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Tuesday 4 December 2012
Utah Woman Pleads Guilty to Tax FraudRead the Press Release
Gillette Barton, a resident of Taylorsville, Utah, pleaded guilty Monday to presenting a false claim to the United States, the Justice Department and Internal Revenue Service (IRS) announced. Barton appeared before U.S. Magistrate Judge Evelyn J. Furse in Salt Lake City.
According to the plea agreement, in October of 2009, Barton filed a false 2008 U.S. Individual Income Tax Return claiming an income tax refund of $58,299. Barton’s false claim was based on the use of false Forms 1099-OID, Original Issue Discount.
Barton faces a potential maximum sentence of five years in prison and a fine of up to $250,000.
This case was investigated by IRS-Criminal Investigation. Trial Attorneys Michael Romano and Stuart Wexler of the Justice Department’s Tax Division handled the prosecution.
Sentencing is tentatively scheduled for Feb. 19, 2013, before U.S. District Court Chief Judge Ted Stewart in Salt Lake City.
Two Mississippi Men Plead Guilty for Committing Hate Crimes Against African-AmericanRead the Press Release
William Kirk Montgomery, 23, from Puckett, Miss., and Jonathan K. Gaskamp, 20, from Brandon, Miss., pleaded guilty today in U.S. District Court in Jackson, Miss., to conspiracy and federal hate crime charges in connection with their roles in the assault of African-Americans in Jackson, the Justice Department announced today. Defendants Deryl Paul Dedmon, 20; John Aaron Rice, 19; and Dylan Wade Butler, 21, all from Brandon, Miss., have previously entered guilty pleas in connection with their roles in these offenses. The conspiracy culminated in the death of James Craig Anderson, who was assaulted and killed on June 26, 2011.
Montgomery and Gaskamp were both charged with one count of conspiracy and one count of violating the Matthew Sheppard James Byrd, Jr. Hate Crimes Prevention Act.
Beginning in the spring of 2011, Montgomery, Gaskamp and others conspired with one another to harass and assault African-Americans in and around Jackson. On numerous occasions, the co-conspirators used dangerous weapons, including beer bottles, sling shots and motor vehicles, to cause, and attempt to cause, bodily injury to African-Americans, specifically targeting those they believed to be homeless or under the influence of alcohol because they believed that such individuals would be less likely to report an assault. Additionally, the co-conspirators would often boast about these racially motivated assaults.
“We hope that today’s guilty pleas provide further closure to James Craig Anderson’s family and to the community that has mourned his senseless death and been further disheartened by the scope of the conspiracy to commit racially motivated assaults in Jackson by these and other co-conspirators,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The Justice Department’s focus in this matter is ongoing and broad; we will vigorously pursue those who commit racially motivated assaults and will use every tool at our disposal to ensure that those who commit such acts are brought to justice.”
According to plea documents presented in court today, the defendants engaged in a series of racially-motivated assaults in and around Jackson. On one occasion, Montgomery, Gaskamp, Deryl Paul Dedmon, John Aaron Rice and two other co-conspirators chased down and stopped an African-American man’s vehicle and then beat the man to the point that he begged for his life. Gaskamp kicked the victim in the head and body at least two times.
On another occasion, Montgomery, Gaskamp and others attended a birthday party/bonfire in Puckett, Miss., during which they discussed going to Jackson to harass and assault African-Americans. Montgomery, Dedmon, Rice, Butler and three other co-conspirators agreed to carry out the plan. At around 4:15 a.m. on June 26, 2011, Montgomery, Rice, Butler and another co-conspirator drove to Jackson in Montgomery’s white Jeep with the understanding that Dedmon and two other co-conspirators would join them a short time later. Gaskamp did not go to Jackson on this occasion. Upon arriving in Jackson, Montgomery and the other three occupants of the Jeep drove around and threw beer bottles at African-American pedestrians.
At approximately 5:00 a.m., Montgomery and the other three occupants of the Jeep spotted Anderson in a motel parking lot off Ellis Avenue. Rice and another co-conspirator decided to get out of the Jeep to distract Anderson while they waited for Dedmon and the other co-conspirators to arrive. After Dedmon and the other two co-conspirators arrived, Dedmon and Rice physically assaulted Anderson. After the assault, one of the co-conspirators yelled, “White Power!”, with Dedmon responding by also yelling “White Power!” Dedmon then deliberately used his vehicle to run over Anderson, causing injuries that resulted in his death.
Thereafter, a number of the co-conspirators, including Montgomery, agreed to, and did, give false statements to law enforcement officials about the nature of their interactions with Anderson.
“The defendants today took responsibility for committing federal hate crimes by assaulting vulnerable Americans solely because of their race,” said U.S. Attorney Gregory K. Davis. “Working with the Civil Rights Division of the Department of Justice, our office will continue to make the prosecution of hate crimes and other civil rights violations a top priority in the Southern District of Mississippi.”
“As the agency responsible for investigating criminal violations of federal civil rights statutes, the FBI takes very seriously its responsibility to uphold the civil rights of all citizens,” said Daniel McMullen, the Special Agent in Charge of the FBI’s Jackson Division. “The FBI will continue its efforts to identify and bring to justice all those individuals who participated in depriving Anderson and other citizens of their civil rights because of the color of their skin.”
These guilty pleas were the result of a cooperative effort between the U.S. Attorney’s Office for the Southern District of Mississippi, the Civil Rights Division of the Department of Justice, and the Hinds County District Attorney’s Office. This case was investigated by the Jackson Division of the FBI and the Jackson Police Department. It is being prosecuted by Trial Attorney Sheldon L. Beer and Deputy Chief Paige M. Fitzgerald of the Civil Rights Division and Assistant U.S. Attorney Glenda R. Haynes of the U.S. Attorney’s Office for the Southern District of Mississippi.
Three Men Sentenced to Prison for Participation in Online Conspiracy to Trade Child PornographyRead the Press Release
WASHINGTON – Two Wisconsin men and a Missouri man were sentenced to prison for their role in a conspiracy to advertise, distribute and possess child pornography, Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney for the Western District of North Carolina Anne M. Tompkins announced today.
Daniel Slott, 44, of Merrill, Wis., was sentenced today by U.S. District Judge Richard L. Voorhees in the Western District of North Carolina to serve 228 months in prison and lifetime supervised release.
Brian Slott, 42, of Merrill, was sentenced today Judge Voorhees to serve 180 months in prison and lifetime supervised release.
Henry Wright, 50, of Jefferson County, Mo., was sentenced yesterday by Judge Voorhees to serve 70 months in prison and 10 years of supervised release.Following their release, all three co-conspirators must register as sex offenders.
In November 2010, a grand jury charged six individuals, including Brian Slott, Daniel Slott and Wright, with conspiracy to advertise, distribute and possess child pornography. All three pleaded guilty to the charges in July 2011.According to filed court documents and court proceedings, Brian Slott, Daniel Slott and Wright engaged in a conspiracy with others to share child pornography on Facebook. Court records indicate that all three were members of several Facebook groups dedicated to sharing child pornography and child erotica, including groups called “girls girls girls :)” and “little girls love to play to :).” These groups contained over 10,000 images of child pornography and child erotica. According to filed documents and statements made in court, Wright engaged in chats with the group leader and commented on images of prepubescent children posted to the Facebook groups. Daniel Slott, a registered sex offender, traveled to his brother’s house to participate in the groups and download images of children engaged in sexually explicit conduct. Brian Slott also downloaded images from the groups’ sites. In August 2010, agents with the FBI executed a search warrant at Daniel Slott, Brian Slott and Henry Wright’s residences and seized multiple computers and storage media devices. Hundreds of images of child pornography were located on these items.
Three co-conspirators were sentenced earlier this fall: James Byrd was sentenced in August 2012 to serve 87 months in prison; David Large was sentenced in October 2012 to 70 months in prison; and Michael Engelking was sentenced in October 2012 to serve 210 months in prison.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse, launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The investigation was conducted by the FBI’s Violent Crimes Against Children Unit headquartered in Maryland. The case was prosecuted by Assistant U.S. Attorney Cortney S. Escaravage of the Western District of North Carolina and Trial Attorney LisaMarie Freitas of CEOS.
Texas Man Sentenced in Indiana to 330 Months in Prison <br /> for Participating in International Child Pornography Distribution RingRead the Press Release
WASHINGTON – A Texas man was sentenced today to serve 330 months in prison for his participation in an international child pornography distribution ring, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney Joseph H. Hogsett of the Southern District of Indiana.
Jeremy Daniel Labrec, 22, of Lubbock, Texas, was sentenced by U.S. District Judge Jane Magnus-Stinson in the Southern District of Indiana. In addition to his prison term, Labrec was sentenced to serve lifetime supervised release.
Labrec’s prosecution is the result of “Operation Bulldog,” a multi-jurisdictional effort to dismantle and prosecute the members of an international child pornography distribution ring. The ring was discovered in the course of investigating the production and distribution of child pornography by David Bostic, a Bloomington, Ind., man, who pleaded guilty to multiple charges in June 2011 and was sentenced in November 2011 to serve 315 years in prison. A total of nine defendants have been prosecuted in the Southern District of Indiana for their participation in the group, and all nine defendants have been sentenced to prison.
On June 6, 2012, Labrec pleaded guilty to 22 counts charging he sexually exploited children, distributed and received child pornography and conspired to commit these offenses.
Labrec was charged by indictment in February 2011, and he was arrested in March 2011. According to court documents, during the course of the investigation, law enforcement discovered that, in addition to his child pornography trafficking activities, Labrec had sexual contact with six young boys, all of whom were five years of age or younger.
A total of more than two dozen children have now been rescued as a result of Operation Bulldog. Efforts to identify additional defendants and victims in the United States and abroad are active and ongoing.This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
This case was investigated by the FBI, with local assistance from the Indiana State Police, the Kokomo, Ind., Police Department and the Brownsburg, Ind., Police Department.
The case is being prosecuted by Assistant U.S. Attorney A. Brant Cook of the Southern District of Indiana and Trial Attorney Michael Grant of CEOS.
New Mexico Probation Officer Arrested on Sexual Assault ChargesRead the Press Release
Gordon Chavez, 35, a probation officer with the New Mexico Corrections Department of Probation and Parole, was arrested today in Albuquerque, N.M., on charges related to the sexual assault of a probationer whom he supervised.
According to court documents, Chavez was arrested for violating the civil rights of the victim by depriving her of her right to bodily integrity. The complaint affidavit describes Chavez’s escalating behavior, including Chavez commenting on the victim’s appearance, the clothes she was wearing and her sexual activity. During office visits that the victim was required to attend, Chavez stared at the victim’s breasts while rubbing his own genital area through his pants. He also asked the victim to bring naked pictures of herself. Ultimately, Chavez groped and fondled the victim’s breast under her clothes against her will. Anyone with additional information is encouraged to call the Albuquerque Division of the FBI at (505) 889-1300.
Chavez will appear in federal court tomorrow for an initial appearance. A complaint merely establishes probable cause. Chavez is presumed innocent unless proven guilty.
This case is being investigated by the Albuquerque Division of the FBI and is being prosecuted by Assistant U.S. Attorney Mark Baker for the District of New Mexico and Fara Gold of the Civil Rights Division of the U.S. Department of Justice.
Justice Department Recovers Nearly $5 Billionin False Claims Act Cases in Fiscal Year 2012Read the Press Release
The Justice Department secured $4.9 billion in settlements and judgments in civil cases involving fraud against the government in the fiscal year ending Sept. 30, 2012, Tony West, Acting Associate Attorney General, and Stuart F. Delery, Principal Deputy Assistant Attorney General for the Civil Division, announced today. This figure constitutes a record recovery for a single year, eclipsing the previous record by more than $1.7 billion, and brings total recoveries under the False Claims Act since January 2009 to $13.3 billion – which is the largest four-year total in the Justice Department’s history and more than a third of total recoveries since the act was amended 26 years ago in 1986.
The False Claims Act is the government’s primary civil remedy to redress false claims for federal money or property, such as Medicare benefits, federal subsidies and loans and payments under contracts for goods and services, including military contracts. The 1986 amendments strengthened the act and increased incentives for whistleblowers to file lawsuits on behalf of the government, leading to more investigations and greater recoveries.
Most false claims actions are filed under the act’s whistleblower, or qui tam, provisions, which allow private citizens to file suits alleging false claims on behalf of the government. If the United States prevails in the action, the whistleblower, known as a relator, receives up to 30 perc ent of the recovery. The department saw a record 647 qui tam suits filed last fiscal year and recovered a record $3.3 billion in suits filed by whistleblowers during the same period.
The Justice Department’s 2012 efforts also included record recoveries for health care fraud, where recoveries topped $3 billion for the first time in a single fiscal year, thereby besting the previous record which had been set in fiscal year 2011. Housing and mortgage fraud accounted for an unprecedented $1.4 billion.
“Today’s announcement underscores the Obama Administration’s ongoing commitment to recover losses, to prevent fraud, to bring abuses to light, and to hold accountable those who violate the law and exploit some of the government’s most critical programs,” said Attorney General Eric Holder. “Thanks to the dedicated work of attorneys, investigators, analysts, and support staff at every level of the Justice Department – along with our state and local partners across the country – we have secured the largest annual recovery in the Department's history. By aggressively investigating allegations of waste and pursuing those who would take advantage of the most vulnerable members of society, I'm confident that we will continue to build on this historic progress in the months and years ahead.”
“The Justice Department, using the False Claims Act, recovered nearly $5 billion in taxpayer for false claims on the treasury, by far a record for any one year,” said Acting Associate Attorney General West. “This Administration’s commitment to fighting fraud in its many forms has led to the most successful four-year period in the department’s history. Vigorous enforcement of the False Claims Act not only protects taxpayer dollars; it also protects the integrity of important government programs on which so many of us rely.”
“Redressing fraud and abuse in government programs has been a top priority of the Department of Justice,” Principal Deputy Assistant Attorney General Delery said. “This success is also largely attributable to the brave individuals who initiate many of the investigations through whistleblower suits and to the Obama Administration’s efforts to coordinate enforcement efforts across government. While today we focus on federal recoveries, the cases successfully pursued by the Civil Division and the United States Attorneys throughout the country also returned billions of dollars to state Medicaid funds and homeowners threatened with foreclosure. In some cases, the individuals and corporations involved were also subject to criminal sanctions and were required to enter into corporate integrity agreements to prevent future misconduct.”
Health Care Fraud
As noted, this year represents the second straight year in which the department has set a new record for recoveries under the False Claims Act for health care fraud. This steady, significant and continuing success can be attributed in part to the high priority placed by the administration on fighting health care fraud. In 2009, Attorney General Holder and Health and Human Services (HHS) Secretary Kathleen Sebelius announced the creation of an interagency task force, the Health Care Fraud Prevention and Enforcement Action Team (HEAT), to increase coordination and optimize criminal and civil enforcement. This coordination has yielded historic results: From January 2009 through the end of the 2012 fiscal year, the department used the False Claims Act to recover more than $9.5 billion in federal health care dollars – also a record for any four-year period. Most of these recoveries relate to frauds against Medicare and Medicaid. For more information, go to StopMedicareFraud.gov , a web page jointly established by the Department of Justice and HHS that provides additional information on the government’s efforts in this area.
Enforcement actions involving the pharmaceutical and medical device industry were the source of some of the largest recoveries this year. The department recovered nearly $2 billion in cases alleging false claims for drugs and medical devices under federally insured health programs and, in addition, returned $745 million to state Medicaid programs. These cases include recoveries from GlaxoSmithKline LLC (GSK) and Merck, Sharp & Dohme (Merck) – two of the three top settlements this year. These recoveries do not include a $561 million False Claims Act settlement with Abbott Laboratories Inc., part of a $1.5 billion global resolution (which will be reflected in FY 2013 numbers) (details at Abbott Labs ).
GSK paid $1.5 billion to resolve False Claims Act allegations that the company (1) promoted the drugs Paxil, Wellbutrin, Advair, Lamictal and Zofran for uses not approved by the Food and Drug Administration, known as off-label use, and paid kickbacks to physicians to prescribe those drugs as well as the drugs Imitrex, Lotronex, Flovent and Valtrex; (2) made false and misleading statements concerning the safety of the drug Avandia; and (3) reported false best prices and underpaid rebates owed under the Medicaid Drug Rebate Program. The $1.5 billion in federal civil recoveries was part of a $3 billion global settlement including criminal fines and forfeitures as well as state Medicaid recoveries, making GSK the largest health care fraud settlement in U.S. history. For details, go to GSK settlement .
The department also recovered $441 million, including interest, from Merck to resolve allegations that the company promoted the drug Vioxx for off-label use for relief of rheumatoid arthritis and that company representatives made inaccurate, unsupported or misleading statements about Vioxx’s cardiovascular safety to increase sales, resulting in payments by federal health care programs. In addition, Merck paid nearly $322 million in criminal fines and returned more than $200 million to state Medicaid programs. For details, go to Merck settlement .
Adding to its successes under the False Claims Act, the Civil Division, through its Consumer Protection Branch, and together with U.S. Attorneys across the country, obtained 14 criminal convictions and $1.5 billion in criminal fines and forfeitures under the Food, Drug and Cosmetic Act (FDCA).
Mortgage and Housing Fraud
In addition to health care fraud, the department continued its aggressive pursuit of financial fraud, including fraud in the housing and mortgage industries that came to light in the wake of the financial crisis. In November 2009, President Obama established the Financial Fraud Enforcement Task Force to hold accountable the individuals and corporations who contributed to the crisis as well as those who would claim illegal advantage through false claims for funds intended to stimulate economic recovery. The task force is the broadest coalition of law enforcement, investigative, and regulatory agencies ever assembled to combat fraud. For more information on the efforts and results of the Financial Fraud Enforcement Task Force in mortgage and other financial fraud, go to StopFraud.gov .
In fiscal year 2012, the Task Force’s efforts resulted in a landmark $25 billion agreement between the federal government, the attorneys general of 49 states and the District of Columbia, on the one hand, and the nation’s five largest mortgage servicers, on the other, to address mortgage loan servicing and foreclosure abuses. The five settling companies are the Bank of America Corporation, JP Morgan Chase & Co., Wells Fargo & Company, Citigroup Inc. and Ally Financial Inc. (formerly GMAC). Among its other provisions – which included significant relief for struggling homeowners – the settlement included resolutions under the False Claims Act that returned more than $900 million to federal mortgage insurance programs, including programs designed to promote home ownership by families and veterans. In addition, the agreement provides substantial financial relief to homeowners and establishes significant new homeowner protections for the future. For details, go to $25 billion agreement .
Other significant settlements to redress false claims in connection with federally insured mortgages include a $202.3 million settlement with Deutsche Bank AG and its subsidiary MortgageIT Inc., a $158.3 million settlement with Citibank subsidiary CitiMortgage Inc. and a $132.8 million settlement with Flagstar Bank. For details, go to Deutsche Bank/MortgageIT , CitiMortgage , and Flagstar Bank .
Procurement Fraud
The department, with the assistance of other members of the Financial Fraud Enforcement Task Force, also achieved great success in the pursuit of procurement fraud, including fraud connected to the procurement of equipment and services for the military. In fiscal year 2012, the department recovered $427 million in false claims for goods and services purchased by the government, bringing total recoveries for procurement fraud since January 2009 to $1.7 billion.
The department recovered $73 million in cases related to the wars in Iraq and Afghanistan. These cases include a $37 million settlement with ATK Launch Systems Inc. to resolve allegations that ATK sold dangerous and defective illumination flares used by the Army and the Air Force for nighttime combat and for covert and search and rescue operations. In another wartime contracting case, Maersk Line Limited paid the United States $31.9 million to resolve allegations that the company knowingly overcharged the Department of Defense to transport cargo to U.S. troops in Afghanistan and Iraq. For details on these settlements, go to ATK and Maersk .
The department also recovered $200 million from software manufacturer Oracle Corp. and Oracle USA in the largest False Claims Act settlement ever obtained under a General Services Administration contract. GSA negotiates contracts with private sector companies for the purchase of commonly used commercial goods and services by agencies throughout the government. As part of their contract to gain access to the vast federal marketplace, these companies agree to disclose the discounts given to their commercial customers and to pass along those discounts to the government. The $200 million settlement with Oracle resolved allegations that the company overcharged the government by failing to disclose substantially lower prices offered to its commercial customers. For more details, go to Oracle settlement .
Recoveries in Whistleblower Suits
As part of a commemoration of the 25th anniversary of the False Claims Act amendments, the department noted earlier this year the importance of the legislation providing the tools needed to combat fraud against the government, especially by strengthening the False Claims Act’s qui tam provisions. In 1986, Senator Charles Grassley and Representative Howard Berman led successful efforts in Congress to amend the False Claims Act to, among other things, encourage whistleblowers to come forward with allegations of fraud. In 2009, Senator Patrick J. Leahy, chairman of the Senate Judiciary Committee, along with Senator Grassley and Representative Berman, championed the Fraud Enforcement and Recovery Act of 2009, which made additional improvements to the False Claims Act and other fraud statutes. And in 2010, the passage of the Affordable Care Act provided additional inducements and protections for whistleblowers and strengthened the provisions of the federal health care Anti-Kickback Statute.
The increased incentives for whistleblowers have led to an unprecedented number of investigations and greater recoveries. Of the $4.9 billion in fiscal year 2012 recoveries, a record $3.3 billion was recovered in whistleblower suits. In fiscal year 2012 alone, relators filed 647 qui tam suits. Of the nearly 8,500 qui tam suits filed since the 1986 amendments, nearly 2,200 were filed since January 2009. Looking at qui tam recoveries for the same periods, the department tallied $24.2 billion since 1986, with nearly $10.5 billion of that amount recovered from January 2009 through fiscal year 2012. Since 1986, whistleblowers have been awarded nearly $4 billion, with $439 million in awards in fiscal year 2012.
“The whistleblowers who bring wrongdoing to the government’s attention are instrumental in preserving the integrity of government programs and protecting taxpayers from the costs of fraud,” said Principal Deputy Assistant Attorney General Delery. “We are extremely grateful for the sacrifices they make to do the right thing.”
Acting Associate Attorney General West and Principal Deputy Assistant Attorney General Delery also expressed their deep appreciation for the dedicated public servants who contributed to the investigation and prosecution of these cases. These individuals include attorneys, investigators, auditors and other agency personnel throughout the Civil Division, the U.S. Attorneys’ Offices, HHS, Department of Defense and the many other federal and state agencies that contributed to the department’s record recoveries this past year.
“The department’s record recoveries this past year are a product of the tremendous skill and dedication of the people who worked on these cases and investigations,” Mr. Delery said.
Related Materials:
Principal Deputy Assistant Attorney General Stuart Delery Speaks at Pen and Pad Briefing Announcing Record Civil FY 2012 Recoveries
Acting Associate Attorney General Tony West Speaks at Pen and Pad Briefing Announcing Record Civil FY 2012 RecoveriesFlorida Man Charged with Filing False Claims for Tax RefundsRead the Press Release
A federal grand jury in Fort Lauderdale, Fla., returned an indictment charging Paul F. Wrubleski with corruptly impeding the due administration of the internal revenue laws and four counts of filing false claims for tax refunds, the Justice Department and the Internal Revenue Service (IRS) announced today.
According to the indictment, Wrubleski impeded the IRS by filing False W-4s that claimed he was exempt from income tax withholding, and filing false tax returns, including four tax returns that requested over $1.5 million in federal refunds. Wrubleski also sent obstructive letters, tax returns and other false documents to the IRS between 1999 and 2010. In addition, the indictment alleges that Wrubleski filed for bankruptcy in 2006 to impede IRS collection actions.
An indictment merely alleges that crimes have been committed and the defendant is presumed innocent until proven guilty beyond a reasonable doubt. If convicted on all counts, Wrubleski faces a maximum potential sentence of 23 years in prison and faces a fine of up to $1.2 million.
This case was investigated by special agents of IRS - Criminal Investigation. Trial Attorneys Charles Edgar, Jr. and Jed Silversmith of the Justice Department’s Tax Division and Assistant U.S. Attorney Bertha Mitrani are prosecuting the case.
Additional information about the Tax Division and its enforcement efforts may be found at www.justice.gov/tax .
County Commissioner Convicted in Georgia <br /> for Attempted Extortion and BriberyRead the Press Release
WASHINGTON — A federal jury in Albany, Ga., convicted Sumter County, Ga., County Commissioner Al J. Hurley late yesterday on corruption charges stemming from his acceptance of illicit payments in exchange for his official efforts to secure government contracts for a private contractor, Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and Middle District of Georgia U.S. Attorney Michael J. Moore announced.
Hurley, 54, of Americus, Ga., was found guilty of one count each of attempted extortion and federal program bribery.
Hurley was first elected to the five-member board of commissioners in 1999. As the primary governing body for the county, the board presided over a variety of official matters, including the bidding process for and award of various county contracts.
Evidence at trial showed that from September to December 2011, Hurley, in his capacity as a county commissioner, solicited and agreed to accept cash payments – including $5,000 on Oct. 23, 2011, and $15,000 on Dec. 19, 2011 – from a private contractor, in exchange for Hurley’s repeated promises to use official action and influence to help facilitate the award of county contracting work to the contractor.
In particular, Hurley told the contractor that he would help him win a $100,000 depot renovation contract in a city within Hurley’s district. Trial testimony also established that, in order to drive up the bribe amount, Hurley invented two inside contacts that he claimed to have at a new racetrack project in his district, and claimed the contacts could influence the award of related contracting work in favor of the contractor. Hurley, who testified, admitted the contacts did not exist.
Hurley faces a maximum potential penalty of 20 years in prison for the attempted extortion charge and 10 years in prison on the bribery charge. Each count also carries a maximum $250,000 fine. A sentencing date has not yet been set.
This case was prosecuted by Trial Attorney Eric G. Olshan of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney K. Alan Dasher of the Middle District of Georgia. This case was investigated by the FBI.
Attorney General Eric Holder and High-Level Officials Launch Global Alliance Against Child Sexual Abuse OnlineRead the Press Release
Attorney General Eric Holder and European Union (EU) Commissioner for Home Affairs Cecilia Malmström will launch the Global Alliance Against Child Sexual Abuse Online at a ministerial conference tomorrow, Dec. 5, 2012, in Brussels. The initiative aims to unite decision-makers all around the world to better identify and assist victims and to prosecute the perpetrators.
Participants at the launch include ministers and high-level officials from 27 EU member states, who are also joined by 22 countries outside the EU, including Albania, Australia, Cambodia, Canada Croatia, Georgia, Ghana, Japan, Moldova, Montenegro, New Zealand, Nigeria, Norway, the Philippines, Serbia, Republic of Korea, Switzerland, Thailand, Turkey, Ukraine, United States and Vietnam.
“This international initiative will strengthen our mutual resources to bring more perpetrators to justice, identify more victims of child sexual abuse, and ensure that they receive our help and support,” said Attorney General Holder. “Through this global alliance we can build on the success of previous cross-border police operations that have dismantled international pedophile networks and safeguard more of the world’s children.”
“Behind every child abuse image is an abused child, an exploited and helpless victim. When these images are circulated online, they can live on forever. Our responsibility is to protect children wherever they live and to bring criminals to justice wherever they operate. The only way to achieve this is to team up for more intensive and better coordinated action worldwide,” said Commissioner for Home Affairs Cecilia Malmström.
The countries of the alliance are committing themselves to a number of policy targets and goals aimed at combating the pervasive problem of child sexual abuse online - including the manufacturing and sharing of child pornography, online enticement of minors and online child prostitution. Thanks to increased international cooperation, the fight against child sexual abuse online will therefore be more effective.
End Child Prostitution, Child Pornography and Trafficking of Children for Sexual Purposes International studies indicate that more than one million images of children subjected to sexual abuse and exploitation are currently online. According to the U.N. Office on Drugs and Crime, 50,000 new child abuse images are added online each year.
No country can fight this horrible phenomenon alone, as the criminal networks behind it know no boundaries and exploit the lack of information exchange and the legal loopholes that exist within and between countries. This is why international cooperation is crucial to effectively investigate cases of child sexual abuse online and to better identify and prosecute offenders.
Global Alliance: Greater Commitments for Better Results
Tomorrow at the launching conference, the participating countries will make political commitments to pursue a number of goals, notably:
- Enhancing efforts to identify victims and ensuring that they receive the necessary assistance, support and protection;
- Enhancing efforts to investigate cases of child sexual abuse online and to identify and prosecute offenders;
- Increasing children's awareness of online risks, including the self-production of images and 'grooming' methods used by paedophiles
- Reducing the availability of child abuse material online and the re-victimization of children.
Countries would then choose the appropriate action to take at national level to achieve them, and would report regularly.
Background
The United States, through the Department of Justice, the Department of Homeland Security, Secret Service, Postal Inspection Service and other government agencies, in collaboration with non-governmental organizations (NGOs), industry and international partners, has made progress in combating all forms of child sexual exploitation.
The largest U.S. prosecution of an international criminal network organized to sexually exploit children, called Operation Delego, was a U.S.-led operation announced just last year by Attorney General Holder and Department of Homeland Security Secretary Janet Napolitano. Operation Delego resulted in 72 defendants being charged in the U.S. and more than 500 individuals being targeted for investigation by foreign authorities for their participation in Dreamboard – a private, members-only, online bulletin board that was created and operated to promote pedophilia and encourage the sexual abuse of very young children, in an environment designed to avoid law enforcement detection.
The identification and arrest of the defendants spanned years and involved extensive international cooperation between the United States; Eurojust, the European Union’s Judicial Cooperation Unit; Europol, the European law enforcement agency; and dozens of law enforcement agencies throughout the world. Dreamboard members across five continents were arrested in countries like Canada, Denmark, Ecuador, France, Germany, Hungary, Kenya, the Netherlands, the Philippines, Qatar, Serbia, Sweden and Switzerland. The location and arrest of Dreamboard members abroad have led to the capture and investigation of other global targets, as well as the identification of numerous children suffering ongoing abuse at their hands. Operation Delego is a good example of the success we can achieve when we work together with our international partners.
To better prosecute these crimes, the Justice Department has created a dedicated team of prosecutors in its Criminal Division called the Child Exploitation and Obscenity Section (CEOS) and appointed one specialist in each of the 93 U.S. Attorneys’ Offices around the country. CEOS regularly trains and advises the specialists in those offices and has created a network that joins them together, known as Project Safe Childhood. The Justice Department also created a dedicated team of computer forensic specialists and co-located them with our CEOS prosecutors, to ensure that they have the technical support they need to build these important investigations and operations.
In addition, the U.S. Congress has funded the creation of state-level task forces, known as the Internet Crimes Against Children (ICAC) Task Forces which help state and local agencies to develop successful, long-term responses to online child exploitation. These task forces are supported by the Department of Justice, not just with funding, but with training.
Despite vigorously fighting all aspects of child exploitation, the Justice Department recognizes that more work remains to be done and that work is vital to our collective success in combating this global problem.
For more information regarding the Justice Department’s efforts to combat child exploitation, please visit: www.justice.gov/criminal/ceos
The Global Alliance Against Child Sexual Abuse Online ministerial conference will take place in Brussels on Dec. 5, 2012. Experts and practitioners from participating governments, as well as representatives from international organizations and academics will examine the state of the problem and discuss the different policy targets of the Global Alliance. Attending ministers from the participating countries will endorse the alliance, in the form of a declaration.
Related Materials:
Child Exploitation and Obscenity Section
Attorney General Eric Holder Speaks at the Global Alliance Against Child Sexual Abuse Online Ministerial
Monday 3 December 2012
Ohio-based Glass Container Manufacturer Agrees to Install Pollution Controls and Pay $1.45 Million to Settle Clean Air Act ViolationsRead the Press Release
WASHINGTON – Ohio-based Owens-Brockway Glass Container Inc., the nation’s largest glass container manufacturer, has agreed to install pollution control equipment to reduce harmful emissions of nitrogen oxides (NOx), sulfur dioxide (SO2) and particulate matter (PM) by nearly 2,500 tons per year and pay a $1.45 million penalty to resolve alleged Clean Air Act violations at five of the company’s manufacturing plants, the Department of Justice and the U.S. Environmental Protection Agency (EPA) announced today.
“This agreement will significantly reduce the amount of air pollution, known to cause a variety of environmental and health problems, from the nation’s largest manufacturer of glass containers,” said Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division of the Department of Justice. “The settlement, the latest in a series of agreements with the glass manufacturing sector, addresses major sources of pollution at facilities located in four states and will mean cleaner air for the people living in those communities.”
“The pollution controls required by today’s settlement will significantly reduce emissions that can impact residents’ health and local environment in communities located near glass manufacturing plants,” said Cynthia Giles, Assistant Administrator for the EPA’s Office of Enforcement and Compliance Assurance. “These new pollution controls will improve air quality and protect communities from Georgia to Texas from emissions that can lead to respiratory illnesses, smog and acid rain.”
The pollution controls required as part of the settlement to reduce NOx, SO2, and PM will cost an estimated $37.5 million. Owens-Brockway will also spend an additional $200,000 to mitigate excess emissions at its plant in Atlanta by working with the Georgia Retrofit Program to retrofit diesel school buses and fleet vehicles with controls to reduce emissions, or it will assist with the purchase of new natural gas, propane or hybrid vehicles.
Reducing air pollution from the largest sources of emissions, including glass manufacturing plants, is one of the EPA’s National Enforcement Initiatives for 2011-2013. NOx, SO2, and PM, three key pollutants emitted from glass plants, have numerous adverse effects on human health and the environment. NOx and SO2 contribute to ground-level ozone, or smog, acid rain and the destruction of terrestrial and aquatic ecosystems. NOx and SO2 can also irritate the lungs and aggravate pre-existing heart or lung conditions. PM contains microscopic particles that can travel deep into the lungs and cause difficulty breathing, coughing, decreased lung function, and even death.
This is the fourth settlement in EPA’s National Glass Manufacturing Plant Initiative.
The facilities covered by the settlement are located in Atlanta, Ga.; Clarion, Pa.; Crenshaw, Pa.; Muskogee, Okla.; and Waco, Texas.
The Oklahoma Department of Environmental Quality is also a signatory to this consent decree.
The proposed consent decree will be lodged with the U.S. District Court for the Northern District of Ohio, and will be subject to a 30-day public comment period. Information on submitting comments is available at the Department of Justice website: www.justice.gov/enrd/Consent_Decrees.html .
More information on the settlement: www.epa.gov/enforcement/air/cases/owensbrockway.html
Learn more about EPA’s National Enforcement Initiatives: www.epa.gov/oecaftp/compliance/data/planning/initiatives/index.html
Justice Department Settles Discrimination Claim Against Oregon Homecare ProviderRead the Press Release
The Justice Department announced today that it reached an agreement with ComForcare In-Home Care & Senior Services, a home care provider for sick and elderly patients in Tigard, Ore. The agreement resolved claims that the provider violated the anti-discrimination provision of the Immigration and Nationality Act (INA), when it demanded unnecessary documentation from a newly naturalized citizen in response to an initial mismatch in E-Verify and then refused to hire her when she did not produce it.
The investigation stemmed from a charge filed by a naturalized U.S. citizen, who was not allowed to work for ComForcare after the company received an initial mismatch in her data in E-Verify, called a tentative non-confirmation. E-Verify is an Internet-based system run by U.S. Citizenship and Immigration Services (USCIS) that confirms employment eligibility by comparing information from an employee’s Form I-9, the form that all new employees must complete upon hire, to data in the Department of Homeland Security’s and Social Security Administration’s records.
If an employee receives a tentative non-confirmation, E-Verify requires the employer to provide the employee with a tentative non-confirmation notice offering the employee the choice to contest the mismatch. If the employee decides to contest the mismatch, the employee must be allowed to work while resolving a tentative non-confirmation, and the rules do not permit an employer to request additional documentation based on a tentative non-confirmation. ComForcare failed to provide the charging party with written notice of her tentative non-confirmation, as required by E-Verify, demanded that she produce an “alien card” and did not allow her to start working. When the charging party informed ComForcare that, as a naturalized citizen, she did not possess an alien card, ComForcare demanded her naturalization papers even though she had already produced proper work authorization documents during the Form I-9 process. The investigation also established that ComForcare requested that non-U.S. citizens and persons perceived to be non-U.S. citizens produce specific employment eligibility documents to establish their employment eligibility rather than allowing these individuals to show their choice of valid documentation.
Under the settlement agreement, ComForcare will pay approximately $525 in back pay to the charging party and $1,210 in civil penalties to the United States. ComForcare will also train its human resources staff about employers’ responsibilities to avoid discrimination in the employment eligibility verification process and be subject to reporting and compliance monitoring by the department for eighteen months.
“This case illustrates the importance of following E-Verify rules consistently regardless of citizenship status or perceived status, or risk running afoul of the anti-discrimination provision,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “Subjecting naturalized citizens to heightened documentary standards that result in the loss of employment constitutes discrimination, and the Division is fully committed to enforcing the law that prohibits it.”
The Office of Special Counsel (OSC) for Immigration-Related Unfair Employment Practices is responsible for enforcing the anti-discrimination provision of the INA, which protects work-authorized individuals from employment discrimination on the basis of citizenship status or national origin discrimination, including discrimination in hiring and the employment eligibility verification (Form I-9) process.
For more information about protections against employment discrimination under federal immigration law, call OSC’s worker hotline at 1-800-255-7688 (1-800-237-2515, TDD for hearing impaired), OSC’s employer hotline at 1-800-255-8155 (1-800-237-2515, TDD for hearing impaired), or 202-616-5594; e-mail [email protected] or visit OSC’s website at www.justice.gov/crt/about/osc.
Foreign National Pleads Guilty in Houston to Human Smuggling ChargesRead the Press Release
WASHINGTON – A foreign national pleaded guilty today for his role in a scheme to smuggle undocumented immigrants from India into the United States, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney Kenneth Magidson for the Southern District of Texas; and Special Agent in Charge Brian M. Moskowitz of U.S. Immigration and Customs Enforcement Homeland Security Investigations (ICE-HSI) in Houston
Kaushik Jayantibhai Thakkar, 33, an Indian national, pleaded guilty today at a hearing before U.S. District Judge Ewing Werlein Jr., in Houston, to one count of conspiracy to bring undocumented immigrants into the United States for profit and to one count of unlawfully bringing two undocumented immigrants into the United States for profit.
Thakkar was arrested in New York on April 8, 2012, on a complaint filed in the Southern District of Texas charging him with one count of conspiracy to unlawfully smuggle undocumented immigrants into the United States. On June 6, 2012, Thakkar was charged by superseding indictment, along with four other individuals, with one count of conspiracy to smuggle undocumented immigrants into the United States and six human smuggling counts related to three incidents in which Thakkar helped smuggle undocumented immigrants into the United States. Based on Thakkar’s guilty plea, the government will dismiss the remaining human smuggling counts against him at sentencing.
At the plea hearing and in related court documents, Thakkar admitted that between January 2011 and April 2012, he conspired with his codefendants to bring undocumented immigrants to the United States, and to encourage and induce undocumented immigrants to come to the United States unlawfully. According to court documents, Thakkar and his co-conspirators devised the scheme to profit financially.
In support of the conspiracy, Thakkar and other conspirators recruited individuals in India who were willing to pay to be smuggled into the United States. For their smuggling operations, Thakkar and his conspirators used a network of conspirators in South America, Central America, the Caribbean and the United States, including the state of Texas. Using this network, Thakkar and his conspirators transported groups of undocumented immigrants from locations within India through South America, Central America and the Caribbean and then into the United States by various means, including by air travel, automobiles, water craft and foot. Many of these smuggling events, including five of the incidents described in the indictment, involved illegal entry into the United States via the border between the United States and Mexico near McAllen and Laredo, Texas.
At sentencing, which is scheduled for Feb. 22, 2013, Thakkar faces a maximum sentence of 15 years in prison and a fine of up to $500,000.
Thakkar’s co-conspirator Maria Adela De Luna pleaded guilty on Nov. 9, 2012, to one count of conspiracy to harbor undocumented immigrants in the United States. Co-conspirator Fabiano Augusto Amorim has been charged with one count of conspiracy to smuggle undocumented immigrants into the United States and 10 human smuggling counts related to five incidents in which Amorim allegedly helped smuggle undocumented immigrants into the United States.
The investigation was conducted by agents with ICE-HSI in McAllen and Houston. This case is being prosecuted jointly by Trial Attorney Stephen Curran of the Criminal Division’s Human Rights and Special Prosecutions Section and Assistant U.S. Attorneys Leo J. Leo III and Casey MacDonald of the Southern District of Texas.
The investigation was conducted under the Extraterritorial Criminal Travel Strike Force (ECT) program, a joint partnership between the Justice Department’s Criminal Division and HSI. The ECT program focuses on human smuggling networks that may present particular national security or public safety risks, or present grave humanitarian concerns. ECT has dedicated investigative, intelligence and prosecutorial resources. ECT coordinates and receives assistance from other U.S. government agencies and foreign law enforcement authorities.
Brooklyn, N.Y., Clinic Employee Pleads Guilty in Connection with $71 Million Medicare Fraud SchemeRead the Press Release
WASHINGTON – A Brooklyn, N.Y., resident pleaded guilty today for his role in a $71 million Medicare fraud scheme, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney for the Eastern District of New York Loretta E. Lynch, Acting Assistant Director in Charge George Venizelos of the FBI’s New York Field Office and Special Agent in Charge Thomas O’Donnell of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG).
Yuri Khandrius, 50, pleaded guilty today before U.S. District Judge Nina Gershon in the Eastern District of New York to one count of conspiracy to commit health care fraud, one count of health care fraud and one count of conspiracy to pay kickbacks.
Khandrius was an employee of a clinic in Brooklyn that operated under three corporate names: Bay Medical Care PC, SVS Wellcare Medical PLLC and SZS Medical Care PLLC (Bay Medical clinic). According to court documents, owners, operators and employees of the Bay Medical clinic paid cash kickbacks to Medicare beneficiaries and used the beneficiaries’ names to bill Medicare for more than $71 million in services that were medically unnecessary or never provided. The defendants billed Medicare for a wide variety of fraudulent medical services and procedures, including physician office visits, physical therapy and diagnostic tests.
According to the criminal complaint, the co-conspirators allegedly paid kickbacks to corrupt Medicare beneficiaries in a room at the clinic known as the “kickback room,” in which the conspirators paid approximately 1,000 kickbacks totaling more than $500,000 during a period of approximately six weeks from April to June 2010.
Khandrius admitted in court that he conspired with co-workers at Bay Medical to commit health care fraud and to pay cash kickbacks to Medicare beneficiaries as part of the scheme.
At sentencing, Khandrius faces a maximum penalty of 25 years in prison. Sentencing is scheduled for March 11, 2013.
In total, 16 individuals have been charged in the Bay Medical scheme, including two doctors, nine clinic owners/operators/employees and five external money launderers. To date, 11 defendants have pleaded guilty for their roles in the conspiracy. Five individuals await trial before Judge Gershon on Jan. 22, 2013.
The case is being prosecuted by Assistant U.S. Attorney Shannon Jones of the Eastern District of New York and Trial Attorney Sarah M. Hall of the Criminal Division’s Fraud Section. The case was investigated by the FBI and HHS-OIG.
The case was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of New York. The Medicare Fraud Strike Force operations are part of the Health Care Fraud Prevention & Enforcement Action Team (HEAT), a joint initiative announced in May 2009 between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,480 defendants who have collectively billed the Medicare program for more than $4.8 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.
Air Duct Company, President and Manager Plead Guilty in Las Vegas to Environmental CrimesRead the Press Release
WASHINGTON – DPL Enterprises Inc. (dba Air Care Indoor Quality Specialists), Richard Papaleo, the company’s president and owner, and Michael Stanovich, a company manager pleaded guilty today in U.S. District Court in Las Vegas to making and selling a misbranded pesticide.
According to charges filed in U.S. District Court in Las Vegas, the defendants knowingly manufactured and sold fake Sporicidin, an EPA approved a pesticide, intended for use in disinfecting air ducts. The unapproved product was sold with a label that was false because it was not actually Sporicidin, because neither the diluted pesticide nor the label were EPA approved, because the label represented that the pesticide contained the concentration of the active ingredient found in the real product, and because the label contained a trademarked brand-name when it was really a 10:1 dilution. The fake Sporicidin label made by the defendants was copied from a real label and claimed that it could kill various organisms, including the HIV, Avian Flu, Salmonella, Staph and MRSA. However, Papaleo and his company sold diluted Sporicidin containing approximately 10 parts water for every 1 part of Sporicidin.
In court today, the defendants admitted to deliberately selling a misbranded pesticide knowing that the EPA had not approved the diluted product for sale or the label that failed to disclose that the product being was actually a 10:1 dilution.
Papaleo and his company also pleaded guilty to intentionally making false statements to federal agents from the EPA Criminal Investigations Division at the time of a federally authorized search warrant at Air Care. When interviewed, Papaleo told the agents that his company was not diluting Sporicidin and that the pesticide purchased from the maker was being re-packaged and re-labeled by Air Care solely for branding purposes, knowing that these statements were untrue and that diluted Sporicidin pesticide was being sold without approved labels in violation of law.
According to documents filed in court, Papaleo had been warned by the maker of Sporicidin that his company must obtain EPA approval for its label and that misbranding was “illegal.” Air Care admitted to selling approximately 6,312 gallons of the misbranded and diluted pesticide between 2005 and 2010.
The government’s investigation was initiated after EPA received complaints from the maker of Sporicidin. EPA made an undercover purchase of the fake Sporicidin sold by Air Care. EPA’s National Enforcement Investigations Center (NEIC) laboratory in Colorado found it was diluted with water even though the fake label made by Air Care claimed it contained the original strength of the active ingredient.
EPA regulates pesticides under the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA), which makes it a crime manufacture a pesticide in the United States without first being registered with the EPA and obtaining from the EPA a manufacturer establishment number. Approved labels must be affixed to any container of the pesticide that is distributed or sold. A pesticide is deemed “misbranded” if among other things the labeling is false or misleading. Misbranding pesticides is a misdemeanor offense.
The maximum penalty for violating FIFRA is one year in prison, and/or a fine of not more than $100,000, or up to twice the gross gain or loss from the crime. The corporation can face up to a $200,000 fine. Papaleo faces up to five years in prison and up to $200,000 in fines or up to twice the gross gain or loss from the crime for making false statements. Air Care could be fined up to $500,000 for making false statements or up to twice the gross gain or loss from the crime.
EPA Criminal Investigation Division conducted the investigation with assistance from the FBI. The case was prosecuted by Senior Trial Attorney Richard A. Udell of the Department of Justice Environmental Crimes Section and Assistant U.S. Attorney Kathryn Newman, of the U.S. Attorney’s Office for the District of Nevada.
Friday 30 November 2012
Statement by Attorney General Eric Holder on the Release of the National Advisory Committee on Violence Against Women RecommendationsRead the Press Release
Attorney General Eric Holder issued the following statement today on the release of the recommendations by the National Advisory Committee on Violence Against Women:
“For the past two years, the National Advisory Committee on Violence Against Women has displayed remarkable leadership and dedication to the cause of ending violence against women. I appreciate the thoughtful recommendations they have submitted in their final report.
“My intention when I re-chartered the advisory committee in March 2010 was to convene leaders in the field to solicit recommendations about how to improve the nation’s response to violence against women, with a specific focus on successful interventions with children and teens who witness or are victimized by domestic violence, dating violence and sexual assault.
“Prevention and successful interventions with children and teens will help break the cycle of violence that afflicts our nation. There is an unmistakable relationship between young people who witness or are victims of violence and the overall public safety of communities across the country.
“Together, I hope we can end this destructive violence and offer safety, security and hope to our children.”
Information on the National Advisory Committee can be found at: www.ovw.usdoj.gov/nac.html.
Related Materials:
National Advisory Committee on Violence Against Women
New Jersey Man Sentenced to 54 Months in Prison for Half-Billion Dollar Fraud Scheme with Thousands of Victims WorldwideRead the Press Release
A certified public accountant (CPA) and purported outside auditor for Provident Capital Indemnity Ltd. (PCI) was sentenced today in Richmond, Va., to 54 months in prison for his role in an approximately half-billion-dollar fraud scheme that affected more than 3,500 victims throughout the United States and abroad, announced U.S. Attorney for the Eastern District of Virginia Neil H. MacBride and Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division.
Jorge Luis Castillo, 57, a resident of New Jersey, was sentenced today by U.S. District Judge John A. Gibney in the Eastern District of Virginia. In addition to his prison term, Castillo was sentenced to three years of supervised release and ordered to pay $43,582,699 in forfeiture.
Castillo pleaded guilty on Nov. 21, 2011, to one count of conspiring to commit mail and wire fraud. Castillo was a PCI employee prior to becoming PCI’s “outside auditor.”
“As a licensed accountant, Mr. Castillo used his expertise to create fraudulent financial statements out of whole cloth,” said U.S. Attorney MacBride. “Many elderly investors relied on Mr. Castillo’s credibility as an outside auditor before entrusting their life savings in this fraud scheme. Accountants and auditors are the gatekeepers of our financial system and are entrusted with the critical role of protecting the public from fraud. Today’s sentence will hopefully send a strong message to those in the accounting profession that they will be held responsible when they break that trust by facilitating or participating in fraud.”
“Jorge Luis Castillo will spend 54 months in prison for trading on his qualifications as a CPA to facilitate a massive fraud scheme that harmed investors throughout the United States and abroad,” said Assistant Attorney General Breuer. “Mr. Castillo’s prison sentence demonstrates the Justice Department’s commitment to holding accountable any fraudster who preys on innocent, unsuspecting investors.”
According to court records, PCI was an insurance and reinsurance company registered in the Commonwealth of Dominica and doing business in Costa Rica. PCI sold financial guarantee bonds to companies selling life settlements, or securities backed by life settlements, to investors. PCI marketed these bonds to its clients as a way to alleviate the risk of insured beneficiaries living beyond their life expectancy. PCI’s clients, in turn, typically explained to their investors that the financial guarantee bonds ensured that the investors would receive their expected return on investment irrespective of whether the insured on the underlying life settlement lived beyond his or her life expectancy.
Castillo admitted that he conspired with Minor Vargas Calvo, 61, the president and majority owner of PCI, to prepare audited financial statements that falsely claimed that PCI had entered into reinsurance contracts with major reinsurance companies. These claims, which were supported by a letter from Castillo stating that he conducted an audit of PCI’s financial records, were used to assure PCI’s clients that the reinsurance companies were backstopping the majority of the risk that PCI had insured through its financial guarantee bonds.
Castillo further admitted that he never performed an audit of PCI’s financial statements and that, in fact, he personally created the statements he claimed to be independently auditing. He also admitted that he and others at PCI knew that the company never actually entered into reinsurance contracts with any major companies. Castillo also admitted that he and other conspirators provided the false financial statements and fraudulent independent auditors’ report to Dun & Bradstreet (D&B), which D&B relied on in compiling its commercial reports on PCI and issuing its 5A rating of PCI’s financial strength.
From 2004 through 2010, PCI sold at least $485 million of bonds to life settlement investment companies located in various countries, including the United States, the Netherlands, Germany, Canada and elsewhere. PCI’s clients, in turn, sold investment offerings backed by PCI’s bonds to thousands of investors around the world. Purchasers of PCI’s bonds were allegedly required to make up-front payments of six to 11 percent of the underlying settlement as “premium” payments to PCI before the company would issue the bonds. Court records state that Castillo received approximately $84,000 from his work as the purported outside auditor of PCI from 2004 through 2010.
Vargas, a citizen and resident of Costa Rica, was convicted on April 30, 2012, of one count of conspiracy to commit mail and wire fraud, three counts of mail fraud, three counts of wire fraud and three counts of money laundering. On Oct. 23, 2012, he was sentenced to 60 years in prison. PCI pleaded guilty on April 18, 2012, to conspiring to commit mail and wire fraud, and was sentenced on Sept. 6, 2012, to one year of probation.
This investigation is being conducted by the U.S. Postal Inspection Service, Internal Revenue Service – Criminal Investigation, and FBI, with assistance from the Virginia State Corporation Commission, the Texas State Securities Board and the New Jersey Bureau of Securities. This case is being prosecuted by Assistant U.S. Attorneys Michael S. Dry and Jessica Aber Brumberg of the Eastern District of Virginia and Assistant Chief Albert B. Stieglitz Jr. of the Justice Department Criminal Division’s Fraud Section.
The U.S. Securities and Exchange Commission (SEC) conducted a parallel investigation and in January 2011 filed a parallel civil enforcement action against PCI, Vargas and Castillo. The department thanks the SEC for its assistance in this matter.
The investigation has been coordinated by the Virginia Financial and Securities Fraud Task Force, an unprecedented partnership between criminal investigators and civil regulators to investigate and prosecute complex financial fraud cases in the nation and in Virginia specifically. The task force is an investigative arm of the President’s Financial Fraud Enforcement Task Force, an interagency national task force.
President Obama established the Financial Fraud Enforcement Task Force (FFETF) in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants.
New Jersey Couple Sentenced to Prison for Failing to Pay Employment TaxesRead the Press Release
James and Theresa DeMuro of Bridgewater, N.J., were each sentenced by U.S. District Judge Anne E. Thompson to 44 months in prison, followed by three years supervised release, the Justice Department and the Internal Revenue Service (IRS) announced today. Judge Thompson also ordered the DeMuros to pay restitution to the IRS in the amount of $1,337,952.12. A jury had convicted the DeMuros of one count of conspiracy to defraud the United States and 21 counts of willfully failing to pay over employment taxes. Today’s sentencing follows an April 23, 2012, order by the U.S. Court of Appeals for the Third Circuit, which affirmed the convictions but remanded the case for resentencing.
According to the indictment and evidence introduced during trial, the DeMuros co-owned and operated an engineering and surveying firm called TAD Associates LLC dba DeMuro Associates. From 2002 through 2008, they withheld employment taxes from their employees’ paychecks but failed to pay more than $546,000 in taxes to the IRS. In addition, they operated under a prior entity name DA Resources Inc., which they ceased operating in an effort to thwart the ability of the IRS to collect unpaid employment taxes related to that entity.
At trial, the government introduced evidence that, beginning with the first quarter of 2007 through the last quarter in 2008, the defendants paid employees’ wages and withheld employment taxes from paychecks but did not pay any of the employee withholdings to the U.S. Treasury. In addition, the DeMuros withheld funds from their employees’ pay checks for health insurance, child support and retirement savings accounts, and failed to pay these funds over to the appropriate entities.
Evidence was also introduced that the DeMuros converted withheld funds for their business and personal use, including more than $280,000 in purchases from QVC, Home Shopping Network and Jewelry Television.
Kathryn Keneally, Assistant Attorney General for the Justice Department’s Tax Division, commended the IRS Criminal Investigation special agents who investigated the case as well as Tax Division Trial Attorneys Tino M. Lisella and Jessica Moran, who prosecuted the case. Assistant Attorney General Keneally also thanked U.S. Attorney for the District of New Jersey Paul J. Fishman and his entire office for their assistance.
Justice Department Settles Immigration-Related Discrimination Claim Against North Carolina CompanyRead the Press Release
The Justice Department announced today that it reached an agreement with Gamewell Mechanical Inc., a subsidiary of Woodfin Heating, Inc. based in Salisbury, N.C., resolving claims that the company violated the anti-discrimination provision of the Immigration and Nationality Act (INA), when it terminated three employees based on the incorrect assumption that they were undocumented foreign nationals when they were in fact U.S. citizens. The company is in the mechanical construction business and fabricates and installs heating and cooling systems.
The investigation stemmed from a charge filed by one of the three U.S. citizens. The investigation revealed that Gamewell officials had terminated the three individuals when it received information that six of their co-workers were undocumented foreign nationals and incorrectly assumed that the three U.S. citizens were similarly not authorized to work in the United States.
Under the settlement agreement, Gamewell Mechanical will pay a total of $10,560 in back pay to the three discharged U.S. citizens, and $9,600 in civil penalties to the United States. Gamewell Mechanical will also train its human resources staff about employers’ responsibilities to avoid discrimination in the employment eligibility verification process and be subject to reporting and compliance monitoring by the department for 18 months.
“The anti-discrimination provision protects work-authorized individuals from being treated differently in employment based on discriminatory assumptions about their status,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The Civil Rights Division is fully committed to vigorously enforcing the law.”
The Office of Special Counsel (OSC) for Immigration-Related Unfair Employment Practices is responsible for enforcing the INA’s anti-discrimination provision of the INA, which, among other things, protects work-authorized individuals from employment discrimination on the basis of citizenship status or national origin discrimination in connection with hiring, firing, and the employment eligibility verification process.
For more information about protections against employment discrimination under the immigration laws, call the OSC’s worker hotline at 1-800-255-7688 or the OSC’s employer hotline at 1-800-255-8155. TDD for hearing impaired is 800-237-2515. You may also sign up for a no-cost webinar at www.justice.gov/crt/osc/webinars.php , email [email protected] or visit the website at www.justice.gov/crt/about/osc .
Former Fair Financial Company CEO Sentenced in Indianapolis to 50 Years in Prison for Role in $200 Million Fraud SchemeRead the Press Release
WASHINGTON – The former chief executive officer of Fair Financial Company, an Ohio financial services business, was sentenced today to serve 50 years in prison for his role in a scheme to defraud approximately 5,000 investors of more than $200 million, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney for the Southern District of Indiana Joseph H. Hogsett.
Timothy S. Durham, 50, of Fortville, Ind., was sentenced today by U.S. District Judge Jane Magnus-Stinson. In addition to his prison term, Durham was sentenced to serve two years supervised release.
James F. Cochran, the former chairman of the board of Fair, was sentenced today by Judge Magnus-Stinson to serve 25 years in prison and three years of supervised release.
Rick D. Snow, the former chief financial officer of Fair, was sentenced today by Judge Magnus-Stinson to ten years in prison and two years of supervised release.
Judge Snow also ordered Durham, Cochran and Snow to pay restitution in the amount of $208 million.
“The lengthy prison sentences handed down today are just punishment for a group of executives who built a business on smoke and mirrors,” said Assistant Attorney General Breuer. “By deliberately misleading their investors and state regulators, Mr. Durham and his co-conspirators were able defraud thousands of innocent investors. The Justice Department will continue to devote considerable time and resources to ensure that fraudsters like Mr. Durham, Mr. Cochran and Mr . Snow are brought to justice for their crimes.”
“This ordeal is truly a tragedy for all families involved,” said U.S. Attorney Hogsett. “All we can do is ask that today's decision send a warning to others in Indiana that if you sacrifice truth in the name of greed, if you steal from another's American dream to enhance your own, you will be caught and you will pay a significant price.”
“The FBI will continue to aggressively pursue financial crimes investigations,” said Special Agent in Charge Robert A. Jones of the FBI Indianapolis Division. “Today’s sentencing represents a significant step toward justice. We must remain mindful that the victims of this crime still suffer.”
On June 20, 2012, following an eight-day trial, a federal jury in the Southern District of Indiana convicted Durham and two co-conspirators for their roles in this scheme. Durham was convicted of one count of conspiracy to commit wire and securities fraud, 10 counts of wire fraud and one count of securities fraud. James F. Cochran, 57, of McCordsville, Ind., was convicted of one count of conspiracy to commit wire and securities fraud, one count of securities fraud and six counts of wire fraud. Rick D. Snow, 49, Fishers, Ind., was convicted of one count of conspiracy to commit wire and securities fraud, one count of securities fraud and three counts of wire fraud.
Durham and Cochran purchased Fair, whose headquarters was in Akron, Ohio, in 2002. According to evidence presented at trial, between approximately February 2005 through November 2009, Durham, Cochran and Snow executed a scheme to defraud Fair’s investors by making and causing others to make false and misleading statements about Fair’s financial condition and about the manner in which they were using Fair investor money. The evidence also established that Durham, Cochran and Snow executed the scheme to enrich themselves, to obtain millions of dollars of investors’ funds through false representations and promises and to conceal from the investing public Fair’s true financial condition and the manner in which Fair was using investor money.
When Durham and Cochran purchased Fair in 2002, Fair reported debts to investors from the sale of investment certificates of approximately $37 million and income producing assets in the form of finance receivables of approximately $48 million. By November 2009, after Durham and Cochran had owned the company for seven years, Fair’s debts to investors from the sale of investment certificates had grown to more than $200 million, while Fair’s income producing assets consisted only of the loans to Durham and Cochran, their associates and the businesses they owned or controlled.
Durham, Cochran and Snow terminated Fair’s independent accountants who, at various points during 2005 and 2006, told the defendants that many of Fair’s loans were impaired or did not have sufficient collateral. After firing the accountants, the defendants never released audited financial statements for 2005, and never obtained or released audited financial statements for 2006 through September 2009. With independent accountants no longer auditing Fair’s financial statements, the defendants were able to conceal from investors Fair’s true financial condition.
Evidence introduced at trial showed that the defendants engaged in a variety of other fraudulent activities to conceal from the State of Ohio Division of Securities and from investors Fair’s true financial health and cash flow problems. Evidence showed that the defendants made false and misleading statements to concerned investors who either had not received principal or interest payments on their certificates from Fair or who were worried about Fair’s financial health. The defendants also directed employees of Fair not to pay investors who were owed interest or principal payments on their certificates.
Even though Fair’s financial condition had deteriorated and Fair was experiencing severe cash flow problems, Durham and Cochran continued to funnel Fair investor money to themselves for their personal expenses, to their family, friends and acquaintances, and to the struggling businesses that they owned or controlled.
This case is being prosecuted by Trial Attorney Henry P. Van Dyck and Senior Deputy Chief for Litigation Kathleen McGovern of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Winfield D. Ong and Nicholas E. Surmacz of the Southern District of Indiana. The investigation was led by the FBI in Indianapolis.
This case is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov .
Former Director of Accounting and Outside Auditor of American Mortgage Specialists Inc. Plead Guilty to Roles in Fraud Against BNC National BankRead the Press Release
The former director of accounting and the former outside auditor of Arizona-based residential mortgage loan originator American Mortgage Specialists Inc. (AMS) pleaded guilty in Arizona to conspiracy to defraud BNC National Bank and obstruction of justice, respectively, Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney Timothy Q. Purdon of the District of North Dakota; Christy Romero, Special Inspector General for the Troubled Asset Relief Program (SIGTARP); and Steve A. Linick, Inspector General of the Federal Housing Finance Agency Office of Inspector General (FHFA-OIG) announced today.
Lauretta Horton, 45, and David Kaufman, 69, both residents of Arizona, pleaded guilty yesterday before U.S. District Judge Daniel L. Hovland of the District of North Dakota, who took the pleas in Arizona federal court. Horton and Kaufman were charged in separate criminal informations unsealed on Oct. 2, 2012, for their roles in the fraud scheme against BNC.
“ While the nation was reeling from a financial downturn, Lauetta Horton conspired with AMS executives to deceive BNC Bank about AMS’s true financial stability, and AMS auditor David Kaufman lied to federal investigators to impede their investigation,” said Assistant Attorney General Breuer. “Horton and Kaufman’s guilty pleas reflect our continued vigilance in investigating and punishing criminal conduct relating to the financial crisis.”
“Banks in North Dakota were not immune from illegal conduct related to the mortgage crisis that impacted banks all across the country,” said U.S. Attorney Purdon. “These guilty pleas are the result of close collaboration with our federal investigative partners and the Justice Department’s Criminal Division and should send the message that the Department of Justice is committed to prosecuting cases such as these wherever they might arise.”
“As the controller and director of accounting of mortgage originator AMS, Horton sent to TARP-recipient BNC National Bank false financial statements she had prepared so that BNC would continue to fund AMS,” said Special Inspector General Romero. “In a cover-up and an attempt to impede the federal grand jury investigation, AMS’s external auditor Kaufman lied to SIGTARP agents about his telling an AMS executive that he had changed the financial statements so that BNC would not discover the truth. Kaufman is the third person convicted of lying to SIGTARP agents, which shows that SIGTARP will aggressively pursue those who fail to tell the truth and impede our investigations.”
“This is a significant case because it holds accountable an individual who participated in a scheme to defraud a member bank of the Federal Home Loan Bank System, and another individual who lied to federal investigators,” said Inspector General Linick. “This case is a reminder that there are consequences for giving investigators false information and manipulating numbers.”
AMS was in the business of originating residential real estate mortgage loans to borrowers and then selling the loans to institutional investors. In 2006, AMS entered into a loan participation agreement with BNC whereby BNC provided funding for the loans issued by AMS. According to court documents, Horton, the director of accounting at AMS, conspired from February 2009 to April 2010 to defraud BNC by making false representations regarding the financial well-being of AMS in order for AMS to continue to obtain funding from BNC. Specifically, Horton admitted to inflating asset items and altering financial information in the AMS balance sheet provided to BNC to falsely reflect that AMS had substantial liquid assets when, in fact, it did not.
According to court documents, Kaufman, a certified public accountant and the outside auditor of AMS’ annual financial statements, lied to federal agents during the criminal investigation and obstructed the grand jury investigation. Specifically, Kaufman admitted denying to agents that he had a conversation with an AMS executive in which Kaufman explained to the AMS executive that Kaufman had combined two expenses on AMS’s financial statements in order to conceal the true nature and extent of AMS’s financial condition from BNC.
Although BNC’s holding company had received approximately $20 million under the TARP and had injected approximately $17 million of the TARP funds into BNC, BNC incurred losses exceeding the millions received from TARP. BNC then did not make its required TARP dividends to the Department of Treasury for nearly two years.
At sentencing, scheduled for May 6, 2013, Kaufman and Horton face a maximum penalty of 10 years and five years in prison, respectively.
The investigation was conducted by agents assigned to the Offices of the Inspector General of SIGTARP and of FHFA. The case is being prosecuted by Trial Attorney Robert A. Zink and Senior Litigation Counsel Jack B. Patrick of the Criminal Division’s Fraud Section and by Assistant U.S. Attorney Clare Hochhalter of the District of North Dakota, with the assistance of Trial Attorney Jeannette Gunderson of the Criminal Division’s Asset Forfeiture and Money Laundering Section.
This case is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov .
Thursday 29 November 2012
Third Member of Internet Piracy Group "IMAGiNE" Sentenced in Virginia to 40 Months in Prison for Criminal Copyright ConspiracyRead the Press Release
WASHINGTON – A third member of the Internet piracy group “IMAGiNE” was sentenced today to 40 months in prison, and a fifth member of IMAGiNE pleaded guilty today for his role in the conspiracy, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney Neil H. MacBride for the Eastern District of Virginia and Special Agent in Charge John P. Torres of U.S. Immigration and Customs Enforcement Homeland Security Investigations (ICE-HSI) in Washington, D.C.
Gregory A. Cherwonik, 53, of Canandaigua, N.Y., was sentenced today by Senior U.S. District Judge Arenda L. Wright Allen in the Eastern District of Virginia. In addition to his prison term, Cherwonik was sentenced to serve three years of supervised release and ordered to pay $15,000 in restitution. Cherwonik pleaded guilty to one count of conspiracy to commit criminal copyright infringement on July 11, 2012.
Javier E. Ferrer, 41, of New Port Richey, Fla., pleaded guilty today to one count of conspiracy to commit criminal copyright infringement before U.S. District Judge Henry C. Morgan Jr. in the Eastern District of Virginia. At sentencing, scheduled for March 14, 2013, Ferrer faces a maximum sentence of five years in prison.
Cherwonik was indicted along with three other defendants on April 18, 2012, for their roles in the IMAGiNE Group, an organized online piracy ring that sought to become the premier group to first release Internet copies of movies only showing in theaters. Ferrer was charged in an information on Sept. 13, 2012, for his role in the IMAGiNE Group.
According to court documents, Cherwonik, Ferrer and their co-conspirators sought to illegally obtain and disseminate digital copies of copyrighted motion pictures showing in theaters. Cherwonik admitted to ordering a receiver to be used to capture the audio sound tracks of copyrighted movies (referred to as “capping”). Cherwonik wrote the computer code for the IMAGiNE Group’s website. He also worked with another IMAGiNE Group leader to establish a PayPal account for donations made to support the site and to create the new website, which was hosted on a computer server in France. Ferrer admitted he secretly used a video camera to film copyrighted motion pictures in movie theatres. He then used software to synchronize an audio file with his illegally obtained video of the movie to create a completed movie file suitable for sharing over the Internet. According to testimony by a representative of the Motion Picture Association of America, the IMAGiNE Group constituted the most prolific motion picture piracy release group operating on the Internet from September 2009 through September 2011.
Co-defendants Sean M. Lovelady, Willie O. Lambert and Jeramiah B. Perkins each pleaded guilty to one count of conspiracy to commit criminal copyright infringement on May 9, June 22 and Aug. 29, 2012, respectively. Lambert and Lovelady were sentenced on Nov. 2, 2012, to 30 months and 23 months in prison, respectively. Perkins is scheduled to be sentenced on Jan. 3, 2013.
The investigation of the case and the arrests were conducted by agents with HSI. Assistant U.S. Attorney Robert J. Krask of the Eastern District of Virginia and Senior Counsel John H. Zacharia of the Criminal Division’s Computer Crime and Intellectual Property Section (CCIPS) are prosecuting the case. Significant assistance was provided by the CCIPS Cyber Crime Lab and the Criminal Division’s Office of International Affairs.
This case is part of efforts being undertaken by the Department of Justice Task Force on Intellectual Property (IP Task Force) to stop the theft of intellectual property. Attorney General Eric Holder created the IP Task Force to combat the growing number of domestic and international intellectual property crimes, protect the health and safety of American consumers, and safeguard the nation’s economic security against those who seek to profit illegally from American creativity, innovation and hard work. The IP Task Force seeks to strengthen intellectual property rights protection through heightened criminal and civil enforcement, greater coordination among federal, state and local law enforcement partners, and increased focus on international enforcement efforts, including reinforcing relationships with key foreign partners and U.S. industry leaders. To learn more about the IP Task Force, go to www.justice.gov/dag/iptaskforce .
This investigation was supported by the HSI-led National Intellectual Property Rights Coordination Center (IPR Center) in Washington. The IPR Center is one of the U.S. government’s key weapons in the fight against criminal counterfeiting and piracy. As a task force, the IPR Center uses the expertise of its 21 member agencies to share information, develop initiatives, coordinate enforcement actions and conduct investigations related to IP theft. Through this strategic interagency partnership, the IPR Center protects the public’s health and safety, the U.S. economy and our war fighters.
Justice Department Settles Lawsuit Against Wisconsin Landlord and Former Manager for Discriminating on the Basis of RaceRead the Press Release
The Justice Department announced today that the manager and owner of the Geneva Terrace Apartments Inc. in La Crosse, Wis., have agreed to pay $57,500 to settle a lawsuit alleging they violated the Fair Housing Act by discriminating against African-Americans who were seeking to rent apartments at the complex.
The complaint, filed in the U.S. District Court for the Western District of Wisconsin on Oct. 26, 2011, alleged that Nicolai Quinn, the manager of the apartment complex, told prospective African-American renters that apartments were not available when they were, while telling prospective white renters that there were apartments available.
“Nobody should be denied housing in this country because of their race.” said Thomas E. Perez, Assistant Attorney General for the Civil Rights. “The Fair Housing Act prohibits discrimination in housing on the basis of race, and we will continue to vigorously enforce the law to ensure access to housing regardless of the race of an applicant.”
“The Department of Justice and this U.S. Attorney’s Office will do everything possible to ensure that everyone has the freedom to choose where they live, regardless of race,” said John W. Vaudreuil, the U.S. Attorney for the Western District of Wisconsin.
“It’s against the law to misrepresent a home’s availability because of race,” said John Trasviña, HUD’s Assistant Secretary for Fair Housing and Equal Opportunity. “HUD and the Justice Department will continue to take action against anyone who violates the nation’s fair housing laws.”
As alleged in the complaint, in 2009 and 2010, Quinn told an African-American couple who were interested in renting an apartment in Geneva Terrace that there were no apartments available, even though the complex had posted a sign advertising vacancies. The couple found it suspicious and asked a white friend to contact the complex. Quinn told the white friend that he had available apartments. The couple then reported their experience to the Metropolitan Milwaukee Fair Housing Council (MMFHC), a nonprofit fair housing organization. MMFHC conducted fair housing tests, which confirmed that Quinn was telling African Americans that apartments were not available while showing available apartments to white persons.
The couple also filed a complaint with HUD, which conducted an investigation and, after issuing a charge of discrimination, referred the matter to the Department of Justice.
Under the terms of the settlement, which is subject to approval by the U.S. District Court, the defendants will pay the complainants $47,500 in damages. Defendants will also pay a civil penalty of $10,000 to the United States. Defendant Geneva Terrace Apartments LLC will also develop and maintain non-discrimination housing policies and attend fair housing training.
The federal Fair Housing Act prohibits discrimination in housing on the basis of race, color, religion, sex, familial status, national origin and disability.
Fighting housing discrimination is a top priority of the Justice Department. The federal Fair Housing Act prohibits discrimination in housing on the basis of race, color, religion, sex familial status, national origin and disability. More information about the Civil Rights Division and the laws it enforces is available at www.justice.gov/crt . Individuals who believe that they have been victims of housing discrimination or have information related to this lawsuit can call the Housing Discrimination Tip Line at 1-800-896-7743, e-mail the Justice Department at [email protected] or contact the Department of Housing and Urban Development at 1-800-669-9777.
Former Puerto Rico Police Officers Charged <br /> with Extorting a Commonwealth Defendant for $50,000Read the Press Release
WASHINGTON – Two former police officers with the Police of Puerto Rico were charged with allegedly attempting to extort a commonwealth defendant and soliciting bribe payments of $50,000, Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division announced today.
Abimael Arroyo-Cruz, 30, of Rio Grande, Puerto Rico, and Josue Becerril-Ramos, 36, of Carolina, Puerto Rico, were both charged in an indictment returned yesterday in the District of Puerto Rico with one count of conspiracy, one count of federal programs bribery, one count of conspiracy to commit extortion and one count of attempted extortion.
According to the indictment, Arroyo and Becerril arrested eight individuals for possession of unregistered firearms and marijuana on Aug. 2, 2012. The officers then allegedly solicited from one defendant a bribe payment of $50,000 to have his case dismissed. Beginning on Sept. 11, 2012, both officers allegedly spoke with the commonwealth defendant multiple times over the telephone, discussing payment details and strategies for dismissing the commonwealth defendant’s case.
The indictment alleges that Arroyo and Becerril collected approximately $35,000, of the $50,000 demanded, from the commonwealth defendant in two different payment installments. Unbeknownst to the officers, however, the individuals who dropped off the payments were cooperating with federal law enforcement.
In exchange for the bribes, the indictment alleges, Arroyo and Becerril devised a plan whereby the officers would misidentify a co-defendant in court, leading to dismissal of the commonwealth defendant’s case. According to the indictment, when asked under oath at the preliminary hearing to identify the commonwealth defendant, Arroyo instead identified a co-defendant. The indictment alleges that Arroyo confirmed to the commonwealth defendant following the hearing that he deliberately misidentified the co-defendant as part of the plan to have the commonwealth defendant’s case dismissed.
The case is being prosecuted by Assistant U.S. Attorney Timothy Henwood of the District of Puerto Rico and Trial Attorneys Menaka Kalaskar and Marquest J. Meeks of the Criminal Division’s Public Integrity Section. The case was investigated by the FBI’s San Juan Field Office.
An indictment is merely an allegation, and a defendant is presumed innocent until proven guilty beyond a reasonable doubt.
Baton Rouge, Louisiana, Used Car Dealer Sentenced to Prisonfor Odometer Tampering Fraud SchemeRead the Press Release
Beau Michael Guidry of Baton Rouge, La., was sentenced today in connection with an odometer tampering scheme that defrauded victims in and around Louisiana, the Justice Department announced. U.S. District Judge for the Middle District of Louisiana James J. Brady sentenced Guidry to a term of 20 months in prison and a term of one year of supervised release during which he cannot be involved in the sale of motor vehicles. In addition, the court ordered Guidry to pay $72,805.51 in restitution to the victims of his crimes.
Guidry purchased high-mileage motor vehicles via eBay and wholesale automobile auctions in Louisiana, Mississippi and Texas. The vehicles’ odometers were then rolled back as much as 147,000 miles and resold via Guidry’s used vehicle company, Affordable Imports in Denham Springs, La., or through eBay to unsuspecting purchasers. Guidry exclusively rolled back vehicles that were more than 10 years old when he sold them.
Because of the age of the cars, Guidry was not required to sign a disclosure certifying the mileage on those 10-year old vehicles as accurate. However, each time he altered an odometer with intent to change the mileage on the odometer, he violated federal law.
“Odometer tampering preys mostly on those in society who can least afford to be defrauded,” said Stuart F. Delery, Principal Deputy Assistant Attorney General for the Civil Division. “In these tough economic times, we will take strong action against anyone who defrauds consumers and jeopardizes the safety of our roads and highways.”
Special Agent Wendell Espeland of The National Highway Traffic Safety Administration Office of Odometer Fraud Investigation (NHTSA) investigated this case. The case was prosecuted by Justice Department trial attorney David Sullivan of the Civil Division’s Consumer Protection Branch.
Wednesday 28 November 2012
Two Brooklyn Clinic Employees Plead Guilty in Connection with $71 Million Medicare Fraud SchemeRead the Press Release
WASHINGTON – Two Brooklyn, N.Y., residents pleaded guilty today for their roles in a $71 million Medicare fraud scheme, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney for the Eastern District of New York Loretta E. Lynch; Acting Assistant Director in Charge Mary E. Galligan of the FBI’s New York Field Office; and Special Agent in Charge Thomas O’Donnell of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG).
Katherina Kostiochenko, 34, pleaded guilty today before U.S. District Judge Nina Gershon in the Eastern District of New York to one count of conspiracy to commit health care fraud, one count of health care fraud and one count of conspiracy to pay kickbacks. Sergey V. Shelikhov, 51, pleaded guilty today before Judge Gershon to one count of conspiracy to commit health care fraud.
Co-conspirator Leonid Zheleznyakov, 28, pleaded guilty yesterday before Judge Gershon to one count of conspiracy to commit health care fraud for his role in the scheme.
Kostiochenko, Shelikhov and Zheleznyakov were employees of a clinic in Brooklyn that operated under three corporate names: Bay Medical Care PC, SVS Wellcare Medical PLLC and SZS Medical Care PLLC (Bay Medical clinic). According to court documents, owners, operators and employees of the Bay Medical clinic paid cash kickbacks to Medicare beneficiaries and used the beneficiaries’ names to bill Medicare for more than $71 million in services that were medically unnecessary or never provided. The defendants billed Medicare for a wide variety of fraudulent medical services and procedures, including physician office visits, physical therapy and diagnostic tests.
According to the criminal complaint, the co-conspirators allegedly paid kickbacks to corrupt Medicare beneficiaries in a room at the clinic known as the “kickback room,” in which the conspirators paid approximately 1,000 kickbacks totaling more than $500,000 during a period of approximately six weeks from April to June 2010.
Kostiochenko, Shelikhov and Zheleznyakov pleaded guilty to conspiring to commit health care fraud for their roles in the Bay Medical scheme. Kostiochenko also pleaded guilty to paying cash kickbacks to Medicare beneficiaries as part of the scheme.
At sentencing, Kostiochenko faces a maximum penalty of 25 years in prison, and Shelikhov and Zheleznyakov both face a maximum penalty of 10 years in prison. Kostiochenko and Zheleznyakov are scheduled for sentencing on March 12, 2013, and Shelikhov is scheduled for sentencing March 13, 2013.
In total, 16 individuals have been charged in the Bay Medical scheme, including two doctors, nine clinic owners/operators/employees and five external money launderers. To date, 10 defendants have pleaded guilty for their roles in the conspiracy. Six individuals await trial before Judge Gershon on Jan. 22, 2013.
The case is being prosecuted by Trial Attorney Sarah M. Hall of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Shannon Jones of the Eastern District of New York. The case was investigated by the FBI and HHS.
The case was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of New York. The Medicare Fraud Strike Force operations are part of the Health Care Fraud Prevention & Enforcement Action Team (HEAT), a joint initiative announced in May 2009 between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,480 defendants who have collectively billed the Medicare program for more than $4.8 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov .
Member of Latin Kings Street Gang and Two Associates Sentenced in Indiana for Racketeering Conspiracy and Related CrimesRead the Press Release
WASHINGTON – A member of the Latin Kings street gang and two associates were sentenced to prison this week in Hammond, Ind.,federal court for racketeering conspiracy and other crimes in support of the gang, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney David Capp of the Northern District of Indiana.
David Lira, aka “Flaco,” 39, of Chicago, was sentenced today to 180 months in prison after pleading guilty on July 13, 2012, to racketeering conspiracy. Gang associates Bianca Fernandez, 23, and Serina Arambula, 23, both of Chicago, were sentenced on Nov. 26, 2012, to 36 months and 21 months in prison, respectively. U.S. District Judge Rudy Lozano imposed the sentences.
Fernandez pleaded guilty on Aug. 8, 2012, to conspiring to murder in aid of racketeering. Arambula pleaded guilty on August 7, 2012, to withholding information on a murder.
According to the third superseding indictment filed in this case, the Latin Kings is a nationwide gang that originated in Chicago and has branched out throughout the United States. The Latin Kings is a well organized street gang that has specific leadership and is composed of regions that include multiple chapters. The third superseding indictment charges that the Latin Kings were responsible for more than 20 murders.
Also according to the third superseding indictment, the Latin Kings enforces its rules and promotes discipline among its members, prospects and associates through murder, attempted murder, conspiracy to murder, assault and threats against those who violate the rules or pose a threat to the Latin Kings. Members are required to follow the orders of higher-ranking members, including taking on assignments often referred to as “missions.”
During his guilty plea proceeding, Lira admitted to being a Latin Kings member at an early age. He also acknowledged he was aware that the Latin Kings, specifically some of his co-defendants, distributed more than 150 kilograms of cocaine and 1,000 kilograms of marijuana over the course of the racketeering conspiracy.
Lira also acknowledged that on Feb. 24, 2007, Jose Zambrano, a regional enforcer for the gang, and other Latin Kings members dropped two firearms off at Lira’s residence in Lansing, Ill. The next evening, Zambrano and the others returned to retrieve the weapons from Lira before riding to the Soprano’s Bar in Griffith, Ind., where they gunned down and killed two rival gang members.
Fernandez admitted in court that on Nov. 26, 2006, at the direction of a Latin Kings member, she accompanied two members of the rival Latin Dragons gang to Jackson Park, Ill., near La Rabida Children’s Hospital on the south side of Chicago. Fernandez also admitted she made arrangements for Latin Kings gang members to meet them at the location, where those gang members shot the Latin Dragons gang members, killing one. Fernandez admitted that when interviewed by Chicago police, she concealed the true nature of the murder.
During her guilty plea proceeding, Arambula admitted to accompanying Fernandez and the Latin Dragon members to Jackson Park, and admitted to providing false information to Chicago police regarding the identity of the shooters.
Twenty-three Latin Kings members and associates have been indicted in this case. Twenty have pleaded guilty; one was found guilty following a jury trial, one awaits trial, and one remains a fugitive.
This case was investigated by the FBI; the Bureau of Alcohol, Tobacco, Firearms and Explosives; the Drug Enforcement Administration; U.S. Immigration and Customs Enforcement-Homeland Security Investigations (ICE-HSI); the National Gang Intelligence Center; the Chicago Police Department; the Houston Police Department; the Griffith Police Department; the Highland, Ind., Police Department; the Hammond, Ind., Police Department; and the East Chicago Police Department.
The case is being prosecuted by Joseph A. Cooley of the Criminal Division’s Organized Crime and Gang Section and David J. Nozick of the U.S. Attorney’s Office for the Northern District of Indiana. Andrew Porter of the U.S. Attorney’s Office for the Northern District of Illinois provided significant assistance.
The third superseding indictment is not evidence of guilt. The defendants who have not been convicted are innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Justice Department Settles Lawsuit Against Sussex County, Delaware, for Blocking Affordable HousingRead the Press Release
The Justice Department announced today that it has settled a lawsuit against Sussex County, Del., and the Planning and Zoning Commission of Sussex County for race and national origin discrimination in violation of the Fair Housing Act.
The lawsuit, filed today in the U.S. District Court for the District of Delaware, alleges that the county’s planning and zoning commission denied land use approval for a 50-lot affordable housing subdivision proposed by Diamond State Community Land Trust, a Delaware affordable housing developer, in southwestern Sussex County near the town of Laurel, Del. The suit alleges that the Sussex County Council later affirmed the denial of the proposed development. The suit alleges that opposition to the proposal was based partly on the assumption that the subdivision’s residents would be Latino and African-American and on stereotypes based on race, color and national origin. The lawsuit arose from a complaint to the U.S. Department of Housing and Urban Development (HUD) that was referred to the Department of Justice.
The settlement, also filed today as a proposed consent decree that must be approved by the court, requires that the defendants reconsider the affordable housing proposal using nondiscriminatory criteria and take no actions to obstruct or delay the development of the subdivision. It also requires the county to pay $750,000 to Diamond State Community Land Trust in compensation for its damages.
In addition, the settlement requires that the county take affirmative steps to provide for future affordable housing, communicate its commitment to fair housing, and establish mechanisms to ensure affordable and fair housing in Sussex County. Among other things, the county must formulate an affordable and fair housing marketing plan to encourage the development of housing opportunities that are available and accessible to all residents of Sussex county regardless of race, color or national origin, appoint a fair housing compliance officer, and ensure that county officials and staff undergo fair housing training.
“The Fair Housing Act guarantees that all Americans have the opportunity to live where they choose regardless of the color of their skin,” said Thomas E. Perez, Assistant Attorney General for Civil Rights Division. “It is especially important that counties employ their land use powers in a manner that does not obstruct housing choice, and we will take action when jurisdictions block housing because of the race or ethnicity of those who would live there.”
In addition to the Justice Department’s action, today HUD and Sussex County entered into a voluntary compliance agreement resolving a related enforcement action by HUD. As a result of its investigation, HUD determined that the county violated federal civil rights laws by its actions relating to Diamond State Community Land Trust and by failing to administer its programs in a manner that affirmatively furthers fair housing. Under the Voluntary Compliance Agreement, Sussex County has agreed to perform a number of corrective actions, including development of a priority fair housing plan to address impediments to fair housing choice, strategies to integrate affordable housing into all communities in the county, and an evaluation of certain predominantly minority communities for future infrastructure and community development efforts.
“Today’s groundbreaking settlement recognizes the importance of the obligation to affirmatively further fair housing in the activities of local governments. Actions that establish or continue barriers to full fair housing choices deny Americans equal access to housing,” said John Trasviña, HUD's Assistant Secretary for Fair Housing and Equal Opportunity. "HUD and DOJ will continue to work together to make sure communities are open to everyone and that past patterns of discrimination are addressed.”
The federal Fair Housing Act prohibits discrimination in housing based on race, color, religion, national origin, sex, disability and familial status. Fair housing enforcement is a priority of the Civil Rights Division. More information about the Civil Rights Division and the laws it enforces is available at www.justice.gov/crt. Individuals who believe that they may have been victims of housing discrimination can call the Housing Discrimination Tip Line at 1-800-896-7743, email the Justice Department at [email protected] or ontact the U.S. Department of Housing and Urban Development at 1-800-669-9777.
Amerigroup Corp.’s Divestiture of Its Virginia Operations <br /> Addresses Department of Justice’s Concerns with Wellpoint Inc.’s <br /> Proposed Acquisition of AmerigroupRead the Press Release
WASHINGTON – The Department of Justice announced today that Amerigroup Corp.’s sale of its subsidiary, Amerigroup Virginia Inc., addresses the department’s concerns with WellPoint Inc.’s proposed acquisition of Amerigroup. The department said that the merger, as originally proposed, would have substantially lessened competition in the provision of Medicaid managed care plans in Northern Virginia. WellPoint and Amerigroup are the only two providers of Medicaid managed care plans in Northern Virginia.Amerigroup has agreed to sell Amerigroup Virginia to the Inova Health System Foundation. Today, the department closed its investigation of the sale of Amerigroup Virginia to the Inova Health System Foundation, allowing the parties to proceed to consummate their transaction. The department worked closely with the Virginia Attorney General’s office in reviewing that transaction.
“The divestiture of Amerigroup Virginia will ensure continued competition in the markets for Medicaid managed care plans in Northern Virginia,” said Acting Assistant Attorney General Renata B. Hesse in charge of the Department of Justice’s Antitrust Division. “Preserving competition in health care markets is vital to ensuring that consumers receive better and more innovative health care services.”
Without the divestiture, WellPoint’s proposed acquisition of Amerigroup would result in a merger to monopoly in Medicaid managed care in Arlington, Culpeper, Fairfax, Fauquier, Frederick, Loudon, Prince William, Rappahannock and Warren counties, plus the cities of Alexandria, Falls Church, Fairfax and Manassas Park. No new Medicaid managed care plan has entered these areas since 2005. The divestiture ensures that Medicaid beneficiaries in Northern Virginia will continue to have a choice of at least two Medicaid managed care entities.
The Virginia Medicaid managed care program provides enrollees with access to preventive and coordinated care through managed care organizations, including WellPoint and Amerigroup.
WellPoint and Amerigroup compete in Northern Virginia on the breadth and quality of their provider networks of physicians, hospitals and pharmacies; plan design; service; care management; and programs and services to improve the health status of Medicaid enrollees, such as immunization incentives, disease prevention and health education. Congress has recognized the importance of choice to Medicaid beneficiaries by generally requiring that states give beneficiaries a choice of at least two Medicaid managed care entities if the state requires beneficiaries to enroll in managed care plans.WellPoint is headquartered in Indianapolis, and is a licensee of the Blue Cross and Blue Shield Association. WellPoint and its subsidiaries serve more than 65 million members and had 2011 revenues of $60.7 billion.
Amerigroup Corporation is headquartered in Virginia Beach, Va., and coordinates services for individuals in publicly funded healthcare programs. Amerigroup serves more than 2 million members and had 2011 revenue of more than $6 billion.
Tuesday 27 November 2012
Project Longevity Launched to Reduce Gang and Gun Violence in Connecticut’s CitiesRead the Press Release
Attorney General Eric Holder, U.S. Attorney David Fein and Connecticut Governor Dannel Malloy joined members of law enforcement, public officials, social service providers, community leaders and researchers in New Haven today to launch “Project Longevity,” a comprehensive initiative to reduce gun violence in Connecticut’s major cities. Project Longevity uses a strategy that has shown violence can be reduced dramatically when community members and law enforcement join together to directly engage with these groups and clearly communicate a community message against violence, a law enforcement message about the consequences of further violence and an offer of help for those who want it. To accomplish this, law enforcement, social service providers and community members are recruited, assembled and trained to engage in a sustained relationship with violent groups.
“Project Longevity will send a powerful message to those who would commit violent crimes targeting their fellow citizens that such acts will not be tolerated and that help is available for all those who wish to break the cycle of violence and gang activity,” said Attorney General Holder. “Today’s announcement underscores our commitment to working together – across levels of government and jurisdictional boundaries – to protect the American people from the crime that threatens too many neighborhoods and claims far too many innocent lives.”
Project Longevity is based on a model that has been successful in reducing gun violence in multiple neighborhoods across the country and represents the first time the strategy is being implemented statewide.
“On the state level, I have directed my administration to focus our criminal justice resources on urban violence,” Governor Malloy said. “We agree that no strategy will be effective without the support of the community. This means parents, clergy, neighborhood leaders, grandmothers, grandfathers, aunts, uncles – everyone working toward one goal. We are working to regain the trust of the African American and Latino communities. We need their help. The lives of these young people are too valuable not to act.”
Funded by federal, state and local sources, Project Longevity is being launched initially in three Connecticut cities – New Haven, Hartford and Bridgeport.
“After more than a year of hard work and preparation by so many public and private partners, I am pleased to announce Project Longevity, our statewide anti-violence initiative,” said U.S. Attorney Fein. “Many dedicated people and organizations have come together to support this proven strategy to reduce gang and gun violence through focused deterrence.”
A critical component of the Project Longevity strategy is the “call-in,” a face-to-face meeting where partners engage group members and deliver certain key messages. First, that group members are part of a community, that gun violence is unacceptable and that the community needs it to end. Second, that help is available to all who will accept it in order to transition out of the gang lifestyle, and that social service providers are standing by to assist with educational, employment, housing, medical, mental health and other needs. Third, that any future violence will be met with clear and certain consequences. The next time a homicide is traced to any member of a violent group, all members of that group will receive increased and comprehensive law enforcement attention to any and all crimes any of its members are committing.
Yesterday, the first call-ins of two groups were convened in New Haven. At the call-ins, approximately 25 individuals heard the Project Longevity message from senior leadership of the New Haven Police Department, federal and state prosecutors, outreach workers and other members of the New Haven community. One Project Longevity participant, Adult Education Director for the New Haven Board of Education Alicia Caraballo, spoke about losing her 24-year-old son when he was shot and killed in New Haven in April 2008.
Project Longevity is based on the Group Violence Reduction Strategy developed by the Center for Crime Prevention and Control at John Jay College of Criminal Justice in New York. The research behind the strategy, which was first implemented in Boston as “Operation Ceasefire” in the mid-1990s, has found that violence in troubled neighborhoods is caused predominantly by a small number of people who are members of street gangs, drug crews and other identified groups. These groups, whose members typically constitute less than 0.5 percent of a city’s population, often have little organization, hierarchy or common purpose, and commit violent acts primarily for personal reasons, not to achieve any economic gain or other advantage. The Group Violence Reduction Strategy, which also has been deployed in areas of Chicago, Cincinnati, Providence, R.I., and elsewhere, has resulted in a 40 to 60 percent reduction in group-related homicides in certain neighborhoods. After Project Longevity is established in Hartford and Bridgeport, the program may be deployed in other Connecticut cities if research and data analysis of a city’s homicide rate determine that the model offers an appropriate solution to gun violence .
The Rev. William Mathis has been appointed as Project Longevity’s New Haven Program Manager. The Rev. Mathis is also the Pastor of Springs of Life-Giving Water Church in New Haven, an attorney, a former prosecutor and an adjunct professor at Quinnipiac University and the University of New Haven. As program manager, the Rev. Mathis is responsible for developing effective and sustainable working relationships between law enforcement, service providers and community members to insure Project Longevity’s success.
The organizational structure of Project Longevity in New Haven includes a Governing Board, Strategy and Implementation Team, Research Team, Law Enforcement Team, Community Service Provider Team and Community Engagement Team, all of which meet regularly. Project Longevity’s Governing Board includes: U.S. Attorney Fein, Governor Malloy, State Senator Toni Harp, State Representative Toni Walker, New Haven Mayor John DeStefano, New Haven Alderperson Jorge Perez, New Haven State’s Attorney Michael Dearington, Court Support Services Executive Director William Carbone, Connecticut Department of Correction Commissioner Leo Arnone, Director of the Center for Crime Prevention and Control at John Jay College of Criminal Justice David Kennedy, and Yale University’s Vice President for New Haven and State Affairs and Campus Development Bruce Alexander.
The Strategy and Implementation Team is co-chaired by New Haven Police Chief Dean Esserman and New Haven businessman Howard Hill, and includes members of law enforcement, service providers, researchers and the community. Chief Esserman has previously partnered with the Center for Crime Prevention and Control to implement a similar strategy when he served as police chief in Providence. Several community and business leaders in New Haven, as well as members of the New Haven Clergy Association, are also actively involved in Project Longevity. In order to assist identified individual transition from a destructive gang lifestyle, Project Longevity has engaged nine service providers in the New Haven area, including Children’s Community Program of Connecticut, Community Service Administration for the City of New Haven, Consultation Center (Yale), Gateway Community College, Elm City Communities, New Haven Family Alliance, Project Model Offender Reintegration Experience (M.O.R.E.), Workforce Alliance/CT Works and United Way of Greater New Haven. The University of New Haven, Yale University and the University of Cincinnati are working with law enforcement to collect and analyze crime data and provide research support to identify the groups and individuals that will be contacted through Project Longevity. Many of these individuals are already known to law enforcement and/or are under the supervision of probation or parole officers.
Other participating Justice Department agencies in Project Longevity include: the FBI; Drug Enforcement Administration; the Bureau of Alcohol Tobacco, Firearms and Explosives; and the U.S. Marshals Service.
Related Materials:
Attorney General Eric Holder Speaks at the Project Longevity Announcement
Justice Department Launches Investigation of the <br /> <br /> Albuquerque, N.M., Police Department’s Use of ForceRead the Press Release
The Justice Department announced today that it has opened a civil investigation into use of force by the city of Albuquerque, N.M., Police Department (APD). The investigation will focus on allegations that APD officers engage in use of excessive force, including use of unreasonable deadly force, in their encounters with civilians.
Through the investigation the department will seek to determine whether APD engages in a pattern or practice of use of excessive force in violation of the Constitution and federal law. The investigation will include a comprehensive review of the police department’s policies, training and systems of accountability. The investigation will also examine the police department’s engagement with the community and external oversight of officer-involved shootings and other force incidents.
Prior to the announcement, department officials met with Albuquerque Mayor Richard Berry and APD Chief Ray Schultz, who pledged their full cooperation with the investigation.
The Violent Crime Control and Law Enforcement Act of 1994 prohibits state and local governments from engaging in a pattern or practice of misconduct by law enforcement officers that deprives individuals of federally-protected rights. The department has conducted similar investigations into use of force by law enforcement agencies, both large and small, across the country.
Attorneys and staff from the Special Litigation Section of the Justice Department’s Civil Rights Division will conduct the investigation, assisted by the U.S. Attorney’s Office for the District of New Mexico. Individuals who may have relevant information are encouraged to contact the department via email at [email protected] or by calling the department’s toll free number at 885-544-5134 which is available in both English and Spanish.
Additional information about the Civil Rights Division is available on its website at www.justice.gov/crt . Additional information about the U.S. Attorney’s Office for the District of New Mexico is available on its website at www.justice.gov/usao/nm .
Baylor University Medical Center to Pay More Than $900,000 <br /> <br /> for False Medicare Claims for Radiation Oncology ServicesRead the Press Release
Baylor University Medical Center, Baylor Health Care System and HealthTexas Provider Network (collectively, Baylor) have agreed to pay the United States $907,355 to settle allegations that Baylor submitted false claims to Medicare, the Civilian Health and Medical Program of the Uniformed Services (TRICARE) and the Federal Employees Health Benefit Program (FEHBP) for various radiation oncology services, including intensity modulated radiation therapy, the Justice Department announced today. Intensity modulated radiation therapy is a sophisticated radiation treatment indicated for specific types of cancer where extreme precision is required to spare patients’ surrounding organs or healthy tissue.
The government alleges that Baylor submitted improper claims to Medicare from 2006 through May 2010 in which Baylor double billed Medicare for several procedures affiliated with radiation treatment plans, billed for certain high reimbursement radiation oncology services when a different, less expensive service should have been billed, billed for procedures without supporting documentation in the medical record, and improperly billed for radiation treatment delivery without corroboration of physician supervision.
“Physicians who participate in Medicare must bill for their services accurately and honestly,” said Stuart F. Delery, Principal Deputy Assistant Attorney General for the Justice Department’s Civil Division. “The Department of Justice is committed to ensuring that federal health care funds are spent appropriately.”
Principal Deputy Assistant Attorney General Delery also noted that the settlement with Baylor was the result of a coordinated effort among the Justice Department’s Civil Division, the U.S. Attorney’s Office for the Northern District of Texas, the Department of Health and Human Services’ Office of Inspector General, FBI and Defense Criminal Investigative Services.
U.S. Attorney for the Northern District of Texas Sarah R. Saldaña praised these investigative efforts and said, “this civil recovery is a testament to the efforts of the Department of Justice to hold all parties, regardless of position, accountable for the submission of improper claims to federal health care programs.”
This resolution is part of the government’s emphasis on combating health care fraud and another step for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced by Attorney General Eric Holder and Kathleen Sebelius, Secretary of the Department of Health and Human Services in May 2009. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover $10.1 billion since January 2009 in cases involving fraud against federal health care programs. The Justice Department’s total recoveries in False Claims Act cases since January 2009 are over $13.8 billion.
The claims settled by this a gre ement are alle gations onl y, and the re has b een no det ermination of liabilit y.
Monday 26 November 2012
Mexican National Sentenced to 54 Months in Prison for Trafficking the Identities of Puerto Rican U.S. Citizens<br />Read the Press Release
WASHINGTON – A Mexican national was sentenced today to 54 months in prison for trafficking of identities of Puerto Rican U.S. citizens and corresponding identity documents, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney Rosa E. Rodríguez-Vélez for the District of Puerto Rico; Director John Morton of U.S. Immigration and Customs Enforcement (ICE), which oversees Homeland Security Investigations (HSI); Chief Postal Inspector Guy J. Cottrell of the U.S. Postal Inspection Service (USPIS); Scott P. Bultrowicz, Director of the U.S. State Department’s Diplomatic Security Service (DSS); and Internal Revenue Service-Criminal Investigation (IRS-CI) Chief Richard Weber.
Jose Sergio Garcia-Ramirez, 37, formerly of Rockford, Ill., was sentenced by U.S. District Judge Gustavo A. Gelpí, in the District of Puerto Rico. Judge Gelpí also ordered that Garcia-Ramirez forfeit $35,900 in proceeds and ordered the removal of Garcia-Ramirez from the United States after the completion of his sentence.
On July 17, 2012, Garcia-Ramirez pleaded guilty to one count of conspiracy to commit identification fraud and one count of aggravated identity theft before U.S. Magistrate Judge Bruce J. McGiverin in the District of Puerto Rico.
Garcia-Ramirez was charged in a superseding indictment returned by a federal grand jury in Puerto Rico on Mar. 22, 2012. To date, a total of 53 individuals have been charged for their roles in the identity trafficking scheme, and 18 defendants have pleaded guilty.
Court documents allege that individuals located in the Savarona area of Caguas, Puerto Rico (Savarona suppliers), obtained Puerto Rican identities and corresponding identity documents. Other conspirators located in various cities throughout the United States (identity brokers) allegedly solicited customers and sold Social Security cards and corresponding Puerto Rico birth certificates for prices ranging from $700 to $2,500 per set. The superseding indictment alleges that identity brokers ordered the identity documents from Savarona suppliers, on behalf of the customers, by making coded telephone calls. The conspirators are charged with using text messages, money transfer services and express, priority or regular U.S. mail to complete their illicit transactions.
Court documents allege that some identity brokers assumed a Puerto Rican identity themselves and used that identity in connection with the trafficking operation. Their customers allegedly generally obtained the identity documents to assume the identity of Puerto Rican U.S. citizens and to obtain additional identification documents, such as legitimate state driver’s licenses. Some customers allegedly obtained the documents to commit financial fraud and attempted to obtain a U.S. passport.
According to court documents, various identity brokers were operating in Rockford, Ill.; DeKalb, Ill.; Aurora, Ill.; Seymour, Ind.; Columbus, Ind.; Indianapolis; Hartford, Conn.; Clewiston, Fla.; Lilburn, Ga.; Norcross, Ga.; Salisbury, Md.; Columbus, Ohio; Fairfield, Ohio; Dorchester, Mass.; Lawrence, Mass.; Salem, Mass.; Worcester, Mass.; Grand Rapids, Mich.; Nebraska City, Neb.; Elizabeth, N.J.; Burlington, N.C.; Hickory, N.C.; Hazelton, Pa.; Philadelphia; Houston; Abingdon, Va.; Albertville, Ala.; and Providence, R.I.
Garcia-Ramirez admitted that he was an identity broker in the conspiracy and operated in Illinois. Garcia-Ramirez is the fourth defendant to be sentenced in this case.
The charges are the result of Operation Island Express, an ongoing, nationally-coordinated investigation led by the ICE-HSI Chicago Office and USPIS, DSS and IRS-CI offices in Chicago, in coordination with the ICE-HSI San Juan Office. The Illinois Secretary of State Police; Elgin, Ill., Police Department; Seymour, Ind., Police Department; and Indiana State Police provided substantial assistance. The ICE-HSI Assistant Attaché office in the Dominican Republic and International Organized Crime Intelligence and Operations Center (IOC-2) as well as various ICE, USPIS, DSS and IRS-CI offices around the country provided invaluable assistance.
The case is being prosecuted by Trial Attorneys James S. Yoon, Hope S. Olds, Courtney B. Schaefer and Christina Giffin of the Justice Department Criminal Division’s Human Rights and Special Prosecutions Section, with the assistance of Acting Deputy Chief Jeannette Gunderson of the Criminal Division’s Asset Forfeiture and Money Laundering Section, and the support of the U.S. Attorney’s Office for the District of Puerto Rico. The U.S. Attorney’s Offices in the Northern District of Illinois, Southern District of Indiana, District of Connecticut, District of Massachusetts, District of Nebraska, Middle District of North Carolina, Southern District of Ohio and Western District of Virginia provided substantial assistance.
Potential victims and the public may obtain information about the case at: www.justice.gov/criminal/vns/caseup/beltrerj.html. Anyone who believes their identity may have been compromised in relation to this investigation may contact the ICE toll-free hotline at 1-866-DHS-2ICE (1-866-347-2423) and its online tip form at www.ice.gov/tipline. Anyone who may have information about particular crimes in this case should also report it to the ICE tip line or website.
Anyone who believes that they have been a victim of identity theft, or wants information about preventing identity theft, may obtain helpful information and complaint forms on various government websites including the Federal Trade Commission ID Theft Website, www.ftc.gov/idtheft. Additional resources regarding identity theft can be found at www.ojp.usdoj.gov/ovc/pubs/ID_theft/idtheft.html; www.ssa.gov/pubs/10064.html; www.fbi.gov/about-us/investigate/cyber/identity_theft; and www.irs.gov/privacy/article/0,,id=186436,00.html.
Los Angeles-Area Doctor Pleads Guilty to Conspiring to Defraud Medicare of over $11 MillionRead the Press Release
WASHINGTON— A Los Angeles-area doctor pleaded guilty today to conspiring to defraud Medicare of over $11 million, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney André Birotte Jr. of the Central District of California; Glenn R. Ferry, Special Agent in Charge for the Los Angeles Region of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG); Bill L. Lewis, Assistant Director in Charge of the FBI’s Los Angeles Field Office; and Tony Sidley, Assistant Chief of the California Department of Justice, Bureau of Medi-Cal Fraud and Elder Abuse.
Dr. Juan Tomas Van Putten, 66, of Ladera Heights, Calif., pleaded guilty today before U.S. District Judge George Wu in the Central District of California to one count of conspiracy to commit health care fraud.
Van Putten pleaded guilty to obtaining patients for his medical clinic, Greater South Bay Medical Group, which was located in Carson, Calif., and a nursing home where he also saw patients from street-level patient recruiters or “marketers” who illegally solicited patients with Medicare benefits for expensive, highly-specialized power wheelchairs and other durable medical equipment (DME) that the patients did not need. According to the indictment to which Van Putten pleaded guilty, some of the marketers worked for the operators of fraudulent DME supply companies, including Van Putten’s co-defendants Charles Agbu, a church pastor, and his daughter Obiageli Agbu, who both operated Bonfee Inc. d/b/a “Bonfee Medical Supplies” and Ibon Inc., which were located in Carson.
Van Putten admitted that operators of fraudulent DME supply companies paid him cash kickbacks to write prescriptions for power wheelchairs and other DME that Van Putten knew the patients did not need. Van Putten admitted that he exaggerated the symptoms and diagnoses that he wrote on the prescriptions to make it appear as if the patients met both the medical and Medicare requirements for the power wheelchairs and DME. Van Putten admitted that he knew when he provided the prescriptions to the DME company operators that they would use the prescriptions to submit false claims to Medicare. Van Putten also admitted that he submitted claims to Medicare for services that he provided to the patients at Greater South Bay and the nursing home even though he knew it was illegal for him to provide services to patients who had been recruited by marketers.As a result of this scheme, court documents indicate that Van Putten and his co-defendants submitted approximately $11,094,918 in false claims to Medicare and received approximately $5,788,725 on those claims.
Charles Agbu and Obiageli Agbu are scheduled for trial on Feb. 26, 2013, for their alleged roles in the conspiracy. Co-defendants Dr. Emmanuel Ayodele, Alejandro Maciel and Candalaria Estrada have also been charged for their alleged roles in the conspiracy.
Defendants are presumed innocent until proven guilty at trial.
At sentencing, scheduled for March 28, 2013, Van Putten faces a maximum penalty of 10 years in prison and a $250,000 fine.
The case is being prosecuted by Trial Attorney Jonathan T. Baum of the Criminal Division’s Fraud Section. The case is being investigated by the FBI, HHS-OIG, the California Department of Justice and the Internal Revenue Service.
The case was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Central District of California. The Medicare Fraud Strike Force operations are part of the Health Care Fraud Prevention & Enforcement Action Team (HEAT), a joint initiative announced in May 2009 between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,480 defendants who have collectively billed the Medicare program for more than $4.8 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.
Fraudulent Telemarketer Sentenced to 108 Months in PrisonRead the Press Release
WASHINGTON – An employee of Costa Rica-based telemarketing call centers was sentenced today to serve 108 months in prison for his role in a phony sweepstakes scheme that defrauded thousands of U.S. victims of more than $10 million, announced Assistant Attorney General for the Justice Department’s Criminal Division Lanny A. Breuer.
Osman Bah, 25, of Owings Mills, Md., was sentenced today by U.S. District Judge Max O. Cogburn of the Western District of North Carolina. In addition to his prison term, Bah was sentenced to serve two years of supervised release and ordered to pay $187,500 in restitution.
On July 26, 20l1, Bah pleaded guilty to one count of wire fraud and one count of conspiracy to commit wire fraud.
According to court documents, Bah participated in a conspiracy to defraud U.S. residents, most above the age of 55, out of millions of dollars by deceiving them into believing each person had won a large monetary prize in a “sweepstakes contest.” Calls to victims were made from Costa Rica using Internet-connected computers that disguised the originating location of the calls. Victims were informed that the callers were from the Federal Trade Commission, and that to receive their prize, victims had to wire thousands of dollars for a purported refundable insurance fee to Bah. Bah received the victims’ money in Maryland and, after keeping a portion for himself, forwarded the rest of the money on to his co-conspirators in Costa Rica. As long as the victims continued to pay, the co-conspirators continued to solicit more money from them.
Bah’s co-conspirator Ercell Carey pleaded guilty in June 2011 to one count of conspiracy to commit wire fraud and one count of wire fraud for his role in the scheme. He was sentenced to serve eight months of home confinement, forfeit $61,689 and pay $43,022 in restitution, jointly and severally.
To date, 45 defendants have been convicted for their participation in this scheme.
The case was prosecuted by Senior Trial Attorney William H. Bowne, Senior Litigation Counsel Patrick M. Donley and former Senior Trial Attorney Peter B. Loewenberg of the Criminal Division’s Fraud Section. The case was investigated by the U.S. Postal Inspection Service; Federal Trade Commission, Office of the Inspector General; FBI; U.S. Immigration and Customs Enforcement, Homeland Security Investigations; and Internal Revenue Service-Criminal Investigation.
Former Chicago Massage Parlor Operator Sentenced to Life in Prison for Human Trafficking of Four WomenRead the Press Release
Alex Campbell, 45, of Glenview, Ill., a former northwest suburban massage parlor owner was sentenced today to life in federal prison for various crimes including sex-trafficking, forced labor, harboring illegal aliens, confiscating passports to further forced labor and extortion involving four foreign women whom he mentally and physically abused while forcing them to work for him, the Justice Department announced today. The defendant, who operated the Day and Night Spa on Northwest Highway in Mt. Prospect, Ill., used violence and threats of violence to force three women from the Ukraine and one from Belarus to work for him without pay and, at times, little to no subsistence between July 2008 and January 2010.
Campbell, also known as “Dave” and “Daddy” and who called himself “Cowboy,” was also ordered to pay approximately $124,000 restitution by U.S. District Judge Robert Gettleman. There is no parole in the federal prison system.
Campbell was convicted at trial in January of this year of three counts each of forced labor, harboring illegal aliens for financial gain and confiscating passports and other immigration documents to force the victims to work and one count each of sex trafficking by force, and extortion. He faced a mandatory minimum sentence of 15 years in prison and a maximum of life on the sex-trafficking count alone, and the judge also imposed maximum prison terms ranging from five to 20 years on each of the remaining counts, to run concurrent with the life sentence.
“Alex Campbell abused women by violently coercing them into labor and commercial sex. By working together with law enforcement and community groups, those women were able to testify about that abuse,” said Thomas E. Perez, Assistant Attorney General for the Justice Department’s Civil Rights Division. “Today’s sentence is a victory not only for the Department and the Cook County Human Trafficking Task Force, but also for those women who so bravely came forward and told the truth about their exploitation.”
“If you treat human beings as property, to be branded, beaten, raped, and sold, the law will punish you to the greatest extent possible,” said Gary S. Shapiro, Acting U.S. Attorney for the Northern District of Illinois. “This sentence ensures Alex Campbell’s incapacitation, which will prevent him from victimizing other women.”
“The sentence handed down today sends a clear message to those who think they can callously prey upon vulnerable women to turn a profit,” said Gary J. Hartwig, Special Agent-in-Charge of Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations in Chicago. “HSI will continue to work with our law enforcement partners to ensure that those who engage in human trafficking are held accountable for their actions.”
Cook County Sheriff Thomas J. Dart, whose sheriff’s police initiated the investigation, said, “I am extremely proud of the effort and resolution of all the agencies involved with the successful investigation, conviction and now sentencing of such a violent individual.”
All four victims testified as government witnesses at trial, as well as co-defendant, Danielle John, 25, who pleaded guilty before trial to two counts of harboring illegal aliens for financial gain. She was sentenced previously to three years’ probation. In addition to the trial victims, the government presented evidence that investigators learned of approximately 20 women that Campbell victimized.
The trial showed that Campbell recruited and groomed foreign women without legal status in the United States to become part of his “Family,” which he claimed was an international organization that would provide them with support. He offered them jobs in his massage parlor, a place to live, assistance with immigration, and lured each of them to enter into a romantic relationship with him. After gaining their trust, he forced the victims to get tattooed with his moniker, which he said made them his property and allowed him to stop paying them. At the same time, he acquired the women’s passports and visas. The women were forced to work long hours every day and do as Campbell instructed them, and they were beaten and punished if they disobeyed him.
Trial testimony established that Campbell confiscated passports and identity documents from three of the victims, as well as harbored and transported them to ensure their continued labor. Campbell forced one victim to engage in commercial sex acts with customers at various other massage parlors, but not at the Day and Night Spa, which testimony showed he operated “cleanly” to avoid problems with law enforcement. He extorted another victim to pay him more than $25,000 to leave the “Family” by threatening to send a sexually-explicit video recording to her parents in Belarus.
The Cook County State’s Attorney’s Office assisted in the investigation, which was coordinated by the Cook County Human Trafficking Task Force. The task force, together with the Salvation Army Family and Community Services STOP-IT Initiative Against Human Trafficking, operate a toll-free hotline, (877) 606-3158, which victims of trafficking or those with information about human trafficking can call for assistance. The government is represented by Assistant U.S. Attorneys Diane MacArthur and Steven Grimes and Special Litigation Counsel John Richmond of the Civil Rights Division’s Human Trafficking Prosecution Unit.
Friday 23 November 2012
Two Members and One Associate of Violent North Carolina Latin Kings Gang Convicted for Racketeering ConspiracyRead the Press Release
A federal jury in Winston-Salem, N.C., has convicted two members of the North Carolina Almighty Latin King and Queen Nation (ALKQN) and one associate of the gang for a racketeering conspiracy involving violent crimes and drug distribution for the benefit of the criminal organization.
The convictions, which occurred late Wednesday, were announced today by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney Ripley Rand for the Middle District of North Carolina; and Chris Briese, Special Agent in Charge of the Charlotte, N.C. Division of the FBI.
“Acting on behalf of the Latin Kings, these defendants committed horrific acts of violence in their community, and they face substantial prison sentences as a result,” said Assistant Attorney General Breuer. “Gangs wreak havoc on our streets and in our neighborhoods, and we are determined to continue bringing dangerous criminals like the Latin Kings to justice.”
“The result in this case speaks to the value of effective partnerships - effective partnerships between the many law enforcement agencies involved in the investigation of this case, and the effective partnership between our office and the Organized Crime and Gang Section of the Department of Justice’s Criminal Division in the prosecution of the case,” said U.S. Attorney Rand. “We would like to thank the jury for their time and attention during this lengthy trial - their deliberations and verdict show that they took this case very seriously, and our office will continue to take violent crime in the District very seriously as well.”
“This verdict is a direct result of the outstanding joint investigative efforts of our federal, state, and local law enforcement partners,” said Special Agent in Charge Briese. “The Piedmont-Triad Safe Streets Task Force will continue to investigate and help eradicate violent gangs to keep our communities safe.”
The leader of the North Carolina ALKQN, Jorge Cornell, aka “King J,” 36, of Greensboro, was convicted of racketeering conspiracy and violent crime in aid of racketeering activity. He was also convicted of use of a firearm during and in relation to a crime of violence for an April 2008 assault with a dangerous weapon.
Russell Lloyd Kilfoil, aka “King Peaceful,” 26, of Greensboro, and Ernesto Wilson, aka “Yayo,” 54, of New York, were also convicted of racketeering conspiracy. Randolph Leif Kilfoil, aka “King Paul,” 27, of Greensboro; Samuel Isaac Velasquez, aka “King Hype,” 23, of Garner, N.C.; and Irvin Vasquez, aka “King Dice,” 23, of Raleigh, N.C. were found not guilty after three days of jury deliberations.
According to evidence presented at trial, the defendants were members and associates of the ALKQN in North Carolina, a violent street gang that originated in Chicago in the 1960s and ultimately migrated to cities throughout the United States, including to Greensboro in 2002. Evidence at trial showed that from approximately 2005 until December 2011, the Latin Kings gang members met on a regular basis to increase their knowledge base of the gang rules; to discuss criminal activity and how to deal with rival gangs, including by attempted murder; to purchase firearms and circulate firearms for use in criminal activity by Latin Kings members; to engage in violent take-over robberies; and to use juveniles to distribute cocaine. The proceeds of this criminal activity helped to finance the gang’s illegal activities. Latin Kings members also attempted to murder members of their own gang when they attempted to leave the gang.
Evidence presented at trial also showed that Cornell conspired with other members of the Latin Kings to commit these racketeering acts, including the April 2008 shooting of a rival gang member; distribution of cocaine; the commission of no fewer than five Hobbs Act robberies of business located throughout the Greensboro area; plotting to firebomb the residences of former Latin Kings members; attacking former Latin Kings members; and the conspiracy to kill former Latin Kings members in drive-by shootings.
Six other individuals have pleaded guilty in the Middle District of North Carolina to racketeering conspiracy related to their involvement in the Latin Kings gang. Carlos Coleman, aka “King Spanky,” was acquitted of charges in a motion granted by the court during trial.
U.S. District Judge James A. Beaty Jr. presided over the trial. Each of the defendants convicted today faces a maximum potential penalty of 20 years in prison on the Racketeering Conspiracy count. Cornell also faces a maximum potential penalty of 20 years in prison on the violent crime in aid of racketeering count, and a minimum of 10 years in prison and a maximum of life in prison on the use of a firearm count. Each count also carries a maximum potential $250,000 fine.
The investigation was a joint operation conducted by the FBI’s Greensboro Field Office; the Greensboro, N.C. Police Department, under the direction of Chief Ken Miller; and the Guilford County Sheriff’s Office, under the direction of Sheriff B. J. Barnes. The case was prosecuted by Trial Attorney Leshia Lee-Dixon of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorney Robert A.J. Lang for the Middle District of North Carolina.
Wednesday 21 November 2012
Hungarian Woman Pleads Guilty in Tennessee for Role in International Fraud Scheme Involving Online Marketplace WebsitesRead the Press Release
WASHINGTON – A Hungarian woman pleaded guilty today in Nashville, Tenn., for her role in moving approximately $550,000 in illicit proceeds derived from an international online marketplace fraud scheme, announced Assistant Attorney General Lanny Breuer of the Justice Department’s Criminal Division and U.S. Attorney Jerry E. Martin for the Middle District of Tennessee.
Beatrix Boka, 34, of Hungary, pleaded guilty today before U.S. District Judge Aleta A. Trauger in the Middle District of Tennessee to one count of conspiracy to commit bank and wire fraud. Boka and co-conspirator Aleksandar Kunkin, also of Hungary, were charged in a one-count indictment by a federal grand jury in August 2012. Kunkin pleaded guilty on Nov. 15, 2012.
Boka admitted in her plea hearing today that members of the conspiracy fraudulently listed vehicles for sale at online marketplaces such as eBay. When victims expressed interest in purchasing the vehicles, co-conspirators sent emails that directed victims to wire payments to certain bank accounts, and victims never received the vehicles for which they paid.
Boka further admitted that, from May to June 2012, she and Kunkin visited Bank of America branches in North Carolina and South Carolina and opened bank accounts under false identities, which were supported by fraudulent identity documents including counterfeit Hungarian passports. Boka pleaded guilty to opening 17 such accounts, each under a different name. In total, 36 victims sent approximately $550,102 to accounts opened by Boka and Kunkin. Boka admitted that she and Kunkin subsequently sent the bulk of the money to co-conspirators located abroad.
According to the criminal complaint affidavit, in June 2012, Boka and Kunkin traveled together to Madison, Tenn., where Kunkin was apprehended as he attempted to open an account at a Bank of America branch using a Hungarian passport bearing an alias. Boka was subsequently apprehended in Kennesaw, Ga., when she attempted to open an account at a Bank of America branch using a Hungarian passport bearing an alias.
Boka faces a maximum sentence of five years in prison and a $250,000 fine. Sentencing is scheduled for Feb. 21, 2013.
The case is being prosecuted by Assistant U.S. Attorney Byron M. Jones of the Middle District of Tennessee and Trial Attorney Mysti Degani of the Criminal Division’s Computer Crime and Intellectual Property Section. The case is being investigated by the FBI, the Tennessee Bureau of Investigation, the Metropolitan Nashville Police Department, and the Cobb County, Ga., Sheriff’s Department.
California Jewelry Store Owner Convicted of Conspiracy to Defraud the United States and Conspiracy to Launder the Proceeds of Bank FraudRead the Press Release
A federal jury sitting in Santa Ana, Calif., on Wednesday, Nov. 21, 2012, convicted Safieh Fard of one count of conspiracy to defraud the Internal Revenue Service (IRS) and one count of conspiracy to launder the proceeds of bank fraud obtained after submitting fraudulent mortgage applications, the Justice Department and IRS Criminal Investigation announced. Fard’s co-conspirators, her sister Sedigheh Bahramian, and two of her sons, Mohsen Kikalaye and Ahmad Kikalaye, pleaded guilty to related counts of bank fraud in 2010.
According to the indictment and evidence introduced at trial, starting in 1997 and continuing through 2004, Fard and her co-conspirators purchased valuable residential real estate properties, including numerous beachfront properties in Newport Beach, Calif. In order to obtain mortgages to purchase these properties, Fard and her co-conspirators provided false information to federally-insured banks that substantially overstated their income and assets on mortgage applications. Fard submitted mortgage applications that falsely stated she earned over $40,000 per month, despite claiming no taxable income on her federal income tax returns during the eight year conspiracy.
The evidence also established that Fard and her co-conspirators bought, sold, and transferred ownership of the properties between and among themselves. Ultimately, the properties were sold to third parties resulting in substantial monetary gain. Fard and her co-conspirators then failed to report capital gains on more than $3.7 million from these sales on their federal income tax returns.
The evidence further established that Fard and her co-conspirators Mohsen Kikalaye and Ahmad Kikalaye sold Newport Beach properties to unrelated third parties and received the proceeds in a large lump-sum payment by either wire transfer or check. Fraud proceeds were then transferred through multiple bank accounts to an account in the name of Fard’s co-conspirator Ahmad Kikalaye, who withdrew proceeds in cash in amounts slightly below the $10,000 federal reporting requirement. Fraud proceeds were also used to buy new real estate properties.
Sentencing is scheduled for April 8, 2013.
Kathryn Keneally, Assistant Attorney General for the Justice Department’s Tax Division, commended the efforts of special agents from IRS Criminal Investigation and U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations of Orange County, Calif., who jointly investigated the case, and Tax Division Trial Attorneys Erin S. Mellen and Mark L. Williams, who prosecuted the case with valuable support from the U.S. Attorney’s Office for the Central District of California.
Tuesday 20 November 2012
U.S. and Mississippi Announce Clean Water Act Agreement with the City of JacksonRead the Press Release
The Department of Justice, the U.S. Environmental Protection Agency (EPA) and the Mississippi Department of Environmental Quality (MDEQ) announced today a comprehensive Clean Water Act settlement with the city of Jackson, Miss. Jackson has agreed to make improvements to its sewer systems to eliminate unauthorized overflows of untreated raw sewage and unauthorized bypasses of treatment at the Savanna Street Wastewater Treatment Plant (WWTP), the city’s largest wastewater treatment facility. When wastewater systems overflow, they can release untreated sewage and other pollutants into local waterways, threatening water quality and contributing to beach closures and disease outbreaks.
“This agreement will bring lasting benefits to the people of Jackson by reducing the threats to public health posed by untreated sewage overflows,” said Ignacia S. Moreno, Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. “The settlement will bring the city into compliance with the nation’s Clean Water Act, requiring significant upgrades to the existing sewer system. Under the settlement, assistance will be provided to residents to repair sewer connections in lower-income areas that have suffered historically from overflows of untreated sewage.”
“EPA is working with cities to protect the nation’s waters from raw sewage overflows that can have significant impacts on people’s health and the environment,” said Cynthia Giles, Assistant Administrator for the EPA’s Office of Enforcement and Compliance Assurance. “Today’s settlement will lead to improvements in the management of wastewater overflows, which will reduce water pollution and benefit the Jackson community for years to come.”
“MDEQ has worked for several years with the city of Jackson on compliance issues and corrections to their wastewater system,” said Mississippi Department of Environmental Quality Executive Director Trudy Fisher. “Our efforts will continue to cooperatively work with the city and help them move forward. We are hopeful this settlement will result in a better quality of life for the city’s citizens and an improvement in water quality for the Pearl River and surrounding streams.”
The consent decree requires Jackson to implement specific programs designed to ensure proper management, operation and maintenance of its sewer systems. In order to address the problem of wet weather overflows of raw sewage from the sewer lines, Jackson will develop and implement a comprehensive sewer system assessment and rehabilitation program. The city will also develop and implement a comprehensive performance evaluation and composite correction program to reduce the bypasses of treatment at the Savanna Street WWTP.
The consent decree also requires Jackson to develop and implement numerous sewer system capacity, management, operations and maintenance programs, including a pump station operation and preventive maintenance program, a WWTP operation and maintenance program and a water quality monitoring program.
In addition to the control requirements, the consent decree requires Jackson to pay a civil penalty of $437,916. As part of the settlement, Jackson has also agreed to implement a supplemental environmental project valued at $875,000 that will provide additional environmental benefits to the local community. The project involves reducing the flow of water from entering the sewer system by eliminating illicit stormwater connections and repairing defective private lateral sewer lines from the low-income residential properties.
Keeping raw sewage and contaminated stormwater out of the waters of the United States is one of the EPA’s national enforcement initiatives for 2011 to 2013. The initiative focuses on reducing sewer overflows, which can present a significant threat to human health and the environment. These reductions are accomplished by obtaining cities’ commitments to implement timely, affordable solutions to these problems, including the increased use of green infrastructure and other innovative approaches.
The United States has reached similar agreements in the past with numerous municipal entities across the country including Mobile and Jefferson County (Birmingham), Ala.; Atlanta and Dekalb County, Ga.; Memphis, Knoxville and Nashville, Tenn.; Miami-Dade County, Fla.; New Orleans, La.; Hamilton County (Cincinnati), Oh.; Northern Kentucky Sanitation District #1 and Louisville MSD, Ky.
The proposed consent decree with Jackson is subject to a 30-day public comment period and final court approval before becoming effective. A copy of the consent decree lodged today is available on the Department of Justice website at www.justice.gov/enrd/Consent_Decrees.html
More about the settlement: www.epa.gov/enforcement/water/cases/cityofjacksonmississippi.html
More information on EPA’s national enforcement initiative: www.epa.gov/compliance/data/planning/initiatives/2011sewagestormwater.html
Two Plead Guilty in Miami for Roles in $63 Million Mental Health Care Fraud SchemeRead the Press Release
WASHINGTON –A registered nurse pleaded guilty today and a former program coordinator pleaded guilty yesterday in connection with a health care fraud scheme involving defunct health provider Health Care Solutions Network Inc. (HCSN), announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida; Michael B. Steinbach, Acting Special Agent-in-Charge of the FBI’s Miami Field Office; and Special Agent-in-Charge Christopher B. Dennis of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG), Office of Investigations Miami office.
John Thoen, 53, of Miami, pleaded guilty today before U.S. District Judge Cecilia M. Altonaga in the Southern District of Florida to one count of conspiracy to commit health care fraud and one count of conspiracy to commit money laundering. Alexandra Haynes, 36, of Taylor, S.C., pleaded guilty yesterday before Judge Altonaga to one count of conspiracy to commit health care fraud in the same case.
According to court documents, HCSN operated community mental health centers (CMHC) at three locations Miami-Dade County, Fla., and one location in Hendersonville, N.C. HCSN purported to provide partial hospitalization program (PHP) services to individuals suffering from mental illness. A PHP is a form of intensive treatment for severe mental illness.
According to an indictment unsealed on May 2, 2012, HCSN obtained Medicare beneficiaries to attend HCSN for purported PHP treatment that was unnecessary and, in many instances, not even provided. HCSN obtained those beneficiaries in Miami by paying kickbacks to owners and operators of assisted living facilities.
According to court documents, Thoen was a licensed registered nurse in both Florida and North Carolina. In Florida, Thoen participated in the admission to HCSN of patients who were ineligible for PHP services. Thoen participated in the routine fabrication of patient medical records that were utilized to support false and fraudulent billing to government sponsored health care benefit programs, including Medicare and Medicaid.
In North Carolina, Thoen, according to court documents, routinely submitted fraudulent PHP claims for Medicare patients who were not even present at the CMHC on days PHP services were purportedly rendered. Thoen also caused the submission of fraudulent Medicare claims on days the CMHC was closed due to snow.
Thoen also admitted to his role in a money laundering scheme, involving Psychiatric Consulting Network Inc. (PCN), a Florida corporation that was utilized by HCSN as a shell corporation to launder health care fraud proceeds. According to court documents, Thoen was president of PCN.
According to court documents, Haynes was employed in Miami as an intake specialist and routinely fabricated patient medical records. In North Carolina, Haynes was employed as a program coordinator and conducted group therapy sessions and fabricated corresponding group therapy notes even though she was not licensed to provide mental health services in the state.
According to court documents, from 2004 through 2011, HCSN billed Medicare and the Florida Medicaid program approximately $63 million for purported mental health services.
Nine defendants have been charged for their alleged roles in the HCSN health care fraud scheme. Six defendants have pleaded guilty, and three defendants are scheduled for trial on Jan. 14, 2013, before U.S. District Judge Altonaga in Miami. Defendants are presumed innocent until proven guilty at trial.
The cases are being prosecuted by Special Trial Attorney William Parente and Trial Attorney Allan J. Medina of the Criminal Division’s Fraud Section. This case was investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,480 defendants who have collectively billed the Medicare program for more than $4.8 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.
South Carolina-based Harmony Care Hospice Inc. <br /> <br /> and CEO/Owner Daniel J. Burton to Pay U.S. $1.286 Million <br /> <br /> to Resolve False Claims Act AllegationsRead the Press Release
Harmony Care Hospice Inc. (Harmony) and Harmony owner and chief executive officer Daniel J. Burton have agreed to pay the United States $1,286,999.32 to settle allegations that the South Carolina-based company submitted false claims to Medicare for patients under care at its hospice facilities, the Justice Department announced today.
Hospices provide palliative care – medical treatment that concentrates on reducing the severity of a disease’s symptoms – to patients who decide to forego curative care of their illness. Medicare beneficiaries are entitled to hospice care if they have a terminal prognosis of six months or less. The United States alleged that Harmony and Burton knowingly submitted or caused to be submitted false claims for patients who did not have such a prognosis and thus were not eligible for hospice care. Under today’s agreement, Burton is individually liable for $200,000 of the settlement amount.
“Billing Medicare for unnecessary or inappropriate end-of-life care contributes to the soaring costs of health care for everyone. Today’s settlement demonstrates the Department of Justice’s efforts both to protect public funds and safeguard Medicare beneficiaries,” said Stuart F. Delery, Principal Deputy Assistant Attorney General of the Civil Division.
Today’s settlement with Harmony and Burton resolves a lawsuit filed by former Harmony employees Mona Singletary and Lynda Fulton under the qui tam, or whistleblower, provisions of the False Claims Act. Under the False Claims Act, private citizens can bring suit for false claims on behalf of the United States and share in any recovery. Together, Singletary and Fulton will receive $244,529.87 as their share of the government’s recovery.As part of the settlement, Harmony and Burton will enter into a Corporate Integrity Agreement with the Office of Inspector General (OIG), Department of Health and Human Services (HHS), to address the allegations raised in the qui tam complaint.
“As budget pressures increase it is more important than ever to protect Medicare dollars and vigilantly guard against needless health spending,” said Daniel R. Levinson, Inspector General of the U.S. Department of Health and Human Services. “The company and its owner have agreed to Federal monitoring and reporting requirements designed to avoid such problems in the future.”
This resolution is part of the government’s emphasis on combating health care fraud and another step for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced by Attorney General Eric Holder and Kathleen Sebelius, Secretary of the Department of Health and Human Services in May 2009. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover more than $10.1 billion since January 2009 in cases involving fraud against federal health care programs. The Justice Department’s total recoveries in False Claims Act cases since January 2009 are over $13.9 billion.
The investigation was jointly handled by the U.S. Attorney’s Office for the District of South Carolina, the Justice Department’s Civil Division and the Office of the Inspector General of the Department of Health and Human Services. The claims resolved by this settlement are allegations only, and there has been no determination of liability.
The qui tam case is captioned United States ex rel. Singletary, et al. v. Harmony Care Hospice, Inc., et al. , Case No. 2:10-cv-01404-PMD (D.S.C.).
Residential Mortgage-Backed Securities Working Group Members Announce Charges Against Credit SuisseRead the Press Release
Residential Mortgage-Backed Securities (RMBS) Working Group Co-Chair New York Attorney General Eric T. Schneiderman today filed a Martin Act complaint against Credit Suisse Securities (USA) LLC and its affiliates for making fraudulent misrepresentations and omissions to promote the sale of RMBS to investors. According to New York Attorney General Schneiderman’s lawsuit, Credit Suisse deceived investors as to the care with which they evaluated the quality of mortgage loans packaged into residential mortgage-backed securities prior to 2008. The lawsuit also alleges that RMBS sponsored and underwritten by Credit Suisse in 2006 and 2007 have suffered losses of approximately $11.2 billion.
This is the fourth enforcement action from the RMBS Working Group, a joint federal and state initiative created by President Obama earlier this year to investigate those responsible for misconduct contributing to the financial crisis through the pooling and sale of RMBS. RMBS were pools of mortgages deposited into trusts and then sold as securities to investors who were to receive a stream of income from the mortgages packaged in the RMBS.
According to the complaint, Credit Suisse led its investors to believe that the quality of the loans in its mortgage-backed securities had been carefully evaluated and would be continuously monitored however, Credit Suisse did neither. The complaint alleges that instead, Credit Suisse systematically failed to adequately evaluate the loans, ignored defects that its limited review did uncover, and kept its investors in the dark about the inadequacy of its review procedures and defects in the loans. The complaint further alleges that the loans in Credit Suisse’s mortgage-backed securities included many that had been made to borrowers who were unable to repay the loans, were very likely to default, and ultimately did default in large numbers.
“This lawsuit against Credit Suisse marks another significant step in our efforts to hold financial institutions accountable for the misconduct that led to the worst financial crisis in nearly a century,” said New York Attorney General Schneiderman. “Our investigations and legal actions demonstrate that there must be one set of rules for all – no matter how big or powerful the institution may be – and that those rules will be enforced vigorously. We need real accountability for the illegal and deceptive conduct in the creation of the housing bubble in order to bring justice for New York’s homeowners and investors.”
RMBS Working Group members contributed significantly to this effort. The Federal Housing Finance Agency Inspector General played a key role working with the New York Attorney General’s Office on the investigation, providing investigators and lawyers, the U.S. Securities and Exchange Commission (SEC) collaborated and assisted with the case, and the Department of Justice provided resources from U.S. Attorney’s offices around the country as well as from the RMBS Coordinating Team.
“Credit Suisse allegedly engaged in a far-reaching scheme to defraud investors, including Fannie Mae and Freddie Mac,” said FHFA Inspector General Steve Linick. “As victims, Fannie Mae and Freddie Mac have sustained significant losses, which to date have been borne by taxpayers. This lawsuit sends the clear message that reckless lending practices will not be tolerated.”
The Department of Justice’s specific role in the investigation included providing 11 Assistant U.S. Attorneys from offices all over the United States who interviewed more than 40 significant market participants. In addition, the Department of Justice provided 11 investigative analysts to assist in the review of millions of documents.
Today’s filing by our working group partner and my fellow co-chair New York Attorney General Schneiderman, represents another step toward holding accountable those whose actions led to the financial crisis and hurt so many Americans,” said Principal Deputy Assistant Attorney General for the Civil Division Stuart Delery. “This action demonstrates the value and strength of the working group model and was made possible by contributions from a variety of members of the working group, who contributed resources, personnel and expertise to the development of this case.”
“The number and breadth of recent RMBS actions, and the coordination and sharing among enforcement authorities that underlie them, prove that the whole of the RMBS Working Group is greater than the sum of its parts,” said Robert Khuzami, Director of the SEC’s Enforcement Division.
The New York Attorney General seeks investor damages to recoup these losses, as well as other equitable relief.
Today's announcement is part of the ongoing efforts of President Obama's Financial Fraud Enforcement Task Force's Residential Mortgage-Backed Securities (RMBS) Working Group, a federal and state law enforcement effort focused on investigating fraud and abuse in the RMBS market that helped lead the 2008 financial crisis. The RMBS Working Group brings together more than 200 attorneys, investigators, analysts and staff from dozens of state and federal agencies including the Department of Justice together with 10 U.S. Attorneys' Offices and the FBI, the SEC, the Department of Housing and Urban Development (HUD), HUD's Office of Inspector General, the Federal Housing Finance Agency's Office of Inspector General, the Office of the Special Inspector General for the Troubled Asset Relief Program, the Federal Reserve Board's Office of Inspector General, the Recovery Accountability and Transparency Board, the Financial Crimes Enforcement Network and more than 10 state attorneys general offices around the country.
The Working Group is led by five co-chairs: Director of Enforcement for the SEC Robert Khuzami, New York State Attorney General Eric Schneiderman, Assistant Attorney General for the Justice Department's Criminal Division Lanny Breuer, Principal Deputy Assistant Attorney General for the Justice Department's Civil Division Stuart Delery and U.S. Attorney for the District of Colorado John Walsh. The RMBS Working Group Coordinator is Matthew Stegman. For more information about the RMBS working group and the Financial Fraud Enforcement Task Force, which is chaired by Attorney General Eric Holder, visit: www.stopfraud.gov .
Louisiana Generating to Install Pollution Controls and Pay $14 Million in Penalties and Projects to Resolve Clean Air Act ViolationsRead the Press Release
Louisiana Generating, an electric generating company owned by NRG Energy Inc., has agreed to a settlement at its Big Cajun II coal-fired power plant in New Roads, La., which will result in the elimination of over 27,300 tons of harmful emissions per year, the Department of Justice and U.S. Environmental Protection Agency (EPA) announced today. The settlement, lodged in federal court today in Baton Rouge, will require Louisiana Generating to spend approximately $250 million to reduce air pollution and also requires the company to pay a civil fine of $3.5 million and spend $10.5 million on environmental mitigation projects.
Louisiana Generating will achieve these reductions through a combination of new pollution controls, natural gas conversion and annual emission caps at all three units at the Big Cajun II plant. Emissions of sulfur dioxide (SO2) will be reduced by approximately 20,000 tons and nitrogen oxides (NOx) by about 3,300 tons. Louisiana Generating will spend an estimated $250 million in capital costs to comply with the consent decree through the end of 2015. Louisiana Generating also has agreed to further air pollution reductions by 2025, which will reduce SO 2 by at least an additional 4,000 tons each year.
The state of Louisiana joined in the settlement and will receive $1.75 million, one-half of the $3.5 million civil penalty.
The Clean Air Act, federal and Louisiana regulations require owners and operators of power plants to obtain permits and install best available control technology after major modifications are made to power plants. The governments alleged that Louisiana Generating violated federal and state law by continuing to operate Big Cajun II Units 1 and 2 without getting the required permits and installing modern air pollution controls after the largest boiler modifications in the history of the plant were made at the facility.
“The Big Cajun II Power Plant is the largest source of illegal air pollution in Louisiana. This settlement will secure substantial reductions in harmful emissions from the plant which will have a beneficial impact on air quality for residents of Louisiana and downwind states, including low-income communities who have been historically overburdened with pollution,” said Ignacia S. Moreno, Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. “Louisiana Generating will install modern air pollution controls that will significantly reduce harmful emissions and also will perform environmental projects that will conserve energy.”
“This settlement represents a big win for the people of Louisiana and surrounding states, showing that we can both protect public health and the environment without taking away the electricity and jobs essential to our community,” said Donald J. Cazayoux, Jr., the U.S. Attorney for the Middle District of Louisiana.
“This settlement continues our important enforcement initiative to reduce harmful illegal air pollution from the largest sources of emissions,” said Cynthia Giles, assistant administrator for EPA’s Office of Enforcement and Compliance Assurance. “Pollution from these sources can cause severe respiratory and cardiovascular impacts, and EPA is committed to making sure that they all comply with the law.”
“Louisiana continues to see the positive effects from emission reductions from facilities across the state,” said Peggy Hatch, Secretary of the Louisiana Department of Environmental Quality. “The reduction in air emissions from this settlement will be beneficial to our citizens. The health of Louisiana’s environment is the best it has been since the creation of the Clean Air and Clean Water Acts. Reductions such as these will only continue that trend. We’ll continue to work with our local, state and federal partners to protect human health and the environment.”
Louisiana Generating will spend $10.5 million on environmental mitigation projects that will further reduce emissions and benefit communities adversely affected by pollution from the Big Cajun II plant as follows:
· Install solar photovoltaic panels at local schools, government-owned facilities or buildings owned by nonprofit groups;
· Restore and protect land, watersheds, vegetation and forests;
· Fund creation of one or more charging stations for electric vehicles in the South Louisiana area that are supplied with zero emission renewable energy sources;
· Mitigate nitrogen loading in the False River, which will have the co-benefit of reducing phosphorus loading and preventing harmful algal blooms;
· Conduct energy efficiency projects, which could include voltage optimization, residential energy efficiency and assistance with commercial or industrial energy efficiency improvements; and
· Pay $1.5 million to the state of Louisiana to implement projects which could include the following: retrofitting vehicles with pollution controls, truck stop electrification, purchase and installation of photo-voltaic cells on buildings, building energy conservation and efficiency, buyback programs for dirty old motors and removal or replacement of oil-fired home heaters with ultra-low sulphur oil and outdoor wood-fired boilers.
The settlement marks the federal government’s 24th settlement under its national enforcement initiative to reduce emissions from coal-fired power plants under the Clean Air Act’s New Source Review requirements. SO2 and NOx, two key pollutants emitted from power plants, have numerous adverse effects on human health and the environment. These pollutants are converted in the air to fine particles of particulate matter that can cause severe respiratory and cardiovascular impacts, and premature death. SO2 and NOx are also significant contributors to acid rain, smog and haze. In addition, air pollution from power plants can drift significant distances downwind, thereby affecting not only local communities, but also communities in a much broader area.
The proposed settlement will be lodged in the U.S. District Court for the Middle District of Louisiana is subject to a public comment period and final court approval. The consent decree can be viewed at the Department of Justice website: www.justice.gov/enrd/Consent_Decrees.html .
Justice Department Enters into Settlement Agreement to Reform the East Haven, Conn., Police DepartmentRead the Press Release
The Justice Department today announced that it has entered into a comprehensive settlement agreement with the town of East Haven, Conn., to resolve the department’s complaint alleging that the East Haven Police Department (EHPD) engaged in a pattern or practice of unlawful discrimination against individuals on account of race, color or national origin. The agreement also resolves allegations that EHPD engaged in a pattern or practice of use of excessive force and unconstitutional searches and seizures. The department and town jointly filed the agreement in federal district court today seeking the court’s approval and continued jurisdiction to enforce its terms.
The agreement is designed to ensure that the policies and practices of EHPD uphold constitutional protections against unlawful discrimination and unreasonable searches and seizures for the town’s 29,000 residents and other individuals who visit the town. The agreement, which draws from contemporary policing practices from around the country, is also designed to strengthen the community’s trust in EHPD and enable police officers to more effectively protect public safety. Once the agreement is implemented, the town is required to maintain two years of sustained compliance to ensure that the reforms become part of the agency’s standard procedures and institutional culture.
On Oct. 22, 2012, the department and the mayor of East Haven signed a letter of intent to enter into the agreement that provided the mayor an opportunity to consult with other town officials on the agreement’s comprehensive reforms. Following a series of board and council meetings, town officials unanimously endorsed the agreement. On Nov. 15, 2012, the mayor and police commission chairman executed the agreement.
“We are pleased that town officials have joined the mayor and the board of police commissioners in supporting the broad reforms embodied in the agreement.” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The agreement reflects a strong commitment to effective and constitutional law enforcement in East Haven for all who live, work and visit the town.”
“We commend the mayor, board of police commissioners, police chief, police officers and other town officials for taking this important step forward toward reform,” said David B. Fein, the U.S. Attorney for the District of Connecticut. “This agreement will provide the men and women of EHPD with the necessary support and guidance they need to fulfill their duties in a manner that protects public safety and upholds individuals’ civil rights.”
The agreement provides for comprehensive reforms in seven core areas, and provides for a joint compliance expert who will independently assess EHPD’s implementation of the agreement. The seven core areas are:
- Biased-free policing, including measures on mandatory training, collection and analysis of data on police encounters, development of a meaningful language access plan, notification to consulates when foreign nationals are detained, and steps to promote biased-free policing in EHPD’s hiring, promotion and performance assessment processes;
- Use of force, including the development of current policies on use of force and measures that provide for comprehensive training, consistent force reporting and thorough force reviews and investigations by supervisors and the internal affairs officer;
- Searches and seizures, including the development of up-to-date policies and measures on applying for search warrants, documenting consent searches, notifying supervisors of felony arrests and other “contempt-of-cop” situations, inspecting detainees for injuries and preserving individuals’ First Amendment rights to observe and record police activity;
- Policies and training, including measures to ensure that officers and supervisors have sufficient guidance to carry out their law enforcement responsibilities in a lawful, effective and ethical manner;
- Civilian complaints, internal investigations and discipline, including measures to ensure that all allegations of officer misconduct are received and thoroughly investigated and that officers who engage in misconduct are held accountable by a disciplinary system that is fair and consistent;
- Supervision and management, including steps that provide for close and effective supervision to assist officers in carrying out their duties in a lawful manner and systems that allow supervisors to identify, correct and prevent misconduct; and
- Community engagement and oversight, including measures to create robust partnerships with all segments of the East Haven community, disseminate public information on reforms and policing activities and solicit feedback on the relationship between EHPD and the community.
In September 2009, the Justice Department opened a pattern or practice investigation into allegations that EHPD officers engaged in discriminatory traffic enforcement, use of excessive force and unconstitutional searches and seizures in violation of the Constitution and federal anti-discrimination laws. In December 2011, the department completed its investigation and issued a letter finding reasonable cause to believe that EHPD engaged in a pattern or practice of unlawful discrimination and other misconduct. The investigation was conducted jointly by the Civil Rights Division’s Special Litigation Section and the U.S. Attorney’s Office for the District of Connecticut.
The full text of the 2011 Findings Letter, the Letter of Intent, the United States’ complaint and the settlement agreement are available at www.justice.gov/crt/about/spl/findsettle.php . For more information on the Justice Department’s Civil Rights Division, please visit www.justice.gov/crt .
Justice Department Asks Court to Dismiss Matter Involving the Arkansas Juvenile Assessment and Treatment Center Because Center Has Complied with AgreementRead the Press Release
The Justice Department announced that it has filed a joint motion with the state of Arkansas to dismiss the settlement in United States v. Arkansas, a case involving conditions at the Arkansas Juvenile Assessment and Treatment Center in Alexander, Ark. The state has fully complied with the settlement, which includes reforms in mental health care, fire safety, education and religious freedom for the youth residing at the facility. In addition to complying with the settlement, during the course of the department’s investigation and settlement, the state shifted its focus on juvenile justice from an institution-based model to a community-based model. The result has been a significant statewide decrease in the number of incarcerated youth. At the same time, crime in Arkansas has dropped even though the population of youth under 18 has grown.
“In the Justice Department’s view, the state has met the requirements necessary for dismissal of this case. We reached this conclusion after thoroughly reviewing information gathered during the department’s enforcement of the settlement,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “We commend the state for its successful efforts to reduce the number of youth in secure institutional confinement, and for its commitment to ensuring that the constitutional rights of youth are protected.”
In March 2003, the Justice Department and state of Arkansas entered into the settlement to resolve the department’s findings of unlawful conditions at the then-named Alexander Youth Services Center following a comprehensive investigation under the Civil Rights of Institutionalized Persons Act and the Violent Crime Control and Law Enforcement Act of 1994. The settlement called for broad reforms in areas related to mental health care, fire safety, education and religious freedom.
For more information on the Justice Department’s Civil Rights Division, please visit www.justice.gov/crt .
Iranian National and His Company Charged in Plot Involving Export of Military Antennas from the United StatesRead the Press Release
Amin Ravan, a citizen of Iran, and his Iran-based company, IC Market Iran (IMI), have been charged in an indictment unsealed today with conspiracy to defraud the United States, smuggling, and violating the Arms Export Control Act (AECA) in connection with the unlawful export of 55 military antennas from the United States to Singapore and Hong Kong.
The indictment was announced by Lisa Monaco, Assistant Attorney General for National Security; Ronald C. Machen Jr., U.S. Attorney for the District of Columbia; John Morton, Director of the Department of Homeland Security’s U.S. Immigration and Customs Enforcement (ICE); Stephanie Douglas, Executive Assistant Director of the FBI’s National Security Branch; and Eric L. Hirschhorn, Under Secretary for Industry and Security at the Commerce Department.
According to the indictment, which was returned under seal by a grand jury in the District of Columbia on Nov. 16, 2011, Ravan was based in Iran and, at various times, acted as an agent of IMI in Iran and an agent of Corezing International, Pte, Ltd, a company based in Singapore that also maintained offices in Hong Kong and China.
On Oct. 10, 2012, Ravan was arrested by authorities in Malaysia in connection with a U.S. provisional arrest warrant. The United States is seeking to extradite him from Malaysia to stand trial in the District of Columbia. If convicted of the charges against him, Ravan faces a potential 20 years in prison for the AECA violation, 10 years in prison for the smuggling charge and five years in prison for the conspiracy charge.
According to the indictment, in late 2006 and early 2007, Ravan attempted to procure for shipment to Iran export-controlled antennas made by a company in Massachusetts, through an intermediary in Iran. The antennas sought by Ravan were cavity-backed spiral antennas suitable for airborne or shipboard direction finding systems or radar warning receiver applications, as well as biconical antennas that are suitable for airborne and shipboard environments, including in several military aircraft.
After this first attempt was unsuccessful, Ravan joined with two co-conspirators at Corezing in Singapore so that Corezing would contact the Massachusetts company and obtain the antennas on behalf of Ravan for shipment to Iran. When Corezing was unable to purchase the export-controlled antennas from the Massachusetts firm, Corezing then contacted another individual in the United States who was ultimately able to obtain these items from the Massachusetts firm by slightly altering the frequency range of the antennas to avoid detection by the company’s export compliance officer.
In March 2007, Ravan and the co-conspirators at Corezing agreed on a purchase price of $86,750 for 50 cavity-backed antennas from the United States and discussed structuring payment from Ravan to his Corezing co-conspirators in a manner that would avoid transactional delays caused by the Iran embargo. Ultimately, between July and September 2007, a total of 50 cavity-backed spiral antennas and five biconical antennas were exported from the United States to Corezing in Singapore and Hong Kong.
According to the indictment, no party to these transactions -- including Ravan or IMI -- ever applied for or received a license from the State Department’s Directorate of Defense Trade Controls to export any of these antennas from the United States to Singapore or Hong Kong.
Two of Ravan’s co-conspirators, Lim Kow Seng (aka Eric Lim) and Hia Soo Gan Benson (aka Benson Hia), principals of Corezing, have been charged in a separate indictment in the District of Columbia in connection with this particular transaction involving the export of military antennas to Singapore and Hong Kong. The two Corezing principals were arrested in Singapore last year and the United States is seeking their extradition.
This investigation was jointly conducted by ICE agents in Boston and Los Angeles; FBI agents and analysts in Minneapolis; and Department of Commerce, Office of Export Enforcement agents and analysts in Chicago and Boston. Substantial assistance was provided by the U.S. Department of Defense, U.S. Customs and Border Protection, the State Department’s Directorate of Defense Trade Controls, and U.S. Department of Justice, Office of International Affairs.
The prosecution is being handled by Assistant U.S. Attorney Anthony Asuncion of the U.S. Attorney’s Office for the District of Columbia and Trial Attorney Richard S. Scott of the Counterespionage Section of the Justice Department’s National Security Division.
An indictment is merely a formal charge that a defendant has committed a violation of criminal law and is not evidence of guilt. Every defendant is presumed innocent until, and unless, proven guilty.
Group of Owned and Affiliated Florida Hospitals Agree to Pay US $10.1 Million to Resolve False Claims Act AllegationsRead the Press Release
Morton Plant Mease Health Care Inc. and its affiliated hospitals (Morton Plant) have agreed to pay $10,169,114 to the federal government to resolve allegations that they violated the False Claims Act by submitting false claims for services rendered to Medicare patients, the Justice Department announced today. Morton Plant owns and operates, or is affiliated with, Morton Plant Hospital, St. Joseph’s Hospital, Morton Plant North Bay Hospital, St. Anthony’s Hospital, Mease Countryside Hospital and Mease Dunedin Hospital. These hospitals are part of the BayCare Health System in Florida’s Pinellas, Hillsborough and Pasco counties.
The settlement announced today resolves allegations that, between July 1, 2006 and July 31, 2008, Morton Plant improperly billed for certain interventional cardiac and vascular procedures as inpatient care when those services should have been billed as less costly outpatient care or as observational status.
“Overbilling the government for routine procedures wastes valuable resources that could be used to care for other patients,” said Stuart F. Delery, Principal Deputy Assistant Attorney General for the Justice Department’s Civil Division. “At a time when we are trying to reduce public spending, it is especially important to ensure that hospitals do not overcharge the government by improperly inflating their billing.”
“We hold medical providers to a high standard in our district, and we will not hesitate to hold them to account when we find evidence of serious misconduct,” said Robert O’Neill, U.S. Attorney for the Middle District of Florida. “This settlement should send a strong message that health care fraud enforcement is a growing priority in our office.”
Today’s settlement resolves a qui tam, or whistleblower, lawsuit filed by Randi Ferrare, a former director of Health Management Services at Morton Plant Hospital. Under the False Claims Act, private citizens, known as relators, can bring suit on behalf of the United States and
share in any recovery. Ms. Ferrare will receive over $1.8 million as her share of the government’s recovery.
“When hospitals attempt to boost profits with improper inpatient admissions, they squander scarce dollars from Medicare and Medicaid,” said Daniel R. Levinson, Inspector General of the Department of Health & Human Services. “Our corporate integrity agreements hold providers accountable for preventing such abuse of government health care programs.”
This resolution is part of the government’s emphasis on combating health care fraud and another step for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced by Attorney General Eric Holder and Kathleen Sebelius, Secretary of the Department of Health and Human Services in May 2009. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover $10.1 billion since January 2009 in cases involving fraud against federal health care programs. The Justice Department’s total recoveries in False Claims Act cases since January 2009 are over $13.8 billion
The United States’ investigation was conducted by the U.S. Attorney’s Office for the Middle District of Florida, the Civil Division of the Department of Justice, the FBI and the Department of Health and Human Services, Office of Inspector General.
The claims settled by this agreement are allegations only; there has been no determination of liability.
The case is docketed as United States ex rel. Randi Ferrare v. Morton Plant Mease Health Care, Inc., No. 08:cv:01689-T-266MSS (M.D. Fl.).
Former Executive at Florida-Based Lender Processing Services Inc. Admits Role in Mortgage-Related Document Fraud SchemeRead the Press Release
WASHINGTON – A former executive of Lender Processing Services Inc. (LPS) – a publicly traded company based in Jacksonville, Fla. – pleaded guilty today, admitting her participation in a six-year scheme to prepare and file more than 1 million fraudulently signed and notarized mortgage-related documents with property recorders’ offices throughout the United States.
The guilty plea of Lorraine Brown, 56, of Alpharetta, Ga., was announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney for the Middle District of Florida Robert E. O’Neill; and Michael Steinbach, Special Agent in Charge of the FBI’s Jacksonville Field Office.
The plea, to conspiracy to commit mail and wire fraud, was entered before U.S. Magistrate Judge Monte C. Richardson in Jacksonville federal court. Brown faces a maximum potential penalty of five years in prison and a $250,000 fine, or twice the gross gain or loss from the crime. The date for sentencing has not yet been set.
“Lorraine Brown participated in a scheme to fabricate mortgage-related documents at the height of the financial crisis,” said Assistant Attorney General Breuer. “She was responsible for more than a million fraudulent documents entering the system, directing company employees to forge and falsify documents relied on by property recorders, title insurers and others. Appropriately, she now faces the prospect of prison time.”
“Homeownership is a huge step for American citizens,” said U.S. Attorney O’Neill. “The process itself is often intimidating and lengthy. Consumers rely heavily on the integrity and due diligence of those serving as representatives throughout this process to secure their investments. When the integrity of this process is compromised, illegally, public confidence is eroded. We must work to assure the public that their investments are sound, worthy, and protected.”
Special Agent in Charge Steinbach stated, “Our country is increasingly faced with more pervasive and sophisticated fraud schemes that have the potential to disrupt entire markets and the economy as a whole. The FBI, with our partners, is committed to addressing these schemes. As these schemes continue to evolve and become more sophisticated, so too will we.”
Brown was the chief executive of DocX LLC, which was involved in the preparation and recordation of mortgage-related documents throughout the country since the 1990s. DocX was acquired by an LPS predecessor company, and was part of LPS’s business when LPS was formed as a stand-alone company in 2008. At that time, DocX was rebranded as “LPS Document Solutions, a Division of LPS.” Brown was the president and senior managing director of LPS Document Solutions, which constituted DocX’s operations.
DocX’s main clients were residential mortgage servicers, which typically undertake certain actions for the owners of mortgage-backed promissory notes. Servicers hired DocX to, among other things, assist in creating and executing mortgage-related documents filed with recorders’ offices. Only specific personnel at DocX were authorized by the clients to sign the documents.
According to plea documents filed today, employees of DocX, at the direction of Brown and others, began forging and falsifying signatures on the mortgage-related documents that they had been hired to prepare and file with property recorders’ offices. Unbeknownst to the clients, Brown directed the authorized signers to allow other DocX employees, who were not authorized signers, to sign the mortgage-related documents and have them notarized as if actually executed by the authorized DocX employee.
Also according to plea documents, Brown implemented these signing practices at DocX to enable DocX and Brown to generate greater profit. Specifically, DocX was able to create, execute and file larger volumes of documents using these signing and notarization practices. To further increase profits, DocX also hired temporary workers to sign as authorized signers. These temporary employees worked for much lower costs and without the quality control represented by Brown to DocX’s clients. Some of these temporary workers were able to sign thousands of mortgage-related instruments a day. Between 2003 and 2009, DocX generated approximately $60 million in gross revenue.
After these documents were falsely signed and fraudulently notarized, Brown authorized DocX employees to file and record them with local county property records offices across the country. Many of these documents – particularly mortgage assignments, lost note affidavits and lost assignment affidavits – were later relied upon in court proceedings, including property foreclosures and federal bankruptcy actions. Brown admitted she understood that property recorders, courts, title insurers and homeowners relied upon the documents as genuine.
Brown also admitted that she and others also took various steps to conceal their actions from clients, LPS corporate headquarters, law enforcement authorities and others. These actions included testing new employees to ensure they could mimic signatures, lying to LPS internal audit personnel during reviews of the operation in 2009, making false exculpatory statements after being confronted by LPS corporate officials about the acts and lying to the FBI during its investigation. LPS closed DocX in early 2010.
This case is being prosecuted by Trial Attorney Ryan Rohlfsen and Assistant Chief Glenn S. Leon of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Mark B. Devereaux of the U.S. Attorney’s Office for the Middle District of Florida. This case is being investigated by the FBI, with assistance from the state of Florida’s Department of Financial Services.
Today’s conviction is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF), which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants, including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
Florida’s Technological Research and Development Authority Pays $15 Million to Resolve False Claims AllegationsRead the Press Release
The Technological Research and Development Authority (TRDA) has agreed to pay $15 million to resolve allegations that it violated the False Claims Act in connection with grants from the National Aeronautics and Space Administration (NASA) and the Economic Development Administration (EDA) of the Department of Commerce, the Justice Department announced today. TRDA, which was created by the Florida legislature as a special district, owns and operates a system of incubator facilities to nurture small businesses by providing low-rent office space and business development assistance.
TRDA and the Melbourne Airport Authority entered into an agreement to use NASA and EDA grant funds to construct an office building at the airport to be used as TRDA’s headquarters and an incubator facility. In a lawsuit filed against TRDA, the United States alleged that construction of the office building was outside the scope of the NASA grants awarded to TRDA and contrary to the terms of the EDA grant awarded jointly to TRDA and the airport authority, which prohibited combining funds from more than one federal agency for the project. Under the terms of a consent judgment executed by TRDA, the special district has agreed to settle these allegations, and to wind down its operations.
Relatedly, the Melbourne International Airport and its governing body, the Melbourne Airport Authority, have agreed to pay the United States $4 million to resolve alleged False Claims Act violations based on the same events described in the government’s lawsuit against TRDA.
“The government encourages economic development through grants such as those awarded here, but entities that expend these funds must ensure that they are doing so in a manner consistent with the terms and conditions of the grants,” said Stuart F. Delery, Principal Deputy Assistant Attorney General for the Civil Division. “As this settlement demonstrates, the Department of Justice will hold accountable those who fail to take reasonable steps to avoid the use of federal funds in a manner contrary to grant requirements.”
“The consent judgment and settlement are testament to the commitment of the NASA Office of Inspector General and the Department of Justice to ensure that public funds are used appropriately,” said NASA Inspector General Paul Martin.
This case was handled by the Justice Department’s Civil Division and NASA’s Office of General Counsel, Acquisition Integrity Program, and Office of Inspector General. The claims settled by the agreements are allegations only; there has been no determination of liability.
The lawsuit against TRDA was filed in the United States District Court for the Southern District of Mississippi and is captioned United States v. Technological Research and Development Authority, No. 1:12-cv-00065-LG-JMR.
Colorado Tax Defier Sentenced to 10 Years in Prison<br /> <br /> for Fraud and Tax ConspiracyRead the Press Release
Curtis L. Morris, age 43, of Elizabeth, Colo., was sentenced Monday in Denver to 120 months in prison followed by 3 years of supervised release by U.S. District Court Judge Robert E. Blackburn, the Justice Department and Internal Revenue Service (IRS) announced. Judge Blackburn also ordered Morris to pay $ $1,916,831 in restitution to the IRS.
Morris was found guilty on April 30, 2012, after a three week jury trial, of three counts of mail fraud, seventeen counts of filing false claims against the United States, and one count of conspiracy to defraud the United States. According to the testimony at trial, Armstrong, Morris and others conspired to file false federal income tax returns claiming large tax refunds based upon fictitious federal income tax withholdings taken from bogus Forms 1099-OID for themselves and others. Codefendant Richard Kellogg Armstrong, age 77, of Prescott, Ariz., was sentenced on Aug. 10, 2012, to 9 years in prison followed by 3 years of supervised release.
Kathryn Keneally, Assistant Attorney General for the Justice Department’s Tax Division, commended the efforts of special agents of IRS – Criminal Investigation Denver Field Office, who investigated the case, and Assistant United States Attorney Kenneth Harmon and Tax Division Trial Attorney Kevin F. Sweeney, who prosecuted the case.