District Not Recorded

WASHINGTON -- A federal grand jury in Houston has returned an indictment charging two crewmembers of the oil tanker Georgios M with making false statements, violating federal law designed to prevent pollution from ships and obstruction of justice, the Justice Department announced.

According to the indictment, Ioannis Mylonakis and Argyrios Argyropoulos, served as Chief Engineers aboard the oil tanker Georgios M and each have been charged with violating the Act to Prevent Pollution from Ships (APPS), making material false statements to the U.S. Coast Guard and obstruction of justice.

Both are accused of maintaining false oil record books aboard the oil tanker that concealed deliberate discharges of oil-contaminated waste directly into the ocean. The defendants are accused of being responsible for the oil record book when the oil tanker entered various ports in Texas from 2006 to 2008 including Corpus Christi, Texas City and Houston.

Engine room operations on board large oceangoing vessels such as the Georgios M generate oil-contaminated bilge waste. International and U.S. law prohibit the discharge of bilge waste containing more than 15 parts per million of oil without treatment by an oily water separator - a required pollution prevention device. APPS requires all overboard discharges be recorded in an oil record book, a standardized log which is regularly inspected by the Coast Guard.

Knowing violations of APPS are punishable by up to 6 years in prison and a $250,000 fine. Making false statements are punishable by up to 5 years in prison and a $250,000 fine, while obstruction of justice is punishable by up to 20 years in prison and a $250,000 fine.

An indictment is a formal accusation and is not proof of guilt. Defendants are presumed innocent until and unless they are found guilty.

The investigation is being conducted by the Coast Guard Investigative Service and the Environmental Protection Agency Criminal Investigation Division. The case is being prosecuted by the Justice Department’s Environmental Crimes Section with assistance from the Environmental Protection Agency Regional Counsel’s Office.

WASHINGTON – Forty-three defendants in the United States and Mexico, including 10 alleged Mexican drug cartel leaders, have been charged in 12 indictments unsealed yesterday and today in U.S. federal courts in Brooklyn and Chicago, the Department of Justice, U.S. Drug Enforcement Administration (DEA) and U.S. Immigration and Customs Enforcement (ICE) announced. The alleged leaders and other high-ranking members of several of Mexico’s most powerful drug cartels are charged with operating continuing criminal enterprises or participating in international drug trafficking conspiracies.

"Breaking up these dangerous cartels and stemming the flow of drugs, weapons and cash across the Southwest border is a top priority for this Justice Department," said Attorney General Eric Holder. "The cartels whose alleged leaders are charged today constitute multi-billion dollar networks that funnel drugs onto our streets and what invariably follows is more crime and violence in our communities. Today’s indictments demonstrate our unwavering commitment to root out the leaders of these criminal enterprises wherever they may be found. We will continue to stand with our partners in Mexico to dismantle the cartels’ insidious operations."

"Realizing that neither of our two countries can win over drug traffickers on its own, we have built up the bilateral cooperation between the United States and Mexico to allow us to combine our investigative and legal resources to dismantle these transnational drug organizations and bring the leaders to justice," said Mexican Attorney General Eduardo Medina Mora. "We can only protect the right of our societies to live in peace and harmony through our governments’ mutual trust and shared responsibility."

Three of the suspected leaders were charged in both Brooklyn and Chicago. Joaquin "el Chapo" Guzman-Loera, Ismael "el Mayo" Zambada-Garcia and Arturo Beltran-Leyva, who are allegedly among the most powerful drug traffickers in Mexico, are alleged to be present and former heads of an organized crime syndicate known as the "Sinaloa Cartel" and "the Federation." Each of these three is designated as a Consolidated Priority Organization Target or CPOT by the Organized Crime Drug Enforcement Task Force (OCDETF).

Also charged in the Brooklyn indictments were seven other cartel leaders, including CPOT Ignacio "Nacho" Coronel Villarreal, Hector Beltran-Leyva (Arturo’s brother) and Jesus Zambada-Garcia (Ismael’s brother), each alleged leaders within the Federation; CPOT Vicente Carrillo Fuentes, the alleged head of the Juarez Cartel; CPOT Luis and Esteban Rodriguez-Olivera, alleged leaders of Los Gueros; and CPOT Tirso Martinez-Sanchez, the alleged head of his own international drug trafficking organization.

Together, the four Brooklyn and eight Chicago indictments charge that between 1990 and December 2008, Guzman-Loera, Ismael Zambada-Garcia, Arturo Beltran-Leyva and others were responsible for importing into the United States and distributing nearly 200 metric tons of cocaine, additional large quantities of heroin, and the bulk smuggling from the United States to Mexico of more than $5.8 billion in cash proceeds from narcotics sales throughout the United States and Canada.

The indictments unsealed today collectively seek forfeiture of more than $5.8 billion in drug proceeds. Also, more than 32,500 kilograms of cocaine have been seized, including approximately 3,000 kilograms seized during the Chicago investigation, approximately 7,500 kilograms seized during the New York investigation and 22,500 kilograms seized previously that were later linked to the activities of the Federation. The indictments also detail seizures of 64 kilograms of heroin and more than $22.6 million in cash during the course of the investigation.

As part of the coordinated actions, eight defendants have been arrested in the Chicago and Atlanta areas in the last week.  Earlier this year, 10 additional defendants, all customers of or couriers for the organizations, were charged separately in Chicago. Five defendants, all New York-based wholesale distributors or logistics coordinators for the cartels, were charged separately in Brooklyn. In all, 58 individuals have been charged in the investigation coordinated between the U.S. Attorneys’ Offices in Brooklyn and Chicago. All but one of the defendants face a maximum sentence of life in prison if convicted of the charges against them.

"The indictments announced today are the result of a sweeping national and international effort to stem the flow of drugs across the U.S./Mexico border and into our communities," said Benton J. Campbell, U.S. Attorney for the Eastern District of New York. "We will apply all available resources to win this battle." Mr. Campbell extended his grateful appreciation to ICE and the DEA Task Force in New York, the agencies responsible for leading the Eastern District’s investigation, and to the assistance provided by ICE and DEA in Miami, Houston, Mexico and Colombia.

"These indictments are among the most significant drug conspiracy charges ever returned in Chicago," said Patrick J. Fitzgerald, U.S. Attorney for the Northern District of Illinois. "They charge two major international supply organizations with importing many tons of cocaine and large quantities of heroin into the United States, often to wholesale distribution customers in Chicago, as well as to customers in other major cities. The defendants allegedly used practically every means of transportation imaginable to move these large amounts of drugs and to funnel massive amounts of money back to Mexico. I applaud the efforts of the DEA investigators who worked hard to put these cases together." Mr. Fitzgerald also thanked the Internal Revenue Service Criminal Investigation Division agents in Chicago and the U.S. Attorney’s Office for the Eastern District of Wisconsin in Milwaukee for their assistance.

"Today’s indictments are yet another strike against the leadership of the Mexican drug cartels," said DEA Acting Administrator Michele M. Leonhart. "Our relentless investigations penetrated deep into these pervasive criminal organizations, connecting street operations in U.S. communities like Chicago and New York to the top drug kingpins calling the shots in Mexico.  Make no mistake; along with our courageous partners in Mexico, we will break these cartels and pursue their leaders."

"Law enforcement agencies in the Americas are working closer than ever before and setting up a united, borderless offense against drug cartels," said Homeland Security Assistant Secretary for ICE John Morton.  "This is a significant step in breaking down the infrastructure of these criminal organizations."

According to one of the Brooklyn indictments, between 1990 and 2005, Guzman-Loera, Ismael Zambada-Garcia and Arturo Beltran-Leyva, together with Hector Beltran-Leyva, Jesus Zambada-Garcia and Villareal as leaders of the Federation, conspired to import more than 120 metric tons (264,000 pounds) of cocaine into the United States through the cooperative arrangements and coordination that the Federation provided. Members of the Federation shared drug transportation routes and obtained their drugs from various Colombian drug organizations, in particular, the Colombian Norte Valle Cartel. For example, in 2004, two shipments totaling 22,500 kilograms of cocaine were seized by the U.S. Coast Guard off the coast of Mexico. The indictment alleges that the defendants employed "sicarios," or hitmen, who carried out hundreds of acts of violence in Mexico, including murders, kidnappings, tortures and violent collections of drug debts, at their direction.

The indictments in Chicago allege that in approximately early 2008 Arturo Beltran-Leyva split his alliance with Guzman-Loera, Ismael Zambada-Garcia and the Federation due to various issues, including control of lucrative narcotics trafficking routes into the United States and the loyalty of wholesale narcotics customers, including the alleged leaders of a Chicago distribution cell. The indictments charge that Guzman-Loera and Ismael Zambada-Garcia, together with seven other high-ranking associates, including two of their sons, Alfredo Guzman-Salazar (Guzman-Loera’s son) and Jesus Vicente Zambada-Niebla (Ismael Zamada-Garcia’s son, who is in custody in Mexico), coordinated their narcotics trafficking activities to import multi-ton quantities of cocaine from Central and South American countries, through Mexico, and into the United States using various means of transportation, including Boeing 747 cargo aircraft; submarines and other submersible and semi-submersible vessels; container ships; go-fast boats; fishing vessels; buses; rail cars; tractor trailers; and automobiles

Guzman-Loera and Ismael Zambada-Garcia allegedly coordinated their cocaine and heroin smuggling activities to wholesale distributors throughout the United States, including a large distribution cell in Chicago of which 16 individuals were charged in an indictment unsealed today. On average, the Chicago cell allegedly received 1,500 to 2,000 kilograms of cocaine per month, at times obtaining all or a large portion of that quantity from Guzman-Loera and Ismael Zambada-Garcia and the factions of the Sinaloa Cartel they controlled, while also obtaining a substantial portion of that quantity from the Arturo Beltran-Leyva Cartel. From Chicago, the indictments allege that large quantities of cocaine and heroin were further distributed to customers in Cincinnati and Columbus, Ohio; Detroit; Milwaukee; New York; Philadelphia; Washington, D.C.; Vancouver, British Columbia; and elsewhere.

Guzman-Loera, Ismael Zambada-Garcia and the factions of the Sinaloa Cartel they controlled allegedly used various means to evade law enforcement and protect their narcotics distribution activities, including obtaining guns and other weapons; bribes; engaging in violence and threats of violence; and intimidating with threats of violence members of law enforcement, rival narcotics traffickers and members of their own drug trafficking organizations. According to the indictment, Guzman-Loera, Ismael Zambada-Garcia and his son, Jesus Vicente Zambada-Niebla, discussed obtaining weapons from the United States and using violence against American and/or Mexican government buildings in retaliation for each country’s enforcement of its narcotics laws and to perpetuate their narcotics trafficking activities.

In one of the indictments unsealed today in Brooklyn, Vicente Carrillo Fuentes is alleged to be the leader of the Juarez Cartel, which operates in the Juarez-El Paso corridor, one of the primary drug smuggling routes along the border between the United States and Mexico running from Ciudad Juarez, Mexico, to El Paso, Texas. The DEA estimates that approximately 90 percent of the cocaine that enters the United States comes through Mexico. The Juarez Cartel allegedly received multi-ton cocaine shipments in Mexico from the Colombian Norte Valle Cartel and from the Autodefensas Unidas de Colombia (AUC), a Colombian paramilitary organization and a major drug trafficking organization. According to the indictment, the Juarez Cartel maintained its power through the payment of bribes and through numerous acts of violence, including murder.

In another Brooklyn indictment, brothers Luis and Esteban Rodriguez-Olivera are charged with leading Los Gueros, a drug trafficking organization that rose to prominence within the Federation. According to court documents, Los Gueros operated a narcotics supply route that originated in Mexico, stretched into Texas and then branched off to various points, including the New York metropolitan area. Between 1996 and 2008, Los Gueros allegedly imported more than 100,000 kilograms of cocaine into the United States. The DEA estimates that between 2004 and 2006, the organization was responsible for shipping more than 2,000 kilograms of cocaine to New York City alone. In January 2006, Mexican authorities seized approximately 5,200 kilograms of the organization’s cocaine destined for the United States.

Tirso Martinez-Sanchez is alleged in one of the Brooklyn indictments to be an organizer and leader of an extensive international narcotics importation, distribution and transportation organization that is responsible for the distribution of multiple tons of cocaine in the United States. Martinez-Sanchez’s organization allegedly imported cocaine into the United States from Mexico through California and Texas, and then transported the cocaine overland to large distribution centers, including Los Angeles, New York and Chicago. In addition to coordinating the distribution of his own organization’s cocaine, Martinez-Sanchez also allegedly transported and distributed narcotics for members of the Juarez Cartel and the Federation.

The cases in the Eastern District of New York are being prosecuted by Assistant U.S. Attorneys Andrea Goldbarg, Claire Kedeshian, Bonnie Klapper, Stephen Meyer, Walter Norkin, Patricia Notopoulos and Carolyn Pokorny.

The cases in the Northern District of Illinois are being prosecuted by Assistant U.S. Attorneys Thomas Shakeshaft, Michael Ferrara, Greg Deis, Lindsay Jenkins, Renai Rodney, Angel Krull and Halley Guren.

The cases were investigated by the DEA, ICE and Internal Revenue Service Criminal Investigation, in cooperation with Mexican and Colombian law enforcement authorities. Additional assistance was provided by U.S. Attorney’s Offices in Milwaukee, Miami and Houston. The Criminal Division’s Office of International Affairs provided assistance in these cases. The investigative efforts were coordinated with the Special Operations Division, comprised of agents, analysts and attorneys from the Criminal Division’s Narcotic and Dangerous Drug Section (NDDS); DEA; FBI; ICE; the Bureau of Alcohol, Tobacco, Firearms and Explosives; U.S. Marshals Service; and Internal Revenue Service. Certain individuals named in indictments unsealed today have also been charged by other U.S. Attorneys’ Offices around the country and by NDDS.

An indictment is a formal charging document notifying the defendant of the charges. All persons charged in an indictment are presumed innocent until proven guilty.

Copies of indictments can be found at: http://www.usdoj.gov/opa/cartel-indictments.htm

WASHINGTON - Hansruedi Schumacher and Matthias Rickenbach, both of Switzerland, were indicted today for conspiring to defraud the United States, the Justice Department and Internal Revenue Service (IRS) announced. According to the indictment, Schumacher worked as an executive manager at Neue Zuercher Bank (NZB), a Swiss private bank located in Zurich, Switzerland. Rickenbach worked as a Swiss attorney who provided legal advice and services to U.S. clients. Both are alleged to have aided wealthy Americans conceal assets and income in Switzerland from United States authorities.

According to the indictment, Schumacher and Rickenbach helped wealthy American clients conceal their assets by establishing sham and nominee offshore entities to hide their U.S. clients' assets and income while allowing these clients to still control the assets and make investment decisions.

The indictment further alleges that Schumacher and Rickenbach regularly traveled to the United States to conduct banking and investment activities with their U.S. clients and that when they traveled they concealed their business activities in the United States by falsely representing to American authorities that they were traveling to the U.S. for personal reasons. While in the United States, the defendants would sometimes bring cash for their clients..

According to court documents, Schumacher and Rickenbach aided their wealthy American clients repatriate money back to the United States using several deceptive means. Schumacher and Rickenbach helped their clients obtain offshore credit cards and created sham loan documents. Additionally, Schumacher and Rickenbach falsified bank documents to generate the appearance that assets of their U.S. clients belonged to Swiss citizens, and they falsified documents to disguise their United States clients’ repatriation of offshore funds as inheritances from foreign citizens.

According to court documents, Schumacher and Rickenbach discouraged their U.S. clients from voluntarily coming into compliance in the United States. Instead, the defendants encouraged their clients to transfer their assets from UBS, a large Swiss bank, to NZB, a smaller bank in Switzerland. The defendants told their clients that their assets and identification would be safer at NZB because they had no presence in the United States and was therefore less likely to be pressured by the American authorities to disclose the identities of their United States clients.

"The Justice Department will continue to investigate leads provided by U.S. taxpayers who have come forward to disclose foreign bank accounts and will prosecute those foreign bankers and banks who illegally helped U.S. clients evade taxes," said John A. DiCicco, Acting Assistant Attorney General of the Justice Department’s Tax Division. "We encourage foreign banks to come forward and disclose their conduct immediately, before we learn about their criminal conduct from U.S. taxpayers."

"Today’s Indictment is the latest prosecution in this District against foreign bankers and professionals who enabled and assisted wealthy Americans conceal their assets offshore," said Jeffrey H. Sloman, Acting U.S. Attorney for the Southern District of Florida. "As more Americans voluntarily come into compliance and face their financial obligations, more leads are being developed and new investigations are initiated. American taxpayers who sought to avoid taxes by hiding their assets in Swiss accounts are on notice that this investigation continues."

"This is another step in our ongoing effort to pursue hidden offshore assets -- no matter where they are located," said IRS Commissioner Doug Shulman. "We're in the early stages of our work to crack down on offshore tax evasion. Through our efforts, we are gaining access to more and more information on institutions and individuals involved in offshore tax evasion, and you can expect us to use all of our enforcement tools to stop this abuse. For people with hidden offshore assets, they have an opportunity to get right with the government. Time is quickly running out, and people should take advantage of our voluntary disclosure process before special provisions expire September 23."

Acting Assistant Attorney General DiCicco and Acting U.S. Attorney Sloman commended the investigative efforts of the IRS agents involved in this case. The prosecution is being handled by Senior Litigation Counsel Kevin M. Downing and Trial Attorney Michael P. Ben’Ary of the Tax Division, and Assistant U.S. Attorney Jeffrey A. Neiman.

U.S. citizens who have an interest in, or signature or other authority over, a financial account in a foreign country with assets in excess of $10,000 are required to disclose the existence of such account on Schedule B, Part III of their individual income tax return. Additionally, American citizens must file a Report of Foreign Bank and Financial Accounts, or F-Bar, with the U.S. Treasury, disclosing any financial account in a foreign country with assets in excess of $10,000 for which they have a financial interest in or signature authority, or other authority over.

More information about the Justice Department’s Tax Division and its enforcement efforts is available at http://www.usdoj.gov/tax/.

BOSTON - Seven individuals from around New England have been indicted in federal court in Boston for conspiracies to defraud the United States through the promotion and use of multiple tax fraud schemes, the Justice Department and the Internal Revenue Service (IRS) announced today.

William Scott Dion and Catherine Floyd, both of Sanbornville, N.H., Charles Adams of Norwood, Mass., and Gary Alcock of Westborough, Mass., were arrested today on charges that they conspired to defraud the United States by promoting and using illegal schemes to defraud the IRS. Arrest warrants have also been issued for Gail and Myron Thorick, both of West Warwick, R.I., and for Kenneth Scott Alcock of Westborough, Mass.

One of the conspiracy counts in the indictment alleges that Dion, Floyd, and Adams ran a payroll tax scheme to pay employees "under the table" without properly accounting for, withholding, and paying over to the IRS the payroll taxes required by law. It is alleged that the three promoted the payroll scheme to employers and individuals who wanted to avoid payment of employer payroll taxes and individual payroll taxes. According to the indictment, the three ran the payroll scheme under three different names: Contract America, Talent Management, and New Way Enterprises. Approximately 150 individuals subscribed to the payroll scheme.

Another of the conspiracy counts in the indictment further alleges that husband and wife Gail and Myron Thorick conspired with Dion and Floyd to defraud the United States by promoting and operated a "warehouse banking" scheme which helped subscribers conceal income and assets from the IRS. According to the indictment, the warehouse scheme operated under three different names: Your Virtual Office, Office Services, and Calico Management. Allegedly, as part of the warehouse banking scheme, the defendants maintained accounts at several banks and used the accounts to deposit and commingle business receipts and other funds received from subscribers in order to mask the true ownership of the funds.

It is alleged that between 2000 and 2005, Gail and Myron Thorick, along with Dion and Floyd, caused more than $16 million to be deposited into the warehouse bank accounts. The indictment further alleges that in order for subscribers to withdraw cash from the accounts, the Thoricks, Dion, and Floyd wrote checks to withdraw substantial amounts of cash, which was subsequently delivered to subscribers wrapped in aluminum foil.

A third conspiracy count alleges that Gary Alcock and his brother, Kenneth Scott Alcock, conspired to defraud the IRS as subscribers to the payroll tax scheme promoted by Dion, Floyd, and Adams. According to the indictment, Gary Alcock owned and operated G&K Trucking Co. and Barkmulch & Loam Co., two businesses located in Shrewsbury, Mass. It is alleged that Gary and Kenneth Alcock created a nominee entity named "Alex Management" to conceal the business activities of G&K Trucking and Barkmulch & Loam, and also retained the services of Contract America to pay employees of these businesses "under the table."

In addition to conspiracies, Dion and Floyd are each charged with one count of obstructing and impeding the IRS; Adams is charged with three counts of tax evasion; Gail and Myron Thorick are each charged with three counts of filing false joint income tax returns ; Gary Alcock is charged with five counts of evading payroll taxes and one count of willfully failing to file a corporate tax return; and Kenneth Scott Alcock is charged with three counts of tax evasion.

If convicted on conspiracy and tax evasion counts, the defendants face up to five years in prison on each count, together with fines of up to $250,000 or twice the financial gain to the defendant or loss to the IRS, to be followed by three years of supervised release. The charges for obstructing the IRS carry maximum penalties of three years in prison, fines of $250,000 and one year of supervised release. False tax return charges each carry a maximum penalty of three years in prison, with fines of $250,000 and one year of supervised release. The failure to file charge carries a maximum one-year prison term, a fine of $100,000 and one year of supervised release.

The case was investigated by Special Agents of the Internal Revenue Service - Criminal Investigation Division. It is being prosecuted by Assistant U.S. Attorney Victor A. Wild of Loucks’ Economic Crimes Division at the U.S. Attorney’s Office in Boston and by Trial Attorneys John N. Kane and Jeffrey L. Shih of the Justice Department’s Tax Division.

The details contained in the indictment are allegations. The defendants are presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

WASHINGTON – The Department of Justice announced today that it has reached a proposed settlement with Microsemi Corporation that requires the company to divest all of the assets that it acquired from Semicoa Inc. on July 14, 2008. The Department said that without this divestiture, there would be little or no competition in the development, manufacture and sale of certain semiconductor devices used in military and space programs essential to the security of the United States.

The Department’s Antitrust Division has filed a proposed settlement in U.S. District Court for the Central District of California. If approved by the court, the settlement would resolve the lawsuit and address the Department’s competitive concerns.

These semiconductor devices, small signal transistors and ultrafast recovery rectifier diodes, are used to control the flow of electric current. Both small signal transistors and ultrafast recovery rectifier diodes are used in critical military and civil applications ranging from satellites to nuclear missile systems. Highly reliable performance under demanding conditions is essential in these military and space systems, where component failure could result in failure of the mission.

Prior to the acquisition, Microsemi and Semicoa were the only manufacturers of small signal transistors qualified for these applications. In addition, Semicoa and Microsemi were each poised to become qualified for their ultrafast recovery rectifier diodes, which are in critically short supply. The Department alleged in its complaint that Microsemi’s acquisition of Semicoa’s assets would result in increased prices and slower delivery of critical military components.

Microsemi is a Delaware corporation that manufactures a range of products, including QML semiconductors. In fiscal year 2008, Microsemi reported total sales of approximately $500 million. Semicoa was a Costa Mesa, Calif., corporation that, prior to the acquisition, manufactured a variety of QML semiconductors. Semicoa’s United States sales in 2007 were approximately $15 million.

The proposed settlement, along with the Department’s competitive impact statement, will be published in the Federal Register, as required by the Antitrust Procedures and Penalties Act. Any person may submit written comments regarding the proposed final judgment within 60 days of its publication to Maribeth Petrizzi, Chief, Litigation II Section, Antitrust Division, U.S. Department of Justice, 450 5th Street, N.W., Suite 8700, Washington, D.C. 20530. At the conclusion of the 60-day comment period, the court may enter the Final Judgment upon a finding that it serves the public interest.

WASHINGTON – A federal district judge in New York has permanently barred Howard Levine from preparing federal tax returns for others, the Justice Department announced today. The court also ordered Levine to provide his customer lists to the government and to mail copies of the court order to his customers.

According to the government complaint, Levine operated a tax return preparation service under the name Milaur Associates in Suffolk County, N.Y. The complaint states that Levine prepared an estimated 7,160 returns for the tax years 2003 through 2007. The Internal Revenue Service can not determine the exact number of returns that Levine prepared during this time period because he did not properly report his employer identification number on the returns that he prepared. Levine reported all Form 1099 income on a customer’s Schedule C, whether or not the customer had a business, and then reported excessive and unsupported expense deductions, thus resulting in a substantial loss to which the customer was not otherwise entitled. In addition, Levine, reported flow-through losses on customers’ Schedule E that were completely fabricated.

Based on its examination results to date, the government estimates that it has incurred losses in excess of $2.8 million.

"The Justice Department and Internal Revenue Service are working vigorously to shut down return preparers who prepare false or fraudulent returns for their customers, and catch those customers who actually filed false or fraudulent returns," said John A. DiCicco, Acting Assistant Attorney General for the Justice Department’s Tax Division.

In the past decade the Tax Division has obtained injunctions against more than 410 tax preparers and tax-fraud promoters. Information about these cases is available on the Justice Department Web site.

WASHINGTON – The Justice Department and the Internal Revenue Service (IRS) today announced that the agreement with the Swiss government has been finalized. As a result of the agreement, the United States will receive substantially all of the accounts of interest when it initiated the John Doe summons against UBS on June 30, 2008.

Under the agreement, the IRS will submit a treaty request to the Swiss government describing the specific accounts for which it is requesting information. The Swiss government will then direct UBS to initiate procedures which could result in the turning over of information on thousands of accounts to the IRS. The IRS will receive information on accounts of various amounts and types, including bank-only accounts, custody accounts in which securities or other investment assets were held and offshore company nominee accounts through which an individual indirectly held beneficial ownership in the accounts.

Also, the agreement retains the U.S. Government’s right, if the results are significantly lower than expected and other measures fail, to seek appropriate judicial remedies, including resuming actions to enforce the John Doe summons.

The agreement involves a number of simultaneous legal actions:

• The judicial enforcement of the John Doe summons will be dismissed. While this enforcement motion will be withdrawn, the underlying John Doe summons remains in effect.
• Upon receiving the treaty request, the Swiss government will direct UBS to notify account holders that their information is included in the IRS treaty request. It is expected that these notices will be sent on a rolling basis with some being sent over the coming weeks and others over the coming months. Receipt of this notice will not by itself preclude the account holder from coming into the IRS under the Voluntary Disclosure Program, which is due to end on Sept. 23, 2009.

In addition, the Swiss Government has agreed to review and process additional requests for information from other banks regarding their account holders to the extent that such a request is based on a pattern of facts and circumstances equivalent to those of the UBS case.

Information provided to the IRS through this process will be thoroughly examined for all potential civil and criminal tax violations. The IRS will assess any additional tax, interest and a number of applicable penalties. This includes the penalty for the willful failure to file a Report of Foreign Bank and Financial Accounts (FBAR). This penalty can be up to 50 percent of the value of the account for each year an FBAR was not filed. Under the Voluntary Disclosure Program, the account holders must pay 20% of the amount of tax that was underpaid for the past six years and 20% of the highest value of the account over the past six years, in addition to all their unpaid taxes and interest due on those taxes.

The IRS will also recommend criminal prosecution in those cases where the facts warrant such an action. To date, the Justice Department and the IRS have successfully prosecuted four U.S. customers of UBS whose information was provided to the IRS by the Swiss bank as part of the Deferred Prosecution Agreement.

Individuals whose information is obtained by the IRS through this process will, by longstanding policy, not be eligible for the voluntary disclosure program.

Swiss Agreement

UBS Agreement

WASHINGTON – Fe S. Garrett, a resident of National City, Calif., was convicted today of filing false individual tax returns, failure to pay taxes, and multiple counts of aiding and assisting in the preparation of false tax returns, the Justice Department and Internal Revenue Service (IRS) announced. A federal jury convicted Garrett of 28 counts of the superseding indictment following a nine-day trial before U.S. Judge M. James Lorenz in San Diego.

According to the evidence presented at trial, for tax years 2001 and 2002, Garrett prepared at least 18 federal income tax returns for her clients that were false as to material matters in that the tax returns claimed fraudulent itemized deductions, child care expenses and Schedule E real estate rental expenses in amounts that she knew her clients were not entitled to claim.

Additionally, according to the evidence presented at trial, Garrett was a licensed tax return preparer and licensed real estate broker who operated a tax return preparation and bookkeeping business and a real estate financing business. These businesses operated under multiple names, including Fe's Tax Service, Garrett's Tax Service and Garrett's Realty and Mortgage. Garrett failed to report over $300,000 of her business gross receipts from those businesses on her federal income tax returns for tax years 2001, 2002, 2004 and 2005.

Additionally, the evidence at trial showed that Garrett willfully failed to pay approximately $279,000 in federal income taxes that she owed for tax years 2001 through 2006. Despite filing tax returns for 2001 and 2006 on which she admitted owing tax each year, Garrett spent hundreds of thousands of dollars at local casinos, wired over $100,000 to the Philippines, and did not respond to numerous attempts by the IRS to contact her.

According to the evidence presented at trial, Garrett prepared a false tax return for an undercover IRS agent that included false items similar to those on her client’s returns. In a recording presented at trial, Garrett was heard describing her "style" of preparing tax returns using "loopholes" for claiming deductions on income tax returns.

Judge Lorenz remanded Garrett to the custody of the U.S. Marshals pending sentencing, which is scheduled for Nov 9, 2009. Garrett faces a maximum sentence of 72 years in prison and a maximum fine of $6.1 million.

"While the majority of return preparers provide excellent service to their clients, a few unscrupulous tax preparers file false and fraudulent returns to defraud the government and the tax-paying public, including their own clients," said Ronald A. Cimino, Acting Deputy Assistant Attorney General of the Justice Department's Tax Division. "We are committed to prosecuting those illegal return preparers who betray their clients' trust and their duty to correctly prepare tax returns."

"Today’s guilty verdict sends a clear message to the public that individuals who hold trusted positions in our community and use those positions to abuse our tax system for their personal financial benefit will be prosecuted," said Special Agent in Charge Leslie P. DeMarco. "IRS Criminal Investigation will continue to diligently work tax preparer fraud investigations and ensure the public that our tax system works."

Acting Deputy Assistant Attorney General Cimino commended the IRS-Criminal Investigation special agents who investigated the case, as well as Tax Division trial attorneys Christopher S. Strauss and Elizabeth C. Hadden, who prosecuted the case. Acting Assistant Attorney General DiCicco also thanked the U.S. Attorney’s Office in San Diego for their assistance in successfully prosecuting this matter.

WASHINGTON – A federal grand jury in San Francisco has returned an indictment against a former executive of a large Taiwanese color display tube (CDT) manufacturing company for participating in a global conspiracy to fix prices of CDTs, a type of cathode ray tube used in computer monitors and other specialized applications, the Department of Justice announced today.

The indictment, filed last night in the U.S. District Court in San Francisco, charges Wen Jun (Tony) Cheng, a former Assistant Vice President of Sales and Marketing, with conspiring with unnamed co-conspirators to suppress and eliminate competition by fixing prices, reducing output, and allocating market shares of CDTs. The Department alleges that Cheng participated in the conspiracy beginning at least as early as January 1999 until at least September 2004.

Cheng was previously indicted on Feb. 3, 2009, for his participation in a global conspiracy to fix prices of Thin Film Transistor-Liquid Crystal Display (TFT-LCD) panels.

The indictment alleges, among other things, that Tony Cheng and co-conspirators carried out the CDT conspiracy by attending meetings and engaging in conversations and communications in Taiwan, Korea, Malaysia, China and elsewhere to discuss and agree on the prices, output and market shares of CDTs. Cheng and co-conspirators are also alleged to have implemented an auditing system to verify that production lines had been shut down as agreed, and to have taken steps to conceal the conspiracy.

Cheng is charged with violating the Sherman Act, which carries a maximum penalty of 10 years imprisonment and a fine of $1 million for individuals for violations occurring after June 22, 2004. The maximum fines may be increased to twice the gain derived from the crime or twice the loss suffered by the victims if either or those amounts is greater than the Sherman Act maximum fines.

This case is part of an ongoing joint investigation by the San Francisco Office of the Antitrust Division of the U.S. Department of Justice and the Federal Bureau of Investigation in San Francisco. Anyone with information concerning illegal conduct in the cathode ray tube industry is urged to call the San Francisco Field Office of the Antitrust Division at 415-436-6660.

WASHINGTON – A former member of the U.S. armed services was sentenced today to 28 months in prison for his role in a widespread bribery and extortion conspiracy that operated from January 2002 through March 2004, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division.

Rommel I. Schroer, 33, a former sergeant in the U.S. Air Force, was also ordered to pay a $7,500 fine and to serve three years of supervised release. Schroer was sentenced in U.S. District Court for the District of Arizona in Tucson by Judge Cynthia K. Jorgenson.

The charges arose from Operation Lively Green, an undercover FBI investigation that began in December 2001. Fifty-six additional defendants have been sentenced for their roles in the conspiracy.

Schroer pleaded guilty on Feb. 10, 2009, to one count of conspiring to enrich himself by obtaining cash bribes from persons he believed to be narcotics traffickers in return for his assistance, protection and participation in the activities of what he believed to be an illegal narcotics trafficking organization that distributed cocaine from Arizona to other locations in the southwestern United States. In reality, the narcotics traffickers were undercover FBI agents. According to court documents, in order to protect the shipments of cocaine, Schroer and his co-conspirators wore official uniforms, carried official forms of identification, and used official vehicles, when necessary, to prevent police stops, searches and seizures of the narcotics as they drove the cocaine shipments through checkpoints manned by the U.S. Border Patrol, the Arizona Department of Public Safety and Nevada law enforcement officers.

These cases are part of a joint investigation being conducted by the Southern Arizona Corruption Task Force, which is comprised of the FBI, the Drug Enforcement Administration, the U.S. Immigration and Customs Enforcement at the Department of Homeland Security and the Tucson Police Department. The Arizona Air National Guard, Air Force Office of Special Investigations, Defense Criminal Investigative Service and Internal Revenue Service Criminal Investigation are also participating in the investigation. The case is being prosecuted by Trial Attorneys Michael Ferrara and Peter Koski of the Criminal Division’s Public Integrity Section, headed by Chief William M. Welch II. The U.S. Attorney’s Office for the Western District of Oklahoma has also secured the guilty pleas of 14 defendants in a related investigation, Operation Tarnish Star.

WASHINGTON - Bill Melot, a resident of Hobbs, N.M., appeared in federal court today before Magistrate Karen B. Molzen in Las Cruces, N.M., on tax and false statement charges, the Justice Department and Internal Revenue Service (IRS) announced. Melot, a farmer who owns approximately 250 acres in Lea County, N.M., was charged with tax evasion, failing to file tax returns, corruptly impeding the IRS, and making false statements to the U.S. Department of Agriculture.

According to the indictment, Melot owes the IRS more than $18 million in federal taxes and has not filed a personal tax return since 1986. However, Melot has collected over $225,000 in federal farm subsidies from the U.S. Department of Agriculture.

According to the indictment, Melot took a number of steps to conceal his ownership of the 250 acres in Lea County, including notarizing forged deeds and titling the property in the name of nominees. The indictment further alleges that Melot used false Social Security Numbers and fictitious Employer Identification Numbers to hide his assets from the IRS. The indictment further alleges that Melot provided fictitious Employer Identification Numbers to the U.S. Department of Agriculture to collect federal farm aid. Additionally, Melot maintained a bank account with Nordfinanz, a Swiss financial institution.

According to the indictment, Melot also intermittently owned and operated gas stations in Lea County and elsewhere in the United States, including two gas station in Hobbs.

If convicted on all counts, Melot faces a maximum term of 49 years in prison and a maximum fine of $2,850,000.

The case is being prosecuted by Tax Division trial attorney Jed Silversmith. The case was investigated by the IRS Criminal Investigation Division and the U.S. Department of Agriculture Office of Inspector General.

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

WASHINGTON—Cooper Land Development, Inc., a luxury home development company headquartered in Rogers, Ark., has agreed to pay a civil penalty and implement a storm water compliance program at its construction sites to settle allegations that it violated the Clean Water Act, the Justice Department and U.S. Environmental Protection Agency announced today.

According to a consent decree filed today in U.S. District Court in Kansas City, Mo., Cooper Land Development has agreed to pay a $513,740 civil penalty to settle the allegations that it failed to properly manage construction site storm water runoff and implement erosion control at five of its housing developments located in Missouri, West Virginia and Arkansas. The penalty will be paid in four annual installments, plus interest, according to the consent decree.

Additionally, the consent decree requires Cooper Land Development to implement a company-wide storm water compliance program that provides for improved environmental performance and increased oversight of its operations at all of its current and future construction sites. In addition to the Creekmoor and Glade Springs Village projects, those sites include Bella Vista Village, Benton County, Ark.; Hot Springs Village, Garland and Saline counties, Ark.; and Sienna Lake, Little Rock, Ark.

The settlement resolves a civil complaint filed Sept. 22, 2008, in which the United States alleged that inspections in 2006 found Cooper Land Development had violated the terms of separate National Pollution Discharge Elimination System permits issued by respective state environmental authorities for its Creekmoor housing development in Raymore, Mo., and the Glade Springs Village housing development near Daniels, W. VA.

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

EPA estimates that by implementing the terms and conditions of the settlement, approximately 8.67 million pounds of construction sediments will be kept from polluting the nation’s waterways.

Besides causing soil erosion and clogging streams with sediment, construction site storm water runoff can pick up other pollutants such as debris, pesticides, chemicals, solvents and other substances. Sediment-laden runoff can result in the loss of in-stream habitat for fish and other aquatic species, killing fish directly, destroying their spawning beds and blocking sunlight, which can result in reduced growth of beneficial aquatic grasses.

"Storm water discharges from construction sites cause serious degradation of our nation’s waterways," said John C. Cruden, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. "This agreement will result in better management practices that will ultimately lead to a cleaner environment."

"The failure to properly control storm water runoff at construction sites can have serious consequences for the environment," said William Rice, acting administrator for EPA Region 7. "EPA will enforce the laws and regulations to ensure that storm water runoff is properly managed in a way that protects our fragile ecosystems."

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

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

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

Learn more about EPA’s civil enforcement of the Clean Water Act: http://www.epa.gov/compliance/resources/reports/endofyear/eoy2008/2008enfwaterhighlights.html

WASHINGTON – Five members of an extended family were sentenced to federal prison late yesterday, all receiving lengthy sentences for their roles in an international sex trafficking ring that lured young Guatemalan women and girls to the Los Angeles area and forced them into prostitution, the Justice Department announced.

The five defendants sentenced yesterday – four Guatemalan nationals and one Mexican national – were found guilty in February of various charges, including conspiracy; sex trafficking by force, fraud or coercion; and importation of aliens for purposes of prostitution. Gladys Vasquez Valenzuela, 38, was sentenced to 40 years in prison; Gabriel Mendez, the Mexican national, 35, was sentenced to 35 years; and the other three defendants, Mirna Jeanneth Vasquez Valenzuela, aka Miriam, 28, Maria de los Angeles Vicente, aka Angela, 30, and Maribel Rodriquez Vasquez, 29, were each sentenced to 30 years in prison.

Evidence showed that the defendants intimidated and controlled their victims by threatening to beat them and kill their loved ones in Guatemala if they tried to escape. Some defendants also used witch doctors to threaten the girls that a curse would be placed on them and their families if they tried to escape. At least two of the defendants further restrained the victims by locking them in at night and blocking windows and doors. The defendants also used manipulation of debts, verbal abuse and psychological manipulation to reinforce their control over the victims. The scheme included strict controls over the victims’ work schedules and ominous comments about consequences that befell the families of other victims who attempted to escape.

The defendants collected the profits generated by the acts of prostitution the victims were compelled to perform, and maintained control over the proceeds, keeping tens of thousands of dollars while the victims received next to nothing.

"The young girls and women in this case were victimized and exploited in a horrific way, and these sentences should send a stern message to all sex traffickers that they cannot escape justice for such egregious human rights violations," said Loretta King, Acting Assistant Attorney General for the Civil Rights Division. "Attorneys in the Civil Rights Division will continue to work with U.S. Attorney's Offices across the nation to stamp out this vicious and intolerable crime, and to seek significant prison sentences for anyone engaging in these despicable acts."

"In this disturbing case, the defendants lured young, uneducated and impoverished women and girls to the United States, where they were forced to work as prostitutes in terrifying conditions," said U.S. Attorney Thomas P. O’Brien for the Central District of California. "There were at least 10 victims who were forced into becoming prostitutes under a variety of threats, as well as actual physical attacks that included rapes."

"These sentences are a stern reminder about the consequences facing those involved in the unconscionable practice of human trafficking," said Robert Schoch, special agent in charge for the U.S. Immigration and Customs Enforcement (ICE) Office of Investigations in Los Angeles. "While we can’t erase the suffering these young women experienced, by aggressively investigating and prosecuting these cases, ICE and the other members of the Los Angeles Human Trafficking Task Force are ensuring that those involved in schemes like this pay a significant price for the pain they cause."

Four additional defendants have pleaded guilty for their role in the scheme. Flor Morales Sanchez was sentenced in May to two years in prison; Pablo Bonifacio was sentenced last November to 33 months in prison; Albertina Vasquez Valenzeula, also known as Cristina, was sentenced in February to 33 months in prison. The final defendant, Luis Vicente Vasquez, is scheduled to be sentenced on Thursday.

The case was prosecuted by Assistant U.S. Attorneys Cheryl O’Connor Murphy, Curtis A. Kin, Anthony J. Lewis, Sara J. Heidel and Special Litigation Counsel Andrew J. Kline from the Civil Rights Division. The case was investigated by the FBI, ICE and the U.S. Department of Labor, Office of the Inspector General.

WASHINGTON – Miami residents Jose and Arnaldo Rosario pleaded guilty today to participating in a conspiracy to defraud the Medicare program of approximately $15.3 million, 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. Both defendants pleaded guilty to one count of conspiracy to commit health care fraud before U.S. District Judge Gerald Rosen.

According to information contained in plea documents, Jose Rosario acknowledged that in approximately September 2006, he and a co-defendant incorporated Sacred Hope Medical Center Inc. (Sacred Hope) in the state of Michigan. Sacred Hope purported to specialize in providing injection and infusion therapy services to Medicare patients. Jose Rosario admitted that he and the co-defendant were the owners of the clinic, and agreed to split the profits generated there evenly between them. During the time that Sacred Hope was open, the clinic routinely billed the Medicare program for services that were medically unnecessary and/or never provided. Jose Rosario admitted to being aware that the clinic had purchased only a small fraction of the medications that the clinic billed the Medicare program for providing. According to information contained in plea documents, patients were prescribed medications at the clinic based not on medical need, but based on what medications were likely to generate Medicare reimbursements. Jose Rosario admitted he participated in hiring co-conspirators to falsify the medical files to make the treatments purportedly being provided at Sacred Hope appear legitimate, when in fact he knew they were not.

In his plea, Jose Rosario also admitted that Medicare beneficiaries were neither referred to Sacred Hope by their primary care physicians, nor 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 documents falsely indicating that they had received the services billed to Medicare. According to information contained in the plea documents, kickbacks came in the form of cash and prescriptions for narcotic drugs. Jose Rosario admitted he directed his nephew, co-defendant Arnaldo Rosario, to oversee and facilitate the payment of cash kickbacks to the Medicare beneficiaries. Jose Rosario admitted that he would routinely obtain cash that he would provide to Arnaldo Rosario for the purpose of paying the beneficiaries cash kickbacks.

Arnaldo Rosario admitted that he was responsible for overseeing and facilitating the payment of cash kickbacks to the Medicare beneficiaries at Sacred Hope. According to information contained in his plea documents, Arnaldo Rosario admitted to obtaining cash on a daily basis from his uncle or other co-conspirators to pay the beneficiaries cash kickbacks. After obtaining the cash, Arnaldo Rosario admitted that he would then distribute the money to two co-defendants who were responsible for recruiting and paying the beneficiaries the kickbacks. Arnaldo Rosario admitted to being directed to pay bonuses to the co-defendants if they were able to recruit additional Medicare beneficiaries to come to Sacred Hope.

In addition to the conduct at Sacred Hope, Jose Rosario admitted to being a part owner of Dearborn Medical Rehab Center (DMRC), a Dearborn, Mich., infusion clinic. Arnaldo Rosario admitted to being a patient recruiter at DMRC. In addition, both defendants admitted to playing similar roles at a third Detroit-area infusion clinic, Xpress Center. As at Sacred Hope, both defendants admitted they were fully aware that the DMRC and Xpress Center routinely billed the Medicare program for services that were medically unnecessary and, in many instances, never provided. As at Sacred Hope, both defendants admitted that the purpose of the DMRC and Xpress Center was not to provide legitimate health care to patients, but rather to defraud the Medicare program.

Between approximately March 2006 and March 2007, the two defendants admitted to causing the submission of approximately $15,311,605 in false and fraudulent claims to Medicare for services supposedly provided at Sacred Hope, DMRC and Xpress Center. Based on the fraudulent claims, approximately $10,765,325 was paid.

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 more than 293 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 Strike Force teams across the separate phases are led by a federal prosecutor from the Criminal Division’s Fraud Section or the U.S. Attorney’s Office.  Each team has an agent from the FBI and HHS-OIG.

To learn more about the HEAT team, go to: www.stopmedicarefraud.gov

WASHINGTON – U.S. Attorney General Eric Holder today announced that $1 million in Recovery Act funds has been awarded to Westat Inc. and its partner Northern Arapaho Tribal Industries (NATI) to improve the collection of tribal crime and justice data used to determine tribal eligibility for the Edward Byrne Memorial Justice Assistance (JAG) program.

The grant will address gaps in Indian Country crime statistics and current reporting methods, the reasons why many tribes are currently ineligible to receive JAG grants.  In addition to addressing tribal eligibility, Westat and NATI will collect information on American Indians in the criminal justice system and crimes committed on Indian Country reservations, in tribal communities and on trust land. 

“These funds will have a long-term positive impact in Indian Country by increasing tribes’ eligibility to receive vital JAG funding,” Attorney General Holder said.  “This project will also help the Department better understand and assist tribes with their criminal justice challenges.”

Funding for the grant is part of the Recovery Act Edward Byrne Memorial Justice Assistance Grant Program managed by the Office of Justice Programs’ (OJP) Bureau of Justice Assistance (BJA).   The Bureau of Justice Statistics (BJS) will be the program manager of the grant and the project.  The project will involve the BJS, BJA, the Office of Tribal Justice, the FBI, the Department of Interior’s Bureau of Indian Affairs, and certain state and tribal governments.

The statutory procedure for allocating JAG grants is based on a formula of population and violent crime statistics, in combination with a minimum allocation to ensure that each state and territory receives an appropriate share of funding.  Sixty percent of the allocation is awarded directly to a state and 40 percent is set aside for units of local government.  States are required to sub-grant a portion of the funds to local units of government, such as a city, county, township or town.  Tribal governments are eligible to receive pass-through funding from the state.

The JAG program, which is managed by BJA, is the primary provider of federal criminal justice funding to state and local jurisdictions.  JAG funds support all components of the criminal justice system, from multi-jurisdictional drug and gang task forces to crime prevention and domestic violence programs, courts, corrections, treatment, and justice information sharing initiatives. Projects may address crime through the provision of services directly to individuals and/or communities and by improving the effectiveness and efficiency of criminal justice systems, processes, and procedures.  For more details on the JAG Program or to track the use of Recovery Act funds, visit www.ojp.gov/recovery . 

WASHINGTON - Craig Shaber, an attorney from San Diego was arraigned today before Magistrate Judge Anthony J. Battaglia in that city on charges of conspiracy to defraud the Internal Revenue Service (IRS) and tax evasion for years 2000 to 2002, the Justice Department and IRS announced. On Aug. 14, 2009, Steven Wright, an accountant, pleaded guilty before U.S. Magistrate Judge Jan M. Adler to one count of tax evasion for the 2000 tax year. Wright admitted to evading $387,000 in taxes for 2000 to 2002.

According to the indictment, the plea agreement and court documents, between 1999 and 2002, Shaber and Wright fraudulently acquired control of numerous public shell companies by, among other things, installing nominee officers and directors and submitting false registration statements and reports to the U.S. Securities and Exchange Commission (SEC) and the National Association of Security Dealers (NASD). Shaber and Wright earned millions of dollars from the sale of these public shell companies and deposited the proceeds into bank accounts in the names of Bonaventure Capital Ltd. and one of Shaber’s client trust accounts. In 2002, Shaber and Wright received $260,000 in cash from the sale of one of these companies. In 2003, the SEC filed a complaint related to Shaber’s and Wright’s conduct selling these public shell companies.

According to, the indictment, the plea agreement and court documents, Shaber and Wright then evaded taxes on the millions of dollars earned from the sale of the public shell companies. They withdrew these proceeds for their own personal benefit and in a way that it concealed that they received income from the stock scheme. Shaber and Wright disbursed these funds to various bank accounts in the names of nominee entities that they controlled, and they used accounts in the names of nominee entities to pay for personal expenses to help conceal their receipt of this income. Some of these nominee entities held title to various assets, which helped conceal Shaber and Wright’s receipt of taxable income and their control over some of these assets.

According to the indictment and court documents, Shaber used the proceeds from the shell company scheme to purchase numerous luxury items, including his personal residence in Coronado, Calif., a McDonnell Douglas helicopter, a World War II-era Tigercat airplane, a Plymouth Prowler, a Porsche 996 Turbo and artwork. Additionally, Wright purchased significant assets, including property in Poway, Calif., a condominium in Mammoth Lakes, Calif., a BMW X5 and artwork.

Shaber is next scheduled to be in court for a status hearing before Magistrate Judge Battaglia on Aug. 27, 2009 at 1:30 p.m. If convicted on all counts, Shaber faces a maximum sentence of 20 years in prison and a maximum fine of $1,000,000.

Wright’s sentencing is scheduled for Nov. 9, 2009, before U.S. District Court Judge Marilyn L. Huff. Wright faces a maximum sentence of 5 years in prison and a maximum fine of $250,000.

These cases are being prosecuted by Tax Division trial attorneys Christopher Maietta and Timothy J. Stockwell, and are being investigated by the IRS, Criminal Investigation Division. Additional information about the Justice Department’s Tax Division and its enforcement efforts may be found at http://www.usdoj.gov/tax.

WASHINGTON – A fifth individual pleaded guilty today to illegally accessing numerous confidential passport application files, Assistant Attorney General Lanny A. Breuer of the Criminal Division announced. Kevin M. Young, 42, of Temple Hills, Md., pleaded guilty before U.S. Magistrate Judge Alan Kay in the District of Columbia to a one-count criminal information charging him with unauthorized computer access. Young is scheduled to be sentenced on Dec. 9, 2009.

According to court documents, Young has worked full-time for the State Department since February 1987. For the past eight years, Young has been a contact representative for the Passport Special Issuance Agency. In pleading guilty, Young admitted he had access to official State Department computer databases in the regular course of his employment, including the Passport Information Electronic Records System (PIERS), which contains all imaged passport applications dating back to 1994. The imaged passport applications on PIERS contain, among other things, a photograph of the passport applicant as well as certain personal information including the applicant’s full name, date and place of birth, current address, telephone numbers, parent information, spouse’s name and emergency contact information. These confidential files are protected by the Privacy Act of 1974, and access by State Department employees is strictly limited to official government duties.

In pleading guilty, Young admitted that between March 11, 2003, and Dec. 21, 2005, he logged onto the PIERS database and viewed the passport applications of more than 125 celebrities, actors, comedians, professional athletes, musicians, models, a politician and other individuals identified in the press. Young admitted that he had no official government reason to access and view these passport applications, but that his sole purpose in accessing and viewing these passport applications was idle curiosity.

Young is the fifth current or former State Department employee to plead guilty in this continuing investigation. On Sept. 22, 2008, Lawrence C. Yontz, a former Foreign Service Officer and intelligence analyst, pleaded guilty to unlawfully accessing nearly 200 confidential passport files. Yontz was sentenced on Dec. 19, 2008, to 12 months of probation and ordered to perform 50 hours of community service. On Jan. 14, 2009, Dwayne F. Cross, a former administrative assistant and contract specialist, pleaded guilty to unlawfully accessing more than 150 confidential passport files. On March 23, 2009, Cross was sentenced to 12 months of probation and ordered to perform 100 hours of community service. On Jan. 27, 2009, Gerald R. Lueders, a former Foreign Service Officer, watch officer and recruitment coordinator, pleaded guilty to unlawfully accessing more than 50 confidential passport files. Lueders was sentenced on July 8, 2009, to one year of probation and ordered to pay a $5,000 fine. On July 10, 2009, William A. Celey, a file assistant, pleaded guilty to unlawfully accessing more than 75 confidential passport files. Celey is scheduled to be sentenced on Oct. 23, 2009.

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

WASHINGTON – The North Eastern Massachusetts Law Enforcement Council (NEMLEC) will pay the United States $200,000 to settle allegations that it made false claims related to the use of Justice Department grant funds. Based in Boston, NEMLEC is a non-profit corporation and a law enforcement council. It is comprised of a consortium of 47 police departments in Middlesex and Essex Counties, as well as two county sheriff’s departments.

The settlement relates to NEMLEC’s 2003 certifications that it used the grant funds from the Department of Justice for approved purposes. The Justice Department awarded these funds to NEMLEC in 2001 and 2002 for the "School Threat Assessment and Response System" (STARS) program.

According to the consortium’s Web site, NEMLEC created and implemented STARS in 1999 to assist the region’s over 500 schools in enhancing school safety, preventing threats and violence in schools, and ensuring that the schools were prepared to identify, assess, and respond to threats and emergencies. An investigation by the Justice Department’s Office of the Inspector General concluded that NEMLEC had not properly accounted for several hundred thousand dollars of grant funds.

"The Civil Division plays a critical role in protecting taxpayer funds," said Tony West, Assistant Attorney General for the Civil Division. "With the Justice Department making significant grants to local law enforcement agencies, we will continue to ensure that all of the funds are spent only on the projects for which they were intended."

The Justice Department’s Office of Juvenile Justice and Delinquency Prevention provided the funds at issue to NEMLEC through the Edward Byrne Memorial State and Local Law Enforcement Assistance Grant Program. The Byrne Formula Grant Program is a partnership among federal, state, and local governments to create safer communities.

WASHINGTON – Albert Gonzalez, 28, of Miami, Fla., was indicted today for conspiring to hack into computer networks supporting major American retail and financial organizations, and stealing data relating to more than 130 million credit and debit cards, announced Assistant Attorney General of the Criminal Division Lanny A. Breuer, Acting U.S. Attorney for the District of New Jersey Ralph J. Marra Jr. and U.S. Secret Service Assistant Director for Investigations Michael Merritt.

In a two-count indictment alleging conspiracy and conspiracy to engage in wire fraud, Gonzalez, AKA "segvec," "soupnazi" and "j4guar17," is charged, along with two unnamed co-conspirators, with using a sophisticated hacking technique called an "SQL injection attack," which seeks to exploit computer networks by finding a way around the network’s firewall to steal credit and debit card information. Among the corporate victims named in the 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.

The indictment, which details the largest alleged credit and debit card data breach ever charged in the United States, alleges that beginning in October 2006, Gonzalez and his co-conspirators researched the credit and debit card systems used by their victims; devised a sophisticated attack to penetrate their networks and steal credit and debit card data; and then sent that data to computer servers they operated in California, Illinois, Latvia, the Netherlands and Ukraine. The indictment also alleges Gonzalez and his co-conspirators also used sophisticated hacker techniques to cover their tracks and to avoid detection by anti-virus software used by their victims.

If convicted, Gonzalez faces up to 30 years in prison on the wire fraud conspiracy charge and an additional five years in prison on the conspiracy charge, as well as a fine of $250,000 for each charge.

Gonzalez is currently in federal custody. In May 2008, the U.S. Attorney’s Office for the Eastern District of New York charged Gonzalez for his alleged role in the hacking of a computer network run by a national restaurant chain. Trial on those charges is scheduled to begin in Long Island, N.Y., in September 2009.

In August of 2008, the Justice Department announced an additional series of indictments against Gonzalez and others for a number of retail hacks affecting eight major retailers and involving the theft of data related to 40 million credit cards. Those charges were filed in the District of Massachusetts. Gonzalez is scheduled for trial on those charges in 2010.

The charges announced today relate to a different pattern of hacking activity that targeted different corporate victims and involved different co-conspirators.

This case is being prosecuted by Assistant U.S. Attorneys Erez Lieberman and Seth Kosto for the U.S. Attorney’s Office for the District of New Jersey and by Senior Counsel Kimberly Kiefer Peretti of the Criminal Division’s Computer Crime and Intellectual Property Section. The case is being investigated by the U.S. Secret Service.

---

WASHINGTON – On Aug. 13, 2009, the 1st U.S. Circuit Court of Appeals, sitting en banc, in United States v. Textron, Inc. and Subsidiaries (No. 07-2631), refused to afford work product protection to tax accrual workpapers that the IRS sought in an administrative summons issued during an audit of Textron. The 1st Circuit held that the work product privilege is designed to protect work done for litigation, not work done for the preparation of financial statements, and it recognized that providing the IRS with access to the workpapers serves the legitimate, and important, function of deterring abusive tax shelters.

“We are extremely pleased that the 1st Circuit has concluded that tax accrual workpapers prepared by a public corporation to support the corporation's tax reserve figures in its audited financial statements do not constitute privileged attorney work product and are thus disclosable to the IRS,” remarked Gilbert S. Rothenberg, Acting Deputy Assistant Attorney General of the Department of Justice's Tax Division.

WASHINGTON—A pipeline company and two of its former operating firms will jointly pay a civil penalty of $3.65 million to resolve violations of the Clean Water Act resulting from anhydrous ammonia spills in Nebraska and Kansas, the Justice Department and U.S. Environmental Protection Agency announced today. The spills which occurred in 2004 resulted in significant fish kills in surrounding waterways.

Magellan Ammonia Pipeline, of Tulsa, Okla.; Enterprise Products Operating, of Houston, Tex.; and Mid-America Pipeline Company, also known as MAPCO, also of Houston agreed to the settlement in the form of a consent decree filed today in U.S. District Court in Kansas City, Kan.

In a complaint filed jointly with the consent decree, the United States alleges that Magellan, which owned the pipeline, along with operating firms Enterprise and MAPCO, were responsible for two anhydrous ammonia spills in 2004. The first spill occurred on Sept. 27, 2004, near Blair, Neb., killing an estimated 1,000 fish along North Creek and a golf course pond; and the second spill occurred on Oct. 27, 2004, near Kingman, Kan., killing more than 20,000 fish along a 12.5-mile section of Smoots Creek.

The rupture of the pipeline near Blair resulted in the hospitalization of one individual and emergency responders evacuated homes within a one mile circumference of the break. Additionally, the Kingman rupture resulted in a 40-foot high vapor cloud that was a mile long and resulted in evacuations as well.

The United States further alleges that as operators of the pipeline system, Enterprise and MAPCO violated the federal Comprehensive Environmental Response, Liability and Compensation Act (CERCLA) by failing to immediately notify the National Response Center about the spills.

"These two pipeline spills were significant and proper notification was not given to National Response Center when they occurred," said John C. Cruden, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. "Today’s settlement will ultimately result in better training of employees and implementation of prevention systems to reduce the possibility of future discharges of harmful chemicals."

"The Kingman spill caused severe environmental damage, killing all fish for more than 10 miles in Smoots Creek, which is one of Kansas’ high-quality streams. The penalty to be paid under this settlement reflects the seriousness of the violation," said Ron Hammerschmidt, environmental services division director for EPA Region 7 in Kansas City, Kan. "The actions the company will take under the settlement should help prevent this kind of spill from happening in the future."

Under the terms of the settlement, Magellan has agreed to spend an additional $550,000 on improvements to prevent or minimize releases along selected segments of its pipeline system, and will establish a program to minimize third-party damage to the system. Magellan presently operatesthe ammonia pipeline, having terminated its operating agreement with Enterprise and MAPCO in 2007.

Additionally, through the consent decree, Magellan has promised to make a series of required improvements in its employee training, leak response procedures, and protocols for detecting and responding to leaks and ruptures.

The consent decree, lodged today in U.S. District Court for the District Kansas, 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 Department of Justice Web site at http://www.usdoj.gov/enrd/Consent_Decrees.html.

WASHINGTON – The Justice Department announced that on Aug.11, 2009, two individuals were sentenced in connection with South Florida business opportunity scams. Stewart Pope was sentenced in connection with his participation in fraudulent business opportunity sales at a Miami firm called Global Resources ("Global"). Pope, who pleaded guilty to mail fraud as well as conspiracy to commit mail and wire fraud, was sentenced to 27 months in prison and ordered to pay $4,313,093 in restitution.

Pope was listed as the President of Global in the company’s marketing materials, communications with potential customers, and disclosure documents. In reality, Pope’s name was used to hide the involvement of Global’s true owners and principals, who, among other things, had a history of selling various sorts of failed business opportunities. Pope’s conviction and sentence brings to eight the number of individuals [Richard Goodman, William Judd, Stewart Pope, Lisa Cohan, Larry Taylor, Frank DiMezza, Laura Fadlon and John Maginnis] convicted in this scam that victimized over 200 people and caused more than $4,000,000 in losses.

Global promoted business opportunities to consumers across the country through television commercials and other media, touting the profits that could be earned by purchasing a Global distributorship, and urging consumers to call a telephone number that appeared in the advertisements. Potential purchasers were told that for a purchase price of approximately $15,000, Global would provide three terminals, numerous prepaid cell phones, and advertising material, and that potential purchasers would earn their investment back in approximately six months to a year. Global salespeople told consumers that Global would find viable, high-traffic locations to place the terminals; relocate any terminals that underperformed; only sell distributorships in a limited geographic area; and provide ongoing technical support and customer service. In fact, the locations where terminals were placed drew almost no business and many of the prepaid cell phones did not work.

A business opportunity salesperson was also sentenced on Aug.11, 2009, in connection with a similar scheme. Debra Filik was sentenced in connection with her role as a salesperson for Secure Payment Services of America, LLC ("Secure Pay"). Filik, who pleaded guilty to mail fraud, was sentenced to 30 months imprisonment and ordered to pay $507,8933 in restitution. Filik was a salesperson referred to as a "closer." She routinely misrepresented a number of aspects of Secure Pay’s business opportunity to potential purchasers. Filik was the second person sentenced in connection with Secure Pay, a scam that victimized over 100 people and caused more than $1,000,000 in losses.

Like Global, Secure Pay victimized consumers from across the country. Potential purchasers were told that for a purchase price of approximately $13,000, Secure Pay would provide three bill payment terminals. Filik told potential buyers that they would be provided with viable, high traffic locations to place the terminals and that, when the public used the terminals to pay personal bills, the terminal owner would earn commissions. Filik told prospective buyers that they would earn their investments back in 14 months or less. She misrepresented the profits purchasers would earn, the viability of locations, and ongoing customer support and technical assistance that Secure Pay would provide. Filik also gave out the names of the company's references, who falsely claimed to be successful Secure Pay distributors.

"We are continuing to prosecute individuals who take advantage of hard economic times by offering false hope to people looking for income," said Assistant Attorney General Tony West. "The lure of a business opportunity is the promise of a stream of income coming from kiosks, vending machines, automated teller machines, or other mechanisms for selling goods or services to the public. The problem is that the promises of good locations and potential profits are often completely bogus, as are the references and locators involved in these cases. We have prosecuted over 100 people in this sort of scam in recent years. These cases are just two examples," West added.

In addition to Pope, seven other individuals were previously convicted and sentenced in connection with the Global Resources fraud. Two of the principals of the firm, Richard Goodman and William Judd, were sentenced to 70 months and 46 months in prison, respectively. John Maginnis, Larry Taylor, and Lisa Cohan, salespeople referred to as closers, were sentenced to 84 months, 51 months, and 16 months in prison, respectively. Closers made several misrepresentations about the profits that would be generated by the business, territorial limitations, the viability of locations, and ongoing customer support and technical assistance that Global would provide. Closers also gave out the names of Global’s references, who falsely claimed to be successful Global distributors.

Defendants Frank DiMezza and Laura Fadlon, a/k/a "Laura Sadlon," were Global references who fraudulently held themselves out as successful Global distributors. In reality, neither DiMezza nor Fadlon ever purchased a Global distributorship, and they were paid to lie to prospective purchasers. DiMezza and Fadlon were each sentenced to 27 months in prison. All defendants were ordered to pay restitution to the victims of the offenses.

Defendant Noel Beres was another participant in the Secure Pay scheme who was charged and sentenced to prison. He was a Secure Pay owner and received a final sentence of 34 months in prison.

Acting U.S. Attorney Jeffrey H. Sloman, from the Southern District of Florida, said: "Business opportunity schemes, which scam innocent consumers looking to improve their financial situation, are difficult for even educated consumers to detect. However, business opportunity promoters need to realize that this type of fraud will be detected by law enforcement, vigorously prosecuted, and result in serious jail time in this District."

"The Postal Inspection Service remains vigilant to uncover individuals who use the mail to commit fraud on the American public," said U.S. Postal Inspector in Charge Henry Gutierrez, based in Miami. "We have devoted substantial resources in recent years to uncovering the activities of individuals like these defendants who falsely promise that consumers will be able to make money by investing in what often seems to be the latest trend, such as cell phones, DVD rental machines or Internet kiosks. The desire of Americans to start their own businesses should not be exploited in this fashion," added Inspector in Charge Gutierrez.

Assistant Attorney General West commended the investigative efforts of the Postal Inspection Service, as well as the Federal Trade Commission, which brought a related civil suit earlier and made a criminal referral. The Global Resources case was prosecuted by Josh Burke and Jill Furman, and the Secure Pay case was prosecuted by Richard Goldberg and Matthew Ebert, of the United States Department of Justice, Office of Consumer Litigation.

Two former employees of Edward H. Okun, who was sentenced to 100 years in prison on Aug. 4, 2009, after a three-week jury trial, were sentenced today before U.S. District Judge Robert E. Payne for their roles in a scheme to defraud and obtain approximately $126 million in client funds held by The 1031 Tax Group LLP (1031TG).

Lara Coleman, the former chief operating officer of Investment Properties of America (IPofA), was sentenced to 10 years in prison and ordered to pay full restitution. Coleman pleaded guilty on Jan. 6, 2009, to conspiring to commit mail and wire fraud and to making a material false statement to federal investigators.

According to the plea agreement and statement of facts, Coleman and others used 1031TG and its subsidiaries in a scheme to obtain millions of dollars of client funds by false pretenses. Section 1031 of the Internal Revenue Code allows investment property owners to defer the capital gains tax that would otherwise be due on properties sold, if the proceeds are used to purchase new property in a specified time frame. To facilitate such exchanges, investment property owners deposit the proceeds from the sale of their property with qualified intermediaries and sign exchange agreements, which include various promises by the qualified intermediaries to clients regarding the safekeeping of exchange funds in trust.

In the plea agreement and statement of facts, Coleman admitted that 1031TG falsely represented that it would hold client funds solely to complete the clients' 1031 exchanges. Coleman admitted that after obtaining clients’ exchange proceeds with that false promise, she and others misappropriated approximately $132 million in client funds to support the lavish lifestyle of the owner of 1031TG, pay operating expenses for the owner’s various companies, invest in commercial real estate and purchase additional qualified intermediary companies to obtain access to additional client funds. In addition, Coleman admitted that she lied to federal investigators about statements she made in 2006 to internal attorneys for Investment Properties of America about the amount of money she and others had misappropriated.

Robert D. Field II was sentenced today to five years in prison and was ordered to pay full restitution for his participation in the conspiracy to defraud 1031TG customers. Field was the chief financial officer of a holding company that was set up, in part, to oversee both IPofA and 1031TG, although neither company was ever officially made a subsidiary of the holding company. The sentencing of Richard Simring, the chief legal officer, has been continued. Field pleaded guilty on July 3, 2008, and Simring pleaded guilty on July 24, 2008.

The case is being prosecuted by Assistant U.S. Attorneys Michael S. Dry and Jessica A. Brumberg for the Eastern District of Virginia and Trial Attorney Brigham Q. Cannon of the Criminal Division’s Fraud Section. This continuing investigation is being conducted by the U.S. Postal Inspection Service, the Internal Revenue Service and the FBI.

WASHINGTON – Michael D. Doyle, 41, of Woburn, Mass., was sentenced today to four years in prison for possessing images of child pornography, Assistant Attorney General of the Criminal Division Lanny A. Breuer, Acting U.S. Attorney for the District of Massachusetts Michael K. Loucks and Bruce M. Foucart, Special Agent-in-Charge of the Boston Field Office of the U.S. Department of Homeland Security’s Immigration and Customs Enforcement (ICE) announced.

Doyle also was sentenced to nine years of supervised release following his term in prison by U.S. District Court Judge George A. O’Toole Jr. The court accepted Doyle’s guilty plea to a one-count information charging possession of child pornography, which was filed on April 22, 2009.

This case was brought as part of a nationwide ICE investigation called "Operation Emissary," which targeted a Web site that offered images and movies of hardcore child pornography. The targeted Web site alerted would-be customers that subscribing to the site was illegal and warned them to be discreet about their purchases. Doyle admitted in his plea that he had subscribed to this Web site and possessed images and videos depicting prepubescent minors engaging in sexually explicit conduct.

The case was investigated by ICE’s Boston Field Office, an d w as prosecuted by Assistant U.S. Attorney Angel Kelley Brown of the District of Massachusetts and Trial Attorney Bonnie L. Kane of the Criminal Division’s Child Exploitation and Obscenity Section.

WASHINGTON – The Justice Department today announced that the operator and manager of the Rathbone Retirement Community in Evansville, Ind., has agreed to pay up to $116,000 to resolve a housing discrimination lawsuit. The November 2008 lawsuit alleged that the defendants violated the Fair Housing Act by prohibiting the use of motorized wheelchairs and scooters in residents’ apartments and in the home’s common dining room during meals.

"Persons with disabilities who live in retirement communities are entitled to the protections of the Fair Housing Act," said Loretta King, Acting Assistant Attorney General for the Civil Rights Division. "This agreement will ensure equal access to housing for those individuals who use mobility aids to move about independently in their daily lives."

"This enforcement action provides yet another real-life example of our commitment to support the rights of persons with disabilities," said U.S. Attorney Timothy M. Morrison for the Southern District of Indiana.

The agreement, which must be approved by the U.S. District Court for the Southern District of Indiana, requires Rathbone Retirement Community Inc. and its resident manager Norma Helm to pay a total of $70,000 to three former residents. It also requires them to establish a $25,000 settlement fund for others who may have been injured by the policy and pay the government a $21,000 civil penalty. The agreement requires the defendants to provide fair housing training for employees, adopt nondiscrimination and reasonable accommodation policies, and maintain and submit records to the United States for the two-year term of the agreement.

"Wheelchair access is vital for many seniors and people with disabilities. This settlement underscores the importance of that right and the government’s resolve to it," stated John Trasvina, Assistant Secretary for Fair Housing & Equal Opportunity at the U.S. Department of Housing and Urban Development (HUD).

The case originated when two former residents of the Rathbone Retirement Community filed separate complaints with HUD. HUD investigated the complaints, determined there was reasonable cause to believe that unlawful housing discrimination had occurred and referred the matter to the Justice Department.

Persons with disabilities who believe they may have been discriminated against in connection with their dealings with the Rathbone Retirement Community should call 1-800-896-7743 and select menu option 94 to determine how they can make a claim for damages.

The federal Fair Housing Act prohibits discrimination in housing based on race, color, religion, national origin, sex, disability and familial status. Individuals who believe that they may have been victims of housing discrimination 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 jury in San Juan, Puerto Rico, found four San Juan Municipal Police Officers guilty today of felony federal civil rights charges related to the fatal beating of Jose Antonio Rivera Robles, announced Loretta King, Acting Assistant Attorney General for the Justice Department’s Civil Rights Division, Rosa Emilia Rodríguez Vélez, U.S. Attorney for Puerto Rico, and Luis S. Fraticelli, Special Agent in Charge of the FBI’s San Juan Field Office.

On July 20, 2003, Aaron Vidal Maldonado, Juan Morales Rosales and Carlos Pagan Ferrer, along with other officers, aided and abetted each other in the brutal assault of Rivera Robles during an arrest in Carolina, Puerto Rico, evidence at trial showed.

Vidal Maldonado, a supervisor and sergeant at the time of the beating, was convicted on four charges: one for violating the victim’s civil rights by aiding and abetting others who beat him and another for violating his civil rights by failing to keep him from harm, both of which resulted in bodily injury and death; obstructing justice by providing false statements during the local investigation of the assault; and a felony charge for providing a false statement to the FBI.

Juan Morales Rosado was convicted on four charges: a civil rights charge for assaulting Rivera Robles, resulting in bodily injury; an obstruction of justice charge for providing false statements in the local investigation; a felony charge for lying to the FBI; and a fourth count for committing perjury before a federal grand jury investigating the assaults.

Carlos Pagan Ferrer was convicted on three charges: one federal civil rights charge for assaulting Rivera Robles, resulting in bodily injury; an obstruction of justice charge for providing false statements during the local investigation; and a third felony charge for making a false statement to the FBI.

A fourth defendant, Jose Pacheco Cruz, was acquitted of violating Rivera Robles’ civil rights, but was convicted of one felony count of obstruction of justice for providing false statements during the local investigation and one felony count for making a false statement to the FBI.

"Police officers are given tremendous power to serve and protect the public. For those rogue officers who abuse that power and violate the public trust, today’s verdict should send a strong message that they will be prosecuted and face justice in a court of law," said Loretta King, Acting Assistant Attorney General for the Civil Rights Division. "I congratulate the team of investigators and prosecutors who worked tirelessly to secure this important conviction."

"The U.S. Attorney’s Office is committed to protecting the civil rights of the people of Puerto Rico. It is unconscionable that those called upon to protect the public and enforce the law should violate their oath of office and abuse their position to deprive people of their most basic civil liberties. People need to have confidence in the fundamental fairness of our law enforcement agencies and in the rights bestowed upon them by our Constitution," said U.S. Attorney for Puerto Rico Rosa Emilia Rodríguez Vélez.

The civil rights charges for the defendants’ conduct that resulted in Rivera Robles’ death are punishable by sentences of up to life in prison and a $250,000 fine. The other civil rights charges are punishable by sentences of up to 10 years in prison and a fine of $250,000. A sentencing hearing has not yet been scheduled.

Co-defendants Eliezer Rivera Gonzalez and Elias Perocier Morales previously pleaded guilty to felony federal civil rights charges for participating in the assaults, including acknowledging that those assaults caused bodily injury and death. Sentencing hearings for those co-defendants have been set for Sept. 18, 2009.

The case was prosecuted by Senior Litigation Counsel Antonio R. Bazan of the U.S. Attorney’s Office for the District of Puerto Rico, and Senior Litigation Counsel Gerard Hogan and Trial Attorney Avner Shapiro from the Civil Rights Division of the Justice Department. The case was investigated by the FBI’s San Juan Field Office.

Mohammad Shabbir Khan, the former director of operations in Kuwait and Iraq for Tamimi Global Company, a Saudi Arabian company, has been convicted of witness tampering and conspiracy to commit witness tampering.  The verdict followed a one-day bench trial before U.S. District Judge Joe B. McDade in the Central District of Illinois on Aug. 10, 2009.  Sentencing will be scheduled at a later date.

        In June 2006, a grand jury returned a 16-count indictment charging Khan with 12 counts of wire fraud, and one count each of money laundering, making a false statement, witness tampering conspiracy and witness tampering.  On June 26, 2006, based on a written plea agreement, Khan pleaded guilty to all counts except the two pertaining to witness tampering.  On Dec. 8, 2006, Khan was sentenced to 51 months in federal prison and, based on the plea agreement, the two witness tampering counts were dismissed on the government’s motion.

        On Oct. 29, 2008, the government filed a motion with the court to void the plea agreement alleging that Khan had breached the terms of the plea agreement.  In the motion, the government alleged that Khan transferred several million dollars from foreign bank accounts in Dubai, United Arab Emirates, and elsewhere, to his brother in Pakistan rather than to his attorney in Chicago as was required by his plea agreement.  Terms of the plea agreement required Khan to transfer assets valued at $5,000 or more that he owned or otherwise controlled outside the United States into the trust and control of his attorney in the United States.

        On April 1, 2009, Judge McDade reinstated the two witness tampering counts of the indictment after finding that the government had proven that Khan substantially breached the terms of the plea agreement by causing the transfer of the funds in his Dubai bank accounts to his brother’s account in Pakistan.

        Khan had previously admitted to paying kickbacks of $133,000 to a Kellogg, Brown & Root Services Inc. (KBR) employee to secure two military dining subcontracts valued at $21.8 million for Tamimi Global Company:  a $14.4 million subcontract at Camp Arifjan, Kuwait; and a $7.4 million subcontract at a palace in Baghdad, Iraq.  Khan had also pleaded guilty to the money laundering conspiracy and false statement offenses related to a scheme by Khan and another former Tamimi manager to cover up the kickback payments Khan had made to the former KBR employee.  Stephen Seamans, the former KBR employee, previously pleaded guilty in the Central District of Illinois for crimes related to this matter.

        Evidence presented by the government at trial on Aug. 10, 2009, included a meeting on Oct. 28, 2005, in London, England, between Khan; the other Tamimi manager, Zubair Khan; and Seamans.  During the meeting, Seamans was provided with a story to cover up the kickback payments previously paid to him that was consistent with what the Tamimi employees had previously told federal authorities.  Zubair Khan remains a fugitive.

        The Logistics Civil Augmentation Program (LOGCAP) is a U.S. Army program that uses civilian contractors to support the logistical needs of U.S. military forces.  As part of the program, the U.S. Army Operations Support Command, with headquarters at the Rock Island Arsenal in Rock Island, Ill., awarded the LOGCAP III prime contract to KBR in December 2001.  The Army Field Support Command, also at the Rock Island Arsenal, administered the contract.
       
        The case was prosecuted by Trial Attorney Joseph A. Capone of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Matthew J. Cannon of the Central District of Illinois.

The case was investigated by the FBI’s Springfield, Ill., Division; Internal Revenue Service Criminal Investigation, Chicago Field Office; New Scotland Yard Metropolitan Police Service; the Defense Criminal Investigative Service, Central Field Office, St. Louis, Mo.; the U.S. Army Criminal Investigation Command, North Central Fraud Field Office, Detroit, Mich.; and members of the National Procurement Fraud Task Force.

          The National Procurement Fraud Task Force, created in October 2006 by the Department of Justice, was designed to promote the early detection, identification, prevention and prosecution of procurement fraud associated with the increase in government contracting activity for national security and other government programs. 

WASHINGTON – A federal court in Seattle has permanently barred Daniel Andersen from promoting fraudulent tax schemes, the Justice Department announced today. Documents the government filed on August 11 requested that the court enjoin Andersen, arguing that he was a founding member of the Institute for Global Prosperity, an entity that promoted both its own fraudulent tax scheme and the fraudulent tax schemes of others.

According to papers filed with the court, Andersen and David Struckman founded Global Prosperity in 1996, and Lorenzo Lamantia joined their scheme as "founder" in 1998. By 2002, Global Prosperity had sold its products to over 44,000 customers and had earned over $50 million in the process. Global Prosperity charged customers $1,250 for a 12-part audio course containing multiple erroneous theories about federal income taxes, which the government described as "nonsense."

The government’s request that the court enjoin Andersen explains that Andersen is currently in federal prison in Lompoc, Calif., in connection with his promotion of the Global Prosperity scheme. The court papers explain that other tax fraud vendors sold their schemes at conferences Global Prosperity organized, and that many of these vendors have been sentenced to prison for federal tax crimes, including Johnny "Liberty" Van Hove, Keith Anderson, and Dennis Poseley. Global Prosperity charged as much as $37,000 to attend such conferences.

John DiCicco, Acting Assistant Attorney General for the Justice Department’s Tax Division, thanked Tax Division trial attorney Robert Fay and IRS Revenue Agents Terry Martin and Cynthia Zambito for their efforts in obtaining the injunction.

Since 2001, the Justice Department’s Tax Division has obtained injunctions against more than 410 tax fraud promoters and unscrupulous tax preparers. Information about these cases is available on the Justice Department website.

WASHINGTON – Exxon-Mobil Corporation, the world’s largest publicly traded oil and gas company, pleaded guilty in U.S. District Court in Denver to violating the federal Migratory Bird Treaty Act (MBTA) in five states during the past five years, the Justice Department announced today.

The company has agreed to pay fines and community service payments totaling $600,000 and will implement an environmental compliance plan over the next three years aimed at preventing bird deaths on the company’s facilities in the affected states. According to papers filed in court, the company has already spent over $2.5 million to begin implementation of the plan.

The charges stem from the deaths of approximately 85 protected birds, including waterfowl, hawks and owls, at Exxon-Mobil drilling and production facilities in Colorado, Wyoming, Oklahoma, Texas and Kansas between 2004 and 2009. According to the charges and other information presented in court, most of the birds died after exposure to hydrocarbons in uncovered natural gas well reserve pits and waste water storage facilities at Exxon-Mobil sites in Colorado, Wyoming, Kansas, Oklahoma and Texas.

The company has entered into a plea agreement with the government, calling for guilty pleas to the five charges and a sentence of $400,000 in fines and $200,000 in community service payments. The fines will be deposited into the federally-administered North American Wetlands Conservation Fund. The community service payments will be made to a non-profit waterfowl rehabilitation foundation in Colorado and the congressionally-chartered National Fish and Wildlife Foundation, designated for waterfowl preservation work in each of the affected states. During a three-year probationary period, Exxon-Mobil must also implement an "environmental compliance plan" designed to keep birds from coming into contact with oily waters at its facilities in the five affected states.

"The environmental compliance plan that Exxon-Mobil has agreed to in this multi-district plea agreement is an important step in protecting migratory birds in these five states,"said John C. Cruden, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division.

"We are all responsible for protecting our wildlife, even the largest of corporations," said Colorado U.S. Attorney David M. Gaouette.  "An important part of this case is the implementation of an environmental compliance plan that will help prevent future migratory bird deaths."

The Migratory Bird Treaty Act, enacted in 1918, implements this country’s commitments under avian protection treaties with Great Britain (for Canada), Mexico, Japan and Russia. The Act creates a misdemeanor criminal sanction for the unpermitted taking of listed species by any means and in any manner regardless of fault. The maximum penalty for a corporate taking under the MBTA is $15,000, or twice the gross gain or loss resulting from the offense, and five years probation. The birds killed in the five cases include ducks, grebes, ibis, passerines, shorebirds, owls, martin and a hawk. None of these species is listed as endangered or threatened under federal law.

Migratory birds often land on open wastewater ponds at oil and gas facilities and become coated with, or ingest, fatal amounts of hydrocarbons discharged into the water during drilling or production operations. Such killings can be prevented by scrubbing the water of contaminants before discharge, removing the ponds, placing an obstruction such as netting or plastic "bird balls" over the water to prevent contact, or installing commercially-manufactured electronic hazing devices which detect incoming flights of migratory birds and deploy noise and lights to scare them away from the area. Exxon-Mobil’s environmental compliance plan will employ these techniques, tailored to each facility, to prevent future mortality.

The cases were investigated by Special Agents of the U.S. Fish and Wildlife Service and are being prosecuted by Senior Trial Attorney Robert S. Anderson of the Justice Department’s Environmental Crimes Section and Assistant U.S. Attorney Michael Carey of the District of Colorado.

WASHINGTON - The Department of Justice announced today that Dynamics Research Corporation (DRC), a defense contractor based in Andover, Mass., has agreed to pay the United States $15 million plus interest to settle allegations that two of its former executives engaged in a fraudulent kickback scheme in connection with two technical services contracts with the Air Force.

The contracts, first awarded in 1996, sought DRC’s expertise in procuring computer equipment and services for the Theater Battle Management Core Systems (TBMCS) program at Hanscom Air Force Base in Massachusetts. The TBMCS program provides the military with an integrated system to plan and execute air battle plans for operations and intelligence personnel at the force and unit levels. The contracts required DRC’s employees to certify that neither they nor their spouses had financial interests that would interfere with their ability to deliver unbiased advice while performing the contracts. DRC failed to obtain the certificates from former vice presidents Paul Arguin and Victor Garber, who headed the project.

According to the settlement agreement, from 1997 to 2000, DRC, through Mr. Arguin and Mr. Garber, steered Air Force contracts for computer equipment and services to companies owned by themselves, Mr. Arguin’s wife, and others, in exchange for kickbacks and inflated contract prices that produced windfall profits for the two DRC executives. In one of the schemes, Arguin and Garber allegedly substituted inexpensive memory modules for those required by the contract, causing the Air Force to overpay for the nonconforming modules.

The United States filed a civil suit against DRC in federal district court in Boston, seeking damages and penalties under the Anti-Kickback Act, the False Claims Act, and for breach of contract. The settlement agreement announced today resolves that lawsuit.

"The law requires government contractors to be honest and unbiased when providing services to our men and women in uniform," said Tony West, Assistant Attorney General for the Justice Department’s Civil Division. "The government will aggressively pursue contractors who scheme to take advantage of the military and taxpayers alike."

Acting United States Attorney Michael K. Loucks for the District of Massachusetts noted, "This case demonstrates that we will continue to hold the government’s contractors responsible for providing honest and unbiased services to the United States. Kickbacks of the type at issue in this case, undermine the integrity of government programs and we will continue to pursue such schemes aggressively against both individuals and the contractors responsible for their employees’ behavior."

Assistant Attorney General West and Acting U.S. Attorney Loucks also thanked the Defense Criminal Investigative Service, the Air Force Office of Special Investigations, the General Services Administration’s Office of Inspector General, and the Defense Contract Audit Agency for their assistance with the investigation that led to this settlement.

In related criminal proceedings in 2001, Mr. Arguin and Mr. Garber pleaded guilty to conspiring to defraud the government. Both received prison sentences and were ordered to pay restitution.

WASHINGTON - Department of Homeland Security (DHS) Secretary Janet Napolitano, Mexican Attorney General Eduardo Medina-Mora, Mexican National Public Security System Executive Secretary Jorge Tello Peón, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Acting Director Kenneth E. Melson and U.S. Immigration and Customs Enforcement (ICE) Assistant Secretary John Morton today signed a Letter of Intent to develop a coordinated and intelligence-driven response to the threat of cross border smuggling and trafficking of weapons and ammunition.

"The Letter of Intent illustrates our unconditional commitment to improve public safety in the United States and Mexico, and strengthens our determination to investigate and share intelligence to combat international firearms trafficking and violent crime," said Deputy Attorney General David W. Ogden.  "Law enforcement agencies in both nations recognize the importance of tracing every crime gun recovered on the Southwest Border to help determine trafficking patterns and potential traffickers of illicit firearms. ATF is committed to its strong partnership with ICE in working collaboratively to reduce firearms-related violent crime as we stem the diversion of firearms to international criminal markets."

"Enforcing our laws at the border requires close collaboration with our international and domestic allies to ensure our mutual security," said Secretary Napolitano. "This arrangement signifies our continued commitment to working with Mexico to stop violence and deter criminal activity that threatens safety on both sides of the border."

The letter signed today, supported by President Obama and Mexican President Felipe Calderón, will leverage the combined investigative capabilities of ICE, ATF and Mexico’s Procurador General de la Republica to combat violence and criminal activity along the U.S.-Mexico border.

The Letter of Intent recommends a joint strategic implementation plan to develop cooperative protocols to investigate weapons and ammunition trafficking in the United States and Mexico and improve information sharing between the two countries to better identify smuggling and trafficking trends and support bilateral investigation efforts.

DOJ and DHS recently enhanced coordination between ATF and ICE to combat international firearms trafficking and between DEA and ICE  to disrupt and dismantle drug trafficking organizations.

WASHINGTON— Fleet Management Ltd., a Hong Kong-based ship management firm, pleaded guilty today to a criminal violation of the Oil Pollution Act of 1990 for its role in negligently causing the discharge of more than 50,000 gallons of fuel oil into San Francisco Bay from the Cosco Busan when the vessel struck the San Francisco Bay Bridge in dense fog on Nov. 7, 2007. Fleet Management also pleaded guilty today to felony obstruction of justice and false statement charges for creating false and forged documents after the crash at the direction of shore-based supervisors with an intent to deceive the U.S. Coast Guard.

Today’s guilty pleas were made as part of a plea agreement with the government that is subject to approval by Judge Susan Illston of the U.S. District Court for the Northern District of California. If the plea terms are approved by the Court, Fleet has agreed to pay a total $10 million criminal penalty. Of this amount, $2 million would be devoted to fund marine environmental projects in San Francisco Bay.

The plea agreement, should the court accept it, also calls for Fleet to implement a comprehensive compliance plan that would include heightened training and voyage planning for ships engaged in trade in the United States. The training will focus on better preparing masters for command of Fleet’s vessels, providing classroom and shipboard navigation training to those who navigate Fleet’s vessels, and ensuring that all Fleet vessels calling in U.S. ports create a thorough plan for how they will navigate in those ports. The new training and voyage planning requirements will be subject to auditing and the court’s supervision.

"Today’s guilty plea by Fleet, combined with the recent sentencing of the ship’s pilot, sends a signal to the maritime industry that the government recognizes that navigation of large vessels is a serious undertaking and that those who fail to adequately train, execute and supervise their responsibilities will be held accountable," said John C. Cruden, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. "Fleet engaged in criminal conduct when shore-based supervisors directed the fabrication of false and forged documents to deceive investigators and hide its own culpability."

"This criminal prosecution emphasizes that vessel managers have the responsibility to train and supervise its crews and to follow required procedures," said Joseph P. Russoniello, U.S. Attorney for the Northern District of California. "Fleet failed to meet its obligation under international law to ensure the crew was adequately trained on navigation procedures and equipment. Vessel operators cannot abdicate their responsibilities to ensure safety and environmental protection without suffering serious consequences."

As part of the plea agreement, Fleet Management admitted "that it was a cause of a discharge of a harmful quantity of oil into the navigable waters of the United States, that it acted negligently, and that its negligence was a proximate cause of the discharge of oil into San Francisco Bay on Nov. 7, 2007." According to the factual statement signed by Fleet, the crew of the vessel:

• was not adequately familiar with certain ship-specific navigational equipment,
• did not engage in a berth-to-berth passage planning process or prepare written berth-to-berth passage plans,
• did not conduct an adequate Master – Pilot exchange of information,
• did not fully utilize or operate the ship’s radar and electronic chart system, and
• did not take fixes during the voyage.

In pleading guilty, Fleet admitted that after the ship hit the Bay Bridge, it concealed ship records and created materially false, fictitious and forged documents with an intent to influence the Coast Guard’s investigation. In particular, a false berth-to-berth passage plan for the day of the crash was created after the incident at the direction of shore-side supervisors known as superintendents and with the knowledge of the ship’s master. Additionally, a ship officer falsified the ship’s official navigational chart to show fixes that were not actually recorded during the voyage. Other records including false passage planning checklists were also created after the fact.

Sentencing has been scheduled for Dec. 11, 2009 at 11:00 a.m. PT.

The pilot of the Cosco Busan, Captain John Cota, was recently sentenced to 10 months in prison, one year of supervised release and 200 hours of community service for his role in causing the Cosco Busan collision and discharge of oil and deaths of migratory birds.

The collision caused a gash measuring approximately 150 feet long by 12 feet high on the port side of the ship, puncturing two of the ship’s fuel tanks and damaging the fendering system on the Delta tower of the bridge, and resulting in a significant environmental clean-up. At least 2,000 migratory birds died, including Brown Pelicans, Marbled Murrelets and Western Grebes. The Brown Pelican is a federally endangered species and the Marbled Murrelet is a federally threatened species and an endangered species under California law.

The criminal investigation was conducted by the Coast Guard Investigative Service; the EPA Criminal Investigation Division; the Federal Bureau of Investigation; the U.S. Fish and Wildlife Service; Silicon Valley Regional Computer Forensics Laboratory; and the California Department of Fish and Game, Office of Spill Prevention and Response. The investigation also received technical assistance from other Coast Guard offices including District 11 Legal Office, Sector San Francisco, Office of Investigations and Analysis, Office of Maritime and International Law, Office of Vessel Activities, Electronics Support Unit, Alameda and the Marine Safety Laboratory. In announcing the plea agreement, the U.S. Attorney and Assistant Attorney General thanked federal and state investigators and offices for their assistance in the prosecution.

The criminal case is being prosecuted by Assistant U.S. Attorneys Jonathan Schmidt and Stacey Geis, and Special Assistant U.S. Attorney Christopher Tribolet of the U.S. Attorney’s Office for the Northern District of California, and Richard A. Udell, Senior Trial Attorney with the Justice Department’s Environmental Crimes Section.

Under the Crime Victims’ Rights Act, crime victims are afforded certain statutory rights including the opportunity to attend all public hearings and provide input to the prosecution. Those adversely impacted by the oil spill are encouraged to visit http://www.usdoj.gov/usao/can/community/Notifications/index.html to learn more about the case and the Crime Victims’ Rights Act.

WASHINGTON – The Boeing Company will pay the United States $25 million to resolve allegations that the company performed defective work on the entire KC-10 Extender fleet, the Justice Department announced today. The KC-10 Extender is a mainstay of the Air Force’s aerial refueling fleet in the Iraq and Afghanistan war theaters.

The lawsuit alleged that Boeing defectively installed insulation blanket kits in KC-10 aircraft while performing depot maintenance at the Boeing Aerospace Support Center in San Antonio, Texas. The settlement also settles allegations that Boeing overcharged the government for installation of the blanket kits.

The blanket kit is a critical component in the KC-10 Extender and consists of several thousand blankets resembling the insulation installed in the walls of a house. These blankets are installed on all inside surfaces of the aircraft and serve the critical functions of providing a thermal barrier to maintain temperature inside the aircraft during flight, reducing noise in the aircraft and providing a vapor barrier to reduce corrosion caused by moisture buildup on the inside surface of the skin of the aircraft.

The case was originally filed in U.S. District Court for the Western District of Texas by two former Boeing employees, Anthony Rico and Fernando de la Garza, under the qui tam or whistleblower provisions of the False Claims Act. Under the qui tam statute, a private party, known as a "relator," can file an action on behalf of the United States and receive a portion of the recovery. Mr. Rico and Mr. de la Garza will receive $2,625,000 as their share of the proceeds of the settlement.

During the investigation of the allegations of faulty installation, the government also found that Boeing overcharged for the installation. Auditors found that Boeing inflated estimates of the number of hours needed to perform the blanket kit work and charged an excessive hourly rate for the work.

"Companies that do business with the United States must deal honestly with the government," said Tony West, Assistant Attorney General for the Justice Department’s Civil Division. "The Department of Justice will vigorously pursue cases under the False Claims Act against those contractors who provide shoddy work."

The $25 million settlement consists of a cash payment by Boeing of $18,400,000 and $6,600,000 worth of repair work to be done at the aircraft manufacturer’s expense on the defective blankets. The settlement resolves Boeing’s potential liability under the False Claims Act.

"Defense contractors will be held to high standards, particularly when their work could potentially impede mission critical functions of our armed forces," said John E, Murphy, Acting U.S. Attorney for the Western District of Texas. "The pursuit and favorable settlement of this civil litigation demonstrates that the Department of Justice will work closely with investigative agencies in order to enforce these standards."

The settlement negotiations were conducted by the U.S. Attorney's office in San Antonio and the Department's Civil Division. The allegations were investigated by the Defense Criminal Investigative Service, the Air Force Office of Special Investigations and the Defense Contract Audit Agency.

Hayden B. Greene, 31, of Tulsa, Okla., and James Robert Roy, 42, of Tomball, Texas, pleaded guilty today to conspiring to manufacture and sell counterfeit pipe couplings.

Greene and Roy pleaded guilty before U.S. District Judge Keith P. Ellison in Houston to one count of conspiracy to traffic in counterfeit goods and commit fraud. They each face up to five years in prison. Sentencing is scheduled for Nov. 5, 2009.

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

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

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

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

A federal jury has found Ehsanul Islam Sadequee, 23, of Roswell, Ga., guilty on all four counts of an indictment charging him with supporting terrorists and a foreign terrorist organization, after a trial that lasted seven days.  The jury deliberated for approximately five hours before reaching the guilty verdicts.  U.S. District Judge William S. Duffey, Jr. presided over the trial. 

David Kris, Assistant Attorney General for National Security, said, "This investigation and the two resulting trials of Mr. Sadequee and Mr. Ahmed underscore the importance of international and domestic cooperation in combating terrorism. The agents, analysts and prosecutors involved in these cases and in related investigations around the world deserve a special thanks for their efforts."

U.S. Attorney for the Northern District of Georgia David E. Nahmias said, "With this guilty verdict, a long and successful international counter-terrorism investigation comes to a close.  Defendants in the United States, the United Kingdom, Bosnia, and elsewhere - all of whom conspired together to provide material support to violent jihad - are now safely behind bars.  For that, we can be thankful.  This case remains, however, a sobering reminder that terrorism and its supporters are not confined to distant battlefields in Iraq and Afghanistan.  As recent events further demonstrate, there are still some American citizens willing to take up arms against the United States, our people, our allies, and our interests.  In the face of this clear threat, federal law enforcement must and will remain vigilant, seeking to disrupt future terrorist networks before a timer is ticking or a trigger is pulled.  I commend the many law enforcement agents, prosecutors, and support staff who have worked so hard for so long to gather and present the evidence that led to today's guilty verdict and all the other terrorism convictions around the world that were part of this case."       

Atlanta FBI Special Agent in Charge Gregory Jones said, "The FBI continues to investigate a growing number of cases involving U.S. citizens providing material support to terrorists.  However, as we move further away from the tragic events of September 11, 2001, there also seems to be a growing public perception that such conduct is harmless, especially since no bombs were exploded and no one was killed.  This defendant, like many others we have investigated, tried to argue that his criminal conduct and activities were protected by the First Amendment of the U.S. Constitution.  The FBI does not buy that argument and today the jury agreed." Jones added, "I would like to thank our law enforcement and intelligence community partners, domestic and international, who provided tremendous assistance to the Atlanta FBI Joint Terrorism Task Force throughout the investigation and prosecution of Sadequee, Syed Haris Ahmed, and their co-conspirators."

According to U.S. Attorney Nahmias and the evidence presented during the trial, which began on August 3, 2009: Sadequee was born in Fairfax, Va., in 1986.  He attended school in the United States, Canada, and Bangladesh.  In December 2001, while living in Bangladesh, he sent an email seeking to join the Taliban, to help them in their fight against United States and coalition forces in Afghanistan.  Several years later, in late 2004 and early 2005, Sadequee, having returned to the United States to his family home in Roswell, entered an illegal agreement - a conspiracy - with others to provide material support to terrorists engaged in violent jihad.

The evidence indicated that the material support consisted of (1) Sadequee; his co-defendant, Syed Haris Ahmed, who was convicted after a bench trial in June 2009; and other individuals who intended to provide themselves as personnel to engage in violent jihad abroad and in the United States, and (2) property, namely, short videos of symbolic and infrastructure targets for potential terrorist attacks in the Washington, D.C., area, including the U.S. Capitol, the World Bank, the Masonic Temple, and a fuel tank farm -- all of which were taken by Sadequee and Syed Haris Ahmed to be sent to "the jihadi brothers" abroad. 

At trial the government presented evidence that Sadequee and his co-conspirators used the internet to develop relationships and maintain contact with each other and with other supporters of violent jihad in the United States, Canada, the United Kingdom, Pakistan, Bosnia and elsewhere. In support of the conspiracy, in March 2005, Sadequee traveled with Syed Haris Ahmed to Toronto, Canada, to meet with other co-conspirators, including Fahim Ahmed, one of the "Toronto 18" suspects now awaiting a terrorism trial in Canada.  While in Canada, Sadequee and his co-conspirators discussed their plans to travel to Pakistan in an effort to attend a paramilitary training camp operated by a terrorist organization, such as Lashkar-e-Tayyiba (LET), as preparation for engaging in violent jihad abroad or in the United States.  They also discussed potential targets for terrorist attacks in the United States. 

In April 2005, Sadequee and Syed Haris Ahmed drove to the Washington, D.C., area to take the casing videos, which the government’s evidence showed they made to establish their credentials with other violent jihad supporters as well as for use in violent jihad propaganda and planning.  Sadequee later sent several of the video clips to Younis Tsouli, aka "Irhabi007" (Arabic for "Terrorist 007"), a propagandist and recruiter for the terrorist organization Al Qaeda in Iraq, and to Aabid Hussein Khan, aka "Abu Umar," a facilitator for the Pakistan-based terrorist organizations LET and Jaish-e-Mohammed (JEM).  Both Tsouli and Khan have since been convicted of terrorism-related offenses in the United Kingdom and are imprisoned there. 

During the trial, the government’s evidence showed that Sadequee and Khan, using a members-only violent jihadist web forum known as At-Tibyan Publications, also tried to recruit at least two other individuals to participate in violent jihad.  One, a self-identified 17-year-old American convert, was praised by Sadequee for his "capacity of fulfilling [his] largest obligations in [his] native land."  

The government also presented evidence at trial that in July 2005, Syed Haris Ahmed traveled from Atlanta to Pakistan in an attempt to enter a training camp and then engage in violent jihad.  While in Pakistan, Syed Haris Ahmed met with Aabid Hussein Khan and the two discussed Ahmed’s intention of joining a camp.  However, Ahmed’s family and others convinced him to postpone that effort.  The day before Syed Haris Ahmed returned to Atlanta, Sadequee departed Atlanta for Bangladesh, carrying with him, hidden in the lining of his suitcase, an encrypted CD; a map of Washington, D.C., that included all of the targets he and Syed Haris Ahmed had cased; and a scrap of paper with Khan’s mobile phone number in Pakistan.

Once in Bangladesh, Sadequee began to conspire more closely with Younis Tsouli and Mirsad Bektasevic, a Swedish national of Serbian origins.  Specifically, Tsouli, Bektasevic, Sadequee and others formed a violent jihadist organization known as "Al Qaeda in Northern Europe." The group was to be based in Sweden and focus on terrorist attacks in Europe.  The evidence at trial showed that in October 2005, Sadequee sought a visa that would allow him to relocate from Bangladesh to Sweden.  Bektasevic was arrested in Sarajevo, Bosnia and Herzegovina, on Oct. 19, 2005.  He and a co-conspirator were found in possession of over 20 pounds of plastic explosives, a suicide belt containing plastic explosives and a detonator, and a firearm with a silencer. Bektasevic also had in his pocket a cassette containing a video demonstrating how to make detonators; displaying an arsenal of semi-automatic weapons, grenades, explosives and other arms, and announcing they were for use in Europe; and depicting Bektasevic and others placing a grenade booby trap in a forest near Sarajevo.  Sadequee had been in electronic and telephonic contact with Bektasevic as recently as three days before Bektasevic’s arrest, discussing the silencer and explosives Bektasevic had acquired for the group and the making of Bektasevic’s video.  Bektasevic has since been convicted of terrorism offenses in Bosnia and Herzegovina, and is imprisoned there.

Meanwhile, after returning to Atlanta to resume his studies at Georgia Tech in August 2005, Syed Haris Ahmed remained in contact with Sadequee, expressed regret at his failure to join violent jihadists in Pakistan, conducted Internet research on topics such as high explosives and defeating Special Operations troops, and discussed his intent to make another attempt to enter a training camp.  In March 2006, Ahmed was approached by FBI agents and agreed to a series of voluntary, non-custodial interviews over the course of eight days.  Amid efforts to deny his illegal activities and mislead the agents, Ahmed made increasingly incriminating statements.  Efforts by the FBI to obtain Ahmed’s cooperation in the ongoing international terrorism investigation ended after the FBI discovered that Ahmed was surreptitiously contacting Sadequee, who was still in Bangladesh, to advise him of the FBI investigation and warn him not to return to the United States.

Sadequee was arrested by the FBI on April 20, 2006, in Bangladesh, on charges arising out of false statements he made in an August 2005 interview with the FBI at JFK Airport in the Eastern District of New York (EDNY).  Sadequee was indicted in this district on July 19, 2006, and transferred to Atlanta in August of that year, after the charges in EDNY were dismissed at the Government’s request. 

At trial, Sadequee elected to represent himself, with stand-by counsel present to assist him as requested.

Sadequee was convicted today of (1) conspiring to provide material support to terrorists; (2) attempting to provide and providing material support to terrorists; (3) conspiring to provide material support to Lashkar-e-Tayyiba (LET), a designated foreign terrorist organization; and (4) attempting to provide material support to LET.  The material support for terrorists consisted of personnel and property (the Washington casing videos).  The material support for LET consisted of personnel.   Sadequee could receive a maximum sentence of 60 years in prison, followed by a term of supervised release up to life, and a fine of up to $1,000,000.  In determining the actual sentence, the court will consider the U.S. Sentencing Guidelines, which are not binding but provide appropriate sentencing ranges for most offenders.  Sentencing for Sadequee and Ahmed is scheduled before Judge Duffey on Oct. 15, 2009, at 9:30 a.m.

(MEDIA NOTE:  After the jury's verdict in the Sadequee trial today, Judge Duffey unsealed his detailed written findings supporting the guilty verdict against Syed Haris Ahmed after his bench trial in June. Copies of the findings are available upon request.) 

This case is being investigated by agents and officers of the Atlanta Joint Terrorism Task Force (JTTF), which is led by the FBI’s Atlanta Division, with assistance from law enforcement agencies in several other countries.

Assistant U.S. Attorneys Robert McBurney and Christopher Bly and U.S. Department of Justice Counterterrorism Section Trial Attorney Alexis Collins are prosecuting the case.

Charles Brown, 54, of Mesa, Ariz., was sentenced today to five years in prison and lifetime supervised release following his prison term for receiving child pornography. 

Brown was indicted on May 8, 2008, on charges of receipt and possession of child pornography. The charges arose after Brown responded to an advertisement offering child pornography videos that had been placed on the Internet by a U.S. Postal Inspector working undercover. After Brown selected and paid for a video, Postal Inspectors obtained an anticipatory search warrant.  On the day that the video was delivered to Brown’s home, the inspectors executed the warrant and searched Brown’s computer, finding additional child pornography.

Brown pleaded guilty on March 10, 2009, to one count of receipt of child pornography. As part of the plea agreement, Brown admitted to ordering from the undercover inspector a video containing 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 CEOS Trial Attorney James Silver, with assistance from Senior Litigation Counsel Vincent Q. Kirby and Assistant U.S. Attorney Sharon K. Sexton of the District of Arizona.  The U.S. Postal Inspection Service conducted the investigation. 

 

WASHINGTON—Ohio Edison Company, a subsidiary of FirstEnergy Corp., has agreed in a consent decree to repower one of its coal-fired power plants using primarily renewable biomass fuels, the Justice Department and U.S. Environmental Protection Agency announced today.

In the agreement, filed in federal court in Columbus, Ohio and joined by the states of New York, New Jersey and Connecticut, Ohio Edison will repower the R.E. Burger Units 4 and 5 near Shadyside, Ohio with biomass fuel. The consent decree modifies a 2005 consent decree requiring Ohio Edison to reduce emissions of sulfur dioxide (SO2) and nitrogen oxide (NOx) at several of its coal-fired plants.

The modified consent decree will substantially reduce emissions of SO2 and NOx from Burger’s current levels and also reduce carbon dioxide (CO2) emissions from current levels by more than 1.3 million tons a year. Burger will be the largest coal-fired electric utility plant in the country to repower with renewable biomass fuels and the first such plant at which greenhouse gas emissions will be reduced under a Clean Air Act consent decree.

The original 2005 consent decree resolved a lawsuit filed in 1999 under the New Source Review provisions of the Clean Air Act regarding Ohio Edison’s W. H. Sammis plant and required that the company reduce SO2 emissions not only at Sammis but also at several of its smaller plants, including Burger. That agreement gave Ohio Edison three options to reduce Burger’s SO2 emissions: shut down the plant, install a scrubber, or repower with natural gas. Under the modified agreement, Ohio Edison will repower Burger beginning in 2012 with mostly biomass fuels, co-firing with not more than 20 percent low sulfur coal, including natural wood from waste tree trimmings and dedicated sustainable nurseries, agricultural crops, grasses and vegetation waste or products.

Following a year of initial operation and optimization, the Burger plant will be subject to enforceable emissions rates for SO2, NOx and particulate matter (PM). Reductions from current levels of SO2 emissions are expected to be as much as 14,000 tons a year; for NOx, as much as 1300 tons a year; and for PM, as much as 700 tons a year.

 As a result of this agreement, conversion to biomass fuel combustion is expected to approach "carbon neutrality," meaning that CO2 emissions released by burning biomass fuel will be offset by the amount of CO2 absorbed from the atmosphere by the wood and vegetation grown to produce the fuel. After offset, Burger is expected to emit approximately 400,000 tons of CO2 emissions a year, based on 20 percent coal co-firing, versus more than 1.7 million tons from coal-fired combustion prior to repowering with biomass fuel.

The adverse effects on the environment of CO2 emissions, particularly from coal-fired power plants, are well-documented. Last April, EPA issued the "Proposed Endangerment and Cause or Contribute Findings for Greenhouse Gases under the Clean Air Act," which identified the dangers of the current and projected concentrations of the six key greenhouse gases, the most significant being carbon dioxide. In addition, sulfur dioxides, nitrogen oxides and particulate mattercause severe respiratory problems and contribute to childhood asthma. They are also significant contributors to acid rain, smog and haze, which impair visibility in national parks.

"This is a great result for the health and the environment of the nation," said John C. Cruden, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. "We are pleased that Ohio Edison has chosen to significantly reduce greenhouse gases and other pollutants from the Burger plant and hope that Ohio Edison will become the standard-bearer for other companies considering conversion to renewable biomass fuels under the auspices of the EPA and state environmental agencies."

"Today's settlement improves air quality for the local community and reduces greenhouse gas emissions by requiring the use of a renewable, carbon-neutral fuel to generate electricity," said Cynthia Giles, Assistant Administrator for EPA’s Office of Enforcement and Compliance

Assurance. "EPA will seek similar commitments from companies to replace coal-fired electric generation with cleaner, renewable energy in future Clean Air Act settlements."

The consent decree, lodged in the U.S. District Court for the Southern District of Ohio, 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 Department of Justice Web site at http://www.usdoj.gov/enrd/Consent_Decrees.html.

WASHINGTON – Diego Montoya Sanchez, 48, one of the leaders of the Norte Valle Colombian drug cartel and a former FBI Top Ten Fugitive, pleaded guilty today in Miami to drug trafficking, murder and racketeering charges, the Justice Department announced.

The pleas were announced by Acting U. S. Attorney Jeffrey H. Sloman for the Southern District of Florida, Acting U.S. Attorney Lev L. Dassin for the Southern District of New York, Assistant Attorney General Lanny A. Breuer of the Criminal Division, FBI Executive Assistant Director Thomas J. Harrington and Acting Administrator Michele M. Leonhart of the U.S. Drug Enforcement Administration.

Montoya Sanchez appeared before U.S. District Judge Cecilia M. Altonaga in Miami, where he pleaded guilty in two pending federal cases. In the first case, which was indicted in the Southern District of Florida by the U.S. Attorney’s Office, Montoya pleaded guilty to one count of conspiracy to import more than five kilograms of cocaine into the United States and one count of obstruction of justice by murder.

In the second case, which was indicted in the District of Columbia jointly by the U.S. Attorney’s Office for the Southern District of New York (SDNY) and the Criminal Division’s Narcotic and Dangerous Drug Section (NDDS), Montoya Sanchez pleaded guilty to one count of conspiracy to engage in a pattern of racketeering activity. The SDNY/NDDS indictment was transferred to the Southern District of Florida for the guilty plea.

Following the decline of the Cali Cartel in the mid-1990s, the Norte Valle Cartel emerged to become Colombia’s most prolific cocaine trafficking cartel. Based upon FBI estimates, at its peak the Norte Valle Cartel was responsible for 60 percent of the cocaine exported from Colombia to the United States. According to the SDNY/NDDS indictment, between 1990 and 2004, the Norte Valle Cartel exported more than 1.2 million pounds, or 500 metric tons, of cocaine worth more than $10 billion from Colombia to the United States.

According to the statement of facts submitted in conjunction with today’s hearing, Montoya Sanchez was a high-level Colombian drug trafficker for more than two decades. In the mid-1980s, Montoya Sanchez ran cocaine laboratories that served many significant traffickers. In the late 1980s, Montoya Sanchez expanded his organization’s operations into smuggling plane loads of cocaine from Colombia to Mexico. According to the statement of facts, by the early 1990s, Montoya Sanchez had switched to maritime smuggling. During the course of the next 15 years, Montoya Sanchez’s organization routinely smuggled cocaine loads between 1,000 and 6,000 kilos at a time using go-fast boats and fishing boats, among other methods.

By the late 1990s, Montoya Sanchez and Wilber Varela emerged to become the Norte Valle Cartel’s two leading kingpins. Mounting tensions between the Montoya and Varela organizations led to a two-year war between the organizations in which each targeted the other’s members for murder. The Montoya-Varela war, which lasted from fall 2003 until fall 2005, resulted in hundreds of deaths, including those of innocent civilians.

At today’s hearing, Montoya Sanchez admitted that his organization’s practices included using violence and murder against people his organization feared were cooperating with law enforcement. Montoya Sanchez specifically admitted to the August 2003 murder of a one-time organization member who was believed to have been cooperating with authorities.

In May 2004, the FBI added Montoya Sanchez to its list of ten most wanted fugitives. On Sept. 10, 2007, Colombian authorities mounted an operation on a believed Montoya hide-out at a ranch in a rural area outside of Zarzal, Valle del Cauca, Colombia, and captured Montoya Sanchez hiding in a creek-bed approximately 700 yards from the ranch. Montoya Sanchez was extradited from Colombia to Miami on Dec. 12, 2008.

Jeffrey H. Sloman, Acting U.S. Attorney for the Southern District of Florida, stated, "From the prosecution and conviction of the leaders of the Cali Cartel, to the conviction of Ze’ev Rosenstein and an Israel-based Ecstasy network, to today’s dismantling of the Norte Valle Cartel, the Southern District of Florida has had a long and successful history in the war on drugs. We will continue to focus our energy, and the expertise of our prosecutors, to help our law enforcement partners stem the tide of drugs flooding our streets and poisoning our society."

"Diego Montoya Sanchez was the leader of a dangerous, violent drug organization," said Thomas J. Harrington, Executive Assistant Director of the FBI. "Outstanding cooperation between Colombia and the United States was key to his capture, the capture of others, and the effective dismantling of the Norte Valle Cartel. The FBI and its law enforcement partners, both here and overseas, will continue to work together to eliminate other international organized crime threats."

"The prosecution of Montoya Sanchez is a milestone in the efforts to dismantle the Norte Valle Cartel, one of the world’s most powerful and dangerous drug-trafficking cartels," said Acting U.S. Attorney Lev L. Dassin for the Southern District of New York. "Montoya Sanchez’s arrest and extradition marked the end of his long campaign of violence and corruption. We are grateful to our partners at the DEA and in the Colombian government for their tireless work in this investigation."

"Montoya Sanchez’s path to the top of the Norte Valle Cartel was marked by decades of extreme violence. That path has now ended in a prison cell, where the man who personally helped direct multi-ton shipments of addictive and destructive narcotics into American cities and towns will be held for his crimes," said Assistant Attorney General Lanny A. Breuer of the Criminal Division. "This conviction is a major victory in the joint effort by Colombia and the United States to disrupt and dismantle these drug trafficking organizations, made possible through extensive cooperation with our partners in the Southern District of Florida, the Southern District of New York, the DEA and the FBI."

"This notorious leader of the extremely violent Norte Valle Cartel is where he belongs: behind bars for murder, drug trafficking and racketeering," said Acting DEA Administrator Michele M. Leonhart. "Due to the skilled and brave work by the men and women of DEA and the Colombian National Police, justice has been served for the many victims of his cartel’s extreme violence and the tons of cocaine that ended up on American streets. Now he is in prison, no longer able to use his power to destroy others or benefit from his ill-gotten gains."

Montoya Sanchez is the fourth member of his family to be convicted as part of the case out of the Southern District of Florida. In January 2009, Montoya Sanchez’s brother, Eugenio Montoya Sanchez, pleaded guilty to one count of conspiracy to import more than five kilograms of cocaine into the United States and one count of obstruction of justice by murder and was subsequently sentenced to 30 years in prison. In November 2005, Montoya Sanchez’s brother, Juan Carlos Montoya Sanchez, and his cousin, Carlos Felipe Toro Sanchez, both pleaded guilty to one count of conspiracy to import more than five kilograms of cocaine into the United States. They were sentenced to terms of 262 and 235 months in prison, respectively.

According to in-court statements during the hearing, Diego Montoya Sanchez agreed to serve a 45-year prison term for the crimes outlined in the court documents. Sentencing has been scheduled for Oct. 21, 2009, at 8:30 a.m. before Judge Altonaga. 

The Southern District of Florida indictment is being prosecuted by the U.S. Attorney’s Office and was investigated by the FBI. The SDNY/NDDS indictment was the result of a multi-district investigation and is being prosecuted jointly by SDNY and NDDS, and was investigated by the DEA. The Criminal Division’s Office of International Affairs and NDDS Judicial Attachés in Bogota, Colombia provided significant assistance in both cases. U.S. law enforcement received invaluable assistance in its prosecution of Diego Montoya Sanchez from the Government of Colombia, the Colombian National Police and the Colombian Army.

Factual Basis

Robert Jeffery, 55, was convicted today by a federal jury in Alexandria, Va., for his role in a scheme to steal fuel worth approximately $39.6 million from the U.S. Army in Iraq.

Jeffery, a former master chief petty officer in the U.S. Navy, was convicted after a two-day trial on one count of conspiracy and one count of theft of government property. According to the evidence presented at trial, from February 2008 through May 2008, Jeffery and his co-conspirators, purportedly representing Department of Defense contractors in Iraq, used fraudulently obtained documents to enter the Victory Bulk Fuel Point (VBFP) in Camp Liberty, Iraq. Evidence showed that Jeffery and his co-conspirators presented false fuel authorization forms to steal large quantities of aviation and diesel fuel from the VBFP for subsequent sale on the black market.

The evidence at trial showed that Jeffery served as an escort for the fuel trucks and retrieved hundreds of thousands of gallons of fuel from the VBFP. The United States owns and operates the VBFP in support of Operation Iraqi Freedom. The VBFP supplies aviation fuel and diesel fuel to both military units and U.S. government contractors operating in and around the VBFP.

Jeffery is a U.S. citizen who, until his arrest in connection with this case, resided in the Philippines. At sentencing, Jeffery faces a maximum of 15 years in prison. Sentencing is scheduled for Dec. 11, 2009.

In related cases, Lee William Dubois, Robert Young and Michel Jamil each pleaded guilty to participating in the same scheme. In his guilty plea on Oct. 7, 2008, Dubois admitted that he obtained government-issued common access cards for the drivers and escorts of the trucks and also presented false documents to the VBFP authorizing his co-conspirators to draw fuel. Dubois admitted that he and his co-conspirators stole approximately 10 million gallons of fuel, and that he received at least $450,000 in personal profits from the subsequent sale of the fuel on the black market. Sentencing for Dubois is scheduled for Aug. 28, 2009.

Young, 56, a former captain in the U.S. Army, pleaded guilty on July 24, 2009. In his guilty plea, Young admitted that between October 2007 and May 2008, he and his co-conspirators used fraudulently-obtained documents to enter the VBFP and presented false fuel authorization forms to steal aviation and diesel fuel from the VBFP for subsequent sale on the black market. As a result of the scheme, Young received approximately $1 million in personal profits. Sentencing for Young is scheduled for Oct. 30, 2009.

Jamil, 59, pleaded guilty on July 27, 2009, for his role in the scheme. Jamil admitting that in March 2007, he and two of his co-conspirators arranged for the creation of a false Memorandum for Record (MFR) authorizing individuals to draw fuel from VBFP, purportedly on behalf of a company serving as a contractor to the U.S. government. Jamil admitted that he and his co-conspirators used this false MFR and others to steal large quantities of fuel from the U.S. Army for subsequent sale on the Iraqi black market. As a result of the scheme, Jamil admitted he received between $75,000 and $87,500 in profits. Sentencing is scheduled for Nov. 13, 2009.

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

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

WASHINGTON – The Justice Department today announced an agreement with the city of Port St. Lucie, Fla., to improve access to all aspects of civic life for persons with disabilities. The agreement was reached under the Department’s Project Civic Access initiative to bring state and local governments into compliance with the Americans with Disabilities Act (ADA). This agreement is the 168th under Project Civic Access and the seventh this year.

"Port St. Lucie officials recognize that civic access is a civil right and I applaud them for committing to ensure that residents and visitors with disabilities have equal access to city programs, services and facilities," said Loretta King, Acting Assistant Attorney General for the Civil Rights Division.

Under today’s agreement, the city will:

• Make physical modifications to its facilities so that parking, routes into buildings, entrances, assembly areas, public telephones, restrooms, service counters, drinking fountains, elevators, routes within parks, and picnic pavilions are accessible to persons with disabilities;
• Implement a plan for the accessibility of sidewalks and curb ramps throughout the city;
• Ensure that the city’s official website is accessible to individuals with disabilities, including persons who are blind or have low vision;
• Continue to train staff in using telephone relay services to place and receive calls to ensure effective communication with persons who are deaf, are hard of hearing, or have speech impairments;
• Amend its employment policies, as necessary, to comply with ADA requirements; and
• Install signs at any inaccessible entrance to a facility directing users to an accessible entrance or to information about other accessible facilities.

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

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

U.S. Immigration and Customs Enforcement (ICE) and the U.S. Department of Justice (DOJ) signed two Memoranda of Understanding (MOUs) on Thursday, Aug. 6, 2009, to foster increased communication between participating agencies at the Organized Crime Drug Enforcement Task Force (OCDETF) Fusion Center and the International Organized Crime Intelligence and Operations Center (IOC-2).

      “The OCDETF Fusion Center and IOC-2 are founded on the principle that we can accomplish more together than we can separately,” said Deputy Attorney General David W. Ogden.  “By bringing together the agencies and personnel with existing resources and expertise we can work more effectively as partners to shut down organized crime networks, seize assets and save taxpayer dollars in the process.  This agreement, coupled with recent agreements between ICE, DEA and ATF will allow new levels of cooperation and intelligence sharing.”

      “These additional agreements we’ve signed with our Department of Justice law enforcement partners help us all better combat the worst criminal offenders,” said Homeland Security Assistant Secretary for ICE John Morton.  “By combining our resources, we expect to stop more drug smugglers and organized crime across the country.”

      By becoming an active participate in the OCDETF Fusion Center as outlined in one MOU, ICE will be adding more than 25 million records, including reports of investigation, wiretap intercept information and financial investigative material, from its drug-related investigations and drug-related financial investigations to the Fusion Center.  ICE will also gain access to the additional agency information available through the Fusion Center.  This increased partnership will further help in the joint fight against drug trafficking organizations by all of the other Fusion Center agencies, including the FBI, the U.S. Drug Enforcement Administration (DEA) and the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF).

      The ability of all participating Fusion Center agencies to develop target profiles and actionable investigative leads to disrupt and dismantle significant drug traffickers is enhanced by the increase of information collected at the Fusion Center.  In addition to sharing in one collection of information, coordinating with the Fusion Center allows participating law enforcement agencies to “de-conflict” their investigations.  De-confliction ensures that two or more agencies are not duplicating resources or that one agency’s investigation will not have a negative impact on another agency’s investigation.

      DOJ and ICE also signed an MOU regarding ICE participation in the newly-created IOC-2, which marshals the resources and information of nine U.S. law enforcement agencies, as well as federal prosecutors, to collectively combat the threats posed by international criminal organizations to domestic safety and security.  It allows partner agencies to join together in a task force setting, combine data and produce actionable leads for investigators and prosecutors working nationwide to combat international organized crime, and to coordinate the resulting multi-jurisdictional investigations and prosecutions.  ICE’s new membership in IOC-2 will allow all the partner agencies to draw on data that now ICE will provide, while allowing ICE to work investigations with other agencies that may be targeting the same syndicates.

      These latest MOUs follow closely on the heels of two additional agreements DEA and ATF, respectively, signed recently with ICE.  Together, these agreements show a significant level of partnership and cooperation within the federal law enforcement agencies to target major criminal organizations.

Two dual Afghan/U.S. citizens today pleaded guilty for their roles in a scheme to offer $1 million in bribes to a U.S. Army contracting official in Afghanistan.

Rohullah Farooqi Lodin, 48, from Irvine, Calif., and Hashmatullah Farooqi, 38, from New York City, pleaded guilty to one count of offering to bribe a public official before Judge Liam O’Grady in U.S. District Court for the Eastern District of Virginia.

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

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

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

The bribery charge carries a maximum penalty of 15 years in prison and a fine of $250,000 or up to three times the value of the bribe, whichever is greater. Sentencing is scheduled for Oct. 16, 2009.

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

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

A former U.S. Army contracting official pleaded guilty today to accepting more than $80,000 in bribes in exchange for providing contract work to two Afghan trucking companies.

James Paul Clifton, 35, of Newport News, Va., waived his right to an indictment and pleaded guilty to a one-count criminal information in the Eastern District of Virginia. The information charges Clifton with corruptly steering service contracts, in his capacity as a public official, to Afghan International Trucking (AIT) and Afghan Trade Transportation (ATT) in exchange for bribe payments. Clifton is scheduled to be sentenced on Oct. 23, 2009.

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

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

The bribery count carries a maximum penalty of 15 years in prison and a fine of the greatest of either $250,000, three times the monetary value of the bribe, twice the gross gain or twice the gross loss.

The case is being prosecuted by Special Assistant U.S. Attorney Steve A. Linick, Deputy Chief of the Criminal Division’s Fraud Section, and Fraud Section Trial Attorney Liam Brennan. The investigation is being conducted by Defense Criminal Investigative Service, the FBI and members of the National Procurement Fraud Task Force.

The National Procurement Fraud Task Force, created in October 2006 by the Department of Justice, was designed to promote the early detection, identification, prevention and prosecution of procurement fraud associated with the increase in government contracting activity for national security and other government programs.

Miami physician Keith Russell, 65, and physician’s assistant Jorge Luis Pacheco, 50, were each sentenced to 97 months in prison, and physician’s assistant Eda Marietta Milanes, 43, was sentenced to 63 months in prison, for their roles in fraud schemes that involved billing Medicare for $10,903,509 worth of unnecessary HIV infusion treatments.

Russell, Pacheco and Milanes were also ordered to pay more than $3.1 million in restitution to the Medicare program during their sentencing hearings before U.S. District Judge Ursula Ungaro.

Russell, Pacheco and Milanes were convicted by a jury of conspiracy to commit health care fraud and multiple counts of health care fraud on March 17, 2009, after a two-week trial in Miami.

"Medical professionals serve as the gatekeepers of the Medicare system, and their single most important duty is to determine the best care for their patients," said Assistant Attorney General Lanny A. Breuer of the Criminal Division. "Physicians and their assistants who choose instead to abuse the public trust and enrich themselves by gaming Medicare will be vigorously prosecuted, and we will continue to expand our strike force operations to stamp out this kind of blatant fraud."

"The infusion clinic in this case was established for the sole purpose of defrauding Medicare – these doctors saw no patients, administered no legitimate medical services, and paid a cash kickback to patients for each visit," said Acting U.S. Attorney Jeffrey H. Sloman of the Southern District of Florida. "In this way, the defendants bilked Medicare out of millions of dollars in false claims. The U.S. Attorney’s Office in South Florida is committed to prosecuting these frauds, in the hopes of helping to restore the integrity of our health care system."

"This case illustrates the profound consequences to the Medicare program and its beneficiaries when trusted health care professionals conspire to defraud the program by participating in sham medical operations," said HHS Inspector General Daniel R. Levinson. "Our agents are working tirelessly with our Strike Force partners to investigate these spurious operations, bring perpetrators to justice, and recover stolen funds for the Medicare program."

Trial evidence established that Russell, Pacheco and Milanes served as the medical staff for M&P Group of South Florida Inc. (M&P Group) and Tendercare Medical Center Inc. (Tendercare), which purported to specialize in the treatment of Human Immunodeficiency Virus (HIV).

Russell was the medical director for both M&P Group and Tendercare during their operations. Pacheco and Milanes worked as medical assistants for Russell at both clinics. One of the owners of the clinics, Tony Marrero, testified at trial that the clinics were established for the sole purpose of defrauding Medicare. Marrero testified that the scheme was to submit claims for medically unnecessary HIV infusion and injection treatments.

Evidence at trial showed that the conspirators billed Medicare for $10,903,509 and were paid in excess of $3.1 during approximately two years of operations. Trial witnesses testified that the unnecessary medicines were not administered, and that the clinics were only operated to create the appearance of legitimacy. Marrero stated that he had an arrangement with a pharmaceutical wholesale company, Lifecare Medical, to buy invoices showing the purchase of large amounts of medications, when only minor amounts were actually bought.

Marrero also testified that he paid Milanes and the M&P group extra money to manipulate patients’ blood samples so the lab results would appear to support the fraudulent claims. Another physician’s assistant, Luz Borrego, testified how those samples were manipulated, and Borrego also stated that she would not give the medications because she knew the medications could hurt HIV patients if actually provided.

Trial testimony established that every patient who went to the clinics was paid a cash kickback of up to $200 per visit. Four patients testified at trial that they took bribes and never received medication at the clinics. One patient testified that he used his payments from the clinics to support his cocaine addiction. Another patient testified that he did not even have HIV, notwithstanding clinic documents showing he was being infused with medication to treat HIV.

Trial evidence established that Russell, Pacheco and Milanes worked at Tendercare and M&P Group at the same time. Further, patients testified at trial that they would received cash and bogus treatments from both clinics.

At sentencing, Milanes acknowledged that she was paid extra by Marrero to manipulate blood samples to justify the false claims. Marrero testified that Pacheco worked directly for him to determine what drugs would be falsely billed to Medicare.

On March 14, 2009, prior to the jury verdict and while trial was ongoing, Pacheco attempted to flee the United States, according to evidence presented in court. He was apprehended heading south on Krome Ave. in Miami-Dade County with $12,600 in cash and a false Florida driver’s license in the name of Jose Luis Falcon. Evidence presented to the court proved that prior to his apprehension, Pacheco cut off his ankle monitor in violation of the terms of his pre-trial release. Documents seized from Pacheco at the time of his apprehension contained multiple contacts in the Dominican Republic. According to evidence presented at court, Pacheco stated to officers that he was "going fishing." Pacheco was a licensed physician in Cuba before coming to the United States.

This case was investigated by the Department of Health and Human Services, Office of Inspector General, Office of Investigations (HHS-OIG) and the FBI . The work of the Homestead, Fla., Police Department was instrumental in the apprehension of Pacheco when he attempted to flee during trial.

The case was tried by Kirk Ogrosky, John S. (Jay) Darden and Charles D. Reed of the Criminal Division’s Fraud Section, with the investigative assistance of HHS-OIG and the FBI. The case was brought as part of the Medicare Fraud Strike Force (MFSF), supervised by the Criminal Division’s Fraud Section and Acting U.S. Attorney Sloman of the Southern District of Florida,

Since the inception of Strike Force operations in March 2007 – Miami (Phase One), Los Angeles (Phase Two), Detroit (Phase Three), and Houston (Phase Four) – the Strike Force has obtained indictments of more than 293 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 Strike Force teams across the separate phases are led by a federal prosecutor from the Criminal Division’s Fraud Section or the U.S. Attorney’s Office. Each team has an agent from the FBI and HHS-OIG.

To learn more about the HEAT team, go to: www.hhs.gov/stopmedicarefraud

WASHINGTON—Union Pacific Railroad Company (UP) has agreed to settle alleged violations of the Clean Water Act in Nevada by restoring 122 acres of mountain-desert streams and wetlands, implementing storm water controls at its construction sites, and paying a civil penalty, the Justice Department and U.S. Environmental Protection Agency announced today.

As part of the settlement, UP will restore 21 sections of Clover Creek and Meadow Valley Wash, in Clark and Lincoln Counties, Nev., and will monitor eight major restoration areas for at least five years. The work will include removal of illegal fill, restoration, monitoring, maintenance, re-vegetation, and invasive species removal, at an estimated cost of $31 million. UP will also pay $800,000 in civil penalties.

"This settlement will restore Clover Creek and Meadow Valley Wash," said John C. Cruden, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. "We are pleased that this agreement will result in the restoration of important mountain-desert streams and habitat for the state of Nevada."

"Meadow Valley Wash and Clover Creek are valuable, sensitive water resources which provide habitat to many fish species and endangered wildlife, such as the desert tortoise and southwestern willow flycatcher. Union Pacific’s long term restoration will restore Meadow Valley Wash and Clover Creek," said Laura Yoshii, Acting Regional Administrator for the Pacific Southwest region. "This significant settlement underscores EPA’s commitment to protect valuable water resources in Nevada."

The settlement resolves a complaint filed today by the United States against UP for alleged violations of the Clean Water Act stemming from the railroad’s activities in Clover Creek and Meadow Valley Wash in 2005. In January 2005, UP railroad tracks sustained significant damage following a flood in southern Nevada. The company made time-critical actions to repair damage.

However, UP also conducted extensive non-emergency construction and stream alteration work without obtaining the required Clean Water Act permits, which could have minimized and compensated for the damage to the streams. UP's unauthorized discharges included the construction of massive structures to control stream flows, such as dikes, berms, levees and diversions within the stream systems. The structures ranged from five to 15 feet high, and from 20 to thousands of feet long.

The Clean Water Act requires anyone engaged in construction within waters of the United States to obtain permits when altering waterways. The Corps of Engineers issues permits to discharge fill in water bodies. The state of Nevada is authorized to issue National Pollutant Discharge Elimination System permits for the discharge of pollutants in storm water from construction sites.

The proposed consent decree, lodged in the U.S. District Court in Las Vegas, is subject to a 30-day comment period and final court approval. A copy of the proposed consent decree is available on the Justice Department Web site at www.usdoj.gov/enrd/Consent_Decrees.html.

For more information, go to: http://www.epa.gov/region09/water/wetlands/index.html and http://www.epa.gov/region9/water/npdes/stormwater.html.

WASHINGTON—Aggregate Industries - Northeast Region Inc., will pay a $2.75 million civil penalty and implement a regional evaluation and compliance program to resolve numerous violations of the Clean Water Act at 23 facilities in Massachusetts and New Hampshire, the Justice Department and U.S. Environmental Protection Agency announced today.

The penalty is the largest ever assessed to a nationwide ready-mix concrete company for storm water violations under the Clean Water Act. The settlement is the latest in a series of federal enforcement actions to address storm water violations from industrial facilities and construction sites around the country.

Under the terms of the consent decree, the company will implement pollution control measures, such as closed-loop water recycling systems, to eliminate discharges into surface waters. These measures will result in the elimination of approximately 158,854 pounds of sediment, 2,106 pounds of oil and grease and 1,143 pounds of iron from the environment, as well as significant reductions in nitrate and nitrogen, by the end of 2009.

"We are committed to seeing that owners and operators of industrial facilities undertake the actions necessary to comply with storm water regulations," said John C. Cruden, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. "This settlement will result in better management practices and a robust compliance program at multiple facilities in the northeast to prevent harmful storm water run-off."

"Storm water run-off from industrial facilities such as these can carry sediment, debris, and other pollutants into surrounding waterways," said Ira W. Leighton, Acting Regional Administrator of EPA’s New England office. "This settlement is an important step in protecting our waters -- and we expect others in the industry to assess the adequacy of their own storm water controls."

The settlement also requires that the company perform comprehensive compliance evaluations at each of its 43 facilities in New England, as well as any facilities acquired in the next three years, to ensure that the facilities are in compliance with the Clean Water Act. The settlement also requires that the company conduct additional monitoring and reporting of storm water discharges, to hire personnel certified in storm water management to oversee compliance at all facilities where storm water permits are required, and to provide training in storm water management for all operational employees.

The complaint, filed in federal court with the settlement, alleges a pattern of violations since 2001 that were discovered after several federal inspections at the company’s facilities. The alleged violations included failure to document routine facility inspections and failure to perform quarterly monitoring and annual evaluations. In addition, the company allegedly discharged process waste waters, sanitary waste waters and storm water without proper permits from several facilities. Process waters include waters from sand-and-gravel and concrete production manufacturing operations such as vehicle and equipment cleaning, aggregate processing and washing, and concrete truck washout.

At the facilities where permits were in place, the complaint alleges the company failed to implement best management practices such as having proper drainage, failed to perform pavement sweeping and failed to clean and maintain catch basins. The runoff, which contained total suspended solids, oil and grease, metals, and caustics detrimental to aquatic life and water quality, flowed into wetlands, streams and brooks that flowed into tributaries of the Atlantic Ocean.

The Clean Water Act requires that industrial facilities, such as ready-mix concrete plants, sand and gravel facilities and asphalt batching plants, have controls in place to prevent pollution from being discharged with storm water into nearby waterways. Each site must have a storm water pollution prevention plan that sets guidelines and best management practices that the company will follow to prevent runoff from being contaminated by pollutants.

Since being notified of the violations by EPA, the company has made significant improvements to its storm water management systems.

Without onsite controls, runoff from ready-mix concrete and sand and gravel facilities can flow directly to the nearest waterway and can cause water quality impairments such as siltation of rivers, beach closings, and fishing restrictions, and habitat degradation. As storm water flows over these sites, it can pick up pollutants, including sediment, used oil, pesticides, solvents and other debris. Polluted runoff can harm or kill fish and wildlife and can affect drinking water quality.

Aggregate-NE, a fully owned subsidiary of Aggregate Industries, Inc., a Delaware corporation with facilities in several regions throughout the United States, operates approximately 43 facilities in New England. The company is one of the largest producers of aggregates (crushed stone, sand and gravel), asphalt batching, and ready-mixed concrete in New England.

The consent decree, lodged in the U.S. District Court for Massachusetts, 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 Department of Justice Web site at http://www.usdoj.gov/enrd/Consent_Decrees.html.

Aggregate-NE is required to pay the penalty within 30 days of the court’s approval of the settlement.

WASHINGTON—Dennis Beetham and his company, D.B. Western Inc., have been indicted on both federal and state charges alleging that he illegally dumped hazardous and other industrial waste in Crook County, Ore., the Justice Department announced. The defendants are scheduled to be arraigned on the federal charges today, Aug. 6, 2009, at 1:30 p.m. PT, at the U.S. Courthouse in Portland, Ore.

The federal charges allege that Beetham and his company unlawfully mishandled several hazardous wastes. First, the defendants are charged with dumping hazardous polymerized liquid formaldehyde into a cinder cone, a geological formation, on a ranch Beetham owned in Powell Butte, Ore. Second, the defendants are charged with dumping nitric acid into the same cinder cone. Finally, Beetham and his company are charged with storing hazardous polymerized liquid formaldehyde waste at the ranch.

The federal charges each allege a violation of the Resource Conservation and Recovery Act (RCRA). RCRA regulates the handling of hazardous wastes from "cradle to grave" – that is, from the creation of a waste through its disposal. RCRA prohibits the treatment, storage and disposal of any hazardous waste without interim status or a permit. The RCRA charges are felonies. Each of the four counts carries a maximum prison term of five years.

Formaldehyde is a chemical used in a variety of products ranging from textiles to wood products. When discarded, formaldehyde qualifies as a hazardous waste under RCRA.

Nitric acid is used in many industrial settings. However, nitric acid is extremely corrosive, and is considered a hazardous waste under RCRA when discarded.

The state charges against Beetham and D.B. Western were filed in Crook County following an investigation by District Attorney Daina Vitolins. The state indictment alleges that the defendants unlawfully created air pollution, disposed of solid waste without a permit, unlawfully created water pollution and failed to complete a clean-up of a waste site. These charges stem from the defendants’ alleged dumping of vast quantities of non-hazardous industrial waste and household waste into the cinder cone on the Powell Butte ranch; burning the waste; and failing to complete clean-up of the site as directed by the state Department of Environmental Quality.

The federal investigation was undertaken jointly by the U.S. Attorney’s Office for the District of Oregon, the Justice Department’s Environment and Natural Resources Division and the Crook County District Attorney, with investigative leadership by the Environmental Protection Agency Criminal Investigations Division and the Oregon Department of Environmental Quality. District Attorney Daina Vitolins was designated as a Special Assistant U.S. Attorney to assist in the federal investigation.

An indictment is only an accusation of a crime, and a defendant is presumed innocent until proven guilty.

Assistant U.S. Attorney Dwight C. Holton, Special Assistant U.S. Attorney Daina Vitolins for the District of Oregon and Senior Trial Attorney J. Ronald Sutcliffe of the Department of Justice are prosecuting the federal case.

WASHINGTON – Attorney General Eric Holder and Agriculture Secretary Tom Vilsack announced today that the Department of Justice and the U.S. Department of Agriculture (USDA) will hold joint public workshops to explore competition issues affecting the agriculture industry in the 21st century and the appropriate role for antitrust and regulatory enforcement in that industry. These are the first joint Department of Justice/USDA workshops ever to be held to discuss competition and regulatory issues in the agriculture industry.

The joint Department of Justice/USDA workshops will address the dynamics of competition in agriculture markets including, among other issues, buyer power (also known as monopsony) and vertical integration. They will examine legal doctrines and jurisprudence and current economic learning, and will provide an opportunity for farmers, ranchers, consumer groups, processors, the agribusinesses, and other interested parties to provide examples of potentially anticompetitive conduct. The workshops will also provide an opportunity for discussion for any concerns about the application of the antitrust laws to the agricultural industry.

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

"Maintaining a robust agricultural sector is crucial to the strength of the American economy and to who we are as a nation," said Attorney General Holder. "Through the dialogue established in these workshops and, ultimately through our actions, we are committed to ensuring that competition and regulatory actions benefit all American consumers and businesses."

"It is important to have a fair and competitive marketplace that benefits agriculture, rural economies and American consumers," said Agriculture Secretary Vilsack. "The joint workshops between the Department of Justice and USDA will allow a dialogue on very important issues facing agriculture today."

The first workshop will be held in early 2010. While some of the workshops may be held in Washington, D.C., others will be held regionally. The Department of Justice and USDA are soliciting public comments from lawyers, economists, agribusinesses, consumer groups, academics, agricultural producers, agricultural cooperatives, and other interested parties.

"For the first time ever, farmers, ranchers, consumers groups, agribusinesses and the federal government will openly discuss legal and economic issues associated with competition in the agriculture industry,"said Christine A. Varney, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. ‘This is an important step forward in determining the best course of action to address the unique competition issues in agriculture."

The Department of Justice and USDA are interested in receiving comments on the application of antitrust laws to monopsony and vertical integration in the agricultural sector, including the scope, functionality and limits of current or potential rules.

The Department and USDA are also inviting input on additional topics that might be discussed at the workshops, including the impact of agriculture concentration on food costs, the effect of agricultural regulatory statutes or other applicable laws and programs on competition, issues relating to patent and intellectual property affecting agricultural marketing or production, and market practices such as price spreads, forward contracts, packer ownership of livestock before slaughter, market transparency, and increasing retailer concentration.

The public and press are invited to attend the hearings. Additional information about the date, time and location of the workshops will be provided at a later date. Interested parties should submit written comments in both paper and electronic form to the Department of Justice no later than Dec. 31, 2009. All comments received will be publicly posted. Two paper copies should be addressed to the Legal Policy Section, Antitrust Division, U.S. Department of Justice, 450 5th Street, N.W., Suite 11700, Washington, D.C. 20001. The Department’s Antitrust Division is requesting that the paper copies of each comment be sent by courier or overnight service, if possible. The electronic version of each comment should be submitted to [email protected]. Detailed agendas and schedules for the workshops will be made available on the Antitrust Division’s web site at www.usdoj.gov/atr.

WASHINGTON – The Justice Department today announced an agreement with Fayette County, Pa., to improve access to all aspects of civic life for persons with disabilities. The agreement was reached under the Department’s Project Civic Access initiative, which aims to bring state and local governments into compliance with the Americans with Disabilities Act (ADA). This agreement is the 167th under Project Civic Access.

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

"Civic access is a basic civil right guaranteed to all, and today’s agreement illustrate’s Fayette County’s commitment to improving access for its residents and visitors with disabilities," said Acting Assistant Attorney General Loretta King of the Civil Rights Division. "County officials are to be commended for working to ensure equal access to its programs, services and facilities for all residents, including persons with disabilities."

Fayette County is located in western Pennsylvania, close to Virginia. According to census data, approximately 145,651 residents make it their home and more than 23 percent of those individuals have a disability. Founded in 1783, Fayette County’s seat is Uniontown.

Under its agreement, the county will:

• Make physical modifications to facilities so that parking, routes into and inside buildings, restrooms and drinking fountains are accessible to people with disabilities;
• Ensure effective communication in its programs and services for persons who are deaf, hard of hearing, blind or have low vision;
• Provide accessible polling places;
• Provide access to sidewalks for persons with mobility disabilities by installing curb ramps;
• Provide equal access to its emergency management program and services;
• Officially recognize the Pennsylvania relay service and train staff in using the relay service and a TTY;
• Ensure that the county’s official website is accessible to people with disabilities, including individuals who are blind or have low vision;
• Post, publish and distribute a notice to inform members of the public of the provisions of title II of the ADA and their applicability to the county’s programs, services, and activities;
• Provide information to the public concerning the existence and location of the county’s accessible services, activities and programs; and
• Install signs at any inaccessible entrance to a facility directing persons with disabilities to an accessible entrance or to information about other accessible facilities.

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

WASHINGTON – The United States has filed a lawsuit to bar a married couple’s alleged nationwide tax fraud scheme involving so-called asset protection, the Justice Department announced today. The civil injunction lawsuit, filed in U.S. District Court in the Southern District of Florida, alleges that Byron Denver Hatcher and his wife, Kim Reinhart, helped customers hide their assets and business income through multiple transactions using a series of sham foreign trusts, sham foreign corporations and sham trustees.

The scheme allegedly created the illusion that a customer’s business was based and owned overseas, when in fact the customer continued to operate and own the business in the United States. The lawsuit alleges that Hatcher and Reinhart falsely told customers that these transactions made the customers’ income not subject to U.S. income tax.

According to the complaint, at least 40 current scheme participants located all over the United States, and in Canada, Europe, Asia and Australia use the asset-protection scheme to hide their income and assets. Defendants’ customers allegedly include a motorcycle-parts business in Hollister, Calif.; an air-pollution-control-systems business in Elkton, Fla.; two auto-repair businesses in Ferndale, Wash.; two backyard deck and spa businesses in Fort Pierce, Fla. and Chicago; a medical receivables business in California; a race-horse business in Nevada; and two Internet pornography businesses based in Illinois and Michigan.

The suit further alleges that between 2000 and 2005, these participants funneled approximately $28 million through defendants’ scheme, causing an estimated $4.3 million loss to the U.S. Treasury. The government asked the court to require the defendants to stop the scheme and turn over financial records documenting scheme transactions. The suit says that for Hatcher and Reinhart, the term "asset protection" is a euphemism for "tax fraud."

"The Justice Department and Internal Revenue Service are working vigorously to stop tax fraud schemes and detect those who use them," said John A. DiCicco, Acting Assistant Attorney General for the Justice Department’s Tax Division.

According to the government complaint, Hatcher and Reinhart reside in and operate the scheme from both Florida and the Bahamas.

The complaint states the couple were convicted of bank fraud in a Florida state court in 1993. A Florida federal judge found the couple in contempt of court in 2002 for helping a Rockford, Ill., man violate an injunction that barred him from sending spam advertising for his cyberporn business to America Online subscribers.

In the past decade the Tax Division has obtained injunctions against more than 410 tax preparers and tax-fraud promoters. Information about these cases is available on the Justice Department Web site.