District Not Recorded
The source did not name an office we could identify. These records remain unassigned rather than guessed.
Three Detroit-Area Residents Plead Guilty to Health Care FraudRead the Press Release
WASHINGTON – Jackson, Mich., resident Terrence Hicks and Detroit residents Muhammed Al Mahdi and John Saunders pleaded guilty in U.S. District Court in the Eastern District of Michigan this week for their roles in a $4.2 million Medicare fraud scheme, Assistant Attorney General Lanny A. Breuer of the Criminal Division, Acting U.S. Attorney Terrence Berg of the Eastern District of Michigan, Special Agent in Charge Andrew G. Arena of the FBI’s Detroit Field Office and Daniel R. Levinson, Inspector General of the Department of Health and Human Services (HHS) announced today.
Hicks, 42, and Saunders, 70, pleaded guilty to one count of conspiracy to commit health care fraud before Chief Judge Gerald E. Rosen of the U.S. District Court in Detroit today; Al Mahdi, 63, pleaded guilty on Dec. 15, 2009, to the same charge before Chief Judge Rosen. All three defendants admitted that they participated in a conspiracy to defraud Medicare, operating out a Southfield, Mich., clinic called Sacred Hope Center (Sacred Hope). The clinic purported to specialize in providing injection and infusion therapy services to Medicare patients.
Specifically, Hicks admitted that beginning in September 2006, he began working as a patient recruiter and driver at Sacred Hope. Sacred Hope was owned by defendant’s co-conspirators, Jose Rosario and Daisy Martinez, who pleaded guilty in the same case in August and September 2009, respectively. According to court documents, Sacred Hope routinely billed the Medicare program for medications and services that were medically unnecessary and, in many instances, never provided. Hicks admitted to being aware that the purpose of the clinic was to defraud the Medicare program, not to provide legitimate health care to patients.
According to court documents, Medicare beneficiaries were not referred to Sacred Hope by their primary care physicians, or for any other legitimate medical purpose, but rather were recruited to come to the clinic through the payment of kickbacks. Hicks, along with co-conspirator Wayne Smith, who pleaded guilty on Dec. 10, 2009, was responsible for driving into Detroit neighborhoods and recruiting Medicare beneficiaries by offering them cash and prescriptions for controlled substances. In exchange for their kickbacks, the Medicare beneficiaries would visit the clinic, typically driven there by Hicks and/or Smith, and sign documents indicating that they had received the services billed to Medicare. Hicks and/or Smith would obtain cash on a daily basis from co-conspirators for the purpose of paying the beneficiaries cash kickbacks. Hicks or Smith would then distribute this cash to the Medicare beneficiaries.
In their pleas, Al Mahdi and Saunders admitted that they were Medicare beneficiaries who permitted their Medicare numbers to be used for fraudulent billings at Sacred Hope. Specifically, they admitted being driven by Hicks and Smith to Sacred Hope, and signing forms indicating that they had received injection and/or infusion therapy. They admitted that in return for signing these forms, they were paid cash kickbacks of approximately $50 per visit.
Both defendants admitted that when visiting Sacred Hope, they were repeatedly injected with unknown substances, the purposes of which were never explained to them. Al Mahdi and Saunders were aware that the clinic was making notations in medical charts for medications that were never provided to them. Both Al Mahdi and Saunders admitted that they did not visit Sacred Hope for the purpose of receiving legitimate medical care. Rather, they visited Sacred Hope for the sole purpose of receiving kickbacks, and knowingly allowed Medicare to be billed for the services supposedly provided to them there.
The case is being prosecuted by Senior Trial Attorney John K. Neal and Trial Attorney Benjamin D. Singer of the Criminal Division’s Fraud Section and by Special Assistant U.S. Attorney Thomas W. Beimers of the Eastern District of Michigan. The FBI and the HHS Office of Inspector General (HHS-OIG) conducted the investigation.The case was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and U.S. Attorney’s Office for the Eastern District of Michigan. Since the inception of Strike Force operations in March 2007 – Miami (Phase One), Los Angeles (Phase Two), Detroit (Phase Three), Houston (Phase Four) and Brooklyn (Phase Five) – the Strike Force has obtained indictments of more than 460 individuals and organizations that collectively have falsely billed the Medicare program for more than one billion dollars. 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 HEAT team, go to: www.stopmedicarefraud.govTexas Man Sentenced to 292 Months in Prison for Advertising <br /> and Possessing Child PornographyRead the Press Release
Mark Edwin Cairnes, 51, was sentenced today to 292 months in prison and lifetime supervised release following his prison term for advertising and possessing child pornography.
Cairnes, of Jonestown, Texas, pleaded guilty on Sept. 25, 2009, before U.S. District Judge Sam Sparks in Austin, Texas, to one count of advertising child pornography and one count of possession of child pornography. As part of his plea agreement, Cairnes admitted to being a member of an Internet-based bulletin board group dedicated to the trading of child pornography. The group could only be accessed by using a unique username and password. The groups had very detailed rules for behavior, including requiring all members to post only pornographic images or videos depicting minors under the age of 18. Members were also required to post their images or videos in pre-established categories based on the type of material, such as the hardcore category, which contained only images or links to images that depicted minors engaged in sexually explicit acts with either adults or other minors.
Cairnes admitted he was an active participant on the bulletin board and that his involvement dated from October 2006. Cairnes also admitted that on some occasions he made requests for images and videos of child pornography by name or by providing "sample images" of the material he sought. Cairnes also admitted to commenting on the quality of the child pornography he received from other members and expressing his gratification upon seeing the images and videos of child pornography, some of which depicted very young children. Through his plea, Cairnes also admitted to possessing tens of thousands of images of child pornography, including images of the sexual abuse of infants and images of children engaged in sadistic and masochistic abuse.
Cairnes was identified through "Operation Joint Hammer," the U.S. component of an ongoing global enforcement operation targeting transnational rings of child pornographers. The operation has led to the arrest of more than 60 people in the United States involved in the trade of child pornography. Operation Joint Hammer was initiated through evidence developed by European law enforcement and shared with U.S. counterparts by Europol and Interpol. The European portion of this global enforcement effort, "Operation Koala," was launched after the discovery of the activities of several people in Europe who were abusing children and producing photographs of the abuse for commercial gain. Further investigation unveiled a number of online child pornography rings.
The case was prosecuted by Assistant U.S. Attorney Matthew B. Devlin of the Western District of Texas and Trial Attorney Alecia Riewerts Wolak of the Criminal Division’s Child Exploitation and Obscenity Section. The investigation was handled by U.S. Immigration and Customs Enforcement.
Roanoke, Virginia, Neo-Nazi Convicted for Threats, Witness IntimidationRead the Press Release
WASHINGTON -- William A. "Bill" White, the self-proclaimed commander of the neo-Nazi group the American National Socialist Workers Party, was convicted by a federal jury for threatening three individuals and for attempting to intimidate litigants in a federal housing discrimination lawsuit, the Justice Department announced. White was convicted today of three counts of communicating threats in interstate commerce, and one count of witness intimidation.
According to the testimony at trial, from late 2006 through mid-2008, White targeted individuals and engaged in a pattern of threatening communications which resulted in those individuals fearing for their personal safety. These communications included late night telephone calls to the victims’ homes, during which he would identify himself as the leader of a white supremacist group; emails to the victims in which he would make threatening statements; and posting the victims’ names, addresses, phone numbers, and other personal information on neo-Nazi Web sites, sometimes accompanied by language advocating the murder of the targeted victim.
In one instance, White threatened a bank employee because of a personal financial dispute. In another instance, he sent letters marked with swastikas to the homes of individuals involved in a federal housing discrimination suit, filled with racial epithets and causing the victims to feel that they may suffer dire consequences for their participation in the lawsuit. Other counts of conviction victims included threats to a human rights lawyer from Canada and threats to a university administrator who was responsible for implementing a diversity program. White was acquitted of three additional counts.
White faces a maximum punishment of 25 years: a maximum of 10 years in prison for witness intimidation; and a maximum of five years imprisonment for each of the three counts of communicating threats in interstate commerce. Each of the aforementioned charges entails a potential fine of up to $250,000.00.
"One of the greatest truths about our nation is that everyone has the right to be free from threats violence because of the color of their skin, the language they speak or the country from which they come. Those individuals who are driven by bigotry to violate that right will be brought to justice," said Assistant Attorney General Perez. "The jury’s verdict in this case sends a strong message that hate crimes will not be tolerated on our free society."
"For an extended period of time, William White has hidden behind the First Amendment while making racist remarks and threatening people who are different from him. While the First Amendment protects our ability to express views even if unpopular, it does not provide a license to threaten, intimidate, and inflict emotional distress,"
U.S. Attorney Timothy Heaphy for the Western District of Virginia said, "William White did just that, using hateful words as a sword. We appreciate the strength of the victims of those hateful words. Because they came forward, William White will be held accountable for his misguided attempt at intimidation."
Oklahoma Man Sentenced to 12 Months in Prison for Kickback Scheme<br /> Involving Government Contract in AfghanistanRead the Press Release
WASHINGTON — An Oklahoma man was sentenced today to 12 months and one day in prison for his role in a scheme to solicit kickbacks in connection with the award of a private security services subcontract to protect U.S. government personnel and contractors in Afghanistan, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division, Assistant Attorney General Christine Varney of the Antitrust Division and U.S. Attorney Neil H. MacBride for the Eastern District of Virginia.
Bryan Lee Burrows, 42, of Wagoner, Okla., also was sentenced to two years of supervised release by U.S. District Court Judge Leonie M. Brinkema in the Eastern District of Virginia. He pleaded guilty on Sept. 2, 2009, to one count of conspiracy to solicit a kickback.
According to court documents, the U.S. Agency for International Development (USAID) is the principal federal U.S. agency that extends assistance to countries recovering from disaster, trying to escape poverty and engaging in democratic reforms. The agency works to support long-term and equitable economic growth and advance U.S. foreign policy objectives.
In August 2006, USAID awarded a $1.4 billion contract known as the Afghanistan Infrastructure Rehabilitation Project (the AIRP contract). The AIRP contract required the award of numerous subcontracts, including for the provision of security services to protect AIRP workers. According to court documents, from approximately February 2009 through May 2009, Burrows was employed in Kabul, Afghanistan, by Civilian Police International, a Virginia-based company that provides law enforcement training internationally. Burrows admitted that he conspired with others to solicit kickbacks from private security vendors in return for favorable treatment for those potential bidders in connection with the award of a subcontract. According to court documents, the subcontract provided for private security services to protect USAID personnel and contractors in Afghanistan operating under the AIRP contract.
The case is being prosecuted by Trial Attorney Bradford Geyer of the Criminal Division’s Fraud Section, Trial Attorneys Kimberly A. Justice and Joseph Muoio of the Antitrust Division’s Philadelphia Field Office and Assistant U.S. Attorney Timothy D. Belevetz of the U.S. Attorney’s Office for the Eastern District of Virginia. The investigation is being conducted by USAID’s Office of Inspector General as well as 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 Afghanistan, Iraq and Kuwait.
Three New York City Home Health Agencies Pay $9.7 Million<br /> to the United States to Settle False Claims Act ClaimsRead the Press Release
WASHINGTON - The Department of Justice announced today that the United States and the state of New York have entered into settlement agreements with three home health agencies to resolve allegations that they submitted false claims to the New York Medicaid and Medicare programs.
The New York Medicaid program provides coverage for home health aides only if those aides have valid certificates showing that they received proper training. The United States contended that Nursing Personnel Home Care (Nursing Personnel) knowingly supplied aides with phoney training certificates to Extended Home Care (Extended) and Excellent Home Care (Excellent), which then billed New York Medicaid for the aides’ services; that Extended and Excellent knowingly billed for aides with phoney certificates who were untrained; and that Extended and Excellent knowingly submitted claims to the Medicare program for home health aide services purportedly rendered by aides supplied by Nursing Personnel that were not actually provided. The United States is receiving approximately $9.7 million as a result of the settlement with these three companies, and the state of New York is receiving approximately $14.3 million, for a total recovery of $24 million.
"Our nation’s Medicare and Medicaid patients deserve nothing less than quality health care they can depend on," said Tony West, Assistant Attorney General for the Civil Division of the Department of Justice. "When home health agencies cut corners to avoid compliance with legal training standards, they seriously undermine the integrity of the care they provide." Assistant Attorney General West thanked the cooperative efforts of the Commercial Litigation Branch of the Civil Division, the U.S. Attorney’s Office for the Eastern District of New York, the Office of Investigations for the Department of Health and Human Services’ Office of Inspector General, the Medicaid Fraud Control Unit of the New York Attorney General’s Office, and the New York State Office of the Medicaid Inspector General in achieving this settlement.
New York Attorney General Andrew M. Cuomo said, "The size of this settlement underscores the seriousness of the allegations and the importance of vigorous oversight of the Medicaid program and the medical care of our loved ones. Being treated at home is an important option for many New Yorkers, and the companies that provide this service at taxpayer expense have an obligation to ensure that the health care workers they employ are qualified for the job."
"This settlement reflects this office’s commitment to investigate allegations of fraud committed on the Medicare or Medicaid programs, especially when the alleged fraud could impact the standard of care received by New Yorkers in need of medical assistance," said Benton J. Campbell, U.S. Attorney for the Eastern District of New York. Mr. Campbell praised the collaborative efforts of the state and federal agencies that contributed to the recovery of funds for the Medicaid and Medicare programs.
The allegations resolved by today’s settlements were initiated by two lawsuits filed under the whistleblower provisions of the False Claims Act, which allow private citizens to file suit on behalf of the United States for fraud and share in any recovery. Maurice Keshner will receive $251,107 from the government’s recovery from Nursing Personnel. Deborah Yannicelli will receive $1,663,040 from the government’s recovery from Extended and Excellent.
The lawsuits were captioned as United States ex rel. Keshner v Nursing Personnel Home Care, et al., Civil Action No. 06-1067 (E.D.N.Y.), and United States and the State of New York ex rel. Jane Doe v. Extended Nursing Personnel CHHA, LLC, et al., Civil Action No. 07-4621 (E.D.N.Y.).
Guyanese National Charged with Smuggling Indian Nationals to the United StatesRead the Press Release
A Guyanese national has been indicted on charges of conspiracy and alien smuggling in connection with her role in the smuggling or attempted smuggling of four Indian nationals to the United States.
Annita Devi Gerald, aka Annita Rampersad, 52, was charged in a nine-count indictment returned yesterday by a federal grand jury in the Southern District of Texas. Gerald was arrested by ICE special agents in Houston on Nov. 17, 2009, and has been held without bond since that time.
According to the indictment, from approximately April 2009 to Nov. 17, 2009, Gerald and others conspired to smuggle four Indian nationals into the United States. Allegedly, Gerald and her co-conspirators fraudulently obtained Belizean visas for the Indian nationals and escorted them from India to Belize, moving through various countries in Central and South America. Gerald allegedly provided lodging for all four Indian nationals in Belize while further smuggling arrangements were made.
In August 2009, Gerald allegedly arranged transportation for one of the Indian nationals to cross the border from Belize into Mexico where he met with Gerald’s co-conspirator, who escorted him through Mexico. In Monterrey, Mexico, Gerald’s co-conspirator paid a Mexico-based smuggler to illegally transport the individual across the Mexico-U.S. border to Houston. After making these arrangements, Gerald’s co-conspirator allegedly flew to Houston where the co-conspirator received the Indian national at a motel approximately 10 days later. The smugglers who delivered the Indian national to Gerald’s co-conspirator in Houston allegedly demanded and received a smuggling payment prior to releasing him. The Indian national smuggled to Houston is currently being administratively detained by ICE, awaiting removal. The whereabouts of the other three Indian nationals allegedly harbored by Gerald in Belize is currently unknown.
If convicted, Gerald faces a maximum sentence of five years in prison for conspiracy, and 10 years in prison for each of the four counts of encouraging and inducing aliens to come to the United States for profit. Additionally, she is subject to the maximum penalty for each of the four counts of bringing aliens to the United States for profit, which is 10 years for a first or second violation, and 15 years for any other violation. She is also subject to a fine of up to $250,000.
An indictment is merely an accusation, and the defendant is presumed innocent until and unless proven guilty at trial beyond a reasonable doubt.
The investigation was conducted by ICE’s Office of Investigations in Miami and Houston, with the critical assistance of the ICE Attaché offices in El Salvador, Ecuador, Brazil, Singapore and Panama, as well as the ICE Office of Intelligence in Washington, and the Alien Smuggling Interdiction Unit of Customs and Border Protection (CBP) in Washington. El Salvadoran authorities, particularly the Direción General de Migración y Extranjería (El Salvador Immigrations) and the Grupo Especial de Investigaciones Nacionales e Internacionales (El Salvador Police-GEINI) also provided invaluable assistance.
The case is being prosecuted by Trial Attorneys Jerry Massie and Jessica Morris of the Criminal Division’s Domestic Security Section, with the assistance of Assistant U.S. Attorneys Edward Gallagher and Douglas Davis of the Southern District of Texas.
Former FBI Contract Linguist Pleads Guilty to <br /> Leaking Classified Information to BloggerRead the Press Release
A former FBI contract linguist pleaded guilty today to unlawfully providing classified documents to the host of an Internet blog who then published information derived from those documents on the blog.
Shamai Kedem Leibowitz, aka Samuel Shamai Leibowitz, 39of Silver Spring, Md., pleaded guilty in federal court in Greenbelt, Md., to a one-count information charging him with knowingly and willfully disclosing to an unauthorized person five FBI documents classified at the "secret" level that contained classified information concerning the communication intelligence activities of the United States.
Under the plea agreement, the government and Leibowitz have agreed that a term of 20 months in prison is the appropriate sentence in this case. The court may accept or reject the plea agreement between the government and Leibowitz. In addition, the court retains discretion to impose any lawful term of supervised release or fine, and to set any lawful conditions of supervised release.
"The willful disclosure of classified information to those not entitled to receive it is a serious crime," said David Kris, Assistant Attorney General for National Security. "Today’s guilty plea should serve as a warning to anyone in government who would consider compromising our nation’s secrets."
"Government employees who are given access to classified information are prohibited from disclosing the information without permission," said U.S. Attorney Rod J. Rosenstein.
"As a trusted member of the FBI ranks, Leibowitz abused the trust of the FBI and the American public by using his access to classified information for his own purposes," said Special Agent in Charge Richard A. McFeely.
According to the plea agreement, from January 2009 through August 2009, Leibowitz was employed by the FBI as a contract linguist in an office in Calverton, Md. As part of his official duties, Leibowitz held a top secret security clearance and had lawful access to classified documents and information relating to the communication intelligence activities of the United States.
In April 2009, according to the plea agreement, Leibowitz knowingly and willfully caused five documents that were classified at the secret level and which contained classified information relating to the communication intelligence activities of the United States, to be furnished to a person not entitled to receive such information.
The recipient was the host of a public blog available to anyone with access to the Internet. The recipient then published on the blog information derived from the classified documents provided by Leibowitz.
This investigation was conducted by the FBI Baltimore Field Office. The prosecution is being handled by Assistant U.S. Attorney Steven M. Dunne, of the U.S. Attorney’s Office for the District of Maryland, and Trial Attorney Kathleen M. Kedian, of the Counterespionage Section of the Justice Department’s National Security Division.
Virginia Resident Charged with Conspiring to Bribe<br /> Former Panamanian Government Officials for Maritime ContractRead the Press Release
A federal grand jury has charged a Virginia Beach, Va., resident with conspiracy to pay bribes to former Panamanian government officials to secure maritime contracts.
John W. Warwick, 63, yesterday was charged in U.S. District Court for the Eastern District of Virginia with conspiring to make corrupt payments to foreign government officials for the purpose of securing business for Ports Engineering Consultants Corporation (PECC) in violation of the Foreign Corrupt Practices Act (FCPA). PECC, a company incorporated under the laws of Panama, was affiliated with an engineering firm based in Virginia Beach. According to the indictment, PECC was created so that Warwick, co-conspirator Charles Jumet, the engineering firm and others could corruptly obtain certain maritime contracts from the Panamanian government.
The indictment alleges that from at least 1997 through July 2003, Warwick, the former president of PECC, was involved in a conspiracy to pay money secretly to former Panamanian government officials for awarding PECC contracts to maintain lighthouses and buoys along Panama’s waterway. The indictment also alleges that the former Panamanian government awarded PECC a no-bid 20-year concession to perform these duties. Upon receipt of the concession, Warwick and others authorized corrupt payments to be made to the former Panamanian government officials.
As a result of the contracts, PECC received approximately $18 million in revenue from 1997 to 2000. In 2000, Panama’s Comptroller General Office suspended the contract while it investigated the government’s decision to award PECC a contract without soliciting any bids from other entities. In 2003, the Panamanian government resumed making payments to PECC.
The indictment also alleges Warwick, Jumet and others conspired to make corrupt payments totaling more than $200,000 to the former administrator and deputy administrator of the Panama Maritime Authority and to a former, high-ranking elected executive official of the Republic of Panama.
An indictment is merely an accusation and the defendants are presumed innocent until and unless proven guilty at trial beyond a reasonable doubt.
Jumet pleaded guilty on Nov. 13, 2009, to a two-count criminal information charging him with conspiring to make corrupt payments to foreign government officials for the purpose of securing business for PECC, in violation of the FCPA, and making a false statement. Jumet is scheduled to be sentenced on Feb. 12, 2010.
If convicted, Warwick faces a maximum of five years in prison and a fine of the greater of $250,000 or twice the gain or loss. The indictment seeks forfeiture of the proceeds that Warwick and his engineering firm received as a result of the contracts that the Panamanian government awarded PECC.
The case is being prosecuted by Trial Attorney Rina Tucker Harris of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Michael S. Dry of the U.S. Attorney’s Office for the Eastern District of Virginia. The case was investigated by the FBI’s Washington Field Office, the FBI’s Richmond Field Office, ICE’s Washington Field Office and ICE’s Richmond Field Office.
Retired Army Major Sentenced to 57 Months in Prison for Role in Bribery Scheme Involving DOD Contracts in KuwaitRead the Press Release
WASHINGTON — A retired major in the U.S. Army today was sentenced to 57 months in prison for his role in a bribery scheme related to Department of Defense (DOD) contracts awarded in Kuwait, announced Assistant Attorney General of the Criminal Division Lanny A. Breuer and Assistant Attorney General of the Antitrust Division Christine Varney.
Christopher H. Murray, 42, a resident of Cataula, Ga., was also ordered by Judge Clay D. Land of the U.S. District Court for the Middle District of Georgia - Columbus Division to pay $245,000 in restitution and to serve three years of supervised release following the prison term.
Murray pleaded guilty in January 2009 to a five-count criminal information charging him with four counts of bribery and one count of making a false statement. According to the court documents, in 2005 and 2006, then-Major Murray served as a contracting specialist in the small purchases branch of the contracting office at Camp Arifjan, Kuwait. As a contracting specialist, Murray was responsible for soliciting bids for military contracts, evaluating the sufficiency of those bids, and then recommending the award of contracts to particular contractors. In this capacity, Murray solicited and received approximately $225,000 in bribes from DOD contractors in exchange for recommending the award of contracts for various goods and services.
According to court documents, Murray returned to Kuwait in fall 2006, as a contracting officer, and solicited and received another $20,000 in bribes from a DOD contractor in exchange for the award of a construction contract. When confronted with evidence of his criminal conduct, Murray made false statements to federal agents investigating the matter.
This case is being prosecuted by trial attorney Richard B. Evans of the Criminal Division’s Public Integrity Section as well as trial attorneys Mark W. Pletcher, Emily W. Allen and Finnuala Kelleher of the Antitrust Division’s National Criminal Enforcement Section.
The case is being investigated by the Special Inspector General for Iraq Reconstruction; the Army Criminal Investigation Command, Defense Criminal Investigative Service; U.S. Immigration and Customs Enforcement; the FBI; and the Internal Revenue Service.
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.
Anyone with information concerning bid rigging, bribery or other criminal conduct regarding DOD contracts is urged to call the Defense Criminal Investigative Service at 800-424-9098 or [email protected]; Army Criminal Investigation Division at www.cid.army.mil; or the FBI at 800-225-5324.
Justice Department Signs Agreement with Santa Rosa, California, to Ensure Civic Access for People with DisabilitiesRead the Press Release
The Justice Department today announced an agreement with Santa Rosa, Calif., to improve access to all aspects of civic life for persons with disabilities. The agreement was reached under Project Civic Access (PCA), the department’s wide-ranging initiative to ensure that cities, towns and counties throughout the country comply with the Americans with Disabilities Act (ADA).
"PCA is about more than just ADA compliance, it is about ensuring that individuals with disabilities can expect the same access to civic programs, services, and facilities as everyone else," said Assistant Attorney General Thomas E. Perez of the Civil Rights Division. "I commend city officials for making this commitment to provide equal access to city programs, activities and services for all its residents."
PCA was initiated to ensure that persons with disabilities have an equal opportunity to participate in civic life, a fundamental part of American society. As part of the PCA initiative, Justice Department investigators, attorneys and architects survey state and local government facilities, services and programs in communities across the country to identify the modifications needed for compliance with ADA requirements. The agreements are tailored to address the steps each community must take to improve access. This agreement marks the 175th under the PCA initiative and the 14th agreement reached this year.
"We appreciate the commitment to accessibility and ADA compliance made by each of the 175 cities, counties, and other government entities who have entered into a PCA agreement with the Justice Department," said Assistant Attorney General Perez. "We hope that all local governments throughout the country are committed to achieving full compliance with the ADA, particularly as we approach the 20th anniversary of this important civil rights law’s passage."
Under the agreement announced today, Santa Rosa will take several important steps to improve access for individuals with disabilities, such as:
- Making physical modifications to its facilities so that parking, routes into the buildings, entrances, public telephones, restrooms, service counters and drinking fountains are accessible to people with disabilities;
- Posting, publishing and distributing a notice to inform members of the public of the provisions of Title II and their applicability to the city’s programs, services and activities;
- Officially recognizing California’s telephone relay service and training staff in using the relay service for telephone communications;
- Developing a method for providing emergency management policies and procedures for persons with disabilities, including preparation, notification, response and clean up;
- Developing a method for providing information for interested persons with disabilities concerning the existence and location of the city’s accessible services, activities and programs;
- Installing signs at any inaccessible entrance to a facility directing users to an accessible entrance or to information about other accessible facilities; and
- Implementing a plan to improve the accessibility of city sidewalks and provide for the installation of accessible curb cuts throughout the city.
Today’s settlement agreement was reached under Title II of the ADA, which prohibits discrimination against individuals with disabilities by state and local governments. The agreement will remain in effect for five years or until the parties agree that all actions required by the agreement have been completed, whichever is later. The department will monitor compliance with the agreement until required actions have been completed.
Santa Rosa is just 55 miles north of San Francisco, where wine and farm country meet the redwoods and the ocean. Santa Rosa sits at the heart of Sonoma County. It is the county seat and has a local population of approximately 155,000 people. The city has much to offer by way of arts and culture, parks, trails and green spaces, making it a prime destination for tourist and wine enthusiasts. Santa Rosa was also home to Peanuts comic strip creator Charles Schulz and lists the Charles M. Schulz Museum and Research Center among the attractions located in the city.
People interested in finding out more about the ADA, today’s agreement with Santa Rosa, the Project Civic Access initiative, or the ADA Best Practices Tool Kit for State and Local Governments can access the ADA Web page at http://www.ada.gov or call the toll-free ADA Information Line at (800) 514-0301 or (800) 514-0383 (TDD).
Justice Department Reaches Americans with Disabilities Act Settlement with Intellitec CollegesRead the Press Release
WASHINGTON – The Department of Justice today announced a settlement agreement under the Americans with Disabilities Act (ADA) with Intellitec Colleges in Colorado Springs, Grand Junction, and Pueblo, Colo., to ensure access to its technical colleges for individuals with disabilities.
Intellitec offers career training programs for automotive technicians, drafting, medical and dental assistants, administrative professionals and more at its three campuses. The agreement requires, among other things, that Intellitec remove barriers to access at its existing facilities, ensure that future construction complies with the ADA, and ensure that any future alterations to existing facilities are, to the maximum extent feasible, readily accessible to and usable by individuals with disabilities. The agreement with Intellitec is the result of a compliance review conducted by the department.
"This agreement with a long-standing technical school will help ensure that job skills training is available to everyone, including individuals with disabilities," said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. "It is a top priority of the Justice Department to enforce the laws that guarantee that persons with disabilities have equal access to educational opportunities and the doors those opportunities open."
The ADA prohibits discrimination by public accommodations on the basis of disability, including nursery, elementary, secondary, undergraduate or postgraduate private schools, and other places of education. Those interested in finding out more about these agreements or seeking information about and how to comply with the ADA 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 http://www.ada.gov .
Former Kansas Businessman Sentenced to 57 Months in Prison for Role<br /> in Scheme to Defraud Federal E-rate ProgramRead the Press Release
WASHINGTON – A former owner of three Kansas computer service companies was sentenced to 57 months in prison for his role in a conspiracy to defraud the federal E-Rate program and for making a false statement to the U.S. Department of Housing and Urban Development (HUD), the Department of Justice announced today.
Leonard Douglas "Doug" LaDuron, former owner and president of Serious ISP Inc., Myco Technologies Inc. and Elephantine Corporation, also was ordered by Chief Judge Kathryn H. Vratil in the U.S. District Court in Kansas City, Kan., to pay $238,607 in restitution. LaDuron pleaded guilty on June 29, 2009, to one count of conspiracy and one count of making a false statement. LaDuron was originally indicted on April 24, 2008.
According to court documents, LaDuron and his co-conspirators, Benjamin Rowner and Jay H. Soled, who are former owners of DeltaNet Inc., steered E-Rate contracts to their respective companies and devised a scheme to defraud the E-Rate program by submitting false statements and concealing material facts from the Universal Service Administrative Company (USAC), a non-profit corporation. The conspiracy, which began in 1999 and ran at least until 2003, affected at least 10 schools located across the country.
Additionally, in July 2003, LaDuron knowingly submitted a false statement to the Lawrence-Douglas County Housing Authority, HUD’s local administrator of the Housing Choice Voucher Program in Lawrence, Kan., when he forged an employee’s signature and submitted an inaccurate employment verification form.
The E-Rate program was created by Congress in the Telecommunications Act of 1996 and is administered by the USAC, under the auspices of the Federal Communications Commission (FCC). The program provides subsidies to economically disadvantaged schools and libraries. Depending on the financial needs of applicant schools, the program pays 10 to 90 percent of the cost for Internet access and telecommunications services, as well as internal computer and communications networks.
LaDuron’s co-conspirators, Benjamin Rowner and Jay H. Soled, pleaded guilty to their role in the conspiracy on July 10, 2008, and are scheduled to be sentenced Feb. 4, 2010. Mary Jo LaDuron, Doug LaDuron’s mother, pleaded guilty to making a false statement to the FBI and was sentenced on Oct. 13, 2009, to pay a $3,743 fine.
Today’s sentencing is a result of an investigation conducted by the Antitrust Division, the FBI, the HUD Office of Inspector General, and the FCC with assistance from the U.S. Attorney’s Office for the District of Kansas. Anyone with information concerning violations of the E-Rate program or other anticompetitive conduct is urged to call the Antitrust Division’s Chicago Field Office at 312-353-7530 or visit http://www.justice.gov/atr/contact/newcase.htm.
Credit Suisse Agrees to Forfeit $536 Million in Connection with Violations of the International Emergency Economic Powers Act and New York State LawRead the Press Release
Credit Suisse AG, a Swiss corporation headquartered in Zurich, has agreed to forfeit $536 million to the United States and to the New York County District Attorney’s Office in connection with violations of the International Emergency Economic Powers Act (IEEPA) and New York state law. The forfeiture is the largest ever entered against an entity for IEEPA violations.
The violations relate to transactions Credit Suisse illegally conducted on behalf of customers from Iran, Sudan and other countries sanctioned in programs administered by the Department of the Treasury’s Office of Foreign Assets Control (OFAC).
A criminal information was filed today in the U.S. District Court for the District of Columbia charging Credit Suisse with one count of violating the IEEPA. Credit Suisse waived indictment, agreed to the filing of the information, and has accepted and acknowledged responsibility for its criminal conduct. Today, Credit Suisse also entered into an agreement with OFAC to settle the apparent civil violations of IEEPA and other authorities arising from this conduct. Credit Suisse agreed to forfeit the funds as part of the deferred prosecution agreements reached with the Department of Justice and the New York County District Attorney’s Office and in settlement of the civil claims with OFAC.
"One of this administration’s top priorities is to employ our resources aggressively to hold accountable those who engage in financial misconduct," said Attorney General Eric Holder. "Credit Suisse’s decades-long scheme to flout the rules that govern our financial institutions robbed our system of the legitimacy that is fundamental to its success. Today’s announcement sends a strong message that we will not let this type of conduct stand."
Under IEEPA, it is a crime to willfully violate, or attempt to violate, any regulation issued under the act, including the regulations related to Iran, Sudan, Burma, Cuba and Libya.
According to court documents, beginning as early as 1995 and continuing through 2006, Credit Suisse, in Switzerland and the United Kingdom, altered wire transfers involving U.S. sanctioned countries or persons. Specifically, according to court documents, Credit Suisse deliberately removed material information, such as customer names, bank names and addresses, from payment messages so that the wire transfers would pass undetected through filters at U.S. financial institutions. Credit Suisse also trained its Iranian clients to falsify wire transfers so that such messages would pass undetected through the U.S. financial system. This scheme allowed U.S. sanctioned countries and entities to move hundreds of millions of dollars through the U.S. financial system.
For its Iranian clients, Credit Suisse promised that no message would leave the bank without being hand-checked by a Credit Suisse employee to ensure that the message had been formatted to avoid U.S. filters. If an Iranian client provided payment messages that contained identifying information, Credit Suisse employees would remove the detectable information so that the message could pass undetected through OFAC filters at U.S. financial institutions. According to court documents, Credit Suisse’s international communications showed a continuous dialogue about the scheme, assessing how to better process Iranian transactions to ensure increased business from existing and future Iranian clients. For example, in 1998, Credit Suisse provided its Iranian clients with a pamphlet entitled, "How to transfer USD payments", which provided detailed payment instructions on how to avoid triggering U.S. OFAC filters or sanctions. Additionally, Credit Suisse processed 88 payments for those listed as "Specially Designated Nationals" by OFAC. Specially Designated Nationals are individuals and entities specifically named by OFAC to be subject to U.S. sanctions. Their assets are blocked and U.S. persons are generally prohibited from dealing with them.
"Through its egregious conduct, Credit Suisse illegally moved hundreds of millions of dollars through the American financial system and actively assisted sanctioned countries in evading U.S. laws," said Assistant Attorney General Lanny A. Breuer of the Criminal Division. "In essence, Credit Suisse said to sanctioned entities, ‘We’ve got a service, and that service is helping you evade U.S. banking regulations.’"
"This case provides a timely lesson about how Iran seeks to involve others in deceptive conduct to evade legal and regulatory controls," said Treasury Under Secretary for Terrorism and Financial Intelligence Stuart Levey. "Those who do business with Iran expose themselves to the risk, and the consequences, of participating in transactions supporting proliferation, terrorism or sanctions evasion."
"Investigations involving OFAC regulations and IEEPA violations are often long and complicated and require significant resources," said Kevin Perkins, Assistant Director of the FBI’s Criminal Investigative Division. "The FBI will work closely with our law enforcement partners and federal regulators to ensure compliance with federal banking laws and regulations and to promote the highest level of transparency across financial institutions worldwide."
"In the world’s increasingly complex financial markets, it’s critical that global institutions follow U.S. law, including sanctions against other countries," said Steve Miller, IRS Deputy Commissioner for Services and Enforcement. "We’re proud our Criminal Investigation agents applied their special money-tracing skills to unmask this deception."
The bank’s forfeiture of $268 million to the United States and $268 million to the New York County District Attorney’s Office will settle forfeiture claims by the Department of Justice and the state of New York and civil claims by OFAC related to the misconduct. In light of the bank’s remedial actions to date and its willingness to acknowledge responsibility for its actions, the Department will recommend the dismissal of the information in two years, provided Credit Suisse fully cooperates with, and abides by, the terms of the agreement.
Throughout the investigation, Credit Suisse has provided prompt and substantial cooperation, including working with regulators to find a method consistent with Swiss law to disclose a significant portion of the data, communications and documentation underlying the misconduct. Credit Suisse has also committed substantial resources to conducting an extensive internal investigation of the misconduct and has agreed to enhance its sanctions compliance programs to be fully transparent in its international payment operations.
The case was prosecuted by Section Chief Richard Weber, Trial Attorneys Frederick Reynolds and Keith Liddle, and supported by Laurie Bender and Karina Lleva of the Criminal Division’s Asset Forfeiture and Money Laundering Section. The case was investigated by FBI’s New York Field Office and IRS-Criminal Investigation’s Washington Field Division. The Department of Justice expressed additional gratitude to Bureau Chief Adam Kaufmann, Assistant District Attorneys Gary Fishman, Richard Preiss and Aaron Wolfson of the New York County District Attorney’s Office, Investigation Division Central. The Department of Justice also expressed gratitude to the Department of Treasury’s Office of Foreign Assets Control, the New York Federal Reserve and the Board of Governors of the Federal Reserve System for the significant and valuable assistance.
Deferred Prosecution Agreement
Information
Factual StatementAssistant Attorney General for Antitrust, Christine Varney, Issues Statement on European Commission Microsoft SettlementRead the Press Release
WASHINGTON – Christine Varney, Assistant Attorney General of the Department’s Antitrust Division, issued the following statement today after the European Commission and Microsoft Corporation announced their settlement:
"The Department of Justice’s Antitrust Division commends the efforts of the European Commission and Microsoft Corporation, which have announced that they have reached a comprehensive settlement resolving their disputes under European competition law. As we understand it, the settlement is based on measures to enhance competition and is designed to preserve industry participants’ incentives and ability to compete going forward. A settlement that helps to clarify obligations under European law allows the industry to move forward. The Department is committed to continuing its strong and cooperative relationship with the European Commission to promote competition policy that protects consumer welfare."
University of Phoenix Settles <br /> False Claims Act Lawsuit for $67.5 MillionRead the Press Release
WASHINGTON -- The Justice Department announced today that the University of Phoenix has agreed to pay the United States $67.5 million to resolve allegations that its student recruitment policies violated the False Claims Act.
This case began as a whistleblower action filed in the Eastern District of California under the False Claims Act, which permits private citizens to bring lawsuits for fraud on behalf of the United States and to share in any recovery. Whistleblowers Mary Hendow and Julie Behn, two former University of Phoenix employees, alleged that the university accepted federal student financial aid while in violation of statutory and regulatory provisions prohibiting post-secondary schools from paying admissions counselors certain forms of incentive-based compensation tied to the number of students recruited. Though the United States did not intervene in this action, the Government provided support and assistance to the whistleblowers at many stages of the case, including filing friend-of-the-court briefs when the case was on appeal to the Ninth Circuit. The two whistleblowers will receive $19 million from the settlement.
"The Government recognizes the important role institutions like the University of Phoenix play in providing higher education for many people. At the same time, we must ensure that all educational institutions comply with the law and do not misuse taxpayer funds," said Tony West, Assistant Attorney General of the Civil Division of the Department of Justice. The Assistant Attorney General noted that the Justice Department’s Civil Division, the U.S. Attorney’s Office for the Eastern District of California and the Department of Education worked together on this case.
"This settlement showcases how a working relationship between the Government and private whistle-blowers can bring about effective results in terms of protecting taxpayer dollars," said Benjamin Wagner, U.S. Attorney for the Eastern District of California.
Two Shenandoah, Pennsylvania, Men and Four Police Officers Indicted for Hate Crime and Related CorruptionRead the Press Release
WASHINGTON – A federal grand jury has returned multiple indictments arising out of a fatal racially motivated beating and related police corruption in Shenandoah, Pa., the Justice Department announced. The three indictments include federal hate crime, obstruction of justice, conspiracy, official misconduct and extortion charges. The indictments were unsealed today, after being returned under seal on Dec. 10, 2009.
The first indictment charges Derrick Donchak and Brandon Piekarsky with a federal hate crime for fatally beating Luis Ramirez, a Latino male, while shouting racial epithets at him. According to the indictment, on July 12, 2008, the defendants, and others, were walking home from a local festival when they encountered Ramirez. The defendants then attacked Ramirez in a public street by striking and kicking him while members of the group yelled racial slurs at him. Ramirez died two days later from his injuries. The indictment also alleges that, immediately following the beating, Donchak, Piekarsky and others, including members of the Shenandoah Police Department, participated in a scheme to obstruct the investigation of the fatal assault. As a result of this alleged obstruction, Donchak is charged in three additional counts for conspiring to obstruct justice and related offenses.
If convicted, Piekarsky and Donchak face a maximum penalty of life in prison on the hate crime charge. Donchak faces 20 years in prison on each of the obstruction charges and an additional five years in prison for conspiring to obstruct justice.
"Violence motivated by bigotry and hate has no place in America, and yet it remains all too prevalent in many of our communities," said Thomas E. Perez, Assistant Attorney General for the Department of Justice. "The Civil Rights Division stands ready to bring perpetrators of hate crimes to justice."
A second indictment charges Shenandoah Police Chief Matthew Nestor, Lt. William Moyer and Police Officer Jason Hayes with conspiring to obstruct justice during the investigation into the fatal beating of Ramirez. Moyer has also been charged with witness and evidence tampering, and with lying to the FBI.
If convicted, the defendants face 20 years in prison on each of the obstruction charges and an additional five years in prison for conspiring to obstruct justice. Moyer faces an additional five years in prison for making false statements to the FBI.
A third indictment charges Chief Nestor and his second-in-command, Captain Jamie Gennarini, with multiple counts of extortion and civil rights violations. According to that indictment, from 2004 through 2007, Nestor conspired to extort cash payments from several illegal gambling operations in the Shenandoah area and obstructed the investigation of the extortion scheme. The indictment also alleges that on May 17, 2007, Nestor and Gennarini committed extortion by demanding a $2,000 cash payment from a local businessman and his family in exchange for releasing the businessman from their custody.
"The power granted to law enforcement officers does not place them above the law. We will continue to aggressively enforce the law to combat obstruction and corruption in law enforcement agencies," Assistant Attorney General Perez said. "We thank the FBI for their work in this investigation."
If convicted on these charges, Nestor and Gennarini face maximum penalties of 20 years in prison for each of the extortion counts. Additionally, the defendants face a maximum penalty of 10 years in prison for the conspiracy to violate civil rights.
These cases were investigated by Special Agents Alan Jones and Adam Aichele of the Philadelphia Division of the FBI, and are being prosecuted by Civil Rights Division Trial Attorneys Eric L. Gibson and Myesha Braden.
The FBI wants to hear from anyone who may have information regarding alleged civil rights violations or public corruption in Schuylkill County, Pa.. If you feel you have been victimized or have any additional information, please call FBI Special Agents Alan Jones or Anthony Cavallo at the Allentown, Pa., Resident Agency of the FBI at (610) 433-6488.
An indictment is a formal accusation of criminal conduct, not evidence of guilt. The defendants are presumed innocent unless and until proven guilty.
The President’s Task Force on Puerto Rico’s Status Holds First MeetingRead the Press Release
The President’s Task Force on Puerto Rico’s Status held its first meeting today, continuing the important work of examining and reporting on the island’s status question, but also expanding its focus to include matters affecting Puerto Rico’s economic development. President Obama signed an Executive Order on Oct. 30, 2009, to both preserve the Task Force’s original mission, and to provide advice and recommendations to the President and the Congress on policies that promote job creation, education, health care, clean energy, and economic development on the islands.
"President Obama recognizes the importance of both moving forward on the question of Puerto Rico’s status, but also on working toward creating greater economic opportunities for all our citizens," said Task Force Co-Chair and White House Director of Intergovernmental Affairs Cecilia Muñoz. "We look forward to continuing to work closely with officials and interested parties in Puerto Rico to build on the investments we’ve made through the Recovery Act, which are serving the people of Puerto Rico while creating and saving jobs in everything from community health centers to infrastructure projects."
Consistent with President Obama’s commitment to responsive and accountable governing, the Task Force members voted to hold public hearings in Puerto Rico and on the mainland on the broad range of issues before them, and to seek the public’s input.
"As the Task Force works to put in place a process for moving forward on these important policy matters, we will work diligently to engage the people of Puerto Rico and involve them in the process," added Task Force Co-Chair and Associate Attorney General Tom Perrelli.
President Clinton originally established the Task Force when he signed Executive Order 13183 in December 2000. The Task Force is made up of designees of each member of the President’s Cabinet and the Co-Chairs of the President’s Interagency Group on Puerto Rico. The members are as follows:
Co-Chairs
- White House, Cecilia, Munoz, Director of the White House Office of Intergovernmental Affairs
- Department of Justice, Tom Perrelli, Associate Attorney General
Members
- Health & Human Services, Paul Dioguardi, Director of Intergovernmental Affairs
- Transportation, Joanna Turner, Deputy Assistant Secretary for Government Affairs
- Environmental Protection Agency, Judith Enck, Region 2 Administrator
- Housing & Urban Development, Mercedes Marquez, Assistant Secretary for Community Planning and Development
- Education, Eric Waldo, Special Assistant to the Secretary
- Agriculture, Tammye Trevino, Administrator of the Rural Housing Service
- Interior, Anthony Babauta, Assistant Secretary for the Interior for Insular Areas
- Labor, Gabriella Lemus, Senior Advisor and Director Office of Public Engagement
- Energy, Joe Garcia, Director of the Office of Economic Impact
- Defense, Patrick O'Brien, Director Office of Economic Adjustment
- Council of Economic Advisors, Cecilia Rouse, Member
- Commerce, Rick Wade, Deputy Chief of Staff
- Veterans Affairs, Langley Koby, Special Assistant to the Secretary
- Treasury, Matthew Kabaker, Domestic Finance
- State, Julissa Reynoso, Deputy Assistant Secretary for Western Hemisphere Affairs
- Homeland Security, Juliette Kayyem, Assistant Secretary for Intergovernmental Programs
Presidential Task Force on Controlled Unclassified Information Releases Report and RecommendationsRead the Press Release
WASHINGTON— Attorney General Eric Holder and Department of Homeland Security (DHS) Secretary Janet Napolitano today announced two major steps in their efforts to implement reforms to enhance information sharing among federal, state, local and tribal law enforcement agencies and safeguard sensitive information used by the government—designed to expand joint capabilities to protect the United States from terrorist activity, violent crime and other threats to the homeland.
The Presidential Interagency Task Force on Controlled Unclassified Information (CUI), led by Attorney General Holder and Secretary Napolitano, today released a report recommending a single, standardized framework for marking, safeguarding and disseminating sensitive but unclassified (SBU) information across the federal government. SBU information refers collectively to the various designations for documents and information that are sufficiently sensitive to warrant some level of protection but that do not meet the standards for classification.
Attorney General Holder and Secretary Napolitano also announced the creation of dual Program Management Offices (PMOs) to coordinate support for state and local Fusion Centers and the Nationwide Suspicious Activity Reporting Initiative (NSI), housed within DHS and the Department of Justice (DOJ), respectively, to work in partnership to enhance information sharing between federal, state, local and tribal agencies and the private sector. Coupled with the CUI framework, these new offices represent a significant milestone toward fully implementing information sharing reforms called for following the terrorist attacks of Sept. 11, 2001.
"Our recommendations will allow the federal government to be more open and transparent while still meeting our first priority of keeping the American people safe," said Attorney General Holder. "By streamlining and modernizing the system for designating, marking and handling sensitive information, we can achieve the appropriate balance between the public’s right to access information and the government's imperative to maintain the security and privacy of all Americans."
"Our review of policies and procedures for access to and sharing of sensitive but unclassified information across the U.S. Government revealed a need for a more open, standardized approach," said Secretary Napolitano. "The task force recommendations, coupled with newly-dedicated federal-wide resources to support Fusion Centers, will improve information sharing, transparency and engagement with our partners in state and local law enforcement as we work together to combat terrorism, violent crime and other dangerous threats to the homeland."
Both announcements reflect the Obama administration’s commitment to improving the ability of federal state, local and tribal governments as well as the private sector to gather, analyze, share and utilize information in order to protect communities from violent crime including terrorism, while protecting the privacy and civil rights of Americans.
The Task Force report proposes 40 actions intended to mitigate current inconsistencies among SBU information policies in federal agencies by simplifying and consolidating procedures—intended to enhance standardization, information sharing, government transparency, and protection of information only where there is a compelling requirement to do so. The recommendations also seek to balance the imperatives of protecting legitimate security, law enforcement, privacy and civil liberties interests.
The Task Force was directed to review the ongoing efforts of the CUI Council, which was established by a 2008 Presidential Memorandum, and its ongoing efforts to establish a CUI Framework for terrorism-related information. One significant recommendation in the report would expand the scope of the CUI Framework to the designation, marking, safeguarding and dissemination of all SBU information.
The new PMOs will work jointly to provide sustained funding and personnel support to 72 state and local Fusion Centers nationwide and provide training and resources to frontline law enforcement officials to better document activities possibly linked to terrorism through NSI, a DHS-DOJ collaboration designed to detect, analyze and share intelligence about suspicious behavior and other indicators while protecting privacy and civil liberties.
The Fusion Center and NSI PMOs will establish strong cross-linkages, including the exchange of senior-level specialists and management personnel, and joint program performance measures in order to ensure efficient oversight and coordination of current initiatives and successfully facilitate ongoing efforts to build and develop the Information Sharing Environment.
State and major urban area Fusion Centers help fulfill key recommendations of the 9/11 Commission by providing critical links for information sharing between and across all levels of government. NSI operates in coordination with the Federal Bureau of Investigation, the International Association of Chiefs of Police, Major City Chiefs, Major County Sheriffs, and other state, local and tribal partners to gather, blend and analyze information gathered from local law enforcement about suspicious activity.
There are more than 100 different SBU markings and handling procedures currently in use across the federal government. The report recommends that all SBU markings be replaced with one, simplified set of markings—"CUI"—which will be standardized under the CUI Framework. Additional recommendations include simplifying the definition of CUI; clarifying that CUI markings have no bearing on releases either under the Freedom of Information Act or to Congress; and phasing in implementation of the expanded scope of the CUI Framework.
President Obama initiated the review on May 27 with a Presidential Memorandum directing Attorney General Holder and Secretary Napolitano to lead a 90-day review of current procedures for categorizing and sharing SBU information. If implemented, the recommendations would revise the 2008 Presidential Memorandum that established the CUI Framework for handling and disseminating CUI information.
The Task Force, which involved senior representatives from 12 federal agencies, met with representatives both within and outside the information sharing environment; state, local and tribal partners; privacy and open government organizations; and members of Congress. The Task Force also analyzed previous studies of SBU and the efforts of the CUI Council.
For more information, visit www.dhs.gov or www.justice.gov. The report can be found online at http://www.dhs.gov/xlibrary/assets/cui_task_force_rpt.pdf
Parent Company of Two New Jersey Hospitals to Pay U.S. $7.95 Million to Settle False Claims Act AllegationsRead the Press Release
WASHINGTON – Our Lady of Lourdes Health Care Services Inc., the parent company of two New Jersey hospitals, has agreed to pay the United States $7.95 million to resolve allegations that the hospitals defrauded Medicare, the Justice Department announced today. The two hospitals are Our Lady of Lourdes Medical Center (OLL) in Camden, N.J., and Lourdes Medical Center of Burlington County (LMC) in Willingboro, N.J.
LMC is a defendant in a suit brought by a whistleblower, Tony Kite, in 2005. The lawsuit alleged that the hospital fraudulently inflated its charges to Medicare patients to obtain enhanced reimbursement from Medicare. 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 give hospitals 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.
The United States conducted a separate investigation of OLL. The government alleged, as a result of that investigation, that the hospital also wrongfully obtained excessive outlier payments.
"As the settlement announced today demonstrates, the Department of Justice is committed to pursuing those who defraud Medicare and drive up the costs of health care," said Assistant Attorney General Tony West, head of the Civil Division of the Department of Justice. Assistant Attorney General West noted that this settlement was the result of the coordinated efforts of the Justice Department’s Civil Division, the U.S. Attorney’s Office for the District of New Jersey, 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 office is committed to protecting the Medicare Trust Fund from fraud and abuse," said Paul J. Fishman, U.S. Attorney for the District of New Jersey.
Mr. Kite brought his suit under the qui tam or 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 $356,000, plus interest, out of the Our Lady of Lourdes Health Care Services settlement.
Michigan Tax Preparers Permanently Barred from Preparing Returns for OthersRead the Press Release
WASHINGTON –The Justice Department today announced that Chief District Judge Paul L. Maloney has permanently barred Joyce M. Stone and Charles J. Freed, both of Tipton, Mich., from preparing income tax returns for others. Judge Maloney, sitting in Kalamazoo, entered the order and judgment, which also bars Stone, Freed and their company, Stone and Associates, from aiding or assisting others in the preparation of income tax returns and from engaging in any other conduct that substantially interferes with the enforcement of the internal revenue laws. Stone and Freed consented to the entry of the permanent injunctions against them.
According to the government’s filings, Stone and Freed prepared customers’ income tax returns claiming improper deductions, including improper deductions for fictitious or inflated charitable contributions and employee expenses. The court previously found that, acting individually or through their business, Stone, Freed and a third defendant prepared more than 3,500 income tax returns since January 2005. An IRS audit of a sample of returns they prepared showed that these returns understated tax liability by an average of $6,283 per return.
Stone and Freed have been barred from preparing income tax returns for others since the entry of a preliminary injunction against them in 2006. In a separate criminal proceeding, Judge Maloney on Nov. 30, 2009, sentenced Stone and Freed to prison for 37 months, to be followed by two years of supervised release. Both pleaded guilty in June 2009 to conspiring to defraud the IRS with respect to their return-preparation activities. At the sentencing hearing, the court found that Stone and Freed had repeatedly violated the preliminary consent injunction by continuing to prepare returns ever after they had been ordered by a federal judge to stop.
In the past decade the Justice Department has obtained injunctions against more than 435 tax-scheme promoters and tax preparers. Information about those cases is available on the Justice Department Web site.
Medicare Fraud Strike Force Expands Operations into Brooklyn, N.Y.; Tampa, Fla.; and Baton Rouge, La.Read the Press Release
Thirty people have been charged in three cities for their alleged roles in schemes to submit more than $61 million in false Medicare claims as part of the continuing operation of the Medicare Fraud Strike Force, Department of Health and Human Services (HHS) Secretary Kathleen Sebelius and Assistant Attorney General Lanny A. Breuer of the Criminal Division announced today. Also today, the Departments of Justice and HHS announced the expansion of Strike Force operations to Brooklyn, Tampa and Baton Rouge in the fifth, sixth and seventh phases of a targeted criminal, civil and administrative effort against individuals and health care companies that fraudulently bill the Medicare program.
Five indictments were unsealed today in Miami, Detroit and Brooklyn, following the arrests of twenty-five individuals in Miami, four individuals in Detroit and one in Brooklyn. In addition, Strike Force agents executed four search warrants at businesses and homes in Coconut Creek, Fla.; Miami and Brooklyn.
The joint DOJ-HHS Medicare Fraud Strike Force is a multi-agency team of federal, state and local investigators designed to combat Medicare fraud through the use of Medicare data analysis techniques and an increased focus on community policing. Strike Force teams are operating in seven cities in the United States: Miami, Los Angeles, Detroit, Houston, Brooklyn, Tampa and Baton Rouge.
"When President Obama took office, he promised a new commitment to cracking down on the criminals who steal billions of dollars from Medicare each year through fraudulent claims," said HHS Secretary Kathleen Sebelius. "Today, HHS and DOJ are following through on that commitment with the announcement of three new Medicare Fraud Strike Force teams in Baton Rouge, Tampa, and in Brooklyn. Along with teams already operating in Miami, Los Angeles, Houston and Detroit, these Strike Force operations will allow us to concentrate our agents and resources on the criminal hubs where we know a significant share of fraud occurs. Medicare is a sacred promise to America’s seniors and we will do everything we can to protect it. The announcement we’re making today is a significant step towards securing Medicare for seniors today and generations to come."
"Medicare fraud schemes are driven by greed – pure and simple," said Assistant Attorney General Lanny A. Breuer of the Criminal Division. "The people who perpetrate these crimes rob Medicare of precious dollars by fraudulently billing for made-up or unnecessary services. In Miami, Los Angeles, Detroit and Houston, the Medicare Fraud Strike Force is making significant progress against these schemes. Through the Strike Force’s proven data analysis, we are now also identifying and prosecuting the worst offenders in Brooklyn, Tampa and Baton Rouge, and we will continue to rid these communities of Medicare fraudsters."
The Strike Force operations in Brooklyn, Tampa and Baton Rouge are another important step of the Health Care Fraud Prevention & Enforcement Action Team (HEAT), a joint initiative announced in May 2009 between the Department of Justice and HHS to focus their joint efforts to reduce and prevent Medicare and Medicaid fraud through enhanced cooperation. The HEAT taskforce is made up of top-level law enforcement agents, prosecutors and staff from both Departments and their operating divisions. In the May 2009 announcement, Attorney General Eric Holder and Secretary Kathleen Sebelius announced the expansion of the Strike Force into Detroit and Houston to build upon existing partnerships between the agencies in a heightened effort to reduce fraud and recover taxpayer dollars.
Individuals charged in indictments announced today are accused of various Medicare fraud crimes, including conspiracy to defraud the Medicare program, conspiracy to launder money, money laundering, criminal false claims, making false statements and receiving kickbacks.
According to charging documents, the defendants participated in schemes to submit claims to Medicare for products and services that were in fact medically unnecessary and oftentimes, never provided. In the Detroit cases, defendants are alleged to have participated in a scheme whereby they paid pay kickbacks to patients who received instructions from the clinic owners and patient recruiters to feign symptoms to justify expensive testing, including nerve conduction studies. In Brooklyn, the two defendants are alleged to have billed Medicare for durable medical equipment, including expensive shoe inserts reserved for diabetes patients, when in fact much cheaper and over-the-counter shoe inserts were provided to beneficiaries who often didn’t need them. In Miami, 15 individuals, including doctors and nurses, are charged in connection with fraudulent claims to Medicare for home health services. In another case in Miami, individuals are charged for their various roles in running a medical clinic that purported to provide injection and infusion treatments to HIV/AIDS patients and submitted fraudulent claims Medicare for such services, which were often medically unnecessary and/or never provided.
Collectively, the physicians, company owners, executives and others charged in the indictments are accused of conspiring to submit approximately $61 million in false claims to the Medicare program.
"The successful HEAT operations today are powerful illustrations of the effectiveness of our interagency Strike Force teams," said Daniel R. Levinson, Inspector General of the Department of Health and Human Services. "They demonstrate our commitment to catching criminals who prey on providers and beneficiaries alike. The addition of Strike Force teams to Brooklyn, Tampa and Baton Rouge, based on extensive data analysis, expands law enforcement’s combined efforts to combat health care fraud."
"Today’s announcement reaffirms the FBI’s commitment to working with our partners in the fight against health care fraud," said Kevin Perkins, Assistant Director of the FBI’s Criminal Investigative Division. "We will continue to dedicate the resources necessary to root out the fraud and bring those perpetrating it to justice. This type of fraud is not victimless - we are all victims when our health care system is defrauded."
Since the inception of Strike Force operations in March 2007 – Miami (Phase One), Los Angeles (Phase Two), Detroit (Phase Three), Houston (Phase Four), and Brooklyn (Phase Five) – the Strike Force has obtained indictments of more than 460 individuals and organizations that collectively have falsely billed the Medicare program for more than one billion dollars. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.
Each of the Strike Force teams is led by a federal prosecutor from the respective U.S. Attorneys’ Office or the Criminal Division’s Fraud Section. Each team has an agent from the FBI and HHS-OIG.
The cases are being prosecuted by Deputy Chief Kirk Ogrosky, Senior Trial Attorney John K. Neal, Trial Attorneys N. Nathan Dimock, Gejaa T. Gobena, Benjamin Singer, Katherine Houston, Michael Padula, and Special Trial Attorney Martha Talley of the Criminal Division’s Fraud Section.
An indictment is merely an allegation, and defendants are presumed innocent until and unless proven guilty.
To learn more about the HEAT team, go to: www.hhs.gov/stopmedicarefraud
Case Summaries
Detroit Fact Sheet
Fact Sheet
Los Angeles Area Tax Preparer Sentenced <br /> to Six Months in Prison for Violating InjunctionRead the Press Release
WASHINGTON – James A. Mattatall of Torrance, Calif., was sentenced yesterday to six months in prison for violating a permanent injunction, the Justice Department and Internal Revenue Service (IRS) announced. U.S. District Judge Dean Pregerson sentenced Mattatall to the maximum sentence allowable under law.
In 2004, a permanent injunction was entered which barred Mattatall from preparing tax returns for others and representing persons before the IRS. In September 2009, Mattatall was convicted of criminal contempt following a one-day trial before Judge Dean Pregerson, who had also entered the injunction against Mattatall.
According to evidence presented at trial, Mattatall violated the injunction by continuing to prepare tax returns and represent customers before the IRS after he was enjoined from doing so. Additionally, Mattatall attempted to evade detection by not signing returns he prepared and by using an alias when representing customers before the IRS.
According to statements made by Judge Pregerson at the sentencing hearing, a maximum sentence was important to accomplish the societal interests in fostering respect for the law and deterring others from breaking the tax laws. The court noted that sending a message that those who violate injunctions will face jail time was an important goal of the sentence. Judge Pregerson cautioned Mattatall not to construct an "alternative universe" that justifies disobeying tax laws, while ordinary taxpayers meet their tax obligations in a law-abiding manner.
"The court’s strong sentence shows there are serious criminal consequences to violating injunctions," said John A. DiCicco, Acting Assistant Attorney General of the Justice Department’s Tax Division. "The Justice Department is committed to prosecuting any enjoined tax preparer or promoter who violates an injunction."
Acting Assistant Attorney General DiCicco commended the efforts of the IRS-Criminal Investigation Division agents who investigated the case, as well as trial attorney Michael Pahl and Assistant U.S. Attorney Robert Conte of the Central District of California, who prosecuted the case.
In the past decade the Justice Department has obtained injunctions against more than 435 tax preparers and tax fraud promoters. Information about these cases is available on the Tax Division Web site.
Former State Department Employee Sentenced<br /> for Illegally Accessing Confidential Passport FilesRead the Press Release
A former State Department employee was sentenced today to 24 months of probation for illegally accessing more than 65 confidential passport application files. Karal Busch, 28, of District Heights, Md., was also ordered by U.S. Magistrate Judge Alan Kay in the District of Columbia to perform 25 hours of community service. Busch pleaded guilty on Aug. 26, 2009, to a one-count criminal information charging her with unauthorized computer access.
According to court documents, Busch worked full-time for the State Department as a citizens services specialist in the Office of Children’s Issues from June 2003 through July 2006. In pleading guilty, Busch admitted that she had access to official State Department computer databases in the regular course of her employment, including the Passport Information Electronic Records System (PIERS), which contains all imaged passport applications dating back to 1994. The imaged passport applications on PIERS contain, among other things, a photograph of the passport applicant as well as certain personal information including the applicant’s full name, date and place of birth, current address, telephone numbers, parent information, spouse’s name and emergency contact information. These confidential files are protected by the Privacy Act of 1974, and access by State Department employees is strictly limited to official government duties.
In pleading guilty, Busch admitted that between March 4, 2004, and June 1, 2006, she logged onto the PIERS database and viewed the passport applications of more than 65 celebrities and their families, actors, professional athletes, musicians, models and other individuals identified in the press. Busch admitted that she had no official government reason to access and view these passport applications, but that her sole purpose in accessing and viewing these passport applications was idle curiosity.
Busch is the ninth current or former State Department employee or contractor to plead guilty in this continuing investigation. On Sept. 22, 2008, Lawrence C. Yontz, a former Foreign Service Officer and intelligence analyst, pleaded guilty to unlawfully accessing nearly 200 confidential passport files. Yontz was sentenced on Dec. 19, 2008, to 12 months of probation and ordered to perform 50 hours of community service. On Jan. 14, 2009, Dwayne F. Cross, a former administrative assistant and contract specialist, pleaded guilty to unlawfully accessing more than 150 confidential passport files. Cross was sentenced on March 23, 2009, to 12 months of probation and ordered to perform 100 hours of community service. On Jan. 27, 2009, Gerald R. Lueders, a former Foreign Service Officer, watch officer and recruitment coordinator, pleaded guilty to unlawfully accessing more than 50 confidential passport files. Lueders was sentenced on July 8, 2009, to 12 months of probation and ordered to pay a $5,000 fine. On July 10, 2009, William A. Celey, a file assistant, pleaded guilty to unlawfully accessing more than 75 confidential passport files. Celey was sentenced on Oct. 23, 2009, to 12 months of probation and ordered to perform 50 hours of community service. On Aug. 17, 2009, Kevin M. Young, a contact representative, pleaded guilty to unlawfully accessing more than 125 confidential passport files. Young was sentenced on Dec. 9, 2009, to 12 months of probation and ordered to perform 100 hours of community service. On Oct. 27, 2009, Yvette M. Burrison, a passport specialist, pleaded guilty to unlawfully accessing nearly 100 confidential passport files. A sentencing date has not yet been scheduled for Burrison. On Nov. 9, 2009, Susan Holloman, a file assistant, pleaded guilty to unlawfully accessing 70 confidential passport files. Holloman is scheduled to be sentenced on Jan. 21, 2010. On Aug. 26, 2009, Debra Sue Brown, a file assistant, pleaded guilty to unlawfully accessing more than 60 confidential passport files. Brown is scheduled to be sentenced on Mar. 23, 2010.
These cases are being prosecuted by Trial Attorney Armando O. Bonilla of the Criminal Division’s Public Integrity Section. The cases are being investigated by the State Department Office of Inspector General.
Former Senate Employee Charged with $75,000 Wire Fraud SchemeRead the Press Release
Ngozi T. Pole, 39, a former office manager in the U.S. Senate, was charged today in a six-count indictment for an alleged scheme to defraud the U.S. Senate of more than $75,000, Assistant Attorney General Lanny A. Breuer of the Criminal Division announced today.
According to the indictment, returned by a federal grand jury in Washington, Pole worked as the office manager for former U.S. Senator Edward M. Kennedy. Pole’s responsibilities included transmitting salary and bonus information to the Senate Disbursing Office in order to adjust the pay of employees in the Senator’s office. According to the indictment, beginning in at least 2003 and continuing until January 2007, Pole repeatedly submitted paperwork causing the Senate to pay him larger salary and bonus payments than had been approved by either the chief of staff or Senator Kennedy. The indictment alleges that the excess payments totaled more than $75,000.
According to the indictment, Pole hid the existence of these unauthorized payments by repeatedly transmitting information to the chief of staff falsely showing that Pole received only those payments which had been authorized. Pole, of Waldorf, Md., is charged with five counts of wire fraud and one count of theft of government property.
Each wire fraud charge carries a maximum prison sentence of 20 years and a $250,000 fine. The theft of government property charge carries a maximum prison sentence of 10 years and a $250,000 fine.
This case is being prosecuted by Trial Attorneys M. Kendall Day and Ethan H. Levisohn of the Public Integrity Section of the Criminal Division. The case is being investigated by the FBI. Senator Kennedy’s Office has cooperated fully with the investigation.
An indictment is only a charge and is not evidence of guilt. The defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Indictment
Terrorism Defendants Sentenced in AtlantaRead the Press Release
Ehsanul Islam Sadequee, 23, of Roswell, Ga., and Syed Haris Ahmed, 25, of Atlanta, were sentenced today in federal court following their convictions earlier this year in separate but related criminal trials, the Justice Department announced.
"With their words and their actions, these defendants supported the wrongheaded but very dangerous idea that armed violence aimed at American interests will force our Government and our people to change our policies. That is terrorism, and it will not succeed," said Sally Quillian Yates, Acting U.S. Attorney for the Northern District of Georgia. "The risk posed by men such as these defendants continues, both here and abroad. Hopefully, meaningful sentences such as these will make our citizens and our soldiers safer around the world as the message is sent that we will vigorously investigate and prosecute those who would ally themselves with terrorists."
In Washington, D.C., David Kris, Assistant Attorney General for the National Security Division, said, "This case serves as another reminder of the global nature of the terrorism threat and the importance of international and domestic cooperation in addressing it. These defendants, who conducted surveillance of potential terror targets at home and pursued terrorist training overseas, were part of an online network that connected extremists in North America, Europe and South Asia. I commend all those who were involved in this prosecution and the related investigations around the world."
FBI Atlanta Special Agent in Charge Greg Jones said, "The radicalization of U.S. citizens by jihadist recruiters abroad is a very real and growing concern that the FBI and the U.S. Government as a whole must deal with. The FBI is charged with preventing terrorist attacks before they occur and we are committed to this task. Individuals engaged in such activities as these two individuals cannot successfully argue that such activities are constitutionally protected."
U.S. District Court Judge William S. Duffey, Jr., sentenced Sadequee to a term of 17 years in prison, to be followed by 30 years of supervised release. Judge Duffey sentenced Ahmed to 13 years in prison, also to be followed by 30 years of supervised release.
According to Acting U.S. Attorney Yates and the evidence presented during the trial: Sadequee was born in Fairfax, Va., in 1986. He attended school in the United States, Canada and Bangladesh. In December 2001, while living in Bangladesh, he sought to join the Taliban, to help them in their fight against U.S. and coalition forces in Afghanistan.
Ahmed, a naturalized citizen born in Pakistan in 1984, came to the United States in the mid-1990s. He attended high school in Roswell and Dawsonville, Ga., followed by college studies at North Georgia College and Georgia Tech.
Sadequee and Ahmed began discussing their obligation to support jihad in late 2004. By this time, both Sadequee and Ahmed had become active on several web forums known to support the cause of violent jihad. These discussions quickly grew into an active conspiracy with others to provide material support to terrorists engaged in violent jihad. The evidence indicated that the material support consisted of (1) Sadequee, Ahmed, and other individuals who intended to provide themselves as personnel to engage in violent jihad, and (2) property, namely, video clips of symbolic and infrastructure targets for potential terrorist attacks in the Washington, D.C., area, including the U.S. Capitol, the World Bank headquarters, the Masonic Temple, and a fuel tank farm -- all of which were taken by Sadequee and Ahmed to be sent to "the jihadi brothers" abroad.
At trial, the government presented evidence that Sadequee, Ahmed, and their co-conspirators used the Internet to develop relationships and maintain contact with each other and with other supporters of violent jihad in the United States, Canada, the United Kingdom, Pakistan and elsewhere. In support of the conspiracy, in March 2005 Sadequee and Ahmed traveled to Toronto to meet with other co-conspirators, including Fahim Ahmad, one of the "Toronto 18" suspects awaiting a terrorism trial in Canada. While in Canada, Sadequee, Ahmed, and their co-conspirators discussed their plans to travel to Pakistan in an effort to attend a paramilitary training camp operated by a terrorist organization, as well as potential targets for terrorist attacks in the United States.
In April 2005, Sadequee and Ahmed drove to the Washington, D.C., area to take the casing videos, which the government’s evidence showed they made to establish their credentials with other violent jihad supporters as well as for use in violent jihad propaganda and planning. Sadequee later sent several of the video clips to Younis Tsouli, aka "Irhabi007" (Arabic for "Terrorist 007"), a propagandist and recruiter for the terrorist organization Al Qaeda in Iraq, and to Aabid Hussein Khan, aka "Abu Umar," a facilitator for the Pakistan-based terrorist organizations "Lashkar-e-Tayyiba" and "Jaish-e-Mohammed." Both Tsouli and Khan have since been convicted of terrorism-related offenses in the United Kingdom and are imprisoned there.
The government’s evidence additionally showed that Sadequee and Aabid Hussein Khan, the convicted U.K.-based terrorist, using a members-only violent jihadist web forum known as "At-Tibyan Publications," recruited at least two individuals to participate in violent jihad. One, a self-identified 17-year-old American convert, was praised by Sadequee for his "capacity of fulfilling [his] largest obligations in [his] native land."
The government also presented evidence at trial that in July 2005, Ahmed traveled from Atlanta to Pakistan in an unsuccessful attempt to enter a paramilitary terrorist training camp and ultimately engage in violent jihad. While in Pakistan, Ahmed met with Aabid Hussein Khan, and the two discussed Ahmed’s intention of joining a camp. The day before Ahmed returned to Atlanta, Sadequee departed Atlanta for Bangladesh, carrying with him, hidden in the lining of his suitcase, an encrypted CD; a map of Washington, D.C., that covered all of the areas he and Ahmed had cased; and a scrap of paper with Aabid Hussein Khan’s mobile phone number in Pakistan.
Once in Bangladesh, Sadequee began to conspire more closely with Younis Tsouli and Mirsad Bektasevic, a Swedish national of Serbian origins. Specifically, Tsouli, Bektasevic, Sadequee and others formed a violent jihadist organization known as "Al Qaeda in Northern Europe." The group was to be based in Sweden. The evidence at trial showed that in October 2005, Sadequee sought a visa that would allow him to relocate from Bangladesh to Sweden. Bektasevic was arrested in Sarajevo, Bosnia and Herzegovina, on Oct. 19, 2005. He and a co-conspirator were found in possession of over 20 pounds of plastic explosives, a suicide belt with detonator, a firearm with a silencer and a video recorded by Bektasevic demonstrating how to make detonators; showing an arsenal of semi-automatic weapons, grenades, explosives and other arms; and depicting Bektasevic and others placing a grenade booby-trap in a forest near Sarajevo. Sadequee had been in electronic and telephonic contact with Bektasevic as recently as three days before Bektasevic’s arrest, discussing the silencer and explosives Bektasevic had acquired for the group. Bektasevic has since been convicted of terrorism offenses in Bosnia and Herzegovina.
Meanwhile, after returning to Atlanta to resume his studies at Georgia Tech in August 2005, Ahmed remained in contact with Sadequee, expressed regret at his failure to join violent jihadists, conducted internet research on topics such as high explosives and defeating Special Operations troops, and discussed his intent to make another attempt to enter a violent jihad training camp. In March 2006, Ahmed was approached by FBI agents and agreed to a series of voluntary, non-custodial interviews over the course of eight days. Amid efforts to deny his illegal activities and mislead the agents, Ahmed made increasingly incriminating statements. Efforts by the FBI to obtain Ahmed’s cooperation in the ongoing international terrorism investigation ended after the FBI discovered that Ahmed was surreptitiously contacting Sadequee, who was still in Bangladesh, to advise him of the FBI investigation and to warn him not to return to the United States.
Ahmed was arrested on March 23, 2006, in Atlanta, on material support of terrorism charges. He has been in custody ever since.
Sadequee was arrested on April 20, 2006, in Bangladesh, on charges arising out of false statements he made in an August 2005 interview with the FBI in the Eastern District of New York (EDNY). Sadequee was indicted in the Northern District of Georgia on July 19, 2006, and transferred to Atlanta in August of that year, after the charges in EDNY were dismissed at the Government’s request.
This case was investigated by agents and officers of the Atlanta Joint Terrorism Task Force (JTTF), which is led by the FBI, Atlanta Division.
Assistant U.S. Attorneys Robert McBurney, Alexis Collins and Christopher Bly prosecuted the case.
North Dakota Executive Sentenced to Prison for Tax FraudRead the Press Release
WASHINGTON - Micheal Fisher, a former co-owner of Fisher Sand & Gravel Co. Inc. (FSG) based in Dickinson, N.D., was sentenced to 37 months in prison today by Judge Daniel L. Hovland in Bismark, N.D., the Justice Department and Internal Revenue Service (IRS) announced. Judge Hovland also ordered Fisher to pay a $90,000 fine and to pay restitution of $308,069.
On May 29, 2009, Fisher pleaded guilty to conspiracy to defraud the United States by impeding the IRS, four counts of aiding in the filing of false federal tax returns for FSG and four counts of filing false individual tax returns.
In October 2008, Amiel Schaff, FSG’s former chief financial officer, pleaded guilty to one count of conspiracy to defraud the United States. In May 2009, Clyde Frank, FSG’s former comptroller, pleaded guilty to one count of conspiracy to defraud the United States. FSG was also charged in the superseding indictment with conspiracy to defraud the United States. In May 2009, the United States reached a deferred prosecution agreement with FSG in which FSG admitted responsibility for defrauding the United States. The agreement requires FSG to pay a total of $1.16 million in restitution, penalties and fines, implement measures to prevent future fraud at the company and cooperate with the IRS in audits of its tax returns. Under that agreement, prosecution against FSG is deferred until December 2011.
According to court documents and testimony, Micheal Fisher caused FSG employees to pay for personal expenses such as construction expenses and furnishings for his personal residence and a recreation building, construction expenses for improvements to Tiger Discount, a gas station owned and controlled by Fisher, as well as household and utility bills, vacations, credit card bills and legal expenses for him and other Fisher family members. According to court documents and testimony, these payments for Fisher were never reported to the IRS, they were deducted on the FSG corporate income tax returns, and Fisher failed to report all of his income on his individual income tax returns.
In October 2009, Judge Hovland sentenced Schaff and Frank each to 12 months probation with a condition of home confinement. Judge Hovland also imposed a $1,000 fine on each co-defendant and ordered both Schaff and Frank to complete 20 hours of community service by speaking to college students about the criminal offense to which they pleaded guilty and corporate fraud in general.
"As tax filing season approaches, U.S. taxpayers should be aware of the serious consequences facing those who fail to honestly and accurately report their income to the IRS," said John A. DiCicco, Acting Assistant Attorney General of the Justice Department’s Tax Division. "Those who fly in the face of the tax laws face investigation, prosecution, and if convicted, significant prison sentences and substantial fines."
"IRS Criminal Investigation is committed to investigating individuals who use their corporations as personal piggy banks," said Eileen Mayer, Chief, IRS Criminal Investigation. "Mr. Fisher used his position of power to defraud not just his own company, but the honest, hardworking Americans that pay their tax obligations."
Acting Assistant Attorney General DiCicco thanked the U.S. Attorney’s Office for the District of North Dakota for their assistance in this case. He also thanked the IRS Criminal Investigation agents who investigated the case, as well as Tax Division trial attorneys Christopher S. Strauss and Michael J. Watling who prosecuted the case.
Physical Therapist, Money Launderer and<br /> Patient Recruiter Plead Guilty in Connection <br /> with Multiple Detroit Health Care Fraud SchemesRead the Press Release
WASHINGTON – Detroit-area residents Baskaran Thangarasan, Sandeep Aggarwal and Wayne Smith pleaded guilty this week for their roles in connection with several Detroit-area health care fraud schemes, Assistant Attorney General Lanny Breuer of the Criminal Division, U.S. Attorney for the Eastern District of Michigan Terrence I. Berg, Special Agent in Charge Andrew G. Arena of the FBI’s Detroit Field Office and Daniel Levinson, Inspector General for the U.S. Department of Health and Human Services (HHS) announced today.
Thangarasan, 37, pleaded guilty on Dec. 9, 2009, to one count of conspiracy to commit health care fraud before U.S. District Judge Sean F. Cox of the Eastern District of Michigan. Aggarwal, 38, pleaded guilty Dec. 9, 2009, before Judge Cox to one count of conspiracy to launder money. Smith, 47, pleaded guilty yesterday to one count of conspiracy to commit health care fraud before Chief U.S. District Judge Gerald E. Rosen. At sentencing, Thangarasan and Smith face a maximum sentence of 10 years in prison and a $250,000 fine; Aggarwal faces a maximum sentence of 20 years in prison and a $500,000 fine.
According to information contained in plea documents, Thangarasan, a licensed physical therapist, admitted that he began working in approximately September 2003 as a contract therapist for a co-conspirator. This co-conspirator owned and controlled several companies operating in the Detroit area that purported to provide physical and occupational therapy services to Medicare beneficiaries. Thangarasan admitted that he, the co-conspirator and others created fictitious therapy files appearing to document physical therapy services provided to Medicare beneficiaries, when in fact no such services had been provided. According to court documents, the fictitious services reflected in the files were billed to Medicare through sham Medicare providers controlled by Thangarasan’s co-conspirators.
Thangarasan admitted that his role in creating the fictitious therapy files was to sign documents and progress notes indicating he had provided physical therapy services to particular Medicare beneficiaries, when in fact he had not. Thangarasan was paid approximately $50 by co-conspirators per file that he falsified in this manner. Thangarasan also admitted that in the course of the scheme charged in the indictment, he signed approximately 1,011 fictitious physical therapy files, falsely indicating he had provided physical therapy services to Medicare beneficiaries. Thangarasan admitted he knew that the files he helped falsify were used to justify fraudulent billings to Medicare.
In addition, Thangarasan admitted that between approximately September 2003 and May 2006, his co-conspirators submitted claims to the Medicare program totaling approximately $5,055,000 for files that were falsified by Thangarasan. Medicare actually paid approximately $2,325,000 on those claims. Thangarasan admitted that throughout the conspiracy, he was fully aware that Medicare was being billed for occupational therapy services he had falsely indicated he had performed.
In his plea in the same case, Aggarwal admitted to assisting co-conspirator Suresh Chand in laundering the proceeds of Chand’s Medicare fraud scheme. Chand, who pleaded guilty in September 2009 to conspiracy to commit health care fraud and conspiracy to launder money, admitted to conspiring to submit approximately $18 million in fraudulent physical and occupational therapy claims to the Medicare program. Aggarwal, who admitted working at Chand’s office, acknowledged that his role in the scheme was to set up sham entities at Chand’s direction, with the purpose of using those entities to distribute the proceeds of the fraud to the various co-conspirators. According to plea documents, one such entity was called Global Health Care Management Services. Aggarwal admitted that Global Health Care Management Services, which he helped create, provided no health or management services of any type, but existed solely as a mechanism to conceal the location of fraudulently obtained Medicare proceeds. Aggarwal admitted in his plea that he and Chand laundered approximately $393,000 through this sham entity.
Smith pleaded guilty to an indictment that charged he transported and paid Medicare beneficiaries to attend Sacred Hope Center, a Southfield, Mich.-infusion clinic. According to the indictment, t he beneficiaries he paid and transported were paid to sign paperwork indicating that they had received infusions and injections of specialty medications that they did not in fact receive.
According to the indictment, Sacred Hope Center routinely billed the Medicare program for services that were medically unnecessary and/or never provided. The primary owners and operators of Sacred Hope Center have pleaded guilty and admitted purchasing only a small fraction of the medications that the clinic billed the Medicare program for providing. These co-conspirators have also stated that patients were prescribed medications at the clinic based not on medical need, but instead based on which medications were likely to generate Medicare reimbursements.
These cases are being prosecuted by Senior Trial Attorney John K. Neal and Trial Attorney Benjamin D. Singer of the Criminal Division’s Fraud Section and by Special Assistant U.S. Attorney Thomas W. Beimers of the Eastern District of Michigan. The cases are being investigated by the FBI and the HHS Office of the Inspector General. Theses cases were brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and U.S. Attorney’s Office for the Eastern District of Michigan.
Since the inception of Strike Force operations in March 2007 – Miami (Phase One), Los Angeles (Phase Two), Detroit (Phase Three), and Houston (Phase Four) – the Strike Force has obtained indictments of more than 331 individuals and organizations that collectively have billed the Medicare program for more than $720 million. 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.
Each of the Strike Force teams across the separate phases are led by a federal prosecutor from the Criminal Division’s Fraud Section or the U.S. Attorney’s Office. Each team has an agent from the FBI and HHS-OIG.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team, go to: www.stopmedicarefraud.gov
Ninth Person Pleads Guilty to<br /> Illegally Accessing Confidential Passport FilesRead the Press Release
A ninth individual pleaded guilty today to illegally accessing numerous confidential passport application files, Assistant Attorney General Lanny A. Breuer of the Criminal Division announced. Debra Sue Brown, 47, of Oxon Hill, Md., pleaded guilty before U.S. Magistrate Judge John M. Facciola in the District of Columbia to a one-count criminal information charging her with unauthorized computer access. Brown is scheduled to be sentenced on Mar. 23, 2010.
According to court documents, Brown has worked full-time for the State Department since Sept. 1995 as a file clerk and a file assistant in the Bureau of Consular Affairs. In pleading guilty, Brown admitted that she had access to official State Department computer databases in the regular course of her job, including the Passport Information Electronic Records System (PIERS), which contains all imaged passport applications dating back to 1994. The imaged passport applications on PIERS contain, among other things, a photograph of the passport applicant as well as certain personal information including the applicant’s full name, date and place of birth, current address, telephone numbers, parent information, spouse’s name and emergency contact information. These confidential files are protected by the Privacy Act of 1974, and access by State Department employees is strictly limited to official government duties.
Brown admitted that between Mar. 25, 2005, and Feb. 7, 2008, she logged onto the PIERS database and repeatedly searched for and viewed the passport applications of more than 60 celebrities and their families, actors, comedians, professional athletes, musicians, other individuals identified in the press, and personal friends and acquaintances. Brown admitted that she had no official government reason to access and view these passport applications, but that her sole purpose in accessing and viewing these passport applications was idle curiosity.
Brown is the ninth current or former State Department employee or contractor to plead guilty in this continuing investigation. On Sept. 22, 2008, Lawrence C. Yontz, a former Foreign Service Officer and intelligence analyst, pleaded guilty to unlawfully accessing nearly 200 confidential passport files. Yontz was sentenced on Dec. 19, 2008, to 12 months of probation and ordered to perform 50 hours of community service. On Jan. 14, 2009, Dwayne F. Cross, a former administrative assistant and contract specialist, pleaded guilty to unlawfully accessing more than 150 confidential passport files. Cross was sentenced on March 23, 2009, to 12 months of probation and ordered to perform 100 hours of community service. On Jan. 27, 2009, Gerald R. Lueders, a former Foreign Service Officer, watch officer and recruitment coordinator, pleaded guilty to unlawfully accessing more than 50 confidential passport files. Lueders was sentenced on July 8, 2009, to 12 months of probation and ordered to pay a $5,000 fine. On July 10, 2009, William A. Celey, a file assistant, pleaded guilty to unlawfully accessing more than 75 confidential passport files. Celey was sentenced on Oct. 23, 2009, to 12 months of probation and ordered to perform 50 hours of community service. On Aug. 17, 2009, Kevin M. Young, a contact representative, pleaded guilty to unlawfully accessing more than 125 confidential passport files. Young was sentenced on Dec. 9, 2009, to 12 months of probation and ordered to perform 100 hours of community service. On Aug. 26, 2009, Karal Busch, a former citizens services specialist, pleaded guilty to unlawfully accessing more than 65 confidential passport files. Busch is scheduled to be sentenced on Dec. 15, 2009. On Oct. 27, 2009, Yvette M. Burrison, a passport specialist, pleaded guilty to unlawfully accessing nearly 100 confidential passport files. A sentencing date has not yet been scheduled for Burrison. On Nov. 9, 2009, Susan Holloman, a file assistant, pleaded guilty to unlawfully accessing 70 confidential passport files. Holloman is scheduled to be sentenced on Jan. 21, 2010.
These cases are being prosecuted by Trial Attorney Armando O. Bonilla of the Criminal Division's Public Integrity Section. The cases are being investigated by the State Department Office of Inspector General.
Former Navy Master Chief Petty Officer Sentenced to Four Years in Prison for Participating in Scheme to Steal Large Quantities of Fuel from U.S. Army in IraqRead the Press Release
Robert Jeffery, 55, a former master chief petty officer in the U.S. Navy, was sentenced today to four years in prison for his participation in a scheme to steal approximately 10 million gallons of fuel from the U.S. Army in Iraq, announced Assistant Attorney General of the Criminal Division Lanny A. Breuer and U.S. Attorney for the Eastern District of Virginia Neil H. MacBride.
Jeffery, a U.S. citizen who resided in the Philippines until his arrest in connection with this case, was also sentenced today by U.S. District Court Judge Claude M. Hilton in the Eastern District of Virginia to forfeit $66,500 and to pay $16, 757, 673 in restitution, jointly and severally with his co-conspirators. Jeffery was also sentenced to two years of supervised release following his prison term. Jeffery was convicted by a federal jury on Aug. 11, 2009, after a two-day trial on one count of conspiracy and one count of theft of government property.
According to the evidence presented at trial, from February 2008 through May 2008, Jeffery and his co-conspirators, purportedly representing Department of Defense contractors in Iraq, used fraudulently-obtained documents to enter the Victory Bulk Fuel Point (VBFP) in Camp Liberty, Iraq, and presented false fuel authorization forms to steal aviation and diesel fuel from the VBFP for subsequent sale on the black market. The United States owns and operates the VBFP in support of Operation Iraqi Freedom. The VBFP supplies fuel to both military units and U.S. government contractors operating in and around the Victory Base Complex. The evidence at trial showed that Jeffery served as an escort for the fuel trucks and retrieved hundreds of thousands of gallons of fuel from the VBFP based on fraudulent fuel authorization forms. Jeffery received approximately $66,000 in personal profits from the scheme.
In related cases, Robert Young pleaded guilty on July 24, 2009, to participating in the same scheme. In his plea, Young admitted that he and his co-conspirators employed several individuals to serve as drivers and escorts of the trucks containing the stolen fuel. Young admitted that he received approximately $1 million in personal profits from the scheme. On Nov. 6, 2009, Young was sentenced to 97 months in prison.
Lee William Dubois pleaded guilty on Oct. 7, 2008, to participating in the same scheme. In his plea, Dubois admitted that he obtained government-issued common access cards for the drivers and escorts of the trucks and also presented false documents to the VBFP authorizing his co-conspirators to draw fuel. Dubois admitted that he received at least $450,000 in personal profits from the scheme. On Aug. 25, 2009, Dubois was sentenced to 36 months in prison.
Michel Jamil pleaded guilty on July 27, 2009, in connection with his role in the theft scheme. Jamil admitted that in March 2007, he and two of his co-conspirators arranged for the creation of a false fuel authorization form authorizing individuals to draw fuel from the VBFP. Jamil also admitted to serving as an escort for the fuel trucks to retrieve the fuel from the VBFP. Jamil admitted he received between $75,000 and $87,500 in personal profits from the scheme. Jamil’s sentencing is scheduled for Feb. 12, 2010.
The case is being prosecuted by Special Assistant U.S. Attorney Steve Linick, Deputy Chief of the Criminal Division’s Fraud Section, and Fraud Section Trial Attorneys Andrew Gentin and Brigham Cannon. The investigation of this case was conducted by the U.S. Army Criminal Investigation Command, the Defense Criminal Investigative Service, the FBI, 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 Afghanistan, Iraq and Kuwait.
Woonsocket, Rhode Island, Police Officer Indicted on Federal Civil Rights ChargesRead the Press Release
WASHINGTON – A federal grand jury in Providence, R.I., has indicted an officer with the Woonsocket Police Department, charging him with violating the civil rights of a 16 year-old juvenile by physically assaulting him, as well as obstruction of justice.
The indictment alleges that on Sep. 15, 2009, Officer John H. Douglas punched, struck and otherwise assaulted the juvenile and then sought to persuade fellow officers who witnessed the assault to provide a false justification to law enforcement officers investigating the incident.
The indictment was returned on Dec. 9 and was unsealed following Douglas’ arrest today by FBI agents with assistance by Woonsocket Police. If convicted, the defendant faces a maximum penalty of 10 years in prison for the civil rights violation, 20 years in prison for the obstruction violation and a $250,000 fine for each count.
This case was investigated by Special Agent James Pitcavage of the Rhode Island Division of the FBI. The case is being prosecuted by Assistant U.S. Attorneys John McAdams and Terrence Donnelly, and Civil Rights Division Trial Attorney Avner Shapiro.
An indictment is merely an accusation and defendants are presumed innocent unless proven guilty.
Statement by Attorney General Eric Holder and Education Secretary Arne Duncan<br /> on Joint Study on School Crime and SafetyRead the Press Release
"The study released today shines a light on a problem too often in the dark – youth violence. Schools should be safe havens where young people can learn and prosper, and anything less than that is unacceptable. We’ve met with students affected by the fatal beating of Derrion Albert in Chicago and brought teens struggling with the issue of dating violence here to Washington. Through these conversations, research like the study released today, and an intense focus on vital policy issues, we are gathering the tools necessary to address this problem effectively. In the coming year, the Departments of Education and Justice will work side-by-side with our local and community partners, bringing all of our combined resources to bear, to help stem the tide of youth violence.
"Eradicating youth violence is a priority of this administration and a priority of both these agencies. As cabinet officials, as concerned citizens and most importantly, as fathers, we are committed to continuing our work to eliminate youth violence."
The study can be found at http://www.ojp.usdoj.gov/bjs/abstract/iscs09.htm.
Largest Environmental Bankruptcy in U.S. History Will Result in Payment of $1.79 Billion Towards Environmental Cleanup & RestorationRead the Press Release
WASHINGTON—As a result of the largest environmental bankruptcy in U.S. history, $1.79 billion has been paid to fund environmental cleanup and restoration under a bankruptcy reorganization of American Smelting and Refining Company LLC (ASARCO), the Justice Department, Environmental Protection Agency, Department of the Interior and Department of Agriculture announced today.
ASARCO is a leading producer of copper and one of the largest nonferrous metal producers in the United States. It is based in Arizona and is responsible for sites around the country that are contaminated with hazardous waste.
The money from environmental settlements in the bankruptcy will be used to pay for past and future costs incurred by federal and state agencies at more than 80 sites contaminated by mining operations in 19 states. Those states are Arizona, Alabama, Arkansas, California, Colorado, Idaho, Illinois, Indiana, Kansas, Missouri, Montana, Nebraska, New Jersey, New Mexico, Ohio, Oklahoma, Texas, Utah, and Washington.
"The effort to recover this money was a collaborative and coordinated response by the states and federal government. Our combined efforts have resulted in the largest recovery of funds to pay for past and future clean up of hazardous materials in the nation’s history. Today is a historic day for the environment and the people affected across the country," said Associate Attorney General Tom Perrelli.
"Today’s landmark enforcement settlement will provide almost one billion dollars to clean up polluted Superfund sites," said Cynthia Giles, Assistant Administrator for the EPA’s Office of Enforcement and Compliance Assurance. "This will mean cleaner land, water and air for communities across the country."
"This settlement exemplifies government at all levels working effectively for the American taxpayer to recover damages from polluters and restore and protect important national landscapes and significant wildlife resources that have been injured," said Interior Assistant Secretary Tom Strickland. "In consultation and collaboration with our state and tribal co-trustees, this money will be used exclusively to restore, replace or acquire the equivalent of resources injured at more than a dozen sites where ASARCO operated and we have identified natural resource damage."
"I would like to thank the Department of Justice, the Environmental Protection Agency and USDA Office of General Counsel for their diligence in reaching this comprehensive settlement that will so benefit restoration of public lands," said Joel Holtrop, Deputy Chief for the National Forest System, U.S. Forest Service, Department of Agriculture. "This settlement provides significant resources to address land restoration from past mining activities on National Forest System lands in Arizona, California, Idaho, Montana and Washington."
Under the terms of the plan, all allowed claims were paid in full along with interest. Funds were distributed as follows:
- The United States received approximately $776 million which will be distributed in accordance with the underlying settlements to address over 35 different sites;
- The Coeur d’Alene Work Trust was paid $436 million;
- The three custodial trusts—which address the owned but not operating properties of ASARCO and involve a total of 13 states and 24 sites - were paid a cumulative total of approximately $261 million; and
- Payments totaling in excess of $321 million were paid to 14 different states to fund environmental settlement obligations at over 36 individual sites.
In total, the payment will address environmental cleanup and restoration at more than 80 sites around the country. Much of the money paid to the United States will be placed in special accounts in the Superfund to be used by EPA to pay for future cleanup work. It will also be placed into accounts at the Department of Interior and the Department of Agriculture to pay for natural resource restoration.
ASARCO filed for protection under Chapter 11 of the U.S. bankruptcy code on Aug. 9, 2005. American Smelting and Refining Company or ASARCO has operated for nearly 110 years—first as a holding company for diverse smelting, refining, and mining operations throughout the United States and now as the Arizona-based integrated copper-mining, smelting, and refining company.
By the time it filed for bankruptcy, ASARCO’s core operating assets were limited to certain operations in the states of Arizona and Texas. However, it continued to own numerous non-operating properties that were highly contaminated and was subject to environmental claims at sites that were not owned by the company.
In August 2009, following lengthy litigation, the U.S. Bankruptcy Court for the Southern District of Texas held a two-week hearing on competing plans of reorganization for ASARCO that would allow the company to be purchased out of bankruptcy. During this hearing, two competing plans emerged that proposed to pay creditors in full with interest.
On Aug. 31, 2009, Judge Richard Schmidt of the U.S. Bankruptcy Court in Corpus Christi issued a recommendation to the U.S. District Court for the Southern District of Texas to confirm the plan proposed by ASARCO’s parent company—a subsidiary of Grupo Mexico. U.S. District Judge Andrew Hanen in Brownsville accepted Judge Schmidt’s recommendation and confirmed Grupo Mexico’s plan on Nov. 13, 2009.
On Dec. 9, 2009, Grupo Mexico met its funding obligations and the plan was consummated. Additionally, the environmental payment and property transfer obligations outlined in the numerous settlement agreements, which had been approved by the Bankruptcy Court over the course of the litigation, were complied with.
The full payment of environmental claims, plus interest, will facilitate the cleanup of contamination and restoration of natural resources at numerous sites across the country. The reorganized company remains liable for environmental liabilities at the properties that it will continue to own and operate.
Ft. Worth, Texas, Couple Charged with Holding Nigerian Woman in Domestic ServitudeRead the Press Release
WASHINGTON – A federal grand jury has indicted a Ft. Worth, Texas, husband and wife, Emmanuel and Ngozi Nnaji, on charges of engaging in a nine-year scheme to compel the labor of a Nigerian victim as their domestic servant, the Justice Department announced today.
According to the seven-count indictment returned late yesterday, which charges the defendants with conspiracy, forced labor, document servitude, alien harboring and false statements, Emmanuel Nnaji and Ngozi Nnaji enticed a widowed Nigerian mother of six to come to the United States to be their domestic servant by falsely promising a salary and support for her children, who she was struggling to support.
The indictment alleges that the defendants procured fraudulent immigration documents, confiscated the victim’s documents, harbored her in their home, compelled her to work long hours with no days off for little or no pay, used a scheme to isolate her and restrict her communications, withheld her documents and pay, and refused her requests to return home or be paid. The indictment also alleges the defendants failed to provide support for the victim’s six children in Nigeria, limited and monitored contact with her family in Nigeria, isolated her from normal society in the United States, and refused to allow her to regularly attend church. The indictment alleges Emmanuel Nnaji sexually assaulted the victim and made her fearful to call the police.
If convicted, Ngozi and Emmanuel Nnaji each face a maximum sentence of up to 55 years in prison. An indictment is merely an allegation and defendants are presumed innocent until proven guilty. Ngozi Nnaji, a Nigerian national, faces deportation following conviction on any of the charged felonies.
This case is being investigated by the FBI and prosecuted by Trial Attorney Susan French of the Civil Rights Division’s Human Trafficking Prosecution Unit.
Former DOD Contracting Officer Sentenced to 110 Months in Prison for Filing False Tax ReturnsRead the Press Release
WASHINGTON – A former civilian employee of the U.S. Department of Defense was sentenced today to 110 months in prison for filing false tax returns in which he failed to report more than $2.4 million in income, announced Assistant Attorney General of the Criminal Division Lanny A. Breuer and Assistant Attorney General of the Antitrust Division Christine A. Varney.
Tijani Ahmed Saani, 53, was also ordered to pay a $1.6 million fine and serve one year of supervised release following his prison term. Saani was also ordered to pay $816,485 in restitution to the Internal Revenue Service (IRS). Saani was sentenced in U.S. District Court for the District of Columbia by Judge Richard J. Leon.
Saani, a former resident of Kuwait City, Kuwait, and dual U.S./Ghanaian citizen, pleaded guilty on June 25, 2009, to five counts of filing false tax returns, one for each tax year from 2003 through 2007. According to court documents, Saani admitted failing to report at least $2.4 million in taxable income during this time, while he served in Kuwait as a contracting officer for the Department of Defense. According to the indictment to which Saani pleaded guilty, he worked on detail from 2002 until 2007 at Camp Arifjan, Kuwait. Saani also admitted he failed to report his ownership interest in foreign bank accounts in five different countries, including Ghana, Switzerland, the Jersey Channel Islands, the Netherlands and the United Kingdom. Saani used these accounts to help conceal his unreported income, and to send and receive wire transfers totaling more than $3.5 million.
This case is being prosecuted by Trial Attorneys Richard B. Evans and Kathryn H. Albrecht of the Criminal Division’s Public Integrity Section and Trial Attorneys Mark W. Pletcher, Emily W. Allen and Ryan Danks of the Antitrust Division’s National Criminal Enforcement Section. Assistance was also provided by the Criminal Division’s Office of International Affairs.
The case is being investigated by IRS – Criminal Investigation, Army Criminal Investigation Division, Defense Criminal Investigative Service, U.S. Immigration and Customs Enforcement, the FBI and the Special Inspector General for Iraq Reconstruction.
Today’s sentencing is part of the Department’s ongoing investigation into procurement fraud in Iraq and Afghanistan. The Department’s National Procurement Fraud Initiative, announced in October 2006, is designed to promote the early detection, identification, prevention and prosecution of procurement fraud associated with the increase in contracting activity for national security and other government programs.
Anyone with information concerning bid rigging, bribery or other criminal conduct regarding DOD contracts is urged to call the Defense Criminal Investigative Service at 800-424-9098 or [email protected]; Army Criminal Investigation Division at www.cid.army.mil; or the FBI at 800-225-5324.
United States Transfers One Guantanamo Bay Detainee to KuwaitRead the Press Release
Fouad Mahmoud al-Rabiah, a Kuwaiti national, has been transferred from the detention facility at Guantanamo Bay to the control of the government of Kuwait.
As directed by the President’s Jan. 22, 2009 Executive Order, the interagency Guantanamo Review Task Force conducted a comprehensive review of this case. As a result of that review, the detainee was approved for transfer from Guantanamo Bay. 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.
On Sept. 17, 2009, a federal court ruled that al-Rabiah may no longer be detained under the Authorization for the Use of Military Force and ordered the government to release him from detention at Guantanamo Bay.
This transfer was carried out under an arrangement between the United States and the government of Kuwait. The United States will continue to consult with the government of Kuwait regarding this individual.
Since 2002, more than 550 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, Spain, Sweden, Sudan, Tajikistan, Turkey, Uganda, United Kingdom and Yemen.
Taiwan LCD Producer Agrees to Plead Guilty and Pay $220 Million Fine for Participating in LCD Price-Fixing ConspiracyRead the Press Release
WASHINGTON – A Thin-Film Transistor-Liquid Crystal Display (TFT-LCD) producer and seller has agreed to plead guilty and pay $220 million in criminal fines for its role in a conspiracy to fix prices in the sale of liquid crystal display panels, the Department of Justice announced today.
According to a one-count felony charge filed today in U.S. District Court in San Francisco, Chi Mei Optoelectronics participated in a conspiracy to fix the prices of TFT-LCD panels sold worldwide from Sept. 14, 2001, to Dec. 1, 2006. According to the plea agreement, which is subject to court approval, Chi Mei has agreed to cooperate with the department’s ongoing antitrust investigation.
TFT-LCD panels are used in computer monitors and notebooks, televisions, mobile phones and other electronic devices. By the end of the conspiracy period, the worldwide market for TFT-LCD panels was valued at $70 billion. Companies directly affected by the LCD price-fixing conspiracy are some of the largest computer and television manufacturers in the world, including Apple, Dell and HP.
According to the charge, Chi Mei carried out the conspiracy by agreeing during meetings, conversations and communications to charge prices of TFT-LCD panels at certain pre-determined levels and issuing price quotations in accordance with the agreements reached. As a part of the conspiracy, Chi Mei exchanged information on sales of TFT-LCD panels for the purpose of monitoring and enforcing adherence to the agreed-upon prices.
Chi Mei, which is based in Tainan, Taiwan, is charged with price fixing in violation of the Sherman Act. Each violation carries a maximum fine of $100 million for corporations. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.
Including today’s charges, as a result of this investigation, six companies have pleaded guilty or have agreed to plead guilty and have been sentenced to pay or have agreed to pay criminal fines totaling more than $860 million. Additionally, nine executives have been charged to date in the department’s ongoing investigation.
Today’s charge is the result of a joint investigation by the Department of Justice Antitrust Division’s San Francisco Field Office and the FBI in San Francisco.
Anyone with information concerning illegal conduct in the TFT-LCD industry is urged to call the Antitrust Division’s San Francisco Field Office at 415-436-6660.
State Department Employee Sentenced<br /> for Illegally Accessing Confidential Passport FilesRead the Press Release
A State Department employee was sentenced today to 12 months of probation for illegally accessing more than 125 confidential passport application files. Kevin M. Young, 42, of Temple Hills, MD, was also ordered by U.S. Magistrate Judge Alan Kay in the District of Columbia to perform 100 hours of community service. Young pleaded guilty on Aug. 17, 2009, to a one-count criminal information charging him with unauthorized computer access.
According to court documents, Young has worked full-time for the State Department since February 1987. He has been a contact representative for the Passport Special Issuance Agency for the last eight years. In pleading guilty, Young admitted he had access to official State Department computer databases in the regular course of his employment, including the Passport Information Electronic Records System (PIERS), which contains all imaged passport applications dating back to 1994. The imaged passport applications on PIERS contain, among other things, a photograph of the passport applicant as well as certain personal information including the applicant’s full name, date and place of birth, current address, telephone numbers, parent information, spouse’s name and emergency contact information. These confidential files are protected by the Privacy Act of 1974, and access by State Department employees is strictly limited to official government duties.
In pleading guilty, Young admitted that between March 11, 2003, and Dec. 21, 2005, he logged onto the PIERS database and viewed the passport applications of more than 125 celebrities, actors, comedians, professional athletes, musicians, models, a politician and other individuals identified in the press. Young admitted that he had no official government reason to access and view these passport applications, but that his sole purpose in accessing and viewing these passport applications was idle curiosity.
Young is the eighth current or former State Department employee or contractor to plead guilty in this continuing investigation. On Sept. 22, 2008, Lawrence C. Yontz, a former Foreign Service Officer and intelligence analyst, pleaded guilty to unlawfully accessing nearly 200 confidential passport files. Yontz was sentenced on Dec. 19, 2008, to 12 months of probation and ordered to perform 50 hours of community service. On Jan. 14, 2009, Dwayne F. Cross, a former administrative assistant and contract specialist, pleaded guilty to unlawfully accessing more than 150 confidential passport files. Cross was sentenced on March 23, 2009, to 12 months of probation and ordered to perform 100 hours of community service. On Jan. 27, 2009, Gerald R. Lueders, a former Foreign Service Officer, watch officer and recruitment coordinator, pleaded guilty to unlawfully accessing more than 50 confidential passport files. Lueders was sentenced on July 8, 2009, to 12 months of probation and ordered to pay a $5,000 fine. On July 10, 2009, William A. Celey, a file assistant, pleaded guilty to unlawfully accessing more than 75 confidential passport files. Celey was sentenced on Oct. 23, 2009, to 12 months of probation and ordered to perform 50 hours of community service. On Aug. 26, 2009, Karal Busch, a former citizens services specialist, pleaded guilty to unlawfully accessing more than 65 confidential passport files. Busch is scheduled to be sentenced on Dec. 15, 2009. On Oct. 28, 2009, Yvette M. Burrison, a passport specialist, pleaded guilty to unlawfully accessing nearly 100 confidential passport files. A sentencing date has not yet been scheduled for Burrison. On Nov. 9, 2009, Susan Holloman, a file assistant, pleaded guilty to unlawfully accessing 70 confidential passport files. Holloman is scheduled to be sentenced on Jan. 21, 2010.
These cases are being prosecuted by Trial Attorney Armando O. Bonilla of the Criminal Division’s Public Integrity Section. The cases are being investigated by the State Department Office of Inspector General.
Polembros Shipping Ltd. Sentenced for Crimes Related to Pollution from Cargo Ship Traveling to New OrleansRead the Press Release
Polembros Shipping LTD., a ship management company headquartered in Greece, was sentenced today in federal court in New Orleans to pay a $2.7 million criminal fine for violating anti-pollution laws, ship safety laws, and making false statements during a U.S. Coast Guard investigation of the M/V Theotokos, the Justice Department announced.
Additionally, Polembros was ordered to pay a separate $100,000 community service payment to the Smithsonian Environmental Research Center, a subunit of Smithsonian Institute. The money will be used to research and mitigate the effects of marine invasive species suspected to be transported in ballast waters of ocean-going vessels. Invasive species can threaten native species and damage the ecosystems of the United States.
The court further ordered Polembros to serve three years probation. As a condition of the probation, all ships owned or managed by Polembros, currently 20 vessels, will be barred from entering U.S. ports and territorial waters for three years.
Additionally, the Court awarded a total of $540,000 to nine former crew members of the Theotokos who extensively cooperated in the investigation and gave information that led to the guilty plea and conviction of Polembros. Congress granted courts the power to award a "monetary payment" or "whistleblower award" for up to one-half of any criminal fine imposed under the Act to Prevent Pollution from Ships.
"The terms of probation and penalties imposed by the court will prevent the company from putting the health of the territorial ports and waterways of the United States at risk while the company benefits from economic activity in our Nation’s waters," said Ignacia S. Moreno, Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. "The industry should take notice that the Justice Department and our investigative counterparts will continue to prosecute and seek penalties for those who violate our nation’s environmental laws."
"This historic case showcases the excellent collaboration between personnel from the U. S. Attorney’s Office, the Department of Justice Environmental Crimes Section and the U. S. Coast Guard," said Jim Letten, U.S. Attorney for the Eastern District of Louisiana. "I also want to express my appreciation to the nine crew members of the Theotokos for their extensive cooperation in this investigation. The message should be clear that this office, in conjunction with its law enforcement partners, will continue to vigorously prosecute companies that pollute our marine environment."
Polembros pleaded guilty on Sept. 30, 2009, to violating two counts of the Act to Prevent Pollution from Ships: one count in connection with failing to maintain an accurate oil record book for the cargo ship M/V Theotokos, and the other concerning the carrying of fuel oil in a tank forward of the collision barrier; violating the Nonindigenous Aquatic Nuisance Prevention and Control Act, by failing to maintain accurate ballast water records; violating the Ports of Waterways Safety Act, by failing to report hazardous condition of the crack on the rudder stem of the ship; and making false statements by concealing the fact that fuel oil was leaking into the forepeak ballast tank.
The investigation into the M/V Theotokos led to the first criminal prosecutions under the Nonindigenous Aquatic Nuisance Prevention and Control Act. The false statement charge related to the crew’s attempt to conceal the fact that fuel oil was leaking into the forepeak ballast tank.
Additionally, on Oct. 15, 2009, Panagiotis Lekkas, the master and highest ranking officer aboard the ship, was sentenced to ten months confinement, a $4,000 fine, and a three year ban on entering U.S. ports and territorial waters, for his role in the obstruction of justice, as well as violations of environmental and ship safety laws. On Oct. 1, Charles P. Posas, the vessel’s chief officer, was sentenced to probation and a three year ban from U.S. ports and territorial waters for one count of false statement and one count of violating the Nonindigenous Aquatic Nuisance Prevention and Control Act. In another related case, on Nov. 5, 2009, the chief engineer, Georgios Stamou, was sentenced to pay a $15,000 fine and a term of probation including a five year ban on entering U.S. ports and territorial waters, after pleading guilty to one felony violation of the Act to Prevent Pollution from Ships and one felony violation for making a false statement.
The case was investigated by the U.S. Coast Guard Investigative Service with assistance from inspectors from Sector New Orleans as well as legal assistance from U.S. Coast Guard in New Orleans and at Headquarters in Washington, D.C. The case is being prosecuted by Christopher L. Hale of the Justice Department’s Environmental Crimes Section along with Dorothy Taylor of the U.S. Attorney’s Office in New Orleans.
Justice Department Settles Lawsuit Alleging Retaliation by City of Fort Pierce, FloridaRead the Press Release
The Justice Department today announced that it has reached a consent decree with the city of Fort Pierce, Fla., that, if approved by the U.S. District Court, will resolve the department’s lawsuit against the city alleging that it retaliated against a former employee in its Code Enforcement Department, in violation of Title VII of the Civil Rights Act of 1964. Title VII prohibits employment discrimination on the basis of race, color, national origin, sex and religion, and also prohibits retaliation against employees for opposing employment practices that they reasonably believe are discriminatory under Title VII or for filing a complaint of employment discrimination.
The department’s complaint, filed on August 25, 2008, alleged that the city unlawfully retaliated against former Code Enforcement Officer Shirley Kirby because she complained of racial discrimination against her and three other African-American Code Enforcement Officers. The consent decree requires that the city provide Kirby with $150,000 ($110,000 in compensatory damages and $40,000 in back pay and lost benefits). The decree also requires the city to provide its employees with training regarding workplace discrimination and retaliation, as well as to review its policies regarding discrimination and retaliation and, where necessary, amend those policies to comply with the law.
"Our nation’s civil rights laws ensure that every individual can go to work each day without fear of discrimination based on the color of their skin," said Assistant Attorney General Thomas Perez. "We are pleased that the city of Fort Pierce has agreed to make Ms. Kirby whole for her losses and to take steps to ensure that its employees comply with Title VII’s prohibitions against discrimination and retaliation in the future."
The enforcement of Title VII is a priority of the Justice Department’s Civil Rights Division. Additional information about the Civil Rights Division is available on its Web sites at http://www.justice.gov/crt/ and http://www.justice.gov/crt/emp/.
Georgia Couple Charged with Human Trafficking and Immigration Violations for Exploiting Woman from SwazilandRead the Press Release
A federal grand jury in Atlanta has indicted an Ellenwood, Ga., husband and wife, Juna Gwendolyn Babb, 54, and Michael J. Babb, 53, on charges of conspiracy, forced labor, document servitude, which is confiscating someone’s passport and visa, and harboring an alien for financial gain, the Justice Department announced.
The indictment was handed down last week by a federal grand jury in Atlanta and remained sealed until the defendants were arrested today. They are expected to make their initial appearances today before U.S. Magistrate Judge Linda T. Walker.
According to the indictment and information presented in court: between about March 2005, and continuing until on or about Feb. 7, 2007, Juna Gwendolyn Babb and Michael J. Babb allegedly conspired to compel the labor of the victim by enticing her to come to the United States from the Kingdom of Swaziland, Africa. The indictment alleges they falsely promised the victim a lucrative, short-term opportunity to provide catering services at the wedding of a family member of theirs. However, upon the victim’s arrival to the United States, the couple allegedly compelled her labor as a housekeeper and nanny in their home through the use of debt and threats of arrest and imprisonment.
After the victim’s arrival in the United States, the defendants confiscated her passport and return airline ticket, and told the victim that she owed them a debt for the costs of her travel to the United States. The Babbs allegedly then compelled the victim’s labor by using the debt that they claimed the victim owed them, and by threatening her with arrest and imprisonment by immigration authorities once her tourist visa expired. The couple then allegedly required the victim to clean the homes of their friends and associates, and to assist with Michael Babb's construction business. The indictment also alleges that the defendants required the victim to work long hours every day of the week, for which the victim was grossly underpaid on those few occasions that the Babbs paid her at all for her labor and services.
An indictment is merely an allegation and defendants are presumed innocent until proven guilty.
This case is being investigated by Special Agents of the FBI and ICE. It is being prosecuted by Assistant U.S. Attorneys Stephanie Gabay-Smith and Richard Moultrie Jr., and Trial Attorney Karima Maloney of the Justice Department’s Civil Rights Division Human Trafficking Prosecution Unit.
Department Issues FOIA Annual Report in More Accessible Format as Part of the President’s Initiative on Transparency and Open GovernmentRead the Press Release
WASHINGTON – As part of President Obama’s initiative on Transparency and Open Government, the Department of Justice is setting a transparency precedent for the rest of government by releasing on its Web site, the Department of Justice’s Fiscal Year 2008 Annual Freedom of Information Act (FOIA) Report in a more publicly accessible format.
At the same time, the department is releasing, in this machine-readable format, 19 other agency annual FOIA reports from a sampling of other federal agencies, making a total release of 20 distinct data sets. As a result of the new format, members of the public, including public interest organizations, scholars, and the media, will be able to more easily track FOIA performance.
The department announced today’s initiative in response to the Open Government Directive issued by the White House yesterday.
The Directive directs all federal agencies to make their annual FOIA reports available in this machine-readable format starting with Fiscal Year 2009. The department in turn will make all of the machine-readable reports available in one location on the department’s Web site (www.justice.gov) as well on the Data.gov Web site.
Annual FOIA reports include detailed statistics on the number and disposition of FOIA requests, including response times, volume of requests, and personnel costs. Ultimately, increasing the usefulness of the FOIA processing data will also enable targeted outreach to agencies by the department to ensure greater compliance with the FOIA government-wide.
This initiative furthers the department’s ongoing efforts to foster increased transparency and accountability across the government. In accordance with the President’s Memorandum on the FOIA issued on Jan. 21, 2009, the Attorney General issued comprehensive new FOIA Guidelines on March 19, 2009. These new FOIA guidelines address the presumption of openness that the President called for in his FOIA memorandum, the necessity for agencies to create and maintain an effective system for responding to requests, and the need for agencies to proactively and promptly make information available to the public.
As part of this transparency initiative, the Department’s Office of Legal Counsel (OLC) is now routinely releasing opinions from current and previous administrations on the OLC Web site.
The Department’s Office of Information Policy (OIP) has also been actively engaged in a variety of initiatives to inform and educate agency personnel on the President’s and Attorney General’s new openness principles.
Following the President’s FOIA memorandum and the Attorney General’s FOIA guidelines, OIP held a government-wide training conference attended by more than 500 government agency personnel. In keeping with the new focus on proactive disclosures and increased use of technology, OIP has made that presentation available to the public through the department’s Web site. OIP has also conducted numerous additional, agency-specific training sessions focused on the administration’s transparency initiative. Training sessions have been held at the Departments of Army, Commerce, Navy, Energy, Treasury, Labor, Transportation, as well as the Securities and Exchange Commission, Environmental Protection Agency, and General Services Administration. OIP has also conducted trainings and outreach to U.S. Attorneys Offices around the country to ensure that they are fully aware of these new FOIA guidelines.
To assist agencies in implementing the new FOIA guidelines, on April 17, 2009, OIP issued extensive written guidance to all agencies. This guidance, posted on FOIA Post, the department’s online FOIA publication, discussed the new approaches for responding to requests and working with requesters; the new, more limited standards for defending agencies when they deny a FOIA request; the new requirements to maximize the use of technology to disclose information; the new requirement to post information online proactively; and the new accountability requirements for agency Chief FOIA Officers.
OIP has also been reaching out to the public and the requester community, through engagement with the American Society of Access Professionals (ASAP), an association of public and private sector officials interested in issues relating to transparency and other interested members of the FOIA community.
This training and outreach will continue as the department works to implement the Attorney General’s FOIA guidelines.
The Fiscal Year 2008 Annual Freedom of Information Act (FOIA) Reports can be found online at: http://www.justice.gov/oip/fy08.html.
Syracuse Mortgage Underwriter to Pay United States Nearly $679,000 to Resolve Mortgage Fraud AllegationsRead the Press Release
WASHINGTON -- Robert Corp, a mortgage underwriter in Syracuse, N.Y., has agreed to pay the United States close to $679,000 to settle allegations that he defrauded the U.S. Department of Housing and Urban Development (HUD), the Justice Department announced today. This settlement resolves Corp’s liability under the False Claims Act, a federal statute that imposes triple damages and penalties for false claims made in connection with federal government programs.
The Justice Department filed suit against Corp in May 2008, alleging that he made false statements to HUD on an application for government insurance of a mortgage loan used to refinance the existing debt of Brylin Hospitals, a psychiatric and substance abuse hospital in Buffalo, N.Y. The mortgage insurance program authorizes HUD to guarantee mortgage loans used to refinance debt held by hospitals and other healthcare facilities. Corp allegedly overstated Brylin Hospitals’ existing debt in order to obtain a larger refinance loan, and HUD was required to pay more in mortgage insurance claims as a result of Corp’s allegedly false statements.
"Mortgage fraud is a top priority for this administration," said Tony West, Assistant Attorney General for the Department of Justice’s Civil Division. "We will aggressively pursue both individuals and corporations who defraud federal mortgage insurance programs, which are so important to this economy." Assistant Attorney General West noted that his case was a collaborative effort involving the Justice Department’s Civil Division, HUD’s Office of General Counsel – Office of Program Enforcement, and HUD’s Office of the Inspector General in Buffalo, New York.
"We have no tolerance for those who try to cheat the Federal Housing Administration or the taxpayer," said FHA Commissioner David H. Stevens. "It’s not just about protecting the financial health of the FHA insurance fund – this is about protecting each and every hospital and healthcare facility that looks to the FHA for safe and secure mortgage financing."
Member of the Cherokee Nation Pleads Guilty to Selling Bear Gall BladdersRead the Press Release
WASHINGTON—Clement Calhoun of Cherokee, N.C., pleaded guilty today in U.S. District Court in Asheville, N.C., to federal charges for unlawfully trafficking in bear gall bladders, the Justice Department announced.
The conviction arose from a three-year undercover anti-poaching investigation, called Operation Botanical, into the unlawful collection, purchase, sale and transportation of ginseng and bear parts within and along the southern Appalachians.
Calhoun entered his guilty plea before U.S. Magistrate District Court Judge L. Dennis Howell to two misdemeanor charges under the Lacey Act. According to the documents filed with the court, Calhoun illegally sold 51 bear gall bladders off of the Cherokee Nation trust lands, beginning in January 2005 and continuing through September 2005.
The Lacey Act is the federal law that makes it illegal to transport or sell wildlife taken, possessed, transported or sold in violation of tribal law. Animal parts, like bear gall bladders, are considered wildlife under both the Lacey Act and the Cherokee code. Bear gall bladders are used as an Asian medicinal.
Under the Cherokee code, it is illegal for tribal members to sell parts of big game animals, like bear gall bladders, to non-members, to anyone beyond the boundaries of Cherokee Indian trust lands or to anyone who will remove the parts from trust lands.
Calhoun admitted that on three separate occasions—Jan. 11, 2005, Jan. 24, 2005 and Sept. 13, 2005— he knowingly transported and sold bear gall bladders when he should have known they were sold in violation of the Cherokee Code. The defendant admitted he sold to non-members of the Cherokee Nation or sold to persons who would remove the bear parts from trust lands and that he should have known that these parts were sold in violation of the Cherokee code.
According to the plea agreement, Calhoun admitted that the retail value of all of the wildlife involved was at least $6,600. As part of the agreement, he has agreed to publish a statement in a newspaper apologizing for his illegal conduct.
Calhoun faces a maximum sentence of one year in prison and a $100,000 fine for each count. A sentencing hearing has been scheduled for Jan 12, 2010.
The case is being prosecuted by the Justice Department’s Environmental Crimes Section and the U.S. Attorney's Office for the Western District of North Carolina in Asheville. The case was investigated by the U. S. Fish and Wildlife Service’s Office of Law Enforcement, with assistance from the Georgia Department of Natural Resources.
Justice Department Signs Agreement with City of Atlanta to Ensure Civic Access for Persons with DisabilitiesRead the Press Release
WASHINGTON - The Justice Department today announced an agreement with the city of Atlanta to improve access to all aspects of civic life for persons with disabilities. The agreement was reached under Project Civic Access (PCA), the department’s wide-ranging initiative to ensure that cities, towns and counties throughout the country comply with the Americans with Disabilities Act (ADA). The department has conducted compliance reviews with certain localities in all 50 states, helping to improve the lives and broaden opportunities for millions of Americans with disabilities.
"Civic access is a basic and critical civil right, and it ensures individuals with disabilities can play productive, fulfilling roles in their communities," said Thomas E. Perez, Assistant Attorney General for Civil Rights. "City officials are to be commended for making this commitment to fulfill the ADA’s promise of equal access to city programs and services."
PCA was initiated to ensure that persons with disabilities have an equal opportunity to participate in civic life, a fundamental part of American society. As part of the PCA initiative, Justice Department investigators, attorneys and architects survey state and local government facilities, programs and services in communities across the country to identify the modifications needed for compliance with ADA requirements. The agreements are tailored to address the steps each community must take to improve access. This agreement is the 174th under the PCA initiative and the 13th agreement reached this year.
"Like other communities throughout the United States, Atlanta still has some work to do to achieve full ADA compliance," said Assistant Attorney General Perez. "This agreement sets out a realistic plan with specific steps and reasonable timeframes for the city to get there."
Under the agreement announced today, the city of Atlanta will take several important steps to improve access for individuals with disabilities, such as:
- Making physical modifications to its facilities so that parking, entrances and routes into facilities, parking lots, public telephones, restrooms, service counters and drinking fountains are more accessible;
- Making specific modifications to improve access to city parks and tennis courts;
- Officially recognizing Georgia’s telephone relay service and training staff to use the relay service to ensure effective communication for people who are deaf or hard of hearing;
- Continuing to ensure that 9-1-1 emergency service calls placed by persons with disabilities who use text telephones (TTYs) are answered as quickly as other calls, that such calls are monitored for timing and accuracy, and that employees are trained and practiced in using a TTY to make and receive calls;
- Implementing a plan to improve the accessibility of city sidewalks and provide for the installation of accessible curb ramps throughout Atlanta;
- Ensuring that the city’s official website is accessible to persons with disabilities, including individuals who are blind or have low vision;
- Ensuring equal access to emergency management services for persons with disabilities;
- Developing a method for providing information for interested persons with disabilities concerning the existence and location of the city’s accessible services, activities and programs;
- Installing signs at inaccessible entrances to facilities directing persons with disabilities to accessible entrances;
- Posting, publishing and distributing a notice to inform members of the public of the ADA’s provisions and their applicability to the city’s programs, services and activities; and
- Adopting a grievance procedure to deal with complaints of disability discrimination relating to city programs and services.
Today’s settlement agreement was reached under Title II of the ADA, which prohibits discrimination against individuals with disabilities by state and local governments. The agreement will remain in effect for three years. The department will monitor compliance with the agreement until required actions have been completed.
Atlanta is the capital and most populous city in the state of Georgia. With a 2008 estimated population of 537,958, it is the urban core of one of the fastest-growing metropolitan areas in the United States. According to Census data, more than 22 percent of people living in Atlanta are individuals with disabilities.
People interested in finding out more about the ADA, today’s agreement, the Project Civic Access initiative, or the ADA Best Practices Tool Kit for State and Local Governments can access the ADA home page at http://www.ada.gov or call the toll-free ADA Information Line at (800) 514-0301 or (800) 514-0383 (TDD).
Four Arkansas Men Sentenced on Civil Rights Charges in Cross Burning ConspiracyRead the Press Release
WASHINGTON – Jacob Wingo, Clayton Morrison, Darren McKim and Richard Robins were sentenced today and yesterday in federal court in Hot Springs, Ark., on federal civil rights and obstruction of justice charges related to a conspiracy to drive a woman and her children from their home in Donaldson, Ark., because the victims associated with African-Americans.
Wingo, 20, was sentenced to 24 months in prison, three years of post-incarceration supervision, a fine of $10,000, and a $300 special assessment; Morrison, 29, was sentenced to 15 months in prison, three years of post-incarceration supervision, a fine of $5,000, and a $300 special assessment; McKim, 38, was sentenced to 18 months in prison, three years of post-incarceration supervision, a fine of $5,000, and a $200 special assessment; and Robins, 42, was sentenced to 12 months and one day in prison, three years of post-incarceration supervision, a fine of $5,000 and a $200 special assessment. A fifth defendant, Dustin Nix, 21, was sentenced on Nov.6, 2009, to a prison term of 12 months and one day, three years of post-incarceration supervision, a fine of $5,000 and a $200 special assessment.
Each of the defendants pleaded guilty in September 2009. In the plea proceedings and documents filed in court, Wingo admitted building a cross, transporting it to the victims' home and attempting to set it on fire. Morrison admitted to helping prepare the cross and accompanying Wingo and Nix to the victims’ home in order to burn it. McKim and Robbins admitted encouraging Wingo and Nix to build the cross and to burn it at the victims’ home, as well as driving to the victims’ home on a separate occasion to threaten and intimidate them. McKim also admitted to providing materials to Wingo and Nix for them to use to build the cross.
"The defendants in this case threatened a young family with violence simply because they associated with persons of another race. Threats of this kind have no place in this country, but they are regrettably all too common," said Assistant Attorney General Thomas E. Perez. "Aggressive prosecution of hate crimes is a top priority for the Civil Rights Division, and these convictions should send a message to those who would carry out similar criminal acts."
Special Agents from the FBI’s Little Rock Field Office investigated this matter. The case was prosecuted by Assistant U.S. Attorney Matthew Quinn for the Western District of Arkansas, and Special Litigation Counsel Gerard Hogan and Trial Attorney Benjamin Hawk of the Justice Department’s Civil Rights Division.
Former U.S. Army Officer Sentenced to Five Years in Prison for Role <br /> in Bribery Conspiracy in Al-hillah, IraqRead the Press Release
Curtis Whiteford, a former colonel in the U.S. Army Reserves, was sentenced today to five years in prison for his participation in a wide-ranging bribery conspiracy in Al-Hillah, Iraq. U.S. District Court Judge Mary L. Cooper for the District of New Jersey, Trenton Division, also ordered Whiteford to pay $16,200 in restitution and to serve two years of supervised release following his prison term.
Whiteford, 53, of Deweyville, Utah, was charged in a 25-count indictment unsealed on Feb. 7, 2007, along with former U.S. Army Lt. Col. Debra M. Harrison, former U.S. Army Reserves Lt. Col. Michael Wheeler, and civilians William Driver and Seymour Morris Jr., with various crimes related to a scheme to defraud the Coalition Provisional Authority-South Central Region (CPA-SC). Whiteford was the second-most senior official and highest ranking military officer at CPA-SC in Al-Hillah. A federal jury convicted Whiteford and Wheeler on Nov. 7, 2008. Whiteford was convicted of conspiracy to commit bribery and the interstate transport of stolen property (ITSP). Wheeler was convicted of conspiracy to commit bribery, honest services wire fraud, ITSP and possessing unregistered firearms. Wheeler will be sentenced at a later date. Harrison pleaded guilty on July 28, 2008, to one count of honest services wire fraud for her role in the scheme. Driver pleaded guilty on Aug. 5, 2009, to laundering portions of more than $300,000 stolen from the CPA-SC by Harrison, his wife, and is scheduled to be sentenced on Dec. 10, 2009. Morris was acquitted at trial.
According to testimony at trial, Whiteford and Wheeler conspired from December 2003 to December 2005 with at least three others—Robert Stein, at the time the comptroller and funding officer for the CPA-SC; Philip H. Bloom, a U.S. citizen who owned and operated several companies in Iraq and Romania; and U.S. Army Lt. Col. Bruce D. Hopfengardner—to rig the bids on contracts being awarded by the CPA-SC so that more than 20 contracts were awarded to Bloom. In total, Bloom received approximately $8 million in rigged contracts. Testimony revealed that Bloom, in return, provided Whiteford, Harrison, Wheeler, Stein, Hopfengardner and others with more than $1 million in cash, SUVs, sports cars, a motorcycle, jewelry, computers, business class airline tickets, liquor, promise of future employment with Bloom and other items of value.
Bloom admitted he laundered more than $2 million in currency that Whiteford, Harrison, Wheeler, Hopfengardner, Stein and others stole from the CPA-SC that had been designated for the reconstruction of Iraq. Bloom then used his foreign bank accounts in Iraq, Romania and Switzerland to send some of the stolen money to Harrison, Stein, Hopfengardner and other Army officials in return for them awarding contracts to Bloom and his companies.
On Jan. 29, 2007, co-conspirator Robert Stein was sentenced to nine years in prison for related charges of conspiracy, bribery and money laundering, as well as weapons possession charges, for his role in the same scheme. Stein was also ordered to forfeit $3.6 million for his role in the bribery and money laundering scheme.
On Feb. 16, 2007, co-conspirator Philip Bloom was sentenced to 46 months in prison for related charges of conspiracy, bribery and money laundering for his role in the scheme. Bloom was also ordered to forfeit $3.6 million for his role in the bribery and money laundering scheme.
On June 25, 2007, Lt. Col. Bruce Hopfengardner was sentenced to 21 months in prison for conspiracy and money laundering related to this scheme. Hopfengardner was also ordered to forfeit $144,500.
These cases are being prosecuted by Trial Attorneys John P. Pearson and Kevin Driscoll of the Criminal Division’s Public Integrity Section, as well as Trial Attorney Ann C. Brickley. The cases are being investigated by the Internal Revenue Service-Criminal Investigation, the Special Inspector General for Iraq Reconstruction, U.S. Immigration and Customs Enforcement and the FBI-Washington Field Office.
District of Columbia Seafood Company, Two Employees Charged with Purchasing Illegally Harvested Striped BassRead the Press Release
WASHINGTON— A Washington, D.C., fish wholesaler and two of its employees have been charged in U.S. District Court in Maryland for the purchase of illegally harvested striped bass, commonly referred to as rockfish, from the Potomac River from 1995 through 2007, the Justice Department announced today.
Ocean Pro Ltd., aka Profish, and two of its fish buyers, Timothy Lydon of Bethesda, Md., and Benjamin Clough of Graysonville, Md., were charged in a five-count felony indictment, alleging one count of conspiracy to violate the Lacey Act, three substantive felony Lacey Act counts, and one count of making a false statement. The Lacey Act is a federal law that prohibits individuals or corporations from transporting, selling, or buying fish and wildlife harvested illegally.
The indictment alleges that from 1995 to May 2007, Profish purchased striped bass that had been illegally harvested in Maryland and Virginia, from at least five commercial fishermen. The indictment also charges one commercial fisherman, Gordon Jett of Fredericksburg, Va., for his role in illegally harvesting striped bass and selling them to Profish in 2007.
According to the indictment, in at least 1995, Profish began buying illegally harvested rockfish from local commercial fishermen. Initially, Lydon was Profish’s buyer for striped bass. Clough assumed that role in 2001, when he was hired by Profish, and he continued to purchase untagged and oversized striped bass from commercial fisherman and others until May 2007. The indictment alleges that in 2007, Jett, on numerous occasions, sold untagged and oversized striped bass to Profish.
In early spring each year, wild coastal striped bass (Morone saxatilis) enter the estuary or river where they were born to spawn, and then return to ocean waters to live, migrating along the coastline. Fish spawned from the Chesapeake Bay ecosystem contribute the greatest number of striped bass to the Atlantic coastal fishery, and the commercial fishery for Atlantic coastal striped bass is based primarily on migrations of fish born in the Chesapeake Bay area. Striped bass do not die after spawning. They may live up to 30 years and reach 50 pounds or more. The population of coastal Atlantic striped bass depends heavily upon the capability of older, larger, female striped bass to successfully reproduce.
Maryland regulates the commercial catch of striped bass from its waters and enforces the regulations of the Potomac River Fisheries Commission, which regulates the commercial catch of striped bass from Maryland waters located in the main stem of the Potomac River. The striped bass management and protection measures, including tagging requirements, closed seasons, size limits, and quota amounts, are focused on maintaining a target spawning stock to protect the fishery from over-fishing.
The Lacey Act carries a maximum penalty of five years in prison and a fine of up to $250,000 or twice the gain or loss as a result of the crime. Corporations face a maximum fine of $500,000 or twice the gain or loss as a result of the crime.
A criminal indictment is not a finding of guilt. An individual or company charged by criminal indictment is presumed innocent unless and until proven guilty in a court of law.
The charges are a result of the investigation by an interstate task force formed by the U.S. Fish and Wildlife Service, the Maryland Natural Resources Police and the Virginia Marine Police, Special Investigative, Unit in 2003. The task force conducted undercover purchases and sales of striped bass in 2003, engaged in covert observation of commercial fishing operations in the Chesapeake Bay and Potomac River area, and conducted detailed analysis of area striped bass catch reporting and commercial business sales records from 2003 through 2007.
These cases are being prosecuted by Senior Trial Attorneys Kevin Cassidy and Wayne Hettenbach of the Justice Department’s Environmental Crimes Section, and Assistant U.S. Attorney Stacy Belf of the U.S. Attorney’s Office for the District of Maryland.
Attorney General Holder, Secretary Salazar Announce<br /> Settlement of Cobell Lawsuit on Indian Trust ManagementRead the Press Release
Attorney General Eric Holder and Secretary of the Interior Ken Salazar today announced a settlement of the long-running and highly contentious Cobell class-action lawsuit regarding the U.S. government’s trust management and accounting of over three hundred thousand individual American Indian trust accounts. Also speaking at the press conference today were Associate Attorney General Tom Perrelli and Deputy Secretary of the Interior David Hayes.
"Over the past thirteen years, the parties have tried to settle this case many, many times, each time unsuccessfully," said Attorney General Holder. "But today we turn the page. This settlement is fair to the plaintiffs, responsible for the United States, and provides a path forward for the future."
"This is an historic, positive development for Indian country and a major step on the road to reconciliation following years of acrimonious litigation between trust beneficiaries and the United States," Secretary Salazar said. "Resolving this issue has been a top priority of President Obama, and this administration has worked in good faith to reach a settlement that is both honorable and responsible. This historic step will allow Interior to move forward and address the educational, law enforcement, and economic development challenges we face in Indian Country."
Under the negotiated agreement, litigation will end regarding the Department of the Interior’s performance of an historical accounting for trust accounts maintained by the United States on behalf of more than 300,000 individual Indians. A fund totaling $1.4 billion will be distributed to class members to compensate them for their historical accounting claims, and to resolve potential claims that prior U.S. officials mismanaged the administration of trust assets.
In addition, in order to address the continued proliferation of thousands of new trust accounts caused by the "fractionation" of land interests through succeeding generations, the settlement establishes a $2 billion fund for the voluntary buy-back and consolidation of fractionated land interests. The land consolidation program will provide individual Indians with an opportunity to obtain cash payments for divided land interests and free up the land for the benefit of tribal communities.
By reducing the number of individual trust accounts that the U.S must maintain, the program will greatly reduce on-going administrative expenses and future accounting-related disputes. In order to provide owners with an additional incentive to sell their fractionated interests, the settlement authorizes the Interior Department to set aside up to 5 percent of the value of the interests into a college and vocational school scholarship fund for American Indian students.
The settlement has been negotiated with the involvement of the U.S. District Court for the District of Columbia. It will not become final until it is formally endorsed by the court. Also, Congress must enact legislation to authorize implementation of the settlement. Because it is a settlement of a litigation matter, the Judgment Fund maintained by the U.S. Departments of Justice and Treasury will fund the settlement.
"While we have made significant progress in improving and strengthening the management of Indian trust assets, our work is not over," said Salazar, who also announced he is establishing a national commission to evaluate ongoing trust reform efforts and make recommendations for the future management of individual trust account assets in light of a congressional sunset provision for the Office of Special Trustee, which was established by Congress in 1994 to reform financial management of the trust system.
The class action case, which involves several hundred thousand plaintiffs, was filed by Elouise Cobell in 1996 in the U.S. District Court for the District of Columbia and has included hundreds of motions, dozens of rulings and appeals, and several trials over the past 13 years. The settlement funds will be administered by the trust department of a bank approved by the district court and distributed to individual Indians by a claims administrator in accordance with court orders and the settlement agreement.
Interior currently manages about 56 million acres of Indian trust land, administering more than 100,000 leases and about $3.5 billion in trust funds. For fiscal year 2009, funds from leases, use permits, land sales and income from financial assets, totaling about $298 million were collected for more than 384,000 open Individual Indian Money accounts and $566 million was collected for about 2,700 tribal accounts for more than 250 tribes. Since 1996, the U.S. Government has collected over $10.4 billion from individual and tribal trust assets and disbursed more than $9.5 billion to individual account holders and tribal governments.
The land consolidation fund addresses a legacy of the General Allotment Act of 1887 (the "Dawes Act"), which divided tribal lands into parcels between 40 and 160 acres in size, allotted them to individual Indians and sold off all remaining unallotted Indian lands. As the original holders died, their intestate heirs received an equal, undivided interest in the lands as tenants in common. In successive generations, smaller undivided interests descended to the next generation.
Today, it is common to have hundreds—even thousands—of Indian owners for one parcel of land. Such highly fractionated ownership makes it extremely difficult to use the land productively or to provide beneficial use for any individual. Absent serious corrective action, an estimated 4 million acres of land will continue to be held in such small ownership interests that very few individual owners will ever derive any meaningful financial benefit from that ownership.
Additional Information is available at the following sites: www.cobellsettlement.com. The Department of the Interior website: www.doi.gov. The Office of the Special Trustee website: www.ost.doi.gov
U.S. Settles with Itochu Corp. and Itochu International <br /> Regarding Defective Bullet-Proof VestsRead the Press Release
WASHINGTON - The United States has reached a $6.75 million settlement with Itochu Corp. of Japan and its American subsidiary, Itochu International Inc., to resolve claims under the False Claims Act in connection with the companies’ importation and sale of defective Zylon fiber used as the key ballistic material in bullet-proof vests purchased by the United States for federal, state, local and tribal law enforcement agencies, the Justice Department announced today.
The Itochu companies imported the Zylon fiber on behalf of the Zylon manufacturer, Toyobo Co. Ltd. of Japan. The United States alleged that the Itochu companies were aware that the fiber degraded quickly over time and that the companies knew that this degradation rendered bullet-proof vests containing woven Zylon unfit for use. The government further alleged that, despite this knowledge, Itochu personnel actively participated in the marketing of the Zylon fiber and downplayed the extent of the degradation problem.
"We will not tolerate companies that put the lives of law enforcement officers at risk by providing defective material for bullet-proof vests," said Tony West, Assistant Attorney General for the Justice Department’s Civil Division. "This agreement resolves our allegations that these corporations wasted taxpayers dollars by failing to address problematic vests even after they were aware of them."
This settlement is part of a larger government investigation of the industry’s use of Zylon in body armor. As part of today’s agreement, Itochu has pledged its cooperation in the government’s ongoing investigation. The United States has previously settled with five other participants in the Zylon body armor industry for over $47 million. Additionally, the United States has pending lawsuits against Toyobo Co., Honeywell Inc., Lincoln Fabrics, Ltd., Second Chance Body Armor Inc., and First Choice Armor Inc. Several former executives of Second Chance and First Choice are also named in those suits.
Assistant Attorney General West acknowledged the contributions of the many federal agencies assisting the government’s ongoing investigation of the Zylon body armor industry, including the Justice Department’s Civil Division; the U.S. Attorney’s Office for the District of Columbia; the General Services Administration, Office of the Inspector General; the Department of Homeland Security, Office of Inspector General; the Department of the Treasury’s Inspector General for Tax Administration; the Defense Criminal Investigative Service; the U.S. Army Criminal Investigative Command; the Air Force Office of Special Investigations; the Department of Energy, Office of the Inspector General; the U.S. Agency for International Development, Office of the Inspector General; the Defense Contracting Audit Agency; and the Federal Bureau of Investigation.
Two Florida Executives, One Florida Intermediary and Two Former Haitian Government Officials Indicted for Their Alleged Participation in Foreign Bribery SchemeRead the Press Release
Two Florida executives of a Miami-Dade County-based telecommunications company, the president of Florida-based Telecom Consulting Services Corp., and two former Haitian government officials were charged in an indictment unsealed today for their alleged roles in a foreign bribery, wire fraud and money laundering scheme.
According to the indictment, the defendants allegedly participated in a scheme to commit foreign bribery and money laundering from November 2001 through March 2005, during which time the telecommunications company paid more than $800,000 to shell companies to be used for bribes to foreign officials of the Republic of Haiti’s state-owned national telecommunications company, Telecommunications D’Haiti (Haiti Teleco).
According to court documents, the telecommunications company executed a series of contracts with Haiti Teleco that allowed the company’s customers to place telephone calls to Haiti. The alleged corrupt payments were authorized by the telecommunications company’s president and vice president and were allegedly paid to successive Haitian government officials at Haiti Teleco. According to the indictment, the purpose of these bribes was to obtain various business advantages from the Haitian officials for the telecommunications company, including issuing preferred telecommunications rates, reducing the number of minutes for which payment was owed, and giving a variety of credits toward sums owed, as well as to defraud the Republic of Haiti of revenue. To conceal the bribe payments, the defendants allegedly used various shell companies to receive and forward on the payments. In addition, they allegedly created false records claiming that the payments were for "consulting services," which were never intended or performed.
The five individuals charged in the indictment are:
- Joel Esquenazi, 50, of Miami, the former president of the telecommunications company, is charged with one count of conspiracy to violate the Foreign Corrupt Practices Act (FCPA) and to commit wire fraud, seven counts of FCPA violations, one count of conspiracy to commit money laundering and 12 counts of money laundering;
- Carlos Rodriguez, 53, of Davie, Fla., the former executive vice president of the telecommunications company, is charged with one count of conspiracy to violate the FCPA and commit wire fraud, seven counts of FCPA violations, one count conspiracy to commit money laundering and 12 counts of money laundering;
- Robert Antoine, 61, of Miami and Haiti, a former director of international relations for telecommunications at Haiti Teleco, is charged with one count of conspiracy to commit money laundering;
- Jean Rene Duperval, 43, of Miramar, Fla. and Haiti, a former director of international relations for telecommunications at Haiti Teleco, is charged with one count of conspiracy to commit money laundering and 12 counts of money laundering; and
- Marguerite Grandison, 40, of Miramar, the former president of Telecom Consulting Services Corp., and Duperval’s sister, is charged with one count of conspiracy to violate the FCPA and commit wire fraud, seven counts of FCPA violations, one count conspiracy to commit money laundering and 12 counts of money laundering.
An indictment is merely an accusation, and defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.
The conspiracy to commit violations of the FCPA and wire fraud count carries 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 FCPA counts each carry a maximum penalty of five years in prison and a fine of the greater of $100,000 or twice the value gained or lost. The conspiracy to commit money laundering count carries a maximum penalty of 20 years in prison and a fine of the greater of $500,000 or twice the value of the property involved in the transaction. The money laundering counts each carry a maximum penalty of 20 years in prison and a fine of the greater of $500,000 or twice the value of the property involved in the transaction. The indictment also gives notice of criminal forfeiture.
On April 27, 2009, Antonio Perez, the former controller of the 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 Telco.
On May 15, 2009, Juan Diaz, the president of J.D. Locator Services, a shell intermediary company, pleaded guilty to one count of conspiracy to violate the FCPA and money laundering. He admitted to receiving more than $1 million in bribe money from telecommunication companies. Diaz admitted he then laundered the money for a former Haitian government official. Diaz is scheduled to be sentenced on Jan. 29, 2010.
The government’s investigation is ongoing. The Department of Justice is grateful to the government of Haiti for continuing to provide 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 indictment was unsealed today after the arrest of Duperval by the BAFE on Dec. 5, 2009, and his subsequent initial appearance today in U.S. District Court in Miami. Rodriguez and Grandison also made initial appearances today in Miami. Arrest warrants have been issued for Antoine and Esquenazi.
The case is being prosecuted by Trial Attorney Nicola J. Mrazek of the Criminal Division’s Fraud Section, Trial Attorney Kevin Gerrity of the Criminal Division’s Asset Forfeiture and Money Laundering 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 cases were investigated by the IRS-CI Miami Field Office.
Indictment