District Not Recorded
The source did not name an office we could identify. These records remain unassigned rather than guessed.
Philadelphia Man Convicted of Advertising, Transporting, Receiving <br /> and Possessing Child PornographyRead the Press Release
Robert P. Merz, 45, was convicted by a federal jury in Philadelphia today of advertising, transporting, receiving and possessing child pornography.
Merz, of Philadelphia, had been charged in a third superseding indictment on Oct. 23, 2008. During the three-day trial before U.S. District Judge Juan R. Sanchez, the government presented evidence that Merz’s home was searched in February 2007, and computers, DVDs and CDs were seized. Upon review of the seized materials, investigators discovered hundreds of thousands of images and videos depicting the sexual abuse of minors as young as toddlers. Some of the images depicted violent sexual acts being committed against the victims.
In addition, evidence introduced at trial revealed that Merz used numerous online technologies to receive and transport the images.
Finally, investigators testified at trial that Merz created and administered an online group that was dedicated to trading images and videos depicting the sexual abuse of minors. The online group had members from around the world who were handpicked by Merz. The group could only be accessed via a password and was established not only to trade images and videos of minors, but also so members could talk about their common sexual interest in children.
"Mr. Merz, simply by using the Internet, collected and distributed hundreds of thousands of images and videos of some of the most horrific and unimaginable criminal acts committed against children," said Assistant Attorney General of the Criminal Division Lanny A. Breuer. "These images aren't just abstract representations. They are depictions of real crimes committed against those who are most deserving or our protection."
The identification of this online group resulted from Operation "Joint Hammer," the U.S. component of "Operation Koala," an ongoing global operation targeting transnational rings of child pornographers that was initiated by Europol and Eurojust, and involved 28 countries.
Testimony at Merz’s trial revealed that this conviction was not his first related to child exploitation. Pennsylvania law enforcement established that Merz had two prior convictions for the molestation of two young girls on separate occasions.
Sentencing has been set for July 13, 2009. At sentencing, Merz will face a mandatory minimum of 35 years and up to life in prison as well as the possibility of a lifetime period of supervised release if he does not receive a life sentence. He will also face a fine up to $250,000.
The case was investigated by the FBI and the U.S. Postal Inspection Service. It is being prosecuted by Assistant U.S. Attorneys Roberta Benjamin and Kevin Brenner of the U.S. Attorney’s Office for the Eastern District of Pennsylvania and Trial Attorney Steve Grocki of the Criminal Division’s Child Exploitation and Obscenity Section. Computer forensics in the case were performed by CEOS’ High Technology Investigative Unit.
Federal Judge Permanently Bars Texas Tax PreparersRead the Press Release
A federal court today has permanently barred two additional former employees of Preston Tax Services, Inc., from preparing federal tax returns. Chief Judge Sidney Fitzwater of the U.S. District Court for the Northern District of Texas signed injunctions permanently barring Ethel Washington of Dallas, Texas, and Jason Jeroski of Mesquite, Texas, from preparing tax returns. The court previously barred Jeroski’s and Washington’s former employer, Tina Preston, and her Dallas firm, Preston Tax Services, Inc., from preparing federal tax returns. The court also previously enjoined three other former Preston employees –Gayla Oladele, LaTavia Glover, and Tyrone Williams –from preparing tax returns.
In the injunction orders against Washington and Jeroski, http://www.usdoj.gov/tax/txdv09115.htmthe court held that they repeatedly prepared federal income tax returns containing unrealistic positions, including false business losses that they knew would result in the understatement of customers’ tax liabilities. The government complaint in the case alleged that Preston taught her employees how to list phony businesses on customers’ returns in order to report false business losses.
John A. DiCicco, Acting Assistant Attorney General for the Justice Department’s Tax Division, thanked Justice Department trial attorney Michael Pahl, who handled the case, and Glenda Dziema, a revenue agent with the Internal Revenue Service’s Small Business/Self Employed Division, who handled 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 Web site.
Deputy U.S. Marshal Pleads Guilty to Obstructing Justice by Witness TamperingRead the Press Release
Deputy U.S. Marshal Benjamin Bates pleaded guilty to a misdemeanor charge of obstructing justice today in federal court in San Antonio for tampering with a witness he was transporting to the grand jury to testify about civil rights abuses at the Bexar County Adult Detention Center in Texas. In his plea agreement, Bates agreed to resign from the U.S. Marshals Service and to never again seek employment in law enforcement. The defendant was sentenced to one year of probation.
According to documents filed in court, Bates admitted to attempting to delay and dissuade the witness from testifying truthfully before the grand jury by attempting to minimize the incident the witness was to testify about, and by suggesting ways the witness could delay or avoid testifying. In addition, Bates admitted to telling the target of the grand jury’s investigation that the witness would be testifying.
"In order for the grand jury to fulfill its vital role in our criminal justice system, it is of paramount importance that the names of witnesses not be disclosed and that witnesses not be discouraged from providing full and truthful testimony," said Acting Assistant Attorney General Loretta King for the Justice Department’s Civil Rights Division. "By his conduct, Deputy Bates compromised the system and betrayed his badge."
The FBI investigated this case and it was prosecuted by Gerard V. Hogan and James D. Walsh with the Civil Rights Division.
Defense Department Official Charged with Espionage ConspiracyRead the Press Release
A Defense Department official has been charged with conspiracy to communicate classified information to an agent of a foreign government.
A criminal complaint unsealed today in the Eastern District of Virginia alleges that, from approximately Nov. 2004 to Feb. 11, 2008, James Wilbur Fondren, Jr., while serving as an employee of the Defense Department, unlawfully and knowingly conspired with others to communicate classified information to another person who he had reason to believe was an agent or representative of a foreign government.
Fondren, 62, worked at the Pentagon and is the Deputy Director, Washington Liaison Office, U.S. Pacific Command (PACOM). He has been on administrative leave with pay since mid-February 2008 and has not performed any duties in or for PACOM since that time. This morning, he turned himself in to federal agents. Fondren is expected to have his initial appearance later today in U.S. District Court in Alexandria, Va. If convicted, he faces a maximum five years imprisonment and a $250,000 fine.
"Today’s case is the result of an outstanding long-term counterespionage effort by many agents, analysts and prosecutors that has thus far yielded three convictions," said David Kris, Assistant Attorney General for National Security. "The conduct alleged in this complaint should serve as a warning to others in government who would compromise classified information and betray the trust placed in them by the American people."
"The allegations in this case are troubling – providing classified information to a foreign agent of the People’s Republic of China is a real and serious threat to our national security," said Dana J. Boente, Acting U.S. Attorney for the Eastern District of Virginia. "The U.S. government places considerable trust in those given access to classified information, and we are committed to prosecuting those who abuse that trust."
"The complaint unsealed today alleges that Mr. Fondren conspired to steal our nation’s secrets for a foreign government, placing his own interests over those of the citizens he served as a U.S. Government employee," said Executive Assistant Director Arthur M. Cummings, II, FBI National Security Branch. "These charges are the result of the investigative efforts of the FBI’s Washington Field Office, with the invaluable assistance of the Air Force Office of Special Investigations. Espionage is a profoundly serious crime, and the FBI will continue to work with our law enforcement and intelligence community partners to ensure the protection of our nation’s most sensitive information."
According to an affidavit filed in support of the criminal complaint, Fondren retired from active duty as a Lieutenant Colonel in the U.S. Air Force in May 1996. In approximately Feb. 1998, he began providing consulting services from his Virginia home. Fondren’s sole client for his business was a friend by the name of Tai Shen Kuo. Kuo was a naturalized U.S. citizen from Taiwan who lived primarily in Louisiana and maintained business interests in the United States and the People’s Republic of China (PRC). Kuo also maintained an office in the PRC.
In August 2001, Fondren became a civilian employee at PACOM at the Pentagon, where he was again granted a security clearance by the government. He held a Top Secret security clearance, worked in a Sensitive Compartmented Information Facility, and had a classified and unclassified computer at his cubicle. Even after he began working at PACOM in 2001, Fondren continued to provide consulting services for Kuo.
Unbeknownst to Fondren, Kuo worked under the direction of a PRC government official. This PRC official provided Kuo with detailed instructions to collect certain documents and information from Fondren and other U.S. government officials, including Gregg William Bergersen, a former Weapons Policy Analyst at the Arlington, Va.-based Defense Security Cooperation Agency in the Defense Department. The PRC official paid Kuo approximately $50,000 for completing those tasks.
Kuo introduced the PRC official to Fondren in approximately March 1999, describing him to Fondren as a political researcher and consultant to the PRC government. Fondren maintained periodic email correspondence with the PRC official until at least March 2001. While Fondren was aware of Kuo’s relationship with the PRC official, he was not aware of the PRC official’s precise status with the PRC government nor of his coded requests to Kuo to obtain information from Fondren.
According to the affidavit, the PRC official instructed Kuo to mislead Fondren into believing that he was providing information to Kuo for Taiwan military officials. Nevertheless, Fondren was aware that Kuo was providing Fondren’s information to an agent of a foreign government, the affidavit alleges.
According to the affidavit, between Nov. 2004 and Feb. 11, 2008, Fondren provided Kuo with certain Defense Department documents and other information, some of which Fondren obtained from classified online systems available to him by virtue of his employment at the Pentagon. Fondren incorporated Defense Department information, including classified information, into "opinion papers" that he sold to Kuo for between $350 and $800 apiece through Fondren’s home-based consulting business. Eight of the "papers" Fondren sold to Kuo contained classified information. Fondren also provided Kuo with sensitive, but unclassified Defense Department publications.
According to the affidavit, Fondren allegedly provided Kuo with a variety of sensitive data, including classified information from a State Department cable, classified information about a PRC military official’s U.S. visit, classified information about a joint U.S.-PRC naval exercise, and classified information regarding U.S.-PRC military meetings. In one instance, Fondren provided Kuo with a draft Defense Department report on the PRC military and stated to Kuo: "This is the report I didn’t want you to talk about over the phone….Let people find out I did that, it will cost me my job."
On Feb. 11, 2008, Kuo and former Defense Department employee, Gregg William Bergersen, were arrested on espionage charges. On the day of his arrest, Kuo was staying as a guest in Fondren’s Virginia home and had among his possessions a draft, unclassified copy of a Defense Department document entitled "The National Military Strategy of the United States of America 2008." Fondren was interviewed by the FBI and later admitted that he gave the draft National Military Strategy report to Kuo.
On March 31, 2008, Bergersen pleaded guilty in the Eastern District of Virginia to conspiracy to disclose U.S. national defense information to persons not entitled to receive it. Bergersen admitted that, between March 2007 and February 2008, he provided national defense information to Kuo, much of it pertaining to U.S. military sales to Taiwan and classified as Secret. Bergersen was later sentenced to 57 months in prison.
On May 13, 2008, Kuo pleaded guilty in the Eastern District of Virginia to conspiracy to deliver national defense information to a foreign government, namely the PRC. Kuo admitted that he had cultivated a friendship with Bergersen, bestowing on him gifts, cash payments, dinners, and money for gambling trips to Las Vegas. Kuo admitted that he had obtained national defense information from Bergersen and that he had sent it on to the PRC government official. Kuo was later sentenced to 188 months in prison.
On May 28, 2008, Yu Xin Kang, an accomplice of Kuo from New Orleans who was arrested on the same day as Kuo and Bergersen, pleaded guilty in the Eastern District of Virginia to aiding and abetting an unregistered agent of the PRC. Kang admitted that she assisted Kuo by periodically serving as a conduit for the delivery of information from Kuo to the PRC government official. Kang was later sentenced to 18 months in prison.
This investigation was conducted by the FBI's Washington Field Office. The Air Force Office of Special Investigations (OSI) provided substantial assistance and cooperation throughout the course of the investigation. The prosecution is being handled by Assistant U.S. Attorney Neil Hammerstrom, from the U.S. Attorney’s Office for the Eastern District of Virginia, and Trial Attorney Ryan Fayhee from the Counterespionage Section of the Justice Department’s National Security Division.
The public is reminded that criminal complaints are only charges and not evidence of guilt. A defendant is presumed innocent unless and until proven guilty.
Stanford Financial Group Chief Investment Officer Charged with Obstruction of JusticeRead the Press Release
WASHINGTON – A federal grand jury in Houston returned a two-count indictment today charging Laura Pendergest-Holt, the chief investment officer of Houston-based Stanford Financial Group (SFG), with conspiring to obstruct a U.S. Securities and Exchange Commission (SEC) proceeding investigating SFG, as well as a substantive count of obstructing the SEC proceeding, Assistant Attorney General of the Criminal Division Lanny A. Breuer and acting U.S. Attorney for the Southern District of Texas Tim Johnson announced.
The federal court in Houston will be issuing an order summoning Pendergest-Holt to appear in the near future for arraignment. Pendergest-Holt has been free on a $300,000 bond since being charged with obstruction in a criminal complaint issued from the Northern District of Texas on Feb. 26, 2009.
According to the indictment, Stanford International Bank Ltd. (SIBL), marketed certificates of deposits (CDs). In a December 2008 monthly report, SIBL purported to have more than 30,000 clients and $8.5 billion in assets. The indictment alleges that investors were not advised of the fact that SIBL internally segregated its investment portfolio into three tiers: "Tier I," which represented cash and cash equivalents; "Tier II," which contained investments with "outside portfolio managers;" and "Tier III," described as "other assets."
Internal SIBL documents show that as of June 30, 2008, Tier III contained more than 80 percent of SIBL’s purported investments, according to the indictment. The indictment also alleges that approximately $3.2 billion of the purported Tier III value included investments in artificially valued real estate and approximately $1.6 billion included notes on personal loans to SFG "Executive A."
The indictment alleges that in December 2008, as part of an ongoing investigation, the SEC made official inquiries of SFG regarding the value and content of SIBL’s purported investments and provided notice that it intended to schedule testimony of witnesses. The indictment further alleges that on or about Jan. 21, 2009, at a meeting in Miami, Pendergest-Holt and SFG Executives "A" and "B" and an attorney for SFG, discussed how to respond to the SEC subpoenas. In addition, the indictment alleges that at a meeting in Houston on or about Jan. 23, 2009, the attorney for SFG requested that the SEC defer the subpoenas to Executives A and B and represented that Pendergest-Holt and the president of SIBL would be better witnesses because, the attorney claimed, Executives A and B were not knowledgeable about the details of SIBL’s assets. The indictment alleges that prior to her SEC testimony, Pendergest-Holt suggested at a meeting in Miami that she only disclose the June 30, 2008, financials as those numbers "looked better," and that she received a phone call from Executive B in which he reminded her to only discuss Tier II. According to the indictment, as early as November 2008, Pendergest-Holt was aware of the current value of Tier III and the real estate holdings in Tier III. The indictment further alleges that just prior to her SEC testimony, Pendergest-Holt participated in preparing a document reflecting the value of Tier III and the assets in Tier III.
The indictment alleges that on Feb. 10, 2009, Pendergest-Holt provided sworn testimony to the SEC in Fort Worth, Texas, where in response to questions by the SEC, she did not disclose the Miami meetings to prepare for her testimony and falsely represented that she did not know the content or allocations of the Tier III assets. The indictment further alleges that on Feb. 12, 2009, after her false testimony, Pendergest-Holt caused $4.3 million in SIBL funds to be wire-transferred to SIBL’s operating account in Houston.
Finally, on Feb. 17, 2009, as the indictment alleges, at a meeting with SEC attorneys in Memphis, Tenn., Pendergest-Holt falsely represented that if she "knew anything about Tier III," she would tell them.
An indictment is a formal accusation of criminal conduct, not evidence. A defendant is presumed innocent unless proven guilty beyond a reasonable doubt.
The maximum penalties for each of the conspiracy and obstruction counts are five years in prison and a fine of $250,000.
The case is being investigated by the FBI’s Houston Field Office, Internal Revenue Service-Criminal Investigation and the U.S. Postal Inspection Service. The case is being prosecuted by Senior Litigation Counsel Jack Patrick, Trial Attorney Matthew Klecka and with assistance from Allan Medina, Law Clerk, Forfeiture Support Associates, assigned to the Fraud Section, as well as Assistant U.S. Attorney Gregg Costa of the U.S. Attorney’s Office for the Southern District of Texas.
Former Nazi Death Camp Guard John Demjanjuk Deported to GermanyRead the Press Release
WASHINGTON – John Demjanjuk, a former Nazi death camp guard and a resident of Seven Hills, Ohio, has been removed by U.S. Immigration and Customs Enforcement (ICE) to Germany, Assistant Attorney General Lanny A. Breuer of the Criminal Division and ICE Acting Assistant Secretary John P. Torres announced today. Demjanjuk was removed through a court order of removal obtained by the Department of Justice. On March 10, 2009, a German judge issued an order directing that Demjanjuk, 89, be arrested on suspicion of assisting in the murder of at least 29,000 Jews at the Sobibor extermination center in Nazi-occupied Poland during World War II. In addition to serving at Sobibor, Demjanjuk served the SS as an armed guard of civilian prisoners in Germany at the Nazi-operated Flossenbürg Concentration Camp in Germany and at Majdanek concentration camp and the Trawniki training and forced labor camp in Nazi-occupied Poland.
Demjanjuk was first tried on allegations of participation in Nazi persecution in a civil denaturalization (citizenship revocation) case decided in 1981. Relying principally on witness testimony, a federal court found at that time that Demjanjuk was a notorious gas chamber operator at the Treblinka extermination center known to prisoners as "Ivan the Terrible." He was extradited in 1986 to Israel, where he was tried and convicted. However, after the Israeli Supreme Court found that reasonable doubt existed as to whether Demjanjuk was Ivan the Terrible, he was released and returned to the United States in 1993.
In 1999, the Department of Justice initiated a new denaturalization case against Demjanjuk, relying in large part on captured Nazi documents that came to light following the 1991 dissolution of the Soviet Union. In revoking his citizenship in 2002, the district court found that, in addition to serving at Sobibor, where approximately 250,000 Jewish men, women, and children were murdered, Demjanjuk had served as an armed guard at Majdanek, a concentration camp and extermination center at which at least 170,000 victims perished. The court also found that Demjanjuk served at
Flossenbürg, where t housands of prisoners, confined solely because of their race, religion, national origin or political opinion, died as a result of the inhumane conditions , or were murdered.The removal of Demjanjuk to Germany was effected through close cooperation between the Departments of Justice, Homeland Security and State. The Criminal Division’s Office of International Affairs provided significant assistance in this matter. Demjanjuk’s removal is part of OSI’s continuing efforts to identify, investigate and take legal action against participants in Nazi crimes of persecution who reside in the United States. Since OSI began operations in 1979, it has won cases against 107 individuals who participated in Nazi crimes of persecution. In addition, attempts to enter the United States by more than 180 individuals implicated in wartime Axis crimes have been prevented as a result of OSI’s "Watch List" program, which is enforced in cooperation with the Departments of State and Homeland Security.
"The removal to Germany of John Demjanjuk is an historic moment in the federal government’s efforts to bring Nazi war criminals to justice," said Assistant Attorney General Lanny A. Breuer. "Mr. Demjanjuk, a confirmed former Nazi death camp guard, denied to thousands the very freedoms he enjoyed for far too long in the United States. Now, finally, Mr. Demjanjuk has been held accountable in one small way for his part in one of the most horrific chapters in history."
Demjanjuk, a retired auto worker who was born in present-day Ukraine, immigrated to the United States in 1952 by concealing from U.S. immigration authorities his true whereabouts during World War II and his Nazi camp guard service. As a former Sobibor guard, Demjanjuk is only the second person to be removed from the United States after having served at one of the four Nazi camps constructed solely to murder civilians. In 2002, the U.S. District Court in Cleveland revoked Demjanjuk’s naturalized U.S. citizenship after a two-week trial prosecuted by the Criminal Division’s Office of Special Investigations (OSI). Chief Judge Paul R. Matia found that Demjanjuk participated at the Sobibor extermination center in "the process by which thousands of Jews were murdered by asphyxiation with carbon monoxide" in the camp’s gas chambers. In December 2005, then Chief Immigration Judge Michael J. Creppy ordered Demjanjuk removed from the United States to Ukraine, Germany or Poland. In May 2008, the U.S. Supreme Court denied Demjanjuk’s petition for review.
OSI Director Eli M. Rosenbaum stated, "John Demjanjuk’s actions helped seal the fateof thousands of innocent people during the Holocaust. He has at last received his summons from history."
"Millions have sought refuge from persecution in this country under liberty’s mantle. We will not suffer persecutors and mass murderers tarnishing her image by staking such a claim for themselves," said John P. Torres, ICE Acting Assistant Secretary of Homeland Security. "The U.S. government is dedicated to preventing the cynical exploitation of our nation’s immigration system by the worst of the worst. With John Demjanjuk’s removal, we reaffirm our commitment to protection of the oppressed, not the oppressor."
Antitrust Division Announces Initiative to Help Protect Recovery Funds from Fraud, Waste and AbuseRead the Press Release
WASHINGTON — The Department of Justice’s Antitrust Division today announced the details of its newly formed initiative aimed at preparing government officials and contractors to recognize and report efforts by parties to unlawfully profit from the stimulus projects that are being awarded as part of The American Recovery and Reinvestment Act of 2009.
Consistent with its mission to protect the welfare of the American economy by promoting open and fair competition, the Department’s Antitrust Division launched an initiative to help government agencies insulate procurement, grant and program funding processes from collusion and fraud, as well as to ensure that those who abuse those processes are prosecuted to the fullest extent of the law.
"It is not lost on anyone, public servants and taxpayers alike, that along with the tremendous opportunity to help revive the economy that the Recovery Act provides, comes tremendous responsibility," said Christine A. Varney, Assistant Attorney General in charge of the Department’s Antitrust Division. "Fraud, waste and abuse of these stimulus funds will not be tolerated and the Antitrust Division is committed to doing everything possible to help protect the integrity of the government funding processes that are critical to making the stimulus plan a success."
The American Recovery and Reinvestment Act of 2009 was signed into law by President Obama on Feb. 17, 2009. It is an effort to jumpstart the economy and create or save jobs. The Act includes $4 billion in Department of Justice grant funding to enhance state, local and tribal law enforcement efforts, including the hiring of new police officers, to combat violence against women, and to fight Internet crimes against children.
The Antitrust Division’s Recovery Initiative involves training procurement and grant officials, government contractors, and agency auditors and investigators, on techniques for identifying the "red flags of collusion" before stimulus awards are made and taxpayer money is unnecessarily wasted. The initiative makes available to agencies Antitrust Division competition experts who can evaluate procurement and program funding processes. These Division experts will make recommendations on "best practices" that may be adopted by the agencies to further protect processes from fraud, waste and abuse and maximize open and fair competition. Finally, the initiative commits the Antitrust Division to playing a significant role in assisting agencies investigate and prosecute those who seek to or succeed in defrauding the government’s efforts to maximize competition for stimulus funds.
The Antitrust Division’s Recovery Initiative is already making a significant impact. Since March 2009, in partnership with agency Inspector Generals handling stimulus funds, the Antitrust Division has already assisted in training thousands of federal and state procurement, grant and program officials nationwide, with thousands more scheduled to be trained in the coming months. The Antitrust Division has also launched a Recovery Initiative Web site through which consumers, contractors and federal, state and local agencies, can review information about the antitrust laws and the Division’s training programs, request training, and report suspicious activity. The Web site is located at http://www.usdoj.gov/atr/public/criminal/economic_recovery.htm. This Web site is linked to www.recovery.gov, the official website of the Recovery Accountability and Transparency Board. The board is responsible for overseeing federal agencies to ensure that there is transparency and accountability for the expenditure of Recovery Act funds. The Web site is also available through a link on the main Department of Justice homepage at http://www.usdoj.gov.
Consumers are encouraged to contact the Antitrust Division if they have information concerning anticompetitive conduct involving stimulus funds by emailing [email protected] or calling 1-888-647-3258.
Alaska Mine Operators to Pay $883,628 to Resolve Environmental ViolationsRead the Press Release
Alaska Gold Co. (Alaska Gold), and NovaGold Resources Inc. (NovaGold), the owners and operators of the Rock Creek Mine near Nome, Alaska, have agreed to pay a $883,628 civil penalty to resolve violations of a storm water discharge permit.
According to the court documents, in 2006, Alaska Gold, an Alaskan corporation and its parent company, NovaGold, a Canadian corporation, applied for and received a permit for the construction of a mine near Nome. Construction began in October 2006.
Subsequently, from April 2007 until September 2008, Alaska Gold and NovaGold violated their permit on multiple occasions by discharging stormwater into Rock Creek, Lindblom Creek and Glacier Creek in violation of state water quality standards. The companies also failed to adequately prepare and update a storm water pollution prevention plan and failed to implement and maintain best management practices to control the discharges.
"Today’s settlement shows that the government will hold accountable any company that does not fully comply with stormwater requirements," said John C. Cruden, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. "We expect all companies to take the necessary steps to control stormwater discharge from their operations."
"Whether it’s in a far corner of Alaska or in a crowded urban area, stormwater rules protect our waterways from polluted runoff," said Michelle Pirzadeh, EPA’s Acting Regional Administrator in Seattle. "The construction at Rock Creek Mine resulted in virtually unchecked runoff of silt and sediment to important fish habitat. Companies taking on construction projects of this scale need to do so responsibly and in accordance with the law."
As of fall 2008, the mine was in compliance. EPA will be monitoring the site for future violations beginning in spring 2009.
The stipulation of settlement and judgment, lodged today in the U.S. District Court for the District of Alaska in Anchorage, is subject to a 30-day public comment period and approval by the federal court. A copy is available on the Department of Justice Web site at http://www.usdoj.gov/enrd/Consent_Decrees.html.
U.S. District Court Judge Sentenced to 33 Months in Prison <br /> for Obstruction of JusticeRead the Press Release
U.S. District Judge Samuel B. Kent was sentenced today to 33 months in prison for obstruction of justice related to an investigation of a judicial misconduct complaint filed against him.
Kent, 59, a district judge in the Southern District of Texas, pleaded guilty to obstructing a special investigative committee of the U.S. Court of Appeals for the Fifth Circuit during an investigation of a judicial misconduct complaint filed against him. Kent was sentenced in federal court in Houston by Senior U.S. District Judge Roger Vinson for the Northern District of Florida, who was sitting by designation in the Southern District of Texas.
On Aug. 28, 2008, a grand jury in the Southern District of Texas indicted Kent, who was at that time a sitting U.S. District Judge for the Southern District of Texas, on two counts of abusive sexual contact and one count of attempted aggravated sexual abuse for his alleged assaults in 2003 and 2007 on an employee of the Office of the Clerk of Court identified as Person A. On Jan. 6, 2009, the grand jury returned a superseding indictment against Kent. The superseding indictment incorporated the original charges and added three counts: one count each of abusive sexual contact and aggravated sexual abuse, based on Kent’s alleged repeated assaults on another U.S. District Court employee identified as Person B, and one count of obstruction of justice, based upon his obstruction of the Fifth Circuit’s investigation into a misconduct complaint filed by Person A.
On Feb. 23, 2009, Kent pleaded guilty to obstructing the judicial misconduct investigation into his sexual assaults. As part of his plea, Kent admitted that in both 2003 and 2007, he engaged in non-consensual sexual contact with Person A without her permission. He also admitted that he engaged in non-consensual contact from 2004 through at least 2005 with Person B without her permission. When Person A filed a misconduct complaint against him, the Fifth Circuit appointed a committee to investigate whether Kent had engaged in unwanted sexual contact with Person A and individuals other than Person A. Kent admitted that when he appeared before the committee in June 2007, he falsely testified about his conduct with Person B.
Kent was also ordered to pay a $1,000 fine as well as restitution of $3,300 to Person A and $3,250 to Person B. Kent was ordered to surrender on June 15, 2009.
The case was prosecuted by Senior Deputy Chief for Litigation Peter J. Ainsworth and Trial Attorneys John P. Pearson and AnnaLou T. Tirol of the Criminal Division’s Public Integrity Section, which is headed by Section Chief William M. Welch II. The case was investigated by the FBI.
Novo Nordisk Agrees to Pay $9 Million Fine in Connection with Payment of $1.4 Million in Kickbacks Through the United Nations Oil-for-food ProgramRead the Press Release
Novo Nordisk A/S (Novo), a Danish corporation based in Bagsvaerd, Denmark, has agreed to pay a $9 million penalty for illegal kickbacks paid to the former Iraqi government. Novo agreed to pay the fine as part of a deferred prosecution agreement with the Department. The matter is part of the Justice Department’s ongoing investigation into the U.N. Oil-for-Food program.
A criminal information was filed today against Novo in U.S. District Court for the District of Columbia charging Novo with one count of conspiracy to commit wire fraud and to violate the books and records provisions of the Foreign Corrupt Practices Act (FCPA). Novo, an international manufacturer of insulin, medicines and other pharmaceutical supplies, has acknowledged responsibility for improper payments made by its agents to the former Iraqi government in order to obtain contracts with the Iraqi ministry of health to provide insulin and other medicines. The agreement requires the company and its subsidiaries to cooperate fully with the Justice Department’s ongoing Oil-for-Food investigation.
According to the agreement and the information filed today, between 2001 and 2003, Novo paid approximately $1.4 million to the former Iraqi government by inflating the price of contracts by 10 percent before submitting the contracts to the United Nations for approval and concealed from the United Nations the fact that the price contained a kickback to the former Iraqi government. Novo also admitted it inaccurately recorded the kickback payments as "commissions" in its books and records.
In recognition of Novo’s thorough review of the illicit payments and its implementation of enhanced compliance policies and procedures, the Department has agreed to defer prosecution of criminal charges against Novo for a period of three years. If Novo abides by the terms of the agreement, at the end of the three-year period the Department will dismiss the criminal information.
The Oil-for-Food Program was established by the United Nations to enable Iraq to sell its oil for humanitarian purposes, in the context of an extensive international sanctions regime. The Oil-for-Food Program mandated that the proceeds of oil sales be deposited in a United Nations bank account and that those proceeds be used by the Iraqi government only to purchase humanitarian goods and services, such a food and medicine, approved by the United Nations. Beginning in 2000, the former Iraqi government began requiring companies wishing to sell humanitarian goods to government ministries to pay a kickback, often mischaracterized as an "after sales services fee," to the government in order to be granted a contract. The amount of that fee was usually 10 percent of the contract price. Such payments were not permitted under the Oil-for-Food Program or other sanction regimes then in place.
In a related matter, Novo reached a settlement today with the U.S. Securities and Exchange Commission (SEC) on a complaint and agreed to pay $3,025,066 in civil penalties and $6,005,079 in disgorgement of profits, including pre-judgment interest, in connection with contracts for which it paid kickbacks to the former Iraqi government.
The case is being prosecuted by Fraud Section Senior Trial Attorney Jonathan Lopez with assistance from Paralegal Specialist Sarah Marberg.
The Department acknowledges and expresses its appreciation for the significant assistance provided by SEC’s Enforcement Division in the ongoing Oil-for-Food investigation.
Information
Justice Department Withdraws Report on Antitrust Monopoly LawRead the Press Release
WASHINGTON — Christine A. Varney, Assistant Attorney General in charge of the Department’s Antitrust Division, today announced that the Department is withdrawing, effective immediately, a report relating to monopolization offenses under the antitrust laws that was issued in September 2008. As of today, the Section 2 report will no longer be Department of Justice policy. Consumers, businesses, courts and antitrust practitioners should not rely on it as Department of Justice antitrust enforcement policy.
The report, "Competition and Monopoly: Single-Firm Conduct Under Section 2 of the Sherman Act," raised too many hurdles to government antitrust enforcement and favored extreme caution and the development of safe harbors for certain conduct within reach of Section 2, Varney said. Varney announced the withdrawal of the report today at a speech at the Center for American Progress.
"Withdrawing the Section 2 report is a shift in philosophy and the clearest way to let everyone know that the Antitrust Division will be aggressively pursuing cases where monopolists try to use their dominance in the marketplace to stifle competition and harm consumers," said Varney. "The Division will return to tried and true case law and Supreme Court precedent in enforcing the antitrust laws."
The report was issued after a series of joint hearings, involving more than 100 participants, that the Department and the Federal Trade Commission (FTC) held from June 2006 to May 2007 to explore the antitrust treatment of single-firm conduct. The FTC did not join with the Department in its report.
Varney said that while there is no question that Section 2 cases present unique challenges, the report advocated hesitancy in the face of potential abuses by monopoly firms. She said that implicit in this overly cautious approach is the notion that most unilateral conduct is driven by efficiency and that monopoly markets are generally self-correcting. "The recent developments in the marketplace should make it clear that we can no longer rely upon the marketplace alone to ensure that competition and consumers will be protected," Varney added.
"I want to commend the efforts of those who participated in the Section 2 hearings," said Varney. "While I do not agree with the conclusions of the Section 2 report, I do believe that the hearings and the report provided a valuable discussion of the enforcement issues involving single-firm conduct."
Related Materials:
Read Assistant Attorney General Varney's Remarks as Prepared for the Center for American Progress
Read Assistant Attorney General Varney's Remarks as Prepared for the U.S. Chamber of CommerceJustice Department to Monitor Elections in TexasRead the Press Release
On May 9, 2009, the Department of Justice will monitor municipal elections in the cities of Farmers Branch and Hondo, Texas, to ensure compliance with the Voting Rights Act of 1965.
Under the Voting Rights Act, the Justice Department is authorized to ask the U.S. Office of Personnel Management (OPM) to send federal observers to areas that are specially covered in the Act or by a federal court order. Federal observers will be assigned to monitor polling place activities for the elections in Farmers Branch and Hondo based on the special coverage provisions. The observers will watch and record activities during voting hours at polling locations in these jurisdictions, and Civil Rights Division attorneys will coordinate the federal activities and maintain contact with local election officials.
Each year, the Justice Department deploys hundreds of federal observers from OPM, as well as departmental staff, to monitor elections across the country. In calendar year 2008, for example, 1,060 federal observers and 344 Department personnel were sent to monitor 114 elections in 76 jurisdictions in 24 states. To file complaints about discriminatory voting practices, including acts of harassment or intimidation, voters may call the Voting Section of the Civil Rights Division at 1-800-253-3931.
More information about the Voting Rights Act and other federal voting laws is available on the Justice Department Web site at www.usdoj.gov/crt/voting/index.htm.
Justice Department Seeks to Bar New York Attorney from Using Employment Taxes as Working CapitalRead the Press Release
WASHINGTON - The United States has filed a lawsuit against New York attorney Thomas B. Pruzan, d/b/a the Pruzan Law Firm, seeking to put an end to Mr. Pruzan’s repeated failure to timely deposit and pay the employment and unemployment taxes due from his law firm, as well as his failure to timely file employment and unemployment tax returns with the Internal Revenue Service.
The government complaint alleges that since the quarter ended September, 30, 1997, Mr. Pruzan has deliberately failed to make current employment tax deposits, and has, instead, used those funds as working capital, a practice referred to as "pyramiding." The complaint further alleges that Mr. Pruzan’s noncompliance with his federal tax obligations has resulted in a balance due to the government of more than one million dollars.
According to the complaint, despite the Internal Revenue Service’s best efforts over the past five years, Mr. Pruzan has made very minimal payments of his tax debt, and all attempts to induce compliance have failed. Accordingly, the complaint seeks an injunction requiring Mr. Pruzan to, among other things, timely deposit and pay his employment and unemployment taxes, and timely file all employment and unemployment tax returns with the IRS.
Since 2001, the Justice Department’s Tax Division has obtained more than 385 injunctions to stop the promotion of tax fraud schemes and the preparation of fraudulent returns. Information about these cases is available on the Justice Department website.
United States' Complaint for Preliminary and Permanent Injunction (PDF)
Justice Department Seeks to Bar New York Attorney from Using Employment Taxes as Working CapitalRead the Press Release
WASHINGTON – The United States has filed a lawsuit against New York attorney Thomas B. Pruzan, d/b/a the Pruzan Law Firm, seeking to put an end to Mr. Pruzans repeated failure to timely deposit and pay the employment and unemployment taxes due from his law firm, as well as his failure to timely file employment and unemployment tax returns with the Internal Revenue Service.
The government complaint alleges that since the quarter ended September, 30, 1997, Mr. Pruzan has deliberately failed to make current employment tax deposits, and has, instead, used those funds as working capital, a practice referred to as “pyramiding.” The complaint further alleges that Mr. Pruzans noncompliance with his federal tax obligations has resulted in a balance due to the government of more than one million dollars.
According to the complaint, despite the Internal Revenue Services best efforts over the past five years, Mr. Pruzan has made very minimal payments of his tax debt, and all attempts to induce compliance have failed. Accordingly, the complaint seeks an injunction requiring Mr. Pruzan to, among other things, timely deposit and pay his employment and unemployment taxes, and timely file all employment and unemployment tax returns with the IRS.
Since 2001, the Justice Departments Tax Division has obtained more than 385 injunctions to stop the promotion of tax fraud schemes and the preparation of fraudulent returns. Information about these cases is available on the Justice Department website.
Related Documents:
United States v. Thomas B. Pruzan, etc.
United States' Complaint for Preliminary and Permanent Injunction
(PDF document)Portable Document Format (PDF) files may be viewed with a free copy of Adobe Acrobat Reader
Accessibility InformationJustice Department Files Lawsuit Against Synapse Data and Telecom Inc<br /> to Enforce the Employment Rights of Utah National Guard MemberRead the Press Release
WASHINGTON — The Justice Department today announced the filing of a lawsuit in U.S. District Court in Salt Lake City on behalf of Jose A. Ortega, a Utah National Guard member, against Synapse Data and Telecom Inc., and Matthew Mossbarger, Synapse’s owner and operator, alleging violations of the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA).
Under USERRA, an employer is prohibited from terminating an employee if the employee’s service or obligation for service in the uniformed services is a motivating factor in the employer’s action, unless the employer can prove that the action would have been taken in the absence of such service or obligation for service.
The complaint alleges that Ortega, then a network administrator for Synapse, enlisted in the Utah National Guard in April 2008 and was given orders to report for basic training the following month. According to the complaint, Ortega informed Mossbarger of his military enlistment and attempted to provide Mossbarger with a copy of his orders to report for basic training. Mossbarger tried to convince Ortega to rescind his military obligation, offering him benefits, a raise and management opportunities. Mossbarger then terminated Ortega when Ortega declined to withdraw from the Utah National Guard. Ortega filed a complaint with the Labor Department’s Employment and Training Service (VETS). VETS investigated the matter, determined that Ortega’s claim had merit, and upon completion of conciliation efforts, referred the matter to the Justice Department.
"The Department of Justice is committed to vigorously enforcing federal laws that protect the employment rights of our servicemembers," said Loretta King, Acting Assistant Attorney General for the Civil Rights Division. "That commitment is evidenced by cases such as this where a servicemember’s employment was terminated simply because he had committed to military service and would be reporting for training."
The Civil Rights Division of the Justice Department has given a high priority to the enforcement of servicemembers’ rights under USERRA. This is the tenth USERRA lawsuit filed this year by the Civil Rights Division on behalf of servicemembers. Additional information about USERRA can be found on the Justice Department Web site: www.servicemembers.gov and www.usdoj.gov/crt/emp.
Department of Justice FY 2010 Budget RequestRead the Press Release
WASHINGTON – Attorney General Eric Holder announced today that the President’s FY 2010 budget proposal totals $26.7 billion for the Department of Justice (DOJ) to increase support for the Department’s traditional missions while strengthening national security efforts. The request represents a 3.8 percent increase in budget authority and an increase of 3,977 positions over the FY 2009 enacted appropriation.
“The President’s budget request demonstrates both a dedication to protecting our national security as the Department of Justice’s top priority and a renewed commitment to the Department’s traditional missions,” Attorney General Holder said. “In these tough economic times, it’s more important than ever that we remain vigilant in the fight against crime while never relaxing our guard in the battle against global terrorism.”
“We must continue to invest public dollars into strategies and programs that have proved to be effective methods to combat the myriad security threats we face today. We have an obligation to protect our communities and our country in smart, proven ways,” Holder explained.
The $26.7 billion budget request fully funds base operations and activities for all DOJ components and includes program enhancements totaling $1.94 billion. Approximately 90 percent of the total resources are dedicated to national security programs and DOJ’s traditional missions in law enforcement and litigation, while the remaining 10 percent funds state and local assistance programs. FY 2010 program increases and key priorities include:
· $721.5 million to counter the threat of terrorism and strengthen national security.
· $510.6 million to assist state and local law enforcement, including the Second Chance Act.
· $62.6 million to combat financial fraud and protect the federal fisc (treasury).
· $15.7 million for civil rights law enforcement.
· $231.6 million to safeguard our southwest border.
· $386 million for prisons and detention services.
· $14 million to improve DOJ’s financial performance and accountability.
To view the budget summary, visit: http://www.usdoj.gov/jmd/2010summary/
National Security
The Department’s top priority remains the prevention, investigation and prosecution of terrorist activities. In total, the budget requests a $721.5 million increase, including 366 agents and 324 intelligence analysts in the FBI and Drug Enforcement Administration (DEA), to strengthen the Department’s counterterrorism investigative capabilities, support its efforts to identify, track and defeat terrorists operating in the United States and overseas and to fortify our nation’s intelligence analysis capabilities.
Within this enhancement are additional resources for the following Department components:
· $555.6 million, including 357 agents and 321 intelligence analysts, for the FBI;
· $64 million for General Administration;
· $27.4 million for Justice Information Sharing Technology;
· $20 million for Law Enforcement Wireless Communications;
· $25 million for the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF);
· $10.5 million for the Bureau of Prisons (BOP);
· $10 million, including 9 agents and 3 intelligence analysts, for the DEA;
· $4 million for the Office of the Inspector General;
· $2.5 million for the Criminal Division;
· $2.2 million for the U.S. National Central Bureau (Interpol); and
· $250,000 for the Foreign Claims Settlement Commission.
The budget enables the FBI in coordination with the Department’s National Security Division and U.S. Attorneys’ Offices across the country to further its development of a robust domestic intelligence capability and increase its ability to investigate and prevent cyber attacks and weapons of mass destruction incidents. The budget includes increases to build-out key FBI support functions, such as training and biometrics support for federal, state and local partners.
Finally, the budget request contains funds to process expeditiously approximately 240 individuals currently detained at the Guantanamo Bay Naval Base and to implement the President’s Executive Order to close Guantanamo by January 2010.
For more information, view the National Security Budget Fact Sheet at http://www.usdoj.gov/jmd/2010factsheets/pdf/national-security.pdf
State and Local Law Enforcement Assistance, Including the Second Chance Act
The FY 2010 budget request includes an increase of $510.6 million for state and local law enforcement assistance, bringing the total to $2.6 billion for state and local programs. The Administration is committed to providing communities across the country with resources to begin hiring 50,000 police officers. The budget request includes $298 million for the Community Oriented Policing Services (COPS) program which, combined with the $1 billion provided in the American Recovery and Reinvestment Act, will enable the hiring of more than 7,000 police officers nationwide by the end of 2010. The budget also provides for significant funding toward the Second Chance Act, which attempts to break the cycle of criminal recidivism by providing services to ex-offenders before and after they are released from prison and return to communities. The resources will fund prisoner reentry programs by providing an increase of $75 million in grant program and research funding, as well as an increase of $13.8 million for federal inmate skills development. Increased state and local funding will be used to provide drug treatment, mentoring and other transitional services to help ex-offenders integrate into society and lead productive lives.
For more information, view the State and Local Law Enforcement Fact Sheet at http://www.usdoj.gov/jmd/2010factsheets/pdf/state-local.pdf
Combating Financial Fraud and Protecting the Federal Fisc (Treasury)
The Department of Justice will continue to play a crucial role in the federal financial recovery effort through criminal and civil litigation. The budget includes $62.6 million for additional FBI agents, federal prosecutors, civil litigators and bankruptcy attorneys to address the problems that contributed to, and that are caused by the current financial crisis. Within this enhancement are additional resources for the following Department components:
· $25.5 million, including 50 agents for the FBI;
· $12.8 million for the U.S. Attorneys;
· $10 million for the Civil Division;
· $2.9 million for the Tax Division;
· $1.8 million for the Criminal Division;
· $4.2 million for the Environment and Natural Resources Division;
· $2.2 million for the U.S. Trustees Program;
· $1.2 million for the Antitrust Division; and
· $2 million, including four agents, for the Office of the Inspector General.
The FY 2010 budget provides for 50 additional FBI agents to combat financial fraud . It also provides for 165 attorneys in Washington and in U.S. Attorney Offices throughout the United States to aggressively pursue cases in the civil and criminal court systems, defend the United States in high-profile, high stakes Indian Tribal Trust litigation and support programs that have high rates of return, such as debt collection, tax law enforcement and fraud enforcement.
For more information, view the Combating Financial Fraud and Protecting the Federal Fisc Fact Sheet at http://www.usdoj.gov/jmd/2010factsheets/pdf/cff-fisc.pdf
Civil Rights Law Enforcement
Consistent with the President’s commitment to defend the laws of the United States and protect civil rights, the budget requests $15.7 million, and 102 additional positions including 60 attorneys, to expand existing initiatives and reinvigorate traditional civil rights enforcement. Additional staff allow for more vigorous pursuit of hate crimes and discrimination, human trafficking crimes and unsolved civil rights era crimes. The budget provides for increased enforcement of fair housing and fair lending laws, disability laws and laws protecting institutionalized persons from unconstitutional treatment. In total, the FY 2010 budget requests an 18 percent increase in funding for the Civil Rights Division over FY 2009.
For more information, view the Civil Rights Law Enforcement Fact Sheet at http://www.usdoj.gov/jmd/2010factsheets/pdf/civil-rights.pdf
Safeguarding our Southwest Border
Illegal immigration and border security are paramount concerns for the United States, particularly along the Southwest Border. The FY 2010 budget addresses the threats and challenges posed by the Southwest Border to the entire criminal justice system. In recent years, budget increases have been focused on the front end of the pipeline without proportionately increasing the back end of the system, which includes many DOJ responsibilities. To address this imbalance, the Department proposes an increase of $231.6 million, 632 agents and 110 attorneys for a Southwest Border Enforcement Initiative.
The Department’s initiative focuses on combating violence, stopping the flow of illegal weapons and drug trafficking, bringing criminals to justice and sharing critical information, technical assistance and training with our law enforcement partners on both sides of the border. The initiative brings together the law enforcement and prosecutorial components of the Department, including DEA, ATF, the Organized Crime Drug Enforcement Task Force program, the U.S. Attorneys, the Criminal and Civil Divisions and the Executive Office for Immigration Review, to help secure the border and restore the rule of law to the region. The budget also includes significant resources for the U.S. Marshals Service to protect and secure federal detainees before, during and after judicial proceedings.
Within this enhancement are additional resources for the following Department components:
· $18 million, including 34 agents for ATF;
· $24.1 million, including 70 agents for DEA;
· $8.1 million for the U.S. Attorneys;
· $26.3 million for the Executive Office for Immigration Review;
· $8.9 million for the Organized Crime Drug Enforcement Task Force program;
· $144.3 million, including 528 agents for the U.S. Marshals Service;
· $1.8 million for the Civil Division; and
· $122,000 for the Criminal Division.
For more information, view the Safeguarding our Southwest Border Fact Sheet at http://www.usdoj.gov/jmd/2010factsheets/pdf/safeguarding-our-swb.pdf
Prisons and Detention
The number of individuals appearing in federal court has grown at a rapid pace, as has the number of individuals detained and incarcerated. This has created substantial costs for the BOP and Office of the Federal Detention Trustee (OFDT). The FY 2010 budget includes $386 million in enhancements to expand prison and detention capacity, fund vacant staff positions and fund programs designed to help inmates successfully reintegrate into their communities. The budget expands federal prison capacity by funding the build-out and activation of two new medium security prisons and provides for medical care increases, drug treatment and life skills programs and additional correctional workers.
For more information, view the Prisons and Detention Budget Fact Sheet at http://www.usdoj.gov/jmd/2010factsheets/pdf/prisons-detention.pdf
Performance and Accountability
The Department of Justice continues to seek ways to improve performance and accountability. The budget request includes a program increase of $14.0 million to continue implementation of the critical Unified Financial Management System, a major initiative that greatly improves the efficiency and integrity of the Department’s financial and performance management and accounting functions.
For more information, view the Performance and Accountability Budget Fact Sheet at http://www.usdoj.gov/jmd/2010factsheets/pdf/performance-accountability.pdf
Anadarko Petroleum Co., Agrees to Pay Penalty for Oil Spills in WyomingRead the Press Release
WASHINGTON—Anadarko Petroleum Co., and two related oil production companies have agreed to pay a civil penalty of more than $1 million and implement injunctive relief, develop facility response plans, and revise spill prevention as well as containment plans at a cost of more than $8 million during the term of the settlement in order to resolve violations of the Clean Water Act, the Justice Department and U.S. Environmental Protection Agency (EPA) announced today.
According to the consent decree, filed in U.S. District Court in Cheyenne, Wyo., Anadarko, Howell Corp., and Howell Petroleum Corp., agree to pay $1.05 million and will upgrade and implement appropriate spill prevention plans and develop and implement facility response plans. The consent decree also requires the companies to implement a multi-phased integrity and mitigation plan that incorporates inspection, monitoring, testing, data collection and failure analysis activities.
"As a result of today’s settlement, Anadarko will pay a significant civil penalty and spend an even greater amount to come into compliance with the Clean Water Act," said John C. Cruden, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. "The consent decree will clearly improve Anadarko’s preparedness and prevention plans and will ultimately result in a cleaner environment for the people of Wyoming."
"This multi-million dollar settlement will protect water resources and habitat in Wyoming and the West," said Carol Rushin, EPA’s Acting Regional Administrator in Denver. "We are pleased that Anadarko and its partners will make significant investments in monitoring and control measures that will ensure compliance with the Clean Water Act and minimize the likelihood and severity of future spills."
According to a complaint filed concurrently with the consent decree, Anadarko Petroleum and the two related companies allegedly discharged harmful quantities of oil from its facility in Wyoming on more than 35 occasions between Jan. 26, 2003, and Oct. 19, 2008. The complaint alleges that more than 31,300 barrels of oily water and crude oil were released during the spills and resulted in an observable film, sheen or discoloration on the surface of the impacted water or shoreline. The spills occurred on oil production fields in Park, Johnson and Natrona Counties and resulted in the pollutants being discharged into the tributaries or drainages of Silver Tip Creek and Salt Creek which, respectively, are tributaries to the Clarks Fork and Powder Rivers.
The Clean Water Act prohibits discharges of oil into waterways and coastal areas in quantities that may be harmful to the environment or public health. Oil spills threaten fresh water and marine environments, harming plant and animal life through physical damage and the toxicity of the oil itself, which may poison exposed organisms. For more information on the effects and cleanups of oil spills, visit: http://www.epa.gov/oilspill.
The consent decree was lodged in the U.S. District Court for the District of Wyoming and is subject to a 30-day public comment period and subsequent court approval. A copy of the consent decree is available on the Justice Department Web site at http://www.usdoj.gov/enrd/Consent_Decrees.html.
U.S. Court in Seattle Permanently Shuts Down Washington, D.C., Tax PreparerRead the Press Release
WASHINGTON – A federal judge in Seattle, Wash., has permanently barred a District of Columbia man, William H. Camp, Jr., from preparing tax returns for others and from promoting a scheme involving bogus gold mining tax deductions, the Justice Department announced today. The permanent injunction order was entered by Judge Ricardo S. Martinez of the U.S. District Court for the Western District of Washington, where a substantial number of Camp’s customers reside.
The court found that Camp was a salesmen for a sham mining expense tax scheme called MIDAS, which was offered by a firm called Merendon Mining of Colorado and the Institute for Financial Learning (IFFL).
According to the court, Camp began persuading customers in 2003 to participate in the MIDAS scheme by promising large profits from purported investments in Colorado and Arizona gold mines. The court found that MIDAS participants usually made no investment of their own funds, but instead used funds obtained from the IRS by filing amended tax returns claiming bogus gold mining development deductions to receive large tax refunds for earlier tax years. The court further found that Camp prepared these false amended returns, many of which wrongfully eliminated the majority of his customer’s income tax liabilities for 1997 through 2002. The court also found that Camp charged his customers up to $4,000 each to prepare and file the false amended returns.
The court further found that Camp prepared a legal opinion letter for his customers regarding the applicability of the mining deduction. The court found that Camp is not a certified public accountant, never held an accounting license, and did not consult any legal authority in drafting the opinion. The court held that Camp in fact knew that his customers were not engaged in the business of mining and that MIDAS participants had paid no money toward any mine development, even though his opinion letter falsely stated that "development expenses" claimed by his customers were tax deductible.
The injunction bars Camp from promoting the MIDAS tax scheme and any other false or fraudulent tax plan, preparing or assisting others in preparing any tax form or document, and falsely representing himself as a certified public accountant.
Acting Assistant Attorney General John A. DiCicco thanked Tax Division trial attorneys Jacqueline Brown and Tom Curteman for their handling of the case, and revenue agents Andrew Crabb and Sean Flannery of the Internal Revenue Service’s Small Business/Self-Employed Division for their investigative work.
Over the past decade, the Justice Department’s Tax Division has obtained injunctions against more than 395 tax return preparers and tax-fraud promoters. Information about these cases is available on the Justice Department Web site.
Korean Businessman Indicted in Bribery Conspiracy and Wire Fraud Scheme Involving $206 Million ContractRead the Press Release
A South Korean businessman was indicted today for his alleged role in a bribery conspiracy for a $206 million telecommunications contract involving employees of the Army and Air Force Exchange Service (AAFES).
In a superseding indictment, Gi-Hwan Jeong, 44, was charged in the Northern District of Texas with conspiracy, honest services wire fraud and bribery. Jeong was previously indicted on Dec. 17, 2008, solely on bribery charges and was arrested in Dallas on Nov. 19, 2008, on a criminal complaint. In upholding Jeong’s detention, U.S. District Court Judge Jane J. Boyle found probable cause to support charges and that Jeong was a flight risk. Jeong’s trial on all counts is scheduled to begin June 24, 2009, before U.S. District Judge Ed Kinkeade.
According to the superseding indictment, AAFES provides goods and services worth billions of dollars to U.S. Armed Forces service members and their families around the world, often referred to as military exchanges. The superseding indictment alleges that between 2001 and 2006 Jeong conspired with two AAFES officials and others to commit bribery and honest services wire fraud when he agreed to make payments to the officials in the form of cash, travel and entertainment expenses in exchange for their aid in securing and maintaining a $206 million telecommunications contract for Jeong’s company, Samsung Rental Ltd. (SSRT).
On April 21, 2009, Henry Lee Holloway, identified as co-conspirator and recipient of bribes in Jeong’s superseding indictment, pleaded guilty in the Middle District of Georgia for his role in the conspiracy and for not reporting the bribes he admitted he accepted on his income tax returns. Holloway, 42, of Hamilton, Ga., worked as an AAFES general store manager at the Central Exchange in the Republic of Korea from 2003 through 2007. According to court documents, prior to Jeong’s alleged payments to Holloway, and as a result of SSRT’s failures to perform under the contractual relationship with AAFES, Holloway attempted to terminate the contractual relationship between AAFES and SSRT. After Jeong allegedly began making payments to Holloway, and as the result of those payments, Holloway admitted he used official acts and influence to support and expand that contractual relationship, including contract amendments and obligation changes.
The case is being prosecuted by Senior Trial Attorney Richard C. Pilger and Trial Attorneys Richard B. Evans and Eric G. Olshan of the Criminal Division’s Public Integrity Section, headed by William M. Welch, II, Chief. The case was investigated by the Air Force Office of Special Investigations, the FBI’s Dallas Field Office and the Internal Revenue Service.
An indictment is merely an allegation, and every defendant is presumed innocent until proven guilty beyond a reasonable doubt.
Indictment
Justice Department Files Lawsuit AllegingDisability-based Housing Discriminationat Six Complexes in Sioux Falls, South DakotaRead the Press Release
The Justice Department filed a lawsuit today against Equity Homes Inc, PBR LLC, BBR LLC and Shane Hartung in U.S. District Court in South Dakota for failing to provide accessible features required by the Fair Housing Act at multi-family housing developments in Sioux Falls.
The lawsuit, which originated from a complaint filed with the U.S. Department of Housing and Urban Development (HUD), concerns six Sioux Falls complexes - East Briar Apartments, West Briar Apartments, Kensington Apartments, Beverly Gardens Apartments, Sertoma Hills Apartments and Sertoma Hills Villas.
"When builders and designers construct homes without regard for accessible features, they are effectively shutting the door to persons with disabilities," said Loretta King, Acting Assistant Attorney General for the Justice Department’s Civil Rights Division. "Designing and constructing multi-family housing without basic features of accessibility violates the law."
"The Fair Housing Act’s design and construction standards for accessible housing in multifamily dwellings are clear and have been law for 18 years. Most architects, builders and developers get it right. We commend Fair Housing of the Dakotas for bringing this case to our attention for enforcement of the law," stated HUD Assistant Secretary for Fair Housing and Equal Opportunity John Trasviña.
The Fair Housing Act prohibits discrimination in housing on the basis of race, color, religion, sex, familial status, national origin and disability. Among other things, the act requires that new multifamily housing developments 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. The complaint alleges that the defendants failed to include certain of these required accessibility features at each of the six complexes.
The lawsuit seeks a court order requiring the defendants to modify the complexes to bring them into compliance with federal laws and prohibiting future discrimination by the defendants, as well as monetary damages to compensate victims.
Fighting illegal housing discrimination is a top priority of the Justice Department. More information about the Civil Rights Division and the laws it enforces is available at www.usdoj.gov/crt. Additional information about the Fair Housing Act is also available at www.usdoj.gov/fairhousing and www.HUD.gov. Individuals who believe that they may have been victims of housing discrimination can call the Housing Discrimination Tip Line at 1-800-896-7743, e-mail the Justice Department at [email protected], or contact the U.S. Department of Housing and Urban Development at 1-800-669-9777.
The complaint is an allegation of unlawful conduct. The allegations must still be proven in federal court.
Former New Mexico Jail Administrator Sentenced for Civil Rights ViolationsRead the Press Release
A former jail administrator at the Cibola County Detention Center in Grants, N.M., was sentenced today to 97 months in prison, two years of supervised release and a $400 special assessment for violating the rights of inmates in his custody at two separate New Mexico jails. Judge James O. Browning announced the sentence today in federal court in Albuquerque, N.M.
John Gould was convicted by a federal jury on April 2, 2007, of two felony civil rights violations and two counts of obstruction of justice. According to the evidence presented at trial, on Oct. 16, 2002, while Gould was a Lieutenant and Shift Commander at the Dona Ana County Detention Center in Las Cruces, N.M., he aided and abetted officers he supervised in assaulting an inmate without justification. Specifically, the jury heard evidence that Gould applied pepper spray directly into the eyes of the inmate and then slammed his head to the floor multiple times even though the inmate was restrained on the floor and was not posing a threat to officers. As a result of this assault, the inmate suffered a fractured shoulder that required surgery and multiple rib fractures. Following the incident, Gould wrote a false official report about his actions and made false statements to the FBI and a federal grand jury. Five other corrections officers entered guilty pleas to civil rights and obstruction of justice charges in connection with this incident.
The jury also heard evidence that on March 4, 2004, Gould, while working as the administrator of the Cibola County Detention Center and after he had already been indicted for the incident at the Dona Ana County jail, shot a naked inmate twelve times in his back and buttocks with projectiles from a riot control weapon. At the time Gould deployed the weapon through an open food port window, the inmate was locked inside a holding cell and was not posing a threat to any officer. As a result of this assault, the inmate suffered multiple flesh wounds that became infected, requiring the inmate to be hospitalized for several days. Once again, following the assault, Gould wrote a false official report and made false statements about the incident.
"Law enforcement officers are given tremendous authority and responsibility so that they can protect and serve the public trust," said Loretta King, Acting Assistant Attorney General of the Civil Rights Division. "Those who abuse this authority face serious consequences. The Civil Rights Division is committed to prosecuting all cases of official misconduct and to bringing these individuals to justice."
The case was prosecuted by Special Litigation Counsel Kristy Parker and Deputy Chief Mark Blumberg of the Criminal Section of the Civil Rights Division and the U.S. Attorney’s Office for the District of New Mexico, and was investigated by FBI Special Agent Brian Russ.
Former Bank of China Managers and Their Wives Sentenced for Stealing <br /> More Than $485 Million, Laundering Money Through Las Vegas CasinosRead the Press Release
Two former managers of the Bank of China and their wives were sentenced today after their convictions on Aug. 29, 2008, by a federal jury in Las Vegas on charges of racketeering, money laundering, international transportation of stolen property as well as passport and visa fraud.
U.S. District Judge Philip M. Pro sentenced Xu Chaofan aka Hui Yat Fai to 25 years in prison, Xu Guojun aka Hui Kit Shun to 22 years in prison, Kuang Wan Fang aka Wendy Kuang to eight years in prison and Yu Ying Yi to eight years in prison. All four defendants were sentenced to three years of supervised release and ordered to pay $482 million in restitution. Denaturalization proceedings against Kuang Wan Fang and Yu Ying Yi have been initiated by the government.
Evidence presented during the trial established the elaborate scheme to defraud the Bank of China of at least $485 million, orchestrated by former managers Xu Chaofan, Xu Guojun and a third former bank manager, Yu Zhendong aka Yu Wing Chung, who pleaded guilty in connection with this investigation and cooperated with the United States. According to information presented in court, the scheme involved efforts by the bank managers to launder the stolen money through Hong Kong, Canada and the United States, among other countries, and then immigrate to the United States from China with their wives by obtaining false identities and entering into sham marriages with naturalized U.S. citizens. Evidence also proved that the bank managers’ true wives, Kuang Wan Fang and Yu Ying Yi, assisted their husbands in laundering the proceeds of the fraudulent scheme and violated U.S. immigration laws by entering this country illegally and then securing U.S. citizenship and passports through fraudulent means.
All five defendants were charged with engaging in a RICO conspiracy that began in 1991 and continued until October 2004 when the former bank managers and their wives were arrested. The underlying racketeering activities included engaging in monetary transactions with stolen money, transportation of stolen money, passport fraud and visa fraud. Evidence presented at trial established that the former bank managers created a number of shell corporations in Hong Kong and with the assistance of others funneled the bank’s money into these companies as well as numerous personal bank and investment accounts. Assisted by their wives, relatives and others, the former bank managers then laundered the stolen proceeds through Canada and the United States. Evidence presented at trial included a significant number of transactions with the stolen money through Las Vegas casinos, including bets at the casinos that ranged from $20,000 up to $80,000.
All five defendants also were convicted of engaging in a money laundering conspiracy and conspiracy to transport stolen money that began in 1998 and continued through October 2004. These conspiracy charges focused on the laundering of the stolen money in the United States not only through casinos, but also through numerous bank accounts established in the United States by the defendants.
The two former bank managers were also convicted on three counts each of visa fraud – specifically, the possession and use of a fraudulently procured non-immigrant U.S. visa to enter and/or remain in the United States. The two bank managers’ true wives were convicted of three counts each of passport fraud – specifically, the use of a U.S. passport secured through a false statement to enter or facilitate their stay in the United States.
"We will hold fully accountable those foreign nationals who abuse the financial systems of their home countries and who then, by fraudulent means, seek to live richly off their ill-gotten gains in the United States," said Assistant Attorney General Lanny A. Breuer. "Despite the best efforts of these defendants to avoid detection, their scheme first to steal nearly $500 million from a Chinese bank, and then to hide themselves and the money in the United States, was exposed thanks to the tireless efforts of federal agents and prosecutors. With their hard work, and the work of countless others like them who are on constant guard against theft and fraud, the Department will continue to unravel the most complicated financial crimes."
"The defendants sentenced today engaged in a complex scheme from across the globe, using U.S. banks and casinos to launder more than $485 million stolen from the Bank of China. Financial crimes like these know no borders. By partnering in investigations such as this one, the FBI and our law enforcement partners in the United States and abroad can combine our collective resource to most effectively attack this worldwide criminal threat," said Assistant Director Kenneth W. Kaiser, FBI Criminal Investigative Division.
Xu Chaofan, Xu Guojun, Kuang Wan Fang and Yu Ying Yi were charged on Sept. 21, 2004, in an 11-count indictment with conspiring to violate, and substantive violations of, U.S. immigration law. The third former bank manager, Yu Zhendong, pleaded guilty to engaging in a racketeering enterprise on Feb. 18, 2004, and voluntarily returned to China, where he was convicted for embezzlement for his role in the bank theft. Yu Zhendong’s true wife, Yu Xuhui (aka Fion Yu), pleaded guilty on April 26, 2005, to unlawfully procuring U.S. citizenship. She has agreed to voluntarily relinquish her American citizenship, but was permitted to remain in the United States with the couple’s children as long as she does not commit another crime. Yu Zhendong’s fake American wife, Shanna Yu Ma (aka Yu Shuzhan) pleaded guilty to submitting a false statement to the Immigration and Naturalization Service, now part of the Department of Homeland Security, in support of Yu Xuhui’s application for naturalization. Both Ma and Yu were sentenced in December 2007 to terms of probation.
This matter was prosecuted by Trial Attorney Krista Tongring and former Trial Attorney Cynthia Stone and of the Criminal Division’s Organized Crime and Racketeering Section and Assistant U.S. Attorney Ronald Cheng of the U.S. Attorney’s Office for the Central District of California. Organized Crime Strike Force Chief Eric Johnson of the U.S. Attorney’s Office for the District of Nevada served as local counsel. Significant assistance was also provided by Kyle Latimer of the Criminal Division’s Office of International Affairs. The U.S. Attorney’s Office for the District of Nevada provided significant support for the prosecution and coordination of witnesses from throughout the United States and overseas. The case was investigated by the FBI’s Las Vegas Field Office and U.S. Immigration and Customs Enforcement of the Department of Homeland Security. Essential support was also provided by the FBI’s offices in Beijing and Hong Kong. The government of the People’s Republic of China, in particular the Ministries of Justice and Public Security along with the Hong Kong Department of Justice and Hong Kong Police Force, also provided substantial assistance in producing evidence and making witnesses available, both for testimony at trial and videotaped depositions.
Connecticut Accountant Pleads Guilty to Income Tax EvasionRead the Press Release
Frank P. DiMartino, an accountant from Orange, Conn., pleaded guilty today to charges of tax evasion. DiMartino appeared before Magistrate Judge Holly B. Fitzsimmons in Bridgeport, Conn.
According to the plea agreement and evidence introduced during the plea hearing, DiMartino is the president and sole shareholder of Tax II Inc., an accounting and tax return preparation business located in Orange. During years 2001 through 2005, DiMartino operated Tax II from an office in his residence. During that time period, DiMartino attempted to evade the corporate income taxes he owed on behalf of the business by claiming personal expenses as business expenses on Tax II’s corporate income tax returns. These expenses included home repair and maintenance expenses, vehicle expenses and expenses related to the in-ground pool at the residence.
Additionally, DiMartino failed to report the Tax II funds he used to pay these personal expenses as income on his individual income tax returns for 2001 through 2005. The total tax loss associated with DiMartino’s conduct is $170,181.
Sentencing is scheduled for July 24, 2009, before District Court Judge Janet C. Hall. DiMartino faces a sentence of up to ten years in prison and a maximum fine of $500,000.
Acting Assistant Attorney General John A. DiCicco of the Justice Department’s Tax Division commended the investigative efforts of the IRS agents involved in this case, as well as Tax Division trial attorney Michael P. Ben’Ary who is prosecuting the case.
More information about the Justice Department’s Tax Division and its enforcement efforts is available at http://www.usdoj.gov/tax/.
Civilian Contractor, U.S. Army Major and His Wife Indicted for Alleged Bribe Scheme Involving Contracts at Camp Arifjan in KuwaitRead the Press Release
A 23-count indictment unsealed today alleges that a civilian contractor paid more than $2.8 million in bribes to a U.S. Army contracting official stationed at Camp Arifjan, an Army base in Kuwait, and the official’s wife, and that the three individuals committed honest services fraud and money laundering offenses in connection with the same conduct.
The indictment, returned by a federal grand jury in the Northern District of Alabama, charges Terry Hall, 43, of Snellville, Ga., with one count of conspiracy to commit bribery, one substantive bribery count, eight counts of honest services wire fraud, one count of money laundering conspiracy and one count of engaging in monetary transactions in criminal proceeds.
Hall was originally indicted in the District of Columbia on Nov. 20, 2007, and charged with one count of bribery of a U.S. Army contracting official at Camp Arifjan. On Sept. 4, 2008, Hall was charged in a superseding indictment with one count of conspiracy to commit bribery, two substantive bribery counts and two honest services wire fraud counts. The government will seek dismissal of the D.C. indictments so that Hall can be tried together with his co-conspirators, named in the Alabama indictment unsealed today.
In the Alabama indictment, U.S. Army Major Eddie Pressley, 39, and his wife, Eurica Pressley, 37, both of Harvest, Ala., are charged with conspiracy to commit bribery, one substantive count of bribery, eight counts of honest services wire fraud, one count of money laundering conspiracy and eleven counts of engaging in monetary transactions in criminal proceeds.
The indictment alleges that Hall bribed two Army Majors, Eddie Pressley and James Momon, who served as Army contracting officials at Camp Arifjan between 2004 and 2006. According to the indictment unsealed today, from January 2004 to November 2007, Hall operated several companies that had contracts with the U.S. military in Kuwait, including Freedom Consulting and Catering Co. (FCC), and Total Government Allegiance (TGA). As a result of the bribes, FCC and TGA allegedly received approximately $21 million from contracts to deliver bottled water and to erect security fencing for the Department of Defense (DoD) in Kuwait and Iraq.
According to the indictment, Eddie Pressley allegedly arranged for a blanket purchase agreement (BPA) for bottled water to be awarded to FCC, and thereafter Eddie Pressley arranged for calls under that BPA. As a result, DoD paid FCC approximately $9.3 million. BPAs are contracts in which DoD agrees to pay a contractor a specified price for supplies and orders them on an as-need basis. An order under the contract is known as a "call." Eddie Pressley also allegedly arranged for DoD to award a contract to FCCto construct a security fence at Camp Arifjan, for which DoD paid FCC approximately $750,000.
In exchange for these and other official acts, Eddie and Eurica Pressley are alleged to have received more than $2.8 million in money and other valuable items from Hall. To receive the bribe payments, Eurica Pressley, at the behest of her husband, arranged for an entity named EGP Business Solutions Inc. (EGP) to be incorporated, opened a bank account in the name of EGP, and opened bank accounts in her name in Dubai, United Arab Emirates and the Cayman Islands. Hall, Eddie Pressley and Eurica Pressley also allegedly prepared and executed purported consulting agreements for the purpose of creating the appearance that Eurica Pressley had legitimately earned consulting fees from Hall. Hall then allegedly funneled bribe payments into the bank accounts controlled by Eurica Pressley.
The indictment also alleges that a second contracting official, former U.S. Army Major James Momon, arranged for calls to TGA under the same bottled water BPA, as a result of which DoD paid Hall approximately $6.4 million. Hall allegedly paid Momon at least $200,000 in exchange for these and other official acts. On Aug. 13, 2008, Momon pleaded guilty to receiving bribes from various contracting officers at Camp Arifjan.
"Service members and contractors who place personal gain above taxpayers’ interests during periods of war breach the public trust and undermine the legitimacy of public institutions," said Sharon Woods, Director of the Defense Criminal Investigative Service. "Corruption of the nature uncovered throughout the course of this investigation destroys confidence in the Government's ability to act as an effective steward of taxpayer dollars. The Defense Criminal Investigative Service remains committed to working with law enforcement partners and the Department of Justice to prosecute fraud and public corruption to the fullest extent of the law."
"Such alleged activity by Army employees or government contractors who work with the Army will not be tolerated. We will continue to investigate allegations of this nature and do everything in our power to see that persons responsible are held accountable and brought to justice," said Brigadier General Rodney Johnson, the Commanding General of the U.S. Army Criminal Investigation Command (U.S. Army CID).
"These latest arrests of are further evidence of SIGIR’S continuing efforts to root out public corruption within the Iraq program," said Stuart W. Bowen Jr., Special Inspector General for Iraq Reconstruction (SIGIR). "This successful investigation was part of cooperative efforts carried out by SIGIR and our partner agencies."
An indictment is merely an accusation and the defendant is presumed innocent until and unless proven guilty at trial beyond a reasonable doubt.
The charge of bribery conspiracy carries a maximum prison sentence of five years per count. Each substantive bribery count and wire fraud count carries a maximum penalty of 15 years in prison. Each count of money laundering conspiracy carries a maximum prison sentence of 20 years and each count of monetary transactions in criminal proceeds carries a maximum penalty of 10 years in prison.
The case is being prosecuted by trial attorneys Peter C. Sprung, Deborah Sue Mayer and Edward J. Loya Jr., of the Criminal Division’s Public Integrity Section, headed by Section Chief William Welch. These cases are being investigated by U.S. Army CID and Defense Criminal Investigation Service, FBI, ICE, the Justice Department’s Office of the Inspector General, SIGIR and the Internal Revenue Service Criminal Investigation. The investigations are continuing.
In October 2006, the Department of Justice announced the formation of a National Procurement Fraud Task Force designed to promote the early detection, identification, prevention and prosecution of procurement fraud associated with the increase in government contracting activity for national security and other government programs. The Procurement Fraud Task Force, chaired by Assistant Attorney General Breuer, includes the U.S. Attorneys’ Offices, the FBI, the U.S. Inspectors General community, and a number of other federal law enforcement agencies. The cases brought by members of the Task Force demonstrate the Department of Justice's commitment to helping ensure the integrity of the government procurement process.
Indictment
Chief Engineer Sentenced for Concealing Vessel PollutionRead the Press Release
WASHINGTON – Carmelo Oria, a Spanish citizen who was the chief engineer on the Cyprus-flagged M/T Nautilus, was sentenced today in U.S. District Court in Massachusetts for maintaining inaccurate records that concealed a discharge of oil-contaminated water from the bilges of the M/T Nautilus, the Justice Department announced. Oria was sentenced to one month in prison, to be followed by supervised release for a term of two years and a $3,000 fine.
Oria pleaded guilty on March 9, 2009, to violating the Act to Prevent Pollution from Ships based on his role in discharging oil-contaminated bilge water directly into the ocean from the M/T Nautilus and then failing to record the discharge in the ship’s records.
The government’s investigation began in March 2008, when inspectors from the U.S. Coast Guard conducted an examination of the M/T Nautilus, following the ship’s arrival in St. Croix, U.S. Virgin Islands, and subsequently in the Port of Boston. The M/T Nautilus is a 26,794 gross ton chemical tanker owned by Cyprus-based Iceport Shipping Company Ltd., and operated by Spanish-based Consultores de Navegacion S.A.
Engine room operations on board large oceangoing vessels such as the M/T Nautilus generate large amounts of waste oil and oil-contaminated bilge waste. International and U.S. law prohibit the discharge of waste containing more than 15 parts per million of oil and without treatment by an oily water separator—a required pollution prevention device. Law also requires all overboard discharges be recorded in an oil record book, a required log that is regularly inspected by the U.S. Coast Guard.
Oria served as the Chief Engineer aboard the M/T Nautilus between January and March 2008 and was responsible for all engine room operations. During that time, Oria ordered engine room crew members to discharge oil-contaminated bilge water from the ship’s bilges directly into the ocean. When the M/T Nautilus entered the Port of Boston on March 22, 2008, the ship’s log, which Oria was responsible for maintaining, failed to disclose the overboard discharge of oil-contaminated bilge water.
"This sentence sends a loud and clear message to crewmembers and companies alike that dumping pollution directly overboard and attempting to conceal it will lead to penalties," said John C. Cruden, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. "Maritime companies and their employees must understand that violations of our Nation’s laws are serious and the Justice Department stands ready to prosecute those who choose to ignore them."
"Our hope is that this case will send a strong message to those in the maritime community who might try to circumvent our nation’s anti-pollution laws. It is necessary to ensure that the companies realize that violating our environmental laws will be taken seriously, and will ultimately cost them more than legally disposing of the waste," said Michael K. Loucks, Acting U.S. Attorney for the District of Massachusetts.
"The Coast Guard is committed to working with the maritime industry and federal, state and local law enforcement partners to protect the U.S. maritime environment from individuals who pollute our waters," said Rear Admiral Dale G. Gabel, Commander of the First Coast Guard District in Boston, Mass. "When these violations occur, the Coast Guard will work with our partners to ensure violators are held accountable under the law."
The case was investigated by the U.S. Coast Guard, Coast Guard Investigative Service. It was prosecuted by Assistant U.S. Attorney Linda M. Ricci of Loucks’ Economic Crimes Unit, Trial Attorney Todd Mikolop of the Justice Department’s Environmental Crimes Section, and Special Assistant U.S. Attorney Christopher Jones of the U.S. Coast Guard First District Legal Office.
U.S. Court Shuts Down Georgia Tax Preparation Firms Allegedly Involved in Fuel Credit Tax ScamRead the Press Release
WASHINGTON - A federal court in Savannah, Ga., today permanently barred Ophelia Kelley, of Vidalia, Ga., from preparing federal income tax returns for others, the Justice Department announced today. According to the government complaint, Kelley operated two return preparation firms in Vidalia – Kelley Tax Service and City and Country Girl Tax Service. Kelley agreed to the civil injunction order.
The civil injunction suit alleged that Kelley and her businesses repeatedly and intentionally engaged in fraudulent conduct by claiming improper deductions and tax credits for customers. Kelley allegedly claimed bogus fuel tax credits for customers who were not entitled to the credit. The fuel credit is available only to taxpayers who operate farm equipment or off-highway business vehicles. It is not available for vehicles driven on roads or highways.
The complaint alleged that Kelley fraudulently claimed absurdly large credits for truck drivers by falsely reporting purchases of huge quantities of fuel, often more than the customer could have bought using all his annual income. Return preparer fraud and fuel credit scams are on this year’s IRS list of the Dirty Dozen Tax Scams. In the past few years the Justice Department has obtained injunctions shutting down many tax preparers who claim the bogus credits on customers’ returns.
According to the complaint, Kelley also fabricated false deductions for such things as medical expenses and charitable gifts. The suit also alleged that Kelley failed to sign at least 100 tax returns she prepared for customers. Paid tax preparers are required by law to sign all returns they prepare.
John DiCicco, Acting Assistant Attorney General for the Justice Department’s Tax Division, thanked Grayson Hoffman, the Justice Department trial attorney who handled the case, and Shauna Henline, a senior technical advisor with the IRS’s Small Business/Self Employed Division, who conducted the investigation.
In the past decade, the Justice Department’s Tax Division has obtained more than 395 injunctions against tax fraud promoters and tax return preparers. Information about these cases is available on the Justice Department’s Web site.
Texas Man Pleads Guilty to Travel with Intent to Engage in Sexual Conduct with a Minor, Possession of Child PornographyRead the Press Release
Patrick Cochran, 47, of Lake Jackson, Texas, pleaded guilty today to one count of travel with intent to engage in illicit sexual conduct with a minor, and one count of possession of child pornography.
During today’s plea hearing before U.S. District Judge Stephen M. McNamee at the federal district courthouse in Phoenix, Cochran admitted to responding to an online advertisement for a foreign tour that had been posted by undercover agents with the U.S. Department of Homeland Security’s Immigration and Customs Enforcement (ICE). Cochran further admitted that he wrote to the agents to express his interest in engaging in sexual acts with two minors, and to paying a $75 deposit to reserve a place on the tour. After Cochran traveled to a prearranged meeting place in the District of Arizona and confirmed his intent to take part in the tour, he was arrested by the agents.
Cochran further admitted to possessing more than 600 images of child pornography on various digital media at his home in Texas. The possession charge, filed in the Southern District of Texas, was transferred to the district court in Arizona for disposition by guilty plea with the consent of the U.S. Attorneys for the two districts, at the request of Cochran.
Cochran’s sentencing has been scheduled for July 27, 2009. At sentencing, Cochran may face a sentence of up to 30 years in prison, a fine of up to $250,000, a term of supervised release of any amount up to life, and he will be required to register as a sex offender in accordance with state and federal law. As part of the plea agreement, Cochran also agrees to undergo sex offender treatment and counseling as directed by the probation department.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The case was prosecuted by Trial Attorney James Silver of CEOS, Assistant U.S. Attorney Vincent Q. Kirby of the U.S. Attorney’s Office for the District of Arizona, and Assistant U.S. Attorney Robert Stabe of the U.S. Attorney’s Office for the Southern District of Texas. ICE conducted the investigation.
Swedish National Charged with Hacking and Theft of Trade Secrets Related to Alleged Computer Intrusions at NASA and CiscoRead the Press Release
Philip Gabriel Pettersson, aka "Stakkato," 21, a Swedish national, was indicted today on intrusion and trade secret theft charges.
The five-count indictment includes one intrusion count and two trade secret misappropriation counts involving Cisco Systems Inc. (Cisco), of San Jose, Calif., which is a provider of computer network equipment and producer of Internet routers. According to the allegations in the indictment Pettersson intentionally committed an intrusion between May 12, 2004, and May 13, 2004, into the computer system and network of Cisco. During the alleged intrusion some Cisco Internetwork Operating System code was allegedly misappropriated.
The indictment also charges two intrusion counts involving the National Aeronautics and Space Administration (NASA), including computers at the Ames Research Center and the NASA Advanced Supercomputing Division, located at Moffett Field, Calif. The indictment alleges Pettersson committed these intrusions on May 19, 2004, May 20, 2004 and Oct. 22, 2004.Cisco and NASA cooperated in the government’s investigation. Following the incident, Cisco reported that it did not believe that any customer information, partner information or financial systems were affected.
The Department of Justice will continue to work cooperatively with the Swedish authorities on the case.
An indictment is merely an accusation. All defendants are presumed innocent until proven guilty at trial beyond a reasonable doubt. The maximum penalty for each charge of intrusion and theft of trade secrets is 10 years in prison, a three year term of supervised release, and a fine of $250,000.
The prosecution is the result of an investigation by the FBI; U.S. Secret Service; NASA Office of Inspector General, Office of Investigations, Computer Crimes Division; and numerous additional federal agencies. Mark L. Krotoski, presently at the Criminal Division’s Computer Crime and Intellectual Property Section (CCIPS), is prosecuting the case with the assistance of Paralegal Lauri Gomez and Assistant Netterie Lewis. CCIPS Senior Counsel Kimberly Peretti also assisted in the prosecution. The Criminal Division’s Office of International Affairs has assisted on international coordination issues in the case.
Indictment
Justice Department Files Lawsuit Against California <br /> Department of Corrections and Rehabilitation to <br /> Enforce the Employment Rights of Air Force ReservistRead the Press Release
WASHINGTON - The Justice Department today announced it has filed a lawsuit in U.S. District Court in Sacramento, Calif., against the California Department of Corrections and Rehabilitation (CDCR), alleging that the CDCR failed to promptly reemploy U.S. Air Force reservist Dany Felix in violation of the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA).
USERRA was enacted to protect service members from being disadvantaged in their civilian careers due to serving in the uniformed services. Subject to certain limitations, USERRA requires employers to reemploy service members who have been injured while on active duty by accommodating those service members in a position they are qualified to perform and that approximates their pre-service position in seniority, pay and status.
The complaint alleges that in March 2003, Felix, employed as a CDCR medical technical assistant, was ordered to active duty together with his Air Force Reserve unit. Felix aggravated a pre-existing back injury and also sustained a new back injury while on active duty, resulting in his being honorably discharged in August 2006. Felix sought reemployment with the CDCR shortly before and for several months after his discharge.
The CDCR initially told Felix that it would not reemploy him as a medical technical assistant because of his physical injuries and, despite Felix’s requests, did not offer him reemployment in any position. The complaint alleges that when the CDCR finally offered to reemploy Felix between February and April 2007 in alternative positions, those positions paid substantially less or would have required significantly longer commutes, than his prior medical technical assistant position. According to the complaint, the CDCR failed to offer Felix suitable reemployment until May 2007 – nine months after his honorable discharge, and only after Felix had told the CDCR that he had found a job with another employer.
"Service members injured during active duty should not be penalized with the loss of their civilian jobs," said Loretta King, Acting Assistant Attorney General for the Civil Rights Division.
The Justice Department’s lawsuit was filed after receiving Felix’s complaint from the Labor Department’s Veterans’ Employment and Training Service, upon completion of its investigation.
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.
Federal Court Bars Individual Return Preparers and Sarasota Firms from Preparing Tax ReturnsRead the Press Release
WASHINGTON - A federal court in Tampa, Fla., has permanently barred Daniel Prewett from preparing tax returns for others, the Justice Department announced today. The court also barred Prewett from helping customers hide income offshore to avoid taxes, and from promoting other tax-dodging schemes. The court has also enjoined Prewett’s wife, Elizabeth George; former Prewett employees Frances Carlson, Elsie Chouinard and Natalie Swaney; and Prewett’s three tax preparation businesses, listed below. The injunctions against Chouinard and George permit them to continue preparing tax returns, but bar them from certain specified conduct when they do so. The individual defendants agreed to the injunctions.
The government sued the defendants in September of 2007, alleging in the civil injunction complaint that Prewett controlled a company that bought Jackson Hewitt tax preparation franchises in Florida in 1993, using a friend as nominal owner to conceal Prewett’s criminal record and ownership from the franchiser Jackson Hewitt Tax Service Inc. —the nation’s second largest tax preparation firm.
In late 2006, Prewett was arrested on federal charges related to cocaine distribution and money laundering. A jury convicted Prewett and he was given an 18-year sentence last June.
According to the injunction complaint, Prewett and the other defendants used a number of schemes to under-report customers’ tax liabilities, including helping customers set up fictitious domestic businesses to disguise fraudulent business deductions for bogus business expenses and personal assets, such as motorcycles, ATVs and jet skis. According to the complaint, one customer – a dentist – used the defendants’ scheme to claim fraudulent deductions for the cost and operational expenses of his $781,000 47-foot yacht, which he used solely for his personal pleasure. The defendants’ schemes cost the U.S. Treasury more than $130 million dollars, according to the complaint.
Injunction Details
Defendant
Date Enjoined
Daniel Prewett
May 1, 2009
Natalie Swaney
January 28, 2009
Frances Carlson
January 28, 2009
Elsie Chouinard
May 1, 2009
Elizabeth George
May 1, 2009
JH Investment Services, Inc.
April 24, 2008
JH Accounting
April 24, 2008
Simple Financial Solutions
April 24, 2008
John A. DiCicco, Acting Assistant Attorney General in charge of the Justice Department’s Tax Division, thanked trial attorney Grayson Hoffman, who handled the case, and Ricky Poole and Heather Walters-Cole, revenue agents with the IRS’s Small Business / Self-Employed Division, who conducted the investigation.
In the past decade the Justice Department’s Tax Division has obtained injunctions against more than 395 tax preparers and tax-fraud promoters. Information about these cases is available on the Justice Department Web site.
Three Ohio Residents Plead Guilty to Conspiracy to Commit Bank Fraud<br /> for Fraudulent Real Estate Loan SchemeRead the Press Release
WASHINGTON - Todd Gongwer of Dublin, Ohio; Lance Parker of Dublin, Ohio; and Joel Lee, of Galena, Ohio, pleaded guilty today to conspiracy to commit bank fraud, the Justice Department and Internal Revenue Service (IRS) announced. Gongwer, a licensed real estate agent, also pleaded guilty to tax evasion in the hearing before Judge Michael H. Watson in Columbus, Ohio. Parker also pleaded guilty to illegally structuring cash transactions.
According to the plea agreements and evidence presented during the plea hearings, from 2005 through 2007, Gongwer, Parker, Lee and others negotiated and participated in real estate deals in which each of them purchased a luxury home for a falsely inflated purchase price from real estate builder Thomas Parenteau in exchange for an undisclosed or disguised kickback. Gongwer admitted to using nominees to purchase at least two other luxury homes for inflated prices with kickbacks.
According to the plea agreements and evidence presented during the plea hearings, in each transaction, the buyers misrepresented their income and assets in order to obtain approximately 90% financing of the inflated purchase price. The buyers, seller Parenteau and Parenteau’s realtor, Bonnie Helt, attempted to justify the inflated purchase prices by creating and signing false work change orders and addendums which created the appearance that the inflated price represented additional substantial work to be completed on the homes. However, no such agreement was actually intended by any party, and the documents were not disclosed to the lenders. The object of each transaction was to use the loan proceeds in excess of the actual purchase price to fund hundreds of thousands of dollars in kickback payments to the buyers. The loans associated with the real estate purchases of Gongwer, Parker and Lee have all gone into default.
Gongwer and Parker also admitted to conducting a similar transaction involving Parker’s purchase of 15 condominium units in three buildings located in Columbus, Ohio, from Parenteu’s associate and architect, William Tarcy. Tarcy pleaded guilty to conspiracy to commit bank fraud and agreed to forfeit assets related to the offense in March 2009. Tarcy’s sale of the condominiums also involved inflated purchase prices, fraudulently obtained financing by Parker, and substantial kickback payments to Parker as the buyer.
Gongwer accepted responsibility for causing a fraud loss between $2.5 million and $7 million. Additionally, Gongwer pleaded guilty to tax evasion for failure to report income he received. According to his plea agreement, Gongwer worked for ReMax Affiliates Inc. in 2004 and was paid approximately $158,333.32 in gross income. Gongwer deposited that income into nominee accounts in order to conceal his receipt of that income from the IRS. Gongwer also failed to file income tax returns for tax years 2000 through 2005. The tax loss caused by his conduct is between $200,000 and $400,000.
Parker and Lee each accepted responsibility for causing a fraud loss between $400,000 and $1 million. Parker also pleaded guilty to structuring transactions to avoid federal reporting requirements. During 2007, Parker engaged in cash transactions in amounts less than $10,000 for the purposes of withdrawing cash from his bank accounts in order to finance gambling vacations in Las Vegas and to avoid federal currency transaction reporting requirements.
Judge Watson scheduled sentencing of all three defendants for a date after the July 2009 trial of Tom Parenteau, his accountant Dennis Sartain and his realtor Bonnie Helt, who were charged in April 2009 in a tax fraud and money laundering scheme. Gongwer faces a maximum sentence of 10 years in prison and a maximum fine of $500,000. Parker faces a maximum sentence of 10 years in prison and a maximum fine of $500,000. Lee faces a maximum sentence of five years in prison and a maximum fine of $250,000.
Acting Assistant Attorney General John A. DiCicco of the Justice Department’s Tax Division commended the investigative efforts of the IRS agents involved in this case. The prosecution is being handled by Tax Division Trial Attorneys Richard M. Rolwing, Jill M. Cassara, and Sean B. O’Connell.
More information about the Justice Department’s Tax Division and its enforcement efforts is available at http://www.usdoj.gov/tax/.
Ohio Man Pleads Guilty to Child Pornography ChargesRead the Press Release
Timothy Lantz, 57, of Columbus, Ohio, pleaded guilty today in Columbus to one count of transportation of child pornography and one count of failing to update his sex offender registration.
During today’s plea hearing before U.S. Magistrate Judge Mark R. Abel, Lantz admitted transporting and shipping child pornography from Ohio to New York through the Internet, and to failing to update his sex offender registration. Lantz admitted that in connection with the commission of his crimes, he had in his possession multiple computer hard drives containing approximately 1,200 digital videos and 9,000 digital images of one or more minors engaging in sexually explicit conduct. Lantz further admitted that he provided access for others to download his child pornography files either for free or in exchange for other child pornography images.
Lantz is scheduled to be sentenced no earlier than 60 days from today. He may face a sentence of 180 months in prison, a fine of up to $250,000, and up to a life-time term of supervised release. He will be required to continue to be registered as a sex offender in accordance with state and federal law.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The case was prosecuted by Assistant U.S. Attorney Deborah Solove of the Southern District of Ohio and Trial Attorney Mi Yung C. Park of CEOS. The case was investigated by the Cybercrimes Task Force of the FBI’s Columbus, Ohio, Field Office and CEOS’ High Technology Investigative Unit.
MS-13 Leader Sentenced to 60 Years in Federal Prison for <br /> Racketeering Conspiracy, Armed Robbery and Gun ViolationRead the Press Release
U.S. District Judge Deborah K. Chasanow today sentenced Victor Ramirez, a/k/a "Mousey," age 30, a native of El Salvador who resided in Hyattsville, Md., to 60 years in prison, followed by five years of supervised release.
Ramirez was convicted in November 2008, after a four-week jury trial, of conspiracy to conduct and participate in racketeering enterprise activities of the gang MS-13, including three murders and an attempted murder; armed robbery of a business; and using and carrying a gun in furtherance of a crime of violence.
"Victor Ramirez’ mission was to boost the level of MS-13's criminal activities on the streets of Maryland," said Assistant Attorney General of the Criminal Division Lanny A. Breuer. "Today’s sentence is a warning to gang members with similar aspirations that we won’t tolerate this sort of criminal behavior in our neighborhoods."
"The evidence proved that MS-13 sent Victor Ramirez to Maryland from El Salvador as part of a plan to strengthen the MS-13 gang and expand the gang’s criminal activity," said U.S. Attorney Rod J. Rosenstein.
According to testimony presented during trial, Ramirez was a leader in the Teclas Locos Salvatruchos (TLS) clique of MS-13 in El Salvador, and then in Maryland. During the trial, the jury viewed a video taken in the Quezaltepeque prison in El Salvador that showed Ramirez flashing MS-13 gang signs and displaying a "Mara Salvatrucha" tattoo across his abdomen. Ramirez admitted to fellow gang members in Maryland that he had been a "first word" (or clique leader) within the clique in El Salvador. After arriving in Maryland, Ramirez represented the TLS clique at MS-13 meetings in Maryland, the District of Columbia and Virginia.
Witnesses testified that Ramirez came to the U.S. from El Salvador through Mexico, and that he had arrived in Maryland with a fellow gang member. Both Ramirez and an MS-13 leader from El Salvador told witnesses that Ramirez had been sent to Maryland to strengthen MS-13 in Maryland, ensure that MS-13 rules were being strictly followed as established by the gang leaders in El Salvador, and in particular, to make the TLS clique in Maryland more violent. In addition, once he arrived in Maryland, Ramirez was instrumental in implementing "The Program," which was a scheme to rob and extort prostitution houses and other illegal businesses in order to collect funds for MS-13.
Witnesses testified that on Oct. 9, 2005, Ramirez and other MS-13 members, including co-defendant Eris Marchante-Rivas, attended a meeting of the TLS clique in Prince George’s County. During that meeting, one of the international leaders of the TLS clique spoke to the gang members by cellular telephone from a jail in El Salvador. After the meeting, Ramirez and fellow gang members drove to meet a number of gang members from other MS-13 cliques and discussed their plans to shoot rival gang members that day. Ramirez, Marchante-Rivas and other gang members went to the 5600 block of Quintana Street in Riverdale, Md., to kill rival gang members. Once they arrived, Ramirez and other gang members left their vehicles and approached Jose Cerda, Edward Trujillo and another person, all of whom were standing in front of a house on Quintana Street. Cerda and Trujillo were shot and killed by MS-13 gang members and the third individual was wounded by a gunshot.
Witnesses also testified about the murder of Alejandro Rubi-Martinez in Langley Park, Md., on Oct. 23, 2005. Ramirez was present in Langley Park during a discussion about an individual that they suspected of being a rival gang member. Ramirez asked a gang member to drive Ramirez to his apartment, where Ramirez retrieved a handgun. Ramirez later handed this gun to an MS-13 member who shot Rubi-Martinez in Langley Park that day. A witness testified that he drove with Ramirez away from this meeting of MS-13 members just before the shooting.
Witnesses also testified about Ramirez’s leadership role in implementing the "Program" of robbing and extorting brothels in Maryland. A witness testified that he accompanied Ramirez on a number of occasions when they robbed brothels and raped the prostitutes. Ramirez decided to rob the brothel on Blueridge Avenue in Wheaton, Md., and brought a .38 caliber revolver to use during the robbery. On Nov. 14, 2005,Ramirez, co-defendant Juan Jiminez-Hernandez, and three other MS-13 gang members from the TLS clique drove to the brothel. Once inside the apartment, the MS-13 members brandished the gun that Ramirez had brought, tied up and robbed the doorman and two other men who arrived later, and raped the prostitute at gunpoint.
Detectives and Montgomery County police officers testified that they arrived at the apartment that day after tracking a carjacking suspect to that location. A female plainclothes detective knocked on the door to the apartment, posing as a neighbor. The MS-13 members inside opened the door and attempted to grab the detective, not knowing that a number of officers and detectives were lined up in the hallway outside the door waiting to enter the apartment. Witnesses testified that Ramirez was one of the three men at the doorway who attempted to grab the female detective. Law enforcement witnesses further testified that they recovered a handgun on the floor of the apartment and some of the prostitute’s jewelry in Ramirez’s pockets. A fifth gang member, who had remained in the car, attempted to warn the other gang members about the arrival of the police, but was unsuccessful. He fled in the car, but was later apprehended by police.
Eris Marchante-Rivas, also known as "Strayboy," age 24, of Hyattsville, Md., was sentenced to 30 years in prison on Jan. 12, 2009, and Juan Jiminez-Hernandez, also known as "Sniroon," age 23, of Beltsville, Md., was sentenced on Nov. 10, 2008, to 12 ½ years in prison, followed by five years of supervised release.
Assistant Attorney General Lanny A. Breuer and U.S. Attorney Rod J. Rosenstein commended the Bureau of Alcohol, Tobacco, Firearms and Explosives; the FBI; the Prince George’s County Police Department; U.S. Immigration and Customs Enforcement; the Montgomery County Police Department;the Howard County Police Department; the Maryland National Capital Park Police; the Maryland State Police; Prince George’s County State’s Attorney Glenn F. Ivey and Montgomery County State’s Attorney John McCarthy and their offices for their work in this investigation and prosecution.
Mr. Breuer and Mr. Rosenstein thanked Assistant U.S. Attorneys Chan Park and Robert K. Hur, and David Jaffe, a Trial Attorney from the Justice Department’s Gang Unit, who prosecuted the case.
Justice Department to Monitor Elections in MississippiRead the Press Release
WASHINGTON - The Justice Department today announced that on May 5, 2009, it will monitor municipal elections in the towns of Cleveland, Como, Meridian and Sardis, Miss., to ensure compliance with the Voting Rights Act of 1965.
Under the Voting Rights Act, the Justice Department is authorized to ask the U.S. Office of Personnel Management to send federal observers to areas that are specially covered in the act or by a federal court order. Federal observers will be assigned to monitor polling place activities for the election in the town of Cleveland based on the special coverage provisions. The observers will watch and record activities during voting hours at polling locations in this jurisdiction, and Civil Rights Division attorneys will coordinate the federal activities and maintain contact with local election officials. In addition, Justice Department personnel will monitor the municipal elections in the towns of Como, Meridian and Sardis for compliance with the Voting Rights Act.
Each year, the Justice Department deploys hundreds of federal observers from the Office of Personnel Management, as well as departmental staff, to monitor elections across the country. In calendar year 2008, for example, 1,060 federal observers and 344 Department personnel were sent to monitor 114 elections in 76 jurisdictions in 24 states. To file complaints about discriminatory voting practices, including acts of harassment or intimidation, voters may call the Voting Section of the Justice Department’s Civil Rights Division at 1-800-253-3931.
More information about the Voting Rights Act and other federal voting laws is available on the Department of Justice Web site at www.usdoj.gov/crt/voting/ .
Justice Department Reaches Settlement with Consolidated Multiple Listing Service Inc.Read the Press Release
WASHINGTON — The Department of Justice announced today that it has reached a proposed settlement with Consolidated Multiple Listing Service Inc. (CMLS) that requires CMLS to change its rules to allow low-priced and innovative brokers to compete with traditional brokers in the Columbia, S.C., area. The Department said the rules caused consumers to pay more for residential real estate brokerage services in the Columbia area.
The Department’s Antitrust Division filed its proposed settlement in U.S. District Court in South Carolina. If approved by the court, the proposed settlement would resolve the Department’s antitrust concerns.
"Today’s settlement will remove unlawful impediments to competition for real estate brokerage services in the Columbia area and will lead to more choices and lower brokerage fees for South Carolina consumers," said Christine A. Varney, Assistant Attorney General in charge of the Department’s Antitrust Division. "For most Americans, purchasing a home is the most significant purchase of their life. This settlement demonstrates the Department of Justice’s continuing commitment to preserve competition in the real estate brokerage industry."
A multiple listing service (MLS), like the one operated by CMLS, is a joint venture of real estate brokers that combines its members’ home listings information into an electronic database that is made available to all member real estate brokers. This database serves as a clearinghouse for the members to communicate important information among themselves, such as descriptions of the listed properties for sale and offers to compensate other members if they locate purchasers for those listings. In addition, the database allows member brokers who represent buyers to search for nearly all the listed properties in the area that match the buyer’s needs.
Because the MLS’s database is the primary source of home listings information on virtually every home listed for sale in a given area, access to the database – and therefore MLS membership – is critical for any real estate broker seeking to serve clients successfully in the MLS’s service area. Consequently, the rules adopted by the MLS governing who can be a member and how members must behave can have a significant impact on competition among real estate brokers in the area served by the MLS.
In May 2008, the Department’s Antitrust Division filed a civil antitrust lawsuit against CMLS in U.S. District Court in South Carolina, challenging policies and rules that restrained competition among brokers in Columbia in several ways. CMLS imposed burdensome prerequisites to membership that prevented some real estate brokers, such as those who would likely compete aggressively on price, from listing homes for sale in the MLS’s database, ensuring that those brokers could not compete in the Columbia area. CMLS required applicants for membership to discuss the nature of their businesses with a committee of incumbent members and reserved the power to deny membership to brokers who they feared would compete too aggressively. CMLS also stabilized the price of brokerage services by forcing its broker members to provide a full set of brokerage services regardless of whether a client wanted the required services. The Department said that those rules prevented consumers from receiving the full benefits of competition, discouraged discounting, and threatened to lock in outmoded business models.
The proposed settlement with CMLS requires it to change those rules and prohibits it from adopting new rules that exclude real estate brokers from membership based on their business models or price structures. CMLS must allow any broker holding the appropriate license under South Carolina law to become a member and cannot continue to exclude brokers based on their business models. It will repeal rules that denied Columbia-area home sellers the ability to hire a real estate broker to perform only the specific services the seller desired, at a lower cost than the seller would pay a traditional, full-service broker. CMLS also will repeal its requirement that its member brokers use only the single contract approved by CMLS, which blocked home sellers from alternative arrangements that allowed them to avoid paying any commission to their broker if the sellers found buyers for their homes.
The proposed settlement, along with the Department’s competitive impact statement, will be published in the Federal Register, as required by the Antitrust Procedures and Penalties Act. Any person may submit written comments regarding the proposed final judgment within 60 days of its publication to John R. Read, Chief, Litigation III Section, Antitrust Division, U.S. Department of Justice, 450 5th Street, N.W., Suite 4000, Washington, D.C. 20530 (Tel: 202-307-0468). At the conclusion of the 60-day comment period, the court may enter the proposed final judgment upon a finding that it serves the public interest.
Columbus Woman Pleads Guilty to Money Laundering ConspiracyRead the Press Release
WASHINGTON - Marsha K. Parenteau of Columbus, Ohio, pleaded guilty today to conspiracy to commit money laundering, the Justice Department and Internal Revenue Service (IRS) announced. Parenteau appeared before Judge Michael H. Watson in Columbus.
During her plea hearing, Parenteau admitted that, from 2003 through 2008, she and others, including her husband, their shared accountant and her husband’s mistress, sought and obtained millions of dollars in loans from various financial institutions by falsely misrepresenting her income and assets, as well as the income and assets of others involved in the scheme.
According to the plea agreement and evidence presented during the plea hearing, Parenteau and others used the proceeds of the fraudulently obtained loans to, among other things, pay funds to her husband’s mistress and pay funds to Parenteau and her husband to fund their lifestyles, including the renovation of a property known as Loretta Estates. Loretta Estates is a mansion located on the Scioto River in Columbus, Ohio, which consists of approximately 4.5 acres with five buildings and more than 27,000 square feet of living space.
The value of the laundered funds specified in the plea for Mrs. Parenteau is between $400,000 and $1,000,000. Parenteau faces a maximum sentence of twenty years in prison and a maximum fine of $500,000.
Parenteau’s husband, Thomas E. Parenteau, accountant Dennis G. Sartain and realtor Bonnie Helt-Adams were charged with tax fraud, bank and wire fraud, money laundering and obstruction of justice in April 2009. Trial is currently scheduled for July 2009 before Judge Michael H. Watson in Columbus.
Acting Assistant Attorney General John A. DiCicco of the Justice Department’s Tax Division commended the investigative efforts of the IRS agents involved in this case. The prosecution is being handled by Tax Division Trial Attorneys Richard M. Rolwing, Jill M. Cassara, and Sean B. O’Connell.
More information about the Justice Department’s Tax Division and its enforcement efforts is available at http://www.usdoj.gov/tax/.
U.S. Intervenes in Suit Against Former Beef Suppliers to National School Lunch ProgramRead the Press Release
WASHINGTON -- The United States has intervened in a civil lawsuit against two former suppliers to the National School Lunch Program – Hallmark Meat Packing Company and Westland Meat Company Inc. – for submitting false and fraudulent claims to the Agricultural Marketing Service (AMS), a division of the U.S. Department of Agriculture (USDA), the Justice Department announced today. All ground beef containing defendants’ products was recalled by USDA as of Feb. 16, 2008, and defendants no longer supply beef to the National School Lunch Program or AMS.
The National School Lunch Program is a federally-assisted meal program operating in public and nonprofit private schools and residential child care institutions. The program, established under the National School Lunch Act in 1946, provides nutritionally balanced, low-cost or free lunches to children each school day.
The suit was originally filed by the Humane Society of the United States under the qui tam or whistleblower provisions of the False Claims Act (FCA). In its complaint, the Humane Society alleges that defendants knowingly and falsely represented to AMS that all cattle at their slaughtering facility are humanely handled in accordance with federal regulations and that no meat from disabled, non-ambulatory cattle was included in AMS’ purchases.
"The alleged misrepresentations by Hallmark and Westland could have impacted the health of many of our nation’s most vulnerable citizens--our schoolchildren," said Tony West, Assistant Attorney General of the Justice Department’s Civil Division. "Our intervention in this case demonstrates how seriously we will pursue allegations such as these."
Under qui tam statute, a private party, known as a "relator," can file an action on behalf of the United States and receive a portion of the recovery. Under the FCA, the government is entitled to treble damages plus civil penalties ranging from $5,500 to $11,000 per violation.
The Department’s Civil Division and the U.S. Attorney’s Office for the Central District of California will pursue the case. The government plans to file an amended complaint. The U.S. Department of Agriculture’s Office of Inspector General investigated the matter.
Two South Florida Men Indicted in Connection with Fraudulent ATM Business Opportunity VentureRead the Press Release
WASHINGTON – A Miami federal grand jury has charged two South Florida men with conspiracy, mail and wire fraud in connection with the operation of a fraudulent ATM business opportunity, the Justice Department announced. The criminal charges are part of the government’s continued nationwide crackdown on business opportunity fraud.
The indictment returned Thursday by the grand jury alleges that Andrew Steinberg, 39, of Lake Worth, Fla., Stephen Duffie, 32, of Miramar, Fla., and their co-conspirators fraudulently marketed and sold business opportunities nationwide under the name Fidelity ATM. Fidelity representatives allegedly told customers that, for purchase prices of $29,995 or more, they would receive ATMs installed in profitable, high-traffic locations. The indictment alleges that the conspirators falsely claimed that current Fidelity customers earned substantial profits and that new customers would also reap significant earnings. According to the indictment, Fidelity operated out of Palm Beach County, Fla., from approximately August 2004 to November 2006.
The indictment alleges that existing Fidelity customers complained to the defendants and their co-conspirators about low transaction levels and unprofitable locations, but that the defendants concealed this fact from new customers. According to the indictment, Fidelity provided potential new customers with the names and phone numbers of "references," or supposedly satisfied existing customers. The indictment alleges that Fidelity employees and friends of Steinberg pretended to be Fidelity customers during these reference calls.
Steinberg, Duffie and several others involved with Fidelity ATM previously were named as defendants in a 2006 civil suit brought by the Federal Trade Commission in the Southern District of Florida. Filings in that case show that more than 100 people from around the country paid Fidelity approximately $4.2 million for the ATM business opportunities.
"Business opportunity fraud is a very serious crime," said Tony West, Assistant Attorney General for the Justice Department’s Civil Division. "Working closely with the FBI and Postal Inspection Service, we have charged more than 100 individuals with felonies in the past five years. We will continue to investigate and prosecute those who prey on unsuspecting entrepreneurs and commit business opportunity fraud."
Steinberg and Duffie both were charged with one count of conspiracy to commit mail and wire fraud, seven counts of mail fraud and eight counts of wire fraud. If convicted, the defendants face a maximum statutory term of 20 years in prison, a possible fine and mandatory
restitution on the conspiracy count. They also face a maximum statutory prison term of 20 years on each of the mail and wire fraud counts, a possible fine and mandatory restitution.
Assistant Attorney General West and Alexander R. Acosta, U.S. Attorney for the Southern District of Florida, commended the efforts of the FBI, which investigated the criminal case, and the Federal Trade Commission. The case is being prosecuted by trial attorney Alan Phelps of the U.S. Department of Justice Office of Consumer Litigation.
An indictment is merely an allegation, and every defendant is presumed innocent until proven guilty beyond a reasonable doubt.
Three Teamsters Local 743 Workers in Chicago Convicted of Labor Fraud and Theft of Union Ballots in Bid to Rig Contested 2004 ElectionsRead the Press Release
WASHINGTON – A former officer and two employees of Teamsters Local 743 (Local 743) were convicted today in federal court in Chicago of federal labor fraud and theft charges in connection with stealing union ballots in an effort to rig two elections in favor of an incumbent slate of officers in 2004, officials of the U.S. Justice and Labor Departments announced.
A federal jury returned guilty verdicts today, after deliberating since April 29, 2009, against the three defendants whose trial began on April 6, 2009, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division; Patrick J. Fitzgerald, U.S Attorney for the Northern District of Illinois; Andrew Auerbach, Deputy Director of the Labor Department’s Office of Labor-Management Standards; James Vanderberg, Special Agent-in-Charge of the Labor Department’s Chicago Office of Inspector General; and Thomas P. Brady, Inspector-in-Charge of the U.S. Postal Inspection Service in Chicago.
In two closely-contested elections just months apart, the three trial defendants — together with former Local 743 President Robert Walston and two other defendants who pleaded guilty before trial — diverted to their friends, family and confidantes hundreds of mailed, official ballot packages that were intended for delivery to Local 743 members, and then cast the ballots or caused them to be cast to ensure election of the incumbent slate. Local 743 of the International Brotherhood of Teamsters, based in Chicago, represents more than 12,000 members engaged in warehouse, office, medical, service and other industries, and is one of the largest Teamsters locals in the country.
The defendants convicted at trial are: Richard Lopez, 55, of Maywood, Ill., who was secretary-treasurer of Local 743 between 2005 and 2007 and recording secretary from 1999 to 2005; Thaddeus Bania, 54, of Forest Park, Ill., who was Local 743’s comptroller from approximately 2001 to late 2007; and David Rodriguez, 36, of Chicago, who was an organizer for Local 743 between 2003 and 2007. Lopez and Bania were each convicted of all counts against them, including conspiracy to commit mail fraud and theft of union property. In addition, Lopez was convicted of two substantive counts of mail fraud and one count of theft of union property, and Bania was also found guilty on four counts of mail fraud and six counts of theft of union property. Rodriguez was convicted of two counts of mail fraud and three counts of theft of union property, and he was acquitted of conspiracy, two mail fraud counts and two theft counts.
U.S. District Judge Charles Kocoras set sentencing for Aug. 27, 2009. Each count of mail fraud carries a maximum penalty of 20 years in prison, and the conspiracy and theft counts each carry a maximum of five years in prison. All charges carry a maximum fine of $250,000 on each count.
Walston, 65, of Chicago, who was Local 743 president from 2001 until he retired in August 2007, pleaded guilty to related charges in March 2009 and testified as a government witness at trial. Mark Jones, 49, of Joliet, Ill., a Local 743 business agent from 2003 to 2006, also pleaded guilty and testified as a government witness. Cassandra Mosley, 52, of Gary, Ind., another Local 743 business agent from 2003 to 2006, also pleaded guilty in the case.
The jury found that the defendants deprived Local 743 of their honest services and of the ballots, which belonged to the union.
Evidence at trial and the plea agreements showed that Local 743 held elections for its officers every three years and had scheduled a mail ballot election for October 2004. Local 743 purchased official ballot packages consisting of an outer envelope in which a ballot would be delivered by mail to each member, a secret ballot, an envelope in which the secret ballot could be sealed, and a return envelope in which the sealed secret ballot could be mailed to Local 743 for tallying. In October 2004, two days after the ballot counting began, Local 743’s executive board suspended the tallying before its conclusion and scheduled a rerun election in December 2004. The incumbent slate of officers won the December 2004 election, and the Labor Department later filed a civil lawsuit challenging the election results. Under the terms of a court-ordered settlement in July 2007, the Labor Department’s Office of Labor-Management Standards supervised Local 743’s October 2007 election, in which a challenging slate of candidates prevailed.
Between August and December 2004, the defendants engaged in rigging the elections by diverting official ballot packages to their friends, family and associates, and casting the ballots or causing them to be cast in both October and December for incumbent officers, known as the "Unity Slate," to ensure their election. The defendants caused the addresses of certain Local 743 members to be changed in union records so that official ballot packages would be diverted in the mail to their friends, family and associates, rather then being delivered to Local 743 members in good standing who were eligible to vote in those elections. The defendants caused the addresses of Local 743 members in a computer database to be changed from the members’ previously recorded addresses to new addresses collected and provided by the defendants that in fact belonged to their friends, family and confidantes. The defendants then collected the fraudulently delivered ballot packages, and the ballots later were cast or caused to be cast in favor of the incumbent slate of officers. In addition, dozens of mailed ballots were stolen from a post office box after they had been returned as undeliverable and those ballots were voted in favor of the incumbent Unity Slate.
The government is being represented by Assistant U.S. Attorneys David Buvinger and Nathalina Hudson of the U.S. Attorney’s Office for the Northern District of Illinois and Vincent J. Falvo Jr., a Trial Attorney in the Labor Racketeering Unit of the Criminal Division’s Organized Crime and Racketeering Section.
President of Long Island Defense Contractor Pleads Guilty to Customer AllocationRead the Press Release
WASHINGTON — The owner and president of a Ronkonkoma, N.Y., designing and manufacturing company pleaded guilty to conspiring to allocate a U.S. Navy contract for Navy straps, the Department of Justice announced today. Navy straps are a type of tiedown equipment used by the U.S. Navy to secure munitions and other supplies for transport on ships and airplanes.
Thomas J. DeGirolamo pleaded guilty in the U.S. District Court in Islip, N.Y., to one count of participating in a conspiracy to allocate a U.S. Navy contract for Navy straps from at least March 2004 until November 2007.
"These charges should serve as a reminder that we will prosecute those who seek to deny the military competitive bids when it purchases good and services, which would help ensure the military’s access to quality goods and services at lower prices," said Christine A. Varney, Assistant Attorney General in charge of the Department’s Antitrust Division.
DeGirolamo is charged with carrying out the conspiracy with co-conspirators by:
- Engaging in discussions regarding the sale of Navy straps to the U.S. Department of Defense;
- Agreeing during those discussions not to compete on a certain contract with the U.S. Department of Defense;
- Developing products and submitting prices in accordance with the agreement reached;
- Selling Navy straps to the U.S. Department of Defense under the agreement at collusive and non-competitive prices; and
- Accepting payments for Navy straps sold at collusive and noncompetitive prices.
This is the 11th plea agreement to arise from an investigation into the military restraints industry. Military restraints are used to secure vehicles, aircraft, munitions, shipping containers and other specialized military cargo for land, sea and air transportation. Thomas Cunningham and Richard Barko, executives of a Pennsylvania supplier of military goods, pleaded guilty to rigging bids on U.S. Navy contracts for metal sling hoist assemblies and were sentenced in September 2008 to pay criminal fines of $10,000 each. In August 2008, Peck & Hale, a Long Island, N.Y., defense firm, was sentenced to pay a $275,000 criminal fine for bid rigging. In June 2008, Frank Granizo, the former president of a freight forwarding company, pleaded guilty to honest services wire fraud. Granizo was sentenced today to five months of home confinement.
Three Peck & Hale employees also have pleaded guilty in this investigation. Wilson Freire, a former government contracts manager, pleaded guilty to one count of bid rigging and one count of conspiracy to accept kickbacks. On April 8, 2009, he was sentenced to one year and one day in jail and to pay restitution in the amount of $20,750. In April 2008, Ransom Soper III, a former sales employee, pleaded guilty to one count of bid rigging and one count of conspiracy to commit wire fraud. Soper is scheduled to be sentenced May 26, 2009. A former sales director, Robert Fishetti, pleaded guilty to two counts of bid rigging. Fishetti also pleaded guilty to soliciting and accepting a kickback from another lower-tiered sub-contractor in return for favorable treatment in the award of subcontracts for finishing work on products supplied to the U.S. Department of Defense. In September 2008, he was sentenced to pay a criminal fine in the amount of $10,000 and to serve one year and two months of home confinement.
Certified Slings & Supply Inc., a Florida defense firm, pleaded guilty to one count of bid rigging and was sentenced in May 2008 to pay a $150,000 criminal fine. Roger Jacobi, the owner and president of a New York supplier of military goods, also pleaded guilty to one count of bid rigging and in April 2008 was sentenced to pay a $20,000 criminal fine.
Yong Zhu, the president of a Chino, Calif.-based importing and exporting company pleaded guilty to a one count charge of conspiracy to commit honest services wire fraud. On April 20, 2009, he was sentenced to pay a criminal fine in the amount of $5,000, restitution in the amount of $10,000 and four months of home confinement.
DeGiralamo is charged with allocating a contract in violation of the Sherman Act, which carries a maximum sentence of 10 years imprisonment and a fine of $1 million for individuals. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.
Today’s charge is an example of the Department’s commitment to protect U.S. taxpayers from public procurement fraud through its creation of the National Procurement Fraud Task Force. The National Procurement Fraud Initiative, announced in October 2006, is designed to promote the early detection, identification, prevention and prosecution of procurement fraud associated with the increase in contracting activity for national security and other government programs.
The investigation is being conducted by the Antitrust Division’s National Criminal Enforcement Section and the Defense Criminal Investigative Service of the U.S. Department of Defense. Anyone with information concerning bid rigging, kickbacks, fraud or other anti-competitive conduct regarding military tiedown equipment or cargo securing systems is urged to call the Antitrust Division’s National Criminal Enforcement Section at 202-307-6694 or the Long Island Office of the Defense Criminal Investigative Service at 631-420-4302.
Justice Department Sues Fitchburg, Mass., Housing Authority <br /> for Disability DiscriminationRead the Press Release
The Department today filed suit against the Fitchburg Housing Authority in Fitchburg, Mass., and its Executive Director Robert W. Hill alleging that they violated the Fair Housing Act when they refused to allow a tenant to transfer to a different apartment as a reasonable accommodation for her disabilities.
The suit seeks monetary damages for the victims, a court order barring future discrimination, and a civil penalty. 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. More information about the Civil Rights Division and the laws it enforces is available at www.usdoj.gov/crt . Additional information about the Fair Housing Act is also available at www.HUD.gov .
The suit, filed in the U.S. District Court for the District of Massachusetts, also alleges that the defendants have engaged in a denial of rights to a group of persons or a pattern or practice of discrimination because they implemented reasonable accommodation and transfer policies that discriminated against persons with disabilities other than mobility impairments.
The lawsuit originated from a complaint filed with the U.S. Department of Housing and Urban Development (HUD) by the complainant. After an investigation, HUD found reasonable cause to believe that unlawful discrimination had occurred and referred the matter to the Justice Department.
"Public housing authorities must operate under the full scope of the Fair Housing Act and not engage in any pattern or practice of discrimination. Reasonable accommodations must be made available to those who need them," said Acting Assistant Attorney General Loretta King for the Civil Rights Division.
"Landlords need to exercise flexibility and open-mindedness when people with disabilities seek an exception to policies, practices or procedures that may be necessary to afford that person the same enjoyment of an apartment that is enjoyed by others," said Bryan Greene, General Deputy Assistant Secretary for HUD’s Office of Fair Housing and Equal Opportunity. "Rigid policies that make only limited exceptions for people with disabilities do not take into consideration the variety of challenges that people face and the need to tailor accommodations to the needs of a specific individual."
Former Mississippi Deputy Sheriffs <br /> Sentenced to Serve Time on Civil Rights ViolationsRead the Press Release
Former Tippah County, Miss., Deputy Sheriff William Rogers and his son, former Tippah County Deputy Sheriff Jeffrey Rogers, were sentenced in federal court on April 30, 2009, for violating the civil rights of an arrestee by shooting him with a taser unnecessarily.
Chief Judge Michael P. Mills of the U.S. District Court for the Northern District of Mississippi sentenced William Rogers to serve three months in prison and pay a $12,500 fine. He sentenced Jeffrey Rogers to serve five days, and ordered him to be taken into custody immediately. The judge also ordered both defendants to surrender their law enforcement certifications and never to seek law enforcement positions in the future.
The defendants previously pleaded guilty to the civil rights offense and admitted that in June 2007, they used their tasers to attack the victim without justification. The arrestee suffered multiple burns and contusions from the taser attack. After the attack, the defendants stripped the arrestee of his clothing and chained him overnight in an isolation cell. After bragging about the incident to his fellow employees, defendant Jeffrey Rogers misled federal agents who were investigating the incident. In an effort to coverup his misdeeds, defendant William Rogers also filed a misleading police report about the incident.
The case was investigated by the FBI and was prosecuted by two trial attorneys from the Justice Department’s Civil Rights Division, Kathleen J. Monaghan and Michael J. Frank, and by Assistant U.S. Attorney Robert W. Coleman III of the Northern District of Mississippi
Five Donaldson, Arkansas, Men Indictedon Federal Civil Rights ChargesRead the Press Release
A federal grand jury in Fort Smith, Ark., has indicted five men from the Donaldson, Ark., area on federal civil rights charges as well as charges of making false statements to the FBI. The indictment was returned under seal on April 21, 2009.
The grand jury alleged that from June 15, 2008, through June 21, 2008, Jacob Wingo, 20, Dustin Nix, 21, Darren McKim, 38, Richard Robins, 42, and Clayton Morrison, 29, conspired to drive a woman and her young children from their home in Donaldson because they believed the woman was associating with African American men. The indictment also alleges that on June 21, 2008, Wingo, Nix and Morrison attempted to interfere with the victims’ federally protected housing rights by erecting a cross in the victims’ yard and attempting to set it on fire. Finally, the indictment charges Wingo, McKim, Robins and Morrison with making false statements to the FBI during the course of its investigation.
The five defendants were arraigned today before U.S. Magistrate Judge Barry Bryant and each entered a not guilty plea. A jury trial date has been set for June 12, 2009, in U.S. District court in Hot Springs, Ark., before U.S. District Judge Robert Dawson.
An indictment is merely an accusation, and the defendants are presumed innocent unless proven guilty. If convicted on the conspiracy charge, each defendant faces a maximum prison sentence of ten years and a fine of up to $250,000. Wingo, Nix and Morrison also face an additional maximum prison sentence of ten years and a fine of up to $250,000 on the cross-burning charge. Finally, Wingo, McKim, Robins and Morrison face an additional maximum prison sentence of five years and a fine of up to $250,000 for the false statement counts.
Agents from the FBI’s Little Rock Division investigated this matter. The case is being prosecuted by Assistant U.S. Attorney Matthew Quinn for the Western District of Arkansas and Special Litigation Counsel Gerard Hogan and Trial Attorney Benjamin Hawk of the Civil Rights Division of the Justice Department.
The Civil Rights Division is committed to the vigorous enforcement of every federal criminal civil rights statute, such as those laws that prohibit race-motivated acts of violence that interfere with federally protected activities.
Chinese Baby Furniture Company Pleads Guilty to Smuggling Internationally Protected WoodRead the Press Release
WASHINGTON— Style Craft Furniture Co. Ltd., pleaded guilty today in U.S. District Court in Camden, N.J., to one count of smuggling cribs containing internationally protected wood known as "ramin," the Justice Department announced.
The company was sentenced, according to the terms of a plea agreement, to pay $40,000 fine and serve three years of probation. In addition, the corporation must pay for an advertisement in a publication in China, and a second in a publication in the United States, advising other members of the industry of its actions and the consequences.
The company, a manufacturer of wooden baby furniture located primarily in China, imported approximately $15 million in declared value of wood furniture between 2004 and 2005.
"The Justice Department is committed to enforcing laws that protect timber, like the tropical hardwood ramin, from overharvesting and exploitation," said John C. Cruden, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. "Illegal timber harvesting is a growing problem and the Department is increasing its efforts to enforce the laws designed to protect plant species from extinction."
According to documents filed with the court, on approximately May 23, 2005, Style Craft Furniture had a container of baby furniture, including cribs and changing tables, shipped from China into the United States at Port Elizabeth, N.J. The furniture contained ramin wood. According to the factual statement, the invoice that Style Craft Furniture initially submitted to federal authorities when the shipment arrived stated that the wood was Brazilian Marupa and New Zealand Raduata Pine. Neither of these wood species is protected by international or U.S. law.
After the shipment was detained for further examination, Style Craft Furniture provided a re-export certificate, issued according to the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES), for the shipment. The certificate authorized on May 25, 2005, the re-export of 1.08 cubic meters of ramin from China. Sampling of the shipment indicated that the volume of ramin wood contained in the shipment was approximately 6.121 cubic meters.
The president of Style Craft Furniture Co. Ltd., Danny Chien, was also charged at the same time as Style Craft Furniture for the smuggling violation. Chien has agreed to participate in the District of New Jersey’s pretrial diversion program. Under his agreement, Chien accepts responsibility for his conduct, agrees to comply with conditions for a period of six months and, if he successfully completes the program, the charge against him will be dismissed.
Ramin is a light colored hardwood found in tropical forests in parts of Southeast Asia, including Indonesia and Malaysia. These forests also serve in part as habitat for endangered orangutan. Indonesia has one of the highest rates of deforestation of any county, much of it due to illegal timber harvest. As a result, the Indonesian government is attempting to combat the illegal harvest of timber, including ramin, in part to protect the remaining orangutan habitat. They have done this through a variety of means including listing ramin in CITES Appendix III, since 2001. International efforts to curb the illegal harvest of ramin, used in the manufacture of baby cribs, include its listing in Appendix II of CITES, effective Jan. 12, 2005.
CITES protects certain species of fish, wildlife and plants against overexploitation by regulating trade in the species. Species listed in Appendix II are those that may become threatened with extinction unless trade is strictly regulated.
For any trade of these species, CITES requires that the country of origin must issue a valid export permit. A permit can only be obtained if it has been determined that the export of the species will not be detrimental to the species’ survival and that the specimen was not obtained in violation of wildlife protection laws. The country of re-export must issue a valid re-export certificate. The export permit or re-export certificate must be obtained prior to importation into the United States.
The government’s tools to combat the over-harvesting and exploitation of timber and plants were expanded last year when Congress passed the Food, Conservation and Energy Act of 2008 which became effective May 22, 2008. The law amended the Lacey Act by extending its protection to a broader range of plants and plant products. The Lacey Act now, among other things, makes it unlawful, beginning Dec. 15, 2008, to import certain plants and plant products without an import declaration. The purpose of the amendments is to protect timber and plants from illegal harvest such as is occurring in parts of tropical rainforests and from exploitation before they need protection under CITES.
The investigation was conducted by special agents of the Office of the Inspector General of the U.S. Department of Agriculture. The case was prosecuted by the Justice Department’s Environmental Crimes Section and the U.S. Attorney’s Office for the District of New Jersey.
Three South Carolina Men Indicted on Federal Civil Rights ChargesRead the Press Release
A federal grand jury in Florence, S.C., indicted three men from Marlboro County, S.C., on charges relating to their attack on an African-American man and two white men in December 2007.
Thomas Howard Blue Sr., 48, Thomas Howard Blue Jr., 28, and Judson Hartley Talbert, 34, were charged in a 21-count indictment with violating and conspiracy to violate the civil rights of three South Carolina citizens, carjacking, use of fire to commit a felony, use of a firearm in relation to a crime of violence, evidence tampering and grand jury perjury. Each civil rights count carries a sentence of up to 10 years in prison and $250,000 fine. A trial has not yet been scheduled. An indictment is merely an accusation and defendants are presumed innocent unless proven guilty.
The grand jury charged that Thomas Howard Blue Sr. forcibly escorted Dahndre Moore out of his establishment known as the Stop and Shop because Moore is African-American. Once outside, Thomas Howard Blue Sr. forced Moore to the ground and Thomas Howard Blue Jr. threatened Moore with a chainsaw. While Moore was being attacked by the father and son, Judson Hartley Talbert stole Moore’s car and drove it to a site along the Great Pee Dee River known as Blue’s Landing. After being chased by the Blues, Moore escaped by running up the road and seeking refuge in a local home.
According to the indictment, Thomas Howard Blue Sr. retrieved a pistol and attacked Jackson Hayes, a white man whom Blue believed to be aiding Moore, and used the pistol to threaten another white man, Jamie Gray, who came to the Stop and Shop to retrieve Moore’s car. Thomas Howard Blue Sr. and Judson Hartley later burnt Moore’s car in an attempt to cover up their crimes. The indictment also alleges the three defendants committed perjury when testifying before a federal grand jury that was investigating the incident.
The case is being investigated by FBI Special Agent Steven Stokes with assistance from Special Agent Jeff Key of the Bureau of Alcohol, Tobacco, Firearms & Explosives and Investigator Shawn Feldner of the Marlboro County Sheriff’s Department.
Assistant U.S. Attorney A. Bradley Parham and Civil Rights Division Trial Attorney Michael J. Frank are prosecuting this case.
Statement of Attorney General Eric Holder on Guilty Plea by Ali Al-MarriRead the Press Release
"A short while ago, in an Illinois courtroom, Ali Saleh Kahlah Al-Marri pleaded guilty to conspiracy to provide material support to the al-Qaeda terrorist network. By entering into this agreement, al-Marri admitted that he worked for and provided material support to al-Qaeda with the intent to further its terrorism objectives and activities here in the United States.
"Without a doubt, this case is a grim reminder of the seriousness of the threat we, as a nation, still face. But it also reflects what we can achieve when we have faith in our criminal justice system and are unwavering in our commitment to the values upon which this nation was founded and the rule of law.
"Just days after taking the oath of office, President Obama directed me to lead an interagency review of the al-Marri case. At the time, al-Marri had been sitting in a naval brig in South Carolina for more than five years facing no charges.
"As a result of that review and an examination of the evidence gathered during the extensive investigation of al-Marri by the FBI and Justice Department prosecutors, we decided to charge al-Marri in federal court. In February, a federal grand jury in Illinois indicted al-Marri on two counts of providing and conspiring with others to provide material support to al-Qaeda.
"That led us to where we are today - the resolution of this case that will send al-Marri to prison for up to 15 years.
"There are many milestones we achieve today, not the least of which are –
--The conviction of an al-Qaeda sleeper agent captured in the United States;
-- The certainty that our criminal justice system can and will hold terrorists accountable for their actions, and;
-- The triumph of the exhaustive efforts of dedicated professionals at the Justice Department and many other agencies involved in this case.
"The Department of Justice is resolved to protect the American people in a manner consistent with our values and to prosecute alleged terrorists to the full extent of the law.
"Our nation will be stronger – and safer – for that approach.
"There are many goals to which we aspire, but none more important than defending our nation and its citizens from acts of terrorism while ensuring we abide by the rule of law and the spirit of our Constitution.
"I can say to you today that the Justice Department met that challenge in this case.
"We will be unwavering in the defense of our country, its citizens and the values that define us as a nation. We will keep the American people safe and our civil liberties intact – there is not a tension between the two. Let this serve as a warning to all those who might do us harm: you will be hunted down, you will be held accountable. Nothing will prevent the full might of the American government and its people and allies from vanquishing those who might try to do us harm, wherever you are.
"I would like to thank all of the law enforcement officers and prosecutors who dedicated so much to this case and this outcome, including the National Security Division’s Counterterrorism Section, the FBI Joint Terrorism Task Force in Springfield, Illinois, the U.S. Attorneys offices for the Central District of Illinois and the District of South Carolina, and many other federal, state and local agencies."
More Commercial Fishermen Sentenced for Illegal Harvesting of RockfishRead the Press Release
WASHINGTON—Three more commercial fishermen were sentenced this week in U.S. District Court in Greenbelt, Md., for illegally harvesting and under-reporting their catch of striped bass, also known as rockfish, the Justice Department announced. The sentencings are part of the on-going prosecution of individuals and wholesalers who have participated in a black market to overfish and under-report rockfish catch from the Chesapeake Bay and surrounding waterways, which is the largest spawning ground for striped bass on the East Coast.
John W. Dean of Scotland, Md., was sentenced today to one month in prison followed by five months of home detention. He was also fined $1,000 and ordered to pay $10,000 in restitution. Dean was responsible for overharvesting over $100,267 worth of rockfish.
Thomas Crowder Jr. of Leonardtown, Md., was sentenced on April 28, 2009, to serve 15 months in prison followed by three years supervised release. He was also ordered to pay a $5,000 fine and $96,250 in restitution. Crowder was responsible for overharvesting over $956,200 worth of rockfish.
Charles Quade of Churchtown, Md., was sentenced on April 27, 2009, to five months in prison followed by five months home detention as part of three years of supervised release. He was also ordered to pay a $1,000 fine and $15,000 in restitution. Quade was responsible for overharvesting over $151,500 worth of rockfish.
The restitution from each sentence is being paid to the congressionally-established National Fish and Wildlife Foundation, which has established a Chesapeake Bay Rockfish Restoration Account. The fines paid by the defendants will be paid into the Cooperative Endangered Species Conservation Fund, which is maintained by the U.S. Fish and Wildlife Service.
Dean, Crowder and Quade each pleaded guilty on Feb. 19, 2009, and admitted that from 2003 to 2007 they illegally harvested rockfish with the assistance of a Maryland designated fish check-in station. In each year, they failed to record some of the striped bass that was caught or recorded a lower weight of striped bass than was actually caught. The three commercial fishermen and the check-in station operator 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.
Charges were filed on April 20, 2009, against the fish wholesaler and its owner who operated the check-in station that assisted Dean, Crowder and Quade in violating the law. Golden Eye Seafood LLC and owner, Robert Lumpkins of St. Mary’s County, Md., were charged with four felony counts including conspiracy to violate the Lacey Act and three substantive violations of the Act.
Sentencing dates for the remaining commercial fishermen who have pleaded guilty to similar charges are listed below.
Keith A. Collins, May 28, 2009, 9:30 AM
Kenneth Dent, July 2, 2009, 9:30 AM
Jerry Decatur, Sr., July 1, 2009, 9:30 AM
Additionally, Cannon Seafood, a Washington, D.C., fish wholesaler, its owner, Robert Moore Sr. and his son Robert Moore Jr. are scheduled for sentencing on May 8, 2009, at 9:30 AM in U.S. District Court for the District of Columbia. 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.
As a result of the investigation and prosecution, two fish wholesalers and a total of 14 individuals have been charged, including today’s defendants. Additionally, four defendants have been sentenced to prison as a result of the investigation.
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.
Justice Department Settles Lawsuit Against Americraft Carton Inc. <br /> on Behalf of Michigan Army National GuardsmanRead the Press Release
The Department announced a settlement that, if approved by the court, will resolve its lawsuit filed on behalf of David D. Sweatt, a Michigan Army National Guard member currently serving in Iraq, against his former employer, Americraft Carton Inc. (Americraft).
The complaint was filed on March 13, 2009, in the U.S. District Court for the Western District of Michigan and alleged that Americraft violated the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA). The company discriminated against Sweatt by failing or refusing to reemploy him in his previous position as a production worker upon his return from National Guard duty, or, in the alternative, by terminating him without cause. After returning home from National Guard duty assisting the Border Patrol, Sweatt was deployed to Iraq, where he is currently serving.
Under the terms of the consent decree jointly submitted to the court by the parties, Americraft is required to pay Sweatt $6,075 in back wages and liquidated damages, and to reemploy Sweatt upon his return from his present military service. The consent decree also requires Americraft to modify its employment policies to comply with USERRA.
"The Civil Rights Division takes great pride in enforcing the employment rights of committed servicemembers such as Mr. Sweatt under USERRA," said Loretta King, Acting Assistant Attorney General for the Civil Rights Division.
The Department’s lawsuit was filed after the Labor Department’s Veterans’ Employment and Training Service’s completion of an investigation of Sweatt’s complaint and settlement efforts.
Additional information about USERRA can be found on the Justice Department Web site at www.servicemembers.gov, and the Labor Department’s Web site at www.dol.gov/vets/programs/userra/main.htmhttp://www.usdoj.gov/crt/emp.
Justice Department Obtains $200,000 in Housing Discrimination Settlement with Lakewood, New Jersey, Apartment ComplexRead the Press Release
The Department announced an agreement with the owners, a manager and a former manager of Cottage Manor Apartments in Lakewood, N.J., to settle allegations of discrimination on the basis of religion, national origin and race. Under the settlement, which must be approved by the U.S. District Court in New Jersey, the defendants must pay a total of $170,000 to identified victims of discrimination and an additional $30,000 to the government as a civil penalty.
The lawsuit originated from charges filed by the Department of Housing and Urban Development on behalf of current and former tenants of Cottage Manor Apartments. The complaint alleges that the apartment owners of Cottage Manor Apartments, Triple H. Realty LLC, its principal manager Harry Kantor and former managing agent Vincent Ortiz, violated the Fair Housing Act when they discriminated against Hispanic and African American tenants.
The defendants transferred or attempted to transfer Hispanic and African American tenants from their apartments located in its most desirable building to make room for Orthodox Jews whom they courted as new tenants from 2002 to 2004. The defendants then assigned the non-Jewish tenants to less desirable apartments in the rear of the property, which had fewer amenities and were less well maintained than the most desirable building at the front of the property. The defendants charged the incoming Jewish tenants less rent than they did to non-Jewish tenants for apartments of similar size.
"Segregating tenants and providing discounted rents based upon religion, national origin or race, is degrading and discriminatory," said Acting Assistant Attorney General Loretta King of the Civil Rights Division. "The Civil Rights Division will vigorously pursue such discrimination."
"Federal law has long made it illegal to favor or steer anyone to housing based on race, national origin or religion," said Bryan Greene, HUD's General Deputy Assistant Secretary for Fair Housing and Equal Opportunity. "This month commemorates the 41st anniversary of the Federal Fair Housing Act and for as many years, HUD and the Justice Department have worked hand in hand to eliminate discriminatory housing practices and recover relief for those harmed."
Fighting illegal housing discrimination is a top priority of the Justice Department. The Federal Fair Housing Act prohibits discrimination in housing on the basis of race, color, religion, sex, familial status, national origin and disability.
More information about the Civil Rights Division and the laws it enforces is available at www.usdoj.gov/crt. Persons who believe they have experienced or witnessed unlawful housing discrimination may call the Housing Discrimination Tip Line at 1-800-896-7743, e-mail the Justice Department at [email protected], or contact HUD at 1-800-669-9777. More information about the Fair Housing Act can also be found at www.usdoj.gov/fairhousing or www.hud.gov/fairhousing.
Former Oklahoma Water Treatment Supervisor Pleads Guilty for Falsifying Drinking Water Safety ReportsRead the Press Release
WASHINGTON— Christopher Neil Gauntt, the former supervisor of the Fort Gibson Water Treatment Plant in Fort Gibson, Okla., pleaded guilty today in U.S. District Court in Muskogee, Okla., to falsifying a monthly operating report that certified the safety of drinking water from the facility, the Justice Department announced.
Gauntt pleaded guilty to a one-count information charging him with a felony count of making a false statement. He admitted that on or about June 12, 2008, he submitted a monthly operating report containing false data for drinking water that is provided to residents of Fort Gibson as well as residents of Muskogee Rural Water Districts 4 and 7, Cherokee Water drinking water systems, and the water systems for Corral Creek Subdivision and Ozark Water Inc.
Under the federal Safe Water Drinking Act, which is administered and enforced by the Oklahoma Department of Environmental Quality, as well as the U.S. Environmental Protection Agency (EPA), the Fort Gibson water treatment plant must provide drinking water that meets standards to ensure that the water is safe for human consumption. Two of the standards that must be met include turbidity and chlorine. If turbidity, the measure of clarity of drinking water, or chlorine levels are not within levels required by the Safe Drinking Water Act, there is a potential risk that the water could retain microorganisms that carry waterborne diseases.
Gauntt admitted that he recorded levels in the monthly operating report submitted to Oklahoma DEQ that indicated the turbidity and chlorine levels were in compliance with required standards when he knew in fact they were not. In August 2008, Fort Gibson had sent a notice concerning this to residents who receive their drinking water from the Fort Gibson water treatment plant. Fort Gibson did not receive any information that anyone experienced any ill effects from the drinking water during that time period.
"All citizens should be confident that they are receiving drinking water that is safe for consumption. Those who knowingly compromise the regulatory protections of the Safe Drinking Water Act will be prosecuted," said John C. Cruden, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. "The prosecution in this case demonstrates that the government vigorously acts to ensure all of our citizens have good drinking water and the Safe Drinking Water Act’s requirements are being complied with."
"Accurate information is essential for the federal government and the State of Oklahoma to assure good drinking water for the public," said Warren Amburn, Special Agent in Charge of EPA’s criminal enforcement program in Dallas. "Individuals who submit false reports or bogus data undermine those efforts and they will be vigorously pursued."
"Falsifying information about the safety of the drinking water supply is dangerous," Oklahoma Attorney General Drew Edmondson said. "Ensuring an adequate supply of safe, clean water is an important public health issue. We will continue to work with our partners at all levels of government to protect the people of this state and the water they drink."
As a result of the felony conviction, Gauntt could be sentenced up to five years in prison and fined up to $250,000.
The case was prosecuted by the Department of Justice Environmental Crimes Section and was investigated by EPA’s Criminal Investigation and the Oklahoma Attorney General’s Office.
If there are any questions from the public regarding the case, please contact the Department of Justice Environmental Crimes Section at (202) 305-0321.