District Not Recorded
The source did not name an office we could identify. These records remain unassigned rather than guessed.
Justice Department Settles Lawsuit on Behalf of Kansas Air Force ReservistRead the Press Release
WASHINGTON – The Justice Department today announced a settlement that, if approved by the court, will resolve allegations in a lawsuit the Department filed on behalf of Randall A. Slocum, an Air Force Reservist, against the city of Iola, Kan.
The complaint, filed in U.S. District Court in Kansas City, Kan., in December 2008, alleged that the city of Iola violated the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA) by taking into consideration Slocum’s military service obligations when it disciplined him and denied him a wage increase. USERRA was enacted in 1994 to protect service members from being disadvantaged in their civilian careers due to serving in the uniformed services. Among other things, USERRA prohibits employers from discriminating against service members because of their military service obligations.
Under the terms of the settlement, the city is required to pay Slocum back wages, liquidated damages, and to provide him the wage increase the city denied him based on his military service. The settlement also requires the city to correct its employment records to remove references of Slocum’s unjustified discipline based on military service.
"The settlement reached today continues this nation’s commitment to service members who sacrifice to serve this country. The agreement demonstrates that reservists should be allowed to serve without fear of being penalized in their civilian careers," said Loretta King, Acting Assistant Attorney General for the Civil Rights Division. "The Civil Rights Division is committed to vigorously enforcing federal laws that protect the employment rights of men and women who are serving in our nation’s military."
The Department of Justice filed the lawsuit after receiving Slocum’s complaint from the Veterans’ Employment and Training Service of the Department of Labor, upon completion of its investigation and settlement efforts.
The Department’s Civil Rights Division places a high priority on the enforcement of service members’ rights under USERRA. Additional information about USERRA can be found on the Department of Justice Web site at the following link: http://www.servicemembers.gov, and on the Department of Labor Web site at the following link: http://www.dol.gov/vets/programs/userra/main.htm.
Final Defendant Pleads Guilty to Anti-Obama AssaultsRead the Press Release
WASHINGTON - Ralph Nicoletti pleaded guilty in Brooklyn, N.Y., federal court today before U.S. District Judge Carol B. Amon to committing three assaults targeting African-American residents in Staten Island, N.Y., on the night of President Barack Obama’s election victory. Nicoletti was the last of four defendants to plead guilty in the federal prosecution stemming from the attacks. The other three defendants – Bryan Garaventa, Michael Contreras and Brian Carranza – previously pleaded guilty to conspiring to commit the hate crime assaults and each face sentences of up to 10 years in prison. As part of his plea, Nicoletti has agreed to a sentence of 12 years, subject to the court’s approval.
The guilty plea was announced by Loretta King, Acting Assistant Attorney General for the Department of Justice’s Civil Rights Division; Benton J. Campbell, U.S. Attorney for the Eastern District of New York; Joseph M. Demarest, Jr., Assistant Director-in-Charge, FBI, New York Field Office; and Raymond W. Kelly, Commissioner, New York City Police Department.
At the plea proceeding, Nicoletti admitted that on Nov. 4, 2008, the night of the presidential election, the defendants decided to assault African-Americans in Staten Island after President Obama was declared the winner of the election. The defendants targeted African-Americans believing that they had voted for President Obama. Nicoletti drove the group to the Park Hill section of Staten Island, a predominantly African-American neighborhood, where they came upon an African-American teenager and assaulted him. Nicoletti struck the teenager with a metal pipe and Garaventa hit him with a collapsible police baton.
Nicoletti then drove to the Port Richmond section of Staten Island, where the defendants assaulted an unidentified African-American man. During that assault, Garaventa tripped the victim and pushed him to the ground.
The third assault was against an individual whom the defendants mistakenly believed was African-American. The plan was for Contreras to hit the victim with the police baton as the defendants drove by him. Instead, Nicoletti deliberately drove his car into the victim’s body. The victim was thrown onto the hood of the car and hit the front windshield, smashing it. The victim was seriously injured and remained in a coma for several weeks after the attack.
"This successful prosecution sends a clear message that racially-motivated acts of violence targeted at those who are exercising their right to vote are intolerable and will be aggressively investigated and prosecuted," said Acting Assistant Attorney General King. "It is a tragedy that these crimes occur at all, but the Department of Justice will remain vigilant in our efforts to combat hate crimes, as they tear at the very fabric of our great nation."
"The conduct of the defendants is shocking and deplorable," stated U.S. Attorney Campbell. "On a night of historic significance, these four angry men assaulted their victims in an attempt to punish them for exercising a fundamental right of all Americans – the right to vote. Those who commit such crimes will be swiftly apprehended, prosecuted and punished. We are grateful for our partnership with the Department of Justice Civil Rights Division, the FBI and the New York City Police Department, which has been vital to the success of this case, and I particularly wish to thank the Richmond County District Attorney’s Office for its assistance in this matter."
"The crimes these defendants have now admitted to were violent assaults that in one case nearly killed a man," said FBI Assistant Director-in-Charge Demarest of the New York Field Office. "In attempting to intimidate voters, the defendants also violated the victims’ civil rights in a way that was an attack on the democratic process. These were serious crimes that prompted the serious response the FBI will always bring to bear in civil rights enforcement."
"It was important to make certain that those who seriously injured individuals, based on their race, did not escape justice," said Police Commissioner Raymond W. Kelly. "NYPD Inspector Michael J. Osgood, Commanding Officer of the NYPD Hate Crime Task Force, had the foresight to assign a special team on Election Night until 4 a.m. the next morning. As a result, his investigators were in position to respond quickly to the bias attacks as reports of them began to emerge. Detectives located an eyewitness to one of the attacks, and their subsequent distribution of flyers in the Rosebank area of Staten Island over three days led to the first major break in the case. I also want to thank the FBI agents who helped, and the federal prosecutors who succeeded in winning the guilty pleas."
The government’s case is being prosecuted by Assistant U.S. Attorneys Pamela K. Chen and Margo K. Brodie, and Department of Justice Special Litigation Counsel Kristy Parker.
Brothers Plead Guilty to Conspiring to Steal Military Optics from U.S. Marine Corps and Export Them OverseasRead the Press Release
WASHINGTON – Timothy Oldani, 24, of Scott Depot, W.Va., and Joseph Oldani, 21, of Camp Lejeune, N.C., both pleaded guilty today in the Southern District of West Virginia to conspiring to steal military optics from the U.S. Marine Corps and illegally export them from the United States, the Justice Department announced.
At his hearing, Joseph Oldani admitted that while on active duty with the U.S. Marine Corps, he stole high-grade optics from his station in Kings Bay, Ga. Timothy, Joseph’s brother, is a former member of the U.S. Marine Corps reserves. Joseph admitted he transported the stolen optics to Timothy, in Scott Depot, where Timothy subsequently sold the stolen items on the Internet – mainly on eBay.
The convictions stem from a joint investigation conducted by the U.S. Department of Defense, Office of Inspector General -- Defense Criminal Investigative Service and by U.S. Immigration and Customs Enforcement.
The stolen optics are not the type available for public purchase, but are specially designed for military purposes. In fact, these stolen optics are on the U.S. Munitions List and subject to presidential control as defense articles prohibited from export without a special license. Neither Oldani had a license.
The investigation revealed that the Oldanis sold and shipped the stolen optics to purchasers in Hong Kong, Japan and Taiwan.
The duo each face up to 60 months in prison and a $250,00 fine when they are sentenced on May 18, 2009. Assistant U.S. Attorney Steven I. Loew is handling the prosecution in coordination with the Counterespionage Section of the Justice Department’s National Security Division .
Justice Department Settles Lawsuit Alleging Gender Discrimination and Retaliation by the Puerto Rico Police DepartmentRead the Press Release
WASHINGTON — The Department of Justice today announced that it has reached a consent decree with the Policía de Puerto Rico (Puerto Rico Police Department or PRPD) that will, if approved by the federal district court, resolve a complaint the Department filed in March 2008 alleging that the PRPD engaged in unlawful employment discrimination based on gender and retaliation, in violation of Title VII of the Civil Rights Act. Title VII prohibits employment discrimination on the basis of race, color, sex, national origin and religion, and also prohibits retaliation against persons for filing charges of discrimination.
The U.S. government alleged in its March 2008 complaint that the PRPD discriminated against Officer Jeannette Caraballo Lopez (Caraballo) on the basis of her sex by, among other ways, requiring her to perform secretarial tasks not required of male officers and by subjecting her to sexually discriminatory comments. For example, while working as an agent-investigator in the Division of Investigation of Stolen Vehicles for the Fajardo Area, she was told that the Division was, "not for females," or words to that effect, in violation of Title VII. The complaint also alleged that the PRPD retaliated against Officer Caraballo because she opposed employment practices that she reasonably believed to be unlawful, and because she filed a charge with the Equal Employment Opportunity Commission under Title VII. The complaint further alleged that the PRPD retaliated against Officer Manuel Bonilla Carrasquillo (Bonilla) because he opposed employment practices that he reasonably believed to be unlawful.
Under the terms of the consent decree, the PRPD will offer monetary awards totaling $125,000, including attorney’s fees, to the two officers. Officer Caraballo also will be offered reinstatement to an agent-investigator position with remedial seniority and related benefits and compensation. Officer Bonilla, who retired in September 2007, will be offered all the benefits and compensation to which he would have been entitled had he remained in his previous position without interruption until his retirement. The PRPD will also provide training on equal employment opportunity law, including discrimination based on gender and retaliation, to all supervisors in the Fajardo Area.
"We are pleased that the PRPD has agreed to resolve this case by entering into an appropriate consent decree," said Loretta King, Acting Assistant Attorney General for the Civil Rights Division. "The law does not allow employers to discriminate against women by only allowing them to perform duties that have been traditionally deemed ‘female’ assignments, or to retaliate against employees because they participate in an employment discrimination investigation."
The enforcement of Title VII continues to be a priority of the Justice Department’s Civil Rights Division. Additional information about the Civil Rights Division of the Justice Department is available on its Web site at http://www.usdoj.gov/crt/.
Former Shipping Executive Sentenced to 48 Months in Jail<br /> for His Role in Antitrust ConspiracyRead the Press Release
WASHINGTON — A former high-level shipping executive was sentenced today to serve 48 months in jail and to pay a $20,000 criminal fine for his role in an antitrust conspiracy involving the transportation of goods to and from the continental United States and Puerto Rico by ocean vessel, the Department of Justice announced today. This is the longest jail sentence ever imposed for a single antitrust charge.
Peter Baci of Jacksonville, Fla., pleaded guilty on Oct. 20, 2008, in the U.S. District Court in Jacksonville for his role in the conspiracy, which began at least as early as May 2002 and continued until as late as April 2008. Baci was charged with engaging in a conspiracy to suppress and eliminate competition in the coastal water freight transportation services between the continental United States and Puerto Rico by agreeing to allocate customers, agreeing to rig bids submitted to government and commercial buyers, and agreeing to fix the prices of rates, surcharges, and other fees charged to customers.
Related antitrust charges remain pending in the U.S. District Court in Jacksonville against three other shipping executives: R. Kevin Gill and Gregory Glova, of Charlotte, N.C. and Gabriel Serra, of San Juan, Puerto Rico. A related obstruction of justice charge is also pending against a fifth shipping executive, Alexander Chisholm, of Jacksonville.
"Today’s sentencing should make clear that individuals who violate the antitrust laws will be prosecuted to the fullest extent of the law," said Scott D. Hammond, Acting Assistant Attorney General in charge of the Department’s Antitrust Division. "Significant jail time will be a consequence of harming consumers and competition in both the continental United States and Puerto Rico."
Baci worked for a large U.S. company that provides freight shipping services to customers transporting goods between the continental United States and Puerto Rico. These companies transport a variety of cargo shipments, such as heavy equipment, medicine, food and consumer goods. Sales of freight services in the United States to Puerto Rico shipping lane total hundreds of millions of dollars every year, as ocean shipping is a primary way for people in Puerto Rico to receive essential goods.
In June 2004, Congress raised the maximum sentence for antitrust crimes from three years imprisonment to 10 years imprisonment. While longer jail sentences have been imposed against individuals who violated the antitrust laws together with other crimes, this case represents the first time that an individual was sentenced to more than three years for a single antitrust charge.
The current prosecution and pending charges arose from an ongoing federal antitrust investigation into bid rigging and other anticompetitive conduct in the shipping industry, which is being conducted by the National Criminal Enforcement Section of the Antitrust Division and the Jacksonville Field Office of the Federal Bureau of Investigation (FBI). Anyone with information concerning the focus of this investigation is urged to call the Antitrust Division’s National Criminal Enforcement Section at 202-307-6694, or the FBI’s Jacksonville Field Office at 904-721-1211.
Former Mendenhall, Miss., Police Chief Pleads Guilty to Using Excessive ForceRead the Press Release
WASHINGTON – Jimmy "Jimbo" Sullivan, the former chief of police in Mendenhall, Miss., pleaded guilty today to a felony civil rights violation, admitting that he used excessive force when he repeatedly stomped on the head of an arrestee, Acting Assistant Attorney General Loretta King for the Civil Rights Division and U.S. Attorney Dunn Lampton for the Southern District of Mississippi announced.
On July 22, 2005, Sullivan joined other law enforcement officers in the apprehension of a man who had led police on a car chase. Today in court, Sullivan admitted that at the end of the car chase, he pulled the man from his car and then repeatedly stomped on the man’s head as the man lay face-down in the street. A local hospital treated the man for injuries sustained during the assault.
"The defendant, who was sworn to serve and protect the people, went from enforcing the law to breaking the law," said Acting Assistant Attorney General Loretta King. "The Department of Justice will continue to prosecute vigorously those law enforcement officers who abuse their power by willfully using excessive force."
The case was investigated by the Jackson office of the FBI, and was prosecuted by Trial Attorney Patti Sumner of the Justice Department’s Civil Rights Division and Assistant U.S. Attorney Glenda Haynes of the Southern District of Mississippi.
Former Lobbyist Pleads Guilty to Conspiracy to Commit Honest Services FraudRead the Press Release
WASHINGTON – A former lobbyist pleaded guilty today to conspiring with others to commit honest services fraud, Acting Assistant Attorney General Rita M. Glavin of the Criminal Division announced.
Todd A. Boulanger, 37, pleaded guilty before U.S. District Judge Richard W. Roberts in the District of Columbia. According to court documents, Boulanger worked as a lobbyist from 1999 through 2004 with Jack Abramoff and others. Boulanger, Abramoff, and other lobbyists working with them, sought to advance the interests of groups and companies they represented by lobbying federal legislative and executive branch officials. According to court documents, Boulanger admitted that he, Abramoff and others established contacts with federal legislative and executive branch officials who could use their influence and positions to take official actions favorable to Boulanger and the other lobbyists. After establishing contacts with certain public officials, Boulanger admitted that he, Abramoff, and others offered and gave numerous things of value to these public officials in an effort to reward them for actions they had taken, to influence the public officials in their official actions, and to make them more receptive to requests for official actions in the future.
Boulanger admitted that the things of value he and others provided as part of this conspiracy included all-expenses-paid travel, tens of thousands of dollars-worth of tickets to professional sporting events, concerts and other events, and frequent and expensive meals and drinks at Washington, D.C.-area restaurants and bars. According to court documents, the public officials, in turn, agreed to take and took favorable official actions, which included the insertion or protection of legislative appropriations; the insertion, protection, removal or prevention of legislative amendments; and lobbying by the public officials of other legislative and executive branch officials to take or abstain from taking official action. According to court documents, Boulanger admitted that he, Abramoff and others attempted to conceal their practice of providing things of value to public officials.
Specifically, according to the plea agreement, Boulanger sought the assistance of a staff member who worked on the U.S. House of Representatives, Committee on Transportation and Infrastructure. One of Boulanger’s clients was an equipment rental company, on whose behalf Boulanger and another lobbyist, James Hirni, sought to have two legislative amendments inserted into the Federal Highway Bill in 2003. Boulanger admitted that, with his knowledge and approval, Hirni and another individual provided an all-expenses-paid trip on Oct. 18 and 19, 2003, to game one of the Baseball World Series in New York City to the committee staff member and to Trevor Blackann, a former staff member to a U.S. Senator. On Oct. 22, 2003, Boulanger and Hirni provided information about the amendments they were seeking to the committee staff member and Blackann. Later, after one of the amendments had been inserted into the Senate version of the Federal Highway Bill, Boulanger, Hirni, Blackann, the committee staff member and another individual took steps to protect that amendment
Boulanger also admitted that he and others provided a stream of things of value to a different Senate staff member in order to influence that individual to take official action favorable to Boulanger’s lobbying firm and one of Abramoff’s Native American tribal clients. From March 2002 through March 2004, Boulanger and others provided more than $25,000 worth of tickets, meals and drinks to the Senate staff member. During the same time period, the Senate staff member provided and agreed to provide official actions sought by Boulanger and others on repeated occasions. In addition, Boulanger admitted that he provided more than $10,000 worth of tickets, meals and drinks to the legislative director for a U.S. Senator. Boulanger admitted he met the legislative director on July 16, 2002, and provided the things of value for 20 months following their first meeting.
The case is part of the ongoing investigation into the activities of former lobbyist Jack Abramoff and his associates. Abramoff pleaded guilty in January 2006 to conspiracy to commit honest services fraud, honest services fraud and tax evasion. Abramoff was sentenced in September 2008 to 48 months in prison and is cooperating in the investigation. Both Hirni and Blackann have pleaded guilty for their roles in the scheme and are cooperating with the investigation. In all, seventeen individuals, including lobbyists and public officials, have pleaded guilty, been convicted at trial, or are awaiting trial as a result of the investigation.
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.
Former Employees of Emergency Vehicle Vendors Sentenced for Conspiring to Defraud Employers on Homeland Security ContractRead the Press Release
WASHINGTON – Two Florida homeland security vendor employees were sentenced today for conspiracy to commit wire fraud and honest services fraud by depriving their employers of money and the right of honest services, the Department of Justice announced today.
Luis M. Candelario, a former sales representative for JPS Communications Inc., was sentenced to serve 18 months in jail. Thomas E. Vander Luitgaren (Vander), a former general manager of AK Specialty Vehicles LLC (AKSV), was sentenced today to serve 18 months of home confinement except for employment and four years probation. Candelario and Vander were ordered to pay jointly $238, 371 in restitution to JPS and $11,050 in restitution to Advanced Vehicle Systems LLC, a subcontractor of AKSV. Candelario and Vander were convicted of the charges on Oct. 1, 2008, following a two-week trial.
Candelario and Vander originally were indicted on Dec. 5, 2007, in U. S. District Court in Orlando, Fla., for participating in a kickback scheme with Angel L. Rodriguez-Vasquez (Rodriguez-Vasquez), a former sales representative for Fisher Scientific International LLC, to defraud their respective employers. The kickback scheme involved federal emergency vehicle contracts with the U.S. Virgin Islands government. According to the charges, the scheme began in September 2003 and continued through July 2005. Rodriguez-Vasquez pleaded guilty to participating in the conspiracy in October 2007 and is awaiting sentencing.
"Today’s sentencing demonstrates that those who seek to enrich themselves by engaging in kickback schemes designed to defraud their employers will be held accountable," said Scott D. Hammond, Acting Assistant Attorney General of the Department’s Antitrust Division.
"American taxpayers deserve honesty from those who serve them," General Services Administration Inspector General Brian Miller said. "Contractors who defraud the government will be punished."
This ongoing investigation is being conducted by the Antitrust Division’s Atlanta Field Office in conjunction with the General Services Administration’s Office of Inspector General (New York Field Office) and the U.S. Attorney’s Office for the Middle District of Florida. Anyone with information concerning price fixing, bid rigging or kickback schemes involving homeland security contracting in the Southeast United States, Virgin Islands, or Puerto Rico should contact the Atlanta Field Office of the Antitrust Division at 404-331-7100.
Eight Charged with Illegally Harvesting and Selling Striped BassRead the Press Release
WASHINGTON— Five commercial fishermen in St. Mary’s County, Md., a fish wholesaler, its owner and an employee have been charged in Maryland and Washington, D.C., for their role in the illegal harvest, sale, and purchase of hundreds of thousands of pounds of striped bass from the Chesapeake Bay and Potomac River from 2003 through 2007, the Justice Department announced today.
According to the criminal informations, the individuals and corporation have been charged with violating the Lacey Act, which is a federal law that prohibits individuals or corporations from creating false records for fish or wildlife, and from transporting, selling, or buying fish and wildlife harvested illegally. Specifically, the informations allege that the commercial fishermen transported and sold striped bass, knowing that they had falsely recorded on their permit allocation cards the numbers and weight of the striped bass they caught and failed to accurately record the times when the fish were actually harvested.
Individuals charged include:
- Thomas L. Crowder Jr. of Leonardtown, Md.
- John W. Dean of Scotland, Md.
- Charles Quade of Churchtown, Md.
- Thomas L. Hallock of Catharpin, Va.
- Keith A. Collins of Deale, Md.
- Robert Moore Sr. of Falls Church, Va.
- Robert Moore Jr. of Ashburn, Va.
The company charged is Cannon Seafood Inc., located in Washington, D.C., with Robert Moore Sr., as its owner.
Two additional St. Mary’s County commercial fishermen were indicted in October 2008 for similar conduct. Joseph Peter Nelson and Joseph Peter Nelson, Jr., are charged in the District of Maryland in a seven count felony indictment, alleging one count of felony conspiracy to violate the Lacey Act, and six substantive felony Lacey Act counts. The indictment also seeks forfeiture of vessels and vehicles allegedly used by the Nelsons in carrying out the offenses. The indictment alleges that from September 2003 through March 2007 the defendants exceeded their quota of Maryland striped bass by failing to check in all the fish they caught and by falsely inflating the numbers of fish that they allegedly checked-in in order to secure additional Maryland tags. It also alleges that the defendants placed Maryland tags on fish that were not caught in that state’s regulated waters, and placed tags on fish that falsely indicated that they were caught by hook and line when they were not. The indictment further alleges that the Nelsons engaged in a series of sales of unlawfully caught fish to undercover agents who were posing as out of state fish wholesalers.
In early spring each year, wild coastal striped bass (Morone saxatilis), known regionally as rockfish, enter the estuary or river where they were born to spawn, and then return to ocean waters to live, migrating along the coastline. Fish spawned from the Chesapeake Bay ecosystem contribute the greatest number of striped bass to the Atlantic coastal fishery, and the commercial fishery for Atlantic coastal striped bass is based primarily on migrations of fish born in the Chesapeake Bay area. Striped bass do not die after spawning. They may live up to 30 years and reach 50 pounds or more. The population of coastal Atlantic striped bass depends heavily upon the capability of older, larger, female striped bass to successfully reproduce.
Maryland regulates the commercial catch of striped bass from its waters and enforces the regulations of the Potomac River Fisheries Commission, which regulates the commercial catch of striped bass from Maryland waters located in the main stem of the Potomac River. The striped bass management and protection measures, including tagging requirements, closed seasons, size limits, and quota amounts, are focused on maintaining a target spawning stock to protect the fishery from over-fishing. Maryland also requires that all fish caught by a commercial fisherman be weighed and counted at a designated state check-in station, with the total number and total weight of the fish caught recorded on the commercial fisherman’s permit allocation card and transmitted to the state of Maryland on a check station daily catch reporting sheet.
A criminal information and indictment are not a finding of guilt. An individual charged by criminal information or indictment is presumed innocent unless and until proven guilty in a court of law.
The Lacey Act carries a maximum penalty of 5 years imprisonment and a fine of up to $250,000, plus the potential forfeiture of the vessels and vehicles used in committing the offense.
The charges are a result of the investigation by an interstate task force formed by the U.S. Fish and Wildlife Service, the Maryland Natural Resources Police and the Virginia Marine Police, Special Investigative Unit in 2003. The task force conducted undercover purchases and sales of striped bass in 2003, engaged in covert observation of commercial fishing operations in the Chesapeake Bay and Potomac River area, and conducted detailed analysis of area striped bass catch reporting and commercial business sales records from 2003 through 2007. The investigation is continuing, and charges against others are possible.
These cases are being prosecuted by Senior Trial Attorney Wayne Hettenbach of the Justice Department’s Environmental Crimes Section, and Assistant U.S. Attorney Stacy Belf of the U.S. Attorney’s Office for the District of Maryland with assistance from the U.S. Attorneys’ Office for the District of Columbia.
Justice Department Sues Ypsilanti, Mich., Landlords for Sexual HarassmentRead the Press Release
WASHINGTON — The Justice Department today filed suit against Ronald D. Peterson and Glen E. Johnson, the owner and rental manager, respectively, of 11 single family homes in Ypsilanti, Mich., alleging a pattern or practice of sexual harassment of female tenants.
The complaint, filed today in U.S. District Court for the Eastern District of Michigan, alleges that Johnson subjected female tenants to discrimination on the basis of sex, including severe, pervasive and unwelcome sexual harassment. The complaint alleges that Johnson made unwanted verbal sexual advances, entered the apartment of female tenants without permission or notice, granted and denied tangible housing benefits based on sex, and took adverse action against female tenants when they refused or objected to his sexual advances. The complaint also alleges that Peterson, the owner of the properties, is liable for Mr. Johnson’s alleged misconduct, and that he knew or should have known of Johnson’s alleged misconduct but failed to take reasonable preventive or corrective measures. This case is being handled jointly by the Civil Rights Division of the Department of Justice and the U.S. Attorney’s Office for the Eastern District of Michigan in Detroit.
"No woman should have to live in fear of sexual harassment in her home," said Acting Assistant Attorney General Loretta King. "Landlords should be on notice that the Justice Department vigorously enforces the Fair Housing Act throughout the United States."
Acting U.S. Attorney, Terrence Berg added: "The conduct alleged in today’s complaint is unacceptable – as well as a violation of our federal fair housing laws. We are taking action because no one should face such inappropriate harassment in their own homes."
The suit seeks monetary damages for victims, civil penalties and a court order barring future discrimination. Individuals who are or have been tenants in properties owned or managed by Peterson or Johnson who believe they may be victims of sexual harassment, or who have other relevant information about the case, are encouraged to call the Department of Justice’s tip line at 1-800-896-7743 and leave a message in Box 994 or email the Department at [email protected]. They may also call the United States’ Attorney’s Office at 313-226-9727.
Fighting illegal housing discrimination is a top priority of the Justice Department. The Federal Fair Housing Act prohibits discrimination in housing on the basis of race, color, religion, sex, familial status, national origin and disability. More information about the Civil Rights Division and the laws it enforces is available at http://www.usdoj.gov/crt. Additional information about the Fair Housing Act is also available at www.HUD.gov.
The complaint is an allegation of unlawful conduct. The allegations must still be proven in federal court.
Justice Department Settles Allegations of Disability and Religious Discrimination Against Nashville, Tenn.Read the Press Release
WASHINGTON - The Justice Department today announced a settlement resolving allegations that the Metropolitan Government of Nashville and Davidson County (Metropolitan Government) violated the Fair Housing Act (FHA) and the Religious Land Use and Institutionalized Persons Act (RLUIPA) by discriminating against Teen Challenge, a Christian substance abuse treatment program.
In a federal lawsuit filed in September 2008, the U.S. government alleged that the Metropolitan Government discriminated against individuals with disabilities in violation of the FHA and imposed a substantial burden on religious exercise in violation of RLUIPA. According to the complaint filed by the U.S. government, the Metropolitan Government denied Teen Challenge a building permit to operate in Goodlettsville, Tenn., and amended its zoning code in a manner that prevented Teen Challenge from using the property. The settlement resolves the U.S. government’s claims as well as a related lawsuit filed by Teen Challenge and participants in Teen Challenge’s program.
"Cases like this show how the FHA and RLUIPA work together to ensure that persons with disabilities are not discriminated against and that religious groups seeking to aid those persons can operate without unjustifiable burdens," said Loretta King, Acting Assistant Attorney General for the Civil Rights Division.
"Discrimination of the type alleged in this case should never be tolerated by a free society," said U. S. Attorney Ed Yarbrough following the settlement. "Substance abuse programs perform a valuable service to persons suffering from addiction." he added.
The settlement, which must still be approved by the court, requires the Metropolitan Government to train nearly 100 employees and officials who make zoning and land use decisions on the requirements of the FHA and RLUIPA, to appoint a compliance officer to receive complaints and ensure compliance with the settlement, and to provide periodic reports to the Justice Department. As part of the settlement, the Metropolitan Government rescinded the amendment to its zoning code that affected Teen Challenge and adopted a reasonable accommodation policy for individuals with disabilities.
The Metropolitan Government will also pay a $20,000 civil penalty to the United States and $50,000 to participants in Teen Challenge’s program. Monetary relief to Teen Challenge is being determined by the final court order in the related case of Teen Challenge International, Nashville Headquarters, et al. v. Metropolitan Government of Nashville and Davidson County.
More information about the Civil Rights Division and the laws it enforces is available at http://www.usdoj.gov/crt. Individuals who believe that they may have been victims of housing discrimination can call the Housing Discrimination Tip Line at 1-800-896-7743, email the Justice Department at [email protected], or contact the U.S. Department of Housing and Urban Development at 1-800-669-9777.
Justice Department Files Lawsuit on Behalf of North Dakota Army National Guard MemberRead the Press Release
WASHINGTON — The Department of Justice today filed a lawsuit on behalf of Suzanne L. Halverson, an Army National Guard member, against Grand Forks County, N.D., alleging violations of the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA), which prohibits employers from discriminating against service-members because of their past, current or future military service obligations.
The Department’s complaint, filed in the U.S. District Court in Grand Forks, alleges that Grand Forks County violated USERRA by taking into consideration Ms. Halverson’s military service obligations when it denied her promotion to a permanent juvenile detention officer position in the county’s correctional center.
"Our men and women in uniform must be able to serve their country without fear of being penalized in their civilian careers," said Loretta King, Acting Assistant Attorney General for the Civil Rights Division. "The Justice Department remains committed to vigorously enforcing federal laws that protect the employment rights of men and women who are serving in our nation’s military."
The Department of Justice filed the lawsuit after receiving Ms. Halverson’s complaint from the Veterans’ Employment and Training Service of the Department of Labor (DOL), once DOL’s investigation and settlement efforts were complete.
The Department’s Civil Rights Division places a high priority on the enforcement of service-members’ rights under USERRA. In 2008, the Civil Rights Division’s Employment Section filed a record high number of USERRA suits. Additional information about USERRA can be found on the Department of Justice Web site at the following link: http://www.servicemembers.gov, and on the DOL Web site at: http://www.dol.gov/vets/programs/userra/main.htm.
Imprisoned Spy and His Son Indicted on Charges of Actingas Russian Agents and Money LaunderingRead the Press Release
WASHINGTON -- A federal indictment was unsealed today in U.S. District Court for the District of Oregon charging Harold James Nicholson, 58, of Sheridan, Ore., and Nathaniel James Nicholson, 24, of Eugene, Ore., with two counts of Conspiracy, one count of Acting as Agents of a Foreign Government, and four counts of Money Laundering.
Both defendants are scheduled to appear today at 1:30 p.m. before U.S. Magistrate Janice M. Stewart for arraignment on the indictment. The maximum penalty for the substantive charge of acting as an agent of a foreign government is ten years imprisonment, while the maximum penalty for conspiracy to act as an agent of a foreign government is five years imprisonment. Each money laundering count, including the money laundering conspiracy, carries a maximum of twenty years imprisonment. The indictment also seeks forfeiture of funds provided to Nathaniel J. Nicholson by the Russian Federation, which the indictment alleges are the proceeds of his father’s past espionage activities.
As set forth in the indictment, Harold J. Nicholson, a former CIA employee, is serving a 283-month (more than 23-year) sentence at the Federal Correctional Institution in Sheridan, Ore., for a 1997 conviction of conspiracy to commit espionage. The indictment further alleges that defendant Harold J. Nicholson, working through his son Nathaniel J. Nicholson, received cash proceeds of his past espionage activities from, and passed information to, agents of the Russian Federation between 2006 and 2008.
As described in the indictment, during the course of the conspiracy, Nathaniel J. Nicholson met with his father Harold J. Nicholson on several occasions to obtain information that was intended to be provided to the Russian Federation. Defendant Nathaniel J. Nicholson then travelled to various places to meet with representatives of the Russian Federation, including San Francisco, Calif.; Mexico City, Mexico; Lima, Peru; and Cyprus, where he collected money from them and received additional instructions. Defendant Nathaniel J. Nicholson then brought the funds he received back to Oregon to disperse to family members at the direction of his imprisoned father.
The indictment further alleges that the funds paid by the Russian Federation to defendant Nathaniel J. Nicholson represented proceeds of his father’s past espionage activities. For more information, please refer to the indictment and search warrant affidavit.
- http://www.usdoj.gov/usao/or/PressReleases/2009/NicholsonIndictment.pdf
U.S. Attorney for District of Oregon, Karin J. Immergut stated, "The conduct alleged in the indictment shows a sinister and continuing scheme by a former senior CIA officer turned spy to betray the United States of America for financial gain. Thanks to the continued vigilance of the FBI, and the extraordinary cooperation of the Bureau of Prisons, we expect to hold a former spy, and the son who joined him in his criminal conduct, responsible for their actions."
Matthew G. Olsen, Acting Assistant Attorney General for National Security, said, "Today’s indictment alleges that an imprisoned spy recruited and trained his own 24-year-old son to travel the globe to collect on past spying debts and channel information to foreign agents. These charges underscore the continuing threat posed by foreign intelligence services and should send a clear message to others who would consider selling out their country for money."
"Harold James Nicholson, already convicted of spying and compromising national security, thought he could profit from his previous espionage despite being behind bars," said Executive Assistant Director Arthur M. Cummings, II, of the FBI National Security Division. "Now, along with his son, he again acted against the interests of the United States, according to the charges."
"This is an amazing case," said David Ian Miller, Special Agent in Charge of the FBI in Oregon. "Harold James Nicholson, a convicted spy, was allowed to serve time in a federal prison in Oregon to be near his family. Without regret, he used that proximity to his family to continue contact with the foreign country for which he was previously convicted of spying."
The FBI and the Federal Bureau of Prisons investigated this case. Assistant U. S. Attorneys Pamala Holsinger and Ethan Knight are prosecuting this case. Trial Attorney Patrick Murphy of the Counterespionage Section of the Justice Department’s National Security Division is also assisting.
An indictment is only an accusation of a crime, and a defendant should be presumed innocent unless and until proven guilty.
Former NFL Player, Ex-Casino Owner and Nevada Businessman Indicted in Massive Tax Fraud SchemeRead the Press Release
WASHINGTON - A Las Vegas federal grand jury has returned an indictment charging Alan Rodrigues, a former pit boss and casino owner from Henderson, Nev.; Weston Coolidge, a businessman from Las Vegas; and Joseph Prokop, a former National Football League punter from Upland, Calif., with a tax fraud scheme for their promotion of a fraudulent tax product through the now defunct National Audit Defense Network (NADN), the Justice Department and Internal Revenue Service (IRS) announced today.
The defendants were charged with one count of conspiracy to defraud the United States, 15 counts of aiding in the preparation of false tax returns, and five counts of mail fraud for their part in the scheme. According to the indictment, Rodrigues was NADN’s general manager, Coolidge was NADN’s chairman and president and Prokop was the national marketing director of Oryan Management and Financial Services. It is alleged that Oryan Management and Financial Services is a sole proprietorship, operating in Upland, Calif., that paid NADN a commission to sell Tax Break 2000.
According to the indictment, in early 2001, NADN began selling Tax Break 2000, a shopping Web site that the defendants fraudulently stated would allow customers to claim legitimate income tax credits and deductions under the Americans with Disabilities Act of 1990 (ADA) and the Internal Revenue Code. NADN allegedly marketed its services nationwide through radio advertisements and promotional appearances on talk radio programs. The indictment further alleges that, from 2001 through 2004, the defendants caused NADN to sell Tax Break 2000 approximately 21,610 times to customers around the country. Throughout the scheme, Tax Break 2000 was also known as tb2000.com, shopn2000.com and mallforall.com.
According to the indictment, Tax Break 2000 was an attempt to abuse a provision of the ADA that provides a "disabled access credit" to help offset necessary, reasonable expenditures made by eligible small businesses to comply with the ADA’s requirement that their facilities be accessible to disabled persons. The indictment alleges that these expenditures include amounts paid to remove architectural barriers, to remove communication barriers, to provide interpreters, to acquire or to modify equipment, or to provide other similar services, modifications, materials or equipment.
The indictment further alleges that the defendants defrauded the United States and their customers in a number of ways. Some of the ways alleged in the indictment included creating Tax Break 2000 as a Web site that was not accessible to the disabled so that they could sell modifications that purported to make it accessible to the disabled; falsely telling customers that purchasing the modifications entitled them to a lawful income tax credit and deduction for having made their Web sites accessible to the disabled; and choosing the sale price for the modifications, $10,475.00, solely to maximize the fraudulent income tax credits and deductions.
Additionally, the indictment alleges the defendants induced customers to sign supposed promissory notes for approximately 80% of the $10,475.00 purchase price of the modifications, when they had no expectation that the customers would make payments on the promissory notes; paying attorneys to write favorable opinion letters about Tax Break 2000 to refute a legal memorandum in which NADN’s own tax experts determined that Tax Break 2000 was illegal and could subject those who sold it to criminal penalties; creating false IRS Forms 1099 to create the appearance that customers’ Web sites were generating commission income and that the purported promissory notes were being paid off; and preparing false tax returns on their customers’ behalf.
On April 13, 2004, the Justice Department’s Tax Division filed a complaint seeking to enjoin, among others, NADN, Rodrigues, Coolidge and Prokop from selling fraudulent tax schemes, including Tax Break 2000. NADN ceased operations in May 2004. In June 2004, a federal bankruptcy court in Las Vegas entered a permanent injunction against NADN. Prokop was also enjoined in June 2004, after consenting to entry of a permanent injunction. In April 2005, Rodrigues and Coolidge both consented to permanent injunctions.
An indictment is merely a formal charge by the grand jury. Each defendant is presumed innocent unless and until proven guilty in U.S. District Court. If convicted, the defendants face maximum potential sentences of 150 years in prison and millions of dollars in fines.
The case is being prosecuted by Tax Division trial attorneys Jay R. Nanavati and Timothy J. Stockwell. The case was investigated by the IRS, Criminal Investigation Division.
Additional information about the Justice Department’s Tax Division and its enforcement efforts may be found at http://www.usdoj.gov/tax. Additional information about tax fraud schemes to watch out for may be found on the IRS Criminal Investigation Web site http://www.ustreas.gov/irs/ci/.
Owner of Pharmaceutical Wholesale Company Pleads Guilty to Medicare FraudRead the Press Release
WASHINGTON – The owner and operator of HME Solutions Inc., dba Lifecare Medical (Lifecare Medical), a licensed pharmaceutical wholesale company in Miami, pleaded guilty today to defrauding the Medicare program in connection with a $5.3 million HIV-infusion fraud scheme, Acting Assistant Attorney General Rita M. Glavin of the Criminal Division and U.S. Attorney R. Alexander Acosta of the Southern District of Florida announced.
Harold Sio, 33, pleaded guilty to conspiracy to commit healthcare fraud and conspiracy to commit money laundering before U.S. District Judge Ursula Ungaro in Miami. At the plea hearing, Sio admitted that between August 2004 and November 2006, he conspired with Juan A. Marrero and Orlando Pascual Jr., the owners of Medcore Group LLC (Medcore), to commit health care fraud and launder the proceeds of that health care fraud.
In his plea, Sio admitted that he supplied pharmaceuticals to Marrero and Pascual for the purpose of committing Medicare fraud. Sio also admitted providing invoices that documented huge quantities of pharmaceuticals, which were received by Medcore, when in fact he only delivered small amounts. Sio acknowledged that he accepted payment from Marrero and Pascual then returned cash to them so that the cash could ultimately be used to pay patients. Marrero and Pascual pleaded guilty in January 2009 to Medicare fraud and are scheduled for sentencing on April 3, 2009. Sio is scheduled to be sentenced on March 24, 2009.
In pleading guilty, Marrero and Pascual both admitted that they falsely billed Medicare more than $5.3 million for unnecessary infusion treatments. Both Marrero and Pascual acknowledged that all the patients who received injections or infusions at Medcore were paid cash kickbacks to induce them to visit to the clinic.
Marrero and Pascual acknowledged that clinic employees intentionally manipulated patients’ blood samples to make the patients’ need for treatment appear legitimate, when in fact it was not, as well as to make the patients' medical files appear legitimate. According to court documents, physicians, a physician's assistant and phlebotomists, were used by Marrero and Pascual to help facilitate the scheme.
Four co-defendants in the case are scheduled for trial beginning Feb. 23, 2009, in the Southern District of Florida. An indictment is merely a charge, and defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt.
The case was prosecuted by Deputy Chief Kirk Ogrosky, Assistant Chief John S. (Jay) Darden, and Trial Attorney Charles Reed of the Criminal Division’s Fraud Section and investigated by the Department of Health and Human Services, Office of the Inspector General and FBI. The case was brought as part of the Medicare Fraud Strike Force (MFSF), supervised by the Criminal Division’s Fraud Section and U.S. Attorney Acosta of the Southern District of Florida. Since the inception of MFSF operations, federal prosecutors have indicted 106 cases with 190 defendants in both Los Angeles and Miami. Collectively, these defendants fraudulently billed the Medicare program for more than half a billion dollars.
Three Men Indicted for Racially-Motivated Church Arson in Springfield, Mass.Read the Press Release
WASHINGTON – Three individuals were indicted today by a federal grand jury in the District of Massachusetts for conspiring to interfere with the civil rights of members of the Macedonia Church of God in Christ, a Springfield, Mass., church with a predominantly African-American congregation.
The indictment was announced by Loretta King, Acting Assistant Attorney General for the Civil Rights Division; U.S. Attorney Michael J. Sullivan for the District of Massachusetts; Glenn N. Anderson, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives - Boston Field Division; Warren T. Bamford, Special Agent in Charge of the FBI’s Boston Field Office; Colonel Mark Delaney, Superintendent of the Massachusetts State Police; William Bennett, Hampden County District Attorney; and Commissioner William J. Fitchet of the Springfield Police Department.
The church’s newly constructed building burned to the ground on Nov. 5, 2008, hours after the election of President Barack Obama. The indictment alleges that Benjamin Haskell, 22, Michael Jacques, 24, and Thomas Gleason, 21, all of Springfield, conspired to burn the church in retaliation for the election of the country’s first African-American president.
"These allegations of racial violence connected with the presidential election are serious and disturbing," said Acting Assistant Attorney General Loretta King. "The Justice Department will aggressively prosecute individuals who conspire to commit such acts of violence and intimidation."
The indictment alleges that several hours after Barack Obama was elected President, Haskell, Jacques and Gleason conspired to burn the Macedonia Church of God in Christ’s new under-construction church building, which was 75 percent complete at the time of the fire. According to the indictment, on Election Night, Haskell, Jacques and Gleason used racial slurs and expressed anger with the election of Barack Obama and discussed burning the Macedonia Church of God in Christ’s new church building because the church members, congregants and bishop were African-American. They then obtained gasoline, poured it on the interior and exterior of the new church building and started a fire that destroyed nearly the entire structure. Some of the responding firefighters suffered injuries as they worked to extinguish the blaze.
"Racism has devastating effects on individuals, and stifles the quality of life in the community," said U.S. Attorney Sullivan. "We will not tolerate those who victimize others and I am angered and saddened that the neighborhood has endured such cruel acts by those allegedly living in the same community."
If convicted, Haskell, Jacques and Gleason face a maximum prison sentence of 10 years to be followed by three years of supervised release. The details contained in the indictment are allegations. The defendants are presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
The case is being investigated by the FBI; Bureau of Alcohol, Tobacco, Firearms and Explosives; Massachusetts State Police; Hampden County District Attorney’s Office and the Springfield Police Department. It is being prosecuted by Trial Attorney Erin Aslan of the Justice Department’s Civil Rights Division and Assistant U.S. Attorneys Paul Smyth and Kevin O’Regan of the U.S. Attorney’s Office for the District of Massachusetts.
Third Individual Pleads Guilty to Illegally Accessing Confidential Passport FilesRead the Press Release
WASHINGTON – A third individual pleaded guilty today to illegally accessing numerous confidential passport application files, Acting Assistant Attorney General Rita M. Glavin of the Criminal Division announced.
Gerald R. Lueders, 65, of Woodbridge, Va., pleaded guilty before U.S. Magistrate Judge Alan Kay in U.S. District Court for the District of Columbia to a one-count criminal information charging him with unauthorized computer access.
According to court documents, from June 1974 through September 2001, Lueders served as a Foreign Service Officer at the State Department. From fall 2005 to February 2008, he worked as a watch officer within the Office of Consular Affairs. Lueders has also been a retired annuitant since October 2001, serving as a recruitment coordinator in various State Department bureaus. According to information contained in plea documents, Lueders admitted he had access to official State Department computer databases in the regular course of his employment, including the Passport Information Electronic Records System (PIERS), which contains, among other data, all imaged passport applications dating back to 1994. The imaged passport applications on PIERS contain, among other things, a photograph of the passport applicant as well as certain personal information including the applicant’s full name, date and place of birth, current address, telephone numbers, parent information, spouse’s name and emergency contact information. These confidential files are protected by the Privacy Act of 1974, and access by State Department employees is strictly limited to official government duties.
In pleading guilty, Lueders admitted that between July 2005 and February 2008, he logged onto the PIERS database and viewed the passport applications of more than 50 celebrities, actors, politicians, musicians, athletes, family members, members of the media, business professionals, colleagues and other individuals identified in the press. Lueders admitted that he had no official government reason to access and view these passport applications, but that his sole purpose in accessing and viewing these passport applications was idle curiosity.
Lueders is the third current or former State Department employee to plead guilty in this continuing investigation. On Sept. 22, 2008, Lawrence C. Yontz, a former Foreign Service Officer and intelligence analyst, pleaded guilty to unlawfully accessing hundreds of confidential passport files. Yontz was sentenced on Dec. 19, 2008, to 12 months of probation and ordered to perform 50 hours of community service. On Jan. 14, 2009, Dwayne F. Cross, a former administrative assistant and contract specialist, pleaded guilty to unlawfully accessing hundreds of confidential passport files. Cross’ sentencing is scheduled for March 23, 2009 and Lueders sentencing is scheduled for March 26, 2009.
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. The case is being investigated by the State Department Office of Inspector General.
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Plea Agreement
Factual Basis for Plea
Former AIG Vice President Sentenced to Four Years in Prison <br /> for Role in Fraudulent Manipulation SchemeRead the Press Release
WASHINGTON – The former vice president of reinsurance of American International Group Inc. (AIG), was sentenced today to four years in prison for his role in a fraudulent scheme to manipulate AIG’s financial statements, the Department of Justice announced.
Christian M. Milton, 61, of Wynnewood, Pa., who served as vice president of reinsurance at AIG from approximately 1982 to March 2005, was convicted by a federal jury on Feb. 25, 2008, on charges of conspiracy, securities fraud, false statements to the U.S. Securities and Exchange Commission (SEC) and mail fraud. In addition to the prison term, Milton was sentenced by U.S. District Judge Christopher F. Droney to two years of supervised release following his release from prison and a $200,000 fine. Milton was ordered to surrender himself to federal authorities in 60 days.
Evidence presented at trial proved that Milton and his co-defendants, Ronald E. Ferguson, Elizabeth A. Monrad, Robert D. Graham and Christopher P. Garand, all former General Reinsurance Corporation (Gen Re) executive officers, engaged in a scheme to falsely inflate AIG’s reported loss reserves, a key indicator of financial health to insurance industry analysts and investors. According to trial evidence, the fraud was carried out through the use of two sham reinsurance transactions between subsidiaries of AIG and Gen Re in response to analysts’ criticism of a $59 million decrease in AIG’s loss reserves for the third quarter of 2000.
The two sham transactions, evidence showed, increased AIG’s loss reserves by $250 million in the fourth quarter of 2000 and $250 million in the first quarter of 2001, masking a declining trend in loss reserves in the face of premium growth. Evidence showed that AIG restated the transactions at issue in filings with the SEC in May 2005. Evidence presented at trial established that when the investigation was disclosed to investors by AIG and through various media outlets between Feb. 14 and March 14, 2005, shares of AIG stock dropped from $73.12 to $61.92.
All five defendants were convicted on all counts presented against them in the 16-count superseding indictment. Subsequently, on Oct. 31, 2008, Judge Droney found that AIG’s shareholders lost between $544 million and $597 million as a consequence of the defendants’ fraudulent scheme.
According to evidence at trial, each of the defendants knew that the true purpose of the transactions was to permit AIG to falsely report increasing loss reserves in its statements to analysts, investors and in its SEC filings. The defendants structured a sham reinsurance transaction, according to trial evidence, and created a phony paper trail to make it appear as though Gen Re had solicited reinsurance from AIG when the evidence demonstrated that the parties knew AIG wanted the transaction to manipulate its financial statements. Additionally, evidence presented at trial proved that the defendants entered into a secret side deal whereby AIG would never have to pay any losses under the contracts; AIG would return to Gen Re the $10 million in premiums Gen Re paid to AIG and AIG paid Gen Re a $5 million fee for entering into the transaction.
The case was prosecuted by Principal Deputy Chief Paul E. Pelletier and Assistant Chief Adam Safwat of the Criminal Division’s Fraud Section as well as Assistant U.S. Attorneys Eric J. Glover of the District of Connecticut and Ray Patricco of the Eastern District of Virginia. Additional assistance was provided by Paralegal Specialists Sarah Marberg of the Fraud Section, and Amy Konarski of the District of Connecticut. The ongoing investigation is being conducted by the U.S. Postal Inspection Service.
New York Man Pleads Guilty to Federal Hate Crime ConspiracyRead the Press Release
WASHINGTON – Brian Carranza, 21, pleaded guilty today before U.S. District Court Judge Carol B. Amon in Brooklyn, N.Y., to conspiring to assault African-American residents in Staten Island, N.Y., in retaliation for President Barack Obama winning last year’s presidential election, Acting Assistant Attorney General Loretta King for the Civil Rights Division and U.S. Attorney for the Eastern District of New York Benton J. Campbell announced.
Carranza, of Staten Island, N.Y., faces a maximum sentence of 10 years in prison and a 250,000 fine. A sentencing date has not been set by the court.
The case is being investigated by the FBI and the New York City Police Department. The case is being prosecuted by Special Litigation Counsel Kristy Parker of the Justice Department’s Civil Rights Division and Assistant U.S. Attorney Pamela Chen.
Former Oak Ridge Complex Employee Pleads Guilty to Unlawful Disclosure of Restricted Atomic Energy DataRead the Press Release
WASHINGTON – Roy Lynn Oakley, 67, a resident of Harriman, Tenn., pleaded guilty today in U.S. District Court in Knoxville, to count one of an indictment charging him with unlawful disclosure of Restricted Data under the Atomic Energy Act, in violation of 42 U.S.C., Section 2274(b).
The guilty plea was announced today by Matthew G. Olsen, Acting Assistant Attorney General for National Security, and James R. Dedrick, U.S. Attorney for the Eastern District of Tennessee.
Oakley had been scheduled to start trial today, but appeared instead before U.S. District Court Judge Thomas A. Varlan, to enter his plea of guilty. Oakley had formerly been employed as a laborer and escort by Bechtel Jacobs at the East Tennessee Technology Park (ETTP) in Oak Ridge, Tenn. The ETTP, formerly known as K-25, had previously been operated by the U.S. Department of Energy (DOE) as a facility to produce highly enriched uranium.
According to the plea agreement, while employed at the ETTP in 2006 through 2007, Oakley had a security clearance that permitted him to have access to classified and protected materials, including instruments, appliances and information relating to the gaseous diffusion process for enriching uranium. Some of the materials and information to which Oakley had access were classified as "Restricted Data" under the Atomic Energy Act, any disclosure of which was illegal. While he worked at the ETTP, Oakley had been instructed and informed that this Restricted Data could not be disclosed.
The plea agreement further states that based on the investigation the Federal Bureau of Investigation (FBI) determined that Oakley may have been in possession of protected materials that belonged to the DOE and was offering to sell the materials to a foreign government. The FBI initiated an undercover investigation and, in January 2007, the FBI contacted Oakley using an undercover agent assuming the role of an agent of a foreign government.
In recorded calls and during a face-to-face meeting with the FBI undercover agent, Oakley stated that he had taken certain parts of uranium enrichment fuel rods or tubes and other associated hardware items from the ETTP work site and that he wanted to sell these materials for $200,000 to the foreign government. Once Oakley handed over the pieces of tubes and associated items to the undercover FBI agent and received $200,000 in cash, he was confronted by agents of the FBI and admitted to his efforts to sell these materials to a foreign government.
The materials Oakley had tried to sell to a foreign government were, in fact, pieces of equipment known as "barrier" and associated hardware items that play a crucial role in the production of highly enriched uranium, a special nuclear material, through the gaseous diffusion process.
The maximum penalty for violation of the Atomic Energy Act by disclosing Restricted Data is a maximum of ten years imprisonment and a criminal fine of $250,000. A sentencing hearing has been set before Judge Varlan for May 14, 2009, at 10:00 a.m., in U.S. District Court in Knoxville.
Matthew G. Olsen, Acting Assistant Attorney General for National Security, said, "Today’s guilty plea should serve as a strong warning to anyone who would consider selling restricted U.S. nuclear materials to foreign governments. The facts of this case demonstrate the importance of safeguarding America’s atomic energy data and pursuing aggressive prosecutions against those who attempt to breach those safeguards."
U.S. Attorney James R. Dedrick said, "Vigorous enforcement of the law controlling the protection of national security information, especially that involving materials associated with atomic energy and weapons, is of the highest priority for the Department of Justice and is a vital part of our duty to protect national security and the nation’s defense system. The exposure of Oakley’s conduct and subsequent investigation by the FBI, the U.S. Attorney’s Office, and the Department of Justice reflects the Department’s dedication to combating any threat to the security of our nation’s atomic secrets wherever it may happen."
The indictment was the result of an investigation by the FBI, DOE’s Oak Ridge Counterintelligence Field Office, and DOE’s Headquarters Office of Intelligence and Counterintelligence. Assistant U.S. Attorney A. William Mackie from the U.S. Attorney’s Office for the Eastern District of Tennessee, and Trial Attorney Anthony P. Garcia, from the Counterespionage Section of the Justice Department’s National Security Division, represented the United States in this case.
For additional information, please contact U.S. Attorney James "Russ" Dedrick, Assistant U.S. Attorney William Mackie or Public Information Officer Sharry Dedman-Beard at (865) 545-4167.
Defendant Pleads Guilty to Conspiring to Export Military Aircraft Parts to IranRead the Press Release
WASHINGTON – Hassan Saied Keshari and his corporation, Kesh Air International, pleaded guilty this morning in the Southern District of Florida to charges of conspiring to illegally export military and commercial aircraft parts to Iran.
The guilty pleas were announced by Matt Olsen, Acting Assistant Attorney General for National Security; R. Alexander Acosta, U.S. Attorney for the Southern District of Florida; Michael Johnson, Special Agent in Charge, U.S. Department of Commerce; Office of Export Enforcement; Anthony V. Mangione, Special Agent in Charge, U.S. Immigration and Customs Enforcement, Office of Investigations; and Sharon Woods, Director, U.S. Department of Defense, Defense Criminal Investigative Service.
Keshari appeared on behalf of himself and Kesh Air International in federal court today to announce their guilty pleas. Charges are still pending against two remaining defendants charged in the indictment, Traian Bujduveanu and his corporation, Orion Aviation Corp. Sentencing is scheduled for April 8, 2009, at 8:30 a.m. before U.S. District Judge Patricia A. Seitz.
Count 1 of the Indictment, to which Keshari and Kesh Air International pleaded guilty, charges conspiracy to export and cause the export of goods from the United States to the Islamic Republic Iran, in violation of the embargo imposed upon that country by the United States and in violation of the International Emergency Economic Powers Act, and to export and cause to be exported defense articles, in violation of the Arms Export Control Act, all in violation of Title 18, United States Code, Section 371.
On the conspiracy count, Hassan Saied Keshari faces a maximum statutory term of five years’ imprisonment and a maximum fine of $250,000. Kesh Air International faces a statutory maximum fine of $500,000.
According to documents filed with the court during the plea hearing, Keshari, an Iranian national and naturalized United States citizen, by and through his Novato, Calif., corporation, Kesh Air International, purchased aircraft parts on behalf of purchasers in Iran and exported the aircraft parts to Iran by way of freight forwarders in Dubai, United Arab Emirates. The military aircraft parts were purchased from defendant Traian Bujduveanu, who operated through his Broward County, Fla., business, defendant Orion Aviation Corp.
Among the aircraft parts illegally exported to Iran through the conspiracy were parts designed exclusively for the F-14 Fighter Jet, the Cobra AH-1 Attack Helicopter, and the CH-53A Military Helicopter. All of these aircraft are part of the Iranian military fleet, while the F-14 is known to be used exclusively by the Iranian military.
Moreover, all of the parts supplied by Keshari as part of the conspiracy are manufactured in the United States, are designed exclusively for military use, and have been designated by the U.S. Department of State as "defense articles" on the United States Munitions List, thus requiring registration and licensing with the Department of State, Directorate of Defense Trade Controls. Neither Keshari nor his co-defendants are registered or had the required licenses to ship defense articles to Iran.
According to the Indictment and documents filed with the court during the plea hearing, Keshari received orders by email from buyers in Iran for specific aircraft parts. Keshari then requested quotes, usually by e-mail, from Bujduveanu and other suppliers and made arrangements for the sale and shipment of the parts to a company in Dubai through the use of false or misleading shipping documents. From Dubai, the parts were then shipped on to the purchasers in Iran.
Keshari has been in federal custody since his arrest in June 2008 and will remain in custody pending his sentencing. Co-defendant Bujduveanu also remains in federal custody awaiting trial, which is scheduled for May 2009.
The investigation was conducted by the U.S. Department of Commerce, Office of Export Enforcement, U.S. Immigration and Customs Enforcement, Office of Investigations, and the U.S. Department of Defense, Defense Criminal Investigative Service. The case is being prosecuted by Assistant U.S. Attorney Melissa Damian.
Former New York Power Authority Employee Sentenced to 37 Months in Jail for Bribery and Fraud SchemeRead the Press Release
WASHINGTON — A former employee of the New York Power Authority (NYPA) was sentenced today to serve 37 months in jail and to pay a $5,000 criminal fine for his role in a kickback and bribery scheme, the Department of Justice announced.
Edward P. Goldblatt of Melville, N.Y., a former purchasing warehouse assistant at NYPA, pleaded guilty on Aug. 26, 2008, in the U.S. District Court in Brooklyn to conspiring to defraud NYPA in a bribery scheme where he accepted $167,000 in kickback payments from a vendor. Goldblatt also caused NYPA to pay approximately $86,000 in fraudulent overcharges. Half of these overcharges were included in Goldblatt’s kickback payments and half were retained by the vendor. Goldblatt also pleaded guilty to income tax evasion for failing to report as income any of the kickbacks that he received for the years 2005 through 2007.
Goldblatt was also ordered to pay, with another individual, $253,836 in restitution. He was arrested in connection with this investigation by Special Agents of the FBI and the Internal Revenue Service (IRS) Criminal Investigation on April 2, 2008.
"Today’s sentencing should make clear that those who conspire to subvert the competitive bidding process will be held accountable," said Scott D. Hammond, Acting Assistant Attorney General in charge of the Department’s Antitrust Division. "The Department of Justice will not hesitate to prosecute those who defraud their employers, both public and private, for personal gain by ignoring competition standards."
NYPA is a nonprofit energy corporation established by New York State for the public benefit of the citizens of New York by providing low-cost power to government agencies, municipalities and private entities. NYPA finances its projects through bond sales to private investors and does not use tax revenue or state credit. NYPA is headquartered in Albany, N.Y., with power plants and offices located throughout New York.
Goldblatt was responsible for purchasing and awarding contracts for millions of dollars in goods and services annually for NYPA’s plants and offices. In addition, Goldblatt was responsible for issuing purchase orders, reviewing and authorizing vendor invoices for payment, and monitoring warehouse stock levels. NYPA’s policies and procedures include a competitive bidding policy to which Goldblatt was expected to adhere.
These charges arose from an ongoing federal antitrust investigation of bid rigging, bribery, fraud and tax-related offenses in the power generation industry. The investigation is being conducted by the Antitrust Division’s New York Field Office, with the assistance of the FBI and IRS Criminal Investigation. NYPA cooperated with the Department’s investigation.
Anyone with information concerning bid rigging, bribery, tax offenses or fraud in the power generation industry should contact the Antitrust Division’s New York Field Office at 212-264-9308 or the New York Division of the FBI at 212-384-3252.
Canadian Company to Pay U.S. More Than $1 Million Related to Sale of Defective Bullet-proof VestsRead the Press Release
WASHINGTON - Barrday Inc. and two related companies have agreed to pay the United States more than $1 million to resolve allegations that they violated the False Claims Act in connection with their role in the weaving of Zylon fabric used in the manufacture and sale of defective Zylon bullet-proof vests, the Justice Department announced today. Barrday, headquartered in Cambridge, Ontario, Canada, is a weaver of ballistic fabrics and designs and produces specialty industrial textiles.
The United States alleged that Barrday’s woven Zylon fabric was used in the manufacture of bullet-proof vests sold by Second Chance Body Armor Inc., Point Blank Body Armor Inc. and Gator Hawk Armor Inc. These vests were purchased by the United States, and by various state, local, and/or tribal law enforcement agencies, which were partially reimbursed by a Justice Department program. The government alleged that the Zylon in these vests lost its ballistic capability quickly, especially when exposed to heat and humidity.
Barrday was reportedly aware of the defective nature of the Zylon by at least December 2001, but continued to sell Zylon for use in ballistic armor until approximately 2003, when two police officers were shot through their Second Chance Zylon vests. In 2003, Barrday was the first weaver to permanently withdraw from the Zylon market.
"When a supplier of a component part distributes its product with knowledge of latent defects, that company violates the False Claims Act" said Michael F. Hertz, the acting Assistant Attorney General for the Civil Division. "This settlement will help ensure that component suppliers are held responsible for materials that put our first-responders at risk."
This settlement is part of a larger investigation of the body armor industry’s use of Zylon in body armor. As part of today’s agreement, Barrday has pledged its cooperation in the government’s on-going investigation. The United States previously has settled with four other participants in the Zylon body armor industry for over $46 million. Additionally, the government has pending lawsuits against Toyobo Co., Honeywell Inc., Second Chance Body Armor Inc. and four former Second Chance executives.
Today’s settlement with Barrday was the result of an ongoing investigation by the Justice Department’s Civil Division, the U.S. Attorney’s Office for the District of Columbia, the General Services Administration Office of the Inspector General, the Department of Homeland Security Office of Inspector General, the Treasury Inspector General for Tax Administration, the Defense Criminal Investigative Service, the U.S. Army Criminal Investigative Command, the Air Force Office of Special Investigations, the Department of Energy Office of the Inspector General, the U.S. Agency for International Development Office of the Inspector General, and the Defense Contracting Audit Agency.
Twentieth Member of Casino-cheating Criminal Enterprise Pleads Guilty to Racketeering Conspiracy Targeting Casinos in the United States and CanadaRead the Press Release
WASHINGTON – Phat Ngoc Tran, 35, pleaded guilty today in San Diego to conspiring to participate in a racketeering enterprise, the "Tran Organization," in a scheme to cheat at least 12 casinos across the United States and Canada out of millions of dollars, Acting Assistant Attorney General Rita M. Glavin of the Criminal Division and U.S. Attorney Karen P. Hewitt for the Southern District of California announced today. Tran admitted that he and his co-conspirators unlawfully obtained up to $2.5 million during card cheats.
A three-count indictment was returned May 22, 2007, and unsealed in the Southern District of California on May 24, 2007, charging Tran and 13 others each with one count of conspiracy to participate in the affairs of a racketeering enterprise; one count of conspiracy to commit several offenses against the United States, including conspiracy to steal money and other property from Indian tribal casinos; and one count of conspiracy to commit money laundering. The indictment also charged five separate individuals each with one count of conspiracy to commit several offenses against the United States, including conspiracy to steal money and other property from Indian tribal casinos; and one count of conspiracy to commit money laundering.
In his plea agreement, Tran admitted that on numerous occasions between approximately October 2002 and July 2006, he participated in gambling cheats together with other alleged members of the Tran Organization at casinos in the United States and Canada. Tran admitted to targeting at least 12 casinos in the racketeering conspiracy, including:
- Beau Rivage Casino, in Biloxi, Miss.;
- Casino Rama, in Orillia, Ontario, Canada;
- Foxwoods Resort Casino in Ledyard, Conn.;
- Gold Strike Casino in Tunica, Miss.;
- Horseshoe Casino, in Bossier City, La.;
- Horseshoe Casino and Hotel, in Tunica, Miss.;
- Isle of Capri Casino, in Westlake, La.;
- Majestic Star Casino, in Gary, Ind.;
- Mohegan Sun Resort Casino, in Uncasville, Conn.;
- Palace Station Casino, in Las Vegas, Nev.;
- Resorts East Chicago Hotel and Casino, in East Chicago, Ind.; and
- Sycuan Casino, in El Cajon, Calif.
According to the indictment, the defendants and others executed a "false shuffle" cheating scheme at casinos in the United States and Canada during blackjack and mini-baccarat games. The indictment alleges that members of the criminal organization bribed casino card dealers and supervisors to perform false shuffles during card games, thereby creating "slugs" or groups, of un-shuffled cards. The indictment also alleges that after tracking the order of cards dealt in a card game, a member of the organization would signal to the card dealer to perform a "false shuffle," and members of the group would then bet on the known order of cards when the slug appeared on the table. By doing so, members of the conspiracy repeatedly won thousands of dollars during card games, including winning up to $868,000 on one occasion.
The indictment also alleges that the members of the organization used sophisticated mechanisms for tracking the order of cards during games, including hidden transmitter devices and specially created software that would predict the order in which cards would reappear during mini-baccarat and blackjack games.
An indictment is merely an allegation and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Tran’s sentencing is scheduled for June 1, 2009, in San Diego before U.S. District Judge John A. Houston. At sentencing, Tran faces a maximum sentence of 20 years in prison on the racketeering conspiracy charge. Tran agreed to a personal money judgment in the amount of $180,000, which will be entered by way of a preliminary order of forfeiture. He also acknowledged that the restitution that he may be ordered to pay by the court at sentencing is not limited by the forfeiture amount. Tran was also charged in Orillia, Ontario, Canada, for his admitted cheating activities at Casino Rama.
A second indictment has alleged that 11 additional defendants conspired to commit offenses on behalf of the Tran Organization. A one-count indictment, unsealed in the Southern District of California on Sept. 11, 2008, charged Bryan Arce; Don Man Duong; Hogan Ho; Thang Viet Huynh; Outtama Keovongsa; Leap Kong, a/k/a Lanida Kong; Qua Le; Khunsela Prom, a/k/a Danny Prom; James Root; Darrell Saicocie; and Dan Thich each with one count of conspiracy to commit several offenses against the United States, including conspiracy to steal money and other property from Indian tribal casinos, and conspiracy to travel in interstate and foreign commerce in aid of racketeering.
To date, 20 defendants, including Tran, have pleaded guilty to charges relating to the casino-cheating conspiracy: Phuong Quoc Truong; Anh Phuong Tran; Martin Lee Aronson; Liem Thanh Lam; George Michael Lee; Tien Duc Vu; Son Hong Johnson; Barry Wellford; Willy Tran; Tuan Mong Le; Duc Cong Nguyen; Han Truong Nguyen; Roderick Vang Thor; Sisouvanh Mounlasy; Navin Nith; Renee Cuc Quang; Ui Suk Weller; Phally Ly; and Khunsela Prom. These defendants admitted to targeting, with the aid of coconspirators, a combined total of approximately 24 casinos during the course of the conspiracy.
The case is being investigated by the FBI’s San Diego Field Office; the Internal Revenue Service-Criminal Investigation; the San Diego Sheriff’s Department; and the California Department of Justice’s Bureau of Gambling Control. The investigation has received assistance from federal, state, tribal and foreign authorities, including: the Ontario Provincial Police; the National Indian Gaming Commission; the U.S. Attorney’s Office for the Western District of Washington; FBI Resident Agencies in Gulfport, Miss., Tacoma, Wash., and Toledo, Ohio; the Indiana State Police; the Rumsey Rancheria Tribal Gaming Agency; the Sycuan Gaming Commission; the Barona Gaming Commission; the Mississippi Gaming Commission; and the Washington State Gambling Commission.
The prosecution of the case is led by the Criminal Division’s Organized Crime and Racketeering Section (OCRS). Department of Justice Trial Attorneys Joseph K. Wheatley, Robert S. Tully and Gavin A. Corn are prosecuting the indictment in San Diego.
LAN Cargo S.A., Aerolinhas Brasileiras S.A. and EL AL Israel Airlines Ltd. Agree to Plead Guilty for Fixing Prices on Air Cargo ShipmentsRead the Press Release
WASHINGTON — Three air cargo carriers, LAN Cargo S.A. (LAN Cargo), Aerolinhas Brasileiras S.A. (ABSA), and EL AL Israel Airlines Ltd. (EL AL), have each agreed to plead guilty and pay criminal fines totaling $124.7 million for their roles in a conspiracy to fix prices in the air cargo industry, the Department of Justice announced today. Under the plea agreements, LAN Cargo, a Chilean company, and ABSA, a Brazilian company that is substantially owned by LAN Cargo, have agreed to pay a single criminal fine of $109 million. EL AL, an Israeli company, has agreed to pay a criminal fine of $15.7 million.
Including today’s charges, a total of 12 airlines and three executives have pleaded guilty or agreed to plead guilty in the Justice Department’s ongoing investigation into price fixing in the air transportation industry. To date, more than $1 billion in criminal fines have been imposed and executives have been sentenced to serve a total of 20 months in jail.
According to the charges filed today in the U.S. District Court for the District of Columbia, each airline engaged in a conspiracy in the United States and elsewhere to eliminate competition by fixing the cargo rates charged to customers for international air shipments, including to and from the United States. LAN Cargo and ABSA are charged with engaging in the conspiracy from in or about February 2003 and continuing until at least Feb. 14, 2006. EL AL is charged with engaging in the conspiracy from in or about January 2003 until at least Feb. 14, 2006. The plea agreements are subject to court approval. Each airline has agreed to cooperate with the Department’s ongoing investigation.
"American consumers were forced to pay higher prices on the goods they buy every day as a result of the inflated and collusive shipping rates charged by these companies," said Scott D. Hammond, Acting Assistant Attorney General in charge of the Department’s Antitrust Division.
LAN Cargo, ABSA and EL AL are charged with carrying out the price-fixing conspiracy with co-conspirators by:
- Participating in meetings, conversations and communications in the United States and elsewhere to discuss the cargo rates to be charged on certain routes to and from the United States;
- Agreeing, during those meetings, conversations and communications on certain components of the cargo rates to charge for shipments on certain routes to and from the United States;
- Levying cargo rates in the United States and elsewhere in accordance with the agreements reached; and
- Engaging in meetings, conversations and communications in the United States and elsewhere for the purpose of monitoring and enforcing adherence to the agreed-upon cargo rates.
The nine airlines that have pleaded guilty to date as a result of the Department’s ongoing investigation into the air transportation industry are: British Airways Plc (British Airways), Korean Air Lines Ltd., Qantas Airways Limited (Qantas), Japan Airlines International Co. Ltd., Martinair Holland N.V., Cathay Pacific Airways Limited, SAS Cargo Group A/S (SAS), Société Air France and Koninklijke Luchtvaart Maatschappij N.V. (KLM Royal Dutch Airlines). The three airline executives who have pleaded guilty for their involvement in the illegal activity are Bruce McCaffrey of Qantas, Timothy Pfeil of SAS and Keith Packer of British Airways.
EL AL, LAN Cargo and ABSA are charged with price fixing in violation of the Sherman Act, a violation which carries a maximum sentence of $100 million for corporations. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.
The ongoing investigation is being conducted by the Antitrust Division’s National Criminal Enforcement Section and the Federal Bureau of Investigation (FBI). Anyone with information concerning price fixing or other anticompetitive conduct in the air transportation industry is urged to call the National Criminal Enforcement Section of the Antitrust Division at 202-307-6694 or the FBI Washington Field Office, Northern Virginia Resident Agency at 703- 686-6000.
Foreign National Sentenced to Five Years in Prison for Smuggling East Africans to the United StatesRead the Press Release
WASHINGTON – A Ghanian man was sentenced today in the District of Columbia for his role in smuggling East Africans into the United States, Acting Assistant Attorney General of the Criminal Division Rita M. Glavin, U.S. Attorney for the District of Columbia Jeffrey A. Taylor and Acting Assistant Secretary of Immigration and Customs Enforcement (ICE) John Torres announced.
Mohammed Kamel Ibrahim, a/k/a Hakim, 27, a native of Ghana and naturalized citizen of Mexico, was sentenced to five years in prison by U.S. District Judge Ricardo M. Urbina after pleading guilty to one count of conspiracy and three counts of bringing aliens to the United States for profit.
According to his plea, Ibrahim operated an alien-smuggling organization in Mexico City that moved unauthorized aliens from East Africa across the southern U.S. border beginning as early as 2005. In plea documents Ibrahim admitted that between June 2006 and February 2007 he and co-defendant Sampson Lovelace Boateng conspired to smuggle unauthorized aliens to the United States by providing the aliens with fraudulently obtained Mexican visas. The visas, which Boateng obtained through a corrupt employee of the Mexican embassy in Belize, enabled East African aliens to travel into Mexico, then be smuggled across the southern U.S. border by Ibrahim’s Mexico City-based organization. According to the plea documents, Ibrahim’s organization smuggled the aliens by various means, including by concealing them for more than 12 hours in the sleeper compartments of commercial buses. In pleading guilty, Ibrahim admitted to smuggling between 25 and 99 aliens into the United States.
Ibrahim and Boateng were charged in a 28-count indictment returned by a federal grand jury in the District of Columbia on Oct. 31, 2007, and unsealed on Dec. 5, 2007. Ibrahim was arrested by Mexican authorities in Mexico City on Dec. 5, 2007, and extradited to the United States on April 24, 2008. Boateng was arrested at Miami International Airport on Nov. 5, 2007, after arriving on a commercial airline flight from Belize. Boateng pleaded guilty to conspiracy and alien-smuggling charges in the District of Columbia on April 22, 2008, and Ibrahim pleaded guilty on Sept. 22, 2008.
Boateng’s sentencing is scheduled for Feb. 10, 2009. Both men will be removed from the United States upon completion of their sentences.
The case was prosecuted by Trial Attorney Brian Rogers of the Criminal Division’s Domestic Security Section and Assistant U.S. Attorneys Jay Bratt, Colleen Covell and Michael Harvey of the U.S. Attorney’s Office for the District of Columbia. Valuable assistance was provided by Trial Attorney Mary Ann Snow and Paralegal Rachel Estabrook of the Criminal Division’s Office of International Affairs.
The investigation was conducted by ICE’s Los Angeles and Washington, D.C., offices, with assistance from the ICE attaché in Mexico City, the ICE attaché in Guatemala City, the Diplomatic Security Office of the U.S. Embassy in Belize and the Drug Enforcement Administration attaché in Belize. Valuable support was provided by U.S. Customs and Border Protection and the ICE Forensic Document Laboratory. Mexican and Belizean authorities also provided substantial support to the investigation.
Chicago Police Officer Pleads Guilty to Violating Federal Civil Rights of a Man Beaten While Restrained in a WheelchairRead the Press Release
WASHINGTON – A Chicago police officer pleaded guilty today to violating the federal civil rights of a man whom the officer struck repeatedly with a dangerous weapon while the man was handcuffed and shackled in a wheelchair, Acting Assistant Attorney General for the Civil Rights Division Loretta King, U.S. Attorney for the Northern District of Illinois Patrick Fitzgerald and Robert D. Grant, Special Agent-in-Charge of the FBI’s Chicago Field Office announced.
William Cozzi, 51, pleaded guilty to a one-count information in U.S. District Court in Chicago, admitting he used excessive or unreasonable force while acting under color of law. Cozzi joined the Chicago Police Department in 1992 and was assigned to the 25th District at the time of the alleged incident. He was subsequently suspended from duty. Cozzi was indicted in April 2008 for depriving the victim of his civil rights.
On Aug. 2, 2005, while performing his duties as a police officer, Cozzi admitted that he used a "sap," a dangerous weapon similar to a blackjack, to repeatedly strike the victim who was handcuffed and shackled in a wheelchair at Norwegian American Hospital, resulting in bodily injury. At the time, the victim was awaiting treatment in the hospital emergency room after being stabbed in the shoulder.
"The defendant violated the public trust by abusing his law enforcement authority," said Acting Assistant Attorney General Loretta King. "This prosecution demonstrates that the Civil Rights Division is committed to aggressively prosecuting law enforcement officers who willfully use excessive force."
"No law enforcement officer may use unreasonable force with impunity and every citizen, regardless of being in police custody, has a constitutional right to be free from the use of excessive force," U.S. Attorney Fitzgerald said.
Cozzi pleaded guilty while reserving his right to appeal a ruling last year denying his motion to dismiss the indictment on the grounds that the prosecution was based in part on compelled statements he made to the Chicago Police Department’s Office of Professional Standards and during a police review board hearing.
According to a plea agreement, Cozzi was dispatched to the hospital to respond to the stabbing and approached the victim who was being loud and verbally abusive while awaiting treatment for the stabbing. Shortly after approaching the victim, Cozzi placed him in handcuffs and left the emergency room to retrieve leg shackles, which he then placed on the victim. With the victim restrained, Cozzi used a sap to repeatedly strike him in the face and body. According to the plea agreement, at the time of the assault the victim posed no physical threat to Cozzi or anyone else at the hospital.
Cozzi also admitted that he subsequently prepared a false arrest report and misdemeanor complaints stating that the victim attempted to punch him and two hospital security guards, as well as a false tactical response report stating that he used an "open hand strike" on the victim but omitted that he struck the victim with a sap.
U.S. District Judge Blanche Manning set sentencing for March 26, 2009. Cozzi faces a maximum penalty of 10 years in prison and a $250,000 fine.
The case is being prosecuted by Assistant U.S. Attorney Scott Drury from the U. S. Attorney’s Office for the Northern District of Illinois and Trial Attorney Betsy Biffl of the Justice Department’s Civil Rights Division.
Puerto Rico Senator Jorge De Castro Font Pleads Guilty to Honest Services Wire Fraud and Conspiracy to Commit ExtortionRead the Press Release
WASHINGTON – Jorge De Castro Font, 45, a former senator in the Commonwealth of Puerto Rico, pleaded guilty today to 20 counts of honest services wire fraud and one count of conspiracy to commit extortion, Acting Assistant Attorney General Rita M. Glavin of the Criminal Division and U.S. Attorney for the District of Puerto Rico Rosa Emilia Rodríguez-Vélez announced.
De Castro Font pleaded guilty to devising and engaging in a scheme that deprived the people of Puerto Rico of his honest services as a legislator, performed free from conflict of interest, concealment and improper influence. De Castro Font also pleaded guilty to one count of conspiracy to commit extortion through fear of economic harm and under color of official right. De Castro Font was indicted for these and other related offenses on Oct. 2, 2008.
De Castro Font entered his guilty plea before U.S. District Judge Francisco Augusto Besosa in the District of Puerto Rico. De Castro Font admitted that from Jan. 2, 2005, through August 2008, he directly and indirectly solicited between approximately $500,000 and $525,000 in cash payments and other benefits, such as campaign contributions in excess of the legal limits, lodging, private flights, meals and other things of value, from individuals. De Castro Font admitted that he engaged in official acts on behalf of some of these individuals who had provided him with these undisclosed benefits, including but not limited to, proposing legislation, preventing legislative projects to be voted or acted upon, and persuading other legislators to vote for or against legislation.
De Castro Font also admitted to participating in a conspiracy to obtain cash and other benefits from five individuals whom he admitted he knew felt that if they did not provide him with the financial benefits requested, De Castro Font could use his official position to harm their financial interests.
Judge Besosa scheduled a sentencing hearing on Apr. 23, 2009.
"Using an elected office for personal gain denies citizens the honest services of their elected leaders," said Acting Assistant Attorney General Rita M. Glavin. "The Department will continue to identify and prosecute public officials who corruptly use their position and influence to illegally benefit themselves."
"Senator De Castro Font has accepted responsibility for the acts of public corruption charged in the indictment. His conduct was an affront to the voters of Puerto Rico who placed their trust and confidence in him and the institution that he represented, the Senate of the Commonwealth of Puerto Rico. His blatant disregard for his oath of office and his breach of the public trust, for his personal enrichment, violated the very essence of our democratic government. We will continue our public corruption investigations against public officials and those who make illegal payments in exchange for official acts," said U.S. Attorney Rosa Emilia Rodriguez-Velez.
"Let this conviction send a stark message to all public servants that the sale of influence and public corruption will not be tolerated by the FBI or the law-abiding citizens of Puerto Rico," said Luis Fraticelli, Special Agent in Charge of the FBI-San Juan Field Office. "The FBI will continue to be vigilant so as to root out all public corruption. As I have said before, corruption affects every facet of society: the people, honest businessmen, education and public works."
On Dec. 4, 2008, Alberto Goachet, a political consultant and aide to De Castro Font, pleaded guilty to participating in the conspiracy to launder illegal campaign contributions and other payments. Goachet admitted that he and others laundered the money through the use of fake invoices purporting to reflect legitimate payments to a political consulting firm owned by Goachet. Goachet admitted that the false invoices were meant to conceal a businessman’s illegal payments to De Castro Font. Goachet also admitted that in August 2008 he falsely claimed in an interview with the FBI that the invoices were legitimately written for services rendered to the businessman and denied that the money was intended for De Castro Font.
The case was prosecuted by Assistant U.S. Attorneys Jacqueline Novas and Timothy R. Henwood of the District of Puerto Rico, and Trial Attorney Matthew L. Stennes of the Criminal Division’s Public Integrity Section. The case was investigated by the FBI’s San Juan Field Office.
Factual Basis
Former Florida State Corrections Officer Convicted<br /> of Federal Civil Rights CrimeRead the Press Release
WASHINGTON – A federal jury in Jacksonville, Fla., found Paul Tillis, a former Florida Department of Corrections officer, guilty on Jan. 16, 2009, of a felony federal civil rights violation for an August 2005 assault on an inmate.
The evidence at trial showed that on Aug. 14, 2005, Tillis assaulted the victim by pouring a bottle of scalding water onto the victim’s chest. Tillis was on duty as a supervisory corrections officer at the Florida State Prison in Raiford. During his shift, one of the inmates in his custody allegedly feigned injury by lying on the floor of his cell. In response, the defendant filled a bottle from a nearby dispenser that provided water at near-boiling temperatures, then poured the scalding water onto the victim’s chest. Tillis also failed to arrange for medical treatment for the victim, who suffered second degree burns on his chest as a result of this assault.
"It is important that corrections officers realize they may not use their positions of authority to inflict physical harm on inmates as punishment," said Acting Assistant Attorney General Loretta King for the Civil Rights Division. "While the vast majority of law enforcement officers carry out their difficult duties in a lawful and professional manner, the Department of Justice will continue to vigorously prosecute those who cross the line and commit this type of unlawful act."
Tillis faces a maximum punishment of ten years in prison and a $250,000 fine. A sentencing date has not yet been scheduled by the court.
This case was investigated by agents from the FBI’s Jacksonville Division and the Florida Office of the Inspector General. The case was prosecuted by Assistant U.S. Attorney Mac Heavener of the U.S. Attorney’s Office for the Middle District of Florida and Department of Justice Civil Rights Division Trial Attorney Douglas Kern.
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 and other government officials. In FY2008, the Criminal Section filed the largest-ever number of federal criminal civil rights cases in a single year in the Section’s history, and the second-highest ever number of official misconduct prosecutions.
Ex contralor de empresa de telecomunicaciones del Condado de Miami-Dade fue sentenciado a 24 meses en prisión por su papel en un ardid de cohecho en el extranjeroRead the Press Release
WASHINGTON - El ex contralor de una empresa de telecomunicaciones del Condado de Miami-Dade, Fla., fue sentenciado a 24 meses en prisión por su participación en una conspiración para pagar y ocultar sobornos a funcionarios gubernamentales haitianos, anunciaron el Secretario de Justicia Auxiliar Lanny A. Breuer de la División de lo Penal; el Fiscal Federal Wifredo A. Ferrer del Distrito Sur de Florida; y Daniel W. Auer, Agente Especial a Cargo del Servicio de Impuestos Internos, Oficina Local de Miami de Investigaciones Penales (IRS-CI).
Antonio Perez, 52, de Miami, también fue condenado por el Juez Federal de Distrito Jose E. Martinez a dos años de libertad bajo supervisión después de haber cumplido su sentencia en prisión, y a entregar $36,375 al gobierno. Perez se declaró culpable el 27 de abril de 2009, de conspirar para realizar pagos corruptos para una compañía de telecomunicaciones del Condado de Miami-Dade a funcionarios de la compañía de telecomunicaciones estatal de la República de Haití, Telecommunications D'Haiti, en violación de la Ley de Prácticas Corruptas en el Extranjero (FCPA) y leyes de lavado de dinero.
En su declaración de culpabilidad, Perez admitió haber conspirado para realizar pagos corruptos a funcionarios gubernamentales extranjeros con la finalidad de obtener ventajas comerciales para la empresa de telecomunicaciones por parte de Telecommunications D'Haiti. De acuerdo con el expediente judicial, Perez conspiró con Robert Antoine, el ex director de relaciones internacionales para Telecommunications D'Haiti y Juan Diaz, el propietario de J.D. Locator Services, junto con otros. Perez y sus coconspiradores ocultaros los pagos de sobornos en parte al conducir transacciones financieras en las que se realizaron transferencias telegráficas de dinero a empresas fantasma y a través de denominaciones falsas en facturas, cheques y libros contables. Perez admitió que él mismo estuvo involucrado en dos pagos de sobornos por un total de aproximadamente 36,375 dólares.
El 30 de julio de 2010, Diaz fue sentenciado a 57 meses en prisión después de haberse declarado culpable de pagar y ocultar 1,028,851 dólares en sobornos a ex funcionarios del gobierno de Haití mientras actuaba como intermediario para tres empresas privadas de telecomunicaciones. Antoine admitió que aceptó los sobornos, incluidos sobornos de Diaz, y se declaró culpable el 12 de marzo de 2010 a conspiración para cometer lavado de dinero. Antoine fue sentenciado a cuatro años en prisión.
Joel Esquenazi y Carlos Rodriguez, los propietarios de la empresa de telecomunicaciones en la que trabajaba Perez, así como Jean Rene Duperval, quien fue director de relaciones internacionales de Telecommunications D´'Haiti de junio de 2003 a abril de 2004, y la hermana de Duperval, Marguerite Grandison, fueron acusados formalmente junto con Antoine, el 4 de diciembre de 2009. El enjuiciamiento de los demás demandados tiene su inicio programado para el 28 de febrero de 2011 en el Tribunal Federal de Distrito en Miami. Una acusación formal es apenas una acusación, y se supone que los demandados son inocentes hasta que se pruebe lo contrario más allá de la duda razonable.
El Departamento de Justicia agradece al gobierno de Haití por su importante asistencia en recabar pruebas durante esta investigación. En particular, la unidad de inteligencia financiera de Haiti, la Unite Centrale de Renseignements Financiers, el Bureau des Affaires Financieres et Economiques, el cual es un componente especializado de la Policía Nacional Haitiana, y el Ministerio de Justicia y Seguridad Pública brindar importante cooperación y coordinación en la investigación.
Están a cargo de la acusación en el caso la Fiscal Federal Auxiliar Aurora Fagan de la Fiscalía Federal para el Distrito Sur de Florida, la Abogada Litigante Sénior Nicola J. Mrazek de la Sección de Fraude de la División de lo Penal y el Abogado Litigante Kevin Gerrity de la Sección de Confiscación de Activos y Lavado de Dinero de la División de lo Penal. La Oficina de Asuntos Internacionales de la División de lo Penal también brindó asistencia en este asunto. El caso fue investigado por la Oficina Local de Miami del IRS-CI.
President George W. Bush Grants CommutationsRead the Press Release
WASHINGTON – On Jan. 19, 2009, President George W. Bush granted commutations of sentence to two individuals:
COMMUTATIONS:
- Jose Alonso Compean – El Paso, Texas
Offense: Assault with a dangerous weapon, and aiding and abetting, 18 USC § 7, 113 and 2; assault with serious bodily injury, and aiding and abetting, 18 USC § 7, 113 and 2; discharge of a firearm in relation to a crime of violence, 18 USC § 924; deprivation of rights under color of law, 18 USC § 242.
Sentence: Nov. 12, 2008; Western District of Texas; 12 years in prison, three years of supervised release following the prison term, $2,000 fine.
Terms of commutation: Prison sentence to expire on March 20, 2009, leaving intact and in effect the three year term of supervised release with all its conditions and the fine.
- Ignacio Ramos, a/k/a Ignacio Ramos Jr. – El Paso, Texas
Offense: Assault with a dangerous weapon, and aiding and abetting, 18 USC § 7, 113 and 2; assault with serious bodily injury, and aiding and abetting, 18 USC § 7, 113 and 2; discharge of a firearm in relation to a crime of violence, 18 USC § 924; deprivation of rights under color of law, 18 USC § 242.
Sentence: Nov. 13, 2008; Western District of Texas; 11 years and one day in prison, three years of supervised release following the prison term, $2,000 fine.
Terms of commutation: Prison sentence to expire on March 20, 2009, leaving intact and in effect the three year term of supervised release with all its conditions and the fine.
- Jose Alonso Compean – El Paso, Texas
Justice Department Reaches Settlement Regarding Conditions at Two Tennessee State Veterans HomesRead the Press Release
WASHINGTON - The Justice Department today announced a settlement with the state of Tennessee regarding civil rights violations at the Tennessee State Veterans Homes (TSVHs) in Humboldt and Murfreesboro. The TSVHs are state-owned nursing homes, each serving approximately 140 residents, most of whom are veterans.
"Nursing home residents under the care of the state will now receive adequate services to meet their needs. It is particularly important that the state and federal governments work together to protect the health and well-being of the veterans who have served and sacrificed for our country," said Grace Chung Becker, Acting Assistant Attorney General for the Civil Rights Division. "We are grateful for, and applaud, the efforts and leadership of state officials in working with the Department to improve care for TSVH residents."
The agreement, filed in U.S. District Court, is designed to ensure that the nursing home residents will be provided adequate medical and nursing care and protected from harm. During its investigation of the TSVHs, the Justice Department discovered numerous civil rights violations, including medical and nursing care that departed substantially from generally accepted professional standards, and psychiatric medication practices so deficient that they potentially contributed to the deaths of some residents. Further, staff at the veterans homes did not adequately protect residents from injuries associated with falling.
The Justice Department conducted its investigation pursuant to the Civil Rights of Institutionalized Persons Act (CRIPA), which authorizes the Attorney General to investigate and root out systemic deficiencies in care such as those found at the TSVHs, rather than focus on individual civil rights violations.
The Civil Rights Division has successfully resolved similar investigations in other nursing homes in California, Georgia, New Mexico, New Jersey, New York, Pennsylvania, Mississippi, West Virginia and Washington, D.C. The Division has open investigations of nursing homes in Alabama, Minnesota, Mississippi and South Carolina. The Department of Justice’s CRIPA enforcement effort reaches beyond nursing homes, and includes psychiatric hospitals, facilities for persons with developmental disabilities, juvenile justice facilities, prisons and jails.
Justice Department Reaches Settlement Over<br /> Conditions at South Carolina Nursing Care CenterRead the Press Release
WASHINGTON – The Justice Department today announced a settlement with the South Carolina Department of Mental Health regarding civil rights violations at the C.M. Tucker Jr. Nursing Care Center in Columbia, a state-owned nursing home serving approximately 360 residents, 70 of whom are veterans. The agreement requires reforms to ensure that residents are provided adequate medical, mental health and nursing care, and are protected from harm.
"We greatly appreciate the effort and cooperation of both the state and the Department of Mental Health in working with us to improve care for Tucker residents," said Grace Chung Becker, Acting Assistant Attorney General for the Civil Rights Division. "This agreement establishes systems to ensure that nursing home residents receive adequate services to meet their needs."
"I credit the hard work of the Civil Rights Division for the fine result in this case. That office shares our commitment to enforce the federal civil rights laws for all South Carolinians, and we will certainly continue to partner with them in future cases," said United States Attorney Walt Wilkins.
Under the terms of the settlement agreement, Tucker residents will receive health care services sufficient to ensure that they obtain their highest practical, physical, mental and psychosocial well-being. Specifically, the state has agreed to take measures to ensure that residents are provided adequate:
- Medical, mental health and psychiatric care;
- Nutrition and hydration;
- Pain management and end-of-life care;
- Protection from harm, including falls; and
- Activities and psychosocial programs.
In addition, the state and the South Carolina Department of Mental Health will ensure that Tucker residents are being served in the most integrated setting appropriate to their needs.
The Justice Department conducted its investigation pursuant to the Civil Rights of Institutionalized Persons Act (CRIPA), which authorizes the Attorney General to investigate conditions in certain institutions owned or operated by, or on behalf of, state and local governments. CRIPA’s focus is on systemic deficiencies rather than individual, isolated problems.
The Civil Rights Division has successfully resolved similar investigations in other nursing homes in California, Georgia, New Mexico, New Jersey, New York, Pennsylvania, Mississippi, West Virginia and Washington, D.C. The Division has open investigations of nursing homes in Alabama, Minnesota and Mississippi. The Department of Justice’s CRIPA enforcement effort reaches beyond nursing homes and includes psychiatric hospitals, facilities for persons with developmental disabilities, juvenile justice facilities, prisons and jails.
More information about the Civil Rights Division of the Justice Department, and the laws it enforces, is available at www.usdoj.gov/crt.
Justice Department Announces Settlement on Disabled Access with Developers of Woodbridge, Virginia Apartment ComplexRead the Press Release
WASHINGTON - The Justice Department today announced a settlement that, pending court approval, will resolve allegations that those involved in the design and construction of the Crossings at Summerland Apartments, a 126-unit complex in Woodbridge, Va., discriminated on the basis of disability in the design and construction of the project.
The complaint, filed today in the U.S. District Court for the Eastern District of Virginia in conjunction with a consent decree, alleges that the defendants violated the federal Fair Housing Act. Specifically, it cites a failure to design and construct the Crossings at Summerland Apartments so that the public use and common use portions of covered multi-family dwellings are readily accessible to and usable by individuals with disabilities and so that all of the ground floor units contain features of accessible design.
"Accessible housing is a basic necessity for people with disabilities," said Grace Chung Becker, Acting Assistant Attorney General for the Civil Rights Division. "These types of design and construction cases reflect the Justice Department’s commitment to enforcing fair housing laws on behalf of persons with disabilities."
Under the settlement, the defendants will pay all costs related to making the apartment complex accessible to persons with disabilities and establish a $30,000 fund to compensate individuals harmed by the inaccessible housing. The defendants will also pay a $20,000 civil penalty to vindicate the public interest and undergo training on the requirements of the Fair Housing Act.
The defendants are: Summerland Heights III LP; Summerland Heights III GP LLC; Cederquist, Rodriguez, Ripley PC; Bowman Consulting Group Ltd.; and the Marlyn Development Corporation.
Fighting illegal housing discrimination is a top priority of the Justice Department. Since Jan. 1, 2001, the Justice Department’s Civil Rights Division has filed 281 cases to enforce the Fair Housing Act, 130 of which have alleged discrimination based on disability. More information about the Civil Rights Division and the laws it enforces is available at www.usdoj.gov/crt .
The federal Fair Housing Act prohibits discrimination in housing based on race, color, religion, national origin, sex, disability or familial status. Individuals who believe that they may have been victims of housing discrimination can call the Housing Discrimination Tip Line (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.
Arrests Made in Springfield, Massachusetts Church ArsonRead the Press Release
WASHINGTON – Three individuals were arrested this morning in relation to a church arson on Nov. 5, 2008, in Springfield, Mass.
Benjamin Haskell,22, Michael Jacques, 24, andThomas Gleason,21, all of Springfield, Mass., were arrested early this morning on a civil rights violation, announced Acting Assistant Attorney General Grace Chung Becker; U.S. Attorney Michael J. Sullivan; Glenn N. Anderson, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives - Boston Field Division; Warren T. Bamford, Special Agent in Charge of the Federal Bureau of Investigation - Boston Field Office; Colonel Mark Delaney, Superintendent of the Massachusetts State Police; William Bennett, Hampden County District Attorney; and Commissioner William J. Fitchet of the Springfield Police Department.
"Today's arrests demonstrate the Department of Justice's unwavering commitment to enforcing the nation's civil rights laws," Becker said. "Racial violence tears at the fabric of our great nation and will not be tolerated."
In documents unsealed today, the government alleged that in the early morning hours of Nov. 5, 2008, Haskel, Jacques and Gleason engaged in a conspiracy to burn and succeeded at burning the Macedonia Church of God in Christ’s building, a newly constructed building where religious services were to be held for a predominantly African American congregation. The building was 75 percent completed at the time of the fire, which destroyed the entire structure, leaving only the metal superstructure and a small portion of the front corner intact. Investigators determined the fire to be incendiary in nature and caused by an unknown quantity of gasoline applied to the exterior and interior of the building.
Haskel, Jacques and Gleason have been arrested and charged in a complaint with conspiring to injure, oppress, threaten and intimidate the parishioners of the Macedonia Church of God in Christ in the free exercise or enjoyment of their rights as secured in the Constitution and laws of the United States.
"We will not tolerate those who victimize others," said U.S. Attorney Sullivan. "Racism has devastating effects on individuals, and stifles the quality of life in the community. I am angered and saddened that the neighborhood has endured such cruel acts by those living in the same community."
"This crime has caused a great deal of physical and emotional harm. It is a crime against our entire community. All of us have been injured. All of us are hurt, but we are also resolved to hold those responsible accountable," said District Attorney Bennett.
If convicted, Haskell, Jacques and Gleason could face a sentence of up to10 years in prison, followed by three years of supervised release.
The case is being investigated by the FBI; Bureau of Alcohol, Tobacco, Firearms and Explosives; Massachusetts State Police; Hampden County District Attorney’s Office and the Springfield Police Department. It is being prosecuted by Trial Attorney Erin Aslan, Civil Rights Division, Department of Justice, and Assistant U.S. Attorneys Paul Smyth and Kevin O’Regan of Sullivan’s Springfield Branch.
The details contained in the complaint are allegations. The defendants are presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Statement of Dean Boyd, Justice Department Spokesman, on the Foreign Intelligence Surveillance Court of Review Opinion Published TodayRead the Press Release
"The Department of Justice is pleased with this important ruling by the Foreign Intelligence Surveillance Court of Review, which upholds the constitutionality of foreign intelligence surveillance conducted under the Protect America Act of 2007.
"The case involved a challenge by a private party to directives that were issued under the Protect America Act and that required the party to assist the Government in conducting foreign intelligence surveillance against targets reasonably believed to be located outside the United States. The Court of Review upheld the lawfulness of the directives, concluding that the surveillance at issue fell within the foreign intelligence exception to the warrant requirement and was otherwise reasonable under the Fourth Amendment.
"The Court issued a classified version of its opinion in August 2008 and subsequently requested publication of an unclassified version. Today, after a careful classification review process, the Court published the unclassified version of its opinion. The Court of Review's decision marks the second ruling published by the Court since it was established more than 30 years ago."
Medical Clinic Executives and Worker Plead Guilty to $5.3 Medicare Fraud SchemeRead the Press Release
WASHINGTON – The owners and operators of two Miami medical clinics, along with a phlebotomist at one of the clinics, have pleaded guilty to defrauding the Medicare program in connection with a $5.3 million HIV and cancer infusion fraud scheme, Acting Assistant Attorney General Matthew Friedrich of the Criminal Division and U.S. Attorney R. Alexander Acosta of the Southern District of Florida announced today.
Juan A. "Tony" Marrero, 41, Belkis Marrero, 41, and Luz Borrego, 43, each pleaded guilty on Jan. 14, 2009, to conspiracy to commit healthcare fraud before U.S. District Judge Ursula Ungaro in the Southern District of Florida. In their pleas, Tony and Belkis Marrero admitted that they co-owned two Miami clinics named Medcore Group LLC (Medcore) and M&P Group of South Florida Inc. (M&P).
Medcore and M&P purported to specialize in the treatment of HIV-positive patients. The Marreros admitted that beginning in August 2004 and continuing through November 2006 they conspired with others to submit approximately $5.3 million in fraudulent claims to Medicare. Borrego acknowledged her role in the fraud at Medcore where she was a phlebotomist who administered unnecessary drugs intravenously to HIV patients. Tony Marrero also pleaded guilty to two separate conspiracies to launder the proceeds of the health care fraud. Sentencing for all three defendants is scheduled for April 3, 2009.
During their pleas, the defendants admitted that Medcore and M&P were operated for the purpose of defrauding Medicare and that the treatments for infused or injected drugs billed to Medicare were not medically necessary. Each of the defendants also admitted that all of the patients at the clinics were participants in the fraud. The defendants admitted that they, or their co-conspirators, entered into kickback arrangements with these Medicare beneficiaries whereby the beneficiaries were paid every week in exchange for their Medicare billing information, which allowed the clinics to submit the fraudulent bills.
To obtain all the cash necessary to pay the patients, Tony Marrero admitted that he and others would write checks that appeared legitimate to people who would cash the checks and then return the cash to them for a fee.
The defendants admitted that none of the Medicare beneficiaries needed the injection and infusion treatments billed to Medicare by the clinics. Tony and Belkis Marrero acknowledged that clinic employees intentionally manipulated patients’ blood samples so that they would appear to need treatment, when in fact they did not. Belkis Marrero and Borrego also admitted that they put together medical files to make them appear legitimate and that they supported the treatments being billed to Medicare.
On Jan. 7, 2009, Orlando Pascual Jr., a co-owner of Medcore and M&P, pleaded guilty to his role in the Medicare fraud and money laundering conspiracies. Pascual is currently incarcerated for Medicare fraud involving the operation of a separate durable medical equipment company that he operated from 2001 to 2003.
On Jan. 14, 2009, Harold Sio, the owner of pharmaceutical wholesale company named Lifecare Medical, was charged by criminal information with conspiracy to commit health care fraud and conspiracy to commit money laundering. Sio, whose company supplied Medcore and M&P with infusible drugs, allegedly conspired with Pascual and Tony Marrero to accomplish the health care fraud scheme by providing false invoices for the drugs allegedly used in the scheme.
Four co-defendants in the case are scheduled for trial beginning Feb. 9, 2009, in the Southern District of Florida. An indictment and an information are merely charges, and defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt.
The case was prosecuted by Deputy Chief Kirk Ogrosky, Assistant Chief John S. (Jay) Darden, and Trial Attorney Charles Reed of the Criminal Division’s Fraud Section, and was investigated by the Department of Health and Human Services, Office of the Inspector General and the FBI. The case was brought as part of the Medicare Fraud Strike Force (MFSF), supervised by the Criminal Division’s Fraud Section and U.S. Attorney Acosta of the Southern District of Florida. Since the inception of MFSF operations, federal prosecutors have indicted 106 cases with 190 defendants in both Los Angeles and Miami. Collectively, these defendants fraudulently billed the Medicare program for more than half a billion dollars.
Justice Department Resolves Investigation of King County, Washington Correctional FacilityRead the Press Release
WASHINGTON – The Department of Justice today announced a comprehensive agreement with King County, Wash., regarding the conditions of confinement at the King County Correctional Facility in Seattle. The agreement follows the Department’s investigation of the facility, which found substantial civil rights violations.
"I appreciate King County’s cooperation during our investigation and commend the leadership of the King County Executive and the County Council for their commitment to improve conditions at the jail," said Grace Chung Becker, Acting Assistant Attorney General for the Civil Rights Division. "Today’s agreement will ensure that necessary measures are taken so that the County will meet its obligations under the law."
The Department’s investigation identified inadequate medical care and contagious disease prevention and treatment services, inadequate security and detention practices, and inadequate suicide prevention procedures. The agreement requires the implementation of measures to ensure that the identified deficiencies are remedied and that the services and systems to address the inadequate conditions are consistent with constitutional standards.
The Civil Rights Division conducted its investigation pursuant to the Civil Rights of Institutionalized Persons Act, which authorizes the federal government to identify and root out systemic abuses. The Civil Rights Division has successfully resolved similar investigations of other adult correctional facilities in numerous other jurisdictions, including Arkansas, Delaware, Georgia, Kentucky, Maryland, Mississippi, Montana, New Mexico, New York, Oklahoma, Tennessee, Texas and Wisconsin.
The Department of Justice’s enforcement effort reaches beyond adult correctional facilities. Since 2001, the Department of Justice has opened 97 similar investigations into conditions of confinement at correctional facilities, juvenile detention centers, nursing homes, mental health facilities and residences for persons with developmental disabilities throughout the United States.
More information about the Special Litigation Section of the Justice Department’s Civil Rights Division can be found at http://www.usdoj.gov/crt/split/index.html.
Justice Department Reaches Settlement with Georgia<br /> Regarding States Seven Psychiatric HospitalsRead the Press Release
WASHINGTON - The Justice Department today announced that it has reached a settlement with the State of Georgia regarding the conditions at Georgia’s seven psychiatric hospitals. The Department opened its investigation of Georgia’s psychiatric hospitals in 2007 and issued findings regarding Georgia Regional Hospital at Atlanta on May 30, 2008. The Department subsequently entered into negotiations regarding remedies the State was required to implement to correct unconstitutional conditions at all the hospitals. The other state facilities involved in today’s settlement include: Georgia Regional Hospital at Savannah, Central State Hospital in Milledgeville, Southwestern State Hospital, East Central State Hospital, West Central State Hospital, and Northwest Georgia Regional Hospital at Rome.
"When a state undertakes to care for persons with mental illness and developmental disabilities, it accepts responsibility to protect them from harm," said Grace Chung Becker, Acting Assistant Attorney General for the Civil Rights Division. "The Department commends Governor Sonny Perdue, State Attorney General Thurbert Baker, and the Georgia Department of Human Resources for their willingness to work aggressively to address the conditions at these seven psychiatric hospitals. The leadership of the State in amicably resolving this matter has been paramount to today's exceptional result on behalf of the people of the State of Georgia. We are pleased that we have cooperatively achieved a settlement agreement that will benefit the lives of persons with mental health problems and developmental disabilities in Georgia’s psychiatric hospitals."
Under the terms of the settlement agreement, the State will work to ensure that patients at the seven hospitals are safe and receive the care and services necessary to meet their individualized needs. Specifically, the State has agreed to undertake a variety of measures, including improving medical and mental health care and ensuring that patients are free from undue bodily restraint. The State will also improve discharge planning and ensure that each patient is served in the most integrated setting appropriate.
Today's settlement with the State of Georgia is the result of a cooperative effort by State entities and the Justice Department to reach a settlement that will make meaningful changes to improve the care and treatment of patients at Georgia’s seven psychiatric hospitals. This Administration is firmly committed to the vigorous protection of the rights of persons with disabilities.
The Civil Rights Division is authorized to conduct investigations of public psychiatric hospitals under the Civil Rights of Institutionalized Persons Act (CRIPA). This statute allows the federal government to identify and root out systemic abuses such as those discovered in Georgia. The Civil Rights Division has successfully resolved similar investigations in other in-patient mental health facilities in the District of Columbia, Vermont, and California, among other states. The Civil Rights Division has open investigations of mental health facilities in Delaware, New Jersey, New York, North Carolina and Oregon.
CRIPA authorizes the Attorney General to investigate conditions in certain institutions owned or operated by, or on behalf of, state or local governments. These institutions include nursing homes, residential facilities serving people with mental or other developmental disabilities, mental health facilities, jails, prisons, and juvenile justice facilities.
Copies of the settlement documents were filed today in federal court and will be available on the Justice Department Web site upon approval by a federal judge. More information about the Civil Rights Division of the Justice Department, and the laws it enforces, is available at http://www.usdoj.gov/crt/index.html.
Four Executives Agree to Plead Guilty in<br /> Global LCD Price-Fixing ConspiracyRead the Press Release
WASHINGTON — Executives from LG Display Co. Ltd. and Chunghwa Picture Tubes Ltd. have agreed to plead guilty and serve jail time in the United States for participating in a global conspiracy to fix prices in the sale of Thin Film Transistor-Liquid Crystal Display (TFT-LCD) panels, the U.S. Department of Justice announced today.
According to a one-count felony charge filed today in U.S. District Court in San Francisco, Chang Suk "C.S." Chung, a Korean LG executive, conspired with unnamed employees from other panel makers to suppress and eliminate competition by fixing the prices of TFT-LCD panels from on or about Sept. 21, 2001, to on or about June 1, 2006. According to a separate one-count felony charge, also filed today in U.S. District Court in San Francisco, Chieng-Hon "Frank" Lin, a Taiwanese former executive from Chunghwa, and Chih-Chun "C.C." Liu and Hsueh-Lung "Brian" Lee, Taiwanese current employees of Chungwha, are charged with participating in the same conspiracy at various times during the period from Sept. 14, 2001, to on or about Dec. 1, 2006.
Under the plea agreements, which must be approved by the court, all four executives have agreed to serve a term of imprisonment, pay a criminal fine and assist the government in its ongoing TFT-LCD investigation.
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.
"These cases involve the first Taiwanese nationals to face imprisonment in the United States for an antitrust offense," said Deborah A. Garza, Acting Assistant Attorney General in charge of the Antitrust Division. "The Department of Justice is committed to holding accountable all conspirators who harm American consumers, no matter where they live or where they commit the crime."
During the conspiracy, Chang Suk Chung, a Korean citizen, worked as LG’s Vice President of Monitor Sales. Under the plea agreement, Chung has agreed to serve a seven-month prison sentence in the United States and pay a $25,000 criminal fine.
During the charged conspiracy period, Chieng-Hon Lin, a Taiwanese and U.S. citizen, was Chunghwa’s Chairman and Chief Executive Officer. Under the plea agreement, Lin has agreed to serve a nine-month prison sentence in the United States and pay a $50,000 criminal fine.
Chih-Chun Liu, a Taiwanese citizen, was Chunghwa’s Vice President of LCD Sales during the charged conspiracy period. Under the plea agreement, Liu has agreed to serve a seven-month prison sentence in the United States and pay a $30,000 criminal fine.
Hsueh-Lung Lee, a Taiwanese citizen, held various sales positions at Chunghwa during the charged conspiracy period, including Vice President of LCD Sales. Under the plea agreement, Lee has agreed to serve a six-month prison sentence in the United States and pay a $20,000 criminal fine.
These four foreign-based executives were charged with participating with co-conspirators in a conspiracy that was accomplished by:
- Participating in meetings, conversations and communications in Taiwan, South Korea and the United States to discuss the prices of TFT-LCD panels;
- Agreeing during these meetings, conversations and communications to charge prices of TFT-LCD panels at certain predetermined levels;
- Issuing price quotations in accordance with the agreements reached;
- Exchanging information on sales of TFT-LCD panels for the purpose of monitoring and enforcing adherence to the agreed-upon prices; and
- Authorizing, ordering and consenting to the participation of subordinate employees in the conspiracy.
"These are the first individuals to plead guilty to a charge of fixing prices in this active investigation into antitrust violations in the TFT-LCD industry," said Scott D. Hammond, the Antitrust Division’s Deputy Assistant Attorney General for Criminal Enforcement. "We will continue in our efforts to bring to justice other domestic and foreign-based executives who were involved with fixing TFT-LCD prices."
On Dec. 15, 2008, LG pleaded guilty to participating in this conspiracy and was sentenced to pay a $400 million criminal fine – the second largest fine in Antitrust Division history. On Jan. 14, 2009, Chunghwa pleaded guilty to participating in the same conspiracy and was sentenced to pay a $65 million criminal fine.
On Dec. 16, 2008, Sharp Corp. pleaded guilty to three separate conspiracies to fix the prices of TFT-LCD panels sold to Dell Inc., Apple Computer Inc. and Motorola Inc., and was sentenced to pay a $120 million criminal fine.
The four executives are charged with price fixing in violation of the Sherman Act, which carries a maximum fine of $1 million and up to 10 years in prison for an individual. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.
These pleas are the result of a joint investigation by the 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.
Eli Lilly and Company Agrees to Pay $1.415 Billion to Resolve Allegationsof Off-label Promotion of ZyprexaRead the Press Release
American pharmaceutical giant Eli Lilly and Company today agreed to plead guilty and pay $1.415 billion for promoting its drug Zyprexa for uses not approved by the Food and Drug Administration (FDA), the Department of Justice announced today. This resolution includes a criminal fine of $515 million, the largest ever in a health care case, and the largest criminal fine for an individual corporation ever imposed in a United States criminal prosecution of any kind. Eli Lilly will also pay up to $800 million in a civil settlement with the federal government and the states.
Eli Lilly agreed to enter a global resolution with the United States to resolve criminal and civil allegations that it promoted its antipsychotic drug Zyprexa for uses not approved by the FDA, the Department said. Such unapproved uses are also known as "off-label" uses because they are not included in the drug’s FDA approved product label.
Assistant Attorney General for the Civil Division Gregory G. Katsas and acting U.S. Attorney for the Eastern District of Pennsylvania Laurie Magid today announced the filing of a criminal information against Eli Lilly for promoting Zyprexa for uses not approved by the FDA. Eli Lilly, headquartered in Indianapolis, is charged in the information with promoting Zyprexa for such off-label or unapproved uses as treatment for dementia, including Alzheimer’s dementia, in elderly people.
The company has signed a plea agreement admitting its guilt to a misdemeanor criminal charge. Eli Lilly also signed a civil settlement to resolve civil claims that by marketing Zyprexa for unapproved uses, it caused false claims for payment to be submitted to federal insurance programs such as Medicaid, TRICARE and the Federal Employee Health Benefits Program, none of which provided coverage for such off-label uses.
The plea agreement provides that Eli Lilly will pay a criminal fine of $515 million and forfeit assets of $100 million. The civil settlement agreement provides that Eli Lilly will pay up to an additional $800 million to the federal government and the states to resolve civil allegations originally brought in four separate lawsuits under the qui tam provisions of the federal False Claims Act. The federal share of the civil settlement amount is $438 million. Under the terms of the civil settlement, Eli Lilly will pay up to $361 million to those states that opt to participate in the agreement.
Under the Food, Drug, and Cosmetic Act (FDCA), a company must specify the intended uses of a product in its new drug application to the FDA. Before approving a drug, the FDA must determine that the drug is safe and effective for the use proposed by the company. Once approved, the drug may not be marketed or promoted for off-label uses.
The FDA originally approved Zyprexa, also known by the chemical name olanzapine, in Sept. 1996 for the treatment of manifestations of psychotic disorders. In March 2000, FDA approved Zyprexa for the short-term treatment of acute manic episodes associated with Bipolar I Disorder. In Nov. 2000, FDA approved Zyprexa for the short term treatment of schizophrenia in place of the management of the manifestations of psychotic disorders. Also in Nov. 2000, FDA approved Zyprexa for maintaining treatment response in schizophrenic patients who had been stable for approximately eight weeks and were then followed for a period of up to eight months. Zyprexa has never been approved for the treatment of dementia or Alzheimer’s dementia.
The criminal information, filed in the Eastern District of Pennsylvania, alleges that from Sept. 1999 through at least Nov. 2003, Eli Lilly promoted Zyprexa for the treatment of agitation, aggression, hostility, dementia, Alzheimer’s dementia, depression and generalized sleep disorder. The information alleges that Eli Lilly’s management created marketing materials promoting Zyprexa for off-label uses, trained its sales force to disregard the law and directed its sales personnel to promote Zyprexa for off-label uses.
The information alleges that beginning in 1999, Eli Lilly expended significant resources to promote Zyprexa in nursing homes and assisted-living facilities, primarily through its long-term care sales force. Eli Lilly sought to convince doctors to prescribe Zyprexa to treat patients with disorders such as dementia, Alzheimer’s dementia, depression, anxiety, and sleep problems, and behavioral symptoms such as agitation, aggression, and hostility.
The information further alleges that the FDA never approved Zyprexa for the treatment of dementia, Alzheimer's dementia, psychosis associated with Alzheimer's disease, or the cognitive deficits associated with dementia.
The information also alleges that building on its unlawful promotion and success in the long-term care market, Eli Lilly executives decided to market Zyprexa to primary-care physicians. In Oct. 2000, Eli Lilly began this off-label marketing campaign targeting primary care physicians, even though the company knew that there was virtually no approved use for Zyprexa in the primary-care market. Eli Lilly trained its primary-care physician sales representatives to promote Zyprexa by focusing on symptoms, rather than Zyprexa’s FDA approved indications.
The qui tam lawsuits alleged that between Sept. 1999 and the end of 2005, Eli Lilly promoted Zyprexa for use in patients of all ages and for the treatment of anxiety, irritability, depression, nausea, Alzheimer’s and other mood disorders. The qui tam lawsuits also alleged that the company funded continuing medical education programs, through millions of dollars in grants, to promote off-label uses of its drugs, in violation of the FDA’s requirements.
"Off-label promotion of pharmaceutical drugs is a serious crime because it undermines the FDA’s role in protecting the American public by determining that a drug is safe and effective for a particular use before it is marketed," said Gregory G. Katsas, Assistant Attorney General for the Civil Division. "This settlement demonstrates the Department’s ongoing diligence in prosecuting cases involving violations of the Food, Drug, and Cosmetic Act, and recovering taxpayer dollars used to pay for drugs sold as a result of off-label marketing campaigns."
"When pharmaceutical companies ignore the government’s process for protecting the public, they undermine the integrity of the doctor-patient relationship and place innocent people in harm’s way," said acting U.S. Attorney for the Eastern District of Pennsylvania, Laurie Magid. "Off-label marketing created unnecessary risks for patients. People have an absolute right to their doctor’s medical expertise, and to know that their health care provider’s judgment has not be clouded by misinformation from a company trying to build its bottom line."
The global resolution includes the following agreements:
- A plea agreement signed by Eli Lilly admitting guilt to the criminal charge of misbranding. Specifically, Eli Lilly admits that between Sept. 1999 and March 31, 2001, the company promoted Zyprexa in elderly populations as treatment for dementia, including Alzheimer’s dementia. Eli Lilly has agreed to pay a $515 million criminal fine and to forfeit an additional $100 million in assets.
- A civil settlement between Eli Lilly, the United States and various States, in which Eli Lilly will pay up to $800 million to the federal government and the states to resolve False Claims Act claims and related state claims by Medicaid and other federal programs and agencies including TRICARE, the Federal Employees Health Benefits Program, Department of Veterans Affairs, Bureau of Prisons and the Public Health Service Entities. The federal government will receive $438,171,544 from the civil settlement. The state Medicaid programs and the District of Columbia will share up to $361,828,456 of the civil settlement, depending on the number of states that participate in the settlement.
- The qui tam relators will receive $78,870,877 from the federal share of the settlement amount.
- A Corporate Integrity Agreement (CIA) between Eli Lilly and the Office of Inspector General of the Department of Health and Human Services. The five-year CIA requires, among other things, that a Board of Directors committee annually review the company’s compliance program and certify its effectiveness; that certain managers annually certify that their departments or functional areas are compliant; that Eli Lilly send doctors a letter notifying them about the global settlement; and that the company post on its website information about payments to doctors, such as honoraria, travel or lodging. Eli Lilly is subject to exclusion from Federal health care programs, including Medicare and Medicaid, for a material breach of the CIA and subject to monetary penalties for less significant breaches.
"OIG’s Corporate Integrity Agreement will increase the transparency of Eli Lilly’s interactions with physicians and strengthen Eli Lilly’s accountability for its compliance with the law," said Department of Health and Human Services Inspector General Daniel R. Levinson. "This historic resolution demonstrates the Government’s commitment to improvethe integrity of drug promotion activities."
In addition to the $1.415 billion criminal and civil settlement announced today, Eli Lilly previously agreed to pay $62 million to settle consumer protection lawsuits brought by 33 states. The state consumer protection settlements were announced on Oct. 7, 2008.
"Today's announcement of the filing of a criminal charge and the unprecedented terms of this settlement demonstrates the government's increasing efforts aimed at pharmaceutical companies that choose to put profits ahead of the public's health," said Special Agent-in-Charge Kim Rice of FDA's Office of Criminal Investigations. "The FDA will continue to devote resources to criminal investigations targeting pharmaceutical companies that disregard the safeguards of the drug approval process and recklessly promote drugs for uses for which they have not been proven to be safe and effective."
"The illegal scheme used by Eli Lilly significantly impacted the integrity of TRICARE, the Department of Defense's healthcare system," said Ed Bradley, Special Agent-in-Charge, Defense Criminal Investigative Service. "This illegal activity increases patients’ costs, threatens their safety and negatively affects the delivery of healthcare services to the over nine million military members, retirees and their families who rely on this system. Today’s charges and settlement demonstrate the ongoing commitment of the Defense Criminal Investigative Service and its partners in law enforcement to investigate and prosecute those that abuse the government's healthcare programs at the expense of the taxpayers and patients."
"This case should serve as still another warning to all those who break the law in order to improve their profits," said Patrick Doyle, Special Agent-in-Charge of the Office of Inspector General for the Department of Health and Human Services in Philadelphia. "OIG, working with our law enforcement partners, will pursue and bring to justice those who would steal from vulnerable beneficiaries and the taxpayers."
The civil settlement resolves four qui tam actions filed in the Eastern District of Pennsylvania: United States ex rel. Rudolf, et al., v. Eli Lilly and Company, Civil Action No. 03-943 (E.D. Pa.); United States ex rel. Faltaous v. Eli Lilly and Company, Civil Action No. 06-2909 (E.D. Pa.); United States ex rel. Woodward v. Dr. George B. Jerusalem, et al., Civil Action No. 06-5526 (E.D. Pa.); and United States ex rel. Vicente v. Eli Lilly and Company, Civil Action No. 07-1791 (E.D. Pa.). All of those cases were filed by former Eli Lilly sales representatives.
The criminal case is being prosecuted by the U.S. Attorney’s Office for the Eastern District of Pennsylvania and the Office of Consumer Litigation of the Justice Department’s Civil Division. The civil settlement was reached by the U.S. Attorney’s Office and the Commercial Litigation Branch of the Justice Department’s Civil Division.
This matter was investigated by the FDA’s Office of Criminal Investigations, the Defense Criminal Investigative Service and the Department of Health and Human Services Office of Inspector General.
Assistance was provided by representatives of FDA’s Office of Chief Counsel and the National Association of Medicaid Fraud Control Units.
The Corporate Integrity Agreement was negotiated by the Office of Inspector General of the Department of Health and Human Services.
Eli Lilly's guilty plea and sentence is not final until accepted by the U.S. District Court.
Court Orders Louisiana CPA to Stop Claiming<br /> False Tax Deductions for CustomersRead the Press Release
WASHINGTON - A federal court has ordered CPA Steven W. McCann, who operates a firm called SWMc Services in the Houma, La., area, to stop claiming improper tax deductions on federal income tax returns he prepares for customers, the Justice Department announced today. McCann agreed to the civil injunction order.
According to the government complaint filed in the case, McCann prepared nearly 1,000 federal income tax returns claiming fraudulent employee expense deductions for customers who work as mariners. The government alleged that these deductions were false because the expenses McCann claimed for his customers were never paid by the clients. Instead, their employers provided the items being deducted, including meals and other incidental expenses. In 2007, a federal court in Los Angeles barred another CPA, Martin A. Kapp, from promoting a similar scheme.
"The IRS and Justice Department are committed to stopping tax preparers who continue to promote the mariner’s tax deduction, which courts have held is frivolous," said Nathan J. Hochman, Assistant Attorney General for the Justice Department’s Tax Division. "The Justice Department has obtained injunctions against more than 365 tax return preparers and tax-fraud promoters since 2001." Information about those cases is available on the Justice Department Web site.
Assistant Attorney General Hochman thanked trial attorney Grayson Hoffman and IRS revenue agent Phil Rampey for their efforts in obtaining this injunction for the government.
Chicago Cousins Plead Guilty to Conspiracy to Provide Material Support to TerroristsRead the Press Release
WASHINGTON – Zubair Ahmed, 29, and Khaleel Ahmed, 28, both residents of Chicago, pleaded guilty today in the Northern District of Ohio to conspiracy to provide material support to terrorists in connection with their efforts to travel abroad in order to murder or maim U.S. military forces in Iraq or Afghanistan.
Today’s guilty pleas were announced by Matthew Olsen, Deputy Assistant Attorney General for National Security; William J. Edwards, U.S. Attorney for the Northern District of Ohio; and C. Frank Figliuzzi, Special Agent in Charge, Cleveland Division of the Federal Bureau of Investigation (FBI).
Zubair Ahmed and his cousin Khaleel Ahmed each pleaded guilty before Chief U.S. District Judge James G. Carr in Toledo, Ohio, to a one-count, superseding information charging them with conspiracy to provide material support and resources, including the defendants themselves as personnel, to terrorists in violation of Title 18, U.S.C. Section 2339A. At sentencing, each defendant faces a statutory maximum of 15 years imprisonment and a $250,000 fine, followed by three years of supervised release.
According to the superseding information and other information entered into the court record today:
The criminal conspiracy involving Zubair and Khaleel Ahmed began no later than April 1, 2004, and continued until their arrests on Feb. 21, 2007. As part of the conspiracy, the defendants made preparations to travel overseas in order to engage in acts that would result in the murder or maiming of U.S. military forces in either Iraq or Afghanistan. On or about May 21, 2004, the defendants traveled to Cairo, Egypt, with the intent of engaging in acts that would result in the murder or maiming of U.S. military forces in Iraq or Afghanistan.
After their return from Egypt, on or about July 4, 2004, Zubair and Khaleel Ahmed discussed, sought and received instruction on firearms from another individual in Cleveland. The defendants also sought and discussed training in counter-surveillance techniques and sniper rifles with this individual. Specifically, defendant Zubair Ahmed discussed his desire to learn how to use and move with a .50-caliber machine gun.
As part of the conspiracy, the defendants also communicated with each other using code words and in a foreign language to disguise their preparations and plans to engage in acts abroad that would result in the murder or maiming of U.S. military forces in Iraq and Afghanistan.
Furthermore, Zubair and Khaleel Ahmed researched the purchase of firearms, methods of obtaining firearms instruction (including at least one visit to a firing range) and methods of obtaining instruction in gunsmithing. In addition, the defendants collected and distributed videos of attacks on U.S. military forces overseas, manuals on military tactics and military manuals on weaponry.
"Today’s guilty pleas should send a strong message to individuals who would use this country as a platform to plot attacks against U.S. military personnel in Iraq and Afghanistan," said Matthew Olsen, Deputy Assistant Attorney General for National Security. "This case also underscores the need for continued vigilance in identifying and dismantling extremist plots that develop within our nation."
William J. Edwards, U.S. Attorney for the Northern District of Ohio, said: "These guilty pleas are testament to the hard work and dedication of all the federal, state and local law enforcement officials who have spent years investigating this case and to the tireless efforts and perseverance of an extremely talented team of federal prosecutors who, with their law enforcement partners, keep this country safe from terrorists."
C. Frank Figliuzzi, Special Agent in Charge, Cleveland Division, FBI, said: "This case is an example of our continued efforts to detect terrorist planning and to prevent acts of terrorism before they occur. Through close cooperation with our law enforcement partners in Illinois and Ohio, this case resulted in the successful prosecution of these individuals."
This case was investigated by the FBI and the Joint Terrorism Task Force in Chicago, Illinois and Toledo, Ohio, with the assistance of the U.S. Immigration and Customs Enforcement; U.S. Customs and Border Protection; the Chicago Police Department; the Illinois State Police; the Ohio Highway Patrol; the Toledo Police Department; and the Lucas and Wood County Sheriff’s Departments.
This case is being prosecuted by Assistant U.S. Attorneys Thomas E. Getz and Justin E. Herdman of the National Security Unit of the U.S Attorney’s Office in Cleveland; as well Assistant U.S. Attorney Gregg N. Sofer of the U.S. Attorney’s Office in Austin, Texas (formerly of the Justice Department’s Counterterrorism Section); and Trial Attorneys Jerome J. Teresinski and Jolie F. Zimmerman of the Justice Department’s Counterterrorism Section. The U.S. Attorney’s Office in Chicago also provided assistance in this case.
CEMEX California Cement Agrees to Reduce Emissions and Pay $2 Million Fine to Settle Clean Air Act ClaimsRead the Press Release
WASHINGTON—In the largest settlement yet in the U.S. Environmental Protection Agency’s ongoing cement kiln enforcement initiative, the U.S. Department of Justice, on behalf of EPA, today lodged a consent decree with the U.S. District Court for the Central District of California resolving Clean Air Act claims against CEMEX California Cement LLC with respect to the company’s Victorville, Calif., Portland cement plant.
The settlement will resolve claims asserted in a 2007 complaint that CEMEX is releasing pollutants to the air, including nitrogen oxide, sulfur dioxide and carbon monoxide, without required permits setting emission limits under the Clean Air Act. Under the terms of the settlement, CEMEX must meet new limits for these pollutants at the Victorville plant, one of the largest cement plants in the United States, including stringent new limits for nitrogen oxide that will reduce emissions by 1,890 tons per year, a nearly 40 percent reduction. The cement manufacturer must also pay a $2 million civil penalty. EPA estimates that achieving and maintaining compliance with the new emission limits, depending on the control technology used, could cost CEMEX millions of dollars.
“Today’s settlement shows the federal government’s continued commitment to enforcing the federal environmental laws and protecting the nation’s air quality,” said Ronald J. Tenpas, Assistant Attorney General for the Environment and Natural Resources Division of the U.S. Department of Justice.
“This settlement will result in cleaner air for California,” said Deborah Jordan, director of the EPA’s Air Division in the Pacific Southwest region. “This facility is the largest source of nitrogen oxide—an air pollutant that causes smog—in California, so the state-of-the-art air pollution controls that CEMEX is installing will have a significant impact on air quality.”
The settlement resolves the EPA’s claims that on two separate occasions, in 1997 and 2000, CEMEX violated the Clean Air Act by undertaking major plant modifications resulting in significant increases in the Victorville plant’s capacity to pollute without first undergoing required regulatory review or obtaining required permits under the Clean Air Act’s Prevention of Significant Deterioration, or PSD, program and without installing state-of-the-art emission controls that would reduce contaminants such as nitrogen oxide.
Nitrogen oxide is a harmful air pollutant that causes smog and leads to respiratory problems in children and the elderly. The Victorville area fails to meet federal air quality standards for both ozone and particulate matter.
The proposed consent decree is subject to a 30-day public comment period and final court approval. A copy of the consent decree is available on the Department of Justice Web site at http://www.usdoj.gov/enrd/Consent_Decrees.html. For more information on the settlement and the Clean Air Act, please visit: http://www.epa.gov/region09/air/index.html.
Alabama-Based Hospice Company Pays U.S. $24.7 Million<br /> to Settle Health Care Fraud ClaimsRead the Press Release
WASHINGTON – SouthernCare Inc. and its shareholders have agreed to pay the United States a total of $24.7 million to settle allegations that the Birmingham, Ala.-based company submitted false claims to the government for patients treated at its hospice facilities, the Justice Department announced today. SouthernCare operates approximately 99 locations that provide hospice services in 15 states.
Hospices provide palliative care – any form of medical care or treatment that concentrates on reducing the severity of a disease’s symptoms – to patients who decide to forego curative care of their illness. Medicare beneficiaries are entitled to hospice care if they have a terminal prognosis of six months or less to live. The government alleged that SouthernCare was submitting false claims for hospice care for patients who were not eligible for such care.
"The Medicare hospice benefit is intended to provide compassionate end of life care to terminally ill patients," said Gregory G. Katsas, Assistant Attorney General of the Civil Division. "This settlement sends a clear message that the Department of Justice will not allow health care providers to take advantage of beneficiaries in their attempts to game the reimbursement system."
Today’s settlement results from two qui tam suits filed by two former SouthernCare employees, Tanya Rice and Nancy Romeo, on behalf of the United States. The False Claims Act authorizes private parties to file suit against those who defraud the United States and to receive a share of any recovery. The United States will pay $4.9 million to the individuals who filed the actions against SouthernCare.
"Our investigation showed a pattern and practice to falsely admit patients to hospice care who did not qualify and to bill Medicare for that care. This resulted in taxpayers bearing inappropriate costs. Today’s settlement evidences the Department of Justice’s efforts to both protect the public monies and safeguard Medicare beneficiaries," said Alice H. Martin, U.S. Attorney for the Northern District of Alabama.
"This significant settlement demonstrates our commitment to protect the Medicare trust fund from fraud and abuse and to ensure that Medicare beneficiaries receive quality care," said David E. Nahmias, United States Attorney for the Northern District of Georgia,. "Every provider that submits claims to the Medicare program must ensure that its services are billed appropriately. Falsely admitting people to hospice care who did not qualify for the benefit exposed these patients to potential harm and contributes to the soaring costs of health care for everyone."
As part of the settlement, SouthernCare will enter into a Corporate Integrity Agreement with the Office of Inspector General (OIG), Department of Health and Human Services (HHS), to address the allegations raised in the qui tam complaints.
"Today’s Corporate Integrity Agreement contains rigorous provisions specifically designed to ensure SouthernCare’s future compliance with Medicare and Medicaid hospice eligibility requirements," said Daniel R. Levinson, Inspector General for HHS. "This agreement demonstrates OIG’s commitment to protect the integrity of federal health care programs."
The investigation was jointly handled by the U.S. Attorney’s Office for the Northern District of Alabama, the U.S. Attorney’s Office for the Northen District of Georgia, the Justice Department’s Civil Division, Office of the Inspector General of the Department of Health and Human Services and the FBI.
West Point Employee Charged in Nearly $3 Million <br /> Embezzlement SchemeRead the Press Release
WASHINGTON – A Highland Falls, N.Y., woman was arrested today and charged in a criminal complaint for her role in a scheme to defraud the U.S. government by authorizing nearly $3 million in payments to a non-existent corporation for staff training that she knew never occurred at the U.S. Military Academy in West Point, N.Y. (West Point), Acting Assistant Attorney General Matthew Friedrich of the Criminal Division and Brig. Gen. Rodney Johnson, Commander of the U.S. Army Criminal Investigation Command announced.
According to a criminal complaint filed in U.S. District Court in the District of Columbia, Bobbie Cyana Ryan, 50, worked in the Information, Education and Technology Division in the Office of the Dean at West Point. According to the complaint, Ryan was responsible for coordinating information technology training programs for West Point staff. Based on irregularities found during a routine audit, U.S. Army investigators discovered that Ryan, acting as the requesting and approving official, used her government purchase card and cards of her unknowing subordinates to authorize $2.9 million in payments to CWG Enterprises. The complaint alleges that the payments were purportedly for either on-site training instructors or training reference materials when, in fact, no personnel were ever trained and no materials were ever provided.
According to the complaint, U.S. Army investigators subsequently discovered that Ryan conducted financial transactions and identified herself as doing business as CWG Enterprises. The complaint alleges that Ryan used a rented mail box as the company address for CWG Enterprises. Based on false invoices allegedly created by Ryan, transfers of government funds were allegedly made from a bank in Washington, D.C. to a bank account in the name of "Bobbie C. Ryan dba CWG Enterprises" at a bank in New Windsor, N.Y. Once the funds arrived in the purported CWG Enterprises bank account, Ryan allegedly transferred the funds to her personal account and then made substantial cash withdrawals.
The court today ordered that Ryan be released on a $30,000 bond and her travel was restricted pending her next court appearance, scheduled for Jan. 29, 2009, in U.S. District Court for the District of Columbia.
Charges in a criminal complaint are merely allegations and defendants are presumed innocent unless and until proven guilty in a court of law.
The case is being investigated by the U.S. Army Criminal Investigation Command, Major Procurement Fraud Unit, Hartford Fraud Resident Agency. The case is being prosecuted by Senior Trial Attorney Andrew Levchuk of the Criminal Division’s Public Integrity Section, headed by Section Chief William M. Welch II, with assistance from the U.S. Attorney’s Office for the Southern District of New York.
Six Telemarketers Charged in Florida with Business Opportunity ScamRead the Press Release
WASHINGTON – Five people have been indicted by a federal grand jury in Miami relating to the individuals’ participation in a fraudulent business opportunity sales operation, the Justice Department and the U.S. Postal Inspection Service announced today. A sixth individual was also charged in a criminal information.
According to the indictment, the defendants were involved with a firm called Global Resources Inc. The nine-count indictment charges five of the defendants with conspiracy to commit mail fraud and wire fraud. Some of the defendants are also charged with mail fraud, wire fraud, and aiding and abetting.
According to the indictment and information, from approximately June 2004 through Oct. 2004, Stewart Pope of Seminole, Fla.; John Maginnis of Miami; Lisa Cohan of Ft. Lauderdale; Laura Fadlon aka "Laura Sadlon" of North Miami; Larry Taylor and Frank DiMezza, both of Long Beach, Calif.; and others engaged in the fraudulent sale of business opportunities through Global. The information charges a sixth defendant, John Maginnis, with a single count of conspiracy to commit mail fraud and wire fraud.
The company purportedly sold prepaid business opportunities, along with assistance in establishing, maintaining and operating a prepaid business. According to the defendants and their co-conspirators, a business opportunity purchaser would earn substantial profits when members of the public purchased prepaid cell phones, phone minutes and various prepaid products and services from a distributor’s kiosk terminal.
Global promoted the business opportunities to consumers across the country through television commercials and other media, touting the profits that could be earned by purchasing a distributorship and urging consumers to call a telephone number that appeared in the advertisements. Potential purchasers were told that for a purchase price of approximately
$15,000 Global would provide three terminals, numerous prepaid cell phones and advertising material. Global salespeople told consumers that Global would find viable, high-traffic locations to place the terminals, relocate any terminals that underperformed, only sell distributorships in a limited geographic area, and provide ongoing technical support and customer service. According to the charges, these representations were all false. According to the indictment, the defendants and others also falsely represented to potential purchasers that they would earn their investment back in approximately six months to a year.
Defendants Lisa Cohan, Larry Taylor and John Maginnis were Global salespeople, referred to as closers. Closers made several misrepresentations about the profits that would be generated by the business, territorial limitations, the viability of locations and ongoing customer support and technical assistance that Global would provide. The closers also gave out the names of the company’s references, who falsely claimed to be successful Global distributors.
Defendant Stewart Pope was listed as Global’s president in the company’s marketing materials, communications with potential customers and disclosure documents. In reality, Pope was not an owner or principal of Global. Pope’s name was used to hide the involvement of Global’s true owners and principals, who, among other things, had a history of selling various sorts of failed business opportunities.
Defendants Frank DiMezza and Laura Fadlon were Global references who fraudulently held themselves out as successful Global distributors. In reality, neither DiMezza nor Fadlon ever purchased a Global distributorship, and they were paid to lie to prospective purchasers.
If convicted, the defendants face a maximum statutory term of imprisonment of 20 years on each count, a possible fine, and mandatory restitution.
It should be remembered that an indictment and information are not evidence of criminal activity, and all defendants are presumed innocent until proven otherwise.
Seven Defendants Convicted for Participation in International Child Exploitation EnterpriseRead the Press Release
WASHINGTON AND PENSACOLA, Fla. – Seven U.S. defendants charged for their activity in a global child pornography trafficking enterprise were convicted today in the Northern District of Florida following a six-day jury trial before Senior U.S. District Judge Lacey A. Collier, Acting Assistant Attorney General Matthew Friedrich of the Criminal Division, Acting U.S. Attorney for the Northern District of Florida Thomas F. Kirwin and FBI Executive Assistant Director J. Stephen Tidwell announced.
The federal jury convicted the defendants of 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, receiving child pornography and obstruction of justice.
"This was a wide-scale, high volume, international trafficking enterprise that used sophisticated computer encryption technology and file-sharing techniques," said Acting Assistant Attorney General Matthew Friedrich of the Criminal Division. "Those who operate such enterprises can expect law enforcement, not only here but abroad, to react swiftly and aggressively, as we have done here."
The defendants convicted at trial were: James Freeman of Santa Rosa Beach, Fla.; Gary Lakey of Anderson, Ind.; Marvin Lambert of Indianapolis; Neville McGarity of Medina, Texas; Warren Mumpower of Spokane, Wash.; Daniel Castleman of Lubbock, Texas; and Ronald White of Burlington, N.C.
Seven additional U.S. defendants, also indicted in the case, previously pleaded guilty to offenses related to the child pornography enterprise. Members of the highly-sophisticated international network were charged in a 40-count superseding indictment on March 19, 2008.
Evidence presented at trial, including approximately 50 witnesses and 500 exhibits, established that the defendants participated in a well-organized criminal enterprise whose purpose was to proliferate child sex abuse images to its membership during a two-year period. According to trial testimony, 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 videos of child sexual abuse before it was dismantled by law enforcement.
Each defendant convicted at trial faces a minimum prison sentence of 20 years and a maximum of life in prison, in addition to statutory fines and the possibility of a lifetime period of supervised release following completion of any prison sentence. Sentencing is set April 14, 2009, for all defendants convicted today.
On the return of the guilty verdicts, Acting U.S. Attorney Kirwin said, "This jury verdict signals, once again, the community’s reprehension for the culture of abuse and torture that is child pornography. I am as proud as I can be of our investigative and trial team for the hard work and countless hours they devoted to the investigation and successful prosecution of this scourge. This was truly a team effort by U.S. and foreign law enforcers and by prosecutors from our office and the Criminal Division’s Child Exploitation and Obscenity Section. I want to specifically commend the dedication and superlative efforts of Assistant U.S. Attorney David L. Goldberg, CEOS Trial Attorney LisaMarie Freitas, Appellate Assistant U.S. Attorney Robert G. Davies, and Queensland, Australia Constable Brenden Power, and the agents of the Federal Bureau of Investigation."
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.
Second Former State Department Employee Pleads Guilty to Illegally Accessing Confidential Passport FilesRead the Press Release
WASHINGTON – A second former State Department employee pleaded guilty today to illegally accessing hundreds of confidential passport application files, Acting Assistant Attorney General Matthew Friedrich of the Criminal Division announced.
Dwayne F. Cross, 41, of Upper Marlboro, Md., pleaded guilty before U.S. Magistrate Judge John M. Facciola in U.S. District Court for the District of Columbia to a one-count criminal information charging him with unauthorized computer access.
According to court documents, from August 2001 through February 2008, Cross served as an administrative assistant in the Bureau of Consular Affairs, Overseas Citizens Services, Children's Issues at the State Department. He returned to the State Department in March 2008 as a contract employee working as a contract specialist for the acquisitions office. According to information contained in plea documents, Cross admitted he had access to official State Department computer databases in the regular course of his employment, including the Passport Information Electronic Records System (PIERS), which contains, among other data, all imaged passport applications dating back to 1994. The imaged passport applications on PIERS contain, among other things, a photograph of the passport applicant as well as certain personal information including the applicant’s full name, date and place of birth, current address, telephone numbers, parent information, spouse’s name and emergency contact information. These confidential files are protected by the Privacy Act of 1974, and access by State Department employees is strictly limited to official government duties.
In pleading guilty, Cross admitted that between January 2002 and August 2007, he logged onto the PIERS database and viewed the passport applications of more than 150 celebrities, actors, musicians, comedians, models, politicians, athletes, members of the media, family members, friends, associates and other individuals. Cross admitted that he had no official government reason to access and view these passport applications, but that his sole purpose in accessing and viewing these passport applications was idle curiosity.
Cross is the second former State Department employee to plead guilty in this continuing investigation. On Sept. 22, 2008, Lawrence C. Yontz, a former Foreign Service Officer and intelligence analyst pleaded guilty to unlawfully accessing hundreds of confidential passport files. Yontz was sentenced on Dec. 19, 2008, to 12 months of probation and ordered to perform 50 hours of community service. Sentencing for Cross is scheduled for March 23, 2009.
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. The case is being investigated by the State Department Office of Inspector General.
Information
Agreement
Factual BasisJustice Department Settles Civil Contempt Claim<br /> Against AT&T Inc.Read the Press Release
WASHINGTON – AT&T Inc. has agreed to pay more than $2 million as part of a civil settlement with the Department of Justice that resolves AT&T’s alleged violations of two court orders entered in connection with AT&T’s acquisition of Dobson Communications Corporation.
The Department today filed a petition in the U.S. District Court for the District of Columbia asking it to find AT&T in civil contempt of a 2008 consent decree and a related court order. At the same time, the Department filed a settlement agreement and order, subject to court approval, that would resolve the Department’s concerns. The payment to the United States includes reimbursement to the government for the cost of its investigation into AT&T’s alleged violations.
"It is imperative that companies fully abide by their court-ordered obligations in order for our settlements to be effective in preserving competition and protecting consumers," said Deborah A. Garza, Acting Assistant Attorney General in charge of the Department’s Antitrust Division. "When companies fail to comply with a court order, the Antitrust Division will take swift and certain action to ensure that companies fulfill their responsibilities."
Under the consent decree entered by the court in March 2008, AT&T was required to divest mobile wireless telecommunications businesses in three rural service areas (RSAs) – two in Kentucky and one in Oklahoma. Pending divestiture, a management trustee was appointed to oversee the businesses to be divested. Under the consent decree and a related court order, AT&T was required to take all steps necessary to ensure that the divested businesses were operated independently of AT&T and that AT&T did not influence how they were managed. AT&T was also required to take all reasonable efforts to preserve the confidentiality of information material to the operation of the divested businesses and not give unauthorized personnel access to such information.
According to the petition filed by the Department, AT&T failed to fulfill its obligations under the two court orders. The petition alleges that AT&T failed to separate confidential customer account information of the divested businesses from its own customer records and to take other actions needed to prevent unauthorized disclosure. Consequently, AT&T personnel obtained unauthorized access to the divested businesses’ competitively sensitive customer information and in some situations used it to solicit and win away the divested businesses’ customers. The petition further alleges that AT&T, without authorization by the management trustee, waived early termination fees for several customers of the divested businesses to facilitate switching their wireless service from the divested businesses to AT&T.
Certain provisions of the orders were adopted by the Federal Communications Commission (FCC) in its Nov. 15, 2007 order approving the merger of AT&T and Dobson. The Department has coordinated with the FCC throughout its investigation.
AT&T, headquartered in Dallas, is the largest provider of mobile wireless voice and data services in the United States, serving approximately 73 million customers.