District Not Recorded

WASHINGTON — The United States has filed a civil False Claims Act complaint against drug manufacturer Johnson & Johnson (J&J) of New Brunswick, N.J., and two of its subsidiaries, Ortho-McNeil-Janssen Pharmaceuticals Inc. and Johnson & Johnson Health Care Systems Inc., the Justice Department announced today. The complaint alleges that these companies paid millions of dollars in kickbacks to Omnicare Inc., the nation’s largest pharmacy that specializes in dispensing drugs to nursing home patients. In November 2009, the United States, numerous states, and Omnicare entered into a $98 million settlement agreement that, among other things, resolved Omnicare’s civil liability under the False Claims Act for taking kickbacks from J&J.

In its complaint against J&J, the United States alleges that the company paid kickbacks to Omnicare to induce the nursing home pharmacy company to purchase and recommend J&J drugs, including the anti-psychotic drug Risperdal, for use in nursing homes. According to the complaint, J&J understood that Omnicare’s pharmacists reviewed nursing home patients’ charts at least monthly and made recommendations to physicians on what drugs should be prescribed for those patients. The government further alleges that J&J knew that physicians accepted the Omnicare pharmacists’ recommendations more than 80 percent of the time, and that J&J viewed such pharmacists as an "extension of [J&J’s] sales force."

The United States alleges that, in order to induce Omnicare and its pharmacists to recommend J&J drugs, the company paid kickbacks to Omnicare in numerous ways. First, the complaint alleges that J&J entered into agreements with Omnicare by which Omnicare was entitled to increasing levels of rebates from Johnson & Johnson so long as Omnicare implemented specific programs to increase the prescriptions of J&J drugs. Second, the complaint alleges that J&J paid Omnicare millions of dollars for "data," much of which Omnicare never provided. According to the complaint, the true purpose of these payments was to induce Omnicare to recommend J&J drugs. Third, the complaint alleges that J&J made various other substantial kickback payments to Omnicare, calling the payments "grants" and "educational funding," even though their true purpose was to induce Omnicare to recommend J&J drugs.

"We will pursue those who break the law to take advantage of the elderly and the poor," said Tony West, Assistant Attorney General for the Civil Division of the Department of Justice. "Kickbacks such as those alleged here distort the judgments of health care professionals and put profits ahead of sound medical treatment." 

The United States filed its complaint in two consolidated whistleblower lawsuits presently on file in the District of Massachusetts.

Assistant Attorney General West thanked the collaborative efforts of the Justice Department’s Civil Division, the U.S. Attorney for the District of Massachusetts, the Office of Inspector General of the Department of Health and Human Services, the Food and Drug Administration Office of Criminal Investigations and the Federal Bureau of Investigation .

Manual Deluna has pleaded guilty to one count of conspiracy to commit health care fraud.

Deluna, 48, pleaded guilty on Jan. 14, 2010, before U.S. District Court Judge Ewing Werlein Jr., in connection with Deluna’s role in Memorial Medical Supply, a Houston durable medical equipment company. Deluna was the general manager of Memorial Medical Supply, and began his association with the company in approximately October 2007. Deluna, along with co-defendants Sunny Robinson, Lisa Jones and Shirley A. Chavis, was originally indicted on July 22, 2009.

In connection with his plea, Deluna admitted that he and others illegally obtained protected Medicare beneficiary health information including names, dates of birth, medical histories, and Medicare and Social Security numbers from individuals and home health agencies. Deluna admitted that this health information was used to submit false and fraudulent claims to Medicare for reimbursement for equipment such as "Arthritis Kits," power wheelchairs, and diabetic and incontinence supplies. Deluna admitted that the Medicare beneficiaries in many instances did not order or even need the medical equipment, nor did a physician actually prescribe these items. Deluna admitted that in several instances, Memorial Medical Supply also submitted false claims to Medicare in the names of Medicare beneficiaries who were deceased. Deluna admitted that from May 2006 through January 2009, Memorial Medical Supply submitted claims to Medicare in excess of $4.3 million.

Deluna remains on bond pending sentence, which is currently scheduled for April 9, 2010. Robinson, Jones and Chavis remain on bond pending trial.

This case is being prosecuted by Special Assistant U.S. Attorney Justin Blan, and was investigated by agents of the HHS-OIG, the Office of Personnel Management, the FBI and the Texas Attorney General’s Office - Medicaid Fraud Control Unit. This prosecution is the latest in the Medicare Fraud Strike Force’s efforts in the Houston area. The Strike Force is supervised by the U.S. Attorney’s Office for the Southern District of Texas and the Criminal Division’s Fraud Section.

Since the inception of Strike Force operations in March 2007 - Miami (Phase One), Los Angeles (Phase Two), Detroit (Phase Three), Houston (Phase Four), Brooklyn (Phase Five), Tampa (Phase Six) and Baton Rouge (Phase Seven) - the Strike Force has obtained indictments of more than 475 individuals and organizations that collectively have billed the Medicare program for more than $1 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

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

The Department of Justice today announced the appointment of Andrew Goldsmith as the new national coordinator for its criminal discovery initiatives.

The position was established as part of the Department’s ongoing efforts, initiated last year at the direction of the Attorney General, to review and improve its criminal discovery and case management policies and procedures.

"Andrew brings a wealth of knowledge and experience in this field, and I am pleased he is taking on this crucial role," said Deputy Attorney General David W. Ogden. "He will be instrumental in overseeing our efforts to ensure all of our prosecutors and law enforcement agents have the necessary training and tools to achieve fair and just results in the nation’s courts."

As the national coordinator, Goldsmith will oversee the implementation of a number of initiatives designed to provide prosecutors with the training and resources they need to meet discovery obligations in criminal cases. These efforts include:

• Creating an online directory of resources on discovery issues available to all prosecutors at their desktop;
• Producing a Handbook on Discovery and Case Management similar to the Grand Jury Manual so that prosecutors will have an accessible and comprehensive resource on discovery obligations;
• Implementing a training curriculum and a mandatory training program for paralegals and law enforcement agents;
• Revitalizing the Computer Forensics Working Group to ensure the proper cataloguing of electronically stored information recovered as part of federal investigations; and
• Creating a pilot case management project to fully explore the available case management software and possible new practices to better catalogue law enforcement investigative files and to ensure that all the information is transmitted in the most useful way to federal prosecutors.

Goldsmith will also act as the primary liaison to all of the United States Attorneys’ Offices and Department components on these issues, as well as issues relating to electronic evidence in criminal cases.

As part of the Department-wide initiative, Deputy Attorney General Ogden issued three memoranda earlier this month regarding criminal discovery practices including a memorandum  to all prosecutors containing guidance on criminal discovery obligations.

The guidance to prosecutors, United States Attorneys’ Offices and the heads of all litigating components followed a review of the Department’s policies, practices, and training related to criminal case management and discovery ordered by the Attorney General. That review determined that incidents of discovery failures were rare in comparison to the number of cases prosecuted. However, the Department has instituted a number of steps intended to further ensure the Department complies with its discovery obligations.

Goldsmith serves as the First Assistant Chief of the Environment and Natural Resources Division’s Environmental Crimes Section, where he supervises environmental prosecutions and develops training on worker endangerment, environmental terrorism, and laboratory fraud, as well as electronic discovery. He served as Chief of the Environmental Crimes Unit of the New York Attorney General's Office and was an Assistant United States Attorney for the District of New Jersey. He previously worked as an Assistant District Attorney in the Manhattan District Attorney’s Office and in private practice.

Goldsmith has received the Attorney General’s John Marshall award as well as the Justice Department’s Distinguished Service Award. He earned his law degree from Albany Law School and his undergraduate degree from Cornell University.

WASHINGTON – Defendants Alec Sou and Mike Sou, co-owners of Aloun Farm, pleaded guilty on Jan.13, 2010, in federal district court in Honolulu, to conspiring to commit forced labor. The two defendants, who are brothers, each face up to five years in prison for their respective roles in a labor trafficking scheme that held Thai agricultural workers in service at Aloun Farm through a scheme of debts, threats and restraint.

During their respective plea hearings, the defendants acknowledged that they conspired with one another and with others to hold 44 Thai men in forced labor on a farm operated by the defendants, using a scheme of physical restraint and threats of serious harm to intimidate the workers and hold them in fear of attempting to leave the defendants’ service.

"Holding other human beings in servitude against their will is a violation of individual rights that is intolerable in a free society," stated Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. "This prosecution demonstrates our commitment to combating human trafficking in all its forms, vindicating the rights of trafficking victims, and bringing human traffickers to justice."

 

"Labor traffickers prey on vulnerable victims and their dreams of a better life. Those who conspire to hold workers in forced labor undermine this country's promise of liberty and opportunity," said Florence T. Nakakuni, U.S. Attorney for the District of Hawaii. "We will continue to hold accountable those who seek to enrich themselves at the expense of the freedom, rights and dignity of others."

In the past fiscal year, the Civil Rights Division, in partnership with U.S. Attorney’s Offices, brought a record number of human trafficking cases, including the highest number of labor trafficking cases ever brought in a single year.

The government’s case is being prosecuted by trial attorneys Susan French and Kevonne Small of the Criminal Section of the Civil Rights Division and its Human Trafficking Prosecution Unit and by Assistant U.S. Attorney Susan Cushman.

This case was investigated by FBI Special Agents Gary Brown in Honolulu and Tricia Whitehill in Los Angeles, with support from ICE Special Agents Frank Kalepa and Daniel Kenney.

Thirteen Detroit-area residents were arrested today by federal agents from the Department of Health and Human Services, Office of the Inspector General (HHS-OIG) and FBI in connection with an alleged home health care scheme to defraud the Medicare program of more than $14.5 million.

In a six-count indictment returned on Jan. 12, 2009, and unsealed today, the 13 individuals are alleged to have participated in a Medicare fraud scheme operated out of Patient Choice Home Healthcare (Patient Choice) and All American Home Care (All American), two Oakland County, Mich., home health agencies that purported to provide in-home health services. Muhammad Shahab, 50; Christopher Collins, 38; Hassan Akhtar, 26; Curtis Mallory, 35; Mohammed El-Fallal, 55; Jessica Vigil, 34; Tariq Chaudhary, 36; Faisal Chaudry, 31; and Visnhu Meda, 29, were all indicted for conspiracy to commit health care fraud. In addition, Shahab; Pramod Raval, M.D., 56; Guy Ross, 48; Lura Barrett, 61; and Stephen Cartier, 50, were charged with conspiracy to violate the Anti-Kickback Statute. Shahab and Akhtar were also each charged with two counts of money laundering. The indictment seeks the forfeiture of assets from all the defendants.

According to the indictment, Shahab, Akhtar and Collins owned and operated Patient Choice and All American. The home health agencies purported to provide home health therapy services to Medicare beneficiaries. The indictment alleges that Patient Choice and All American billed for home health therapy services that were unnecessary and were never performed. In addition, it alleges that Collins and Mallory recruited patients and paid them kickbacks for their Medicare information and signatures on documents. These false documents were then used to bill Medicare for home health services that were not rendered. The indictment also alleges that El-Fallal used the identity of a licensed physician to sign physician referrals for home health therapy services that were medically unnecessary and not performed. The indictment charges Vigil, Chaudhary, Chaudry and Meda with falsifying medical records to make it appear that home health therapy services were provided.

In addition, the indictment alleges that Shahab, Dr. Raval, Ross, Barrett and Cartier engaged in a conspiracy where Shahab would pay kickbacks to the others in exchange for patient referrals and access to Medicare beneficiaries under Dr. Raval, Ross, Barrett and Cartier’s care.

The indictment alleges that Medicare paid Patient Choice and All American more than $14.5 million for services that were medically unnecessary and not provided between August 2007 and September 2009. The charge of health care fraud conspiracy carries a maximum penalty of 10 years in prison and a $250,000 fine. The charge of violating the Anti-Kickback Statute carries a maximum prison sentence of five years and a fine of up to $25,000. Each violation of 18 USC 1956 (money laundering) carries a maximum prison sentence of 20 years and a maximum fine of $500,000. Each violation of 18 USC 1957 (money laundering) carries a maximum prison sentence of 10 years in prison and a maximum fine of $250,000.

An indictment is merely a charge and defendants are presumed innocent until proven guilty.

The case is being prosecuted by Deputy Chief Kirk Ogrosky, Senior Trial Attorney John Neal and Trial Attorney Gejaa Gobena of the Criminal Division’s Fraud Section. The case was investigated by the FBI and HHS-OIG. This prosecution is the latest in the Medicare Fraud Strike Force’s efforts in the Detroit area. The Strike Force is 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), Brooklyn (Phase Five), Tampa (Phase Six) and Baton Rouge (Phase Seven) - the Strike Force has obtained indictments of more than 475 individuals and organizations that collectively have billed the Medicare program for more than $1 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

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

Indictment

A federal grand jury today returned a superseding indictment adding three defendants, including Tahawwur Rana, to charges filed last month against David Coleman Headley, alleging that they and others participated in conspiracies involving a planned terrorist attack against a Danish newspaper and the November 2008 terrorist attacks in Mumbai, India, that killed approximately 164 people, including six Americans.

The 12-count superseding indictment contains the identical charges that were filed against Headley on Dec. 7, 2009, while adding Rana as a defendant in three of the counts charging material support of the terrorism plots in Denmark and India, as well as in support of the designated foreign terrorist organization Lashkar e Tayyiba. Also indicted were Ilyas Kashmiri, an allegedly influential terrorist organization leader in Pakistan who is alleged to be in regular contact with leaders of al Qaeda, and Abdur Rehman Hashim Syed (Abdur Rehman), a retired major in the Pakistani military, both of whom were charged in two conspiracy counts relating to the Denmark terrorism plot.

Both Rana and Abdur Rehman were charged separately in previous court filings, but today’s indictment charges Kashmiri for the first time, although he was identified by name in the charges filed previously against Rana, Abdur Rehman and Headley.

Rana, 49, a Canadian citizen, Chicago resident and native of Pakistan, has remained in federal custody in Chicago since he was arrested on Oct. 18, 2009, in connection with the planned attack in Denmark. He was indicted today on three counts of providing material support to terrorism or a terrorist organization — one count of providing material support in preparation for and in carrying out the Mumbai attacks; one count of providing material support to the Denmark terrorism plot; and one count of providing material support to Lashkar e Tayyiba (Lashkar.) Translated as the "Army of the Good," Lashkar operated in Pakistan for the principal purpose of fighting to separate from India portions of the Indian state of Jammu and Kashmir. Lashkar was designated as a foreign terrorist organization by the United States in December 2001.

No date has been set yet for Rana to be arraigned in federal court in Chicago. The case is assigned to U.S. District Judge Harry D. Leinenweber.

Kashmiri and Abdur Rehman, also known as "Major Abdur Rehman" and "Pasha," were each charged with one count of conspiracy to murder and maim persons in Denmark, and one count of providing material support to the Danish terrorism plot. Neither man is in U.S. custody.

Headley, 49, a U.S. citizen and Chicago resident, faces the same 12 counts that were filed against him last month — six counts of conspiracy involving bombing public places in India, murdering and maiming persons in India and Denmark, providing material support to foreign terrorist plots, and providing material support to Lashkar, and six counts of aiding and abetting the murder of U.S. citizens in India. Headley has remained in federal custody in Chicago since he was arrested in Chicago on Oct. 3, 2009. He has pleaded not guilty to the charges but previously authorized the Justice Department to disclose that he is cooperating in the ongoing investigation.

In 2002 and 2003, Headley allegedly attended terrorism training camps in Pakistan maintained by Lashkar, and conspired with its members and others, including Rana, Kashmiri and Abdur Rehman, in planning and executing the attacks in Denmark and India. He allegedly conducted extensive surveillance of targets in Mumbai for more than two years preceding the November 2008 attacks that killed approximately 164 people and left hundreds more injured.

Mumbai Terror Attacks

According to the charges, unnamed Lashkar Member A, who served as a "handler" for Headley and another person associated with Lashkar, advised Headley in late 2005 that Headley would be traveling to India to perform surveillance of potential targets for Lashkar. Headley changed his given name of Daood Gilani on Feb. 15, 2006, in Philadelphia, enabling him to present himself in India as an American who was neither Muslim nor Pakistani. In the spring of 2006, Lashkar Member A and a Lashkar associate discussed with Headley the idea that he could open an immigration office in Mumbai as a cover for his surveillance activities.

In approximately June 2006, Headley allegedly traveled to Chicago, advised Rana of his assignment to scout potential targets in India, and obtained approval from Rana, who owned First World Immigration Services in Chicago and elsewhere, to open a First World office in Mumbai as cover for his activities. Rana allegedly directed an individual associated with First World to prepare documents supporting Headley’s cover story of opening a First World office in Mumbai, and advised Headley how to obtain a visa for travel to India. Headley misrepresented his birth name, his father’s true name and the purpose of his travel in his visa application, the indictment alleges.

In July 2006, unnamed Person A in Pakistan gave Headley approximately $25,000 to establish and operate the Mumbai office of First World and to pay for living expenses while Headley carried out his assignment for Lashkar, the charges add.

Headley later made five extended trips to Mumbai — in September 2006, February and September 2007, and April and July 2008 — each time taking photographs and making videotapes of various potential targets, including those attacked in November 2008, and using his association with First World as cover for his travels. Before each trip, Lashkar members and associates allegedly instructed Headley regarding specific locations where he was to conduct surveillance, and Headley traveled to Pakistan after each trip to meet with Lashkar members and associates, report on the results of his surveillance, and provide the surveillance photos and videos.

During his meetings with Lashkar members and associates in Pakistan after the September 2007 surveillance trip to Mumbai, Lashkar Member A showed Headley a styrofoam mockup of the Taj Mahal hotel, and Person A provided Headley with approximately $2,000 worth of Indian currency for expenses, according to the indictment. Before the April 2008 surveillance trip, Lashkar Member A provided Headley with an additional $1,000 worth of Indian currency. In addition, Lashkar Members A and B provided Headley with a global positioning system device and showed him how to use it to record the locations of possible landing sites and potential targets in Mumbai, which Headley then used during his surveillance trips in April and July 2008, the charges state.

Before the July 2008 visit, Person A provided an additional $1,500 worth of Indian currency to Headley to keep the First World office open, but approved closing that office in the future and opening a new business in Delhi, India, to be used as cover for future activities. During Headley’s July 2008 surveillance mission, Person A communicated with Headley by passing messages to him through Rana, the indictment alleges.

Starting Nov. 26, 2008, and continuing through Nov. 28, 2008, 10 attackers trained by Lashkar carried out multiple assaults with firearms, grenades and improvised explosive devices against multiple targets in Mumbai, including the Taj Mahal and Oberoi hotels, the Leopold Café, the Chabad House and the Chhatrapati Shivaji Terminus train station, each of which Headley allegedly had scouted in advance, killing approximately 164 victims.

The six Americans killed during the three-day siege are identified in the charges as Ben Zion Chroman, Gavriel Holtzberg, Sandeep Jeswani, Alan Scherr, his daughter Naomi Scherr and Aryeh Leibish Teitelbaum.

Denmark Terror Plot

Regarding the Denmark terror plot, Headley allegedly conspired between October 2008, and Oct. 3, 2009, with Kashmiri, Abdur Rehman and others to plan and carry out terrorist attacks, including murder and maiming, against the facilities of the Morgenavisen Jyllands-Posten, a Danish newspaper, and two of its employees, Editor A and Cartoonist A. In 2005, the newspaper had published 12 cartoons, some of which depicted the Prophet Mohammed, setting off protests throughout the Muslim world. In early 2008, the Jyllands-Posten and other Danish newspapers republished one of the cartoons which had drawn particularly strong criticism.

Today’s indictment alleges that Headley met with Lashkar Member A in Pakistan in October 2008 and discussed the prospect of an attack on the newspaper, including extensive surveillance work that Headley would perform. Lashkar Member A allegedly provided Headley with a thumb drive containing information about Denmark, the city of Copenhagen, and the newspaper. In late December 2008 and early January 2009, after reviewing with Rana how he had performed surveillance of the targets attacked in Mumbai, Headley advised Rana of the planned attack on the Danish newspaper and his intended travel to Denmark to conduct surveillance of its facilities. Headley allegedly obtained Rana’s approval and assistance to identify himself as a representative of First World and gain access to the newspaper’s offices by falsely expressing interest in placing advertising for First World in the newspaper. At the same time, while in Chicago, Headley exchanged emails with Abdur Rehman to continue planning for the attack and to coordinate his travel to Denmark to conduct surveillance. Before departing Chicago, Headley and Rana caused business cards to be made that identified Headley as a representative of the Immigration Law Center, the business name of First World, according to the charges.

Headley allegedly traveled in January 2009, from Chicago to Copenhagen, Denmark, to conduct surveillance of the Jyllands-Posten newspaper offices in Copenhagen and Aarhus and to videotape the surrounding areas. On Jan. 29, 2009, Rana, posing as Headley, allegedly sent an email to the Jyllands-Posten pretending to be interested in placing an advertisement in the newspaper on behalf of First World.

In late January 2009, Headley traveled to Pakistan and met separately to discuss the planning with Abdur Rehman and Lashkar Member A. In February 2009, Abdur Rehman allegedly took Headley to meet with Kashmiri in the Waziristan region of Pakistan. During the meeting, Kashmiri allegedly indicated that he had reviewed the surveillance videos made by Headley and suggested using a truck bomb in the operation. Kashmiri further indicated that he could provide manpower for the operation and that Lashkar’s participation was not necessary, the indictment alleges. Subsequently, in March 2009, Lashkar Member A advised Headley that Lashkar put the newspaper attack on hold because of pressure in the aftermath of the Mumbai attacks, according to the charges.

In May 2009, Headley and Abdur Rehman met again with Kashmiri in Waziristan and Kashmiri allegedly directed Headley to meet with his European contacts who could provide Headley with money, weapons and manpower for the newspaper attack. In late July and early August 2009, Headley traveled from Chicago to various places in Europe, including Copenhagen, attempting to obtain assistance from Kashmiri’s contacts and, while there, made approximately 13 additional surveillance videos, according to the charges.

In September 2009, Headley and Rana allegedly spoke about reports that Kashmiri had been killed in a drone attack and the implications of his possible death for the plan to attack the newspaper. Later that month, Abdur Rehman, from Pakistan, allegedly called Headley to report that Kashmiri was not killed and was anxious to move forward with attacking the newspaper. In the late summer of 2009, Rana and Headley allegedly agreed that funds that had been provided to Rana could be used to fund Headley’s work in Denmark.

On Oct. 3, 2009, Headley was arrested at O’Hare International Airport in Chicago, intending ultimately to travel to Pakistan to meet with and deliver the approximately 13 surveillance videos to Abdur Rehman and Kashmiri, the indictment alleges.

The charges identify Kashmiri as an influential leader of Harakat-ul Jihad Islami (HUJI), an organization that trained terrorists and executed attacks in the state of Jammu and Kashmir under Indian control and other areas. Kashmiri based his operations from the Federally Administered Tribal Areas (FATA) of western Pakistan, an area which served as a haven for terrorist organizations, including al Qaeda. Kashmiri allegedly was in regular contact with al Qaeda and in particular with an al Qaeda leader, Mustafa Abu al Yazid, also known as "Sheik Said al Masri."

According to the indictment, in June 2008, al Qaeda, through its media wing known as "As Sahab Media," took credit for an attack on the Danish Embassy in Islamabad, Pakistan, and called for further attacks against Danish interests to avenge the publication of the cartoons depicting the Prophet Mohamed first published in the Jyllands-Posten in 2005. In August 2008, al Qaeda released a video through As Sahab Media calling for further attacks in retaliation for the publication of the cartoons, and Mustafa Abu al Yazid, among others, appeared in the video. The indictment alleges that in July 2009, Headley provided the al Qaeda video to Rana in Chicago.

The counts against Headley charging conspiracy to bomb public places in India that resulted in deaths and aiding and abetting the murders of U.S. nationals each carry a maximum statutory penalty of life imprisonment or death. All of the other counts against Headley carry a maximum of life imprisonment, except providing material support to the Denmark terror plot — against all four defendants — carries a maximum prison term of 15 years.

The other two material support counts against Rana, and the conspiracy to murder and maim people in Denmark against Kashmiri and Abdur Rehman, also carry a maximum of life in prison.

The government is being represented by Assistant U.S. Attorneys Daniel Collins and Victoria J. Peters, as well as Assistant U.S. Attorneys Christopher Grigg and Janet Hudson of the Los Angeles U.S. Attorney’s Office, with assistance from the Counterterrorism Section of the Justice Department’s National Security Division.

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

WASHINGTON—Gunther Wenzek, a German national, was sentenced today to serve three years on probation and pay a criminal penalty of over $35,000 by Judge Anna J. Brown of the U.S. District Court for the District of Oregon for smuggling coral into the Port of Portland, Ore., the Justice Department announced. 

The penalty included a criminal fine of $16,510, nearly $10,000 in restitution to the National Oceanic and Atmospheric Administration, and a community service payment of $8,890. 

Wenzek owns a company named CoraPet, based in Essen, Germany, that sells various coral products to retailers in the United States. The investigation was launched in 2007 after Wenzek tried to ship a container loaded with fragments of endangered coral from reefs off the Philippine coast to Portland. After this initial shipment, agents subsequently seized two full containers of endangered coral shipped by Wenzek to a customer in Portland. These two shipments made up a total of over 40 tonsof coral.

A grand jury indicted Wenzek in July of 2008. He pleaded guilty on Oct. 14, 2009, to a smuggling charge for illegally importing merchandise contrary to law. Wenzek admitted that he knowingly failed to declare the coral as wildlife. Wildlife declarations for imports are essential to ensuring that endangered and threatened species are not being illegally imported into the United States.

The corals seized have been identified as corals from the scientific order Scleractinia, genera Porites, Acropora, and Pocillopora, common to Philippine reefs. Due to the threat of extinction, stony corals, such as those seized in this case are protected by international law. Philippine law specifically forbids exports of all coral. Moreover, the Convention on International Trade in Endangered Species bars importation of the coral Wenzek tried to import to customers in the United States, without a permit.

"Protection of coral reefs both domestically and internationally is critically important for the health of our marine environment," said Ignacia S. Moreno, Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. "We will continue to use law enforcement resources at our disposal to investigate and prosecute those who smuggle endangered species like coral."

"Reefs are essential resources for maintaining fisheries, for biodiversity, for habitat and for addressing climate change. Importers need to know that we will defend these resources and prosecute criminal violators, and we stand ready to pursue these cases worldwide," said Kent Robinson, Acting U.S. Attorney for the District of Oregon. "The assistance of the Philippine government was absolutely critical to the success of this case, and we thank the government and people of the Philippines for their vital help in protecting marine resources."

 "With many of the world’s coral reefs increasingly threatened by climate change, stopping the illegal harvest and trade of coral is more important than ever," said Paul Chang, Special Agent in Charge of Law Enforcement for the U.S. Fish and Wildlife Service's Pacific Region, based in Portland, Ore. "The cooperation of law enforcement agents in this case sends a message to would-be smugglers that this assault on a precious resource will not be tolerated."

The case was investigated by the U.S. Fish and Wildlife Service, U.S. Immigration and Customs Enforcement and the National Marine Fisheries Service. The case was prosecuted by U.S. Attorney’s Office for the District of Oregon and the Justice Department’s Environmental Crimes Section.

WASHINGTON – On Jan. 13, 2010, Dilraj Mathaudaentered a guilty plea in federal district court in Miami to one count of an indictment pending against him, charging conspiracy to commit mail and wire fraud, the Justice Department and the U.S. Postal Inspection Service announced today.

Mathauda was arrested following his indictment by a Miami federal grand jury on June 9, 2009, based on charges that he and his co-conspirators purported to sell beverage and greeting card business opportunities, including assistance in establishing, maintaining and operating such businesses. The charges form part of the government’s continued nationwide crackdown on business opportunity fraud.

Mathauda worked for USA Beverages Inc. and Omega Business Systems Incorporated. Beginning in 2005, USA Beverages sold business opportunities to own and operate coffee beverage display racks. USA Beverages rented office space in Las Cruces, N.M., and otherwise made it appear to potential purchasers that USA Beverages’ operations were fully within the United States. However, USA Beverages actually operated from Costa Rica. Omega was a Wisconsin and Florida corporation.

In 2007 and early 2008, Omega sold business opportunities to own and operate greeting card display racks. Omega rented office space in Madison, Wis., and otherwise made it appear to potential purchasers that Omega’s operations were fully within the United States. However, Omega actually operated from Costa Rica.

To fraudulently induce others to purchase the business opportunities, Dilraj Mathauda and his co-conspirators made, and caused others to make, numerous false statements to potential purchasers of the business opportunities. Potential purchasers were falsely told that the companies were established years earlier, had a significant number of distributors across the country, and had a track record of success. Potential purchasers were referred to references who told false tales of their success as business opportunity owners. Through these and other misrepresentations, purchasers of the business opportunities were led to believe that they would likely earn substantial profits.

"Business opportunity fraud causes significant financial hardship for victims who are trying to start a business and earn a living," said Tony West, Assistant Attorney General for the Department of Justice’s Civil Division. "The Justice Department is committed to uncovering and vigorously prosecuting business opportunity fraud."

Mathauda faces a maximum sentence of 25 years in prison, a possible fine and mandatory restitution.

"This guilty plea demonstrates that individuals living outside of the United States will not be allowed to use technology to commit fraud on the American public. This investigation illustrates our resolve to protect American consumers from business scams, wherever they occur," said U.S. Postal Inspector in Charge, Henry Gutierrez, based in Miami.

"The Postal Inspection Service remains vigilant in investigating and rooting out business opportunity fraud. Consumers must be aware that false references and empty promises of assistance locating display racks and merchandise are extremely common in this type of scam," said U.S. Postal Inspector in Charge Pete Zegarac, based in Phoenix. "These companies took over the corporate identities of businesses established long ago – so even claims of being in business for many years must be viewed with caution."

Assistant Attorney General West commended the investigative efforts of the Postal Inspection Service, as well as the Federal Trade Commission, which previously brought a related civil suit and made a criminal referral. This matter is being prosecuted by trial attorneys in the Justice Department’s Office of Consumer Litigation.

WASHINGTON – The Department of Justice today announced that Paul Schlesselman pleaded guilty to one count of conspiracy, one count of threatening to kill and inflict bodily harm upon a presidential candidate, and one count of possessing a firearm in furtherance of a crime of violence. Schlesselman faces a sentence of 10 years under the plea agreement. A sentencing date of April 15, 2010, was set by Judge J. Daniel Breen, who is presiding over the case in Jackson, Tenn.

Schlesselman of West Helena, Ark., admitted to conspiring to murder dozens of people, with a focus on murdering African-Americans. He further acknowledged that he intended to culminate his killing spree by assassinating then-Senator Barack Obama, who was a presidential candidate at the time.

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

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

Schlesselman admitted that beginning on or about Sept. 1, 2008, and continuing until Oct. 22, 2008, he conspired to transport firearms and ammunition in interstate commerce, steal firearms from a licensed firearms dealer and transport in interstate commerce a short-barreled shotgun, all for the purpose of committing murders, robberies and burglaries.

Schlesselman further acknowledged that on Oct. 20, 2008, he unlawfully transported an unregistered short barreled shotgun and a .357 magnum caliber handgun across state lines for the purpose of committing felonies, including racially targeted murders.

Schlesselman also admitted that on Oct. 23, 2008, he threatened to kill and inflict bodily harm on President Barack Obama, who was a presidential candidate at the time.

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

Anthony Mowl, the former assistant vice president of business development for Viable Communications Inc. (Viable), and Donald Tropp, the former human resources manager for Viable, pleaded guilty today to engaging in a conspiracy to defraud the Federal Communications Commission’s (FCC) Video Relay Service (VRS) program of more than $2.5 million, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division.

Today, Mowl, 25, and Tropp, 25, pleaded guilty before U.S. District Court Judge Joel A. Pisano in Trenton, N.J., to conspiracy to commit mail fraud. Mowl and Tropp were indicted on Nov. 19, 2009, along with Viable’s president, John T.C. Yeh; Viable’s vice president of corporate strategy, Joseph Yeh; and the Viable corporate entity.

In pleading guilty, Mowl and Tropp admitted that beginning in approximately fall of 2007 and continuing through approximately January 2009, they conspired with others to pay individuals to make fraudulent VRS phone calls using Viable’s VRS service. According to the pleas, John and Joseph Yeh paid Mowl and Tropp who would then pay people for using Viable’s VRS service. Mowl and Tropp kept a portion of the payments for themselves and distributed the remainder to the paid callers.  Viable then caused the submission of fraudulent call minute claims to the FCC, causing the FCC to pay those claims at a rate of approximately $390 per hour for each of the VRS calls that it processed.

According to the indictment, VRS is an online video translation service that allows people with hearing disabilities to communicate with hearing individuals through the use of interpreters and web cameras. A person with a hearing disability who wants to communicate with a hearing person can do so by contacting a VRS provider through an audio and video Internet connection. The VRS provider, in turn, employs a video interpreter to view and interpret the hearing disabled person’s signed conversation and relay the signed conversation orally to a hearing person. VRS is funded by fees assessed by telecommunications providers to telephone customers, and is provided at no cost to the VRS user.

According to information contained in the plea documents, Mowl and Tropp admitted that their role in defrauding the FCC’s VRS program led to a total of between $2.5 million and $7 million in fraudulent billing to the program. At sentencing, both Mowl and Tropp face a maximum sentence of 20 years in prison, a fine of $250,000, as well as mandatory restitution and forfeiture. A sentencing date has not yet been set by the court.

Co-defendants John T.C. Yeh, Joseph Yeh and Viable are scheduled to stand trial on the charges in the indictment on May 24, 2010. An indictment is merely an accusation, and defendants are presumed innocent until and unless proven guilty at trial beyond a reasonable doubt.

In addition to the indictment charging the Yehs, Mowl, Tropp and Viable, five indictments were unsealed on Nov. 19, 2009, charging an additional 22 people with engaging in a scheme to steal millions of dollars from the FCC’s VRS program.  The indictments charge owners and employees of the following six companies with engaging in a scheme to defraud the FCC’s VRS program:

• Master Communications LLC, of Las Vegas;
• KL Communications LLC, of Phoenix;
• Mascom LLC of Austin, Texas;
• Deaf and Hard-of-Hearing Interpreting Services Inc. (DHIS), of New York and New Jersey;
• Innovative Communication Services for the Deaf Corp. (ICSD), of Miami Lakes, Fla.; and
• Deaf Studio 29 of Huntington Beach, Calif.

These cases are being prosecuted by Assistant Chief Hank Bond Walther and Trial Attorney Brigham Cannon of the Criminal Division’s Fraud Section. The cases are being investigated by FBI’s Washington Field Office, the U.S. Postal Inspection Service and the FCC Office of Inspector General.

WASHINGTON – Bradley C. Brennecke, a resident of Pleasant Plain, Ohio, and Bruce A. Mrusek, a resident of Maineville, Ohio, pleaded guilty late Tuesday to conspiracy and tax evasion charges before District Court Judge Michael R. Barrett in Cincinnati, the Justice Department and Internal Revenue Service (IRS) announced.

Mrusek and Brennecke, who are both dentists, were indicted in July 2009 and charged with tax evasion, conspiracy to defraud the IRS and passing fictitious instruments. Mrusek and Brennecke were scheduled to begin trial on Jan.11, 2010. However, both defendants failed to appear in court. Both defendants were subsequently arrested. Facing trial on multiple counts, each defendant elected to plead guilty to conspiracy and tax evasion.

According to admissions made by the defendants at the plea hearing, Brennecke, who operated Goshen Family Dentistry Ltd. in Goshen, Ohio, failed to pay taxes for 1998, 2002, 2003 and 2004. Additionally, the indictment alleges that Brennecke transferred title of his house to his wife to conceal it from the IRS, sent the government bogus documents that purported to pay his tax liabilities and filed false tax returns.

According to admissions made by the defendants at the plea hearing, Mrusek, who owned and operated Wilmington Dental Management Services in Wilmington, Ohio, evaded his 2002, 2003 and 2004 taxes by transferring his assets to his wife’s name, sending bogus documents to the IRS that purported to pay his tax liabilities, using a trust to pay personal expenses and filing false personal tax returns. Additionally, the indictment alleges that Mrusek filed false tax returns for Wilmington Dental Management Services by reporting deductions that the business did not incur.

According to admissions made by the defendants at the plea hearing, Brennecke and Mrusek conspired to defraud the IRS beginning around the time that the IRS began civil audits of each of them. Brennecke and Mrusek assisted each other in the mailing of various fraudulent documents to the IRS and U.S. Treasury Department. Brennecke assisted Mrusek in the transfer of assets out of Mrusek’s name. For each defendant, the total attempted tax loss was between $400,000 and $1 million.

Judge Barrett has not yet set a sentencing date. Both men face a maximum term of 10 years in prison and a maximum fine of $500,000.

John A. DiCicco, Acting Assistant Attorney General of the Justice Department’s Tax Division, commended the IRS Criminal Investigation Division who investigated this case, as well as Tax Division trial attorneys Shawn T. Noud and Daren H. Firestone who prosecuted this case.

WASHINGTON—Clement Calhoun, a member of the Cherokee Nation in North Carolina, was sentenced in federal court in the Western District of North Carolina, to six months in prison for illegally transporting and selling 51 bear gall bladders, the Justice Department announced today.

He was also sentenced to serve one year of supervised release following the prison sentence. As a condition of release, he is not permitted to hunt or possess a hunting license.

Calhoun pleaded guilty on Dec. 9, 2009, to two counts charging him with transporting and selling bear parts in violation of the Lacey Act. He admitted that on various occasions during 2005, he knowingly transported 51 bear gall bladders from trust lands and sold them to non-members in violation of the Cherokee code.

Traditional Asian medicinals involve the use of many parts of the bear, with bile from the gall bladder being the most coveted part. Increasing demand for bear gall bladders may threaten the black bear population within the United States.

The conviction arose from a three-year anti-poaching investigation intended to document the unlawful take, purchase, sale and transport of ginseng and bear parts within and along the southern Appalachians by various individuals.

The Lacey Act is a federal law that makes it illegal to transport or sell wildlife taken, possessed, transported or sold in violation of Tribal law or regulation. Bear, whether taken alive or dead, are considered wildlife under both the Lacey Act and the Cherokee code. The Cherokee code makes it illegal for any person to sell body parts from bears to any non-member or to any person beyond the boundaries of Cherokee Indian trust lands or to any person who will remove such organ, skin or body part from Cherokee Indian trust lands.

"This operation and its resulting conviction and sentence should send a message to those illegally trafficking in animal parts," said Ignacia S. Moreno, Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. "We at the Justice Department take these crimes seriously and will continue to focus on regions and areas where this activity is suspected."

The case was prosecuted by Shennie Patel of the Justice Department’s Environmental Crimes Section and the U.S. Attorney’s Office for the Western District of North Carolina. 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.

WASHINGTON - The United States has asked a federal court in Dublin, Ga., to permanently bar James J. King from preparing federal income tax returns for others, the Justice Department announced today. According to the government complaint, King of Telfair County, Ga., operates a business called "James King Tax Service" which prepares federal income tax returns for customers that unlawfully understate income tax liabilities through a variety of schemes.

The government complaint alleges that King prepared returns that fabricate or inflate deductions and that he prepared returns that unlawfully claim the Earned Income Tax Credit. According to the complaint, the Internal Revenue Service has examined over 100 returns prepared by King and found that the great majority of those resulted in a tax deficiency. The total deficiency of the audited returns is alleged to be greater than $400,000. Altogether, the government complaint alleges that King’s activities may have resulted in the tax loss of tens of millions of dollars.

Over the past decade, the Justice Department’s Tax Division has obtained more than 435 injunctions to stop tax fraud promoters and dishonest tax return preparers. Information about these cases is available on the Justice Department Web Site.

WASHINGTON – The Justice Department today announced separate agreements under the Americans with Disabilities Act (ADA) with Case Western Reserve University in Cleveland, Pace University in New York City and Reed College in Portland, Ore., regarding the use in a classroom setting of the electronic book reader, the Kindle DX, a hand-held technological device that simulates the experience of reading a book.

Under the agreements reached today, the universities generally will not purchase, recommend or promote use of the Kindle DX, or any other dedicated electronic book reader, unless the devices are fully accessible to students who are blind and have low vision. The universities agree that if they use dedicated electronic book readers, they will ensure that students with vision disabilities are able to access and acquire the same materials and information, engage in the same interactions, and enjoy the same services as sighted students with substantially equivalent ease of use. The agreements that the Justice Department reached with these universities extend beyond the Kindle DX to any dedicated electronic reading device.

These agreements follow the Jan. 11, 2010 agreement between the Justice Department, Arizona State University, the National Federation of the Blind and the American Council of the Blind concerning the use of electronic book readers.

"Advancing technology is systematically changing the way universities approach education, but we must be sure that emerging technologies offer individuals with disabilities the same opportunities as other students," said Assistant Attorney General Thomas E. Perez. "These agreements underscore the importance of full and equal educational opportunities for everyone."

A handful of universities participated in a pilot project in cooperation with Amazon.com Inc. to test the viability of the Kindle DX in a classroom setting. The terms of the Justice Department’s agreement with each university become effective at the end of the pilot projects.

The current model of the Kindle DX has the capability to read texts aloud, so that the materials would be accessible to blind individuals, but the device does not include a similar text-to-speech function for the menu and navigational controls. Without access to the menus, students who are blind have no way to know which book they have selected or how to access the Kindle DX Web browser or its other functions. The technological "know how" to make navigational controls or menu selections accessible is available.

Other universities, such as Syracuse University and the University of Wisconsin at Madison, also examined the utility of the Kindle DX as a teaching device and decided that they would not use the Kindle DX until it is accessible to blind individuals.

In passing the ADA and the recent ADA Amendments Act, Congress found that individuals with disabilities were uniquely disadvantaged in critical areas, including education. It is a core priority of the Civil Rights Division to strengthen and expand the educational opportunities for individuals with disabilities.

The ADA prohibits discrimination by public accommodations on the basis of disability, including discrimination in private post-secondary institutions. 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 .

WASHINGTON – The Justice Department filed a lawsuit today against the Valley Club of Huntingdon Valley, Penn., alleging that the club engaged in a pattern or practice of discrimination on the basis of race or color.

The United States’ lawsuit alleges that the Valley Club, which operates and maintains educational and recreational facilities, including a swimming pool, adopted a racially-discriminatory policy to bar summer camps from using its facilities after a group of predominantly African-American school children visited the facility.

The complaint, filed today in U.S. District Court in Philadelphia, is brought according to Title II of the Civil Rights Act of 1964. Title II mandates the full and equal enjoyment of rights in places of public accommodation regardless of race, color, religion or national origin. The lawsuit seeks to obtain injunctive relief under Title II to remedy such discrimination by changing policies and practices.

The complaint alleges that on June 30, 2009, one day after a group of 56 school children from Creative Steps Inc., a Philadelphia-area summer camp program, visited Valley Club, the club’s president and board of directors adopted a policy to bar all summer camps from using its facilities. The complaint further alleges that the Valley Club adopted this policy in response to racially-motivated opposition from the Valley Club’s members to the children of Creative Steps, which had contracted with the club to permit elementary school-aged campers to swim there for 90 minutes once per week during the summer. Immediately after Valley Club adopted the policy, it informed Creative Steps that the children could not return to the club and refunded the camp’s money.

"Denying African-American children entry to a swimming pool because of the color of their skin is a deplorable violation of this nation’s civil rights laws," said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. "It is illegal and inexcusable to discriminate against patrons by barring them from a place of public accommodation on the basis of race or color."

The enforcement of Title II is a priority of the Justice Department’s Civil Rights Division. Additional information about the Civil Rights Division of the Justice Department is available on its Web site at http://www.usdoj.gov/crt. Persons with information or complaints regarding discriminatory practices at the Valley Club or other public facilities may call the Department of Justice at 1-800-896-7743, ext. 997.

WASHINGTON - The Justice Department announced today it has sued George K. Pragovich of Clarksville, Tenn., to stop him from promoting an alleged nationwide scheme involving hundreds of frivolous lawsuits filed against the United States. According to the civil injunction lawsuit, filed in U.S. District Court in Nashville, Tenn., Pragovich sells services and materials that help customers, many of whom have substantial federal income tax liabilities, to file frivolous lawsuits against the United States in the U.S. District Court for the District of Columbia. Customers from at least 35 different states have allegedly used Pragovich’s scheme to file over 200 of the frivolous lawsuits.

The government complaint alleges that Pragovich falsely tells customers that he can fix their tax problems and, in addition, help them get thousands of dollars from the government in damages, by helping them file the lawsuits. Pragovich also allegedly falsely tells customers that if their lawsuit is successful, they will never have to file a federal income tax return or pay federal income taxes again and that all of the lawsuits will eliminate the Internal Revenue Service (IRS).

Pragovich, who the complaint says is not a lawyer, allegedly provides customers with ready-to-file lawsuit complaints that falsely claim that the IRS and its employees have unlawfully disclosed customers’ federal tax information or unlawfully collected taxes. Pragovich also allegedly provides customers with detailed instructions regarding how to file the complaints and how to respond to government motions in the lawsuits. According to the government’s complaint, Pragovich charges an average of about $7,500 per customer for these services, and has received a total of more than $1 million from his clients.

The government complaint alleges that the frivolous suits are largely premised on misguided tax protester arguments. The complaint says that almost every Pragovich-promoted case has been dismissed. One judge, in dismissing one of the cases, described the lawsuit as "frivolous" and "groundless," a "boilerplate pleading filed without concern for the law, the facts, or the redundant expenditure of judicial resources."

Despite the repeated dismissals, Pragovich allegedly continues to promote the frivolous scheme, and frivolous suits continue to be filed with the court in the District of Columbia. Pragovich has allegedly stated to customers that he intends to "bury" the Department of Justice and the court system with at least 1,000 lawsuits in ten separate jurisdictions.

In the past decade the Tax Division has obtained injunctions against more than 435 tax preparers and tax fraud promoters. Information about these cases is available on the Justice Department Web site.

WASHINGTON Assistant Attorney General for Civil Rights Thomas E. Perez and U.S. Attorney for the Southern District of Texas Tim Johnson today announced the conviction of a former trooper with the Texas Department of Public Safety who was charged with depriving multiple motorists of their civil rights. The jury returned guilty verdicts on all four counts of the indictment that charged Michael Anthony Higgins with violating federal law by willfully stealing money from motorists that he had stopped on the highway while working as a trooper. The jury’s verdicts were returned today after one and one-half hours of deliberation in federal court in Corpus Christi, Texas.

Higgins was prosecuted for stopping motorists who appeared to be of Hispanic descent and stealing their money, usually in amounts of several hundred dollars. As a result of the civilian complaints, the Department of Public Safety (DPS), in conjunction with the Texas Rangers, initiated an undercover operation to investigate Higgins. An undercover officer posed as a civilian of Hispanic descent with limited English language ability. The undercover officer was issued several pre-recorded $100 bills. While being monitored by DPS aerial surveillance, the undercover officer drove past Higgins’ duty area in Kleberg County and was eventually stopped by Higgins. Upon making the traffic stop, Higgins asked the undercover officer for money in his possession and then took the money behind the passenger side door of his patrol vehicle.

After Higgins returned bills to the officer, the officer realized that some of the money was missing. Texas Rangers and DPS officers confronted Higgins and, upon inspection of the patrol vehicle, found two of the pre-recorded $100 bills secreted in the passenger side door pocket which was next to the area where Higgins had gone to count the money.

"The defendant abused the power granted to him as a law enforcement officer to prey upon unsuspecting motorists for personal gain. He violated not only the law, but also the public trust," said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. "I commend the Department of Public Safety and the FBI for their thorough investigation."

"This defendant’s duty was to protect and defend motorists, not to profile drivers and steal their money," said Tim Johnson, U.S. Attorney for the Southern District of Texas. "We commend the action of the Department of Public Safety and the Texas Rangers to investigate the civilian complaints quickly and that of the FBI to further the investigation leading to today’s convictions."

Higgins faces a maximum sentence of up to four years in prison, restitution and a $400,000 fine. Sentencing has been set for April 20, 2010.

The case was investigated by the FBI, Texas Rangers and Officers of the Texas Department of Public Safety. The case is being prosecuted by Assistant U.S. Attorney Ruben Perez of the U.S. Attorney’s Office for the Southern District of Texas and Trial Attorney Jim Felte from the Civil Rights Division.

The Department of Justice has appointed Francey Hakes to serve as the National Coordinator for Child Exploitation Prevention and Interdiction. The position, working out of the Office of the Deputy Attorney General, was created by Congress in the Protect Our Children Act of 2008.

"I am thrilled to announce Francey in this important position at the Department of Justice," said Deputy Attorney General Ogden. "The national coordinator will play a crucial role in combating child exploitation around the country, and I am certain that Francey will do an outstanding job."

The national coordinator is charged with formulating and implementing a national strategy to combat child exploitation, and with submitting the strategy and relevant reports to Congress. This effort has been underway at the Justice Department since the legislation was enacted. As the national coordinator, Hakes will serve as the department’s liaison with all federal agencies regarding the development and implementation of the national strategy, work to ensure proper coordination among agencies involved in child exploitation prevention and interdiction, and communicate with Congress on issues relating to the national strategy.

Hakes is currently an Assistant U.S. Attorney in the Northern District of Georgia. She joined the U.S. Attorney’s office in 2002, after having served as an Assistant District Attorney in Georgia for six years. Over the last 13 years, Hakes has focused on child exploitation offenses, and has worked with international, federal, state and local law enforcement as well as victim’s groups to prosecute offenders and protect children.

WASHINGTON — A New York Presbyterian Hospital (NYPH) purchasing official pleaded guilty today to conspiring to rig bids on re-insulation services contracts, the Department of Justice announced today.

Freddy Deoliveira, who held various supervisory positions at the NYPH, pleaded guilty in U.S. District Court in Manhattan. According to the charge, between approximately October 2000 and March 2005, Deoliveira conspired with others to create the appearance that contracts at NYPH were awarded in accordance with NYPH’s competitive bid policy, when, in fact, they were not. Deoliveira admitted that he designated which company would submit the low bid on a contract, and which company or companies would submit higher, complementary bids, to ensure that his designated company would be awarded the contract. To create the illusion of a competitive bidding process, Deoliveira’s co-conspirators would use each other’s letterhead to submit the high, noncompetitive bids. In exchange for awarding the contracts to the designated bidder, Deoliveira received cash kickbacks from his co-conspirators.

The bid rigging violation with which Deoliveira is charged carries a maximum penalty of 10 years in prison and a $1 million fine. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victim of the crime, if either of those amounts is greater than the statutory maximum fine.

This charge arose from an ongoing federal antitrust investigation of fraud, bribery, tax-related offenses and bidding irregularities relating to contracts administered by the Facilities Operations Department and the Engineering Department at NYPH and the Engineering Department at Mount Sinai Medical Center. To date, seven individuals and three companies have pleaded guilty to charges arising out of the same investigation. The investigation is being conducted by the Antitrust Division’s New York Field Office, the FBI and the Internal Revenue Service Criminal Investigation’s New York Field Office.

Anyone with information concerning bid rigging, bribery, tax offenses or fraud related to contracts administered by the Facilities Operations Department at NYPH or the Engineering Departments at Mount Sinai or NYPH should contact the Antitrust Division’s New York Field Office at 212-264-9308 or the FBI’s New York Division at 212-384-4467.

WASHINGTON - John D. Stacey of Mesa, Ariz., was sentenced by U.S. District Judge Neil V. Wake to 77 months in prison and ordered to pay $1.5 million dollars in restitution on Jan. 7, 2010, the Justice Department and Internal Revenue Service (IRS) announced today.

Following a jury trial in June 2009, Stacey was convicted on charges of income tax evasion, corrupt interference with the due administration of the IRS, and multiple counts of fraudulent use of a social security number. According to the evidence presented at trial, Stacey operated a sole proprietorship asphalt paving company that did business under various names, including A to Z Paving, Triple A Paving, Texas Paving, Pave Your Way Construction and A to Z Paving Engineering, among others. Stacey earned gross income in excess of $4 million from his business during the years 2000 to 2003, but he has never filed an individual income tax return with the IRS.

According to the evidence presented at trial, since at least February 2002, Stacey knew that he owed taxes, penalties and interest for tax years 1995, 1996 and 1997. Stacey has made no payments to the IRS towards this tax debt. In addition to not paying his outstanding tax debt, Stacey took numerous steps to frustrate the IRS’s efforts to both investigate the case and collect tax that he owed. For example, Stacey made multiple false statements to IRS agents, operated his business to prevent creating business records, made a number of luxury purchases rather than paying his outstanding tax debt and provided paving customers and financial institutions with multiple false social security numbers to prevent the IRS from receiving accurate information about his income, assets and financial transactions.

John A. DiCicco, Acting Assistant Attorney General of the Justice Department’s Tax Division, commended the IRS Criminal Investigation Division agents who investigated the case, as well as Tax Division trial attorneys Monica Edelstein and Ellen Quattrucci who prosecuted the case.

WASHINGTON—Howard William Ledford of Hayesville, N.C., was sentenced today in federal court in the Western District of North Carolina to serve one year in prison for illegally selling and transporting wild American ginseng into Georgia, the Justice Department announced. Ledford was also fined $50,000 which will be placed in the Lacey Act Reward Account.

Ledford pleaded guilty on Nov. 9, 2009, to two counts charging him with selling and transporting wild American ginseng in violation of the Lacey Act. Ledford admitted that in 2004 and 2005 he sold wild ginseng for approximately $109,000 without the required export certificates and transported, or caused the transport of wild ginseng into Georgia from North Carolina.

The conviction arose from a three-year anti-poaching investigation intended to document the unlawful take, purchase, sale and transport of ginseng and bear parts within and along the southern Appalachians by various individuals.  The individual to whom Ledford illegally sold the ginseng, Chiu Hung Lo, aka Sherry Lo, also pleaded guilty on Nov. 9, 2009 and will be sentenced at a later date.

The Lacey Act is a federal law that makes it illegal to transport or sell plants taken, possessed, transported, or sold in violation of state law or regulation. Wild ginseng is considered a plant under both the Lacey Act and North Carolina law. It is unlawful under North Carolina law to export or ship any amount of ginseng out of the state without an export certificate issued by the state.

The case was prosecuted the Justice Department’s Environmental Crimes Section and the U.S. Attorney’s Office for the Western District of North Carolina. The case was investigated by the U. S. Fish and Wildlife Service’s Office of Law Enforcement, with assistance from the National Park Service and Georgia Department of Natural Resources.

Miami resident Ingrid Mazorra pleaded guilty today in U.S. District Court in Miami to participating in a conspiracy to defraud the Medicare program.

Mazorra, 35, pleaded guilty to one count of conspiracy to commit health care fraud before U.S. District Judge Ursula Ungaro.  In pleading guilty, Mazorra admitted that in approximately September 2006, she agreed to help operate a fraudulent infusion and injection clinic, called Xpress Center Inc., in Livonia, Mich.  Mazorra admitted that while the clinic was open, the clinic routinely billed the Medicare program for services that were medically unnecessary or were never provided.  Mazorra admitted that she and her co-conspirators at the clinic had purchased only a small fraction of the medications that the clinic billed the Medicare program for providing. 

Mazorra admitted that Medicare beneficiaries were recruited to come to the clinic through the payment of kickbacks.  Mazorra admitted that in exchange for those kickbacks, the Medicare beneficiaries would visit the clinic and sign documents indicating that they had received the services billed to Medicare.  According to court documents, kickbacks paid to Medicare beneficiaries at the clinic were made in the form of cash and prescriptions for narcotic drugs.  Mazorra also admitted that she and other co-conspirators created false patient files and other false documents to conceal the fraud at Xpress Center, and to make it appear that Xpress Center was a legitimate medical clinic.  

Mazorra admitted that between approximately September 2006 and March 2007, she and her co-conspirators at Xpress Center caused the submission of approximately $2.3 million in false and fraudulent claims to the Medicare program for services purportedly provided at Xpress Center.  Medicare paid approximately $1.8 million on those claims.

Mazorra was originally charged in the Eastern District of Michigan, but after her arrest in Miami, she consented to have her case transferred to the Southern District of Florida for her plea and sentence.  At her sentencing, which is scheduled for March 26, 2010, Mazorra faces a maximum penalty of 10 years in prison and a $250,000 fine.

The case was investigated by the Detroit offices of the FBI and HHS Office of Inspector General (HHS-OIG).  The case is being prosecuted by Trial Attorneys John K. Neal and 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 case was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Michigan.    

Since the inception of Strike Force operations in March 2007 - Miami (Phase One), Los Angeles (Phase Two), Detroit (Phase Three), Houston (Phase Four), Brooklyn (Phase Five), Tampa (Phase Six) and Baton Rouge (Phase Seven) - the Strike Force has obtained indictments of more than 460 individuals and organizations that collectively have billed the Medicare program for more than $1 billion.  In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.   

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

U.S. Army Major Charles E. Sublett, 46, of Huntsville, Ala., was arrested today on charges of bulk cash smuggling and making false statements to a federal agency.

Major Sublett was charged in an indictment, returned by a federal grand jury in Memphis, Tenn., on Jan. 5, 2010, and unsealed today following his arrest in Huntsville. According to the indictment, Major Sublett smuggled more than $100,000 in currency, concealed in a shipping package, into the United States from Iraq in January 2005. Major Sublett also allegedly failed to declare that he imported the money.

As alleged in the indictment, from August 2004 through February 2005, Major Sublett was deployed to Balad Regional Contracting Center on Logistical Support Area (LSA) Anaconda in Iraq. LSA Anaconda is a U.S. military installation that was established in approximately 2003 to support U.S. military operations in Iraq. According to the indictment, Major Sublett served as a contracting officer while deployed to LSA Anaconda. As a contracting officer, Major Sublett was responsible for, among other things, evaluating and supervising contracts with companies that provide goods and services to the U.S. Army.

According to the indictment, on approximately Jan. 11, 2005, Major Sublett sent a package from Balad, Iraq, to Killeen, Texas, which was seized by Customs and Border Protection officers in Memphis. The international air waybill for the package said it contained books, papers, a jewelry box and clothes with a total declared customs value of $140 but did not disclose the currency allegedly also contained in the package. According to the indictment, the package also contained $107,900 in U.S. currency and 17,120,000 in Iraqi dinar. Major Sublett allegedly failed to file a Currency or Monetary Instruments Transaction Report (CMIR) as required by federal law when transporting currency in amounts of more than $10,000 into or out of the United States.

The maximum penalty for each of the two charges contained in the indictment – bulk cash smuggling and false statements to a government agency – is five years in prison, and a $250,000 fine, to be followed by a term of up to three years of supervised release.

The indictment also contains a criminal forfeiture allegation. Specifically, if convicted of the bulk cash smuggling charge, Sublett would be ordered to forfeit the $107,900 and 17,120,000 Iraqi dinar he is alleged to have concealed in the package.

 

An indictment is merely an accusation, and the defendant is presumed innocent until and unless proven guilty at trial beyond a reasonable doubt.

 

 

This case is being prosecuted by Trial Attorneys Daniel A. Petalas and Justin V. Shur of the Criminal Division’s Public Integrity Section. This case is being investigated by Army Criminal Investigation Command; Defense Criminal Investigative Service; the FBI; Internal Revenue Service - Criminal Investigation; the Special Inspector General for Iraq Reconstruction; and U.S. Immigration and Customs Enforcement.

 

 

Indictment

WASHINGTON – The Justice Department today filed a brief as a friend of the court in Sacred Heart Rehabilitation Center Inc. v. Richmond Township and Richmond Township Planning Commission, a civil rights case regarding the expansion of an addictive disorders treatment facility in Macomb County, Mich. The government’s brief supports a lawsuit filed by Sacred Heart Rehabilitation Center, which runs a nondenominational charitable services organization to serve indigent individuals with a range of addictive disorders, including alcoholism. The matter is being handled jointly by the Civil Rights Division and the U.S. Attorney’s Office for the Eastern District of Michigan.

In 2007, Sacred Heart applied for a building permit to renovate and expand its existing facility, and to erect a new building. The expansion would allow Sacred Heart to centralize its admission process and to house the Clearview Specialty Women and Children Program, which provides specialized rehabilitative residential care for women who need to bring their children with them into treatment, and pregnant women who have addiction problems and require specialized treatment. Richmond Township, Mich., denied Sacred Heart’s requested zoning permit on Sept. 19, 2007.

Sacred Heart and the United States argue that this denial is the result of unlawful discrimination against persons with disabilities. The township is seeking to have the case dismissed – arguing that the center has no right to seek protection of its civil rights in the federal courts. The United States’ brief argues that because the Americans with Disabilities Act (ADA), the Rehabilitation Act and the Fair Housing Amendments Act are all federal civil rights statutes, plaintiffs in such cases have a clear right to redress in the federal courts.

"The Americans with Disabilities Act ensures that zoning laws cannot be used to discriminate against individuals with disabilities," said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. "The Sacred Heart Rehabilitation Center should have access to the federal courts to make its case that Richmond Township’s actions inappropriately reinforces false stereotypes, myths and fears about persons with addiction disorders."

"Municipalities certainly have the right to enforce their zoning laws, but not in a way that illegally discriminates against people with disabilities," said Barbara McQuade, U.S. Attorney for the Eastern District of Michigan. "We will not hesitate to insure that the civil rights of persons with disabilities are protected, and we have weighed in on this case to assist the Court in interpreting key anti-discrimination statutes."

The full and fair enforcement of the ADA and its mandate to integrate individuals with disabilities is a major priority of the Civil Rights Division and the U.S. Attorney’s Office in the Eastern District of Michigan. The ADA protects individuals with disabilities from discrimination by public entities. People interested in finding out more about the ADA can call the Justice Department’s toll-free ADA Information Line at 1-800-514-0301 or 1-800-514-0383 (TTY), or access its ADA Web site at http://www.ada.gov.

A Florida man has been sentenced to 90 months in prison for making e-mail and telephone threats, including threats intended to cause a candidate for statewide office in Florida to drop out of an election, as well as hacking into e-mail accounts of individuals and companies, and using stolen identity information to commit computer crimes, announced Assistant Attorney General of the Criminal Division Lanny A. Breuer and U.S. Attorney for the Southern District of Ohio Carter M. Stewart.

 

 

Kyle J. Tschiegg, 39, of Sarasota, Fla., was sentenced on Jan. 7, 2010, in U.S. District Court in Columbus, Ohio, by Senior U.S. District Judge James L. Graham. Tschiegg was also sentenced to three years of supervised release following his prison term, and was ordered to pay restitution to victims who incurred financial losses responding to Tschiegg’s threats and computer intrusions. Tschiegg pleaded guilty on Sept. 4, 2009, to one count each of interstate transmission of threatening communications, interstate extortion, computer fraud and identity theft.

 

 

According to court documents, Tschiegg sent threats via e-mail and cell phone to a group of approximately 40 individuals and businesses in Ohio, Florida and elsewhere, from October 2007 until his arrest in February 2009. At one point, approximately 3,500 e-mail accounts were being copied on the threatening e-mails. Tschiegg admitted he used several methods to conceal his identity, including using his laptop computer to access the Internet through the unsecured wireless networks of his neighbors in Sarasota.

 

 

Also according to court documents, Tschiegg hacked into a Florida state legislator’s e-mail account in October 2008. According to court records, Tschiegg used personal information he found about the legislator on the Internet to reset the legislator’s password. Less than two weeks before the Nov. 4, 2008, election, Tschiegg admitted he sent two e-mails threatening to injure the legislator, the legislator’s family and supporters, unless the legislator withdrew from the race.

 

The charges arose after a six-month investigation, led by the FBI and with assistance from the Sarasota County, Fla., Sheriff’s Office. The case was prosecuted by Assistant U.S. Attorney Deborah A. Solove for the Southern District of Ohio and Trial Attorney Joseph E. Springsteen of the Criminal Division’s Computer Crime and Intellectual Property Section, with assistance from Assistant U.S. Attorney Laurel Moore of the U.S. Attorney’s Office for the Middle District of Florida.

Attorney General Eric Holder today announced sweeping reforms intended to improve public safety on tribal land. The new directive is part of a larger Justice Department initiative to create better communication and coordination to fight crime and promote justice in Indian Country.

 

"The public safety challenges we face in Indian Country will not be solved by a single grant or a single piece of legislation," Holder said. "There is no quick fix. While today’s directive is significant progress, we need to continue our efforts with federal, state and tribal partners to identify solutions to the challenges we face, and work to implement them."

 

The Attorney General directed all U.S. Attorneys’ Offices with districts containing Indian Country (44 out of 93) to: meet and consult with tribes in their district annually; develop an operational plan addressing public safety in Indian Country; work closely with law enforcement to pay particular attention to violence against women in Indian Country and make these crimes a priority; and to provide summaries of their operational plans to the Office of the Deputy Attorney General and make those summaries available to the tribes in their districts .

 

The Attorney General also announced that the Justice Department’s FY 2010 appropriation includes an additional $6 million for Indian Country prosecution efforts. At least 35 additional Assistant U.S. Attorneys and 12 additional FBI victim specialists will be added in offices with an Indian Country caseload. These new resources will enable the Justice Department to bring the federal justice system closer to Indian Country, including through a Community Prosecution Pilot Project that the Executive Office of U.S. Attorneys is currently developing.

 

Today’s announcement came out of the recommendations that have been gathered by Department leadership as part of a larger department-wide initiative on public safety in tribal communities. As part of this effort, Deputy Attorney General David W. Ogden and Associate Attorney General Tom Perrelli conducted a series of meetings addressing violent crime in Indian Country. On Oct. 28-29, 2009, Attorney General Holder convened a national tribal leaders listening session in St. Paul, Minn. Also in October, the Justice Department held its annual tribal consultation on violence against women, as required by the Violence Against Women Act of 2005. The department again had the opportunity to engage with tribal leaders on public safety in tribal communities during the White House Tribal Nations Conference in November 2009. In addition to these sessions with tribal leaders, department leadership has conducted meetings with Indian Country experts on law enforcement and public safety efforts.

 

The districts include: District of Alaska; Southern District of Alabama; District of Arizona; Central District of California; Eastern District of California; Northern District of California; Southern District of California; District of Colorado; District of Connecticut; Southern District of Florida; District of Idaho; Northern District of Iowa; District of Kansas; Western District of Louisiana; District of Maine; District of Massachusetts; Eastern District of Michigan; Western District of Michigan; District of Minnesota; Southern District of Mississippi; District of Montana; District of Nebraska; District of Nevada; District of New Mexico; Eastern District of New York (anticipating federal recognition of the Shinnecock Nation); Northern District of New York; Western District of New York; Western District of North Carolina; District of North Dakota; Eastern District of Oklahoma; Northern District of Oklahoma; Western District of Oklahoma; District of Oregon; District of Rhode Island; District of South Carolina; District of South Dakota; Eastern District of Texas; Western District of Texas; District of Utah; Eastern District of Washington; Western District of Washington; Eastern District of Wisconsin; Western District of Wisconsin; and the District of Wyoming.

 

A copy of the guidelines, in a memo from Deputy Attorney General David W. Ogden to the relevant U.S. Attorneys, can be found here : http://www.justice.gov/dag/dag-memo-indian-country.html .

WASHINGTON – As part of the Justice Department’s year-long commemoration of the 15th anniversary of the Violence Against Women Act (VAWA), Associate Attorney General Tom Perrelli today hosted an event with survivors, advocates, law enforcement and judicial officials, and victim service providers to explore stalking behavior, the use of technology in stalking and the intersection between stalking and other crimes such as domestic violence, sexual assault, dating violence and homicide. A panel and town hall discussion was moderated by Paula Zahn, producer and host of Investigation Discovery’s On the Case With Paula Zahn , in honor of National Stalking Awareness Month, held each January. The Department is marking this year with our renewed dedication and a recommitment to ending violence against women," said Associate Attorney General Perrelli.  "We must recognize the changing nature of these crimes and develop new strategies for addressing them.  This is particularly important with stalking, in which the use of technology by stalkers has become a common practice.  We in law enforcement, and our partners in the judiciary, need to adapt in order to stop those who stalk and provide help to victims of stalking." Safety Net: The National Safe and Strategic Technology Project at the National Network to End Domestic Violence ; Linda Major, Executive Director of Domestic Violence Affairs for the Marion County, Indiana prosecutor’s office; and Mark Wynn, former Nashville police officer and national trainer on stalking protocol and procedures.

"This year cannot just be an anniversary – it must be a call to action. 

"I am honored to help the Department of Justice bring awareness to the 15th anniversary of the Violence Against Women Act and, specifically stalking awareness," said Paula Zahn.  "I have covered the issue of violence against women extensively over my more than 30 years in journalism and I know that it’s critically important that we commemorate how far we’ve come and explore how we can work together to do even more.  I am proud to be a voice for this initiative."

Today’s event was presented by the Department’s Office on Violence Against Women (OVW) with the assistance of the National Stalking Resource Center, an OVW grantee. In addition to remarks by Associate Attorney General Perrelli and OVW Acting Director Catherine Pierce, the audience also heard from former Washington Post reporter George Lardner Jr. about the 1992 stalking and murder of his youngest daughter, Kristin, an experience he subsequently wrote about in a Pulitzer Prize-winning series.

Expert panelists included Michelle Garcia, Director of the National Stalking Resource Center; Cindy Southworth, Director of Safety Net: The National Safe and Strategic Technology Project at the National Network to End Domestic Violence ; Linda Major, Executive Director of Domestic Violence Affairs for the Marion County, Indiana prosecutor’s office; and Mark Wynn, former Nashville police officer and national trainer on stalking protocol and procedures.

Each year, approximately 3.4 million Americans are victims of stalking, a crime that is pervasive, dangerous and – far too often – lethal. Nearly three in four stalking victims know their offender in some capacity, and 30 percent of victims are stalked by a current or former intimate partner. While both men and women can be victims of stalking, women are nearly three times more likely to be stalked.

In the past decade, the use of technology by stalkers has become commonplace. According to National Stalking Resource Center, among the most common stalking behaviors that victims experience are unwanted phone calls and messages (66 percent) and unwanted e-mails and letters (31 percent). More than one in four victims report that stalkers have used technology, such as e-mail or instant messaging, to follow and harass them, and one in 13 says stalkers use electronic devices to intrude on their lives.

Today’s event is another installment in the Justice Department’s mission to raise public awareness on issues around violence against women, to build and renew coalitions among federal, state, local and tribal law enforcement and victim services communities, and to end stalking, sexual assault, domestic and dating violence for men, women and children across the country. As part of this public awareness initiative, the Department has encouraged the more than 100 celebrity allies, including Paula Zahn, who have lent their names in support of the Department’s "Join the List" initiative to raise awareness with their fans, through Web and fan sites, and social networking profiles.

The Department’s Bureau of Justice Statistics 2009 report, Stalking Victimization in the United States, is available for download at: http://bjs.ojp.usdoj.gov/content/pub/pdf/svus.pdf.

 

WASHINGTON – The Justice Department’s Civil Rights Division and the U.S. Attorney’s Office for the Eastern District of New York today announced that they have entered into an agreement with New York City to correct conditions of confinement at the Kings County Hospital Center’s (KCHC) psychiatric emergency room and psychiatric in-patient units located in Brooklyn, N.Y. The agreement, in the form of a consent judgment, was approved today by U.S. District Judge Kiyo A. Matsumoto.

Under the terms of the consent judgment, New York City will work to ensure that patients at KCHC are safe and receive the care and services necessary to meet their individual needs. The agreement underscores the city’s obligation to actively pursue discharge of patients to the most integrated setting appropriate based on their needs and follow-up services, consistent with the requirements of the Americans with Disabilities Act and the Supreme Court’s ruling in Olmstead v. L.C.. In addition, the city has agreed to undertake a variety of measures, including improving medical and mental health care, and ensuring that patients are free from undue restraint.

A joint investigation of the psychiatric units at KCHC began in December 2007, under provisions of the Civil Rights of Institutionalized Persons Act (CRIPA). The investigation uncovered systemic deficiencies that violated the constitutional and civil rights of patients with psychiatric disabilities. These violations included failure to protect patients from harm, failure to treat the psychiatric disabilities of patients, the use of drugs to sedate rather than treat patients, failure to provide adequate and individualized discharge planning and follow-up services, falsification of patient medical records, and failure to respond promptly to medical emergencies.

These violations and others contributed to the death of at least one patient in June 2008, Esmin Green, who collapsed in the psychiatric emergency room after waiting 23 hours to be seen by a doctor. Green lay on the floor for over an hour while hospital employees, including doctors and security staff, walked in and out of the area, ignoring her condition and making no effort to attend to her. Subsequently, the Justice Department entered into negotiations regarding remedies the city was required to implement to correct unconstitutional conditions at KCHC’s psychiatric service.

"Jurisdictions have a responsibility to protect the constitutional rights of individuals in their care and to protect those individuals from harm. We have worked cooperatively with New York City to craft an agreement that will benefit the lives of persons with disabilities at Kings County Hospital Center," said Thomas E. Perez, Assistant Attorney General in charge of the Civil Rights Division. "We commend Mayor Michael Bloomberg, the Hospital Center, and the New York City Health and Hospitals Corporation for their willingness to work aggressively to remedy these problems."

U.S. Attorney Benton J. Campbell of the Eastern District of New York stated, "This consent judgment is designed to improve the quality of psychiatric care provided to some of our district’s neediest and most vulnerable residents. We thank the city for its cooperation in achieving this important goal."

The agreement provides for regular site visits by a team of experts to assess compliance with the agreement, and that this review and assessment occur regularly over a period of at least five years, until KCHC substantially complies with the consent judgment’s requirements. Settlement documents were filed today in federal court and will be available on the Justice Department Web site http://www.justice.gov.

CRIPA authorizes the U.S. Attorney General to investigate conditions of confinement in certain institutions owned or operated by, or on behalf of, state and local governments. In addition to psychiatric hospitals, these institutions include nursing homes, residential facilities serving persons with developmental disabilities, jails, prisons, and juvenile correctional facilities. CRIPA’s focus is on systemic deficiencies rather than individual, isolated problems. Please visit http://www.justice.gov/crt to learn more about CRIPA and other laws enforced by the Justice Department’s Civil Rights Division.

The investigation was conducted by David Deutsch, Cathleen Trainor, and Laura Welp, Trial Attorneys in the Special Litigation Section of the Civil Rights Division, and Assistant U.S. Attorney Michael J. Goldberger of the Eastern District of New York.

WASHINGTON—Michael Sayklay, the former vice president of Economy Cash & Carry Inc., a Texas-based grocery wholesaler, pleaded guilty today in federal court in El Paso, Texas, to a criminal violation of the Plant Protection Act, the Justice Department and the Department of Agriculture announced.

Sayklay pleaded guilty to one felony charge for falsifying stamps that certified that wood pallets were heat-treated to prevent infestation, and were suitable for use in international transportation. Sayklay had the false stamp affixed to Economy Cash & Carry Inc., wood pallets which were used to carry products back and forth across the US-Mexican border. The offense took place in March 2006. Sayklay no longer works for the company.

As part of the plea agreement, Sayklay has agreed to pay a fine of $8,000 dollars and serve a term of probation.

The Department of Agriculture requires the heat treatment of wood pallets imported into the United States. The requirement is designed to prevent plant pests that can destroy domestic agriculture and livestock from entering the United States in wood packaging materials. The Department of Agriculture began implementation of the heat treatment requirement of wood packing material in September 2005. Wood pallets that carry products transported within the United States are not required to be heat treated.

Economy Cash & Carry Inc. utilizes wood pallets to transport food products and pharmaceuticals it sells in both the United States and Mexico. Sayklay was the warehouse manager for the El Paso-based company, and was expected to direct the transfer of products destined for Mexico from untreated pallets to treated pallets.

Instead, Sayklay created a copy of a stamp certification utilized by a legitimate wood pallet treating company. Sayklay had hundreds of untreated domestic pallets falsely stamped as if they were treated, saving the time to transfer products between pallets as well as the cost of treatment.

The falsified stamp Sayklay used was smaller than the legitimate stamp. When companies that received the fraudulently stamped pallets from Mexico, sent them to the legitimate stamp owner for repair, the legitimate stamp owner noticed the falsification and notified the government. A follow up investigation by the Department of Agriculture resulted in the seizure of fraudulently stamped pallets at the U.S-Mexican border.

The investigation was conducted by the U.S. Department of Agriculture. It was prosecuted by the Justice Department’s Environmental Crimes Section and the U.S. Attorney’s Office for the Western District of Texas.

WASHINGTON—A federal grand jury in Las Vegas today returned indictments against 10 Nevada-certified emissions testers for falsifying vehicle emissions test reports, the Justice Department announced.

Each defendant faces one felony Clean Air Act count for falsifying reports between November 2007 and May 2009. The number of falsifications varied by defendant, with some defendants having falsified approximately 250 records, while others falsified more than double that figure. One defendant is alleged to have falsified over 700 reports.

The individuals indicted include: 

• Eduardo Franco, 30                             
• Alexander Wayne Worster, 27
• William Joseph McCown, 48                  
• Joseph DeMatteo, 52                              
• David Eugene Nelson, 46                   
• Louis Engene Demeo, 50                         
• Adolpho Silva-Contreras, 47           
• Peter Escudero, 47                                 
• Wadji Waked, 24
• Gary Smith, 47

Escudero resides in Pahrump, Nev. All other individuals are from Clark County, Nev.

The 10 defendants are alleged to have engaged in a practice known as "clean scanning" vehicles. The scheme involved entering the Vehicle Identification Number (VIN) for a vehicle that would not pass the emissions test into the computerized system, then connecting a different vehicle the testers knew would pass the test. These falsifications were allegedly performed for anywhere from $10 to $100 over and above the usual emissions testing fee.

The U.S. Environmental Protection Agency (EPA), under the Clean Air Act, requires the state of Nevada to conduct vehicle emissions testing in certain areas because the areas exceed national standards for carbon monoxide and ozone. Las Vegas is currently required to perform emissions testing.

To obtain a registration renewal, vehicle owners bring the vehicles to a licensed inspection station for testing. The emissions inspector logs into a computer to activate the system by using a unique password issued to the emissions inspector. The emissions inspector manually inputs the vehicle’s VIN to identify the tested vehicle, then connects the vehicle for model year 1996 and later to an onboard diagnostics port connected to an analyzer. The analyzer downloads data from the vehicle’s computer, analyzes the data and provides a "pass" or "fail" result. The pass or fail result and vehicle identification data are reported on the Vehicle Inspection Report. It is a crime to knowingly alter or conceal any record or other document required to be maintained by the Clean Air Act. 

"Falsifications of vehicle emissions testing, such as those alleged in the indictments unsealed today, are serious matters and we intend to use all of our enforcement tools to stop this harmful practice. These actions undermine a system that is designed to reduce air pollutants including smog and provide better air quality for the citizens of Nevada," said Ignacia S. Moreno, Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division.

"The residents of Nevada deserve to know that the vast majority of licensed vehicle emission inspectors are not corrupt and are not circumventing emission testing procedures," said U.S. Attorney Bogden. "These indictments should serve as a clear warning to offenders that the Department of Justice will prosecute you if you make fraudulent statements and reports concerning compliance with the federal Clean Air Act."

"Lying about car emissions means dirtier air, which is especially of concern in areas like Las Vegas that are already experiencing air quality problems," said Cynthia Giles, Assistant Administrator for Enforcement and Compliance Assurance at EPA. "We will take aggressive action to ensure communities have clean air."

The maximum penalty for the felony violations contained in the indictments includes up to two years in prison and a fine of up to $250,000.

An indictment is merely an accusation, and a defendant is presumed innocent unless and until proven guilty in a court of law.

The case was investigated by the EPA, Criminal Investigation Division; and the Nevada Department of Motor Vehicles Compliance Enforcement Division. The case is being prosecuted by the U.S. Attorney’s Office for the District of Nevada and the Justice Department’s Environmental Crimes Section.

Justin Cannon, 27, of Corpus Christi, Texas, and Christopher Drotleff, 29, of Virginia Beach, Va., have been charged with crimes including second-degree murder, attempted murder and firearms offenses while working as contractors for the U.S. Department of Defense in Afghanistan. Cannon and Drotleff were charged under the Military Extraterritorial Jurisdiction Act (MEJA).

The 13-count indictment, returned by a federal grand jury in the Eastern District of Virginia on Jan. 6, 2010, and unsealed today, alleges that on May 5, 2009, in Kabul, Afghanistan, Cannon and Drotleff shot and killed two Afghanistan nationals and wounded a third. The indictment alleges that at the time of the shootings, Cannon and Drotleff were Department of Defense contractors employed by Paravant LLC, which is a subsidiary of Xe (formerly known as Blackwater Worldwide). According to the indictment, as contractors, Cannon and Drotleff provided training to the Afghan National Army for the Islamic Republic of Afghanistan in the use and maintenance of weapons and weapons systems.

Cannon was arrested today in Corpus Christi by FBI agents. Drotleff was also arrested today by FBI agents in Virginia Beach.Cannon and Drotleff were each charged with two counts of second-degree murder, one count of attempted murder, six counts of using and discharging a firearm during a violent crime, and four counts of murder resulting from the use of a firearm during a violent crime. If convicted, the maximum penalty faced by Cannon and Drotleff is life in prison or the death penalty.

The case is being prosecuted by Assistant U.S. Attorneys Randy C. Stoker and Alan M. Salsbury from the U.S. Attorney’s Office for the Eastern District of Virginia - Norfolk Division as well as Trial Attorney Robert McGovern of the Criminal Division’s Domestic Security Section. The case is being investigated by the FBI.

An indictment is a formal accusation of criminal conduct, not evidence of guilt. A defendant is presumed innocent unless and until convicted through due process of law.

Indictment

WASHINGTON - The United States this week filed five civil injunction lawsuits in Detroit, Cincinnati and Chicago against several individuals and their tax preparation services, the Justice Department announced today. In December 2009, the government also filed a civil injunction suit against 12 individuals and entities in Providence, R.I. These lawsuits seek to enjoin individuals and entities from:

• Preparing federal income tax returns and amended returns, and other related documents and forms for others;
• Filing federal income tax returns for others;
• Representing customers before the Internal Revenue Service (IRS);
• Advising, assisting, counseling or instructing anyone about the preparation of a federal tax return; or
• Promoting tax-fraud schemes or other plans or arrangements that advise or encourage taxpayers to attempt to evade the assessment or collection of federal income taxes.

These defendants engage in a variety of schemes, all of which involve false deduction and credit claims, to fraudulently reduce their customers’ federal income tax liabilities. For example, court filings in Rhode Island against Michael Brier, operating through Refunds Now Inc. and Refunds Now Tax Service Inc., allege that he prepared, or directed the preparation of over 24,000 customer tax returns containing fabricated charitable contributions and employee business expense deductions, inflated dependent exemptions, fraudulent earned income tax credit claims and false income and expense reporting relating to rental real estate. Court papers filed in Chicago against Sidney Dove, of Sid’s Tax, allege that Dove tells customers that they are entitled to a charitable contribution deduction equal to 10 percent of their wages, regardless of whether they can substantiate their claim. Court papers filed in Chicago against Natalie Bradford and Kristine Burkland-Valdez, of K & N Tax Pros Inc., allege that defendants prepared and directed preparation of over 23,800 customer tax returns containing fabricated or falsified deductions such as employee business expenses, mileage, cash contributions, rental losses and medical expenses. All of these defendants’ actions cause substantial revenue loss to the United States Treasury, much of which may be unrecoverable. In addition, their actions harm their customers because the customers pay the defendants to prepare their tax returns, and, after the fraud is detected, customers are responsible for paying all taxes, interest and penalties.

"The too-good-to-be-true results some return preparers tout are just that," said John A. DiCicco, Acting Assistant Attorney General for the Justice Department’s Tax Division. "The IRS and Justice Department are working together closely to ensure that unscrupulous return preparers are shut down and their customers pay their correct federal tax liabilities. Taxpayers using these types of preparers, at best, are stuck with paying additional taxes and interest, and at worst, depending on culpability, may be subject to penalties and possibly even criminal prosecution."

"Filing a tax return is one of the biggest financial transactions an average American taxpayer makes each year," said IRS Commissioner Doug Shulman. "This week, the IRS announced a set of comprehensive recommendations to ensure people receive ethical, competent and professional advice when they use a tax return preparer. We want to make sure taxpayers don't pay good money for bad advice. That's why we're taking extra steps this tax season, and planning more actions in future years, to help make sure people can count on their tax return preparer."

Listed below are details of the six lawsuits, filed in the United States District Courts in the cities indicated:

Case

Summary of Scheme

Returns Prepared and Harm to the Government

United States v. Michael Brier, Jeffrey Sroufe, Esther Santiago, Maria Caroline Halog, Criselyn Rivera, Nitza Benitez, Carmen Miranda, Refunds Now, Inc., RNTS (a/k/a Refunds Now Tax Service, Inc.), FTIRS, Inc., POTIRS, Inc. and IHIRS, Inc.

District of Rhode Island

Improper filing status claims;

Inflated dependent exemptions;

Fraudulent earned income tax credit claims;

False or inflated charitable contributions and business expense deductions;

False or fraudulent income and expense reporting related to rental real estate

Over 24,000 returns prepared for tax years 2003 through 2007. Tax loss to date from 313 examined returns exceeds $1.1 million.

United States v. Harold K. Solomon

, individually and d/b/a Solomon Service

Eastern District of Michigan

Inflated earned income tax credit claims;

False business expense claims;

False or fabricated itemized deductions

Over 1,900 returns prepared for tax years 2005 through 2007.

United States v. Erin Pryor, individually and d/b/a EP Express Tax Service

Southern District of Ohio

Fraudulent disabled access and earned income tax credit claims;

False telephone excise tax refund claims

Over 230 tax returns prepared during 2007 and 2008.

United States v. Matoi Rimes, individually, and d/b/a Rimes Accounting Service

Northern District of Illinois

Inflated or fabricated itemized deductions;

Inflated or fabricated rental property and business expense deductions;

False tuition and rental expense deductions;

Misuse of Refund Anticipation Loan Program

Over 3,100 tax returns prepared since 2006. Tax loss from 48 examined returns is $230,677.

United States v. Sidney Dove, individually and d/b/a Sid’s Tax

Northern District of Illinois

Inflated or fabricated charitable contribution deductions;

Inflated or fabricated business expense deductions;

False deductions for tuition and rental expenses

Over 1,200 tax returns prepared since January 1, 2006. Tax loss from 79 examined returns is $460,910.

United States v. Natalie Bradford, individually and d/b/a K & N Tax Pros, Inc., and Kristine Burkland-Valdez (a/k/a Kristine Valdez), individually and d/b/a K & N Tax Pros, Inc. and Tax Pros, Inc.

Northern District of Illinois

Fabricated or falsified employee business expense, mileage, cash contributions, rental losses and medical expense deductions

Over 23,800 tax returns prepared from 2005 through 2009. Tax loss for 100 examined returns is $830,147

Taxpayers and tax professionals who submit fraudulent tax returns to the IRS face substantial civil monetary penalties, as well as possible criminal prosecution. 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, at http://www.justice.gov/tax/taxpress2010.htm

WASHINGTON – The Justice Department today filed a lawsuit against the state of New Jersey and the New Jersey Civil Service Commission alleging a pattern or practice of employment discrimination against African-Americans and Hispanics, in violation of Title VII of the Civil Rights Act of 1964. The complaint challenges New Jersey’s use of a written examination for promotion to the rank of police sergeant in localities throughout the state.

The United States’ complaint alleges that African-American and Hispanic candidates for promotion to sergeant pass the examination at significantly lower rates than white candidates. The complaint also alleges that even those African-American and Hispanic candidates who pass the examination suffer discrimination because their passing examination scores are significantly lower than those of white candidates, and New Jersey certifies candidates for promotion to police sergeant in descending rank-order based primarily upon each candidate’s written examination score. The complaint concludes that New Jersey’s use of the examination violates Title VII because the state has not demonstrated that its pass/fail use of the police sergeant written examination or its certification of candidates in descending rank-order to local jurisdictions is job related and consistent with business necessity.

Title VII prohibits discrimination in employment on the basis of race, color, sex, national origin or religion. Title VII prohibits not only intentional discrimination, but also the use of employment practices – like the state’s written examination for police sergeant in this case – that result in a disparate impact upon a protected group, unless the defendant can prove that such practices are job related and consistent with business necessity.

According to the complaint, New Jersey administers the challenged written examination as part of its police sergeant promotional process for local jurisdictions that participate in its civil service system. Police officers in participating local jurisdictions cannot be considered for promotion to police sergeant unless they take and pass the written examination. Currently, 18 of New Jersey’s 20 largest cities and townships (all but Cherry Hill and Edison Township), and 20 of New Jersey’s 21 counties (all but Somerset County), participate in the state’s civil service system. According to information the Justice Department received from New Jersey, at least 120 local police jurisdictions participated in the state’s police sergeant examination promotion process during the time frame of the Justice Department’s pre-suit investigation.

"This complaint should send a clear message to all public employers that employment practices with unlawful discriminatory impact on account of race or national origin will not be tolerated," said Thomas Perez, Assistant Attorney General for the Civil Rights Division. "The Justice Department will take all necessary action to ensure that such discriminatory practices are eliminated and that the victims of such practices are made whole."

The Justice Department is seeking a court order enjoining New Jersey from continuing to discriminate against African-Americans and Hispanics in violation of Title VII and, specifically, from continuing to use the challenged examination in a manner that does not meet the requirements of Title VII. The Justice Department also is asking the court to order New Jersey to provide make-whole relief (including, where appropriate, offers of promotion, backpay and retroactive seniority) to individual African-Americans and Hispanics who have been or will be harmed as a result of the state’s use of the examination.

Additional information about Title VII and other federal employment laws is available on the Civil Rights Division’s Web site at http://www.justice.gov/crt/.

A former Army and Air Force Exchange Service (AAFES) official was sentenced today in U.S. District Court in Columbus, Ga., to three years in prison for his role in a bribery conspiracy involving a multi-million dollar telecommunications contract, and for not reporting the bribes he accepted on his income tax returns.

In addition to the prison term, U.S. District Judge Clay D. Land also ordered Henry Lee Holloway to pay a $5,000 fine and to forfeit $70,000 as the proceeds of Holloway’s involvement in the conspiracy. Holloway pleaded guilty on April 21, 2009, to a two-count information, charging him with one count of conspiracy and one count of making a false statement on a federal income tax return.

According to court documents, Holloway, 42, of Hamilton, Ga., worked as an AAFES general store manager at the Central Exchange in the Republic of Korea from 2003 through 2007. The Department of Defense provides billions of dollars worth of merchandise and services annually through AAFES to military personnel by operating base and post exchanges worldwide.

From May 2003 to April 2005, Holloway admitted to conspiring with, among others, Gi-Hwan Jeong, the chief executive officer of Samsung Rental Company Ltd (SSRT), to use Holloway’s official position to maintain SSRT’s $206 million contract with AAFES to provide telecommunications services to U.S. Armed Forces installations in the Republic of Korea. Holloway admitted that in exchange for at least $70,000 worth of stock, entertainment, travel expenses, cash and other things of value from Jeong, he took official action to protect SSRT and further its interests, despite Holloway’s knowledge and belief that SSRT was underperforming and violating the terms of its contract with AAFES. According to court documents, prior to Jeong’s payments to Holloway, and as a result of SSRT’s failures to perform under the contractual relationship with AAFES, Holloway sought termination of the contract between AAFES and SSRT. Holloway admitted that after the payments from Jeong to Holloway began, and as a result of those payments, he used official acts and influence to support and expand that contractual relationship.

On June 11, 2009, Jeong pleaded guilty in the U.S. District Court in Dallas to a five-count superseding indictment, charging him with two counts of bribery, two counts of honest services wire fraud and one count of conspiracy. On Nov. 10, 2009, U.S. District Court Judge Ed Kinkeade sentenced Jeong to five years in prison and a $50,000 fine.

This case is being prosecuted by Senior Trial Attorney Richard C. Pilger and Trial Attorney Eric G. Olshan of the Criminal Division’s Public Integrity Section. The case was investigated by the Air Force Office of Special Investigations, the FBI’s Dallas Field Office and the Internal Revenue Service Criminal Investigation.

The findings reported in the Bureau of Justice Statistics’ (BJS) report, Sexual Victimization in Juvenile Facilities Reported by Youth, 2008-2009 , bring into focus the dire circumstances that too many youth in juvenile correctional facilities have to endure. While the report focuses on specific types of juvenile facilities—larger facilities that typically hold adjudicated youth for longer periods—the Department of Justice is committed to addressing confinement issues for all youth in all facilities.

• The Department’s Office of Justice Programs’ (OJP) Review Panel on Prison Rape (Panel) will review and conduct hearings on the BJS report. The Panel, as required by the Prison Rape Elimination Act, is responsible for conducting annual hearings to collect evidence to assist the Bureau of Justice Statistics in identifying common characteristics, not only of victims and perpetrators of prison rape, but also of prisons and prison systems with a high incidence of prison rape and those that have been successful in deterring prison rape.
• OJP’s Office of Juvenile Justice and Delinquency Prevention (OJJDP) has long been concerned with the conditions and challenges that confront youth in the juvenile justice system, particularly those in custody.
• OJJDP plans to issue a solicitation in Fiscal Year (FY) 2010 for a National Training and Technical Assistance Center for Youth in Custody. The Center will serve as a resource for juvenile detention and correctional facilities and among other activities will promulgate data-driven approaches for facilities to identify, monitor, and improve conditions and treatment services provided to youth in custody, using evidence-based standards and outcome measures.
• OJJDP will increase outreach and information about available training and technical assistance on best practices for juveniles in custody, to all grant recipients who use funding to support a juvenile facility (public or private).
• OJJDP will convene a listening session of juvenile detention and correctional leaders and experts to garner their input on the BJS study findings and discuss potential strategies for improving conditions of juvenile facilities.
• In late 2009, OJJDP provided funds to the National Institute of Corrections (NIC) and will partner with NIC to assess, plan, design, develop, deliver, and evaluate training programs, technical assistance and related services to address the needs of juvenile detention and correctional professionals working with youth.
• The Department’s Civil Rights Division enforces two statutes concerning conditions in juvenile justice facilities – the Civil Rights of Institutionalized Persons Act (CRIPA) and Section 14141 of the Violent Crime Control and Law Enforcement Act of 1994. The Division’s Special Litigation Section has investigated unlawful conditions in more than 100 juvenile facilities and monitors more than 65 facilities in the United States and its territories. Sharing information on the sexual victimization of youth in juvenile justice facilities between Justice Department components will further ensure that systemic changes occur so that youth are protected from such serious harm.
• The Attorney General has also established a Prison Rape Elimination Act (PREA) Working Group to review standards proposed by the National Prison Rape Elimination Commission and draft national standards to enhance the detection, prevention, reduction and punishment of prison rape. The working group is working diligently on these standards and to address the other recommendations of the commission.

WASHINGTON – The Justice Department announced that Umar Farouk Abdulmutallab, a 23-year-old Nigerian national, was charged today in a six-count criminal indictment returned in the Eastern District of Michigan for his alleged role in the attempted Christmas day bombing of Northwest Airlines flight 253 from Amsterdam, the Netherlands, to Detroit.

Count one of the indictment charges Abdulmutallab with attempted use of a weapon of mass destruction, which carries a penalty of up to life in prison. Count two of the indictment charges him with attempted murder within the special aircraft jurisdiction of the United States, which carries a penalty of up to 20 years in prison. Count three of the indictment charges him with willful attempt to destroy or wreck an aircraft within the special aircraft jurisdiction of the United States, which carries a penalty of up to 20 years in prison.

Count four of the indictment charges Abdulmutallab with willfully placing a destructive device on an aircraft within the special aircraft jurisdiction of the United States, which was likely to endanger the safety of such aircraft. This violation carries a penalty of up to 20 years in prison. Count five of the indictment charges him with use of a firearm/destructive device during and in relation to a crime of violence, which carries a consecutive mandatory 30 years in prison. Count six of the indictment charges the defendant with possession of a firearm/destructive device in furtherance of a crime of violence, which carries a consecutive mandatory 30 years in prison

"The charges that Umar Farouk Abdulmutallab faces could imprison him for life," said Attorney General Eric Holder.  "This investigation is fast-paced, global and ongoing, and it has already yielded valuable intelligence that we will follow wherever it leads.  Anyone we find responsible for this alleged attack will be brought to justice using every tool -- military or judicial -- available to our government."

"The attempted murder of 289 innocent people merits the most serious charges available, and that’s what we have charged in this indictment," said U.S. Attorney Barbara L. McQuade, U.S. Attorney for the Eastern District of Michigan.

According to the indictment, Northwest Airlines flight 253 carried 279 passengers and 11 crewmembers. Abdulmutallab allegedly boarded Northwest Airlines flight 253 in Amsterdam on Dec. 25, 2009 carrying a concealed bomb. The bomb components included Pentaerythritol (also known as PETN, a high explosive), as well as Triacetone Triperoxide (also known as TATP, a high explosive), and other ingredients.

The bomb was concealed in the defendant’s clothing and was designed to allow him to detonate it at a time of his choosing, thereby causing an explosion aboard flight 253, according to the indictment. Shortly prior to landing at Detroit Metropolitan Airport, Abdulmutallab detonated the bomb, causing a fire on board flight 253.

According to an affidavit filed in support of a criminal complaint, Abdulmutallab was subdued and restrained by the passengers and flight crew after detonating the bomb. The airplane landed shortly thereafter, and he was taken into custody by U.S. Customs and Border Protection officers. Abdulmutallab required medical treatment, and was transported to the University of Michigan Medical Center after the plane landed.

This prosecution is being handled by the U.S. Attorney’s Office for the Eastern District of Michigan, with assistance from the Counterterrorism Section of the Justice Department’s National Security Division.

The investigation is being conducted by the Detroit Joint Terrorism Task Force, which is led by the FBI and includes U.S. Customs and Border Protection, U.S. Immigration and Customs Enforcement, the Federal Air Marshal Service, and other law enforcement agencies. Additional assistance has been provided by the Transportation Security Administration, the State Department’s Bureau of Diplomatic Security, the Wayne County Airport police, as well as international law enforcement partners.

The public is reminded that an indictment contains mere allegations and a defendant is presumed innocent unless and until proven guilty in a court of law.

Johnny Pires, 24, was sentenced today to five years in prison and five years of supervised release following his prison term for attempting to receive and possessing child pornography. Pires was also ordered to register as a sex offender.

Pires, formerly of Middleboro, Mass., was convicted on July 30, 2009, on one count of attempted receipt and one count of possessing child pornography, following a four-day trial before U.S. District Judge Rya W. Zobel. According to evidence presented during the trial, the case arose as the result of an FBI undercover operation that targeted individuals using file sharing programs to download child pornography. According to testimony at trial, Pires obtained images of children engaged in sexually explicit conduct, through a file share program called Limewire, which allows users to exchange image and video files for free. During the course of the investigation, a federal agent downloaded images fromPires and was able to access Pires’ shared folder, which stored numerous images of child pornography depicting pre-pubescent children engaged in various sexual acts. According to testimony at trial, a search warrant was executed at Pires’ residence based on this information. A forensic examiner testified that a hard drive seized from Pires’ residence revealed numerous images of child pornography, including those downloaded using Limewire software.

This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice, to combat the growing epidemic of online sexual exploitation of children. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children using the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.

The case was prosecuted by Trial Attorney LisaMarie Freitas of the Criminal Division’s Child Exploitation and Obscenity Section and Assistant U.S. Attorney Thomas Kanwit for the District of Massachusetts. The case was investigated by the FBI.

WASHINGTON – A federal court has issued a preliminary injunction barring Penny Lea Jones of Idaho Falls, Idaho, from preparing federal income tax returns for others, the Justice Department announced today. The court found that Jones promotes a tax defier scheme that claims large fraudulent tax refunds for customers. The order, entered by U.S. District Judge Edward J. Lodge, remains in effect while the lawsuit is pending.

The court found that Jones repeatedly prepared federal income tax returns claiming bogus refunds based on a tax fraud scheme known as the "redemption" scheme. The court held that Jones prepared and filed 333 income tax returns for customers in 2008 and 2009 claiming more than $93 million in fraudulent refunds. The court said that the redemption scheme is based on a frivolous theory that the federal government maintains secret accounts for its citizens, and that taxpayers can gain access to funds in those accounts by issuing IRS 1099-OID forms to their creditors.

The case against Jones is one of seven lawsuits the Justice Department filed across the nation in October 2009 that seek to shut down tax preparers who allegedly promote the redemption scheme. The defendants in those cases allegedly prepared tax returns fraudulently requesting a total of $562.4 million in refunds. Under the scheme, participants file a series of false IRS forms, including tax returns, amended returns, and Forms 1099 (including Form 1099-OID) or Forms W-2, to request fraudulent tax refunds based on phony claims of large income tax withholding.

The Internal Revenue Service (IRS) catches the vast majority of fraudulent redemption-scheme tax refund claims without issuing any refund. Taxpayers who submit the claims face substantial civil monetary penalties, and possible criminal prosecution.

John A. DiCicco, Acting Assistant Attorney General for the Justice Department’s Tax Division, thanked James Strong, the Justice Department trial attorney who handled the case and Shauna Henline, the IRS senior technical advisor who conducted the investigation.

In the past decade, the Justice Department’s Tax Division has obtained more than 435 injunctions against dishonest tax-return preparers and tax-fraud promoters. Information about these cases is available on the Justice Department Web site.

Order (PDF)

WASHINGTON – Wheaton Community Hospital, the City of Wheaton, Minn. and Dr. Stanley Gallagher (collectively WCH) have agreed to pay $846,461 to settle allegations that their hospital admission practices violated the False Claims Act, the Justice Department announced today.

This settlement resolves allegations that WCH knowingly made false claims to Medicare for unreasonable and unnecessary hospital admissions. Specifically, the government contended that, from 1998 to 2004, WCH admitted some patients and kept others admitted to acute care when doing so was not medically necessary. The defendants then billed Medicare for the cost of these hospital admissions.

"Hospitals and doctors have a responsibility to provide patients with reasonable and necessary care. When they neglect those obligations, patients and taxpayers suffer," said Tony West, Assistant Attorney General for the Justice Department’s Civil Division.

The allegations against WCH arose from a lawsuit filed in federal court in Minnesota under the qui tam, or whistleblower, provisions of the False Claims Act, which allow private individuals to file civil actions on behalf of the United States and share in any recovery. Dr. Steven Radjenovich, the whisteblower in this case, formerly practiced at Wheaton Community Hospital with Dr. Gallagher. Dr. Radjenovich will receive $203,150 as his share of the settlement with WCH.

Assistant Attorney General West thanked the Justice Department’s Civil Division, the U.S. Attorney’s Office for the District of Minnesota and the Department of Health and Human Services’ Office of the Inspector General for their efforts in handling this investigation and settlement.

The case is entitled United States ex rel. Steven Radjenovich v. Stanley Gallagher, et al., Case No.: 04-4538 (D. Minn.).

UTStarcom Inc. (UTSI) has entered into an agreement with the Department of Justice, agreeing to pay a $1.5 million fine for violations of the Foreign Corrupt Practices Act (FCPA) by providing travel and other things of value to foreign officials, specifically employees at state-owned telecommunications firms in the People’s Republic of China. The announcement was made today by Assistant Attorney General Lanny A. Breuer of the Criminal Division.

UTSI, a Delaware corporation headquartered in Alameda, Calif., and listed on the Nasdaq, is a global telecommunications company that designs, manufactures and sells network equipment and handsets. According to information contained in the agreement, UTSI has historically focused on Asian markets, with a particular emphasis on China. UTSI generally does business in China through its wholly-owned subsidiary, UTStarcom China Co. Ltd. (UTS-China).

As described in the agreement, UTSI has acknowledged responsibility for the actions of UTS-China and its employees and agents, who arranged and paid for employees of Chinese state-owned telecommunications companies to travel to popular tourist destinations in the United States, including Hawaii, Las Vegas and New York City. The trips were purportedly for individuals to participate in training at UTSI facilities. In fact, UTSI had no facilities in those locations and conducted no training. UTS-China then falsely recorded these trips as "training" expenses, while the true purpose for providing these trips was to obtain and retain lucrative telecommunications contracts.

The agreement requires that UTSI pay a $1.5 million penalty, implement rigorous internal controls and cooperate fully with the Department. The agreement recognizes UTSI’s voluntary disclosure, thorough self-investigation of the underlying conduct, the cooperation provided by the company to the Department, and the remedial efforts undertaken by the company. As a result of these factors, the Department has agreed not to prosecute UTSI or its subsidiaries for the making of improper payments, provided that UTSI satisfies its ongoing obligations under the agreement.

In a related matter, UTSI reached a settlement today with the U.S. Securities and Exchange Commission under which it agreed to pay an additional $1.5 million penalty and satisfy additional obligations for a period of four years.

This case is being prosecuted by Trial Attorney James M. Koukios of the Criminal Division’s Fraud Section.

Agreement

WASHINGTON- Albert Gonzalez, 28, of Miami, pleaded guilty today to conspiring to hack into computer networks supporting major American retail and financial organizations, and to steal data relating to tens of millions of credit and debit cards, announced Assistant Attorney General of the Criminal Division Lanny A. Breuer, U.S. Attorney for the District of New Jersey Paul J. Fishman, U.S. Attorney for the District of Massachusetts Carmen Milagros Ortiz and Director of the U.S. Secret Service Mark Sullivan.

Gonzalez, aka "segvec," "soupnazi" and "j4guar17," pleaded guilty to two counts of conspiracy to gain unauthorized access to the payment card networks operated by, among others, Heartland Payment Systems, a New Jersey-based card processor; 7-Eleven, a Texas-based nationwide convenience store chain; and Hannaford Brothers Co. Inc., a Maine-based supermarket chain. The plea was entered in federal court in Boston before U.S. District Court Judge Douglas P. Woodlock. The case is one of the largest data breaches ever investigated and prosecuted in the United States.

According to information contained in the plea agreement, Gonzalez leased or otherwise controlled several servers, or "hacking platforms," and gave access to these servers to other hackers, knowing that they would use them to store malicious software, or "malware," and launch attacks against corporate victims. Malware used against several of the corporate victims was also found on a server controlled by Gonzalez. Gonzalez tested malware by running multiple anti-virus programs in an attempt to ascertain if the programs detected the malware. According to information in the plea agreement, it was foreseeable to Gonzalez that his co-conspirators would use malware to steal tens of millions of credit and debit card numbers, affecting more than 250 financial institutions. Gonzalez was indicted in New Jersey in August 2009 for this criminal conduct.

Based on the terms of the plea agreement, Gonzalez will not seek a prison term under 17 years and the government will not seek a prison term of more than 25 years. Gonzalez pleaded guilty in September 2009 in Boston to 19 counts of conspiracy, computer fraud, wire fraud, access device fraud and aggravated identity theft relating to hacks into numerous major U.S. retailers including TJX Companies, BJ’s Wholesale Club, OfficeMax, Boston Market, Barnes & Noble and Sports Authority. Gonzalez was indicted for those offenses in August 2008 in the District of Massachusetts. Gonzalez also pleaded guilty in September 2009 in Boston to one count of conspiracy to commit wire fraud relating to hacks into the Dave & Buster’s restaurant chain, which were the subject of a May 2008 indictment in the Eastern District of New York.

As part of the plea agreement with the government, the New Jersey case was transferred to the District of Massachusetts for plea and sentencing. According to the terms of the New Jersey plea agreement, the parties agree that Gonzalez’ sentence in the New Jersey case should run concurrently with the sentence imposed in the Boston and New York cases. Gonzalez remains in federal custody. Sentencing in the Boston and New York cases is currently scheduled for March 18, 2010, in Boston. Sentencing in the New Jersey case is scheduled for March 19, 2010.

"The Department of Justice will not allow computer hackers to rob consumers of their privacy and erode the public’s confidence in the security of the marketplace," said Assistant Attorney General Breuer.  "Criminals like Albert Gonzalez who operate in the shadows will be caught, exposed and held to account. Indeed, with timely reporting of data breaches and high-tech investigations, even the most sophisticated hacking rings can be uncovered and dismantled, as our prosecutors and agents demonstrated in this case."

"Commercial hackers like Gonzalez believe they are immune from detection and prosecution as they lurk in the shadows of the Internet," said U.S. Attorney Fishman of the District of New Jersey. "But time and again they are caught, prosecuted and sentenced to lengthy federal prison terms. Other hackers should sit up and take notice."

"The conviction of Mr. Gonzalez, and the unraveling of one of the most complex and large scale identity theft cases in history, should serve as a reminder to hacker organizations, that the Department of Justice will vigorously investigate and prosecute cybercrimes, regardless of their sophistication and global reach.  Mr. Gonzalez’s conviction is the result of unprecedented coordination across agency and geographical lines, and I want to commend the investigators and prosecutors who have worked tirelessly to bring this case to fruition," said U.S. Attorney Ortiz of the District of Massachusetts.

"Today’s plea proves that although cyber criminals can threaten our nation’s financial sector, the Secret Service and its many partners around the world will pursue and prosecute them," said U.S. Secret Service Director Sullivan. "Time and again, cooperation and advanced methodologies have allowed us to focus our resources in order to detect and prevent these types of crimes, wherever they originate."

The New Jersey case is being prosecuted by Assistant U.S. Attorneys Erez Liebermann and Seth Kosto of the District of New Jersey, Assistant U.S. Attorneys Stephen Heymann and Donald Cabell of the District of Massachusetts, and Senior Counsel Kimberly Kiefer Peretti of the Criminal Division’s Computer Crime and Intellectual Property Section. All of these cases are being investigated by the U.S. Secret Service.

Spectranetics Corporation, a medical device manufacturer, has agreed to pay the United States $4.9 million in civil damages plus a $100,000 forfeiture to resolve claims against the company, the Justice Department announced today. The claims arise from allegations that the company illegally imported unapproved medical devices and provided them to physicians for use in patients, conducted a clinical study in a manner that failed to comply with federal regulations and promoted certain products for procedures for which the company had not received Food and Drug Administration approval or clearance.

The company manufactures, distributes and sells certain medical lasers and peripheral devices for those lasers, such as lead wires that guide the lasers through vascular tissue and catheters that carry and contain the lasers inside the veins, including, specifically, the CVX-300 Medical Laser and the CliRpath Turbo Laser Catheter, the TURBO Elite Laser Ablation Catheter, and the TURBO-Booster Laser Guide Catheter.

In resolving this matter, Spectranetics has entered into a civil settlement agreement and a non-prosecution agreement with the United States. The company also entered into a corporate integrity agreement with the Office of Inspector General of the Department of Health and Human Services.

According to the non-prosecution agreement, officers and employees who acted on behalf of the company engaged in multiple areas of wrongdoing. Specifically, Spectranetics illegally imported unapproved medical devices from overseas manufacturers and distributed those devices for use in human patients, and failed to meet its reporting obligations to FDA regarding a study named "CORAL" (C Oronary graft Results after Atherectomy with Lasers) and another associated study in connection with the devices listed above.

Under the terms of the non-prosecution agreement, Spectranetics has accepted responsibility for its conduct, has instituted remedial measures to prevent this conduct in the future, and will continue to cooperate in the ongoing criminal investigation. As a result, Spectranetics will not be criminally prosecuted for this conduct. Under the civil settlement agreement, the United States asserted that, as a result of the conduct described here and set forth in more detail in the civil agreement, Spectranetics caused false claims to be submitted to the Medicare Program during portions of the time period from 2003 to 2008.

"It is important to hold those who submit false claims to Medicare responsible for their actions," said U.S. Attorney David Gaouette. "Settlements such as this help to protect the integrity of the Medicare system."

"The Department of Justice will be vigilant in pursuing cases against medical device companies that break the law and defraud taxpayers," said Tony West, Assistant Attorney General for the Justice Department’s Civil Division.

"Our compliance agreement with Spectranetics holds the company and its executives accountable for violations of Federal health care program and FDA requirements," said Daniel R. Levinson, Inspector General of the Department of Health and Human Services. "Records from Spectranetics’ clinical investigations will be audited by an Independent Review Organization to ensure compliance with FDA rules – including reporting of adverse events."

The matter was handled by the U.S. Attorney’s Office for the District of Colorado, the Office of Consumer Litigation and the Commercial Litigation Branch of the Justice Department’s Civil Division and the Food and Drug Administration Office of Criminal Investigation. The corporate integrity agreement was handled by the Department of Health and Human Services Office of the Inspector General.

WASHINGTON – Genesys Health System has agreed to pay the United States $669,413 to settle a lawsuit alleging that the health care provider violated the False Claims Act by submitting false claims to Medicare, the Justice Department announced today.

Genesys, a Grand Blanc, Mich.-based company, provides health care services through a network of medical facilities located in Michigan. The government alleged that between 2001 and 2007, Genesys violated the False Claims Act by billing Medicare for higher levels of service than were actually rendered to patients. Specifically, the government alleged that Genesys overbilled for evaluation and management services provided to cardiology patients.

"As this case demonstrates, we are committed to vigorously pursuing those who defraud Medicare," said Tony West, Assistant Attorney General of the Justice Department’s Civil Division. "Taxpayer dollars should be spent on health care services for patients, not wasted on fraud and abuse." Assistant Attorney General West praised the coordinated efforts of the Justice Department’s Civil Division, the U.S. Attorney’s Office for the Eastern District of Michigan, and the Office of Investigations for the Department of Health and Human Services’ Office of Inspector General and Office of Counsel to the Inspector General.

The allegations resolved by today’s settlement were initiated by a lawsuit filed under the qui tam or whistleblower provisions of the False Claims Act, which allow private citizens to sue for fraud on behalf of the United States and share in any recovery. The whistleblower in this case will receive a $133,882 share of today’s settlement.

"With the rising cost of health care and the related pressure on the Medicare Trust Fund, the last thing our nation can afford are providers who are profiteering at the expense of patients," said Terrence Berg, U.S. Attorney for the Eastern District of Michigan. "The relator can be proud that she brought these serious allegations of Medicare fraud to our attention and paved the way for the government to uncover the false claims. It is important that anyone who has information about alleged fraud on the federal government come forward so we can investigate."

The lawsuit was captioned as United States ex rel. Wendy Buterakos v. Ascension Health and Genesys Health System, Civil Action No. 06-10550 (E.D. Mich.).

WASHINGTON - A 23-year-old Nigerian man was charged in a federal criminal complaint today with attempting to destroy a Northwest Airlines aircraft on its final approach to Detroit Metropolitan Airport on Christmas Day, and with placing a destructive device on the aircraft.

According to an affidavit filed in support of the criminal complaint, Umar Farouk Abdulmutallab, 23, a Nigerian national, boarded Northwest Flight 253 in Amsterdam, Netherlands on December 24, 2009 and had a device attached to his body. As the flight was approaching Detroit Metropolitan Airport, Abdulmutallab set off the device, which resulted in a fire and what appears to have been an explosion. Abdulmutallab was then subdued and restrained by the passengers and flight crew. The airplane landed shortly thereafter, and he was taken into custody by Customs and Border Patrol officers.

A preliminary FBI analysis found that the device contained PETN, also known as pentaerythritol, a high explosive. Further analysis is ongoing. In addition, FBI agents recovered what appear to be the remnants of the syringe from the vicinity of Abdulmutallab’s seat, believed to have been part of the device.

"This alleged attack on a U.S. airplane on Christmas Day shows that we must remain vigilant in the fight against terrorism at all times," Attorney General Eric Holder said. "Had this alleged plot to destroy an airplane been successful, scores of innocent people would have been killed or injured. We will continue to investigate this matter vigorously, and we will use all measures available to our government to ensure that anyone responsible for this attempted attack is brought to justice."

Abdulmutallab required medical treatment, and was transported to the University of Michigan Medical Center after the plane landed. He will make his initial court appearance later today.

Interviews of all of the passengers and crew of Flight 253 revealed that prior to the incident, Abdulmutallab went to the bathroom for approximately twenty minutes, according to the affidavit. Upon returning to his seat, Abdulmutallab stated that his stomach was upset, and he pulled a blanket over himself. Passengers then heard popping noises similar to firecrackers, smelled an odor, and some observed Abdulmutallab’s pants leg and the wall of the airplane on fire. Passengers and crew then subdued Abdulmutallab and used blankets and fire extinguishers to put out the flames. Passengers reported that Abdulmutallab was calm and lucid throughout. One flight attendant asked him what he had had in his pocket, and he replied "explosive device."

These prosecutions are being handled by the U.S. Attorney’s Office for the Eastern District of Michigan, with assistance from the Counterterrorism Section of the Justice Department’s National Security Division.

The investigation is being conducted by the Federal Bureau of Investigation, US Customs and Border Protection, and the Joint Terrorism Task Force.

The public is reminded that criminal complaints contain mere allegations and a defendant is presumed innocent until proven guilty.

Cristina Andres Perfecto of Nashville, Tenn., was sentenced late yesterday in federal court in Memphis to 190 months in prison for sex trafficking by force, fraud and coercion, sex trafficking of a juvenile and conspiracy.

Perfecto pleaded guilty on Aug . 28, 2007, to two counts of sex trafficking by force, fraud and coercion and sex trafficking of a juvenile in the Western District of Tennessee, as well as one count of conspiracy in the Middle District of Tennessee.

Perfecto’s co-defendant, Juan Mendez, was sentenced to 50 years in prison on June 27, 2008, after pleading guilty to child sex trafficking and sex trafficking by force, fraud, and coercion. Perfecto and Mendez each admitted to fraudulently luring two young girls, including a 13 year-old, from rural Mexico to Tennessee with the intent of forcing them into prostitution. Both further admitted that Mendez, with Perfecto’s assistance, physically, verbally, and sexually abused the victims in order to coerce them into prostitution.

Nine other defendants had earlier pleaded guilty in this same case for crimes including: child sex trafficking, conspiracy to harbor illegal aliens, conspiracy to commit money laundering, enticing an individual to travel in interstate commerce to commit prostitution, and violating the Mann Act.

"This defendant lured vulnerable victims to the United States under false pretenses and coerced them into sexual slavery, depriving them of their freedom, their dignity and their civil rights," said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. "We will continue to aggressively prosecute individuals who engage in coercive sexual exploitation."

Assistant U.S. Attorney Steve Parker for the Western District of Tennessee and Trial Attorney Jonathan Skrmetti from the Justice Department’s Civil Rights Division prosecuted the case. The investigation was led by Memphis FBI Agent Tracey Harris and Memphis U.S. Immigration and Customs Enforcement (ICE) Agent Greg Swearngin. They were assisted by ICE agents in Nashville, the Memphis Police Department, the Nashville Police Department and FBI and ICE agents from around the country who lent their expertise to the investigation. Catholic Charities, the Salvation Army, the YWCA, and World Relief have assisted the victims and witnesses in this matter.

WASHINGTON - Visiting Physicians Association, which is based in Farmington Hills, Mich., will pay the United States and the state of Michigan $9.5 million to settle allegations that the association violated the False Claims Act by submitting false claims to Medicare, TRICARE and the Michigan Medicaid program, the Justice Department announced today. Visiting Physicians Association is a Michigan professional corporation which has provided home health services at various times in Michigan, Ohio, Georgia and Wisconsin.

The agreement announced today settles allegations that Visiting Physicians Association submitted claims to the Medicare, TRICARE and Michigan Medicaid for unnecessary home visits and care plan oversight services, for unnecessary tests and procedures, and for more complex evaluation and management services than the services that Visiting Physicians Association actually provided.

"This settlement illustrates the government’s commitment to pursuing those who defraud Medicare and other important programs and drive up the costs of health care," said Tony West, Assistant Attorney General for the Civil Division of the Department of Justice. "The Justice Department will continue to work with our federal and state partners to ensure that taxpayer dollars are spent on health care services for patients, not wasted on fraud and abuse."

"This settlement furthers the public interest and protects the strength and soundness of the Medicare program while ensuring that Medicare beneficiaries receive appropriate care. Cooperation between federal and state entities is crucial to this effort," said Carter Stewart, U.S. Attorney for the Southern District of Ohio.

"My office is committed to ensuring that healthcare providers are reimbursed only for legitimate services provided to qualified beneficiaries.  We will use all tools available to us, including civil enforcement remedies, to maintain the integrity of government programs,"said Terrence Berg, U.S. Attorney for the Eastern District of Michigan.

This settlement resolves four lawsuits filed by private plaintiffs under the qui tam or whistleblower provisions of the False Claims Act, which permit private parties to file an action on the government’s behalf and share in any recovery. This settlement provides that the four whistleblower plaintiffs will collectively receive a total of approximately $1.7 million.

The U.S. Department of Health and Human Services, Office of Inspector General; the FBI; and the Michigan Attorney General’s Office investigated this matter. The Justice Department’s Civil Division, the U.S. Attorney’s Office for the Southern District of Ohio, the U.S. Attorney’s Office for the Eastern District of Michigan, and the Michigan Attorney General’s Office handled the lawsuits.

WASHINGTON - Aristotle R. Matsa, an attorney in Columbus, Ohio, was charged with tax offenses, obstruction of justice and additional charges in a 20-count indictment unsealed today, the Justice Department and Internal Revenue Service (IRS) announced. Additionally, George Z. Pappas, an attorney in Urbana, Ohio, was charged in a one-count information with making a false statement. According to a plea agreement filed in conjunction with the information, Pappas has agreed to plead guilty to the false statement charge.

The indictment, which was returned on Dec. 21, 2009, was unsealed upon Matsa’s arrest. Matsa was charged with fifteen counts of aiding and assisting in the preparation of false and fraudulent tax returns that related to five different trusts; one count of willfully failing to file a report of foreign bank and financial accounts; one count of conspiracy to commit obstruction of justice; one count of witness tampering; one count of submitting a false statement; and one count of obstruction of justice.

According to the indictment, Matsa, who is an attorney, real estate broker, architect and licensed minister in Ohio, created and operated several nominee entities in order to disguise his assets and income. Specifically, Matsa caused the preparation and filing of 15 fraudulent trust tax returns, Forms 1041, with the IRS. The trust returns represent filings for at least five separate trust entities during the tax years 2003 to 2005. Each of the trusts reported receiving significant amounts of interest income each year; however, no income tax was reported as due as a result of fraudulently claimed deductions for distributions purportedly paid to a foreign beneficiary each year. The indictment alleges that Matsa used funds from these trusts to purchase a 150-acre farm in Hocking County, Ohio, as well as a single-family residence in Worthington, Ohio, both of which he used as his personal residences.

According to the indictment, Matsa violated the foreign bank account reporting requirements by failing to disclose his ownership and control over a foreign bank account held in the Netherlands during calendar year 2003, where an account was maintained by Matsa with funds in excess of $10,000 from at least August 2003 to November 2003.

According to the indictment, after learning of the grand jury investigation into his business activities in May 2006, Matsa and others conspired to obstruct justice by misleading and concealing evidence from the grand jury, making false statements to the grand jury, creating false documents, tampering with a witness and lying to federal investigators.

According to his plea agreement, Pappas admitted that he made false statements to federal agents during his grand jury testimony and in a letter to the Justice Department about the ownership of a law firm doing business in the Short North area. According to the indictment from 1987 until 2004, the law firm was known as The Law Offices of Aristotle R. Matsa, when the name was changed to The Law Offices of George Z. Pappas.

An indictment is merely a formal charge by the grand jury. Each defendant is presumed innocent unless and until proven guilty in U.S. District Court. If convicted, Matsa faces a maximum sentence of 90 years in prison, a fine of $5 million, and 5 years of supervised release.

Judge Sargus has not yet scheduled a change of plea hearing for Pappas. Pappas faces a maximum sentence of 5 years in prison, a $250,000 fine, and 3 years of supervised release.

The case is being prosecuted by Justice Department Tax Division trial attorneys Richard M. Rolwing and Jorge Almonte. The case was investigated by the IRS, Criminal Investigation Division.

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

WASHINGTON – The Justice Department today filed a brief as a friend of the court in Marlo M., et al. v. Cansler, et al., a community integration case in federal court for the Eastern District of North Carolina. The government’s brief supports the two plaintiffs, individuals with a developmental disability and mental illness, who are seeking to block the state of North Carolina from making major reductions in services offered to them, which could also affect similarly situated people.

The United States seeks to participate in this case as part of its ongoing commitment to enforcing the Supreme Court decision in Olmstead v. L.C., a ruling requiring states to eliminate unnecessary segregation of persons with disabilities and to move persons who can function in the community out of segregated facilities and into supported living situations.

North Carolina’s planned reductions will directly impact individuals with disabilities, potentially forcing the plaintiffs and others out of community placements. The plaintiffs have successfully resided in the community for years. Cuts to the services provided by the state would put them and other individuals with disabilities at imminent risk of being placed in an institutional setting. The lawsuit alleges that the move to institutional placements will increase costs to the state.

"By supporting the plaintiffs in this case, we seek to ensure that the civil rights of individuals with mental illness and developmental disabilities in North Carolina are protected," said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. "North Carolina has provided critical services to disabled individuals with significant needs, allowing them to fully participate in their communities. Now cuts to these services threaten to take this away at a cost to the plaintiffs and the state. "

The Supreme Court ruled in the Olmstead case that unnecessary segregation of individuals with disabilities wrongly stigmatizes them as unworthy of participating in community life. Today’s filing follows new activity by the Justice Department to better enforce Olmstead’s mandate of community integration. The Civil Rights Division has recently filed briefs in support of four separate Olmstead cases in Florida, Connecticut, Virginia and New York.

The full and fair enforcement of the ADA and its mandate to integrate individuals with disabilities is a major priority of the Civil Rights Division. The ADA protects individuals with disabilities from discrimination by public entities. People interested in finding out more about the ADA can call the Justice Department’s toll-free ADA Information Line at 1-800-514-0301 or 1-800-514-0383 (TTY), or access its ADA Web site at http://www.ada.gov.

WASHINGTON – Chevron Corporation, Texaco, Unocal Incorporated and their affiliates (the Chevron companies) have agreed to pay the United States $45,569,584.74, to resolve claims that they violated the False Claims Act by knowingly underpaying royalties owed on natural gas produced from federal and Indian leases, the Justice Department announced today.

The Minerals Management Service (MMS) of the U.S. Department of the Interior is responsible for overseeing the collection of royalties on federal and Indian leases. Each month, companies are required to report to the MMS the value of the natural gas produced from their federal and Indian leases and to pay a percentage of the reported value as royalties. The settlement resolves claims by the United States that the Chevron, Texaco and Unocal companies improperly deducted from royalty values the cost of boosting gas up to pipeline pressures, used affiliate transactions to falsely reduce the reported value of gas taken from federal and Indian leases, and improperly reported processed gas as unprocessed gas to reduce royalty payments.

"This settlement successfully ends long-standing litigation and ensures that taxpayers receive their fair share of royalty revenues from energy production on federal and American Indian lands," said Interior Secretary Ken Salazar. "Most of the $45 million settlement will be disbursed to appropriate federal, state and American Indian accounts that were affected by Chevron companies’ underpayment of natural gas royalties and improper deductions. This administration is changing the way Interior does business and settlements, such as this one, demonstrate our determination to assure the American public receives fair market value for the resources we manage in their name."

"Mineral royalties provide an important source of income for Native Americans, the United States, and various States. The Department of Justice is committed to protecting public and Indian lands and to ensuring that companies with leases to take natural gas from those lands pay their fair share of royalties," said Tony West, Assistant Attorney General for the Civil Division of the Department of Justice. Assistant Attorney General West noted that this settlement resulted from the collaborative efforts of the Justice Department’s Civil Division, the U.S. Attorney’s Office for the Eastern District of Texas, and the Department of the Interior’s Office of Inspector General, Minerals Management Service and Office of the Solicitor.

Today's settlement resolves allegations under the False Claims Act that the Chevron companies systematically under reported the value of natural gas that they took from federal and Indian leases from March 1988 to November 2008 and, consequently, that they paid less royalties than they owed to the United States and various Indian tribes.

"Perhaps it is part of the human condition to take advantage of others and to not conduct business in a honorable fashion.  But it will never be the right way to do business.  Today’s settlement affirms the basic truth that it is never a good idea to cheat.  Both the Department of Justice and the U.S. Attorney’s Office will always take the necessary steps to protect the royalty interests of the Indian tribes as well as the United States," said Malcolm Bales, the U.S. Attorney for the Eastern District of Texas.

The settlement with the Chevron companies arises from a lawsuit filed in federal court in Texas by Harrold Wright under the whistleblower provisions of the False Claims Act, which allow private citizens to file actions on behalf of the United States and share in any recovery. Because Mr. Wright is deceased, his heirs will receive $12,303,787.88, plus interest, as part of this settlement. Mr. Wright’s suit alleges that a number of companies systematically underpaid royalties due for their production of natural gas from federal and Indian lands. The Justice Department previously settled with Burlington Resources Inc. for $105.3 million, Shell Oil Company for $56 million and Dominion Exploration and Production Company for $2 million.

The case is U.S. ex rel. Wright v. Chevron USA, Inc. et al., 5:03-CV-264 (E.D. Tex.)

Attorney General Eric Holder announced today that he has appointed Gary Grindler Acting Deputy Attorney General, effective Feb. 5, 2010. Grindler will become Acting Deputy Attorney General upon the departure of Deputy Attorney General David W. Ogden, who announced his resignation effective Feb. 5.

"Gary is a great asset to the Department, and I am pleased he has agreed to take on this responsibility," Attorney General Eric Holder said. "He will be instrumental in our work to keep the American people safe, ensure the fairness and integrity of our financial markets, and restore the traditional missions of the Department."

"I am honored to serve the American people in this new capacity," Grindler said. "I look forward to assisting the Attorney General in moving the Department forward."

Grindler will serve until Feb. 5 as Principal Associate Deputy Attorney General. He rejoined the Department in March as Deputy Assistant Attorney General in the Criminal Division. He returned to the Department after previously serving in a number of roles, including as Principal Associate Deputy Attorney General and Counselor to the Attorney General, Deputy Assistant Attorney General in the Civil Division, and as an Assistant U.S. Attorney in the Southern District of New York and the Northern District of Georgia.

Most recently, Grindler was a partner at King & Spalding LLP in its Washington, D.C., office where he focused on white collar criminal defense, internal corporate investigations and complex civil litigation. He was selected for inclusion in the 2006-2009 editions of The Best Lawyers in America in the area of white collar criminal defense and on the 2008-2009 Washington, D.C., Super Lawyers lists. In 2000, he received the Edmund J. Randolph Award in recognition of his outstanding contributions to the Department of Justice. He received both his undergraduate and law degrees from Northwestern University.