District Not Recorded
The source did not name an office we could identify. These records remain unassigned rather than guessed.
Orange City Landlord and Manager to Pay $100,000 in Civil Penalties as Part of Settlement of Justice Department Housing Discrimination LawsuitRead the Press Release
WASHINGTON – The Justice Department today announced that landlord James Stevens, his company Fountain View Apartments Inc., and his former rental manager, Mildred Chastain, have agreed to pay $415,000 in monetary damages and civil penalties to settle a Fair Housing Act lawsuit alleging that they discriminated against African Americans and families with children at Fountain View Apartments, a 42-unit apartment complex in Orange City, Fla.
Under the consent decree, which must still be approved by the U.S. District Court for the Middle District of Florida, the defendants must pay $175,000 to nine individuals identified by the United States as victims of defendants’ discriminatory conduct, $140,000 to three plaintiff-intervenors, and $100,000 to the United States as a civil penalty. In addition, the consent decree prohibits the defendants from engaging in discrimination and requires Fountain View Apartments Inc. to retain an independent manager to manage the property.
"Equal access to housing is a basic necessity and a civil right, and the Fair Housing Act guarantees that all individuals can access that right free from discrimination," said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. "This settlement will ensure that the equal housing opportunities required by law are provided at Fountain View Apartments and send a message to all housing providers that we have no tolerance for discrimination based on race or color or familial status."
"It is immensely important that the Department of Justice is working so hard to stop this unfair treatment and penalize those who engage in housing discrimination in our District and nationwide," stated A. Brian Albritton, U.S. Attorney for the Middle District of Florida.
The case began when Lewarna Williams, an African American woman, visited Fountain View with her grandson and a friend and inquired about the availability of apartments. Defendant Chastain told her that there were no vacancies. Ms. Williams requested an application and was given one, but Defendant Chastain refused to allow her to submit it. The application contained the notation "ADULTS ONLY" in the space designated for the number of children. Later the same day, Ms. Williams’ friend telephoned Fountain View to request information about apartment availability, and the female agent informed her that apartments were available. A local television station subsequently conducted a series of fair housing tests – simulated transactions to compare responses given by housing providers to different types of apartment-seekers to determine whether illegal discrimination is occurring – and found that the defendants were providing more information and better treatment to white persons than to African American persons.
Ms. Williams filed a fair housing complaint with the U.S. Department of Housing and Urban Development (HUD). After investigating, HUD referred the matter to the Justice Department, which filed the lawsuit in June 2008. Ms. Williams and others intervened in the lawsuit as plaintiffs.
"This case underscores the importance of fair housing testing in uncovering differences in the way people or different racial backgrounds are treated when they visit some apartment complexes," said John Trasviña, HUD Assistant Secretary for Fair Housing and Equal Opportunity. "HUD will continue to use fair housing testing to bring to light the discriminatory practices that still deny too many Americans equal housing opportunities."
In December 2009, the court, ruling on a motion filed by the United States, found that the defendants had violated the Fair Housing Act by engaging in a pattern or practice of discrimination against families with children. Had the remainder of the case gone to trial, the United States was prepared to show that the defendants also discriminated against African Americans by, among other things, telling white persons that a selling point of the apartment complex is that Fountain View does not have any black residents; denying the availability of apartments to African American persons while at the same time telling white persons about available apartments; refusing to show apartments to African American persons while at the same time showing apartments to white persons; discouraging African American persons from applying for an apartment while encouraging white persons to apply; refusing to negotiate with African American prospective tenants for rental; threatening to evict one or more tenants who were known or believed to have African American friends and associates; and making statements with respect to the rental of apartments at Fountain View indicating a preference, a limitation, or discrimination because of race or color. Today’s settlement resolves these claims.
The federal Fair Housing Act prohibits discrimination in housing based on race, color, religion, national origin, sex, disability and familial status. Individuals who believe that they may have been victims of housing discrimination should call the Housing Discrimination Tip Line (1-800-896-7743) or e-mail the Justice Department at [email protected]. Such persons may also contact the U.S. Department of Housing and Urban Development at 1-800-669-9777.
Fair housing enforcement is a priority of the Civil Rights Division. More information about the Civil Rights Division and the laws it enforces is available at www.justice.gov/crt.
Justice Department to Monitor Elections in TexasRead the Press Release
WASHINGTON – The Justice Department today announced that it will monitor primary elections on March 2, 2010, in Fort Bend, Galveston, Gonzales, Williamson and Wilson Counties in Texas, to ensure compliance with the minority language requirements of the Voting Rights Act of 1965 and other federal voting rights statutes. The Voting Rights Act requires these covered jurisdictions to provide language assistance in Spanish during the election process. In addition, jurisdictions must comply with the requirements of the Help America Vote Act during this election for federal office, including requirements regarding provisional ballots, accessible voting equipment and information provided to voters.
Under the Voting Rights Act, the Justice Department is authorized to ask the U.S. Office of Personnel Management (OPM) to send federal observers to jurisdictions that are certified by the Attorney General or by a federal court order. Federal observers will be assigned to monitor polling place activities in Fort Bend, Galveston, Williamson and Wilson Counties based on the attorney general’s certification. The observers will watch and record activities during voting hours at polling locations in these jurisdictions, and Civil Rights Division attorneys will coordinate the federal activities and maintain contact with local election officials.
In addition, Fort Bend is subject to a court order entered in 2009, which requires the jurisdiction to comply with the minority language and assistor of choice requirements of the Voting Rights Act, as well as the requirements of the Help America Vote Act. Galveston County is subject to a court order entered in 2007 that requires the jurisdiction to comply with the minority language requirements of the Voting Rights Act and the requirements of the Help America Vote Act.
Finally, Justice Department personnel will monitor polling place activities in Gonzales County, Texas. A Civil Rights Division attorney will coordinate federal activities and maintain contact with local election officials.
Each year, the Justice Department deploys hundreds of federal observers from OPM, as well as departmental staff, to monitor elections across the country. To file complaints about discriminatory voting practices, including acts of harassment or intimidation, voters may call the Voting Section of the Justice Department’s Civil Rights Division at 1-800-253-3931.
Visit www.usdoj.gov/crt/voting/index.htm for more information about the Voting Rights Act and other federal voting laws.
Jury Convicts Fresno, Calif., Patient Recruiter of<br /> Medicare Fraud in Power Wheelchair ScamRead the Press Release
A federal jury in Los Angeles convicted a Fresno woman late Friday after it found that she committed Medicare fraud by recruiting patients for the purpose of receiving unnecessary power wheelchairs, Assistant Attorney General Lanny A. Breuer of the Criminal Division; George S. Cardona, Acting U.S. Attorney for the Central District of California; Steven Martinez, Assistant Director In Charge of the FBI’s Los Angeles Field Office; and 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) announced today.
After a one-week trial in federal court in Los Angeles, the jury found Maria Nela Moreno, 57, guilty on Feb. 26, 2010, of conspiracy to commit health care fraud and six counts of health care fraud. The evidence introduced at trial showed that Moreno solicited Medicare beneficiaries by meeting with groups of seniors and going door-to-door at low-income, senior living communities in Sanger and Parlier, Calif., near Fresno. Moreno recruited beneficiaries to receive expensive, high-end power wheelchairs that the beneficiaries did not need. Several beneficiaries testified that Moreno wore a badge with her picture on it that appeared to resemble a hospital identification badge.
According to the beneficiaries who testified at trial, Moreno tricked them into giving her their identification cards and Medicare insurance numbers by telling the beneficiaries that they should take a power wheelchair because Medicare would soon run out of money, and the beneficiaries would not be able to get a chair if the beneficiaries were to need them in the future. Moreno copied the beneficiaries’ identification cards and Medicare insurance numbers with the portable scanner she carried with her. Each of the power wheelchairs, which the evidence at trial showed could be purchased for less than $1,000 wholesale, resulted in approximately $6,000 in false claims to Medicare. Witnesses testified that at the Elderberry Apartments in Sanger, one of the locations where Moreno and her co-conspirators illegally recruited beneficiaries to receive power wheelchairs, many residents left the wheelchairs unused.
Witnesses testified at trial that they took the beneficiary information they received from Moreno to a fraudulent medical clinic in Los Angeles, which then used the information to create bogus prescriptions. Witnesses testified that they purchased the fraudulent power wheelchair prescriptions and medical documents from the clinic, and then sold them for more than $1,000 per prescription to durable medical equipment (DME) supply companies in and around Los Angeles. Moreno was in turn paid a kickback for each power wheelchair that the DME companies were able to fraudulently bill Medicare, using the beneficiary information Moreno obtained.
One of the DME supply companies that billed Medicare using the identities of Moreno’s recruits was Cooper Medical Supply of Canoga Park, Calif. Trial evidence established that between January 2006 and September 2009, Cooper Medical Supply submitted approximately $828,835 in false and fraudulent claims to Medicare, almost all of which were for power wheelchairs. Trial evidence established that additional DME companies across southern California also purchased prescriptions that were from the beneficiaries recruited by Mareno. Cooper Medical Supply’s owner, Ajibola Sadiqr, previously pleaded guilty to Medicare fraud. Sadiqr’s sentencing is scheduled for April 12, 2010.
U.S. District Court Judge John F. Walter of the Central District of Los Angeles scheduled sentencing for May 10, 2010. Moreno faces a maximum penalty of 10 years in prison and a $250,000 fine for each count of conspiracy and health care fraud for which she was convicted.
The case was prosecuted by Trial Attorney Jonathan Baum and Senior Trial Attorney Jerrob Duffy of the Criminal Division’s Fraud Section, and was investigated by the California Department of Justice 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
BAE Systems PLC Pleads Guilty and Ordered to Pay $400 Million Criminal FineRead the Press Release
BAE Systems plc (BAES) pleaded guilty today in U.S. District Court in the District of Columbia to conspiring to defraud the United States by impairing and impeding its lawful functions, to make false statements about its Foreign Corrupt Practices Act (FCPA) compliance program, and to violate the Arms Export Control Act (AECA) and International Traffic in Arms Regulations (ITAR), announced Acting Deputy Attorney General Gary G. Grindler. BAES was sentenced today by U.S. District Court Judge John D. Bates to pay a $400 million criminal fine, one of the largest criminal fines in the history of DOJ’s ongoing effort to combat overseas corruption in international business and enforce U.S. export control laws.
"Today, BAE Systems pleaded guilty to knowingly and willfully making false statements to U.S. government agencies. The actions of BAE Systems impeded U.S. efforts to ensure international trade is free of corruption and to maintain control over sensitive U.S. technology," said Acting Deputy Attorney General Gary G. Grindler. "BAE Systems will pay a $400 million fine for its criminal conduct – one of the largest criminal fines ever levied in the United States against a company for business related violations. The remediation measures BAE Systems has undertaken, in conjunction with its agreement to retain an independent compliance monitor, are evidence supporting BAE Systems’ stated commitment to ensure that it operates in a transparent, honest and responsible manner going forward. The Department of Justice will continue to hold accountable companies that impair the operations of the U.S. government by lying about their conduct and operations."
"Competition is one of the foundations of our economic system," said Shawn Henry, Assistant Director in Charge of the FBI’s Washington Field Office. "Corporations and individuals who conspire to defeat this basic economic principle not only cause harm but ultimately shake the public’s confidence in the entire system."
"Providing false statements to circumvent U.S. export laws and to defraud the U.S. Government must be vigorously prosecuted," said John Morton, assistant secretary of Homeland Security for U.S. Immigration and Customs Enforcement (ICE). "ICE is committed to working with our federal and international partners to investigate violations of U.S. export controls to assure sensitive technologies are not fraudulently and unlawfully acquired."
BAES is a multinational defense contractor with headquarters in the United Kingdom and with a U.S. subsidiary - BAE Systems Inc. - headquartered in Rockville, Md. None of the criminal conduct described in the plea involved the actions of BAE Systems Inc.
According to court documents, from approximately 2000 to 2002, BAES represented to various U.S. government agencies, including the Departments of Defense and Justice, that it would create and implement policies and procedures to ensure its compliance with the anti-bribery provisions of the FCPA, as well as similar, foreign laws implementing the Organization for Economic Cooperation and Development (OECD) Anti-bribery Convention. According to court documents, BAES knowingly and willfully failed to create mechanisms to ensure compliance with these legal prohibitions on foreign bribery. According to court documents, the gain to BAES from the various false statements and failures to make required disclosures to the U.S. government was more than $200 million.
The FCPA makes it illegal for certain businesses and individuals, or anyone taking action within U.S. territorial jurisdiction, corruptly to make payments to foreign government officials for the purpose of obtaining or retaining business. In addition, the FCPA prohibits corruptly making payments to a third party, while knowing that all or a portion of the payments will go directly or indirectly to a foreign government official for the purpose of obtaining or retaining business. Despite BAES’s representations to the U.S. government to the contrary, BAES knowingly and willfully failed to create sufficient compliance mechanisms to prevent and detect violations of the anti-bribery provisions of the FCPA.
According to court documents, BAES made a series of substantial payments to shell companies and third party intermediaries that were not subjected to the degree of scrutiny and review to which BAES told the U.S. government the payments would be subjected. BAES admitted it regularly retained what it referred to as "marketing advisors" to assist in securing sales of defense items without scrutinizing those relationships. In fact, BAES took steps to conceal from the U.S. government and others its relationships with some of these advisors and its undisclosed payments to them. For example, after May 2001, BAES contracted with and paid certain advisors through various offshore shell companies beneficially owned by BAES. BAES also encouraged certain advisors to establish their own offshore shell companies to receive payments from BAES while disguising the origins and recipients of these payments. BAES admitted that it established one company in the British Virgin Islands (BVI) to conceal its marketing advisor relationships, including who the advisor was and how much it was paid; to create obstacles for investigating authorities to penetrate the arrangements; to circumvent laws in countries that did not allow such relationships; and to assist advisors in avoiding tax liability for payments from BAES.
Through this BVI entity, from May 2001 onward, BAES made payments totaling more than £135 million plus more than $14 million, even though in certain situations BAES was aware there was a high probability that part of the payments would be used to ensure that BAES was favored in foreign government decisions regarding the purchase of defense articles. According to court documents, in many instances, BAES possessed no adequate evidence that its advisors performed any legitimate activities in justification of the substantial payments.
In addition, according to court documents, BAES began serving as the prime contractor to the U.K. government in the mid-1980s, after the U.K. and the Kingdom of Saudi Arabia (KSA) entered into a formal understanding. According to court documents, the "support services" that BAES provided according to the formal understanding resulted, in part, in BAES providing substantial benefits to a foreign public official of KSA, who was in a position of influence regarding sales of fighter jets, other defense materials and related support services. BAES admitted it undertook no adequate review or verification of benefits provided to the KSA official, including no adequate review or verification of more than $5 million in invoices submitted by a BAES employee from May 2001 to early 2002 to determine whether the listed expenses were in compliance with previous statements made by BAES to the U.S. government regarding its anti-corruption compliance procedures. In addition, in connection with these same defense deals, BAES agreed to transfer more than £10 million plus more than $9 million to a bank account in Switzerland controlled by an intermediary, being aware that there was a high probability that the intermediary would transfer part of these payments to the same KSA official.
Also as part of its guilty plea, BAES admitted to making and causing to be made certain false, inaccurate and incomplete statements, and failing to make required disclosures to the U.S. government in connection with the administration of certain regulatory functions, including statements and disclosures related to applications for arms export licenses, as required by the AECA and ITAR. The AECA and ITAR prohibit the export of defense-related materials to a foreign national or a foreign nation without the required U.S. government license, and the Department of State has the power to approve or deny such applications. As part of the licensing scheme, applicants are required to identify associated commissions to the State Department- whether they are legitimate commissions or bribes - paid to anyone who helps secure the sales of defense materials.
BAES admitted that, as part of the conspiracy, it knowingly and willfully failed to identify commissions paid to third parties for assistance in soliciting, promoting or otherwise securing sales of defense items in violation of the AECA and ITAR. BAES failed to identify the commission payments paid through the BVI entity described above, in order to keep the fact and scope of its external advisors from public scrutiny. In one specific instance, BAES caused the filing of false applications for export licenses for Gripen fighter jets to the Czech Republic and Hungary by failing to tell the export license applicant or the State Department of £19 million BAES paid to an intermediary with the high probability that it would be used to influence that tender process to favor BAES.
As part of its guilty plea, BAES has agreed to maintain a compliance program that is designed to detect and deter violations of the FCPA, other foreign bribery laws implementing the OECD Anti-bribery Convention, and any other applicable anti-corruption laws, and that is designed to detect and deter violations of the AECA and ITAR, as well as similar export control laws. Under the terms of the plea agreement, BAES has agreed to retain an independent compliance monitor for three years to assess BAES’s compliance program and to make a series of reports to the company and the Justice Department.
The criminal case is being prosecuted by Senior Litigation Counsel Nathaniel B. Edmonds and Deputy Chief Mark F. Mendelsohn of the Criminal Division’s Fraud Section and Trial Attorney Patrick T. Murphy of the National Security Division’s Counterespionage Section. The Fraud Section is responsible for all investigations and prosecutions of the Foreign Corrupt Practices Act, and conducts other investigations into sophisticated economic crimes. The Counterespionage Section supervises the investigation and prosecution of cases involving the export of military and strategic commodities and technology, including cases under the AECA and ITAR.
The criminal case was investigated by FBI special agents who are part of the Washington Field Office’s dedicated FCPA squad and special agents of the U.S. Immigration and Customs Enforcement’s Counter Proliferation Unit. Investigative assistance also was provided by the Defense Criminal Investigative Services and the General Services Administration, Office of Inspector General. The Criminal Division’s Office of International Affairs provided substantial assistance in support of the investigation.
The Department of Justice acknowledges and expresses its appreciation of the significant assistance provided by the U.K.’s Serious Fraud Office, and further expresses its gratitude to that office for its ongoing partnership in the fight against overseas corruption.
Criminal Information
Sentencing Memo
Plea Agreement
Two Atlanta-Based Nursing Home Chains and Their Principals<br /> Pay $14 Million to Settle False Claims Act CaseRead the Press Release
WASHINGTON – Atlanta-based Mariner Health Care Inc. and SavaSeniorCare Administrative Services LLC, as well as their principals, Leonard Grunstein, Murray Forman and Rubin Schron, have agreed to pay the United States and several states $14 million, the Justice Department announced today.This settlement arises from allegations of the United States that the defendants solicited kickback payments from Omnicare, the nation’s largest pharmacy that specializes in dispensing drugs to nursing home patients, in exchange for agreements by Mariner and Sava to continue using Omnicare’s pharmacy services for 15 years.
In a complaint filed in March 2009 and unsealed in November 2009, the United States alleged that Omnicare, Mariner, Sava, Grunstein, Forman and Schron conspired to arrange for Omnicare to pay Mariner and Sava $50 million in exchange for the right to continue providing pharmacy services to the nursing homes, which together constituted one of Omnicare’s largest customers. The parties allegedly attempted to disguise the $50 million kickback as a payment to acquire a small Mariner business unit that had only two employees and was worth far less than $50 million. According to the complaint, Omnicare paid $40 million of this amount prior to actually acquiring the Mariner business unit and, at the same time, Omnicare obtained new 15-year pharmacy contracts from Mariner and from Sava, a new nursing home chain that Grunstein and Forman created from the Mariner chain. The complaint alleged that Grunstein and Forman illegally tied the new pharmacy contracts to Omnicare’s agreement to purchase the small Mariner business unit, and that the total $50 million purchase price for the business unit actually was a kickback by Omnicare to keep the future business of Mariner and Sava.
Approximately $7.84 million of the settlement proceeds will go to the United States, while $6.16 million has been allocated to certain state Medicaid programs. In November 2009, the United States, numerous states and Omnicare entered into a $98 million settlement agreement that, among other things, resolved Omnicare’s civil liability under the False Claims Act for allegedly paying a kickback to Mariner and Sava.
The government’s complaint further alleged that, in 2006, after the government issued subpoenas concerning the transaction, the individual defendants created backdated documents in a further attempt to hide the kickback.
"Nursing home residents and their families are entitled to make health care decisions free from the distortions caused by illegal kickback schemes," said Tony West, Assistant Attorney General for the Justice Department’s Civil Division.
"This case reflects the government’s continuing efforts to pursue those who scheme to hide illegal payments that can affect the way drugs and other services are delivered to nursing home residents, an especially vulnerable patient population," said Carmen M. Ortiz, U.S. Attorney for the District of Massachusetts.
"Kickbacks in all forms are insidious because they distort medical decisions affecting Medicare and Medicaid beneficiaries," said Daniel R. Levinson, Inspector General of the Department of Health and Human Services Office of Inspector General. "We will vigilantly scrutinize attempts to disguise kickbacks as legitimate business transactions and work to hold payers and recipients of kickbacks accountable."
As part of the settlement, Mariner has entered into a corporate integrity agreement with the Office of Inspector General of the Department of Health and Human Services (OIG-HHS). This agreement provides for Mariner to put in place procedures and reviews to avoid and promptly detect conduct similar to that which gave rise to this matter. At the same time, OIG-HHS has reserved its rights to seek exclusions of Sava, Grunstein, Forman and/or Schron from participation in Medicare, Medicaid and all other federal health care programs.
The settlement resolves a whistleblower action, United States ex rel. Resnick v. Omnicare, Inc., et al., No. 06-10149-RGS (D. Mass.), filed under the qui tam provisions of the False Claims Act.
The case was handled by the Justice Department’s Civil Division, the U.S. Attorney for the District of Massachusetts, the Office of Inspector General of the Department of Health and Human Services, and the Federal Bureau of Investigation.
This settlement is part of the government’s emphasis on combating health care fraud. One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover approximately $2.2 billion since January 2009 in cases involving fraud against federal health care programs. The Justice Department’s total recoveries in False Claims Act cases since January 2009 have topped $3 billion.
Justice Department Settles Lawsuit Against Mort’s Concrete Inc., and Owner to Enforce Employment Rights of Wisconsin Army National GuardsmanRead the Press Release
WASHINGTON – The Department of Justice announced today that it has reached a settlement in its lawsuit filed on behalf of Wisconsin Army National Guardsman Rocco Sylvester Jr., against Mort’s Concrete Inc. and Kevin Mortimer. The department’s complaint in this case, filed in October 2009, alleged that Mort’s Concrete and Mortimer violated the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA) by not reemploying Sylvester in his previous position as a full-time construction foreman after he returned from active military duty in Iraq. Instead, Mort’s and Mortimer employed Sylvester only sporadically as a regular, non-supervisory laborer with significantly fewer hours than before.
The parties’ settlement, embodied in a consent decree that has been submitted for approval to the federal court in Madison requires that Mortimer pay Sylvester $4,000 to compensate him for lost wages that he would have received had he been properly reemployed as a full-time foreman, and enjoins Mort’s and Mortimer from violating USERRA in the future.
"The brave men and women who risk their lives to defend our country deserve to know that they are not sacrificing their civilian employment to do so," said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. "This settlement demonstrates the Civil Rights Division’s strong commitment to ensuring that service members’ rights are upheld."
Subject to certain limitations, USERRA requires employers to promptly reemploy individuals who serve in the military in the same position, or in a comparable position, to the position the service member would have held had he or she not left civilian employment for military duty. Sylvester filed a complaint with the Labor Department’s Veterans’ Employment and Training Service, which investigated and attempted to resolve his USERRA complaint before referring it to the Justice Department for litigation.
The Justice Department’s Civil Rights Division has given a high priority to the enforcement of service members’ rights under USERRA. Additional information about USERRA can be found on the Department of Justice Web site at www.servicemembers.gov and www.usdoj.gov/crt/emp, and on the Labor Department Web site at www.dol.gov/vets/programs/userra/main.htm.
Justice Department Settles Lawsuit Against Fresno County, California to Protect Employment Rights of Navy ReservistRead the Press Release
WASHINGTON - The Justice Department announced today that it has reached a settlement with the county of Fresno, Calif., on behalf of Navy Reservist Porotesano Faapouli. The complaint in this case, filed in the U.S. District Court for the Eastern District of California, alleged that the county violated the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA) by failing to promptly and properly reemploy Mr. Faapouli when he returned from active military duty with a service-related disability. The parties’ settlement is embodied in a consent decree which, if approved and entered by the court, will require Fresno County to pay Mr. Faapouli $57,000 in monetary relief, and will enjoin the county from committing future violations of USERRA.
USERRA, enacted to minimize disruption in the lives of returning service members by providing for their prompt reemployment following military service, recognizes the additional burdens faced by returning service members who suffer injuries in the line of duty. The law requires employers to make reasonable efforts to accommodate service members who return with a service-related disability by locating a position for which the service member is qualified that is the nearest in seniority, status, and pay to the service member’s pre-service position.
Mr. Faapouli was a Senior Juvenile Correctional Officer in Fresno County’s Probation Department when he was called to active duty with the Navy in June 2004. During a training exercise, Mr. Faapouli suffered severe injuries requiring multiple surgeries and a long period of recuperation. Following his honorable discharge, Mr. Faapouli reported back to work for the County in September 2007. It took Fresno County over nine months to re-employ Mr. Faapouli, and the position in which the county re-employed him had a substantially lower status and pay than Mr. Faapouli’s pre-service position.
"The men and women who put themselves in harm’s way to serve our country deserve to know that they are not also risking losing their jobs when they return home," said Thomas Perez, Assistant Attorney General for the Civil Rights Division. "The department is committed to safeguarding the employment rights of our men and women in uniform."
The Department of Labor’s Veterans’ Employment and Training Service investigated and attempted to resolve Mr. Faapouli’s USERRA complaint before referring it to the Department of Justice for litigation. Additional information about USERRA can be found on the Justice Department’s Web site at www.servicemembers.gov and www.usdoj.gov/crt/emp.
Two Iowa Men Indicted for Clean Air Act ViolationsRead the Press Release
WASHINGTON—A federal grand jury in Des Moines, Iowa, has returned an indictment charging Robert Joe Knapp, the owner of Equitable L.P.; and Russell William Coco, the supervisor for Knapp, with committing violations of the Clean Air Act while they were overseeing the demolition and renovation of The Equitable Building, the Justice Department announced.
The indictment describes a more than two-year-long operation in which several floors of The Equitable Building, located in downtown Des Moines, were illegally demolished while still containing large amounts of asbestos. The indictment goes on to allege that asbestos that was removed from the building during the demolition and renovation project was removed illegally, placed into open dumpsters and improperly disposed of in a landfill.
The eleven-count indictment charges the defendants with conspiracy to defraud the United States and to violate the Clean Air Act. The defendants are also charged with violating the Clean Air Act’s "work-practice standards" intended to prevent releases of asbestos and failing to give notice prior to renovation and demolition.
The conspiracy and substantive Clean Air Act counts of the indictment each carry a maximum possible term of five years in prison and a fine of $250,000.
Congress and U.S. Environmental Protection Agency have determined that asbestos is a hazardous air pollutant. Congress has found that medical science has established no minimum level of exposure to asbestos fibers which is considered safe to exposed persons.
The allegations in the indictment are mere accusations and all persons are presumed innocent until and unless proven guilty beyond a reasonable doubt in a court of law.
This case was investigated by special agents of the EPA and inspectors for the Iowa Department of Natural Resources. The case is being prosecuted by the U.S. Attorney’s Office for the District of Iowa and the Justice Department’s Environmental Crimes Section.
Two Charged with Terror Violations in Connection with New York Subway PlotRead the Press Release
The Justice Department announced that a federal grand jury in the Eastern District of New York has returned a superseding indictment charging Zarein Ahmedzay and Adis Medunjanin with terrorism violations stemming from, among other activities, their alleged roles in the plot involving Najibullah Zazi to attack the New York subway system in mid-September 2009. Ahmedzay and Medunjanin are scheduled to appear in federal court today in Brooklyn at 11:00 a.m.
Ahmedzay, 25, a U.S. citizen and resident of Queens, N.Y., was previously indicted on Jan. 8, 2010 in the Eastern District of New York on charges of making material false statements to the FBI about his travels to Pakistan and Afghanistan and about his conversations with a fellow traveler. Medunjanin, 25, a U.S. citizen and resident of Queens, N.Y., was previously indicted on Jan. 8, 2010 in the Eastern District of New York on charges of conspiracy to commit murder in a foreign country and receiving military-type training from a foreign terrorist organization, namely al-Qaeda.
The five-count superseding indictment unsealed this morning charges both Ahmedzay and Medunjanin with conspiracy to use weapons of mass destruction (explosive bombs) against persons or property in the United States. Specifically, they are charged with conspiring with Zazi to conduct an attack on Manhattan subway lines that would take place on Sept. 14, Sept. 15, or Sept. 16, 2009. The maximum statutory penalty for this offense is life in prison.
"The facts alleged in this indictment shed further light on the scope of this attempted attack and underscore the importance of using every tool we have available to both disrupt plots against our nation and hold suspected terrorists accountable for their actions," said Attorney General Holder. "This attack would have been deadly, and the many agents, prosecutors and intelligence professionals who worked together seamlessly to thwart it deserve our thanks."
Both defendants are also charged with conspiracy to commit murder in a foreign country. Specifically, the superseding indictment alleges that on or about Aug. 28, 2008, both Ahmedzay and Medunjanin accompanied Zazi on a flight from Newark Liberty International Airport in Newark, N.J., to Peshawar, Pakistan, in furtherance of the conspiracy. The maximum statutory penalty for this offense is life in prison.
The superseding indictment also charges both defendants with providing material support, including currency, training, communications equipment and personnel, to a foreign terrorist organization, namely al-Qaeda. The maximum statutory penalty for this offense is 15 years in prison.
In addition, Ahmedzay and Medunjanin are charged with receiving military-type training from al-Qaeda. The maximum statutory penalty for this offense is ten years in prison.
Finally, Ahmedzay is further charged with making false statements to the FBI in a terrorism investigation. According to the indictment, Ahmedzay falsely told the FBI he had disclosed all the locations he visited during his trip to Pakistan and Afghanistan, when he had failed to disclose all these locations. The maximum statutory penalty for this offense is eight years in prison.
This case is being prosecuted by the U.S. Attorney’s Office for the Eastern District of New York, with assistance from the U.S. Attorney’s Office for the District of Colorado and the Counterterrorism Section of the Justice Department’s National Security Division. The investigation is being conducted by the New York and Denver FBI Joint Terrorism Task Forces, which combined have investigators from more than fifty federal, state and local law enforcement agencies .
The public is reminded that an indictment is merely an accusation of a crime, and the defendants are presumed innocent until proven guilty.
New York Man Pleads Guilty to Criminal Copyright Infringement for Selling Pirated Computer Software Using the InternetRead the Press Release
A New York man pleaded guilty today in U.S. District Court in Alexandria, Va., to criminal copyright infringement for selling more than $250,000 worth of pirated copies of popular business, engineering and graphic design software programs, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division and U.S. Attorney Neil H. MacBride of the Eastern District of Virginia.
According to court documents, Robert Cimino, 59, of Syracuse, N.Y., advertised the sale of discounted popular software programs on a variety of Internet-based advertising forums, operating under the business name "SoftwareSuite." Customers would contact Cimino by e-mail and would typically pay for the products by PayPal. Cimino would then mail infringing copies of Adobe, Autodesk, Intuit and Quark programs that he had burned to CD or DVD to the customers, including customers in the Eastern District of Virginia. Cimino admitted that from February 2006 to September 2009, he received at least $270,035 from his sales of infringing software products.
Cimino is scheduled to be sentenced by U.S. District Judge Anthony J. Trenga on May 28, 2010. Cimino faces a maximum sentence of five years in prison, three years of supervised release, a $250,000 fine, restitution and forfeiture.
The case is being prosecuted by Trial Attorney Tyler G. Newby of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney Jay V. Prabhu of the Eastern District of Virginia. The case was investigated by the FBI’s Washington Field Office.
Medical Device Manufacturer Guidant Charged in Failure<br /> to Report Defibrillator Safety Problems to FDARead the Press Release
WASHINGTON – Medical device manufacturer Guidant LLC, a wholly-owned subsidiary of Boston Scientific Corporation, was charged today with criminal violations of the Federal Food, Drug, and Cosmetic Act related to safety problems with some of its implantable defibrillators. Guidant LLC formerly did business as Guidant Corporation. The Justice Department filed the criminal information today in connection with an agreement with Guidant to resolve the charges. A formal guilty plea agreement is expected to be filed with the court at a later date. Boston Scientific previously announced in a November 2009 press release that the company would pay $296 million on behalf of Guidant in connection with these charges.
According to the information filed today in federal district court in St. Paul, Minn., Guidant concealed information from the U.S. Food and Drug Administration (FDA) regarding catastrophic failures in some of its lifesaving devices. The charges were filed following a four-year investigation into Guidant’s handling of short-circuiting failures of three models of implantable cardioverter defibrillators (ICDs): the Ventak Prizm 2 DR (Model 1861) and the Contak Renewal (Models H135 and H155). Guidant issued safety advisories regarding the failures in June 2005.
ICDs are lifesaving devices used to detect and treat abnormal heart rhythms that can result in sudden cardiac death, one of the leading causes of mortality in the United States. The devices, once surgically implanted, constantly monitor the electrical activity in a patient’s heart for deadly electrical rhythms and deliver an electrical shock to the heart in an effort to return the heartbeat to normal. If they fail to operate properly when needed, a person can die within minutes.
The information alleges that beginning in 2002, Guidant became aware that one of its ICDs, the Ventak Prizm 2 DR, was prone to electrical arcing, rendering the device inoperative and unable to deliver life-saving therapy to the patient in whom it was implanted. Guidant changed the design of the Prizm 2 in November 2002 to correct the problem. The information charges that in August 2003, Guidant falsely told the FDA that the design changes did not affect the device’s safety or effectiveness. In fact, the device changes were made to correct this flaw, according to the information.
In early 2004, Guidant allegedly discovered a similar short-circuiting problem with its Renewal 1 and Renewal 2 devices. Following the July 2004 death of a patient associated with a shorted Renewal in Spain, the information charges that Guidant knew that the physician operating instructions for responding to a short-circuit within the device were false and misleading. In an effort to remedy this, Guidant sent a communication by overnight delivery to physicians which the company dubbed a "Product Update." The information alleges that this communication was actually a correction to the device which attempted to mitigate the safety risk posed by the short-circuiting. Guidant was required by law to alert FDA of this action within ten days. The information charges that Guidant failed to make that notification.
Guidant issued safety advisories on the Prizm 2 and Renewal devices in June 2005. FDA classified those advisories as "Class I" recalls, the most serious classification of recall, concluding that there was a reasonable probability that the affected devices could cause serious adverse health consequences or death.
"The government charges that Guidant committed serious crimes by undermining the FDA’s role to guard the American public against potentially dangerous medical devices," said Assistant Attorney General Tony West, who heads the Justice Department’s Civil Division. "Our message is clear: We will vigorously prosecute individuals and organizations who put profit over public health and safety by violating the law."
"The community has the right to expect that companies that violate federal law by submitting false or misleading information to the FDA will be held accountable, particularly when that information relates to lifesaving devices, such as defibrillators," said Frank J. Magill, Acting U.S. Attorney for the District of Minnesota on this case. "I want to thank the prosecutors and investigators responsible for this challenging investigation that resulted in these charges being filed. For that, we all can be very thankful."
"This investigation highlights the commitment by FDA’s Office of Criminal Investigations to pursue those who seek to circumvent FDA's regulatory authority," said Thomas P. Doyle, Special Agent in Charge of the FDA/OCI Washington Field Office. "The FDA relies on information submitted by regulated entities to fulfill our mission of protecting the public health. Device manufacturers are required to be honest and forthright in all dealings with the FDA, including the submission of post-approval reports and notification of corrective actions. Guidant put patients at risk by modifying flawed devices without communicating candidly with the FDA and doctors."
The public is reminded that the charges contained in a criminal information are not evidence of guilt. A defendant is presumed innocent unless and until proven guilty. Members of the public, including those individuals who were implanted with one of these devices, may view case-related information including notice of court events and hearings at http://www.justice.gov/civil/ocl/cases/Cases/Guidant/index.htm
The case was investigated by the FDA’s Office of Criminal Investigations and is being prosecuted by AUSA Robert M. Lewis of the U.S. Attorney’s Office for the District of Minnesota and Trial Attorneys Ross S. Goldstein and Matthew S. Ebert of the Department of Justice’s Office of Consumer Litigation. Additional assistance is being provided by Steven Tave of FDA’s Office of Chief Counsel.
Brookhaven Memorial Hospital Medical Center in New York<br /> to Pay U.S. $2.92 Million to Resolve Fraud AllegationsRead the Press Release
WASHINGTON – Brookhaven Memorial Hospital Medical Center, a Long Island, N.Y.-based hospital, has agreed to pay $2.92 million, plus interest, to settle allegations that the hospital defrauded Medicare, the Justice Department announced today.
The government alleged that the hospital fraudulently inflated its charges to Medicare patients to obtain enhanced reimbursement from the federal health care program. In addition to its standard payment system, Medicare provides supplemental reimbursement, called "outlier payments," to hospitals and other health care providers in cases where the cost of care is unusually high. Congress enacted the supplemental outlier payments system to ensure that hospitals possess the incentive to treat inpatients whose care requires unusually high costs. The lawsuit alleged that the hospital inflated its charges to obtain supplemental outlier payments for cases that were not extraordinarily costly and for which outlier payments should not have been paid.
"Conduct like that alleged here drives up the costs of health care for all of us," said Tony West, Assistant Attorney General for the Justice Department’s Civil Division. "The resolution announced today is the most recent in a series of settlements that illustrates the Justice Department's continued commitment to protecting the Medicare Trust Fund from hospitals that knowingly charge more than the law allows."
The suit was originally filed in the U.S. District Court for the District of New Jersey by a whistleblower, Tony Kite, in 2005. The United States intervened in the suit in November 2009. Mr. Kite brought his suit under the whistleblower provisions of the False Claims Act, which permit private citizens with knowledge of fraud against the government to bring a lawsuit on behalf of the United States and to share in any recovery. Under the civil settlement announced today, Mr. Kite will receive roughly $613,000, plus interest, out of the settlement proceeds.
"This office is determined to root out any conduct that threatens to undermine the integrity of the federal health care programs," said Paul J. Fishman, U.S. Attorney for the District of New Jersey.
The settlement is the result of a coordinated effort by the Commercial Litigation Branch of the Justice Department’s Civil Division; the U.S. Attorney’s Office for the District of New Jersey, Affirmative Civil Enforcement Unit; the Department of Health and Human Services, Office of Inspector General, and the Centers for Medicare and Medicaid Services; and the Federal Bureau of Investigation.
This settlement is part of the government’s emphasis on combating health care fraud. One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover approximately $2.3 billion since January 2009 in cases involving fraud against federal health care programs. The Justice Department’s total recoveries in False Claims Act cases since January 2009 have topped $3 billion. Since 2006, the United States has recovered over $1.2 billion from hospitals that it alleged engaged in outlier fraud.
United States Transfers Three Guantanamo Bay Detainees to AlbaniaRead the Press Release
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 the Government of Albania.
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 the detainees at least 15 days before their transfer.
Earlier today, Saleh Bin Hadi Asasi, a native of Tunisia, Sharif Fati Ali al Mishad, a native of Egypt, and Abdul Rauf Omar Mohammad Abu al Qusin, a native of Libya, were transferred to the Government of Albania. The United States is grateful to the Government of Albania for its willingness to support U.S. efforts to close the Guantanamo Bay detention facility.
These transfers were carried out under an individual arrangement between the United States and the Government of Albania. The United States coordinated with the Government of Albania 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, including Albania, Algeria, Afghanistan, Australia, Bangladesh, Bahrain, Belgium, Bermuda, Chad, Denmark, Egypt, France, 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, 189 detainees remain at Guantanamo Bay.
United States Transfers Guantanamo Bay Detainee <br /> to SpainRead the Press Release
The Department of Justice today announced that a detainee from the Palestinian territories has been transferred from the detention facility at Guantanamo Bay to Spain.
As directed by the President’s January 22, 2009 Executive Order, the interagency Guantanamo Review Task Force conducted a comprehensive review of this case. As a result of that review, which examined a number of factors, including security issues, the detainee was 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 the detainee at least 15 days before his transfer.
The identity of the individual is being withheld for security and privacy reasons at the request of the Government of Spain. The United States is grateful to the Government of Spain for its willingness to support U.S. efforts to close the Guantanamo Bay detention facility. This transfer was carried out under an individual arrangement between the United States and the Government of Spain. The United States coordinated with the Government of Spain to ensure the transfer took place under appropriate security measures and consultations regarding this individual will continue.
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, 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, 188 detainees remain at Guantanamo Bay.
Texas Gang Members Found Guilty of Multiple Murder,<br /> Narcotics and Firearms ChargesRead the Press Release
The leader of the Almighty Latin King and Queen Nation (ALKQN) in Texas and one of his enforcers were found guilty this afternoon on multiple charges related to their participation in a large scale narcotics and firearms trafficking conspiracy, announced Assistant Attorney General of the Criminal Division Lanny A. Breuer and U.S. Attorney James T. Jacks of the U.S. Attorney’s Office for the Northern District of Texas. Specifically, the two men were found guilty for their roles in the May 4, 2008, murders of a pregnant female and another bystander.
"Gunning down people in our streets and distributing illegal drugs throughout our communities, these gangs spread violence and addiction wherever they go," said Assistant Attorney General Breuer. "We will not allow their repugnant acts to go unpunished. Today, a jury of Texas citizens sent a message loud and clear to would-be gang members – we can and we will hold you accountable for your crimes."
"For more than a week, this jury listened to testimony concerning the movement of a large amount of drugs and guns throughout the state of Texas by members of the Latin Kings criminal organization," said James T. Jacks, U.S. Attorney for the Northern District of Texas. "Not only did this gang pollute the streets of Texas with dangerous drugs, as a result of their heinous actions, two adults, one of whom was pregnant, were brutally murdered with an assault rifle. We are proud that we, along with the hard-working members of the agencies that contributed to this investigation, have brought civilized justice to otherwise uncivilized gang wars. This office is proud to have assisted the Department of Justice’s Gang Unit in the successful prosecution of these criminals."
Jose Robledo Nava, aka "Chino," 31, of Lubbock, Texas, and James Johnathan Cole, aka "Blitz," 19, of Lamesa, Texas, were each found guilty 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 found guilty for their involvement in a drive-by shooting in Big Spring, Texas, 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 Valeria 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.
According to evidence presented at trial, Nava was the Texas state enforcer and representative for the ALKQN. The jury found that Nava and Cole were members of a conspiracy that included 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;" John Guzman; Guerrero Olivas, aka "Screech;" Eliseo Perez, aka "Wicked;" Joe Canales, aka "Slick;" and others. The jury found that from 2001 until Dec. 13, 2008, Nava and Cole directly or indirectly agreed to distribute, and possessed with intent to distribute, cocaine and marijuana.
The defendants 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; 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.
Ringleader of International Drug Trafficking Ring <br /> Pleads Guilty for Role in Smuggling Illegal Drugs from Canada to the United States <br />Read the Press Release
Phuong Thi Tran, 39, of Mississauga, Ontario, Canada, pleaded guilty today for her role in two drug trafficking conspiracies, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division; Michael L. Levy, U.S. Attorney for the Eastern District of Pennsylvania; Barbara L. McQuade, U.S. Attorney for the Eastern District of Michigan; and Assistant Secretary John Morton of U.S. Immigration and Customs Enforcement (ICE).
According to court documents, Tran was the ringleader of an international drug trafficking organization that smuggled millions of ecstasy pills and other drugs from Canada into the United States from 2002 until Tran’s arrest in April 2008. The drugs were manufactured in Canada by various Asian organized crime groups and were distributed to drug dealers across the United States. According to court documents, Tran and her associates often smuggled 100,000 ecstasy pills per week into the United States.
According to court papers, Tran’s role in this drug smuggling conspiracy was discovered during the course of an investigation by ICE special agents in Detroit after they had seized several drug shipments that Tran had arranged to smuggle into the United States. In October 2006, a grand jury in the Eastern District of Michigan indicted Tran for conspiring to distribute ecstasy pills.
At the same time, ICE special agents in Philadelphia were conducting a separate but related investigation. As uncovered during that investigation, in September 2007, Tran and her associates sent two couriers to deliver 100,000 ecstasy pills to customers in Philadelphia and Boston. Unbeknownst to Tran and her associates, ICE special agents learned of this shipment and, with the assistance of the Philadelphia Police Department, stopped the couriers’ vehicle and seized the drugs. In December 2009, Tran was charged by the U.S. Attorney’s Office in the Eastern District of Pennsylvania with conspiracy to distribute ecstasy pills. The charges from Detroit were then transferred to Philadelphia.
Tran pleaded guilty today before U.S. District Court Judge Petrese B. Tucker to one count of conspiracy to distribute ecstasy and methamphetamine and one count of conspiracy to possess with the intent to distribute ecstasy. At sentencing, Tran faces a maximum punishment of life in prison, a 10-year mandatory minimum prison term and a $5 million fine. Sentencing is scheduled for June 2, 2010.
For the past several years, the Criminal Division’s Organized Crime & Racketeering Section (OCRS), in conjunction with U.S. Attorneys’ Offices, have been working closely with ICE, the U.S. Drug Enforcement Administration (DEA), and various Canadian law enforcement agencies, to crack down on Asian organized crime groups that law enforcement officials estimate smuggle billions of dollars worth of drugs into the United States from Canada each year.
The case was prosecuted in Detroit by Assistant U.S. Attorney Kathryn McCarthy. The case was prosecuted in Philadelphia by OCRS Trial Attorney Robert Livermore. The case was investigated by ICE, with the assistance of the DEA; the Philadelphia Police Department; Pennsylvania State Police; U.S. Customs and Border Protection; the Royal Canadian Mounted Police; the Ontario Provincial Police Department; and the Toronto Metropolitan Police Department.
Justice Department Resolves Lawsuit AllegingDisability-Based Housing Discrimination at21 Multifamily Housing Complexes in TennesseeRead the Press Release
WASHINGTON– The Justice Department today announced a settlement of its lawsuit alleging that the owners and developers involved in the design and construction of 21 multifamily housing complexes in Tennessee discriminated on the basis of disability. The complexes, which were built with the assistance of federal low-income housing tax credits, contain more than 800 units covered by the Fair Housing Act’s accessibility provisions along with areas of public accommodation covered by the Americans with Disabilities Act.
Under the settlement, which must still be approved by the U.S. District Court for the Middle District of Tennessee, Murphy Development LLC and 22 defendants will pay all costs related to making the complexes for which they were responsible accessible to persons with disabilities, pay up to $350,000 to compensate individuals harmed by the inaccessible housing, and pay $75,000 to the United States. The settlement requires all the defendants to be trained about the requirements of the Fair Housing Act and to provide periodic reports to the government that they are following the law.
"Equal access to housing for persons with disabilities is an important right protected by both the Fair Housing Act and the Americans with Disabilities Act," said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. "This comprehensive settlement will ensure that equal housing opportunities required by law are provided in these 21 housing complexes. This will give persons with physical disabilities an equal opportunity to live in and visit these complexes, and provide compensation to those who have been harmed by the builders’ failure to provide accessible housing."
"The United States will work aggressively to guarantee that persons with disabilities have the accessible rental housing to which they are entitled," said Ed Yarbrough, United States Attorney for the Middle District of Tennessee. "The scope of this settlement and the many apartment complexes that it covers will benefit many Tennesseans with disabilities."
The case began when the Tennessee Fair Housing Council, a private, nonprofit advocacy organization whose mission is to eliminate housing discrimination throughout Tennessee, provided the department with information several apartment complexes that were inaccessible to people with disabilities. The department conducted an independent investigation and filed this lawsuit in September 2008.
The defendants responsible for the payments and retrofits are Murphy Development LLC, Westland Development LLC, Meadow Creek LP, Miller Town LP, Swiss Ridge LP, 17th Street LP, Alta Vista LP, Forest View LP, Stonebridge LP, Spring Branch LLC, Delrose Court LP, River View Park LP, Sutherland View Apartments LP, Lyon’s Den LP, Dunhill LLC, Ashton View LLC, West Vista Ridge LLC, Cassell Ridge LP, Cassell View LP, Sutherland Park LP, Azalea Development LLC, The Highlands Apartments LP, and Beason Well LP. The defendants will retrofit the following complexes in Tennessee
- 17th Street Apartments, 2565 East 17th Avenue, Springfield
- Ashton View Apartments, 169 Barkley Landing Drive, Morristown
- Beason Well Apartments, 893 New Beason Well Road, Kingsport
- Cassell Ridge Apartments, 1230 Cassell Valley Way, Knoxville
- Cassell View Apartments, 1111 Elk Hill Way, Knoxville
- Dunhill Apartments, 1036 Dunhill Way, Knoxville
- Forest View Apartments, 119 Belinda Parkway, Mt. Juliet
- The Highlands Apartments, 2001 South Lyerly Street, Chattanooga
- Lake Side Apartments, 3940 Bell Road, Hermitage
- Lyon’s Den Apartments, 3610 Lyon’s Way, Knoxville
- Meadowcreek Apartments, 919 South Dickerson Road, Goodlettsville
- Miller Town Apartments, 395 Jack Miller Boulevard, Clarksville
- River View Park Apartments, 3300 Holston Hills Road, Knoxville
- Spring Branch Apartments, 1830 Spring Branch Drive, Madison
- Stonebridge Apartments, 100 Stonebridge Way, Columbia
- Sutherland Park Apartments, 510 Vista Glen Way, Knoxville
- Sutherland View Apartments, 3220 Atchley Ridge Way, Knoxville
- Swiss Ridge Apartments, 455 Swiss Avenue, Nashville
- Swiss View Apartments, 499 Swiss Avenue, Nashville
- West Vista Ridge Apartments, 1201 Vista Ridge Way, Knoxville
- White Oak Apartments, 114 Holt Spur Drive, Jamestown
The retrofitting includes modifying walkways to eliminate steps, excess slopes and level changes, providing accessible curb ramps, and providing accessible parking and routes to site amenities, such as clubhouses, pools, mailboxes and trash facilities. The settlement also provides for the replacement of inaccessible knob hardware on doors, the widening of inaccessible narrow doorways, and the reconfiguration of bathrooms and kitchens to accommodate persons who use wheelchairs.
Persons who believe they may have been harmed by the lack of accessible housing at one of the complexes involved in this matter should contact the Justice Department at 1-800-896-7743, and select menu option 2.
The federal Fair Housing Act prohibits discrimination in housing based on race, color, religion, national origin, sex, disability and familial status. Individuals who believe that they may have been victims of housing discrimination should call the Housing Discrimination Tip Line (1-800-896-7743) or e-mail the Justice Department at [email protected]. Such persons may also contact the U.S. Department of Housing and Urban Development at 1-800-669-9777.
Fair housing enforcement is a priority of the Civil Rights Division. More information about the Civil Rights Division and the laws it enforces is available at www.justice.gov/crt.
Justice Department Requires Divestitures in Order for Bemis Company Inc. to Proceed with Its Acquisition of the Alcan Packaging Food Americas BusinessRead the Press Release
WASHINGTON — The Department of Justice announced today that it has reached a settlement that will require Bemis Company Inc. to divest certain assets used in the production and sale of flexible packaging for natural cheese and fresh meat in order to proceed with its acquisition of the Alcan Packaging Food Americas business from Rio Tinto plc, the parent company of Alcan Corporation. The acquisition is valued at approximately $1.2 billion. The department said that the acquisition as originally proposed would combine Bemis and Alcan, two of the leading U.S. manufacturers of flexible-packaging rollstock for chunk, sliced and shredded natural cheese packaged for retail sale and flexible-packaging shrink bags for fresh meat. Without the divestitures, the department said the acquisition would lead to higher prices, lower quality, less favorable supply-chain options, reduced technical support and less innovation.
The Department of Justice’s Antitrust Division filed a civil antitrust lawsuit today in the U.S. District Court for the District of Columbia to block the proposed acquisition. At the same time, the department filed a proposed settlement that, if approved by the court, would resolve the competitive concerns alleged in the lawsuit.
Flexible packaging is any package the shape of which can be readily changed. Although flexible packaging is used for a variety of products, flexible packaging products for natural cheese and fresh meat are unique. They must meet rigorous performance standards to prevent spoilage, maintain product appearance, run properly on customers’ packaging equipment and meet unique requirements specific to the particular products. As a result, these types of flexible packaging are difficult to manufacture and commercialize successfully.
"The acquisition as originally proposed would have lessened the vigorous competition that currently exists among suppliers of flexible packaging for natural cheese and fresh meat," said Christine Varney, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. "These divestitures will preserve competition in the markets for flexible-packaging for these products, which allows for lower prices, higher quality and more innovation, benefiting consumers."
The department’s complaint alleges that the proposed acquisition would eliminate the significant competition between Bemis and Alcan that currently exists in the markets for flexible packaging for chunk, sliced and shredded natural cheese packaged for retail sale and make Bemis the dominant supplier of these products. The complaint also alleges that the proposed acquisition would reduce competition substantially in the already highly concentrated market for shrink bags for fresh meat.
The proposed settlement requires the companies to divest all of Alcan’s contracts and intellectual property as well as plants located in Catoosa, Okla., and Menasha, Wis., along with certain other assets necessary to the manufacture of flexible packaging for natural cheese and fresh meat.
Bemis is a Missouri corporation with its principal place of business in Neenah, Wis. Bemis and its subsidiaries —including Curwood Inc., which is Bemis’s subsidiary that produces flexible packaging for cheese and meat —made approximately $3.8 billion in sales in 2008, of which $2.1 billion was attributable to the sale of flexible packaging in the United States.
Rio Tinto plc, the parent of Alcan Corporation, is a United Kingdom-based global mining corporation. It made approximately $58 billion in sales in 2008. The sales of the Alcan Packaging Food Americas business amounted to approximately $1.5 billion in 2008.
As required by the Tunney Act, the proposed settlement, along with a competitive impact statement, will be published in the Federal Register. Any person may submit written comments concerning this proposed settlement during a 60-day comment period to Maribeth Petrizzi, Chief, Litigation II Section, Antitrust Division, U.S. Department of Justice, 450 Fifth Street, N.W., Suite 8700, Washington, D.C. 20530. At the conclusion of the 60-day comment period, the U.S. District Court for the District of Columbia may enter the proposed settlement upon a finding that it is in the public interest.
Georgia Man Sentenced for Transporting a Minor for Illegal Sexual ActivityRead the Press Release
Mack Gordon Harris Sr., 67, was sentenced today to 121 months in prison for transporting a minor for illegal sexual activity, announced Assistant Attorney General of the Criminal Division Lanny A. Breuer and U.S. Attorney for the Eastern District of Virginia Neil H. MacBride.
Harris, formerly of Social Circle, Ga., was also ordered today by U.S. District Court Judge James R. Spencer to serve 10 years of supervised release following his prison term, and to register as a sex offender.
Harris pleaded guilty on Nov. 30, 2009, to one count of transporting a minor for illegal sexual activity. According to court documents, in June 2005, Harris began communicating with a girl in Maryland, then 15 years old, through a Christian online chat room. Harris admitted that as he continued chatting with the victim during the next few months, he suggested they engage in sexual intercourse. He exposed himself on a computer webcam, urged her to send naked pictures, and engaged in "phone sex. " Harris eventually visited the victim around the time that she turned 16, which is the age of sexual consent in Maryland. Harris admitted that several times during his visit and after the victim’s 16th birthday, the two engaged in sexual intercourse.
Shortly afterward, Harris decided that he would take the victim to live with him in Georgia. Harris admitted that he instructed the victim to pack her belongings and leave farewell notes for her family. According to court documents, Harris picked up the victim in Maryland in December 2005 and began driving her to his home in Georgia. Harris admitted he told the victim that while traveling, she was not to speak with anybody, but if asked her age, she should respond that she was 25. During the journey, they stopped overnight at a hotel in Skippers, Va., where the age of consent is 18, and engaged in sexual intercourse.
The case was prosecuted by Assistant U.S. Attorney Elizabeth C. Wu of the Eastern District of Virginia and Trial Attorney Barak Cohen of the Criminal Division’s Child Exploitation and Obscenity Section. The case was investigated by U.S. Postal Inspection Service and U.S. Immigration and Customs Enforcement.
Former New Orleans Police Officer Pleads Guilty to Conspiring to Cover up the Danziger Bridge ShootingsRead the Press Release
WASHINGTON – Michael Lohman, a former Lieutenant of the New Orleans Police Department (NOPD), has pleaded guilty to conspiring with fellow NOPD officers to obstruct justice by covering up a police-involved shooting that occurred in the aftermath of Hurricane Katrina, the Justice Department announced.
The Sept. 4, 2005, shooting on the Danziger Bridge left two civilians dead and four others seriously injured. Lohman, 41, of Terrytown, La., entered his plea in federal court in New Orleans today before U. S. District Court Judge Ivan L. R. Lemelle.
According to court documents unsealed today, the incident involved at least seven NOPD officers who drove to the Danziger Bridge in a rental truck in response to a call for police assistance. 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. The officers fired at the group of civilians, killing J. B. and seriously wounding four members of the B Family. Officers then traveled to the west side of the bridge, where they encountered Lance and Ronald Madison, who were crossing the bridge to visit the dentistry office of one of their other brothers. An officer shot and killed Ronald Madison, a 40-year-old severely disabled man.
When Lohman arrived on the scene shortly after the shootings, he noticed that there were no guns on or near the dead and wounded civilians. After determining that the involved officers could not come up with any evidence to justify the shooting, he concluded that they had been involved in a "bad shoot." Lohman admitted today that, in the wake of the shooting, he participated in a conspiracy that involved, among other things, writing false reports about the incident, planting a gun and making up false witness statements. Lohman also admitted that he intended for the officers involved in the shooting to come up with a plausible story that would allow Lohman and other supervisors to conclude that the shooting was justified. According to his testimony, the officers then provided "false stories," which "evolved" over time.
According to the factual basis produced at the time of the plea , Lohman personally drafted a 17-page report, which he knew to be false, and provided that report to an investigator to submit as the official incident report. That same investigator had previously informed Lohman that he had a gun that he planned to "put under the bridge," and that the gun was "clean," meaning that it could not be linked to any other crime. Lohman understood that the investigator was going to use the gun as evidence to justify the shooting of the civilians, and he went along with that plan to plant evidence. Lohman admitted in court today that he knew that the civilians on the bridge had not actually possessed guns, and he knew that the investigator had also falsified statements by the civilians. Lohman also admitted that in May 2009, he provided false information to an FBI agent investigating this case.
"We rely on our law enforcement officers to protect us, particularly in times of disaster and devastation such as what followed in the wake of Hurricane Katrina. What this defendant did was a shameful violation of that public trust," said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. "We will continue to aggressively investigate the incidents that occurred on the Danziger Bridge and we will continue to prosecute any officer who violates federal law."
"After closely monitoring the state prosecution which ended, we embarked on an intensive effort to reconstruct the tragic events on the Danziger Bridge. Our investigation has yielded the conviction of one of a group of NOPD officers responsible for a cover-up of the true circumstances of a deadly police shooting," said U.S. Attorney Jim Letten of the Eastern District of Louisiana . "As we forge ahead, the public we serve must know that we will leave no stone unturned to aggressively investigate and bring to justice any officer who tarnishes the badge through criminal conduct. We extend our appreciation to the majority of the NOPD officers who serve their department and their profession with honor and integrity."
"It is never acceptable to break the law in order to enforce it. The law must be respected by those entrusted to uphold it while protecting the rights of those they serve," said FBI Special Agent in Charge David Welker of the New Orleans Field Office . "It is the responsibility of the FBI to weed out the few who dishonor the police profession. There are many hardworking officers who sacrifice daily to bring honor to the NOPD badge, and the FBI will continue to work hand-in-hand with them in endeavors to ensure the safety of the citizens of New Orleans."
The one-count Bill of Information to which Lohman pleaded guilty charged him with violating the federal conspiracy statute by agreeing with other officers to write false reports about the shooting; to engage in misleading conduct; and to lie to agents with the FBI. The defendant faces a possible maximum sentence of five years in prison and a fine of $250,000. Sentencing has been scheduled for May 26, 2010.
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 of the Eastern District of Louisiana.
Former Employee of Financial Products and Services Firm Pleads Guilty for Role in Bid-Rigging and Fraud Conspiracies Involving Proceeds of Municipal BondsRead the Press Release
WASHINGTON — A former employee of Rubin/Chambers, Dunhill Insurance Services Inc., also known as CDR Financial Products (CDR), a Beverly Hills, Calif.-based financial products and services firm, pleaded guilty yesterday for his participation in bid-rigging and fraud conspiracies related to contracts for the investment of municipal bond proceeds and other related municipal finance contracts, the Department of Justice announced.
According to the charges filed yesterday in the U.S. District Court in Manhattan, Daniel Moshe Naeh, also known as Dani Naeh, of Israel, engaged in separate bid-rigging and fraud conspiracies with companies that provide a type of contract, known as an investment agreement, to state, county and local governments and agencies throughout the United States. The public entities were seeking to invest money from a variety of sources, primarily the proceeds of municipal bonds that they had issued to raise money for, among other things, public projects. Naeh also pleaded guilty to one count of wire fraud. According to the plea agreement, Naeh has agreed to cooperate with the ongoing investigation.
The department said in court documents that CDR was hired by public entities that issue municipal bonds to act as their broker and conduct what was supposed to be a competitive bidding process primarily for contracts for the investment of municipal bonds proceeds. Competitive bidding for those contracts is the subject of regulations issued by the U.S. Department of the Treasury and is related to the tax-exempt status of the bonds.
Naeh admitted that, as a part of the bid-rigging conspiracy, from as early as 1998 until at least November 2006, he and other co-conspirators designated in advance which co-conspirator providers would be the winning bidder for certain investment agreements and submitted or caused to be submitted to CDR intentionally losing bids. According to the court documents, kickbacks in the form of fees that were inflated or unearned were paid to CDR in exchange for assistance from Naeh and other CDR co-conspirators in controlling the bidding process and ensuring that certain co-conspirator providers won the bids they were allocated.
As a part of the fraud conspiracy, from as early as August 2001 until at least November 2006, Naeh and others gave a co-conspirator provider information about the prices, price levels or conditions in competitors’ bids, a practice known as a "last look," which is explicitly prohibited by U.S. Treasury regulations. As a result of the information, the co-conspirator provider won contracts at artificially determined price levels. In exchange for giving the provider information, CDR requested and received kickbacks from the provider and relied on the provider to submit intentionally losing bids when requested on other contracts.
On Oct. 29, 2009, CDR, along with its owner and president, David Rubin; former chief financial officer and managing director, Zevi Wolmark, also known as Stewart Wolmark; and vice president Evan Andrew Zarefsky, were indicted and charged with participating in bid-rigging and fraud conspiracies. The trial for CDR, Rubin, Wolmark and Zarefsky is scheduled to begin on Feb. 7, 2011.
The bid-rigging conspiracy with which Naeh is charged carries a maximum penalty of 10 years in prison and a $1 million fine. The fraud conspiracy with which Naeh is charged carries a maximum penalty of five years in prison and a $250,000 fine. The wire fraud charge with which Naeh is charged carries a maximum penalty of 20 years in prison and a $250,000 fine. The maximum fines for each of these offenses may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.
The charges announced today resulted from an ongoing investigation into the municipal bonds industry, which is being conducted by the Antitrust Division’s New York Field Office, the FBI and IRS Criminal Investigation. The department is coordinating its investigation with the Securities and Exchange Commission, the Office of the Comptroller of the Currency and the Federal Reserve Bank of New York.
Anyone with information concerning bid rigging and related offenses in any financial markets should contact the Antitrust Division’s New York Field Office at 212-264-0390 or visit http://www.justice.gov/atr/contact/newcase.htm, or the FBI at 212-384-5000.
Financial Fraud Enforcement Task Force Hosts <br /> Mortgage Fraud Summit in MiamiRead the Press Release
WASHINGTON – Representatives of the Financial Fraud Enforcement Task Force met in Miami today for the first 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 composed of representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement.
The first summit was held in Miami because of the high rate of mortgage fraud in the region. The Miami-Fort Lauderdale-Pompano Beach metropolitan area is ranked first in the nation for the number of local subjects named in Suspicious Activity Reports (SARs) filed by depository institutions concerning suspected mortgage fraud, according to a recent Financial Crimes Enforcement Network (FinCEN) study. And according to FinCEN data, Florida has consistently ranked second in the nation for mortgage fraud SARs, only behind California.
Today, the task force members met with Miami community members, banking, mortgage and real estate industry representatives and law enforcement officials to discuss the problem of mortgage fraud from a national, state and local perspective. In the morning, attendees participated in panels on the community impact of mortgage fraud and the evolution of the crisis. In the afternoon, task force representatives will meet privately with law enforcement officials involved in the investigation of mortgage fraud.
"This task force has a straightforward mission: To protect families against financial fraud and restore the confidence of consumers in our markets," said Assistant Attorney General for the Civil Division Tony West. "We will hold accountable not just those responsible for the corporate fraud that created our current financial crisis, but those responsible for the financial fraud that affects too many working families, like mortgage fraud and lending discrimination. And by holding these people accountable, we will seek to prevent another meltdown from happening again."
"The mortgage fraud crisis cannot be ignored. Mortgage fraud puts lenders at risk, and forces homeowners to confront the real possibility of foreclosures, or worse, the loss of their homes," said U.S. Attorney for the Southern District of Florida Jeffrey H. Sloman . "Nowhere is the problem more serious than here in Florida. Since September 2007, our mortgage fraud initiative has resulted in the prosecution of 282 individuals at all levels of the mortgage process, resulting in more than $343,669,434 in fraudulent mortgage loans. We will continue to do our part to investigate and prosecute these fraudsters, in the hopes of stemming the tide of fraud that has swept the mortgage industry."
"Different parts of the country experience mortgage fraud in different ways. We are here in Miami, in part, to learn about the nature of the problem and the enforcement efforts to date in this region, so that we can determine how best to facilitate enforcement efforts nationally," said U.S. Attorney for the Eastern District of California Benjamin B. Wagner. "This summit is the first of at least three similar summits that the Mortgage Fraud Working Group will be holding around the country. We hope to gather more information about the nature of the problem in different regions and help coordinate an effective law enforcement response."
"The HUD OIG helped craft into legislation last year a penalty of up to 30 years in prison and $1 million in fines for committing FHA fraud," said Inspector General of the Department of Housing and Urban Development Kenneth M. Donohue. "The OIG, working with U.S. Attorneys across the country, will endeavor to use these new penalties to prevent and confront fraudulent activities. We will use any means at our disposal, whether criminal, civil or administrative, to stop those who are impacting the soundness of HUD’s FHA program at such a critical time."
"The mortgage fraud crisis in Florida is similar to a state of emergency, and Florida Attorney General Bill McCollum knows we have to take an all-hands-on-deck approach to effectively address our citizens' concerns. The Florida Attorney General's Office will continue working with its federal, state and local partners to protect homeowners from mortgage fraud and foreclosure rescue and loan modification scams. Everyone must work together if we are going to make a difference," said Regional Deputy Attorney General Cynthia Guerra.
"As long as criminals are out to make a quick buck by preying on homeowners and lenders, we will continue to work side-by-side with our partners to protect the American dream for years to come and ensure that criminals who try to enrich themselves through mortgage fraud schemes are brought to justice," said FBI Deputy Assistant Director for the Criminal Investigative Division Karen Spangenberg.
Also participating in the summit were the Executive Director of the Financial Fraud Enforcement Task Force Robb Adkins, FinCEN Director James H. Freis, Jr. and representatives from the U.S. Secret Service, Federal Deposit Insurance Corporation and the Miami-Dade Police Department. The Miami summit is the first in a series of meetings to occur in the coming months, with additional dates and locations to be announced.
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.
Department of Justice Will Not Challenge Proposed Online Subscription News ServiceRead the Press Release
WASHINGTON – The Department of Justice announced today that it will not challenge a proposal by MyWire Inc. to form the Global News Service, an online subscription news aggregation service. The service would provide interconnections among different publishers’ online content, such as news articles and video and audio clips, that relate to the same topic. Based on representations made by MyWire, the department said that the formation and operation of the news service is not likely to reduce competition among Internet publishers and could provide procompetitive benefits to both publishers and consumers. The Department of Justice’s position was stated in a business review letter to counsel for MyWire from Christine Varney, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division.
The service would provide Internet publishers with a "related-item" content block that a publisher would add to its Web page. The block would contain hyperlinked abstracts of content from other participating publishers’ Web sites. By clicking these hyperlinks, consumers would be able to browse among related material from different publishers’ websites.
"Global News Service has the potential to benefit consumers by allowing them to access a broad network of related content without having to conduct their own online searches," said Assistant Attorney General Varney. "The service may also reduce publishers’ content distribution costs."
MyWire intends to enter into non-exclusive bilateral content licensing agreements with numerous Internet publishers. The agreements would not prevent the publishers from joining competing online news aggregation services. MyWire would operate independently of Internet publishers and would set its own consumer subscription rates for access to all publishers’ fee-based content within the MyWire network. Consumers would also be able to use the service for free to access publishers’ free content.
Under the Department of Justice’s business review procedure, an organization may submit a proposed action to the Antitrust Division and receive a statement as to whether the division currently intends to challenge the action under the antitrust laws.
A file containing the business review request and the department’s response may be examined in the Antitrust Documents Group of the Antitrust Division, U.S. Department of Justice, 450 Fifth Street, N.W., Suite 1010, Washington, D.C. 20530. After a 30-day waiting period, the documents supporting the business review will be added to the file, unless a basis for their exclusion for reasons of confidentiality has been established under the business review procedure.
Court in Texas Bars 12 Sub-Promoters of Alleged $30 Million Scam Involving Tax Credits Based on Fictitious Methane Production<br /> at LandfillsRead the Press Release
WASHINGTON - A federal judge in Beaumont, Texas, has permanently barred 12 people from promoting an alleged tax fraud scheme involving bogus income tax credits, the Justice Department announced today. The twelve are among 32 defendants named in a civil injunction lawsuit who allegedly helped customers claim more than $30 million in bogus federal income tax credits designed for producers of fuel from non-conventional sources. The court order was signed by Judge Marcia A. Crone of the U.S. District Court for the Eastern District of Texas.
According to the government complaint in the case, originally filed in Florida, the scheme involved claiming tax credits based on the purported recovery and sale of methane from landfills in Puerto Rico, Illinois, New York, Ohio and Connecticut. In fact, the complaint states, no methane was produced or sold, although some of the defendants allegedly created fictitious business records to falsely document the purported production and sales.
The twelve people barred are Silas Anderson of San Antonio, Texas; Ursa Bookman of Camden, Texas.; Joann Spooner of Port Author, Texas.; Carlos Metoyer, of Lake Charles, La.; Cleven Harper, Gloria Toren and Edward Trotty of Lufkin, Texas.; Jacqueline Levias and Jackie E. Mayfield of Orange, Texas; and Yusef A. Muhammed, Denise White and Craig D. Johnson of Beaumont, Texas. All consented to be enjoined without admitting wrongdoing.
The government suit alleges that George Calvert and Gregory Guido of Florida, who have been previously enjoined, concocted the scheme and promoted it through tax preparers who acted as subpromoters. The tax preparers allegedly sold interests in the fictitious methane production facilities to thousands of customers in at least 14 states across the country and prepared income tax returns for customers claiming tax credits based on the fictitious methane sales.
A total of 23 of the 32 defendants have now been barred, including, in addition to those named above, David Berger of Studio City, Calif. and Elizabeth and Louis Powell of Carthage, Texas., as well as Robert Anderson of Bloomington, Ill. Anderson also pleaded guilty to conspiracy to defraud the United States and mail fraud in a related federal criminal case in June 2009. The injunction case is still pending against the remaining nine defendants.
John DiCicco, Acting Assistant Attorney General for the Justice Department’s Tax Division, thanked Shana Starnes, the Justice Department trial attorney who is handling the case, and Jean Lane, a revenue agent with the Internal Revenue Service’s Small Business/Self-Employed Division, who conducted the investigation.
In the past decade, the Justice Department has obtained injunctions against more than 445 tax return preparers and tax fraud promoters. Information about the Justice Department’s Tax Division and its efforts to enjoin unscrupulous tax return preparers and tax fraud promoters is available on the Justice Department Web site.
New Jersey Man Pleads Guilty to Unauthorized Recording <br /> of Newly Released Motion Pictures in Movie TheaterRead the Press Release
Keshawn Deron Wilson of Asbury Park, N.J., pleaded guilty today in Tampa, Fla., to federal charges of using a video camera to record then newly-released motion pictures in a New Jersey theater, announced Assistant Attorney General of the Criminal Division Lanny A. Breuer and U.S. Attorney for the Middle District of Florida A. Brian Albritton.
Keshawn Wilson, 25, pleaded guilty before U.S. Magistrate Judge Thomas B. McCoun III to two counts of unauthorized recording of motion pictures in a motion picture exhibition facility. According to information presented in court, Wilson was arrested on Sept. 13, 2008, by Ocean Township, N.J., police officers, while he was in the process of recording Picturehouse Entertainment’s then newly-released motion picture "The Women" at the Middlebrook Galleria 10 Clearview Cinemas in Ocean, N.J. At the time he was arrested, officers seized a high definition video camera with a 30 gigabyte hard drive from Wilson. A subsequent search of the camera’s hard drive revealed a copy of the then newly-released movie "The Women" and a copy of Universal Studios’ then newly-released movie "Burn After Reading," which Wilson admitted he recorded the previous day at the same theater.
Wilson faces a maximum sentence of six years in prison, a $500,000 fine, two years of supervised release following the prison term and an order of restitution. A sentencing date has not yet been set by the court.
The case is being prosecuted by Assistant U.S. Attorneys Donald Hansen of the Middle District of Florida and Seth Kosto of the District of New Jersey, as well as Assistant Deputy Chief for Litigation Clement McGovern of the Computer Crime and Intellectual Property Section. This case was investigated by the FBI. The Motion Picture Association of America, an industry trade group that represents major producers and distributors of entertainment, including motion picture studios, provided assistance in this case.
Justice Department Seeks to Stop South Florida Tax Preparers Who Allegedly Claim False Home Buyer CreditsRead the Press Release
WASHINGTON – The United States has asked a federal court to stop two Miami-based tax return preparers from improperly claiming the First-Time Home Buyer Credit, the Justice Department announced today. The government complaints filed in separate lawsuits in U.S. District Court in Miami allege that Paula Olivette Patrice and her business, To the Max Tax Professionals Inc.; and Henry Ernesto Medina Jr. and his business, Medina Group Inc., prepare returns for customers that falsely claim the credit.
Congress enacted the First-Time Home Buyer 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 purchased.
The government complaints allege that Patrice and Medina claimed the credit on customers’ returns even though the customers had not purchased new homes. Patrice allegedly listed nonexistent addresses for property purportedly purchased, and in one instance, listed the same address on separate customers’ returns as the property purchased. Medina allegedly filed returns in March 2009 that falsely reported property as having been purchased months later.
"The Internal Revenue Service and Justice Department are committed to stopping abuse of the First-Time Home Buyer Credit," said John A. DiCicco, Acting Assistant Attorney General for the Justice Department’s Tax Division.
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 Home Buyer credit and other tax law provisions.
Over the past decade, the Justice Department’s Tax Division has obtained more than 435 injunctions to stop tax fraud promoters and dishonest tax preparers. Information about these cases is available on the Justice Department Web site.
Former Representative of Backfill Subcontractor Sentenced to 33 Months in Jail for Kickback and Fraud SchemeRead the Press Release
WASHINGTON — A former subcontractor representative was sentenced today to serve 33 months in jail and to pay a $30,000 criminal fine for his role in a kickback and fraud conspiracy at a U.S. Environmental Protection Agency (EPA) Superfund site in New Jersey, the Department of Justice announced.
James E. Haas Jr., a former representative of a New Jersey subcontractor that provides common backfill, a type of soil material used to refill an excavation, was also ordered to pay $53,049 in restitution to the EPA. Haas pleaded guilty on Oct. 28, 2009, in the U.S. District Court of New Jersey, to an indictment filed on Aug. 31, 2009, charging that he engaged in a kickback and fraud conspiracy at the Federal Creosote Superfund site, located in Manville, N.J. Haas admitted to paying kickbacks to former employees of a prime contractor at Federal Creosote in exchange for the award of a subcontract to the company he represented. He also admitted to inflating bid prices for the subcontract to include the amount of the kickbacks paid to his co-conspirators. Haas also pleaded guilty to committing fraud against the United States.
The clean-up at the Federal Creosote site is partly funded by the EPA. Under an interagency agreement between the EPA and the Army Corps of Engineers, prime contractors oversaw the removal, treatment and disposal of contaminated soil, as well as other operations at the Federal Creosote site.
The charges are the result of an ongoing investigation being conducted by the Antitrust Division’s New York Field Office, the EPA Office of Inspector General and the Internal Revenue Service Criminal Investigation. To date, a total of three companies and eight individuals have pleaded guilty as part of the investigation. Bennett Environmental Inc. was sentenced on Dec. 15, 2008, to pay criminal fines and restitution totaling more than $2.66 million. On July 13, 2009, Christopher Tranchina was sentenced to serve 20 months in jail and to pay restitution totaling $154,597. Frederick Landgraber was sentenced on Oct. 28, 2009, to five months in jail and five months in home confinement, and to pay restitution of $35,000. The other individuals and companies are awaiting sentencing.
Today’s sentencing reflects the department’s commitment to protecting U.S. taxpayers from procurement fraud through its creation of the National Procurement Fraud Task Force. The National Procurement Fraud Initiative, announced in October 2006, is designed to promote the early detection, prosecution and prevention of procurement fraud associated with the increase in contracting activity for national security and other government programs.
Anyone with information concerning bid rigging, kickbacks, tax offenses or fraud relating to subcontracts awarded at the Federal Creosote site or Diamond Alkali Superfund Site in Newark, N.J., should contact the Antitrust Division’s New York Field Office at 212-264-9308 or visit http://www.justice.gov/atr/contact/newcase.htm.
Federal Inmate Pleads Guilty to Obstructing<br /> DOJ Office of the Inspector GeneralRead the Press Release
A federal inmate pleaded guilty today in Kansas City, Mo., to obstruction of justice by making false statements and creating false evidence related to identity theft in an attempt to lessen penalties for charges in an underlying case, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division.
Margie P. Shephard, 45, pleaded guilty in the Western District of Missouri to one count of endeavoring to obstruct the administration of justice. Shephard also pleaded guilty to one count of conspiracy to commit identity theft and one count of aggravated identity theft related to the underlying case against her. Shephard has been in federal custody on the identity theft charges, which were brought by the U.S. Attorney’s Office for the Western District of Missouri.
According to court documents, from June 29, 2007, to Aug. 7, 2007, Shephard admitted she operated a scheme to manufacture counterfeit payroll checks in the names of identity theft victims and pass the checks in order to obtain money. When she was arrested on Aug. 7, 2007, Shephard was in possession of 71 counterfeit checks drawn upon various financial institutions, as well as four drivers’ licenses, credit cards and other items in the names of identity theft victims. According to the plea agreement, Shephard admitted that from approximately April 2009 to January 2010, she gave false statements and provided physical evidence to the Department of Justice Office of the Inspector General (DOJ-OIG), falsely alleging an ongoing identity theft scheme instigated by a federal government employee. Shephard admitted she provided this false evidence in an attempt to persuade the U.S. Attorney’s Office to request a reduction in her prison sentence in the pending conspiracy and identity theft case.
Shephard’s actions caused the recusal of the U.S. Attorney’s Office from the investigation of her false allegations, the continuance of the underlying criminal case against her while the allegations were investigated, and the use of substantial OIG resources in investigating her claims. Shephard admitted she continued to provide false statements and physical evidence that she knew was being provided to a grand jury and to the court, as well as attempted to convince others to manufacture false evidence to support her allegations. Ultimately, the government determined that the alleged ongoing scheme involving a federal government employee did not exist.
At sentencing, Shephard faces up to 10 years in prison on the obstruction charge, five years in prison on the conspiracy charge and two years in prison on the identity theft charge. The two-year sentence for aggravated identity theft is a mandatory consecutive prison term to the remaining charged counts . A sentencing date has not yet been scheduled by the court.
The obstruction case is being prosecuted by Senior Trial Attorney Richard C. Pilger of the Criminal Division’s Public Integrity Section, and was investigated by the DOJ-OIG. The underlying conspiracy and identity theft case is being prosecuted by Assistant U.S. Attorney Daniel M. Nelson of the Western District of Missouri, and was investigated by the Independence, Mo., Police Department; the Kansas City, Mo., Police Department; and the Overland Park, Kan., Police Department.
Department of Justice and USDA Workshops to Explore Competition and Regulatory Issues in the Agriculture Industry to Begin March 12 in IowaRead the Press Release
WASHINGTON — The Department of Justice and the U.S. Department of Agriculture (USDA) announced today the agenda and panelists for the first joint public workshop, which will be held on March 12, 2010, in Ankeny, Iowa, to explore competition and regulatory issues in the agriculture industry. The workshop will be held at the Des Moines Area Community College’s FFA Enrichment Center.
The workshops, which were first announced by Attorney General Eric Holder and Agriculture Secretary Tom Vilsack on Aug. 5, 2009, are the first joint Department of Justice/USDA workshops ever to be held to discuss competition and regulatory issues in the agriculture industry. The goals of the workshops are to promote dialogue among interested parties and foster learning with respect to the appropriate legal and economic analyses of these issues, as well as to listen to and learn from parties with experience in the agriculture sector. Attendance at the workshops is free and open to the public. The general public and media interested in attending the initial workshop should register at https://go.dmacc.edu/ffa/agworkshop.
The Department of Justice’s Assistant Attorney General for the Antitrust Division Christine Varney and Agriculture Secretary Tom Vilsack will participate in the workshop and will be joined by Iowa Agriculture Secretary Bill Northey and Iowa Attorney General Tom Miller. They will participate in a roundtable discussion with presentations on current issues affecting farmers. Two panels focusing on the competitive dynamics in the seed industry and trends in contracting, transparency and buyer power will follow. The first day of the workshops will end with an enforcer roundtable and public testimony.
The workshop schedule follows:
Opening Remarks (9:00 a.m. CST - 9:15 a.m. CST)
Tom Vilsack, Secretary of Agriculture, U.S. Department of Agriculture
Christine Varney, Assistant Attorney General for Antitrust, U.S. Department of JusticeRoundtable Discussion and Presentation of Issues (9:15 a.m. CST - 11:30 a.m. CST)
Tom Vilsack, Secretary of Agriculture, U.S. Department of Agriculture
Christine Varney, Assistant Attorney General for Antitrust, U.S. Department of Justice
Tom Miller, Attorney General, State of Iowa
Bill Northey, Secretary of Agriculture, State of Iowa
Tom Harkin, Senator, U.S. Senate (tentative)
Chuck Grassley, Senator, U.S. Senate (tentative)
Leonard Boswell, Congressman, U.S. House of Representatives (tentative)Invited:
Chet Culver, Governor, State of Iowa
A farmer roundtable discussion and testimony will also be given at this time. Farmer panelists will be posted on the Web site at a later date.
Seed Competitive Dynamics Panel (1:00 p.m. CST - 2:15 p.m. CST)
Moderator:
James MacDonald, Chief, Agricultural Structure and Productivity Branch, Economic Research Service, U.S. Department of AgriculturePanelists:
Ray Gaesser, Soybean and Corn Farmer, Corning, Iowa; Vice President, American Soybean Association; Former President, Iowa Soybean Association
Neil E. Harl, Charles F. Curtiss Distinguished Professor in Agriculture and Emeritus Professor of Economics, Iowa State University; Member of the Iowa Bar
Dermot Hayes, Professor of Economics and Finance, Pioneer Chair in Agribusiness, Iowa State University
Diana Moss, Vice President & Senior Fellow, American Antitrust Institute
Jim Tobin, Vice President, Industry Affairs, Monsanto CompanyAgricultural Trends Panel (2:15 p.m. CST - 3:15 p.m. CST)
Moderator:
Phil Weiser, Deputy Assistant Attorney General, U.S. Department of JusticePanelists:
Brian Buhr, Professor and Head of Department, Applied Economics, University of Minnesota
Rachael Goodhue, Associate Professor, Department of Agriculture and Resource Economics, University of California, Davis
Mary Hendrickson, Extension Associate Professor of Rural Sociology, University of Missouri
John Lawrence, Professor of Economics, Iowa State University
Chuck Wirtz, pork producer, Whittemore, Iowa
Patrick Woodall, Research Director, Food & Water WatchEnforcer Roundtable Discussion Panel (3:30 p.m. CST - 4:15 p.m. CST)
Moderator:
Mark Tobey, Special Counsel for State Relations and Agriculture, U.S. Department of
JusticePanelists:
Steve Bullock, Attorney General, State of Montana
Richard Cordray, Attorney General, State of Ohio
John Ferrell, Deputy Under Secretary for Marketing and Regulatory Programs, U.S. Department of Agriculture
Stephen Obie, Director, Division of Enforcement, Commodity Futures Trading Commission
William Stallings, Assistant Section Chief, Transportation, Energy and Agriculture Section, Antitrust Division, U.S. Department of JusticePublic Testimony (4:15 p.m. CST - 5:15 p.m. CST)
This is an opportunity for those in the audience to make comments in an open forum.
Additional updates and information will be posted on the Antitrust Division’s agriculture workshop Web site at http://www.justice.gov/atr/public/workshops/ag2010/index.htm. While no streaming Web cast will be available, transcripts will be available for review at a later date on the Antitrust Division’s Web site. Individuals seeking more information on the workshops should contact [email protected].
Press Contacts:
U.S. Department of Justice
Office of Public Affairs
Gina Talamona
202-514-2007
U.S. Department of Agriculture
Office of Communications
Jim Brownlee
202-720-4623Najibullah Zazi Pleads Guilty to Conspiracy to Use Explosives Against Persons or Property in U.S., Conspiracy to Murder Abroad and Providing Material Support to Al-QaedaRead the Press Release
The Justice Department announced that Najibullah Zazi pleaded guilty today in the Eastern District of New York to a three-count superseding information charging him with conspiracy to use weapons of mass destruction (explosive bombs) against persons or property in the United States, conspiracy to commit murder in a foreign country and providing material support to al-Qaeda. Among other things, Zazi admitted that he brought TATP [Triacetone Triperoxide] explosives to New York on Sept. 10, 2009, as part of plan to attack the New York subway system.
Zazi, 25, a resident of Aurora, Colo., and legal permanent resident of the United States from Afghanistan, entered his guilty plea today before Chief U.S. District Judge Raymond J. Dearie. Zazi faces a maximum statutory sentence of life in prison for the first two counts of the superseding information and an additional 15 years in prison for the third count of the superseding information.
FBI agents in Colorado first arrested Zazi on Sept. 19, 2009, on a criminal complaint charging him with knowingly and willfully making false statements to the FBI in a matter involving international and domestic terrorism. On Sept. 23, 2009, a federal grand jury in the Eastern District of New York returned a one-count indictment alleging that Zazi knowingly and intentionally conspired with others to use one or more weapons of mass destruction, specifically explosive bombs and other similar explosive devices, against persons or property within the United States.
As Zazi admitted during today’s guilty plea allocution and as reflected in previous government filings, he and others agreed to travel to Afghanistan to join the Taliban and fight against United States and allied forces. In furtherance of their plans, they flew from Newark Liberty International Airport in Newark, N.J., to Peshawar, Pakistan at the end of August 2008. Although Zazi and others initially intended to fight on behalf of the Taliban, they were recruited by al-Qaeda shortly after arriving in Peshawar. Al-Qaeda personnel transported Zazi and others to the Waziristan region of Pakistan and trained them on several different kinds of weapons. During the training, al-Qaeda leaders asked Zazi and others to return to the United States and conduct suicide operations. They agreed.
Zazi later received additional training from al-Qaeda on constructing the explosives for the planned attacks in the United States. Zazi had discussions with al-Qaeda leaders about target locations, including subway trains in New York City. Zazi took detailed notes during the training, and later emailed a summary of the notes to himself so that he could access them when he returned to the United States. Zazi also provided money and computers to al-Qaeda before he left Pakistan.
Zazi returned to the United States in January 2009 and moved to Denver. Beginning in June 2009, he began reviewing the bomb-making notes from his training and conducting research on where to buy the ingredients for the explosives. Zazi then traveled to New York and met with others to discuss the plan, including the timing of the attack and where to make the explosives.
Zazi returned to Denver and used the bomb-making notes to construct the explosives for the detonator components of the bombs. As set forth in the government’s detention memorandum filed earlier in the case, in July and August 2009, Zazi purchased large quantities of components necessary to produce TATP and twice checked into a hotel room near Denver, where bomb making residue was later found.
On Sept. 8, 2009, Zazi rented a car and drove from Denver to New York, taking with him the explosives and other materials necessary to build the bombs. Zazi arrived in New York City on Thursday, Sept.10, 2009. Zazi and others intended to obtain and assemble the remaining components of the bombs over the weekend and conduct the attack on Manhattan subway lines on Sept. 14, Sept. 15, or Sept. 16, 2009. However, shortly after arriving in New York, Zazi realized that law enforcement was investigating his activities. Zazi and others discarded the explosives and other bomb-making materials, and Zazi traveled back to Denver. He was arrested on Sept. 19, 2009.
"This was one of the most serious terrorist threats to our nation since September 11th, 2001, and were it not for the combined efforts of the law enforcement and intelligence communities, it could have been devastating," said Attorney General Eric Holder. "This attempted attack on our homeland was real, it was in motion, and it would have been deadly. We were able to thwart this plot because of careful analysis by our intelligence agents and prompt actions by law enforcement. They deserve our thanks and praise."
"Today’s plea is an important development in this complex and ongoing criminal investigation and intelligence operation that in many ways illustrates the evolving nature of the terrorist threat today," said FBI Deputy Director John S. Pistole. "The plea is the result of the dedication and hard work by agents and officers assigned to Joint Terrorism Task Forces in both New York and Colorado working closely with federal prosecutors."
This case is being prosecuted by the U.S. Attorney’s Office for the Eastern District of New York, with assistance from the U.S. Attorney’s Office for the District of Colorado and the Counterterrorism Section of the Justice Department’s National Security Division. The investigation is being conducted by the New York and Denver FBI Joint Terrorism Task Forces, which combined have investigators from more than fifty federal, state and local law enforcement agencies.
Justice Department Requires KeySpan to Disgorge $12 Million<br /> in Profits from Anticompetitive AgreementRead the Press Release
WASHINGTON — The Department of Justice today announced a settlement with KeySpan Corporation that requires KeySpan to pay $12 million for violating the antitrust laws by entering into an agreement restraining competition in the New York City electricity capacity market. The department said the financial derivative agreement likely resulted in a price increase for retail electricity suppliers and, in turn, an increase in electricity prices for consumers.
The department’s Antitrust Division today filed a civil antitrust complaint in U.S. District Court for the Southern District of New York, along with the proposed settlement that, if approved by the court, would resolve the lawsuit. The settlement provides for disgorgement of profits for a violation of the antitrust laws and requires KeySpan to pay $12 million to the United States.
According to the complaint, KeySpan and a financial services company entered into an agreement in January 2006 that gave KeySpan a financial interest in the electricity capacity sales of its largest competitor, Astoria. At the time of the agreement, KeySpan was the largest seller of electricity capacity in the New York City market. By providing KeySpan revenues from its competitor’s capacity sales, as well as its own, the agreement with the financial services company had the anticompetitive effect of eliminating KeySpan’s incentive to sell its electricity capacity at lower prices. As a result, retail electricity prices in New York City were likely higher than they would have been without this anticompetitive agreement. The anticompetitive effects of the agreement lasted until March 2008, when regulatory conditions eliminated KeySpan’s ability to affect the market price of electricity capacity.
New York City’s electricity generating capacity market was created to ensure that sufficient generation capacity exists to meet expected electricity needs. Electricity retailers serving consumers in the city are required to purchase capacity from generators in amounts related to their expected peak energy demand. Electricity generators offer to sell their capacity to electricity retailers in regularly held auctions.
KeySpan is a New York corporation and has its headquarters in New York City. Until 2008, KeySpan owned approximately 2400 megawatts of electric generating capacity at its Ravenswood electrical generation facility located in New York City. KeySpan was purchased by National Grid in August 2007.
The proposed settlement, along with the department’s competitive impact statement, will be published in The Federal Register, as required by the Antitrust Procedures and Penalties Act. Any person may submit written comments concerning the proposed settlement within 60 days of its publication to Donna N. Kooperstein, Chief, Transportation, Energy and Agriculture Section, Antitrust Division, U.S. Department of Justice, 450 5th St. NW, Suite 8000, Washington, D.C. 20530. At the conclusion of the 60-day comment period, the court may enter the Final Judgment upon a finding that it serves the public interest.
Eon Labs Pays U.S. $3.5 Million to Settle Allegations<br /> of Submitting False Claims to MedicaidRead the Press Release
WASHINGTON – Eon Labs Inc. has agreed to pay the United States $3.5 million to resolve False Claims Act allegations relating to the company's drug Nitroglycerin Sustained Release (SR) capsules, the Justice Department announced today. Eon Labs is a subsidiary of Sandoz Inc., which is in turn a subsidiary of Novartis AG.
In April 1999, the Food & Drug Administration (FDA) determined that Nitroglycerin SR lacked substantial evidence of effectiveness and published a notice proposing to withdraw approval of the product. The government contends that, after the FDA notice, Nitroglycerin SR no longer was legally eligible for reimbursement by government health care programs such as Medicaid.
The government further alleges that, from April 1999, and continuing through September 2008, Eon submitted false quarterly reports to the government that misrepresented Nitroglycerin SR's regulatory status and failed to advise that Nitroglycerin SR no longer qualified for Medicaid coverage. As a result, the government contends, Eon knowingly caused false Medicaid claims to be submitted for Nitroglycerin SR.
"We expect manufacturers to be truthful about the regulatory status of their drugs, and we will pursue those companies that submit false information to obtain payment for unapproved drugs that are less than effective or on the market illegally," said Tony West, Assistant Attorney General for the Civil Division.
The settlement resolves allegations against Eon in a multi-defendant whistleblower action entitled United States ex rel. Conrad v. Eon Labs, Inc., et al. The False Claims Act allows for private persons to file a qui tam or whistleblower suit on behalf of the government. If the government is successful in resolving or litigating its claims, the whistleblower may receive a share of the recovery. Under this settlement, the whistleblower will receive approximately $525,000.
"This is the first False Claims Act agreement with a drug company that sought to charge the government for less than effective drugs, and it shows that the Department of Justice will pursue those who market such drugs and expect the government to pay for them," said Carmen Ortiz, U.S. Attorney for the District of Massachusetts.
This settlement is part of the government's emphasis on combating health care fraud. One of the powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover approximately $2.2 billion since January 2009 in cases involving fraud against federal health care programs. The Justice Department's total recoveries in False Claims Act cases since January 2009 have topped $3 billion.
This case was investigated by the Justice Department’s Civil Division, the U.S. Attorney's Office of the District of Massachusetts and the Office of Inspector General of the Department of Health and Human Services.
Cummins Inc. Agrees to Pay $2.1 Million Penalty for Diesel Engine Clean Air Act ViolationsRead the Press Release
WASHINGTON—Cummins Inc., a major motor vehicle engine company based in Columbus, Ind., will pay a $2.1 million penalty and recall 405 engines under a settlement agreement resolving alleged violations of the Clean Air Act, the Justice Department and U.S. Environmental Protection Agency (EPA) announced today.
According to a complaint filed simultaneously with the settlement in federal court in the District of Columbia, between 1998 and 2006 Cummins shipped more than 570,000 heavy duty diesel engines to vehicle equipment manufacturers nationwide without pollution control equipment included, in violation of the Clean Air Act. This equipment, known as exhaust after-treatment devices (ATDs), controls engine exhaust emissions once the emissions have exited the engine and entered the exhaust system. Typical ATDs include catalytic converters and diesel particulate filters.
Engine manufacturers must prove through testing that their engine designs meet EPA's emissions standards and seek certificates of conformity. According to the complaint, Cummins tested the engines with the ATDs to meet the standards, but failed to include the ATDs with the engines when Cummins shipped the engines to the vehicle manufacturers. Instead, Cummins relied upon the vehicle manufacturers to purchase and install the correct ATDs. The United States alleges that the shipment of engines to vehicle manufacturers without the ATDs violates the Clean Air Act's prohibition on the sale of engines not covered by certificates of conformity.
The settlement requires Cummins to recall approximately 405 engines that were found to have reached the ultimate consumers without the correct ATDs in order to install the correct ATDs.
"This settlement assures that the environment suffers no ill effects because it requires that Cummins not only install the proper pollution control devices but also mitigate the effects of the harmful emissions released as a result of its actions," said Ignacia S. Moreno, Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division.
"Reliable and effective pollution control systems are essential to protect human health and the environment from harmful engine emissions," said Cynthia Giles, Assistant Administrator for EPA’s Office of Enforcement and Compliance Assurance. "These requirements are a critical part of EPA's program to reduce air pollution and secure clean air so that all Americans can breathe easier."
EPA estimates that Cummins actions resulted in approximately 167 excess tons of nitrogen oxides and hydrocarbon emissions, and 30 excess tons of particulate matter emissions over the lifetime of the non-conforming engines. Cummins will mitigate the effects of excess emissions from its non-conforming engines through permanent retirement of emission credits equal to the excess tons of pollution.
Over half the air pollutants in America come from "mobile sources" of air pollution, such as cars, trucks, buses, motorcycles, construction, agricultural and lawn and garden equipment, marine vessels, outboard motors, jet skis and snowmobiles. Mobile source pollutants include smog-forming volatile organic compounds and nitrogen oxides, toxic air pollutants such as cancer-causing benzene, and particulate matter or "soot." These pollutants are responsible for asthma and other respiratory illnesses.
The state of California Air Resources Board will receive $420,000 of the civil penalty under a separate settlement agreement with Cummins, continuing a federal government practice of sharing civil penalties with states that participate in clean air enforcement actions.
The Cummins settlement was lodged today in the U.S. District Court for the District of Columbia, and is subject to a 30-day public comment period. A copy of the consent decree is available on the Justice Department Web site at http://www.justice.gov/enrd/Consent_Decrees.html.
Shipping Firm Sentenced to Pay $10 Million for Causing Cosco Busan Oil Spill and CoverupRead the Press Release
Fleet Management Ltd. was ordered to pay $10 million today for its role in causing the Cosco Busan oil discharge and a subsequent cover-up after the ship struck the San Francisco Bay Bridge in November 2007, the Justice Department announced.
Judge Susan Illston of the U.S. District Court in San Francisco, pursuant to the plea agreement, ordered $2 million of the total $10 million monetary assessment to be devoted to fund marine environmental projects in San Francisco Bay.
Fleet Management, a Hong Kong-based ship management firm, pleaded guilty to a criminal violation of the Oil Pollution Act of 1990 as well as felony obstruction of justice and false statement charges for creating false and forged documents after the crash at the direction of shore-based supervisors with an intent to deceive the U.S. Coast Guard.
Fleet was also ordered to implement a comprehensive compliance plan that would include heightened training and voyage planning for ships engaged in trade in the United States. The training will focus on better preparing masters for command of Fleet’s vessels, providing classroom and shipboard navigation training to those who navigate Fleet’s vessels, and ensuring that all Fleet vessels calling in U.S. ports create a thorough plan for how they will navigate in those ports. The new training and voyage planning requirements will be subject to auditing and the court’s supervision.
"Fleet’s systemic management failures played a significant role in causing the Cosco Busan disaster and they compounded the problem by attempting to cover-up their conduct," said Ignacia S. Moreno, Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division.
"The sentence today not only includes a significant monetary penalty but also will ensure that Fleet Management develops a culture that puts safety and the environment first."
"Fleet failed to meet its obligation under international law to ensure the crew was adequately trained on navigation procedures and equipment and then tried to cover it up," said U.S. Attorney Russoniello. "Today’s sentencing should serve as a warning to everyone in the maritime industry – you will be held accountable for violations of federal and international laws."
"The U.S. Coast Guard is pleased to see an increased emphasis on crew training," said Rear Admiral Joseph Castillo, Commander of the 11th Coast Guard District. "The safety of mariners, the health of our economy, and the protection of our environment all require the safest possible operation of merchant ships sailing in our ports, waterways and coastal areas, and proper training is key to safe operations."
"Shipping companies that move goods through the San Francisco Bay must operate their vessels in a safe and legal manner. The Cosco Busan oil spill should not have occurred in the first place, and the company’s attempt to cover-up its illegal acts only compounded the initial crime," said Nick Torres, Special Agent in Charge of EPA’s Criminal Investigation Division in San Francisco. "The laws are there to protect our precious natural resources. Today's sentence sends a clear message that those who violate the law and pollute our waters will be vigorously prosecuted."
Fleet Management admitted "that it was a cause of a discharge of a harmful quantity of oil into the navigable waters of the United States, that it acted negligently, and that its negligence was a proximate cause of the discharge of oil into San Francisco Bay on Nov. 7, 2007."
In pleading guilty on Aug. 13, 2009, Fleet admitted that after the ship hit the Bay Bridge, it concealed ship records and created materially false, fictitious and forged documents with an intent to influence the Coast Guard’s investigation.
In particular, a false berth-to-berth passage plan for the day of the crash was created after the incident at the direction of shore-side supervisors known as superintendents and with the knowledge of the ship’s master. Additionally, a ship officer falsified the ship’s official navigational chart to show fixes that were not actually recorded during the voyage. Other records including false passage planning checklists were also created after the fact.
The collision caused a gash measuring approximately 150 feet long by 12 feet high on the port side of the ship, puncturing two of the ship’s fuel tanks and damaging the fendering system on the Delta tower of the bridge, and resulting in a significant environmental clean-up. At least 2,000 migratory birds died, including Brown Pelicans, Marbled Murrelets and Western Grebes. The Brown Pelican is a federally endangered species and the Marbled Murrelet is a federally threatened species and an endangered species under California law.
The pilot of the Cosco Busan, Captain John Cota, pleaded guilty on March 6, 2009, and was later sentenced to 10 months in prison, one year of supervised release and 200 hours of community service for his role in causing the Cosco Busan collision and discharge of oil and deaths of migratory birds.
The criminal investigation was conducted by the Coast Guard Investigative Service; the EPA Criminal Investigation Division; the Federal Bureau of Investigation; the U.S. Fish and Wildlife Service; Silicon Valley Regional Computer Forensics Laboratory; and the California Department of Fish and Game, Office of Spill Prevention and Response. The investigation also received technical assistance from other Coast Guard offices including District 11 Legal Office, Sector San Francisco, Office of Investigations and Analysis, Office of Maritime and International Law, Office of Vessel Activities, Electronics Support Unit, Alameda and the Marine Safety Laboratory. In announcing the sentencing, the U.S. Attorney and Assistant Attorney General thanked federal and state investigators and offices for their assistance in the prosecution.
The criminal case was prosecuted by the U.S. Attorney’s Office for the Northern District of California and the Justice Department’s Environmental Crimes Section.
Massachusetts Hospital Agrees to Pay U.S. $2.79 Million<br /> to Resolve False Claims Act AllegationsRead the Press Release
WASHINGTON – Mercy Hospital Inc. (d/b/a Mercy Medical Center) of Springfield, Mass., has agreed to pay the United States $2,799,462 to settle claims that it violated the False Claims Act between 2005 and 2006 by failing to provide, or failing to document that it provided, the minimum number of hours of rehabilitation therapy required under Medicare guidelines, the Justice Department announced today.
Under Medicare, inpatient rehabilitation hospitals must provide a minimum amount of rehabilitative therapy to their patients. In June 2007, Mercy disclosed to the Department of Health and Human Services Office of Inspector General that it could not demonstrate that it had provided the required level of therapy. The settlement announced today resulted from the company’s disclosure.
"This settlement demonstrates the Justice Department’s commitment to ensuring that Medicare patients get all of the care that Medicare pays for," said Tony West, Assistant Attorney General for the Civil Division of the Department of Justice. "As this settlement shows, those who come forward to disclose their violations and cooperate with the government will be dealt with fairly."
The case was handled by the Justice Department’s Civil Division and the Office of Inspector General of the Department of Health and Human Services.
This settlement is part of the government’s emphasis on combating health care fraud. One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover approximately $2.2 billion since January 2009 in cases involving fraud against federal health care programs. The Justice Department’s total recoveries in False Claims Act cases since January 2009 have topped $3 billion.
Justice Department and FBI Announce Formal Conclusion <br /> of Investigation into 2001 Anthrax AttacksRead the Press Release
The Justice Department, FBI and U.S. Postal Inspection Service today announced that the investigation into the 2001 anthrax attacks, which killed five individuals and sickened 17 others, has formally concluded.
Earlier today, representatives of the FBI and Justice Department provided a 92-page investigative summary along with attachments to victims of the attacks, relatives of the victims and appropriate committees of Congress. This document sets forth a summary of the evidence developed in the "Amerithrax" investigation, the largest investigation into a bio-weapons attack in U.S. history. As disclosed previously, the Amerithrax investigation found that the late Dr. Bruce Ivins acted alone in planning and executing these attacks.
The investigative summary and the attachments are now accessible to the public and have been posted to the Justice Department Web site at www.usdoj.gov/amerithrax under the Freedom of Information Act. In addition, roughly 2,700 pages of FBI documents related to the Amerithrax case are now accessible to the public and have been posted to the FBI website at http://foia.fbi.gov/foiaindex/amerithrax.htm under the Freedom of Information Act.
The Amerithrax Task Force, which was comprised of roughly 25 to 30 full-time investigators from the FBI, U.S. Postal Inspection Service and other law enforcement agencies, as well as federal prosecutors from the District of Columbia and the Justice Department’s Counterterrorism Section, expended hundreds of thousands of investigator work hours on this case. Their investigative efforts involved more than 10,000 witness interviews on six different continents, the execution of 80 searches and the recovery of more than 6,000 items of potential evidence during the course of the investigation. The case involved the issuance of more than 5,750 grand jury subpoenas and the collection of 5,730 environmental samples from 60 site locations.
Justice Department Obtains More Than $2 Million to Settle Claims of Housing Discrimination Against Former Owners and Managers of Kansas City Apartment ComplexRead the Press Release
The Justice Department today announced the settlement of a case alleging housing discrimination in the rental of apartments in Kansas City, Kan. The combined $2.13 million settlement represents the second largest monetary payment ever obtained by the department in a fair housing case alleging housing discrimination in the rental of apartments.
The department brought a lawsuit in federal district court in Kansas alleging that Stacy Sturdevant, the community manager of the Central Park Towers Apartments (CPT), her employer, NHP Management Co., as well as the Apartment Investment and Management Company (AIMCO) and the former owners of CPT, engaged in a pattern or practice of discrimination on the basis of race in violation of the Fair Housing Act. The lawsuit also alleged that the defendants retaliated against an employee, Melissa Kothe, for cooperating with Department of Housing and Urban Development (HUD) investigators.
In its amended complaint, filed on Sept. 18, 2008, the department alleged that for two-and-a-half years between 2003-2005, Sturdevant engaged in discriminatory rental practices on the basis of race. The United States presented evidence in litigation that Sturdevant openly displayed racially hostile materials at CPT, such as hangman’s nooses, frequently referred to African Americans with racial epithets and generally treated white residents more favorably than African American residents. The government also alleged that the defendants improperly retaliated against Kothe, a resident services coordinator at CPT, by firing her when she cooperated with HUD investigators and advised a resident to contact HUD.
"The right to live peacefully in one’s own home without being victimized, harassed and treated unfairly because of race is a fundamental right in our nation," said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. "This settlement is designed to send a message to housing providers across the country that we have a zero-tolerance policy for this type of egregious behavior."
"Individuals who step forward to assist victims of housing discrimination should know that HUD and the Justice Department will protect them from retaliation," said John Trasviña, HUD Assistant Secretary for Fair Housing and Equal Opportunity. "This settlement vindicates that interest."
Sturdevant was an employee of NHP Management Company, a subsidiary of AIMCO, one of the nation’s largest owners and operators of multifamily dwellings. Central Park Towers II L.P. owned the building where Sturdevant was employed — a Section 8 property with 195 units designated for persons with disabilities and/or elderly. This settlement will resolve the United States’ claims on behalf of over 40 current and former tenants of Central Park Towers, as well as the claim on behalf of Melissa Kothe.
The department settled its claim against the former owners, Central Park Towers II L.P. last summer, for $145,000. That settlement, together with the agreement announced today, amount to a total settlement of $2.13 million. The settlements are in the form of consent orders that the parties have submitted to the court for approval. Last summer’s settlement with the former owners has already been approved by the court. Today’s agreement must still be approved by U.S. District Court Judge Kathryn Vratil.
The agreement filed today would require the defendants to pay $95,500 in civil penalties to the United States, and a total of approximately $1.89 million into a fund that would be used to compensate persons who were harmed by the defendants’ discriminatory practices. The terms of the distribution of the monetary damages will be determined in a separate disbursement order to be submitted by the United States for approval by the court.
The federal Fair Housing Act prohibits discrimination in housing on the basis of race, color, religion, national origin, sex, disability and familial status. Individuals who believe that they may have been victims of housing discrimination should call the Housing Discrimination Tip Line (1-800-896-7743) or email the Justice Department at [email protected]. Such persons may also contact the U.S. Department of Housing and Urban Development at 1-800-669-9777 to report discrimination.
Fair housing enforcement is a priority of the Civil Rights Division. More information about the Civil Rights Division and the laws it enforces is available at http://www.justice.gov/crt.
Indictment Charging Four Individuals Unsealed in Condominium Asbestos CaseRead the Press Release
WASHINGTON—An 11-count indictment was unsealed today charging four individuals with conspiracy, violations of the Clean Air Act, and making false statements for their roles in a scheme to improperly remove and dispose of asbestos from multiple condominiums in Florida, the Justice Department announced.
John Loder, 43, of Redington Beach, Fla.; Stephen J. Spencer, 48, of Clearwater, Fla.; Guy Gannaway, 53, of Safety Harbor, Fla.; and Keith McConnell, a/k/a "Animal," 54, of Largo, Fla., were charged in the indictment.
According to the indictment, John Loder and Stephen J. Spencer were members of an entity called Sun Vista Development Group LLC, which was created to carry out the day-to-day operations and administrative work associated with the purchase, renovation and resale of large-scale condominium developments. Two of these developments were Barefoot Beach Resort, formerly known as Indian Pass Apartments, in Indian Shores, Fla., and Shore Club Pasadena, formerly known as Pasadena Apartments, in Pasadena, Fla. Guy Gannaway was the owner of Gannaway Builders Inc., a construction company hired as the general contractor for both Barefoot Beach Resort and Shore Club Pasadena. Keith McConnell was a supervisory employee of Gannaway Builders Inc. Units at these developments had ceilings coated with a "popcorn"-texture that contained greater than 1 percent asbestos.
According to the indictment, from November 2004 to Dec. 10, 2004, the defendants directed renovation work to begin at Barefoot Beach Resort without first conducting an asbestos survey for the building. From Dec. 10, 2004 until April 2005, the defendants discussed the asbestos at Barefoot Beach Resort and rejected at least one bid for complete removal of the asbestos-containing ceiling material from Barefoot Beach Resort. They decided, instead, to cover the existing ceilings with a new layer of drywall using Gannaway Builders employees and subcontractors to install the new drywall. The indictment alleges that the work practice standards for asbestos, developed as part of the National Emission Standards for Hazardous Air Pollutants, were not followed while the renovation was performed at Barefoot Beach Resort between Nov. 15, 2004, and Sept. 15, 2005. In some units, the asbestos-containing popcorn ceiling material was completely removed following a roof leak on or about June 24, 2005, also without following the asbestos work practice standards. Additionally, the indictment alleges that the defendants made and caused others to make false statements to the Pinellas County Air Quality Division in response to a notice of violation issued to Sun Vista Development Group and Gannaway Builders on Nov. 18, 2005.
Further, according to the indictment, from May 25, 2005 to Nov. 30, 2006, the defendants directed renovation work at Shore Club Pasadena without removing the asbestos-containing ceiling material prior to activity that disturbed the material. The renovation work that caused improper disturbances to the asbestos-containing material occurred without the presence of a properly trained on-site representative.
All four defendants are charged with conspiracy to violate the Clean Air Act and to make false statements. The indictment additionally charges Loder and Spencer with five counts of violating the Clean Air Act and one count of making a false statement. The indictment charges Guy Gannaway with eight counts of violating the Clean Air Act and two counts of making a false statement. The indictment further charges Keith McConnell with eight counts of violating the Clean Air Act and one count of making a false statement.
An indictment is merely an accusation, and a defendant is presumed innocent unless and until proven guilty in a court of law.
The maximum penalty for each count of the indictment includes five years in prison and a $250,000 fine.
This case was investigated by the Environmental Protection Agency Criminal Investigation Division with assistance from the Florida Department of Law Enforcement. It is being prosecuted by the U.S. Attorney’s Office for the Middle District of Florida and the Justice Department’s Environmental Crimes Section.
Florida Businessman Pleads Guilty to Money Laundering <br /> in Foreign Bribery SchemeRead the Press Release
The president of a Miami-Dade County, Fla.,-based company pleaded guilty today to engaging in monetary transactions involving property derived from a scheme to bribe former Haitian government officials, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney Jeffrey H. Sloman of the Southern District of Florida; and Daniel W. Auer, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation (IRS-CI) Miami Field Office.
According to the criminal information filed on Feb. 1, 2010, Jean Fourcand, 62, of Miami, was the president and director of Fourcand Enterprises Inc. In pleading guilty, Fourcand admitted that he received funds between November 2001 and August 2002 originating from U.S. telecommunications companies for the benefit of an official of the Republic of Haiti’s state-owned national telecommunications company, Telecommunications D’Haiti (Haiti Teleco). Fourcand admitted during his guilty plea that some of these funds were received from an intermediary company, J.D. Locator Services Inc. Juan Diaz, the president of J.D. Locator, pleaded guilty on May 15, 2009, to conspiracy to commit violations of the Foreign Corrupt Practices Act (FCPA) and money laundering. Fourcand also admitted that Robert Antoine, the former director of international relations at Haiti Teleco, was the recipient of the bribes.
According to court documents, various U.S. telecommunications companies sent money to Diaz who would then disperse the funds by issuing J.D. Locator checks made payable to Fourcand Enterprises. For example, Fourcand admitted that he received a check for $18,500 on Feb. 20, 2002, drawn on J.D. Locator Service’s bank account, which he deposited into an account in the name of Fourcand Enterprises. This check contained a false invoice number to make the payment appear to be for legitimate services when in fact the money was intended for Antoine. Fourcand admitted that he used these funds to engage in a real estate transaction that benefited Antoine.
The charged crime carries a maximum penalty of 10 years in prison and a fine of the greater of $250,000 or twice the value of the property involved in the transaction. Fourcand also agreed to forfeit $18,500 as part of his guilty plea.
Antoine was indicted on Dec. 4, 2009, for money laundering conspiracy and later arrested and expelled from Haiti to face the U.S. charges. Also charged on Dec. 4, 2009, for their alleged roles in the scheme were Joel Esquenazi, the former president, and Carlos Rodriguez, the former executive vice president of a U.S. telecommunications company, as well as Jean Rene Duperval, a former official at Haiti Teleco, and Duperval’s sister, Marguerite Grandison.
An indictment is merely an accusation, and defendants are presumed innocent until proven guilty beyond a reasonable doubt.
On April 27, 2009, Antonio Perez, the former controller of a U.S. telecommunications company, pleaded guilty to conspiring to commit FCPA violations and money laundering for his role in the payment of bribes to former officials of Haiti Teleco.
The Department of Justice is grateful to the government of Haiti for providing substantial assistance in gathering evidence during this investigation. In particular, Haiti’s financial intelligence unit, the Unité Centrale de Renseignements Financiers (UCREF), the Bureau des Affaires Financières et Economiques (BAFE), which is a specialized component of the Haitian National Police, and the Ministry of Justice and Public Security provided significant cooperation and coordination in this ongoing investigation.
The case was prosecuted by Trial Attorney Kevin Gerrity of the Criminal Division’s Asset Forfeiture and Money Laundering Section, Trial Attorney Nicola J. Mrazek of the Criminal Division’s Fraud Section, and Assistant U.S. Attorney Aurora Fagan of the U.S. Attorney’s Office for the Southern District of Florida. The Criminal Division’s Office of International Affairs also provided assistance in this matter. The case was investigated by the IRS-CI Miami Field Office.
Attorney General Holder Announces Creation of Tribal Nations Leadership CouncilRead the Press Release
Attorney General Eric Holder today announced the creation of the Justice Department’s Tribal Nations Leadership Council (TNLC), a group of tribal leaders from around the country that will advise him on issues critical to tribal communities. The TNLC marks the first time a council composed of tribal leaders selected by tribal governments will advise Justice Department leadership on an ongoing basis. The creation of the TNLC fulfills a pledge made by Attorney General Holder at the department’s Tribal Nations Listening Session in October 2009.
"The Tribal Nations Leadership Council will play an important role in continuing the critical dialogue between the department and tribal governments on matters including public safety," said Attorney General Holder. "The creation of the council has been a priority for me since my visit with tribal leaders last year and I believe it is a critical step in our work to improve coordination and collaboration with tribal communities."
The TNLC, which will meet twice a year, will be composed of one tribal leader from each of the twelve regions of the Bureau of Indian Affairs. The TNLC member for each region will be chosen by the tribes of that region. Solicitations are being distributed to all federally-recognized tribes seeking their region’s delegate.
Today’s announcement is another step in the Justice Department’s ongoing initiative to increase engagement, coordination and action on public safety in tribal communities. This effort is driven largely by input gathered from the department’s own 2009 Tribal Nations Listening Session, the department’s annual tribal consultation on violence against women, and from written comments submitted by tribal governments, groups and organizations to the Justice Department.
Tribal Nations Leadership Council Charter
U.S. Army Contracting Official Charged with Bribery and Related Crimes in Off-Post Housing SchemeRead the Press Release
A U.S. Army contracting official was charged today with bribery and unlawful salary supplementation in connection with two schemes to solicit more than $30,000 in bribes from an Egyptian businessman in Kuwait, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division and U.S. Attorney Neil H. MacBride of the Eastern District of Virginia.
William Rondell Collins, 46, of Bartlett, Tenn., was charged today in a four-count indictment, returned by a federal grand jury in the Eastern District of Virginia, with two counts of soliciting and accepting bribes as a public official and two counts of unlawful salary supplementation from a source other than the U.S. government.
According to the indictment, the U.S. Army Area Support Group-Kuwait (ASG-KU) is responsible for maintaining Camp Arifjan, a U.S. military installation providing support for operations in Afghanistan, Iraq and other locations in the Southwest Asian Theater. As part of those responsibilities, the ASG-KU maintains an off-post housing office in downtown Kuwait City, which procures, leases and supervises off-post housing for government employees and military service members stationed at Camp Arifjan. According to the indictment, Collins was employed in the ASG-KU’s off-post housing office as a housing specialist responsible for supervising private contractors and procuring off-post apartment rentals.
The indictment alleges that, in January 2009, a company owned by an Egyptian businessman was awarded a fixed-price U.S. government contract to provide maintenance services for off-post housing managed by Collins and the ASG-KU off-post housing office.
According to the indictment, in July 2009, Collins allegedly solicited a monthly fee of approximately $1,400 from the Egyptian businessman in return for Collins’s agreement to provide favorable and preferential treatment and advice to the Egyptian businessman’s company on the performance and renewal of the contract. Collins also allegedly agreed to conceal from his supervisors the existence and nature of the monthly fee arrangement. According to the indictment, Collins allegedly accepted five $1,400 payments from the Egyptian businessman between July and December 2009.
The indictment also alleges that, between July and December 2009, Collins solicited a monthly payment of approximately $962 from the Egyptian businessman in exchange for drafting and submitting an inflated off-post apartment lease to the United States for approval. According to the indictment, Collins allegedly received approximately $5,775 from the Egyptian businessman on Dec. 13, 2009, representing a six-month advance on the scheme.
The bribery counts each carry a maximum penalty of 15 years in prison and a fine of the greater of $250,000 or twice the value gained or lost. The unlawful salary supplementation counts each carry a maximum penalty of five years in prison and a fine of the greater of $250,000 or twice the value gained or lost.
The case is being prosecuted by Special Assistant U.S. Attorney Steve A. Linick, Deputy Chief of the Criminal Division’s Fraud Section; and Fraud Section Trial Attorneys James J. Graham and Ryan S. Faulconer. The investigation is being conducted by the FBI, the U.S. Army Criminal Investigative Division, the Defense Criminal Investigative Service and members of the National Procurement Fraud Task Force and the International Contract Corruption Task Force (ICCTF).
The National Procurement Fraud Task Force, created in October 2006 by the Department of Justice, was designed to promote the early detection, identification, prevention, and prosecution of procurement fraud associated with the increase in government contracting activity for national security and other government programs. The ICCTF is a joint law enforcement agency task force that seeks to detect, investigate, and dismantle corruption and contract fraud resulting from U.S. Overseas Contingency Operations, including in Kuwait, Afghanistan, and Iraq.
The charges contained in the indictment are merely accusations and the defendant is presumed innocent until proven guilty at trial beyond a reasonable doubt.
Two Former Executives of Video Relay Services Company Plead Guilty to Defrauding FCC ProgramRead the Press Release
Irma Azrelyant and Joshua Finkle, the former co-owners of New York and New Jersey-based Deaf and Hard of Hearing Interpreting Services Inc. (DHIS), pleaded guilty today to engaging in a conspiracy to defraud the Federal Communications Commission’s (FCC) Video Relay Service (VRS) program of more than $7 million, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division.
Today, Azrelyant, 47, and Finkle, 41, pleaded guilty before U.S. District Court Judge Joel A. Pisano in Trenton, N.J., to conspiracy to commit mail fraud. Azrelyant and Finkle were indicted on Oct. 29, 2009, along with DHIS assistant bookkeeper and video interpreter coordinator Oksana Strusa, as well as video interpreters Natan Zfati, Alfia Iskandarova and Hennadii Holovkin.
In pleading guilty, Azrelyant and Finkle admitted that beginning in approximately October 2007 and continuing through approximately July 2009, they conspired with others to pay individuals to make fraudulent VRS phone calls that were processed through DHIS, and that were billed to the FCC through VRS provider Viable Communications Inc. (Viable). According to the guilty pleas, Azrelyant and Finkle made VRS calls to prerecorded messages and other numbers for the sole purpose of generating VRS minutes and also coordinated with others to generate illegitimate VRS minutes that would be billed to the FCC. Azrelyant and Finkle also admitted to processing illegitimate VRS calls that were routed to DHIS by Viable.
According to the indictment, VRS is an online video translation service that allows people with hearing disabilities to communicate with hearing individuals through the use of interpreters and web cameras. A person with a hearing disability who wants to communicate with a hearing person can do so by contacting a VRS provider through an audio and video Internet connection. The VRS provider, in turn, employs a video interpreter to view and interpret the hearing disabled person’s signed conversation and relay the signed conversation orally to a hearing person. VRS is funded by fees assessed by telecommunications providers to telephone customers, and is provided at no cost to the VRS user.
According to information contained in the plea documents, Azrelyant and Finkle admitted that their role in defrauding the FCC’s VRS program led to a total of between $7 million and $20 million in fraudulent billing to the program. At sentencing, Azrelyant and Finkle each face a maximum sentence of 20 years in prison, a fine of $250,000, as well as mandatory restitution and forfeiture. Sentencing is set for June 29, 2010 at 10 a.m.
Co-defendants Strusa, Zfati, Iskandarova and Holovkin are scheduled to stand trial on May 24, 2010, on the charges in the indictment. An indictment is merely an accusation, and defendants are presumed innocent until proven guilty at trial beyond a reasonable doubt.
In addition to the indictment charging Azrelyant, Finkle, Strusa, Zfati, Iskandarova and Holovkin, five indictments were unsealed on Nov. 19, 2009, charging an additional 20 people with engaging in a scheme to steal millions of dollars from the FCC’s VRS program. In all, the indictments charge owners and employees of the following six companies with engaging in a scheme to defraud the FCC’s VRS program:
- Viable Communications Inc., of Rockville, Md.;
- Master Communications LLC, of Las Vegas;
- KL Communications LLC, of Phoenix;
- Mascom LLC of Austin, Texas;
- Innovative Communication Services for the Deaf Corp. (ICSD), of Miami Lakes, Fla.; and
- Deaf Studio 29 of Huntington Beach, Calif.
These cases are being prosecuted by Assistant Chief Hank Bond Walther and Trial Attorney Brigham Cannon of the Criminal Division’s Fraud Section. The cases are being investigated by FBI’s Washington Field Office, the U.S. Postal Inspection Service’s Department of Justice Fraud Team and the FCC Office of Inspector General.
Statement of the Department of Justice Antitrust Division on Its Decision to Close Its Investigation of the Internet Search and Paid Search Advertising Agreement Between Microsoft Corporation and Yahoo! Inc.Read the Press Release
WASHINGTON — The Department of Justice’s Antitrust Division issued the following statement today after announcing the closing of its investigation into the proposed Internet search and paid search advertising agreement between Microsoft Corporation and Yahoo! Inc.:
"The Antitrust Division obtained extensive information from Microsoft, Yahoo! and a wide range of market participants. Experience and expertise developed during our 2008 investigation of the proposed Google/Yahoo! search advertising agreement also informed our analysis. After a thorough review of the evidence, the division has determined that the proposed transaction is not likely to substantially lessen competition in the United States, and therefore is not likely to harm the users of Internet search, paid search advertisers, Internet publishers, or distributors of search and paid search advertising technology. In addition, the proposed agreement likely will enable more rapid improvements in the performance of Microsoft’s search and paid search advertising technology than would occur if Microsoft and Yahoo! were to remain separate.
"The proposed transaction will combine the back-end search and paid search advertising technology of both parties. U.S. market participants express support for the transaction and believe that combining the parties’ technology would be likely to increase competition by creating a more viable competitive alternative to Google, the firm that now dominates these markets. Most customers view Google as posing the most significant competitive constraint on both Microsoft and Yahoo!, and the competitive focus of both Microsoft and Yahoo! is predominately on Google and not on each other.
"The search and paid search advertising industry is characterized by an unusual relationship between scale and competitive performance. The transaction will enhance Microsoft’s competitive performance because it will have access to a larger set of queries, which should accelerate the automated learning of Microsoft’s search and paid search algorithms and enhance Microsoft’s ability to serve more relevant search results and paid search listings, particularly with respect to rare or "tail" queries. The increased queries received by the combined operation will further provide Microsoft with a much larger pool of data than it currently has or is likely to obtain without this transaction. This larger data pool may enable more effective testing and thus more rapid innovation of potential new search-related products, changes in the presentation of search results and paid search listings, other changes in the user interface, and changes in the search or paid search algorithms. This enhanced performance, if realized, should exert correspondingly greater competitive pressure in the marketplace.
"Although this particular transaction is not likely to cause harm, the department will continue to be vigilant in our enforcement of the antitrust laws in the search and paid search advertising industry.
"The offices of the attorneys general from California and Washington actively participated in the division’s investigation of the proposed transaction."
The division provides this statement under its policy of issuing statements concerning the closing of investigations in appropriate cases. This statement is limited by the division’s obligation to protect the confidentiality of certain information obtained in its investigations. As in most of its investigations, the division’s evaluation has been highly fact-specific, and many of the relevant underlying facts are not public. Consequently, readers should not draw overly broad conclusions regarding how the division is likely in the future to analyze other collaborations or activities, or transactions involving particular firms. Enforcement decisions are made on a case-by-case basis, and the analysis and conclusions discussed in this statement do not bind the division in any future enforcement actions. Guidance on the division’s policy regarding closing statements is available at: http://www.usdoj.gov/atr/public/guidelines/201888.htm.
Justice Department Signs a Settlement Agreement with North Carolina Company to Ensure Fair Treatment in the WorkplaceRead the Press Release
WASHINGTON – The Justice Department today announced a settlement agreement with Sunlight Inc., doing business as Beauty Smart, of Durham, N.C., to resolve allegations of a pattern or practice of discrimination in recruitment and hiring on the basis of national origin. The agreement was reached under the anti-discrimination provision of the Immigration and Nationality Act (INA), which prohibits workplace discrimination on the basis of citizenship status and national origin.
Under the agreement, the employer must eliminate preferences for workers of Korean origin, ensure equal treatment regardless of national origin in its recruitment and hiring practices, and maintain applicant and other records that will permit the Justice Department to monitor the employer’s compliance with the agreement. In addition, the employer will pay $2,000 in lost wages to an applicant who was allegedly denied the opportunity to apply for a job because of her national origin, as well as a $500 civil penalty to the United States.
"Earning a living is key to achieving the American dream, and all individuals deserve to know they will be free of national origin discrimination as they pursue employment," said Thomas E. Perez, Assistant Attorney General for Civil Rights. "The Division is committed to educating employers about how to comply with the anti-discrimination provision but, when the law is broken, we will take decisive action to enforce it."
The anti-discrimination provision of the INA prohibits citizenship status and national origin discrimination in recruitment, hiring and firing; discriminatory documentary practices during the employment eligibility verification (Form I-9) process; and retaliation for filing a charge, assisting in an investigation, or asserting rights under the anti-discrimination provision. The Office of Special Counsel for Immigration Related Unfair Employment Practices (OSC) in the Department’s Civil Rights Division enforces the anti-discrimination provision. Workers who believe they have been the victim of citizenship status or national origin discrimination should contact OSC on its worker hotline at 1-800-255-7688. Employers seeking guidance on how to avoid discriminatory policies and practices may contact OSC at 1-800-255-8155.
Justice Department Settles with Ohio Child Care Centerto End Discrimination Against Children with AsthmaRead the Press Release
WASHINGTON – The Justice Department today announced a settlement agreement with The Children’s House Inc. of Broadview Heights, Ohio, a suburb of Cleveland, to provide services for children with asthma as required by the Americans with Disabilities Act (ADA).
The Children’s House has agreed to provide required medical assistance to children with asthma whose families seek child care and wish to enroll their children at the center. Previously, the center’s policies required the parents to go to the center to provide asthma treatment to their children, miss routine medication treatments, or forego enrolling their children there.
Parents of a child with asthma complained to the department about a refusal to provide a reasonable modification to The Children’s House’s medication policy that prohibited staff from assisting with asthma medication. The failure to assist with providing the asthma medication at the times instructed by the child’s doctor prevented the child’s attendance and participation in the program.
"Respiratory disabilities should not keep young children from the opportunity to share in the invaluable early childhood learning opportunities offered at quality child care centers," said Assistant Attorney General Thomas E. Perez. "The ADA makes it illegal to discriminate against children with disabilities and their families. This agreement ensures that parents and children will not be denied quality child care based upon their disability."
Under this agreement, The Children’s House Inc. will:
- Ensure that all children with disabilities have an equal opportunity to attend The Children’s House Inc., and to participate in all programs, services or activities provided by The Children’s House Inc.;
- Evaluate, on a case by case basis, the individual needs of children with disabilities wishing to attend The Children’s House Inc. and make reasonable modifications to its policies in order to accommodate children with disabilities;
- Adopt a new medication policy for the administration of asthma medication;
- Provide training about the ADA to the staff at The Children’s House Inc. within sixty days of the effective date of this agreement.
People interested in finding out more about the ADA or the agreement can call the Justice Department's toll-free ADA Information Line at (800) 514-0301 or (800) 514-0383 (TDD), or access its ADA Web site at www.ada.gov.
Federal Grand Jury Indicts New Jersey Resident for Violating the Endangered Species Act and Making False StatementsRead the Press Release
WASHINGTON – James R. Durr, 55, of Wrightstown, N.J., was indicted by a federal grand jury in Camden, N.J., for violating the Endangered Species Act by taking the federally protected bog turtle and for making false statements to authorities, the Justice Department announced today.
Bog turtles, scientific name Clemmys muhlenbergii, are native to New Jersey and have been designated a threatened species under the Endangered Species Act since 1997, due in large part to habitat loss. Bog turtles reside in part in holes in the ground.
The two count indictment returned yesterday alleges that Durr, who owned and operated at least three properties in New Jersey, was engaged in the business of growing plants and flowers for sale to the florist trade. Specifically, the indictment alleges that in December 2005, Durr acquired a property in North Hanover Township in Burlington County, N.J., that he called Turtle Creek Farm.
The property allegedly included a free flowing perennial stream called Turtle Creek that ran into and out of a wetland area on the property that was documented as occupied habitat for threatened bog turtles. The indictment further alleges that when Durr bought the land, he was informed of the presence and location of the bog turtles and knew that work had been done to enhance the habitat for the bog turtles using funds from a federal Wildlife Habitat Incentives Program. The program provides money to farmers to undertake wildlife habitat improvements on their farms.
Shortly after buying the farm, Durr allegedly began to clear a buffer of trees that framed each side of one portion of Turtle Creek. Durr allegedly was advised while clearing was ongoing that there was concern that the tree removal was going to effect the listed bog turtles down stream due to ensuing deposits of silt and sediment. As a result of Durr’s activities, by November 2006, approximately eight to 12 inches of silt allegedly had eroded from the cleared stream banks and adjoining farm fields and were deposited in core bog turtle habitat. By the following June, approximately two feet of coarse sand and fine gravel had been deposited in places in the stream channel allegedly as a result of Durr’s activities.
Consequently, the indictment alleges that between late December 2005 and the present, Durr knowingly and unlawfully took at least one bog turtle in violation of the Endangered Species Act.
The Endangered Species Act and implementing federal regulations prohibit the taking, without a permit, of any threatened species. "Take" means to harass or harm, among other things. "Harass" means to intentionally or negligently act or fail to act in a way that creates the likelihood of injury to wildlife by significantly disrupting normal behavioral patterns which include breeding, feeding or sheltering. "Harm" means an act which actually kills or injures wildlife including through significant habitat modification or degradation where it actually kills or injures wildlife.
An indictment is merely an accusation, and a defendant is presumed innocent unless and until proven guilty in a court of law.
The maximum penalty for a violation of the Endangered Species Act is up to six months in prison and a $25,000 fine. The maximum penalty for making a false statement is up to five years in prison and a $250,000 fine.
The case was investigated by the U.S. Fish and Wildlife Service and is being prosecuted by the Justice Department’s Environmental Crimes Section.
Department of Justice and USDA Announce Historic Settlement in Lawsuit by Black Farmers Claiming Discrimination by USDARead the Press Release
Attorney General Eric Holder and Agriculture Secretary Tom Vilsack today announced the successful resolution of the longstanding litigation known as Pigford II. The settlement agreement reached today, which is contingent on appropriation by Congress, will provide a total of $1.25 billion to African American farmers who alleged that they suffered racial discrimination in USDA farm loan programs. The settlement sets up a non-judicial claims process through which individual farmers may demonstrate their entitlement to cash damages awards and debt relief.
Below is a statement from Attorney General Eric Holder:
"Bringing this litigation to a close has been a priority for this Administration. With the settlement announced today, USDA and the African American farmers who brought this litigation can move on to focus on their future. The plaintiffs can move forward and have their claims heard - with the federal government standing not as an adversary, but as a partner."Below is a statement from Agriculture Secretary Tom Vilsack:
"USDA has made it a top priority to ensure all farmers are treated fairly and equally. We have worked hard to address USDA’s checkered past so we can get to the business of helping farmers succeed. The agreement reached today is an important milestone in putting these discriminatory claims behind us for good and in achieving finality for this group of farmers with longstanding grievances.
"Because this Administration firmly believed that a full and final class-wide settlement was possible, the Administration requested $1.15 billion in the 2010 budget, on top of the $100 million already provided by Congress, to facilitate a settlement. I now urge Congress to provide the funding necessary to ensure that that these farmers and USDA can close this sad chapter and move on.
"As I testified before Congress during my confirmation hearings last year, the USDA under the Obama Administration has made civil rights a top priority, which is why we are working to implement a comprehensive program to take definitive action to move USDA into a new era as a model employer and premier service provider."
In 1999, the USDA entered into a consent agreement with black farmers in which the agency agreed to pay farmers for past discrimination in lending and other USDA programs. Thousands of claims have been adjudicated, but thousands of other claims were not considered on their merits because the affected farmers submitted their claims after the settlement claims deadline.
To address the remaining claims, Congress provided these farmers another avenue for restitution in the 2008 Farm Bill by providing a right to file a claim in federal court. The total amount offered by the federal government in the agreement announced today, $1.25 billion, includes the $100 million appropriated by Congress in Section 14012 of the Farm Bill.
Last May, President Obama announced his plans to include settlement funds for black farmers in the FY 2010 budget to bring closure to their long-standing litigation against the U.S. Department of Agriculture.
The settlement is contingent on Congress appropriating the $1.15 billion that the President requested. Following the appropriation, class members may pursue their individual claims through a non-judicial claims process in front of a neutral arbitrator. Claimants who establish their credit-related claims will be entitled to receive up to $50,000 and debt relief. A separate track may provide actual damages of up to $250,000 through a more rigorous process. The actual value of awards may be reduced based on the total amount of funds made available and the number of successful claims.
A moratorium on foreclosures of most claimants’ farms will be in place until after claimants have gone through the claims process or the Secretary is notified that a claim has been denied. The claims process agreed to by the parties may provide payments to successful claimants beginning in the middle of 2011.
Ensuring equitable treatment of all USDA employees and clients is a top priority for Secretary Vilsack. He has issued a clear policy and a comprehensive plan to improve USDA’s record on Civil Rights and made it clear to all employees that discrimination of any form will not be tolerated at USDA.
Some of the actions taken to transform USDA into a new era as a model employer and premier service provider include:
- USDA revamped the program civil rights complaints system to improve the complaint process. For the first time since 1997, USDA now has investigators on staff to do the field work needed to investigate complaints.
- After a competitive bidding process, USDA has hired outside, private firm to do an independent external analysis of the department’s service delivery programs to identify problem areas and fixes. The firm will consider programs at USDA to identify barriers to equal and fair access for all USDA customers.
- In April, USDA suspended all foreclosures in the Farm Service Agency’s loan program for 90 days to provide an opportunity to review loans that could have been related to discriminatory conduct.
- USDA’s Office of the Assistant Secretary for Civil Rights has initiated a series of unprecedented civil rights trainings for USDA field leadership teams and required trainings for all political appointees and senior departmental leadership.
To try and resolve internal disputes and conflicts early and to enhance the use of alternative dispute resolution at USDA, the department is also establishing a congressionally mandated Ombudsman office to improve dispute resolution efforts.
Alleged Mexican Drug Cartel Leader Extradited from Mexico to United States to Face Federal Drug-trafficking ChargesRead the Press Release
An allegedly high-ranking leader of one of Mexico’s largest drug cartels, whose father allegedly heads a faction of the Sinaloa Cartel and is among Mexico’s most powerful drug kingpins, was extradited today from Mexico to face federal narcotics trafficking conspiracy charges in the United States. Jesus Vicente Zambada-Niebla is believed to be one of the most significant Mexican drug defendants extradited from Mexico to the United States since Osiel Cardenas Guillen, the accused leader of the notorious Gulf Cartel, was extradited in 2007. Today’s development is a result of the continuing close cooperation between the United States and Mexico to investigate and prosecute the leaders of international drug-trafficking cartels.
Zambada-Niebla, 34, who spent approximately 11 months in custody in Mexico, arrived in Chicago after Mexican authorities surrendered him earlier today to U.S. law enforcement agents. He is scheduled to be arraigned Tuesday, February 23 at 11:00 a.m. CST before U.S. District Judge Ruben Castillo in U.S. District Court in Chicago.
Zambada-Niebla was among three dozen defendants who were indicted in Chicago in August 2009 as part of the largest international narcotics conspiracy case ever prosecuted in the Northern District of Illinois. He is also under indictment in a separate case pending in U.S. District Court for the District of Columbia, which is being prosecuted by the Criminal Division’s Narcotic and Dangerous Drug Section. Zambada-Niebla will first face the charges against him in Chicago and then he will face charges in the District of Columbia.
"Through close and sustained cooperation with our partners in Mexico, we are bringing alleged cartel leaders to justice - on both sides of the border," said Assistant Attorney General Lanny A. Breuer of the Criminal Division. "In 2009, Mexico extradited the most defendants ever to the United States in one year, representing our shared commitment and responsibility for disrupting and dismantling these violent and corrosive drug-trafficking organizations."
"We praise Mexico for continuing to extradite Mexican cartel leaders to the United States," said Michele M. Leonhart, Acting Administrator of the Drug Enforcement Administration. "The Sinaloa Cartel has smuggled multi-ton quantities of cocaine and heroin into our country for decades, using intimidation and murder to build and protect their criminal empire. This extradition clearly illustrates the will of the Mexican Government to continue a strong partnership with DEA to target, disrupt and dismantle the powerful Mexican cartels."
"This is an extremely significant development in the United States’ effort to prosecute international drug importation conspiracies wherever the defendants may be operating," said Patrick J. Fitzgerald, U.S. Attorney for the Northern District of Illinois. "The indictment alleges that this organization imported many tons of cocaine and quantities of heroin into the United States, and that this defendant played a central role as a high-ranking member of the alleged conspiracy."
Zambada-Niebla was indicted in Chicago together with Joaquin "el Chapo" Guzman-Loera and Zambada-Niebla’s father, Ismael "el Mayo" Zambada-Garcia, both of whom allegedly directed factions of the Sinaloa Cartel. These factions allegedly coordinated narcotics trafficking with each other, with other Sinaloa Cartel factions, and with other affiliated cartels in an alliance commonly known as "the Federation." The Chicago indictment charges crimes that allegedly occurred between 2005 and 2008, while Guzman-Loera, Zambada-Garcia and Arturo Beltran-Leyva were indicted separately in Brooklyn, N.Y., for alleged drug-trafficking activities between 1990 and 2005. Beltran-Leyva was killed in a stand-off with Mexican authorities in December 2009 in Mexico.
The Chicago indictment charges that Zambada-Garcia and Guzman-Loera, together with seven other high-ranking associates, including their respective sons, Zambada-Niebla and Alfredo Guzman-Salazar, coordinated their narcotics trafficking activities to import multi-ton quantities of cocaine from Central and South American countries, including Colombia and Panama, to the interior of Mexico, using various means of transportation. Then, they allegedly smuggled hundreds of kilograms of cocaine at a time, as well as multi-kilograms of heroin, across the U.S. border to Chicago and throughout the United States.
According to the indictment, Guzman-Loera, Zambada-Garcia, and Zambada-Niebla sought to obtain weapons in the United States and discussed using violence against American and/or Mexican government buildings in retaliation for each country’s enforcement of its narcotics laws and to perpetuate their narcotics trafficking activities.
The District of Columbia indictment charges Zambada-Niebla and his co-defendants with conspiracy to import and distribute cocaine from 1992 until Jan. 28, 2003. According to the indictment, the Zambada-Garcia organization received multi-ton quantities of Colombian cocaine through maritime shipping vessels and then used various means, including planes, trucks and cars, to transport the cocaine across the U.S.-Mexico border. The indictment specifically alleges that the Zambada-Garcia organization distributed cocaine to Los Angeles, Chicago and New York, including 1,003 kilograms of cocaine to the New York/New Jersey area, 1,770 kilograms of cocaine to the Chicago area, and 2-3 kilograms of cocaine to the Los Angeles area. The total estimated value of this cocaine, all of which was allegedly distributed between August 2001 and June 2002, is $47.5 million. In all, the District of Columbia indictment alleges that Zambada-Niebla and his co-defendants transported approximately 12,500 kilograms of cocaine from Colombia through Mexico and into the United States.
The DEA led the investigation in Chicago, together with the Internal Revenue Service Criminal Investigation Division and the Chicago Police Department. Also assisting in the overall investigation were the National Drug Intelligence Center (NDIC); the High-Intensity Drug Trafficking Area (HIDTA) task force; the U.S. Attorney’s Office in Milwaukee and the Milwaukee Police Department; the U.S. Attorney’s Office for the Central District of Illinois; the Chicago and Peoria offices of the FBI; the Chicago offices of the Bureau of Alcohol, Tobacco, Firearms and Explosives, U.S. Immigration and Customs Enforcement, the U.S. Marshals Service, the Cook County Sheriff’s Department and other state and local law enforcement agencies. The investigation was coordinated by the U.S. Attorney’s Office in Chicago, and with the assistance of agents and analysts of the Special Operations Division (SOD), and attorneys from the Criminal Division’s Narcotic and Dangerous Drug Section (NDDS), which is prosecuting related cases. The Chicago case is being prosecuted by Assistant U.S. Attorneys Thomas Shakeshaft and Michael Ferrara.
The investigation in the District of Columbia was led by SOD. The District of Columbia case was originally handled by former NDDS Trial Attorney Patrick Hearn and is now being prosecuted by NDDS Trial Attorneys Mary Mogavero and Glenn Alexander.
The Criminal Division’s Office of International Affairs provided significant assistance with Zambada-Niebla’s extradition.
The department recognizes and appreciates the significant assistance provided by the Government of Mexico and Mexican law enforcement partners in this extradition.
The charges contained in the indictment are merely accusations and the defendant is presumed innocent until proven guilty.
West Palm Beach, Florida, Resident Charged in Multi-Million Dollar Cramming SchemeRead the Press Release
Willoughby Farr, 46, of West Palm Beach, Fla., has been charged with perpetrating what is known as a cramming scheme, which was designed to place charges on consumers’ telephone bills for collect calls that were not made, the Justice Department and the U.S. Postal Inspector’s Miami Field Office announced today.
According to the just unsealed indictment, from April 2003 to December 2005, Farr used three West Palm Beach companies – Nationwide Connections Inc., Access One Communications Inc. and Connect One Communications Inc.– to defraud consumers. Through these companies, Farr allegedly arranged for local telephone companies to falsely bill consumers for collect calls. Because the charges typically appeared on the last page of consumers’ telephone bills, many paid the charges. The indictment charges Farr with six counts of mail fraud and two counts of wire fraud. Each count carries a maximum statutory term of 20 years in prison, a possible fine and restitution.
Farr was in prison at the time he is alleged to have committed the scheme charged in the indictment. According to the indictment, he therefore hid his ownership of the firms. He also hid his ownership because other firms had cut off his ability to bill for calls due to consumer complaints and state regulators had sued him for illegitimate billing.
“This type of scheme steals from hundreds of thousands of consumers who inadvertently pay toll charges that appear on their phone bills without authorization,” said Assistant Attorney General Tony West. “We will not hesitate to prosecute financial crimes of this nature, but this case stresses the need for consumers to carefully review their telephone bills to make sure fraudulent charges are not included.”
In February 2006, the Federal Trade Commission (FTC) brought a cramming suit against several firms and individuals, including Farr. That suit resulted in a $34,547,140 judgment against Farr.
“We wish to thank the FTC for the civil investigation it conducted, and we commended the efforts of the Postal Inspection Service for its work on the criminal investigation,” said Jeffrey H. Sloman, U.S. Attorney for the Southern District of Florida. “This case demonstrates the effectiveness of cooperative law enforcement efforts which can put an end to fraudulent schemes, and then bring wrongdoers to justice.”
“This investigation demonstrates the collective tenacity of our U. S. Attorney, the Federal Trade Commission and the Postal Inspection Service to protect the American consumer,” said Inspector in Charge Henry Gutierrez. “The Postal Inspection Service is committed to ensuring that the U. S. Mails are never used to defraud.”
An indictment is only an accusation, and the defendants are presumed innocent unless and until proven guilty.
Home Health Agency Owner Pleads Guilty in Connection with Detroit Fraud SchemeRead the Press Release
Detroit-area resident Muhammad Shahab pleaded guilty today for his role in organizing a Detroit-area home health care fraud scheme, 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.
Shahab, 50, pleaded guilty today to one count of conspiracy to commit health care fraud before U.S. District Judge Denise Page Hood of the Eastern District of Michigan. At sentencing, scheduled for June 17, 2010, Shahab faces a maximum penalty of 10 years in prison and a $250,000 fine.
According to information contained in plea documents, Shahab helped finance and establish two Detroit-area home health agencies, Patient Choice Home Healthcare Inc. (Patient Choice), and All American Home Care Inc. (All American). Shahab admitted that while operating or being associated with both home health agencies, he and his co-conspirators billed Medicare for home health visits that never occurred.
Shahab admitted that he and his co-conspirators recruited and paid cash kickbacks and other inducements to Medicare beneficiaries, in exchange for the beneficiaries’ Medicare numbers and signatures on documents falsely indicating that they had visited Patient Choice and All American for the purpose of receiving physical or occupational therapy. Shahab admitted that a large number of the beneficiaries were not homebound nor did they need any physical therapy services.
Shahab also admitted to securing physician referrals for medically unnecessary home health services through the payment of kickbacks to physicians or individuals associated with physicians. Shahab employed several physical therapists and physical therapy assistants to sign medical documentation necessary to begin billing for home health care services, including initial payments and payments for each visit to a Medicare beneficiary. Shahab admitted that he knew the physical therapists and physical therapy assistants were not actually conducting a large majority of the visits or treating a large majority of the patients. Shahab admitted to billing and receiving payment from Medicare for the services not rendered or medically unnecessary services.
Between approximately August 2007 and October 2009, Shahab and his co-conspirators at Patient Choice and All American submitted approximately $10,856,130 in claims to the Medicare program for physical and occupational therapy services that were never rendered or were medically unnecessary.
This case was prosecuted by Senior Trial Attorney John K. Neal and Trial Attorney Gejaa T. Gobena of the Criminal Division’s Fraud Section. The case was investigated by the FBI and HHS-OIG. The case was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Michigan.
Since their inception in March 2007, Strike Force operations in seven districts have obtained indictments of more than 500 individuals who collectively have falsely billed the Medicare program for more than $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