District Not Recorded
The source did not name an office we could identify. These records remain unassigned rather than guessed.
Justice Department and EPA Reach Clean Air Act Settlement with Advanced Flow Engineering for Selling Defeat DevicesRead the Press Release
The U.S. Department of Justice (DOJ) and the U.S. Environmental Protection Agency (EPA) announced that Advanced Flow Engineering (aFe), an automotive parts manufacturer and distributor based in Corona, California, has agreed to stop manufacturing and selling parts for motor vehicles that, when installed, defeat, disable or override EPA-approved emission controls and harm air quality.
The complaint, filed simultaneously with the settlement, alleges that aFe’s manufacture and sale of these parts violate the Clean Air Act. From 2014 to the present, aFe manufactured and/or sold over 63,000 of these parts, widely known as “defeat devices.” The company will also pay a $250,000 penalty, which was based on its financial situation.
“The products that aFe manufactured and sold jeopardized the public health by causing illegal emissions of dangerous pollutants, including particulate matter and nitrogen oxides (NOx),” said Acting Assistant Attorney General Jean E. Williams of the Justice Department’s Environment and Natural Resources Division (ENRD). “This case demonstrates that we will undertake necessary enforcement measures to eliminate the manufacture and sale of such devices to ensure that the vehicles on our roads meet required emission standards.”
“Today’s settlement will prevent the future sale of approximately 12,000 illegal product units per year,” said Acting Regional Administrator Deborah Jordan for EPA’s Pacific Southwest. “The increased particulate matter and NOx pollution stemming from defeat devices threatens the health of everyone, especially those with pre-existing health conditions, children and older adults. We also know that air pollution can lead to worse outcomes from COVID-19. It is unacceptable that the same communities that are being hit the hardest by the COVID-19 pandemic are often the same communities that bear the disproportionate impact of air pollution.”
Based on prior sales that are now prohibited under the settlement, EPA estimates that this enforcement action will prevent the release of approximately 112 million pounds of NOx and one million pounds of particulate matter from vehicles that would have been installed with aFe’s defeat devices.
Tampering with diesel and gasoline-powered vehicles by installing defeat devices can cause large amounts of NOx and particulate matter emissions, both of which contribute to serious public health problems. These include premature death, aggravation of respiratory and cardiovascular disease, aggravation of existing asthma, acute respiratory symptoms, chronic bronchitis and decreased lung function. Numerous studies also link diesel exhaust to increased incidence of lung cancer. Respiratory issues disproportionately affect families, especially children, living in underserved communities overburdened by pollution. Stopping the sale and use of defeat devices will help reduce harmful air pollution that exacerbates the health effects of pollutant exposures.
The consent decree for this settlement was lodged in the U.S. District Court for the Central District of California and is subject to a 30-day public comment period and final court approval. A copy of the decree will be available on the Department of Justice website at: www.justice.gov/enrd/consent-decrees.
The enforcement action is part of EPA’s National Compliance Initiative that targets companies that manufacture, sell and install parts that disable vehicle emission controls. To learn more, visit: https://www.epa.gov/enforcement/national-compliance-initiative-stopping-aftermarket-defeat-devices-vehicles-and-engines
If you suspect someone is manufacturing, selling or installing illegal defeat devices, or is tampering with emission controls, tell the EPA by writing to [email protected].
Former Mississippi Police Officer Pleads Guilty to Excessive Force ChargeRead the Press Release
The Justice Department announced today that a former officer with the Meridian, Mississippi Police Department pleaded guilty to using excessive force against a man during a vehicle stop and arrest.
According to court documents and statements made in court, Daniel Starks of Meridian, Mississippi, shoved the victim twice as he was getting handcuffed by another officer and then unlawfully used his taser against the victim, even though the victim was compliant and handcuffed. As a result of the tasing, the victim immediately fell to the ground and groaned in pain, his hands restrained behind his back and unable to break his fall. While the victim was still on the ground, Starks pointed the taser at him and demanded that he stand up or else he would be tased again.
“Law enforcement officials who violate people’s federal civil rights are not above the law. This defendant is being held accountable for exceeding his authority and his power when he violated the victim’s civil rights,” said Assistant Attorney General Kristen Clarke for the Department of Justice’s Civil Rights Division. “The Civil Rights Division will continue to investigate and prosecute cases involving police officers who willfully violate the constitutional rights of others.”
“Those who abuse their positions of power will be prosecuted according to the law,” said Acting U.S. Attorney Darren J. LaMarca for the Southern District of Mississippi. “This defendant chose to violate his duty and the law, the very law he swore to uphold, by his wanton and violent act against the victim. Justice is served.”
“Law enforcement officers take an oath to serve and protect their communities,” said Acting Special Agent in Charge Paul Brown of the FBI Jackson Field Office. “When an officer breaks this oath and abuses the authority given to them, they must be held accountable. Investigating violations of civil rights will continue to be a priority for the FBI.”
A sentencing hearing is scheduled for Oct. 26. The defendant faces a statutory maximum punishment of 10 years in prison and a $250,000 fine.
This case was investigated by the Jackson Division of the FBI. Assistant U.S. Attorney Chris Wansley of the Southern District of Mississippi and Special Litigation Counsel Julia Gegenheimer and Trial Attorney Cameron Bell of the Civil Rights Division are prosecuting the case.
Jury Convicts Washington, D.C., Man in Stolen Identity Tax Fraud SchemeRead the Press Release
A federal jury in Greenbelt, Maryland, convicted a Washington, D.C., man Friday of conspiring to commit theft of public money, theft of public money and aggravated identity theft.
According to court documents and the evidence introduced at trial, from 2011 to 2013, Devell Lincoln, 55, conspired with Stephanie Twyman and others to cash tax refund checks fraudulently obtained by filing false federal income tax returns in the names of other individuals with the IRS. In total, the conspirators cashed more than $500,000 in fraudulent refunds at a check-cashing business, and Lincoln deposited more than $150,000 in fraudulent refunds using bank accounts under his control.
From 2011 to 2013, false federal income tax returns were filed with the IRS using the names and Social Security numbers of unwitting taxpayers and seeking fraudulent refunds. When the refunds were received, Lincoln and his co-conspirators cashed the checks at a check-cashing business. In addition, from 2010 to 2014, Lincoln deposited fraudulent refunds into bank accounts under his control. While two of these accounts were in Lincoln’s name, one bank account was held in the name of a third party, who was deceased, and one was in the name of a company registered under the deceased person’s name, with the deceased person as the signatory.
Twyman pleaded guilty to theft of government money and aggravated identity theft on July 3, 2019, for her role in the refund scheme. She is scheduled to be sentenced at a later date.
Lincoln is scheduled to be sentenced at a later date and faces a statutory minimum of two years in prison for aggravated identity theft, a maximum sentence of five years for conspiracy, and a maximum sentence of 10 years for theft of public money. Lincoln also faces a period of supervised release, restitution, forfeiture and monetary penalties. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and Acting U.S. Attorney Jonathan Lenzner for the District of Maryland made the announcement.
IRS-Criminal Investigations and the Treasury Department’s Office of the Inspector General investigated the case.
Trial Attorney Abigail Burger Chingos of the Tax Division and Assistant U.S. Attorney Jessica C. Collins of the District of Maryland are prosecuting the case.
DOJ and HHS Issue Guidance on ‘Long COVID’ and Disability Rights Under the ADA, Section 504, and Section 1557Read the Press Release
Today, as we commemorate the 31st anniversary of the Americans with Disabilities Act (ADA), the U.S. Department of Justice (DOJ) and the U.S. Department of Health and Human Services (HHS) are jointly publishing guidance on how “long COVID” can be a disability under the ADA, Section 504 of the Rehabilitation Act and Section 1557 of the Affordable Care Act. The guidance is on the DOJ website at https://www.ada.gov/long_covid_joint_guidance.pdf - PDF and on the HHS website at https://www.hhs.gov/civil-rights/for-providers/civil-rights-covid19/index.html.
Some people continue to experience symptoms that can last weeks or months after first developing COVID-19. This can happen to anyone who has had COVID-19, even if the initial illness was mild. People with this condition are sometimes called “long-haulers” — and the condition they have is known as “long COVID.”
With the rise of long COVID as a persistent and significant health issue, the DOJ Civil Rights Division and the HHS Office for Civil Rights (OCR) have joined together to provide this new guidance. This guidance explains that long COVID can be a disability under the ADA, Section 504 of the Rehabilitation Act of 1973, and Section 1557 of the Affordable Care Act, and explains how these laws may apply. Each of these federal laws protects people with disabilities from discrimination. This guidance also provides resources for additional information and best practices.
“The ADA is one of our most transformative civil rights laws, helping to ensure that our schools, courthouses, townhalls, businesses and workplaces are open to all people, regardless of their disability status,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “This anniversary, we recognize the ongoing challenges to full equality, including COVID-19’s devastating and disproportionate impact on people with disabilities. As many of our neighbors find themselves with long-lasting effects from COVID-19, we are committed to making sure that people understand their rights under federal nondiscrimination laws. The Department of Justice will vigorously enforce the ADA and other federal civil rights laws to ensure that as the nation responds to, and recovers from, COVID-19, and that those with disabilities are full and equal partners in that recovery.”
“Some individuals recover quickly from COVID, but others experience debilitating long-term impairments that substantially limit major life activities,” said Acting Director Robinsue Frohboese of HHS’s Office of Civil Rights. “Today’s guidance makes clear that these individuals are entitled to equal opportunities and full participation in all aspects of life. We honor the 31st anniversary of the ADA, a law that established ‘a clear and comprehensive national mandate for the elimination of discrimination against individuals with disabilities,’ and deepen our commitment to enforcing federal civil rights laws. OCR is committed to advancing the principles of non-discrimination and equity and will continue to provide guidance so that consumers understand their rights and providers fulfill their obligations.”
“It’s critical that we ensure people who have disabilities as a result of long COVID are aware of their rights under federal nondiscrimination laws,” said Acting Administrator and Assistant Secretary Alison Barkoff for Aging at the Administration for Community Living at HHS. “It also is crucial that they know how to connect to services and supports available if they now need assistance to live in their own homes, go to school or work, or participate in their communities.”
This guidance, along with a directory of resources available through programs funded by the Administration for Community Living (ACL), was shared this morning by the White House as part of a comprehensive package of resources for people with long COVID, which you can find here: https://www.whitehouse.gov/briefing-room/statements-releases/2021/07/26/fact-sheet-biden-harris-administration-marks-anniversary-of-americans-with-disabilities-act-and-announces-resources-to-support-individuals-with-long-covid/.
The ACL directory of resources for those with long COVID may be found at: https://acl.gov/sites/default/files/COVID19/ACL_LongCOVID.pdf - PDF.
This guidance is one of many actions HHS has taken in recent months to address long COVID. In February HHS launched a new initiative to study long COVID. Led by NIH, the goal of the initiative is to learn more about how COVID-19 may lead to widespread and lasting symptoms, and to develop ways to treat or prevent these symptoms. In addition to the initiative, HHS, through the COVID-19 Health Equity Task Force and OCR, held listening sessions on long COVID with health advocates, and NIH held a workshop with experts to identify key gaps in knowledge about the condition.
Additional Resources
DOJ’s Civil Rights Division has a page on its ADA.gov website that discusses topics related to COVID-19 and the ADA: https://www.ada.gov/emerg_prep.html.
OCR has a webpage devoted to COVID-19 and civil rights issues: https://www.hhs.gov/civil-rights/for-providers/civil-rights-covid19/index.html.
The Centers for Disease Control and Prevention’s (CDC) website has a page on post-COVID conditions, which discusses long COVID: https://www.cdc.gov/coronavirus/2019-ncov/long-term-effects.html.
Other ACL resources and information about COVID-19 for people with disabilities can be found at: https://acl.gov/COVID-19.
ACL and OCR partnered to create a website that tells the story of how the ADA came to be, showcase some of the progress we have made as a country toward achieving its promise and illustrate a little bit of the work being done by ACL and OCR, as well as other partners within HHS and across government. That website can be found at: https://acl.gov/ada.
If you believe that you or another person has been discriminated against by an entity covered by the ADA, you may file a complaint with the Disability Rights Section (DRS) in the Department of Justice. Information about how to file a complaint is available at: https://www.ada.gov/fact_on_complaint.htm.
If you believe that you or another person has been discriminated against by an entity covered by federal civil rights laws, you may file a complaint with OCR. Information about how to file a complaint is available at: https://www.hhs.gov/ocr/complaints.
Attorney General Merrick B. Garland’s Statement on Aon and Willis Towers Watson Decision to Terminate Merger AgreementRead the Press Release
Attorney General Merrick B. Garland today released the following statement on Aon plc’s and Willis Towers Watson’s announcement that the firms agreed to terminate their planned $30 billion merger. The Department of Justice filed a civil antitrust lawsuit on June 16, 2021, to stop the merger, alleging that the combination of Aon and Willis Towers Watson, the second- and third-largest insurance brokers in the world, would reduce competition for the business of American companies, effectively consolidating the industry’s “Big Three” into a Big Two.
“This is a victory for competition and for American businesses, and ultimately, for their customers, employees and retirees across the country,” said Attorney General Merrick B. Garland. “American employees and retirees rely on dependable health care and retirement plans provided by their employers. Many of those employers, in turn, rely on insurance brokers like Aon and Willis Towers Watson for managing the complexities of these health and retirement benefits. Businesses also rely on Aon and Willis Towers Watson to compete for the bulk of their risk management portfolio, including property and casualty insurance. The decision to abandon this anticompetitive merger will help preserve competition in insurance brokering.
“The department is grateful for the team of dedicated lawyers, economists, paralegals and support staff who thoroughly investigated the merger and pursued litigation to block this combination for the benefit of American consumers.”
Attorney General Garland and Civil Rights Division Assistant Attorney General Clarke Commemorate the 31st Anniversary of the Americans with Disabilities ActRead the Press Release
Today, Attorney General Merrick B. Garland and Assistant Attorney General for the Civil Rights Division Kristen Clarke issued the following statements to mark the 31st Anniversary of the Americans with Disabilities Act (ADA), the nation’s preeminent civil rights law that provides equal opportunity for people with disabilities.
“Thirty-one years ago today, the Americans with Disabilities Act was signed into law with broad bipartisan support and it has been life-changing for people with disabilities,” said Attorney General Merrick B. Garland. “It ushered in a new era of greater participation, inclusion, independent living and opportunity. The ADA has helped knock down discriminatory barriers in employment, state and local government programs, and businesses. That has made it possible for generations of Americans with disabilities to contribute to their communities and achieve their full potential. The Justice Department will keep working tirelessly — marshalling all tools made possible by this groundbreaking law — to realize the ADA’s promise of equal opportunity for all people with disabilities.”
“The ADA is one of our most transformative civil rights laws, helping to ensure that our schools, courthouses, townhalls, businesses and workplaces are open to all people, regardless of their disability status,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “We know that much work remains to be done to achieve fully the goals underlying the ADA, but the department celebrates the progress that the ADA has made possible for millions of Americans, while continuing to fight for full access and opportunity for people with disabilities. This is the Civil Rights Division’s charge and this is our promise to every person with a disability across this country. We will not yield until the full measure of rights guaranteed by the ADA is a reality for all.”
This year, the Civil Rights Division has enforced the ADA to provide concrete changes in the lives of Americans with disabilities. The following are some examples of its work:
- The department recently secured a comprehensive settlement agreement with Amtrak that will provide equal access to rail travel for countless passengers with disabilities. Over the next 10 years, Amtrak will design at least 135 stations to be accessible, complete construction at 90 of those stations, and have at least 45 more under construction. Amtrak is also installing Passenger Information Display Systems to provide both audio and visual messages at 97 stations, which will benefit riders with vision or hearing disabilities. Amtrak also established a $2.25 million settlement fund to compensate people who were harmed by inaccessible stations while trying to travel by train.
- The department recently entered into a significant settlement agreement with North Dakota, a statewide agreement that will ensure adults with physical disabilities can receive community-based services instead of entering or remaining in nursing facilities. Under the agreement, more than 2,500 people with disabilities will receive services that will help them remain with their families and communities, while still receiving the care that they need.
- The department entered into a settlement agreement with Newton County, Arkansas and the Newton County Board of Elections to address polling place accessibility for people with disabilities. As part of its investigation, the department surveyed the county courthouse used for early voting and all 18 of the polling places used during the election. The County’s polling places contained architectural barriers and lacked functioning, accessible voting machines. The department’s agreement requires the County and the Board to provide accessible polling places. Through the department’s ADA Voting Initiative, we have surveyed over 2,400 polling places and increased polling place accessibility in over 50 jurisdictions.
- The department’s recent settlement agreements with the City of Killeen and Central Texas College of Killeen are removing physical barriers to accessibility. For example, the college is working to make parking, entrances, restrooms, service counters, drinking fountains and routes to and within buildings accessible to people with disabilities. It is also providing the required wheelchair and companion seating in assembly areas, such as auditoriums. The city is taking similar steps to make buildings accessible, including its City Hall, police stations, libraries, community centers and emergency shelters. The city is also improving communication services for individuals with hearing disabilities, enhancing website accessibility and implementing a plan for sidewalk accessibility.
For more information about the ADA, please visit www.ada.gov or call the department’s toll-free ADA Information Line at 800-514-0301 (TDD 800-514-0383). For more information on the Civil Rights Division, please visit www.justice.gov/crt.
The Attorney General’s video marking the 31st Anniversary can be found here.
Texas Business Owner Pleads Guilty to Tax FraudRead the Press Release
A Texas resident pleaded guilty Thursday to filing a false individual income tax return.
According to court documents, between January 2009 and December 2014, Charles D. Holley, aka Charlei Diwan Holley, owned and operated a data brokerage business. As part of this business, Holley purchased data information from state motor vehicle agencies, which she re-sold to various buyers. Holley set up bank accounts in which to deposit the proceeds of her business activity, including an offshore bank account in Nicosia, Cyprus. In February 2012, Holley filed a false individual tax return with the IRS that did not disclose that she was engaged in or receiving income from her data brokerage business. In total, Holley caused a tax loss to the IRS of $202,196.
Holley is scheduled to be sentenced on Oct. 20. She faces a possible maximum penalty of three years in prison, as well as a period of supervised release, restitution and monetary penalties. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and Acting U.S. Attorney Jennifer Lowery for the Southern District of Texas made the announcement.
IRS-Criminal Investigation is investigating the case.
Trial Attorneys Robert Kemins and Ignacio Perez De La Cruz of the Tax Division are prosecuting the case.
North Carolina Tax Preparer Sentenced to Prison for Conspiring to Defraud the IRSRead the Press Release
A North Carolina return preparer was sentenced today to 15 months in prison for conspiring to defraud the IRS.
According to court documents and statements made in court, from 2012 through 2016, Audrey Renetta Odom, of Durham, conspired with Karen Jones and Andrea Pasley to prepare false returns for clients. The returns fraudulently lowered the clients’ tax liabilities or inflated their refunds by claiming false education credits or dependents or by manipulating the clients’ income to qualify for larger earned income tax credits. Odom admitted that some clients were charged up to $2,000 for preparing returns. Based on an analysis of the falsely claimed education credits, the tax loss is over $1.2 million.
Jones pleaded guilty to conspiracy to defraud the IRS on Nov. 5, 2020, and was sentenced to 22 months in prison for her role in the conspiracy. Pasley pleaded guilty to conspiracy to defraud the IRS on May 6 and is scheduled to be sentenced on Oct. 29.
In addition to the term of imprisonment, U.S. District Judge William L. Osteen Jr. ordered Odom to serve three years of supervised release and to pay approximately $1,239,847 in restitution to the United States.
Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and Acting U.S. Attorney Sandra J. Hairston for the Middle District of North Carolina made the announcement.
IRS-Criminal Investigation investigated the case.
Assistant Chief Todd Ellinwood and Trial Attorney Kavitha Bondada of the Tax Division prosecuted the case.
New Jersey Man Convicted of Conspiring to Defraud IRS in Mortgage-Withholding Tax SchemeRead the Press Release
A federal jury convicted a New Jersey man today of conspiring with individuals in Georgia, North Carolina, Virginia and New York in a “mortgage recovery” tax fraud scheme and for assisting in the filing of false returns, among other tax offenses.
According to court documents and evidence presented at trial, from March 2015 through 2016, John Barry Jr., of Pemberton, and his co-conspirators falsely represented to clients that they could extinguish their outstanding mortgage debts by obtaining tax refunds. To carry out the scheme, Barry and his co-conspirators filed forms with the IRS that fraudulently claimed that financial institutions had withheld and paid over to the IRS substantial taxes on behalf of Barry’s clients, even though no such payments had occurred. Barry then directed clients to file false tax returns that claimed significant refunds based upon the bogus tax withholdings. These false withholding claims caused the IRS to issue more than $3 million in refunds to clients. Barry typically charged each client a fee of between 20 and 35 percent of the refund the client obtained, and then split fees with some co-conspirators.
In addition to his participation in the “mortgage recovery scheme,” Barry did not file his own 2016 return despite earning income in excess of filing threshold, nor did Barry report or pay taxes on the income generated from the scheme in that tax year.
Barry is scheduled to be sentenced on December 1 and faces a maximum penalty of five years’ imprisonment for conspiracy to defraud the IRS, three years’ imprisonment for each count of aiding and assisting the filing of false tax returns, three years’ imprisonment for obstructing the internal revenue laws, and one year of imprisonment for failing to file a tax return. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division made the announcement.
IRS-Criminal Investigations investigated the case.
Trial Attorneys Sean M. Green and Samuel B. Bean of the Justice Department’s Tax Division are prosecuting the case.
Justice Department Obtains $50,000 Settlement Against Dallas Towing Company for Illegally Selling Five Cars Owned by U.S. ServicemembersRead the Press Release
The Justice Department today announced that Dallas towing company United Tows LLC has agreed to enter into a consent order to resolve allegations that it illegally sold five servicemember-owned vehicles, in violation of the Servicemembers Civil Relief Act (SCRA).
The SCRA is a federal law that provides a variety of financial and housing protections to members of the U.S. military. The law prohibits a towing company from selling a vehicle owned by a servicemember unless it first obtains a court order allowing it to do so.
The department filed a lawsuit against United Tows on Sept. 28, 2020, alleging that the company auctioned a car belonging to a man who was attending U.S. Air Force basic training in San Antonio, Texas. The complaint alleges that when the servicemember learned that his vehicle had been towed, he contacted United Tows and told them that he was out of town on active duty. According to the complaint, the owner of United Tows responded by telling the servicemember that she did not believe that he was in the military. United Tows sold the vehicle at auction without a court order while the servicemember was still completing his training requirements.
A subsequent investigation by the department revealed that United Tows had illegally sold at least four other vehicles owned by active duty servicemembers between Oct. 4, 2014, and April 26, 2019.
Under the proposed settlement, which is subject to approval by the U.S. District Court for the Northern District of Texas, United Tows must adopt new policies and implement new training requirements. United Tows will also be required to pay a total of $50,000: $20,000 in compensation to the originally identified servicemember; a $20,000 fund to be shared by the four additional servicemembers; and a $10,000 civil penalty to the U.S. Treasury.
“United Tows not only disregarded the legal rights of servicemembers, it made hurtful and dismissive comments about a member’s military service,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “The members of our armed forces selflessly devote themselves to the defense of our nation and are deserving of our respect and utmost consideration. The Department of Justice remains committed to the vigorous enforcement of the SCRA and all other laws that protect our servicemembers.”
“United Tows violated a victim’s rights while he was selflessly serving his country,” said Acting U.S. Attorney Prerak Shah for the Northern District of Texas. “We were appalled to learn that this Airman came home from basic training to find his car sold at auction. The men and women of our armed forces represent the best among us, and we are proud to enforce the SCRA and other laws designed to protect them.”
Servicemembers and their dependents who believe their SCRA rights have been violated should contact the nearest Armed Forces Legal Assistance Program Office. Office locations can be found at http://legalassistance.law.af.mil/.
The Justice Department’s enforcement of the SCRA is conducted by the Civil Rights Division’s Housing and Civil Enforcement Section and U.S. Attorney’s Offices throughout the country. Since 2011, the department has obtained over $474 million in monetary relief for over 120,000 servicemembers through its enforcement of the SCRA. Additional information on department’s enforcement of the SCRA and other laws protecting servicemembers is available at www.servicemembers.gov.
Interface Rehab to Pay $2 Million to Resolve False Claims Act AllegationsRead the Press Release
Interface Rehab (Interface), headquartered and operating in California, has agreed to pay $2 million to resolve allegations that it violated the False Claims Act by causing the submission of claims to Medicare for rehabilitation therapy services that were not reasonable or necessary.
The settlement resolves allegations that, from Jan. 1, 2006, through Oct. 10, 2014, Interface knowingly submitted or caused the submission of false claims for medically unreasonable and unnecessary “Ultra High” levels of rehabilitation therapy for Medicare Part A residents at 11 Skilled Nursing Facilities. These facilities include Colonial Care Center, Covina Rehabilitation Center, Crenshaw Nursing Home, Green Acres Lodge, Imperial Care Center, Laurel Convalescent Hospital, Live Oak Rehabilitation Center, Longwood Manor Convalescent Hospital, Monterey Care Center, San Gabriel Convalescent Center, and Whittier Pacific Care Center. In July 2020, the Department of Justice announced that Longwood Management Corporation and 27 affiliated skilled nursing facilities agreed to pay $16.7 million to the United States to resolve allegations that they violated the False Claims Act by submitting false claims to Medicare for rehabilitation therapy services that were not reasonable or necessary. The settlement announced today resolves Interface’s role in that alleged conduct.
During the relevant time period, Medicare reimbursed skilled nursing facilities at a daily rate that reflected the skilled therapy and nursing needs of qualifying patients. The greater the patient’s needs, the higher the level of Medicare reimbursement. The highest level of Medicare reimbursement for skilled nursing facilities was for “Ultra High” therapy patients, who required a minimum of 720 minutes of skilled therapy from two therapy disciplines (e.g., physical, occupational or speech therapy), one of which had to be provided five days a week.
The United States contends that Interface pressured therapists to increase the amount of therapy provided to patients in order to meet pre-planned targets for Medicare revenue. These alleged targets could only be achieved by billing for a high percentage of patients at the “Ultra High” level without regard to patients’ individualized needs.
“This settlement reflects our continuing efforts to protect patients and taxpayers by ensuring that the care provided to beneficiaries of government-funded health care programs is dictated by clinical needs, not a provider’s fiscal interests,” said Acting Assistant Attorney General Brian M. Boynton for the Department of Justice’s Civil Division. “Rehabilitation therapy companies provide important services to our vulnerable elderly population, but they will be held to account if they provide therapy services based on maximizing revenue rather than the interests of their patients.”
“The claims that patients required ultra-high levels of care appear to be driven solely by a desire to send ultra-high bills to Medicare,” said Acting U.S. Attorney Tracy L. Wilkison for the Central District of California. “This case is further proof that the government will vigorously pursue those who attempt to cheat the taxpayer-funded system that pays for medical care for millions of Americans, sometimes with the help of whistleblowers who shine a light on fraud.”
“Our agency will continue to aggressively investigate health care providers that attempt to boost their profits by falsely billing federal health care programs for medically unnecessary services,” said Special Agent in Charge Timothy B. DeFrancesca of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG). “We will not tolerate such fraud schemes, which undermine medical decision-making and the public's trust in the health profession.”
“This multimillion-dollar settlement agreement signifies an important conclusion to the government’s investigation into Interface Rehab’s dubious business practices that tainted the integrity of federal healthcare programs, including the Department of Defense's TRICARE program, by unnecessarily inflating costs,” said Paul K. Sternal, Deputy Director of the Defense Criminal Investigative Service (DCIS). “DCIS is committed to working with its law enforcement partners to protect the healthcare interests of our military service members, their families and American taxpayers.”
This civil settlement includes the resolution of claims brought under the qui tam or whistleblower provisions of the False Claims Act by Keith Pennetti, a former Director of Rehab at Interface. Under those provisions, a private party can file an action on behalf of the United States and receive a portion of any recovery. Mr. Pennetti will receive $360,000 of the settlement proceeds. The qui tam case is captioned United States ex rel. Pennetti v. Interface Rehab, et al., No. CV-14-4133 (C.D. Cal.).
The resolution obtained in this matter was the result of a coordinated effort between the Civil Division’s Commercial Litigation Branch, Fraud Section, and the U.S. Attorney’s Office for the Central District of California, with assistance from the HHS-OIG and DCIS.
The investigation and resolution of this matter illustrate the government’s emphasis on combating health care fraud. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse and mismanagement can be reported to the Department of Health and Human Services at 800-HHS-TIPS (800-447-8477).
The matter was investigated by Trial Attorney Amy Likoff and Assistant U.S. Attorney John Lee of the U.S. Attorney’s Office for the Central District of California.
The claims resolved by the settlement are allegations only, and there has been no determination of liability.
Former Alabama Correctional Supervisor Convicted for Allowing Inmate AbuseRead the Press Release
After a three-day trial, a federal jury convicted former Alabama Department of Corrections (ADOC) shift commander Willie Burks, 42, of failing to stop an officer under his command from assaulting an inmate at ADOC’s Elmore Correctional Facility.
The evidence at trial established that when Burks watched calmly as his subordinate, Sergeant Ulysses Oliver, took a handcuffed and compliant inmate out of an observation room, threw him onto the ground, and then punched, kicked, and beat him with a baton. Rather than intervene, as Burks had been trained to do, Burks stood silent until the end of the beating, at which time he commented, “That’s fair.” When Oliver turned himself in for using excessive force, triggering an investigation, Burks instructed Oliver to write in his report that Burks had told him to stop, even though that was not true, in order to cover up his failure to intervene.
“The Constitution requires officers to take reasonable steps to stop excessive force when they know of it and have the power to stop it,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “Defendant Burks defied the Constitution, and ignored his oath as a law enforcement officer, when he casually watched a handcuffed and defenseless inmate in his custody being assaulted by an officer under his command. We stand ready to hold officers who commit federal civil rights violations inside of jails and prisons accountable for their misconduct.”
“Correctional officers have an incredibly difficult and important job,” said Acting U.S. Attorney Sandra J. Stewart for the Middle District of Alabama. “Although a vast majority of them serve with honor, cases like this damage public trust and make the job they do more difficult. When officers abandon their oath to protect and serve, and turn a blind eye to criminal conduct, they must be held accountable. This office is committed to prosecute anyone who violates the law.”
“When a law enforcement officer accepts his or her oath of office, they also accept the higher standard they must adhere to,” said FBI Special Agent in Charge James Jewell of the FBI’s Mobile Division. “The abuse of prisoners should not, and will not, be tolerated by the men and women of the FBI and their work in this case was exemplary. The cooperation of the multiple agencies involved in this case, and most specifically the Alabama Department of Corrections, is a testament to their dedication to the administration of justice.”
“We condemn in the strongest possible terms Burks’ behavior and blatant violation of his sworn oath to serve,” said Chief Law Enforcement Officer Arnaldo Mercado for the Alabama Department of Corrections’ Law Enforcement Services Division. “We extend our thanks to the DOJ for its assistance in bringing forth justice in this case.”
Burks is the fourth correctional officer to be convicted in federal court in connection with this assault. Former ADOC Sergeant Ulysses Oliver previously pleaded guilty for assaulting the inmate, and former Corrections Officers Briana Mosley and Leon Williams, who were also present during the assault, previously pleaded guilty for failing to intervene.
Burks will be sentenced in November. He faces a statutory maximum sentence of 10 years in prison.
This case was investigated by the FBI’s Mobile Division and ADOC’s Law Enforcement Services Division. It was prosecuted by Assistant U.S. Attorney Eric Counts of the Middle District of Alabama, and Trial Attorneys Katherine DeVar and David Reese of the Justice Department’s Civil Rights Division.
Separately, the Department of Justice is prosecuting a civil case against Alabama and ADOC that alleges a pattern or practice of excessive force by ADOC security staff in violation of the United States Constitution. See United States v. Alabama, No. 2:20-cv-01971-RDP (N.D. Ala.).
Amazon Marketplace Seller Pleads Guilty to Price Fixing DVDs and Blu-ray DiscsRead the Press Release
A Tennessee man pleaded guilty today to fixing the prices of DVDs and Blu-ray Discs sold on Amazon Marketplace.
According to court documents filed in Knoxville, David Camp was charged with conspiring with others to fix prices of DVDs and Blu-ray Discs sold through Amazon Marketplace. The price-fixing conspiracy was ongoing from at least as early as May 2018 until at least Oct. 29, 2019. Camp is the first individual to be charged and the first individual to plead guilty in the ongoing investigation.
“American consumers deserve the benefits of competitive pricing, whether they’re shopping in brick-and-mortar stores or in an online marketplace,” said Acting Assistant Attorney General Richard A. Powers of the Justice Department’s Antitrust Division. “By their actions, the defendant and his co-conspirators denied purchasers of DVDs and Blu-ray Discs free and open competition, and instead lined their own pockets. The division remains dedicated to safeguarding online sales from collusion, especially as online shopping becomes increasingly ubiquitous.”
According to the one-count information, Camp and his co-conspirators agreed to raise and maintain the prices of DVDs and Blu-rays sold in their Amazon Marketplace stores. Amazon Marketplace is an e-commerce platform that enables third-party vendors to sell new or used products alongside Amazon’s own offerings. Amazon Marketplace is owned and operated by Amazon.com Inc.
“Honest, competitive pricing of goods allows consumers to purchase products at fair market value, which provides an overall benefit to the individual customer and the market as a whole,” said Assistant Director in Charge William F. Sweeney Jr. of the FBI’s New York Field Office. “Partnering with competitors to fix prices of goods at higher-than-necessary rates removes this protection for consumers — it’s also illegal, whether it happens on an online platform or in a face-to-face transaction. Today’s guilty plea should remind other like-minded individuals that they will eventually have to answer for this type of behavior.”
“Activities related to collusion, bid rigging and market allocation do not promote an environment conducive to open competition, which harms the consumer,” said Acting Executive Special Agent in Charge Steven Stuller of the U.S. Postal Service (USPS) Office of Inspector General. “Along with the Department of Justice and our federal law enforcement partners, the USPS Office of Inspector General will aggressively investigate those who would engage in this type of harmful conduct.”
A criminal violation of the Sherman Act carries a maximum sentence of 10 years in prison and a $1 million criminal fine for individuals. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
The Antitrust Division’s Chicago Office is prosecuting the case, which was investigated with the assistance of the FBI’s New York Field Office and the USPS Office of Inspector General’s Great Lakes Regional Investigations Office in Chicago.
Anyone with information concerning price fixing or other anticompetitive conduct related to the sale of DVDs, Blu-rays or products sold through Amazon Marketplace should contact the Antitrust Division’s Chicago Office at 312-984-7200, the Citizen Complaint Center at 888-647-3258, www.justice.gov/atr/contact/newcase.html, or the FBI’s New York Field Office at 212-384-1000.
Owner of Brooklyn Ambulance Service Business Pleads Guilty to Not Paying Employment TaxesRead the Press Release
A New York ambulance service business owner pleaded guilty on July 20 to failure to pay employment taxes.
According to court documents and admissions made in court, Steven J. Kwestel, of Lawrence, owned and operated Courtesy Transportation Inc. (Courtesy Transportation), a Brooklyn business that provided ambulance services. As the person who exercised control over Courtesy Transportation’s financial and business operations, Kwestel had a duty to truthfully account for and pay over to the IRS payroll taxes owed by its employees. From 2013 through 2019, Kwestel withheld employment taxes from his employees’ paychecks but did not pay over to the IRS $1,302,841 in taxes owed. Rather than paying the taxes due to the IRS, Kwestel used corporate funds to make hundreds of thousands of dollars of expenditures for his and his family’s personal benefit.
Kwestel is scheduled to be sentenced on Oct. 20 and faces a maximum penalty of five years in prison. He also faces a period of supervised release, restitution and monetary penalties. As part of his plea agreement, Kwestel has agreed to pay back over $1.2 million. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division made the announcement.
IRS Criminal Investigation is investigating the case.
Trial Attorneys Shawn Noud and Anahi Cortada of the Tax Division are prosecuting the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website at www.justice.gov/tax.
Nine Individuals Charged in Superseding Indictment with Conspiring to Act as Illegal Agents of the People’s Republic of ChinaRead the Press Release
A federal grand jury in New York filed an indictment today charging nine defendants with acting and conspiring to act in the United States as illegal agents of the People’s Republic of China (PRC) without prior notification to the Attorney General, and engaging and conspiring to engage in interstate and international stalking. Two of the nine defendants are also charged with obstruction of justice and conspiracy to obstruct justice.
According to court documents, Tu Lan, 50, and Zhai Yongqiang, 46, both of China, are the latest two of nine charged in the superseding indictment. Co-defendants Hu Ji, 46 and Li Minjun, 65, both of China; Zhu Feng, 34, a Chinese national residing in Queens, New York; Michael McMahon, 53, of Mahwah, New Jersey; Zheng Congying, 24, of Brooklyn, New York; and Zhu Yong, aka Jason Zhu, 64, of Norwich, Connecticut, were previously charged in a related criminal complaint issued in October 2020 and a related indictment in May 2021. The name of the ninth defendant remains under seal.
According to court documents, the defendants allegedly acted at the direction and under the control of PRC government officials, conducted surveillance of and engaged in a campaign to harass, stalk and coerce certain residents of the United States to return to the PRC as part of a global, concerted and extralegal repatriation effort known as “Operation Fox Hunt.” The superseding indictment also alleges that Tu Lan, a new defendant who was employed as a prosecutor with the Hanyang People’s Procuratorate, traveled to the United States, directed the harassment campaign and ordered a co-conspirator to destroy evidence to obstruct the criminal investigation.
“Law enforcement officials around the world act according to a professional code of conduct,” said Acting Attorney General Mark Lesko for the Justice Department’s National Security Division. “They act to enforce the law, not to violate it in such an egregious manner. That aprosecutor and police officer not only directed and participated in a criminal scheme on U.S. soil, but then attempted to cover it up, is an affront to justice of the highest order.”
“As alleged, the defendants, acting as agents of the PRC, carried out an illegal and clandestine campaign to harass and threaten targeted U.S. residents in order to force them to return to the PRC,” said Acting U.S. Attorney Jacquelyn M. Kasulis. “Unregistered, roving agents of a foreign power are not permitted to engage in secret surveillance of U.S. residents on American soil, and their illegal conduct will be met with the full force of U.S. law. To the extent the PRC seeks to repatriate its citizens to the PRC, its agents are required to register with the Attorney General of the United States, coordinate with U.S. officials, and adhere to U.S. laws and protocols.”
"As noted in the superseding indictment, the Chinese government sent operatives to America to harass, surveil, and coerce U.S. residents to return to China. These acts are undemocratic, authoritarian, and contrary to the rule of law," said Assistant Director Alan E. Kohler, for the FBI’s Counterintelligence Division. “The FBI will continue to protect those who are victims of harassment and intimidation by the government of China, or any other government practicing these tactics.”
As alleged, in and around 2012 and 2014, the PRC government caused the International Criminal Police Organization, aka Interpol, an inter-governmental law enforcement organization, to issue “Red Notices” for John Doe #1 and his wife, Jane Doe #1. According to the Red Notices, John Doe #1 was wanted by the PRC government for “embezzlement, abuse of power [and] acceptance of bribes” which carried a maximum possible penalty of death under PRC law. Jane Doe #1 was wanted by the PRC government for “accepting bribes” which carried a maximum possible penalty of life imprisonment under PRC law.
As alleged, the nine defendants participated in an international campaign to threaten, harass, surveil and intimidate John Doe #1 and his family, in order to force John Doe #1 and Jane Doe #1 to return to the PRC as part of “Operation Fox Hunt,” a PRC Ministry of Public Security initiative to locate and repatriate alleged Chinese “fugitives” who had fled to foreign countries, including the United States. Instead of operating with the approval and coordination of the U.S. government, PRC government officials carrying out Operation Fox Hunt traveled to the United States and directed non-official operatives in the United States to engage in violations of U.S. criminal law. Specifically, between approximately 2016 and 2019, PRC government officials, including defendant Tu Lan, the PRC prosecutor, and Hu Ji, a PRC police officer with the Wuhan Public Security Bureau, traveled to the United States and directed other defendants to engage in unsanctioned and illegal conduct on behalf of the PRC to coerce the targeted victims to return to the PRC.
As further alleged in the superseding indictment, a centerpiece of this criminal scheme was an April 2017 effort, directed by PRC officials Tu Lan and Hu Ji, to transport John Doe #1’s elderly father from the PRC to the United States to convey a threat to John Doe #1 that his family in the PRC would be harmed if he did not return to the PRC. At the direction of Tu Lan, Hu Ji and others, several defendants worked to investigate, surveil and locate John Doe #1 and his wife. Tu Lan then traveled to the United States along with John Doe #1’s father and a medical doctor, Li Minjun. While in the United States, Tu Lan directed several conspirators to surveil John Doe #1 and his family so the defendants would know where to bring John Doe #1’s father to deliver the demand that John Doe #1 return to the PRC. Afterwards, Tu Lan returned to the PRC, where she continued to supervise the operation with Hu Ji and other PRC officials, directed other U.S.-based conspirators to continue stalking John Doe #1 and then ordered the return of John Doe #1’s father to the PRC after their attempts to render John Doe #1 and Jane Doe #1 were unsuccessful.
Zhu Feng, Hu Ji and Zhu Yong worked with McMahon, a private investigator, to gather intelligence about and locate John Doe #1 and Jane Doe #1. To evade detection and frustrate a criminal investigation of their conduct, Tu Lan allegedly directed one of the conspirators to “delete all the chat content” between the conspirators. Subsequently, between 2017 and 2019 other defendants continued to harass and stalk the victims at the direction of the PRC government.
For example, on or about Sept. 4, 2018, two defendants drove to the New Jersey residence of John Doe #1 and Jane Doe #1 and pounded on the front door. The two defendants attempted to force open the door to the residence, then left a note at the residence that stated “If you are willing to go back to the mainland and spend 10 years in prison, your wife and children will be all right. That’s the end of this matter!”
All defendants are charged with acting as and conspiring to act as agents of the PRC, which carry maximum penalties of ten years and five years in prison respectively. The defendants are also charged with interstate stalking and conspiring to engage in interstate stalking, which carry a maximum penalty of five years in prison for each charge. Defendants Tu and Zhu are separately charged with obstruction of justice and conspiracy to obstruct justice, which carry a maximum penalty of 20 years in prison for each charge. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Assistant U.S. Attorneys Craig R. Heeren, J. Matthew Haggans and Ellen H. Sise are prosecuting the case, with assistance from Trial Attorney Scott A. Claffee of the National Security Division’s Counterintelligence and Export Control Section.
An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Justice Department Obtains $100,000 Settlement in Sexual Harassment Case Against Ohio LandlordsRead the Press Release
The Justice Department today announced that Toledo, Ohio, landlords Anthony Hubbard, Ann Hubbard, Jeffery Hubbard, PayUp LLC and No Joke Properties Inc. have agreed to pay $100,000 to resolve a Fair Housing Act lawsuit alleging that Anthony Hubbard sexually harassed female tenants at rental properties he owned or managed with the other defendants.
“People deserve to be safe in their homes and sexual harassment in housing deprives them of that right,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “The Justice Department will not tolerate landlords who abuse their power by sexually harassing their tenants, and we will continue to vigorously enforce the Fair Housing Act against landlords who engage in this conduct.”
“Exploiting any person’s basic housing needs as a way to sexually harass, demean and control them violates the law,” said Acting U.S. Attorney Bridget M. Brennan for the Northern District of Ohio. “We remain committed to rooting out homeowners and landlords who target vulnerable residents seeking safe and affordable housing opportunities for them and their families.
The settlement, which must still be approved by the U.S. District Court for the Northern District of Ohio, requires that defendants pay a total of $90,000 to three female tenants who were harmed by Hubbard’s harassment and a $10,000 civil penalty to the United States. The settlement also:
- prohibits Anthony Hubbard from continuing to manage rental housing;
- requires Anthony Hubbard to retain an independent property manager to manage any rental properties he owns now or in the future; and
- requires defendants to receive fair housing training and implement comprehensive non-discrimination policies and complaint procedures to prevent sexual harassment at their properties in the future.
The United States’ lawsuit, filed in October 2019, alleged that Anthony Hubbard engaged in unwelcome sexual harassment at properties he managed, including making unwelcome sexual advances and comments to female tenants; sending them unwanted sexual text messages, videos and photos; offering to reduce or excuse their monthly rental payments, security deposits and utility fees in exchange for sex acts; and entering the homes of female tenants without their consent and without prior notice. The United States also alleged that Anthony Hubbard carried out some of this sexual harassment while managing properties on behalf of the other defendants — Ann Hubbard, Jeffery Hubbard, PayUp LLC and No Joke Properties Inc. — making them liable for the harassment he carried out while acting as their agent.
This case was jointly litigated by attorneys in the Civil Rights Division and the Civil Division of the U.S. Attorney’s Office for the Northern District of Ohio. The Justice Department’s Sexual Harassment in Housing Initiative is led by the Civil Rights Division, in coordination with U.S. Attorney’s Offices across the country. The goal of the department’s initiative is to address and raise awareness about sexual harassment by landlords, property managers, maintenance workers, loan officers or other people who have control over housing. Since launching the initiative in October 2017, the Department of Justice has filed 21 lawsuits alleging sexual harassment in housing and recovered over $2.5 million for victims of such harassment.
The Justice Department’s Civil Rights Division enforces the Fair Housing Act, which prohibits discrimination in housing based on race, color, religion, national origin, sex, disability and familial status. More information about the Civil Rights Division and the laws it enforces is available at http://www.justice.gov/crt. Individuals may report sexual harassment or other forms of housing discrimination by calling the Justice Department at 1-800-896-7743, emailing the Justice Department at [email protected] or submitting a report online. Individuals may also report such discrimination by contacting the Department of Housing and Urban Development (HUD) at 1-800-669-9777 or by filing a complaint online.
Justice Department Launches Firearms Trafficking Strike Forces to Address Violent Crime, Crack Down on Sources of Crime GunsRead the Press Release
The U.S. Department of Justice today launched five cross-jurisdictional strike forces to help reduce gun violence by disrupting illegal firearms trafficking in key regions across the country. Leveraging existing resources, the regional strike forces will better ensure sustained and focused coordination across jurisdictions and help stem the supply of illegally trafficked firearms from source cities, through other communities, and into five key market regions: New York, Chicago, Los Angeles, the San Francisco Bay Area/Sacramento Region and Washington, D.C.
Each strike force region will be led by designated United States Attorneys, who will collaborate with the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) and with state and local law enforcement partners within their own jurisdiction (where firearms are used in crimes) as well as law enforcement partners in areas where illegally trafficked guns originate. These officials will use the latest data, evidence, and intelligence from crime scenes to identify patterns, leads, and potential suspects in violent gun crimes.
“All too often, guns found at crime scenes come from hundreds or even thousands of miles away. We are redoubling our efforts as ATF works with law enforcement to track the movement of illegal firearms used in violent crimes. These strike forces enable sustained coordination across multiple jurisdictions to help disrupt the worst gun trafficking corridors,” said Attorney General Merrick B. Garland. “The Department of Justice will use all of its tools – enforcement, prevention, intervention, and investment – to help ensure the safety of our communities – the department’s highest priority.”
The strike forces represent one important, concrete step in implementing the Department’s Comprehensive Violent Crime Reduction Strategy, which was announced on May 26, 2021. The comprehensive strategy supports local communities in preventing, investigating, and prosecuting gun violence and other violent crime—and requires U.S. Attorneys’ offices to work with federal, state, local and tribal law enforcement, as well as the communities they serve, to address the most significant drivers of violence in their districts. In guidance to federal agents and prosecutors as part of that comprehensive strategy, the Deputy Attorney General made clear that firearms traffickers providing weapons to violent offenders are an enforcement priority across the country.
Department of Justice Efforts to Address Violent Crime
Since April 2021, the Department has taken the following steps to reduce and prevent violent crime, especially the gun crime that is often at the core of the problem:
- April 8, 2021 – Attorney General Garland, alongside President Biden, announced four concrete steps for addressing gun violence: ATF would propose a new rule within 30 days to help curb the proliferation of so-called ghost guns, ATF would propose a new rule within 60 days on stabilizing braces used to convert pistols into short-barreled rifles, the Department would publish model state extreme risk protection order legislation within 60 days; and ATF would begin preparing a thorough and detailed new public study of firearms trafficking for the first time in 20 years.
- In April 2021, the Office of Justice Programs also made clear when existing grant funds could be used to support Community Violence Intervention (CVI) programs.
- On May 7, 2021, meeting the Attorney General’s announced timeline, ATF issued a notice of proposed rulemaking to update outdated firearms definitions and to help address the proliferation of ghost guns.
- May 26, 2021, the Attorney General announced the Department’s comprehensive strategy to reduce violent crime, including an overall Department Violent Crime Reduction Strategy, the strengthening of Project Safe Neighborhoods (PSN), and a directive to the U.S. Attorneys to work with their local partners in addressing the increase in violence that typically occurs over the summer (with specific support from DOJ law enforcement agencies).
- On June 7, meeting the Attorney General’s announced timeline, ATF issued a notice of proposed rulemaking to clarify that the restrictions imposed by the National Firearms Act apply when stabilizing braces are used to convert pistols into short-barreled rifles.
- On June 8, meeting the Attorney General’s announced timeline, the Department published model state extreme risk protection order legislation.
- On June 22, 2021, the Attorney General announced that the Department would be forming five Firearms Trafficking Strike Forces within 30 days.
- On, June 23, 2021, the Attorney General, alongside President Biden, announced steps that ATF would take to hold rogue gun dealers accountable for their actions. They include applying a “no tolerance” policy for federal firearms licensers (FFLs) that willfully commit violations that endanger public safety; designating points of contact for state and local government officials to report concerns about rogue FFLs; formalizing the use of public safety factors for inspection prioritization; sharing inspection information with states that regulate firearms dealers themselves; resuming the practice of notifying revoked dealers on how to dispose of their inventory and the potential criminal consequences of continuing to engage in the business; increasing ATF’s resources for inspections (see, FY 2022 Budget request); and publicly posting disaggregated inspection information to ATF’s website.
Ohio Man Charged with Hate Crime Related to Plot to Conduct Mass Shooting of Women, Illegal Possession of Machine GunRead the Press Release
A federal grand jury has charged a self-identified “incel” with attempting to conduct a mass shooting of women and with illegally possessing a machine gun.
Tres Genco, 21, of Hillsboro, Ohio, allegedly plotted to commit a hate crime, namely, a plan to shoot students in sororities at a university in Ohio. He was arrested by federal agents today.
Genco identified as an “incel” or “involuntary celibate.” The incel movement is an online community of predominantly men who harbor anger towards women. Incels seek to commit violence in support of their belief that women unjustly deny them sexual or romantic attention to which they believe they are entitled.
According to the indictment, Genco maintained profiles on a popular incel website from at least July 2019 through mid-March 2020. Genco was a frequent poster on the site.
In one post, Genco allegedly detailed spraying “some foids and couples” with orange juice in a water gun. “Foids” is an incel term short for “femoids,” referring to women. According to the charging document, Genco compared his “extremely empowering action” to similar conduct by known incel, Elliot Rodger. In May 2014, Rodger killed six people and injured 14 others, including shooting individuals outside a University of California, Santa Barbara sorority house. Prior to his mass attack, Rodger shot a group of college students with orange juice from a water gun.
Genco also allegedly wrote a manifesto, stating he would “slaughter” women “out of hatred, jealousy and revenge…” and referring to death as the “great equalizer.” As part of this investigation, law enforcement agents discovered a note of Genco’s that indicated he hoped to “aim big” for a kill count of 3,000 people and intended to attend military training. Searches of Genco’s electronics revealed that the day he wrote his manifesto, he searched online for sororities and a university in Ohio.
It is alleged that in 2019, Genco purchased tactical gloves, a bulletproof vest, a hoodie bearing the word “revenge,” cargo pants, a bowie knife, a skull facemask, two Glock 17 magazines, a 9mm Glock 17 clip and a holster clip concealed carry for a Glock.
Genco attended Army Basic Training at Ft. Benning, Georgia, from August through December 2019.
In January 2020, Genco allegedly wrote a document entitled “Isolated” that he described as “the writings of the deluded and homicidal.” Genco signed the document, “Your hopeful friend and murderer.”
The charging document claims Genco conducted surveillance at an Ohio university on Jan. 15, 2020. That same day, he allegedly searched online for topics including “how to plan a shooting crime” and “when does preparing for a crime become attempt?”
On March 12, 2020, local police officers responded to Genco’s residence in Highland County. At the residence, in the trunk of Genco’s vehicle, police officers found, among other things, firearm with a bump stock attached, several loaded magazines, body armor and boxes of ammunition. Inside the residence, police officers found a Glock-style 9mm semiautomatic pistol, with no manufacturer’s marks or serial number, hidden in a heating vent in Genco’s bedroom.
Genco is charged with one count of attempting to commit a hate crime which, because it involved an attempt to kill, is punishable by up to life in prison and one count of illegally possessing a machine gun which is punishable by up to 10 years.
Vipal J. Patel, Acting U.S. Attorney for the Southern District of Ohio; Chris Hoffman, Special Agent in Charge, Federal Bureau of Investigation (FBI) Cincinnati Division; and Roland Herndon, Special Agent in Charge, U.S. Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF), announced the charges. Assistant U.S. Attorney Megan Gaffney Painter and Assistant Deputy Criminal Chief Timothy S. Mangan are representing the United States in this case.
An indictment is merely an allegation, and defendants are presumed innocent unless proven guilty in a court of law.
KuuHuub Inc., Kuu Huub Oy and Recolor Oy to Pay Civil Penalty for Children’s Online Privacy ViolationsRead the Press Release
The Department of Justice, together with the Federal Trade Commission (FTC), today announced that KuuHuub Inc., a Canadian corporation, and two Finnish corporations, Kuu Huub Oy and Recolor Oy, have agreed to a settlement to resolve alleged violations of the FTC Act and the Children’s Online Privacy Protection Act of 1998 (COPPA) associated with the companies’ “Recolor” mobile app and digital coloring book.
In a complaint filed in the U.S. District Court for the District of Columbia, the United States alleged that the Recolor app included a “kids” category targeted at children, and that defendants also obtained actual knowledge that children 13 years old and younger were using and accessing the Recolor app not only to color images but also to use the app as a social media platform for communicating. The complaint further alleges that the Recolor app collected personal information of these child users without attempting to obtain verifiable parental consent, thus violating COPPA.
As reflected in the stipulated order entered by the court today, the defendants have agreed to a civil penalty of $3 million, with a payment of $100,000 due within a specified timeframe and the remainder suspended pending compliance with the order’s other provisions and based on ability-to-pay considerations. The order also prohibits the defendants from engaging in the challenged practices going forward and requires them to notify customers about the alleged violations; to delete children’s personal information currently in their possession; to seek the deletion of information held by third-party ad networks; to allow refunds requested by any current subscribers who were underage at sign-up; and to meet recordkeeping, certification and compliance obligations.
This matter was handled by Assistant Director Lisa K. Hsiao and Trial Attorney Marcus P. Smith of the Civil Division’s Consumer Protection Branch. Kerry O’Brien and Evan Rose represented the FTC.
For more information about the Consumer Protection Branch and its enforcement efforts, visit its website at https://www.justice.gov/civil/consumer-protection-branch. For more information about the FTC, visit its website at https://www.FTC.gov.
Former U.S. Army Employee Pleads Guilty to Kickback Scheme to Steer U.S. Government ContractsRead the Press Release
A former civilian employee of the U.S. Army’s Directorate of Public Works pleaded guilty today for his role in a kickbacks scheme to steer government contracts for work at Camp Arifjan, a U.S. Army base in Kuwait.
According to court documents, Ephraim Garcia, 64, admitted that he conspired with Gandhiraj Sankaralingam, aka Gandhi Raj, the former general manager and co-owner of Kuwait-based contracting company Gulf Link Venture Co. W.L.L. (Gulf Link), to steer government contracts to Gulf Link. In his position with the U.S. Army, Garcia was involved in the solicitation, award and management of certain government contracts related to facilities support at Camp Arifjan.
In 2015, at an Olive Garden restaurant located in Mahboula, Kuwait, Garcia and Sankaralingam approached an employee of the prime contractor responsible for base support services. During that meeting, they offered to pay the prime-contractor employee in exchange for his assistance in steering subcontracts worth over $3 million to Gulf Link. Rather than agree to the scheme, the prime-contractor employee reported the kickback offer to authorities. Garcia was arrested in the Philippines in December 2019. On Aug. 19, 2020, Sankaralingam was charged in a superseding indictment with conspiracy to offer a kickback and with paying illegal gratuities to Garcia. Sankaralingam remains a fugitive.
Garcia pleaded guilty to one count of conspiracy to offer a kickback and one count of offering a kickback. He is scheduled to be sentenced on Oct. 22, and faces a maximum of five years in prison on the conspiracy charge and 10 years in prison on the kickback charge. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division; Director Marion F. Robey of the Major Procurement Fraud Unit, U.S. Army Criminal Investigation Command; and Assistant Inspector General for Investigations Paul Sternal of the Department of Defense Office of Inspector General, Defense Criminal Investigative Service (DCIS), made the announcement.
The U.S. Army Criminal Investigation Command and DCIS are investigating the case.
Trial Attorneys Christopher Jackson and Matthew Sullivan of the Criminal Division’s Fraud Section are prosecuting the case.
The charges in the indictment against Sankaralingam are merely allegations, and he is presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Federal Search Warrants ExecutedRead the Press Release
DES MOINES, Iowa -- On Wednesday, July 21, 2021, federal search warrants were executed at the following locations in the Des Moines metropolitan area:
- 1100 block of 24th Street, Des Moines
- 1300 block of 13th Place, Des Moines
- 800 block of Loomis Avenue, Des Moines
- 1200 block of East 32nd Street, Des Moines
- 6300 block of Hickman Road, Des Moines
- 1300 block of Clark Street, Des Moines
- 5100 block of Ingersoll Avenue, Des Moines
- 1700 block of Logan Avenue, Des Moines
- 400 block of Aurora Avenue, Des Moines
- 2200 block of 32nd Street, Des Moines
- 1800 block of 2nd Avenue, Des Moines
- 300 block of East Grand Avenue, Des Moines
- 800 block of East County Line Road, Des Moines
The searches at these locations were an official law enforcement action involving officers, agents, and investigators from Mid-Iowa Narcotics Enforcement Task Force; Central Iowa Gang Task Force; Des Moines Police Department; Iowa Division of Narcotics Enforcement; Polk County Sheriff’s Office; Bureau of Alcohol, Tobacco, Firearms, and Explosives; Iowa State Patrol; Iowa Division of Intelligence and Fusion Center; Iowa State Patrol SWAT; United States Marshals Service; Central Iowa Drug Task Force; Drug Enforcement Agency; Mid-Iowa Narcotics Enforcement Task Force East; Homeland Security Investigations; Altoona Police Department; Story County Sheriff’s Office; Ames Police Department; Norwalk Police Department; West Des Moines Police Department; Ankeny Police Department; METRO Star; SERT; Iowa 5th Judicial District; Federal Bureau of Investigation Chicago; Federal Bureau of Investigation Kansas City; Federal Bureau of Investigation Minneapolis; Federal Bureau of Investigation Omaha.
EEG Testing and Private Investment Companies Pay $15.3 Million to Resolve Kickback and False Billing AllegationsRead the Press Release
Two Texas companies have agreed to pay a combined $15.3 million to resolve allegations of kickbacks and other misconduct resulting in the submission of false claims to federal health care programs.
According to the settlement, Alliance Family of Companies LLC (Alliance), a national electroencephalography (EEG) testing company based in Texas, will pay $13.5 million to resolve allegations that it submitted or caused to be submitted false claims to federal health care programs that resulted from kickbacks to referring physicians or that sought payment for work not performed or for which only a lower level of reimbursement was justified. The settlement also resolves allegations against Texas-based private investment company Ancor Holdings LP (Ancor), which will pay over $1.8 million for causing false billings resulting from the kickback scheme through its management agreement with Alliance.
“Kickbacks and inflated billings result in the misuse of critical federal health care program funds,” said Acting Assistant Attorney General Brian M. Boynton of the Department of Justice’s Civil Division. “The Department of Justice will collaborate with our agency partners to protect federal health care programs by pursuing those who knowingly claim public funds to which they are not entitled.”
“This settlement should put health care providers on notice that we will hold accountable those who seek to profit by pursuing kickbacks and other improper billing schemes,” said Acting U.S. Attorney Jennifer B. Lowery for the Southern District of Texas. “This office, in coordination with its law enforcement partners, will use all available resources to pursue those who defraud these federal programs and to protect our nation’s health care system.”
“This settlement is an example of strong federal partnerships working to protect federal health care programs that are relied upon by so many beneficiaries,” said Special Agent in Charge Miranda L. Bennett of the Department of Health and Human Services Office of Inspector General (HHS-OIG), Dallas Region. “We will continue working with our law enforcement partners to investigate kickback schemes that undermine the integrity of the Medicare and Medicaid programs.”
“As the investigative arm of the Department of Defense Inspector General, the Defense Criminal Investigative Service is dedicated to protecting the integrity of Department of Defense programs such as TRICARE, the health care system for our service members, retirees, and their families,” said Acting Special Agent in Charge Gregory P. Shilling of the Defense Criminal Investigative Service (DCIS) Southwest Field Office. “Today’s settlement highlights the teamwork with our federal and state partners in rooting out fraud to protect our critical program and preserve American taxpayer resources.”
“This settlement demonstrates our commitment to safeguarding the Federal health care programs from fraud,” said Norbert E. Vint, Deputy Inspector General Performing the Duties of the Inspector General of the U.S. Office of Personnel Management Office of Inspector General (OPM-OIG). “I would like to thank our staff, law enforcement partners and the Department of Justice for their efforts to protect the Federal Employees Health Benefits Program from those who would seek to defraud the program through improper and illegal billing practices.”
Alliance provides ambulatory EEG testing services for patients referred by physicians and other health care providers to diagnose certain neurological conditions. The United States alleged that Alliance induced physicians to order the company’s EEG testing by providing kickbacks in the form of free EEG test-interpretation reports, thereby enabling primary care physicians who were not neurologists to bill the government as if they had interpreted the tests. The government also alleged that Alliance used an inaccurate billing code for certain EEG testing to generate higher reimbursements and billed for a specialized digital analysis that it did not actually perform. The United States alleged that Ancor learned of the kickbacks based on due diligence it performed prior to investing in Alliance and then caused false claims by allowing that conduct to continue once it entered into an agreement to manage Alliance.
Under the terms of the settlement, Alliance will pay $13,022,356 and Ancor will pay $1,780,349 to the federal government to resolve their liability under the False Claims Act. In addition, Alliance will pay $477,643 and Ancor will pay $64,369 to state Medicaid programs. Alliance is obligated to pay additional amounts if certain financial contingencies occur within the next five years and forego any claim to over $390,000 in suspended payments that it would otherwise be owed by Medicare.
In connection with the settlement, Alliance entered into a five-year Corporate Integrity Agreement with HHS-OIG, setting forth requirements for future compliance.
The settlement resolves claims brought under the qui tam or whistleblower provisions of the False Claims Act in six actions. Under the Act’s qui tam provisions, a private party can file an action on behalf of the United States and receive a portion of the settlement if the government reaches a monetary agreement with the defendant. The qui tam actions subject to the settlement are all pending in the Southern District of Texas and are captioned United States ex rel. Mandalapu, et al. v. Alliance Family of Companies, Inc., et al., No. 4:17-cv-00740; United States ex rel. Fuller v. Respiratory Sleep Solutions, et al., No. 4:17-cv-01197; United States ex rel. Calcanis v. Alliance Family of Companies, Inc., et al., No. 4:19-cv-1497; United States, et al. ex rel. Jane Doe v. Alliance Family of Companies, LLC, et al., No. 4:19-cv-1213; United States, et al. ex rel. McKay v. Alliance Family of Companies, LLC, et al., No. 4:18-cv-1949; and United States, et al. ex rel. Krasnov v. Alliance Family of Companies, LLC, et al., No. 4:19-cv-4886. Relators Mandalapu and Chava will receive $2,962,850 of the federal settlement proceeds as their share of the government’s recovery, plus a share of any additional recoveries should the financial contingencies occur.
The resolutions obtained in this matter were the result of a coordinated effort between the Civil Division’s Commercial Litigation Branch, Fraud Section, and the U.S. Attorney’s Office for the Southern District of Texas, with assistance from the U.S. Attorney’s Office for the Middle District of Florida; HHS-OIG; FBI; DCIS; OPM-OIG; and the state attorneys general and Medicaid Fraud Control Units.
Trial Attorneys Michael Hoffman and Sarah Loucks of the Civil Division’s Commercial Litigation Branch (Fraud Section), and Assistant U.S. Attorney Kenneth Shaitelman of the Southern District of Texas are handling this case.
The investigation and resolution of this matter illustrates the government’s emphasis on combating health care fraud. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse and mismanagement can be reported to the Department of Health and Human Services at 800-HHS-TIPS (800-447-8477).
The claims resolved by the settlement are allegations only, and there has been no determination of liability.
Attorney General Garland Memorandum on Justice Department Communications with the White HouseRead the Press Release
The U.S. Department of Justice today formally updated its guidelines governing communications between the Justice Department and the White House. Attorney General Merrick B. Garland announced the guidelines, effective immediately, in a memorandum to all Department personnel.
“The success of the Department of Justice depends upon the trust of the American people,” wrote Attorney General Garland. “That trust must be earned every day. And we can do so only through our adherence to the longstanding Departmental norms of independence from inappropriate influences, the principled exercise of discretion, and the treatment of like cases alike.”
The policy expands upon procedural safeguards designed to protect the Department’s criminal and civil law enforcement decisions, and legal judgments, from the appearance or reality of partisan or other inappropriate influences.
Pennsylvania Man Pleads Guilty to Trafficking Endangered and Invasive FishRead the Press Release
A Pennsylvania man pleaded guilty today in the Western District of Pennsylvania for trafficking in endangered and invasive fish in violation of the Lacey Act.
Anthony Nguyen, aka JoJo Nguyen and Jackie Lee, 49, of Pittsburgh, entered guilty pleas before U.S. District Judge Nora B. Fischer to counts one and two of the indictment returned against him on Nov. 13, 2020, alleging that he trafficked in endangered Asian arowana and invasive snakehead fish. Nguyen owned and operated a Pittsburgh business, Ichiban Tropical Fish, specializing in the sale of rare and exotic freshwater tropical fish species.
During his plea hearing, Nguyen admitted to violating the Lacey Act in 2016 when he sold illegally imported Asian arowana, which are native to Southeast Asia and are protected under the U.S. Endangered Species Act (ESA). Arowana, also known as “dragon fish” or “Asian bonytongue fish,” are considered the most expensive freshwater fish on earth, with highly sought-after specimens selling for tens of thousands of dollars. Arowana are also listed in Appendix I of the Convention on International Trade in Endangered Species of Flora and Fauna (CITES), which is reserved for the most endangered species of fish and wildlife.
Nguyen also admitted to violating the Lacey Act for selling invasive and injurious snakehead fish in 2019, in violation of Pennsylvania law. Snakeheads are native to Asia, but have been introduced into freshwater habitats in the U.S. Pursuant to the terms of Nguyen’s plea agreement, he will also accept responsibility for falsifying documents related to the snakehead shipment.
Nyugen is scheduled to be sentenced on Nov. 1 and faces a maximum penalty of five years in prison and a $250,000 fine for each charge.
The investigation was conducted by the U.S. Fish and Wildlife Service, Office of Law Enforcement. The Pennsylvania Fish and Boat Commission, California Department of Fish and Wildlife, and Texas Parks and Wildlife Department also provided assistance during the investigation. The case is being prosecuted by Trial Attorney Patrick M. Duggan of the Environment and Natural Resources Division’s Environmental Crimes Section and Assistant U.S. Attorney Eric G. Olshan.
Justice Department Reaches Settlement with Los Angeles Towing Company for Illegally Selling a Car Owned by a U.S. MarineRead the Press Release
The Justice Department today announced that it reached an agreement with Los Angeles towing company Black and White Towing Inc. to resolve allegations that it illegally auctioned off an active-duty U.S. Marine’s car, in violation of the Servicemembers Civil Relief Act (SCRA).
The SCRA is a federal law that provides a variety of financial and housing protections to members of the U.S. military. The law prohibits a towing company from auctioning off a vehicle owned by a servicemember unless it first obtains an order from a court allowing it to do so.
The department’s lawsuit, which was filed today along with the settlement, alleges that Black and White illegally auctioned a U.S. Marine’s 2014 Honda Accord while the Marine was stationed at Camp Pendleton in San Diego County, California. The Marine’s car was struck by another vehicle while it was legally parked and unoccupied. Black and White towed the car to its lot in Pacoima, California. When the Marine learned that her vehicle had been towed, she contacted Black and White and told them that she was in the military and would be working with the other driver’s insurance company to retrieve the vehicle. The complaint also alleges that the Marine’s car contained her military uniform and several military awards and certificates, and Department of Motor Vehicle records indicated that she had obtained her vehicle loan through Navy Federal Credit Union. Before the insurance company could arrange to inspect or retrieve the vehicle, Black and White sold it at auction, without a court order. As a result, the Marine lost the use and ownership of the car, but still had to continue making her monthly car loan payments to Navy Federal.
Under the proposed settlement, which is subject to approval by the U.S. District Court for the Central District of California, Black and White must pay $22,000 in compensation to the Marine and a $5,000 civil penalty to the U.S. Treasury. Black and White will also be required to adopt new policies and implement new training requirements.
“When towing companies ignore their legal obligations under the Servicemembers Civil Relief Act, it can have serious financial consequences for servicemembers and their families,” said Assistant Attorney General Kristen Clarke of the Civil Rights Division. “We hope this settlement encourages all towing companies to review and improve their policies and ensure that the rights of all servicemembers are honored and respected.”
Servicemembers and their dependents who believe their SCRA rights have been violated should contact the nearest Armed Forces Legal Assistance Program Office. Office locations can be found at http://legalassistance.law.af.mil/.
The Justice Department’s enforcement of the SCRA is conducted by the Civil Rights Division’s Housing and Civil Enforcement Section and U.S. Attorney’s Offices throughout the country. Since 2011, the department has obtained over $474 million in monetary relief for over 120,000 servicemembers through its enforcement of the SCRA. Additional information on the department’s enforcement of the SCRA and other laws protecting servicemembers is available at www.servicemembers.gov.
Hollis Man Sentenced for Drug and Firearms OffensesRead the Press Release
PORTLAND, Maine: A Hollis man was sentenced today in federal court for possessing fentanyl with intent to distribute and possessing a firearm in furtherance of drug trafficking, Acting U.S. Attorney Donald E. Clark announced.
U.S. District Judge D. Brock Hornby sentenced Dustin Homewood, 23, to six years in prison and three years of supervised release. Homewood entered a guilty plea on February 2, 2021.
According to court records, on May 31, 2020, the Rumford Police Department responded to a report of a male under the influence of drugs at a gas station. Officers found Homewood unconscious behind the wheel of a car. Once Homewood was alert, officers discovered a set of brass knuckles and a loaded firearm in his pocket. An ensuing search of his vehicle resulted in the seizure of another firearm and more than 300 grams of fentanyl.
The Rumford Police Department and the FBI’s Safe Streets Task Force investigated the case with assistance from the Maine State Police.
Former Bureau of Prisons Corrections Officer Pleads Guilty to Sexually Abusing an Inmate and Witness TamperingRead the Press Release
Eric Todd Ellis, 32, a former Bureau of Prisons (BOP) corrections officer at the FCI-Aliceville facility in Aliceville, Alabama, pleaded guilty today in federal court to one count of sexual abuse of a ward and one count of tampering with a witness.
According to court documents, on or about June 11, 2020, Ellis knowingly engaged in a sexual act with a female inmate while in the back of the laundry room of the prison. At the time, Ellis was on-duty and acting in his capacity as a corrections officer. The female inmate was in official detention and under Ellis’s custodial authority. Ellis subsequently admitted his conduct to another corrections officer.
Thereafter, the U.S. Department of Justice Office of the Inspector General (OIG) began investigating Ellis’s conduct. While that investigation was ongoing, Ellis made the following statements – on a recorded call – to that corrections officer (to whom he had previously admitted his conduct) in reference to the federal investigation and his conduct: “Just tell [the OIG agents], yeah, we’re friends, but, I mean, you hadn’t really talked to me about it. And when you have it’s – I’ve just told you that nothing happened.” Ellis admitted in the plea agreement that he made those statements because was attempting to persuade that other corrections officer to provide false information to OIG agents about his sexual abuse of the female inmate.
“Inmates detained inside jails and prisons have the right to be free from sexual assaults and sexually abusive behavior,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “The Department of Justice will continue to hold accountable prison employees who exploit their positions of power to sexually abuse individuals in their custody, and then attempt to cover up their misconduct. Corrections officers who commit sexual assault have no place inside the Bureau of Prisons, and we will continue to fight for justice for victims of these despicable crimes.”
“The Department of Justice strives to maintain a safe, secure and supportive environment for prison inmates, and one that promotes the successful reentry of inmates into society,” said U.S. Attorney Prim F. Escalona. “My office works closely with the OIG and the Civil Rights Division to investigate and prosecute any sexual abuse of inmates by prison employees.”
“Ellis sexually abused an inmate in his custody and then tried to coerce another correctional officer to help him cover up his crime,” said Special Agent in Charge James F. Boyersmith of the Justice Department’s Office of the Inspector General Miami Field Office. “The DOJ Office of the Inspector General will continue to investigate and bring to justice anyone who engages in this kind of behavior.”
A sentencing hearing is scheduled for Oct. 26.
This case was investigated by the Atlanta Division of the OIG. Executive Assistant U.S. Attorney Robert Posey and Assistant U.S. Attorney Robin Mark of the Northern District of Alabama and Special Litigation Counsel Fara Gold and Trial Attorney Anna Gotfryd of the Criminal Section of the Civil Rights Division of the U.S. Department of Justice are prosecuting the case.
DOJ Formally Adopts New Policy Restricting Use of Compulsory Process to Obtain Reporter InformationRead the Press Release
The U.S. Department of Justice today formally adopted a new policy that restricts the use of compulsory process to obtain information from, or records of, members of the news media acting within the scope of newsgathering activities. Attorney General Merrick B. Garland announced the new policy, effective immediately, in a memo to Department leadership.
The Attorney General also reiterated his support for the durability of these policy changes. To further protect members of the news media in a manner that will be enduring, he asked the Deputy Attorney General to undertake a review process to further explain, develop, and codify the policy announced today into Department regulations. He also reaffirmed the Department’s support for congressional legislation to protect members of the news media.
Statement of Attorney General Merrick B. Garland on the Anniversary of the Death of Congressman John LewisRead the Press Release
Attorney General Merrick B. Garland issued the following statement today commemorating the life of Congressman John Lewis:
“One year ago today, the nation lost Congressman John Lewis. Throughout his life, Congressman Lewis fought fearlessly to ensure people’s freedom, equality, and other basic human rights. Nowhere was his impact greater than on strengthening the foundation of our democracy – the right to vote.
“Congressman Lewis often spoke about getting into ‘good trouble, necessary trouble,’ and his ‘trouble’ got results. In 1965, he and other civil rights leaders were attacked by state troopers as they peacefully marched across the Edmund Pettus Bridge in Selma, Alabama. Their act of protest paved the way for the passage of the Voting Rights Act, and an exponential increase in Black voter registration.
“In 2013, the Supreme Court’s Shelby County decision effectively eliminated the preclearance protections of the Voting Rights Act, which had proved to be one of the nation’s most effective tools for safeguarding voting rights. During the half-century it was in effect, the Justice Department relied on the preclearance provision to object to more than one thousand discriminatory voting changes. Since 2013, there has been a dramatic rise across the country in legislative efforts that make it harder for millions of citizens to vote. This increase accelerated after the 2020 elections.
“The recent further narrowing of voting protections only underscores the need for legislative action. The Department of Justice is using all the tools at its disposal to protect the voting rights of all citizens, but that is not enough. We need Congress to pass the John Lewis Voting Rights Advancement Act, which would provide the Department with important tools to protect the right to vote and to ensure that every vote is counted. There is no more fitting way to honor the profound legacy of Congressman Lewis.”
Virginia Tax Return Preparer Sentenced to Just over 12 Months for Evading Her Own TaxesRead the Press Release
A Richmond, Virginia, tax return preparer was sentenced yesterday to one year and a day in prison for evading her own taxes.
According to court documents and statements made in court, Willette J. Holland owned Tax Professionals, a return preparation firm located in Richmond, Virginia. In August 2014, the IRS contacted Holland because she had not filed personal tax returns for the years 2010 through 2013. Holland then presented false returns to an IRS Revenue Agent for those years, which substantially underreported her gross receipts and taxes due. In 2014, 2015 and 2016, Holland again did not file tax returns despite being required to do so by law. To further conceal her earnings from the IRS, in 2014, Holland deposited almost all of her tax preparation business’s gross receipts into a bank account held in the name of a nominee. In all, Holland caused the IRS to suffer a tax loss of approximately $177,000.
In addition to the term of imprisonment U.S. District Judge Robert E. Payne ordered Holland to serve three years of supervised release.
Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and Acting U.S. Attorney Raj Parekh for the Eastern District of Virginia made the announcement.
IRS-Criminal Investigation is investigating the case.
Trial Attorney Francine Davis and Assistant Chief Michael Boteler of the Justice Department’s Tax Division and Assistant U.S. Attorney Kaitlin Cooke for the Eastern District of Virginia are prosecuting the case.
Philadelphia Man and Woman Convicted of Tax FraudRead the Press Release
A federal judge convicted two Philadelphia residents at a bench trial of conspiring to defraud the United States and aiding and assisting in the preparation of false tax returns.
According to court documents and evidence presented at trial, between 2010 and 2013, Yolonda Thompson, also known as Qhama Al, and Albert Upshur, also known as Kelinde Jaha, attempted to obtain millions of dollars for themselves and other participants in a fraudulent debt-relief scheme. As part of the scheme, which they named the Debt Payoff Program, Thompson and Upshur formed the Yolonda Denise Thompson Living Trust. Participants in the Debt Payoff Program were told that if they paid money to Upshur and filed tax returns and other documents that Thompson prepared for them, they could access funds from the trust to pay off their mortgages and other debts. In reality, the tax returns that Thompson prepared and that participants filed with the IRS fraudulently claimed income tax refunds that the scheme participants were not entitled to receive. The false tax returns introduced into evidence at trial collectively sought tax refunds of more than $300 million.
The evidence at trial also established that after the IRS began to investigate the Debt Payoff Program, Thompson and Upshur attempted to obtain money from the IRS by other fraudulent means, including using checks drawn on closed bank accounts and fake financial instruments. Even after the IRS assessed civil penalties against Thompson and Upshur, and notified them that they were under criminal investigation, both defendants continued to file false returns and other tax documents for themselves and other.
Thompson and Upshur are scheduled to be sentenced at a later date and face a maximum penalty of five years in prison for the conspiracy count and three years in prison for each false return count. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division made the announcement. He thanked the U.S. Attorney’s Office for the Eastern District of Pennsylvania, which provided support in the investigation and prosecution of this case.
IRS Criminal Investigation investigated the case.
Trial Attorneys Melissa S. Siskind and Kathryn D. Sparks of the Justice Department’s Tax Division are prosecuting the case.
Former Tennessee County Official Indicted for Kidnapping and Sexual AssaultRead the Press Release
Today, the Justice Department announced the unsealing of a nine-count indictment charging Michael Harvel, 59, of Crossville, Tennessee, with civil rights violations for kidnapping and sexually assaulting women that he supervised during his tenure as the Cumberland County, Tennessee, Solid Waste Director. FBI agents arrested Harvel at his home earlier today, and he will appear before a U.S. Magistrate Judge later this afternoon.
According to the indictment, Harvel’s official duties as the former Solid Waste Director included supervising women who served their court-ordered community service time or worked as paid county employees. The indictment alleges that, from 2015 to 2018, Harvel sexually assaulted seven women under his supervision. Two counts charge that Harvel kidnapped and sexually assaulted women he supervised, and a third count charges him with committing aggravated sexual abuse by forcibly raping a woman in a dark office. The indictment alleges several other incidents of sexual assault, including Harvel fondling the breasts and genitals of women against their will.
If convicted, Harvel faces a maximum sentence of up to life in prison.
This case is being investigated by the FBI. Assistant U.S. Attorney Sara Beth Myers for the Middle District of Tennesee and Trial Attorney Michael J. Songer of the Justice Department’s Civil Rights Division are prosecuting the case.
In March, in a separate civil action, the Department of Justice settled a sexual harassment lawsuit against Cumberland County for $1.1 million. The lawsuit alleged, among other things, that Cumberland County failed to take adequate precautions to prevent Harvel, as the director of the county’s Solid Waste Department, from sexually harassing women he supervised. According to the complaint, Harvel regularly subjected the women to unwanted sexual contact, including kissing and groping; unwelcome sexual advances, including propositioning the women for sexual favors; and offensive sexual remarks about their bodies and sex acts.
An indictment is merely an accusation. The defendant is presumed innocent until proven guilty in a court of law.
Environmental Safety International Inc. and its Agents to Pay $1.66 Million for Telemarketing ViolationsRead the Press Release
The Justice Department, together with the Federal Trade Commission (FTC), today announced that the government will collect $1.66 million in civil penalties as part of a settlement to resolve alleged violations of the FTC Act and the FTC’s Telemarketing Sales Rule (TSR) by New Jersey-based Environmental Safety International Inc. (ESI), as well as its co-owners, Joseph and Sean Carney, and its telemarketer, Raymond Carney, all of whom reside in New Jersey.
In a complaint filed in the U.S. District Court for the District of New Jersey, the United States alleged that the defendants made millions of unlawful telemarketing calls to consumers in an effort to sell septic tank cleaning products. Among other things, the complaint alleges that the defendants violated the TSR by initiating “robocalls” from a seller without the recipient’s consent. The complaint further alleges that the defendants violated the TSR by making telemarketing calls that failed to disclose the seller’s identity, that were directed to numbers on the National Do-Not-Call Registry, and that were initiated to individuals who previously stated that they did not wish to receive calls from the defendants. Lastly, the company and its co-owners are alleged to have violated the FTC Act by falsely representing they would commence legal action or debt collection activities if customers failed to pay for its septic tank products.
“Americans should be protected from unwanted, deceptive telemarketing calls,” said Acting Assistant Attorney General Brian M. Boynton of the Justice Department’s Civil Division. “The Department of Justice is working together with the FTC to prevent the scourge of robocalls that harass and invade the privacy of millions of people every day.”
As reflected in the stipulated orders entered by the court today, the defendants have agreed to a civil penalty of $10.2 million, all of which will be suspended except for $1.66 million; to forfeit real property worth $774,000; and to forego $164,402 in unpaid customer balances. The orders also require the defendants to take a number of steps to prevent a recurrence of the alleged unlawful conduct. Among other things, ESI must dissolve and the individual defendants must forego activities in its name. Furthermore, the individual defendants are enjoined from engaging in future telemarketing activities and must meet recordkeeping, certification and compliance obligations.
This matter was handled by Assistant Director Lisa K. Hsiao and Trial Attorney Zachary L. Cowan of the Civil Division’s Consumer Protection Branch. Amy C. Hocevar, Christian M. Capece, Derek E. Diaz and Fil M. de Banate represented the FTC.
For more information about the Consumer Protection Branch and its enforcement efforts, visit its website at https://www.justice.gov/civil/consumer-protection-branch. For more information about the FTC, visit its website at https://www.FTC.gov.
U.S. Government Launches First One-Stop Ransomware Resource at StopRansomware.govRead the Press Release
Today, as part of the ongoing response, agencies across the U.S. government announced new resources and initiatives to protect American businesses and communities from ransomware attacks. The U.S. Department of Justice (DOJ) and the U.S. Department of Homeland Security (DHS), together with federal partners, have launched a new website to combat the threat of ransomware. StopRansomware.gov establishes a one-stop hub for ransomware resources for individuals, businesses and other organizations. The new StopRansomware.gov is a collaborative effort across the federal government and is the first joint website created to help private and public organizations mitigate their ransomware risk.
“The Department of Justice is committed to protecting Americans from the rise in ransomware attacks that we have seen in recent years,” said Attorney General Merrick B. Garland of the Justice Department. “Along with our partners in and outside of government, and through our Ransomware and Digital Extortion Task Force, the Department is working to bring all our tools to bear against these threats. But we cannot do it alone. It is critical for business leaders across industries to recognize the threat, prioritize efforts to harden their systems and work with law enforcement by reporting these attacks promptly.”
“As ransomware attacks continue to rise around the world, businesses and other organizations must prioritize their cybersecurity,” said Secretary Alejandro Mayorkas for the Department of Homeland Security. “Cyber criminals have targeted critical infrastructure, small businesses, hospitals, police departments, schools and more. These attacks directly impact Americans’ daily lives and the security of our nation. I urge every organization across our country to use this new resource to learn how to protect themselves from ransomware and reduce their cybersecurity risk.”
StopRansomware.gov is the first central hub consolidating ransomware resources from all federal government agencies. Before today, individuals and organizations had to visit a variety of websites to find guidance, latest alerts, updates and resources, increasing the likelihood of missing important information. StopRansomware.gov reduces the fragmentation of resources, which is especially detrimental for those who have become victims of an attack, by integrating federal ransomware resources into a single platform that includes clear guidance on how to report attacks, and the latest ransomware-related alerts and threats from all participating agencies. StopRansomware.gov includes resources and content from DHS’s Cybersecurity and Infrastructure Security Agency (CISA) and the U.S. Secret Service, the DOJ’s FBI, the Department of Commerce’s National Institute of Standards and Technology (NIST), and the Departments of the Treasury and Health and Human Services.
Ransomware is a long-standing problem and a growing national security threat. Tackling this challenge requires collaboration across every level of government, the private sector and our communities. Roughly $350 million in ransom was paid to malicious cyber actors in 2020, a more than 300% increase from the previous year. Further, there have already been multiple notable ransomware attacks in 2021, and despite making up roughly 75% of all ransomware cases, attacks on small businesses often go unnoticed. Like most cyber attacks, ransomware exploits the weakest link. Many small businesses have yet to adequately protect their networks, and StopRansomware.gov will help these organizations and many more to take simple steps to protect their networks and respond to ransomware incidents, while providing enterprise-level information technology (IT) teams the technical resources to reduce their ransomware risk.
DHS, DOJ, the White House and our federal partners encourage all individuals and organizations to take the first step in protecting their cybersecurity by visiting StopRansomware.gov.
Justice Department Settles with Delivery Services Company to Resolve Retaliation ClaimRead the Press Release
The Department of Justice today announced that it has reached a settlement agreement with Around the Clock Dispatch Inc., a freight and delivery services company in Queens Village, New York.
The settlement resolves the department’s claim that Around the Clock violated the anti-discrimination provision of the Immigration and Nationality Act (INA) by retaliating against a worker because he asked for the department’s help in addressing his concerns about an immigration-related employment practice.
The department initiated its investigation after the worker filed a charge, and determined that Around the Clock suspended the worker for three days without pay because he called the Civil Rights Division’s Immigrant and Employee Rights Section (IER) to ask for help addressing a concern about the company’s process for verifying his work authorization. IER’s hotline program offers information and assistance to workers and employers to prevent discrimination and to resolve potential immigration-related employment disputes informally, when workers request such intervention. The INA prohibits retaliation and intimidation against individuals who oppose what they reasonably believe are violations of the law that IER enforces, including by calling IER’s hotline. Individuals who file a charge with IER, cooperate with an IER investigation, or otherwise assert their own or others’ rights are also protected under this law.
“Workers should not face negative consequences for raising concerns about actions that may violate the Immigration and Nationality Act’s anti-discrimination provision,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “We encourage workers and employers to contact the Immigrant and Employee Rights Section’s hotline for information on their rights and responsibilities, to help resolve disputes at the earliest opportunity possible. Protecting those who contact the hotline from retaliation is critical to ensuring its success.”
Under the settlement, Around the Clock will pay $3,600 in civil penalties to the United States and nearly $900 in back pay to the affected individual. The settlement also requires Around the Clock to train employees on the requirements of the INA’s anti-discrimination provision and be subject to departmental monitoring and reporting requirements.
IER, a section of the Civil Rights Division, is responsible for enforcing the anti-discrimination provision of the INA. The statute prohibits discrimination based on citizenship or immigration status and national origin in hiring, firing, or recruitment or referral for a fee; unfair documentary practices; and retaliation and intimidation.
Learn more about IER’s work and how to get assistance through this brief video. Applicants or employees who believe they were discriminated against based on their citizenship, immigration status, or national origin in hiring, firing, recruitment or during the employment eligibility verification process (Form I-9 and E-Verify); or subjected to retaliation, may file a charge. The public can also call IER’s worker hotline at 1-800-255-7688 (1-800-237-2515, TTY for hearing impaired); call IER’s employer hotline at 1-800-255-8155 (1-800-237-2515, TTY for hearing impaired); email [email protected]; sign up for a free webinar; or visit IER’s English and Spanish websites. Subscribe to GovDelivery to receive updates from IER.
El Departamento de Justicia llega a un acuerdo con una compañía de servicios de reparto que resuelve una acusación de represaliasRead the Press Release
WASHINGTON – El Departamento de Justicia anunció hoy que ha llegado a un acuerdo conciliatorio con Around the Clock Dispatch Inc., una compañía de servicios de flete y reparto en Queens Village, New York. La conciliación resuelve la acusación del Departamento de que Around the Clock vulneró la disposición antidiscriminatoria de la ley de Ley de Inmigración y Nacionalidad («INA», por sus siglas en inglés) al tomar represalias contra un trabajador porque pidió la ayuda del Departamento para abordar sus preocupaciones acerca de una práctica de empleo relacionada con la inmigración.
El Departamento inició su investigación después de que el trabajador presentó una denuncia y determinó que Around the Clock suspendió al trabajador por tres días sin sueldo porque él había llamado a la Sección de Derechos Civiles de la Sección de Derechos de Inmigrantes y Empleados («IER», por sus siglas en inglés) para pedir ayuda para abordar una preocupación relacionada con el proceso que la compañía usa para verificar su autorización para trabajar. El programa de líneas directas de la IER ofrece información y ayuda a trabajadores y empleadores para prevenir la discriminación y resolver, de manera informal, posibles controversias laborales relacionadas con la inmigración, en el caso de que un trabajador pida tal intervención. La INA prohíbe la intimidación o la toma de represalias contra individuos que se oponen a lo que ellos creen, razonablemente, que son infracciones de la ley que la IER hace cumplir, incluyendo llamar a la línea directa de la IER. Las personas que presentan una denuncia ante la IER, cooperan con una investigación de la IER o que de otra forma hacen valer sus derechos o los de otras personas también están protegidos al amparo de esta ley.
«Los trabajadores no deben enfrentarse a consecuencias negativas por comentar sus preocupaciones acerca de medidas que podrían constituir una vulneración de la disposición antidiscriminatoria de la ley de Inmigración y Nacionalidad», afirmó Kristen Clarke, la Fiscal General Auxiliar de la División de Derechos Civiles del Departamento de Justicia. «Animamos a los trabajadores y empleadores a comunicarse con la línea directa de la Sección de Derechos de Inmigrantes y Empleados para información sobre sus derechos y responsabilidades, para ayudar a resolver controversias lo más antes posible. La protección de aquellos que se comunican con la línea directa por motivos relacionados con represalias es esencial para garantizar su éxito».
Conforme la conciliación, Around the Clock pagará una sanción civil de 3.600 $ a los Estados Unidos y casi 900 $ por concepto de pagos retroactivos al individuo afectado. Por otra parte, la conciliación requiere que Around the Clock capacite sus empleados en cuanto a los requisitos de la disposición antidiscriminatoria de la INA y que se someta a los requisitos de supervisión y declaración del Departamento.
La IER, una sección que forma parte de la División de Derechos Civiles, es responsable de hacer cumplir la disposición antidiscriminatoria de la INA. La ley prohíbe la discriminación por motivos de estatus migratorio o de ciudadanía o bien por la nacionalidad de origen en los procesos de contratación, despido o reclutamiento o recomendación por comisión; prácticas documentales injustas y represalias e intimidación.
Aquellos aspirantes o empleados que creen haber sido discriminados por motivos de su estatus de ciudadanía o nacionalidad de origen en los procesos de contratación, despido, reclutamiento o verificación de la elegibilidad para trabajar (Formulario I-9 e E-Verify) o sujetos a represalias pueden presentar una denuncia. El público también puede llamar a la línea directa de la IER para trabajadores al 1‑800-255-7688 (1-800-237-2515, TTY para personas con discapacidades auditivas); llamar a la línea directa de la IER para empleadores al 1-800-255-8155 (1-800-237-2515, TTY para personas con discapacidades auditivas); enviar un correo electrónico a [email protected]; inscribirse a un seminario en línea gratuito; o visitar los sitios web de la IER en inglés o español. Para recibir las últimas noticias de la IER, inscríbase a GovDelivery.
DaVita Inc. and Former CEO Indicted in Ongoing Investigation of Labor Market Collusion in Health Care IndustryRead the Press Release
Note: The defendants in this case, DaVita Inc. and Kent Thiry, were acquitted by a jury of the charges alleged in the indictment described in the press release below.
A federal grand jury in Denver returned a two-count indictment charging DaVita Inc. and its former CEO, Kent Thiry, for conspiring with competing employers not to solicit certain employees. DaVita owns and operates outpatient medical care centers across the country, focusing on dialysis and kidney care. These charges are the result of the Antitrust Division’s ongoing investigation into employee allocation agreements in the health care industry. DaVita’s co-conspirator Surgical Care Affiliates LLC and its related entity (collectively SCA) were charged in January, and that case is pending in the Northern District of Texas.
The indictment alleges that DaVita and Thiry both participated in two separate conspiracies to suppress competition for the services of certain employees. Count One charges DaVita and Thiry for conspiring with SCA to allocate senior-level employees by agreeing not to solicit each other’s senior-level employees from as early as February 2012 until as late as July 2017. Count Two charges DaVita and Thiry for conspiring with another health care company from as early as April 2017 until as late as June 2019 to allocate employees by agreeing that the other health care company would not solicit DaVita’s employees.
“Those who conspire to deprive workers of free-market opportunities and mobility are committing serious crimes that we will prosecute to the full extent of the law,” said Acting Assistant Attorney General Richard A. Powers of the Justice Department’s Antitrust Division. “We are grateful for our partnership with the FBI and our shared commitment to rooting out illegal collusion targeting labor markets.”
“These charges show a disturbing pattern of behavior among health care company executives to conspire to limit the opportunities of workers,” said Assistant Director in Charge Steven M. D’Antuono of the FBI’s Washington Field Office. “The FBI is dedicated to working with our partners to hold those accountable who would engage in labor market collusion to the detriment of their employees.”
DaVita and Thiry are charged with two counts of violating the Sherman Act. The defendants are scheduled for their initial court appearance on July 20 before U.S. Magistrate Judge Kristen L. Mix of the U.S. District Court for the District of Colorado. If convicted, DaVita faces a maximum penalty of a $100 million fine per count, and Thiry faces a maximum penalty of 10 years in prison and a $1 million fine per count. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by victims if either amount is greater than the statutory maximum. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Today’s announcement is the result of an ongoing federal investigation being conducted by the Antitrust Division’s Washington Criminal II Section and the Washington Field Office of the FBI.
Anyone with information in connection with this investigation should contact the Antitrust Division’s Complaint Center at 888-647-3258, or visit http://www.justice.gov/atr/report-violations.
An indictment is merely an allegation, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Justice Department Requires Divestitures in Transaction between Global Industrial and Agricultural Equipment Component ManufacturersRead the Press Release
The Department of Justice announced today that it will require Danfoss A/S (Danfoss) and Eaton Corporation Plc (Eaton) to divest assets from both Danfoss’s and Eaton’s orbital motor and hydraulic steering unit manufacturing businesses in order to proceed with their proposed asset purchase agreement. Without these divestitures, the transaction would substantially lessen competition in the design, manufacture, and sale of orbital motors and hydraulic steering units used in agricultural, industrial and construction equipment in the United States.
The Justice Department’s Antitrust Division filed a civil antitrust lawsuit today in the U.S. District Court for the District of Columbia to block the proposed transaction. At the same time, the Antitrust Division filed a proposed settlement that, if approved by the court, would resolve the competitive harm alleged in the lawsuit.
“Orbital motors and hydraulic steering units are essential components in equipment used in the agricultural, industrial and construction industries,” said Acting Assistant Attorney General Richard A. Powers of the Justice Department’s Antitrust Division. “The transaction, as originally proposed, would have led to higher prices and lower quality for original equipment manufacturers in these industries that are vital to the American economy. The remedy preserves competition in the manufacture and sale of these products for the benefit of equipment manufacturers and consumers.”
According to the complaint, Danfoss and Eaton are the two largest suppliers of orbital motors used for mobile off-road equipment in the United States. Orbital motors are used to propel and power the working attachments in equipment like skid steer loaders, harvesters and street sweepers. The complaint also alleges that Danfoss and Eaton are the two largest suppliers of hydraulic steering units that help turn a vehicle’s wheels using hydraulic fluid. According to the complaint, absent a divestiture, the proposed transaction between Danfoss and Eaton would lead to higher prices, decreased quality of delivery and service, and diminished innovation.
Under the terms of the proposed settlement, the parties must divest three Danfoss orbital motor and hydraulic steering unit facilities located in Hopkinsville, Kentucky; Parchim, Germany; and Wroclaw, Poland, and two orbital motor production lines and one hydraulic steering unit production line from Eaton facilities located in Shawnee, Oklahoma, and Eden Prairie, Minnesota, to Interpump Group S.p.A. (Interpump) or an alternate acquirer approved by the United States. Interpump is a global, established provider of cylinders, pumps and valves with operations in North America, Europe, South America, and Asia.
The department expressed thanks to its enforcement partners in the European Commission for their close and constructive collaboration on this matter, which enabled a thorough investigation and resulted in remedies that will preserve competition in the United States and Europe.
Danfoss A/S, a global corporation headquartered in Nordborg, Denmark, manufactures components and engineering technologies, among other products, for hydraulics for off-road machinery through its Power Solutions division. Danfoss’s Power Solutions division had sales of approximately €6.3 billion in 2019.
Eaton Corporation Plc, a global corporation headquartered in Dublin, Ireland, manufactures hydraulic motors, power units, valves and steering units through its subsidiary’s Power & Motion Controls Division. Eaton’s Power & Motion Controls Division had sales of approximately $2.2 billion in 2019.
As required by the Tunney Act, the proposed settlement, along with a competitive impact statement, will be published in the Federal Register. Any person may submit written comments concerning the proposed settlement during a 60-day comment period to Jay Owen, Acting Chief, Defense, Industrials, and Aerospace Section, Antitrust Division, U.S. Department of Justice, 450 Fifth Street NW, Suite 8700, Washington, D.C. 20530. At the conclusion of the 60-day comment period, the U.S. District Court for the District of Columbia may enter the final judgment upon finding it is in the public interest.
The claims resolved by the settlement are allegations only and there has been no determination of liability.
Iranian Intelligence Officials Indicted on Kidnapping Conspiracy ChargesRead the Press Release
A New York federal court unsealed an indictment today charging four Iranian nationals with conspiracies related to kidnapping, sanctions violations, bank and wire fraud, and money laundering. A co-conspirator and California resident, also of Iran, faces additional structuring charges.
According to court documents, Alireza Shavaroghi Farahani, aka Vezerat Salimi and Haj Ali, 50; Mahmoud Khazein, 42; Kiya Sadeghi, 35; and Omid Noori, 45, all of Iran, conspired to kidnap a Brooklyn journalist, author and human rights activist for mobilizing public opinion in Iran and around the world to bring about changes to the regime’s laws and practices. Niloufar Bahadorifar, aka Nellie Bahadorifar, 46, originally of Iran and currently residing in California, is alleged to have provided financial services that supported the plot.
“Every person in the United States must be free from harassment, threats and physical harm by foreign powers,” said Acting Assistant Attorney General Mark J. Lesko for the Justice Department’s National Security Division. “Through this indictment, we bring to light one such pernicious plot to harm an American citizen who was exercising their First Amendment rights, and we commit ourselves to bring the defendants to justice.”
“As alleged, four of the defendants monitored and planned to kidnap a U.S. citizen of Iranian origin who has been critical of the regime’s autocracy, and to forcibly take their intended victim to Iran, where the victim’s fate would have been uncertain at best,” said U.S. Attorney Audrey Strauss for the Southern District of New York. “Among this country’s most cherished freedoms is the right to speak one’s mind without fear of government reprisal. A U.S. citizen living in the United States must be able to advocate for human rights without being targeted by foreign intelligence operatives. Thanks to the FBI’s exposure of their alleged scheme, these defendants have failed to silence criticism by forcible abduction.”
“As alleged in this indictment, the government of Iran directed a number of state actors to plot to kidnap a U.S.-based journalist and American citizen, and to conduct surveillance on U.S. soil - all with the intention to lure our citizen back to Iran as retaliation for their freedom of expression,” said Assistant Director Alan E. Kohler Jr. of the FBI’s Counterintelligence Division. “We will use all the tools at our disposal to aggressively investigate foreign activities by operatives who conspire to kidnap a U.S. citizen just because the government of Iran didn’t approve of the victim’s criticism of the regime.”
According to the indictment, Farahani is an Iranian intelligence official who resides in Iran. Khazein, Sadeghi and Noori are Iranian intelligence assets who also reside in Iran and work under Farahani. Since at least June 2020, Farahani and his intelligence network have plotted to kidnap a U.S. citizen of Iranian origin (Victim-1) from within the United States in furtherance of the government of Iran’s efforts to silence Victim-1’s criticisms of the regime. Victim-1 is an author and journalist who has publicized the government of Iran’s human rights abuses.
Prior to the kidnapping plot, the government of Iran attempted to lure Victim-1 to a third country in order to capture Victim-1 for rendition to Iran. In approximately 2018, Iranian government officials attempted to induce relatives of Victim-1, who reside in Iran, to invite the victim to travel to a third country for the apparent purpose of having Victim-1 arrested or detained and transported to Iran for imprisonment. Victim-1’s relatives did not accept the offer. An electronic device used by Farahani contains, among other things, a photo of Victim-1 alongside photos of two other individuals, both of whom were lured from third countries and captured by Iranian intelligence, with one later executed and the other imprisoned in Iran, and a caption in Farsi that reads: “gradually the gathering gets bigger... are you coming, or should we come for you?”
On multiple occasions in 2020 and 2021, as part of the plot to kidnap Victim-1, Farahani and his network procured the services of private investigators to surveil, photograph and video record Victim-1 and Victim-1’s household members in Brooklyn. Farahani’s network procured days’ worth of surveillance at Victim-1’s home and the surrounding area, videos and photographs of the victim’s family and associates, surveillance of the victim’s residence, and the installation of and access to a live high-definition video feed of Victim-1’s home. The network repeatedly insisted on high-quality photographs and video recordings of Victim-1 and Victim-1’s household members; a large volume of content; pictures of visitors and objects around the house; and depictions of Victim-1’s body language. The network procured the surveillance by misrepresenting their identities and the purpose of the surveillance to the investigators, and laundered money into the United States from Iran to pay for the surveillance. Sadeghi acted as the network’s primary point of contact with private investigators while Noori facilitated payment to the investigators in furtherance of the plot.
As part of the kidnapping plot, the Farahani-led intelligence network also researched methods of transporting Victim-1 out of the United States for rendition to Iran. Sadeghi, for example, researched a service offering military-style speedboats for self-operated maritime evacuation out of New York City, and maritime travel from New York to Venezuela, a country whose de facto government has friendly relations with Iran. Khazein researched travel routes from Victim-1’s residence to a waterfront neighborhood in Brooklyn; the location of Victim-1’s residence relative to Venezuela; and the location of Victim-1’s residence relative to Tehran.
The network that Farahani directs has also targeted victims in other countries, including victims in Canada, the United Kingdom and the United Arab Emirates, and has worked to procure similar surveillance of those victims.
As alleged, Bahadorifar provided financial and other services from the United States to Iranian residents and entities, including to Khazein, since approximately 2015. Bahadorifar facilitated access to the U.S. financial system and institutions through the use of card accounts and offered to manage business interests in the United States on Khazein’s behalf. Among other things, Bahadorifar caused a payment to be made to a private investigator for surveillance of Victim-1 on Khazein’s behalf. While Bahadorifar is not charged with participating in the kidnapping conspiracy, she is alleged to have provided financial services that supported the plot and is charged with conspiring to violate sanctions against Iran, commit bank and wire fraud, and commit money laundering. Bahadorifar is also charged with structuring cash deposits totaling more than approximately $445,000.
Farahani, Khazein, Sadeghi and Noori are each charged with: (1) conspiring to kidnap, which carries a maximum sentence of life in prison; (2) conspiring to violate the International Emergency Economic Powers Act (IEEPA) and sanctions against the government of Iran, which carries a maximum sentence of 20 years in prison; (3) conspiring to commit bank and wire fraud, which carries a maximum sentence of 30 years in prison; and (4) conspiring to launder money, which carries a maximum sentence of 20 years in prison. Bahadorifar is charged with counts two, three and four, and is further charged with structuring, which carries a maximum sentence of 10 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
The FBI’s New York Field Office, Counterintelligence-Cyber Division and Iran Threat Task Force are investigating the case.
Trial Attorney Nathan Swinton of the Justice Department’s Counterintelligence and Export Control Section and Assistant U.S. Attorneys Michael D. Lockard, Jacob H. Gutwillig and Matthew J.C. Hellman of the Southern District of New York are prosecuting the case.
An indictment is merely an allegation, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Virginia Return Preparer Convicted of Tax FraudRead the Press Release
A federal jury in Newport News, Virginia, convicted Karl Burden-El Bey (aka Carl L. Burden) Friday of aiding and assisting in the preparation of false tax returns, theft of government funds and failing to file federal income tax returns.
According to court documents and evidence presented at trial, Burden-El Bey, of Hampton, prepared false tax returns for clients from at least 2013 through 2019. On his clients’ returns, Burden-El Bey claimed false dependents, residential energy credits, gifts to charity, deductions, and child and dependent care expenses in order to inflate refunds obtained from the IRS. Burden-El Bey also stole $5,000 by directing a portion of his client’s refund into his personal bank account. As to his own taxes, Burden-El Bey did not file individual tax returns for 2013 through 2017 with the IRS, despite being legally obligated to do so.
Sentencing is scheduled for Dec. 7 before U.S. District Judge David J. Novak.
Burden-El Bey faces a statutory maximum sentence of 10 years in prison for theft of government funds, three years in prison for each count of aiding and assisting in the preparation of a false tax return, and one year in prison for each count of failing to file a tax return. He also faces substantial monetary penalties, supervised release and restitution at sentencing.
Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Department of Justice’s Tax Division and Acting U.S. Attorney Raj Parekh of the Eastern District of Virginia made the announcement.
IRS-Criminal Investigation investigated the case.
Trial Attorneys Grace Albinson and Francesca Bartolomey of the Tax Division and Assistant U.S. Attorneys Brian Samuels and Lisa McKeel of the Eastern District of Virginia prosecuted this case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
United States Files Complaint and Reaches Agreement on Stipulation with Limetree Bay Terminals LLC and Limetree Bay Refining LLC Relating to Petroleum Refinery in St. Croix, U.S. Virgin IslandsRead the Press Release
Today, the U.S. Department of Justice, on behalf of the U.S. Environmental Protection Agency (EPA), filed a complaint in federal court in the U.S. Virgin Islands against Limetree Bay Terminals LLC and Limetree Bay Refining LLC (jointly Limetree Bay) alleging that the companies’ St. Croix petroleum refinery presents an imminent and substantial danger to public health and the environment. In a stipulation filed simultaneously with the complaint that acknowledges that the refinery is not currently operating and that Limetree Bay does not intend to restart the refinery at the present time, Limetree Bay has agreed to a number of requirements, including the following:
- Complete all corrective measures that are necessary to eliminate any imminent and substantial endangerment to public health or welfare or the environment posed by the refinery or refinery process units before the refinery or any refinery process unit restarts;
- Notify the United States and the court no fewer than 90 days before restarting the refinery or any refinery process unit;
- Install hydrogen sulfide (H2S) and sulfur dioxide (S02) monitors at nine monitoring sites prior to restart of the refinery or any refinery process unit; and
- Submit a plan for EPA approval to purge hydrocarbons from refinery process units and other equipment at the refinery as part of the process of indefinite shutdown. The hydrocarbon purging plan will include the operation of ambient air monitoring.
“Today’s action shows the Department of Justice’s commitment to enforcing the Clean Air Act and protecting American communities from harmful air pollution,” said Acting Assistant Attorney General Jean E. Williams of the Justice Department’s Environment and Natural Resources Division.
“EPA is committed to ensuring that Limetree Bay’s activities and operations comply with laws that protect public health,” said Acting Regional Administrator Walter Mugdan for the EPA. “Today’s action and stipulation further strengthen our work to protect communities near this refinery by securing a binding commitment from the company that any restart of operations or initiation of long-term shutdown activities, such as purging gases, must receive EPA’s prior approval. These actions advance EPA’s commitment to environmental justice and to protect clean air for those living in vulnerable and overburdened communities.”
Since February of this year, the refinery experienced multiple major incidents resulting in significant air pollutant and oil releases. Many residents in the surrounding St. Croix community reported becoming sickened by some of the releases.
Following four incidents at the refinery, EPA issued an administrative order (EPA Order) to Limetree Bay Terminals LLC and Limetree Bay Refining LLC on May 14. The EPA Order issued under Section 303 of the Clean Air Act required Limetree Bay to cease refinery operations; conduct an environmental compliance audit and process area audits of the refinery’s flare system, delayed coking unit, and sulfur recovery unit; and submit a corrective measures plan to address the audits’ findings.
Under Section 303 of the Clean Air Act, the EPA Order remains effective for 60 days unless the United States files a complaint seeking longer-term relief. By filing today’s complaint, the EPA order is automatically extended by 14 days. The complaint seeks an injunction requiring Limetree Bay to comply with the requirements of the EPA order, to take all measures necessary to eliminate the imminent and substantial endangerment before restarting refinery operations including complying with the corrective measures plan, and other appropriate relief.
Members of the public can help protect our environment by identifying and reporting environmental violations. Learn more here: https://www.epa.gov/enforcement/report-environmental-violation-general-information.
New York Business Owner Pleads Guilty to Payroll Tax FraudRead the Press Release
The owner of a Brooklyn construction business, AD Custom Interiors Inc., pleaded guilty on July 9 to not paying payroll taxes to the IRS.
According to court documents, as the sole owner and operator of AD Custom, Anthony Riccio had a duty to truthfully account for and pay over to the IRS payroll taxes owed by his employees. From approximately January 2011 through January 2016, Riccio cashed over $3.1 million in checks paid to AD Custom. Riccio used some of that cash to pay wages to his employees. Riccio concealed these cash payments from AD Custom’s return preparer, causing the accountant to prepare employment tax returns that underreported wages and payroll taxes owed. Over five years, Riccio failed to pay $255,433 in federal payroll taxes, including income, Social Security and Medicare taxes, owed by AD Custom and its employees.
Riccio is scheduled to be sentenced on Oct. 21 and faces a maximum penalty of five years in prison. Riccio also faces a period of supervised release, restitution and monetary penalties. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division made the announcement.
IRS-Criminal Investigation is investigating the case.
Trial Attorneys Shawn T. Noud and Mark W. Kotila of the Justice Department’s Tax Division are prosecuting the case.
Nebraska Railcar Cleaning Company and its Owners Plead Guilty to Violating Environmental and Worker Safety Laws Related to Workers’ 2015 DeathsRead the Press Release
Nebraska Railcar Cleaning Services LLC (NRCS), its president and owner, Steven Michael Braithwaite, and its vice president and co-owner, Adam Thomas Braithwaite, pleaded guilty today in federal court in Omaha to charges stemming from an investigation into a 2015 fatal railcar explosion that killed two workers. The charges include conspiracy, violating worker safety standards resulting in worker deaths, violating the Resource Conservation and Recovery Act (RCRA), and submitting false documents to the Occupational Safety and Health Administration (OSHA).
“The Department of Justice is dedicated to protecting the health and safety of American workers and to protecting our environment,” said Acting Assistant Attorney General Jean E. Williams of the Justice Department’s Environment and Natural Resources Division. “The defendants in this case put their employees at risk and falsified documents to evade worker safety requirements. Tragically, two of their employees died while working with hazardous waste under unsafe conditions. Guided by its managers, NRCS failed to appropriately dispose of hazardous wastes removed during the cleaning process — wastes that are ignitable and can cause human cancer and other health effects. Today’s guilty pleas show that the Department of Justice will prosecute those who thwart federal laws created to protect American workers and the environment.”
“Worker safety standards and environmental regulations are not just meaningless rules made up by faceless bureaucrats,” said Acting U.S. Attorney Jan Sharp of the District of Nebraska. “They address real-world safety issues, and failure to abide by them can cost lives. Today’s guilty pleas emphasize the grave consequences of cutting corners, not only for the workers who are meant to be protected, but also for the employers who fail to live up to their responsibilities.”
“The Occupational Safety and Health Administration (OSHA) has regulations that companies must follow to ensure worker safety,” said Special Agent-in-Charge Steven Grell of the U.S. Department of Labor, Office of Inspector General, Dallas Region. “Steven and Adam Braithwaite disregarded OSHA regulations and provided false documentation to OSHA to make it appear as if all safety requirements were being followed, when in fact, they were not. Their lack of adherence to OSHA regulations and indifference to their employees’ safety resulted in tragic consequences which impacted several families. We will continue to work with our law enforcement partners and OSHA to hold accountable those who jeopardize workers ’ safety and obstruct DOL agencies in carrying out their important missions.”
“The defendants in this case ignored health and safety protocols and knowingly put their employees and the public at risk by disregarding federal regulations,” said Acting Assistant Administrator Larry Starfield for the EPA’s Office of Enforcement and Compliance Assurance. “Today’s guilty pleas send a clear message that individuals who intentionally violate these laws will be held accountable.”
NRCS was in the business of cleaning railcars, including rail tanker cars. Tanker car cleaning often involved NRCS sending workers inside the cars’ tanks to scrape and remove various commodities, including gasoline, ethanol, petroleum by-products, pesticides, herbicides and food-grade products.
According to court documents, NRCS failed to implement worker safety standards and then tried to cover that up during an inspection by OSHA. In addition, the company mishandled hazardous wastes removed from rail tanker cars during the cleaning process. On April 14, 2015, two NRCS workers who were sent into a tanker car containing severely flammable residue were killed and another injured when the contents of the railcar they were cleaning ignited and exploded.
On various occasions prior to the explosion, OSHA officials conducted regulatory inspections during which they notified the principals of NRCS that NRCS was in violation of OSHA safety regulations concerning confined space entries. Rail tanker cars are “confined spaces” under the Occupational Safety and Health Act. After an inspection of NRCS, Steven Braithwaite entered into a written agreement on Feb. 5, 2015, where he represented that NRCS had been testing for benzene since July 2014. After OSHA returned to NRCS in March 2015 to conduct a follow-up inspection and was turned away by Steven Braithwaite, Adam Braithwaite submitted falsified documents to OSHA purporting to show that NRCS had been purchasing equipment to test the contents of railcars for benzene and had taken other required safety precautions. Adam Braithwaite also falsely testified under oath in an OSHA hearing that NRCS had been purchasing the benzene testing equipment.
Meanwhile, NRCS had been engaged to clean the railcar that ultimately exploded. On or about Jan. 27, 2015, NRCS received an inquiry from one of its customers about receiving and cleaning product residue from a rail tanker car. The inquiry included a Safety Data Sheet (SDS) for the product in the railcar, describing it as “natural gasoline,” also known as “petrol, casing head gasoline, CS ’s.” The SDS also stated that the flammability rating was “severe” at class “4” (the highest rating), that the natural gasoline would ignite at zero degrees Fahrenheit, and that it contained benzene, a “cancer hazard.” NRCS responded that it could handle the material in the railcar.
The tanker car was not tested for benzene levels. Nonetheless, NRCS sent two of its employees into the tanker car. Continuous monitoring for explosive levels of gases was not conducted. The two employees sent into tanker car began removing the remaining contents, which were hazardous for toxicity (benzene) and ignitability. On April 14, 2015, approximately one hour after the two employees were sent into the tanker car, its contents ignited and exploded, killing those two employees and injuring a third.
Stephen Michael Braithwaite was the President and majority owner of NRCS and was responsible for all phases of the business, including both environmental and worker safety issues. He pleaded guilty to two counts of violating worker safety standards that resulted in the workers’ deaths, and knowingly endangering others by violating RCRA. Adam Thomas Braithwaite was the Vice President and a minority owner of NRCS and also handled both environmental and worker safety issues, among others. He also pleaded guilty to two counts of violating worker safety standards that resulted in the workers’ deaths, to two counts of falsification of records in a federal investigation, and to committing perjury. NRCS pleaded guilty to all 21 of the counts it was charged with in the indictment.
The defendants are scheduled to be sentenced on Oct.25. Steven Braithwaite faces a maximum penalty of 15 years in prison and a fine of the greater of $750,000 or twice the gain or profit caused by the offense. Adam Braithwaite faces a maximum penalty of 20 years in prison and a fine of the greater of $1,250,000 or twice the gain or profit caused by the offense and NRCS faces a maximum penalty of five years’ probation and a fine of the greater of $9,500,000 or twice the gain or profit caused by the offense. A federal district court judge will determine the sentences after considering the U.S. Sentencing Guidelines and other statutory factors.
The case was investigated by U.S. EPA’s Criminal Investigation Division and the U.S. Department of Labor’s Office of Inspector General. Senior Counsel Krishna S. Dighe of the Department of Justice, Environmental Crimes Section, and Assistant U.S. Attorney Donald J. Kleine of the District of Nebraska are prosecuting the case.
Long Island Resident Pleads Guilty to Multimillion-Dollar Elder Fraud SchemeRead the Press Release
A Long Island woman pleaded guilty today to participating in a scheme to mail fraudulent prize notices that led recipients, many of whom were elderly and vulnerable, to believe that they could claim large cash prizes in exchange for a modest fee. None of the victims who submitted fees, which in total exceeded $30 million, received a substantial cash prize.
According to court documents, Lorraine Chalavoutis, 64, of Greenlawn, New York, conspired to mail fraudulent prize notices to thousands of victims throughout the United States between December 2010 and July 2016. The mailings appeared to be personally addressed to thousands of individuals whose names were on consumer lists obtained by Chalavoutis and her primary co-conspirators, Shaun Sullivan and Tully Lovisa. Chalavoutis created various shell companies for the purported senders of the mailings, and hid her co-conspirators’ involvement in the business by using straw owners. Lovisa and Sullivan both pleaded guilty to conspiracy to commit mail fraud and are awaiting sentencing. In separate cases, several other defendants have also pleaded guilty to conspiracy to commit mail fraud in connection with the scheme.
“Those who knowingly facilitate fraud schemes, including individuals who play administrative roles in setting up and maintaining the criminal operations, bear responsibility for the harm caused to victims,” said Acting Assistant Attorney General Brian M. Boynton of the Justice Department’s Civil Division. “The Department of Justice is committed to protecting elderly and vulnerable Americans and to prosecuting individuals who perpetrate and knowingly enable such schemes.”
“With today’s plea, Chalavoutis has admitted her role in a nefarious and fraudulent scheme to enrich herself by tricking elderly and vulnerable victims into believing they had won a cash prize that they could collect after paying her modest fees,” said Acting U.S. Attorney Jacquelyn M. Kasulis for the Eastern District of New York. “Protecting the community from those who commit fraud to deliberately prey on the false hopes of the vulnerable remains a priority of this office and the Department of Justice.”
“Today’s plea is an example of the coordinated efforts of law enforcement to bring those to justice who prey on vulnerable adults through the distribution of bogus solicitations, luring the unsuspecting ‘prize winner’ to send money in an effort to steal not only their money, but in many cases their independence,” said Inspector-in-Charge Philip R. Bartlett of the U.S. Postal Inspection Service, New York Division.
Chalavoutis pleaded guilty to conspiracy to commit mail fraud before U.S. District Judge Joanna Seybert. She is scheduled to be sentenced on Jan. 18, 2022, and faces a maximum penalty of 20 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
The U.S. Postal Inspection Service investigated the case. Trial Attorneys Daniel Zytnick and Timothy Finley of the Civil Division’s Consumer Protection Branch and Assistant U.S. Attorney Charles P. Kelly of the U.S. Attorney’s Office for the Eastern District of New York are prosecuting the case.
For more information about the Consumer Protection Branch, visit its website at http://www.justice.gov/civil/consumer-protection-branch. For more information about the U.S. Attorney’s Office for the Eastern District of New York, visit its website at https://www.justice.gov/usao-edny.
Justice Department and Federal Maritime Commission Sign Memorandum of Understanding to Support Interagency CollaborationRead the Press Release
The Department of Justice’s Antitrust Division and the Federal Maritime Commission (FMC) have signed the first interagency Memorandum of Understanding (MOU) to foster cooperation and communication between the agencies to enhance competition in the maritime industry. Acting Assistant Attorney General Richard A. Powers and FMC Chairman Daniel Maffei signed the MOU between the Antitrust Division and the FMC effective this afternoon following Friday’s announcement of the Executive Order on Promoting Competition in the American Economy.
“Collaboration between the Antitrust Division and the FMC is important to ensuring healthy competition in the maritime industry,” said Acting Assistant Attorney General Powers. “Our partnership with the FMC is one of the many ways in which the Antitrust Division is prepared to play its role in achieving the competition objectives of the President’s Competition Executive Order.”
“The Federal Maritime Commission has an important enforcement role as an economic regulator of a vital industry,” said Chairman Maffei. “As such, we will continually assess how the agency can improve its capacity to protect the integrity of the marketplace. This memorandum between the Commission and the Department of Justice supplements and strengthens the FMC’s ability to detect, address, and pursue violations of the law or anticompetitive behavior by those we regulate.”
Key provisions of the MOU facilitate communication and cooperation between the agencies. In particular, the MOU establishes a framework for the Antitrust Division and the FMC to continue regular discussions and review law enforcement and regulatory matters affecting competition in the maritime industry. The MOU includes provisions to establish periodic meetings among the respective agencies’ officials. The MOU also provides for the exchange of information and expertise that may be relevant and useful to the agencies’ oversight and enforcement responsibilities, as appropriate and consistent with applicable legal and confidentiality restrictions.
Justice Department and Board of Elections of Oneida County, New York, Reach Agreement under National Voter Registration Act and Help America Vote ActRead the Press Release
The Justice Department announced today that it has entered into a proposed consent decree to settle a voting rights lawsuit with the Board of Elections of Oneida County, New York.
The proposed consent decree was filed in the U.S. District Court for the Northern District of New York in conjunction with a lawsuit brought by the Justice Department. The Justice Department’s complaint alleges that, before the November 2020 federal general election, the Oneida County Board of Elections failed to process approximately 2,400 timely-submitted voter registration applications completed through state motor vehicle offices and failed to ensure that voter registration applicants received timely notice of the disposition of their applications, in violation of Section 8 of the National Voter Registration Act (NVRA). The complaint also alleges that the State violated Section 302 of the Help America Vote Act (HAVA) by summarily rejecting nearly 1,800 provisional ballots cast by Oneida County voters in the November 2020 federal election without verifying the voters’ eligibility and without counting those provisional ballots cast by eligible voters.
The Justice Department gave notice to the Oneida County Board of Elections of its intent to bring suit under the NVRA and HAVA on March 23, and the parties worked collaboratively to achieve this agreement. The parties’ consent decree, which must still be approved by the court, provides that the Oneida County Board of Elections will develop and implement uniform and nondiscriminatory policies and procedures to ensure that election officials review and process all timely submitted voter registration applications in accordance with the NVRA. In addition, the board will train all poll officials and other election personnel regarding the provisional balloting requirements of HAVA. Finally, the board will provide periodic reports to the Justice Department regarding compliance with the proposed consent decree.
“We will continue using critical federal voting rights laws to help ensure that eligible voters enjoy access to the ballot box,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “The National Voter Registration Act requires states to ensure that voter registration applications submitted before the deadline for federal elections are timely processed, and that qualified voters are promptly included on voter rolls for federal elections. The Help America Voter Act ensures that registered voters who have been left off voting lists can cast provisional ballots that will be promptly verified and counted if the voters are found to be eligible. I am pleased that the Oneida County Board of Elections has worked with the Department of Justice and agreed to measures that will protect these vital rights and establish safeguards to ensure compliance with the law in future federal elections.”
“We join the Civil Rights Division in bringing this important lawsuit under the National Voter Registration Act and the Help America Vote Act, and appreciate that Oneida County has worked with the Justice Department to ensure that all Oneida County residents enjoy the voting rights and protections afforded to them,” said Acting U.S. Attorney Antoinette T. Bacon of the Northern District of New York.
More information about the National Voter Registration Act, the Help America Vote Act and other federal voting rights laws is available on the Department of Justice website at https:www.justice.gov/crt/voting-section.
Justice Department Statement on Law Enforcement Assistance to the Haitian GovernmentRead the Press Release
The U.S. Department of Justice today released the following statement from spokesman Anthony Coley on department efforts to provide law enforcement assistance to the people and Government of Haiti:
“At the request of the Haitian government, the Department of Justice, along with its U.S. government partners, is assisting the Haitian National Police in the investigation of the assassination of Haitian President Jovenel Moïse.
“An initial assessment has been conducted in Haiti by senior U.S. officials. The department will continue to support the Haitian government in its review of the facts and circumstances surrounding this heinous attack.
“The department will also investigate whether there were any violations of U.S. criminal law in connection with this matter.”
Florida Department of Children and Families Agrees to Pay $17.5 Million to Resolve False Claims Act Liability in Connection with SNAP Quality ControlRead the Press Release
The Florida Department of Children and Families (FDCF) has agreed to pay to the United States $17,500,000 to resolve allegations that it violated the False Claims Act in its administration of the U.S. Department of Agriculture’s (USDA) Supplemental Nutrition Assistance Program (SNAP). Until 2008, SNAP was known as the Food Stamp Program.
“SNAP provides important benefits to help families in need,” said Acting Assistant Attorney General Brian M. Boynton of the Justice Department’s Civil Division. “This settlement is an example of the department’s commitment to ensuring that taxpayer funds are spent appropriately so that the public can have confidence in the integrity of vital programs like SNAP.”
“While it is shocking these claims where submitted by the Florida Department of Children and Families, the state agency entrusted with assisting vulnerable and needy individuals, I commend the agency for correcting its conduct, cooperating with our investigation, and resolving its liability for its past actions,” said Acting U.S. Attorney Joseph H. Harrington for the Eastern District of Washington. “Together with our partners in the Justice Department’s Civil Division and the USDA, we will continue to investigate and hold accountable those who misuse and wrongfully obtain SNAP funding.”
“We appreciate the commitment and investigative assistance provided by our partners at the Department of Justice’s Civil Division and the U.S. Attorney’s Office throughout this multi-state investigation,” said Special Agent in Charge Bethanne M. Dinkins of the USDA, Office of Inspector General (OIG). “We also wish to note the technical assistance provided by our colleagues in the Office of Audit at OIG. During the investigation, conducted by OIG’s Northeast Regional Office, we worked together to address the concerns of employees of multiple states and others who alleged that the integrity of the SNAP quality control process was weakened by third-party consultants and/or the implementation of methods that injected bias into the quality control process. These concerned individuals reported that cases were not being treated in a consistent manner, and that certain advice from consultants and/or the implementation of certain methods resulted in identified errors being diminished rather than used to improve eligibility determinations. The settlements reached to date send a strong message regarding the government’s commitment to work across agency lines to protect the integrity of SNAP.”
Under SNAP, USDA provides eligible low-income individuals and families with financial assistance to buy nutritious food. Since 2010, SNAP has served on average more than 45 million Americans per month and provided more than $71 billion annually.
Although the federal government funds SNAP benefits, it relies on the states to determine whether applicants are eligible for benefits, to administer those benefits and to have appropriate quality control processes in place. To ensure that these quality control processes serve as an accurate check on eligibility decisions, USDA requires that these processes be free from bias and accurately report states’ error rates in awarding benefits.
The USDA reimburses states for a portion of their administrative expenses in administering SNAP, including expenses for providing quality control. It also pays performance bonuses to states that report the lowest and the most improved error rates each year, and can impose monetary sanctions on states with high error rates that do not show improvement.
The settlement announced today resolves allegations that beginning in 2010, FDCF implemented improper policies and practices to reduce its SNAP error rate. Specifically, the United States alleged FDCF injected bias into its quality control process that resulted in FDCF submitting false quality control data and information to USDA, for which it received unentitled performance bonuses for fiscal years 2011 and 2012. In addition to its payment of $17.5 million, FDCF has also agreed to forego payment of an additional $14.7 million in unpaid bonuses that USDA awarded for fiscal years 2013 and 2014.
The United States has previously settled allegations of improper manipulation of SNAP quality control findings with state agencies in Virginia, Wisconsin, Texas, Louisiana, Alaska and Mississippi, as well as with Osnes Consulting and its owner, Julie Osnes, who the government alleged advised and encouraged many of these agencies to engage in such manipulations. Including this settlement, the United States has now recovered over $60 million in connection with this investigation of the SNAP program.
The settlement was the result of a coordinated effort between the Civil Division’s Commercial Litigation Branch (Fraud Section) and the U.S. Attorney’s Office for the Eastern District of Washington, with investigative support from the USDA-OIG. The investigation arose out of a nationwide audit of SNAP Quality Control processes by the USDA-OIG.
The matter was handled by Senior Trial Counsel Don Williamson of the Civil Division and Assistant U.S. Attorneys Dan Fruchter and Tyler Tornabene of the Eastern District of Washington.
The claims resolved by the settlement are allegations only and there has been no determination of liability.
Statement of Attorney General Merrick B. Garland on the Justice Department’s Implementation of the Executive Order on Promoting Competition in the American EconomyRead the Press Release
Attorney General Merrick B. Garland made the following statement after the President’s signing of the Executive Order on Promoting Competition in the American Economy:
“The Department of Justice welcomes the Executive Order, which furthers a fair, open and competitive economy through a ‘whole of government’ approach. The department reaffirms its commitment to promoting competition by fairly and vigorously enforcing the antitrust laws. We will immediately begin implementing the interagency collaborations called for in the Executive Order, and we look forward to helping our agency partners use their regulatory authorities to bring greater competition to the U.S. economy. As President Biden emphasized in the Executive Order, competitive markets benefit all Americans — including consumers, workers, farmers and entrepreneurs.
“Our nation’s laws promote competition through both antitrust enforcement and regulation. The Department of Justice is responsible for preventing harmful mergers and stopping anticompetitive conduct through vigorous enforcement of the antitrust laws. At the same time, the regulatory powers wielded by a wide variety of federal agencies can be used to lower barriers to competitive entry, promote innovation and limit the harms that flow from monopoly power.
“Using enforcement and regulation in tandem will benefit America’s consumers, workers and small businesses by increasing competition throughout the economy, including in key areas such as labor markets and the agricultural, health care and technology sectors. The Executive Order’s ‘whole of government’ strategy builds on historical examples of the department working closely with regulators to promote and sustain competition. While the department’s antitrust consent decree shattered the AT&T telephone monopoly, the explosion in choice of phone service and network equipment innovation that followed also required rules that the Federal Communications Commission (FCC) developed and worked with the department to implement. Similar collaborations have supported competition in industries ranging from airlines to health insurance.
“As encouraged by the Executive Order, the department plans to work closely with other federal agencies to determine how their authorities can better promote competition and open markets in the modern economy. This increased interagency coordination will promote robust competition in the American economy. For example, working with the Department of Health and Human Services, we can promote high quality telehealth services that expand health care competition and lower prices for consumers and their employers.
“The department will closely examine its antitrust guidelines and policy statements to better educate the public on its enforcement priorities, and it will heighten its efforts to prevent mergers that would result in excessive consolidations of purchasing power.
“The department also will continue to expand its partnership with other agencies to promote competition in labor markets. When agencies work together to promote competition for workers, it helps all workers, including racial and ethnic minorities and disadvantaged and underrepresented groups. And the long-term benefits accrue not just to workers, but to the entire economy, including small businesses and rural communities.”
Click to view the Executive Order.
Statement of Acting Assistant Attorney General Richard A. Powers of the Antitrust Division and FTC Chair Lina Khan on Competition Executive Order’s Call to Consider Revisions to Merger GuidelinesRead the Press Release
The following joint statement can be attributed to Acting Assistant Attorney General Richard A. Powers of the Antitrust Division and Federal Trade Commission (FTC) Chair Lina Khan:
“We must ensure that the merger guidelines reflect current economic realities and empirical learning and that they guide enforcers to review mergers with the skepticism the law demands. The current guidelines deserve a hard look to determine whether they are overly permissive. We plan soon to jointly launch a review of our merger guidelines with the goal of updating them to reflect a rigorous analytical approach consistent with applicable law.”