District Not Recorded
The source did not name an office we could identify. These records remain unassigned rather than guessed.
Former Accounting Firm Vice Chairman/Board Member Pleads Guilty to Tax Fraud Related to Tax SheltersRead the Press Release
WASHINGTON – Adrian Dicker, a United Kingdom chartered accountant and former vice chairman and board member at a major international accounting firm, pleaded guilty today to conspiring with certain tax shelter promoters to defraud the United States in connection with tax shelter transactions involving clients of the accounting firm and the law firm Jenkens & Gilchrist (J&G), the Justice Department and Internal Revenue Service (IRS) announced. In the hearing before U.S. Magistrate Judge Theodore H. Katz in the Southern District of New York, Dicker, who is a resident of Princeton Junction, N.J., also pleaded guilty to tax evasion in connection with a multi-million dollar tax shelter that Dicker helped sell to a client of the accounting firm.
According to the information and the guilty plea, between 1995 and 2000, Dicker was a partner in the New York office of the accounting firm (which he identified during his guilty plea as BDO Seidman) and which maintained offices in among other places, Chicago and Los Angeles. From early 1999 through October 2000, Dicker was on the firm’s Board of Directors, and through October 2003 he served as a retired partner director. From 1998 until 2000, Dicker was one of the leaders of the firm’s "Tax Solutions Group" (TSG), a group led by the firm’s chief executive officer, Dicker and another New York-based tax partner. The activities of the TSG were devoted to designing, marketing, and implementing high-fee tax strategies for wealthy clients, including tax shelter transactions.
According to the information and the guilty plea, Dicker and the other two TSG managers used a bonus structure that handsomely rewarded the accounting firm personnel involved in the design, marketing, and implementation of the TSG’s transactions, including: the individual who referred the client to TSG personnel; the TSG member who pitched and closed the sale; other TSG members; and TSG management. From July 1999, Dicker, the CEO, and the other TSG manager earned and shared equally 30% of the net profits of the TSG. Dicker earned approximately $6.7 million in net TSG profits, as well as salary and bonuses between 1998 and 2000. In addition, the CEO of the firm doled out additional bonuses from the profits earned as a result of the sale of the tax shelter products. Moreover, the firm made the sale of the tax shelter products a focal point of its aggressive "value added" product promotion activities, using a "Tax $ells" logo and other marketing hype to induce employees to generate additional tax shelter sales.
According to the information and the guilty plea, while serving as a manager of the TSG, Dicker, along with other TSG partners, engaged in the design, marketing, and implementation of two different tax shelter transactions with the Chicago office of the law firm of Jenkens & Gilchrist, as well as an international bank with its U.S. headquarters in New York. As a member of TSG and the accounting firm’s tax opinion committee – which reviewed the tax opinions issued in connection with tax shelter transactions sold by the accounting firm and J&G – Dicker knew that the tax shelter transactions he helped vet and sell would be respected and allowed by the IRS only if the client had a substantial non-tax business purpose for entering the transaction, and the client had a reasonable possibility of making a profit through the transaction. Dicker and his co-conspirators knew and understood that the clients entering into the tax shelter transactions being marketed and sold with J&G had neither a substantial non-tax business purpose nor a reasonable possibility of earning a profit, given the large amount of fees being charged by the accounting firm and J&G to enter the transaction. Those fees were set by the co-conspirators as a percentage of the tax loss being sought by the tax shelter clients. Dicker also knew that the clients who purchased the tax shelter had no non-tax business reasons for entering into the transactions and their pre-planned steps.
According to the information and the guilty plea, in order to make it appear that the tax shelter clients of Dicker, other TSG members, and J&G had the requisite business purpose and possibility of profit, Dicker and his co-conspirators reviewed and approved the use of a legal opinion letter issued by J&G that contained false and fraudulent representations purportedly made by the clients about their motivations for entering into the transactions. In addition, Dicker and his co-conspirators created and used, or approved of the creation and use of, other documents in the transactions that were false, fraudulent, and misleading in order to paint a picture for the IRS that was patently untrue – that is, that the clients had a legitimate non-tax business purpose for entering the transaction and executing the preplanned steps of the transaction. Dicker also admitted during his plea that TSG members created and placed into client files certain paperwork that falsely conveyed fabricated business purposes and rationales for clients entering into the shelters. The false paperwork was created to mislead and defraud the IRS.
Dicker and his co-conspirators caused the clients to file false and fraudulent tax returns reporting the tax benefits flowing from the shelter transactions. In total, the fraudulent tax shelters implemented by Dicker, the accounting firm, J&G, and the financial institution that assisted them, caused clients to report over $1 billion in false and fraudulent tax losses, resulting in the evasion of over $200 million.
Dicker admitted during the plea proceeding that he and other TSG members pitched tax shelter transactions to clients as a way for the client to eliminate the taxes they were facing from taxable events, such as the sale of businesses or stock. Dicker assisted in selling a particular client a tax shelter known as the "short option" transaction, for which the client was charged approximately $133,000 by the accounting firm and $201,000 by J&G in order to produce losses to offset the taxes due to the IRS on the $6.7 million the client received in connection with the sale of certain stock. The short option transaction of the client, however, had the reasonable possibility only to net a profit of $67,000 – the cost the client was required to pay to Bank A for the options transaction. Thus, there could be no profit to the client. The client ulitimately filed tax returns with the IRS reporting false and fraudulent losses purportedly generated from his short options shelter, thus evading a substantial amount of taxes that he would otherwise have had to pay.
According to the information and the guilty plea, the client ultimately filed tax returns with the IRS reporting false and fraudulent losses purportedly generated from his short options shelter, thus evading a substantial amount of taxes that he would otherwise have had to pay.
Dicker faces a maximum sentence of five years in prison on the conspiracy charge and five years in prison on the tax evasion charge. On each count, the maximum fine is the greatest of $250,000 or twice the gross gain or gross loss from the offense. Restitution to the IRS can be imposed on all the charges.
Co-conspirator Michael Kerekes, a principal of BDO Seidman and also a former member of BDO’s TSG and tax opinion committee, pleaded guilty on Feb. 13, 2009, to similar conspiracy and tax evasion charges.
Dicker is scheduled to be sentenced on Dec. 11, 2009, by U.S. District Judge Gerald E. Lynch.
John A. DiCicco, Acting Assistant Attorney General for the Justice Department’s Tax Division, commended the IRS agents who investigated the case, as well as Tax Division trial attorney Nanette L. Davis and Assistant U.S. Attorney Stanley Okula of the Southern District of New York, who are prosecuting the case.
U.S. Department of Justice Makes Available $1 Billion in Recovery Act Funds for COPS ProgramRead the Press Release
WASHINGTON – U.S. Attorney General Eric Holder announced today that the Department of Justice is now accepting applications for $1 billion in Recovery Act Funds for the Community Oriented Policing Services (COPS) Program. Approximately 5,500 law enforcement officer jobs will be created or saved in law enforcement agencies across the country through funding provided by the Department of Justice.
"This investment of Recovery Act funds will pump new resources into our communities through a program with a proven track record," said U.S. Attorney General Holder. "We will not just create and preserve jobs, but also increase community policing capacity and crime-prevention efforts."
Funds awarded to law enforcement agencies by the COPS Office provide 100 percent of entry-level salary and benefits for each officer for three years. All jurisdictions that receive funding must plan to retain COPS-funded officer positions for at least one year after the grant ends.
The COPS Office is a federal agency responsible for advancing community policing nationwide. Since 1995, COPS has awarded more than $10 billion to advance community policing, including grants awarded to more than 13,300 state, local and tribal law enforcement agencies to fund the hiring and redeployment of nearly 117,000 officers. In addition to funding law enforcement positions, the Office of Community Oriented Policing Services has been the catalyst for innovations in community policing, and the broad implementation of this effective law enforcement strategy. Currently, departments that employ community policing serve 87 percent of American communities.
The American Recovery and Reinvestment Act of 2009 (H.R.1) includes $4 billion in Department of Justice grant funding to enhance state, local, and tribal law enforcement efforts, including the hiring of new police officers, to combat violence against women, and to fight internet crimes against children. The Justice Department also recently announced the allocation of $2 billion in Recovery Act funding for state and local law enforcement and criminal justice assistance through the Edward Byrne Justice Assistance Grant (JAG) Program. Similar to the JAG awards, COPS Recovery Act funds can also be used to hire new officers or rehire recently laid off officers, fill unfunded vacancies and help prevent scheduled layoffs within law enforcement agencies.
Unlike JAG funds, COPS funds are allocated directly to the local level governments and law enforcement agencies and provide a three-year period of funding. COPS hiring grants will be awarded through a competitive application process that will take into account the impact of the current economic crisis on applicant agencies, as well as crime statistics and plans for initiating and advancing community policing. The procedure for allocating JAG grants is based on a formula of population and violent crime statistics, in combination with a minimum allocation to each state and territory.
Attorney General Holder's Remarks at the National League of Cities Conference.
Justice Department Seeks to Shut Down Florida Tax PreparerRead the Press Release
WASHINGTON – The United States has sued a Port Richey, Fla., tax preparer, Frank Lighty, and his tax-preparation firm – Lighty & Associates Inc. – seeking to bar them permanently from the tax preparation business, the Justice Department announced today. The civil injunction suit was filed in Tampa with the U.S. District Court for the Middle District of Florida.
According to the government complaint, Lighty prepares federal income tax returns for hundreds of individual customers. The complaint alleges that Lighty claims false or inflated deductions for medical expenses, charitable contributions and other items. In one example cited in the complaint, Lighty falsely claimed almost $13,000 in charitable contributions when receipts that his customers had given him showed charitable contributions of only $2,500. According to the complaint the tax loss from Lighty’s misconduct could be as much as $6 million.
The complaint also alleges that Lighty falsely represented to customers that he is a former IRS agent and has a Masters Degree in Tax Administration.
"Tax preparer fraud is a serious problem," 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. Taxpayers should choose their preparer carefully and review their return closely before signing, to ensure it is correct."
In the past decade, the Justice Department has obtained injunctions against more than 380 tax return preparers and tax-fraud promoters. Information about these cases is available on the Justice Department Web site.
Justice Department Files Lawsuit Against Indianapolis Law Firm<br /> to Enforce the Employment Rights of Indiana Army National GuardsmanRead the Press Release
WASHINGTON — The Department of Justice today filed a lawsuit in U.S. District Court in Indianapolis on behalf of Mathew B. Jeffries, an Indiana National Guard member, against the Indianapolis law firm of Mike Norris & Associates, alleging that the law firm refused to promptly reemploy Jeffries in violation 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 timely reemployed by their civilian employers in the same position, or in a comparable position to the position that they would have held had they not left to serve in the military.
In February 2003, Jeffries, a staff attorney with Mike Norris & Associates, was called to active duty and deployed to serve in Operation Enduring Freedom in Iraq. Upon his completion of active duty in April 2004, Jeffries contacted Mike Norris & Associates to seek reemployment. The firm refused to reemploy him, so Jeffries filed a complaint with the Department of Labor’s Veterans’ Employment and Training Service (VETS). VETS investigated the matter, determined that Jeffries’ claim had merit and, upon completion of conciliation efforts, referred the matter to the Department of Justice.
"The Uniformed Services Employment and Reemployment Rights Act protects men and women from being disadvantaged in their civilian careers because of their service in the armed forces," said Loretta King, Acting Assistant Attorney General for the Civil Rights Division. "The Civil Rights Division is committed to vigorously enforcing federal laws that protect the employment rights of men and women who are serving in the military."
The Civil Rights Division of the Department of Justice has given a high priority to the enforcement of service members’ rights under USERRA. Additional information about USERRA can be found on the Justice Department Web site: www.servicemembers.gov and www.usdoj.gov/crt/emp.
Justice Department Asks Court to Close Georgia Tax Preparation Firms<br /> Allegedly Involved in Fuel Credit Tax ScamRead the Press Release
WASHINGTON - The United States has asked a federal court in Savannah, Ga., to permanently bar Ophelia Kelley of Vidalia, Ga., from preparing federal income tax returns for others, the Justice Department announced today. According to the government complaint, Kelley operates two return preparation firms in Vidalia – Kelley Tax Service, and City and Country Girl Tax Service.
The civil injunction suit alleges that Kelley, through her businesses, has repeatedly and intentionally engaged in fraudulent conduct by claiming improper deductions and tax credits for customers. According to the complaint, Kelley allegedly claims bogus fuel tax credits for customers who are not entitled to the credit. The fuel credit is available only to taxpayers who operate farm equipment or off-highway business vehicles. It is not available for trucks driven on highways.
The complaint further alleges that Kelley fraudulently claims the credit for truck drivers, claiming absurdly large credits by falsely reporting purchases of huge quantities of fuel where, in most cases, the cost of the fuel purportedly purchased was greater than the customer’s annual income. Fuel credit scams were on last year’s IRS list of the Dirty Dozen Tax Scams. In the past few years the Justice Department has obtained injunctions shutting down many tax preparers who claim the phony credits on customers’ returns.
According to the complaint Kelley also fabricates false deductions for such things as medical expenses and charitable gifts. The complaint also says that Kelley failed to sign at least 100 tax returns she prepared for customers. Paid tax preparers are required by law to sign all returns they prepare.
In the past decade, the Justice Department’s Tax Division has obtained more than 380 injunctions against tax fraud promoters and dishonest tax return preparers. Information about these cases is available on the Justice Department’s Web site, as is information about the Justice Department’s Tax Division.
Iranian Man and His Company Charged in International Scheme to Supply Iran with Sensitive U.S. TechnologyRead the Press Release
WASHINGTON – An Iranian citizen and his Tehran business have been charged with purchasing helicopter engines and advanced aerial cameras for fighter bombers from U.S. firms and illegally exporting them to Iran using companies in Malaysia, Ireland and the Netherlands. 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 charges against Hossein Ali Khoshnevisrad, 55, and his Iranian company, Ariasa, AG (Ariasa), were announced today by Matthew G. Olsen, Acting Assistant Attorney General for National Security; Jeffrey A Taylor, U.S. Attorney for the District of Columbia; Kevin A. Delli-Colli, Acting Assistant Secretary for Export Enforcement, U.S. Department of Commerce; Joseph Persichini, Jr., Assistant Director in Charge, FBI Washington Field Office; Mark X. McGraw, Special Agent in Charge, Washington Field Office, U.S. Immigration and Customs Enforcement, Department of Homeland Security; and Special Agent in Charge Edward Bradley of the Defense Criminal Investigative Service Northeast Field Office.
Khoshnevisrad was arrested on Saturday, March 14, after he arrived at San Francisco International Airport on a flight from abroad. He made his initial appearance earlier today in federal court in San Francisco.
A criminal complaint filed under seal in federal court in the District of Columbia in August 2008 and unsealed today, charges the defendants each with two counts of unlawfully exporting U.S. goods to Iran and two counts of conspiracy to unlawfully export U.S. goods to Iran in violation of the International Emergency Economic Powers Act and the Iranian Transactions Regulations. If convicted, Khoshnevisrad faces a maximum sentence of 20 years in prison on each of the first three counts of the complaint and a maximum sentence of five years in prison on the fourth count of the complaint.
According to the affidavit in support of the complaint, from January 2007 through December 2007, Khoshnevisrad and Ariasa caused and instructed a trading company in Ireland to purchase several model 250 turbo-shaft helicopter engines from Rolls-Royce Corp. in Indiana. 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. In 2007, the Irish trading company purchased 17 of the model 250 helicopter engines from Rolls-Royce for $4.27 million, falsely stating that the helicopters would be used by the Irish trading company or by fake companies.
The affidavit alleges that these helicopter engines were then exported from the United States to a purported "book publisher" in Malaysia, at a Malaysian freight forwarding company address, and later shipped on 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.
In addition to the alleged illegal export of helicopter engines, the affidavit alleges that Khoshnevisrad and Ariasa also caused to be exported to Iran several aerial panorama cameras from the United States. These specific cameras were designed for the U.S. Air Force for use on bombers, fighters and surveillance aircraft, including the F-4E Phantom fighter bomber, which is currently used by the Iranian military.
According to the affidavit, in 2006, Khoshnevisrad instructed a Dutch aviation parts company to place an order for these cameras with a U.S. company located in Pennsylvania and to ship them to an address in Iran.
According to the affidavit, the Dutch company ordered the aerial panorama cameras from the Pennsylvania firm, falsely stating that the Netherlands would be the final destination for the cameras. In an email to the Dutch company, Khoshnevisrad provided the following instructions: "Regarding the end user as you know USA will not deliver to Iran in any case. You should give them an end user by yourself."
In August 2006, a representative of the Dutch company notified Khoshnevisrad that he had received the cameras from the United States and that the cameras would soon be shipped to Tehran aboard an Iran Air flight, according to the affidavit.
Despite these alleged transactions, neither Khoshnevisrad nor Ariasa has ever sought, obtained or possessed any authorization or license from the U.S. Department of Treasury to export any goods or technology to Iran, according to the affidavit.
This investigation was conducted by special agents from the Department of Commerce’s Bureau of Industry Security, Office of Export Enforcement; the Federal Bureau of Investigation; the Department of Homeland Security’s U.S. Immigration and Customs Enforcement; and the Defense Criminal Investigative Service. U.S. Customs and Border Protection provided assistance in the arrest.
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 Johnathan Poling and Ryan Fayhee of the Counterespionage Section of the Justice Department’s National Security Division. Local coordination is being provided by Assistant U.S. Attorney Candace Kelly of the U.S. Attorney’s Office for the Northern District of California.
The details contained in a criminal complaint are mere allegations. All defendants are presumed innocent unless and until proven guilty in a court of law.
General Maritime Management (Portugal) Fined $1 Million for Enviromental CrimesRead the Press Release
WASHINGTON— A federal judge in Corpus Christi, Texas, has sentenced General Maritime Management (Portugal), the operator of a fleet of tanker vessels, and two crewmembers of the motor tanker Genmar Defiance for making false statements to the U.S. Coast Guard and failing to maintain an accurate Oil Record Book designed to prevent pollution of the world’s oceans as required by United States and international law, the Justice Department announced.
The court sentenced General Maritime Management (Portugal) LDA, late Friday, to pay a $1 million fine. In addition, the company was sentenced to serve five years of probation. Special conditions of the probation require the company to rehire the whistleblowers if they reapply for employment; submit monthly reports, under oath, regarding compliance; and allow a court appointed official to perform three audits of each vessel and three audits of its shore side office during the probation period. Violations of the terms of probation could result in one or more of the company’s ships being banned from U.S. territorial waters during the term of the probation.
Chief Engineer Antonio Rodrigues was previously sentenced for the same violations on Feb. 10, 2009 to three months of confinement in a half-way house, a $500 fine, a special assessment of $200 and five years of probation. First Engineer Cavadas was likewise sentenced on Feb. 10, 2009 to six months of confinement in a half-way house, a $500 fine, a special assessment of $200 and five years of probation.
During the hearing, the court awarded $250,000 to the five whistleblowers to be divided on a proportional basis for their actions and cooperation.
The company and two crewmembers were found guilty on all counts by a jury on Nov. 25, 2008. The trial and sentencing were presided over by the Honorable Janis Graham Jack, U.S. District Judge for the Southern District of Texas.
Engine room operations on-board large oceangoing vessels such as the Genmar Defiance generate large amounts of waste oil. International and U.S. law prohibit the discharge of waste oil above 15 parts per million oil to water; which can be achieved by the proper operation of an oil-water separator. The law also requires that all of the oil transferred onto, off of, or between tanks within a ship be recorded in the Oil Record Book so all the oil on a ship can be accounted for when the ship is inspected by the U.S. Coast Guard and other port state control authorities around the world.
The criminal convictions were related to events occurring on board the Genmar Defiance during a voyage to Corpus Christi in November 2007. On Nov. 24, 2007, engine room crew members were directed by First Engineer Cavadas to assist in hooking-up a flexible hose between the ship’s bilge pump and the overboard discharge valve bypassing the vessel’s pollution prevention equipment—its oil-water separator—and allowed crewmembers to pump the contents of the bilge tank directly into the Straits of Florida and the Gulf of Mexico.
Further, on Nov. 26, 2007, one of the crew members working in the ship’s engine room was ordered by First Engineer Cavadas and Chief Engineer Rodrigues to assist in connecting a hose from the vessel’s fresh water supply to the oil content meter on the ships oil-water separator. The connection allowed the engineers to “trick” the oil content meter and prevent it from shutting a valve that would re-circulate oily water to the bilge tank where it would be treated through the oil-water separator before being discharged overboard. By tricking the oil content meter, the oily water was permitted to be discharged directly overboard in violation of international law. Two engine room crewmen secretly photographed the illegal connection and provided the photographs to the Coast Guard during a boarding of the vessel on Nov. 28, 2007 while the Genmar Defiance was docked at the Valero refinery.
“This significant criminal fine along with the maximum term of probation requiring audits and regular reporting sends a strong signal that companies will be punished severely, will be required to prove to the court that they have learned their lesson and taken actual steps to reform their corporate practices and are complying with the law,” said John C. Cruden, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. “Illegal pollution from ships is a continuing problem and the Justice Department will continue to work with the Coast Guard and the Environmental Protection Agency to prosecute those who violate our nation’s laws designed to protect the environment and candor with investigators.”
“The Coast Guard places a high priority on its stewardship of the marine environment,” said Captain John H. Korn, Chief of Staff of the Eighth Coast Guard District. “We appreciate the dedicated efforts of the Department of Justice; the successful investigation and prosecution of cases like the GenMar Defiance takes considerable coordination among interagency partners. Efforts such as this are key to protecting the environment for all.”
“The oceans must be protected and commercial vessels must operate safely and lawfully,” said Warren Amburn, Special Agent in Charge for EPA’s Criminal Investigation Division in Dallas. “Today's sentences send a clear message that those who violate the law and pollute the seas will be prosecuted.”
This case was investigated by the U.S. Coast Guard, and the Environmental Crimes Task Force, which includes the U.S. Environmental Protection Agency, the Texas Commission on Environmental Quality Investigations Division, and the Texas Parks and Wildlife Department. The case was prosecuted by the Justice Department’s Environmental Crimes Section.
U.S. Border Patrol Agent Indicted on Federal Civil Rights Charge for Assault in Federal Detention FacilityRead the Press Release
WASHINGTON – A U.S. Border Patrol agent has been indicted by a federal grand jury in Tucson, Ariz., on federal civil rights charges related to an alleged assault on a detainee at a federal detention facility, announced Acting Assistant Attorney General Loretta King of the Civil Rights Division and U.S. Attorney for the District of Arizona Diane J. Humetewa.
The two-count indictment, returned on March 11, 2009, alleges that on May 10, 2006, Eduardo Moreno violated the civil rights of a federal detainee by assaulting and causing bodily injury to the individual while Moreno was on duty at the U.S. Border Patrol processing facility in Nogales, Ariz. The indictment also alleges that Moreno made false entries in a U.S. Customs and Border Protection memorandum that described the incident.
If convicted, Moreno faces a maximum prison sentence of 15 years and a fine of $500,000. An indictment is merely an accusation and the defendant is presumed innocent unless proven guilty.
The FBI and U.S. Immigration and Customs Enforcement’s Office of Professional Responsibility are investigating this matter. The case is being jointly prosecuted by Assistant U.S. Attorney Sandra M. Hansen of the U.S. Attorney’s Office for the District of Arizona and Trial Attorney Edward Chung of the Civil Rights Division.
The Civil Rights Division is committed to the vigorous enforcement of every federal criminal civil rights statute, such as those laws that prohibit the willful use of excessive force or other acts of misconduct by law enforcement or other government officials.
Justice Department Sues West Memphis, Ark.Landlords for Sexual HarassmentRead the Press Release
WASHINGTON The Justice Department today filed a lawsuit against Bobby L. Hurt, the former property manager for numerous mobile homes in and around West Memphis, Ark., alleging a pattern or practice of sexual harassment. The lawsuit also names Bobby Hurt's wife, Sue Hurt, as a defendant.
The complaint, filed in U.S. District Court in the Eastern District of Arkansas, alleges that Bobby Hurt, while providing property management services, entered the dwellings of female tenants without permission or notice, touched female tenants in an unwelcome sexual manner, made verbal sexual advances, and threatened and took steps to evict female tenants when they refused or objected to his sexual advances. The complaint also alleges that, while engaging in this harassment, Bobby Hurt acted on behalf of Sue Hurt, his wife and the former owner of the mobile homes.
"A woman should not have to experience unwelcome verbal and physical sexual advances in her own home from her housing provider," said Loretta King, Acting Assistant Attorney General for the Civil Rights Division. "The Justice Department will vigorously prosecute any landlord who engages in sexual harassment in violation of the Fair Housing Act."
Today's lawsuit seeks monetary damages to compensate the victims, civil penalties and a court order barring future discrimination. The U.S. Attorney's Office for the Eastern District of Arkansas, in Little Rock, will work with the Justice Department's Civil Rights Division in litigating the lawsuit.
Fighting illegal housing discrimination is a top priority of the Justice Department. More information about the Civil Rights Division and the laws it enforces is available at http://www.usdoj.gov/crt. Individuals who have information related to this lawsuit should contact the Justice Department at 1-800-896-7743, mailbox 92. Individuals who believe that they may have been victims of housing discrimination unrelated to this lawsuit can call the Housing Discrimination Tip Line at 1-800-896-7743, mailbox 1, email the Justice Department at [email protected], or contact the U.S. Department of Housing and Urban Development at 1-800-669-9777.
The complaint is an allegation of unlawful conduct.
Justice Department Files Lawsuit Against Americraft Carton Inc., to Enforce the Employment Rights of Michigan Army National GuardsmanRead the Press Release
WASHINGTON - The Department of Justice announced today that it has filed a lawsuit on behalf of David D. Sweatt, a Michigan Army National Guard member currently serving in Iraq, against Americraft Carton Inc. (Americraft), alleging violations of the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA).
USERRA was enacted in 1994 to protect service members from being disadvantaged in their civilian careers due to serving in the uniformed services. Subject to certain limitations, USERRA requires that individuals who leave their jobs to serve in the U.S. armed forces be timely reemployed by their civilian employers in the same positions, or comparable positions, as the positions that they would have held if they had not left to serve in the military. USERRA also prohibits discrimination in employment based on an employee’s performance, application, or obligation to perform military service.
The complaint, filed in U.S. District Court in Grand Rapids, Mich., alleges that Americraft violated USERRA by discriminating against Sweatt, by failing or refusing to reemploy him in his previous position as a production worker when he returned from his National Guard duty, or, in the alternative, by terminating him without cause. After returning home from National Guard duty, Sweatt was later deployed to Iraq, where he is currently serving.
"Employers must not evade their responsibilities to employees who serve in the uniformed services," said Loretta King, Acting Assistant Attorney General for the Civil Rights Division. "The Civil Rights Division works to uphold the rights of those who serve in the military to be free from discrimination and other violations of USERRA."
The Civil Rights Division has given a high priority to the enforcement of service members’ rights under USERRA. Additional information about USERRA can be found on the Justice Department Web site at: http://www.servicemembers.gov and www.usdoj.gov/crt/emp.
Jury Convicts Former Social Worker of Defrauding the Department of Veterans Affairs and Obstructing JusticeRead the Press Release
WASHINGTON – A former Department of Veterans Affairs (VA) social work associate was convicted yesterday by a jury on four counts of honest services mail fraud, violating the criminal conflict of interest statute and making a false statement to agency officials, Acting Assistant Attorney General Rita M. Glavin and U.S. Attorney David E. Nahmias of the Northern District of Georgia announced.
On Nov. 14, 2006, Bridgette L. Davidson, 37, and her ex-boyfriend, Darrick O. Frazier, 33, both of Atlanta, were charged in a six-count indictment alleging that the two created and engaged in a scheme to defraud the VA of Davidson’s honest services. Davidson was also charged with one count of violating the conflict of interest statue and one count of making a false statement to VA officials investigating the fraudulent scheme. On Sept. 2, 2008, Frazier pleaded guilty to one count of honest services mail fraud and entered into a plea agreement with the government. In December 2008, he was sentenced to twelve months and one day in prison and ordered to pay $20,200 in restitution.
According to court documents, from September 2000 through September 2002, Davidson was employed as a social work associate with the Atlanta VA Medical Center. Among her duties, Davidson was entrusted with finding suitable housing and living arrangements for mentally ill and disabled military veterans. According to evidence presented at trial, rather than place the veterans entrusted to her care in independently owned and licensed assisted living facilities, from November 2001 through mid-April 2002, Davidson, assisted by Frazier, secretly rented a home in Marietta, Ga., a city located several miles northwest of Atlanta, to house the mentally ill and disabled military veterans in exchange for monthly federal subsidy payments. During this time, trial evidence showed that Davidson falsely represented to VA officials and to the military veterans’ legal guardians and custodians that the facility was an independently owned personal care home suitable to house and care for the veterans. Evidence at trial showed that Davidson and Frazier used the rental income obtained from the veterans housed at the facility to pay some of the rent, utilities and related expenses on the rental property, and then kept the excess revenue for their own personal benefit.
Evidence at trial revealed that in April 2002, a veteran died in the home and the facility was shut down. The VA launched an internal investigation into Davidson’s connection to the facility. When interviewed under oath by VA officials, trial testimony proved that Davidson falsely denied that she had any ownership or financial interest in the personal care home she and Frazier secretly owned and operated.
At sentencing, Davidson faces a maximum sentence of 26 years in prison and a $250,000 fine on each count, as well as $23,400 in restitution. A sentencing date has not yet been scheduled by U.S. District Judge Richard W. Story.
The case is being prosecuted by Trial Attorney Armando O. Bonilla of the Criminal Division’s Public Integrity Section, headed by Section Chief William M. Welch II, and Assistant U.S. Attorney Teresa D. Hoyt of the Northern District of Georgia. The case is being investigated by the VA Office of Inspector General.
Director of Singapore Firm Pleads Guilty to Illegally Exporting Controlled Aircraft Components to IranRead the Press Release
BROOKLYN, N.Y. – Laura Wang-Woodford, a U.S. citizen who served as a director of Monarch Aviation Pte, Ltd. ("Monarch"), a Singapore company that imported and exported military and commercial aircraft components for more than 20 years, pled guilty today in federal court in Brooklyn to conspiring to violate the U.S. trade embargo by exporting controlled aircraft components to Iran.
The guilty plea was announced by Benton J. Campbell, United States Attorney for the Eastern District of New York, Matthew G. Olsen, Acting Assistant Attorney General for National Security, Kevin Delli-Colli, Acting Assistant Secretary of Commerce for Export Enforcement, and John Torres, Acting Assistant Secretary of Homeland Security for U.S. Immigration and Customs Enforcement.
Wang-Woodford was arrested on Dec. 23, 2007, at San Francisco International Airport after arriving on a flight from Hong Kong, and has remained incarcerated since then. She and her husband, Brian D. Woodford, a U.K. citizen who served as chairman and managing director of Monarch, were originally charged in a 20-count indictment returned in the Eastern District of New York on Jan. 15, 2003. Brian Woodford remains a fugitive. A superseding indictment charging Wang-Woodford with operating Jungda International Pte. Ltd ("Jungda"), a Singapore-based successor to Monarch, was returned on May 22, 2008.
According to the superseding indictment, between January 1998 and December 2007, the defendants exported controlled U.S. aircraft parts from the United States to Monarch and Jungda in Singapore and Malaysia and then re-exported those items to companies in Tehran, Iran, without obtaining the required U.S. government licenses. As part of the charged conspiracy, the defendants falsely listed Monarch and Jungda as the ultimate recipients of the parts on export documents filed with the U.S. government. The aircraft parts illegally exported to Iran include aircraft shields, shears, "o" rings, and switch assemblies. The superseding indictment further charged that the defendants arranged for the illegal export of U.S. military aircraft components, designed for use in Chinook military helicopters, to Monarch in Singapore.
At the time of her arrest in San Francisco, Wang-Woodford possessed catalogues from a Chinese company, the China National Precision Machinery Import and Export Corporation ("CPMIEC"), containing advertisements for military technology and weaponry. The products advertised included surface-to-air missile systems and rocket launchers. CPMIEC has been sanctioned by the United States Treasury Department, Office of Foreign Assets Control, based, in part, on CPMIEC’s history of selling military hardware to Iran. All United States persons and entities are prohibited from engaging in business with CPMIEC.
As a result of her guilty plea, Wang-Woodford faces a maximum sentence of five years incarceration and a fine of up to $250,000. In addition, in conjunction with her guilty plea Wang-Woodford agreed to forfeit $500,000 to the United States Treasury Department.
"By illegally shipping U.S. military components to Iran, Laura Wang-Woodford pursued profits at the expense of the security of her country and her fellow citizens," said United States Attorney Campbell. "We will utilize all resources at our disposal to prevent the dangerous and illegal export of our military technology." Mr. Campbell thanked the Department of Commerce Bureau of Industry and Security (BIS) and the Department of Homeland Security, U.S. Immigration and Customs Enforcement (ICE), the agencies responsible for conducting the government’s investigation.
"As today’s guilty plea demonstrates, those who provide American military technology to state sponsors of terror will be held accountable for their actions. Keeping sensitive weapons components and other restricted technology from falling into the wrong hands is a top priority for the Justice Department," said Acting Assistant Attorney General for National Security Olsen.
"Ms. Woodford, through her company Monarch Aviation, was one of the largest diverters of U.S. origin aircraft parts to Iran," said Acting Assistant Secretary of Commerce for Export Enforcement Delli-Colli. "Her conviction and sentencing should amplify the U.S. Government’s resolve to combat illegal transshipment wherever it occurs."
"The illegal export of U.S. military technologies through deception poses a threat to the national security of the U.S. and to the men and women who serve in our armed forces, said Acting Assistant Secretary of Homeland Security for U.S. Immigration and Customs Enforcement Torres. "Today’s guilty plea serves as an example of how ICE’s counter proliferation investigations and our federal law enforcement partners aggressively pursue those who violate U.S. arms control laws and ensure sensitive U.S. military equipment does not fall in the wrong hands, especially while our country is at war."
The government’s case is being prosecuted by Assistant United States Attorneys Daniel S. Silver, Cristina M. Posa, and Claire Kedeshian.
Department of Justice Withdraws Enemy Combatant Definition for Guantanamo DetaineesRead the Press Release
In a filing today with the federal District Court for the District of Columbia, the Department of Justice submitted a new standard for the government’s authority to hold detainees at the Guantanamo Bay Detention Facility. The definition does not rely on the President’s authority as Commander-in-Chief independent of Congress’s specific authorization. It draws on the international laws of war to inform the statutory authority conferred by Congress. It provides that individuals who supported al Qaeda or the Taliban are detainable only if the support was substantial. And it does not employ the phrase "enemy combatant."
The Department also submitted a declaration by Attorney General Eric Holder stating that, under executive orders issued by President Obama, the government is undertaking an interagency review of detention policy for individuals captured in armed conflicts or counterterrorism operations as well as a review of the status of each detainee held at Guantanamo. The outcome of those reviews may lead to further refinements of the government’s position as it develops a comprehensive policy.
"As we work towards developing a new policy to govern detainees, it is essential that we operate in a manner that strengthens our national security, is consistent with our values, and is governed by law," said Attorney General Holder. "The change we’ve made today meets each of those standards and will make our nation stronger."
In its filing today, the government bases its authority to hold detainees at Guantanamo on the Authorization for the Use of Military Force, which Congress passed in September 2001, and which authorized the use of force against nations, organizations, or persons the president determines planned, authorized, committed, or aided the September 11 attacks, or harbored such organizations or persons. The government’s new standard relies on the international laws of war to inform the scope of the president’s authority under this statute, and makes clear that the government does not claim authority to hold persons based on insignificant or insubstantial support of al Qaeda or the Taliban.
The brief was filed in habeas litigation brought by numerous detainees at Guantanamo who are challenging their detention under the Supreme Court’s decision last summer in Boumediene v. Bush. A copy of the brief is attached.
Memo Regarding the Government’s Detention Authority
Declaration of Attorney General Eric Holder
Attorney Indicted for Conspiracy and Wire Fraud in Stock Registration and Manipulation SchemeRead the Press Release
WASHINGTON – A securities attorney was charged in an indictment unsealed today with participating in a stock registration evasion scheme involving nine different publicly traded companies and with defrauding investors in a manipulation scheme related to three of the companies, Acting Assistant Attorney General Rita M. Glavin of the Criminal Division and Acting U.S. Attorney Dana J. Boente for the Eastern District of Virginia announced.
Phillip Windom Offill, Jr., of Dallas, was indicted on Thursday, March 12, 2009, in U.S. District Court in the Eastern District of Virginia. The defendant is charged with one count of conspiracy to commit registration violations, securities fraud and nine counts of wire fraud. The indictment also seeks approximately $15 million in forfeiture from the defendant.
In related actions, the U.S. Securities and Exchange Commission (SEC) has enforcement actions against Offill pending in federal district courts in Michigan and Texas.
Offill was taken into custody in Dallas this morning. He is scheduled for arraignment on Friday, March 27, 2009, at the federal courthouse in Alexandria, Va.
According to the indictment, Offill, an attorney in Dallas, was retained by David Stocker, a Phoenix attorney who pleaded guilty earlier this week to conspiracy to commit securities fraud in the Eastern District of Virginia. The indictment charges that Offill and Stocker employed a method to evade federal securities registration requirements in order to provide co-conspirators with millions of unregistered and "free-trading" shares of nine companies’ common stock that the co-conspirators could not have otherwise legally obtained. The indictment alleges many of the shares were subsequently sold by co-conspirators to the general investing public. By evading the registration requirements, the co-conspirators were able to hide from the investing public the actual financial condition and business operations of the companies. The companies included Emerging Holdings Inc.; MassClick Inc.; China Score Inc.; Auction Mills Inc.; Custom-Designed Compressor Systems Inc.; Ecogate Inc.; Media International Concepts Inc.; Vanquish Productions Inc.; and AVL Global Inc.
The indictment also alleges that, in connection with Emerging Holdings, MassClick, and China Score, Offill knowingly participated in a conspiracy known as a "pump-and-dump" scheme to manipulate the price of these companies’ securities. The indictment alleges that co-conspirators falsely manipulated the price and volume of some of the companies’ stock by making materially false and misleading statements in press releases and in spam emails distributed by co-conspirator Justin Medlin and other spammers to tens of millions of email addresses throughout the United States in an effort to create artificial demand for the three companies’ stock. After fraudulently "pumping" the market price and demand for the companies’ stock, co-conspirators allegedly "dumped" shares by selling them for large profits to the general investing public in the over-the-counter market through listings on Pink Sheets, an inter-dealer electronic quotation and trading system. These shares were purchased by unsuspecting investors, including investors in the Eastern District of Virginia, and were often rendered virtually worthless.
If convicted on all charges, Offill would face a maximum prison sentence of 185 years.
An indictment is merely a charge and a defendant is presumed innocent until proven guilty.
Nine other defendants have pleaded guilty and eight of them have been sentenced in federal court in Alexandria, Va., for their roles in related stock manipulation schemes. David B. Stocker pleaded guilty on Wednesday, March 11, 2009, and will be sentenced on November 6, 2009. Michael R. Saquella was sentenced to 10 years in prison; Justin Medlin was sentenced to six years in prison; Steven P. Luscko and Gregory A. Neu were each sentenced to five years in prison; Lawrence Kaplan was sentenced to three years in prison; Brian G. Brunette was sentenced to a one year in prison; Anthony Tarantola was sentenced to six months in prison; and Henry "Hank" Zemla was sentenced to three months in prison.
The case, which was referred by the Financial Industry Regulatory Authority (FINRA), was investigated by the FBI and the U.S. Postal Inspection Service, with assistance from the Virginia Securities Division. The case is being prosecuted by Assistant U.S. Attorneys Patrick Stokes and Ed Power of the Eastern District of Virginia and Deputy Chief Steve Linick of the Criminal Division’s Fraud Section. The Department of Justice acknowledges the substantial assistance of FINRA and the SEC in its investigation. It would also like to thank the Virginia State Corporation Commission, Division of Securities and Retail Franchising, for its assistance.
San Mateo County, California, to Pay U.S. $6.8 Million to Resolve False Claims AllegationsRead the Press Release
WASHINGTON - San Mateo County, Calif., has agreed to pay the United States $6.8 million to resolve allegations that the San Mateo Medical Center (SMMC) submitted false claims to the United States in connection with payments from the Medicare and Medicaid programs, the Justice Department announced today.
The government alleges that SMMC falsely inflated its bed count to Medicare in order to receive higher payments under Medicare’s Disproportionate Share Hospital (DSH) adjustment. The DSH adjustment is an extra Medicare payment available to hospitals that meet certain requirements, including having 100 or more acute care beds.
In addition, the government alleges that San Mateo County improperly obtained federal payments under the Medicaid program for services provided to patients at Institutes of Mental Disease (IMDs) who were between the ages of 22 and 64. Such services are ineligible for federal funding, and San Mateo County was required to separately report them to the California Department of Mental Health so that the state could ensure that no federal funds were used to pay for them. Medicaid (known as Medi-Cal in California) is a program funded jointly by federal and state funds. The settlement covers conduct from 1997 to 2007.
The settlement resolves allegations that were filed in San Francisco by Ronald M. Davis, a former employee of San Mateo County. The lawsuit was filed under the qui tam or whistleblower provisions of the False Claims Act, which permit private individuals called "relators" to bring lawsuits on behalf of the United States and receive a portion of the proceeds of a settlement or judgment awarded against a defendant. The relator in this action will receive $1,020,000 as his statutory share of the proceeds of this settlement.
"Today’s settlement demonstrates the government’s ongoing commitment to protect the integrity of federal health care programs," commented Acting Assistant Attorney General Michael F. Hertz.
The settlement was the result of a coordinated effort among the Commercial Litigation Branch of the Justice Department’s Civil Division; the U.S. Attorney’s Office for the Northern District of California, Affirmative Civil Enforcement Unit; and the U.S. Department of Health and Human Services, Office of Inspector General.
Assistant U.S. Attorney Sara Winslow handled the matter on behalf of the U.S. Attorney’s Office, with the assistance of Legal Assistant Kathy Terry, together with Civil Division attorney Arthur S. Di Dio. Auditor Jeff McVicker of the U.S. Attorney’s Office for the Central District of California also assisted in the matter.
Four Arrested in Killings of Eagles and Other Protected BirdsRead the Press Release
WASHINGTON—Four men have been arrested by special agents of the U.S. Fish and Wildlife Service as the result of an undercover investigation into the illegal killing and trade of bald and golden eagles and other protected birds, the Justice Department and the Fish and Wildlife Service announced today. The men are charged in four complaints with alleged violations of the Bald and Golden Eagle Protection Act, the Migratory Bird Treaty Act, and the Lacey Act.
Ricky Sam Wahchumwah of Granger, Wash., Alfred L. Hawk Jr. of White Swan, Wash., William Wahsise also of White Swan, and Reginald Dale Akeen also known as J.J. Lonelodge of Anadarko, Okla., were arrested.
The charging documents, unsealed in U.S. District Court for the Eastern District of Washington and the District of Oregon, collectively allege that the individuals were involved in killing eagles and selling feathers and other bird parts in violation of the law.
According to an affidavit filed along with the complaints, special agents working undercover were able to document the sales of protected migratory bird parts. One complaint alleges that a single covert purchase from Hawk Jr. yielded a bald eagle tail, two golden eagle tails, one set of golden eagle wings, four red-shafted northern flicker tails, four rough-legged hawk tails and two northern harrier tails for a total of $3,000. According to the documents, Hawk, Jr. and Wahsise allegedly hunted and killed three bald eagles the morning of the sale by sitting near some wild horses killed to bait and attract eagles. A third complaint alleges that Wahchumwah sold one golden eagle tail in violation of the law. The sworn affidavit accompanying the complaint states that Wahchumwah sold the tail to an undercover special agent for $500.
A fourth complaint, filed in the District of Oregon, alleges that Akeen made several sales to an undercover agent, including two fans made from juvenile golden eagle feathers worth over $3,000.
Eagles and other protected migratory birds are viewed as sacred in many Native American cultures, and the feathers of the birds are central to religious and spiritual Native American customs. By law, enrolled members of federally-recognized Native American tribes are entitled to obtain permits to possess eagle parts for religious purposes but federal law strictly prohibits selling eagle parts under any circumstances. The Fish and Wildlife Service operates the National Eagle Repository, which collects eagles that die naturally or by accident, to supply enrolled members of federally recognized tribes with eagle parts for religious use. The Service has worked to increase the number of salvaged eagles sent to the Repository and make it easier to send birds to the facility by providing shipping materials at no charge. The Repository obtains eagles from state and federal agencies as well as zoos.
The charges and allegations contained in the complaints are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
The maximum penalty for a violation of the Migratory Bird Treaty Act, as charged, includes up to two years in prison and a $250,000 fine. The maximum penalty for a first time violation of the Bald and Golden Eagle Protection Act includes one year in prison and $250,000 fine and the maximum penalty for a felony violation of the Lacey Act includes up to five years in prison and a $250,000 fine.
The Fish and Wildlife Service is the principal federal agency responsible for conserving, protecting and enhancing fish, wildlife and plants and their habitats for the continuing benefit of the American people. The arrests announced today are part of an on-going investigation into the illegal killing of bald and golden eagles and other protected birds and the sale of their feathers and parts. The agency is conducting the investigation with the help and cooperation of state, federal and tribal law enforcement agencies.
The cases are being prosecuted by the U.S. Attorney’s Offices of the Eastern District of Washington, the District of Oregon and the Justice Department’s Environmental Crimes Section.
Former Alaska State Representative Pleads Guilty to Public Corruption ChargesRead the Press Release
WASHINGTON – Beverly L. Masek, a former elected member of the Alaska House of Representatives, pleaded guilty today to conspiracy to commit bribery, Acting Assistant Attorney General Rita M. Glavin of the Criminal Division announced.
Masek pleaded guilty before U.S. District Judge Ralph Beistline in Anchorage to one count of conspiracy to commit bribery concerning programs receiving federal funds. In court documents, Masek admitted to conspiring with Bill J. Allen, the former chief executive officer of VECO Corporation (VECO), a now-defunct multinational oil field services company, and Richard L. Smith, a former VECO vice president, to soliciting and accepting bribes. Masek admitted that in 2003 she received cash payments from Allen and solicited a consulting position with VECO in exchange for agreeing to perform and actually performing official acts that benefitted Allen and VECO’s business interests. Allen and Smith both pleaded guilty to multiple federal corruption charges in May 2007 and both are awaiting sentencing.
At sentencing, Masek faces a maximum of five years in prison and a $250,000 fine. Sentencing has been scheduled for May 28, 2009.
Including Masek’s guilty plea and those of Allen and Smith, there have been 11 criminal convictions to date arising out of the ongoing investigation into public corruption in the state of Alaska. Thomas T. Anderson, a former elected member of the Alaska House of Representatives, was convicted in July 2007 and sentenced to five years in prison for extortion, conspiracy, bribery and money laundering for soliciting and receiving money from an FBI confidential source in exchange for agreeing to perform official acts to further a business interest represented by the source. Peter Kott, a former speaker of the Alaska House of Representatives, was convicted in September 2007 and sentenced to six years in prison for extortion, bribery and conspiracy. Victor H. Kohring, a former elected member of the Alaska House of Representatives, was convicted at trial in November 2007 for attempted extortion, bribery and conspiracy, and was sentenced to three and a half years in prison. In March 2008, James Clark, chief of staff to a former governor of Alaska, pleaded guilty to conspiracy to commit honest services mail and wire fraud. Former Anchorage lobbyist William Bobrick pleaded guilty in May 2007 to felony public corruption charges. U.S. Sen. Theodore F. Stevens was convicted at trial on Oct. 27, 2008, of making false statements regarding his required U.S. Senate financial disclosures for 2001 through 2006. Former Alaska businessman William Weimar was sentenced to six months in prison on Nov. 12, 2008, after pleading guilty on Aug. 12, 2008, to conspiracy to commit honest services mail and wire fraud and structuring financial transactions. John Cowdery, a former elected member of the Alaska State Senate, was sentenced to six months home confinement and a $25,000 fine on March 10, 2009, after pleading guilty on Dec. 19, 2008, to conspiring to bribe another Alaska state legislator.
The case was prosecuted by trial attorneys Nicholas A. Marsh and Edward P. Sullivan of the Criminal Division's Public Integrity Section, headed by Chief William M. Welch, II, and Assistant U.S. Attorneys Joseph W. Bottini and James A. Goeke from the District of Alaska. The case was investigated by the FBI and the Internal Revenue Service Criminal Investigative Division.
U.S. Department of Justice Promotes International Network to Combat Intellectual Property CrimeRead the Press Release
BANGKOK, THAILAND – Building upon the successes of earlier efforts, the U.S. Department of Justice today announced the opening in Bangkok of a regional conference of approximately 100 key law enforcement and industry officials from more than a dozen nations with the goal of strengthening international cooperation in fighting large-scale intellectual property crimes. The Justice Department organized the gathering with the assistance of the U.S. Patent and Trademark Office and the U.S. Department of State. Justice Department prosecutors will be joined at the conference by officials from the FBI and the Department of Homeland Security, Immigration and Customs Enforcement.
High-level prosecutors, police and customs officials from the United States, Brunei, Cambodia, Hong Kong, Indonesia, Japan, Laos, Macao, Philippines, Singapore, South Korea, Thailand and Vietnam are participating in the conference, which seeks to enhance cross-border cooperation in the fight against intellectual property theft through the enhancement of the IP Crimes Enforcement Network (IPCEN), which was established in 2007.
The IPCEN serves two primary functions. First, the network facilitates the exchange of successful investigation and prosecution strategies in combating domestic piracy and counterfeiting crimes. In private sessions this week, panels of law enforcement experts will share best practices and lessons learned in addressing retail counterfeiting and piracy, the mass production and distribution of counterfeit goods, theft of trade secrets, Internet-based intellectual property theft and border enforcement strategies. Second, the IPCEN will strengthen communication channels to promote coordinated, multinational prosecutions of the most serious offenders.
In recognition that effective prosecution of intellectual property crime depends heavily on cooperation between victims and law enforcement authorities, industry representatives will also address the conference regarding the scope and severity of counterfeiting crimes in Asia, and discuss ways to collectively enhance enforcement efforts.
The IPCEN conference reflects the continuing outreach efforts of the Justice Department’s Attaché and IP Law Enforcement Coordinator for Asia, Christopher P. Sonderby, and the Criminal Division’s Computer Crime and Intellectual Property Section. More information about the Department’s efforts to combat intellectual property and computer crime can be found at www.cybercrime.gov.
Individual Indicted in Connection with Costa Rica-based Business Opportunity Fraud VenturesRead the Press Release
WASHINGTON – A British citizen was charged in connection with the operation of a series of fraudulent business opportunities on March 10, 2009, by a Miami federal grand jury, the Justice Department and the U.S. Postal Inspection Service announced today. Sirtaj Mathauda was indicted on charges that he and his co-conspirators purported to sell vending machine, beverage and greeting card business opportunities, including assistance in establishing, maintaining and operating such businesses. The charges form part of the government’s continued nationwide crackdown on business opportunity fraud.
Beginning in June 2004, Mathauda is alleged to have fraudulently induced purchasers in the United States to buy business opportunities in Apex Management Group, Inc., USA Beverages, Inc., Omega Business Systems, Incorporated, and Nation West Distribution Company. According to the indictment, the business opportunities the defendant and his co-conspirators sold cost thousands of dollars each, and most purchasers paid at least $10,000. Typically, each company operated for several months, and after one company closed, the next opened. The various companies used bank accounts, office space and other services in the Southern District of Florida, New Mexico, Wisconsin and Colorado.
The defendant, using an alias, and his co-conspirators employed Voice Over Internet Protocol (VoIP) phone service and virtual offices in the U.S. to handle mailings to make it appear to potential purchasers that the defendant was located in the United States. In reality, Mathauda operated out of Costa Rica to fraudulently induce potential purchasers in the United States to buy the purported business opportunities.
According to the indictment, the companies made numerous false statements to potential purchasers of the business opportunities. Among the misrepresentations alleged in the indictment are that purchasers would likely earn substantial profits; that prior purchasers of the business opportunities were earning substantial profits; that purchasers would sell a guaranteed minimum amount of merchandise, such as greeting cards and beverages; and that the business opportunity worked with locators familiar with the potential purchaser’s area who would secure or had already secured high-traffic locations for the potential purchaser’s merchandise stands. Potential purchasers also were falsely told that the profits of the companies were based in part on the profits of the business opportunity purchasers, thus creating the false impression that the companies had a stake in the purchasers’ success.
In addition, potential purchasers were falsely told that the companies were established years earlier, had a significant number of distributors across the country, and had a track record of success. Potential purchasers also were told that they would receive their merchandise racks, merchandise and locations promptly, even though many purchasers received nothing at all. Potential purchasers were referred to references who, according to the indictment, told false tales of their success as business opportunity owners.
"Business opportunity fraud is a very serious crime. We will continue to work with the Postal Inspection Service and use our law enforcement resources to investigate and uncover business opportunity fraud," said Michael F. Hertz, Acting Assistant Attorney General for the Justice Department’s Civil Division.
"Business opportunity promoters need to realize that this type of fraud will be detected and prosecuted vigorously," said R. Alexander Acosta, U.S. Attorney for the Southern District of Florida. "This is true even if they operate from abroad, as the charges allege this defendant did."
According to the indictment:
- Apex Management Group, Inc. was registered as a Florida corporation and rented office space in Ft. Lauderdale, Fla. Apex purportedly offered a vending machine business opportunity.
- USA Beverages, Inc. was registered as a Florida and New Mexico corporation and rented office space in Las Cruces, N.M. USA Beverage purportedly offered a coffee beverage business opportunity.
- Omega Business Systems, Incorporated was registered as a Wisconsin and Florida corporation and rented office space in Madison, Wis. Omega purportedly offered a greeting card business opportunity.
- Nation West Distribution Company was registered as a Colorado corporation and rented office space in Denver, Colo. Nation West purportedly offered a "mini-mall" vending machine business opportunity.
According to the indictment, Mathuada and his co-conspirators misled potential purchasers by renting office space in the United States for USA Beverages, Omega, and Nation West, and otherwise making it appear that these companies’ operations were fully within the United States. However, these companies actually operated from Costa Rica.
Mathauda was charged with conspiracy and with committing his offense via telemarketing. He was also charged with 13 counts of mail fraud and two counts of wire fraud.
If convicted, Mathauda faces a maximum statutory term of 25 years’ imprisonment, a possible fine and mandatory restitution on the conspiracy count. He also faces a maximum statutory term of imprisonment of 25 years on each of the mail and wire fraud counts, a possible fine and mandatory restitution.
"We will not allow criminals abroad to use modern communication devices to commit fraud on the American public. This international and domestic investigation illustrates our resolve to protect the American public from investment scams, wherever they occur," said U.S. Postal Inspector in Charge, Henry Gutierrez, based in Miami.
"The Postal Inspection Service is vigilant in investigating and rooting out fraudulent schemes. Consumers must be aware that false references and empty promises of assistance locating vending and sales displays are extremely common in this type of scam," said U.S. Postal Inspector in Charge Pete Zegarac, based in Phoenix. "These companies took over the corporate identities of older businesses – so even claims of being in business for many years must be viewed with caution."
Acting Assistant Attorney General Hertz and U.S. Attorney Acosta commended the investigative efforts of the Postal Inspection Service, as well as the Federal Trade Commission, which brought a related civil suit earlier and made a criminal referral. The case is being prosecuted by trial attorneys Jeffrey Steger and Alan Phelps of the U.S. Department of Justice Office of Consumer Litigation.
An indictment is merely an allegation, and every defendant is presumed innocent until proven guilty beyond a reasonable doubt.
Federal Court Shuts Down North Carolina Tax PreparerRead the Press Release
WASHINGTON -- A federal court has permanently barred Raymond A. Renfrow of Elm City, N.C., from preparing federal income tax returns for others, the Justice Department announced today. The U.S. District Court for the Eastern District of North Carolina entered the civil injunction order, which also stops Renfrow from promoting a tax fraud scheme that used sham trusts to falsely deduct customers’ non-deductible personal expenses. The court found that Renfrow prepared tax returns for customers that have caused an estimated loss to the U.S. Treasury of more than $1.4 million.
The court said that Renfrow’s false tax returns were based on three tax schemes he promoted for Concept Marketing International (CMI), a company that operated a multi-level marketing scheme involving the sale of American Eagle silver coins. The court stated that the tax schemes falsely purported to enable participants to take tax deductions for the cost of coins they bought, to deduct non-deductible personal living expenses, and to use sham trusts to exempt income and assets from taxation.
James E. Aldridge Jr., a founder of CMI, was found guilty of tax-related criminal charges in 2007 by a federal jury in Kansas City, Mo. He is currently serving a prison sentence.
The court found that CMI’s trust scheme was promoted in conjunction with Trust Education Services and National Trust Services. Information on injunctions involving those businesses is available at http://www.usdoj.gov/tax/prtax/txdv03332.htm and http://www.usdoj.gov/tax/txdv04081.htm.
The court also required Renfrow to give the Justice Department a list of his customers’ names, addresses, e-mail addresses and Social Security numbers.
John DiCicco, Acting Assistant Attorney General for the Justice Department’s Tax Division, thanked former Tax Division trial attorney Frederick Noyes, who handled the case for the government, and Kathy A. Grimaldi, a revenue agent with the Internal Revenue Service’s Small Business/Self-Employed Division, who investigated the case.
Over the past decade, the Justice Department has obtained injunctions against more than 380 tax return preparers and tax-fraud promoters. Information about these cases is available on the Justice Department Web site.
Attorney Pleads Guilty to Conspiracy to Commit Securities FraudRead the Press Release
WASHINGTON – A securities attorney pleaded guilty today to defrauding investors in stock manipulation schemes involving 19 different publicly traded companies, Acting Assistant Attorney General Rita M. Glavin of the Criminal Division and Acting U.S. Attorney Dana J. Boente for the Eastern District of Virginia announced today.
David B. Stocker, 49, of Phoenix pleaded guilty in U.S. District Court in Alexandria, Va., for his participation in a stock manipulation conspiracy known as a "pump-and-dump" scheme. Stocker is scheduled to be sentenced on Nov. 6, 2009, by U.S. District Judge Liam O’Grady. The maximum penalties for the conspiracy charge are five years in prison and a $250,000 fine.
Stocker pleaded guilty to a criminal information charging him with one count of conspiracy to commit securities fraud involving 19 publicly traded companies including: eDollars Inc; Emerging Holdings Inc.; MassClick Inc.; China Score Inc.; American Television and Film Company Inc.; Auction Mills Inc.; Custom-Designed Compressor Systems Inc.; Ecogate Inc.; Media International Concepts Inc.; Vanquish Productions Inc.; AVL Global Inc.; Motion DNA Corp.; PokerBook Gaming Corp.; TKO Holding Ltd; Body Scan Inc.; Integrity Messenger Corp.; Beverly Hills Film Studios; IFINIX Inc.; and V3 Global Inc.
In related actions, the U.S. Securities and Exchange Commission (SEC) has enforcement actions against Stocker pending in federal district courts in Arizona, Michigan and Texas.
According to the plea agreement and criminal information, the stock manipulation scheme employed by Stocker and his co-conspirators followed a common pattern. Stocker admitted that he acted as securities counsel for companies, and he and others fraudulently caused the companies to issue millions of "free-trading" shares to co-conspirators in transactions that had not been registered with the SEC. As Stocker acknowledged in his plea, after the unregistered and free-trading shares had been issued, co-conspirators began to manipulate, or "pump," the trading value of the companies’ stock through a number of deceptive and manipulative means to entice members of the investing public to invest in the stock. For example, according to court documents, members of the conspiracy engaged in coordinated trades to manipulate the price of the stock.
Stocker also admitted that co-conspirators falsely manipulated the price and volume of some of the companies’ stock by making materially false and misleading statements in press releases and in spam emails distributed by co-conspirator Justin Medlin and other spammers to tens of millions of email addresses throughout the United States in an effort to create artificial demand for the companies’ stock. After fraudulently "pumping" the market price and demand for the companies’ stock, co-conspirators "dumped" millions of shares by selling them for large profits to the general investing public in the over-the-counter market through listings on Pink Sheets, an inter-dealer electronic quotation and trading system. These shares were purchased by unsuspecting investors, including investors in the Eastern District of Virginia, and were often rendered virtually worthless.
Eight other defendants have pleaded guilty and have been sentenced in federal court in Alexandria, Va., for their roles in related stock manipulation schemes. Michael R. Saquella was sentenced to 10 years in prison; Justin Medlin was sentenced to six years in prison; Steven P. Luscko and Gregory A. Neu were each sentenced to five years in prison; Lawrence Kaplan was sentenced to three years in prison; Brian G. Brunette was sentenced to a one year in prison; Anthony Tarantola was sentenced to six months in prison; and Henry "Hank" Zemla was sentenced to three months in prison.
The case, which was referred by the Financial Industry Regulatory Authority (FINRA), was investigated by the FBI and the U.S. Postal Inspection Service, with assistance from the Virginia Securities Division. The case is being prosecuted by Assistant U.S. Attorneys Patrick Stokes and Ed Power of Eastern District of Virginia and Deputy Chief Steve Linick of the Criminal Division’s Fraud Section. The Department of Justice acknowledges the substantial assistance of FINRA and the SEC in its investigation. It would also like to thank the Virginia State Corporation Commission, Division of Securities and Retail Franchising, for its assistance.
Attorney General Appoints Officials to Lead Task Force Reviews on Interrogation and Detention PolicyRead the Press Release
WASHINGTON – Attorney General Eric Holder today announced the appointment of two individuals to lead interagency task forces established under separate Executive Orders issued on Jan. 22 calling for a review of the government’s interrogation and transfer policies, as well as a review of detention policy.
"These appointments reflect our commitment to develop sound options for handling detainees in the future as well as policies on interrogation and transfer that uphold American values and national security interests," said Attorney General Holder. "Having served in critical legal and national security positions over their careers, J. Douglas Wilson and Brad Wiegmann have the experience and judgment necessary to help us carry out these important tasks."
J. Douglas Wilson has been designated to lead the Special Task Force on Interrogation and Transfer Policies. In accordance with the President’s Executive Order, this interagency task force is charged with conducting a review to determine whether the Army Field Manual interrogation guidelines, when employed by departments or agencies outside the military, provide an appropriate means of acquiring the intelligence to protect the nation, and whether different or additional interrogation guidance is necessary.
The task force is also responsible for examining the transfer of individuals to other nations in order to ensure that such practices comply with all domestic and international legal obligations and are sufficient to ensure that such individuals do not face torture or inhumane treatment.
The Order provides that the Attorney General or his designee shall serve as the Chair of the task force and that the Director of National Intelligence and the Secretary of Defense, or their designees, shall serve as Co-Vice-Chairs. Other members of the task force include representatives of the Secretaries of State and Homeland Security, the Director of the Central Intelligence Agency, the Chairman of the Joint Chiefs of Staff and other officials as determined by the Chair.
Mr. Wilson is the Chief of the National Security Unit in the U.S. Attorney’s Office for the Northern District of California. Previously he served as Appellate Chief and Criminal Chief in that office and as Special Counsel in the Office of Intelligence Policy and Review at the Department of Justice.
The Attorney General also announced that Brad Wiegmann, together with a representative of the Department of Defense, will lead the Special Task Force on Detention Policy. In accordance with the President’s Executive Order, this interagency task force is charged with conducting a review of the lawful options available to the federal government for the apprehension, detention, trial, transfer, release or other disposition of individuals captured or apprehended in connection with armed conflicts and counterterrorism operations.
The Order provides that the Attorney General and the Secretary of Defense, or their designees, will co-chair the Task Force. Other task force participants include representatives of the Secretaries of State and Homeland Security, the Director of National Intelligence, the Director of the Central Intelligence Agency, the Chairman of the Joint Chiefs of Staff, and other officials as determined by the Co-Chairs.
Mr. Wiegmann serves as the Principal Deputy and Chief of Staff in the National Security Division of the Department of Justice. Previously he has served in legal positions in the Departments of State and Defense and on the staff of the National Security Council.
Both task forces are charged with providing a report to the President within 180 days of the January 22 Executive Orders, unless the chairs determine that an extension of time is necessary.
Shipping Line Pays $1.4 Million for Environmental CrimesRead the Press Release
WASHINGTON—Holy House Shipping AB, a Swedish corporation, was sentenced today in U.S. District Court in Camden, N.J., to pay a $1 million fine, a special assessment of $400,000 in community service payments and serve three years of probation for failing to maintain an accurate oil record book in an attempt to conceal illegal discharges of oil-contaminated waste directly into the ocean from one of its ships, the Justice Department announced.
Under the terms of the plea agreement approved by U.S. District Judge Jerome B. Simandle, the $400,000 special assessment will go to the congressionally-established National Fish and Wildlife Foundation to be used for projects to restore and protect fragile marine habitats in New Jersey.
According to documents filed in the case, on Feb. 27, 2008, U.S. Coast Guard inspectors from Coast Guard Sector Delaware Bay boarded the M/V Snow Flower, a 568-foot, Cook Island flagged ocean-going ship, at the marine terminal in Gloucester, N.J., to conduct a routine inspection. Coast Guard inspectors reviewed the ship’s oil record book, a required log in which ship engineers must record all transfers and discharges of oil. Inspectors identified a number of discrepancies related to the capacity and use of the ship’s oil water separator. In addition, the inspectors identified a pipe that was believed to be used to discharge oil contaminated waste directly to the sea, bypassing the oil water separator.
Prior to the vessel entering the Gloucester Marine Terminal, crewmembers who worked in the Snow Flower’s Engine Room Department, contacted members of the Coast Guard Sector Bay and reported that the ship’s chief engineer had ordered the discharge of oily water and oil sludge overboard on the vessel’s most recent voyage from Los Angeles to Chile and again on the return voyage to the United States. The crewmembers stated that the discharges were ordered in the Pacific and/or Atlantic Oceans and were accomplished by using a metal pipe connected to the vessel’s starboard bilge holding tanks. During today’s hearing, Judge Simandle ordered $375,000 be awarded to the two whistle blowers for their efforts.
The chief engineer, Igor Krajacic, pleaded guilty to failing to maintain an accurate record book on Nov. 3, 2008, and was sentenced on Jan. 16, 2009, to an $8,000 fine.
"Holy House Shipping violated our nation’s environmental laws and today the company is paying for it," said John C. Cruden, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. "Deliberate pollution from ocean-going ships is a continuing problem. Today’s fine sends the message that we will continue to prosecute those who ignore laws meant to protect the environment."
"The Coast Guard is committed to aggressive enforcement of U.S. laws and international requirements designed to prevent pollution at sea. We thoroughly investigate credible reports of alleged illegal discharges of oil and/or tampering with shipboard anti-pollution equipment or falsifying oil discharge records," said Captain David Scott, Commanding Officer of the U.S. Coast Guard’s Sector Delaware Bay. "We work closely with appropriate state and other Federal law enforcement agencies to prosecute environmental crimes, to promote compliance with these important environmental protection statutes."
"We work closely with the U.S. Coast Guard to investigate those who take shortcuts and dump waste oil and contaminated bilge water directly into the ocean," said William Lometti, Special Agent in Charge of Environmental Protection Agency’s Criminal Investigation Division in New York. "Today's sentence should send a clear message that those who violate the law and pollute the ocean will be vigorously investigated and prosecuted."
As part of its probation, Holy House Shipping must implement an Environmental Management System/Compliance Plan (EMS) to ensure there is no future dumping from the ships it operates and manages that conduct business in U.S. ports. The company must hire a third party auditor to ensure it is following all procedures identified in the EMS. The auditor will have access to all of the company’s ships and records. Additionally, each of the auditor’s reports will be sent to the Coast Guard, the probation office, the U.S. Attorney’s Office and the Justice Department’s Environmental Crimes Section, at the same time the report is sent to the company.
The case was investigated by the U.S. Coast Guard Investigative Special Agents, U.S. Coast Guard Delaware Bay, and the Environmental Protection Agency’s Criminal Investigation Division, and was prosecuted by Assistant U.S. Attorney Ronald Chillemi and Trial Attorney Gary Donner of the Environmental Crimes Section.
Mississippi Lawyer Sentenced to 18 Months in Prison for Failure to File Tax ReturnsRead the Press Release
WASHINGTON – Marshall E. Sanders, an attorney based in Vicksburg, Miss., was sentenced to 18 months in prison for failure to file tax returns by Magistrate Judge James C. Sumner, the Justice Department and Internal Revenue Service (IRS) announced today. In addition, Judge Sumner ordered Sanders to pay restitution to the IRS of $1,025,453.
In November 2008, Sanders pleaded guilty to failing to file tax returns for years 2001 and 2002. According to the formal charging information and the court’s findings at sentencing, Sanders earned gross income of over $2 million in 2001 and almost $500,000 in 2002. Moreover, Sanders failed to file individual income tax returns since 1995 and owed over $1.4 million in taxes to the IRS.
As part of his plea agreement, Sanders agreed to cooperate with the IRS in making a correct determination of his income tax liabilities for years 1995 through the present and to file complete and accurate tax returns for those years.
"As the tax filing deadline approaches, individuals are reminded that the failure to file tax returns can have serious legal consequences," said Ronald A. Cimino, Acting Deputy Assistant Attorney General for Criminal Matters for the Justice Department’s Tax Division. "The Department of Justice and IRS continue to protect the U.S. Treasury and the interests of honest taxpayers by prosecuting those who willfully violate our tax laws."
"Failing to file an income tax return is not a victimless crime, and all Americans have a duty to pay their fair share," stated Michael J. De Palma, Special Agent in Charge, IRS Criminal Investigation, New Orleans Field Office. "Honest, hardworking Americans pay the price when others choose not to file their tax returns and pay their tax obligations. Special Agents of IRS Criminal Investigation will continue to work with the Justice Department in an effort to protect the public's confidence in our tax system. If you suspect someone of committing fraud, do the right thing - contact your local IRS office."
In accordance with the plea agreement, the Government moved to dismiss the indictment which was filed against Sanders in May 2008.
Acting Deputy Assistant Attorney General Cimino commended the IRS special agents who investigated the case, as well as Tax Division trial attorneys Kevin Lombardi and Michelle Petersen 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/.
Hitachi Displays Agrees to Plead Guilty and Pay $31 Million Fine for Participating in LCD Price-Fixing ConspiracyRead the Press Release
WASHINGTON – Japanese electronics manufacturer Hitachi Displays Ltd., agreed to plead guilty and pay a $31 million fine for its role in a conspiracy to fix prices in the sale of Thin Film Transistor-Liquid Crystal Display panels (TFT-LCD) sold to Dell Inc., the U.S. Department of Justice announced today.
A one-count felony charge filed today in U.S. District Court in San Francisco charges Hitachi Displays Ltd., a subsidiary of Hitachi Ltd., with participating in a conspiracy to fix the prices of TFT-LCD sold to Dell for use in desktop monitors and notebook computers from April 1, 2001, through March 31, 2004. According to the plea agreement, which is subject to court approval, Hitachi Displays has agreed to cooperate with the Department’s ongoing antitrust investigation.
"Hitachi joins three other multinational companies who have admitted to their involvement in fixing prices for LCD panels sold to U.S. companies and that have already paid criminal fines totaling more than $585 million," said Scott D. Hammond, Acting Assistant Attorney General in charge of the Department’s Antitrust Division. "This case should send a strong message to multinational companies operating in the United States that when it comes to enforcing the U.S. antitrust laws we mean business."
Including today’s filing, four companies and seven individuals have been charged in the Department’s ongoing antitrust investigation into the TFT-LCD industry. To date, more than $585 million in criminal fines have been imposed as a result of this investigation, and four individuals have pleaded guilty and have been sentenced to serve jail time.
TFT-LCD panels are used in computer monitors and notebooks, televisions, mobile phones and other electronic devices. In 2006, the worldwide market for TFT-LCD panels was approximately $70 billion. Hitachi Displays Ltd., based in Tokyo, Japan, reported $1.75 billion in total revenue for the fiscal year ending March 2008.
Hitachi Displays is charged with carrying out the conspiracy by:
- Participating in bilateral meetings, conversations and communications in Japan, Korea and the United States to discuss the prices of TFT-LCD to be sold to Dell;
- Agreeing, during those bilateral meetings, conversations and communications, to charge prices of TFT-LCD to be sold to Dell at certain predetermined levels;
- Issuing price quotations in accordance with the agreements reached; and
- Exchanging information on sales of TFT-LCD sold to Dell, for the purpose of monitoring and enforcing adherence to the agreed-upon prices.
This is the fourth plea agreement by a company charged with participating in conspiracies to fix the prices for TFT-LCD. On Dec. 15, 2008, LG Display Co. (LG) pleaded guilty to participating in a worldwide conspiracy to fix the price for TFT-LCD 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 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.
Today’s charge 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.
Former Congressional Staffer Pleads Guilty to Conspiracy to Commit Honest Services FraudRead the Press Release
WASHINGTON – A former congressional staffer pleaded guilty today to conspiring with others to commit honest services fraud, Acting Assistant Attorney General Rita M. Glavin of the Criminal Division announced.
Ann Copland, 52, pleaded guilty before U.S. District Judge Richard W. Roberts in the District of Columbia. According to the factual basis filed with the court, Copland worked on the staff of a U.S. senator from 1979 until 2008. From 2002 through 2004, Copland worked as an assistant on legislative and administrative matters, particularly those legislative matters involving Native American tribes.
In her plea agreement, Copland admitted being lobbied by Jack Abramoff, Todd Boulanger and another lobbyist on matters involving a Native American tribe located in Mississippi. Copland admitted that she took and agreed to take a variety of official actions beneficial to the lobbyists and their clients, including the Mississippi tribe, at the request of Abramoff, Boulanger and others, based in part on the fact that she was receiving and wanted to continue receiving thousands of dollars in tickets to concerts, sports and other entertainment events, from the lobbyists. Specifically, Copland admitted to receiving more than $25,000 worth of tickets, meals and drinks from March 2002 through May 2004, during which time she understood that the lobbyists were giving her those things of value in order to influence her in the performance of her official actions.
The case is part of the ongoing investigation into the activities of former lobbyist Jack Abramoff and his associates. Boulanger pleaded guilty on Jan. 30, 2009, for his role in the scheme. Nineteen individuals, including lobbyists and public officials, have pleaded guilty or are awaiting trial as a result of the investigation, including Abramoff, who was sentenced in September 2008 to 48 months in prison.
This case is being prosecuted by trial attorneys M. Kendall Day and Peter C. Sprung of the Public Integrity Section, headed by Section Chief William M. Welch II. The investigation is being conducted by the FBI.
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Former Alaska State Senator Sentenced on Public Corruption ChargesRead the Press Release
WASHINGTON – John Cowdery, a former elected member of the Alaska state senate, was sentenced today to three years probation with a special condition requiring him to serve six months of home confinement for conspiring to bribe another Alaska state legislator, Acting Assistant Attorney General Rita M. Glavin of the Criminal Division announced.
U.S. District Judge Ralph Beistline for the District of Alaska also ordered Cowdery to pay a $25,000 fine.
On Dec. 19, 2008, Cowdery pleaded guilty to one count of conspiracy to commit bribery concerning programs receiving federal funds. In court documents, Cowdery admitted to conspiring with Bill J. Allen, the former chief executive officer of VECO Corporation (VECO), a now-defunct multinational oil field services company, and Richard L. Smith, a former VECO vice president, to offer at least $10,000 in purported campaign contributions to State Senator A in exchange for State Senator A’s support of a proposed petroleum profits tax, or PPT, that VECO wanted the Alaska state legislature to pass in 2006. Cowdery admitted that he and Allen met State Senator A on June 25, 2006, at an Anchorage restaurant to offer State Senator A the bribe. Cowdery admitted that he and Allen specifically conditioned receipt of the bribe, which State Senator A did not accept, on State Senator A’s support for the PPT legislation sought by VECO and Allen. Allen and Smith both pleaded guilty to multiple federal corruption charges in May 2007 and both are awaiting sentencing.
Including Cowdery’s guilty plea and those of Allen and Smith, there have been ten criminal convictions to date arising out of the ongoing investigation into public corruption in the state of Alaska. Thomas T. Anderson, a former elected member of the Alaska House of Representatives, was convicted in July 2007 and sentenced to five years in prison for extortion, conspiracy, bribery and money laundering for soliciting and receiving money from an FBI confidential source in exchange for agreeing to perform official acts to further a business interest represented by the source. Peter Kott, a former speaker of the Alaska House of Representatives, was convicted in September 2007 and sentenced to six years in prison for extortion, bribery and conspiracy. Victor H. Kohring, a former elected member of the Alaska House of Representatives, was convicted at trial in November 2007 for attempted extortion, bribery and conspiracy, and was sentenced to three and a half years in prison. In March 2008, James Clark, chief of staff to a former governor of Alaska, pleaded guilty to conspiracy to commit honest services mail and wire fraud. Former Anchorage lobbyist William Bobrick pleaded guilty in May 2007 to felony public corruption charges. U.S. Sen. Theodore F. Stevens was convicted at trial on Oct. 27, 2008, of making false statements regarding his required U.S. Senate financial disclosures for 2001 through 2006. Former Alaska businessman William Weimar was sentenced to six months in prison on Nov. 12, 2008, after pleading guilty on Aug. 12, 2008, to conspiracy to commit honest services mail and wire fraud and structuring financial transactions.
The case was prosecuted by trial attorneys Nicholas A. Marsh and Edward P. Sullivan of the Criminal Division's Public Integrity Section, headed by Chief William M. Welch, II, and Assistant U.S. Attorneys Joseph W. Bottini and James A. Goeke from the District of Alaska. The case was investigated by the FBI and the Internal Revenue Service Criminal Investigative Division.
Five Defendants Sentenced for Participation in International Child Exploitation EnterpriseRead the Press Release
WASHINGTON and PENSACOLA, Fla. – Five U.S. defendants convicted for their activity in a global child pornography trafficking enterprise were sentenced today in the Northern District of Florida, Acting Assistant Attorney General of the Criminal Division Rita M. Glavin, U.S. Attorney for the Northern District of Florida Thomas F. Kirwin and FBI Executive Assistant Director J. Stephen Tidwell announced.
The defendants had pled to multiple charges, including engaging in a child exploitation enterprise; conspiracy to advertise, transport, ship, receive and possess child pornography; advertising child pornography; transporting child pornography; and receiving child pornography.
The defendants sentenced by Senior U.S. District Judge Lacey A. Collier today were Ruble Keys of Spokane, Wash., John Mosman of Waterbury, Conn., Raymond Roy of San Juan Capistrano, Calif., Eric Wayerski of Leander, Texas, and Warren Weber of Boise, Idaho. Seven additional U.S. defendants also indicted in the case were convicted on Jan. 14, 2009, following a six-day jury trial. Those defendants will be sentenced on April 14, 2009.
According to a 40-count superseding indictment handed up on March 19, 2008, the defendants were members of a highly-sophisticated international network. The group was a well-organized criminal enterprise whose purpose was to proliferate child sex abuse images to its membership during a two-year period.
According to their plea agreements, members of the illegal organization used Internet newsgroups - large file-sharing networks where text, software, pictures and videos can be traded and shared - to traffic in illegal images and videos depicting prepubescent children, including toddlers, engaged in various sexual and sadistic acts. Specifically, an Australian constable who infiltrated the group in August 2006 testified about how group members employed a complex system of pseudonyms, screening tests for new members and sophisticated encryption methods to avoid detection. He also testified that the group traded more than 400,000 images and 1,000 videos of child sexual abuse before it was dismantled by law enforcement.
Ruble Keys was sentenced today to 204 months in prison. Keys pleaded guilty on May 6, 2008, to four counts related to his criminal activities as a member of the child exploitation enterprise. The charges alleged in these counts included engaging in a child exploitation enterprise; conspiracy to advertise, transport, ship, receive and possess child pornography; advertising child pornography; and receiving child pornography. Keys testified for the government at the January 2009 trial of co-defendants.
John Mosman was sentenced today to 164 months in prison. Mosman pleaded guilty on Dec. 18, 2008, to four counts relating to his criminal activities as a member of the child exploitation enterprise. The charges alleged in these counts included engaging in a child exploitation enterprise; conspiracy to advertise, transport, ship, receive and possess child pornography; advertising child pornography; and receiving child pornography. Mosman testified for the government at the January 2009 trial of co-defendants.
Raymond Roy was sentenced today to 360 months in prison. Roy pleaded guilty on Dec. 29, 2008, to five counts relating to his criminal activities as a member of the child exploitation enterprise. The charges alleged in these counts included engaging in a child exploitation enterprise; conspiracy to advertise, transport, ship, receive and possess child pornography; advertising child pornography; transporting child pornography; and receiving child pornography.
Eric Wayerski was sentenced today to 365 months in prison. Wayerski pleaded guilty on Aug. 13, 2008, to six counts relating to his criminal activities as a member of the child exploitation enterprise. The charges alleged in these counts included engaging in a child exploitation enterprise; conspiracy to advertise, transport, ship, receive and possess child pornography; advertising child pornography; transporting child pornography; receiving child pornography; and obstruction of justice.
Warren Weber was sentenced today to 180 months in prison. Weber pleaded guilty on April 17, 2008, to five counts relating to his criminal activities as a member of the child exploitation enterprise. The charges alleged in these counts included engaging in a child exploitation enterprise; conspiracy to advertise, transport, ship, receive and possess child pornography; advertising child pornography; transporting child pornography; and receiving child pornography. Weber testified for the government at the January 2009 trial of co-defendants.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse, launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The case is being prosecuted by Assistant U.S. Attorney David Goldberg of the Northern District of Florida and Trial Attorney LisaMarie Freitas of CEOS. The case is being investigated by the Innocent Images Unit of the FBI and the Queensland, Australia, Police Service, with the assistance of the Bundeskriminalamt (BKA) Child Pornography Unit in Germany and the Child Exploitation and Online Protection Centre in the United Kingdom.
Arizona Man Pleads Guilty to Receipt of Child PornographyRead the Press Release
WASHINGTON – Charles Brown, 54, of Mesa, Ariz., pleaded guilty today to one count of receiving child pornography, Acting Assistant Attorney General of the Criminal Division Rita M. Glavin and U.S. Attorney for the District of Arizona Diane J. Humetewa announced.
During the plea hearing before U.S. District Judge Paul G. Rosenblatt, Brown admitted to receiving child pornography. Specifically, Brown admitted to responding to an advertisement on the Internet offering child pornography for sale, and to ordering and submitting payment for a video advertised as containing child pornography involving a nine-year old. The advertisement had been placed by U.S. Postal Inspectors acting in an undercover capacity. Postal Inspectors arrested Brown on April 12, 2008, shortly after he received the video.
Brown’s sentencing has been scheduled for June 1, 2009. At sentencing, Brown will face a sentence of 60 months in prison; a fine of up to $250,000, a term of supervised release of any amount up to life, and will be required to register as a sex offender in accordance with state and federal law. As part of the plea agreement, Brown also agrees to undergo sex offender treatment and counseling as directed by the probation department.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov
The case was prosecuted by Trial Attorney James Silver of CEOS and Assistant U.S. Attorney Sharon K. Sexton of the U.S. Attorney’s Office for the District of Arizona. The U.S. Postal Inspection Service conducted the investigation.
Ali Al-Marri Transferred to U.S. Marshals Service CustodyRead the Press Release
WASHINGTON – Ali Saleh Kahlah al-Marri, 43, has been released from detention by the Secretary of Defense and is now in the custody of the U.S. Marshals Service. He is scheduled to make his initial court appearance today, the Justice Department announced.
Al-Marri was served with an arrest warrant this morning at the Naval Consolidated Brig in Charleston, South Carolina, and taken into custody by the U.S. Marshals Service. He is scheduled to make his initial appearance at 10 a.m. today before U.S. Magistrate Judge Robert S. Carr in federal court in Charleston.
On Feb. 26, 2009, a federal grand jury in the Central District of Illinois returned a two-count indictment charging al-Marri with providing material support to al-Qaeda and conspiring with others to provide material support to al-Qaeda. The public is reminded that the charges contained in an indictment are mere allegations and each defendant is presumed innocent unless and until convicted in a court of law.
The United States will seek to keep al-Marri detained pending his transfer to Illinois and his trial. After his initial court appearance today, al-Marri will remain in the custody of the U.S. Marshals Service pending his next court appearance.
Illinois Man Convicted for Production, Receipt and Possession of Child Pornography, as Well as Bank FraudRead the Press Release
WASHINGTON - Carl Courtright III, of Granite City, Ill., was convicted today on child pornography and bank fraud charges in the Southern District of Illinois following a five-day jury trial, Acting Assistant Attorney General of the Criminal Division Rita M. Glavin and U.S. Attorney for the Southern District of Illinois Courtney Cox announced.
The federal jury convicted Courtright of one count of production of child pornography, two counts of possession of child pornography, one count of receipt of child pornography, as well as one count of bank fraud.
Evidence presented at trial revealed that the investigation of Courtright began when Illinois Attorney General Lisa Madigan required social networking site MySpace.com to provide information regarding all registered sex offenders in her state who were maintaining profiles on the site. Courtright was identified as someone who had a MySpace profile, and further investigation prompted investigators to seek a search warrant for his residence.
Evidence at trial showed that when the warrant was executed, law enforcement agents discovered evidence that Courtright had produced child pornography using a local victim, downloaded and possessed child pornography on two computers, and engaged in bank fraud. The bank fraud scheme involved Courtright’s production of counterfeit checks, which were "donations" to an online ministry he maintains. Courtright deposited the counterfeit checks into an account at Regions Bank.
Courtright faces a possible mandatory life sentence. Sentencing is set for June 12, 2009.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child
Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The case was prosecuted by Assistant U.S. Attorney Nicole E. Gorovsky of the Southern District of Illinois and Trial Attorney James Silver of CEOS. The case was investigated by the Granite City, Ill., Police Department, the State of Illinois Attorney General’s Office, the U.S. Postal Inspection Service, the Illinois Internet Crimes Against Children Task Force, the Madison County, Ill., Sheriff’s Department, the Alton, Ill., Police Department, the Bethalto, Ill., Police Department, the FBI Metro East Cyber Crime Task Force, and CEOS’s High Tech Investigative Unit.
Former Lucas County, Ohio, Sheriffs Office Corrections Officer Sentenced for Civil Rights ViolationsRead the Press Release
WASHINGTON - A former corrections officer with the Lucas County, Ohio, Sheriff’s Office was sentenced today to four years in prison for violating the civil rights of inmates in his custody at the Lucas County jail, as well as private citizens on the streets of the greater Toledo area, announced Acting Assistant Attorney General Loretta King for the Civil Rights Division; U.S. Attorney William J. Edwards for the Northern District of Ohio; and C. Frank Figliuzzi, Special Agent in Charge of the FBI’s Cleveland Division.
Today in federal district court in Toledo, Ohio, Judge Jack Zouhary also sentenced the former corrections officer, Seth Bunke, to three years of supervised release following the prison term.
Bunke was convicted by a federal jury on Oct. 16, 2008, of the felony federal civil rights violations and two misdemeanor counts of deprivation of rights under color of law.
"The defendant, who was sworn to serve and protect the people of Lucas County, chose to break the law instead of enforcing it," said Acting Assistant Attorney General Loretta King. "The Department of Justice will vigorously prosecute law enforcement officers who violate individuals’ civil rights."
According to the evidence presented at trial, on June 11, 2007, Bunke, while on official duty at the jail, repeatedly kicked an inmate in the head and face, without any justification for doing so, in the presence of other corrections officers. As a result of this assault, the inmate sustained serious injuries requiring hospitalization.
In addition, trial evidence showed that Bunke unreasonably seized a vehicle driven by two local residents on March 13, 2007, and assaulted a pretrial detainee at the Lucas County jail on or about May 6, 2007.
The case was prosecuted by Special Litigation Counsel Kristy L. Parker and Trial Attorney Eric Gibson of the Criminal Section of the Civil Rights Division and by the U.S. Attorney’s Office for the Northern District of Ohio.
Former Department of Energy Employee Pleads Guilty to Falsifying Performance Evaluation for Monetary AwardRead the Press Release
WASHINGTON - A former U.S. Department of Energy (DOE) employee who falsified his performance evaluation to justify an annual performance award to which he was not entitled pleaded guilty today to one count of making false statements, announced Acting Assistant Attorney General Rita M. Glavin of the Criminal Division.
According to court documents, Amandeus Watkins, 32, was employed by DOE from November 2006 to August 2008 as the resource manager in the Office of Public Affairs. In this position, Watkins was responsible for overseeing the process through which many public affairs employees received annual performance awards.
Watkins admitted that in March 2008 he authored and submitted to DOE a performance evaluation for himself that falsely indicated he had earned the highest possible performance rating from his former supervisor in order to justify an annual performance award he had improperly arranged to receive in December 2007. According to court documents, no DOE employee, including his former supervisor, approved an annual performance award for Watkins.
The charge to which Watkins pleaded guilty carries a maximum penalty of five years in prison and a maximum fine of $250,000. Sentencing is scheduled for July 16, 2009.
This case is being prosecuted by Trial Attorney Timothy J. Kelly of the Criminal Division’s Public Integrity Section, which is headed by William M. Welch II. The case was investigated by the Office of Inspector General for the Department of Energy.
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Chief Engineer Pleads Guilty to Concealing Vessel PollutionRead the Press Release
WASHINGTON – Carmelo Oria, a Spanish citizen, who was the Chief Engineer on the Cyprus-flagged M/T Nautilus, pleaded guilty today to using falsified records that concealed improper discharges of oil-contaminated bilge water from the M/T Nautilus, the Justice Department announced.
The government’s investigation began in March 2008, when inspectors from the U.S. Coast Guard conducted an examination of the M/T Nautilus, following the ship’s arrival in St. Croix, U.S. Virgin Islands, and subsequently in the Port of Boston. The M/T Nautilus is a 26,794 gross ton chemical tanker owned by Cyprus-based Iceport Shipping Company Ltd., and operated by Spanish-based Consultores de Navegacion S.A. The inspections uncovered evidence that crewmembers aboard the ship had improperly handled and disposed of the ship’s oil-contaminated bilge water and falsified entries in the ship’s official oil record book to conceal these activities.
Engine room operations on board large oceangoing vessels such as the M/T Nautilus generate large amounts of waste oil and oil-contaminated bilge waste. International and U.S. law prohibit the discharge of waste containing more than 15 parts per million of oil and without treatment by an oily water separator—a required pollution prevention device. Law also requires all overboard discharges be recorded in an oil record book, a required log which is regularly inspected by the Coast Guard.
Oria served as the Chief Engineer aboard the M/T Nautilus between January and March 2008 and was responsible for all engine room operations. During that time, Oria ordered engine room crew members to discharge oil-contaminated bilge fluids from the ship’s bilges directly into the ocean. When the M/T Nautilus entered the Port of Boston on March 22, 2008, the ship’s log, which Oria was responsible for maintaining, failed to disclose the overboard discharge of oil-contaminated bilge water.
“Carmelo Oria ordered the ship’s crewmembers to bypass required environmental controls and pump oil-contaminated water from the ship’s bilge directly into the ocean. He then falsified the ship’s records in an attempt to conceal his actions,” said John C. Cruden, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. “As long as individuals and companies continue to bypass this nation’s environmental laws, the Justice Department will continue to bring cases and seek justice for those involved.”
“Our hope is that this case will send a strong message to those in the maritime community who might try to circumvent our nation’s anti-pollution laws. It is necessary to ensure that the companies realize that violating our environmental laws will be taken seriously, and will ultimately cost them more than legally disposing of the waste,” said Michael J. Sullivan, U.S. Attorney for the District of Massachusetts.
“The Coast Guard remains committed to working with the maritime industry and federal, state and local law enforcement partners to protect United States environmental resources from those who choose to intentionally or negligently pollute our waters”, said Rear Admiral Dale G. Gabel, Commander of the First Coast Guard District in Boston, Mass. “When violations of federal laws are uncovered in the maritime realm, the Coast Guard stands ready and able to investigate these matters thoroughly. We will continue to work with our partners to ensure all violators are prosecuted to the fullest extent of the law.”
Douglas P. Woodlock, U.S. District Judge for the District of Massachusetts, scheduled sentencing for April 13, 2009. Oria faces up to 6 years imprisonment, to be followed by three years of supervised release, and a $250,000 fine.
The case was investigated by the U.S. Coast Guard, Coast Guard Investigative Service. It was prosecuted by Assistant U.S. Attorney Linda M. Ricci of Sullivan’s Economic Crimes Unit, Special Assistant U.S. Attorney Christopher Jones of the U.S. Coast Guard First District Legal Office, and Trial Attorney Todd Mikolop of the Justice Department’s Environmental Crimes Section.
United States Joins Suit Against Community Health Systems Inc. and Three of Its Hospitals in New MexicoRead the Press Release
WASHINGTON – The United States has intervened in a whistleblower suit filed in the District of New Mexicoagainst Community Health Systems Inc. (CHS) and three of its hospitals in New Mexico: Eastern New Mexico Medical Center in Roswell, Mimbres Memorial Hospital in Deming, and Alta Vista Regional Hospital in Las Vegas. The suit alleges that CHS and its three hospitals violated the False Claims Act (FCA) by knowingly causing to be presented to the United States false claims for federal matching Medicaid funds, the Justice Department announced today.
Title XIX of the Social Security Act (the Medicaid Act) authorizes federal matching funds to the states for Medicaid programs to provide medical assistance to persons with limited income and resources. In order to ensure that state or local funds are the basis for the federal matching money, the Medicaid Act prohibits federal funding in instances where the state or county has received donations from health care providers that are related to the amount of Medicaid reimbursement paid to the provider.
The suit was filed under the qui tam or whistleblower provisions of the FCA by Robert Baker, a former revenue manager in CHS’ corporate office. Under those FCA provisions, a private party, known as a relator, can file an action on behalf of the United States and receive a portion of the recovery. Under the FCA, the United States may recover three times the amount of its losses plus civil penalties.
The relator’s complaint alleges that beginning in the summer of 2000, CHS and its three New Mexico hospitals improperly obtained federal funds through the New Mexico Sole Community Provider Fund (SCPF) and Sole Community Hospital Supplemental Payments (SCHSP) Medicaid programs. In particular, the relator alleges that CHS and its hospitals made donations to New Mexico counties which they knew would be used by the counties and the state to claim and obtain triple that amount in federal funding that was then paid to the hospitals under the SCPF and SCHSP programs. The relator alleges that CHS’ donation arrangement violated the Medicaid Act’s prohibition of provider donations that are related to the amount of Medicaid reimbursement paid to the provider.
While the qui tam action contains additional allegations, the United States is intervening only in allegations that CHS and its three New Mexico hospitals caused the submission of false claims to the United States.
The investigation was conducted by the Civil Division of the U.S. Department of Justice and the Office of Inspector General of the Department of Health and Human Services.
Two Plead Guilty to Conspiracy to File False Claims for Tax RefundsRead the Press Release
WASHINGTON - Odell Folks, a resident of Brooklyn, N.Y., and Tanya Smith, a resident of Waterbury, Conn., pleaded guilty to conspiracy to file false claims for tax refunds, the Justice Department and Internal Revenue Service (IRS) announced today. Folks also pleaded guilty to mail fraud and making a false tax return.
Folks and Tanya Smith, along with co-defendants Keith Terry and Sharon Smith, were indicted in November 2008 for a scheme to file false claims for refund with the IRS using names of clients of the New York City Human Resources Administration (HRA) and the Center for Employment Opportunities (CEO). Terry, a resident of Dallas, Ga., pleaded guilty to the false claims conspiracy and a false return charge on Jan. 29, 2009. Sharon Smith, a resident of Bronx, N.Y., is currently scheduled to begin trial on the charges on March 30, 2009.
According to the indictment and information in the plea agreements, between May 2003 and February 2005, Folks and Sharon Smith obtained names and information of HRA and CEO clients and used that information to seek refunds by filing false tax returns with the IRS. Based on the false documents, the IRS issued income tax refunds in the form of U.S. Treasury checks and mailed the refunds to false addresses. Folks and his co-conspirators obtained and cashed the refund checks. Tanya Smith and Keith Terry used their bank accounts to cash some of theTreasury checks.
According to the indictment and information in the plea agreements, Folks and Sharon Smith were employed as job counselors at CEO. HRA offers a wide range of social service programs to individuals receiving public assistance. CEO provides comprehensive employment services for persons with criminal records, including temporary jobs for individuals recently released from prison.
Judge Carol Bagley Amon of the Eastern District of New York scheduled sentencing for June 5, 2009. Folks faces a maximum sentence of 33 years in prison and a maximum fine of $750,000. Tanya Smith faces a maximum sentence of 10 years in prison and a maximum fine of $250,000. Terry is scheduled to be sentenced on April 30, 2009. He faces a maximum sentence of 13 years in prison and a maximum fine of $500,000.
John A. DiCicco, Acting Assistant Attorney General of the Justice Department’s Tax Division, commended the agents from the IRS and the U.S. Postal Inspection Service who investigated the case, as well as Tax Division trial attorney Mark F. Daly and Assistant U.S. Attorney Shreve Ariail of the Eastern District of New York, who prosecuted the case.
Two Indicted for Conspiring to Steal Trade Secrets from Goodyear Tire and Rubber CompanyRead the Press Release
WASHINGTON – An indictment was unsealed today charging Clark Alan Roberts, 46, and Sean Edward Howley, 38, both engineers with Wyko Tire Technology Inc., located in Greenback, Tenn., with conspiring to steal trade secrets from the Goodyear Tire and Rubber Company and scheming to defraud Goodyear of confidential and proprietary information, announced Acting Assistant Attorney General of the Criminal Division Rita M. Glavin and U.S. Attorney for the Eastern District of Tennessee James R. Dedrick.
Roberts and Howley were arrested this morning by federal authorities and were arraigned before U.S. Magistrate Judge Clifford Shirley.
According to the indictment, returned on March 3, 2009, Wyko secured a contract in early 2007 with the Haohau South China Guilin Rubber Company Limited (HHSC), a Chinese tire manufacturing company located in Guilin, Peoples Republic of China, to supply tire manufacturing equipment for use in producing large "off the road" (OTR) tires.
The indictment alleges that in late May 2007, Roberts and Howley traveled to a Goodyear tire manufacturing facility located in Topeka, Kan. After allegedly making material misrepresentations to Goodyear employees concerning the purpose of their visit, the defendants used a cell phone to surreptitiously photograph proprietary OTR tire manufacturing equipment. According to the indictment, the defendants later emailed the unauthorized photographs, which contained valuable trade secret information, to employees at a Wyko subsidiary located in Dudley, England, who then used the photographs to complete a similar piece of tire manufacturing machinery for the HHSC contract.
The indictment charges one count of conspiracy to commit theft of trade secrets, seven counts of theft of trade secrets, three counts of wire fraud and one count of conspiracy to commit wire fraud. If convicted of all charges, the defendants each face a maximum of 150 years in prison and $2.75 million in fines.
An indictment is merely a formal charge by the grand jury. Each defendant is presumed innocent unless and until proven guilty in a court of law.
The case is being prosecuted by Trial Attorney Thomas S. Dougherty of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney D. Gregory Weddle of the U.S. Attorney’s Office for the Eastern District of Tennessee. The case is being investigated by the FBI’s Knoxville field office.
Guilty Plea in Case of Cosco Busan Ship PilotRead the Press Release
WASHINGTON— John Joseph Cota, a California ship pilot, pleaded guilty today to negligently causing the discharge of approximately 53,000 gallons of oil into San Francisco Bay in violation of the Oil Pollution Act of 1990, a law enacted in the wake of the Exxon Valdez disaster. Cota, who piloted the M/V Cosco Busan when it hit the San Francisco Bay Bridge on Nov. 7, 2007, also pleaded guilty today to violation of the Migratory Bird Treaty Act for the death of protected migratory birds.
If the plea terms are accepted by U.S. District Court Judge Susan Illston, Cota will be sentenced to serve between two and ten months in prison and be fined between $3,000 to $30,000. The exact sentence will be determined by the court with the government reserving the right to argue for the highest sentence within this range. The plea also requires Cota to serve the maximum one year of supervised release during which he will not serve as a ship pilot or ship Captain (Master). Sentencing has been scheduled for June 19, 2009.
“Today’s guilty plea is a reminder that the Cosco Busan crash was not just an accident, but a criminal act,” said John C. Cruden, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. “This is not a case involving a mere mistake. The lesson here is that environmental stewards, who abandon ship, act negligently and cause major environmental damage will be vigorously prosecuted.”
“John Cota was an experienced ship pilot that was handsomely compensated for his special knowledge of ships and expertise in local waters. His failure to act prudently under the circumstances caused a major environmental disaster that could have been far worse,” said Joseph Russoniello, U.S. Attorney for the Northern District of California. “This case should sound an alert to those in the maritime industry that safety rules and procedures are meant to be followed, safety equipment is expected to be used, and that those who act otherwise and despoil our natural wonders will be prosecuted to the full extent of the law.”
The plea agreement contains factual admissions by Cota including: “I acknowledge that my negligence was a proximate cause of the discharge of approximately 53,000 gallons of heavy fuel oil into San Francisco Bay.” During the voyage in less than a half mile of visibility, Cota gave the helm commands that crashed the Cosco Busan into the fendering system at the base of the Delta tower of the San Francisco Bay Bridge. In the plea agreement, Cota admitted that he:
- Failed to adequately discuss the intended route through San Francisco Bay with the Master or crew as is required;
- Failed to use the ship’s radar in the final approach to San Francisco Bay Bridge;
- Failed to recognize two red triangles on the ship’s electronic chart system that actually are the buoys marking the Delta bridge tower;
- Failed to verify the meaning of the red triangles by using the ship’s paper chart or radar.
- Failed to inform the crew of his method of navigation that he relied on using a particular radar setting; and
- Failed to advise the crew of a radar beacon that marked the center of the Delta-Echo span.
The allision caused a gash measuring approximately 150 feet long by 12 feet high on the port side of the ship, puncturing two of the ship’s fuel tanks and damaging the fendering system on the Delta tower of the bridge, and resulting in a significant environmental clean-up. At least 2,000 migratory birds died, including Brown Pelicans, Marbled Murrelets and Western Grebes. The Brown Pelican is a federally endangered species and the Marbled Murrelet is a federally threatened species and an endangered species under California law.
At the hearing today, Judge Illston set trial for the remaining defendant in the case, the ship’s manager, Fleet Management Ltd. (Hong Kong), for Sept. 14, 2009. Fleet is also charged with acting negligently and being a proximate cause of the pollution and killing protected migratory birds. In addition to the environmental crime charges, Fleet is charged with obstructing justice and making false statements by falsifying ship records after the incident. An indictment is merely an accusation. All defendants are presumed innocent until proven guilty at trial beyond a reasonable doubt.
As part of the plea agreement with Cota, the government agreed to dismiss pending false statement charges relating to allegations that Cota failed to disclose his medications on required Coast Guard forms in 2006 and 2007 necessary to maintain his license, and which the court ruled would be tried separately from the case involving the Cosco Busan incident. Cota admits in the plea papers filed today that his 2006 physical exam form failed to disclose some of the medications he was prescribed including Provigil (a medication prescribed to treat sleep apnea), Lorazepam (an anti-anxiety medication that had been prescribed as a sleeping aid), Vicodin (a pain medication), Tylenol 4 (a pain medication), Darvon 65 (a pain medication), Zoloft (an anti-depressant prescribed for an off-brand purpose) and Ambien (a sleeping aid). Regarding the form he signed in 2007, Cota admits that three medications, Vicodin, Zoloft and Tylenol 4 were not disclosed to the Coast Guard. According to the plea papers, while Cota reported taking various other drugs “occasionally” on the 2007 form, he now admits that he “refilled many of these prescriptions regularly.”
The investigation is being conducted by the Coast Guard Investigative Service, the EPA Criminal Investigation Division, the Federal Bureau of Investigation, the U.S. Fish and Wildlife Service and the California Department of Fish and Game, Office of Spill Prevention and Response.
The case is being prosecuted by Assistant U.S. Attorneys Jonathan Schmidt, and Stacey Geis, Special Assistant U.S. Attorney Christopher Tribolet of the U.S. Attorney’s Office for the Northern District of California and Richard A. Udell, Senior Trial Attorney with the Justice Department’s Environmental Crimes Section.
Under the Crime Victims’ Rights Act, crime victims are afforded certain statutory rights including the opportunity to attend all public hearings and provide input to the prosecution. Those adversely impacted by the oil spill are encouraged to visit http://www.usdoj.gov/usao/can/community/Notifications/index.html to learn more about the case and the Crime Victims’ Rights Act.
Former Staff Member in U.S. House of Representatives Indicted on Corruption ChargesRead the Press Release
WASHINGTON – A grand jury in the District of Columbia returned a three-count indictment today charging a former staff member in the U.S. House of Representatives with corruption offenses, Acting Assistant Attorney General Rita M. Glavin of the Criminal Division announced. Fraser C. Verrusio, 39, was charged by the grand jury with conspiring to accept an illegal gratuity, accepting an illegal gratuity, and making a false statement in failing to report his receipt of gifts from a lobbyist and the lobbyist’s client on his 2003 financial disclosure form.
According to the indictment, during the relevant times, Verrusio worked as the policy director for the U.S. House of Representatives Committee on Transportation and Infrastructure. The indictment names Todd Boulanger and James Hirni, who were lobbyists working for an equipment rental company interested in inserting three amendments into a Federal Highway Bill, as Verrusio’s co-conspirators. The indictment also names Trevor Blackann, who worked as a legislative assistant to a U.S. senator, as a co-conspirator. According to the indictment, the committee for which Verrusio worked had responsibility for the Federal Highway Bill in the House of Representatives. Similarly, the indictment states that the senator for whom Blackann worked served on a committee with responsibility for the Federal Highway Bill in the Senate.
According to the indictment, in October 2003, Verrusio and Blackann accepted an all-expenses-paid trip to Game One of the 2003 Baseball World Series from Hirni, the equipment rental company that was his client, and a representative of that company. The indictment alleges that Verrusio accepted the trip for and because of his official assistance provided and to be provided to the equipment rental company’s efforts to secure favorable amendments to the Federal Highway Bill.
According to the indictment, the all-expenses-paid trip accepted by Verrusio and Blackann included round-trip commercial airline travel to and from New York City; use of a chauffeured sport utility vehicle for transportation while in New York City; a ticket for each official to Game One of the World Series; a souvenir baseball jersey for each official; as well as lodging, meals, drinks and entertainment at a strip club. The indictment alleges that, while on the trip, Verrusio, Blackann, Hirni and the equipment rental company representative discussed the Federal Highway Bill and the equipment rental company.
The indictment also alleges that federal law required Verrusio to report his receipt of gifts valued at more than $285 per year from a single source on a 2003 annual financial disclosure form. The indictment alleges that Verrusio made a false statement on that form when he certified that the form was, "true, complete and correct," when in truth and in fact Verrusio knew and believed the form to be incomplete and incorrect in that it did not identify Hirni and the equipment rental company as the source of a reportable gift, did not describe the World Series trip or any of its reportable parts, and did not report the value of the trip or any of its reportable parts.
Blackann, Boulanger and Hirni have all pleaded guilty for their roles. The case is part of the ongoing investigation into the activities of former lobbyist Jack Abramoff and his associates. Eighteen individuals, including lobbyists and public officials, have pleaded guilty or are awaiting trial as a result of the investigation, including Abramoff, who was sentenced in September 2008 to 48 months in prison.
This case is being prosecuted by trial attorneys M. Kendall Day and Peter C. Sprung of the Public Integrity Section, headed by Section Chief William M. Welch II. The investigation is being conducted by the FBI.
An indictment is merely an allegation. Defendants are presumed innocent unless and until proven guilty in a court of law.
Indictment
Attorney General Holder Announces Recovery Act Allocations for Byrne Justice Assistance Grant ProgramRead the Press Release
WASHINGTON – U.S. Attorney General Eric Holder joined President Obama in Columbus, Ohio today at the Columbus Police Graduation Exercises to announce $2 billion in Recovery Act 2009 funding allocations for state and local law enforcement and criminal justice assistance available through the Edward Byrne Justice Assistance Grant (JAG) Program. In January, 25 Columbus police recruits learned that they would be let go rather than sworn-in; but because of Recovery Act JAG funds these police officers will keep their jobs protecting their community.
"This funding is key to helping our states and local governments fight crime and keep our streets safe," said Attorney General Holder. "The Department of Justice is moving ahead of schedule to allocate these resources so we can retain police officers, enhance law enforcement capabilities, and ensure that we have the tools and equipment necessary to build safer communities."
JAG Program funds can be used for a variety of efforts such as hiring law enforcement officers; supporting drug and gang task forces; funding crime prevention and domestic violence programs; and supporting courts, corrections, treatment, and justice information sharing initiatives. The breakdown of JAG allocations for states, territories, and units of local government can be viewed here: http://www.ojp.usdoj.gov/BJA/recoveryJAG/recoveryallocations.html.
The procedure for allocating JAG grants is based on a formula of population and violent crime statistics, in combination with a minimum allocation to ensure that each state and territory receives an appropriate share of funding. Sixty percent of the allocation is awarded directly to a state and 40 percent is set aside for units of local government. Funding will be used by states and more than 5,000 local communities to enhance their ability to protect communities and combat crime.
The Recovery Act includes more than $4 billion overall to assist state, local and tribal law enforcement and for other criminal justice activities that help to prevent crime and improve the criminal justice system in the United States while supporting the creation of jobs and much needed resources for states and local communities.
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60th Felony Conviction Obtained in Software Piracy Crackdown Operation FastlinkRead the Press Release
WASHINGTON – The 60th felony conviction from Operation Fastlink, a major Department of Justice initiative to combat online piracy worldwide, was announced today by Acting Assistant Attorney General of the Criminal Division Rita M. Glavin and Acting U.S. Attorney Nora R. Dannehy of the District of Connecticut.
Bryan Thomas Black, 30, of Waterloo, Ill., pleaded guilty today to one count of conspiracy to commit criminal infringement of a copyright for his involvement in a multinational software piracy organization that was targeted by investigators as part of "Operation Fastlink," an internationally coordinated 18-month investigation. Black will be sentenced by the Honorable Ellen Bree Burns on May 26, 2009, at which time he faces up to five years of in prison, a fine of $250,000 and three years of supervised release.
In pleading guilty today, Black admitted that, for nearly four years, he was a participant in the "warez scene," an underground online community made up of individuals and organized groups who engage in the large scale reproduction, modification and distribution of copyrighted software through the Internet. In the warez scene, Black served as the person who would obtain new video game releases and circumvent the digital copyright protections so that the software could then be reproduced and distributed on the Internet. Black also admitted that during the course of the conspiracy, he downloaded thousands of pirated copies of copyrighted works from various Web sites, known as warez sites, knowing that his and his co-conspirators’ actions were unlawful.
Operation Fastlink has resulted in more than 120 search warrants executed in 12 countries; the confiscation of hundreds of computers and illegal online distribution hubs; and the removal of more than $50 million worth of illegally copied software, games, movies and music from illicit distribution channels. Operation Fastlink is the culmination of multiple FBI undercover investigations targeting individuals involved in the illegal reproduction and distribution of movies, games, business software and music.
Operation Fastlink was conducted by the FBI, including the New Haven Field Office in coordination with the U.S. Attorney’s Office for the District of Connecticut and the Criminal Division’s Computer Crime and Intellectual Property Section (CCIPS). This case was prosecuted by Assistant U.S. Attorney Edward Chang and Senior Counsel Clement McGovern of CCIPS.
U.S. Asks Courts in California & South Carolina to Shut Down Promoters of Allegedly Fraudulent $39.2 Million Tax Refund ScamRead the Press Release
WASHINGTON — The United States has sued tax return preparers in Placerville, Calif., and Columbia, S.C., seeking to bar them from preparing federal tax returns for others, the Justice Department announced today. According to the government complaints in the two cases, Teresa Marty of Pollock Pines, Calif., and Winston Able of Blythewood, S.C., prepare federal income tax returns for their customers that claim fraudulent tax refunds. The government alleges that Marty prepared one tax return claiming a $2.7 million fraudulent refund for one customer.
The complaints allege that Able and Marty both employ a tax fraud scheme that uses fabricated IRS Forms 1099-OID to report fictitious tax withholding on their customers’ returns and then claim refunds of huge amounts. The complaints against Marty and Able allege that the scheme is part of a growing trend among tax protesters to file frivolous tax returns and forms in an attempt to escape their federal tax obligations and steal from the U.S. Treasury.
The complaints allege that while the IRS detects and stops most fraudulent refund claims, Marty’s fraudulent tax return preparation has resulted in the IRS’s issuance of at least $6.9 million in erroneous payments to her customers. The government alleges that the total amount of fraudulent refunds requested on the returns Marty prepared or filed in 2008 was approximately $26.2 million and the total amount of fraudulent refunds requested on the returns Able prepared or filed was over $13 million.
Customers who participate in this tax fraud scheme may be subject to sizeable penalties for filing returns with excessive refund claims —including a penalty equal to 20% of the amount improperly claimed. The penalty applies even if, as usually happens, the IRS detects the false claim and blocks a tax refund. Thus a taxpayer improperly claiming a $2 million refund could be liable for a $400,000 penalty as well as other penalties and possible criminal prosecution.
"The actions announced today are another example of the government’s nationwide efforts to shut down tax fraud schemes and unscrupulous tax return preparers," said John A. DiCicco, Acting Assistant Attorney General for the Justice Department’s Tax Division. "Taxpayers foolish enough to consider participating in this illegal scheme should consider that, in addition to risking criminal prosecution, they also risk incurring civil penalties that could cause them to lose their homes and their savings."
"Taxpayers should steer clear of any situation involving fabricating tax forms or reporting fictitious tax withholding," said IRS Commissioner Doug Shulman. "These schemes carry a high price for promoters and for taxpayers. We aggressively pursue unscrupulous tax return preparers involved in such scams. Taxpayers should remember they are ultimately responsible for what’s on their tax returns. If a promoter’s sales pitch sounds too good to be true, be sure to check it out first."
In the last decade, the Justice Department has obtained injunctions against more than 375 tax return preparers and tax-fraud promoters. Information about these cases is available on the Justice Department Web site.
Two UK Citizens Charged by United States with Bribing Nigerian Government Officials to Obtain Lucrative Contracts as Part of KBR Joint Venture SchemeRead the Press Release
WASHINGTON – Two citizens of the United Kingdom have been charged in an indictment unsealed today in the United States for their alleged participation in a decade-long scheme to bribe Nigerian government officials to obtain engineering, procurement and construction (EPC) contracts, Acting Assistant Attorney General Rita M. Glavin of the Criminal Division announced. The EPC contracts to build liquefied natural gas (LNG) facilities on Bonny Island, Nigeria, were valued at more than $6 billion.
Jeffrey Tesler, 60, of London, England, and Wojciech Chodan, 71, of Maidenhead, England, were indicted on Feb. 17, 2009, in U.S. District Court for the Southern District of Texas. The defendants are each charged with one count of conspiracy to violate the Foreign Corrupt Practices Act (FCPA) and ten counts of violating the FCPA. The indictment also seeks forfeiture of more than $130 million from the defendants. At the request of the United States, Tesler was arrested by the London Metropolitan Police today. There is an outstanding arrest warrant in the United States for Chodan. The Justice Department is seeking the defendants’ extradition from the United Kingdom to the United States to stand trial.
According to the indictment, Tesler was hired in 1995 as an agent of a four-company joint venture that was awarded four EPC contracts by Nigeria LNG Ltd., (NLNG) between 1995 and 2004 to build LNG facilities on Bonny Island. The government-owned Nigerian National Petroleum Corporation (NNPC) was the largest shareholder of NLNG, owning 49 percent of the company. Chodan was a former salesperson and consultant of a United Kingdom subsidiary of Kellogg, Brown & Root Inc. (KBR), one of the four joint venture companies. At so-called "cultural meetings," Chodan and other co-conspirators allegedly discussed the use of Tesler and other agents to pay bribes to Nigerian government officials to secure the officials’ support for awarding the EPC contracts to the joint venture.
According to the indictment, the joint venture hired Tesler to bribe high-level Nigerian government officials, including top-level executive branch officials, and another agent to bribe lower level Nigerian government officials, including employees of NLNG. At crucial junctures before the award of the EPC contracts, KBR’s former CEO, Albert "Jack" Stanley, and others allegedly met with three successive former holders of a top-level office in the executive branch of the Nigerian government to ask the office holder to designate a representative with whom the joint venture should negotiate the bribes. Stanley and others allegedly negotiated bribe amounts with the office holders’ representatives and agreed to hire Tesler and the other agent to pay the bribes. The joint venture entered into a series of consulting contracts with a Gibraltar corporation allegedly controlled by Tesler to which the joint venture paid approximately $132 million for Tesler to use to bribe Nigerian government officials. On behalf of the joint venture and the four joint venture companies, Tesler allegedly wire transferred bribe payments to or for the benefit of various Nigerian government officials, including officials of the executive branch, NNPC, NLNG, and for the benefit of a political party in Nigeria.
If convicted on all charges, each defendant faces a maximum prison sentence of 55 years.
An indictment is merely a charge and defendants are presumed innocent until proven guilty.
In a related criminal case, KBR’s successor company, Kellogg Brown & Root LLC, pleaded guilty in February 2009 to charges related to the FCPA for its participation in the scheme to bribe Nigerian government officials. Kellogg Brown & Root LLC was ordered to pay a $402 million fine and to retain an independent compliance monitor for a three-year period to review the design and implementation of its compliance program as well as make reports to the company and the Department of Justice.
Stanley pleaded guilty in September 2008 to conspiring to violate the FCPA for his participation in the bribery scheme. Stanley’s sentencing is currently scheduled for Aug. 27, 2009.
The case is being prosecuted by Senior Trial Attorneys William J. Stuckwisch and Patrick F. Stokes of the Criminal Division’s Fraud Section, with investigative assistance from the FBI and IRS-Criminal Investigation in Houston. The Criminal Division’s Office of International Affairs provided substantial assistance. Significant assistance was provided by the SEC’s Division of Enforcement and by the authorities in France, Italy, Switzerland and the United Kingdom, including in particular the Serious Fraud Office’s Anti-Corruption Unit, the London Metropolitan Police and the City of London Police.
Indictment
Justice Department Sues Henry County, Ill., for Sexual Harassment of Former EmployeeRead the Press Release
WASHINGTON - The Department of Justice today filed a lawsuit in U.S. District Court for the Central District of Illinois against Henry County, Ill., alleging that former employee Michelle Baze was sexually harassed by her supervisor, in violation of Title VII of the Civil Rights Act of 1964. Title VII prohibits discrimination in employment on the basis of sex, race, color, national origin or religion.
The complaint alleges that Baze’s former supervisor in the Henry County Animal Control Department subjected her to sexual harassment, including unwanted physical contact of a sexual nature and inappropriate sexual comments, during the course of her employment as a secretary. The complaint alleges that Henry County had been aware that the same supervisor had sexually harassed Baze’s predecessor, but failed to take action to prevent him from harassing Baze.
"Title VII ensures that women can participate in the workplace free of harassment based on sex," said Loretta King, Acting Assistant Attorney General for the Justice Department’s Civil Rights Division. "The Department of Justice will actively pursue cases against employers who fail to take adequate steps to prevent and correct sexual harassment."
The Department of Justice is committed to the vigorous enforcement of 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.
Justice Department Sues Harrison County, Ind., Sheriff for Sexual Harassment and RetaliationRead the Press Release
WASHINGTON - The Department of Justice today filed a lawsuit against Harrison County Sheriff George Michael Deatrick, in his official capacity, alleging that he discriminated against current employee Deana Decker and former employee Melissa Graham, in the form of sexual harassment that resulted in a hostile work environment, and retaliation, in violation of Title VII of the Civil Rights Act of 1964. The Harrison County Board of Commissioners and the Harrison County Council, which fund the Sheriff’s Department, also are named as defendants in the lawsuit filed in U.S. District Court in the Southern District of Indiana.
Title VII prohibits discrimination in employment on the basis of sex, race, color, national origin or religion. It also prohibits retaliation against an employee who opposes an unlawful employment practice, or because the employee has made a charge or participated in an investigation, proceeding or hearing under the Civil Rights Act.
"It is important for employers to understand that Title VII protects women from sexual harassment in the workplace," said Acting Assistant Attorney General Loretta King for the Civil Rights Division. "The Department of Justice will vigorously pursue cases when employers engage in, or fail or refuse to take appropriate action to stop sexual harassment in the workplace."
The complaint alleges that Sheriff Deatrick subjected Decker and Graham to sexual harassment by, among other things, touching them in a sexual and offensive manner and making sexually-charged comments to them. After Decker and Graham filed discrimination charges against Deatrick with the Equal Employment Opportunity Commission, the complaint alleges that Deatrick retaliated against them by brandishing a gun and staring at them in order to intimidate and frighten them.
The Civil Rights Division is committed to the vigorous enforcement of Title VII. More information about Title VII and other federal employment laws is available on the Civil Rights Division’s Web site at: http://www.usdoj.gov/crt/emp/index.html.
Former U.S. Tax Court Official Sentenced for Engaging in a Conspiracy to Commit BriberyRead the Press Release
WASHINGTON – A former official of the U.S. Tax Court was sentenced today in connection with a bribery conspiracy involving contracts at the U.S. Tax Court in the District of Columbia, Acting Assistant Attorney General Rita M. Glavin of the Criminal Division announced.
Fred Fernando Timbol Jr., 43, of Mount Airy, Md., was sentenced by Judge Ricardo M. Urbina of the U.S. District Court for the District of Columbia to 18 months in prison and three years of supervised release. Timbol pleaded guilty on Aug. 14, 2008, to one count of conspiracy. As part of the plea agreement and by order of the court, Timbol also agreed to pay restitution in the amount of $24,142.99.
According to court documents, Timbol was a facilities services officer in the Facilities Management Section of the U.S. Tax Court. In that position, Timbol was responsible for assisting in the award of contracts to contractors who provided maintenance, construction and other related services to the U.S. Tax Court. Between July 2005 and April 2006, Timbol admitted he solicited and personally accepted at least $12,471 from a government contractor in exchange for rigging the award of at least six inflated contracts at the U.S. Tax Court.
The case was prosecuted by Trial Attorneys Daniel A. Petalas, Richard B. Evans and Peter M. Koski of the Public Integrity Section, headed by Section Chief William M. Welch II. The case was investigated jointly by the General Services Administration Office of the Inspector General and the FBI.
Fairfield, Calif., Couple Indicted on Federal Civil Rights Charge for Alleged Bias-Motivated AssaultRead the Press Release
WASHINGTON – A Fairfield, Calif., couple was indicted today by a federal grand jury in Sacramento, Calif., on federal civil rights charges related to an alleged bias-motivated assault on an Indian-American couple, announced Acting Assistant Attorney General Loretta King of the Civil Rights Division and Acting U.S. Attorney Lawrence G. Brown for the Eastern District of California.
The two-count indictment alleges that on the evening of July 14, 2007, Joseph and Georgia Silva committed a bias-motivated assault on another couple at a public beach in South Lake Tahoe, Calif. The Silvas allegedly first verbally confronted the Indian-American couple using derogatory racial and ethnic slurs. The Silvas then allegedly assaulted the couple, including striking one of the victims with a shoe and tackling and striking the other repeatedly on the head. One victim suffered significant facial injuries including fractured facial bones.
If convicted of both counts of the indictment, Joseph and Georgia Silva each face a maximum prison sentence of 20 years and a fine of up to $500,000. An indictment is merely an accusation, and the defendants are presumed innocent unless proven guilty.
The FBI’s Sacramento Division is investigating this matter. The case is being jointly prosecuted by Assistant U.S. Attorney Benjamin Wagner of the U.S. Attorney’s Office for the Eastern District of California and Trial Attorney Douglas Kern of the Justice Department’s Civil Rights Division.
The Civil Rights Division is committed to the vigorous enforcement of federal criminal civil rights statutes, including laws that prohibit race-motivated acts of violence that interfere with federally protected activities.
N.J. Industrial Pipes Supply Company and Its Co-Owner Plead Guilty to Fraud at Two N.J. Superfund SitesRead the Press Release
WASHINGTON — A Middlesex, N.J., industrial pipes, valves and fittings supply company and its co-owner pleaded guilty today to participating in a fraud conspiracy at two U.S. Environmental Protection Agency (EPA)-designated Superfund sites in New Jersey, the Department of Justice announced today. The sites are Federal Creosote, located in Manville, N.J., and Diamond Alkali, located in Newark, N.J.
National Industrial Supply LLC (NIS) and its co-owner, Victor Boski, pleaded guilty in the U.S. District Court of New Jersey today. Each pleaded guilty to participating in a conspiracy to defraud the EPA at the Federal Creosote site and to defraud Tierra Solutions Inc. at the Diamond Alkali site from approximately December 2000 to approximately September 2004. Tierra Solutions is a general contractor based in The Woodlands, Texas. According to the plea agreement, NIS and Boski have agreed to cooperate with the Department’s ongoing investigation. Sentencing for NIS and Boski will be determined by the court.
"Companies and individuals who shortchange taxpayers by subverting the competitive bidding process will be held accountable," said Scott D. Hammond, Acting Assistant Attorney General in charge of the Department’s Antitrust Division.
As part of the conspiracy, Boski provided approximately $55,000 in kickbacks to Norman Stoerr, a former contracts administrator of the prime contractor at both Superfund sites, and Stoerr’s former superior in exchange for the award of sub-contracts to NIS. According to the charges, Boski, NIS, Stoerr and Stoerr’s former superior fraudulently inflated the prices of the sub-contracts to include the cost of the kickbacks.
The cleanup at the Federal Creosote site is partly funded by the EPA. An interagency agreement between the EPA and the U.S. Army Corps of Engineers designated that the EPA hire prime contractors to oversee the remedial action at the Federal Creosote site, which included the purchase of industrial pipes, valves and fittings. At Diamond Alkali, Tierra Solutions was required to fund the remedial action and maintenance of the Superfund site, according to the EPA and the New Jersey Department of Environmental Protection. Tierra Solutions hired the prime contractor for the remedial action and maintenance of Diamond Alkali.
On July 23, 2008, Stoerr pleaded guilty to bid-rigging, fraud and tax charges related to both Superfund sites. Simultaneous with Stoerr’s plea, JMJ Environmental Inc., a Laurel Springs, N.J., wastewater treatment supply company, and its owner, John Drimak Jr., pleaded guilty to bid-rigging, fraud and tax charges related to both sites. Sentencing for Stoerr, JMJ Environmental and Drimak is scheduled for May 18, 2009. Bennett Environmental Inc. (BEI) also pleaded guilty to participating in a conspiracy to defraud the EPA at the Federal Creosote site and was sentenced on Dec. 15, 2008, to pay a $1 million criminal fine. Zul Tejpar, a former BEI employee, pleaded guilty to participating in a conspiracy to provide kickbacks and defraud the EPA at the Federal Creosote site on Dec. 15, 2008. Sentencing is scheduled for Sept. 28, 2009. On Feb. 26, 2009, Christopher Tranchina, an employee of a Sewell, N.J. company that provided temporary electrical utilities, pleaded guilty to participating in a conspiracy to provide kickbacks and defraud the EPA at Federal Creosote.
NIS and Boski are charged with conspiracy to commit fraud, a violation of which carries a maximum fine of $500,000 for NIS and, for Boski, a maximum penalty of five years in prison and a $250,000 fine. The maximum fines for each defendant may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.
Today’s charges reflect the Department’s commitment to protecting U.S. taxpayers from procurement fraud through its creation of the National Procurement Fraud Task Force. The National Procurement Fraud Initiative, announced in October 2006, is designed to promote the early detection, prosecution and prevention of procurement fraud associated with the increase in contracting activity for national security and other government programs.
The ongoing investigation is being conducted by the Antitrust Division’s New York Field Office, the EPA Office of Inspector General and the Internal Revenue Service Criminal Investigation. Anyone with information concerning bid rigging, kickbacks, tax offenses or fraud relating to subcontracts awarded at the Federal Creosote and/or the Diamond Alkali sites should contact the Antitrust Division’s New York Field Office at 212-264-9308.
Justice Department Sues Large Multi-Family Housing Developer Alleging Disability-Based Housing DiscriminationRead the Press Release
WASHINGTON– The Justice Department filed a lawsuit today against JPI Construction L.P. (JPI) and six JPI-affiliated companies in U.S. District Court in Dallas for failing to provide accessible features required by the Fair Housing Act and the Americans with Disabilities Act at multi-family housing developments in Texas and other states.
Since 1991, when the Fair Housing Act first required most new multi-family housing to contain accessible features, JPI and its affiliates have built more than 200 apartment, condominium and other housing complexes in 26 states and the District of Columbia.
"Persons with physical disabilities should have the same housing choices as other persons," said Loretta King, Acting Assistant Attorney General for the Civil Rights Division. "We will continue to pursue vigorously those who still have not gotten the message that failing to design and construct multi-family housing with basic features of accessibility violates the law."
The Fair Housing Act prohibits discrimination in housing on the basis of race, color, religion, sex, familial status, national origin and disability. According to the complaint, the defendants failed to design and construct accessible dwelling units and public and common use areas at Jefferson Center Apartments in Austin, Texas; Jefferson at Mission Gate Apartments in Plano, Texas; and additional multi-family housing complexes in other states. According to the complaint, certain complexes designed and constructed by the defendants have inaccessible steps and curbs leading to units, steeply sloped routes leading to units, and no accessible routes to site amenities, including inaccessible trash facilities, barbeque grills and cookout tables. In addition, certain housing units have narrow doors and hallways; kitchens that lack accessible clear floor space at the sinks, ranges and refrigerators; bathrooms that lack accessible clear floor space at the toilets and tubs; and thermostats that are mounted too high to be accessible to a person using a wheelchair.
The lawsuit seeks a court order requiring the defendants to modify the complexes to bring them into compliance with federal laws and prohibiting future discrimination by the defendants. The lawsuit also seeks monetary damages to compensate victims and a civil penalty to be paid to the government.
Fighting illegal housing discrimination is a top priority of the Justice Department. More information about the Civil Rights Division and the laws it enforces is available at http://www.usdoj.gov/crt. Additional information about the Fair Housing Act is also available at www.HUD.gov. Individuals who believe that they may have been victims of housing discrimination can call the Housing Discrimination Tip Line at 1-800-896-7743, e-mail the Justice Department at [email protected], or contact the U.S. Department of Housing and Urban Development at 1-800-669-9777.
The complaint is an allegation of unlawful conduct. The allegations must still be proven in federal court.
Justice Department Settles Lawsuit Against Stimson Lumber Company to Enforce the Employment Rights of Oregon ReservistRead the Press Release
WASHINGTON - The Department of Justice announced today that it has entered into a consent decree with Stimson Lumber Company (Stimson) that, if approved by the court, will resolve the Department’s complaint, also filed today, that Oregon-based Stimson failed to reemploy Oregon reservist David Eckhardt in violation of the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA).
USERRA was enacted in 1994 to protect service members from being disadvantaged in their civilian careers due to serving in the uniformed services. Subject to certain limitations, USERRA requires that individuals who leave their jobs to serve in the U.S. military be timely reemployed by their civilian employers in the same position, or a comparable position, to the position that they would have held had they not left to serve in the military.
The Department’s complaint, filed in U.S. District Court in Portland, Ore., alleges that Stimson violated USERRA by failing or refusing to promptly reemploy David Eckhardt upon his return from military service in the Naval Reserves. In March 2007, Eckhardt attended a required military training program. After a short recovery period from an injury sustained during his military training obligation, Eckhardt contacted Stimson in April 2007 to seek reemployment as a boiler operator. The complaint alleges that Stimson failed or refused to reemploy Eckhardt, notifying him that the company had hired another individual to replace him. Under the terms of the consent decree, Stimson is required to provide remedial relief to Eckhardt in the form of an undisclosed monetary payment. Stimson is also prohibited from retaliating against persons who exercise their rights under USERRA.
"No person should lose his civilian job for choosing to serve in the military," said Loretta King, Acting Assistant Attorney General for the Civil Rights Division. "The Department demonstrates again with this settlement that it is committed to vigorously enforcing federal laws that protect the employment rights of men and women who are serving in the military. We are pleased that Stimson has chosen to resolve this lawsuit and abide by the requirements of USERRA."
The Civil Rights Division has given a high priority to the enforcement of service members’ rights under USERRA. Additional information about USERRA can be found on the Justice Department Web sites: http://www.servicemembers.gov and www.usdoj.gov/crt/emp .