District Not Recorded

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.

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  

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.

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 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

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.

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.

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.

WASHINGTON – The Department of Justice and the Federal Trade Commission (FTC) announced today that they will solicit public comment and hold joint public workshops to explore the possibility of updating the Horizontal Merger Guidelines that are used by both agencies to evaluate the potential competitive effects of mergers and acquisitions.

The goal of the workshops will be to determine whether the Horizontal Merger Guidelines accurately reflect the current practice of merger review at the Department and the FTC as well as to take into account legal and economic developments that have occurred since the last significant Guidelines revision in 1992.

The Horizontal Merger Guidelines outline the merger enforcement policy of the Department and the FTC. The Guidelines describe the analytical framework and specific standards normally used by the agencies in analyzing mergers. The Guidelines are intended to reduce the uncertainty associated with enforcement of the antitrust laws in the merger area. Merger Guidelines were first adopted in 1968 by the Department of Justice. They were substantially revised in 1982 and again in 1992, when they became the Horizontal Merger Guidelines, jointly issued by the Department and the FTC. The section on efficiencies was revised in 1997. The agencies also issued a detailed Commentary on the Horizontal Merger Guidelines in 2006.

The agencies will issue a set of questions about the current Guidelines and possible revisions. Following receipt of public comments and original research addressing those questions or other issues related to the Guidelines, the agencies will host a series of five workshops. The workshops, which are open to the public and press, will take place in December 2009 and January 2010. The first workshop will be held in Washington, D.C., on Dec. 3, 2009, followed by workshops in Chicago, New York City and San Francisco. A final workshop also will be held in Washington, D.C.

"In light of legal and economic developments that have occurred since the last major revision of the guidelines, it is an appropriate time for the antitrust agencies to conduct a review of the guidelines to determine whether any revisions should be made to better protect American consumers and businesses from anticompetitive mergers," said Christine A. Varney, Assistant Attorney General in charge of the Department’s Antitrust Division. "Having guidelines that offer more clarity and better reflect agency practice provides for enhanced transparency and gives businesses greater certainty when making merger decisions, resulting in a more competitive marketplace that benefits consumers."

"The bulk of the Merger Guidelines is over 17 years old," said FTC Chairman Jon Leibowitz. "The 1992 Guidelines explicitly stated that they would be revised from time to time. We think the time has come to do that."

The FTC will post a set of questions on its Web site later today to begin the discussion on the Guidelines. The agencies are interested in receiving written comments from attorneys, economists, academics, consumer groups, the business community and other interested parties. The questions can be found at: http://www.ftc.gov/bc/workshops/hmg/hmg-questions.pdf.

Horizontal Merger Guidelines topics to be discussed include: the overall method of analysis used by the agencies; the use of more direct forms of evidence of competitive effects; market definition; market shares and market concentration; unilateral effects, especially in markets with differentiated products; price discrimination; geographic market definition; the relevance of large buyers; the distinction between uncommitted and committed entry; the distinction between efficiencies involving fixed and marginal cost savings; the non-price effects of mergers, especially the effects of mergers on innovation; and remedies. Public comments are also invited on whether to incorporate aspects of the 2006 Commentary on the Horizontal Merger Guidelines into the Guidelines themselves.

Additional information about the date, time and exact location of the workshops will be provided at a later date. Speakers at the workshops will be drawn principally from those filing comments with the agencies. Interested parties should submit comments in accord with the procedures and time frame set forth on the FTC’s Web site.

 

WASHINGTON – The Justice Department today announced that it has reached a consent decree with the city of Bonita Springs, Fla., that, if approved in federal court in Fort Myers, Fla., will resolve the department’s allegations that the city discriminated against an African American employee in violation of Title VII of the Civil Rights Act of 1964. Title VII prohibits discrimination in employment on the basis of race, color, national origin, sex or religion.

The Justice Department’s complaint, filed in December 2008, alleged that the city subjected Joseph W. Johnson to a hostile work environment when, among other things, his immediate supervisor repeatedly used racial slurs and epithets to refer to Johnson and other minorities using a recreational facility where Johnson works running a youth basketball program. The complaint further alleges that white coworkers also used racial slurs and epithets to refer to Johnson. Despite Johnson’s complaints to city management about racial harassment in his workplace, the city failed to take appropriate action to remedy the situation, according to the complaint.

Under the terms of the consent decree, Bonita Springs must provide Johnson with $25,000 in compensatory monetary relief. The decree also requires the city to modify its anti-discrimination policy to include a specific process governing complaints of discrimination in the workplace. In addtion, the city must train its supervisors to ensure that they properly handle future complaints of racial discrimination.

"Racial slurs and epithets should not be tolerated anywhere, and especially not in the workplace," said Loretta King, Acting Assistant Attorney General for the Civil Rights Division. "Title VII protects employees from having to suffer racially hostile work environments, and employers cannot allow these racially divisive environments to fester. If employers do not put a halt to racially hostile conduct, they will face liability under Title VII."

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

WASHINGTON - The United States has asked a federal court in Lincoln, Neb., to bar Donald Ondrak, a Lexington, Neb., CPA, from preparing tax returns, the Justice Department announced today. According to the government complaint in the case, Ondrak’s firm, Don Ondrak PC, prepares federal income tax returns for customers that unlawfully understate income and employment tax liabilities by under-reporting income, overstating expenses and claiming improper deductions for non-deductible personal expenses.

The government complaint also accuses Ondrak of helping clients use sham entities and bogus transactions in order to fraudulently understate their tax liabilities. According to the complaint, the Internal Revenue Service has examined approximately 400 returns that Ondrak prepared and found that a significant number of them understated the customer’s tax liability. The complaint estimates that the tax loss from Ondrak’s alleged misconduct between 2004 and 2007 could be in the tens of millions of dollars.

In the past decade, the Justice Department has obtained injunctions against more than 425 tax preparers and tax-fraud promoters. Information about these cases is available on the Justice Department’s Tax Division Web site

WASHINGTON - A federal court has permanently barred Wayne Perry, a Macon, Ga., man, and his tax preparation firms, Premier Choice Inc. and Perry Tax Services, from preparing federal tax returns, the Justice Department announced today. Perry agreed to the injunction.

The government’s complaint alleged that Perry fraudulently claimed fuel tax credits for customers who were not entitled to them. The fuel tax credit is available only to taxpayers who operate farm equipment or off-highway business vehicles. Perry allegedly claimed absurdly large credits by falsely reporting purchases of huge quantities of gasoline where, in most cases, the cost of the gasoline was greater than the customers’ annual income. Perry had prepared over 6,300 federal tax returns since 2004, according to the government.

Fuel credit scams were on last year’s IRS list of the Dirty Dozen Tax Scams. In the past few years the Justice Department has obtained injunctions shutting down many tax preparers who claim the phony credits on customers’ returns.

In the past decade, the Justice Department’s Tax Division has obtained more than 425 injunctions against tax fraud promoters and 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.

Associate Attorney General Tom Perrelli announced today that the Department of Justice is awarding more than $236 million in Recovery Act and Fiscal Year 2009 public safety funding to criminal justice initiatives in Indian Country nationwide. The vital support to tribal communities includes more than $224 million in Recovery Act funding to construct and renovate prisons and jails in Indian Country and nearly $12 million to enhance and improve the juvenile justice systems for American Indian and Alaskan Native youth throughout the country.

 

 

 

The Justice Department official is in Albuquerque for the second of two working sessions with tribal leadership and law enforcement experts leading up to the Attorney General’s Tribal Nations Listening Conference on October 28-29, 2009, part of an ongoing Justice Department initiative to increase engagement, coordination and action on tribal justice in Indian Country.

 

"This week’s session is another step forward, but we have many steps to go in what I know will be a long partnership with tribal communities as the Department of Justice continues to take action on public safety issues in Indian Country, " said Associate Attorney General Perrelli. "None of these resources will matter if we do not direct them properly and at the issues that matter. The Department may be able to provide funding, but only by working together can we make sure tribal communities get what they need."

 

More than $224 million will be administered by the Office of Justice Programs (OJP) through the Correctional Facilities on Tribal Lands Program. The program provides resources to allow eligible American Indian tribes and Alaska Native villages to construct or renovate correctional facilities on tribal lands, with consideration given to the detention bed space needs and the violent crime statistics of the applicant tribe or village. A listing of all recipients of the Recovery Act Correctional Facilities on Tribal Lands Awards is available at http://www.ojp.gov/recovery/Tribalcorrectional_Awards.htm .

 

The 2009 Tribal Youth Program is awarding more than $11.96 million in support of enhanced tribal efforts to prevent and control delinquency and improve the juvenile justice system for American Indian/Alaskan Native youth. A major focus of the program is providing youth with mental health services. A listing of all recipients of the 2009 Tribal Youth Program awards is available at http://www.ojp.gov/funding/FY09Awards.htm .

 

 

 

 

Two individuals in Colorado and one individual in New York have been arrested on charges of making false statements to federal agents in an ongoing terror investigation.

FBI agents in Colorado arrested Najibullah Zazi, 24, a resident of Aurora, Colo., and legal permanent resident from Afghanistan, and his father Mohammed Wali Zazi, 53, a resident of Aurora and a naturalized U.S. citizen from Afghanistan. In addition, FBI agents in New York arrested Ahmad Wais Afzali, 37, a resident of Flushing, N.Y., and a legal permanent resident from Afghanistan.

Each of the defendants has been charged by criminal complaint with knowingly and willfully making false statements to the FBI in a matter involving international and domestic terrorism. Najibullah Zazi and Mohammed Zazi are scheduled to make their initial appearances on Monday in federal court in the District of Colorado. Ahmad Afzali is scheduled to make his initial appearance on Monday in federal court in the Eastern District of New York. If convicted, each faces a potential eight years imprisonment.

"The arrests carried out tonight are part of an ongoing and fast-paced investigation. It is important to note that we have no specific information regarding the timing, location or target of any planned attack.  As always, however, the American people should remain vigilant and report any suspicious activities to their local authorities," said David Kris, Assistant Attorney General for National Security. "I would like to thank the many agents, analysts and attorneys who are working extremely hard on this important matter."

According to affidavits filed in support of the three criminal complaints, the FBI is investigating several individuals in the United States, Pakistan and elsewhere, relating to a plot to detonate improvised explosive devices in the United States.

Records from U.S. Customs and Border Protection (CBP) reflect that, on Aug. 28, 2008, Najibullah Zazi flew to Peshawar, Pakistan from Newark International Airport via Geneva, Switzerland and Doha, Qatar. CBP records further reflect that Najibullah Zazi traveled from Peshawar to John F. Kennedy International Airport on or about Jan. 15, 2009.

According to the affidavits, on or about Sept. 9, 2009, FBI agents observed Najibullah Zazi depart his residence in Colorado in a rented car. He drove to New York City, arriving the following day, and spent the night at a residence in Flushing, Queens ("the Queens Residence.")

On Sept. 10, 2009, New York City Police Department (NYPD) detectives met with defendant Afzali, whom the NYPD had utilized as a source in the past. According to the affidavits, the detectives questioned Afzali about Najibullah Zazi and others and showed him photographs of Najibullah Zazi and others. Afzali allegedly told the detectives he recognized Najibullah Zazi and several of the men in the photographs.

According to affidavits, on Sept. 11, 2009, defendant Mohammed Zazi placed a call to Afzali which lasted approximately 20 minutes. That same day, the FBI lawfully intercepted a phone conversation between Mohammed Zazi and his son, Najibullah Zazi. An affidavit alleges that, during the conversation, Mohammed Zazi told his son that he had spoken to Afzali who had informed him about being visited by law enforcement and shown photographs. Mohammed Zazi told his son that Afzali would call him and he advised his son to speak with Afzali "before anything else," according to affidavits.

In the midst of this phone call, Najibullah Zazi allegedly received a call from Afzali, who discussed his meeting with law enforcement the day before. According to a draft summary of the transcription, Afzali allegedly stated: "I was exposed to something yesterday from law enforcement. And they came to ask me about your characters." Afzali also allegedly asked Najibullah Zazi about his last trip to Pakistan and added, "Listen, our phone call is being monitored."

According to the affidavits, in another legally intercepted phone conversation on Sept. 11, 2009, Najibullah Zazi told Afzali that his car had been stolen and that he feared he was being "watched." Afzali allegedly asked if there was any "evidence in his car," and Najibullah Zazi said no.

That same day, FBI agents conducted a legally authorized search of Najibullah Zazi’s rental car, which was parked near the Queens residence. During the search, agents found a laptop computer containing a jpeg image of nine-pages of handwritten notes. According to the affidavits, the notes contain formulations and instructions regarding the manufacture and handling of initiating explosives, main explosives charges, explosives detonators and components of a fuzing system. On Sept. 12, 2009, Najibullah Zazi flew from La Guardia Airport in New York to Denver.

On Sept. 16, 2009, FBI agents interviewed Najibullah Zazi in Denver. According to an affidavit, when he was asked about and shown handwritten notes regarding explosives found on his laptop computer, Najibullah Zazi falsely asserted that he had never seen the document before and stated he had not written the notes.

On Sept. 17 and 18, 2009, Najibullah Zazi was further interviewed by the FBI in Denver. According to affidavits, Najibullah Zazi admitted in the interviews that during his 2008 trip to Pakistan, he attended courses and received instruction on weapons and explosives at an al-Qaeda training facility in the Federally Administered Tribal Areas (FATA) of Pakistan.

The affidavits allege that, on Sept. 17, 2009, Afzali was interviewed by authorities in New York where he falsely asserted in a written statement that he did not tell Najibullah Zazi or Mohammed Zazi that authorities had approached him seeking information about Najibullah Zazi. According to the affidavits, Afzali also falsely asserted that he never told Najibullah Zazi that they were being monitored on the phone and that he never asked Najibullah Zazi about evidence in his car.

The affidavits further allege that, on Sept. 16, 2009, Mohammed Zazi was interviewed by the FBI in Denver where he was asked whether anyone had called him and told him about his son’s activities and any trouble regarding his son. According to the affidavits, Mohammed Zazi falsely stated that he had never called anyone in New York other than his son and he had never received a call from anyone in New York. He allegedly revised his statement to say he had received one call from an individual who informed him that his son had missed his flight. According to the affidavits, Mohammed Zazi was later asked if he knew anyone by the name of Afzali and he said he did not.

These prosecutions are being handled by the U.S. Attorney’s Offices for the Eastern District of New York and the District of Colorado, with assistance from 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 criminal complaints contain mere allegations and a defendant is presumed innocent until proven guilty.

The Department of Justice today advised the U.S. District Court for the Southern District of New York that while it should not accept the class action settlement in The Authors Guild Inc. et al. v. Google Inc. as proposed due to concerns of the United States regarding class action, copyright and antitrust law, the parties should be encouraged to continue their productive discussions to address those concerns. In its statement of interest filed with the court, the Department stated:

"Given the parties’ express commitment to ongoing discussions to address concerns already raised and the possibility that such discussions could lead to a settlement agreement that could legally be approved by the Court, the public interest would best be served by direction from the Court encouraging the continuation of those discussions between the parties and, if the Court so chooses, by some direction as to those aspects of the Proposed Settlement that need to be improved. Because a properly structured settlement agreement in this case offers the potential for important societal benefits, the United States does not want the opportunity or momentum to be lost."

In its filing, the Department proposed that the parties consider a number of changes to the agreement that may help address the United States’ concerns, including imposing limitations on the most open-ended provisions for future licensing, eliminating potential conflicts among class members, providing additional protections for unknown rights holders, addressing the concerns of foreign authors and publishers, eliminating the joint-pricing mechanisms among publishers and authors, and, whatever the settlement’s ultimate scope, providing some mechanism by which Google’s competitors can gain comparable access.

The settlement agreement between Google and the authors and publishers aims to resolve copyright infringement claims brought against Google by the Authors Guild and five major publishers in 2005 raised by Google’s efforts to digitally scan books contained in several libraries and make them searchable on the Internet. The District Court’s hearing on the proposed settlement is scheduled to take place on October 7, 2009.

Cover Letter

Statement of Interest

WASHINGTON – The Justice Department today announced a settlement that, pending court approval, will resolve allegations that the GuideOne Mutual Insurance Company and two authorized agents discriminated because of religion when they advertised special benefits and discounts only to "churchgoers" and "persons of faith." Under the settlement, the defendants must pay a total of $29,500 to three victims of discrimination, an additional $45,000 to the government as a civil penalty and stop the alleged discriminatory practices.

The complaint, filed today in the U.S. District Court for the Western District of Kentucky in conjunction with a proposed consent decree, alleges that the defendants offered a special endorsement to their homeowners and renters insurance policies at no extra charge called FaithGuard, which provides special benefits and discounts only to "churchgoers" and "persons of faith." GuideOne offered the FaithGuard endorsement in at least 19 states and used an application form that included a space for applicants to indicate their "denomination."

"Discrimination on the basis of someone’s religious faith is prohibited by the Fair Housing Act," said Loretta King, Acting Assistant Attorney General for the Civil Rights Division. "All individuals have the right to secure homeowners and renters insurance without regard to their religious beliefs, and the Civil Rights Division will continue to ensure those rights are protected."

The lawsuit also alleges that the defendants’ conduct constitutes a pattern or practice of discrimination or a denial of rights to a group of persons. The suit arose as a result of complaints filed with the U.S. Department of Housing and Urban Development (HUD) by two individuals, one an atheist and one an agnostic, and by the Lexington Fair Housing Council, a non-profit fair housing organization. After investigating the complaints, HUD issued a charge of discrimination, and after one of the complainants elected to have the case heard in federal court, the case was referred to the Justice Department.

"We thank the Justice Department and the parties for reaching an equitable settlement that advances the principles of equality and non-discrimination in access to homeowners and renters insurance," said John Trasviña, HUD Assistant Secretary for Fair Housing and Equal Opportunity.

The settlement also requires GuideOne to stop selling homeowners and renters insurance policies with the FaithGuard endorsement, train GuideOne insurance agents on their responsibilities under the Fair Housing Act and provide periodic reports to the Justice Department.

The 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.

WASHINGTON – A federal grand jury in San Diego has indicted an additional eight defendants for conspiracy to cheat a total of 11 casinos across the country, Assistant Attorney General for the Criminal Division Lanny A. Breuer and U.S. Attorney for the Southern District of California Karen P. Hewitt announced today.

A one-count indictment, handed up in the Southern District of California on Sept. 1, 2009, and unsealed on Sept. 15, 2009, charges seven defendants each with one count of conspiracy to commit several offenses against the United States, including conspiracy to steal money and other property from Indian tribal casinos, and conspiracy to travel in interstate and foreign commerce in aid of racketeering.  Defendants charged in this indictment include Jason Cavin, Connie Marie Holmes, Brandon Pete Landry, Nedra Fay Landry, Geraldo Montaz, Jesus Rodriguez and Mike Waseleski.

According to the indictment, from approximately March 2002 through July 2006, the defendants and co-conspirators allegedly formed and participated in a conspiracy, defined in the indictment as the "Tran Organization," to cheat at gambling in casinos across the United States.  The indictment lists 10 casinos that were allegedly targeted by members of the conspiracy, including five casinos that are owned and operated by Indian tribes. 

An additional defendant, Jimmy Ha, was charged in a superseding indictment that was returned in the Southern District of California on Sept. 1, 2009, and unsealed on Sept. 3, 2009, for an alleged conspiracy, defined in the indictment as the "Tran Organization," to cheat the Barona Valley Ranch Casino and Resort in Lakeside, Calif., in 2005.  James Root, who was previously indicted in connection with this case, was also charged in the superseding indictment.

If convicted on the conspiracy charge, defendants face a maximum five-year prison sentence.

According to both indictments, the defendants and others executed a "false shuffle" cheating scheme at casinos during blackjack and mini-baccarat games.  The indictments allege that members of the criminal organization bribed casino card dealers and supervisors to perform false shuffles during card games, thereby creating "slugs" of un-shuffled cards.  After tracking the order of cards dealt in a card game, a member of the organization would signal to the card dealer to perform a "false shuffle," and then members of the group would bet on the known order of cards when the slug appeared on the table.  By doing so, members of the conspiracy won thousands of dollars during card games.

There were two previous indictments in connection with the Tran Organization’s alleged casino-cheating conspiracy.

Nineteen alleged members of the Tran Organization were charged in a three-count indictment returned in San Diego on May 22, 2007, and unsealed on May 24, 2007, including Phuong Quoc Truong, Van Thu Tran, Tai Khiem Tran, Anh Phuong Tran, Phat Ngoc Tran, Martin Lee Aronson, Liem Thanh Lam, George Michael Lee, Tien Duc Vu, Son Hong Johnson, Barry Wellford, Willy Tran, Han Truong Nguyen and Ha Thuy Giang. Each were charged with one count of conspiracy to participate in the affairs of a racketeering enterprise, defined in the indictment as the Tran Organization; one count of conspiracy to commit several offenses against the United States, including conspiracy to steal money and other property from Indian tribal casinos; and one count of conspiracy to commit money laundering. 

Eleven additional defendants were charged in a separate indictment for conspiring to commit offenses on behalf of the Tran Organization.  A one-count indictment, unsealed in the Southern District of California on Sept. 11, 2008, charged Bryan Arce, Don Man Duong, Hogan Ho, Thang Viet Huynh, Outtama Keovongsa, Leap Kong, Qua Le, Khunsela Prom, James Root, Darrell Saicocie, and Dan Thich each with one count of conspiracy to commit several offenses against the United States, including conspiracy to steal money and other property from Indian tribal casinos, and conspiracy to travel in interstate and foreign commerce in aid of racketeering.

To date, 31 defendants have pleaded guilty to charges relating to the casino-cheating conspiracy including: Phuong Quoc Truong, Tai Khiem Tran, Anh Phuong Tran, Phat Ngoc Tran, Martin Lee Aronson, Liem Thanh Lam, George Michael Lee, Tien Duc Vu, Son Hong Johnson, Barry Wellford, John Tran, Willy Tran, Tuan Mong Le, Duc Cong Nguyen, Han Truong Nguyen, Roderick Vang Thor, Sisouvanh Mounlasy, Navin Nith, Renee Cuc Quang, Ui Suk Weller, Phally Ly, Khunsela Prom, Hop Nguyen, Hogan Ho, Darrell Saicocie, Bryan Arce, Qua Le, Outtama Keovongsa, Leap Kong, Thang Viet Huynh, and Don Man Duong. These defendants admitted to targeting, with the aid of co-conspirators, a combined total of approximately 26 casinos in the United States and Canada during the course of the conspiracy, including:

1) Beau Rivage Casino in Biloxi, Miss.; 2) Casino Rama, in Orillia, Ontario, Canada; 3) Foxwoods Resort Casino in Ledyard, Conn.; 4) Gold Strike Casino in Tunica, Miss.; 5) Horseshoe Casino in Bossier City, La.; 6) Horseshoe Casino and Hotel in Tunica, Miss.; 7) Isle of Capri Casino in Westlake, La.; 8) Majestic Star Casino in Gary, Ind.; 9) Mohegan Sun Resort Casino in Uncasville, Conn.; 10) Palace Station Casino in Las Vegas; 11) Resorts East Chicago Hotel and Casino in East Chicago, Ind.; 12) Sycuan Casino in El Cajon, Calif.
13) Cache Creek Indian Bingo and Casino in Brooks, Calif.; 14) Emerald Queen Casino in Tacoma, Wash.; 15) Imperial Palace Casino in Biloxi, Miss.; 16) Argosy Casino in Baton Rouge, La.; 17) Trump 29 Casino in Coachella, Calif.; 18) Isle of Capri Casino in Bossier City, La.; 19) Agua Caliente Casino in Rancho Mirage, Calif.; 20) Spa Resort Casino in Palm Springs, Calif.; 21) Pechanga Resort and Casino in Temecula, Calif.; 22) L'Auberge du Lac Casino in Lake Charles, La.; 23) Nooksack River Casino in Deming, Wash.; 24) Barona Valley Ranch Casino and Resort in Lakeside, Calif.; 25) Caesars Indiana Hotel and Casino in Elizabeth, Ind.; 26) Monte Carlo Resort and Casino in Las Vegas.

Two other defendants, Ha Thuy Giang and Tammie Huynh, pleaded guilty to tax offenses stemming from the investigation, and Khai Hong Tran admitted to the offenses alleged in the 2007 U.S. indictment when he pleaded guilty to casino cheating offenses in Canada.

The prosecution of the case is led by the Criminal Division’s Organized Crime and Racketeering Section.  Department of Justice Trial Attorneys Joseph K. Wheatley and Robert S. Tully are prosecuting the case in San Diego.  The case is being investigated by the FBI’s San Diego Field Office, the Internal Revenue Service-Criminal Investigation, the San Diego Sheriff’s Department and the California Department of Justice’s Bureau of Gambling Control.  The investigation has received assistance from federal, state, tribal and foreign authorities, including: the Ontario, Canada, Provincial Police; the National Indian Gaming Commission; the U.S. Attorney’s Office for the Western District of Washington; FBI Resident Agencies in Gulfport, Miss., Tacoma, and Toledo, Ohio; the Indiana State Police; the Rumsey Rancheria Tribal Gaming Agency; the Sycuan Gaming Commission; the Barona Gaming Commission; the Mississippi Gaming Commission and the Washington State Gambling Commission. 

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

Anyone with information relating to the investigation may contact the FBI’s San Diego Field Office at (858) 565-1255.

Indictment

Superseding Indictment

Indictment

Almighty Latin King and Queen Nation (ALKQN) member Marie Chavez, aka "Shorty," wife of an alleged ALKQN leader, Jose Nava, aka "Chino," was sentenced today, while her brother-in-law Luis Nava, aka "Flaco," re-entered a guilty plea to a superseding indictment that charged them and 14 others with various offenses related to alleged narcotics and weapons trafficking, as well as violent activities throughout Texas.

Marie Chavez, 28, of Lubbock, Texas, was sentenced today to 188 months in prison by U.S. District Judge Sam R. Cummings in U.S. District Court in Lubbock. Chavez pleaded guilty on June 15, 2009, to the superseding indictment, which charged her with one count of conspiracy to distribute and possess with intent to distribute five kilograms or more of cocaine and 100 kilograms or more of marijuana, as well as one count of possession with intent to distribute 500 grams or more of cocaine. Chavez has been in custody since her arrest in December 2008.

Luis Nava today re-entered his guilty plea to the superseding indictment, which charged him with conspiring to distribute and possess with intent to distribute five kilograms or more of cocaine and 100 kilograms or more of marijuana. Nava was scheduled to be sentenced on Aug. 28, 2009, after previously pleading guilty on May 21, 2009. During that sentencing hearing, the court granted a request by Nava to withdraw his guilty plea and scheduled a trial for Oct. 5, 2009. With today’s re-entered plea, Nava’s sentencing is now scheduled for Oct. 2, 2009. Nava has been in custody since his arrest in December 2008.

According to documents filed in court, Chavez and Nava admitted they were members of a conspiracy that included Jose Robledo Nava; Reynaldo Nava, aka "Rat;" Robert Allen Ramirez, aka "Nesyo;" Carol Ann Rivas Nava; Cecily Dominique Juarez; Jesus Martinez, aka "Solid;" David Hellums, aka "Cutthroat;" James Johnathan Cole, aka "Blitz;" Eduardo Daniel Mares, aka "Pitt;" Gabriel Lee Gonzales; Michael Conde, aka "Psycho;" John Guzman; and others, and that from 2001 until December 2008, they directly or indirectly agreed to distribute, and possess with intent to distribute, cocaine and marijuana.

Chavez and Nava admitted that the overall scope of the conspiracy involved at least five kilograms of cocaine and 100 kilograms of marijuana. Chavez and Nava also admitted that they and their co-defendants intentionally and knowingly possessed with the intent to distribute cocaine and marijuana, and distributed cocaine and marijuana to others. According to the indictment, they acquired the cocaine and marijuana from Mexico and brought it to the South Texas region, where it was packaged, stored and transported to Big Spring, Lubbock and Midland, Texas, for further distribution.

Aside from these two defendants, 13 defendants have also entered guilty pleas, with three sentenced thus far. The five remaining defendants, including Jose Robledo Nava, the alleged ALKQN leader in Texas, are pending trial. Jose Robledo Nava, along with James Johnathan Cole, Robert Allen Ramirez, Gabriel Lee Gonzales and Eduardo Daniel Mares, are charged in the indictment with the May 4, 2008, murders of Valerie Garcia and Michael Cardona in Big Spring.

The case is being investigated by the National Gang Targeting, Enforcement and Coordination Center, the Organized Crime Drug Enforcement Task Force, the U.S. Drug Enforcement Administration, the FBI, U.S. Immigration and Customs Enforcement; the Bureau of Alcohol, Tobacco, Firearms and Explosives; the El Paso Intelligence Center; U.S. Customs and Border Protection; the U.S. Marshals Service; the Texas Department of Public Safety; the Police Departments of Lubbock, Midland, Houston, San Antonio and Big Spring, Texas; Lubbock County Sheriff’s Office; and the Howard County District Attorney’s Office.

Trial Attorneys Cody L. Skipper and Joseph A. Cooley of the Criminal Division’s Gang Unit and Assistant U.S. Attorney Jeffrey R. Haag of the Lubbock, Texas, U.S. Attorney’s Office are prosecuting the case.

WASHINGTON - Teresa Vogt, a resident of Anaheim, Calif., pleaded guilty on Sept. 15, 2009, to one count of obstruction of justice before U.S. District Court Judge Dale S. Fischer in Los Angeles, the Justice Department and Internal Revenue Service (IRS) announced.

Vogt and eight co-defendants were indicted in May 2005 on tax fraud, conspiracy, money laundering and other charges related to the operation of the Genesis Fund. According to the indictment, Vogt and her co-defendants operated the fund, a bogus foreign currency exchange investment fund that operated as a Ponzi scheme from May 1998 to June 2002. The Genesis Fund received millions of dollars of investments.

The defendants, as well as Genesis Fund literature, falsely claimed that investors received returns of 4% monthly; however, investments were actually used to make "profit" distributions to the defendants and early investors. Vogt worked as the fund’s primary administrator and later as its manager.

According to the plea agreement, Vogt has agreed to cooperate with the government and is expected to testify at a trial of her co-defendants. Vogt admitted that she and others received a grand jury subpoena and that some records which should have been produced were not. Specifically, Vogt and others shipped nineteen boxes of documents to Costa Rica and did not produce these records to the government.

Vogt faces a maximum prison sentence of ten years and a $250,000 fine. Judge Fischer set the sentencing for March 22, 2010.

The trial of the remaining five defendants on tax fraud and conspiracy charges is set to begin before Judge Fischer on Oct. 21, 2009. A second trial on additional charges related to the Ponzi scheme is scheduled to begin in March 2010.

In August 2009, co-defendant Victor Preston, an attorney, pleaded guilty to conspiring to defraud the United States in relation to the scheme. According to the plea agreement, Preston, formerly of Costa Rica, admitted to assisting two investors in the Genesis Fund evade income taxes related to the sale of their business. Preston further admitted that he did not accurately report all of his individual income on his tax returns.

Acting Assistant Attorney General John A. DiCicco of the Justice Department’s Tax Division thanked the IRS’s Criminal Investigation Division who investigated the case, as well as Tax Division trial attorneys Lori A. Hendrickson, Ellen M. Quattrucci and Danny N. Roetzel who are prosecuting the case. Mr. DiCicco also thanked the U.S. Attorney’s Office in Los Angeles for their assistance in the prosecution.

WASHINGTON - James A. Mattatall, of Torrance, Calif., was convicted Tuesday of criminal contempt by a federal district court in Los Angeles, the Justice Department announced. Mattatall’s conviction relates to his violations of a 2004 permanent injunction that barred him from preparing tax returns for others and representing persons before the IRS.

During trial, the government presented evidence showing that Mattatall violated the injunction by continuing to prepare tax returns and represent customers before the Internal Revenue Service (IRS). Additionally, Mattatall attempted to evade detection by not signing the returns as the paid preparer and by using an alias when representing customers.

At trial, Mattatall argued that the terms "taxpayer" and "representation" were vague in the injunction and that he did not willfully violate it. However, U.S. District Court Judge Dean Pregerson, having labeled Mattatall as a "tax protestor" in his previous orders, rejected Mattatall’s defense, finding that he was playing word games and taking citations from the federal tax code out of context.

The court found that its injunction was clear, that Mattatall was well aware of it, and that he willfully violated it. At the conclusion of the trial, the judge cautioned Mattatall to re-evaluate his positions on the tax laws, warning him that he faces the possibility of a very tragic turn in his life if he continues down his current path.

Sentencing is set for Nov. 23, 2009, in Los Angeles. Mattatall faces a maximum sentence of six months in prison.

"The court’s guilty verdict shows there are serious criminal consequences to violating an injunction," said John A. DiCicco, Acting Assistant Attorney General of the Justice Department’s Tax Division. "The Justice Department is committed to prosecuting enjoined tax preparers and promoters who violate the terms of their injunction."

Acting Assistant Attorney General DiCicco thanked Justice Department trial attorney Michael Pahl and Assistant U.S. Attorney Robert Conte, who jointly handled the case.

Thomas S. Pendleton of Wilmington, Del., was found guilty today of traveling in foreign commerce to engage in illicit sexual conduct with a minor under the age of 16.

Pendleton, 66, was convicted by a federal jury after a three-day trial. He was indicted on the charge on July 24, 2008, after being deported back to the United States from Germany in January 2008.

Pendleton was convicted on April 15, 2009, by a separate jury sitting in the District of Delaware for failing to register as a sex offender. The Honorable Chief Judge Gregory M. Sleet presided over both trials and is scheduled to sentence Pendleton on Dec. 17, 2009. He faces up to 30 years in prison on the sex tourism charge and up to 10 years in prison for failing to register as a sex offender.

Evidence introduced at trial established that Pendleton traveled from the United States to Germany in November 2005, where he befriended the 14-year-old victim, who at the time was living in an orphanage. During the next several weeks, the defendant cultivated a friendship with the victim and made arrangements to go biking with him in May 2006, just after the victim turned 15 years old. Testimony at trial established that while on the bike trip, the victim woke up to find Pendleton fondling him. The victim and a witness from the German camp site where the crime occurred traveled to the United States to testify.

The jury was also allowed to hear testimony from a former victim of Pendleton who was similarly abused on two biking trips that took place in Virginia and New Jersey in 1989, when that victim was 12. In addition to hearing testimony from the now 32-year-old victim, the jury also learned that the defendant was convicted of the offense committed in New Jersey.

This case was investigated by U.S. Immigration and Customs Enforcement and the U.S. Marshals Service. A computer forensic specialist from the High Tech Investigative Unit of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS) performed an analysis of a computer and other digital media seized from the defendant, and provided expert testimony at trial regarding his findings.

The case was prosecuted by Assistant U.S. Attorney Ilana Eisenstein of the U.S. Attorney’s Office for the District of Delaware and CEOS Trial Attorney Jennifer Toritto Leonardo.

WASHINGTON—The city of Jeffersonville, Ind., has agreed to make extensive improvements to its sewer systems that will significantly reduce the city’s longstanding sewage overflows into the Ohio River in a comprehensive Clean Water Act settlement with federal and state government, the Justice Department, the U.S. Environmental Protection Agency (EPA) and the state of Indiana announced today.

According to a consent decree filed today in federal court, the city is required to develop and implement a comprehensive plan to reduce, and where feasible, eliminate overflows into the Ohio River from its combined sewers by calendar year 2020 or 2025, depending on Jeffersonville’s financial health; implement a plan with specific actions to improve the capacity, management, operation, and maintenance of its sanitary sewer system to eliminate overflows of untreated sewage; and eliminate all discharge points within its sanitary sewer system.

According to the investigation, throughout the year, Jeffersonville’s sewer system is overwhelmed by rainfall, resulting in discharges of untreated sewage and overflows of sewage combined with storm water into the Ohio River, totaling millions of gallons each year. Under this settlement, the city will improve its sewer system to minimize, and in many cases, eliminate those overflows at a cost likely between $100 and $150 million.

"The federal Clean Water Act requires cities like Jeffersonville to eliminate or reduce their sewage overflows into the nation’s rivers, lakes and oceans," said John C. Cruden, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. "This settlement requires Jeffersonville to take steps to prevent sewage spills and overflows into the Ohio River. We’re pleased that the city has agreed to take these important steps that will improve water quality in the Ohio River and protect public health."

"EPA is committed to protecting health and the environment by bringing aging sewer systems into compliance with the Clean Water Act," said Bharat Mathur, EPA’s Acting Region 5 Administrator. "We are pleased that the city of Jeffersonville has committed to make improvements that will significantly improve water quality in the Ohio River."

"This was not an easy settlement to reach, but the agreement is fair to all sides. It has been very frustrating to all that wastewater flowed into the Ohio River and nearby streams after heavy rains because of aging infrastructure inadequate to the capacity," Indiana Attorney General Greg Zoeller said. "Violations of the Clean Water Act were all too frequent. The city is agreeing to uphold its environmental responsibilities, and ultimately the public – those who live and work near the Ohio River – will in the long run benefit from these improvements."

"IDEM partnered with U.S. EPA, the U.S. Attorney’s office, the Indiana Attorney General’s office and the city of Jeffersonville to reach an effective agreement for eliminating pollutants from Jeffersonville’s combined sewer system," said Commissioner Thomas Easterly of the Indiana Department of Environmental Management. "That agreement includes green infrastructure provisions, such as installing pervious pavers and a rain garden along the river front, which will serve as a model for other cities around the nation. This agreement will improve the quality of life for their community and others downstream."

In addition to improving its sewer system, Jeffersonville has agreed to pay the United States a civil penalty of $49,500 and the state of Indiana a civil penalty of $8,250, provided that Jeffersonville implements two environmental projects identified in the settlement that are designed to improve water quality in the city at a cost of more than $248,000.

The city of Jeffersonville is located in Clark County, Ind., on the north bank of the Ohio River, directly across the river from Louisville, Ky. Jeffersonville has a population of approximately 30,000. Of Jeffersonville’s total sewered area, 15 percent is served by combined sewers while 85 percent is served by separate sanitary sewers. The combined sewers are located in the older, downtown portion of Jeffersonville and lack sufficient capacity to transport all of the combined sewage that it receives to Jeffersonville’s wastewater treatment plant during rainfall events. As a result, Jeffersonville commonly discharges the combination of sewage and storm water through one or more of its 13 combined sewer overflow outfalls that discharge to the Ohio River.

In the past, the United States has reached similar agreements with numerous municipal entities across the country including Nashville, Tenn.; Mobile, Ala.; Knoxville, Tenn.; Toledo, Ohio; Hamilton County (Cincinnati), Ohio; Louisville, Ky.; Indianapolis, Ind.; Fort Wayne, Ind.; Ironton, Ohio; and the Sanitation District No. 1 in northern Kentucky.

The consent decree, lodged in the U.S. District Court for the District of Indiana, 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.

Timothy L. Lantz was sentenced today to 15 years in prison for transporting child pornography in interstate commerce and failing to update his sex offender registration in violation of the Adam Walsh Act.

Lantz, 57, was also sentenced by U.S. District Judge George C. Smith in Columbus, Ohio, to lifetime supervised release following his prison term, and was ordered to pay a $10,000 fine. Lantz pleaded guilty to the charges on May 4, 2009.

According to his plea agreement, Lantz, a convicted sex offender, fled the Columbus area in January 2007, days after members of the FBI Cybercrime Task Force searched his West Columbus apartment and seized multiple computers, hard drives and other media. Forensic analysis uncovered more than 9,000 images and 1,200 videos of child pornography on the computers and storage media.

An international search for Lantz ended in the Philippines in June 2008, when Philippine Immigration and Philippine National Police authorities arrested him without incident in the remote Kolambugan, Lanao Del Norte region. Philippine authorities turned Lantz over to the U.S. Department of State’s Diplomatic Security Service in Manila, and Deputy U.S. Marshals returned him to the United States, where he has since been in custody.

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 Assistant U.S. Attorney Deborah Solove of the Southern District of Ohio and CEOS Trial Attorney Mi Yung C. Park. The case was investigated by the U.S. Marshals Service, the FBI Columbus Cybercrime Task Force, the State Department’s Diplomatic Security Service and U.S. Embassy staff in Manila, as well as CEOS’ High Technology Investigative Unit.

WASHINGTON - A federal court has permanently barred Francis Kenneth (Frank) Albert of Sparks, Nev., from preparing federal income tax returns for others, the Justice Department announced today. The court found that Albert repeatedly engaged in fraudulent or deceptive conduct in preparing returns.

According to the government complaint in the case, Albert engaged in several different schemes while preparing returns. These included inventing fake businesses, fabricating expense deductions and fabricating charitable contribution deductions. The complaint alleged that Internal Revenue Service audits have revealed that Albert’s schemes have cost the government at least $1.1 million.

Since 2001, the Justice Department has obtained injunctions against more than 425 tax preparers and tax-fraud promoters. Information about these cases is available on the Justice Department Web site.

WASHINGTON – Odell Folks, of Brooklyn, N.Y., was sentenced to prison today by District Judge Carol Bagley Amon of the Eastern District of New York for his participation in a false tax return scheme, the Justice Department and Internal Revenue Service (IRS) announced. Folks, who pleaded guilty in March 2009 to mail fraud, a false claims conspiracy, and making and subscribing a false return, was sentenced to 77 months in prison and ordered to pay restitution of $489,292.

Folks, along co-defendants Tanya Smith, Keith Terry, and Sharon Smith, was indicted in November 2008 for a scheme to file false claims for refund with the IRS using names of clients of the New York City Human Resources Administration (HRA) and the Center for Employment Opportunities (CEO). According to the indictment, between approximately May 2003 and February 2005, the defendants participated in a scheme to defraud the IRS by submitting false income tax returns requesting refunds in the names of individuals who had not earned sufficient income to trigger the filing requirement.

According to the indictment and court records, Folks obtained the personal identifying information of individuals receiving public assistance and, without their knowledge, submitted to the IRS false returns claiming refunds in their names. Folks had the refund checks sent to the addresses of individuals who he paid to receive and provide him with the checks. Folks and Sharon Smith were employed as job counselors at CEO. HRA offers a wide range of social service programs to individuals receiving public assistance. CEO provides comprehensive employment services for persons with criminal records, including temporary jobs for individuals recently released from prison.

According to the indictment and court records, Tanya Smith and Keith Terry received the checks from Folks and Sharon Smith and deposited them into their personal bank accounts. Tanya Smith and Terry received a fee ranging from approximately $500 to $700 for each check that they negotiated. Folks and Terry failed to report the income that they received from the scheme on their own individual income tax returns.

Sharon Smith, of Bronx, N.Y., who pleaded guilty in April 2009 to the false claims conspiracy and mail fraud, is scheduled to be sentenced by Judge Amon on Oct. 14, 2009.

In August 2009, Judge Amon sentenced Tanya Smith, who pleaded guilty to the false claims conspiracy, to a term of imprisonment of 60 days and to three years supervised release with four months under monitored home detention. Tanya Smith was also ordered to pay restitution of $144,348.88. In August 2009, Judge Amon sentenced Keith Terry, who pleaded guilty to the false claims conspiracy and to filing a false tax return, to four years of probation with four months under monitored home detention and ordered him to pay restitution in the amount of $209,653.00.

John A. DiCicco, Acting Assistant Attorney General of the Justice Department’s Tax Division thanked the IRS Criminal Investigation Division office in Bridgeport, Conn., and the United States Postal Inspection Service in New Haven, Conn., who investigated the case, as well as Tax Division trial attorney Mark F. Daly and Assistant United States Attorney Shreve Ariail of the Eastern District of New York who prosecuted the case.

WASHINGTON — The former superintendent of a wastewater treatment facility in Rochester, Ind., was sentenced today in U.S. District Court in South Bend, Ind., to serve one year in prison for falsifying discharge monitoring reports that concealed violations of the Clean Water Act, the Justice Department announced.

 

 

Herbert L. Corn was sentenced to one year in prison on each of five counts to be served concurrently. Following the prison sentence, Corn was ordered to serve one year of supervised release, which includes three months of home detention, on each count to run concurrently.

On June 16, 2009, Corn pleaded guilty to a five-count felony information charging him with making false statements in discharge monitoring reports submitted to the Indiana Department of Environmental Management (IDEM). Corn admitted that from September 2004 and continuing through May 2007, he submitted at least five reports containing false data for treated water that was discharged from the Rochester Plant into Mill Creek, a tributary of the Tippecanoe River. He served as the former superintendent of the Rochester plant where he worked from 1986 until 2008.

"Today’s prison sentence sends a strong reminder to those who hold the public’s trust to provide accurate information in the course of their responsibilities," said John C. Cruden, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. "The prosecution in this case demonstrates the coordinated collaboration of federal, state and local officials to investigate and prosecute those violating the nation’s environmental laws."

 

"Accurate information about pollution discharged from the treatment plant is essential in order to protect both the citizens of Rochester and their environment," said Randall Ashe, Special Agent in Charge of EPA-Criminal Investigation Division. "Violators who submit false reports or bogus data undermine those efforts and they will be vigorously prosecuted."

"Certified wastewater operators are entrusted with the public health and must be held fully accountable to fulfill their duties, including honest and accurate reporting," said IDEM Commissioner Thomas Easterly. "IDEM inspectors work hard to identify and correct problems, and coordinate with our state and federal partners to ensure the protection of Hoosiers and our environment. We thank the staff of the U.S. Attorney’s Office, the U.S. Department of Justice, and the U.S. EPA’s criminal enforcement division in Chicago for their help in this case."

Under the federal Clean Water Act, which is administered and enforced by IDEM as well as the U.S. Environmental Protection Agency (EPA), before discharging the waste water it collects to Mill Creek, the Rochester plant must treat the water to meet concentration limits on certain pollutants as set forth in its permit. Three pollutants in the permit that have concentration limits are Escherichia Coli bacteria (E. Coli), Ammonia NH3-N and Carbonaceous Biological Oxygen Demand-5 (CBOD-5). The discharge of pollutants above the concentration limits for these pollutants is a violation of the permit and the Clean Water Act. The Rochester Plant is required to report and certify the results of its discharge sampling on a monthly basis to IDEM.

At sentencing, the court found that Corn made as many as 55 separate falsifications in reports from September 2004 and continuing through May 2007, in which he reported levels on discharge reports that purported levels of E. Coli, Ammonia NH3-N and CBOD-5 that were in compliance with the permit concentration limits, even though Corn knew that the levels were actually higher. Those reports were then submitted to IDEM. In addition, the court found that Corn’s conduct in falsifying discharge reports pre-dated September 2004, although the exact dates and times are unknown.

In addition to being superintendent of the Rochester plant, Corn possessed a state of Indiana Class III license as a waste water treatment operator. Corn also held the position of president of the Indiana Water Environment Association, a sewage industry trade group, and had received several awards for environmental achievements related to sewage treatment. In addition, Corn has taught courses on waste water treatment. As a result of the offense conduct, Corn’s Class III license has been revoked by IDEM.

 

 

The criminal charges arose from a criminal investigation jointly undertaken by the Criminal Investigation Division of the EPA and the IDEM Office of Criminal Investigation, which are part of the Northern District of Indiana Environmental Crimes Task Force. Members of the task force include:

• U.S. Attorney’s Office for the Northern District of Indiana
• Environmental Crimes Section of the Department of Justice
• EPA—Criminal Investigation Division
• Department of Homeland Security—U.S. Coast Guard Investigative Service
• Federal Bureau of Investigation
• U.S. Fish and Wildlife Service
• U.S. Department of Transportation—Office of Inspector General
• U.S. Department of Labor—Office of Inspector General
• Indiana Department of Environmental Management—Office of Criminal Investigations
• Indiana Department of Natural Resources—Law Enforcement Division
• Indiana Attorney General’s Office
• Indiana State Police

The Task Force encourages citizens in the Northern District of Indiana to report environmental crimes to 312-886-9872 or at the Web site http://www.epa.gov/compliance/complaints/index.html.

The case was prosecuted by Assistant U.S. Attorney Toi Denise Houston, Special Assistant U.S. Attorney David P. Mucha and Environmental Crimes Section Trial Attorney Gary N. Donner.

WASHINGTON – The Justice Department today announced that a federal grand jury in Miami returned a three-count indictment on Sept. 11, 2009, charging former Dade Correctional Institution (DCI) officers Cordell J. White and Christopher W. Bonnet, current DCI Sergeant Obe D. L’Bert, and former DCI inmate Larry T. Williams with violating, and conspiring to violate, the civil rights of other inmates at DCI.

The indictment alleges that on Oct. 26, 2008, defendants L’Bert and White arranged for defendant-inmate Williams, aka Monster, to assault another inmate, identified in the indictment as D.T. L’Bert and White allegedly moved D.T. to Williams’s cell and waited outside of the cell while Williams assaulted and injured D.T. The indictment further alleges that on Nov. 1, 2007, defendants White and Bonnet arranged for Williams to assault another inmate, identified in the indictment as F.H., then escorted Williams to F.H’s cell and waited outside of the cell while Williams assaulted and injured F.H.

An indictment is merely an accusation, and the defendants are presumed innocent unless proven guilty. If convicted, each defendant faces a maximum penalty of ten years in prison on each of the three felony civil rights charges.

This case was investigated by the FBI and the Florida State Department of Corrections, Inspector General’s Office; and is being prosecuted by Assistant U.S. Attorney Susan Osborne of the U.S. Attorney’s Office for the Southern District of Florida and Trial Attorney Edward Chung of the Civil Rights Division.

WASHINGTON – A federal judge in San Francisco has issued permanent injunctions barring four individuals from promoting what a government lawsuit describes as a complex tax-fraud scheme involving several entities located around the globe, the Justice Department announced today. U.S. District Judge Phyllis J. Hamilton signed the injunction orders against Yurij Debevc and Robert Nagy, both of South Carolina; Charles Hsin of New York; and Franklin Thomason of Jilin, China. Debevc, Nagy, Hsin and Thomason agreed to the injunctions without admitting the government’s allegations against them.

The government complaint filed in the case alleges that these four men and other defendants promoted a so-called "90% Stock Loan" program, using entities located in the United States, Hong Kong and the Isle of Man, that falsely purported to enable customers to contribute appreciated stocks or other securities in exchange for payments equal to 90% of the securities’ value without paying income tax on capital gains. Through this scheme, also known as the "Derivium" scheme, named after one of the companies involved, customers were allegedly told that they could avoid income tax because the transaction was a loan rather than a sale. But in fact, the government alleges, customers’ securities were actually sold to raise the funds to pay the customers. According to the complaint, the defendants sold the scheme to approximately 1,700 customers nationwide, in transactions totaling over $1 billion. The complaint alleges that the scheme cost the U.S. Treasury an estimated $230 million or more.

The same court barred another defendant, Scott Cathcart, from promoting the 90% loan program last year, after he agreed to a permanent injunction without admitting the government’s allegations. The government’s request for injunctions against the other defendants, including Charles Cathcart, Scott’s father, remains pending with trial scheduled for Nov. 16, 2009.

"Promoter injunctions are a vital part of the Justice Department’s efforts to stop complex tax schemes that purport to help wealthy taxpayers eliminate income tax on gains," said John DiCicco, Acting Assistant Attorney General for the Justice Department’s Tax Division. He thanked Justice Department trial attorneys Nathan Clukey and Ellen Weis, who handled the case, and revenue agents Marie Allen and Judy Steiner of the Internal Revenue Service’s Small Business/Self-Employed Division, who conducted the investigation.

The Justice Department has obtained injunctions against more than 425 tax-scheme promoters and tax preparers since 2001. Information about those cases is available on the Justice Department Web site.

WASHINGTON - The Justice Department today announced that it will monitor the Sept. 15, 2009, municipal elections in Springfield, Mass., and Newburgh, N.Y., to ensure compliance with the Voting Rights Act of 1965.

Federal observers will be assigned to monitor polling place activities in Springfield and Newburgh. The observers will watch and record activities during voting hours at polling locations. Civil Rights Division attorneys will coordinate the federal activities and maintain contact with local election officials.

Each year, the Justice Department deploys hundreds of federal observers from the Office of Personnel Management, as well as departmental staff, to monitor elections across the country. In 2008, for example, 1,060 federal observers and 344 Department personnel were sent to monitor 114 elections in 76 jurisdictions in 24 states.

To file complaints about discriminatory voting practices, including acts of harassment or intimidation, voters may call the Voting Section of the Justice Department’s Civil Rights Division at 1-800-253-3931. More information about the Voting Rights Act and other federal voting laws is available on the Department of Justice Web site at http://www.usdoj.gov/crt/voting/index.htm .

The Department of Justice today commemorated the 15th anniversary of the Violence Against Women Act (VAWA), which was signed into law on September 13, 1994. This critical legislation was created in recognition of the severity of the crimes associated with domestic violence, sexual assault and stalking. The anniversary also marks 15 years since the creation of the Department’s Office on Violence Against Women (OVW), which administers financial and technical assistance to communities around the country to facilitate the creation of programs, policies and practices aimed at ending domestic and dating violence, sexual assault and stalking

"We’ve made tremendous progress since the Violence Against Women Act first passed in 1994, but we have much more to do. We cannot rest. It will take all of us to fulfill the promise to end domestic violence and sexual assault," said Vice President Joe Biden, the author of the landmark Violence Against Women Act. 

"The Violence Against Women Act forever changed the way this nation meets our responsibility to survivors of domestic violence and sexual assault. It has been an essential building block in the Justice Department’s work to end violence against women," said Attorney General Eric Holder. "It is only in working together that we can make a difference and save lives, and the Justice Department will continue to take every possible step to enforce laws protecting victims of violence and to provide resources to aid victim service providers."

"Without a doubt, VAWA would never have happened without the steadfast commitment and work of the countless advocates, coalitions and community partners who worked tirelessly for federal legislation to mark the importance of the issue and provide vital resources," said Catherine Pierce, Acting Director of OVW. "In the past 15 years, countless lives have been saved, the voices of survivors have been heard, families have been protected, and the criminal justice community has been trained on the complex responses to domestic violence, sexual assault, dating violence and stalking."

The anniversary marks the start of a year-long anniversary effort to raise public awareness on issues around violence against women, to reinforce and build coalitions among federal, state, local and tribal law enforcement and victim services communities, and to reinforce the goal of ending domestic and dating violence, sexual assault and stalking for men, women and children across the country.

In recognition of the severity of the crimes associated with gender-motivated violence, Congress passed VAWA as part of the Violent Crime Control and Law Enforcement Act of 1994. VAWA is comprehensive legislative designed to end violence against women through criminal penalties, federal grant programs, and research and was reauthorized in 2000 and 2005. Since the passage of VAWA, there has been a paradigm shift in how the issue of violence against women is addressed in communities throughout the nation.

OVW was created to specifically implement VAWA and subsequent legislation. Currently, OVW administers two formula grant programs and 17 discretionary grant programs, all of which were established under VAWA and subsequent legislation. The office has also maintained a 15-year partnership with state, local and tribal governments, coalitions, law enforcement, prosecutors, judges and court personnel, victim advocates, health care providers and national organizations.

Every day, VAWA funding makes a difference in how communities across America help victims and hold offenders accountable. For example, subgrantees receiving funding awarded by states through OVW’s STOP Violence Against Women Formula Grant Program reported that, in calendar year 2007:

• More than 505,000 victims were served;
• Over 1,201,000 services were provided to victims; and
• More than 4,700 individuals were arrested for violations of protection orders.

Gerald Green and Patricia Green, Los Angeles-area film executives, were found guilty late last Friday of conspiracy to violate the Foreign Corrupt Practices Act (FCPA) and money laundering laws of the United States, as well as substantive violations of the FCPA and U.S. money laundering laws in relation to a sophisticated bribery scheme that enabled the defendants to obtain a series of Thai government contracts, including valuable contracts to manage and operate Thailand’s yearly film festival.

Patricia Green was also found guilty of falsely subscribing U.S. income tax returns in connection with this scheme. The Greens were found guilty by a federal jury in the Central District of California on Friday, Sept. 11, 2009, after a two-and-a-half week trial.

"As these convictions demonstrate, the Department of Justice will not waiver in its fight against corruption, whether perpetrated within our borders or abroad," said Assistant Attorney General Breuer. "The FCPA is a powerful tool that the Department will continue to use in an effort to stop individuals like the Greens who seek to further their own business interests through bribes paid to foreign officials."

Gerald Green, 77, and Patricia Green, 52, both of West Hollywood, Calif., were charged on March 11, 2009, in a second superseding indictment with paying kickbacks to the former governor of the Tourism Authority of Thailand (TAT) in exchange for receiving contracts to manage and operate Thailand’s yearly "Bangkok International Film Festival," as well as contracts to provide an elite tourism "privilege card" marketed to wealthy foreigners.

Specifically, according to the superseding indictment, the Greens paid approximately $1.8 million in bribes to the former governor through numerous bank accounts in Singapore, the United Kingdom and the Isle of Jersey in the name of the former governor’s daughter and a friend of the former governor. The contracts received by the Greens resulted in more than $13.5 million in revenue to businesses they owned.

The Greens were charged in count one of the second superseding indictment with conspiracy to violate the FCPA and money laundering laws of the United States. Counts two through 10 charged the defendants with individual acts in violation of the FCPA. Counts 11 through 17 charged the defendants with individual acts in violation of money laundering laws of the United States. Count 19 charged defendant Gerald Green with obstruction of justice and counts 20 and 21 charged Patricia Green with falsely subscribing a U.S. Income Tax Return, commonly known as Form 1120, knowing that the false and overstated figure included the bribes to the former governor, described as "commissions."

The U.S. dismissed count 18 of the superseding indictment, a substantive money laundering count, prior to the case going to the jury. The jury was unable to reach a verdict on count 19, the obstruction of justice count against Gerald Green.

Evidence introduced at trial showed that beginning in 2002 and continuing into 2007, the Greens conspired with others to bribe the former governor of the TAT in order to get the lucrative film festival contracts as well as other TAT contracts. As a result of the then governor’s position at the TAT, the former governor was able to influence the awarding of these contracts.

Trial evidence also showed that in furtherance of the conspiracy, the Greens used different business entities, some with dummy business addresses and telephone numbers, in their dealings with the TAT in order to hide the large amount of money the Greens were being paid under the contracts. Moreover, the trial evidence showed that the Greens disguised the bribes as "sales commission" payments and made the payments for the benefit of the former governor through the foreign bank accounts of intermediaries, including bank accounts in the name of the former governor’s daughter and friend.

The conspiracy and FCPA charges each carry a maximum penalty of five years in prison, and each of the money laundering counts carries a maximum penalty of up to 20 years in prison. The false subscription of a U.S. income tax return carries a maximum penalty of three years in prison and a fine of not more than $100,000. Sentencing has been set for Dec. 17, 2009, before the Honorable George Wu in the Central District of California.

This case was prosecuted by Senior Trial Attorney Jonathan E. Lopez of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Bruce Searby of the Central District of California, with significant assistance from Fraud Section contract Attorney Allan J. Medina. The case was investigated by the FBI’s Los Angeles Field Office and the IRS-Criminal Investigation Division, Los Angeles Field Office. Substantial assistance was also provided by the Criminal Division’s Office of International Affairs, in particular Christopher P. Sonderby, the Department of Justice Attaché and Intellectual Property Law Enforcement Coordinator – Asia; FBI Legal Attaché Daniel Kelly in Bangkok; and Fraud Section Paralegal Oneika Duncan.

WASHINGTON — A Newark grand jury indicted three individuals for their participation in fraud and kickback conspiracies related to contracts at a U.S. Environmental Protection Agency (EPA)-designated Superfund site, Federal Creosote, located in Manville, N.J., the Department of Justice announced today. One individual is also charged with participating in a bid-rigging conspiracy and additional fraud and kickback conspiracies at Federal Creosote and another EPA-designated Superfund site, Diamond Alkali, located in Newark, N.J.

The 12-count indictment, originally filed under seal on Aug. 31, 2009, was unsealed today in the U.S. District Court of New Jersey. The indictment charges Gordon D. McDonald, a former project manager for a prime contractor, with engaging in separate kickback and fraud conspiracies with sub-contractors John A. Bennett and James E. Haas Jr. at Federal Creosote. McDonald was arrested on Sept. 8, 2009, in Berlin, N.J. Bennett is a former chief executive officer of sub-contractor Bennett Environmental Inc. (BEI), a Canadian-based company that treats and disposes of contaminated soil. Haas, who was arrested in Vincentown, N.J., on Sept. 10, 2009, is a former representative of a subcontractor that provides common backfill, a type of soil material used to refill an excavation. McDonald, Bennett and Haas are also charged with committing fraud against the United States.

In addition, McDonald is charged with engaging in a bid-rigging conspiracy and separate kickback and fraud conspiracies with two other sub-contractors at Federal Creosote and Diamond Alkali, the Department said. He is also charged with one count of international money laundering, two tax violations and obstruction of justice. The various charged conspiracies took place at different time periods from approximately December 2000 until approximately April 2007.

As a part of the charged conspiracies, McDonald and other co-conspirators at his company, accepted kickbacks from Bennett, Haas and another sub-contractor, the owner of J.M.J. Environmental Inc. (JMJ), in exchange for the award of sub-contracts at Federal Creosote. JMJ is a wastewater treatment and chemical supply company. Bennett, Haas and the owner of JMJ fraudulently inflated their bid prices for sub-contracts to include the amount of the kickbacks paid to McDonald and his co-conspirators. According to the indictment, McDonald also provided Bennett and his co-conspirators at BEI with the bid prices of their competitors, which allowed them to submit the highest possible bid prices and still be awarded the sub-contracts.

The indictment charges that McDonald also accepted kickbacks in exchange for the award of sub-contracts at the Diamond Alkali site from the owner of JMJ and the co-owner of National Industrial Supply LLC (NIS). NIS is a supplier of industrial pipes, valves and fittings located in Middlesex, N.J.

According to the indictment, McDonald also participated in a conspiracy with the owner of JMJ and other co-conspirators to rig bids and allocate sub-contracts for wastewater treatment supplies and services at Federal Creosote.

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

The charges announced today resulted from an ongoing investigation that is being conducted by the Antitrust Division’s New York Field Office, the EPA Office of Inspector General and the Internal Revenue Service Criminal Investigation. Seven individuals and three companies have already pleaded guilty as part of this investigation.

The fraud conspiracies that McDonald, Bennett and Haas are charged with carry a maximum penalty of five years in prison, three years of supervised release and a $250,000 fine. The fraud charges that McDonald, Bennett and Haas are charged with carry a maximum penalty of 10 years in prison, three years of supervised release and a $1 million fine. The kickback charge that McDonald is charged with carries a maximum penalty of 10 years in prison, three years supervised release and a $250,000 fine. The bid-rigging charge that McDonald is charged with carries a maximum penalty of three years in prison and a $350,000 fine for a violation occurring before June 22, 2004, and a maximum penalty of 10 years in prison and a $1 million fine for a violation occurring after June 22, 2004. The obstruction of justice charge that McDonald is charged with carries a maximum penalty of 20 years in prison, five years supervised release and a $250,000 fine. The maximum fines for each of these offenses may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.

The international money laundering conspiracy that McDonald is charged with carries a maximum penalty of 20 years in prison, five years of supervised release and a $500,000 fine, or twice the value of the funds involved in the transportation, transmission or transfer, whichever is greater. The tax violations that McDonald is charged with carry a maximum penalty of three years in prison, one year of supervised release and a $100,000 fine per count.

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

Anyone with information concerning bid rigging, kickbacks, tax offenses or fraud relating to sub-contracts awarded at the Federal Creosote or Diamond Alkali sites should contact the Antitrust Division’s New York Field Office at 212-264-9308.

WASHINGTON – An international computer hacker pleaded guilty today to multiple charges relating to hacking activity and credit card fraud, announced Assistant Attorney General of the Criminal Division Lanny A. Breuer, Acting U.S. Attorney for the District of Massachusetts Michael Loucks, U.S. Attorney for the Eastern District of New York Benton J. Campbell and Director of the U.S. Secret Service Mark Sullivan. More than 40 million credit and debit card numbers were stolen from major U.S. retailers as a result of the hacking activity.

Albert Gonzalez, 28, of Miami, pleaded guilty today to 19 counts of conspiracy, computer fraud, wire fraud, access device fraud and aggravated identity theft relating to hacks into numerous major U.S. retailers including TJX Companies, BJ’s Wholesale Club, OfficeMax, Boston Market, Barnes & Noble and Sports Authority. Gonzalez was indicted in August 2008 in the District of Massachusetts on charges related to these hacks.

Gonzalez also pleaded guilty to one count of conspiracy to commit wire fraud relating to hacks into the Dave & Buster’s restaurant chain, which were the subject of a May 2008 indictment in the Eastern District of New York. The pleas in both cases were entered before U.S. District Court Judge Patti B. Saris in federal court in Boston.

"Consumers must be able to trust that the credit and debit cards they use everyday in thousands of stores around the world are safe from unlawful access," said Assistant Attorney General Lanny A. Breuer of the Criminal Division. "Working together with U.S. Attorneys’ Offices around the country and with the invaluable support of law enforcement agencies, we will continue our efforts to identify and prosecute hacking and credit card fraud."

"The investigation and prosecution of identity theft is a top priority of the Department," said Acting U.S. Attorney for the District of Massachusetts Michael Loucks. "In the past 10 years there has been a dramatic growth in the transfer and storage of credit and debit card data on computer networks. It is thus compellingly important that we work hard to investigate and prosecute the theft of personal identity data that citizens entrust to computer networks every day."

"Computer hacking and identity theft pose serious risks to our commercial, personal and financial security," stated U.S. Attorney for the Eastern District of New York Benton J. Campbell.  "Hackers, including those who commit their crimes from abroad, will find no refuge from the reach of U.S. criminal justice – they will be found, prosecuted and convicted."

"Technology has forever changed the way we do business, virtually erasing geographic boundaries," said U.S. Secret Service Director Mark Sullivan. "However, this case demonstrates that even in the cyber world, there is no such thing as anonymity. The Secret Service, in conjunction with its many law enforcement partners across the United States and around the world, continues to successfully combat these crimes by adapting our investigative methodologies. We realize our success in this investigation is due in part to the cooperation of these partners in more than a dozen international law enforcement agencies."

According to the indictments to which Gonzalez pleaded guilty, he and his co-conspirators broke into retail credit card payment systems through a series of sophisticated techniques, including "wardriving" and installation of sniffer programs to capture credit and debit card numbers used at these retail stores. Wardriving involves driving around in a car with a laptop computer looking for accessible wireless computer networks of retailers. Using these techniques, Gonzalez and his co-conspirators were able to steal more than 40 million credit and debit card numbers from retailers. Also according to the indictments, Gonzalez and his co-conspirators sold the numbers to others for their fraudulent use and engaged in ATM fraud by encoding the data on the magnetic stripes of blank cards and withdrawing tens of thousands of dollars at a time from ATMs. According to the indictments, Gonzalez and his co-conspirators concealed and laundered their fraud proceeds by using anonymous Internet-based currencies both within the United States and abroad, and by channeling funds through bank accounts in Eastern Europe.

Based on the terms of the Boston plea agreement, Gonzalez faces a minimum of 15 years and a maximum of 25 years in prison. Based on the New York plea agreement, Gonzalez faces up to 20 years in prison, which the parties have agreed should run concurrently. He also faces a fine of up to twice the pecuniary gain, twice the victims’ pecuniary loss or $250,000, whichever is greatest, per count for the Boston case and a maximum fine of $250,000 for the New York case. Gonzalez also agreed to an order of restitution for the loss suffered by his victims, and forfeiture of more than $2.7 million as well as multiple items of real estate and personal property, including a condo in Miami, a 2006 BMW 330i, a Tiffany diamond ring and Rolex watches. Included in the forfeited currency is more than $1 million in cash, which Gonzalez had buried in a container in his backyard. Sentencing is scheduled for Dec. 8, 2009.

Gonzalez remains under indictment for charges brought in August 2009 by the U.S. Attorney’s Office for the District of New Jersey of conspiring to hack into computer networks supporting major U.S. retail and financial organizations and steal credit and debit card numbers from those entities. Among the corporate victims named in that indictment are Heartland Payment Systems, a New Jersey-based card payment processor; 7-Eleven Inc., a Texas-based nationwide convenience store chain; and Hannaford Brothers Co. Inc., a Maine-based supermarket chain. Charges in that case remain pending. An indictment is merely an allegation and defendants are presumed innocent until and unless proven guilty in court. While Gonzalez has pleaded guilty to the Boston and New York charges, he has not pleaded guilty to charges pending in New Jersey and remains presumed innocent of those charges.

The Boston case is being prosecuted by Assistant U.S. Attorneys Stephen Heymann and Donald Cabell of the District of Massachusetts. The New York case is being prosecuted by Assistant U.S. Attorney William Campos of the Eastern District of New York, and Senior Counsel Kimberly Kiefer Peretti and Trial Attorney Evan Williams of the Criminal Division’s Computer Crime and Intellectual Property Section. All of these cases are being investigated by the U.S. Secret Service.

WASHINGTON – Steven W. Allen, an attorney who operated a legal practice in Mesa, Ariz., and Allen P. Goodmansen, a certified public accountant who operated an accounting practice in Mesa, were indicted Wednesday for conspiracy to defraud the Internal Revenue Service (IRS) and for aiding in the filing of false income tax returns for clients of an offshore tax shelter scheme, the Justice Department and IRS announced. Goodmansen was also charged with knowingly filing a false personal income tax return for tax year 2002.

According to the indictment, from at least 1997 through 2004, Allen, Goodmansen and others participated in a scheme to help clients unlawfully evade the payment of income taxes. Allen set up a series of three offshore trusts for at least eight clients, including Goodmansen and an IRS undercover agent. These trusts were designed to help hide the clients’ income. Allen helped clients hide their ownership of businesses and assets, and income on which they should have paid taxes, by directing the clients to title their businesses or assets in the name of their foreign trust. Allen charged clients between $10,000 and $30,000, to set up the trust package.

The indictment further alleges that, at Allen’s direction, Goodmansen and an unindicted co-conspirator prepared false trust tax returns that fraudulently reported the clients’ income as though the income belonged to the trusts. Goodmansen also prepared personal tax returns for some of the individual clients that omitted the income that had been concealed through the foreign trusts. To conceal the scheme’s origination in Arizona, Allen mailed the false trust tax returns to the IRS from outside the United States. Goodmansen personally used the scheme in 2002 to hide income he earned that should have been reported on his personal income tax return.

Allen was charged with conspiracy and seven counts of aiding or assisting in the filing of a false tax return. If convicted, he faces a maximum sentence of 26 years in prison. Goodmansen was charged with conspiracy, filing a false tax return, and three counts of aiding or assisting in the filing of a false tax return. If convicted, he faces a maximum sentence of 17 years in prison.

An indictment is merely a formal charge by the grand jury. Each defendant is presumed innocent unless and until proven guilty in U.S. District Court.

This case is being prosecuted by Tax Division trial attorneys Monica B. Edelstein and Michael J. Romano and is being investigated by the IRS, Criminal Investigation Division, Phoenix. Additional information about the Justice Department’s Tax Division and its enforcement efforts may be found at http://www.usdoj.gov/tax. 

Dr. Candido Negron Mella pleaded guilty and was sentenced today for his participation in a corruption scheme involving the 2000 Resident Commissioner campaign of a former governor of Puerto Rico. Negron Mella, 42, pleaded guilty to conspiracy to violate the Federal Election Campaign Act. He was sentenced to five months in prison and seven months home detention, and was ordered to pay a $14,000 fine by U.S. District Court Judge Robert F. Kelly in U.S. District Court for the Eastern District of Pennsylvania, where the case was transferred from the District of Puerto Rico for plea and sentencing. Former Puerto Rico Governor Aníbal Acevedo Vilá and Luisa Inclán Bird, a legal advisor for the San Juan Resident Commissioner office when Acevedo Vilá served as Resident Commissioner, were acquitted on March 20, 2009, of all criminal charges related to the scheme.

According to court documents, Negron Mella was a partner in a company that had a professional relationship with a large Medicaid dental provider in the United States that was interested in obtaining a direct dental agreement with the Commonwealth of Puerto Rico. In order to assist that provider in obtaining a contract in Puerto Rico, Negron Mella, along with a co-conspirator, agreed to raise contributions for the campaign of the then-Resident Commissioner to the U.S. House of Representatives for the Commonwealth of Puerto Rico. Negron Mella admitted he hoped that contributing to the political campaigns would enable him to obtain access to the government of Puerto Rico to promote his business interests.

According to court documents, Negron Mella learned in 2001 that the Resident Commissioner campaign committee was carrying a $150,000 campaign debt. Negron Mella admitted that he was aware he would not be able to retire the entire campaign debt through legal means due to federal laws limiting individual contributions. Therefore, Negron Mella admitted that he and a co-conspirator agreed to use conduit contributions, and requested that their employees, friend and relatives make contributions to the campaign in exchange for reimbursing those employees, friends and relatives for the full amount of their contributions.

Negron Mella and a co-conspirator contributed approximately $39,000 in conduit contributions to the Resident Commissioner campaign committee in 2003, according to court documents. Negron Mella admitted he directly solicited at least $14,000 of the $39,000 in conduit contributions. Negron Mella also admitted that at the time he and his co-conspirator made the conduit contributions to the campaign committee, he knew that the legal limit for federal campaigns was $2,000. In addition, Negron Mella admitted that when he and his co-conspirator made the conduit contributions to the campaign committee, Negron Mella had already contributed the maximum amount allowed by law to the campaign committee, and that he made these conduit contributions in excess of that legal limit knowing he could no longer contribute to the campaign.

Including Negron Mella’s guilty plea, 10 defendants have pleaded guilty in the corruption investigation in the District of Puerto Rico.

This case was prosecuted by First Assistant U.S. Attorney María A. Domínguez and Assistant U.S. Attorneys Ernesto López, Timothy Henwood and Jacqueline Novas of the District of Puerto Rico, and Trial Attorneys Peter M. Koski and Ethan H. Levisohn of the Criminal Division’s Public Integrity Section, which is headed by Chief William M. Welch, II. The case was investigated by the FBI and IRS, with assistance and cooperation from the Office of the Comptroller of Puerto Rico.

WASHINGTON – The Justice Department announced that four men who committed three hate crime assaults in response to President Barack Obama’s election victory were sentenced today by U.S. District Judge Carol B. Amon in federal court in Brooklyn, N.Y. Ralph Nicoletti, 19, was sentenced to 108 months in prison; Bryan Garaventa, 18, was sentenced to 60 months; Michael Contreras, 19, was sentenced to 55 months; and Brian Carranza, 21, was sentenced to 70 months.

On Nov. 4, 2008, following the announcement of President Obama’s victory in the presidential election, the defendants set out to assault African-Americans in Staten Island, N.Y, because they believed the victims had voted for the President. Nicoletti drove the group to the Park Hill section of Staten Island, a predominantly African-American neighborhood, where they encountered an African-American teenager and assaulted him. Nicoletti struck the teenager with a metal pipe and Garaventa hit him with a collapsible police baton. Nicoletti then drove to the Port Richmond section of Staten Island, where the defendants assaulted an unidentified African- American man, knocking him to the ground.

The third assault was against an individual whom the defendants mistakenly believed was African-American. The plan was for Contreras to hit the victim with the police baton as the defendants drove by him. Instead, Nicoletti deliberately drove his car into the victim’s body. The victim was thrown onto the hood of the car and hit the front windshield, smashing it. The victim was seriously injured and remained in a coma for several weeks after the attack.

"It is appalling that such hateful acts of racially motivated violence continue to persist in our nation. These sentences should remind those inspired to violence by hate that they will be brought to justice," said Acting Assistant Attorney General Loretta King for the Civil Rights Division. "We applaud the prosecutors and law enforcement agencies that participated in this investigation and prosecution. The Civil Rights Division will remain vigilant in our efforts to combat hate crimes that tear at the very fabric of our great nation and seek to undermine the progress we’ve made in advancing civil rights for all."

"The significant sentences imposed by the court reflect the seriousness of the defendants’ shocking and deplorable conduct," stated Benton J. Campbell, U.S. Attorney for the Eastern District of New York. "These sentences send a clear message that those who engage in racially motivated violence that seeks to deprive individuals of their fundamental right to vote will be punished. We are grateful for our partnership with the Department of Justice Civil Rights Division, the FBI and the New York City Police Department in this matter, and I also wish to thank the Richmond County District Attorney’s Office for its assistance."

"By their own admission these defendants, motivated by racial hatred and a desire to punish those they believed had voted for Barack Obama, participated in violent attacks that nearly killed one of their victims,"said FBI Assistant Director-in-Charge Joseph M. Demarest Jr. of the New York Field Office. "Free exercise of the right to vote is a cornerstone of our democracy, and a fundamental civil right that the FBI will always safeguard vigorously."

The government’s case is being prosecuted by Civil Rights Division Special Litigation Counsel Kristy L. Parker and Assistant U.S. Attorneys Pamela K. Chen and Margo K. Brodie for the Eastern District of New York.

Thomas Raffanello, a former global director of security at the Fort Lauderdale, Fla., office of Stanford Financial Group (SFG), has been charged today in a three-count superseding indictment with conspiracy to obstruct a U.S. Securities and Exchange Commission (SEC) proceeding and to destroy documents in a federal investigation; obstruction of a proceeding before the SEC; and destruction of records in a federal investigation.

The initial indictment in the case was unsealed by the U.S. District Court for the Southern District of Florida on June 19, 2009, and charged Bruce Perraud, 42, of Weston, Fla., a former global security specialist at the Fort Lauderdale SFG office, with one count of destruction of records in a federal investigation. In addition to charging Raffanello, 61, of Coral Gables, Fla., today’s superseding indictment charges Perraud with an additional count of conspiracy as well as one count of obstruction of a proceeding before the SEC.

Raffanello and Perraud are scheduled to make their initial appearances at the U.S. District Court in Fort Lauderdale at 11 a.m. ET on Friday, Sept. 11, 2009.

According to court documents, SFG, headquartered in Houston, was the parent company of numerous affiliated financial services entities, including the Stanford International Bank Ltd. (SIBL). According to the superseding indictment, SIBL, an offshore SFG bank affiliate located in St. John’s, Antigua, allegedly lured U.S. investors to buy into its certificates of deposit (CDs) by touting high investment returns not available through domestic banks.

SIBL is alleged to have misrepresented that it held $8 billion in client funds that had been invested primarily in its CDs. The SEC filed a complaint in the U.S. District Court for the Northern District of Texas against SIBL and its affiliated entities on Feb. 16, 2009, in which it alleged that the SIBL CD program was the mechanism by which the principals of SIBL orchestrated a "massive, ongoing fraud." Also on Feb. 16, 2009, a receiver was appointed to assume exclusive control of all SFG-related entities in order to protect SIBL assets from potential waste and depletion by SIBL’s principals.

The U.S. District Court for the Northern District of Texas additionally issued an order instructing that all SFG and SIBL employees preserve all company documents and records, protecting them from destruction.

The indictment alleges that the receiver sent an e-mail on Feb. 17, 2009, to all SFG employees describing the contents of the court order mandating document and record preservation. It is alleged that the e-mail further instructed SFG employees that they had been ordered to preserve "any and all documents, notes and records," and that they may not "hide, destroy or alter any document or electronic record relating to the company."

According to the allegations in the superseding indictment, Perraud placed a telephone call to Raffanello on Feb. 17, 2009, in which he discussed the court order mandating the preservation of documents. Six days later, on Feb. 23, 2009, the indictment alleges Raffanello directed that the documents housed at SFG’s Fort Lauderdale office be shredded. Perraud allegedly contacted a commercial shredding company on that same day and requested that it destroy a large quantity of SFG documents at the Fort Lauderdale office, in violation of the Feb. 16 court order.

The indictment alleges that a representative of the commercial shredding company arrived at SFG’s Fort Lauderdale offices on Feb. 25, 2009, where he was met by Perraud. Perraud then allegedly supervised as a 95-gallon bin was packed with documents and was hauled to the shredder’s vehicle, where its contents were shredded. The indictment also alleges that many more documents and records were brought to the shredding truck for destruction.

In a related case, SFG corporate officers Robert Allen Stanford, Laura Pendergest-Holt, Gilberto Lopez and Mark Kuhrt, as well as Leroy King, a former Antiguan bank regulator, were each charged in an indictment unsealed on June 19, 2009, in the Southern District of Texas with conspiracy to commit mail, wire and securities fraud; wire fraud; mail fraud; and conspiracy to commit money laundering stemming from an alleged massive investment fraud scheme involving CDs held by SIBL. Stanford, Pendergest-Holt and King were also charged with conspiracy to obstruct an SEC investigation and obstruction of an SEC investigation.

In another related case, James Davis, SFG’s former chief financial officer, pleaded guilty on Aug. 27, 2009, in the Southern District of Texas to conspiracy to commit mail, wire and securities fraud; mail fraud; and conspiracy to obstruct a proceeding of the SEC. Davis was initially charged in a criminal information filed with the court on June 18, 2009.

The case is being investigated by the FBI’s Houston Field Office and the U.S. Postal Inspection Service. It is being prosecuted by Fraud Section Senior Litigation Counsel Jack Patrick and Trial Attorney Matthew Klecka of the Criminal Division’s Fraud Section.

Indictment

Richard David Mitchell was arraigned yesterday on sex tourism charges in the U.S. District Court for the District of Hawaii, after being deported from Cambodia.

Mitchell, 61, a U.S. citizen and resident of Hawaii, was charged in a criminal complaint filed on Aug. 26, 2009, in U.S. District Court for the District of Hawaii with engaging in illicit sexual conduct in a foreign place. According to the affidavit filed in support of the complaint, witnesses reported seeing Mitchell engaging in sex acts with a female child on the curbside of a street in Phnom Penh, Cambodia, in August 2008. Mitchell was initially arrested in August 2008 by the Cambodian National Police on local charges related to the same incident.

Mitchell returned to Hawaii on Sept. 5, 2009, following his removal from Cambodia. Upon his arrival at Honolulu International Airport, he was taken into custody by U.S. Immigration and Customs Enforcement (ICE) agents. At yesterday’s hearing, U.S. Magistrate Judge Barry Kurren ordered Mitchell held without bond pending a detention hearing.

Mitchell is the fourth American arrested by ICE in the past two weeks for sexually exploiting minors in Cambodia. On Aug. 31, 2009, three Americans were taken into custody by ICE at Los Angeles International Airport following their removal from Cambodia on sex tourism charges. The four cases are the result of unprecedented cooperation among U.S. authorities, the Cambodian government and non-governmental organizations to target American sex tourists in Cambodia.

Mitchell faces up to 30 years in prison and a fine of up to $250,000 if convicted of the charges.

Charges in a criminal complaint are merely accusations, and a defendant is presumed innocent unless and until proven guilty.

The case is being prosecuted by Assistant U.S. Attorney Amy Olson of the U.S. Attorney’s Office for the District of Hawaii and Trial Attorney Anitha Ibrahim of the Criminal Division’s Child Exploitation and Obscenity Section. The case was investigated by ICE.

Robert P. Merz was sentenced to life in prison today for advertising, transporting, receiving and possessing child pornography.

Merz, 45, of Philadelphia, was charged in a third superseding indictment on Oct. 23, 2008. He was convicted of all charges following a three-day trial before U.S. District Judge Juan R. Sanchez in May 2009. Merz had two prior Pennsylvania state convictions for the molestation of two young girls on separate occasions, making him eligible for the life sentence.

Evidence presented at trial established that Merz’s home was searched in February 2007, and computers, DVDs and CDs were seized. Trial evidence showed that upon review of the seized materials, investigators discovered hundreds of thousands of images and videos depicting the sexual abuse of minors as young as toddlers. Some of the images depicted violent sexual acts being committed against the victims.

In addition, evidence introduced at trial revealed that Merz used numerous online technologies to receive and transport the images. Investigators testified at trial that Merz created and administered an online group that was dedicated to trading images and videos depicting the sexual abuse of minors. The private online group had members from around the world who were handpicked by Merz. The investigators testified that the group could only be accessed using a password and was established not only to trade images and videos of minors, but also so members could talk about their common sexual interest in children.

This online group was identified through Operation "Joint Hammer," the U.S. component of "Operation Koala," an ongoing operation involving 28 countries targeting transnational rings of child pornographers that was initiated by Europol and Eurojust.

The case was investigated by the FBI and the U.S. Postal Inspection Service. It is being prosecuted by Assistant U.S. Attorneys Roberta Benjamin and Kevin Brenner of the U.S. Attorney’s Office for the Eastern District of Pennsylvania and Trial Attorney Steve Grocki of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS). Computer forensics in the case were performed by CEOS’ High Technology Investigative Unit.

Delmar Dwayne Spier, the chief executive officer and managing director of United States Protection and Investigations, LLC (USPI), today pleaded guilty in U.S. District Court for the District of Columbia to conspiracy, major fraud and wire fraud arising from an alleged scheme to defraud the United States; and his wife, Barbara Edens Spier, the president and owner of USPI, pleaded guilty to conspiracy to defraud the United States in connection with U.S.-sponsored rebuilding efforts in Afghanistan.

According to court documents, USPI, a Houston-based security firm, was a subcontractor for the U.S. Agency for International Development (USAID) based on a USAID contract with the Louis Berger Group Inc. (LBGI) as part of the Rehabilitation of Economic Facilities Program (REFS Program). The REFS Program was developed by USAID to provide a broad range of assistance to the people of Afghanistan. Under the USAID contract with LBGI, LBGI constructed a variety of infrastructure improvements, including electrical facilities, health facilities, schools and irrigation systems. USPI provided security at many LBGI construction sites.

According to court documents, the USPI subcontract was a cost-reimbursement contract, which required LBGI and ultimately USAID to reimburse USPI for all incurred expenses and pay USPI a fee equivalent to a percentage of its incurred expenses.

Delmar Dwayne Spier, 73, of Houston, admitted in his plea before U.S. District Judge Rosemary M. Collyer today that from June 2003 through July 2007, he defrauded the United States by obtaining reimbursement for inflated expenses purportedly incurred by USPI for rental vehicles, fuel and security personnel. Delmar Dwayne Spier and Barbara Edens Spier, 60, also of Houston, admitted before Judge Collyer today that they conspired with USPI employees to fabricate invoices from fictitious companies to obtain reimbursement from LBGI and ultimately from USAID to cover USPI’s inflated expenses.

The Spiers’ plea agreements require them to forfeit $3 million in proceeds that can be traced to the fraud. The conspiracy charge carries a maximum sentence of five years in prison and a $250,000 fine.  The charge of wire fraud carries a maximum sentence of 20 years in prison and a $250,000 fine.  The charge of major fraud carries a maximum sentence of 10 years and a $1 million fine. Sentencing has not yet been scheduled for either defendant.

Delmar Dwayne Spier and Barbara Edens Spier were initially indicted, along with former USPI employees William Felix Dupre and Behzad Mehr, on Sept. 30, 2008. Dupre is scheduled to go to trial on Dec. 10, 2009.

The investigation of this case was conducted by the USAID Office of the Inspector General, the FBI, members of the National Procurement Fraud Task Force and the International Contract Corruption Task Force (ICCTF).

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

This case is being prosecuted by Trial Attorney Jennifer R. Taylor of the Criminal Division's Fraud Section and Assistant U.S. Attorney David J. Gorman of the U.S. Attorney’s Office for the District of Columbia.

Four individuals were indicted today by a federal grand jury in the Eastern District of Virginia with conspiracy to commit copyright infringement for allegedly obtaining and illegally releasing copyrighted music.

Adil R. Cassim, 29, of Granada Hills, Calif.; Bennie Glover, 35, of Shelby, N.C.; Matthew D. Chow, 28, of Missouri City, Texas; and Edward L. Mohan, II, 46, of Baltimore, were charged in the one-count indictment with being high-level members of the music piracy group known as "Rabid Neurosis" or "RNS," which operated from at least 1999 to 2007. According to the indictment, the defendants, led by Cassim for a period of time, allegedly conspired to illegally upload to RNS thousands of copyright protected music files, which were often subsequently reproduced and distributed hundreds of thousands of times.

According to the indictment, RNS was a "first-provider" or "release group" for pirated music and other content to the Internet. Once a group obtains and prepares infringing digital copies of copyrighted works, the copies can then be distributed in a matter of hours to secure computer servers throughout the world. According to the indictment, RNS members were granted access to massive libraries of pirated music, video games, software and movies by gaining a reputation for providing previously unavailable pirated materials. The indictment alleges that t he supply of pre-release music was often provided by music industry insiders, such as employees of compact disc (CD) manufacturing plants, radio stations and retailers, who typically receive advance copies of music prior to its commercial release.

The indictment also alleges that members of RNS, including Glover, illegally procured some of the music the group illegally released before its commercial release date from a CD manufacturing plant in North Carolina.   Other members of RNS, including Mohan and Chow, allegedly purchased CDs from retail stores shortly after their commercial release and posted them to the Internet before other piracy groups were able to do so.

If convicted, defendants face a maximum sentence of five years in prison, a $250,000 fine and three years of supervised release, as well as possible orders of restitution.

In addition to the four defendants charged in the indictment, two additional individuals allegedly involved with the group were each charged by criminal information with one count of conspiracy to commit copyright infringement: Patrick L. Saunders, 30, of Brooklyn, N.Y., was charged on Aug. 14, 2009; and James A. Dockery, 39, of Mooresboro, N.C., was charged Sept. 8, 2009. Saunders pleaded guilty on Sept. 8, 2009, before U.S. District Court Judge Gerald B. Lee in the Eastern District of Virginia and is scheduled to be sentenced on Dec. 4, 2009, at 9:00 a.m.

The case is part of a multi-year federal investigation of organized piracy groups responsible for the illegal distribution of significant amounts of copyrighted movies, software, games and music through the Internet. The investigation of music piracy groups was led by agents from the FBI’s Washington Field Office-Northern Virginia Resident Agency.

The case is being prosecuted by Assistant U.S. Attorney Jay V. Prabhu of the Eastern District of Virginia and Trial Attorney Tyler G. Newby of the Criminal Division’s Computer Crime and Intellectual Property Section.

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

Indictment

WASHINGTON – The Justice Department announced today defendant Paul Raymond Green was sentenced late last week to 52 months in prison and three years of supervised release for his role in a scheme to prostitute minor females.

Green, 23, previously pleaded guilty to conspiracy to commit sex trafficking. Green admitted that he, through his co-conspirator, arranged on two separate occasions in 2007 to provide minor victims to an acquaintance who paid to have sex with the victims. On both occasions, cigarettes dipped in phencyclidine liquid known as PCP, called "dippers" or "wets," were available in the hotel room where the girls were brought to have sex. Green also sold cocaine to that same individual.

"The defendant in this case took an active role in prostituting young girls, violating their civil rights in order to facilitate his drug sales," said Loretta King, Acting Assistant Attorney General for the Civil Rights Division. "This type of crime is beyond despicable, and the Justice Department remains committed to prosecuting such cases."

"Anyone who pays for or profits from sex with a child should be on notice that Maryland's human trafficking task force is committed to a policy of zero tolerance for child prostitution," said U.S. Attorney Rod J. Rosenstein for the District of Maryland.

Acting Assistant Attorney General King and U.S. Attorney Rosenstein commend the FBI and the Montgomery County Police Department for their work in this cooperative investigation and prosecution. Assistant U.S. Attorney Solette Magnelli and Civil Rights Division Human Trafficking Prosecution Unit attorney Jim Felte are prosecuting this case for the Government.

This case was investigated by the Maryland Human Trafficking Task Force, created in 2007 to discover and rescue victims while identifying and prosecuting offenders. For more information about the Task Force, please visit http://www.usdoj.gov/usao/md/Human-Trafficking/.

WASHINGTON – The Justice Department today filed a lawsuit against an Atlanta condominium association, as well as the owner of a unit and the real estate agent who sold it, for violating the Fair Housing Act by discriminating against families with children.

The lawsuit, filed in U.S. District Court for the Northern District of Georgia, charges that the Georgian Manor Condominium Association maintained policies discouraging families with children from living in the Georgian Manor complex, located at 3648 Peachtree Road in Atlanta. It also charges that the owner of a unit in the complex refused to sell to families with children and that the real estate agents hired to sell the unit, Jennifer Sherrouse and Harry Norman Realtors, publicized the restriction.

"Housing discrimination against families with children has been illegal for more than 20 years, but remains a persistent problem across the country" said Loretta King, Acting Assistant Attorney General for the Justice Department’s Civil Rights Division. "We will continue to prosecute discrimination against families with children."

This lawsuit arose as a result of a complaint filed with the U.S. Department of Housing and Urban Development (HUD) by a fair housing group. The group encountered language in a real-estate listing for Georgian Manor stating "No pets or children." After an investigation of the complaint, HUD issued a charge of discrimination and the defendants elected to have the case heard in federal court.

"Real estate advertising stating 'No children' is prohibited by federal protections for families with children. Together, HUD and the Justice Department will vigorously enforce the law," stated John Trasviña, HUD Assistant Secretary for Fair Housing & Equal Opportunity. "This lawsuit serves to educate the real estate professionals and landlords about the rights and responsibilities under the federal Fair Housing Act."

The lawsuit seeks a court order prohibiting future discrimination by the defendants, monetary damages for the complainants and a civil penalty. It also seeks monetary damages for other persons harmed by the defendants’ actions.

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 at 1-800-896-7743, e-mail the Justice Department at [email protected] or contact HUD at 1-800-669-9777.

WASHINGTON – Adam S. Pretti, a former deputy with the Shelby County, Tenn., Sheriff’s Office, was sentenced today in federal court in Memphis to 18 months in prison and two years of supervised release for using excessive force during an encounter with a citizen. Pretti was also ordered to pay a $4,000 fine and a $100 special assessment.

Pretti pleaded guilty on April 9, 2009, to unnecessarily striking in the head a man he encountered outside a residence in Cordova, Tenn., while conducting an investigation in March or April 2006. Pretti acknowledged that he abused his authority as a law enforcement officer and agreed that his conduct violated federal law and the constitutional rights of the man he struck.

"The Civil Rights Division will continue to investigate and prosecute rogue police officers who abuse the rights of those they are sworn to protect and serve," said Acting Assistant Attorney General Loretta King for the Civil Rights Division.

"The sentence should serve as a reminder and message to those law enforcement officers who violate the protections of the Fourth Amendment that their actions are unacceptable, they will be prosecuted and they will serve time," added Lawrence J. Laurenzi, U.S. Attorney for the Western District of Tennessee. "The U.S. Attorney’s Office continues to make such cases a priority."

The case was investigated by the Tarnished Blue Task Force, a multiagency task force led by the FBI and staffed with investigators from its Memphis Field Office, the Shelby County Sheriff’s Office and the Memphis Police Department. The case was prosecuted by Assistant U.S. Attorney Joseph Murphy for the Western District of Tennessee and Trial Attorney Erin Aslan of the Justice Department’s Civil Rights Division.

Jeffrey Robert Libman, 42, of Fort Lauderdale, Fla., pleaded guilty in Miami today to one count of receiving child pornography.

Libman was indicted by a grand jury in the Southern District of Florida on April 28, 2009, for receiving, possessing and distributing child pornography. In his plea agreement, Libman admitted he received images that depict prepubescent children and children engaged in sadistic or masochistic conduct. At his sentencing, which is scheduled for Nov. 13, 2009, Libman faces a maximum term of 20 years in prison.

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

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

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

WASHINGTON — A federal judge in Sacramento, Calif., has barred Placerville, Calif.-based Teresa Marty and her business, Advanced Financial Services, LLC, from acting as a federal tax return preparer, the Justice Department announced today. U.S. District Court Judge Frank C. Damrell, Jr., of the Eastern District of California entered the preliminary injunction order, which adopted an earlier recommendation of U.S. Magistrate Judge Edmund F. Brennan.

The court found that in 2008 and 2009 Marty prepared and filed fraudulent tax returns with fabricated amounts of federal taxes withheld. According to the court, this false reporting of tax withholding led to fraudulent refund claims in amounts as large as $2.7 million per customer. The court also found that to support those fraudulent refund claims, Marty prepared and filed false IRS1099 forms.

The court stated that the IRS had identified approximately 110 returns that Marty prepared and filed that use false 1099 forms to generate fraudulent refund claims. The court also noted that the scheme Marty employed appeared to be part of a growing trend among tax protesters to file frivolous tax returns and 1099 forms in an attempt to escape their federal tax obligations and to fraudulently obtain money from the U.S. Treasury.

In addition to barring Marty from preparing federal tax returns, the court ordered her to provide to the United States a complete customer list and to notify her customers of the court’s order. More information about the case is available in an earlier Justice Department press release.

In the past decade the Justice Department has obtained injunctions against more than 420 tax preparers and tax-fraud promoters. Information about these cases is available on the Justice Department website.

WASHINGTON – The Department of Justice announced today that it will not challenge a proposal by seven regional less-than-truckload (LTL) freight transportation companies to bid jointly and engage in other collaborative activity as part of their nationwide LTL truck transportation services joint venture. Based on representations made by the applicants, the Department said that the proposed conduct is not likely to reduce competition in regional LTL truck transportation markets and could enhance competition in the long haul LTL market.

The regional LTL carriers that comprise the Reliance Network joint venture are: Averitt Express Inc.; DATS Trucking Inc.; Lakeville Motor Express Inc.; Land Air Express of New England; Pitt Ohio Express; Canadian Freightways; and Epic Express.

The carriers have represented that each serves a distinct geographic region in North America with insignificant overlap among their respective operations. They further represented that each carrier faces significant competition in the regions in which they operate and that, collectively, the carriers would account for less than 20 percent of the LTL freight transportation business in these regional markets, and far less than 20 percent of a nationwide LTL freight transportation market.

The Reliance Network carriers requested a business review letter from the Antitrust Division expressing its enforcement intentions with respect to a proposal to engage in collaborative activity, including collective rate-making for multi-regional shipments and territorial restrictions. The carriers represent that the proposal would allow them to offer "seamless" nationwide LTL freight transportation services and respond to shipping opportunities that originate from multiple regions by sharing key information and internal systems. To achieve these efficiencies, the carriers represent that they will combine information technology, operations, sales and marketing efforts, and administration. Each member carrier will continue to operate its regional LTL business independently and will retain the right to withdraw unilaterally from the joint venture.

Under the Department’s business review procedure, an organization may submit a proposed action to the Antitrust Division and receive a statement as to whether the Division currently intends to challenge the action under the antitrust laws.

A file containing the business review request and the Department’s response may be examined in the Antitrust Documents Group of the Antitrust Division, U.S. Department of Justice, 450 Fifth Street, N.W., Suite 1010, Washington, D.C. 20530. After a 30-day waiting period, the documents supporting the business review will be added to the file, unless a basis for their exclusion for reasons of confidentiality has been established under the Business Review Procedure.

WASHINGTON – The Justice Department today announced that during the Sept. 8, 2009, municipal election in Cleveland, Ohio, it will monitor polling place activities for compliance with the Voting Rights Act of 1965. Attorneys from the Department’s Civil Rights Division will coordinate the federal activities and maintain contact with local election officials.

Each year, the Justice Department deploys hundreds of federal observers from the Office of Personnel Management, as well as departmental staff, to monitor elections across the country. In calendar year 2008, for example, 1,060 federal observers and 344 Department personnel were sent to monitor 114 elections in 76 jurisdictions in 24 states.

To file complaints about discriminatory voting practices, including acts of harassment or intimidation, voters may call the Voting Section of the Justice Department’s Civil Rights Division at 1-800-253-3931. More information about the Voting Rights Act and other federal voting laws is available on the Department of Justice Web site at http://www.usdoj.gov/crt/voting/index.htm.

WASHINGTON – A former Ft. Campbell, Ky., soldier was sentenced today by U.S. District Judge Thomas B. Russell to life in prison after being convicted on May 7, 2009, of charges arising out of the rape of a 14-year-old Iraqi girl and the murder of the girl and her family, Assistant Attorney General Lanny A. Breuer of the Criminal Division and Acting U.S. Attorney Candace G. Hill of the Western District of Kentucky announced today.

Steven D. Green, 24, was convicted by a federal jury in Louisville, Ky., on all charged counts, including premeditated murder, aggravated sexual abuse, felony murder, conspiracy to commit murder, conspiracy to commit aggravated sexual abuse, use of firearms during the commission of violent crimes and obstruction of justice. The jury that convicted Green said it was unable to reach a unanimous verdict on whether the defendant should be sentenced to death. Because the jury did not unanimously reach a decision on the death penalty, the court sentenced Green to life in prison. Green was indicted by a federal grand jury on Nov. 2, 2006.

Green was charged with the crimes following an incident that occurred on March 12, 2006, in and around Mahmoudiyah, Iraq. According to evidence presented at trial, while manning a military checkpoint, Green and other fellow soldiers discussed raping and killing Iraqis.  Trial evidence showed that Green and others then took off their uniforms, put on black clothing, left their post and forced their way into the nearby home of the Al-Janabi family.  Evidence presented at trial proved that Green then took the mother, father and six-year-old into a bedroom where he shot and killed them.  In the living room, Green and the other soldiers raped the 14-year-old and then Green repeatedly shot her in the face and set her body on fire.  Green then tried to blow up the house, according to trial evidence, after which the soldiers returned to their checkpoint.  After committing the rape and murders, trial testimony revealed that Green bragged to others that the experience was "awesome."

"While the scars from these tragic crimes, including the senseless murder of four innocent Iraqi civilians, cannot be erased by the jury’s conviction and sentence of Steven Green, we sincerely hope the victims’ family may find some solace in the United States’ commitment to justice in this case," said Assistant Attorney General Lanny A. Breuer of the Criminal Division.  "The defendant’s brutal actions detailed at trial are an affront to the rule of law and stand in stark contrast to the admirable conduct of the brave men and women of the U.S. armed forces who serve our country with honor."

" Steven Green’s conviction and sentence are the culmination of the hard work, professionalism and dedication of the trial attorneys Marisa Ford, Jim Lesousky, and Brian Skaret, and of the agents of the FBI and the Army’s Criminal Investigative Division. I am proud that the U.S. Attorney’s Office for the Western District of Kentucky could play a major role in bringing this case to justice, particularly on behalf of the surviving victims of these crimes," said Acting U.S. Attorney Candace G. Hill. "The jury’s conviction and sentence reflect the shocking nature of these crimes. The honorable service in Iraq of thousands of this country’s armed forces should not be tarnished by this shameful event."

"Fortunately, the brutal and senseless crimes perpetrated in this case are uncommon on the battlefield, but nevertheless, important to investigate and to prosecute," said Assistant Director Kevin L. Perkins of the FBI Criminal Investigative Division. "The FBI remains committed to working with our military law enforcement partners to uncover any such crimes occurring domestically or abroad."

"We sincerely hope that today’s sentencing helps to bring the loved ones of this Iraqi family some semblance of closure and comfort after this horrific and senseless act," said Brigadier General Rodney Johnson, the Commanding General of the U.S. Army Criminal Investigation Command.  "Our agents worked tirelessly and shoulder to shoulder with the FBI and the attorneys. The sentencing is a true testament to our commitment and dedication to bring anyone who commits a crime while serving in the U.S. military to justice, regardless of the circumstances."

Green was discharged from the U.S. Army in May 2006 and was prosecuted in U.S. District Court under the Military Extraterritorial Jurisdiction Act (MEJA), a statute that gives U.S. courts jurisdiction to prosecute crimes committed outside the United States by, among others, persons who served with the armed forces but who are no longer subject to military prosecution. Green’s co-conspirators were prosecuted by military authorities under the Uniform Code of Military Justice. Green, formerly stationed at Ft. Campbell and deployed to Iraq while serving with the 101st Airborne Division of the U.S. Army, was arrested by the FBI on June 30, 2006, on federal charges of murder and rape based on MEJA.

The case was investigated by the FBI and the U.S. Army Criminal Investigation Division. The case was prosecuted by Assistant U.S. Attorneys Marisa Ford and Jim Lesousky of the U.S. Attorney’s Office in the Western District of Kentucky and Trial Attorney Brian Skaret of the Criminal Division’s Domestic Security Section.

WASHINGTON —The Department of Justice announced today that it will not challenge a proposal by Memorial Health Inc. (Memorial), and St. Joseph’s/Candler Health System (St. Joseph’s/Candler) to enter an exclusive joint purchasing agreement with respect to the purchase of certain medical and surgical supplies. The Department said that the proposed joint purchasing agreement may yield volume discounts and reduced transaction costs for the hospitals and ultimately could result in lower costs and increased hospital services for consumers.

Under the proposed agreement, Memorial and St. Joseph’s/Candler would jointly evaluate medical and surgical products, designate suppliers and negotiate prices and other terms with them.

Memorial and St. Joseph’s/Candler are 501(c)(3) non-profit organizations that own acute tertiary care hospitals in Savannah, Ga., that serve Southeast Georgia and the low-country area of South Carolina. Memorial owns and operates the Memorial Health University Medical Center. St. Joseph’s/Candler owns and operates St. Joseph’s Hospital and Candler Hospital.

The Department determined that the proposal meets the requirements of the antitrust safety zone set forth in Statement 7 of the Department’s and Federal Trade Commission’s Statements of Antitrust Enforcement Policy in Health Care. The safety zone requires that the cost of all products purchased through the joint purchasing agreement account for less than 20 percent of the total revenue of all products and services sold by each participant in the agreement. It also requires that products purchased through the joint purchasing agreement from a given supplier account for less than 35 percent of that suppliers’ sale of those products in the relevant market. Memorial and St. Joseph’s/Candler represented that they will abide by these limitations.

Under the Department’s business review procedure, an organization may submit a proposed action to the Antitrust Division and receive a statement as to whether the Division currently intends to challenge the action under the antitrust laws.

A file containing the business review request and the Department’s response may be examined in the Antitrust Documents Group of the Antitrust Division, U.S. Department of Justice, 450 Fifth Street, N.W., Suite 1010, Washington, D.C. 20530. After a 30-day waiting period, the documents supporting the business review will be added to the file, unless a basis for their exclusion for reasons of confidentiality has been established under the Business Review Procedure.