District Not Recorded

A civil lawsuit was filed today against a former U.S. Army officer and three contracting firms related to an alleged bribery scheme in connection with the awarding of contracts for services in Kuwait. Former Army officer John Cockerham Jr., who is named as a defendant in the lawsuit, previously pleaded guilty to criminal charges along with another former officer, James Momon Jr.

The government’s complaint alleges that from 2004 to 2006, several Kuwaiti companies, including Green Valley Co., Palm Springs General Trading and Contracting Establishment and Jireh Springs General Trading and Contracting Establishment, engaged in a bribery scheme with Cockerham and Momon in exchange for their promises to award Blanket Purchase Agreements (BPAs) for the purchase of bottled water, tents and wastewater removal services from Kuwaiti-based Army camps. A BPA is a simplified acquisition method that federal agencies use to fill anticipated repetitive needs for supplies or services.

The suit, filed in the U.S. District Court for the Western District of Texas, alleges that defendant Saud Al Tawash provided payments to Cockerham’s sister, Carolyn Blake, in exchange for BPAs awarded to or performed by Green Valley, Palm Springs and Jireh Springs, companies which he owned, controlled, or had an interest, according to the complaint. The complaint also alleges Mohammed Howaiji, Green Valley’s assistant manager, and Joseph E. Nakouzi, its head supervisor, agreed to pay Cockerham $300,000 in exchange for the BPAs. According to the complaint, Cockerham awarded the BPAs to Green Valley at inflated prices. The complaint charges that after Momon replaced Cockerham as the Army’s contracting officer, he also took over the bribery scheme and received $510,000 from Green Valley.

The government’s complaint further alleges that Jamal Al Dhama, the manager of Jireh Springs, promised Cockerham $1.5 million to award a BPA to that firm. Saud Al Tawash, acting on behalf of Jireh Springs, later offered Momon a bribe for Momon’s assistance in obtaining payment for Jireh Springs on a bottled water delivery, according to the lawsuit.

"The Department of Justice will vigorously protect taxpayer funds from fraud, especially where the fraud impacts contracts intended to support our troops," said Tony West, Assistant Attorney General for the Civil Division. "This case demonstrates our commitment to bring civil lawsuits to recover government losses from individuals and companies who defraud the U.S. Treasury."

The government is seeking treble damages under the False Claims Act, and a number of other remedies.

Cockerham previously pleaded guilty to conspiracy to defraud the United States, bribery and money laundering conspiracy. Momon pleaded guilty to bribery and conspiracy to commit bribery. Neither has been sentenced yet.

The United States has reached a settlement that will resolve its suit filed on behalf of retired Army service member King A. Gatten against Knight Protective Service Inc. The department’s complaint, filed in September 2009, alleges that Knight willfully violated the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA) by failing to promptly and properly reemploy Gatten upon his return from active military duty in the position he would have held had Gatten’s employment not been interrupted by his military service.

Under the terms of the settlement, embodied in a consent decree that has been submitted for approval to the federal court in Michigan, Knight must provide Gatten with $7,839.61 to compensate him for lost wages resulting from delay in restoring him to his proper reemployment position.

In its complaint, the department alleged that Knight unreasonably delayed Gatten’s reemployment for several months after he returned from active military duty and, even after reemploying him, Knight failed to reemploy Gatten as a full-time security sergeant – the position he held with Knight before he left to serve in the military. Subject to certain limitations, USERRA requires that individuals who leave their jobs to serve in the military be promptly reemployed by their civilian employers in the same positions, or in comparable positions, as the positions that they would have held had they not left to serve in the military.

"The brave men and women who serve our country in uniform deserve at least to know that they are not sacrificing their jobs to do so," said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. "This settlement demonstrates the Civil Rights Division’s strong commitment to ensuring that service members’ rights under are upheld."

The Justice Department’s Civil Rights Division has given a high priority to the enforcement of service members’ rights under USERRA. During 2009, the Civil Rights Division has filed 21 USERRA lawsuits on behalf of service members. Additional information about USERRA can be found on the Department of Justice Web site http://www.servicemembers.gov, and on the Labor Department Web site http://www.dol.gov/vets/programs/userra/main.htm.

Laura Wang-Woodford, a U.S. citizen who served as a director of Monarch Aviation Pte Ltd., a Singapore company that imported and exported military and commercial aircraft components for more than 20 years, was sentenced today in federal court in Brooklyn to 46 months in prison for conspiring to violate the U.S. trade embargo by exporting controlled aircraft components to Iran. Wang-Woodford was also ordered to forfeit $500,000 to the U.S. Treasury Department.

Wang-Woodford was arrested on Dec. 23, 2007, at San Francisco International Airport after arriving on a flight from Hong Kong, and has remained incarcerated since then. She and her husband, Brian D. Woodford, a U.K. citizen who served as chairman and managing director of Monarch, were originally charged in a 20-count indictment returned in the Eastern District of New York on Jan. 15, 2003. Brian Woodford remains a fugitive. A superseding indictment charging Wang-Woodford with operating Jungda International Pte Ltd., a Singapore-based successor to Monarch, was returned on May 22, 2008.

According to the superseding indictment, between January 1998 and December 2007, the defendants exported controlled U.S. aircraft parts from the United States to Monarch and Jungda in Singapore and Malaysia and then re-exported those items to companies in Tehran, Iran, without obtaining the required U.S. government licenses. As part of the charged conspiracy, the defendants falsely listed Monarch and Jungda as the ultimate recipients of the parts on export documents filed with the U.S. government. The aircraft parts illegally exported to Iran include aircraft shields, shears, "o" rings and switch assemblies. The superseding indictment further charged that the defendants arranged for the illegal export of U.S. military aircraft components, designed for use in Chinook military helicopters, to Monarch in Singapore.

At the time of her arrest in San Francisco, Wang-Woodford possessed catalogues from a Chinese company, the China National Precision Machinery Import and Export Corporation (CPMIEC), containing advertisements for military technology and weaponry. The products advertised included surface-to-air missile systems and rocket launchers. CPMIEC has been sanctioned by the U.S. Treasury Department, Office of Foreign Assets Control, based, in part, on CPMIEC’s history of selling military hardware to Iran. All U.S. persons and entities are prohibited from engaging in business with CPMIEC.

"As today’s sentence demonstrates, those who export restricted American technology in violation of our laws will be held accountable for their actions. Keeping sensitive U.S. technology from falling into the wrong hands is a top priority for the Justice Department," said Assistant Attorney General Kris.

"We are committed to protect the American public from the national security threat posed by those who would personally profit from the illegal export of U.S. military technology," said U.S. Attorney Campbell. Mr. Campbell thanked the Department of Commerce Bureau of Industry and Security (BIS) and the Department of Homeland Security, U.S. Immigration and Customs Enforcement (ICE), the agencies responsible for conducting the government’s investigation.

"Shutting down diverters like Monarch Aviation to protect our national security is our top priority, said Acting Assistant Secretary of Commerce for Export Enforcement Delli-Colli. "This case illustrates a successful, coordinated effort to stop the illegal shipment of controlled aircraft parts to Iran."

"The illegal sale of military parts is not only a threat to our national security, but to U.S. soldiers and allies," said Assistant Secretary of Homeland Security for U.S. Immigration and Customs Enforcement Morton.

The government’s case was prosecuted by Assistant U.S. Attorneys Daniel S. Silver, Cristina M. Posa and Claire Kedeshian.

Hayden B. Greene, 32, of Tulsa, Okla., and James Robert Roy, 42, of Tomball, Texas, were sentenced today to 30 months and 15 months in prison, respectively, for conspiring to manufacture and sell counterfeit pipe couplings.

 

Greene and Roy were each also sentenced to three years of supervised release following their respective prison terms and ordered to pay $10,901 in restitution, jointly and severally with their co-defendant. Greene and Roy each pleaded guilty on Aug. 12, 2009, before U.S. District Judge Keith P. Ellison in Houston to one count of conspiracy to traffic in counterfeit goods and commit fraud.

 

In their plea agreements, Greene and Roy admitted that they and a co-defendant conspired in a counterfeiting scheme to manufacture and sell oilfield pipe couplings stamped with a certification mark owned and registered by the American Petroleum Institute (API), without a license or authorization to do so.

 

API’s certification program is a quality-control program designed to insure against injury and catastrophic loss from substandard, unsafe products. The API monogram certifies that products and equipment used in the exploration and production of petroleum and natural gas meet certain API standards, specifications and recommended practices. Couplings that do not meet the API standards are sold for limited service applications at substantially lower prices than API-certified products. Only manufacturers licensed by API after meeting strict quality control standards, and who are subject to continued monitoring by API, are authorized to manufacture and sell products containing an API certification mark.

 

According to their plea agreements, Greene and Roy acknowledged that they and their co-defendant not only manufactured and sold couplings containing an API certification mark without a license, but profited at the expense of customers by manufacturing many of those couplings using substandard materials.

 

Greene and Roy’s pleas are the second and third pleas arising from this prosecution. On June 24, 2009, Ronald Adams was sentenced to eight months in prison and three years of supervised release for his role in the scheme.

 

This case is being investigated by the FBI’s Houston Field Office and is being prosecuted by Trial Attorney Richard Green of the Criminal Division’s Computer Crime and Assistant U.S. Attorney Mark McIntyre of the U.S. Attorney’s Office for the Southern District of Texas.

WASHINGTON – The United States and the Commonwealth of Virginia have intervened in a False Claims Act suit in the Western District of Virginia against the Medicaid providers Universal Health Services Inc., Keystone Marion LLC and Keystone Education and Youth Services LLC, the Justice Department announced today. They did business as the Keystone Marion Youth Center, a residential facility in Marion, Va., that receives Medicaid funds to provide psychiatric counseling and treatment for boys ages 11-17.

This False Claims Act lawsuit was filed by several former therapists who worked at the Marion residential facility. The suit alleges that defendants provided sub-standard care to adolescents in violation of federal and state Medicaid requirements, falsified records to cover up their serious violations and filed false Medicaid claims. Under the False Claims Act, a health care provider that submits false or fraudulent claims to a federal health care program is liable for three times the government’s damages, plus a civil penalty for each false claim.

"The Department of Justice is committed to ensuring that Medicaid recipients, particularly troubled adolescents in need of psychiatric services, receive the appropriate care and treatment they require," said Tony West, Assistant Attorney General for the Civil Division of the Department of Justice. "We must protect Medicaid from fraudulent practices that deprive beneficiaries of the quality health care they deserve."

"The Medicaid program was designed to ensure that the most vulnerable members of our society receive quality medical care.  The intervention in this suit demonstrates our commitment in the Western District of Virginia to protecting the integrity of Medicaid funds and holding those who violate the law accountable," said U.S. Attorney Timothy J. Heaphy. 

Assistant Attorney General West acknowledged the efforts made by the Civil Division of the Justice Department, the U.S. Attorney’s Office for the Western District of Virginia, the Virginia Attorney General’s office, the Department of Health and Human Services’ Office of the Inspector General and the Commonwealth of Virginia’s Medicaid Fraud Control Unit.

WASHINGTON – Judge S. Thomas Anderson sentenced Carlton Moore, formerly an officer with the Memphis, Tenn., Police Department, to 27 months in prison and one year of supervised release after Moore pleaded guilty to stealing money from motorists while acting under color of law, the Justice Department today announced.

When he entered his guilty plea in June 2009, Moore admitted that on March 1, March 14, and on May 4, 2009, he surreptitiously stole cash from three Hispanic drivers he pulled over while on duty as a Memphis police officer. During these stops, Moore ordered the victims out of their vehicles, patted them down and removed personal items from them during the search. He then stole money from the victims before returning their personal items and releasing them.

"We place in police officers a great deal of trust, and the Civil Rights Division will aggressively prosecute those officers who violate the rights of others, and the public trust, for personal gain," said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division.

"Officer Moore dishonored his badge and his fellow officers when he chose to steal from innocent people during traffic stops. Protecting the rights of every person from abuse committed by public officials is of the highest priority of this office," said Larry Laurenzi, U.S. Attorney for the Western District of Tennessee.

"Our citizens have a right to ethical treatment from all law enforcement officers and we, as civil servants, must never forget that we have sworn an oath to serve and protect them," said My Harrison, Special Agent in Charge of the FBI Memphis Field Office.

"We have a responsibility to our citizens, visitors and the outstanding members of the Memphis Police Department. We will not tolerate those who dishonor our badge by criminal activity. Mr. Moore admitted to robbing Hispanic members of our community while on-duty, in uniform and in a marked squad car," said Larry A. Godwin, Director of the Memphis Police Department. "After initiating this investigation, we worked in conjunction with the FBI to capture Moore as he committed the crime. We police our own and criminals wearing our badge will be aggressively pursued just as any other criminal in Memphis."

The Civil Rights Division is committed to the vigorous enforcement of every federal criminal civil rights statute, such as those laws that prohibit the willful use of excessive force or other acts of misconduct by law enforcement officials.

This case was investigated by the FBI and the Memphis Police Department. Assistant U.S. Attorney Steve Parker from the U.S. Attorney’s Office in Memphis and Trial Attorney Jonathan Skrmetti from the Civil Rights Division prosecuted the case.

WASHINGTON – Michael Bullard, Richard Armstrong and James Whitewater were sentenced today in federal court in Boise, Idaho, for hate crime and conspiracy charges in connection with the racially-motivated assault of an African-American man outside of a Wal-Mart store in July 2008, the Justice Department announced today.

U.S. District Judge Edward J. Lodge sentenced Bullard, of Middleton, Idaho, to 51 months in prison, three years of supervised release, 80 hours of community service and a $200 special assessment. Armstrong, of Nampa, Idaho, was sentenced to 46 months in prison, three years of supervised release, 80 hours of community service and a $200 special assessment. Whitewater, of Nampa, was sentenced to 18 months in prison, three years of supervised release and a $100 special assessment. Bullard, 23, and Armstrong, 24, were convicted by a jury in July 2009. Whitewater, 23, pleaded guilty before trial and testified against the other two defendants.

"Driven by bigotry and hate, the defendants brutally assaulted a man for no other reason than his race. Abhorrent acts of violence such as this have no place in America," said Assistant Attorney General Thomas E. Perez of the Civil Rights Division. "Aggressive prosecution of hate crimes is a top priority for the Civil Rights Division, and today’s sentences should send a message to others who would carry out similar acts of violence that they will be brought to justice."

Evidence at trial revealed that on July 4, 2008, as the victim, a 24-year-old African-American man, walked out of a Wal-Mart store in Nampa, he was ambushed, chased and beaten by three men who used racial slurs as they carried out the attack. Witnesses testified that Bullard, Armstrong and Whitewater all participated in the assault, while a fourth person, a girlfriend of one of the defendants, held their belongings and cheered them on. The girlfriend, Jennifer Hartpence, was initially charged as a co-defendant, but her case was dismissed before it reached the jury.

After four hours of deliberation, the jury convicted the two remaining defendants of conspiring to violate the federally-protected rights of the victim and of actually violating the victim’s protected rights by engaging in the racially-motivated assault.

U.S.Attorney Tom Moss for the District of Idaho said, "These convictions mean that racial crimes will not be tolerated… not in this Country … not on any day. Idaho, like most other parts of this Nation, has had inglorious moments in its past when people endured oppression and criminal acts merely because of their skin color, race, national origin, gender or religion. We are long past that time. Thanks to the FBI and Nampa PD for their outstanding work in bringing this case forward. The United States Attorney’s Office also thanks the Civil Rights Division of DOJ for its help and collaboration."

"One cannot help but note the irony that the terrible acts of which these two defendants were convicted occurred on the 4th of July, last year," said Timothy J. Fuhrman, Special Agent in Charge of the FBI’s Salt Lake City Field Office. "The initial aggressive investigation by Nampa Police Department in this matter led to their indictment and conviction. In this day and age, law enforcement will not tolerate hate crimes. The FBI is committed to investigating these incidents aggressively and without hesitation. The prosecutors from the U.S Attorney’s Office and the Civil Rights Division handled this difficult case with great skill and dedication."

This case was investigated by the FBI and the Nampa Police Department. It was prosecuted by Assistant U.S. Attorney Wendy Olson and Civil Rights Division Trial Attorney Erin Aslan.

WASHINGTON — The nation’s largest nursing home pharmacy, Omnicare Inc. of Covington, Kentucky, will pay $98 million, and drug manufacturer, IVAX Pharmaceuticals of Weston, Florida, will pay $14 million to resolve allegations that Omnicare engaged in kickback schemes with several parties, including IVAX, the Justice Department announced today. Approximately $68.5 million of the settlement proceeds will go to the United States, while $43.5 million has been allocated to cover Medicaid program claims by participating states.

At the same time, the United States announced that it has intervened and filed a complaint against two large nursing home chains, Mariner Health Care Inc. and SavaSeniorCare Administrative Services LLC, both of Atlanta, and their principals, Leonard Grunstein, Murray Forman, and Rubin Schron, for accepting a kickback from Omnicare in return for pharmacy services contracts.

The settlement with Omnicare – the nation’s largest pharmacy that specializes in providing drugs to nursing home patients – resolves allegations that the company solicited or paid a variety of kickbacks. The company allegedly solicited and received kickbacks from a pharmaceutical manufacturer, Johnson & Johnson (J&J), in exchange for agreeing to recommend that physicians prescribe Risperdal, a J&J antipsychotic drug, to nursing home patients. J&J’s kickbacks to Omnicare took multiple forms, including rebates that were conditioned on Omnicare engaging in an "Active Intervention Program" for Risperdal and payments disguised as data purchase fees, educational grants, and fees to attend Omnicare meetings. The government further alleged that Omnicare regularly paid kickbacks to nursing homes by providing consultant pharmacist services at rates below the company’s cost and below the fair market value of such services in order to induce the homes to refer their patients to Omnicare for pharmacy services. The government also alleged that Omnicare solicited, and IVAX paid, $8 million in kickbacks in exchange for Omnicare’s agreement to purchase $50 million in drugs from IVAX. These allegations against Omnicare and IVAX, now a subsidiary of Teva Pharmaceuticals Industries, Ltd., are detailed in a complaint unsealed today and originally filed under the qui tam or whistleblower provisions of the False Claims Act in the District of Massachusetts.

"These defendants broke the law to take advantage of our nation’s most vulnerable citizens – the elderly and the poor," said Tony West, Assistant Attorney General for the Civil Division of the Department of Justice. "Illegal conduct like this can undermine the medical judgments of health care professionals, lead to patients being prescribed medications they do not need, and drive up the costs of health care." Assistant Attorney General West thanked the collaborative efforts of the Department of Justice’s Civil Division, the U.S. Attorney for the District of Massachusetts, the Office of Inspector General of the Department of Health and Human Services, the Food and Drug Administration Office of Criminal Investigations, and the Federal Bureau of Investigation.

"Omnicare and other nursing home pharmacies specialize in providing drugs to elderly patients who are often suffering from Alzheimer’s Disease or dementia and who have little or no control over the drugs they receive," said Michael Loucks, Acting U.S. Attorney for the District of Massachusetts. "Today’s settlement provides a strong message to these pharmacies, as well as to pharmaceutical companies and nursing homes, that the government will not tolerate the payment of kickbacks which can distort proper medical judgment and put profits ahead of good medical care."

As part of the settlement, Omnicare and IVAX have agreed to enter into separate corporate integrity agreements with the Office of Inspector General of the Department of Health and Human Services. Those agreements provide for procedures and reviews to be put in place to avoid and promptly detect conduct similar to that which gave rise to these matters.

In a separate action, the United States alleges that Omnicare, Mariner Health Care, SavaSenior Care, Grunstein, Forman, and Schron conspired to arrange for Omnicare to pay the nursing home chains $50 million in exchange for the right to continue providing pharmacy services to the nursing homes, which together constituted one of Omnicare’s largest customers. According to the government’s complaint, these defendants attempted to disguise the $50 million kickback as a payment to acquire a small Mariner Health Care business unit that had only two employees and was worth far less than $50 million. After they became aware of the government’s investigation, Grunstein, Forman, and Schron allegedly created backdated documents in a further attempt to hide the kickback. These allegations are detailed in a separate complaint that was unsealed today. Today’s settlement resolves the allegations against Omnicare and IVAX; the United States will proceed with its case against the Mariner Health Care defendants, which was originally filed as a whistleblower action.

WASHINGTON – The United States has filed a lawsuit against Patric LeHouillier, an attorney based in Colorado Springs, Colo., alleging that he violated the Americans with Disabilities Act (ADA) by denying a woman with a service animal access to his offices, the Justice Department announced. The complaint, filed today in federal court in Denver, alleges that the attorney denied access to a woman, her husband and her attorney because the woman was accompanied by her service animal, an Australian Shepherd dog trained to provide disability-related assistance.

"The Americans with Disabilities Act ensures that individuals with disabilities are guaranteed the same rights and access granted to everyone, and it has prohibited discrimination against individuals who use service dogs for almost 20 years," said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. "The Justice Department is committed to enforcing the ADA to protect the rights of persons with disabilities and to ensuring that all services providers understand their obligation to provide equal access."

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

Title III of the ADA prohibits discrimination by lawyers, doctors, hospitals, restaurants, hotels, retail stores, private transportation providers and other private businesses and nonprofit organizations that provide services to the public. Title II of the ADA prohibits discrimination by public entities, including state and local governments and public transportation providers. All of these entities are prohibited from excluding individuals with disabilities from their facilities, services and programs because they use service animals. If any of these entities has a rule excluding pets or other animals, it must make an exception to that rule and permit an individual with a disability to be accompanied by a service animal.

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

WASHINGTON – The Justice Department announced today the largest monetary payment ever obtained by the department in the settlement of a case alleging housing discrimination in the rental of apartments. Los Angeles apartment owner Donald T. Sterling has agreed to pay $2.725 million to settle allegations that he discriminated against African-Americans, Hispanics and families with children at apartment buildings he controls in Los Angeles. The settlement must be approved by U.S. District Judge Dale S. Fischer.

"Housing is a basic human need, and yet decades after passage of the Fair Housing Act, far too many still encounter barriers like discrimination. Particularly in times of economic distress and rising foreclosures, we must remain vigilant to ensure all individuals have equal access to housing," said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. "The magnitude of this settlement should send a message to all landlords that we will vigorously pursue violations of the Fair Housing Act."

The lawsuit, filed by the Justice Department in August 2006, alleged that the defendants, Donald T. Sterling, his wife Rochelle Sterling and the Sterling Family Trust, engaged in discriminatory rental practices on the basis of race, national origin and familial status (having children under 18) at various apartment buildings that they own and manage in Los Angeles. Among other things, the suit alleged that the defendants discriminated against non-Korean tenants and prospective tenants at buildings the defendants owned in the Koreatown area of Los Angeles.

In court filings, for example, the United States presented evidence that the defendants’ employees prepared internal reports that identified the race of tenants at properties the defendants purchased in Koreatown. Additionally, the defendants made statements to employees at Koreatown buildings indicating that African-Americans and Hispanics were not desirable tenants. The United States also presented expert analysis in court filings showing that the defendants rented to far fewer Hispanics and African-Americans in Koreatown which than would be expected based on income and other demographic characteristics.

The defendants, who manage their apartments under the name Beverly Hills Properties, own and manage approximately 119 apartment buildings comprising over 5,000 apartments in Los Angeles County. The settlement would also resolve two related lawsuits filed by former tenants at one of the properties. The two families, an African-American family and an interracial married couple with bi-racial children, alleged that the defendants demolished the private yards that had been part of their apartment and took other actions against them because of their race.

The settlement, which is memorialized in a proposed consent order that the parties have submitted to the court for approval, would require the defendants to pay a $100,000 civil penalty to the United States. Under the settlement, the defendants would also pay $2.625 million into a fund that would be used to pay monetary damages to persons who were harmed by the defendants’ discriminatory practices, including the tenants in the two related lawsuits discussed above. Any money left over would go to further fair housing education or enforcement in Los Angeles. The terms of the distribution of the $2.625 million will be determined in a separate disbursement order that will be submitted by the United States for approval to the Court.

In addition to the payments in damages and civil penalties, the proposed consent order would require the defendants to take various steps to ensure non-discriminatory practices at their Los Angeles County rental properties. Among other things, the proposed consent order would:

* Enjoin the defendants from discriminating on the basis of race, national origin, and familial status;

* Require the defendants to implement a self-testing program over the next three years to monitor their employee’s compliance with fair housing laws at their Los Angeles County properties. The testing would be conducted by an independent contractor that would report the results to the defendants and the United States;

* Require the defendants to maintain non-discriminatory practices and procedures; and

* Require the defendants to obtain fair housing training through an independent contractor for their employees who participate in renting, showing or managing apartments at the Los Angeles County properties.

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 - John A. Campbell, a resident of Portage, Mich., was sentenced to 60 months in prison today by the Honorable Janet T. Neff of the U.S. District Court in the Western District of Michigan for conspiring to defraud the United States, the Justice Department and Internal Revenue Service (IRS) announced. In April 2008, Campbell, who is a former partner in and resident director of the Kalamazoo, Mich., office of the law firm of Miller, Canfield, Paddock & Stone P.L.C., pleaded guilty to one count of conspiring to defraud the United States.

Campbell’s client, Oskar René Poch, a resident of Hickory Corners, Mich., was sentenced today to one year of probation and ordered to pay restitution of $217,830.44 and a fine of $100,000. Poch, who owned and operated Trillium Staffing, an employee-leasing company in Kalamazoo, pleaded guilty to corruptly endeavoring to obstruct the administration of the Internal Revenue laws in April 2008 and cooperated with the government’s investigation.

According to statements made in court and public documents, Campbell admitted that from at least 1999 through at least 2006 he agreed with the four principals and associates of an insurance company in the U.S. Virgin Islands known as Security Trust Insurance Company to market, promote, sell and implement fraudulent tax shelters, including so-called "loss of income" or "general business risk" insurance policies. The purpose of the tax shelters that Campbell and the others promoted and sold was to defraud the United States and impede the lawful functions of the IRS in computing the income taxes of the defendants’ U.S. taxpayer clients. Three of the tax shelter promoters, Peter J. Peggs of Prides Crossing, Mass.; Robert D. Larsen of Winter Park, Colo.; and Craig M. Stone, formerly of Fort Pierce, Fla., were convicted of conspiracy and other tax crimes in October 2009 after a four week jury trial before Judge Neff. The fourth tax shelter promoter, Anthony G. Merlo, a former resident of Fort Worth, Texas, and the U.S. Virgin Islands, pleaded guilty to conspiracy in May 2009 and is scheduled for sentencing later this month.

According to statements made in court and public documents, Campbell admitted that he conspired with the tax shelter promoters to sell these purported insurance policies to U.S. taxpayers as a tax deductible product, with the understanding that the purchasers would have most of their premiums returned to them in a non-taxable manner, such as through the use of "loans" from offshore foreign corporations which the defendants helped the U.S. taxpayers set up in tax haven countries like Nevis and the Bahamas. Campbell also admitted that he and the tax shelter promoters agreed to conceal from the IRS several key facts about the returned funds, and that they agreed to alter, conceal and destroy documents regarding the program as well.

According to statements made in court and public documents, after Campbell introduced Poch to the product, Poch caused his companies to purchase more than $3.9 million of this insurance product in the years 1999, 2000 and 2001. Poch improperly deducted the premiums as a business expense, fraudulently saving over $1.63 million in taxes for the three year period. Finally, Poch paid Campbell’s firm to set up a foreign corporation and trust in Nevis and later the Bahamas, through which Poch later had access to over $3 million of his insurance premiums. As part of the conspiracy, Campbell arranged for Poch to receive millions in the form of "loans" to Poch and his businesses, which were never repaid by Poch.

According to statements made in court and public documents, Poch knowingly provided misleading, incomplete and false answers to IRS revenue agents during a June 2002 interview conducted in a civil audit of his 1999 tax return. Poch admitted that he provided these answers in order to obstruct the IRS audit. However, Poch cooperated with the government’s investigation and testified at the trial of Campbell’s co-conspirators. Since pleading guilty, Poch has repaid the $1.63 million in taxes to the IRS, using, in part the funds left in the foreign corporation’s bank account.

Acting Assistant Attorney General John A. DiCicco thanked U.S. Attorney Donald A. Davis and the U.S. Attorney’s Office for the Western District of Michigan for their assistance in the prosecution of this case. Acting Assistant Attorney General DiCicco also thanked Tax Division trial attorneys Richard M. Rolwing, Patrick J. Murray and Jessica Nuzzelillo who prosecuted the case, as well as the IRS-Criminal Investigation agents who investigated the case.

Additional information about the Justice Department’s Tax Division and its enforcement efforts may be found at http://www.usdoj.gov/tax .

WASHINGTON – The owner and operator of a Houston-area durable medical equipment (DME) company today pleaded guilty to defrauding the Medicare program, announced Assistant Attorney General of the Criminal Division Lanny A. Breuer, U.S. Attorney Tim Johnson of the Southern District of Texas and Daniel R. Levinson, Inspector General of the Department of Health & Human Services (HHS).

Noel Wayne Jhagroo, 47, pleaded guilty to conspiracy to commit health care fraud before U.S. District Judge Vanessa Gilmore in the U.S. District Court in Houston.  In his plea, Jhagroo admitted that he owned and operated a DME company called Trucare Medical Equipment Services (Trucare), and that he billed Medicare for equipment and supplies that were in most instances medically unnecessary, or were never actually provided to Medicare beneficiaries.  Sentencing has been scheduled for Feb. 23, 2010.

Jhagroo admitted that beginning in April 2004 and continuing through July 2009, he conspired with others to submit approximately $962,000 in fraudulent claims to Medicare.  Specifically, Jhagroo admitted that he billed Medicare for enteral nutrition products that, according to Medicare regulations, were only to be used for patients who had feeding tubes inserted or surgically implanted in their noses, mouths or stomachs. Only one of the numerous Medicare beneficiaries for whom Jhagroo submitted bills to Medicare for such nutrition products had such a tube. Jhagroo also admitted to actually delivering only a fraction of the products for which he billed Medicare. 

In addition, Jhagroo admitted to billing Medicare for medically unnecessary orthotic devices, many of which were components of so-called Arthritis Kits, or "Artho Kits."  These kits, which included braces for both sides of the body as well as related accessories such as heating pads, were purportedly to be used for the treatment of arthritis-related conditions, even though the defendant admitted that he knew the kits were not medically appropriate for such conditions. 

Jhagroo admitted to billing Medicare approximately $4,000 per kit, and to providing beneficiaries with inferior kits consisting of less expensive, lightweight neoprene sleeves, which were often of an improper size for the beneficiary.              

In his plea, Jhagroo admitted that in August of 2004, he and a codefendant agreed to a kickback arrangement whereby he would pay the codefendant in exchange for the referral of Medicare beneficiaries for whom he would supply DME, and then bill Medicare for the equipment through Trucare.  Jhagroo admitted that the codefendant would recruit Medicare beneficiaries for the purpose of filing claims with Medicare for DME that was medically unnecessary or was not provided. 

The case is being prosecuted by Trial Attorney Katherine Houston of the Criminal Division’s Fraud Section, and was investigated by the FBI and HHS, Office of the Inspector General. 

The case was brought as part of the Medicare Fraud Strike Force (MFSF), supervised by the Criminal Division’s Fraud Section and U.S. Attorney Tim Johnson of the Southern District of Texas.

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 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.

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

Each of the Strike Force teams across the separate phases is 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.

WASHINGTON- On Nov. 3, 2009, the Justice Department will monitor elections in the following jurisdictions to ensure compliance with the Voting Rights Act of 1965 and other federal voting rights statutes: the cities of Lowell and Springfield, Mass.; the city of Hamtramck, Mich.; Middlesex County and the borough of Penns Grove, N.J.; Orange County and Queens, N.Y., and the city of Philadelphia.

Under the Voting Rights Act, the Justice Department is authorized to ask the U.S. Office of Personnel Management (OPM) to send federal observers to areas that are certified by the Attorney General or by a federal court order. Federal observers will be assigned to monitor polling place activities by court order in Springfield and Penns Grove. Both cities are required to provide Spanish-language assistance at the polls to voters according to the minority language provisions of the Voting Rights Act. The observers will watch and record activities during voting hours at polling locations in these cities.

In addition, Justice Department personnel will monitor elections in Lowell, Hamtramck, Middlesex County, Orange County, Queens and Philadelphia for compliance with the Voting Rights Act.

In all of these jurisdictions, Civil Rights Division attorneys will coordinate the federal activities and maintain contact with local election officials.

Each year, the Justice Department deploys hundreds of federal observers from OPM, as well as departmental staff, to monitor elections across the country. To file complaints about discriminatory voting practices, including acts of harassment or intimidation, voters may call the Voting Section of the Justice Department’s Civil Rights Division at 1-800-253-3931.

Visit http://www.usdoj.gov/crt/voting/index.htm for more information about the Voting Rights Act and other federal voting laws.

WASHINGTON - The Justice Department today announced a settlement agreement with Glynn County, Ga., 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). The Glynn County agreement is the 170th reached under Project Civic Access and the ninth 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 in various locations throughout the country to identify modifications to programs and facilities necessary to comply with ADA requirements. Depending on the circumstances in each community, the agreements address specific areas where access can be improved.

"Recognizing that civic access is a civil right, Glynn County has agreed to make improvements that will provide the full array of civic opportunities to county residents and visitors with disabilities," said Thomas E. Perez, Assistant Attorney General of the Civil Rights Division. "We applaud Glynn County for entering into this agreement that will further the rights and opportunities of individuals with disabilities."

Glynn County is located in the southeast corner of Georgia. More than 11,000 of the county’s 73,000 residents are individuals with disabilities. The county seat is in Brunswick, and the county also includes St. Simons Island, Blythe Island and Jekyll Island. As a coastal city, Glynn County offers many outdoor recreational opportunities for residents and visitors, including boating, hiking, biking and bird watching.

Under the agreement, the county will:

• Make physical modifications to its facilities so that parking, routes into buildings, entrances, public telephones, restrooms, service counters and drinking fountains are accessible to people with disabilities;
• Continue to ensure that the 9-1-1 emergency service TTY calls are answered as quickly and effectively as other calls;
• Ensure that the county’s official Web site is accessible to persons with disabilities, including individuals who are blind or have low vision;
• Ensure equal access to all aspects of the county’s emergency management programs for persons with disabilities, including emergency preparation, notification, evacuation, sheltering, response and recovery; and
• Implement a plan regarding the accessibility of sidewalks and curb ramps throughout the county.

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 five years or until the parties agree that all actions required by the agreement have been completed, whichever is later.

People interested in finding out more about the ADA, today’s agreement with Glynn County, or the department’s Project Civic Access initiative can access the ADA home page at http://www.ada.gov or call the toll-free ADA Information Line at (800) 514-0301 or (800) 514-0383 (TTY).

WASHINGTON – A federal grand jury in Orlando, Fla., has indicted a former Federal Bureau of Prisons corrections officer on charges related to a fatal assault on an inmate in March 2005. Michael Kennedy was charged with one count of conspiring with others to violate the federal civil rights of inmate Richard Delano and one count of violating Delano’s civil rights by arranging for another inmate to assault Delano. The indictment was unsealed today in conjunction with Kennedy’s initial appearance in court.

Each count carries a sentence of up to life imprisonment and a $250,000 fine. A trial has not yet been scheduled.

The grand jury charged that on Feb. 28, 2005, Kennedy and a co-conspirator, fellow Bureau of Prisons corrections officer Erin Sharma, agreed to move Delano into the cell of another inmate at the Coleman Federal Correctional Complex in Coleman, Fla. The indictment alleges that Kennedy and Sharma knew that the inmate was likely to assault Delano, that the move was in retaliation for a prior altercation between Delano and Sharma, and that Sharma encouraged the inmate to assault Delano. According to the indictment, Kennedy moved Delano into the inmate’s cell on March 1, 2005, and the inmate assaulted Delano three days later. Delano later died from the injuries he suffered during that assault.

 

On July 29, 2009, a federal jury in Orlando found Sharma guilty of federal civil rights charges related to this incident, and on Oct. 26, 2009, she was sentenced to life in prison in connection with her conviction on those charges.

The case will be prosecuted by Assistant U.S. Attorney Bruce Ambrose from the U.S. Attorney’s Office, and Trial Attorney Douglas Kern from the Civil Rights Division of the U.S. Department of Justice.

 

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

 

 

The Mexican government has extradited 11 defendants to face trial in the United States.  The defendants are accused of various crimes, including murder, sex offenses, drug trafficking and moneylaundering in Texas, Washington, Florida, Indiana, California and Maryland.                                                         

With the arrival of these 11 individuals, Mexico has now extradited 100 defendants to the United States in 2009, the highest yearly number of extraditions from Mexico to date.  The extradition of 95 defendants in 2008 was the previous record number of extraditions for one year from Mexico. 

"The extradition of these 11 defendants exemplifies the strong cooperative relationship between the United States and Mexico," said Attorney General Eric Holder.  "Each year since 2001, Mexico has increased the number of defendants it extradites to the United States.  By ensuring that alleged criminals are held accountable, we send a strong message that fleeing across the border does not mean you will escape justice.  I am looking forward to meeting Attorney General Chavez tomorrow and discussing additional ways we as law enforcement partners can work together to hold such defendants, particularly alleged leaders and associates of drug cartels, accountable."

The defendants arrived in the United States on Saturday, Oct. 31, 2009, and will be transferred to the jurisdictions in which they face charges.  The extradited defendants, and the charges they face, are listed below: 

DISTRICT OF COLUMBIA

Victor Manuel Contreras Soltero and Arturo Casas Vasquez are Mexican citizens indicted by the Criminal Division’s Narcotics and Dangerous Drugs Section in the U.S. District Court for the District of Columbia for conspiracy to import and to distribute cocaine and distribution of cocaine.  Contreras Soltero and Casas Vasquez are alleged to have directed the importation of tons of cocaine from Mexico into the United States between 2002 and 2005.

SOUTHERN DISTRICT OF FLORIDA

Leonardo Vasquez Estrada, a Mexican citizen, was charged in the U.S. District Court for the Southern District of Florida with conspiracy to commit money laundering and 12 counts of money laundering.  Vasquez Estrada is alleged to have been a member of an organization that laundered money from drug sales in the United States through Mexican banks from 2003 to 2007.

SOUTHERN DISTRICT OF TEXAS

Jesus Emilio Rivera Piñon is a Mexican citizen charged in the U.S. District Court for the Southern District of Texas with conspiracy to possess with the intent to distribute cocaine, possession with the intent to distribute cocaine and money laundering.  Rivera Piñon is alleged to have been involved in 1989 with an organization responsible for distributing thousands of pounds of cocaine in the United States.  In 1995, he became the first Mexican citizen ordered extradited to the United States by a Mexican court.   His return was delayed while he served a prison sentence for a conviction in Mexico.

STATE OF INDIANA

Francisco Contreras is a Mexican citizen charged in Marion County, Indiana, with five counts of sexual offenses against a minor for allegedly molesting a young girl repeatedly in 2002.

STATE OF TEXAS

Rodolfo Villela Tovar is a Mexican citizen charged in Travis County, Texas, with murder. Villela Tovar allegedly shot his ex-girlfriend to death on May 28, 2008.

Jesus Manuel Garza is a Mexican citizen charged in Sutton County, Texas, with murder and other crimes. On the night of Jan. 13, 2008, Garza allegedly shot a co-worker to death, stole the co-worker’s wallet and truck, and fled to Mexico.

Cesar Pacheco is a Mexican citizen charged in El Paso, Texas, with attempted murder, sexual assault and other crimes. On the night of May 5, 2005, Cesar and another man allegedly broke into the home of Cesar’s aunt and raped her. The two are alleged to have stabbed her multiple times and attempted to suffocate her with a plastic bag after she recognized her assailants.

STATE OF CALIFORNIA

Gabriel Cabrera Lopez is a Mexican citizen, charged in Riverside County, Calif., for sex offenses against a child.  Beginning in the early 1990s and ending in 2005, Lopez is alleged to have molested and raped his young daughter and a niece.

Arnoldo Vargas Esteves is a Mexican citizen charged in Riverside County, Calif., with murder. Esteves allegedly shot and killed a member of a rival gang during a fight on Dec. 18, 1998.

STATE OF MARYLAND

Joel Nunez Valles

has been charged in Howard County, Md., with murder and robbery. In October 2005, Nunez Valles allegedly stabbed his brother 19 times after his brother refused to lend him money. Nunez Valles then allegedly stole $2,000 and fled to Mexico.

 

Six detainees who are Chinese nationals of Uighur ethnicity have been transferred from the detention facility at Guantanamo Bay to the control of the Republic of Palau.

Ahmad Tourson, Abdul Ghappar Abdul Rahman, Edham Mamet, Anwar Hassan, Dawut Abdurehim and Adel Noori were resettled in Palau earlier today.

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

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

These transfers were carried out under an arrangement between the United States and the Republic of Palau. The United States has coordinated with the Republic of Palau to ensure the transfers take place under appropriate security measures and will continue to consult with the Republic of Palau regarding the individuals.

"As we near the completion of our review of detainees at Guantanamo Bay, we will continue to work closely with the Department of State to implement transfer decisions, and we are grateful to the Republic of Palau for its assistance in the resettlement of these individuals," said Matthew Olsen, Executive Director of the Guantanamo Review Task Force.

Since 2002, more than 550 detainees have departed Guantanamo Bay for other destinations, including Albania, Algeria, Afghanistan, Australia, Bangladesh, Bahrain, Belgium, Bermuda, Chad, Denmark, Egypt, France, Iran, Iraq, Ireland, Jordan, Kuwait, Libya, Maldives, Mauritania, Morocco, Pakistan, Portugal, Russia, Saudi Arabia, Spain, Sweden, Sudan, Tajikistan, Turkey, Uganda, United Kingdom and Yemen. 

WASHINGTON - The United States today sued Lincoln Fabrics Ltd., a Canadian company, and Lincoln Fabrics Inc., aka Lincoln Textiles Inc., its American subsidiary, under the False Claims Act in connection with the companies’ weaving and sale of defective Zylon fabric which was used as the key ballistic material in bullet-proof vests, the Justice Department announced.

The United States alleges that the companies were aware that the woven Zylon degraded quickly over time, especially in hot and humid conditions, and that the companies knew that this degradation rendered bullet-proof vests containing woven Zylon unfit for use. The government further alleges that, despite this knowledge, the companies did not inform the United States or stop selling woven Zylon for ballistic applications.

"Companies that knowingly sell the government defective bullet-proof vests not only submit false claims, they put the lives of our law enforcement personnel at risk," said Tony West, Assistant Attorney General for the Department’s Civil Division. "The United States takes very seriously allegations that these two companies knowingly participated in the manufacture and sale of defective bullet-proof vests."

The United States is already pursuing lawsuits against Toyobo Co., the manufacturer of the Zylon fiber; Honeywell International Inc., the manufacturer of a Zylon laminate product called Z Shield; two body armor manufacturers - Second Chance Body Armor Inc. (now SCBA Liquidation Inc.) and First Choice Armor Inc., as well as several executives of the two companies. The government has previously settled for more than $47 million with five other entities that were involved in the manufacture or sale of defective Zylon vests, including two other weavers of ballistic Zylon.

Assistant Attorney General West acknowledged the contributions of the many government agencies assisting the government’s ongoing investigation of those who participated in the manufacture and sale of Zylon vests, including the Justice Department’s Civil Division; U.S. Attorney’s Office for the District of Columbia; General Services Administration Office of the Inspector General; Department of Homeland Security, Office of Inspector General; Department of the Treasury’s Inspector General for Tax Administration; Defense Criminal Investigative Service; U.S. Army Criminal Investigative Division; Air Force Office of Special Investigations; Department of Energy Office of the Inspector General; U.S. Agency for International Development Office of the Inspector General; Federal Bureau of Investigation; and Defense Contracting Audit Agency.

 

WASHINGTON – A hospital group based in McAllen, Texas, has agreed to pay the United States $27.5 million to settle claims that it violated the False Claims Act, the Anti-Kickback Statute and the Stark Statute between 1999 and 2006, by paying illegal compensation to doctors in order to induce them to refer patients to hospitals within the group, the Justice Department announced today. McAllen Hospitals L.P., d/b/a/ South Texas Health System, is a subsidiary of Universal Health Services Inc., a company based in Pennsylvania that owns hospitals and other health care centers around the country.

The settlement announced today involved allegations that the defendants had entered into financial relationships with several doctors in McAllen in order to induce them to refer patients to the defendants’ hospitals. The government alleged that these payments were disguised through a series of sham contracts, including medical directorships and lease agreements. Under the Stark Statute, Medicare providers are prohibited from billing Medicare for referrals from doctors with whom the providers have a financial relationship, unless that relationship falls within certain exceptions.

"Improper financial relationships between health care providers and their referral sources can corrupt a physician's judgment about the patient's true healthcare needs," said Tony West, the Assistant Attorney General for the Department’s Civil Division. "In addition to yielding a substantial recovery for taxpayers, this settlement should deter similar conduct in the future and help make health care more affordable for patients."

The settlement resolves allegations raised against both the parent and the subsidiary in a qui tam or whistleblower lawsuit filed in 2005 by Bruce Moilan, a former employee of the defendants, United States ex rel. Moilan v. McAllen Hospitals, L.P., et al., Case No. M-05-CV-263 (S.D. Tex.). Under the False Claims Act, private citizens can bring suit on behalf of the government and share in any amounts that are obtained through that legal action. Mr. Moilan will receive $5.5 million from the proceeds of the settlement.

"Payment by hospitals to doctors for patient referrals violates federal law and carries the inherent risk that the independent judgment of doctors regarding the best facility for the treatment and care for a particular patient may be adversely influenced; the patient and his medical needs should always be foremost," said Tim Johnson, U.S. Attorney for the Southern District of Texas. "Our district will continue in its joint effort with our law enforcement partners to enforce these federal laws that protect the public."

As part of the agreement, South Texas Health Systems will enter into a 5-year Corporate Integrity Agreement that requires it to establish procedures for tracking and evaluating financial arrangements between its health care facilities and their referral sources. The agreement also requires specific training for South Texas Health System representatives involved with financial arrangements, an independent third-party’s annual review of the health system’s compliance with certain Corporate Integrity Agreement obligations involving financial arrangements, and a report to the Office of Inspector General by the independent third-party reflecting the results of the review.

"Improper financial arrangements like these can increase the cost of health care by shifting provider attention to the quantity of treatments, rather than keeping it focused on the quality of care," said Department of Health and Human Services Inspector General Daniel R. Levinson. "The CIA is important because it requires South Texas Health System to put systems in place to prevent this conduct from happening in the future."

Of the $27.5 million to be paid by the defendants, the federal government will receive $25,208,333 and the state of Texas will receive $2,291,667 for claims submitted to the state Medicaid program.

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

WASHINGTON —A federal jury in Aberdeen, S.D., has found a South Dakota man guilty for smuggling the hide of a leopard into the United States in violation of the Convention on International Trade in Wild Flora and Fauna (CITES), an international treaty that regulates international shipments of listed species, to which the United States and 172 other countries are members. The leopard allegedly was hunted and killed in South Africa illegally. Wayne D. Breitag of Aberdeen, S.D., was also found guilty for violations of the Lacey Act, a federal wildlife statute.

Leopards (Panthera pardus) are listed on Appendix I of CITES. CITES requires that prior to the transport of any part of an Appendix I species from one country to another, an export permit from the country of origin (or a re-export certificate), and an import permit from the country to which the specimen will be shipped, must be obtained and accompany the shipment. The CITES authorities in South Africa set a yearly quota on the number of export permits issued by that country for Appendix I species, such as leopards. These permits are only issued for leopards which have been killed with a valid hunting permit.

According to the August grand jury indictment, Breitag traveled to South Africa in August 2002 to hunt leopards while guided by a South African outfitter named Jan Groenewald Swart doing business as "Trophy Hunting Safaris." Breitag shot and killed a leopard at that time.

Swart arranged to have the hides smuggled from South Africa into Zimbabwe, where he purchased fraudulent CITES export permits for the leopard hide. Breitag then submitted applications to the U.S. Fish and Wildlife Service (USFWS) falsely claiming that he hunted and killed the leopard in Zimbabwe. On Nov. 5, 2004, USFWS inspectors seized a shipment of five leopard hides and three leopard skulls at the Denver International Airport, which included the hide of the leopard that Breitag killed illegally in South Africa in 2002.

Smuggling is punishable by up to 20 years in prison and up to a $250,000 fine, while the Lacey Act violations are punishable by up to 5 years in prison and up to a $250,000 fine.

On May 21, 2007, Jan Groenewald Swart pleaded guilty to smuggling charges in the U.S. District Court for the District of Colorado for his role in the illegal hunts. Swart served an eighteen-month prison sentence, has since been released and deported.

The investigation of this case was lead by Special Agents of the U.S. Fish and Wildlife Service. The case is being prosecuted by the Environmental Crimes Section of the U.S. Department of Justice and the U.S. Attorneys’ Offices for the District of South Dakota and Colorado.

WASHINGTON -- The Justice Department announced today the release of a new video aimed at educating employers about the employment provisions of the Americans with Disabilities Act. Ten Employment Myths: Information about the Americans with Disabilities Act uses a question-and-answer format to express common misconceptions, fears and false assumptions that many employers have about employees with disabilities. The video refutes these unfounded myths, explains the ADA in common sense terms and highlights the advantages of hiring qualified persons with disabilities.

"With more students with disabilities attending colleges and universities than ever before, employers should update their thinking about this highly qualified labor pool. Ten Employment Myths will help employers understand how unfair it is when employees with disabilities are denied jobs because of employers’ misconceptions and unfounded assumptions," said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division.

October is Disability Employment Awareness Month.

This fully accessible seventeen-minute video can be used for ADA training as well as for presentation to local Chambers of Commerce, Rotary Clubs, merchants associations, and similar organizations. Single copies in DVD format can be ordered through the toll-free ADA Information Line at 800-514-0301 (voice) or 800-514-0383 (TTY). An online streaming version will be available soon on the ADA Web site at www.ada.gov.

The new video is a companion to Ten Small Business Mistakes, which dispels common misunderstandings that many small businesses have about title III of the ADA. Both videos were produced for the Justice Department’s ADA Technical Assistance Program, which educates the public about the ADA to increase voluntary compliance and is an integral component of the Department’s overall ADA enforcement efforts.

The ADA guarantees individuals with disabilities equal access to employment, state and local government services, and services that businesses provide to the public. Those interested in finding out more can call the ADA Information Line or access the ADA Web site.

WASHINGTON - Roderick Prescott, a resident of Orem, Utah, and a former principal of National Trust Services (NTS) in San Jose, Calif., and later Selma, Ore., has been sentenced to 30 months in prison for tax evasion, the Justice Department and Internal Revenue Service (IRS) announced today.

 In June 2009, Prescott pleaded guilty to tax evasion and admitted to evading at least $550,000 in personal income taxes for 1998 and 1999. According to the indictment, the plea agreement and the government’s trial brief, Prescott and his former business partner Leroy Fritts (now deceased) earned significant income from the nationwide promotion and sale of abusive trusts through NTS, which they founded in 1988. Prescott and Fritts deposited approximately $3.5 million into various bank accounts through the sale of such trusts. They also earned income from recruiting clients of NTS to invest in Fountainhead Global Trust (FGT), a purported offshore investment that promised returns as high as 50 percent per year.

According to the government’s trial brief, FGT was a Ponzi scheme which collected approximately $20 million in investors’ funds from 1995 through 1999. FGT transferred some of the money to an offshore account in the Cayman Islands at the Bank of Bermuda, ostensibly to be invested in high-interest debt through a Florida entity called "Cash 4 Titles." Prescott and Fritts then funneled part of the money in the account back to themselves. They also took large sums of investors’ funds without ever sending the money offshore. The government asserts that instead, they spent the funds often by direct payments from FGT bank accounts on luxury goods and real estate. Eventually the scheme broke down and the vast majority of investors lost their full investments.

According to the government’s trial brief, despite making significant income from NTS and FGT, neither Prescott nor Fritts filed any individual federal income tax returns for 1998 or 1999. Prescott last filed a tax return in 1991. Prescott and Fritts used FGT money to purchase, among other items, a nearly $3 million ranch near Grants Pass, Ore., on which they began construction of two custom-built luxury log homes. The construction budget was approximately a combined $2 million, and they spent over $465,000 before halting construction in 1999. Prescott and Fritts also purchased solar panels for the ranch for over $328,000, frozen food in anticipation of a year 2000 apocalypse for over $1.1 million and numerous vehicles and other personal items.

According to the government’s trial brief, Prescott and Fritts used an array of purported trusts and related bank accounts, including numerous offshore bank accounts at the Bank of Bermuda in the Cayman Islands, to conceal their income from the IRS. Prescott and Fritts also used false or fictitious taxpayer identification numbers and offshore credit cards in fake names issued to them by the Bank of Bermuda in the Cayman Islands.

In June 2003, a federal court in San Diego Prescott and his business, Trust Educational Services, from selling trust schemes falsely claiming that personal expenses incurred by customers could be paid through a trust in order to obtain tax benefits not available to individuals. Prescott agreed to the court order and was required to give the Justice Department records showing the names of customers who attended his workshops or used his "trust system. According to papers filed by the Justice Department in the case, Prescott’s bogus trusts encouraged purchasers to under report their income and claim improper deductions on their tax returns, resulting in an estimated $135 million revenue loss to the U.S. Treasury.

Acting Assistant Attorney General John A. DiCicco commended the IRS-Criminal Investigation special agents who investigated the case, as well as Tax Division trial attorneys Jay Nanavati and Timothy Stockwell who prosecuted the case.

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

Miami resident Daisy Martinez pleaded guilty today in U.S. District Court in Detroit to participating in a conspiracy to defraud the Medicare program.  

Martinez, 50, pleaded guilty to one count of conspiracy to commit health care fraud before U.S. District Judge Gerald Rosen.  At her sentencing, which is scheduled for Feb. 11, 2010, Martinez faces a maximum penalty of 10 years in prison and a $250,000 fine.

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

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

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

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

 
Martinez’s part-ownership of Sacred Hope and XPC was not her first involvement with Detroit-area clinics that purported to specialize in infusion and injection therapy In her plea, Martinez admitted that in approximately March 2006, she became involved in a scheme to recruit Medicare beneficiaries to visit Dearborn Medical Rehab Center (DMRC), a Dearborn, Mich., clinic that operated in much the same manner as Sacred Hope and XPC.   Martinez, along with other co-conspirators, agreed to recruit and pay Medicare beneficiaries at DMRC in exchange for a percentage of the Medicare reimbursements the beneficiaries would generate.  Martinez admitted that she and her co-conspirators sent Arnaldo Rosario to Detroit to oversee the payment of the patients, and she and her partners provided the cash to pay the kickbacks.  As at Sacred Hope and XPC, DMRC routinely billed the Medicare program for services that were medically unnecessary and, in many instances, never provided.

 
Martinez admitted that between approximately March 2006 and March 2007, she and her co-conspirators caused the submission of approximately $15,312,000 in false and fraudulent claims to the Medicare program for services purportedly provided at Sacred Hope, XPC and DMRC.  Medicare paid approximately $10,765,000 on those claims.

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

 
Since the inception of Strike Force operations in March 2007 – Miami (Phase One), Los Angeles (Phase Two), Detroit (Phase Three) and Houston (Phase Four) – the Strike Force has obtained indictments of 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.

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

Each of the Strike Force teams across the separate phases is 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.

Donald Mathias, 64, has been indicted for allegedly traveling to the Philippines in 2007 and 2008 to engage in sexual conduct with minors .  

Mathias, whose last known residence is in the Southern District of Florida, was arraigned today before Magistrate Judge Barry S. Seltzer in U.S. District Court in Fort Lauderdale, Fla.

Mathias was charged in an indictment filed on Oct. 27, 2009, with one count of conspiring to engage in illicit sexual conduct in a foreign place and traveling in foreign commerce for the purpose of engaging in illicit sexual conduct; six counts of offering to buy a child in order to depict the child in child pornography; six counts of coercion and enticement of a minor to engage in sexual activity; three counts of traveling in foreign commerce for the purpose of engaging in illicit sexual conduct; and four counts of engaging in illicit sexual conduct in a foreign place.

Mathias allegedly arranged with the mother of two minor females in the Philippines to travel to the Philippines in April 2007 and December 2007 to engage in sexual conduct with the minors and did so.  Mathias also allegedly arranged to travel again to the Philippines in December 2008 to engage in sexual conduct with the minors.  However, Philippine authorities received information about the arrangements and rescued the children before they met Mathias again. 

If convicted, Mathias faces up to life in prison and a fine of up to $250,000. 

Charges in an indictment are merely accusations and a defendant is presumed innocent unless and until proven guilty.

The case was investigated by U.S. Immigration and Customs Enforcement and the U.S. Postal Inspection Service, with assistance from the Philippines Department of Justice.  This case is being prosecuted by Trial Attorney Anitha Ibrahim of the Criminal Division’s Child Exploitation and Obscenity Section and Assistant U.S. Attorney Marlene Rodriguez of the U.S. Attorney’s Office for the Southern District of Florida.

WASHINGTON — A Beverly Hills, Calif.-based financial products and services firm, two of its executives and one former executive were indicted today for their participation in bid-rigging and fraud conspiracies related to contracts for the investment of municipal bond proceeds and other related municipal finance contracts, the Department of Justice announced. Today’s charges are the first to be filed in the Department’s ongoing antitrust investigation into the municipal bonds industry.

The nine-count indictment was filed today in the U.S. District Court for the Southern District of New York in Manhattan. The indictment charges Rubin/Chambers, Dunhill Insurance Services Inc., also known as CDR Financial Products Inc. (CDR); David Rubin, the owner and president of CDR; Zevi Wolmark, also known as Stewart Wolmark, CDR’s former chief financial officer and managing director; and Evan Andrew Zarefsky, CDR’s vice president, with engaging in separate bid-rigging and fraud conspiracies with companies that provide a type of contract, known as an investment agreement, to state, county and local governments and agencies throughout the United States. These public entities were seeking to invest money from a variety of sources, primarily the proceeds of municipal bonds that they had issued to raise money for, among other things, public projects.

In addition, CDR, Rubin, Wolmark and Zarefsky are charged with participating in two separate wire fraud schemes. Rubin, Wolmark and CDR are charged with a third wire fraud scheme. The two executives and former executive are also charged with obstructing the Internal Revenue Service (IRS). Zarefsky is charged with making a false statement to government agents. Rubin is charged with receiving a kickback through a fraudulent bank transaction. According to the indictment, the various crimes took place at different times from approximately 1998 until at least November 2006.

"The Justice Department is committed to protecting the competitive process and will hold accountable individuals and companies who participate in illegal and anticompetitive conduct," said Christine A. Varney, Assistant Attorney General in charge of the Department’s Antitrust Division.

According to the indictment, CDR was hired by public entities that issue municipal bonds to act as their broker and conduct what was supposed to be a competitive bidding process primarily for contracts for the investment of the money raised when municipal bonds are issued. Competitive bidding for those contracts is the subject of regulations issued by the U.S. Department of the Treasury and is related to the tax-exempt status of the bonds, which gives the Treasury the right to a portion of the earnings from a municipality’s investment agreement under certain circumstances. Compliance with the regulations is monitored by the IRS.

The indictment charges that CDR, Rubin, Wolmark and Zarefsky secretly manipulated and controlled the competitive bidding process in numerous ways to enrich themselves and the co-conspirator providers of the investment agreements, at the expense of the municipalities, the IRS, or both.

As a part of the bid-rigging conspiracy alleged in the indictment, CDR, Rubin, Wolmark, Zarefsky and other co-conspirators designated in advance which co-conspirator provider would be the winning bidder for certain investment agreements. According to the indictment, they also submitted or caused to be submitted to CDR intentionally losing bids. The indictment also alleges that co-conspirator providers paid kickbacks to CDR in the form of fees that were inflated or unearned in exchange for CDR’s assistance in controlling the bidding process and ensuring that certain providers won bids they were allocated.

As part of the fraud conspiracies alleged in the indictment, CDR, Rubin, Wolmark and Zarefsky gave particular co-conspirator providers information about the prices, price levels or conditions in competitors’ bids, a practice known as a "last look," which is explicitly prohibited by the Treasury regulations. In exchange, CDR received kickbacks from these providers and relied on them to submit intentionally losing bids when requested. The efforts by CDR and the three executives to control and manipulate the bidding for investment contracts, and the execution of a variety of certifications that covered up their scheme, also obstructed the IRS’s ability to monitor compliance with the Treasury regulations and to determine whether municipal issuers had correctly accounted for any money that was owed to the Treasury.

The charges announced today resulted from an ongoing investigation that is being conducted by the Antitrust Division’s New York Field Office, the FBI and IRS Criminal Investigation. The Division is coordinating its investigation with the Securities and Exchange Commission, the Office of the Comptroller of the Currency and the Federal Reserve Bank of New York.

"This case is fundamentally about collusion, the illegal rigging of a purportedly competitive bidding process," said Joseph M. Demarest Jr., Assistant Director-in-Charge of the FBI in New York. "The result was lower rates of return on the investment of bond proceeds for the state and local governments that hired CDR.  In a climate of economic austerity, the conduct of the defendants and co-conspirators seems particularly predatory."

"IRS Criminal Investigation agents are working every day with our partners to follow financial leads to the source of criminal activity," said Patricia J. Haynes, Special Agent in Charge, IRS Criminal Investigation New York Field Office. "We will continue to pursue individuals and companies who defraud the IRS."

The bid-rigging conspiracy that Rubin, Wolmark and Zarefsky are charged with carries a maximum penalty of 10 years in prison and a $1 million fine. The fraud conspiracies that Rubin, Wolmark and Zarefsky are charged with carry a maximum penalty of five years in prison and a $250,000 fine. The wire fraud charges against the three individuals each carries a maximum penalty of 20 years in prison and a $1 million fine. The false statement charge against Zarefsky carries a maximum penalty of five years in prison and a $250,000 fine. The fraudulent bank transaction charge against Rubin carries a maximum penalty of 30 years in prison and a $1 million fine. The obstruction of the IRS charge against the three individuals carries a maximum penalty of three years in prison and a $5,000 fine. The maximum fines for each of these offenses may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.

CDR faces a maximum fine of $100 million for the bid-rigging charge, $500,000 for each of the fraud conspiracies, and $500,000 for each of the wire fraud charges. The maximum fines for each of these offenses may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.

Anyone with information concerning bid rigging and related offenses in any financial markets should contact the Antitrust Division’s New York Field Office at 212-264-0390 or the FBI at 212-384-5000.

WASHINGTON – A Mobile, Ala., grand jury has indicted a waste disposal company, its president and top manager for offenses involving the illegal disposal of waste into the sewage treatment systems of Mobile and of neighboring municipalities, the Justice Department and the Environmental Protection Agency (EPA) announced today.

DHS Inc., operating under the name Roto Rooter; its president, Donald Gregory Smith; and manager William Wilmoth Sr. were charged today in a forty-three count indictment with numerous violations of the Clean Water Act and with fraud and conspiracy for having dumped into local sewers thousands of gallons of waste grease and oil that they had been hired to dispose of safely and legally. The indictment recites Mobile’s history of years of sewage overflows, inadequate wastewater treatment and polluting effluent caused by blockages of sewer lines and treatment works with solidified grease.

In response to lawsuits under the Clean Water Act, the city of Mobile entered into a court ordered agreement with EPA under which Mobile implemented a grease control program requiring restaurants and other food service establishments to install grease traps to prevent cooking oils from entering the sewer system. The indictment charges that Roto Rooter, on the representation that it would pump out the grease traps of restaurants and other commercial customers and dispose of their grease waste at legal facilities, instead discharged the grease through grease traps and manholes into the sewer lines that the defendants were being paid to prevent it from entering.

Roto Rooter employee, Michael L. Edington has entered guilty pleas today in federal district court in Mobile to having dumped from Roto Rooter pump trucks numerous loads of grease into area sewer systems between 2004 and 2006, to having falsified grease tracking manifests to make it appear that the waste had been disposed of properly, and to having conspired with the defendants named in the indictment to commit the illegal disposals and fraud with which they have all been charged.

Individuals who are found to have violated the Clean Water Act are subject to up to three years of incarceration per count, twenty years in prison for fraud, as well as monetary penalties.

The matter is being handled by the Justice Department’s Environmental Crimes Section, the U.S. Attorney’s Office for the Southern District of Alabama and EPA’s Criminal Investigation Division.

An indictment is a determination by a grand jury that there is probable cause to believe that offenses have been committed by a defendant. A defendant, of course, is presumed innocent until and unless he or she is proven guilty at trial.

The Justice Department today announced an agreement with LaPorte County, Ind., to improve access to all aspects of civic life for persons with disabilities. The agreement was reached under the department's Project Civic Access initiative, which aims to bring state and local governments into compliance with the Americans with Disabilities Act (ADA). This agreement is the 169th under Project Civic Access and the eighth this year.

 "Civic access is a civil right, and individuals with disabilities must have the opportunity to participate in public programs, services and activities on an equal basis with their neighbors," said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. "We appreciate LaPorte County’s commitment to ensuring that the civil rights promised in the Americans with Disabilities Act are granted to individuals with disabilities who live in or visit the county."

LaPorte County, founded in 1832, is located in northwestern Indiana, near the Chicago metropolitan area. More than 16 percent of the residents of LaPorte County have disabilities and will benefit from the agreement announced today.

 Under today's agreement, the county will:

• Make physical modifications to its buildings and parks so that parking, entrances, routes, toilet rooms, courtrooms, assembly areas, service counters and drinking fountains are accessible to persons with disabilities;
• Post, publish and distribute a notice to inform members of the public of the provisions of the ADA and their applicability to county programs, services, and activities;
• Amend its employment policies, as necessary, to comply with the regulations of the U.S. Equal Employment Opportunity Commission implementing the employment provisions of the ADA;
• Provide auxiliary aids necessary to ensure effective communication with persons who are deaf or hard of hearing and persons who are blind or have low vision;
• Ensure that each 9-1-1 call station is equipped with a text telephone (TTY) or computer equivalent and that TTY calls are answered promptly and correctly;
• Implement the La Porte County Sheriff Department’s Policy on Effective Communication with People Who are Deaf or Hard of Hearing, which provides for the county to make available interpreters and other auxiliary aids necessary to ensure effective communication with persons who are deaf or hard of hearing;
• Provide accessible polling places;
• Implement emergency management policies and procedures to ensure equal access for persons with disabilities, including preparation, notification, sheltering and response;
• Make modifications necessary to county sidewalks and curb ramps to provide accessible routes; and
• Ensure that the county’s official Web site is accessible to persons with disabilities, including people who are blind or have low vision.

The settlement agreement will remain in effect for three years from Oct. 28, 2009, or until all actions required by the agreement have been completed, whichever is later.

Project Civic Access was initiated to ensure that persons with disabilities have an equal opportunity to participate in civic life. As part of the project, department investigators, attorneys and architects conduct on-site surveys of state and local government programs and facilities in order to identify modifications needed for compliance with ADA requirements. The agreements contain a plan setting out the specific steps a community will take to improve access for persons with disabilities.

People interested in finding out more about the ADA, today's agreement with LaPorte County, Ind., 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).

WASHINGTON – The Justice Department announced today that it has reached a settlement that will resolve its suit filed on behalf of former Utah Army National Guardsman and current Air Force Reservist Matthew T. Denning against Stonescape Pavers LLC. The settlement must be approved by the federal court in Las Vegas. The Department’s complaint, filed in June 2009, alleges that Stonescape violated the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA) by terminating Denning during his statutorily protected reemployment time period. Under the terms of the settlement, embodied in an agreement that has been submitted to the court, Stonescape must provide Denning with $10,000 to compensate him for his lost wages and benefits as a result of Stonescape’s actions.

In its complaint, the Justice Department alleged that Denning was a salesman for Stonescape when he was called to active duty to deploy to Iraq with the Utah Army National Guard in January 2006. After he was honorably discharged in June 2006, he was reemployed by Stonescape. According to the complaint, Stonescape terminated Denning without cause in August 2006 during his statutorily-protected reemployment time period. The lawsuit was filed after the Labor Department’s Veterans’ Employment and Training Service completed an investigation of Denning’s complaint. Congress enacted USERRA in 1994 to protect service members from being disadvantaged in their civilian careers due to serving in the uniformed services. Among other things, USERRA prohibits employers from terminating a service member except for cause for 180 days after the employee’s date of reemployment if his or her recent period of uniformed service was more than 30 days but less than 181 days.

"We all have a duty to ensure the brave men and women who serve our country in uniform can land on their feet after they return from active duty. This settlement demonstrates our vigilant protection of the employment rights of our servicemembers, and our commitment to vigorous enforcement of the laws that protect them," said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division.

The Justice Department’s Civil Rights Division has given a high priority to the enforcement of servicemembers’ rights under USERRA. During 2009, the Civil Rights Division has filed 20 USERRA lawsuits on behalf of service members. Additional information about USERRA can be found on the Justice Department’s Web sites at http://www.justice.gov/crt/emp and http://www.servicemembers.gov/, as well as on the Labor Department’s Web site at http://www.dol.gov/vets/programs/userra/main.htm

WASHINGTON - The United States this week has filed civil injunction lawsuits across the country against seven individuals, the Justice Department announced today. The federal suits – filed in Los Angeles; Panama City, Fla.; Salt Lake City; Nashville, Tenn.; and Pocatello, Idaho – allege that the defendants promote a tax fraud scheme designed to siphon hundreds of millions of dollars from the U.S. Treasury through fraudulent tax refund claims.

Papers filed in the cases say the defendants prepared tax returns requesting a total of $562.4 million in bogus refunds. One defendant – Dick Jenkins, of Heber City, Utah – allegedly holds himself out as a CPA and requested a $210 million fraudulent refund for one customer. The Internal Revenue Service (IRS) catches the vast majority of the bogus tax returns and blocks the claimed refunds.

Under the tax fraud scheme, known as the "redemption" or "OID redemption" scheme, participants file a series of false IRS forms, including tax returns, amended returns, and Forms 1099 (including Form 1099-OID) or Forms W-2, to request fraudulent tax refunds based on phony claims of large income tax withholding. According to papers filed in these cases and earlier cases against other alleged scheme promoters, redemption scheme promoters are tax defiers who falsely tell customers that the federal government maintains "secret" accounts of money for its citizens. Promoters claim to be able to help customers access the secret funds by filing the false IRS forms.

Altogether, according to the IRS, redemption scheme participants (including customers of the defendants in the seven lawsuits filed this week) have requested a total of $3.3 trillion in fraudulent refunds.

"The scope of the misconduct alleged in these lawsuits is staggering," said John A. DiCicco, Acting Assistant Attorney General for the Justice Department’s Tax Division. "The IRS and Justice Department are working together closely to ensure that those who promote or participate in this large-scale attempted raid on the Treasury face all appropriate civil and criminal sanctions. Anyone who participates in this scheme can expect to not get the claimed refund, face very large civil penalties (up to 20 percent of the false claim), and where appropriate, face criminal prosecution with possible substantial prison sentences if convicted."

The Justice Department has previously brought other injunction suits to shut down redemption scheme promoters. A federal court in Sacramento found that tax preparer Teresa Marty had been using the same scheme to claim bogus refunds for her customers, and preliminarily barred her from preparing tax returns for others. The Government sued Nyla McIntyre and her Los Angeles-based company, Approved Financial Services Inc., to permanently bar them from preparing tax returns for others.

Listed below are details of the seven lawsuits, filed in U.S. District Courts in the cities indicated:

Case

Fraudulent "Refunds" Requested

United States v. Dick Jenkins

Salt Lake City, Utah

$393 million

United States v. Susan Guan

Los Angeles, California

, et al.

$4.5 million

United States v. Jacqueline Cornejo

Los Angeles, California

$12.1 million

United States v. Evelyn Johnston, et al.

Panama City, Florida

$17.5 million

United States v. Thanh Cao

Los Angeles, California

$34 million

United States v. Penny Jones

Pocatello, Idaho

$93 million

United States v. Karen Miller

Nashville, Tennessee

$8.3 million

 

TOTAL:

$562.4 million

The Tax Division also prosecutes criminal cases involving the redemption scheme and other schemes involving fraudulent uses of IRS forms, including Forms 1099. These prosecutions often result in significant prison sentences. In May 2009 in the Southern District of Florida, Willie Bernard Cameron was sentenced to 60 months in prison for filing a false $2.9 million refund claim based on a fictitious Form 1099-OID. At the sentencing hearing, Cameron espoused tax-defier positions, including sovereignty and redemption. Other successful prosecutions have involved the use of fraudulent Forms 1099 to harass federal and state officials. In May 2009 in the Northern District of Ohio, Jeanne Herrington was sentenced to 96 months in prison for conspiracy to defraud the IRS and for retaliating against federal prosecutors by filing false Forms 1099 in their names. In May 2009 in the Central District of California, Giancarlo Pertile was sentenced to 60 months incarceration and fined $75,000. Evidence at sentencing showed that, after his indictment for tax evasion, Pertile filed Forms 1099-OID against the judge and others.

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

A Highland Falls, N.Y., woman pleaded guilty today for her role in a scheme to defraud and embezzle funds from the U.S. government by authorizing nearly $3 million in payments from the U.S. Military Academy in West Point, N.Y., to a bogus corporation she controlled.

Bobbie Cyana Ryan, 51, pleaded guilty before U.S. District Judge Colleen Kollar-Kotelly to a three-count information charging her with devising a scheme to defraud, and transmitting funds in interstate commerce for the purpose of executing the scheme; embezzlement and conversion by Ryan of government funds; and executing a financial transaction with criminally derived funds.

According to court documents filed in U.S. District Court in the District of Columbia, Ryan worked in the Information, Education and Technology division in the Office of the Dean at West Point. Ryan was responsible for coordinating information technology training programs for West Point staff. According to court documents, based on irregularities found during a routine audit, U.S. Army investigators discovered that Ryan, acting as the requesting and approving official, used her government purchase card and cards of her unknowing subordinates to authorize approximately $2.9 million in payments to CWG Enterprises. The payments were purportedly for either on-site training instructors or training reference materials when, in fact, no personnel were ever trained and no materials were ever provided.

U.S. Army investigators subsequently discovered that Ryan conducted financial transactions and identified herself as doing business as CWG Enterprises. Ryan used a rented mail box as the company address for CWG Enterprises. Based on false invoices created by Ryan, transfers of government funds were allegedly made from a bank in Washington to a bank account in the name of "Bobbie C. Ryan dba CWG Enterprises" at a bank in New Windsor, N.Y. Once the funds arrived in the purported CWG Enterprises bank account, Ryan withdrew the funds and paid personal and family expenses.

At sentencing, scheduled for Feb. 19, 2010, Ryan faces a maximum sentence of 40 years in prison a fine of up to twice the pecuniary gain from the scheme.

The case is being investigated by the U.S. Army Criminal Investigation Command, Hartford Fraud Resident Agency. The case is being prosecuted by Senior Trial Attorney Andrew Levchuk of the Criminal Division’s Public Integrity Section. 

WASHINGTON — A former New Jersey subcontractor representative pleaded guilty today to charges contained in an indictment involving his role in kickback and fraud conspiracy at a U.S. Environmental Protection Agency (EPA) Superfund site in New Jersey, announced the Department of Justice.

James E. Haas Jr., a former representative of a subcontractor that provides common backfill, a type of soil material used to refill an excavation, pleaded guilty in the U.S. District Court of New Jersey, to charges that he engaged in a kickback and fraud conspiracy at the Federal Creosote Superfund site in Manville, N.J. Haas admitted to paying kickbacks to former employees of a prime contractor at Federal Creosote in exchange for the award of a subcontract. He also admitted to inflating prices for the subcontract to include the amount of the kickbacks paid to his co-conspirators. Haas also pleaded guilty to committing fraud against the United States. The indictment was filed on Aug. 31, 2009. Sentencing is set for Feb. 8, 2010. The remaining individuals charged in the indictment, John A. Bennett, the former chief executive officer of subcontractor Bennett Environmental Inc. (BEI), and Gordon D. McDonald, a former project manager for a prime contractor, await trial, which is set for Jan. 5, 2010.

Separately, Frederick Landgraber of Bridgewater, N.J., the president and co-owner of a Martinsville, N.J., landscaping company was sentenced today to serve five months in jail, five months of home detention and to pay a $5,000 criminal fine for his role in a related kickback and fraud conspiracy at Federal Creosote. Landgraber was also ordered to pay $35,000 in restitution to the EPA, jointly and severally with his co-conspirators. Landgraber originally pleaded guilty on June 25, 2009, in the U.S. District Court of New Jersey, to conspiring to defraud the EPA from approximately March 2002 until approximately June 2005.

The clean-up at the Federal Creosote site is partly funded by the EPA. Under an interagency agreement between the EPA and the Army Corps of Engineers, prime contractors oversaw the removal, treatment and disposal of contaminated soil, as well as other operations at the Federal Creosote site.

Today’s plea and sentencing are the result of an ongoing federal antitrust investigation being conducted by the Antitrust Division’s New York Field Office, the EPA Office of Inspector General and the Internal Revenue Service Criminal Investigation. To date, a total of three companies and eight individuals have pleaded guilty as a part of the investigation. BEI was sentenced on Dec. 15, 2008, to pay criminal fines and restitution totaling more than $2.66 million. Christopher Tranchina was sentenced on July 13, 2009, to serve 20 months in jail and to pay restitution totaling $154,597. The other individuals and companies are awaiting sentencing.

Today’s proceedings reflect the Department’s commitment to protecting U.S. taxpayers from procurement fraud through its creation of the National Procurement Fraud Task Force. The National Procurement Fraud Initiative, announced in October 2006, is designed to promote the early detection, prosecution, and prevention of procurement fraud associated with the increase in contracting activity for national security and other government programs.

Anyone with information concerning bid rigging, kickbacks or fraud relating to subcontracts awarded at the Federal Creosote Superfund site or the Diamond Alkali Superfund site should contact the New York Field Office of the Antitrust Division at 212-264-9308.

WASHINGTON – Bill J. Allen and Richard L. Smith were each sentenced in separate hearings today for their participation in a corruption scheme in which they provided approximately $395,000 in corrupt payments to public officials from the state of Alaska, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division. Allen and Smith were sentenced in U.S. District Court for the District of Alaska by U.S. District Court Judge John W. Sedwick.

Allen, 72 , the former chief executive officer of VECO Corporation, was sentenced to 36 months in prison, a $750,000 fine and three years of supervised release. Smith, 64 , the former vice president of community and government affairs for VECO Corporation, was sentenced to 21 months in prison, a $10,000 fine and three years of supervised release.

Both defendants pleaded guilty on May 7, 2007, to three-count informations charging each with bribery; conspiracy to commit bribery, extortion under color of official right, and honest services mail and wire fraud; and conspiracy to defraud the Internal Revenue Service (IRS) of the U.S. Department of the Treasury. According to court documents, Allen and Smith conspired with at least five members of the Alaska legislature to provide illegal financial benefits to several Alaska elected officials in exchange for those officials’ support on legislation pending before the Alaska state legislature. Allen and Smith also pleaded guilty to one substantive count of bribery, and admitted that they provided approximately $395,000 in benefits to public officials from the state of Alaska in connection with the scheme.

The Allen sentencing was handled by Deputy Chief James M. Trusty of the Criminal Division’s Gang Unit, Trial Attorney Kevin R. Gingras of the Criminal Division’s Appellate Section and Trial Attorney Peter M. Koski of the Criminal Division’s Public Integrity Section. The Smith sentencing was handled by Trial Attorney M. Kendall Day and Deputy Chief Raymond Hulser of the Criminal Division’s Public Integrity Section. The case is being investigated by the FBI and IRS Criminal Investigation.

Two Chicago men have been arrested on federal charges for their alleged roles in conspiracies to provide material support and/or to commit terrorist acts against overseas targets, including facilities and employees of a Danish newspaper that published cartoons of the Prophet Mohammed in 2005, federal law enforcement officials announced today. There was no imminent danger in the Chicago area, officials said, adding that the charges are unrelated to recent terror plot arrests in Boston, New York, Colorado, Texas and central Illinois.

The defendants charged in separate criminal complaints unsealed today in U.S. District Court in Chicago are David Coleman Headley, 49, and Tahawwur Hussain Rana, 48, also known as Tahawar Rana, announced Patrick J. Fitzgerald, U.S. Attorney for the Northern District of Illinois, and Robert D. Grant, Special Agent-in-Charge of the Chicago Office of the FBI. The complaints remained under seal temporarily after the defendants’ arrests, with court approval, so as not to compromise further investigative activity.

Headley, a U.S. citizen who changed his name from Daood Gilani in 2006 and resides primarily in Chicago, was arrested on Oct. 3, 2009, by the Chicago FBI’s Joint Terrorism Task Force (JTTF) at O’Hare International Airport before boarding a flight to Philadelphia, intending to travel on to Pakistan. He was charged with one count of conspiracy to commit terrorist acts involving murder and maiming outside the United States and one count of conspiracy to provide material support to that overseas terrorism conspiracy.

Rana, a native of Pakistan and citizen of Canada who also primarily resides in Chicago, was arrested on Oct. 18, 2009, at his home by federal agents. Rana is the owner of several businesses, including First World Immigration Services, which has offices on Devon Avenue in Chicago, as well as in New York and Toronto. He was charged with one count of conspiracy to provide material support to a foreign terrorism conspiracy that involved Headley and at least three other specific individuals in Pakistan.

Both men have been held in federal custody since each was arrested. If convicted, Headley faces a maximum sentence of life imprisonment for conspiracy to murder or maim persons abroad, while Headley and Rana each face a maximum of 15 years in prison for conspiracy to provide material support to terrorism.

On Oct. 18, 2009, JTTF agents executed search warrants in connection with the investigation at four locations: Headley’s and Rana’s residences on the north side of Chicago, Rana’s immigration business in Chicago, and a farm he owns in Kinsman, Ill., approximately 80 miles southwest of Chicago, which is used to provide halal meat for Muslim customers, as well as a grocery store in Chicago.

According to both complaints, since at least late 2008 until Oct. 3, 2009, as part of the conspiracy to murder and maim persons abroad, Headley allegedly identified and conducted surveillance of potential targets of a terrorist attack in Denmark on two separate trips to Denmark in January and July 2009, and reported and attempted to report on his efforts to other conspirators in Pakistan. As part of the conspiracy to provide material support to terrorism, Rana allegedly helped arrange Headley’s travels overseas and conceal their true nature and purpose to surveil potential terror targets overseas, and discussed potential targets for attack with Headley.

Headley allegedly reported and attempted to report on his overseas surveillance to other conspirators, according to the affidavits, including:

Ilyas Kashmiri, identified as the operational chief of the Azad Kashmir section of Harakat-ul Jihad Islami (HUJI), a Pakistani-based terrorist organization with links to al Qaeda. Kashmiri, who is presently believed to be in Waziristan in the Federally Administered Tribal Area (FATA) region in northwestern Pakistan, issued a statement this month that he was alive and working with al Qaeda;

"Individual A" (who is identified as Individual A in the Headley affidavit and as Individual B in the Rana affidavit), who is associated with Kashmiri, as well as with Lashkar-e-Taiba (LeT), another Pakistani-based terrorist organization;

an individual identified as "Lashkar-e-Taiba Member A" (LeT Member A), who has substantial influence and responsibility within the organization and whose identity is known to the government.

"The public should be reassured that there was no imminent danger in the Chicago area. However, law enforcement has the duty to be vigilant to guard against not just those who would carry out attacks here on our soil but those who plot on our soil to help carry out violent attacks overseas. I wish to express my deep appreciation to the FBI agents and other members of the Joint Terrorism Task Force for their extremely hard work on this matter," said Mr. Fitzgerald.

"The criminal complaints unsealed today have exposed a serious plot against overseas targets by two Chicago-based men working with Pakistani-based terrorist organizations.  Information developed during this investigation was shared with our foreign partners as we worked together to mitigate these threats. This case is a reminder that the threat posed by international terrorist organizations is global in nature and requires constant vigilance at home and abroad," said David Kris, Assistant Attorney General for National Security.

"This investigation demonstrates the well-established relationships that we have with our law enforcement partners, both foreign and domestic. We work closely with state, local and federal law enforcement agencies in the United States, as well as with our overseas partners, to identify and disrupt threats here and abroad," said Mr. Grant.

According to the affidavits in both cases, Headley at times has claimed to be a consultant with or representative of Rana’s business, First World Immigration Services, but appears to perform little if any actual work for the business. In addition, Headley’s apartment in Chicago is leased to an individual who is deceased. Despite his apparent lack of financial resources and substantial employment, Headley has traveled extensively since the second half of 2008, including multiple trips to Pakistan and various countries in Europe. Postings to an internet group for graduates of a military school in the Pakistani town of Hasan Abdal (a group that refers to itself as "abdalians"), reflect that both Rana and Headley have participated in the group and referred to their attendance at that school.

The Denmark Project

Beginning in late 2008, Headley corresponded extensively with Individual A and LeT Member A regarding what they referred to in coded communications as the "Mickey Mouse Project," "mmp," and "the northern project," according to the affidavit. The Mickey Mouse Project allegedly involved planning for one or more attacks at facilities and employees of Morgenavisen Jyllands-Posten, a Danish newspaper that in 2005 published cartoons depicting the Prophet Mohammed, to which many Muslims took great offense. In October 2008, Headley allegedly posted a message to the "abdalians" internet discussion group stating that "I feel disposed towards violence for the offending parties," referring to the Danish cartoonists and others who he identified "as making fun of Islam."

Using coded language, Rana, Headley, Individual A and LeT Member A allegedly have referred to this plot, as well as discussions of other targets, as "investments," "projects," "business," and "action," and have described their hopes for success both in terms of receiving religious awards, as well as getting "rich," "richer," and making "profit." Between August 2008 and Dec. 7, 2008, Headley sent multiple email messages from internet addresses located in Karachi and Lahore in Pakistan, the charges allege. On Dec. 7, 2008, just before traveling from Pakistan to the United States that same day, Headley alleged used one of multiple email accounts to store a detailed list of items for himself, which he titled "Mickey Mouse." Included on the list (contained in the affidavits) were the following items:

Route Design (train, bus, air)

Cross (Cover Authenticator)

Trade? Immigration?

Ad? (Lost Luggage) (Business) (Entry?)

Kings Square (French Embassy)

Counter surveillance (magic eye)

Security (armed)?

In January 2009, Headley traveled to Copenhagen, Denmark, and Rana allegedly arranged portions of his travel. During the trip, Headley allegedly visited two different offices of the Jyllands-Posten — in Copenhagen and Arhus, Denmark. The Copenhagen office is located in Kings Square near the French Embassy. Headley falsely told Jyllands-Posten employees that he was visiting on behalf of First World Immigration Services, which he said was considering opening offices in Denmark and might be interested in advertising the business in the newspaper. While in Denmark, Headley instructed Rana to be alert for an email from a Jyllands-Posten sales representative, and to ask First World’s Toronto and New York offices to "remember me," in case a newspaper representative called. According to the complaints, Rana corresponded from Chicago with a representative of the Jyllands-Posten by email in which he pretended to be Headley.

After visiting Denmark, Headley traveled to Pakistan to meet with Individual A. During this visit, Headley traveled with Individual A to Pakistan’s FATA region and met with Kashmiri. Before returning to Chicago in June 2009, Headley sent his will to Rana and Rana responded by sending a coded message establishing a new email account, the complaint alleges.

In July and August 2009, Headley exchanged a series of emails with LeT Member A, including an exchange in which Headley asked if the Denmark project was on hold, and whether a visit to India that LeT Member A had asked him to undertake was for the purpose of surveilling targets for a new terrorist attack. These emails reflect that LeT Member A was placing a higher priority on using Headley to assist in planning a new attack in India than on completing the planned attack in Denmark. After this time, Headley and Individual A allegedly continued focusing on the plan with Kashmiri to attack the newspaper, rather than working with LeT, the complaint alleges.

In late July 2009, Headley traveled again to Copenhagen and to other locations in Europe, and Rana again arranged portions of his travel. When Headley returned to the United States, he falsely told border inspectors that he was traveling on business as a representative of First World Immigration, although his luggage contained no papers or other documents relating to First World.

After returning to Chicago in August 2009, Headley allegedly used coded language to repeatedly inquire if Individual A had been in touch with Kashmiri regarding planning for the attack, and expressing concern that Individual A’s communications with Kashmiri had been cut off. In early September 2009, Headley and Rana took a lengthy car ride during which they discussed the activities of the other individuals, including past terrorist acts, and Headley discussed with Rana five actions involving targets that expressly included "Denmark." In conversations with Rana and Individual A in August and September 2009, Headley indicated that if the "doctor" (alleged to be a reference to Kashmiri) and his people were unable to assist, then Headley would perform the planned operation himself.

In September 2009, after initial press reports indicated that Kashmiri had been killed in a drone attack in Pakistan, Headley and Individual A allegedly had a series of coded conversations in which they discussed the reports of Kashmiri’s death and what it meant for the projects they were planning. Individual A sought to reassure and encourage Headley, telling him, among other things, that "[t]his is business sir; these types of things happen." On Sept. 20, 2009, Headley allegedly told a family member words to the effect that he had spoken to Rana and they agreed that "business must go on."

In a Sept. 21, 2009, telephone conversation, Individual A indicated to Headley that Kashmiri was alive and "doing well." In a subsequent conversation on Sept. 30, 2009, Individual A again assured Headley that Kashmiri, whom he referred to as "Pir Sahib," was "absolutely all right" and had not gotten "married," which was code for being killed. Headley asked Individual A if it was possible to now have a meeting with Kashmiri and Individual A responded that Kashmiri "just today, was asking about you" (Headley).

According to the affidavit, Headley stated in conversations last month that he intended to travel to Pakistan in early October to meet with Individual A and Kashmiri, and he was arrested on Oct. 3 as he prepared to board a flight from Chicago to Philadelphia, intending to travel on to Pakistan. During a search of Headley’s luggage, a memory stick was recovered that contained approximately 10 short videos of Copenhagen, including video focused on the Jyllands-Posten building in King’s Square taken both during the day and night, as well as a nearby Danish military barracks and the exterior and interior of Copenhagen’s central train station, consistent with the checklist he stored which mentioned "route design." In addition, Headley had an airline reservation, allegedly made by Rana, to fly from Atlanta to Copenhagen on Oct. 29, 2009.

The investigation is continuing and is being conducted by the Chicago FBI Joint Terrorism Task Force, with particular assistance from the Chicago Police Department, the Illinois State Police and the Department of Homeland Security.

The prosecution is being handled by Assistant U.S. Attorneys Daniel Collins and Vicki Peters from the Northern District of Illinois, with assistance from the Counterterrorism Section of the Justice Department’s National Security Division.

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

WASHINGTON – The Justice Department today announced that it has reached a settlement with the city of Marion, Ark., that, if approved by the U.S. District Court for the Eastern District of Arkansas, will resolve the department’s lawsuit against the city alleging race discrimination in employment in violation of Title VII of the Civil Rights Act of 1964, as amended. Title VII prohibits discrimination in employment on the basis of race, sex, national origin or religion.

The department’s complaint, filed in May 2009, alleges that the city discriminated against Stacy D. Allen, an African-American and a former part-time patrol officer in the city’s police department, when it did not appoint him as a full-time patrol officer. The complaint alleges that the police department had a history of appointing the most senior part-time patrol officer as a full-time officer when a full-time position became available. However, when Allen, who was the city’s only African-American patrol officer, became the most senior part-time patrol officer and two full-time positions opened, the city appointed two less senior white part-time patrol officers to those positions instead of Allen. The Justice Department’s complaint was based on a charge of discrimination filed by Allen with the Equal Employment Opportunity Commission.

"All Americans are guaranteed the right to know that they can pursue their career of choice without fear of discrimination based on their race," said Thomas E. Perez, Assistant Attorney General for Civil Rights. "Title VII protects individuals, such as Mr. Allen, from having to suffer discrimination in the workplace. The Justice Department will take swift action against those employers who engage in discrimination, and we appreciate the partnership of the EEOC in these matters."

The settlement agreement requires that the city not discriminate against on the basis of race, or in any way adversely affect the terms and conditions of employment of, any applicant or person employed in the city’s police department. The agreement also requires that the city provide Allen with a monetary award of $16,000 ($2,250 in back pay and $13,750 in compensatory damages).

The Civil Rights Division is committed to the vigorous enforcement of Title VII. Additional information about the Civil Rights Division is available on its Web sites at http://www.justice.gov/crt/; and http://www.justice.gov/crt/emp/.

Troy, Mich., resident Syed Aziz pleaded guilty today in U.S. District Court in Detroit to participating in a conspiracy to defraud the Medicare program.

In his plea today, Aziz, a licensed physical therapist, admitted that he began working in approximately May 2005 as a contract therapist for a co-conspirator, Suresh Chand.  Chand owned and controlled several companies operating in the Detroit area that purported to provide physical and occupational therapy services to Medicare beneficiaries.  Aziz admitted that he, Chand, and others created fictitious therapy files appearing to document physical and occupational therapy services provided to Medicare beneficiaries, when in fact no such services were provided.  According to court documents, the fictitious services reflected in the files were billed to Medicare through sham Medicare providers controlled by co-conspirators. 

Chand admitted to paying cash kickbacks and other inducements to Medicare beneficiaries in exchange for the beneficiaries’ Medicare numbers and signatures on documents falsely indicating that they had received physical or occupational therapy.  Chand pleaded guilty on Sept. 28, 2009, in U.S. District Court in Detroit to one count of conspiracy to commit health care fraud and one count of conspiracy to launder money. Aziz admitted that he was one of the licensed physical or occupational therapists from whom Chand obtained signatures on fictitious "progress notes" and other documents falsely indicating that the therapists had provided services to the Medicare beneficiaries.

Aziz also admitted that during the course of the scheme, he signed approximately 400 fictitious physical therapy files, indicating that he had provided physical therapy services to Medicare beneficiaries, when in fact he had not. Aziz admitted that he was paid between $70 and $90 for each file he falsified. Aziz also admitted that between approximately May 2005 and December 2006, he falsified physical therapy files that supported claims to the Medicare program totaling approximately $1,895,000. According to court documents, Medicare paid approximately $817,000 on those claims. Aziz admitted that throughout the conspiracy he was fully aware that Medicare was being billed for physical therapy services that he falsely indicated he had performed.

At sentencing, scheduled for Feb. 3, 2010, Aziz faces a maximum prison sentence of 10 years and a $250,000 fine.

The case is being prosecuted by Trial Attorneys John K. Neal, Gejaa T. Gobena and Benjamin Singer of the Criminal Division’s Fraud Section and by Special Assistant U.S. Attorney Thomas W. Beimers of the Eastern District of Michigan. The FBI and the HHS Office of Inspector General (HHS-OIG) conducted the investigation. The case was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and 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 is 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 (HEAT) , go to:  www.stopmedicarefraud.gov.

Robert J. Cabelly, 61, of Washington, D.C., has been indicted in the District of Columbia in an eight-count indictment charging him with conspiracy to violate the Sudanese sanctions regulations and to act as an unregistered agent of a foreign power, four counts of violating the Sudanese sanctions regulations, as well as one count apiece of money laundering, passport fraud and making false statements.

Cabelly, who was the principal and managing director of a Washington, D.C. consulting firm and a former State Department employee, is scheduled to appear in federal court today in the District of Columbia at 1:30 p.m. before U.S. Magistrate Judge Deborah Robinson. If convicted, he faces up 20 years in prison on each of the substantive Sudanese Sanctions Regulations counts, 20 years for the money laundering count, 10 years for the passport fraud, and five years each for the conspiracy and false statement counts.

According to the indictment, between early 2005 and mid-2007, Cabelly performed work on behalf of the Republic of Sudan, a country currently on the State Department’s State Sponsors of Terrorism list, without the approval of the U.S. government as is required by law under the Sudanese sanctions regulations. In an effort to make money, Cabelly brokered business contracts and transactions benefiting Sudan. He also provided Sudan with U.S. government information that was sensitive and controlled. All the while, Cabelly affirmatively misrepresented to U.S. officials the nature of his relationship with Sudan, as well as his relationship with the foreign entities doing business in Sudan.

Among other acts alleged in the indictment, Cabelly engaged in illicit contractual relationships with the oil industry in Sudan, operating as an intermediary between Sudanese government officials and oil company executives and a foreign oil company, and sought additional investors on behalf of that foreign oil company so that it could do business in the Sudan. He also allegedly provided strategic advice and counsel to Sudanese officials, including in the areas of economic development and trade, especially as it pertained to the development of the country’s petroleum natural resource and its government controlled airline industry.

According to the indictment, Cabelly was paid for these services by Sudanese government officials as well as by a foreign oil company. Cabelly allegedly directed a foreign oil company to deposit over $180,000 of the fees he received in an offshore account he maintained in the Cook Islands, an account he used to launder the funds in order to conceal the fact that it was proceeds obtained in violation of the sanctions. Cabelly also concealed his travel to the Sudan from U.S. authorities by misusing U.S. passports.

"The conduct alleged in this indictment is broad in scope and very serious," said David Kris, Assistant Attorney General for National Security. "We will continue to pursue anyone who seeks to violate U.S. sanctions."

"Those who pursue their own personal gain at the expense of our nation’s trade embargoes can expect to be aggressively prosecuted," said Acting U.S. Attorney Channing Phillips.  "Our national security depends on strict enforcement of U.S. export laws such as the Sudanese Sanctions Regulations."

"The FBI is committed to enforcing all laws pertaining to U.S. persons and the representations of foreign governments to ensure those relationships aren’t counterproductive to our fight against terrorism," said Joseph Persichini, Jr., Assistant Director for the FBI’s Washington Field Office.

"The activities detailed in this indictment – including facilitation of Sudanese oil transactions – would represent serious violations of U.S. sanctions law. We commend our federal law enforcement colleagues for their dedicated and collaborative efforts," said Adam J. Szubin, Director of the Treasury Department’s Office of Foreign Assets Control.

The investigation was conducted through the collaborative efforts of the FBI’s Washington Field Office, the State Department’s Bureau of Diplomatic Security, the Naval Criminal Investigative Service (NCIS) and the U.S. Customs and Border Protection. The Department of Treasury’s Office of Foreign Assets Control (OFAC) also provided substantial assistance and cooperation throughout the course of the investigation.

The prosecution is being handled by Assistant U.S. Attorney Michael C. DiLorenzo from the U.S. Attorney’s Office for the District of Columbia, and Trial Attorney Patrick T. Murphy from the Counterespionage Section of the Justice Department’s National Security Division.

The public is reminded that a criminal indictment contains mere allegations and is not evidence of guilt. A defendant is presumed innocent unless and until proven guilty.

WASHINGTON – David Plummer, Spencer Plummer and Terry Green, operators of a fraudulent tax shelter that offered tax benefits in connection with the leasing of thoroughbred mares, pleaded guilty today to a criminal information charging them with one count of conspiracy to defraud the United States, the Justice Department and the Internal Revenue Service (IRS) announced.

According to the criminal information and statements made in court, the defendants called their fraudulent tax product the Mare Lease Program and marketed it through a company called ClassicStar LLC. David Plummer created the Mare Lease Program and oversaw the program at ClassicStar. Spencer Plummer assisted David Plummer in the operation of the Mare Lease Program. Terry Green was a Certified Public Accountant and assisted investors in the Mare Lease Program in preparing and filing income tax returns on which they reported fraudulent deductions. Green also assisted customers in their IRS audits by creating false and back-dated documents and presenting them to IRS auditors. The investors in the Mare Lease Program filed tax returns with the IRS claiming false tax deductions of over $500 million, which resulted in a tax loss to the Government of over $200 million.

According to the criminal information and statements made in court, ClassicStar’s Mare Lease Program purported to offer wealthy individuals the opportunity to invest in thoroughbred horse breeding. According to Mare Lease Program promotional materials, investors leased the reproductive capacity of specific thoroughbred mares. If the mare had a foal during the time that the investor held the lease, the investor would own the foal. Mare Lease Program promoters told investors that they could take deductions on their federal income tax returns for the losses generated by the thoroughbred horse breeding operation. These deductions reduced or eliminated the investors’ taxes, and many investors received tax refunds, including refunds for years prior to their investments. These deductions were fraudulent because, among other reasons, the Mare Lease Program used fraudulent loans to finance investors’ participation, and the program induced investors to lease thoroughbred mares that the operators of the program knew ClassicStar could not provide.

According to the criminal information and statements made in court, most investors financed at least 50 percent of their investments in the Mare Lease Program through loans from the National Equine Lending Company (NELC), a purportedly independent financial institution. In fact, NELC was controlled by ClassicStar. ClassicStar’s operators claimed that NELC would transfer funds to ClassicStar on behalf of an investor to finance his or her investment in the Mare Lease Program. In reality, NELC had no funds of its own and would instead accept money from ClassicStar. Typically, ClassicStar transferred insufficient funds to NELC to finance an investor’s entire loan. To conceal the lack of funds, NELC and ClassicStar repeatedly transferred the same funds between their bank accounts to create a paper trail that gave the appearance that the investor’s loan was fully funded by NELC. At the conclusion of the investor’s participation in the Mare Lease Program, the investor, often having made no payments on the supposed loan, had the loan extinguished through fictitious trades involving an entity that purportedly owned interests in coal bed methane gas wells.

According to the criminal information and statements made in court, in addition to the fraudulent lending arrangements of the Mare Lease Program, ClassicStar sold Mare Lease Program investments knowing that it lacked sufficient thoroughbred mares to fulfill its contractual obligations to the investors. To justify the deductions that the investors claimed on their income tax returns, ClassicStar substituted less-valuable quarter horse mares for the thoroughbred mares that they had promised.

"U.S. taxpayers who honestly report their income and pay their taxes can rest assured that those who promote fraudulent schemes that illegally conceal assets and income will be investigated and prosecuted by the IRS and Department of Justice," said John A. DiCicco, Acting Assistant Attorney General of the Justice Department’s Tax Division.

"Tax crimes hurt everyone, by depriving the Treasury of funds needed for important government programs. This nationwide fraudulent scheme is by far the largest criminal tax case in the history of Oregon, and we are grateful for the assistance of the Internal Revenue Service in the investigation of this case," said Acting U.S. Attorney Robinson.

The case was investigated by special agents of the Internal Revenue Service - Criminal Investigation and is being prosecuted by Assistant U.S. Attorney and Senior Litigation Counsel Allan M. Garten and Department of Justice Tax Division Trial Attorney Jay Nanavati.

"The IRS uses all its investigative tools to uncover abusive tax schemes designed to create fraudulent deductions for investors," said Eileen Mayer, Chief, IRS Criminal Investigation. "Investment schemes that seem too good to be true should be a signal to investors to stay clear. The IRS is actively pursuing promoters as well as investors who knowingly participate in these types of tax avoidance schemes."

Additional information about the Justice Department’s Tax Division and its enforcement efforts may be found at http://www.usdoj.gov/tax.

WASHINGTON – The Justice Department today announced the filing of a consent decree settling a Voting Rights Act lawsuit against the town of Lake Park, Fla., that, subject to court approval, will alter the method of electing the town commission. The town will discontinue use of its current at-large method of electing the commissioners. Lake Park will use a limited voting plan beginning with the March 2010 elections.

The lawsuit, filed on March 31, 2009, in federal court in Miami, challenged the at-large method of electing the Lake Park Town Commission on the ground that it dilutes the voting strength of African-American citizens in violation of Section 2 of the Voting Rights Act. Although African-Americans comprise over 38 percent of the town’s total citizen voting-age population, black voters usually have been unsuccessful in electing their candidate of choice and no black candidate for the commission has ever won an election since Lake Park was incorporated in 1923.

"All Americans cherish the right to have our voices heard in the voting booth, and the Voting Rights Act continues to be a vital tool allowing us to protect that right," said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. "We are pleased that the Lake Park Town Commission has agreed to adopt a voting plan that will provide African-American citizens with the opportunity to elect commissioners of their choice."

U.S. Attorney Jeffrey H. Sloman for the Southern District of Florida stated, "In the consent decree, the town of Lake Park conceded that there is a factual and legal basis for concluding that the current at-large method of electing the town’s commissioners results in an unfair dilution of the African-American vote. Today’s consent decree is a first step to remedying that situation and providing equal access to the political process."

Racially polarized voting patterns prevail in Lake Park elections. The department was prepared to prove through an analysis of statistical and non-statistical evidence, including past town election returns and voting patterns, that the African-American population of Lake Park is politically cohesive and that white persons usually vote sufficiently as a bloc to defeat the preferred candidate of African-American voters.

In the consent decree, the town conceded that there is a basis in both fact and law for believing that the current at-large method of electing commissioners, under all the circumstances, results in African-Americans having less opportunity to participate in the town’s political process and to elect representatives of their choice.

Under the limited voting plan systems, all four commission seats will be up for election and voters will be limited to casting a vote for only one candidate. The four candidates receiving the highest number of votes will be elected to the Lake Park Town Commission for a three-year term. The limited voting plan is in effect permanently, unless changed by the terms in the agreement and in compliance with Section 2 of the Voting Rights Act.

Complaints about discriminatory voting practices may be reported to the Justice Department at 1-800-253-3931. More information about the Voting Rights Act and other federal voting laws is available on the Department of Justice Web site at http://www.usdoj.gov/crt/voting.

WASHINGTON – Erin Sharma, a former corrections officer with the Federal Bureau of Prisons, was sentenced today in federal court in Orlando, Fla., on federal civil rights charges related to the fatal assault of an inmate, announced Assistant Attorney General Thomas E. Perez of the Civil Rights Division and U.S. Attorney A. Brian Albritton of the Middle District of Florida. Sharma was sentenced to serve a term of life in prison, three years of post-release supervision and 75 hours of community service.

On July 29, 2009, a federal jury in Orlando found Sharma guilty of two felony federal civil rights charges related to the fatal assault of federal inmate Richard Delano in March 2005. The evidence at trial showed that on Feb. 28, 2005, Sharma and a co-conspirator agreed to move Delano into the cell of another inmate at the Coleman Federal Correctional Complex in Coleman, Fla. The evidence also showed that Sharma and the co-conspirator knew that the other inmate was likely to assault Delano and that this move was in retaliation for a prior altercation between Delano and Sharma. Sharma also encouraged the inmate to assault Delano. The co-conspirator moved Delano into the inmate’s cell on March 1, 2005, and the inmate assaulted Delano three days later, on March 4. On March 17, 2005, Delano died from the injuries he suffered during that assault.

"The brave work of our nation’s law enforcement officers must be guided by adherence to the laws they are sworn to uphold, and the overwhelming majority of officers abide by that principle," said Assistant Attorney General Perez. "When law enforcement officers betray the great trust placed in them by abusing the individuals in their custody, the Justice Department will vigorously investigate, prosecute and seek appropriate punishment for those actions."

"Nothing justifies or excuses the defendant’s outrageous conduct in this case," said U.S. Attorney A. Brian Albritton. "When correction officers make the corrupt choice to act as judge, jury and executioner, the United States will prosecute such actions aggressively, just as it did here."

 

The case was prosecuted by Assistant U.S. Attorneys Bruce Ambrose and Carolyn Adams from the U.S. Attorney’s Office, and Senior Litigation Counsel Gerard Hogan and Trial Attorney Douglas Kern from the Civil Rights Division. FBI Special Agent Jim Raby was the lead investigator on the case

The Civil Rights Division is committed to the vigorous enforcement of every federal criminal civil rights statute, including those laws that prohibit the willful use of excessive force or other acts of misconduct by law enforcement or other government officials.

 

Rodolfo Rodriguez Cabrera, 43, a Cuban national, was arraigned today in U.S. District Court for the District of Nevada on charges of producing and selling counterfeit International Game Technology (IGT) video gaming machines, commonly known as slot machines, and counterfeit IGT computer programs.

Cabrera and Henry Mantilla, 35, of Cape Coral, Fla., were indicted by a federal grand jury in Las Vegas on April 22, 2009, with one count of conspiracy, two counts of trafficking in counterfeit goods, two counts of trafficking in counterfeit labels and two counts of criminal copyright infringement. According to the indictment, Cabrera and Mantilla conspired between August 2007 and April 15, 2009, to make and sell unauthorized copies of computer programs designed for IGT video slot machines and counterfeit IGT video slot machines bearing IGT’s registered trademarks, all without the permission of IGT. The indictment also contains 13 forfeiture allegations seeking forfeiture of any and all counterfeit items and up to $5 million in illegal proceeds from their alleged criminal activity.

If convicted on the conspiracy charge, each defendant faces a maximum of five years in prison and a $250,000 fine. The copyright infringement and counterfeit labels charges also carry a maximum penalty of five years in prison and a $250,000 fine, per count. The charges of counterfeit goods carry a maximum penalty of 10 years in prison and a $2 million fine, per count.

Cabrera was arrested June 8, 2009, in Riga, Latvia, and extradited from Latvia to the United States on Oct. 23, 2009. Cabrera is the first individual to be extradited from Latvia to the United States under a new extradition treaty between the U.S. and Latvia, which entered into force on April 15, 2009. Cabrera’s arrest and extradition is the result of cooperation between U.S. and Latvian law enforcement and the Latvian government. At the hearing today, Cabrera pleaded not guilty and U.S. Magistrate Judge Peggy A. Leen ordered him detained pending trial, which is scheduled to begin Dec. 8, 2009. Mantilla pleaded not guilty at his arraignment on July 2, 2009, and trial is currently scheduled for Dec. 8, 2009, before U.S. District Court Judge Phillip M. Pro.

The case is being prosecuted by Trial Attorney Thomas S. Dougherty of the Criminal Division’s Computer Crime and Intellectual Property Section (CCIPS) and Assistant U.S. Attorney Michael Chu of the U.S. Attorney’s Office for the District of Nevada. Significant assistance has been provided by the Central Criminal Police Department of the Latvian Ministry of Interior; Latvia’s Office of the Prosecutor General, International Cooperation Division; and Senior Trial Attorney Deborah Gaynus of the Criminal Division’s Office of International Affairs.

An indictment is merely a formal charge by the grand jury. Each defendant is presumed innocent unless and until proven guilty in a court of law.

WASHINGTON - Attorney General Eric Holder today announced the appointment of nine new U.S. Attorneys to serve two-year terms on the Attorney General’s Advisory Committee of U.S. Attorneys (AGAC). The new appointees include: U.S. Attorney for the Southern District of New York Preet Bharara; U.S. Attorney for the District of Arizona Dennis Burke; U.S. Attorney for the Western District of Washington Jenny Durkan; U.S. Attorney for the District of New Jersey Paul J. Fishman; U.S. Attorney for the Northern District of Illinois Patrick J. Fitzgerald; U.S. Attorney for the Eastern District of Virginia Neil H. MacBride; U.S. Attorney for the District of Rhode Island Peter F. Neronha; U.S. Attorney for the Northern District of Alabama Joyce White Vance; and Acting U.S. Attorney, ex officio, for the District of Columbia Channing D. Phillips. John S. Davis, Criminal Chief for the Eastern District of Virginia, was also appointed to the committee to represent the voice of the Assistant U.S. Attorneys in the field.

"This is a critical and exciting time for the Department of Justice and I will rely heavily on these U.S. Attorneys as we work to further the Department’s efforts to reduce violent crime and gang violence, promote civil rights, ensure fairness in the marketplace and above all, preserve our national security," said Attorney General Holder.

The AGAC, chaired by U.S. Attorney for the District of Minnesota B. Todd Jones, was created in 1973. The committee, which reports to the Attorney General through the Deputy Attorney General, represents the voice of the U.S. Attorneys and provides advice and counsel to the Attorney General on policy, management and operational issues impacting the Offices of the U.S. Attorneys.

"This committee provides crucial advice to the Department’s leadership in helping shape key policies to accomplish our core mission of serving justice, and these distinguished U.S. Attorneys bring the experience, dedication and drive necessary to successfully serve this important role," said Deputy Attorney General David W. Ogden.

A brief bio on each nominee is below:

Preet Bharara was presidentially appointed U.S. Attorney for the Southern District of New York on Aug. 13, 2009. Bharara previously served as Chief Counsel to U.S. Senator Charles E. Schumer (2005-2009); Adjunct Professor at Fordham University School of Law (2003-2005); Assistant U.S. Attorney for the Southern District of New York (2000-2005); litigation associate with Shereff, Friedman, Hoffman & Goodman LLP (1996-2000); and litigation associate with Gibson, Dunn & Crutcher LLP (1993-1996).

Dennis Burke was presidentially appointed U.S. Attorney for the District of Arizona on Sept. 16, 2009. Prior to his appointment, Burke served as Senior Advisor to the Secretary for Homeland Security (2009) and as a member of the Obama/Biden Transition Team (2008-2009). Burke served as Chief of Staff for the Governor of Arizona (2003-2008); Chief Deputy/Special Assistant for the Arizona State Attorney General (1999-2003); Acting Assistant Attorney General, Office of Legislative Affairs, Department of Justice (1999); Assistant U.S. Attorney for the District of Arizona (1997-1999); Senior Policy Analyst, Domestic Policy Council, The White House (1995-1997); Special Counsel, Office of Legislative Affairs, Department of Justice (1994-1995); and Majority Counsel for the U.S. Senate Judiciary Committee, Subcommittee on Patents, Copyrights and Trademarks (1989-1994).

Jenny Durkan was presidentially appointed U.S. Attorney for the Western District of Washington on Oct. 1, 2009. Durkan previously served as solo practitioner for the law offices of Jenny Durkan (1997-2009); Executive Counsel for the Office of the Governor, Washington State (1994 -1995); associate attorney (1991-1994) and shareholder (1996-1997), Schroeter, Goldmark and Bender; associate attorney, Williams and Connolly (1987-1991); and associate attorney, Foster, Pepper & Riviera (1985-1987).

Paul J. Fishman was presidentially appointed U.S. Attorney for the District of New Jersey on Oct. 14, 2009. Prior to his appointment he served as partner with Friedman, Kaplan, Seiler & Adelman LLP (1997-2009). Fishman served in the Office of the Deputy Attorney General, Department of Justice, as Principal Associate Deputy Attorney General (1997), Associate Deputy Attorney General (1995-1997) and Counsel (1994). Fishman also served as Assistant U.S. Attorney for the District of New Jersey (1983-1994).

Patrick J. Fitzgerald was presidentially appointed U.S. Attorney for the Northern District of Illinois in October 2001, and was Attorney General appointed in August-October 2001. Fitzgerald was a member of the AGAC in 2001-2004 and 2008-2009, serving as interim chair in 2009. Prior to his appointment as U.S. Attorney, Fitzgerald served in the U.S. Attorney’s Office in the Southern District of New York as Chief of the Organized Crime-Terrorism Unit (1995-2001), Chief of the Narcotics Unit (1994), and Assistant U.S. Attorney (1988-1994). Prior to joining the U.S. Attorney’s Office, Fitzgerald was a litigation associate with Christy & Viener, New York, N.Y. (1985-1988).

Neil H. MacBride was presidentially appointed U.S. Attorney for the Eastern District of Virginia on Sept. 18, 2009. McBride previously served as Associate Deputy Attorney General, Department of Justice (2009); General Counsel and Vice President, Anti-Piracy for Business Software Alliance (2005-2009); Chief Counsel and Staff Director for Senator Joseph R. Biden, Jr., U.S. Senate, Committee on the Judiciary (2001-2005); Assistant U.S. Attorney for the District of Columbia (1997-2001); and associate with Verner, Liipfert, Bernhard, McPherson & Hand, Chartered (1993-1997).

Peter F. Neronha was presidentially appointed U.S. Attorney for the District of Rhode Island on September 16, 2009. He previously served as Assistant U.S. Attorney for the District of Rhode Island (2002-2009); Assistant Attorney General (2001-2002) and Special Assistant Attorney General (1996-2001) for the Department of the Attorney General, state of Rhode Island; and Associate with Goodwin Proctor LLP (1989-1995).

Joyce White Vance was presidentially appointed U.S. Attorney for the Northern District of Alabama on Aug. 27, 2009, and was Attorney General appointed in June 2009-August 2009. Vance served as Assistant U.S. Attorney and Appellate Division Chief for the Northern District of Ala. (1991-2009); associate with Bradley, Arant, Rose & White, Birmingham, Ala. (1988-1991); summer associate with McDermott, Will & Emery, Washington, DC (1988); and associate with Arant, ox Kitner, Plotkin & Kahn, Washington, DC (1984-1988).

Channing D. Phillips was appointed Acting U.S. Attorney for the District of Columbia on May 30, 2009. Phillips previously served in the U.S. Attorney’s Office for the District of Columbia as Principal Assistant U.S. Attorney (2004-2009), Chief of Staff (2001-2004), Special Counsel (1997-2001) and Assistant U.S. Attorney (1994-1997). Phillips was a trial attorney with the Organized Crime and Racketeering Section, Department of Justice (1990-1994).

WASHINGTON – Tommy Handy, aka "Tom Tom," waived indictment and pleaded guilty in federal court in Little Rock, Ark., to a federal charge of sex trafficking of an underage female, announced Thomas E. Perez, Assistant Attorney General for the Civil Rights Division, Jane W. Duke, U.S. Attorney for the Eastern District of Arkansas, and Thomas J. Browne, Special Agent in Charge of the Little Rock Field Office of the FBI. 

Handy, 45, admitted during the hearing that he knew an underage female with the initials of "DB" was between the ages of 14 and 18 when she was caused to engage in commercial sex acts and that Handy benefitted from her engaging in the commercial sex acts. According to the plea agreement, the pending indictment was dismissed upon the court’s acceptance of Handy’s plea to the sex trafficking charge. As a result of his plea, Handy could be sentenced to a minimum of 10 years and up to life in prison. A sentencing hearing will be scheduled by the court. Handy remains in custody pending his sentencing.

Handy’s co-defendant, Everett Cooney, who is also in custody, also pleaded guilty to this charge on July 10, 2009, and is awaiting sentencing.

The case is the result of a joint investigation conducted by the FBI; the Bureau of Alcohol, Tobacco, Firearms and Explosives; and the Little Rock Police Department. The case is being prosecuted by Assistant U.S. Attorney John Ray White and Trial Attorney Jim Felte of the Civil Rights Division’s Human Trafficking Prosecution Unit.

WASHINGTON – The Justice Department today filed a motion to intervene in Disability Advocates Inc. v. David A. Paterson, et al. in federal court in the Eastern District of New York. The United States alleges that the state of New York has failed to house thousands of individuals with mental illness who currently reside in large, institutional "adult homes" in the most integrated setting, in violation of Title II of the Americans with Disabilities Act (ADA) and Section 504 of the Rehabilitation Act. An integrated setting is a setting that enables individuals with disabilities to interact with nondisabled persons to the fullest extent possible.

On Sep. 8, 2009, the district court ruled that the state discriminated against individuals with mental illness residing in adult homes, in violation of the integration mandate of the ADA and the Rehabilitation Act. The case has entered a stage where the court will determine a remedy for the violations. The United States now seeks to participate in crafting that remedy.

"As the Supreme Court determined in the landmark Olmstead v. L.C. case, unjustified institutionalization stigmatizes individuals with disabilities as unworthy of participation in community life," said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. "New York successfully provides community-based housing, such as scattered site apartments with supportive services, for individuals just like those currently residing in adult homes, and should provide the same opportunity for adult home residents."

"By moving to intervene in this case, we seek to support the development of an appropriate court-ordered remedy to ensure that the civil rights of individuals with mental illness in the city and state of New York are appropriately protected," said Benton J. Campbell, U.S. Attorney for the Eastern District of New York.

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

WASHINGTON - A former U.S. Army contracting official was sentenced today to 40 months in prison for accepting more than $80,000 in bribes in exchange for corruptly providing contract work to two Afghan trucking companies, announced Assistant Attorney General of the Criminal Division Lanny A. Breuer and U.S. Attorney Neil H. MacBride of the Eastern District of Virginia.

James Paul Clifton, 35, of Newport News, Va., was also ordered by U.S. District Court Judge Liam O’Grady to serve three years of supervised release following the prison term.  Clifton pleaded guilty to one count of bribery on Aug. 7, 2009, in U.S. District Court for the Eastern District of Virginia. 

The U.S. Army operates the Bagram Airfield in support of military operations in Afghanistan.  According to court documents, the Army assigns a contracting officer representative (COR) to review all transportation requests and transportation providers.  The Army assigned Clifton, a staff sergeant, to be the COR at the Bagram Airfield in February 2008.  Clifton’s duties included overseeing the companies providing ground transportation to and from Bagram Airfield and objectively determining whether the companies’ service had been adequate.  

According to the plea agreement, employees for AIT, a trucking company operating at Bagram Airfield, began to offer Clifton gifts almost immediately after he was assigned to his position.  Despite initially refusing the gifts, Clifton admitted he accepted a cellular telephone in May 2008, paid for by AIT.  According to court documents, AIT then began to make payments to Clifton at a rate of $20,000 a month.  Clifton admitted that in exchange for the payments, he agreed to assign one extra day of trucking service to the company.  Clifton also admitted that later in the month, another Afghan trucking company, ATT, entered into a similar illegal agreement with him.   Clifton further admitted that in exchange for bribe payments of $15,000 a month, he assigned ATT an additional day of trucking service a month.  Between May and October 2008, Clifton admitted, ATT and AIT made $87,000 in payments to him.  According to court documents, affiliates of both companies wired the payments from Dubai, United Arab Emirates, to Clifton’s then-girlfriend in Newport News, Va.  According to the terms of their agreement, the companies had agreed to pay Clifton an additional $10,000, although he never received the payments. 

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 Liam Brennan.  The investigation is being conducted by Defense Criminal Investigative Service, the FBI and members of the National Procurement Fraud Task Force.

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.

WASHINGTON – A former State Department employee was sentenced today to 12 months of probation for illegally accessing more than 75 confidential passport application files, Assistant Attorney General Lanny A. Breuer of the Criminal Division announced. William A. Celey, 28, of Washington, was also ordered to perform 50 hours of community service by U.S. Magistrate Judge Deborah A. Robinson in the District of Columbia. On July 10, 2009, Celey pleaded guilty to a one-count criminal information charging him with unauthorized computer access.

According to court documents, from August 2003 through July 2004, Celey worked as a contract employee for the State Department as a file assistant. According to plea documents, Celey admitted he had access to official State Department computer databases in the regular course of his employment, including the Passport Information Electronic Records System (PIERS), which contains all imaged passport applications dating back to 1994. The imaged passport applications on PIERS contain, among other things, a photograph of the passport applicant as well as certain personal information including the applicant's full name, date and place of birth, current address, telephone numbers, parent information, spouse’s name and emergency contact information. These confidential files are protected by the Privacy Act of 1974, and access by State Department employees is strictly limited to official government duties.

In pleading guilty, Celey admitted that between June 22, 2004, and July 15, 2004, he logged onto the PIERS database and viewed the passport applications of more than 75 celebrities and their families, actors, models, musicians, athletes, record producers, family members, a politician and other individuals identified in the press. Celey admitted that he had no official government reason to access and view these passport applications, but that his sole purpose in accessing and viewing these passport applications was idle curiosity.

Celey is the sixth current or former State Department employee 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. On March 23, 2009, Cross was sentenced 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 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, Karak 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.

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

WASHINGTON -- Daryl Haynor, an accountant who was a tax partner at an accounting firm in Tysons Corner, Va., and Jon Flask, an attorney who was a partner at a law firm in Vienna, Va., were indicted today for conspiracy to defraud the Internal Revenue Service (IRS) and for corruptly endeavoring to obstruct and impede the due administration of the internal revenue laws, the Justice Department and IRS announced.

Michael Parker, who was the chief operating officer of TransCapital Corporation, a tax-advantaged investments company based in Northen Virginia, was also charged today in a criminal information with conspiracy to defraud the IRS. According to a plea agreement that was also filed today, Parker has agreed to plead guilty to this conspiracy count.

According to the indictment, from 1998 through 2006, Haynor, Flask and Parker marketed and implemented a tax shelter called the "Sale Leaseback of Tenant Improvements Strategy" (SLOTS), which enabled various U.S. corporations to claim tax deductions totaling more than $240 million on corporate income tax returns filed with the IRS. During 2002 through 2004, the IRS audited three U.S. corporations that had claimed losses generated by SLOTS transactions.

The indictment alleges that Haynor, Flask and Parker conspired to impede and impair the IRS by making false and misleading statements to IRS agents and attorneys during these audits. The indictment further alleges that tax opinion letters were issued in connection with SLOTS transactions that omitted material facts and contained false and misleading information.

Additionally, the indictment alleges that Haynor, Flask and Parker concealed certain aspects of the tax shelter transaction from SLOTS clients for the purpose of impeding and impairing the IRS.

According to his plea agreement, Parker admitted that he and others took affirmative steps to conceal, mislead and deceive the IRS by misrepresenting facts concerning SLOTS. Parker further acknowledged that the SLOTS tax shelter and related transactions were themselves nothing more than devices to disguise and conceal mere financing transactions.

If convicted, Haynor and Flask face a maximum sentence of eight years in prison and a $500,000 fine. Parker faces a maximum sentence of five years in prison and a $250,000 fine.

An indictment is merely a formal charge by the grand jury. Defendants are presumed innocent unless and until proven guilty in U.S. district court.

The case is being prosecuted by Justice Department Tax Division Trial Attorneys John E. Sullivan and Joseph A. Rillotta. The case was investigation by IRS-Criminal Investigation.

Additional information about the Justice Department’s Tax Division and its enforcement efforts may be found at http://www.usdoj.gov/tax.

WASHINGTON – Gregory William Fair, 46, of Falls Church, Va., was sentenced today to 41 months in prison for selling counterfeit computer software on the Internet, in violation of criminal copyright infringement laws, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division and Acting U.S. Attorney for the District of Columbia Channing D. Phillips.

Fair was also sentenced by Judge R. W. Roberts in the U.S. District Court for the District of Columbia to three years of supervised release and was ordered to pay $743,098 in restitution. Fair forfeited $144,000 in currency seized from a safety deposit box and residence, one BMW 525i, one Hummer H2, one Mercedes CL600 and one 1969 Pontiac GTO, all of which were purchased with the illegal proceeds of the scheme.

Fair pleaded guilty on April 16, 2009, to one count of criminal copyright infringement and one count of mail fraud for selling pirated business software on the eBay Web site. According to court documents, the software sold by Fair had a combined retail value of more than $1 million. In his plea, Fair admitted that from 2001 through 2007, he used a variety of eBay user identifications to sell a large volume of counterfeit software without authorization from the copyright owners.

The case is part of the Department of Justice’s ongoing initiative to combat the sale of pirated software and counterfeit goods through commercial Web sites and online auction sites. To date, the Department has obtained 39 convictions involving online auction and commercial distribution of counterfeit software. The Department’s initiative to combat online auction piracy is just one of several steps being undertaken to address the losses caused by intellectual property theft and hold responsible those engaged in criminal copyright infringement.

The case is being prosecuted by Trial Attorney Marc Miller of the Criminal Division’s Computer Crime and Intellectual Property Section as well as Assistant U.S. Attorneys Thomas Hibarger and Glenn S. Leon of the District of Columbia. The case was investigated by the U.S. Postal Inspection Service in Washington, D.C.

WASHINGTON -- Three Ohio residents, Mohammad Zaki Amawi, 29, Marwan Othman El-Hindi, 46, and Wassim I. Mazloum, 28, have been sentenced to prison terms ranging from more than 8 years to 20 years for conspiring to commit terrorist acts against Americans overseas, including U.S. military personnel in Iraq, and other terrorism-related violations.

The sentences, which were handed down yesterday by U.S. District Court Chief Judge James G. Carr in the Northern District of Ohio, were announced by David Kris, Assistant Attorney General for National Security; Stephen M. Dettelbach, U.S. Attorney for the Northern District of Ohio; and C. Frank Figliuzzi, Special Agent in Charge, Cleveland Division of the Federal Bureau of Investigation (FBI).

Judge Carr sentenced Amawi to a term of 20 years incarceration followed by life on supervised release. El-Hindi was sentenced to a term of 13 years incarceration, including 12 years for the terror violations and 18 months for a separate fraud conviction. Mazloum received a sentence of 100 months or 8.3 years incarceration followed by life on supervised release.

In February 2007, Amawi, El-Hindi, and Mazloum were charged in a superseding indictment with conspiring to kill or maim persons outside the United States, including U.S. military personnel serving in Iraq, and conspiring to provide material support to terrorists. Amawi and El-Hindi were also charged individually with distributing information regarding the manufacture or use of explosives, including suicide bomb vests and Improvised Explosive Devices (IEDs).

On June 13, 2008, a jury convicted the defendants on all counts. Amawi, a citizen of Jordan and the United States, and El Hindi, a naturalized U.S. citizen born in Jordan, were each convicted of one count of conspiring to kill or maim persons outside the United States, one count of conspiring to provide material support to terrorists, and two counts of distributing information on explosives. Mazloum, a U.S. legal permanent resident from Lebanon, was convicted of one count of conspiring to kill or maim persons outside the United States and one count of conspiring to provide material support to terrorists. The convictions represented the nation’s first successful trial of a "homegrown terror cell" for terrorism related crimes.

At trial, the government proved that all three defendants engaged in a conspiracy, beginning sometime prior to June 2004, to kill or maim persons outside the United States, including U.S. armed forces personnel in Iraq. As part of the conspiracy, the defendants conducted firearms training and accessed and copied instructions in the construction and use of explosives – including IEDs and suicide bomb vests. In addition, the defendants conspired to recruit others to participate in jihad training; researched and solicited funding sources for such training; and proposed sites for training in firearms, explosives and hand-to-hand combat to prospective recruits.

The government also proved that all defendants conspired to provide material support and resources, including personnel, money, explosives and laptop computers, to terrorists, including a co-conspirator in the Middle East, who had requested such materials for use against U.S. and coalition forces in Iraq. For example, among other activities, Amawi communicated with a contact in the Middle East on chemical explosives and traveled to Jordan in August 2005 with laptop computers intended for delivery to mujahideen "brothers."

The government also proved that Amawi knowingly distributed a guide describing the step-by-step process for manufacturing chemical explosive compounds, as well as a video entitled, "Martyrdom Operation Vest Preparation," which described the step-by-step construction and use of a suicide bomb vest. Amawi distributed these materials with the intent that they be used for training others to commit a crime of violence, including the killing of U.S. nationals overseas.

The government further proved that El-Hindi knowingly distributed a slide show demonstrating the preparation and use of IEDs against apparent U.S. military vehicles and personnel, as well as the video entitled "Martyrdom Operation Vest Preparation." El-Hindi distributed these materials with the intent that they be used for training others to commit a crime of violence, including the killing of U.S. nationals overseas.

Assistant Attorney General Kris, U.S. Attorney Dettelbach and Special Agent in Charge Figliuzzi thanked the many different agencies that worked on this case. The investigation was conducted by the FBI and the Joint Terrorism Task Force in Toledo, Ohio, with support from the FBI in Chicago, and with the assistance of the Internal Revenue Service, Criminal Investigation Division; the U.S. Secret Service; U.S. Immigration and Customs Enforcement; the Drug Enforcement Administration; the Ohio Highway Patrol; the Toledo Police Department; and the Lucas and Wood County Sheriff’s Departments.

This case was prosecuted by Assistant U.S. Attorneys Thomas E. Getz and Justin E. Herdman of the National Security Unit of the U.S Attorney’s Office in Cleveland, as well Assistant U.S. Attorneys Gregg N. Sofer of the U.S. Attorney’s Office in Austin, Texas, and Assistant U.S. Attorney David I. Miller of the U.S. Attorney’s Office in New York, (both formerly of the Justice Department’s Counterterrorism Section) and Trial Attorney Jerome J. Teresinski of the Justice Department’s Counterterrorism Section. The U.S. Attorney’s office in Detroit also provided assistance in this case.

WASHINGTON--A federal grand jury in the Western District of New York, has returned a superseding indictment charging David Vega and Francis Rowe with committing violations of the Clean Air Act while they were project managers for Gordon-Smith Contracting, Inc., an asbestos removal company owned by Keith Gordon-Smith, the Justice Department announced.

The indictment supersedes an earlier indictment returned by the grand jury in June 2009, against Keith Gordon-Smith, charging him with numerous violations of the Clean Air Act, submitting false statements and obstruction of justice. The superseding indictment now also charges Gordon-Smith’s company with the same criminal violations. In addition, the superseding indictment charges Francis Rowe with submitting a false statement in an effort to obtain a court-appointed attorney.

The charges stem from allegations that Gordon-Smith, Gordon-Smith Contracting, Vega and Rowe directed and caused workers to illegally remove and dispose of asbestos during the demolition of the Genesee Hospital complex in Rochester, N.Y.

The Clean Air Act requires contractors who remove asbestos from public buildings to follow federally-established work practice standards to ensure the safe removal of the asbestos. The required standards include providing notice to the U.S. Environmental Protection Agency (EPA) before commencing asbestos removal, adequately wetting the asbestos during the removal and before disposal, and properly disposing of the asbestos at an EPA-approved disposal site.

The 18-count indictment alleges that at different time periods between June 2007 and April 2009, Gordon-Smith, Vega and Rowe had Gordon-Smith Contracting employees remove asbestos from the Genesee Hospital complex without ensuring that the asbestos was kept adequately wet or properly disposed. The indictment also alleges that Gordon-Smith caused his company’s employees to perform illegal asbestos removal at other sites, including schools, and that Gordon-Smith took several steps to hide the illegal asbestos removal from federal agencies. These included failing to provide prior notification to EPA before the asbestos removal projects were performed at the schools and hospital, giving false statements to an inspector from the Occupational Safety and Health Administration, and providing a false notification to the EPA.

If convicted, Gordon-Smith, Vega and Rowe could each be punished by up to five years in prison as well as a criminal fine of up to $250,000 for each count. Gordon-Smith Contracting could be subject to a criminal fine of the greater of $500,000 or twice the gain obtained by the company or suffered by any victims as a result of the crimes, for each count.

The U.S. Attorney’s Office for the Western District of New York has established a page on its Web site at http://www.usdoj.gov/usao/nyw to provide information for potential victims who may have been harmed as a result of the alleged crimes.

The case is being prosecuted by the U.S. Attorney’s Office for the Western District of New York and the Justice Department’s Environmental Crimes Section. The case was investigated by the EPA Criminal Investigation Division and the U.S. Department of Labor Office of the Inspector General.

WASHINGTON – Today Attorney General Eric Holder announced the arrest of nearly 1,200 individuals on narcotics-related charges and the seizure of more than 11.7 tons of narcotics as part of a 44-month multi-agency law enforcement investigation known as "Project Coronado." The Attorney General was joined in announcing the current results of Project Coronado by DEA Acting Administrator Michele M. Leonhart, FBI Director Robert S. Mueller III and ATF Acting Director Kenneth E. Melson.

Over the past two days, 303 individuals in 19 states were arrested as part of Project Coronado, which targeted the distribution network of a major Mexican drug trafficking organization known as La Familia, through coordination between federal, state and local law enforcement. More than 3,000 agents and officers operated across the United States to make the arrests during the two-day takedown. During the two-day operation alone, $3.4 million in U.S. currency, 729 pounds of methamphetamine, 62 kilograms of cocaine, 967 pounds of marijuana, 144 weapons and 109 vehicles were seized by law enforcement agents.

"This unprecedented, coordinated U.S. law enforcement action - the largest ever undertaken against a Mexican drug cartel - has dealt a significant blow to La Familia’s supply chain of illegal drugs, weapons and cash flowing between Mexico and the United States," said Attorney General Holder. "We will not allow these cartels to operate unfettered in our country, and with the increases in cooperation between U.S. and Mexican authorities in recent years, we are taking the fight to our adversaries. We will continue to stand strong with our partners in Mexico as we work to disrupt and dismantle cartel operations on both sides of the border."

The La Familia cartel is a violent drug trafficking cartel based in the state of Michoacán, in southwestern Mexico. According to court documents, La Familia controls drug manufacturing and distribution in and around Michoacán, including the importation of vast quantities of cocaine and methamphetamine from Mexico into the United States. La Familia is philosophically opposed to the sale of methamphetamine to Mexicans, and instead supports its export to the United States for consumption by Americans. La Familia is a heavily armed cartel that has utilized violence to support its narcotics trafficking business including murders, kidnappings and assaults. According to one indictment unsealed in the Southern District of New York, associates of La Familia based in the United States have allegedly acquired military-grade weapons, including assault weapons and ammunition, and have arranged for them to be smuggled back into Mexico for use by La Familia. In a criminal complaint filed in Dallas, ATF investigators allege that operatives of La Familia shipped hundreds of firearms from the U.S. to Mexico over a 12-month period ending in October 2009.  Individuals indicted in the cases are charged with a variety of crimes, including: conspiracy to distribute methamphetamine, cocaine and marijuana; distribution of methamphetamine, cocaine and marijuana; conspiracy to import narcotics into the United States; money laundering; and other violations of federal law. Numerous defendants face forfeiture allegations as well.

To date, Project Coronado has led to the arrest of 1,186 individuals and the seizure of approximately $32.8 million in U.S. currency, and approximately 2,710 pounds of methamphetamine, 1,999 kilograms of cocaine, 29 pounds of heroin, 16,390 pounds of marijuana, 389 weapons and 269 vehicles.

"Project Coronado, our massive assault on the La Familia Cartel, is part of our continued fight against all of the powerful Mexico-based drug cartels," said DEA Acting Administrator Michele M. Leonhart. "This organization, the newest of Mexican cartels, is directly responsible for a vast majority of the methamphetamine pouring into our country across our Southwest Border, and has had a hand in fueling the cycle of violence that is wracking Mexico today.  DEA, along with our U.S. and Mexican partners, are committed to strategically attacking the international and domestic drug trade with every tool at our disposal, and defeating those that thrive on the suffering of others."

"Multi-agency coordinated investigations such as Project Coronado are the key to disrupting the operations of complex criminal organizations like La Familia.  Together – with the strong collaboration of our international, federal, state and local partners – we have dealt a substantial blow to a group that has polluted our neighborhoods with illicit drugs and has terrorized Mexico with unimaginable violence," said Director Mueller.   

"ATF’s arrest of defendants in Project Coronado highlight the almost inseparable link between illegal trafficking of firearms and narcotics between the U.S. and Mexico," said ATF Acting Director Kenneth Melson. "ATF is on the frontline against violent crime and focuses its investigative tools on criminal groups such as La Familia, which use firearms to further their illegal trade and ruin and endanger countless lives.  It is alleged that La Familia used proceeds from the sale of drugs to purchase or obtain hundreds of firearms that were then moved illicitly to Mexico."  

"The operation to dismantle the La Familia drug trafficking organization in the United States demonstrates an unprecedented level of partnership and coordination at the local, state and federal levels.  We at ICE are proud to have played an important role in yesterday’s operation and look forward to continuing to work with our law enforcement partners to target these criminal organizations," said Immigration and Customs Enforcement (ICE) Assistant Secretary John Morton.  

Arrests were made or charges have been unsealed yesterday and today related to Project Coronado  in the following districts: Central District of California, Southern District of California, District of Colorado, Northern District of Georgia, District of Massachusetts, District of Minnesota, Southern District of Mississippi, Eastern District of Missouri, Northern District of Oklahoma, Southern District of New York, Northern District of New York, Middle District of North Carolina, District of South Carolina, Middle District of Tennessee, Eastern District of Texas, Northern District of Texas, Western District of Texas and the Western District of Washington.  There were also arrests by state authorities in California, Nevada, North Carolina and Georgia.  Assistance for Project Coronado was provided by the Criminal Division’s Narcotic and Dangerous Drug Section and Office of International Affairs.  Additionally, local prosecutions will occur in San Diego, San Bernardino, Los Angeles and Orange County, Calif.; Clark County, Nev.; Gwinnett County, Ga.; and Pitt County, N.C.

The investigative efforts in Project Coronado were coordinated by the multi-agency Special Operations Division, comprised of agents and analysts from the DEA, FBI, ICE, Internal Revenue Service, U.S. Customs and Border Protection, U.S. Marshals Service and ATF, as well as attorneys from the Criminal Division’s Narcotic and Dangerous Drug Section. More than 300 federal, state, local and foreign law enforcement agencies contributed investigative and prosecutorial resources to Project Coronado through the Organized Crime Drug Enforcement Task Forces.

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