District Not Recorded
The source did not name an office we could identify. These records remain unassigned rather than guessed.
Justice Department Announces Success in Battle Against Firearms Trafficking and Recovery Act Funds to Build on Project GunrunnerRead the Press Release
HOUSTON – Deputy Attorney General David W. Ogden and Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Acting Director Kenneth E. Melson today announced the results of ATF’s Gun Runner Impact Team (GRIT) initiative, a 120-day deployment of ATF resources to the Houston Field Division to disrupt illegal firearms trafficking by Mexican drug cartels. The Justice Department officials also outlined the $10 million in American Recovery and Reinvestment Act funds that have been allocated to support the initiative going forward.
GRIT was developed to aggressively target and disrupt groups and organizations responsible for trafficking firearms to Mexico. The GRIT initiative was a component of Project Gunner, ATF’s comprehensive firearms trafficking strategy along the Southwest Border.
"The Department of Justice has pledged its unconditional commitment to better protect the Southwest Border with initiatives such as Project Gunrunner, by targeting the source of the violence -- the illegal firearms traffickers," said Ogden. "The Department of Justice is using the vital funding from the Recovery Act to continue to build an infrastructure to combat violent crime and firearms trafficking along our southwest border as part of Project Gunrunner."
"This concentration of additional personnel accomplished more in four months than we were able to achieve in almost three years in some areas along the border," said Melson. "The temporary deployment of veteran ATF special agents and industry operations investigators (IOIs) to the Houston Field Division has made enormous inroads into stemming the firearms-related violent crime in the United States and along the Mexican border. We have begun to flush out firearms trafficking schemes and routes, producing tangible results in the form of open investigations, arrests, seizures and criminal case referrals."
The GRIT initiative brought 100 experienced ATF personnel from around the country to southern Texas. The special agents investigated more than 1,000 criminal leads and seized more than 440 illegal firearms, 141,440 rounds of ammunition, $165,000 in U.S. currency, 1,500 pounds of marijuana, and additional drugs and explosive devices. The IOIs conducted nearly 1,100 federal firearms licensee compliance inspections involving 70,000 firearms and resulting in 440 violations.
ATF’s GRIT special agents opened 276 federal firearms trafficking-related criminal cases in just four months.
ATF received $10 million through the Recovery Act to continue to build an infrastructure to further the accomplishments of Project Gunrunner. As part of the $10 million, ATF is hiring 25 new special agents, six industry operations investigators, three intelligence research specialists and three investigative analysts. The funding will establish three permanent field offices, dedicated to firearms trafficking investigations, in McAllen, Texas; El Centro, Calif.; and Las Cruces, N.M.; and a satellite office in Roswell, N.M.
For more information on Project Gunrunner or other ATF programs, please visit www.atf.gov.
Former New Jersey Firefighter Sentenced to Prison<br /> for Tax EvasionRead the Press Release
WASHINGTON - Matthew Fox, a former Atlantic City, N.J., firefighter, was sentenced today to 18 months in prison by U.S. District Court Judge Jerome B. Simandle in Newark, N.J., the Justice Department and Internal Revenue Service (IRS) announced. Fox was also sentenced to three years of supervised release and was ordered to pay the IRS tax due in the amount of $110,465 plus interest and penalties as a condition of his supervised release.
Following a jury trial in July 2007, Fox was convicted of five counts of tax evasion for failing to report more than $400,000 in income from 1998 through 2002. According to court documents and evidence presented at trial, Fox fraudulently avoided reporting cash income he earned as a bouncer and manager at an exotic dance club in Atlantic City. Initially, Fox received cash tips and hourly pay for the time he worked at the dance club as a bouncer. Then, in approximately August 1999, when he became a manager, Fox received wages from the club, and also continued to receive cash tips from the exotic dancers. Fox failed to report all or a substantial amount of income received from the exotic dance club for years 1998 through 2002.
Acting Assistant Attorney General John A. DiCicco commended Special Agents with IRS Criminal Investigation for their work on the case, as well as Tax Division trial attorney Michael P. Ben’Ary who prosecuted the case.
Polembros Shipping LTD. Pleads Guilty to Crimes Related to Pollution from Cargo Ship Traveling to New OrleansRead the Press Release
WASHINGTON—Polembros Shipping LTD., a ship management company headquartered in Greece, pleaded guilty today in federal court in New Orleans for violating anti-pollution laws, ship safety laws, and making false statements during a U.S. Coast Guard investigation of the M/V Theotokos, the Justice Department announced.
According to the plea agreement, Polembros will pay a $2.7 million criminal fine and a separate $100,000 community service payment to the Smithsonian Environmental Research Center, a subunit of Smithsonian Institute. The money will be used to research and mitigate the effects of marine invasive species suspected to be transported in ballast waters of ocean-going vessels. Invasive species can threaten native species and damage the ecosystems of the United States.
As part of the plea agreement, Polembros will also serve three years probation. As a condition of the probation, all ships owned or managed by Polembros (currently 20 vessels) will be barred from entering U.S. ports and territorial waters for three years.
“Today’s guilty plea carries with it a requirement, pending court review, that will prevent the company from participating in economic activity that takes place in territorial ports and waterways of the United States,” said John C. Cruden, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. “The industry should take heed that the Justice Department and our investigative counterparts will continue to prosecute and seek penalties for those who violate our nation’s environmental laws.”
“This case is historic in that it is the first prosecution under the Nonindigenous Aquatic Nuisance Prevention and Control Act. As a component of the Coast Guard’s maritime stewardship mission we are committed to the prevention and abatement of environmental crimes including those which may fall under the Nonindigenous Aquatic Nuisance Prevention and Control Act,” said Rear Admiral Mary E. Landry, Commander of the Eighth Coast Guard District.
Polembros pleaded guilty to violating two counts of the Act to Prevent Pollution from Ships, one count in connection with failing to maintain an accurate oil record book for the cargo ship M/V Theotokos and the other concerning the carrying of fuel oil in a tank forward of the collision barrier; violating the Nonindigenous Aquatic Nuisance Prevention and Control Act, by failing to maintain accurate ballast water records; violating the Ports of Waterways Safety Act, by failing to report hazardous condition of the crack on the rudder stem of the ship; and making false statements by concealing the fact that fuel oil was leaking into the forepeak ballast tank.
According to court documents, the ship’s master reported the rudder stem crack by phoning Polembros’ technical department (part of the land-based management) shortly after the crack was seen following a cargo unloading operation in China. Polembros and its employees knew about that crack prior to the vessel arriving in New Orleans, but the defendant and its employees did not notify or disclose the aft crack to the U.S. Coast Guard until the Theotokos crew was confronted by Coast Guard inspectors on Oct. 1, 2008. The company and its employees knew that before coming to the United States that it was under a legal obligation to notify the Coast Guard of any hazardous condition. A crack on the rudder stem, especially one that allows for the ingress and egress of water, is of particular concern. Prior to the detention of the vessel by the Coast Guard, no repairs were undertaken for the rudder stem crack at sea, or otherwise, prior to arriving in New Orleans.
With regard to the oil record book violation, bilge waste accumulates in deep spaces and is also held in bilge tanks. Under the International Convention for the Prevention of Pollution from Ships, bilge wastes may be discharged overboard into the ocean only if they contain less than 15 parts per million of oil. The principal technology utilized to lower the petroleum content of oil-contaminated water is a centrifugal separation machine, also known as an oil water separator. At some point, the ship’s oil water separator ceased functioning properly. During the voyage from Korea to Panama, the chief engineer contacted Polembros’ land-based management regarding the problems with the oil water separator.
During the ship’s operation, bilge waste accumulated and needed to be disposed of to keep the system from overflowing. Because the oil water separator was not functioning properly, the chief engineer directed the engineering crew to bypass the oil water separator and discharge bilge waste directly overboard. The primary overboard outlet for the oily mixtures was through the overboard sewage discharge valve. None of these discharges were recorded, as required, in the vessel’s oil record book, even though the chief engineer was responsible for maintaining its accuracy with regard to machinery space operations.
The investigation into the M/V Theotokos led to the first criminal prosecutions under the Nonindigenous Aquatic Nuisance Prevention and Control Act, both the first individual and organization charged under the statute. The false statement charge related to the crew’s attempt to conceal the fact that fuel oil was leaking into the forepeak ballast tank.
Polembros is set to be sentenced on Dec. 9, 2009.
Additionally, on July 15, 2009, Panagiotis Lekkas, the master and highest ranking officer aboard the ship, pleaded guilty to obstruction of justice and violations of environmental and ship safety laws. Charles P. Posas, the vessel’s chief officer, pleaded guilty to one count of false statement and one count of violating the Nonindigenous Aquatic Nuisance Prevention and Control Act. Lekkas and Posas are scheduled to be sentenced on Oct. 14, 2009, and Oct. 1, 2009, respectively. In another related case, the chief engineer of the Theotokos, Georgios Stamou, pleaded guilty to one count of false statements and one count of violating the Act to Prevent Pollution from Ships. Stamou is scheduled to be sentenced on Nov. 5, 2009.
The case was investigated by the U.S. Coast Guard Investigative Service with assistance from inspectors from Sector New Orleans as well as legal assistance from U.S. Coast Guard in New Orleans and at Headquarters in Washington, D.C. The case is being prosecuted by Christopher L. Hale of the Justice Department’s Environmental Crimes Section along with Dorothy Taylor of the U.S. Attorney’s Office in New Orleans.
Owner of Tennesse Salvage and Demolition Company Pleads Guilty to Environmental CrimesRead the Press Release
WASHINGTON—The owner of a Chattanooga, Tenn., salvage and demolition company, Watkins Street Project LLC, pleaded guilty today in federal court in Chattanooga, Tenn., for conspiring to violate the Clean Air Act and to defraud the United States.
Gary Fillers of Chattanooga, Tenn., pleaded guilty before U.S. District Judge Collier for the Eastern District of Tennessee to one criminal felony count for conspiring to violate the Clean Air Act’s “work practice standards” related to the proper stripping, bagging, removal and disposal of asbestos.
According to the charges, Fillers and other indicted and unindicted co-conspirators, engaged in a year-long scheme in which substantial amounts of regulated asbestos containing materials was removed from the former Standard Coosa Thatcher Plant without following the Clean Air Act and the regulations governing Environmental Protection Agency (EPA) notification requirements; removing all asbestos prior to demolition; and stripping, bagging, removal and disposal of such asbestos.
“Work practice standards under the Clean Air Act are designed to protect workers from the harmful effects of asbestos,” said John C. Cruden, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. “Conspiring to violate these work practice standards will not be tolerated and those who do can expect to be prosecuted.”
“Exposure to asbestos can cause cancer and other serious respiratory diseases,” said Maureen O'Mara, Special Agent-in-Charge of EPA’s criminal enforcement program in Atlanta. “Those who put the public health at risk will be vigorously prosecuted.”
Fillers faces up to five years in prison and a fine of up to $250,000 or twice the gross gain or loss to the victims. Today’s plea is related to the indictment of Watkins Street Project LLC, Mathis Companies Inc., Donald Fillers, James Mathis and David Wood. All of these defendants pleaded not guilty to related conspiracy, Clean Air Act, false statements and obstruction of justice charges on Sept. 14, 2009. Trial is currently set to begin on Nov.18, 2009, before Judge Collier.
Asbestos has been determined to cause lung cancer, asbestosis and mesothelioma, an invariably fatal disease. EPA has determined that there is no safe level of exposure to asbestos.
This case was investigated by EPA special agents and investigators with Chattanooga-Hamilton County Air Pollution Control Bureau. The case is being prosecuted by Assistant U.S. Attorney Matthew T. Morris and Todd W. Gleason, of the Justice Department’s Environmental Crimes Section.
New OCDETF Strike Force Site Unveiled, Successes of Phoenix Operation HighlightedRead the Press Release
PHOENIX – Deputy Attorney General David W. Ogden, along with U.S. Attorney Dennis K. Burke, Acting Director of the Bureau of Alcohol, Tobacco and Firearms Kenneth Melson, Drug Enforcement Administration Deputy Chief of Operations Dave Gaddis, and other federal and local officials today officially unveiled the new Organized Crime Drug Enforcement Task Force (OCDETF) Strike Force site in Phoenix.
The Phoenix Strike Force is housed in the offices of the DEA Phoenix Division. The OCDETF Strike Force functions as a cohesive unit by bringing together representatives of the partner agencies to more effectively focus on specific investigative targets. Federal, state, and local agencies represented include the DEA; ATF; the Federal Bureau of Investigation (FBI); the U.S. Marshals Service (USMS); the Criminal Division of the Internal Revenue Service (IRS); U.S. Immigration and Customs Enforcement (ICE); the Arizona Department of Public Safety; the Maricopa County Sheriff’s Office; and the Phoenix, Mesa, and South Tucson Police Departments.
“OCDETF Strike Forces, like the one here in Phoenix, reflect the kind of collaborative law enforcement approach that allows us to most effectively combat the vicious drug trafficking organizations such as the Sinaloa Cartel that contribute to violence and other crime in neighborhoods here and across this country,” said Ogden. “Now in its 27th year, the OCDETF program has been a model of interagency coordination, innovation, and teamwork. This strategy recognizes that the most successful way to fight these intricate criminal networks is by combining the strengths, resources, and expertise of federal, state and local agencies.”
“By concentrating experts from so many agencies in one place, the strike force model allows for real-time sharing of intelligence and deployment of strategy,” stated U.S. Attorney for the District of Arizona, Dennis K. Burke. “That advantage allows strike force agents to react more decisively to interdict the actions of large, sophisticated and violent drug trafficking organizations. Coordination leads to better intelligence, quicker reaction and more convictions.”
The Phoenix Field Division formed an OCDETF Strike Force in August 2008 that focuses completely on investigations of command and control elements of the Sinaloa Cartel and Arizona-based distribution cells associated with the Cartel.
Since its inception, the Phoenix Strike Force has indicted a Sinaloa Cartel associated CPOT (Consolidated Priority Organization Target) and RPOT (Regional Priority Organization Target), conducted in excess of 80 wire taps of Sinaloa Cartel related Drug Trafficking Organizations, and has been directly or indirectly responsible for the seizure of over $150 million dollars in U.S. currency, associated assets, and financial instruments. In addition, information provided by the Phoenix Strike Force has led to the seizure of over $29 million in cash and assets in Mexico and 93 arrests in the United States.
“DEA is successfully striking back at the Mexican Cartels that use Phoenix as a major transshipment point for their drug trafficking operations,” said DEA Acting Administrator Michele M. Leonhart. “In coordination with the Calderon Administration, we are targeting and arresting major drug traffickers impacting Arizona, disrupting their operations both in Mexico and the United States. This multi-agency Strike Force, which has already helped take down significant Sinaloa Cartel leadership, is a proven law enforcement tool for tackling the challenges we face along the Southwest Border.”
“Within the OCDETF arena, ATF maintains its focus on major drug traffickers who use firearms to further their trade and violate firearms-trafficking laws, as well as laws relating to explosives,” said ATF Acting Director Kenneth Melson. “Firearms often serve as a form of payment for drugs and, together with explosives and arson, are used as tools by drug organizations for purposes of intimidation, enforcement, and retaliation against their own members, rival organizations, or the community in general. ATF’s jurisdiction and expertise make it a well-suited partner in the OCDETF program.”
Based on the success of the Phoenix Strike Force Group, an additional Strike Force Group was formed in the Phoenix Field Division’s Tucson District Office in June 2009. The Tucson Strike Force Group is comprised of law enforcement personnel from DEA, ATF, ICE, FBI and the South Tucson Police Department. Both Strike Force Groups will continue to pursue OCDETF case designations for federal prosecution and will work in a complementary role with the Arizona HIDTA (High-Intensity Drug Trafficking Area).
New Jersey Hospital to Pay $8.3 Million for Alleged Kickbacks and Causing Submission of False Claims to MedicareRead the Press Release
WASHINGTON - The University of Medicine and Dentistry of New Jersey (UMDNJ) has agreed to pay the government $8.3 million to settle allegations that it illegally paid kickbacks to cardiologists and caused the submission of false claims to Medicare, the Justice Department announced today.
UMDNJ’s University Hospital, which is located in Newark, N.J., is a state-licensed Level 1 Trauma Center. To maintain funding and accreditation from the state, University Hospital was dependent on the annual performance of a certain number of cardiac procedures, including cardiac catheterizations and cardiothoracic surgery.
The government alleged that beginning in 1995, University Hospital was experiencing a decline in these procedures, and to remedy the problem, embarked on a program to bring in more cardio surgery patients through part-time employment contracts with a number of community cardiologists. The government alleges that those employment contracts served as vehicles to pay illegal kickbacks to the cardiologists for their referrals.
“Today’s settlement reflects the Justice Department’s ongoing commitment to protect the integrity of the doctor-patient relationship,” said Tony West, Assistant Attorney General for the Civil Division. “Patients must have confidence that the medical advice and treatments they are getting from their doctors are for the right reasons.”
In 2008, the government reached settlements with six of the cardiologists who had allegedly received kickbacks through their employment contracts with UMDNJ. Two other cardiologists pleaded guilty to criminal embezzlement charges in connection with the employment contract scheme. The government has also filed a civil suit against two other cardiologists who had allegedly illegal employment contracts with UMDNJ.
“The Department of Justice continues to pursue those who make referrals based on financial, rather than patient health, considerations,” said Marc Larkins, 1st Assistant U.S. Attorney for the District of New Jersey.
The settlement was the result of a coordinated effort among the U.S. Attorney’s Office for the District of New Jersey, Affirmative Civil Enforcement Unit; the Commercial Litigation Branch of the Justice Department’s Civil Division; the FBI; and the U.S. Department of Health and Human Services, Office of Inspector General.
Man Indicted for Civil Rights Violations in Connection with Cross-Burning in Athens, LouisianaRead the Press Release
WASHINGTON – Daniel Earl Danforth, 30, of Minden, La., has been indicted by a federal grand jury for hate crime violations and obstruction of justice charges stemming from a cross-burning in Athens, La., last year near the home of an interracial couple. Danforth was arrested today following the return of the indictment on Sept. 25, 2009, announced Acting Assistant Attorney General for Civil Rights Division Loretta King and U.S. Attorney Donald W. Washington for the Western District of Louisiana.
Danforth was charged with one count of interfering with the housing rights of another person; one count of conspiring to interfere with another person’s civil rights; one count of using fire during the commission of a felony; and one count of obstructing justice by destroying evidence. If convicted, he faces a maximum punishment of 10 years for each of the civil rights counts, 10 additional years for the use of fire and 20 years for the obstruction of justice count.
According to the indictment, between Oct. 23 and Oct. 26, 2008, Danforth agreed with at least one other person to build, erect and burn a cross near the home of an interracial couple and relatives who were believed to approve of the interracial relationship. After attempting to recruit others to join the conspiracy, Danforth and his co-conspirator used small pine trees to form a cross, which they then transported to an area adjacent to the victims’ home and where they set the cross on fire in order to intimidate the couple. The indictment also alleges that several days later, after the defendant learned that the FBI was investigating this crime as a potential civil rights violation, he returned to the area and removed the cross to prevent the FBI from discovering it.
This case was investigated by the FBI. The case will be prosecuted by Assistant U.S. Attorney Mary J. Mudrick for the Western District of Louisiana and Trial Attorney Erin Aslan from the Justice Department’s Civil Rights Division.
The charges set forth in an indictment are merely accusations and the defendant is presumed innocent until proven guilty.
Justice Department Settles Lawsuit Against Indianapolis Law Firm to Enforce the Employment Rights of Indiana National GuardsmanRead the Press Release
WASHINGTON – The United States has entered into a consent decree with the Indianapolis law firm of Mike Norris & Associates that, if approved in federal court in Indianapolis, will resolve the Justice Department’s March 16, 2009, complaint on behalf of an Indiana National Guardsman alleging that the law firm violated the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA), the Justice Department announced today. Under the terms of the consent decree, the law firm must provide the National Guardsman, Mathew B. Jeffries, with $40,000 to compensate him for his lost wages and accrued interest.
Subject to certain limitations, USERRA requires that servicemembers who leave their jobs to serve in the U.S. military be timely reemployed by their civilian employers in the same position, or in a comparable position to the position that they would have held had they not left to serve in the military. In its complaint, the department alleged that in February 2003, Jeffries, a staff attorney with Mike Norris & Associates, was called to active duty and deployed to serve in Operation Enduring Freedom in Iraq. Upon his completion of active duty in April 2004, Jeffries contacted the law firm seeking reemployment. According to the complaint, the law firm refused to reemploy Jeffries, so he filed a complaint with the Labor Department’s Veterans’ Employment and Training Service (VETS). VETS investigated the matter, determined that Jeffries’ claim had merit and, upon failure of conciliation efforts, referred the matter to the Justice Department.
“Individuals who sacrifice to serve our Country in the military deserve to know, at the very least, that they can return to their civilian jobs after military service,” said Loretta King, Acting Assistant Attorney General for the Civil Rights Division. “This consent decree demonstrates again our commitment to vigorously enforcing federal laws that protect the employment rights of men and women serving in the military. We are pleased that Mike Norris & Associates has chosen to resolve this lawsuit and abide by the requirements of USERRA.”
The Department’s Civil Rights Division has given a high priority to the enforcement of service members’ rights under USERRA. The Civil Rights Division has filed 19 USERRA lawsuits in 2009 on behalf of servicemembers. Additional information about USERRA can be found on the Justice Department’s Web sites, http://www.usdoj.gov/crt/emp and http://www.servicemembers.gov, as well as on the Labor Department’s Web site at www.dol.gov/vets/programs/userra/main.htm.
Justice Department Reaches Settlement with First United Security Bank of Thomasville, Alabama, Regarding Alleged Discrimination in LendingRead the Press Release
WASHINGTON – First United Security Bank of Thomasville, Ala., will invest more than $600,000, open a new branch in an African-American neighborhood in west central Alabama and take other steps as part of a settlement to resolve allegations that it engaged in a pattern of discrimination on the basis of race, the Justice Department announced.
The settlement was filed today in conjunction with the department’s complaint in federal court in Mobile, Ala. The complaint alleges that the bank charged African-American borrowers higher rates than similarly-situated white borrowers on home mortgage-related loans. The complaint also alleges that the bank has unlawfully failed to provide its lending products and services on an equal basis to majority African-American areas in west central Alabama, a practice known as redlining. The lawsuit is brought under the federal Fair Housing Act and the Equal Credit Opportunity Act.
Under the agreement, which remains subject to court approval, First United Security Bank is prohibited from discriminating on the basis of race or color in any aspect of a residential real estate-related or credit transaction.
“Every person deserves the comfort of knowing they will not be subjected to discrimination because of their race when they borrow money to buy a home or another major purchase. A lending institution must treat all potential borrowers equally, regardless of their race or the racial composition of their neighborhood, when deciding to offer its loan services and in determining the rates charged on its loans,” said Loretta King, Acting Assistant Attorney General for the Civil Rights Division. “We commend First United Security Bank on working cooperatively with the department on today’s settlement, which will ensure fair treatment of African-American borrowers and neighborhoods.”
“For families and small businesses in the Southern District of Alabama, having access to credit on terms available to the general public is vital to confront everyday challenges, let alone those made more acute in this economic environment. This office will respond robustly to protect a person’s access to fair credit,” said Acting U.S. Attorney Eugene Seidel for the Southern District of Alabama.
Under the settlement, First United Security Bank will open one new branch and expand existing operations in majority African-American areas of west central Alabama. The bank will also invest $500,000 in a special financing program, and spend more than $110,000 for outreach to potential customers, promotion of its products and services and consumer financial education in these areas.
The lawsuit originated from a referral from the Federal Deposit Insurance Corporation (FDIC), the bank's regulator, regarding the pricing discrimination issue. First United Security Bank cooperated fully with the department’s investigation into its lending practices and agreed to settle this matter without contested litigation. A copy of the complaint against First United Security Bank and the Agreed Order for Resolution between the United States and the Bank, as well as additional information about fair lending enforcement by the Justice Department, can be obtained from the Justice Department Web site at http://www.usdoj.gov/fairhousing.
Justice Department Files Lawsuit Challenging Conditions at Two Erie County, New York, Correctional FacilitiesRead the Press Release
WASHINGTON – The United States has filed a lawsuit alleging that conditions at the Erie County Holding Center, a pre-trial detention center in Buffalo, N.Y., and the Erie County Correctional Facility, a correctional facility in Alden, N.Y, routinely and systematically deprive inmates of constitutional rights, the Justice Department announced. The lawsuit was filed in the U.S. District Court for the Western District of New York.
The lawsuit follows a nearly two year investigation, the findings of which were detailed in a letter sent to Erie County Executive Chris Collins on July 15, 2009. That letter documented evidence of numerous constitutional violations, including staff-on-inmate violence; inmate-on-inmate violence; sexual misconduct between staff and inmates; sexual misconduct among inmates; an inadequate system to prevent suicide and self-injurious behavior; inadequate medical and mental health care; and serious deficiencies in environmental health and safety.
The department’s investigation revealed evidence of a number of serious violations of constitutional rights at the jail. For example, Erie County fails to protect inmates against known suicide risks and to provide constitutionally required mental health care. Since 2003, nine inmates have committed suicide, and at least 15 inmates have attempted to commit suicide or have taken steps that demonstrated suicidal ideation. Between 2007 and 2008, there were three suicides and at least 10 attempted suicides.
“Jails must provide for the basic medical and mental health needs of inmates and must keep them safe from attacks by other inmates and excessive force by staff. We have repeatedly sought the county’s cooperation in working toward an amicable resolution in this matter, and we regret that the county’s failure to cooperate compels us to litigate,” said Loretta King, Acting Assistant Attorney General for the Justice Department’s Civil Rights Division. “In light of the severity of the conditions, including multiple suicides and beatings, we must take action to ensure that the constitutional rights of those persons detained at the facilities, many of whom have not been convicted of any crime, are protected.”
Kathleen M. Mehltretter, U.S. Attorney for the Western District of New York, stated, “Our purpose in bringing this action is to ensure that the facilities consistently maintain policies, procedures and practices that protect the well being and health of the inmates. Due to the county's lack of cooperation, we must seek court intervention to resolve these issues.”
The Civil Rights Division is authorized to conduct such investigations under the Civil Rights of Institutionalized Persons Act of 1980 (CRIPA). This statute allows the federal government to identify and root out systemic abuses such as those discovered in Erie County. Under CRIPA, the Justice Department has investigated the conditions at nursing homes, mental health facilities, residences for persons with developmental disabilities, and juvenile justice facilities, as well as similar institutions.
The United States’ findings letter to Erie County Executive Chris Collins is available at http://www.usdoj.gov/crt/split/documents/Erie_findlet_redact_07-15-09.pdf. Additional information about the Special Litigation Section of the Justice Department’s Civil Rights Division can be found at www.usdoj.gov/crt/split/index.html.
Justice Department Files Lawsuit Alleging Auto Lending Discrimination in Los AngelesRead the Press Release
WASHINGTON – The United States has filed a lawsuit alleging that a bank and two automobile dealerships in Los Angeles violated the Equal Credit Opportunity Act by charging non-Asian-American customers higher interest rate mark-ups for a period of at least two years, the Justice Department announced today. Nara Bank, one of the three defendants, has agreed to pay up to $410,000 to resolve the allegations against it.
The department’s complaint, filed in federal court in Los Angeles, alleges that Nara Bank and two dealerships, Union Mitsubishi and Han Kook Enterprises, charged higher dealer overages (aka interest rate markups) on car loan interest rates to non-Asian-American customers, many of whom were Latino, than to similarly-situated Asian-American customers. In the auto industry, it is common practice for banks and other lenders to set a base interest rate or “buy rate” and then for the auto dealership to “mark up” the interest rate to the final rate on the loan for the car. The complaints allege that the defendants charged non-Asian-American customers higher interest rate mark-ups than similarly situated Asian-American customers from at least 2004-2006.
The settlement between the Justice Department and Nara Bank is in the form of a partial consent decree filed in conjunction with the complaint. Under the agreement, which remains subject to court approval, Nara Bank is prohibited from discriminating on the basis of race or national origin in any aspect of its automobile lending. The case against Union Mitsubishi and Han Kook Enterprises has not been resolved.
“Every individual deserves the comfort of knowing they can pursue credit without fear of discrimination based on their race or national individual. Our nation’s civil rights laws were created to combat this kind of discrimination,” said Loretta King, Acting Assistant Attorney General for the Civil Rights Division. “The Civil Rights Division vigorously enforces federal laws that prevent discrimination in credit and lending services. We commend Nara Bank for working cooperatively with the Justice Department in reaching an appropriate resolution.”
Nara Bank is not currently in, and has no plans to re-enter, the business of automobile lending. Under the partial consent decree, Nara Bank will pay up to $410,000 to non-Asian-American customers who were charged higher overages or markups than similarly-situated Asian-American customers and will continue to invest at least $100,000 per year in consumer financial education efforts. If Nara re-enters the business of consumer automobile lending, it will implement clear guidelines for dealer overages; monitor dealerships within its automobile lending network to ensure that all customers are treated equally in the terms of automobile loans; and enhance its existing fair lending training program.
This case resulted from a referral by the Federal Reserve Board. A copy of the complaint against Nara Bank, Union Mitsubishi and Han Kook Enterprises and the consent order between the United States and Nara Bank, as well as additional information about fair lending enforcement by the Justice Department, can be obtained from the Justice Department Web site at http://www.usdoj.gov/fairhousing.
Justice Department Files Fair Housing Lawsuit Against Columbus, IndianaRead the Press Release
WASHINGTON – The United States has filed a lawsuit against the city of Columbus, Ind., for violating the Fair Housing Act by refusing to grant a nonprofit organization a permit to operate a group home for 11 men recovering from drug and alcohol addiction, the Justice Department announced today. The lawsuit, filed in the U.S. District Court for the Southern District of Indiana, charges that the Columbus Board of Zoning Appeals refused a permit because of discriminatory attitudes toward recovering addicts among neighboring property owners.
“The Fair Housing Act guarantees individuals with disabilities the right to live in communities of their choice. We will continue to enforce the law vigorously to ensure the rights of persons with disabilities are protected,” said Loretta King, Acting Assistant Attorney General for the Justice Department's Civil Rights Division.
“We must make sure that local zoning actions further fair housing and don’t impede it,” said John Trasviña, HUD Assistant Secretary for Fair Housing and Equal Opportunity. “Individuals struggling to put their lives together shouldn’t have that effort derailed by unlawful discrimination.”
This lawsuit arose as a result of complaints filed with the U.S. Department of Housing and Urban Development (HUD) by Addiction Counseling Treatment Services, the agency that wanted to establish the group home, to be called Bethesda House. HUD referred the cases to the Justice Department after conducting an investigation.
The suit seeks a court order prohibiting future discrimination by the city and requiring the city to grant the requested permit, revise its procedures to assure fair treatment for future housing projects for people with disabilities, pay monetary damages to compensate victims and pay a civil penalty.
The federal Fair Housing Act prohibits discrimination in housing based on race, color, religion, national origin, sex, disability and familial status. More information about the Civil Rights Division and the laws it enforces is available at http://www.usdoj.gov/crt. Individuals who believe that they may have been victims of housing discrimination can call the Housing Discrimination Tip Line (1-800-896-7743), email the Justice Department at [email protected], or contact the U.S. Department of Housing and Urban Development at 1-800-669-9777.
The complaint is an allegation of unlawful conduct. The allegations must still be proven in federal court.
Former U.S. Army Reserve Major Sentenced to 70 Months in Prison for Conspiracy and Bribery ChargesRead the Press Release
WASHINGTON – A former U.S. Army Reserve Major was sentenced to serve 70 months in prison and to pay $825,000 in restitution to the United States after pleading guilty to conspiracy and bribery charges involving U.S. Department of Defense (DOD) contracts at Camp Victory, Iraq, the Department of Justice announced today.
Theresa Jeanne Baker pleaded guilty to the charges on Dec. 22, 2008. According to the charging document, Baker participated in two separate conspiracies. In the first conspiracy Baker received money and other items from Elie Samir Chidiac and Raman International Inc., which does business as Raman Corporation. In return, Baker conveyed sensitive information and fraudulently awarded military contracts to Raman. Upon performance of these contracts, Chidiac received payment from the DOD on Raman’s behalf and kicked back a portion of that profit to Baker. In the second conspiracy, Baker canceled military contracts for various telecommunications items that were awarded to third party contractors and fraudulently re-awarded them to Chidiac. Baker then authorized Chidiac to receive cash payments for those contracts, despite the fact that Chidiac neither delivered any goods nor performed any services. In return, Chidiac gave a portion of the money back to Baker.
Chidiac was charged with two counts of conspiracy to commit bribery in an indictment unsealed on Jan. 28, 2008, in U.S. District Court for the Western District of Oklahoma. Raman was charged in the same indictment with one count of conspiracy to commit bribery. Raman pleaded guilty to the charges on June 3, 2008, and was sentenced to pay a $500,000 criminal fine on Jan. 30, 2009. Charges remain pending against Chidiac, who is currently a fugitive.
Today’s proceedings are an example of the Department of Justice’s commitment to protect U.S. taxpayers from procurement fraud through the National Procurement Fraud Task Force. The National Procurement Fraud Initiative, announced in October 2006, is designed to promote the early detection, prevention and prosecution of procurement fraud associated with the increase in contracting activity for national security and other government programs.
The ongoing investigation is being conducted by the Antitrust Division’s National Criminal Enforcement Section (NCES), along with Special Agents from the Defense Criminal Investigative Service (DCIS), Tulsa Resident Agency and the U.S. Army Criminal Investigation Division (Army CID), Dallas Resident Agency. The Criminal Division’s Office of International Affairs and agents from the U.S. Immigrations and Customs Enforcement and the U.S. Postal Inspection Service are providing additional assistance to the investigation. Anyone with information concerning bid rigging, bribery or other criminal conduct in the procurement of goods or services in Iraq is urged to contact the NCES at 202-307-6694; DCIS at 800-424-9098 or [email protected]; or Army CID atwww.cid.army.mil.
Florida Man Indicted in Alleged Fraudulent Lobbying and Fund Raising SchemeRead the Press Release
WASHINGTON – A Florida doctor was charged today by a federal grand jury in Ft. Lauderdale, Fla., with allegedly orchestrating a fraudulent political fund raising and lobbying scheme through which he secretly diverted to himself more than $350,000 from contributions to political organizations he controlled, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division. Alan D. Mendelsohn, 51, of Hollywood, Fla., is also charged with fraudulently concealing an additional $274,000 in payments he allegedly directed his lobbying clients to make to third parties on his behalf, including tuition payments to his children’s schools, in an effort to circumvent lobbying disclosure rules and other reporting requirements.
The 32-count indictment charges Mendelsohn with mail and wire fraud, aiding and abetting mail and wire fraud, and making false statements to federal agents. Mendelsohn will make his initial appearance today at 11 a.m. before U.S. Magistrate Judge Lurana Snow in Ft. Lauderdale.
According to the indictment, beginning in approximately 1999, Mendelsohn, a practicing physician, was involved in lobbying members of the Florida legislature and other state officials for legislation and budget expenditures of importance mainly to ophthalmologists. The indictment alleges that in approximately late 2002, Mendelsohn was asked by various lobbyists and businesspeople if he would use his political connections to assist their clients in obtaining and defeating legislation and in obtaining other favorable government action. According to the indictment, beginning in approximately 2002, Mendelsohn allegedly created a series of political organizations and corporations for the purpose of soliciting and then transferring contributions between the entities in ways that would be difficult to trace.
Beginning in approximately 2002, through a pattern of false representations and promises, Mendelsohn allegedly solicited and received more than $2 million in donations to the political organizations he controlled from persons for whom he agreed to provide lobbying and other services. According to the indictment, Mendelsohn allegedly represented to the contributors that their funds would be used for media and other campaigns on political issues of importance to them and to support political candidates. In fact, the indictment alleges that Mendelsohn secretly diverted more than $350,000 in contributed funds to his personal use and benefit through payments made in ways that were misrepresented or concealed entirely in required public disclosure reports for the political organizations. The indictment alleges that Mendelsohn used the diverted funds, in part, to purchase a residence and a car, to pay for tutors and tuition for his children, to pay his personal credit card bills, and to pay bonuses to an employee of his medical practice.
The indictment also alleges that Mendelsohn falsely represented to a contributor that he secured bribery agreements with senior government officials. During 2003 and 2004, the indictment alleges that Mendelsohn falsely represented to the contributor that he had brokered an agreement with senior government officials to close an ongoing criminal investigation by state officials in Florida of the contributor and others in exchange for campaign donations and other payments totaling more than $1 million. The indictment also alleges that in subsequent conversations in 2007, Mendelsohn falsely told the contributor that senior government officials had agreed to exert pressure on federal prosecutors investigating the contributor to close the investigation in exchange for $400,000 in contributions. As a result of Mendelsohn’s false representations, the contributor caused more than $1 million in payments to be made, as directed by Mendelsohn. The indictment states that, in fact, no such unlawful agreements to close any investigations had been made with any public officials.
The indictment alleges that in order to increase his power and influence as a lobbyist so that he could obtain more contributions and consequently more funds for himself, Mendelsohn made approximately $87,000 in payments to a now-former public official. These payments, which were made from the political organizations Mendelsohn controlled, were disguised as payments for consulting services rendered by an intermediary to whom the checks were written. In addition, the indictment alleges that Mendelsohn undertook or directed others to undertake actions to conceal the true source of certain campaign contributions. The indictment also alleges that Mendelsohn caused income and expense amounts to be falsely characterized or omitted in the books and records of political organizations and corporations he controlled and from public disclosure reports that required the accurate reporting of income and expenditures.
Mendelsohn also allegedly made several material false statements to federal agents investigating these allegations beginning in late May 2007. For example, according to the indictment, Mendelsohn falsely denied that he had represented to one of the contributors that he had secured an agreement with senior government officials to terminate the state investigation involving the contributor. Mendelsohn also falsely claimed that he did not receive any personal benefit from using his political connections. In addition, the indictment alleges he falsely denied that he ever received any financial benefit from the political organizations for which he solicited contributions and controlled.
An indictment is merely an accusation. All defendants are innocent until proven guilty.
The charges of mail and wire fraud each carry a maximum penalty of 20 years in prison and a $250,000 fine. The charges of false statements each carry a maximum penalty of five years in prison and a $250,000 fine.
This case is being prosecuted by Senior Trial Attorney Mary K. Butler and Trial Attorneys Justin V. Shur and Eric G. Olshan of the Criminal Division’s Public Integrity Section, headed by William M. Welch, II, Chief. This case is being investigated by the FBI’s Miami Field Office.
Indictment
Five Detroit Residents Plead Guilty to Health Care Fraud ChargesRead the Press Release
WASHINGTON – Detroit residents Dierdre Teagen, Robert Wynn, Ernest Neal, James Harris and Steve Sherman pleaded guilty in U.S. District Court in Detroit this week for their roles in various Medicare fraud schemes, announced Assistant Attorney General of the Criminal Division Lanny A. Breuer, U.S. Attorney for the Eastern District of Michigan Terrence Berg and Daniel R. Levinson, Inspector General of the Department of Health & Human Services (HHS).
Dierdre Teagan, 51, today pleaded guilty to destroying the patient records of X-Press Center, a Detroit-area clinic that purported to specialize in providing injection and infusion services to Medicare beneficiaries. Teagan admitted that she destroyed the records upon learning that the government was investigating X-Press for Medicare fraud. Teagan also admitted that she worked as a medical assistant at X-Press while the clinic was purporting to provide injection and infusion services, and she assisted in creating new patient records for the clinic that would purportedly support the clinic’s prior Medicare claims. Teagan acknowledged that she falsified and destroyed the patient records with the intent to impede, obstruct and influence a Medicare investigation.
Robert Wynn, 61, and Ernest Neal, 54, pleaded guilty on Sept. 28, 2009, to one count of conspiracy to commit health care fraud. James Harris, 53, pleaded guilty on Sept. 29, 2009, to one count of conspiracy to commit health care fraud, and Steve Sherman, 62, pleaded guilty today to one count of conspiracy to commit health care fraud.
Wynn, Neal, Harris and Sherman admitted to defrauding the Medicare program by participating in schemes to bill the program for services that were never provided. Specifically, Wynn, Neal, Harris and Sherman acknowledged that they provided their Medicare numbers and identifications to clinic owners and patient recruiters in exchange for kickbacks, for the purpose of submitting false claims to Medicare. Each admitted that they signed false paperwork indicating that they had received services when none of them received any services. Each acknowledged that their signatures were used to create fictitious therapy files to justify billings to Medicare.
Wynn, Neal, Harris and Sherman admitted that in exchange for their signatures and Medicare cards, they were paid kickbacks in the form of cash or prescriptions for controlled substances. Collectively, Medicare was billed more than $200,000 between 2003 and 2007 for services purportedly provided to these four defendants, when in fact, no such services were provided.
At sentencing, which is scheduled for Jan. 28, 2010, Teagan faces a statutory maximum term of 20 years in prison and a $250,000 fine.
Wynn, Neal, Sherman and Harris each face statutory maximum terms of 10 years in prison and a $250,000 fine. Wynn is scheduled for sentencing on Feb. 10, 2010. Neal’s sentencing hearing is scheduled for Dec. 16, 2009, and Harris and Sherman are scheduled for sentencing on Jan. 13, 2010.
The cases are being prosecuted by Trial Attorneys John K. Neal, Benjamin D. Singer and Gejaa Gobena 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 Deputy Chief Kirk Ogrosky of the Criminal Division’s Fraud Section and U.S. Attorney Terrence Berg of the Eastern District of Michigan. Since their inception in March 2007, Strike Force operations in four districts have resulted in indictments of 300 individuals who collectively have falsely billed the Medicare program for more than $680 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
AGCO Corp. to Pay $1.6 Million in Connection with Payments to the Former Iraqi Government Under the U.N. Oil-For-Food ProgramRead the Press Release
WASHINGTON – AGCO Corp., a U.S. corporation based in Duluth, Ga., has agreed to pay a $1.6 million penalty for illegal kickbacks paid to the former government of Iraq, Assistant Attorney General of the Criminal Division Lanny A. Breuer announced today.
AGCO agreed to the payment as part of a deferred prosecution agreement with the Department of Justice. The matter is part of the Department’s ongoing investigation into the United Nations (U.N.) Oil-for-Food Program.
A criminal information was filed today against AGCO’s wholly owned U.K. subsidiary, AGCO Ltd., in U.S. District Court for the District of Columbia, charging AGCO Ltd. with one count of conspiracy to commit wire fraud and to violate the books and records provisions of the Foreign Corrupt Practices Act. AGCO, an international manufacturer of agricultural machinery and equipment, has acknowledged responsibility for improper payments made by its subsidiaries’ officers, employees and agents to the former government of Iraq in order to obtain contracts with the Iraqi Ministry of Agriculture to sell agricultural equipment and parts. The deferred prosecution agreement requires that AGCO and its subsidiaries, including AGCO Ltd., cooperate fully with the Justice Department’s ongoing investigation.
According to the agreement and the information, between 2000 and 2003, AGCO Ltd. paid approximately $553,000 to the former government of Iraq to secure three contracts by inflating the price of the contracts by 13 to 21 percent before submitting the contracts to the U.N. for approval. The company concealed from the U.N. that the price of the contracts had been inflated and then used the additional funds to pay a kickback to the former Iraqi Ministry of Agriculture.
In recognition of AGCO’s thorough review of the improper payments and the company’s implementation of enhanced compliance policies and procedures, the Justice Department has agreed to defer prosecution of AGCO Ltd. for three years. If AGCO and AGCO Ltd. abide by the terms of the agreement for the three-year term, the Justice Department will dismiss the criminal information at that time.
The Oil-for-Food Program was established by the U.N. to enable Iraq to sell its oil for humanitarian purposes in the context of an extensive international sanctions regime. The program mandated that the proceeds of oil sales be deposited in a U.N. bank account and that those proceeds be used by the Iraqi government only to purchase humanitarian goods and services approved by the U.N., such as food, medicine, and other necessary infrastructure items. Beginning in 2000, the former government of Iraq began requiring companies wishing to sell humanitarian goods to government ministries to pay a kickback, often mischaracterized as an “after sales services fee,” to the government in order to be granted a contract. The amount of that fee was usually 10 percent of the contract price. Such payments were not permitted under the Oil-for-Food Program or other sanction regimes then in place.
In a related matter, AGCO reached a settlement today with the U.S. Securities and Exchange Commission (SEC) under which it has agreed to pay a civil penalty of $2.4 million and approximately $16 million in disgorgement and prejudgment interest relating to 16 Oil-for-Food contracts.
Also today, AGCO agreed to a disposition resolving an ongoing investigation by the Danish State Prosecutor for Serious Economic Crime. The charges were based on two Oil-for-Food contracts executed by AGCO’s Danish subsidiary, AGCO Danmark A/S. AGCO agreed to pay approximately $630,000 in disgorgement of profits in connection with those charges.
AGCO will pay a combined total of more than $20 million in fines, penalties, and disgorgement of profits in connection with the cases brought by the Department of Justice, the SEC and the Danish State Prosecutor’s Office.
This case is being prosecuted by Fraud Section Senior Trial Attorney Stacey Luck.
The Justice Department acknowledges and expresses its appreciation of the significant, ongoing assistance provided by the Enforcement Division of the SEC in the Department’s Oil- for-Food investigations and the Danish State Prosecutor’s Office for Serious Economic Crime.
AGCO Information
AGCO Plea Agreement
Justice Department Settles Lawsuit Alleging Retaliation by Franklin County, North CarolinaRead the Press Release
WASHINGTON – The Justice Department today announced that it has reached a consent decree with Franklin County, N.C., that, if approved in federal court in Raleigh, N.C., will resolve the department’s allegation that the county retaliated against a former employee in its Department of Public Utilities, in violation of Title VII of the Civil Rights Act of 1964. Title VII prohibits employment discrimination on the basis of race, color, national origin, sex and religion; Title VII also prohibits retaliation against employees for opposing employment practices that they reasonably believe are discriminatory under Title VII or for filing a complaint of employment discrimination.
The department’s complaint, which was filed on Sep. 25, 2009, alleges that the county retaliated against Karen Dorrans because she complained about what she believed to be sexual harassment by a co-worker, and because she did not confront the alleged harasser about his conduct after the county instructed her to do so. According to the complaint, the county disciplined Dorrans by extending her probationary period of employment by six months, denying her a salary increase, issuing her a disciplinary “final warning” and significantly lowering her quarterly job performance ratings. The department’s complaint does not allege that Dorrans, in fact, was subjected to sexual harassment in violation of Title VII; but, rather, that the county’s retaliatory response to her harassment complaint violated Title VII.
The consent decree prohibits the county from engaging in any act or practice that retaliates against any county employee. The consent decree also requires the county to implement and disseminate a policy that prohibits retaliation and to provide mandatory training regarding the law of equal employment opportunity and prohibited harassment and retaliation to all supervisory employees. The decree further requires the county to provide Dorrans with $17,500 in compensatory monetary relief.
Prior to filing its complaint, the Justice Department was engaged in discussions with the county. Those discussions led to the filing of the consent decree only four days after the complaint was filed.
“All workers deserve the basic right of going to a workplace each day that is free of discrimination and retaliation. We are pleased that the county will promptly implement new policies and procedures that comply with Title VII,” said Acting Assistant Attorney General Loretta King. “The Department of Justice will continue to vigorously enforce the right of all employees to be free of retaliation in the workplace.”
The enforcement of Title VII is a priority of the Justice Department’s Civil Rights Division. Additional information about the Civil Rights Division is available on its Web sites at http://www.usdoj.gov/crt/ and http://www.usdoj.gov/crt/emp/.
Justice Department Settlement Will Ensure Accessibility of Donna's Restaurant in BaltimoreRead the Press Release
WASHINGTON - The Justice Department today announced a settlement agreement under the Americans with Disabilities Act (ADA) to make Donna’s, a café and restaurant located in the Mt. Vernon neighborhood of Baltimore accessible to people with disabilities.
The settlement is between the Justice Department and the Palamino Corporation, which owns Donna’s, and the 800 North Charles Street Limited Partnership LLLP, which owns the building in which the restaurant is located. Under the agreement, an inclined platform lift will be installed on the stairs between the first floor lobby and the street level inside the North Charles Street entry. This lift will provide access to Donna’s and another restaurant located on the first floor. In addition, the restrooms, entrance signage and certain elements within the restaurant will be modified to comply with the ADA Standards for Accessible Design.
“The Civil Rights Division of the Justice Department is committed to the full and fair enforcement of the Americans with Disabilities Act,” said Loretta King, Acting Assistant Attorney General for the Civil Rights Division. “We all want to be able to go out for a cup of coffee or a meal, all Americans should have access to civic life. Removing architectural barriers is critical so that people with disabilities can enjoy access to restaurants and businesses and be fully integrated in their communities.”
The ADA protects individuals with disabilities from discrimination by public accommodations, such as restaurants, and requires that such entities remove architectural barriers to make their businesses accessible to persons with disabilities. People interested in finding out more about the ADA or this agreement 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 www.ada.gov.
Indiana and Alabama Hospitals to Pay U.S. over $8 Million to Settle False Claims Act AllegationsRead the Press Release
WASHINGTON – Six hospitals in Indiana and Alabama have agreed to pay the United States more than $8 million to settle allegations that the health care facilities submitted false claims to Medicare, the Department of Justice announced today.
The Indiana hospitals include St. Francis Hospital in Beech Grove, Deaconess Hospital in Evansville and St. John’s Hospital System in Anderson. The hospitals have agreed to pay the United States $3,158,629, $2,110,034 and $826,256, respectively.
The Alabama hospitals include St. Vincent’s East Hospital and St. Vincent’s Birmingham Hospital, both located in Birmingham, and Providence Hospital, located in Mobile. These facilities have agreed to pay the United States $1,459,395, $422,748 and $381,713, respectively.
The settlements resolve allegations that, from 2002 to 2008, the six hospitals overcharged Medicare each time they performed kyphoplasty, a minimally-invasive procedure used to treat certain spinal fractures that often are due to osteoporosis. In many cases, the procedure can be performed safely as an out-patient surgery, but the government contends that the hospitals performed the procedure on an in-patient basis in order to increase their Medicare billings.
“The Department of Justice is committed to preventing waste, fraud, and abuse in the Medicare program and ensuring that Medicare funds are not expended for unnecessary services,” said Tony West, Assistant Attorney General for the Department’s Civil Division.
“Hospitals that overcharge Medicare drain critical funds from the Medicare program and increase health care costs,” said Daniel R. Levinson, Inspector General for the U.S. Department of Health and Human Services. “This settlement demonstrates the Federal government’s resolve to address this kind of fraudulent conduct.”
The settlements with these Indiana and Alabama facilities follow the government’s June 2009 settlement with three Minnesota hospitals for alleged kyphoplasty-related Medicare fraud claims, as well as the government’s May 2008 settlement with Medtronic Spine LLC, corporate successor to Kyphon Inc. Medtronic Spine paid $75 million to settle allegations that the company defrauded Medicare by counseling hospital providers to perform kyphoplasty procedures as an in-patient procedure, even though in many cases the minimally-invasive procedure should have been done on an out-patient basis.
“By keeping patients overnight, without regard to medical necessity, hospitals could seek greater reimbursement from Medicare and make much larger profits on kyphoplasty,” said Kathy Mehltretter, U.S. Attorney for the Western District of New York in Buffalo.
This lawsuit was filed in 2008 in federal district court in Buffalo, N.Y., by Craig Patrick and Charles Bates under the qui tam or whistleblower provisions of the False Claim Act. Under those provisions, a private party, known as “relator,” can file an action on behalf of the United States and receive a portion of any recovery. Mr. Patrick, of Hudson, Wis., is a former reimbursement manager for Kyphon, and Mr. Bates is a former regional sales manager for Kyphon in Birmingham, Ala. The relators will receive approximately $1.4 million as their share of the settlement proceeds.
Assistant Attorney General West acknowledged that these settlement are the result of a coordinated effort between the Commercial Litigation Branch of the Justice Department’s Civil Division, the U.S. Attorney’s Office for the Western District of New York, and the Department of Health and Human Services’ Office of Inspector General and Office of Counsel to the Inspector General.
Hampton Roads Sanitation District, Virginia, Agrees to Settle Clean Water Act Violations in Chesapeake Bay AreaRead the Press Release
WASHINGTON—Hampton Roads Sanitation District (HRSD), based in Virginia Beach, Va., has agreed to pay a $900,000 civil penalty and to take corrective actions to reduce alleged sanitary sewer overflows from its collection system and nine sewage treatment plants that have polluted the Chesapeake Bay and its tributaries, the Justice Department, U.S. Environmental Protection Agency (EPA), and the Commonwealth of Virginia announced today.
Under a settlement filed today in federal court in Norfolk, Va., HRSD is required to collect data, conduct computer modeling, and, working with the municipalities that it serves, develop a regional plan to ensure that the HRSD sewer system has adequate capacity to handle flows from severe storms and to prevent overflows of sewage. Subsequently, HRSD must implement the regional plan. Since HRSD has not identified the projects pending completion of the plan, the cost of that effort is currently unknown although it is expected to cost millions of dollars.
The settlement also requires HRSD to make major upgrades and improvements to the sewer system infrastructure over the next eight years. These upgrades are estimated to cost at least $140 million. The settlement requires that HRSD evaluate, replace, rehabilitate, or upgrade pipes, pump stations and other infrastructure where inspections and screenings show a material risk of failure. HRSD also must submit and implement a plan to effectively manage, operate and maintain the sanitary sewer system to help prevent future sanitary sewer overflows.
“We’re pleased that the sanitation district has agreed to take these extensive steps to upgrade and improve the sewer systems for Hampton Roads and the surrounding region,” said John C. Cruden, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. “The federal Clean Water Act requires cities to eliminate or reduce their sewage overflows into the nation’s rivers, lakes and oceans. Today’s agreement and the future regional plan will result in a cleaner, safer Chesapeake Bay.”
“Today's settlement represents EPA’s continuing commitment to protect and restore the health of the Chesapeake Bay,” said Cynthia Giles, Assistant Administrator of EPA’s Office of Compliance and Assurance. “EPA’s compliance and enforcement strategy targets sewage treatment plants, concentrated animal feeding operations, storm water runoff and other sources that may contribute significant pollution to the bay.”
“After extensive work on this case at the state and federal levels, we believe we have reached an agreement that represents a fair and comprehensive approach to corrective action,” said David K. Paylor, director of the Virginia Department of Environmental Quality. “This should result in significant reductions of pollutants discharged to Virginia waters.”
In a joint complaint filed by the United States and Virginia, the governments alleged that HRSD illegally discharged nine million gallons of untreated sewage and other wastes from its sewer system and sewage treatment plants into various bodies of water including the Atlantic Ocean and Chesapeake Bay. These discharges allegedly occurred on at least 249 occasions since 2003 and were not authorized under existing wastewater discharge permits. In addition, HRSD allegedly caused or contributed to at least 118 municipal overflows of sewage and other pollutants that occurred from the sewer systems of the municipalities during times when flows into the HRSD sewer system exceeded its capacity and the sewage and other wastes backed up and overflowed from manholes and other locations in the municipalities. The municipalities did not report the volume for most of the 118 violations but it is believed to be substantial.
HRSD treats wastewater for 17 counties and cities in Virginia and serves 1.6 million people. HRSD has the capacity to treat up to 231 million gallons of wastewater per day and includes 13 sewage treatment plants, 81 pumping stations, and over 500 miles of pipes.
Sanitary sewer overflows typically contain harmful pollutants, such as excess amounts of nutrients, microbial pathogens that can lead to disease outbreaks, and toxics. The sanitary sewer overflows around HRSD’s service area may potentially endanger ecologically sensitive areas including unique tidal wetlands, wildlife refuges and nurseries in the Chesapeake Bay. The measures HRSD will take to eliminate sanitary sewer overflows will result in a significant reduction of nitrogen, phosphorous and sediment entering the Chesapeake Bay.
EPA in partnership with the bay states is focusing efforts on protecting and restoring the health of the Chesapeake Bay. The enforcement and compliance strategy targets pollution sources that may significantly contribute nitrogen, phosphorus and sediment to impaired watersheds in the bay. These pollutants come from many sources, including sewage treatment plants, urban storm water runoff, septic systems, agricultural operations and air deposition.
The consent decree, lodged today in the U.S. District Court for the Eastern District of Virginia, is subject to a 30-day public comment period and approval by the federal court. A copy of the consent decree is available on the Justice Department Web site at http://www.usdoj.gov/enrd/Consent_Decrees.html.
Formosa Plastics Corp., Texas, and Formosa Plastics Corp., Louisiana, will spend more than $10 million on pollution controls to address air, water, and hazardous waste violations at two petrochemical plants in Point Comfort, Texas, and Baton Rouge, La.Read the Press Release
WASHINGTON – Formosa Plastics Corp., Texas, and Formosa Plastics Corp., Louisiana, will spend more than $10 million on pollution controls to address air, water, and hazardous waste violations at two petrochemical plants in Point Comfort, Texas, and Baton Rouge, La., the Justice Department and the Environmental Protection Agency (EPA) announced today.
The companies also have agreed to pay a civil penalty of $2.8 million to resolve violations under the Clean Air Act (CAA), Clean Water Act (CWA), Resource Conservation and Recovery Act (RCRA) and Emergency Planning and Community Right-to-Know Act (EPCRA).
Under the agreement lodged in the U.S. District Court for the Southern District of Texas, both the Texas and Louisiana facilities will implement a comprehensive CAA enhanced leak detection and repair program, which goes beyond regulatory requirements by requiring more stringent leak definitions, more frequent monitoring and monitoring and repair of additional chemical manufacturing equipment. The leak prevention practices agreed to in the settlement include an innovative program to replace valves with new “low leak” valve technology, which will significantly reduce the likelihood of future leaks of air pollutants. The enhanced program also includes requirements for periodic audits of the companies’ leak prevention practices to ensure compliance going forward.
The enhanced leak detection and repair program will potentially reduce the annual volatile organic compound (VOC) air emissions from the two Formosa facilities by approximately 6,570,000 pounds per year of VOCs, including hazardous air pollutants such as vinyl chloride.
According to EPA, VOCs can contribute to respiratory disorders such as asthma and reduced lung capacity. They can also cause damage to ecosystems and reduce visibility.
The Formosa facilities also will undertake an innovative enhanced vinyl chloride leak detection and elimination program designed to improve the companies’ systems for identifying and addressing leaks of vinyl chloride.Most vinyl chloride is used to make polyvinyl chloride (PVC) plastic and vinyl products. Vinyl chloride is an odorless gas; it is an ozone precursor and known carcinogen that is also linked to neurological disorders.
In addition, the settlement requires both facilities to undertake analyses to prevent future wastewater discharge violations. The Formosa Texas facility will undertake a comprehensive review of its compliance with EPCRA’s toxic release reporting requirements, and the Formosa Louisiana facility will cease improper disposal of certain listed hazardous wastes.
This will be the eighth settlement in a series of cases developed as part of EPA’s enforcement effort to ensure environmental compliance in the PVC manufacturing industry. Since the first PVC civil case was concluded in 2004, EPA has addressed noncompliance across media (air, water, waste) at 13 PVC manufacturing facilities, and will reduce vinyl chloride emissions by a total of 152,000 pounds per year.
“Today’s settlement requires Formosa to institute a comprehensive enhanced leak detection program designed to address serious violations of environmental regulations,” said John C. Cruden, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. “We are pleased that Formosa worked cooperatively with DOJ and EPA to address the violations at issue and agreed to institute innovative programs that will result in significant pollution reductions.”
“This case shows that when a company fails to control leaks of hazardous pollutants, EPA will vigorously enforce the law,” said EPA Acting Regional Administrator Lawrence E. Starfield. “Pollution controls put in place as a result of this more than $10 million settlement will benefit the people living nearby.”
The case was initiated as a result of inspections conducted by EPA’s National Enforcement Investigations Center at Formosa’s Point Comfort and Baton Rouge facilities. During the inspections, EPA identified extensive Clean Air Act leak detection and repair violations, including failing to properly monitor leaking components, failing to include chemical manufacturing equipment in its leak detection and repair program, and failing to timely repair leaking equipment. Inspectors also identified a variety of hazardous waste violations at both facilities.
In addition, the inspectors found that Formosa had violated wastewater discharge limits under its CWA permits, and, at the Texas facility, had failed to comply with the CAA benzene waste operations requirements and to submit correct toxic release reporting information to EPA.
The consent decree is subject to a 30-day comment period and final approval by the court. A copy of the consent decree is available on the Justice Department Web site at http://www.usdoj.gov/enrd/Consent_Decrees.html.
Justice Department Sues to Block Alleged $23 Million Dollar Tax Fraud Scheme Operating in the Los Angeles AreaRead the Press Release
WASHINGTON - The United States has sued Nyla McIntyre and her firm, Approved Financial Services Inc., seeking to bar them from preparing federal tax returns for others, the Justice Department announced today. According to the complaint filed in the case, McIntyre prepares federal income tax returns for customers claiming massive fraudulent tax refunds. The complaint alleges that one of McIntyre’s fraudulent refund requests—for a La Quinta, Calif., couple—exceeded $2.6 million.
The complaint alleges that McIntyre prepares bogus IRS Forms – including Forms 1099-OID, 1096, and Schedule B – to report bogus income tax withholding, and then requests fraudulent refunds based on the fake withholding. The complaint says that McIntyre’s scheme is part of a growing trend of filing frivolous federal tax returns and forms to steal from the U.S. Treasury.
The complaint also explains that while the Internal Revenue Service catches most frivolous refund requests before the refunds are issued, McIntyre’s scheme has actually caused the release of $1.6 million in fraudulent refunds. In 2008 and 2009, McIntyre has claimed approximately $23 million in fraudulent refunds, according to the Government.
On Sept. 9, 2009, a Sacramento court found that tax preparer Teresa Marty had been using the same scheme to generate bogus refunds for her customers, and preliminarily barred her from preparing tax returns for others.
“Taxpayers foolish enough to consider participating in the illegal scheme described in this lawsuit should consider that, in addition to risking criminal prosecution, they also risk incurring civil penalties of as much as 20 percent of the amount of their bogus refund claim,” said John A. DiCicco, Acting Assistant Attorney General for the Justice Department’s Tax Division. “For false claims on the scale described in this case, the 20 percent penalty could result in scheme customers losing their savings and their homes.”
In the past decade, the Justice Department’s Tax Division has obtained more than 425 injunctions against tax fraud promoters and dishonest tax return preparers. Information about these cases is available on the Justice Department’s Web site, as is information about the Justice Department’s Tax Division.
Nyla McIntyre Complaint
Justice Department Sues Massachusetts and Its Department of Corrections for Discriminating Against Female Job ApplicantsRead the Press Release
WASHINGTON – The Justice Department announced that it has filed a lawsuit today against the commonwealth of Massachusetts and its Department of Corrections (MDOC), alleging that they engaged in a pattern or practice of discrimination against female applicants for entry-level correctional officer positions, in violation of Title VII of the Civil Rights Act of 1964, as amended. Title VII is a federal statute that prohibits employment discrimination on the basis of race, color, sex, national origin and religion.
The department’s complaint, filed in federal court in Boston, alleges that Massachusetts and the MDOC are using an unlawful physical abilities test (PAT) that disproportionately screens out female applicants for entry-level correctional officer jobs, resulting in a significant disparate impact against female applicants. According to the complaint, in 2007 and 2008, female applicants for the entry-level jobs of correctional officer and correctional program officer passed the PAT at a rate of approximately 58.8 percent, while the corresponding pass rate for male applicants was approximately 96.3 percent. Title VII prohibits not only intentional discrimination in employment, but also the use of employment practices, such as physical performance tests, which result in disparate impact, unless the employer can prove that such practices are “job related for the position in question and consistent with business necessity.” The complaint states that the commonwealth and the MDOC’s use of the PAT is not job related and consistent with business necessity and, therefore, violates Title VII.
“Bringing an end to practices that have a discriminatory impact on the basis of sex is a major priority of the Justice Department and the Civil Rights Division. Physical abilities tests, like the one used by Massachusetts and the MDOC, should measure applicants’ ability to do the job without disproportionately screening out large numbers of qualified female applicants,” said Loretta King, Acting Assistant Attorney General for the Civil Rights Division.
The government’s complaint seeks a court order that would require Massachusetts and the MDOC to stop using the challenged PAT, adopt and use a physical fitness test for correctional officer applicants that complies with Title VII and provide remedial relief (including, as appropriate, job offers, retroactive seniority and back pay) to those female applicants who were harmed by the use of the PAT.
The continued enforcement of Title VII is a high priority of the Justice Department’s Civil Rights Division. Additional information about the Civil Rights Division of the Justice Department is available on its Web site at http://www.usdoj.gov/crt/.
Complaint
Justice Department Announced Public Education Campaign Grants to Fight Immigration-Related Employment DiscriminationRead the Press Release
WASHINGTON – The Justice Department today announced that it has awarded $723,000 in grants to twelve groups serving communities throughout the country, to conduct public education programs for workers and employers about federal protections against immigration-related job discrimination.
The grants, which range from $48,000 to $87,000, are being awarded by the Office of Special Counsel for Immigration-Related Unfair Employment Practices (OSC) of the department’s Civil Rights Division. Recipients will assist discrimination victims; conduct seminars for workers, employers and immigration service providers; distribute educational materials in various languages; and place advertisements in local communities through both mainstream and ethnic media to educate workers and employers about their rights.
OSC enforces the anti-discrimination provision of the Immigration and Nationality Act (INA), which protects U.S. and authorized immigrant workers against citizenship and national origin discrimination. As part of its mission, OSC also educates workers and their employers about the anti-discrimination provision.
“Awarding grants to professional and community-based organizations better enables us to educate workers and employers about their rights and responsibilities under federal immigration law,” said Loretta King, Acting Assistant Attorney General for the Civil Rights Division. “Our grant recipients, who are well known and respected in their communities, will collaborate with us to prevent immigration-related discrimination in the workplace.”
The OSC grant recipients are:
Arizona Attorney General’s Office, Civil Rights Division
Asian Pacific American Legal Center of Southern California
Catholic Charities of Dallas
Catholic Charities, Diocese of St. Petersburg, Fla.
Colorado Legal Services
Legal Aid Foundation of Los Angeles (LAFLA)
National Farm Worker Service Center
National Immigration Law Center (NILC)
New York City Human Rights Commission
Texas RioGrande Legal Aid
University of Iowa
Washington Farm Labor AssociationFor more information about protections against job discrimination under federal immigration law, call 800-255-7688, 202-616-5594, email: [email protected] or visit http://www.usdoj.gov/crt/osc
Former Enron Broadband Co-Chief Executive Officer Sentenced for Wire FraudRead the Press Release
WASHINGTON – Joseph Hirko, former co-chief executive officer of Enron Broadband Services (EBS), Enron’s failed telecommunications business, was sentenced today to 16 months in prison, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division.
In addition to the prison term, U.S. District Court Judge Vanessa Gilmore ordered Hirko, 53, of Portland, Ore., to forfeit approximately $7 million in restitution to victims through the U.S. Securities and Exchange Commission’s Enron Fair Fund, in accordance with the terms of the plea agreement. Hirko pleaded guilty on Oct. 14, 2008, in U.S. District Court in Houston to one count of wire fraud charged in a superseding indictment.
In July 2005, Hirko and four other EBS executives were tried on various charges of conspiracy to commit securities and wire fraud, securities fraud, wire fraud, insider trading and money laundering relating to their employment at Enron. The trial resulted in a mistrial, and Hirko was subsequently charged in a superseding indictment with wire fraud, securities fraud and insider trading. According to the superseding indictment and the plea agreement, Hirko participated in Enron’s annual analyst conference in Houston at which Enron introduced EBS as one of its “core” units. Enron also announced the development of a broadband operating system or “BOS.” According to the plea agreement, the BOS was purported to be an “intelligent” operating system and was described as, among other things, a standard protocol for accessing real-time bandwidth.
As alleged in the superseding indictment, Enron issued a press release on May 15, 2000, announcing the acquisition of Warpspeed Communications. According to Hirko’s guilty plea, the Warpspeed release falsely represented the status of the BOS and implied that it was already embedded and functioning as a part of Enron’s network. Specifically, the Warpspeed release stated that the BOS “allows application developers to dynamically provision bandwidth on demand for the end-to-end quality of service necessary to deliver broadband content.” According to the plea agreement, Hirko reviewed and approved this language even though the Warpspeed release contained material inaccurate representations regarding the BOS’s status. In doing so, Hirko admitted that he acted with reckless indifference to the true facts, including: that the BOS was under development throughout his employment at Enron; that it was never embedded on Enron’s network; and that it could not dynamically provide bandwidth on demand or provide for the end-to-end quality of service necessary to deliver broadband content. According to the plea agreement, Hirko’s approval of the Warpspeed release, as well as other press releases, assisted in maintaining Enron’s overall stock price, thereby improperly maintaining the value of Hirko’s holdings of Enron stock.
This case was prosecuted by Senior Litigation Counsel Jack B. Patrick, Senior Trial Attorney Jonathan E. Lopez and Trial Attorney Liam B. Brennan of the Criminal Division’s Fraud Section.
Charges against the EBS employees were initially brought in March 2003 by the Enron Task Force, a team of federal prosecutors and agents formed to investigate matters related to the collapse of Enron. All remaining Enron Task Force cases are now being handled by the Criminal Division’s Fraud Section, with the investigatory assistance of the FBI.
Detroit-Area Rehabilition Facility Executive Pleads Guilty to $18.2 Million Medicare Fraud SchemeRead the Press Release
WASHINGTON – Suresh Chand pleaded guilty today in U.S. District Court in Detroit to participating in multiple conspiracies to defraud the Medicare program and to launder the proceeds of the fraud, Assistant Attorney General of the Criminal Division Lanny A. Breuer, U.S. Attorney for the Eastern District of Michigan Terrence Berg and Daniel R. Levinson, Inspector General of the Department of Health & Human Services (HHS) announced.
Chand, 44, pleaded guilty before U.S. District Judge Sean F. Cox to one count of conspiracy to commit health care fraud and one count of conspiracy to launder money. At his sentencing, which is scheduled for Jan. 13, 2010, Chand faces a statutory maximum of 30 years in prison and a $750,000 fine.
Chand admitted that in 2003 he owned and controlled a company operating in Warren, Mich., called Continental Rehab Services Inc. (CRS), which purported to provide physical and occupational therapy services to Medicare patients. Chand also admitted that in 2004 he incorporated another physical and occupational therapy services company at the same Warren, Mich., address called Pacific Management Services Inc. (PMS). That company also purported to provide such services to Medicare patients.
Chand acknowledged in his guilty plea that he and his associates at CRS and PMS created false physical and occupational therapy files for Medicare patients when the purported services had not in fact been provided. The false services reflected in the files were billed to Medicare through sham Medicare providers controlled by Chand and others. These sham Medicare providers included multiple Detroit companies including Tri-Star Rehab Services Inc., Manage Care Physical Therapy & Rehab Services Inc., and S.U.B. Rehabilitation and Physical Therapy Center Inc.
In his plea, Chand admitted that in order to create the false therapy files, he and his co-conspirators paid cash kickbacks and other inducements to Medicare patients in exchange for their Medicare numbers and signatures. Chand acknowledged recruiting hundreds of Medicare patients, and paying them with cash and prescriptions for Vicodin and Xanax. Chand admitted that he obtained the prescriptions for these drugs from a physician who had never seen the patients. Chand also admitted that he prepared false prescriptions and files for the physician’s signature. To complete these bogus files, Chand admitted that he and others would obtain signatures from licensed therapists on false progress notes indicating that the therapists had provided therapy, when they had not. Chand admitted that the licensed therapists were paid to help falsify the files.
Chand also admitted that between January 2003 and March 2007, he and his co-conspirators submitted claims to the Medicare program totaling approximately $18,379,300 for unnecessary therapy services that were never rendered. After the proceeds of the fraud were obtained from Medicare, Chand acknowledged that he laundered the funds through a series of transactions using shell companies designed to conceal the nature, source, location, ownership and control of the tainted funds.
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 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 Deputy Chief Kirk Ogrosky of the Criminal Division’s Fraud Section and U.S. Attorney Terrence Berg of the Eastern District of Michigan. Since their inception in March 2007, Strike Force operations in four districts have obtained indictments of 300 individuals who collectively have falsely billed the Medicare program for more than $680 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
United States Transfers Three Guantanamo Bay Detainees<br />Read the Press Release
WASHINGTON — The Department of Justice today announced that three detainees have been transferred from the detention facility at Guantanamo Bay to the control of the governments of Ireland and Yemen.
As directed by the President’s Jan. 22, 2009 Executive Order, the interagency Guantanamo Review Task Force conducted a comprehensive review of each of these cases. As a result of that review, these detainees were approved for transfer 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 before their transfer.
Alla Ali Bin Ali Ahmed, a native of Yemen was transferred to the government of Yemen. On May 4, 2009, a federal court ruled that Ahmed may no longer be detained under the Authorization for the Use of Military Force and ordered the government to release him from detention at Guantanamo Bay.
In addition, two additional detainees were transferred to the government of Ireland. Pursuant to a request from the government of Ireland, the identities of these detainees are being withheld for security and privacy reasons.
These transfers were carried out under individual arrangements between the United States and the governments of Yemen and Ireland. The United States has coordinated with the governments of each of these nations to ensure the transfers take place under appropriate security measures and will continue to consult with these governments regarding these detainees.
Since 2002, more than 550 detainees have departed Guantanamo for other countries including Albania, Algeria, Afghanistan, Australia, Bangladesh, Bahrain, Belgium, Bermuda, Chad, Denmark, Egypt, France, Iran, Iraq, Jordan, Kuwait, Libya, Maldives, Mauritania, Morocco, Pakistan, Portugal, Russia, Saudi Arabia, Spain, Sweden, Sudan, Tajikistan, Turkey, Uganda, United Kingdom and Yemen.
UBS Client Pleads Guilty to Failing to Report $6.1 Million in Swiss Bank AccountsRead the Press Release
A Saddle River, N.J., man pleaded guilty today to failure to file a Report of Foreign Bank or Financial Accounts (F-BAR. Juergen Homann appeared today before Judge Stanley R. Chesler in Newark, N.J., and accepted responsibility for concealing more than $5 million in Swiss bank accounts.
According to court documents and statements made in court, Homann failed to file an F-BAR for calendar year 2007. Homann also failed to report his account at UBS AG in Switzerland on his individual income tax return for that year. Additionally, Homann failed to report income earned on his UBS bank account. The UBS account, originally opened in the late 1980's in the name of a Liechtenstein foundation, was transferred into the name of ELM Finance Limited, a nominee Hong Kong corporation. Homann established ELM with the assistance of Swiss lawyer, Matthias Rickenbach, who was indicted in August 2009 for conspiring to defraud the United States. From 2001 through 2008, Homann held approximately $6.1 million in assets in the ELM account at UBS in Switzerland.
According to court documents and statements made in court, in 2005, Homann, with the assistance of Rickenbach and a Swiss banker, conducted a sham loan by transferring $5 million from an account in the name ELM Finance Limited to a second Hong Kong entity in order to obtain financing for Homann’s U.S. business without alerting authorities that he controlled the assets in the ELM at UBS. Further, Rickenbach and a Swiss banker persuaded the defendant not to seek out and enter into the IRS’s Voluntary Disclosure program.
Judge Chesler scheduled sentencing for Jan. 6, 2010. Homann faces a maximum sentence of five years in prison and a maximum fine of $250,000 or twice the amount of financial gain to the defendant or loss to the IRS. Additionally, Homann has agreed to pay a civil F-BAR penalty based on 50% of the highest balance contained in the UBS account.
"As the IRS voluntary disclosure program enters its final few weeks, those who are hiding income and assets in offshore accounts would be well-advised to promptly come in and come clean before the government learns about their accounts through other channels," said John A DiCicco, Acting Assistant Attorney General of the Justice Department’s Tax Division. "Those who think they can ‘stay below the radar’ face a real risk of prosecution and jail if convicted, and they will still owe the taxes due, together with interest and civil penalties."
For those who are not participating in the Voluntary Disclosure Program, we are working very closely with the Tax Division and the IRS to investigate and prosecute cases where individuals have sought to hide assets and income offshore," said Acting U.S. Attorney for the District of New Jersey, Ralph J. Marra, Jr.
"The IRS is serious about pursuing people with hidden offshore accounts, and we are stepping up our international efforts," said IRS Commissioner Doug Shulman. "People should make sure they meet their filing requirements. Failure to do so can carry serious consequences. We encourage people who have been hiding money offshore to come forward by Oct. 15 to take advantage of the special provisions in our voluntary disclosure effort."
In February 2009, UBS entered into a deferred prosecution agreement pursuant to which the bank admitted to helping U.S. taxpayers hide accounts from the IRS. As part of their agreement, UBS provided the United States government with the identities of, and account information for, certain U.S. customers of UBS’s cross-border business.
In June 2009, UBS client Steven Michael Rubinstein, a Boca Raton, Fla., accountant, pleaded guilty to filing a false tax return. In April 2009, another UBS client, Robert Moran, a Ft. Lauderdale, Fla., yacht broker, pleaded guilty to filing a false tax return. In July 2009, UBS client Jeffrey Chernick of Stanfordville, N.Y., pleaded guilty to filing a false tax return. In August 2009, UBS client John McCarthy, a resident of Malibu, Calif., pleaded guilty to failing to report his ownership of and interest in a foreign financial account.
Acting Assistant Attorney General DiCicco and U.S. Attorney Marra commended the IRS agents who investigated the case, as Trial Attorney Michael P. Ben’Ary of the Tax Division and Assistant U.S. Attorney Marc-Philip Ferzan who are prosecuting the case.
United States citizens who have an interest in, or signature or other authority over, a financial account in a foreign country with assets in excess of $10,000 are required to disclose the existence of such account on Schedule B, Part III of their individual income tax return. Additionally, U.S. citizens much file an F-Bar with the United States Treasury, disclosing any financial account in a foreign country with assets in excess of $10,000 for which they have a financial interest in or signature authority, or other authority over.
More information about the Justice Department’s Tax Division and its enforcement efforts is available at http://www.usdoj.gov/tax/.
Texas Man Pleads Guilty to Advertising and Possessing Child PornographyRead the Press Release
Mark Edwin Cairnes of Jonestown, Texas, pleaded guilty today to advertising and possessing child pornography.
Cairnes, 51, pleaded guilty before U.S. District Judge Sam Sparks in Austin, Texas, to one count of advertising child pornography and one count of possession of child pornography. He was indicted on those charges on July 21, 2009. As part of his plea agreement, Cairnes admitted that he used an Internet bulletin board to seek out images of child pornography and possessed tens of thousands of images of child pornography, including images of children engaged in sadistic and masochistic conduct.
Cairnes was identified through "Operation Joint Hammer," the U.S. component of an ongoing global enforcement operation targeting transnational rings of child pornographers. The operation has led to the arrest of more than 60 people in the United States involved in the trade of child pornography. Operation Joint Hammer was initiated through evidence developed by European law enforcement and shared with U.S. counterparts by Europol and Interpol. The European portion of this global enforcement effort, "Operation Koala," was launched after the discovery of the activities of several people in Europe who were abusing children and producing photographs of the abuse for commercial gain. Further investigation unveiled a number of online child pornography rings.
Sentencing has been set for Dec. 18, 2009. At sentencing, Cairnes faces a maximum sentence of 30 years in prison for advertising child pornography and a maximum of 10 years in prison for possessing child pornography. He also faces forfeiture of all seized property, up to a $250,000 fine and the possibility of a lifetime period of supervised release.
The case is being prosecuted by Assistant U.S. Attorney Matthew B. Devlin of the Western District of Texas and Trial Attorney Alecia Riewerts Wolak of the Criminal Division’s Child Exploitation and Obscenity Section. The investigation is being handled by U.S. Immigration and Customs Enforcement.
Seafood Wholesaler and Owner Sentenced in a Conspiracy to Illegally Harvest Rock FishRead the Press Release
WASHINGTON— Robert Lumpkins, owner of Golden Eye Seafood LLC, of St. Mary’s County, Md., was sentenced to 18 months in prison and the company was sentenced today to 3 years probation by U.S. District Judge Peter J. Messitte after a two day sentencing hearing in the District of Maryland, the Justice Department announced.
Additionally, they were sentenced to pay a fine of $36,000 and restitution of $164,040.50 along with a special assessment of $1,600.
Lumpkins and Golden Eye had previously pleaded guilty to conspiring to violate and violating the Lacey Act, by falsely recording the amount and weight of striped bass, also known as rockfish that were harvested by local fishermen and checked-in through Golden Eye from 2003 to 2007.
According to Lumpkins’ plea agreement, from at least 2003 to the present, he was a fish wholesaler, doing business from his residence in Piney Point, Md., under the name Golden Eye Seafood. Lumpkins, through, Golden Eye, acted as a commercial striped bass check-in station for the state of Maryland. Lumpkins admitted that on numerous occasions from 2003 to 2007, he falsely recorded the amount of striped bass that fisherman harvested and failed to record some of the striped bass that was caught or recorded a lower weight of striped bass than was actually caught.
Lumpkins and the fishermen would also falsely inflate the actual number of fish harvested. By under-reporting the weight of fish harvested, and over-reporting the number of fish taken, the records would make it appear that the fishermen had failed to reach the maximum poundage quota for the year, but had nonetheless run out of tags. As a result, the state would issue additional tags that could be used by the fishermen allowing them to catch striped bass above their maximum poundage quota amount. Lumpkins and Golden Eye shipped the majority of the fish to purchasers in Maryland and in other states. Lumpkins also purchased fish that were outside the legal size limit from an undercover agent and sold those fish to purchasers in New York, Virginia, and California.
"This prison sentence sends a strong message to commercial fishermen and wholesalers on the Chesapeake Bay and Potomac River. Those who illegally harvest rockfish will be investigated, prosecuted and face stiff sentences including the possibility of incarceration," said John C. Cruden, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division.
U.S. Attorney Rod J. Rosenstein stated, "If commercial fishermen obey the rules, we can all enjoy rockfish forever. If they don’t, the rockfish population could be wiped out very quickly. This sentence sends a message that we are serious about protecting the rockfish population in the Chesapeake Bay."
Joseph Peter Nelson Jr., a commercial fisherman licensed in Maryland, pleaded guilty to four felony violations of the Lacey Act for participating in a scheme to illegally over harvest and under report the amount of rockfish he took from the Potomac River. His father, Joseph Peter Nelson Sr., also pleaded guilty to one felony violation of the Lacey Act for assisting in transporting the illegally taken rockfish in interstate commerce. The Nelsons are scheduled to be sentenced on Oct. 22, 2009. Jerry Decatur, Sr. and Jerry Decatur, Jr. both pleaded guilty to violations of the Lacey Act and are scheduled to be sentenced on Oct. 27 and Oct. 28, 2009, respectively.
Additionally, John Evans, a commercial fisherman who operated in St. Mary’s County and the surrounding waters of the Chesapeake Bay, pleaded guilty to a violation of the Lacey Act for overfishing striped bass and was sentenced to three months in prison followed by six months home detention.
Cannon Seafood, a Washington, D.C., fish wholesaler, its owner, Robert Moore Sr. and his son Robert Moore Jr. pleaded guilty to similar charges. Cannon Seafood was ordered to pay restitution of $28,000 and a fine of $80,000. Robert Moore Sr. and Robert Moore Jr., were each sentenced to four months home detention, followed by three years probation, and were ordered to pay restitution of $15,000 and $10,000, and a fine of $40,000 and $30,000, respectively.
Thomas L. Hallock, a commercial fisherman licensed in Maryland, was sentenced to a year and a day in prison, for illegally overfishing rockfish and was ordered to pay restitution of $40,000 and a fine of $4,000. Commercial fisherman Thomas Crowder was sentenced to 15 months in prison, ordered to pay a $5,000 fine and restitution of $96,250 and Charles Quade was sentenced to five months in prison, followed by five months of home detention. Quade was also ordered to pay a $1,000 fine and restitution of $5,000. Keith Collins was sentenced to 13 months in prison and was ordered to pay $70,569 in restitution and a fine of $4,500. Kenneth Dent was ordered to pay $2,905 in restitution and was sentenced to 3 years probation. Crowder, Quade, Collins and Dent all pleaded guilty to Lacey Act violations for overfishing striped bass. All of the restitution is to be paid to the National Fish and Wildlife Foundation to the benefit of the Chesapeake Bay Striped Bass Restoration Account.
As a result of the investigation and prosecution, two fish wholesalers and a total of 15 individuals, including today’s defendants, have been convicted of illegally harvesting and underreporting their catch of striped bass.
These cases resulted from an investigation by an interstate task force formed by the U.S. Fish and Wildlife Service, the Maryland Natural Resources Police and the Virginia Marine Police, Special Investigative Unit in 2003. The task force conducted undercover purchases and sales of striped bass in 2003, engaged in covert observation of commercial fishing operations in the Chesapeake Bay and Potomac River area, and conducted detailed analysis of area striped bass catch reporting and commercial business sales records from 2003 through 2007.
The cases are being prosecuted by Assistant U.S. Attorneys Stacy Dawson Belf and Christen Sproule for the District of Maryland and Senior Trial Attorney Wayne Hettenbach of the Justice Department’s Environmental Crimes Section.
Justice Department Files Lawsuit on Behalf <br /> of Michigan Servicemember Against Security CompanyRead the Press Release
WASHINGTON – The Justice Department today filed a lawsuit in federal court in Michigan alleging that Knight Protective Service Inc., willfully violated the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA) by failing to promptly and properly reemploy King A. Gatten, a retired Army servicemember, when he returned from military service.
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 positions comparable to the positions that they would have held had they not left to serve in the military. USERRA also requires that civilian employers reemploy returning servicemembers in positions of like pay, status and benefits to the positions the servicemembers would have held if they had been continuously employed by their civilian employers.
The Justice Department’s complaint alleges 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 guard sergeant – the position he held with Knight before he left to serve in the military. Gatten initially filed a complaint with the Labor Department’s Veterans’ Employment and Training Service, which investigated the matter, determined that the complaint had merit and referred the matter to the Justice Department. In its lawsuit, the Justice Department seeks reemployment for Gatten as a full-time security guard sergeant, the lost wages and benefits he would have received had Knight promptly and properly reemployed him as USERRA requires, and liquidated damages.
"No servicemember should be made to fear for his or her livelihood because he or she answered our country’s call to duty," said Loretta King, Acting Assistant Attorney General for the Civil Rights Division. "The Civil Rights Division is committed to protecting the rights of those who, through their bravery and sacrifice, secure the rights of all Americans."
The Department’s Civil Rights Division has given a high priority to the enforcement of service members’ rights under USERRA. This is the 19th USERRA lawsuit the Civil Rights Division has filed in 2009 on behalf of service members. Additional information about USERRA can be found on the Justice Department’s Web sites, http://www.usdoj.gov/crt/emp and http://www.servicemembers.gov, as well as on the Labor Department’s Web site at www.dol.gov/vets/programs/userra/main.htm.
Justice Department Files Lawsuit Alleging<br /> Retaliation by Franklin County, North CarolinaRead the Press Release
The Justice Department today filed a lawsuit in federal court in Raleigh, N.C., against Franklin County, N.C., alleging that the county retaliated against a former employee in its Department of Public Utilities, in violation of Title VII of the Civil Rights Act of 1964, after the employee complained about sexual harassment by a co-worker. Title VII prohibits employment discrimination on the basis of race, color, national origin, sex and religion. Title VII also prohibits retaliation against employees for opposing employment practices that they reasonably believe are discriminatory or for filing a complaint of employment discrimination.
According to the complaint, while Karen Dorrans was employed by the county, she complained to her supervisor and human resources manager about what she believed to be sexual harassment by a co-worker. The county instructed Dorrans that, in order for it to consider her complaint, she first had to confront the alleged harasser. According to the Justice Department’s complaint, since Dorrans did not confront the alleged harasser, and in retaliation for her complaints, the county disciplined Dorrans by extending her probationary period of employment by six months, denying her a salary increase, issuing her a disciplinary "final warning" and significantly lowering her quarterly job performance ratings. The Justice Department is seeking an order from the court that the county take remedial steps to ensure a non-retaliatory workplace for its employees and that the county provide Dorrans with remedial relief, including back pay with interest and compensatory damages.
"All workers deserve the freedom to go to work each day without fear of discrimination. Public employers should set an example for others by upholding the law and taking prompt and effective action to stop discrimination and retaliation," said Acting Assistant Attorney General Loretta King of the Civil Rights Division. "The Department of Justice will vigorously pursue such violations of Title VII."
The enforcement of Title VII is a priority of the Justice Department’s Civil Rights Division. Additional information about the Civil Rights Division is available on its Web sites at http://www.usdoj.gov/crt/ and http://www.usdoj.gov/crt/emp.
Jury Convicts Defense Department Official of Unlawful Communication of Classified Information <br /> and Making False StatementsRead the Press Release
James Wilbur Fondren Jr., was convicted by a federal jury today on charges involving providing classified information to a man working with the People’s Republic of China (PRC) and lying to the FBI about it.
Fondren was convicted of one count of unlawfully communicating classified information to an agent of a foreign government and two counts of making false statements to the FBI. He was acquitted of two unlawful communication of classified information, one count of conspiracy to communicate classified information to an agent of a foreign government and act as an illegal foreign agent, and one count of aiding and abetting an agent of a foreign government.
Fondren faces a maximum of 10 years in prison on the unlawful communication of classified information count and a maximum of five years in prison for each false statement count when he is sentenced on Jan. 22, 2010.
David Kris, Assistant Attorney General for National Security; Neil H. MacBride, U.S. Attorney for the Eastern District of Virginia; and Joseph Persichini, Jr., Assistant Director in Charge of the FBI’s Washington Field Office, made the announcement.
Fondren, age 62, worked at the Pentagon and, from August 2001 through Feb. 11, 2008, was the Deputy Director, Washington Liaison Office, U.S. Pacific Command (PACOM). He held a Top Secret security clearance, worked in a Sensitive Compartmentalized Information Facility (SCIF) and had a classified and unclassified computer at his cubicle. He has been on administrative leave with pay since mid-February 2008 and has not performed any duties in or for PACOM since that time.
According to court documents and evidence at trial, from approximately November 2004 to February 2008, Fondren provided certain Defense Department documents and other information to Tai Shen Kuo, a naturalized U.S. citizen from Taiwan.
Fondren was aware that Kuo had maintained a close relationship with an official of the People’s Republic of China (PRC), to whom Kuo introduced Fondren during a trip the two took to the PRC in March 1999. As Kuo well knew, this individual was an official of the PRC government. Fondren and the PRC official exchanged more than 40 email messages between March 1999 and November 2000.
Fondren was accused of providing classified information through Kuo, under the guise of consulting services, using a business that had Kuo as its sole customer. Fondren would incorporate this information into "opinion papers" that he sold to Kuo. He would also provide Kuo with sensitive, but unclassified Defense Department publications. The jury found him guilty of providing Kuo with an opinion paper titled "DoD-PLA Bilateral Military Meetings," which contained information classified "CONFIDENTIAL."
According to court records and evidence at trial, when Fondren was interviewed by FBI agents regarding this investigation, he falsely represented that everything he wrote to Kuo in his opinion papers was based on information from press and media reports and from his experience and that he had not given Kuo a draft copy of an unclassified document on military strategy.
This investigation was conducted by the FBI. The Air Force Office of Special Investigations (OSI) provided substantial assistance and cooperation throughout the course of the investigation.
The prosecution is being handled by Assistant U.S. Attorneys Neil Hammerstrom and James P. Gillis, from the U.S. Attorney’s Office for the Eastern District of Virginia, and Trial Attorney Ryan Fayhee from the Counterespionage Section of the Justice Department’s National Security Division.
Former Oklahoma Official Sentenced for Concealing Violations of Safe Drinking Water ActRead the Press Release
WASHINGTON—The former supervisor of the wastewater treatment facility in Ft. Gibson, Okla., Christopher Neil Gauntt was sentenced today in federal court in Muskogee, Okla., to serve six months home confinement for submitting false statements that concealed violations of the Safe Drinking Water Act, the Justice Department announced. He was also sentenced to pay a $5,000 fine and serve five years probation following the term of confinement.
On April 29, 2009, Gauntt pleaded guilty to a one-count felony information charging him with making false statements in a monthly operational report submitted to the Oklahoma Department of Environmental Quality (DEQ). Gauntt, while serving as the supervisor at the Ft. Gibson Water Treatment Plant, submitted monthly operational reports for drinking water which contained false test entries for water turbidity and residual disinfectant levels. Oklahoma DEQ relies on the accuracy of information from wastewater treatment plant supervisors to ensure that water supplied by the Ft. Gibson Water Treatment Plant is in compliance with the Safe Drinking Water Act and is safe for the public to drink.
Under the federal Safe Water Drinking Act, which is administered and enforced by DEQ, as well as the U.S. Environmental Protection Agency (EPA), the Fort Gibson water treatment plant must provide drinking water that meets standards to ensure that the water is safe for human consumption. Two of the standards that must be met include turbidity and chlorine. If turbidity, the measure of clarity of drinking water, or chlorine levels are not within levels required by the Safe Drinking Water Act, there is a potential risk that the water could retain micro-organisms that carry waterborne diseases including dysentery.
There was no indication that Gauntt’s actions caused any actual harm to individuals who consumed the drinking water from the plant.
"Falsifying environmental reports, especially those dealing with safe drinking water, is unacceptable," said John C. Cruden, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. "This sentence should remind all of us that violating the public’s trust will result in prosecution and punishment."
"Accurate information about drinking water quality is essential to protect the public health," said Paula Brown, Acting Special Agent-in-Charge of EPA’s criminal enforcement office in Dallas. "Those who submit false reports or bogus data undermine those efforts, and will be vigorously prosecuted. We are extremely pleased that this complaint was brought to our attention through EPA's ‘Report a Violation’ Web site."
"We have little choice but to trust that the water flowing from our taps is safe to drink," said Oklahoma Attorney General Drew Edmondson. "When a treatment facility official falsifies records, that trust is violated. Along with our partners at all levels of government, the Office of the Attorney General stands ready to investigate and prosecute those whose actions place the public health and water safety at risk."
The Ft. Gibson Water Treatment Plant is subject to federal regulations and provisions of the Safe Drinking Water Act as established and implemented by Oklahoma DEQ and enforced by EPA.
The case arose from a criminal investigation undertaken by the EPA-Criminal Investigation Division and the Oklahoma Attorney General’s Office. The case was prosecuted by Senior Trial Attorney Daniel Dooher of the Justice Department’s Environmental Crimes Section.
Florida Limousine Drive Sentenced to Prison<br /> for Securities and Tax FraudRead the Press Release
Eli Goldshor of Boca Raton, Fla.,was sentenced today for conspiracy to commit securities fraud and willfully failing to file tax returns. Goldshor, a self-employed limousine driver, was sentenced by Judge William Zloch in Ft. Lauderdale, Fla., to 18 months in prison.
In January 2008, Goldshor pleaded guilty to conspiracy and failure to file charges. According to the plea agreement and court documents, Goldshor nominally served as president of two subsidiaries of Harvard Learning Centers Inc., a Boca Raton-based corporation whose securities were publicly traded. The company was previously known as American Way Business Development, American Way Home Based Businesses and DCGR International Holdings Inc. Harvard Learning claimed to be involved in several different business ventures.
According to the plea agreement and court documents, from September 2004 through at least March 2007, Goldshor and Donald Platten, who was an officer and sole director of Harvard Learning, engaged in a scheme to cause Harvard Learning to issue stock to Goldshor of which Platten was the true owner. After Goldshor sold the Harvard Learning stock, Goldshor would retain some of the proceeds and use the remainder for Platten’s benefit.
According to the plea agreement and court documents, Platten caused Harvard Learning to issue stock to Goldshor by falsely claiming that the stock was being issued as payment for promissory notes from Harvard Learning to Goldshor. Between May 2005 and February 2006, Goldshor signed promissory note conversion notices to cause Harvard Learning to issue more than 79 million shares of Harvard Learning stock. However, Goldshor knew that the promissory notes were fraudulent in that Harvard Learning only owed him a small portion of the sums referred to in the promissory notes.
According to the plea agreement and court documents, from September 2004 through March 2007, Goldshor transferred some of the Harvard Learning stock that Platten caused to be issued to him to Platten’s future wife, Platten’s sister, as well as other individuals and entities. Goldshor sold the remainder of the Harvard Learning stock in the market for more than $700,000. Goldshor used some of the proceeds to pay his own and Platten’s personal expenses and transferred some of the proceeds to Platten’s family members. In addition, Goldshor failed to file tax returns with the IRS for 2005 and 2006.
In August 2009, Goldshor testified for the government in the trial of Platten for securities and tax violations. Platten was convicted of securities fraud, conspiracy to commit wire fraud, and tax fraud. He is scheduled to be sentenced on Oct. 30, 2009.
John A. DiCicco, Acting Assistant Attorney General of the Justice Department’s Tax Division, commended the agents from IRS Criminal Investigation and the Food and Drug Administration Office of Criminal Investigations who investigated the case, as well as Tax Division trial attorneys Kenneth C. Vert and Steven D. Grimberg who prosecuted the case.
Two Indiana Men Plead Guilty to Cross BurningRead the Press Release
Richard LaShure, 41, and Aaron Latham, 20, both of Muncie, Ind., pleaded guilty to conspiring to violate the civil rights of an African American family and to interfering with their housing rights by burning a cross in the family’s yard.
According to the charging document, on July 25, 2008, the two men, acting with the assistance of a third participant, built a cross and poured gasoline on it, then set it on fire in the yard of an African-American family who lived in the neighborhood. They will be sentenced on Nov. 5, 2009.
This is the second case in two years in which the Civil Rights Division has brought charges for a cross burning that occurred in Muncie, Ind. Two men were convicted in 2008 for burning a cross at the home of a woman who had biracial children.
"These two men used a despicable and unmistakable symbol of hatred, the burning cross, to intimidate a family because they are African American," said Loretta King, Acting Assistant Attorney General for the Civil Rights Division. "The Civil Rights Division will continue to prosecute this type of illegal, hateful behavior to the fullest extent of the law."
The guilty pleas resulted from an investigation by Special Agent Charlie Rownd from the Muncie Field Office of the FBI and Betsy Biffl from the Civil Rights Division of the United States Department of Justice .
Superseding Indictment in Boyd Matter Charges Defendants with Conspiring to Murder U.S. Military Personnel, Weapons ViolationsRead the Press Release
Today, a federal grand jury returned a superseding criminal indictment in the Daniel Patrick Boyd matter.
While the superseding indictment returned today includes all of the charges alleged in the original indictment of July 22, 2009, it also includes new charges against three defendants, Daniel Patrick Boyd, aka "Saifullah," Hysen Sherifi, and Zakariya Boyd, aka "Zak."
First, the superseding indictment charges Daniel Patrick Boyd, aka "Saifullah," and Hysen Sherifi with conspiring to murder U.S. military personnel, in violation of Title 18, United States Code, Section 1117. The superseding indictment alleges, among other things, that in furtherance of this agreement, Boyd undertook reconnaissance of the Marine Corps Base located in Quantico, Va., and obtained maps of the base in order to plan an attack on Quantico. According to the superseding indictment, Boyd possessed armor piercing ammunition, stating it was "to attack the Americans." A conviction for conspiring to violate Title 18, United States Code, Section 1117 has a maximum penalty of imprisonment for any term of years or life, and/or a $250,000 fine, followed by five years of supervised release.
Second, Boyd, Sherifi, and Zakariya Boyd, aka "Zak," are also charged with possession of weapons in furtherance of a crime of violence, in violation of Title 18, United States Code, Section 924(c). These section 924(c) charges are separate from, and in addition to, the section 924(c) charges alleged in the original indictment. A violation of Title 18, United States Code, Section 924(c), carries a maximum penalty of no less than five years in prison nor more than life, a $250,000 fine or both fine and imprisonment, and up to five years of supervised release following imprisonment. If any of the defendants are convicted for more than one of the section 924(c) charges alleged by the grand jury, the minimum term of imprisonment rises to 25 years, to run consecutively to any other sentence.
Third, Daniel Boyd is also charged with the providing a Ruger mini 14 rifle and, on a separate date, .223 ammunition, to a convicted felon, each in violation of Title 18, United States Code, Section 922(d). If convicted, Boyd faces up to ten years in prison and a $250,000 fine, and three years supervised release on each of these charges.
U.S. Attorney George E.B. Holding commented: "These additional charges hammer home the grim reality that today’s homegrown terrorists are not limiting their violent plans to locations overseas, but instead are willing to set their sights on American citizens and American targets, right here at home."
"The events over the course of the week should serve as a reminder that there are those at home and abroad who continue to plot to cause harm to U.S. citizens. The FBI, U.S. Attorney's Office and our law enforcement and intelligence community partners will continue working tirelessly to prevent that from happening," said Owen D. Harris, Special Agent in Charge of the Charlotte Division of the FBI.
"NCIS investigative efforts in support of the FBI’s investigation centered on protecting Marine Corps personnel assigned to MCB Quantico during Mr. Boyd's alleged activities. These efforts were closely coordinated and supported by MCB Quantico Command to insure the safety of military and civilian personnel aboard the base. This case represents the close coordination between NCIS and FBI in addressing terrorism issues that may impact the operational readiness of the U.S. military."
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty in court.
Najibullah Zazi Indicted for ConspiracyRead the Press Release
The Justice Department today announced that Najibullah Zazi, 24, a resident of Aurora, Colo., and legal permanent resident of the United States from Afghanistan, has been indicted in the Eastern District of New York on a charge of conspiracy to use weapons of mass destruction (explosive bombs) against persons or property in the United States.
FBI agents in Colorado first arrested Zazi on Sept. 19, 2009 pursuant to a criminal complaint charging him with knowingly and willfully making false statements to the FBI in a matter involving international and domestic terrorism. Zazi made an initial court appearance on those charges in the District of Colorado on Sept. 21, 2009. The government will ask that those charges be dismissed and that Zazi be transferred to New York to face this new charge.
Yesterday, a federal grand jury in the Eastern District of New York returned a one-count indictment alleging that between Aug. 1, 2008 and Sept. 21, 2009, Zazi knowingly and intentionally conspired with others to use one or more weapons of mass destruction, specifically explosive bombs and other similar explosive devices, against persons or property within the United States. The indictment also alleges that, in furtherance of this offense, Zazi and others traveled in interstate and foreign commerce, used email and the Internet, and that this offense and the results of the offense would have affected interstate and foreign commerce.
"The indictment alleges that Najibullah Zazi conspired with others to use explosive devices against persons or property in the United States," said Attorney General Eric Holder. "We are investigating a wide range of leads related to this alleged conspiracy, and we will continue to work around the clock to ensure that anyone involved is brought to justice. We believe any imminent threat arising from this case has been disrupted, but as always, we remind the American public to be vigilant and to report any suspicious activity to law enforcement."
In a detention motion filed in the Eastern District of New York and the District of Colorado, the government stated, "In furtherance of the conspiracy, Zazi received detailed bomb-making instructions in Pakistan, purchased components of improvised explosive devices, and traveled to New York City on September 10, 2009 in furtherance of his criminal plans."
The government’s detention memo further states that "Zazi remained committed to detonating an explosive device up until the date of his arrest, as exemplified by among other things, traveling overseas to receive bomb-making instructions, conducting extensive research on the internet regarding components of explosive devices, purchasing -- on multiple occasions -- the components necessary to produce TATP [Triacetone Triperoxide] and other explosive devices, and traveling to New York City on September 10, 2009 in furtherance of the criminal plan."
The Justice Department will seek to have Zazi transferred from the District of Colorado to the Eastern District of New York to be arraigned on the charge in the Brooklyn indictment. If convicted of the charge in the indictment, Zazi faces a potential sentence of life in prison.
The prosecution is being handled by the U.S. Attorney’s Office for the Eastern District of New York, with assistance from the U.S. Attorney’s Office for the District of Colorado and the Counterterrorism Section of the Justice Department’s National Security Division.
The investigation is being conducted by the New York and Denver FBI Joint Terrorism Task Forces, which combined have investigators from more than fifty federal, state and local law enforcement agencies.
The public is reminded that an indictment contains mere allegations and a defendant is presumed innocent until proven guilty.
Najibullah Zazi Indictment
Najibullah Zazi - Government's detention memo
Justice Department Announces Settlement of Its First Landlord-Tenant Case Under the Servicemembers Civil Relief ActRead the Press Release
WASHINGTON – The Justice Department today announced that it had reached a settlement with a Virginia landlord to resolve allegations that she violated the Servicemembers Civil Relief Act (SCRA). The lawsuit alleged that the landlord failed to return prepaid rent and security deposits to a tenant who had terminated her lease early in order to comply with military orders to relocate from to Georgia.
The SCRA provides certain protections to active duty servicemembers who must terminate residential leases to comply with military orders for a permanent change of station or for deployment. The complaint, which was filed with the settlement, represents the first lawsuit involving a landlord-tenant matter brought by the Justice Department under the SCRA. Under the terms of the settlement, which must be approved in federal court in Virginia, the landlord must pay her former tenant a total of $5,600 in damages and is enjoined from engaging in future violations of the SCRA.
"It is because of our men and women in uniform that we, as a nation, are able to enjoy great personal freedoms," said Loretta King, Acting Assistant Attorney General for the Civil Rights Division. "It is therefore our duty, and our privilege, to protect the rights of our servicemembers, as they protect us."
The tenant in this lawsuit, colonel Debra Bean, is a highly decorated member of the armed forces. Colonel Bean currently serves as Vice Commander for the 78th Air Base Wing at Robins Air Force Base in Georgia.
The Justice Department’s investigation of this matter originated with a referral to the Civil Rights Division from the U.S. Air Force. The Civil Rights Division received enforcement authority under the SCRA in 2006, and has since reviewed numerous allegations of SCRA violations and resolved investigations in the following areas without the need for litigation: the charging of excess interest over the six percent interest rate cap; the repossession of vehicles without court orders; and the foreclosure on home mortgage loans without court orders.
Servicemembers and their dependents who believe that their SCRA rights have been violated should contact the nearest Armed Forces Legal Assistance Program office. Office locations may be found at http://legalassistance.law.af.mil/content/locator.php. Additional information on the Justice Department’s enforcement of the SCRA and other laws protecting servicemembers is available at www.servicemembers.gov.
Former Choctaw County, Oklahoma, Deputy Sheriff Found Guilty of Civil Rights ViolationsRead the Press Release
WASHINGTON – Former Choctaw County, Okla., deputy sheriff Ben Westley Milner was found guilty today by a federal jury in Muskogee, Okla., of violating the civil rights of three men by assaulting them without legal justification. In one incident, which took place on Oct. 31, 2005, defendant Milner physically abused a truck driver following a traffic stop. In a second incident on Oct. 18, 2007, Milner assaulted two inmates at the Choctaw County Jail. Milner was convicted on three counts of violating the civil rights of his victims and two counts of falsifying official reports. He faces a maximum sentence of ten years in prison for each civil rights offense and 20 years for each obstruction offense.
"The Department of Justice does not tolerate abuse of authority by the people we entrust to enforce our laws," said Loretta King, Acting Assistant Attorney General for the Civil Rights Division.
"We will continue to prosecute vigorously law enforcement officers who violate the public trust as this defendant did."
"The jury spoke clearly. Jailed inmates are not punching bags or dusty rugs to be beaten by a jailer. Our consistent message has been that we will protect honorable law enforcement officers and legitimate law enforcement actions. Clearly excessive force violates our Constitution, federal law and our standards of decency," said U.S. Attorney Sheldon J. Sperling for the Eastern District of Oklahoma.
The convictions resulted from an investigation by the Oklahoma Division of the FBI, Assistant U.S. Attorney Dean Burris for the Eastern District of Oklahoma and Trial Attorney Ryan McKinstry for the Civil Rights Division.
Former Alaska State Representative Sentenced <br /> for Conspiracy to Commit BriberyRead the Press Release
Former Alaska State Representative Beverly Masek was sentenced today to six months in prison by U.S. District Judge Ralph Beistline in Anchorage, Alaska. Masek, 45, was also ordered to serve three years of supervised release.
Masek pleaded guilty on March 12, 2009, to conspiring with former Alaska businessmen Bill J. Allen and Richard L. Smith to commit bribery. Allen was the chief executive officer of VECO Corporation (VECO), a now-defunct multinational oil field services company, and Smith was a VECO vice president. Both pleaded guilty to multiple federal corruption charges in May 2007 and are awaiting sentencing.
"Citizens must have faith that the officials they elect to represent their best interests will do so without the stain of bribery and corruption," said Assistant Attorney General Lanny A. Breuer of the Criminal Division. "Through the diligent work of our public corruption prosecutors, we will continue to hold accountable those government officials who violate the public trust."
According to her plea agreement, in the spring of 2003, Masek received multiple cash payments from Allen and one of his relatives. During the same time, Masek knew that the company for which Allen and Smith worked had matters pending before the Alaska state legislature, and she knew that these matters were important to Allen’s business interests. Specifically, Masek admitted in her plea agreement that she agreed on May 7, 2003, to withdraw a piece of legislation at the request of Allen, one day before she accepted a cash payment of approximately $2,000 from Allen. Masek admitted she knew that Allen gave her the money in part because of her agreement to withdraw the piece of legislation.
The sentencing was handled by Trial Attorneys M. Kendall Day and Marc Levin of the Criminal Division’s Public Integrity Section. The case was investigated by the FBI.
FBI Arrests Jordanian Citizen for Attempting to Bomb Skyscraper in Downtown DallasRead the Press Release
Hosam Maher Husein Smadi, 19, has been arrested and charged in a federal criminal complaint with attempting to use a weapon of mass destruction. Smadi, who was under continuous surveillance by the FBI, was arrested today near Fountain Place, a 60-story glass office tower located at 1445 Ross Avenue in downtown Dallas, after he placed an inert/inactive car bomb at the location. Smadi, a Jordanian citizen in the U.S. illegally, lived and worked in Italy, Texas. He has repeatedly espoused his desire to commit violent Jihad and has been the focus of an undercover FBI investigation.
"The highest priority of the FBI and the Department of Justice remains the prevention of another terrorist attack within the United States," said U.S. Attorney of the Northern District of Texas James T. Jacks. "In that effort, it is the job of the FBI to locate and identify individuals intent upon carrying out any type of attack upon this country and its citizens/residents. Whether as part of a group or acting alone, persons contemplating such acts need to know that all components of the government are working together to ferret out their activities and to insure that such individuals face the full measure of the law. The identification and apprehension of this defendant, who was acting alone, is a sobering reminder that there are people among us who want to do us grave harm," Jacks continued.
Robert E. Casey, Jr., Special Agent in Charge for the Dallas Office of the FBI said, "Today’s arrest of Hosam Maher Husein Smadi underscores the FBI’s unwavering commitment to bring to justice persons who attempt to bring harm to citizens of this country and significant danger to this community. Smadi made a decision to act to commit a significant conspicuous act of violence under his banner of "self Jihad." He will now face justice. The many agents, detectives, analysts and prosecutors who helped to bring about Thursday’s arrest deserve special thanks for their efforts. This case serves as a reminder of the continuing threats of terrorism we face as a nation and the FBI’s resolve to meet those threats. The arrest of Smadi is not in any way related to the ongoing terror investigation in New York and Colorado."
"The criminal complaint alleges that Hosam Smadi sought and attempted to bomb the Fountain Place office tower, but a coordinated undercover law enforcement action was able to thwart his efforts and ensure no one was harmed," said David Kris, Assistant Attorney General for National Security.
Smadi will make his initial appearance tomorrow in U.S. District Court before U.S. Magistrate Judge Irma C. Ramirez.
According to affidavits filed today with the complaint and search warrants:
Smadi was discovered by the FBI espousing his desire to commit significant acts of violence. Smadi stood out because of his vehement intention to actually conduct terror attacks in the U.S.
The FBI developed an investigative plan to determine Smadi’s true intent while also protecting the public’s safety. Smadi made clear his intention to serve as a soldier for Usama Bin Laden and al-Qa’ida, and to conduct violent Jihad. Undercover FBI agents, posing as members of an al-Qa’ida "sleeper" cell, were introduced to Smadi, who repeatedly indicated to them that he came to the U.S. for the specific purpose of committing "Jihad for the sake of God." Smadi clarified that he was interested in "self-Jihad," because it was "the best type of Jiihad." Smadi was interested in violent Jihad against those he deemed to be enemies of Islam. The investigation determined Smadi was not associated with other terrorist organizations.
Throughout the investigation, undercover FBI agents repeatedly encouraged Smadi to reevaluate his interpretation of Jihad, counseling him that the obligations a Moslem has to perform Jihad can be satisfied in many ways. Every time this interaction occurred, Smadi aggressively responded that he was going to commit significant, conspicuous acts of violence as his Jihad.
In June 2009, Smadi identified potential targets in the Dallas area; but in mid-July, he notified an undercover FBI agent that he had changed his mind regarding the targets. On July 21, 2009, Smadi met with an undercover FBI agent and directed the agent to drive them to a Wells Fargo Bank in downtown Dallas. Smadi and the undercover FBI agent then drove to 1445 Ross Avenue where the Fountain Place office tower is located. A Wells Fargo Bank is located in that building. Smadi went into the building where he conducted his own reconnaissance.
In late August 2009, while meeting with one of the undercover FBI agents in Dallas, Smadi discussed the logistics and timing of the bombing, stating that he would have preferred to do the attack on "11 September," but decided to wait until after the month of Ramadan, which ended on September 20, 2009. At the conclusion of the meeting, Smadi decided that a vehicle borne improvised explosive device (VBIED) would be placed at the foundation of the Fountain Place office tower. Unbeknownst to Smadi, the FBI ensured the VBIED contained only an inert/inactive explosive device which contained no explosive materials.
A federal complaint is a written statement of the essential facts of the offenses charged, and must be made under oath before a magistrate judge. A defendant is entitled to the presumption of innocence until proven guilty. The offense of attempting to use a weapon of mass destruction carries, upon conviction, a maximum statutory sentence of life in prison and a $250,000 fine.
The case is being investigated by the FBI in conjunction with members of the FBI-sponsored North Texas Joint Terrorism Task Force. Assistant U.S. Attorney Dayle Elieson is in charge of the prosecution. The Counterterrorism Section of the Justice Department’s National Security Division is assisting in the prosecution.
Dutch Firm and Two Officers Plead Guilty to Conspiracy to Export Aircraft Components and Other Goods to IranRead the Press Release
A Dutch aviation services company, its director and sales manager pleaded guilty today in the District of Columbia to federal charges related to a conspiracy to illegally export aircraft components and other items from the United States to entities in Iran via the Netherlands, the United Arab Emirates and Cyprus.
The announcement was made by David Kris, Assistant Attorney General for National Security; Channing D. Phillips, Acting U.S. Attorney for the District of Columbia; and Kevin Delli-Colli, Acting Assistant Secretary of Commerce for Export Enforcement, and Sharon E. Woods, Director of the Defense Criminal Investigative Service. The investigation was conducted by agents from the Department of Commerce’s Office of Export Enforcement, with assistance from the Defense Criminal Investigative Service (DCIS), the Department of Homeland Security’s U.S. Immigration and Customs Enforcement (ICE), and the Federal Bureau of Investigation (FBI).
Aviation Services International, B.V. ("ASI"), an aircraft parts supply company in the Netherlands; Robert Kraaipoel, 66, a citizen of the Netherlands and the director of ASI; and Robert Neils Kraaipoel ("Neils Kraaipoel"),40, a citizen of the Netherlands, the sales manager of ASI and son of Robert Kraaipoel, each entered a plea of guilty to a one-count criminal information in federal court in the District of Columbia.
The information charged each with conspiracy to violate the International Emergency Economic Powers Act (IEEPA) and the Iranian Transactions Regulations by exporting aircraft components and other goods to Iran without obtaining licenses from the Treasury Department’s Office of Foreign Assets Control (OFAC). The two individual defendants each face a potential sentence of five years in prison and a maximum fine of $250,000 or twice the pecuniary gain or loss. ASI has agreed to pay a $100,000 fine and corporate probation for five years.
According to the criminal information, from about October 2005 to about October 2007, the defendants received orders from customers in Iran for U.S.-origin goods that were restricted from being transshipped into Iran. The defendants then contacted companies in the United States and negotiated purchases of materials on behalf of Iranian customers. The defendants provided false end-user certificates to certain U.S. companies to conceal that customers in Iran would be the true recipients of the goods.
In order to conceal these activities from the U.S. government, the defendants caused certain companies in the United States to ship the materials to ASI in the Netherlands or to addresses in other countries, including the United Arab Emirates and Cyprus. Upon arrival in the Netherlands or these other countries, the ordered materials were repackaged and transshipped to Iran.
For example, according to the criminal information, the defendants used these methods to purchase various U.S. electronic communications equipment from a U.S. company between 2005 and 2007. The defendants falsely certified to the company that the equipment, which had potential applications in Unmanned Aerial Vehicles, was being sent to the Polish Border Control Agency, when, in reality, the equipment was being sent to Iran. The defendants arranged for the equipment to be exported from the United States to the Netherlands. Shortly thereafter, the equipment was sent to a customer in Iran.
In another instance, a shipment of aircraft parts from several U.S. companies that was destined for ASI in the Netherlands was detained by officers of U.S. Customs and Border Protection in January 2007. Niels Kraaipoel then called the U.S. Commerce Department and stated that the detained aircraft parts were to be resold in Europe. When asked if any were destined for Iran, he said they were not, that ASI did not have any business dealings with Iran and that he was aware of the U.S. trade restrictions on Iran.
Later in 2007, according to the criminal information, Robert Kraaipoel purchased aluminum sheets and rods from a Florida company for approximately $9,600. Kraaipoel instructed the U.S. company and a freight forwarder to list the Netherlands as the ultimate destination in the shipping documents. ASI attempted to have these goods shipped from the Netherlands to Iran, but Dutch Customs officials detained them on April 20, 2007.
In March 2007, a shipment of polymide film that ASI had purchased from a Kansas company was detained by U.S. officials. According to the criminal information, Robert Kraaipoel later contacted the U.S. freight forwarder and unsuccessfully attempted to have the items shipped to company in the U.A.E. The defendants knew that this particular company in the U.A.E. purchased items for customers in Iran.
Finally, the criminal information states that throughout much of August, September and October 2007 the defendants conducted purchases on behalf of a company in the U.A.E. that they knew supplied Iranian customers. For example, in September 2007, Niels Kraaipoel provided the U.A.E. company with a quotation for more than $200,000 worth of U.S.-origin aircraft parts and supplies.
Under the IEEPA and the Iranian Transaction Regulations, all exports to Iran of U.S.-origin commodities are prohibited absent authorization in the form of an export license from OFAC of the Department of the Treasury. It is also unlawful to ship U.S. origin products to a third country with the am of then diverting them or re-exporting them to Iran without the necessary authorization from OFAC. These prohibitions have been in place since 1995.
"This investigation demonstrates in clear terms the threat we face from the illegal foreign acquisition of U.S. technology. Keeping America’s critical technology from falling into the hands of state sponsors of terror has never been more important," said David Kris, Assistant Attorney General for National Security.
"A business or individual who illegally ships U.S.-origin goods to embargoed countries, such as Iran, undermines our national security," said Acting U.S. Attorney Phillips, Acting U.S. Attorney for the District of Columbia. "This prosecution reflects our commitment to enforcing our export control laws vigorously."
"Combating illegal transshipment of U.S.-origin items to Iran is a significant challenge and one of our top priorities," said Kevin Delli-Colli, Acting Assistant Secretary of Commerce for Export Enforcement. "Willful violations will be pursued regardless of where the perpetrators may reside."
"Today's pleas represent the culmination of a long-term collaboration effort amongst the investigators and prosecutors in bringing international arms dealers to justice," said Sharon E. Woods, Director of the Defense Criminal Investigative Service.
"As long as there are those who seek to illegally acquire U.S. Military equipment and technology, DCIS will remain committed to thwarting their efforts and to protecting America's Warfighters."Assistant Attorney General Kris, Acting U.S. Attorney Phillips, and Acting Assistant Secretary Delli-Colli, and Director Woods praised Senior Special Agents David Poole and Special Agents Michael Imbrogna and James Brigham from the Department of Commerce Office of Export Enforcement; Special Agent Michael Campion from DCIS, Special Agents Michael McGonigle and Brett Gentrup from ICE, and Special Agent Amanda McDaniel from the FBI.
The prosecution is being handled by Assistant U.S. Attorneys Ann H. Petalas and Denise Cheung from the U.S. Attorney’s Office for the District of Columbia, and Trial Attorneys Ryan Fayhee and Jonathan Poling from the Counterespionage Section of the Justice Department’s National Security Division.
Detroit Clinic Owner and Manager Plead Guilty to Medicare Fraud ChargesRead the Press Release
WASHINGTON – Clinic owners and operators Jose Martinez and Denisse Martinez pleaded guilty today in U.S. District Court in Detroit to participating in a conspiracy to defraud the Medicare program, Assistant Attorney General Lanny A. Breuer of the Criminal Division, U.S. Attorney Terrence Berg of the Eastern District of Michigan and Daniel R. Levinson, Inspector General of the Department of Health & Human Services (HHS) announced.
Jose Martinez, 33, and Denisse Martinez, 27, each pleaded guilty to one count of conspiracy to commit health care fraud before U.S. District Judge Victoria Roberts. At sentencing, which is scheduled for Feb. 18, 2010, both defendants face a statutory maximum of 10 years in prison and a $250,000 fine.
According to court documents, Jose Martinez, in September 2006, opened RDM Center Inc., a Canton, Mich., medical clinic purporting to specialize in providing injection and infusion services to Medicare beneficiaries. Jose Martinez’s then-wife, Denisse Martinez, managed and operated the clinic.
In their pleas, both defendants acknowledged that they hired a physician and other employees to work at RDM Center in order to create the appearance that the clinic was a legitimate health care facility providing necessary services to patients, when in fact, everyone working at the clinic knew that it was operated for the sole purpose of defrauding Medicare.
In their pleas, both Jose and Denisse Martinez admitted that d uring the time that the RDM Center was open, the clinic routinely billed the Medicare program for services that were medically unnecessary or never provided. Both defendants admitted that they purchased only a small fraction of the medications for which the clinic billed the Medicare program. Both defendants also admitted that patients were prescribed medications at the clinic based not on medical need, but on which medications were likely to generate Medicare reimbursements.
Denisse Martinez admitted in her plea that, despite having no medical training, she completed the clinic’s patient records by filling in, among other things, the "diagnosis" and "treatment" sections of the patient charts, which were then provided to the physician for his signature.
According to information contained in the plea documents, Medicare beneficiaries were not referred to RDM Center 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 their kickbacks, the Medicare beneficiaries would visit the clinic and sign false documents indicating that they had received the services billed to Medicare. Kickbacks came in the form of cash and prescriptions for controlled substances.
Jose Martinez stated in his plea that he provided cash to a patient recruiter for the purpose of paying Medicare beneficiaries to sign paperwork indicating that they had received infusion and injection therapy services which they did not in fact receive. Denisse Martinez stated in her plea that she understood the patients at the clinic were induced to visit RDM Center through the payment of kickbacks. Both defendants further admitted to being aware that certain Medicare beneficiaries demanded that they be provided prescription drugs, including Vicodin, in exchange for their participation in the fraudulent scheme and that such drugs were in fact provided.
Both defendants admitted in their pleas that between approximately November 2006 and March 2007, they and their co-conspirators filed $970,631 in false and fraudulent claims with the Medicare program. According to court documents, Medicare actually paid more than $649,000 of those false claims.
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 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 300 individuals and organizations that collectively have billed the Medicare program for more than $680 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 Medicare Fraud Strike Force teams are led by a federal prosecutor from the Criminal Division’s Fraud Section or the U.S. Attorney’s Office. Each team has an agent from the FBI and HHS-OIG.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team, or "HEAT," go to: www.stopmedicarefraud.gov
Fraudulent Telemarketer Sentenced to 50 Years in Prison, <br /> Co-Conspirators Also Sentenced for Roles in Fake Sweepstakes SchemeRead the Press Release
Four owners of Costa Rica-based telemarketing call centers, an employee and a Texas-based list broker have been sentenced for their roles in defrauding thousands of U.S. victims of more than $20 million through a phony sweepstakes scheme.
To date, 39 defendants have been convicted for their participation in Costa Rican-based fraudulent telemarketing schemes based on false claims that the victims had won large sweepstakes prizes.
U.S. District Court Judge Frank D. Whitney of the Western District of North Carolina yesterday sentenced Michael Mangarella, 49, of Brooklyn, N.Y., to 50 years in prison; Antonio Carl Testore, 54, of Montreal, Canada, to 97 months in prison; Martin Kalchstein, 63, of Brooklyn, to six years in prison; Jaime Ligator, 68, of Miami, to five years in prison; Michal Zakrzewski, 42, of Montreal, to 126 months in prison; and Trent Nyfeller, 44, of Dallas, to 41 months in prison. In addition, Mangarella was ordered to forfeit $10 million, Testore was ordered to forfeit $1.5 million and Ligator was ordered to forfeit $2.6 million. The defendants, except Kalchstein, also were ordered to pay restitution of $4,291,473, jointly and severally with other defendants. All the defendants were also sentenced to three years of supervised release following their prison terms.
All of the defendants, except Kalchstein, were convicted of conspiring to defraud U.S. residents, most above the age of 55, out of millions of dollars by deceiving them into believing that each had won a large monetary prize in a "sweepstakes contest." According to court documents, calls to victims were made from Costa Rica using computers to make telephone calls through the Internet, disguising the originating location of the calls. Victims were informed that the callers were from the "Sweepstakes Security Commission" and that to receive their "prize," victims had to wire to Costa Rica thousands of dollars for a purported "refundable insurance fee." As long as the victims continued to pay, the co-conspirators continued to solicit more money from them. Mangarella was convicted at trial in September 2008. The remaining defendants all pleaded guilty for their roles in the scheme: Ligator in September 2009; Zakrzewski in June 2009; Testore in August 2008; and Nyfeller in January 2007.
Kalchstein, who had already been convicted in the sweepstakes scheme and sentenced to 90 months in prison, pleaded guilty in June 2009 to failure to report to prison and obstruction of justice as a result of fleeing to Mexico, instead of reporting to prison to serve his sentence.
The case was prosecuted by Senior Trial Attorney Peter B. Loewenberg and Senior Litigation Counsel Patrick M. Donley of the Criminal Division’s Fraud Section. The Criminal Division’s Office of International Affairs also provided assistance. The case was investigated by the U.S. Postal Inspection Service; U.S. Department of Commerce, Office of the Inspector General; and U.S. Immigration and Customs Enforcement.
Five Individuals Charged in Scheme to Defraud U.S. Government Agency Related to $9.4 Million LoanRead the Press Release
Donald Daniels, Martin William Washburn, Irina Rebegeneau and Tapani Koivunen have been charged in conjunction with a scheme to defraud the Overseas Private Investment Corporation (OPIC), a government lending agency, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division and U.S. Attorney Joseph P. Russoniello for the Northern District of California.
The defendants, who have made initial appearances in federal court in San Francisco, were charged in an indictment returned by a federal grand jury on Aug. 27, 2009, and unsealed Sept. 17, 2009, with conspiracy to commit mail and wire fraud, wire fraud, money laundering conspiracy and substantive money laundering counts. Separately, Sergei Shkurkin was arrested Sept. 16, 2009, based on a criminal complaint and made his initial appearance in federal court last week. Shkurkin was charged in a related extortion conspiracy.
According to the indictment, Daniels, 44, Washburn, 77, Koivunen, 52, and Rebegeneau, 41, allegedly conspired to defraud OPIC, a government agency that provides loans for U.S. sponsored companies to invest in overseas projects. The indictment alleges that the defendants defrauded OPIC in conjunction with a loan to Golden Sierra Partners LLC (GSP) to establish a milling and bakery operation in Estonia. Specifically, the defendants allegedly misrepresented to OPIC that GSP’s members contributed equity to the project and misrepresented equipment costs, to obtain a $9.4 million loan from OPIC and related disbursements. As a result of these alleged misrepresentations and others, OPIC disbursed approximately $8 million.
In addition, according to the complaint against Shkurkin, members of GSP allegedly borrowed funds from Daniels to fake their equity contributions and then Shkurkin and others agreed to threaten certain GSP members to cause them to pay Daniels interest on the loan.
Daniels, Washburn and Rebegeneau were arrested and made their initial appearances in federal court in San Francisco last week. The court ordered them released on bond. Washburn and Rebegeneau will appear before U.S. District Court Judge Marilyn Hall Patel at 9:00 a.m. on Oct. 19, 2009. Daniels is scheduled to appear before U.S. Magistrate Judge Elizabeth D. LaPorte on Sept. 29, 2009, for further bail review. Koivunen was arrested in Chicago and made his initial appearance in federal court there yesterday. He will next appear in federal court in San Francisco. After being arrested and making his initial appearance last week, Shkurkin is scheduled to appear before Judge LaPorte for arraignment on Oct. 6, 2009, at 9:30 a.m. He is currently released on bond.
Daniels and Washburn are each charged with conspiracy to commit mail and wire fraud, wire fraud, money laundering conspiracy and money laundering. Koivunen is charged with conspiracy to commit mail and wire fraud, money laundering conspiracy and money laundering. Rebegeneau is charged with conspiracy to commit mail and wire fraud. Shkurkin is charged with conspiracy to collect an extension of credit by extortionate means.
The charges of wire fraud and conspiracy to commit mail and wire fraud each carry a maximum penalty of 30 years in prison and a $1 million fine. The charges of money laundering and conspiracy to commit money laundering each carry a maximum prison sentence of 20 years and a fine of $500,000 or twice the value of the funds involved in the transfer. The extortion conspiracy charge carries a maximum prison sentence of 20 years and a fine of up to $250,000.
The case is being prosecuted by Assistant U.S. Attorneys Christine Wong and Peter B. Axelrod of the Northern District of California and Trial Attorney Krista Tongring of the Criminal Division’s Organized Crime and Racketeering Section. The case is being investigated by the FBI and the Internal Revenue Service.
Criminal Complaint
Indictment
Attorney General Establishes New State Secrets Policies and ProceduresRead the Press Release
Attorney General Eric Holder today issued a memorandum instituting new Department of Justice policies and procedures in order to ensure greater accountability in the government’s assertion of the state secrets privilege in litigation.
"This policy is an important step toward rebuilding the public’s trust in the government’s use of this privilege while recognizing the imperative need to protect national security," Holder said. "It sets out clear procedures that will provide greater accountability and ensure the state secrets privilege is invoked only when necessary and in the narrowest way possible."
Earlier this year, Attorney General Holder ordered senior Justice officials to conduct a review of the Department’s existing state secrets policies and procedures, including an internal evaluation of the pending cases in which the privilege had been invoked. The results of that internal review were shared with an interagency group comprised of officials from the Department and the intelligence community, which provided input into the formulation of the new policies and procedures. The new policy and procedures take effect October 1, 2009.
The Attorney General’s memorandum outlines several aspects of the new administrative process that increases accountability and oversight, including:
Facilitation of Court Review – The policy ensures that before approving invocation of the state secrets privilege in court, the Department must be satisfied that there is strong evidentiary support for it. In order to facilitate meaningful judicial scrutiny of the privilege assertions, the Department will submit evidence to the court for review.
Significant Harm Standard – The policy adopts a more rigorous standard to govern when the Department will defend assertions of the state secrets privilege in new cases. Under the new policy, the Department will now defend the assertion of the privilege only to the extent necessary to protect against the risk of significant harm to national security.
Narrow Tailoring of Privilege Assertions – Under this policy, the Department will narrowly tailor the use of the states secrets privilege whenever possible to allow cases to move forward in the event that the sensitive information at issue is not critical to the case. As part of this policy, the Department also commits not to invoke the privilege for the purpose of concealing government wrongdoing or avoiding embarrassment to government agencies or officials.
State Secrets Review Committee – A State Secrets Review Committee will be formed consisting of senior Department officials designated by the Attorney General who will evaluate any recommendation by the Assistant Attorney General of the relevant Division to invoke the privilege. The Committee would make its recommendation to the Associate Attorney General, who would review and refer to the Deputy Attorney General for a final recommendation to the Attorney General or his designee.
Approval by the Attorney General – The policy requires the approval of the Attorney General prior to the invocation of the states secret privilege, except when the Attorney General is recused or unavailable. Previously, the invocation of the state secrets privilege could be approved by the appropriate Assistant Attorney General
Referral to Inspectors General. The policy implements a referral process to relevant Offices of Inspector General whenever there are credible allegations of government wrongdoing in a case, but the assertion of state secrets privilege might preclude the case from moving forward.
Under the policy, the Department also commits to provide periodic reports on all cases in which the privilege is asserted to the appropriate oversight Committees in Congress.
Policies and Procedures Governing Invocation of the State Secrets Privilege
Texas Man Sentenced to 76 Months in Prison for Travel with Intent to Engage in Sex with MinorsRead the Press Release
Patrick Cochran, 47, of Lake Jackson, Texas, was sentenced late on Monday in Phoenix to 76 months in prison for travel with intent to engage in sex with minors and possession of child pornography.
In addition to the prison term, Cochran was sentenced to lifetime supervised release by U.S. District Judge Stephen M. McNamee of the District of Arizona.
Cochran was indicted on Dec. 5, 2007, in Phoenix on two counts of travel with intent to engage in a sexual act with a minor. According to allegations contained in the indictment, Cochran paid a deposit and traveled to a pre-arranged meeting spot in Arizona in order to go on what he believed would be a tour of Mexico that would offer him the opportunity to have sexual contact with two boys aged 8 and 13. In reality, the tour was an undercover operation run by the Department of Homeland Security’s Immigration and Customs Enforcement (ICE).
Cochran was indicted on Jan. 20, 2009, in Houston on one count of possession of child pornography and one count of destruction of records. According to court documents, search warrants were executed at Cochran’s residence near Houston and child pornography was discovered on digital media seized from his home. Additionally, according to the court documents, when ICE agents returned to Cochran’s home to recover his computer, he told them he had thrown it away.
The Texas case against Cochran was transferred to Arizona for plea and sentencing. Cochran pleaded guilty on May 5, 2009, to one count of travel with intent to engage in sex with minors and one count of possession of child pornography. According to the plea agreements, Cochran admitted to arranging and paying to be taken to Mexico in order to have sex with two boys. Further, Cochran admitted to possessing more than 600 images of child pornography.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The case was prosecuted by Trial Attorney James Silver of CEOS, with assistance from Senior Litigation Counsel Vincent Q. Kirby of the District of Arizona and Assistant U.S. Attorney Robert Stabe of the Southern District of Texas. ICE conducted the investigation.
ICE maintains "Operation Predator," an ongoing initiative to protect children from sexual predators, including those who travel overseas for sex with minors, Internet child pornographers, criminal alien sex offenders and child sex traffickers. ICE encourages the public to report suspected child predators and any suspicious activity through its toll-free hotline at 1-866-347-2423. This hotline is staffed around the clock by investigators.
Last Defendant in Tennessee Islamic Center Burning Pleads GuiltyRead the Press Release
WASHINGTON – Eric Ian Baker pleaded guilty today in federal court in Nashville, Tenn., for his role in burning and vandalizing the Islamic Center of Columbia, Tenn., on Feb. 9, 2008. Baker was charged with violating civil rights that protect religious property and for using fire in the commission of a felony. Two other defendants, Michael Corey Golden and Jonathan Edward Stone, had previously pleaded guilty in November 2008 for their roles in the arson.
During the plea hearing, Baker admitted that he, Golden and Stone assembled Molotov cocktail incendiary devices, broke into the Islamic Center, ignited the devices and used them to completely destroy the mosque. He admitted to painting swastikas and the phrase "White Power" on the mosque in the course of the arson and that they acted because of the religious character of the property.
"The law protects the right of all Americans to worship where and how they choose without fear of violence or intimidation," said Loretta King, Acting Assistant Attorney General for the Civil Rights Division. "The Civil Rights Division will vigorously prosecute those who, through acts of terror, attempt to interfere with that right."
"This type of crime strikes at the heart of our civil rights and religious freedoms in America. I am very pleased that through local, state and federal cooperation all defendants responsible for this vile attack have been brought to justice," said U.S. Attorney Edward M. Yarbrough for the Middle District of Tennessee.
"Every Muslim who saw the news photos with the Swastika painted on the burned out Islamic center was victimized by this attack. Today, they can clearly see that American law enforcement stands strongly with them to guarantee their freedoms to worship and assemble," said ATF Nashville Field Division Special Agent in Charge James M. Cavanaugh.
"The FBI is committed to protecting the civil rights of all people through the enforcement of federal civil rights statutes," said FBI Memphis Division Special Agent in Charge My Harrison. "The destruction of any place of worship will not be ignored and the FBI will make every effort to bring those who commit such heinous acts to justice."
A date for Baker’s sentencing hearing will be scheduled at a later time. Stone and Golden are scheduled to be sentenced on Nov. 23, 2009. All three defendants face prison sentences of up to 30 years for damaging religious property and for using fire and an explosive device to commit a federal felony offense.
The case was investigated by the Columbia, Tenn., Police Department and special agents with the Bureau of Alcohol, Tobacco, Firearms and Explosives, Tennessee State Bomb and Arson and the FBI. The case is being prosecuted by Assistant U.S. Attorney Hal McDonough and Civil Rights Division Trial Attorney Jonathan Skrmetti.
Justice Department Obtains $134,000 in DiscriminationSettlement with Mobile Home Park in Daphne, AlabamaRead the Press Release
WASHINGTON – The Justice Department’s Civil Rights Division, the U.S. Attorney’s Office for the Southern District of Alabama and the Department of Housing and Urban Development (HUD) today jointly announced an agreement with the owners and managers of Pina’s Mobile Home Park in Daphne, Ala., to settle allegations of discrimination against families with children. Under the consent decree, approved today in federal court in Mobile, Ala., the defendants must pay up to $104,130 to victims of discrimination and an additional $30,000 to the government as a civil penalty.
The lawsuit, in which the U.S. Attorney’s Office served as lead counsel, originated from a charge filed by HUD on behalf of a woman who tried to rent at Pina’s Mobile Home Park, but was told she had too many children (three) to live in the park. Numerous other tenants were charged extra monthly fees for having children in their mobile homes. The complaint alleges that Arthur C. Witherington and Pina D. Witherington violated the Fair Housing Act when they discriminated against applicants and tenants with children under 18.
"Limiting how many children a tenant can have and charging extra fees for children are discriminatory, and families are protected from this kind of discrimination by the Fair Housing Act," said Acting Assistant Attorney General Loretta King of the Civil Rights Division. "The Civil Rights Division will vigorously enforce the law to prevent such discrimination."
"This District made Civil Rights litigation one of its highest priorities two years ago. We've assisted the Civil Rights Division on a number of cases and have served as lead litigators on two housing cases at the Division's request," said Acting U.S. Attorney Eugene Seidel for the Southern District of Alabama. "I commend Assistant U.S. Attorney Gary Moore for his skill and hard work as the lead attorney on this case. We will continue to work in cooperation with the Civil Rights Division, protecting the most vulnerable of our citizens is among the most important functions of the Justice Department."
"People do not lose their rights to fair housing because they have children," said John Trasviña, HUD Assistant Secretary for Fair Housing and Equal Opportunity. "HUD and the Department of Justice will defend their rights vigorously."
Fighting illegal housing discrimination is a top priority of the Justice Department. The federal Fair Housing Act prohibits discrimination in housing on the basis of race, color, religion, sex, familial status, national origin and disability.
More information about the Civil Rights Division and the laws it enforces is available at http://www.usdoj.gov/crt/ . Persons who believe they have experienced or witnessed unlawful housing discrimination may call the Housing Discrimination Tip Line at 1-800-896-7743, e-mail the Justice Department at [email protected], or contact HUD at 1-800-669-9777. More information about the Fair Housing Act can also be found at http://www.usdoj.gov/crt/housing/ or www.hud.gov/fairhousing.