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Wednesday 10 October 2012
Justice Department Files Fair Housing Lawsuit Against Florida Homeowners Association and Management Company for Discrimination Against Families with ChildrenRead the Press Release
The Justice Department today filed a lawsuit against the homeowners association and former manager of a 249-townhome community in Gibsonton, Fla., for violating the Fair Housing Act by discriminating against families with children.
The lawsuit, filed in the U.S. District Court for the Middle District of Florida, charges that Townhomes of Kings Lake HOA Inc. engaged in a pattern or practice of violating the Fair Housing Act by adopting, maintaining, ratifying, and, along with Vanguard Management Group Inc., enforcing occupancy standards unduly limiting the number of individuals who can reside in the townhomes. The suit also charges that the defendants violated the Fair Housing Act by threatening to evict a couple and their six minor children from the four-bedroom townhome they were renting and by taking other actions to interfere with their tenancy.
“The Fair Housing Act ensures that families with children have an equal right to use and enjoy housing of their choice,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The Justice Department will continue its vigorous enforcement of fair housing laws that protect the rights of families with children.”
The lawsuit arose when the family filed a complaint with the Department of Housing and Urban Development (HUD). After the family had moved into the home, the management company and the homeowners association indicated there was a problem with the number of children living there. The defendants’ occupancy policy allowed only six individuals to occupy the home, which was far more stringent than what Hillsborough County permitted. The homeowners association also adopted similarly restrictive limitations on the number of individuals who could live in two- and three-bedroom townhomes in Kings Lake. After HUD investigated the complaint, it issued a charge of discrimination and the matter was referred to the Justice Department.
“Housing providers may set occupancy standards but those standards cannot be so restrictive that they exclude families who, based on a home’s overall size and configuration, should be able to live there,” said John Trasviña, HUD Assistant Secretary for Fair Housing and Equal Opportunity. “HUD and the Department of Justice are committed to taking action against anyone who unlawfully denies housing to families with children.”
The lawsuit seeks a court order prohibiting future discrimination by the defendants, monetary damages for those harmed by the defendants’ actions, and a civil penalty. Any individuals who have information relevant to this case are urged to contact the Housing and Civil Enforcement Section of the Civil Rights Division at 1-800-896-7743.
The federal Fair Housing Act prohibits discrimination in housing on the basis of race, color, religion, sex, familial status, national origin and disability. More information about the Civil Rights Division and the laws it enforces is available at www.usdoj.gov/crt. Individuals who believe that they have been victims of housing discrimination can call the Housing Discrimination Tip Line at 1-800-896-7743, e-mail the Justice Department at [email protected], or contact HUD at 1-800-669-9777.
The complaint is an allegation of unlawful conduct. The allegations must still be proven in federal court.
Army Sergeant Pleads Guilty to Facilitating Theft of Fuel in AfghanistanRead the Press Release
WASHINGTON – U.S. Army Sergeant Christopher Weaver pleaded guilty today to bribery charges for his role in the theft of fuel at Forward Operating Base (FOB) Fenty, near Jalalabad, Afghanistan, announced Assistant Attorney General for the Justice Department’s Criminal Division Lanny A. Breuer.
Weaver, 29, of Fort Carson, Colo., pleaded guilty before U.S. District Judge Marcia S. Krieger in the District of Colorado to one count of conspiracy to commit bribery and one count of bribery.
Weaver’s plea is the second guilty plea arising from an investigation into fuel thefts at FOB Fenty. On Aug. 3, 2012, Weaver’s co-conspirator Jonathan Hightower, 30, of Houston, pleaded guilty for his role in the scheme.
According to court documents, from approximately January 2010 through June 2010, Weaver and Hightower were involved in overseeing the delivery of fuel from FOB Fenty to other military bases. As part of this process, documents generally described as “transportation movement requests” (TMRs) were created, which authorized the movement of the fuel. Weaver pleaded guilty to participating in a conspiracy in which fraudulent TMRs, which purported to authorize the transport of fuel from FOB Fenty to other military bases, were created even though no legitimate fuel transportation was required. After the trucks were filled with fuel, these fraudulent documents were used by the drivers of the fuel trucks at FOB Fenty’s departure checkpoint in order to justify the trucks’ departures from FOB Fenty. In truth, according to court documents, the fuel was simply stolen.
Weaver pleaded guilty to receiving payments from a representative of a military contractor that was responsible for transporting fuel in Afghanistan in exchange for facilitating the theft of approximately 100 fuel trucks. According to Weaver’s signed plea agreement, the loss to the United States as a result of the scheme was in excess of $1.5 million. According to court documents, Weaver sent cash back from Afghanistan to the United States, in part, by mailing the money inside a stuffed bear.
According to court documents, Hightower worked in Afghanistan as an employee of FLUOR Inc., a U.S. government contractor, from January 2010 to June 2010, where he served as a petroleum supply specialist and was responsible for receiving and disbursing fuel – primarily jet fuel known as JP-8 – for use at FOB Fenty or for transport to other military bases. According to court documents, Hightower, Weaver and others would receive cash from a representative of a military contractor that was responsible for transporting fuel in Afghanistan, and the money would be apportioned among the conspirators.
Hightower pleaded guilty before U.S. District Judge William J. Martinez in the District of Colorado to two counts of conspiracy to receive bribes – one count involving his conspiracy with Weaver, and another count involving his conspiracy with another alleged co-conspirator at FOB Fenty. Hightower admitted facilitating the theft of over 100 trucks of fuel and a loss to the United States in excess of $1.5 million.
The cases are being prosecuted by Assistant U.S. Attorney Mark W. Pletcher of the U.S. Attorney’s Office for the Southern District of California, formerly of the Criminal Division’s Fraud Section, and Special Trial Attorney Mark H. Dubester of the Fraud Section. The cases were investigated by the Special Inspector General for Afghanistan Reconstruction; the Department of the Army, Criminal Investigations Division; the Defense Criminal Investigative Service; the FBI; and the Department of the Air Force, Office of Special Investigations. Valuable assistance was also provided by the Justice Department’s Office of International Affairs.
AVX Corp. to Pay $366 Million in Settlement, Accelerating Cleanup of New Bedford Harbor Contamination in MassachusettsRead the Press Release
The Department of Justice, on behalf of the U.S. Environmental Protection Agency (EPA), along with the Massachusetts Attorney General’s Office, on behalf of the Massachusetts Department of Environmental Protection, have reached a settlement with AVX Corp. for $366.25 million plus interest regarding the New Bedford Harbor Superfund Site, in New Bedford, Mass.
The settlement paves the way for expedited implementation of the cleanup of the New Bedford Harbor Site at full capacity, providing more rapid protection of public health and the environment in addressing polychlorinated biphenyl (PCB) contaminated sediment in the harbor. PCBs are mixtures of up to 209 individual synthetic chlorinated compounds that are chemically stable, attach onto sediment particles readily and are resistant to biodegradation. PCBs are characterized as a probable carcinogen in humans.
The settlement follows an April 18, 2012, enforcement order issued by EPA to AVX to implement the ongoing cleanup work at the Harbor Site.
The “cash-out” settlement will be paid to the United States and the commonwealth jointly, and retained by EPA for use at the Harbor Site. The settlement provides the United States and the commonwealth with funding from AVX Corp. to continue to take action to remediate contamination. This includes dredging PCB-contaminated sediment and disposing the dredged sediment at an appropriately licensed off-site facility, in a confined aquatic disposal cell in the Lower Harbor, and in confined disposal facilities to be built along the shoreline. AVX’s payment resolves its remaining liabilities to pay for the costs of cleanup at the site. If approved by the court, this will be the largest single-site cash settlement in the history of the Superfund program.
“This agreement is the product of our commitment to pursue the government’s legal rights to defray costs borne by the Superfund and U.S. taxpayers in the cleanup of the New Bedford Harbor and to hold polluters ultimately accountable,” said Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division of the Department of Justice. “The recovery of these settlement funds will result in a more rapid reduction of human health and environmental risks and faster restoration of the harbor for the use and benefit of the public.”
“With this settlement, we are making good on our pledge to the citizens of New Bedford to help clean their harbor. Cleanup work will proceed much faster with dedicated funding, and we will more rapidly be able to ensure that both human health and ecological health are being protected from exposure to PCBs in New Bedford Harbor,” said Curt Spalding, the Regional Administrator of EPA’s New England Office. “Further, the settlement is consistent with EPA’s longstanding ‘polluter pays’ principle.”
“This settlement is a victory for the people of the Commonwealth,” said Governor Deval Patrick. “These funds will allow us to expedite the ongoing cleanup efforts at the Harbor Site in order to protect the environment and the public health of our residents.”
“This settlement brings hundreds of millions of dollars to the City of New Bedford to clean up contamination that subjected people to unacceptable health risks and limited economic development,” said Massachusetts Attorney General Martha Coakley. “The AVX Corporation is responsible for the contamination and will pay for the cleanup, not Massachusetts taxpayers. The settlement also significantly accelerates the schedule so the region can feel the economic benefits sooner rather than later.”
“Thanks to this record settlement, those who live and work along the harbor will see a significant reduction in risk to humans and the environment, and people will not have to wait decades to begin to enjoy the harbor’s natural resources,” said Commissioner Kenneth Kimmell of the Massachusetts Department of Environmental Protection. “As the natural resources return to vitality, so will tourism, recreation and redevelopment for harbor-side communities.”
The settlement with AVX will provide the bulk of the estimated funding needed to allow EPA to complete the cleanup remedy for the New Bedford Harbor Superfund Site in approximately five to seven years, in contrast to the estimated 40 or more years it would take to complete the remedy under current funding of $15 million per year from the Superfund and payment of $1.5 million per year by the commonwealth.
From the 1940s to the 1970s, AVX’s corporate predecessor, Aerovox Corp., owned and operated what was known as the Aerovox facility, an electrical capacitor manufacturing facility located on the western shore of New Bedford Harbor. The United States and the commonwealth have determined that Aerovox discharged hazardous substances, including PCBs, into the harbor, and that Aerovox’s facility was the primary source of PCBs released into the harbor.
In 1983, the New Bedford Site was listed on the EPA’s Superfund National Priorities list, and the United States and the commonwealth of Massachusetts filed suit against AVX and other companies for injury to natural resources at the site from releases of PCBs. In 1984, the civil action was amended to include claims on behalf of EPA for recovery of response costs. AVX previously paid $66 million, plus interest, for past and future response costs and natural resource damages at the Harbor Site as a result of a 1992 settlement with the U.S. and the commonwealth. The governments reserved certain rights in that settlement through reopener provisions, which were exercised to bring about this current settlement. In addition, in 2010 AVX entered into a settlement with the U.S. to demolish the Aerovox facility, which was accomplished in 2011, and AVX entered into a separate settlement with the commonwealth to address the remaining contamination at the Aerovox facility.
Under the supplemental consent decree lodged today in federal district court in Boston supplementing and modifying the 1992 consent decree, AVX agrees to pay $366.25 million plus interest to settle its remaining liabilities for cleanup at the harbor site.
The supplemental consent decree will be published in the Federal Register and is subject to a 30-day public comment period and approval by the federal court. A copy of the consent decree will be available on the Justice Department website at www.usdoj.gov/enrd/Consent_Decrees.html .
More information: EPA’s New Bedford Harbor website www.epa.gov/nbh .
Tuesday 9 October 2012
Financial Fraud Enforcement Task Force Members Reveal Results of Distressed Homeowner InitiativeRead the Press Release
PLEASE NOTE: The press release below inadvertently reported inaccurate figures. An extensive review of the reported cases concluded that, contrary to the figures contained in the initial announcement, the initiative resulted in 107 criminal defendants charged in U.S. District Courts across the country. These cases involved more than 17,185 homeowner victims and total losses by those victims estimated by law enforcement at more than $95 million. In federal civil actions involving distressed homeowner victims, the Justice Department’s U.S. Trustee Program, the Federal Trade Commission and the Consumer Financial Protection Bureau (CFPB), protectors of the nation’s bankruptcy laws and federal consumer laws, filed cases against 128 defendants in federal cases across the country, with at least 19,198 victims identified and losses estimated at more than $54 million.
The discrepancy occurred due to the fact that the original figures included in the Distressed Homeowner Initiative materials included not only criminal defendants who had been charged in Fiscal Year 2012, but also a number of defendants who were the subject of other prosecutive actions – such as a conviction or sentencing – in Fiscal Year 2012. In addition, the announcement included a number of defendants who were charged in mortgage fraud cases in which the victim(s) did not fit the narrow definition of “distressed homeowner” that the initiative targeted.
Attorney General Eric Holder, Housing and Urban Development (HUD) Secretary Shaun Donovan, FBI Associate Deputy Director Kevin L. Perkins and Federal Trade Commission (FTC) Chairman Jon Leibowitz today announced the results of the Distressed Homeowner Initiative, the first-ever nationwide effort to target fraud schemes that prey upon suffering homeowners. The yearlong initiative, launched by the FBI, a co-chair of the Financial Fraud Enforcement Task Force’s Mortgage Fraud Working Group, resulted in 107 criminal defendants charged in U.S. District Courts across the country. These cases involved more than 17,185 homeowner victims and total losses by those victims estimated by law enforcement at more than$95 million.
“These comprehensive efforts represent an historic, government-wide commitment to eradicating mortgage fraud and related offenses,” said Attorney General Holder. “The success of the Distressed Homeowner Initiative, and the developments we announce today, underscore our determination to pursue these and other financial fraud criminals around the country.”
From Oct. 1, 2011, to Sept. 30, 2012 (FY 2012), the Distressed Homeowner Initiative focused on fraud targeting homeowners, such as foreclosure rescue schemes that take advantage of homeowners who have fallen behind on their mortgage payments. Typically, the con-artist in such a scheme promises the homeowner that he can prevent foreclosure for a substantial fee by, for example, having so-called investors purchase the mortgage, or transferring title in the home to persons in league with the scammer. In the end, the homeowner can lose everything. Other targets of the Distressed Homeowner Initiative include perpetrators of loan modification schemes who obtained advance fees from homeowners after falsely promises that they would negotiate more favorable mortgage terms on behalf of the homeowners.
“With home price increases helping homeowners get back above water and billions of dollars in new resources for families still at risk through the recent mortgage servicing settlement, borrowers are finally beginning to see the light at the end of the tunnel. We know, however, that too many families are still facing threats to sharing in that recovery,” said HUD Secretary Donovan. “The Financial Fraud Enforcement Task Force has made important progress through its Mortgage Fraud Working Group to crack down on some of the same types of scam artists that got us into this crisis in the first place—pushing predatory or fraudulent loans on families who simply wanted to own a home, and now pushing false hope for modification of those loans— often preying upon the trust families have in HUD and the Federal Housing Administration. With actions like those announced today, we send a very clear message: if you don’t operate ethically, transparently, and within the boundaries of the law, we will not hesitate to act.”
As a part of the Justice Department’s efforts to improve the lives of struggling homeowners, the Financial Fraud Enforcement Task Force’s Victims’ Rights Committee, in partnership with the Certified Financial Planning Board and the Foundation for Financial Planning, will begin offering unprecedented pro-bono financial planning assistance to the victims of a foreclosure rescue scheme, indicted by the U.S. Attorney’s Office for the Central District of California. All 4,000 victims of the scheme, many of whom lost their homes as a result of the fraud, have been invited to attend a free financial planning workshop in Riverside, California. Those who attend the workshop will receive free financial information and education to assist them in recovering from the devastating effects the crime had on their lives and to help them plan for the future. The financial planners at the workshop will be able to answer critical questions relating to tax planning, debt management, foreclosure assistance, job loss, retirement planning, investment advice, insurance, employee benefits and more.
“We recognize the negative impact that mortgage fraud and foreclosures have on our economy and on our communities. We cannot merely investigate after the fact. We must use intelligence and sophisticated techniques to identify and stop those who seek to defraud American homeowners. We will continue to work with our partners across the country to ensure the integrity of the housing market, and to keep our communities safe,” said FBI Associate Deputy Director Perkins.
In federal civil actions involving distressed homeowner victims, the Justice Department’s U.S. Trustee Program, the Federal Trade Commission and the Consumer Financial Protection Bureau (CFPB), protectors of the nation’s bankruptcy laws and federal consumer laws, filed cases against 128 defendants in federal cases across the country, with at least19,198 victims identified and losses estimated at more than $54 million. False or abusive filings in U.S. Bankruptcy Court are commonly used to execute foreclosure rescue scams. State Attorneys General also filed criminal cases against 51defendants, with losses at more than $2 million, and also filed at least 104 civil enforcement actions against 125 defendants with losses to homeowners at approximately $5 million. Last, the Treasury Department’s Office of Financial Stability’s Antifraud Unit and the Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), in order to protect homeowners from fraudulent or confusing websites that misuse the Treasury seal and key TARP housing program names, such as the Home Affordable Modification Program, shut down or forced into compliance more than 900 mortgage rescue websites or web advertisers.
“With many homeowners still struggling to hold onto their homes, the FTC takes a hard line against con artists who are seeking their next victim,” said FTC Chairman Leibowitz.
In order to protect struggling homeowners and increase the number of criminal enforcement actions made as part of this initiative, the members of the Mortgage Fraud Working Group were proactive. The FBI generated new investigations by gathering victim complaint data from FTC databases and other sources, analyzed the data and distributed information of lead value to field offices from coast-to-coast. The FBI, together with HUD Office of Inspector General, also utilized sophisticated undercover operations to facilitate the development of federal distressed homeowner criminal cases. Further, the FBI led a surge consisting of several law enforcement agencies in southern California, where many foreclosure rescue scam operators are located, to develop investigations that could be prosecuted in various federal districts. Many of the investigations initiated as part of the Distressed Homeowner Initiative are ongoing and will result in additional enforcement actions in the near future.
The initiative included federal criminal prosecutions brought by various U.S. Attorneys’ offices and the Department of Justice’s Criminal and Civil Divisions, civil enforcement cases filed by the Department of Justice’s U.S. Trustee Program, FTC and CFPB and criminal and civil cases brought by Attorneys General in over 11 states. Participating federal agencies included the FBI, the Office of Inspector General of the Department of Housing and Urban Development, the Federal Housing Finance Agency’s Office of Inspector General (FHFA-OIG), SIGTARP, Internal Revenue Service-Criminal Investigation, U.S. Postal Inspection Service and the U.S. Secret Service. In addition, the Financial Crimes Enforcement Network, a task force partner, announced today that during the Distressed Homeowner Initiative it collected 4,395 foreclosure rescue Suspicious Activity Reports, a critical tool for law enforcement agencies when conducting investigations. For more on this announcement, please visit: www.FinCEN.Gov .
To learn more about scams targeting homeowners, how protect yourself from scams or how to report fraud if you believe you have been a victim, please visit: www.stopfraud.gov .
For information about the Distressed Homeowner Initiative, including stories about common scams, fraudsters’ sample marketing materials, plus radio and television public service announcements, please visit: www.stopfraud.gov .
The Mortgage Fraud Working Group of President Obama’s interagency Financial Fraud Enforcement Task Force was established to lead an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force, chaired by Attorney General Eric Holder, 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.
For more information about the Financial Fraud Enforcement Task Force, please visit: www.stopfraud.gov .
Related Materials:
Attorney General Eric Holder Speaks at the Distressed Homeowner Initiative Press Conference
StopFraud.gov Mortgage Fraud Resources
PSA featuring Tim DeKay of TV's White Collar
FBI Resources for Distressed Homeowners
Friday 5 October 2012
US Customs and Border Protection Officer and Two Associates Charged with Undertaking Multi-Year Bribery and Alien Smuggling Operation Along the US/Mexico BorderRead the Press Release
WASHINGTON – A U.S. Customs and Border Protection (CBP) Officer, his girlfriend and an associate have been charged in Brownsville, Texas, for engaging in a multi-year bribery and alien smuggling operation along the U.S./Mexico border, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division.
The indictment, which was unsealed today in U.S. District Court in the Southern District of Texas, charges U.S. Customs and Border Protection Officer Juan Carlos Guerrero, 39, of Mission, Texas; Guerrero’s girlfriend, Claudia Flores, 34, of Mission; and Maribel Rivera, 43, of Mission, each with one count of conspiracy to commit bribery, one count of conspiracy to smuggle aliens for financial gain and various substantive counts of bribery and alien smuggling.
In a related case that was unsealed today, Guerrero’s nephew Jose P. Cantu pleaded guilty in U.S. District Court in the Southern District of Texas on July 24, 2012, to conspiracy to commit bribery and alien smuggling, and a separate charge of conspiracy to import marijuana and cocaine.
According to the indictment, between approximately October 2009 and approximately January 2011, Guerrero worked the midnight shift as a CBP Office of Field Operations officer at the Pharr and Anzalduas Ports of Entry near McAllen, Texas. As part of his official duties, Guerrero was responsible for, among other things, handling vehicle inspections of northbound traffic traveling from Mexico to the United States.According to the indictment, between approximately October 2009 and approximately January 2011, Guerrero, his girlfriend Flores and their associates – including Rivera and Guerrero’s nephew Cantu – perpetrated a bribery and alien smuggling operation along the U.S./Mexico border. As part of the unlawful operation, Guerrero, Flores, Cantu and Rivera allegedly agreed to smuggle undocumented aliens (UDAs) from Mexico to the United States, in exchange for bribe payments to Guerrero and Flores. Guerrero and Flores allegedly charged between approximately $1,000 and $3,000 per UDA. According to the indictment, Flores, Cantu, Rivera and others recruited and solicited UDAs in Mexico who were willing to pay to be unlawfully smuggled from Mexico into the United States. To accomplish the unlawful smuggling events, Guerrero and Flores allegedly arranged for drivers, including Cantu, to pick up UDAs in Mexico. Guerrero allegedly facilitated the unlawful operation by permitting the UDAs to pass illegally through his inspection lane, in exchange for the bribe money. In order to conceal their unlawful activities, Guerrero and Flores allegedly arranged for the majority of the illegal crossings to take place at approximately midnight – shortly before the closing of the Pharr Port of Entry.
An indictment is merely a charge and is not evidence of guilt. The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law. A trial date for Guerrero, Rivera and Flores has not been set. Cantu’s sentencing date has not been set.
The case is being prosecuted by Trial Attorneys Edward J. Loya Jr. and J.P. Cooney of the Criminal Division’s Public Integrity Section. The case is being investigated by agents from the FBI’s South Texas Border Corruption Task Force, which includes agents from the FBI, DHS ICE Office of Professional Responsibility, CBP Office of Internal Affairs, DHS Office of Inspector General, DHS CBP U.S. Border Patrol and the Texas Rangers Division.
Member of Philadelphia La Cosa Nostra Pleads Guilty to Racketeering ConspiracyRead the Press Release
WASHINGTON – Louis Fazzini, 45, of Caldwell, N.J., pleaded guilty today to participating in a racketeering conspiracy involving illegal gambling and theft from an employee benefit plan, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney Zane David Memeger of the Eastern District of Pennsylvania and George C. Venizelos, Special Agent in Charge of the FBI’s Philadelphia Division.
At the plea hearing before U.S. District Judge Eduardo C. Robreno of the Eastern District of Pennsylvania, Fazzini pleaded guilty to conspiring to conduct and participate in the affairs of the Philadelphia La Cosa Nostra (LCN) Family through a pattern of racketeering activity. He admitted that, as a made member of the North Jersey crew of the Philadelphia LCN Family, he operated a sports bookmaking business and devised a fraudulent scheme to obtain health benefits through a “no-show” job controlled by the LCN in furtherance of the racketeering conspiracy. As a no-show employee, he performed no work or productive services and still received health benefits.
Fazzini’s sentencing is scheduled for Jan. 17, 2013.
Fazzini was among 14 members and associates of the Philadelphia LCN Family charged with crimes involving racketeering conspiracy, extortion, loan sharking, illegal gambling, witness tampering and theft from an employee benefit plan in a third superseding indictment returned by a federal grand jury in Philadelphia on July 25, 2012. The other defendants charged in the 52-count third superseding indictment included Philadelphia LCN Family Boss Joseph Ligambi, Philadelphia LCN Family Underboss Joseph Massimino, George Borgesi, Martin Angelina, Anthony Staino, Gaeton Lucibello, Damion Canalichio, Louis Barretta, Gary Battaglini, Robert Verrecchia, Eric Esposito, Robert Ranieri and Joseph Licata.
Lucibello pleaded guilty to racketeering conspiracy charges on Aug. 2, 2012, and was sentenced to 51 months in prison. Angelina pleaded guilty to racketeering conspiracy charges on Aug. 8, 2012, and was sentenced to 57 months in prison. Barretta also pleaded guilty to racketeering conspiracy charges on Sep. 5, 2012, and was sentenced to 33 months in prison.
The trial for Ligambi, Massimino, Borgesi, Staino, Canalichio, Battaglini and Licata is scheduled for Oct. 9, 2012. The trial for Verrecchia, Esposito and Ranieri has not yet been scheduled. Ligambi, Massimino, Borgesi, Canalichio and Fazzini are detained while awaiting trial. Staino, Battaglini, Verrecchia, Esposito and Ranieri are free on bond while awaiting trial.
The case is being prosecuted by Trial Attorney John S. Han of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorneys Frank A. Labor III and Suzanne B. Ercole of the Eastern District of Pennsylvania. Valuable prosecutorial assistance was provided by the Pennsylvania Office of the Attorney General.
The case is being investigated by the FBI, the Internal Revenue Service-Criminal Investigation, the Pennsylvania State Police, the New Jersey State Police, the Philadelphia Police Department, the U.S. Department of Labor’s Office of Inspector General Office of Labor Racketeering and Fraud Investigations and the U.S. Department of Labor’s Employee Benefits Security Administration. Additional assistance was provided by the New Jersey Department of Corrections.
Los Angeles Medical Equipment Supplier Sentenced to 30 Months in Prison for Medicare Fraud SchemeRead the Press Release
WASHINGTON – A Los Angeles medical equipment supplier, who submitted almost $1 million in false claims to Medicare for expensive, high-end power wheelchairs, was sentenced today to serve 30 months in prison, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney André Birotte Jr. of the Central District of California; Glenn R. Ferry, Special Agent-in-Charge for the Los Angeles Region of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG); and Timothy Delaney, Acting Assistant Director in Charge of the FBI’s Los Angeles Field Office.
Adejare Ademefun, 57, was sentenced by U.S. District Judge John F. Walter in the Central District of California. In addition to the prison term, Ademefun was sentenced to three years of supervised release and ordered to pay $499,548 in restitution to Medicare.
In February 2010, Ademefun pleaded guilty to health care fraud. As part of his plea, Ademefun admitted that from January 2006 to his arrest in October 2009, he owned and operated Jamef Medical Supply, a fraudulent durable medical equipment (DME) supply company, which he used to submit almost $1 million in false claims to Medicare. Ademefun admitted he paid illicit kickbacks to co-conspirators for medical prescriptions and other documents he needed to defraud Medicare. Ademefun focused his fraudulent billings on power wheelchairs, which were among the most expensive DME that a Medicare provider could bill to Medicare. In fact, Ademefun admitted that approximately 95 percent of all the claims he submitted to Medicare were for power wheelchairs. Ademefun admitted he supplied these power wheelchairs to Medicare beneficiaries who were illegally solicited by patient recruiters or “marketers” for medical equipment they did not want or need.
Ademefun admitted he was deliberately indifferent to the fact that the power wheelchair claims he submitted to Medicare were false even though Ademefun knew there was a high probability that the doctors whose names appeared on the prescriptions he purchased from his co-conspirators did not prescribe the power wheelchairs. Ademefun also knew that only six doctors were supposedly responsible for referring approximately 50 percent of his business, and that approximately 60 percent of his customers lived more than 100 miles from Jamef. Ademefun admitted he submitted approximately $941,028 in false claims to Medicare during the course of the scheme.
On March 24, 2010, Ademefun’s co-conspirator Leonard Nwafor was sentenced to 108 months in prison for his role in the scheme.
The case is being prosecuted by Trial Attorney Jonathan T. Baum of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Kerry O’Neill of the Central District of California. The case is being investigated by the California Department of Justice 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 Central District of California.
Since its inception in March 2007, strike force operations in nine locations have charged more than 1,480 defendants who collectively have billed the Medicare program for more than $4.8 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are 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 Settles Lawsuit Against City of Selma, Texas, for Retaliating Against FirefighterRead the Press Release
The Justice Department announced today that it has entered into a settlement to resolve allegations that the city of Selma, Texas, violated Title VII of the Civil Rights Act of 1964 by engaging in retaliation against a firefighter for filing a complaint against a superior for using ethnic slurs in the workplace.
The department’s complaint alleges that the city discriminated against Adam Sadler, who is employed by the city, by demoting him from lieutenant to firefighter because he filed a complaint regarding the fire chief’s use of ethnic slurs in the workplace. Title VII prohibits an employer from retaliating against an individual for opposing any employment practice that would violate Title VII, for filing a complaint of discrimination, or for assisting in the investigation of such a complaint.
Under the terms of the consent decree, the city will modify its existing Equal Employment Opportunity (EEO) policies and procedures to include, among other things, a specific process by which complaints of discrimination and retaliation will be investigated. The city also will provide live training to all city supervisory employees and all city fire department employees concerning the new EEO policies, including Title VII’s prohibition against discrimination and retaliation. Additionally, the city will pay Sadler, who has since secured employment with another fire department, $28,500 in back pay.
“Title VII protects employees who oppose workplace discrimination from retaliation. A person cannot be demoted from his position simply because he reports the use of discriminatory language in the workplace by a supervisor,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The Department of Justice is committed to enforcing Title VII’s anti-retaliation provisions, which are critical to ensure effective protection from discrimination.”
“We are pleased that the city of Selma has agreed to additional EEO training for its staff,” said Robert L. Pitman, U.S. Attorney for the Western District of Texas. “All public servants must be held to a high standard when it comes to treating one another – as well as the public – with dignity, respect, and equality.”
The San Antonio Field Office of the Equal Employment Opportunity Commission (EEOC) investigated and attempted to resolve Mr. Sadler’s charge of discrimination before referring it to the Department of Justice for litigation. More information about the EEOC is available on its website at www.eeoc.gov.
The enforcement of the Title VII is a top priority of the Justice Department’s Civil Rights Division. Additional information about the Civil Rights Division is available on its website at www.justice.gov/crt.
Arizona State Representative Pleads Guilty,<br /> Admits Taking Bribe to Influence Official DutiesRead the Press Release
WASHINGTON – Arizona State Representative Paul Ben Arredondo pleaded guilty today in Phoenix federal court, admitting that he solicited and took a bribe in exchange for promises of official action both as a city councilmember and a state representative. Arredondo also pleaded guilty to mail fraud, admitting that he defrauded donors to the Ben Arredondo scholarship fund. The guilty plea was announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and Special Agent in Charge James L. Turgal of the FBI’s Phoenix Field Office.
Arredondo pleaded guilty to depriving the citizens of the city of Tempe, Ariz., and the state of Arizona of his honest services as an elected official, and to committing mail fraud. He entered his guilty plea before U.S. Magistrate Judge Lawrence Anderson.
Arredondo, 65, of Tempe, was a Tempe city councilmember for approximately 16 years, until July 2010. In November 2010, Arredondo was elected to the House of Representatives of the Arizona State Legislature.
During his plea, Arredondo admitted that from February 2009 to November 2010, he solicited and accepted things of value, collectively a bribe, from representatives of “Company A,” a fictitious company operated by FBI undercover agents that was purportedly seeking to develop real estate projects in Tempe. Arredondo took the bribe with the intent to be influenced in the performance of his official duties, first as a councilmember and later as an elected member of the Arizona House of Representatives. Arredondo admitted that the things he took included tickets to college and professional sporting events, some of which he caused to be mailed to his home, and tables at charity events with his choice of guests.
In exchange for the bribe, Arredondo agreed to take a number of official actions, including revealing confidential information to Company A – such as the price Tempe would be willing to accept for property and the best way to present a purchase proposal. He also agreed to use his position as a councilmember to influence the decisions of other Tempe officials in ways that were favorable to Company A; to contact various Tempe officials to facilitate and promote the company’s efforts to win support for its real estate project; and, following his election to the Arizona House of Representatives, to assure representatives of Company A that he would continue to support Company A’s project. Arredondo did not disclose that he had received anything of value from representatives of the company during any of his interactions with Tempe officials about Company A.
Arredondo also admitted during his plea that he fraudulently used the Arredondo Scholarship Fund – which he established in 2001 and operated through at least 2011 – to benefit his own relatives without informing donors. In support of the fund, Arredondo solicited and received contributions – in part by telling prospective donors that the Fund would pay for college fees and books for “average” students – and assured donors that fund payments would not go to those “whose parents have saved a college fund” or otherwise qualified for scholarships. Arredondo never told prospective donors that a portion of their donations would be used to make scholarship payments for the benefit of his own family members. Through 2011, Arredondo caused the scholarship fund to pay approximately $49,750 to three different educational institutions in Arizona on behalf of seven of his relatives. In furtherance of his scheme to defraud donors, he caused a letter sent to ASU on behalf of the fund which directed how payments should be allocated, stating: “The students are not the children nor any other direct relatives” of the fund’s administrators.
Arredondo pleaded guilty to one count each of honest services mail fraud and mail fraud. Each charge carries a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the amount gained or lost in the scheme. Sentencing has been scheduled for Jan. 22, 2013.
The case is being prosecuted by Deputy Chief M. Kendall Day and Trial Attorney Monique T. Abrishami of the Criminal Division’s Public Integrity Section, and Assistant U.S. Attorney Frederick A. Battista of the District of Arizona. The case is being investigated by agents from the FBI Phoenix Field Office.
Thursday 4 October 2012
U.S. District Court Orders Community Notice to Corpus Christi, Texas, Residents Who May Be Victims of Environmental Crimes by Citgo RefineryRead the Press Release
WASHINGTON – Persons living around the CITGO refinery in Corpus Christi, Texas, who suffered immediate negative health effects from emissions from two large tanks at the facility that were operated between January 1994 and May 2003 in violation of the federal Clean Air Act, may be crime victims in United States v. CITGO Petroleum Corporation et al.
U.S. District Judge John D. Rainey has ordered the government to make this announcement so that any member of the community at large who believes they may be a crime victim and wishes to participate in the proceeding is made aware of their potential rights. To be able to participate, members of the community must submit by Nov. 4, 2012, (40 days from the order) a victim impact statement consistent with the Sept. 14, 2012, order, which is attached to this release. Under the Crime Victim’s Rights Act, persons who are directly and proximately harmed by the commission of a crime are crime victims and have certain, enumerated rights under the law. In this instance, community members may be considered crime victims based on the immediate negative health effects they suffered from breathing noxious fumes from Tanks 116 and 117 during the 1994 – 2003 time frame.
In June 2007, a jury convicted CITGO Petroleum Corporation and CITGO Refining and Chemicals Company L.P. for illegally operating two massive tanks at their Corpus Christi East Plant Refinery between January 1994 and March 2002. The tanks were the source of emissions including benzene, a known carcinogen, that may have affected persons in the surrounding communities of Hillcrest and Oak Park. Witnesses at the trial testified that emissions from the tanks could be detected in Oak Park and Hillcrest in the form of strong gaseous type odors.
On Sept. 25 and 26, 2007, the U.S. Department of Justice and the U.S. Environmental Protection Agency held community meetings at the Oveale Williams Senior Center in Corpus Christi during which more than 300 persons submitted victim impact statements. The current order is to identify any additional persons who may qualify as crime victims.
For more information, including how to submit a victim impact statement, members of the community who have not filed a victim impact statement may call U.S. Environmental Protection Agency (EPA) Special Agent De’Montra Rainey at (713) 209-4892.
Medicare Fraud Strike Force Charges 91 Individuals for Approximately $430 Million in False BillingRead the Press Release
Medicare Fraud Strike Force operations in seven cities have led to charges against 91 individuals – including doctors, nurses and other licensed medical professionals – for their alleged participation in Medicare fraud schemes involving approximately $429.2 million in false billing, Attorney General Eric Holder and Health and Human Services (HHS) Secretary Kathleen Sebelius announced today.
Attorney General Holder and Secretary Sebelius were joined in the announcement of the nationwide takedown by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, FBI Associate Deputy Director Kevin Perkins, Inspector General Daniel R. Levinson of the HHS Office of Inspector General (HHS-OIG) and Dr. Peter Budetti, Deputy Administrator for Program Integrity of the Centers for Medicare and Medicaid Services (CMS).
“Today’s enforcement actions reveal an alarming and unacceptable trend of individuals attempting to exploit federal health care programs to steal billions in taxpayer dollars for personal gain,” said Attorney General Holder. “Such activities not only siphon precious taxpayer resources, drive up health care costs, and jeopardize the strength of the Medicare program – they also disproportionately victimize the most vulnerable members of society, including elderly, disabled and impoverished Americans.”
“Today’s arrests put criminals on notice that we are cracking down hard on people who want to steal from Medicare,” said HHS Secretary Sebelius. “The health care law gives us new tools to better fight fraud and make Medicare stronger. In addition to the arrests made today, HHS used new authority from the health care law to stop future payments to many of the health care providers suspected of fraud, saving Medicare resources and taxpayer dollars from being lost to fraud in the first place.”
Dozens of charged individuals were arrested or surrendered in the last 24 hours as indictments were unsealed across the country. Together, those indictments charge more than $230 million in home health care fraud; more than $100 million in mental health care fraud and more than $49 million in ambulance transportation fraud; and millions more in other frauds.
HHS also suspended or took other administrative action against 30 health care providers following a data-driven analysis and based upon credible allegations of fraud. Under the Affordable Care Act, HHS is able to suspend payments until the resolution of an investigation.
The joint Department of Justice and HHS Medicare Fraud Strike Force is a multi-agency team of federal, state and local investigators and prosecutors designed to combat Medicare fraud through the use of Medicare data analysis techniques. More than 500 law enforcement agents from the FBI, HHS-OIG, multiple Medicaid Fraud Control Units, and other state and local law enforcement agencies participated in the takedown.
The defendants charged are accused of various health care fraud-related crimes, including conspiracy to commit health care fraud, health care fraud, violations of the anti-kickback statutes and money laundering. The charges are based on a variety of alleged fraud schemes involving various medical treatments and services such as home health care, mental health services, psychotherapy, physical and occupational therapy, durable medical equipment (DME) and ambulance services.
According to court documents, the defendants allegedly participated in schemes to submit claims to Medicare for treatments that were medically unnecessary and oftentimes never provided. In many cases, court documents allege that patient recruiters, Medicare beneficiaries and other co-conspirators were paid cash kickbacks in return for supplying beneficiary information to providers, so that the providers could submit fraudulent billing to Medicare for services that were medically unnecessary or never provided. Collectively, the doctors, nurses, licensed medical professionals, health care company owners and others charged are accused of conspiring to submit a total of approximately $429.2 million in fraudulent billing.
“Today’s coordinated actions represent one of the largest Medicare fraud takedowns in Department of Justice history, as measured by the amount of alleged fraudulent billings,” said Assistant Attorney General Breuer. “We have made it one of the Department’s missions to hold accountable those who abuse the Medicare program for personal profit. And there are Medicare fraudsters in prisons across the country – some who will be there for decades – who can attest to our determination, and our effectiveness.”
“Health care fraud leads to higher health care costs and makes quality care more difficult to obtain,” said FBI Associate Deputy Director Perkins. “Working together to stop fraud, as we did today, will ensure that Americans’ hard-earned dollars are used to care for the sick – not to line the pockets of criminals.”
“Today’s coordinated operation demonstrates that law enforcement is flexible enough to address health care fraud in its many evolving forms,” said HHS Inspector General Levinson. “When home health agencies, durable medical equipment companies, pharmacies, or other health care providers are suspected of breaking the law, they can expect to be caught and held accountable.”
“This is the result of coordinated anti-fraud efforts – including Medicare flagging suspicious activity, efforts between agencies to investigate this criminal activity, and today’s actions by law enforcement and HHS,” said CMS Deputy Administrator for Program Integrity Budetti. “As we stop payments to these providers suspected of fraud, we continue our efforts to move from a pay-and-chase model to one where we stop fraudsters before they can successfully bill Medicare and Medicaid.”
In Miami, a total of 33 defendants are charged for their alleged participation in various fraud schemes involving a total of $204.5 million in false billings for home health care, mental health services, occupational and physical therapy, and DME. In one case, three defendants are charged for participating in a fraud scheme at LTC Professional Consultants and Professional Home Care Solutions Inc. which led to approximately $74 million in fraudulent billing for home health care. In another case, five defendants are charged for participating in a fraud scheme at Hollywood Pavilion which led to $67 million in fraudulent billing for mental health services.
Sixteen individuals, including three doctors and one licensed physical therapist, are charged in Los Angeles with participating in various fraud schemes involving a total of $53.8 million in false billings. In one case, four defendants are charged for allegedly participating in a fraud scheme at Alpha Ambulance Inc., which led to approximately $49.2 million in fraudulent billing for ambulance transportation. The case represents the largest ambulance fraud scheme ever prosecuted by the Medicare Fraud Strike Force. According to court documents, the defendants provided beneficiaries ambulance rides that were medically unnecessary.
In Dallas, 14 individuals – including two doctors and two registered nurses – are charged for their alleged participation in various fraud schemes involving a total of $103.3 million in false billings. In one case, three defendants – a medical doctor and two registered nurses – are charged with participating in a fraud scheme at Raphem Medical Practice and PTM Healthcare Services which led to approximately $100 million in fraudulent billing for home health care services. According to court documents, Dr. Joseph Megwa signed approximately 33,000 prescriptions for more than 2,000 unique Medicare beneficiaries from 2006 to 2011. Many of these Medicare beneficiaries had primary care physicians who never certified home healthcare services for them. In order to handle the volume of prescriptions, Megwa allegedly signed stacks of documents without reviewing them.
Seven individuals are charged in Houston for their participation in a fraud scheme at a hospital which led to $158 million in fraudulent billing for community mental health center services. According to court documents, the defendants who served as administrators at the hospital paid kickbacks – in the form of cigarettes, food and coupons redeemable for items available at the hospital’s “country stores” – to Medicare beneficiaries in exchange for those beneficiaries’ attendance at the hospital’s partial hospitalization programs (PHP). Allegedly, beneficiaries watched television, played games and engaged in other non-PHP activities rather than receiving the services for which the hospital billed Medicare. Previously, on Feb. 22, 2012, the assistant administrator of the hospital, Mohammad Kahn, pleaded guilty to conspiracy to commit health care fraud and paying kickbacks related to $116 million worth of fraudulent claims submitted to Medicare. After his guilty plea, an additional $42 million in fraudulent claims were discovered that are included in today’s totals.
In Brooklyn, 15 individuals, including one doctor and four chiropractors, are charged for their alleged participation in various fraud schemes involving a total of $23.2 million in false billings. In one case, nine defendants, including a medical doctor, are charged with participating in a fraud scheme at Cropsey Medical Care PLLC which led to approximately $13.8 million in fraudulent billing for physical therapy and related services. According to court documents, the defendants paid cash kickbacks to Medicare beneficiaries in exchange for physical therapy that was not medically necessary and on some occasions never provided to beneficiaries.
In Baton Rouge, four defendants, including a licensed practical nurse, are charged for their roles in fraud schemes involving approximately $2.4 million in false claims for medically unnecessary durable medical equipment.
In Chicago, two defendants, including a dermatologist and a psychologist, are charged for their roles in fraud schemes involving, according to court documents, millions of dollars in false claims for medically unnecessary laser treatments and psychotherapy services.
The Medicare Fraud Strike Force operations are part of the Health Care Fraud Prevention & Enforcement Action Team (HEAT), a joint initiative announced in May 2009 between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country.
Since their inception in March 2007, strike force operations in nine locations have charged more than 1,480 defendants who collectively have falsely billed the Medicare program for more than $4.8 billion. In addition, the HHS Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
The cases announced today are being prosecuted and investigated by Medicare Fraud Strike Force teams comprising attorneys from the Fraud Section of the Justice Department’s Criminal Division and from the U.S. Attorneys’ Offices for the Southern District of Florida, the Southern District of Texas, the Northern District of Texas, the Central District of California, the Middle District of Louisiana, the Northern District of Illinois, and the Eastern District of New York, and agents from the FBI, HHS-OIG and state Medicaid Fraud Control Units, with assistance from the Justice Department’s Civil Division and the IRS.The charges and allegations contained in the indictments are merely accusations and the defendants are presumed innocent unless and until proven guilty.
To learn more about HEAT, go to: www.stopmedicarefraud.gov.
Related Materials:
Assistant Attorney General Lanny A. Breuer Speaks at the Health Care Fraud Takedown Press Conference
Attorney General Eric Holder Speaks at the Health Care Fraud Takedown Press ConferenceFederal Court in New York Enters Consent DecreeBetween United States and Fan Club Website CompanyRead the Press Release
The U.S. District Court for the Southern District of New York entered a consent decree between the United States and a company that operates fan club websites for popular recording artists such as Justin Bieber and Selena Gomez, the Justice Department announced today. The government’s complaint, filed in connection with the decree, charges the company with violating both the Federal Trade Commission (FTC) Act and the Children’s Online Privacy Protection Rule. The company has agreed to pay a $1 million penalty to settle these charges.
In a complaint filed on Oct. 2, 2012, the government alleged that Artist Arena LLC, a company based in New York City, violated the Children’s Online Privacy Protection Rule by collecting email addresses, street addresses, birth dates, phone numbers and other information from children under the age of 13 without obtaining parental consent. According to the complaint, some of the company’s fan club websites made no attempt to obtain parental consent, while others made attempts that fell far short of the rule’s requirements. The complaint alleged that in some cases, Artist Arena sent parents emails stating that the company would not collect personal information from children without prior parental consent when in fact it already had done so.
Additionally, the complaint alleges that Artist Arena also violated the FTC Act by making these false and misleading statements in emails to parents. Along with the civil penalty, the defendant agreed to injunctions barring future violations of the FTC Act and the Children’s Online Privacy Protection Rule and also agreed to delete all information previously collected from children under age 13.
The Federal Trade Commission, which oversees the Children’s Online Privacy Protection Rule, referred the case to the Justice Department. The lawsuit, United States v. Artist Arena LLC, was filed in the Southern District of New York.
“As more and more kids get online, the rules established by the Children’s Online Privacy Protection Act play an important role in helping parents to keep their kids safe,” said Stuart Delery, Acting Assistant Attorney General for the Civil Division. “Companies that collect personal information from children must follow the law, and the Justice Department will work with the FTC to ensure that they do.”
Acting Assistant Attorney General Delery thanked the Federal Trade Commission for referring this matter to the Justice Department. The Consumer Protection Branch of the Justice Department’s Civil Division and the U.S. Attorney’s Office for the Southern District of New York brought the case on behalf of the United States.
Customs and Border Protection Officer Sentenced <br /> for Sexual Assault of Women at Miami International AirportRead the Press Release
Paulo Morales, 48, of Miami, was sentenced today by U.S. District Judge Robin S. Rosenbaum to 33 months in prison along with one year supervised release, the Justice Department announced. In July, Morales , a former Customs and Border Protection (CBP) officer, pleaded guilty to three misdemeanor counts of deprivation of rights under color of law.
During the plea proceedings, Morales admitted that on various dates in January 2011, while working as an officer with CBP at the Miami International Airport, he groped the breasts of three separate women without their consent and while they were in the custody of CBP.
“This officer abandoned his commitment to legitimate law enforcement and used his power to abuse women in his custody,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The Justice Department is committed to holding officers who engage in such conduct accountable.”
“ My office and the Department of Justice are fully committed to protecting the civil rights of our citizens from all types of abuses,” said Wifredo A. Ferrar, U.S. Attorney for the Southern District of Florida. “In this case, the harm to the victims and the general public cut deep because it came at the very hands of someone who was sworn to serve and protect the public, and instead breached that trust. ”
This case was investigated by Immigration and Customs Enforcement, Office of Professional Responsibility and CBP Internal Affairs and prosecuted by Assistant U.S. Attorney William White of the U.S. Attorney's Office for the Southern District of Florida and Trial Attorney Henry Leventis of the Civil Rights Division.
Canadian Citizen Pleads Guilty in Scheme to Defraud Consumers Purchasing Pharmaceuticals OnlineRead the Press Release
Andrew Strempler, a Canadian citizen, pleaded guilty today in the Southern District of Florida for his role in a scheme to defraud consumers purchasing pharmaceuticals online, the Justice Department announced. Strempler faces up to five years in prison, a forfeiture of $300,000, a fine and restitution.
Strempler pleaded guilty to conspiracy to commit mail fraud in connection with his role as owner and president of Mediplan Health Consulting Inc., a Canadian company, that also operated under the name RxNorth.com. RxNorth was an Internet, mail and telephone order pharmacy, through which Strempler and others marketed and sold prescription drugs to residents of the United States.
According to court documents, the FDA advised Strempler in a 2001 letter that his prescription drug sales would be illegal in the United States if the drugs were not FDA approved. The FDA letter explained that the FDA approves drugs based on evidence that they are safe and effective, and that the quality of drugs from foreign sources could not be assured.
Strempler and his co-conspirators unlawfully enriched themselves by selling prescription drugs to individuals in the United States, falsely representing that RxNorth was selling safe prescription drugs in compliance with regulations in Canada, the United Kingdom and the United States. The information further alleges that Strempler obtained the prescription drugs from various other source countries without properly ensuring the safety or authenticity of the drugs. In fact, the information alleges that some of the drugs sold by Strempler included counterfeit drugs.
Strempler caused prescription drugs from foreign countries to be shipped to a facility that Strempler operated in the Bahamas. Prescription orders made through RxNorth were then filled at the Bahamas facility, with labels on the vials and drug cartons stating they had been filled by RxNorth in Canada. Strempler then used indirect routes involving multiple countries to ship packages with prescription drugs from the Bahamas to individuals in the United States. The information states that shipments mailed from the Bahamas, containing packages addressed to individuals in the Southern District of Florida, included counterfeit prescription drugs.
“Although many Internet websites appear to offer good deals on pharmaceuticals, consumers can never be certain that drug products ordered online are the same products approved by the FDA as safe and effective,” said Acting Assistant Attorney General Stuart F. Delery. “Today’s guilty plea represents an important step in our continued fight against counterfeit pharmaceuticals—particularly those trafficked over the Internet.”
“Strempler and his co-conspirators sold prescription drugs to customers in the United States falsely representing that the drugs were in compliance with regulations in Canada, the United Kingdom and the United States,” said Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida. “In fact, however, Strempler sold these drugs without properly ensuring the safety or authenticity of the drugs. Indeed, some of the drugs sold by Strempler included counterfeit drugs.”
U.S. District Judge Jose E. Martinez presided over the change of plea hearing.
This case was prosecuted by Assistant U.S. Attorney Ana Maria Martinez of the U.S. Attorney’s Office for the Southern District of Florida, and Roger J. Gural of the Justice Department’s Consumer Protection Branch.
Army National Guard Soldier Pleads Guilty in Connection with <br /> Fraudulent Recruiting Referral Bonus SchemeRead the Press Release
WASHINGTON – An Army National Guard soldier pleaded guilty today in the Western District of Texas for her role in a bribery and fraud scheme that caused approximately $54,000 in losses to the Army National Guard Bureau, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division.
Specialist Stephanie Heller, 37, of Wharton, Texas, pleaded guilty to a two-count criminal information charging her with one count of bribery and one count of conspiracy to commit bribery and wire fraud. The criminal information was filed on Sept. 26, 2012, in U.S. District Court for the Western District of Texas.The case against Heller arises from an investigation involving allegations that former and current military recruiters and U.S. soldiers in the San Antonio and Houston areas engaged in a wide-ranging bribery and fraud scheme to illegally obtain fraudulent recruiting bonuses. To date, the investigation has led to charges against nine individuals, all of whom have pleaded guilty, including Heller.
According to court documents, in approximately September 2005, the National Guard Bureau entered into a contract with Document and Packaging Broker Inc., to administer a recruiting program designed to offer monetary incentives to soldiers of the Army National Guard who referred others to join the Army National Guard. Through this program, a participating soldier could receive up to $2,000 in bonus payments for every person whom the participating soldier referred to join the Army National Guard. Based on certain milestones achieved by the referred soldier, a participating soldier would receive payment through direct deposit into the participating soldier’s designated bank account. To participate in the program, soldiers were required to create online recruiting assistant accounts.
According to court documents, Heller enlisted in the Army National Guard in approximately July 2008. Heller admitted that, between approximately August 2009 and April 2011, she agreed to pay two Army National Guard recruiters for the names and Social Security numbers of at least 28 potential Army National Guard soldiers. Heller further admitted that she used the personal identifying information for these potential soldiers to claim that she was responsible for referring these potential soldiers to join the Army National Guard, when in fact she had not referred them.
As a result of these fraudulent representations, Heller collected at least approximately $44,500 in fraudulent recruiting bonus payments, approximately $21,000 of which she gave to the two Army National Guard recruiters who facilitated the fraudulent scheme.
The charge of bribery carries a maximum penalty of 15 years in prison and a maximum fine of $250,000, or twice the monetary gain or loss. The charge of conspiracy carries a maximum penalty of five years in prison and a maximum fine of $250,000, or twice the pecuniary gain or loss.Heller’s sentencing has been scheduled for March 1, 2013, before Chief U.S. District Judge Fred Biery in San Antonio.
The case is being prosecuted by Trial Attorneys Edward J. Loya Jr., Brian A. Lichter and Sean F. Mulryne of the Criminal Division’s Public Integrity Section. The case is being investigated by agents from the San Antonio Fraud Resident Agency of the Major Procurement Fraud Unit, U.S. Army Criminal Investigation Command.
Wednesday 3 October 2012
Two Men Sentenced to Prison for Participation in Online Conspiracy to Trade Child PornographyRead the Press Release
WASHINGTON – An Oregon man and a Virginia man were sentenced to prison for their role in a conspiracy to advertise, distribute and possess child pornography, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney for the Western District of North Carolina Anne M. Tompkins.
Michael Engelking, 37, of Alexandria, Va., was sentenced today by U.S. District Judge Richard L. Voorhees in the Western District of North Carolina to serve 210 months in prison and lifetime supervised release.
David Large, 50, of Salem, Ore., was sentenced yesterday by Judge Voorhees to serve 70 months in prison and 10 years of supervised release.
Following their release, both Engelking and Large must register as sex offenders.
In November 2010, a grand jury charged six individuals, including Engelking and Large, with conspiracy to advertise, distribute and possess child pornography. Both Engelking and Large pleaded guilty to the charges in July 2011. According to filed court documents and court proceedings, Engelking and Large engaged in a conspiracy with others to share child pornography on Facebook. Court records indicate that both Engelking and Large were members of several Facebook groups dedicated to sharing child pornography and child erotica, including groups called “girls girls girls :)” and “little girls love to play to :)”. These groups contained over 10,000 images of child pornography and child erotica. According to filed documents and statements made in court, Engelking uploaded images of child pornography to the “girls girls girls :)” group. In August 2010, agents with the FBI executed a search warrant at Engelking and Larges’s residences and seized multiple computers and storage media. Hundreds of images of child pornography were located on these items. Court records show that the images on Engelking’s laptop included violent depictions of children being raped and abused.James Byrd, another co-conspirator, was sentenced in August 2012 to serve 87 months in prison. The remaining three co-conspirators are scheduled to be sentenced in December 2012.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse, launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The investigation was conducted by the FBI’s Violent Crimes Against Children Unit headquartered in Maryland. The case was prosecuted by Assistant U.S. Attorney Cortney S. Escaravage of the U.S. Attorney’s Office for the Western District of North Carolina and Trial Attorney LisaMarie Freitas of CEOS.
Latin Kings Member Pleads Guilty in North Carolina for Role in Racketeering EnterpriseRead the Press Release
WASHINGTON – A member of the North Carolina Almighty Latin King and Queen Nation (Latin Kings) pleaded guilty to racketeering-related charges, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U. S. Attorney for the Middle District of North Carolina Ripley Rand.
Wesley Anderson Williams, aka “King Bam,” pleaded guilty on Monday, Oct. 1, 2012, in U.S. District Court in Winston-Salem, N.C. to one count of conspiracy to participate in a racketeering enterprise.
During his plea hearing, Williams admitted to his criminal conduct and membership in the Latin Kings. Specifically, Williams admitted to committing home invasion, burglary, assault, arson and check kiting on behalf of the racketeering enterprise.
Williams faces up to 20 years in prison and a fine of up to $250,000 at sentencing, which has not yet been scheduled.
In February 2012, Williams and 13 others were charged in a superseding indictment returned by a federal grand jury in Greensboro. The superseding indictment alleges the defendants participated in a violent racketeering conspiracy involving Hobbs Act (commercial) robberies, kidnapping, robbery, arson and extortion involving several businesses and individuals in the Greensboro/Winston-Salem area.
Luis Alberto Rosa, aka “King Speechless”; Marcelo Ysrael Perez, aka “King Lyrix”; Charles Lawrence Moore, aka “King Toasty”; Richard Lee Robinson, aka “King Focus”; and Steaphan Acencio-Vasquez, aka “King Leo,” also named in the superseding indictment and identified as members and/or associates of the Latin Kings in North Carolina, have previously pleaded guilty and admitted to their criminal conduct.
The dates for sentencing of these defendants have not been determined.Carlos Coleman, aka “King Spanky”; Jorge Peter Cornell, aka “King J”; Russell Lloyd Kilfoil, aka “King Peaceful”; Randolph Leif Kilfoil, aka “King Paul”; Jason Paul Yates, aka “King Squirrel”; Samuel Isaac Velasquez, aka “King Hype”; Irvin Vasquez, aka “King Dice”; and Ernesto Wilson, aka “King Yayo,” also named in the superseding indictment and identified as alleged members and associates of the Latin Kings in North Carolina, are scheduled for trial on Oct. 15, 2012.
An indictment is merely an allegation and is not evidence of guilt. A defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
The cases are being prosecuted by Trial Attorney Leshia M. Lee-Dixon of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorney Robert A. J. Lang for the Middle District of North Carolina. The matter was investigated by the FBI Charlotte Field Office, Greensboro Resident Agency; Greensboro Police Department; and the Guilford County Sheriff’s Office.
Former New Mexico Corrections Officer Pleads Guilty to Criminal Civil Rights ChargeRead the Press Release
Demetrio Juan Gonzales, 40, a former corrections officer at the Bernalillo County Metropolitan Detention Center (MDC) in Albuquerque, N.M., pleaded guilty today to one count of violating the civil rights of an individual in his custody when he struck and choked the victim in the shower room/dress out area of MDC.
According to court documents, during the early morning hours of Dec. 21, 2011, Gonzales was assigned to the Receiving-Discharge-Transfer (RDT) Unit at MDC where individuals are brought to be booked soon after they are arrested. Gonzales’ job was to photograph and fingerprint those who are brought to RDT for booking. The victim, who had been arrested for Driving While Intoxicated, was verbally uncooperative during the booking process, but was not a physical threat to anyone. Nonetheless, Gonzales became angry at the victim and walked him to the shower room/dress out area where he knew there were no surveillance cameras. Several other corrections officers followed Gonzales to the shower room/dress out area. There, Gonzales physically assaulted the victim, striking him multiple times, and choking him, as evidenced by the marks on the victim’s neck that witnesses observed the next morning. As a result of Gonzales’ actions, the victim started bleeding. Gonzales acknowledged that the victim did not do anything to justify the beating, and as a corrections officer, he is not permitted to assault inmates just because they anger him.
Gonzales is facing a maximum of ten years in federal prison. He remains on conditions of release and under pretrial supervision pending his sentencing hearing, which has yet to be scheduled.
Fellow former MDC corrections officers Kevin Casaus, 23, and Matthew Pendley, 25, were indicted by a federal grand jury in June 2012, and are pending trial on charges related to this assault. Casaus is charged with violating the victim’s civil right rights when he shoved and struck the victim while in the shower area/dress out area. Casaus is further charged with obstruction of justice and falsification of records, first for making false statements to detectives of the Bernalillo County Sheriff’s Office (BCSO) and then for falsifying his incident report. Similarly, Matthew Pendley is also charged with obstruction of justice for making false statements to BCSO detectives, and also for tampering with evidence by cleaning up blood from the shower room/dress out area. Casaus and Pendley are presumed innocent unless proven guilty.
This case is being investigated by the Albuquerque Division of the FBI, and is being prosecuted by Assistant U.S. Attorney Mark T. Baker for the District of New Mexico and Trial Attorney Fara Gold of the Civil Rights Division of the U.S. Department of Justice.
Attorney General Eric Holder and Justice Department Officials Announce More Than $2.4 Million in Grants to Combat Intellectual Property TheftRead the Press Release
Attorney General Eric Holder, Deputy Attorney General James Cole, U.S. Attorney for the District of Maryland Rod Rosenstein, and Bureau of Justice Assistance (BJA) Deputy Director, Kristen Mahoney, today announced more than $2.4 million in grants to 13 jurisdictions to combat the purchase and sale of counterfeit and pirated products. Intellectual Property (IP) theft refers to the violation of criminal laws that protect copyrights, patents, trademarks, other forms of intellectual property and trade secrets, both in the United States and abroad. IP crimes can destroy jobs and suppress innovation in the United States. Faulty products and improperly prepared counterfeit drugs can jeopardize the health and safety of consumers. In some cases, these activities are used to fund dangerous or even violent criminal enterprises and organized crime networks.
“IP theft is not a victimless crime. It can devastate lives and businesses as well as undermine our nation’s financial stability, jeopardize the health of our citizens, and even threaten our national security,” said Attorney General Eric Holder. “That's why the Justice Department is fighting back with these new investments to prevent and combat IP theft by enabling some of our key state and local partners to build on their records of success.”
The Attorney General and Deputy Attorney General made the announcement in Towson, Md., today with Baltimore County Executive Kevin Kamenetz and Baltimore County Police Chief James W. Johnson. Baltimore County will receive $123,971 in grant funds that will support additional training, community outreach efforts and investigative resources to combat intellectual property theft. This grant award will support the Baltimore County Police Department’s efforts to enforce criminal laws protecting foreign and domestic copyrights, patents, trademarks and other forms of intellectual property and trade secrets. U.S. Attorney Ronald C. Machen Jr. for the District of Columbia, U.S. Attorney Neil H. MacBride for the Eastern District of Virginia and Lt. Colonel H.C. Davis of the Virginia State Police also participated in today’s grant announcement.
“Preventing and combating intellectual property crimes constitutes a top priority for our nation’s Department of Justice,” said Deputy Attorney General James M. Cole. “With the grants we announce today, we make good on our firm commitment to work closely with a variety of federal, state, local, and international partners to more effectively fight IP crime, provide direct support to critical law enforcement allies, and strengthen our ability to protect American innovation.”
The grants are provided through the department’s BJA, and will assist 13 jurisdictions in enforcing criminal laws related to IP theft, through improving their ability to enforce, investigate, prosecute and implement prevention initiatives that address IP crimes. The grants include providing reimbursement of expenses incurred in performing criminal enforcement operations, such as overtime payments, storage fees for seized evidence, training and technical assistance.
Other jurisdictions receiving grants today include: Austin, Texas; Central Point, Ore.; Cook County, Ill.; Orlando, Fla.; Riverside County, Calif.; Los Angeles City Attorney’s Office; New York County District Attorney’s Office; Sacramento County, Calif.; San Antonio; the California Department of Justice; St. Louis Metropolitan Police Department; and the Virginia State Police.
The Justice Department, through the Deputy Attorney General’s IP Task Force, has made preventing IP theft a top priority. In the past three years, the department’s Bureau of Justice Assistance has awarded $10,108,800 in grants to 34 law enforcement agencies to tackle the problem. BJA has awarded a total of $13,383,002 in grants to fight IP theft.
The Justice Department is also working with the National White Collar Crime Center and the National Association of Attorneys General to provide training and technical assistance to law enforcement on the topic of IP crime investigation. In addition, the department has partnered with the National Crime Prevention Council to educate American consumers about the dangers of purchasing and using counterfeit goods. For more information on the NCPC’s efforts on this issue, please visit: www.ncpc.org/topics/intellectual-property-theft.
For more information on the jurisdictions receiving grants, please visit: www.ojp.gov/funding/funding.htm.
For more information on the department’s Bureau of Justice Assistance, please visit: www.bja.gov.
For more information on the Justice Department’s continuing efforts to stop IP theft, please visit: www.justice.gov/dag/iptaskforce.
Related Materials:
Photo Gallery from the Announcement
Attorney General Eric Holder Speaks at the Intellectual Property Law Enforcement Grant Award Event
Deputy Attorney General James M. Cole Speaks at the Intellectual Property Law Enforcement Grant Award Event
Tuesday 2 October 2012
Residential Mortgage-Backed Securities Working Group Members Announce First Legal ActionRead the Press Release
The Residential Mortgage Backed Securities (RMBS) Working Group members today announced their first legal action since the working group formation earlier this year. In his role as a co-chair of the RMBS Working Group, New York Attorney General Eric T. Schneiderman has filed a Martin Act lawsuit against J.P. Morgan Securities LLC (formerly known as Bear Stearns & Co. Inc.), JP Morgan Chase Bank N.A., and EMC Mortgage LLC (formerly known as EMC Mortgage Corporation) for making fraudulent misrepresentations and omissions to promote the sale of residential mortgage-backed securities (RMBS) to investors. According to Attorney General Schneiderman’s lawsuit, these defendants deceived investors as to the care with which they evaluated the quality of mortgage loans packaged into residential mortgage-backed securities prior to Bear Stearns & Co’s collapse in early 2008, incurring losses that have totaled approximately $22.5 billion to date
This lawsuit is the first legal action from the RMBS Working Group, a state-federal task force created by President Obama earlier this year to investigate those responsible for misconduct contributing to the financial crisis through the pooling and sale of residential mortgage-backed securities. New York Attorney General Schneiderman was joined in the announcement by RMBS Working Group Co-Chairs: U.S. Attorney for the District of Colorado John Walsh, Assistant Attorney General for the Criminal Division Lanny Breuer, Acting Assistant Attorney General for the Civil Division Stuart Delery and Director of the U.S. Securities and Exchange Commissions’ (SEC) Enforcement Division Robert Khuzami as well as RMBS Working Group Members Acting Associate Attorney General Tony West, Housing and Urban Development (HUD) Secretary Shaun Donovan and Federal Housing Finance Agency (FHFA) Inspector General Steve Linick.
“This lawsuit will bring accountability for the misconduct that led to the crash of the housing market and the collapse of the American economy,” said Attorney General Schneiderman. “Our lawsuit demonstrates that there is one set of rules for all – no matter how big or powerful the institution may be – and that those rules will be enforced vigorously. We believe that this is a workable template for future actions against issuers of residential mortgage-backed securities that defrauded investors and cost millions of Americans their homes. We need real accountability for the illegal and deceptive conduct in the creation of the housing bubble in order to bring justice for New York’s homeowners and investors.”
RMBS Working Group members contributed significantly to this effort. The Federal Housing Finance Agency Inspector General played a key role, providing investigators and lawyers who reviewed countless documents and interviewed many witnesses. the SEC made crucial contributions, both in sharing its expertise with working group members and in giving members access to substantial evidence in its investigations.
The Department of Justice provided 11 Assistant U.S. Attorneys from offices all over the United States who interviewed more than 40 significant market participants. Three civil attorneys and a financial analyst from the department’s Civil Division, two financial analysts from the RMBS Working Group’s Coordination Team, and a paralegal from the U.S. Attorney’s office in the Eastern District of Texas reviewed more than 50 deposition transcripts taken in other litigation for significant evidence. In addition, the Department of Justice provided 12 investigative analysts to review millions of pages of documents and the department’s Civil Division conducted additional interviews of critical witnesses in support of New York’s investigation.
“This announcement demonstrates that the RMBS Working Group model works,” said RMBS Co-Chair and U.S. Attorney for the District of Colorado John Walsh. “The Department of Justice, including U.S. Attorney's Offices across the country, the Office of the Inspector General for the Federal Housing Finance Agency and the SEC were proud to offer their extensive expertise and commit substantial resources in order to assist the New York Attorney General’s efforts. This filing is a testament to the unity of purpose brought to bear by the RMBS Working Group and what is possible when we work together to achieve justice for all Americans.”
“Fannie Mae and Freddie Mac purchased residential mortgage-backed securities from the defendants and were allegedly misled about the quality of the loans supporting those securities. Actions like this contributed to the financial crisis and those who engaged in such activities should be held accountable,” said FHFA Inspector General Steve Linick. “My office has worked and continues to work very closely with the RMBS Working Group and the New York Attorney General’s Office in support of the investigation and prosecution of RMBS fraud cases.”
The RMBS Working Group is one of eight working groups within 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. The FFETF is chaired by U.S. Attorney General Eric Holder and with its 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.More than 200 RMBS Working Group members are on the job, devoting significant resources to investigate and prosecute misconduct by financial institutions in the origination and securitization of mortgages. Work is being done right now by state and federal working group members across the country on active investigations. The RMBS Working Group Coordinator is Matt Stegman. For more information about the RMBS Working Group and the Financial Fraud Enforcement Task Force, please visit: www.stopfraud.gov .
Related Materials:
Press Release from the Office of New York Attorney General Schneiderman
Complaint (PDF)
Photo Gallery
Acting Associate Attorney General Tony West Speaks at the Residential Mortgage-Backed Securities Working Group Press Conference
U.S. Attorney for the District of Colorado John Walsh Speaks at the Residential Mortgage-Backed Securities Working Group Press ConferenceJustice Department Obtains Comprehensive Agreement to Resolve Racial Harassment in Ohio School DistrictRead the Press Release
The Justice Department announced that it has entered into a settlement agreement with the Northeastern Local School District in Springfield and South Vienna, Ohio, to resolve allegations of racial harassment of African-American students in the district. The district serves approximately 3,700 students, less than two percent of whom are African-American.
In December 2011, the department received a complaint alleging incidents of racial harassment directed at an African-American student enrolled at Kenton Ridge High School (KRHS) in the district. The department’s investigation revealed that the student had been subjected to significant harassment based on race and retaliation for reporting the harassment. Despite having knowledge of this harassment, the district failed to investigate the alleged harassment adequately, address it effectively and prevent it from recurring. Because of the alleged harassment and retaliation, the student reported being afraid to go to school and eventually left the district out of fear for the student’s own safety. The department’s investigation also revealed that other African-American students in the district had experienced racial harassment and retaliation for reporting racial harassment.
“No student should endure the racial harassment that students in this district have experienced,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “It is a violation of our nation’s civil rights laws for students to be subjected to severe or pervasive harassment on a prohibited basis. I commend the Northeastern Local School District for working collaboratively with the department and for taking the steps necessary to serve all of its students in a safe environment free of discrimination and harassment.”
Under the agreement, the district will adopt a comprehensive strategy to address and prevent racial harassment in district schools consistent with its obligations under Title IV of the Civil Rights Act of 1964, which prohibits discrimination on the basis of race in public schools. Among other things, the district will revise its policies and procedures related to racial harassment; hire a consultant to develop training for students, parents and employees within the district; and retain a mental health consultant to evaluate and improve the district’s practices in assisting students who are targets of harassment.
The enforcement of Title IV is a top priority of the Justice Department’s Civil Rights Division. Additional information about the Civil Rights Division is available on its website at www.justice.gov/crt.
Idaho Woman Pleads Guilty to Conspiracy and Filing False Tax ReturnsRead the Press Release
Penny Jones of Rigby, Idaho, pleaded guilty before U.S. District Judge William Dimitrouleas in Fort Lauderdale, Fla., to forty-one counts of causing the filing of false claims for income tax refunds and one count of conspiracy to file false claims for tax refunds income tax returns, the Justice Department and the Internal Revenue Service (IRS) announced. Jones entered her guilty plea without the benefit of a plea agreement with the government. Jones faces a maximum potential sentence of 215 years in prison and a fine of up to $10.5 million plus restitution to the IRS.
Jones’s co-defendant, John Michael Smith Jr., also pleaded guilty yesterday before U.S. District Judge William P. Dimitrouleas in Fort Lauderdale to one count of filing a false claim for a tax refund. Smith faces a maximum potential sentence of 5 years in prison and a $250,000 fine plus restitution to the IRS .
According to the indictment, which was returned Nov. 10, 2011, and which Ms. Jones does not contest, she was part of a false tax refund scheme that was national in scope, causing the filing of tax returns for at least 180 clients from 30 different states, requesting more than $120 million worth of fraudulent tax refunds. Clients of the scheme collectively filed more than 380 tax returns, mostly from tax year 2008 but also for other tax years, falsely reporting the amount of their personal debt obligations as both income and as federal tax withholding. They falsely reported this information on IRS Forms 1099-OID, which were filed by Jones based on information provided by the clients. Jones operated her tax return preparation business under the names PMDD Services LLC and Forever Grace LLC.
Smith, a resident of Hidden Hills, Calif., and a former resident of Cincinnati, has admitted that he filed a false 2007 individual income tax return prepared by Jones. He sought a fraudulent tax refund of $208,312, which the IRS mistakenly paid. Previously, another PMDD Services client, Philip Butcher, formerly of Rogers, Ark., pleaded guilty to one count of filing a false claim for a refund. According to court documents in that case, Butcher filed two tax returns reporting his loans as OID income and tax withholding, claiming tax refunds totaling $1,456,696.
The case was investigated by special agents of IRS-Criminal Investigation and is being prosecuted by Trial Attorneys Jonathan Marx and Jed Silversmith of the Justice Department's Tax Division and by Assistant U.S. Attorney Bertha Mitrani of the Southern District of Florida.
Federal and Tribal Officials Mark Domestic Violence Awareness Month at Annual Violence Against Women Tribal Consultation in OklahomaRead the Press Release
Federal and tribal officials joined together in Tulsa, Okla., today in commemorating October as Domestic Violence Awareness Month at opening ceremonies before the department’s annual tribal consultation on Violence Against Native Women, held this year in Tulsa.
Acting Director of the Office on Violence Against Women (OVW) Bea Hanson joined the U.S. Attorney for the Northern District of Oklahoma Danny C. Williams Sr., and more than 200 tribal leaders, public safety and health officials to reaffirm a shared commitment to reduce and end violence against American Indian and Alaska Native women, which has reached epidemic proportions.
Participants viewed a new training DVD entitled “Using Federal Law to Prosecute Domestic Violence Crimes in Indian County”. The new training video, funded through a grant from the Justice Department’s Office on Victims of Crime and developed by the Office on Legal Education and the National Indian Country Training Program, is designed to highlight all tools available to federal and tribal law enforcement, prosecutors, and victim specialists to address domestic violence crimes.
The training DVD is now publicly available for those with a specific training or public education purpose. The DVD can be obtained by contacting the National Indian Country Training Coordinator Leslie Hagen at [email protected] .
“In this video, we hear incredible stories of suffering and survival from victims, and we explore the tools that law enforcement can use to keep victims safe and hold domestic violence perpetrators fully accountable under federal law,” said OVW Acting Director Hanson. “As we mark October as domestic violence awareness month, we re-commit ourselves to using every available tool we can to work in partnership with tribal governments to address the deplorable rates of violence against women in Indian country. We ask for all of your help to make the approaches detailed in this video as widely known and utilized as possible.”
The video uses case studies and play by play accounts from tribal police, federal prosecutors, judges, victims, and victim specialists, to show a comprehensive approach to obtaining justice for victims, including the use of relatively new federal laws. One of these laws is the Domestic Assault by an Habitual Offender (18 USC, Section 117), which punishes any person who commits a domestic assault and has two prior federal, state, or tribal convictions with up to five years in federal prison. The law was created with the Violence Against Women Act reauthorization in 2005. It was used to convict and sentence Roman Cavanaugh, a Fort Totten, N.D., man who had several previous convictions in tribal court for domestic violence. Cavanaugh was sentenced by a federal judge on Sep. 17, 2012, to five years in prison as a habitual domestic violence offender.
The video also explores several other federal statutes, and also includes discussion of changes ushered in by the passage of the Tribal Law and Order Act of 2010, which has made it possible for tribal courts to sentence a person to up to three years for a single offense provided certain due process protections are in place.
Domestic Violence Awareness Month is a time to reflect on tremendous achievements made since the passage of the Violence Against Women Act (VAWA) 18 years ago, while reminding ourselves that much is still to be done to ensure that our children and grandchildren grow up in an America free of domestic violence.
Bureau of Justice Statistics and FBI data show that, between the time VAWA was first enacted in 1994 and 2010, the annual incidence of domestic violence has dropped by 67 percent nationwide. Between 1993 and 2007, the number of individuals killed by an intimate partner declined 35 percent for women and 46 percent for men.
Rates of domestic violence against Native women in Indian country are now among the highest in the entire United States. Half of all Native American women -- 46 percent -- have experienced rape, physical violence, or stalking by an intimate partner, according to a recent nationwide survey by the Centers for Disease Control and Prevention.
Related Materials:
www.justice.gov/tribal
Abbott Laboratories Sentenced for Misbranding DrugRead the Press Release
Pharmaceutical manufacturer Abbott Laboratories Inc. was sentenced by U.S. District Court Judge Samuel G. Wilson of the Western District of Virginia in connection with its guilty plea related to its unlawful promotion of the prescription drug Depakote for uses not approved as safe and effective by the Food and Drug Administration (FDA) the Justice Department announced today. Abbott, which was ordered to pay a criminal fine in the amount of $500 million, plus a forfeiture of $198.5 million, and $1.5 million to the Virginia Medicaid Fraud Control Unit, will also be subject to a five-year term of probation.
In May 2012, Abbott pleaded guilty to a criminal misdemeanor for misbranding Depakote in violation of the Federal Food, Drug and Cosmetic Act (FDCA). Abbott’s criminal plea related to the misbranding of Depakote by promoting the drug to control behavioral disturbances in dementia patients and to treat schizophrenia when neither of these uses was approved by the FDA. Under the provisions of the FDCA, a company is required to specify the intended uses of a product in its new drug application to FDA. Once approved, the drug may not be marketed or promoted for “off-label” uses – unless the company applies to the FDA for approval of the additional use. In an agreed statement of facts, Abbott admitted that from January 1998 to December 2006 it marketed Depakote off-label to treat behavioral disturbances in dementia patients, and from January 2002 to December 2006, Abbott marketed Depakote off-label to treat schizophrenia.
Under the terms of the plea agreement, Abbott agreed to pay the second-largest criminal fine for a single drug, executed a fulsome statement of facts (with exhibits) revealing the extent of its unlawful conduct, admitted that it engaged in misleading statements, and submitted to a five-year term of probation. Under the terms of its probation, on an annual basis, Abbott’s CEO and board of directors will need to personally certify that the company is complying with the law.
Abbott’s guilty plea was part of a global resolution involving its illegal promotional activity. Abbott also entered into a civil settlement agreement under which it agreed to pay $800 million to the federal government and the states to resolve claims that its unlawful marketing and illegal remuneration practices caused false claims to be submitted to government healthcare programs. The parallel civil settlement covered a broader range of conduct by Abbott. The settlement resolved allegations that in addition to off-label marketing for dementia and schizophrenia, Abbott also marketed Depakote for other psychiatric conditions in adults, including depression, anxiety, obsessive-compulsive disorder, post-traumatic stress disorder, alcohol and drug withdrawal and psychiatric conditions in children, including conduct disorders, attention deficit disorder and autism.
In addition to the criminal and civil resolutions, Abbott also agreed to enter into an expansive 5-year corporate integrity agreement with the Office of Inspector General of the Department of Health and Human Services (HHS-OIG) that requires enhanced accountability, increased transparency, and wide-ranging monitoring activities conducted by both internal and independent external reviewers.
“Today’s sentencing confirms that the resolution we reached with Abbott in May is the right result. And it emphasizes the importance of the U.S. government’s coordinated efforts to combat health care fraud. We expect companies to make honest, lawful claims about the drugs they sell, we will be vigorous in our enforcement efforts when they break the law, and the courts will hold them accountable.” said Stuart F. Delery, Acting Assistant Attorney General for the Justice Department’s Civil Division.
“Abbott unlawfully targeted a vulnerable population, the elderly, through its off-label promotion. The court’s sentence makes clear that those who engage in such conduct will be prosecuted and held accountable,” said Timothy Heaphy, U.S. Attorney for the Western District of Virginia.
This case was handled by the U.S. Attorney’s Office for the Western District of Virginia and the Justice Department’s Civil Division. The investigation was conducted by the Virginia Attorney General’s Medicaid Fraud Control Unit; the Internal Revenue Service - Criminal Investigation; the FDA - Office of Criminal Investigation; the Defense Criminal Investigative Service; the Health and Human Services - Office of Inspector General; the West Virginia State Police; the Office of Personnel Management - Office of Inspector General; the Department of Veterans’ Affairs Office of Inspector General; the Department of Labor - Office of Inspector General; and TRICARE Program Integrity.
Monday 1 October 2012
Two Miami-Area Doctors Sentenced to 10 Years in Prison <br /> for Participating in $205 Million Medicare Fraud SchemeRead the Press Release
WASHINGTON – Miami-area residents Dr. Mark Willner and Dr. Alberto Ayala, former medical directors at the mental health care company American Therapeutic Corporation (ATC), were each sentenced today to 10 years in prison for participating in a $205 million Medicare fraud scheme, 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; Special Agent-in-Charge Michael B. Steinbach of the FBI’s Miami Field Office; and Special Agent-in-Charge Christopher Dennis of the HHS Office of Inspector General (HHS-OIG), Office of Investigations Miami office.
Willner, 56, and Ayala, 68, were sentenced by U.S. District Judge Patricia A. Seitz in the Southern District of Florida. Judge Seitz ordered Willner to pay more than $57 million in restitution and Ayala to pay more than $87 million in restitution, both jointly and severally with their co-defendants. Willner and Ayala were also both sentenced to three years of supervised release following their prison terms.
On June 1, 2012, after a seven week trial, a federal jury in the Southern District of Florida found Willner and Ayala each guilty of one count of conspiracy to commit health care fraud.
Evidence at trial demonstrated that the defendants and their co-conspirators caused the submission of false and fraudulent claims to Medicare through ATC, a Florida corporation headquartered in Miami that operated purported partial hospitalization programs (PHPs) in seven different locations throughout South Florida and Orlando. A PHP is a form of intensive treatment for severe mental illness. The defendants and their co-conspirators also used a related company, American Sleep Institute (ASI), to submit fraudulent Medicare claims.
Evidence at trial revealed that ATC secured patients by paying kickbacks to assisted living facility owners and halfway house owners who would then steer patients to ATC. These patients attended ATC, where they were ineligible for the treatment ATC billed to Medicare and where they did not receive the treatment that was billed to Medicare. After Medicare paid the claims, some of the co-conspirators then laundered the Medicare money in order to create cash to pay the patient kickbacks.
The defendants were charged in an indictment returned on Feb. 8, 2011. ATC, the management company associated with ATC, and 20 individuals, including the ATC owners, have all previously pleaded guilty or have been convicted at trial.
Evidence at trial revealed that doctors at ATC, including Willner and Ayala, signed patient files without reading them or seeing the patients. Evidence further revealed that ATC then billed Medicare for more than $100 million in PHP treatment for these patients under the names of Willner and Ayala. Included in these false and fraudulent submissions to Medicare were claims for patients in neuro-vegetative states, along with patients who were in the late stages of diseases causing permanent cognitive memory loss, and patients who had substance abuse issues and were living in halfway houses. These patients were ineligible for PHP treatment, and because they were forced by their assisted living facility owners and halfway house owners to attend ATC, they were not receiving treatment for the diseases they actually had.
Willner and Ayala have been in federal custody since their convictions.
ATC executives Lawrence Duran, Marianella Valera, Judith Negron and Margarita Acevedo were sentenced to 50 years, 35 years, 35 years and 91 months in prison, respectively, for their roles in the fraud scheme. The 50- and 35-year sentences represent the longest sentences for health care fraud ordered to date. Acevedo, who pleaded guilty early on and has been cooperating with the government since November 2010, testified at the doctors’ trial.
ATC and Medlink pleaded guilty in May 2011 to conspiracy to commit health care fraud. ATC also pleaded guilty to conspiracy to defraud the United States and to pay and receive illegal health care kickbacks. On Sept. 16, 2011, the two corporations were sentenced to five years of probation per count and ordered to pay restitution of $87 million. Both corporations have been defunct since their owners were arrested in October 2010.
The case was prosecuted by Trial Attorneys Jennifer L. Saulino, Robert A. Zink and James V. Hayes 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 1,330 defendants who have collectively billed the Medicare program for more than $4 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.
Three Men and One Company Sentenced in Tennessee for Environmental CrimesRead the Press Release
Three men who conspired to violate Clean Air Act workplace safety standards when they demolished a Chattanooga, Tenn., factory containing large amounts of asbestos were sentenced today in federal court, announced Ignacia S. Moreno, Assistant Attorney General for the Justice Department’s Environment and Natural Resource Division, and William C. Killian, U.S. Attorney for the Eastern District of Tennessee. U.S. District Judge Curtis Collier sentenced David Wood, James Mathis and Donald Fillers, and the Watkins Street Project LLC for their roles in the conspiracy.
Fillers was sentenced to serve 48 months in federal prison, pay a $20,000 fine and serve three years of supervised release; Mathis was sentenced to serve 18 months in federal prison and three years of supervised release; Wood was sentenced to serve 20 months in federal prison and three years of supervised release; and Watkins Street Project was ordered to pay a $30,000 fine. In addition, the defendants were ordered to pay $27,899 in restitution to the U.S. Environmental Protection Agency (EPA), the Chattanooga Department of Public Works and the Chattanooga Hamilton County Air Pollution Control Board for expenditures associated with the emergency response and clean-up of the former Standard Coosa Thatcher plant in Chattanooga.
A jury convicted these defendants on Jan. 27, 2012, of conspiracy and criminal violations of the Clean Air Act, as well as obstruction of justice in relation to salvage and demolition activities at the former Standard Coosa Thatcher plant. More specifically, the evidence proved that the defendants entered into a year-long scheme in which the plant was illegally demolished while still containing extensive amounts of asbestos. Additionally, the defendants hired day laborers and paid them low wages to improperly remove asbestos-containing materials without following federal regulations that were intended to keep the asbestos, a known carcinogen, from becoming airborne where it could be inhaled.“These sentences send a strong message that criminal violations of environmental laws designed to protect human health from exposure to hazardous substances, such as asbestos, will not be tolerated,” said U.S. Attorney Killian. “Those individuals who choose to place profit over compliance with our nation’s environmental laws will be vigorously prosecuted and brought to justice.”
“Exposure to asbestos can cause serious, even fatal, illnesses so it must be removed safely and in accordance with the law,” said Maureen O’Mara, Special Agent in Charge of EPA’s criminal enforcement program in Tennessee. “The defendants in this case not only lied to authorities and tried to cover up their actions, but they also hired homeless and untrained workers to perform the illegal asbestos removal activities, endangering both the employees and the greater community. Today’s sentences show that those who break the law and put the public at risk to make illegal profits will face serious consequences.”
Witness testimony established that dust from the salvage and demolition activities frequently wafted onto neighboring properties. The evidence also showed the defendants attempted to cover up their illegal activities by falsifying documents and Wood lied to federal authorities investigating the case.
This case was investigated by Special Agents of the EPA’s Criminal Investigation Division and investigators with Chattanooga-Hamilton County Air Pollution Control Bureau. The case was prosecuted by Assistant U.S. Attorney Matthew T. Morris and Todd W. Gleason, Trial Attorney with the Environmental Crimes Section of the Justice Department’s Environment and Natural Resources Division.Settlement with Suiza Dairy Corporation for Violations at Facilities in Puerto Rico Will Make Facilities Safer, Benefit Nearby CommunitiesRead the Press Release
WASHINGTON – Suiza Dairy has agreed to pay a penalty and make significant upgrades to settle Clean Air Act violations, the Department of Justice and the U.S. Environmental Protection Agency (EPA) announced today. The case stems from violations at two Suiza Dairy Corporation dairies located in Rio Piedras and Aguadilla, Puerto Rico, including two major releases of anhydrous ammonia from the Rio Piedras facility.
The Clean Air Act violations stem from Suiza’s failure of its general duty of care to identify hazards and to maintain safe facilities and its failure to comply with regulatory requirements for process safety management under the Clean Air Act, as well as Suiza’s failure to comply with administrative orders at both facilities.
“This settlement penalizes Suiza for violations of the Clean Air Act that resulted in two illegal releases of poisonous gas that put the community at risk, including one release that caused the hospitalization of several residents,” said Ignacia S. Moreno, Assistant Attorney General of the Environment and Natural Resources Division at the Department of Justice. “Today’s agreement will prevent future violations of the Clean Air Act safety standards by requiring Suiza to upgrade its refrigeration technology and emergency notification system.”
“Reducing toxics in the air is a priority for the EPA. These facilities were very poorly run and the communities around them suffered as a result, with some people being sickened by a major release of ammonia into the air,” said Judith A. Enck, EPA Regional Administrator. “This settlement requires the company to comply with the law and not jeopardize people’s health.”
As part of the consent decree announced today, Suiza will pay a penalty of $275,000. Suiza will also spend approximately $3.75 million on projects that will significantly improve the refrigeration systems at both facilities, considerably reduce the amount of anhydrous ammonia in the systems at both facilities, improve alarm and ammonia release notification procedures, and provide medical training and/or equipment to medical personnel to treat persons affected by exposure to anhydrous ammonia. Suiza will also conduct community emergency drills in the communities located adjacent to the facilities, to train community members on what to do in the event of an accidental release of anhydrous ammonia.
Suiza’s first accidental ammonia release from the Rio Piedras facility was in July 2005. Then in May 2007, approximately 1,146 pounds of anhydrous ammonia was released into the atmosphere causing at least 14 residents from the community located near the Rio Piedras Facility to require medical attention. At least nine of the people requiring medical attention also required an overnight stay in the local hospital.
Following these releases, and complaints from residents near the Aguadilla facility, EPA submitted information requests to Suiza and conducted multiple inspections at both facilities. In September 2007, EPA issued Suiza administrative orders for both facilities, ordering Suiza to bring the facilities into compliance. Suiza failed to comply with both orders.
As a result of Suiza’s failure to comply with the orders and the substantive violations at both facilities, EPA reinspected both facilities in May and October 2009. Over 40 violations were identified at each facility; violations included, for example: corrosion to anhydrous ammonia transfer lines, failure to implement an adequate alarm system, improper labeling of valves and equipment, and improper ventilation.
The settlement requires Suiza to implement over 40 compliance measures at each facility to address the violations. In addition, the company has agreed to spend at least $3 million to reduce the amount of anhydrous ammonia used in the refrigeration process at the facilities, from approximately 18,000 pounds to less than 8,400 pounds at the Rio Piedras facility (54 percent reduction) and from 4,700 pounds to less than 3,300 pounds at the Aguadilla facility (30 percent reduction). Suiza will also install an enhanced alarm system at the Aguadilla facility that will continuously monitor anhydrous ammonia operating pressures, temperatures and levels, as well as automatically alert operators to conditions not within normal operational ranges for these parameters.
Justice Department and the EPA conducted community meetings near both facilities in August 2011. Partly as a result of that outreach, and the suggestions made by community members at those meetings, Suiza has agreed to conduct community emergency drills in the communities located adjacent to the facilities. Suiza will coordinate with first responders and EPA to simulate an accidental anhydrous ammonia release and train community members on what to do in the event of such a release.
Enforcement of the general duty of care and of the regulatory requirements under Section 112(r)(1) and (7) of the Clean Air Act is critical to ensuring that industry focuses on the safety of the public and the environment.
The proposed consent decree is subject to a 30 day public comment period and final court approval. The consent decree may be viewed on the Department of Justice website: www.justice.gov/enrd/Consent_Decrees.html.
New Jersey Glass Manufacturer to Install State-of-the-Art Emissions Controls to Resolve Violations of the Clean Air ActRead the Press Release
WASHINGTON – Under a settlement announced today by the Department of Justice and the U.S. Environmental Protection Agency (EPA), Durand Glass Manufacturing Company Inc. has agreed to install emissions controls on its three glass furnaces that will reduce more than 173 tons of nitrogen oxides (NOx) and 23 tons of particulate matter (PM) per year. Emissions of these pollutants can cause serious respiratory illnesses, aggravate asthma and contribute to the formation of ground level ozone or smog. Durand also installed monitoring systems that will allow it to continuously measure its NOx emissions and agreed to pay a $300,000 civil penalty to resolve violations of the Clean Air Act.
“This agreement includes the lowest limit for nitrogen oxide emissions in the glass industry, designed to reduce emissions of nitrogen oxides by 90 percent,” said Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division of the Department of Justice. “Through this agreement, a significant source of harmful air pollution will be reduced at its source and serve as an example of how compliance with the nation’s environmental laws and employing the latest science and technology can result in long-term benefits for the public’s health and the environment.”
“Today’s settlement requires Durand to install state-of-the-art emissions controls,” said Cynthia Giles, Assistant Administrator for the EPA’s Office of Enforcement and Compliance Assurance. “These pollution controls set a new bar for controlling pollution in the glass industry and will protect communities in southern New Jersey by reducing emissions that can cause serious respiratory illnesses.”
The complaint alleges that Durand constructed a new glass melting furnace at its facility in Millville, N.J., resulting in increased emissions of NOx and PM, without first obtaining pre-construction permits or installing the required pollution control equipment.
The consent decree requires Durand to operate the emissions controls to reduce NOx and PM pollution, including the first Selective Catalytic Reduction (SCR) device on a tableware glass furnace in the United States. The SCR pollution controls are designed to reduce Durand’s NOx emissions by at least 90 percent from previous levels, to 1.2 pounds of NOx per ton of glass produced on a 30-day average basis, and 1.0 pound of NOx per ton of glass produced on a long-term, 365-day average basis. Durand must also operate continuous emission rate monitoring systems that will allow it to monitor NOx emissions on an hourly basis and the company has already installed particulate filters to reduce its PM emissions. The pollution controls and monitoring systems are now fully operational.
The state of New Jersey was an active partner in the settlement.
Reducing air pollution from the largest sources of emissions, including glass manufacturing plants, is one of the EPA’s National Enforcement Initiatives for 2011-2013. NOx and PM, two key pollutants emitted from glass plants, have numerous adverse effects on human health. Reducing these harmful air pollutants will benefit the communities located near the facility, particularly those disproportionately impacted by environmental risks and vulnerable populations, including children.
The proposed consent decree, lodged in U.S. District Court for the District of New Jersey, is subject to a 30-day public comment period and final court approval before becoming effective. A copy of the consent decree lodged today is available on the Department of Justice website at www.justice.gov/enrd/Consent_Decrees.html.
More about the settlement is available at www.epa.gov/enforcement/air/cases/durandglass.html.
More information on EPA’s national enforcement initiative is available at www.epa.gov/compliance/data/planning/initiatives/2011airpollution.html.
Justice Department Seeks Court Approval of Plan to Provide Comprehensive Services to ELL Students in Denver Public SchoolsRead the Press Release
The Department of Justice, the Congress of Hispanic Educators (CHE) and the Denver Public Schools (DPS) have jointly requested court approval of a consent decree that requires that the more than 20,000 English Language Learner (ELL) students enrolled in DPS receive the services they need to overcome language barriers and meaningfully participate in school. The proposed consent decree will benefit all ELLs and LEP parents in the district, including not only the 87 percent of ELL students who are native Spanish speakers, but those who speak one of the 137 other languages spoken in the district as well.
The proposed consent decree requires the district to implement comprehensive measures to ensure that its ELL students are properly identified, served, exited from services upon demonstrating proficiency in English and monitored after they exit. The proposed consent decree also requires translation and interpretation services for thousands of Limited English Proficient parents and tailored services for ELL students who face unique challenges, including refugee students and students with disabilities. In addition, ELL students must have access to English language acquisition services in the district’s 30 charter schools. DPS is required to evaluate the effect of the required changes on student achievement over time through disaggregated data analyses and robust reporting requirements.
If approved, the consent decree would replace a 1999 court order and provide a detailed roadmap for the district to comply with its obligations under the Equal Educational Opportunities Act of 1974 and Title VI of the Civil Rights Act of 1964 within a three-year period. The Equal Educational Opportunities Act requires state and local education agencies to take appropriate action to overcome language barriers that impede students’ equal participation in instructional programs, and Title VI of the Civil Rights Act of 1964 bars discrimination on the basis of race and national origin by state education agencies and schools that receive federal funds.
“We recognize the efforts of the Denver Public Schools to develop and implement a comprehensive and multifaceted plan to serve the thousands of DPS students who are not proficient in English,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The Congress of Hispanic Educators and the department have advocated relief to ensure that DPS meets the requirements of federal law, establishes a culture of high expectations and provides a solid foundation for the future success of all students.”
The enforcement of the Equal Educational Opportunities Act and Title VI are top priorities of the Justice Department’s Civil Rights Division. Additional information about the Civil Rights Division of the Justice Department is available on its website at www.justice.gov/crt .
Justice Department Announces $58 Million to Improve Reentry OutcomesRead the Press Release
Attorney General Eric Holder today announced $58 million in Second Chance Act grant funding to reduce recidivism, provide reentry services, conduct research and evaluate the impact of reentry programs. Attorney General Holder also highlighted the department’s efforts to support research and evidence-based practices and its work with state departments of correction to set recidivism reduction goals .
“Thanks to the collaborative efforts of law enforcement leaders, community-based organizations, and departments of corrections – as well as a variety of groundbreaking projects that have been funded through Second Chance Act grant awards – a number of states have shown significant reductions in the three-year recidivism rate,” said Attorney General Holder.
The Second Chance Act (SCA) programs, administered through the department’s Office of Justice Programs, are designed to help communities develop and implement comprehensive strategies to address the challenges faced by incarcerated adults and youth when they return to their communities following release from confinement.
“R eentry efforts can result in less crime, lower recidivism, fewer victims and improved public safety,” said Acting Assistant Attorney General for the Office of Justice Programs (OJP) Mary Lou Leary. “These are critical goals of the criminal justice field, and we are working to give communities the tools, support and guidance to achieve these goals.”
Of the $58.5 million (98 awards) announced, more than $47 million (94 awards) are for family-based substance abuse treatment; treatment of returning prisoners with co-occurring substance abuse and mental health disorders; adult and juvenile reentry demonstration projects; state, local, and tribal reentry courts; adult mentoring programs; and technology career training projects for incarcerated adults and juveniles. The remaining $10.5 million support evaluation, training and technical assistance for grantees and the reentry field at large.
OJP’s Bureau of Justice Assistance (BJA) awards support jurisdictions which propose to plan or implement a “Pay for Success” model into their reentry initiative. Pay for Success represents a new way to achieve positive outcomes for the criminal justice population with external financing and at a lower risk and cost to governments. BJA is making two Pay for Success awards: an implementation award to Cuyahoga County, Ohio, and a planning award to Lowell, Mass., and is funding the Urban Institute’s efforts to develop a blueprint for municipal, state and federal governments to use to pay for evidence-based anti-crime programs. BJA is also funding three new programs this year:
· The Adult Offender Comprehensive Statewide Recidivism Reduction Demonstration Program awards $6.1 million to seven states for programs aimed at achieving reductions in baseline recidivism rates through planning, capacity-building, and implementing effective and evidence-based interventions.
· Smart Probation: Reducing Prison Populations, Saving Money and Creating Safer Communities includes nine awards totaling $3.7 million to states and local communities to develop and implement evidenced-based probation practices aimed at improving probationer outcomes and specifically reducing recidivism rates.
“Second Chance Act funding enables states, localities and tribes to identify, target and serve moderate and high risk individuals reentering communities.” said BJA Director Denise E. O’Donnell. “The reentry process begins when an individual enters incarceration and ends upon successful reintegration in the community. Using these evidence –based interventions results in safer and healthier communities.”
OJP’s Office of Juvenile Justice and Delinquency Prevention announced nearly $1.8 million to support four new juvenile reentry demonstration projects and more than $3.4 million to continue to fund six existing juvenile reentry programs across the country. With approximately 100,000 youth released from confinement each year, these programs aim to promote public safety by helping youth successfully transition from juvenile residential facilities to their communities.
OJP’s National Institute of Justice (NIJ) will fund evaluations of the SCA Adult Offender Reentry Demonstration projects and the SCA Juvenile Reentry Demonstration Projects. In addition, NIJ will seek to expand knowledge about reentry and recidivism through a number of research projects, including the following:
· Desistence from Crime over the Life Course ($998,221), Research Triangle Institute.
· Executive Session on Community Corrections ($993,386), President and Fellows of Harvard College.
· State-Mandated Criminal Background Employment Screening: A High Stakes Window into the Desistance Process ($706,943), State University of New York, Albany, N.Y.
· “The Impact of Video Visitation on Corrections Staff, Inmates and their Families” ($355,296), Vera Institute of Justice.
· Ph.D. Graduate Research Fellowship, “The Effect of Collateral Consequence Laws on State Rates of Returns to Prison” ($25,000), University of Maryland, College Park, Md.
Through a cooperative agreement to the Council of State Governments Justice Center OJP operates the National Reentry Resource Center (NRRC). The NRRC offers training and technical assistance for Second Chance Act grantees, provides distance learning and other reentry resources to the field, and administers the “What Works in Reentry Clearinghouse.” NRRC collaborates with other federal agencies focused on reentry activities and with the Attorney General’s Federal Interagency Reentry Council and its staff working group.
A list of all OJP grant awards is available at: www.ojp.gov/funding/funding.htm .
For more information on the NRRC: www.nationalreentryresourcecenter.org
For more information on the Reentry Council: www.nationalreentryresourcecenter.org/reentry-council
Investor Fraud Summits Across the Country Arm Consumers with Information to Protect Retirement Funds and Life SavingsRead the Press Release
Attorney General Eric Holder and the Department of Justice’s U.S. Attorneys’ offices together, with the department’s Criminal and Civil Divisions, representatives from the FBI, Securities and Exchange Commission (SEC), the Federal Trade Commission (FTC), the Department of Treasury’s Financial Crimes Enforcement Network (FinCEN), the Commodity Futures Trading Commission, the Bankruptcy Trustees, the Financial Industry Regulatory Authority (FINRA), AARP and the Better Business Bureau are holding investor fraud summits across the country to help consumers protect their hard-earned money from fraud. These summits will take place in Stamford, Conn.; Nashville, Tenn.; San Francisco; Denver; Cleveland and Miami and are a part of the ongoing efforts of President Obama’s Financial Fraud Enforcement Task Force’s (FFETF) Securities and Commodities Fraud Working Group.
The FBI reports an unprecedented rise in investment fraud schemes, involving thousands of victims and staggering losses. Since 2011, the Justice Department’s Criminal Division and 85 U.S. Attorneys’ offices have reported that approximately 800 defendants have been charged, tried, pleaded or sentenced in approximately 500 federal prosecutions involving investor fraud. The total reported amount cheated from victims for this time period tops more than $20 billion. This staggering number includes cases where the total amount victims lost range from tens of thousands of dollars to hundreds of millions, and, in some cases, billions in hard-earned savings.
“Investor fraud crimes can erode faith in our financial markets, threaten our nation’s ongoing economic recovery, and undermine the fabric of our communities,” said Attorney General Eric Holder. “That’s why protecting the American people from fraud is a top priority for today’s Justice Department. And through the Investor Fraud Summits we announce today, we’ll take our anti-fraud efforts to a new level - by raising awareness about these devastating offenses, educating consumers on how to report suspected fraud schemes and empowering members of the public to fight back.”
Although the defendants in these federal prosecutions used a variety of tactics and schemes, they often took the same approach, guaranteeing high returns and, in many instances, providing falsified investment documents to victims. As a result, those victims lost retirement savings, military survivor benefits, family death settlements and money set aside for college tuition and mortgage payments. While the Justice Department has already obtained prison sentences for many of these scammers, including one sentence of up to 50 years, for many of the more 100,000 victims the damage to their families is irreparable.
Since 2011, the SEC, a FFETF partner agency, has charged 887 individuals and entities in 359 actions involving retail investor fraud. Nearly $9.7 billion have been alleged lost by over 1.2 million investors in those cases.
“Whether a cold-call, polished website, or email solicitation, fraudsters will use every means at their disposal to convince investors to part with their money,” said SEC Director of Enforcement Robert Khuzami. “That is why investor education is so critical -- in maintaining financial health as much as physical health, an ounce of prevention is worth a pound of cure.”
In addition to the investor fraud summits across the country, in the coming weeks the Victims’ Rights Committee of the Financial Fraud Enforcement Task Force will host an unprecedented event, in partnership with the Justice Department, the Certified Financial Planner Board and the Foundation for Financial Planning, to offer free financial consulting services to 8,000 victims of an investment fraud scheme that was indicted in Chicago. In this case, the defendant falsely guaranteed high rates of return in a Ponzi scheme that caused the loss of more than $300 million of investors’ funds. Many of the victims were retirees who found the promised high rates of return, coupled with other false promises, an attractive investment alternative for their individual retirement account (IRA) and other retirement-type investments.
The first investor fraud summit is taking place today in Stamford, from 9:00 a.m. to 1:00 p.m. EDT at the University of Connecticut - Stamford Campus. The summit is hosted by U.S. Attorney for the District of Connecticut David Fein, who is joined by Deputy Assistant Attorney General John Buretta, U.S. Attorney for the District of New Jersey Paul Fishman, U.S. Attorney for the Eastern District of New York Loretta Lynch, U.S. Attorney for the District of Massachusetts Carmen Ortiz, U.S. Attorney for the Middle District of Pennsylvania Peter Smith, U.S. Attorney for the District of Delaware Charles Oberly and U.S. Attorney for the District of Maine Thomas Edward Delahanty II, as well as Deputy Director of the SEC Division of Enforcement George Canellos. Several additional federal, state and local law enforcement and regulatory officials, as well as consumer protection experts, are on hand to educate members of the community to help identify instances of fraud or abuse and help them protect their investments. For more information on the summit in Stamford, please contact Thomas Carson at 203-821-3722 or [email protected].
The second investor fraud summit will take place in Nashville, on Thursday, Oct. 4, 2012, from 8:45 a.m. to 12:30 p.m. EDT at Vanderbilt University Law School’s Flynn Auditorium located at 131 21st Avenue South. The summit will be hosted by U.S. Attorney for the Middle District of Tennessee Jerry E. Martin. Guest speakers include FFETF Executive Director Michael Bresnick, U.S. Attorney for the Western District of Virginia Timothy Heaphy, U.S. Attorney for the Northern District of Georgia Sally Yates, U.S. Attorney for the Western District of North Carolina Anne Tompkins, U.S. Attorney for the District of South Carolina Bill Nettles and Assistant Director for the Office of Legal & Victim Programs in the Executive Office of U. S. Attorneys Kristina Neal. These speakers will be joined by other U.S. Attorneys from neighboring states, Enforcement Attorney for the SEC Atlanta Regional Office William Dixon as well as representatives from the Financial Crimes Division of the FBI, the SEC and the Better Business Bureau. The summit will focus on educating the investing public on how to avoid falling prey to investment fraud schemes. For more information on the summit in Nashville, please contact David Boling at 615-736-5956 or [email protected].
The third investor fraud summit will take place Tuesday, Oct. 9, 2012, in Walnut Creek, Calif., from 9:00 a.m. to 1:00 p.m. PDT at the Rossmoor Retirement Community - Gateway Complex located at 1001 Rain Road. The event will be hosted by U.S. Attorney for the Northern District of California Melinda Haag. Guest speakers include U.S. Attorney for the Eastern District of California Ben Wagner, U.S. Attorney for the Central District of California André Birotte, U.S. Attorney for the Southern District of California Laura Duffy and Director of the SEC San Francisco Regional Office Marc Fagel. Other U.S. Attorneys who will be present include U.S. Attorney for the District of Oregon Amanda Marshall, U.S. Attorney for the District of Alaska Karen L. Loeffler and U.S. Attorney for the District of Hawaii Florence T. Nakakuni. Representatives from FinCEN, FBI, Google and CNBC will also participate in informative panels highlighting the rise in investment fraud schemes in the United States; useful strategies to identify fraudsters; and new, proactive approaches to help protect your savings and investment. This event is open to residents of the Rossmoor Retirement Community and the media only. For more information on the summit in Walnut Creek, please contact Jack Gillund at 415-436-6599 or [email protected].
The fourth investor fraud summit will take place in Denver on Wednesday, Oct. 10, 2012, from 8:00 a.m. to 12:00 p.m. MDT at the Tivoli Building - Turnhalle Auditorium located at 900 Auraria Parkway, Suite 150. The summit, lead by U.S. Attorney for the District of Colorado John Walsh, will feature U.S. Attorney for the District of Utah David Barlow, U.S. Attorney for the District of Montana Michael Cotter, U.S. Attorney for the Western District of Oklahoma Sanford Coats, U.S. Attorney for the District of New Mexico Kenneth Gonzalez, U.S. Attorney for the District of Kansas Barry Grissom and Colorado Attorney General John Suthers. Multiple federal, state and local officials, including Director of the SEC’s Denver Regional Office Donald Hoerl, as well as representatives from consumer and business groups will be on hand for informative and interactive panels. Participants will learn what steps are being taken by law enforcement to help protect them from fraud, warning signs and how to outsmart scams and protect their hard-earned money. For more information on the summit in Denver, please contact Matt Kirsch at [email protected] or 303-454-0100.
The fifth investor fraud summit will take place Thursday, Oct. 11, 2012, in Beachwood, Ohio, from 8:30 a.m. to 12:30 p.m. EDT at the Montefiore Senior Living Center located at 1 David Myers Parkway. The summit will be hosted by U.S. Attorney for the Northern District of Ohio Steven Dettelbach and attendees will include U.S. Attorney for the Eastern District of Michigan Barbara McQuade, U.S. Attorney for the Southern District of Ohio Carter Stewart and U.S. Attorney for the Western District of Pennsylvania David Hickton. Federal, state and local law enforcement officials, including Director of the SEC’s Chicago Regional Office Merri Jo Gillette, along with representatives from consumer groups will discuss investor and consumer fraud, with a particular focus on scams that target senior citizens and the elderly. These experts will offer advice, discuss fraud trends and detail the best ways to protect yourself and your savings. For more information on the summit in Beachwood, please contact Jena Suhadolnik at 216-622-3695.
The sixth and final investor fraud summit will take place in Miami on Friday, Oct. 12, 2012, from 9:00 a.m. to 1:00 p.m. EDT at the Miami Dade College – in the Chapman Conference Center, located at 245 N.E. Fourth Street, Bldg. 3, Room 3210. U.S. Attorney for the Southern District of Florida Wifredo Ferrer will host the summit that will feature Attorney General Eric Holder. They will be joined by U.S. Attorney for the Middle District of Florida Robert O’Neill, U.S. Attorney for the Northern District of Florida Pamela Marsh, U.S. Attorney for the Northern District of Alabama Joyce Vance, Director of the SEC’s Miami Regional Office Eric Bustillo and representatives from the Florida Office of Financial Regulation, FBI, FTC, the Better Business Bureau, AARP, FINRA and others to discuss issues associated with investment fraud schemes and help educate investors on how to avoid falling victim to such schemes. The summit will focus on recent investment fraud prosecutions, fraud trends and will include testimonies from victims of investment fraud and a discussion of preventive measures. For more information on the summit in Miami, please contact Lilian Cruz at 305-961-9393.
If you think you may be a victim of investor fraud, please call your local FBI office for assistance. To find your local office, please visit: www.fbi.gov/contact-us/field.For tips on how to spot investor scams and for more information on investor fraud in general, please visit: www.stopfraud.gov.
President Obama established the interagency Financial Fraud Enforcement Task Force (FFETF) to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force, chaired by Attorney General Eric Holder, 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. For more information about the FFETF, please visit: www.stopfraud.gov.
El Paso-Based ReadyOne Industries to Pay $5 Million <br /> to Resolve False Claims Act AllegationsRead the Press Release
ReadyOne Industries Inc. has agreed to pay $5 million to resolve allegations that it violated the False Claims Act by knowingly submitting false certific ations regarding the annual percentages of dir ect labor hou rs per formed by people with sev ere disabilities, the Justice Department announced today. ReadyOne, previously known as the National Center for Employment of the Disabled (NCED), is headquartered in El Paso, Texas, and is a manufacturer of apparel, boxes and other products.
NCED was a participant in the AbilityOne® Program, which creates employment opportunities for people who are blind or have other significant disabilities in the manufacture and delivery of products and services to the federal government. The program uses the purchasing power of the federal government to buy approved products and services from participating, community-based nonprofit agencies nationwide. These community-based nonprofit agencies, like NCED, must ensure that 75 percent of all annual direct labor hours on certain government contracts are performed by employees who are blind or severely disabled. The program is managed by the Committee for Purchase From People Who Are Blind or Severely Disabled, which is a federal agency. The United States alleges that, between 2000 and 2006, NCED employed a large number of non-disabled employees to work on contracts for the manufacture of archival boxes, apparel and other items, and did not appropriately account for their hours as part of the overall ratios it certified and submitted to the committee.
“The AbilityOne program is an important source of employment for people who are blind or have other significant disabilities,” said Stuart Delery, Acting Assistant Attorney General for the Civil Division of the Department of Justice. “False certifications undermine that program and will not be tolerated.”
“This settlement is particularly important because it protects the integrity of a program that ensures disabled individuals are able to reach their maximum employment potential,” said U.S. Attorney Neil H. MacBride for the Eastern District of Virginia.
“AbilityOne Program integrity is paramount. We will continue to monitor and ensure that the people the AbilityOne Program was designed to employ are, in fact, the ones benefitting from this program. We appreciate the Department of Justice’s persistence and professionalism in resolving this matter,” said Tina Ballard, Executive Director and CEO, Committee for Purchase From People Who Are Blind or Severely Disabled.
The settlement arises from a qui tam, or whistleblower, lawsuit filed in the Eastern District of Virginia under the False Claims Act by Michael Ahumada, a former employee of NCED. Under the qui tam provisions of the False Claims Act a private citizens may file actions for false claims on behalf of the United States and share in any recovery.
The government’s investigation was conducted by the U.S. Attorney’s Office for the Eastern District of Virginia, the Civil Division of the U.S. Department of Justice, the General Services Administration and the Committee for Purchase from People Who Are Blind or Severely Disabled. The claims settled by this a gre ement are alle gations onl y, and the re has b een no det ermination of liabilit y.
The lawsuit is captioned as United States ex rel. Mike Ahumada v. National Center for Employment of the Disabled, et al., No. 1:06-cv-713 (E.D. Va.).
Friday 28 September 2012
U.S. Government Intervenes in False Claims Suit <br /> Against CH2M Hill Hanford GroupRead the Press Release
The government has intervened in a lawsuit against CH2M Hill Hanford Group Inc. (CH2M Hill) in the U.S. District Court for the Eastern District of Washington, the Department of Justice announced today. CH2M Hill is a subsidiary of CH2M Hill Companies Ltd., a Colorado-based engineering and construction services company.
Between 1999 and 2008, CH2M Hill was a U.S. Department of Energy prime contractor responsible for the management and cleanup of over 170 underground storage tanks containing mixed radioactive and hazardous waste at the Department of Energy’s Hanford Nuclear Site in southeastern Washington. The lawsuit filed by Mr. Schroeder alleges that numerous CH2M Hill hourly employees regularly and substantially overstated the number of hours that they worked. The complaint also alleges that CH2M Hill management knowingly condoned this practice and submitted inflated claims to the Department of Energy that included the fraudulently claimed hours.
Eight former CH2M Hill employees, including Mr. Schroeder, have pleaded guilty to felony charges stemming from the time card fraud. The lawsuit was originally filed under the False Claims Act by Carl Schroeder, a former employee of CH2M Hill.
The False Claims Act authorizes private parties to sue on behalf of the United States and authorizes the United States to intervene in such a suit and take over responsibility for litigating it. Although the act generally authorizes the whistleblower who initiated the suit to share in any recovery, it also bars recovery by any whistleblower who is convicted of criminal conduct for his role in the fraud/ The United States has notified the court that it expects to file a motion to dismiss Mr. Schroeder from the action on the basis of is criminal conduct. Mr. Schroder’s lawsuit is captioned U.S. ex rel. Schroeder v. CH2M Hill, 09-cv-5038.
The claims asserted in this case are allegations only, and there has been no determination of liability. The case is being handled by the Civil Division of the Department of Justice and the U.S. Attorney’s Office for the Eastern District of Washington, with the assistance of the Department of Energy Office of Inspector General.
U.S. Customs and Border Protection Officer Pleads Guilty to Impersonating U.S. Customs AttachéRead the Press Release
WASHINGTON – A supervisory customs and border protection officer pleaded guilty today in the Southern District of Florida to impersonating a U.S. Customs attaché and making false statements related to his assignment with the U.S. Customs and Border Protection (CBP) Preclearance Office in Dublin, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney Wifredo A. Ferrer for the Southern District of Florida.
Roger J. Kiley, 42, of Miami, pleaded guilty today before U.S. District Judge Ursula Mancusi Ungaro in Miami to a criminal information charging him with one count of false personation and one count of making a false statement.
According to court documents, Kiley was stationed at the CBP Preclearance Office in Dublin from 2009 to 2011. As part of his plea agreement, Kiley admitted that he began a romantic relationship with a Dublin resident in 2010. Kiley also admitted that he held himself out to this individual as the Customs attaché at the U.S. Embassy in Dublin, a government position that did not exist, and that he could arrange for the embassy to lease the residence she was living in as his embassy residence. Kiley further admitted that he created a fake lease from the embassy as well as a funding cable for the payment of the lease on the residence. Kiley also admitted that he created a bogus letter from the embassy authorizing the relocation of Kiley and his romantic interest to the United States, and that he forged the signature of the deputy chief of mission on the letter. Kiley further admitted that he lied to federal agents in February 2012 when interviewed about the allegations of misconduct while he was in Dublin.
Kiley faces up to three years in prison, a $250,000 fine and a year of supervised release for the charge of false personation. He faces five years in prison, a $250,000 fine and three years of supervised release for the false statement charge. Kiley is also responsible for restitution in the amount of $2,500. Sentencing has been scheduled for Dec. 7, 2012.
This case is being prosecuted by Trial Attorney Richard B. Evans of the Criminal Division’s Public Integrity Section and Robin W. Waugh, Assistant U.S. Attorney for the Southern District of Florida. The case is being investigated by the CBP Office of Internal Affairs.
Florida Halfway House Owner Pleads Guilty for Role in Medicare Fraud SchemeRead the Press Release
WASHINGTON – The owner of a Broward County, Fla.-area halfway house pleaded guilty yesterday for his role in a kickback scheme that funneled patients to a fraudulent mental health provider, announced, the Department of Justice and Department of Health and Human Services.
Giuseppe Pellerito, 59, pleaded guilty before U.S. District Judge Marcia G. Cooke in Miami to one count of conspiracy to receive health care kickbacks and two counts of receiving kickbacks. Pellerito is the owner of Florida Sober House, a Florida corporation with multiple halfway houses in Broward and Palm Beach County, Fla.
According to court documents, Pellerito agreed to send Medicare beneficiaries who resided at Florida Sober House to American Therapeutic Corporation (ATC), a fraudulent mental health provider, for partial hospitalization program (PHP) treatment, a form of mental health treatment for severe mental illness, in exchange for illegal health care kickbacks. ATC purported to operate PHPs in seven different locations throughout south Florida and Orlando. According to court documents, Pellerito admitted he knew ATC fraudulently billed Medicare for the PHP treatment that his referrals purportedly received at ATC. He also admitted he referred his halfway house residents to ATC because they had Medicare and were willing to go to ATC, and because he would receive a cash kickback.ATC, its management company Medlink Professional Management Group Inc., a related company called American Sleep Institute (ASI), and various owners, managers, doctors, therapists, patient brokers and marketers of ATC and Medlink and ASI, were charged with various health care fraud, kickback, money laundering and other offenses in two indictments unsealed on Feb. 15, 2011. ATC, Medlink and 14 of the individual defendants have pleaded guilty or have been convicted at trial. On June 1, 2012, five other defendants, including two Miami-based doctors, were convicted after a seven-week trial before U.S. District Judge Patricia A. Seitz, for their involvement in the ATC scheme.
The guilty plea was announced by 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; John V. Gillies, Acting Special Agent-in-Charge of the FBI’s Miami Field Office; and Special Agent-in-Charge Christopher B. Dennis of the HHS Office of Inspector General (HHS-OIG), Office of Investigations Miami Office.
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 1,330 defendants who have collectively billed the Medicare program for more than $4 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.
Co-Founder of Casino-Cheating Criminal Enterprise Sentenced to 36 Months in Prison for Targeting Casinos Across the United StatesRead the Press Release
WASHINGTON – Van Thu Tran was sentenced today in San Diego to 36 months in prison for her role in a scheme to cheat casinos across the country out of millions of dollars, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney Laura E. Duffy for the Southern District of California.
In addition to her prison sentence, Van Thu Tran, 47, was sentenced by U.S. District Judge John A. Houston in the Southern District of California to three years of supervised release and ordered to pay $5,753,416 in restitution, payable to several casinos. The court ordered the forfeiture of her interests in various assets, including jewelry and bank accounts.
Van Thu Tran entered her guilty plea in San Diego on Jan. 14, 2011.
In her plea agreement, Van Thu Tran admitted that in approximately August 2002, she, along with co-conspirators Phuong Quoc Truong, Tai Khiem Tran and others, created a criminal enterprise defined as the Tran Organization, based in San Diego and elsewhere, for the purpose of participating in gambling cheats at casinos across the United States. In her plea agreement, Van Thu Tran also admitted that she and her co-conspirators unlawfully obtained up to $7 million during card cheats.
The investigation of the Tran Organization led to the filing of three separate indictments in 2007, 2008 and 2009. A three-count indictment was returned in San Diego on May 22, 2007, and unsealed on May 24, 2007, which charged Van Thu Tran and 13 others each with one count of conspiracy to participate in the affairs of a racketeering enterprise; one count of conspiracy to commit several offenses against the United States, including conspiracy to steal money and other property from Indian tribal casinos; and one count of conspiracy to commit money laundering. The indictment also charged five separate individuals each with one count of conspiracy to commit several offenses against the United States, including conspiracy to steal money and other property from Indian tribal casinos; and one count of conspiracy to commit money laundering.
According to court documents, the defendants and others executed a “false shuffle” cheating scheme at casinos in the United States and Canada during blackjack and mini-baccarat games. Court documents also show that members of the criminal organization bribed casino card dealers and supervisors to perform false shuffles during card games, thereby creating “slugs” or groups of unshuffled cards. Court documents also show that, after tracking the order of cards dealt in a card game, a member of the organization would signal to the card dealer to perform a “false shuffle,” and members of the group would then bet on the known order of cards when the slug appeared on the table. By doing so, members of the conspiracy repeatedly won thousands of dollars during card games, including winning several hundred thousand dollars on one occasion.
Court documents also show that the members of the organization used sophisticated mechanisms for tracking the order of cards during games, including hidden transmitter devices and specially created software that would predict the order in which cards would reappear during blackjack games.
To date, 42 defendants have pleaded guilty to charges relating to the casino-cheating conspiracy: Van Thu Tran, Phuong Quoc Truong, Tai Khiem Tran, Anh Phuong Tran, Phat Ngoc Tran, Martin Lee Aronson, Liem Thanh Lam, George Michael Lee, Tien Duc Vu, Son Hong Johnson, Barry Wellford, John Tran, Willy Tran, Tuan Mong Le, Duc Cong Nguyen, Han Truong Nguyen, Roderick Vang Thor, Sisouvanh Mounlasy, Navin Nith, Renee Cuc Quang, Ui Suk Weller, Phally Ly, Khunsela Prom, Hop Nguyen, Hogan Ho, Darrell Saicocie, Bryan Arce, Qua Le, Outtama Keovongsa, Leap Kong, Thang Viet Huynh, Don Man Duong, Dan Thich, Jimmy Ha, Eric Isbell, Brandon Pete Landry, James Root, Jesus Rodriguez, Jason Cavin, Nedra Fay Landry, Connie Holmes and Geraldo Montaz. These defendants admitted to targeting, with the aid of co-conspirators, a combined total of approximately 29 casinos in the United States and Canada during the course of the conspiracy:
1) Beau Rivage Casino in Biloxi, Miss.;
2) Casino Rama, in Orillia, Ontario, Canada;
3) Foxwoods Resort Casino in Ledyard, Conn.;
4) Gold Strike Casino in Tunica, Miss.;
5) Horseshoe Casino in Bossier City, La.;
6) Horseshoe Casino and Hotel in Tunica, Miss.;
7) Isle of Capri Casino in Westlake, La.;
8) Majestic Star Casino in Gary, Ind.;
9) Mohegan Sun Resort Casino in Uncasville, Conn.;
10) Palace Station Casino in Las Vegas;
11) Resorts East Chicago Hotel and Casino in East Chicago, Ind.;
12) Sycuan Casino in El Cajon, Calif.
13) Cache Creek Indian Bingo and Casino in Brooks, Calif.;
14) Emerald Queen Casino in Tacoma, Wash.;
15) Imperial Palace Casino in Biloxi;
16) Argosy Casino in Baton Rouge, La.;
17) Trump 29 Casino in Coachella, Calif.;
18) Isle of Capri Casino in Bossier City;
19) Agua Caliente Casino in Rancho Mirage, Calif.;
20) Spa Resort Casino in Palm Springs, Calif.;
21) Pechanga Resort and Casino in Temecula, Calif.;
22) L'Auberge du Lac Casino in Lake Charles, La.;
23) Nooksack River Casino in Deming, Wash.;
24) Barona Valley Ranch Casino and Resort in Lakeside, Calif.;
25) Caesars Indiana Hotel and Casino in Elizabeth, Ind.;
26) Monte Carlo Resort and Casino in Las Vegas;
27) Harrah’s Casino in Lake Charles;
28) Golden Moon Casino in Choctaw, Miss.; and
29) Viejas Casino in Alpine, Calif.Two other defendants, Ha Thuy Giang and Tammie Huynh, pleaded guilty to tax offenses stemming from the investigation, and Khai Hong Tran admitted to the offenses alleged in a 2007 U.S. indictment when he pleaded guilty to casino-cheating offenses in Canada.
On Dec. 15, 2010, defendant Mike Waseleski, a former casino card dealer, was found guilty by a federal jury in San Diego for his role in the Tran Organization’s cheating scheme to steal approximately $1.5 million from Resorts East Chicago Casino.
The case is being investigated by the FBI’s San Diego Field Office; the Internal Revenue Service-Criminal Investigation; the San Diego Sheriff’s Department; and the California Department of Justice’s Bureau of Gambling Control. The investigation has received assistance from federal, state, tribal and foreign authorities, including: the Ontario Provincial Police; the National Indian Gaming Commission; the U.S. Attorney’s Office for the Southern District of California; the U.S. Attorney’s Office for the Western District of Washington; FBI Resident Agencies in Gulfport, Miss., Tacoma, Wash., and Toledo, Ohio; the Indiana State Police; the Rumsey Rancheria Tribal Gaming Agency; the Sycuan Gaming Commission; the Barona Gaming Commission; the Mississippi Gaming Commission; and the Washington State Gambling Commission.
The case is being prosecuted in San Diego by Criminal Division Organized Crime and Gang Section Trial Attorneys Joseph K. Wheatley and Robert S. Tully.
Thursday 27 September 2012
Narcotics Trafficker Faces Life in Prison for Murder of WitnessRead the Press Release
WASHINGTON – Narcotics trafficker Edison Burgos-Montes of Yauco, Puerto Rico, faces life in prison following his conviction on two capital murder counts, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney for the District of Puerto Rico Rosa Emilia Rodríguez-Vélez.
On Aug. 29, 2012, Burgos-Montes, 42, was convicted on four counts following a five-month trial before U.S. District Judge Jay García-Gregory in San Juan: conspiracy to possess with intent to distribute cocaine, conspiracy to import cocaine, murdering a witness to prevent testimony in an official proceeding and murdering a witness in retaliation for providing information to law enforcement.
The counts of conviction on capital murder charges necessitated a separate penalty phase of the trial. That phase began on Sept. 12, 2012, and concluded after a week and a half of testimony on Sept. 19, 2012. The jury was unable to reach a sentencing verdict after two and a half days of deliberation, so a sentence of life in prison will be imposed. There is no parole in the federal system.
As the evidence at trial showed, Burgos-Montes killed Madelyn Semidey-Morales – a government witness and informant and his consensual partner – to retaliate against her for providing information to law enforcement about his unlawful narcotics trafficking and to prevent her from providing authorities with additional information.
Burgos-Montes will be formally sentenced on all four charges on a date to be determined.The penalty phase of the case was prosecuted by Trial Attorneys Julie Mosley and Jeffrey Kahan of the Justice Department Criminal Division’s Capital Case Unit and Assistant U.S. Attorney Marcela Mateo of the District of Puerto Rico. The case was investigated by the Drug Enforcement Administration and the Puerto Rico Police Department, with assistance from the FBI’s San Juan Field Office Evidence Recovery Team.
Massachusetts Tax Fraud Promoter Sentenced to Four Years in Prison for Tax Evasion and Conspiracy to Obstruct and Impede the IRSRead the Press Release
A federal judge in Boston sentenced Charles Adams today to 48 months in prison for tax evasion, conspiring to defraud the United States and obstructing the Internal Revenue Service (IRS), the Justice Department and IRS announced. U.S. District Judge F. Dennis Saylor also ordered Adams to pay restitution in the amount of $401,000.
On April 2, 2012, a federal jury convicted Adams, of Norwood, Mass., as well as Catherine Floyd and William Scott Dion, both of Sanbornville, N.H., for conspiracies to defraud the United States through the promotion and use of multiple tax fraud schemes. The jury convicted all three of conspiracy to defraud the IRS by promoting an “under the table” payroll scheme. Dion and Floyd were also convicted for conspiracy to defraud the IRS through the use of an “underground warehouse banking” scheme designed to conceal customer income and assets from the IRS. Floyd and Dion were also convicted separately for corruptly endeavoring to obstruct the IRS’s ability to determine their own income. Adams was separately convicted of tax evasion with respect to his own taxes.
On Sept. 6, 2012, Judge Saylor sentenced Dion to 84 months in prison and ordered him to pay $3 million in restitution. On Sept. 21, 2012, Judge Saylor sentenced Floyd to 60 months in prison and ordered her to pay $3 million in restitution.
According to the evidence presented at trial, Adams, Floyd and Dion ran a payroll tax scheme in order to pay employees “under the table” without properly accounting for, withholding and paying over to the IRS the payroll taxes required by law. The three promoted the payroll scheme to employers and individuals who wanted to avoid payment of employer payroll taxes and individual payroll taxes. They ran the payroll scheme under three different names: Contract America, Talent Management and New Way Enterprises. Approximately 150 individuals subscribed to the payroll scheme and in excess of $2.5 million in unreported wages and compensation were paid through the system.
The evidence at trial also established that Floyd and Dion conspired to defraud the United States by promoting and operating an “underground warehouse banking” scheme which helped subscribers conceal income and assets from the IRS. According to the evidence, the warehouse scheme operated under three different names: Your Virtual Office, Office Services and Calico Management. As part of the warehouse banking scheme, the defendants maintained accounts at several banks and used the accounts to deposit and commingle business receipts and other funds received from subscribers in order to mask the true ownership of the funds. According to evidence presented at trial, more than $28 million in deposits were made into the various bank accounts used in the scheme.
In August 2009, the three defendants were indicted with four other individuals relating to the promotion and use of these schemes. On Dec. 9, 2011, prior to trial, Gail and Myron Thorick of West Warwick, R.I., pleaded guilty to conspiring to defraud the United States by helping operate the “warehouse banking” scheme, and for filing false tax returns. On that same date, Gary Alcock pleaded guilty to conspiracy by using the payroll scheme, as well as to tax evasion and willful failure to file tax returns. On Jan. 24, 2012, Kenneth Scott Alcock pleaded guilty to conspiracy relating to the payroll scheme and to one count of tax evasion. All four defendants are awaiting sentencing.
Kathryn Keneally, Assistant Attorney General for the Justice Department’s Tax Division, and Carmen M. Ortiz, U.S. Attorney for the District of Massachusetts, commended the efforts of special agents of IRS - Criminal Investigation, who investigated the case, and Tax Division Assistant Chief John N. Kane, former Tax Division Trial Attorney Jeffrey Shih, and Assistant U.S. Attorney Victor A. Wild, who prosecuted the case.
Justice Department Settles with Florida Janitorial Services Company over Immigration and Nationality Act ViolationsRead the Press Release
The Justice Department announced today that it reached an agreement with Diversified Maintenance Systems LLC, a provider of janitorial and facilities maintenance services based in Tampa, Fla . The agreement resolves allegations that the company violated the anti-discrimination provision of the Immigration and Nationality Act (INA) when it failed to fully reinstate an employee in retaliation for asserting her right to work in the U.S.
The charging party alleged that the company failed to provide the employee with proper notice and instructions for contesting an initial data mismatch in E-Verify, resulting in E-Verify issuing an erroneous final response that she was not work authorized. E-Verify is an Internet-based system run by the U.S. Citizenship and Immigration Services (USCIS) that confirms employment eligibility by comparing information from an employee’s Form I-9.
While the employee immediately visited the Social Security Administration (SSA) after receiving verbal notice of the initial data mismatch and instructions from her supervisor, the employee alleged that the supervisor failed to give her the proper E-Verify paperwork which would have enabled the SSA to resolve the mismatch. As a result, the E-Verify program provided an erroneous final response, known as a “final nonconfirmation,” to the employer, stating that the charging party was not eligible to work in the U.S. The company subsequently terminated the employee, and the employee contacted the E-Verify hotline for help. An E-Verify agent notified the employer that the employee is authorized to work, but the employee’s manager refused to reinstate her employment, allegedly because she contacted E-Verify and asserted her right to work under the anti-discrimination provision of the INA. The INA protects employees from discriminatory practices in the employment eligibility verification process, including E-Verify, and prohibits employers from retaliating against individuals who assert their rights or oppose a practice that is illegal under the provision.
Under the terms of the settlement agreement, the company has agreed to pay $6,800 in monetary relief to the injured party, which included back pay and interest, along with a $2,000 civil penalty. The company has also agreed to training by the Justice Department on the anti-discrimination provision and training by the Department of Homeland Security on proper E-Verify procedures. The case settled prior to the Justice Department filing a complaint in this matter.
“The Civil Rights Division has a critical partnership with USCIS in working to ensure that work authorized individuals are not denied the opportunity to work based on misuse, abuse or discriminatory use of E-Verify,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “Retaliation against employees for asserting their right to call the government for help when they think their rights have been violated will not be tolerated.”
The Office of Special Counsel for Immigration Related Unfair Employment Practices (OSC) is responsible for enforcing the anti-discrimination provision of the INA. For more information about protections against employment discrimination under the immigration laws, call the OSC’s worker hotline at 1-800-255-7688 (1-800-237-2525, TDD for hearing impaired), call the OSC’s employer hotline at 1-800-255-8155 (1-800-362-2735, TDD for hearing impaired), sign up for a no-cost webinar at www.justice.gov/crt/about/osc/webinars.php, email [email protected] or visit the website at www.justice.gov/crt/about/osc.
Justice Department Awards $101 Million to Enhance, Support Tribal Justice and SafetyRead the Press Release
WASHINGTON – The Department of Justice today announced more than 200 grants to more than 110 American Indian and Alaska Native nations. The grants will provide more than $101 million to enhance law enforcement practices, and sustain crime prevention and intervention efforts in 10 purpose areas including public safety and community policing; justice systems planning; alcohol and substance abuse; corrections and correctional alternatives; violence against women; elder abuse; juvenile justice; and tribal youth programs.
“Over the last several years, we’ve consulted with tribes and participated in listening sessions that provided a clear message of a need for coordination and flexibility to access our grant resources,” said Acting Associate Attorney General Tony West. “Our outreach and communication with tribal governments have been critical to our understanding of how to better serve and support our tribal partners. These awards represent our ongoing commitment to help put an end to the unacceptable and sobering crime rates witnessed in Indian Country.”
The awards are made through the department’s Coordinated Tribal Assistance Solicitation (CTAS), a single application for tribal-specific grant programs. The department developed CTAS through its Office of Community Oriented Policing, Office of Justice Programs and Office on Violence against Women, and administered the first round of consolidated grants in September 2010. It awarded 286 grants totaling $245 million in 2011 and 2012. Information about the consolidated solicitation is available at www.justice.gov/tribal. A fact sheet on CTAS is available at www.justice.gov/tribal/ctas2012/ctas-factsheet.pdf.Next month, the Justice Department will hold its annual consultation on violence against native women on Oct. 2, 2012, in Tulsa, Okla. In addition, an Interdepartmental Tribal Justice, Safety and Wellness Session will be held in Tulsa, on Oct. 3-4, 2012. It will provide a Listening Session on the Tribal Law and Order Act Tribal Justice Plan Implementation Strategy and include valuable training and technical assistance.
Today’s announcement is part of the Justice Department’s ongoing initiative to increase engagement, coordination and action on public safety in tribal communities.Former Florida Fundraiser and Accountant Associate<br /> Plead Guilty for Illegal Campaign ContributionsRead the Press Release
WASHINGTON – Timothy F. Mobley, a real estate developer based in Tampa, Fla., and accountant Timothy F. Hohl pleaded guilty today in Jacksonville, Fla., federal court for their roles in illegal contributions to the Republican Party of Florida (RPOF) and the campaign of an elected member of the U.S. Congress, announced Assistant Attorney General Lanny A. Breuer.
Mobley, 60, pleaded guilty to one count each of making illegal conduit and illegal corporate contributions in violation of the Federal Election Campaign Act (FECA). Hohl, 60, of Tampa, Fla., pleaded guilty to three counts of aiding and abetting those illegal contributions. Both defendants entered their guilty pleas before U.S. Magistrate Judge Joel B. Toomey.During his guilty plea hearing, Mobley admitted that from March 2006 through October 2008, he made contributions to the campaign of an individual referred to in court documents as “Federal Elected Official A” that were above the limit established by FECA. Mobley admitted he disguised these contributions by recruiting and providing money to employees of his business entities and to one employee’s family member. He also admitted he used corporate funds to illegally reimburse the conduit contributions, and that he attempted to conceal reimbursements to various employees by characterizing them as legitimate bonus compensation or advances on bonus compensation. Mobley admitted that in all, he reimbursed a total of $10,000 to RPOF and $84,300 in contributions to the campaign of Federal Elected Official A.
During his guilty plea hearing, Hohl admitted that while working as an accountant to Mobley and Mobley’s business entities from 2006 through 2008, he aided and abetted Mobley’s scheme to make the illegal excessive contributions. Hohl admitted he did so by participating in the reimbursement of other individuals, seeking and accepting reimbursement for his own contributions, and seeking and accepting reimbursement for his wife’s contributions.
On the FECA count charging him with making illegal excessive contributions in the amount of $25,000 or more for the calendar year 2008, Mobley faces a maximum potential penalty of five years in prison and a $632,000 fine. On the second FECA count, charging him with making illegal corporate contributions in the amount of $25,000 or more for the calendar year 2008, he faces a maximum potential penalty of five years in prison and a $250,000 fine.
Hohl pleaded guilty to three counts charging him with aiding and abetting Mobley’s reimbursement scheme in 2006, 2007 and 2008, respectively. The maximum potential penalty for each offense is one year in prison and a $100,000 fine.This case is being prosecuted by Trial Attorneys John P. Pearson and Eric G. Olshan of the Justice Department’s Public Integrity Section. The case was investigated by the Jacksonville and Tampa Field Offices of the FBI. The U.S. Attorney’s Office for the Middle District of Florida provided assistance.
Department of Justice and Federal Trade Commission Sign<br /> Memorandum of Understanding with Indian Competition AuthoritiesRead the Press Release
WASHINGTON – The U.S. Department of Justice and Federal Trade Commission (FTC) signed an antitrust memorandum of understanding (MOU) with the Government of India Ministry of Corporate Affairs and the Competition Commission of India (CCI) today to promote increased cooperation and communication among competition agencies in both countries. The ceremony took place in Washington, D.C.The MOU was signed by Acting Assistant Attorney General Joseph Wayland of the Department of Justice’s Antitrust Division, Chairman Jon Leibowitz of the FTC, Indian Ambassador to the United States Nirupama Rao on behalf of the Indian Ministry of Corporate Affairs and CCI Chairman Ashok Chawla.
“We value our relationship with the Indian Ministry of Corporate Affairs and the Competition Commission of India. We know that this memorandum of understanding will enhance that relationship in the years ahead, as we work together to ensure that markets are open and competitive, by identifying and remedying anticompetitive behavior,” said Acting Assistant Attorney General Wayland.
Commenting on the signing, Chairman Leibowitz said, “We are delighted to enter into this memorandum of understanding with the Indian Ministry of Corporate Affairs and the Competition Commission of India. It will strengthen the already excellent relations among the U.S. and Indian competition authorities by further facilitating cooperation on policy and enforcement matters.”Key provisions of the MOU address the following:
- Cooperation - The MOU provides that the U.S. antitrust agencies and Indian authorities will work to keep each other informed of significant competition policy and enforcement developments in their jurisdictions, and establishes a framework for technical cooperation. The MOU also recognizes that when the U.S. and Indian competition agencies are investigating related matters, it may be in their common interests to cooperate.
- Communication - The MOU establishes a framework for the U.S. antitrust agencies and the Indian competition authorities to consult on matters of competition enforcement and policy. It also contemplates periodic meetings among officials to exchange information on policy and enforcement priorities.
The MOU is a framework for voluntary cooperation and will not change existing law in either country. India adopted its modern competition law in 2002, and the law’s main provisions were put into effect between 2009 and 2011.
Court Security Contractor to Pay $1.8 Million to Resolve Allegations That Guards Did Not Undergo Authorized Firearm Qualification TestingRead the Press Release
New Mexico-based Akal Security, Inc., one of the largest providers of security services at federal courthouses, agreed to pay $1,875,000 to resolve allegations that it failed to appropriately conduct firearms testing in the Northern District of California, the Justice Department announced today. The Northern District of California includes federal courthouses in San Francisco, Oakland and San Jose.
Akal Security provides court security officers to guard federal courthouses under a contract with the U.S. Marshals Service. Under its contract, Akal Security must ensure that its security officers pass an approved firearms qualification test and certify the results. The test requires that security officers accurately fire a designated number of rounds within strict time limits. Security officers who do not receive a qualifying score may not work as security officers under the contract.
The United States alleged that from 2007 to 2011 certain Akal Security rangemasters who administered the test did not apply the time limitations, sometimes out of concern that security officers would not be able to pass a timed test. The United States further alleged that the rangemasters then certified to the Marshals Service that the tests had been conducted appropriately when, in fact, they had not. As a result, the United States alleged, numerous security officers continued to work even though Akal Security had failed to ensure they could pass the required firearms qualification test.
Corrective steps have been taken to assure compliance by Akal Security and all affected court security officers are now properly certified. The United States’ investigation did not uncover evidence of violations of firearms qualification testing outside of the Northern District of California.
“Those who guard federal courthouses not only have a duty to properly bill for their services, but also to ensure the safety of the individuals who work at and visit their federal courthouses,” said Stuart F. Delery, Acting Assistant Attorney General for the Justice Department’s Civil Division. “As this settlement demonstrates, there will be a steep price to pay for the failure to satisfy these important obligations.”
“Companies contracting with the government must be held accountable for the misconduct of their employees,” said Michael E. Horowitz, Inspector General for the Department of Justice. “We are committed to ensuring that the taxpayers’ funds are spent wisely and in accordance with negotiated contracts and regulations.”
The Assistant Attorney General thanked the Office of the Inspector General for the Department of Justice and the Department of Justice’s Commercial Litigation Branch for the collaboration that resulted in today’s settlement. The claims settled by this agreement are allegations only, and there has been no determination of liability.
BP Products North America to Improve Spill Response Preparedness at Oil Terminals NationwideRead the Press Release
BP Products North America, Inc. will pay a $210,000 penalty and implement an enhanced oil spill response program at its oil terminals nationwide, as well as a comprehensive compliance audit to resolve alleged violations of oil spill response regulations at its Curtis Bay Terminal in Maryland, the U.S. Environmental Protection Agency (EPA) and the U.S. Department of Justice announced today. The enhanced oil spill response program will help ensure that BP Product’s oil terminals are better prepared to respond to oil spills that could impact human health and the environment.
EPA alleged that BP Products violated federal regulations requiring oil storage facilities to conduct drills and exercises to respond to oil spills at its Curtis Bay Terminal. The civil penalty is EPA’s highest to date for violations of oil drills and exercises requirements where there was no discharge of oil.
“This agreement will help BP Products strengthen its spill response capabilities across the nation at 33 onshore oil terminals, implementing enhanced oil spill response measures, and requiring an independent auditor to evaluate a dozen high-risk onshore facilities for their readiness to respond to oil spills,” said Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division of the Department of Justice. “Taking these steps will help instill a culture of readiness and preparedness that will help protect many communities, and the natural resources upon which they rely, from future harm.”
“Being prepared to respond to an oil spill can be the difference between dealing with a small, contained event or a full-blown environmental disaster,” said Cynthia Giles, assistant administrator for EPA’s Office of Enforcement and Compliance Assurance. “After twice failing to pass oil spill response exercises at its Curtis Bay facility, under the settlement, BP is required to put preventative measures into place at all of its terminals nationwide that will reduce the threat of oil spills and protect our nation’s valuable waterways. These measures also raise the bar for forward-looking companies seeking to ensure that their facilities are ready to respond quickly in the event of a spill.”
Under the settlement filed today in federal court by the U.S. Department of Justice, BP Products will implement a first-of-its-kind program of spill prevention measures at its 33 non-refinery petroleum products terminals across the country.
As part of this program, the company will review and revise response plans for these facilities to ensure safeguards are tailored to the conditions at each facility. BP Products will also perform enhanced training, drills and exercises, exceeding regulatory requirements, and will repeat any failed drills and exercises within 90 days.
In addition, BP Products has agreed to an independent compliance audit of 12 of its marine and high-risk petroleum product terminal facilities. The audits will ensure that each audited facility is in compliance with spill response requirements, and to evaluate whether the facilities have resources to respond to major spills. The results of the compliance audits will also be incorporated into the enhanced spill prevention and response program being implemented at all of BP’s petroleum terminals.
EPA and the U.S. Coast Guard twice conducted unannounced government-initiated oil spill response exercises at the Curtis Bay Terminal. During these exercises, BP Products was required to demonstrate its response to a small scale discharge of fuel oil from the facility into Curtis Creek by being prepared to deploy 1,000 feet of oil containment boom within one hour and subsequently deploying the boom. On both occasions, the company did not complete the exercise in the allotted time and failed to adequately deploy the containment boom.
The Curtis Bay Terminal, which can store about 22 million gallons of oil, is located less than a quarter mile from Curtis Creek, a tributary of Curtis Bay, the Patapsco River and the Chesapeake Bay.
High-risk onshore facilities that store oil, such as the Curtis Bay Terminal, must have a plan for responding to oil spills that includes employee training, spill response equipment, and a “worst case” contingency plan for containing and cleaning up spills.
Based on the failed drills, EPA cited the company for failing to adequately implement a response plan, failing to identify sufficient spill response resources at the facility, and deficiencies in the facility’s training, drills and exercises program.
The proposed consent decree is subject to a 30 day public comment period and final court approval. The consent decree may be viewed on the Department of Justice website: www.justice.gov/enrd/Consent_Decrees.html
More information about the settlement: www.epa.gov/enforcement/water/cases/curtisbay.html
More information about EPA’s Federal Response Plan requirements: http://www.epa.gov/emergencies/content/frps/index.htm
More about the Spill Prevention Control and Countermeasure requirement: http://www.epa.gov/emergencies/content/spcc/index.htm
Agreement Secures $25 Million Cleanup for the Rio Tinto Mine in NevadaRead the Press Release
The Department of Justice, the U.S. Environmental Protection Agency (EPA) and the Nevada Division of Environmental Protection announced a $25 million agreement for the cleanup of the Rio Tinto Mine, an abandoned copper mine in Elko County, Nev. Four companies have agreed to pay for the environmental project.
The state of Nevada will oversee the cleanup with input from EPA and the Shoshone Paiute Tribes of Duck Valley. The four corporations financing the cleanup, Atlantic Richfield Company, DuPont and Company, The Cleveland-Cliffs Iron Company and Teck American Inc. are corporate successors to companies that operated the mine from 1932 to 1976. A fifth entity, Mountain City Remediation, has been created by the four defendants to conduct the cleanup.
Under the terms of the agreement, the defendants agreed to remove mine tailings from Mill Creek, improve the creek to support the redband trout, and improve water quality in Mill Creek and the East Fork Owyhee River. The defendants will also pay for the Shoshone Paiute Tribes to monitor the cleanup. The companies are required to provide robust performance guarantees including payments to a trust account they will use to implement the cleanup.
“This agreement will result in the cleanup of mine contamination, protection of Nevada’s Owyhee River, and the restoration of a natural and cultural resource that is invaluable to the Shoshone Paiute people,” said Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division of the Department of Justice. “This significant effort demonstrates a spirit of collaboration and commitment to environmental and natural resource protection that we share with our federal, state and tribal partners.”
“This project is a great example of federal, state and tribal agencies working side-by-side to reach a cleanup agreement with private parties,” said Jared Blumenfeld, EPA’s Regional Administrator for the Pacific Southwest. “The companies will not only clean up mine tailings, but also enhance the habitat for redband trout.”
“To the Shoshone Paiute people, the redband trout is not merely a species to be considered; it is a cultural resource. And the habitat for the trout must be protected as well,” said Terry Gibson, Tribal Chairman. “The cleanup effort at the Rio Tinto Mine is very encouraging, and is an essential step to restoring and protecting these cultural resources, not only for today, but for generations to come”
“The efforts of federal, state and tribal agencies over the past few years have culminated in a settlement designed to improve significant cultural and natural resources of Nevada,” said Nevada Attorney General Catherine Cortez Masto. “In addition, we believe this project will bring an economic benefit to Elko County.”
“We are really pleased to see a final agreement between all of the parties and to have work begin at this site,” stated Nevada Department of Environmental Protection Administrator, Colleen Cripps.
The consent decree, a formal settlement under the federal Superfund law, will be posted in the Federal Register and will be available for public comment for a period of 30 days. The consent decree will be available to be viewed on the Justice Department website: www.justice.gov/enrd/Consent_Decrees.html.
The Rio Tinto Mine site is located approximately 2.5 miles south of Mountain City on Mill Creek, a tributary of the East Fork Owyhee River.
Wednesday 26 September 2012
Virginia Man Pleads Guilty to Trafficking in <br /> Counterfeit GM Diagnostic EquipmentRead the Press Release
A Virginia man pleaded guilty today in federal court to selling counterfeit General Motors (GM) automotive diagnostic devices used by mechanics to identify problems with and assure the safety of motor vehicles, announced 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 and FBI Assistant Director Joseph Demarest.
Justin DeMatteo, 31, of Saxe, Va., pleaded guilty before Senior U.S. District Judge Claude M. Hilton in U.S. District Court in the Eastern District of Virginia to an information charging him with one count of trafficking in goods bearing counterfeit marks. DeMatteo, in a plea agreement with the government, also agreed to pay restitution of $328,500 (the full amount of GM’s losses) and forfeit $109.074 and all facilitating property and contraband seized during the execution of search warrants at his business and home on Dec. 15, 2011 . Sentencing is scheduled for Jan. 11, 2013.
In court documents, DeMatteo admitted he sold counterfeit GM Corporation-branded “Tech 2” vehicle diagnostic systems between January and May 2011. The Tech 2 is a hand-held computer used to diagnose problems in vehicles that use electronic controls and interfaces. For newer vehicles, GM designed a new diagnostic interface – the Controller Area Network diagnostic interface (CANdi) module, which serves as an enhancement to the Tech 2 and completes the interface necessary to communicate with future on-board computer systems.
DeMatteo also admitted he offered for sale purported Tech 2 units and CANdi modules that bore counterfeit GM marks. DeMatteo sold the counterfeit Tech 2 units on eBay and accepted payment via Paypal. DeMatteo purchased the units from unauthorized manufacturers in the People’s Republic of China (PRC) and in many cases had them drop-shipped directly from the PRC to U.S. customers. On Dec. 15, 2011, federal agents executed search warrants at DeMatteo’s residence in Saxe and place of business in South Boston, Va. Among other things, agents seized numerous counterfeit GM Tech 2 units and CANdi modules, and various computer equipment and documents that contained evidence linking DeMatteo to the sale of the counterfeit Tech 2 units. According to the stipulated statement of facts and plea agreement, the number of Tech 2 and CANdi units sold by DeMatteo or seized during the searches totaled nearly 100. The retail price of 100 authentic products would have been more than $380,000.
The case was prosecuted by Assistant U.S. Attorney Lindsay Kelly of the Eastern District of Virginia and Trial Attorney Evan Williams of the Criminal Division’s Computer Crime and Intellectual Property Section and was investigated by the FBI’s Intellectual Property Rights Unit.
Pennsylvania Corporation Pleads Guilty to Bid Rigging atMunicipal Tax Lien Auctions in New JerseyRead the Press Release
A Pennsylvania corporation pleaded guilty today to participating in a conspiracy to rig bids for the sale of tax liens auctioned by municipalities throughout New Jersey, the Department of Justice announced.
A felony charge was filed today in the U.S. District Court for the District of New Jersey in Newark, against Crusader Servicing Corp., of Jenkintown, Pa. According to the felony charge, from at least as early as 1998 until September 2006, Crusader participated in a conspiracy to rig bids at auctions for the sale of municipal tax liens in New Jersey by agreeing to allocate among certain bidders which liens each would bid on. The department said that Crusader submitted bids in accordance with their agreements and purchased tax liens at collusive and non-competitive interest rates.
“The conspirators agreed to not compete with one another at these tax lien auctions, depriving struggling homeowners of a competitive interest rate,” said Scott D. Hammond, Deputy Assistant Attorney General for the Antitrust Division’s criminal enforcement program. “Today’s guilty plea demonstrates the Antitrust Division’s continuing efforts to prosecute those who manipulate the competitive process in order to harm home and property owners.”
The department said that the primary purpose of the conspiracy was to suppress and restrain competition to obtain selected municipal tax liens offered at public auctions at non-competitive interest rates. When the owner of real property fails to pay taxes on that property, the municipality in which the property is located may attach a lien for the amount of the unpaid taxes. If the taxes remain unpaid after a waiting period, the lien may be sold at auction. State law requires that investors bid on the interest rate delinquent homeowners will pay upon redemption. By law, the bid opens at 18 percent interest and, through a competitive bidding process, can be driven down to zero percent. If a lien remains unpaid after a certain period of time, the investor who purchased the lien may begin foreclosure proceedings against the property to which the lien is attached.
According to the court documents, Crusader conspired with others not to bid against one another at municipal tax lien auctions in New Jersey. Since the conspiracy permitted the conspirators to purchase tax liens with limited competition, each conspirator was able to obtain liens which earned a higher interest rate. Property owners were therefore made to pay higher interest on their tax debts than they would have paid had their liens been purchased in open and honest competition.
A violation of the Sherman Act carries a maximum penalty of $100 million criminal fine for corporations. The maximum fine for a Sherman Act violation may be increased to twice the gain derived from the crime or twice the loss suffered by the victims if either amount is greater than the statutory maximum.
Today’s plea is the 10th guilty plea resulting from an ongoing investigation into bid rigging or fraud related to municipal tax lien auctions. Eight individuals — Isadore H. May, Richard J. Pisciotta Jr., William A. Collins, Robert W. Stein, David M. Farber, Robert E. Rothman, Stephen E. Hruby and David Butler — and one company, DSBD LLC, have previously pleaded guilty as part of this investigation.
Today’s charge 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.
The ongoing investigation is being conducted by the Antitrust Division’s New York Field Office and the FBI’s Atlantic City, N.J. office. Anyone with information concerning bid rigging or fraud related to municipal tax lien auctions should contact the Antitrust Division’s New York Field Office at 212-335-8000, visit www.justice.gov/atr/contact/newcase.htm or contact the FBI’s Atlantic City Resident Agency at 609-677-6400.Justice Department Requires Divestitures in Order for Standard Parking Corp. to Proceed with Its Acquisition of<br /> Central Parking Corp.Read the Press Release
WASHINGTON – The Department of Justice announced today that it will require Standard Parking Corporation and Central Parking Corporation to divest their interests in certain off-street parking facilities in 29 cities in 21 states in order to proceed with Standard’s acquisition of Central. The department said that without these divestitures, the combined company would have gained a dominant market share of off-street parking facilities in certain areas of each of the cities, resulting in higher prices and reduced service to motorists. The acquisition is valued at approximately $345 million.The department’s Antitrust Division filed a civil antitrust lawsuit today in the U.S. District Court for the District of Columbia to block the proposed acquisition. At the same time, the department filed a proposed settlement that, if approved by the court, would resolve the competitive concerns alleged in the lawsuit.
“Consumers have benefited from lower parking prices because of competition between Standard and Central in many urban central business districts,” said Acting Assistant Attorney General Joseph Wayland in charge of the Department of Justice’s Antitrust Division. “These divestitures will ensure that consumers in the affected cities and states will receive better services.”
Standard and Central are the two largest parking management companies in the United States. The companies are head-to-head competitors in providing motorists with off-street parking services, such as in garages and lots. In its complaint, the department said that the companies compete on prices, including “early-bird” or evening specials, as well as on hours of operation, parking options, security and other terms. As a result of the competition between Standard and Central, consumers have benefitted through lower prices and better services. The proposed merger threatens to end that competition and would provide Standard with the ability to exercise market power by raising prices or reducing the quality of services offered for off-street parking services, the department said in its complaint.
The department’s complaint alleges that the proposed acquisition would lessen competition in certain areas in the central business districts (CBDs) of: Atlanta; Baltimore; Bellevue, Wash.; Boston; Charlotte, N.C.; Chicago; Cleveland; Columbus, Ohio; Dallas; Denver; Fort Myers, Fla.; Fort Worth, Texas; Hoboken, N.J.; Houston; Kansas City, Mo.; Los Angeles; Miami; Milwaukee; Minneapolis; Nashville, Tenn.; New Orleans; New York City (Bronx, Rego Park), N.Y.; Newark, N.J.; Philadelphia; Phoenix; Richmond, Va.; Sacramento, Calif.; and Tampa, Fla.
To remedy the harm, the proposed settlement requires Standard and Central to divest at least 107 parking facilities in the CBDs. The divestitures can be accomplished by selling the companies’ interests in the parking facilities to an approved buyer or by terminating the parking facility agreement or allowing it to expire. The facilities to be divested generate total annual revenues from consumers of about $85 million.Standard is a Chicago-based company which currently operates in 41 states and Washington, D.C., with approximately 2,200 parking facilities containing more than 1.2 million parking spaces. In 2011, Standard had total revenues of more than $729 million.
Central is a Nashville-based company which operates in 38 states, Washington D.C. and Puerto Rico, with approximately 2,200 parking facilities containing about 1 million parking spaces. It is privately held, with total revenues in 2011 in excess of $800 million.
As required by the Tunney Act, the proposed settlement, along with a competitive impact statement, will be published in the Federal Register. Any person may submit written comments concerning the proposed settlement during a 60-day comment period to Scott Scheele, Chief, Telecommunications and Media Enforcement Section, Antitrust Division, U.S. Department of Justice, 450 Fifth Street, N.W., Suite 7000, Washington D.C. 20530. At the conclusion of the 60-day comment period, the U.S. District Court for the District of Columbia may approve the proposed settlement upon finding that it is in the public interest.
Individual Indicted in Louisiana for Impersonating an OSHA Employee to Conduct Fraudulent Hazardous Waste Safety Trainings During Gulf Oil Spill Clean upRead the Press Release
A 22-count federal indictment was unsealed today in federal court in New Orleans charging Connie M. Knight, 46, with impersonating a federal employee for the purpose of enticing people to pay her for fraudulent hazardous waste safety training, announced Ignacia S. Moreno, Assistant Attorney General of the Justice Department’s Environment and Natural Resources Division and Jim Letten, U.S. Attorney for the Eastern District of Louisiana. The indictment also charges Knight with possessing false federal identification documents, creating false federal identification documents and transferring false federal identification documents to her employees.
Knight, previously of Belle Chasse, La., was arrested by federal agents earlier today in Wiggins, Miss., where she currently resides. She was scheduled to appear in federal court in New Orleans at 2:00 p.m. today.
The indictment states that Knight impersonated an Occupational Safety and Health Administration (OSHA) “Master Level V Inspector and Instructor” by utilizing false OSHA credentials, a false OSHA email address, and various other means. Knight thereby enticed individuals to pay for fraudulent hazardous waste safety and awareness training under the pretense that they would get work helping to clean the Gulf.
In the wake of the Deepwater Horizon oil spill, many fisheries were closed, causing many fishermen in the Gulf region to seek other sources of employment, including as oil spill cleanup personnel. All cleanup personnel were required to receive hazardous waste safety training before working in contaminated areas due to dangers from the oil itself and cleanup materials.
According to the indictment, from August to December of 2010, it is estimated that Knight defrauded more than 1,000 individuals throughout the Eastern District of Louisiana. The indictment alleges that Knight created and used fraudulent OSHA credentials, along with numerous false diplomas and certifications, to convince individuals that she was an authorized trainer and that they would be able to procure lucrative cleanup work if they attended and paid for her hazardous waste training courses. Knight targeted members of the Southeast Asian communities in Southern Louisiana, many of whom neither read nor spoke English proficiently.
According to the indictment, in October of 2010, while impersonating an OSHA employee, Knight created false federal OSHA identification badges for others as well. Knight is charged with creating those additional false OSHA identification badges, as well as providing them to four residents of Southern Louisiana fishing communities whom she had hired as employees. The indictment states that Knight knew she had no authority to produce or transfer the false OSHA identification badges.
The charges of producing and transferring fraudulent federal identification documents each carry a maximum sentence of 15 years in prison and a fine of $250,000. The charge of possessing a fraudulent federal identification document carries a maximum sentence of one year in prison and a fine of $5,000. The 19 counts of falsely impersonating a federal employee each carry a maximum sentence of three years in prison and a fine of $250,000.
The allegations in the indictment are mere accusations and all persons are presumed innocent until and unless proven guilty beyond a reasonable doubt in a court of law.
This case is being investigated by the U.S. Department of Labor Office of Inspector General and the U.S. Environmental Protection Agency Criminal Investigation Division, with assistance from OSHA, the FBI, and investigators from the Florida Fish and Wildlife Conservation Commission and the Plaquemines Parish Sheriff’s office.
The case is being prosecuted by Patrick M. Duggan of the Environmental Crimes Section of the Justice Department’s Environment and Natural Resources Division and Emily Greenfield of the U.S. Attorney’s Office for the Eastern District of Louisiana.
Assistant Attorney General for the Tax Division Kathryn Keneally to Hold Pen and Pad Briefing ThursdayRead the Press Release
*******MEDIA ADVISORY*******
WASHINGTON – Assistant Attorney General for the Tax Division Kathryn Keneally will hold a pen and pad briefing regarding the department’s new directive on stolen identity refund fraud (SIRF) cases TOMORROW, SEPTEMBER 27, 2012, at 11:00 a.m. EDT.
WHO: Assistant Attorney General for the Tax Division
Kathryn Keneally WHAT: Pen and pad briefing on SIRF cases WHEN: THURSDAY, SEPTEMBER 27, 2012
11:00 a.m. EDT WHERE: Department of Justice
Room 4143
950 Pennsylvania Ave., N.W.
Washington, D.C.
OPEN PRESSNOTE: All media must present government-issued photo I.D. (such as a driver’s license) as well as valid media credentials. Media must enter the department at the visitor’s entrance on Constitution Avenue between Ninth and Tenth Streets. Media may begin arriving at 10:30 a.m. EDT. Press inquiries regarding logistics should be directed to the Office of Public Affairs at 202-514-2007.