District Not Recorded

WASHINGTON - A federal court in Los Angeles has issued permanent injunctions barring a Torrance, Calif., tax preparer, Susan Guan and her company, SRN Financial Services Inc., from preparing tax returns for others, the Justice Department announced today. The defendants agreed to the injunction orders. The government complaint in the civil case alleged that Guan and SRN promoted a tax-fraud scheme designed to siphon millions of dollars from the U.S. Treasury. Guan allegedly requested a total of $4.5 million in fraudulent refunds.

According to the complaint, the defendants promoted a tax-fraud arrangement known as the "redemption" or "OID redemption" scheme. Guan and her firm allegedly filed a series of false IRS forms, including tax returns, amended returns, and IRS Forms 1099-OID to request fraudulent tax refunds based on phony claims of large income tax withholding. For one of her customers, Susan Guan allegedly requested an $851,786 fraudulent refund on a false amended tax return with 16 bogus Forms 1099-OID to support the refund request. The Internal Revenue Service (IRS) catches the vast majority of bogus redemption-scheme tax returns and blocks the claimed refunds.

Guan’s case was one of seven lawsuits filed across the country last month against alleged redemption scheme promoters. Papers filed in those cases said the defendants prepared tax returns requesting a total of $562.4 million in bogus refunds. Altogether, according to the IRS, redemption scheme participants (including customers of the defendants in those seven lawsuits) have requested a total of $3.3 trillion in fraudulent refunds.

John A. DiCicco, Acting Assistant Attorney General for the Justice Department’s Tax Division, thanked Grayson A. Hoffman, 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 430 injunctions against tax fraud promoters and tax return preparers. Information about these cases is available on the Justice Department’s Web site.

Indictments were unsealed today against 26 people charged with engaging in a scheme to steal millions of dollars from the Federal Communications Commission’s (FCC) Video Relay Service (VRS) program, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division, Assistant Director of the FBI’s Washington Field Office Joseph Persichini Jr., Deputy Chief Postal Inspector Zane Hill, and FCC Chief of Staff Edward Lazarus.

Arrests were made today by FBI agents and Postal Inspectors in New York, New Jersey, Florida, Texas, Pennsylvania, Arizona, Nevada, Oregon and Maryland, and were the result of a joint FBI, U.S. Postal Inspection Service (USPIS) and FCC Office of Inspector General (FCC-OIG) investigation into a nationwide scheme to defraud the FCC’s VRS program.

"The individuals charged in connection with today’s operation are alleged to have stolen tens of millions of dollars from an important government program that is intended to help deaf and hard-of-hearing Americans communicate with hearing persons," said Assistant Attorney General of the Criminal Division Lanny A. Breuer.  "These defendants are alleged to have generated fraudulent call minutes by making it appear that deaf Americans were engaging in legitimate calls with hearing persons, when in reality, the defendants were simply attempting to steal money from an FCC program that is funded by every single American who pays their telephone bills. The Department of Justice will not stand by and let corporate executives and others line their pockets with money that should be used to help deaf Americans."

"Unfortunately, this remarkable service, designed to help those in need, also provided a growth opportunity for criminal activity that we believe has cost American consumers tens of millions of dollars," said Joseph Persichini, Jr., Assistant Director of the FBI’s Washington Field Office. 

"When the U.S. Mail is used for the purposes of committing fraud, and in this case, a particularly insidious type of fraud, it’s the job of the Postal Inspection Service to aggressively investigate and ensure America’s confidence in the integrity of its postal system," said Deputy Chief Postal Inspector Zane M. Hill.

"Today’s events represent both a tragedy and an opportunity," said FCC Chief of Staff Edward Lazarus. "The tragedy is the unfortunate truth that a significant number of unscrupulous individuals, at great cost to the nation, have preyed on a very important program for delivering essential telecommunications services to persons with hearing disabilities.  The ‘opportunity’ is the chance to reiterate our commitment to the VRS program and to follow through on efforts, already begun at the FCC, to safeguard the program against further waste, fraud, and abuse and to improve its delivery of VRS services to consumers." 

The indictments allege that 26 individuals engaged in a scheme to defraud the FCC by submitting false and fraudulent claims for VRS calls, causing the FCC to reimburse the defendants at a rate of approximately $390 per hour. According to the indictments, 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.

 The indictments charge owners and employees of the following seven companies with engaging in a scheme to defraud the FCC’s VRS program

• Viable Communications Inc., of Rockville, Md.;
• Master Communications LLC, of Las Vegas;
• KL Communications LLC, of Phoenix;
• Mascom LLC of Austin, Texas;
• 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.

Each of the indictments alleges that the defendants made, caused others to make, or processed fraudulent VRS calls that were then submitted to the FCC for reimbursement. These calls, often referred to as "r calls," "rest calls" or "run calls," served no purpose other than to generate call minutes that would be billed to the FCC’s VRS Fund.

In the first indictment, Viable Communications Inc. and four Viable executives have been charged with fraudulently generating VRS call minutes and obtaining reimbursements from the FCC for those calls. Viable owner and CEO John Yeh, 62, of Potomac, Md.; Viable Chief Operating Officer Joseph Yeh, 64, of Potomac; Viable Assistant Vice President Anthony Mowl, 25, of Rockville, Md.; and Viable Human Relations Director Donald Tropp, 25, of Rockville, have been charged in a six-count indictment with conspiracy to defraud the U.S. government and to submit false claims; submitting false claims; conspiracy to commit mail fraud; and mail fraud.

In the second indictment, Master Communications, KL Communications and Mascom owners and employees have been charged with generating fraudulent VRS minutes. According to the indictment, these companies operated VRS call centers for Viable that generated and processed a large volume of fraudulent VRS calls, which were then submitted to the FCC’s TRS Fund Administrator for reimbursement. Master Communications, KL Communications and Mascom owner and employee Kim E. Hawkins, 46, of Las Vegas; Master Communications employee and KL Communications owner and employee Larry Berke, 62, of Phoenix; KL Communications employee Dary Berke of Phoenix; KL Communications and Master Communications employee Lisa Goetz, 43, of Phoenix; and Mascom Marketing and Advertising Director David Simmons, 43, of Austin; have been charged in a six-count indictment with conspiracy to defraud the U.S. government and to submit false claims; submitting false claims; conspiracy to commit mail fraud; and mail fraud.

In the third indictment, DHIS owners and employees have been charged with generating and processing a large volume of fraudulent VRS calls. According to the indictment, DHIS operated VRS call centers for Viable that generated and processed fraudulent VRS calls. DHIS co-owners Irma Azrelyant, 47, of Basking Ridge, N.J., and Joshua Finkle, 41, of New York; DHIS video interpreter Natan Zfati, 31, of Brooklyn, N.Y.; DHIS bookkeeper Oksana Strusa, 35, of Jersey City, N.J.; DHIS video interpreter Alfia Iskandarova, 29, of Brooklyn; and DHIS video interpreter Hennadii Holovkin, 36, of Philadelphia; have been charged in a six-count indictment with conspiracy to defraud the U.S. government and to submit false claims; submitting false claims; conspiracy to commit mail fraud; and mail fraud.

In the fourth indictment, ICSD owners and employees have been charged with generating and processing a large volume of fraudulent VRS calls. According to the indictment, ICSD operated VRS call centers for Viable that generated and processed a large number of fraudulent VRS calls. The indictment also alleges that ICSD owners and employees engaged in sham "marketing calls" for the stated purpose of marketing VRS services, but for the alleged true purpose of fraudulently generating additional VRS minutes. ICSD co-owners Yosbel Buscaron, 25, and Lazaro Fernandez, 35, both of Hialeah, Fla.; ICSD call center manager Wanda Hutchinson, 35, of Pembroke Pines, Fla.; ICSD call center manager Jessica Bacallo, 23, of Miami; and ICSD marketing manager Kathleen Valle, 23, of Miami; have been charged in a six-count indictment with conspiracy to defraud the U.S. government and to submit false claims; submitting false claims; conspiracy to commit mail fraud; and mail fraud.

In the fifth indictment, defendants Benjamin Pena, Robert Z. Rubeck and Tamara Frankel have been charged with generating fraudulent VRS calls. According to that indictment, Pena was allegedly paid by Viable owner and CEO John Yeh to generate fraudulent VRS minutes. Also according to the indictment, Pena allegedly paid Rubeck and Frankel to make VRS calls for the purpose of generating those fraudulent minutes. Pena, 34, of Scottsdale, Ariz.; Rubeck, 34, of Surprise, Ariz.; and Frankel, 28, also of Surprise; have been charged in the six-count indictment with conspiracy to defraud the U.S. government and to submit false claims; submitting false claims; conspiracy to commit mail fraud; and mail fraud.

Deaf Studio 29 owners and employees have been charged in a sixth indictment with generating fraudulent VRS calls. According to the indictment, Marc Velasquez Verson, Ellen Thompson and Doris Martinez allegedly organized and paid employees to use a particular VRS provider to make run calls. That provider would pay the defendants approximately 20 to 25 percent of the money the provider received from the FCC for the calls generated by the defendants. Velasquez, 56, of Oswego, Ore.; Ellen Thompson, 43, of Lake Oswego, Ore.; and Doris Martinez, 51, also of Oswego; were charged in the six-count indictment with conspiracy to defraud the U.S. government and to submit false claims; submitting false claims; conspiracy to commit wire fraud; and wire fraud.

All of the indictments seek criminal forfeiture from each of the charged defendants.

An indictment is merely an accusation, and defendants are presumed innocent unless proven guilty.

These cases are being prosecuted by Assistant Chief Hank Bond Walther and Trial Attorney Brigham Cannon of the Criminal Division’s Fraud Section, with the investigative assistance of the FBI’s Washington Field Office, USPIS and FCC-OIG.

 

After three years of satisfying obligations under a deferred prosecution agreement, the charges against Statoil ASA for violating the anti-bribery and accounting provisions of the Foreign Corrupt Practices Act (FCPA) have been dismissed with prejudice. Statoil is an international oil company headquartered in Norway and listed on the New York Stock Exchange.

"Three years of diligent efforts by Statoil to address past misconduct and serious compliance failures have led to the dismissal of foreign bribery charges against the company," said Assistant Attorney General Lanny A. Breuer. "Bribing foreign government officials and then attempting to disguise the payments cannot be standard operating procedure. Companies that have robust compliance programs risk far less than companies that take their chances on possible FCPA violations."

"This case shows that deferred prosecution agreements against corporations can work as an important middle ground between declining prosecution and obtaining the conviction of a corporation," said U.S. Attorney Prett Bharara. "The deferred prosecution in this case helped restore the integrity of Statoil's operations and preserve its financial viability while at the same time ensuring that it improved what was obviously a failed compliance and anti-corruption program."

On Oct. 13, 2006, the Department of Justice filed a criminal information charging that in 2001 and 2002, Statoil sought to expand its business internationally and focused specifically on Iran as a country in which to secure oil and gas development rights. At the time, Iran was awarding contracts for the development of the South Pars field, one of the world’s largest natural gas fields. In 2001, Statoil developed contacts with and began negotiating with an Iranian government official who could influence the award of oil and gas contracts in Iran. Statoil then entered into a "consulting contract" with an offshore intermediary company. The purpose of that "consulting contract" – which called for the payment of more than $15 million over 11 years – was to induce the Iranian official to use his influence to help Statoil obtain a contract to develop portions of the South Pars field, and to open doors to future Iranian oil and gas projects. Two bribe payments totaling more than $5 million were made by wire transfer, and Statoil was awarded a South Pars development contract that was expected to yield millions of dollars in profit. The criminal information charged that Statoil violated the FCPA by making the corrupt payments, and also committed securities fraud by falsifying its books and records in characterizing the bribe payments as "consulting fees."

According to the deferred prosecution agreement, Statoil acknowledged making the corrupt payments, agreed to pay a $10.5 million penalty, and agreed to the appointment of an independent compliance consultant for a three-year period to review and periodically report on the company’s compliance with the deferred prosecution agreement and to conduct a comprehensive review of the controls, policies and procedures of Statoil related to compliance with the FCPA. Under the terms of the deferred prosecution agreement, the criminal information was to remain pending until it was either dismissed or prosecuted in order to allow Statoil to demonstrate its good conduct.

The Department of Justice has received the final report of the compliance consultant and determined that Statoil has fully complied with all of its obligations under the deferred prosecution agreement, including the obligation to adopt the compliance-related recommendations of the compliance consultant. Accordingly, on Nov. 18, 2009, the Department filed a motion with the court to dismiss with prejudice the criminal information against Statoil. Yesterday, in federal court in Manhattan, U.S. District Judge Richard J. Holwell granted that motion and dismissed the charges.

This case was handled by Deputy Chief Mark F. Mendelsohn of the Fraud Section as well as Assistant U.S. Attorney Ray Lohier and former Assistant U.S. Attorney Deborah Landis of the Southern District of New York. Fraud Section Trial Attorney Joseph Capone also provided assistance on this case.

 

A federal grand jury in Greenbelt, Md., has indicted 19 alleged members of the Almighty Latin King and Queen Nation (Latin Kings) for conspiracy to participate in a racketeering enterprise. The indictment was returned under seal yesterday and unsealed today upon the arrests of the defendants.

"Gangs, like the one charged in this indictment, may be relentless in protecting their turf, but we will be relentless in taking it back," said Assistant Attorney General Lanny A. Breuer. "As this case demonstrates, the Justice Department will use all of its authority – including the RICO statute and the federal conspiracy laws – to dismantle gangs, from the lowest-level members to the highest-ranking leaders. Working together with our partners in the U.S. Attorneys’ Offices, as well as other federal, state and local agencies, we will make our communities, our neighborhoods, and our children safer by prosecuting these gangs with resolve and determination."

"This case is part of a series of federal racketeering and conspiracy prosecutions in which federal, state and local agencies have joined to target leaders and key members of violent gangs operating in Maryland," said U.S. Attorney Rod J. Rosenstein. "Today’s indictment alleges that the Latin Kings gang is an organized criminal enterprise with leaders and members who commit violent crimes. Other federal racketeering cases are pending in Maryland against MS-13, Black Guerilla Family, PDL Bloods and TTP Bloods, and additional gang investigations are ongoing with the support of federal, state and local partners. We believe that this coordinated approach to gang prosecutions is contributing to the reduction in violent crime in Maryland."

"Today we executed the enforcement action on a very violent group of criminals who call themselves the Latin Kings," said ATF Deputy Director Kenneth Melson.  "We dismantled a large part of the Latin Kings organization whose members allegedly used violence to secure the sanctity of their private society. We have made a serious impact on violent crime and gang violence. This case is a great example of the efforts of ATF and our law enforcement partners to fight violent crime nationwide."

According to the indictment, the defendants were members of the Latin Kings, a violent street gang with members operating in Maryland since at least 2007. The traditional power centers of the Latin Kings are predominantly located in the Chicago and New York metropolitan areas, with thousands of members scattered across the United States and overseas.

Members of the Latin Kings greet each other using a set of hand-signs, each intended to evoke the shape of a crown, according to the indictment. In addition, Latin Kings often greet one another by exclaiming "ADR" or "Amor De Rey," which means "King’s Love" in Spanish. The Latin Kings use symbols depicting three- or five-pointed crowns, lions and Inca- or Aztec-inspired artwork to demonstrate their affiliation. The colors associated with, and often worn by, the Latin Kings are black and gold.

At the local level, groups of Latin Kings are organized into "tribes." The indictment alleges that in the spring of 2007, Miguel Cruz and Erick Roman established the Maryland Latin Kings, calling the tribe the Royal Lion Tribe of Maryland. The indictment charges that from a date unknown to the present, the Latin Kings members conspired to commit attempted murders, robberies, witness tampering and arson to further their racketeering scheme.

For example, the indictment alleges that Latin Kings members stored guns for Erick Roman, and gathered materials for a firebombing ordered by Roman. Gang members allegedly hunted for rival MS-13 members to shoot; kicked and stabbed a suspected MS-13 member near the Marylander Condominiums in Langley Park, Md., in December 2007; and in January 2009, fired shots at MS-13 members at a night club in Queens, N.Y. Latin Kings members allegedly robbed the home of a drug dealer at the Marylander Condominiums and a prostitute at a motel in Laurel, Md.; assaulted and stabbed two victims in Wheaton, Md.; agreed to murder a security guard at an apartment complex near the Marylander Condominiums; and burglarized a gun shop. In the summer of 2009, Francisco Ortiz, Leuri Read and other alleged members attempted to murder a victim by beating him with a wooden object and by stabbing him.

Gang members also allegedly attempted to shoot a victim in the leg for wanting to leave the gang; beat alleged fellow member Joseph Deleon and held another at gunpoint, slicing him with a knife, as punishment for violating Latin Kings rules; created a hit list containing names of Maryland Latin Kings members; and agreed to run background checks on new members and members under investigation. Ortiz, Read, Remy Heath and Brandon Smith allegedly agreed in January 2009 to kill a female gang member for "snitching" on Latin Kings members who had just been sentenced in federal court in Maryland for possession of an unregistered destructive device.

Latin Kings members communicate with members of their own tribe and with members across the country through the Internet and telephone. In October 2008, a member ordered all other members to take down any pictures of "hammers {guns} and knives," on their MySpace pages, due to his belief that the police wanted "to do RICO" on the members. Another member cautioned against talking about shooting people over the telephone.

The indictment charges the following defendants with conspiracy to participate in the racketeering activities of the Latin Kings:

Erick Roman, a/k/a "Erick Javier Sierra," "Malian-T," and "King Malian-T," age 33;

Miguel Cruz, a/k/a "Skibee" and "King Skibee," age 44;

Matthew Aguilar, a/k/a "Mateo" and "King Mateo," age 24;

Miguel Castillo, a/k/a "Colombia" and "King Colombia", age 22;

Joseph Deleon, a/k/a "Spirit" and "King Spirit," age 28;

Andres Echevarria, a/k/a "B-Boy" and "King B-Boy," age 22;

Remy Heath, a/k/a "Remy," "King Remy" and "King Mello," age 25;

Jorge Kilgore, a/k/a "Murda" and King Murda," age 20;

Erick Martinez, a/k/a "Eazie" and "King Eazie," age 19;

Melvin Carlos Nolasco, a/k/a "Joker" and "King Joker," age 22;

Senni Nolasco-Rodriguez, a/k/a "Cano" and "King Cano," age 20;

Francisco Ortiz, a/k/a "Francis Gabriel Ortis," "Pone" and "King Pone," age 25;

Roddy E. Paredes Jr., a/k/a "Guate," "King Guate" and "Walter," age 27;

Leuri Read, a/k/a "Kampana" and "King Kampana," age 21;

Alejandro Ivan Rodriguez, a/k/a "Sombra" and "King Sombra," age 32;

Nelson Santos, a/k/a "Nelly" and "King Nelly," age 26;

Chinua Shepperdson, a/k/a "Nu," "NuNu" and "King Nu," age 27;

Brandon Smith, a/k/a "Little One" and "King Little One," age 25; and

Hugo Soto-Moran, a/k/a "Vision" and "King Vision," age 22.

The defendants face a maximum sentence of life in prison. The defendants are scheduled to have their initial appearance in U.S. District Court in Greenbelt today starting at 11:00 a.m. One defendant, Remy Heath, is a fugitive.

An indictment is not a finding of guilt. An individual charged by indictment is presumed innocent unless and until proven guilty.

The case is being prosecuted by Assistant U.S. Attorneys Emily Glatfelter and David Salem, and Trial Attorney Lara M. Peirce of the Criminal Division’s Gang Unit. The case is being investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives; U.S. Immigration and Customs Enforcement; the Montgomery County Police Department; Montgomery County State’s Attorney Office; the Prince George’s County Police Department; Prince George’s County State’s Attorney Office; the New York City Police Department; the Gaithersburg Police Department; the Montgomery County Sheriff’s Office; the Prince George’s County Sheriff’s Office; the Maryland National Capital Park Police - Prince George’s County Division; the Maryland State Police; the U.S. Secret Service; and the Internal Revenue Service - Criminal Investigation.  

Latin Kings Indictment

WASHINGTON - The United States secured $2.4 billion in settlements and judgments in cases involving fraud against the government in the fiscal year ending Sept. 30, 2009, the Justice Department announced today. This represents the second largest annual recovery of civil fraud claims in history, and brings total recoveries since 1986, when Congress substantially strengthened the civil False Claims Act, to more than $24 billion.

"Rooting out fraud and safeguarding taxpayers from illegal conduct are among the Justice Department’s highest priorities," said Tony West, the Assistant Attorney General for the Civil Division. "I applaud the dedication of the public servants who investigate and prosecute fraud, and the courage of the many private citizens who risk their careers by reporting fraud."

Assistant Attorney General West continued, "The cases that the department pursued this year illustrate the government’s commitment to maintaining the integrity of the health care system, ensuring that members of our military and law enforcement community are safe, and protecting consumers from fraudulent schemes. The extraordinary success of this public-private partnership goes far beyond the $2.4 billion recovered to additional billions saved through deterrence and vigilance."

Assistant Attorney General West also commended the substantial efforts of the federal and state agencies that investigate and support these matters. "We are grateful for the dedication of other federal agencies and the state attorneys general and Medicaid Fraud Control Units. This cooperation allows us to bring all of our resources to bear in combating fraud against both the federal and state governments."

The government’s partnership with private citizens in the fight against fraud was cemented in 1986, when Congress amended the False Claims Act, the United States’ primary tool against government fraud. The amendments strengthened the act by, among other things, revising the statute’s qui tam provisions, which were intended to encourage whistleblowers to come forward with allegations of fraud. The 1986 amendments reduced the barriers to citizens suing on behalf of the government and increased the incentives to filing such suits. Assistant Attorney General West paid tribute to the amendments’ sponsors, Senator Charles Grassley and Representative Howard L. Berman. "Without Congress’ support in enacting this important legislation," the Assistant Attorney General explained, "recovering the billions of taxpayer dollars lost through fraud since 1986 would not have been possible."

Assistant Attorney General West further expressed his gratitude to Senators Grassley and Patrick J. Leahy and Representative Berman for their support of the Fraud Enforcement and Recovery Act of 2009, which made additional improvements to the False Claims Act and other fraud statutes. Noting that several courts had narrowed the scope of the False Claims Act, the Assistant Attorney General stated, "The 2009 amendments clarify the act and give the Justice Department a powerful tool in its efforts to pursue those who cause losses to the United States and harm to taxpayers."

Of the $2.4 billion in settlements and judgments obtained in fiscal year 2009, nearly $2 billion was recovered in lawsuits filed under the False Claims Act’s qui tam provisions. These provisions authorize private persons, known as "relators," to file suit on behalf of the United States against those who have falsely or fraudulently claimed federal funds. Such cases run the gamut of federally funded programs, from Medicare and Medicaid to defense and other government procurement contracts, federally insured mortgage and other federal housing programs, disaster assistance loans, agricultural subsidies and more. Persons who knowingly make false claims for federal funds are liable for three times the government’s loss plus a civil penalty of $5,500 to $11,000 for each claim. Relators recover 15 to 25 percent of the proceeds of a successful suit if the United States intervenes in the qui tam action, and up to 30 percent if the United States declines and the relator pursues the action alone. In fiscal year 2009, relators were awarded $255 million. (This figure does not include relator shares awarded after Sept. 30, 2009.)

Fiscal year 2009 settlements include two records, both triggered by qui tam suits. In a record settlement of federal Medicaid claims, the state of New York and New York City agreed to pay the United States $540 million. And in a record settlement in a General Services Administration defective pricing case, NetApp Inc. and NetApp U.S. Public Sector Inc. paid the government $128.7 million.

A top priority for this administration is fighting health care fraud. On May 20, 2009, the Attorney General and the Secretary of the Department of Health and Human Services (HHS) announced the creation of a new interagency task force, the Health Care Fraud Prevention and Enforcement Team (HEAT), to increase coordination and optimize criminal and civil enforcement. These efforts not only protect the Medicare Trust Fund for seniors and the Medicaid program for the country’s neediest citizens, they result in higher quality health care at a more reasonable price.

In fiscal year 2009, health care fraud recoveries reached $1.6 billion, two-thirds of the year’s total. The Department of Health and Human Services reaped the biggest recoveries, largely attributable to its Medicare and Medicaid programs. Recoveries were also made by the Office of Personnel Management, which administers the Federal Employees Health Benefits Program, the Department of Defense for its TRICARE insurance program and the Department of Veterans Affairs, among others.

The largest health care recoveries came from the pharmaceutical and medical device industries, which accounted for $866.7 million in settlements, including Aventis Pharmaceuticals Inc., Bayer HealthCare LLC, Eli Lilly & Company and Quest Diagnostics Inc. and its subsidiary, Nichols Institute Diagnostics Inc. In addition to federal recoveries, these pharmaceutical and medical device fraud cases returned $402 million to state Medicaid programs.

The Civil Division’s investigation of the pharmaceutical industry is part of a department-wide effort. The Civil Division is pursuing allegations of a variety of schemes, including "off-label" marketing, which is the illegal promotion of drugs or devices that are billed to Medicare and other federal health care programs for uses that were neither found safe and effective by the Food and Drug Administration (FDA) nor supported by the medical literature; paying kickbacks to physicians, wholesalers and pharmacies to induce drug or device purchases; establishing inflated drug prices knowing that federal health care programs use these prices to reimburse providers, then marketing the "spread" between the federal reimbursement and the provider’s lower cost to induce drug purchases; and knowingly failing to report the company’s true "best price" for a drug in order to reduce rebates owed to the Medicaid program.

Procurement fraud accounted for a quarter of fiscal year 2009 recoveries with $608.4 million in settlements and judgments, including $422 million attributable to Department of Defense contracts. Of that amount, $59 million related to contracts in support of the wars in Iraq and Afghanistan, including two settlements with The Boeing Company totaling $27 million and a $26.3 million settlement with APL Limited. This brings settlements and judgments in procurement fraud cases involving the wars in Southwest Asia to a total of $76 million, with many matters still pending.

WASHINGTON - Husband and wife, Albert Martin and Lorraine Martin of Woonsocket, R.I., were sentenced to prison today for committing tax evasion and conspiring to defraud the United States, the Justice Department and Internal Revenue Service (IRS) announced. Chief Judge Mary M. Lisi of the District of Rhode Island sentenced Albert Martin to 51 months in prison and three years of supervised release. The judge sentenced Lorraine Martin to one year and one day in prison and three years of supervised release. In addition to the prison terms, Judge Lisi ordered Albert and Lorraine Martin to pay restitution to the U.S. Treasury in the amount of $463,988.

In March 2009, a federal jury in Providence convicted the Martins and co-defendant Bruce Lapierre of conspiracy to defraud the United States and two counts each of tax evasion. According to the indictment and evidence introduced during the trial, Lapierre and Albert Martin owned and operated a Woonsocket-based machine shop from which they earned substantial income. From 1997 to 2004, the defendants engaged in an elaborate scheme to conceal from the IRS income that they earned through Classic Machine, and thus avoid paying taxes on that income. Rather than open business accounts for depositing business receipts and income, they allegedly used Lorraine Martin’s personal account to conceal business receipts, as well as an anonymous "private" banking service designed to conceal income from the IRS.

The evidence also showed that the defendants, in order to further conceal their assets and income from the IRS, used multiple business names, such as Banner Technologies, Circle Machine, Preferred Enterprises and Royal Enterprises, to conduct the machine shop business. The defendants also made extensive use of cash and money orders. For example, they allegedly cashed checks under $10,000 in order to avoid federal Currency Transaction Reports, which are required for currency transactions of $10,000 or more.

In October 2009, Judge Lisi sentenced Lapierre to 51 months in prison for his role in the scheme.

Acting Assistant Attorney General John A. DiCicco thanked the U.S. Attorney’s Office for the District of Rhode Island for their assistance in the prosecution of the case. Acting Assistant Attorney General DiCicco commended the IRS Special Agents who investigated the case, as well as Tax Division Trial Attorneys John Kane and Jorge Almonte who prosecuted the case.

Detroit resident Jaquita Lovelace and Miami resident Timothy Pierce have pleaded guilty in U.S. District Court in Detroit to participating in conspiracies to defraud the Medicare program.

Pierce, 42, pleaded guilty to conspiracy to commit health care fraud today before U.S. District Judge Denise Page Hood, and Lovelace, 30, pleaded guilty to conspiracy to commit health care fraud on Tuesday, Nov. 17, 2009, before U.S. District Judge Sean F. Cox.

In her plea, Lovelace, a licensed occupational therapist, admitted that she began working in approximately September 2005 as a contract therapist for co-conspirator Suresh Chand, who entered a guilty plea in the same case in September. Chand owned and controlled several companies operating in the Detroit area that purported to provide physical and occupational therapy services to Medicare beneficiaries. Lovelace admitted that she, Chand and others created fictitious therapy files appearing to document occupational therapy services provided to Medicare beneficiaries, when in fact no such services had been provided. According to court documents, the fictitious services reflected in the files were billed to Medicare through sham Medicare providers controlled by Chand and other co-conspirators.

Lovelace admitted that her role in creating the fictitious therapy files was to sign documents and progress notes indicating she had provided occupational therapy services to particular Medicare beneficiaries, when in fact she had not. Lovelace was paid between $90 and $110 by Chand per file that she falsified in this manner. Lovelace also admitted that in the course of the scheme charged in the indictment, she signed approximately 544 fictitious occupational therapy files, falsely indicating she had provided occupational therapy services to Medicare beneficiaries. Lovelace admitted she knew that the files she helped falsify were used to justify fraudulent billings to Medicare.

In addition, Lovelace admitted that between approximately September 2005 and October 2006, Chand and his co-conspirators submitted claims to the Medicare program totaling approximately $2,176,000 for files that were falsified by Lovelace. Medicare actually paid approximately $1,088,000 on those claims. Lovelace admitted that throughout the conspiracy, she was fully aware that Medicare was being billed for occupational therapy services she had falsely indicated she had performed.

In his plea today, Pierce admitted that he was hired in March 2006 to recruit, drive and pay kickbacks to Medicare beneficiaries to induce them to go to Dearborn Medical Rehabilitation Center (DMRC), a Dearborn, Mich., infusion clinic. The beneficiaries Pierce admitted to recruiting were paid to sign paperwork indicating that they had received infusions and injections of specialty medications that they did not in fact receive.

Pierce admitted that DMRC routinely billed the Medicare program for services that were medically unnecessary or were never provided. The primary owners and operators of DMRC, co-conspirators of Pierce, purchased only a small fraction of the medications that the clinic billed the Medicare program for providing. Patients were prescribed medications at the clinic based not on medical need, but instead based on which medications were likely to generate Medicare reimbursements.

The cases are being prosecuted by Senior Trial Attorney John K. Neal of the Criminal Division’s Fraud Section and by Special Assistant U.S. Attorney Thomas W. Beimers of the Eastern District of Michigan. The FBI and the HHS Office of Inspector General (HHS-OIG) conducted the investigation. The case was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and 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), and Houston (Phase Four) – the Strike Force has obtained indictments of more than 331 individuals and organizations that collectively have billed the Medicare program for more than $720 million.  In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

Each of the Strike Force teams across the separate phases are led by a federal prosecutor from the Criminal Division’s Fraud Section or the U.S. Attorney’s Office.  Each team has an agent from the FBI and HHS-OIG.

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

 

WASHINGTON – The United States has entered into a settlement with a New Jersey hospital and filed a motion to intervene in a lawsuit against a New York hospital involving allegations that the hospitals defrauded Medicare, the Justice Department announced today.

The United States settled for $3.02 million, plus interest, with Trinitas Regional Medical Center in Elizabeth, N.J. The United States is also seeking to intervene in a lawsuit brought against Brookhaven Memorial Hospital in East Patchogue, N.Y.

Both of the hospitals are defendants in a suit brought by a whistleblower, Tony Kite, in 2005. The lawsuit involved allegations that the hospitals fraudulently inflated their charges to Medicare patients to obtain enhanced reimbursement from Medicare.

In addition to its standard payment system, Medicare provides supplemental reimbursement, called "outlier payments," to hospitals and other health care providers in cases where the cost of care is unusually high. Congress enacted the supplemental outlier payments system to ensure that hospitals possess the incentive to treat inpatients whose care requires unusually high costs. The lawsuit alleged that the hospitals inflated their charges to obtain supplemental outlier payments for cases that were not extraordinarily costly and for which outlier payments should not have been paid.

"As today’s actions demonstrate, the Department of Justice is committed to pursuing those who defraud Medicare and drive up the cost of health care," said Assistant Attorney General Tony West, head of the Justice Department’s Civil Division. Mr. West noted that the settlement and intervention announced today were the result of the collaborative efforts of the Civil Division of the Department of Justice, the U.S. Attorney’s Office for the District of New Jersey, the Office of Inspector General of the Department of Health and Human Services, the Centers for Medicare and Medicaid Services, and the Federal Bureau of Investigation.

"This office is determined to protect the integrity of the Medicare system for the citizens of New Jersey and of the United States," said U.S. Attorney Paul J. Fishman.

Mr. Kite brought his suit under the qui tam or whistleblower provisions of the False Claims Act, which permit private citizens with knowledge of fraud against the government to bring a lawsuit on behalf of the United States and to share in any recovery. Under the civil settlements announced today, Mr. Kite will receive roughly $679,000, plus interest, out of the total recovery against Trinitas Regional Medial Center.

WASHINGTON – Thomas E. Perez, Assistant Attorney General for the Civil Rights Division, announced today that Kristine Lafoe, a former lieutenant and supervisor at the Lexington-Fayette County Detention Center (FCDC), was sentenced in federal court for her role in covering up systematic detainee abuse. Lafoe was sentenced in Lexington, Ken., by Federal Judge Karen K. Caldwell, to serve one year in prison and two years of supervised release.

Lafoe pleaded guilty on May 14, 2009, to a charge of conspiring to obstruct justice for her role in concealing abuses at FCDC. According to the plea proceeding and documents filed in court, Lafoe, who supervised the midnight intake shift at the FCDC, admitted that between January and October 2006, she instructed officers under her command to falsify reports by using inaccurate language to describe uses of force, so that the physical abuse of detainees would sound innocuous and justifiable. As a supervisor, Lafoe then reviewed these false reports and submitted them to her supervisors, knowing that the reports would conceal and cover up detainee abuse and would obstruct any federal investigations of the abuse. Lafoe admitted that her actions allowed officers under her command to continue abusing detainees with impunity.

"Law enforcement officers who abuse their power undermine public safety and the public trust, and they make the work of law enforcement all the more difficult," said Assistant Attorney General Perez. "As we’ve shown in this case, we will vigorously prosecute officers who engage in acts of criminal misconduct."

The defendant’s conviction resulted from the investigative work of the FBI’s Louisville Division and the Civil Rights Division. The case was prosecuted by division attorneys Jared Fishman and Benjamin Hawk.

WASHINGTON – Attorney General Eric Holder, Treasury Secretary Tim Geithner, Housing and Urban Development (HUD) Secretary Shaun Donovan, and Securities and Exchange Commission (SEC) Chairwoman Mary Schapiro today announced that President Barack Obama has established by Executive Order an interagency Financial Fraud Enforcement Task Force to strengthen efforts to combat financial crime. The Department of Justice will lead the task force and the Department of Treasury, HUD and the SEC will serve on the steering committee. The task force’s leadership, along with representatives from a broad range of federal agencies, regulatory authorities and inspectors general, will work with state and local partners to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, address discrimination in the lending and financial markets and recover proceeds for victims.

The task force, which replaces the Corporate Fraud Task Force established in 2002, will build upon efforts already underway to combat mortgage, securities and corporate fraud by increasing coordination and fully utilizing the resources and expertise of the government’s law enforcement and regulatory apparatus. The attorney general will convene the first meeting of the Task Force in the next 30 days.

"This task force’s mission is not just to hold accountable those who helped bring about the last financial meltdown, but to prevent another meltdown from happening," Attorney General Eric Holder said. "We will be relentless in our investigation of corporate and financial wrongdoing, and will not hesitate to bring charges, where appropriate, for criminal misconduct on the part of businesses and business executives."

"Through the Financial Fraud Task Force, we are making clear that the Obama Administration is going to act aggressively and proactively in a coordinated effort to combat financial fraud," said Treasury Secretary Geithner. "It’s not enough to prosecute fraud only after it’s become widespread. We can’t wait for problems to peak before we respond. We’re seeking comprehensive financial reform to create a more stable, safer financial system and stepping up our enforcement strategy. Doing so will help to stop emerging trends in financial fraud before they’re able to cause extensive, system-wide damage to our economy."

"To give American families the protection and peace-of-mind they need, it’s clear the federal response must be as interconnected and multi-dimensional as the challenges we face," said HUD Secretary Shaun Donovan. "No one agency is going to be able to stop financial fraud. This Task force will build upon many of the inter-agency collaborations already underway to protect consumers and restore confidence."

"Many financial frauds are complicated puzzles that require painstaking efforts to piece together.  By formally coordinating our efforts, we will be better able to identify the pieces, assemble the puzzle and put an end to the fraud," said SEC Chairman Mary Schapiro.

The task force is composed of senior-level officials from the following departments, agencies and offices:

• the Department of Justice;
• the Department of the Treasury;
• the Department of Commerce;
• the Department of Labor;
• the Department of Housing and Urban Development;
• the Department of Education;
• the Department of Homeland Security;
• the Securities and Exchange Commission;
• the Commodity Futures Trading Commission;
• the Federal Trade Commission;
• the Federal Deposit Insurance Corporation;
• the Board of Governors of the Federal Reserve System;
• the Federal Housing Finance Agency;
• the Office of Thrift Supervision;
• the Office of the Comptroller of the Currency;
• the Small Business Administration;
• the Federal Bureau of Investigation;
• the Social Security Administration;
• the Internal Revenue Service, Criminal Investigations;
• the Financial Crimes Enforcement Network;
• the United States Postal Inspection Service;
• the United States Secret Service;
• the United States Immigration and Customs Enforcement;
• relevant Offices of Inspectors General and related Federal entities, including without limitation the Office of the Inspector General for the Department of Housing and Urban Development, the Recovery Accountability and Transparency Board and the Office of the Special Inspector General for the Troubled Asset Relief Program; and
• such other executive branch departments, agencies, or offices as the President may, from time to time, designate or that the Attorney General may invite.

In addition, the attorney general will invite representatives of the National Association of Attorneys General, the National District Attorneys Association and other state, local, tribal and territorial representatives to participate in the task force through its Enforcement Committee.

Read the Executive Order

WASHINGTON – Consuelo Carreto Valencia, a member of the Carreto family sex trafficking ring that operated between Mexico and Queens, N.Y., was sentenced to 121 months in prison for benefitting financially from her participation in the organization, which transported young Mexican women to the United States and forced them into prostitution. The sentencing proceeding was held today before U.S. District Judge Frederic Block at the U.S. Courthouse in Brooklyn, N.Y.

The sentence was announced by Thomas E. Perez, Assistant Attorney General for the Civil Rights Division, U.S. Department of Justice; Benton J. Campbell, U.S. Attorney for the Eastern District of New York; and John Morton, Assistant Secretary, Immigration and Customs Enforcement, Department of Homeland Security (ICE).

From 1991 through 2004, Carreto Valencia served as a manager in her family’s sex trafficking operation based in Tenancingo, Tlaxcala, Mexico. She and her sons, Josue Flores Carreto and Gerardo Flores Carreto, and others, recruited young, uneducated women and girls from impoverished areas of Mexico and used or approved of a combination of deception, fraud, threats and physical violence – including rape and coerced abortion – to force them to prostitute themselves in brothels throughout the New York City metropolitan area, including Queens and Brooklyn. Carreto Valencia and her family made hundreds of thousands of dollars in prostitution profits, while the victims, who had been separated from their families in Mexico, received next to nothing.

At her guilty plea hearing on July 22, 2008, Carreto Valencia admitted that while living in Mexico, she received wire transfers of money from New York, fully aware that they were the proceeds of acts of prostitution performed by women who had been recruited and smuggled into the United States by her sons and others. She also admitted that she knew that the young women had been forced into prostitution in the United States.

"The victims in this case were robbed of their freedom, their dignity and their human rights. This case should send a clear message to those who abuse the rights of innocent individuals for their own profit that the federal government will be there to bring the perpetrators to justice," said Assistant Attorney General Perez.

"It is unconscionable in this day and age that there are persons who would hold other human beings in conditions of servitude and force them into lives of prostitution in order to line their own pockets," stated U.S. Attorney Campbell. "As this case demonstrates, sex traffickers operating from abroad should be on notice that they will find no refuge from reach of United States law enforcement." Mr. Campbell extended his grateful appreciation to the agencies and individuals in the United States and abroad who assisted in the investigation.

"Even as Carreto Valencia heads to prison, there are still criminals coercing and trafficking young women and children into prostitution," said ICE Assistant Secretary Morton. "This case attests to the commitment of ICE and its law enforcement partners to insure that there is no safe haven for those who seek to endanger and dehumanize innocent women and children."

Previously, in April 2006, Josue Flores Carreto, Gerardo Flores Carreto and co-defendant Daniel Perez Alonso were sentenced to terms of 50, 50 and 25 years in prison, respectively, following their guilty pleas in April 2005. Carreto Valencia was extradited to the United States from Mexico in January 2007 to face the charges against her.

The government’s case is being prosecuted by Assistant U.S. Attorney Monica E. Ryan and Hilary Axam, Acting Director of the Human Trafficking Prosecution Unit of the U.S. Department of Justice Civil Rights Division.

The case was investigated by Special Agents from the ICE New York Office with assistance provided by ICE Special Agents from the New Jersey and Mexico City offices; the New York City Police Department; the State Department’s Office to Monitor and Combat Trafficking in Persons; officials at the U.S. Embassy in Mexico City; and officials of the Mexican Prosecutor General of the Republic.

WASHINGTON — The Department of Justice announced today that it will require Cameron International Corp. to divest certain assets used in the production and sale of desalters for use in the oil refining industry in order to proceed with its acquisition of NATCO Group Inc., currently valued at approximately $980 million. The Department said that the deal as originally proposed would substantially lessen competition in the manufacture of refinery desalters in the United States, resulting in higher prices and reduced quality, service and innovation. The Department said that the divestitures also remedy the harm to competition caused by Cameron’s 2005 acquisition of certain assets from Howe Baker Engineers Ltd.

The Department’s Antitrust Division filed a civil lawsuit today in U.S. District Court for the District of Columbia to block the proposed acquisition of NATCO by Cameron and to remedy the loss to competition created by Cameron’s 2005 acquisition of certain assets of Howe Baker. At the same time, the Department filed a proposed settlement that, if approved by the court, would resolve the competitive concern alleged in the lawsuit.

Refinery desalters are used to remove salt from crude oil at the oil refining stage of production. Desalting is a critical initial stage of the refining process. Currently, Cameron and NATCO, a recent entrant, are each other’s closest competitor for a significant set of refinery customers in the United States.

According to the complaint, Cameron’s $8.25 million acquisition of the Howe Baker assets in 2005 reduced from two to one the number of sellers of refinery desalters in the United States. Under the proposed settlement, Cameron will divest the desalter and dehydrator assets purchased from Howe Baker (the EDGE business), and all related tangible and intangible assets. It will also divest a non-exclusive license to certain NATCO technology related to refinery desalters, which utilizes dual frequency transformers. This dual frequency license may be used worldwide for the development, production, sale, and service of refinery desalters using this technology.

"These divestitures are necessary to preserve the benefits of competition for refinery customers in the United States," said Christine A. Varney, Assistant Attorney General in charge of the Department’s Antitrust Division.

Cameron is incorporated in Delaware with its principal place of business in Houston. Cameron is a worldwide provider of products, systems and services used to the oil, gas and process industries. Cameron is the leading U.S. supplier of customized refinery desalters. Cameron had U.S. sales of approximately $10 million for desalters in 2008.

NATCO is also incorporated in Delaware with its principal place of business in Houston. NATCO is a worldwide provider of equipment, systems and services used to separate oil, gas and water in oil and gas production and refinery facilities around the world. After Cameron, NATCO is currently the most significant U.S. supplier of refinery desalters. NATCO had U.S. sales of approximately $10.5 million for desalters in 2008.

As required by the Tunney Act, the proposed settlement will be published in the Federal Register. Any person may submit written comments concerning the proposed settlement during a 60-day comment period to Maribeth Petrizzi, Chief, Litigation II Section, Antitrust Division, U.S. Department of Justice, 450 Fifth Street, N.W., Suite 8700, Washington, D.C. 20530. At the conclusion of the 60-day comment period, the U.S. District Court for the District of Columbia may enter the proposed Final Judgment upon finding that it is in the public interest.

WASHINGTON –  Deputy Attorney General David W. Ogden released the following statement regarding the announcement today by the Department of Justice and the Internal Revenue (IRS) regarding the results arising from previous settlements of civil and criminal cases against Swiss banking giant UBS AG.  The Justice Department and IRS announced that over 14,700 taxpayers have come forward to report previously-undisclosed foreign bank accounts under the voluntary disclosure program the IRS implemented following the settlement. This figure represents almost double the initial numbers the IRS announced in October and dwarfs the number of voluntary disclosures received in 2008.

"The Department of Justice is pleased with the extraordinary results achieved from this landmark settlement," said Deputy Attorney General Ogden. "The message to American taxpayers is clear: the era of bank secrecy and hidden assets is over. We will continue to work closely with the IRS and our international partners to ensure that our tax laws are enforced fully and fairly, and that the rule of law is vindicated. We congratulate the IRS and the Department’s Tax Division, as well as our partners in the Swiss government, for this achievement."

These voluntary disclosures, while extremely significant, are but one more step in the IRS and the Department’s efforts to hold those U.S. taxpayers who have undisclosed foreign accounts responsible for their actions. These efforts began in February 2009, with UBS AG’s agreement to enter into a groundbreaking deferred prosecution agreement, admitting guilt on charges of conspiring to defraud the United States by impeding the IRS. As part of the agreement, UBS immediately provided the United States with the identities of, and account information for, a number of U.S. UBS customers and paid $780 million in fines, penalties, interest, and restitution. The Department's Tax Division worked hand-in-hand with the U.S. Attorney's office in the Southern District of Florida to obtain these unprecedented results.

To date, the Justice Department has successfully prosecuted six U.S. customers of UBS whose information was provided pursuant to the Deferred Prosecution Agreement, and is conducting investigations of dozens of other UBS customers.

In addition to the deferred prosecution agreement, in August of this year, the IRS, the Justice Department, UBS and the Swiss Government, entered into a similarly landmark agreement, in the John Doe summons action, whereby the IRS was to receive thousands of additional undisclosed UBS accounts.

These criminal and civil efforts have, for the first time, breached Swiss bank secrecy and prevented taxpayers from hiding from the IRS regardless of the cross border nature of their accounts.  Within the United States, there has been an unprecedented increase in the number of taxpayers who have come forward to voluntarily disclose the existence of their foreign bank accounts and agree to pay tens of millions of dollars to the treasury.

The Department of Justice and IRS also made public the criteria set out in the settlement reached in the civil John Doe summons suit against UBS, which governed the selection of account holders to be identified as part of the settlement. The criteria cover accounts of various amounts and types, including bank-only accounts, custody accounts in which securities or other investment assets were held and offshore company nominee accounts through which an individual indirectly held beneficial ownership.  These criteria allow the IRS and the Justice Department to target the most egregious foreign account holders.

WASHINGTON – Daniel Melgoza, a Bexar County, Texas, Corrections Officer, was charged today in a four-count federal indictment with violating the civil rights of two detainees and obstructing justice. The charges stem from two December 2004 incidents in which Melgoza, 54, of San Antonio, allegedly assaulted inmates at the Bexar County Detention Center by kicking and striking them. The indictment also charges Melgoza with obstructing justice by providing false statements about the assaults.

An indictment is a formal accusation of criminal conduct, not evidence of guilt. The defendants are presumed innocent unless and until proven guilty.

If convicted, the defendant faces maximum penalties of 10 years imprisonment on each of the civil rights charges and 20 years imprisonment on each of the obstruction charges.

This case was investigated by Special Agent Mirella Rodriguez of the San Antonio Division of the FBI with assistance from the Bexar County Sheriff’s Offiice, and is being prosecuted by Civil Rights Division Trial Attorney Christopher Lomax and Special Litigation Counsel Jeffrey Blumberg.

The United States has joined a whistleblower suit against Public Warehousing Company (PWC), The Sultan Center Food Products Company (TSC), and PWC’s chief executive officer, Tarek Abbul Aziz Sultan Al-Essa, the Justice Department announced today.

The lawsuit, which was filed in the U.S. District Court for the Northern District of Georgia, alleges that since 2003, defendants have violated the False Claims Act by presenting or causing others to present false claims for payment under PWC’s multi-billion contracts with the Defense Logistics Agency to supply food for U.S. service members serving in Kuwait, Iraq and Jordan. The complaint alleges that defendants knowingly overcharged the United States for locally available fresh fruits and vegetables that PWC purchased through TSC. The complaint also alleges that PWC failed to disclose and pass through rebates and discounts it obtained from its U.S.-based suppliers, as required by its contracts.

The case was initially filed under seal by Kamal Mustafa Al-Sultan, the owner of a Kuwaiti company that originally partnered with PWC to submit a proposal on the food supply contracts. The case remained under seal to permit the United States to investigate the allegations and determine whether it would join the lawsuit. Under the False Claims Act, the United States may recover three times the amount of its losses, plus civil penalties.

"We will not tolerate fraudulent practices from those tasked with providing the highest quality support to the men and women who serve in our armed forces," said Tony West, Assistant Attorney General for the Civil Division. "Those who do business with the government must act fairly and in accordance with the law. As this case illustrates, the Department of Justice will investigate and pursue allegations of fraud against contractors and subcontractors, whether they are foreign or domestic."

"The decision to join in this civil lawsuit follows a multi-year probe into abuses in Middle East subsistence prime vendor contracts," said Acting U.S. Attorney F. Gentry Shelnutt. "This Office and the Department of Justice will spare no effort in investigating those persons and companies, regardless of location, who seek to defraud the United States."

The U.S. Attorney’s Office for the Northern District of Georgia also announced today that a grand jury returned a six-count indictment against Public Warehousing Company, also known as Agility, in connection with its prime vendor contracts.

Assistant Attorney General West and Acting U.S. Attorney Shelnutt thanked the joint investigation team, which includes Special Agents with Defense Criminal Investigative Service; the Federal Bureau of Investigation; and U.S. Army Criminal Investigation Command (Army CID), auditors from the Defense Contract Audit Agency, and the Department of Defense, Office of the Inspector General, for the investigation of this defense procurement fraud matter.

Wayne Nelson Corliss, 60, of Union City, N.J., was sentenced to 235 months in prison today in Newark, N.J., on three charges of traveling in foreign commerce with the intent to engage in illicit sexual conduct and a single count each of producing and possessing child pornography.

Corliss was also sentenced today by U.S. District Judge Joseph A. Greenaway to lifetime supervised release to follow his prison term, and was ordered to pay a $5,000 fine. He will be required to register as a sex offender.

Corliss was identified in May 2008 after INTERPOL made a global appeal for any information that could identify a then-unknown male. In that appeal, INTERPOL released a photo to media outlets around the world depicting an individual later identified as Corliss. The likeness in the image distributed by INTERPOL had been cropped from photos depicting Corliss sexually abusing young children in Southeast Asia. As reported by INTERPOL at that time, the images, which were distributed on the Internet, captured the abuse of children as young as six-years-old, and were originally discovered by police in Norway. Within 48 hours of INTERPOL’s global appeal, special agents of the U.S. Immigration and Customs Enforcement (ICE) field offices in Newark and Washington, D.C., coordinating with INTERPOL, the U.S. Attorney’s Office for the District of New Jersey and the Criminal Division’s Child Exploitation & Obscenity Section (CEOS), identified, located and arrested Corliss. He has been in custody since his arrest.

Corliss pleaded guilty on Oct. 28, 2008. In his plea, Corliss admitted he traveled to Thailand each year from 2000 to 2002. In each instance, he admitted, he traveled with the intent to sexually abuse children, paid for unfettered access to children, brought items to facilitate their sexual abuse and actually sexually abused children. Corliss also admitted to sexually abusing children in 2002 in Thailand for the purpose of photographing and videotaping the activity. In addition, Corliss admitted to storing and possessing images of child pornography on his home computers at the time of his arrest in 2008.

Corliss and two other U.S. sex tourists, Burgess Lee Burgess and Mitchell Kent Jackson, allegedly communicated with and were afforded sexual access to children in Thailand by John Wrenshall. Wrenshall was extradited from the United Kingdom and awaits trial in New Jersey on sex tourism and child pornography charges. According to the indictment, Wrenshall had ready access to young Thai boys, some as young as four-years-old, at his Thailand home and provided Corliss, Burgess, Jackson and others with sexual access to those children in exchange for money. Burgess, 45, and Jackson, 32, pleaded guilty on Nov. 6, 2009, in the Southern District of Alabama and were each sentenced to 78 months in prison.

This case was investigated by ICE. The prosecution was handled by Assistant U.S. Attorney Lee Vartan of the U.S. Attorney’s Office for the District of New Jersey and Trial Attorney Michael Yoon of CEOS.

INTERPOL and ICE are partners in the Virtual Global Task Force, an international alliance of law enforcement committed to keeping children safe from child predators.

WASHINGTON- The Justice Department today announced an agreement with the City of Fargo, N.D., to improve access to civic life for persons with disabilities. The agreement was reached under "Project Civic Access," a Justice Department initiative to bring state and local governments into compliance with the Americans with Disabilities Act (ADA). This agreement is the 172nd entered into under the Project Civic Access initiative and the 11th this year.

Project Civic Access was initiated to ensure that individuals with disabilities have an equal opportunity to participate in civic life. As part of the project, department investigators, attorneys and architects survey state and local government facilities and programs throughout the country to identify modifications necessary to comply with ADA requirements. Depending on the circumstances in each community, the agreements address specific areas where access must be improved.

"Individuals with disabilities have the right to expect the same access to civic services and facilities as everyone else. It is the responsibility of public officials to ensure that right is protected," said Assistant Attorney General Thomas E. Perez of the Civil Rights Division. "I commend City officials for making this commitment to provide equal access to City programs, activities, and services for all of its residents."

Under the agreement announced today, the city of Fargo will take several steps to improve access for individuals with disabilities, such as:

• Making physical modifications to its facilities so that parking, routes into the buildings, entrances, public telephones, restrooms, service counters and drinking fountains are accessible to persons with disabilities;
• Posting, publishing and distributing a notice to inform members of the public of the provisions of the ADA and their applicability to the city’s programs, services and activities;
• Adopting a grievance procedure to deal with complaints of disability discrimination;
• Amending its employment policies, as necessary, to comply with the regulations of the U.S. Equal Employment Opportunity Commission implementing the Americans with Disabilities Act;
• Implementing a plan that will provide accessible sidewalks and curb ramps throughout Fargo;
• Ensuring that the city’s official Web site is accessible to persons with disabilities, including individuals who are blind or have low vision;
• Providing information for interested persons with disabilities concerning the existence and location of the city’s accessible services, activities and programs; and
• Installing signs at any inaccessible entrance to a city facility directing members of the public to an accessible entrance or to information about other accessible facilities where services can be obtained.

Today’s agreement was reached under Title II of the ADA, which prohibits discrimination against individuals with disabilities by state and local governments. The agreement will remain in effect for three years. The department will monitor compliance with the agreement until required actions have been completed.

People interested in finding out more about the ADA, today’s agreement with the City of Fargo or the Department’s Project Civic Access initiative may find this information on the ADA website at http://www.ada.gov or may call the toll-free ADA Information Line at (800) 514-0301 or (800) 514-0383 (TTY).

WASHINGTON—Attorney General Eric Holder, Assistant Attorney General Ignacia S. Moreno and hundreds of current and past employees celebrated the 100th anniversary of the Environment and Natural Resources Division today.

 

“The history of the Environment and Natural Resources Division reminds us of the importance of our nation’s public lands and natural resources to the development of this country, and the important role of the division in protecting these resources for future generations,” said Attorney General Holder. “Just as your predecessors in the division helped to preserve public lands and resources for us, your work helps to ensure and preserve a healthier environment for generations to come.”

 

“On this day it is especially appropriate to acknowledge the division’s career employees, who are the heart and soul of the division. You have my greatest respect and admiration and I am thrilled to return to the division to work with you once again,” said Ignacia S. Moreno, Assistant Attorney General for Environment and Natural Resources Division. “We find ourselves at an important juncture in our nation’s history. The challenges we face are significant but I am confident that together we can continue to advance the division’s mission and meet those challenges.”

 

The division was created on Nov. 16, 1909, when Attorney General George Wickersham signed a two-page order creating “The Public Lands Division.” He assigned all cases concerning “enforcement of the Public Land Law” including Indian rights cases to the new division, and transferred a staff of nine—six attorneys and three stenographers—to carry out those responsibilities.

 

As the nation grew and developed, so did the responsibilities of the division and its name changed to the “Environment and Natural Resources Division” to better reflect those responsibilities. Today, the division, which is organized into nine sections, has offices in Washington; Anchorage, Alaska; Boston; Denver; Sacramento, Calif.; San Francisco and Seattle, and a staff of over 600 people. It currently has over 6,000 active cases, and has represented virtually every federal agency in courts all over the United States and its territories and possessions. The cases reflect every aspect of environmental litigation from acquiring lands for national parks, working for cleaner air and water, helping to assure military readiness and protecting wildlife.

 

Additionally, the Environment and Natural Resources Division welcomed its 33rd Assistant Attorney General today as Ignacia S. Moreno was sworn in by Attorney General Holder. John C. Cruden has served for the past 10 months as the Division’s Acting Assistant Attorney General.

 

More information about the Environment and Natural Resources Division can be found on its centennial Web site at http://www.justice.gov/enrd/Anniversary/index.html. The division home page is found at http://www.justice.gov/enrd/index.html.

WASHINGTON - An Australian man pleaded guilty today for his role in a scheme to solicit kickbacks in connection with the award of a private security services subcontract to protect U.S. government personnel and contractors in Afghanistan, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division, Assistant Attorney General Christine A. Varney of the Antitrust Division and U.S. Attorney Neil H. MacBride of the Eastern District of Virginia. 

Scott Anthony Walker, 36, of Australia, pleaded guilty today before U.S. District Court Judge Gerald Bruce Lee in the Eastern District of Virginia to one count of conspiracy to solicit a kickback. Walker was arrested in the United States on Nov. 11, 2009.

According to court documents, the U.S. Agency for International Development (USAID) is the principal federal U.S. agency that extends assistance to countries recovering from disaster, trying to escape poverty and engaging in democratic reforms.  The agency works to support long-term and equitable economic growth and advance U.S. foreign policy objectives. 

In August 2006, USAID awarded a $1.4 billion contract known as the Afghanistan Infrastructure Rehabilitation Project (the AIRP contract).  The AIRP contract required the award of numerous subcontracts, including for the provision of security services to protect AIRP workers.  According to court documents, from at least February 2009 until he was terminated in June 2009, Walker worked in Kabul, Afghanistan, as a country security coordinator for the AIRP prime contractor. Walker admitted that he conspired with Bryan Lee Burrows and others to solicit kickbacks from private security vendors in return for favorable treatment for those potential bidders for one or more subcontracts. According to court documents, the subcontracts provided for private security services to protect USAID personnel and contractors in Afghanistan operating under the AIRP contract.

Burrows pleaded guilty on Sept. 2, 2009, to one count of conspiracy to solicit a kickback. Sentencing of Burrows is currently scheduled for Dec. 18, 2009.

The conspiracy charge carries a maximum penalty of five years in prison and a maximum fine of $250,000.  The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum.  Sentencing for Walker has been scheduled for Feb. 5, 2010.

The case is being prosecuted by Trial Attorney Bradford Geyer of the Criminal Division’s Fraud Section, Trial Attorneys Kimberly A. Justice and Joseph Muoio of the Antitrust Division’s Philadelphia Field Office and Assistant U.S. Attorney Timothy D. Belevetz of the U.S. Attorney’s Office for the Eastern District of Virginia.  The investigation is being conducted by USAID’s Office of Inspector General as well as members of the National Procurement Fraud Task Force and the International Contract Corruption Task Force (ICCTF).

The National Procurement Fraud Task Force, created in October 2006 by the Department of Justice, was designed to promote the early detection, identification, prevention and prosecution of procurement fraud associated with the increase in government contracting activity for national security and other government programs. The ICCTF is a joint law enforcement agency task force that seeks to detect, investigate and dismantle corruption and contract fraud resulting from U.S. Overseas Contingency Operations, including in Afghanistan, Iraq and Kuwait.

Richard Hendryx, 79, of Morristown, Ariz., was sentenced today to two years in prison and lifetime supervised release to follow his prison term for travel with intent to engage in sex with minors. 

Hendryx was charged on May 6, 2008, with one count of travel with intent to engage in a sexual act with a minor and two counts of distribution of child pornography. The charges were brought after Hendryx arrived at a prearranged meeting spot and paid to go on what he believed to be a tour of Mexico that would offer him an opportunity to have sex with two boys under the age of 11. In reality, the tour was an undercover operation run by U.S. Immigration and Customs Enforcement (ICE).

Hendryx pleaded guilty to the charge against him on Dec. 29, 2008. As part of his plea agreement, Hendryx admitted to arranging and paying to be taken to Mexico in order to have sex with two boys aged eight and 10 years.

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

The case was prosecuted by Trial Attorney James Silver of CEOS, with assistance from Senior Litigation Counsel Vincent Q. Kirby and Assistant U.S. Attorney Sharon K. Sexton of the District of Arizona.  ICE conducted the investigation.

 

WASHINGTON – Charles Paul Edward Jumet of Fluvanna County, Va., pleaded guilty today in connection with his role in a conspiracy to pay bribes to Panamanian government officials to secure a maritime contract, announced Assistant Attorney General of the Criminal Division Lanny A. Breuer, U.S. Attorney for the Eastern District of Virginia Neil H. MacBride, Joseph Persichini Jr., Assistant Director-in-Charge of the FBI’s Washington Field Office, Jennifer Smith Love, Special Agent-in-Charge of the FBI’s Richmond Field Office and James A. Dinkins, Special Agent-in-Charge of U.S. Immigration and Customs Enforcement’s (ICE) Office of Investigation, Washington.

Jumet, 53, pleaded guilty before U.S. Magistrate Judge Dennis W. Dohnal in Richmond, Va., to a two-count information charging him with conspiring to make corrupt payments to foreign government officials for the purpose of securing business for Ports Engineering Consultants Corporation (PECC) in violation of the Foreign Corrupt Practices Act (FCPA); and making a false statement.

PECC, a company incorporated under the laws of Panama, was affiliated with Overman Associates, an engineering firm based in Virginia Beach, Va. According to Jumet’s plea, PECC was created so Jumet, Overman Associates and others could corruptly obtain a maritime contract from the Panamanian government.

According to court documents, Jumet was involved in a conspiracy to pay money secretly to Panamanian government officials for awarding PECC contracts to maintain lighthouses and buoys along Panama’s waterway. In December 1997, the Panamanian government awarded PECC a no-bid, 20-year concession to perform these duties. In exchange for the concession, Jumet and others authorized corrupt payments to the Panamanian government officials.

In 2000, Panama’s Comptroller General’s Office suspended the contract while it investigated the government’s decision to award PECC a contract without soliciting any bids from other firms. In 2003, the Panama government resumed making payments to PECC.

In connection with his guilty plea, Jumet admitted that from at least 1997 through approximately July 2003, he and others conspired to make corrupt payments totaling more than $200,000 to the former administrator and deputy administrator of Panama’s National Maritime Ports Authority and to a former, high-ranking elected executive official of the Republic of Panama.

In his guilty plea, Jumet also admitted that he knowingly made a false statement to federal agents about a December 1997 "dividend" check payable to the bearer in the amount of $18,000, which was endorsed and deposited into an account belonging to the former, high-ranking elected executive official. Jumet admitted that he had falsely claimed that this "dividend" check was a donation for the high-ranking official’s re-election campaign. Jumet also admitted that the "dividend" check was in fact given to the former official as a corrupt payment for allowing PECC to receive the contract from the Panamanian government.

As part of his plea agreement, Jumet has agreed to cooperate with the Department of Justice in its ongoing investigation. The conspiracy count carries a maximum penalty of five years in prison and a fine of the greater of $250,000 or twice the gross gain or loss from the scheme. The false statement count carries a maximum penalty of five years in prison and a fine of $250,000. Sentencing is scheduled for Feb. 12, 2010.

The case was prosecuted by Trial Attorney Rina Tucker Harris of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Michael S. Dry of the U.S. Attorney’s Office for the Eastern District of Virginia. The case was investigated by the FBI’s Washington Field Office, the FBI’s Richmond Field Office and ICE’s Office of Investigation, Richmond and Washington.

WASHINGTON – Rohullah Farooqi Lodin and Hashmatullah Farooqi were each sentenced today in Alexandria, Va., to four years in prison for their roles in a scheme to offer $1 million in bribes to a U.S. Army contracting official in Afghanistan, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division and U.S. Attorney Neil H. MacBride of the Eastern District of Virginia.

U.S. District Court Judge Liam O’Grady also sentenced Lodin, 48, from Irvine, Calif., and Farooqi, 38, from New York City, to each serve three years of supervised release following their prison term and ordered each to pay a $30,000 fine. Lodin and Farooqi, both dual Afghan/U.S. citizens, each pleaded guilty on Aug. 7, 2009, to one count of offering to bribe a public official.

The U.S. Army in Afghanistan is responsible for the Commander’s Emergency Response Program (CERP), which enables U.S. Army commanders in Afghanistan to use U.S. monies to fund humanitarian relief and reconstruction projects, including road construction, in that country. According to court documents, in 2009, the U.S. Army solicited bids from contractors to design and build a road in Logar Province, Afghanistan (the Logar Road Contract). The U.S. Army received numerous bids on the Logar Road Contract, including $18 million bids each from National General Construction Company (NGCC) and Hamed Lais Group (Hamed Lais), both general contracting firms in Afghanistan that Lodin and Farooqi claimed to represent.

Lodin and Farooqi admitted that on at least four occasions in May 2009, they met with an Army captain who was the public official responsible for managing the CERP in Logar Province. Lodin and Farooqi admitted they told the Army captain that they represented NGCC and Hamed Lais and were interested in securing the Logar Road Contract. Lodin and Farooqi admitted they offered the Army captain $1 million in bribes if he agreed to assist in disqualifying lower bidders on the Logar Road Contract and influence the award of the contract to NGCC and Hamed Lais.

Lodin and Farooqi admitted they stated they had political connections, and that to facilitate the award of the Logar Road Contract to NGCC and Hamed Lais, they could arrange for the blacklisting of lower priced bidders currently ranked ahead of their bid. Lodin and Farooqi admitted they had numerous conversations with the Army captain and discussed the following options for paying him to influence the award of the Logar Road Contract: they stated they could wire the Army captain $1 million through Dubai or Bangkok to a bank account; they offered to pay the Army captain $500,000 out of the first payment under the contract and $500,000 at the conclusion of the contract; and they offered to pay the Army captain $200,000 of the $1 million in cash before the award of the contract.

The case is being prosecuted by Special Assistant U.S. Attorney Steve A. Linick, Deputy Chief of the Criminal Division’s Fraud Section, and Fraud Section Trial Attorney James J. Graham. The investigation is being conducted by the FBI; the U.S. Army Criminal Investigative Division; the Special Inspector General for Afghanistan Reconstruction (SIGAR); the Defense Criminal Investigative Service; and members of the National Procurement Fraud Task Force and the International Contract Corruption Task Force (ICCTF).

The National Procurement Fraud Task Force, created in October 2006 by the Department of Justice, was designed to promote the early detection, identification, prevention and prosecution of procurement fraud associated with the increase in government contracting activity for national security and other government programs. The ICCTF is a joint law enforcement agency task force that seeks to detect, investigate and dismantle corruption and contract fraud resulting from U.S. Overseas Contingency Operations, including in Afghanistan, Iraq and Kuwait.

WASHINGTON – The Department of Justice and the U.S. Department of Agriculture (USDA) announced today the dates and locations of joint public workshops that will explore competition and regulatory issues in the agriculture industry. The workshops, which were first announced by Attorney General Eric Holder and Agriculture Secretary Tom Vilsack on Aug. 5, 2009, are the first joint Department of Justice/USDA workshops ever to be held to discuss competition and regulatory issues in the agriculture industry. The all-day workshops, which will begin in March 2010, will be held in Alabama, Colorado, Iowa, Washington, D.C. and Wisconsin.

The goals of the workshops are to promote dialogue among interested parties and foster learning with respect to the appropriate legal and economic analyses of these issues, as well as to listen to and learn from parties with experience in the agriculture sector.

The current schedule for the workshops is as follows:

March 12, 2010 – Issues of Concern to Farmers – Ankeny, Iowa

This event will serve as an introduction to the series of workshops, but also will focus specifically on issues facing crop farmers. Specific areas of focus may include seed technology, vertical integration, market transparency and buyer power.

FFA Enrichment Center

1055 Southwest Prairie Trail Parkway

Ankeny, Iowa

May 21, 2010– Poultry Industry – Normal, Ala.

Specific areas of focus may include production contracts in the poultry industry, concentration and buyer power.

Alabama A&M University

Auditorium, James I. Dawson Cooperative Extension Building

4900 Meridian St.

Normal, Ala.

June 7, 2010– Dairy Industry – Madison, Wisc.

Specific areas of focus may include concentration, marketplace transparency and vertical integration in the dairy industry.

University of Wisconsin

Great Hall, Memorial Union

800 Langdon St.

Madison, Wisc.

Aug. 26, 2010– Livestock Industry – Fort Collins, Colo.

Specific areas of focus will address beef, hog and other animal sectors and may include enforcement of the Packers and Stockyards Act and concentration.

Colorado State University

Fort Collins, Colo.

Dec. 8, 2010– Margins – Washington, D.C.

This workshop will look at the discrepancies between the prices received by farmers and the prices paid by consumers. As a concluding event, discussions from previous workshops will be incorporated into the analysis of agriculture markets nationally.

U.S. Department of Agriculture

Jefferson Auditorium

1400 Independence Ave., S.W.

Washington, D.C.

Each workshop may feature keynote speakers, general expert panels, and break-out panels that will address more narrowly-focused issues. At each workshop, the public will have an opportunity to ask questions and provide comments.

The attendance and participation of the public is encouraged throughout the series of workshops. With the goals of generating further dialogue and understanding the issues, the workshops will involve farmers, ranchers, processors, consumer groups, agribusinesses, government officials and academics. This collection of stakeholders will create a forum for discussion and will ensure various industry perspectives.

The Department of Justice and USDA are also asking for comments in advance of the workshops. Interested parties should submit written comments in both paper and electronic form to the Department of Justice no later than Dec. 31, 2009. All comments received will be publicly posted. Two paper copies should be addressed to the Legal Policy Section, Antitrust Division, U.S. Department of Justice, 450 5th Street, NW, Suite 11700, Washington, D.C. 20001. The electronic version of each comment should be submitted to [email protected].

Additional updates and information, including agendas and speakers, will be posted on the Antitrust Division’s events website at www.justice.gov/atr/events.htm.

Former U.S. Congressman William J. Jefferson, 62, of New Orleans, La., was sentenced today to 13 years in prison, followed by three years of supervised release, for using his office to corruptly solicit bribes. Jefferson was also ordered to forfeit more than $470,000.

"The court’s sentence today reaffirms the principle that all people – no matter what their title or position – are equal before the law," said Principal Deputy Assistant Attorney General Mythili Raman.  "In a stunning betrayal of the public’s trust, former Congressman Jefferson repeatedly used his public office for private gain.  The lengthy prison sentence imposed on Mr. Jefferson today is a stark reminder to all public officials that the consequences of accepting bribes can and will be severe."

"This sentence should be a clear signal that our society will not tolerate bribery; it’s not just another cost of doing business in government," said Neil H. MacBride, U.S. Attorney for the Eastern District of Virginia. "Mr. Jefferson’s repeated attempts to sell his office caused significant damage to the public’s trust in our elected leaders. This sentence will begin to repair that damage and to restore that trust."

On Aug. 5, 2009, Jefferson was convicted by a federal jury in Alexandria, Va., of 11 charged counts, including conspiracy to commit bribery, honest services wire fraud and to violate the Foreign Corrupt Practices Act (FCPA), as well as substantive convictions of bribery, honest services by wire fraud and a violation of the Racketeer Influenced Corrupt Organization Act.  Jefferson was acquitted on three counts of honest services wire fraud, an obstruction of justice charge and of violating the Foreign Corrupt Practices Act. 

According to evidence at trial, from August 2000 to August 2005, Jefferson used his position as an elected member of the U.S. House of Representatives to corruptly seek, solicit and direct that things of value be paid to himself and his family members in exchange for his performance of official acts to advance the interests of people and businesses who offered him the bribes.  The things of value, according to evidence at trial, included hundreds of thousands of dollars worth of bribes in the form of payments from monthly fees or retainers, consulting fees, percentage shares of revenues and profits, flat fees for items sold and stock ownership in the companies seeking his official assistance.

Evidence at trial showed that Jefferson performed a wide range of official acts in return for things of value, including leading official business delegations to Africa, corresponding with U.S. and foreign government officials, and utilizing congressional staff members to promote businesses and businesspersons.  The business ventures that Jefferson sought to promote included telecommunications deals in Nigeria, Ghana and elsewhere; oil concessions in Equatorial Guinea; satellite transmission contracts in Botswana, Equatorial Guinea and the Republic of Congo; and development of different plants and facilities in Nigeria.

Others involved in this scheme included Vernon L. Jackson, a Louisville, Ky., businessman, and Brett M. Pfeffer, a former congressional staff member for Jefferson. Both men pleaded guilty to charges of conspiracy to commit bribery and the payment of bribes to a public official and were sentenced to 87 months and 96 months in prison, respectively.

This case was prosecuted by Assistant U.S. Attorneys Mark D. Lytle and Rebeca H. Bellows of the Eastern District of Virginia and Assistant Chief Charles E. Duross of the Criminal Division’s Fraud Section.  The case was investigated by the FBI’s Washington Field Office, with assistance of the Financial Crimes Enforcement Network.

WASHINGTON - Jeffrey Robert Libman, 42, of Fort Lauderdale, Fla., was sentenced to 87 months in prison today for receiving child pornography, Assistant Attorney General of the Criminal Division Lanny A. Breuer and Acting U.S. Attorney for the Southern District of Florida Jeffrey H. Sloman announced.

Libman was also sentenced by U.S. District Judge Cecilia Altonaga to lifetime supervised release, following his prison term. He was indicted by a grand jury in the Southern District of Florida on April 28, 2009, for child pornography offenses. He pleaded guilty to one count of receipt of child pornography on Sept. 8, 2009. As part of his plea agreement, Libman admitted he received images that depict prepubescent children and children engaged in sadistic or masochistic conduct.

Libman was first identified by the U.S. Postal Inspection Service (USPIS) and the FBI during an investigation of Webe Web Corp., a Florida-based company. According to court documents, during the execution of a search warrant at Libman's residence in Fort Lauderdale, USPIS and FBI seized large volumes of computer media.

Libman, Marc Evan Greenberg and Webe Web Corp. were also indicted in November 2006 in a separate case in the Northern District of Alabama for conspiracy to produce images of child pornography and transportation of images of child pornography. That case is still pending.

An indictment is merely an allegation. Defendants are presumed innocent until and unless proven guilty in a court of law.

The case was prosecuted by Assistant Deputy Chief Alexandra R. Gelber and Trial Attorney Elizabeth M. Yusi of the Criminal Division’s Child Exploitation and Obscenity Section and Assistant U.S. Attorney A. Marie Villafaña of the Southern District of Florida. The case was investigated by USPIS, the FBI and the CEOS’ High Technology Investigative Unit.

WASHINGTON – The Departments of Justice and Defense today announced forum decisions for ten detainees at Guantanamo Bay whose cases were previously charged in military commissions, including five detainees accused of conspiring to commit the Sept. 11, 2001 terror attacks and a detainee accused of orchestrating the attack on the USS Cole.

 

  “Today we announce a step forward in bringing those we believe were responsible for the 9/11 attacks and the attack on the USS Cole to justice,” said Attorney General Eric Holder.  “For over two hundred years, our nation has relied on a faithful adherence to the rule of law to bring criminals to justice and provide accountability to victims.  Once again we will ask our legal system to rise to that challenge, and I am confident it will answer the call with fairness and justice.”

 

            "Bringing terrorists to justice is an integral part of our national security,” said Defense Secretary Robert Gates.  “The reform of Military Commissions and today's announcement are important steps in that direction."

 

The Attorney General, in consultation with the Secretary of Defense, has determined that the United States government will pursue a prosecution in federal court against five detainees who are currently charged in military commissions with conspiring to commit the Sept. 11, 2001 terror attacks, which killed nearly 3,000 individuals.  These detainees are Khalid Sheikh Mohammed, Walid Muhammad Salih Mubarak Bin ‘Attash, Ramzi Binalshibh, Ali Abdul Aziz Ali and Mustafa Ahmed Adam al Hawsawi.

 

The Department of Justice intends to pursue a prosecution against these five individuals in the Southern District of New York as soon as possible.  Prosecution of these detainees will be co-managed by teams from the Southern District of New York and the Eastern District of Virginia.  These detainees will be transferred to the United States for trial after all legal requirements, including a 45-day notice and report to Congress, are satisfied, and consultations with state and local authorities have been completed.  The detainees will be housed in a federal detention facility in New York, which includes maximum security units that have securely held terrorism suspects in the past.   Once federal charges are brought against these detainees, military commission charges now pending against them will be withdrawn. 

 

The Attorney General has also determined, in consultation with the Secretary of Defense, that the prosecutions of five other Guantanamo Bay detainees who were charged in military commissions may be resumed in that forum.  These detainees include the detainee accused of orchestrating the October 2000 attack on the USS Cole, which killed 17 U.S. sailors and injured dozens of others, and a detainee who is accused of participating in an al-Qaeda plot to blow up oil tankers in the Straits of Hormuz.

 

The Attorney General and the Secretary of Defense are confident that detainees now held at Guantanamo Bay can be detained securely in U.S. detention facilities and that their trials can be conducted effectively and safely in the United States, whether in federal court or in a military commission.

 

Over the past decade, the Department of Justice has successfully prosecuted many terrorism defendants in our federal courts.  Today, there are more than 200 inmates who have a history of or nexus to international terrorism, who have been convicted in federal courts, and are now housed securely in Bureau of Prisons facilities.  The Department has already transferred one former Guantanamo Bay detainee, Ahmed Ghailani, to the Southern District of New York to face trial for his alleged role in the 1998 East Africa Embassy bombings.

 

With regard to military commissions, the reforms Congress recently adopted to the Military Commissions Act will ensure that commission trials are fair, effective, and lawful.  Military commissions have been used by the United States to try those who have violated the law of war for more than two centuries.   Further, the U.S. Supreme Court recognized in Hamdan v. Rumsfeld Congress’ power to determine the need for military commissions and to provide their jurisdiction and procedures, and this Congress has recently reiterated its support for commissions in adopting important reforms to the Military Commissions Act. 

 

Finally, the Attorney General and the Secretary of Defense understand and share the concern of the victims of terrorist attacks about the length of time it has taken to bring the perpetrators to justice.  Justice has been delayed far too long.  Prosecutors in both departments are committed to moving forward with all these cases as quickly as possible and to working together to see that justice is served, consistent with our nation’s values.  

 

WASHINGTON—The city of Akron, Ohio, has agreed to make extensive improvements to its sewer system to reduce or eliminate sewage overflows that have long polluted the Cuyahoga River and its tributaries, the Justice Department, U.S. Environmental Protection Agency (EPA) and state of Ohio announced today.

According to a Clean Water Act settlement lodged today in federal court, the city is required to develop and implement a comprehensive plan to reduce or eliminate (i) untreated overflows of sanitary sewage and storm water from its combined sewer system; and (ii) bypasses around secondary treatment at the wastewater treatment plant. The city’s sewage and wastewater discharges flow into the Cuyahoga River, the Little Cuyahoga River, the Ohio Canal and their tributaries and contribute to the impairment of water quality in those waterways. The Cuyahoga River, an American Heritage River, flows through Cuyahoga Valley National Park and the Cleveland metropolitan area, to Lake Erie.

Over the course of the next year, the city will perform extensive analyses to identify appropriate methods of controlling or eliminating these discharges. After an opportunity for public participation, the federal and state governments will evaluate the results and require the city to implement appropriate improvements at various milestones, achieving full operation no later than Oct. 15, 2028.

In addition to the projects identified through the year-long analysis, over the next six years, the city will expand capacity at its wastewater treatment plant to allow for treatment of at least an additional 20 million gallons of wastewater per day. Also, over the next eight years, the city will construct separate sewer lines for five combined sewer outfall points. Finally, the city will engage in comprehensive capacity, maintenance and emergency response programs to improve sewer system performance and to eliminate releases from the sewer collection system, including basement backups, releases into buildings, and onto property.

As part of the settlement, the city will pay a $500,000 civil penalty and provide $900,000 to fund the removal of the Brecksville (Route 82) Dam on the Cuyahoga River, as a state supplemental environmental project. EPA estimates that the dam removal will contribute to a significant improvement in water quality in the Lower Cuyahoga River.

"The federal Clean Water Act requires that cities act to eliminate or reduce their sewage overflows into the nation’s rivers, lakes and oceans," said John C. Cruden, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. "We are pleased that the city of Akron has agreed to take the steps necessary to upgrade its sewer system. These steps will improve water quality in the Cuyahoga River and its tributaries, protect public health, and enhance recreation and other public uses of the River."

"Through this agreement, Akron has shown a serious commitment to address its long-standing sewage overflow problems," said Bharat Mathur, Acting EPA Region 5 Administrator.  "The numerous steps and milestones required in the years ahead will ensure improved water quality for the people of Akron."

"This settlement will lead to significant improvement in the quality of the water flowing into the Cuyahoga River," said Ohio Attorney General Richard Cordray. "It’s a credit to all parties involved that we were able to resolve this difficult problem, but I especially commend the city of Akron for their commitment to improve the environment and the health of the public."

 

The settlement resolves a lawsuit brought by the federal government against the city in February 2009, which the State of Ohio later joined. In that lawsuit, the federal and state governments alleged that the city of Akron illegally discharged from its aging combined sewer system and treatment plant more than one billion gallons of untreated combined sewage and wastewater each year into the Cuyahoga River, the Little Cuyahoga, the Ohio Canal and their tributaries. Among other things, the governments further alleged that on several hundred occasions over the past seven years, failures in the City’s sewer system resulted in releases of sewage into individuals’ homes and property.

The consent decree, lodged in the U.S. District Court for the Northern District of Ohio, is subject to a 60-day public comment period and approval by the federal court. A copy of the consent decree and a summary of the agreement are available on the Justice Department Web site at http://www.justice.gov/enrd/Consent_Decrees.html.

WASHINGTON — Kaiser Foundation Hospitals - Kaiser Sunnyside Medical Center, Kaiser Foundation Health Plan of the Northwest and Northwest Permanente P.C., Physicians & Surgeons (collectively, Kaiser NW) has agreed to pay the United States $1,830,322.41 to settle False Claims Act liability, the Justice Department announced today. The United States contends that Kaiser NW billed Medicare between 2000 and 2004 for hospice services that had been provided by the Kaiser Northwest Region Hospice without obtaining written certifications of terminal illness required under the federal health care program.

Medicare hospice care providers like Kaiser Northwest Region Hospice must obtain written certifications of terminal illness for each hospice beneficiary’s initial certification period (the first 90 days of care) from the medical director of the hospice and the individual beneficiary’s attending physician, if the beneficiary has one. Medicare requires a hospice to obtain these certifications prior to billing Medicare in order to help ensure that hospice care is medically necessary.

In June 2005, Kaiser NW submitted a report to the Department of Health and Human Service’s Office of Inspector General disclosing that between October 2000 and March 2004, there were instances in which Kaiser NW did not obtain written certifications of terminal illness for hospice beneficiaries prior to billing Medicare for the beneficiaries’ initial certification period. The settlement announced today resulted from the company’s disclosure.

"By requiring that health care providers comply with Medicare’s standards, we ensure that beneficiaries receive hospice care that is medically necessary and meets appropriate medical standards," said Tony West, Assistant Attorney General for the Justice Department’s Civil Division. "We encourage disclosures of this nature and we consider them essential to ensuring the protection of the Medicare Trust Fund."

"This settlement furthers the strong public interest in protecting the integrity of the Medicare program and ensuring the appropriateness of hospice care for Medicare beneficiaries," said Kent Robinson, Acting U.S. Attorney for the District of Oregon.

The case was handled by the Justice Department’s Civil Division, the Acting U.S. Attorney for the District of Oregon and the Office of Inspector General of the Department of Health and Human Services.

WASHINGTON – The Justice Department announced it has filed a lawsuit today in federal court for the Eastern District of Missouri alleging a pattern or practice of violations of the Fair Housing Act by the owner and managers of Forum Manor Apartments, a federally-subsidized apartment complex, for refusing to rent to African-Americans and males, refusing to allow tenants to have African-American visitors, sexually harassing female tenants and retaliating against tenants who complained about such discrimination.

The lawsuit alleges that Roger Harris, the manager of Forum Manor Apartments, refused to rent to African-Americans. According to the court documents, Harris told a prospective tenant, "I don't rent to people who look like you," or words to that effect. The suit further alleges that Harris repeatedly sexually harassed and intimidated female tenants and refused to rent to males. The suit also names as defendants Hediger Enterprises Inc., Forum Manor Associates L.P., and Forum Manor LLC, which jointly own and manage Forum Manor.

"No one should be denied an apartment because of their race or sex, nor should a woman have to fear harassment by the landlord who holds a key to her home," said Thomas E. Perez, Assistant Attorney General for the Justice Department’s Civil Rights Division. "The Justice Department will vigorously enforce the nation’s civil rights laws to combat all types of discrimination."

This lawsuit arose as a result of complaints filed with the U.S. Department of Housing and Urban Development (HUD) by four tenants. After an investigation of the complaint, HUD issued a charge of discrimination and, after complainants elected to have the case heard in federal court, referred the case to Justice Department. The suit alleges that the defendants engaged in a pattern or practice of discrimination and seeks a court order prohibiting future discrimination by the defendants, monetary damages for those harmed by the defendants’ actions and a civil penalty.

The federal Fair Housing Act prohibits discrimination in housing based on race, color, religion, national origin, sex, disability and familial status. More information about the Civil Rights Division and the laws it enforces is available at http://www.justice.gov/crt. Individuals who believe that they may have been victims of housing discrimination can call the Housing Discrimination Tip Line at 1-800-896-7743, e-mail the Justice Department at [email protected], or contact HUD at 1-800-669-9777.

WASHINGTON – A former consultant for Willbros International Inc. (WII), a subsidiary of Houston-based Willbros Group Inc. (Willbros), pleaded guilty today to engaging in a conspiracy to pay more than $6 million in bribes to government officials of the Federal Republic of Nigeria and officials from a Nigerian political party, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division and Assistant Director Joseph Persichini Jr., of the FBI’s Washington Field Office.

Paul G. Novak, 43, pleaded guilty before U.S. District Judge Simeon T. Lake III in Houston to one count of conspiracy to violate the Foreign Corrupt Practices Act (FCPA) and one substantive count of violating the FCPA. Sentencing has been scheduled for Feb. 19, 2010.

"The use of intermediaries to pay bribes will not escape prosecution under the FCPA," said Assistant Attorney General Lanny A. Breuer.  "The Department will continue to hold accountable all the players in an FCPA scheme – from the companies and their executives who hatch the scheme, to the consultant they retain to carry it out."

"The FBI is committed to investigating and weeding out corruption that inhibits honest business practices around the globe," said Assistant Director Persichini.

In his plea, Novak admitted that from approximately late-2003 to March 2005, he conspired with others to make a series of corrupt payments totaling more than $6 million to various Nigerian government officials and officials from a Nigerian political party to assist Willbros in obtaining and retaining the Eastern Gas Gathering System (EGGS) Project, which was valued at approximately $387 million. The EGGS project was a natural gas pipeline system in the Niger Delta designed to relieve existing pipeline capacity constraints.

According to information contained in plea documents, Novak, along with alleged co-conspirators Kenneth Tillery, Jason Steph, Jim Bob Brown, three employees from a German construction company based in Mannheim, Germany agreed to make the corrupt payments to, among others, government officials from the Nigerian National Petroleum Corporation (NNPC), the National Petroleum Investment Management Services (NAPIMS), a senior official in the executive branch of the federal government of Nigeria, members of a Nigerian political party and officials from the Shell Petroleum Development Company of Nigeria Ltd. (SPDC). According to court documents, the bribes were paid to assist in obtaining and retaining the EGGS project and additional optional scopes of work.

According to information contained in plea documents, to secure the funds for those corrupt payments, Steph and others caused Willbros West Africa Inc. (WWA), a subsidiary of Willbros, to enter into so-called "consultancy agreements" with two consulting companies Novak represented in exchange for purportedly legitimate consultancy services. In reality, those consulting companies were used to facilitate the payment of bribes. Specifically, the consulting companies would invoice WWA for purported consulting services and would receive payment from WII’s bank account in Houston to the consulting companies’ bank accounts in Lebanon. Novak would then use money from the Lebanese bank accounts to pay bribes to the various Nigerian officials.

In addition to Novak, to date, two Willbros employees have pleaded guilty for their roles in the EGGS bribery scheme and Willbros has entered into a deferred prosecution agreement:

• On Sept. 14, 2006, Jim Bob Brown, a former Willbros executive, pleaded guilty to one count of conspiracy to violate the FCPA, in connection with his role in making corrupt payments to Nigerian government officials to obtain and retain the EGGS contract and in connection with his role in making corrupt payments in Ecuador. Brown’s sentencing is currently scheduled for Jan. 28, 2010.
• On Nov. 5, 2007, Jason Steph, also a former Willbros executive, pleaded guilty to one count of conspiracy to violate the FCPA, in connection with his role in making corrupt payments to Nigerian government officials to obtain and retain the EGGS contract. Steph’s sentencing is also scheduled for Jan. 28, 2010.
• On May 14, 2008, Willbros Group Inc. and Willbros International Inc. entered into a deferred prosecution agreement and agreed to pay a $22 million criminal penalty, in connection with the company’s payment of bribes to government officials in Nigeria and Ecuador.

Kenneth Tillery was charged, along with Novak, for his alleged role in the bribery scheme in an indictment unsealed on Dec. 19, 2008. According to the indictment, Tillery was a WII employee and executive from the 1980s through January 2005. From 2002 until January 2005, Tillery served as executive vice president and, later, as president of WII. Tillery remains a fugitive. The charges against Tillery are merely accusations, and he is presumed innocent unless and until proven guilty.

This case is being prosecuted by Assistant Chief Hank Bond Walther and Trial Attorney Laura N. Perkins of the Criminal Division’s Fraud Section and investigated by the FBI’s Washington Field Office.

WASHINGTON – Steven W. Burgess, a former Jackson County, Mo., sheriff’s deputy, pleaded guilty in federal court today to violating the civil rights of a teenage girl whom he sexually assaulted in his patrol car, the Justice Department announced.

Burgess, 35, of Independence, Mo., pleaded guilty before U.S. District Judge Ortrie D. Smith to the charge contained in an April 7, 2009, federal indictment. As part of his plea, Burgess admitted that while he was a deputy sheriff with the Jackson County Sheriff’s Department, he deprived a 15-year-old girl of her Constitutional rights by sexually assaulting her while she was in his custody.

 

Under the terms of today’s plea agreement, the government and Burgess agree that a sentence of 14 years in federal prison without parole is appropriate in this case. A sentencing hearing will be scheduled after the completion of a pre-sentence investigation by the United States Probation Office.

Burgess, then on-duty and in uniform as a deputy sheriff, encountered the victim (identified as "C.B.") and some friends in Haynes Park in Sibley, Mo., on July 24, 2007. Burgess told her friends to leave the park and ordered C.B. to stay at the park with him. Burgess then put C.B. in handcuffs and, while patting her down, inappropriately touched her in a sexual manner. Burgess removed the handcuffs and compelled her to perform oral sex on him.

Burgess violated the victim’s right not to be deprived of liberty without due process of law, which includes the right to bodily integrity. Burgess used force against his victim and placed her in fear of death, serious bodily injury and kidnaping.

"A law enforcement officer who abuses his authority by sexually assaulting a child not only violates the law, but also the child’s civil rights and the public trust," Assistant Attorney General Thomas E. Perez for the Civil Rights Division said. "The Civil Rights Division will aggressively prosecute any person who, while purporting to act as a law enforcement officer, violates the most basic Constitutional rights of our citizens."

"Law enforcement officers have a sworn duty to uphold the law, but in this case a uniformed officer violated both his oath and the law by sexually assaulting a 15-year-old girl while she was in his custody," U.S. Attorney Matthew J. Whitworth for the Western District of Missouri said. "We will not tolerate such a heinous offense, especially by an officer abusing his position of authority. A violation of one person’s civil rights is a crime against the entire community. A long prison term will hold him accountable for his repugnant behavior and make it clear that nobody is above the law."

This case is being prosecuted by Assistant U.S. Attorney K. Michael Warner and Civil Rights Division Trial Attorney Eric L. Gibson. It was investigated by the Jackson County, Mo., Sheriff’s Department and the FBI.

 

Frederic A. Bourke Jr., of Greenwich, Conn., was sentenced today in U.S. District Court in Manhattan to one year and one day in prison.

Following a six-week trial, Bourke, 63, was found guilty on July 10, 2009, of conspiracy to violate the Foreign Corrupt Practices Act (FCPA) and related prohibitions, and of making false statements to the FBI. The FCPA makes it a crime to pay or offer to pay foreign government officials in order to obtain or retain business. In addition to the prison term, U.S. District Judge Shira A. Scheindlin ordered Bourke to pay a $1 million fine and serve three years of supervised release following the prison term.

According to evidence presented at trial, Bourke participated in a scheme to bribe senior government officials in Azerbaijan with several hundred million dollars in shares of stock, cash and other gifts, to ensure that those officials would privatize the State Oil Company of the Azerbaijan Republic (SOCAR) in a rigged auction that only Bourke, fugitive Czech investor Viktor Kozeny and members of their investment consortium could win, to their massive profit. Kozeny is under indictment in the Southern District of New York for his alleged role in the scheme.

Under the privatization program, citizens of Azerbaijan could use free government-issued vouchers to bid for shares of state-owned industries that were to be privatized. Privatization vouchers were bearer instruments that were freely tradable, and they typically were bought and sold using U.S. currency. Foreigners could also participate in Azerbaijan’s privatization program and own vouchers, but only if they purchased a government-issued "option" for each voucher they held. The vouchers and options were largely purchased with millions of dollars of cash flown into Azerbaijan on private planes, and were intended to be exercised by Oily Rock Ltd., a company Kozeny allegedly controlled.

According to trial evidence, Bourke, a friend and neighbor of Kozeny’s in Aspen, Colo., invested approximately $8 million in Oily Rock, on behalf of himself, family members and friends. Bourke also obtained directorships, salary and stock options with related companies that Kozeny allegedly set up and funded.

The takeover of SOCAR, however, could only take place if the president of Azerbaijan issued a decree directing SOCAR’s privatization. Beginning in August 1997 through fall 1998, Bourke and others conspired to pay or cause to be paid millions of dollars worth of bribes to Azeri government officials to ensure that their investment consortium would gain, in secret partnership with the Azeri officials, a controlling interest in SOCAR and its substantial oil reserves.

For example, in August 1997, Kozeny allegedly agreed to transfer to corrupt Azeri officials two-thirds of the vouchers and options Oily Rock purchased, and to give them two-thirds of all of the profits arising from his investment consortium’s participation in SOCAR’s privatization. In June 1998, Bourke knew that Kozeny allegedly arranged for Oily Rock to increase its authorized share capital from $150 million to $450 million so that the additional $300 million worth of Oily Rock shares could be transferred to one or more of the Azeri officials as a further bribe payment. Bourke also arranged for two of the corrupt officials to receive medical treatment in New York City on different occasions in 1998, for which Oily Rock paid. Thereafter, in interviews with the FBI in April and May of 2002, Bourke falsely stated that he was not aware that Kozeny allegedly had made payments to the Azeri officials.

The charges against Kozeny remain merely accusations, and he is presumed innocent unless and until proven guilty.

The case against Bourke and the related case pending against Kozeny are being prosecuted by Deputy Chief Mark F. Mendelsohn and Assistant Chief Robertson Park of the Criminal Division’s Fraud Section, and Assistant U.S. Attorneys Harry A. Chernoff and Iris Lan of the U.S. Attorney’s Office for the Southern District of New York.

WASHINGTON—Two companies and the city of St. Maries, Idaho, have agreed to clean up a superfund site in St. Maries at a cost estimated more than $12 million, the Justice Department and the U.S. Environmental Protection Agency (EPA) announced today.

Carney Products Co. Ltd., the general partners of B.J. Carney & Co. LP, along with the city have agreed to clean up the St. Maries Creosote Superfund site in a settlement agreement filed late yesterday in federal court in Boise, Idaho. The site, a former wooden utility pole treatment plant, is located along the banks of the St. Joe River on the Coeur d’ Alene Tribe reservation. The tribe joined with the federal government in signing the settlement.

"Today’s settlement demonstrates our commitment to make sure that parties responsible for Superfund sites foot the bill for cleaning the pollution," said John C. Cruden, Acting Assistant Attorney General in charge of the Justice Department’s Environment and Natural Resources Division. "We are pleased to reach this agreement with the city and these two companies which will ultimately result in the cleanup of contamination on private land and in the St. Joe River within the Coeur d’ Alene Tribe reservation."

"This is good news for both the community and the Coeur d’Alene Tribe," said Michelle Pirzadeh, EPA’s Acting Regional Administrator in Seattle. "With this agreement, we are another step closer to finishing the cleanup and putting the land back into productive use.  It's a ‘win’ for the local economy, public health and the environment."

According to a complaint filed simultaneously with the agreement, the United States alleged that the three entities were responsible under the Superfund law to clean up the site according to EPA’s plan announced in July 2007. The agreement that resolves the complaint also includes a payment to the United States of $555,951.23 for EPA’s past clean up and oversight costs, and a $5,000 payment to the tribe for its past oversight costs. The tribe also will be able to review, inspect and comment on the plans and work being completed at the site.

B.J. Carney & Co. owned the now-defunct plant from 1960 through the early 1980s, demolishing site structures and re-grading contaminated soil from 1960 through 1965. Although the creosote operation ended, and B.J. Carney & Co. sold its interests to Carney Products, Ltd., from 1982 until 2003 Carney Products peeled, sorted, and stored poles at the facility. The creosote operation and demolition process polluted the land, river bank and river sediments. EPA’s cleanup plan calls for excavation and thermal treatment of more than 70,000 cubic yards of creosote-contaminated soil and river sediment. During the thermal treatment, the contaminated soils and sediments will be heated to a temperature that turns the contaminants into gas and thereby removes the contaminants.

The settlement includes provisions that will provide additional assurance of the responsible parties’ obligations. The responsible parties entered into a confidential guarantee agreement under which an environmental engineering company guarantees that it will complete essentially all of the cleanup work. The engineering company has signed and will be bound by the consent decree. The responsible parties remain obligated to complete the work should the engineering company fail to do so.

The consent decree, which was filed in U.S. District Court in for the District of Idaho, is subject to a 30-day comment period and final approval by the court. A copy of the consent decree is available on the Justice Department Web site at http://www.usdoj.gov/enrd/Consent_Decrees.htm.

A South Korean businessman was sentenced today in U.S. District Court for the Northern District of Texas to five years in prison for his role in a bribery conspiracy involving a $206 million telecommunications contract and employees of the Army and Air Force Exchange Service (AAFES).

In addition to the prison term, U.S. District Judge Ed Kinkeade also ordered Gi-Hwan Jeong to pay a $50,000 fine. Jeong pleaded guilty on June 11, 2009, to a five-count indictment, charging him with one count of conspiracy, two counts of honest services wire fraud and two counts of bribery.

AAFES is a federal entity that provides billions of dollars worth of goods and services annually to U.S. Armed Forces service members and their families around the world. According to court documents, Jeong conspired between 2001 and 2006 with two AAFES officials, Henry Lee Holloway and Clifton Choy, and others, to commit bribery and honest services wire fraud when he agreed to make payments to the officials in the form of cash, travel, entertainment expenses and other things of value in exchange for their aid in securing and maintaining a $206 million telecommunications contract for his company, Samsung Rental Ltd. (SSRT).

In prior plea proceedings, Jeong admitted to providing approximately $80,000 in cash, entertainment and other things of value from October 2001 to August 2005 as bribes to Choy, an AAFES services program manager for the Pacific region, in exchange for Choy’s use of official action to benefit SSRT. Specifically, according to court documents, prior to AAFES’ award of the telecommunications contract to SSRT in 2001, Choy used his official position to gain access to confidential bid proposal information that competing bidders had submitted to AAFES and passed the information to Jeong, who used it to ensure that SSRT submitted the winning bid. Shortly after AAFES awarded the contract to SSRT, Jeong admitted paying $20,000 in cash to Choy, who passed away in 2008.

Jeong also admitted in prior plea proceedings to providing approximately $70,000 in cash, entertainment, travel expenses, stock options and other things of value as bribes to Holloway from May 2003 to April 2005, in exchange for Holloway’s use of official action to benefit SSRT. Jeong admitted making payments to curry favor with Holloway, who, as an AAFES general store manager for several U.S. military bases in Korea, was in a position to seek termination of AAFES’ contract with SSRT following allegations of performance-related problems relating to SSRT’s contractual obligations. After Jeong began paying Holloway, according to court documents, Holloway used official acts and influence to support the contractual relationship between SSRT and AAFES.

On April 21, 2009, Holloway, 42, of Hamilton, Ga., pleaded guilty before Judge Clay D. Land in the Middle District of Georgia for his role in the conspiracy and for not reporting the bribes he admitted he accepted on his income tax returns. Holloway’s sentencing is scheduled for Dec. 16, 2009.

The 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 Criminal Division’s Office of International Affairs provided assistance in this matter. 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.

WASHINGTON – The Justice Department today announced a settlement agreement with the city of Wilmington, N.C., to improve access to all aspects of civic life for persons with disabilities. The agreement was reached under "Project Civic Access," a Justice Department initiative to bring state and local governments into compliance with the Americans with Disabilities Act (ADA). This agreement is the 171st reached under Project Civic Access and the tenth this year.

Project Civic Access was initiated to ensure that people with disabilities have an equal opportunity to participate in civic life. As part of the project, department investigators, attorneys, and architects survey state and local government facilities and programs throughout the country to identify modifications necessary to comply with ADA requirements. Depending on the circumstances in each community, the agreements address specific areas where access must be improved.

"Civic access is a basic right guaranteed to all, and today’s agreement illustrates Wilmington’s commitment to improving access for all of its residents and visitors with disabilities," said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. "We applaud Wilmington for entering into this agreement that will further the rights and opportunities of individuals with disabilities."

The city of Wilmington, also known as the Port City, is located in the southeastern corner of North Carolina between the Cape Fear River and the Atlantic Ocean. Wilmington has become a popular location for filming movies and TV shows. More than 15,400 individuals with disabilities call Wilmington home, and the percentage of Wilmington residents who have a disability is higher than the national average.

Under the agreement announced today, the city of Wilmington will take several steps to improve access for individuals with disabilities, such as:

• Making physical modifications to its facilities so that parking, routes into the buildings, entrances, public telephones, restrooms, service counters, and drinking fountains are accessible to persons with disabilities;
• Posting, publishing and distributing a notice to inform members of the public of the provisions of the ADA and their applicability to the city’s programs, services, and activities;
• Adopting a grievance procedure to deal with complaints of disability discrimination;
• Amending its employment policies, as necessary, to comply with the regulations of the U.S. Equal Employment Opportunity Commission implementing the Americans with Disabilities Act;
• Implementing a plan that will provide accessible sidewalks and curb ramps throughout Wilmington;
• Ensuring that the city’s official website is accessible to persons with disabilities, including individuals who are blind or have low vision;
• Providing information for interested persons with disabilities concerning the existence and location of the city’s accessible services, activities and programs; and
• Installing signs at any inaccessible entrance to a city facility directing members of the public to an accessible entrance or to information about other accessible facilities where services can be obtained.

Today’s agreement was reached under Title II of the ADA, which prohibits discrimination against individuals with disabilities by state and local governments. The agreement will remain in effect for three years. The department will monitor compliance with the agreement until required actions have been completed.

People interested in finding out more about the ADA, today’s agreement with Wilmington, N.C., or the department’s Project Civic Access initiative may find this information on the ADA Web site at http://www.ada.gov or may call the toll-free ADA Information Line at (800) 514-0301 or (800) 514-0383 (TTY).

Sergei Tsurikov, 25, of Tallinn, Estonia; Viktor Pleshchuk, 28, of St. Petersburg, Russia; Oleg Covelin, 28, of Chisinau, Moldova; and a person known only as "Hacker 3;" have been indicted by a federal grand jury in Atlanta, Ga., on charges of hacking into a computer network operated by the Atlanta-based credit card processing company RBS WorldPay, which is part of the Royal Bank of Scotland.

Igor Grudijev, 31, Ronald Tsoi, 31, Evelin Tsoi, 20, and Mihhail Jevgenov, 33, each of Tallinn, Estonia, have also been indicted by a federal grand jury in Atlanta, Ga., for access device fraud.

The 16-count indictment charges Tsurikov, Pleshchuk, Covelin and "Hacker 3" with conspiracy to commit wire fraud, wire fraud, conspiracy to commit computer fraud, computer fraud, access device fraud and aggravated identity theft. The indictment alleges that the group used sophisticated hacking techniques to compromise the data encryption that was used by RBS WorldPay to protect customer data on payroll debit cards. Payroll debit cards are used by various companies to pay their employees. By using a payroll debit card, employees are able to withdraw their regular salaries from an ATM.

Once the encryption on the card processing system was compromised, the hacking ring allegedly raised the account limits on compromised accounts, and then provided a network of "cashers" with 44 counterfeit payroll debit cards, which were used to withdraw more than $9 million from more than 2,100 ATMs in at least 280 cities worldwide, including cities in the United States, Russia, Ukraine, Estonia, Italy, Hong Kong, Japan and Canada. The $9 million loss occurred within a span of less than 12 hours.

The hackers then allegedly sought to destroy data stored on the card processing network in order to conceal their hacking activity. The indictment alleges that the "cashers" were allowed to keep 30 to 50 percent of the stolen funds, but transmitted the bulk of those funds back to Tsurikov, Pleshchuk and other co-defendants Upon discovering the unauthorized activity, RBS WorldPay immediately reported the breach.

International cooperation was a significant factor in the resolution of this case. In a joint investigation with U.S. law enforcement authorities, Estonian Central Criminal Police apprehended Tsurikov, Ronald Tsoi, Evelin Tsoi and Jevgenov in Estonia earlier this year. Each is facing related charges in Estonia. Tsurikov is also in custody in Estonia and is pending extradition to the United States. Federal prosecution of the Estonian defendants has been closely coordinated with the Estonian Office of the Prosecutor General. Furthermore, cooperation between the Hong Kong Police Force and the FBI also led to a parallel investigation in Hong Kong, resulting in the identification and arrest of two individuals who were responsible for withdrawing RBS WorldPay funds from ATMs there. The Netherlands Police Agency National Crime Squad High Tech Crime Unit and the Netherlands National Public Prosecutor’s Office also provided significant assistance.

Tsurikov, Pleshchuk, Covelin and "Hacker 3" each face a maximum sentence of up to 20 years in prison for conspiracy to commit wire fraud and each wire fraud count; up to five years in prison for conspiracy to commit computer fraud; up to five or 10 years in prison for each count of computer fraud; a two-year mandatory minimum sentence for aggravated identity theft; and fines up to $3.5 million dollars. The charges against Grudijev, the Tsois and Jevgenov carry a maximum of up to 15 years in prison for each count and a fine of up to $250,000. The indictment also seeks criminal forfeiture of $9.4 million from the defendants.

"The charges brought against this highly sophisticated international hacking ring were possible only because of unprecedented international cooperation with our law enforcement partners, particularly between the United States and Estonia.  Through our close cooperation, both nations have demonstrated our commitment to identifying sophisticated attacks on U.S. financial networks that are directed and operated from overseas and our commitment to bringing the perpetrators to justice," said Assistant Attorney General of the Criminal Division Lanny A. Breuer.

"Last November, in just one day, an American credit card processor was hacked in perhaps the most sophisticated and organized computer fraud attack ever conducted. Today, almost exactly one year later, the leaders of this attack have been charged. This investigation has broken the back of one of the most sophisticated computer hacking rings in the world. This success would not have been possible without the efforts of the victim, and unprecedented cooperation from various law enforcement agencies worldwide," said Acting U.S. Attorney Sally Quillian Yates of the Northern District of Georgia.

"Through the diligent efforts of the victim company and multiple law enforcement agencies within the United States and around the world, the leaders of a technically advanced computer hacking group were identified and indicted in Atlanta, sending a clear message to cyber-criminals across the globe, said FBI Atlanta Field Office Special Agent-in-Charge Greg Jones. "Justice will not stop at international borders, but continue with the on-going cooperation between the FBI and other agencies such as the Estonian Central Criminal Police and the Netherlands Police Agency."

This case is being prosecuted by Assistant U.S. Attorneys Lawrence R. Sommerfeld and Gerald Sachs of the U.S. Attorneys Office for the Northern District of Georgia and by Senior Counsel Kimberly Kiefer Peretti of the Criminal Division’s Computer Crime and Intellectual Property Section. Treaty assistance was provided by the Criminal Division’s Office of International Affairs counsels Betsy Burke, Blair Berman, Roman Chaban, Judith Friedman, Deborah Gaynus, Linda McKinney and Mary McLaren.

This case is being investigated by the FBI. Assistance was provided by international law enforcement partners. The U.S. Secret Service also participated in the investigation. RBS World Pay immediately reported the crime and has assisted in the investigation.

WASHINGTON – The United States has asked a federal court to shut down a Dallas-area tax return preparer, the Justice Department announced today. The government complaint filed in U.S. District Court in Dallas alleges that Travis Nicholas Stenline of Seagoville, Texas, operates a business he calls Nick Tax or Nick’s Taxes that prepares fraudulent returns for customers.

 The government complaint alleges that Stenline prepared and filed about 250 federal income tax returns claiming improper refunds exceeding $880,000. Examples of alleged fraud cited in the complaint include bogus claims for telephone excise tax credits, fuel tax credits, and the earned income tax credit.

 Return preparer fraud and bogus fuel tax credits are identified by the IRS on its Web site as two of the 2009 "Dirty Dozen" tax scams.

Over the past decade, the Justice Department’s Tax Division has obtained more than 430 injunctions to stop tax fraud promoters and dishonest tax preparers. Information about these cases is available on the Justice Department Web site .

WASHINGTON - A federal judge in Sioux City, Iowa, today barred a Humboldt, Iowa, woman, Gayle Lemmon, and her tax preparation business from claiming improper deductions on federal income tax returns. The court’s order, which Lemmon agreed to, also prohibits her from representing customers before the IRS and requires her to attend government-approved tax training classes.

According to the government compaint in the civil injunction case, Lemmon’s firm, Gayle’s Bookkeeping and Tax Service, Inc., prepared federal income tax returns for customers that unlawfully understated tax liabilities by claiming improper deductions for the business use of the home and for non-deductible personal expenses. The suit also alleged that Lemmon claims improper deductions for charitable contributions and employee business expenses.

According to the complaint, the IRS examined approximately 243 returns that Lemmon prepared and found that 224 of them understated the customers’ tax liabilities. The complaint alleges that the tax loss from Lemmon’s alleged misconduct between 2003 and 2008 could be as much as $17 million.

In the past decade the Justice Department has obtained injunctions against more than 430 tax preparers and tax fraud promoters. Information about these cases is available on the Justice Department Tax Division’s Web site.

An eighth individual pleaded guilty today to illegally accessing numerous confidential passport application files. Susan Holloman, 58, of Washington, pleaded guilty before U.S. Magistrate Judge Alan Kay in the District of Columbia to a one-count criminal information charging her with unauthorized computer access. Holloman is scheduled to be sentenced on Jan. 21, 2010.

According to court documents, Holloman has worked full-time for the State Department since November 1980 as a file assistant in the Bureau of Consular Affairs. In pleading guilty, Holloman admitted that she had access to official State Department computer databases in the regular course of her job, including the Passport Information Electronic Records System (PIERS), which contains all imaged passport applications dating back to 1994. The imaged passport applications on PIERS contain, among other things, a photograph of the passport applicant as well as certain personal information including the applicant’s full name, date and place of birth, current address, telephone numbers, parent information, spouse’s name and emergency contact information. These confidential files are protected by the Privacy Act of 1974, and access by State Department employees is strictly limited to official government duties.

Holloman admitted that between Feb. 13 and Dec. 5, 2007, she logged onto the PIERS database and repeatedly searched for and viewed the passport applications of 70 celebrities and their families, actors, professional athletes, musicians and other individuals identified in the press. Holloman admitted that she had no official government reason to access and view these passport applications, but that her sole purpose in accessing and viewing these passport applications was idle curiosity.

Holloman is the eighth current or former State Department employee or contractor to plead guilty in this continuing investigation. On Sept. 22, 2008, Lawrence C. Yontz, a former Foreign Service Officer and intelligence analyst, pleaded guilty to unlawfully accessing nearly 200 confidential passport files. Yontz was sentenced on Dec. 19, 2008, to 12 months of probation and ordered to perform 50 hours of community service. On Jan. 14, 2009, Dwayne F. Cross, a former administrative assistant and contract specialist, pleaded guilty to unlawfully accessing more than 150 confidential passport files. Cross was sentenced on March 23, 2009, to 12 months of probation and ordered to perform 100 hours of community service. On Jan. 27, 2009, Gerald R. Lueders, a former Foreign Service Officer, watch officer and recruitment coordinator, pleaded guilty to unlawfully accessing more than 50 confidential passport files. Lueders was sentenced on July 8, 2009, to 12 months of probation and ordered to pay a $5,000 fine. On July 10, 2009, William A. Celey, a file assistant, pleaded guilty to unlawfully accessing more than 75 confidential passport files. Celey was sentenced on Oct. 23, 2009, to 12 months of probation and ordered to perform 50 hours of community service. On Aug. 17, 2009, Kevin M. Young, a contact representative, pleaded guilty to unlawfully accessing more than 125 confidential passport files. Young is scheduled to be sentenced on Dec. 9, 2009. On Aug. 26, 2009, Karal Busch, a former citizens services specialist, pleaded guilty to unlawfully accessing more than 65 confidential passport files. Busch is scheduled to be sentenced on Dec. 15, 2009. On Oct. 28, 2009, Yvette M. Burrison, a passport specialist, pleaded guilty to unlawfully accessing nearly 100 confidential passport files. A sentencing date has not yet been scheduled for Burrison.

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

WASHINGTON – Laurie O. Robinson was sworn in today as Assistant Attorney General in the U.S. Department of Justice’s Office of Justice Programs (OJP).

"Laurie’s commitment, leadership, experience, and knowledge of criminal justice issues will ensure that the Department of Justice works in partnership with the justice community to develop innovative, evidence-based strategies to prevent and reduce crime," Attorney General Holder said. "I look forward to once again working with Laurie."

The Office of Justice Programs provides federal leadership in developing the nation's capacity to prevent and control crime, administer justice, and assist victims. OJP has five component bureaus: the Bureau of Justice Assistance; the Bureau of Justice Statistics; the National Institute of Justice; the Office of Juvenile Justice and Delinquency Prevention; and the Office for Victims of Crime. Additionally, OJP has two program offices: the Community Capacity Development Office, which incorporates the Weed and Seed strategy, and the Office of Sex Offender Sentencing, Monitoring, Apprehending, Registering, and Tracking (SMART).

Ms. Robinson, who was confirmed by the United States Senate on November 5, 2009, previously served as the Assistant Attorney General of OJP from 1993 to February, 2000. Since 2004, Ms. Robinson has been the director of the Master of Science Program in the University of Pennsylvania's Department of Criminology. Also, since 2001, she has served as a Distinguished Senior Scholar in the University's Jerry Lee Center of Criminology, and as Executive Director of its Forum on Crime and Justice.

She has published numerous articles in criminal justice and legal periodicals, and has spoken at hundreds of criminal justice-related conferences and forums. Ms. Robinson is a magna cum laude graduate of Brown University and a member of Phi Beta Kappa.

WASHINGTON – Deputy Assistant Attorney General Molly Boast of the Department of Justice’s Antitrust Division issued the following statement today after the European Commission (EC) issued a statement of objections regarding Oracle Corporation’s proposed acquisition of Sun Microsystems Inc.:

"After conducting a careful investigation of the proposed transaction between Oracle and Sun, the Department’s Antitrust Division concluded that the merger is unlikely to be anticompetitive. This conclusion was based on the particular facts of the transaction and the Division’s prior investigations in the relevant industries. The investigation included gathering statements from a variety of industry participants and a review of the parties’ internal business documents. At this point in its process, it appears that the EC holds a different view. We remain hopeful that the parties and the EC will reach a speedy resolution that benefits consumers in the Commission’s jurisdiction.

"Several factors led the Division to conclude that the proposed transaction is unlikely to be anticompetitive. There are many open-source and proprietary database competitors. The Division concluded, based on the specific facts at issue in the transaction, that consumer harm is unlikely because customers would continue to have choices from a variety of well established and widely accepted database products. The Department also concluded that there is a large community of developers and users of Sun’s open source database with significant expertise in maintaining and improving the software, and who could support a derivative version of it.

"The Department and the European Commission have a strong and positive relationship on competition policy matters. The two competition authorities have enjoyed close and cooperative relations. The Antitrust Division will continue to work constructively with the EC and competition authorities in other jurisdictions to preserve sound antitrust enforcement policies that benefit consumers around the world."

"My thoughts and deepest sympathies are with the family of Dr. Eduardo Caraveo, a Bureau of Prisons psychologist who was killed Thursday at Ft. Hood, as well as to all those who are grieving the loss of loved ones in this tragic event.  No words can ease the pain they are feeling today. 

"Department of Justice personnel can be found answering the call to service in communities throughout the world every day.  I applaud and honor each of them for their dedication, and we will continue to stand by them as they work to protect the country."

WASHINGTON – The United States has filed a lawsuit against Kaman Dayron Inc., alleging that the Orlando, Fla., defense contractor violated the False Claims Act by knowingly substituting non-conforming parts in fuzes (sophisticated ignition devices incorporating mechanical and/or electronic components) supplied to the military for use in "bunker buster" bombs, the Justice Department announced today. The suit was filed today in U.S. District Court in Orlando.

The allegations relate to FMU-143 fuzes for use in hard target penetration warheads, colloquially referred to as "bunker buster" bombs. The government alleges that Kaman Dayron knowingly substituted non-conforming bellows motors for the specified parts in three lots of fuzes supplied to the military, and that the non-conforming parts could cause the fuzes to fire prematurely, creating a hazard for military personnel and causing misfires of the warheads. The military discovered the parts substitution and has quarantined the defective fuzes.

"I take seriously the Department of Justice’s obligation to pursue allegations that a defense contractor is creating a safety risk to our military," said Assistant Attorney General Tony West, in charge of the Department’s Civil Division. "We owe it to our military personnel to ensure that contractors know that this type of misconduct will not be tolerated."

This case is being prosecuted as part of a National Procurement Fraud Initiative. In October 2006, the Deputy Attorney General announced the formation of a National Procurement Fraud Task Force designed to promote the early detection, identification, prevention, and prosecution of procurement fraud associated with the increase in government contracting activity for national security and other government programs.

The Procurement Fraud Task Force is chaired by the Assistant Attorney General for the Criminal Division and includes U.S. Attorneys’ Offices, the FBI, the U.S. Inspectors General community, and a number of other federal law enforcement agencies. This case, as well as others brought by members of the task force, demonstrate the Justice Department’s commitment to helping ensure the integrity of the government procurement process.

WASHINGTON—John Wieland Homes and Neighborhoods Inc., and John Wieland Homes and Neighborhoods of the Carolinas Inc., based in Atlanta, Ga., have agreed to pay a $350,000 civil penalty to resolve alleged violations of the Clean Water Act, the Justice Department and U.S. Environmental Protection Agency (EPA) announced today.

The companies have also agreed to implement company-wide storm water compliance programs at their construction sites that go beyond current regulatory requirements. EPA estimates that the agreement will keep approximately 37 million pounds of sediment from polluting the nation’s waterways each year.

"The Clean Water Act requires environmental controls in order to protect nearby waterways from pollutants that commonly are found on construction sites," said John C. Cruden, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. "This settlement requires these companies now to take steps beyond the law to protect public health and the environment."

"Failure to properly control storm water runoff at construction sites can have serious consequences for the environment," said Stan Meiburg, EPA Region 4 Acting Regional Administrator. "This agreement will result in better management practices that will ultimately lead to greater protection of rivers, lakes and streams across the Southeast."

John Wieland Homes and Neighborhood, Inc., and John Wieland Homes and Neighborhoods of the Carolinas, Inc., primarily build homes in the Southeast including Georgia, North Carolina, South Carolina and Tennessee.

Along with the federal government, the state of Tennessee has joined the settlement. The state will receive a portion of the penalties based on the number of sites located within the state.

The government complaint alleges a common pattern of violations that was discovered by reviewing documentation submitted by the companies and through federal site inspections. The alleged violations include not obtaining permits until after construction had begun or failing to obtain the required permits at all. At the sites that did have permits, violations included failure to prevent or minimize the discharge of pollutants, such as silt and debris, in storm water runoff.

The settlement requires the companies to develop improved pollution prevention plans for each site, increase site inspections and promptly correct any problems that are detected. The companies must properly train construction managers and contractors, and are required to have trained staff present at each construction site. They also must implement a management and internal reporting system to improve oversight of on-the-ground operations and submit annual reports to EPA.

Improving compliance at construction sites is one of EPA’s national enforcement priorities. Construction projects have a high potential for environmental harm because they disturb large areas of land and significantly increase the potential for erosion. Without onsite pollution controls, sediment-laden runoff from construction sites can flow directly to the nearest waterway and degrade water quality. In addition, storm water can pick up other pollutants, including concrete washout, paint, used oil, pesticides, solvents and other debris. Polluted runoff can harm or kill fish and wildlife and can affect drinking water quality.

The Clean Water Act requires that construction sites have controls in place to prevent pollution from being discharged with storm water into nearby waterways. These controls include basic pollution prevention techniques such as silt fences, phased site grading, and sediment basins to prevent common construction contaminants from entering the nation’s waterways.

This settlement is the latest in a series of enforcement actions to address storm water violations from construction sites around the country. Similar consent decrees have been reached with companies like Home Depot and multiple home building companies.

The consent decree, lodged in the U.S. District Court for the Middle District of Tennessee, is subject to a 30-day public comment period and approval by the federal court. The companies are required to pay the penalty within 30 days of the court’s approval of the settlement. A copy of the consent decree is available on the Justice Department Web site at http://www.usdoj.gov/enrd/Consent_Decrees.html .

WASHINGTON – The Justice Department today announced a settlement of its lawsuit alleging that those involved in the design and construction of 11 multifamily housing complexes discriminated on the basis of disability. The complexes are located in four states and contain more than 800 units covered by the Fair Housing Act’s accessibility provisions.

Under the settlement, which must still be approved by the U.S. District Court for the Western District of Tennessee, 11 defendants will pay all costs related to making the complexes for which they were responsible accessible to persons with disabilities and pay up to $117,000 to compensate individuals harmed by the inaccessible housing. The settlement requires all the defendants to undergo training on the requirements of the Fair Housing Act and provide periodic reports to the government.

"The Fair Housing Act requires equal access to housing for persons with disabilities," said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. "This comprehensive settlement ensures that these multifamily housing complexes will be retrofitted to comply with the Fair Housing Act, thus allowing persons with physical disabilities an equal opportunity to live in and visit these complexes."

The complaint was originally filed in Memphis, after the United States Attorney received a copy of a survey conducted by the Memphis Center for Independent Living of three of the Memphis properties indicating violations of the Fair Housing Act. In jointly announcing the filing of the Consent Order U.S. Attorney Lawrence J. Laurenzi said, "This Consent Order is an example of our office’s commitment to enforcing the civil rights of all people and in particular highlights the high degree of cooperation between our office and the Civil Rights Division in enforcing the rights of individuals with disabilities."

The defendants responsible for the payments and retrofits are Steve Bryan, Bryan Construction Company, Patton & Taylor Construction Co., Taylor Gardner Architects, Looney-Ricks-Kiss Architects, Richard A. Barron, The Reaves Firm, Smith Engineering Firm, David W. Milem, Belz/South Bluffs and HT Devco. Two defendants, Steve Bryan and Bryan Construction Co., will also pay a civil penalty of $12,000 to vindicate the public interest. The defendants will retrofit the following complexes in Alabama, Tennessee, Louisiana and Texas:

• Sunset Bay at Bon Secour, Condominiums, Gulf Shores, Ala.
• South Bluffs Apartments, 4 Riverview Drive West, Memphis, Tenn.
• Island Park Apartments, 1440 Island Park Drive, Memphis, Tenn.
• The Apartments on Harbor Town Square, Memphis, Tenn.
• The Horizon, 717 Riverside Drive, Memphis, Tenn.
• Grand Pointe Apartments, 3606 Kaliste Saloom Road, Lafayette, La.
• Highlands of Grand Pointe, 3601 Kaliste Saloom Drive, Lafayette, La.
• Ashford Place Apartments, 107 Ashford Drive, West Monroe, La.
• Island Park Apartments, 1105 Island Park Boulevard, Shreveport, La.
• Reflections of Island Park, 2600 Celebration Cove, Shreveport, La.
• Cumberland Place, 2088 Blue Mountain Blvd, Tyler, Texas

The retrofitting includes modifying walkways to eliminate steps, excess slopes and level changes, providing accessible curb ramps, and providing accessible parking and routes to site amenities, such as clubhouses, pools, mailboxes and trash facilities. The settlement also provides for the replacement of inaccessible knob door hardware, the widening of inaccessible narrow doorways, and the reconfiguration of bathrooms and kitchens to accommodate persons who use wheelchairs.

Persons who believe they may have been harmed by the lack of accessible housing at one of the complexes involved in this matter should contact the Justice Department at 1-800-896-7743, and select menu option 996.

The federal Fair Housing Act prohibits discrimination in housing based on race, color, religion, national origin, sex, disability and familial status. Individuals who believe that they may have been victims of housing discrimination should call the Housing Discrimination Tip Line (1-800-896-7743) or email the Justice Department at [email protected]. Such persons may also contact the U.S. Department of Housing and Urban Development at 1-800-669-9777.

Fair housing enforcement is a priority of the Civil Rights Division. More information about the Civil Rights Division and the laws it enforces is available at http://www.justice.gov/crt.

WASHINGTON – The United States has reached a settlement resolving a housing discrimination lawsuit in Tennessee concerning discrimination against families with children, the Justice Department announced. Under the consent decree, filed today in federal court in Chattanooga, Tenn., defendants Fountainbleau Apartments L.P., Clark W. Taylor Inc., Clark W. Taylor, Jane McElroy, Elizabeth Foster and CWT Management Inc. will pay $131,500 in monetary relief to 15 identified victims and the United States.

The Department’s complaint alleged that the owners, property managers, and management company violated the Fair Housing Act by refusing to rent apartments to persons with children, discouraging persons with children from renting dwellings owned and managed by the defendants, steering persons with children to another apartment complex and making statements that discriminated on the basis of familial status.

 "The Fair Housing Act ensures that families searching for a home are protected from discrimination," said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. "The Justice Department will continue to vigorously protect the civil rights of families in Tennessee and across the country."

 

 Under the consent decree, which must be approved by the federal court in Chattanooga, the defendants must pay $116,500 to 15 identified victims of discrimination and an additional $15,000 to the government as a civil penalty. The settlement also calls for numerous corrective measures, including training, a nondiscrimination policy, record keeping and monitoring.

 

The Department conducted its investigation using fair-housing testers – individuals who pose as renters for purposes of gathering information about possible discriminatory practices in the rental of apartments.

Fighting illegal housing discrimination is a top priority of the Justice Department. The federal Fair Housing Act prohibits discrimination in housing on the basis of race, color, religion, sex, familial status, national origin and disability.

More information about the Civil Rights Division and the laws it enforces is available at http://www.justice.gov/crt/. Persons who believe they have experienced or witnessed unlawful housing discrimination may call the Housing Discrimination Tip Line at 1-800-896-7743, e-mail the Justice Department at [email protected], or contact HUD at 1-800-669-9777. More information about the Fair Housing Act can also be found at http://www.justice.gov/crt/housing/ or http://www.hud.gov/fairhousing .

WASHINGTON – Robert Young, 57, a former captain in the U.S. Army, was sentenced today to 97 months in prison for his participation in a scheme to steal approximately 10 million gallons of fuel from the U.S. Army in Iraq, announced Assistant Attorney General of the Criminal Division Lanny A. Breuer and U.S. Attorney for the Eastern District of Virginia Neil H. MacBride.

Young, a U.S. citizen who resided in the Philippines until his arrest in connection with this case, was sentenced today by U.S. District Court Judge Claude M. Hilton in the Eastern District of Virginia. Judge Hilton also sentenced Young to three years of supervised release to follow his prison term, and ordered him to pay $26,276,427 in restitution. Young was also ordered to forfeit $1 million in personal profits he made from the scheme.

Young pleaded guilty on July 24, 2009, to both counts of a two-count superseding indictment charging him and Robert Jeffery with conspiracy and theft of government property.

In his plea, Young admitted that in October 2007, while serving as a contractor in Iraq, he and other co-conspirators agreed to participate in a scheme to steal fuel from the U.S. Army. Between October 2007 and May 2008, he and his co-conspirators, purportedly representing Department of Defense contractors in Iraq, used fraudulently obtained documents to enter the Victory Bulk Fuel Point (VBFP) in Camp Liberty, Iraq, and presented false fuel authorization forms to steal aviation and diesel fuel from the VBFP for subsequent sale on the black market. The United States owns and operates the VBFP in support of Operation Iraqi Freedom. The VBFP supplies fuel to both military units and U.S. Government contractors operating in and around the Victory Base Complex. To retrieve and transport the stolen fuel from the VBFP, Young admitted that he and his co-conspirators employed several individuals to serve as drivers and escorts of the trucks containing the stolen fuel. During Young’s participation in the scheme, he received approximately $1 million in personal profits.

In related cases, Robert Jeffery was convicted on Aug. 11, 2009, after a two-day jury trial, of one count of conspiracy and one count of theft of government property for his role in the fuel theft. The evidence at trial showed that Jeffery served as an escort for the fuel trucks and retrieved hundreds of thousands of gallons of fuel from the VBFP. Sentencing for Jeffery is scheduled for Dec. 11, 2009.

Lee William Dubois pleaded guilty on Oct. 7, 2008, to participating in the same scheme. In his plea, Dubois admitted that he obtained government-issued common access cards for the drivers and escorts of the trucks and also presented false documents to the VBFP authorizing his co-conspirators to draw fuel. Dubois admitted that he received at least $450,000 in personal profits from the scheme. On Aug. 25, 2009, Dubois was sentenced to three years in prison.

Michel Jamil pleaded guilty on July 27, 2009, in connection with his role in the theft scheme. Jamil admitted that in March 2007, he and two of his co-conspirators arranged for the creation of a false fuel authorization form authorizing individuals to draw fuel from the VBFP. Jamil also admitted to serving as an escort for the fuel trucks to retrieve the fuel from the VBFP. Jamil admitted he received between $75,000 and $87,500 in personal profits from the scheme. Jamil’s sentencing is scheduled for Feb. 12, 2010.

The case is being prosecuted by Special Assistant U.S. Attorney Steve Linick, Deputy Chief of the Criminal Division’s Fraud Section, and Fraud Section Trial Attorneys Andrew Gentin and Brigham Cannon. The investigation of this case was conducted by the U.S. Army Criminal Investigation Command, the Defense Criminal Investigative Service, the FBI and members of the National Procurement Fraud Task Force and the International Contract Corruption Task Force (ICCTF).

The National Procurement Fraud Task Force, created in October 2006 by the Department of Justice, was designed to promote the early detection, identification, prevention and prosecution of procurement fraud associated with the increase in government contracting activity for national security and other government programs. The ICCTF is a joint law enforcement agency task force that seeks to detect, investigate and dismantle corruption and contract fraud resulting from U.S. Overseas Contingency Operations, including in Afghanistan, Iraq and Kuwait.

A federal court in Milwaukee, Wis., today issued a preliminary injunction ordering a Milwaukee heating contractor and its owner and president to comply with federal employment tax payment requirements. The preliminary injunction order, signed by U.S. District Judge J.P. Stadtmueller, was entered against Dykeman Family Corp. and its owner, Michael K. Dykeman. The order bars the company from disbursing any funds after wages are paid to employees until the taxes withheld from those wages have been paid to the Internal Revenue Service. Violations of an injunction can lead to civil and criminal sanctions, including fines and imprisonment.

The Justice Department filed the suit in September, seeking to enjoin defendants from continuing to run up unpaid payroll tax liabilities. The complaint alleges that defendants have failed to comply with their tax obligations since 2002. According to the complaint, the business failed to pay over $870,000 in federal employment and unemployment taxes between 2002 and 2007.

"When a business withholds taxes from employees’ wages, it is required by law to turn those taxes over promptly to the IRS," said John A. DiCicco, Assistant Attorney General for the Justice Department’s Tax Division. "Failure to pay withheld taxes is a serious matter that can lead not only to an injunction, but also to substantial civil and criminal penalties."

More information about the Justice Department and its efforts to enforce federal tax laws is available on the Justice Department Web site.

WASHINGTON—Attorney General Eric Holder today welcomed the confirmation of Ignacia S. Moreno as the new Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. Moreno was confirmed by the U.S. Senate late yesterday.

"I am pleased to welcome Ignacia back to the Department and the Environment and Natural Resources Division," said Attorney General Holder. "Reinvigorating the traditional missions of the Justice Department, including protecting our nation’s environment, has been one of my top priorities since taking office. Ignacia is a talented and experienced attorney who will bring strong leadership to this important division. I hope for rapid consideration of the other Justice Department nominees pending before the Senate."

The Environment and Natural Resources Division handles litigation under more than 150 federal statutes, such as the Clean Air Act, Clean Water Act, the Comprehensive Environmental Response, Compensation and Liability Act (Superfund), the Endangered Species Act, and the National Environmental Policy Act.

The Division’s work includes affirmative civil suits to stop polluters and recover clean-up costs, prosecution of environmental and wildlife crimes, defense of federal agencies and their programs, including management of federal lands and other natural resources, defense of federal environmental regulations, litigation relating to tribes and Indian lands, and condemnation of land for congressionally authorized public use. The Division was created on Nov. 16, 1909, by Attorney General George Wickersham through a two-page order creating "The Public Lands Division." It celebrates its 100th anniversary in less than a month.

Moreno returns to the Environment and Natural Resources Division where she served from January 1994 until January 2001 as Special Assistant and then as Counsel and Principal Counsel to the Division’s Assistant Attorney General.

Since September 2006, Moreno has been an in-house counsel at the General Electric Company.

Dustin Nix of Donaldson, Ark, was sentenced today in federal court in Fort Smith, Ark, on federal civil rights charges related to a conspiracy to drive a woman and her children from their home because they associated with African-Americans. Nix was sentenced to 12 months and one day in prison, three years of post-incarceration supervision, a fine of $5,000, and a $200 special assessment.

Nix pleaded guilty on July 10, 2009, to two felony civil rights charges for conspiring to violate, and violating, the civil rights of the victims. In the plea proceedings and documents filed in court, Nix admitted that in June 2008, he conspired with others to force the victims to leave Donaldson because they associated with African-Americans. Specifically, on June 15, 2008, Nix and the others agreed to construct a cross and burn it in front of the victims’ home. Nix was present for and aided in the construction of the cross. Then, on June 21, 2008, Nix and others drove the cross to the victims’ home. Nix and the others erected the cross in front of the victims’ home and attempted to set it on fire. Nix admitted that he understood that the purpose of burning the cross was to threaten and intimidate the victims, and that it was not intended as a joke or prank.

Nix’s co-conspirators, Jacob A. Wingo, Richard W. Robins, Clayton D. Morrison and Darren E. McKim, pleaded guilty in September 2009, for their roles in the conspiracy. Sentencing for Wingo, Robins, Morrison and McKim has been scheduled for Dec. 7, 2009.

"Driven by bigotry and hate, the defendants in this case threatened a young family with violence simply because they associated with persons of another race. Threats of this kind have no place in America," said Assistant Attorney General Perez. "Aggressive prosecution of hate crimes is a top priority for the Civil Rights Division, and the defendant’s conviction should send a message to others who would carry out similar criminal acts that they will be brought to justice."

Special Agents from the FBI’s Little Rock Field Office investigated this matter. The case was prosecuted by Assistant U.S. Attorney Matthew Quinn for the Western District of Arkansas, along with Special Litigation Counsel Gerard Hogan and Trial Attorney Benjamin Hawk of the Civil Rights Division of the Justice Department.