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Monday 19 November 2012
United States Sues Houston-based KBR and Kuwaiti Subcontractor for False Claims on Contracts to House American Troops in IraqRead the Press Release
The United States has filed a civil complaint against Kellogg, Brown & Root Services Inc. (KBR) and First Kuwaiti Trading Company for submitting inflated claims for the delivery and installation of trailers to house troops in Iraq, the Justice Department announced today. KBR is headquartered in Houston. First Kuwaiti, a KBR subcontractor, is based in Kuwait.
KBR is the Army’s primary contractor for logistical support in Iraq. On Dec. 14, 2001, t he Army awarded KBR the LOGCAP III contract, the third generation of contracts under the Army’s Logistics Civil Augmentation Program (LOGCAP) since the program’s inception in the 1980s. LOGCAP III required KBR to provide logistical support in the military theater whenever and wherever it was needed. Support included services such as transportation, dining services, facilities management, maintenance and living accommodations for United States and coalition forces. LOGCAP III was originally awarded to Brown and Root Services, a division of KBR. The United States has paid KBR tens of billions of dollars for logistical support services since awarding the contract.
The government’s complaint arises from the Bed Down Mission, a push to replace the tents used to house soldiers during the early days of the war with trailers, also called living containers. KBR performed many of the services required under LOGCAP III, including the Bed Down Mission, through foreign and domestic subcontractors. According to the complaint, KBR awarded a subcontract to First Kuwaiti on Oct. 16, 2003, to supply, transport and install 2,252 living containers at Camp Anaconda in Iraq for about $80 million. The government alleges that First Kuwaiti was required to complete delivery and installation of the trailers at Camp Anaconda by Dec. 15, 2003. The government further alleges that in July 2004, First Kuwaiti presented two claims to KBR contending that government-caused delays in providing military escorts for convoys into Iraq entitled the company to an increase in the contract price to cover its increased costs. According to the complaint, KBR agreed to pay First Kuwaiti an additional $48.8 million and passed that cost on to the United States.
The government’s complaint alleges that First Kuwaiti knowingly inflated its crane and truck costs, among other items, and misrepresented the cause of its delays. The complaint further alleges that KBR charged these costs to the United States knowing they were improper.
“We depend on companies like KBR to provide valuable noncombat services to our military such as housing and feeding our troops,” said Stuart F. Delery, Principal Deputy Assistant Attorney General for the Civil Division of the Department of Justice. “We will en sure that contractors live up to their promises, and are not permitted to profit at the expense of the taxpayers at home who are supporting our men and women in uniform.”
“When dealing with the government, just like dealing with anyone else, it’s important to give an honest account,” said Jim Lewis, U.S. Attorney for the Central District of Illinois. “The facts alleged in the complaint indicate that KBR and First Kuwaiti did not provide an honest accounting.”
The United States is suing KBR and First Kuwaiti under the False Claims Act. The act holds persons responsible for presenting, or causing to be presented, claims for gov ernment money or property they know are false. The statute entitles the government to recover three times its damages, plus a $5,500 to $11,000 civil penalty for each false claim.
The United States is also suing KBR under the antifraud section of the Contract Disputes Act and for breach of contract. The Contract Disputes Act establishes liability for contractors who certify that they are entitled to money under a contract, if any part of their claim is unsupported due to a misrepresentation of fact or fraud. Under the Contract Disputes Act, the government may recover the false and unsupported part of the claim, plus its costs of review.
This matter was investigated by the Commercial Litigation Branch of the Justice Department’s Civil Division; the U.S. Attorney’s Office for the Central District of Illinois; and the Defense Contract Audit Agency, the Defense Criminal Investigative Service, and the Defense Contract Management Agency of the Department of Defense. The claims asserted against KBR and First Kuwaiti in the United States’ complaint are allegations only and there has been no determination of liability.
The lawsuit was filed in the Central District of Illinois and is captioned United States v. Kellogg, Brown & Root Services, Inc., et al.
The United States has filed a civil complaint against Kellogg, Brown & Root Services Inc. (KBR) and First Kuwaiti Trading Company for submitting inflated claims for the delivery and installation of trailers to house troops in Iraq, the Justice Department announced today. KBR is headquartered in Houston. First Kuwaiti, a KBR subcontractor, is based in Kuwait.
KBR is the Army’s primary contractor for logistical support in Iraq. On Dec. 14, 2001, t he Army awarded KBR the LOGCAP III contract, the third generation of contracts under the Army’s Logistics Civil Augmentation Program (LOGCAP) since the program’s inception in the 1980s. LOGCAP III required KBR to provide logistical support in the military theater whenever and wherever it was needed. Support included services such as transportation, dining services, facilities management, maintenance and living accommodations for United States and coalition forces. LOGCAP III was originally awarded to Brown and Root Services, a division of KBR. The United States has paid KBR tens of billions of dollars for logistical support services since awarding the contract.
San Diego Used Car Wholesaler Sentenced on Tax EvasionRead the Press Release
Mohammad Jafar Nikbakht, aka Freydoon Nikbakht, was sentenced Friday to 15 months in prison for evading his individual income taxes, the Justice Department and Internal Revenue Service (IRS) announced. According to the indictment and other documents filed with the court, Nikbakht ran a series of lucrative auto dealerships in the greater San Diego area and significantly under-reported income earned through these businesses. John A. Houston, U.S. District Court Judge for the Southern District of California, who presided over the sentencing hearing, found that Nikbakht caused over $200,000 in tax loss. Judge Houston ordered Nikbakht to make restitution payments to the IRS for $124,454 of this amount.
Nikbakht had pleaded guilty to tax evasion on March 30, 2011. At his plea hearing, he admitted that during 2007 he earned income through auto dealership operations, including through a dealership called Southern California Car Exchange. Nikbakht further admitted that he willfully failed to file his personal tax return and pay his taxes for 2007, and that he engaged in various acts to conceal income from the IRS. For example, Nikbakht admitted that he operated under another dealer’s license and that he instructed the other dealer to write his income payment checks to the order of a third-party or to “cash”.
Kathryn Keneally, Assistant Attorney General for the Justice Department’s Tax Division, commended special agents of IRS - Criminal Investigation, who prosecuted the case, and Tax Division Trial Attorneys Thomas W. Flynn and Joseph A. Rillotta, who prosecuted the case.
More information about the Tax Division and its enforcement efforts is available at www.usdoj.gov/tax/ .
New Mexico Man Sentenced to Prison for Stolen Identity Refund FraudRead the Press Release
Douglas Kuester, 43, a tax preparer from Silver City, N.M., was sentenced today to 48 months in prison for filing false claims and aggravated identity theft, the Justice Department and the Internal Revenue Service (IRS) announced today. Kuester was also ordered to pay $911,000 in restitution and will be on supervised release for three years after completing his prison sentence.
Kuester had pleaded guilty to the charges in May. He was originally indicted by a federal grand jury on Jan. 18, 2012, and has been in custody since his arrest on January 24.
According to court documents, Kuester used stolen identities to file false tax returns which fraudulently claimed refunds. He would direct the fraudulently obtained refunds to various bank accounts and prepaid debit cards, retaining portions of the proceeds for himself. Kuester also admitted to using an anonymizer to help conceal his filing of the false returns.
Kathryn Keneally, Assistant Attorney General for the Justice Department’s Tax Division, and U.S. Attorney Kenneth J. Gonzales commended special agents of IRS - Criminal Investigation, who investigated the case, and Tax Division Trial Attorneys Jason H. Poole and Gregory P. Bailey, who prosecuted the case with assistance from the New Mexico U.S. Attorney’s Office.
Additional information about the Tax Division and its enforcement efforts may be found at www.justice.gov/tax.
New Mexico Man Sentenced to Prison for StolenRead the Press Release
IDENTITY REFUND FRAUDWASHINGTON – Douglas Kuester, 43, a tax preparer from Silver City, N.M., was sentenced today to 48 months in prison for filing false claims and aggravated identity theft, the Justice Department and the Internal Revenue Service (IRS) announced today. Kuester was also ordered to pay $911,000 in restitution and will be on supervised release for three years after completing his prison sentence.
Kuester had pleaded guilty to the charges in May. He was originally indicted by a federal grand jury on Jan. 18, 2012, and has been in custody since his arrest on January 24.
According to court documents, Kuester used stolen identities to file false tax returns which fraudulently claimed refunds. He would direct the fraudulently obtained refunds to various bank accounts and prepaid debit cards, retaining portions of the proceeds for himself. Kuester also admitted to using an anonymizer to help conceal his filing of the false returns.
Kathryn Keneally, Assistant Attorney General for the Justice Department’s Tax Division, and U.S. Attorney Kenneth J. Gonzales commended special agents of IRS - Criminal Investigation, who investigated the case, and Tax Division Trial Attorneys Jason H. Poole and Gregory P. Bailey, who prosecuted the case with assistance from the New Mexico U.S. Attorney’s Office.Additional information about the Tax Division and its enforcement efforts may be found at www.justice.gov/tax.
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Nearly $1 Million Now Available to Support Partnerships Offering Education and Workforce Training for Incarcerated Individuals Exiting PrisonsRead the Press Release
The Department of Justice and the U.S. Department of Education announced today a new, nearly $1 million grant fund entitled, “Promoting Reentry Success through Continuity of Educational Opportunities” (PRSCEO), that will invest in innovative programs preparing incarcerated individuals to successfully reenter society with the support of education and workforce training. Eligible applicants include adult education providers partnering to connect education in state correctional facilities with local communities.
PRSCEO provides an important opportunity for applicants to create new approaches and improvements for existing rehabilitation services. Every year, more than 700,000 incarcerated individuals leave federal and state prisons. Yet, existing policies and programs too often fail to prepare released prisoners to reenter society, leading 4 of every 10 to commit new crimes or violate terms of their release within 3 years. Failure to support successful rehabilitation costs states more than $50 billion annually.
Based on a cooperative agreement, the one-time grant funding comes from a section of the Second Chance Act, administered by the Bureau of Justice Assistance, a component within the Office of Justice Programs at the Department of Justice.
“Expanding access to education is a proven strategy for reducing recidivism and preventing crime,” said Attorney General Eric Holder. “By working together to support education and training programs for those rejoining our communities, the Departments of Justice and Education are helping to improve outcomes and ensure public safety.”
“Education is key to creating successful pathways toward prosperity and opportunity for children and adults,” said U.S. Secretary of Education Arne Duncan. “Promoting effective policies that offer education and workforce training to low-skill individuals will protect our communities and benefit our economy.”
The announcement was made today during a Department of Education-hosted Correctional Education Summit that gathered outside experts engaged in pursuing developing innovations to improve educational opportunities for youth and adults in secure confinement facilities. In conjunction with the event, the Department of Education released a new Reentry Education Model guidance document. Guidance outlined in the reentry model offers evidence-based improvements to support low-skill individuals leaving prison to successfully transition back into society through education and career advancement.
Suggested improvements include establishing an integrated reentry program that offers and incorporates education services, workforce training, and job search support into intake and prerelease processes and links education to employment services; targeting job support to labor market demands that do not have criminal history restrictions; using technology to increase program access and data to measure performance and outcomes; and conducting thorough program evaluations to further share lessons learned and best practices.
Additional guidance on educational resources for incarcerated individuals reintegrating into society is available through the Department of Education‘s Office of Vocational and Adult Education’s Take Charge of Your Future. The guide was recently updated to offer advice and information that serves a broader population, members of the community corrections population – the nearly five million Americans on parole or probation -- as well as incarcerated individuals.
Applications will be accepted until Dec. 26, 2012. The Department of Education anticipates awarding two to four grants ranging from $200,000 to $400,000. Awards will be made in January 2013.
Former Executives of Stanford Financial Group Entities<br /> Convicted for Roles in Fraud SchemeRead the Press Release
WASHINGTON – A Houston federal jury has convicted Gilbert T. Lopez Jr., the former chief accounting officer of Stanford Financial Group Company, and Mark J. Kuhrt, the former global controller of Stanford Financial Group Global Management, for their roles in helping Robert Allen Stanford perpetrate a fraud scheme involving Stanford International Bank (SIB).
The guilty verdict was announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney Kenneth Magidson of the Southern District of Texas; FBI Assistant Director Kevin Perkins of the Criminal Investigative Division; Assistant Secretary of Labor for the Employee Benefits Security Administration Phyllis C. Borzi; Chief Postal Inspector Guy J. Cottrell; and Special Agent in Charge Lucy Cruz of IRS-Criminal Investigation.
Stanford, who was convicted in a separate trial held earlier this year, illegally used billions of dollars of SIB’s assets to fund his personal business ventures, to live a lavish lifestyle, and for other improper purposes.
The evidence presented at the trial of Lopez and Kuhrt established that they were aware of and tracked Stanford’s misuse of SIB’s assets, kept the misuse hidden from the public and from almost all of Stanford’s other employees, and worked behind the scenes to prevent the misuse from being discovered.
The trial against Lopez and Kuhrt spanned five weeks. After approximately three days of deliberations, the jury found both Lopez, 70, and Kuhrt, 40, both of Houston, guilty of 10 of 11 counts in the indictment. Each defendant was convicted of one count of conspiracy to commit wire fraud and nine counts of wire fraud. Each was found not guilty on one wire fraud count.
Both defendants were immediately remanded into custody.
U.S. District Judge David Hittner, who presided over the trial, has set sentencing for Feb. 14, 2013. At sentencing, Lopez and Kuhrt will each face a maximum of 20 years in prison on each count of conviction.
The investigation was conducted by the FBI, U.S. Postal Inspection Service, IRS-CI and the U.S. Department of Labor, Employee Benefits Security Administration. The case was prosecuted by Deputy Chief Jeffrey Goldberg and Trial Attorney Andrew Warren of the Criminal Division’s Fraud Section, and by Assistant U.S. Attorney Jason Varnado of the Southern District of Texas.
Detroit-Area Nurse Sentenced to 30 Months in Prison for Role in $13.8 Million Home Health Care Fraud SchemeRead the Press Release
WASHINGTON—A Detroit-area registered nurse was sentenced today to serve 30 months in prison for his role in a nearly $13.8 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 Michigan Barbara L. McQuade; Special Agent in Charge Robert D. Foley III of the FBI’s Detroit Field Office; and Special Agent in Charge Lamont Pugh III of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) Chicago Regional Office.
Anthony Parkman, 41, of Southfield, Mich., was sentenced today by U.S. District Judge Gerald E. Rosen in the Eastern District of Michigan. In addition to his prison term, Parkman was sentenced to three years of supervised release and was ordered to pay $450,988 in restitution, jointly and severally with his co-defendants.
Parkman pleaded guilty on June 26, 2012, to one count of conspiracy to commit health care fraud.
According to Parkman’s plea agreement, beginning in approximately December 2008, Parkman, a registered nurse, was paid to sign medical documentation for Physicians Choice Home Health Care LLC, a home health agency that billed and received payments from Medicare for home health care services that were never rendered. Parkman admitted to not seeing or treating the beneficiaries for whom he signed medical documentation and admitted he knew that the documents he signed would be used to support false claims to Medicare. Parkman was paid approximately $150 for each false and fictitious file that he signed.
Parkman was subsequently paid to sign falsified medical documentation and files for First Care Home Health Care LLC, Quantum Home Care Inc. and Moonlite Home Care Inc., which were Detroit-area home health care companies owned by Parkman’s co-conspirators that billed Medicare for services that were never rendered.
The four home health companies for which Parkman worked were paid in total approximately $13.8 million by Medicare. From approximately December 2008 through September 2011, Medicare paid approximately $450,988 to the four home health care companies for fraudulent skilled nursing claims based on falsified files signed by Parkman.
Nine of Parkman’s co-defendants have pleaded guilty and await sentencing. Three co-defendants are fugitives, and six co-defendants await trial.
This case was prosecuted by Trial Attorney Catherine K. Dick of the Criminal Division’s Fraud Section. It 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 Eastern District of Michigan.
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.
Department of Justice, Federal Trade Commission to Hold<br /> Workshop on Patent Assertion Entity ActivitiesRead the Press Release
WASHINGTON – The Department of Justice and the Federal Trade Commission (FTC) announced today that they will hold a joint public workshop on Dec. 10, 2012, to explore the impact of patent assertion entity (PAE) activities on innovation and competition and the implications for antitrust enforcement and policy.
This workshop will examine the economic and legal implications of PAE activity, as distinct from prototypical “non-practicing entity” (NPE) activity, such as developing and transferring technology. By contrast, PAE activities often include purchasing patents from existing owners and seeking to maximize revenues by licensing the intellectual property to (or litigating against) manufacturers who are already using the patented technology.
Supporters of the PAE business model say that it facilitates the transfer of patent rights, rewards inventors and funds ongoing research and development efforts. Critics describe adverse effects on competition and innovation, including increased costs and a lack of technology transfer, ultimately taxing consumers and industry.
The workshop will provide a forum for industry participants, academics, economists, lawyers and other interested parties to discuss the economic and legal analyses of PAE activity. It will consist of a series of panels examining, among other topics, the legal treatment of PAE activity, economic theories concerning PAE activity and industry experiences. Panelists for the workshop will include academics, private attorneys, economists and industry representatives.
T he Department of Justice and the FTC are interested in receiving comments on PAE activities and will accept written submissions from the public before the workshop and until March 10, 2013. Interested parties may submit public comments to: [email protected] . Submitted comments will be made publicly available on the Department of Justice and FTC websites.
The all-day workshop is free and open to the public. Individuals are encouraged to register by Dec. 5, 2012, for the workshop by sending an email to: [email protected] . Please include “RSVP” in the subject line. Seating will be on a first-come, first-served basis.
The workshop will take place at the FTC’s satellite conference center at 601 New Jersey Ave., N.W., Washington, D.C. from 9:00 a.m. to 5:30 p.m. EST on Dec. 10, 2012. Additional participants will be added to the agenda as they are confirmed. Updates to the agenda will be posted on the Department of Justice and FTC websites. The workshop will include the following panels, presentations and confirmed participants:
9:00 a.m. – Opening Remarks : FTC Chairman Jon Leibowitz
SESSION A: FRAMEWORK
9:15 a.m. – Lecture 1: Introduction to PAE Activity
Colleen Chien, Assistant Professor of Law, Santa Clara University School of Law
9:35 a.m. – Lecture 2: Introduction to PAE Licensing
Carl Shapiro, Transamerica Professor of Business Strategy, University of California at Berkeley, Walter A. Hass School of Business
10:05 a.m. – Q & A with Professors Chien and Shapiro
BREAK (10:20 - 10:30 a.m.)
10:30 a.m. – Panel 1: Realities of Licensing and Litigation Practices
- Cynthia Bright, Associate General Counsel, IP Litigation and Public Policy, Hewlett-Packard
- Scott Burt, Vice President & Chief Intellectual Property Counsel, Mosaid Technologies Inc.
- John Desmarais, Partner, Desmarais LLP; Founder, Round Rock Research LLC
- Peter Detkin, Founder and Vice-Chairman, Intellectual Ventures
- Sarah Guichard, Vice President of Patent & Standards Strategy, Research In Motion (RIM)
- Paul Melin, Chief Intellectual Property Officer, Nokia
- Neal Rubin, Vice President Litigation, Cisco Systems Inc.
- Alan Schoenbaum, Senior Vice President, General Counsel and Secretary, Rackspace Hosting
- Mallun Yen, Executive Vice President, RPX Corporation
LUNCH (12:00 - 1:15 p.m.)
1:15 p.m. – Remarks
Stuart Graham, Chief Economist, U.S. Patent & Trademark Office
Session B: Potential Efficiencies and Harms from PAE ACTIVITY: Effects on competition and innovation
1:45 p.m. – Academic Introduction to Potential Efficiencies from PAE Activity
Panel 1: Potential Efficiencies from PAE Activity
- Ron Epstein, CEO, Epicenter IP Group LLC
- Anne Layne-Farrar, Vice President, Antitrust & Competition Economics Practice, Charles River Associates
Academic Introduction to Potential Harms from PAE Activity
Panel 2: Potential Harms from PAE Activity
- Thomas Ewing, Principal Consultant, Avancept LLC
- Robin Feldman, Professor of Law, University of California Hastings College of the Law
- Michael Meurer, Professor of Law and Abraham and Lillian Benton Scholar, Boston University School of Law
- David Schwartz, Associate Professor of Law, Illinois Institute of Technology Chicago-Kent College of Law
Panel 3: Industry Reaction
BREAK (3:45 - 4:00 p.m.)
SESSION C: HOW DOES ANTITRUST APPLY TO THE POTENTIAL EFFICIENCIES AND HARMS GENERATED BY PAE ACTIVITY
4:00 p.m. – Academic Introduction
Phillip Malone, Clinical Professor of Law, Harvard Law School; Clinical Co-Director and Senior Fellow, Berkman Center for Internet & Society, Harvard Law School
4:20 p.m. – Panel Discussion
- Logan Breed, Partner, Hogan Lovells
- Susan Creighton, Partner, Wilson, Sonsini, Goodrich & Rosati PC
- Hanno Kaiser, Partner, Latham & Watkins LLP
- Hill Wellford III, Partner, Bingham McCutchen LLP
5:00 p.m. – Q & A
5:20 p.m. – Closing Remarks: Acting Assistant Attorney General for the Antitrust Division Renata B. Hesse
Directions to the FTC’s Conference Center are available at http://www.ftc.gov/bcp/workshops/transportationguide.shtml.
Reasonable accommodations for people with disabilities are available upon request. Requests should be submitted via email to [email protected] or by calling Samantha Konstandt at 202-326-3348. Requests should be made in advance. Please include a detailed description of the accommodation needed and provide contact information.
Agreement Furthers Cleanup of the Quanta Resources Superfund Site in Edgewater, New JerseyRead the Press Release
Another important step toward cleaning up the Quanta Resources Superfund site in Edgewater, N.J., was announced today by the Department of Justice and the U.S. Environmental Protection Agency (EPA). The agreement with Honeywell International Inc. and 23 other parties, embodied in a consent decree lodged today in federal court, requires the performance of pre-construction project design work and requires Honeywell to carry out the actual cleanup work under the EPA’s oversight. The cleanup of the Quanta Site is expected to result in its redevelopment.
After the design is completed and approved by EPA, the cleanup will proceed at the Quanta Site, which is located adjacent to the Hudson River. The work is expected to take approximately two to three years and cost $78 million.
Currently, soil and ground water at the site are contaminated with arsenic, lead, polycyclic aromatic hydrocarbons and volatile organic compounds resulting from over 100 years of industrial activities in the area. Exposure to these pollutants can have serious health effects, and in some cases, increase the risk of cancer.
“This agreement marks a major milestone toward finally cleaning up the industrial pollution legacy at the Quanta Site,” said Ignacia S. Moreno, Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. “The settlement holds those responsible for the pollution accountable for the cleanup, and brings us closer to the future redevelopment of this site for the benefit of the people of New Jersey.”
“The Superfund program operates on the principle that polluters should pay for the cleanups, rather than passing the costs to taxpayers,” said EPA Regional Administrator Judith A. Enck. “The EPA searches for parties responsible for the contamination and holds them accountable. This agreement is an important part of that process and a step in the right direction.”
The Quanta site, located on River Road at the intersection of Gorge Road in Edgewater, was built as a coal tar facility beginning in the 1880s. In the 1970s, the site’s “tank farm” was used to store waste oil prior to reprocessing. The state of New Jersey closed the facility in 1981 when some storage tanks were found to contain waste oil contaminated with polychlorinated biphenyls. The EPA supervised a series of emergency actions at the site that included safely removing and disposing of millions of gallons of waste oil, sludge and contaminated water from the tanks, and cleaning and dismantling the emptied tanks and piping.
Because of the nature and complexity of the contamination, the EPA divided the investigation and cleanup into two phases – one addressing the contaminated soil and ground water, and the other focused on contamination in the river and sediment. The plan to address the contaminated soil and ground water was finalized in July 2010. The EPA took public comment for 60 days and considered public input before selecting a cleanup plan. This phase of the cleanup is addressed in the consent decree lodged today. A separate study of the Hudson River and sediment contamination will lead to a subsequent cleanup plan for the next phase.
The site contains an estimated 150,000 cubic yards of contaminated soil requiring treatment to protect people that may come into contact with it. Among other steps, the EPA will solidify and stabilize areas of soil contaminated with oily liquid and arsenic by turning them into leak-proof blocks underground. Throughout the cleanup, monitoring, testing and further studies will be conducted to ensure the effectiveness of the remedy.
Aside from Honeywell International Inc., the other parties that have agreed to the consent decree are, for the most part, waste oil generators whose wastes were disposed of at the Quanta site. They include: BASF Corporation; Beazer East Inc.; BFI Waste Systems of New Jersey Inc.; BorgWarner Inc.; Buckeye Pipe Line Co. LP; Chemical Leaman Tank Lines Inc. (now Quality Carriers); Colonial Pipeline Co.; Consolidated Rail Corp.; Exxon Mobil Corp; Ford Motor Company; General Dynamics Land Systems Inc.; Hess Corp.; Miller Brewing Co.; NEAPCO Inc.; Northrup Grumman Systems Corp.; Petroleum Tank Cleaners Inc.; Rome Strip Steel Co. Inc.; Quanta Resources Corp.; Stanley Black & Decker Inc.; Textron Inc.; and United Technologies Corp.
For a full description of the EPA’s cleanup plan and the history of the site, please visit: www.epa.gov/region02/superfund/npl/quanta
Friday 16 November 2012
Two Patient Recruiters Sentenced in Miami for Roles in $50 Million Medicare Fraud SchemeRead the Press Release
WASHINGTON – Two former patient recruiters for Miami-based mental health clinic Biscayne Milieu Health Care Inc. were sentenced today for their participation in a Medicare fraud scheme involving the submission of more than $50 million in fraudulent billings to Medicare, 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.
Anthony Roberts, 45, and Derek Alexander, 39, both of Miami, were each sentenced today by U.S. District Judge Robert N. Scola Jr. in the Southern District of Florida. Roberts was sentenced to serve 87 months in prison and ordered to pay $887,085 in restitution. Alexander was sentenced to serve 42 months in prison and ordered to pay $300,876 in restitution.
Roberts and Alexander were each convicted of one count of conspiracy to commit a health care kickback scheme and a substantive kickback charge on Aug. 24, 2012, after a two-month trial.
Various owners, doctors, managers, therapists, patient brokers and other employees of Biscayne Milieu were charged with various health care fraud, kickback, money laundering and other offenses in two indictments unsealed in September 2011 and June 2012. Biscayne Milieu, its owners and more than 25 of the individual defendants charged in these cases have pleaded guilty or have been convicted at trial. Antonio and Jorge Macli, and Sandra Huarte, the owners and operators of Biscayne Milieu, and Dr. Gary Kushner, its medical director, were each convicted of various offenses at trial and will be sentenced on Dec. 20, 2012.
Evidence at trial demonstrated that the defendants and their co-conspirators caused the submission of millions of dollars in false and fraudulent claims to Medicare through Biscayne Milieu, a Florida corporation headquartered in Miami that operated a purported partial hospitalization program (PHP) in Miami. A PHP is a form of intensive treatment for severe mental illness. Biscayne Milieu purported to provide PHP services for Medicare beneficiaries suffering from mental illnesses. In fact, however, the co-conspirators devised a scheme in which they paid patient recruiters, such as Roberts and Alexander, to refer ineligible Medicare beneficiaries to Biscayne Milieu for purported PHP services that were never provided. Many of the patients admitted to Biscayne Milieu were not eligible for PHP because they were chronic substance abusers, suffered from severe dementia or Alzheimer’s disease and would not benefit from group therapy, or had no mental health diagnosis at all but were seeking fraudulent mental health treatment in order to be declared exempt from certain requirements for their applications for United States citizenship. The evidence at trial showed that Alexander and Roberts solicited and received illegal kickbacks in exchange for sending ineligible patients to Biscayne Milieu.
The criminal case was prosecuted by Assistant U.S. Attorneys Michael Davis and Marlene Rodriguez of the Southern District of Florida, and by Trial Attorney James V. Hayes of the Criminal Division’s Fraud Section. The investigation was led by the FBI with the assistance of HHS-OIG, and was brought by the U.S. Attorney’s Office for the Southern District of Florida in coordination with the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section.
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.
Spokane Police Officer Sentenced for Civil Rights and Obstruction Violations in Connection with <br /> <br /> In-custody Death of Otto ZehmRead the Press Release
A federal judge sentenced Spokane, Wash., Police Officer Karl F. Thompson Jr. to 51 months in prison followed by three years supervised release for civil rights and obstruction violations stemming from his March 18, 2006, beating of an unarmed citizen and an extensive cover-up that followed, the Justice Department announced today. Following a Taser deployment and a rapid series of baton blows to the head, neck and body, the victim, the late Otto Zehm, 36, was hogtied, stopped breathing and was transported to the hospital, where he died two days later. The defendant claimed the beating was justified because he felt threatened by a plastic bottle of soda Zehm was holding.
The evidence at trial established that on the evening of March 18, 2006, Zehm went to a convenience store to buy soda and snacks. Security video showed that the defendant ran into the store, drew his baton and rushed toward Zehm from behind, subsequently delivering two baton blows toward Zehm’s head, knocking him backwards onto the floor. The defendant then stood over Zehm and fired Taser probes into him, also continuing to deliver overhand baton blows, including a final flurry of seven baton strikes in eight seconds, which was captured by the convenience store’s security cameras. The defendant never asked Zehm any questions or even mentioned the ATM. Witnesses testified that Zehm’s last words were: “all I wanted was a Snickers.”
The defendant went to the convenience store after two teenagers reported that a man fitting Zehm’s description had approached a drive-up ATM on foot as they were conducting a transaction, and they felt uncomfortable. After the teenagers pulled away from the ATM, they were unsure whether they had cancelled their transaction. Prior to the defendant’s first strike, dispatchers made clear that the complainants were not sure whether the man at the ATM had taken any of their money. One of the women at the ATM who called 911 that night testified at trial that she was horrified by the defendant’s rapid series of overhand baton blows to Zehm.
The defendant gave his report of the incident on March 22, 2006, after he knew Zehm had died. In his report, the defendant denied hitting Zehm in the head with his baton because that would have constituted deadly force, which he admitted was not justified in this case. However, trial testimony established that the defendant admitted to Spokane Police Officer Timothy Moses on-scene that night that he had struck Zehm in the head and neck with his baton. Witnesses and medical testimony also confirmed that the defendant had delivered baton blows to Zehm’s head and neck.
“The defendant was given considerable power to enforce the law, but instead he abused his authority when he brutally beat an innocent man,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “This prosecution reflects the department’s commitment to prosecuting official misconduct cases, and today’s sentence sends a message that such violent abuse of power will not be tolerated.”
“A large majority of law enforcement officers work courageously every day to make our communities safe,” said Michael Ormsby, U.S. Attorney for the Eastern District of Washington. “Since those in uniform deserve our respect and support, it is vitally important to prosecute those officers who violate their oaths of office and the public trust placed in them. Our community has learned many lessons from this incident, it is now incumbent upon all of us to apply those lessons to reforms within the Police Department.”
“This investigation is emblematic of the FBI's vigorous commitment to the protection of the civil rights that define what it means to be an American," said Assistant Special Agent in Charge Carlos Mojica of the FBI Seattle Division. "While the vast majority of law enforcement officers uphold and obey the law, in those rare instances where serious transgressions occur, the FBI will conduct a comprehensive investigation to preserve and restore the public trust that forms the fabric of our society."
This case was investigated by the FBI’s Spokane Field Office, and was prosecuted by Trial Attorney Victor Boutros of the Justice Department’s Civil Rights Division, and by Assistant U.S. Attorneys Timothy Durkin and Aine Ahmed of the Eastern District of Washington.
Program Director and Therapist from Miami-Area Mental Health Care Corporation Convicted for Participating in $205 Million Medicare Fraud SchemeRead the Press Release
WASHINGTON – A federal jury yesterday convicted a Miami-area program director and a Miami-area therapist for their participation in a Medicare fraud scheme involving more than $205 million in fraudulent billings by mental health care corporation American Therapeutic Corporation (ATC), 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.
Program director Lydia Ward, 47, and therapist Nichole Eckert, 35, were each found guilty of one count of conspiracy to commit health care fraud.
The defendants were charged in an indictment returned on Feb. 8, 2011. ATC, the management company associated with ATC and 20 individuals, including the ATC owners, have all previously pleaded guilty or have been convicted at trial.
Evidence at trial demonstrated that the defendants and their co-conspirators caused the submission of false and fraudulent claims to Medicare through ATC, a Florida corporation headquartered in Miami that operated purported partial hospitalization programs (PHPs) in seven different locations throughout South Florida and Orlando. A PHP is a form of intensive treatment for severe mental illness. The defendants and their co-conspirators also used a related company, American Sleep Institute (ASI), to submit fraudulent Medicare claims.
ATC billed Medicare for hundreds of millions of dollars in false and fictitious services, for thousands of patients who were not qualified, based on fraudulent documents created by Ward, Eckert and others.
Throughout the course of the fraud conspiracy, tens of millions of dollars in kickbacks were paid in exchange for Medicare beneficiaries, who did not qualify for PHP services, to attend treatment programs that were not legitimate PHP programs. ATC and ASI billed Medicare for more than $205 million in services to patients who did not need the services and to whom the appropriate services were not provided. According to the evidence, Ward, Eckert, and co-conspirators personally altered and caused the alteration of patient files and therapist notes for the purpose of making it appear, falsely, that patients being treated by ATC were qualified for PHP treatments and that the treatments provided were legitimate PHP treatments.Evidence further revealed that doctors at ATC signed patient files without reading them or seeing the patients. Included in these false and fraudulent submissions to Medicare were claims for patients in neuro-vegetative states, along with patients who were in the late stages of diseases causing permanent cognitive memory loss and patients who were suffering from substance abuse addiction without a severe mental illness – all of whom were ineligible for PHP treatment.
Ward and Eckert were remanded into custody.
ATC executives Lawrence Duran, Marianella Valera, Judith Negron and Margarita Acevado were sentenced to 50 years, 35 years, 35 years and 91 months in prison, respectively, for their roles in the fraud scheme. Sentencing for Ward and Eckert is scheduled for Jan. 25, 2013. The maximum penalty for each conspiracy count is 10 years in prison.
A mistrial was declared today against ATC patient marketer Hilario Morris, who was charged with one count of conspiracy to commit health care fraud. Previously, Morris had been convicted of one count of conspiracy to pay health care kickbacks.
The criminal case is being prosecuted by Trial Attorneys Jennifer L. Saulino and Laura Cordova of the Criminal Division’s Fraud Section. A related civil action is being handled by Vanessa I. Reed and Carolyn B. Tapie of the Civil Division and Assistant U.S. Attorney Ted L. Radway of the Southern District of Florida. The 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.
Ohio Automobile Parts Supplier Executive Pleads Guilty <br /> in Price-Fixing and Bid-Rigging ConspiracyRead the Press Release
WASHINGTON – An executive at the Ohio subsidiary of a Japanese automotive supplier pleaded guilty today for his role in a conspiracy to fix prices and rig bids of anti-vibration rubber parts sold in the United States and elsewhere, the Department of Justice announced. This is the first charge in the department’s ongoing investigation into price fixing and bid rigging in the automobile anti-vibration rubber parts industry, which is one of the department’s ongoing investigations into anticompetitive conduct in the automotive parts industry.According to a one-count felony charge filed on Oct. 30, 2012, in the U.S. District Court for the Northern District of Ohio, in Toledo, Hiroshi Yoshida, a Japanese national employed at the Ohio-based U.S. subsidiary of an automobile anti-vibration rubber supplier headquartered in Saitama, Japan, participated in a conspiracy to rig bids for, and to fix prices of, automobile anti-vibration rubber parts sold in the United States and elsewhere. According to the charge, Yoshida’s involvement in the conspiracy began at least as early as October 2005 and continued until at least June 2011. The department said Yoshida and his co-conspirators carried out the conspiracy by agreeing, in meetings and discussions, to allocate the supply of certain automobile anti-vibration rubber parts, to exchange prices, to submit noncompetitive bids and to sell the parts at collusive and noncompetitive prices in the United States and elsewhere.
According to the plea agreement, Yoshida has agreed to serve 12 months and one day in a U.S. prison, to pay a $20,000 criminal fine and to cooperate with the department’s ongoing investigation. Yoshida’s sentencing is scheduled to take place on Dec. 20, 2012.
Anti-vibration rubber parts are comprised primarily of rubber and metal, and are installed in automobiles to reduce engine and road vibration. Anti-vibration rubber parts are installed in suspension systems and engine mounts, as well as other parts of an automobile.
“This is the first charge in the division’s investigation into anticompetitive conduct involving automotive parts used to reduce engine and road vibration,” said Joseph Wayland, Acting Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. “The aim of this multi-year conspiracy was to do away with competition among suppliers, through bid rigging and price fixing, in order to maximize profits.”
“We are pleased with the guilty plea entered today by Mr. Yoshida and his acceptance of responsibility, as the anti-vibration rubber parts industry is a critical component of the automobile manufacturing process,” said Stephen D. Anthony, Special Agent in Charge of the FBI Cleveland Division. “The Cleveland FBI is committed to working with our Department of Justice partners in the Antitrust Division to keep this industry and other critical industries competitive by aggressively pursuing any conspiracy in Northern Ohio that undermines free competition and our economy.”
Including Yoshida, nine companies and 12 executives have pleaded guilty or agreed to plead guilty in the department’s ongoing investigation into price fixing and bid rigging in the auto parts industry. Furukawa Electric Co. Ltd., DENSO Corp., Yazaki Corp., G.S. Electech Inc., Fujikura Ltd., Autoliv Inc. and TRW Deutschland Holding GmbH pleaded guilty and were sentenced to pay a total of more than $790 million in criminal fines. Nippon Seiki Co. Ltd. and Tokai Rika Co. Ltd. have agreed to plead guilty and await arraignment and sentencing. Additionally, Junichi Funo, Hirotsugu Nagata, Tetsuya Ukai, Tsuneaki Hanamura, Ryoki Kawai, Shigeru Ogawa, Hisamitsu Takada, Norihiro Imai, Kazuhiko Kashimoto, Toshio Sudo and Makoto Hattori have pleaded guilty and been sentenced to pay criminal fines and to serve jail sentences ranging from a year and a day to two years each.
Yoshida is charged with violating the Sherman Act, which carries a maximum sentence of 10 years in prison and a $1 million criminal fine for individuals. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.
Today’s guilty plea arose from an ongoing federal antitrust investigation into price fixing, bid rigging and other anticompetitive conduct in the automobile anti-vibration rubber parts industry, which is being conducted by the Antitrust Division’s Chicago Field Office and the FBI’s Cleveland Field Office. Anyone with information concerning the subject of this investigation should contact the Antitrust Division's Chicago Field Office at 312-353-7530 or visit www.justice.gov/atr/contact/newcase.htm.Justice Department and Equal Employment Opportunity Commission Settle Pay Discrimination Lawsuits Against Two Texas State AgenciesRead the Press Release
The Justice Department and the Equal Employment Opportunity Commission (EEOC) announced today that they have reached a settlement with the Texas Department of Agriculture (TDA) and the Texas General Land Office (GLO) to resolve allegations that both state agencies were liable for pay discrimination on the basis of sex, in violation of Title VII of the Civil Rights Act of 1964 and the Equal Pay Act of 1963.
The Justice Department’s complaint, filed in the U.S. District Court for the Western District of Texas, alleges that the TDA and GLO, as successors in interest to the now-defunct Texas Department of Rural Affairs (TDRA), violated Title VII when the TDRA discriminated against three female TDRA program specialists on the basis of their sex by paying them significantly less than their male counterparts for performing essentially the same work. The complaint further alleges that when the TDRA ultimately acted to address the salary disparities between its male and female employees who were doing comparable work, it increased the women’s salaries but did not raise them to the same level as those of their male counterparts. According to the department’s complaint, TDRA also did not retroactively compensate the women for the prior undervaluing of their salaries. The EEOC’s complaint contends that these same actions by the TDRA violated the Equal Pay Act.
The Justice Department’s complaint also alleges that the three women were subjected to retaliation when they were terminated from their employment as a consequence of their opposition to the pay disparities.
“This settlement demonstrates the Civil Rights Division’s commitment to the bedrock principle of equal pay for equal work,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “We will continue to vigilantly enforce the nation’s employment discrimination laws to help to close the persistent wage gap in our country. This case is but one example of our critical collaboration with the EEOC and a demonstration of the strong commitment we share to eradicating pay disparities based on sex.”
Under the terms of the settlement agreement, which resolves both the Justice Department and EEOC complaints, the TDA and GLO will pay a total of $175,000 in back pay to the three female employees. Under the settlement, the TDA and GLO agree to maintain employment policies, practices and procedures that comply with all federal laws and regulations, including Title VII and the Equal Pay Act, and will educate and train their employees on these laws and provisions. Finally, as part of the settlement, the TDA and GLO provided their anti-discrimination policies to the Justice Department and EEOC for review and comment.
“This resolution reflects the EEOC's commitment to work collaboratively with its governmental partner to enforce laws that require equal pay for men and women performing the same jobs,” said EEOC General Counsel David Lopez. “This case highlights the fact that there is still much work to be done in the area of equal pay, 49 years after the Equal Pay Act was enacted.”
Enforcement of federal employment discrimination laws is a top priority for the Justice Department and the EEOC. Additional information about Title VII is available on the Civil Rights Division’s website at www.justice.gov/crt . Additional information about the Equal Pay Act is available on the EEOC’s website at www.eeoc.gov .
Justice Department Files Lawsuit Against Ebay Inc. <br /> over Agreement Not to Hire Intuit Inc. EmployeesRead the Press Release
WASHINGTON – The Department of Justice filed a civil antitrust lawsuit today against eBay Inc., alleging that it violated antitrust laws when it entered into an agreement not to recruit or hire Intuit Inc.’s employees. The department said that the agreement eliminated a significant form of competition to the detriment of affected employees who were likely deprived of access to better job opportunities and salaries.The department’s Antitrust Division worked closely with the Office of the Attorney General of the State of California, which conducted its own investigation and filed a similar lawsuit today.
The department filed its lawsuit in U.S. District Court in the Northern District of California, in San Jose. The lawsuit seeks to prevent eBay from adhering to or enforcing the agreement and from entering into any similar agreements with any other companies. Intuit is already subject to a settlement prohibiting it from entering into such agreements as part of an earlier case with the department.
The department alleges the agreement, which was enforced at the highest levels of each company, barred either firm from soliciting each other’s employees, and for over a year barred at least eBay from hiring any employees from Intuit at all. In court papers, the department alleges that Meg Whitman, then eBay’s CEO, and Scott Cook, Intuit’s founder and executive committee chair, were intimately involved in forming, monitoring and enforcing the anticompetitive agreement. Cook was serving as a member of eBay’s board of directors at the same time he was making complaints about eBay’s recruiting of Intuit employees.
“eBay’s agreement with Intuit hurt employees by lowering the salaries and benefits they might have received and deprived them of better job opportunities at the other company,” said Joseph Wayland, Acting Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. “The Antitrust Division has consistently taken the position that these kinds of agreements are per se unlawful under the antitrust laws.”
According to the complaint, beginning no later than 2006, and lasting at least until 2009, eBay and Intuit entered an illegal agreement that restricted their ability to actively recruit employees from the other company, and for some period of time even restricted at least eBay from hiring any employees at Intuit. In 2007, the pact evolved into an agreement that eBay would not recruit Intuit’s employees. eBay’s recruiting personnel were instructed to not pursue potential applications that came from Intuit and to throw away such resumes, the department said.
As stated in the department’s complaint, eBay and Intuit are direct competitors for employees, including specialized computer engineers and scientists covered by the agreements at issue in the case.
The department said it was not necessary to name Intuit in today’s complaint because the company had previously been named in the division’s September 2010 lawsuit and settlement, and the relief the department obtained in the previous settlement is sufficient to prevent Intuit from entering into these types of agreements. In September 2010, the Antitrust Division filed a lawsuit against six high technology companies–Adobe Systems Inc., Apple Inc., Google Inc., Intel Corp., Intuit Inc. and Pixar–over a series of bilateral agreements not to solicit each other’s employees. All six companies entered into a settlement which prohibited them from entering agreements to refrain from, or pressure others to refrain from, soliciting, recruiting, or otherwise competing for another firm’s employees. The Antitrust Division also filed a lawsuit against Lucasfilm in December 2010 for entering into a similar agreement with Pixar, and Lucasfilm entered into a similar settlement. The eBay case grew out of the same investigation.eBay is a Delaware corporation with its principal place of business in San Jose. In 2011, eBay had revenues of $11.7 billion.
Intuit is a Delaware corporation with its principal place of business in Mountain View, Calif. In 2011, Intuit had revenues of $3.85 billion.Former Police of Puerto Rico Officer Sentenced to 181 Months in Prison for Providing Armed Security for Drug TransactionRead the Press Release
WASHINGTON – A former Police of Puerto Rico officer was sentenced today to 181 months in prison for her role in providing armed security for a drug transaction, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney Rosa E. Rodriguez-Velez of the District of Puerto Rico, and Special Agent in Charge Joseph S. Campbell of the FBI’s San Juan Field Office.
Yamil Navedo Ramirez, 39, was sentenced today by U.S. District Judge Juan M. Perez-Gimenez in the District of Puerto Rico.
In May 2012, a federal jury in San Juan found Navedo Ramirez guilty of one count of attempting to possess with the intent to distribute more than five kilograms of cocaine and possession of a firearm in furtherance of a drug transaction. The jury acquitted her of one count of conspiracy to possess with the intent to distribute more than five kilograms of cocaine.
According to the evidence presented in court, Navedo Ramirez provided security on April 14, 2010, for what she believed was an illegal cocaine deal. In fact, the purported drug transaction was part of an undercover FBI operation. On that day, Navedo Ramirez provided armed protection for the deal and escorted the buyer in and out of the transaction.
Navedo Ramirez was charged in a superseding indictment unsealed on Oct. 28, 2010, along with 89 law enforcement officers in Puerto Rico and 44 other individuals charged as part of the FBI undercover operation known as Guard Shack.
In return for the security she provided, Navedo Ramirez received a cash payment of $2,000. Judge Perez Gimenez ordered the defendant to forfeit the $2,000 she received in exchange for providing security for the drug transaction.
The case was prosecuted by Trial Attorneys Kevin Driscoll and Monique Abrishami of the Criminal Division’s Public Integrity Section. The case was investigated by the FBI. The U.S. Attorney’s Office for the District of Puerto Rico also participated in the investigation and prosecution of this case.
Federal Court Shuts Down South Florida Tax PreparerRead the Press Release
A federal court in Ft. Lauderdale, Fla., has permanently barred a Broward County man from preparing federal tax returns for others, the Justice Department announced today. Jayvon Copeland, who last month pleaded guilty in a criminal case to conspiracy to defraud the United States, consented to the injunction order without admitting the allegations in the civil complaint filed against him last April.
According to the civil complaint, filed in the U.S. District for the Southern District of Florida, Copeland used stolen identities to prepare and file fraudulent tax returns claiming tax refunds that Copeland kept for himself. A September 2012 report by the U.S. Treasury Inspector General for Tax Administration said that Florida has the highest rate of stolen identity tax refund fraud in the United States.
The complaint also alleged that Copeland fraudulently boosted tax refunds for his return-preparation customers by making false claims for the first-time homebuyer credit, reporting phony business expenses, claiming false education expenses, and fabricating income to inflate customers’ earned-income tax credits.
The court’s injunction order also shuts down two tax-return preparation businesses, Taxologist Inc. and Taxes in Miami Gardens LLC.
The court previously barred two of Copeland’s co-defendants in the civil injunction suit, Kisha Andrews and Brandon Johnson, from preparing federal tax returns. The injunction suit is still pending against the other two co-defendants, Aundrea Luc and James Daniels.
Copeland is awaiting sentencing for his criminal conspiracy guilty plea.
In the past decade, the Justice Department’s Tax Division has obtained injunctions against hundreds of tax-fraud promoters and unscrupulous tax return preparers. Information about these cases is available on the Justice Department web site.
Related Documents:
United States v. Jayvon Copeland, et al.
Stipulated Order of Permanent Injunction Against Jayvon Copeland; Taxologist, Inc. and Taxes in Miami Gardens LLC (PDF)
Federal Court Permanently Bars Michigan Lawyer from Promoting Alleged Tax Fraud SchemeRead the Press Release
A federal court has permanently barred a Michigan lawyer, Tammy Daniels of Farmington Hills, from promoting an alleged tax fraud scheme, the Justice Department announced today. The civil injunction order, to which Daniels consented without admitting the allegations against her, was signed by Judge Paul D. Borman of the U.S. District Court for the Eastern District of Michigan. In August the court enjoined Daniels’s co-defendants, Damian and Holly Jackson, from preparing federal tax returns for others and promoting the scheme.
The government complaint in the civil injunction lawsuit alleged that the Jacksons and their business, Diamond & Associates Enterprises LLC, operated Diamond Tax Services and promoted a scheme involving the preparation of fraudulent federal income tax returns for customers seeking large tax refunds based on a frivolous tax-defier theory called “redemption” or “commercial redemption.” The suit alleged that tax returns prepared for at least 182 customers under the auspices of Diamond Tax Services sought over $29 million in fraudulent refunds by falsely reporting large amounts of tax withheld on bogus Internal Revenue Service (IRS) 1099 Forms.
While most such frivolous refund claims are intercepted by the IRS before refunds are issued, the complaint alleged that the defendants’ scheme caused the IRS to issue at least $1.6 million in erroneous refunds to defendants’ customers. The suit further alleged that tax returns that Damian and Holly Jackson prepared requested the IRS to issue the refunds to their customers “C/O Attorney Tammy Daniels,” that Daniels negotiated the refund check if one was issued, and that the Jacksons and Daniels took a 10 percent cut of any refund issued by the IRS.
Return-preparer fraud and false claims for refund using fake information returns, such as Form 1099, are among the IRS’s “Dirty Dozen” tax scams for 2012.
In the past decade the Justice Department’s Tax Division has obtained injunctions against hundreds of tax-return preparers and tax-fraud promoters. Information about these cases is available on the Justice Department website .
Related Documents:
United States v. Damian Jackson, et al
Order of Permanent Injunction Against Tammy Daniels
Al-Qaeda Operative Sentenced to Life in Prison in One of the Most <br /> Serious Terrorist Plots Against the United States since 9/11Read the Press Release
WASHINGTON – Earlier today, Adis Medunjanin, age 34, a Queens, N.Y., resident who joined al-Qaeda, then plotted and attempted to commit suicide terrorist attacks, was sentenced in the Eastern District of New York to life in prison for multiple federal terrorism offenses.
The defendant and his accomplices came within days of executing a plot to conduct coordinated suicide bombings in the New York City subway system in September 2009, as directed by senior al-Qaeda leaders in Pakistan. When the plot was foiled, the defendant attempted to commit a terrorist attack by crashing his car on the Whitestone Expressway in an effort to kill himself and others.
The sentence was announced by Loretta E. Lynch, U.S. Attorney for the Eastern District of New York, and Lisa Monaco, Assistant Attorney General for National Security.
The government’s evidence at trial in this and related cases established that in 2008, Medunjanin and his co-plotters, Najibullah Zazi and Zarein Ahmedzay, agreed to travel to Afghanistan to join the Taliban and kill United States military personnel abroad. They arrived in Peshawar, Pakistan, in late August 2008, but Medunjanin and Ahmedzay were turned back at the Afghanistan border. Within days, Medunjanin, Zazi and Ahmedzay met with an al-Qaeda facilitator in Peshawar and agreed to travel to Waziristan for terrorist training. There, they met with al-Qaeda leaders Saleh al-Somali, then the head of al-Qaeda external operations, and Rashid Rauf, a high-ranking al-Qaeda operative, who explained that the three would be more useful to al-Qaeda and the jihad by returning to New York and conducting terrorist attacks.
In Waziristan, Medunjanin, Zazi and Ahmedzay received al-Qaeda training on how to use various types of high-powered weapons, including the AK-47, PK machine gun, and rocket-propelled grenade launcher. During the training, al-Qaeda leaders, including Adnan El Shukrijumah, continued to encourage Medunjanin and his fellow plotters to return to the United States to conduct a “martyrdom” operation, and emphasized the need to hit well-known targets and maximize the number of casualties. Medunjanin, Zazi and Ahmedzay agreed and discussed the timing of the attacks and possible target locations in Manhattan, including the subway system, Grand Central Terminal, the New York Stock Exchange, Times Square and movie theaters.
Upon their return to the United States, Medunjanin, Zazi and Ahmedzay met and agreed to carry out suicide bombings during the Muslim holiday of Ramadan, which fell in late August and September 2009. Zazi agreed to prepare the explosives, and all three agreed to conduct coordinated suicide bombings. In July and August 2009, Zazi purchased large quantities of the component chemicals necessary to produce the explosive TATP (Triacetone Triperoxide) and twice checked into a hotel room near Denver to mix the chemicals. Federal investigators later found bomb-making residue in the hotel room.
On Sept. 8, 2009, Zazi drove from Denver to New York, carrying operational detonator explosives and other materials necessary to build the suicide bombs. However, shortly after arriving in New York, he learned that law enforcement was closing in on the plotters. In an unsuccessful effort to avoid detection, the men discarded the explosives and other bomb-making materials, and Zazi traveled back to Denver, where he was arrested on Sept. 19, 2009.
On Jan. 7, 2010, law enforcement agents executed a search warrant at Medunjanin’s residence. Shortly thereafter, Medunjanin left his apartment and attempted to turn his car into a weapon of terror by crashing it into another car at high speed on the Whitestone Expressway. Moments before impact, Medunjanin called 9-1-1, identified himself, and left his message of martyrdom, shouting the al-Qaeda slogan: “We love death more than you love your life.”
On May 1, 2012, a jury convicted Medunjanin of:• conspiring to use weapons of mass destruction,
• conspiring to commit murder of U.S. military personnel abroad,
• providing and conspiring to provide material support to al-Qaeda,
• receiving military training from al-Qaeda,
• conspiring and attempting to commit an act of terrorism transcending national boundaries, and
• using explosives in relation to these offenses.
To date, seven defendants, including Medunjanin, Zazi and Ahmedzay, have been convicted in connection with the al-Qaeda New York City bombing plot and related charges.
“Adis Medunjanin sought martyrdom for himself and death for innocent New Yorkers as part of al-Qaeda’s plan to spread terror within our shores. Instead, he will now spend the rest of his life where he belongs, behind bars,” stated U.S. Attorney Lynch. “Justice demanded a sentence of life for this al-Qaeda operative, who was dedicated to mass murder and destruction in the New York City subways. Scores of innocent New Yorkers would have been killed or maimed had Medunjanin succeeded in his plot. The combined efforts of dedicated law enforcement stood as a bulwark against al-Qaeda’s reach.” Ms. Lynch expressed her gratitude and appreciation to the FBI Joint Terrorism Task Force in New York and each of the federal, state and local law enforcement personnel who took part in the investigation, as well as to the law enforcement authorities in the United Kingdom and Norwaywho assisted with the case.
“Adis Medunjanin was today held accountable for his role in one of the most serious terrorist plots against the homeland since 9/11. Were it not for the combined efforts of the law enforcement and intelligence communities, the suicide bomb attacks that he and others planned would have been devastating,” said Assistant Attorney General Monaco. “I thank the many agents, analysts and prosecutors who helped bring about today’s result.”
The government’s case was prosecuted by Assistant U.S. Attorneys David Bitkower, James P. Loonam and Berit W. Berger of the U.S. Attorney’s Office for the Eastern District of New York, and Jeffrey H. Knox, formerly of the U.S. Attorney’s Office, with assistance provided by the Counterterrorism Section of the Justice Department’s National Security Division.
Thursday 15 November 2012
Justice Department Settles Civil Contempt Claim <br /> Against Exelon CorporationRead the Press Release
WASHINGTON — Exelon Corporation has agreed to pay $400,000 as part of a civil settlement with the Department of Justice that resolves Exelon’s alleged violations of two court orders entered in connection with Exelon’s acquisition of Constellation Energy Group.
The Department of Justice’s Antitrust Division yesterday filed a petition in the U.S. District Court for the District of Columbia asking it to find Exelon in civil contempt of a consent decree and a related order. At the same time, the department filed a settlement agreement and order, subject to court approval, that would resolve the department’s concerns. The payment to the United States represents disgorgement of profits gained through Exelon’s alleged violations and reimbursement to the department for the cost of its investigation.
“In order for the Antitrust Division’s settlements to be effective in preserving competition and protecting consumers, companies must fully adhere to the terms of their court-ordered agreements,” said Joseph F. Wayland, Acting Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. “The Antitrust Division will vigorously prosecute those who enter into agreements with the department and do not comply with their legal obligations.”
Under the consent decree filed in December 2011, Exelon was required to sell three electricity plants in Maryland—Brandon Shores and H.A. Wagner in Anne Arundel County, Md. and C.P. Crane in Baltimore County, Md.— in order to proceed with its $7.9 billion merger with Constellation. Exelon was required to abide by a hold separate stipulation and order that placed restrictions on Exelon’s conduct between the time Exelon closed its acquisition of Constellation and the time it completed the plant divestitures required by the consent decree. The hold separate required Exelon, during this period, to bid certain of its electricity generating plants at or below cost to ensure that Exelon would not be able to raise market prices for electricity. In consenting to entry of the hold separate and the consent decree, Exelon specifically agreed to “take all steps necessary to comply” with its legal obligations.
According to the petition filed by the department, Exelon failed to fulfill its obligations under the two court orders. The petition alleges that Exelon submitted certain offers for sales of electricity during this period at above-cost prices and that Exelon failed to take all necessary steps to ensure that its offers would comply with the hold separate’s requirements. Exelon claims, and the United States does not dispute, that Exelon’s above-cost offers were inadvertent.
In determining the disgorgement amount, the United States took into account that Exelon, upon recognizing that it had made above-cost offers, took appropriate remedial steps, including notifying the United States and market regulators (i.e. the Federal Energy Regulatory Commission and the Maryland Public Service Commission, both of which also approved Exelon’s acquisition of Constellation), implementing measures to ensure that no additional above cost-offers occurred, and agreeing with the market regulators to return any incremental revenues Exelon earned from, and to redress any market harm caused by, its above-cost offers. The $400,000 payment is separate and above the payments Exelon is making to the market regulators.
Exelon is incorporated in Pennsylvania and has its headquarters in Chicago. Exelon owns the PECO utility of Philadelphia and the Commonwealth Edison utility of Chicago. With its acquisition of Constellation Energy Group Inc., Exelon now owns the BG&E utility of Baltimore. Exelon had $18.9 billion of revenues in 2011.
Justice Department Requires Divestitures in Star Atlantic’s <br /> Acquisition of VeoliaRead the Press Release
WASHINGTON — The Department of Justice announced today that it has reached a settlement that will require Star Atlantic Waste Holdings L.P. and Veolia ES Solid Waste Inc. to divest commercial waste collection or disposal assets in northern New Jersey, central Georgia, and the Macon, Ga., metropolitan area in order to proceed with Star Atlantic’s proposed $1.9 billion acquisition of Veolia. The department said that the transaction, as originally proposed, would have resulted in higher prices for the collection of municipal solid waste from commercial businesses or the disposal of waste in these areas.
The Department of Justice’s Antitrust Division filed a civil antitrust lawsuit today in U.S. District Court in Washington, D.C., to block the proposed transaction. At the same time, the department filed a proposed settlement that, if approved by the court, will resolve the lawsuit and the competitive concerns.
“Without the divestitures required by the department, consumers in northern New Jersey, central Georgia and the Macon metropolitan area would have been harmed by a reduction in competition for commercial solid waste collection or disposal,” said Joseph Wayland, Acting Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. “This remedy ensures that the benefits of competition–namely, lower prices and better service–will be preserved in these areas.”
According to the complaint, the transaction, as originally proposed, would have substantially lessened competition in commercial waste collection or disposal services in the geographic areas of northern New Jersey, central Georgia and Macon. In each of these areas, Star Atlantic and Veolia are two of only a few significant firms providing commercial waste collection or municipal solid waste disposal services. The acquisition would have eliminated a major competitor in each of these areas and resulted in higher prices and poorer service for consumers.
Under the terms of the proposed settlement, Star Atlantic and Veolia will divest three specified transfer stations in northern New Jersey; a landfill and two transfer stations in central Georgia; and three commercial waste collection routes in the Macon metropolitan area. Each asset to be divested is currently owned by Veolia. To maximize the potential operational effectiveness of each purchaser of the divestiture assets, Star Atlantic and Veolia must divest to a single buyer the three transfer stations in northern New Jersey. Likewise, they must divest to a single purchaser the designated Georgia transfer stations and landfill and the specified commercial waste routes in the Macon metropolitan area.
Star Atlantic is a privately owned Delaware limited partnership with its headquarters in New York City. Star Atlantic provides small container commercial waste collection and/or municipal solid waste disposal services in Alabama, Florida, Georgia, Mississippi, North Carolina, South Carolina and Tennessee through its subsidiary, Advanced Disposal Services Inc., and in Massachusetts, Vermont, New York, New Jersey, Pennsylvania, Maryland and West Virginia through its subsidiary, Interstate Waste Services Inc. Star Atlantic is one of the nation’s largest municipal solid waste hauling and disposal companies by revenue, and had estimated total revenues of $563 million in 2011.
Veolia Environnement S.A. is a French corporation headquartered in Paris. Its wholly owned U.S. subsidiary, Veolia ES Solid Waste Inc., provides small container commercial waste collection and/or municipal solid waste disposal services in Florida, Georgia, Alabama, Kentucky, Missouri, Illinois, Minnesota, Wisconsin, Michigan, Indiana, Pennsylvania and New Jersey. Veolia ES Solid Waste Inc. is also one of the nation’s largest solid waste hauling and disposal companies by revenue, and had estimated total revenues of $818 million in 2011.
As required by the Tunney Act, the proposed settlement, along with a competitive impact statement, will be published in the Federal Register. Any person may submit written comments concerning the proposed settlement during a 60-day comment period to Maribeth Petrizzi, Chief, Litigation II Section, Antitrust Division, U.S. Department of Justice, 450 Fifth Street, N.W., Suite 8700, Washington, D.C. 20530. At the conclusion of the 60-day comment period, the court may enter the final judgment upon a finding that it serves the public interest.
Justice Department Announces Sweep of Criminal and Civil Business Opportunity CasesRead the Press Release
The Justice Department announced today the filing of several criminal and civil business opportunity fraud cases, initiated as part of a joint sweep with the Federal Trade Commission and several states. Business opportunity fraud schemes take advantage of people looking for work by luring them in with false promises of big profits and leaving them worse off than they started. The cases include criminal charges against 14 individuals and civil cases against three businesses. The criminal and civil cases announced today are part of a series of investigations named “Operation Lost Opportunity.”
The Justice Department’s cases are part of the efforts of the President’s Financial Fraud Enforcement Task Force and are being handled by the Civil Division’s Consumer Protection Branch, in coordination with the U.S. Attorney’s Offices for the Central District of California, the Southern District of California, the Southern District of Florida, the District of Oregon, the Western District of North Carolina, the Western District of Pennsylvania and the Southern District of Texas.
Seven different business opportunity schemes are the targets of the Justice Department’s actions. According to the charging documents, the criminal schemes involved placement of advertisements online and in newspapers that touted the profits that could be earned by purchasing a business opportunity to own and operate vending machines or display racks. The United States alleges that the schemes operated as follows: Salespeople explained that consumers who purchased the opportunity would earn substantial income from the equipment. According to the sales pitch, the vending machines or display racks would be placed in store locations in the purchaser’s hometown and would offer candy, refreshments or jewelry, depending on which opportunity was being offered. According to the sales pitch, the purchaser would then receive profits based upon sales from the vending machines or display racks.
“In an attempt to lure wary consumers, fraudsters have crafted business opportunity schemes that promise what appear to be more realistic returns backed up by false success stories,” said Tony West, Acting Associate Attorney General. “But we are more determined than ever to bring to justice those who are defrauding Americans out of their time, money, and faith in our economic system – this law enforcement sweep represents a coordinated effort to combat business opportunity fraud on multiple fronts.”
“Although years of criminal law enforcement attention has disrupted and deterred many fraudulent business opportunity schemes, some perpetrators have not yet heard the message – that defrauding entrepreneurial Americans out of their hard-earned money will result in stiff penalties,” said Stuart F. Delery, Principal Deputy Assistant Attorney General for the Civil Division. “Members of the public should be on guard for the deceptive tactics used to attract victims, and avoid schemes that fail to abide by the FTC’s Business Opportunity Rule.”
Enticed by the promise of a “turnkey” business, hundreds of consumers lost millions of dollars purchasing the fraudulent business opportunities targeted in this sweep. The four businesses involved in the criminal component of the sweep include the following:
· Mark Five Inc., a Houston company that promoted a jewelry business opportunity. O n November 12, 2012 and November 14, 2012, the Department of Justice filed criminal informations charging Billie Joyce Sanders and Michael Cupina in connection with their conduct at Mark Five. Each defendant was charged with conspiracy, which carries a maximum prison term of five years. According to the charging documents, Mark Five salespeople referred potential business opportunity buyers to Sanders and Cupina, who falsely claimed to own and operate successful jewelry display racks. One other individual was previously charged in connection with Mark Five. In February 2012, a grand jury in Houston indicted Mark Five principal Robert King on charges of conspiracy to commit mail and wire fraud, and substantive mail and wire fraud. King’s trial is scheduled for February 2013.
· The Lauren Jewelry Collection, an Atascocita, Texas, company that promoted a jewelry business opportunity. On November 13, 2012, the Department of Justice filed a criminal information in the Southern District of Texas charging Regina Rush in connection with the Lauren Jewelry Collection. Rush was charged with one count of conspiracy, which carries a maximum prison term of five years. According to the charging document, Rush served as the proprietor of the firm and made false representations about the success of distributors and the authenticity of references. The charges state that Rush encouraged potential purchasers to call references who made false statements about their experiences with the Lauren Jewelry Collection.
· American Vending Systems (AVS), a Colorado company that promoted energy candy business opportunities. On November 14, 2012, the Department of Justice filed a criminal information in the Western District of Pennsylvania charging Pearl Pastilock in connection with her conduct at AVS. Pastilock was charged with one count of conspiracy, which carries a maximum prison term of five years. According to the charging document, AVS salespeople referred potential buyers to Pastilock, who falsely claimed to own and operate successful energy candy vending machines. Five other individuals were previously charged for their conduct at AVS and related firms. Richard Black, Gary Luckner, Lou Gubitosa, Trey Friedmann and Mel Hendricks were all charged and pleaded guilty to conspiracy charges for this conduct.
· Multivend LLC, dba Vendstar, a New York company that promoted candy vending machine business opportunities. On Oct. 10, 2012, a grand jury in the Southern District of Florida indicted 10 individuals for misrepresenting a number of facts in connection with the sale of Vendstar business opportunities. More information about these charges can be found at:
www.justice.gov/opa/pr/2012/October/12-civ-1217.html
The charging documents referred to above contain only accusations against the defendants and are not evidence of guilt. The defendants should be presumed innocent unless and until proven guilty.
The civil cases the Justice Department filed allege that three businesses violated the Federal Trade Commission’s Business Opportunity Rule. The businesses include:
· The Zaken Corp., also doing business as The Zaken Corporation, QuickSell and QuikSell, (Zaken). Zaken is alleged to be a Thousand Oaks, Calif., corporation that offers a work-at-home business opportunity. According to the complaint against Zaken and its corporate officer Tiran Zaken, the defendants offer consumers a business plan to locate and contact businesses with excess inventory to sell. The complaint alleges that Zaken represents that once purchasers of the opportunity identify businesses interested in selling excess inventory, Zaken will find a buyer for the inventory and give the purchaser a “finder’s fee” equal to half of the total sales price. Among other allegations, the complaint filed by the Justice Department alleges that Zaken makes unsubstantiated claims, including that purchasers “can make thousands of dollars monthly for working just 2 to 4 hours a week from home.” This case was filed in the U.S. District Court for the Central District of California.
· Christopher Andrew Sterling, doing business as Sterling Visa, Rebate Data Processors and Credit Card Workers. Sterling is alleged to have run several work-at-home schemes from Southern California. According to the complaint, Sterling represents that purchasers of his opportunity will make a substantial income by “processing” applications for product rebates or credit card applications. Among other allegations, the government’s civil complaint alleges that Sterling failed to make required disclosures under the FTC’s Business Opportunity Rule and made unsubstantiated earnings claims. This case was filed in the U.S. District Court for the Southern District of California.
· Smart Tools LLC, a Tualatin, Ore., company. The complaint against Smart Tools and its corporate officer, Kirstin Hegg, alleges that the defendants have marketed a work-at-home business opportunity that teaches purchasers to locate people who are eligible for a partial refund of their FHA mortgage loan insurance premium. According to the complaint, the defendants tell potential buyers that they can charge a fee for information on how to obtain the refund. The defendants allegedly sent postcards to potential buyers stating that purchasers can earn up to $38,943 per year without stating what, if any, substantiation supports the earnings claim. Such a claim violates the FTC’s Business Opportunity Rule. This case was filed in the U.S. District Court for the District of Oregon.
Today’s announcement is part of efforts underway by the Consumer Protection Working Group (CPWG). The CPWG is part of President Obama’s Financial Fraud Enforcement Task Force which was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The CPWG brings together federal, state, and local law enforcement agencies, regulators, and other stakeholders to protect consumers from fraud that can devastate victims and cause widespread economic harm. Consumer fraud comes in many forms and can be found in fraud on our nation’s servicemembers, payday lending, high-pressure telemarketing schemes, internet scams, business opportunity scams, and unscrupulous third party payment processors. Scam artists often target vulnerable populations such as the unemployed and those already struggling with debt. Through this partnership, the CPWG is working to strengthen consumer protection efforts, leverage resources, enhance civil and criminal enforcement of consumer fraud and educate the public in an effort to prevent consumers from being victimized. For more information about the Financial Fraud Enforcement Task Force, visit www.stopfraud.gov .
Gamer Charged with Hacking into and Disabling New Hampshire Gaming Company’s Computer ServersRead the Press Release
WASHINGTON – A federal grand jury in the District of New Hampshire returned an indictment late yesterday charging a Dutch national with allegedly conspiring to hack into and disable computer servers belonging to Rampid Interactive, a New Hampshire-based company that publishes and hosts a multi-player online role-playing game called “Outwar,” Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney John P. Kacavas of the District of New Hampshire announced today.
Anil Kheda, 24, of the Netherlands, is charged with one count of conspiring to commit computer intrusion and one count of making extortionate interstate threats.
The indictment alleges that from November 2007 to August 2008, Kheda and other members of the conspiracy, all of whom were avid “Outwar” players, accessed Rampid’s computer servers without authorization and rendered “Outwar” unplayable for days at a time. According to the indictment, Kheda and his alleged co-conspirators also used their unauthorized access to Rampid’s servers to alter user accounts – causing the restoration of suspended player accounts and the accrual of unearned game points – and obtain a copy of all or portions of the “Outwar” computer source code, which they used to help create a competitor online game, “Outcraft.” The indictment also alleges that Kheda and his alleged co-conspirators sent Rampid interstate communications threatening to continue to hack into Rampid’s computer systems unless Rampid agreed to pay them money or provide them with other benefits.
According to the indictment, as a result of the defendants’ hacking activities, Rampid was unable to operate “Outwar” for a total of approximately two weeks over a nine-month period and incurred over $100,000 in lost revenues, wages, hosting costs, long term loss of business, as well as the loss of exclusive use of their proprietary source code, which it had invested approximately $1.5 million in creating.
According to court documents, Kheda earned approximately $10,000 in profits from operating “Outcraft,” which has approximately 10,000 players worldwide.
If convicted, Kheda faces a maximum sentence of five years in prison on the conspiracy charge and two years in prison on the interstate threats charge.
The case was investigated by the FBI and is being prosecuted by Trial Attorney Mona Sedky of the Computer Crime and Intellectual Property Section in the Justice Department’s Criminal Division and Assistant U.S. Attorney Arnold H. Huftalen of the District of New Hampshire.
The details contained in the indictment are allegations. The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Department of Justice Completes Review of Las Vegas Metropolitan Police Department’s Use of Force Policies and PracticesRead the Press Release
The U.S. Department of Justice Office of Community Oriented Policing Services (COPS) today announced the completion and delivery of an eight-month review of the Las Vegas Metropolitan Police Department’s use of force policies and practices. The report, funded by a grant from the COPS Office, lists 75 findings and recommendations regarding officer-involved shootings and other use-of-force issues.
The Las Vegas Metropolitan Police Department volunteered to undergo the review by the COPS Office after a series of shootings in 2011. The report focused on the use of deadly force over the last five years, including an analysis of policies and procedures, training and tactics, investigation and documentation and case reviews. Interviews were conducted with 95 area stakeholders, including community members, current and former officers and prosecutors, community organizations and police union officials.
“One of the most important issues facing law enforcement is the public perception of the legitimate use of force,” said COPS Office Director Bernard Melekian. “And far too often, the public perception of police use of force is different from those who are in law enforcement. We’ve now developed a tool to help assist agencies address community concerns, effectively revamp policies and practices, and enhance both community engagement and community support.”
The report was administered as part of the COPS Office’s Critical Response Technical Assistance initiative, designed to provide technical assistance to agencies facing significant law enforcement-related issues. Using subject matter experts, interviews, direct observations, as well as conducting extensive research and analysis, the COPS Office assists law enforcement agencies with enhancing and improving their policies and procedures, their operating systems and their professional culture. The COPS Office can issue a series of recommendations and be instrumental in assisting agencies with the implementation of those recommendations.
Among the findings in the Las Vegas Metropolitan Police Department report is the need for significant changes to the use of force review board, new tactical practices when multiple officers respond to a crime scene and the implementation of new technologies, such as body cameras. The report also found that while the department’s new use of force policy is comprehensive, the format of the policy is cumbersome and not structured in a clear and concise manner that would allow for quick guidance when needed. The report recommends that the new policy be separated into smaller, specific policies that quickly address issues such as the use of firearms and less-lethal weapons.
The Las Vegas Metropolitan Police Department has already made progress on implementing a number of the report’s recommendations, addressing nearly half of the calls for action prior to the release of the report from the COPS Office.
“The issues facing the Las Vegas Metropolitan Police Department are not unique. Numerous agencies are facing similar challenges,” stated Director Melekian. “We are very encouraged by the Department’s proactive commitment to identifying problems and fixing them. The Sheriff and his team have been a partner throughout and we have seen results. There is much hard work ahead, but important initiatives have already begun. The approach taken by the Sheriff should be a model for departments across the nation.”
The COPS Office is a federal agency responsible for advancing community policing nationwide. Since 1995, COPS has awarded over $17 billion to advance community policing, including grants awarded to more than 13,000 state, local, and tribal law enforcement agencies to fund the hiring and redeployment of approximately 120,000 officers and provide a variety of knowledge resource products including publications, training, and technical assistance.
BP Exploration and Production Inc. Agrees to Plead Guilty to Felony Manslaughter, Environmental Crimes and Obstruction<br /> of Congress Surrounding Deepwater Horizon IncidentRead the Press Release
BP Exploration and Production Inc. (BP) has agreed to plead guilty to felony manslaughter, environmental crimes and obstruction of Congress and pay a record $4 billion in criminal fines and penalties for its conduct leading to the 2010 Deepwater Horizon disaster that killed 11 people and caused the largest environmental disaster in U.S. history, Attorney General Eric Holder announced today. The 14-count information, filed today in U.S. District Court in the Eastern District of Louisiana, charges BP with 11 counts of felony manslaughter, one count of felony obstruction of Congress, and violations of the Clean Water and Migratory Bird Treaty Acts.
BP has signed a guilty plea agreement with the government, also filed today, admitting to its criminal conduct. As part of its guilty plea, BP has agreed, subject to the Court’s approval, to pay $4 billion in criminal fines and penalties – the largest criminal resolution in United States history.
“The $4 billion in penalties and fines is the single largest criminal resolution in the history of the United States and constitutes a major achievement toward fulfilling a promise that the Justice Department made nearly two years ago to respond to the consequences of this epic environmental disaster and seek justice on behalf of its victims,” said Attorney General Holder. “We specifically structured this resolution to ensure that more than half of the proceeds directly benefit the Gulf Coast region so that residents can continue to recover and rebuild.”
“The explosion of the rig was a disaster that resulted from BP’s culture of privileging profit over prudence,” said Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division. “We hope that BP's acknowledgment of its misconduct – through its agreement to plead guilty to 11 counts of felony manslaughter – brings some measure of justice to the family members of the people who died onboard the rig.”
“The oil spill was catastrophic for the environment, but by hiding its severity BP also harmed another constituency – its own shareholders and the investing public who are entitled to transparency, accuracy and completeness of company information, particularly in times of crisis,” said Robert Khuzami, Director of the U.S. Securities and Exchange Commission’s (SEC) Division of Enforcement. “Good corporate citizenship and responsible crisis management means that a company can’t hide critical information simply because it fears the backlash.”
In addition to the resolution of charges against BP, Robert M. Kaluza, 62, of Henderson, Nev., and Donald J. Vidrine, 65, of Lafayette, La. – the highest-ranking BP supervisors onboard the Deepwater Horizon on April 20, 2010 – are alleged to have engaged in negligent and grossly negligent conduct in a 23-count indictment charging violations of the federal involuntary manslaughter and seaman’s manslaughter statutes and the Clean Water Act. David I. Rainey, 58, of Houston – a former BP executive who served as a Deputy Incident Commander and BP’s second-highest ranking representative at Unified Command during the spill response – is charged with obstruction of Congress and making false statements to law enforcement officials. A grand jury in the Eastern District of Louisiana returned the indictments against Kaluza, Vidrine and Rainey, which were unsealed today.
According to court documents, on April 20, 2010, while stationed at the Macondo well site in the Gulf of Mexico, the Deepwater Horizon rig experienced an uncontrolled blowout and related explosions. In agreeing to plead guilty, BP has admitted that the two highest-ranking BP supervisors onboard the Deepwater Horizon, known as BP’s “Well Site Leaders” or “company men,” negligently caused the deaths of 11 men and the resulting oil spill. The information details that, on the evening of April 20, the two supervisors, Kaluza and Vidrine, observed clear indications that the Macondo well was not secure and that oil and gas were flowing into the well. Despite this, BP’s well site leaders chose not to take obvious and appropriate steps to prevent the blowout. As a result of their conduct, control of the Macondo well was lost, resulting in catastrophe.
Kaluza and Vidrine each are charged with 11 felony counts of seaman’s manslaughter, 11 felony counts of involuntary manslaughter and one violation of the Clean Water Act. If convicted, Kaluza and Vidrine each face a maximum potential penalty of 10 years in prison on each seaman’s manslaughter count, up to eight years in prison on each involuntary manslaughter count, and up to a year in prison on the Clean Water Act count.
The information charging BP further details that the company, through senior executive Rainey, obstructed an inquiry by the U.S. Congress into the amount of oil being discharged into the Gulf while the spill was ongoing. As part of its plea agreement, BP has admitted that, through Rainey, it withheld documents and provided false and misleading information in response to the U.S. House of Representatives’ request for flow-rate information. Among other things, BP admitted that Rainey manipulated internal estimates to understate the amount of oil flowing from the well and withheld data that contradicted BP’s public estimate of 5,000 barrels of oil per day. BP has also admitted that, at the same time Rainey was preparing his manipulated estimates, BP’s internal engineering response teams were using sophisticated methods that generated significantly higher estimates. The Flow Rate Technical Group, consisting of government and independent scientists, later concluded that more than 60,000 barrels per day were leaking into the Gulf during the relevant time, contrary to BP’s representations to Congress.
Rainey is charged with one count of obstruction of Congress, and one count of making false statements to law enforcement officials. If convicted, Rainey faces a maximum potential penalty of five years in prison on each count.
The criminal resolution is structured such that more than half of the proceeds will directly benefit the Gulf region. Pursuant to an order presented to the Court, approximately $2.4 billion of the $4.0 billion criminal recovery is dedicated to acquiring, restoring, preserving and conserving – in consultation with appropriate state and other resource managers – the marine and coastal environments, ecosystems and bird and wildlife habitat in the Gulf of Mexico and bordering states harmed by the Deepwater Horizon oil spill. This portion of the criminal recovery will also be directed to significant barrier island restoration and/or river diversion off the coast of Louisiana to further benefit and improve coastal wetlands affected by the oil spill. An additional $350 million will be used to fund improved oil spill prevention and response efforts in the Gulf through research, development, education and training.
In addition to the historic $4 billion in criminal fines and penalties, BP has agreed as part of its guilty plea to retain a process safety and risk management monitor and an independent auditor, who will oversee BP’s process safety, risk management and drilling equipment maintenance with respect to deepwater drilling in the Gulf of Mexico. BP is also required to retain an ethics monitor to improve BP’s code of conduct for the purpose of seeking to ensure BP’s future candor with the United States government.
The United States continues to pursue a civil action to recover civil penalties under the Clean Water Act and hold BP and other defendants liable for natural resource damages under the Oil Pollution Act. A trial on liability matters is scheduled to begin in February 2013, during which the United States will seek to establish that the spill was caused by BP’s gross negligence. BP could face billions of dollars of additional exposure in the civil lawsuit.
The guilty plea agreement and charges announced today are part of the ongoing criminal investigation by the Deepwater Horizon Task Force into matters related to the April 2010 Gulf oil spill. The Deepwater Horizon Task Force, based in New Orleans, is supervised by Assistant Attorney General Breuer and led by Deputy Assistant Attorney General John D. Buretta, who serves as the director of the task force. The task force includes prosecutors from the Criminal Division and Environment and Natural Resources Division of the Department of Justice; the U.S. Attorney’s Office for the Eastern District of Louisiana, as well as other U.S. Attorneys’ Offices; and investigating agents from the FBI, Environmental Protection Agency, Department of Interior, National Oceanic and Atmospheric Administration Office of Law Enforcement, U.S. Coast Guard, U.S. Fish and Wildlife Service and the Louisiana Department of Environmental Quality.
Today, the SEC simultaneously resolved civil securities fraud charges with BP in a $525 million settlement. The Justice Department also acknowledges and expresses its appreciation for the significant assistance provided by the SEC’s Division of Enforcement.
These cases are being prosecuted by Deepwater Horizon Task Force Deputy Directors Derek A. Cohen and Avi Gesser, and task force prosecutors Richard R. Pickens II, Scott M. Cullen, Colin Black, Edward Kang and Rohan Virginkar.
An indictment or information is merely a charge and a defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
Due to public interest in this case, the Department of Justice is releasing documents that may not be in an accessible format. If you have a disability and the format of any material on the site interferes with your ability to access some information, please email the Department of Justice webmaster at [email protected] or contact Michael Passman at 202.514.2007. To enable us to respond in a manner that will be of most help to you, please indicate the nature of the accessibility problem, your preferred format (electronic format (ASCII, etc.), standard print, large print, etc.), the web address of the requested material, and your full contact information so we can reach you if questions arise while fulfilling your request.
Portable Document Format (PDF) files may be viewed with a free copy of Adobe Acrobat Reader.Related Materials:
BP Guilty Plea
BP Information
Kaluza Vidrine Indictment
Rainey Indictment
Assistant Attorney General Lanny A. Breuer Speaks at the BP Press Conference
Wednesday 14 November 2012
U.S. Forfeits $2.1 Million Worth of Property Purchased with Alleged Bribes Paid to the Family of the Former President of TaiwanRead the Press Release
The Department of Justice has forfeited a Manhattan condominium and a Virginia residence – with a combined value of approximately $ 2.1 million – purchased with the proceeds of alleged bribes paid to the family of the former President of Taiwan, Shui-Bian Chen, as part of the department’s Kleptocracy Asset Recovery Initiative. Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division announced the forfeiture today with U.S . Immigration and Customs Enforcement (ICE) Director John Morton.
On Oct. 23, 2012, U.S. District Judge Norman M oon of the Western District of Virginia entered a final forfeiture judgment against a residence in Keswick, Va., and On Oct. 24, 2012, U.S. District Judge Katherine Forrest in the Southern District of New York entered a final forfeiture judgment against a condominium in Manhattan. Both properties were previously owned by the former first family of Taiwan through a British Virgin Islands shell company.
Today, ICE Homeland Security Investigations (HSI) took possession of the Virginia property. The title of the Manhattan condominium has been vested through court order to the government.
According to the civil forfeiture complaints filed in this case, during former President Chen’s administration, Yuanta Securities Co. Ltd. paid a bribe of 200 million New Taiwan dollars (equivalent to approximately $6 million USD) to former first lady Sue-Jen Wu in 2004 to ensure that the Taiwan government would not oppose Yuanta’s bid to acquire a financial holding company.
The former first family used Hong Kong and Swiss bank accounts, British Virgin Island companies and a St. Kitts and Nevis trust to purchase the two properties. One of the shell companies, Avallo Limited, which held title to both properties through U.S. domestic companies, settled both forfeiture actions under terms that provide for the sale of the property and forfeiture to the U.S. government of approximately 85 percent of the net proceeds from the sale of both properties.
“The Kleptocracy Initiative was established to prevent corrupt leaders from using the United States as a safe haven for their ill-gotten gains,” said Assistant Attorney General Breuer. “The former president of Taiwan’s family allegedly accepted millions in bribes in exchange for official action favoring Yuanta Securities, and we have now taken possession of two valuable properties purchased with their alleged spoils. We are committed to using every tool available to root out foreign official corruption.”
“This most recent seizure of luxury properties in New York City and Keswick, Va. belonging to the son of the former President of Taiwan Shui-Bian Chen is part of a continued effort by Homeland Security Investigations special agents to identify, locate, and seize properties and accounts in the United States belonging to him and his family,” said ICE Director Morton. “HSI will continue to find and seize the U.S. assets of foreign corrupt officials who try to use our country to conceal the illicit proceeds and profits of their crimes.”
The case was prosecuted by Deputy Chief Linda Samuel and Trial Attorney Jennifer Wallis of the Criminal Division’s Asset Forfeiture and Money Laundering Section. The Criminal Division’s Office of International Affairs provided valuable assistance. The case was investigated by ICE- HSI’s Foreign Corruption Investigations Group, the HSI Miami Asset Identification and Removal Group and the HSI Attaché Hong Kong, with assistance from the Taiwan Ministry of Justice, Special Investigations Division.
This case is part of the Justice Department’s Kleptocracy Asset Recovery Initiative. This initiative is carried out by a dedicated team of prosecutors in the Asset Forfeiture and Money Laundering Section, working in partnership with federal law enforcement agencies to forfeit the proceeds of foreign official corruption and where appropriate return those proceeds to benefit those harmed.
Individuals with information about possible proceeds of foreign corruption located in or laundered through institutions in the United States should contact federal law enforcement or send an email to [email protected] .
HSI’s Foreign Corruption Investigations Group in Miami targets corrupt foreign officials around the world that attempt to utilize U.S. financial institutions to launder illicit funds. The group conducts investigations into the laundering of proceeds emanating from foreign public corruption, bribery or embezzlement. The objective is to prevent foreign derived ill-gotten gains from entering the U.S. financial infrastructure, to seize identified assets in the United States and repatriate these funds on behalf of those affected.
Two Former Alabama Court Employees Indicted for Stealing Programming Code for Sensitive Court Data SystemRead the Press Release
Two former employees of the Alabama Administrative Office of the Courts were indicted today in Montgomery, Ala., for stealing the programming code for a sensitive court data system, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney Joyce White Vance for the Northern District of Alabama.
The indictment charges Michael David Carroll, 58, and Jill Hawthorne, 35, both of Montgomery, with one count ofstealing property having a value of $5,000 or more by an employee of a state or local government agency that receives $10,000 or more annually in federal assistance. Carroll is the former Director of Information Systems for the Alabama Administrative Office of the Courts (AOC). Hawthorne is a former database administrator for AOC.
According to the indictment, Carroll and Hawthorne stole the code for the AOC’s county court records database called Namemaster. The indictment also alleges that Carroll and Hawthorne stole the digital blueprint, known as the schema, for how the Namemaster database was constructed. A database schema often includes information concerning tables, fields, relationships, views, indexes and other such elements.
According to a publicly filed search warrant affidavit, Hawthorne and Carroll facilitated the unlawful transfer of the code and schema for Namemaster to an Orlando-based private software development company CyberBest Technology Inc. They also allegedly facilitated the transfer to CyberBest of hundreds of thousands of Jefferson County, Ala., court records from the state Namemaster database.
If convicted, Carroll and Hawthorne each face a maximum penalty of 10 years in prison and a $250,000 fine.
The case is being prosecuted by Assistant U.S. Attorney David Estes for the Northern District of Alabama and Trial Attorney William Hall of the Criminal Division’s Computer Crime and Intellectual Property Section. The case was investigated by the U.S. Secret Service, Alabama Bureau of Investigation and Alabama Attorney General’s Office.
Indictments are only charges and not evidence of guilt. A defendant is presumed to be innocent until and unless proven guilty.
The Department of Justice and the Securities and Exchange Commission Release FCPA Resource GuideRead the Press Release
The Department of Justice (DOJ) and the U.S. Securities and Exchange Commission (SEC) today released A Resource Guide to the U.S. Foreign Corrupt Practices Act (the Guide). The 120-page Guide provides a detailed analysis of the U.S. Foreign Corrupt Practices Act (FCPA) and closely examines the DOJ and SEC’s approach to FCPA enforcement.
The Guide provides helpful information to enterprises of all sizes – from small businesses doing their first transactions abroad to multi-national corporations with subsidiaries around the world. The Guide addresses a wide variety of topics, including who and what is covered by the FCPA’s anti-bribery and accounting provisions; the definition of a “foreign official”; what constitute proper and improper gifts, travel and entertainment expenses; facilitating payments; how successor liability applies in the mergers and acquisitions context; the hallmarks of an effective corporate compliance program; and the different types of civil and criminal resolutions available in the FCPA context. On these and other topics, the Guide takes a multi-faceted approach toward setting forth the statute’s requirements and providing insights into DOJ and SEC’s enforcement practices. It uses hypotheticals, examples of enforcement actions and matters DOJ and SEC have declined to pursue, and summaries of applicable case law and DOJ opinion releases.
“The fight against corruption is a law enforcement priority of the United States,” said Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division. “Our FCPA enforcement is critical to protecting the integrity of markets for American companies doing business abroad, and we will continue to make clear that bribing foreign officials is not an acceptable shortcut. The Guide is an important illustration of our transparency and a useful reference for companies and individuals who wish to act responsibly and in compliance with the law.”
“Investors must have faith that the economic performance of public companies reflects lawful considerations of markets, price and product rather than a mirage resulting from bribery and corruption,” said Robert Khuzami, Director of the SEC’s Division of Enforcement. “This guide will protect investors by assisting businesses in preventing such unlawful behavior, thus avoiding FCPA violations in the first place, which is in the interest of law enforcement and business alike.”
The Guide is available to the public free of charge online at www.justice.gov/criminal/fraud/fcpa and at www.sec.gov/spotlight/fcpa.shtml.
Related Materials:
FCPA Guide Fact Sheet
A Resource Guide to the U.S. Foreign Corrupt Practices ActNew England Crime Boss Sentenced to 78 Months in Federal PrisonRead the Press Release
WASHINGTON – Anthony L. Dinunzio, the acting leader of the New England La Cosa Nostra (NELCN) crime family, was sentenced today to serve 78 months in federal prison for his role in a racketeering conspiracy to extort protection payments from adult entertainment businesses in Rhode Island.
Dinunzio’s sentence was announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; Peter F. Neronha, U.S. Attorney for the District of Rhode Island; Richard Deslauriers, Special Agent in Charge of the FBI’s Boston Field Office; Colonel Steven G. O’Donnell, Superintendent of the Rhode Island State Police; and Providence, R.I., Public Safety Commissioner Steven M. Paré.
“Today, the admitted leader of the New England La Cosa Nostra was sentenced to prison for the years of significant harm he caused to the people of Rhode Island,” said Assistant Attorney General Breuer. “Anthony Dinunzio and his NELCN subordinates used threats of violence to extort protection payments from business owners throughout the state, and his sentence sends a powerful message about the department’s determination to hold mafia leaders and associates to account.”
“Prosecution of Mr. Dinunzio and his fellow LCN leaders, members and associates was a true team effort, in which attorneys from the Criminal Division and this office, the Rhode Island State Police, the Providence Police and the FBI all played a critical part,” said U.S. Attorney Peter F. Neronha. “As a result of their painstaking, excellent work, Mr. Dinunzio and his fellow career criminals are going to federal prison for long periods of time. Rhode Island, and New England as a whole, is a better and safer place today as a result of their work.”
“Over the last several years, the FBI and its federal, state and local law enforcement partners have undeniably shattered Omerta, the New England LCN’s code of silence,” said FBI Boston Special Agent in Charge DesLauriers. “Through persistent, methodical and unyielding investigations, Mr. Dinunzio and others in the LCN know they no longer are able to rely on their sworn bonds for protection from the FBI and our partners.”
Dinunzio, 53, of East Boston, Mass., was sentenced today by U.S. District Court Judge William E. Smith in Providence, R.I. In addition to his prison term, Dinunzio was sentenced to serve three years of supervised release.
Dinunzio pleaded guilty on Sept. 13, 2012, to one count of conspiracy to participate in a racketeering enterprise (RICO).
According to court documents, Dinunzio was a member and leader of the NELCN from at least 2002. At the time of his guilty plea, Dinunzio admitted to committing multiple acts of extortion and knowingly assisted in a criminal racketeering conspiracy through the oversight and receipt of $2,000 to $6,000 in monthly protection payments, paid in cash by the owners and operators of several adult entertainment businesses in Rhode Island. Dinunzio also admitted to obstructing or impeding the administration of justice by, among other methods, attempting to influence, delay or prevent witness testimony related to the investigation and prosecution of NELCN members.
Previously, seven leaders, underbosses, members and associates of the NELCN have pleaded guilty and been sentenced to federal prison for their involvement in the racketeering and extortion conspiracy to extort protection payments from adult entertainment businesses and individuals in Rhode Island during the past two decades. Admitted NELCN crime boss Luigi “Louie” Manocchio is serving a sentence of 66 months in prison. Edward “Eddy” Lato, an admitted capo, is serving a sentence of 108 months in prison. Alfred “Chippy” Scivola, an admitted NELCN member, is serving a sentence of 46 months in prison. Admitted NELCN associates Richard Bonifiglia and Albino “Albie” Folcarelli are both serving sentences of 84 months in prison. Raymond “Scarface” Jenkins is serving a sentence of 37 months in prison. And Thomas Iafrate is serving a sentence of 30 months in prison.
A ninth defendant, Theodore Cardillo, 69, has signed a plea agreement and agreed to plead guilty to a racketeering charge contained in a second superseding indictment in this matter. A change-of-plea and sentencing hearing has been scheduled for Dec. 11, 2012.
Colonel O’Donnell of the Rhode Island State Police said, “La Cosa Nostra historically prides itself on preying on the weak to exploit their ideology of greed and power. The factors that brought them “power”, has contributed to their demise.”
Providence Public Safety Commissioner Paré added, “The prosecution and sentencing of Anthony Dinunzio is an example of government from federal, state and local law enforcement aggressively investigating organized criminal behavior and incarcerating those who use fear, intimidation, violence and threats to extort money from businesses in Providence. We will continue to seek severe penalties with prison sentences for this type of criminal. We will not let up until we rid this criminal activity from our community.”
The cases are being prosecuted by Assistant U.S. Attorney William J. Ferland of the District of Rhode Island and Trial Attorney Sam Nazzaro of the Criminal Division’s Organized Crime and Gang Section. The matter was investigated by the FBI, the Rhode Island State Police and the Providence Police Department.
Justice Department Statement on Entergy Corp.’s Transmission System Commitments and Acquisition of KGen Power Corp.’s Plants in Arkansas and MississippiRead the Press Release
WASHINGTON – The Department of Justice’s Antitrust Division issued the following statement today regarding Entergy Corp.’s commitments to join a regional transmission organization (RTO) and divest its transmission system; Entergy’s proposed acquisitions of the Hinds and Hot Spring generating facilities in Mississippi and Arkansas, respectively, from KGen Power Corporation; and the division’s open investigation into Entergy’s alleged anticompetitive conduct:
“After a thorough review, and in light of the forthcoming changes in Entergy’s service area, the Antitrust Division has determined that Entergy’s acquisitions of KGen’s power plants in Jackson, Miss., and Hot Spring County, Ark., are unlikely to substantially lessen competition, and is closing its investigation into the proposed transactions.“In addition to the merger investigation of the KGen transactions, the division has been examining allegations that Entergy has engaged in exclusionary conduct in its four-state utility service area spanning parts of Arkansas, Louisiana, Mississippi and Texas. That investigation remains open. The conduct investigation has focused on whether certain of Entergy’s power generation dispatch, transmission planning and power procurement practices constitute exclusionary conduct under Section 2 of the Sherman Act.
“If Entergy follows through on its transmission system commitments, the Antitrust Division’s concerns will be resolved.
“The division has been investigating the effect of several of Entergy’s practices on competition and barriers to entry. The division has also evaluated professed efficiency and regulatory justifications, which have not been persuasive.
“Specifically, the division has been exploring whether Entergy has harmed consumers by exercising its control over its transmission system and dominant fleet of gas-fired power plants to exclude rival operators of low-cost combined-cycle gas turbine (CCGT) power plants from competing to sell long-term power. In particular, the division has been evaluating whether Entergy’s practices have effectively foreclosed these more efficient rivals from obtaining long-term firm transmission service, a necessary input for selling long-term power products to wholesale customers in the Entergy service area. As part of the conduct investigation, the division has also been reviewing the competitive impact of, and circumstances surrounding, Entergy’s serial acquisition of rivals’ CCGT power plants, including the KGen plants.
“Since the division began its investigation, Entergy announced that it intends to join the Midwest Independent Transmission System Operator (MISO) RTO and has entered into an agreement to divest its electric transmission business to ITC Holdings Corp. (ITC), an independent transmission company. In recent months, Entergy has initiated the state and federal regulatory processes in support of these significant structural changes, secured conditional MISO approval from several state regulators, and committed its utilities to a target MISO integration date of December 2013.
“Entergy’s commitments to obtain membership in an RTO and divest its transmission system to a third party with the incentive to make efficient transmission investments are significant steps towards restoring competition in the Entergy service area. If Entergy follows through on its commitments, these measures will address the Antitrust Division’s concerns by eliminating Entergy’s ability to maintain barriers to wholesale power markets, ensuring that all Entergy service area generation is dispatched independently and at lowest cost, increasing market transparency and oversight, and properly aligning incentives for the construction of transmission. Such measures will also directly benefit consumers, who will ultimately enjoy lower electricity prices and improved reliability as a result of RTO integration and the transmission system divestiture. The division does not endorse any particular RTO or independent transmission company.“The division will closely monitor developments, and in the event that Entergy does not make meaningful and timely progress, the division can and will take appropriate enforcement action, if warranted.”
Tuesday 13 November 2012
Vehicle and Engine Importers to Pay Civil Penalty to Resolve Clean Air Act ViolationsRead the Press Release
The Department of Justice and the U.S. Environmental Protection Agency (EPA) today announced a settlement with two former importers of highway motorcycles, recreational vehicles and small spark ignition engines. The defendants, Yuan Cheng International Group Inc. (YCIG) and NST Inc. (NST), located in Montclair, Calif., allegedly imported and sold vehicles and engines from China in violation of Clean Air Act requirements.
The settlement resolves allegations that, between 2006 and 2011, the companies imported and introduced into commerce 17,521 recreational vehicles, highway motorcycles and nonroad spark ignition engines without proper EPA certifications required under the Clean Air Act to prevent excess emissions of pollutants. Vehicles and engines that are not certified may be operating without proper emissions controls and can emit excess carbon monoxide and nitrogen oxides and cause respiratory illnesses, aggravate asthma and contribute to the formation of ground level ozone or smog. The settlement also resolves claims for failure to adequately respond to EPA’s requests for information and labeling violations under the Clean Air Act.
The settlement requires the companies and John Cheng and Jenny Yu, senior company executives, to pay a combined civil penalty of $50,000. This amount is based on the United States’ determination that the parties have a limited ability to pay a civil penalty in this matter. Both companies have ceased importing vehicles and engines and are now dissolved. In the fall of 2010, NST agreed to pay $250,000 to the state of California to resolve similar violations concerning the illegal sale of uncertified vehicles.
“We will continue to vigorously enforce the law to ensure that imported vehicles and engines comply with U.S. laws so that American consumers get environmentally sound products and violators do not gain an unfair economic advantage,” said Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division of the Department of Justice. “By holding individuals personally accountable under the consent decree, this settlement shows not only that we will pursue companies who violate the law, but where appropriate, will take additional measures to ensure that individual executives who act on behalf of companies cannot repeat the same conduct under a new corporate identity.”
In addition, Mr. Cheng and Ms. Yu must enter into a compliance plan with EPA prior to any future importation, distribution, selling, or offering for sale of any products covered by the Clean Air Act. They must also provide EPA with notice prior to forming any U.S. business entity that engages in the importation, distribution, selling or offering for sale of any products covered by the Clean Air Act, or before individually engaging in such activities. Mr. Cheng and Ms. Yu may be liable for any additional penalties for any violations of the settlement agreement, including $25,000 per vehicle or engine imported, sold or distributed that is not in accordance with an EPA-approved compliance plan, and up to $5,000 per day for each failure to provide notice to EPA as mentioned above.
John Cheng (also known as Yuan Cheng) was the sole shareholder, director, president, secretary, chief financial officer and treasurer of the YCIG. NST was the corporate successor to YCIG after YCIG dissolved. Cheng’s wife, Jenny Yu, was the president, secretary, chief financial officer, one of two directors and a 50 percent shareholder of NST. Mr. Cheng was the other 50 percent shareholder of NST. Both Cheng and Yu are individually bound by the terms of the settlement and are personally jointly and severally liable for the liabilities and obligations arising from the consent decree.
The Clean Air Act prohibits any vehicle or engine from being imported and sold in the United States unless it is covered by a valid, EPA-issued certificate of conformity indicating that the vehicle or engine meets applicable federal emission standards. The certificate of conformity is the primary way EPA ensures that imported vehicles and engines meet emission standards. This settlement is part of an ongoing effort by EPA to ensure that all imported vehicles and engines comply with the Clean Air Act’s requirements.
The consent decree is subject to a 30-day public comment period and approval by the federal court. Once it is published in the Federal Register, a copy of the consent decree will be available on the Justice Department website at www.usdoj.gov/enrd/Consent_Decrees.html .
Two Florida Men and Company Charged in Philadelphia with Rattlesnake TraffickingRead the Press Release
Robroy MacInnes, 54, of Fort Myers, Fla., Robert Keszey, 47, of Bushnell, Fla., and Glades Herp Farm Inc., were charged in a two-count indictment today in federal court in Philadelphia, announced Ignacia S. Moreno, Assistant Attorney General of the Justice Department’s Environment and Natural Resources Division and Zane David Memeger, U.S. Attorney for the Eastern District of Pennsylvania. The indictment charges MacInnes, Keszey and the Florida business they co-own, Glades Herp Farm, with conspiracy to traffic in endangered and threatened reptiles, as well as charging MacInnes and Glades with trafficking in protected timber rattlesnakes in violation of the Lacey Act.
According to the indictment, between 2007 and 2008, the defendants collected protected snakes from the wild in Pennsylvania and New Jersey, purchased protected eastern timber rattlesnakes that had been illegally collected from the wild in violation of New York law, and transported federally threatened eastern indigo snakes from Florida to Pennsylvania. The indictment also charges that defendants MacInnes and Glades violated the Lacey Act by purchasing illegal eastern timber rattlesnakes and having the snakes transported to Florida.
The eastern timber rattlesnake is a species of venomous pit viper native to the Eastern United States, and is considered endangered in New Jersey and threatened in New York. It is also illegal to possess an eastern timber rattlesnake without a permit in Pennsylvania. The eastern indigo snake, the longest native North American snake species, is listed as threatened by both Florida and Federal law.
The Lacey Act, one of the oldest statutes in the United States, prohibits interstate trafficking in wildlife known to be illegally obtained. The maximum penalty for conspiring to commit offenses and for violations of the Lacey Act is up to five years in prison and a $250,000 fine for each violation.
The allegations in the indictment are mere accusations and all persons are presumed innocent until and unless proven guilty beyond a reasonable doubt in a court of law.
This case is being investigated by the U.S. Fish and Wildlife Service, Office of Law Enforcement. The case is being prosecuted by Patrick M. Duggan of the Environmental Crimes Section of the Justice Department’s Environment and Natural Resources Division and Assistant U.S. Attorney Mary Kay Costello of the U.S. Attorney’s Office for the Eastern District of Pennsylvania.
South Carolina Man Sentenced for Committing Federal Hate Crime Against an African-American TeenagerRead the Press Release
Chase McClary, 24, of Johnsonville, S.C., was sentenced today in federal court to four years in prison followed by three years supervised release for his racially-motivated attack of an African-American teenager.
In June 2012, McClary pleaded guilty to violating the Matthew Shepard James Byrd, Jr Hate Crimes Prevention Act by violently assaulting an African-American teenager. During his guilty plea, McClary admitted that in August 2010, he approached a 16-year-old African-American male and struck him numerous times with the jagged end of a broken coffee mug because of the victim’s race. The attack resulted in severe injuries to the victim’s head, face and neck.
“The Department of Justice is committed to aggressively prosecuting hate-fueled acts of violence,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “Today’s sentence makes clear that racially-motivated attacks will not be tolerated in this country.”
“Working with the Civil Rights Division, this U.S. Attorney’s Office will continue to prioritize the prosecution of hate crimes and other civil rights violations in the District of South Carolina,” said William N. Nettles, U.S. Attorney for the District of South Carolina.
This case was investigated by Special Agent Steven Stokes of the FBI, with assistance from the Florence County Sheriff’s Investigator Alvin Powell, and is being prosecuted by Assistant U.S. Attorney Brad Parham and Civil Rights Division Trial Attorney Christopher Lomax.
Saudi Student Sentenced to Life in Prison<br /> for Attempted Use of Weapon of Mass DestructionRead the Press Release
Khalid Ali-M Aldawsari, 22, a citizen of Saudi Arabia and resident of Lubbock, Texas, was sentenced today by U.S. District Judge Donald E. Walter in federal court in Amarillo, Texas, to life in prison.
Aldawsari was convicted on June 27, 2012, on an indictment charging one count of attempted use of a weapon of mass destruction in connection with his purchase of chemicals and equipment necessary to make an improvised explosive device (IED) and his research of potential U.S. targets, including persons and infrastructure. He was lawfully admitted into the United States in 2008 on a student visa and was enrolled at South Plains College near Lubbock.
Today’s announcement was made by Sarah R. Saldaña U.S. Attorney for the Northern District of Texas; Lisa Monaco, Assistant Attorney General for National Security; and Diego G. Rodriguez, Special Agent in Charge of the FBI Dallas Field Division.
According to court documents and evidence presented during trial, at the time of his arrest last year, Aldawsari had been researching online how to construct an IED using several chemicals as ingredients. He had also acquired or taken a substantial step toward acquiring most of the ingredients and equipment necessary to construct an IED and he had conducted online research of several potential U.S. targets. In addition, he had allegedly described his desire for violent jihad and martyrdom in blog postings and a personal journal.
“This case, in which private citizens paid attention to details and notified authorities of their suspicions, serves as a reminder to all private citizens that we must always be observant and vigilant, as there are some who intend to cause great harm,” said U.S. Attorney Saldaña. “Khalid Aldawsari, acting as a lone wolf, may well have gone undetected were it not for the keen observations of private citizens. We owe them, and all the hundreds of hard-working members of our law enforcement community, our deepest gratitude.”
“Khalid Aldawsari came to this country intent on carrying out an attack. He then began purchasing ingredients to construct a bomb and was actively researching potential targets in America. Thanks to the hard work of many agents, analysts and prosecutors, his plot was thwarted before anyone was harmed; he was convicted at trial and, today at sentencing, he was held accountable for his actions,” said Assistant Attorney General Monaco.
“Today’s sentencing demonstrates our commitment to detecting, investigating and prosecuting individuals who seek to do harm to others in our country. Our success was the result of the cooperation of law enforcement and intelligence resources, particularly, the FBI’s North Texas Joint Terrorism Task Force, the Texas Tech Police Department, the Lubbock Police Department and the Lubbock County Sheriff’s Office,” said FBI Special Agent in Charge Rodriguez. “The dedicated agents, officers, and analysts; the computer forensics team; and the linguists are all to be commended for their diligent work on this investigation and the U.S. Attorney’s Office in the Northern District for the successful prosecution of Mr. Aldawsari.”
The government presented evidence that on Feb. 1, 2011, a chemical supplier reported to the FBI a suspicious attempted purchase of concentrated phenol by a man identifying himself as Khalid Aldawsari. Phenol is a toxic chemical with legitimate uses, but can also be used to make the explosive trinitrophenol, also known as T.N.P., or picric acid. Ingredients typically used with phenol to make picric acid, or T.N.P., are concentrated sulfuric and nitric acids.
Aldawsari attempted to have the phenol order shipped to a freight company so it could be held for him there, but the freight company told Aldawsari that the order had been returned to the supplier and called the police. Later, Aldawsari falsely told the supplier he was associated with a university and wanted the phenol for “off-campus, personal research.” Frustrated by questions being asked over his phenol order, Aldawsari cancelled his order, placed an order with another company, and later emailed himself instructions for producing phenol. In December 2010, he had successfully purchased concentrated nitric and sulfuric acids.
Aldawsari used various email accounts in researching explosives and targets, and often sent emails to himself as part of this process. He emailed himself a recipe for picric acid, which was described in the email as a “military explosive” and also emailed himself instructions on how to convert a cell phone into a remote detonator and how to prepare a booby-trapped vehicle using household items. Aldawsari also purchased many other items, including a Hazmat suit, a soldering iron kit, glass beakers and flasks, a stun gun, clocks and a battery tester.
Excerpts from a journal found at Aldawsari’s residence indicated that he had been planning to commit a terrorist attack in the United States for years. One entry describes how Aldawsari sought and obtained a particular scholarship because it allowed him to come directly to the United States and helped him financially, which he said “will help tremendously in providing me with the support I need for Jihad.” The entry continues: “And now, after mastering the English language, learning how to build explosives and continuous planning to target the infidel Americans, it is time for Jihad.”
In another entry, Aldawsari wrote that he was near to reaching his goal and near to getting weapons to use against infidels and their helpers. He also listed a “synopsis of important steps” that included obtaining a forged U.S. birth certificate; renting a car; using different driver’s licenses for each car rented; putting bombs in cars and taking them to different places during rush hour; and leaving the city for a safe place.
Aldawsari conducted research on various targets and emailed himself information on these locations and people. One of the documents he sent himself, with the subject line listed as “Targets,” contained the names and home addresses of three American citizens who had previously served in the U.S. military and had been stationed for a time at Abu Ghraib prison in Iraq. In others, Aldawsari sent himself the names of 12 reservoir dams in Colorado and California and listed two categories of targets: hydroelectric dams and nuclear power plants. He also sent himself an email titled “Tyrant’s House,” in which he listed the Dallas address for former President George W. Bush. Aldawsari also conducted research that indicated he considered using infant dolls to conceal explosives and the possible targeting of a nightclub with an explosive concealed in a backpack.
This case was investigated by the FBI’s Dallas Joint Terrorism Task Force, which includes many federal, state and local partners, with assistance from the Lubbock Police Department and the Texas Tech Police Department. The prosecution was handled by Assistant U.S. Attorneys Jeffrey R. Haag, Denise Williams and Matthew J. Kacsmaryk and Trial Attorney David Cora from the Counterterrorism Section of the Justice Department’s National Security Division.
Roquette America Inc., to Pay $4.1 Million Penalty to Settle Violations of Clean Water Act at Its Keokuk, Iowa, FacilityRead the Press Release
Roquette America, Inc., has agreed to pay a $4.1 million civil penalty to settle alleged violations of the Clean Water Act and its National Pollutant Discharge Elimination System (NPDES) permit at its grain processing facility in Keokuk, Iowa, the Department of Justice and the Environmental Protection Agency (EPA) announced today.
As early as 2008, Roquette was aware that its waste water treatment plant was marginally adequate and that it could not handle spills or surges in loading. Instead of constructing additional containment structures for waste water surges, or routing spills to the waste water treatment plant, Roquette allowed the industrial waste to be discharged directly into the Mississippi River and Soap Creek.
“Roquette’s actions resulted in over a thousand permit violations and allowed the discharge of untreated industrial waste into the Mississippi River and another Iowa waterway even after it was informed on numerous occasions it was violating its state permit and federal law,” said Ignacia S. Moreno, Assistant Attorney General of the Justice Department’s Environment and Natural Resources Division. “This settlement holds Roquette accountable for its multiple violations of the nation’s Clean Water Act and requires sewer improvements, wastewater treatment upgrades, enhanced monitoring and independent compliance audits that will benefit public health and the environment for the people of Iowa for years to come.”
“The magnitude of these violations warrants the magnitude of the penalty,” said EPA Region 7 Administrator Karl Brooks. “The Mississippi River is a vital waterway, used by millions of Americans for commerce, recreation and drinking water. It is imperative that industrial facilities abide by their discharge permits to protect our valuable water resources.”
The Iowa Department of Natural Resources has issued three administrative orders and eight notices of violation to Roquette since 2000. Despite these orders and notices, Roquette continued to overload its waste water treatment plant and failed to address the deficiencies at other portions of its facility, resulting in permit violations and illegal discharges of untreated industrial waste.
The Keokuk facility violated its NPDES permit at least 1,174 times, and on at least 30 occasions illegally discharged via storm drains resulting in at least 250,000 gallons of industrial waste being released into the Mississippi River and Soap Creek. In addition to these permit violations and illegal discharges, Roquette discharged partially treated industrial waste from its waste water treatment plant, and discharged steam condensate into Soap Creek through an unpermitted outfall.
In addition to paying the penalty, Roquette will complete other requirements valued at more than $17 million to further protect the Mississippi River and Soap Creek. Among these requirements are the completion of a sewer survey to identify possible discharge locations, the implementation of sewer modifications, the construction of upgrades to the wastewater treatment plant, and the performance of enhanced effluent monitoring. In addition, Roquette will obtain annual third party audits of its compliance with the operations and maintenance program, the Storm Water Pollution Prevention Program, the company’s NPDES permits, and the compliance requirements set out in the consent decree.
The consent decree is subject to a 30-day public comment period and approval by the federal court. Once it is published in the Federal Register, a copy of the consent decree will be available on the Justice Department website at www.usdoj.gov/enrd/Consent_Decrees.html
Learn more about EPA’s civil enforcement of the Clean Water Act: www.epa.gov/compliance/civil/cwa/index.html
Justice Department Files Civil Rights Lawsuit Against the City of San Jacinto, California, Alleging Discrimination Against Persons with DisabilitiesRead the Press Release
The Justice Department has filed a lawsuit against the city of San Jacinto, Calif., alleging violations of the Fair Housing Act and the Americans with Disabilities Act based on its treatment of group homes for persons with disabilities. This lawsuit is part of the Justice Department’s continuing effort to enforce civil rights laws that require states and municipalities to end discrimination against, and unnecessary segregation of, persons with disabilities.
The lawsuit, filed on Friday in the U.S. District Court for the Central District of California, alleges that the city has impermissibly restricted the ability of group homes for people with disabilities to operate within the city. Under the city’s zoning code, group homes that are not required to be licensed by the state, as well as some licensed homes, are not permitted uses in any zoning district within the city, and their ability to operate in multi-family zones is restricted. The United States’ lawsuit further alleges that the city targeted housing for persons with disabilities for enforcement actions, including a November 2008 sweep in which city and county officials, including armed and uniformed police officers and sheriff’s deputies, appeared at homes unannounced and interrogated residents with disabilities from a prepared questionnaire that included intrusive questions targeted to persons with mental disabilities. The complaint also alleges that the city has conditioned the grant of reasonable accommodations on the adoption of unwarranted limitations on the residents of homes for persons with disabilities.
This lawsuit arose as a result of complaints filed with the U.S. Department of Housing and Urban Development (HUD) by the operators of group homes who were impacted by the city’s discriminatory enforcement activities.
The suit seeks a court order preventing the city from enforcing its laws in a way that unlawfully discriminates on the basis of disability, and prohibiting the city from failing to make reasonable accommodations. It also seeks monetary damages to compensate victims and a civil penalty.
“No person should be denied an equal opportunity for housing in his or her community, or suffer harassment or intimidation, because he or she is a person with a disability,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The Justice Department is committed to preventing discriminatory treatment of people with disabilities.”
“This suit is part of my office’s continuing efforts, in partnership with DOJ’s Civil Rights Division, to ensure that all residents of the Central District are accorded the rights to which they are entitled under the law,” said André Birotte Jr., U.S. Attorney for the Central District of California. “Under the law, people with disabilities, including mental disabilities, must be given the opportunity to live in our community, free from discriminatory efforts to exclude them. This suit seeks to ensure that this opportunity is fully and fairly provided.”
“Local governments may not zone out people with disabilities from the opportunity to live in mainstream communities,” said John Trasviña, HUD Assistant Secretary for Fair Housing and Equal Opportunity. “HUD and DOJ are united in our efforts to combat unlawful interference with the rights of people with disabilities, whether in the form of unfair zoning restrictions, selective enforcement of ordinances, or otherwise.”
The federal Fair Housing Act prohibits discrimination in housing on the basis of race, color, national origin, religion, sex, familial status and disability. Title II of the Americans with Disabilities Act requires that State and local governments give people with disabilities an equal opportunity to benefit from all of their programs, services and activities. More information about the Civil Rights Division and the laws it enforces is available at www.usdoj.gov/crt . Individuals who believe 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 (HUD) at 1-800-669-9777.
The complaint is an allegation of unlawful conduct. The allegations must still be proven in federal court.
Former U.S. Army Major Sentenced to 18 Months in Prison for Bribery Scheme Related to Department of Defense Contracts in KuwaitRead the Press Release
WASHINGTON – A former U.S. Army Major was sentenced today to 18 months in prison for his participation in a bribery scheme related to his activities as a contracting official in Camp Arifjan, Kuwait, in 2005 and 2006, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division.
James Momon Jr., 40, of Alexandria, Va., was sentenced today by U.S. District Judge Emmet G. Sullivan in the District of Columbia. In addition to his prison term, Momon was sentenced to serve three years of supervised release and pay $5.8 million in restitution, jointly and severally with co-defendants.
Momon pleaded guilty on Aug. 13, 2008, to two counts of bribery and one count of conspiracy.
According to plea documents, Momon, was involved in a criminal conspiracy to accept cash bribes from multiple U.S. Department of Defense (DoD) contracting firms that supplied bottled water and other goods and services to U.S. military bases in Kuwait. In return, Momon assisted in the award of contracts as well as blanket purchase agreements (BPA) – contracts that allow DoD to order supplies on an as-needed basis at a pre-negotiated price. Momon agreed to accept approximately $5.8 million from his co-conspirators as payment for his actions, including $1.6 million in cash and luxury items.
According to plea documents, Momon took over contracting duties at Camp Arifjan from former U.S. Army Major John C. Cockerham, who served as a contracting official in Kuwait in 2004 and 2005. Cockerham, who solicited and received bribes from DoD contractors in exchange for contracts and BPAs for bottled water and other goods and services, pleaded guilty for his role in the conspiracy in February 2008 and was sentenced to serve 210 months in prison and ordered to pay $9 million in restitution.
To date, a total of 19 individuals have pleaded guilty or been convicted at trial in the ongoing investigation of corrupt contracting at Camp Arifjan.
This case was prosecuted by Trial Attorneys Peter C. Sprung, Eric G. Olshan, Edward J. Loya Jr. and Timothy J. Kelly of the Criminal Division’s Public Integrity Section. The case is being investigated by special agents of the Defense Criminal Investigative Service, the Army Criminal Investigation Command Division, Internal Revenue Service-Criminal Investigation, the FBI and the Special Inspector General for Iraqi Reconstruction.
Friday 9 November 2012
United States Files Suit to Stop Virginia Man from Promoting Tax Fraud SchemeRead the Press Release
The United States has sued Charles Sewell of Bristol, Va., to bar him from promoting an alleged scheme involving fraudulent tax refund claims, the Justice Department announced today.
According to the government’s amended complaint, Sewell creates fraudulent types of Internal Revenue Service (IRS) Forms 1099 for other taxpayers and files them with the IRS. The fraudulent types of Forms 1099 are allegedly designed to help Sewell’s customers request large tax refunds to which they are not entitled, based on false claims of income earned and federal tax withheld. The complaint alleges that Sewell’s scheme is based on the “commercial redemption” theory, in which individuals make refund claims based on the bogus theory that the federal government maintains secret accounts for U.S. citizens and that taxpayers can gain access to the accounts by issuing 1099-OID forms to the IRS. The lawsuit alleges that Sewell’s customers sought $67 million in bogus refunds as a result of Sewell’s conduct.
Claiming bogus tax refunds based on false Forms 1099-OID is one of the IRS’s “Dirty Dozen” tax scams for 2012. In the past decade, the Justice Department’s Tax Division has obtained injunctions against hundreds of tax fraud promoters and unscrupulous tax preparers. Information about these cases is available on the Justice Department website.
Related Documents:
United States v. Charles Sewell, et al.
First Amended Complaint for Permanent Injunction and Other Equitable Relief (PDF)
Moneygram International Inc. Admits Anti-Money Laundering and Wire Fraud Violations, Forfeits $100 Million in Deferred ProsecutionRead the Press Release
WASHINGTON – MoneyGram International Inc. – a global money services business headquartered in Dallas – has agreed to forfeit $100 million and enter into a deferred prosecution agreement (DPA) with the Justice Department in which it admits to criminally aiding and abetting wire fraud and failing to maintain an effective anti-money laundering program, as charged in an information filed today in the Middle District of Pennsylvania.
The announcement was made by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney Peter Smith for the Middle District of Pennsylvania; and Karen V. Higgins, Inspector in Charge, Philadelphia Division, U.S. Postal Inspection Service (USPIS).
According to court documents, MoneyGram was involved in mass marketing and consumer fraud phishing schemes, perpetrated by corrupt MoneyGram agents and others, that defrauded tens of thousands of victims in the United States. MoneyGram also failed to maintain an effective anti-money laundering program in violation of the Bank Secrecy Act. The Justice Department will return the forfeited funds to the victims of the fraud scheme through its Victim Asset Recovery Program.
“MoneyGram’s broken corporate culture led the company to privilege profits over everything else,” said Assistant Attorney General Breuer. “MoneyGram knowingly turned a blind eye to scam artists and money launderers who used the company to perpetrate fraudulent schemes targeting the elderly and other vulnerable victims. In addition to forfeiting $100 million, which will be used to compensate victims, MoneyGram must for the next five years retain a corporate monitor who will report regularly to the Justice Department.”
U.S. Attorney Smith said, “Thousands of citizens in Pennsylvania and other states suffered heartbreaking financial losses for years because of these international telemarketing schemes which depended on MoneyGram’s facilities to give them an electronic highway to move their illegal profits quickly out of the country. The determined work of U.S. Postal Inspectors and federal prosecutors disrupted and closed that electronic highway, hopefully for good. This case provides a way to get restitution for victims and ensure that MoneyGram does its part to deter similar scams in the future.”
“This agreement demonstrates the ongoing and important work of the U.S. Postal Inspection Service in protecting consumers all across America,” said Karen V. Higgins, Inspector in Charge, Philadelphia Division. “Businesses are supposed to provide their customers with fair and honest services. Today’s agreement reflects the commitment of the U.S. Postal Inspection Service in seeking justice and, to every extent possible, restitution for the most vulnerable in our society.”
As part of the DPA, MoneyGram has agreed to enhanced compliance obligations and structural changes to prevent a repeat of the charged conduct, including:
Creation of an independent compliance and ethics committee of the board of directors with direct oversight of the chief compliance officer and the compliance program;
Adoption of a worldwide anti-fraud and anti-money laundering standard to ensure all MoneyGram agents throughout the world will, at a minimum, be required to adhere to U.S. anti-fraud and anti-money laundering standards;
Adoption of a bonus system which rates all executives on success in meeting compliance obligations, with failure making the executive ineligible for any bonus for that year; and
Adoption of enhanced due diligence for agents deemed to be high risk or operating in a high-risk area.To oversee implementation and maintenance of these enhanced compliance obligations and evaluate the overall effectiveness of its anti-fraud and anti-money laundering programs, MoneyGram has agreed to retain an independent corporate monitor who will report regularly to the Justice Department. Under the DPA, the department will recommend the dismissal of the criminal information in five years, provided MoneyGram fully abides by the DPA’s terms.
The Fraud Scheme
According to court documents, starting in 2004 and continuing until 2009, MoneyGram violated U.S. law by processing thousands of transactions for MoneyGram agents known to be involved in an international scheme to defraud members of the U.S. public. MoneyGram profited from the scheme by collecting fees and other revenues on the fraudulent transactions.
The scams – which generally targeted the elderly and other vulnerable groups – included posing as victims’ relatives in urgent need of money and falsely promising victims large cash prizes, various high-ticket items for sale over the Internet at deeply discounted prices or employment opportunities as “secret shoppers.” In each case, the perpetrators required the victims to send them funds through MoneyGram’s money transfer system.
Despite thousands of complaints by customers who were victims of fraud, MoneyGram failed to terminate agents that it knew were involved in scams. As early as 2003, MoneyGram’s fraud department would identify specific MoneyGram agents believed to be involved in fraud schemes and recommended termination of those agents to senior management. These termination recommendations were rarely accepted because they were not approved by executives in the sales department and, as a result, fraudulent activity grew from 1,575 reported instances of fraud by customers in the United States and Canada in 2004 to 19,614 reported instances in 2008. Cumulatively, from 2004 through 2009, MoneyGram customers reported instances of fraud totaling at least $100 million.
The USPIS and U.S. Attorney’s Office for the Middle District of Pennsylvania have been investigating and prosecuting telemarketing scams that used MoneyGram’s money transfer system and corrupt MoneyGram agents since 2007. To date, the U.S. Attorney’s Office for the Middle District of Pennsylvania has brought conspiracy, fraud and money laundering charges against 28 former MoneyGram agents.
Ineffective Anti-Money Laundering Program
MoneyGram’s involvement in this international fraud scheme resulted from a systematic, pervasive, and willful failure to meet its anti-money laundering (AML) obligations under the Bank Secrecy Act (BSA), a set of laws and regulations enacted by Congress to strengthen the U.S. financial system’s protections against criminal money laundering activity through financial institutions, including money services businesses like MoneyGram. Court documents show that MoneyGram failed to meet its AML obligations by, among other things, failing to:
Implement policies or procedures governing the termination of agents involved in fraud and/or money laundering;
Implement policies or procedures to file the required Suspicious Activity Reports (SARs) when victims reported fraud to MoneyGram on transactions over $2,000;
File SARs on agents MoneyGram knew were involved in the fraud;
Conduct effective AML audits of its agents and outlets;
Conduct adequate due diligence on prospective and existing MoneyGram Agents by verifying that a legitimate business existed; and
Sufficiently resource and staff its AML program.MoneyGram’s BSA failures spanned five years, and resulted, among other things, from the failure of its fraud and AML compliance functions to share information and from its regularly resolving disagreements between its sales and fraud departments in the sales department’s favor. One notable such disagreement occurred in April 2007, when, at a meeting attended by senior MoneyGram executives, the fraud department recommended that 32 specific Canadian agents that were characterized as “the worst of the worst” in terms of fraud be immediately closed. The sales department disagreed with the fraud department’s recommendation, and these outlets were not closed; instead, MoneyGram continued to process transactions from the 32 outlets despite continued complaints of fraud.
This case was prosecuted by Money Laundering and Bank Integrity Unit Trial Attorney Craig Timm of the Criminal Division’s Asset Forfeiture and Money Laundering Section (AFMLS) and Assistant U.S. Attorney Kim Douglas Daniel of the U.S. Attorney’s Office for the Middle District of Pennsylvania. The forfeiture was handled by Acting Assistant Deputy Chief Jeannette Gunderson of AFMLS’ Forfeiture Unit. The case was investigated by the Harrisburg, Pa., office of the USPIS, Philadelphia Division.
The Money Laundering and Bank Integrity Unit is a corps of prosecutors with a boutique practice aimed at hardening the financial system against criminal money laundering vulnerabilities by investigating and prosecuting financial institutions and professional money launderers for violations of the money laundering statutes, the Bank Secrecy Act and other related statutes.
Information regarding victim compensation through the Victim Asset Recovery Program (VARP) will be posted on the Department of Justice’s victim website at http://www.justice.gov/criminal/vns/caseup/. Persons who believe they were victims of the fraud scheme should visit that site for instructions on how to request compensation.
VARP, operated by AFMLS, is composed of a team of experienced professionals, including attorneys, accountants, auditors and claims analysts. In hundreds of cases, VARP has successfully used its specialized expertise to efficiently convert forfeited assets to victim recoveries.
Mississippi Laboratory Operator Charged with Falsifying Records on Industrial WastewaterRead the Press Release
An owner and sole operator of an environmental laboratory has been charged in U.S. District Court for the Southern District of Mississippi with falsification of records and obstructing a federal criminal investigation, announced U.S. Attorney for the Southern District of Mississippi Gregory K. Davis and Assistant Attorney General Ignacia S. Moreno of the Justice Department’s Environment and Natural Resources Division.
Tennie White, owner, operator and manager of Mississippi Environmental Analytical Laboratories Inc. was charged in a three-count felony indictment with two false statements counts and one count of obstructing proceedings.
According to the indictment, White was hired to perform laboratory testing of a manufacturer’s industrial process waste water samples and then to use those results to complete monthly discharge monitoring reports for submission to the Mississippi Department of Environmental Quality (MDEQ). The indictment alleges that from February to August 2009 White created three discharge monitoring reports (DMRs) that falsely represented that laboratory testing had been performed on samples when, in fact, such testing had not been done. The indictment further alleges that White created a fictitious laboratory report and presented it to her client for use in preparing another DMR.
The indictment further alleges that White made false statements to a federal agent during a subsequent criminal investigation.
An indictment is not a finding of guilt, and a defendant is presumed innocent unless and until proven guilty in a court of law.
The false statements charges carry a maximum sentence of five years in prison and a $250,000 fine per count. The obstructing proceedings charge carries a maximum sentence of 20 years in prison and a $250,000 fine.
This case is being prosecuted by Trial Attorney Richard J. Powers of the Environmental Crimes Section of the Justice Department’s Environment and Natural Resources Division, and Assistant U.S. Attorney Gaine Cleveland of the U.S. Attorney’s Office for the Southern District of Mississippi.
Las Vegas Woman Convicted for Role in Mortgage Fraud SchemeRead the Press Release
WASHINGTON – A Las Vegas mortgage agent was found guilty today for participation in a mortgage fraud scheme that netted $1.2 million in fraudulent mortgage loans, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney Daniel G. Bogden of the District of Nevada and Special Agent in Charge Kevin Favreau of the FBI’s Las Vegas Field Office.
After a four-day trial before U.S. District Judge Miranda Du in the District of Nevada, a federal jury convicted Heidi Haischer, 44, of one count of wire fraud and one count of conspiracy to commit wire fraud for submitting fraudulent loan documents to purchase two homes.
According to court documents and evidence presented at trial, Haischer submitted to lending institutions loan applications in which she misrepresented her income, submitted false verification of employment and misrepresented her intent to reside in one of the properties as her primary residence. Evidence at trial established that Haischer participated in an illegal property flipping ring that fraudulently obtained properties that Haischer and her co-conspirators intended to sell for a profit. Haischer and her co-conspirators also enriched themselves by collecting brokerage commissions generated by the sales of the properties.
Co-conspirator Kelly Nunes was convicted in a related case in Las Vegas on Feb. 2, 2012, of one count of bank fraud and one count of conspiracy to commit wire and bank fraud.
This case was investigated by the FBI. Trial Attorneys Thomas B.W. Hall and Brian R. Young of the Criminal Division’s Fraud Section are prosecuting the case, with assistance from the U.S. Attorney’s Office for the District of Nevada.
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.
Justice Department Seeks to Shut Down Ohio Promoterof Alleged Tax-fraud SchemeRead the Press Release
The Justice Department announced today that it has asked a federal court in Columbus, Ohio, to permanently bar John Allen from promoting tax-fraud schemes and preparing federal tax returns. The civil injunction lawsuit alleges that Allen, who does business as Allen & Associates, promotes several schemes involving the preparation of fraudulent federal income tax returns based on the false premise that his customers do not receive “wages” as defined by law.
The complaint alleges that Allen has promoted at least three tax-fraud schemes, moving from scheme to scheme when the Internal Revenue Service (IRS) identifies the bogus nature of the tax returns that are filed as part of Allen’s arrangement. The complaint alleges that, as part of the promotion, Allen prepares his customers’ tax returns, but does not sign the returns as the preparer. According to the complaint, Allen prepares frivolous letters addressed to the Secretary of the Treasury and the commissioner of the IRS on behalf of customers, and also aided a customer in an attempt to file a frivolous lien against the United States by preparing a bogus lien document and directing his customer to file it. Allen allegedly solicits up-front fees of $250 from customers to prepare their returns and handle any correspondence with the IRS, and asks for a “donation” of 10% of any refund issued to his customers by the IRS.
The complaint further alleges that Allen falsely holds himself out as an attorney to his customers and to third parties, including the IRS, despite being enjoined from the unauthorized practice of law by the Supreme Court of Ohio.
The Justice Department has obtained injunctions against hundreds of tax-return preparers and tax-fraud promoters in the past decade. Information about these cases is available on the Justice Department website.
Related Documents:
United States v. John Allen, etc.
Complaint for Permanent Injunction and Other Relief
Justice Department Reaches Settlementwith Georgia School District to Ensure All StudentsCan Enroll in and Attend SchoolRead the Press Release
The Justice Department announced that it has entered into a settlement agreement with the Henry County School District in Henry County, Ga., to ensure that all students in the district are able to enroll in school, regardless of national origin or immigration status. The settlement agreement resolves the department’s investigation into allegations that the district improperly notified parents that their children would be withdrawn from school for not providing a social security number, and failed to make its enrollment procedures accessible to parents with limited proficiency in English.
Under the settlement agreement, the district will ensure that all parents understand that providing their child’s social security number is voluntary, and no child will be denied enrollment or attendance in school for declining to provide a social security number. The settlement agreement also requires the district to provide parents who have limited English proficiency with enrollment and registration information in a language they can understand. The district further agreed to conduct training for administrators and staff on registration and enrollment procedures and proper communication with limited English proficient parents.
“Public schools serve all children in this country, no matter where they or their parents were born,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “No one benefits when a child is kept out of the classroom. The Justice Department is committed to ensuring that all that students and their families are welcomed in school, regardless of background. ”
“No child should face barriers to enrolling in school,” said Sally Quillian Yates, U.S. Attorney for the Northern District of Georgia “We commend the Henry County School District for working collaboratively with the department and for taking the steps necessary to enroll all students and communicate effectively with limited English proficient families.”
The settlement agreement reflects guidance that the Georgia Department of Education issued to all Georgia school districts in September 2012, after the Justice Department raised concerns about student enrollment practices in the state. The new guidance makes clear that no student can be denied enrollment in any public school or program for declining to provide a social security number or declining to apply for a social security number.
The enforcement of Title IV of the Civil Rights Act of 1964, which prohibits discrimination on the basis of race or national origin in public schools, and of the Equal Educational Opportunities Act of 1974, which r equires schools to take appropriate action to overcome language barriers that impede students’ equal participation in instructional programs, are top priorities of the Justice Department’s Civil Rights Division. Additional information about the Civil Rights Division of the Justice Department is available on its website at www.justice.gov/crt.
Related Materials:
Henry County, Ga., School District Settlement
Former U.S. Immigration and Customs Enforcement Miami Office Special Agent in Charge Sentenced to 70 Months in Prison for Transporting Child PornographyRead the Press Release
WASHINGTON – A former Special Agent in Charge of the U.S. Immigration and Customs Enforcement (ICE) Miami Office was sentenced today to serve 70 months in prison for transporting child pornography, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, Acting Special Agent in Charge Michael B. Steinbach of the FBI Miami Field Office and Sheriff Al Lamberti of the Broward County, Fla., Sheriff’s Office.
Anthony Mangione, 52, of Parkland, Fla., was sentenced by U.S. District Judge Kenneth A. Marra in West Palm Beach, Fla. In addition to his prison term, Mangione was sentenced to serve 20 years of supervised release.
On July 16, 2012, Mangione pleaded guilty to one count of transportation of child pornography in U.S. District Court in the Southern District of Florida. He was indicted on Sept. 27, 2011, by a grand jury in Fort Lauderdale, Fla.
According to court documents, between March 2010 and September 2010, Mangione used a computer and other means to transport visual depictions of minors engaging in sexually explicit conduct. Specifically, according to court documents, Mangione established several AOL email accounts to transport numerous images of minors engaging in sexually explicit conduct, including transmitting several images to an individual in Delaware.
During the period of time in which he transported child pornography, Mangione served as the Special Agent in Charge for the ICE Miami Office. Mangione was placed on administrative leave by ICE in April 2011 and has since retired.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child exploitation and abuse. 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, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
This case was prosecuted by Deputy Chief Alexandra R. Gelber and Trial Attorney Michael W. Grant of CEOS. The investigation was conducted by the Broward County Sheriff’s Office and the FBI, with assistance from the Department of Homeland Security, Office of the Inspector General.
Army National Guard Recruiter Admits Crimes in<br /> Fraudulent Recruiting Referral Bonus SchemeRead the Press Release
An Army National Guard recruiter pleaded guilty today in the Western District of Texas for his role in a bribery and fraud scheme that caused approximately $98,000 in losses to the Army National Guard Bureau, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division.
Staff Sergeant Jermaine Britt, 39, of Richmond, Texas, pleaded guilty to a three-count criminal information charging him with one count of bribery, one count of conspiracy to commit bribery and wire fraud and one count of obstruction of justice. The criminal information was filed on Nov. 2, 2012, in the U.S. District Court for the Western District of Texas.
The case against Britt arises from an investigation involving allegations that former and current military recruiters and U.S. soldiers in the San Antonio and Houston areas engaged in a wide-ranging bribery and fraud scheme to illegally obtain fraudulent recruiting bonuses. To date, the investigation has led to charges againstten individuals, all of whom have now pleaded guilty.
According to court documents, in approximately September 2005, the National Guard Bureau entered into a contract with Document and Packaging Broker Inc. to administer a recruiting program designed to offer monetary incentives to soldiers of the Army National Guard who referred others to join. Through this program, a participating soldier could receive up to $2,000 in bonus payments for every person whom the participating soldier referred to join the Army National Guard. Based on certain milestones achieved by the referred soldier, a participating soldier would receive payment through direct deposit into the participating soldier’s designated bank account. To participate in the program, soldiers were required to create online recruiting assistant accounts.
According to court documents, Britt enlisted in the Army National Guard in approximately July 2005, and served as a military recruiter from approximately November 2006. Britt admitted that between approximately May 2008 and April 2011, he and other recruiters obtained the names and Social Security numbers of potential soldiers and provided them to recruiting assistants, including Stephanie Heller, with the understanding that these recruiting assistants would use the information to obtain fraudulent recruiting bonuses. The recruiting assistants used the information to claim they were responsible for referring these potential soldiers to join the Army National Guard, when they were not. In exchange, Britt admitted that he personally received a total of $23,750 in cash payments.
Britt also admitted that after learning of a federal investigation into the fraudulent bonus scheme, he attempted to persuade Heller to falsify her statements to special agents of the U.S. Army Criminal Investigation Command (Army CID agents), whom Britt understood at the time were conducting a federal investigation of Britt’s and Heller’s unlawful activities. Specifically, Britt coached Heller on how she could provide false exculpatory explanations to Army CID agents concerning, among other things, Heller’s large cash withdrawals from her personal bank account, Britt’s e-mails to Heller in which he provided her with the personal identifiers of potential soldiers, and Heller’s use of Britt’s military computer to make fraudulent referrals under her recruiting assistant account.
On Oct. 4, 2012, Stephanie Heller pleaded guilty to one count of bribery and one count of conspiracy to commit bribery and wire fraud in connection with her unlawful dealings with Britt and another recruiter and her personal receipt of approximately $44,500 in fraudulent recruiting bonuses.
The charge of bribery carries a maximum potential penalty of 15 years in prison, the charge of conspiracy carries a maximum potential penalty of five years in prison and the charge of obstruction carries a maximum potential penalty of 20 years in prison. Each charge also carries a maximum $250,000 fine, or twice the pecuniary gain or loss from the offense. Sentencing has been scheduled for Feb. 8, 2013, before Chief U.S. District Judge Fred Biery in San Antonio.
The case is being prosecuted by Trial Attorneys Edward J. Loya Jr., Brian A. Lichter, and Sean F. Mulryne of the Criminal Division’s Public Integrity Section. The case is being investigated by agents from the San Antonio Fraud Resident Agency of the Major Procurement Fraud Unit, U.S. Army Criminal Investigation Command.
Alabama Real Estate Developer Charged with Illegally Filling Protected Mississippi WetlandsRead the Press Release
William R. “Rusty” Miller, a real estate developer from Fairhope, Ala., has been indicted by a federal grand jury in Jackson, Miss., for the unpermitted filling of wetlands near Bay St. Louis, Miss., in violation of the Clean Water Act, announced U.S. Attorney for the Southern District of Mississippi Gregory K. Davis and Assistant Attorney General Ignacia S. Moreno of the Justice Department’s Environment and Natural Resources Division.
The indictment alleges that during 2007, Miller caused the excavation and filling of wetlands on a 1,710 acre parcel of undeveloped property in Hancock County, west of the intersection of Route 603 and Interstate 10. The indictment states that Miller was a part-owner of corporations that purchased and intended to develop the land. It alleges that in 2001 when Miller and his companies purchased the property, he was informed by a wetland expert that as much as 80 percent of the land was federally protected wetland connected by streams and bayous leading to the Gulf of Mexico and as such could not be developed without a permit from the U.S. Army Corps of Engineers. Such permits typically require that developers protect and preserve other wetlands to compensate for those they are permitted to fill and destroy. In spite of additional notice he had received of the prohibition against filling and draining wetland without authorization, the indictment alleges that Miller hired an excavation contractor to trench, drain, and fill large portions of the property to lower the water table and thus to destroy the wetland that would otherwise be an impediment to commercial development.
The indictment charges that Miller knowingly ditched, drained and filled wetland at 10 locations on the Hancock County property without having obtained a permit from the Army Corps of Engineers. It also charges him with the unauthorized discharge of silt, sand, vegetation, debris and other material into and from canals and ditches on the Hancock County property into tributaries of Bayou Marone, a tributary of the Jourdan River.
It is a felony under the Clean Water Act for any person knowingly to discharge pollutants into waters of the United States without a permit. Any person convicted of this offense is subject to imprisonment of up to three years and a penalty of not more than $250,000.
An indictment is merely an accusation, and a defendant is presumed innocent unless and until proven guilty in a court of law.
34 Alleged Aryan Brotherhood of Texas Gang Members <br /> Indicted on Federal Racketeering ChargesRead the Press Release
Thirty-four alleged members of the Aryan Brotherhood of Texas gang (ABT), including four of its most senior leaders, have been indicted by a federal grand jury in Houston for allegedly conspiring to participate in a racketeering enterprise, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney Kenneth Magidson of the Southern District of Texas, Special Agent in Charge Melvin D. King of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Houston Division and FBI Special Agent in Charge Stephen L. Morris of the Houston Field Office.
The 17 count superseding indictment was returned by a federal grand jury on Oct. 22, 2012, and unsealed today in U.S. District Court in the Southern District of Texas. Fourteen individuals were taken into custody today, and 15 defendants charged in the superseding indictment are already in custody. Five defendants remain at large.
“Today’s takedown represents a devastating blow to the leadership of ABT,” said Assistant Attorney General Breuer. “Four ABT generals, 13 additional alleged ABT leaders, and numerous other gang members and associates are named in the indictment. As charged, ABT uses extreme violence and threats of violence to maintain internal discipline and retaliate against those believed to be cooperating with law enforcement. Through violence and intimidation, ABT allegedly exerts control over prison populations and neighborhoods, and instills fear in those who come in contact with its members. As today’s operations show, the Criminal Division, working closely with its federal, state, and local law enforcement partners, is determined to continue disrupting and dismantling ABT and other violent, criminal gangs.”
“This indictment is the culmination of a joint federal, state and local law enforcement effort targeting a large-scale prison gang involved in violent organized crime,” said U.S. Attorney Magidson. “Only when we work in partnership utilizing all our resources can we attack a criminal organization and dismantle it entirely.”
“ATF is serious about fighting violent crime. We remain steadfast in our commitment to focus on those violent criminals who illegally use firearms to prey on their victims,” said ATF Special Agent in Charge King. “Through a collective effort with our law enforcement partners this operation was a success today.”
“This multi-year investigation and indictment clearly targets the worst-of-the-worst among the ABT,” said FBI Special Agent in Charge Morris. “This effort not only exemplifies the level of effort the FBI and our law enforcement partners will expend to prevent prison gang racism and criminal activity from poisoning our communities. It sends a clear message that we will relentlessly pursue and prosecute the leaders and members of these criminal enterprises regardless of where they lay their heads.”
As charged, the defendants range from senior leaders to soldiers of the ABT, a “whites only,” prison-based gang with members operating inside and outside of state and federal prisons throughout Texas and elsewhere in the United States since at least the early 1980s.
According to court documents, the ABT has a detailed and uniform organizational structure, with territory divided into five regions, each run by a “general.” The superseding indictment charges four generals, Terry Ross Blake, 55, aka “Big Terry”; Larry Max Bryan, 51, aka “Slick”; William David Maynard, 42, aka “Baby Huey”; and Charles Lee Roberts, 68, aka “Jive,” with conspiracy to participate in the racketeering activities of the ABT, among other charges.
In total, the superseding indictment charges 34 alleged members of the ABT with conspiracy to participate in the racketeering activities of the ABT. Alleged members of the ABT are also charged with involvement in three murders, multiple attempted murders, kidnappings, assaults and conspiracy to distribute methamphetamine and cocaine.
According to the superseding indictment, the ABT was established in the early 1980s within the Texas prison system. The gang modeled itself after and adopted many of the precepts and writings of the Aryan Brotherhood, a California-based prison gang that was formed in the California prison system during the 1960s. According to court documents, previously, the ABT was primarily concerned with the protection of white inmates and white supremacy/separatism. Over time, the ABT is alleged to have has expanded its criminal enterprise to include illegal activities for profit.
Court documents allege that the ABT enforced its rules and promoted discipline among its members, prospects and associates through murder, attempted murder, conspiracy to murder, arson, assault, robbery and threats against those who violate the rules or pose a threat to the enterprise. Members, and oftentimes associates, were required to follow the orders of higher-ranking members, often referred to as “direct orders.”
According to the superseding indictment, in order to be considered for membership, a person must be sponsored by another ABT member. Once sponsored, a prospective member must serve an unspecified term, during which he is referred to as a prospect, while his conduct is observed by the members of the ABT.
Ten defendants have been charged with offenses that are eligible for the death penalty. The remaining 24 defendants face a maximum penalty of life in prison.
An indictment is not evidence of guilt. All defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
This case is being investigated by a multi-agency task force consisting of the ATF; Drug Enforcement Administration; FBI; U.S. Marshals Service; Federal Bureau of Prisons; U.S. Immigration and Customs Enforcement Homeland Security Investigations; Texas Rangers; Texas Department of Public Safety; the Montgomery County, Texas, Sheriff’s Department; Houston Police Department-Gang Division; Texas Department of Criminal Justice – Office of Inspector General; Harris County, Texas, Sheriff’s Office; Tarrant County, Texas, Sheriff’s Office; Atascosa County, Texas, Sheriff’s Office; Orange County, Texas, Sheriff’s Office; Waller County, Texas, Sheriff’s Office; Fort Worth, Texas, Police Department; San Antonio Police Department; Baytown, Texas, Police Department; Carrollton, Texas, Police Department; Alvin, Texas, Police Department; Montgomery County District Attorney’s Office; Atascosa County District Attorney’s Office; Harris County District Attorney’s Office; and the Kaufman County, Texas, District Attorney’s Office.
The case is being prosecuted by David Karpel of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorney Jay Hileman of the Southern District of Texas.
Related Materials:
Assistant Attorney General Lanny A. Breuer Speaks at Press Conference to Announce Charges Against Alleged Aryan Brotherhood of Texas Leaders
Fact Sheet of Defendants and Charges
Thursday 8 November 2012
Virginia Charter Fishing Boat Captains Indicted for Lacey Act Violations and Other CrimesRead the Press Release
WASHINGTON – Five charter fishing boat captains operating out of Rudee Inlet in Virginia Beach, Va. – Jeffery S. Adams, Raymond Carroll Webb, David Dwayne Scott, William W. “Duby” Lowery, IV and Nolan L. Agner – were indicted today for violating the Lacey Act by selling illegally harvested Striped Bass, the Department of Justice Environment and Natural Resources Division and the U.S. Attorney for the Eastern District of Virginia announced. The captains also face charges of making false statements to law enforcement officers and destroying property to prevent its seizure by law enforcement.
In 1984, Congress passed the Atlantic Striped Bass Conservation Act, recognizing that “Atlantic striped bass are of historic commercial and recreational importance and economic benefit to Atlantic coastal States and to the Nation,” and that it “is in the national interest to implement effective procedures and measures to provide for effective inter-jurisdictional conservation and management of this species.” Since 1990, the Secretary of Commerce has imposed a moratorium on fishing for Striped Bass within the Exclusive Economic Zone (EEZ), the zone where the U.S. and other coastal nations have jurisdiction over economic and resource management. The moratorium makes it unlawful to fish for or harvest Striped Bass in the EEZ. The moratorium also makes it unlawful to retain any Striped Bass that were taken in or from the EEZ.
The Lacey Act makes it unlawful for any person to import, export, transport, sell, receive, acquire or purchase any fish and wildlife taken, possessed, transported or sold in violation of any law or regulation of the United States, or to attempt to do so. Such conduct constitutes a felony crime if the defendant knowingly engaged in conduct involving the sale, offer to sell or intent to sell fish with a market value in excess of $350, knowing that the fish were taken, possessed, transported or sold in violation of, or in a manner unlawful under, a law or regulation of the United States. Under the Lacey Act, it is a “sale” of fish or wildlife for any person, for money or other consideration, to offer or provide guiding, outfitting, or other services.
Each of the five charter fishing boat captains face charges that they sold charter fishing trips and harvested Striped Bass from the EEZ.
Jeffrey Adams, captain of the F/V Providence II, and his corporation Adams Fishing Adventures, are charged with conspiracy, trafficking in illegally harvested Striped Bass in violation of the Lacey Act and making false statements to law enforcement officers. The indictment alleges that, between March 4, 2009, and Feb. 9, 2011, the defendants sold charter fishing trips to harvest Striped Bass illegally from the EEZ. The indictment also alleges that, as part of the conspiracy, Adams and others would puncture the air bladder of Striped Bass and, if contacted by law enforcement, would throw illegally-harvested Striped Bass into the sea in hopes of avoiding detection. Adams is also charged with making a false statement to law enforcement officers regarding the location where his charter fishing clients harvested Striped Bass.
Raymond Carroll Webb, captain of the F/V Spider Webb, and his corporation Peake Enterprisees, Ltd., were charged with trafficking in illegally harvested Striped Bass and Destruction of Evidence for actions taken during a Striped Bass charter fishing trip on Feb. 12, 2011.
David Dwayne Scott, captain of the Stoney’s Kingfisher, was charged with trafficking in illegally harvested Striped Bass and destruction of evidence for actions taken during a Striped Bass charter fishing trip on Feb. 7, 2009.
William W. “Duby” Lowery, captain of the Anna Lynn, was charged with trafficking in illegally harvested Striped Bass and destruction of evidence for actions taken during a Striped Bass charter fishing trip on Jan. 15, 2010.
Nolan L. Agner, captain of the Flat Line, and his corporation, Agner, Inc., were charged with trafficking in illegally harvested Striped Bass for actions taken during a Striped Bass charter fishing trip on Jan. 16, 2011.
If convicted, the individual defendants face a maximum penalty of five years in prison, and a $250,000 fine per count, as well as forfeiture of the fishing vessels used during the commission of the crimes. If convicted, the corporate defendants face a maximum penalty of a $500,000 fine per count, as well as forfeiture of the fishing vessels used during the commission of the crimes.
The case was investigated by the National Oceanic and Atmospheric Administration, Fisheries, Office for Law Enforcement, and the Virginia Marine Police with assistance from the Federal Communications Commission Enforcement Bureau, Norfolk Office. The case is being prosecuted by Department of Justice’s Environmental Crimes Section of the Justice Department’s Environment and Natural Resources Division and the U.S. Attorney’s Office for the Eastern District of Virginia.
An indictment is a formal accusation and is not proof of guilt. Defendants are presumed innocent until and unless they are found guilty.
US Government Intervenes in False Claims Lawsuit<br /> <br /> Against Fluor CompaniesRead the Press Release
The government has intervened in a lawsuit against Fluor Hanford Inc. and its parent company, Fluor Corporation (collectively Fluor), in the U.S. District Court for the Eastern District of Washington, the Justice Department announced today. Fluor Hanford, Inc. is a subsidiary of Fluor Corporation, a Texas-based corporation that provides a wide variety of services to government and private customers. The False Claims Act lawsuit was originally filed by whistleblower Loydene Rambo, a former employee of Fluor.
Between 1999 and 2008, Fluor had a prime contract with the Department of Energy (DOE) to provide a wide variety of security, maintenance and operational services at the DOE’s Hanford Nuclear Site in southeastern Washington State. As part of its contract, Fluor was responsible for managing and operating the Hazardous Materials Management and Emergency Response (HAMMER) Center, a federally-funded facility established to train Hanford site workers as well as first responders and law enforcement personnel.
The whistleblower complaint alleges that, as a condition of receiving its DOE contract, Fluor was required to certify that it would not use federal funds for lobbying activities. The complaint further alleges that between 2005 and 2008, Fluor ignored these restrictions and used DOE funding to lobby Congress and executive branch officials for more funding for HAMMER. The complaint alleges that Fluor, and two lobbying firms hired by Fluor and paid using DOE funds, Secure Horizons LLC and Congressional Strategies LLC, lobbied members of Congress and executive branch agencies to include additional funds for HAMMER in agency appropriations. The United States intervened in the lawsuit with respect to Fluor, but declined to intervene with respect to additional defendants, including Secure Horizons LLC and Congressional Strategies LLC.
“The taxpayer money Congress allocated for this program was for training federal emergency response personnel and first responders, not to lobby Congress and others for more funding,” said Stuart F. Delery, Acting Assistant Attorney General for the Civil Division of the Department of Justice. “When public funds are misused, as alleged in this case, the Justice Department will work to restore them to the Treasury.”
“The allegations set forth in the whistleblower complaint are troubling and very serious,”
said Michael C. Ormsby, U.S. Attorney for the Eastern District of Washington. “My Office will continue to work with the Justice Department to ensure a just resolution of these alleged violations of federal law.”
Ms. Rambo’s lawsuit was filed under the False Claims Act, which authorizes private parties to sue on behalf of the United States and share in any recovery. The act authorizes the United States to intervene in such a suit and take over the responsibility for litigating it. The United States has informed the court that it intends to file its own complaint in the action.
The case is being handled by the Civil Division of the Department of Justice and the U.S. Attorney’s Office for the Eastern District of Washington, with the assistance of the Department of Energy Office of Inspector General.
Ms. Rambo’s lawsuit is captioned U.S. ex rel. Rambo v. Fluor Hanford, et al., cv-11-5037. The claims asserted in this case are allegations only, and there has been no determination of liability.
Two Former U.S. Soldiers Sentenced for Roles in Fraudulent Military Recruiting Referral Bonus SchemeRead the Press Release
WASHINGTON – Two former members of the U.S. military were sentenced today for their participation in a conspiracy to obtain approximately $244,000 in fraudulent recruiting referral bonuses from various U.S. military components and their contractor, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division.
Grant E. Bibb, 41, of Eagle Pass, Texas, and Paul Escobar, 32, of San Antonio, were sentenced today by Chief U.S. District Judge Fred Biery in the Western District of Texas. Judge Biery sentenced Bibb to serve one year and one day in prison and three years of supervised release. Escobar was sentenced to six months in prison, six months of community confinement and three years of supervised release. Judge Biery also held Bibb and Escobar jointly and severally liable for $244,000 in restitution.Bibb pleaded guilty to conspiracy to commit wire fraud on Jan. 30, 2012. Escobar pleaded guilty to conspiracy to commit wire fraud on July 19, 2012.
According to court documents, Bibb served in the Texas National Guard between January 2003 and July 2007 and in the U.S. Army Reserves from October 2007 until November 2010. In addition, from December 2007 until April 2009, Bibb worked as a contract military recruiter in Katy, Texas.
Escobar served in the U.S. Army Reserves from November 2005 until February 2007. Escobar then served in the U.S. Army from November 2007 to January 2010.
According to court documents, between 2005 and 2008, the U.S. Army, the U.S. Army Reserves and the National Guard Bureau entered into contracts with Document and Packaging Broker Inc. (Docupak) to administer recruiting bonus programs designed to offer monetary incentives to soldiers who referred others to join the U.S. military. In addition, the Army managed its own recruiting bonus programs, which offered bonuses to soldiers who referred other individuals to join the Army or the Army Reserves after registering online as recruiting assistants (RA) or sponsors. Through these recruiting programs, a participating soldier could receive up to $2,000 in bonus payments for every person he referred to serve in the U.S. military.
Bibb and Escobar admitted that they participated in a fraud scheme whereby active duty and civilian contract recruiters provided RAs and sponsors with the names and Social Security numbers of “walk-in” soldiers, which are individuals who decided to join the military without being referred by anyone. Using this information, the RAs and sponsors claimed credit for referring these potential soldiers to join the military, when in fact they did not refer them. As part of the fraud scheme, the RAs and sponsors split the bonus payments with the recruiters and others who provided the potential soldiers’ personal identifying information.
According to court documents, Bibb, Escobar and their co-conspirators received at least $244,000 in fraudulent recruiting referral bonuses in total. Bibb personally received $35,000 in fraudulent recruiting referral bonuses using RA accounts in his name and an RA account in a relative’s name. Bibb also worked with other soldiers and active duty recruiters to set up RA accounts in those soldiers’ names for the purpose of claiming fraudulent recruiting referral bonuses. Bibb, the recruiters and at least four soldiers split a total of at least $4,000 in fraudulent bonuses. Escobar permitted a co-conspirator to receive $6,000 in fraudulent recruiting referral bonuses using Escobar’s RA account and made fraudulent representations to Docupak to carry out the scheme.
This case arose from an investigation concerning allegations that former and current soldiers and military and civilian contract recruiters in the San Antonio area engaged in a wide-ranging scheme to obtain fraudulent recruiting referral bonuses. To date, 9 individuals have been charged, all of whom have pleaded guilty. The investigation is ongoing.
The case is being prosecuted by Trial Attorneys Edward J. Loya Jr., Brian A. Lichter and Sean F. Mulryne of the Criminal Division’s Public Integrity Section. The case is being investigated by agents from the San Antonio Fraud Resident Agency of the Major Procurement Fraud Unit, U.S. Army Criminal Investigation Division.