District Not Recorded
The source did not name an office we could identify. These records remain unassigned rather than guessed.
Attorney General Appoints New Chief Immigration JudgeRead the Press Release
WASHINGTON – Attorney General Eric Holder announced today the appointment of Brian M. O’Leary as the Executive Office for Immigration Review’s (EOIR) Chief Immigration Judge. Prior to his appointment, Judge O’Leary served as an immigration judge from May 2007 to June 2009 at the Arlington, Va., Immigration Court. He served as a temporary board member on the Board of Immigration Appeals from May 2006 to May 2007 and as a deputy chief immigration judge in the Office of the Chief Immigration Judge from March 2003 to May 2006.
Judge O’Leary served as an assistant chief immigration judge from May 1994 to March 2003, during which time, from May 2000 to October 2001, he served as an acting deputy chief immigration judge. Before joining EOIR, Judge O’Leary worked for five years in numerous positions with the former Immigration and Naturalization Service (INS) Headquarters Office of the General Counsel where he served as associate general counsel, deputy associate general counsel, and assistant general counsel. He also served with the U.S. Attorney’s Offices in the Southern District of Florida, as well as the Eastern District of Virginia, where he worked as special assistant U.S. attorney. Prior to that experience, Judge O’Leary worked as a trial attorney with the INS Miami District Office.
Judge O’Leary completed undergraduate work at Georgetown University’s School of Foreign Service in 1982, and received a juris doctorate in 1985 from the New England School of Law. He is a member of the Massachusetts and Florida state bars.
The Office of Chief Immigration Judge is part of EOIR located in Falls Church, Va. The Chief Immigration Judge provides overall program direction, articulates policies and procedures, and establishes priorities for more than 200 immigration judges located in more than 50 immigration courts nationwide. EOIR’s immigration judges conduct administrative court proceedings to determine whether foreign-born individuals —who are charged by the Department of Homeland Security with violating immigration law —should be ordered removed from the United States or should be granted relief from removal and be permitted to remain in this country. Immigration judges decide each case independently, and their decisions are final unless appealed or certified to the Board of Immigration Appeals.
Assistant Attorney General Ron Weich Announces Leadership Team <br /> in the Office of Legislative AffairsRead the Press Release
Ronald Weich, Assistant Attorney General for the Justice Department’s Office of Legislative Affairs today announced two new members of the Office’s leadership team. Mark D. Agrast and Judith Appelbaum have been appointed as Deputy Assistant Attorneys General.
Agrast joins the Office as the Deputy Assistant Attorney General handling criminal and national security matters. Appelbaum is the Deputy Assistant Attorney General managing civil and civil rights issues, as well as nominations.
"Mark and Judy round out an outstanding team in the Office of Legislative Affairs," said Weich. "Their deep policy and congressional experience will prove invaluable as we work with Congress to advance the Department of Justice’s legislative initiatives. They bring the vision and intellect to ensure that this Office performs at the highest of levels."
Appelbaum joined the Department from the American Constitution Society for Law and Policy, where she served as the Director of Programs since 2006. Previously, she was Vice President and Legal Director at the National Women’s Law Center (NWLC), where she participated in litigation, advocacy, and public education activities in many areas of NWLC’s work, with a particular focus on civil rights and judicial nominations. Before that, she served as Counsel to Sen. Edward Kennedy on his Judiciary Committee staff and his chief advisor on women’s rights issues. Appelbaum received her B.A. summa cum laude from the University of Pennsylvania and her law degree from Stanford Law School.
Agrast previously served as the Senior Vice President for Domestic Policy and later as a Senior Fellow at the Center for American Progress. Prior to that, he spent more than a decade on Capitol Hill as Counsel and Legislative Director to Rep. William Delahunt of Massachusetts and as a senior aide to Rep. Gerry Studds, also of Massachusetts. Agrast received his B.A. summa cum laude from Case Western Reserve University in 1978, attended Oxford University as a Rhodes Scholar from 1978 to 1981, and received his law degree from Yale Law School in 1985.
The Office of Legislative Affairs is responsible for the development and implementation of strategies to advance the Department’s legislative initiatives and other interests relating to Congress. The Office also articulates the Department’s position on legislation proposed by Congress, facilitates the appearance of Department witnesses at congressional hearings, and manages the interagency clearance process led by Office of Management and Budget. The Office also participates in the Senate confirmation process for federal judges and Department nominees, such as Assistant Attorneys General and U.S. Attorneys. These functions are important to the Department’s cooperative and productive relationship with Congress.
U.S. National Charged with Sexual Abuse While OverseasRead the Press Release
Andrew Warren, 41, has been charged in U.S. District Court for the District of Columbia with one count of sexual abuse in Algeria within the special maritime and territorial jurisdiction of the United States.
The one-count indictment, returned by a federal grand jury on June 18, 2009, and unsealed today, alleges that Warren sexually assaulted another individual on Feb. 17, 2008. The indictment also alleges that at the time of the alleged sexual assault, the victim was incapable of appraising the nature of the conduct and was physically incapable of declining participation in, or communicating unwillingness to engage in the sexual act. Warren surrendered to Special Agents of the Diplomatic Security Service this morning and was arraigned this afternoon before U.S. Magistrate Judge John M. Facciola this afternoon.
If convicted, Warren faces up to life in prison.
The case is being investigated by the Diplomatic Security Service. The Bureau of Diplomatic Security is the U.S. Department of State's law enforcement and security arm. The case is being prosecuted by attorneys from the U.S. Attorney’s Office for the District of Columbia and the Criminal Division’s Domestic Security Section.
An indictment is a formal accusation of criminal conduct, not evidence of guilt. A defendant is presumed innocent unless and until convicted through due process of law.
Indictment
Superseding Indictment Returned in Federal Kidnapping and Drug CaseRead the Press Release
Additional charges and defendants have been added to a federal case arising from the abduction of a boy from his Las Vegas home in October 2008.
Jose Lopez-Buelna, aka "Miguel," 48; Jesus Gastelum, aka "Jose," 35; and Erik Dushawn Webster, 44; all of Las Vegas, were each charged today in a superseding indictment with conspiracy to distribute a controlled substance, specifically to distribute five kilograms or more of cocaine.
Lopez-Buelna was also charged with conspiracy to launder money; conspiracy to commit kidnapping; kidnapping; conspiracy to commit hostage taking; hostage taking; and two counts of money laundering-promotion.
Gastelum was also charged with conspiracy to launder money; conspiracy to commit kidnapping; kidnapping; conspiracy to commit hostage taking; hostage taking; two counts of money laundering-promotion; and money laundering-monetary transaction.
Webster was also charged with conspiracy to launder money and money laundering-promotion, and Luis Vega-Rubio, aka "Bear," 36, of Las Vegas, was charged with conspiracy to commit kidnapping; kidnapping; conspiracy to commit hostage taking; and hostage taking.
The previous indictment in the case, returned on March 17, 2009, charged only Lopez-Buelna and Vega-Rubio with conspiracy to kidnap a child.
The superseding indictment alleges that Lopez-Buelna and Gastelum provided money to individuals to purchase motor homes in the United States to transport cocaine and money between Mexico, the United States and Canada. The superseding indictment alleges the motor homes were modified after purchase with hidden lead-lined compartments to conceal cocaine and money from law enforcement.
According to the superseding indictment, Webster and other unindicted co-conspirators – including Clemens Tinnemeyer – agreed to drive the motor homes to various locations, including Nevada, California, Georgia, Illinois, New York, Canada and Mexico. Lopez-Buelna and Gastelum allegedly paid Tinnemeyer between $17,000 and $25,000 per trip to drive a motor home across the United States to Mexico and Canada, and allegedly provided Tinnemeyer additional money for side trips, expenses and motor home repairs.
The superseding indictment alleges that Tinnemeyer made several trips in the motor home between Mexico and different cities in the United States, and that in or about June 2008, Tinnemeyer allegedly drove a motor home to Atlanta, New York and Chicago, when he discovered approximately $4.5 million in a hidden compartment.
Tinnemeyer allegedly stole the $4.5 million, and Lopez-Buelna and others started searching for them. According to the superseding indictment, they hired private investigators, visited relatives and offered Tinnemeyer’s friends and associates money. In July, Vega-Rubio allegedly delivered a threatening note to Tinnemeyer’s daughter in Las Vegas telling Tinnemeyer to contact them.
According to the superseding indictment, approximately three months later, on Oct. 15, 2008, Tinnemeyer’s young grandson was abducted from Tinnemeyer’s daughter’s home in Las Vegas by an unknown number of persons. The boy allegedly was held hostage by unknown individuals on the orders of Lopez-Buelna, Gastelum and Vega-Rubio for approximately three days to compel Tinnemeyer to come out of hiding and to contact them. The boy allegedly was held at more than one location and was transported between locations in a suitcase.
The boy was released on Oct. 18, 2009, after law enforcement submitted photographs of Lopez-Buelna to the media as a person of interest in the abduction, as well as information that Tinnemeyer had been arrested and that a substantial amount of cash had been recovered.
If convicted of the drug conspiracy charge, the defendants face a maximum penalty of life in prison and a $4 million fine. The kidnapping charge carries a maximum penalty of life in prison. The money laundering charges carry a maximum penalty of 20 years in prison.
The superseding indictment also alleges that the defendants shall forfeit all property derived from the proceeds of the offenses, including more than $3.9 million in cash, numerous vehicles, a boat and two semi-automatic pistols.
All of the defendants, except Jesus Gastelum, who is a fugitive, are in federal custody pending trial. Arraignments for Lopez-Buelna, Webster and Vega-Rubio are set for July 10, 2009, at 10:30 a.m., before U.S. Magistrate Judge Peggy A. Leen.
The public is reminded that an indictment contains only charges and is not evidence of guilt. The defendants are presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
The case is being investigated by the U.S. Drug Enforcement Administration, the FBI, the Las Vegas Metropolitan Police Department and Internal Revenue Service - Criminal Investigation.
The initial complaints and indictment were handled by Assistant U.S. Attorneys Kathleen Bliss and Nicholas Dickinson. The superseding indictment and prosecution are being handled by Trial Attorneys Marty Woelfle and Margaret Honrath of the Criminal Division’s Organized Crime and Racketeering Section.
Phoenix Asphalt Paver Convicted of Tax EvasionRead the Press Release
WASHINGTON - John D. Stacey, a resident of Phoenix, was convicted today of income tax evasion, corrupt interference with the due administration of the Internal Revenue Service (IRS) and multiple counts of fraudulent use of a social security number, the Department of Justice and IRS announced. A federal jury convicted Stacey of all counts of the indictment following a three week trial before Judge Neil V. Wake in Phoenix.
Stacey was indicted by a federal grand jury in July 2008. According to the evidence presented at trial, Stacey operated a sole proprietorship asphalt paving company that did business under various names, including A to Z Paving, Triple A Paving, Texas Paving, Pave Your Way Construction and A to Z Paving Engineering, among others. Stacey earned gross income in excess of $4 million from his business during the years 2000 to 2003, but he has never filed an individual income tax return with the IRS.
According to the evidence presented at trial, since at least February 2002, Stacey knew that he owed taxes, penalties and interest for tax years 1995, 1996 and 1997. Stacey has made no payments to the IRS towards this tax debt. In addition to not paying his outstanding tax debt, Stacey took numerous steps to frustrate the IRS’s efforts to both investigate the case and collect tax that he owed. For example, Stacey made multiple false statements to IRS agents, operated his business to prevent creating business records, made a number of luxury purchases rather than paying his outstanding tax debt and provided paving customers and financial institutions with multiple false social security numbers to prevent the IRS from receiving accurate information about his income, assets and financial transactions.
Judge Wake scheduled sentencing for Sept. 28, 2009. Stacey faces a maximum sentence of five years in prison for the tax evasion charge; a maximum sentence of three years in prison for the corrupt endeavor charge; and a maximum sentence of five years in prison for each false social security charge. Additionally, Stacey faces a fine of $250,000, for each charged count.
Acting Assistant Attorney General John A. DiCicco of the Justice Department’s Tax Division commended the IRS-Criminal Investigation special agents who investigated the case, as well as Tax Division trial attorneys Ellen Quattrucci, Monica Edelstein and Stephanie Carowan, who prosecuted the case. Acting Assistant Attorney General DiCicco also thanked the U.S. Attorney’s Office in Phoenix for their assistance in successfully prosecuting this matter.
Fort Myers Real Estate Agents Sentenced to Prison for Tax CrimesRead the Press Release
WASHINGTON – Sheri Redekker Barry and Warren Thomas Barry, a wife and husband who are both real estate agents in Fort Myers, Fla., have been sentenced to prison for conspiracy and failure to file tax returns, the Justice Department and Internal Revenue Service (IRS) announced today. U.S. District Court Judge John E. Steele on Monday sentenced Sheri Barry to 36 months in prison and Warren Barry to 24 months in prison. The court also ordered the Barrys to pay restitution in the amount of $555,728.
In March 2009, a federal jury convicted the Barrys of conspiring to impede and impair the IRS. The jury also convicted Sheri Barry of four counts of failure to file for the tax years 2002 through 2005 and convicted her husband of three counts of failure to file for the tax years 2003 through 2005.
According to the indictment and evidence presented at trial, Sheri Barry had not filed a tax return since 1988, and Warren Barry had not filed a tax return since 2000. The Barrys sent multiple letters to the IRS advancing false and frivolous tax defier claims purporting to set forth reasons why the defendants were not required to file returns or pay taxes. The IRS repeatedly warned Sheri and Warren Barry that their positions were frivolous and advised the Barrys of their legal duty to file returns. The IRS also issued notices of federal tax liens to Sheri and Warren Barry.
According to the indictment and evidence presented at trial, Sheri and Warren Barry ignored the IRS’s warnings and conspired to hide their income and assets from the IRS. For example, Sheri and Warren Barry engaged in a pattern of buying and selling real estate in the Fort Myers area through Sheri Barry’s children and other nominees. Sheri and Warren Barry deposited their substantial real estate earnings in bank accounts in the name of nominees, including Sheri Barry’s children. Additionally, Sheri and Warren Barry attempted to pay their outstanding tax liabilities with fictitious instruments, called Bills of Exchange. Sheri and Warren Barry also purchased the fictitious instruments from American Rights Litigators (ARL).
Acting Assistant Attorney General John A. DiCicco of the Justice Department’s Tax Division commended the IRS special agents who investigated the case, as well as Assistant U.S. Attorney Doug Molloy and Tax Division trial attorney Michael Boteler who prosecuted the case.
In August 2004, a federal district judge permanently enjoined ARL and two of its promoters from the sale of a nationwide tax scam. In April 2008, a federal court in Florida sentenced two promoters of ARL, as well as ARL client Wesley Snipes, to prison for tax offenses. In September 2008, five promoters of ARL were indicted for tax fraud.
More information about the Justice Department’s Tax Division, including its tax enforcement efforts against ARL and its customers, may be found at http://www.usdoj.gov/tax.
Former Virginia Marine Products Company Executive Pleads Guilty to Bid Rigging on Contracts with the U.S. Navy and OthersRead the Press Release
WASHINGTON — The chief executive officer of a former Virginia marine products company pleaded guilty and has agreed to pay a $100,000 criminal fine and serve time in jail for his role in a conspiracy to rig bids and allocate customers with respect to marine products purchased by the U.S. Navy, the U.S. Coast Guard, and other public and private entities, the Department of Justice announced today.
According to a one-count felony charge filed on May 26, 2009, in the U.S. District Court in Norfolk, Va., Frank A. March, chief executive officer of a former marine products company located in Clearbrook, Va., participated in a conspiracy between June 2001 and December 2002 to allocate customers and rig bids for contracts of foam-filled marine fenders and buoys. During the course of the conspiracy, the conspirators discussed and agreed to allocate among themselves contracts from the Department of Defense (DOD), the Department of Homeland Security and others. Under the plea agreement, March has agreed to cooperate fully in the Department’s ongoing antitrust investigation. The amount of jail time March will serve will be determined by the court.
Foam-filled marine fenders are used as a cushion between ships and fixed structures, such as docks, piers or other ships. Foam-filled buoys are used in a variety of applications, such as channel markers and navigational aids.
"The Department’s Antitrust Division is committed to ensuring that both the military and private businesses are able to buy these necessary marine products at the lowest possible price," said Christine A. Varney, Assistant Attorney General in charge of the Department’s Antitrust Division. "Those who engage in bid rigging will be held accountable for their actions."
Several other executives have already pleaded guilty to participating in this same conspiracy. In January 2008, Robert Taylor, former president of March’s company based in Clearbrook, Va., was sentenced to pay a $300,000 criminal fine and to serve two years in jail for his role in this conspiracy as well as additional charges. Donald Murray, the company’s former chief financial officer, was sentenced in March 2008 to pay a $75,000 criminal fine and to serve a year and a half in jail for his role in this conspiracy and another charge. A California executive, Gerald Thermos, pleaded guilty to participating in the same conspiracy and was sentenced in March 2008 to pay a criminal fine of $50,000 and to serve four months in jail.
"Those that try to circumvent the Government contract process should take note of this," said Sharon Woods, Director of the Defense Criminal Investigative Service (DCIS). "DCIS will aggressively pursue individuals and contractors that engage in bid-rigging and price-fixing schemes with our partners in the Department of Justice."
The bid-rigging charge, a violation of the Sherman Act, carries a maximum penalty of three years in prison and a $350,000 fine for individuals for violations occurring before June 22, 2004. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.
Today’s charge is an example of the Department’s commitment to protect U.S. taxpayers from public procurement fraud through its creation of the National Procurement Fraud Task Force. The National Procurement Fraud Initiative announced in October 2006 is designed to promote the early detection, identification, prevention and prosecution of procurement fraud associated with the increase in contracting activity for national security and other government programs.
The ongoing investigation is being conducted by the Antitrust Division’s National Criminal Enforcement Section, DOD’s Office of Inspector General, DCIS and the U.S. Navy Criminal Investigative Service. Anyone with information concerning bid rigging or other anticompetitive conduct in the marine products industry is urged to call the National Criminal Enforcement Section of the Antitrust Division at 202-307-6694 or the Arlington, Va., Resident Agency of the DCIS at 703-604-8439.
Former Promoter of Abusive Trusts Pleads Guilty to Tax EvasionRead the Press Release
WASHINGTON - Roderick Prescott, a resident of Orem, Utah, and a former principal of National Trust Services (NTS) in San Jose, Calif., and later Selma, Ore., pleaded guilty today to tax evasion, the Justice Department and Internal Revenue Service (IRS) announced. Prescott admitted to evading at least $550,000 in personal income taxes for 1998 and 1999. Prescott was scheduled to begin trial on July 7, 2009, before Chief U.S. District Judge Ann Aiken in Eugene, Ore.
According to the indictment, the plea agreement and the government’s trial brief, Prescott and his former business partner Leroy Fritts (now deceased) earned significant income from the nationwide promotion and sale of abusive trusts through NTS, which they founded in 1988. Prescott and Fritts deposited approximately $3.5 million into various bank accounts through the sale of such trusts. They also earned income from recruiting clients of NTS to invest in Fountainhead Global Trust (FGT), a purported offshore investment that promised returns as high as 50 percent per year.
According to the government’s trial brief, FGT was a Ponzi scheme which collected approximately $20 million in investors’ funds from 1995 through 1999. FGT transferred some of the money to an offshore account in the Cayman Islands at the Bank of Bermuda, ostensibly to be invested in high-interest debt through a Florida entity called "Cash 4 Titles." Prescott and Fritts then funneled part of the money in the account back to themselves. They also took large sums of investors’ funds without ever sending the money offshore. The government asserts that instead, they spent the funds often by direct payments from FGT bank accounts on luxury goods and real estate. Eventually the scheme broke down and the vast majority of investors lost their full investments.
According to the government’s trial brief, despite making significant income from NTS and FGT, neither Prescott nor Fritts filed any individual federal income tax returns for 1998 or 1999. Prescott last filed a tax return in 1991. Prescott and Fritts used FGT money to purchase, among other items, a nearly $3 million ranch near Grants Pass, Ore., on which they began construction of two custom-built luxury log homes. The construction budget was approximately a combined $2 million, and they spent over $465,000 before halting construction in 1999. Prescott and Fritts also purchased solar panels for the ranch for over $328,000, frozen food in anticipation of a year 2000 apocalypse for over $1.1 million and numerous vehicles and other personal items.
According to the government’s trial brief, Prescott and Fritts used an array of purported trusts and related bank accounts, including numerous offshore bank accounts at the Bank of Bermuda in the Cayman Islands, to conceal their income from the IRS. Prescott and Fritts also used false or fictitious taxpayer identification numbers and offshore credit cards in fake names issued to them by the Bank of Bermuda in the Cayman Islands.
Judge Aiken scheduled sentencing for Sept. 9, 2009. Prescott faces a maximum sentence of five years in prison and a maximum fine of $250,000.
Acting Assistant Attorney General John A. DiCicco commended the IRS-Criminal Investigation special agents who investigated the case, as well as Tax Division trial attorneys Jay Nanavati and Timothy Stockwell who prosecuted the case.
Additional information about tax fraud schemes to watch out for may be found on the IRS Criminal Investigation Web site http://www.ustreas.gov/irs/ci. Additional information about the Justice Department’s Tax Division and its enforcement efforts may be found at http://www.usdoj.gov/tax.
Former National Archives Employee Pleads Guilty to Conflict of InterestRead the Press Release
WASHINGTON – Jeffrey Davis, a former employee of the National Archives and Records Administration (NARA), pleaded guilty today in U.S. District Court in Atlanta to engaging in a felony conflict of interest by collecting fees from customers of a company he owned and operated for services he performed as part of his official duties at NARA, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division.
Davis, 43, was assigned as an archives technician at NARA’s Atlanta Records Center from August 2005 until his employment was terminated in October 2008, according to court documents. As an archives technician, Davis was responsible for assisting the public with requests for court documents maintained by NARA. According to the plea agreement, from July 2007 until October 2008 while employed by NARA, Davis also owned and operated a company named Documents Archival Retrieval Transferring Services of Georgia (DARTSOFGA), a document retrieval company that charged its customers a fee for obtaining court records in addition to the fees charged by NARA and the Administrative Office of the United States Courts (AOUSC).
From September 2007 to October 2008, Davis admitted he used his official position at NARA to retrieve and copy court documents for DARTSOFGA customers. In an effort to conceal from NARA his affiliation with DARTSOFGA and to increase DARTSOFGA’s profits, Davis failed to pay NARA and AOUSC the applicable fees associated with the DARTSOFGA customer requests for court records.
Davis pleaded guilty to receiving monetary payments from DARTSOFGA in connection with the retrieval of court records from NARA using his official position. According to the plea agreement, Davis admitted such payments were an illegal supplementation of the salary paid by the government as compensation for his services as a NARA employee. Davis faces a maximum sentence of five years in prison and a $250,000 fine. Davis’ sentencing is scheduled for Sept. 10, 2009, before District Judge Timothy C. Batten Sr.
This case is being prosecuted by Trial Attorney Justin V. Shur of the Criminal Division’s Public Integrity Section, headed by William M. Welch II, Chief. The case is being investigated by the U.S. National Archives and Records Administration, Office of Inspector General.
Indictment
Former Indiana Water Treatment Plant Superintendent Pleads Guilty to Falsifying ReportsRead the Press Release
Herbert L. Corn, the former superintendent of the city ofRochester Wastewater Treatment Plant in Rochester, Ind., pleaded guilty today in U.S. District Court in South Bend, Ind., to falsifying monthly discharge monitoringreports that concealed violations of the Clean Water Actat the Rochester plant.
Corn pleaded guilty to a five-count felonyinformation charging him with making false statements in discharge monitoring reports submitted to the Indiana Department of Environmental Management (IDEM). He admitted that from September 2004 and continuing through May 2007, he submitted at least five reports containing false data for treated water that is discharged from the Rochester plant into Mill Creek, a tributary of the Tippecanoe River.
Under the federal Clean Water Act, which is administered and enforced by IDEM as well as the U.S. Environmental Protection Agency (EPA), before discharging the waste water it collects to Mill Creek, the Rochester plant must treat the water to meet concentration limits on certain pollutants as set forth in its permit. Three pollutants in the permit that have concentration limits are Escherichia Coli bacteria (E. Coli), Ammonia NH3-N and Carbonaceous Biological Oxygen Demand-5 (CBOD). The discharge of pollutants above the concentration limits for these pollutants is a violation of the permit and the Clean Water Act. The Rochester plant is required to report and certify the results of its discharge sampling on a monthly basis to IDEM.
As part of the plea agreement, Corn admitted that on at least five separate occasions from September 2004 and continuing through May 2007 he reported levels in the discharge reports submitted to IDEM that indicated the levels of E. Coli, Ammonia NH3-N, and CBOD-5 were in compliance with the permit concentration limits when he knew in fact they were not.
"All citizens should be confident that their civil servants are providing accurate reports and abiding by laws meant to protect the environment," said John C. Cruden, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. "The prosecution in this case demonstrates the coordinated effort of federal, state and local officials to investigate and prosecute those violating the nation’s environmental laws."
"Accurate information about a community’s water quality is essential to protect the public health and the environment," said Randy Ashe, Special Agent-in-Charge of EPA’s criminal enforcement program in Chicago. "Those who submit false reports or bogus data undermine those efforts and they will be vigorously investigated and prosecuted."
"Certified wastewater operators are entrusted with the public health and must be held fully accountable to fulfill their duties, including honest and accurate reporting," said IDEM Commissioner Thomas Easterly. "IDEM inspectors work hard to identify and correct problems, and coordinate with our state and federal partners to ensure the protection of Hoosiers and our environment. We thank the staff of the U.S. Attorney’s Office, the U.S. Department of Justice, and the U.S. EPA’s criminal enforcement division in Chicago for their help in this case."
As a result of the felony conviction, Corn could be sentenced up to two years in prison and fined up to $250,000 for each count.
The criminal charges arose from a criminal investigation jointly undertaken by the Criminal Investigation Division of the EPA and the IDEM Office of Criminal Investigation, which are part of the Northern District of Indiana Environmental Crimes Task Force. Members of the task force include:
- U.S. Attorney’s Office for the Northern District of Indiana
- Environmental Crimes Section of the Department of Justice
- EPA – Criminal Investigation Division
- Department of Homeland Security - U.S. Coast Guard Investigative Service
- Federal Bureau of Investigation
- U.S. Fish and Wildlife Service
- U.S. Department of Transportation – Office of Inspector General
- U.S. Department of Labor – Office of Inspector General
- Indiana Department of Environmental Management – Office of Criminal Investigations
- Indiana Department of Natural Resources – Law Enforcement Division
- Indiana Attorney General’s Office
- Indiana State Police
The Task Force encourages citizens in the Northern District of Indiana to report environmental crimes to 312-886-9872 or at the Web site http://www.epa.gov/compliance/complaints/index.html.
The case is being prosecuted by Assistant U.S. Attorney Toi Denise Houston, Special Assistant U.S. Attorney David P. Mucha and Environmental Crimes Section Trial Attorney Gary N. Donner.
Miami Physician Sentenced to 97 Months in Prison for Role <br /> in $10 Million Medicare Fraud SchemeRead the Press Release
Miami physician Roberto Rodriguez, 54, was sentenced today to 97 months in prison for his role in a Medicare fraud scheme involving HIV infusion services. Rodriguez was also ordered to pay more than $9 million in restitution to the Medicare program during today’s sentencing hearing before U.S. District Judge Paul C. Huck.
Rodriguez pleaded guilty before Judge Huck on March 23, 2009, to conspiracy to commit healthcare fraud. In his guilty plea, Rodriguez admitted that he was a co-owner of and practicing physician at Midway Medical Center Inc. (Midway), a Miami clinic that purported to specialize in the treatment of HIV patients. Rodriguez admitted that, while at Midway, he and his co-conspirators routinely billed the Medicare program for services that were medically unnecessary and in many instances were never provided. Rodriguez further admitted that he purchased only a small fraction of the drugs that were purportedly administered to patients at the clinic.
Most of the services allegedly provided to patients at Midway were billed to the Medicare program as treatments for thrombocytopenia, a disorder involving a low count of platelets in the blood. According to the plea documents, none of Midway’s patients actually had low blood platelet counts. Rodriguez admitted that to make it appear that the patients actually had low platelet levels, he and his co-conspirators used chemists to manipulate the blood samples drawn from Midway’s patients before the blood was sent to a laboratory for analysis. In his plea, Rodriguez admitted to ordering that patients at Midway receive medications designed to treat thrombocytopenia despite knowing that the laboratory results had been falsified and that the patients did not actually have that condition.
Midway was not the only clinic where Rodriguez purported to treat HIV patients with injection and infusion therapies. In his plea, Rodriguez admitted that he was listed as medical director and practicing physician for five other Miami-area HIV infusion clinics between October 2003 and February 2005, where he engaged in similar criminal activity. Specifically, Rodriguez admitted that he and his co-conspirators at these other clinics billed the Medicare program for HIV injection and infusion services that Rodriguez knew were medically unnecessary and in some instances were never provided. Rodriguez admitted to causing more than $20 million in false claims to be submitted to the Medicare program at all of his clinics, including Midway.
A number of Rodriguez’s co-defendants have already been sentenced for their roles at Midway and related clinics. On June 5, 2009, in a sentencing hearing before Judge Huck, chemist Alexis Dagnesses, 44, was sentenced to 90 months in prison; medical assistant Gonzalo Nodarse, 38, was sentenced to 78 months in prison; medical assistant Alexis Carrazana, 41, was sentenced to 72 months in prison; and physician Carlos Garrido, 69, was sentenced to 37 months in prison. Rodriguez’s co-defendant Carmen del Cueto, a physician, is scheduled to be sentenced on Sept. 11, 2009.
The case was prosecuted by Trial Attorney John K. Neal of the Criminal Division’s Fraud Section and investigated by the HHS Office of the Inspector General and the FBI. The case was brought as part of the Medicare Fraud Strike Force, supervised by Deputy Chief Kirk Ogrosky of the Criminal Division’s Fraud Section and Acting U.S. Attorney Sloman of the Southern District of Florida. Federal prosecutors have indicted 115 cases with 257 defendants in Miami, Los Angeles and Detroit since the inception of strike force operations in March 2007. Collectively, these defendants are alleged to have fraudulently billed the Medicare program for more than $600 million.
The joint DOJ-HHS Medicare Fraud Strike Force is a multi-agency team of federal, state and local investigators designed to combat Medicare fraud through the use of Medicare data analysis techniques and an increased focus on community policing. In May 2009, the Department of Justice and HHS announced the Health Care Fraud Prevention & Enforcement Action Team (HEAT), a joint effort to prevent fraud and enforce current anti-fraud laws around the country. As part of the HEAT initiative, Medicare Fraud Strike Force operations were expanded from South Florida and Los Angeles to Detroit and Houston. To learn more about the HEAT initiative, go to:
www.hhs.gov/stopmedicarefraud .Justice Department Files Lawsuit Against Stonescape Pavers LLC to Enforce Employment Rights of U.S. Air Force ReservistRead the Press Release
The Department today filed a lawsuit in U.S. District Court in Las Vegas against Stonescape Pavers LLC alleging that the company willfully violated the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA) by firing Matthew T. Denning without cause when he returned from active duty.
Enacted by Congress in 1994, USERRA prohibits employers from discriminating or retaliating against employees or applicants for employment because of their past, current or future military obligations. Subject to certain conditions, USERRA requires that employers promptly reemploy returning service members and prohibits employers from terminating service members except for cause for 180 days after their reemployment.
Denning, a former Utah Army National Guardsman and current Air Force Reservist, was a salesman for Stonescape when he was called to active duty to deploy to Iraq with the Utah Army National Guard in January 2006. After he was honorably discharged in June 2006, Denning was reemployed by Stonescape. The Justice Department’s complaint alleges that Stonescape terminated Denning without cause in August 2006 during his statutorily protected reemployment time period.
"In enacting USERRA, Congress recognized that it is important to protect the employment rights of the men and women who serve our country in uniform by protecting them from discharge without cause," said Loretta King, Acting Assistant Attorney General for the Civil Rights Division. "The Civil Rights Division is committed to vigorously enforcing federal laws that protect the employment rights of men and women who are serving in our nation’s military."
The Labor Department’s Veterans’ Employment and Training Service investigated and attempted to resolve Denning’s USERRA complaint before referring it to the Justice Department for litigation.
The Justice Department’s Civil Rights Division has given a high priority to the enforcement of service members’ rights under USERRA. This is the 17th USERRA suit the Justice Department has filed this year on behalf of service members. Additional information about USERRA can be found on the Justice Department’s Web sites at http://www.usdoj.gov/crt/emp and http://www.servicemembers.gov, as well as on the Labor Department’s website at http://www.dol.gov/vets/programs/userra/main.htm.
Former Social Worker Sentenced for Role in Scheme to Defraud Department of Veterans Affairs <br /> and Obstructing JusticeRead the Press Release
A former Department of Veterans Affairs (VA) social work associate was sentenced to three years in prison for her role in a scheme to defraud the United States of her honest services in connection with her work finding suitable housing and daily care for mentally ill and disabled military veterans and then obstructing the VA’s investigation into the fraudulent scheme. U.S. District Judge Richard W. Story also ordered Bridgette L. Davidson, 39, to pay a $5,000 fine and to serve three years of supervised release following her release from prison.
On March 12, 2009, following a three-day jury trial, Davidson was found guilty of four counts of honest services mail fraud, one count of criminal conflict of interest, and one count of making a false statement to VA officials investigating the fraudulent scheme. Davidson and her ex-boyfriend, Darrick O. Frazier, 35, both of Atlanta, were charged in the six-count indictment on Nov. 14, 2006. On Sept. 2, 2008, Frazier pleaded guilty to one count of honest services mail fraud and entered into a plea agreement with the government. On Nov. 18, 2008, he was sentenced to 12 months and one day in prison and ordered to pay $20,200 in restitution.
According to court documents, from September 2000 through September 2002, Davidson was employed as a social work associate with the Atlanta VA Medical Center. Among her duties, Davidson was entrusted with finding suitable housing and living arrangements for mentally ill and disabled military veterans. According to evidence presented at trial, rather than place the veterans entrusted to her care in independently-owned and licensed assisted living facilities, from November 2001 through mid-April 2002, Davidson, assisted by Frazier, secretly rented a home in Marietta, Ga., a city located several miles northwest of Atlanta, to house the mentally ill and disabled military veterans in exchange for monthly federal subsidy payments. During this time, trial evidence showed that Davidson falsely represented to VA officials and to the military veterans’ legal guardians and custodians that the facility was an independently-owned personal care home suitable to house and care for the veterans. Evidence at trial showed that Davidson and Frazier used the rental income obtained from the veterans housed at the facility to pay some of the rent, utilities and related expenses on the rental property, and then kept the excess revenue for their own personal benefit.
Evidence at trial revealed that on April 15, 2002, a veteran died in the home and the facility was immediately shut down. The VA launched an internal investigation into Davidson’s connection to the facility. When interviewed under oath by VA officials, trial testimony proved that Davidson falsely denied that she had any ownership or financial interest in the personal care home she and Frazier secretly owned and operated.
The case is being prosecuted by Trial Attorney Armando O. Bonilla of the Criminal Division’s Public Integrity Section, headed by Section Chief William M. Welch II, and Assistant U.S. Attorney Teresa D. Hoyt of the Northern District of Georgia. The case is being investigated by the VA Office of Inspector General.
Former Executive of Philadelphia Company Pleads Guilty to<br /> Paying Bribes to Vietnamese OfficialsRead the Press Release
A former executive of Philadelphia-based Nexus Technologies Inc. pleaded guilty today in connection with his participation in a conspiracy to bribe Vietnamese government officials in exchange for lucrative contracts to supply equipment and technology to Vietnamese government agencies, in violation of the Foreign Corrupt Practices Act (FCPA).
Joseph T. Lukas, 60, a resident of New Jersey, was a partner in Nexus Technologies Inc. until 2005. According to court documents, Nexus Technologies Inc. was a privately owned export company that identified U.S. vendors for contracts opened for bid by the Vietnamese government to purchase a wide variety of equipment and technology, including underwater mapping equipment, bomb containment equipment, helicopter parts, chemical detectors, satellite communication parts and air tracking systems. Lukas was responsible for overseeing the negotiation of contracts with suppliers in the United States.
In connection with his guilty plea, Lukas admitted that from 1999 to 2005, he and other employees of Nexus Technologies Inc. agreed to pay, and knowingly paid, bribes to Vietnamese government officials in exchange for contracts with the agencies for which the officials worked. The bribes were falsely described as "commissions" in the company’s records.
Lucas was arrested on Sept. 5, 2008, after being indicted by a federal grand jury in Philadelphia on one count of conspiracy to bribe Vietnamese public officials in violation of the FCPA and one substantive count of violating the FCPA. Lukas was indicted on Sept. 4, 2008, along with the company and alleged co-conspirators Nam Nguyen, Kim Nguyen and An Nguyen. Cases are still pending against the remaining defendants and the company.
At sentencing, scheduled for April 6, 2010, Lukas faces a maximum sentence of 10 years in prison.
The case is being prosecuted by Assistant U.S. Attorney Jennifer Arbittier Williams for the Eastern District of Pennsylvania and Trial Attorney Kathleen M. Hamann of the Criminal Division’s Fraud Section. The case was investigated by the FBI and the U.S. Department of Commerce, Office of Export Enforcement.
Alleged Afghan Narcotics Trafficker Ordered Detained Pending Trial on U.S. Drug ChargesRead the Press Release
Haji Bagcho, aka Haji Bagh Chagul, an Afghan national, was ordered detained today by Magistrate Judge John M. Facciola in U.S. District Court for the District of Columbia while he awaits trial on U.S. narcotics charges.
Bagcho was charged in a two-count indictment unsealed June 24, 2009, with one count of conspiracy to distribute one kilogram or more of heroin knowing and intending that it would be imported into the United States and one count of distribution of one kilogram or more of heroin knowing and intending that it be imported into the United States. Conviction on either of these charges carries a mandatory minimum sentence of 10 years in prison and a maximum of life in prison. The indictment also contains a forfeiture allegation that would require Bagcho, if convicted, to forfeit the proceeds of his criminal activity.
"People who commit crimes against the United States from outside our borders are not immune from justice, as this indictment proves," said Assistant Attorney General Lanny A. Breuer.
"The indictment of Haji Bagcho demonstrates our commitment to bring dangerous drug traffickers to justice," said DEA Acting Administrator Michele M. Leonhart. "This alleged drug lord sought to import heroin into our country. We will stop these narco-traffickers and stem their flow of illicit drugs."
In September 2006, the DEA and the Criminal Division’s Narcotic and Dangerous Drug Section (NDDS) began investigating Bagcho’s alleged heroin trafficking activities in the area along the Afghan/Pakistan border. Bagcho arrived in the United States from Afghanistan on June 23, 2009.
The case is being prosecuted by trial attorneys from NDDS. The investigation in this case was led by the Special Operations Division and DEA’s Kabul Country Office. Significant assistance in this matter was provided by attorneys in the Criminal Division’s Senior Federal Prosecutors Program in Kabul and the Criminal Division’s Office of International Affairs. The Government of Afghanistan, through the Attorney General’s Office, the Ministry of Foreign Affairs, the Ministry of the Interior and the Afghan Counter Narcotics Justice Task Force played significant roles in the this matter.
An indictment is a formal charging document notifying the defendant of his charges. All persons charged by an indictment are presumed innocent until proven guilty.
Justice Department Files Complaint and Reaches Settlement to Improve Conditions at Texas State Facilities for Persons with Developmental DisabilitiesRead the Press Release
WASHINGTON – The Justice Department announced today a simultaneous lawsuit and settlement with the state of Texas concerning the care given to residents of the state’s 13 facilities for persons with developmental disabilities. Along with the settlement agreement, the Department will file a complaint initiating a lawsuit against the state in federal court. An independent monitor will be appointed to oversee the state’s compliance with the settlement agreement and the court will retain ultimate jurisdiction.
The facilities are state-owned and operated residential facilities that serve nearly 5,000 persons with developmental disabilities. The agreement, which will be subject to the approval of the U.S. District Court in Austin, Texas, addresses concerns about conditions and practices at the facilities, which led the Department to investigate potential violations of the Civil Rights of Institutionalized Persons Act (CRIPA).
"The Justice Department is committed to protecting the fundamental rights of all our citizens. This agreement reflects that principle by protecting the civil rights of some of Texas’s most vulnerable residents," said Attorney General Eric Holder.
The state of Texas fully cooperated with the Justice Department’s investigation. Under the terms of the settlement agreement, the state will work to ensure that facility residents are safe and that they receive the care and services necessary to meet their individualized needs. Specifically, the state has agreed to undertake a variety of measures, including: providing a safe and humane environment with zero tolerance for abuse or neglect of residents; providing adequate medical care, nursing services, and nutritional and physical support, including therapy and communication support; providing adequate psychological and behavioral services and psychiatric care; providing adequate habilitation; providing adequate integrated protections, services, treatments, and supports; and, ensuring that residents are free from undue bodily restraint. The state will also ensure that each resident is served in a setting that is as well integrated into the community as possible, as required by the Americans with Disabilities Act and the U.S. Supreme Court’s decision in Olmstead v. L.C., 527 U.S. 581 (1999).
Under the terms of the agreement, Texas will fund and work with an independent monitor, who will oversee the state’s compliance with the agreement. The agreement contemplates that the state will reach compliance within five years, but it will continue until compliance is achieved.
"We commend the state for working with the Department to ensure that persons living in these institutions receive the protection, care, and services that they need and deserve, and that they have expanded opportunities to live their lives in more community-integrated settings, consistent with federal law," said Loretta King, Acting Assistant Attorney General for Civil Rights.
The remedial agreement represents a negotiated resolution of the Justice Department’s investigation that would not have been possible without the cooperation and commitment of the Governor of Texas, Rick Perry, the Texas Department of Aging and Disability Services, the Texas Attorney General’s Office and the Texas Legislature.
The agreement comes near the tenth anniversary of the Olmstead decision, which held that unjustified institutional isolation of individuals with disabilities is a form of unlawful discrimination under the Americans With Disabilities Act. As part of the commemoration of this anniversary, President Obama launched the "Year of Community Living," a new effort aimed at providing opportunities for community living, and for full inclusion in the life of our nation, to individuals with disabilities. The Justice Department also is strengthening its partnership with the U.S. Department of Health and Human Services to ensure vigorous enforcement of the laws that protect the civil rights of individuals with disabilities.
CRIPA authorizes the Attorney General to investigate conditions in certain institutions owned or operated by, or on behalf of, state or local governments. These institutions include nursing homes, residential facilities serving persons with developmental disabilities, mental health facilities, jails, prisons, and juvenile correction facilities. CRIPA’s focus is on systemic deficiencies rather than individual, isolated problems.
More information about the Civil Rights Division of the Justice Department, and the laws it enforces, is available at http://www.usdoj.gov/crt.
GSA Contractor University Loft Company to Pay U.S. $400,000 to Resolve Contract Fraud AllegationsRead the Press Release
WASHINGTON – Following an investigation of alleged false claims and contract fraud, J Squared Inc., d/b/a University Loft Company, has reached a settlement with the United States, the Justice Department announced today. Indiana-based University Loft Company has agreed to pay the United States $400,000.
The settlement resolves allegations that the company knowingly sold Malaysian-made furniture to government purchasers in violation of the Trade Agreements Act (TAA). To further government trade policy, the Trade Agreements Act sets requirements for the country of origin of products sold to the United States. University Loft Company was required to comply with the TAA under contracts with the General Services Administration that allowed it to sell to the military and other government purchasers. University Loft Company competitor Furniture by Thurston Inc., and Lee Thurston filed this lawsuit on behalf of the U.S. government and will receive a $66,000 share of the recovery. Under the False Claims Act, private citizens can bring suit on behalf of the United States and share in any recovery obtained by the government.
"This settlement shows that companies that do business with the government will be held to the terms of their government contracts," said Tony West, Assistant Attorney General for the Department of Justice’s Civil Division.
This settlement was the result of a coordinated effort to investigate and resolve the allegations by the U.S. Department of Justice, Civil Division, Commercial Litigation Branch; the U.S. Attorney’s Office for the District of Columbia; the General Services Administration, Office of Inspector General; the Air Force Office of Special Investigations; the Defense Criminal Investigative Service; the Naval Criminal Investigative Service; and the Department of the Navy, Acquisition Integrity Office.
This case was investigated as part of the National Procurement Fraud Initiative. In October 2006, the Deputy Attorney General announced the formation of a National Procurement Fraud Task Force designed to promote the early detection, identification, prevention and prosecution of procurement fraud associated with the increase in government contracting activity for national security and other government programs. The Procurement Fraud Task Force is chaired by the Assistant Attorney General for the Criminal Division and includes the Civil Division, the U.S. Attorneys’ Offices, the FBI, the U.S. Inspectors General community and a number of other federal law enforcement agencies. This case, as well as others brought by members of the task force, demonstrates the Justice Department’s commitment to helping ensure the integrity of the government procurement process.
Eight Miami-Area Residents Charged in $22 Million Medicare Fraud Scheme Involving Home Health Care AgenciesRead the Press Release
WASHINGTON – Eight Miami-Dade County, Fla., residents have been indicted in connection with an alleged $22 million Medicare fraud scheme operated out of Miami businesses purporting to specialize in home health care services, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division, Acting U.S. Attorney Jeffrey H. Sloman of the Southern District of Florida, and Daniel R. Levinson, Inspector General of the Department of Health & Human Services (HHS). A temporary restraining order freezing assets of the indicted defendants and their companies was also filed.
Gladys Zambrana, Javier Zambrana, Enrique Perez, Alejandro Hernandez Quiros aka Alex Hernandez, Vanessa Estrada, Vicenta Tellechea, Modesto Hidalgo and Carlos Castaneda were charged in an indictment unsealed today in Miami with conspiracy to commit health care fraud. Gladys Zambrana was also charged with four counts of health care fraud. Gladys Zambrana and Hernandez Quiros were charged with three counts each of paying health care kickbacks, while Perez, Hidalgo and Tellechea were charged with one count each of paying health care kickbacks. Gladys Zambrana, Perez, Alejandro Quiros, Tellechea and Castaneda were also charged with conspiracy to launder health care fraud proceeds.
According to the indictment, Gladys Zambrana, Perez and Hernandez Quiros operated ABC Home Health Care Inc. (ABC), listing Javier Zambrana as the owner; and Gladys Zambrana and Castaneda operated Florida Home Health Care Providers Inc. (Florida Home Health), listing Tellechea as the owner. Both ABC and Florida Home Health purported to be home health agencies that catered to Medicare beneficiaries. The indictment alleges that at both agencies, beneficiaries were recruited and paid kickbacks and bribes to arrange for their Medicare beneficiary numbers to be used by their co-conspirators to file claims with Medicare for purported home health care services. The indictment alleges that the services were not provided and were not medically necessary.
The indictment alleges that in addition to exerting ownership and control of the home health agencies, Hernandez Quiros and Castaneda acted as Medicare beneficiary recruiters for ABC and Florida Home Health, respectively; and Hidalgo, a medical assistant, falsified medical tests and records to make it appear that the services were needed. The indictment alleges that ABC billed more than $17 million to the Medicare program for services provided from January 2006 through December 2008 that were medically unnecessary and were not actually provided. During that time frame, Medicare paid more than $11 million on those fraudulent claims submitted by ABC. The indictment also alleges that from October 2007 through March 2009, Florida Home Health billed more than $5 million to the Medicare program for services that were medically unnecessary and not actually provided. During that time frame, Medicare paid more than $4 million on those fraudulent claims submitted by Florida Home Health.
The charge of conspiracy to commit health care fraud carries a maximum prison sentence of 10 years. Each charged count of health care fraud carries a maximum prison sentence of 10 years and each count of paying health care kickbacks carries a maximum prison sentence of five years. Conspiracy to launder health care fraud proceeds carries a maximum prison sentence of 10 years per count.
An indictment is merely a charge and defendants are presumed innocent until proven guilty.
In conjunction with the criminal case, on June 24, 2009, the U.S. Attorney’s Office filed a civil complaint for injunctive relief under the fraud injunction statute and obtained a temporary restraining order freezing the assets of ABC, Florida Home Health, Gladys Zambrana, Javier Zambrana, Perez, Hernandez Quiros, Castaneda and Tellechea. In addition, that temporary restraining order also freezes certain financial assets of four other companies the defendants owned or controlled and allegedly used to launder money fraudulently obtained from Medicare. The temporary restraining order is intended to preserve the remaining proceeds of the fraud for recovery by the United States as part of the criminal case and any related civil proceedings.
"This indictment is a powerful example of the ongoing impact of the Medicare Fraud Strike Force," said Assistant Attorney General Lanny A. Breuer. "Through real-time data analysis, the Strike Force is at the forefront of stopping health care fraudsters in their tracks."
"Health care fraud schemes in South Florida range from simple billing schemes and fly-by-night durable medical equipment providers, to more sophisticated frauds, including infusion fraud, fraud on the Medicare Advantage Program, and now fraud in the delivery of home health services," said Acting U.S. Attorney Jeffrey H. Sloman. "Today’s coordinated criminal and civil action delivers an effective one-two punch to health care fraudsters: they were not only caught and criminally charged, but they are also being stripped of their illegal proceeds."
"Today’s arrests demonstrate our vigilance in combating home health fraud by bringing to bear enforcement resources from across government," said Daniel R. Levinson, Inspector General of the Department of Health & Human Services. "These kickback schemes involving conspiracies between suppliers and beneficiaries divert millions of dollars away from the Medicare beneficiaries who truly need these critical services."
The criminal case is being prosecuted by Trial Attorney N. Nathan Dimock and Deputy Chief Kirk Ogrosky of the Criminal Division’s Fraud Section. The civil case is being handled by Assistant U.S. Attorney Ted L. Radway of the U.S. Attorney’s Office for the Southern District of Florida. The case was investigated by the FBI and the HHS Office of Inspector General.
The case was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and Acting U.S. Attorney Sloman of the Southern District of Florida. Since strike force operations began in March 2007, 115 cases including 257 defendants have been indicted. Collectively, these defendants are alleged to have fraudulently billed the Medicare program for more than $600 million.
The joint DOJ-HHS Medicare Fraud Strike Force is a multi-agency team of federal, state and local investigators designed to combat Medicare fraud through the use of Medicare data analysis techniques and an increased focus on community policing. In May 2009, the Department of Justice and HHS announced the Health Care Fraud Prevention & Enforcement Action Team (HEAT), a joint effort to prevent fraud and enforce current anti-fraud laws around the country. As part of the HEAT initiative, Medicare Fraud Strike Force operations were expanded from South Florida and Los Angeles to Detroit and Houston. To learn more about the HEAT initiative, go to: www.hhs.gov/stopmedicarefraud .
Indictment
Dallas Independent School District Agrees to Settle False Claims Allegations Involving E-Rate ProgramRead the Press Release
WASHINGTON - The Dallas Independent School District (DISD) has agreed to settle claims that the school district violated the False Claims Act in connection with the Federal Communications Commission’s E-Rate program, the Department of Justice and the U.S. Attorney’s Office for the Northern District of Texas announced today. Under the terms of the settlement, the DISD will relinquish more than $150 million in requests for federal funds, and will pay a total of $750,000.
The E-Rate program, created by Congress in the Telecommunications Act of 1996, and overseen by the FCC, provides funding for needy schools and libraries to connect to and use the Internet. Under, the E-Rate program – which is funded by monies collected from telephone users – schools apply for funds to pay for hardware and monthly connectivity service fees.
The United States alleged that the DISD provided false information to the E-Rate program by engaging in non-competitive bidding practices for E-Rate contracts. The United States also contended that school district officials improperly received gratuities from technology vendors, including trips, meals, golfing and the free use of a yacht. The school district’s former chief technology officer, Ruben Bohuchot, was convicted in July 2008 on bribery charges stemming from the receipt of federal funds under the E-Rate program.
"The E-Rate Program provides critical support to the poorest schools in the nation, providing them with Internet access and wiring," said Tony West, Assistant Attorney General for the Justice Department’s Civil Division. "Working with our partners at the FCC Office of the Inspector General, the Department of Justice is committed to ensuring that this important program, which benefits our neediest children, not be misused."
The resolution announced today resulted from an ongoing federal investigation of fraud and anti-competitive conduct in the E-Rate program in Texas. The investigation is being conducted jointly by the Civil Division, the U.S. Attorney’s Office for the Northern District of Texas and the FCC Office of the Inspector General.
UBS Client Pleads Guilty to Filing False Tax ReturnRead the Press Release
WASHINGTON - UBS client, Steven Michael Rubinstein of Boca Raton, Fla., pleaded guilty today to filing a false tax return for tax year 2004, the Justice Department and Internal Revenue Service (IRS) announced. On April 1, 2009, Rubinstein was charged with filing a false tax return that intentionally failed to disclose the existence of a Swiss bank account maintained by UBS of which he was the beneficial owner and failed to report any income earned on that account.
According to court documents and statements made during the court hearing, Rubinstein maintained a UBS bank account in the name of Hybridge International Ltd., a nominee British Virgin Island corporation. From 2001 through 2008, Rubinstein communicated with bankers at UBS via email, telephone and in person about the purchase and sale of securities worth more than 4.5 million Swiss Francs, the conversion of investments from U.S. dollars to British Pounds, the deposit and transfer of funds into and out of the UBS Swiss accounts, and the repatriation of approximately $7 million into the United States to purchase property and build his personal residence in Boca Raton. Additionally, Rubinstein deposited and sold more than $2 million in South African Krugerrands through his UBS accounts.
According to court records, on or about April 15, 2005, Rubinstein, a chartered accountant who works for an international company that assists clients to build, buy and sell yachts, filed a tax return for 2004 which he signed under the penalties of perjury. The tax return failed to report that he had an interest in, or signature authority over, a financial account at UBS in Switzerland. Additionally, Rubinstein failed to report the income he earned on any UBS Swiss bank accounts.
Additionally, Rubinstein acknowledged that he was required to file Reports of Foreign Bank and Financial Accounts (FBARs) disclosing his UBS bank account for years 2001 through 2007. FBARs must be filed with the U.S. Treasury on or before June 30 of the succeeding year. However, he admitted that he intentionally failed to file FBARs each year. As part of his plea agreement, Rubinstein agreed to pay a fifty percent penalty for the year with the highest balance in the account as of June 30 in order to resolve his civil liability for failing to file FBARs for tax years 2001 through 2007.
"As the FBAR filing deadline of June 30 rapidly approaches, taxpayers should be aware of the serious consequences of failing to report offshore income and foreign bank accounts," said Acting Assistant Attorney General John A. DiCicco. "Taxpayers who hide income offshore and
fail to comply with the FBAR filing deadline face criminal prosecution, jail time, and steep fines."
"Today’s guilty plea resolves the first prosecution of a UBS client based upon records received from UBS pursuant to the historic deferred prosecution agreement executed earlier this year. In accordance with this agreement, UBS has disclosed the identities of wealthy Americans who were illegally hiding money to evade U.S. taxes," said Acting U.S. Attorney Jeffrey H. Sloman. "More prosecutions are expected to follow, as we continue to hold accountable those who conceal money and assets in an effort to avoid their income tax obligations."
"Combating offshore tax evasion by wealthy taxpayers continues to be one of the IRS’ top priorities," said IRS Commissioner Doug Shulman. "The IRS is committed to vigorously pursuing those who illegally hide their money offshore as well as the financial institutions which help them."
Sentencing has been set for Sept. 30, 2009, before U.S. Judge Marcia G. Cooke. Rubinstein faces a maximum sentence of three years in prison and a maximum fine of $250,000 or twice the amount of pecuniary gain to the defendant or loss to the IRS. Rubinstein remains free on a $12 million bail pending sentencing.
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.
In Feburary 2009, UBS entered into a deferred prosecution agreement in which the bank admitted to helping U.S. taxpayers hide accounts from the IRS. As part of their agreement, UBS agreed to provide the U.S. government with the identities of, and account information for, certain United States customers of UBS’s cross-border business.
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, U.S. citizens much file a FBAR, 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/.
Owner of New Jersey Landscaping Sub-Contractor Pleads Guilty to Defrauding the Environmental Protection AgencyRead the Press Release
WASHINGTON – The co-owner of a Martinsville, N.J., landscaping company pleaded guilty to participating in a fraud conspiracy at the Environmental Protection Agency (EPA)-designated Superfund site, Federal Creosote, located in Manville, N.J., the Department of Justice announced today.
Frederick Landgraber pleaded guilty in the U.S. District Court of New Jersey today to one count of conspiracy to defraud the EPA from approximately March 2002 until approximately June 2005 at the Federal Creosote site. As part of the conspiracy, Landgraber provided more than $30,000 in kickbacks to an employee of the prime contractor at the site in exchange for which that employee steered landscaping sub-contracts to Landgraber’s company. Landgraber and his co-conspirator subverted the competitive bidding process by submitting intentionally high cover bids on behalf of fictitious companies. In total, Landgraber’s company received approximately $1.5 million in sub-contracts at Federal Creosote.
The clean-up at the Federal Creosote site is partly funded by the EPA. Under an interagency agreement between the EPA and the Army Corps of Engineers, prime contractors oversaw the removal, treatment and disposal of contaminated soil, as well as other operations at the Federal Creosote site.
"The fictitious bids were created specifically to evade bidding requirements that are in place to ensure competition and protect taxpayer dollars in the government procurement process," said Scott D. Hammond, Deputy Assistant Attorney General for Criminal Enforcement of the Department’s Antitrust Division. "The Antitrust Division will continue to apprehend and prosecute those who commit these crimes."
Today’s charge is the result of an ongoing antitrust investigation into bid rigging, bribery, fraud and tax-related offenses at New Jersey Superfund sites. In addition to Landgraber, five individuals and three companies have pleaded guilty in this investigation. Bennett Environmental Inc. (BEI) pleaded guilty to participating in a conspiracy to defraud the EPA at the Federal Creosote site and was sentenced on Dec. 15, 2008, to pay a $1 million fine and $1.66 million in restitution. On the same day, Zul Tejpar, a former BEI executive, pleaded guilty to participating in the same fraud conspiracy as BEI. Sentencing is scheduled for Sept. 28, 2009.
In addition, on July 23, 2008, JMJ Environmental Inc. (JMJ), a Laurel Springs, N.J., wastewater treatment supply company, its owner John Drimak, Jr., and Norman Stoerr, a former contracts administrator at the Federal Creosote site pleaded guilty to bid rigging, fraud and tax charges related to Federal Creosote and the Diamond Alkali Superfund site, located in Newark, N.J. Sentencing for JMJ, Drimak and Stoerr is scheduled for Dec. 7, 2009.
On March 4, 2009, National Industrial Services LLC and co-owner Victor Boski pleaded guilty to participating in a separate kickback and fraud conspiracy at Federal Creosote and Diamond Alkali.
Finally, Christopher Tranchina, an employee of a Sewell, N.J., company that provided temporary electrical utilities, pleaded guilty to participating in a separate kickback and fraud conspiracy at Federal Creosote. Tranchina is scheduled to be sentenced on July 13, 2009.
The fraud conspiracy that Landgraber is charged with carries a maximum penalty of five years in prison and a $250,000 fine. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.
Today’s charges reflect the Department’s commitment to protecting U.S. taxpayers from procurement fraud through its creation of the National Procurement Fraud Task Force. The National Procurement Fraud Initiative, announced in October 2006, is designed to promote the early detection, prosecution and prevention of procurement fraud associated with the increase in contracting activity for national security and other government programs.
The ongoing investigation is being conducted by the Antitrust Division’s New York Field Office, the EPA Office of Inspector General and the Internal Revenue Service Criminal Investigation. Anyone with information concerning bid rigging, kickbacks or fraud relating to sub-contracts awarded at the Federal Creosote or Diamond Alkali sites should contact the New York Field Office of the Antitrust Division at 212-264-9308.
Former Memphis, Tennessee, Police Officer<br /> Convicted of Civil Rights ViolationsRead the Press Release
Carlton Moore, formerly an officer with the Memphis Police Department, pleaded guilty on Thursday in federal court in Memphis, Tenn., to three counts of violating civil rights for stealing money from motorists while acting under color of law. Moore faces up to three years in prison.
Moore admitted that on March 1 and March 14, 2008, and again on May 4, 2009, he surreptitiously stole cash from three Latino drivers he pulled over while on duty as a Memphis police officer. During these stops, Moore ordered the victims out of their vehicles, patted them down and removed personal items from them during the search. He then stole money from the victims before returning their personal items and releasing them.
"Police officers who abuse their authority for personal gain will be vigorously prosecuted," said Loretta King, Acting Assistant Attorney General for the Civil Rights Division. "Our laws give every American a fundamental right not to be victimized by rogue police officers."
"Officer Moore dishonored his badge and his fellow officers when he chose to steal from innocent immigrants during traffic stops. Protecting the rights of every person from abuse committed by public officials is of the highest priority of this office," said Larry Laurenzi, U.S. Attorney for the Western District of Tennessee.
"Our citizens have a right to ethical treatment from all law enforcement officers and we, as civil servants, must never forget that we have sworn an oath to serve and protect them," said My Harrison, Special Agent in Charge of the FBI Memphis Field Office.
"We have a responsibility to our citizens, visitors and the outstanding members of the Memphis Police Department. We will not tolerate those who dishonor our badge by criminal activity. Mr. Moore admitted to robbing Hispanic members of our community while on-duty, in uniform and in a marked squad car," said Larry A. Godwin, Director of the Memphis Police Department. "After initiating this investigation, we worked in conjunction with the FBI to capture Moore as he committed the crime. We police our own and criminals wearing our badge will be aggressively pursued just as any other criminal in Memphis."
The Civil Rights Division is committed to the vigorous enforcement of every federal criminal civil rights statute, such as those laws that prohibit the willful use of excessive force or other acts of misconduct by law enforcement officials. The Division has compiled a significant record on criminal civil rights prosecutions.
This case was investigated by the FBI and the Memphis Police Department. Assistant U.S. Attorney Steve Parker from the U.S. Attorney’s Office in Memphis and Trial Attorney Jonathan Skrmetti from the Civil Rights Division are prosecuting the case.
Former Contracting Officer Pleads Guilty to Filing False Tax ReturnsRead the Press Release
WASHINGTON – Tijani Ahmed Saani, a former civilian employee of the U.S. Department of Defense, pleaded guilty today to filing false tax returns for tax years 2003 through 2007, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division and Assistant Attorney General Christine A. Varney of the Antitrust Division.
Saani, 53, a former resident of Kuwait City, Kuwait, worked as a contracting officer in Kuwait from 1994 until his arrest in May 2008. According to the indictment to which Saani pleaded guilty, he worked on detail from 2002 to 2007 at Camp Arifjan, Kuwait. Saani pleaded guilty today in U.S. District Court for the District of Columbia before Judge Richard J. Leon to a five-count indictment, admitting he filed false tax returns for tax years 2003 through 2007. He also admitted that during that period of time he maintained overseas bank accounts in the United States and the Jersey Channel Islands that he failed to properly report on his income tax returns.
The indictment, filed Sept. 19, 2008, charged that the tax returns Saani filed were false because he failed to disclose his interest in or authority over multiple foreign bank accounts, failed to report interest earned from those bank accounts, and failed to report other additional income on his tax returns for tax years 2003 through 2007.
Saani faces up to three years in prison and a fine of $100,000 for each of the five charged counts to which he pleaded guilty. His sentencing has been scheduled for Oct. 8, 2009.
This case is being prosecuted by Trial Attorneys Kathryn H. Albrecht, Richard B. Evans and Ann C. Brickley of the Criminal Division’s Public Integrity Section, which is headed by Chief William M. Welch II, as well as Trial Attorneys Mark W. Pletcher, Emily W. Allen and Ryan Danks of the Antitrust Division’s National Criminal Enforcement Section, which is headed by Chief Lisa Phelan. Assistance was also provided by the Criminal Division’s Office of International Affairs.
The case is being investigated by the Internal Revenue Service - Criminal Investigation, Army Criminal Investigation Division, Defense Criminal Investigative Service, U.S. Immigration and Customs Enforcement, FBI and the Special Inspector General for Iraqi Reconstruction.
Today’s guilty plea resulted from the Department’s ongoing investigation into procurement fraud in Iraq and Afghanistan. The Department's National Procurement Fraud Initiative, announced in October 2006, is designed to promote the early detection, identification, prevention and prosecution of procurement fraud associated with the increase in contracting activity for national security and other government programs.
Anyone with information concerning bid rigging, bribery or other criminal conduct regarding DOD contracts is urged to call the Defense Criminal Investigative Service at 800-424-9098 or [email protected]; Army Criminal Investigation Division at www.cid.army.mil; or the FBI at 800-225-5324.
Florida Man Indicted in Connection with Fraudulent Vending Machine Business Opportunity VentureRead the Press Release
WASHINGTON – A Tampa federal grand jury has charged a Florida man with criminal contempt of a federal court order in connection with the operation of a fraudulent vending machine business opportunity, the Justice Department announced today. The criminal charges form part of the government’s continued nationwide crackdown on business opportunity fraud.
The indictment returned by the grand jury alleges that Mark Miller, 40, of Maitland, Fla., fraudulently marketed and sold business opportunities nationwide under the names Site Selectors Inc., Five-Star Vending Inc., Markland Group Inc. and Break Time Vending. Miller and his representatives allegedly told customers that, for purchase prices of $2,500 or more, they would receive snack and drink vending machines and be able to place them in profitable locations through the use of Miller’s locating services.
Miller was subject to a 2003 federal court order that, among other things, banned him from the sale of business ventures, forbid misrepresentations in the sale of such ventures (should he decide to violate the ban), and required that he monitor his salespeople to ensure they made no misrepresentations. According to the indictment, Miller violated this order by selling vending machine business ventures out of Seminole and Orange Counties in Florida from at least April 2005 through at least April 2007, making various misrepresentations when he sold the ventures, and using an alias to do so. Miller’s violations allegedly cost consumers more than $450,000.
The indictment further alleges that Miller’s customers complained to him and his representatives about not receiving purchased vending machines or locating services. Miller allegedly refused to give refunds and instead told, and instructed employees to tell, complaining customers false stories about the reasons for his not providing the promised business ventures.
"This case stems from an injunction we obtained after the Federal Trade Commission referred a civil case to us involving Mark Miller and a business opportunity he sold called Century Placements that also involved vending machines. The 2003 order in the civil case gave Miller a chance to obey the law, but instead he continued with the same type of illegal scheme," said Tony West, Assistant Attorney General for the Justice Department’s Civil Division. "When people disobey court orders and cause consumers to lose money, we will not hesitate to seek justice by filing criminal contempt charges. In fact, we have charged over 100 individuals with business opportunity-related felonies in the past five years."
Miller is charged with seven felony counts of criminal contempt. If convicted, Miller faces imprisonment and a possible fine. An indictment is merely an allegation, and every defendant is presumed innocent until proven guilty beyond a reasonable doubt.
Assistant Attorney General West commended the efforts of the U.S. Postal Inspection Service, which investigated the criminal case. The case is being prosecuted by trial attorney Mark Josephs of the Civil Division’s Office of Consumer Litigation.
Medicare Fraud Strike Force Operations Lead to Charges Against 53 Doctors, Health Care Executives and Beneficiaries for More Than $50 Million in Alleged False Billing in DetroitRead the Press Release
WASHINGTON – Fifty-three people have been indicted for schemes to submit more than $50 million in false Medicare claims in the continuing operation of the Medicare Fraud Strike Force in Detroit, Attorney General Eric Holder, Department of Health and Human Services (HHS) Secretary Kathleen Sebelius and FBI Director Robert Mueller announced today. The Strike Force in Detroit is the third phase of a targeted criminal, civil and administrative effort against individuals and health care companies that fraudulently bill the Medicare program.
While the indictments were returned by a grand jury in Detroit, individuals were arrested today in Detroit, Miami and Denver as a result of phase three operations of the Strike Force. The joint DOJ-HHS Medicare Fraud Strike Force is a multi-agency team of federal, state and local investigators designed to combat Medicare fraud through the use of Medicare data analysis techniques and an increased focus on community policing.
"As demonstrated by today’s charges and arrests, we will strike back against those whose fraudulent schemes not only undermine a program upon which 45 million aged and disabled Americans depend, but which also contribute directly to rising health care costs that all Americans must bear," said Attorney General Holder. "The vast majority of doctors, patients, and medical companies do the right thing and work with the Medicare program to provide access to medical services. To those who work diligently and ethically to provide medical care through the Medicare program, we will work with you to root out the few who corrupt the system and taint the good reputations of health professionals everywhere."
"The Obama Administration is committed to turning up the heat on Medicare fraud and employing all the weapons in the federal government’s arsenal to target those who are defrauding the American taxpayer," said HHS Secretary Kathleen Sebelius. "Thanks to cooperation from across the government and some of the best law enforcement professionals in the country, today we were able to save millions of dollars from being lost to criminals and send a powerful message to those who seek to defraud the system, that we are coming after them. But our joint efforts on HEAT don’t just stop at the jailhouse door. Our Medicare program is working closely in partnership with our own and other law enforcement operations to prevent fraud from happening in the first place. Every dollar we can save by stopping fraud can be used to strengthen the long-term fiscal health of Medicare, bring down costs and deliver better service to Medicare beneficiaries."
The Strike Force operations in Detroit are part of the Health Care Fraud Prevention & Enforcement Action Team (HEAT), a renewed effort announced in May 2009 between the Department of Justice and HHS to focus their joint efforts to prevent fraud and enforce current anti-fraud laws around the country. The HEAT taskforce, co-chaired by Deputy Attorney General David Ogden and Deputy Secretary Bill Corr, is made up of top-level law enforcement agents, prosecutors and staff from both Departments and their operating divisions. In the May 2009 announcement, Attorney General Holder and Secretary Sebelius announced the expansion of the Strike Force into Detroit and Houston to build upon existing partnerships between the agencies in a heightened effort to reduce fraud and recover taxpayer dollars.
Today, federal agents from the FBI and the HHS Office of Inspector General (HHS-OIG) began executing arrest warrants in Detroit, Miami and Denver as part of a concentrated effort to address fraud in the metro-Detroit area. Charges were unsealed today against 53 individuals who are accused of various Medicare fraud offenses, including conspiracy to defraud the Medicare program, criminal false claims and violations of the anti-kickback statutes. The Strike Force operations in Detroit have identified two primary areas – infusion therapy and physical/occupational therapy providers – in which schemes were allegedly orchestrated to defraud the Medicare program.
According to the indictments, the defendants charged today participated in schemes to submit claims to Medicare for treatments that were in fact medically unnecessary and oftentimes, never provided. In many cases, indictments allege that beneficiaries accepted cash kickbacks in return for allowing providers to submit forms saying they had received the unnecessary and not provided treatments. Collectively, the physicians, medical assistants, patients, company owners and executives charged in the indictments are accused of conspiring to submit more than $50 million in false claims to the Medicare program.
"We will continue to work together in the months to come to identify and stop those who would line their own pockets with taxpayer money – those who seek to benefit at the expense of our health care system, our economy and our collective well-being," said FBI Director Mueller.
"Today’s landmark series of arrests in Detroit and across the country demonstrates that health care fraud can happen anywhere in America," said Daniel R. Levinson, Inspector General of the Department of Health & Human Services. "We will continue to detect and respond rapidly to emerging fraud schemes to protect our federal health care programs and conserve scarce health care dollars so critically needed for the care of our beneficiaries."
The work of the Detroit Strike Force is another important step in the multi-phase enforcement and regulatory HEAT initiative designed to reduce the potential for Medicare and Medicaid fraud. Since its inception in March 2007 with phase one in South Florida and expansion to phase two in Los Angeles in May 2008, the Strike Force has obtained indictments of more than 250 individuals and organizations that collectively have billed the Medicare program for more than $600 million. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.
Each of the three Detroit Strike Force teams is led by a federal prosecutor supervised by the Justice Department’s Criminal Division’s Fraud Section in Washington, D.C., and the U.S. Attorney’s Office for the Eastern District of Michigan. Each team has four to six agents, with at least one agent from the FBI and HHS-OIG.
The cases are being prosecuted by attorneys from the Fraud Section in the Justice Department’s Criminal Division, including Deputy Chief Kirk Ogrosky and Trial Attorneys John K. Neal and Benjamin D. Singer as well Special Assistant U.S. Attorney Thomas W. Beimers in the U.S. Attorney’s Office for the Eastern District of Michigan, on detail from HHS-OIG.
An indictment is merely an allegation, and defendants are presumed innocent until and unless proven guilty.
To learn more about the HEAT team, go to: www.hhs.gov/stopmedicarefraud
Fact Sheet - Medicare Fraud Strike Force
Fact Sheet - Medicare Fraud Strike Force - Detroit
Federal Court Enjoins Las Vegas Man Whose Tax-fraud Scheme<br /> Is Estimated to Have Cost Treasury $31 MillionRead the Press Release
A federal court has permanently enjoined Reinhold Sommerstedt, a Las Vegas-based promoter of a sham trust tax scam. According to papers filed in the case, Sommerstedt created phony domestic and foreign trusts to move customers’ assets from the United States to offshore banks located in the West Indies. Customers allegedly used phony loans and gifts to repatriate their money while concealing it from the Internal Revenue Service (IRS). Customers paid as much as $14,500 to participate in the scheme.
In granting the injunction, Judge Brian E. Sandoval of the U.S. District Court for the District of Nevada said that Sommerstedt failed to present "any evidence to refute the government's indication that Sommerstedt's trust scheme was organized and operated solely for the purpose of improperly reducing his customers' federal tax liabilities." The injunction bars Sommerstedt from promoting the trust scheme or any similar scheme. He must also give the government a list of his customers’ names, addresses, e-mail addresses, telephone numbers and Social Security numbers.
The court found that Sommerstedt’s actions were "not an isolated act of misconduct" and that the scheme "involved more than 180 customers." The government complaint in the case alleged that the scheme cost the U.S. Treasury more than $31 million in lost tax revenue. The court said that it was "not persuaded by Sommerstedt’s self-serving statement that an injunction is unnecessary because he will voluntarily refrain from future fraudulent conduct," noting that Sommerstedt has "never acknowledged the wrongfulness of his actions."
The other three defendants in the case previously consented to permanent injunctions. They are Daniel Young of Las Vegas, who allegedly created phony domestic and foreign trusts to move customers’ assets from the United States to offshore banks located in the West Indies;
Lynn Lakers of Boulder City, Nev., a tax-return preparer who allegedly prepared false tax returns for the phony trusts used in the scheme; and Stephen Nestor of Boise, Idaho, a former IRS revenue officer who allegedly signed false tax returns on behalf of customers’ bogus trusts.
Offshore transactions and trust misuse are two of the IRS’s Dirty Dozen tax scams for 2009.
John DiCicco, Acting Assistant Attorney General for the Justice Department’s Tax Division, thanked Robert Metcalfe, the Justice Department trial attorney who handled the case.
In this decade the Justice Department has obtained injunctions against more than 410 tax-fraud promoters and tax-return preparers. More information about these efforts can be found on the
Justice Department Web site.
Alabama Resident Pleads Guilty to Filing False Tax Returns<br /> in Connection with Embezzlement SchemeRead the Press Release
WASHINGTON - Sims Lawson Jr., a resident of Killen, Ala., pleaded guilty yesterday to filing false tax returns for years 2002 through 2004, the Justice Department and Internal Revenue Service (IRS) announced. Lawson appeared before Judge R. David Proctor in Birmingham, Ala., and admitted that he failed to pay federal income taxes of $369,038 and state income taxes of $50,938.
According to the criminal information and plea agreement, Lawson willfully omitted from his tax returns income that he had embezzled from an estate that he managed. Lawson was hired in 2002 to co-manage an estate, and his duties included managing the books and records of the estate, collecting on loans made by the estate and determining the estate’s value for tax purposes. In 2005, the estate received an ex parte court order removing Lawson from his responsibilities as trustee. It was later determined that Lawson had misappropriated at least $721,417 in 2002, 2003 and 2004, which he also failed to report on his personal tax returns. The estate also paid Lawson an additional $297,352, which he failed to report on his personal tax return.
According to the criminal information and plea agreement, throughout the time period he was employed with the estate, Lawson misappropriated money from the estate in several ways. For example, Lawson wrote checks from the estate payable to himself and used estate checks to pay his personal expenses. Lawson fraudulently used estate checks to pay for the installation of a swimming pool at his personal residence, renovations on his personal residence, and extravagant trips to locales including New York City, Las Vegas, the Sundance Film Festival, the Bahamas and Disney World. Lawson also purchased timeshares at the Atlantis resort in the Bahamas, as well as timeshares at the Disney World resort in Orlando, Fla., with the embezzled funds. Lawson also used funds from the estate to purchase jewelry and tickets to various events. All of these renovations and purchases constituted income to Lawson.
Judge Proctor has set sentencing for Oct. 6, 2009. Lawson faces a maximum sentence of nine years in prison and a maximum fine of $750,000 or twice the gross gain to the defendant or twice the gross loss to the IRS.
Acting Assistant Attorney General John A. DiCicco thanked Tax Division attorneys Jed Silversmith and Matthew Mueller, who prosecuted the case. He also thanked the IRS Criminal Investigation agents in the Birmingham office, who investigated the case.
More information about the Justice Department’s Tax Division and its enforcement efforts is available at http://www.usdoj.gov/tax.
United States Settles Claims Alleging Bid Rigging Conspiracy with Two German Moving CompaniesRead the Press Release
The United States has settled with two German moving companies relating to allegations of bid rigging in violation of the False Claims Act. ITO Möbel Transport GmbH has agreed to pay $150,000, and Birkart Globistics GmbH & Co. Logistik and Service KG will pay $222,146. The companies subcontracted with American freight forwarding firms to transport within Germany the household goods belonging to military and civilian Department of Defense (DOD) personnel.
The United States intervened in two lawsuits alleging that in November 2000, Gosselin Worldwide Moving N.V., a Belgian company, through its managing director Marc Smet, and four German moving companies, including ITO and Birkart, executed a written agreement to raise the rates that they charged to American freight forwarding companies for packing and unpacking services within Germany and for services performed at German ports. The agreement further provided that none of the companies would perform work for less than the agreed-upon rate.
The American freight forwarding companies then submitted bids to the DOD at specific elevated price levels according to the instructions of the conspirators and were subsequently awarded transportation contracts based on their non-competitive bids. As a result of the conspiracy, the DOD overpaid for transportation contracts beginning in 2001 and continuing at least through 2002. To date, the United States has recovered more than $14 million in connection with this bid-rigging conspiracy.
"These settlements reflect the United States’ determination to deter schemes that undermine the military’s efforts to acquire services at a competitive price," said Tony West, Assistant Attorney General of the Justice Department’s Civil Division.
The Gosselin conspiracy was brought to the United States’ attention by two lawsuits, one of which was filed in the U.S. District Court for the Eastern District of Virginia by two German citizens who worked with one of the German moving companies, and the other which was filed in the Eastern District of Missouri by the owner of an American freight forwarding company. The suits were filed under the qui tam or whistleblower provisions of the False Claims Act, which permit private citizens, known as "relators," to sue on behalf of the government to recover federal funds that were obtained by false or fraudulent claims.
In addition to monetary payments, the settling German companies have agreed to cooperate with the government as it pursues claims against the remaining defendants, which include Gosselin Worldwide Moving N.V., Marc Smet, Andreas Christ Spedition & Möbeltransport GmbH, and the Viktoria Schäfer entities.
Media Executive John Malone to Pay $1.4 Million Civil Penalty for Violating Antitrust Premerger Notification RequirementsRead the Press Release
WASHINGTON — Media executive John C. Malone will pay a $1.4 million civil penalty to settle charges that he violated premerger reporting and waiting requirements when he acquired Discovery Holding Co. voting securities, the Department of Justice announced today.
The Department’s Antitrust Division, at the request of the Federal Trade Commission, filed a civil antitrust lawsuit today in U.S. District Court in Washington, D.C., against Malone for violating the notification requirements of the Hart-Scott-Rodino (HSR) Act of 1976. At the same time, the Department filed a proposed settlement that, if approved by the court, will settle the charges.
Malone is Chairman of the Board of Liberty Media Corporation and Chief Executive Officer and Chairman of the Board of Discovery Holding Co., a leading provider of non-fiction television entertainment headquartered in Englewood, Colo.
According to the complaint, Malone failed to comply with the antitrust premerger notification requirements of the HSR Act before acquiring voting securities of Discovery in August 2005, and continued to acquire Discovery voting securities through April 2008. On June 12, 2008, Malone made a corrective filing for the acquisitions of Discovery voting securities. Before the expiration of the waiting period triggered by the June 12, 2008, filing, Malone made additional acquisitions of Discovery voting securities on June 14, 2008, when he exercised two options. Malone exercised these options using an escrow arrangement, but the escrow arrangement did not prevent beneficial ownership of the voting securities from passing to Malone in violation of the Act. The complaint alleges that Malone was in violation of the HSR Act from Aug. 9, 2005, through July 14, 2008.
The Hart-Scott-Rodino Act of 1976, an amendment to the Clayton Act, imposes notification and waiting period requirements on individuals and companies over a certain size before they consummate acquisitions resulting in holding stock or assets above a certain value, which was $53.1 million in August 2005, and with annual adjustments to reflect changes in gross national product is currently $65.2 million.
Federal courts can assess civil penalties for premerger notification violations under the HSR Act in lawsuits brought by the Department of Justice. For a party in violation of the HSR Act before Feb. 10, 2009, the maximum civil penalty is $11,000 a day for each day it is in violation of the Act. For a party in violation of the HSR Act on or after Feb. 10, 2009, the maximum penalty is $16,000 a day.
Justice Department Statement Regarding Recent Story Concerning Government’s Litigation Involving UbsRead the Press Release
WASHINGTON – “There is no basis for the report in The New York Times. While the Department is always willing to consider settlement in any case, the suggestion that the Department is planning to drop this suit is simply untrue. The Department is continuing with the case against UBS and will file its brief asking the court to enforce the summons on June 30.”
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Justice Department Intervenes in Americans with Disabilities Act Lawsuit<br /> Against Transportation ProviderRead the Press Release
WASHINGTON – The Justice Department today announced that it has moved to intervene in a lawsuit filed in federal court in Jackson, Miss., challenging inaccessibility in Jackson’s public transportation system. The pending lawsuit, filed by 11 residents of Jackson with disabilities and two non-profit organizations that work on behalf of people with disabilities, alleges violations of the Americans with Disabilities Act and the Rehabilitation Act of 1973 (ADA).
The Department’s complaint alleges that the city of Jackson has failed to maintain, promptly repair and keep in operative condition the wheelchair lifts of the city’s fixed route bus system, known as JATRAN; has failed to adequately train personnel to properly assist passengers with disabilities; has failed to provide the required level of service to passengers of Handilift, the ADA complementary paratransit service; and has otherwise denied individuals with disabilities benefits to which they are entitled under the law.
"Accessible public transportation is vital to people with disabilities so that they can fully participate in their community," said Loretta King, Acting Assistant Attorney General for the Civil Rights Division. "Failing to provide required accessibility discriminates against persons with disabilities. Eradicating such discrimination and ensuring the full accessibility that the law requires is one of the Civil Rights Division’s highest priorities."
The Department’s complaint details allegations of injury caused by inaccessible public transportation in Jackson. The factual allegations in the Department’s filing include frequent instances where individuals who use wheelchairs are forced to wait while multiple JATRAN buses with inoperable lifts pass them by, often leaving them stranded as they attempted to get to work, to medical appointments and to numerous other essential destinations such as grocery shopping. The government further alleges that the availability of Handilift service to ADA paratransit eligible persons is significantly limited by capacity constraints, including failure to provide next-day service, failure to plan to meet the demand for paratransit services, a substantial numbers of trip denials, significantly untimely pickups and limitations to telephone reservation capacity.
The Americans with Disabilities Act, the Rehabilitation Act of 1973, and their implementing regulations detail the requirements with which fixed-route and complementary paratransit public transportation systems must comply.
"The decision of the Department to intervene in this matter indicates our commitment to protect the rights of all Americans and advance the ability of every individual to fully participate in society," said Stan Harris, Acting U.S. Attorney for the Southern District of Mississippi.
The decision to seek to intervene in the lawsuit reflects the Civil Rights Division’s ongoing commitment to actively enforce federal disability discrimination laws.
City of Duluth, Minnesota, and Western Lake Superior Sanitary District Agree to Eliminate Sewer OverflowsRead the Press Release
WASHINGTON—The city of Duluth, Minn., and the Western Lake Superior Sanitary District have agreed to make improvements to the area’s sewer system, estimated to cost about $130 million, to eliminate sanitary sewer overflows in an agreement filed today in U.S. District Court inMinneapolis Minn., the Justice Department and U.S. Environmental Protection Agency (EPA) announced.
Duluth and the district have also agreed to pay a combined penalty of $400,000 to be equally divided between the United States and the state of Minnesota. The agreement requires that the improvements to the system to eliminate sanitary sewer overflows be in place by 2016.
According to EPA, between 1999 and 2004, the city and the district experienced at least 250 sanitary sewer overflows. These overflows resulted in at least 47 million gallons of untreated sewage entering the St. Louis River and Lake Superior.
"Duluth and the sewer district worked with the federal and state governments to agree on a remedial plan and settlement that will protect water quality in the Duluth area without the need for expensive and time-consuming litigation," said John C. Cruden, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. "We are pleased the state of Minnesota joined us in this case, as such joint enforcement efforts have repeatedly proved effective in Clean Water Act cases."
"EPA is pleased to have reached an agreement with Duluth and the Western Lake Superior Sanitary District," said Acting Regional Administrator Bharat Mathur. "Eliminating sanitary sewer overflows will benefit public health and water quality in the St. Louis River and Lake Superior."
The Western Lake Superior Sanitary District provides sewer service to 18 communities and services a population of about 130,000. Duluth, with a population of 90,000, is the largest community served by the district.
The consent decree, lodged today in the U.S. District Court for the District of Minnesota, 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 State Police Officer Indicted<br /> on Federal Civil Rights ChargesRead the Press Release
A two-count federal grand jury indictment returned against Karl F. Thompson Jr., a Spokane, Wash., police officer, was unsealed today.
The indictment charges Thompson, 61, with the deprivation of Otto Zehm’s civil rights on March 18, 2006, by repeatedly striking him with a baton and tasering him, resulting in bodily injury. The indictment also charges Thompson with making a false entry in a record in a matter investigated by a federal agency.
The civil rights charge carries a maximum penalty of 10 years imprisonment, a $250,000 fine, up to three years of court supervision after release and restitution. The falsification of records in a matter investigated by a federal agency carries a maximum penalty of 20 years imprisonment, a $250,000 fine, and up to three years of court supervision after release.
An indictment is merely an accusation, and the defendant is presumed innocent unless proven guilty.
The case was investigated by the FBI and is being prosecuted by Civil Rights Division Trial Attorney Victor Boutros and Assistant U.S. Attorney Timothy Durkin.
Statement of Attorney General Eric Holder on U.S. Supreme Court’s Ruling in Voting Rights Act Case, Northwest Austin Municipal Utility District No. 1 v. HolderRead the Press Release
"The Supreme Court’s decision to leave in place Section 5 of the Voting Rights Act marks a victory for voting rights in America. In a nearly-unanimous decision, the Court not only recognized the historic achievements of the Voting Rights Act as helping make us a ‘very different Nation’, but also ensured that this law will continue to protect free and fair access to the voting booth. The Department of Justice will continue to vigorously enforce the Voting Rights Act, which was renewed with overwhelmingly bipartisan support in Congress in 2006.
"As a nation, we have made great strides in advancing and protecting civil rights in the past 44 years since the Voting Rights Act was first passed. But there is still more work to be done to fulfill the promise of full voting rights, free from discrimination, for all Americans."
Detroit Spammer and Four Co-Conspirators Plead Guilty to <br /> Multi-Million Dollar E-mail Stock Fraud SchemeRead the Press Release
Five individuals pleaded guilty today in federal court in Detroit for their roles in a wide-ranging international stock fraud scheme involving the illegal use of bulk commercial e-mails, or "spamming."
Alan M. Ralsky, 64, of West Bloomfield, Mich., and Scott K. Bradley, 38, also of West Bloomfield, both pleaded guilty to conspiracy to commit wire fraud, mail fraud and to violate the CAN-SPAM Act. Ralsky and Bradley also pleaded guilty to wire fraud, money laundering and violating the CAN-SPAM Act. Under the terms of his plea agreement, Ralsky acknowledges he is facing up to 87 months in prison and a $1 million fine under the federal sentencing guidelines while Bradley acknowledges that he is facing up to 78 months in prison and a $1 million fine under the federal sentencing guidelines.
The CAN-SPAM Act was passed by Congress in 2003 to address spam e-mails. The criminal provisions of the Act prohibit falsification of certain information used in the transmission of e-mail.
John S. Bown, 45, of Fresno, Calif., pleaded guilty to conspiracy to commit wire fraud, mail fraud and to violate the CAN-SPAM Act. He also pleaded guilty to conspiring to commit computer fraud by creating a botnet and violating the CAN-SPAM Act. A botnet is a network of computers that have been infected by malicious software. Under the terms of his plea agreement, Bown acknowledges he is facing up to 63 months in prison and a $75,000 fine under the federal sentencing guidelines.
William C. Neil, 46, of Fresno, pleaded guilty to conspiring to violate the CAN-SPAM Act and violating the CAN-SPAM Act. Under the terms of his plea agreement, Neil acknowledges he is facing up to 37 months in prison and a $30,000 fine under the federal sentencing guidelines.
James E. Fite, 36, of Culver City, Calif., pleaded guilty to conspiracy to commit wire fraud, mail fraud, and to violate the CAN-SPAM Act. He also pleaded guilty to violating the CAN-SPAM Act and making false statements to FBI agents. Under the terms of his plea agreement, Fite acknowledges he is facing up to two years in prison and a $30,000 fine under the federal sentencing guidelines. All five defendants are scheduled to be sentenced on Oct 29, 2009.
"We will not allow criminals to use e-mail as a conduit for fraud. This prosecution, the Department’s largest to date under the CAN-SPAM Act, underscores our strong and steadfast commitment to ridding our financial markets and cyberspace of e-fraudsters looking to prey on innocent victims," said Assistant Attorney General Lanny A. Breuer.
"Alan Ralsky was at one time the world’s most notorious illegal spammer," said U.S. Attorney Terrence Berg. "Today Ralsky, his son-in-law Scott Bradley, and three of their co-conspirators stand convicted for their roles in running an international spamming operation that sent billions of illegal e-mail advertisements to pump up Chinese ‘penny’ stocks and then reap profits by causing trades in these same stocks while others bought at the inflated prices. Using the Internet to manipulate the stock market through spam e-mail campaigns is a serious crime, and this case serves notice that federal law enforcement has the both the capability and the will to successfully investigate, prosecute and punish such cybercrimes."
"Cyber crime investigations are a top priority of the FBI and we will continue to aggressively investigate those individuals who use and hide behind computers to commit various crimes," said Andrew G. Arena, Special Agent in Charge, FBI.
"In today’s competitive international business world, there will always be a select few who illegally manipulate the system for their own profit," said Maurice M. Aouate, Special Agent in Charge, Internal Revenue Service Criminal Investigation (IRS-CI). "IRS CI will continue to diligently follow the money and assist in the seizure and forfeiture of any ill-gotten gains from their illegal business practices."
"Today marks a victory for all those who entrust their money to others within the U.S. economy. Postal Inspectors have protected Americans from those that have used the U.S. Mail for fraudulent purposes since the passage of the Mail Fraud Statute in 1872," said Joseph A. Pirone, U.S. Postal Inspector in Charge. "Ralsky’s and Bradley’s pleas demonstrate the Postal Inspection Service’s continuing commitment to protect the public."
According to court records, from January 2004 through September 2005, Ralsky, Bradley, Judy Devenow, Bown, William Neil, Anki Neil, James Bragg, Fite, Peter Severa, How Wai John Hui, Francis Tribble, and others engaged in a related set of conspiracies designed to use spam e-mails to manipulate thinly traded stocks and profit by trading in those stocks once their share prices increased after recipients of the spam e-mails traded in the stocks being promoted. The defendants were indicted in the Eastern District of Michigan in December 2007.
Ralsky served as the chief executive officer and primary deal maker for the spam e-mail operation. Bradley, Ralsky’s son-in-law, served as the chief financial officer and director of operations for the spam e-mail operation. Bown, who was chief executive officer of an Internet services company, GDC Layer One, served as the chief technology officer for the spam e-mail operation. William Neil, who was an employee of GDC Layer One, built and maintained a computer network used to transmit spam e-mails as part of the conspiracy. Fite was a contract spammer who hired others to send spam e-mails as part of the conspiracy.
Devenow, Hui and Tribble previously pleaded guilty for their roles in the conspiracy. Devenow served as a manager for the spam e-mail operation and also sent spam e-mails. Tribble planned and directed the stock trading carried out in furtherance of the conspiracy. Hui, who was the CEO of China World Trade, served as the lead dealmaker representing the companies whose stocks were being promoted via spam e-mail.
According to court documents, many of the spam e-mails promoted thinly traded "pink sheet" stocks for U.S. companies owned and controlled by individuals in Hong Kong and China. The spam e-mails contained materially false and misleading information or omissions and were created and sent using software programs that made it difficult to trace them back to the conspirators. According to the indictment, the conspirators used wire communications, the U.S. mail and common carriers to further their frauds. The conspirators also engaged in money laundering involving millions of dollars generated by their manipulative stock trading.
According to the indictment, the defendants used various illegal methods in order to maximize the amount of spam that evaded spam-blocking devices and tricked recipients into opening, and acting on, the advertisements in the spam. These included using falsified "headers" in the e-mail messages, using proxy computers to relay the spam, using falsely registered domain names to send the spam, and also making misrepresentations in the advertising content of some of the underlying e-mail messages.
The cases against Anki Neil, Bragg and Severa are still pending. An indictment is merely an accusation and defendants are presumed innocent until and unless proven guilty at trial beyond a reasonable doubt.
The charges arose after a three-year investigation, led by the FBI with assistance from the U.S. Postal Inspection Service and IRS-CI revealed a sophisticated and extensive spamming operation. The case is being prosecuted by U.S. Attorney Terrence Berg and Trial Attorneys Thomas Dukes and Mona Sedky Spivack of the Criminal Division’s Computer Crime and Intellectual Property Section.
Two Military Officials Plead Guilty to Bribery, Fraud and Conspiracy <br /> Related to Defense Contracts in AfghanistanRead the Press Release
Two U.S. military officials pleaded guilty to various bribery, fraud and conspiracy charges relating to Department of Defense (DOD) contracts in Afghanistan. A third military official pleaded guilty to receiving stolen property, which was obtained through the bribery conspiracy. In addition, four DOD contractors and four affiliated contracting companies were indicted for their roles in paying bribes to the military officials and otherwise defrauding the United States.
The pleas of the military officials were filed today in U.S. District Court in Chicago. A superseding indictment of the contractors and companies was filed yesterday in U.S. District Court in Chicago.
"As the United States continues to expend resources in Afghanistan, the Antitrust Division will remain vigilant in prosecuting individuals and companies who divert funds for their personal gain," said Christine A. Varney, Assistant Attorney General in charge of the Department’s Antitrust Division.
Christopher P. West, a U.S. Army Major from Chicago who served in Afghanistan from 2004 to 2005, pleaded guilty to charges contained in the superseding indictment including three counts of bribery and three counts of conspiracy. West admitted to accepting $90,000 cash from contractors in exchange for awarding DOD contracts at Bagram Airfield, Afghanistan. West also pleaded guilty to two additional counts of conspiracy for accepting cash payments from contractors in exchange for defrauding DOD by certifying inflated numbers of bunkers and barriers delivered at Bagram Airfield, causing the DOD to pay for goods that were invoiced and paid for but never received. Bunkers and barriers are cement structures used for force protection and perimeter walls. West agreed to pay $500,000 in restitution to DOD, to forfeit any fraud-related assets to the United States and to cooperate with the Department’s investigation.
Charles Patton, a friend of West’s and a U.S. Army Sergeant from Chicago, pleaded guilty today to charges of receiving stolen property. Although a member of the same military unit as West, Patton was not deployed to Afghanistan. Patton admitted that he received shipments of cash from West in 2004 and 2005, while West was deployed. Patton hid the money in his home until West returned to the United States and retrieved the cash. Later, at West’s request, Patton moved the money to a safe deposit box in his own name. Patton has agreed to pay $100,000 in restitution, to forfeit any fraud-related assets and to cooperate with the Department’s investigation.
Patrick W. Boyd, a U.S. Air Force Master Sergeant from Rockledge, Fla., who served as a contracting officer at Bagram Airfield, Afghanistan in 2004 and 2005, pleaded guilty to three counts of bribery and three counts of conspiracy for accepting $90,000 cash from contractors in exchange for the award of DOD contracts at Bagram Airfield. Boyd also admitted to the additional offense conduct of receiving $25,000 in cash from a contractor in return for the award of a telecommunications infrastructure contract at Bagram Airfield. Boyd has agreed to pay $130,000 in restitution to the DOD, to forfeit any fraud-related assets and to cooperate with the Department’s investigation.
The superseding indictment also charges brothers Assad John Ramin and Tahir Ramin, both U.S. citizens, and their companies AZ Corporation and Top’s Construction, Noor Alam, an Afghan citizen, and his company Northern Reconstruction Organization, and Abdul Qudoos Bakhshi, an Afghan citizen, and his company Naweed Bakhshi Company, with various counts of bribery, fraud and conspiracy. The superseding indictment alleges that these individuals and their companies conspired to and did pay bribes to West, Boyd and others in order to obtain contracts for supplying concrete bunkers and barriers and asphalt paving. It also charges that the contractors, along with West and others, conspired to and did inflate the number of bunkers and barriers delivered to Bagram Airfield, thereby causing the DOD to pay for bunkers and barriers that were invoiced and paid for but never delivered.
West and Boyd were originally indicted in August 2008 on bribery and conspiracy charges. At the same time, the Ramin brothers, Alam and his company and Bakhshi and his company, were indicted on similar charges. Today’s superseding indictment adds AZ Corporation and Top’s Construction to the indictment, as well as mail fraud charges and additional bribery and conspiracy charges.
"It is shameful that some members of our Armed Forces have conspired with contractors to unjustly enrich themselves while the U.S. is engaged in combat operations in Afghanistan," said Sharon E. Woods, Director, Defense Criminal Investigative Service. "These crimes are particularly contemptible because they involve military members and contractors who are suppose to ensure our troops receive the best support and equipment possible to sustain our military operations. DCIS and its law enforcement partners will aggressively pursue allegations of corruption in Afghanistan and will continue to protect America's warfighters both overseas and in the U.S."
"Today’s announcement makes it perfectly clear that such activity by anyone affiliated with the U.S. Army, in or out of uniform, will not be tolerated. We will continue to investigate allegations of this nature and do everything in our power to see that persons responsible are held accountable and brought to justice," said Brigadier General Rodney Johnson, the Commanding General of the U.S. Army Criminal Investigation Command.
The individuals face up to 20 years in prison and a fine of $250,000 for the mail fraud conspiracy charge, and up to five years in prison and a fine of $250,000 for each of the bribery conspiracy counts. The maximum fine for these offenses may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum. The individuals also face up to 15 years in prison and fines up to three times the amount or value of the bribe for each of the bribery counts. Each corporate defendant faces a maximum fine of up to $500,000 on each charged offense.
This case is part of an ongoing investigation being prosecuted by the Antitrust Division’s National Criminal Enforcement Section (NCES), with assistance from the Criminal Division’s Office of International Affairs. The investigation of this case is being conducted by the Defense Criminal Investigative Service (DCIS), the U.S. Army Criminal Investigation Command (Army CID), and Air Force Office of Special Investigations. Additional assistance was provided by Customs and Border Protection, Field Operations in Chicago; and the Internal Revenue Service, Criminal Investigations Division.
Today’s charges are an example of the Department of Justice’s commitment to protect U.S. taxpayers from procurement fraud through the National Procurement Fraud Task Force. The National Procurement Fraud Initiative, announced in October 2006, is designed to promote the early detection, identification, prevention and prosecution of procurement fraud associated with the increase in contracting activity for national security and other government programs.
Anyone with information concerning illegal conduct in the procurement of goods or services involving DOD contracts in Iraq or Afghanistan is urged to contact NCES at 202-307-6694 or [email protected]; DCIS at 800-424-9098 or [email protected]; or Army CID at www.cid.army.mil.
Stanford Financial Group Executives and Former Chairman of Antiguan Bank Regulator <br /> Indicted for Fraud and ObstructionRead the Press Release
Robert Allen Stanford, 59, chairman of the Houston-based Stanford Financial Group (SFG), three SFG executives and the former chief executive officer of the Antiguan bank regulatory agency have been indicted on fraud and obstruction charges related to a $7 billion scheme to defraud investors.
Also charged in an indictment returned in Houston yesterday and unsealed today was Laura Pendergest-Holt, 35, SFG’s chief investment officer; Gilberto Lopez, 66, SFG’s chief accounting officer; Mark Kuhrt, 37, SFG’s global controller; and Leroy King, 63, the former administrator and CEO of Antigua’s Financial Services Regulatory Commission. Stanford was arrested in Virginia last night, and is scheduled to make an initial appearance today in Richmond. Lopez and Kuhrt were arrested this morning and will make initial appearances in Houston this afternoon. Pendergest-Holt, who previously was indicted on obstruction-related charges, will make her initial appearance on the charges unsealed today in Houston in the near future.
"The Department of Justice will vigorously root out and expose financial crimes that wreak havoc on innocent investors," said Lanny A. Breuer, Assistant Attorney General of the Criminal Division. "Investors need access to accurate and truthful financial information in order to make decisions about how to invest their hard-earned savings. Their savings, and indeed the integrity of our capital markets, are jeopardized when investors are deceived. These difficult economic times make the mission of the Department all the more important."
"The investing public needs to be assured that it is protected from those who would corruptly deprive them of their financial security," said U.S. Attorney Tim Johnson of the Southern District of Texas. "When individuals or business entities engage in fraudulent activity designed to deprive investors of their assets, we will devote whatever resources necessary to bring them to justice."
"Economic crime schemes such as those alleged here today are unfortunately all too commonplace," said Assistant Director Kevin Perkins, FBI Criminal Investigative Division. "These crimes strike at the heart of our economy and our quality of life."
"The IRS is united with the federal law enforcement community in our resolve to put out of business those financial schemes that defraud investors and the U.S. government," said Eileen Mayer, Chief, IRS Criminal Investigation. "This is particularly true as it relates to international financial fraud, and we will continue to follow the money in order to bring those responsible to justice."
"Robert Stanford’s investors trusted him and his associates, in many instances, with their life savings," said Gregory Campbell, Deputy Chief Inspector, U.S. Postal Inspection Service. "When allegations are made that the U.S. Mail has been used to violate such a trust, it’s our job as Postal Inspectors to restore America’s confidence in the integrity of its postal system and help to bring the violators to justice."
According to the indictment, Stanford and his co-defendants engaged in a scheme to defraud investors who purchased approximately $7 billion in certificates of deposit administered by Stanford International Bank Ltd. (SIBL), an offshore bank controlled by Stanford and located on the island of Antigua. Stanford and his co-defendants allegedly misused and misappropriated most of those investor assets, including diverting more than $1.6 billion into undisclosed personal loans to Stanford himself, while misrepresenting to investors SIBL’s financial condition, its investment strategy and the extent of its regulatory oversight by Antiguan authorities. For example, the indictment alleges the following:
- That the defendants allegedly falsely claimed that SIBL’s assets grew from approximately $1.2 billion in 2001 to approximately $8.5 billion in December of 2008. The indictment alleges that, in fact, approximately $5 billion of SIBL’s reported assets consisted of notes on loans to Stanford and grossly overstated interests in "island properties," including more than $2 billion added to the books in 2008 from an allegedly artificial real estate deal that Stanford and his co-conspirators conceived to inflate the bank’s reported assets;
- That Stanford and his co-defendants allegedly falsely represented to investors that SIBL’s investment strategy was to "minimize risk and achieve liquidity" and promised rates of return on CDs that in the end were simply too good to be true in light of the bank’s actual investments and assets; and
- That Stanford and his co-defendants allegedly made false and misleading representations about the regulatory scrutiny of the bank by Antiguan authorities, when, in fact, Stanford was making corrupt payments of more than $100,000 to King to ensure that the Antiguan bank regulatory authority that he headed did not accurately audit, or verify the assets reported in the bank’s financial statements.
Also according to the indictment, Stanford, Pendergest-Holt and King conspired to conceal the fraud from the U.S. Securities and Exchange Commission (SEC) in order to fend off an SEC investigation. King allegedly provided Stanford and others with confidential information that he had received from an official SEC inquiry into a possible fraud on investors by SIBL so that additional false representations concerning SIBL’s financial health and Antiguan regulatory oversight could be made. In addition, Stanford, Pendergest-Holt and others allegedly agreed that Pendergest-Holt would provide false information to the SEC about the true value of SIBL’s investment portfolio.
The defendants are charged with one count of conspiracy to commit mail, wire and securities fraud; seven counts of wire fraud; ten counts of mail fraud; and one count of conspiracy to commit money laundering. The indictment also charges Stanford, Pendergest-Holt, and King with conspiracy to obstruct an SEC proceeding. The indictment seeks forfeiture of the proceeds of the fraud from all defendants, including forfeiture of specific foreign bank accounts controlled by Stanford, Davis and Pendergest-Holt.
Also unsealed today was a criminal information charging James M. Davis, 60, SFG’s chief financial officer, with conspiracy to commit mail, wire and securities fraud; mail fraud; and conspiracy to obstruct an SEC investigation. The information seeks forfeiture of up to $1 billion in fraud proceeds. Davis will make his initial appearance on these charges in Houston in the near future.
Additionally, also unsealed today was an indictment returned in the Southern District of Florida charging Bruce Perraud, 42, a former SFG Global Security Specialist, with destruction of records related to a federal investigation. Perraud allegedly ordered and supervised the destruction of numerous SFG documents housed at SFG’s Fort Lauderdale, Fla., office after he was put on notice that a federal court had ordered the preservation of SFG documents in connection with an SEC investigation and lawsuit. Perraud was arrested in the area of Naples, Fla., this morning and will make his initial appearance in the near future.
An indictment is merely an accusation and defendants are presumed innocent until and unless proven guilty at trial beyond a reasonable doubt.
The case is being investigated by the FBI’s Houston Field Office, Internal Revenue Service - Criminal Investigation, and the U.S. Postal Inspection Service. The case is being prosecuted by individuals from the Criminal Division’s Fraud Section, including Paul E. Pelletier, Principal Deputy Chief; Jack Patrick, Senior Litigation Counsel; Matthew Klecka, Trial Attorney; and Allan Medina, Law Clerk of the Criminal Division’s Fraud Section, as well as Gregg Costa, Assistant U.S. Attorney, Southern District of Texas.
The Criminal Division’s Asset Forfeiture and Money Laundering Section assisted the trial team by working with our foreign counterparts to facilitate the freezing of more than $300 million of Stanford’s assets in the United Kingdom, Canada and other countries. The Criminal Division’s Office of International Affairs and the U.S. Attorney’s Office for the Southern District of Florida also provided assistance in this matter.
Justice Department Files Lawsuit Alleging Racial Discrimination at Mobile Home Park in Gulfport, MississippiRead the Press Release
The Department today filed a lawsuit against the former owner and managers of Homestead Mobile Home Village, a mobile home park in Gulfport, Miss., for violating the Fair Housing Act by discriminating against black tenants on the basis of race or color.
The lawsuit filed in U.S. District Court for the Southern District of Mississippi charges that Edward and Barbara Hamilton, the former managers of the mobile home park, unjustly sought to evict a black couple and their five minor children who had moved there after being displaced by Hurricane Katrina. According to the complaint, the Hamiltons attempted to evict the family and other black residents for allegedly violating the rules of the park, but did not attempt to evict white residents for as many or more violations. The complaint also alleges the Hamiltons harassed and intimidated black tenants. The suit names as a defendant Indigo Investments LLC, the owner of Homestead Mobile Home Park at the time the Hamiltons managed the park.
"No one should have to suffer harassing, unequal treatment from a landlord based on one’s race or color," said Loretta King, Acting Assistant Attorney General for the Civil Rights Division. "The Justice Department will vigorously prosecute any landlord who engages in racial discrimination in violation of the Fair Housing Act."
The lawsuit arose from a complaint filed with the U.S. Department of Housing and Urban Development (HUD) by two black residents of Homestead. The complainants also sought assistance from the Gulf Coast Fair Housing Center, a private, non-profit fair housing organization which provided additional information to HUD. After investigating the complaint, HUD issued a charge of discrimination and after one of the respondents named in HUD’s charge elected to have the case heard in federal court, the case was referred to the Justice Department. The suit also alleges that the defendants’ conduct constitutes a pattern or practice of discrimination or a denial of rights to a group of persons.
"It’s hard enough for families recovering from catastrophic events like Hurricane Katrina to put their lives back together, without also having to face housing discrimination," said John Trasvina, HUD’s Assistant Secretary for Fair Housing and Equal Opportunity. "HUD in partnership with the Department of Justice works to ensure there is no room for racial discrimination in a Mississippi mobile home park or anywhere else in the nation."
The lawsuit seeks monetary damages for those harmed by the defendants’ actions, civil penalties and a court order barring future discrimination.
Individuals who may have information related to this lawsuit should contact the Justice Department at 601-965-4480 or toll free at 1-800-896-7743. Fighting illegal housing discrimination is a top priority of the Justice Department. Visit the Civil Rights Division’s Web site at http://www.usdoj.gov/crt for more information about the laws it enforces.
The complaint is an allegation of unlawful conduct and the defendants are presumed innocent unless proven guilty. The allegations must still be proven in federal court.
Statement from the Attorney General on Today’s Decision by the Supreme Court in District Attorney’s Office for the Third Judicial District et al. v. OsborneRead the Press Release
"The Supreme Court today held that there is no substantive due process right to access DNA evidence after a person has been duly convicted. But today’s decision is limited: the Court merely spoke about what is constitutional, not what is good policy. And there is a fundamental difference. Constitutional rights are only one part of a fair and full system of justice. Simply because a course of action is constitutional does not make it wise. Nothing in today’s decision detracts from the unique power of DNA; indeed, the first line of today’s Court opinion emphasized that ‘DNA testing has an unparalleled ability both to exonerate the wrongly convicted and to identify the guilty.’ DNA testing helps ensure that justice is done.
"For that reason, this administration believes that defendants should be permitted access to DNA evidence in a range of circumstances. In the 2004 Innocence Protection Act, Congress guaranteed access to DNA evidence held by the federal government under specific conditions, and made money available to encourage states to do the same. Today’s decision reaffirmed the power of such practices, and I hope that in light of today’s decision all levels of government will follow the federal government’s lead by working to expand access to DNA evidence."
New York Man Indicted for Clean Air Act ViolationsRead the Press Release
WASHINGTON-- A federal grand jury in the Western District of New York, has returned an indictment charging Keith Gordon-Smith, owner of an asbestos removal company, with numerous violations of the Clean Air Act, submitting false statements and obstruction of justice, the Justice Department announced.
The charges stem from allegations that Gordon-Smith directed and caused illegal asbestos removal at several sites in the Rochester, N.Y., area, and hid the illegal asbestos removal from federal agencies.
The Clean Air Act requires contractors who remove asbestos from public buildings to follow federally established work practice standards to ensure the safe removal of the asbestos. The required standards include providing notice to the U.S. Environmental Protection Agency (EPA) before commencing asbestos removal, adequately wetting the asbestos during the removal and before disposal, and properly disposing of the asbestos at an EPA-approved disposal site.
The 15-count indictment alleges that between June 2006 and August 2008, Gordon-Smith had employees of his asbestos abatement company, Gordon-Smith Contracting Inc., remove asbestos from schools and a hospital in the Rochester area, without ensuring that the asbestos was kept adequately wet or properly disposed. The indictment also alleges that Gordon-Smith took several steps to hide the illegal asbestos removal from federal agencies. These included failing to provide prior notification to EPA before the asbestos removal projects were performed at the schools and hospital, giving false statements to an inspector from the Occupational Safety and Health Administration (OSHA), and providing a false notification to the EPA.
If convicted, Gordon-Smith could be punished by up to five years in prison as well as a criminal fine of up to $250,000 for each count.
Once Gordon-Smith is arraigned, and in accordance with the Crimes Victims Rights Act, the U.S. Attorney’s Office for the Western District of New York will be providing a public notice in the Rochester Democrat and Chronicle to notify potential victims who may have been directly and proximately harmed as a result of the alleged crimes. The notice will include information directing potential victims to a website as well as a contact phone number established by the U.S. Attorney’s Office.
The case is being prosecuted by the U.S. Attorney’s Office for the Western District of New York and the Justice Department’s Environmental Crimes Section. The case was investigated by the EPA Criminal Investigation Division and the U.S. Department of Labor Office of the Inspector General.
Justice Department Settles Lawsuit Alleging Discrimination by Marion, Alabama, Against Alabama National Guard MemberRead the Press Release
WASHINGTON – The Justice Department today announced that it has entered into a consent decree with the city of Marion, Ala., that, if approved by the U.S. District Court in Mobile, Ala., will resolve the Department’s lawsuit filed against Marion on behalf of Cynthia Y. Davis, a member of the state’s Army National Guard.
The complaint filed in July 2008 alleged that the city of Marion violated the Uniformed Services Employment and Reemployment Rights Act (USERRA) by failing to reinstate Davis in her dispatcher position in the city’s police department following her return from basic training in August 2007. The Labor Department’s Veterans’ Employment and Training Service had investigated Davis’ complaint, determined that it had merit and, upon completion of conciliation efforts, referred the matter to the Justice Department.
Enacted by Congress in 1994, USERRA requires employers to promptly reemploy returning service members in the positions they would have held had their employment not been interrupted by military service, or in positions of like status, seniority and pay.
The consent decree requires Marion to reemploy Davis as a full-time dispatcher at the rate of pay and with the amount of seniority and benefits she would have earned had she remained continuously employed by the city until the present, including during the time of her active duty service in the Alabama National Guard. Since Davis is to be reemployed by the city as a full-time dispatcher, she is also guaranteed a full-time dispatcher position with the Perry County, Ala., Emergency Communication District when Marion’s full-time dispatchers are transferred to the Perry County Emergency 911 Board on or about July 1, 2009. As a full-time Perry County Emergency 911 Board dispatcher, Davis will receive a higher wage and better benefits than she had received as a city of Marion employee.
"Service members should not fear being penalized in their civilian careers because they make the decision to join the military," said Loretta King, Acting Assistant Attorney General for the Civil Rights Division. "This agreement demonstrates the Justice Department’s commitment to the vigorous enforcement of federal laws that protect the employment rights of men and women who serve our country in the military."
The Department’s Civil Rights Division has given a high priority to the enforcement of service members’ rights under USERRA. It has filed 16 lawsuits and obtained 18 settlements under USERRA on behalf of service members in 2009. Additional information about the enforcement of USERRA can be found on the Justice Department Web sites http://www.usdoj.gov/crt/emp and http://www.servicemembers.gov, and on the Labor Department’s Web site at http://www.dol.gov/vets/programs/userra/main.htm.
Joint Statement by Secretary Napolitano and Attorney General Eric Holder on Today’s Signing of a DEA-ICE Drug Trafficking Enforcement AgreementRead the Press Release
"Moving past old disputes and ensuring cooperation between all levels of our Departments has been one of our top priorities since taking office. Today's agreement reflects our commitment to working together to protect the American people from violence and criminal activity along our borders.
Ultimately, this agreement allows us to utilize the full range of the federal government‘s capabilities to disrupt and dismantle drug cartels and other criminal organizations that seek to infiltrate our borders.
Giving ICE agents the authority to investigate drug trafficking cases, enhancing information sharing capabilities between ICE and the DEA, and ensuring full participation in intelligence centers will strengthen our efforts to combat international narcotics smuggling, streamline operations and bring better intelligence to our front line personnel."
Honolulu Man and Woman Indicted on Federal Sex Trafficking ChargesRead the Press Release
A federal grand jury in the District of Hawaii has indicted Rodney D. King, 43, and Sharon-Mae Nishimura, 30, both of Honolulu, on multiple counts of federal sex trafficking of adult women and minor female victims.
The charges include allegations of sex trafficking of three adult victims. Specifically, the indictment alleges that from periods within April 2006 through June 2007, King used force, fraud and coercion to engage two adult women in commercial sex and that he did so for his own financial benefit. The indictment also alleges that King attempted to engage a third adult woman in commercial sex in October 2007 by using force, fraud and coercion; and that Nishimura aided and abetted him in that attempt. If convicted of any of these counts, King and Nishimura would each face a sentence of imprisonment for a period of 15 years to life.
Two minor girls were also victimized. The indictment alleges that King engaged one of the minor girls in commercial sex acts from September 2007 through December 2007. It also charges both King and Nishimura with the December 2007 sex trafficking of a second minor victim, alleging that they knew both that the victim was a minor; and that force, fraud and coercion would be used to engage the victim in commercial sex acts. The indictment further charges King and Nishimura with conspiring to engage this 16-year old victim in commercial sex acts. The indictment states that, as a means of inducing her compliance, King provided this teenager with access to crystal methamphetamines.
For conviction of either of the counts of sex trafficking of minors, King and Nishimura would each face a sentence of imprisonment for a period of 10 years to life. For conviction of the crime of conspiracy, each would face a sentence of up to five years in prison. King and Nishimura each also face fines of up to $250,000 per count of conviction. An indictment is merely an accusation and the defendants are presumed innocent unless proven guilty.
The case is being prosecuted by Civil Rights Division trial attorney Kayla Bakshi with the Human Trafficking Prosecution Unit and Assistant U.S. Attorney Darren Ching for the District of Hawaii. The continuing investigation of this case is being conducted by the FBI with the assistance of the Honolulu Police Department and the Hawaii Department of Public Safety Sheriff Division.
Human trafficking prosecutions are a top priority of the Justice Department. In Fiscal Year 2008, the Civil Rights Division and U.S. Attorney’s Offices filed a record number of criminal civil rights cases, including record numbers of both sex trafficking and labor trafficking cases.
Former Military Contractor Convicted of Participating in Scheme to Steal Large Quantities of Fuel from U.S. Army in AfghanistanRead the Press Release
Raschad L. "Sean" Lewis, a former fuel section employee of Kellogg Brown and Root Inc. (KBR), assigned to Bagram Airfield in Afghanistan, was found guilty yesterday by a federal jury of conspiracy, false writing, bribery of a public official, and false claims stemming from a bribery and a fuel diversion scheme.
According to court documents, KBR had a contract to provide support services to the U.S. Army at Bagram Airfield, including unloading truckloads of jet fuel delivered by drivers hired by Red Star Enterprises Limited. Evidence at trial proved that between May and September 2006, Lewis and other KBR employees conspired to accept payments from drivers, who in fact were selling their fuel to parties outside the airfield, in return for providing the drivers with documents to deliver to Red Star falsely showing that the truckloads of fuel had been delivered to the airfield. According to evidence presented in court, more than 48 truckloads of fuel were diverted for sale outside the airfield between May and September 2006, valued at more than $800,000.
Lewis is facing a maximum penalty of 30 years in prison when he is sentenced on Aug. 21, 2009. Previously, former KBR employee Wallace A. Ward pleaded guilty to conspiracy on Jan. 25, 2008, and was sentenced on April 11, 2008, to 26 months in prison. Another former KBR employee, James N. Sellman, pleaded guilty to conspiracy on Feb. 7, 2008, and was sentenced on May 9, 2008, to 26 months in prison.
The case is being prosecuted by Assistant U.S. Attorney Jack Hanly of the U.S. Attorney’s Office for the District of Virginia and Trial Attorney James Graham of the Criminal Division’s Fraud Section. The case was investigated by the U.S. Army Criminal Investigative Division in Virginia and Afghanistan, and the Defense Criminal Investigative Service in Virginia. The Defense Energy Support Center’s Office of the General Counsel in Fort Belvoir, Va., also provided assistance.
In October 2006, the National Procurement Fraud Task Force was formed 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 National Procurement Fraud Task Force, chaired by Assistant Attorney General Breuer, includes the U.S. Attorneys’ Offices, the FBI, the U.S. Inspectors General community and a number of other federal law enforcement agencies. This case, as well as other cases brought by members of the Task Force, demonstrates the Department of Justice’s commitment to helping ensure the integrity of the government procurement process.
Justice Department Settles Lawsuit Against the Sheriff of Bryan County, Oklahoma, <br /> Alleging Pregnancy DiscriminationRead the Press Release
The Department today entered into a consent decree with the sheriff of Bryan County, Okla., that, if approved by the U.S. District Court in Muskogee, Okla., will resolve the Department’s employment discrimination complaint against the Sheriff, also filed today with the court.
The complaint alleges that the sheriff, in his official capacity, engaged in a pattern and practice of employment discrimination against women based on pregnancy by requiring the reassignment of female confinement officers employed at the Bryan County Jail to administrative duties upon their becoming pregnant, in violation of Title VII of the Civil Rights Act of 1964. Title VII prohibits discrimination in employment on the basis of race, color, sex (including pregnancy), national origin or religion.
The consent decree prohibits the sheriff from engaging in any act or practice that discriminates against any employee of, or applicant for employment with, the Bryan County Sheriff’s Office, including the Bryan County Jail, on the basis of sex and pregnancy in violation of Title VII. The consent decree also requires the sheriff to implement and disseminate a policy that prohibits employment discrimination on the basis of pregnancy and to provide mandatory training regarding sex and pregnancy discrimination to all employees.
"The Justice Department commends the sheriff of Bryan County for working cooperatively with us to resolve this matter. We are pleased that the sheriff has agreed to promptly implement new policies and procedures that comply with Title VII," said Loretta King, Acting Assistant Attorney General for the Civil Rights Division. "The Civil Rights Division will continue to vigorously enforce the right of pregnant employees to be free of discrimination in the workplace."
The Department of Justice’s Civil Rights Division has jurisdiction to bring lawsuits under Title VII against state and local governments, and the enforcement of Title VII has been a priority of the Division. Visit http://www.usdoj.gov/crt/ for information about the Civil Rights Division and http://www.usdoj.gov/crt/emp for additional information about its enforcement of Title VII.
Two Oregon Men Sentenced for Role in Federal Hate CrimeRead the Press Release
Gary Moss, 37, was sentenced to serve 41 months in federal prison for conspiring to deprive individuals of their civil rights, and co-conspirator Devan Klausegger, 30, was sentenced to serve 51 months for the same charge. Both defendants were ordered to serve three years of supervised release and ordered to pay restitution to the victims in the amount of $3,107.
According to their plea agreements, as set forth in the indictment, on May 26, 2008, Moss poured a flammable liquid in the shape of a cross and the letters "KKK" on the front lawn of a residence leased by an African-American, his Hispanic wife and their two small children. Then Klausegger handed Moss a small explosive device which Moss used to start a fire on the lawn. The fire was close enough to the victims’ house to endanger the dwelling and its occupants, including the couple’s two small children. Fortunately, a neighbor grabbed a garden hose and extinguished the fire before the victims could be harmed.
In connection with their guilty pleas in February 2009, Moss and Klausegger admitted that they acted with the intent to interfere with the victims’ rights under the Fair Housing Act because they knew that the person who leased the residence was African American.
"Americans should be free to live in a home of their choosing, free from threats of bigotry and intimidation. The Civil Rights Division will prosecute those who commit such despicable acts of hatred to the full extent of the law," said Loretta King, Acting Assistant Attorney General for the Civil Rights Division.
"Crimes motivated by racial hatred are an abomination in a civilized society," U. S. Attorney Immergut said. "We hope that the sentences imposed today will deter others from engaging in similar conduct".
This matter was investigated by Special Agent Adam Marre of the Medford Division of the FBI and was prosecuted by Assistant U.S. Attorney William (Bud) Fitzgerald and Trial Attorney Roy Conn III of the Civil Rights Division of the Justice Department.
Two Baltimore Businessmen Indicted for Conspiring to Rig Bids at Maryland Tax Lien AuctionsRead the Press Release
WASHINGTON — Two Baltimore businessmen were indicted today for conspiring to rig bids at tax lien auctions in Maryland for more than five years, the Department of Justice announced today.
The one-count felony indictment filed today in the U.S. District Court in Baltimore alleges that Harvey M. Nusbaum and his business partner, Jack W. Stollof, participated in a conspiracy to rig bids in tax lien auctions conducted by the city of Baltimore and various counties in the state of Maryland beginning in or around the Spring of 2002 and continuing until at least Aug. 9, 2007. The indictment alleges that Nusbaum, Stollof and their co-conspirators agreed among themselves which of them would bid on specific tax liens or groups of tax liens, and agreed upon specific prices to be bid in certain auctions.
"With so many homeowners struggling these days, it is more important than ever that all aspects of real estate transactions, including tax lien auctions, remain competitive and free from collusion," said Scott D. Hammond, Deputy Assistant Attorney General for Criminal Enforcement of the Department’s Antitrust Division. "The Antitrust Division will vigorously prosecute those who rig bids and deny Americans a competitive bidding process."
When owners of real property in Maryland fail to pay property taxes, the county or city in which the property is located may attach a lien. If the taxes remain unpaid after a waiting period, the lien is sold at auction. The winner of the auction has the right to collect the amount of the lien from the delinquent taxpayer, along with interest, and eventually to foreclose on the property if the lien and interest remain unpaid. Counties and municipalities in Maryland typically hold tax lien auctions annually.
The indictment alleges that Nusbaum and Stollof carried out the bid-rigging conspiracy with co-conspirators by:
- Attending meetings and engaging in discussions regarding bids for tax liens being auctioned by a municipality and counties in Maryland;
- Agreeing during those meetings and discussions not to compete at certain tax lien auctions by allocating which tax liens, properties, or groups of properties each group would bid or refrain from bidding on, and by agreeing on prices that would be bid in certain auctions;
- Discussing and exchanging prices to be bid at certain tax lien auctions so as not to submit higher bids than one another;
- Submitting bids in accordance with the agreements reached; and
- Purchasing tax liens under those agreements at collusive and non-competitive prices.
This case is the result of an ongoing investigation by the Antitrust Division’s National Criminal Enforcement Section and the FBI into anticompetitive conduct at tax lien auctions. In June of 2008, Steven L. Berman pleaded guilty to the same conspiracy. He has not yet been sentenced.
Nusbaum and Stollof are each charged with one count of bid rigging in violation of the Sherman Act, a violation which carries a maximum sentence of 10 years in prison and a fine of $1 million for individuals. Under the statute, the maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.
Anyone with information concerning bid rigging or other anticompetitive conduct regarding tax lien auctions is urged to call the Antitrust Division’s National Criminal Enforcement Section at 202-305-1878, or the FBI’s Baltimore Office at 410-265-8080.
Associate of Tax Defier Irwin Schiff Pleads Guilty to Tax CrimeRead the Press Release
WASHINGTON – Lawrence Cohen, a resident of Las Vegas and a former employee of the now defunct Freedom Books, pleaded guilty today to a tax charge before U.S. District Judge Kent J. Dawson in Las Vegas, the Justice Department and Internal Revenue Service (IRS) announced.
Cohen pleaded guilty to one count of aiding and assisting in the preparation of a false 2000 Form 1040 for a client of Freedom Books. Cohen has agreed to pay restitution for the taxes owed. The plea agreement lists an agreed tax loss of $92,530, most of which is based on the taxes not paid by several Freedom Book clients for whom Cohen prepared false income tax returns.
According to the plea agreement and court documents, from approximately late 2000 or early 2001 until at least 2003, Cohen worked with Irwin Schiff and Cynthia Neun at Freedom Books in Las Vegas. As part of his employment at Freedom Books, Lawrence Cohen promoted the filing of "zero returns" with the IRS.
"Those who intentionally file false and frivolous income tax returns or fail to file tax returns or fail to pay all taxes legally due risk criminal prosecution," said Ronald A. Cimino, Acting Deputy Assistant Attorney General of the Justice Department’s Tax Division. "The Tax Division’s National Tax Defier Initiative is focused on those who intentionally refuse to comply with our laws. The punishment for such willful criminal defiance of our tax laws includes imprisonment and substantial fines."
Paul Camacho, Special-Agent-in-Charge of the Las Vegas Field Office of the Criminal Investigation Division of the Internal Revenue Service, emphasized the importance of this prosecution to deter others from adopting and using these frivolous arguments. "Many taxpayers from Nevada, as well as customers from all over the United States, were duped by the fraudulent advice of Schiff, Neun and Cohen, and then were later forced to pay substantial penalties and interest."
Cohen faces a maximum prison sentence of three years and a $250,000 fine. His sentencing hearing was set for Sept. 16, 2009. As part of the plea agreement, the government will dismiss the other charge against Cohen, tax evasion for his 2000 individual income tax return, at sentencing.
In September 2005, Cohen, along with Irwin Schiff and Cynthia Neun, was tried on conspiracy and tax fraud charges. Schiff and Neun were convicted on the conspiracy charges and other tax fraud counts and sentenced to prison. Cohen was acquitted of conspiracy and other tax counts, but was convicted of aiding and assisting in the preparation of one false 2000 Form 1040 (the same count to which he is pleading guilty).
In December 2007, Cohen’s conviction was reversed by the Court of Appeals for the Ninth Circuit. The Ninth Circuit vacated Cohen’s conviction because the district court failed to allow the defendant’s expert psychiatrist to testify about Cohen’s alleged narcissistic personality disorder. The Ninth Circuit said the testimony, if allowed, would have assisted the jury in making a decision about whether Cohen had acted willfully when preparing the false income tax return.
Acting Deputy Assistant Attorney General Cimino commended the IRS-Criminal Investigation special agents who investigated the case, as well Tax Division trial attorneys Lori A. Hendrickson and Christopher S. Strauss who prosecuted the case.
Wife of Gang Leader Pleads Guilty to Narcotics ChargesRead the Press Release
On the day her trial was to begin in U.S. District Court in Lubbock, Texas, Almighty Latin King and Queen Nation (ALKQN) member Marie Chavez, aka "Shorty," the wife of an alleged ALKQN leader Jose Nava, aka "Chino," pleaded guilty to a superseding indictment charging her and 16 co-defendants with various offenses related to alleged narcotics and weapons trafficking and violent activities.
Specifically, Chavez, 28, of Lubbock, pleaded guilty to one count of conspiracy to distribute and possession with intent to distribute five kilograms or more of cocaine and 100 kilograms or more of marijuana; and possession with intent to distribute 500 grams or more of cocaine. She faces a maximum statutory sentence of not less than 10 years and up to life in prison. A sentencing date has not yet been scheduled. Chavez has been in custody since her arrest in December 2008.
According to documents filed in court, Chavez admitted that from 2001 until the time of her arrest, she and co-defendants, Jose Robledo Nava, aka "Chino" (her husband); Luis Nava, aka "Flaco"; Reynaldo Nava, aka "Rat"; Robert Allen Ramirez, aka "Nesyo"; Carol Ann Rivas Nava; Cecily Dominique Juarez; Jesus Martinez, aka "Solid"; David Hellums, aka "CutThroat"; James Johnathan Cole, aka "Blitz"; Eduardo Daniel Mares, aka "Pitt"; Gabriel Lee Gonzales, Michael Conde, aka "Psycho"; Guerrero Olivas, aka "Screech;" John Guzman; Hiluterio Chavez, aka "Zeus"; and Eliseo Perez, aka "Wicked"; and others agreed to distribute and possess with intent to distribute cocaine and marijuana.
Chavez today admitted that in furtherance of the conspiracy she was responsible for at least 50 kilograms, but less than 150 kilograms of cocaine, and at least 100 kilograms, but less than 400 kilograms of marijuana. Chavez further admitted that she and her co-defendants intentionally and knowingly possessed with the intent to distribute cocaine and marijuana, and distributed cocaine and marijuana to others. According to the indictment, they acquired the cocaine and marijuana from Mexico and brought it to the South Texas region, where it was packaged, stored, and transported to Big Spring, Texas, Lubbock, and Midland, Texas, for further distribution.
Chavez today admitted that she transported, divided, packaged, distributed and stored cocaine and marijuana throughout North Texas and that she would send cash to other co-conspirators in furtherance of this conspiracy. She further admitted that on Dec. 13, 2008, she and co-defendants Jose Robledo Nava, Reynaldo Nava and Carol Ann Rivas Nava knowingly and intentionally possessed with intent to distribute 500 grams or more, but less than five kilograms, of cocaine.
Chavez is the tenth defendant in the case to plead guilty. Others who have pleaded guilty include:
Jesus Martinez, aka "Solid," 28, of Midland
John Guzman, 30, of Big Spring
Hiluterio Chavez, aka "Zeus," 33, of Chicago
Eliseo Perez, aka "Wicked," 28, of Mission, Texas
Luis Nava, aka "Flaco," 25, of Midland
Reynaldo Nava, aka "Rat," 27, of Big Spring
Carol Ann Rivas Nava, 20, of Big Spring
Cecily Dominique Juarez, 20, of Midland
Guerro Olivas, aka "Screech," 26, of Big Spring
The indictment also alleged that from 2004 through mid July 2005, defendants Jose Robledo Nava, Jesus Martinez and Hiluterio Chavez conspired to deal in firearms. Last month, Jesus Martinez and Huluterio Chavez pleaded guilty to conspiring to engage in the business of dealing firearms.
Jose Robledo Nava is allegedly the ALKQN leader in Texas. He, along with James Johnathan Cole, Robert Allen Ramirez, Gabriel Lee Gonzales and Eduardo Daniel Mares are charged in the indictment with the May 4, 2008, murders of Valerie Garcia and Michael Cardona, in Big Spring.
The case is being investigated by the National Gang Targeting, Enforcement, and Coordinating Center (Gang TECC); the Organized Crime Drug Enforcement Task Force (OCDETF); the Midland and El Paso U.S. Attorney’s Offices; the FBI; the U.S. Drug Enforcement Agency; U.S. Immigration and Customs Enforcement; the Bureau of Alcohol, Tobacco, Firearms and Explosives; the El Paso Intelligence Center; U.S. Customs and Border Protection; the U.S. Marshals Service; the Texas Department of Public Safety; the Lubbock, Midland, Houston, San Antonio and Big Spring, Texas, Police Departments; the Lubbock County Sheriff’s Office; and the Howard County, Texas, District Attorney’s Office.
Assistant U.S. Attorney Cody L. Skipper of the Lubbock U.S. Attorney’s Office and Trial Attorney Joseph A. Cooley of the Criminal Division’s Gang Unit are prosecuting the case.
Justice Department Settles Lawsuit Against the Sheriff of Harrison County, Indiana, <br /> Alleging Sex DiscriminationRead the Press Release
The Department today entered into a consent decree with Harrison County, Ind., Sheriff George Michael Deatrick, in his official capacity, the Harrison County Board of Commissioners and the Harrison County Council that, if approved by the U.S. District Court for the Southern District of Indiana, will resolve the Department’s complaint filed in March 2009 under Title VII of the Civil Rights Act of 1964, as amended.
Title VII prohibits discrimination in the workplace on the basis of race, color, sex, national origin and religion, as well as retaliation for filing a charge of discrimination.
The complaint alleged that Sheriff Deatrick subjected Deana Decker and Melissa Graham, former employees of the Sheriff’s Department, to sexual harassment by touching them in a sexual and offensive manner and directing sexually-charged comments to them in violation of Title VII. After Decker and Graham filed discrimination charges against Deatrick with the Equal Employment Opportunity Commission, the complaint alleged that the sheriff retaliated against them by brandishing a gun and staring at them in order to intimidate and frighten them.
Under the terms of the consent decree, the sheriff, the council and the commissioners must pay $375,000 to Decker and Graham as part of the settlement reached with the Department and a separate lawsuit with the former employees. The consent decree also requires the sheriff to retain an Equal Employment Opportunity (EEO) trainer to conduct annual mandatory courses focused on preventing sex discrimination and retaliation and to appoint an EEO monitor to evaluate the practices of the sheriff in preventing sex discrimination and retaliation, investigate complaints concerning sex discrimination and retaliation, and report on the findings of the investigations to the Department of Justice.
"Women in the workplace have the right to earn a living without being subjected to sexual harassment, especially from their supervisors," said Loretta King, Acting Assistant Attorney General for the Civil Rights Division. "The Civil Rights Division is pleased that the sheriff of Harrison County will adopt a policy against sex discrimination, provide training to its employees as to the requirements of Title VII, and provide Ms. Decker and Ms. Graham with the relief to which they are entitled."
The Civil Rights Division of the Justice Department is committed to the vigorous enforcement of Title VII. Visit http://www.usdoj.gov/crt/emp/index.html for more information about the Division’s enforcement of Title VII and other federal employment laws.