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Thursday 8 November 2012
Texas Inmate Pleads Guilty to Federal Hate Crimefor Assaulting Fellow InmateRead the Press Release
John Hall, 27, an inmate at the Federal Correctional Institution in Seagoville, Texas, pleaded guilty today in federal court to violating the Matthew Shepard and James Byrd, Jr. Hate Crimes Prevention Act stemming from his assault of a fellow inmate, who he believed to be gay, the Department of Justice announced. Hall assaulted his fellow inmate with a dangerous weapon, causing bodily injury to the victim on Dec. 20, 2011.
According to information presented during the plea hearing, Hall targeted the victim, a fellow inmate, because of the victim’s perceived sexual orientation. Hall admitted that he assaulted the victim because of his perceived sexual orientation by repeatedly punching and kicking the victim while calling the victim gay slurs. The victim sustained multiple lacerations to his face, and chipped and fractured teeth as a result of Hall’s unprovoked attack. The assault occurred inside the Federal Correctional Institution, which is within the special maritime or territorial jurisdiction of the United States.
“The Justice Department continues to investigate and prosecute acts of violence targeting individuals because of their sexual orientation; this case is just another example of the department’s commitment to the pursuit of justice on behalf of all people regardless of their sexual preference or orientation.” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The department will continue to vigorously enforce the Matthew Shepard and James Byrd, Jr. Hate Crimes Prevention Act, and all the laws under our jurisdiction, to protect the rights of all individuals.”
Hall faces a maximum sentence of 10 years in prison for this crime.
This case was investigated by the FBI Dallas Division. The case was prosecuted by Assistant U.S. Attorney Errin Martin and Trial Attorney Adriana Vieco of the Civil Rights Division.
North Carolina Real Estate Investor Pleads Guilty to Mail Fraud Scheme for the Purchase of Real Estate at Public Foreclosure AuctionsRead the Press Release
A real estate investor pleaded guilty today to conspiring to commit mail fraud at public real estate foreclosure auctions held in Raleigh, N.C., and surrounding areas, the Department of Justice announced. This is the second charge in the department’s ongoing investigation into real estate foreclosure auctions in eastern North Carolina.
According to the one-count felony charge filed on Oct. 4, 2012, in the U.S. District Court for the Eastern District of North Carolina, in Greenville, real estate investor, Darren K. Phillips, conspired with a group of real estate speculators to participate in a scheme to defraud financial institutions, homeowners and others with a legal interest in select properties, and to obtain money and property from financial institutions, homeowners and others with a legal interest in rigged properties through false and fraudulent pretenses or representations. According to the plea agreement, Phillips has agreed to cooperate with the department’s ongoing investigation.
The primary purpose of the conspiracy was to fraudulently acquire title to rigged foreclosure properties offered through public auctions at artificially suppressed prices, to make and receive payoffs from co-conspirators and to divert money away from financial institutions, homeowners and others with a legal interest in the rigged foreclosure properties, the department said in court papers. The conspiracy resulted in mortgage holders, some of which were financial institutions, receiving a lower price for the foreclosure property. Philips is charged with participating in the conspiracy beginning at least as early as February 2001 and continuing until at least May 2004.
“By artificially suppressing auction prices through payoffs and other illegal actions, the conspirators profited at the expense of homeowners and financial institutions,” said Scott D. Hammond, Deputy Assistant Attorney General in charge of the Antitrust Division’s criminal enforcement program. “The division will continue to work with our law enforcement partners to investigate anticompetitive practices in real estate foreclosure auctions in North Carolina and elsewhere.”
Phillips is charged with conspiracy to commit mail fraud affecting a financial institution, which carries a maximum sentence of 30 years in prison and a $1 million fine.
Phillips is the second person to be charged in this investigation. In September 2010, Christopher Deans, a real estate speculator from Raleigh, pleaded guilty in the U.S. District Court in Greenville in connection with the investigation.
Today’s plea arose from an ongoing federal antitrust investigation of fraud and bidding irregularities in certain real estate foreclosure auctions in the Eastern District of North Carolina. The investigation is being conducted by the Antitrust Division’s Atlanta Field Office and the FBI’s Atlanta Field Office, with assistance from the U.S. Attorney’s Office for the Eastern District of North Carolina. Anyone with information concerning bid rigging or fraud related to real estate foreclosure auctions should contact the Antitrust Division’s Atlanta Field Office at 404-331-7100, or visit www.justice.gov/atr/contact/newcase.htm .
Today’s plea is part of efforts underway by President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. One component of the task force is the national Mortgage Fraud Working Group, co-chaired by Benjamin B. Wagner, U.S. Attorney for the Eastern District of California. For more information on the task force, visit www.StopFraud.gov.
Michigan Man Charged with Selling<br /> Counterfeit Microsoft Software Worth More Than $1.2 MillionRead the Press Release
WASHINGTON – A Michigan man was arraigned today in U.S. District Court for the Eastern District of Michigan on charges of mail fraud and selling counterfeit Microsoft software with a retail value of more than $1.2 million, 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 and Lev J. Kubiak, Director of the National Intellectual Property Rights Coordination Center (IPR Center).
Bruce Alan Edward, 48, of Atlanta, Mich., was charged in an indictment returned on Oct. 24, 2012, and unsealed on Nov. 1, 2012, by the federal grand jury in Bay City, Mich. The indictment charges Edward with five counts of criminal copyright infringement and one count of mail fraud.
According to the indictment, Edward unlawfully distributed counterfeit copies of Microsoft Office 2003 Professional and Microsoft Windows XP Professional software by purchasing counterfeit copies of the copyrighted works from China and Singapore, selling the copyrighted works on eBay and then using the U.S. Postal Service to deliver the counterfeit software. The indictment further alleges that Edward obtained more than $140,000 between May 2008 and September 2010 by selling more than 2,500 copies of counterfeit Microsoft software that had a retail value of over $1.2 million.
If convicted of all counts in the indictment, Edward faces a maximum of 45 years in prison and $1.5 million in fines. The indictment also contains a forfeiture allegation that requires the defendant, if convicted, to forfeit all criminal proceeds and counterfeit items and any property used to commit the alleged criminal activity.
The case is being prosecuted by Trial Attorney Thomas Dougherty of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney Janet Parker of the U.S. Attorney’s Office for the Eastern District of Michigan.The investigation was conducted by the National Intellectual Property Rights Coordination Center (IPR Center) in Crystal City, Va., and U.S. Immigration and Customs Enforcement Homeland Security Investigations in Sault Ste. Marie, Mich.
The IPR Center is one of the U.S. government’s key weapons in the fight against criminal counterfeiting and piracy. As a task force, the IPR Center uses the expertise of its 21 member agencies to share information, develop initiatives, coordinate enforcement actions and conduct investigations related to IP theft. Through this strategic interagency partnership, the IPR Center protects the public's health and safety, the U.S. economy and our war fighters.
The enforcement action announced today is one of many efforts being undertaken by the Department of Justice Task Force on Intellectual Property (IP Task Force). Attorney General Eric Holder created the IP Task Force to combat the growing number of domestic and international intellectual property crimes, protect the health and safety of American consumers, and safeguard the nation’s economic security against those who seek to profit illegally from American creativity, innovation, and hard work. The IP Task Force seeks to strengthen intellectual property rights protection through heightened criminal and civil enforcement, greater coordination among federal, state, and local law enforcement partners, and increased focus on international enforcement efforts, including reinforcing relationships with key foreign partners and U.S. industry leaders. To learn more about the IP Task Force, go to www.justice.gov/dag/iptaskforce/.
Wednesday 7 November 2012
Two Pakistani Nationals Indicted for Conspiring to Illegally Ship Pharmaceuticals into the USRead the Press Release
Two Pakistani nationals have been indicted by a federal grand jury in the District of Columbia on charges alleging that they operated Internet sites that illegally shipped pharmaceuticals from Pakistan and the United Kingdom to customers in the United States.
Sheikh Waseem Ul Haq, 39, and Tahir Saeed, 50, are accused of operating Internet sites that, since late 2005, illegally shipped $2 million of pharmaceuticals from Pakistan and the United Kingdom to customers worldwide, including nearly $780,000 in sales to U.S. purchasers.
According to the indictment, the defendants and others owned, operated and conducted business as Waseem Enterprises and Harry’s Enterprises, wholesale pharmaceutical companies that were located in Pakistan. The businesses were used to unlawfully distribute a wide variety of controlled substances and prescription drugs through Internet sites. The defendants and others also advertised their companies on Internet sites to generate business.
Ul Haq and Saeed directed U.S. customers to submit payments via Western Union to numerous individuals in Karachi, Pakistan, in order to conceal the fact that the funds were going to Ul Haq and Saeed. As alleged in the indictment, the defendants admitted in e-mails that they paid bribes to Pakistani customs officials to facilitate shipment of the drugs out of Pakistan, and warned that U.S. customers bore the risk of interception by U.S. customs officials. The indictment alleges that the defendants packaged the drug shipments in ways which reduced the likelihood of interdiction by customs inspectors and told customers that, despite the packaging, some of the shipments might not get through.
The drugs shipped into the United States included methylphenidate (sold as Ritalin); various anabolic steroids; alprazolam (sold as Xanax); diazepam (sold as Valium), lorazepam (sold as Ativan), clonazepam (sold as Klonapin) and other controlled and non-controlled substances.
The indictment, which was returned on Nov. 6, 2012, was announced today by Ronald C. Machen Jr., U.S. Attorney for the District of Columbia; Acting Assistant Attorney General Stuart F. Delery of the Department of Justice’s Civil Division; James W. McJunkin, Assistant Director in Charge of the FBI’s Washington Field Office; Robert Brisolari, Acting Special Agent in Charge of the Washington Division Office of the Drug Enforcement Administration; Gary R. Barksdale, Inspector in Charge, Washington Division, U.S. Postal Inspection Service, and Antoinette V. Henry, Special Agent in Charge of the Metro Washington Field Office of the U.S. Food & Drug Administration’s Office of Criminal Investigations.
The indictment was returned following a presentation of evidence by the U.S. Attorney’s Office for the District of Columbia, working in conjunction with the Department of Justice’s Consumer Protection Branch. It charges the defendants with conspiracy to import controlled substance pharmaceuticals into the United States; conspiracy to distribute controlled substance pharmaceuticals; conspiracy to introduce misbranded pharmaceuticals into interstate commerce; importation and distribution of controlled substance pharmaceuticals; introduction into interstate commerce of misbranded drugs, and conspiracy to commit international money laundering. It also includes a forfeiture allegation seeking all proceeds that can be traced to the scheme.
If convicted, the defendants face up to 20 years in prison for each of the two counts involving the conspiracy to import and distribute controlled substances, as well as up to 20 years for the conspiracy to commit international money laundering. They face a maximum penalty of five years for conspiracy to introduce misbranded pharmaceuticals into interstate commerce, and additional time if convicted of the other charges.
In early October 2012, a law enforcement task force investigating the case learned that the defendants would be traveling from Pakistan to northern Europe. With coordination from the U.S. Department of Justice’s Office of International Affairs, U.S. authorities lodged provisional arrest warrants for the defendants first in Germany and then in the United Kingdom.
With the assistance of Interpol and law enforcement agents in Germany and the United Kingdom, the defendants were tracked from Germany to London, where they were arrested by the London Metropolitan Police Service Fugitive Squad at a hotel near Heathrow Airport on Oct. 19, 2012. They were presented to Westminster Magistrate’s Court in London and ordered held pending extradition to the United States.
“This indictment alleges an international conspiracy to sell anabolic steroids, anti-anxiety medications, and other prescription drugs over the Internet to American consumers without any doctor involved,” said U.S. Attorney Machen. “These Pakistani nationals are alleged to have engaged in a scheme to ship unregulated pharmaceuticals to American consumers in exchange for money wired to their cohorts in Pakistan. The controlled substances were packaged to conceal the illegal shipments from being discovered by customs officials. Our Office, along with our law enforcement colleagues, will continue to aggressively investigate and prosecute those who are intent on shipping unregulated and potentially dangerous drugs into the United States.”
“This prosecution aims to curb the flow of dangerous drugs into the hands of United States citizens,” said Stuart F. Delery, Acting Assistant Attorney General for the Civil Division. “The drugs allegedly sold by the defendants were not approved for distribution into the United States, were not dispensed by U.S. licensed pharmacies, and were not prescribed by any physician. Along with the FBI, FDA and our other law enforcement partners, we will continue to protect our citizens from unsafe and potentially harmful drugs.”
“This complex investigation and subsequent arrests disrupted an international black market for potentially dangerous drugs entering the United States,” said Assistant Director in Charge McJunkin. “This indictment is the direct result of the hard work of FBI Agents in partnership with the Drug Enforcement Administration, U.S. Postal Inspection Service, U.S. Food & Drug Administration’s Office of Criminal Investigations and the London Metropolitan Police Service as well as the prosecutors working on this case.”
“This indictment shows the commitment of the U.S. Postal Inspection Service to keep its customers safe from potentially harmful products,” said Inspector in Charge Barksdale. “We would also like to thank our federal partners in our continued effort to rid the U.S. Mail of illegal pharmaceuticals.”
“The FDA Office of Criminal Investigations is committed to working with our international and domestic law enforcement partners in aggressively pursuing unscrupulous individuals who seek to sell adulterated and misbranded pharmaceuticals to U.S. citizens via the Internet,” said Special Agent in Charge Henry.
An indictment is merely a formal charge that a defendant has committed a violation of criminal laws and every defendant is presumed innocent until, and unless, proven guilty.
This investigation was sponsored and supported by the Department of Justice’s Organized Crime Drug Enforcement Task Force. The case was investigated by the FBI’s Washington Field Office; the Drug Enforcement Administration; the U.S. Postal Inspection Service, and the FDA’s Office of Criminal Investigations. It is being prosecuted by Assistant U.S. Attorney John P. Dominguez and Linda I. Marks, Senior Litigation Counsel for the Department of Justice’s Consumer Protection Branch, who coordinated the investigation and presented the evidence to the grand jury.
Mexican Pecan Company Owner Sentenced to 48 Months in Prison<br /> for Scheme to Defraud the U.S. Export-Import BankRead the Press Release
WASHINGTON – The owner of a pecan brokerage company in Ciudad Juarez, Chihuahua, Mexico, was sentenced today to serve 48 months in prison for his role in a scheme to defraud the Export-Import Bank of the United States (Ex-Im Bank) of approximately $400,000, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney for the Western District of Texas Robert Pitman and Osvaldo L. Gratacos, Inspector General of the Ex-Im Bank.
Leopoldo Valencia-Urrea, 50, was sentenced by Judge Kathleen Cardone in U.S. District Court in El Paso, Texas. Valencia pleaded guilty on Oct. 13, 2011, to one count of conspiracy to commit wire fraud, one count of wire fraud and one count of money laundering conspiracy in connection with a scheme to defraud the Ex-Im Bank of approximately $400,000. In addition to his prison term, Valencia was sentenced to serve three years of supervised release and was ordered to pay $58,000 in restitution and $399,075 in forfeiture.
According to court documents, Valencia, a U.S. citizen, was the owner of a pecan brokerage company in Ciudad Juarez and resided in El Paso. Valencia admitted that in 2006, he applied for an Ex-Im insured loan for $406,258 through a bank in Miami. As part of his fraudulent loan application, Valencia and others submitted a fraudulent loan application, financial statements, invoices, letters and bills of lading to falsely represent to the Miami bank and the Ex-Im Bank the purchase and export of U.S. goods to Valencia in Mexico. After the exporter who conspired with Valencia received $399,075 from the Miami bank, Valencia and others diverted the loan proceeds directly to Valencia and others in Mexico. As a result of the fraud, Valencia’s loan defaulted, causing the Ex-Im Bank to pay a claim to the lending bank on a $371,962 loss.
The Ex-Im Bank is an independent federal agency that helps create and maintain U.S. jobs by filling gaps in private export financing. The Ex-Im Bank provides a variety of financing mechanisms to help foreign buyers purchase U.S. goods and services.
The case is being prosecuted by Senior Litigation Counsel Patrick Donley and Trial Attorney William Bowne of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Steven Spitzer of the Western District of Texas, El Paso Division. The case was investigated by the Ex-Im Bank Office of Inspector General, Homeland Security Investigations in El Paso, under the leadership of Acting Special Agent in Charge Dennis Ulrich; Internal Revenue Service-Criminal Investigation in Washington, D.C., under the leadership of Special Agent in Charge Rick A. Raven; and the U.S. Postal Inspection Service in Washington, D.C., under the leadership of Inspector in Charge Daniel S. Cortez. Significant financial analysis and strategic assistance was provided during the course of this investigation by the Financial Crimes Enforcement Network (FINCEN).
Barbados National Sentenced to Prison for Using Stolen<br /> <br /> Identities to Obtain Tax RefundsRead the Press Release
Andrew J. Watts, a Barbados national, was sentenced in Chicago by U.S. District Judge Joan Gottschall to 114 months in prison and ordered to pay restitution of just under $1.7 million for devising and executing a stolen identity federal income tax refund fraud scheme, the Justice Department and the Internal Revenue Service (IRS) announced today.
According to court documents, between 2007 and 2011, Watts filed false federal income tax returns in the names of deceased taxpayers seeking fraudulent refunds. Watts either signed the name of the deceased taxpayer to the tax return, or would falsely list himself as the deceased taxpayer’s representative. As part of the scheme, Watts filed over 470 false federal income tax returns, claiming fraudulent refunds in excess of $120 million, and the IRS issued refunds in excess of $10 million. Watts directed the IRS to either mail the refund checks to an address he controlled or to electronically deposit the refund into a bank account under his control.
“While all taxpayers are victims when criminals file false tax returns using stolen identities, those who falsely use the names of deceased individuals add to the grief and burdens of their families,” said Kathryn Keneally, Assistant Attorney General for the Justice Department's Tax Division. “We will prosecute and seek just punishment against those who seek to commit these crimes.”
“IRS-Criminal Investigation has made investigating refund fraud and identity theft a top priority and we will vigorously pursue those who undermine the integrity of the U.S. tax system,” said Richard Weber, Chief, IRS-Criminal Investigation. “Individuals who commit refund fraud and identity theft of this magnitude deserve to be punished to the fullest extent of the law.”
On July 10, 2012, Watts pleaded guilty to one count of mail fraud and one count of aggravated identity theft.
The case was investigated by IRS-Criminal Investigation and prosecuted by Assistant U.S. Attorney Patrick J. King, Jr., Northern District of Illinois, and Trial Attorney Michelle Petersen, Department of Justice, Tax Division.
More information about the Justice Department’s Tax Division and its enforcement efforts is available at www.usdoj.gov/tax/ .
Tuesday 6 November 2012
Virginia Man Convicted of Tax CrimesRead the Press Release
A Newport News, Va., federal jury has found Jeffrey Charles guilty for conspiring with his daughter and son-in-law to defraud the United States, the Justice Department and the Internal Revenue Service (IRS) announced today. Charles was found guilty of one count of conspiracy, three counts of aiding and assisting in the preparation of false tax returns and one count of filing a false tax return.
According to the evidence presented at trial, Charles conspired with his daughter and son-in-law to impair and impede the IRS in ascertaining, computing, assessing and collecting federal income taxes. The evidence also proved that Charles aided and assisted in the preparation of three false tax returns in his daughter’s name for tax years 2000, 2001 and 2005, and attached false documents to each tax return. The evidence at trial also established that Charles filed a false tax return in his own name for tax year 2006 in which he allegedly falsely reported earning $0.00 income.
Senior Judge Henry Coke Morgan, Jr. scheduled sentencing for Feb. 25, 2012 in Norfolk, Va.
The case was investigated by IRS Criminal Investigation and was prosecuted by Assistant U.S. Attorney Brian Samuels and Trial Attorney Justin K. Gelfand of the Justice Department’s Tax Division.
Former New Mexico Navajo Police Officer Sentenced to over Four Years in Prison on Sexual Abuse ChargesRead the Press Release
Lawrence Etsitty , 31, a former police officer with the Navajo Police Department (NPD), was sentenced today in federal court on charges related to the sexual abuse of a woman who was in his custody on Jan. 25, 2009. Earlier this year, Etsitty pleaded guilty to violating the civil rights of the victim when he groped, touched and kissed her against her will, while she was handcuffed. Etsitty also was charged and pleaded guilty to making false statements to the FBI.
According to court documents, on Jan. 25, 2009, at 2:40 a.m., Etsitty, while working in his capacity as an officer of the NPD, arrested the victim outside of the Fire Rock Casino in Churchrock, N.M. Etsitty then handcuffed the victim and placed her in the back of his patrol vehicle. Etsitty then drove the victim to an isolated road in the desert, opened the back door of his patrol car where the handcuffed victim was sitting, and forcibly pulled her toward him and out of the car. Etsitty then began groping the victim, while she struggled to get free, pleading for Etsitty to take her home. Ultimately, Etsitty agreed to do so and dropped the victim off in a parking lot near her home, at which point the victim ran away.
On Jan. 27, 2009, Etsitty voluntarily spoke to the FBI and falsely claimed that he did not grope the victim while she was in his custody. Etsitty later wrote a letter of apology to the victim in which he admitted to groping and kissing her while she was in his patrol car, and acknowledged that what he did was wrong and should not have happened.
Etsitty was sentencing to 54 months in prison followed by three years of supervised release. He will also be barred from serving in a law enforcement capacity.
“Police officers who use the power of their badge to sexually assault persons in their custody pose a serious threat to the rule of law,” said Thomas E. Perez, Assistant Attorney General of the Civil Rights Division.. “We commend the courage of the victim in coming forward and speaking out about this terrible crime. The Department of Justice and the Civil Rights Division will continue to vigorously investigate and prosecute these crimes.”
This case was investigated by the Albuquerque Division of the FBI and was prosecuted by Fara Gold of the Civil Rights Division of the U.S. Department of Justice.
Monday 5 November 2012
Owner of Miami Assisted Living Facility Sentenced to 15 Months in Prison for Role in Medicare Fraud ConspiracyRead the Press Release
WASHINGTON – The owner of a Miami-Dade County assisted living facility (ALF) was sentenced today to 15 months in prison for her role in a kickback scheme that funneled ALF patients to fraudulent mental health providers American Therapeutic Corporation (ATC) and Health Care Solutions Network (HCSN), announced Assistant Attorney General Lanny A. Breuer of the Justice Department's Criminal Division; U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida; Michael B. Steinbach, Acting Special Agent in Charge of the FBI's Miami Field Office; and Special Agent in Charge Christopher B. Dennis of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG), Office of Investigations Miami Office.
Alba Serrano, 66, of Miami, was sentenced today by U.S. District Judge Patricia A. Seitz in the Southern District of Florida. In addition to her prison term, Serrano was sentenced to serve three years of supervised release and ordered to pay $258,329 in restitution.
On June 6, 2012, Serrano pleaded guilty in Miami to one count of conspiracy to commit health care fraud.
According to court documents, Serrano was the owner of Elsa's House, an ALF that she operated for more than two decades in South Miami. Serrano pleaded guilty to sending Medicare beneficiaries who resided at Elsa’s House to both ATC and HCSN for partial hospitalization program (PHP) services, a form of intensive treatment for severe mental illness, in exchange for illegal health care kickbacks. In her plea agreement, Serrano admitted that she referred beneficiaries to both ATC and HCSN in exchange for cash kickbacks, even though she knew that some of the beneficiaries did not suffer from severe mental illness and accepting health care kickbacks was illegal.
According to the plea agreement, Serrano's participation in the fraud resulted in at least $591,385 in fraudulent billing to the Medicare program.
In related cases, ATC, its management company, Medlink Professional Management Group Inc., and various owners, managers, doctors, therapists, patient brokers and marketers of ATC, were charged with various health care fraud, kickback, money laundering and other offenses in two indictments unsealed in February 2011. ATC, Medlink and more than 20 of the individual defendants charged in these cases have pleaded guilty or have been convicted at trial.An indictment unsealed on May 2, 2012, charged nine defendants for their alleged roles in the HCSN health care fraud scheme. Four defendants have pleaded guilty, and five defendants are scheduled for trial on Jan. 14, 2013, before U.S. District Judge Cecilia M. Altonaga in Miami. Defendants are presumed innocent until proven guilty at trial.
The case is being prosecuted by Trial Attorney William Parente of the Criminal Division's Fraud Section. 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.
Missouri Hospital System Agrees to Pay $9.3 Million to Resolve False Claims Act and Stark Law ViolationsRead the Press Release
Freeman Health System, a healthcare provider and hospital system located in Joplin, Mo., has agreed to pay $9,316,139 to resolve allegations that it violated the Stark Law and the False Claims Act by knowingly providing incentive pay to physicians in a manner that violated federal law, the Justice Department announced today.
The Stark Law forbids a hospital from billing Medicare for certain services referred by physicians that have a financial relationship with the hospital. A prohibited financial relationship includes an agreement between a hospital and a physician to compensate a physician based on the volume of the physician’s referrals or the revenue realized through those referrals.
Freeman disclosed to the U.S. Attorney for the Western District of Missouri that a number of its physicians were eligible for incentive compensation that may have taken into account the value and volume of their referrals. Based on its investigation of Freeman’s disclosures, the United States alleged that Freeman knowingly compensated some of its physicians in a manner that violated the Stark Law. Specifically, the United States alleged that Freeman provided incentive pay to 70 physicians employed at clinics operated by the health system based on the revenue generated by the physicians’ referrals for certain diagnostic testing and other services performed at the clinic, and that this financial arrangement created an incentive to refer patients for such procedures.
“Today’s resolution underscores our commitment to ensure that health care decisions are based on the best interests of patients rather than the personal financial interests of referring physicians,” said Stuart F. Delery, Acting Assistant Attorney General for the Department’s Civil Division. “The Department of Justice encourages companies to disclose potential violations of law, as was the case here .”
“Our priority is protecting the patients,” said David M. Ketchmark, Acting U.S. Attorney for the Western District of Missouri. “These laws are intended to ensure that physicians make referrals for health care services based solely on the medical needs of their patients rather than any financial incentives. These laws also protect the integrity of the government-funded health care benefit programs.”
This resolution is part of the government’s emphasis on combating health care fraud and another step for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced by Attorney General Eric Holder and Kathleen Sebelius, Secretary of the Department of Health and Human Services in May 2009. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover $10.1 billion since January 2009 in cases involving fraud against federal health care programs. The Justice Department’s total recoveries in False Claims Act cases since January 2009 are over $13.8 billion.
This case was handled by the Department of Justice’s Civil Division, the U.S. Attorney’s Office for the Western District of Missouri, the Office of Inspector General of the U.S. Department of Health and Human Services, and the FBI. The claims settled by this agreement are allegations only, and there has been no determination of liability.
Five Men Plead Guilty in Virginia for Roles in Child Pornography Distribution ConspiracyRead the Press Release
WASHINGTON – Five men pleaded guilty today in Virginia for conspiring to receive, distribute, possess and access with intent to view child pornography, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and the U.S. Attorney for the Western District of Virginia Timothy J. Heaphy.
Manuel Antonio Mares, 57, of Miami; Jeremy Hart Yost, 26, of West Bend, Ore.; Richard Phillip Allen, 66, of Redondo Beach, Calif.; and James Calvin Boyd, 58, of Pell City, Ala., pleaded guilty today before Senior District Judge Norman K. Moon in the Western District of Virginia to one count of conspiring to receive, distribute, possess and access with the intent to view child pornography. Jesse Leon Coleman, 48, of Lynchburg, Va., pleaded guilty today before Judge Moon to one count of receiving child pornography.
Mares, Yost, Allen, Boyd and Coleman were charged along with four others in an indictment unsealed on Feb. 2, 2012. Co-defendant Peter Franklin Ortiz, 56, of Greenville, S.C., pleaded guilty in the Western District of Virginia on Oct. 16, 2012, to one count of conspiring to receive, distribute, possess and access with the intent to view child pornography. Co-defendants Thomas Syfor, 71, and Matthew Ackerman, 49, both of Bethlehem, Pa., were previously transferred to the Eastern District of Pennsylvania for disposition in that district. The ninth defendant, known as “Andy Danilov,” is believed to reside in Russia and remains at large.
According to court documents, beginning in August 2010 and continuing until at least November 2011, Danilov distributed emails to a group of individuals, including the defendants, that contained links to compressed files and file attachments depicting minors engaged in sexually explicit conduct. Danilov often used the screen name “Cinemaboy” in the emails. According to information presented at today’s plea hearing, forensic analysis of each of the defendants’ computers confirmed their involvement in the conspiracy, and some of the defendants were found to possess very large numbers of images and movies depicting the sexual abuse of children.
Each of the defendants who pleaded guilty today faces a maximum penalty of 20 years in prison, a $250,000 fine and lifetime supervised release at sentencing. Due to one or more prior convictions involving the sexual exploitation of a minor, Ortiz faces enhanced penalties, including a maximum sentence of 40 years in prison. All of the defendants will be required to register as sex offenders.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse, launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The investigation of the case was conducted by the FBI Innocent Images Operations Unit. The case is being prosecuted by Assistant U.S. Attorney Nancy Healey of the Western District of Virginia and CEOS Trial Attorney Darcy Katzin.
Friday 2 November 2012
Two Members of Internet Piracy Group “IMAGiNE” Sentenced in Virginia for Criminal Copyright ConspiracyRead the Press Release
WASHINGTON – Two members of the Internet piracy group “IMAGiNE” were sentenced to prison today in Virginia, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney Neil H. MacBride for the Eastern District of Virginia and Special Agent in Charge John P. Torres of U.S. Immigration and Customs Enforcement Homeland Security Investigations (ICE-HSI) in Washington, D.C.
Willie Lambert, 57, of Pittston, Pa., was sentenced today by U.S. District Judge Arenda L. Wright Allen in the Eastern District of Virginia to serve 30 months in prison, three years of supervised release and $449,514 in restitution, jointly and severally with co-defendants. Sean M. Lovelady, 28, of Pomona, Calif., was sentenced today by Judge Wright Allen to 23 months in prison, three years of supervised release and $7,500 in restitution.
Lambert and Lovelady were indicted along with two other defendants on April 18, 2012, for their roles in the IMAGiNE Group, an organized online piracy ring that sought to become the premier group to first release to the Internet copies of movies only showing in theaters.
Lovelady and Lambert each pleaded guilty in U.S. District Court for the Eastern District of Virginia to one count of conspiracy to commit criminal copyright infringement on May 9, 2012, and June 22, 2012, respectively.
According to court documents, Lambert, Lovelady and their co-conspirators sought to illegally obtain and disseminate digital copies of copyrighted motion pictures showing in theaters. Both Lovelady and Lambert admitted that they went to movie theaters and secretly used receivers and recording devices to capture the audio sound tracks of copyrighted movies (referred to as “capping”). After obtaining, editing and filtering audio sound tracks and uploading them to servers utilized by the IMAGiNE Group, Lambert and Lovelady used and attempted to use software to synchronize the audio file with an illegally obtained video file to create a completed movie file suitable for sharing over the Internet among members of the IMAGiNE Group and others.
Co-defendants Jeramiah B. Perkins and Gregory Cherwonik each pleaded guilty to one count of conspiracy to commit criminal copyright infringement on Aug. 29, 2012, and July 11, 2012, respectively. Perkins is scheduled to be sentenced on Jan. 3, 2013, and Cherwonik is scheduled to be sentenced on Nov. 29, 2012.
The investigation of the case and the arrests were conducted by agents with HSI. Assistant U.S. Attorney Robert J. Krask of the Eastern District of Virginia and Senior Counsel John H. Zacharia of the Justice Department Criminal Division’s Computer Crime and Intellectual Property Section (CCIPS) are prosecuting the case. Significant assistance was provided by the CCIPS Cyber Crime Lab and the Criminal Division’s Office of International Affairs.
This case is part of efforts being undertaken by the Department of Justice Task Force on Intellectual Property (IP Task Force) to stop the theft of intellectual property. Attorney General Eric Holder created the IP Task Force to combat the growing number of domestic and international intellectual property crimes, protect the health and safety of American consumers, and safeguard the nation’s economic security against those who seek to profit illegally from American creativity, innovation and hard work. The IP Task Force seeks to strengthen intellectual property rights protection through heightened criminal and civil enforcement, greater coordination among federal, state and local law enforcement partners, and increased focus on international enforcement efforts, including reinforcing relationships with key foreign partners and U.S. industry leaders. To learn more about the IP Task Force, go to www.justice.gov/dag/iptaskforce.
This investigation was supported by the HSI-led National Intellectual Property Rights Coordination Center (IPR Center) in Washington. The IPR Center is one of the U.S. government’s key weapons in the fight against criminal counterfeiting and piracy. As a task force, the IPR Center uses the expertise of its 21 member agencies to share information, develop initiatives, coordinate enforcement actions and conduct investigations related to IP theft. Through this strategic interagency partnership, the IPR Center protects the public's health and safety, the U.S. economy and our war fighters.
Two Florida Residents Sentenced for Rolesin Foreclosure Rescue SchemeRead the Press Release
Lisa Wright, 46, and Cathy Saffer, 52, of Pompano Beach, Fla., were sentenced today to serve 66 and 60 months respectively for defrauding homeowners and mortgage lenders as part of a foreclosure rescue scheme, the Justice Department announced. The two women were sentenced by U.S. District Judge Kenneth A. Marra in the Southern District of Florida.
Wright pleaded guilty on March 27, 2012, to one count of conspiracy to commit mail and wire fraud, one count of mail fraud and one count of wire fraud. Saffer was convicted of one count of conspiracy to commit mail and wire fraud, three counts of mail fraud and two counts of wire fraud, following a two week jury trial in July.
According to the indictment and evidence presented at trial, Wright and Saffer operated Foreclosure Solution Specialists (FSS) from 2006 to 2009. Through FSS, Wright and Saffer targeted homeowners facing foreclosure, advertising that FSS could assist those homeowners in remaining in their homes. When contacted by distressed homeowners seeking assistance, Wright and Saffer misrepresented to those homeowners that their homes would be sold to investors. They also claimed that customers could remain in their homes after the sales and promised them an opportunity to repurchase the homes at a later date. Rather than selling the homes to legitimate investors, Wright and Saffer designed sham sales to straw purchasers whom they paid to participate in the scheme.
According to the indictment and evidence presented at trial, Wright and Saffer paid Florida Certified Public Accountant Barrington Coombs to write a fraudulent letter which falsely vouched for the fraudulent information on various loan applications. Coombs, who was also convicted by the jury, is scheduled to be sentenced Dec. 7, 2012.
Mortgage transactions completed by FSS drew equity out of the homes, which Wright and Saffer pocketed for their own purposes. After doing so, Wright and Saffer allowed the loans to go into foreclosure. Homeowners ultimately lost all of the equity in their homes, and most of the victims were forced to move out of their homes.
“The individuals sentenced today took advantage of desperate homeowners hoping to shed the weight of debt and foreclosure, ,” said Stuart F. Delery, Acting Assistant Attorney General for the Civil Division. “We will continue to work with the FBI and our other law enforcement partners to investigate and prosecute mortgage fraud and foreclosure rescue schemes such as this one.”
Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida stated, “ This case illustrates the lengths that fraudsters will go to victimize and ruin the lives of hard working families. This mortgage fraud scheme robbed homeowners of more than just their homes; it also robbed them of hope and the American dream of home ownership. The best way to avoid being victimized is to do your homework and ask hard questions. Be wary of those whose promises seem too good to be true. Through this prosecution, these fraudsters have been brought to justice.”
The case was investigated by the FBI. The case is being prosecuted by Christopher E. Parisi and John Claud, Trial Attorneys at the Civil Division’s Consumer Protection Branch.
Today’s announcement 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 .
Portsmouth, Va., Bail Bondsman Sentenced to 30 Months in Prison<br /> <br /> for Bribing Public OfficialsRead the Press Release
A bail bondsman in Portsmouth, Va., was sentenced today to serve 30 months in prison for bribing public officials in exchange for receiving favorable treatment, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney for the Eastern District of Virginia Neil H. MacBride.
Ulysses “Tugger” Stephenson, 51, of Portsmouth, was sentenced by U.S. Chief District Judge Rebecca Beach Smith in the Eastern District of Virginia. In addition to his prison term, Stephenson was sentenced to serve three years of supervised release.
Stephenson pleaded guilty on July 26, 2012, to one count of conspiracy to commit federal programs bribery and one count of federal programs bribery.
According to court documents, Stephenson earned money as a bail bondsman by charging arrestees a percentage of the amount of bond set by a magistrate. In order to obtain additional clients and thereby maximize his profits, Stephenson gave cash and gifts to Deborah Clark – a Portsmouth magistrate who pleaded guilty to bribery and was sentenced last month to 12 months in prison – in exchange for her referring arrestees to him as prospective clients and accepting his advice on the amount of bond to set in particular cases. From January 2009 through February 2012, Stephenson gave Clark up to $150 per month as well as expense money for trips and numerous cash payments for gas and meals. Additionally, according to court documents, from January 2009 through July 2010, Stephenson made cash payments of up to $150 per week to an employee of the Portsmouth Sheriff’s Office in exchange for referrals.
Stephenson is subject to prosecution for bribery under a federal statute because the two people he admitted to bribing were agents of an organization or state receiving annual benefits in excess of $10,000 under federal programs involving grants and other forms of assistance.
This case was investigated by the FBI. Trial Attorneys Peter Mason and Monique Abrishami of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney Alan M. Salsbury and Special Assistant U.S. Attorney Amy E. Cross of the Eastern District of Virginia are prosecuting the case.
Owner of Tax Preparation Firm Operating in Alabama and Georgia Pleads Guilty to Fraud and Filing False ReturnsRead the Press Release
Bruce King, the owner and operator of Premier Tax, pleaded guilty in federal court this week to charges of conspiring to defraud the United States and filing false tax returns, the Justice Department and the Internal Revenue Service (IRS) announced today. Additionally, on Thursday, Vonecia Orum, a return preparer who worked at Premier Tax, pleaded guilty to delivering false tax returns to the IRS.
With the guilty pleas of King and Orum, a total of nine people associated with Premier Tax have now been convicted of crimes. Six were named in a 28-count indictment that was returned on March 28, 2012. These six were King and Orum, as well as Antoinette Djonret, Nakesha Donaldson, Angela Smith and Jenika Williams, all of whom had previously pleaded guilty. In July and August of 2011, three other defendants – Tonja Toney, Kimberly Womack and Kina Lane – pleaded guilty to criminal informations charging them with filing false tax returns.
According to court documents, Premier Tax was a tax preparation business operated by King that had several locations in Alabama and in Georgia. King held training sessions in which he taught preparers how to falsify tax returns in order to fraudulently increase clients’ tax refunds. Those he taught went on to work at Premier Tax and filed numerous false tax returns. According to court documents, the tax loss caused by these fraudulent returns exceeded $1 million.
Court records also indicated that in addition to falsifying tax returns , some preparers working at Premier Tax also used false dependents on tax returns – they would use people’s personal identifying information, without their consent, as dependents on clients’ tax returns. Four of the defendants—Djonret, Donaldson, Smith, and Williams—were involved in this aspect of Premier Tax and they pleaded guilty to charges of aggravated identity theft, in addition to charges of conspiracy to defraud the United States or filing false tax returns.
This case was investigated by Special Agents of the IRS - Criminal Investigation. Trial attorneys Jason Poole and Justin Gelfand of the Justice Department’s Tax Division and Assistant U.S. Attorney Jared Morris of the Middle District of Alabama are prosecuting this case.
Additional information about the Tax Division and its enforcement efforts may be found at www.justice.gov/tax.
Orthofix Subsidiary, Blackstone Medical, Pays U.S. $30 Million<br /> <br /> to Settle False Claims Act AllegationsRead the Press Release
Orthofix International NV, has agreed to pay the United States $30 million to settle allegations that an Orthofix subsidiary, Blackstone Medical Inc., paid illegal kickbacks to physicians in order to induce use of the company’s products, the Justice Department announced today. Orthofix, which manufactures spinal implants and other spinal surgery products, is a publicly traded company headquartered in Curacao.
The civil settlement resolves allegations that Blackstone paid kickbacks to spinal surgeons. These alleged kickbacks took a number of forms, including sham consulting agreements, sham royalty arrangements, sham research grants, travel and entertainment.
“Kickbacks to physicians are incompatible with a properly functioning health care system,” said Stuart F. Delery, the Acting Assistant Attorney General for the Department’s Civil Division. “They can corrupt physicians’ medical judgment and cause misallocation of vital health care resources. Today’s settlement reflects the progress we are making in the ongoing fight against abusive and illegal practices in the healthcare industry.”
“This settlement demonstrates the government’s continued resolve to ensure that patients receive, and the government pays for, health care that is based solely on sound medical judgment, not compromised by kickbacks,” said Carmen M. Ortiz, U.S. Attorney for the District of Massachusetts. “We believe that this is a just and meaningful resolution that is in the best interests of the citizens of the Commonwealth and taxpayers across the nation.”
“To those contemplating taking advantage of Medicare for their own gain, today’s settlement sends a loud, clear message,” said Susan Waddell, Special Agent in Charge of the U.S. Department of Health and Human Services Office of Inspector General New England region. “Law enforcement will work aggressively to eliminate efforts to abuse vital taxpayer-funded health care programs.”
“Our men and women in uniform and their beneficiaries rely on their healthcare providers to perform their jobs without bias and make decisions in the best interest of their patients,” said Kathryn Feeney, Resident Agent in Charge for the Defense Criminal Investigative Service, New Haven Resident Agency. “Kickbacks, like those alleged here, undermine the TRICARE Military Health System . A settlement like this helps maintain the integrity of an important program our armed services depend on.”
“Blackstone Medical, Inc. now knows the FBI and our law enforcement partners are committed to investigating and uncovering healthcare fraud in all its forms, particularly schemes like the kickbacks Blackstone perpetrated to obtain profits at the expense of taxpayers,” said Richard DesLauriers, Special Agent in Charge of the Federal Bureau of Investigation Boston Field Division.
As part of the settlement, Orthofix also agreed to enter into a corporate integrity agreement with the Office of Inspector General of the Department of Health and Human Services, which provides for procedures and reviews to be put in place to avoid and promptly detect conduct similar to that alleged in this matter.
The allegations resolved by today’s settlement were initially alleged in a whistleblower suit filed under the False Claims Act, which authorizes private citizens to bring suit on behalf of the government for false claims for government funds, and share in any recovery. The whistleblower in this case, Susan Hutcheson, will receive $8 million as her share of the settlement amount.
This resolution is part of the government’s emphasis on combating health care fraud and another step for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced by Attorney General Eric Holder and Kathleen Sebelius, Secretary of the Department of Health and Human Services in May 2009. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover $9.5 billion since January 2009 in cases involving fraud against federal health care programs. The Justice Department’s total recoveries in False Claims Act cases since January 2009 are over $13.2 billion.
The case was handled by the Justice Department’s Civil Division, the U.S. Attorney’s Office for the District of Massachusetts, Office of Inspector General of the Department of Health and Human Services, the FBI and the Defense Criminal Investigative Service of the Department of Defense. The claims settled by this agreement are allegations only, and there has been no determination of liability.
The lawsuit was captioned United States ex rel. Hutcheson v. Blackstone Medical, Inc., et al., Civil Action No. 06-11771-WGY (D. Mass.).
Ohio Attorney Sentenced to 85 Months in Prison for Tax Fraud and Obstruction of Justice CrimesRead the Press Release
The Justice Department and Internal Revenue Service (IRS) announced today that attorney Aristotle R. Matsa (Rick Matsa), of Worthington, Ohio, was sentenced to 85 months in prison by the Judge Edmund A. Sargus Jr. of the U.S. District Court for the Southern District of Ohio. Judge Sargus also ordered Matsa to pay a criminal fine of $265,000, make restitution to the IRS in the amount of $388,000, and pay restitution to a client from whom Rick Matsa embezzled funds in the amount of $24,069.
After a five-week trial in Columbus, Ohio, a jury convicted Matsa of numerous tax fraud and obstruction of justice related offenses, including witness tampering and making a false statement. Matsa’s mother and co-defendant, Loula Z. Matsa, was sentenced today to three years of probation and ordered to pay a $150,000 criminal fine for her role in the conspiracy with her son to obstruct justice, commit perjury and make false statements.
Rick Matsa individually was convicted of one count of a corrupt endeavor to obstruct and impede the IRS, 15 counts of aiding and assisting in the preparation of false and fraudulent tax returns, that related to five different trusts; one count of willfully failing to file a Report of Foreign Bank and Financial Accounts (FBAR); one count of conspiracy to obstruct justice, commit perjury and make false statements; two counts of witness tampering; one count of submitting a false statement; and one count of obstruction of justice.
According to the indictment, which was returned on June 23, 2010, and the evidence admitted at trial, Rick Matsa, who in addition to being an attorney was also an architect, a real estate broker, and a licensed minister in Ohio, created and operated several nominee entities in order to disguise and conceal his income and assets from the IRS. The false trust return charges relate to filings for at least five separate trust entities during the tax years 2003 to 2005. In fact, the evidence at trial showed that he had been filing similarly false returns for the trusts dating back to 1990. Each of the trusts reported receiving significant amounts of interest income each year, yet no income tax was ever reported as due because the trust tax returns fraudulently claimed deductions for distributions purportedly paid annually to a foreign beneficiary.
The evidence at trial established, however, that Rick Matsa used funds from these trusts to purchase a 150-acre farm in Hocking County as well as a home in Worthington, both of which he used as a personal residence. In addition, the trusts’ purported foreign beneficiary was located in the Netherlands and testified that she was not the beneficiary of the trusts.
The evidence at trial also showed that Rick Matsa violated FBAR, the foreign bank account reporting requirements, by failing to disclose his ownership and control over a foreign bank account held in The Netherlands during calendar year 2003, where an account was maintained by Rick Matsa with funds in excess of $300,000 from at least August 2003 to November 2003.
The evidence at trial further showed that after learning of the federal grand jury investigation into his business activities in May of 2006, Rick Matsa, together with Loula Matsa and others, conspired to obstruct justice by concealing evidence from the grand jury, making false statements to the grand jury, creating false documents, tampering with witnesses and lying to federal investigators.
George Pappas, formerly an attorney in Urbana, Ohio, who previously pleaded guilty to making false statements to federal agents during the grand jury investigation, testified at trial. Pappas testified that he falsely claimed ownership of Rick Matsa’s law firm, located in the Short North area of Columbus, in their efforts to withhold records from the grand jury. Pappas was sentenced to two years probation and a home confinement term earlier this year.
Rick Matsa’s tenant, P. Maria Galloway, the owner of an art gallery located next door to Matsa’s law firm, also testified after pleading guilty to conspiracy to obstruct justice. Galloway testified that she signed numerous documents at Rick Matsa’s direction, including federal income tax returns for Matsa’s law firm and a number of his nominee entities, which Matsa used as part of his scheme to obstruct the IRS, and that she made false statements to agents and the grand jury during the investigation. Galloway also was sentenced to a two year term of probation earlier this year with some home confinement.
“Prosecuting individuals who evade taxes through fraudulent schemes has always been and will remain our priority,” said Kathryn Keneally, Assistant Attorney General for the Justice Department’s Tax Division. “The sentence handed down today demonstrates that nobody, and especially not an attorney, should expect to profit financially at the expense of the American taxpayer.”
“Mr. Matsa created and operated several nominee entities in order to disguise and conceal his income and assets from the IRS,” said Richard Weber, Chief, IRS Criminal Investigation. “Today, Mr. Matsa is finding out IRS special agents will untangle complex financial transactions to hold accountable those seeking to evade the legal responsibility to pay taxes.”
Assistant Attorney General Keneally and Mark D’Alessandro, Acting U.S. Attorney for the Southern District of Ohio on this matter, commended the IRS-Criminal Investigation special agents who investigated the case, as well as Tax Division Trial Attorneys Richard M. Rolwing, Jorge Almonte and Steve Descano who prosecuted the case.
More information about the Tax Division and its enforcement efforts is available at http://www.justice.gov/tax.
Justice Department to Monitor Polls in 23 States <br /> <br /> on Election DayRead the Press Release
The Justice Department announced today that its Civil Rights Division plans to deploy more than 780 federal observers and department personnel to 51 jurisdictions in 23 states for the Nov. 6, 2012, general election.
Although state and local governments have primary responsibility for administering elections, the Civil Rights Division is charged with enforcing the federal voting rights laws that protect the rights of all citizens to access the ballot on Election Day.
In the days leading up to and throughout Election Day, Civil Rights Division staff members will be available by telephone to receive complaints related to possible violations of the federal voting rights laws (toll free 1-800-253-3931 or 202-307-2767 or TTY 1-877-267-8971). In addition, individuals may also report such complaints by fax to 202-307-3961, by email to [email protected] and by a complaint form on the department ’s website : www.justice.gov/crt/about/vot/.
Allegations of election fraud are handled by the 94 U.S. Attorneys’ Offices across the country and the Criminal Division’s Public Integrity Section. Complaints may be directed to any of the local U.S. Attorneys’ Offices, the local FBI offices or the Public Integrity Section at 202-514-1412.
Since the passage of the Voting Rights Act of 1 965, the department has regularly sent observers and monitors around the country to protect the rights of voters . The Voting Rights Act prohibits discrimination in the election process on the basis of race, color or membership in a minority language group. In addition, the act requires certain covered jurisdictions to provide language assistance during the election process. Under the Voting Rights Act, the department is authorized to ask the Office of Personnel Management to send federal observers to areas that have been certified for coverage by a federal court or the attorney general. The department also may send its own staff to monitor elections in other jurisdictions.
On Election Day, federal observers will monitor polling place activities in 17 jurisdictions:
- Russell County, Ala.;
- Maricopa County, Ariz.;
- Alameda County, Calif.;
- Riverside County, Calif.;
- Randolph County , G a.;
- East Carroll Parish, La.;
- Panola County, Miss.;
- Colfax County, Neb.;
- Sandoval County, N.M.;
- Orange County, N.Y.;
- Cuyahoga County, Ohio;
- Lorain County, Ohio;
- Williamsburg County, S.C.;
- Shannon County ; S.D.;
- Dallas County, Texas;
- Fort Bend County, Texas; and
- Jefferson County, Texas.
Justice Department personnel will monitor the election in an additional 34 jurisdictions:
- Mobile County, Ala. ;
- Pima County, Ariz.;
- Arapahoe County, Colo.;
- Denver;
- Duval County, Fla.;
- Hendry County , Fl a.;
- Hillsborough County, Fla.;
- Lee County, Fla.;
- Miami-Dade County, Fla.;
- Orange County, Fla.;
- Osceola County, Fla.;
- Chicago & Cook County, Ill.;
- LaPorte County, Ind.;
- Finney County, Kan.;
- Detroit & Hamtramck, Mich.;
- Alamance County, N.C.;
- Wake County, N.C.;
- Bernalillo County, N.M.;
- Cibola County, N.M.;
- Queens County, N.Y.;
- Franklin County, Ohio;
- Hamilton County, Ohio;
- Allegheny County, Pa.;
- Chester County, Pa.;
- Delaware County, Pa.;
- Lehigh County, Pa.;
- Philadelphia ;
- Richland County, S.C.;
- Davidson County, Tenn.;
- Shelby County , Tenn. ;
- Harris County, Texas; and
- Milwaukee
The observers and department personnel will gather information on, among other things, whether voters are subject to different voting qualifications or procedures on the basis of race, color, or membership in a language minority group; whether jurisdictions are complying with the minority language provisions of the Voting Rights Act; whether jurisdictions permit voters to receive assistance by a person of his or her choice if the voter is blind, has a disability, or is unable to read or write; whether jurisdictions allow voters with disabilit ies to cast a private and independent ballot; whether jurisdictions comply with the voter registration list requirements of the National Voter Registration Act; and whether jurisdictions comply with the provisional ballot requirements of the Help America Vote Act. To assist in these inquiries, the department has deployed observers and monitors who speak Spanish and a variety of Asian and Native American languages. Both the federal observers and department personnel will coordinate monitoring activities, and department attorneys maintain contact with local election officials.
Last month, the Justice Department announced efforts to ensure that all qualified voters have the opportunity to cast their ballots and have their votes counted free of discrimination, intimidation or fraud in the election process. More information about the Voting Rights Act and other federal voting and election-related laws is available on the Civil Rights Division ’s web site at www.usdoj.gov/crt/voting
Justice Department to Monitor Early Voting in FloridaRead the Press Release
The Justice Department announced today that it will monitor portions of the early voting period for the Nov. 6, 2012, general election in Miami-Dade County, Fla., to ensure compliance with the Voting Rights Act of 1965. The Voting Rights Act prohibits discrimination in the election process on the basis of race, color or membership in a minority language group.
Justice Department personnel will monitor polling place activities during early voting in this county. Civil Rights Division attorneys will coordinate federal activities and maintain contact with local election officials.
Each year, the Justice Department deploys hundreds of federal observers from the Office of Personnel Management, as well as departmental staff, to monitor elections across the country. To file complaints about discriminatory voting practices, including acts of harassment or intimidation, voters may call the Voting Section of the Justice Department’s Civil Rights Division at 1-800-253-3931. The Justice Department previously announced that it would be monitoring early voting for the general election in Dallas and Harris Counties in Texas.
Visit www.justice.gov/crt/voting/index.php for more information about the Voting Rights Act and other federal voting laws.
German Shipping Companies Convicted in Texas and Alaska for Environmental CrimesRead the Press Release
WASHINGTON – Two German shipping companies pleaded guilty today in federal court in Houston to criminal charges that they concealed the illegal dumping of oil at sea from U.S. Coast Guard inspectors.
Nimmrich & Prahm Bereederung and Nimmrich & Prahm Reedrei, the operator and owner of the commercial cargo vessel M/V Susan K, will pay a $1.2 million dollar criminal penalty, $200,000 of which will go to the National Marine Sanctuaries Fund as a community service payment for projects aimed at preserving and restoring the Flower Garden Banks National Marine Sanctuary located off the Texas coast. As a condition of probation, all vessels owned or operated by the defendants will be prohibited from entering U.S. ports or waters for five years.
Federal and international law requires that cargo vessels like the M/V Susan K dispose of oily bilge waste water by using an oil water separator (OWS) or disposing of the waste water at shore facilities. The law also requires that the crew record the disposal of oily waste water in an oil record book that is presented to the Coast Guard during a port inspection.
According to the plea agreement, the chief engineer and other crew members on board the vessel repeatedly discharged oily bilge waste water from the vessel into the ocean from before Aug. 1, 2011, to March 4, 2012, by using a hose that bypassed the vessel’s OWS. The chief engineer then falsified the vessel’s oil record book to conceal the dumping from Coast Guard inspectors when the vessel entered the U.S. ports in Alaska on Jan. 24, 2012, and then in Houston on March 4, 2012.“Illegal discharges of oil at sea by commercial shippers is an all too common practice, and today’s sentence shows that there are serious consequences for it,” said Ignacia S. Moreno, Assistant Attorney General of the Justice Department’s Environment and Natural Resources Division. “The defendants will pay a significant penalty and be barred from U.S. waters for deliberately concealing from U.S. authorities their illegal dumping of oil from Alaska to the coast of Texas while at sea. Vessel companies that deliberately violate the laws enacted to protect the oceans will be pursued and prosecuted.”
“The outcomes of these cases demonstrate the commitment of the U.S. Coast Guard and the Department of Justice to protecting our marine environment,” said Rear Admiral Roy A. Nash, Eighth Coast Guard District Commander. “We continue to ensure that companies and individuals who break the law and endanger our natural resources are held accountable.”
The community service payment to the National Marine Sanctuary Foundation will be used to conduct critical monitoring, research and restoration projects in and around Flower Garden Banks National Marine Sanctuary in the Gulf of Mexico. These projects will include coral reef surveys, especially to collect data on coral spawning events and coral resilience. They will also include species monitoring projects, such as acoustic tagging of sensitive, threatened and endangered marine species including manta rays and tiger sharks, as well as commercially important species such as red snapper.
According to court documents, the Coast Guard boarded the vessel in Houston on April 6, 2012, after receiving a tip from a lower level crew member about the illegal dumping of oil and found the hose used to dump the oily waste overboard. During the inspection, the chief engineer lied to the Coast Guard about the hose and the oil dumping and instructed a crew member to lie to the Coast Guard about the use of the hose. The three whistle blowers on the vessel who assisted in the criminal investigation were each awarded $67,000 by the court.
Overall, the companies pleaded to two obstruction of justice charges and one violation of the Act to Prevent Pollution from Ships for the violations in the District of Alaska and Southern District of Texas; the single obstruction of justice charge in Alaska was transferred procedurally to Houston. On Sept. 10, 2012, the chief engineer of the vessel pleaded guilty to one criminal charge in Texas and was fined $1,000 and sentenced to one year probation.
This case is being investigated by the U.S. Coast Guard Investigative Service. It is being prosecuted by David P. Kehoe, Senior Trial Attorney, Environmental Crimes Section of the Justice Department’s Environment and Natural Resources Division, Gary Cobe, Assistant U.S. Attorney for the Southern District of Texas, and Kevin Feldis, Assistant U.S. Attorney, District of Alaska.
Aryan Brotherhood of Texas Gang Member Sentenced in Houston for Violent Crime in Aid of RacketeeringRead the Press Release
WASHINGTON – A Houston resident and member of the Aryan Brotherhood of Texas (ABT) gang was sentenced today to 72 months in prison for his role in an aggravated assault that took place in Tomball, Texas, in September 2008, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney Kenneth Magidson of the Southern District of Texas.
Bobby Teets, 46, aka “Bull,” pleaded guilty on Dec. 9, 2010, to racketeering aggravated assault for his role in the assault of an applicant for membership in the gang, and was sentenced today by U.S. District Court Judge Ewing Werlein Jr. Teets is to serve the 72-month sentence consecutively to the state prison term he is currently serving. In addition to the prison term, Teets was ordered to serve three years of supervised release and ordered to pay a $3,000 fine.
According to court documents, Teets was a member of the ABT, a race-based, state-wide organization that operated inside and outside of state and federal prisons throughout the United States. 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 that state’s prison system during the 1960s. According to court documents, the ABT was concerned at one time primarily with the protection of white inmates, white supremacy and separatism. Over time, the ABT has expanded its criminal enterprise to include illegal activities for profit.
According to court documents, the ABT enforced its rules and promoted discipline among its members, prospects and associates through murder, attempted murder, conspiracy to murder, assault, robbery and threats against those who violate their 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 court documents, on Sept. 22, 2008, Teets and 11 fellow ABT gang members participated in the beating of a prospective ABT member, at the home of ABT gang leader Steven Walter Cooke, 48, aka “Stainless,” in Tomball. The prospective ABT member, who sustained serious bodily injury, was beaten by ABT gang members because he violated ABT rules of conduct.
Eleven of the 12 defendants have pleaded guilty for their roles in the assault. The 12th ABT gang member, David Harlow, 43, aka “Bam Bam,” was found guilty following his trial in the Southern District of Texas by Judge Werlein on March 21, 2012.
This case is being investigated by a multi-agency task force consisting of the Bureau of Alcohol, Tobacco, Firearms and Explosives; the Drug Enforcement Administration; the FBI; U.S. Marshals Service; Texas Rangers; Texas Department of Public Safety; Walker County, Texas, Sheriff’s Office; Montgomery County, Texas, Sheriff’s Department; Houston Police Department-Gang Division; Tomball Police Department; Texas Department of Criminal Justice – Inspector General; and Harris County, Texas, Sheriff’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.
Thursday 1 November 2012
Washington, DC, Tax Return Preparer Sentenced to Two Years<br /> <br /> in Prison for Preparing False Tax ReturnsRead the Press Release
Enyinnaya Udo was sentenced to 24 months in prison today and ordered by U.S. District Judge Barbara J. Rothstein to pay more than $262,966 in restitution to the Internal Revenue Service (IRS) as a condition of supervised release, the Justice Department and IRS announced.
Following a four-day trial, a federal jury convicted Udo of 25 counts of aiding and assisting in the preparation of false individual income tax returns. According to the indictment and evidence presented at trial, Udo operated a tax preparation business called Anic and Associates, CPAs PC located in Washington. Udo prepared false 2005 through 2008 individual income tax returns for seven taxpayers, falsely reporting that the taxpayers had unreimbursed employee expenses.
Kathryn Keneally, Assistant Attorney General for the Justice Department’s Tax Division, commended the IRS - Criminal Investigation special agent who investigated the case as well as Tax Division Trial Attorneys Jessica Moran and Erin Pulice, who prosecuted the case.
Northern California Real Estate Investor Agrees to Plead Guilty to Bid Rigging at Public Foreclosure AuctionsRead the Press Release
A Northern California real estate investor has agreed to plead guilty for his role in conspiracies to rig bids and commit mail fraud at public real estate foreclosure auctions in Northern California, the Department of Justice announced.
A four-count felony charge was filed today in the U.S. District Court for the Northern District of California, in San Francisco, against Norman Montalvo, of Concord, Calif. Montalvo is the 26th individual to plead guilty or agree to plead guilty as a result of the department’s ongoing antitrust investigation into bid rigging and fraud at public real estate foreclosure auctions in Northern California.
According to court documents, Montalvo conspired with others not to bid against one another, but instead to designate a winning bidder to obtain selected properties at public real estate foreclosure auctions in San Francisco and San Mateo counties, Calif . Montalvo was also charged with a conspiracy to use the mail to carry out a scheme to fraudulently acquire title to selected properties sold at public auctions, to make and receive payoffs, and to divert to co-conspirators money that would have otherwise gone to mortgage holders and others.
The department said Montalvo conspired with others to rig bids and commit mail fraud at public real estate foreclosure auctions in San Francisco and San Mateo counties beginning as early as June 2008 and continuing until about September 2010.
“The real estate investors involved in the conspiracy illegally restrained competition at foreclosure auctions by falsely creating the appearance of unfettered bidding while they were secretly colluding to suppress prices,” said Scott D. Hammond, Deputy Assistant Attorney General of the Antitrust Division’s criminal enforcement program. “The Antitrust Division remains committed to holding accountable those involved in anticompetitive acts that harm lenders and distressed homeowners.”The department said that the primary purpose of the conspiracies was to suppress and restrain competition and to conceal payoffs in order to obtain selected real estate offered at San Francisco and San Mateo County public foreclosure auctions at non-competitive prices. When real estate properties are sold at these auctions, the proceeds are used to pay off the mortgage and other debt attached to the property, with remaining proceeds, if any, paid to the homeowner. According to court documents, these conspirators paid and received money that otherwise would have gone to pay off the mortgage and other holders of debt secured by the properties, and, in some cases, the defaulting homeowner.
“Our vigorous pursuit in enforcing fraudulent anticompetitive practices at foreclosure auctions here in northern California is evident in this guilty plea,” said Joel Moss, Acting Special Agent in Charge of the FBI San Francisco Division. “Criminals who take advantage of the real estate auction process will be brought to justice by the FBI and the Department of Justice.”
A violation of the Sherman Act carries a maximum penalty of 10 years in prison and a $1 million fine for individuals. The maximum fine for the Sherman Act charges may be increased to twice the gain derived from the crime or twice the loss suffered by the victim if either amount is greater than $1 million. A count of conspiracy to commit mail fraud carries a maximum sentence of 30 years in prison and a $1 million fine. The government can also seek to forfeit the proceeds earned from participating in the conspiracy to commit mail fraud.
The charges today are the latest cases filed by the department in its ongoing investigation into bid rigging and fraud at public real estate foreclosure auctions in San Francisco, San Mateo, Contra Costa and Alameda counties, Calif. These investigations are being conducted by the Antitrust Division’s San Francisco Office and the FBI’s San Francisco office. Anyone with information concerning bid rigging or fraud related to public real estate foreclosure auctions should contact the Antitrust Division’s San Francisco Field Office at 415-436-6660, visit www.justice.gov/atr/contact/newcase.htm or call the FBI tip line at 415-553-7400.
Today’s charges are 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.
**The fraud charge(s) referenced in this press release were
subsequently dismissed on the government’s motion.**
Justice Department Officials Raise Awareness<br /> of Disaster Fraud HotlineRead the Press Release
WASHINGTON – The Department of Justice, the FBI and the National Center for Disaster Fraud (NCDF) remind the public there is a potential for disaster fraud in the aftermath of a natural disaster. Suspected fraudulent activity pertaining to relief efforts associated with Hurricane Sandy should be reported to the toll-free NCDF hotline at 866-720-5721. The hotline is staffed by a live operator 24 hours a day, seven days a week, for the purpose of reporting suspected scams being perpetrated by criminals in the aftermath of disasters.
NCDF was originally established in 2005 by the Department of Justice to investigate, prosecute and deter fraud associated with federal disaster relief programs following Hurricanes Katrina, Rita and Wilma. Its mission has expanded to include suspected fraud related to any natural or man-made disaster. More than 20 federal agencies – including the Justice Department’s Criminal Division, U.S. Attorney’s Offices, Department of Homeland Security Office of Inspector General, FBI, U.S. Postal Inspection Service and the U.S. Secret Service – participate in the NCDF, allowing the center to act as a centralized clearinghouse of information related to disaster relief fraud.
In the wake of natural disasters, many individuals feel moved to contribute to victim assistance programs and organizations across the country. The Department of Justice and the FBI remind the public to apply a critical eye and do due diligence before giving to anyone soliciting donations on behalf of hurricane victims. Solicitations can originate as emails, websites, door-to-door collections, mailings, telephone calls and similar methods.
Before making a donation of any kind, consumers should adhere to certain guidelines, including the following:
- Do not respond to any unsolicited (spam) incoming emails, including by clicking links contained within those messages, because they may contain computer viruses.
- Be cautious of individuals representing themselves as victims or officials asking for donations via email or social networking sites.
- Beware of organizations with copycat names similar to but not exactly the same as those of reputable charities.
- Rather than following a purported link to a website, verify the existence and legitimacy of non-profit organizations by using Internet-based resources.
- Be cautious of emails that claim to show pictures of the disaster areas in attached files, because those files may contain viruses. Only open attachments from known senders.
- To ensure that contributions are received and used for intended purposes, make donations directly to known organizations rather than relying on others to make the donation on your behalf.
- Do not be pressured into making contributions; reputable charities do not use coercive tactics.
- Do not give your personal or financial information to anyone who solicits contributions. Providing such information may compromise your identity and make you vulnerable to identity theft.
- Avoid cash donations if possible. Pay by debit or credit card, or write a check directly to the charity. Do not make checks payable to individuals.
- Legitimate charities do not normally solicit donations via money transfer services.
- Most legitimate charities maintain websites ending in .org rather than .com.
In addition to raising public awareness, the NCDF is the intake center for all disaster relief fraud. Therefore, if you observe that someone has submitted a fraudulent claim for disaster relief, or observe any other suspected fraudulent activities pertaining to the receipt of government funds as part of disaster relief or clean up, please contact the NCDF.
If you believe that you have been a victim of fraud by a person or organization soliciting relief funds on behalf of hurricane victims, or if you discover fraudulent disaster relief claims submitted by a person or organization, contact the NCDF by phone at (866) 720-5721, fax at (225) 334-4707 or email at [email protected].
You can also report suspicious e-mail solicitations or fraudulent websites to the FBI’s Internet Crime Complaint Center at www.ic3.gov.
Federal Court in Ohio Issues Preliminary InjunctionAgainst Instant Tax Service Franchiser and Its CEORead the Press Release
A federal court has preliminarily enjoined ITS Financial LLC, the parent company that owns the Instant Tax Service tax-preparation franchise operation, the Justice Department announced today. Dayton, Ohio-based ITS claims to be the fourth-largest tax-preparation firm in the nation, according to the government complaint in the civil lawsuit. Judge Timothy Black of the U.S. District Court for the Southern District of Ohio signed the order, which also applies to the company’s CEO, Fesum Ogbazion. The defendants consented to the preliminary injunction.
The preliminary injunction will remain in force pending the court’s decision following trial in the case. Trial on the government’s suit seeking to shut down the defendants with a permanent injunction is scheduled to begin on May 20, 2013, in Dayton.
According to the government complaint in the case, ITS franchisees routinely prepare and file fraudulent federal tax returns, fabricate deductions and invent phony businesses. The suit further alleges that ITS franchisees file tax returns without customer authorization and without proper employer-issued W-2 wage statements, and charge customers exorbitant and bogus fees. Defendants and their franchisees allegedly lure mostly low-income customers into ITS stores by offering deceptive and misleading loans such as “Instant Cash” or “Holiday” loans, often before the tax return filing season begins. Defendants have denied the allegations in the complaint.
Under the terms of the preliminary injunction, defendants are barred from encouraging or preparing false or fraudulent tax returns, from filing tax returns without customer authorization, from charging customers exorbitant and bogus fees, from deceiving their customers and the government, and from otherwise violating the tax laws. In addition, defendants are barred from offering any Instant Cash loan or similar loan product that relies on a customer’s paystub (rather than an employer-issued IRS W-2 year-end wage statement), and from offering any loan product that violates any federal or state law. Defendants may offer only genuine loan products provided by independent, third-party lenders. The preliminary injunction also requires defendants, at their own expense, to hire third-party monitors who will review and audit tax returns prepared by all ITS franchisees. In addition, defendants must hire a neutral company to conduct “secret shopper” visits to ITS franchisees to test their compliance with the law.
The preliminary injunction order notes that the United States ultimately seeks to permanently bar ITS and Ogbazion from further operating a tax-preparation business.
In the past 10 years, the Justice Department’s Tax Division has obtained hundreds of injunctions to stop the promotion of tax-fraud schemes and the preparation of fraudulent returns. Information about these cases is available on the Justice Department’s website .
Related Documents:
United States v. Fesum Ogbazion, et al.
Stipulated Order for Preliminary Injunction Against Fesum Ogbazion, Its Financial LLC, TCA Financial LLC, and Tax Tree LLC (PDF)Company to Pay $101,500 Civil Penalty for Dumping Sensitive Consumer Documents in Publicly-Accessible DumpstersRead the Press Release
A company that operates payday loan and check cashing stores in at least nine states has settled with the government over allegations that it violated federal regulations, the Justice Department announced today. In April 2010, law enforcement officers retrieved boxes of intact consumer documents, including credit reports, from trash cans and dumpsters near four PLS Financial Services stores in the Chicago area. The improper disposal of these documents led to an investigation by the Federal Trade Commission (FTC).
A complaint filed by the Department of Justice on behalf of the FTC, naming PLS Financial Services, PLS Group and The Payday Loan Store of Illinois as defendants, alleged that the companies violated the Federal Trade Commission Act, and the Disposal Rule, the Safeguards Rule and the Privacy Rule by improperly disposing of sensitive financial documents, failing to develop reasonable safeguards to protect sensitive consumer information, failing to provide privacy notices to consumers and misleading consumers about its privacy policies.
Judge Joan Gottschall of the U.S. District Court for the Northern District of Illinois today entered a stipulated final judgment, which requires the defendants to pay a civil penalty of $101,500 for its violations of the Disposal Rule. The Disposal Rule requires that any person who possesses consumer information derived from consumer reports for a business purpose must take reasonable measures to protect against unauthorized access or use of that information. Violations of the Disposal Rule can result in a civil penalty of up to $3,500 per violation. The stipulated final judgment also includes a permanent injunction prohibiting the defendants from misrepresenting their security and privacy policies and from violating the Disposal, Safeguards and Privacy Rules. In addition, the proposed order requires the defendants to maintain a comprehensive information security program that meets the standards of the Safeguards Rule, and to obtain third-party biennial assessments of their information security procedures for a twenty-year period.
“Companies that handle sensitive consumer documents have a duty to keep that information secure and to dispose of it properly,” said Stuart F. Delery, Acting Assistant Attorney General for the Civil Division. “Improper disposal of these documents can lead to dire consequences for consumers, including identity theft and other crimes. The Department of Justice will continue to support the FTC’s efforts to enforce federal regulations that protect consumer financial information.”
Acting Assistant Attorney General Delery thanked the FTC for referring this matter to the Department. The Consumer Protection Branch of the Justice Department’s Civil Division brought the case on behalf of the United States.
Wednesday 31 October 2012
United States Sues Virginia-based Contractor<br /> <br /> for False Claims Under Contract for Security in IraqRead the Press Release
The United States has filed a complaint against a Virginia-based contractor alleging that the company submitted false claims for unqualified security guards under a contract to provide security in Iraq, the Justice Department announced today. The company, Triple Canopy Inc. is headquartered in Reston, Va.
In June 2009, the Joint Contracting Command in Iraq/Afghanistan (JCC-I/A) awarded Triple Canopy a one-year, $10 million contract to perform a variety of security services at Al Asad Airbase – the second largest air base in Iraq. The multi-national JCC-I/A was established by U.S. Central Command in November 2004, to provide contracting support related to the government’s relief and reconstruction efforts in Iraq.
The government’s complaint alleges that Triple Canopy knowingly billed the United States for hundreds of foreign nationals it hired as security guards who could not meet firearms proficiency tests established by the Army and required under the contract. The tests ensure that security guards hired to protect U.S. and allied personnel are capable of firing their AK-47 assault rifles and other weapons safely and accurately. The government also alleges that Triple Canopy’s managers in Iraq falsified test scorecards as a cover up to induce the government to pay for the unqualified guards, and that Triple Canopy continued to bill the government even after high-level officials at the company’s headquarters had been alerted to the misconduct. The complaint further alleges that Triple Canopy used the false qualification records in an attempt to persuade the JCC-I/A to award the company a second year of security work at the Al Asad Airbase.
“For a government contractor to knowingly provide deficient security services, as is alleged in this case, is unthinkable, especially in war time,” said Stuart F. Delery, Acting Assistant Attorney General for the Civil Division of the Department of Justice. “The department will do everything it can to ensure that contractors comply with critical contract requirements and that contractors who don’t comply aren’t permitted to profit at the expense of our men and women in uniform and the taxpayers at home who support them.”
“We will not tolerate government contractors anywhere in the world who seek to defraud the United States through deliberate or reckless conduct that violates contractual requirements and risks the security of government personnel,” said Neil H. MacBride, U.S. Attorney for the Eastern District of Virginia.
The government’s claims are based on a whistleblower suit initially filed by a former employee of Triple Canopy in 2011. The suit was filed under the qui tam, or whistleblower, provision of the False Claims Act, which allows private persons to file suit on behalf of the United States. Under the act, the government has a period of time to investigate the allegations and decide whether to intervene in the action or to decline intervention and allow the whistleblower to go forward alone.
This matter was investigated by the U.S. Attorney’s Office for the Eastern District of Virginia; the Commercial Litigation Branch of the Justice Department’s Civil Division; and the Army Criminal Investigative Command (CID) and Defense Criminal Investigative Service (DCIS) of the Department of Defense.
The claims asserted against Triple Canopy are allegations only; there has been no determination of liability. The government is not aware of any injuries that occurred as a result of the alleged misconduct.
The lawsuit was filed in the U.S. District Court for the Eastern District of Virginia in Alexandria, and is captioned United States ex rel. Badr v. Triple Canopy, Inc.
Former Middle School Employee Pleads Guilty in Texas to Production and Distribution of Child PornographyRead the Press Release
WASHINGTON – A former middle school employee pleaded guilty today in Austin, Texas, to production and distribution of material relating to the sexual exploitation of children, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney for the Western District of Texas Robert Pitman.
Robert Ramos Jr., 33, of Austin, pleaded guilty today before U.S. Magistrate Judge Mark Lane in the Western District of Texas to one count of production of child pornography and one count of distribution of child pornography.
At his plea hearing, Ramos, who was previously an assistant band director at Dessau Middle School in Pflugerville, Texas, admitted that he obtained sexually explicit images of a 13-year-old girl by communicating with her on Facebook and that, to do so, he used Facebook accounts that falsely portrayed him as a teenage girl. Ramos also admitted to distributing those images to Timothy Bek, a teacher in New York who was also contacting underage girls for the purpose of obtaining sexually explicit images.
Ramos also admitted at his plea hearing that he viewed via Internet webcam and saved to his computer a video of a five-year-old girl being sexually abused by Jennifer Mahoney, of New Jersey.
Bek was sentenced on May 23, 2012, in U.S. District Court for the Western District of New York to 30 years in prison for production and possession of child pornography. Mahoney pleaded guilty on May 9, 2012, in the U.S. District Court for the District of New Jersey to one count of sexual exploitation of a child, and she awaits sentencing.
Ramos has been in custody since his arrest by FBI agents in January 2012.At sentencing, Ramos faces a maximum penalty of 50 years in prison.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse, launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
This case was investigated by the FBI and CEOS. CEOS Trial Attorney Keith Becker and Assistant U.S. Attorney Matthew Devlin of the Western District of Texas are prosecuting this case.
Federal Court Permanently Bars<br /> <br /> Mississippi Woman from Preparing Tax ReturnsRead the Press Release
A federal court has permanently barred Cynthia Carter, a Columbus, Miss., tax return preparer, from preparing federal tax returns for others, the Justice Department announced today. The civil injunction order, to which Carter consented without admitting the allegations against her, was signed by Judge Sharion Aycock of the U.S. District Court for the Northern District of Mississippi.
The government complaint alleged that Carter, who does business as Cynthia’s Tax Service, prepared returns for customers that reported false income and expenses and falsely claimed several tax credits, including the first-time-homebuyer credit.
The complaint alleged that Carter claimed the credit on her customers’ tax returns even though the customers had not bought new homes and were ineligible for the credit, and that the Internal Revenue Service (IRS) paid out more than $900,000 in erroneous refunds to Carter’s customers as a result. The complaint also alleged that Carter claimed fabricated employee business expense deductions and earned income tax credits on her customers’ returns. According to the complaint, the IRS estimates that Carter’s fraudulent tax return preparation could have resulted in $4.25 million or more in lost revenue to the United States.
The IRS lists tax-preparer fraud as one of the “Dirty Dozen” tax scams . 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 .
Alabama Woman Pleads Guilty to a Sophisticated Million Dollar Identity Theft SchemeRead the Press Release
Antoinette Djonret pleaded guilty today in two cases: one involving the filing of more than a million dollars worth of false tax returns using stolen identities and the other case involving the filing of false tax returns for clients, the Justice Department and the Internal Revenue Service (IRS) announced today.
On Aug. 9, 2012, a federal grand jury in Montgomery, Ala., returned a superseding indictment charging Djonret and five others for conspiring to file false tax returns using stolen identities and various other charges. Djonret had earlier been charged with making false claims in a criminal complaint that was filed on Feb. 22, 2012, and in an indictment that was filed on March 28, 2012. Djonret pleaded guilty in this case to one count of conspiring to file false tax returns and one count of aggravated identity theft.
“The Justice Department will not tolerate criminals stealing people’s identities and robbing the public fisc,” said Kathryn Keneally, Assistant Attorney General for the Justice Department’s Tax Division. “We will prosecute and seek just punishment against those who commit stolen identity refund fraud.”
“Identity theft causes victims great harm,” stated George L. Beck, U.S. Attorney for the Middle District of Alabama. “It victimizes honest taxpayers and causes them an enormous amount of hardship. We will continue to work tirelessly to rid our citizens of this horrible crime.”
According to the court documents, between October 2009 and April 2012, Djonret and her co-conspirators filed more than 1,000 false tax returns that claimed more than $1.7 million in fraudulent tax refunds. Djonret obtained stolen identities from multiple sources, including Alabama state databases. She and her co-conspirators filed most of the tax returns from her residence in Montgomery. They used an elaborate network of individuals to launder the tax refunds and recruited individuals to purchase prepaid debit cards to which the fraudulent tax refunds were directed. Djonret and her co-conspirators would then use the prepaid debit cards to obtain the proceeds.
In March 2012, the owner of a Montgomery tax preparation business and five return preparers, one of whom was Djonret, were charged with conspiring to defraud the United States and aiding in the filing of false tax returns. According to court documents, in 2007 and 2008, Djonret was employed as a tax preparer at Premier Tax in Montgomery. Djonret received instructions on how to file false tax returns and admitted to filing false tax returns for real clients. She pleaded guilty to one count of aiding and abetting the presentation of a false tax return in relation to this case.
Sentencing has been scheduled for Feb. 6, 2013. Djonret faces between two and 15 years in prison, three years of supervised release, restitution and a maximum fine of $750,000, or twice the loss caused by the offense.
Kathryn Keneally, Assistant Attorney General for the Justice Department’s Tax Division, and U.S. Attorney George L. Beck, Jr. commended the efforts of special agents of IRS – Criminal Investigation, who investigated the case, and Tax Division Trial Attorneys Jason H. Poole, Justin Gelfand and Michael Boteler, and Assistant U.S. Attorney Jared Morris, who are prosecuting the case.
Additional information about the Tax Division and its enforcement efforts may be found at www.justice.gov/tax.
Tuesday 30 October 2012
Japanese Automobile Parts Manufacturer Agrees to Plead <br /> Guilty to Price Fixing and Obstruction of JusticeRead the Press Release
WASHINGTON — Nagoya, Japan-based Tokai Rika Co. Ltd., has agreed to plead guilty and to pay a $17.7 million criminal fine for its role in a conspiracy to fix prices of heater control panels (HCPs) installed in cars sold in the United States and elsewhere, the Department of Justice announced today. Tokai Rika has also agreed to plead guilty to a charge of obstruction of justice related to the investigation of the antitrust violation.
According to a two-count felony charge filed today in U.S. District Court for the Eastern District of Michigan in Detroit, Tokai Rika engaged in a conspiracy, by agreeing during meetings and conversations, to rig bids for, and to fix, stabilize and maintain the prices of HCPs sold to Toyota in the United States and elsewhere, on a model-by-model basis. According to the court document, Tokai Rika and its co-conspirators carried out the conspiracy from at least as early as September 2003 until at least February 2010.
Tokai Rika manufactures and sells a variety of automotive parts, including HCPs. HCPs are located in the center console of an automobile and control the temperature of the interior environment of a vehicle.
“The conspirators used code names and chose meeting places and times to avoid detection,” said Scott D. Hammond, Deputy Assistant Attorney General of the Antitrust Division’s criminal enforcement program. “They knew their actions would harm American consumers, and attempted to cover it up when caught. The division will continue to hold accountable companies who engage in anticompetitive conduct and who obstruct law enforcement.”
According to the charge, in or about February 2010, after the company and its executives and employees became aware that the FBI had executed a search warrant on Tokai Rika’s U.S. subsidiary, a company executive directed employees to delete electronic data and destroy paper documents likely to contain evidence of antitrust crimes in the United States and elsewhere. The department said that as a result, electronic data was deleted and paper documents were destroyed, and some of the deleted electronic data and destroyed paper documents were non-recoverable.
“Those who engage in price fixing and obstruction of legal process will face severe consequences for their illegal acts,” said Robert D. Foley III, Special Agent in Charge of the FBI’s Detroit Division. “The FBI is committed to stopping such criminal activity.”
As part of the plea agreement, which will be subject to court approval, Tokai Rika has agreed to cooperate with the department’s ongoing investigation.
Including Tokai Rika, nine companies and 11 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., has agreed to plead guilty and awaits 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.
Tokai Rika is charged with price fixing in violation of the Sherman Act, which carries a maximum penalty of a $100 million criminal fine for corporations. The maximum fine for the company may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine. The maximum fine for a company found guilty of obstruction of justice is $500,000.
Today’s prosecution arose from an ongoing federal antitrust investigation into price fixing, bid rigging and other anticompetitive conduct in the automotive parts industry, which is being conducted by the Antitrust Division’s National Criminal Enforcement Section and the FBI’s Detroit Field Office with the assistance of the FBI headquarters’ International Corruption Unit. Anyone with information concerning the focus of this investigation is urged to call the Antitrust Division’s National Criminal Enforcement Section at 202-307-6694, visit www.justice.gov/atr/contact/newcase.htm , or call the FBI’s Detroit Field Office at 313-965-2323.
Friday 26 October 2012
Ohio Insurance Salesman Pleads Guilty to Tax Obstruction and Currency StructuringRead the Press Release
William R. Herder of Bellville, Ohio, pleaded guilty yesterday to corruptly endeavoring to obstruct the administration of the tax laws and currency structuring, Assistant Attorney General for the Justice Department’s Tax Division Kathryn Keneally, U.S. Attorney for the Northern District of Ohio Stephen M. Dettelbach and Special Agent in Charge, Internal Revenue Service (IRS) - Criminal Investigation, Cincinnati Field Office, Darryl K. Williams announced. Herder was previously indicted in June of this year.
According to documents filed in the case, Herder, an independent insurance salesman for Aflac Inc., failed to file timely and accurate income tax returns for the years 2000-2009 despite earning substantial insurance commissions and receiving warnings and notices from the IRS. Herder filed returns for the years 2010 and 2011 on which he reported that he owed taxes to the government, but failed to pay the almost $50,000 in taxes that he owed for those years.
According to the plea agreement and indictment filed in this case, to prevent the IRS from collecting his unpaid taxes, Herder attempted to conceal his assets and income. In 2004, Herder formed two entities in Nevada—one for the purpose of hiding his automobiles and another for the purpose of hiding his insurance business. Herder also began converting his insurance commission checks to cash and paying his expenses in cash to prevent the IRS from collecting his taxes from his bank account.
The plea agreement and indictment filed in this case also stated that Herder submitted numerous obstructive letters and documents to the IRS, Aflac, and his credit union in an effort to prevent the IRS from assessing and collecting his taxes. In these letters, Herder falsely claimed, among other things, that the tax laws were not applicable to him. In 2005, Herder attempted to pay his taxes with a fake financial instrument called an “International Bill of Exchange.”
Earlier this year, William A. Herder was found guilty at trial of tax evasion, corruptly endeavoring to obstruct the administration of the tax laws and five counts of failing to file tax returns and was sentenced to 37 months in prison. According to public records filed in that case, William A. Herder, who also sold insurance for Aflac Inc. as an independent contractor, is William R. Herder’s father.
The case was investigated by Special Agents of IRS – Criminal Investigation and is being prosecuted by Tax Division Trial Attorneys Melissa S. Siskind and Jeffrey A. McLellan.
Miami Area Assisted Living Facility Owners Plead Guilty for Roles in $63 Million Fraud SchemeRead the Press Release
WASHINGTON – Two owners of Miami area assisted living facilities (ALF) pleaded guilty today in connection with a health care fraud scheme involving defunct Miami area health provider Health Care Solutions Network Inc. (HCSN), announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida; Michael B. Steinbach, Acting Special Agent-in-Charge of the FBI’s Miami Field Office; and Special Agent in Charge Christopher B. Dennis of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG), Office of Investigations Miami office.
Raymond Rivero, 55, of Homestead, Fla., and Ivon Perez, 50, of Miami, each pleaded guilty before U.S. District Judge Cecilia M. Altonaga in the Southern District of Florida to one count of conspiracy to solicit and receive cash kickbacks. Rivero, who was the owner of Miami-based God Is First ALF, and Perez, who was the owner of Kayleen and Denis Care Corp, admitted to participating in a fraud scheme that was orchestrated by the owners and operators of HCSN, which operated purported partial hospitalization programs (PHPs), a form of intensive mental health treatment for severe mental illness.
Earlier this week, the owner of another ALF in the Miami area that was involved in the HCSN fraud scheme pleaded guilty for his role in the scheme. On Oct. 22, 2012, Daniel Martinez, 45, of Homestead, the owner of Mi Renacer ALF, pleaded guilty before Judge Altonaga to one count of soliciting and receiving cash kickbacks.
According to an indictment unsealed on May 2, 2012, HCSN obtained Medicare beneficiaries to attend HCSN for purported PHP treatment that was unnecessary and, in many instances, not provided. HCSN obtained those beneficiaries by paying kickbacks to owners and operators of ALFs or by otherwise recruiting them from ALFs and nursing homes. Rivero, Martinez and Perez pleaded guilty to referring Medicare and/or Florida Medicaid beneficiaries to HCSN in exchange for cash bribes.
According to court documents, ALF residents referred by Rivero, Martinez and Perez were not qualified to be placed in HCSN’s PHP and were only selected because they had Medicare or state of Florida Medicaid benefits. In some cases, ALF patients suffered from dementia, Alzheimer’s disease or mental retardation or were otherwise unable to benefit from the purported mental health services.
According to court documents, from 2004 through 2011, HCSN billed Medicare and Medicaid approximately $63 million for purported mental health services.
Perez also pleaded guilty before Judge Altonaga in another criminal case to a second count of conspiracy in connection with accepting kickbacks from Superstar Home Health Care Inc. for purported home health services to her ALF residents.In another related case, a former HCSN employee, Sarah Da Silva Keller, 28, was sentenced by U.S. District Judge Marcia G. Cooke in the Southern District of Florida to a 24 month prison term and ordered to pay $1,067,300 in restitution to the Medicare program. In June 2012, Keller pleaded guilty to an information charging one count of conspiracy to commit health care fraud.
According to court documents, Keller falsified patient attendance and medical records for Medicare beneficiaries who attended HCSN for mental health treatment. The falsified records were then utilized to submit fraudulent billing to the Medicare program. According to Keller’s plea agreement, Keller’s participation in the fraud resulted in more than $2.4 million in fraudulent billing to the Medicare program.
The cases are being prosecuted by Special Trial Attorney William Parente and Trial Attorney Allan J. Medina of the Criminal Division’s Fraud Section. The Superstar Home Health case is being prosecuted by Assistant U.S. Attorney Eric Morales of U.S. Attorney’s Office for the Southern District of Florida. These cases were investigated by the FBI and HHS-OIG and were 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.
Justice Department Reaches Agreement with Two Virginia Counties on Bailout Under Voting Rights ActRead the Press Release
The Justice Department announced that it has reached agreements with Carroll County and Craig County, Va., that will allow the counties and their political subdivisions to bail out from their status as “covered jurisdictions” under the special provisions of the Voting Rights Act, and thereby exempt these jurisdictions from the preclearance requirements of Section 5 of the Voting Rights Act.
The agreement with Carroll County, Va., will cover the county and its two political subdivisions, the Carroll County School District and the Town of Hillsville, Va. Additionally, the agreement with Craig County, Va., will cover the county and its two political subdivisions, the Craig County School District and the Town of New Castle, Va. The agreements are in the form of consent decrees filed today in the U.S. District Court for the District of Columbia and must be approved by the court.
Under Section 5 of the Voting Rights Act, certain covered jurisdictions, determined according to Section 4 of the act, are required to seek preclearance for any changes in voting qualifications, standards, practices or procedures from the U.S. District Court for the District of Columbia or from the U.S. Attorney General, prior to their implementation. Section 4 of the act provides that a covered jurisdiction may seek to “bail out,” or remove itself from such coverage, and therefore be exempted from the preclearance requirements, by seeking a declaratory judgment before a three-judge panel in U.S. District Court for the District of Columbia. A bailout judgment can be issued only if the court determines that the jurisdiction meets certain eligibility requirements for bailout contained in the statute, including a 10-year record of nondiscrimination in voting-related actions. The act also provides that the attorney general can consent to entry of a judgment of bailout only if, based upon investigation, the attorney general is satisfied that the jurisdiction meets the eligibility requirements.
Carroll County and Craig County filed these bailout actions in the U.S. District Court for the District of Columbia on July 17, 2012, and July 18, 2012, respectively. Counsel for both counties contacted the attorney general prior to filing the action, indicating that the counties were interested in seeking a bailout. Both counties provided the Justice Department with substantial information, and the department conducted an investigation to determine their eligibility. Based on that investigation, the department is satisfied that both Carroll and Craig counties meet the Voting Rights Act’s requirements for bailout. “In the department’s view, Carroll County and Craig County have met the requirements necessary for bailout. We reached this conclusion after thoroughly reviewing information provided by the counties and gathered during the department’s independent investigation,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “I commend the counties on their cooperation to ensure resolution of this matter.”
The consent decrees detail the legal and factual basis for a bailout determination and, if approved by the court, the requests will be granted. The court will retain jurisdiction of both cases for 10 years and can reopen either case upon the motion of the Attorney General or any aggrieved person alleging conduct by the counties that would have originally precluded the counties from bailing out if it had occurred during the 10-year period preceding entry of the consent decrees.
Information about bailout, the Voting Rights Act and other federal voting laws is available on the Department of Justice website at www.justice.gov/crt/voting. Complaints may be reported to the Voting Section of the Justice Department’s Civil Rights Division at 1-800-253-3931.
Detroit Area Physician, Home Health Agency Owner and Patient Recruiter Convicted in $14.5 Million Medicare Fraud SchemeRead the Press Release
WASHINGTON – A federal jury in Detroit today convicted a physician, a home health agency owner and a patient recruiter for their participation in a $14.5 million Medicare fraud scheme, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney Barbara L. McQuade of the Eastern District of Michigan; Robert Foley III, Special Agent in Charge of the FBI Detroit Field Office; and Special Agent in Charge Lamont Pugh, III of the HHS Office of Inspector General (HHS-OIG), Office of Investigations Detroit Office.
Dr. Pramod Raval, 59, was found guilty in U.S. District Court for the Eastern District of Michigan of one count of conspiracy to commit health care fraud and one count of conspiracy to solicit or receive health care kickbacks in exchange for referring patients to two Detroit area home health care companies, Patient Choice Home Healthcare Inc. and All American Home Care Inc.
Chiradeep Gupta, 38, a physical therapist and part-owner of All American, was found guilty of one count of conspiracy to commit health care fraud, one count of conspiracy to commit money laundering and three substantive counts of money laundering.
Richard Shannon, 39, a patient recruiter, was found guilty of one count of conspiracy to commit health care fraud.
The defendants were charged in a superseding indictment returned March 27, 2012. Sixteen other individuals who worked at or were associated with Patient Choice and All American have previously pleaded guilty.
According to evidence presented at trial, the defendants and their co-conspirators caused the submission of false and fraudulent claims to Medicare through Patient Choice and All American, two home health care companies located in Oak Park, Mich., that purported to provide skilled nursing and physical therapy services to Medicare beneficiaries in the greater Detroit area.
The evidence showed that the defendants and their co-conspirators used patient recruiters, who paid Medicare beneficiaries to sign blank documents for physical therapy services that were never provided and/or medically unnecessary. The owners of Patient Choice and All American paid physicians to sign referrals and other therapy documents necessary to bill Medicare. Physical therapists and physical therapist assistants provided through contractors would then create fake medical records using the blank, pre-signed forms obtained by the patient recruiters to make it appear as if physical therapy services were actually rendered, when, in fact, the services had not been rendered.
According to evidence presented at trial, Raval referred both patients from his own practice and patients brought into the scheme by recruiters to Patient Choice and All American in exchange for kickbacks. Gupta provided to Patient Choice and All American physical therapists and physical therapist assistants who created fake patient files using blank, pre-signed forms obtained by patient recruiters, to make it appear as if the physical therapy services billed to Medicare had actually been given. Gupta also doctored and directed the doctoring of fake patient files. The evidence at trial showed that Gupta laundered the proceeds of the fraud through multiple shell companies. Shannon paid patients in cash in order to obtain their signatures on blank physical therapy forms used to create fake therapy documents.
Vishnu Meda, a physical therapist assistant at Patient Choice and All American, was acquitted today of one count of conspiracy to commit health care fraud.
The case was prosecuted by Assistant Chief Gejaa T. Gobena and Trial Attorneys Catherine K. Dick and Niall M. O’Donnell of the Criminal Division’s Fraud Section. The investigation was led by the FBI and HHS-OIG, and was brought by the Medicare Fraud Strike Force, a joint effort of the U.S. Attorney’s Office for the Eastern District of Michigan and 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.
Alleged Trafficker of Counterfeit Automotive Accessories Indicted in VirginiaRead the Press Release
WASHINGTON – An alleged trafficker of counterfeit automotive accessories was indicted yesterday by a federal grand jury in the Eastern District of Virginia for allegedly participating in a conspiracy to sell to unsuspecting U.S. consumers more than $3 million worth of counterfeit General Motors (GM) and Bavarian Motor Works (BMW) automotive diagnostic devices and other automotive equipment, Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney for the Eastern District of Virginia Neil H. MacBride, Assistant Director Ronald T. Hosko of the FBI’s Criminal Investigative Division and FBI Atlanta Special Agent In Charge Mark Guiliano announced today.
Katiran Lee, 39, an Indonesian national who allegedly sold the counterfeit goods while he was living in Duluth, Ga., was charged with two counts of trafficking in counterfeit goods, four counts of wire fraud and one count of conspiracy to commit wire fraud.
According to the indictment, from August 2008 through December 2011, Lee conspired with manufacturers in the People’s Republic of China (PRC) to sell automotive diagnostic devices bearing counterfeit GM and BMW marks to consumers in the United States. Such diagnostic devices are used by mechanics to identify problems with and assure the safety of motor vehicles employing electronic control systems. Lee allegedly advertised and sold the diagnostic devices on eBay and through his own website, and had the PRC manufacturers send counterfeit devices bearing unauthorized GM and BMW marks directly to his customers.
According to the indictment, during this same period, Lee also advertised and sold over 35,000 counterfeit programmed keys and key fobs for vehicles produced by GM, BMW and numerous other automotive manufacturers, including Chrysler, Honda, Toyota, Audi, Mercedes Benz, Ford, Infiniti, Land Rover, Mazda, Mitsubishi, Nissan, Peugeot, Renault, Subaru, Suzuki, and Volkswagen. Lee allegedly programmed the keys himself and affixed counterfeit marks to deceive consumers into believing that the products came from the respective automotive manufacturers.In the indictment, the government is seeking forfeiture of computers, programming equipment and thousands of blank keys and trademarked automotive emblems recovered during a search of Lee’s home on Feb. 22, 2012, and the forfeiture of properties totaling up to $600,000.
The case is being prosecuted by Trial Attorney Evan Williams of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney Lindsay Kelly of the Eastern District of Virginia and was investigated by the FBI’s Intellectual Property Rights Unit as part of “Operation Engine Newity,” an international initiative targeting the production and distribution of counterfeit automotive products that impact the safety of the consumer, and FBI Atlanta.
The FBI is a full partner at the National Intellectual Property Rights Coordination Center (IPR Center). The IPR Center is one of the U.S. government’s key weapons in the fight against criminal counterfeiting and piracy. The IPR Center uses the expertise of its 19 member agencies to share information, develop initiatives, coordinate enforcement actions and conduct investigations related to intellectual property (IP) theft. Through this strategic interagency partnership, the IPR Center protects the public’s health and safety, the U.S. economy and the war fighters. To report IP theft or to learn more about the IPR Center, visit www.IPRCenter.gov.
The enforcement action announced today is one of many efforts being undertaken by the Department of Justice Task Force on Intellectual Property (IP Task Force). Attorney General Eric Holder created the IP Task Force to combat the growing number of domestic and international intellectual property crimes, protect the health and safety of American consumers, and safeguard the nation’s economic security against those who seek to profit illegally from American creativity, innovation, and hard work. The IP Task Force seeks to strengthen intellectual property rights protection through heightened criminal and civil enforcement, greater coordination among federal, state, and local law enforcement partners, and increased focus on international enforcement efforts, including reinforcing relationships with key foreign partners and U.S. industry leaders. To learn more about the IP Task Force, go to www.justice.gov/dag/iptaskforce/.
Thursday 25 October 2012
Two Kentucky Men Face up to Life in Prison After Federal Jury Convicts on Kidnapping ChargesRead the Press Release
A federal jury late last night convicted two Harlan County, Ky., men on federal kidnapping charges and conspiracy charges, exposing them to a maximum of life imprisonment. The jury also acquitted the men of violating the sexual orientation provision of the Matthew Shepard James Byrd, Jr. Hate Crimes Prevention Act. David Jason Jenkins, 37, and Anthony Ray Jenkins, 20, were convicted on the kidnapping and conspiracy charges for their roles in kidnapping and assaulting 28-year-old Kevin Pennington, a gay man.
The federal jury in London, Ky., convicted the defendants for their conduct related to the April 4, 2011, assault of Pennington. Testimony at trial established that the defendants, who are cousins, carried out the crime with help from two other relatives – Mable Ashley Jenkins, 20, and Alexis LeeAnn Jenkins, 19 – who both pleaded guilty to aiding and abetting kidnapping and aiding and abetting the hate crime assault against Kevin Pennington prior to trial and testified against the defendants. Both women pleaded guilty to federal hates crimes charges, representing the first federal convictions under the sexual orientation provision of the Matthew Shepard James Byrd, Jr. Hate Crimes Prevention Act.
The evidence established that the defendants and their female co-conspirators planned in advance of the assault to kidnap Pennington, take him to a remote location and beat him to death. After luring Pennington by false pretenses into a truck being driven by Anthony Jenkins, the group drove Pennington up a deserted mountain road into Kingdom Come State Park, where they dragged Pennington into the road and beat him.
The evidence also established that Pennington escaped while the defendants were searching in the back of the truck for a tire iron to use to kill Pennington. Pennington ran off the road and threw himself over a ledge, where he hid behind a rock until the defendants finally gave up searching for him and drove away. Pennington staggered part-way down the mountain, where he found a ranger shack, broke a window and called 911.
The defendant’s co-conspirators, Ashley and Alexis Jenkins, both testified that they and the defendants had agreed in advance to lure Pennington into the truck, drive him to a deserted area and beat him because of his sexual orientation. The women also testified that during the beating, the defendants and their co-conspirators used anti-gay slurs and yelled, “Kill the faggot!” and that the group intended to kill Pennington.
The jury heard six days of testimony, after which it deliberated for hours before returning yesterday’s guilty verdicts. U.S. District Court Judge Gregory F. Van Tatenhove will sentence the defendants on Feb. 21, 2013.
“As the jury recognized through its verdict, this kidnapping and assault was a vicious and criminal act. The Department of Justice will continue will continue to use every tool in our arsenal to vindicate the rights of victims of violent crimes,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “ The Department will also continue to vigorously investigate hate crimes allegations and support state and local law enforcement in their efforts to identify these crimes.”
“We are pleased that all those who participated in this cruel criminal episode have been convicted of serious offenses,” said Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky. “We expect that the punishment will reflect the severity of the crimes. Our trial team and law enforcement partners are to be congratulated for their excellent work in this matter.”
This case was investigated by Special Agents Anthony Sankey and Mike Brown with the FBI and was prosecuted by Assistant U.S. Attorney Hydee Hawkins from the U.S. Attorney Office for the Eastern District of Kentucky, and Trial Attorney Angie Cha from the Civil Rights Division.
Justice Department Settles Discrimination Claim Against New Jersey CompanyRead the Press Release
The Justice Department announced today that it reached an agreement with Advantage Home Care LLC, a home health care provider based in Hackensack, N.J., resolving claims that the company violated the anti-discrimination provision of the Immigration and Nationality Act (INA), when it required newly-hired lawful permanent residents to provide more or different documents during the Form I-9 employment eligibility verification process.
The investigation stemmed from a charge filed by an individual after Advantage Home Care, formerly known and doing business as Executive Care LLC, had a criminal background check run that erroneously concluded that the charging party’s Social Security number was invalid. The charging party visited the Social Security Administration, which told him that his number was valid, but Advantage Home Care still refused to employ him based on the background check. The subsequent investigation revealed that Advantage Home Care imposed greater requirements to verify employment eligibility for lawful permanent residents as compared to U.S. citizen employees. The INA requires employers to treat all authorized workers in the same manner during the employment eligibility verification process, regardless of their national origin or citizenship status.
Under the settlement agreement, Advantage Home Care will pay $1,633 in back pay to the charging party, and $46,575 in civil penalties to the United States. The company will also work with the department to identify and pay back pay to additional potential victims that suffered economic harm as a result of the practice. Advantage Home Care will also train its human resources staff about employers’ responsibilities to avoid discrimination in the employment eligibility verification process and be subject to reporting and compliance monitoring by the department for three years.
“The Civil Rights Division commends Advantage Home Care for prioritizing compliance with the anti-discrimination provision of the Immigration and Nationality Act and working together with the division to identify and compensate potential injured parties,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “We encourage all employers to evaluate their policies and practices to ensure compliance with the INA’s anti-discrimination provision.”
The Office of Special Counsel (OSC) for Immigration-Related Unfair Employment Practices is responsible for enforcing the anti-discrimination provision of the INA, which protects work-authorized individuals from employment discrimination on the basis of citizenship status or national origin discrimination, including discrimination in hiring and the employment eligibility verification (Form I-9) process.
For more information about protections against employment discrimination under the immigration laws, call the OSC’s worker hotline at 1-800-255-7688 or the OSC’s employer hotline at 1-800-255-8155. TDD for hearing impaired is 800-237-2515. You may also sign up for a no-cost webinar at www.justice.gov/crt/osc/webinars.php , email [email protected] or visit the website at www.justice.gov/crt/about/osc .
Justice Department Reaches Agreement to Extend Critical Reforms at the Los Angeles County Juvenile Probation CampsRead the Press Release
The Justice Department has reached an agreement with the county of Los Angeles to extend critical reforms at the Los Angeles County Juvenile Probation Camps that were set to expire later this month. The agreement amends a memorandum of agreement (MOA) entered into in 2008 to resolve the department’s investigation into conditions of confinement at the juvenile camps.
While the county was unable to achieve the goals set forth in the initial 2008 agreement, substantial reforms have occurred. The amended MOA builds on these improvements. The department and the county agree that additional time and specific measures are necessary to ensure that youth receive adequate rehabilitation and related services in the camps and in the community. As part of the amended MOA, the county agrees to continue implementing corrective measures related to rehabilitation, behavior management, substance abuse treatment, staffing and quality assurance to ensure that the reforms are sustainable and result in improved outcomes for youth. The remaining requirements of the MOA will terminate based on reports from a team of independent monitors that the county has substantially complied with those requirements.
The county also agreed to promote the rehabilitation of youth by expanding youth access to community-based alternatives to incarceration, consistent with public safety and the best interests of the youth. These innovative measures, designed to prevent unnecessary detention of youth, are among the most expansive the department has obtained in a juvenile justice system as part of its enforcement of the Civil Rights of Institutionalized Persons Act (CRIPA) and the Violent Crime Control and Law Enforcement Act of 1994. The measures are intended to provide qualifying youth with greater opportunities to receive rehabilitation and related services near their home communities where they can benefit from family and community supports. The measures include steps to:
- Divert youth from detention, as appropriate, including by collaborating with law enforcement agencies and judges to increase awareness of alternatives to incarceration;
- Expand access to community-based placements by providing necessary security to youth who could benefit from rehabilitation services in the community; opening two additional day reporting centers; contracting with alternative housing providers; and improving re-entry and transition services;
- Refer youth to community-based services and programs, as appropriate; and
- Establish a long-term partnership with an outside research entity to study recidivism and youth outcomes.
“We commend the county for its continued cooperation in reforming the juvenile camps and for its commitment to ensuring that the constitutional rights of youth are protected,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The amendment will result in better outcomes for youth and will provide them with more opportunities to benefit from rehabilitation services closer to home.”
“The amendment to the MOA resulting from today’s agreement will lead to more integrated treatment options for youth in custody,” said André Birotte Jr., U.S. Attorney for the Central District of California. “County youth will continue to receive much needed rehabilitation services in the camps, while also having greater access to community-based care that promotes their well-being and is delivered in a manner that is consistent with public safety. Continuing to provide these rehabilitative options should help us all by decreasing recidivism.”
In October 2008, the department and county entered into the MOA to resolve the department’s findings of unlawful conditions at the juvenile camps following a comprehensive investigation under CRIPA and the Violent Crime Control and Law Enforcement Act of 1994. The original MOA called for broad reforms in areas related to protection from harm, suicide prevention, mental health care, and quality assurance. The county is expected to achieve full compliance with all terms of the amended MOA by Dec. 31, 2014. The Civil Rights Division’s Special Litigation Section and the Civil Rights Unit of the U.S. Attorney’s Office for the District of Central California are enforcing the MOA.
For more information on the Justice Department’s Civil Rights Division, please visit www.justice.gov/crt
- Divert youth from detention, as appropriate, including by collaborating with law enforcement agencies and judges to increase awareness of alternatives to incarceration;
Former Texas Parole Officer Indicted for Bribery Scheme Involving Assigned ParoleeRead the Press Release
WASHINGTON – A former Texas state parole officer was arrested today in Dallas on charges of engaging in a bribery scheme involving one of her assigned parolees, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division.
A federal grand jury in the Northern District of Texas returned a two-count indictment yesterday charging Nichelle Derricks, 37, of Cedar Hill, Texas, with one count of honest services wire fraud and one count of federal programs bribery.
According to the indictment, while serving as a Texas Department of Criminal Justice (TDCJ) parole officer, Derricks and one of her assigned parolees developed an improper relationship in which Derricks secretly used her official position with TDCJ to enrich herself and others by soliciting and receiving cash payments, gifts, furniture, household goods and items, food and beverages, and other things of value from the parolee in exchange for favorable official action benefitting the parolee. The scheme, according to the indictment, was conducted without the authorization, knowledge or approval of TDCJ and contrary to TDCJ procedures and requirements.
The indictment further alleges that Derricks repeatedly allowed the parolee to violate the terms of his parole by, among other things, permitting him to travel outside Texas without prior, written approval and by allowing the parolee to engage in prohibited financial transactions. According to the indictment, such favorable treatment allowed the parolee to facilitate a massive scheme to defraud investors through an oil and gas company founded and operated by the parolee while he was on state parole.
If convicted, Derricks faces a maximum potential penalty of 20 years in prison on the honest services wire fraud charge and 10 years in prison on the federal programs bribery charge. Each charge also carries a maximum $250,000 fine.
The case is being prosecuted by Trial Attorneys John P. Pearson, Edward P. Sullivan and Jeffrey E. Tsai of the Criminal Division’s Public Integrity Section. The case is being investigated by the FBI Dallas Field Office, with assistance from the U.S. Secret Service and the TDCJ Office of Inspector General.
The charges and allegations contained in the indictment are merely accusations and the defendant is presumed innocent unless and until proven guilty.
Boehringer Ingelheim to Pay $95 Million<br /> <br /> to Resolve False Claims Act AllegationsRead the Press Release
Connecticut-based Boehringer Ingelheim Pharmaceuticals Inc. has agreed to pay $95 million to resolve allegations relating to the improper promotion of the stroke-prevention drug Aggrenox, the chronic obstructive pulmonary disease (COPD) drugs Atrovent and Combivent, and the hypertension drug Micardis, the Justice Department announced today.
The Food and Drug Administration (FDA) has approved Aggrenox to prevent secondary strokes, Combivent to treat continued symptoms of bronchospasm in patients with COPD who already are on a bronchodilator and Micardis to treat hypertension. The settlement resolves allegations that Boehringer improperly marketed each of these drugs and caused false claims to be submitted to government health care programs.
According to the government’s allegations, Boehreinger promoted each of the three drugs for uses that were not medically accepted indications and were not covered by federal health care programs. Specifically, the settlement resolves allegations that Boehreinger promoted Aggrenox for certain cardiovascular events such as myocardial infarction and peripheral vascular disease; that Combivent was marketed for use prior to another bronchodilator in treating COPD; and that Micardis was marketed for treatment of early diabetic kidney disease. The uses were not for medically accepted indications and were not covered by federal health care programs
Additionally, the settlement resolves allegations that Boehringer knowingly promoted the sale and use of Combivent and Atrovent at doses that exceeded those covered by federal health care programs and that Boehringer knowingly made unsubstantiated claims about the efficacy of Aggrenox, including that it was superior to Plavix. Finally, the agreement resolves allegations that the company paid kickbacks to health care professionals to induce them to prescribe Aggrenox, Atrovent, Combivent and Micardis.
As a result of today’s $95 million settlement, the federal government will obtain $78,455,048, and state Medicaid programs will obtain $16,544,952.
The settlement resolves a False Claims Act lawsuit filed in the District of Maryland by Robert Heiden, a former sales representative for Boehringer. The whistleblower, or qui tam, provisions of the False Claims Act permit the relator to obtain a portion of the proceeds obtained by the federal government. As part of today’s resolution, Mr. Heiden will receive more than $17 million.
“The improper promotion of pharmaceuticals undermines the FDA’s important role in protecting the American public by determining whether a drug is safe and effective for a particular use before it is marketed,” said Stuart Delery, Acting Assistant Attorney General for the Civil Division. “Such improper conduct by pharmaceutical companies also causes the government to pay significant amounts for products for which it would not otherwise pay. This civil settlement by Boehringer demonstrates that such conduct will not be tolerated.”
“Pharmaceutical companies cannot market drugs for unapproved uses, make unwarranted claims about their benefits, or pay kickbacks to doctors who prescribe them,” said Rod J. Rosenstein, U.S. Attorney for the District of Maryland. “Drugs should be marketed only for purposes for which they are deemed safe and effective, and a doctor’s decision to prescribe a drug should not be influenced by his personal financial interest.”
Also as part of the settlement, Boehringer has agreed to enter into an expansive Corporate Integrity Agreement that provides for procedures and reviews to be put in place to avoid and promptly detect conduct similar to that which gave rise to the settlement.
“Fraudulent marketing of drugs through off-label promotion and kickbacks to doctors undermines trustworthy medical decision-making, and FDA’s protections in the drug approval process. “Such conduct -- as alleged in this case -- poorly serves patients and taxpayers alike,” said Daniel R. Levinson, Inspector General of the U.S. Department of Health and Human Services (HHS). “OIG is overseeing a Corporate Integrity Agreement to improve the transparency of company relationships with physicians and accountability of Board members and corporate executives.”
“Today’s settlement sends a strong message to the pharmaceutical industry that the federal government will not tolerate fraudulent activity which undermines the integrity of the health care system,”said Ilisa Bernstein, Acting Director of the Office of Compliance in the FDA’s Center for Drug Evaluation and Research.
This resolution is part of the government’s emphasis on combating health care fraud and another step for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced by Attorney General Eric Holder and Kathleen Sebelius, Secretary of HHS, in May 2009. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover over $10 billion since January 2009 in cases involving fraud against federal health care programs. The Justice Department’s total recoveries in False Claims Act cases since January 2009 are over $13.8 billion.
The claims settled by this agreement are allegations only; there has been no determination of liability.
Wednesday 24 October 2012
U.S. Postal Service Mail Carrier Indicted for Involvement with Stolen Identity Refund Fraud ConspiracyRead the Press Release
On Oct. 16, 2012, Vernon Harrison, of Montgomery, Ala., was indicted by a federal grand jury on charges of conspiring to file false claims, mail fraud, aggravated identity theft and embezzlement from the mail, the Justice Department, the Internal Revenue Service (IRS), and the U.S. Postal Service, Office of the Inspector General (OIG), announced today after the indictment was unsealed.
According to the indictment, Harrison was a U.S. Postal Service mail carrier who was part of a stolen identity refund fraud conspiracy. Members of the conspiracy filed false tax returns using stolen identities from various locations including the Northern District of Alabama. The fraudulent tax refunds were directed to debit cards that were mailed to addresses on Harrison’s postal route in Montgomery, Ala. Harrison retrieved the debit cards from the mail and, for a fee, provided them to a co-conspirator.
An indictment merely alleges that crimes have been committed, and the defendant is presumed innocent until proven guilty beyond a reasonable doubt. If convicted, Harrison faces up to 10 years in prison for the conspiracy count, 20 years for each mail fraud count, 5 years for each mail embezzlement count and a mandatory 2-year sentence for the aggravated identity theft counts. He is also subject to fines, forfeiture, and mandatory restitution if convicted.
The case was investigated by special agents of IRS - Criminal Investigation and the U.S. Postal Service, OIG. Tax Division Trial Attorneys Jason Poole and Michael Boteler are prosecuting the case with assistance from the U.S. Attorney’s Office for the Middle District of Alabama and, in particular, Assistant U.S. Attorney Todd Brown.
Additional information about the Justice Department’s Tax Division and its enforcement efforts may be found at www.justice.gov/tax .
Justice Department Reaches Settlement with Maryland Restaurant over Accessibility ViolationsRead the Press Release
The Justice Department announced today that it reached a settlement with Mrs. K’s Tollhouse Restaurant of Silver Spring, Md., to remedy alleged violations of the Americans with Disabilities Act (ADA). The agreement resolves allegations that the restaurant failed to remove architectural barriers that made parts of it inaccessible to people with disabilities, including those who use wheelchairs.
Under the settlement agreement, Mrs. K’s will make the interior of the restaurant, the exterior routes and the parking lots accessible to people with disabilities. Mrs. K’s will also install a new fully accessible restroom and retrofit an existing one.
“People with disabilities have the right to go to restaurants just like everyone else,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The department is committed to ensuring that this civil right is upheld for all people with disabilities.”
The ADA requires public accommodations, including restaurants, to provide people with disabilities, including those who use wheelchairs, full and equal enjoyment of the public accommodation’s goods, services and facilities.
The Justice Department provides a webpage specifically dedicated to information about the ADA at www.ada.gov . Those interested in finding out more about these settlements or the obligations of public accommodations under the ADA may call the Justice Department’s toll-free ADA information line at 800-514-0301 or 800-514-0383 (TTY), or access its ADA website at www.ada.gov . ADA complaints may be filed by email to [email protected] .
Justice Department Files Lawsuit in Mississippi to Protect the Constitutional Rights of ChildrenRead the Press Release
The Justice Department filed a lawsuit today against the city of Meridian, Miss.; Lauderdale County, Miss.; judges of the Lauderdale County Youth Court; and the state of Mississippi alleging that the defendants systematically violate the due process rights of juveniles.
The litigation seeks remedies for violations of the Fourth, Fifth and 14th amendments of the U.S. Constitution. The complaint alleges that the defendants help to operate a school-to-prison pipeline in which the rights of children in Meridian are repeatedly and routinely violated. As a result, children in Meridian have been systematically incarcerated for allegedly committing minor offenses, including school disciplinary infractions, and are punished disproportionately without due process of law. The students most affected by this system are African-American children and children with disabilities. The practices that regularly violate the rights of children in Meridian include:
- Children are handcuffed and arrested in school and incarcerated for days at a time without a probable cause hearing, regardless of the severity – or lack thereof – of the alleged offense or probation violation.
- Children who are incarcerated prior to adjudication in the Lauderdale County system regularly wait more than 48 hours for a probable cause hearing, in violation of federal constitutional requirements.
- Children make admissions to formal charges without being advised of their Miranda rights and without making an informed waiver of those rights.
- Lauderdale County does not consistently afford children meaningful representation by an attorney during the juvenile justice process, including in preparation for and during detention, adjudication and disposition hearings.
“ The department is bringing this lawsuit to ensure that all children are treated fairly and receive the fullest protection of the law,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “ It is in all of our best interests to ensure that children are not incarcerated for alleged minor infractions, and that police and courts meet their obligations to uphold children’s constitutional rights.”
The department issued findings on Aug. 10, 2012 after a comprehensive investigation that began in December 2011. The department found reasonable cause that the defendants were violating Section 14141 of the Violent Crime Control and Law Enforcement Act of 1994, which prohibits a pattern or practice of deprivation of civil rights in the administration of juvenile justice . In its findings letter, the department stated its willingness to engage in meaningful negotiations to remedy the identified violations, but defendants did not timely engage in such negotiations.
“It is disappointing that the local and state government agencies involved in the administration of juvenile justice in Lauderdale County have not worked cooperatively with the Justice Department to resolve these violations,” said Gregory Davis, U.S. Attorney for the Southern District of Mississippi. “The U.S. Attorney’s Office is committed to making sure that children in the Lauderdale County juvenile justice system are treated in accordance with the Constitution.”
This investigation was conducted by the Civil Rights Division’s Special Litigation Section, working in conjunction with the U.S. Attorney’s Office for the Southern District of Mississippi. The Civil Rights Division’s Educational Opportunities Section also has a long-standing school desegregation case against the Meridian Public School District. The district is currently working cooperatively with the department to resolve issues in that case.
The Justice Department, including U.S. Attorney Gregory Davis and Deputy Assistant Attorney General Roy Austin, will be hosting a telephonic community conference call open to members of the public on Thursday, Oct. 25 from 7:30 – 8:30 p.m. CDT. The purpose of this call is to provide community members with information about the investigation and complaint. To participate in the call, dial the following toll-free number: 888-989-9731 and when prompted by the operator, provide your name and the pass code: 7015490.
For more information on the Justice Department’s Civil Rights Division, please visit www.justice.gov/crt . The public may contact the department generally about this matter by calling toll-free at 1-855-544-5131, or send an email to [email protected]
Former Supervisor at Georgia Prison Is the Third to Plead Guilty to Conspiring with Other Officers to Assault and Injure InmatesRead the Press Release
Emmett McKenzie, 31, from Montezuma, Ga., formerly a sergeant at Macon State Prison in Oglethorpe, Ga., pleaded guilty to conspiring with other correctional officers to violate the civil rights of an inmate in 2010, the Justice Department Announced today. McKenzie, who most recently served as a lieutenant at Dooly State Prison in Unadilla, Ga., is the third officer to plead guilty in the course of the ongoing federal investigation.
In connection with his plea, McKenzie admitted that he saw members of the Correctional Emergency Response Team (CERT) as they escorted an inmate, T.D., from the scene of an incident, to the gym. McKenzie acknowledged that he knew that the officers would assault T.D. in the gym.
McKenzie went into the gym and approached the inmate, who was handcuffed and surrounded by CERT, and told him, “Don’t mess with my officers.” A CERT member then punched the inmate and threw him to the ground, and defendant McKenzie did nothing to stop the assault. Instead, McKenzie left the gym, knowing that CERT members would continue to beat the inmate. McKenzie told Macon State Prison supervisors that the CERT members were beating inmate T.D., but the supervisors also took no action to stop the assault on the inmate.
McKenzie faces a maximum penalty of five years in prison.
“Mr. McKenzie is the third person to admit that he conspired to injure inmates, and that he tried to cover up criminal misconduct by Macon State Prison officers,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division.. “The Justice Department will continue to vigorously prosecute correctional officers who violate the constitutional rights of inmates.”
“We count on the guards in our prison system to not only do an important job, but to do their duties in a way that respects their positions of authority, the law and ultimately the population they supervise,” said Michael J. Moore, U.S. Attorney for the Middle District of Georgia. “Abuses of authority, under any circumstances, have no place in our prison system and will not be tolerated by my office.”
This case is being investigated by the FBI, and is being prosecuted by Special Litigation Counsel Forrest Christian and Trial Attorney Tona Boyd of the Civil Rights Division of the Department of Justice, with the assistance of the U.S. Attorney’s Office for the Middle District of Georgia and the support of the Georgia Bureau of Investigation.
Former San Juan County, New Mexico, Sheriff’s Deputy Pleads Guilty to Violating Civil Rights of Man by Assaulting Him with a FlashlightRead the Press Release
R. Dale Frazier, 57, of Flora Vista, N.M., pleaded guilty today in U.S. District Court in Albuquerque, N.M., to a federal civil rights charge in connection with the unlawful assault and beating of Dovovan Tanner with a flashlight.
On June 27, 2012, Frazier was indicted by a federal grand jury on one count of violating Tanner’s right to be free from the unreasonable use of force by a police officer. According to the indictment, the assault on Tanner resulted in bodily injury and involved the use of a dangerous weapon.
The federal investigation revealed that on March 17, 2011, the defendant used his department-issued Maglight flashlight to strike Tanner in the head, neck and body after encountering Tanner and his brother outside a bar in Farmington, N.M. Frazier struck Tanner two times in the head and neck with his flashlight while Tanner was on the hood of his police vehicle. Frazier stuck Tanner an additional three times with his flashlight while Tanner was on the ground. The assault of Tanner was captured on Frazier’s police dash camera.
“This guilty plea is an acknowledgment of the fact that the defendant in this case abused his law enforcement powers when he unnecessarily assaulted a person in his custody,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division.. “While law enforcement officers are always permitted to take reasonable steps to defend themselves and others from harm, our Constitution prohibits gratuitous assaults by officers. The Justice Department continues to vigorously prosecute these abuses of power.”
“The public places great trust in law enforcement officers to use their authority the right way – and only the right way,” said Kenneth J. Gonzales, U.S. Attorney for the District of New Mexico. “When they intentionally abuse that authority, they will be held accountable. Today, by pleading guilty to a federal felony offense, Dale Frazier was held accountable for seriously violating a young man’s civil rights by using excessive force against him on St. Patrick’s Day in 2011.”
“Law enforcement officers who violate the civil rights of those they have sworn to serve seriously damage the public's confidence in our government institutions,” said Carol K.O. Lee, Special Agent in Charge of the Albuquerque Division of the FBI. “The Albuquerque FBI Division, in close partnership with the U.S. Justice Department's Civil Rights Division, the U.S. Attorney's Office and law enforcement throughout New Mexico, will continue to thoroughly investigate all reports of civil rights violations.”
These guilty pleas were the result of a cooperative effort between the U.S. Attorney’s Office for the District of New Mexico and the Justice Department’s Civil Rights Division. This case was investigated by the Albuquerque Division of the FBI. It is being prosecuted by Assistant U.S. Attorneys Mark Baker and Roberto Ortega for the District of New Mexico and Trial Attorney Sheldon L. Beer of the Civil Rights Division of the Department of Justice.
Former Employee of Army Contractor Pleads Guilty to Bribery for Facilitating Theft by Trucking Contractor in AfghanistanRead the Press Release
WASHINGTON – A Houston woman pleaded guilty today to bribery charges for her role in a scheme to fraudulently bill the U.S. Army for trucking services in Afghanistan, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division.
Diyana Montes, 29, pleaded guilty before U.S. District Judge James E. Boasberg in the District of Columbia to one count of bribery.
According to court documents, from approximately April 2008 through December 2008, Montes was an employee of Kellogg, Brown and Root (KBR), a private contractor with operations in Afghanistan. Montes worked at Bagram Airfield, Afghanistan, where KBR held a contract with the United States.
KBR’s contract involved providing services to the Army’s Movement Control Branch (MCB). The MCB’s mission was to contract with local Afghan trucking companies to transport U.S. military equipment, fuel and other supplies throughout Afghanistan. As part of this mission, the MCB coordinated requests from various U.S. military units for trucking services and assigned those requests to particular contractors. Each trucking request generated various specific documents, including “transportation movement requests” (TMR), which authorized the use of trucks.
According to court documents, Montes’s duties included receiving TMRs from various contractors and reconciling any discrepancies between the amount of services described in the TMRs and the amount of services the contractors claimed in their invoices. Once Montes reviewed the documents and determined they were accurate, she would pass them on to other contracting personnel, who would rely on her review in approving payments to the trucking company.
On numerous occasions, according to court documents, Montes received and reviewed TMRs and invoices for services allegedly provided by Afghanistan Trade Transportation (ATT), a trucking company contracted by the U.S. Army, that fraudulently represented that ATT provided services that Montes knew were not in fact performed. According to Montes’s plea agreement, she knew the invoices from ATT contained service claims that were not accurate, and she passed them along for payment with the knowledge that the billings were fraudulent.
According to her plea agreement, from approximately May 2008 through December 2008, in return for her knowingly handling the fraudulent TMRs and invoices, Montes received from ATT approximately $50,000, consisting of $35,000 wired to her personal bank account in the United States and another $15,000 in cash paid to her on several occasions in Afghanistan.
This case is being prosecuted by Special Trial Attorney Mark H. Dubester of the Criminal Division’s Fraud Section and former Fraud Section Trial Attorney Mark Pletcher, currently of the U.S. Attorney’s Office for the Southern District of California. The case was investigated by the Special Inspector General for Afghanistan Reconstruction, the Defense Criminal Investigative Service, the U.S. Army Criminal Investigation Division and the FBI.
Alabama Man Indicted for Stolen Identity Refund FraudRead the Press Release
A federal grand jury in Montgomery, Ala., returned an indictment charging Kenneth Jerome Blackmon Jr., with aggravated identity theft, wire fraud, access device fraud and misuse of a Social Security number, the Justice Department and the Internal Revenue Service (IRS) announced today.
According to the indictment, from January 2011 through November 2011, Blackmon participated in a scheme to file false tax returns using stolen identities. As alleged, he possessed lists of names, Social Security numbers and dates of birth as well as prepaid debit cards, all for the purpose of obtaining fraudulent tax refunds from the IRS.
An indictment merely alleges that crimes have been committed and the defendant is presumed innocent until proven guilty beyond a reasonable doubt. If convicted, Blackmon faces a maximum potential sentence of 20 years in prison for each of the two wire fraud counts, 10 years for the access device fraud count, 5 years for the misuse of a Social Security number count, and a mandatory 2-year sentence for the aggravated identity theft counts. He is also subject to fines and mandatory restitution if convicted.
This case was investigated by special agents of IRS - Criminal Investigation. Trial Attorneys Justin Gelfand and Jason Poole of the Justice Department’s Tax Division are prosecuting the case.
Additional information about the Tax Division and its enforcement efforts may be found at www.justice.gov/tax .
Tuesday 23 October 2012
President of Costa Rican Company Sentenced to 60 Years in Prison for Half-Billion Dollar Fraud Scheme with Thousands of Victims WorldwideRead the Press Release
WASHINGTON – The president of a Costa Rican company that sold reinsurance bonds to life settlement companies was sentenced today in Richmond, Va., to 60 years in prison for carrying out a half-billion-dollar fraud scheme that affected more than 3,500 victims throughout the United States and abroad, announced U.S. Attorney for the Eastern District of Virginia Neil H. MacBride and Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division.
Minor Vargas Calvo, 61, a citizen and resident of Costa Rica, is the majority owner of Provident Capital Indemnity (PCI) Ltd., an insurance and reinsurance company registered in the Commonwealth of Dominica and doing business in Costa Rica. He was convicted on April 30, 2012, of one count of conspiracy to commit mail and wire fraud, three counts of mail fraud, three counts of wire fraud and three counts of money laundering.
“Mr. Vargas masterminded a criminal reinsurance company that fraudulently claimed to guarantee almost half a billion dollars of life settlement investments sold to thousands of investors worldwide,” said U.S. Attorney MacBride. “Many of these investors lost their life savings because of the worthless guarantees PCI made. Mr. Vargas mistakenly believed that he could avoid punishment for the countless lives he destroyed because he operated his scheme from a non-extradition country. But, this prosecution demonstrates our resolve and ability to pursue justice on behalf of U.S. victims regardless of where the fraudsters may be hiding.”“Mr. Vargas’s reinsurance company was a house of cards, built on a foundation of deception and lies,” said Assistant Attorney General Breuer. “He reaped millions in profit from his scheme to sell nearly $500 million worth of guarantee bonds to more than 3,500 victims, and then spent his spoils on his soccer team and himself. Today’s sentence reflects the determination of our agents and prosecutors to bring sham artists like Mr. Vargas to justice.”
According to court records and evidence at trial, PCI sold financial guarantee bonds to companies selling life settlements, or securities backed by life settlements, to investors. These bonds were marketed to PCI’s clients as a way to alleviate the risk of insured beneficiaries living beyond their life expectancy. PCI’s clients, in turn, typically explained to their investors that the financial guarantee bonds ensured that the investors would receive their expected return on investment irrespective of whether the insured on the underlying life settlement lived beyond his or her life expectancy.
Evidence at trial showed that Vargas and PCI’s purported independent auditor for PCI, Jorge Castillo, 57, of New Jersey, used lies and omissions to mislead PCI’s clients and investors regarding PCI’s ability to pay claims when due on the financial guarantee bonds that PCI issued. Vargas caused Castillo to prepare audited financial statements that falsely claimed that PCI had entered into reinsurance contracts with major reinsurance companies. These false claims, which were supported by a letter from Castillo stating that he conducted an audit of PCI’s financial records, were used to assure PCI’s clients that the reinsurance companies were backstopping the majority of the risk that PCI had insured through its financial guarantee bonds. The fraudulent financial statements PCI distributed also showed significant assets and relatively small liabilities.
From 2004 through 2010, PCI sold at least $485 million of bonds to life settlement investment companies located in various countries, including the United States, the Netherlands, Germany, Canada and elsewhere. PCI’s clients, in turn, sold investment offerings backed by PCI’s bonds to thousands of investors around the world. Purchasers of PCI’s bonds were required to pay up-front payments of six to 11 percent of the underlying settlement as “premium” payments to PCI before the company would issue the bonds.
Evidence at trial showed that Vargas spent more than $23 million of his ill-gotten gains on his professional soccer teams in Costa Rica, his unrelated companies, his family and himself. Due, in part, to these expenditures, when it came time to make good on PCI’s promises to pay bond holders, Vargas resorted to yet more lies to justify PCI’s inability to do so.
Castillo, who was a PCI employee prior to becoming PCI’s “outside auditor,” pleaded guilty on Nov. 21, 2011, to conspiring to commit mail and wire fraud, which carries a maximum penalty of 20 years in prison. Castillo is scheduled to be sentenced on Nov. 30, 2012. In addition, PCI pleaded guilty on April 18, 2012, to conspiring to commit mail and wire fraud. PCI was sentenced on Sept. 6, 2012, to one year of probation.
This investigation is being conducted by the U.S. Postal Inspection Service, Internal Revenue Service-Criminal Investigation and FBI, with assistance from the Virginia State Corporation Commission, the Texas State Securities Board and the New Jersey Bureau of Securities. This case is being prosecuted by Assistant U.S. Attorneys Michael S. Dry and Jessica Aber Brumberg of the Eastern District of Virginia and Assistant Chief Albert B. Stieglitz Jr. of the Criminal Division’s Fraud Section.
The U.S. Securities and Exchange Commission (SEC) conducted a parallel investigation and in January 2011 filed a parallel civil enforcement action against PCI, Vargas and Castillo. The department thanks the SEC for its assistance in this matter.
The investigation has been coordinated by the Virginia Financial and Securities Fraud Task Force, an unprecedented partnership between criminal investigators and civil regulators to investigate and prosecute complex financial fraud cases in the nation and in Virginia specifically. The task force is an investigative arm of the President’s Financial Fraud Enforcement Task Force, an interagency national task force.
President Obama established the Financial Fraud Enforcement Task Force (FFETF) in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.Justice Department Reaches Proposed Agreement with the <br /> <br /> Town of East Haven, Connecticut, to Resolve Allegations of Misconduct by the East Haven Police DepartmentRead the Press Release
The Justice Department today announced that the town of East Haven, Conn., memorialized its intention to enter into a settlement agreement to resolve the department’s civil investigation of allegations that the East Haven Police Department (EHPD) engaged in a pattern or practice of unlawful discrimination against Latinos on account of their race, color or national origin. The proposed agreement also resolves allegations that EHPD engaged in a pattern or practice of use of excessive force, unconstitutional searches and seizures and retaliation against persons who witnessed police misconduct or criticized EHPD’s practices.
Joseph Maturo Jr., the mayor of East Haven, outlined in a letter of intent a schedule to obtain necessary approvals from other town officials to enter into a binding agreement that will lead to broad institutional changes in EHPD’s policies and practices. The proposed agreement builds on reforms initiated by the town and is intended to strengthen the community’s trust in EHPD. Once fully executed by the town, the proposed agreement will be filed with the U.S. District Court for the District of Connecticut for approval.
“We are pleased that Mayor Maturo has made a clear commitment to rebuild the East Haven Police Department by agreeing to enter into a court-enforceable agreement that will result in constitutional and effective policing for all persons who live, work and travel in East Haven,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The proposed agreement will serve as a blueprint for sustainable reform that will provide the police department with the necessary tools and guidance it needs to restore trust from all segments of the East Haven community.”
“There is no place for invidious discrimination by law enforcement officers, and today’s commitment from the mayor signals a new day for the East Haven Police Department,” said David B. Fein, the U.S. Attorney for the District Connecticut. “Once the proposed agreement is in place, the men and women who courageously serve on the police department will get the support they need to carry out their duties in a lawful and respectful manner, while ensuring strong public safety for the people of East Haven.”
The proposed agreement provides for comprehensive reforms in seven core areas and provides for a joint compliance expert who will independently assess EHPD’s implementation of the agreement. The seven core areas are:
- Biased-free policing, including measures on mandatory training, collection and analysis of data on police encounters, development of a meaningful language access plan, notification to consulates when foreign nationals are detained and steps to promote biased-free policing in EHPD’s hiring, promotion and performance assessment processes;
- Use of force, including the development of current policies on use of force and measures that provide for comprehensive training, consistent force reporting and thorough force reviews and investigations by supervisors and the internal affairs officer;
- Searches and seizures, including the development of up-to-date policies and measures on applying for search warrants, documenting consent searches, notifying supervisors of felony arrests and other “contempt-of-cop” situations, inspecting detainees for injuries, and preserving individuals’ First Amendment rights to observe and record police activity;
- Policies and training, including measures to ensure that officers and supervisors have sufficient guidance to carry out their law enforcement responsibilities in a lawful, effective and ethical manner;
- Civilian complaints, internal investigations and discipline, including measures to ensure that all allegations of officer misconduct are received and thoroughly investigated and that officers who engage in misconduct are held accountable by a disciplinary system that is fair and consistent;
- Supervision and management, including steps that provide for close and effective supervision to assist officers in carrying out their duties in lawful manner and systems that allow supervisors to identify, correct and prevent misconduct; and
- Community engagement and oversight, including measures to create robust partnerships with all segments of the East Haven community, disseminate public information on reforms and policing activities, and solicit feedback on the relationship between EHPD and the community.
In September 2009, the Justice Department opened a pattern or practice investigation into allegations that EHPD officers engaged in discriminatory traffic enforcement, use of excessive force, and unconstitutional searches and seizures in violation of the Constitution and federal anti-discrimination laws. In December 2011, the department completed its investigation and issued a letter finding reasonable cause to believe that EHPD engaged in a pattern or practice of unlawful discrimination against Latinos and other misconduct. The investigation was conducted jointly by the Civil Rights Division’s Special Litigation Section and the U.S. Attorney’s Office for the District of Connecticut.
The full text of the 2011 Findings Letter, the Letter of Intent and the proposed settlement agreement are available at www.justice.gov/crt/about/spl/findsettle.php. For more information on the Justice Department’s Civil Rights Division, please visit www.justice.gov/crt.