug efforts. These factors most likely resulted in decreased amounts of cocaine being transported from Colombia to the U.S.–Mexico border for subsequent smuggling into the United States.
• The threat posed by the diversion and abuse of CPDs, primarily pain relievers, is increasing, evidenced by the sharp rise in the percentage (4.6% in 2007 to 9.8% in 2009) of state and local law enforcement agencies reporting CPDs as their greatest drug threat. Increased abuse of CPDs has led to elevated numbers of deaths related to prescription opioids, which increased 98 percent from 2002 to 2006.

Mexican DTOs continue to represent the single greatest drug trafficking threat to the United States. Mexican DTOs, already the predominant wholesale suppliers of illicit drugs in the United States, are gaining even greater strength in eastern drug markets where Colombian DTO strength is diminishing. The extent of Mexican DTO influence over domestic drug trafficking was evidenced in several ways in 2009.

• Mexican DTOs increased their cooperation with U.S.-based street and prison gangs to distribute drugs. In many areas, these gangs were using their alliances with Mexican DTOs to facilitate an expansion of their midlevel and retail drug distribution operations into more rural and suburban areas.
• Mexican DTOs increased the flow of several drugs (heroin, methamphetamine, and marijuana) into the United States, primarily because the increased production in Mexico.
• Mexican DTOs smuggled bulk cash drug proceeds totaling tens of billions of dollars from the United States through the Southwest Border and into Mexico. Much of the bulk cash (millions each week) was consolidated by the DTOs in several key areas, including Atlanta, Chicago, Los Angeles, New York City, and North Carolina, where it was prepared for transport to the U.S.–Mexico border and then smuggled into Mexico.

In preparing the 2010 assessment, NDIC partnered with federal, state, and local agencies in the collection of data and information. NDIC conducted thousands of field interviews with law enforcement and public health officials regarding all aspects of illicit drug activities in their jurisdictions. Another significant source of data and information is the National Drug Threat Survey. NDIC annually surveys a national, statistically representative sample of more than 3,069 state and local law enforcement agencies. Data from the survey are used to produce national-, regional-, and state-level statistical estimates, which NDIC intelligence analysts employ when preparing the national assessment.

A copy of the National Drug Threat Assessment 2010 can be found at NDIC’s web site at: http://www.justice.gov/ndic/pubs38/38661/index.htm

WASHINGTON- The Justice Department announced that Lloyd Mack Royal, III aka "Blyss", aka "B", aka "Furious" was convicted late yesterday of sex trafficking of minors and sex trafficking by force, fraud, and coercion, as well as firearm and drug charges. Two other co-defendants, Angela Samantha Bentolila and Paul Raymond Green, previously pleaded guilty to related charges.

The jury found Royal guilty of 3 counts of sex trafficking, including sex trafficking of minors and sex trafficking by force, fraud, and coercion. The jury also convicted Royal of conspiracy to commit sex trafficking, conspiracy to distribute controlled substances, possession of a firearm in the commission of a crime of violence, and two counts of distribution of controlled substances to a person under the age of twenty-one.

"The defendant preyed upon vulnerable minors and prostituted them by a variety of deplorable means for his own benefit," said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. "The Department of Justice will continue to devote its full efforts to prosecuting those who commit such exploitative crimes."

"We have made it a priority in Maryland to pursue criminals who lure or coerce children into prostitution," said U.S. Attorney Rod J. Rosenstein. "Maryland’s Human Trafficking Task Force works with law enforcement officers and private sector organizations to identify and rescue victims of human trafficking and prosecute criminals who exploit them. Pimps who victimize children are at the top of our list."

Sentencing before U.S. District Judge Alexander Williams, Jr. is scheduled for April 29, 2010. Royal faces incarceration of up to life in prison and potential fines in excess of $1 million.

In announcing the convictions, Assistant Attorney General Perez, and U.S. Attorney Rosenstein commended the Federal Bureau of Investigation, Montgomery County Police Department and Maryland Human Trafficking Task Force for their work in this cooperative investigation and prosecution. Assistant U.S. Attorney Solette Magnelli and Civil Rights Division Human Trafficking Prosecution Unit Trial Attorney Jim Felte are prosecuting this case for the government.

WASHINGTON - The United States filed suit today asking the U.S. District Court for the Middle District of Florida to permanently bar Elisa Veronica Barron from preparing federal tax returns, the Justice Department announced. The civil injunction suit alleges that Barron prepares returns through Lancaster Tax Service Inc. in Orlando, Fla.

According to the complaint, Barron prepares tax returns using false information in order to reduce her customers’ tax liabilities. Specifically, the government alleges that Barron knowingly misrepresents her customers’ filing status and claims non-qualifying individuals as dependents on her customers’ returns. Additionally, the complaint alleges that Barron ignores or modifies information provided by her customers for the purpose of claiming false or overstated deductions and for claiming tax credits that her customers were not eligible to claim.

The government estimates in the complaint that this alleged fraudulent tax preparation scheme by Barron resulted in an understatement of her customers’ federal income tax liabilities of more than $1 million for returns that Barron prepared in 2006-2007 alone.

Since 2001, the Justice Department’s Tax Division has obtained more than 455 injunctions to stop the promotion of tax fraud schemes and the preparation of fraudulent returns.

Information about these cases is available on the Justice Department Web site.

WASHINGTON – The United States has asked a federal court to permanently shut down a Miami tax return preparer and his business, the Justice Department announced today. The government complaint, filed in U.S. District Court in Miami, alleges that David Santiago and his business, Santiago Investment & Consulting Inc., prepare returns for customers that falsely claim the First-Time Homebuyer Credit and report other false income and expense items.

Congress enacted the First-Time Homebuyer Credit in 2008 to strengthen the real estate market and help the economy. It allowed persons who have not owned a home in the previous three years to claim a credit of up to $8,000 against their federal income taxes if they bought a home after April 8, 2008. The credit has since been expanded to allow, under certain conditions, current homeowners to claim the credit for a purchase of a new home. But in order for a taxpayer to claim the credit a home must have actually been bought during the tax year for which the credit is claimed.

The government complaint alleges that Santiago claimed the credit on customers’ returns even though he knew that they had not bought new homes. The complaint also alleges that Santiago claimed fabricated business deductions on some customers’ returns. Santiago also allegedly failed to keep adequate customer records or copies of the returns he prepared. A preparer’s failure to keep adequate records can subject him to civil penalties and an injunction.

Last October a federal court in Texas permanently barred a woman from preparing returns for others in a case where the Justice Department alleged abuse of the homebuyer credit and other tax law provisions.

Return preparer fraud is identified on the IRS Web site one of the 2010 "Dirty Dozen" tax scams.

Over the past decade, the Justice Department’s Tax Division has obtained more than 455 injunctions to stop tax fraud promoters and dishonest tax preparers. Information about these cases is available on the Justice Department Web site.

WASHINGTON – A federal judge in Kansas City, Kan., has issued a preliminary injunction barring a Garden City, Kan., tax preparer, Jose Lares, from preparing returns with false dependent exemptions and false filing statuses, the Justice Department announced today. Lares operates Dinero Rapido Tax Service in Garden City. The preliminary injunction was entered by Kathryn H. Vratil, Chief Judge of the U.S. District Court for the District of Kansas.

Lares consented to the preliminary injunction without admitting wrongdoing. It will remain in effect while the case is pending. The Justice Department complaint in the case seeks to bar Lares permanently from preparing any federal tax returns.

According to the government complaint, Lares claims false dependent exemptions and false filing statuses on customers’ returns. Lares previously operated a business in Garden City with a slightly different name —Income Tax Dinero Rapido. The complaint alleges that Internal Revenue Service (IRS) audits of clients of the former company resulted in customers owing more than $2 million. The complaint further states that IRS audits of customers of Lares’s current business, Dinero Rapido Tax Services, has revealed an average tax loss of over $6,000 per return.

Since 2001, the Justice Department’s Tax Division has obtained more than 455 injunctions to stop the promotion of tax fraud schemes and the preparation of fraudulent returns. Information about these cases is available on the Justice Department Web site.

WASHINGTON – Miami resident Daisy Martinez was sentenced today to 96 months in prison for her role in a series of Detroit Medicare fraud schemes, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney Barbara L. McQuade of the Eastern District of Michigan; Special Agent in Charge Andrew G. Arena of the FBI’s Detroit Field Office; and Special Agent in Charge Lamont Pugh III of the U.S. Department of Health and Human Services, Office of Inspector General’s (HHS-OIG) Chicago Regional Office.   Chief U.S. District Judge Gerald E. Rosen also ordered Martinez to pay $10,765,325 in restitution and to serve three years of supervised release following her prison term.

Martinez, 51, pleaded guilty in the Eastern District of Michigan on Oct. 30, 2009, to one count of conspiracy to commit health care fraud.  According to information contained in plea documents, Martinez admitted that in approximately March 2006, she devised a scheme with co-conspirator Jose Rosario to open a clinic that purported to specialize in infusion and injection therapy services in Michigan.  In fact, the sole purpose of the clinic was to defraud Medicare.  Martinez and her co-conspirators opened Sacred Hope Medical Center Inc., (Sacred Hope) in Southfield, Mich., in October 2006.  Martinez was an owner of the clinic, and she also managed the clinic on a day-to-day basis.  Martinez and Rosario recruited various co-conspirators into their scheme, including an office manager, Lill Vargas-Arias, to help run the clinic; a physician, purportedly to treat patients at the clinic; and recruiters/drivers, who were in charge of bringing Medicare beneficiaries to the clinic.  Rosario pleaded guilty for his role in the scheme on Aug. 18, 2009.  Vargas-Arias pleaded guilty on Sept. 2, 2009.

Martinez admitted that during the time Sacred Hope was open, the clinic routinely billed the Medicare program for services that were medically unnecessary or were never provided.  Martinez admitted she was aware that the clinic had purchased only a small fraction of the medications that the clinic billed the Medicare program for providing.  Martinez also admitted that patients were prescribed medications at the clinic based not on medical need, but on what medications were likely to generate Medicare reimbursements.  Martinez, along with Rosario, admitted to helping falsify medical files maintained by the clinic to make the treatments purportedly being given there appear legitimate, when in fact they were not. 

Martinez also admitted that Medicare beneficiaries were not referred to Sacred Hope by their primary care physicians, or for any other legitimate medical purpose, but rather were recruited through the payment of kickbacks.  In exchange for those kickbacks, Martinez admitted, the Medicare beneficiaries would visit the clinic and sign documents indicating that they had received the services billed to Medicare.  Kickbacks came in the form of cash and prescriptions for narcotic drugs.  Martinez admitted to knowing that co-conspirator Arnaldo Rosario, who also pleaded guilty for his role in the scheme on Aug. 18, 2009, oversaw and facilitated the payment of cash kickbacks to the Medicare beneficiaries.       

Martinez also admitted that beginning in approximately November 2006, she and other co-conspirators opened another, almost identical, infusion and injection clinic called Xpress Center Inc. (XPC)., in Livonia, Mich.  As with Sacred Hope, XPC’s sole purpose was to defraud Medicare.  Martinez and her co-conspirators used the same fraudulent practices to open and then operate XPC as they did with Sacred Hope, including creating fictitious patient files to cover up fraudulent billings to Medicare.  Similarly, Martinez admitted she was fully aware that XPC routinely billed the Medicare program for services that were medically unnecessary and in many instances never provided.  Martinez also admitted to knowing that the purpose of the clinic was not to provide legitimate health care to patients, but rather to defraud the Medicare program. 

Martinez also admitted that her actions at Sacred Hope and XPC were not her first with Detroit-area clinics that purported to specialize in infusion and injection therapy.  In particular, she admitted that in approximately March 2006, Martinez became involved in a scheme to recruit Medicare beneficiaries to come to Dearborn Medical Rehab Center (DMRC), a Dearborn, Mich., clinic that operated similar to Sacred Hope and XPC.   Martinez, along with other co-conspirators, agreed to recruit and pay Medicare beneficiaries at DMRC in exchange for a percentage of the Medicare reimbursements that these patients generated.  Martinez and her co-conspirators sent Arnaldo Rosario to Detroit to oversee payments to patients, and provided the cash to pay the kickbacks.  As with Sacred Hope and XPC, DMRC routinely billed the Medicare program for services that were medically unnecessary and, in many instances, never provided.       

Martinez admitted that between approximately March 2006 and March 2007, she and her co-conspirators caused the submission of approximately $15,311,605 in false and fraudulent claims to the Medicare program for services purportedly provided at Sacred Hope, XPC and DMRC.  Medicare paid approximately $10,765,325 on those claims.       

The case was prosecuted by Senior Trial Attorney John K. Neal and Trial Attorney Benjamin D. Singer of the Criminal Division’s Fraud Section.  The case was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Michigan. 

Since their inception in March 2007, Strike Force operations in seven districts have obtained indictments of more than 500 individuals who collectively have falsely billed the Medicare program for more than $1.1 billion.  In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers. 

To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov

WASHINGTON – A U.S. District Court has issued an order permanently barring Shawn Robin Gibson, a Detroit tax preparer, from preparing federal tax returns for others, the Justice Department announced today.

Gibson operated businesses that provided tax return preparation services under the names New Detroit Tax Service and Shawn Gibson & Company. The court found that Gibson has admitted that the tax returns he prepared for customers contained falsely claimed Schedule C losses, itemized deductions and Schedule A deductions. In addition, Gibson admitted to preparing false powers of attorney to amend and file his customers’ returns in order to defraud the Internal Revenue Service (IRS) and obtain portions of his customers’ refunds.

Gibson is currently incarcerated after pleading guilty in November 2006, to one count of conspiring to impede, obstruct and defeat the lawful functions of the IRS. In addition, in July 2008, Gibson pleaded guilty to one count of aiding and assisting in the preparation of false and fraudulent income tax returns. The court found that based on his prior criminal convictions and his continued efforts to engage in tax preparation activities while incarcerated, a permanent injunction was appropriate as there is a likelihood that he will commit future violations of the internal revenue laws.

The court also ordered Gibson to provide the government with a list of his customers and to contact all of his customers by mail within 30 days of the date he is released from prison and provide them with a copy of the Court’s injunction order.

Gracias a todos por venir. La cumbre de hoy marca otro paso importante en nuestra tarea enérgica, integral y colaborativa para luchar contra el fraude hipotecario y proteger a los propietarios de viviendas estadounidenses.

Aquí en Phoenix, y en ciudades de todo el país, los delitos de fraude hipotecario han alcanzado proporciones de crisis. Pero estamos defendiéndonos. Y con la Unidad Especial de Control contra el Fraude Financiero que el Presidente Obama creó en noviembre pasado, estamos enfrentando los desafíos y consecuencias del fraude hipotecario de maneras audaces, innovadoras y coordinadas.

El Departamento de Justicia toma como un honor liderar esta iniciativa histórica. Y nos enorgullece trabajar en asociación con el Buró Federal de Investigaciones [Federal Bureau of Investigation (FBI)], con agencias de todo el gobierno federal, y con oficinas estatales y locales de las fuerzas del orden público. Aquí en Arizona, tenemos la suerte de tener el fuerte liderazgo del Fiscal Federal Dennis Burke y el Secretario de Justicia Terry Goddard. Y también agradecemos el destacado trabajo del Secretario de Justicia Auxiliar Tony West, que encabeza la División Civil del Departamento de Justicia, y el Fiscal Federal para el Distrito Este de California, Ben Wagner, ambos copresidentes del Grupo de Trabajo de la Unidad Especial de Fraude Hipotecario.

A través de esta amplia coalición federal, estatal y local, estamos usando todas las herramientas a nuestra disposición – entre ellas, tecnologías avanzadas, nuevas plataformas de comunicación y el mejor talento que tenemos – para prevenir, enjuiciar y castigar los delitos de fraude hipotecario. Y estamos logrando un progreso significativo en nuestro trabajo para proteger a las familias y las comunidades, luchar contra la discriminación en nuestros mercados de préstamos, recuperar productos monetarios para las víctimas del fraude y restablecer la confianza en nuestros mercados de vivienda y financieros.

Ahora bien, en las últimas semanas, hemos observado algunos signos alentadores de mejora en nuestra economía. Pero también sabemos que millones de estadounidenses siguen luchando para sobrellevar la crisis en la vivienda que ha devastado tantos vecindarios y familias.

Esta mañana, escuchamos los testimonios de víctimas y expertos de la industria sobre cómo los delitos de fraude hipotecario están evolucionando y sobre el dolor provocado por estos ardides. Y esta tarde, la unidad especial escuchará los testimonios de representantes locales de las fuerzas del orden público que ofrecerán sus recomendaciones sobre cómo podemos responder con rapidez y defendernos con la mayor eficacia.

Este debate es crucial. Usaremos información obtenida aquí en Phoenix – y en otros epicentros del fraude hipotecario – para enfocar y fortalecer nuestras actividades de cumplimiento. Los ardides de fraude hipotecario deben ser frenados en seco. Y quienes buscan explotar la crisis financiera de nuestro país para provecho personal serán llevados a la justicia.

De hecho, en este momento, el FBI está investigando más de 2,800 casos de fraude hipotecario, o sea, casi un 400 por ciento más que hace cinco años. Y, con recursos adicionales, podremos mejorar y expandir las iniciativas actuales. Hoy me complace anunciar que nuevas inversiones incluidas en el presupuesto del año fiscal 2010 pronto serán distribuidas para combatir el fraude hipotecario. Esta primavera, esperamos que se asignen casi 8 millones de dólares para esta tarea, y casi 2 millones de dólares de estos fondos serán destinados a Arizona. Confío en que estas nuevas inversiones nos permitirán expandir el éxito reciente que hemos observado en todo el país y el progreso realizado aquí en Arizona.

La semana pasada, el Secretario de Justicia Goddard anunció un acuerdo conciliatorio de $120,000 dólares con distintos demandados por sus papeles en un ardid de bienes raíces en el Condado de Pima. Y dos años antes, Mario Bernadel – el líder de un ardid de fraude masivo aquí en Phoenix – fue sentenciado a 17 años en una prisión federal. Él y sus coconspiradores habían usado documentos fraudulentos para comprar casi 40 propiedades, lo que provocó más de $9 millones de dólares de pérdidas a los bancos de esta ciudad. Al igual que muchos otros, el Sr. Bernadel había visto el fraude hipotecario como un camino a la riqueza. Pero terminó siendo su boleto a prisión.

Espero que su caso sea una lección para quienes piensen participar en ardides de fraude hipotecario: Serán descubiertos. Serán enjuiciados. Y serán castigados.

También espero que este caso, y esta cumbre, envíen un mensaje a las víctimas del fraude hipotecario: Estamos trabajando sin descanso para restablecer lo que han perdido y reconstruir la confianza que será el motor de la recuperación económica de nuestro país.

Les agradezco a todos por su asociación en este trabajo y su compromiso histórico para proteger al pueblo estadounidense.

WASHINGTON – Representatives of the Financial Fraud Enforcement Task Force, including Attorney General Eric Holder, met in Phoenix today for the second of a series of Mortgage Fraud Summits. The task force, established by President Barack Obama in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes, is comprised of representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement.

The Attorney General announced that new investments included in the FY 2010 budget will soon be distributed to combat mortgage fraud. This spring, nearly $8 million for mortgage fraud enforcement and related efforts, including task forces, will be allocated for this work, including $1.7 million to Arizona.

A recent study from the Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) study indicated that the Phoenix metropolitan area is ranked fourth in the nation for the number of Suspicious Activity Reports (SARs) filed by depository institutions concerning suspected mortgage fraud. In addition, according to the U.S. Department of Housing and Urban Development, Arizona is ranked number one for homes that were funded by Federal Housing Administration loans and have been foreclosed upon.

"Today’s summit marks another important step in our nation’s most aggressive, comprehensive, and collaborative effort to combat mortgage fraud and protect American homeowners," said Attorney General Holder. "Here in Phoenix, and in cities across the country, mortgage fraud crimes have reached crisis proportions. But we are fighting back, and with the Financial Fraud Enforcement Task Force that President Obama created last November, we’re tackling the challenges and consequences of mortgage fraud in bold, innovative and coordinated ways. We have one message to those who would engage in mortgage fraud schemes: you will be found, you will be prosecuted, and you will be punished. "

"We welcome the opportunity to combine forces with federal agencies to attack the serious problem of mortgage fraud in Arizona," said Arizona Attorney General Terry Goddard. "Arizona is ground zero in the foreclosure crisis, which plays a large role in our state's economic downturn. This crisis has been exacerbated by the deceptive practices of lenders in originating and servicing loans and fraudulent mortgage rescue scams that prey on borrowers desperate to hang on to the American dream of owning a home. "

Task force members met today with Phoenix area community leaders, legal services providers, banking, mortgage and real estate industry representatives and law enforcement officials to discuss this problem of mortgage fraud from a national, state and local perspective. In the morning, attendees participated in panels on mortgage fraud trends in Phoenix and the community impact of mortgage fraud. In the afternoon, task force representatives are meeting privately with law enforcement officials involved in the investigation of mortgage fraud.

Also participating in the summit will be Assistant Attorney General for the Civil Division Tony West; U.S. Attorney for the District of Arizona Dennis Burke; U.S. Attorney for the Eastern District of California Ben Wagner; Deputy Inspector General at the Department of Housing and Urban Development Michael P. Stephens; FBI Chief of the Economic Crimes Unit Sharon Ormsby; Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) Deputy Director Charles Steele; Executive Director of the Financial Fraud Enforcement Task Force Robb Adkins; and representatives from U.S. Secret Service, U.S. Postal Inspection Service, Internal Revenue Service and local police agencies. 

Mortgage fraud is a key focus of the Financial Fraud Enforcement Task Force’s efforts. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.

The Justice Department today announced that two detainees have been transferred from the detention facility at Guantanamo Bay to the control of the Government of Switzerland. The Swiss Government, with the support of the Canton of Jura, accepted the two Chinese nationals of Uighur ethnicity for resettlement in Switzerland.

These detainees, who were subject to release from Guantanamo Bay as a result of court orders, had been approved for release by the prior Administration, which determined that it would no longer treat them as enemy combatants. As directed by the President’s Jan. 22, 2009 Executive Order, the interagency Guantanamo Review Task Force subsequently conducted a comprehensive review of each of the detainees. As a result of that review, these detainees were approved for transfer or release from Guantanamo Bay.

In accordance with Congressionally-mandated reporting requirements, the Administration informed Congress of its intent to transfer each of these detainees at least 15 days in advance of their transfer.

The United States is grateful to the Government of Switzerland and the Canton of Jura for their willingness to support U.S. efforts to close the Guantanamo Bay detention facility. This transfer was carried out under an arrangement between the United States and the Government of Switzerland. The United States and the Government of Switzerland will continue consultations regarding these individuals.

Since 2002, more than 580 detainees have departed Guantanamo Bay for other destinations, including Albania, Algeria, Afghanistan, Australia, Bangladesh, Bahrain, Belgium, Bermuda, Chad, Denmark, Egypt, France, Georgia, Hungary, Iran, Iraq, Ireland, Italy, Jordan, Kuwait, Libya, Maldives, Mauritania, Morocco, Pakistan, Palau, Portugal, Russia, Saudi Arabia, Slovakia, Somalia, Spain, Sweden, Switzerland, Sudan, Tajikistan, Turkey, Uganda, United Kingdom and Yemen. Today, 183 detainees remain at Guantanamo Bay.

A State Department employee was sentenced today to 12 months of probation for illegally accessing more than 60 confidential passport application files, Assistant Attorney General Lanny A. Breuer of the Criminal Division announced. Debra Sue Brown, 47, of Oxon Hill, Md., was also ordered by U.S. Magistrate Judge John M. Facciola in the District of Columbia to perform 50 hours of community service. Brown pleaded guilty on Dec. 11, 2009, to a one-count criminal information charging her with unauthorized computer access.

According to court documents, Brown has worked full-time for the State Department since September 1995 as a file clerk and a file assistant in the Bureau of Consular Affairs. In pleading guilty, Brown admitted that she had access to official State Department computer databases in the regular course of her job, including the Passport Information Electronic Records System (PIERS), which contains all imaged passport applications dating back to 1994. The imaged passport applications on PIERS contain, among other things, a photograph of the passport applicant as well as certain personal information including the applicant’s full name, date and place of birth, current address, telephone numbers, parent information, spouse’s name and emergency contact information. These confidential files are protected by the Privacy Act of 1974, and access by State Department employees is strictly limited to official government duties.

Brown admitted that between March 25, 2005, and Feb. 7, 2008, she logged onto the PIERS database and repeatedly searched for and viewed the passport applications of more than 60 celebrities and their families, actors, comedians, professional athletes, musicians and other individuals identified in the press as well as personal friends and acquaintances. Brown admitted that she had no official government reason to access and view these passport applications, but that her sole purpose in accessing and viewing these passport applications was idle curiosity.

To date, nine current or former State Department employees or contractors , including Brown, have pleaded guilty in this continuing investigation. On Sept. 22, 2008, Lawrence C. Yontz, a former Foreign Service Officer and intelligence analyst, pleaded guilty to unlawfully accessing nearly 200 confidential passport files. Yontz was sentenced on Dec. 19, 2008, to 12 months of probation and ordered to perform 50 hours of community service. On Jan. 14, 2009, Dwayne F. Cross, a former administrative assistant and contract specialist, pleaded guilty to unlawfully accessing more than 150 confidential passport files. Cross was sentenced on March 23, 2009, to 12 months of probation and ordered to perform 100 hours of community service. On Jan. 27, 2009, Gerald R. Lueders, a former Foreign Service Officer, watch officer and recruitment coordinator, pleaded guilty to unlawfully accessing more than 50 confidential passport files. Lueders was sentenced on July 8, 2009, to 12 months of probation and ordered to pay a $5,000 fine. On July 10, 2009, William A. Celey, a file assistant, pleaded guilty to unlawfully accessing more than 75 confidential passport files. Celey was sentenced on Oct. 23, 2009, to 12 months of probation and ordered to perform 50 hours of community service.

On Aug. 17, 2009, Kevin M. Young, a contact representative, pleaded guilty to unlawfully accessing more than 125 confidential passport files. Young was sentenced on Dec. 9, 2009, to 12 months of probation and ordered to perform 100 hours of community service. On Aug. 26, 2009, Karal Busch, a former citizens services specialist, pleaded guilty to unlawfully accessing more than 65 confidential passport files. Busch was sentenced on Dec. 15, 2009, to 24 months of probation and ordered to perform 25 hours of community service. On Oct. 27, 2009, Yvette M. Burrison, a passport specialist, pleaded guilty to unlawfully accessing nearly 100 confidential passport files. Burrison is scheduled to be sentenced on April 7, 2010. On Nov. 9, 2009, Susan Holloman, a file assistant, pleaded guilty to unlawfully accessing 70 confidential passport files. Holloman was sentenced on Jan. 21, 2010, to 12 months of probation and ordered to perform 75 hours of community service.

These cases are being prosecuted by Trial Attorney Armando O. Bonilla of the Criminal Division’s Public Integrity Section. The cases are being investigated by the State Department Office of Inspector General.

A federal jury in the Western District of North Carolina convicted Ugochukwu Enwerem yesterday on charges stemming from an advance-fee fraud scheme, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division and Deputy Chief Postal Inspector Zane M. Hill.

Following six days of trial and four hours of deliberation, Enwerem was found guilty on one count of conspiracy to commit mail and wire fraud, and 14 counts of wire fraud charged in a July 2007 indictment stemming from an "advance-fee" scheme. Forfeiture of more than $9.5 million has also been ordered. In September 2009, co-defendant Kent Oserumen Okojie pleaded guilty to one count of conspiracy and two counts of wire fraud. He is awaiting sentencing. Okojie and Enwerem, Nigerian citizens who resided in the Netherlands, originally were charged in a June 2007 complaint and were subsequently extradited to the United States from The Netherlands, where they had been in custody on Dutch charges.

According to evidence presented at trial, between at least September 2002 and April 2007, Okojie, Enwerem and their co-conspirators solicited individuals by sending spam e-mails informing potential victims that they had either won a foreign lottery or inherited a large sum of money from a long lost relative. When individuals responded to the e-mails, the defendants or their co-conspirators, posing as lawyers, bankers and European government officials, solicited fees from victims ostensibly to pay for things such as "anti-terrorism certificates," "EU bank clearances" and legal fees in order to secure their lottery winnings or inheritance. Trial evidence established that Okojie and Enwerem instructed U.S. and international victims to wire funds through Western Union and other money transfer services to the defendants and their designees in The Netherlands, Spain and the United Kingdom. The Western Union servers are located in the Western District of North Carolina. According to trial testimony, at least 18 U.S. and international victims lost more than $9.5 million as a result of this scheme.

At sentencing, Enwerem faces a maximum sentence of five years in prison and a $250,000 fine for the conspiracy count and 20 years in prison and a $250,000 fine for each of the 14 wire fraud counts.

The case was investigated by a team of U.S. Postal Inspectors working with the Criminal Division’s Fraud Section and the Amsterdam Politie. The case was prosecuted by Trial Attorneys Laura Perkins and Nicole H. Sprinzen of the Fraud Section. Significant assistance was provided by the Criminal Division’s Office of International Affairs.

U.S. District Judge Deborah K. Chasanow today sentenced Roberto Antonio Argueta, aka "Alex Antonio Cruz," aka "Buda," 29, of Hyattsville, Md., to life in prison, plus an additional 35 years, for ordering the murder of Nancy Diaz and the attempted murder of another juvenile girl.  A 12-person federal jury voted today to impose a sentence of life in prison without parole on Argueta.

The conviction and sentence were 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 - 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.

On March 4, 2010, the jury found Argueta guilty of conspiracy to commit murder in aid of a racketeering enterprise known as MS-13; conspiracy to participate in racketeering; murder in aid of racketeering; murder resulting from the use of a gun in a violent crime; two counts of assault with a dangerous weapon in aid of racketeering; and two counts of using a gun during a violent crime. 

According to testimony presented during the eight-week trial, Argueta was a leader of the Langley Park Salvatruchos (LPS) clique of La Mara Salvatrucha, also known as MS-13. The gang is 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.

Witnesses testified at trial that on Sept. 17, 2004, Argueta and other MS-13 gang members stabbed a rival gang member with broken bottles and knives outside a nightclub in Langley Park, Md.  Trial evidence established that in October 2004 Argueta led a gang meeting in Prince George’s County in which he and other gang members discussed plans to kill Nancy Diaz. The jury found, based on the evidence presented at trial and during the penalty phase, that Argueta ordered the murder of Nancy Diaz. On Oct. 25, 2004, two other MS-13 members drove Diaz and another juvenile female to the George Washington Cemetery in Adelphi, Md.  According to testimony, another MS-13 member shot and killed Nancy Diaz, and shot the other girl in the face and stabbed her twice in the chest to attempt to make sure she was dead.  The victim survived and she later identified her assailants.

Israel Ernesto Palacios, aka "Homie," 32, of Silver Spring, Md., was sentenced on Nov. 10, 2008, to life in prison for his role in the murder and attempted murder.  James Guillen, aka "Toro," 23, of Hyattsville, Md., who drove the MS-13 members and victims to the cemetery, pleaded guilty to racketeering conspiracy and was sentenced on Jan. 11, 2008, to 262 months in prison.  Jeffrey Villatoro, one of the murderers of Nancy Diaz, was prosecuted in the Circuit Court of Prince George’s County and received a life sentence for his crimes.  Another of the murderers, Jesus Canales, pleaded guilty in federal court to racketeering conspiracy, including the murder of Nancy Diaz.  A sentencing date for Canales has not yet been set by the court.

To date, 51 MS-13 members have been charged in the District of Maryland with various federal offenses. Twenty-five MS-13 members have been convicted at trial or have pleaded guilty to racketeering charges and 19 have pleaded guilty to other charges, primarily immigration or gun violations. Four of these defendants have been sentenced to life in prison for their crimes.  One remaining defendant faces a capital trial scheduled to begin in June 2010.

The case was prosecuted by Deputy Chief James M. Trusty and Trial Attorney Laura J. Gwinn of the Criminal Division’s Gang Unit, and Assistant U.S. Attorney Robert K. Hur of the District of Maryland.

The case was investigated by members of the Regional Anti-Gang Enforcement (RAGE) Task Force. The Prince George’s County State’s Attorney Office and the Montgomery County State’s Attorney Office also provided assistance in the case.

WASHINGTON – The United States has reached a comprehensive settlement agreement with the city of Jackson, Miss., to improve access to public transportation for individuals with disabilities, the Justice Department announced.

The settlement, in the form of a consent decree, was approved by the city last night and is subject to approval by the U.S. District Court in Jackson. Under the terms of the decree, the city will maintain the wheelchair lifts of Jackson Public Transportation System (JATRAN), Jackson's fixed route bus system; adequately train personnel to properly assist passengers with disabilities; and meet its required level of service to passengers of Handilift, the ADA complementary paratransit service. The decree will be in effect for five years.

"Equal access to public transportation is a critical right that is guaranteed for people with disabilities, ensuring their ability to live independently in the community," said Thomas E. Perez, Assistant Attorney General in charge of the Justice Department's Civil Rights Division. "The department appreciates the city of Jackson's cooperation in resolving this matter and their commitment to moving forward with full accessibility of it transportation system."

In July 2009, the department intervened in an ongoing class action filed in September 2008, by 11 Jackson residents and two non-profit organizations on behalf of individuals with disabilities against the city and JATRAN. The department's complaint alleged that the city had violated Title II of the ADA, Section 504 of the Rehabilitation Act, and their implementing regulations by failing to provide a level of public transportation services to users with disabilities that is comparable to those provided to individuals without disabilities.

The agreement requires that the city:

• Implement procedures for removing buses with inoperative lifts from service.
• Provide alternative transportation whenever an inaccessible bus lift significantly delays transportation for a rider with a disability.
• Ensure that no riders are stranded without transportation to their destination before shutting down operations for the day.
• Design, fund, implement and operate Handilift service to satisfy all requests for next-day service.
• Meet agreed upon performance standards for Handilift service.
• Designate an ADA Coordinator in the City Department of Planning and Development.
• Train all vehicle operators, mechanics, and office staff, including managers, reservationists and dispatchers.
• Implement a process for rider complaints.
• Conduct public outreach according to the settlement, including updating of user manuals and JATRAN websites.
• Obtain approval from the United States before implementing certain changes or revisions to services or policies.
• Record and report data on compliance with these provisions.
• Fund an independent monitor to assess the city's compliance with these provisions.
• Pay penalties for violation of these provisions, in the form of free vouchers to individual riders affected.

The ADA, the Rehabilitation Act of 1973 and their implementing regulations detail the requirements with which fixed route and complementary paratransit public transportation systems must comply.

"The department's intervention in this lawsuit will help to insure that Jackson residents with disabilities have greater access to employment, shopping, medical care, and other services which is possible only when public transportation is made more accessible," said Don Burkhalter, U.S. Attorney for the Southern District of Mississippi.

The full decree will be available on the department's Web site after it is approved by the court. Those interested in finding out more about this settlement agreement or a public transportation's obligations under the ADA can call the Justice Department's toll-free ADA Information Line at (800) 514-0301 (voice) or (800) 514-0383 (TDD), access its ADA Web site at www.ada.gov, or access the Federal Transit Administration's ADA Web site at www.fta.dot.gov/ada.

WASHINGTON – Sterling Heights, Mich., resident Solomon Nathaniel was sentenced today to 62 months in prison for his role in a wide-ranging conspiracy to defraud the Medicare program, announced Assistant Attorney General Lanny Breuer of the Criminal Division; U.S. Attorney for the Eastern District of Michigan Barbara L. McQuade; Special Agent in Charge Andrew G. Arena of the FBI’s Detroit Field Office; and Special Agent in Charge Lamont Pugh III of the U.S. Department of Health and Human Services, Office of Inspector General’s (HHS-OIG) Chicago Regional Office. U.S. District Judge Sean F. Cox also ordered Nathaniel to pay $2,875,000 in restitution and to serve a three-year term of supervised release following his incarceration.

Nathaniel pleaded guilty on Oct. 19, 2009, in the Eastern District of Michigan to conspiracy to commit health care fraud. According to information contained in plea documents, Nathaniel, a licensed physical therapist, admitted that he began working in approximately December 2003 as a contract therapist for co-conspirator Suresh Chand, who also pleaded guilty in connection with this case. Chand owned and controlled several companies operating in the Detroit area that purported to provide physical and occupational therapy services to Medicare beneficiaries. According to his plea documents, Nathaniel admitted that he, Chand and others created fictitious therapy files appearing to document physical and occupational therapy services provided to Medicare beneficiaries, when in fact no such services had been provided. According to court documents, the fictitious services reflected in the files were billed to Medicare through sham Medicare providers controlled by co-conspirators.

Nathaniel also admitted that during the course of the scheme he signed approximately 1,250 fictitious physical therapy files, indicating that he had provided physical therapy services to Medicare beneficiaries, when in fact he had not. Nathaniel admitted that he was paid between $90 and $110 for each file he falsified. Nathaniel also admitted that between approximately December 2003 and July 2006, he falsified physical therapy files that supported claims to the Medicare program totaling approximately $6,250,000. Medicare paid approximately $2,875,000 on those claims. Nathaniel admitted that throughout the conspiracy he was fully aware that Medicare was being billed for physical therapy services that he falsely indicated he had performed.

Chand pleaded guilty on Sept. 28, 2009, before U.S. District Judge Sean F. Cox to one count of conspiracy to commit health care fraud and one count of conspiracy to launder money.

This case was prosecuted by Senior Trial Attorney John K. Neal of the Criminal Division’s Fraud Section and by Special Assistant U.S. Attorney Thomas W. Beimers of the Eastern District of Michigan. The FBI and HHS-OIG conducted the investigation. The case was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Michigan.

Since their inception in March 2007, Strike Force operations in seven districts have obtained indictments of more than 500 individuals who collectively have falsely billed the Medicare program for more than $1.1 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

Sterling Heights, Mich., resident Solomon Nathaniel was sentenced today to 62 months in prison for his role in a wide-ranging conspiracy to defraud the Medicare program, announced Assistant Attorney General Lanny Breuer of the Criminal Division; U.S. Attorney for the Eastern District of Michigan Barbara L. McQuade; Special Agent in Charge Andrew G. Arena of the FBI’s Detroit Field Office; and Special Agent in Charge Lamont Pugh III of the U.S. Department of Health and Human Services, Office of Inspector General’s (HHS-OIG) Chicago Regional Office. U.S. District Judge Sean F. Cox also ordered Nathaniel to pay $2,875,000 in restitution and to serve a three-year term of supervised release following his incarceration.

Nathaniel pleaded guilty on Oct. 19, 2009, in the Eastern District of Michigan to conspiracy to commit health care fraud. According to information contained in plea documents, Nathaniel, a licensed physical therapist, admitted that he began working in approximately December 2003 as a contract therapist for co-conspirator Suresh Chand, who also pleaded guilty in connection with this case. Chand owned and controlled several companies operating in the Detroit area that purported to provide physical and occupational therapy services to Medicare beneficiaries. According to his plea documents, Nathaniel admitted that he, Chand and others created fictitious therapy files appearing to document physical and occupational therapy services provided to Medicare beneficiaries, when in fact no such services had been provided. According to court documents, the fictitious services reflected in the files were billed to Medicare through sham Medicare providers controlled by co-conspirators.

Nathaniel also admitted that during the course of the scheme he signed approximately 1,250 fictitious physical therapy files, indicating that he had provided physical therapy services to Medicare beneficiaries, when in fact he had not. Nathaniel admitted that he was paid between $90 and $110 for each file he falsified. Nathaniel also admitted that between approximately December 2003 and July 2006, he falsified physical therapy files that supported claims to the Medicare program totaling approximately $6,250,000. Medicare paid approximately $2,875,000 on those claims. Nathaniel admitted that throughout the conspiracy he was fully aware that Medicare was being billed for physical therapy services that he falsely indicated he had performed.

Chand pleaded guilty on Sept. 28, 2009, before U.S. District Judge Sean F. Cox to one count of conspiracy to commit health care fraud and one count of conspiracy to launder money.

This case was prosecuted by Senior Trial Attorney John K. Neal of the Criminal Division’s Fraud Section and by Special Assistant U.S. Attorney Thomas W. Beimers of the Eastern District of Michigan. The FBI and HHS-OIG conducted the investigation. The case was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Michigan.

Since their inception in March 2007, Strike Force operations in seven districts have obtained indictments of more than 500 individuals who collectively have falsely billed the Medicare program for more than $1.1 billion.  In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov

WASHINGTON – A federal jury in Sacramento, Calif., today convicted, Eric Clawson, 28, of San Francisco, of a federal hate crime for assaulting an African-American man in a Chico, Calif. bar, announced Thomas E. Perez, Assistant Attorney General for the Civil Rights Division, and Benjamin B. Wagner, U.S. Attorney for the Eastern District of California.

Clawson was convicted following a 3-day trial. The evidence at trial showed that on the evening of July 6, 2008, Clawson entered Riley’s Bar & Grill in Chico while the victim was sitting inside with a friend. Shortly after entering the bar, Clawson used a racially-derogatory term to object to the victim’s presence. Clawson repeated this slur several times and, a short while later, without any verbal or physical provocation, approached and punched the victim in the face. The assault rendered the victim unconscious and inflicted injuries to his face and mouth.

A second defendant and associate of Clawson who was with Clawson when the assault took place, Joe Grivette, previously pleaded guilty on March 15, 2010, to a related charge of misprision of a felony.

"Bias-motivated acts of violence are offensive to our nation's fundamental values of equal rights and equal justice. Such acts of violence have no place in our country," said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. "The Justice Department is committed to vigorously prosecuting the federal laws prohibiting violent acts motivated by hate."

"There is no place for the reprehensible, violent conduct of the defendant in our community," said Benjamin B. Wagner, U.S. Attorney for the Eastern District of California. "We will continue working together with state and local authorities to bring to justice those who intimidate and assault people because of race or national origin."

Clawson faces a maximum of 10 years in prison and a fine of $250,000. Sentencing is scheduled for June 10, 2010.

Agents from the Sacramento Division of the Federal Bureau of Investigation and investigators from the Butte County District Attorney’s Office investigated this matter. The case is being jointly prosecuted by Assistant U.S. Attorney Russell Carlberg of the U.S. Attorney’s Office for the Eastern District of California and Trial Attorney Edward Chung of the Justice Department’s Civil Rights Division.

The Department of Justice today announced that three detainees have been transferred from the detention facility at Guantanamo Bay to the custody and control of Georgia.

As directed by the President’s January 22, 2009 Executive Order, the interagency Guantanamo Review Task Force conducted a comprehensive review of these cases. As a result of that review, which examined a number of factors, including security issues, the detainees were approved for transfer by unanimous consent among all the agencies involved in the Task Force. In accordance with Congressionally-mandated reporting requirements, the Administration informed Congress of its intent to transfer these detainees at least 15 days before their transfer.

Earlier today, three detainees, whose identities are being withheld for security and privacy reasons, were transferred to Georgia. The United States is grateful to Georgia for its willingness to support U.S. efforts to close the Guantanamo Bay detention facility.

These transfers were carried out under an arrangement between the United States and Georgia. The United States coordinated with the Georgia to ensure the transfers took place under appropriate security measures and consultations regarding these individuals will continue.

Since 2002, more than 580 detainees have departed Guantanamo Bay for other destinations.

Rolondae Mitchell-Straughter and Ana Quinteros each pleaded guilty yesterday in connection with their roles in an "arthritis kit" Medicare fraud scheme, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney José Angel Moreno of the Southern District of Texas; Richard C. Powers, Special Agent-in-Charge of the FBI’s Houston office; and Special Agent-in-Charge Mike Fields of the Dallas Regional Office of the Department of Health and Human Services (HHS), Office of Inspector General (OIG), Office of Investigations.

Mitchell-Straughter, 43, and Quinteros, 28, each pleaded guilty before U.S. District Court Judge Gray Miller in the Southern District of Texas to conspiracy to commit health care fraud. Mitchell-Straughter was an administrative assistant at two Houston-area durable medical equipment (DME) companies: Family Healthcare Services and its successor company, Family DME Inc . Quinteros was a patient recruiter.

In connection with the pleas, the defendants admitted that Family DME billed Medicare for expensive, rigid orthotics and braces that were packaged together and referred to as an "arthritis kit," at a cost of approximately $4,000 per kit, when in fact, the equipment supplied was not medically necessary and in many cases not even supplied. In total, Family DME submitted more than $1,505,000 in claims to Medicare. 

Sentencing for Mitchell-Straughter and Quinteros is scheduled for June 18, 2010. The defendants each face a maximum penalty of 10 years in prison and a $250,000 fine. Four other defendants are scheduled for trial beginning on March 29, 2010.

The case was prosecuted by Trial Attorneys Charles D. Reed and Sam Sheldon of the Criminal Division’s Fraud Section, and was investigated by the FBI, HHS-OIG and the Office of the Texas Attorney General, Medicaid Fraud Control Unit. 

The case was brought as part of the Medicare Fraud Strike Force, supervised by the U.S. Attorney’s Office for the Southern District of Texas and the Criminal Division’s Fraud Section. Since their inception in March 2007, Strike Force operations in seven districts have obtained indictments of more than 500 individuals who collectively have falsely billed the Medicare program for more than $1.1 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