District Not Recorded
The source did not name an office we could identify. These records remain unassigned rather than guessed.
Northrop Grumman Corp. Settles False Claims Act Case for Defective Satellite PartsRead the Press Release
WASHINGTON – Northrop Grumman Corp., its subsidiary Northrop Grumman Space and Mission Systems Corp., and its predecessor TRW Inc. (collectively, Northrop) have agreed to settle for $325 million, False Claims Act allegations that Northrop provided and billed the National Reconnaissance Office (NRO) for defective microelectronic parts, known as Heterojunction Bipolar Transistors (HBTs), the Justice Department announced today.
The government’s investigation in the HBT Action concluded that Northrop and TRW failed to properly test and qualify certain HBTs manufactured by TRW from 1992 to 2002. As a result, Northrop and TRW integrated into NRO satellite equipment certain defective HBTs. The investigation further concluded that Northrop and TRW made misrepresentations about, and concealed certain material facts regarding the reliability of the HBTs.The settlement was announced today by Acting Assistant Attorney General for the Civil Division Michael F. Hertz and the U.S. Attorney for the Central District of California Thomas O’Brien.
“The settlement of the HBT case demonstrates that the Department of Justice will investigate even the most complex and challenging allegations,” said Michael F. Hertz, Acting Assistant Attorney General for the Justice Department’s Civil Division. “Today’s settlement demonstrates that defense contractors will be held accountable and that the government will aggressively pursue all allegations of misconduct in the procurement process.”
Today’s settlement resolves a qui tam or whistleblower lawsuit filed by Robert Ferro, Ph.D., an employee of The Aerospace Corporation. The government investigated Dr. Ferro’s
allegations and intervened in the lawsuit against Northrop in November 2008. Ferro’s suit was filed in US. District Court in the Central District of California in 2002. Under the agreement reached today, Dr. Ferro will receive $48.75 million as his share of the recovery in the HBT action under the qui tam provisions of the False Claims Act.At the same time, the Department, assisted by the Air Force General Counsel’s office, and Northrop also settled a Contract Disputes Act action brought by Northrop concerning its contract with the Air Force to develop and produce the Tri-Service Standoff Attack Missile (TSSAM), a low-cost, low-observable, tactical cruise missile. That suit, filed by Northrop in 1996 in the U.S. Court of Federal Claims in Washington, concerned the government’s decision to terminate Northrop’s TSSAM contract due to cost and schedule overruns. The TSSAM Action settled for $325 million and the settlement resolves Northrop’s claims in excess $1 billion, bringing to a close this 12-year litigation.
The TSSAM matter was handled by the Commercial Litigation Branch of the Department’s Civil Division, together with counsel for the Air Force. The HBT investigation was conducted by the Office of Inspector General for the NRO, with the assistance of the Defense Criminal Investigative Service, the Air Force Research Laboratory, Sensors Directorate at Wright Patterson Air Force Base, together with Civil Division’s Commercial Litigation Branch and the U.S. Attorney’s office for the Central District of California.
The Department acknowledges the efforts of the late David W. Long, Senior Trial Counsel, Civil Division for his work while battling cancer in initiating, and the early development of, the HBT investigation for which work he received the Attorney General’s Mary C. Lawton award.
Former Jackson Police Department Officer Pleads Guilty to Civil Rights ViolationRead the Press Release
WASHINGTON - Jonathan Haynes, a former police officer with the Jackson Police Department, pleaded guilty today in federal court in Jackson, Miss., to stealing money from a citizen during an off-duty encounter.
During his plea, Haynes acknowledged that he abused his authority as a law enforcement officer when, on June 21, 2008, while he was off-duty but in uniform, he abused his police powers by stopping and searching two men without legal justification and by stealing $100 from one of the men. Haynes admitted today that his conduct violated the constitutional rights of the two men.
Haynes sentencing hearing is scheduled for June 15, 2009. Haynes faces a maximum penalty of up to one year in prison.
The case was investigated by the FBI. The case is being prosecuted by Trial Attorney Erin Aslan of the Justice Department's Civil Rights Division and Assistant U.S. Attorney Glenda Haynes of the U.S. Attorney's Office for the Southern District of Mississippi. The defendant is not related to Assistant U.S. Attorney Haynes.
Fact Sheet: Department of Justice Efforts to Combat Mexican Drug CartelsRead the Press Release
WASHINGTON – The increased efforts and reallocation of personnel recently announced by the Department of Justice builds on the foundation of expertise and experience gained from ongoing efforts to combat Mexican drug cartels in the United States and to help Mexican law enforcement battle cartels in its own country.
BUREAU OF ALCOHOL, TOBACCO, FIREARMS AND EXPLOSIVES (ATF)
ATF is on the frontline in the fight against violent crime, particularly firearms trafficking and gun-related violence associated with organized gangs and drug trafficking organizations. Working in conjunction with domestic and international law enforcement partners, ATF’s efforts deny the “tools of the trade” to the firearms trafficking infrastructure of criminal organizations operating in Mexico and along the border.
ATF is relocating 100 personnel to the Houston Field Division to support the new ATF intelligence-driven effort, known as Gunrunner Impact Teams (GRITs). The teams will focus ATF’s violent crime-fighting and firearms trafficking expertise, along with its regulatory authority and strategic partnerships, to combat violence along the U.S.-Mexico border.
Project Gunrunner:
Cooperation among federal, state and local law enforcement agencies and the government of Mexico is the foundation of Project Gunrunner, ATF’s national initiative to stem firearms trafficking to Mexico by organized criminal groups. Project Gunrunner has resulted in approximately 650 cases by ATF, in which more than 1,400 defendants were referred for prosecution in federal and state courts and more than 12,000 firearms were involved.
As part of the Recovery Act funding, ATF received $10 million for Project Gunrunner efforts, aimed at disrupting firearms trafficking between the U.S. and Mexico, to include hiring 25 new special agents, six industry operations investigators (IOIs), three intelligence research specialists and three investigative analysts. The funding will establish three permanent field offices, dedicated to firearms trafficking investigations, in McAllen, Texas; El Centro, Calif.; and Las Cruces, N.M (including a satellite office in Roswell, N.M.). Previously, approximately 148 special agents were dedicated to investigating firearms trafficking on a full-time basis and 59 IOIs were responsible for conducting regulatory inspections of federally licensed gun dealers, known as federal firearms licensees (FFLs) along the Southwest border.
As the sole federal agency that regulates FFLs, ATF’s cadre of IOIs work to identify and prioritize for inspection those FFLs with a history of noncompliance that represent a risk to public safety; who sell the weapons most commonly used by drug trafficking organizations in the region; and have numerous unsuccessful traces and a large volume of firearms recoveries in high-crime areas. Along the Southwest border, ATF inspected approximately 1,700 FFLs in FY 2007 and 1,900 in FY 2008.
eTrace:
The cornerstone of ATF’s Project Gunrunner is eTrace, which allows law enforcement agencies to identify trends of drug trafficking organizations. In 2008, ATF deployed eTrace technology to the nine U.S. consulates in Mexico to facilitate the paperless exchange of gun crime data in a secure Web-based environment. eTrace allows law enforcement representatives to electronically submit firearms trace requests, to monitor the progress of traces, to retrieve completed trace results and to query firearm trace related data in a real-time environment. In FY 2008, Mexico submitted more than 7,500 recovered guns for tracing, most of which were traced to sources in Texas, California and Arizona.
ATF has analyzed firearms recovered in Mexico from 2005-2008 and has identified the following weapons most commonly used by drug trafficking organizations: 9mm pistols; .38-caliber revolvers; 5.7mm pistols; .223-caliber rifles; 7.62mm rifles; and .50 caliber rifles.
ATF is developing a Spanish-language eTrace to make firearms tracing easier and more accessible to law enforcement partners in Mexico and Central America. ATF’s goal is to deploy the system to all 31 states in Mexico, giving law enforcement a better picture of firearms trafficking routes, trends and organizations throughout both nations.
Training and Awareness Efforts:
In calendar year 2008, ATF trained more than 750 law enforcement officers from various Mexican federal and state agencies on firearms identification, firearms trafficking, firearms tracing, eTrace, explosives identification and post-blast investigation. With the assistance of ATF’s Mexico City office and the Narcotics Affairs Section of the U.S. Department of State, ATF anticipates conducting numerous additional courses in these subject areas in 2009.
ATF will also concentrate training and industry awareness efforts on the Southwest Border. In partnership with the firearms industry association National Shooting Sports Foundation, ATF will conduct “Don’t Lie for the Other Guy” seminars in southern Texas, Arizona and California. The campaign educates licensed firearms dealers about the straw purchase of firearms, which is a federal felony offense, and helps them identify potential straw purchase transactions so they can confidently deny the sales.
ATF in Mexico:
ATF’s activities in Mexico are coordinated through the ATF attaché office located in Mexico City. ATF Southwest field divisions (Dallas, Houston, Los Angeles and Phoenix) have established border liaison special agent contacts with representatives from the Mexican Attorney General’s Office. The border liaisons meet regularly to coordinate firearms trafficking investigations. ATF has five personnel in Mexico at this time and will add an additional four personnel using a portion of the $10 million that ATF received in stimulus funding. The Mexican Attorney General’s office also has a representative in ATF’s Phoenix Field Division.
DRUG ENFORCEMENT ADMINISTRATION (DEA)
In collaboration with Mexican law enforcement, DEA is actively working to systematically dismantle the cartels. As the largest law enforcement presence in Mexico with 11 offices, and a decades-long history of working with the Mexican government, DEA has a strategic vantage point from which to assess the drug trafficking situation in Mexico, the related violence, its causes and its historical context. DEA is placing 16 new positions in its Southwest border field divisions. With this increase, 29 percent of DEA’s domestic agent positions (1,180 agents) are now allocated to its Southwest border field divisions. DEA is also forming four additional Mobile Enforcement Teams (METs) to specifically target Mexican methamphetamine trafficking operations and associated violence, both along the border and in U.S. cities impacted by the cartels. MET Teams will be placed in DEA’s El Paso, Texas; Phoenix; Chicago; and Atlanta Field Divisions.
Shortly after Congress approved the Sensitive Investigative Unit (SIU) program in 1996, the Mexico City SIU was established, and DEA now works with a number of trusted counterparts throughout the country. DEA works closely with these vetted units to collect and analyze sensitive law enforcement information and to further the case development against and the prosecution of major drug trafficking organizations.
Working with Mexican counterparts, DEA and U.S. interagency partnerships have taken the offensive against Mexico-based cartels on their own turf and sought to systematically identify and dismantle U.S.-based cells of these Mexican cartels. Project Reckoning and Operation Xcellerator are recent examples of this U.S.-Mexico collaboration. Both actions were investigated and prosecuted in multiple Organized Crime Drug Enforcement Task Forces (OCDETF) cases, involving DEA and other OCDETF investigative agencies, state and local law enforcement, numerous U.S. Attorneys’ Offices, and the Department’s Criminal Division.
Special Operations Division
The mission of the Special Operations Division (SOD), a multi-agency task force spearheaded by the DEA, is to establish seamless law enforcement coordination, strategies and operations aimed at dismantling national and international narco-trafficking, narco-terrorists and other criminal organizations by attacking their command and control structure. SOD is able to facilitate coordination and communication across and among multiagency networks with overlapping investigations to ensure that tactical and strategic intelligence is shared between all of SOD's participating agencies, including the U.S. Attorneys' Offices and various intelligence centers such as the El Paso Intelligence Center and the OCDETF Fusion Center.
Project Reckoning:
Project Reckoning was a 15-month operation targeting the Gulf Cartel and remains one of the largest, most successful joint law enforcement efforts ever undertaken between the United States and Mexico. Due to the intelligence and evidence derived from Project Reckoning, during 2008 the United States was able to secure indictments against Gulf Cartel leaders Ezekiel Antonio Cardenas-Guillen (brother of extradited Kingpin Osiel Cardenas-Guillen), Eduardo Costilla-Sanchez and Heriberto Lazcano-Lazcano, head of Los Zetas. Project Reckoning resulted in more than 600 arrests in the United States and Mexico, including 175 active Gulf Cartel/Los Zetas members, and the seizure of thousands of pounds of methamphetamine, tens of thousands of pounds of marijuana, nearly 20,000 kilograms of cocaine, hundreds of weapons, and $71 million.
Operation Xcellerator:
Operation Xcellerator began in May 2007 from an investigation in Imperial County, Calif., and targeted the Sinaloa Cartel. Operation Xcellerator was recently concluded and resulted in more than 700 arrests, the seizure of more than $59 million in U.S. currency, 1,200 pounds of methamphetamine, 12,000 kilograms of cocaine, 1.3 million ecstasy pills, three aircraft and three maritime vessels.
El Paso Intelligence Center (EPIC):
Led by the DEA, EPIC is a national tactical intelligence center that focuses its efforts on supporting law enforcement efforts in the Western Hemisphere, with a significant emphasis on the Southwest border. Through its 24-hour watch function, EPIC provides immediate access to participating agencies’ databases to law enforcement agents, investigators and analysts. This function is critical in the dissemination of relevant information in support of tactical and investigative activities, deconfliction and officer safety. EPIC also provides significant, direct tactical intelligence support to state and local law enforcement agencies, especially in the areas of clandestine laboratory investigations and highway interdiction efforts.
EPIC’s Gatekeeper Project is a comprehensive, multi-source assessment of trafficking organizations involved in and controlling movement of illegal contraband through “entry corridors” along the Southwest border. The analysis of Gatekeeper organizations not only provides a better understanding of command and control, organizational structure and methods of operations, but also serves as a guide for policymakers to initiate enforcement operations and prioritize operations by U.S. anti-drug elements.
Implementation of License Plate Readers (LPR) along the Southwest border has provided a surveillance method that uses optical character recognition on images that read vehicle license plates. The LPR Initiative combines existing DEA and other law enforcement database capabilities with new technology to identify and interdict devices being utilized to transport bulk cash, drugs, weapons, as well as other illegal contraband.
The National Seizure System (NSS) consists of seizure information relating to drugs, weapons, currency, chemicals and clandestine laboratory seizures reported to EPIC by federal, state and local law enforcement agencies from Jan. 1, 2000, to the present. The NSS database contains approximately 400,000 records of seizure events.
In support of the Bulk Currency Program, EPIC established a depository for detailed bulk currency seizure information from both domestic and foreign law enforcement agencies. In addition, EPIC analyzes volumes of bulk currency seizure data and develops various reports such as state link reports which are routinely sent to federal law enforcement agencies throughout the country to provide investigative leads. EPIC also responds to requests for bulk currency seizure data from agents and officers in the field.
The ATF Southwest Border Unit, which also houses the EPIC Gun Desk, serves as the focal point for the collection, analysis, and dissemination of weapons related investigative leads derived from federal, state, local and international law enforcement agencies.
DEA Work with Mexico
DEA and the Department of State, Bureau of International Narcotics and Law Enforcement Affairs have provided training to Mexican officials on a variety of investigative, enforcement and regulatory methods related to methamphetamine trafficking and enforcement. This training included instruction on clandestine laboratory investigations, precursor chemical investigations and drug identification. During FY 2008, 1,269 Mexican federal, state and local counterparts were trained. DEA has also donated eight refurbished trucks used in clandestine laboratory enforcement operations to Mexico.
DEA established a joint program with U.S. Customs and Border Patrol to monitor and investigate the importation of precursor chemicals into the United States, headed for Mexico. The program targets containerized cargo consignments and air cargo.
U.S. MARSHALS SERVICE (USMS)
USMS has stepped-up its efforts along the Southwest border, deploying 94 additional Deputy U.S. Marshals during the last eight months and sending four additional deputies to Mexico City to assist the USMS Mexico City Foreign Field Office (MCFFO).
Twenty-five new Criminal Investigators-Asset Forfeiture Specialists have been placed in USMS asset forfeiture units in the field. The new positions are unique in that they will be solely dedicated to the USMS Asset Forfeiture Division and will support U.S. Attorneys’ Offices and investigative agencies in investigations of cartels and other large-scale investigations.
International Fugitive Investigations:The USMS Investigative Operations Division (IOD) coordinates international investigations with USMS-led district and regional fugitive task forces, and other U.S. law enforcement, and provides guidance and direction on the international process.
In FY 2008, the USMS opened 790 international fugitive investigations, with 303 fugitive cases sent to Mexico. Of these cases, 206 were investigated and closed. For FY 2009 to date, the USMS has opened 376 international fugitive investigations, with 143 fugitive cases sent to Mexico. A total of 120 arrests have been made in Mexico through March 31, 2009.
Foreign Fugitive Investigations:
Once a foreign fugitive is located, an investigation is conducted to determine if the fugitive is in the United States legally. In FY 2008, the USMS opened 707 foreign fugitive investigations, with 290 requests from Mexico. Sixty-six individuals were arrested and returned to Mexico. For FY 2009 to date, the USMS has opened 180 foreign fugitive investigations, with 69 requests from Mexico. A total of 37 have been arrested through March 31, 2009. There has been nearly a 250 percent increase in the number of fugitive arrests since 2003.
Mexico Investigative Liaison Program (MIL):
The Mexico Investigative Liaison Program (MIL) was created to address international fugitive matters along the Southwest border. The purpose of this district-based, cross-border violent crime initiative is to enhance the effectiveness of the USMS in the investigation and apprehension of U.S. fugitives located in Mexico and to coordinate the location and apprehension of foreign fugitives from Mexico.
The MIL currently has 33 Deputy U.S. Marshals assigned to the five Southwest border districts, as well as two adjoining USMS districts, who operate under the auspices of the MCFFO and Chief of Mission when conducting cross-border investigations. They were responsible for investigating more than 240 cross-border investigations and 50 arrests in 2008.
Mexico Foreign Field Office (MCFFO):
The MCFFO program helps to coordinate, support and train foreign law enforcement in an aggressive approach to apprehending and extraditing international fugitives – particularly those wanted in the United States – with special attention given to violent criminals and upper-level drug trafficking fugitives.
Located at the U.S. Embassy, the MCFFO is staffed by three full-time criminal investigators. Deputy U.S. Marshals in foreign field offices serve as the primary liaisons for fugitive investigations, provisional arrest warrants, extraditions and deportations, oversight of USMS cross-border investigations, and international law enforcement training.
The Marshals Service’s chief law enforcement partners in Mexico are the Procuraduría General de la República (PGR-Mexico Attorney General’s Office), the Agencia Federal de Investigación (AFI-Mexico Federal Law Enforcement Agency), the Instituto Nacional de Migración (INM-Mexico Immigration), and various state judicial police entities, including the Sonora State Police.
International Law Enforcement Training:
USMS will also enhance efforts under the International Training Program to meet the training needs of Mexican law enforcement agencies on the federal and state level, in the areas of fugitive apprehension, tactical operations, judicial security and dignitary protection, witness protection, prisoner custody, housing and transportation and asset forfeiture. The next two training classes are scheduled for April and May 2009. The USMS has been providing training to its Mexican counterparts since 2001.
Eighteen officers from the Instituto Nacional de Migración (INM-Mexico Immigration), a Special Unit from the Mexico State of Tamaulipas, and the newly-formed Secretaría de Seguridad Pública del Distrito Federal (SSP) in Mexico were trained as part of this program during a two-week fugitive investigative course sponsored by IIB and the USMS Southern District of Texas, Laredo Division.
Since the inception of the Mexico Fugitive Investigators Training Program in 2001, 185 law enforcement officers from Mexico have been trained in fugitive apprehension techniques. As a result, there has been a 240 percent increase in the number of cross-border fugitive felon arrests since the inception of the program.
Domestic Fugitive Investigations – Southwest Border Districts:
Currently, the USMS is the lead agency for 82 district-managed fugitive task forces, and seven Regional Fugitive Task Forces (RFTFs), including the following task forces in the five Southwest Border districts:
- The Pacific Southwest Regional Fugitive Task Force (Southern California)
- The District of Arizona High Intensity Drug Trafficking Area (HIDTA) Enforcement Agencies Task Force
- The District of New Mexico Southwest Investigative Fugitive Team
- The Western District of Texas Lone Star Fugitive Task Force
- The Southern District of Texas Gulf Coast Violent Offenders Task Force
The task forces operate in areas ranging from major metropolitan cities to rural, isolated areas along the Mexican border. Most of the district task forces operating directly on the Southwest border are partnered with all federal agencies and specifically support the Southwest Border HIDTA and the initiatives sponsored by the various partner agencies. These partnerships permit the USMS to act as a force multiplier well beyond the traditional fugitive apprehension role.
For FY 2009 to date, these five task forces have arrested 6,912 federal, state and local fugitives, including 208 alleged gang members, 143 individuals wanted for murder, 376 individuals wanted on weapons charges and 2,242 individuals wanted on narcotics charges. Through March 31, 2009, the five task forces have closed 8,335 warrants. They also have seized 114 firearms, 19 vehicles, more than $84,000 in cash, and approximately 240 kilograms of narcotics. In FY 2008, these five task forces arrested 15,564 federal, state, and local fugitives, closed 19,157 warrants, and seized 267 firearms, $648,333 in cash, and more than 2,730 kilograms of narcotics.The USMS has apprehension authority for approximately 90 percent of all fugitives wanted under the OCDETF program, which is an important element of the Department’s drug supply reduction strategy. Of the more than 7,200 active OCDETF warrants nationwide, more than 1,100 originate in the Southwest region. In FY 2008, the OCDETF Program along the Southwest border cleared 189 fugitive warrants. In FY 2009 to date, the OCDETF Program along the Southwest border has cleared 44 fugitive warrants.
The USMS task force network is supported by the Technical Operations Group (TOG), which provides critical, state-of-the-art electronic and air surveillance in fugitive investigations, judicial security investigations and protection details, and supports other USMS missions. To increase its intelligence-gathering capabilities, the TOG has designed a radio system in response to a critical needs assessment in the Southern District of Texas with plans to begin construction soon along the Texas-Mexico border.
FEDERAL BUREAU OF INVESTIGATION (FBI)
The FBI is taking proactive measures to assess and confront this heightened threat to public safety on both sides of the U.S.-Mexico border, by creating a Southwest Intelligence Group (SWIG), which will serve as a clearinghouse of all FBI activities involving Mexico. The FBI will also increase its focus on public corruption, kidnappings and extortion relating to Southwest border issues.
In addition, the FBI is participating in multiple bi‑lateral multi‑agency meetings and working groups to hone strategies to address the problem. The FBI is well-equipped to deal with cartels, through established entities such as the National Gang Intelligence Center. The FBI has task forces throughout the country working to disrupt gang activity. The FBI’s San Antonio division currently operates two Safe Street/Gang task forces addressing border violence in San Antonio, Texas, and the Rio Grand Valley.
In calendar year 2008, the FBI’s offices in San Diego; Albuquerque, N.M.; Phoenix; El Paso, Texas; Houston; Dallas; Los Angeles; and San Antonio, Texas, maintained hundreds of Organized Drug Enforcement Task Forces Program (OCDETF) and criminal enterprise cases with a nexus to Mexican drug trafficking. The FBI has several hundred agents working these issues in these eight Divisions, resulting in thousands of arrests, indictments and convictions in FY2008.
The FBI has established six Border Corruption Task Forces focusing on drug and general border corruption tied to the southwest border, and is actively encouraging southwest border field offices to expand their use of Border Corruption Task Forces.
TAG Initiative:
The Transnational Anti-Gang (TAG) Initiative was developed and implemented in October 2007 to enhance cooperation, coordination and augmenting investigative capabilities between the FBI and law enforcement agencies in El Salvador, Guatemala, Honduras and Mexico. The goal of the initiative is to aggressively investigate, disrupt and dismantle violent gangs whose activities rise to the level of criminal enterprises and who pose the greatest multi-jurisdictional threat.Already, the TAG has seen successes, such as in September 2008, when TAG investigators arrested five MS-13 gang members who were transporting a cache of anti-tank weapons and military small arms. Also, FBI agents from Charlotte, N.C., worked with TAG investigators in actions that led to the indictment of 26 MS-13 gang members in June 2008, including Manual Ayala, who allegedly directed gang activities in the United States from his jail cell in El Salvador.
CAFÉ Initiative:
The Central American Fingerprint Exploitation Initiative (CAFÉ), a criminal file/fingerprint retrieval initiative, was developed by the MS-13 National Gang Task Force and the Policia Nacional Civil (PNC) to store criminal fingerprints of gang members from Chiapas, Mexico, and the Central American countries of El Salvador, Guatemala, Belize and Honduras. This information is incorporated into the FBI’s Criminal Justice Information Services database and is available to all U.S. local, state and federal law enforcement agencies. By incorporating these records into a searchable database, law enforcement agencies like the PNC can access the data through their own Automated Fingerprint Identification Systems.Since 2006, the FBI has searched, processed and incorporated more than 72,000 criminal records from El Salvador, Guatemala, Belize, Honduras and Chiapas, Mexico, into the FBI’s Integrated Automated Fingerprint Identification System.
CRIMINAL DIVISION
Office of International Affairs (OIA):
Mexico and the United States continue to make positive strides to increase the number of fugitives returned to the country where they committed serious crimes. Extradition records have been consistently broken for the past three years. In 2008, Mexico extradited a total 95 fugitives, 78 of whom were Mexican nationals, and 23 of whom were extradited for drug charges, to the United States. In addition, Mexico deported approximately 172 fugitives to the United States in 2008.
Extraditions from the United States to Mexico improved dramatically in 2008 as well. The United States surrendered 32 fugitives to Mexico in 2008, compared to 12 surrendered in 2007. Approximately 20 fugitives are currently undergoing extradition proceedings in U.S. courts.
In addition to achieving record numbers of extraditions from Mexico, OIA also increases the joint cooperation between Mexican and U.S. law enforcement authorities by responding to requests for mutual legal assistance from Mexico for evidence in hundreds of matters each year. OIA is represented at the U.S. Embassy in Mexico City by a Department of Justice attaché and deputy attaché.
Narcotic and Dangerous Drug Section (NDDS):
NDDS has a broad mission to combat domestic and international drug trafficking and narco-terrorism.
NDDS litigation unit attorneys prosecute those individuals and criminal organizations posing the most significant drug trafficking threat to the United States. NDDS attorneys recently indicted 17 members of the Gulf Cartel, including three leaders, for violations involving the extraterritorial manufacture or distribution of cocaine and marijuana destined for the United States. Also, in May 2008, NDDS attorneys were the first federal prosecutors to secure a conviction under the new narco-terrorism statute.
NDDS attorneys are responsible for the oversight of several classified projects, as well as the integration and dissemination of classified intelligence information to domestic criminal prosecutions. These attorneys coordinate the efforts of law enforcement and prosecutors worldwide to maximize the Department’s effectiveness against international narco-traffickers. NDDS attorneys assisted with the coordinated takedowns in Project Reckoning and Operation Xcellerator.
Merida Initiative:
The Merida Initiative was designed and presented to Congress as a U.S. interagency response to trans-border crime and security issues affecting the United States, Mexico and the countries of Central America. The Merida Initiative seeks to strengthen partner countries’ capacities to combat organized criminal activities that threaten the security of the region. Merida assistance is focused three main areas: counter-narcotics, counterterrorism and border security; public security and law enforcement; and institution building and the rule of law.
Through the Criminal Division and law enforcement components, the Department is working now on Merida project planning, design, assessment and implementation. In fact, the Arms Trafficking Prosecution and Enforcement Strategy Session underway now is a bi-lateral Merida program, in which the Department of Justice, working with Mexican and U.S. interagency partners, played a substantial role in developing and presenting. Additional working-level assistance is anticipated to focus on effectively combating illegal arms trafficking.
The Department is working with Mexican counterparts on Merida projects designed to strengthen tracking and management of seized and forfeited assets; to enhance polygraph capability; and to review and strengthen internal integrity mechanisms. Additionally, the Department will be working with Mexican counterparts on prosecutorial capacity building programs; evidence collection, preservation and admissibility; forensics; extradition; and victim/witness protection.
Asset Forfeiture and Money Laundering Section (AFMLS):
AFMLS and its Mexican counterpart co-chair the Anti-Money Laundering and Asset Forfeiture SLEP sub-working group where cooperation to combat money laundering and enhance asset forfeiture cooperation between the countries is discussed. Most recently, AFMLS provided a detailed paper with comments on draft Mexican legislation that would allow for non-conviction based forfeiture in Mexico and would enhance Mexico’s ability to cooperate on asset forfeiture matters with foreign countries, including the United States.
AFMLS is also working on a project to provide software and training to Mexican officials that will allow Mexico to better track and maintain assets it seizes and freezes so that it can maximize the value of those assets once it has lawfully forfeited them.
Office of Overseas Prosecutorial Development, Assistance and Training (OPDAT):
OPDAT has worked with Mexican counterparts since 2006 to develop greater collaboration and capacity in combating trafficking in persons. Most recently, an Assistant U.S. Attorney from Arizona has worked in Mexico City since October 2008 as an OPDAT Resident Legal Advisor (RLA) for Trafficking in Persons (TIP). The RLA is developing and coordinating workshops in collaboration with Mexican government officials and U.S. government partners (including DHS/ICE) to implement Mexico’s newly passed anti-human trafficking law. Focus areas include greater cooperation between prosecutors and investigators on trafficking in persons cases; task force development concepts to include prosecutors, investigators, victim/witness specialists and members of relevant non-governmental organizations; and the importance of victim detection, rescue and protection in trafficking in persons cases.
The RLA has coordinated training for approximately 200 Mexican government officials in basic human trafficking law, victim identification, victim interviewing techniques, and trafficking case development. The Department and ICE have coordinated with the PGR to develop a training calendar for FY 2009, which includes more advanced trainings specifically tailored to human trafficking cases that focus on victim attention and assistance, evidence collection and preservation, crime scene management, and investigative techniques. Moreover, the RLA and ICE and the Government of Mexico regularly contact U.S. prosecutors regarding bi-national case coordination, as well as intelligence and information sharing related to ongoing investigations and prosecutions.
The Senior Law Enforcement Plenary (SLEP):
The SLEP is a U.S.-Mexico working group that consists of representatives from DHS, State Department and ONDCP, as well as DEA, FBI, USMS and ATF. SLEP working groups allow for information sharing between U.S. and Mexico representatives in the areas of: law enforcement and counternarcotics; interdiction; chemical controls; fugitives and legal issues; asset forfeiture and money laundering; organized migrant smuggling and trafficking in persons; arms trafficking; prisoner transfer; cyber and intellectual property crimes; and law enforcement training and technical assistance.
U.S. ATTORNEYS’ OFFICES
The U.S. Attorneys’ Offices in the five Southwest border districts are on the frontlines of the national effort to prosecute criminal offenses arising at the border with Mexico, including the prosecution of narcotics trafficking, gun-smuggling, violent crimes and immigration offenses. The U.S. Attorneys’ Offices also coordinate with Mexican prosecutors to share evidence in appropriate cases to ensure that justice is achieved either in U.S. courts or in Mexican courts.
Each of the Southwest border U.S. Attorneys’ Offices work closely with ONDCP and federal, state, and local investigative agencies in initiatives such as the multi-agency Border Enforcement Security Task Forces, OCDETF Strike Forces, HIDTAs, and the Gatekeeper Initiative to attack complex criminal organizations; Project Gunrunner to reduce the smuggling of weapons across the border; bulk cash smuggling initiatives to restrict the flow of drug proceeds to Mexico; and the Border Fence Initiative, Tunnel Task Force, and maritime initiatives to detect illegal cross-border movement of people, drugs, money and guns.
ADDITIONAL PROGRAMS AND FUNDING
The Department’s Office of Justice Programs will be investing $30 million in stimulus funding to assist with state and local law enforcement to combat narcotics activity coming through the southern border and in high intensity drug trafficking areas. State and local law enforcement organizations along the border can apply for COPS and Byrne Justice Assistance grants from the $3 billion provided for those programs in the stimulus package.
The OCDETF Fusion Center (OFC):
OFC is a comprehensive intelligence data center containing drug and related financial data. Through SOD, it provides critical support for long-term and large-scale investigations. OFC conducts cross-agency and cross-jurisdictional integration and analysis of drug related data to create comprehensive pictures of targeted organizations.
National Drug Intelligence Center (NDIC)
National Drug Intelligence Center (NDIC) is the nation’s principal domestic strategic drug intelligence center. NDIC is responsible for providing policymakers resources allocators and senior law enforcement and intelligence community officials with strategic drug intelligence. NDIC closely monitors and assesses the threat posed by Mexican drug trafficking organizations’ activities in the United States and has published the following two reports, available on line, National Drug Threat Assessment 2009 http://www.usdoj.gov/ndic/pubs31/31379/index.htm and the Cities in Which Mexican DTOs Operate Within the United States Situation Report http://www.usdoj.gov/ndic/pubs27/27986/index.htm to inform policymakers of this threat. In addition, NDIC has published several sensitive reports concerning Mexican drug trafficking organizations involvement with arms and bulk cash smuggling, as well as drug related violence on the Southwest border.
Defendant Pleads Guilty to Conspiring to Export Military Aircraft Parts to IranRead the Press Release
WASHINGTON – Traian Bujduveanu has pleaded guilty in the Southern District of Florida to a charge of conspiring to illegally export military and dual use aircraft parts to Iran. Bujduveanu appeared on behalf of himself and his now defunct corporation, Orion Aviation, in federal court in Miami today to announce his guilty plea. Bujduveanu’s co-defendant, Hassan Keshari, and his corporation, Kesh Air International, pleaded guilty in January 2009, and are awaiting sentencing.
The guilty plea was announced by R. Alexander Acosta, U.S. Attorney for the Southern District of Florida; David Kris, Assistant Attorney General for National Security; Michael Johnson, Special Agent in Charge, U.S. Department of Commerce, Office of Export Enforcement; Anthony V. Mangione, Special Agent in Charge, U.S. Immigration and Customs Enforcement, Office of Investigations; and Amie R. Tanchak, Resident Agent in Charge, U.S. Department of Defense, Defense Criminal Investigative Service.
Count one of the Indictment, to which Bujduveanu pleaded guilty, charges conspiracy to export and cause the export of goods from the U.S. to the Islamic Republic Iran, in violation of the Embargo imposed upon that country by the United States and in violation of the International Emergency Economic Powers Act, Title 50, United States Code, 1705(a), and to export and cause to be exported defense articles, in violation of the Arms Export Control Act, Title 22, United States Code, Section 2778(b), all in violation of Title 18, United States Code, Section 371.
At sentencing on the conspiracy count, Traian Bujduveanu faces a maximum statutory term of five years imprisonment and a maximum fine of $250,000. Sentencing has been scheduled for June 11 at 8:30 a.m.
The Indictment alleges that Bujduveanu, a Romanian national and naturalized U.S. citizen, by and through his Plantation, Fla., corporation, Orion Aviation, sold aircraft parts to Keshari for purchasers in Iran and exported the aircraft parts to Iran by way of freight forwarders in Dubai, United Arab Emirates.
Among the aircraft parts illegally exported to Iran through the conspiracy were parts designed exclusively for the F-14 Fighter Jet, the Cobra AH-1 Attack Helicopter, and the CH-53A Military Helicopter. All of these aircraft are part of the Iranian military fleet, while the F-14 is known to be used exclusively by the Iranian military.
Moreover, all of the parts supplied by Bujduveanu as part of the conspiracy are manufactured in the U.S., are designed exclusively for military use, and have been designated by the U.S. Department of State as "defense articles" on the U.S. Munitions List, thus requiring registration and licensing with the Department of State, Directorate of Defense Trade Controls. Neither Bujduveanu nor his co-defendants are registered or had the required licenses to ship defense articles to Iran.
According to the Indictment, Bujduveanu received orders by email from Keshari requesting specific aircraft parts for buyers in Iran. Bujduveanu then provided quotes, usually by e-mail, to Keshari. After the receipt of payment for the parts from Keshari, Bujduveanu then shipped the parts to a company in Dubai through the use of false or misleading shipping document. From Dubai, the parts were then shipped on to the purchasers in Iran.
Bujduveanu has been in federal custody since his arrest in June 2008 and will remain in custody pending his sentencing. Co-defendant Keshari also remains in federal custody awaiting sentencing.
Mr. Acosta commended the investigative efforts of the U.S. Department of Commerce, Office of Export Enforcement, U.S. Immigration and Customs Enforcement, Office of Investigations, and the U.S. Department of Defense, Defense Criminal Investigative Service, for their work on this investigation.
The case is being prosecuted by Assistant U.S. Attorney Melissa Damian. Trial Attorney Ryan Fayhee of the Counterespionage Section of the Justice Department’s National Security Division, is providing assistance.
Connecticut Resident Pleads Guilty to Multi-Million Dollar Tax Fraud Conspiracy Involving New York City HospitalRead the Press Release
WASHINGTON — A Trumbull, Conn., resident who was involved in operating three businesses in Brooklyn, N.Y., pleaded guilty to conspiring to defraud the Internal Revenue Service (IRS), the Department of Justice announced today.
Krzysztof Koczon pleaded guilty in U.S. District Court in Manhattan to conspiracy to aid another in filing false tax returns. Between approximately 2000 and February 2005, Koczon conspired with others to falsify income tax returns through a fraudulent check cashing scheme for the owner of a corporation that was engaged in the business of providing maintenance and insulation services to New York Presbyterian Hospital (NYPH). According to the charge, Koczon provided false documentation to co-conspirators indicating that he had performed construction services and received more than $2.3 million in checks from the co-conspirators as payment for the construction services. Koczon cashed the checks but returned the bulk of the money to the co-conspirators in exchange for a fee. The co-conspirators then took false deductions for those payments made to Koczon’s businesses.
"Those who illegally profit from their participation in fraudulent schemes will be vigorously prosecuted," said Scott D. Hammond, Acting Assistant Attorney General in charge of the Department’s Antitrust Division.
The tax fraud conspiracy that Koczon is charged with carries a maximum penalty of five years in prison, three years of supervised release and a $250,000 fine. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.
In April 2007, as part of the same investigation, Michael Theodorobeakos and two maintenance and insulation companies he co-owned —Monosis Inc. and STU Associates Inc. — pleaded guilty to conspiring to rig bids on the supply of maintenance and insulation services to NYPH and Mount Sinai Medical Center (Mount Sinai). In addition, Michael Vignola and Mister AC Ltd. pleaded guilty in November 2007 to conspiring to rig bids on heating, ventilation and air conditioning (HVAC) services provided to NYPH and paying kickbacks to former NYPH purchasing officials. In April 2008, Aaron S. Weiner pleaded guilty to participating in a conspiracy wherein Weiner acted as a conduit in another million-dollar kickback scheme also involving one of the same former NYPH purchasing officials involved with the Vignola kickback schemes. On March 25, 2009, Mariusz Debowski pleaded guilty to participating in the same tax fraud conspiracy at NYPH.
These charges arose from an ongoing federal antitrust investigation of fraud, bribery, tax-related offenses and bidding irregularities relating to contracts administered by the Facilities Operations Department and the Engineering Department at NYPH and the Engineering Department at Mount Sinai. The investigation is being conducted by the Antitrust Division’s New York Field Office, the FBI and the Internal Revenue Service Criminal Investigation’s New York Field Office.
Anyone with information concerning bid rigging, bribery, tax offenses or fraud related to contracts administered by the Facilities Operations Department at NYPH or the Engineering Departments at Mount Sinai or NYPH should contact the New York Field Office of the Antitrust Division at 212-264-9308 or the New York Office of the FBI at 212-384-4467.
Statement of Attorney General Eric Holder Regarding United States V. Theodore F. StevensRead the Press Release
"In connection with the post-trial litigation in United States v. Theodore F. Stevens, the Department of Justice has conducted a review of the case, including an examination of the extent of the disclosures provided to the defendant. After careful review, I have concluded that certain information should have been provided to the defense for use at trial. In light of this conclusion, and in consideration of the totality of the circumstances of this particular case, I have determined that it is in the interest of justice to dismiss the indictment and not proceed with a new trial.
"The Department’s Office of Professional Responsibility will conduct a thorough review of the prosecution of this matter. This does not mean or imply that any determination has been made about the conduct of those attorneys who handled the investigation and trial of this case.
"The Department of Justice must always ensure that any case in which it is involved is handled fairly and consistent with its commitment to justice. Under oftentimes trying conditions, the attorneys who serve in this Department live up to those principles on a daily basis. I am proud of them and of the work they do for the American people."
Partner at Major International Accounting Firm Charged with Tax CrimesRead the Press Release
WASHINGTON – A Newark, N.J., federal grand jury has returned an indictment charging Stephen A. Favato, a resident of Point Pleasant Beach, N.J., and a partner at a major international accounting firm, with tax charges for attempting to assist one of his clients evade income taxes, the Justice Department and Internal Revenue Service (IRS) announced today.
Favato, a partner in the accounting firm’s Woodbridge, N.J., office, was charged with tax evasion regarding the federal income taxes of Daniel Funsch and his spouse. Funsch (the client) is the president of a corporate client of the accounting firm, a fragrance manufacturer with its headquarters in Norwood, N.J. Favato was also charged with one count of corruptly endeavoring to obstruct and impede the administration of the Internal Revenue laws and one count of willfully aiding and assisting in the preparation and filing of the client’s false 2002 tax return.
According to the indictment, from Fall 2001 through April 2005, Favato attempted to obstruct the IRS by, among other conduct, advising the client on how to include false items on the client’s 2002, 2003 and 2004 joint income tax returns. Additionally, Favato knowingly prepared and signed false joint tax returns for the client for these years.
According to the indictment, Favato advised the client to significantly reduce the salary payments that the client was receiving from the corporation and to instead have this compensation paid to the client’s limited liability company, Great Escape Yachts LLC, in the form of purported lease payments for the client’s yacht. However, the corporation had not leased the yacht. This recommended course of action enabled the client to fraudulently deduct personal yacht expenses as business expenses. In addition, the indictment alleges that Favato advised the client on how to fraudulently eliminate a portion of the gain on property that the client sold in 2002 and 2004. Finally, the indictment alleges that Favato advised the client to report inflated charitable contributions on the client’s 2003 tax return.
An indictment is merely a formal charge by the grand jury. Each defendant is presumed innocent unless and until proven guilty in U.S. District Court. If convicted, the defendant faces a maximum potential sentence of 11 years in prison and millions of dollars in fines.
The case is being prosecuted by Tax Division trial attorneys Patrick J. Murray and Daren H. Firestone. The case was investigated by the IRS, Criminal Investigation Division.
Additional information about the Justice Department’s Tax Division and its enforcement efforts may be found at http://www.usdoj.gov/tax.
One Current and Two Retired Baltimore City Police Department Officers Indicted on Civil Rights ChargesRead the Press Release
WASHINGTON – A current Baltimore City Police Department officer and two retired officers were charged in a six-count federal indictment unsealed today with civil rights and obstruction of justice violations stemming from an April 2004 incident during which officers allegedly assaulted a handcuffed and shackled juvenile with a baton and pool stick, the Justice Department announced.
The indictment alleges that Officer Gregory Mussmacher assaulted the juvenile with a police-issued baton, and that retired Officer Guy Gerstel assaulted the same juvenile with a pool stick. The indictment also charges the officers with obstructing justice by providing false statements about the assault. In addition, the indictment charges Gerstel with making a false statement to the FBI about the case, and charges retired Sergeant Wayne Thompson with obstructing justice by allegedly writing a false statement and by corruptly persuading other officers not to fill out required reports about the incident.
An indictment is a formal accusation of criminal conduct, not evidence of guilt. The defendants are presumed innocent unless and until proven guilty.
"The Civil Rights Division takes very seriously any allegation of police misconduct," said Loretta King, Acting Assistant Attorney General of the Civil Rights Division. "The Division is committed to prosecuting all cases of official misconduct, and to bringing to justice any officer who abuses the tremendous authority and responsibility entrusted to him or her."
"Most law enforcement officers perform their duties with honor and integrity," said U.S. Attorney Rod J. Rosenstein of the District of Maryland. "Any police officers who abuse suspects, write false reports and obstruct justice must be held accountable so that citizens can have confidence in law enforcement agencies."
If convicted, the defendants face maximum penalties of 10 years in prison on each of the civil rights charges; 20 years in prison on each of the obstruction charges; and five years in prison on the false statement charge.
This case was investigated by the FBI and is being prosecuted by Special Litigation Counsel Jeffrey Blumberg and Trial Attorney Forrest Christian of the Civil Rights Division, with the assistance of the U.S. Attorney’s Office for the District of Maryland.
Massachusetts Man Convicted on Child Pornography ChargeRead the Press Release
WASHINGTON – Rudy Frabizio, 46, of Acton, Mass., was convicted today of possession of child pornography, announced Acting Assistant Attorney General Rita M. Glavin of the Criminal Division and U.S. Attorney Michael J. Sullivan of the District of Massachusetts.
Frabizio was found guilty after a seven-day jury trial in the U.S. District Court for the District of Massachusetts in Boston.
Evidence presented at trial by government prosecutors showed that the defendant stored images on an employer’s computer of children engaged in sexually explicit conduct. Evidence also showed the defendant used the Internet to acquire images of child pornography.
Frabizio may face up to five years in prison. His sentencing is scheduled for Aug. 5, 2009.
This case was brought as part of Project Safe Childhood. Created in February 2006, Project Safe Childhood is a nationwide initiative designed to protect children from online exploitation and abuse. Led by the U.S. Attorney’s Offices, 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 identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.projectsafechildhood.gov.
The case is being prosecuted by Trial Attorney Michael Yoon of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS) and Assistant U.S. Attorney Angel Kelley Brown of the District of Massachusetts. The case is being investigated by the FBI. The forensic examination of the computer evidence in the case was conducted by CEOS’ High Tech Investigative Unit.
Justice Department Asks Federal Court to Shut Down Iowa Tax Preparation FirmRead the Press Release
WASHINGTON - The United States has brought suit in federal court against Gayle Lemmon of Humboldt, Iowa, the Justice Department announced today. The lawsuit seeks to bar her and her firm from preparing federal tax returns for others. According to the government complaint in the case, Lemmon’s firm, Gayle’s Bookkeeping and Tax Service Inc., prepares federal income tax returns for customers that unlawfully understate tax liabilities by claiming improper deductions for the business use of the home and for non-deductible personal expenses.
The government complaint also accuses Lemmon of fabricating deductions on customers’ returns for charitable contributions and inflating deductions for un-reimbursed employee business expenses. According to the complaint, the Internal Revenue Service has examined approximately 243 returns that Lemmon prepared and found that 224 of them understated the customer’s tax liability. The complaint notes that the tax loss from Lemmon’s alleged misconduct between 2003 and 2008 could be as much as $17 million.
In the past decade, the Justice Department has obtained injunctions against more than 380 tax preparers and tax-fraud promoters. Information about these cases is available on the Justice Department’s Tax Division Web site.
Former Baton Rouge, Louisiana Police Officer Pleads Guilty to Civil Rights ViolationRead the Press Release
WASHINGTON – Nathan Davis, a former police officer with the Baton Rouge Police Department in Baton Rouge, La., pleaded guilty today to a felony civil rights violation for use of excessive force, announced David R. Dugas, U.S. Attorney for the Middle District of Louisiana, and Loretta King, Acting Assistant Attorney General for Civil Rights. At today’s court hearing, defendant Davis admitted that he intentionally used excessive force in March 2007 against a man who had been arrested, handcuffed and taken to a police department holding center.
Davis admitted that he purposefully used excessive and unreasonable force against B.T, a man who at the time of the abuse was handcuffed and sitting on the floor of a detention cell, by pepper spraying him in the face without any justification. Davis faces a maximum of ten years in prison. The court has not yet scheduled sentencing.
"When a police officer, like the defendant, misuses his authority to abuse a person entrusted to his care, he violates the public trust and he makes it more difficult for other law enforcement officers to do their very difficult jobs," Acting Assistant Attorney General King said. "The Civil Rights Division is committed to the vigorous enforcement of federal laws prohibiting this type of misconduct by law enforcement officials."
U.S. Attorney Dugas said "No one in this country, including law enforcement officers, is above the law."
This case was investigated by the FBI and the Baton Rouge Police Department and was prosecuted by Assistant U.S. Attorney Robert Piedrahita and Civil Rights Division Trial Attorney Kathleen Monaghan.
City of Independence, Missouri, Agrees to Major Sewer System UpgradesRead the Press Release
WASHINGTON—The city of Independence, Mo., has agreed to make major improvements to its sanitary sewer system, at an estimated cost of more than $35 million, to eliminate unauthorized overflows of untreated sewage into the Missouri River each year, the Justice Department and the U.S. Environmental Protection Agency (EPA) announced today.
Under the terms of the consent decree, lodged in Kansas City, Mo., Independence will also pay a civil penalty of $255,000 and will spend an additional $450,000 on supplemental environmental projects designed to enhance Missouri River watershed by improving storm waterdetention basins and stabilizing stream banks.
Independence will also be required to perform a comprehensive assessment of the sanitary sewer system, upgrade pump stations, and improve the sewer collection system and wastewater treatment plant. The improvements to the city’s sanitary sewer system will provide major public health and environmental benefits.
A complaint filed concurrently with a consent decree, alleges that Independence had numerous illegal discharges of untreated wastewater containing raw sewage from its sanitary sewer system. The sanitary sewer system transports the city’s sewage to a wastewater treatment plant, which serves approximately 55,000 residential and 3,500 commercial sanitary sewer customers, for treatment prior to discharging it into area rivers and streams. Based on inspections, responses to information requests and the city’s regular reporting activity, EPA was able to document numerous violations of the Clean Water Act, including 430 sanitary sewer overflows resulting in the discharge of millions of gallons of untreated sewage into the Missouri River since October 2000.
"With this settlement, the City of Independence is making a commitment to address its aging sewer system and comply with the Clean Water Act, which will improve water quality in the region," said John C. Cruden, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division.
"This is a major step forward by Missouri's fourth-largest city and it will result in some very significant improvements to overall water quality in the Missouri River watershed," said William Rice, Acting Regional Administrator for EPA’s Region 7.
The consent decree was lodged in the U.S. District Court for the Western District of Missouri 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.
United States Files Civil Lawsuit Against BP Exploration for Oil Spills on North Slope in AlaskaRead the Press Release
WASHINGTON—The United States has filed a civil complaint against BP Exploration (Alaska) Inc. (BPXA) alleging that the company violated federal clean air and water laws, the Justice Department, U.S. Environmental Protection Agency (EPA), and the U.S. Department of Transportation announced today.
According to the complaint, filed in U.S. District Court in Anchorage, Alaska, BPXA illegally discharged more than 200,000 gallons of crude oil from its pipelines onto the North Slope of Alaska during two major oil spills in the spring and summer of 2006. The complaint alleges that BPXA failed to prepare and implement spill prevention, countermeasure and control plans in accordance with good engineering practices, and failed to implement certain required spill prevention measures pursuant to the Clean Water Act.
The complaint also alleges that BPXA violated the Clean Air Act by improperly removing asbestos-containing materials from its pipelines and failed to comply in a timely manner with a Corrective Action Order that the Department of Transportation-Pipeline and Hazardous Materials Safety Administration (PHMSA) issued to BPXA pursuant to federal pipeline safety laws. PHMSA’s order required BPXA to conduct certain testing, inspection, maintenance and repair activities.
The lawsuit, filed by the Justice Department on behalf of EPA and PHMSA, asks the court to order BPXA to take all appropriate action to prevent spills in the future, including systemically inspecting its pipelines and associated facilities for corrosion. The United States also seeks civil penalties up to the maximum amount authorized by law.
This civil action follows a guilty plea by BPXA on Nov. 29, 2007, to one count of criminal negligent discharge of oil to the waters of the United States in violation of the Clean Water Act.
BPXA, a wholly-owned subsidiary of BP America, conducts oil exploration, drilling, and production in Alaska. Both major spills that are the subject of this case happened in Prudhoe Bay, which is the largest oil field in North America and one of the oldest on the North Slope.
Justice Department Files Voting Rights Lawsuit Against Town of Lake Park, FloridaRead the Press Release
WASHINGTON - The Justice Department filed a lawsuit today to challenge the at-large method of electing the Lake Park, Fla. Town Commission on the ground that it dilutes the voting strength of black citizens in violation of Section 2 of the Voting Rights Act.
The lawsuit, filed in the U.S. District Court in Miami, alleges that as a result of racially polarized voting patterns in town elections, candidates preferred by black voters are usually defeated. Indeed, no black candidate has ever won an election for town commission. In addition, the lawsuit alleges that under a single-member district plan to elect the four town commissioners, black persons would constitute a majority of the citizen voting age population in at least one of the districts. The lawsuit seeks injunctive relief in the form of a court order implementing a new method of electing the town commission.
"The at-large method of election has consistently denied black voters an equal opportunity to elect candidates of their choice to the Lake Park Town Commission," said Acting Assistant Attorney General Loretta King. "We hope that the Town of Lake Park will work with us to negotiate a settlement that would provide black citizens in Lake Park a meaningful electoral voice in town government."
U.S. Attorney R. Alexander Acosta of the Southern District of Florida stated, "The Voting Rights Act prohibits any practice on procedure that results in the denial or abridgement of the right to vote on the basis of race, color, and other improper factors. The civil complaint filed today alleges that the Lake Park Commission elections are characterized by the use of practices that impair black electoral success. Our goal is to enforce the Voting Rights Act to ensure that no citizen is denied access to the electoral process on the basis of race or color."
Complaints about discriminatory voting practices may be reported to the Voting Section of the Justice Department's Civil Rights Division at 1-800-253-3931. More information about the Voting Rights Act and other federal voting laws is available on the Department of Justice Web site at http://www.usdoj.gov/crt/voting.
Hitachi Executive Indicted for His Role in LCD Price-Fixing ConspiracyRead the Press Release
WASHINGTON – A federal grand jury in San Francisco returned an indictment today charging an executive at Hitachi Displays Ltd. with participating in a global conspiracy to fix the prices of Thin Film Transistor-Liquid Crystal Display (TFT-LCD) panels sold to Dell Inc., the U.S. Department of Justice announced today.
The indictment, filed in U.S. District Court in San Francisco, charges Sakae Someya with conspiring with unnamed co-conspirators to suppress and eliminate competition by fixing the price of TFT-LCD panels sold to Dell for use in notebook computers. Someya participated in the conspiracy from on or about Jan. 1, 2001, to on or about Dec. 31, 2004. In 2006, the worldwide market for TFT-LCD panels was approximately $70 billion.
Including today’s indictment, four companies and eight individuals have been charged in the Department’s ongoing antitrust investigation into the TFT-LCD industry. To date, more than $585 million in fines have been imposed as a result of the TFT-LCD investigation.
"Practically every American consumer has been impacted by the TFT-LCD conspiracies," said Scott D. Hammond, Acting Assistant Attorney General in charge of the Department’s Antitrust Division. "Today the Department is holding a high-level executive accountable for his conduct."
Someya was charged with participating with co-conspirators in a conspiracy accomplished by the following means:
- Attending bilateral meetings and engaging in conversations and communications in Japan, Korea and the United States to discuss the prices of TFT-LCD panels sold to Dell;
- Agreeing during those meetings, conversations and communications to charge prices of TFT-LCD panels sold to Dell at certain levels;
- Exchanging information on sales of TFT-LCD panels sold to Dell, for the purpose of monitoring and enforcing adherence to the agreed-upon prices;
- Authorizing, ordering and consenting to the participation of subordinate employees in the conspiracy;
- Issuing price quotations in accordance with the agreements reached;
- Accepting payment for the supply of TFT-LCD panels sold at collusive, noncompetitive prices to Dell; and
- Taking steps to conceal the conspiracy and conspiratorial contacts through various means.
Someya is charged with violating the Sherman Act, which carries a maximum fine of $1 million and 10 years imprisonment for individuals. The fine may be increased to twice the gain derived from the crime, or twice the loss suffered by the victims, if either of those amounts is greater than the statutory maximum.
On Dec. 15, 2008, LG Display Co. (LG) pleaded guilty to participating in a worldwide conspiracy to fix the price for TFT-LCD panels and was sentenced to pay a $400 million criminal fine – the second-largest fine in Antitrust Division history. On Dec. 16, 2008, Sharp Corp. pleaded guilty to participating in three separate conspiracies to fix the prices of TFT-LCD panels sold to Dell, Apple Computer Inc. and Motorola Inc. and was sentenced to pay a $120 million criminal fine. On Jan. 14, 2009, Chunghwa Picture Tubes Ltd. (Chunghwa) pleaded guilty to participating in the same worldwide conspiracy as LG, and was sentenced to pay a $65 million criminal fine.
In February 2009, former Chunghwa CEO Chieng-Hon "Frank" Lin and two Chunghwa executives, Chih-Chun "C.C." Liu and Hsueh-Lung "Brian" Lee, pleaded guilty to and were sentenced for participating in the same conspiracy as LG and Chunghwa. Lin was sentenced to serve nine months in prison and pay a $50,000 criminal fine. Liu was sentenced to serve seven months in prison and pay a $30,000 criminal fine. Lee was sentenced to serve six months in prison and pay a $20,000 criminal fine. Also in February 2009, LG executive Chang Suk "C.S." Chung pleaded guilty for his role in the same conspiracy as LG and Chunghwa. Chung was sentenced to serve seven months in prison and pay a $25,000 criminal fine.
On Feb. 3, 2009, a federal grand jury in San Francisco returned an indictment charging two former Chunghwa executives, Cheng Yuan Lin, aka C.Y. Lin, and Wen Jun Cheng, aka Tony Cheng, and one former executive from LG, Duk Mo Koo, for their participation in the same conspiracy as LG and Chunghwa. Warrants have been issued for the arrest of all three individuals.
On March 10, 2009, Hitachi Displays Ltd. agreed to plead guilty and pay a $31 million fine for its participation in a conspiracy to fix the prices of TFT-LCD panels sold to Dell for use in notebook computers from April 1, 2001, to March 31, 2004.
Someya’s indictment is the result of a joint investigation by the Department of Justice Antitrust Division’s San Francisco Field Office and the Federal Bureau of Investigation in San Francisco. Anyone with information concerning illegal conduct in the TFT-LCD industry is urged to call the San Francisco Field Office of the Antitrust Division at 415-436-6660.
Disaster Fraud Hotline Available to Report Flood-Related FraudRead the Press Release
WASHINGTON – In response to the Red River flooding in North Dakota and Minnesota and subsequent relief efforts, the National Center for Disaster Fraud is reminding members of the public to be aware of and report any instances of alleged fraudulent activity related to relief operations and funding for victims.
Members of the public can report fraud, waste, abuse or allegations of mismanagement involving disaster relief operations through the Disaster Fraud Hotline at 866-720-5721, the Disaster Fraud Fax at 225-334-4707 or the Disaster Fraud e-mail at [email protected]. Individuals can also report criminal activity to the FBI at 1-800-CALL-FBI.
In anticipation of an unprecedented amount of fraud associated with federal disaster relief programs that went into effect following Hurricanes Katrina, Rita and Wilma, a Joint Command Center was established in Baton Rouge, La., to coordinate the huge number of reports of fraud. The Command Center, now known as the National Center for Disaster Fraud, has received and screened more than 33,000 complaints of disaster fraud and referred more than 22,000 of those to law enforcement for investigation. The established infrastructure has helped victims of fraud related to Hurricanes Katrina, Rita, Wilma, Ike and Gustav, as well as the Iowa floods and California wildfires in 2008.
To date, the Hurricane Katrina Fraud Task Force has brought charges against 1,245 defendants in 46 judicial districts. The Task Force is chaired by the Assistant Attorney General of the Criminal Division.
Rhode Island Machine Shop Owners Convicted of Tax FraudRead the Press Release
WASHINGTON - Bruce Lapierre, of Pascoag, R.I., and Albert Martin and Lorraine Martin, both of Woonsocket, R.I., were convicted of conspiracy to defraud the United States and tax evasion following 2 hours of deliberations and an 8-day trial before Chief Judge Mary M. Lisi in Providence, R.I., the Justice Department and Internal Revenue Service (IRS) announced today.
Lapierre, Albert Martin and Lorraine Martin, who were indicted in June 2008, were each convicted of one count of conspiracy to defraud the United States and two counts of tax evasion for years 2002 and 2003.
According to the indictment and evidence introduced at trial, Lapierre and the Martins used a series of ruses to conceal their income and avoid paying taxes. From 1997 to 2004, Lapierre and Albert Martin operated Classic Machine in Woonsocket. The two men engaged in an elaborate scheme to conceal from the IRS income that they earned through Classic Machine, and thus avoid paying taxes on that income. Rather than open business accounts for depositing business receipts and income, they allegedly used the personal account of Lorraine Martin to conceal business receipts, as well as an anonymous "private" banking service designed to conceal income from the IRS.
The evidence at trial also showed that in order to further conceal their assets and income from the IRS, Lapierre and Albert Martin used multiple business names, such as Banner Technologies, Circle Machine, Preferred Enterprises and Royal Enterprises, to conduct the machine shop business. The defendants also made extensive use of cash and money orders. For example, they allegedly cashed checks under $10,000 in order to avoid federal Currency Transaction Reports, which are required for currency transactions of $10,000 or more.
According to the indictment and evidence introduced at trial, Bruce Lapierre tried to obstruct an IRS investigation of the machine shop's income by renaming business assets by sending false and frivolous letters to the IRS claiming he was not required to file tax returns or pay taxes, and by directing a financial institution not to comply with an IRS summons for records.
Chief Judge Lisi scheduled sentencing for July 9, 2009. Each defendant faces a maximum of fifteen years in prison and a maximum fine of $750,000 fine.
Acting Assistant Attorney General John A. DiCicco commended the IRS Special Agents who investigated the case, as well as Tax Division trial attorneys John Kane and Jorge Almonte who prosecuted the case.
More information about the Justice Department’s Tax Division and its enforcement efforts is available at http://www.usdoj.gov/tax/.
Wyoming Highway Patrol Trooper Arrested for Violating Civil Rights by KidnappingRead the Press Release
WASHINGTON – Agents with the FBI, Immigration and Customs Enforcement and the Wyoming Department of Criminal Justice arrested Wyoming Highway Patrol Trooper Franklin Joseph Ryle late yesterday in Douglas, Wyo., on criminal civil rights charges.
A federal criminal complaint charges that on Jan. 8, 2009, Ryle, while acting under color of law, unlawfully arrested and kidnapped a person, thereby willfully depriving the person of his right, protected by the Constitution, to be free from unreasonable seizures. The complaint also charges that Ryle knowingly possessed and brandished a firearm during the crime.
The charges in the complaint are only allegations, and Ryle remains innocent of the charges until proven guilty.
Jackson, Miss., Man Convicted of Receipt and Possession of Child PornographyRead the Press Release
WASHINGTON – A Jackson, Miss., computer systems administrator was found guilty late Thursday of receiving and possessing images of child pornography on his home computer, announced Acting Assistant Attorney General Rita M. Glavin of the Criminal Division and Acting U.S. Attorney for the Southern District of Mississippi Stan Harris.
Following a four-day jury trial in Natchez, Miss., Joseph McNealy was found guilty of three counts of receiving child pornography through the Internet and one count of possessing child pornography. McNealy was charged in a second superseding indictment returned on Aug. 20, 2008. At the time of his arrest, McNealy was working as a computer systems administrator for a company that provided Internet, telecommunications and network services.
Testimony at trial established that the charges resulted from Operation Falcon, a law enforcement task force composed of agents from U.S. Immigration and Customs Enforcement (ICE), the Internal Revenue Service, the FBI and the U.S. Postal Inspection Service. On Sept. 14, 2004, ICE agents searched McNealy’s home computer with his permission and uncovered evidence that he possessed child pornography and had received child pornography from Web sites and Internet newsgroups on or about Feb. 5, 2004, through on or about Sept. 14, 2004; on or about June 29, 2004; and on or about April 16, 2003, through on or about May 21, 2003.
Evidence presented at trial included child pornography images that had been saved to McNealy’s computers, as well as search terms he used relating to child pornography that were obtained from his Internet history records and Internet bookmarks. Finally, the prosecution presented records of Web sites associated with child pornography that had been visited by McNealy.
Following the verdict, McNealy was ordered to be detained by the U.S. Marshals Service without bond. His sentencing is scheduled for June 4, 2009, at 10:30 a.m. before U.S. District Court Judge David C. Bramlette, III. At sentencing, McNealy faces a mandatory minimum sentence of five years and a maximum of 20 years in prison, as well as a lifetime of supervised release. He may also face a possible fine.
The case was prosecuted by Barak Cohen of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS) and Assistant U.S. Attorney Glenda R. Haynes of the U.S. Attorney’s Office in Jackson. CEOS’ High-Tech Investigative Unit and ICE provided forensic analysis of McNealy’s computer. The charges were the result of an investigation by ICE.
Former National Century Financial Enterprises CEO Sentenced to 30 Years in Prison, Co-Owner Sentenced to 25 Years in Prison for Conspiracy, Fraud and Money LaunderingRead the Press Release
WASHINGTON – Two former National Century Financial Enterprises (NCFE) executives were sentenced today for their roles in a scheme to deceive investors about the financial health of NCFE, Acting Assistant Attorney General Rita M. Glavin and U.S. Attorney Gregory G. Lockhart of the Southern District of Ohio announced. NCFE, formerly based in Dublin, Ohio, was one of the largest healthcare finance companies in the United States until it filed for bankruptcy in November 2002.
Lance K. Poulsen, 65, former president, owner and chief executive officer of NCFE was sentenced to 30 years in prison and three years of supervised release following the prison term. A federal jury convicted Poulsen on Oct. 31, 2008, of conspiracy, securities fraud, wire fraud and money laundering. Poulsen was also found guilty by a federal jury on March 26, 2008, of conspiring to interfere with a witness who was preparing to testify in the fraud trial against Poulsen and other NCFE executives. He is currently serving a 10-year prison sentence for that conviction. The court ordered Poulsen’s 30-year sentence to be served concurrently with the 10-year sentence for witness tampering.
Rebecca S. Parrett, 60, former vice chairman, secretary, treasurer, director and owner of NCFE was sentenced to 25 years in prison and three years of supervised release following the prison term. A federal jury convicted Parrett on March 13, 2008, of conspiracy, securities fraud, wire fraud and money laundering. Parrett fled after the conviction and remains at large.
U.S. District Court Judge Algenon Marbley also ordered Poulsen and Parrett to forfeit $1.7 billion of property representing the proceeds of the conspiracy and to pay restitution of $2.3 billion, jointly and severally with other defendants.
"Corporate executives who violate the law, as well as investors’ trust, can and will be held accountable for their illegal actions," said Acting Assistant Attorney General Rita M. Glavin. "The Department of Justice will continue to seek appropriate punishment, including jail time, for individuals who participate in financial frauds to the detriment of the investing public."
"Evidence showed that Poulsen knew the business model NCFE presented to the investing public differed drastically from the way NCFE did business within its own walls," U.S. Attorney Lockhart said. "Their actions were designed to hide a financial house of cards from investors, eventually costing investors $2 billion."
"When corporate officers elect to betray the public’s trust for personal gain, the very core of how and why our corporate system operates is immediately and negatively impacted," Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation Division Jose A. Gonzalez said. "As signified by today’s NCFE sentences, the IRS gives priority to investigations involving the alleged breach of the public trust by corporate officials at any level."
FBI Cincinnati Special Agent in Charge Keith L. Bennett noted the significant sentences imposed on both Poulsen and Parrett. "This should serve as a warning to those who might be tempted to manipulate the complexities of our financial systems to defraud others. The FBI stands ready to root out those who would do so, bring them to the judicial system and ensure they lose both their ill-gotten wealth and their freedom."
Witnesses testified at both trials that Poulsen, Parrett and other NCFE executives engaged in a scheme from 1995 until the collapse of the company to deceive investors and rating agencies about the financial health of NCFE and how investors’ money would be used. NCFE bought accounts receivable from healthcare providers using money NCFE obtained through the sale of asset-backed notes to institutional investors, including pension funds, insurance companies and churches.
Evidence at both trials showed that NCFE misused investors’ money and made unsecured loans to health care providers, including those owned in whole or in part by Poulsen, Parrett and another owner of NCFE, Donald H. Ayers. Former employees testified that Poulsen, Parrett and other NCFE executives covered up the fraud by lying to investors and rating agencies. The government presented evidence that Poulsen and others created investor reports containing fabricated data and moved money back and forth between programs in order to make it appear that NCFE was in compliance with its own governing documents. Evidence showed that Poulsen and Parrett knew the business model NCFE presented to the investing public differed significantly from the way NCFE actually conducted business.
Four other NCFE executives have been convicted in connection with the fraud. Donald H. Ayers, an NCFE vice chairman, chief operating officer, director and an owner of the company, was found guilty on charges of conspiracy, securities fraud and money laundering and was sentenced to 15 years in prison. Randolph H. Speer, NCFE’s chief financial officer, was found guilty on charges of conspiracy, securities fraud, wire fraud and money laundering and was sentenced to 12 years in prison. Roger S. Faulkenberry, vice president for client development, was found guilty on charges of conspiracy, securities fraud, wire fraud and money laundering and was sentenced to 10 years in prison. James E. Dierker, chief credit officer, was found guilty on charges of conspiracy and money laundering and was sentenced to five years in prison. In addition, four other former NCFE executives have pleaded guilty in connection with this fraud.
The cases were prosecuted by the U.S. Attorney’s Office for the Southern District of Ohio and the Criminal Division’s Fraud Section and investigated by FBI Special Agents Matt Daly, Ingrid Schmidt and Tad Morris; IRS Special Agents Greg Ruwe and Mark Bailey, U.S. Postal Inspector Dave Mooney; and Immigration and Customs Enforcement Agent Celeste Koszut. Assistant U.S. Attorney Douglas Squires of the Southern District of Ohio, Assistant Chief Kathleen McGovern and Senior Trial Attorney Wes R. Porter of the Criminal Division’s Fraud Section prosecuted Parrett, Ayers, Speer, Faulkenberry and Dierker. Assistant U.S. Attorney Douglas Squires of the Southern District of Ohio, Assistant Chief Kathleen McGovern, Trial Attorneys N. Nathan Dimock, and former Trial Attorney Leo Wise of the Criminal Division’s Fraud Section prosecuted Poulsen. Fraud Section Paralegal Specialists Crystal Curry and Sarah Marberg assisted with these cases.
Miami Doctor and Chemist Plead Guilty in HIV Infusion Fraud SchemeRead the Press Release
WASHINGTON – Two Miami-area residents pleaded guilty today in connection with a $10 million Medicare fraud scheme involving HIV infusion clinics, Acting Assistant Attorney General Rita M. Glavin of the Criminal Division and U.S. Attorney R. Alexander Acosta of the Southern District of Florida announced.
Dr. Carmen Del Cueto, 65, and Alexis Dagnesses, 44, each pleaded guilty to one count of conspiracy to commit health care fraud before U.S. District Judge Paul C. Huck. Both defendants admitted to working at Midway Medical Center Inc. (Midway), a Miami clinic that purported to specialize in the treatment of patients with HIV.
According to plea documents, Del Cueto was a co-owner of and practicing physician at Midway. Del Cueto and her co-conspirators billed Medicare routinely for services that were medically unnecessary and, in many instances, never provided. Del Cueto admitted to purchasing only a small fraction of the medication that was purportedly being administered to Midway’s patients.
Most of the services allegedly provided to patients at Midway were billed to the Medicare program as treatments for a diagnosis of thrombocytopenia, a disorder involving a low count of platelets in the blood. According to court documents, none of Midway’s patients actually had low blood platelet counts. To make it appear that the patients actually had low platelet levels, Del Cueto admitted that she and her co-conspirators used chemists, including Dagnesses, to manipulate the blood samples drawn from Midway’s patients before the blood was sent to a laboratory for analysis. In her plea, Del Cueto admitted to ordering that patients at Midway receive medications to treat thrombocytopenia despite knowing that the laboratory results had been falsified and the patients did not actually have any such condition.
Midway was not the only clinic where Del Cueto purported to treat HIV patients with injection and infusion therapies. In her plea, Del Cueto admitted that she engaged in substantially similar fraudulent conduct at Diagnostic Medical Center Inc. (Diagnostic), another Miami-area infusion clinic. At Diagnostic, Del Cueto admitted that she and her co-conspirators also billed the Medicare program for HIV injection and infusion services that she knew were medically unnecessary and, in some instances, never actually provided. At the two clinics, Del Cueto admitted to causing the submission of approximately $9.5 million in fraudulent claims to Medicare.
Dagnesses admitted that he would obtain vials of blood drawn from Midway’s patients and place those vials in a blood centrifuge. After rotating the blood in the centrifuge for approximately 15 minutes, the blood would separate into its component parts, enabling Dagnesses to extract the platelets from the sample. Dagnesses would then return the adulterated blood to his co-conspirators at Midway, who would send it to a laboratory for testing. Dagnesses admitted that he was generally usually paid $1,000 for every vial of blood that he tainted for his co-conspirators at Midway. Dagnesses admitted he was aware that the purpose of tainting the blood was to obtain false laboratory reports for Midway’s medical files, which would make it appear that the medications allegedly provided at Midway were medically necessary, when in fact they were not necessary.
The case is being prosecuted by Trial Attorneys John K. Neal and Anthony Burba of the Criminal Division’s Fraud Section. The case is being investigated by the FBI and the Department of Health and Human Services-Office of Inspector General. The case was brought as part of the Medicare Fraud Strike Force, supervised by Deputy Chief Kirk Ogrosky of the Criminal Division’s Fraud Section and U.S. Attorney Acosta of the Southern District of Florida. Since the inception of MFSF operations, federal prosecutors have indicted 106 cases with 196 defendants in Miami and Los Angeles. Collectively, these defendants fraudulently billed the Medicare program for more than $577 million.
Justice Department Announces Public Education Campaign Grants to Fight Immigration-Related Employment DiscriminationRead the Press Release
WASHINGTON - The Justice Department announced today that it is making grant funding available for public education programs concerning immigration-related employment discrimination.
The Office of Special Counsel for Immigration Related Unfair Employment Practices (OSC), a section of the Justice Department’s Civil Rights Division, announced the availability of funds for public education programs regarding employees’ rights and employers’ obligations under the anti-discrimination provision of the Immigration and Nationality Act (INA). The program is open to public service organizations and others providing information services to employers and/or potential victims of immigration-related employment discrimination. Last year, grants ranging from $40,000 to $100,000 were awarded to 11 organizations serving communities throughout the country.
The INA prohibits discrimination against U.S. citizens and work authorized non-citizens on the basis of citizenship status or national origin in hiring, firing and recruiting or referring for a fee. In addition, the provision prohibits discriminatory over-documentation of workers in the employment eligibility verification process. It also prohibits retaliation for conduct protected under the INA.
The deadline for grant applications is 11:59 p.m. EDT, April 26, 2009. The grant announcement is available on OSC’s Web site at http://www.usdoj.gov/crt/osc or http://www.grants.gov.
Justice Department Announces Agreement to Protect Rights of Military and Overseas Voters in New York Special Congressional ElectionRead the Press Release
WASHINGTON – The Justice Department today announced that it has reached agreement with New York officials to help ensure that military service members and other U.S. citizens living overseas have the opportunity to vote in the state’s March 31, 2009, special election in the 20th Congressional District.
The lawsuit was filed in federal district court yesterday against the state of New York, Gov. David A. Paterson and the state board of elections under the Uniformed and Overseas Citizens Absentee Voting Act (UOCAVA). The action seeks emergency relief for the upcoming election and a permanent remedy to ensure UOCAVA voters are not disenfranchised in future special federal elections.
The agreement filed today, which must still be approved by the federal court, provides for additional time – until April 13, 2009 – for the receipt of overseas ballots for the March 31, 2009, election. The agreement also commits the state to explore whether changes need to be made to ensure UOCAVA voters are not disenfranchised in future special elections and provide a report to the Department of Justice on those efforts by May 15, 2009.
"Our uniformed service members and other overseas citizens deserve the opportunity to participate in elections of our nation’s leaders," said Loretta King, Acting Assistant Attorney General for the Civil Rights Division. "I am pleased that New York’s officials have agreed to measures that will afford immediate relief to ensure that the state’s voters overseas, many of whom are members of our armed forces and their families serving our country around the world, will have a reasonable chance to vote in this special election."
The lawsuit was necessary because New York’s schedule for conducting the March 31, 2009, election did not permit officials to mail absentee ballots overseas in time for voters to receive, mark and return their ballots by the state’s April 7, 2009, deadline. Under New York law, absentee ballots must be postmarked by the day before the election and arrive by the seventh day after the election.
The counties in the 20th Congressional District did not mail requested absentee ballots to New York’s military and other citizens living abroad until March 12, 2009, and, in most cases, March 13, 2009. There are more than 1,300 overseas voters entitled to receive absentee ballots for the March 31, 2009, election, including at least 471 military voters presently stationed overseas.
UOCAVA requires states to allow uniformed service members and overseas citizens to register to vote and to vote absentee for all elections, including special elections, for federal office. The Justice Department has brought numerous suits under UOCAVA, including a number of actions in New York, to ensure that voters are not deprived of an opportunity to vote due to late mailing of absentee ballots by election officials.
More information about UOCAVA and other federal voting laws is available on the Department of Justice Web site at http://www.usdoj.gov/crt/voting/misc/activ_uoc.htm. Complaints about discriminatory voting practices may be reported to the Voting Section of the Civil Rights Division at 1-800-253-3931.
Hyannis, Mass., Man Sentenced to 84 Months for Receiving and Possessing Child PornographyRead the Press Release
WASHINGTON – Harris Taubman, of Hyannis, Mass., was sentenced today in U.S. District Court in Boston for receiving and possessing child pornography, Acting Assistant Attorney General Rita M. Glavin of the Criminal Division and U.S. Attorney Michael J. Sullivan for the District of Massachusetts announced.
Taubman, 48, was sentenced to 84 months in prison for three counts of receipt of child pornography and one count of possession of child pornography. He was indicted on those charges on Feb. 6, 2008, and pled guilty on Feb. 11, 2009.
Taubman was first identified by Barnstable, Mass., police as a result of a 911 call referencing a dispute during which Taubman allegedly pointed a loaded shotgun at a neighbor. According to court documents, when police arrived at Taubman’s residence, they found unlawful ammunition cartridges. A further search revealed numerous printed images of child pornography. The execution of additional search warrants resulted in the seizure of almost 2,000 computer disks containing child pornography, as well as more than 20 computer hard drives. In total, Taubman possessed tens of thousands of images and videos depicting prepubescent children engaged in sexually explicit conduct.
The case is being prosecuted by Trial Attorney Elizabeth M. Yusi of the Criminal Division’s Child Exploitation and Obscenity Section and Assistant U.S. Attorney Dana Gershengorn of the District of Massachusetts’ Major Crimes Unit. The case is being investigated by the FBI and the Barnstable Police Department.
Houstons Methodist Hospital to Pay U.S. More Than $9 Million to Resolve Allegations of Overcharging MedicareRead the Press Release
WASHINGTON – Methodist Hospital in Houston has agreed to pay the United States $9.99 million to settle allegations that it defrauded the federal Medicare program, the Justice Department announced today.
The settlement resolves allegations that Methodist improperly increased charges to Medicare patients in order to obtain enhanced reimbursement from Medicare. In addition to its standard payment system, Medicare pays supplemental reimbursement, called outlier payments, to hospitals in cases where the cost of care is unusually high. Congress enacted the supplemental outlier payment system to ensure that hospitals possess the incentive to treat inpatients whose care requires unusually high costs.
The government alleged that, between January 2001 and August 2003, Methodist improperly inflated charges for inpatient and outpatient care to make its costs for providing such care appear greater than they actually were, and thereby obtain outlier payments from Medicare that it was not entitled to receive.
"Today’s settlement demonstrates the continued commitment by the Justice Department to protect Medicare when it is overcharged by hospitals," said Acting Assistant Attorney General for the Civil Division, Michael F. Hertz. "The Department has brought numerous actions against hospitals alleged to have sought excessive outlier payments, and will remain vigilant in ensuring that hospitals do not file false claims for outlier payments in the future."
"Our ultimate goal is to make certain that every Medicare dollar is used for the benefit of Medicare recipients," said Tim Johnson, acting U.S. Attorney, Southern District of Texas. "We will continue in our efforts to assure that is done."
The settlement with Methodist was the result of a coordinated effort among the Justice Department’s Commercial Litigation Branch in the Civil Division; the U.S. Attorney’s Office for the Southern District of Texas, Affirmative Civil Enforcement Unit; the Department of Health and Human Services, Office of Inspector General and Office of Counsel to the Inspector General; and the Centers for Medicare and Medicaid Services, in investigating and resolving the allegations.
Former Michigan School Official Sentenced to Serve 46 Months in Jail<br /> for Role in Fraud SchemeRead the Press Release
WASHINGTON – A former Michigan school official was sentenced to serve 46 months in jail and to pay $1.34 million in restitution for his role in a fraudulent scheme to obtain millions of dollars from the Detroit-area Ecorse Public School District, the federal E-Rate program and TCF National Bank, the Department of Justice announced today.
Douglas Benit, a former assistant superintendent at Ecorse Public Schools (EPS), was sentenced in the U.S. District Court in Detroit today after pleading guilty on Nov. 24, 2008, to one count each of mail fraud and bank fraud. Douglas Benit and his wife, Mary Ann Elam Benit, were previously indicted by a federal grand jury in Detroit on May 23, 2006. Mary Ann Elam Benit is scheduled to be sentenced tomorrow.
"The children of the Ecorse Public School District as well as countless others around the nation rely on the federal E-Rate program to provide funding for internet access, telecommunication services, and computer and communication networks," said Scott D. Hammond, Acting Assistant Attorney General in charge of the Department’s Antitrust Division. "Douglas Benit exploited his position as a trusted school official and lined his own pockets with money that should have gone to these deserving children."
Among his duties at EPS, Douglas Benit was responsible for the management of the construction of multiple new facilities in the district. While hiding his affiliation with Coral Technology Inc. (Coral), an Ohio corporation under his control, Benit recommended to the school board the awarding of contracts to Coral, effectively steering those contracts to his own company. Funding for these contracts came from EPS general funds, EPS construction bond funds and the federal E-Rate program.
Additionally, Doug and Mary Ann Elam Benit obtained a $200,000 line of credit from Minnesota-based TCF National Bank through the submission of loan application and supporting documentation which vastly overstated and misrepresented their personal and corporate assets and income.
The E-Rate program subsidizes the provision of Internet access and telecommunications services, as well as internal computer and communications networks, to economically disadvantaged schools and libraries. The program was created by Congress in the Telecommunications Act of 1996 and is administered by Universal Service Administrative Company, a non-profit corporation, under the auspices of the Federal Communications Commission.
As a result of the Antitrust Division’s investigation into fraud and anticompetitive conduct in the E-Rate program, a total of seven companies and 18 individuals have pleaded guilty or have been convicted and found guilty or entered civil settlements. Those companies and individuals have paid, agreed to pay, or been sentenced to pay criminal fines and restitution totaling more than $40 million. Including today’s sentence, 12 individuals have been sentenced to serve jail time.
The investigation was conducted jointly by the Antitrust Division’s Cleveland Field Office and the Detroit office of the FBI. Anyone with information concerning fraud or anticompetitive conduct in the E-Rate program should contact the Cleveland Field Office of the Department’s Antitrust Division at 216-687-8400.
Sikorsky Aircraft Pays $2.9 Million to Settle False Claims Act AllegationsRead the Press Release
WASHINGTON —Sikorsky Aircraft Company, a division of United Technologies Corporation, has agreed to pay the United States $2,941,000 to resolve fraud allegations in connection with its contract for the manufacture of Black Hawk helicopters for the Army, the Justice Department announced today.
Sikorsky, located in Stratford, Conn., manufactures the Black Hawk or variations of the Black Hawk for the Army, Navy, Air Force, and Marines, as well as for other nations. Under Sikorsky’s contract with the Army, Sikorsky was required to install armored plates in the Black Hawk to the left of the pilot and to the right of the co-pilot that were ballistically tested to ensure that the helicopters could withstand combat. The United States alleged that from 1991 to 2006, Sikorsky knowingly installed armored plates purchased from Ceradyne Corporation of Costa Mesa, Calif., that had not been ballistically tested as required under the contract. The Army knows of no injuries resulting from the untested plates. Under the False Claims Act, a contractor who knowingly claims payment for noncompliant goods is liable for three times the Government’s damages plus a $5,500 to $11,000 civil penalty for each false claim.
"This settlement sends a message that fraud, especially when it concerns the safety of our men and women in uniform, cannot and will not be tolerated in Government contracts," said Michael F. Hertz, Acting Assistant Attorney General for the Department of Justice’s Civil Division. "As demonstrated here, the Department, including the United States Attorneys’ offices, and investigative agencies such as the ones here, are committed to rooting out such fraud and prosecuting it."
"It is critically important that manufacturers perform all required testing of parts for equipment being used by our military personnel," stated John B. Hughes, Chief of the Civil Division for the U.S. Attorney’s Office in Connecticut. "The U.S. Attorney’s Office takes these matters very seriously and we will do all that we can to ensure the safety of the men and women in the military."
The investigation was conducted by the Defense Criminal Investigative Service, Army Criminal Investigative Division, Defense Contract Audit Agency, and Defense Contract Management Agency, in conjunction with the United States Attorney’s Office for the District of Connecticut.
Justice Department Settles Lawsuit Against the City of Portsmouth, Virginia, Alleging Discrimination Against African Americans in the Hiring of FirefightersRead the Press Release
WASHINGTON – The Department of Justice announced today that it has entered into a consent decree with the City of Portsmouth, Va., that, if approved by the court, will resolve the Department’s complaint that the City of Portsmouth engaged in a pattern or practice of employment discrimination against African Americans in its hiring of entry-level firefighters, in violation of Title VII of the Civil Rights Act of 1964 (Title VII).
The consent decree requires that Portsmouth no longer administer the written examination challenged by the United States, and that it implement new selection procedures for entry-level firefighters that comply with Title VII. Additionally, the consent decree requires the city to deposit $145,000 into a settlement fund that will be used to make awards of back pay to African Americans who were harmed by Portsmouth’s use of the written examination and who are determined to be eligible for relief. African American applicants determined to be eligible for relief under the consent decree may receive a priority offer of employment from Portsmouth, with retroactive seniority for all purposes except for time-in-grade required for promotion. The consent decree requires Portsmouth to hire up to 10 eligible African American claimants as firefighters. Under the consent decree, Portsmouth maintains the opportunity to screen the claimants eligible for consideration for priority hire to ensure that they otherwise meet the qualifications.
"The Department commends the City of Portsmouth for working cooperatively to resolve this matter without contested litigation. We are pleased that Portsmouth has agreed to put in place new selection practices for firefighters that comply with Title VII, and to take necessary steps to provide relief to those African Americans who have been harmed by the City’s hiring practices," said Loretta King, Acting Assistant Attorney General for the Civil Rights Division. "Ending employment practices that have a discriminatory impact on the basis of race is a significant priority of the Department. This settlement sends a clear message that hiring practices with discriminatory impact on account of race will not be tolerated."
"We are grateful that the City is working with the Department to ensure every applicant has an equal opportunity to serve as a firefighter," said Dana J. Boente, Acting U.S. Attorney for the Eastern District of Virginia.
Title VII prohibits discrimination in employment on the basis of race, color, sex, national origin or religion. Title VII prohibits not only intentional discrimination, but also the use of employment practices, such as written examinations, which result in disparate impact, unless the employer can prove that such practices are job related and consistent with business necessity.
The complaint, which was filed today in federal district court in Norfolk, Va., alleges that Portsmouth’s use of a written examination in the selection of entry-level firefighters resulted in disparate impact employment discrimination against African American applicants for that position. According to the complaint, African American applicants passed the written examination at a rate of approximately 42 percent, while the corresponding pass rate for white applicants was approximately 86 percent. The complaint also alleges that Portsmouth cannot demonstrate that the written examination is job related for the firefighter position and consistent with business necessity, as required by Title VII.
More information about Title VII and other federal employment laws is available on the Department of Justice Web site at http://www.usdoj.gov/crt/emp/index.html
Connecticut Resident Pleads Guilty to Multi-Million Dollar Tax Fraud ConspiracyRead the Press Release
WASHINGTON — A Newton, Conn., resident who was involved in operating three businesses in Brooklyn, N.Y., pleaded guilty to conspiring to defraud the Internal Revenue Service (IRS), the Department of Justice announced today.
Mariusz Debowksi pleaded guilty in U.S. District Court in Manhattan to conspiracy to aid another in filing false tax returns. Between approximately 2000 and February 2005, Debowski conspired with others to falsify income tax returns through a fraudulent check cashing scheme for the owner of a corporation that was engaged in the business of providing maintenance and insulation services to New York Presbyterian Hospital (NYPH). According to the charge, Debowski provided false documentation to co-conspirators indicating that he had performed construction services and received more than $2.3 million in checks from the co-conspirators as payment for the construction services. Debowski cashed the checks but returned the bulk of the money to the co-conspirators in exchange for a fee. The co-conspirators then took false deductions for those payments made to Debowski’s businesses.
"Those who illegally profit from their participation in fraudulent schemes will be vigorously prosecuted," said Scott D. Hammond, Acting Assistant Attorney General in charge of the Department’s Antitrust Division.
The tax fraud conspiracy that Debowski is charged with carries a maximum penalty of five years in prison, three years of supervised release and a $250,000 fine. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.
In April 2007, as part of the same investigation, Michael Theodorobeakos and two maintenance and insulation companies he co-owned – Monosis Inc. and STU Associates Inc. – pleaded guilty to conspiring to rig bids on the supply of maintenance and insulation services to NYPH and Mount Sinai Medical Center (Mount Sinai). In addition, Michael Vignola and Mister AC Ltd. pleaded guilty in November 2007, to conspiring to rig bids on heating, ventilation and air conditioning (HVAC) services provided to NYPH and paying kickbacks to former NYPH purchasing officials. In April 2008, Aaron S. Weiner pleaded guilty for participating in a conspiracy wherein Weiner acted as a conduit in another million-dollar kickback scheme also involving one of the same former NYPH purchasing officials involved with the Vignola kickback schemes.
These charges arose from an ongoing federal antitrust investigation of fraud, bribery, tax-related offenses and bidding irregularities relating to contracts administered by the Facilities Operations Department and the Engineering Department at NYPH and the Engineering Department at Mt. Sinai. The investigation is being conducted by the Antitrust Division’s New York Field Office, the FBI and the Internal Revenue Service Criminal Investigation’s New York Field Office.
Anyone with information concerning bid rigging, bribery, tax offenses or fraud related to contracts administered by the Facilities Operations Department at NYPH or the Engineering Departments at Mount Sinai or NYPH should contact the New York Field Office of the Antitrust Division at 212-264-9308 or the New York Office of the FBI at 212-384-4467.
Sixth Aegis Company Principal Sentenced in Chicago to Ten Years in Prison for His Part in Firms $60 Million Tax Fraud ConspiracyRead the Press Release
WASHINGTON - Edward B. Bartoli, a Clearwater, Fla., resident and former attorney, was sentenced to 10 years in prison by U.S. District Judge Charles R. Norgle of Chicago, the Justice Department and Internal Revenue Service (IRS) announced today.
Bartoli is the last of six defendants to be sentenced after they were convicted of various tax crimes in May 2008. Prior to his conviction, Bartoli was a founder of Aegis and its legal director. Bartoli and his co-defendants were found to have carried out a nearly decade-long scheme to market and sell sham domestic and foreign trusts through the Aegis Company to some 650 wealthy taxpayer clients.
According to court documents and evidence introduced at trial, the tax fraud scheme used a network of promoters, sub-promoters, managers, attorneys and accountants and resulted in a $60 million dollar tax loss to the United States. Aegis, which is now defunct, was formerly based in Palos Hills, Ill.
In addition to 10 years in prison, Judge Norgle sentenced Bartoli to 3 years of supervised release. In addition to the tax fraud conspiracy, Bartoli was found guilty of and sentenced on twenty-four counts of aiding and assisting in the filing of false returns, four counts of tax evasion, seven counts of mail fraud, and two counts of wire fraud.
Bartoli and his five co-defendants were convicted following an 11-week trial. The defendants were indicted in 2004, following a lengthy undercover investigation by IRS agents, code-named "Operation Trust Me," and the seizure of roughly 1.5 million documents, computer files and related materials. Nationwide, the Chicago-based investigation has resulted in convictions of more than 30 defendants and charges against approximately 30 other defendants around the country, including in Florida, Illinois, New York, Ohio and West Virginia.
Five of Bartoli’s co-defendants already have been sentenced by Judge Norgle. Michael A. Vallone, of Orlando Park, Ill., was sentenced to 18 ½ years in prison in October 2008. Vallone was one of the founders and the executive director of Aegis. Also in October 2008, William S. Cover, of Naperville, Ill., a promoter and manager of Aegis trusts and the president of Sigma Resource Management Inc., which provided management services to purchasers of Aegis trusts, was sentenced to 13 years in prison and ordered to forfeit his home. Bartoli, Vallone, and Cover were also subject to an additional $4.125 million forfeiture order.
In November 2008, Michael T. Dowd, of Glenview, Ill., a promoter and manager of Aegis trusts who provided management services to purchasers of Aegis trusts through Aegis and Sigma Resource Management Inc., was sentenced to 10 years in prison. In December 2008, Timothy Shawn Dunn, a Chesterton, Ind., resident, was sentenced to 17 ½ years in prison. Dunn was a promoter and manager of Aegis trusts, who also owned and operated Moneyfacts, an investment advisory business in Highland, Ind. Also in December 2008, Gadsden, Ala. resident Robert W. Hopper, was sentenced to more than 16 years in prison. Hopper was an original founder of Aegis and its managing director.
Two other defendants in this case, David E. Parker, of Williamsville, N.Y., an attorney who was the legal director of the Aegis Management Company, and John C. Stambulis of Palos Heights, an attorney and a trust counsel of Aegis, both pleaded guilty and testified for the government at trial. They also are awaiting sentencing.
"Today’s sentence, as well as the sentences of Mr. Bartoli’s co-defendants, sends a strong message that those individuals who evade taxes or promote fraudulent tax evasion schemes face significant consequences," said Ronald A. Cimino, Acting Deputy Assistant Attorney General of the Justice Department’s Tax Division. "These penalties include substantial fines and lengthy prison sentences."
"Abusive trust schemes are a threat to our nation’s tax system," said Al Patton, Special Agent in-Charge of the IRS-Criminal Investigation in Chicago. "Establishing abusive trusts for the purpose of evading taxes is a crime for which promoters and investors will be prosecuted and sentenced to years of imprisonment. Today’s sentencing demonstrates the seriousness of the offenses related to these unlawful schemes."
Mr. Cimino thanked IRS-Criminal Investigation Division agents for their hard work, as well as Assistant U.S. Attorneys Stephen L. Heinze and Barry Rand Elden, and Tax Division trial attorney Thomas W. Flynn, who prosecuted the case.
More information about the Justice Department’s Tax Division and its enforcement efforts is available at www.usdoj.gov/tax .
Puerto Rico Political Consultant Sentenced to Three Months in Prison and Three Months of Home DetentionRead the Press Release
WASHINGTON – Alberto Goachet, 67, a political consultant and aide to former Puerto Rico Sen. Jorge De Castro Font, was sentenced today to three months in prison, three months of home detention and three years of supervised release, announced Acting Assistant Attorney General Rita M. Glavin of the Criminal Division and U.S. Attorney for the District of Puerto Rico Rosa Emilia Rodríguez-Vélez.
Goachet was sentenced by U.S. District Judge Francisco Augusto Besosa in the District of Puerto Rico. Judge Besosa ordered Goachet to surrender no later than April 24, 2009, by noon, at the Metropolitan Detention Center in Guaynabo, Puerto Rico, where he will serve his sentence.
Goachet pleaded guilty on Dec. 4, 2008, to a one-count information charging him with conspiring with De Castro Font and others to launder money provided by a Puerto Rico businessman to De Castro Font. Goachet admitted that he, De Castro Font and others laundered the money through the use of fake invoices purporting to reflect legitimate payments to a political consulting firm owned by Goachet. The false invoices were meant to conceal the businessman’s illegal payments to De Castro Font
As part of his plea agreement, Goachet also admitted that in August 2008, he was asked by the FBI about the money laundering scheme, and during that interview he falsely claimed that the invoices were legitimately drafted for services rendered to the businessman. Goachet admitted that he had denied that the money was intended eventually for De Castro Font, when in fact he knew the invoices were fraudulent and the money was intended for De Castro Font.
De Castro Font pleaded guilty to 20 counts of honest services wire fraud and one count of conspiracy to commit extortion on Jan. 21, 2009. He is currently awaiting sentencing.
This case is being prosecuted by Trial Attorney Matthew L. Stennes of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorneys Timothy R. Henwood and Jacqueline Novas of the District of Puerto Rico. The case is being supervised by Section Chief William M. Welch II of the Public Integrity Section and U.S. Attorney Rosa Emilia Rodríguez-Vélez of the District of Puerto. The case is being investigated by the FBI’s San Juan Field Office.
Irish Trading Firm and Its Officers Charged in Scheme to Supply Iran with Sensitive U.S. TechnologyRead the Press Release
WASHINGTON – An Irish trading company and three of its officers have been charged with purchasing helicopter engines and other aircraft components from U.S. firms and illegally exporting them to Iran using companies in Malaysia and the United Arab Emirates. Among the alleged recipients of these U.S. goods was an Iranian military firm that has since been designated by the United States for being owned or controlled by entities involved in Iran’s nuclear and ballistic missile program.
The 25-count indictment, which was filed under seal in federal court in the District of Columbia in July 2008 and unsealed today, was announced by Matthew G. Olsen, Acting Assistant Attorney General for National Security; Jeffrey A Taylor, U.S. Attorney for the District of Columbia; Miguel Unzueta, Special Agent in Charge of the San Diego Office of Investigations, U.S. Immigration and Customs Enforcement, Department of Homeland Security; and Richard W. Gwin, Special Agent in Charge for the Defense Criminal Investigative Service, Western Field Office.
The defendants charged in the indictment include Mac Aviation Group, doing business as Mac Aviation Limited and Mac Aviation Nigeria (collectively "Mac Aviation"), which is a company registered in Ireland that brokers aircraft parts and related goods for foreign customers. The remaining defendants are Thomas McGuinn, also known as Tom McGuinn, a 72-year-old citizen and resident of Ireland who is the owner, director and principal officer of Mac Aviation; as well as his son, Sean McGuinn, a 40-year-old citizen and resident of Ireland, who serves as sales/procurement director of Mac Aviation; and Sean Byrne, who serves as the commercial manager of Mac Aviation.
The indictment charges each of the defendants with two counts of conspiracy, 19 counts of violating the International Emergency Economic Powers Act (IEEPA) and Iranian Transactions Regulations, four counts of false statements, and forfeiture allegations. If convicted, the defendants face a maximum sentence of 10-20 years in prison for each of the IEEPA counts, 5-20 years in prison for each of the conspiracy counts, and five years in prison for each of the false statement counts.
According to the indictment, beginning as early as August 2005 and continuing through July 2008, the defendants solicited purchase orders from customers in Iran for U.S.-origin aircraft engines and parts and then sent requests for aircraft components to U.S. companies. The defendants wired money to banks in the U.S. as payment for these parts and concealed from U.S. sellers the ultimate end-use and end-users of the purchased parts. The defendants caused these parts to be exported from the United States to third countries like Malaysia before causing them to be transshipped to Iran.
The object of the conspiracy, according to the indictment, was to make money for Mac Aviation and its employees; supply Iran with U.S. aircraft parts and engines; evade U.S. licensing requirements; and conceal these prohibited transactions from detection.
According to the indictment, the defendants purchased 17 model 250 turbo-shaft helicopter engines from Rolls-Royce Corp. in Indiana for $4.27 million on behalf of an Iranian trading company. The model 250 engine was originally designed for a U.S. Army light observation helicopter and has since been installed in numerous civil and military helicopters. The defendants concealed from Rolls-Royce the ultimate end-use and end-user of the helicopters engines. In one exchange, one defendant declared that Mac Aviation was not selling the engines to any military organization or government.
The indictment alleges that the engines were exported from the United States to third countries, including Malaysia, and later shipped to Iran. Among the recipients in Iran was the Iran Aircraft Manufacturing Industrial Company, known by its Iranian acronym as HESA. On Sept. 17, 2008, the Treasury Department designated several Iranian weapons of mass destruction proliferators and members of their support networks pursuant to Executive Order 13382. Among the entities designated was HESA, which the Treasury Department determined was controlled by Iran’s Ministry of Defense and Armed Forces Logistics and has provided support to the Iranian Revolutionary Guard Corps.
The indictment further alleges that the defendants caused aircraft components known as vanes to be exported from the United States to Iran. According to the indictment, the defendants caused United Technologies, Pratt & Whitney to export 50 "5th stage vanes" valued at approximately $141,750 from its Connecticut facility to Mac Aviation. The defendants falsely stated that final destination of the components was Belgium. Instead, these components were routed to Iran Aircraft Industries, known by its Iranian acronym as IACI, in Tehran.
The indictment alleges that the defendants also caused aircraft bolts valued at approximately $2,261 to be exported from the United States to Iran. According to the indictment, the defendants caused Uniflight LLC, a company in Texas, to ship 32 aircraft bolts to a representative of a trading company in Dubai, United Arab Emirates. Invoices referenced in the indictment indicate that the final destination of the aircraft bolts was Kish Island, Iran.
This investigation was conducted by special agents from the Department of Homeland Security’s U.S. Immigration and Customs Enforcement and the Department of Defense’s Defense Criminal Investigative Service. Special agents from the U.S. Department of Commerce, Office of Export Enforcement, also assisted in the investigation.
The case is being prosecuted by Assistant U.S. Attorneys Denise Cheung and Ann Petalas of the U.S. Attorney’s Office for the District of Columbia, and Trial Attorneys Jonathan Poling and Ryan Fayhee of the Counterespionage Section of the Justice Department’s National Security Division.
The details contained in an indictment are mere allegations. All defendants are presumed innocent unless and until proven guilty in a court of law.
Department of Justice Announces Resources for Fight Against Mexican Drug CartelsRead the Press Release
WASHINGTON – Today Deputy Attorney General David Ogden announced increased efforts and reallocation of DOJ personnel to combat Mexican drug cartels in the United States and to help Mexican law enforcement battle cartels in their own country. Deputy Attorney General Ogden was joined in announcing a comprehensive response to the situation on the Southwest border by Department of Homeland Secretary Janet Napolitano and Deputy Secretary of State Jim Steinberg.
"For more than a quarter century, U.S. law enforcement agencies have recognized that the best way to fight the most sophisticated and powerful criminal organizations is through intelligence-based investigations to target the greatest threats," said Deputy Attorney General David Ogden. "The Department’s Mexican Cartel Strategy confronts those cartels as criminal organizations. As we’ve found with other large criminal groups, if you take their money and lock up their leaders, you can loosen their grips on the vast organizations they use to carry out their criminal enterprises. The Department of Justice is committed to taking advantage of all available resources to target the Mexican cartels and to help our Mexican counterparts in their courageous effort to take on these criminal organizations."
Today the United States announced it will be investing $700 million this year in enhancing Mexican law enforcement and judicial capacity and working closely to coordinate efforts against the cartels. The Department of Justice, through the FBI, U.S. Drug Enforcement Administration (DEA), Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), U.S. Marshals Service (USMS), the Criminal Division and the Office of Justice Programs, will work to investigate and prosecute cartel members for their illegal activities in the United State and with law enforcement colleagues to disrupt illegal flows of weapons and bulk cash to Mexico.
The Mexican Cartel Strategy, led by the Deputy Attorney General, uses federal prosecutor-led task forces that bring together all law enforcement components to identify, disrupt and dismantle the Mexican drug cartels through investigation, prosecution and extradition of their key leaders and facilitators, and seizure and forfeiture of their assets. The Department is increasing its focus on investigations and prosecutions of the southbound smuggling of guns and cash that fuel the violence and corruption and attacking the cartels in Mexico itself, in partnership with the Mexican Attorney General’s Office (PGR) and the Secretariat of Public Security (SSP).
DEA, already the largest U.S. drug enforcement presence in Mexico with 11 offices in that country, is placing 16 new positions in its Southwest border field divisions. With this increase, 29 percent of DEA’s domestic agent positions (1,180 agents) are now allocated to its Southwest border field divisions. DEA is also forming four additional Mobile Enforcement Teams (METs) to specifically target Mexican methamphetamine trafficking operations and associated violence, both along the border and in U.S. cities impacted by the cartels.
ATF is increasing its efforts by relocating 100 personnel to the Houston Field Division in the next 45 days as part of a new ATF intelligence-driven effort, known as Gunrunner Impact Teams (GRITs). The teams will focus ATF’s violent crime-fighting and firearms trafficking expertise, along with its regulatory authority and strategic partnerships to combat violence along the U.S.-Mexico border.
As part of the Recovery Act funding, ATF received $10 million for Project Gunrunner efforts, aimed at disrupting arms trafficking between the U.S. and Mexico, to include hiring 25 new special agents, six industry operations investigators, three intelligence research specialists and three investigative analysts. The funding will establish three permanent field offices, dedicated to firearms trafficking investigations, in McAllen, Texas; El Centro, Calif.; and Las Cruces, N.M (including a satellite office in Roswell, N.M.). Project Gunrunner has resulted in ATF referring more than 1,500 defendants for prosecution involving more than 12,000 weapons.
ATF will also continue its eTrace initiative with Mexican officials, which allows law enforcement agencies to identify trafficking trends of drug trafficking organizations and other criminal organizations funneling guns into Mexico from the United States, as well as to develop investigative leads in order to stop firearms traffickers and straw purchasers (people who knowingly purchase guns for prohibited persons) before they cross the border. In FY08, Mexico submitted more than 7,500 recovered guns for tracing, showing that most originated in Texas, Arizona and California.
The FBI is stepping up its efforts along the Southwest border by creating a Southwest Intelligence Group (SWIG), which will serve as a clearinghouse of all FBI activities involving Mexico. The FBI will also increase its focus on public corruption, kidnappings and extortion relating to Southwest border issues.
Already, the FBI has undertaken successful initiatives in Mexico and Central America, including the Central American Fingerprint Exchange (CAFÉ) initiative. The FBI will continue this initiative, which was developed to collect, store, and integrate biometric data from El Salvador, Guatemala, Belize, Honduras, and the Mexican state of Chiapas into a central database accessible to U.S. law enforcement, as well as the Transnational Anti-Gang initiative, which coordinates the sharing of gang intelligence between the U.S. and El Salvador.
USMS has stepped-up its efforts along the Southwest border, deploying 94 additional Deputy U.S. Marshals during the last eight months and sending four additional deputies to Mexico City to assist the Marshals Service Mexico City Foreign Field Office.
USMS is increasing its efforts in the Southwest border region under the Mexico Investigative Liaison Program, a cross-border violent fugitive apprehension initiative where USMS personnel, through daily contact with Mexican law enforcement, provide a rapid international response to law enforcement agencies on both sides of the border in the apprehension of fugitives who commit crimes and flee across the international border.
Twenty-five new Criminal Investigators-Asset Forfeiture Specialists have been placed in USMS asset forfeiture units in the field. The new positions are unique in that they will be solely dedicated to the USMS Asset Forfeiture Division and will support U.S. Attorneys Offices and investigative agencies in investigations of cartels and other large-scale investigations.
In addition, DOJ’s Organized Drug Enforcement Task Forces Program (OCDETF) is adding analyst personnel to its strike force capacity along the Southwest border and the Office of Justice Programs will be investing $30 million in stimulus funding to assist with state and local law enforcement to combat narcotics activity coming through the southern border and in high intensity drug trafficking areas. State and local law enforcement organizations along the border can apply for COPS and Byrne Justice Assistance grants from the $3 billion provided for those programs in the stimulus package.
California Couple Plead Guilty in Alien Smuggling Scheme in Which Some Were Forced to Work at Elder Care HomesRead the Press Release
WASHINGTON – The owner of two elder care homes in Long Beach, Calif., has pleaded guilty on March 23, 2009 to bringing undocumented aliens into the United States and forcing two of them to work at her businesses.
Evelyn Pelayo, 53, a resident of Long Beach, pleaded guilty on March 23, 2009 to forced labor and unlawful conduct of holding passports to further forced labor. Pelayo owned two residences in Long Beach where she operated elderly care and boarding facilities called Vernon Way Care Home and Walton Care Home.
In a plea agreement filed in federal court, Pelayo admitted that she paid a co-defendant $6,000 to smuggle two undocumented aliens into the United States from the Philippines and then forced them to work at her elder care homes after confiscating their passports and threatening to turn them over to authorities if they attempted to escape.
Pelayo’s husband, Darwin Padolina, 56, pleaded guilty on March 23, 2009 to harboring a third undocumented alien for private financial gain. Padolina admitted that he concealed the undocumented alien for 10 years while the person worked as a domestic servant.
"Defendant Pelayo practiced a modern-day form of slavery, coercing employees to work in deplorable conditions for unfair wages," said Loretta King, Acting Assistant Attorney General for the Civil Rights Division. "The Civil Rights Division will remain vigilant in finding and prosecuting those who prey on foreign nationals in this manner."
"Using fear and threats of reprisal, the defendants in this case exploited the dreams of foreign nationals who sought a better life in the United States," said U.S. Attorney Thomas P. O’Brien. "Instead of realizing the American dream, the victims in this case were subjected to inhumane treatment that profited only the defendants. For forcing victims to work up to 24 hours a day, everyday, while keeping about half of their meager salaries, Ms. Pelayo is now facing a lengthy prison sentence commensurate with her crimes."
Two other defendants in the case, Rodolfo Ebrole Demafeliz Jr., 39, and Rolleta Riazon, 28, both of the Philippines, previously pleaded guilty for conspiracy to bring aliens into the United States. Demafeliz and Riazon have completed their sentences and have returned to the Philippines.
According to the court documents, Pelayo recruited potential workers in the Philippines, promising them jobs in her elder care facilities. Once the victims agreed, Pelayo contacted Demafeliz, a Taekwondo martial arts instructor, who would enter the undocumented aliens in Taekwondo tournaments in the United States as a ruse to bring them into the country. Demafeliz obtained visas for the victims and provided them with limited martial arts training to make the visas appear legitimate.
Once the aliens were brought to Southern California, Pelayo paid Demafliz $6,000 per victim. She then doubled that smuggling fee and charged each of the victims $12,000. Pelayo instructed the victims that they would have to work for her for a minimum of 10 years, and during that time they would be charged debt repayments. Pelayo confiscated the victims’ passports and verbally abused them, threatening to contact police with false allegations and immigration officials if they tried to escape.
The two elder care homes were shut down in April 2008, following the execution of the federal search warrants. At the time, 10 elderly patients were rescued and moved to other facilities.
Robert Schoch, Special Agent in Charge of the Immigration and Customs Enforcement Office of Investigations in Los Angeles, said: "Today’s guilty pleas are a disturbing reminder that even in today's modern society vestiges of slavery still exist. It is a sad reflection on human greed and heartlessness, when individuals believe they can egregiously exploit people from other countries and other cultures. ICE will continue to work aggressively to ensure that those who engage in these abusive practices are made to pay for their crimes."
Salvador Hernandez, Assistant Director in Charge of the FBI in Los Angeles, commented: "This case is only the latest example of modern-day slavery, and a grim reminder that this criminal behavior is practiced in our local neighborhoods. The Human Trafficking Task Force in Los Angeles has made consistent progress in identifying and dismantling trafficking organizations, as well as drawing much-needed attention to this abhorrent crime problem."
Pelayo and Padolina pleaded guilty before U.S. District Judge Gary A. Feess, who is scheduled to sentence the defendants on June 22, 2009. At sentencing, Pelayo faces a statutory maximum penalty of 25 years in federal prison, and Padolina faces a maximum possible penalty of 10 years in prison.
The case against Pelayo and her husband was investigated by the Los Angeles Metropolitan Area Task Force on Human Trafficking. The case was prosecuted by Assistant U.S. Attorney Sandy Leal and Civil Rights Division Trial Attorney Kayla Bakshi.
In Los Angeles, the FBI, U.S. Immigration and Customs Enforcement, the U.S. Department of Labor's Office of the Inspector General, the U.S. Attorney's Office and the Los Angeles Police Department, along with several community groups, comprise the Los Angeles Metropolitan Area Task Force on Human Trafficking, whose mission is to improve tactics for identifying and rescuing trafficking victims, provide assistance to victims and prosecute those responsible for human trafficking. The Human Trafficking Task Force in Los Angeles has established a toll-free hotline – (800) 655-4095 – that victims and individuals with information about victims are encouraged to call. Information may be provided anonymously and will be kept confidential.
Veterans Affairs Official to Plead Guilty to Conspiracy and Wire FraudRead the Press Release
WASHINGTON – The Associate Director of the Department of Veterans Affairs (VA) Consolidated Mail Outpatient Pharmacy in Hines, Ill., agreed to plead guilty to being part of a conspiracy to defraud the VA and the Small Business Administration (SBA), the Department of Justice announced today. His wife and the temporary staffing company she founded agreed to plead guilty to participating in the same conspiracy.
In three separate plea agreements filed today in U.S. District Court in Chicago, William J. Brandt, the associate director of the VA facility from 1996 until April 2007, his wife, Esperanza A. Brandt and Pronto Staffing Inc. (Pronto) each agreed to plead guilty to one charge of conspiracy to commit wire fraud. William Brandt also agreed to plead guilty to one charge of wire fraud, which deprived the VA and the public of his honest services. The Outpatient Pharmacy in Hines, one of seven regional VA mail-out pharmacies, currently processes and sends out more than 90,000 prescriptions each day to veterans. Under the plea agreements, which are subject to court approval, the Brandts and Pronto have agreed to cooperate with the Justice Department’s ongoing investigation.
"The Department of Veterans Affairs supports and cares for our nation’s veterans and their families," said Scott D. Hammond, Acting Assistant Attorney General in charge of the Department’s Antitrust Division. "We are committed to pursuing prison terms for those who would corrupt the vital mission of the VA by misusing their official position for private gain."
The Brandts and Pronto admitted to conspiring with others to commit wire fraud in a scheme to fraudulently allow Pronto to provide temporary pharmacists to the Outpatient Pharmacy where William Brandt worked supervising pharmacists. Pronto was created by the Brandts in 2000 to provide pharmacists to the Hines Outpatient Pharmacy. The company later sought SBA certification as a woman –owned, minority –owned small disadvantaged business and 8(a) Program participant. As part of the conspiracy, the Brandts agreed to allow another company to fraudulently masquerade as Pronto and qualify for contracts set aside for SBA and 8(a) participants.
William Brandt also agreed to plead guilty to wire fraud for making materially false misrepresentations to the VA and other government officials to hide his involvement with Pronto. Brandt claimed that Pronto was solely managed by his wife in order to avoid conflict of interest laws governing federal employees. During the course of the scheme, William Brandt, working with others, secretly agreed that the billing rates charged to the VA for certain pharmacists provided by Pronto should be increased. Between 2000 and 2007, the Brandts and other unindicted co-conspirators used Pronto to bill the VA for more than $8 million in services to the Hines, Ill., Outpatient Pharmacy facility. This conduct deprived the VA and the public of Brandt’s honest service.
This is the second case involving the Hines Outpatient Pharmacy facility. On July 24, 2008, Joel M. Gostolmelsky, the director of the facility, pleaded guilty to conspiracy and to accepting illegal gratuities in connection with awarding staffing and supply contracts, including for temporary pharmacists.
William Brandt faces a maximum sentence of 20 years imprisonment and a fine of $250,000 for the wire fraud offense. William and Esperanza Brandt each face a maximum sentence of five years imprisonment and a fine of $250,000 for the conspiracy charge. Pronto faces a maximum fine of $500,000. The maximum fine for each of these violations 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. Their actual sentences will be determined by the court.
"The VA Office of Inspector General vigorously investigates every credible allegation against VA employees who betray the trust of our veterans and taxpayers by committing crimes related to the programs and operations of VA. Mr. Brandt is the fourth supervisory employee of VA’s Consolidated Mail Outpatient Pharmacy program, including his former supervisor at Hines, to be prosecuted since 2005 for abusing their government positions for private gain," said George J. Opfer, Inspector General of the Department of Veterans Affairs.
Today’s charges reflect the Department’s commitment to protecting U.S. taxpayers from procurement fraud through its creation of the National Procurement Fraud Task Force. The National Procurement Fraud Initiative, announced in October 2006, is designed to promote the early detection, prosecution and prevention of procurement fraud associated with the increase in contracting activity for national security and other government programs.
The guilty pleas announced today resulted from an ongoing investigation of unlawful conduct concerning the VA’s Consolidated Mail Outpatient Pharmacies conducted jointly by the Department of Justice Antitrust Division’s Chicago Field Office and the Department of Veteran’s Affairs, Office of Inspector General, with assistance from the Small Business Administration, Office of Inspector General; the Department of Defense, Criminal Investigative Service; and the U.S. Secret Service.
Anyone with information concerning bid rigging, fraud, kickbacks, bribery or other crimes relating to violations of federal procurement laws meant to foster competition concerning any of the VA’s Consolidated Outpatient Pharmacies should contact the Chicago Field Office of the Antitrust Division at 312-353-7530 or the VA Office of Inspector General at 1-800-488-8244.
Two Doctors and Two Medical Assistants Plead Guilty in $10 Million Medicare Fraud SchemeRead the Press Release
WASHINGTON – Four Miami-area residents pleaded guilty today in connection with a $10 million Medicare fraud scheme involving HIV infusion clinics, Acting Assistant Attorney General Rita M. Glavin of the Criminal Division and U.S. Attorney R. Alexander Acosta of the Southern District of Florida announced today.
Dr. Roberto Rodriguez, 54; Dr. Carlos Garrido, 69; Gonzalo Nodarse, 38; and Alexis Carrazana, 41; all pleaded guilty before U.S. District Judge Paul C. Huck to one count of conspiracy to commit health care fraud. All four defendants admitted to working at Midway Medical Center Inc. (Midway), a Miami clinic that purported to specialize in the treatment of HIV patients.
According to the plea documents, Rodriguez was a co-owner of and practicing physician at Midway. Rodriguez admitted that he and his co-conspirators routinely billed the Medicare program for services that were medically unnecessary and, in many instances, never provided. Rodriguez admitted to purchasing only a small fraction of the medication that was purportedly being administered to Midway’s patients.
Most of the services provided to patients at Midway were billed to the Medicare program as treatments for a diagnosis of thrombocytopenia, a disorder involving a low count of platelets in the blood. According to the plea documents, none of Midway’s patients actually had low blood platelet counts. Rodriguez admitted that to make it appear that the patients actually had low platelet levels, he and his co-conspirators used chemists to manipulate the blood samples drawn from Midway’s patients before the blood was sent to a laboratory for analysis. In his plea, Rodriguez admitted to ordering that patients at Midway receive medications to treat thrombocytopenia despite knowing that the laboratory results had been falsified and the patients did not actually have that condition.
Midway was not the only clinic where Rodriguez purported to treat HIV patients with injection and infusion therapies. In his plea, Rodriguez admitted that he was listed as a medical director and practicing physician for five other Miami-area HIV infusion clinics between approximately October 2003 and February 2005, where he engaged in similar misconduct. Specifically, Rodriguez admitted he and his co-conspirators billed the Medicare program for HIV injection and infusion services that Rodriguez knew were medically unnecessary and, in some instances, never actually provided. Rodriguez admitted to causing more than $20 million in false claims to be submitted to the Medicare program at all of his clinics, including Midway.
Like Rodriguez, Garrido was a part-owner and practicing physician at Midway. In his plea, Garrido admitted that he and his co-conspirators routinely billed the Medicare program for services that were medically unnecessary and, in many instances, never provided. Garrido admitted to purchasing only a small fraction of the medication that was purportedly being administered to Midway’s patients. Garrido ordered that patients be treated with medications he knew they did not need and that, in many instances, he knew the clinic did not have available to provide to the patients. Garrido admitted to working at Midway for approximately eight months before the clinic closed, during which time he admitted to submitting more than $1 million in fraudulent claims to the Medicare program.
Nodarse and Carrazana worked at Midway as medical assistants. In their pleas, the two assistants admitted to making false entries in medical records indicating that they had provided medications on particular dates and in particular dosages to patients, when, in fact, they had not provided medications. The medical assistants also admitted to being fully aware that blood samples drawn from Midway’s patients were tainted to make it appear that the patients had conditions they did not have. Both assistants admitted to administering medications to patients that they knew the patients did not need. Nodarse, who worked at Midway throughout its existence, admitted to conspiring to submit more than $10 million in false and fraudulent claims for HIV infusion services allegedly provided at the clinic.
The case is being prosecuted by Trial Attorney John K. Neal of the Criminal Division’s Fraud Section. The FBI and the Department of Health and Human Services, Office of Inspector General, conducted the investigation. The case was brought as part of the Medicare Fraud Strike Force (MFSF), supervised by Deputy Chief Kirk Ogrosky of the Criminal Division’s Fraud Section and U.S. Attorney Acosta of the Southern District of Florida. Since the inception of MFSF operations, federal prosecutors have indicted 106 cases with 192 defendants in both Los Angeles and Miami. Collectively, these defendants fraudulently billed the Medicare program for more than half a billion dollars.
MS-13 Member Sentenced to 25 Years in Prison for Involvement in Rico ConspiracyRead the Press Release
WASHINGTON – A member of La Mara Salvatrucha, or MS-13, was sentenced today to 25 years in prison and five years of supervised release for his participation in a racketeering enterprise, Acting Assistant Attorney General Rita M. Glavin of the Criminal Division and U.S. Attorney Edward M. Yarbrough of the Middle District of Tennessee announced. Manuel Marquez, a/k/a "Morro," was sentenced in Nashville, Tenn., by Chief Judge Todd J. Campbell of the Middle District of Tennessee.
At his plea hearing on Dec. 17, 2007, Marquez admitted that he and others involved in the MS-13 gang conspired to participate in a pattern of racketeering activity in the Nashville metropolitan area that included murder, attempted murder and witness tampering. Marquez admitted that on April 12, 2006, he and other MS-13 gang members fired handguns at a rival gang member and his girlfriend. The rival gang member was struck several times and sustained permanent physical injuries. Marquez also admitted that on May 21, 2006, he and other MS-13 gang members fired a handgun at an individual who was suspected of being a member of the rival street gang Brown Pride. The victim was struck and wounded in the arm.
Marquez admitted that on June 17, 2006, he and other MS-13 gang members shot and killed two rival gang members sitting inside a car at a traffic light. Marquez also admitted that in August 2006, he and other MS-13 members discussed and planned the murder of a Brown Pride member who worked at a food processing facility outside Nashville. Marquez also admitted that on Aug. 26, 2006, he and other MS-13 gang members discussed and planned the murder of rival gang members outside a Nashville nightclub. Marquez further admitted that on Sept. 3, 2006, he and another MS-13 gang member shot at a crowd of suspected rival gang members outside a different Nashville nightclub, wounding two men. Finally, Marquez admitted that on Sept. 4, 2006, he and another MS-13 gang member shot a rival gang member several times in the back at Percy Priest Lake outside Nashville.
Marquez is the last of the defendants to be sentenced on RICO charges stemming from an indictment returned by a federal grand jury in Nashville on Jan. 10, 2007. The indictment charged 14 members of MS-13 with conspiring to participate in the affairs of a racketeering enterprise and related charges including murder, attempted murder, assault, weapons charges and obstruction of justice.
Thirteen other defendants were previously sentenced to prison after pleading guilty to the RICO conspiracy. Walter Hernandez was sentenced on March 31, 2008, to 324 months in prison. On Dec. 3 and Dec. 7, 2007, respectively, Henry Garballo-Vasquez and Jose Alfaro were sentenced to 240 months in prison. On Nov. 20, 2007, Geovanni Pena received a sentence of 235 months in prison. On Sept. 8, 2008, Ericka Cortez received a sentence of 46 months in prison. On Sept. 16, 2008, Escolastico Serrano received a sentence of 45 years in prison. On Sept. 25, 2008, Ronald Fuentes received a life prison sentence. On Oct. 3, 2008, Ernesto Mendez-Tovar received a sentence of 13 years in prison. On Oct. 6, 2008, Eliseo Iglesias received a sentence of 210 months in prison. On Oct. 7, 2008, David Alexander Gonzalez received a sentence of 235 months in prison. On Nov. 10, 2008, Oscar Serrano received a sentence of life plus 20 years in prison, to be served consecutively. On Nov. 14, 2008, Omar Hirbin Gomez was sentenced to 14 years in prison. And on Nov. 19, 2008, Francisco Dago Mendez was sentenced to 14 years in prison.
According to the indictment, the MS-13 gang is a violent international criminal organization composed primarily of immigrants or descendants of immigrants from El Salvador. The purpose of the racketeering enterprise was to preserve and protect the power, territory and profits of the MS-13 enterprise through violent assault, murder, threats of violence and intimidation.
The case was prosecuted by Assistant U.S. Attorney Jimmie Lynn Ramsaur of the Middle District of Tennessee and Trial Attorney John Han from the Criminal Division’s Gang Unit.
The case was investigated by the Criminal Division’s Gang Unit; the U.S. Attorney’s Office in the Middle District of Tennessee; the Nashville Metropolitan Police Department’s Gang Suppression Unit; the Bureau of Alcohol, Tobacco, Firearms and Explosives; the Department of Homeland Security’s Immigration and Customs Enforcement; and the Davidson County District Attorney General’s Office.
Former State Department Employee Sentenced for Illegally Accessing Confidential Passport FilesRead the Press Release
WASHINGTON – A former State Department employee was sentenced today to 12 months of probation and ordered to perform 100 hours of community service for illegally accessing more than 150 confidential passport application files, Acting Assistant Attorney General Rita M. Glavin of the Criminal Division announced. Dwayne F. Cross, 41, of Upper Marlboro, Md., was sentenced by U.S. Magistrate Judge John M. Facciola in Washington, D.C. On Jan. 14, 2009, Cross pleaded guilty to a one-count criminal information charging him with unauthorized computer access.
According to court documents, from August 2001 through February 2008, Cross served as an administrative assistant in the Bureau of Consular Affairs, Overseas Citizens Services, Children’s Issues for the State Department. From March 2008 through October 2008, Cross returned to the State Department as a contract employee working as a contract specialist for the acquisitions office. According to information contained in plea documents, Cross admitted he had access to official State Department computer databases in the regular course of his employment, including the Passport Information Electronic Records System (PIERS), which contains, among other data, all imaged passport applications dating back to 1994. The imaged passport applications on PIERS contain, among other things, a photograph of the passport applicant as well as certain personal information including the applicant’s full name, date and place of birth, current address, telephone numbers, parent information, spouse’s name and emergency contact information. These confidential files are protected by the Privacy Act of 1974, and access by State Department employees is strictly limited to official government duties.
In pleading guilty, Cross admitted that between January 2002 and August 2007, he logged onto the PIERS database and viewed the passport applications of more than 150 celebrities, actors, musicians, comedians, models, politicians, athletes, members of the media, family members, friends, associates and other individuals. Cross admitted that he had no official government reason to access and view these passport applications, but that his sole purpose in accessing and viewing these passport applications was idle curiosity.
Cross is one of three former State Department employees to plead guilty in this continuing investigation. On Sept. 22, 2008, Lawrence C. Yontz, a former foreign service officer and intelligence analyst pleaded guilty to unlawfully accessing hundreds of confidential passport files. Yontz was sentenced on Dec. 19, 2008, to 12 months of probation and ordered to perform 50 hours of community service. On Jan. 27, 2009, Gerald R. Leuders, a former foreign service officer, Office of Consular Affairs watch officer and recruitment coordinator pleaded guilty to unlawfully accessing more than 50 confidential passport files. Leuders’ sentencing has not yet been scheduled.
These cases are being prosecuted by Trial Attorney Armando O. Bonilla of the Criminal Division’s Public Integrity Section, headed by Section Chief William M. Welch II. These cases are being investigated by the State Department Office of Inspector General.
Federal Judge Shuts Down Two Dallas Tax PreparersRead the Press Release
WASHINGTON – A federal court has shut down two Dallas tax preparers during the height of tax-filing season, the Justice Department announced today. Chief Judge Sidney Fitzwater of the U.S. District Court for the Northern District of Texas signed a temporary restraining order barring Ethel Washington from preparing any tax returns. The court found that Washington continually and repeatedly prepared federal tax returns with false or inflated Schedule C business losses, even after the Internal Revenue Service (IRS) notified her that it was investigating her return preparation. The court noted that Washington has prepared returns with false or inflated business losses since 2004, and has already prepared 120 returns with claimed business losses during this tax-filing season, some of which were false or inflated. Washington operates Washington Income Tax Service in Dallas.
The court has also permanently barred Washington’s former employer, Tina Preston, and her firm, The Preston Group & Associates Inc., from preparing federal tax returns. Preston consented to the civil injunction order. The court required Preston to provide her customer list to the Justice Department and to post a copy of the court order on her website.
According to the government complaint, filed in the case last month, Preston Tax Services prepared federal income tax returns for thousands of individual customers. Tina Preston allegedly taught employees, including Ethel Washington, how to list phony businesses on customers’ returns in order to report false business losses to offset customers’ wage income. The complaint further alleged that the defendants sometimes used phony businesses to increase customers’ income in order to claim improper earned income tax credits, a benefit that is available under some circumstances to working people in certain income ranges. According to the complaint, the tax losses from the defendants’ misconduct could be as much as $60 million. The case against several other defendants remains pending.
"The court’s swift action shows that tax preparers can face serious consequences for misconduct," said John A. DiCicco, Acting Assistant Attorney General for the Justice Department’s Tax Division. "The IRS and Justice Department are committed to putting fraudulent preparers out of business."
DiCicco thanked Justice Department trial attorney Michael Pahl, who handled the case, and Glenda Dziema, a revenue agent with the IRS’s Small Business/Self Employed Division, who handled the investigation.
In the past decade the Justice Department has obtained injunctions against more than 380 tax preparers and tax-fraud promoters. Information about these cases is available on the Justice Department Web site.
Justice Department Files Lawsuit Against Symphony Diagnostic Services Inc., to Enforce the Employment Rights of N.Y. Army National GuardsmanRead the Press Release
WASHINGTON — The Department of Justice today filed a lawsuit in U.S. District Court in Philadelphia on behalf of Frantz Julien, a New York Army National Guard member, against the Symphony Diagnostic Services Inc., doing business as MobilexUSA (Mobilex), alleging violations of the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA).
Subject to certain limitations, USERRA requires that individuals who leave their jobs to serve in the U.S. military be promptly reemployed by their civilian employers in the same positions, or in comparable positions, as the positions that they would have held had they not left to serve in the military. USERRA also requires that civilian employers reemploy returning servicemembers in positions of like pay, status and benefits to the positions the servicemembers would have had if they had been continuously employed by their civilian employers.
The Justice Department’s complaint alleges that Julien, a staff mobile radiologic technologist for Mobilex, was called to active duty in March 2003 and deployed to aid soldiers serving in Operation Enduring Freedom. Upon his completion of active duty in March 2007, Julien began contacting Mobilex to seek reemployment. The complaint alleges Mobilex did not promptly reemploy Julien and only did so in April 2008, after he filed a complaint with the Department of Labor’s Veterans’ Employment and Training Service (VETS). VETS investigated the matter, determined that Julien’s claim had merit and, upon completion of conciliation efforts, referred the matter to the Justice Department.
"The Department 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. "Cases like this, on behalf of a servicemember who was not promptly reemployed following military service, further reinforce that commitment."
The Civil Rights Division of the Department of Justice has given a high priority to the enforcement of servicemembers’ rights under USERRA. Additional information about USERRA can be found on the Justice Department Web site: www.servicemembers.gov and www.usdoj.gov/crt/emp.
Elena Kagan Sworn in as Solicitor GeneralRead the Press Release
WASHINGTON – Elena Kagan was sworn in as Solicitor General of the United States today by Chief Justice John G. Roberts Jr., in a ceremony held in the Chief Justice’s chambers at the U.S. Supreme Court.
"Elena Kagan’s intelligence, experience and commitment to the rule of law will make her an exceptional Solicitor General," U.S. Attorney General Eric Holder said. "With the addition of Elena Kagan, we are building a strong, effective leadership team to enforce our nation’s laws."
Prior to her confirmation as Solicitor General, Elena Kagan served as Dean of Harvard Law School. She is a graduate of Princeton University (A.B. 1981), Worcester College, Oxford (M. Phil. 1983) and Harvard Law School (J.D. 1986). Kagan clerked for Judge Abner Mikva of the U.S. Court of Appeals for the D.C. Circuit and for Justice Thurgood Marshall of the Supreme Court of the United States. Kagan worked in private practice for Williams & Connolly from 1989 to 1991 and served in President Clinton’s White House as Associate Counsel to the President and as Deputy Assistant to the President for Domestic Policy and Deputy Director of the Domestic Policy Council from 1995 to 1999.
Kagan is the 45th person and first woman to serve as Solicitor General of the United States.
Wisconsin Man Who Participated in 1943 Massacre of 8,000 Jews Is Deported to AustriaRead the Press Release
WASHINGTON – A former Nazi concentration camp guard who settled in Racine, Wis., after World War II and acquired U.S. citizenship, has been removed to Austria due to his participation in Nazi-sponsored acts of persecution during World War II, Acting Assistant Attorney General Rita M. Glavin of the Criminal Division and U.S. Immigration and Customs Enforcement (ICE) Acting Assistant Secretary John P. Torres announced today.
Josias Kumpf, 83, served as an armed SS Death’s Head guard at the Nazi-run Sachsenhausen Concentration Camp in Germany and at the Trawniki Labor Camp in German-occupied Poland. Kumpf also served at slave labor sites in Nazi-occupied France where prisoners under his watch built launching platforms for Germany’s V-1 and V-2 missile attacks on England. During his service at Trawniki, he participated in a mass shooting in which 8,000 men, women and children were murdered in a single day, on Nov. 3, 1943.
"Josias Kumpf, by his own admission, stood guard with orders to shoot any surviving prisoners who attempted to escape an SS massacre that left thousands of Jews dead," said Acting Assistant Attorney General Rita M. Glavin. "His court-ordered removal from the United States to Austria is another milestone in the government’s long-running effort to ensure that individuals who participated in crimes against humanity do not find sanctuary in this country."
Kumpf, who was born in Serbia, joined the SS Death’s Head guard forces at the Sachsenhausen Camp in October 1942 and served there for one year before transferring to the Trawniki Labor Camp in German-occupied Poland. During the Justice Department’s investigation of his activities, Kumpf admitted that he participated in a murderous November 1943 Nazi operation. Bearing the code name "Aktion Erntefest" (Operation Harvest Festival), the operation resulted in the murder of approximately 42,000 Jewish men, women and children at three camps in German-occupied eastern Poland in only two days. Kumpf helped guard approximately 8,000 Jewish prisoners – including approximately 400 children – who were shot and killed in pits at Trawniki. According to Kumpf, his assignment was to watch for victims who were still "halfway alive" or "convulsing" and prevent their escape. If any of the prisoners attempted to escape, he stated his job was to "shoot them to kill."
Kumpf immigrated to the United States from Austria in 1956 and became a U.S. citizen in 1964. In 2003, the Criminal Division’s Office of Special Investigations (OSI) and the U.S. Attorney’s Office for the Eastern District of Wisconsin brought suit to denaturalize Kumpf. The U.S. District Court for the Eastern District of Wisconsin revoked his citizenship in May 2005. OSI investigated that case, and litigated the subsequent removal action. ICE carried out the physical removal of Kumpf to Austria.
OSI Director Eli M. Rosenbaum stated, "The removal of Josias Kumpf to Austria has achieved a significant measure of justice on behalf of the victims of Nazi inhumanity and it reflects the unswerving commitment of the U.S. government to continuing that quest for justice."
ICE Acting Assistant Secretary John P. Torres stated, "Today’s removal brings justice to the families who were victimized by the reprehensible acts that this man committed. The U.S. government will work tirelessly to identify and arrest those who have committed crimes against humanity so that they may not seek to gain safe haven in the United States."
Kumpf’s removal to Austria was a result of combined efforts by the Departments of Justice, State and Homeland Security on various law enforcement and diplomatic fronts. Kumpf’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.
Third Defendant Pleads Guilty to Money Laundering Scheme Involving Bribes for Contracts at Kuwait Army BaseRead the Press Release
WASHINGTON – The sister of a U.S. Army officer has pleaded guilty for her participation in a money-laundering scheme related to bribes paid for contracts awarded in support of the Iraq war, Acting Assistant Attorney General Rita M. Glavin of the Criminal Division and Acting Assistant Attorney General Scott D. Hammond of the Antitrust Division announced today.
Carolyn Blake, of Sunnyvale, Texas, pleaded guilty to one count of money laundering conspiracy after accepting more than $3 million in bribe proceeds on behalf of her brother, Major John Cockerham. Blake admitted she expected to keep 10 percent of the money she collected. Blake pleaded guilty on March 18, 2009, before U.S. Magistrate Judge John W. Primomo in the Western District of Texas, San Antonio Division. At sentencing, Blake faces up to 20 years in prison and a fine of up to $500,000 or two times the value of the laundered funds. A sentencing date has not yet been set by the court.
John Cockerham pleaded guilty in January 2008 to participating in a complex bribery and money laundering scheme while working as an Army contracting officer in Kuwait. According to court documents, he was responsible for awarding contracts for services to be delivered to troops in Iraq, including bottled water. In return for awarding illegal contracts, Cockerham admitted to receiving more than $9 million in bribe proceeds. Once Cockerham agreed to take money in exchange for awarding contracts, he admitted he directed the contractors to pay Blake, his wife Melissa Cockerham, and others in order to conceal the receipt of bribe payments. Melissa Cockerham pleaded guilty in January 2008 to accepting more than $1 million on John Cockerham’s behalf, and admitted that she stored the cash in safe deposit boxes at banks in Kuwait and Dubai.
"By accepting bribe proceeds, Carolyn Blake aided a scheme that steered contracts to those willing to make illegal payments for contracts," said Acting Assistant Attorney General Rita M. Glavin. "The Department of Justice is committed to protecting the integrity of contracts involving U.S. funds and supplies for men and women in uniform"
"The Antitrust Division is committed to rooting out corruption that threatens the competitive bidding process, particularly where public funds are involved," said Scott D. Hammond, Acting Assistant Attorney General in charge of the Department’s Antitrust Division. "Those who scheme to line their pockets with kickbacks made at the expense of U.S. taxpayer dollars will be vigorously prosecuted."
"Today’s plea agreement clearly demonstrates that the Special Agents from my command, along with our law enforcement and Department of Justice partners, will follow every lead and turn over every stone to bring those who commit crimes against the Army to justice," said Brigadier General Rodney Johnson, Commanding General of the U.S. Army Criminal Investigation Command. "We’ve had great success in investigating these cases and will continue to pursue those who choose to defraud the Army at such a critical time in our nation’s history."
"The public deserves assurances that tax dollars will be spent in a scrupulous manner," said Sharon Woods, Director, Defense Criminal Investigative Service. "When government representatives place personal gain above taxpayers’ interests, the legitimacy of public institutions is undermined. Corruption of the nature uncovered throughout the course of this investigation results in a pervasive atmosphere of distrust which causes Americans to question the integrity of all government employees and institutions. The Defense Criminal Investigative Service remains committed to working with law enforcement partners and the Department of Justice to ensure conspirators who willingly assist individuals who betray the public trust are held firmly accountable."
"This latest guilty plea by Carolyn Blake, a co-conspirator in a large contract fraud scheme, evidences SIGIR’s continuing commitment to root out corruption and enforce accountability within the Iraq program," said Stuart W. Bowen, Jr. Special Inspector General for Iraq Reconstruction (SIGIR). "In concert with our partner law enforcement agencies, SIGIR is pursuing cases of alleged criminal wrongdoing in Iraq, ranging from kickbacks and bribery to theft and double billing. With the support of Department of Justice prosecutors, we expect significant progress on these cases."
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 National Procurement Fraud Task force is currently chaired by Acting Assistant Attorney General Rita M. Glavin for the Criminal Division.
The case is being prosecuted by Trial Attorney Richard B. Evans of the Criminal Division’s Public Integrity Section, and Trial Attorneys Mark W. Pletcher and Emily W. Allen of the National Criminal Enforcement Section of the Antitrust Division. These cases are being investigated by the Army Criminal Investigations Division, the Defense Criminal Investigative Service, the FBI, the IRS, SIGIR, and U.S. Immigration and Customs Enforcement at the Department of Homeland Security in support of the Justice Department’s National Procurement Fraud Task Force and the International Contract Corruption Initiative.
Plea Agreement
Attorney General Issues New FOIA Guidelines to Favor Disclosure and TransparencyRead the Press Release
WASHINGTON – Attorney General Eric Holder issued comprehensive new Freedom of Information Act (FOIA) guidelines today that direct all executive branch departments and agencies to apply a presumption of openness when administering the FOIA. The new guidelines, announced in a memo to heads of executive departments and agencies, build on the principles announced by President Obama on his first full day in office when he issued a presidential memorandum on the FOIA that called on agencies to "usher in a new era of open government." At that time, President Obama also instructed Attorney General Holder to issue new FOIA guidelines that reaffirm the government’s commitment to accountability and transparency. The memo rescinds the guidelines issued by the previous administration.
"By restoring the presumption of disclosure that is at the heart of the Freedom of Information Act, we are making a critical change that will restore the public’s ability to access information in a timely manner," said Attorney General Holder. "The American people have the right to information about their government’s activities, and these new guidelines will ensure they are able to obtain that information under principles of openness and transparency."
The new FOIA guidelines address both application of the presumption of disclosure and the effective administration of the FOIA across the government. As to the presumption of disclosure, the Attorney General directs agencies not to withhold records simply because they can technically do so. In his memo, the Attorney General encourages agencies to make discretionary disclosures of records and to release records in part whenever they cannot be released in full.
The Attorney General also establishes a new standard for the defense of agency decisions to withhold records in response to a FOIA request. Now, the Department will defend a denial only if the agency reasonably foresees that disclosure would harm an interest protected by one of the statutory exemptions, or disclosure is prohibited by law. Under the previous defensibility standard of the rules rescinded today, the Department had said it would defend a denial if the agency had a "sound legal basis" for its decision to withhold.
In addition to establishing criteria governing the presumption of disclosure, the Attorney General’s FOIA guidelines emphasize that agencies must be sure to have in place effective systems for responding to requests. In the memo, the Attorney General calls on each agency to be fully accountable for its administration of the FOIA.
The Attorney General’s memo also emphasizes that FOIA is the responsibility of everyone in each agency, and that in order to improve FOIA performance, agencies must address the key roles played by a broad range of personnel who work with each agency’s FOIA professionals. The memo highlights the key role played by agency Chief FOIA Officers who will now be reporting each year to the Department of Justice on their progress in improving FOIA administration. And, the Attorney General also directs FOIA professionals to work cooperatively with FOIA requesters and to anticipate interest in records before requests are made and to make requested records available promptly.
The Office of Information Policy will conduct training and provide guidance on the new FOIA guidelines to executive branch departments and agencies, as well as to interested groups, in order to maintain a comprehensive approach to greater government transparency.
Today’s memo rescinds the guidelines issued on Oct. 12, 2001, by former Attorney General John Ashcroft.
U.S. Sues Union Pacific R.R. for $37 Million for Allegedly Failing to Prevent Use of Rail Cars to Smuggle Narcotics Across BorderRead the Press Release
WASHINGTON – The government has filed two lawsuits against the Union Pacific Railroad Company for allegedly failing to prevent the use of its rail cars to smuggle large quantities of narcotics into the United States, the Justice Department announced today. The complaints, filed in San Diego and Houston, seek more than $37 million in monetary penalties. The government alleges the rail cars were brought across the border at the ports of entry at Calexico, Calif., and Brownsville, Texas.
According to the complaints, Union Pacific Railroad, the largest provider of rail transportation services in North America, has substantial Mexico rail operations, serving border gateways in California, Arizona and Texas. It is alleged in the complaints that Union Pacific has a substantial ownership-interest in the privatized Mexican railroad company Ferrocarril Mexicano (FM). Union Pacific also partners with FM to offer Union Pacific’s customers the ability to move merchandise north- and south-bound between Mexico and the United States.
In accordance with Title 19, United States Code, Section 1584, the owner or person in charge of a vehicle bound to the United States is required to submit to Department of Homeland Security, Customs and Border Protection (CBP), a manifest that accurately identifies all merchandise on board the vehicle. A violation of this section mandates the imposition of civil monetary penalties.
"It is imperative for transportation providers to be vigilant in determining the nature of cargo they bring into the United States from other countries," said Michael F. Hertz, Acting Assistant Attorney General for the Justice Department’s Civil Division. "These laws were established to protect the American people."
The complaint, filed in the Southern District of California, alleges that on 37 separate occasions, from November 2001 to October 2006, after Union Pacific submitted its manifests, CBP officials found a total of over 4,000 pounds of marijuana on Union Pacific rail cars north-bound from Mexico for travel throughout the United States. According to the complaint, CBP imposed mandatory monetary penalties of $33,595,112 for Union Pacific’s violations but to date, Union Pacific has failed and refused to pay the civil penalties.
The government’s complaint filed in the Southern District of Texas alleges that on June 16, 2003, Union Pacific submitted a manifest to CBP for entry at the Port of Entry at Brownsville, Texas. According to the government complaint, the railroad manifest indicated that the rail cars were empty. However, the suit states that CBP officials, during a routine inspection, found a total of 99 packages containing 117 kilograms of cocaine within a false wall on the bottom side of the rail car. The suit, filed in the Southern District of Texas, seeks $4,128,000.
"Railroad companies and other freight carriers must take seriously their obligations under the law to take appropriate action to prevent the use of their vehicles to smuggle narcotics and other contraband into the United States," said Karen P. Hewitt, U.S. Attorney for the Southern District of California. "This civil complaint marks an important step toward addressing the repeated failure of the largest railroad company in North America to prevent rail cars bound for travel throughout the United States from being used to smuggle significant amounts of narcotics."
"Along with the profits of doing an international transportation business comes the legal obligation to ensure contraband is not also brought into our country," said Tim Johnson, Acting U.S. Attorney for the Southern District of Texas. "The consequences of failing to meet that obligation are what this suit is all about."
"Securing the nation’s rail system against the threat of cross border smuggling requires the compliance and cooperation of the rail industry," said Jayson P. Ahern, Acting Commissioner of U.S. Customs and Border Protection, Department of Homeland Security. "Failure to comply with reasonable security measures leads to vulnerabilities that are simply unacceptable when considering the consequences of illegal cross border activity."
The case is being handled in San Diego by Assistant U.S. Attorneys Joseph P. Price, Jr., and Joseph J. Purcell; in Houston by Assistant U.S. Attorney Nancy L. Masso; in Washington by Civil Division Trial Attorneys, David S. Silverbrand and Lauren A. Weeman; and with the assistance of Shelby L. Stuntz and Julie Koller, Attorneys, Department of Homeland Security, Customs and Border Protection.
Justice Department Settles Sexual Harassment Lawsuit Against Muskegon County, MichiganRead the Press Release
WASHINGTON - The Department of Justice announced that it has entered into a consent decree today with Muskegon County, Mich., that, if approved by the court, will resolve the Department’s lawsuit against the county alleging that a former employee was subjected to sexual harassment that caused a hostile work environment, in violation of Title VII of the Civil Rights Act of 1964. Title VII prohibits discrimination in employment on the basis of race, color, sex (including sexual harassment), national origin or religion.
The complaint, filed in December 2008 in U.S. District Court for the Western District of Michigan, alleges that Muskegon County violated Title VII by failing to take adequate remedial measures to remedy ongoing sexually harassing behavior perpetrated by the former employee’s coworker. According to the terms of the consent decree, Muskegon County will pay $120,000 in damages to the former female employee on whose behalf the United States filed the lawsuit. In addition, Muskegon County will modify its policies and procedures to provide clearer guidance to supervisors and employees regarding the handling and reporting of sexual harassment. Muskegon County also will provide equal employment opportunity training to all supervisory employees within the county’s circuit and district courts, where the conduct outlined in the underlying facts of the lawsuit took place. Muskegon County has advised the Justice Department that it has already begun implementing some of these corrective measures.
"The Department of Justice commends Muskegon County for working cooperatively to resolve this case without protracted litigation, and for taking positive steps to provide a workplace free of harassment for its employees," said Loretta King, Acting Assistant Attorney General for the Civil Rights Division.
More information about Title VII and other federal employment laws is available on the Department of Justice Web site at http://www.usdoj.gov/crt/emp/index.html.
Former Memphis Police Officers Sentenced for Conspiracy to Violate Civil RightsRead the Press Release
WASHINGTON — Two former Memphis police officers were sentenced today in U.S. District Court in Memphis for their roles in a conspiracy to rob drug dealers, the Department of Justice announced.
Former Memphis police officer Antoine Owens, who in August 2007 pleaded guilty to one count of conspiracy to violate civil rights, was sentenced to 63 months in prison.
Alexander Johnson, a former Memphis police officer who pleaded guilty to one count of conspiracy to violate civil rights in April 2007, received a sentence of 30 months in prison and two years of supervised released.
Laterrica Woods, a civilian co-conspirator who pleaded guilty to one count of conspiracy to violate civil rights in September 2007, is scheduled to be sentenced on April 22, 2009.
Another former Memphis police officer, Harold McCall, is scheduled to be sentenced on March 23, 2009, after pleading guilty to one count of conspiracy to violate civil rights.
All four men admitted to conspiring with other former Memphis police officers, including Arthur Sease, who was tried and convicted in January 2009 of 44 counts including conspiracy to violate civil rights, conspiracy to distribute drugs, robbery, civil rights violations, drug distribution and firearms charges. Sease is scheduled to be sentenced on May 14, 2009.
Sease and his co-conspirators used their police authority to stop and detain drug dealers, often after Sease arranged a drug deal to lure a dealer to a particular location. They would then steal drugs and money from the dealers, and Sease would resell the stolen drugs. At Sease’s trial, the government introduced proof of 16 separate robberies, as well as one attempted robbery.
"Police 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 that authority face serious consequences. The Civil Rights Division is committed to prosecuting all cases of official misconduct and to bringing these individuals to justice."
Assistant U.S. Attorney Steve Parker of the Western District of Tennessee and Trial Attorney Jonathan Skrmetti from the Civil Rights Division prosecuted the case.
The Civil Rights Division is committed to the vigorous enforcement of every federal criminal civil rights statute, such as those laws that prohibit unreasonable search and seizure, deprivation of property without due process of law, or other acts of misconduct by law enforcement and other government officials.
South Florida Stock Trader Pleads Guilty to Market Manipulation SchemeRead the Press Release
WASHINGTON – A stock trader from Jupiter, Fla., pleaded guilty today to engaging in a market manipulation scheme involving several publicly traded companies, Acting Assistant Attorney General Rita M. Glavin of the Criminal Division announced.
Earlier today, Paul M. Gozzo, 33, pleaded guilty before U.S. District Judge Donald L. Graham in Miami to one count of conspiracy to commit securities fraud and one count of securities fraud. In his plea, Gozzo admitted to engaging in a market manipulation scheme with two co-conspirators for the purpose of artificially inflating the prices of several publicly traded stocks. Gozzo also admitted that he and his co-conspirators manipulated the stock price of several stocks by, among other things, creating the false appearance that there was a greater investor interest in the stocks than actually existed and by creating the false appearance that there was greater liquidity in the stocks than actually existed. In return for his assistance in manipulating the stock prices of these companies, Gozzo admitted that he received approximately $540,000.
According to the information contained in plea documents, Gozzo conspired with a purported investment banker, who owned large amounts of stock in several public companies, and the investment banker’s son to artificially increase the stock price of those companies. They did so, according to court documents, by creating the false appearance that there was a greater investor interest in the stock prices they were manipulating by providing support bids for shares of those companies and by engaging in coordinated trades with each other and others for the purpose of keeping the stock price artificially inflated and further inflating the stock price. This created the impression that there was a greater investor interest in the stock than truly existed, which allowed Gozzo and his co-conspirators to sell that stock at an artificially high price. Gozzo admitted that he and his co-coconspirators also bought and sold stock through numerous broker-dealers to make it appear that there were several investors trading in the stocks they were manipulating, when in fact there were not additional investors. In return for Gozzo’s assistance in manipulating the stock prices of these companies, the investment banker compensated Gozzo in the form of cash retainer payments and both free-trading and restricted stock.
Gozzo faces a maximum sentence of five years in prison on the conspiracy charge and five years in prison on the securities fraud charge. Sentencing is scheduled for June 5, 2009.
The case is being prosecuted by Assistant Chief Hank Bond Walther of the Criminal Division’s Fraud Section and is being investigated by the FBI’s Washington Field Office. Significant assistance was provided by the U.S. Securities and Exchange Commission.
Information
Justice Department Settles Allegations of Disability Discrimination Against Town of St. John, IndianaRead the Press Release
WASHINGTON – The Justice Department today announced a settlement resolving allegations that the town of St. John, Ind., violated the Fair Housing Act when it denied a petition for a zoning variance based on the disability of a prospective resident.
In a lawsuit filed in September 2007, the U.S. government charged that the town of St. John intentionally discriminated against persons with disabilities when it refused to provide a St. John resident a variance to allow one unrelated individual with multiple sclerosis to live with the resident in his home. The complaint also alleged that the requested variance was reasonable and necessary to afford prospective residents with disabilities an equal opportunity to use and enjoy a dwelling in a residential neighborhood in St. John. Under the town’s zoning regulations at that time, unrelated persons could not live together in a dwelling in a single-family district. After the town denied the variance, the resident filed a complaint with the U.S. Department of Housing and Urban Development (HUD), which referred the matter to the Department of Justice.
"Local governments have the right to enforce their zoning laws, but they cannot allow their zoning decisions to be influenced by discriminatory bias," said Loretta King, Acting Assistant Attorney General for the Civil Rights Division. "The Department will continue to vigorously enforce the rights of persons with disabilities to live in homes of their choice."
"The path to diverse, inclusive communities begins with zoning," said Bryan Greene, General Deputy Assistant Secretary for Fair Housing and Equal Opportunity. "HUD works in partnership with the Department of Justice to respond to local government decisions that can sometimes exclude whole classes of persons from communities."
The settlement, which must still be approved by the court, requires the town to grant the requested variance, provide training on fair housing laws to town officials involved in making zoning and land-use decisions and provide periodic reports to the Justice Department. The town will also pay a $10,000 civil penalty to the United States.
The Fair Housing Act prohibits discrimination in housing based on race, color, religion, national origin, sex, disability and familial status. More information about the Civil Rights Division and the laws it enforces is available at http://www.usdoj.gov/crt. Individuals who believe that they may have been victims of housing discrimination can call the Housing Discrimination Tip Line (1-800-896-7743), email the Justice Department at [email protected], or contact HUD at 1-800-669-9777.
Jury Convicts Two Doctors and Two Medical Assistants in $5.3 Million Medicare Fraud ScamRead the Press Release
WASHINGTON – A federal jury in Miami today convicted two physicians and two medical assistants in connection with a $5.3 million Medicare fraud scheme, Acting Assistant Attorney General Rita M. Glavin of the Criminal Division and U.S. Attorney R. Alexander Acosta of the Southern District of Florida announced.
After a two-week trial in federal court in Miami, a jury found David Rothman, M.D., 66; Keith Russell, M.D., 65; Eda Marietta Milanes, 43; and Jorge Luis Pacheco, 50; guilty on all charged counts, including conspiracy to commit health care fraud and multiple counts of health care fraud for submitting claims to Medicare for unnecessary medications.
According to evidence presented at trial, the defendants worked as doctors and medical assistants at two Miami clinics, Medcore Group LLC (Medcore) and M&P Group of South Florida Inc. (M&P Group), that purported to specialize in the treatment of human immunodeficiency virus (HIV). Evidence at trial established that Rothman was the medical director for both Medcore and M&P Group between May 2004 and January 2006. Russell took over as medical director at M&P Group after January 2006. Pacheco and Milanes worked as medical assistants for Russell at M&P Group.
One of the owners of the clinics, Tony Marrero, testified at trial that the clinics were established for the sole purpose of defrauding Medicare. Marrero testified that the scheme was to submit claims for medically unnecessary HIV infusion and injection treatments. Evidence at trial showed that Medcore and M&P Group billed Medicare for $5,300,186 and were paid $2,511,387 during two years of operations. Marrero testified that the unnecessary medicines were not administered to patients, and that the clinics were only operated to create the appearance of legitimacy. Marrero stated that he had an arrangement with a pharmaceutical wholesale company, Lifecare Medical, to buy invoices showing the purchase of large amounts of medications, when only minor amounts were actually bought. Marrero; his wife, Belkis Marrero; his brother-in-law, Orlando Pascual; the owner of Lifecare Medical, Harold Sio; a patient recruiter and clinic employee, Alberto R. Gonzalez; and a medical assistant at Medcore, Luz Borrego; each previously pleaded guilty in connection with this scheme.
Borrego testified that she manipulated the patients’ blood samples at Medcore to ensure that lab results would appear to support the Medicare claims. Borrego stated that she would not give the medications ordered by Rothman because she knew the medications could harm the patients.
Trial testimony established that every patient who went to Medcore and M&P Group was paid a cash kickback of up to $200 per visit. The scheme relied upon 20 patients during the two-year period at both clinics. Four patients testified that they took kickbacks and never received any medication at the clinics. One patient testified that he used his payments from the clinics to support his cocaine addiction. Another patient testified that he did not have HIV, even though the clinics’ documents showed he was being infused with medication to treat HIV.
Evidence introduced at trial documented that Rothman worked at other Miami-area infusion clinics, which billed Medicare for more than $60 million between 2004 and the end of 2005. Trial evidence also established that Russell worked at Tendercare Medical Center (Tendercare), another fraudulent infusion clinic, with Pacheco and Milanes at the same time as M&P Group. Further, two of the patients who testified at trial received kickbacks from both Tendercare and M&P Group.
According to evidence presented at trial, Milanes was paid extra by Marrero at M&P Group to manipulate blood samples to justify the false claims. Pacheco worked directly for Marrero to determine what drugs would be falsely billed to Medicare through M&P Group. Trial testimony established that Pacheco was a physician in Cuba prior to coming to the United States.
On March 14, 2009, while trial was ongoing, Pacheco attempted to flee the United States, according to evidence presented in court. He was apprehended heading south on Krome Avenue in Miami-Dade County with $12,600 in cash and a false Florida driver’s license in the name of Jose Luis Falcon. Evidence presented to the court proved that prior to being apprehended, Pacheco cut off his ankle monitor in violation of the terms of his pre-trial release. Documents seized from Pacheco at the time of his apprehension contained multiple contacts in the Dominican Republic. According to evidence presented at court, Pacheco stated to officers that he was "going fishing." Judge Ungaro revoked his bond and remanded him into custody for the remainder of the trial.
"The jury’s verdict shows that medical professionals, trusted to provide necessary care and medicine to their legitimate patients, can and will be held accountable when they defraud the Medicare program," said Acting Assistant Attorney General Rita M. Glavin of the Criminal Division. "The Department of Justice will continue our vigorous pursuit of those who steal from Medicare for their own personal benefit."
"The Medicare program relies on physicians to be the first line of defense against fraud," said Bernardo Rodriguez, Acting Special Agent-in-Charge of the Miami Office of Inspector General, Department of Health and Human Services. "As in this case, when doctors shirk that responsibility and steal from Medicare, we have to prosecute them to the fullest extent of the law."
This case was investigated by the FBI and the Department of Health and Human Services (HHS), Office of Inspector General, Office of Investigations. The Homestead, Fla., Police Department, along with the FBI and HHS, were critical in the apprehension of Pacheco during his attempted flight during trial.
Pacheco and Milanes were remanded into custody following the verdicts. Rothman and Russell were required to post bond and are under house arrest until sentencing. Rothman faces a maximum of 50 years in prison. Russell, Milanes and Pacheco each face a maximum of 30 years in prison. Sentencing for all defendants has been scheduled for June 26, 2009.
The case was prosecuted by Deputy Chief Kirk Ogrosky, Assistant Chief John S. (Jay) Darden and Trial Attorney Charles D. Reed of the Criminal Division’s Fraud Section, with the investigative assistance of HHS and the FBI. The case was brought as part of the Medicare Fraud Strike Force (MFSF), supervised by the Criminal Division’s Fraud Section and U.S. Attorney Acosta of the Southern District of Florida. Since the inception of MFSF operations, federal prosecutors have indicted 106 cases with 192 defendants in both Los Angeles and Miami. Collectively, these defendants fraudulently billed the Medicare program for more than half a billion dollars.