District Not Recorded
The source did not name an office we could identify. These records remain unassigned rather than guessed.
Justice Department Settles Pregnancy Discrimination Lawsuit Against the Board of Education of the City of ChicagoRead the Press Release
The Department today has entered into a settlement agreement with the city of Chicago’s Board of Education that, if approved and entered by the court, will resolve a complaint of pregnancy discrimination filed by the United States against the board under 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 complaint, filed in February 2009, in U.S. District Court in Chicago, alleged that the board discriminated against Traci Meziere, a former teacher with the Chicago Public Schools, because of her sex/pregnancy in that her accrued seniority was rescinded after she took a leave associated with her pregnancy; and after she announced her second pregnancy she was demoted to a position with less pay, benefits and significantly diminished responsibilities; and denied a requested maternity leave.
The settlement agreement requires the board to provide Meziere with a monetary award of $45,000 in lost back pay and compensatory damages. The agreement also requires the board to draft a fact sheet regarding certain maternity, child rearing and family medical leave practices; distribute the fact sheet and related policies and procedures electronically to all teachers, principles, assistant principals and relevant human resources staff; provide mandatory training on sex/pregnancy discrimination and equal employment opportunity; and retain certain documents.
"The settlement agreement that the United States obtained in this case makes it clear that pregnancy discrimination in the public school system will not be tolerated," said Loretta King, Acting Assistant Attorney General for the Civil Rights Division. "I am pleased that we were able to work with the Board to establish mechanisms to protect current and future employees from pregnancy discrimination."
The Civil Rights Division is committed to the vigorous enforcement of Title VII. Visit http://www.usdoj.gov/crt/emp/index.html for more information about Title VII.
Justice Department Settles Lawsuit Against Sheriff of Hendry County, Florida, <br /> Alleging Pregnancy DiscriminationRead the Press Release
The Department today has entered into a consent decree that, if approved by the U.S District Court in Fort Myers, Fla., will resolve its complaint against the Sheriff of Hendry County, Fla., and the Hendry County Board of County Commissioners.
The complaint, filed in December 2008, alleged that the sheriff’s predecessor discriminated against Tanya Shaw, a former deputy sheriff with the Hendry County Sheriff’s Office (HCSO), on the basis of pregnancy and engaged in a pattern or practice of discrimination against Shaw and other pregnant employees of the HCSO by maintaining a policy requiring pregnant employees to take mandatory light duty regardless of their ability to perform the essential functions of their jobs 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 Justice Department’s consent decree with the sheriff and the Board of County Commissioners requires the sheriff to implement a policy that prohibits employment discrimination on the basis of pregnancy; and to provide mandatory training regarding sex and pregnancy discrimination to HCSO officials, managers, supervisors and administrators. Additionally, the consent decree requires that the sheriff provide Shaw with a monetary award of $33,280 for lost wages and compensatory damages, and offer her an opportunity for reinstatement. Two other HCSO female employees who also were subjected to the mandatory light duty policy will receive $1,500 in compensatory damages under the terms of the consent decree.
"The Justice Department commends the Hendry County Sheriff’s Office for working cooperatively with us to resolve this matter. We are pleased that the sheriff has agreed to implement promptly new policies and procedures that comply with Title VII and to provide relief to the individuals who were harmed by the discriminatory light duty policy," 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."
Visit http://www.usdoj.gov/crt/emp/index.html for more information about the Civil Rights Division’s enforcement of Title VII.
Eight Almighty Latin King and Queen Nation Gang Members Plead Guilty to Drug Conspiracy and Related ChargesRead the Press Release
Eight members of the violent gang known as the "Almighty Latin King and Queen Nation" (ALKQN) have pleaded guilty to a variety of charges, including drug conspiracy and weapons trafficking.
Jesus Martinez, aka "Solid," 28, of Midland, Texas, and Guerrero Olivas, aka "Screech," 26, of Big Spring, Texas, both pleaded guilty late yesterday afternoon in Lubbock, Texas, before U.S. District Judge Sam R. Cummings to a superseding indictment charging them with conspiring to distribute and possession with intent to distribute five kilograms or more of cocaine and 100 kilograms or more of marijuana. Martinez also pleaded guilty to conspiring to engage in the business of dealing in firearms.
Luis Nava, aka "Flaco," 25, of Midland and John Guzman, 30, of Big Spring, both pleaded guilty on May 18, 2009, before Judge Cummings to the superseding indictment, which charged them with conspiring to distribute and possession with intent to distribute five kilograms or more of cocaine and 100 kilograms or more of marijuana.
Defendants Eliseo Perez, aka "Wicked," 28, of Mission, Texas; Cecily Dominique Juarez, 20, of Midland; and Reynaldo Nava, aka "Rat," 27, of Big Spring, have also pleaded guilty to conspiring to distribute and possession with intent to distribute five kilograms or more of cocaine and 100 kilograms or more of marijuana. Perez pleaded on May 14, 2009, before judge Cummings, Juarez pleaded on May 8, 2009, and Nava pleaded on April 17, 2009.
Hiluterio Chavez, aka "Zeus," 33, of Chicago, pleaded guilty on May 14, 2009, before Judge Cummings to a superseding indictment charging him with being a convicted felon in possession of firearms, possession of stolen firearms and conspiring to engage in the business of dealing in firearms.
The superseding indictment in this case, which charged a total of 17 defendants, was unsealed on Feb. 26, 2009. The indictment charged that from 2001 until Dec. 13, 2008, when six of the defendants were arrested, the defendants, as members of the ALKQN, conspired to distribute multi-kilogram quantities of cocaine and marijuana throughout Texas and elsewhere. According to the indictment, they acquired the cocaine and marijuana from Mexico and brought it to the South Texas region, where it was packaged, stored and transported to Big Spring, Lubbock and Midland for further distribution.
This case was investigated by the Organized Crime Drug Enforcement Task Force; the Midland and El Paso U.S. Attorney’s Offices; the U.S. Drug Enforcement Administration; the FBI; U.S. Immigration and Customs Enforcement; the Bureau of Alcohol, Tobacco, Firearms and Explosives; the U.S. Marshals Service; the Texas Department of Public Safety; the Police Departments of Lubbock, Midland, Houston and Big Spring, and the Howard County, Texas, District Attorney’s Office.
Assistant U.S. Attorney Cody L. Skipper of the Lubbock division of the U.S. Attorney’s Office for the Northern District of Texas and Trial Attorney Joseph A. Cooley of the Criminal Division’s Gang Unit are prosecuting the case.
Attorney General Announces Center to Fight <br /> International Organized CrimeRead the Press Release
Today, Attorney General Eric Holder announced a new International Organized Crime Intelligence and Operations Center (IOC-2) that will marshal the resources and information of nine U.S. law enforcement agencies, as well as federal prosecutors, to collectively combat the threats posed by international criminal organizations to domestic safety and security. Attorney General Holder made the announcement today in Rome at the G8 Justice and Home Affairs Ministerial.
The new IOC-2 Center will allow partner agencies to join together in a task force setting, combine data, and produce actionable leads for investigators and prosecutors working nationwide to combat international organized crime, and to coordinate the resulting multi-jurisdictional investigations and prosecutions. Understanding that international criminal organizations are profit-driven, IOC-2 will also work with investigators and prosecutors to target the criminal proceeds and assets of international criminal organizations.
"The globalization of criminal networks and advances in technology have made international criminal organizations a significant threat to the safety and security of our nation," said Attorney General Holder. "But we are answering that threat by developing a 21st century organized crime program that will be nimble and sophisticated enough to combat the danger posed by these criminals for years to come. IOC-2 gives us the capacity to collect, synthesize and disseminate information and intelligence from multiple sources to enable federal law enforcement to prioritize and target the individuals and organizations that pose the greatest international organized crime threat to the United States."
As part of this strategy, IOC-2 will establish a team of financial experts to serve as consultants and identify opportunities and strategies to employ forfeiture and explore possibilities for using financial sanctions as a means of disrupting targeted criminal organizations. The team will coordinate multi-jurisdictional forfeiture strategies and assist agents in the field in obtaining the necessary resources, such as financial auditors, investigators and forfeiture attorneys, to employ the strategy.
The members participating in IOC-2 will include: the FBI; U.S. Immigration and Customs Enforcement (ICE); the Drug Enforcement Administration (DEA); U.S. Internal Revenue Service (IRS); the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF); U.S. Secret Service; U.S. Postal Inspection Service (USPIS); U.S. Department of State's Bureaus of Consular Affairs and Diplomatic Security; U.S. Department of Labor, Office of the Inspector General; and the U.S. Department of Justice, Criminal Division. IOC-2 will also partner with the 94 U.S. Attorneys’ Offices and the U.S. Department of the Treasury, Office of Terrorism and Financial Intelligence.
In recognition of the demonstrated interrelationship between criminal organizations that engage in illicit drug trafficking and those that engage in international organized crime involving a broader variety of criminal activity, IOC-2 will also work in close partnership with the Organized Crime Drug Enforcement Task Force (OCDETF) Fusion Center and DEA’s Special Operations Division to ensure these interrelationships are identified and coordinated across federal law enforcement .
From the G8 meeting, Attorney General Holder also emphasized the importance of continued cooperation with foreign law enforcement through existing police-to-police and mutual legal assistance mechanisms. He noted that the creation of IOC-2 demonstrates the United States’ commitment to addressing international organized crime issues and will make the United States a more effective partner for joint investigations and prosecutions.
"International organized crime threatens our safety, disrupts our communities, and subverts our economy," said U.S. Department of Homeland Security Secretary Janet Napolitano. "Our success targeting these criminals relies upon effective partnerships across the federal law enforcement community. The new IOC-2 Center will foster collaboration and strengthen our ability to crack down on international criminal organizations."
According to the U.S. Law Enforcement Strategy to Combat International Organized Crime (IOC Strategy) released in April 2008 by the Department of Justice, international organized crime has considerably expanded in presence, sophistication and significance in recent years and it now threatens many aspects of how Americans live, work and do business. These threats include criminal penetration of global energy and strategic material markets that are vital to American national security interests; logistical and other support to terrorists and foreign intelligence services; the use of cyberspace to target U.S. persons and infrastructure; and the manipulation of securities markets and financial institutions. International criminal organization are also jeopardizing our border security; endangering public health through the trafficking of humans and counterfeit pharmaceuticals; and corrupting public officials in the United States and abroad.
The Attorney General’s Organized Crime Council (AGOCC) is chaired by the Deputy Attorney General and consists of the Assistant Attorney General for the Criminal Division, the chair of the Attorney General’s Advisory Committee and the leaders of nine participating federal law enforcement agencies, which include: the FBI; ICE; DEA; IRS; ATF; U.S. Secret Service; USPIS; U.S. Department of State, Bureau of Diplomatic Security; and U.S. Department of Labor, Office of the Inspector General.
The AGOCC is an outgrowth of an executive order, issued by President Lyndon B. Johnson in 1968, that placed the Attorney General in charge of coordinating all federal law enforcement activity against organized crime. At the time, the enforcement efforts were primarily focused on La Cosa Nostra. In 2008, the AGOCC began to consider the threat from international organized crime, rather than the Italian-American mafia, to be the primary organized crime threat facing the United States.
More information on the IOC Strategy can be found at: http://www.usdoj.gov/criminal/icitap/press/room/2008/apr/04-23-08combat-intl-crime-overview.pdf
United States Files Clean Air Lawsuit Against Engine ImporterRead the Press Release
WASHINGTON—The United States has filed a civil complaint against PowerTrain Inc., Wood Sales Co. Inc., and Tool Mart Inc., all based in Golden, Miss., alleging that they imported and sold more than 78,000 Chinese-made engines that do not meet federal air pollution standards, the Justice Department and Environmental Protection Agency (EPA) announced.
The lawsuit filed in U.S. District Court in Washington, D.C., is part of an ongoing effort to ensure that imported non-road engines and equipment comply with the Clean Air Act’s emissions standards. The filing marks the first federal court action enforcing the Clean Air Act’s emissions standards for portable generators, water pumps and other "non-handheld equipment."
The complaint alleges that the non-road engines imported and sold by Powertrain, Wood Sales and Tool Mart from September 2002 through at least May 2007 were not certified to meet applicable emission standards. The Clean Air Act prohibits any non-road engine from being imported and sold in the U.S. unless covered by a "certificate of conformity" indicating that the engine meets applicable emission standards. The complaint also alleges that the companies failed to provide buyers with the full emission-system warranty required by the Clean Air Act for all of the non-road engines that were sold, to install proper emission-compliance labels on many of the engines and to fully respond to EPA’s administrative information requests issued under the Clean Air Act.
The complaint, filed by the Department of Justice on behalf of the EPA, seeks civil penalties up to the maximum amount authorized by law, as well as actions by the companies to remedy the violations and to mitigate any excess pollutant emissions caused by the violations.
EPA estimates the engines have contributed to excess emissions of more than 150 tons of hydrocarbons and nitrogen oxides, and more than 5,000 tons of carbon monoxide.
Non-road engines emit carbon monoxide, as well as volatile organic compounds and nitrogen oxides that contribute to the formation of ground-level ozone or smog. Exposure to even low levels of ozone can cause respiratory problems, and repeated exposure can aggravate pre-existing respiratory diseases.
In 1995, EPA established regulations to reduce emissions of hydrocarbons from small gasoline-powered non-road engines. To obtain a certificate of conformity for non-road engines from EPA, a manufacturer must submit an application that describes the non-road engine and its emission control system, and that demonstrates that the non-road engines will meet applicable federal emissions standards. After obtaining a certificate of conformity, applicants must also comply with specific labeling, warranty and other requirements to ensure that the non-road engines will meet emissions standards in use.
Court Orders Tewksbury, Mass. Employer to Timely Pay Withholding and Unemployment TaxesRead the Press Release
WASHINGTON - A federal court in Boston issued a preliminary injunction ordering Excel Home Care Inc. and Diane E. Porter of Tewksbury, Mass., to comply with federal tax withholding requirements and to timely pay all future employment and unemployment tax liabilities, the Justice Department announced today.
The Justice Department filed suit on April 15, 2009, seeking a preliminary and permanent injunction order that requires the defendants to comply with all federal employment and unemployment tax filing and deposit requirements. The complaint alleges that the defendants have failed to comply fully with Excel Home Care’s employment and unemployment tax obligations since the fourth quarter of 2005 and the year 2003, respectively.
At the time the complaint was filed, the government alleged that Excel Home Care failed to pay employment taxes for the quarters ending Dec. 31, 2005, through March 31, 2008. It was further alleged that Excel Home Care has failed to pay unemployment taxes for the years 2003 and 2005-2007. In addition, the pleadings state that the Internal Revenue Service (IRS) estimates for each new quarter that Excel Home Care fails to pay its employment taxes the loss of revenue approximates $100,000 and for each year that this entity fails to pay its unemployment taxes, the revenue loss is in excess of $7,000.
The order also prohibits the defendants from making any disbursements or assigning any property outside the ordinary course of business from the date of payment of wages until the amounts which are required to be withheld from the payment of those wages are, in fact, paid to the IRS. In addition, the defendants are required to notify IRS representatives of any new company or business that Ms. Porter owns or manages.
Christine A. Varney to Participate in Eighth Annual International Competition Network Conference in Zurich, SwitzerlandRead the Press Release
WASHINGTON – Christine A. Varney, Assistant Attorney General in charge of the Department’s Antitrust Division, will participate in the eighth annual International Competition Network (ICN) conference in Zurich, Switzerland, from June 3-5, 2009. At the conference, senior government antitrust officials, private-sector antitrust experts from around the world, and representatives from intergovernmental organizations will meet to discuss competition issues.
The ICN conference will focus on the recent accomplishments of its five substantive working groups which address: unilateral conduct, mergers, cartels, advocacy and competition policy implementation. Conference panels will include discussions on proposed Recommended Practices for Substantive Merger Analysis and the analysis of tying and discounting arrangements, and will promote the general exchange of views regarding competition law and policy among the participants. Members also will finalize work programs for the coming year.
In October 2001, the Department of Justice and the Federal Trade Commission (FTC) joined with antitrust agencies from 13 other jurisdictions around the world (Australia, Canada, the European Union, France, Germany, Israel, Italy, Japan, Korea, Mexico, South Africa, the United Kingdom and Zambia) to create the ICN. The ICN now includes 107member agencies from 96 jurisdictions. The goal of the ICN is to provide a forum for antitrust agencies to address antitrust enforcement and policy issues of common interest and formulate proposals for procedural and substantive convergence through a results-oriented agenda and structure.
The following portions of this year’s conference will be open to the press:
WEDNESDAY, JUNE 3, 2009: 8th ANNUAL ICN CONFERENCE (DAY 1)
8:30 A.M. (Zurich), 2:30 A.M. (EDT) – Welcoming Remarks by Swiss and ICN Officials
9:30 A.M. (Zurich), 3:30 A.M. (EDT) – Advocacy Session
John Fingleton, CEO of the U.K.’s Office of Fair Trading will moderate the plenary session on market studies and competition advocacy. Panelists will include Melanie L. Aitkin, Interim Commissioner of Competition, Canadian Competition Bureau and HackHyun Kim, Director of the Korea Fair Trading Commission. Delegates will discuss these topics in breakout sessions.
1:30 P.M. (Zurich), 7:30 A.M. (EDT) – Merger Session
Christine A. Varney, Assistant Attorney General of the Department of Justice’s Antitrust Division, will moderate a panel on "Merger Analysis in Troubled Times." J. Robert Kramer II, the Department of Justice Antitrust Division’s Director of Operations and Civil Enforcement, will present Recommended Practices for Merger Analysis on competitive effects. Delegates will discuss these topics in breakout sessions.
4:15 P.M. (Zurich), 10:15 A.M. (EDT) – Special Project (Competition Law in Small Economies)
This session will be moderated by Walter A. Stoffel, Chairman of the Swiss Competition Commission.
THURSDAY, JUNE 4, 2009: 8th ANNUAL ICN CONFERENCE (DAY 2)
9:00 A.M. (Zurich), 3:00 A.M. (EDT) – Cartel Session
A plenary session, moderated by Scott D. Hammond, Deputy Assistant Attorney General for Criminal Enforcement of the Department of Justice’s Antitrust Division, will examine "Transitioning From an Administrative to a Criminal Regime." Panelists will include Graeme Samuel, Chairman of the Australian Competition and Consumer Commission and Ana Paul Martinez, Head of the Competition Division of Brazil’s Secretariat of Economic Law of the Ministry of Justice. Delegates will discuss criminalization of cartel conduct and investigative strategy in breakout sessions.
11:45 A.M. (Zurich), 5:45 A.M. (EDT) – Unilateral Conduct Session
FTC Chairman Jon Leibowitz will provide introductory remarks, to the plenary session focusing on "Distinguishing Pro From Anticompetitive Conduct: The Fine Line Between Aggressive Competition and Anticompetitive Foreclosure in Tying and Discounting Cases." The panel discussion will be moderated by Markus Lange, Head of the International Section of Germany’s Bundeskartellamt, with participants including Damien Neven, Chief Economist of the European Commission’s DG Comp, and chief economists from the competition authorities of Israel and South Africa. Delegates will discuss these topics in breakout sessions.
4:15 P.M. (Zurich), 10:15 A.M. (EDT) – Competition Policy Implementation Session
Maria Coppola Tineo, Counsel for International Antitrust at the FTC’s Office of International Affairs, is a panelist for a discussion of agency effectiveness. Russell Damtoft, Associate Director of the FTC’s Office of International Affairs, will present a summary of ICN activities this past year on its experience sharing teleconferences and on-line discussion forum. Delegates will discuss these topics in breakout sessions.
FRIDAY, JUNE 5, 2009: 8th ANNUAL ICN CONFERENCE (DAY 3)
9:00 A.M. (Zurich), 3:00 A.M. (EDT) – Interactive ICN – Maximizing Network Effects
This session will focus on the three ICN vice chairs' present and future work, including Vice Chair for Outreach, FTC Commissioner William E. Kovacic. Commissioner Kovacic will join other ICN members in discussing how the ICN can address better the needs of its members.
1:15 P.M. (Zurich), 7:15 A.M. (EDT) – Closing
Complete information about the conference is available at http://www.icn-zurich.org/The 2009 ICN conference will be held at the Kongresshaus Zürich, Gotthardstrasse 5, Postfach 2523 CH-8022 in Zurich, Switzerland.
MEDIA CONTACTS: Department of Justice, Gina Talamona, 202-514-2007
Federal Trade Commission, Mitchell J. Katz, 202-326-2161
Aventis Pharmaceutical to Pay U.S. $95.5 Million to Settle False Claims Act AllegationsRead the Press Release
WASHINGTON – Aventis Pharmaceutical Inc., a wholly owned subsidiary of sanofi-aventis U.S. LLC, has agreed to pay the United States $95.5 million to settle allegations that it violated the False Claims Act by misreporting drug prices in order to reduce its Medicaid Drug Rebate obligations, the Justice Department announced today.
The settlement resolves allegations that between 1995 and 2000, Aventis and its corporate predecessors knowingly misreported best prices for the steroid-based anti-inflammatory nasal sprays Azmacort, Nasacort and Nasacort AQ. Under the Medicaid Drug Rebate Statute, Aventis was required to report to Medicaid the lowest, or "best" price that it charged commercial customers, and pay quarterly rebates to the states based on those reported prices.
In order to avoid triggering a new best price that would obligate it to pay millions of dollars in additional drug rebates to Medicaid, Aventis entered into "private label" agreements with the HMO Kaiser Permanente that simply repackaged Aventis’s drugs under a new label. As a result, Aventis underpaid drug rebates to the Medicaid program and overcharged certain Public Health Service entities for these products.
"This agreement reflects our commitment to ensuring that Aventis and other drug companies fulfill their obligations under the Drug Rebate Statute to accurately report pricing information and pass the savings along to the Medicaid program," said Tony West, Assistant Attorney General for the Department’s Civil Division. "We will continue to ensure that programs for the most vulnerable portions of our population do not pay any more for pharmaceutical products than they should under the law."
"We will continue to be vigilant in investigating and prosecuting those who scam the Medicaid system - a system that is meant to benefit the poor," said Michael K. Loucks, Acting U.S. Attorney for the District of Massachusetts. "When a drug company agrees to be a provider to the Medicaid programs, it agrees to sell its drugs to them at the same price it gives its best customers. We will, as here, pursue those who break their promises."
Out of the settlement amount, the federal recovery is approximately $49 million. Aventis will also pay over $40 million to the Medicaid participating states, and over $6 million to certain public health services entities who paid inflated prices for the drugs at issue.
As part of today’s settlement, sanofi-aventis and the Office of Inspector General of the Department of Health and Human Services entered into an Addendum to sanofi-aventis’s existing Corporate Integrity Agreement that requires the company to report certain best price information for drugs covered by Medicaid and other health care programs. The Agreement already in place requires the company to report other pricing information to the government as a result of a prior drug pricing settlement concerning the company’s drug Anzemet.
"The Medicaid program serves our nation’s most vulnerable, including low-income parents, children, seniors and people with disabilities. As drug costs continue to spiral upward, we must be vigilant and ensure that pharmaceutical companies comply with all federal laws related to the Medicaid program," said Daniel R. Levinson, Inspector General of the Department of Health and Human Services. "Our agreement requires that the Aventis board members personally certify that the company’s compliance program is truly effective."
The investigation was handled by the Civil Division, the U.S. Attorney’s Office for the District of Massachusetts, the Department of Health and Human Services’ Office of Inspector General and Office of Counsel to the Inspector General, and the National Association of Medicaid Fraud Control Units.
Another Commercial Fisherman Sentenced to Prison for Illegal Harvesting of RockfishRead the Press Release
WASHINGTON— Keith A. Collins, a commercial fisherman licensed in Maryland, was sentenced today in U.S. District Court in Greenbelt, Md., to 13 months in prison for illegally overfishing striped bass also known as rockfish, the Justice Department announced.
He was also fined $4,500 and ordered to pay restitution in the amount of $70,569 to the National Fish and Wildlife Foundation to the benefit of the Chesapeake Bay Striped Bass Restoration Account. He was further sentenced to two years of supervised release.
"This prison sentence as well as past sentences in this case should serve as a warning to unscrupulous fishermen who consider illegally harvesting or underreporting their rockfish catch. You will be prosecuted and you will face stiff sentences," said John C. Cruden, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. "Fishing limits in the Chesapeake Bay and surrounding waterways have been enacted to protect a healthy sustainable population of striped bass and ensure a viable fishery up and down the eastern seaboard."
"For honest fishermen who work hard and play by the rules, it must be a relief to see violators held accountable," said Rod J. Rosenstein, U.S. Attorney for the District of Maryland.
Collins of Deale, Md., pleaded guilty on Feb. 19, 2009, to falsely recording the amount of striped bass that he harvested from 2003 to 2007 with the assistance of two Maryland designated fish check-in stations. In each year, he recorded a lower weight of striped bass than he actually caught. Collins and the check-in station operators would also falsely inflate the actual number of fish harvested. By under-reporting the weight of fish harvested, and over-reporting the number of fish taken, the records would make it appear that the defendants had failed to reach the maximum poundage quota for the year, but had nonetheless run out of tags. As a result, the state would issue additional tags that could be used by the defendants allowing them to catch striped bass above their maximum poundage quota amount. Collins admitted that the estimated fair market value of the fish involved in the illegal transactions was between $600,000 and $750,000. In addition, Collins falsely tagged many of the striped bass that he caught in pound nets with tags indicating that the fish had been caught using a hook and line.
Sentencing dates for three commercial fishermen who have pleaded guilty to similar charges as Collins are listed below.
Jerry Decatur, Sr. July 1, 2009 9:30 AM
Kenneth Dent July 2, 2009 9:30 AM
Jerry Decatur, Jr. Aug. 12, 2009 9:30 AM
As a result of the investigation and prosecution, to date a total of 15 individuals and two fish wholesalers have been charged for illegally harvesting and underreporting their catch of striped bass. Ten individuals and a wholesale company have pleaded guilty. The prosecution to date has resulted in the sentencing of seven individuals including Collins to a total of 46 months in prison. They have also been ordered to a total of 13 months of home detention, $165,500 in fines and $284,819 in restitution.
Two fishermen, Joseph Peter Nelson Jr. of Great Mills, Md., and his father Joseph Peter Nelson of Avenue, Md., have been indicted in the District of Maryland and are awaiting trial.
The case is being prosecuted by Assistant U.S. Attorney Stacy Dawson Belf for the District of Maryland and Senior Trial Attorney Wayne Hettenbach of the Justice Department’s Environmental Crimes Section.
Virginia Man Pleads Guilty to Illegal Campaign Fundraising SchemeRead the Press Release
A Virginia man pleaded guilty today to illegally making conduit contributions to a candidate seeking federal office.
Jerry Pierce-Santos, 50, of Vienna, Va., pleaded guilty today before Magistrate Judge Alan Kay in U.S. District Court for the District of Columbia to a single-count criminal information that charged him with making $17,000 in conduit contributions to a candidate seeking election to federal office during the 2003 calendar year. According to court documents, conduit contributions are illegal campaign contributions made by one person in the name of another person.
According to court documents, during the 2003 calendar year, Pierce-Santos agreed with 10 other individuals that he would use them to make a contribution to a candidate seeking federal office by reimbursing them for some or all of contributions they would make to the candidate he was supporting. Specifically, according to plea documents, Pierce-Santos reimbursed seven people $2,000 and three people $1,000 for their contributions. In 2003 the individual contribution limit was $2,000 for a candidate seeking election to federal office.
At sentencing, Pierce-Santos faces up to two years in prison, three years supervised release following his incarceration and a statute-mandated $50,000 fine.
This case is being prosecuted by Trial Attorneys Peter M. Koski and Kevin O. Driscoll of the Criminal Division’s Public Integrity Section, which is headed by Chief William M. Welch II. The case is being investigated by the FBI and the Office of the Inspector General for the Department of Housing and Urban Development.
Plea Agreement
Factual Basis
Tampa Judge Shuts Down Florida Tax PreparerRead the Press Release
WASHINGTON – A federal judge in Tampa, Fla., has permanently barred a Port Richey, Fla., tax preparer and his firm from preparing federal tax returns, the Justice Department announced today. U.S. District Court Judge Elizabeth A. Kovachevich of the Middle District of Florida entered the permanent injunction against Frank Lighty and his firm, Lighty and Associate. Lighty consented to the permanent injunction.
According to the government complaint filed in the case, Lighty prepared federal income tax returns claiming false or inflated deductions for medical expenses, charitable contributions and other items. The tax loss from Lighty’s conduct was alleged to be as much as $6 million. The complaint also alleged that Lighty falsely told customers that he was a former IRS agent and had a Master’s Degree in Tax Administration.
John A. DiCicco, Acting Assistant Attorney General for the Justice Department’s Tax Division thanked Justice Department trial attorney Michael Pahl for handling the case, and revenue agent Joe Slater of the Internal Revenue Service’s Small Business/Self-Employed Division, who conducted the investigation.
In the past decade the Justice Department has obtained injunctions against more than 400 tax preparers and tax fraud promoters. Information about these cases is available on the Justice Department’s Tax Division Web site at http://www.usdoj.gov/tax/.
Federal Judge Hands Downs Sentences in Holy Land Foundation CaseRead the Press Release
Today, in federal court in Dallas, U.S. District Judge Jorge A. Solis sentenced the Holy Land Foundation for Relief and Development (HLF) and five of its leaders following their convictions by a federal jury in November 2008 on charges of providing material support to Hamas, a designated foreign terrorist organization.
"Today's sentences mark the culmination of many years of painstaking investigative and prosecutorial work at the federal, state and local levels. All those involved in this landmark case deserve our thanks," said David Kris, Assistant Attorney General for National Security. "These sentences should serve as a strong warning to anyone who knowingly provides financial support to terrorists under the guise of humanitarian relief."
HLF was incorporated by Shukri Abu Baker, Mohammad El-Mezain, and Ghassan Elashi. Mufid Abdulqader and Abdulrahman Odeh worked as fund raisers. Together, with others, they provided material support to the Hamas movement.
Shukri Abu Baker, 50, of Garland, Texas, was sentenced to a total of 65 years in prison. He was convicted of 10 counts of conspiracy to provide, and the provision of, material support to a designated foreign terrorist organization; 11 counts of conspiracy to provide, and the provision of, funds, goods and services to a Specially Designated Terrorist; 10 counts of conspiracy to commit, and the commission of, money laundering; one count of conspiracy to impede and impair the Internal Revenue Service (IRS); and one count of filing a false tax return.
Mohammad El-Mezain, 55, of San Diego, California, was sentenced to the statutory maximum of 15 years in prison. He was convicted on one count of conspiracy to provide material support to a designated foreign terrorist organization.
Ghassan Elashi, 55, of Richardson, Texas, was sentenced to a total of 65 years in prison. He was convicted on the same counts as Abu Baker, and one additional count of filing a false tax return.
Mufid Abdulqader, 49, of Richardson, Texas, was sentenced to a total of 20 years in prison. He was convicted on one count of conspiracy to provide material support to a designated foreign terrorist organization, one count of conspiracy to provide goods, funds, and services to a specially designated terrorist, and one count of conspiracy to commit money laundering.
Abdulrahman Odeh, 49, of Patterson, New Jersey, was sentenced to 15 years in prison. He was convicted on the same counts as Abdulqader.
HLF, now defunct, was convicted on10 counts of conspiracy to provide, and the provision of, material support to a designated foreign terrorist organization; 11 counts of conspiracy to provide, and the provision of, funds, goods and services to a Specially Designated Terrorist; and 10 counts of conspiracy to commit, and the commission of, money laundering.
The Court reaffirmed the jury’s $12.4 million money judgment against all the defendants, with the exception of El Mezain, who was not convicted of money laundering.
From its inception, HLF existed to support Hamas. Before HLF was designed as a Specially Designated Terrorist by the Treasury Department and shut down in December 2001, it was the largest U.S. Muslim charity. It was based in Richardson, Texas, a Dallas suburb. The "material support statute," as it is commonly referred to, was enacted in 1996 as part of the Antiterrorism and Effective Death Penalty Act. That statute recognizes that money is fungible, and that money in the hands of a terrorist organization — even if for so called charitable purposes — supports that organization’s overall terrorist objectives.
The government presented evidence at trial that, as the U.S. began to scrutinize individuals and entities in the U.S. who were raising funds for terrorist groups in the mid-1990s, the HLF intentionally hid its financial support for Hamas behind the guise of charitable donations. HLF and these five defendants provided approximately $12.4 million in support to Hamas and its goal of creating an Islamic Palestinian state by eliminating the State of Israel through violent jihad.
The government’s case included testimony that in the early 1990's, Hamas’ parent organization, the Muslim Brotherhood, planned to establish a network of organizations in the U.S. to spread a militant Islamist message and raise money for Hamas. The government’s case also included testimony about Hamas material found in zakat committees. The defendants sent HLF-raised funds to Hamas-controlled zakat committees and charitable societies in the West Bank and Gaza. Zakat is an Arabic word referring to the religious obligation to give alms.
HLF became the chief fundraising arm for the Palestine Committee in the U.S. created by the Muslim Brotherhood to support Hamas. According to a wiretap of a 1993 Palestine Committee meeting in Philadelphia, former HLF President and CEO Shukri Abu Baker, spoke about playing down their Hamas ties in order to keep raising money in the U.S. Another wiretapped phone call included Abdulrahman Odeh, HLF’s New Jersey representative, referring to a suicide bombing as "a beautiful operation."
The government also presented evidence that several HLF defendants have family members who are Hamas leaders, including Hamas’ political chief, Mousa Abu Marzook, who is married to a cousin of Ghassan Elashi, HLF’s former Chairman of the Board. Ghassan Elashi, who also served as the vice-president of marketing for Infocom Corporation, is currently serving an 80-month sentence following his conviction on several charges related to export violations. Mohammed El-Mezain was HLF’s Director of Endowments and Mufid Abdulqater was a major HLF fundraiser. Two named defendants, Akram Mishal and Haitham Maghawri are fugitives.
The defendants provided financial support to the families of Hamas martyrs, detainees, and activists knowing and intending that such assistance would support the Hamas terrorist organization. Since 1995, when it first became illegal to provide financial support to Hamas, HLF provided approximately $12.4 million in funding to Hamas through various Hamas-affiliated committees and organizations located in Palestinian-controlled areas and elsewhere.
During trial, the government also presented evidence that HLF was so concerned about investigators uncovering the group’s intentions that they kept a manual entitled "The Foundation’s Policies and Procedures." HLF followed various security procedures outlined in the manual to include hiring a security company to search the HLF for listening devices, ordering defendant Haitham Maghawri, a fugitive, to take training on advanced methods in detecting wiretaps, shredding documents after board meetings, and maintaining incriminating documents in off-site locations.
The case was investigated by the Joint Terrorism Task Force, involving agents from federal, state, and local agencies including: FBI, IRS - Criminal Investigation, U.S. Immigration and Customs Enforcement (ICE), Department of State, U.S. Secret Service, U.S. Army Criminal Investigation Division, the Texas Department of Public Safety, and the Dallas, Plano, Garland and Richardson, Texas, Police Departments. In addition, the Department of Justice Criminal Division’s Asset Forfeiture and Money Laundering Section provided assistance.
The case was prosecuted by James T. Jacks, acting U.S. Attorney; Barry Jonas, Trial Attorney for the Department of Justice Counter-terrorism Section; and Elizabeth J. Shapiro, Deputy Director, Federal Programs Branch, Department of Justice, serving as a Special Assistant U.S. Attorney.
Eight Uzbekistan Nationals Among 12 Charged with<br /> Racketeering, Human Trafficking & Immigration Violations in Scheme <br /> to Employ Illegal Aliens in 14 StatesRead the Press Release
Twelve defendants, including eight Uzbekistan nationals, have been charged in a 45-count indictment returned by a federal grand jury in Kansas City, Mo., on May 6, 2009, on RICO (Racketeer Influenced and Corrupt Organizations Act) charges related to labor racketeering, forced labor trafficking and immigration and other violations in 14 states.
Abrorkhodja Askarkhodjaev, 30, Nodir Yunusov, 22, Rustamjon Shukurov, 21, citizens of Uzbekistan residing in Mission, Kan.; Ilkham Fazilov, 44, Nodirbek Abdoollayev, 27, both citizens of Uzbekistan residing in Kansas City, Mo.; Viorel Simon, 27, Alexandru Frumasache, 23, both citizens of Moldova residing in Kansas City, Kan.; Kristin Dougherty, 49, of Ellisville, Mo.; Andrew Cole, 53, of St. Charles, Mo.; Abdukakhar Azizkhodjaev, 49, a citizen of Uzbekistan residing in Panama City, Fla.; and Sandjar Agzamov, 27, and Jakhongir Kakhkharov, 29, both citizens of Uzbekistan who recently left the United States and are living abroad; as well as three companies owned or controlled by Askarkhodjaev – Giant Labor Solutions LLC, headquartered in Kansas City, Mo., Crystal Management Inc, headquartered in Mission, Kan., and Five Star Cleaning LLC, headquartered in Overland Park, Kan. – were charged in the indictment made public today upon the arrests and initial court appearances of the defendants.
The RICO indictment alleges that, since January 2001, Askarkhodjaev has been the leader of a criminal enterprise and directed the rest of the co-defendants in carrying out unlawful activities to further the enterprise. Among the criminal acts alleged in a pattern of racketeering activity are forced labor trafficking, identity theft, harboring illegal aliens, mail fraud, conspiracy to commit money laundering, transporting illegal aliens, visa fraud, extortion, interstate travel in aid of racketeering, wire fraud and inducing the illegal entry of foreign nationals. Many of the workers were employed at hotels in the Kansas City area and in Branson, Mo.
According to the indictment, Askarkhodjaev owned and operated a labor leasing company, Giant Labor Solutions, in Kansas City, Mo.. Through Giant Labor and a dozen other businesses that he associated with or controlled as part of the alleged criminal enterprise, Askarkhodjaev allegedly secured fraudulent labor leasing contracts from clients in the hotel/resort, casino and construction industries in Missouri, Kansas, Alabama, Arizona, California, Colorado, Florida, Louisiana, Massachusetts, Minnesota, Nevada, New Jersey, South Carolina and Wyoming. The criminal enterprise allegedly used illegal aliens to fulfill labor contracts for housekeeping, cleaning services and other duties. The workforce was predominately comprised of foreign nationals, the indictment says, who either entered the United States illegally, overstayed their visas, or did not have legal authorization to reside or work in their specific locations during their term of employment.
The federal indictment also alleges that Askarkhodjaev, Yunusov, Shukurov, Fazilov, Simon, Cole and Frumusache aided and abetted each other to obtain the labor and services of a person by means of serious harm and threats of serious harm, and by means of the abuse and threatened abuse of law and legal process.
According to the indictment, the enterprise required the foreign nationals to work where the enterprise assigned them. However, the enterprise threatened to cancel the immigration status of foreign nationals who refused to work as directed by the enterprise. The enterprise allegedly charged the foreign nationals numerous fees. It further profited, the indictment says, by requiring the foreign national workers to reside in apartments it exclusively secured, controlled and for which it charged exorbitant rents. According to the indictment, the enterprise often threatened to cancel the immigration status of foreign nationals who requested permission to seek alternative housing,
Allegedly, these fees and expenses, combined with the lack of payment for hours worked, underpayment for hours worked and lack of work assignments, often resulted in the foreign national workers receiving a paycheck with negative earnings. The enterprise allegedly ensured that the workers did not make enough to repay their debt, to purchase a plane ticket home, or pay for their own living expenses while in the United States. It further controlled the foreign national workers in the Kansas City area by not allowing them to receive mail, the indictment says.
RICO is a federal law that provides for extended criminal penalties for acts performed as part of an ongoing criminal organization or enterprise. The charges contained in the indictment are simply accusations, and not evidence of guilt.
This case is being prosecuted by Assistant U.S. Attorneys William L. Meiners and Cynthia L. Cordes and Civil Rights Division Human Trafficking Prosecution Unit Trial Attorney Jim Felte. It was investigated by U.S. Immigration and Customs Enforcement, the FBI, the U.S. Labor Department’s Office of Labor Racketeering and Fraud Investigations, IRS Criminal Investigation, the Kansas Department of Revenue – Criminal Investigations, U.S. Citizenship and Immigration Services and the Independence, Mo., Police Department in conjunction with the Human Trafficking Rescue Project.
Defense Contractor Pleads Guilty to Wire Fraud in Connection with the Procurement of a Bullet-Proof Vest Contract in IraqRead the Press Release
WASHINGTON – A defense contractor has pleaded guilty to wire fraud and has admitted to engaging in other bribery-related conduct in connection with contracts in Iraq, the Department of Justice today announced.
According to the plea agreement filed in the U.S. District Court in the District of Columbia on Dec. 18, 2007, and unsealed today, Diana Bakir Demilta, a U.S. citizen, pleaded guilty to one count of wire fraud. Demilta, the President of Global-Link Distribution LLC, a defense contracting company with operations in the International Zone, Baghdad, Iraq, subverted the competitive bidding process used by the Department of Defense and the Multi-National Security Transition Command - Iraq for a bullet-proof vest contract by submitting multiple sham bids from about September 2004 until about March 2005.
In addition, Demilta admitted that she paid at least $60,000 to an unnamed public official to induce that person to influence the award of contracts and to induce expedited payments for contracts awarded to Demilta’s company.
"The Department of Justice will prosecute those who corrupt the competitive bidding process and who undermine the military’s efforts to obtain equipment that is critical to protecting lives, such as bullet proof vests," said Christine A. Varney, Assistant Attorney General in charge of the Department’s Antitrust Division. "The Division will not tolerate anticompetitive schemes that affect the men and women serving in our nation’s armed forces."
According to the court documents, Demilta devised a scheme and instructed a co-conspirator to submit sham bids from dormant and/or related companies for the bullet-proof vest contract. The sham bids were submitted with intentionally increased prices so that one company, a Kuwaiti general trading firm, would win the contract at a lower price. The owner of the Kuwaiti general trading firm then authorized Demilta to negotiate and receive all funds related to the contract.
"Today’s announcement demonstrates that our commitment to rooting out fraud in the Department of the Army is stronger than ever," said Brigadier General Rodney Johnson, the commanding general of the U.S. Army Criminal Investigation Command. "This plea agreement should send a crystal clear message that we will aggressively pursue allegations of wrongdoing wherever the leads take our special agents. We will continue our fight against fraud and our unwavering commitment to the Department of Justice and our fellow agencies who stand shoulder to shoulder with us in this fight."
"Today’s criminal action demonstrates the ongoing commitment of SIGIR and the U.S. Army - Criminal Investigation Command to aggressively pursue those who have committed fraud and bribery in connection with the U.S.-funded effort to rebuild Iraq," said Stuart W. Bowen, Jr., Special Inspector General for Iraq Reconstruction (SIGIR). "We owe nothing less to the dedicated military and civilian personnel, and contractors who are serving, or have served, in Iraq, and to the Iraqis, and, of course, to the U.S. taxpayers."
Demilta pleaded guilty to one count of conspiracy to commit wire fraud, which has a maximum penalty of 20 years in prison and a fine of $250,000. The 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 amount is greater than the statutory maximum fine.
Today’s charges represent 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.
This case is part of an ongoing investigation being conducted by the Antitrust Division’s National Criminal Enforcement Section (NCES) along with Special Agents from SIGIR, the U.S. Army Criminal Investigation Division (Army CID), the Defense Criminal Investigative Service, the FBI and U.S. Immigrations and Customs Enforcement.
Anyone with information concerning bid rigging, bribery or other criminal conduct in the procurement of goods and services in Iraq is urged to contact NCES at 202-307-6694, SIGIR at 1-866-301-2003 or [email protected]; or Army CID at www.cid.army.mil.
United States Sues California Man to Bar Him from Promoting Fraudulent Tax SchemesRead the Press Release
WASHINGTON — The Justice Department announced today that it has filed suit against convicted tax fraud promoter Daniel Andersen to enjoin him from promoting fraudulent tax schemes. The government’s complaint alleges that Andersen directed the activities of both the Institute for Global Prosperity (between 1996 and 2002) and the Stratia Corporation (between 2002 and 2004). The lawsuit states that Andersen used these organizations to promote the fraudulent tax schemes sold by others in a series of audio recordings and at offshore conferences.
Andersen, a co-founder of the Institute for Global Prosperity, was indicted in 2004 for conspiring to defraud the United States. He pleaded guilty in 2004, and in July 2008, a federal judge sentenced him to 30 months imprisonment for his offenses.
Global Prosperity orchestrated offshore conferences where individuals, which Global Prosperity touted as "experts," hawked numerous tax fraud schemes. According to the government’s complaint, these vendors falsely told customers that they could revoke or relinquish their Social Security numbers using a U.C.C.-1 filing statement and that wages earned inside the United States are not subject to income taxes. The court papers state that Global Prosperity promoted and sold its products through a multi-level marketing system that rewarded existing salespeople for recruiting new salespeople.
The government complaint asserts that Global Prosperity received cease-and-desist orders from six states’ attorneys general in 1997 and 1998, but that Andersen ignored these orders and continued to promote the organization under a different name and offshore locations. According to court documents, after Global Prosperity disbanded in 2002, Andersen and Lorenzo "Zo" Lamantia founded Stratia Corporation, which continued to promote fraudulent tax schemes, including the fraudulent schemes formerly sold by enjoined tax-fraud promoter Bruce Hawkins. The government enjoined Lamantia from promoting fraudulent tax schemes in July, 2006.
Since 2001, the Justice Department has obtained injunctions against more than 400 tax preparers and tax-fraud promoters. Information about these cases is available on the Justice Department website and about the Justice Department’s Tax Division is available on the Justice Department website.
Justice Department Files Lawsuit Against the<br /> Newark, New Jersey, Public Schools to Enforce the Employment Rights of Naval ReservistRead the Press Release
The Justice Department today filed a lawsuit in U.S. District Court in Newark, N.J., on behalf of U.S. Naval Reserve member George Lawton against the Newark Public Schools (NPS) alleging violations of the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA).
The complaint alleges that Lawton, then a substitute teacher for the NPS since 1997, was offered a full-time teaching position in July 2005, but was called to active duty overseas in August 2005. Upon completing his active duty in August 2007, Lawton began contacting the NPS to seek reemployment temporarily in his substitute position and then later in his full time position. The complaint alleges the NPS did not promptly reemploy Lawton as a substitute or otherwise place him in the position that he would have been in had his employment not been interrupted by military service. The Labor Department’s Veterans’ Employment and Training Service investigated the matter, determined that Lawton’s claim had merit and, upon completion of conciliation efforts, referred the matter to the Justice Department.
"The Justice Department is committed to vigorously enforcing federal laws that protect the employment rights of our service members," said Loretta King, Acting Assistant Attorney General for the Civil Rights Division. "Cases like this, on behalf of a service member who was not promptly reemployed following military service, further reinforce that commitment."
Subject to certain limitations, USERRA requires that individuals who leave their civilian jobs to serve in the U.S. military be promptly reemployed by their civilian employers in the same or comparable positions as the one that they would have held had they not left to serve in the military. USERRA also requires that civilian employers reemploy returning service members in positions of like pay, status and benefits to the positions the service members would have held had they been continuously employed by their civilian employers.
The Civil Rights Division has given a high priority to the enforcement of service members’ rights under USERRA. This is the thirteenth USERRA suit the Civil Rights Division has filed this year on behalf of service members. Please visit http://www.servicemembers.gov and http://www.usdoj.gov/crt/emp for more information.
Civil Rights Division Attorney Named Top Prosecutor<br /> by the Association of Women in Federal Law EnforcementRead the Press Release
Special Litigation Counsel Kristy Parker, a senior attorney in the Civil Rights Division’s Criminal Section, has been selected to receive the 2009 Top Prosecutor Award from the Women in Federal Law Enforcement (WIFLE).
Parker was selected for her role as the lead prosecutor in the successful 2008 case of United States v. Sydnor, et al.,which resulted in the federal conviction of three Kentucky jailers who retaliated against an 18-year-old traffic offender by arranging to have him locked in a jail cell with violent inmates, who in turn brutally assaulted and raped the teenaged victim.
"Kristy Parker represents the tenacious spirit and extraordinary commitment of the many fine career attorneys who serve the public interest at the Justice Department. Her tireless and extraordinary litigative ability vindicated the civil rights of the victim," said Acting Assistant Attorney General Loretta King for the Civil Rights Division. "We thank the Women in Federal Law Enforcement for recognizing her for this distinguished honor."
"I congratulate Ms. Parker for receiving this high honor. Her unwavering dedication made certain that the officers who trampled on the dignity and rights of a powerless teenager were brought to justice," said Mark Kappelhoff, Chief of the Division’s Criminal Section.
The victim was arrested on Valentine’s Day, 2003, and taken to the Grant County, Ky., Detention Center. A sergeant and several officers teased the teenager at the jail and after announcing he needed to be "taught a lesson," visited a jail cell filled with hardened criminals and told them that they would be bringing down a young man who needed to be "messed" with. The officers then escorted him down a hallway lined with cells filled with hardcore criminals, as inmates yelled, "Fresh Meat!"; "Give him to me!" and "Happy Valentine’s Day!" The officers pushed the boy into the cell, slammed the door shut and left him without looking back. In the next hours the boy was viciously raped by an inmate and abused by others.
During the investigation and trial, Parker and another lawyer under her supervision won over reluctant law enforcement witnesses and made a powerful presentation of the evidence. Parker delivered arguments that educated and moved a jury initially reluctant to convict law enforcement officers. The jury convicted the defendants on all counts. They received lengthy prison sentences.
This is the third consecutive year in which WIFLE selected an attorney from the Civil Rights Division’s Criminal Section as its top prosecutor. Last year, Deputy Chief Paige Fitzgerald received the award for her successful cold case prosecution of James Ford Seale, a former Ku Klux Klansman, for the racially-motivated murders of two young black men killed in Mississippi more than 40 years earlier. Deputy Chief Bobbi Bernstein was named WIFLE’s top prosecutor in 2007 for her role in the case of United States v. Saldana, et al., a prosecution marking the first – and to date, the only – use of federal criminal civil rights statutes to prosecute violent hate crimes carried out by members of a traditional street gang.
Parker has served the Justice Department for a decade and has been a trial attorney in the Criminal Section for six years. She will be presented the Top Prosecutor Award at a banquet ceremony honoring WIFLE award recipients on June 17, 2009, in Tucson, Ariz.
Tax Shelter Promoter Pleads Guilty to Conspiring<br /> to Impede and Impair the IRSRead the Press Release
Anthony G. Merlo, a former resident of Fort Worth, Texas, and the U.S. Virgin Islands, pleaded guilty today to conspiracy to defraud the United States. Merlo appeared before Magistrate Judge Ellen S. Carmody in Grand Rapids, Mich.
In March 2008, Merlo and five others were indicted by a grand jury in Grand Rapids and charged with conspiring to defraud the United States by promoting, marketing, selling and administering fraudulent tax shelters called loss-of-income insurance policies. These policies were issued through Security Trust Insurance Co., a now-defunct company formerly known as Caduceus Life Insurance Co., that was located in the U.S. Virgin Islands.
Co-conspirator John A. Campbell, a former partner in and resident director of the Kalamazoo, Mich., office of the law firm of Miller, Canfield, Paddock & Stone P.L.C., pleaded guilty to conspiracy in April 2008. Campbell’s client, Oskar René Poch of Hickory Corners, Mich., pleaded guilty to corruptly endeavoring to obstruct the administration of the Internal Revenue laws in April 2008. Poch owned and operated Trillium Staffing, an employee-leasing company in Kalamazoo.
Co-defendants Peter Peggs, Robert Larsen, and Craig Stone, who allegedly promoted fraudulent tax shelters, are scheduled to begin trial in September 2009.
According to the plea agreement and evidence presented at the plea hearing, Merlo became involved with promoting offshore tax shelters in 1995 with co-defendants Peggs and Larsen through Security Trust. Merlo admitted that his level of involvement in this promotion significantly increased from 1999 through mid-2002, when he was also interacting with Defendants Campbell and Stone.
According to the plea agreement and evidence presented at the plea hearing, Merlo agreed with Defendants Peggs, Larsen, Stone, and others to conceal information and documents from the IRS in connection with the marketing, promotion, selling, and administering of Security Trust’s tax shelter products known as "loss-of-income" or "general business risk" insurance and "deferred private annuities." Specifically, Merlo admitted that he and his co-conspirators attempted to impede and impair the IRS by, among other things, hiding from the IRS and others the relationship between the front and back ends of their loss-of-income tax shelter product; paying Campbell’s law firm for an opinion letter to be used in the marketing of this product that omitted any mention of the back-end; altering documents so as to refrain from accurately memorializing the connection between the front and back ends; and discussing, and approving of, the destruction of documents related to the program.
Judge Judge Janet T. Neff has scheduled the sentencing of Campbell and Poch for September 28, 2009. The scheduling of Merlo’s sentencing is pending. Merlo and Campbell face maximum potential sentences of five years’ in prison, followed by terms of supervised release not to exceed three years, fines of up to $250,000, and mandatory special assessments of $100. Poch faces a maximum potential sentence of three years’ in prison, followed by a one year term of supervised release, a fine of $250,000, and a mandatory special assessment of $100.
An indictment is only a charge and is not evidence of guilt. The defendants are entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Acting Assistant Attorney General John A. DiCicco and acting United States Attorney for the Western District of Michigan Donald Davis thanked Tax Division trial attorneys Richard M. Rolwing and Patrick J. Murray, who are prosecuting the case. They also commended the investigative efforts of the IRS agents involved in this case.
Additional information about the Justice Department’s Tax Division and its enforcement efforts may be found at http://www.usdoj.gov/tax.
Justice Department Files Suit Against Fresno County, California, to Protect Employment Rights of Navy ReservistRead the Press Release
In a lawsuit filed today on behalf of U.S. Navy Reservist Porotesano Faapouli the Justice Department contends that Fresno County, Calif., violated the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA) by failing to promptly and properly reemploy Faapouli when he returned from active military duty with a service-related injury.
Faapouli was a senior juvenile correctional officer in Fresno County’s Probation Department when he was called to active duty with the U.S. Navy in June 2004. During a January 2005 training exercise, Faapouli suffered severe back, neck and shoulder injuries which required several surgeries and a long period of recuperation. Following his honorable discharge, he reported back to work for the county in September 2007.
The complaint filed in U.S. District Court for the Eastern District of California alleges that Fresno officials refused to meet with Faapouli to identify an appropriate reemployment position until five months after he first reported to work, made no effort to accommodate Faapouli in his pre-service position, failed to reemploy him at all until June 2008 and ultimately reemployed him in an entry-level position that was not in any way equivalent to his pre-service position.
"Protecting the employment rights of our returning service members is among the highest priorities of the Department of Justice," said Loretta King, Acting Assistant Attorney General for the Civil Rights Division. "The Department is committed fully to safeguarding the employment rights of our men and women in uniform, particularly those whose sacrifices include a disability incurred while in service to our nation."
The Labor Department’s Veterans’ Employment and Training Service investigated and attempted to resolve Faapouli’s USERRA complaint before referring it to the Justice Department.
USERRA, which was enacted by Congress in 1994 to minimize disruption in the lives of returning service members, recognizes the additional burden faced by returning veterans who were injured while serving our nation. Accordingly, USERRA requires employers to make reasonable efforts to accommodate a returning service member’s injury or disability. If the returning service member cannot perform the pre-service position with or without an accommodation, USERRA mandates that the employer reemploy the veteran in a position that he or she can perform that is equivalent in seniority, status and pay to the pre-service position.
The Civil Rights Division has given the enforcement of service members’ rights under USERRA a high priority. This is the twelfth USERRA suit the Division has filed this year on behalf of service members. Please visit
http://www.servicemembers.gov and http://www.usdoj.gov/crt/emp for more information.Justice Department Files Lawsuit Against City of Chesapeake, Virginia, to Enforce the Employment Rights of Virginia Coast Guard ReservistRead the Press Release
The Justice Department today filed a lawsuit in U.S. District Court in Norfolk, Va., on behalf of U.S. Coast Guard Reserve member Paul Sutton against the city of Chesapeake alleging violations of the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA).
The complaint alleges that Sutton, a lieutenant in the Chesapeake Police Department (CPD), was denied reemployment in November 2007, after returning from active duty in the Coast Guard. Because the CPD denied Sutton’s timely request for reemployment, he extended his Coast Guard tour of duty until December 2009. Sutton filed a complaint with the Labor Department’s Veterans’ Employment and Training Service which investigated, determined the claim had merit and referred the matter to the Justice Department. In the suit, the Justice Department seeks reemployment for Sutton, as well as payment for his lost wages and benefits suffered by reason of Chesapeake’s failure or refusal to comply with USERRA.
"The Department is committed to vigorously enforcing federal laws that protect the employment rights of our service members," said Loretta King, Acting Assistant Attorney General for the Civil Rights Division. "Cases like this, on behalf of a service member who was not promptly reemployed following military service, further reinforce that commitment."
Subject to certain limitations, USERRA requires that individuals who leave their jobs to serve in the U.S. military be promptly reemployed by their civilian employers in the same positions, or in comparable positions, as the positions that they would have held had they not left to serve in the military. USERRA also requires that civilian employers reemploy returning service members in positions of like pay, status and benefits to the positions the service members would have had if they had been continuously employed by their civilian employers.
The Civil Rights Division has given a high priority to the enforcement of service members’ rights under USERRA. This is the eleventh USERRA suit the Civil Rights Division has filed this year on behalf of service members. Please visit http://www.servicemembers.gov and http://www.usdoj.gov/crt/emp for more information.
Former Velda City, Missouri, Reserve Police Officer Sentenced <br /> for Civil Rights and Obstruction ChargesRead the Press Release
A former Velda City, Mo., auxiliary reserve police officer was sentenced today to 19 years and seven months in prison, three years of supervised release and a special assessment for violating the federal civil rights of a woman he sexually assaulted during a traffic stop and for concealing evidence of his crime from federal investigators.
According to facts presented in court, in July 2006, Joe Ernest Phillips, 38, then an auxiliary reserve police officer for the Velda City Police Department, sexually assaulted a woman while acting under color of law and deprived her of her civil rights. While on-duty in a marked patrol car, Phillips admitted he pulled the female motorist over and searched her purse and the interior and trunk of her car. After completing his search, Phillips instructed the victim to follow him in her car to a poorly lit and isolated parking lot where he sexually assaulted her.
Phillips also admitted that after the sexual assault, he repeatedly lied to the FBI during its inquiry and concealed evidence in an effort to thwart the federal investigation into his crime.
"This officer abused his authority and violated the rights of the victim with a despicable act," said Acting Assistant Attorney General Loretta King of the Civil Rights Division. "The work of our nation’s law enforcement officers must always be guided by adherence to the laws they are sworn to uphold. If an officer violates the rights of a person the Justice Department will vigorously investigate and prosecute to the fullest extent of the law."
The case was investigated by the FBI’s St. Louis Division and is being prosecuted by Trial Attorneys Eric L. Gibson and Avner Shapiro of the Justice Department’s Civil Rights Division and Assistant U.S. Attorney Hal Goldsmith.
Five Defendants Sentenced in Puerto Rico Corruption CaseRead the Press Release
Five defendants were sentenced this week for their participation in a corruption scheme involving the 2000 resident commissioner and 2004 gubernatorial campaigns of a former governor of Puerto Rico, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division and U.S. Attorney for the District of Puerto Rico Rosa Emilia Rodríguez-Vélez. The defendants were sentenced in U.S. District Court for the District of Puerto Rico by U.S. District Court Judge Paul J. Barbadoro, sitting by designation from the District of New Hampshire.
Former Puerto Rico Governor Aníbal Acevedo Vilá , 47, and Luisa Inclán Bird, 49, a legal advisor for the San Juan resident commissioner office when Acevedo Vilá served as resident commissioner, were acquitted on March 20, 2009, of all criminal charges related to the scheme.
The five defendants sentenced were:
- Jorge Velasco Mella, 39, of San Juan, Puerto Rico, who was sentenced on May 21, 2009, to three years probation, including 12 months of home detention. Velasco Mella pleaded guilty on Jan. 23, 2009, to one count of conspiracy to violate the Federal Election Campaign Act (FECA). According to plea documents, Velasco Mella worked in the San Juan resident commissioner’s office and assisted in handling campaign contributions.
- Ramón Velasco Escardille, 50, of San Juan who was sentenced on May 21, 2009, to three years probation, including 12 months of home detention. Velasco Escardille pleaded guilty on Jan. 23, 2009, to one count conspiracy to violate FECA. According to plea documents, Velasco Escardille was the treasurer for the resident commissioner campaign.
- Edwin Colón Rodríguez, 36, of Arecibo, Puerto Rico, who was sentenced on May 22, 2009, to 12 months and one day in prison, and three years supervised release following the prison term. Colón Rodríguez pleaded guilty on Jan. 23, 2009, to one count of making a false statement to the Federal Election Commission (FEC). According to plea documents, Colón Rodríguez was the assistant treasurer for the resident commissioner campaign.
- Jos é Gonz á lez Freyre, 56, of Guaynabo, Puerto Rico, who was sentenced on May 22, 2009, to one year probation, including six months of home detention, and a $5,000 fine. Gonz á lez Freyre pleaded guilty on Feb. 2, 2009, to one count of making a false statement to the FBI and the Internal Revenue Service (IRS). According to plea documents, Gonz á lez Freyre is the owner of Pan American Grain, a Puerto Rico agricultural company that contributed at least $50,000 to the former governor’s 2004 gubernatorial campaign.
- Miguel Nazario Franco, 62, of San Juan, who was sentenced on May 22, 2009, to one year probation, including six months of home detention, and a $5,000 fine. Nazario Franco pleaded guilty on Jan. 23, 2009, to one count of misprision of a felony. Nazario Franco, a businessman, volunteered in the finance department of the former governor’s 2004 gubernatorial campaign.
According to plea documents, Velasco Mella, Velasco Escardille and Col ó n Rodriguez admitted to participating in a scheme to defraud the United States and violate various FECA provisions by having Puerto Rico and Philadelphia-area businessmen make illegal and unreported contributions to pay off large and unreported debts stemming from the former governor’s campaign in 2000 for resident commissioner of the Commonwealth of Puerto Rico. The defendants admitted that the scheme involved soliciting, accepting, and then reimbursing illegal conduit contributions from the candidate’s family members and staff. Conduit contributions are illegal campaign contributions made by one person in the name of another person. According to plea documents, payments were made principally to the campaign’s public relations firm, Lopito, Ileana and Howie. Also, the illegal actions continued into 2003, due to the significant debt accumulated by the campaign, some of which was also concealed from the FEC and the public.
According to court documents, the scheme continued through unreported fundraising and the making of unrecorded vendor payments for the former governor’s 2004 gubernatorial campaign in order to raise and spend far more than the limited amount that Puerto Rican law permitted. According to court documents and the statements of the defendants who pleaded guilty, Puerto Rico businessmen, described in court documents as collaborators, used large amounts of money from their personal or corporate funds to pay for large and unreported debts to the campaign’s public relations firm. Large sums of cash were also used to keep contributions and vendor payments concealed from the Puerto Rico Treasury Department and the public. According to court documents, for many of the collaborator payments, the public relations company created fake invoices to make the payments appear to be legitimate business expenses of the collaborators’ companies. As Finance Director for the 2004 gubernatorial campaign, Nazario Franco became aware of this illegal activity and pleaded guilty for failing to report it. Gonz á lez Freyre pleaded guilty to making a false statement during the federal investigation into his illegal $50,000 contribution to the 2004 gubernatorial campaign.
A total of eight defendants have pleaded guilty in the ongoing corruption investigation in the District of Puerto Rico. In addition to the five defendants sentenced this week, the others are Salvatore Avanzato, Marvin Block and Ricardo Colón.
This case is being prosecuted by First Assistant U.S. Attorney María A. Domínguez and Assistant U.S. Attorneys Ernesto López, Timothy Henwood and Jacqueline Novas of the District of Puerto Rico, and Trial Attorneys Peter M. Koski and Ethan H. Levisohn of the Criminal Division’s Public Integrity Section, which is headed by Chief William M. Welch, II. The case is being investigated by the FBI and IRS, with assistance and cooperation from the Office of the Comptroller of Puerto Rico.
Assistant Attorney General Tony West Announces<br /> New Members to Civil Divisions Senior LeadershipRead the Press Release
WASHINGTON – Tony West, Assistant Attorney General (AAG) for the Justice Department’s Civil Division, today announced four new members of the Division’s leadership team. AAG West announced the appointment of Ann Ravel to be Deputy Assistant Attorney General (DAAG) for the Torts Branch and the Office of Consumer Litigation, and Juan Osuna to be DAAG for the Office of Immigration Litigation. Mr. West also announced that Brian Martinez will serve as the AAG’s Chief of Staff. and Geoffrey Graber as Counsel to the Assistant Attorney General.
"We are fortunate to have these talented and committed individuals joining the Justice Department’s Civil Division," said West. "I am confident that their service will meet the highest standards of the Division."
Ann Ravel, the new Deputy Assistant Attorney General for the Torts Branch and the Office of Consumer Litigation, previously served as the County Counsel of Santa Clara County, Calif. She has received numerous awards including the 2007 Public Lawyer of the Year award from the California State Bar, the American Bar Association’s Award for State and Local Government Law Advocacy presented in 2002 and the 2001 Professional Lawyer of the Year Award presented by the Santa Clara County Bar Association.
The Division’s Torts Branch represents the government in lawsuits where monetary judgments are sought for damages resulting from alleged negligent or wrongful acts. The Torts Branch also handles actions involving injury or damage to government property.
The Office of Consumer Litigation is responsible for criminal and civil litigation and related matters arising under federal statutes administered by the Food and Drug Administration, the Consumer Product Safety Commission, the Federal Trade Commission and the National Highway Traffic Safety Administration.
Prior to his appointment as DAAG for the Office of Immigration Litigation (OIL), Juan Osuna was chairman of the Board of Immigration Appeals, the highest administrative body for interpreting and applying U.S. immigration laws. Mr. Osuna received a bachelor of arts degree in 1985 from George Washington University, a juris doctorate in 1988 from the Washington College of Law at American University and a master of arts degree in law and international affairs in 1989 from American University’s School of International Service. As chairman of the Board of Immigration Appeals, Mr. Osuna guided the Board through some of the more challenging times in its history, putting in place a number of initiatives that substantially improved the Board’s operations, protecting due process while promoting efficiency.
OIL has jurisdiction over all civil immigration litigation, and is responsible for the nationwide coordination of immigration matters before the federal district courts and circuit courts of appeals.
Brian Martinez, prior to joining the Division as its Chief of Staff, served as an associate in the Litigation Department in the San Francisco Office of Morrison and Foerster. Before joining the law firm, he served as a law clerk for the Honorable Thelton E. Henderson, Senior U.S. District Court Judge for the Northern District of California. Mr. Martinez received his Bachelor of Arts degree in Political Science from Stanford University in 1997. He received his law degree from Stanford Law School in 2002. Prior to law school, he worked for two years in the Civil Rights Division of the Justice Department.
Geoffrey Graber, Counsel to the Assistant Attorney General, served as an associate in the Litigation Department of Morrison & Foerster in San Francisco prior to coming to the Justice Department. Mr. Graber’s private practice encompassed consumer class actions, securities fraud, product defects, tort and contract law, as well as general civil litigation. Mr. Graber graduated in 2000 from the University of Southern California Law School, where he served as the Managing Articles Editor for the Southern California Law Review. He received his bachelor of arts degree in 1995 from Vassar College.
Ms. Ravel and Mr. Osuna join Beth Brinkmann, the DAAG for the Division’s Appellate Branch, Ian Gershengorn, DAAG for the Federal Programs Branch and Michael Hertz, the Commercial Litigation Branch DAAG, to round out the Civil Division’s senior team.
Virginia Resident Pleads Guilty to Conspiring to Defraud the U.S. NavyRead the Press Release
WASHINGTON — A U.S. Navy subcontractor from Virginia has pleaded guilty to conspiring to defraud the Navy in connection with contracts for fabricated metal to be used for the repair and maintenance of elevator equipment on Navy aircraft carriers and support vessels, the Department of Justice announced today. The charge is the first to arise out of the Department’s ongoing antitrust investigation into the sales of fabricated metal products and other materials to the U.S. Navy.
Todd M. Mosiman, a resident of Virginia Beach, Va., pleaded guilty in U.S. District Court in Norfolk, Va., to conspiring with another individual to steer more than $167,000 in contracts to Mosiman’s now-defunct Chesapeake-based company from at least June 2004 to at least March 2005. The other individual was an employee of a Virginia-based company that served as the Navy’s prime contractor for its elevator equipment repair and maintenance contracts.
Among its other responsibilities, the prime contractor assisted the Navy in its procurement of the materials, including fabricated metal products, needed to repair and maintain the elevator equipment. The co-conspirator was responsible for determining which vendor the prime contractor would recommend to the Navy for the fabricated metal contracts. The co-conspirator was also a secret co-owner of Mosiman’s company and shared the proceeds from the fabricated metal contracts.
Mosiman and the co-conspirator carried out the conspiracy by:
- Creating the vendor;
- Agreeing to conceal the co-conspirator’s involvement with the vendor from the prime contractor and the U.S. Navy;
- Assisting the vendor in winning contracts for fabricated metal; and
- Having joint access to the vendor’s bank account, including proceeds from sales to the U.S. Navy.
"Taxpayers ultimately pay the price for those who circumvent the Navy’s competitive procurement process for personal gain," said Christine A. Varney, Assistant Attorney General in charge of the Department’s Antitrust Division. "These fraudulent schemes are particularly egregious during wartime."
Mosiman has entered into a plea agreement with the United States that requires him to cooperate with the Department’s ongoing investigation. Mosiman’s sentence will be determined by the court. A sentencing date has yet to be scheduled by the court.
Mosiman is charged with one count of conspiracy to defraud, which carries a maximum sentence of five years of imprisonment and a maximum fine of $250,000. 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.
This action represents 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 Philadelphia Field Office, the U.S. Attorney’s Office in Norfolk, Va., the Department of Defense’s Defense Criminal Investigative Service and the Naval Criminal Investigative Service. Anyone with information concerning fraudulent behavior related to the sales of fabricated metal products and other materials to the U.S. Navy is urged to call the Antitrust Division’s Philadelphia Field Office at 215-597-7405 or the Defense Criminal Investigative Service’s Norfolk Office at 757-441-6067.
Two Former Military Officials Charged with Participating in Scheme to Steal Large Quantities of Fuel from U.S. Army in IraqRead the Press Release
WASHINGTON – A federal grand jury returned a superseding indictment today charging Robert Young, 56, a former captain in the U.S. Army, and Robert Jeffery, 55, a former master chief petty officer in the U.S. Navy, with conspiracy and theft of government property in connection with a scheme to steal large quantities of fuel from the U.S. Army in Iraq, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division and Acting U.S. Attorney Dana J. Boente for the Eastern District of Virginia.
According to the two-count superseding indictment, from October 2007 through May 2008, Young, Jeffery, and their co-conspirators, purportedly representing Department of Defense contractors in Iraq, used fraudulently obtained documents to enter the Victory Bulk Fuel Point (VBFP) in Camp Liberty, Iraq, and allegedly presented false fuel authorization forms to steal large quantities of aviation and diesel fuel from the VBFP for subsequent sale on the black market. The indictment alleges that Young initially served as an escort for the fuel trucks and subsequently played a managerial role in the retrieval of fuel. Jeffery allegedly served as an escort for the fuel trucks for several months and, like Young, illegally retrieved thousands of gallons of fuel from the VBFP.
According to the superseding indictment, Young and Jeffery are both U.S. citizens who, until their arrests in connection with this case, resided in the Philippines. In addition, according to court documents, the United States owns and operates the VBFP in support of Operation Iraqi Freedom. The VBFP supplies aviation fuel and diesel fuel to both military units and U.S. government contractors operating in and around the VBFP.
The conspiracy count carries a maximum penalty of five years in prison and a fine of the greater of $250,000 or twice the value gained or lost from the alleged scheme. The theft of government property count carries a maximum penalty of 10 years in prison and a fine of the greater of $250,000 or twice the value gained or lost from the alleged scheme.
In a related case, Lee William Dubois pleaded guilty on Oct. 7, 2008, to participating in a scheme to steal fuel worth approximately $39.6 million from the U.S. Army in Iraq. In his plea, Dubois admitted that he obtained government-issued common access cards for the drivers and escorts of the trucks and also presented false documents to the VBFP authorizing his co-conspirators to draw fuel. Dubois admitted that he and his co-conspirators stole approximately 10 million gallons of fuel, and that Dubois received at least $450,000 in personal profits from the subsequent sale of the fuel on the black market. Sentencing for Dubois is scheduled for June 18, 2009.
The case is being prosecuted by Special Assistant U.S. Attorney Steve Linick, Deputy Chief of the Criminal Division’s Fraud Section, and Fraud Section Trial Attorneys Andrew Gentin and Brigham Cannon. The investigation of this case was conducted by the U.S. Army Criminal Investigation Command, the Defense Criminal Investigative Service, the FBI and members of the National Procurement Fraud Task Force and the International Contract Corruption Task Force (ICCTF).
The National Procurement Fraud Task Force, created in October 2006 by the Department of Justice, was designed to promote the early detection, identification, prevention and prosecution of procurement fraud associated with the increase in government contracting activity for national security and other government programs. The ICCTF is a joint law enforcement agency task force that seeks to detect, investigate and dismantle corruption and contract fraud resulting from U.S. Overseas Contingency Operations, including in Afghanistan, Iraq and Kuwait.
An indictment is a formal accusation of criminal conduct, not evidence. A defendant is presumed innocent unless and until convicted through due process of law.
Texas-Based Regency Nursing and Rehabilitation Centers to Pay U.S. $4 Million to Resolve False Claims Act AllegationsRead the Press Release
WASHINGTON – Regency Nursing and Rehabilitation Centers Inc. nursing home chain will pay the United States $4 million to settle allegations that Regency submitted false claims to Medicare and the Texas Medicaid program, the Justice Department and the U.S. Attorney’s Office for the Southern District of Texas announced today. The Victoria, Texas-based chain currently owns and operates 24 nursing home facilities located through the state.
The False Claims Act settlement resolves allegations that Regency submitted claims for reimbursement to Medicare and Medicaid for rehabilitation and skilled nursing services that were not reimbursable because the nursing home residents were not qualified for the services, the services were not medically necessary, or they were not supported by adequate documentation.
"Nursing home providers participating in Medicare should be on notice that taxpayers will not absorb the costs of improper or false billings submitted to the government and that the Department of Justice will take action against them for submitting such claims," said Tony West, Assistant Attorney General for the Department’s Civil Division.
"With the number of Medicare and Medicaid beneficiaries increasing every year, we will take whatever action is necessary to make certain healthcare providers are reimbursed only for legitimate services provided to qualified beneficiaries," said Tim Johnson, Acting U.S. Attorney for the Southern District of Texas.
The case was investigated by the U.S. Department of Health and Human Services, Office of Inspector General; the Federal Bureau of Investigation; the Texas Health and Human Services Commission, Office of Inspector General; and was handled by the U.S. Attorney’s Office for the Southern District of Texas and the Civil Division of the Department of Justice.
Minnesota Hospitals to Pay U.S. $2.28 Million to Settle False Claims Act AllegationsRead the Press Release
WASHINGTON – Three HealthEast Care System hospitals have agreed to pay the United States $2.28 million to settle allegations that the health care facilities submitted false claims to Medicare, the Justice Department announced today. All three hospitals are located in the Minneapolis-St. Paul, Minn., area.
The settlement resolves allegations that the St. Paul-based hospitals overcharged Medicare from 2002 to 2007 by thousands of dollars each time they performed kyphoplasty, a minimally-invasive procedure used to treat certain spinal fractures that often are due to osteoporosis. The procedure can be performed safely as an outpatient surgery, but the government contends that the HealthEast hospitals performed the procedure on an inpatient basis in order to increase their Medicare billings.
"The Department of Justice is committed to ensuring that Medicare dollars are spent appropriately, and we will prevent Medicare providers from profiteering by providing unnecessary services," said Tony West, Assistant Attorney General for the Department’s Civil Division.
The settlement with HealthEast follows the government’s May 2008 settlement with Medtronic Spine LLC, corporate successor to Kyphon Inc. Medtronic Spine paid $75 million to settle allegations that the company defrauded Medicare by counseling hospital providers to perform kyphoplasty procedures as an inpatient procedure even though the minimally-invasive procedure should have been done in many cases as an outpatient procedure.
"By keeping patients overnight, hospitals could seek greater reimbursement from Medicare and make much larger profits on kyphoplasty," said Kathleen Mehltretter, Acting U.S. Attorney for the Western District of New York in Buffalo.
St. Joseph’s Hospital, St. John’s Hospital and Woodwinds Hospital – all part of the HealthEast Care System – are the first hospitals to settle Medicare fraud allegations related to kyphoplasty claims. The hospitals previously paid $1.45 million after determining through a self-audit that they had overbilled Medicare for inpatient kyphoplasty claims that should have been billed as outpatient procedures. This amount has been credited against the total settlement of $2.28 million.
The qui tam or whistleblower lawsuit against the HealthEast hospitals was brought under the False Claims Act, which permits private citizens to bring lawsuits on behalf of the United States and receive a portion of the proceeds of any settlement or judgment awarded against a defendant. The lawsuit was filed in 2008 in federal district court in Buffalo, N.Y. by Craig Patrick and Charles Bates. Mr. Patrick of Hudson, Wis., is a former reimbursement manager for Kyphon, and Mr. Bates was formerly a regional sales manager for Kyphon in Birmingham, Ala.
The settlement with the HealthEast hospitals was the result of a coordinated effort by the U.S. Attorney’s Office for the Western District of New York, with assistance from the Commercial Litigation Branch of the Justice Department’s Civil Division, and the Department of Health and Human Services’ Office of Inspector General and Office of Counsel to the Inspector General.
Maine Department of Education to Pay United States $1.5 Million <br /> to Settle False Claims Involving Migrant Education ProgramRead the Press Release
The Maine Department of Education (MDE) has agreed to pay the United States $1.5 million to settle allegations that it submitted false information to the U.S. Department of Education regarding the state education agency’s eligibility to receive federal funds under the Migrant Education Program.
Under the Migrant Education Program, the U.S. Department of Education provides funds to states and territories to assist state education agencies in providing appropriate educational services that address the special needs of migrant children. The regulations governing the Migrant Education Program enumerate specific criteria for state education agencies to use in identifying migratory children. The states and territories are responsible for providing to the U.S. Department of Education an accurate count of eligible migratory children residing within the State or territory.
The United States alleges the MDE, Portland Public Schools, Maine Administrative School District #14 and the Maine Family Resource Center Inc., a non-profit corporation responsible for identifying and servicing migrant children residing in much of the state of Maine, falsely represented the number of eligible migratory children residing within the state for fiscal years 2002, 2003 and 2004. Based on the false child counts reported by the MDE to the U.S. Department of Education, the defendants received federal funds to which they were not entitled. The United States’ amended complaint was filed in the U.S. District Court for the District of Maine.
"Today’s settlement is an example of the Justice Department’s work in protecting federal taxpayers’ dollars and ensuring that federal monies are used for their intended purposes," said Tony West, Assistant Attorney General for the Department's Civil Division.
This settlement resulted from collaborative efforts by the Office of the U.S. Attorney for District of Maine; the U.S. Department of Education, Office of Inspector General; U.S. Department of Education, Office of General Counsel; and the Civil Division of the Department of Justice.
Justice Department Files Lawsuit Against<br /> the City of Marion, Arkansas, Alleging Race DiscriminationRead the Press Release
The Department has filed a complaint in U.S. District Court in Arkansas against the City of Marion alleging it subjected Stacy D. Allen, an African-American and a former City part-time patrol officer, to discrimination on the basis of his race when he was not selected for either of two full-time patrol officer positions in the Marion Police Department.
The complaint alleges that Marion had a history of placing the most senior part-time patrol officer in a full-time officer position when it became available, except when Allen should have been selected based on seniority. The complaint seeks remedial relief for Allen, including back pay with interest, and compensatory damages. Allen is currently employed as a full-time police officer with the West Memphis, Ark., Police Department.
"The Justice Department is committed to the vigorous enforcement of all federal civil rights laws under its jurisdiction, including Title VII’s prohibition of discrimination in employment on the basis of race, color, sex, national origin and religion," said Loretta King, Acting Assistant Attorney General of the Civil Rights Division.
Please visit http://www.usdoj.gov/crt for additional information about the Civil Rights Division.
Former Ft. Campbell Soldier Convicted on Charges Related to Deaths of Iraqi CiviliansRead the Press Release
WASHINGTON – A federal jury that convicted Steven D. Green, a former Ft. Campbell, Ky., soldier of charges arising out of the rape of a 14-year-old Iraqi girl and the murder of the girl and her family today said it was unable to reach a unanimous verdict on whether the defendant should be sentenced to death. Because the jury did not unanimously reach a decision on the death penalty, U.S. District Judge Thomas B. Russell will sentence Green to life without parole, Assistant Attorney General Lanny A. Breuer of the Criminal Division and Acting U.S. Attorney Candace G. Hill of the Western District of Kentucky announced.
Judge Russell is scheduled to formally sentence Green on September 4, 2009.
Green, 24, was convicted by the federal jury on May 7, 2009, in Louisville, Ky., on all charged counts, including premeditated murder, aggravated sexual abuse, felony murder, conspiracy to commit murder, conspiracy to commit aggravated sexual abuse, use of firearms during the commission of violent crimes and obstruction of justice. Green was indicted by a federal grand jury on Nov. 2, 2006.
Green was charged with the crimes following an incident that occurred on March 12, 2006, in and around Mahmoudiyah, Iraq. According to evidence presented at trial, while manning a military checkpoint, Green and other fellow soldiers discussed raping and killing Iraqis. Trial evidence showed that Green and others then took off their uniforms, put on black clothing, left their post and forced their way into the nearby home of the Al-Janabi family. Evidence presented at trial proved that Green then took the mother, father and six-year-old into a bedroom where he shot and killed them. In the living room, Green and the other soldiers raped the 14-year-old and then Green repeatedly shot her in the face and set her body on fire. Green then tried to blow up the house, according to trial evidence, after which the soldiers returned to their checkpoint. After committing the rape and murders, trial testimony revealed that Green bragged to others that the experience was "awesome."
Green was discharged from the U.S. Army in May 2006 and was prosecuted in U.S. District Court under the Military Extraterritorial Jurisdiction Act (MEJA), a statute that gives U.S. courts jurisdiction to prosecute crimes committed outside the United States by, among others, persons who served with the armed forces but who are no longer subject to military prosecution. Green’s co-conspirators were prosecuted by military authorities under the Uniform Code of Military Justice. Green, formerly stationed at Ft. Campbell and deployed to Iraq while serving with the 101st Airborne Division of the U.S. Army, was arrested by the FBI on June 30, 2006, on federal charges of murder and rape based on MEJA.
The case was investigated by the FBI and the U.S. Army Criminal Investigation Division. The case was prosecuted by Assistant U.S. Attorneys Marisa Ford and Jim Lesousky of the U.S. Attorney’s Office in the Western District of Kentucky and Trial Attorney Brian Skaret of the Criminal Division’s Domestic Security Section.
Accused East Africa Embassy Bomber Held at Guantanamo Bay to Be Prosecuted in U.S. Federal CourtRead the Press Release
Ahmed Khalfan Ghailani, a Tanzanian national who has been held at the Guantanamo Bay detention facility since September 2006, will be prosecuted in federal court in the United States pursuant to the March 12, 2001 superseding indictment currently pending against him in the Southern District of New York.
In accordance with the President’s Jan. 22, 2009 Executive Order, which called for a review of all Guantanamo detainees and the closure of the Guantanamo Bay detention facility within a year, the interagency Guantanamo Review Task Force conducted a thorough review of Ghailani’s case. As a result of that review, Ghailani’s case was referred to the Justice Department for prosecution pursuant to the superseding indictment against him in the Southern District of New York.
"By prosecuting Ahmed Ghailani in federal court, we will ensure that he finally answers for his alleged role in the bombing of our embassies in Tanzania and Kenya," said Attorney General Eric Holder. "This administration is committed to keeping the American people safe and upholding the rule of law, and by closing Guantanamo and bringing terrorists housed there to justice we will make our nation stronger and safer."
Ghailani was first indicted on Dec. 16, 1998, by a federal grand jury in the Southern District of New York for conspiring with Osama bin Laden and other members of al-Qaeda to kill Americans overseas and for his role in the Aug. 7, 1998, bombing of the U.S. Embassy in Dar es Salam, Tanzania, which killed at least eleven people and caused injuries to at least 85 people.
Ghailani has since been charged in several superseding indictments in the Southern District of New York. He currently stands accused in a March 12, 2001, superseding indictment with 286 different counts, including charges related to his role in the murder of more than 200 people in the 1998 bombings of the U.S. Embassies in Tanzania and Nairobi, Kenya, as well as his participation in an al-Qaeda conspiracy to murder, bomb, and maim U.S. civilians anywhere in the world.
Among other things, the superseding indictment alleges that Ghailani assisted in the purchase of the Nissan truck as well as the oxygen and acetylene tanks that were used in the bombing of the U.S. Embassy in Tanzania. He is further alleged to have participated in loading boxes of TNT, cylinder tanks, batteries, detonators, fertilizer and sand bags into the back of the truck in the weeks immediately before the bombing. Ghailani departed Africa for Pakistan the night before the bombing.
Ghailani was captured in July 2004. In September 2006, he and several other "high value detainees" were transferred to Guantanamo Bay. Ghailani has remained in Defense Department custody at Guantanamo Bay since that time.
On March 31, 2008, the Office of the Chief Prosecutor of the Military Commissions swore charges against Ghailani under the Military Commissions Act for his alleged role in the 1998 attack on the U.S. Embassy in Tanzania and for his alleged service to al-Qaeda after the bombing, including serving as a document forger, physical trainer at an al-Qaeda camp, and as a bodyguard for Osama bin Laden.
Ghailani was charged with the following substantive offenses: murder in violation of the Law of War, murder of protected persons, attacking civilians, attacking civilian objects, intentionally causing serious bodily injury, and destruction of property in violation of the Law of War and Terrorism. He was also charged with conspiracy to commit all of the above offenses, as well as providing material support to terrorism. On Oct. 3, 2008, these charges were referred to trial by military commission.
In January 2009, a military commissions judge issued a stay in the military commission trial involving Ghailani. The Office of the Chief Prosecutor of the Military Commissions recently filed a motion seeking an additional 120-day continuance in Ghailani’s military commissions case.
The public is reminded that the charges contained in a criminal indictment are mere allegations and each defendant is presumed innocent unless and until convicted in a court of law.
Minneapolis Man Pleads Guilty to Conspiracy <br /> to Provide Material Support to Al-QaedaRead the Press Release
Mohammed Abdullah Warsame, a 35-year-old resident of Minneapolis, has pleaded guilty to one count of conspiring to provide material support and resources to al-Qaeda
Warsame, a naturalized Canadian citizen of Somali descent, entered his plea of guilty this afternoon before U.S. District Judge John R. Tunheim in federal court in Minneapolis. At sentencing, which was set for 1:30 pm on July 9, 2009, Warsame faces a statutory maximum sentence of 15 years imprisonment and a $250,000 fine. He has agreed to be removed to Canada upon completion of his criminal sentence.
Warsame was charged with one count of conspiracy to provide material support to al-Qaeda in a Jan. 20, 2004, indictment returned in the District of Minnesota. A June 21, 2005, superseding indictment charged Warsame with one count of conspiracy to provide material support to al-Qaeda, one count of providing material support to al-Qaeda, and three counts of making false statements to the FBI. Warsame today pleaded guilty to count one of the superseding indictment. The government has agreed to dismiss the remaining charges.
According to the plea agreement, from about March 2000 through at least December 2003, Warsame conspired with others to provide material support to al-Qaeda in the form of personnel, training and currency.
Specifically, in March of 2000, Warsame traveled to Afghanistan where he attended an al-Qaeda training camp outside Kabul. In the summer of 2000, he then traveled to the al Faruq training camp, where he received further training and met Osama Bin Laden. Warsame subsequently worked at an al-Qaeda guesthouse and clinic.
According to the plea agreement, in late March 2001, Warsame traveled from Pakistan via London to Canada. After leaving Pakistan, Warsame established email contacts with several al-Qaeda associates that he had met in Afghanistan. In addition, he sent money to one of his former training camp commanders.
Warsame then relocated to Minneapolis. Throughout 2002 and 2003, he continued to exchange email messages with, and provide information to, several individuals associated with al-Qaeda, according to the plea agreement.
"The many agents, analysts and prosecutors who helped bring about today’s guilty plea -- after years of investigation and extensive pre-trial litigation -- deserve special thanks for their efforts," said Assistant Attorney General Kris. "This case serves as a reminder of the continuing threats we face as a nation and our resolve to meet those threats."
The case is the result of an investigation by the Federal Bureau of Investigation Joint Terrorism Task Force. The FBI Joint Terrorism Task Force (JTTF) is a multi agency effort combining the resources of federal, state and local law enforcement. In addition to the FBI, the investigation was conducted with the assistance of the U.S. Department of Homeland Security, the U.S. Immigration and Customs Enforcement (ICE), the U.S. Marshals Service, the Minneapolis Police Department, the St. Paul Police Department, the Hennepin County Sheriff’s Office, and the Minnesota Department of Public Safety. In addition to those agencies, the JTTF in Minneapolis includes representatives of the Minnesota Department of Homeland Security, the Ramsey County Sheriff’s Office, the U.S. Secret Service, the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives, the Minneapolis/St. Paul Airport Police, the Transportation Safety Administration, the Federal Air Marshals, the Bloomington Police Department, the U.S. Department of Agriculture and the U.S. Postal Inspection Service.
The case is being prosecuted by Assistant U.S. Attorney W. Anders Folk, of the U.S. Attorney’s Office for the District of Minnesota, and Trial Attorney Joseph N. Kaster from the Counterrrorism Section of the Justice Department’s National Security Division.
Justice Department Resolves Lawsuit Alleging Disability-Based Housing Discrimination at Four Multifamily Housing Complexes in Spokane County, WashingtonRead the Press Release
The Department announced today a settlement of a lawsuit alleging discrimination on the basis of disability in the design and construction of four multifamily housing complexes in the Spokane, Wash., area in violation of the federal Fair Housing Act.
Under the settlement, which must still be approved by the U.S. District Court for the Eastern District of Washington, the defendants will pay all costs related to making the apartment complexes accessible to persons with disabilities and will pay $120,000 to compensate individuals harmed by the inaccessible housing. The developer will pay a $10,000 civil penalty to vindicate the public interest and most of the defendants will undergo training on the requirements of the Fair Housing Act. The defendants include developer Lanzce G. Douglass and companies owned and controlled by him; Beverly Neraas, as representative of the estate of the late Spokane architect Donald E. Neraas; architect Ralph W. Hoover; Independent Home Designs Inc.; the engineering firm J. R. Bonnett Engineering Inc.; and engineer Gary S. Nelson.
"This settlement agreement makes clear that the federal government takes seriously accessibility requirements for multifamily housing," said Loretta King, Acting Assistant Attorney General for the Justice Department’s Civil Rights Division.
"Accessible multifamily housing substantially improves the quality of life for many persons with disabilities in the Spokane area," said James A. McDevitt, United States Attorney for the Eastern District of Washington. "This settlement assures that these multifamily housing complexes will be modified to comply with the Fair Housing Act."
The following four complexes in Spokane will be retrofitted as a result of the settlement:
- The Rock Creek Apartments, East Sitka Avenue and North Nevada Street
- The Prairie Hills Apartments, Lincoln Road
- The Granite Court Apartments, East 4th Avenue
- The Hilby Station Apartments, South Palouse Highway #4
The retrofitting includes modifying walkways to eliminate excess slopes and level changes, providing accessible curb ramps, and parking and routes to site amenities, such as clubhouses, pools, mailboxes and trash facilities. The settlement also provides for the replacement of inaccessible knob door hardware with levers, the widening of inaccessible doorways, and the reconfiguration of bathrooms and kitchens to accommodate persons who use wheelchairs.
The Fair Housing Act prohibits discrimination in housing based on race, color, religion, national origin, sex, disability and familial status. Among other things, the Act requires that new multifamily housing development be designed and constructed with basic accessibility features, including accessible common and public use areas, accessible routes to and through apartments, doors wide enough for wheelchair users, kitchens and bathrooms with sufficient maneuvering space for wheelchair users, outlets and environmental controls in accessible locations and bathrooms with reinforcements for grab bars.
Persons who believe they may have been harmed by the lack of accessible housing at one of the apartment complexes involved in this matter should contact the Justice Department at 1-800-896-7743. Please visit www.usdoj.gov/crt for more information about the Civil Rights Division and the laws it enforces. Individuals who believe that they may have been victims of housing discrimination can call the Housing Discrimination Tip Line at 1-800-896-7743, email the Justice Department at [email protected], or contact the U.S. Department of Housing and Urban Development at 1-800-669-9777.
Iowa Man Pleads Guilty to Possessing Obscene Visual Representations <br /> of the Sexual Abuse of ChildrenRead the Press Release
Christopher Handley, 39, of Glenwood, Iowa, pleaded guilty today in Des Moines, Iowa, to possessing obscene visual representations of the sexual abuse of children and mailing obscene material.
According to court documents, in May 2006, U.S. Immigration and Customs Enforcement (ICE) intercepted a mail package coming into the United States from Japan that was addressed to Handley. Inside the package was obscene material, including books containing visual representations of the sexual abuse of children, specifically Japanese manga drawings of minor females being sexually abused by adult males and animals. Pursuant to a search warrant, the U.S. Postal Inspection Service (USPIS) searched and seized additional obscene drawings of the sexual abuse of children at Handley’s residence in Glenwood. Handley was indicted by a grand jury sitting in the Southern District of Iowa in May 2007.
Pursuant to his plea agreement, Handley today pleaded guilty to one count of possessing obscene visual representations of the sexual abuse of children in violation of Title 18, United States Code, Section 1466A(b)(1), which prohibits the possession of any type of visual depiction, including a drawing, cartoon, sculpture, or painting, that depicts a minor engaging in sexually explicit conduct that is obscene.
Handley also agreed to plead guilty to one count of mailing obscene material and to forfeit all seized property. Handley faces a maximum of 15 years in prison, a maximum fine of $250,000, and a three-year term of supervised release.
The case is being prosecuted by Assistant U.S. Attorney Craig Peyton Gaumer and Elizabeth M. Yusi of the Criminal Division’s Child Exploitation and Obscenity Section. The case is being investigated by USPIS, ICE and the Iowa Division of Criminal Investigation. In addition, the FBI’s Language Services Section has provided significant assistance in the prosecution.
Attorney General Holder and HHS Secretary Sebelius Announce New Interagency Health Care Fraud Prevention & Enforcement Action TeamRead the Press Release
Attorney General Holder and Health and Human Services (HHS) Secretary Kathleen Sebelius today announced the creation of a new interagency effort, the Health Care Fraud Prevention and Enforcement Action Team (HEAT), to combat Medicare fraud. Holder and Sebelius also announced the expansion of Strike Force team operations to Detroit and Houston. Medicare Fraud Strike Forces, currently in operation in South Florida and Los Angeles, fight Medicare fraud on a targeted local level.
"With this announcement, we raise the stakes on health care fraud by launching a new effort with increased tools, resources and a sustained focus by senior-level leadership," said Attorney General Holder. "Every year we lose tens of billions of dollars in Medicare and Medicaid funds to fraud. Those billions represent health care dollars that could be spent on medicine, elder care or emergency room visits, but instead are wasted on greed. This is unacceptable, and the Justice Department is committed to working with the Department of Health and Human Services to eradicate it."
"Today, we are turning up the heat on perpetrators who steal from the taxpayers and threaten the future of Medicare and Medicaid," said Secretary Sebelius. "Most providers are doing the right thing and providing care with integrity. But we cannot and will not allow billions of dollars to be stolen from Medicare and Medicaid through fraud, waste and serious abuse of the system. It’s time to bring the fight against fraud into the 21st century and put the resources on the streets and out into the community to protect the American taxpayers and lower the cost of health care."
The HEAT team will include senior officials from DOJ and HHS who will build upon and strengthen existing programs to combat fraud while also investing new resources and technology to prevent fraud, waste and abuse before it happens. Efforts will include the expansion of joint DOJ-HHS Medicare Fraud Strike Force teams that have been successfully fighting fraud in South Florida and Los Angeles. Established in 2007, these teams have a proven record of success using a "data-driven" approach to identify unexplainable billing patterns and investigating these providers for possible fraudulent activity. The Medicare Fraud Strike Force team operating in South Florida has already convicted 146 defendants and secured $186 million in criminal fines and civil recoveries. After the success of operations in South Florida, the Medicare Fraud Strike Force expanded in May 2008 to phase two in Los Angeles, where 37 defendants have been charged with criminal health care fraud offenses. To date in the Los Angeles cases, more than $55 million has been ordered in restitution to the Medicare program.
"We know these strike forces work. I believe a targeted civil and criminal enforcement strategy in these locations will have a substantial impact on deterring fraud and abuse, protecting patients and the elderly from scams, and ensuring that taxpayer funds are not stolen," said Attorney General Holder.
Prevention is critical to reforming the system and the HEAT team will also focus critical resources on preventing fraud from occurring in the first place. The team will build on demonstration projects by the HHS Inspector General and the Centers for Medicare & Medicaid Services that focus on suppliers of durable medical equipment (DME). These projects increase site visits to potential suppliers to prevent imposters from posing as legitimate DME providers. Other initiatives include:
Increasing training for providers on Medicare compliance, offering providers the resources and the knowledge they need to help identify and prevent fraud.
Improving data sharing between the Centers for Medicare & Medicaid Services and law enforcement so we can identify patterns that lead to fraud.
Strengthening program integrity activities to monitor and ensure Medicare Parts C (Medicare Advantage plans) and D (prescription drug programs) compliance and enforcement.
The Attorney General and the HHS Secretary also called on the American people to visit a new Web site www.hhs.gov/stopmedicarefraud or call 1-800-HHS-TIPS (1-800-447-8477) to report suspected Medicare fraud.
"The American people are some of our best weapons in the fight against Medicare fraud," added Sebelius. "Fraud is happening in communities across the country right now and we need the American people to blow the whistle on thieves and criminals who are stealing from all of us."
Fraud prevention efforts are also strengthened in President Obama’s proposed Fiscal Year 2010 budget. The President’s budget invests $311 million – a 50 percent increase from 2009 funding – to strengthen program integrity activities within the Medicare and Medicaid programs. Combined, the anti-fraud efforts in the President’s budget could save $2.7 billion over five years by improving oversight and stopping fraud in the Medicare and Medicaid programs, including the Medicare Advantage and Medicare prescription drug programs.
Related Materials:
Stop Medicare Fraud Web Site
President of Company That Illegally Imported Catfish Sentenced to More Than Five Years in Federal PrisonRead the Press Release
WASHINGTON—A Virginia man has been sentenced to 63 months in federal prison for participating in a conspiracy that led to more than 10 million pounds of frozen catfish being imported from Vietnam, but fraudulently labeled and sold in the United States as sole, grouper and other species, the Justice Department announced. This sentence is one of the longest imposed by a federal judge for falsely labeling seafood.
Peter Xuong Lam of Fairfax, Va., who was the president of Virginia Star Seafood Corp., was sentenced late yesterday afternoon by U.S. District Judge Philip S. Gutierrez for the Central District of California. In addition to the prison term, Judge Gutierrez ordered Lam to forfeit more than $12 million to the government for anti-dumping duties avoided.
A second man involved in the scheme, Arthur Yavelberg of Reston, Va., who was the president of Silver Seas, a Virginia-based fish importer, was also sentenced yesterday for his role in the conspiracy to import mislabeled fish to avoid federal tariffs. Judge Gutierrez sentenced Yavelberg to a one year period of probation.
The cases against Lam and Yavelberg are part of an ongoing prosecution of importers and seafood dealers who worked together to import catfish from Vietnam and sell frozen fillets that were falsely labeled as more desirable and more expensive fish.
Following a three-week trial, Lam was convicted last October of conspiring to import mislabeled fish in order to avoid federal import tariffs and three counts of dealing in fish that he knew had been imported contrary to law. At the same trial, Yavelberg was convicted of a misdemeanor conspiracy count.
Virginia Star and International Sea Products imported $15.5 million worth of catfish that was illegally labeled and imported as sole, grouper, flounder, snakehead, channa and conger pike (a type of eel). DNA tests revealed that the frozen fish was in fact Pangasius hypophthalmus, a fish in the catfish family marketed under approved trade names including swai or striped pangasius. An anti-dumping duty was placed on Pangasius hypophthalmus imports from Vietnam in January 2003 after a petition was filed by domestic catfish farmers, who alleged that this fish was being imported from Vietnam at less than fair market value. None of the species names used to label the imported fish are subject to any federal tariffs.
To date, a dozen individuals and companies have been convicted of criminal charges related to the scheme to avoid paying tariffs by falsely labeling fish for import and then selling it in the United States at below-market price. The organizer of the smuggling conspiracy, Henry Nguyen, remains a fugitive and is believed to be residing in Vietnam.
Major sentences for those involved include:
- David Wong: one year and a day in prison followed by one year of supervised release and a fine of $25,000.
- Tai Wai David Chu: two years probation to include six months of home detention and a fine of $3,000.
- Henry C.D. Yip: one year probation and a fine of $40,000.
- Dakon International: two years probation with a special condition of placing a public service advertisement and a fine of $100,000.
- True World Foods Inc.: forfeiture of $197,930 and a fine of $60,000.
- T.P. Company: one year probation with a special condition of placing a public service advertisement and a fine of $150,000.
The case was investigated by Special Agents of National Oceanic and Atmospheric Administration, Fisheries, Office of Law Enforcement; Food and Drug Administration’s Office of Criminal Investigations; and U.S. Immigration and Customs Enforcement. Senior Trial Attorney Elinor Colbourn and Assistant U.S. Attorney Joseph Johns, Chief of Environmental Crimes in the U.S. Attorney’s Office in Los Angeles, prosecuted the case.
Justice Department Sues Garner, North Carolina, forDisability DiscriminationRead the Press Release
The Department has filed suit against the town of Garner, N.C., and the town’s board of adjustment alleging that they violated the Fair Housing Act when they refused to allow up to eight men recovering from drug and alcohol addictions to live together as a reasonable accommodation for their disabilities.
The suit, filed in U.S. District Court in Raleigh, also alleges that the defendants have engaged in a denial of rights to a group of persons or a pattern or practice of discrimination by failing or refusing to recognize their obligation to make reasonable accommodations. The home is chartered by Oxford House Inc., a non-profit organization that assists in the development of self-governing houses in which persons in recovery support one another’s determination to remain sober. Garner permits up to six persons to live in the home, but has refused to consider requests by Oxford House Inc. to increase the number to eight.
"The Fair Housing Act requires jurisdictions to make reasonable accommodations in their rules when necessary to provide persons with disabilities an equal opportunity to housing. We will continue to enforce the Act vigorously," said Loretta King, Acting Assistant Attorney General for the Civil Rights Division.
"Enforcement of Fair Housing laws prohibiting discrimination against people with disabilities is a priority of the U.S. Attorney in Eastern North Carolina. These federal laws provide a vital tool in enabling disabled persons to have access to decent and affordable housing in our communities," said George E. B. Holding, U.S. Attorney for the Eastern District of North Carolina.
This lawsuit arose as a result of a complaint filed with the U.S. Department of Housing and Urban Development (HUD) by Oxford House. HUD conducted an investigation and referred the matter to the Justice Department.
The suit seeks monetary damages for the victims, a civil penalty and a court order requiring Garner to grant the requested accommodation and establish a procedure for considering future accommodation requests. The complaint is an allegation of unlawful conduct. The allegations must still be proven in federal court.
Fighting illegal housing discrimination is a top priority of the Justice Department. The Federal Fair Housing Act prohibits discrimination in housing on the basis of race, color, religion, sex, familial status, national origin and disability. Visit www.usdoj.gov/crt for more information about the Civil Rights Division and the laws it enforces is available. Additional information about the Fair Housing Act is also available at www.HUD.gov.
Justice Department Settles Lawsuit Against<br /> Wagner Industrial Electric Inc. to Enforce the <br /> Employment Rights of Indiana ReservistRead the Press Release
The Department has entered into a consent decree with Wagner Industrial Electric Inc. that, if approved by the court, will resolve the Department’s complaint the company failed to properly reemploy Indiana Army National Guard Reservist Kevin Stenger in violation of the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA).
The Department’s complaint, filed in February in U.S. District Court in Dayton, Ohio, alleges that Wagner violated USERRA by failing to reemploy Stenger in his foreman position following his return in January 2007 from a two-week required active duty military training program. The complaint alleges that, instead of reemploying Stenger in his foreman position, Wagner first demoted him and subsequently laid him off. Under the terms of the consent decree, Wagner is required to provide Stenger with $12,000 to compensate him for his lost wages.
USERRA was enacted in 1994 to protect service members from being disadvantaged in their civilian careers due to serving in the uniformed services. Subject to certain limitations, USERRA requires that service members who leave their jobs to serve in the U.S. military be timely reemployed by their civilian employers in the same position, or a comparable position, to the one that they would have held had they not left to serve. Servicemembers who believe their USERRA rights have been violated may file a complaint with the Labor Department and its Office of Veterans’ Employment and Training Services will investigate. After the investigation, service members have the right to request referral to the Justice Department for potential enforcement and initiation of a lawsuit.
"No person should lose his civilian job for choosing to serve in the military," said Loretta King, Acting Assistant Attorney General for the Civil Rights Division. "This settlement demonstrates again our commitment to vigorously enforcing federal laws that protect the employment rights of men and women serving in the military. We are pleased that Wagner has chosen to resolve this lawsuit and abide by the requirements of USERRA."
The Civil Rights Division has given a high priority to the enforcement of service members’ rights under USERRA. Additional information about USERRA can be found on the Justice Department Web sites: www.servicemembers.gov and www.usdoj.gov/crt/emp.
Georgia-Pacific Agrees to Perform Cleanup Activities at the Kalamazoo Superfund Site in MichiganRead the Press Release
WASHINGTON—Georgia-Pacific, a manufacturing company headquartered in Atlanta, has agreed to perform remedial work at an estimated cost of nearly $13 million to contain two former disposal areas within the Kalamazoo River Superfund site in Allegan and Kalamazoo Counties, Mich., the Justice Department and U.S. Environmental Protection Agency (EPA) announced today.
According to the settlement filed in U.S. District Court in Grand Rapids, Mich., Georgia-Pacific will design and construct a landfill cap at the Willow Boulevard/A-Site Landfill portion of the Superfund site. The company has also agreed to pay $225,509 for EPA’s past response costs and will pay EPA’s future costs related to this portion of the site.
"This excellent settlement ensures that Georgia-Pacific will perform necessary cleanup work within the Kalamazoo River site," said John C. Cruden, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. "This settlement represents another step in the overall cleanup of this environmentally significant region of the country."
"This settlement marks an important milestone in addressing the Willow Boulevard/A-Site Landfill," said EPA Region 5 Acting Regional Administrator Bharat Mathur.
The Allied Paper Inc.,/ Portage Creek/Kalamazoo River Superfund site consists of an 80-mile stretch of river, a three-mile segment of Portage Creek, a number of now-closed paper mill properties, and four landfills, including the Willow Boulevard/A-Site Landfill, which has historically been addressed as a single unit.
Georgia-Pacific currently owns the Willow Boulevard/A-Site Landfill portion of the Superfund site, which consists of two former disposal areas and adjacent impacted areas that include wetlands and woodlands. Under the terms of the agreement, Georgia-Pacific will consolidate PCB-contaminated material, design and install a permanent geotextile landfill cap across a 32-acre area, design and install a groundwater monitoring system and build long-term erosion control measures. Additionally, Georgia-Pacific will restore wetlands and shoreline habitat areas along the borders and next to the Willow Boulevard/A-Site Landfill.
Landfill design work will begin immediately following a comment period and court approval. On-site construction work is expected to begin by 2011. Currently, to prevent erosion of PCB-contaminated material into the Kalamazoo River, the Willow Boulevard/A-Site Landfill is covered in part by a geotextile membrane and sand. In addition, a sheet-pile wall borders the A-Site portion of the landfill.
The consent decree, lodged today in the U.S. District Court for the Western District of Michigan, 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 Web site at http://www.usdoj.gov/enrd/Consent_Decrees.html.
U.S. and 16 States Join Suits Against Pharmaceutical Giant, WyethRead the Press Release
WASHINGTON – The United States and 16 states have joined in two whistleblower suits filed in the District of Massachusetts against the drug manufacturer, Wyeth, alleging that the company knowingly failed to give the government the same discounts it provided to private purchasers of its drugs, as required by laws governing the Medicaid program. As a result, Wyeth allegedly avoided paying hundreds of millions in rebates due to state Medicaid programs for its drugs, Protonix Oral and Protonix IV. These drugs belong to a class of drugs known as proton pump inhibitors (PPI), which are used to suppress stomach acid.
Under the Medicaid Drug Rebate Program, drug manufacturers of brand name drugs (i.e. non-generic drugs) are required to report to the government the prices they charge their customers, including the "best price" offered for their drugs. They also are required to pay rebates to the state Medicaid programs that are calculated on any discounted prices that are offered. Congress created the Medicaid Drug Rebate Program in order to ensure that Medicaid, one of the largest purchasers of drugs in the United States and the nation’s provider of health insurance to the poor and the disabled, received the benefit of the same discounts offered to large commercial customers in the marketplace.
Between 2000 and 2006, Wyeth offered steep discounts to thousands of hospitals nationwide for Protonix Oral and Protonix IV under a pricing arrangement known as the "Protonix Performance Agreement." This pricing arrangement required that the hospitals purchase both drugs together under a so-called "bundled" arrangement and it offered them a steep discount for doing so. Wyeth did this in part to gain access to the far more lucrative retail outpatient market, intending that patients who used the intravenous version of Protonix in the hospital would later purchase Protonix Oral once they were discharged from the hospital. Under the Protonix Performance Agreement, hospitals that placed both products on their formularies and attained certain market share requirements were entitled to up to a 94% discount off the list price of Protonix Oral and up to 80% off the list price of Protonix IV. Although Wyeth was required under the Medicaid Drug Rebate Program to determine the effective prices paid by hospitals under this arrangement, and to pass along the benefit of the lowest prices to the state Medicaid programs, Wyeth allegedly failed to do so and therefore avoided paying hundreds of millions of dollars to Medicaid in quarterly rebates.
"Our complaint charges that Wyeth created the Protonix bundle so they could increase their market share at the expense of the Medicaid program -- a program to provide the least advantaged Americans with necessary medical care and services," said Tony West, Assistant Attorney General for the Civil Division. "By offering massive discounts to hospitals, but then hiding that information from the Medicaid program, we believe Wyeth caused Medicaid programs throughout the country to pay much more for these drugs than they should have."
The two separate civil False Claims Act suits – called qui tam actions – were filed against Wyeth and are pending in the District of Massachusetts. In addition to the United States, California, Delaware, the District of Columbia, Florida, Illinois, Indiana, Louisiana, Massachusetts, New York, Michigan, Nevada, New Hampshire, Tennessee, Texas, Virginia and Wisconsin also have intervened in the whistleblower suits against Wyeth.
"The best price reporting requirement is designed to assure that the nation’s healthcare programs for the poor – the Medicaid programs - are treated equally with drug companies’ best commercial customers," said Michael K. Loucks, Acting U.S. Attorney for the District of Massachusetts. "We seek through today’s suit to put the Medicaid programs on par with Wyeth’s best customers, as it had agreed."
The investigation was conducted by the Civil Division of the U.S. Department of Justice, the U.S. Attorney’s Office for the District of Massachusetts, and the Offices of Inspector General of the Department of Health and Human Services.
U.S. Court of Appeals for the Fifth Circuit Joins Other Circuits in Invalidating Tax Losses Claimed in Son of Boss Tax ShelterRead the Press Release
WASHINGTON - On May 15, 2009, the Fifth Circuit, in Klamath Strategic Investment Fund v. United States (No. 07-40861), affirmed the district court’s decision denying over $50 million in claimed tax losses arising from the taxpayers’ investment in a "Son of Boss (BLIPS)" tax shelter. Joining the majority of circuits which have ruled on the question, the Fifth Circuit held that "a lack of economic substance is sufficient to invalidate the transaction regardless of whether the taxpayer has motives other than tax avoidance," and concluded that "no reasonable possibility of profit existed" for the transaction in question here.
"We are pleased that the Fifth Circuit has joined all the other appellate courts in ruling that ‘Son of Boss’ tax deductions are not permissible, and we are also pleased that the court has recognized that determinations of this sort must be made on the objective evidence irrespective of the claimed motives of the individual investors," said John A. DiCicco, the Tax Division’s Acting Assistant Attorney General.
Members of U.S. Army Plead Guilty to Role in Scheme to Steal Equipment from the U.S. Military in IraqRead the Press Release
Elbert Westley George III, 36, a U.S. Army captain who was stationed in Iraq, pleaded guilty today to participating in a scheme to steal U.S. government equipment and sell it to a local Iraqi businessman. In a related case, Roy Greene Jr., a sergeant first class in the U.S. Army who was also in Iraq with George, pleaded guilty on May 13, 2009, to participating with George in the same scheme.
George, of Suffolk, Va., and Greene, 32, of Sylvester, Ga., entered their guilty pleas in U.S. District Court in Alexandria, Va., before U.S. District Court Judge Gerald Bruce Lee. Both men pleaded guilty to a one-count criminal information charging them with conspiracy to defraud the Department of Defense (DOD) and to commit theft of government property from the Defense Reutilization and Marketing Office (DRMO) located at Joint Base Balad in Balad, Iraq. According to plea documents, the United States owns and operates DRMO in support of Operation Iraqi Freedom. DRMO disposes of excess property received from the military services. DRMO inventory includes items such as air conditioners, generators, cars, trucks and trailers. The items are first offered for reutilization within DOD but they can also be donated to state or local governments, or to the Iraqi military. DRMO equipment can also be sold, with the proceeds from those sales returning to the federal government.
According to their plea agreements, George and Greene had logistics responsibilities for their unit and had the authority to check out equipment from DRMO to fulfill those responsibilities. In their pleas, both Greene and George admit that between December 2007 and June 2008, they abused that authority by stealing equipment from DRMO and selling it to a local Iraqi businessman. George and Greene admitted to stealing one bus, eight trucks, 19 generators, five trailers and several other items from DRMO. They admit to personally profiting at least $400,000 from their illegal sales.
At sentencing on July 17, 2009, George and Greene both face a maximum sentence of five years in prison and a $250,000 fine.
The case is being prosecuted by Deputy Chief Steve A. Linick and Trial Attorney Brigham Cannon of the Criminal Division's Fraud Section. The investigation of this case is being conducted by the Defense Criminal Investigative Service, FBI, Army Criminal Investigative Division, and members of the National Procurement Fraud Task Force and the International Contract Corruption Task Force (ICCTF). The National Procurement Fraud Task Force, created in October 2006 by the Department of Justice, was designed to promote the early detection, identification, prevention and prosecution of procurement fraud associated with the increase in government contracting activity for national security and other government programs. The ICCTF is a joint law enforcement agency task force that seeks to detect, investigate and dismantle corruption and contract fraud resulting from U.S. Overseas Contingency Operations, including in Afghanistan, Iraq and Kuwait.
Statement of Facts - Elbert Westley George III
Statement of Facts - Roy Greene Jr.
Justice Department to Monitor Election in PhiladelphiaRead the Press Release
On May 19, 2009, the Justice Department will monitor the election in the city of Philadelphia to ensure compliance with federal voting rights laws.
Justice Department staff members will monitor polling place activities in Philadelphia. A Civil Rights Division attorney will coordinate the federal activities and maintain contact with local election officials. In April 2007, the Justice Department reached a settlement agreement with Philadelphia related to allegations that the city had violated the Voting Rights Act of 1965, the Help America Vote Act and the National Voter Registration Act. Philadelphia has an obligation to provide all election information, ballots and voting assistance information in Spanish according to Section 203 of the Voting Rights Act. The monitors will gather information concerning compliance with this requirement and other federal voting rights statutes.
Each year, the Justice Department deploys hundreds of federal observers from the U.S. Office of Personnel Management and departmental staff to monitor elections across the country. In 2008, for example, 1,060 federal observers and 344 Department personnel were sent to monitor 114 elections in 76 jurisdictions in 24 states. To file complaints about discriminatory voting practices, including acts of harassment or intimidation, voters may call the Voting Section of the Civil Rights Division at 1-800-253-3931.
More information about the Voting Rights Act and other federal voting laws is available on the Civil Rights Division Web site at www.usdoj.gov/crt/voting/index.htm.
United States Transfers Lakhdar Boumediene to FranceRead the Press Release
Lakhdar Boumediene, an Algerian national who had been held at the Guantanamo Bay detention facility since 2002, has been transferred to France.
As directed by the President’s Jan. 22, 2009, Executive Order, the interagency Guantanamo Review Task Force conducted a comprehensive review of Boumediene’s case. As a result of that review, Boumediene was approved for transfer to France, which was carried out today pursuant to an arrangement between the United States and France.
Boumediene was involved in the Supreme Court case, Boumediene v. Bush, which in June 2008 established the writ of habeas corpus for detainees being held at Guantanamo Bay. In November 2008, a federal court ordered the U.S. government to take all necessary and appropriate steps to facilitate the release of Boumediene from Guantanamo Bay. He is the second Guantanamo Bay detainee to be transferred to a foreign country following consideration by the Guantanamo Review Task Force.
"As we continue to make progress with our review of detainees, the assistance of our international allies is critical to the closure of the detention facility at Guantanamo Bay," said Matthew Olsen, Executive Director of the Guantanamo Review Task Force. "We are extremely grateful to the French Government and the European Union for their assistance on the successful transfer of Lakhdar Boumediene and we commend the leadership they have demonstrated on this important issue."
Since 2002, approximately 540 detainees have departed Guantanamo for other countries including Albania, Algeria, Afghanistan, Australia, Bangladesh, Bahrain, Belgium, Denmark, Egypt, France, Great Britain, Iran, Iraq, Jordan, Kuwait, Libya, Maldives, Mauritania, Morocco, Pakistan, Russia, Saudi Arabia, Spain, Sweden, Sudan, Tajikistan, Turkey, Uganda, United Kingdom and Yemen.
Two Florida Businessmen Plead Guilty to Participating in a Conspiracy to Bribe Foreign Government Officials and Money LaunderingRead the Press Release
The president of a Miami-Dade County, Fla.,-based intermediary and the former controller of a Miami-Dade County-based telecommunications company both have pleaded guilty in connection with their roles in a conspiracy to pay and conceal more than $1 million in bribes to former Haitian government officials.
Juan Diaz51, of Miami, pleaded guilty today in Miami before U.S. District Judge Jose E. Martinez to a one-count information charging him with conspiring to make corrupt payments to a foreign government official for the purpose of securing business advantages for three different Miami-Dade County telecommunications companies from the Republic of Haiti’s state-owned national telecommunications company, Telecommunications D’Haiti, in violation of the Foreign Corrupt Practices Act (FCPA) and money laundering laws. According to plea documents, Diaz paid and concealed $1,028,851 in bribes to former Haitian government officials while serving as an intermediary for the three private telecommunications companies during the entire conspiracy.
Antonio Perez, 51, of Miami, pleaded guilty before Judge Martinez on April 27, 2009, to a one-count information charging him with conspiring to making corrupt payments for one of the three Miami-Dade County telecommunications companies to Telecommunications D’Haiti in violation of the FCPA and money laundering laws. Perez was the controller of the telecommunications company from March 1998 through approximately January 2002. According to the plea documents, approximately $674,193 in bribes from Perez’s employer was paid to former Haitian government officials throughout the course of the conspiracy, which continued into 2003.
According to court documents, the Miami-Dade County telecommunications companies executed a series of contracts with Telecommunications D’Haiti that allowed the companies’ customers to place telephone calls to Haiti. Diaz and Perez admitted they conspired with the companies to make "side payments" through a shell company belonging to Diaz to the then-Director of International Relations for Telecommunications D’Haiti and the then-Director General of Telecommunications D’Haiti. In exchange for these payments, the foreign government officials are alleged to have conferred a variety of business advantages upon the Miami-Dade County telecommunication companies, including issuing preferred telecommunications rates, reducing the number of minutes for which payment was owed, and giving a variety of credits toward owed sums.
In connection with his guilty plea, Diaz admitted that from November 2001 through October 2003, he and his co-conspirators used the shell company for the sole purpose of accepting bribes and then laundering those bribes to then-Haitian government officials. Diaz admitted that he did not ever provide or intend to provide any legal goods or services from the shell company to anyone. Diaz admitted he kept $73,824 as commissions for laundering the bribes.
In connection with his guilty plea, Perez admitted that from November 2001 through January 2002, on behalf of his employer, he offered to pay and assisted with the processing of "side payments" to the then-Director of International Relations for Telecommunications D’Haiti. Perez admitted that he assisted in paying $36,375 worth of "side payments" during this period. Perez also admitted that he helped conceal the payments through the use of Diaz’s shell company and by recording the payments as "consulting services."
At sentencing, Diaz and Perez each face a maximum of five years in prison and a fine of the greater of $250,000 or twice the gross gain. The government’s investigation is ongoing.
The Department of Justice expresses gratitude to the government of Haiti for providing substantial assistance in gathering evidence during this investigation. In particular, Haiti’s financial intelligence unit, the Unité Centrale de Renseignements Financiers (UCREF), the Bureau des Affaires Financières et Economiques (BAFE),which is a specialized component of the Haitian National Police, and the Ministry of Justice and Public Security provided significant cooperation and coordination in this ongoing investigation.
The cases were prosecuted by Assistant U.S. Attorney Aurora Fagan of the U.S. Attorney’s Office for the Southern District of Florida, Trial Attorney Nicola J. Mrazek of the Criminal Division’s Fraud Section and Trial Attorney Kevin Gerrity of the Criminal Division’s Asset Forfeiture and Money Laundering Section. The Criminal Division’s Office of International Affairs also provided assistance in this matter. The cases were investigated by the IRS-CI Miami Field Office.
Information - Diaz
Information - Perez
Indianapolis Man Pleads Guilty and Is Sentenced<br /> in Child Pornography CaseRead the Press Release
Roger Lowe, 50, of Indianapolis, was sentenced today to five years in prison for receiving child pornography.
Lowe pleaded guilty on May 8, 2009, in federal court in Indianapolis to one count of receipt of child pornography. In entering that plea, Lowe admitted that he downloaded images of children engaged in various sexual acts and participated in an e-mail group where he received videos of child pornography.
This case arose from "Operation Brick Wall," an FBI investigation that began in 2006. The investigation focused on a foreign producer of child pornography who provided videos depicting the sexual abuse of children to an e-mail group. Investigators targeted Lowe, who used an online service to download the videos from the e-mail group. A search warrant was executed at his residence and a forensic examination of the hard drive seized there revealed more than 7,000 images of child pornography, including those downloaded from the intercepted e-mail group.
The case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse, launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The case is being prosecuted jointly by Assistant U.S. Attorney Steven DeBrota for the Southern District of Indiana and Trial Attorney LisaMarie Freitas of CEOS. The international investigation was conducted by the FBI’s Innocent Image Unit at Calverton, Md., and the case was investigated by the FBI’s Indianapolis Field Office.
Former Image Entry Inc., VP Pleads Guilty to Securities <br /> and Wire Fraud Conspiracy, and Tax EvasionRead the Press Release
Michael Wayne Sulfridge, a resident of Union Grove, Ala., and former vice president of corporate finance at Image Entry, Inc. (Image Entry), pleaded guilty today to fraud and tax evasion charges stemming from the company’s 2001 acquisition by Sourcecorp, Inc. (Sourcecorp).
Sulfridge, 44, pleaded guilty to a two-count criminal information charging him with conspiracy to commit wire fraud and securities fraud, as well as tax evasion.
According to the plea agreement and evidence presented during the plea hearing, Image Entry, of London, Ky., is a data processing company that operated nearly a dozen facilities located in the Southeastern and Midwestern United States. Sourcecorp is a consulting and information management corporation located in Dallas that purchased Image Entry in March 2001.
According to the plea agreement and evidence presented during the plea hearing, the terms of the purchase agreement provided that in addition to the $33 million paid at closing, an additional sum of approximately $11 million would be held back and paid during the three succeeding years if Image Entry met its earnings targets. The purchase agreement also provided for additional incentive payments of up to $25 million during the three years that would be calculated based on the amount by which those earnings targets were exceeded.
According to the plea agreement and evidence presented during the plea hearing, Sulfridge and others conspired to fraudulently inflate Image Entry earnings in order to fraudulently increase those annual incentive payments by Sourcecorp. The total cost of the acquisition by Sourcecorp amounted to approximately $68 million, including the incentive payments.
Also according to the plea agreement and evidence presented at today’s hearing, Sulfridge allegedly caused a tax loss of $190,111 when he acted to evade income taxes due on approximately $592,393 in bonus compensation he was paid based on the fraudulently inflated earnings. According to the information, Sulfridge failed to report that income on the annual joint individual income tax returns he filed with the Internal Revenue Service (IRS) for tax years 2001, 2002 and 2004, and in May 2005 Sulfridge allegedly submitted a materially false income tax return to the IRS for tax year 2003.
At sentencing, Sulfridge faces a maximum penalty of five years in prison on the conspiracy count and five years on the tax evasion count. Sulfridge also faces a maximum fine of $250,000 on the conspiracy count and a maximum fine of $100,000 on the tax evasion count. A sentencing date has not yet been scheduled.
The case is being prosecuted by William H. Stapleton Jr., of the Criminal Division’s Fraud Section, James Etri of the U.S. Securities and Exchange Commission acting as a Special Attorney assigned to the Criminal Division, and by Jill M. Cassara of the Tax Division. The case is being investigated by the FBI and the IRS.
U.S. Judge Bars Two Connecticut Residents from Preparing Federal Tax Returns for OthersRead the Press Release
A federal district court in Connecticut has permanently barred Wethersfield residents Deowraj Buddhu and his daughter, Sunita Buddhu, from preparing federal tax returns for others. Mr. Buddhu and/or Ms. Buddhu have operated businesses that provide tax return preparation services under the names Paradise Consulting, Phoenix Consulting and Lotus Consulting, in Hartford, and Wethersfield, Connecticut.
After conducting a hearing on February 6, 2009, the Court found that the Buddhus have prepared federal income tax returns and amended federal income tax returns containing falsified or inflated deductions for their customers resulting in understatements of their customers’ tax liabilities. Based on an IRS investigation, it was determined that the Buddhus prepared 2,090 tax returns for the tax years 2004 and 2005, and Ms. Buddhu, operating under the name Lotus Consulting, prepared 922 federal income tax returns for the tax year 2006. The Court also found that the Buddhus prepared federal income tax returns for their customers on which they listed false identification numbers for themselves. The Court found that Ms. Buddhu interfered with the administration of the internal revenue laws by falsely representing to her clients that the IRS has no authority to conduct examinations of Connecticut residents’ tax returns and by preparing letters for her clients to submit to the IRS stating this unfounded position.
Acting Assistant Attorney General John A. DiCicco thanked Tax Division trial attorney Lisa Bellamy for her efforts in obtaining the injunction and Supervisory Tax Specialist Lucille Jessey of the Internal Revenue Service who managed the investigation of tax returns prepared by the Buddhus.
In the past decade, the Justice Department has obtained injunctions against more than 400 tax return preparers and tax-fraud promoters. Information about those cases is available on the Tax Division web site.
U.S. Court Permanently Bars Meriden, Conn., Tax Preparer<br /> from Preparing Tax Returns for OthersRead the Press Release
A Connecticut federal court has permanently barred John Waszczak from preparing federal tax returns for others. The court also ordered Waszczak to provide his customer lists to the government and to mail copies of the complaint and the court order to his customers. Waszczak consented to the civil injunction order.
According to the government’s complaint, Waszczak operated a tax return preparation service under the name H & J Tax Service in Meriden, Conn. The complaint states that Waszczak prepared 9,638 returns for the tax years 2003-2006. According to the complaint, on many of these returns, Waszczak overstated expenses on customers’ Schedules C or fabricated Schedule C businesses for his customers. In addition, the complaint alleges that on many of the returns that he prepared, Waszczak improperly deducted personal clothing and commuting expenses as business expenses.
The government alleged that Waszczak habitually included a $500 non-cash charitable deduction on every Schedule A that he prepared because this amount did not require the taxpayer to submit additional document to the IRS to substantiate the deduction. The complaint also alleges that Waszczak forged a pastor’s signature on a letter to substantiate a customer’s cash donations to a church even though the customer had not made those charitable donations.
Based on the average actual tax loss per examined return, and assuming that all returns prepared by Waszczak resulted in similar averages losses per return, the government estimates that it has incurred losses of approximately $24.6 million for the four-year period that Waszczak prepared returns.
In the past decade, the Justice Department has obtained injunctions against more than 400 tax return preparers and tax-fraud promoters. Information about the Justice Department’s Tax Division and its efforts to enjoin unscrupulous tax return preparers and tax-fraud promoters is available on the Justice Department Web site .
Three Former Kentucky Jailers Plead Guilty<br /> to Systematic Detainee Abuse and CoverupRead the Press Release
Three former jailers at the Lexington-Fayette County Detention Center (FCDC) pleaded guilty today to civil rights charges in federal court in Lexington, Ky. Scott Tyree, Kristine Lafoe and Anthony Estep were convicted for their roles in abusing pretrial detainees and their efforts to conceal that abuse.
Tyree, 46, pleaded guilty to conspiring to deprive detainees of their constitutional rights by physically abusing them and by authoring false and misleading incident reports in order to conceal that abuse. Tyree faces a maximum prison sentence of ten years and a fine of up to $250,000.
Lafoe, 43, pleaded guilty to a charge of conspiring to obstruct justice for her role in concealing the abuses at FCDC by permitting others to write false and misleading incident reports in order to justify unnecessary and excessive uses of force. Lafoe faces a maximum prison sentence of five years and a fine of up to $250,000.
Estep, 34, pleaded guilty to a federal civil rights charge and a charge of obstruction of justice by bringing false disciplinary charges with the intent to hinder and delay the reporting of the assault by FCDC officers, and by witnessing and failing to intervene in an incident of abuse by another FCDC officer. Estep faces a maximum prison sentence of two years and a fine of up to $200,000.
Two of the three former jailers have agreed to cooperate in the government’s investigation and prosecution.
"The overwhelming majority of detention officers perform their difficult duties with honor and professionalism," said Assistant Attorney General King. "The Justice Department will vigorously prosecute those who cross the line to engage in acts of criminal misconduct."
Today’s guilty pleas resulted from the investigative work of the FBI’s Louisville Division and the Justice Department’s Civil Rights Division. The case is being prosecuted by Department attorneys Jared Fishman and Benjamin Hawk.