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Thursday 23 August 2012
Settlement Requires Boston Water and Sewer Commission to Remedy Sewer and Stormwater DischargesRead the Press Release
WASHINGTON – Under the terms of a consent decree lodged in federal court today, the Boston Water and Sewer Commission (BWSC) will implement extensive remedial measures to minimize the discharge of sewage and other pollutants into the water bodies in and around Boston, the Department of Justice and the U.S. Environmental Protection Agency (EPA) announced today. The BWSC will also pay a civil penalty of $235,000 for violations of the Clean Water Act and will perform a supplemental environmental project worth at least $160,000.
The work required under this consent decree will significantly reduce remaining pollution sources discharging into and degrading water quality in Boston Harbor. The consent decree is the result of a federal enforcement action brought by the Department of Justice on behalf of the EPA, and by the Conservation Law Foundation (CLF), which filed the original complaint in the case and was an active plaintiff in the case.
“This settlement will require BWSC to take specific steps to significantly reduce discharges from its storm drain and sanitary sewer systems that have contributed pollutants to Boston Harbor and its tributaries,” said Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division of the Department of Justice. “This settlement will produce lasting benefits for the people of Boston, incorporating green infrastructure, low impact development and other controls that will help reduce harmful discharges and protect the environment.”
“Together with our co-plaintiff CLF, we were able to progress from litigation to a settlement that is both comprehensive in its scope and stringent in its requirements and deadlines,” said Carmen Ortiz, U.S. Attorney for the District of Massachusetts. “I am pleased that the BWSC is prepared to be proactive by taking a broad range of actions to minimize the pollutants in its stormwater discharges to Boston’s rivers, streams and harbor.”
“This settlement represents a critical next-step in the ongoing cleanup of Boston Harbor and its associated urban rivers,” said Curt Spalding, regional administrator of EPA’s New England region. “Over the past decades there’s been a remarkable transformation as Boston Harbor and local waterways have been cleaned up, thanks to work by government at all levels and environmental advocates. Under this settlement, the City of Boston will use green infrastructure and low-impact techniques to control pollutants being discharged in its stormwater to local beaches, rivers and streams, benefiting all residents of Boston who enjoy outdoor recreation in the Hub.”Water sampling conducted by EPA indicated untreated sanitary sewage discharging from numerous BWSC stormwater outfalls. In response, the consent decree establishes an aggressive schedule for BWSC to investigate the sources of sewage being discharged from BWSC’s storm drains. The BWSC will first complete its investigations of drainage areas discharging to Constitution, Tenean and Malibu beaches. BWSC will prioritize the rest of the investigations according to the sensitivity of receiving waters and evidence of sewage. The agreement also requires BWSC to remove all identified sources of sewage as expeditiously as possible. In addition, the settlement requires BWSC to conduct frequent and enhanced monitoring (in both dry and wet weather) of its stormwater outfalls.
The consent decree also requires BWSC to control pollutants other than sewage, such as phosphorus and metals, being discharged from its storm drain system. To accomplish this goal, BWSC will conduct stormwater modeling and implement appropriate Best Management Practices (BMPs) to control stormwater discharges. In evaluating BMPs, the consent decree requires BWSC to implement Green Infrastructure and Low Impact Development (GI/LID) techniques wherever possible. These types of techniques involve the use of natural or engineered systems to direct stormwater to areas where it can be stored, infiltrated, evapotranspirated or reused.
While some of the studies and planning required by the settlement will take several years to complete, the agreement also requires BWSC to initiate GI/LID demonstration projects in East Boston’s Central Square, Audubon Circle in the Kenmore/Fenway area of the city, and at City Hall Plaza on an expedited schedule.
Finally, the settlement requires the establishment of construction and industrial inspection programs necessary to meet the requirements of BWSC’s Municipal Separate Storm Sewer System (MS4) permit.
To settle the case, BWSC has also committed to implement a supplemental environmental project to address leakage from private sewer laterals. BWSC has determined that a number of sewer lines connecting buildings to the BWSC sewage system (laterals) are leaking sewage from cracks in the laterals into the BWSC’s storm drains. BWSC will line a minimum of 25 private sewer laterals that have been identified as sources of sewage to its storm drains.
The complaints filed by CLF and the United States alleged violations of the Clean Water Act involving the discharge of raw sewage and other pollutants to surface waters near heavily used recreation areas, such as Constitution Beach and Tenean Beach in Boston Harbor, as well as to the Charles, Mystic and Neponset Rivers. According to the allegations, these discharges have occurred through both illegal sewer connections to the BWSC storm drain system and sanitary sewer overflows that discharge to the BWSC storm drain system or directly to local surface waters.
The complaints also alleged that BWSC violated conditions of its MS4 permit regarding the implementation of its Illicit Discharge Detection and Elimination Program, discharged pollutants in stormwater that violated water quality standards, and failed to develop and implement a number of programs required by the permit, including a program to inspect stormwater controls at construction sites throughout the city of Boston.
The consent decree, lodged in the U.S. District Court for the District of Massachusetts, is subject to a 30-day public comment period and approval by the federal court. Once it is published in the Federal Register, a copy of the consent decree will be available on the Justice Department website at www.usdoj.gov/enrd/Consent_Decrees.html.
Justice and Interior Departments Launch Indian Country Sexual Assault Investigation and Prosecution TrainingRead the Press Release
WASHINGTON – The Justice and Interior Departments this week launched a new training seminar for tribal and federal law enforcement on investigating and prosecuting sexual assault cases on tribal lands. More than 75 participants from throughout the United States participated in the three day training course, which began on Monday, August 20, 2012. They included tribal and federal law enforcement officers, prosecutors and victim specialists from 23 tribal nations and 23 states. Topics included law enforcement response, children as victims and witnesses, forensic examinations with adult victims and developing a coordinated community response to sexual assault.
The course, held at the National Advocacy Center in Columbia, S.C., was taught by the Justice Department’s National Indian Country Training Coordinator and other nationally recognized subject matter experts including Joanne Archambault; FBI Forensic Interviewer Stephanie Knapp; Jennifer Peirce-Week, Past President of the International Association of Forensic Nurses; and Dr. Barbara Knox, Medical Director of the University of Wisconsin Child Protection Program at the American Family Children’s Hospital.
“It will take committed federal and tribal partnerships and a coordinated response to address the high rates of sexual violence in Indian Country today,” said Leslie A. Hagen, National Indian Country Training Coordinator for the Justice Department’s Executive Office for U.S. Attorneys. “This new training series will help build capacity for tribal and federal law enforcement first responders as well as the tribal and federal prosecutors who can help achieve justice for victims of sexual crimes, and who must also take into careful consideration the needs of victims in native communities.”
“The training program we are launching jointly with the Department of Justice to address the high rates of sexual assault on tribal lands builds on our efforts to reduce violent crime in Indian Country,” said Darren Cruzan, Deputy Director of the Bureau of Indian Affairs Office of Justice Services. “I want to thank our federal and tribal partners for working with us to develop this comprehensive training program. It is an important part of OJS’s mission to improve public safety in tribal communities, and underscores our commitment to achieving justice for violent crime victims.”
For more information on the national Indian Country training program, contact Leslie A. Hagen at [email protected].Justice Department Resolves Race Harassment and Discrimination Lawsuit Against Burke County, N.C., Department of Social ServicesRead the Press Release
The Justice Department today concurrently filed a complaint and consent decree against the Burke County, N.C., Department of Social Services, alleging that the county did not have an effective harassment and discrimination policy in place and did not provide sufficient training in race harassment and discrimination for its employees and supervisors, in violation of Title VII of the Civil Rights Act of 1964, as amended. Title VII is a federal statute which prohibits employment discrimination on the basis of sex, race, color, national origin or religion.
The consent decree, filed in the U.S. District Court in the Western District of North Carolina, requires Burke County to modify its policy designed to prevent harassment and discrimination in the workplace and provide annual training to Burke County supervisors and employees about discrimination and harassment. The lawsuit was filed with the assistance of the U.S. Attorneys’ office for the Western District of North Carolina.
“Federal law requires employers to maintain a workplace free of racial harassment,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “I commend Burke County for working with the Justice Department to put effective policies and training in place to prevent workplace discrimination and harassment.”
The complaint alleges that while investigating a claim of racial discrimination involving the use of a racial epithet by a Burke County supervisor in the presence of subordinates, the division learned that Burke County supervisors and employees had received no training on race harassment and discrimination, and as such, the supervisor claimed to be unaware of potential consequences for use of a racial epithet that was offensive to her employees.
“Racial harassment and discrimination should not be tolerated anywhere, particularly in the workplace, said Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. “The U.S. Attorney’s office is committed to protecting employees from working in hostile work environments, and will continue to enforce Title VII.”
The filing of this lawsuit and consent decree reflects the department’s ongoing commitment to actively enforce federal employment discrimination laws. Additional information about the Justice Department’s Civil Rights Division is available on its website at www.justice.gov/crt .
Related Materials:
Complaint
Consent DecreeJustice Department Obtains Comprehensive Agreement Regarding North Carolina Mental Health SystemRead the Press Release
The Justice Department announced today that it has entered into an agreement with the state of North Carolina to ensure the state is in compliance with the Americans with Disabilities Act (ADA) and the Rehabilitation Act. The agreement will transform the state’s system for serving people with mental illness. Under the settlement agreement, over the next eight years, North Carolina’s system will expand community-based services and supported housing that promote inclusion and independence and enable people with mental illness to participate fully in community life.
Under the ADA, as interpreted by the Supreme Court’s landmark decision in Olmstead v. L.C., people with disabilities have the right to receive services in the most integrated settings appropriate to their needs. The settlement follows an investigation by the Department of North Carolina’s mental health service system that began in 2010. Since the department’s letter of findings was issued one year ago, in July 2011, the state has worked cooperatively with the department to negotiate an agreement..
“As the Supreme Court noted over a decade ago, the unnecessary segregation of people with disabilities is based on the unsupported assumption that they are unworthy of participating in community life,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “This agreement will enable North Carolinians with mental illness to live in community-based settings, enriching their lives and the lives of their neighbors, and recognizing their worth and dignity. I commend Governor Bev Perdue and North Carolina’s Department of Health and Human Services Secretary Al Delia for their leadership, which played a crucial role in making this comprehensive agreement a reality.”
Over the next eight years, North Carolina will provide integrated supported housing to 3,000 people, expand Assertive Community Treatment teams to serve 5,000 individuals, and provide a range of crisis services. The agreement will also expand integrated employment opportunities for people with mental illness by providing supported employment services to 2,500 individuals. These services will allow the state to serve people with mental illness effectively in their communities while avoiding costly institutional settings.
“North Carolina has taken an important step towards offering a choice to individuals with mental illness who prefer to live in the community,” said Thomas G. Walker, U.S. Attorney for the Eastern District of North Carolina. “The agreement, made possible by the coordinated and cooperative efforts of the state’s executive and legislative branches of government, will ensure that more North Carolinians with mental illness will be able to enjoy integrated lives in their communities.”
The agreement calls for a person-centered discharge planning process to help people move smoothly and successfully to community-based settings, while a pre-admission screening process will prevent people from unnecessarily entering institutional settings. Provisions of the agreement will ensure that people discharged from adult care homes designated as Institutions for mental disease are discharged in a safe, coordinated manner.
North Carolina will implement a comprehensive and robust quality assurance and performance improvement monitoring system to ensure that people are safe and are receiving integrated housing, services and supports that meet their needs. Compliance with the agreement will be monitored by an independent reviewer with extensive experience in mental health systems.
The Civil Rights Division enforces the ADA, which authorizes the attorney general to investigate whether a state is serving individuals in the most integrated settings appropriate to their needs. Visit www.justice.gov/crt to learn more about the Olmstead decision, the ADA and other laws enforced by the Justice Department’s Civil Rights Division.
This agreement is due to the efforts of the following Civil Rights Division staff: Alison Barkoff, Special Counsel for Olmstead Enforcement; Gregory Friel, Acting Chief; Anne Raish, Deputy Chief; Regan Rush, Joy Levin Welan, Travis England, and Regina Kline, Trial Attorneys; with support and assistance from Lance Simon.
Related Materials:
Settlement Agreement
Wednesday 22 August 2012
US Government Joins False Claims Act Lawsuit<br /> <br /> Against the Gallup OrganizationRead the Press Release
The United States has joined a whistleblower lawsuit against The Gallup Organization, the Justice Department announced today. The lawsuit was filed by Michael Lindley, a former Gallup employee, who alleges that Gallup violated the False Claims Act by making false claims for payment under contracts with the U.S. Mint, the State Department and other federal agencies to provide polling services for various government programs.
According to the whistleblower’s complaint, Gallup violated the False Claims Act by giving the government inflated estimates of the number of hours that it would take to perform its services, even though it had separate and lower internal estimates of the number of hours that would be required. The complaint further alleges that the government paid Gallup based on the inflated estimates, rather than Gallup’s lower internal estimates. The government intervened in the lawsuit with respect to Gallup’s contracts with the Mint and the State Department.
“Contractors must understand that it is unlawful to use inflated estimates to obtain higher contract prices,” said Stuart F. Delery, Acting Assistant Attorney General for the Department’s Civil Division. “The decision to join this civil lawsuit underscores the commitment of the Department of Justice to recover federal funds that are unlawfully claimed.”
The lawsuit was filed under the qui tam, or whistleblower, provisions of the False Claims Act, wh ich permit private parties to sue on behalf of the United States for submission of false claims to the government. The private plaintiffs are entitled to receive a share of any funds recovered through the lawsuit. The False Claims Act authorizes the United States to intervene in such a lawsuit and take over primary responsibility for litigating it. The False Claims Act allows for recovery of three times the government’s losses, plus civil penalties.
“Contractors who do business with the federal government must honor their obligations to provide honest services and products,” said U.S. Attorney Ronald C. Machen Jr. “Working with relators and federal investigators, we will do all that we can to act against those who illegitimately bill the American taxpayers.”
In its notice announcing intervention, the United States also indicated that it plans to assert additional claims related to Gallup’s subcontract with the Federal Emergency Management Agency (FEMA). These claims relate to allegations in the whistleblower lawsuit that Gallup negotiated for employment with a FEMA official who was responsible for Gallup’s subcontract while, at the same time, Gallup was seeking to obtain additional funding from FEMA for Gallup’s subcontract.
The lawsuit, which was filed in the District of Columbia, is captioned U.S. ex rel. Lindley v. The Gallup Organization, 09-cv-01985. The claims made in the complaint are only allegati ons and do not constitute a determination of liability.
Two Former Senior Executives of Arthrocare Corp. Arrested in $400 Million Securities Fraud SchemeRead the Press Release
WASHINGTON – Two former senior executives of Austin, Texas-based ArthroCare Corp., a publicly traded medical device company, were arrested this morning in Morristown, N.J. and Orange County, Calif., for their alleged roles in a scheme to defraud the company’s shareholders and members of the investing public by falsely inflating ArthroCare’s earnings by tens of millions of dollars, announced Assistant Attorney General Lanny A. Breuer of the Department of Justice’s Criminal Division and U.S. Attorney Robert Pitman for the Western District of Texas. The department said that the loss to the company’s shareholders and the investing public was more than $400 million.
A 16-count indictment was unsealed today in the U.S. District Court for the Western District of Texas against John Raffle, the former senior vice president of strategic business units of ArthroCare and David Applegate, the former senior vice president in charge of ArthroCare’s spine division. Raffle was arrested in Morristown and Applegate was arrested in Orange County.
The indictment, which was originally returned on Aug. 21, 2012, charges Raffle and Applegate with one count of conspiracy to commit wire, mail and securities fraud; four counts of wire fraud; eight counts of mail fraud; and three counts of securities fraud. The indictment also seeks forfeiture of assets held by Raffle and Applegate.
“The indictment unsealed today alleges that these senior corporate executives participated in a scheme to artificially inflate their company’s stock prices, cheating shareholders and the investing public out of hundreds of millions of dollars,” said Assistant Attorney General Breuer. “The Criminal Division will continue to vigorously pursue those who defraud American investors.”
According to the indictment, between in or about December 2005 through in or about December 2008, Raffle, Applegate and other senior executives and employees of ArthroCare allegedly inflated falsely ArthroCare’s sales and revenue through a series of end-of-quarter transactions involving several of ArthroCare’s distributors. According to court documents, Raffle and Applegate determined the type and amount of product to be shipped to distributors based on ArthroCare’s need to meet Wall Street analyst forecasts, rather than distributors’ actual orders. Raffle, Applegate and others then allegedly caused ArthroCare to “park” millions of dollars worth of ArthroCare’s medical devices at its distributors at the end of each relevant quarter. ArthroCare would then report these shipments as sales in its quarterly and annual filings at the time of the shipment, enabling the company to meet or exceed internal and external earnings forecasts.
According to the indictment, ArthroCare’s distributors agreed to accept shipment of millions of dollars of product in exchange for substantial, upfront cash commissions, extended payment terms and the ability to return product, as well as other special conditions, allowing ArthroCare to inflate falsely its revenue by tens of millions of dollars. ArthroCare did not disclose the conditions of the purported sales to investors.
The indictment further alleges that Raffle, Applegate and others used DiscoCare, a privately owned Delaware corporation, as one of the distributors to cover shortfalls in ArthroCare’s revenue. According to the indictment, ArthroCare shipped product to DiscoCare that far exceeded DiscoCare’s needs at Raffle and Applegate’s direction.
According to court documents, between the fourth quarter of 2005 and the fourth quarter of 2007, ArthroCare reported more than $37 million in revenue in its publicly filed financial statements based on purported sales to DiscoCare. However, during the same time period, DiscoCare’s actual net cash payments to ArthroCare for the products were less than $50,000. Court documents further allege that, to conceal the fact that DiscoCare owed ArthroCare a substantial amount of money on unused inventory, Raffle and Applegate caused ArthroCare to acquire DiscoCare on Dec. 31, 2007.
According to the indictment, in the third quarter of 2007, Raffle and Applegate began a new program at ArthroCare, called “Son of DRS.” Under the Son of DRS program, ArthroCare allegedly shipped medical devices from its sports division to its customers free of charge and recorded the revenue once DiscoCare had been invoiced for the product. According to court documents, DiscoCare never was required to pay ArthroCare for any of the product DiscoCare purportedly purchased under the Son of DRS program because ArthroCare acquired DiscoCare before any payments came due. The indictment alleges that, between August and November 2007, Raffle and Applegate caused ArthroCare to falsely report more than $7 million in revenue in its publicly filed financial statements based on purported sales to DiscoCare under this program.
According to court documents, between December 2005 and December 2008, ArthroCare’s shareholders held more than 25 million shares of ArthroCare stock. On July 21, 2008, after ArthroCare announced publicly that it would be restating its previously reported financial results from the third quarter 2006 through the first quarter 2008 to reflect the results of an internal investigation, the price of ArthroCare shares dropped from $40.03 to $23.21 per share. The drop in ArthroCare’s share price caused an immediate loss in shareholder value of more than $400 million.
Upon conviction, Raffle and Applegate face a maximum prison sentence of five years for the conspiracy charge and 20 years for each count of mail and wire fraud. Raffle and Applegate also face a maximum sentence of 25 years in prison for each securities fraud count.
An indictment is merely a charge, and the defendants are presumed innocent until proven guilty.
The case is being prosecuted by Assistant Chief Benjamin D. Singer and Trial Attorney Henry P. Van Dyck of the Criminal Division’s Fraud Section. This case was investigated by the FBI’s Austin Field Office.
Justice Department Settles Discrimination Claim Against Illinois CompanyRead the Press Release
The Justice Department announced today that it reached an agreement with MicroLink Devices, a manufacturer of semiconductor structures and advanced solar cells based in Niles, Ill. The agreement resolves allegations that the company violated the anti-discrimination provision of the Immigration and Nationality Act (INA), when it placed six online job postings that explicitly stated citizenship status preferences or requirements that excluded certain work-authorized non-citizens from consideration.
Under the INA, employers may not discriminate on the basis of citizenship status unless required to comply with law, regulation, executive order or government contract. Although MicroLink Devices is a party to several federal contracts subject to the International Traffic in Arms Regulations (ITAR), which control the export and import of sensitive technology, ITAR does not require or permit employers to limit job applicants to or prefer U.S. citizens in the hiring process. The job postings therefore impermissibly discriminated against non-citizen workers eligible for the advertised positions, such as lawful permanent residents, refugees and those given asylum in the United States.
Under the settlement agreement, MicroLink Devices will pay $12,000 in civil penalties to the United States. MicroLink Devices further agreed to revise its hiring and recruiting procedures, conform future job postings to the requirements of the law, and to be subject to training, reporting and compliance and monitoring requirements. The case settled prior to the Justice Department filing a complaint in this matter.
“Employers must give all eligible candidates the equal opportunity to compete for employment,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The department is committed to ensuring employers do not discriminate against protected individuals based on citizenship status.”
The Office of Special Counsel (OSC) for Immigration-Related Unfair Employment Practices is responsible for enforcing the anti-discrimination provision of the INA, which protects work-authorized individuals from employment discrimination on the basis of citizenship status or national origin discrimination, including discrimination in hiring and the employment eligibility verification (Form I-9) process.
For more information about protections against employment discrimination under the immigration laws, call the OSC’s worker hotline at 1-800-255-7688 or the OSC’s employer hotline at 1-800-255-8155. TDD for hearing impaired is 800-237-2515. You may also sign up for a no-cost webinar at www.justice.gov/crt/osc/webinars.php , email [email protected] or visit the website at www.justice.gov/crt/about/osc .
Detroit-Area Resident Pleads Guilty to Participating in $3.1 Million Medicare Fraud SchemeRead the Press Release
WASHINGTON – A Detroit-area social worker pleaded guilty for his role in a $3.1 million Medicare fraud scheme, the Justice Department, FBI and Department of Health and Human Services (HHS) announced today.
Gregory Lawrence, 54, of Detroit, pleaded guilty yesterday before U.S. District Court Judge Victoria A. Roberts in the Eastern District of Michigan to one count of conspiracy to commit health care fraud.
On July 30, 2012, Lawrence’s co-conspirators Felicia Marsh, 54, and Jamie Moreau, 34, both of Detroit, each pleaded guilty before Judge Roberts in the Eastern District of Michigan to one count of conspiracy to commit health care fraud for their roles in the scheme.
According to plea documents, Lawrence, Marsh and Moreau were employees at New Century Adult Day Program Services LLC, a purported psychotherapy clinic in Flint, Mich. From November 2009 to April 2012, New Century used Medicare beneficiary information to bill Medicare for more than $3.1 million in psychotherapy services that were not medically necessary and/or not provided. Court documents reveal that New Century lured Medicare beneficiaries – many of whom were mentally or developmentally disabled – from adult foster care homes and off the street with the promise of seeing a doctor who would prescribe them prescription pain medication. When they arrived at New Century, beneficiaries were told that they must sign up for its psychotherapy program in order to see the doctor. New Century would use the signatures provided by these beneficiaries as a basis to bill Medicare for group and individual psychotherapy purportedly rendered to them. In fact, no psychotherapy was provided.
Court documents show that Lawrence, Marsh and Moreau played key roles in this scheme. Lawrence was a licensed social worker, who helped direct New Century’s operations and created documents that gave the impression that he had provided psychotherapy, when, in fact, he had not. Lawrence’s provider identification number (PIN) was used by New Century to bill Medicare for group and individual psychotherapy services for approximately $1,247,059, of which Medicare paid approximately $395,060.
Plea documents show that, like Lawrence, Marsh used her training as a social worker to create documents for herself and others to give the impression that New Century had rendered psychotherapy that was not provided. New Century submitted approximately $488,331 in claims using Marsh’s PIN, and Medicare paid New Century approximately $153,333 on these claims.
Court documents show that Moreau collected signatures of Medicare beneficiaries that would be used by New Century to defraud Medicare. Moreau also prepared billing paperwork based upon these signatures. Moreau knew that these signatures were being used at New Century to bill Medicare for psychotherapy services that were not provided. From October 2011 through April 2012, Moreau was responsible for $615,751 of the amount New Century billed Medicare. Medicare paid New Century approximately $192,001 on these claims.
At sentencing, Lawrence, Marsh and Moreau each face a maximum of 10 years in prison and a $250,000 fine. Lawrence’s sentencing hearing is scheduled for Jan. 29, 2013. The sentencing hearings for Marsh and Moreau are scheduled for Jan. 8, 2013.Lawrence’s guilty plea was announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney for the Eastern District of Michigan Barbara L. McQuade, Special Agent in Charge of the FBI’s Detroit Field Office Robert D. Foley III, and Special Agent in Charge Lamont Pugh III of the HHS Office of Inspector General (HHS-OIG), Chicago Regional Office.
The case was prosecuted by Trial Attorney William G. Kanellis of the Justice Department Criminal Division Fraud Section and Fraud Section Assistant Chief Gejaa T. Gobena. The case was investigated by the FBI and HHS-OIG, and was brought as part of the Medicare Fraud Strike Force, supervised by the Fraud Section and the U.S. Attorney’s Office for the Eastern District of Michigan.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,330 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.Clean Water Act Settlement Ensures That Boston Racetrack Addresses Wastewater and Stormwater DischargesRead the Press Release
WASHINGTON – Sterling Suffolk Racecourse LLC will pay a civil penalty of $1.25 million to resolve violations of the Clean Water Act (CWA) at its Suffolk Downs racetrack facility in Revere and East Boston, Mass., the U.S. Department of Justice and U.S. Environmental Protection Agency (EPA) announced today. The company is also spending more than $3 million to prevent polluted water from entering nearby waterways and will perform three environmental projects worth approximately $742,000 that will provide water quality monitoring and protection efforts for more than 123 square miles of watershed. The terms of the settlement are contained in a consent decree lodged in federal court in Boston today.
The federal complaint alleges that Suffolk allowed polluted wastewater, including horse manure, urine and bedding material, to discharge into Sales Creek, a tributary of Belle Isle Inlet and Boston Harbor. In addition, the federal complaint alleges that Suffolk operated its concentrated animal feeding operation (CAFO), which stables race horses from March through November, without a permit under the CWA.
“Today’s agreement will prevent further discharges of wastewater from Suffolk Downs into local waterways and will bring the racetrack into compliance with the Clean Water Act, which protects America’s streams, wetlands and rivers from the impacts of Concentrated Animal Feeding Operations,” said Ignacia S. Moreno, Assistant Attorney General of the Environment and Natural Resources Division of the Department of Justice. “The settlement also brings lasting benefits to residents and the environment by requiring water quality monitoring in the Mystic and Saugus river watersheds and a salt marsh habitat protection project near the racetrack.”
“This settlement reduces a major source of pollution into Boston Harbor,” said Cynthia Giles, Assistant Administrator for EPA’s Office of Enforcement and Compliance Assurance. “In addition, the settlement’s environmental projects include monitoring water quality in the harbor’s watershed, helping to protect a valuable urban waterway for the use and enjoyment of Boston area residents and visitors.”
In response to EPA’s enforcement at this facility, Suffolk is completing construction of a wastewater collection system, is making improvements to its stormwater collection system and has applied for a National Pollutant Discharge Elimination System (NPDES) permit. Suffolk will minimize the volume of and properly manage the wastewater it produces, which will now be collected in a detention pond and discharged during non-peak hours to the sanitary sewer system. Suffolk will also implement green infrastructure and low impact development techniques to address stormwater discharges from the racetrack and maintenance areas of the facility. These techniques involve the use of natural or engineered systems to direct stormwater to areas where it can be stored, infiltrated, evapotranspirated or reused.
“This case is yet another reminder of the department’s longstanding commitment to defending the integrity of our precious natural resources through vigorous enforcement of our environmental laws,” said U.S. Attorney for the District of Massachusetts Carmen Ortiz. “Today’s settlement will help safeguard a cleaner environment for the citizens of the commonwealth to preserve and enjoy, and protect sensitive waterways and wetlands from harmful pollution.”
EPA inspections revealed that Suffolk Down’s process wastewater discharged from the facility to Sales Creek during dry and wet weather. EPA inspectors observed stormwater contaminated with manure and turbid, brown runoff being discharged from the facility to Sales Creek. Sampling conducted at various outfalls discharging from the Suffolk Downs facility indicated elevated levels of pollutants, including ammonia, suspended solids and bacteria. Animal wastes contain excessive levels of nutrients and pathogens, which produce adverse environmental impacts including reduction of oxygen in the water, which affects aquatic life.Suffolk will undertake three supplemental environmental projects under this settlement, including two water quality monitoring projects and one habitat protection project. Suffolk will work with the Mystic River Watershed Association (MyRWA) to conduct monthly baseline and targeted water quality sampling throughout the Mystic River watershed and will work with the Saugus River Watershed Council (SRWC) to conduct a Saugus River watershed sampling program. Both the Mystic River watershed and Saugus River watershed data will be available to the public for free on the MyRWA and SRWC websites. Suffolk will also construct a habitat protection boardwalk in the Belle Isle Marsh, which is immediately downstream of the Suffolk Downs facility and represents one of the largest remaining areas of salt marsh in Boston Harbor. The Belle Isle Marsh encompasses 275 acres of salt marsh, salt meadow and tidal flats, and is part of the Rumney Marsh Area of Critical Environmental Concern (ACEC).
Preventing animal waste from contaminating surface and ground waters of the United States is one of EPA’s National Enforcement Initiatives for 2011-2013. The initiative focuses on large and medium sized CAFOs that are discharging pollution without or in violation of a permit.
The consent decree, lodged in the U.S. District Court for the District of Massachusetts, is subject to a 30-day public comment period and approval by the federal court. Once notice is published in the Federal Register, a copy of the consent decree will be available on the Justice Department website at www.usdoj.gov/enrd/Consent_Decrees.html.
More information about the case is available at www.epa.gov/compliance/resources/cases/civil/cwa/sterlingsuffolk.html.
Tuesday 21 August 2012
Medical Equipment Company Owner Sentenced in Louisiana to 180 Months in Prison for Medicare Fraud SchemeRead the Press Release
WASHINGTON – The owner of multiple durable medical equipment (DME) companies that operated in Louisiana was sentenced today to serve 180 months in prison for his role in multiple Medicare fraud schemes involving fraudulent claims and illegal kickback payments for unnecessary DME, announced the Department of Justice, the Department of Health and Human Services (HHS), the FBI and the Louisiana State Attorney General’s Office.
Henry Lamont Jones, 37, of Prairieville, La., was sentenced by U.S. District Judge James J. Brady of the Middle District of Louisiana. In addition to his prison term, Jones was sentenced to serve three years of supervised release and ordered to pay $13,397,759 in restitution, jointly and severally with convicted co-defendants.Jones, along with his ex-wife, Chikenna D. Jones, at various times operated McKenzie Healthcare Solutions Inc., and owned and operated Healthcare 1 LLC, Lifeline Healthcare Services Inc., Medical 1 Patient Services Inc. and Rose Medical Equipment Inc., Louisiana-based companies that fraudulently billed medical equipment to the Medicare program from 2004 to 2010. Jones had also worked as a patient recruiter for Unique Health Solution Inc. For his involvement with Unique, Jones, along with co-defendants Nnanta “Felix” Ngari, Sofjan M. Lamid and Ernest Payne, was convicted of conspiracy to commit health care fraud and conspiracy to defraud the United States and to pay or receive health care kickbacks after a jury trial in August 2011. Henry Jones and Chikenna Jones were convicted of conspiracy to commit health care fraud and conspiracy to defraud the United States and to pay or receive health care kickbacks after a jury trial in November 2011 for their role in the operation of McKenzie Healthcare Solutions Inc., and Jones pleaded guilty to Medicare fraud charges against him relating to the remaining companies in advance of a trial scheduled for February 2012.
In operating the various DME companies, Jones fraudulently billed the Medicare program for medical equipment that either was not medically necessary or not provided. Jones hired patient recruiters to obtain Medicare beneficiary information and prescriptions for medical equipment such as leg braces, arm braces, power wheel chairs and wheel chair accessories. These prescriptions were then used to submit fraudulent claims to the Medicare program.
According to court documents, during the period when Jones was operating Healthcare 1, Lifeline Healthcare Services, Medical 1 Patient Services, Rose Medical Equipment and McKenzie Healthcare Solutions, these companies submitted more than $22.5 million in fraudulent claims to the Medicare program. During the period of time when Jones was a patient recruiter for Unique Medical Solution, the company submitted more than $4.5 million in fraudulent claims to the Medicare program.
Today’s sentences were announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney Donald J. Cazayoux Jr. of the Middle District of Louisiana; Mike Fields, Special Agent-in-Charge of the Dallas Region for the HHS Office of the Inspector General (HHS-OIG); Michael Anderson, Special Agent-in-Charge of the FBI’s New Orleans Division; and James Buddy Caldwell, Louisiana State Attorney General.
The Unique/Ngari matter was prosecuted by Assistant Chief Ben Curtis and Trial Attorney David Maria of the Justice Department Criminal Division’s Fraud Section. The McKenzie matter was prosecuted by Assistant Chief Ben Curtis and Trial Attorneys David Maria and Alex Berlin. And the Jones matter was prosecuted by Assistant Chief Ben Curtis and Trial Attorneys David Maria and Abigail Taylor. The cases were investigated by the FBI, HHS-OIG and the Medicaid Fraud Control Unit of the Louisiana State Attorney General’s Office (MFCU), and were brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Middle District of Louisiana.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.
Iraqi National Pleads Guilty to 12-count Terrorism Indictment in KentuckyRead the Press Release
Iraqi citizen Mohanad Shareef Hammadi pleaded guilty to federal terrorism charges today in U.S. District Court for the Western District of Kentucky before Senior Judge Thomas B. Russell, announced Lisa Monaco, Assistant Attorney General for National Security; David J. Hale, U.S. Attorney for the Western District of Kentucky; and Perrye K. Turner, Special Agent in Charge of the FBI Louisville Division.
Hammadi, 24, a former resident of Iraq, pleaded guilty to all counts of a 12-count superseding indictment. The superseding indictment charged him with five counts of attempting to provide material support to terrorists and four counts of attempting to provide material support to al-Qaeda in Iraq (AQI), a designated foreign terrorist organization. The superseding indictment also charged him with one count of conspiracy to transfer, possess and export Stinger missiles and with two counts of making false statements in immigration matters. Hammadi was first indicted on May 26, 2011 and was subsequently charged in a superseding indictment returned on Feb. 15, 2012 by a federal grand jury meeting in Bowling Green, Ky.
Hammadi faces a maximum sentence of life in prison under the sentencing guidelines and a mandatory minimum of 25 years in prison. Hammadi’s sentencing is scheduled for Dec. 5, 2012, in U.S. District Court in Bowling Green before Senior Judge Russell at 11:30 am.
Hammadi’s co-defendant, Waad Ramadan Alwan, pleaded guilty to all counts of the 23-count indictment on Dec. 16, 2011, before Senior Judge Russell in Bowling Green. Alwan was charged with conspiracy to kill U.S. nationals abroad; conspiracy to use a weapon of mass destruction (explosives) against U.S. nationals abroad; distributing information on the manufacture and use of Improvised Explosive Devices (IEDs); attempting to provide material support to terrorists and to AQI; as well as conspiracy to transfer, possess and export Stinger missiles.
Hammadi and Alwan were both arrested on May 25, 2011, in Bowling Green on criminal complaints. Both defendants were closely monitored by federal law enforcement authorities in the months leading up to their arrests. Neither was charged with plotting attacks within the United States.
“Today’s guilty plea is another testament to the effectiveness of the intelligence and law enforcement communities in bringing terrorists to justice and preventing them from harming the American people,” said Lisa Monaco, Assistant Attorney General for National Security. “I applaud all those responsible for this successful outcome.”
“In open court today, Mohanad Hammadi admitted to engaging in terrorist activities here in the United States. He admitted that he tried to send numerous weapons from Kentucky to Iraq to be used against American soldiers,” said U.S. Attorney Hale. “Bringing Hammadi to justice is the result of a comprehensive law enforcement effort. The FBI agents of the Louisville Division, along with the federal and local law enforcement members of the Joint Terrorism Task Forces here in Kentucky, including the Bowling Green Police Department, and our many other partners, are to be commended. Their collaborative law enforcement effort successfully thwarted the ongoing intentions of an experienced terrorist. The guilty plea today sends a strong message to anyone who would attempt similar crimes that they will face the same determined law enforcement and prosecution efforts.”
“Protecting the United States from terrorist attacks remains the FBI's top priority,” said Perrye K. Turner, Special Agent in Charge of the FBI in Kentucky. “Using our growing suite of investigative and intelligence capabilities, FBI Agents and Analysts assigned to our Bowling Green office were able to neutralize a potential threat. Our local Joint Terrorism Task Force, comprised of FBI Agents and other local, state and federal agencies from across the Commonwealth, remains committed to dismantling extremist networks and cutting off financing and other forms of support provided by terrorist sympathizers, whether they are operating in Kentucky or worldwide.”
According to the charging documents, Hammadi entered the United States in July 2009, and after first residing in Las Vegas, moved to Bowling Green. Alwan entered the United States in April 2009, and has lived in Bowling Green since his arrival.
According to court documents in this case, the Bowling Green office of the FBI’s Louisville Division initiated an investigation of Waad Ramadan Alwan, which, beginning in 2010, utilized a confidential human source (CHS). The CHS met with Alwan and recorded their meetings and conversations beginning in August 2010. The CHS represented to Alwan that he was working with a group to ship money and weapons to Mujahadeen in Iraq. Mujahadeen generally refers to Muslim fighters or warriors engaged in jihad. From September 2010 to January 2011, Alwan participated in deliveries of weapons and money that he believed were destined for terrorists in Iraq.
In January 2011, Alwan recruited Hammadi, a fellow Iraqi national living in Bowling Green, to assist in these material support operations. Beginning in January 2011, and continuing until his arrest in late May 2011, Hammadi participated with Alwan in money and weapons deliveries that he believed were destined for terrorists in Iraq, including AQI. Hammadi also detailed to the CHS his prior activities as an insurgent in Iraq, including his prior participation in IED attacks against U.S. troops in Iraq. After his arrest on May 25, 2011, Hammadi admitted to his participation in the purported material support operations involving weapons and money that occurred between January and May, 2011. Hammadi also admitted his involvement in insurgent activities while living in Iraq, including his membership in an insurgent group and his participation in various attacks on U.S. troops in Iraq.
None of the weapons, including Stinger missiles, nor any of the money delivered by Alwan or Hammadi in connection with the CHS in the United States were provided to AQI, but instead were carefully controlled by law enforcement as part of the undercover operation.
This case is being investigated by the Louisville Division of the FBI. Assisting in the investigation were members of the Louisville and Lexington Joint Terrorism Task Forces, U.S. Immigration and Customs Enforcement, U.S. Marshals Service, U.S. Department of Defense, U.S. Citizenship and Immigration Services and the Bowling Green Police Department.
The prosecution is being handled by Trial Attorney Larry Schneider from the Counterterrorism Section of the Justice Department’s National Security Division, and Assistant U.S. Attorneys Michael Bennett and Bryan Calhoun from the U.S. Attorney’s Office for the Western District of Kentucky.
Florida Assisted Living Facility Owner Sentenced to 30 Months in Prison for Medicare Fraud SchemeRead the Press Release
WASHINGTON – The owner of a Miami-area assisted living facility was sentenced today to serve 30 months in prison for his role in a kickback scheme that funneled patients to a fraudulent mental health provider, American Therapeutic Corporation (ATC), the Department of Justice, the FBI and the Department of Health and Human Services announced today.
Bobby Ramnarine, 36, was sentenced by U.S. District Judge Donald M. Middlebrooks in the Southern District of Florida. In addition to his prison term, Ramnarine was sentenced to serve two years of supervised release and was ordered to pay $165,881 in restitution, jointly and severally with co-defendants. Ramnarine pleaded guilty on May 22, 2012, to one count of conspiracy to commit health care fraud.
Ramnarine was the owner of an assisted living facility called Elmina Inc., located in Lauderhill, Fla. According to court documents, Ramnarine agreed to send Elmina residents to ATC in exchange for illegal health care kickbacks. ATC purported to operate partial hospitalization programs (PHPs), a form of intensive treatment for severe mental illness, in seven different locations throughout South Florida and Orlando, Fla. According to court documents, Ramnarine admitted that he knew ATC falsely billed Medicare for PHP treatment based on his fraudulent referrals. Ramnarine also admitted he referred his residents to ATC because he would receive a cash kickback and because his residents had Medicare and were willing to go to ATC. According to the plea agreement, Ramnarine’s participation in the fraud resulted in more than $445,025 in fraudulent billing to the Medicare program.
ATC, its management company, Medlink Professional Management Group Inc., and various owners, managers, doctors, therapists, patient brokers and marketers of ATC, were charged with various health care fraud, kickback, money laundering and other offenses in two indictments unsealed on Feb. 15, 2011. ATC, Medlink and more than 20 of the individual defendants charged in these cases have pleaded guilty or have been convicted at trial.
The sentencing was announced today 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; Michael B. Steinbach, Acting Special Agent-in-Charge of the FBI’s Miami Field Office; and Special Agent-in-Charge Christopher B. Dennis of the HHS Office of Inspector General (HHS-OIG), Office of Investigations Miami Office.
The case was prosecuted by Trial Attorneys Allan J. Medina, Steven Kim and William Parente of the Justice Department 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.Federal Courts Order Seizure of Three Website Domains<br /> Involved in Distributing Pirated Android Cell Phone AppsRead the Press Release
WASHINGTON – Seizure orders have been executed against three website domain names engaged in the illegal distribution of copies of copyrighted Android cell phone apps, Assistant Attorney General Lanny A. Breuer of the Department of Justice’s Criminal Division, U.S. Attorney Sally Quillian Yates of the Northern District of Georgia and Special Agent in Charge Brian D. Lamkin of the FBI’s Atlanta Field Office announced today. The department said that this is the first time website domains involving cell phone app marketplaces have been seized.
The seizures are the result of a comprehensive enforcement action taken to prevent the infringement of copyrighted mobile device apps. The operation was coordinated with international law enforcement, including Dutch and French law enforcement officials.The three seized domain names – applanet.net, appbucket.net and snappzmarket.com – are in the custody of the federal government. Visitors to the sites will now find a seizure banner that notifies them that the domain name has been seized by federal authorities and educates them that willful copyright infringement is a federal crime.
“Cracking down on piracy of copyrighted works – including popular apps – is a top priority of the Criminal Division,” said Assistant Attorney General Breuer. “Software apps have become an increasingly essential part of our nation’s economy and creative culture, and the Criminal Division is committed to working with our law enforcement partners to protect the creators of these apps and other forms of intellectual property from those who seek to steal it.”
“Criminal copyright laws apply to apps for cell phones and tablets, just as they do to other software, music and writings. These laws protect and encourage the hard work and ingenuity of software developers entering this growing and important part of our economy. We will continue to seize and shut down websites that market pirated apps, and to pursue those responsible for criminal charges if appropriate,” said U.S. Attorney Yates.
“The theft of intellectual property, particularly within the cyber arena, is a growing problem and one that cannot be ignored by the U.S government’s law enforcement community. These thefts cost companies millions of dollars and can even inhibit the development and implementation of new ideas and applications. The FBI, in working with its various corporate and government partners, is not only committed to combating such thefts but is well poised to coordinate with the many jurisdictions that are impacted by such activities,” said FBI Special Agent in Charge Lamkin.
During the operation, FBI agents downloaded thousands of copies of popular copyrighted mobile device apps from the alternative online markets suspected of distributing copies of apps without permission from the software developers who would otherwise sell copies of the apps on legitimate online markets for a fee. In most cases, the servers storing the apps sold by these alternative online markets were being hosted in other countries, and our international law enforcement partners assisted in obtaining or seizing evidence stored on these servers. Nine search warrants were also executed in six different districts across the country today as part of the operation.The operation reflects a coordinated effort by the Department of Justice Criminal Division’s Computer Crime and Intellectual Property Section and the Office of International Affairs; the U.S. Attorney’s Office for the Northern District of Georgia; the FBI’s Atlanta Field Office; and six other U.S. Attorney’s Offices, including the Southern District of Mississippi, the Middle District of Florida, the Western District of Michigan, the Southern District of Indiana, the District of Rhode Island and the Northern District of Texas.
The FBI is a full partner at the National Intellectual Property Rights Coordination Center (IPR Center). The IPR Center is one of the U.S. government’s key weapons in the fight against criminal counterfeiting and piracy. The IPR Center uses the expertise of its 19 member agencies to share information, develop initiatives, coordinate enforcement actions and conduct investigations related to intellectual property (IP) theft. Through this strategic interagency partnership, the IPR Center protects the public’s health and safety, the U.S. economy and the war fighters. To report IP theft or to learn more about the IPR Center, visit www.IPRCenter.gov.
The enforcement actions announced today are one of many efforts being undertaken by the Department of Justice Task Force on Intellectual Property (IP Task Force). Attorney General Eric Holder created the IP Task Force to combat the growing number of domestic and international intellectual property crimes, protect the health and safety of American consumers, and safeguard the nation’s economic security against those who seek to profit illegally from American creativity, innovation and hard work. The IP Task Force seeks to strengthen intellectual property rights protection through heightened criminal and civil enforcement, greater coordination among federal, state and local law enforcement partners, and increased focus on international enforcement efforts, including reinforcing relationships with key foreign partners and U.S. industry leaders. To learn more about the IP Task Force, go to www.justice.gov/dag/iptaskforce/.Court Approves Comprehensive Assignment Plan in Longstanding Tennessee Desegregation CaseRead the Press Release
The U.S. District Court for the Western District of Tennessee today approved a comprehensive consent order in McFerren v. County Board of Education of Fayette County, which the Department of Justice negotiated with the Board of Education of Fayette County, Tennessee and the NAACP Legal Defense & Education Fund to desegregate the Fayette County public schools.
The consent order requires the district to implement a controlled choice program by the start of the 2014-15 school year for three of its six elementary schools so that all three schools achieve desegregated enrollments. To further desegregation at the other elementary schools, the district must close two of its elementary schools, construct a new elementary school, revise attendance zone lines and create a magnet program at the elementary school with the highest percentage of African-American enrollment. If the magnet program fails to produce a desegregated school after three years, the consent order requires the district to take additional steps. The district further agreed to provide gifted services at each elementary school, offer additional advanced courses at the high school, and continue certain intra-district student transfers that further desegregation among its schools.
“We are pleased that the parties were willing to work so hard to reach such a substantial and important agreement in this case,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The order shows the type of meaningful progress parties can achieve toward ensuring equal educational opportunities for all students if they are willing to be both steadfast and creative, and we look forward to working with the district over the next few years to implement the order and bring this case to a close.”
The enforcement of Title IV of the Civil Rights Act of 1964 in school districts 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 .
Alabama Woman Pleads Guilty in Stolen Identity Refund Fraud SchemeRead the Press Release
Sonya Darrington pleaded guilty in the Middle District of Alabama to conspiracy to defraud the United States, the Justice Department and the Internal Revenue Service (IRS) announced today.
According to court documents related to the guilty plea, Darrington had been involved in a stolen identity federal tax refund fraud scheme from April 2006 through June 2011. In April 2006, Darrington opened a bank account that received a total of $129,144 in fraudulently obtained tax refunds.
The case was investigated by special agents of IRS - Criminal Investigation. Trial Attorneys Jason H. Poole and Michael Boteler of the Justice Department’s Tax Division and Assistant U.S. Attorney Todd Brown are prosecuting the case.
Additional information about the Tax Division and its enforcement efforts may be found at www.justice.gov/tax.
Monday 20 August 2012
Sinclair Oil to Pay $3.8 Million Penalty and Install Pollution Controls at Wyoming Refineries to Resolve Violations of 2008 Consent DecreeRead the Press Release
WASHINGTON – The Department of Justice and the U.S. Environmental Protection Agency today announced a settlement with two subsidiaries of Sinclair Oil Corporation to resolve alleged violations of air pollution limits established in a 2008 consent decree at refineries in Casper and Sinclair, Wyo. Sinclair Casper Refining Co. and Sinclair Wyoming Refining Co. will pay stipulated penalties totaling $3,844,000 and spend approximately $10.5 million on additional pollution control equipment and other projects to resolve the allegations. The settlement will require the Sinclair companies to reduce emissions of nitrogen oxides (NOx), sulfur dioxide (SO2) and particulate matter by approximately 24, 385 and 59 tons per year, respectively.
“Parties who enter into consent decrees with the United States must adhere to their obligations, and failure to comply will result in further penalties,” said Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division of the Department of Justice. “This settlement requires Sinclair to pay a significant $3,844,000 penalty and provide additional emission reductions beyond those required in the original settlement.”
“EPA is committed to ensuring that companies comply with environmental requirements that protect people's health,” said Cynthia Giles, Assistant Administrator for EPA’s Office of Enforcement and Compliance Assurance. “This settlement holds Sinclair accountable for exceeding the emissions limits agreed to in a previous settlement for Clean Air Act violations and ensures that the people of Wyoming have cleaner, healthier air.”
The alleged violations stem from Sinclair’s failure to meet the terms of the 2008 consent decree, including exceeding NOx emissions limits at the Casper and Sinclair refineries and failing to comply with requirements to install ,operate and maintain a flare gas recovery system at the Sinclair refinery, resulting in excess emissions of SO2. The problems will be addressed by installing and operating a selective catalytic reduction system to control NOx emissions and by upgrading the flare gas recovery system to meet SO2 emissions limits. Sinclair will also complete a project to provide road paving at its Casper refinery that will reduce particulate matter emissions by an additional 59 tons per year and reduce fuel oil burning at the Casper refinery from the existing 188 tons per year limit to no more than 95 tons per year.
The settlement is subject to a 30-day public comment period and final court approval. The settlement documents may be viewed at www.justice.gov/enrd/Consent_Decrees.html.
Additional information on the settlement is available at
www.epa.gov/compliance/resources/cases/civil/caa/sinclair.html.More information on EPA’s civil enforcement of the Clean Air Act is available at www.epa.gov/compliance/civil/caa/index.html.
More information on EPA’s refinery initiative is available at www.epa.gov/compliance/resources/cases/civil/caa/oil/.
North Carolina Poultry Processing Plant Convicted for Knowing Violations of Clean Water ActRead the Press Release
WASHINGTON – A federal jury today found House of Raeford Farms Inc., the owner and operator of a poultry slaughtering and processing facility located in Raeford, North Carolina, guilty of 10 counts of knowing violations of the Clean Water Act.
House of Raeford allowed plant employees to bypass the facility’s pretreatment system and send its untreated wastewater directly to the city of Raeford’s wastewater treatment plant, without notifying city officials. In addition, House of Raeford failed to prevent employees from sending thousands of gallons of wastewater into a pretreatment system that did not have the capacity to adequately treat the wastewater before it was discharged to the city plant. The untreated wastewater that was discharged directly to the city plant was contaminated with waste from processing operations, including blood, grease and body parts from slaughtered turkeys. A House of Raeford former employee admitted that the facility would continue to “kill turkeys” despite being warned that the unauthorized bypasses had an adverse impact on the city’s wastewater treatment plant. The city plant was responsible for treating industrial, commercial and residential wastewater before it was discharged to Rockfish Creek in Hoke County.
The bypasses and failure to report them violated House of Raeford’s pretreatment permit as well as the city’s sewer use ordinance. Many of the bypasses took place while House of Raeford was subject to a consent order with the city that required it to construct a new pretreatment system and comply with all requirements of its pretreatment permit. A number of the bypasses were recorded in log books kept by House of Raeford Inc. wastewater operators, and were never revealed to the city.
“The convictions today demonstrate the Justice Department’s commitment to prosecuting those who knowingly violate pretreatment permits and the Clean Water Act by releasing untreated and contaminated wastewater to municipal wastewater treatment plants,” said Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division of the Department of Justice. “The violations here are especially egregious and will not be tolerated. The evidence showed that House of Raeford allowed overflows of untreated wastewater to bypass a critical part of their pretreatment system. Many of these bypasses were not disclosed to the city of Raeford, and placed an additional burden on the city’s wastewater treatment plant.”
“Publicly owned wastewater treatment plants must be protected from companies that cut corners by discharging wastewater illegally,” said Maureen O’Mara, Special Agent in Charge of of EPA Region 4, which covers the southeast United States including North Carolina. “The defendants in this case deliberately discharged turkey parts, blood and grease into the wastewater plant for over 16 months, bypassing treatment. Today’s conviction sends the message that the American public will not tolerate companies putting profit ahead of compliance.”
“Families and businesses depend on having clean water. Our SBI agents will continue to work closely with their federal partners to protect the safety of our water supply and hold polluters accountable,” said North Carolina Attorney General Roy Cooper.
House of Raeford Inc. faces a maximum fine of $500,000 or twice the gain or loss resulting from the offenses, whichever is greater, per count. Sentencing has been scheduled for Nov. 28, 2012.The case was prosecuted by the Justice Department’s Environmental Crimes Section and was investigated by U.S. Environmental Protection Agency Criminal Investigation Division and North Carolina State Bureau of Investigation.
Friday 17 August 2012
Twelve-Year Federal Fugitive Indicted for Fraud and Identity Theft in Nationwide Foreclosure Rescue ScamRead the Press Release
WASHINGTON – Federal authorities have charged a former Los Angeles man with aggravated identity theft and having operated a foreclosure-rescue scam in Southern California and elsewhere that promised to postpone foreclosure sales for more than 800 distressed homeowners.
Glen Alan Ward, 47, of Canada, was indicted today in the Central District of California on two counts of bankruptcy fraud, one count of mail fraud and two counts of aggravated identity theft.In 2000, Ward became a federal fugitive when he failed to appear in court after signing a plea agreement, which stemmed from federal charges in the Central District of California associated with a similar scheme. On April 5, 2012, Ward was arrested in Canada on a U.S. provisional arrest warrant based on the charges in the Central District of California. His extradition to the United States is pending.
Today’s indictment charges the defendant with identity theft and a scheme to defraud that took place from July 2007 to April 5, 2012, while he was a fugitive. According to the indictment, Ward led a scheme that solicited and recruited homeowners whose properties were in danger of imminent foreclosure. Ward allegedly promised to delay their foreclosures for as long as the homeowners could afford his $700 monthly fee. Once a homeowner paid the fee, Ward accessed a public bankruptcy database and retrieved the name of an individual debtor who recently filed bankruptcy. The indictment alleges that Ward also obtained a copy of the debtor’s bankruptcy petition and directed his clients to execute, notarize and record a grant deed transferring a 1/100th fractional interest in their distressed home into the name of the debtor he provided. Then, Ward allegedly faxed a copy of the bankruptcy petition, the notarized grant deed and a cover letter to the homeowner’s lender or the lender’s representative, directing it to stop the impending foreclosure sale due to the bankruptcy.
Because bankruptcy filings give rise to automatic stays that protect debtors’ properties, the receipt of the bankruptcy petitions and deeds in the debtors’ names forced lenders to cancel foreclosure sales. The lenders, which included banks that received government funds under the Troubled Asset Relief Program (TARP), could not move forward to collect money that was owed to them until getting permission from the bankruptcy courts, thereby repeatedly delaying the lenders’ recovery of their money.
As part of the scheme, Ward delayed the foreclosure sales of approximately 824 distressed properties by using at least 414 bankruptcies filed in 26 judicial districts across the country. During that same period, Ward collected more than $1 million from his clients who paid for his illegal foreclosure-delay services.
The indictment was announced by 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, Acting Assistant Director in Charge Timothy Delaney of the FBI’s Los Angeles Field Office, and Christy Romero, Deputy Special Inspector General for the Troubled Asset Relief Program (SIGTARP).
“Today’s charges underscore our commitment to relentlessly pursue those who prey on the vulnerabilities of distressed homeowners to defraud lenders and pad their own pockets,” said Assistant Attorney General Breuer. “As this case illustrates, we will not stop pursuing them, no matter where they are, and no matter how long it takes.
“Con artists who seek to victimize homeowners in distress are truly shameless,” said U.S. Attorney for the Central District of California André Birotte Jr. “The long arm of the law can and will find and reach such financial pirates wherever they hide, and we will be tireless in our pursuit of justice for the people they victimize.”
“Ward was on the lam for 12 years running from earlier charges of bankruptcy fraud, and it’s time he answered for his alleged conduct,” said Christy Romero, Special Inspector General at SIGTARP. “In order to advance his scheme, from at least July 2007 until the time of his arrest in Canada in April, Ward allegedly stole the identities of unsuspecting U.S. taxpayers already in the dire straits of bankruptcy proceedings and exploited civil protections under bankruptcy law to defraud lenders, including multiple TARP recipients, and distressed homeowners facing foreclosure. SIGTARP and our partners in law enforcement will continue to hold accountable those responsible for all fraud related to TARP.”
“Mr. Ward’s fugitive odyssey is over, in large part thanks to our Canadian law enforcement partners,” said Timothy Delaney, Acting Assistant Director in Charge of the FBI’s Los Angeles Field Office. “The charges against Mr. Ward tell a disturbing tale of avarice whereby scores of homeowners facing foreclosure were further victimized. The FBI will continue to work with our partners at SIGTARP and at the U.S. Attorney’s Office to tackle this reprehensible crime problem facing Americans.”
The crime of bankruptcy fraud carries a maximum sentence of five years in prison. Mail fraud carries a maximum sentence of 30 years in prison. Each aggravated identity theft charge carries a two-year mandatory, consecutive sentence.
This case is being prosecuted by Trial Attorney Paul Rosen of the Fraud Section in the Justice Department’s Criminal Division and Assistant U.S. Attorney Evan Davis of the U.S. Attorney’s Office for the Central District of California. The investigation was conducted by the SIGTARP and the FBI, which received substantial assistance from the U.S. Trustee’s Office.
This prosecution 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.
Owner of Pavement Painting Business Pleads Guilty in Alaska<br /> to Illegally Disposing Hazardous WasteRead the Press Release
WASHINGTON – William Duran Vizzerra Jr. pleaded guilty today to illegally disposing of hazardous waste, a felony criminal offense, at a storage lot in Anchorage, Alaska, announced Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division, and Karen L. Loeffler, U.S. Attorney for the District of Alaska.
According to the plea agreement filed in U.S. District Court in the District of Alaska, Vizzerra was the president, director and part-owner of Precision Pavement Markings Inc. (PPMI), a road and parking lot painting and striping business that operated from a storage lot in Anchorage from at least 2006 through 2009. Vizzerra used the storage lot to store hazardous waste, including methyl methacrylate paint and toluene that was used to flush the paint lines, nozzles and sprayers used in his business. Having made no attempts to properly dispose of the waste, on approximately Nov. 1, 2009, Vizzerra illegally abandoned approximately 321 55-gallon drums, 179 five-gallon pails and two 200-gallon totes of hazardous waste. The waste, totaling 204,750 pounds, was determined to be hazardous because it was extremely flammable.
In November 2010, a citizen reported the abandoned drums to the U.S. Environmental Protection Agency (EPA). EPA Criminal Investigation Division Agents observed several hundred 55-gallon drums and smaller containers at the storage lot, some of which were stacked two-high on a trailer and some of which were stored directly on the ground. Many of the drums were marked “waste” or held hazardous markings, such as “flammable” or “flammable liquid.” Many were rusted and in decrepit condition or bulging. The investigation revealed that some of the drums were from a prior pavement business of Vizzerra’s that had dissolved several years earlier.
Under the Resource Conservation and Recovery Act, hazardous waste, due to its dangerous qualities, may only be disposed of at a licensed treatment, storage or disposal facility. The storage lot Vizzerra used was neither equipped nor permitted for the disposal of hazardous waste. Yet, knowing this, Vizzerra illegally abandoned and disposed of the waste at the lot, which cost his landlord $380,877.60 to clean up and properly dispose of the waste.“The illegal disposal of hazardous waste puts everyone in our community at risk,” said U.S. Attorney Loeffler. “The defendant in this case knowingly abandoned hundreds of barrels of toluene and other dangerous and highly flammable chemicals. We are fortunate that this dangerous situation was reported, and that the EPA responded to insure that the waste was removed and nobody was hurt. The U.S. Attorney’s Office for the District of Alaska is committed to actively prosecuting environmental crimes for the protection of all Alaskans.”
“By first neglecting and then abandoning hazardous chemicals at his place of business, Vizzera's actions put both people and the environment at risk," said Tyler Amon, Special Agent in Charge of EPA's criminal enforcement program in the Northwest. “Adding insult to injury, he then saddled an innocent property owner and taxpayers with a total cleanup cost approaching half a million dollars. Our message in this matter is clear: if you fail to manage hazardous waste safely and responsibly, you will be investigated and prosecuted.”
The maximum penalties for knowingly disposing of hazardous waste include five years of incarceration and a fine of $50,000 per day of violation. U.S. District Court Judge Ralph R. Beistline set Vizzerra’s sentencing for Nov. 14, 2012.
The investigation was conducted by the EPA’s Criminal Investigation Division. The case was prosecuted by the Environmental Crimes Section of the Justice Department, the U.S. Attorney’s Office for the District of Alaska, and the Regional Criminal Enforcement Counsel for the Environmental Protection Agency’s Region 10 in Seattle.
Georgia Tax Return Preparer Pleads Guilty to Stolen Identity Refund Fraud CrimesRead the Press Release
A tax return preparer from Macon, Ga., pleaded guilty Thursday to filing a false claim for tax refund, theft of government money and aggravated identity theft, the Justice Department and the Internal Revenue (IRS) announced.
According to court documents, Willie C. Grant is a former tax return preparer who used many of his former clients’ names and Social Security numbers to file false federal income returns in their names and without their knowledge. On these tax returns, Grant intentionally claimed false tax refunds and directed the IRS either to electronically deposit the false refunds into his personal or business bank accounts or to issue paper refund Treasury checks which he then cashed or deposited into his personal or business bank accounts. Grant spent the proceeds of his false refund scheme on personal items including expensive cars and personal living expenses.
Court documents further established that from 2003 through 2008, Grant owned and operated a tax return preparation business, Grant Income Tax Bookkeeping and Check Cash (GIT) out of his home in Macon, eventually closing GIT in 2009. During calendar years 2006 through 2009, Grant prepared and filed false tax returns in the names of unsuspecting individuals. Many of the individuals were elderly or disabled former clients of GIT or deceased individuals. Grant admitted that that he abused his position of private trust as a professional paid tax preparer in committing his crimes.
Grant faces a potential maximum sentence of 17 years in prison and a fine of up to $500,000. U.S. District Court Chief Judge C. Ashley Royal, who is presiding over this matter, set a sentencing date of Oct. 30, 2012.
The case was investigated by special agents of IRS – Criminal Investigation, and is being prosecuted by Trial Attorneys Charles M. Edgar, Jr. and Justin K. Gelfand of the Justice Department’s Tax Division.
Department of Justice, Federal Trade Commission to Hold Workshop on “Most-Favored-Nation” ClausesRead the Press Release
WASHINGTON – The Department of Justice and the Federal Trade Commission (FTC) announced today that they will hold a joint public workshop on most-favored-nation clauses (MFNs) on Sept.10, 2012, to explore the use of MFN clauses and the implications for antitrust enforcement and policy.
The most commonly used MFN provisions guarantee a customer that it will receive prices that are at least as favorable as those provided to other buyers of the same seller, for the same products or services. Although at times employed for benign purposes, MFNs can under certain circumstances present competitive concerns. This is because they may, especially when used by a dominant buyer of intermediate goods, raise other buyers’ costs or foreclose would-be competitors from accessing the market. Additionally, MFNs can facilitate collusion and stabilize coordinated pricing among sellers.
The workshop will offer an opportunity for businesses, academics, economists, lawyers and other interested parties to consider the use of MFNs and the legal and economic analyses of these provisions. The workshop will consist of a series of panels examining, among other topics, the legal treatment of MFNs, economic theories concerning MFNs and why they are used, and industry experiences with MFNs. Panelists for the workshop will include private attorneys, economists and industry representatives.
The Department of Justice and the FTC are interested in receiving comments on MFNs, and will accept written submissions from the public before the workshop and until Oct.10, 2012, 30 days after the event. Interested parties may submit public comments to [email protected]. Submitted comments will be made publicly available on the Department of Justice and FTC websites.
The all-day workshop is free and open to the public. Individuals are encouraged, but not required, to register in advance for the workshop by sending an email to [email protected]. Please include “RSVP” in the subject line. Seating will be on a first-come, first-serve basis.
The workshop will take place at the FTC's satellite conference center at 601 New Jersey Ave., NW, Washington, DC from 9:00 a.m. to 5:30 p.m. ET on Sept. 10, 2012. It will include the following panels and presentations:Economic Theories of MFNs: Harms and Efficiencies
Presenters
Jonathan Baker, Professor of Law, American University Washington College of Law
Judith A. Chevalier, William S. Beinecke Professor of Finance and Economics, Yale School of ManagementModerators
Robert Majure, Economics Director of Enforcement, Antitrust Division, U.S. Department of Justice
Daniel O’Brien, Senior Economic Policy Advisor, Federal Trade Commission
Empirical Evidence on Effects of MFNs
Presenter
Ramsey Shehadah, Senior Vice President, NERA Consulting
Panel
Jonathan Baker, Professor of Law, American University Washington College of Law
Judith A. Chevalier, William S. Beinecke Professor of Finance and Economics,Yale School of ManagementRamsey Shehadah, Senior Vice President, NERA Economic Consulting
Moderators
Robert Majure, Economics Director of Enforcement, Antitrust Division, U.S. Department of Justice
Daniel O’Brien, Senior Economic Policy Advisor, Federal Trade Commission
Legal Treatment of MFNs
Panel
Doug Anderson, Of Counsel, Bailey Cavalieri LLC
Andrew I. Gavil, Incoming Director, Office of Policy Planning, Federal Trade Commission
Elai Katz, Partner, Cahill, Gordon & Reindel LLP
Janet L. McDavid, Partner, Hogan Lovells
Moderator
Peter J. Levitas, Deputy Director, Bureau of Competition, Federal Trade Commission
Lunchtime Speech: Nelson Jung, Director, Markets and Projects, U.K. Office of Fair Trading
MFNs: From Theory to the Real World
Panel
W. Thomas McGough Jr., Senior Vice President & Chief Legal Officer, University of Pittsburgh Medical Center
Murray N. Ross, Ph.D., Vice President & Director, Institute of Health Policy, Kaiser Permanente
Melissa A. Scanlan, Director, Legal Affairs, T-Mobile USA, Inc
John Thorne, Partner, Kellogg, Huber, Hansen, Todd, Evans & Figel PLLC
Mark D. Whitener, Senior Counsel, General Electric Co.
Moderator
Martha S. Samuelson, President & CEO, Analysis Group Inc.
Moving Forward – How Has Thinking about MFNs Evolved and Where Might It Go?
Panel
David I. Gelfand, Partner, Cleary, Gottlieb, Steen & Hamilton LLP
Jonathan M. Jacobson, Partner, Wilson, Sonsini, Goodrich & Rosati
Joseph Kattan, Partner, Gibson, Dunn & Crutcher LLP
Steven C. Salop, Professor of Law, Georgetown University Law Center
Moderator
Renata Hesse, Deputy Assistant Attorney General for Civil Enforcement, Antitrust Division, U.S. Department of Justice
Directions to the FTC’s Conference Center are available at http://www.ftc.gov/bcp/workshops/transportationguide.shtml.
Reasonable accommodations for people with disabilities are available upon request. Requests should be submitted via email to [email protected] or by calling Samantha Konstandt at 202-326-3348. Requests should be made in advance. Please include a detailed description of the accommodation needed, and provide contact information.
Press contacts:
Department of Justice
Office of Public Affairs
Gina Talamona
202-514-2007
Federal Trade Commission
Office of Public Affairs
Peter Kaplan
202-326-2334
Court Approves Consent Order in Long-Standing LouisianaSchool Desegregation CaseRead the Press Release
The U.S. District Court for the Western District of Louisiana has approved a consent order in United States v. West Carroll Parish School Board , a long-standing school desegregation case, the Justice Department announced. The consent decree comes after an in-depth review by the department of the West Carroll Parish School District's compliance with its outstanding desegregation obligations.
The consent order, which the court approved without modifications, declared the school system unitary in all areas of its operation except for student assignment, which includes issues related to student discipline.
To address the outstanding issues and achieve full unitary status, the school system agreed to immediately close one of its schools. Additionally, they are also required to address racial disparities in student discipline by adopting a revised student discipline policy, conduct a comprehensive training for all of its administrators, teachers and staff who are responsible for student discipline and adopt a process for monitoring student discipline data.
“We are pleased the court approved the consent order and that the West Carroll Parish School Board was willing to reach an agreement on this important case,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “We look forward to working closely with the school system as it continues to enact policies and practices that create a safe and inclusive environment for all students.”
The enforcement of Title IV of the Civil Rights Act of 1964 in school districts is a top priority of the Justice Department’s Civil Rights Division. Additional information about the Justice Department’s Civil Rights Division is available on its website at www.justice.gov/crt .
Thursday 16 August 2012
Yazaki Executive Agrees to Plead Guilty to Price Fixing on Automobile Parts Installed in U.S. CarsRead the Press Release
WASHINGTON – An executive of Tokyo-based Yazaki Corporation has agreed to plead guilty for his role in a conspiracy to fix prices of instrument panel clusters, also known as meters, installed in cars sold in the United States and elsewhere, the Department of Justice announced today. He is the 11th executive to be charged in the government’s ongoing investigation into price fixing and bid rigging in the auto parts industry.
In a one-count felony charge filed today in the U.S. District Court for the Eastern District of Michigan in Detroit, Toshio Sudo, a Japanese national, was charged with engaging in a conspiracy to rig bids for, and to fix, stabilize and maintain the prices of instrument panel clusters sold to customers in the United States and elsewhere. According to the charge, Sudo’s involvement in the conspiracy lasted from at least as early as January 2003 until at least February 2009. The department said that Sudo and his co-conspirators carried out the conspiracy by agreeing, during meetings and conversations, to allocate the supply of instrument panel clusters and sold the parts at noncompetitive prices to automakers in the United States and elsewhere.
According to the plea agreement, which is subject to court approval, Sudo has agreed to serve 14 months in a U.S. prison, to pay a $20,000 criminal fine and to cooperate with the department’s investigation.
Yazaki manufactures and sells a variety of automotive parts, including instrument panel clusters. Instrument panel clusters are the mounted array of instruments and gauges housed in front of the driver of an automobile. According to the charge, Sudo and his co-conspirators carried out the conspiracy by, among other things, agreeing during meetings and discussions to coordinate bids submitted to, and price adjustments requested by, automobile manufacturers.
“From using code names with one another, to meeting in remote or private locations, the conspirators employed a variety of measures to keep their illegal conduct secret,” said Scott D. Hammond, Deputy Assistant Attorney General of the Antitrust Division’s criminal enforcement program. “The division and its law enforcement partners will continue to do everything in our power to detect these cartels and bring them to justice.”
“The conspiracies to fix prices and rig bids in the automotive industry represent a serious crime against the United States. Car makers and car buyers pay the price for these illegal activities,” said Robert D. Foley III, Special Agent in Charge of the FBI’s Detroit Field Office. “The FBI is committed to vigorously pursuing and stopping those who commit these crimes.
Including Sudo, seven companies and 11 executives have been charged in the department’s ongoing investigation into price fixing and bid rigging in the auto parts industry. Furukawa Electric Co. Ltd, DENSO Corp., Yazaki Corp., G.S. Electech Inc., Fujikura Ltd. and Autoliv Inc. pleaded guilty and were sentenced to pay a total of more than $785 million in criminal fines. TRW Deutschland Holding GmbH has agreed to plead guilty. Additionally, seven of the individuals – Junichi Funo, Hirotsugu Nagata, Tetsuya Ukai, Tsuneaki Hanamura, Ryoki Kawai, Shigeru Ogawa and Hisamitsu Takada – have been sentenced to pay criminal fines and to serve jail sentences ranging from a year and a day to two years each. Makoto Hattori and Norihiro Imai have pleaded guilty and await sentencing. Kazuhiko Kashimoto is scheduled to plead guilty on Sept. 26, 2012.
Sudo is charged with price fixing in violation of the Sherman Act, which carries a maximum sentence for individuals of 10 years and a fine of $1 million. The maximum fine for an individual may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.
Today’s prosecution arose from an ongoing federal antitrust investigation into price fixing, bid rigging and other anticompetitive conduct in the automotive parts industry, which is being conducted by the Antitrust Division’s National Criminal Enforcement Section and the FBI’s Detroit Field Office with the assistance of the FBI headquarters’ International Corruption Unit. Anyone with information concerning the focus of this investigation is urged to call the Antitrust Division’s National Criminal Enforcement Section at 202-307-6694, visit www.justice.gov/atr/contact/newcase.htm, or call the FBI’s Detroit Field Office at 313-965-2323.
Justice Department Settles Race Discrimination Case Against Pennsylvania Country ClubRead the Press Release
The Justice Department announced today that it has reached a settlement agreement with Valley Club, a former swimming facility located in Huntingdon Valley, Pa, resolving allegations that the company discriminated against persons because of race. The Justice Department’s investigation was conducted under Title II of the Civil Rights Act of 1964, which prohibits discrimination on the basis of race, color, national origin and religion in places of public accommodation, such as hotels, restaurants and places of entertainment.
The settlement agreement, which must be approved by the Bankruptcy Court for the Eastern District of Pennsylvania, also resolves A.B., et al. v. The Valley Club of Huntingdon Valley, PA , a private suit filed by the children and their families, as well as discrimination claims filed with the Pennsylvania Human Relations Commission (PHRC) under the Pennsylvania Human Relations Act. The Chief Magistrate Judge of the District Court for the Eastern District of Pennsylvania approved the settlement agreement after formal mediation efforts. The department investigated this matter jointly with the Pennsylvania Human Relations Commission.
In January 2010, the department filed a complaint following an incident at the Valley Club in June 2009. Creative Steps Inc. a Northeast Philadelphia children’s day camp, had paid the club a fee to give its campers access to the club’s swimming pool for the summer. On the first day they swam, the children reported hearing racial slurs while enjoying the pool. On July 3, 2009, the club refunded the day camp’s membership fee and prohibited the children from returning to swim.
“No one may be denied the right to use a swimming pool because of their race or the color of their skin,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The Justice Department will continue to protect vigorously the rights of persons of all races to be free from discrimination in public accommodations across the country.”
Valley Club filed for Chapter 7 Bankruptcy protection in November 2009. The club property was sold in June 2010 for$1,460,000. The settlement agreement stipulates that once the administration of the estate and the bankruptcy case is closed and after paying allowed costs and fees, the remaining assets will be paid to more than 50 children, their camp counselors and to Creative Steps.
“This settlement provides significant opportunity to children who were denied an opportunity based on their skin color,” said JoAnn Edwards, executive director of the Pennsylvania Human Relations Commission. “Our hope is that this case serves as prevention for years to come and a reminder that discrimination is illegal, and has no place in Pennsylvania.”
The settlement also provides that $65,000 will be set aside from the proceeds of the sale of the Valley Club property for the creation of a leadership council that comprises former Valley Club members, Creative Steps counselors, campers and their families. The children and families affected by the Valley Club incident will take leadership roles in planning swimming, educational and recreational opportunities for the community.
More information about the Civil Rights Division and the laws it enforces is available at www.justice.gov/crt . Persons who believe they have experienced or witnessed unlawful discrimination in public accommodations may contact the Housing and Civil Enforcement Section at (202) 514-4713.
Justice Department Requires Changes to Verizon-Cable Company Transactions to Protect Consumers, Allows Procompetitive Spectrum Acquisitions to Go ForwardRead the Press Release
The Department of Justice announced today that it will require Verizon and four of the nation’s largest cable companies—Comcast, Time Warner Cable, Bright House Networks and Cox Communications—to make changes to a series of agreements concerning both the sale of bundled wireless and wireline services, and the formation of a technology research joint venture. The department said that, if left unaltered, the agreements would have harmed competition by diminishing the companies’ incentive to compete, resulting in higher prices and lower quality for consumers. The announcement came after a closely coordinated investigation with the Federal Communications Commission (FCC), with additional assistance provided by the New York State Attorney General’s Office.
The department also said that it would allow both Verizon’s proposed acquisitions of spectrum from the cable companies and T-Mobile USA’s contingent purchase of a significant portion of that spectrum from Verizon to go forward. The department said that the spectrum transactions facilitate active use of an important national resource and thereby promise substantial benefit to wireless consumers. The transactions remain subject to review by the FCC, which is expected to release a separate statement regarding the status of its review of the transactions.
“By limiting the scope and duration of the commercial agreements among Verizon and the cable companies while at the same time allowing Verizon and T-Mobile to proceed with their spectrum acquisitions, the department has provided the right remedy for competition and consumers,” said Joseph Wayland, Acting Assistant Attorney General in charge of the Department of Justice's Antitrust Division. “ The Antitrust Division’s enforcement action ensures that robust competition between Verizon and the cable companies continues now and in the future as technological change alters the telecommunications landscape.”
The department’s Antitrust Division, joined by the New York State Attorney General’s Office, filed a civil antitrust lawsuit today in the U.S. District Court for the District of Columbia to prevent Verizon, Comcast, Time Warner Cable, Bright House Networks and Cox Communications from enforcing a series of commercial agreements. At the same time, the department filed a proposed settlement that, if approved by the court, would resolve the concerns alleged in the lawsuit.
The department said the proposed settlement protects competition and consumers by removing provisions that would lessen the companies’ incentives to compete aggressively in the areas where Verizon’s FiOS services offer a critical competitive alternative to the cable companies’ video and broadband products. The proposed settlement also limits the duration of the companies’ collaboration to December 2016 in important respects, ensuring that they retain incentives to compete against one another .
In December 2011, Verizon Wireless agreed to acquire a significant portfolio of wireless spectrum licenses from a consortium of cable companies—spectrum that today is unused. In June 2012, Verizon Wireless reached an agreement to transfer a significant amount of that spectrum to T-Mobile USA, the smallest of the four nationwide mobile wireless competitors. Verizon Wireless has also announced a public process to sell other previously unused spectrum.
At the same time they entered into the spectrum transactions, Verizon and the cable companies entered into a series of commercial agreements that require the companies to sell each other’s products and create an exclusive technology research joint venture.
Verizon and the cable companies are direct competitors in many local markets throughout the United States where Verizon offers video, voice and broadband service. The series of commercial agreements between Verizon and the cable companies would have threatened this competition. The series of commercial agreements between Verizon and the cable companies would have threatened this competition. Most notably, the agreements, as originally structured, would have required Verizon Wireless to sell the cable companies’ services on an “equivalent basis” with FiOS where FiOS is available, thereby reducing Verizon’s ability and incentive to sell its own services aggressively.
The agreements also create a new technology research joint venture through which Verizon Wireless, Comcast, Time Warner Cable and Bright House Networks would collaborate to develop new technologies that integrate wireless and wireline products. The department’s complaint alleges that the potentially unlimited duration of this collaboration is unreasonable and could threaten long-term competition, and also alleges that certain restrictions in the agreements unnecessarily hinder the ability of the companies to innovate outside the joint venture.
The proposed settlement forbids Verizon Wireless from selling cable company products in FiOS areas and removes contractual restrictions on Verizon Wireless’s ability to sell FiOS, ensuring that Verizon’s incentives to compete aggressively against the cable companies remain unchanged. In addition, under the proposed settlement, Verizon Wireless’s ability to resell the cable companies’ services to customers in areas where Verizon sells DSL Internet service ends in December of 2016 (subject to potential renewal at the department’s sole discretion), thereby preserving Verizon’s incentives to reconsider its decision to stop building out its FiOS network and otherwise innovate in its DSL territory. Finally, the proposed settlement limits the duration of the technology joint venture and other features of the agreements, ensuring that the agreements will not dampen the companies’ incentives to compete against one another going forward.
The proposed settlement also requires the commercial agreements to be amended so that:
· Verizon retains the ability to sell bundles of services that include DSL, Verizon Wireless and the video services of a direct broadcast satellite company (i.e., DirecTV or Dish Network);
· After five years, the cable companies are no longer barred from selling the wireless services of Verizon Wireless’s competitors, and may partner with other wireless providers;
· The cable companies can elect to resell Verizon Wireless services using their own brand at any time as provided for under the amended agreements; and
· U pon dissolution of the technology joint venture, all members receive a non-exclusive license to all the joint venture’s technology, and each may then choose to sublicense to other competitors.
The settlement also forbids any form of collusion and restricts the exchange of competitively sensitive information. Verizon and the cable companies would also be required to provide regular reports to the department to ensure that the collaboration does not harm competition going forward.
Verizon Communications Inc. is a Delaware corporation headquartered in New York. Verizon’s consumer wireline segment, Verizon Telecom, is one of the nation’s largest providers of wireline telecommunications services. As of the second quarter of 2012, Verizon Telecom had more than 4 million FiOS video subscribers, more than 5 million FiOS broadband subscribers, more than 2.5 million FiOS voice telephony subscribers, and more than 3.5 million DSL broadband subscribers. Verizon Communications owns 55 percent of Cellco Partnership, which does business as Verizon Wireless, a Delaware general partnership headquartered in New Jersey. Vodafone Group Plc owns the remaining 45 percent of Verizon Wireless. Verizon Wireless is one of the nation’s largest wireless services providers, with approximately 108 million connections to its wireless voice and data services and revenues of $59 billion in 2011. Verizon Communications operates and manages Verizon Wireless.
Comcast Corporation is a Pennsylvania corporation headquartered in Philadelphia. It is one of the nation’s largest providers of wireline telecommunications services. As of the second quarter of 2012, Comcast had more than 22 million video subscribers, more than 17.5 million broadband subscribers, and more than 9 million voice telephony subscribers. Comcast had revenues of more than $27 billion from its residential broadband and video businesses in 2011.
Time Warner Cable Inc. is a Delaware corporation headquartered in New York. It is one of the nation’s largest providers of wireline telecommunications services. As of the second quarter of 2012, it had more than 12 million video subscribers, more than 10.5 million broadband subscribers, and more than 4.5 million voice telephony subscribers. Time Warner Cable had revenues of more than $15 billion from its residential broadband and video businesses in 2011.
Bright House Networks LLC is a privately held Delaware limited liability company headquartered in New York. As of March 2012, it was the 10th largest provider of video programming distribution, and also provides broadband and voice services. Bright House Networks derived billions of dollars in revenues from its residential broadband and video businesses in 2011.
Cox Communications Inc. is a privately held Delaware corporation headquartered in Georgia. It is a large multi-state provider of wireline telecommunications services. As of March 2012, it was the fifth largest video programming distributor, and also sells broadband and voice services. Cox derived billions of dollars in revenues from its residential broadband and video businesses in 2011.
T-Mobile USA, is a Delaware corporation headquartered in Bellevue, Wash. T-Mobile is the fourth-largest mobile wireless telecommunications services provider in the United States as measured by subscribers, and serves approximately 33.2 million wireless connections to wireless devices. In 2011, T-Mobile earned mobile wireless telecommunications services revenues of $18.5 billion. T-Mobile is a wholly-owned subsidiary of Deutsche Telekom AG.
As required by the Tunney Act, the proposed 10-year settlement, along with the department's 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 Lawrence M. Frankel, Assistant Chief, Telecommunications & 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 enter the proposed settlement upon finding that it is in the public interest.
Related Materials:
Competitve Impact Statement
Complaint
Proposed Final Judgment
Stipulation and OrderArizona Man Sentenced to More Than 15 Years in Prison<br /> <br /> in Money Laundering and Tax SchemeRead the Press Release
Gino Carlucci was sentenced to 188 months in prison for his role in conspiracies to commit money laundering and to defraud the Internal Revenue Service (IRS), and for filing a false income tax return, the Justice Department and the IRS announced today. On July 25, 2011, a federal jury in Phoenix convicted Carlucci of both conspiracies and the tax crime after an eight-day trial.
According to the evidence presented at trial, Carlucci and his co-defendant, Wayne Mounts, stole large sums of money and assets from Joseph Flickinger, a tax return preparer in Ohio who had himself defrauded multiple clients of their life savings in a fraudulent investment scheme. Flickinger pleaded guilty to federal charges in a separate case and was sentenced to 70 months in prison. After defrauding Flickinger of the money, Carlucci and Mounts devised a scheme to have Flickinger arrested by federal officials, and then used the money for their own personal benefit. In addition to money, Carlucci and Mounts defrauded Flickinger out of several high-end vehicles and a condo near Lake Erie, Ohio, which they quickly sold for $210,000. Carlucci had some of the funds transferred into bank accounts held in the name of his wife and father-in-law. Carlucci’s wife and Mounts withdrew more than $300,000 in cash over several months in increments of $10,000 or less so that they could avoid having the bank report their withdrawals to authoritiesCarlucci and Mounts spent an additional $150,000 of the funds to buy a 43-foot luxury boat whose existence Carlucci concealed from the government for over two years.
“This sentence demonstrates that those who would hide assets and income from the IRS using phony identifications and bogus documents, all for the purpose of enriching themselves, will be properly punished for their crimes,” said Kathryn Keneally, Assistant Attorney General for the Justice Department’s Tax Division.
“Today, Mr. Carlucci was held accountable for his criminal behavior,” said Richard Weber, Chief IRS Criminal Investigation. “He's nothing more than a con man motivated by greed. His sentencing is a victory for honest taxpaying citizens.”
Chief Judge Kathryn H. Vratil of the U.S. District Court for the District of Kansas, sitting in Phoenix by special designation, ordered Carlucci to pay $893,716 in restitution to the victims in Flickinger’s case and to the IRS. Judge Vratil further entered a forfeiture order against Carlucci for a money judgment in the amount of $722,841.00. Before trial, the government seized over $155,000 of the funds from Carlucci and Mounts, as well as a new truck Carlucci bought with the funds and the 43 foot boat. Carlucci was detained pending sentencing following the guilty verdict in July 2011. After trial, the government seized many of his remaining assets that he was hiding, including another 39 foot boat, a Chevrolet truck, two Sea Doo personal watercraft vehicles, trailers, three all-terrain vehicles and two vitamin encapsulation machines that he used for one of his businesses. Mounts was sentenced in January 2012 to 63 months in prison.
Assistant Attorney General Keneally commended the joint efforts from the special agents from IRS Criminal Investigation in Ohio and Arizona who investigated the case as well as Tax Division Trial Attorneys Richard Rolwing, Hayden Brockett, and Monica Edelstein, who prosecuted the case. Assistant Attorney General Keneally also thanked the U.S. Attorney’s Office for the District of Arizona for their assistance in this matter.
Additional information about the Justice Department’s Tax Division and its enforcement efforts is available at www.usdoj.gov/tax/.
Alabama Man Indicted in a Stolen Identity Refund Fraud ConspiracyRead the Press Release
A federal grand jury in Montgomery, Ala., returned an indictment charging Quentin Collick for conspiring to file false tax returns using stolen identities, theft of public funds, and aggravated identity theft, the Justice Department and the Internal Revenue Service (IRS) announced today.
According to the indictment, between January 2011 and April 2012, Collick conspired with others to file false tax returns using stolen identities. He obtained stolen identities and obtained mailing addresses to which the fraud proceeds would be sent. Collick collected several federal tax refund checks sent to one of those addresses. He then caused those checks to be cashed.
An indictment merely alleges that crimes have been committed, and the defendant is presumed innocent until proven guilty beyond a reasonable doubt. If convicted, Collick faces maximum potential sentence of 10 years in prison for the conspiracy to file false claims, 10 years for each theft of government funds count, and a mandatory 2-year sentence for the aggravated identity theft counts. He is also subject to fines and mandatory restitution if convicted.
The case was investigated by special agents of IRS - Criminal Investigation. Trial Attorneys Jason H. Poole and Michael Boteler of the Justice Department’s Tax Division and Assistant U.S. Attorney Todd Brown are prosecuting the case.
Additional information about the Tax Division and its enforcement efforts may be found at www.justice.gov/tax.
Wednesday 15 August 2012
Six Indicted in Alabama in Million-dollar Conspiracy<br /> <br /> to Use Stolen Identities to Obtain Tax RefundsRead the Press Release
A federal grand jury in Montgomery, Ala., returned a superseding indictment charging Antoinette Djonret, Angelique Djonret, Tabitha Stinson, Melba Wilson, Chantresa Hayes and Corey Means with conspiring to file false tax returns using stolen identities, the Justice Department and the Internal Revenue Service (IRS) announced today. The 49-count indictment charges Djonret with filing false claims, theft of government funds, access device fraud, aggravated identity theft and possession of unauthorized access devices. Angelique Djonret is also charged with filing false claims, theft of government funds and aggravated identity theft. Corey Means and Chantresa Hayes are charged with theft of government funds.
Antoinette Djonret had earlier been charged with making false claims in a criminal complaint that was filed on February 22, 2012, and in an indictment that was filed on March 28, 2012. According to court documents, Antoinette Djonret obtained stolen identities from state of Alabama databases. Antoinette Djonret and her sister, Angelique Djonret, filed false tax returns using the stolen identities and directed the false tax returns to prepaid debit cards. Many of the tax returns were filed from Antoinette Djonret’s residence. The superseding indictment further alleges that each of the six defendants recruited individuals to purchase prepaid debit cards and to provide the cards to the defendants. They then had the tax refunds deposited onto the cards. In total, the defendants filed over 800 false tax returns and requested over $1.2 million in tax refunds.
An indictment merely alleges that crimes have been committed, and the defendant is presumed innocent until proven guilty beyond a reasonable doubt. If convicted, the defendants face maximum potential prison terms of 10 years for the conspiracy to file false claims, 5 years for each false claims count, 10 years for each theft of government funds count, 15 years for access device fraud count, 10 years for the possession of unauthorized access devices count, and a mandatory 2-year term for the aggravated identity theft counts. The defendants are also subject to fines and mandatory restitution if convicted.
The case was investigated by special agents of the IRS - Criminal Investigation. Trial attorneys Jason H. Poole and Michael Boteler of the Justice Department’s Tax Division, and Assistant United States Attorney Todd Brown are prosecuting the case.
Additional information about the Tax Division and its enforcement efforts may be found at www.justice.gov/tax .
Second Former Georgia Corrections Officer Pleads Guilty to Conspiring with Other Officers to Assault and Injure InmatesRead the Press Release
Darren Douglass-Griffin, 35, a former member of the Correctional Emergency Response Team (CERT) at Macon State Prison (MSP) in Oglethorpe, Ga., pleaded guilty to a two-count bill of information charging him with conspiracy to violate the civil rights of inmates and falsification of records in a federal investigation, the Justice Department and the U.S. Attorney for the Middle District of Georgia announced today.
In connection with his guilty plea, Douglass-Griffin admitted that he and other correctional officers assaulted and injured inmates in a series of incidents at the prison in 2010. Douglass-Griffin indicated that correctional officers beat three inmates in separate incidents in order to punish them. One inmate was beaten so severely that he had to be transported from the prison in an ambulance.
Douglass-Griffin further acknowledged that he and other correctional officers tried to cover up MSP officers’ involvement in beating and injuring inmates. Douglass-Griffin stated that other MSP officers told him to write false reports and to stick to their cover story when speaking with investigators.
Douglass-Griffin faces a maximum penalty of 25 years in prison.
“The Justice Department will continue to vigorously prosecute correctional officers who violate the constitutional rights of inmates, and use their official position to try to cover up their crimes,” said Assistant Attorney General for the Civil Rights Division Thomas E. Perez.
“We expect the men and women who work in our state prisons to exemplify professionalism and integrity – and the vast majority do,” said Michael J. Moore, U.S. Attorney for the Middle District of Georgia. “But when a small group of guards violate the civil rights of inmates in the facility and then actively try to cover that up, my office will have no tolerance for their conduct.”
This case is being investigated by the FBI and is being prosecuted by Special Litigation Counsel Forrest Christian and Trial Attorney Tona Boyd of the Civil Rights Division of the U.S. Department of Justice, with the assistance of the U.S. Attorney’s Office for the Middle District of Georgia and the Georgia Bureau of Investigation.
Northern California Real Estate Investor Agrees to Plead Guilty to Bid Rigging at Public Foreclosure AuctionsRead the Press Release
A Northern California real estate investor has agreed to plead guilty for her role in conspiracies to rig bids and commit mail fraud at public real estate foreclosure auctions in Northern California, the Department of Justice announced.
Felony charges were filed today in the U.S. District Court for the Northern District of California in Oakland against Danli Liu of Fremont, Calif.
To date, as a result of the department’s ongoing antitrust investigation into bid rigging and fraud at public real estate foreclosure auctions in Northern California, 25 individuals, including Liu, have agreed to plead or have pleaded guilty.
According to court documents, Liu conspired with others not to bid against one another, but instead to designate a winning bidder to obtain selected properties at public real estate foreclosure auctions in Alameda County, Calif. Liu was also charged with a conspiracy to use the mail to carry out a scheme to fraudulently acquire title to selected properties sold at public auctions, to make and receive payoffs, and to divert money to co-conspirators that would have gone to mortgage holders and others by holding second, private auctions open only to members of the conspiracy. The department said that the selected properties were then awarded to the conspirators who submitted the highest bids in the second, private auctions. The private auctions often took place at or near the courthouse steps where the public auctions were held.
The department said Liu conspired with others to rig bids and commit mail fraud at public real estate foreclosure auctions in Alameda County beginning as early as April 2009 and continuing until about March 2010.
“Liu and her fellow conspirators secretly conspired to purchase foreclosed real estate at suppressed prices, thereby restraining competition at these foreclosure auctions in Northern California,” said Scott D. Hammond, Deputy Assistant Attorney General of the Antitrust Division’s criminal enforcement program. “The conspirators’ actions harmed lenders and distressed homeowners in an already struggling real estate market, and the division is committed to holding investors accountable for such behavior.”
The department said that the primary purpose of the conspiracies was to suppress and restrain competition and to conceal payoffs in order to obtain selected real estate offered at Alameda County public foreclosure auctions at non-competitive prices. When real estate properties are sold at these auctions, the proceeds are used to pay off the mortgage and other debt attached to the property, with remaining proceeds, if any, paid to the homeowner. According to court documents, these conspirators paid and received money that otherwise would have gone to pay off the mortgage and other holders of debt secured by the properties, and, in some cases, the defaulting homeowner.
“The FBI and the Antitrust Division will continue to bring to justice those who engage in fraudulent anticompetitive practices at foreclosure auctions,” said Stephanie Douglas, FBI Special Agent in Charge of the San Francisco Field Office. “We will hold those individuals accountable for the damage they have done to their victims and the real estate market.”
A violation of the Sherman Act carries a maximum penalty of 10 years in prison and a $1 million fine for individuals. The maximum fine for the Sherman Act charges may be increased to twice the gain derived from the crime or twice the loss suffered by the victim if either amount is greater than $1 million. A count of conspiracy to commit mail fraud carries a maximum sentence of 30 years in prison and a $1 million fine. The government can also seek to forfeit the proceeds earned from participating in the conspiracy to commit mail fraud.
The charges today are the latest cases filed by the department in its ongoing investigation into bid rigging and fraud at public real estate foreclosure auctions in San Francisco, San Mateo, Contra Costa and Alameda counties, Calif. These investigations are being conducted by the Antitrust Division’s San Francisco Office and the FBI’s San Francisco office. Anyone with information concerning bid rigging or fraud related to public real estate foreclosure auctions should contact the Antitrust Division’s San Francisco Field Office at 415-436-6660, visit www.justice.gov/atr/contact/newcase.htm or call the FBI tip line at 415-553-7400.
Today’s charges are part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
**The fraud charge(s) referenced in this press release were subsequently
dismissed on the government’s motion.**
New Zealand Fishing Company Found Guilty in Washington, D.C., of Environmental Crimes and Obstruction of JusticeRead the Press Release
WASHINGTON –A federal jury in Washington, D.C., today returned guilty verdicts against Sanford Ltd., a New Zealand fishing company, on six counts of conspiracy, obstruction of justice, and violating the Act to Prevent Pollution from Ships (APPS). The jury also found a company employee guilty of two other charges.
The verdicts, following a two-week trial in the U.S. District Court for the District of Columbia, were announced by Assistant Attorney General Ignacia S. Moreno of the Department of Justice’s Environment and Natural Resources Division and U.S. Attorney for the District of Columbia Ronald C. Machen Jr.
Judge Beryl A. Howell scheduled sentencing for Nov. 16, 2012. Sanford faces a maximum fine of up to $500,000 on each count, for a total potential penalty of $3.0 million. Sanford’s primary chief engineer, James Pogue, 52, faces up to up to 20 years for obstruction of justice and six years for knowingly failing to maintain an accurate oil record book.
According to the government’s evidence, in July 2011, the U.S. Coast Guard conducted a Port State Control examination on the Fishing Vessel (F/V) San Nikunau, when the vessel entered port in Pago Pago, American Samoa. The examination revealed that the vessel had been making false entries and omissions in its oil record book that vessels are required to maintain accurately in order to account for their handling of oil waste generated by the vessel.
According to evidence presented at trial, Sanford operates the San Nikunau a vessel that routinely delivers tuna to a cannery in Pago Pago. Over the past five years, Sanford was paid over $24 million for tuna deliveries. Sanford was convicted of numerous charges, including conspiracy and causing the vessel to enter to the port of Pago Pago with a falsified oil record book that failed to accurately account for how the vessel was managing its bilge waste and for obstruction of justice for falsely stating in the oil record book that required pollution prevention equipment had been used when it had not. Sanford was also convicted of discharging machinery space bilge waste into the port of Pago Pago without using required pollution prevention equipment including the oil water separator.
Pogue, of Idaho, served as the chief engineer on the vessel between 2001 and 2010. Pogue was convicted of failing to maintain an oil record book for the vessel that accurately accounted for how the vessel was managing its bilge waste. In addition, Pogue was convicted of obstruction of justice for falsely stating in the oil record book that required pollution prevention equipment had been used when it had not.
Prior to the trial, Rolando Ong Vano, 51, of the Philippines, another chief engineer who worked on the vessel, pleaded guilty to charges in the case. He is to be sentenced Sept. 7, 2012.“These verdicts hold a company and one of its chief engineers accountable for polluting the waters off American Samoa with oily waste, and then trying to cover up their acts,” said U.S. Attorney Machen. “The prosecution demonstrates our commitment to enforcing environmental laws and protecting our precious natural resources.”
This case was investigated by the U.S. Coast Guard and the Coast Guard Investigative Service. The case was prosecuted by Trial Attorney Kenneth E. Nelson of the Environmental Crimes Section of the Department of Justice and Assistant U.S. Attorney Frederick W. Yette of the U.S. Attorney's Office for the District of Columbia.
Italian Ship Owner and Chief Engineer Sentenced in Alabama for Crimes Related to Illegal Discharges from Cargo ShipRead the Press Release
WASHINGTON – A shipping company headquartered in Italy and the chief engineer of one of its ships were sentenced today in federal court in Mobile, Ala., for deliberately falsifying records to conceal discharges of oily wastewater from the ship directly into the sea. Giusseppe Bottiglieri Shipping Company S.P.A, was sentenced by U.S. District Court Judge Ginny Granade in the Southern District of Alabama to pay a $1 million criminal fine, serve four years of probation, and make a $300,000 community service payment to the National Fish and Wildlife Foundation. The company must also fund and implement a comprehensive environmental compliance plan during the term of probation. Chief Engineer Vito La Forgia was sentenced by Judge Granade to one month in jail.
Giuseppe Bottiglieri Shipping Company S.P.A., the owner and operator of the M/V Bottiglieri Challenger, pleaded guilty on July 11, 2012, to a violation of the Act to Prevent Pollution from Ships for failing to properly maintain an oil record book as required by federal and international law. Vito La Forgia, the ship’s chief engineer, pleaded guilty on July 12, 2012, to violating the Act to Prevent Pollution from Ships.
According to papers filed in court, between Dec. 19, 2011, and Jan. 25, 2012, Vito La Forgia and other senior Bottiglieri Shipping Company employees discharged oily bilge waste from the M/V Bottiglieri Challenger on multiple occasions as the vessel sailed from Singapore to Brazil and then from Brazil to Mobile. The vessel arrived in the Port of Mobile on Jan. 25, 2012, and underwent a Coast Guard inspection. Based on information provided to the Coast Guard by engine department crewmembers and evidence discovered during the Coast Guard’s inspection, it was evident that there were internal transfers and discharges of oily waste into the ocean that were not recorded in the vessel’s oil record book as required. The deliberate overboard discharges of oily waste were accomplished through the use of a “magic pipe” that connected the ship’s purifier sludge tank with the ship’s bilge holding tank, the contents of which were then pumped overboard without first being processed through required pollution prevention control equipment designed to detect and prevent discharges containing more than 15 parts per million oil.
Federal and international law requires that all ships comply with pollution regulations that include proper disposal of oily water and sludge by passing the oily water through a separator aboard the vessel or burning the sludge in the ship’s incinerator. Federal law also requires ships to accurately record each disposal of oily water or sludge in an oil record book and to have the record book available for the U.S. Coast Guard when the vessel is within the waters of the United States.
“This case represents a second tremendous win for our environment in just the past few months,” said Kenyen Brown, U.S. Attorney for the Southern District of Alabama. “The U.S. relies on vessel crews and their management companies to provide accurate logs and records when calling on U.S. ports to ensure oily wastes are discharged properly at sea. The U.S. is fully committed to prosecuting those cases where vessels cover-up improper oily waste discharges at sea through the use of falsified logs. Our aim is twofold, to preserve our natural resources for future generations, and second, to clean up a corrupt corporate culture that would place greed above all else. I am also pleased that my office was able to play a role in securing another $300,000 for waterway preservation and conservation projects in the Mobile Bay and throughout the Southern District of Alabama. This prosecution would not have been possible without the hard work of the U.S. Coast Guard at Sector Mobile and District Eight, Coast Guard Criminal Investigative Service, the Environmental Protection Agency Criminal Investigation Division and Department of Justice, Environmental and Natural Resources Division, Environmental Crimes Section.”
“The government will continue to work tirelessly to ensure companies and employees who do not comply with environmental regulations are held accountable for operating in a manner that harms the marine environment and endangers our nation's resources. I applaud the professionalism and dedication of the members of the Coast Guard, the Environmental Protection Agency and the Department of Justice as they investigated, prepared, and prosecuted these cases,” said Rear Admiral Roy A. Nash, Eighth Coast Guard District Commander.
“The laws are there to protect the oceans and waterways from being used as dumping grounds for waste oil or contaminated waste water,” said Maureen O'Mara, Special Agent-in-Charge of EPA’s criminal enforcement program in Atlanta. “Commercial vessels must operate safely and legally, and this sentencing sends a clear message that those who violate the law and pollute U.S. or international waters will be vigorously prosecuted.”
This investigation was conducted by the U.S. Coast Guard Investigative Service in Mobile and the U.S. Environmental Protection Agency-Criminal Investigation Division in Gulf Breeze, Fla. Additional assistance was provided by U.S. Coast Guard Sector Mobile. The case was prosecuted by Assistant U.S. Attorney Michael Anderson of the U.S. Attorney’s Office for the Southern District of Alabama and Trial Attorneys Todd Mikolop and Gary Donner of the Justice Department’s Environmental Crimes Section of the Environment and Natural Resources Division.
Federal Court in Kansas City, Kansas, Shuts Down Tax-return PreparerRead the Press Release
A federal court in Kansas City, Kan., has permanently barred Ahferom Goitom from preparing federal tax returns for others, the Justice Department announced today. The civil injunction order, to which Goitom consented without admitting the allegations against him, was signed by Judge John W. Lungstrum of the U.S. District Court for the District of Kansas. The case is one of five similar lawsuits (the others were filed in Indianapolis; Las Vegas; Chicago; and Dayton, Ohio) to shut down four of the largest Instant Tax Service franchise owners, as well as the Dayton-based corporate franchisor of the Instant Tax Service brand—ITS Financial LLC.
The government complaint in the Kansas case alleges that Goitom managed an Instant Tax Service store in Kansas City, Kan., where he prepared false and fraudulent income tax returns for others. The United States accused Goitom of forging forms W-2, filing returns improperly based on paycheck stubs rather than W-2 wage statements, fabricating income for phony businesses to obtain larger tax credits, claiming false education tax credits and filing tax returns without customer authorization. The complaint also alleges that Goitom sold false and deceptive loan products to Instant Tax Service customers.
According to the government complaint, the Instant Tax Service store Goitom managed in Kansas City is owned by his brother and co-defendant, Semere Tsehaye. The suit against Tsehaye is still pending.
In the past decade the Justice Department’s Tax Division has obtained hundreds of injunctions to stop the promotion of tax fraud schemes and the preparation of fraudulent returns. More information about these cases is available on the Justice Department website .
Related Document:
United States v. Semere Tsehaye, et al.
Stipulated Order for Permanent Injunction Against Ahferom Goitom (PDF)
Delaware Company Fined for Unlawful Discharges of Oil in Jefferson Parish, LouisianaRead the Press Release
WASHINGTON – A Delaware company was fined $557,000 for negligently discharging oil into the bayous of Jefferson Parish, La., the Department of Justice announced.
Cedyco Corporation, headquartered in Houston, was sentenced today in federal court in the Eastern District of Louisiana.
On May 23, 2012, Cedyco pleaded guilty to three counts of violating the Federal Water Pollution Control Act (Clean Water Act). The Clean Water Act makes it a misdemeanor to negligently discharge harmful quantities of oil into navigable waters of the United States.
All of the fine money will be directed to the Oil Spill Liability Trust Fund to aid the U.S. Coast Guard in responding to future oil spills. Additionally, Cedyco also agreed to cease operations and divest itself of all hydrocarbon business interests in the state of Louisiana.“We owe a debt of gratitude to the men and women of the U.S. Coast Guard along with EPA-CID and Louisiana DEQ for their continued vigilance in protecting our precious environment and water resources from companies and individuals who discharge oily waste into our waters,” said Jim Letten, U.S. Attorney for the Eastern District of Louisiana. “We will remain committed to the apprehension and punishment of these violators in defense of our environment. The protection of our precious environment is a critical mission which we take very seriously. Simply stated, we will not tolerate the negligent contamination of our waterways.”
“It’s important that we hold polluters accountable for their actions, and today's sentence does this,” said Captain Peter Gautier, Commander of Coast Guard Sector New Orleans. “I applaud the efforts of our partner agencies and internal investigators for their tireless efforts in prosecuting this case. The Coast Guard, EPA, LDEQ and Department of Justice will continue to hold polluters responsible for their actions.”
“Our nation’s environmental laws are designed to protect oceans and inland waterways from illegal and harmful pollutant discharges,” said Ivan Vikin, Special Agent in Charge of EPA’s criminal enforcement program in Louisiana. “Today’s sentence sends a clear message that companies that refuse to operate lawfully and pollute our waters, threatening people's health and the environment, will be vigorously prosecuted.”
Cedyco owned and operated several hydrocarbon facilities, including fixed barges, platforms and wells, in the brackish bayous of South Louisiana. As a general matter, Cedyco’s facilities were poorly maintained and operated without plans and permits required by regulations issued by the Louisiana Department of Environmental Quality (LDEQ) as administrator of the federal Clean Water Act. Cedyco’s negligent operation and poor maintenance of three of its facilities in Jefferson Parish led to harmful discharges of oil into the navigable waters of the United States. The three facilities are the tank battery known as the “Bayou St. Denis facility,” the production and storage facility known as the “Bayou Dupont facility,” and the production well adjacent to the Bayou Dupont facility known as “Well #10.” Each facility will be addressed in turn.“DEQ and its partners are dedicated to policing and enforcing environmental laws. Today’s sentence further illustrates that commitment,” said LDEQ Secretary Peggy Hatch.
Cedyco’s Bayou St. Denis facility was a tank battery located south of the Barataria Waterway. A May 29, 2008, joint inspection by the U.S. Coast Guard (USCG) and LDEQ revealed that the facility was storing oil without the required Facility Response Plan, Spill Prevention and Control Plan, and LDEQ permit as required under Clean Water Act regulations. The condition of the facility was extremely poor with corroded pipes and spilled oil on the deck. On June 15, 2008, enough oil was leaking from the facility that a sheen was visible on the surface of the water. A fisherman reported this sheen to the USCG, and a subsequent site visit by LDEQ on June 20, 2008, confirmed that oil was leaking into the adjacent waterway from the facility’s outfalls.
Cedyco’s Bayou Dupont facility is an oil storage and production platform located to the northeast of Bayou St. Denis, close to the Plaquemines Parish line. From Feb. 18, 2008, to May 19, 2008, Cedyco operated this facility without a Facility Response Plan, Spill Prevention and Control Plan and LDEQ permit. A joint USCG and LDEQ inspection on Feb. 19, 2008, revealed that the facility was in extremely poor condition with pools of oily water and emulsified oil on the deck, as well as ample evidence of extensive corrosion and leaks. The required spill response equipment was either missing or defective. For example, an absorbent boom meant to soak up oil spills had a plant growing out of it. During rain events that took place from Feb. 19, 2008, through May 18, 2008, the deck oil made its way unimpeded into the bayou through unfiltered outfalls and cracks in the deck and containment structures. The sources of this oil were not only chronic leaks and occasional spills, but at times resulted from acute events such as the leak from the slop oil tank that occurred on May 18, 2008. The May 18 slop oil tank spill was observed by an LDEQ inspector who took photographs at the scene. During the charged period, the quantity of oil that was present on the deck of Bayou Dupont facility was sufficient to cause a sheen when rain caused the oil to wash into the adjacent waterway.
Cedyco’s Well #10 is located in an area of bayou adjacent to the Bayou Dupont facility. Cedyco did not properly maintain Well #10, and as a result of that negligence, the well began to leak on or about May 17, 2008. The leak continued for at least two days. Before it was contained with boom, the leak resulted in an oily sheen that was detected as far as two miles downstream from the well. The leaking oil also resulted in an emulsion being deposited on the adjacent shoreline.
The case was investigated by agents of CGIS and Environmental Protection Agency-Criminal Investigation Division (EPA-CID) and by USCG and LDEQ inspectors. The case is being prosecuted by Christopher L. Hale of the Justice Department’s Environmental Crimes Section and Dorothy “Dee” Taylor of the U.S. Attorney’s Office for the Eastern District of Louisiana.Filed photo exhibits are available at the U.S Coast Guard website: http://cgvi.uscg.mil/media/main.php?g2_itemId=1627304.
Alabama Women Indicted in $2.8 Million Conspiracy<br /> <br /> to Use Stolen Identities to Obtain Tax RefundsRead the Press Release
A federal grand jury in Montgomery, Ala., returned a 25-count indictment charging Larreka Jackson for conspiring to file false tax returns using stolen identities, filing false claims, wire fraud and aggravated identity theft, the Justice Department and the Internal Revenue Service (IRS) announced today.
According to the indictment, Jackson operated a tax preparation business called It’s Tax Time in Montgomery, Ala. Jackson used It’s Tax Time as a front to file false tax returns using stolen identities. Jackson unlawfully obtained the names and Social Security numbers of actual persons and filed false tax returns using those names. Jackson directed the fraudulent tax refund to bank accounts controlled by her and her co-conspirators. In total, Jackson filed over 500 tax returns claiming over $2.8 million in fraudulent tax refunds.
An indictment merely alleges that crimes have been committed, and the defendant is presumed innocent until proven guilty beyond a reasonable doubt. If convicted, Jackson faces a maximum potential penalty of 10 years in prison for the conspiracy to file false claims, 5 years for each false claim count, 20 years for each wire fraud count and a mandatory 2-year sentence for the aggravated identity theft counts. Jackson is also subject to fines and mandatory restitution if convicted.
The case was investigated by special agents of IRS - Criminal Investigation. Trial Attorneys Jason H. Poole and Michael Boteler of the Justice Department’s Tax Division and Assistant U.S. Attorney Todd Brown are prosecuting the case.
Additional information about the Tax Division and its enforcement efforts may be found at www.justice.gov/tax.
Tuesday 14 August 2012
Owner of Miami Home Health CompanyPleads Guilty in $60 Million Health Care Fraud SchemeRead the Press Release
WASHINGTON – The owner of a Miami health care agency pleaded guilty today for his participation in a $60 million home health Medicare fraud scheme, announced the Department of Justice, the FBI and the Department of Health and Human Services (HHS).
Rodolfo Nieto Jr., 40, of Miami, pleaded guilty before U.S. District Judge Cecilia M. Altonaga in the Southern District of Florida to one count of conspiracy to defraud the United States and to receive health care kickbacks.
According to the court documents, Nieto was the owner and operator of Ronat Home Health Care Inc. According to court documents, during the time of the conspiracy, Ronat was a Florida home health “staffing agency” that purported to provide home health care and physical therapy services to eligible Medicare beneficiaries. Ronat subsequently became a home health agency.According to court documents, from approximately January 2006 to approximately November 2009, Nieto accepted kickbacks in return for recruiting Medicare beneficiaries to be placed at Nany Home Health Inc., a Miami home health agency that purported to provide home health care and physical therapy services to eligible Medicare beneficiaries. The owners and operators of Nany paid Nieto kickbacks in return for allowing Nany to bill the Medicare program on behalf of the patients Nieto had recruited through Ronat. Specifically, as part of the scheme, Nany billed Medicare for home health services purportedly provided by Ronat.
In a related case, on April 25, 2012, Roberto Gonzalez and Olga Gonzalez, president and vice president of Nany, and their son, Fabian Gonzalez, all of whom operated Nany, were sentenced to 120, 87 and 87 months in prison, respectively, following their Dec. 19, 2011, guilty pleas to one count each of conspiracy to commit health care fraud. From approximately January 2006 through November 2009, Roberto, Olga and Fabian Gonzalez and their co-conspirators submitted approximately $60 million in false and fraudulent claims to Medicare, and Medicare paid approximately $40 million on those claims.
At sentencing, scheduled for Oct. 23, 2012, Nieto faces a maximum penalty of five years in prison and a fine of $250,000 or twice the pecuniary gain or loss.
The 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; Jeffrey C. Mazanec, 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.
This case is being prosecuted by Senior Trial Attorney Joseph S. Beemsterboer 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.
Justice Department Settles Lawsuit Against South Carolina Landlord for Discriminating Against Families with ChildrenRead the Press Release
The Justice Department announced today that John Wingard Altman has agreed to pay $25,000 to settle a lawsuit involving violations of the Fair Housing Act at Altman Apartments, a 16-unit apartment complex he owns in Summerville, S.C. In July 2012, the court, ruling on a motion filed by the government, found that the defendant had violated the Fair Housing Act by discriminating against families with children.
Under the consent order, which was approved today by the U.S. District Court for the District of South Carolina, the defendant must pay $15,000 to two people who were harmed by the defendant’s discriminatory practices and $10,000 to the United States as a civil penalty. In addition, the order prohibits the defendant from engaging in discrimination against families with children in the future and requires that he adopt a non-discrimination policy in addition to receiving training on the Fair Housing Act.
“The Fair Housing Act protects families with children against housing discrimination,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “Providing an equal opportunity for families with children to access housing without discrimination is required by law critical and we will vigorously enforce the law to ensure all families have access to housing.”
“This office follows the lead of the Department of Justice’s strong stance to ensure that access to one of the most basic of human needs, shelter, is not impeded by prejudice,” said William M. Nettles, U.S. Attorney for the District of South Carolina.
Filed in September 2011, the lawsuit alleged that Mr. Altman, through published advertisements and statements to testers, maintained a policy or practice of discouraging families with children from living in the apartment complex. Testers are individuals who pose as renters to gather information about possible discriminatory practices; the evidence in this case was obtained by the department’s Fair Housing Testing Program.
The federal Fair Housing Act prohibits discrimination in housing based on race, color, religion, national origin, sex, disability and familial status. Fair housing enforcement is a priority of the Civil Rights Division. More information about the Civil Rights Division and the laws it enforces is available at www.justice.gov/crt . Individuals who believe that they may have been victims of housing discrimination can call the Housing Discrimination Tip Line at 1-800-896-7743, email the Justice Department at [email protected] , or contact the U.S. Department of Housing and Urban Development at 1-800-669-9777.
Justice Department Settles Claims of Discrimination Against Philadelphia Employment AgencyRead the Press Release
The Justice Department announced today that it reached a settlement agreement with Best Packing Services Employment Agency Inc., which is based in Philadelphia, resolving allegations that the company discriminated under the anti-discrimination provision of the Immigration and Nationality Act (INA), when it impermissibly delayed the start date of two refugees after requiring them to provide specific Form I-9 documentation.
In two charges filed with the department, the refugees alleged that they were not allowed to begin employment until they produced unexpired, Department of Homeland Security-issued employment authorization documents, despite the fact that they initially presented sufficient documentation for employment eligibility verification purposes. The charging parties had presented unexpired state identification cards and unrestricted Social Security cards at the time of hire. Both were permanently work-authorized but lost several weeks’ worth of wages as a result of Best Packing’s practices. The department’s investigation revealed that Best Packing did not demand specific Form I-9 documentation from U.S. citizens, but allowed them to provide state identification cards and unrestricted Social Security cards. The anti-discrimination provision prohibits treating employees differently in the employment eligibility verification and reverification processes based on citizenship status or national origin.
As part of the settlement, Best Packing will undertake immediate corrective action to address and rectify its employment eligibility verification policies and practices. As part of its corrective action, Best Packing will provide full back pay to both victims. Under the settlement agreement, the company agrees to pay $4,379 in back pay, to conform all of its actions to ensure compliance with the INA’s anti-discrimination provision and to train its human resources personnel about the company’s responsibility to avoid discrimination in the employment eligibility verification process.
“The Civil Rights Division is pleased that Best Packing has prioritized compliance with the Immigration and Nationality Act,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “We encourage all employers to evaluate their policies and practices to ensure compliance with the INA’s anti-discrimination provision.”
The Office of Special Counsel (OSC) for Immigration-Related Unfair Employment Practices is responsible for enforcing the anti-discrimination provision of the INA, which protects work-authorized individuals from employment discrimination on the basis of citizenship status or national origin discrimination, including discrimination in hiring and the employment eligibility verification process.
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/osc/webinars.php , email [email protected] or visit the website at www.justice.gov/crt/about/osc .
Monday 13 August 2012
Residents of California and Utah Sentenced for Tax FraudRead the Press Release
David L. Johnson and Michael L. Putnam were sentenced today following their convictions for tax crimes related to their involvement in the Genesis Fund, the Justice Department and Internal Revenue Service (IRS) announced. Both Johnson and Putnam had previously pleaded guilty before U.S. District Judge Dale S. Fischer in the Central District of California. According to the original indictment filed in this case, the Genesis Fund was a private investment fund that was marketed as investing in foreign currency trading, but that operated as a Ponzi scheme.
Johnson, 73, of Loma Linda, Calif., was sentenced to 30 months in prison for filing two false tax returns in which he failed to disclose his bank account in Costa Rica to the IRS. According to the plea agreement, Johnson used this bank account to conceal Genesis Fund distributions from the IRS. Judge Fischer also ordered Johnson to pay restitution of $2.3 million: approximately $1.9 million to investors in the Genesis Fund and $400,000 to the IRS.
Putnam, 68, of St. George, Utah, formerly of Huntington Beach, Calif., was sentenced to 12 months and a day in prison for conspiracy and tax fraud and ordered to pay over $13 million in restitution: approximately $10 million to investors in the Genesis Fund and $3 million to the IRS. According to court documents, Putnam had cooperated with the government in the prosecution of other defendants charged for their involvement in the Genesis Fund.
According to court documents, Johnson and Putnam received significant distributions that they hid in foreign bank accounts and did not report to the IRS. Johnson received over $2.4 million while Putnam received over $1.5 million.
Johnson and Putnam are the 10th and 11th defendants to be sentenced for crimes related to the promotion of the Genesis Fund.
Kathryn Keneally, Assistant Attorney General for the Justice Department’s Tax Division, commended the efforts of special agents of IRS - Criminal Investigation in Laguna Niguel, Calif., for investigating the case, and Tax Division Trial Attorneys Lori A. Hendrickson, Matthew J. Kluge, Ellen M. Quattrucci and Danny N. Roetzel for prosecuting the case, with the assistance of the U.S. Attorney’s office in Los Angeles.
Miami-Area Patient Broker Sentenced to 18 Months in Prison for Role in $200 Million Medicare Fraud SchemeRead the Press Release
WASHINGTON – A Miami-area patient broker was sentenced today to 18 months in prison for recruiting Medicare beneficiaries as part of a $200 million Medicare fraud scheme, the Department of Justice, FBI and Department of Health and Human Services announced.
Jean-Luc Veraguas, 51, of Plantation, Fla., was sentenced by U.S. District Judge Frederico A. Moreno in the Southern District of Florida. In addition to his prison term, Veraguas was ordered to pay $1.8 million in restitution, jointly and severally with other co-conspirators.
On May 30, 2012, Veraguas pleaded guilty to one count of conspiracy to commit health care fraud. Veraguas admitted to serving as a patient broker for American Therapeutic Corporation (ATC) and other health care agencies. ATC 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.
According to court documents, Veraguas recruited patients to attend ATC’s PHP program, among others, in exchange for illegal kickbacks. Veraguas admitted that based on his recruiting efforts, he caused $3.8 million in fraudulent bills to Medicare. Veraguas admitted he knew many of the individuals he recruited did not need the treatment they purported to have received.
According to court filings, ATC’s owners and operators paid millions of dollars in kickbacks to owners and operators of assisted living facilities and halfway houses and to patient brokers in exchange for delivering ineligible patients to ATC. According to court filings, co-conspirators fabricated documents in patient files to hide the fact that the patients did not, in the first instance, qualify for treatment and did not ultimately receive the treatment for which Medicare was billed.
ATC, its management company, Medlink Professional Management Group Inc., and various owners, managers, doctors, therapists, patient brokers and marketers of ATC, were charged with various health care fraud, kickback, money laundering and other offenses in two indictments unsealed on Feb. 15, 2011. ATC, Medlink and more than 20 of the individual defendants charged in these cases have pleaded guilty or have been convicted at trial.
The sentence 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; Jeffrey C. Mazanec, Acting Special Agent-in-Charge 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.
The criminal case is being prosecuted by Trial Attorneys Steven Kim, Robert Zink and Alan Medina of the Criminal Division’s Fraud Section. A related civil action is being handled by Vanessa I. Reed and Carolyn B. Tapie of the Civil Division. 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.
Justice Department to Monitor Elections <br /> <br /> in Florida and WisconsinRead the Press Release
The Justice Department announced today that it will monitor elections on Aug. 14, 2012, in the following jurisdictions to ensure compliance with the Voting Rights Act of 1965 and other federal voting rights statutes: Collier, Hendry, Lee, Osceola and Polk Counties, Fla.; and the city of Milwaukee, Wis.
The Voting Rights Act prohibits discrimination in the election process on the basis of race, color or membership in a minority language group. In addition, the act requires certain covered jurisdictions to provide language assistance during the election process. Collier, Hendry, Lee, Osceola and Polk Counties, as well as the city of Milwaukee, are required to provide language assistance in Spanish.
Civil Rights Division personnel will monitor polling place activities in these jurisdictions. Civil Rights Division attorneys will coordinate federal activities and maintain contact with local election officials.
Each year, the Justice Department deploys hundreds of federal observers from Office of Personnel Management, as well as departmental staff, to monitor elections across the country. To file complaints about discriminatory voting practices, including acts of harassment or intimidation, voters may call the Voting Section of the Justice Department’s Civil Rights Division at 1-800-253-3931.
Visit www.justice.gov/crt/voting/index.php for more information about the Voting Rights Act and other federal voting laws.
Friday 10 August 2012
Tennessee-Based Home Health Care Provider & Related Entities<br /> <br /> Agree to Pay More Than $9 M to Resolve False Claims Act LawsuitRead the Press Release
James W. Carell, CareAll Management LLC (formerly known as Diversifi ed He alth Mana gement Inc.), C are All Inc., the James W. Car ell Family Trust, V IP Home Nursing and Reh abilitation Servi ces L LC, Professional Home He alth Care L LC, University Home H ealth, LLC and Elizabeth Vining (as representative of the Estate of Robert Vining) have agreed to pay $9.375 million to the federal government. This payment is to resolve the lawsuit that the United States filed in 2009 alleging that they violated the False Claims Act, caused Medicare to pay out money through mistake of fact, and were unjustly enriched by falsely concealing the home health agencies’ relationship with their management company, the Justice Department announced today.
VIP, Professional and University now operate under the name CareAll. James W. Carell and the related CareAll entities named above also agreed to be bound by the terms of a Corporate Integrity Agreement with the Department of Health and Human Services – Office of Inspector General (HHS-OIG).
CareAll and its related entities are one of the largest home health providers in Tennessee. This settlement resolves the United States’ lawsuit alleging that the CareAll entities fraudulently submitted eight cost reports for fiscal years 1999, 2000 and 2001 to support their Medicare billings. The United States alleged that these cost reports were false because they knowingly hid the relationship between the management company and the home health agencies. According to the complaint the United States filed in this case, the cost reports should have disclosed that the management company was related to the home health agencies, which would have lowered the Medicare reimbursement for the management company’s services. During the relevant years, the United States alleged that James W. Carell owned the management company, and his friend Robert Vining – an attorney who lived in Missouri – served as the nominee or “sham” owner of the home health agencies.
The United States further alleged in court filings that the management company exerted significant control over the home health agencies in a myriad of ways, including: James. W. Carell’s key role in facilitating Robert Vining’s purchase of the home health agencies; loans worth millions of dollars from companies owned by James W. Carell to the home health agencies; cash transfers for millions of dollars from the management company to the home health agencies; the management company’s day to day control over the home health agencies’ operations; and Robert Vining’s role as a mere figurehead owner. The United States also alleged in court filings that James W. Carell profited greatly from this “sham” owner relationship and that he monetarily rewarded Robert Vining for his participation in this scheme.
“The false reporting scheme alleged in this case robbed the Medicare Trust Fund of millions of taxpayer dollars,” said Stuart Delery, Acting Assistant Attorney General for the Civil Division of the Department of Justice. “Settlements like this one make sure that our federal health care dollars are spent appropriately – on maintaining critical health care programs.”
“This settlement is yet another example of this office’s commitment to enforcing the False Claims Act in health care cases and protecting the taxpayer’s interests,” said Jerry E. Martin, U.S. Attorney for the Middle District of Tennessee. “The U.S. Attorney’s Office will continue to return money to the federal treasury by aggressively pursuing cases where, based on false reporting and concealment, health care companies are unjustly enriched.”
“This settlement represents a significant victory in our fight against fraud in the Medicare system,” said Derrick L. Jackson, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of Inspector General in Atlanta. “The OIG is committed to protecting the integrity of federal health care programs by aggressively pursuing entities that increase their revenue through deceitful schemes and trickery.”
The United States’ investigation was conducted by the U.S. Attorney’s Office for the Middle District of Tennessee, the Justice Department’s Civil Division and HHS-OIG.
This resolution is part of the government’s emphasis on combating health care fraud and another step for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced by Attorney General Eric Holder and Kathleen Sebelius, Secretary of the Department of Health and Human Services in May 2009. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover more than $9.3 billion since January 2009 in cases involving fraud against federal health care programs. The Justice Department’s total recoveries in False Claims Act cases since January 2009 are over $12.9 billion.
The case is docketed as United States v. James W. Carell, et al., No. 3:09-0445 (M.D. Tenn.). 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.
South Carolina Pharmaceutical Distribution Company Pleads Guilty in Multi-Million Dollar Scheme to Purchase and Sell Drugs in the Grey MarketRead the Press Release
The Department of Justice announced the guilty plea and sentencing of Easley, S.C.-based Altec Medical for engaging in a multi-million dollar prescription drug scheme. Altec Medical pleaded guilty in U.S. District Court in Miami to one count of conspiring to defraud the U.S. Food and Drug Administration (FDA) and to commit federal offenses in connection with a drug-diversion scheme that lasted from 2007 to 2009.
In the sentencing, U.S. District Judge Robert N. Scola, Jr. ordered Altec to pay a $2 million fine and to forfeit $1 million. The judge also ordered the company to be on probation for one year.
In a criminal information filed with the court, the government charged that Altec paid its supplier and co-conspirator William D. Rodriguez, approximately $55 million for prescription drugs that it knew had been diverted from lawful channels of drug wholesale distribution. “Drug Diversion” refers to various ways in which prescription drugs are removed from lawful channels of distribution and then reintroduced into the marketplace for sale to consumers. In drug diversion schemes, prescription drugs at issue are often stolen from warehouses or cargo trucks; torn from boxes of free samples, repackaged and resold; or bought from individual patients looking to make extra money.
“Drug diversion undermines the safety and effectiveness of our prescription drug system,” said Stuart F. Delery, Acting Assistant Attorney General for the Justice Department’s Civil Division. “When individuals divert drugs from lawful channels, we cannot be sure that the drugs are properly handled and stored. As a result, diverted drugs could be expired, become contaminated, or have their mechanisms of action altered. Diversion is a serious crime that puts consumers at risk; we will continue to prosecute those who engage in it aggressively.”
The Justice Department advises consumers who have concerns about a drug to check the lot numbers on the manufacturer’s web site to see if there are any warnings about it.
According to a plea agreement that was filed with the court, Altec became aware that Rodriguez had bought these drugs from individuals who had acquired them illegally and who were not properly licensed to sell prescription drugs on a wholesale basis. The government further charged that Altec and Rodriguez orchestrated the reentry of these drugs into the lawful channels of distribution. According to the government, Rodriguez first sent the diverted drugs to companies he controlled in South Carolina. His companies, in turn, resold the drugs to Altec, which, in turn, resold the drugs to various purchasers throughout the United States, including drug distributors with valid drug distribution licenses. This process caused reentry of the diverted drugs into the ordinary, lawful channels of distribution. Eventually, the diverted drugs were bought by retail pharmacies, which dispensed the drugs by filling prescriptions for individual consumers.
Finally, the government charged that Altec and Rodriguez attempted to conceal their scheme by falsifying a variety of business records. In particular, Altec and Rodriguez falsified documents known as “drug pedigrees.” Drug pedigrees are statements required by the FDA of all those who sell wholesale quantities of prescription drugs. The drug pedigrees are supposed to accurately identify all prior sales and transactions so that it is clear that the drugs have been acquired lawfully, and properly stored and held along the way. Despite knowing that the law required accurate pedigrees, Altec admitted that it created pedigrees that falsified prior transactions to make it appear as though the drugs had originally been acquired lawfully.
Use of diverted drugs can cause unpredictable adverse side effects and may fail to treat the condition for which a consumer is taking the drugs. According to the government, neither purchasers who bought from Altec nor consumers who later bought the drugs at retail pharmacies would have purchased the drugs had they known that the drugs had been diverted.
In June 2012, in U.S. District Court in Miami, Rodriguez pleaded guilty to conspiracy and money laundering in a separate case charging him with, among other things, his role in this drug diversion scheme. He has not yet been sentenced.
The case was prosecuted by Assistant U.S. Attorney Jon M. Juenger, of the U.S. Attorney’s Office for the Southern District of Florida, and David A. Frank, of the Justice Department’s Consumer Protection Branch. Additional assistance was provided by Joshua Eizen, of the FDA’s Office of Chief Counsel for Enforcement. The case was investigated by the FDA’s Office of Criminal Investigations.
New York Federal Court Bars Womanfrom Preparing Tax ReturnsRead the Press Release
A federal court in Central Islip, N.Y., has permanently barred Diana D. Bertocci-Aliffi from preparing federal tax returns for others, the Justice Department announced today. The civil injunction order, to which Aliffi agreed without admitting the government’s allegations, was signed by Judge Joanna Seybert of the U.S. District Court of the Eastern District of New York.
The government complaint in the case alleged that Aliffi, of East Rockaway, claimed false Indian Employment Tax Credits (IETCs) for customers who were not eligible for the credits. The IETC is a credit for employers of certain qualified employees who are or whose spouses are members of an enrolled Indian tribe. It is not a credit for Native Americans who have no qualified employees. According to the complaint, Aliffi falsely told her customers, many of whom lived on or near the Shinnecock Indian Reservation in Southampton, N.Y., that they were eligible for the credit simply because they were Native Americans and lived on or near a reservation. Aliffi allegedly prepared federal income tax returns for these customers and improperly claimed the IETC on the returns. Aliffi also allegedly fabricated wage income and tax withholding on other customers’ tax returns in order to obtain larger tax refunds.
The government complaint alleged that Aliffi was incarcerated from February to August 2009 after pleading guilty in a New York state court to 76 counts of grand larceny, identity theft and forgery related to her tax preparation activities. According to the complaint she had stolen her customers’ personal information to file false federal and New York State tax returns, applied for refund anticipation loans using the false returns, and then diverted part of those loans to her own bank accounts.
In the past decade the Justice Department’s Tax Division has obtained injunctions against hundreds of tax return preparers and tax fraud promoters. Information about these cases is available on the Justice Department website .
Related Documents:
Complaint for Permanent Injunction
Stipulated Final Judgment of Permanent InjunctionJustice Department Releases Investigative Findings Showing Constitutional Rights of Children in Mississippi Being ViolatedRead the Press Release
The Justice Department released a letter of findings today determining that the Lauderdale County Youth Court, the Meridian Police Department (MPD), and the Mississippi Division of Youth Services (DYS) are violating the constitutional rights of juveniles in Meridian, Miss. The department’s investigation found reasonable cause to believe that these agencies have violated the constitutional due process rights of children in the city of Meridian and the county of Lauderdale under the Fourth, Fifth, and Fourteenth Amendments of the U.S. Constitution.
The department initiated a comprehensive investigation in December 2011 under Section 14141 of the Violent Crime Control and Law Enforcement Act of 1994, which prohibits a pattern or practice of deprivation of civil rights for juveniles in the administration of juvenile justice, and Title VI of the Civil Rights Act of 1964, which prohibits discrimination on the basis of race, color or national origin by recipients of federal financial assistance. The Justice Department continues to investigate whether any of the agencies are violating children's rights under Title VI or the Equal Protection Clause of the Fourteenth Amendment.
The department’s investigation showed that the agencies have helped to operate a school-to-prison pipeline whereby children arrested in local schools become entangled in a cycle of incarceration without substantive and procedural protections required by the U.S. Constitution. The department’s findings show that children in Lauderdale County have been routinely and repeatedly incarcerated for allegedly committing school disciplinary infractions and are punished disproportionately, without constitutionally required procedural safeguards. Children have also been arrested at school for offenses as minor as defiance. Furthermore, children on probation are routinely arrested and incarcerated for allegedly violating their probation by committing minor school infractions, such as dress code violations, which result in suspensions. The department’s investigation showed that students most affected by this system are African-American children and children with disabilities.
“The systematic disregard for children’s basic constitutional rights by agencies with a duty to protect and serve these children betrays the public trust,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “We hope to resolve the concerns outlined in our findings in a collaborative fashion, but we will not hesitate to take appropriate legal action if necessary.”
In its investigation, the Justice Department found a pattern or practice of unconstitutional conduct in several areas, including:
- Failure by MPD to adequately assess probable cause that an unlawful offense has been committed prior to arresting children at local schools;
- Failure by the Lauderdale County Youth Court to provide children with proper procedural due process, including by making untimely and inadequate probable cause determinations;
- Failure by the Lauderdale County Youth Court and the Mississippi DYS to provide children procedural due process rights in the probationary process, especially with regard to alleged probation violations; and
- Failure by all entities to ensure substantive due process for children on probation by incarcerating children for school disciplinary offenses without any procedural safeguards.
“The U.S. Attorney’s Office is committed to seeing the rule of law applied to all citizens fairly and equally,” said Gregory Davis, U.S. Attorney for the Southern District of Mississippi. “We hope to be able to resolve the civil rights violations found by the Justice Department in a way that benefits all the people of Meridian and Lauderdale County, including those children who are being treated unfairly by the juvenile justice system.”
This investigation was conducted by the Civil Rights Division’s Special Litigation Section, working in conjunction with the Educational Opportunities Section, which has a long-standing school desegregation case against the Meridian Public School District, and the U.S. Attorney’s Office for the Southern District of Mississippi. For more information on the Justice Department’s Civil Rights Division, please visit www.justice.gov/crt.
Related Materials:
Letter of Findings
Indiana Online Identity Thief Sentenced to 48 Months in Prison for Counterfeit Credit Card Conspiracy Involving More Than $3 Million in LossesRead the Press Release
WASHINGTON – A Munster, Ind., man was sentenced today in U.S. District Court in Alexandria, Va., to serve 48 months in prison for his role in a conspiracy that involved operation of an online identity theft business that sold counterfeit credit cards encoded with stolen account information, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney Neil H. MacBride for the Eastern District of Virginia.
Peter Borgia Jr., 22, was sentenced by U.S. District Judge Leonie M. Brinkema. In addition to his prison term, Borgia was ordered to pay $3,138,678.05 in forfeiture and to serve three years of supervised release. Borgia pleaded guilty on May 18, 2012, to one count of conspiracy to commit wire fraud and one count of aggravated identity theft.
In his plea, Borgia admitted he was part of a conspiracy that ran an online business selling counterfeit credit cards encoded with stolen account information. According to court documents, the conspiracy utilized multiple online personas in criminal “carding forums,” Internet discussion groups set up to facilitate buying and selling stolen financial account information and other goods and services to promote credit card fraud. In these forums and in other Internet communications, the conspiracy regularly purchased or received stolen credit card account information, which was then used to make counterfeit credit cards for sale to others.
In June 2010, U.S. Secret Service special agents executed a search warrant at Borgia’s co-conspirator’s apartment and found a counterfeit credit card manufacturing operation and nearly 21,000 stolen credit card numbers and related information in computers and email accounts. According to court documents, credit card companies have identified thousands of fraudulent transactions using the card numbers found in the co-conspirator’s possession, totaling more than $3 million.
The case was investigated by the U.S. Secret Service Criminal Investigative Division and Chicago Field Office, with assistance from the U.S. Marshals Service from the Northern District of Illinois and the Northern District of Indiana, and the Oak Brook, Ill., Police Department. The case was prosecuted by Michael J. Stawasz, a Senior Counsel for the Computer Crime and Intellectual Property Section of the Justice Department’s Criminal Division and a Special Assistant U.S. Attorney for the Eastern District of Virginia.
Federal Court Permanently Bars Detroit Husband and Wife from Promoting Alleged Tax-fraud Schemeand from Preparing Federal Tax ReturnsRead the Press Release
A federal court has permanently barred a Michigan couple, Damian and Holly Jackson, of Detroit, from preparing federal tax returns for others, preparing their own federal tax returns using false 1099 forms, and promoting an alleged tax-fraud scheme based on the frivolous “redemption” theory, the Justice Department announced today. The civil injunction order, to which the Jacksons consented without admitting the allegations against them, was signed by Judge Paul D. Borman of the U.S. District Court for the Eastern District of Michigan.
The government complaint in the civil case alleged that the Jacksons and their business, Diamond & Associates Enterprises, operated Diamond Tax Services and promoted a scheme involving the preparation of fraudulent federal income tax returns for customers seeking large tax refunds based on a frivolous tax-defier theory called “redemption” or “commercial redemption.”
The complaint alleged that Damian Jackson, a minister at the Perfecting Church in Detroit, prepared tax returns that claimed huge fraudulent refunds based on fabricated income-tax withholding reported on false IRS 1099 forms. According to the complaint, Holly Jackson transmitted the false 1099 forms to the Internal Revenue Service (IRS). The suit alleged that federal tax returns prepared for at least 182 customers under the auspices of Diamond Tax Services sought over $29 million in fraudulent refunds, and that the Jacksons’ own federal income tax returns have requested more than $2.5 million in bogus refunds. While most of these frivolous refund claims are intercepted by the IRS before refunds are issued, the complaint alleges that the defendants’ scheme has caused the IRS to issue at least $1.6 million in erroneous refunds to the defendants’ customers. According to the complaint, the Jacksons solicited up-front fees of $500 to $995 from customers, and received a 10 percent cut of any refund issued by the IRS.
The injunction suit remains pending against a third defendant.
Return-preparer fraud and false claims for refund using fake information returns, such as Form 1099, are among the IRS’s Dirty Dozen Tax Scams for 2012.
In the past ten years the Justice Department’s Tax Division has obtained injunctions against hundreds of tax-return preparers and tax-fraud promoters. Information about these cases is available on the Justice Department website .
Related Documents:
United States v. Damian Jackson, et al., Order of Permanent Injunction Against Damian Jackson and Holly Jackson (PDF)Arizona Tax Defier Sentenced to Nine Years in Prison for Fraud and Tax ConspiracyRead the Press Release
Richard Kellogg Armstrong, 77, of Prescott, Ariz., was sentenced today by U.S. District Court Judge Robert E. Blackburn to 108 months in prison followed by three years of supervised release. Judge Blackburn ordered the sentence to run con secutively to the 660 day prison term and $1,021,500 of fines cumulatively imposed upon Armstrong as punitive sanctions for 10 acts of contempt of court. He also ordered Armstrong to pay restitution to the Internal Revenue Service (IRS) in the amount of $1,678,834 and to forfeit two residences and a personal aircraft. The sentence was announced by the Justice Department’s Tax Division, the U.S. Attorney’s Office for the District of Colorado and the IRS Criminal Investigation Denver Field Office. Codefendant Curtis L. Morris, age 43, of Elizabeth, Colo., is scheduled to be sentenced on Nov. 6, 2012.
Armstrong was found guilty on April 30, 2012, after a three week jury trial, of one count of mail fraud, eight counts of filing false claims against the United States, three counts of engaging in monetary transactions in property derived from mail fraud, and one count of conspiracy to defraud the United States. According to the testimony at trial, Armstrong, Morris and others conspired to file false tax returns claiming large tax refunds based upon fictitious federal income tax withholdings taken from bogus IRS Forms 1099-OID for themselves and others. Armstrong personally received over $1.6 million in fraudulent tax refunds and, according to the testimony at trial, quickly moved most of this money into accounts in the names of shell entities and offshore bank accounts.
“The sentence in this case demonstrates that those who defy the tax laws by preparing or filing false and frivolous tax returns will be prosecuted and punished for their conduct,” said Kathryn Keneally, Assistant Attorney General for the Justice Department’s Tax Division. “The Tax Division remains committed to prosecuting conduct that attempts to defy our nation’s tax laws.”
“The intent of this refund fraud scheme was to swindle the government and the taxpaying public” said Richard Weber, Chief, IRS-Criminal Investigation. “Today's sentencing of Mr. Armstrong again emphasizes that the Internal Revenue Service and Department of Justice will continue their aggressive pursuit of those who would attempt to defraud America's tax system.”
Assistant Attorney General Keneally commended the efforts of IRS-Criminal Investigation special agents, who investigated the case, and Assistant U.S. Attorney Kenneth Harmon and Special Assistant U.S. Attorney Kevin F. Sweeney, who prosecuted the case. Kevin Sweeney is a trial attorney from the Tax Division, currently on detail to the U.S. Attorney’s Office.
Thursday 9 August 2012
Former Co-Owner of Contracting Company Pleads Guilty to Defrauding U.S. GovernmentRead the Press Release
WASHINGTON – A former co-owner of a U.S. civilian contractor company pleaded guilty today to falsifying official documents in connection with Iraq reconstruction government contracts, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney Robert Pitman for the Western District of Texas.
Jill Ann Charpia, 33, formerly of San Antonio and currently of Colorado, pleaded guilty today before U.S. Magistrate Judge Henry J. Bemporad in San Antonio to a criminal information charging her with one-count of false statements to a government agency.
According to court documents, from 2008 through 2009, Charpia was the co-owner of Sourcing Specialist LLC, a privately owned company that contracted with the United States government to provide services in Iraq. In September 2008, she contracted to provide a turn-key housing facility located outside Iraq’s International Zone to facilitate the introduction of multi-national firms desiring to develop business opportunities in Iraq. That same month, Charpia signed and submitted to the Department of Defense (DOD) Joint Contracting Command Iraq/Afghanistan, for payment through the contract, a false invoice in the amount of $1,270,075.40 purportedly for mobilization costs. She followed up with two invoices, one representing that she had paid $700,000 for the rental of two villas in Baghdad, and the other representing that she had paid $570,075.50 on the purchase of three armored vehicles from an Iraqi company. In October 2008, as a result of her false and fraudulent statements, DOD caused $1,270,075.50 to be wired to Charpia’s bank account. Charpia admitted that she fabricated both invoices and forged the signatures on the documents. She also admitted that she did not purchase any armored vehicles and paid only half the submitted cost for the villas.
At sentencing, scheduled for Nov. 15, 2012, Charpia faces a maximum penalty of five years in prison, a maximum fine of $250,000, or twice the pecuniary gain or loss, and up to three years of supervised release. As part of her plea agreement, Charpia agreed to pay $920,000 plus interest in restitution to the United States.
This case is being prosecuted by Special Trial Attorney Mark Grider of the Criminal Division’s Fraud Section, on detail from the Special Inspector General for Iraq Reconstruction (SIGIR), and by Assistant U.S. Attorney Judith A. Patton of the Western District of Texas. The case is being investigated by SIGIR, Internal Revenue Service-Criminal Investigation and the Major Procurement Fraud Unit of the U.S. Army Criminal Investigation Command.
Federal Court Shuts Down Florida Tax Return PreparersRead the Press Release
A federal court in Miami has permanently barred Sharon Angulo and Claudia Zuloaga, both of Miami, from preparing federal tax returns for others, the Justice Department announced today. The injunction order was signed by Judge Joan A. Lenard of the U.S. District Court for the Southern District of Florida.
According to the government complaint in the civil case, Angulo and Zuloaga help customers use Internal Revenue Service (IRS) Forms 1099-OID to report fictitious income tax withholding. The complaint alleges that Angulo and Zuloaga’s customers file federal tax returns claiming tax refunds based on the fake withholding. The complaint states that the defendants have prepared or assisted in the preparation of at least 19 tax returns reporting false withholding and claiming fraudulent tax refunds totaling more than $3 million.
The court ordered Angulo and Zuloaga to pay to the U.S. Treasury the funds they received from customers who paid them a percentage of the tax refunds received through the scheme. The court also ordered the defendants to provide the government with a list of all persons for whom they prepared federal tax returns or forms since 2008.
The IRS lists return preparer fraud as one of the Dirty Dozen Tax Scams for 2012 . In the past decade the Justice Department’s Tax Division has obtained hundreds of injunctions to stop the promotion of tax-fraud schemes and the preparation of fraudulent returns. More information about these cases is available on the Justice Department website .
Related Documents:
United States v. Sharon Angulo, et alComplaint for Permanent Injunction and Other Equitable Relief (PDF)
Order of Default Judgment and Permanent Injunction Against Sharon Angulo and Claudia Zuloaga (PDF)