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Thursday 26 July 2012
Admitted Associate of New England La Cosa Nostra Sentenced to Prison for Participation in Hobbs Act Extortion ConspiracyRead the Press Release
Albino “Albie” Folcarelli, 54, of Johnston, R.I., an admitted associate of the New England La Cosa Nostra (NELCN), was sentenced in U.S. District Court in Providence, R.I., today to serve 84 months in federal prison for his participation in an extortion conspiracy to extort $25,000 from a Rhode Island individual by using implied threats of violence, including visits to the individual’s place of employment and home.
U.S. District Court Judge William E. Smith also sentenced Folcarelli to serve three years of supervised release upon completion of his prison term and to pay $25,000 in restitution to be paid jointly and severally with co-defendants Raymond R. “Scarface” Jenkins and Edward “Eddy” Lato. Folcarelli pleaded guilty on May 4, 2012, to one count of Hobbs Act extortion.
Folcarelli admitted to participating in an extortion conspiracy with Lato, 65, an admitted NELCN capo, and Jenkins, 47. Lato, who also pleaded guilty to participating in a conspiracy to shakedown Rhode Island adult entertainment business for protection money, is serving a sentence of 108 months in federal prison. Jenkins is serving a sentence of 37 months in prison.
Folcarelli’s sentence was announced by Peter F. Neronha, United States Attorney for the District of Rhode Island; Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; Richard Deslauriers, Special Agent in Charge of the FBI’s Boston Field Office; Colonel Steven G. O’DonnellSuperintendent of the Rhode Island State Police; and Providence Public Safety Commissioner Steven M. Pare.
Folcarelli, Lato and Jenkins are among seven Rhode Island men convicted and sentenced for crimes involving racketeering and extortion, which allegedly extorted protection payments from several adult entertainment businesses and individuals in Rhode Island during the past two decades. Admitted NELCN crime boss Luigi “Louie” Manocchio, 85, is currently serving a 66 month sentence in federal prison; Alfred “Chippy” Scivola, 72, an admitted NELCN member, is serving a 46 month sentence in prison; Richard Bonifiglia, 58, an admitted NELCN associate, is serving an 84 month sentence in prison; and Thomas Iafrate, an admitted NELCN associate, is currently serving a 30 month sentence in prison.
An eighth defendant named in a second superseding indictment, Theodore Cardillo, 69, has entered a plea of not guilty to three counts each of RICO conspiracy and extortion conspiracy. He is detained while awaiting trial.
A third superseding indictment returned in this matter returned on April 24, 2012, charges Anthony L. Dinunzio, 53, of East Boston, Mass., the alleged acting leader of the NELCN, with one count each of racketeering and extortion, and five counts of travel in aid of racketeering. A not guilty plea was entered on April 25, 2012. Dinunzio is detained while awaiting trial.
An indictmentis merely an allegation and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
The cases are being prosecuted by Assistant U.S. Attorney William J. Ferland for the District of Rhode Island and Trial Attorney Sam Nazzaro of the Criminal Division’s Organized Crime and Gang Section.
The matter was investigated by the FBI, the Rhode Island State Police and the Providence Police Department.
Wednesday 25 July 2012
Wilcox County, Georgia, Jailer Pleads Guilty in Connection with Assault of Three InmatesRead the Press Release
WASHINGTON – The Justice Department announced today that former Wilcox County, Ga., Jailer Casey Owens pleaded guilty to a misprision of a felony in connection with an incident in which several people, including law enforcement officials, assaulted three inmates inside of the Wilcox County Jail in Abbeville, Ga.
During his plea hearing yesterday and in his factual basis, Owens, 23, of Rhine, Ga., admitted he was present when several people, including then-Wilcox County Sheriff Stacy Bloodsworth and his son, Austin Bloodsworth, assaulted three inmates on July 23, 2009. As a result of the assaults, two of the inmates suffered scratches, bruises and pain, while the third inmate suffered a broken jaw. During the plea hearing, Owens further admitted that he and others were present when Stacy Bloodsworth concocted a false cover story in order to cover up the fact that law enforcement officials and others had used excessive force against the three inmates. Owens admitted that Stacy Bloodsworth instructed Owens and others to prepare reports memorializing the false cover story for Wilcox County Sheriff’s Office officials and to make statements consistent with the false cover story to anyone inquiring about the excessive use of force. Owens also acknowledged that, even though he knew about the assault of the inmates and the false story that Stacy Bloodsworth concocted to cover up the involvement of law enforcement officers, he concealed his knowledge of the assaults by writing a false statement to be included in the Wilcox County Sheriff’s Office report about the incident. Further, Owens did not, as soon as possible, tell a federal judge or a federal agent that law enforcement officials and others had conspired to cover up the assault of the three inmates.
“The vast majority of American law enforcement officers conduct themselves with honor. But when an officer violates his or her oath and breaks the law, the Department of Justice stands ready to enforce the law and protect the civil rights of all Americans,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division.
“When an officer abuses his authority, he brings shame on the men and women in uniform who honorably protect and serve us all. My office will aggressively defend the civil rights of all people, and will just as vigorously prosecute those who violate them,” said U.S. Attorney for the Middle District of Georgia Michael Moore.
When Owens is sentenced, he faces a maximum penalty of up to three years in prison.
On Feb. 17, 2012, the Justice Department unsealed a 14-count indictment against Stacy Bloodsworth; Austin Bloodsworth; Owens; and former Wilcox County Jail Trustee Willie James Caruthers. The indictment charges the four defendants with civil rights violations in connection with the July 23, 2009, assault of the three inmates and with conspiring to cover up the assaults. In addition, the indictment charges Stacy Bloodsworth, Austin Bloodsworth and Caruthers with lying to the FBI, and it charges Caruthers and Owens with writing false reports. Stacy Bloodsworth was also charged with tampering with one of the victims, as well as with tampering with two witnesses. In May 2012, the grand jury returned a superseding indictment, which, in addition to the civil rights and obstruction of justice charges stemming from the July 23, 2009, assaults, also charges Stacy Bloodsworth with violating the civil rights of individuals on two other occasions. The superseding indictment charges Stacy Bloodsworth with assaulting a Wilcox County Jail inmate in July 2009, causing him to suffer a laceration and pain, and with assaulting another inmate in November 2009, causing him to suffer a concussion, bruising and pain.
On April 4, 2012, Caruthers pleaded guilty to acting with several others, including law enforcement officials, to assault an inmate inside of the Wilcox County Jail on July 23, 2009. Caruthers also pleaded guilty to conspiring to tamper with a witness in connection with the assault. During his plea hearing and in his factual basis, Caruthers admitted that he, along with several other individuals, including then-Sheriff Stacy Bloodsworth, assaulted a Wilcox County inmate, causing the inmate to suffer a broken jaw. Caruthers acknowledged that he was present when several individuals, including Stacy Bloodsworth, assaulted two other inmates, causing both of them to sustain bruises, scratches and pain. During the plea hearing, Caruthers further admitted he conspired with several other people, including Stacy Bloodsworth, to cover up the fact that law enforcement officials and others had used excessive force against the three inmates. Caruthers acknowledged that the plan of the conspiracy was for the co-conspirators to prepare false reports and submit them to Wilcox County Sheriff’s Office officials, and to make statements consistent with those false reports to anyone inquiring about the excessive use of force incident. When Caruthers is sentenced, he faces a maximum penalty of up to 10 years in prison on the civil rights violation, and a maximum penalty of up to five years on the conspiracy charge.
On March 5, 2012, former South Central Georgia Drug Task Force Agent Timothy King Jr., 31, pleaded guilty to an information charging him with conspiring to tamper with a witness in connection with the July 23, 2009, assaults of three inmates. During his plea hearing, King admitted that he conspired with several other people, including a law enforcement official, to cover up the fact that law enforcement officials and others had used excessive force against the three inmates. When King is sentenced, he faces a maximum penalty of five years.
The civil rights charges against Stacy Bloodsworth and Austin Bloodsworth carry a maximum penalty of 10 years for each count, and the conspiracy and false statements charges carry a maximum penalty of up to five years. Additionally, Stacy Bloodsworth faces a maximum penalty of 20 years for each count of witness tampering. An indictment is only an accusation, and the accused are presumed innocent until proven guilty at trial.
This case was investigated by the FBI and is being prosecuted by Trial Attorney Christine M. Siscaretti and Special Litigation Counsel Gerard V. Hogan of the Justice Department’s Civil Rights Division, with the assistance of the U.S. Attorney’s Office for the Middle District of Georgia.
Two Southern California Men Each Sentenced to 60 Months in Prison for Their Roles in a Nationwide Breach of Credit andDebit Card Terminals at Michaels Stores Inc.Read the Press Release
WASHINGTON – Two southern California men were sentenced in the U.S. District Court for the Northern District of California in Oakland for their roles in a scheme to defraud nearly 1,000 debit card holders by using stolen bank account information to withdraw money from ATMs, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney Melinda Haag of the Northern District of California and Special Agent in Charge Andrew C. Adelmann of the U.S. Secret Service’s San Francisco Field Office.
Eduard Arakelyan, 21, and Arman Vardanyan, 23, were each sentenced yesterday to serve 36 months in prison on bank fraud and conspiracy charges, and an additional, consecutive 24 months in prison for the identity theft charge. In addition, upon release from prison Arakelyan and Vardanyan were ordered to serve five years of supervised release and to pay $42,043 in restitution.
Arakelyan and Vardanyan were each charged in a criminal information filed on March 5, 2012, in the U.S. District Court in Oakland, with one count of conspiracy to commit bank fraud, one count of bank fraud and one count of aggravated identity theft. On March 20, 2012, Arakelyan and Vardanyan pleaded guilty to these crimes in Oakland and U.S. District Judge Claudia Wilken pronounced the sentences.
“These sentences send a clear message that if you take part in a fraud scheme that cheats consumers out of their hard earned money, you will pay a significant price,” said Assistant Attorney General Breuer. “No matter the sophistication or size of the scheme, we are determined to bring to justice those who engage in these kinds of frauds.”
“By employing an identity theft and bank fraud scheme, the defendants in this case attempted to make a fast buck at the expense of hard-working, law abiding citizens. Instead, they discovered a cold hard truth – crime does not pay,” said U.S. Attorney Haag. “Hopefully, the sentences in this case will serve as a deterrent to individuals who may be considering a similar scheme – you will be caught and you will be prosecuted to the fullest extent of the law.”
“This case represents a clear example of the successful cooperation between federal, state and local law enforcement authorities to aggressively investigate and hold accountable criminal organizations and individuals who target our financial payment systems,” said Special Agent in Charge Adelmann.
Arakelyan and Vardanyan admitted that in or about July 2011, they participated in a scheme to defraud bank account holders and financial institutions by obtaining 952 stolen bank cards and traveling to Northern California to withdraw from ATMs as much money as possible using these stolen bank accounts. According to court documents, Arakelyan and Vardanyan possessed two loaded firearms, a GPS device pre-programmed with ATM locations and eight mobile telephones, all to further their scheme.
The information charged that these stolen cards were linked to a 2011 theft of a reported 94,000 debit and credit card account numbers from customers buying goods at 84 Michaels Stores Inc. stores across the United States. The perpetrators of that security breach replaced about 84 authentic personal identification number pads, used by the stores to process debit and credit card purchases, with fraudulent pads from which they downloaded customers’ banking information. After this breach, financial institutions reported tens of thousands of incidents of fraudulent activity linked to customers who had visited the affected Michaels stores. Arakelyan and Vardanyan are among those who executed one aspect of this scheme.
This case is being prosecuted by Trial Attorney Paul Rosen of the Fraud Section in the Justice Department’s Criminal Division and Special Assistant U.S. Attorney Tamara Weber of the Northern District of California. The investigation was conducted by the U.S. Secret Service San Francisco field office and the Pleasant Hill, Calif., Police Department, with assistance from the U.S. Secret Service Los Angeles and Chicago field offices, as well as the Glendale, Calif. Police Department.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
Justice Department Signs Agreement with Kansas City, Missouri, to Ensure Civic Access for People with DisabilitiesRead the Press Release
WASHINGTON – The Justice Department today announced an agreement with Kansas City, Mo., to improve access to all aspects of civic life for people with disabilities. The agreement is the 200th settlement reached under Project Civic Access (PCA), the department’s wide-ranging initiative to ensure that cities, towns and counties throughout the country comply with the Americans with Disabilities Act (ADA).
“I commend Kansas City officials for their commitment to provide equal access to civic life for all residents and visitors with disabilities in what is the Justice Department’s milestone 200th Project Civic Access agreement,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The Justice Department has positively impacted the lives of more than four and a half million individuals with disabilities through Project Civic Access, and as a result, the injustice of not being able to enter government buildings or participate in government programs, services and activities is becoming a thing of the past for Americans with disabilities.”
“We are committed to helping every resident fully participate in all Kansas City has to offer,” said Kansas City Mayor Sly James. “Our city has historically been a leader on issues of inclusion and equal access, and I am proud we are once again demonstrating that commitment. This agreement will ensure that the city of Kansas City can be explored and enjoyed, traversed and traveled by everyone.”
“Although not all of us are disabled today, any of us could become disabled tomorrow. The signing of this agreement is not only a commitment to the disabled community, but also an act of conscience that strengthens the entire community,” said David H. Westbrook, Chair of the Kansas City Mayor’s Committee for People with Disabilities. “We talk a lot about being one of the nation’s most livable cities. Accessibility and livability are inseparable. To everyone’s benefit, we will do all we can to support the mayor and city council in fulfilling this promise.”As part of the PCA initiative, Justice Department investigators, attorneys and architects survey state and local government facilities, services and programs in communities across the country to identify the modifications needed for compliance with ADA requirements. The agreements are tailored to address the steps each community must take to improve access. PCA agreements typically include requirements to make physical modifications to facilities so that, among other elements, parking, routes into buildings, entrances, assembly areas, restrooms, service counters and drinking fountains are accessible to people with disabilities. Other common provisions address effective communication (e.g., telephone communications), grievance procedures, polling places, emergency management procedures and policies, sidewalks, domestic violence programs, and ensuring that an entity’s official website and other web-based services are accessible to persons with disabilities.
Today’s agreement was reached under Title II of the ADA, which prohibits discrimination against individuals with disabilities by state and local governments. The agreement requires most actions to be completed within three years. For the required accessibility modifications to sidewalks, pedestrian crossings, transportation stops and curb ramps, the city will work with the disability community to prioritize and complete these modifications within six years. The department will actively monitor compliance with the agreement until it has confirmed that all required actions have been completed.
People interested in finding out more about the ADA, today’s agreement with Kansas City, the Project Civic Access initiative, or the ADA Best Practices Tool Kit for State and Local Governments can access the ADA website at www.ada.gov or call the toll-free ADA information line at (800) 514-0301 or (800) 514-0383 (TTY). The agreement with Kansas City is available at www.ada.gov/Kansas_city_pca/kansas_city_pca_sa.htm, and a fact sheet on the agreement is available at www.ada.gov/Kansas_city_pca/kansas_city_pca_fctsht.htm.Co-Owners of Houston-Area Durable Medical Equipment Company Sentenced to Prison for Role in $1.18 Million Medicare FraudRead the Press Release
WASHINGTON – The former co-owners of a Houston-area durable medical equipment (DME) company were sentenced today in Houston to each serve 87 months in prison for their participation in a $1.18 million Medicare fraud scheme, announced the Department of Justice, the FBI and the Department of Health and Human Services (HHS).
Clifford Ubani, 54, and Princewill Njoku, 53, the former co-owners of Family Healthcare Services, were sentenced by U.S. District Judge Gray H. Miller in the Southern District of Texas in Houston. In addition to their prison terms, each was sentenced to serve three years of supervised release and ordered to pay $566,451 in restitution jointly and severally with their co-defendants. In September and October 2010, respectively, Ubani and Njoku pleaded guilty to one count of conspiracy to commit health care fraud.
In June 2011, Ubani and Njoku were each sentenced to serve 108 months in prison for their roles in a separate $5.2 million home health care fraud scheme. Today’s sentences and the previously imposed sentences will be served concurrently.
According to court documents and other evidence presented to the court, Family, a Houston DME company, purported to provide medical equipment to Medicare beneficiaries. According to court documents, Ubani paid co-conspirators to recruit Medicare beneficiaries for the purpose of Family filing claims with Medicare for DME that was medically unnecessary or not provided. In particular, Family would bill Medicare for unnecessary medical orthotic braces that were marketed as “arthritis kits” or “ortho kits.” The co-conspirators would then falsify documents to support the fraudulent payments from Medicare.
Ubani and Njoku are the third and fourth defendants sentenced in connection with this scheme. One other defendant, Michelle Turner, awaits sentencing following her February 2012 conviction after a one-week jury trial.
The sentences were announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney Kenneth Magidson of the Southern District of Texas; Special Agent-In-Charge Stephen L. Morris of the FBI’s Houston Field Office; Special Agent-in-Charge Mike Fields of the Dallas Regional Office of HHS’s Office of the Inspector General (HHS-OIG) and the Texas Attorney General’s Medicaid Fraud Control Unit (OAG-MFCU).
This case is being prosecuted by Trial Attorney Charles D. Reed and Deputy Chief Sam S. Sheldon of the Criminal Division’s Fraud Section. The case was investigated by the FBI, HHS-OIG, Texas OAG-MFCU and the Federal Railroad Retirement Board-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 Texas.
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.
$1 Million in Restitution Payments Announced to Preserve North Carolina WetlandsRead the Press Release
WASHINGTON – North Carolina’s Waccamaw River watershed will benefit from a $1 million restitution order from a federal court, funding environmental projects to acquire and preserve wetlands in an area damaged by illegal releases of wastewater from a corporate hog farm, announced Ignacia S. Moreno, Assistant Attorney General of the Justice Department’s Environment and Natural Resources Division; U.S. Attorney for the Eastern District of North Carolina Thomas G. Walker; Director Greg McLeod from the North Carolina State Bureau of Investigation; and Camilla M. Herlevich, Executive Director of the North Carolina Coastal Land Trust.
Freedman Farms Inc. was sentenced in February 2012 to five years of probation and ordered to pay $1.5 million in fines, restitution and community service payments for violating the Clean Water Act when it discharged hog waste into a stream that leads to the Waccamaw River. William B. Freedman, president of Freedman Farms, was sentenced to six months in prison to be followed by six months of home confinement. Freedman Farms also is required to implement a comprehensive environmental compliance program and institute an annual training program.
In an order issued on April 19, 2012, the court ordered that the defendants would be responsible for restitution of $1 million in the form of five annual payments starting in January 2013, which the court will direct to the North Carolina Coastal Land Trust (NCCLT). The NCCLT plans to use the money to acquire and conserve land along streams in the Waccamaw watershed. The court also directed a $75,000 community service payment to the Southern Environmental Enforcement Network, an organization dedicated to environmental law enforcement training and information sharing in the region.
“The resolution of the case against Freedman Farms demonstrates the commitment of the Department of Justice to enforcing the Clean Water Act to ensure the protection of human health and the environment,” said Assistant Attorney General Moreno. “The court-ordered restitution in this case will conserve wetlands for the benefit of the people of North Carolina. By enforcing the nation’s environmental laws, we will continue to ensure that concentrated animal feeding operations (CAFOs) operate without threatening our drinking water, the health of our communities and the environment.”
“This office is committed to doing our part to hold accountable those who commit crimes against our environment, which can cause serious health problems to residents and damage the environment that makes North Carolina such a beautiful place to live and visit,” said U.S. Attorney Walker.
“This case shows what we can accomplish when our SBI agents work closely with their local, state and federal partners to investigate environmental crimes and hold the polluters accountable,” said Director McLeod. “We’ll continue our efforts to fight illegal pollution that damages our water and puts the public’s health at risk.”
“The Waccamaw is unique and wild,” said Director Herlevich of the North Carolina Coastal Land Trust. “Its watershed includes some of the most extensive cypress gum swamps in the state, and its headwaters at Lake Waccamaw contain fish that are found nowhere else on Earth. We appreciate the trust of the court and the U. S. Attorney, and we look forward to using these funds for conservation projects in a river system that is one of our top conservation priorities.”
According to evidence presented in court, in December 2007 Freedman Farms discharged hog waste into Browder’s Branch, a tributary to the Waccamaw River that flows through the White Marsh, a large wetlands complex. Freedman Farms, located in Columbus County, N.C., is in the business of raising hogs for market, and this particular farm had some 4,800 hogs. The hog waste was supposed to be directed to two lagoons for treatment and disposal. Instead, hog waste was discharged from Freedman Farms directly into Browder’s Branch.
The Clean Water Act is a federal law that makes it illegal to knowingly or negligently discharge a pollutant into a water of the United States.
The Freedman case was investigated by the U.S. Environmental Protection Agency (EPA) Criminal Investigation Division, the U.S. Army Corps of Engineers and the North Carolina State Bureau of Investigation, with assistance from the EPA Science and Ecosystem Support Division. The case was prosecuted by Assistant U.S. Attorney J. Gaston B. Williams of the Eastern District of North Carolina and Trial Attorney Mary Dee Carraway of the Environmental Crimes Section of the Justice Department’s Environment and Natural Resources Division.
The North Carolina Coastal Land Trust is celebrating its 20th anniversary of saving special lands in eastern North Carolina. The organization has protected nearly 50,000 acres of lands with scenic, recreational, historic and ecological values. North Carolina Coastal Land Trust has saved streams and wetlands that provide clean water, forests that are havens for wildlife, working farms that provide local food and nature parks that everyone can enjoy. More information about the Coastal Land Trust is available at www.coastallandtrust.org.
Tuesday 24 July 2012
U.S. Customs and Border Protection Officer Pleads Guilty in Miami to Civil Rights Violations for Sexual Assault of Three WomenRead the Press Release
WASHINGTON – U.S. Customs and Border Protection (CBP) Officer Paulo Morales, 47, of Miami, pleaded guilty today in U.S. District Court in Miami to three civil rights offenses for sexually groping three women in his custody, the Justice Department announced today.
During the plea proceedings, Morales admitted that on various dates in January 2011, while working as an officer with CBP at the Miami International Airport, he groped the breasts of three separate women without their consent and while they were in the custody of CBP.
“Officers who sexually assault individuals in their custody defy the public trust bestowed upon law enforcement officials, and their actions will not be tolerated,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The Justice Department will continue to investigate and prosecute criminal civil rights violations committed by law enforcement officials.”
“This former Customs and Border Protection officer misused his office and his power to sexually assault three women in his custody at Miami International Airport, in violation of their civil rights,” said U.S. Attorney for the Southern District of Florida Wifredo A. Ferrer. “My office and the Department of Justice are fully committed to protecting the civil rights of our citizens from all types of abuses.”
“Immigration and Customs Enforcement’s Office of Professional Responsibility is dedicated to aggressively investigating all allegations of criminal and serious misconduct involving employees within our area of responsibility,” said Southeast Region Special Agent in Charge David P. D’Amato of U.S. Immigration and Customs Enforcement, Office of Professional Responsibility (ICE-OPR). “ICE-OPR takes great pride in protecting the integrity of all ICE and CBP employees. A law enforcement badge is a privilege; we will not tolerate its misuse as a key to assert power or unlawful force over those in one’s custody.”
Sentencing is scheduled for Oct. 26, 2012. Morales faces a maximum sentence of three years in prison and a fine of up to $300,000.
This case is being investigated by ICE-OPR and CBP Internal Affairs, and is being prosecuted by Trial Attorney Henry Leventis of the Civil Rights Division and Assistant U.S. Attorney William White of the U.S. Attorney's Office for the Southern District of Florida.
Texas Return Preparer Sentenced to Jail for Preparing False Tax ReturnsRead the Press Release
Eddye L. Lovely, a tax return preparer from Tomball, Texas, was sentenced today to 57 months in federal prison, the Justice Department and Internal Revenue Service (IRS) announced. Lovely appeared before U.S. District Judge Nancy F. Atlas in Houston.
On April 6, 2011, Lovely was indicted on 14 counts of aiding and assisting in the preparation of false tax returns. On Sept. 28, 2011, Lovely was charged, pursuant to a superseding indictment, with 16 counts of aiding and assisting in the preparation of false tax returns comprising the original 14 counts plus two additional counts. According to the superseding indictment, the court had released Lovely on bond pending trial and ordered him not to prepare any tax returns or commit additional crimes. While on pre-trial release, Lovely aided and assisted in the preparation of materially false 2010 tax returns for two additional clients. He pleaded guilty on Dec. 12, 2011 to three of the 16 counts charged in the superseding indictment. Following a pretrial hearing, the court revoked Lovely’s bond and ordered him detained.
According to the superseding indictment and plea agreement, Lovely owned and operated “The Tax Master,” a tax return business located in Harris County, Texas. Lovely prepared tax returns that contained fabricated Schedule C losses for businesses that the taxpayers did not own or operate, as well as false or inflated Schedule A deductions for charitable contributions and other expenses.
The court found that the tax loss associated with the three charges to which Lovely pleaded guilty as well as all relevant conduct associated with this case was more than $1 million.
Kathryn Keneally, Assistant Attorney General for the Justice Department’s Tax Division, commended the investigative efforts of the IRS agents involved in the case and Tax Division Trial Attorneys Tracy Gostyla and Kathryn Ward, who prosecuted the case.
Missouri Man Sentenced to 42 Months in Prison for Vandalism and Arson of Biracial Man’s HomeRead the Press Release
WASHINGTON – A Missouri man was sentenced today to 42 months in prison for his role in the vandalism and arson of a biracial man’s home in Independence, Mo., the Department of Justice announced.
Charles Wilhelm, 23, of Independence, was sentenced in the Western District of Missouri by U.S. District Judge Dean Whipple.
On March 8, 2012, Wilhelm pleaded guilty to one count of conspiracy and one count of violating the Fair Housing Act. Wilhelm’s co-conspirators, Teresa Witthar and David Martin, pleaded guilty on Feb. 2, 2012, and March 7, 2012, respectively, for their roles in vandalizing and burning down Nathaniel Reed’s home in Independence.
According to the plea agreement filed with the court, Wilhelm, Witthar and Martin conspired to intimidate and scare Reed, a biracial man, into moving out of the Highland Manor Mobile Home Park in Independence, in part because of his race. On or about June 6, 2006, Wilhelm, along with Witthar and Martin, entered Reed’s home, without his permission, and vandalized it by writing at least 15 racially derogatory slurs on the walls of his trailer.
Two days later, on or about June 8, 2006, Witthar drove Wilhelm and Martin to a neighborhood behind Reed’s home so that they could set fire to it without being detected. Witthar waited in her vehicle for Wilhelm and Martin to set the fire and then provided them a ride back to the Highland Manor Mobile Home Park.
“The racially motivated destruction of the victim's home strikes at the heart of the protections afforded by our civil rights laws,” said Thomas E. Perez, Assistant Attorney General of the Civil Rights Division. “The Justice Department will continue to act aggressively to ensure that all Americans are able to live in their homes without fear of racial violence.”
“This defendant violated another person’s civil rights and endangered the safety of many nearby residents,” said Acting U.S. Attorney for the Western District of Missouri David M. Ketchmark. “Today’s sentence makes an important statement that race-based crime carries serious punishment. Racially-motivated attacks are offensive to our community and will not be tolerated by our justice system. “
Witthar was sentenced to 63 months in prison on June 18, 2012. Sentencing for Martin is scheduled for Aug. 2, 2012.
These guilty pleas were the result of a cooperative effort between the U.S. Attorney’s Office for the Western District of Missouri and the Justice Department’s Civil Rights Division. This case was investigated by the Kansas City Division of the FBI. It is being prosecuted by Acting U.S. Attorney Ketchmark for the Western District of Missouri and Trial Attorney Sheldon L. Beer of the Civil Rights Division.
Justice Department Signs Agreements in Texas and Georgia to Ensure Civic Access for People with DisabilitiesRead the Press Release
WASHINGTON – The Justice Department today announced agreements with Wills Point, Texas, and Randolph County, Ga., to improve access to all aspects of civic life for individuals with disabilities. The agreements were reached under Project Civic Access (PCA), the department’s wide-ranging initiative to ensure that cities, towns and counties throughout the country comply with the Americans with Disabilities Act (ADA). The department has now reached 199 agreements under the PCA initiative.
“This week marks the 22nd anniversary of the passage of the ADA as the Justice Department continues to pursue nationwide compliance with this great civil rights law through its vigilant enforcement efforts,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “Through Project Civic Access the Justice Department has worked with large metropolitan areas with populations in the millions as well as small rural communities with residents numbering in the thousands in order to ensure that courthouses, parks, community centers, museums, libraries and all other state and local government buildings, programs, services and activities in these communities are accessible to individuals with disabilities. I commend the officials in Wills Point and Randolph County for making this commitment to provide equal access to their residents and visitors with disabilities.”
PCA was initiated to ensure that people with disabilities have an equal opportunity to participate in civic life, a fundamental part of American society. As part of the PCA initiative, Justice Department investigators, attorneys and architects survey state and local government facilities, services and programs in communities across the country to identify the modifications needed for compliance with ADA requirements.
The agreements are tailored to address the steps each community must take to come into compliance with the ADA. PCA agreements typically include requirements to make physical modifications to public facilities so that, among other elements, parking, routes into buildings, entrances, assembly areas, restrooms, service counters and drinking fountains are accessible to people with disabilities. Other common provisions address effective communication (e.g. telephone communications), grievance procedures, polling places, emergency management procedures and policies, sidewalks, domestic violence programs, and ensuring that an entity’s official website and other web-based services are accessible to persons with disabilities.
According to census data, 23.8 percent of residents in Wills Point and 27.3 percent of residents in Randolph County have a disability.
Today’s agreements were reached under Title II of the ADA, which prohibits discrimination against individuals with disabilities by state and local governments. The agreement with Wills Point requires most actions to be completed within three years. For the required accessibility modifications to sidewalks, pedestrian crossings, transportation stops and curb ramps, the city will work with the disability community to prioritize and complete these modifications within five years. The Randolph County agreement will remain in effect for three years. The department will actively monitor compliance with the agreements until it has confirmed that all required actions have been completed.
People interested in finding out more about the ADA, today’s agreements, the PCA initiative or the ADA Best Practices Tool Kit for State and Local Governments can access the ADA website at www.ada.gov or call the toll-free ADA Information Line at 800-514-0301 or 800-514-0383 (TTY).
The agreement with Wills Point is available at www.ada.gov/wills-point-pca/wills-point-sa.htm, and a fact sheet on the agreement is available at www.ada.gov/wills-point-pca/wills-point-sa-fact_sheet.htm. The agreement with Randolph County is available at www.ada.gov/randolph-co-pca/randolph-co-sa.htm, and a fact sheet on the agreement is available at www.ada.gov/randolph-co-pca/randolph-co-fact_sheet.htm.
Justice Department Announces Consent Decree with City of New Orleans to Resolve Allegations of Unlawful Misconduct by New Orleans Police DepartmentRead the Press Release
The Department of Justice announced today that the United States has entered into a comprehensive, cooperative consent decree with the city of New Orleans to resolve allegations of unlawful police misconduct by the New Orleans Police Department (NOPD). The filing of the consent decree in federal court in New Orleans continues the process of reforming the NOPD and begins federal court oversight of that reform to ensure effective and constitutional policing in New Orleans.
“ Today’s action represents a critical step forward. It reaffirms the Justice Department’s commitment to the highest standards of fairness and professionalism and underscores our determination to work alongside our law enforcement partners to protect not only the safety – but the essential civil rights – of everyone in this country,” said Attorney General Eric Holder.
The consent decree requires NOPD to make broad changes in policies and practices related to use of force; stops, searches and arrests; custodial interrogations; photographic line-ups; preventing discriminatory policing; community engagement; recruitment; training; officer assistance and support; performance evaluations and promotions; supervision; misconduct investigations; and NOPD’s system of secondary employment, also known as paid details.
The agreement also requires more transparency by NOPD, encourages greater civilian oversight and increases community interaction and partnerships. The agreement requires close and comprehensive oversight by a court appointed monitoring team, which will periodically submit public reports regarding NOPD’s progress. The consent decree will remain in effect until the city demonstrates it has complied with its provisions for two years, or until the monitor’s assessment of the agreement’s outcome measures demonstrates sustained and continuing improvement in constitutional policing.
“The consent decree, which is unprecedented in scope and nature, is designed to ensure that comprehensive, sustainable reforms are made in the New Orleans Police Department,” said Assistant Attorney General for the Civil Rights Division Thomas E. Perez. “We will continue our partnership with Mayor Landrieu, the police department and the community to ensure that the critical reforms are achieved.”
“This groundbreaking agreement represents a critical milestone in the recovery of New Orleans and a victory for our city, its police department and most of all its citizens,” said U.S. Attorney for the Eastern District of Louisiana Jim Letten. “The consent decree will serve as a blueprint for the New Orleans Police Department, so that it may become a world class police department – one which will be more effective in protecting its citizens against all threats and dangers.
The consent decree is the product of the United States’ civil pattern or practice investigation of NOPD, which began in May 2010 and resulted in a comprehensive report in which the department found that NOPD engages in a pattern or practice of misconduct that violates the Constitution and other federal laws. The Justice Department’s investigation found a pattern or practice of excessive force, including stops, searches and arrests in violation of the Fourth Amendment. The investigation also found evidence of discriminatory policing based on race, ethnicity, gender and sexual orientation. This civil pattern or practice investigation was separate from the numerous federal criminal civil rights prosecutions of NOPD officers during this time period.
The Justice Department’s civil pattern or practice investigation was informed by 12 experts on police practices, including a number of current and former police professionals. The investigation included numerous onsite visits and observations of police-community interactions, including interviews with New Orleans officials, NOPD command staff, supervisors and police officers. Additionally, the department’s investigation reviewed more than 36,000 pages of documents and held interviews with residents, community groups and other stakeholders.
The investigation was conducted in accordance with the police misconduct provision (Section 14141) of the Violent Crime Control and Law Enforcement Act of 1994 (VCCLEA) , the anti-discrimination provisions of the Omnibus Crime Control and Safe Streets Act of 1968, and Title VI of the Civil Rights Act of 1964. Under Section 14141 of VCCLEA, the Justice Department has the authority to file civil suits against law enforcement agencies that engage in a pattern or practice of misconduct. The department also has the authority under the Safe Streets Act and Title VI to file suit against law enforcement agencies that engage in discrimination if they receive federal funds.
The city of New Orleans and NOPD cooperated throughout the investigation, from inviting the Justice Department’s Civil Rights Division to conduct the investigation, to agreeing to enter a consent decree at its conclusion. For the past several months, New Orleans and the department have been negotiating this consent decree, designed to serve as a blueprint for reforming NOPD. NOPD’s implementation of the agreement will be overseen by the federal court, including a court-approved monitor to be jointly selected by the city and the United States.
The Civil Rights Division currently has more active police pattern or practice investigations of law enforcement agencies than any other time in the division’s history. Increasingly, these investigations, including the New Orleans Police Department investigation, are initiated at the request of the law enforcement agency itself.
Former North Carolina Builder Arrested and Charged with Tax Obstruction and Conversion of Government PropertyRead the Press Release
William B. Clayton, a residential builder formerly of Corolla, N.C., was arrested yesterday on charges of obstructing the tax laws and converting government property, the Justice Department and Internal Revenue Service (IRS) announced. Clayton had his initial appearance today before U.S. Magistrate Judge William A. Webb in the Eastern District of North Carolina.
Clayton was charged in a two-count indictment returned by a federal grand jury on June 19, 2012, in the Eastern District of North Carolina and unsealed today. The indictment charges Clayton with one count of corruptly endeavoring to obstruct and impede the due administration of the Internal Revenue laws and one count of knowingly converting and disposing of U.S. government property.
According to the indictment, Clayton failed to file federal income tax returns over a six-year period, resulting in the assessment of taxes and penalties and the initiation of collection proceedings by the IRS. Between May 2007 and August 2010, Clayton took steps to obstruct the IRS’s efforts to collect his unpaid tax liabilities, such as concealing property from the IRS and destroying property owned by the IRS but previously built and owned by Clayton. According to the charging instrument, in an effort to pay down Clayton’s tax liabilities, the IRS scheduled a public auction of Clayton’s former property. In the days leading up to the auction, Clayton committed, or caused the commission of, various acts of destruction and demolition at the Corolla property, including destroying an outdoor pool deck and pool house, forcibly removing a guest house from the property and transporting it to a non-consenting neighbor’s property, and forcibly removing cabinets, counter tops, a kitchen island, sinks, toilets and light fixtures.
If convicted, Clayton could face a maximum potential sentence of three years in prison and a fine of $250,000 on the tax obstruction charge, and 10 years in prison and a fine of $250,000 on the conversion of government property charge.
This case was investigated by IRS-Criminal Investigation. It is being prosecuted by Trial Attorney Adam Hulbig of the Justice Department’s Tax Division.
An indictment is merely an accusation. The defendant is presumed innocent unless proven guilty beyond a reasonable doubt.
Detroit-Area Health Care Clinic Owner Sentenced to Serve60 Months in Prison for Role in $8.5 MillionDiagnostic Testing Fraud SchemeRead the Press Release
WASHINGTON – The owner of a Detroit-area health care clinic was sentenced today to serve 60 months in prison for his leading role in an $8.5 million Medicare fraud scheme, the Departments of Justice and Health and Human Services (HHS) announced.
Miami-area resident Emilio Haber, 53, was sentenced by U.S. District Judge Patrick Duggan in the Eastern District of Michigan in Detroit. In addition to his prison term, Haber was sentenced to serve three years of supervised release and was ordered to pay $6,341,000 in restitution, joint and several with his co-defendants, and was ordered to forfeit approximately $99,000 seized from bank accounts he controlled.
On Oct. 26, 2011, Haber pleaded guilty to one count of conspiracy to commit health care fraud. According to plea documents, Haber conceived and oversaw fraud schemes at two clinics, Ritecare LLC and CompleteHealth LLC. Haber incorporated and opened Ritecare and CompleteHealth in the state of Michigan in 2007. CompleteHealth merged into Ritecare in July 2008.
According to court documents, while operating CompleteHealth and Ritecare, Haber and his co-conspirators billed Medicare for medically unnecessary tests and services, including, but not limited to, nerve conduction studies. Haber obtained patients for the clinics through the payment of kickbacks to Medicare beneficiaries and patient recruiters. Haber admitted that he and other co-conspirators paid patient recruiters $100-$150 per patient obtained, with $50-$75 to go to the patient in exchange for visiting Ritecare and subjecting themselves to medically unnecessary tests.
To justify the medically unnecessary tests, Haber admitted that he and other co-conspirators told patient recruiters to instruct the patients to feign certain symptoms. Haber and other co-conspirators also directly instructed patients to feign symptoms. The kickbacks paid to the recruiters and the patients were contingent upon the Medicare beneficiaries identifying the symptoms necessary to justify medically unnecessary tests. Consequently, the patients’ medical records contained false or fabricated symptoms allowing Ritecare to deceive Medicare as to the legitimacy and medical necessity of the tests it performed.
The department said that between approximately August 2007 and approximately October 2009, Haber and his co-conspirators at CompleteHealth and Ritecare submitted and/or caused to be submitted approximately $8.5 million in fraudulent claims to the Medicare program for medical and testing services that were medically unnecessary and procured through the payment of kickbacks. Medicare paid approximately $6.3 million of those claims.
Today’s sentencing 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; Acting Special Agent in Charge of the FBI’s Detroit Field Office Edward J. Hanko; and Special Agent in Charge Lamont Pugh III of the HHS Office of Inspector General’s (OIG) Chicago Regional Office.
This case was prosecuted by Assistant Chief Gejaa T. Gobena of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Philip A. Ross of the Eastern District of Michigan. It was investigated by the FBI and HHS-OIG, and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Michigan.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,330 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 HEAT team, go to: www.hhs.gov/stopmedicarefraud.
Alabama Real Estate Investor Pleads Guilty to Conspiracies to Rig Bids and Commit Mail Fraud for the Purchase of Real Estate at Public Foreclosure AuctionsRead the Press Release
An Alabama real estate investor pleaded guilty today for his role in conspiracies to rig bids and commit mail fraud at public real estate foreclosure auctions in southern Alabama, the Department of Justice announced.
Charges were filed on June 25, 2012, in the U.S. District Court for the Southern District of Alabama in Mobile, Ala., against David R. Bradley. Bradley was charged with one count of bid rigging and one count of conspiracy to commit mail fraud. According to the plea agreement, Bradley has agreed to cooperate with the department’s ongoing investigation.
According to court documents, Bradley conspired with others not to bid against one another at public real estate foreclosure auctions in southern Alabama. After a designated bidder bought a property at the public auctions, which typically take place at the county courthouse, the conspirators would generally hold a secret, second auction, at which each participant would bid the amount above the public auction price he or she was willing to pay. The highest bidder at the secret, second auction won the property.
Bradley was also charged with conspiring to use the U.S. mail to carry out a scheme to acquire title to rigged foreclosure properties sold at public auctions at artificially suppressed prices, to make and receive payoffs to co-conspirators and to cause financial institutions, homeowners and others with a legal interest in rigged foreclosure properties to receive less than the competitive price for the properties. Bradley participated in the bid-rigging and mail fraud conspiracies from as early as June 2003 until at least September 2008.
“By first rigging the public auctions, then bidding amongst themselves in secret afterwards, the conspirators illegally profited at the expense of distressed homeowners,” said Scott D. Hammond, Deputy Assistant Attorney General of the Antitrust Division’s Criminal Enforcement Program. “This ongoing investigation into real estate foreclosure auctions underscores the division’s commitment to protecting competition in real estate markets around the country.”
FBI Special Agent in Charge of the Mobile FBI Office Stephen E. Richardson re-affirmed his commitment to pursuing these complex economic investigations, stating, “This investigation has sent a strong message to the community at large, and the real estate community specifically, that abuses within the real estate industry will not be tolerated. Fraud related to home mortgage investments can have financial implications both locally and nationally, and the integrity of the system must be vigilantly maintained.”
Including today’s plea, to date, six individuals—Harold H. Buchman, Allen K. French, Bobby Threlkeld Jr., Steven J. Cox, Lawrence B. Stacy and Bradley—and one company—M & B Builders LLC— have pleaded guilty in the U.S. District Court for the Southern District of Alabama in connection with the investigation. Additionally, on June 28, 2012, real estate investors Robert M. Brannon and Jason R. Brannon, and their company, J & R Properties LLC, were indicted with participating in bid rigging and conspiracy to commit mail fraud at public real estate auctions in southern Alabama.
Each 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 a Sherman Act charge may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime if either amount is greater than the statutory maximum fine. Each count of conspiracy to commit mail fraud carries a maximum penalty of 20 years in prison and a fine in an amount equal to the greatest of $250,000, twice the gross gain the conspirators derived from the crime or twice the gross loss caused to the victims of the crime by the conspirators.
The investigation into fraud and bid rigging at certain real estate foreclosure auctions in southern Alabama is being conducted by the Antitrust Division’s Atlanta Field Office and the FBI’s Mobile Office, with the assistance of the U.S. Attorney’s Office for the Southern District of Alabama. Anyone with information concerning bid rigging or fraud related to public real estate foreclosure auctions should contact the Antitrust Division’s Atlanta Field Office at 404-331-7100 or visit www.justice.gov/atr/contact/newcase.htm.
Today’s 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.
Monday 23 July 2012
U.S. Restrains More Than $3 Million in Corruption Proceeds Related to Former Governor of NigeriaRead the Press Release
WASHINGTON – Through an application to register and enforce two orders from United Kingdom courts, the Department of Justice has secured a restraining order against more than $3 million in corruption proceeds located in the United States related to James Onanefe Ibori, the former governor of Nigeria’s oil-rich Delta State, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Immigration and Customs Enforcement (ICE) Director John Morton.
The application, which was filed under seal on May 16, 2012, in U.S. District Court in the District of Columbia, seeks to restrain assets belonging to Governor Ibori and Bhadresh Gohil, Ibori’s former English solicitor, that are proceeds of corruption. Specifically, it seeks to restrain a mansion in Houston and two Merrill Lynch brokerage accounts. U.S. District Judge Lamberth granted the application and issued a restraining order under seal on May 21, 2012. The department was notified today that its application to unseal the restraining order was granted.The United States is working with the United Kingdom’s Crown Prosecution Service and the Metropolitan Police Service to forfeit these corruption proceeds.
According to the application, Governor Ibori served as the governor of Nigeria’s oil-rich Delta State from 1999 to 2007, and misappropriated millions of dollars in Delta State funds. He laundered those proceeds through a myriad of shell companies, intermediaries and nominees in several jurisdictions, including the United Kingdom, with the help of Gohil. Although Nigeria’s Constitution prohibits state governors from maintaining foreign bank accounts and serving as directors of private companies, Governor Ibori and his associates accumulated millions of dollars in assets in the United Kingdom and the United States, according to the application.
Governor Ibori was convicted in the United Kingdom of money laundering and conspiracy to defraud and was sentenced by a British court on April 18, 2012, to 13 years in prison. Gohil was also convicted in November 2010 of money laundering and prejudicing a money laundering investigation and was sentenced by a British court to 10 years in prison.
“Instead of working to benefit the people of the Nigerian Delta, Governor Ibori pilfered state funds and accumulated immense wealth in the process,” said Assistant Attorney General Breuer. “He conspired with Mr. Gohil to funnel millions of dollars in corruption proceeds out of Nigeria and into bank accounts and assets maintained in the names of shell companies and nominees. Through the Criminal Division’s Kleptocracy Asset Recovery Initiative, our message is clear: the United States will not be used as a safe haven for the ill-gotten gains of corrupt foreign officials.”
“This serves as a warning to those corrupt foreign officials who abuse their power for personal financial gain and then attempt to place those funds in the U.S. financial system,” said ICE Director Morton. “ICE’s Homeland Security Investigations (HSI) special agents will continue to work with our law enforcement partners at the Department of Justice Criminal Division’s Asset Forfeiture and Money Laundering Section to investigate and prosecute those involved in such illicit activities and hold corrupt foreign officials accountable by denying them the satisfaction of their illegal earnings.”
The case is being prosecuted by trial attorneys Woo S. Lee and Elizabeth Aloi of the Criminal Division’s Asset Forfeiture and Money Laundering Section. The case was investigated by ICE HSI’s Foreign Corruption Investigations Group, HSI Asset Identification and Removal Group in Miami and HSI Attaché London.
This case is part of the Justice Department’s Kleptocracy Asset Recovery Initiative. This initiative is carried out by a dedicated team of prosecutors in the Criminal Division’s Asset Forfeiture and Money Laundering Section, working in partnership with federal law enforcement agencies to forfeit the proceeds of foreign official corruption and where appropriate return those proceeds to benefit those harmed.
Individuals with information about possible proceeds of foreign corruption located in or laundered through institutions in the United States should contact federal law enforcement or send an email to [email protected].
ICE HSI’s Foreign Corruption Investigations Group in Miami targets corrupt foreign officials around the world that attempt to utilize U.S. financial institutions to launder illicit funds. The group conducts investigations into the laundering of proceeds emanating from foreign public corruption, bribery or embezzlement. The objective is to prevent foreign derived ill-gotten gains from entering the U.S. financial infrastructure, to seize identified assets in the United States and repatriate these funds on behalf of those affected by foreign official corruption.
Three Men Sentenced in Houston for Federal Hate Crimes Related to the Assault of African-American ManRead the Press Release
WASHINGTON – The Justice Department announced that Charles Cannon, 26, Michael McLaughlin, 41, and Brian Kerstetter, 33, were sentenced today by U.S. District Judge Kenneth Hoyt in Houston for their racially motivated assault of a 29-year-old African-American man.
Kerstetter was sentenced to 77 months in prison followed by three years of supervised release. Cannon was sentenced to 37 months in prison followed by three years of supervised release. And McLaughlin was sentenced to 30 months in prison followed by three years of supervised release.
On April 16, 2012, a federal jury found the defendants guilty of violating the Matthew Shepard and James Byrd Jr. Hate Crimes Prevention Act, which was enacted in October 2009. The evidence at trial established that on Aug. 13, 2011, the defendants approached the victim, who was waiting at a bus stop in downtown Houston. All three defendants were shirtless to display their tattoos known to reflect white supremacist beliefs. To further antagonize the victim, at least one defendant referred to the victim using a racial slur, and the defendants then surrounded and attacked the victim by punching and kicking him in the face, head and body. The defendants were arrested at the scene after a passerby called 911.
“James Byrd was murdered 14 years ago not far from Houston because he was African American, and today these defendants have been sentenced under the critical new law enacted in his name for viciously attacking an African-American because of the color of his skin,” said Thomas E. Perez, Assistant Attorney General of the Civil Rights Division. “It is a sad reality that violent acts of hate committed because of someone’s race are not a thing of the past, and the department will continue to use every available tool to identify and prosecute hate crimes whenever and wherever they occur.”
“The passage of the Matthew Shepard and James Byrd Jr. Hate Crimes Prevention Act of 2009 provided a powerful tool to law enforcement,” said Special Agent in Charge Stephen L. Morris of the FBI’s Houston Field Office. “With today’s sentencing, the message is clear. Our communities will not tolerate hate, and individuals who commit such despicable bias-motivated crimes have been put on notice. They will be brought to justice and prosecuted to the full extent of the law.”
This case was investigated by the Houston Division of the FBI in cooperation with the Houston Police Department. Assistance was also provided by the Harris County, Texas, District Attorney’s Office. The case was prosecuted by Trial Attorney Saeed Mody and Special Litigation Counsel Gerard Hogan of the Civil Rights Division of the Department of Justice.
Las Vegas Lawyer Pleads Guilty to Tax EvasionRead the Press Release
Charles C. LoBello, a Nevada-licensed attorney who practices business and personal injury law in Las Vegas, pleaded guilty in federal court to one count of tax evasion, the Justice Department and Internal Revenue Service (IRS) announced today. U.S. District Court Judge James Mahan presided over the plea hearing.
On June 22, 2010, a federal grand jury returned an indictment against LoBello, charging him with five counts of tax evasion and five counts of filing false personal income tax returns, for the tax years 2001 through 2005.
According to court documents, LoBello concealed over $900,000 in income from the United States, intentionally gave incomplete information to his bookkeeper and tax return preparer, and used personal checking accounts to hide large checks he received as legal fees. In the plea agreement, LoBello admitted that for the years 2001 through 2005 he owed an additional $260,625 in income taxes.
Sentencing is scheduled for Oct. 23, 2012. LoBello faces a maximum potential sentence of five years in prison and a fine of up to $250,000. According to the plea agreement, LoBello has agreed to pay restitution in the amount of $260,625 to the IRS, which represents his unpaid personal income tax liability for 2001 through 2005. He also agreed to pay all applicable interest and penalties on that tax liability.
Kathryn Keneally, Assistant Attorney General for the Justice Department’s Tax Division, thanked special agentsof IRS – Criminal Investigation, who investigated the case, assisting IRS revenue agents, and Tax Division Trial Attorneys Thomas W. Flynn, John P. Scully and Dennis R. Kihm, who prosecuted the case.
Florida Tax Preparer Sentenced to Federal Prison<br /> <br /> for Stolen Identity Refund FraudRead the Press Release
Ernst Pierre, a Port St. Lucie, Fla., tax preparer, was sentenced today to 51 months in federal prison for wire fraud and aggravated identity theft, the Justice Department and Internal Revenue Service – Criminal Investigation (IRS-CI) announced. Pierre was charged with a scheme to file false federal income tax returns using stolen identity information. Pierre was also ordered to pay over $266,000 in restitution to the IRS.
According to the indictment and Pierre’s admissions as part of his guilty plea, from October 2009 through May 2011, Pierre filed false tax returns for clients of Tax Max, a Port St. Lucie tax return preparation business he owned and operated. Pierre obtained the names and Social Security numbers of relatives of clients for whom he had prepared and submitted federal income tax returns and then fraudulently used those names and Social Security numbers as “dependents” on other client tax returns and on his own tax return. Pierre used these dependents to fraudulently inflate tax refunds.
Kathryn Keneally, Assistant Attorney General for the Justice Department’s Tax Division, thanked special agents of IRS-CI, who investigated the case, and Tax Division Trial Attorneys Justin K. Gelfand and Thomas J. Krepp, who prosecuted the case.
Attorney General Eric Holder and Philadelphia Mayor Michael Nutter Announce Partnership to Combat Violent CrimeRead the Press Release
Attorney General Eric Holder and Philadelphia Mayor Michael Nutter today announced the Department of Justice (DOJ) and city of Philadelphia’s Violent Crime Reduction Partnership (VCRP), which directs additional federal agents and technological resources to assist local law enforcement in combating violent crime. Attorney General Holder and Mayor Nutter were joined by VCRP participating agency leaders: U.S. Attorney for the Eastern District of Pennsylvania Zane David Memeger, Philadelphia Police Commissioner Charles Ramsey, Philadelphia District Attorney Seth Williams, Special Agents-in-Charge for the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), FBI, the Drug Enforcement Administration (DEA) and the U.S. Marshal for the Eastern District of Pennsylvania.
The VCRP, which was formed on June 4, 2012, is made up of more than 50 federal law enforcement officials, including agents, investigators and intelligence analysts and representatives of the Justice Department’s Criminal Division. These federal agents are working in close collaboration with the Philadelphia Police Department and Philadelphia District Attorney’s Office to prevent and combat violent and drug-related crime across the Philadelphia metropolitan area. During this four-month “surge” of federal law enforcement resources, these federal agencies are helping to build capacity, enhance training, coordinate community outreach efforts, bolster intelligence analysis capabilities and helping plan and execute sophisticated criminal investigations and prosecutions. Additionally, federal funding for the VCRP initiative provides new, state-of-the-art equipment designed to support ballistics identification in gun-related crimes. One such device is called the Integrated Ballistics Identification System which has the latest automation features and 3-D imaging technology, allowing firearms examiners to capture higher quality images of cartridge cases enhancing the ability of the Philadelphia Police Department and its partners to solve violent gun-related crimes.
In just the past six weeks, the partnership is already producing results. To date, VCRP has seized more than 80 firearms and netted more than 300 arrests for violent crime, drug, firearm and other offenses. As federal agencies are working closely with the Philadelphia Police Department in the target neighborhoods, the majority of those cases are being prosecuted in the local court system. The most recent federal case resulting from the ongoing VCRP arose on July 18, 2012, when ATF agents and Philadelphia police officers arrested eight suspects who were allegedly planning an armed robbery of drug traffickers. Each of the eight defendants in U.S. v. Whitfield was charged by criminal complaint.
“In these times of budgetary challenges - when police departments and other agencies are confronting growing demands with increasingly limited resources – the need for coordination among all relevant authorities has never been more critical,” said Attorney General Holder. “This surge of federal resources in Philadelphia – as well as others going on in certain cities -- will enhance our ability to work with local law enforcement by targeting federal agents and others to the areas where they're most needed so that we can better protect these communities.”
“The Violent Crime Reduction Partnership is the next stage in efforts by the Philadelphia Police Department, federal law enforcement partners like ATF, DEA, FBI and U.S. Marshals, and prosecutorial agencies like the District and U.S. Attorney's Offices, to target the most violent offenders in the City of Philadelphia and bring them to justice,” said Mayor Nutter. “We are grateful for the partnership and support of Attorney General Eric Holder and the entire Department of Justice as we work together to make the streets of our city safer.”
“The Violent Crime Reduction Partnership is already proving to be an effective tool for investigating and prosecuting serious violent offenders in Philadelphia’s highest crime neighborhoods,” said U.S. Attorney Memeger. “As U.S. Attorney, I remain committed to improving the quality of life for the citizens of my district, particularly for those who should not have to live with rampant violence and drug trafficking in their neighborhoods. My office will continue to support Police Commissioner Ramsey and the city of Philadelphia to combat the violence and other crimes that plague the city. I would like to commend the tireless efforts of the agents working for ATF, FBI, DEA and the Marshals Service who are making this initiative a success.”
“ATF, along with the Philadelphia Police Department and our DOJ partners, will focus on those who have no qualms about diminishing the quality of life in Philadelphia,” said ATF Special Agent-in-Charge Sheree L. Mixell. “Those violent career criminals who illegally possess, purchase and use firearms to carry out their criminal activities, will be identified and targeted for federal prosecution through this very important initiative.”
“The FBI, in this joint and coordinated effort to attack violent crime in Philadelphia, will work with our partners to disrupt and dismantle the criminal enterprises and organizations that seek to profit from violent crimes,” said FBI Special Agent-in-Charge of the Philadelphia Division George C. Venizelos. “This joint initiative not only rids our communities of criminal predators, but also sends the clear message that federal, state, county and local law enforcement agencies are working together to aggressively address the violent crime and drug problems that plague our communities.”
“Gun violence in Philadelphia has taken the lives of many people and brought pain and suffering to many families,” said Acting Special Agent-in-Charge of the DEA Philadelphia Division Vito S. Guarino. “Guns are frequently used by drug traffickers and organizations to protect their drugs, cash, territory, and also to intimidate citizens from providing information to police and to deter them from testifying in court. The DEA has committed its investigative resources to the Philadelphia Police Department and is working cooperatively along with other federal partners to confront gun violence and make Philadelphia the safe city that its citizens deserve.”
“The U.S. Marshals Service is committed to supporting the surge and improving the safety of the citizens of Philadelphia by continually targeting and apprehending the most dangerous fugitive felons, particularly those wanted for violent gun crimes,” said U.S. Marshal for the Eastern District of Pennsylvania David B. Webb.
“It is my hope that the Violent Crime Reduction Partnership will help us reduce the senseless acts of violence that currently plague the city of Philadelphia. By continuing to combine our resources and working together locally and nationally, I truly believe we will improve the safety and quality of life for all of our citizens,” said Philadelphia District Attorney Seth Williams.
Earlier this year, ATF personnel completed a similar four-month “surge” in Oakland, Calif., which Oakland Police Department officials have credited with contributing to a significant reduction in crime. The Justice Department is currently examining ways to provide this type of targeted assistance and relief to other metropolitan areas, as needed.
Copies of press releases and related documents can be found at www.justic.gov/usao/pae
A complaint is merely an accusation. All defendants are presumed innocent until and unless proven guilty in a court of law.
Friday 20 July 2012
Virginia Man Sentenced to 18 Months in Prisonfor Acting as Unregistered Agent for Syrian GovernmentRead the Press Release
Mohamad Anas Haitham Soueid, 48, a resident of Leesburg, Va., was sentenced today to 18 months in prison, followed by three years of supervised release, for collecting video and audio recordings and other information about individuals in the United States and Syria who were protesting the government of Syria and to providing these materials to Syrian intelligence agencies in order to silence, intimidate and potentially harm the protestors.
Lisa Monaco, Assistant Attorney General for National Security; Neil MacBride, U.S. Attorney for the Eastern District of Virginia; and James McJunkin, Assistant Director in Charge of the FBI Washington Field Office, made the announcement following sentencing by United States District Judge Claude M. Hilton.
Soueid, aka “Alex Soueid” or “Anas Alswaid,” a Syrian-born naturalized U.S. citizen, was charged by a federal grand jury on Oct. 5, 2011, in a six-count indictment in the Eastern District of Virginia. He was convicted of unlawfully acting as an agent of a foreign government on March 26, 2012.
“Mohamad Soueid acted as an unregistered agent of the Syrian government as part of an effort to collect information on people in this country protesting the Syrian government crack-down. I applaud the many agents, analysts and prosecutors who helped bring about this important case,” said Assistant Attorney General Monaco.
“Mr. Soueid betrayed this country to work on behalf of a state sponsor of terror,” said U.S. Attorney MacBride. “While the autocratic Syrian regime killed, kidnapped, intimidated and silenced thousands of its own citizens, Mr. Soueid spearheaded efforts to identify and intimidate those protesting against the Syrian government in the United States.”
“By illegally acting as an agent of Syria, Mr. Souied deceived his adopted country of the United States in support of a violent and repressive despotic government,” said Assistant Director in Charge McJunkin. “Through today’s sentencing, he will now be held accountable for his actions.”
According to court records, from March to October 2011, Soueid acted in the United States as an agent of the Syrian Mukhabarat, which refers to the intelligence agencies for the Government of Syria, including the Syrian Military Intelligence and General Intelligence Directorate. At no time while acting as an agent of the government of Syria in this country did Soueid provide prior notification to the Attorney General as required by law. The U.S. government has designated the Syrian government a state sponsor of terrorism since 1979.
Under the direction and control of Syrian officials, Soueid recruited individuals living in the United States to make dozens of audio and video recordings of protests against the Syrian regime – including recordings of conversations with individual protestors – in the United States and Syria, which he provided to the Syrian government. He also supplied the Syrian government with contact information for key dissident figures in the United States, details about the financiers of the dissident movement, logistics for protests and meetings, internal conflicts within the movement, and the movement’s future plans.
In a handwritten letter to a Syrian official in April 2011, Soueid outlined his support for the Syrian government’s repressions of its citizens, stating that disposing of dissension must be decisive and prompt and that violence, home invasions, and arrests against dissidents is justified.
The Syrian government provided Soueid with a laptop to further their ability to surreptitiously communicate, which he later destroyed. In late June 2011, the Syrian government paid for Soueid to travel to Syria, where he met with intelligence officials and spoke with President Bashar al-Assad in private.
To thwart detection of his activities by U.S. law enforcement, Soueid lied to a Customs and Border Patrol agent upon his return from meeting with President al-Assad in Syria, and he also lied repeatedly to FBI agents when they questioned him in August 2011. Following the FBI interview, Soueid destroyed documents in his backyard and informed the Mukhbarat about his FBI interview.
This investigation is being conducted by the FBI’s Washington Field Office with assistance from the Loudon County, Va., Sheriff’s Office. The prosecution is being handled by Assistant U.S. Attorneys Dennis Fitzpatrick and Neil Hammerstrom of the U.S. Attorney’s Office for the Eastern District of Virginia and Trial Attorney Brandon L. Van Grack of the Counterespionage Section of the Justice Department’s National Security Division.
Starr County, Texas, Sheriff’s Deputy Arrested and Detained on Bribery, Extortion and Drug ChargesRead the Press Release
A Deputy Sheriff for the Starr County, Texas, Sheriff’s Office has been ordered detained by a federal magistrate judge in the Southern District of Texas on charges of conspiracy, federal programs bribery, extortion and drug possession with intent to distribute, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division.
Nazario Solis III, 34, of Rio Grande City, Texas, was ordered detained yesterday by U.S. Magistrate Judge Dorina Ramos in McAllen, Texas. Solis was arrested on July 12, 2012, on charges contained in an indictment filed in the Southern District of Texas.
The indictment charges Solis with one count of conspiracy to commit federal programs bribery and extortion, one count of federal programs bribery, one count of extortion, one count of conspiracy to possess with the intent to distribute marijuana, one count of possession with intent to distribute marijuana and one count of attempt to possess with intent to distribute cocaine. The indictment also charges Jason Michael Munsell, a Deputy Sheriff with the Starr County Sheriff’s Office, with conspiracy to commit federal programs bribery and extortion, one count of federal programs bribery and one count of extortion. Munsell, 26, surrendered to the FBI in McAllen on July 17, 2012, and was released on bond the following day.
According to the indictment, from approximately March 2011 to approximately April 2011, Solis and Munsell accepted approximately $1,500 total in cash payments from the operator of a gambling business in Starr County in exchange for providing warning of law enforcement activity involving the gambling business. The indictment further alleges that Solis and Munsell were recorded confirming that they had provided such notice about a law enforcement raid on at least one occasion in March 2011, allowing the business to remove money and employees that might otherwise have been arrested.
Solis is also charged with conspiracy to possess with the intent to distribute and possession with the intent to distribute less than fifty kilograms of marijuana in approximately April 2011.
The indictment also charges Solis with attempting to distribute three kilograms of cocaine and cash in exchange for semi-automatic and fully-automatic firearms. The indictment alleges that Solis engaged in extensive negotiations with another individual to obtain the firearms, which Solis intended to send to his “boss” in Mexico. However, the individual with whom Solis engaged in negotiations was an undercover law enforcement agent, and no actual firearms were sent to Solis. The indictment alleges that Solis was recorded stating, “My boss likes the 308 [rifle] … he likes the M-4s [rifle] and the 223 [rifle].” The indictment further alleges that Solis preferred semi-automatic rifles, complaining that fully-automatic rifles used “too much ammo.” Solis allegedly stated, “We kill one bird and we shoot seven times. That’s not, that’s not very good mathematics.”
Solis faces a maximum penalty of up to five years in prison, a fine of $250,000 and supervised release for each conspiracy charge; 10 years in prison, a fine of $250,000 and supervised release for each charge of extortion and federal programs bribery; five years in prison, a fine of $250,000 and supervised release for the marijuana distribution charge; and five to 40 years in prison, a fine of $250,000 and supervised release for the attempted cocaine distribution charge.
Munsell faces a maximum penalty of five years in prison, a fine of $250,000 and supervised release for the conspiracy charge and 10 years in prison, a fine of $250,000 and supervised release for each charge of extortion and federal programs bribery.
An indictment is merely an accusation, and a defendant is presumed innocent unless proven guilty in a court of law.
This case is being prosecuted by Trial Attorneys Peter Mason and Anthony J. Phillips of the Public Integrity Section in the Justice Department’s Criminal Division. The case is being investigated by the FBI’s Public Corruption Task Force in McAllen, which is comprised of U.S. Customs and Border Protection-Internal Affairs, U.S. Immigration and Customs Enforcement-Office of Professional Responsibility, Department of Homeland Security-Office of Inspector General and the Texas Rangers. The Drug Enforcement Administration Houston Division and the Bureau of Alcohol, Tobacco, Firearms and Explosives also participated in the investigation.
Justice Department Settled Claims of Discrimination Against United Natural Foods Inc.Read the Press Release
The Justice Department announced today that it reached a settlement agreement with United Natural Foods Inc. (UNFI), resolving allegations that the company discriminated under the anti-discrimination provision of the Immigration and Nationality Act (INA), when it impermissibly “reverified” the work authority of lawful permanent residents and required some non-citizen workers to provide specific Form I-9 documentation.
In a charge filed with the department, the charging party, a lawful permanent resident, alleged that UNFI improperly terminated him after he failed to produce an unexpired lawful permanent resident card (also known as a “green card”) in connection with an erroneous reverification of his employment eligibility. The charging party had presented proper work authorization documentation at the time of hire, and UNFI had no reason to suspect that his documentation was not genuine. The employee was permanently work-authorized, but lost three weeks’ worth of wages as a result of UNFI’s practice. The department’s investigation revealed that UNFI reverified the documentation of similarly situated lawful permanent residents when their documentation expired but did not reverify expired documentation of U.S. citizens. The anti-discrimination provision prohibits treating employees differently in the employment eligibility verification and reverification processes based on citizenship or national origin.
In response to the department’s investigation, UNFI conducted an internal audit and undertook immediate corrective action to address and rectify its employment eligibility verification policies and practices. As part of its corrective action, UNFI rehired the charging party and gave him full back pay several months before the department had made its finding of discrimination. Under the settlement agreement, the company agrees to pay $3,190 in civil penalties to the United States, 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 UNFI has prioritized compliance with the Immigration and Nationality Act’s (INA), and we encourage all employers to evaluate their policies and practices to ensure compliance with the INA’s anti-discrimination provision,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division.
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 law, visit OSC’s website at www.justice.gov/crt/about/osc or email [email protected].
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.
Former Financial Services Executive Indicted for His Participation in a Far-Reaching Conspiracy and Scheme to Defraud Involving Investment Contracts for the Proceeds of Municipal BondsRead the Press Release
A former financial services executive was indicted yesterday for his participation in a far-reaching conspiracy and scheme to defraud related to bidding for contracts for the investment of municipal bond proceeds and other municipal finance contracts, the Department of Justice announced.
The three-count indictment was filed yesterday in the U.S. District Court in Charlotte, N.C. The indictment charges Phillip D. Murphy, a former executive for a financial institution, with participating in a wire fraud scheme and separate fraud conspiracies from as early as 1998 until 2006.
The charged conspiracies and scheme to defraud relate to the provision of a type of contract, known as an investment agreement, to public entities, such as state, county and local governments and agencies throughout the United States. Major financial institutions, including banks, investment banks, insurance companies and financial services companies, are among the providers of investment agreements and other related municipal finance contracts. Public entities seek to invest money from a variety of sources, primarily the proceeds of municipal bonds that they issue to raise money for, among other things, public projects. Public entities typically hire a broker to conduct a competitive bidding process among various providers for the award of an investment agreement to invest such money. Competitive bidding for these agreements is the subject of regulations issued by the U.S. Department of the Treasury and is related to the tax-exempt status of the bonds. The company that employed Murphy marketed financial products and services, including services as a provider of investment agreements.
“The individual charged yesterday allegedly participated in a complex fraud scheme and conspiracies to manipulate what was supposed to be a competitive process,” said Scott D. Hammond, Deputy Assistant Attorney General of the Antitrust Division’s Criminal Enforcement Program. “The division recently convicted at trial several individuals in this investigation, which is ongoing. We will continue to prosecute those who engage in such illegal and anticompetitive behavior.
The indictment charges that Murphy conspired with Rubin/Chambers, Dunhill Insurance Services Inc., also known as CDR Financial Products (CDR), a broker of municipal finance contracts, and others to increase the number and profitability of investment agreements and other municipal finance contracts awarded to the provider company where Murphy was employed. Murphy won investment agreements through CDR’s manipulation of the bidding process in obtaining losing bids from other providers, which is explicitly prohibited by U.S. Treasury regulations. As a result of the information, various providers won investment agreements and other municipal finance contracts at artificially determined prices. In exchange for this information, Murphy submitted intentionally losing bids for certain investment agreements and other contracts when requested, and, on occasion, agreed to pay or arranged for kickbacks to be paid to CDR and other co-conspirator brokers.The indictment also alleges that Murphy and co-conspirators misrepresented to municipal issuers or bond counsel that the bidding process was in compliance with U.S. Treasury regulations. This caused the municipal issuers to award investment agreements and other municipal finance contracts to providers that otherwise would not have been awarded the contracts if the issuers had true and accurate information regarding the bidding process. Such conduct placed the tax-exempt status of the underlying bonds in jeopardy.
According to court documents, the efforts by Murphy and his co-conspirators to control and manipulate the bidding for investment contracts, and the execution of a variety of certifications that covered up their scheme, also obstructed the Internal Revenue Service (IRS)’s ability to monitor compliance with U.S. Treasury regulations and impeded the IRS’s ability to determine whether municipal issuers had correctly accounted for any money that was owed to the U.S. Treasury.
In a separate count, the indictment charges that Murphy conspired with others to falsify bank records related to marketing profits so that the co-conspirators could pay the kickbacks to CDR and others.“Yesterday’s charges outline a fraudulent scheme to subvert competition in the marketplace. Those who engage in this type of criminal activity not only stand to defraud public entities, but erode the public’s trust in the competitive bidding process,” said Janice K. Fedarcyk, Assistant Director in Charge of the FBI in New York. “The FBI will continue to work with the Antitrust Division to ensure the integrity of competitive bidding in public finance.”
“This case demonstrates the value of a coordinated approach by multiple agencies and law enforcement authorities,” said Internal Revenue Service-Criminal Investigation (IRS-CI) Chief Richard Weber. “IRS Criminal Investigation contributed to this joint effort by providing financial investigative expertise to uncover this complex and sophisticated scheme. Professionals, including financial service executives, should know we will devote all resources necessary to bring to justice those who commit financial crimes.”
Murphy is charged with two counts of conspiracy and one count of wire fraud. The fraud conspiracy with which Murphy is charged carries a maximum penalty of five years in prison and a $250,000 fine. The wire fraud charge carries a maximum penalty of 30 years in prison and a $1 million fine. The false bank records conspiracy carries a maximum penalty of five years in prison and a $250,000 fine. The maximum fines for each of these offenses may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.The charges announced today resulted from an ongoing investigation conducted by the Antitrust Division’s New York and Cleveland Field Offices, the FBI and IRS-CI. The division is coordinating its investigation with the U.S. Securities and Exchange Commission, the Office of the Comptroller of the Currency and the Federal Reserve Bank of New York.
To date, a total of 13 individuals and one company have pleaded guilty to charges stemming from the ongoing investigation. In May 2012, a federal jury in the Southern District of New York convicted Dominick Carollo, Steven Goldberg and Peter Grimm of multiple counts involving similar fraud conspiracies after a four-week trial. Three other former executives of a financial institution were indicted on Dec. 9, 2010, for participating in fraud schemes and conspiracies related to the bidding for investment agreements, and are awaiting trial, which is scheduled to begin in Manhattan on July 30, 2012.
Yesterday’s indictment 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.
Anyone with information concerning bid rigging and related offenses in any financial markets should contact the Antitrust Division’s New York Field Office at 212-335-8000, the FBI at 212-384-5000 or IRS-CI at 212-436-1761, or visit www.justice.gov/atr/contact/newcase.htm.
Florida Man Pleads Guilty to Transportation <br /> of Child PornographyRead the Press Release
WASHINGTON – Anthony Mangione, 51, of Parkland, Fla., pleaded guilty today to one count of transportation of child pornography, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, Acting Special Agent in Charge Jeffrey C. Mazanec of the FBI’s Miami Field Office and Sheriff Al Lamberti of the Broward County, Fla., Sheriff’s Office.
Mangione pleaded guilty today before U.S. Magistrate Judge James M. Hopkins in U.S. District Court in West Palm Beach, Fla. He was taken into custody pending sentencing.According to court documents, between March 2010 and September 2010, Mangione transported visual depictions of minors engaging in sexually explicit conduct.
Mangione faces a mandatory minimum sentence of five years in prison and a maximum sentence of 20 years in prison. Mangione also faces a term of supervised release of five years to life following his prison sentence, and will be required to register as a sex offender in any jurisdiction in which he lives, works or attends school. Sentencing has been scheduled for Oct. 5, 2012.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
This case is being investigated by the Broward County Sheriff’s Office and the FBI’s Miami Field Office. Assistant Deputy Chief Alexandra R. Gelber and Trial Attorney Michael Grant of the Criminal Division’s CEOS are prosecuting the case.
Fishermen and Seafood Wholesaler Convicted of Conspiring to Obstruct Justice, Falsify Food Safety and Oyster Harvest Records, and Traffic in Illegal OystersRead the Press Release
WASHINGTON – After a seven week trial in federal court in Camden, N.J., multiple defendants were convicted on various felony counts of creating false records, trafficking in illegally possessed oysters, obstructing the Food and Drug Administration’s regulation of public health and safety, and conspiring to commit those crimes, announced Ignacia S. Moreno, Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division, and Paul J. Fishman, U.S. Attorney for the District of New Jersey.
Thomas Reeves, Todd Reeves, and Shellrock LLC, all of Port Norris, N.J., were convicted on multiple felony counts of violating the Lacey Act by creating false records for illegally possessed oysters, trafficking in illegally possessed oysters and falsifying records used by the FDA for tracking the movement of oysters in interstate commerce. These same defendants, as well as Renee Reeves, an employee of Shellrock and the wife of Todd Reeves, were also found guilty of conspiring to commit those crimes and obstruct justice.
Kenneth Bailey, of Heislerville, N.J., was convicted on multiple felony counts of violating the Lacey Act by creating false records and trafficking in illegally possessed oysters, as well as falsifying records used by the FDA for tracking the movement of oysters in interstate commerce.
Mark Bryan, of New Market, Md, and the business he co-owns, Harbor House Seafood Inc., of Seaford, Del., were convicted on multiple felony counts of creating false records relating to their purchase of oysters, trafficking in illegally possessed oysters, as well as conspiring to obstruct justice and falsify records used by the FDA for tracking the movement of oysters in interstate commerce.
“The conspiracy to traffic in unreported and illegally possessed oysters from the Delaware Bay violated laws that protect public health and ensure the sustainability of resources that are vital to the region’s economy. In the course of the conspiracy, defendants falsified FDA records that are used to track oysters in the event of an outbreak of oyster-borne disease,” said Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division of the Department of Justice. “After an extensive trial, today’s conviction by a federal jury sends the message that we will prosecute those who exploit protected resources, deceive law enforcement and deprive honest fisherman of the full measure of their labor.”
The Lacey Act prohibits creating or submitting false records for fish or wildlife moving in interstate commerce and also prohibits trafficking in fish or wildlife known to be illegally taken or possessed. The FDA and state health agencies require that oyster purchasers and sellers maintain accurate records of the amounts and locations of oyster harvest for all oysters they buy and sell in order to protect the public health and minimize the impact of any oyster-borne outbreak of disease.
Starting in at least 2004 and continuing through 2007, Thomas and Todd Reeves, oyster fishermen who owned Shellrock (dba Reeves Brothers), would take a greater amount of oysters from the Delaware Bay than was allowed by New Jersey. The Reeveses would then falsify the records that New Jersey used to track the number of oysters harvested from Delaware Bay and sell those unreported oysters to Mark Bryan at Harbor House in Delaware. Thomas Reeves, Todd Reeves and Renee Reeves, along with Mark Bryan at Harbor House, would also coordinate to cover up their overharvest by falsifying records required by the FDA, records which were used to protect the public health from outbreaks of oyster-borne disease. In addition, the defendants conspired to obstruct the NOAA investigation into their illegal conduct by providing investigators with false records and making false statements that attempted to hide their conduct.Bryan and Harbor House also purchased unreported oysters from Kenneth W. Bailey Sr., another Port Norris oyster fisherman. Like the Reeveses, Bailey would create false records required by the state and the FDA to hide his overharvest.
The fair market retail value of the unreported oysters during this time was in excess of $750,000, and the defendants over-harvested their quota in some years by nearly 60 percent.
The maximum penalty for conspiring to commit offenses and for violations of the Lacey Act is up to five years in prison and a $250,000 fine. The maximum penalty for obstruction of justice counts is up to 20 years in prison and a $250,000 fine. The maximum penalty for the corporations is up to five years of probation and a fine in an amount that is the greater of $500,000 or twice the gross gain, for each count.
The case was investigated by the National Oceanic and Atmospheric Administration, Office of Law Enforcement, and The New Jersey Department of Environmental Protection, Division of Fish and Wildlife. The case was prosecuted by Wayne D. Hettenbach and Patrick M. Duggan of the Environmental Crimes Section of the Justice Department’s Environment and Natural Resources Division, with assistance from Assistant U.S. Attorney Matthew T. Smith of the U.S. Attorney’s Office for the District of New Jersey.
$19 Million Stolen Identity Refund Fraud Conspiracy Charged in AlaskaRead the Press Release
A grand jury sitting in Anchorage, Ala., returned a 90-count superseding indictment yesterday against 11 defendants, the Justice Department announced. The superseding indictment included a conspiracy charge to defraud the United States involving a scheme to use stolen Puerto Rican identities to file tax returns and obtain fraudulent income tax refunds. A number of the defendants had previously been charged with conspiracy to distribute cocaine, cocaine distribution and international money laundering.
To accomplish their tax refund scheme, the indictment alleges that the conspirators fabricated individual income tax returns using stolen personal identification information from residents of the Commonwealth of Puerto Rico. The defendants obtained laptop computers that contained over 2,600 stolen identities. The laptops also identified $19 million in fraudulent refund claims. The addresses used on some of the false tax returns were obtained by stealing mail from mailboxes in and around Anchorage. In other cases, it is alleged that one or more of the defendants contacted conspirators in locations such as New Jersey and Puerto Rico and requested that fraudulently obtained tax refund checks be sent to Anchorage using false names. The indictment further alleges that the conspirators negotiated refund checks in Anchorage with the help of corrupt bank employees. In order to negotiate the tax refund checks, the defendants allegedly used false identification documents. They allegedly obtained these documents by using the names, dates of birth and Social Security numbers of other individuals in applications made to the Alaska Department of Motor Vehicles.
The indictment also charges various defendants with submitting false claims for refund, possessing stolen mail, making false claims of U.S. citizenship, committing passport fraud, making false statements to banks and credit unions, passing forged U.S. Treasury checks, aggravated identity theft and drug charges. The fraud charges each carry maximum potential penalties of between two and 30 years of imprisonment, in addition to the five year mandatory minimum prison term required upon conviction on the drug charges.
The case is being jointly prosecuted by Assistant U.S. Attorneys Thomas C. Bradley and James Barkeley of the U.S. Attorney’s Office for the District of Alaska and Trial Attorney Stephanie Carowan Courter of the Justice Department’s Tax Division. The case was investigated by the Internal Revenue Service Criminal Investigation, U.S. Immigration and Customs Enforcement, which oversees Homeland Security Investigations, the U.S. Postal Inspection Service, the U.S. State Department’s Diplomatic Security Service, and the Drug Enforcement Administration. Additional assistance was provided by the U.S. Attorney’s Offices for the District of New Jersey, the Eastern District of Pennsylvania and the Southern District of New York.
An indictment is merely a formal accusation. Defendants are presumed innocent until proven guilty in a court of law.
Thursday 19 July 2012
Two Foreign Nationals Plead Guilty to Trafficking <br /> the Identities of Puerto Rican U.S. CitizensRead the Press Release
Two foreign nationals have pleaded guilty for their roles in a scheme to traffic the identities of Puerto Rican U.S. citizens and corresponding identity documents.
The guilty pleas were announced today by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney Rosa E. Rodríguez-Vélez for the District of Puerto Rico; Director John Morton of U.S. Immigration and Customs Enforcement (ICE), which oversees Homeland Security Investigations (HSI); Chief Postal Inspector Guy Cottrell of the U.S. Postal Inspection Service (USPIS); Scott P. Bultrowicz, Director of the U.S. State Department’s Diplomatic Security Service (DSS); and Internal Revenue Service-Criminal Investigation (IRS-CI) Chief Richard Weber.
Obdulio Edu Burgos-Dominguez, 35, a Guatemalan national formerly of Seymour, Ind., pleaded guilty today in the District of Puerto Rico to one count of conspiracy to commit identification fraud and one count of conspiracy to commit alien smuggling for profit. Jose Sergio Garcia-Ramirez, 37, a Mexican national formerly of Rockford, Ill., pleaded guilty in the District of Puerto Rico on July 17, 2012, to one count of conspiracy to commit identification fraud and one count of aggravated identity theft. Both pleas took place before U.S. Magistrate Judge Bruce J. McGiverin.
Burgos-Dominguez and Garcia-Ramirez were originally charged in an indictment returned by a federal grand jury in Puerto Rico on Mar. 22, 2012. To date, a total of 53 individuals have been charged for their roles in the identify trafficking scheme.
Court documents allege that individuals located in the Savarona area of Caguas, Puerto Rico (Savarona suppliers) obtained Puerto Rican identities and corresponding identity documents. Other conspirators located in various cities throughout the United States (identity brokers) allegedly solicited customers and sold Social Security cards and corresponding Puerto Rico birth certificates for prices ranging from $700 to $2,500 per set. The superseding indictment alleges that identity brokers ordered the identity documents from Savarona suppliers, on behalf of the customers, by making coded telephone calls. The conspirators used text mail, money transfer services and express, priority or regular U.S. mail to complete their illicit transactions.
Court documents allege that some identity brokers assumed a Puerto Rican identity themselves and used that identity in connection with the trafficking operation. Their customers generally obtained the identity documents to assume the identity of Puerto Rican U.S. citizens and to obtain additional identification documents, such as legitimate state driver’s licenses. Some customers allegedly obtained the documents to commit financial fraud and attempted to obtain a U.S. passport.
Burgos-Dominguez admitted that he operated as an identity broker in Seymour, Ind. Garcia-Ramirez admitted that he operated as an identity broker in Rockford, Ill.
According to court documents, various identity brokers were operating in Rockford; Seymour; Indianapolis; DeKalb, Ill.; Columbus, Ind.; Aurora, Ill.; Hartford, Conn.; Clewiston, Fla.; Lilburn and Norcross, Ga.; Salisbury, Md.; Columbus, Ohio; Fairfield, Ohio; Dorchester, Mass.; Lawrence, Mass.; Salem, Mass.; Worcester, Mass.; Grand Rapids, Mich.; Nebraska City, Neb.; Elizabeth, N.J.; Burlington, N.C.; Hickory, N.C.; Hazelton, Pa.; Philadelphia; Houston; Abingdon, Va.; Albertville, Ala.; and Providence, R.I.
Garcia-Ramirez and Burgos-Dominguez are the seventh and eighth defendants to plead guilty in this case.
At sentencing, scheduled for Nov. 30, 2012, Garcia-Ramirez faces a maximum sentence of 15 years in prison for conspiracy to commit identification fraud and a mandatory consecutive sentence of two years in prison for aggravated identity theft. At sentencing, scheduled for Nov. 13, 2012, Burgos-Dominguez faces a maximum sentence of 15 years in prison for conspiracy to commit identification fraud and 10 years in prison for conspiracy to commit alien smuggling for profit. Both defendants are also subject to a maximum fine of $250,000 for each charge.
The charges are the result of Operation Island Express, an ongoing, nationally-coordinated investigation led by the ICE-HSI Chicago Office and USPIS, DSS and IRS-CI offices in Chicago, in coordination with the ICE-HSI San Juan Office. The Illinois Secretary of State Police; Elgin, Ill., Police Department; Seymour, Ind., Police Department; and Indiana State Police provided substantial assistance. The ICE-HSI Assistant Attaché office in the Dominican Republic, and International Organized Crime Intelligence and Operations Center (IOC-2) as well as various ICE, USPIS, DSS and IRS CI offices around the country provided invaluable assistance.
The case is being prosecuted by the Criminal Division’s Human Rights and Special Prosecutions Section, with the assistance of the Criminal Division’s Asset Forfeiture and Money Laundering Section, and the support of the U.S. Attorney’s Office for the District of Puerto Rico. The U.S. Attorneys’ Offices in the Northern District of Illinois, Southern District of Indiana, District of Connecticut, Western District of Virginia, Southern District of Ohio, and District of Nebraska provided substantial assistance.
Potential victims and the public may obtain information about the case at: www.justice.gov/criminal/vns/caseup/beltrerj.html . Anyone who believes their identity may have been compromised in relation to this investigation may contact the ICE toll-free hotline at 1-866-DHS-2ICE (1-866-347-2423) and its online tip form at www.ice.gov/tipline . Anyone who may have information about particular crimes in this case should also report it to the ICE tip line or website.
Anyone who believes that they have been a victim of identity theft, or wants information about preventing identity theft, may obtain helpful information and complaint forms on various government websites including the Federal Trade Commission ID Theft Website, www.ftc.gov/idtheft . Additional resources regarding identity theft can be found at www.ojp.usdoj.gov/ovc/pubs/ID_theft/idtheft.html ; www.ssa.gov/pubs/10064.html ; www.fbi.gov/about-us/investigate/cyber/identity_theft ; and www.irs.gov/privacy/article/0,,id=186436,00.html .
Oklahoma Inmate Sentenced for Conspiring with Jailer to Assault Another InmateRead the Press Release
Phillip Oliver, 46, an inmate at the Muskogee County Jail (MCJ) was sentenced today in U.S. District Court in Muskogee, Okla., to one year and a day followed by one year of supervised release for one count of conspiracy related to the orchestrated beating of a fellow inmate at the behest of a jailer on duty.
“Excessive force by individuals sworn to uphold the law will not be tolerated,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The Justice Department will continue to investigate and prosecute criminal civil rights violations whether committed directly by the hands of law enforcement or by inmates at the behest of law enforcement.”
Oliver pleaded guilty earlier this year and in so doing admitted that on Oct. 6, 2011, he conspired with a jailer on duty to violate the civil rights of the victim, a fellow inmate, by assaulting him. Specifically, Oliver and the jailer agreed to use physical violence to punish the victim because the victim, who was restrained in a separate cell, was making verbal comments. According to court documents, although Oliver was concerned about getting into trouble if he assaulted the victim, the jailer assured Oliver that he would cover for Oliver. Thereafter, the jailer remotely popped open the victim’s locked cell door so that Oliver could gain access. Oliver then punched the victim in the face, all at a time when the victim was not posing a threat to anyone.
This case was investigated by the Muskogee Resident Agency of the Oklahoma City Division of the FBI and was prosecuted by Trial Attorney Fara Gold of the Civil Rights Division of the U.S. Department of Justice and Assistant U.S. Attorney Ryan M. Roberts for the Eastern District of Oklahoma.
Michigan Man Pleads Guilty in Connection with Detroit-Area Medicare Fraud SchemeRead the Press Release
WASHINGTON – A Michigan resident pleaded guilty today for his role in a $13.8 million Detroit-area home health care fraud scheme, announced the Departments of Justice and Health and Human Services (HHS).
Nabeel Shaikh, 30, of Wixom, Mich., pleaded guilty today to one count of conspiracy to commit health care fraud before U.S. District Judge Gerald E. Rosen of the Eastern District of Michigan. At sentencing, Shaikh faces a maximum penalty of 10 years in prison and a $250,000 fine.
According to information contained in plea documents, Shaikh purported to be a physical therapy assistant with a limited license who provided physical therapy services to homebound Medicare beneficiaries. In fact, Shaikh had a forged physical therapy assistant’s degree and no medical license. Beginning in approximately January 2009, Shaikh was paid to falsify medical documentation for two home health agencies, known as Physicians Choice Home Health Care LLC and Quantum Home Care Inc., each of which billed and received payments from Medicare for home health care services that were never rendered.
According to court documents, Shaikh paid kickbacks and bribes to Medicare beneficiaries in order to obtain the beneficiaries’ Medicare information, which was then used to bill Medicare for home health services that were never provided. Shaikh created evaluations, therapy revisit notes and other medical documentation memorializing purported physical therapy for patients he did not see or treat. Shaikh and his co-conspirators had Medicare beneficiaries pre-sign forms and visit sheets that were later falsified to make it appear that the beneficiaries had received home health services when, in fact, they had not. Shaikh knew that the documents that he signed would be used to support false claims to Medicare for home health services.
From approximately January 2009 through September 2011, Medicare paid approximately $900,430 to Physicians Choice and Quantum for fraudulent physical therapy claims based on falsified files and notes signed by Shaikh.
Overall, between approximately July 2008 and September 2011, Physicians Choice, Quantum and two other fraudulent home health care agencies involved in the conspiracy, known as First Care Home Health Care LLC and Moonlite Home Care Inc., were paid approximately $13.8 million in fraudulent home health claims by the Medicare program for services that were medically unnecessary and/or never rendered.
Today’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, Acting Special Agent in Charge of the FBI’s Detroit Field Office Edward J. Hanko, and Special Agent in Charge Lamont Pugh III of the HHS Office of Inspector General, Chicago Regional Office.
This case was prosecuted by Trial Attorney Catherine K. Dick of the Criminal Division’s Fraud Section, with assistance from Trial Attorney Niall M. O’Donnell. It was investigated by the FBI and HHS-OIG, and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Michigan.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,330 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.
Former President of Texas Company Indicted for Employee Deaths and Environmental ViolationsRead the Press Release
Port Arthur Chemical and Environmental Services LLC (PACES) and its former president Matthew L. Bowman have been charged with conspiracy to illegally transport hazardous materials, resulting in the deaths of two employees, in an indictment handed down by a federal grand jury in Beaumont, Texas, yesterday, announced Ignacia S. Moreno, Assistant Attorney General of the Justice Department’s Environment and Natural Resources Division and John M. Bales, U.S. Attorney for the Eastern District of Texas.
The 13-count indictment describes a scheme in which hazardous materials were transported illegally with false documents and without placards, and where workers were not properly protected from exposure to hazardous gases. The exposure resulted in the deaths of two employees, who were truck drivers, at the PACES facility on Dec. 18, 2008, and April 14, 2009. Both deaths are attributed to exposure to hydrogen sulfide.
The defendants were charged with a conspiracy to violate the Hazardous Materials Transportation Uniform Safety Act (HMTUSA) and two counts of failure to implement appropriate controls to protect employees from exposure to hydrogen sulfide in violation of the Occupational Safety and Health Administration Act. The defendants are also charged with transportation of hazardous materials without placards and with false documents in violation of HMTUSA, violations of the Resource Conservation and Recovery Act and making false statements.
According to the indictment, Bowman was president and owner of PACES, located in Port Arthur, Texas, and CES Environmental Services (CES) located in Houston. PACES was in operation from about November 2008 to November 2010 and was in the business of producing and selling caustic materials to paper mills. The production of caustic materials involved hydrogen sulfide. Hydrogen sulfide is classified as a poisonous gas by HMTUSA. According to the National Institute for Occupational Safety and Health, hydrogen sulfide is an acute toxic substance that is the leading cause of sudden death in the workplace. Employers are required by the Occupational Safety and Health Administration (OSHA) to implement engineering and safety controls to prevent employees from exposure above harmful limits.
According to the indictment, Bowman was responsible for, among other duties, approving and directing PACES production operations, the disposal of hydrogen sulfide wastewater, employee safety precautions, directing the transportation of PACES wastewater, and determining what safety equipment could be purchased or maintained.
Both PACES and CES have filed for bankruptcy.
The conspiracy and substantive counts of the indictment each carry a maximum possible sentence of five years in prison and a fine of $250,000, and a $500,000 maximum fine for the corporation.
The allegations in the indictment are mere accusations and all persons are presumed innocent until and unless proven guilty beyond a reasonable doubt in a court of law.
This case is being investigated by EPA Criminal Investigation Division; the U.S. Department of Transportation Office of Inspector General; the Texas Commission on Environmental Quality - Environmental Crimes Unit; and the Houston Police Department - Major Offenders, Environmental Investigations Unit; with assistance from the Texas Parks & Wildlife Department - Environmental Crimes Unit; the Travis County, Texas, District Attorney’s Office; the Harris County, Texas, District Attorney’s Office; the Houston Fire Department; OSHA; the U.S. Coast Guard; the Port Arthur Police Department; and the Port Arthur Fire Department.
The case is being prosecuted by U.S. Attorney’s Office for the Eastern District of Texas, Beaumont Division, and the Environmental Crimes Section of the Justice Department’s Environment and Natural Resources Division.
Former Employee of Nursing Home Company Operating in North Carolina and Virginia Sentenced to Serve 63 Months in Prison<br /> for Kickback Schemes and Tax EvasionRead the Press Release
WASHINGTON – The former director of corporate maintenance and renovations at Medical Facilities of America Inc. (MFA) was today sentenced to serve 63 months in prison for accepting kickbacks from contractors and evading federal income taxes, the Department of Justice announced. MFA operates health care and nursing home facilities throughout Virginia and North Carolina.
John D. Henderson, of Colonial Heights, Va., was sentenced in U.S. District Court in Roanoke, Va., by Judge Samuel G. Wilson. In addition to his prison sentence, Henderson was ordered to pay a total of $698,088 in restitution and additional taxes, penalties and interest to the Internal Revenue Service for his participation in two separate conspiracies. The conspiracies involved steering contracts for the repair, maintenance and renovation at MFA health care and nursing home facilities. One of the conspiracies took place from about June 1998 until at least December 2006, and the other conspiracy took place from about July 2005 until at least December 2006. Henderson pleaded guilty on March 14, 2012, to two counts of conspiracy to commit mail and honest services fraud for the kickback schemes and to two counts for failing to include the kickbacks and other income he received on his federal income tax returns for years 2005 and 2006.
According to the four-count felony charge, Henderson oversaw the bidding process for repair, maintenance and renovation contracts at MFA facilities. To facilitate the conspiracies, Henderson steered contracts to several venders in return for kickbacks; created fictitious competitor bids that were higher than the quotes submitted by the venders who paid him, in order to create the appearance of competition; and directed subordinates to solicit quotes only from vendors who paid him. Henderson received more than $560,000 in kickbacks and had at least $101,000 more paid to a co-conspirator, and in return steered MFA contracts totaling more than $5 million.
“Through this kickback scheme, Henderson and his co-conspirators deprived MFA of competitive pricing to its financial detriment,” said Acting Assistant Attorney General Joseph Wayland in charge of the Antitrust Division. “Today’s sentencing demonstrates the division’s commitment to holding executives accountable for disrupting the competitive bidding process for service contracts.”
Henderson is the fifth individual to plead guilty in the department's fraud investigation into the award of repair, maintenance and renovation contracts at facilities owned by MFA. On Oct. 18, 2011, both Donald R. Holland and Larry R. Sumpter pleaded guilty in U.S. District Court in Roanoke to participating in the scheme. On Jan. 31, 2012, Holland and Sumpter were each sentenced by Judge Samuel G. Wilson to serve two years of probation and were fined $50,000 and $15,000, respectively. On April 4, 2011, Edward T. Fodrey pleaded guilty in U.S. District Court in Norfolk, Va., and was sentenced by Judge Mark S. Davis on Jan. 31, 2012, to serve 37 months in prison and was ordered to pay $326,799 in restitution. Gary L. Johns pleaded guilty on Dec. 12, 2011, in U.S. District Court in Roanoke and was sentenced by Judge Wilson on March 14, 2012 to serve three years of probation and to pay $169,341 in restitution.
The investigation is being conducted by the Antitrust Division’s Philadelphia Field Office, the U.S. Attorney’s Office for the Western District of Virginia, the FBI in Roanoke and the Internal Revenue Service-Criminal Investigation in Roanoke. Anyone with information concerning fraudulent behavior relating to the award of contracts by MFA should contact the Antitrust Division’s Philadelphia Field Office at 215-597-7405 or visit www.justice.gov/atr/contact/newcase.htm .
Wednesday 18 July 2012
Maine Resident Charged and Arrested for Allegedly Engaging in Cyber “Sextortion” of New Hampshire VictimRead the Press Release
WASHINGTON – A Maine resident was charged in a criminal complaint unsealed today in the District of New Hampshire for allegedly engaging in a type of cyber extortion known as “sextortion,” announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney John P. Kacavas of the District of New Hampshire.
John Bryan Villegas, 21, of Kittery, Maine, was arrested yesterday and made his initial appearance today in federal court in New Hampshire. Villegas is charged with one count of engaging in computer intrusion involving extortion and one count of making extortionate interstate threats.
The complaint affidavit alleges that Villegas attempted to extort the victim, a New Hampshire resident, into providing him with sexually explicit photographs and videos of the victim. He sent the victim interstate e-mail messages in which he threatened to publish on the internet, and distribute to the victim’s neighbors and work and social acquaintances, other sexually explicit photographs of the victim that he obtained from a computer without authorization.
If convicted, Villegas faces a maximum sentence of two years in prison on the interstate threats charge and five years in prison on the computer intrusion charge, to be followed by up to three years of supervised release, a fine of up to $500,000 and restitution.
The case was investigated by the U.S. Secret Service and is being prosecuted by Trial Attorney Mona Sedky of the Computer Crime and Intellectual Property Section in the Justice Department’s Criminal Division and Assistant U.S. Attorney Arnold H. Huftalen of the District of New Hampshire. The Department would like to thank the cooperation of the Dover, N.H., and Kittery, Maine, police departments and the Naval Criminal Investigative Service (NCIS).
The details contained in the complaint are allegations. The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Justice Department Obtains $855,000 Judgment Against Cincinnati Landlord for Sexually Harassing His TenantsRead the Press Release
WASHINGTON – Cincinnati landlord Henry E. Bailey agreed to the entry of an $855,000 civil judgment against him, after admitting that he violated the Fair Housing Act as alleged in a complaint filed by the Justice Department in federal court, the department announced today. The department’s complaint alleged that Bailey subjected female tenants and applicants for tenancy to unwanted sexual comments and touching, entered the apartments of female tenants without notice or permission, granted tangible housing benefits in exchange for sexual favors and took adverse actions against female tenants when they refused his sexual advances.
“The women involved were subjected to intimidating and severe acts of unwanted sexual conduct in their homes, where they expected to feel safe,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “This judgment reflects the gravity of the alleged conduct.”
Under the terms of the consent judgment, which was approved by the U.S. District Court for the Southern District of Ohio earlier today, Bailey is obligated to pay $800,000 in damages to 14 women he sexually harassed and $55,000 in a civil penalty to the United States. In addition, the consent judgment enjoins Bailey from further acts of discrimination and requires him to retain an independent management company to manage any currently rented units and any future rental properties he acquires.
“This helps right the wrongs committed against vulnerable individuals,” said U.S. Attorney for the Southern District of Ohio Carter Stewart. “Going forward, the decree sends a message that property owners must respect the rights of their tenants and those who seek safe, secure housing.”
The department began investigating Bailey after Housing Opportunities Made Equal, a Cincinnati-based non-profit fair housing advocacy group, notified the department of sexual harassment complaints it had received about Bailey.
The federal Fair Housing Act prohibits discrimination in housing based on race, color, religion, national origin, sex, disability and familial status. Individuals who believe that they may have been victims of housing discrimination should call the Justice Department’s Housing Discrimination Tip Line at 1-800-896-7743, email [email protected] or contact the U.S. Department of Housing and Urban Development at 1-800-669-9777.
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.
Justice Department Files Lawsuit Requiring Rutherford County, <br /> <br /> Tenn., to Allow Mosque to Open in City of MurfreesboroRead the Press Release
The Justice Department announced today that it has filed a federal lawsuit against Rutherford County, Tenn., alleging that the county violated the Religious Land Use and Institutionalized Persons Act of 2000 (RLUIPA) when, in compliance with a state chancery court ruling, it refused to process or issue a certificate of occupancy to the Islamic Center of Murfreesboro for a recently constructed mosque. The department’s complaint states that a certificate of occupancy is needed immediately so that the Islamic Center can hold worship services at the new facility during the Islamic holy month of Ramadan, which begins at sundown on July 19.
The lawsuit, filed today in U.S. District Court for the Middle District of Tennessee, alleges that the county’s refusal came as a result of a recent state chancery court order last month, which, acting in response to a motion brought by individuals opposed to the mosque, enjoined the county from processing or issuing a certificate. The chancery court ruled that the county had provided insufficient public notice prior to the hearing at which the county approved the mosque’s site-plan. The chancery court imposed a heightened notice requirement on the mosque, one not imposed on other religious or secular organizations.
“Our nation was founded on bedrock principles of religious liberty. The Department of Justice will continue to vigorously enforce civil rights laws that protect religious freedom,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “When a faith community follows the rules, as the Islamic Center of Murfreesboro has done in seeking to construct its place of worship, it is impermissible to change the rules in a discriminatory way that prevents people of faith from exercising their fundamental right to worship.”
“The United States Attorney’s Office will zealously protect every citizen’s right to worship and assemble,” said Jerry E. Martin, U.S. Attorney for the Middle District of Tennessee. “If we do not protect the rights of these congregants in Rutherford County, then the rights of all people are endangered and diminished.”
The government’s complaint seeks a court order requiring the county to act promptly on the Islamic Center’s application for a certificate of occupancy despite the chancery court’s injunction.
The case began when the Islamic Center, which has been operating in Rutherford County since 1982, sought to construct a new mosque for its growing congregation. In 2009, it purchased land for that purpose on Veals Road in Rutherford County and, in compliance with the county’s zoning regulation, subsequently applied for site-plan approval. After considering the proposal at a regularly scheduled, advertised meeting, the county approved the site plan. Following the county’s approval, opponents of the mosque filed a lawsuit in state court seeking to stop construction. Ultimately, with the exception of the plaintiffs’ public-notice claim, the chancery court dismissed the plaintiffs’ claims.
RLUIPA prohibits religious discrimination in land use and zoning decisions. Persons who believe that they been subjected to religious discrimination in land use or zoning may contact the Housing and Civil Enforcement Section of the Justice Department’s Civil Rights Division at 1-800-896-7743. Additional information about the Justice Department’s efforts to combat religious discrimination may be found at www.justice.gov/crt/spec_topics/religiousdiscrimination/.
The complaint is an allegation of unlawful conduct. The allegations must be proven in federal court.
Related Materials:
Complaint
Hacker Sentenced to Seven Years in Prison for Role in Two Hacking Schemes Involving a Total of More Than 240,000 Stolen Credit Card NumbersRead the Press Release
WASHINGTON – Aleksandr Suvorov, of Estonia, was sentenced today to seven years in prison for his role in two separate hacking schemes involving a total of more than 240,000 stolen credit card numbers.
The sentence was announced today by Assistant Attorney General Lanny A. Breuer for the Criminal Division, U.S. Attorney for the Eastern District of New York Loretta E. Lynch, U.S. Attorney for the Southern District of California Laura E. Duffy and Director of the U.S. Secret Service Mark Sullivan.
Suvorov, 28, was sentenced by U.S. District Judge Sandra J. Feuerstein in Central Islip, N.Y. Suvorov was an accomplice to Albert Gonzalez, one of the most prolific identity thieves ever prosecuted by the U.S. government.
Suvorov pleaded guilty in May 2009 to a wire fraud conspiracy charge, filed in the Eastern District of New York, for hacking into the national restaurant chain Dave & Buster’s and stealing more than 80,000 credit card numbers. In addition, Suvorov pleaded guilty in November 2011 to a trafficking in unauthorized access devices charge, originally filed in the Southern District of California, related to the sale of more than 160,000 stolen credit card numbers to an undercover agent with the U.S. Secret Service. The cases were consolidated in the Eastern District of New York for sentencing. In addition to his prison term, Suvorov was ordered to pay $675,000 in restitution and to satisfy a $300,000 asset forfeiture judgment stemming from the New York charges.
“Mr. Suvorov participated in a scheme to sell thousands of credit card numbers stolen from unsuspecting consumers,” said Assistant Attorney General Breuer. “Computer hackers like Mr. Suvorov victimize businesses and individuals, posing a serious threat to their financial security. Today’s sentence sends a clear message that cyber criminals operating abroad will suffer severe consequences for their crimes.”
“Suvorov reached across an ocean to victimize thousands of Americans,” said U.S. Attorney Lynch. “That ocean was no protection from the reach of U.S. law enforcement, whose coordinated efforts put a stop to Suvorov and his cohorts’ criminal scheme. He will now serve his sentence in the country of his victims. Computer hackers and identity thieves who prey on innocent American consumers, businesses and financial institutions will find no refuge from U.S. criminal justice in any corner of the globe.”
“This international criminal enterprise thought that they could traffic in stolen credit card information from abroad, but due to the coordinated efforts of the United States Secret Service and the Justice Department, they were wrong,” said U.S. Attorney Duffy. “The agents of the San Diego field office of the United States Secret Service are to be commended for their investigative work in dismantling this organization.”
“This case demonstrates the potential for criminals to inflict significant damage to our nation’s financial sector, but this investigation and the resulting sentences should serve as a warning to cyber criminals that law enforcement will continue to pursue them wherever they are,” said U.S. Secret Service Director Sullivan. “The Secret Service, in conjunction with its many law enforcement partners across the United States and around the world, continues to successfully combat these crimes by adapting our investigative methodologies. We realize our success in this investigation is due to the cooperation of these partners in more than a dozen international law enforcement agencies.”
According to court documents, in the New York case, Suvorov, Albert Gonzalez and a third co-conspirator devised a scheme to gain unauthorized access into the computer systems of Dave & Buster’s Inc. for the purposes of installing malicious software and extracting credit card information of the Dave & Buster’s patrons. Gonzalez, who was in Miami, sent the software, known as a “packet sniffer,” to a co-conspirator in Ukraine. A packet sniffer is malicious software designed, in this case, to collect credit card information. The co-conspirator in Ukraine then provided the packet sniffer to Suvorov in Estonia. Suvorov, working with another individual, gained unauthorized access to 11 Dave & Buster’s restaurants throughout the United States, one of which was in Islandia, N.Y., and installed the packet sniffer. Suvorov and his co-conspirators ultimately obtained data from 81,005 credit cards.
Gonzalez was sentenced in March 2010 to 20 years in prison for his role in the Dave & Buster’s hack, as well as hacks into a major payment processor and several retail networks. The other co-conspirator was arrested in Turkey on related identity theft charges, and was sentenced there to 30 years in prison.
In the California case, Suvorov and an accomplice conspired to sell more than 160,000 stolen credit card numbers to a buyer in San Diego who was an undercover agent with the U.S. Secret Service. Suvorov provided the stolen credit card numbers to an accomplice, who in turn sold them to the undercover agent.
The New York case was prosecuted by Assistant U.S. Attorney William Campos of the Eastern District of New York and Trial Attorneys James Silver and Evan Williams of the Criminal Division’s Computer Crime & Intellectual Property Section (CCIPS) and was investigated by the U.S. Secret Service Criminal Investigative Division Cyber Investigations Branch. Former CCIPS Assistant Deputy Chief Howard Cox and Senior Counsel Kimberly Peretti also contributed significantly to the investigation and prosecution of this case. The California case was prosecuted by Assistant U.S. Attorney Orlando Gutierrez of the Southern District of California and investigated by the U.S. Secret Service San Diego Field Office. The Office of International Affairs in the Criminal Division provided significant assistance.
Former New York Employee of a Financial Institution Pleads Guilty for His Role in Fraud Conspiracy Involving Municipal BondsRead the Press Release
A former financial institution employee pleaded guilty today for his participation in a conspiracy related to municipal bonds, the Department of Justice announced.
According to the plea proceeding held today in the U.S. District Court in Manhattan, Alexander Wright, a resident of New York City, engaged in a fraud conspiracy in the municipal finance industry. According to court documents, the New York-based financial institution that employed Wright as a vice president of the municipal derivatives marketing group was a provider of investment agreements as well as other municipal finance contracts to public entities. Public entities seek to invest money from a variety of sources, primarily the proceeds of municipal bonds that they issue, to raise money for, among other things, public projects. Public entities typically hire a broker to conduct a competitive bidding process for the award of the investment agreements and often for other municipal finance contracts.
The department said in court documents that from approximately June 12, 2002, until approximately June 20, 2002, Wright participated in a fraud conspiracy with former executives from another financial institution, among others. One of the co-conspirators acted as the broker for a municipal finance contract, which was to be competitively bid. The co-conspirator gave Wright information about the prices or price levels of competitors’ bids, a practice known as a “last look.” The co-conspirator signaled Wright to change his bid to a specific number so that Wright’s employer could make more money. Wright and his co-conspirators represented to the municipal issuer that the bidding process was competitive when, in fact, it was not. The department said that, as a result of the bid manipulation, Wright’s employer won the contract at an artificially inflated price, which, since the issuer paid a higher price for the contract, deprived the municipal issuer of money and property.
“By engaging in non-competitive practices, such as sharing confidential bidding information, the co-conspirators undermined the integrity of the municipal bond market and deprived the bond issuer of a fair and competitive price,” said Scott D. Hammond, Deputy Assistant Attorney General of the Antitrust Division’s Criminal Enforcement Program. “Today’s guilty plea demonstrates our continued efforts to hold accountable those who subvert the competitive process in our financial markets.”
The conspiracy to commit wire fraud for which Wright is charged carries a maximum penalty of five years in prison and a $250,000 criminal fine. The maximum fine for this offense may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.
“The type of bid-rigging scheme Wright and his co-conspirators participated in not only deprives the municipal issuer of a fair and just bidding process, but weakens the public’s trust in the municipal bond market,” said Janice K. Fedarcyk, Assistant Director in Charge of the FBI in New York. “Today’s guilty plea is proof of our continued determination to root out those whose business practices contribute to the deterioration of healthy competition in the financial markets.”
“This guilty plea is another step in our efforts to clean up the fraudulent practices in the municipal bond market,” said Internal Revenue Service-Criminal Investigation (IRS-CI) Chief Richard Weber. “IRS Criminal Investigation will continue to provide financial investigative assistance to ensure individuals are held accountable for their criminal behavior.”
The charges announced today resulted from an ongoing investigation conducted by the Antitrust Division’s New York and Chicago Field Offices, the FBI and IRS-CI. The division is coordinating its investigation with the U.S. Securities and Exchange Commission, the Office of the Comptroller of the Currency and the Federal Reserve Bank of New York.
To date, 12 individuals and one company have pleaded guilty to charges stemming from the ongoing investigation. In May 2012, a federal jury in the Southern District of New York convicted Dominick Carollo, Steven Goldberg and Peter Grimm of multiple counts involving similar fraud conspiracies after a four-week trial. Three other former executives of a financial institution were indicted on Dec. 9, 2010, for participating in fraud schemes and conspiracies related to the bidding for investment agreements, and are awaiting trial, which is scheduled to begin in Manhattan on July 30, 2012.
Today’s guilty plea 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.
Anyone with information concerning bid rigging and related offenses in any financial markets should contact the Antitrust Division’s New York Field Office at 212-335-8000, the FBI at 212-384-5000 or IRS-CI at 212-436-1761, or visit www.justice.gov/atr/contact/newcase.htm.Former CFO of North Carolina Assisted Living Facility Chain Pleads Guilty to Tax Fraud ConspiracyRead the Press Release
Michael R. Elliott, former chief financial officer of Caremerica Inc., pleaded guilty today to conspiring to defraud the Internal Revenue Service (IRS), the Justice Department and IRS announced.
On Nov. 15, 2011, a grand jury sitting in Raleigh, N.C., returned an indictment charging Elliott with the following tax offenses: one count of conspiring to defraud the IRS, 25 counts of failing to pay over employment taxes, one count of filing a false tax return, and one count of obstructing the due administration of the tax laws.
According to the charging document, Elliott co-owned and operated a chain of assisted living facilities (ALFs) in North Carolina. The ALFs were managed by Caremerica Inc., a company based in Leland, N.C., that Elliott also partly owned and operated. Elliott was the Chief Financial Officer for Caremerica, the Caremerica ALFs, and other related companies (Caremerica companies). As a corporate officer, Elliott was responsible for ensuring that the Caremerica companies collected, reported, and paid over federal employment taxes to the IRS. However, with Elliott as the chief financial officer, the Caremerica companies accrued more than $4.5 million in employment tax liabilities between approximately 2003 and 2006. Elliott failed to comply with his employment tax obligations by filing, and causing to be filed, false IRS forms and failing to pay the employment taxes due.
The indictment further alleges that in 2003, Elliott acquired partial ownership of Partners Pharmacy Services Inc. (PPS), which provided prescription drug and related services to the Caremerica ALFs. In March 2005, Elliott sold PPS to a subsidiary of Omnicare Inc. At the closing, Elliott received $1.4 million, which he directed to be deposited into a bank account in someone else’s name.
At his hearing before Judge James C. Fox, sitting in Wilmington, N.C., Elliott agreed that he should be ordered to pay restitution of $4.8 million. His sentencing is set for the court’s term beginning Nov. 5, 2012.
This case was investigated by IRS-Criminal Investigation. It is being prosecuted by Trial Attorneys Adam Hulbig, Todd Ellinwood and Kevin Lombardi of the Justice Department’s Tax Division.
Tuesday 17 July 2012
U.S. and Tennessee Announce Clean Water Act Agreement with the City of ChattanoogaRead the Press Release
WASHINGTON – The Department of Justice, the U.S. Environmental Protection Agency (EPA), the Tennessee Department of Environment and Conservation and the Office of the Tennessee Attorney General announced today a comprehensive Clean Water Act settlement with the city of Chattanooga, Tenn. Chattanooga has agreed to pay a $476,400 civil penalty and make improvements to its sewer systems, estimated by the city at $250 million, to eliminate unauthorized overflows of untreated raw sewage. Chattanooga also has agreed to implement a green infrastructure plan and perform an $800,000 stream restoration project.
“Chattanooga residents will enjoy public health and environmental benefits for years to come as a result of the improvements required by this settlement agreement. The agreement prioritizes neighborhood sewer rehabilitation projects and utilizes innovative stormwater controls in the urban core, reducing sewer overflows and overall reducing threats to public health posed by untreated sewage,” said Ignacia S. Moreno, Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. “This is another example of how we are working toward the goal of clean water for all communities through the vigorous enforcement of the Clean Water Act throughout the United States.”
“The EPA is working with communities across the country to address sewage overflows that impact the health of residents and impair local water quality,” said Cynthia Giles, Assistant Administrator for the EPA’s Office of Enforcement and Compliance Assurance. “Today’s agreement with the city of Chattanooga will rehabilitate their aging sewer system and promote innovative green infrastructure efforts to reduce stormwater runoff, while increasing green space in communities.”
A consent decree, filed today in U.S. District Court for the Eastern District of Tennessee in Chattanooga, represents the combined efforts of the United States and the state of Tennessee, co-plaintiffs in this settlement, and of the Tennessee Clean Water Network, a citizens’ plaintiff in this action. The consent decree resolves claims for injunctive relief and civil penalties for Chattanooga’s alleged violations of the Clean Water Act and the Tennessee Water Quality Control Act.
“Sewage overflows are a significant problem affecting water quality and, ultimately, the health of our communities across the Southeast,” said Gwen Keyes Fleming, EPA Region 4 Administrator. “The Chattanooga community will benefit from improved water quality and a cleaner, healthier environment as a result of this settlement.”
The proposed consent decree will require Chattanooga to comprehensively assess and rehabilitate its entire sewer collection system to eliminate overflows of untreated raw sewage. Specifically, Chattanooga will perform rehabilitation projects to address known problems within the collection system; implement programs to ensure proper management, operation and maintenance of its sewer systems; and install additional controls on the Chattanooga Creek combined sewer outfalls to ensure compliance with water quality standards.
Prior to finalizing the proposed consent decree, the city, along with EPA and the Tennessee Department of Environment and Conservation, held two public meetings to provide information regarding the sewer system and to seek community input regarding the impact that sewer overflows were having in the community.
Chattanooga has also agreed to perform a stream restoration supplemental environmental project at a cost of $800,000 in the 3800 Block of Agawela Drive, to restore the stream and stabilize the banks of a tributary of the South Chickamauga Creek and eliminate a significant source of sediment and solids to the creek. Half of the civil penalty will be paid to the United States. At the direction of the state, the other half of the civil penalty will be paid by Chattanooga through the performance of green infrastructure demonstration projects in the historic downtown Highland Park neighborhood to, among other things, improve water quality in the Dobbs Branch stream, which flows into Chattanooga Creek. Green infrastructure involves the use of soils, vegetation and natural processes to store, infiltrate and evaporate storm water to prevent it from getting into the sewer system.
“Today's consent decree sets out a schedule that will ensure the city of Chattanooga moves forward in making the much needed infrastructure changes to its sewer system,” said Tennessee Department of Environment and Conservation Commissioner Bob Martineau. “We’ve been pleased with the city's efforts and cooperative tone during these negotiations and will continue working together to ensure a cleaner, healthier environment for the citizens of Chattanooga.”
“We have seen far too many violations of the Tennessee Water Quality Control Act due to aging infrastructure across the state,” said Tennessee Attorney General Bob Cooper. “We hope this cooperative agreement to improve Chattanooga’s sewer system will improve the quality of our environment and economy.”
Keeping raw sewage and contaminated stormwater out of the waters of the United States is one of the EPA’s national enforcement initiatives for 2011 to 2013. The initiative focuses on reducing sewer overflows, which can present a significant threat to human health and the environment. These reductions are accomplished by obtaining commitments from municipalities to implement timely, affordable solutions to these problems, including the increased use of green infrastructure and other innovative approaches.
The United States has reached similar agreements with municipalities across the country, including the following in the Southeast: Mobile and Jefferson County (Birmingham), Ala.; Atlanta and Dekalb County, Ga.; Knoxville and Nashville, Tenn.; Miami-Dade County, Fla.; and Northern Kentucky Sanitation District #1 and Louisville, Ky.
The proposed consent decree with Chattanooga is subject to a 30-day public comment period and final court approval before becoming effective. A copy will be available on the Department of Justice website at www.justice.gov/enrd/Consent_Decrees.html.More information about the settlement: http://www.epa.gov/compliance/resources/cases/civil/cwa/cityofchattanooga.html.
More about EPA’s national enforcement initiative is available at: http://www.epa.gov/compliance/data/planning/initiatives/2011sewagestormwater.html.
The Nordam Group Inc. Resolves Foreign Corrupt Practices Act Violations and Agrees to Pay $2 Million PenaltyRead the Press Release
WASHINGTON – The NORDAM Group Inc., a provider of aircraft maintenance, repair and overhaul (MRO) services based in Tulsa, Okla., has entered into an agreement with the Department of Justice to pay a $2 million penalty to resolve violations of the Foreign Corrupt Practices Act (FCPA), announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division.
According to the agreement, NORDAM, its subsidiaries and affiliates paid bribes to employees of airlines created, controlled and exclusively owned by the People’s Republic of China in order to secure contracts to perform MRO services for those airlines. The bribes were paid both directly and indirectly to the airline employees. In an effort to disguise the bribes, three employees of NORDAM’s affiliate entered into sales representation agreements with fictitious entities and then used the money paid by NORDAM to those entities to pay bribes to the airline employees.
In addition to the monetary penalty, NORDAM agreed to cooperate with the department for the three-year term of the agreement, to report periodically to the department concerning NORDAM’s compliance efforts, and to continue to implement an enhanced compliance program and internal controls designed to prevent and detect FCPA violations.
The department entered into a non-prosecution agreement with NORDAM as a result of NORDAM’s timely, voluntary and complete disclosure of the conduct, its cooperation with the department and its remedial efforts. In addition, the agreement recognizes that a fine below the standard range under the U.S. Sentencing Guidelines is appropriate because NORDAM fully demonstrated to the department, and an independent accounting expert retained by the department verified, that a fine exceeding $2 million would substantially jeopardize the company’s continued viability.
The case is being handled by Trial Attorneys Daniel S. Kahn and Stephen J. Spiegelhalter of the Criminal Division’s Fraud Section. The division’s Office of International Affairs provided assistance. Assistant U.S. Attorney Kevin Leitch from the Northern District of Oklahoma also provided assistance in the case. The case was investigated by the FBI’s Washington Field Office’s team of special agents dedicated to the investigation of foreign bribery cases.
Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa.
Readout of Attorney General Eric Holder’s Meeting and MoU Signing with Malaysian Minister for Home AffairsRead the Press Release
Attorney General Eric Holder and Malaysian Minister for Home Affairs Datuk Seri Hishammuddin bin Tun Hussein met today, during the Attorney General’s official visit to Malaysia, to discuss transnational crime, terrorism and other areas of mutual law enforcement cooperation. Attorney General Holder and Minister Hishammuddin also signed a memorandum of understanding (MoU) on assistance in the field of transnational crimes.
“With the signing of this memorandum of understanding, we reaffirm that the United States and Malaysia share a robust commitment to protecting our citizens from criminal activities that transcend jurisdictions, cross international borders and span across the globe,” said Attorney General Eric Holder. “This agreement encourages direct cooperation between key authorities and law enforcement officials, allowing our two nations to more effectively – and more collaboratively – respond to the evolving transnational challenges we must confront. I’m confident that it will strengthen our ability to safeguard our citizens and bring dangerous criminals to justice.”
Under the MoU, law enforcement officials from both countries will be able to share information in order to prevent and investigate transnational crime including human trafficking, drug trafficking, terrorism, money laundering, cybercrimes and organized crime. The MoU encourages expanded direct and informal cooperation among law enforcement officers in both countries to assist in investigations. In addition, the MoU will enhance capacity-building efforts through training, consultations and exchanges. Information will not be shared where it is not legally permitted by either country.
The MoU is also part of a larger picture of growing cooperation between the U.S. and Malaysia in a range of areas from law enforcement to trade, from educational and cultural exchanges to bilateral dialogue.
After the MoU signing ceremony, Attorney General Holder met with the Prime Minister of Malaysia Dato’ Sri Najib Tun Abdul Razak.
Earlier today, Attorney General Holder met with with U.S. embassy personnel and then spoke to sessions and magistrate court judges, prosecutors, government officials and the Malaysian Bar Council about their ongoing efforts to hold criminals accountable and protect the civil liberties of all citizens. Attorney General Holder will meet with local law enforcement before travelling to Singapore for meetings with the U.S. Ambassador to the Republic of Singapore David Adelman and local law enforcement counterparts.
For photos of Attorney General Holder’s official visit, please visit http://blogs.justice.gov/main/archives/2373 .
Justice Department Settles with State of Nevada<br /> to Enforce Employment Rights of Returning Army ReservistRead the Press Release
WASHINGTON – The Justice Department today announced a settlement with the state of Nevada and its Office of the State Controller to resolve allegations that they willfully violated the employment rights of Army reservist Col. Arthur Ingram when he returned from military service. The settlement in this case represents the largest recovery the Civil Rights Division has obtained on behalf of a returning service member since 2004, when it assumed jurisdiction for the enforcement of the Uniformed Services Employment and Reemployment Rights Act (USERRA).
On July 13, 2012, the state of Nevada Board of Examiners ratified a settlement agreement previously filed by the parties and approved by the federal court in the U.S. District Court for the District of Nevada. The settlement requires the defendants to pay Ingram $262,000 in back pay and $211,000 to fully fund his pension benefits for a nine-year time period from when Ingram started his active duty military service through settlement.
The Justice Department’s complaint alleges that the defendants willfully violated USERRA by failing to reemploy Ingram in his prior position as chief deputy controller when he returned from military service in June 2008. According to the Justice Department’s complaint, after Ingram filed an initial complaint with the Labor Department’s Veterans’ Employment and Training Service to attempt to obtain reemployment, the defendants then willfully retaliated against him by withdrawing an offer to reemploy him in a lower paying position as a chief accountant, terminating his employment and backdating the termination to January 2007 to punitively prohibit his vesting in the Nevada state pension system.
USERRA requires all employers to promptly reemploy service members returning from military service in their pre-service position or a position of like seniority, status and pay. USERRA also prohibits employers from retaliating against service members for asserting their reemployment rights under the statute.“Men and women called to active duty need to know they do not have to sacrifice their civilian jobs at home in order to serve our country,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The Civil Rights Division is committed to aggressive enforcement of USERRA to protect the rights of those who, through their bravery and sacrifice, secure the rights of all Americans.”
“The United States Attorney’s Office for the District of Nevada remains committed to protecting the employment rights of military reservists when they return home from active duty following service on behalf of the United States,” said U.S. Attorney for the District of Nevada Daniel G. Bogden.
Additional information about USERRA can be found on the Justice Department websites www.usdoj.gov/crt/emp and www.servicemembers.gov, as well as the Labor Department website www.dol.gov/vets/programs/userra/main.htm.
Monday 16 July 2012
Rehabilitation Agency Owner in Detroit Sentenced to 84 Months in Prison for Role in $3 Million Therapy Fraud SchemeRead the Press Release
WASHINGTON – The owner of a Detroit-area rehabilitation agency was sentenced today to 84 months in prison for his leading role in a $3 million Medicare fraud scheme, the Departments of Justice and Health and Human Services (HHS) announced.
Detroit-area resident Tariq Mahmud, 54, was sentenced by U.S. District Judge Avern Cohn in the Eastern District of Michigan. In addition to his prison term, Mahmud was sentenced to three years of supervised release and was ordered to pay $1.8 million in restitution, joint and several with his co-defendants.
Mahmud was convicted by a federal jury on Feb. 2, 2012, after a four-day trial, of one count of conspiracy to commit health care fraud and six counts of health care fraud. Mahmud was charged along with four other defendants in an indictment unsealed on Feb. 17, 2011, as part of a nationwide Medicare fraud takedown, and subsequently in a superseding indictment on Dec. 28, 2011. The four other defendants have pleaded guilty and have been sentenced.
According to evidence presented during the trial, Mahmud was the owner of Comprehensive Rehabilitation Services Inc. (CRS), a fraudulent rehabilitation agency located in Dearborn, Mich. Between January 2003 and February 2007, CRS purchased falsified physical and occupational therapy files from more than 30 therapy and rehabilitation companies and used them to fraudulently bill Medicare for more than $3 million.
As part of the scheme, Medicare beneficiaries were paid cash kickbacks and given prescription drugs to sign forms and visit sheets that were later falsified to indicate that they received therapy services that were never provided. Physical and occupational therapists created false evaluations, progress notes and discharge papers indicating that the therapy services were given, when in fact they never were. Evidence at trial showed that the therapists never met the beneficiaries and Mahmud never provided or supervised the therapy billed to Medicare.
In addition to submitting more than $3 million in false therapy claims, Mahmud made additional false statements to Medicare regarding services that were never rendered. For instance, when Medicare inquired regarding a beneficiary who complained that he had not received the services for which CRS billed Medicare, Mahmud returned the payment and told Medicare that he consulted with his professional staff and the beneficiary had not been satisfied with services. In fact, CRS had no professional staff; the therapists who signed the beneficiary’s file never rendered any services; and the beneficiary never received services. Evidence at trial established that the beneficiary’s identity was stolen and used by CRS and a fraudulent file-making company to bill Medicare.
Today’s sentence 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; Acting Special Agent in Charge of the FBI’s Detroit Field Office Edward J. Hanko; and Special Agent in Charge Lamont Pugh III of the HHS Office of Inspector General’s (OIG) Chicago Regional Office.
This case was prosecuted by Trial Attorney Catherine K. Dick and Assistant Chief Benjamin S. Singer of the Criminal Division’s Fraud Section. It was investigated by the FBI and HHS-OIG, and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Michigan.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,330 defendants who collectively have falsely billed the Medicare program for more than $4 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.
Alabama Businessman, Lobbyist and Legislator Sentenced to Prison for Roles in Wide-Ranging Conspiracy to Influence and Corrupt Activities of Alabama State LegislatureRead the Press Release
WASHINGTON – Three individuals, including Alabama businessman Ronald Gilley, lobbyist Jarrod Massey and former Alabama state representative Terry Spicer were sentenced to prison today in Montgomery, Ala., for bribery-related offenses, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and FBI Special Agent in Charge Stephen Richardson.
U.S. District Judge Myron H. Thompson of the Middle District of Alabama sentenced Gilley to 80 months in prison, Massey to 65 months in prison and Spicer to 57 months in prison. Each defendant also was sentenced to a term of supervised release following his prison term.
Gilley, 47, of Dothan, Ala., and Massey, 41, of Troy, Ala., both pleaded guilty to a wide-ranging conspiracy to bribe multiple members of the Alabama legislature, as well as individual instances of federal program bribery involving legislators. According to court documents and previous testimony, Gilley owned a controlling interest in the Country Crossing real estate, entertainment and gambling development in Houston County, Ala. Country Crossing sought to offer electronic bingo gambling machines to the public. Massey owned a lobbying business, Mantra Governmental, and Gilley was one of Massey’s largest clients.
During the 2009 and 2010 Alabama legislative session, Gilley and Massey promoted the passage of pro-gambling legislation that would have been favorable to operating electronic bingo facilities. Specifically, Gilley and Massey corruptly gave, offered and agreed to give money and other things of value to Alabama state legislators with the intent to influence and reward them in connection with pro-gambling legislation. Gilley also pleaded guilty to money laundering for attempting to launder $200,000 in bribe payments to a state senator in order to disguise the illicit purpose of the money. Gilley and Massey both assisted in the government’s investigation, and the government recommended that each receive a reduction in his sentence as a result.
In a separate bribery conspiracy, Spicer, 46, of Elba, Ala., pleaded guilty to a single count of federal program bribery for his solicitation and receipt of multiple things of value from Gilley and Massey, including cash payments ranging from $1,000 to $3,000 per month during a period of more than four years; an all-expenses-paid ski trip for his family valued at $10,000; a one-time payment of $9,000; a $20,000 campaign contribution; and more than $22,500 in free concert tickets. In exchange, Spicer repeatedly offered official assistance, including by encouraging others to hire Massey as their lobbyist and by aiding Gilley as specific opportunities arose.
The case is being prosecuted by Deputy Chief M. Kendall Day and Trial Attorneys Emily Rae Woods and Marquest J. Meeks of the Public Integrity Section in the Justice Department’s Criminal Division. The case is being investigated by the FBI’s Montgomery Field Office.
Friday 13 July 2012
Two Indicted for Alleged Efforts to Supply Iran with <br /> U.S.-Materials for Gas Centrifuges to Enrich UraniumRead the Press Release
WASHINGTON – A federal grand jury in the District of Columbia has returned a superseding indictment charging Parviz Khaki, a citizen of Iran, and Zongcheng Yi, a resident of China, for their alleged efforts to obtain and illegally export to Iran U.S.-origin materials that can be used to construct, operate and maintain gas centrifuges to enrich uranium, including maraging steel, aluminum alloys, mass spectrometers, vacuum pumps and other items. Khaki is also accused of conspiring to procure radioactive source materials from the United States for customers in Iran.
The superseding indictment, which was returned late yesterday, was announced by Lisa Monaco, Assistant Attorney General for National Security; Ronald C. Machen Jr., U.S. Attorney for the District of Columbia; and John Morton, Director of U.S. Immigration and Customs Enforcement (ICE).
The superseding indictment charges Khaki, age 43, aka “Martin,” and Yi, aka “Yi Cheng,” aka “Kohler,” aka “Kohler Yi,” each with one count of conspiracy to violate the International Emergency Economic Powers Act (IEEPA) by conspiring with others to cause the export of U.S. goods to Iran without the required U.S. Treasury Department license. Both defendants are also charged with one count of conspiracy to defraud the United States; two counts of smuggling; two counts of illegally exporting U.S. goods to Iran in violation of IEEPA; and one count of conspiracy to commit money laundering.
Khaki was arrested on May 24, 2012, by authorities in the Philippines in connection with a U.S. provisional arrest request stemming from a March 8, 2012 indictment in the District of Columbia. Yi, who is purported to be the managing director of Monalila Co. LTD, a company in Guangzhou City, China, remains at large.
Both defendants face a maximum potential sentence of 20 years in prison for conspiring to violate IEEPA; five years in prison for conspiring to defraud the United States; ten years in prison for each smuggling count; 20 years in prison for each IEEPA count and 20 years in prison for conspiracy to commit money laundering.
“Today’s indictment sheds light on the reach of Iran’s illegal procurement networks and the importance of keeping U.S. nuclear-related materials from being exploited by Iran. Iranian procurement networks continue to target U.S. and Western companies for technology acquisition by using fraud, front companies and middlemen in nations around the globe. I applaud the authorities in the Philippines and the many U.S. agents, analysts and prosecutors who worked on this important case,” said Lisa Monaco, Assistant Attorney General for National Security.
“This new indictment shows that we have no tolerance for those who try to traffic in commodities that can be used to support Iran’s nuclear program,” said U.S. Attorney Ronald C. Machen Jr. “It also underscores our commitment to aggressively enforcing export laws."
“By dismantling this complex conspiracy to deliver nuclear-related materials from the United States to Iran, we have disrupted a significant threat to national security,” said ICE Director John Morton. “Homeland Security Investigations will continue to pursue those who exploit U.S. businesses to illegally supply foreign governments with sensitive materials and technology that pose a serious risk to America and its allies.”According to the indictment, from around October 2008 through January 2011, Khaki, Yi and others conspired to cause the export of goods from the United States to Iran in violation of the embargo. At no time during this period did the defendants have a license or authorization from the Treasury Department to export any U.S. goods to Iran.
In carrying out the conspiracy, the indictment alleges that Khaki directed Yi and others to contact U.S. companies about purchasing U.S.-origin goods. Yi and other conspirators then placed orders and purchased goods from various U.S. companies and had the goods exported from the United States through China and Hong Kong to Khaki and others in Iran. Yi and others allegedly made a variety of false statements to U.S. companies on behalf of Khaki to conceal that Iran was the final destination and end-user of the goods and to convince U.S. companies to export these items to a third country.
Efforts to Export to Iran U.S. Materials for Gas Centrifuges to Enrich Uranium
For example, the indictment alleges that on Dec. 6, 2008, Khaki asked an individual in China to obtain 20 tons of C-350 maraging steel from the United States for Khaki’s customer in Iran. In the months that followed, Khaki also had communications with Yi about purchasing 20 tons of maraging steel from a U.S. company with which Yi was in contact. Maraging steel is a special class of high-strength steel known for possessing superior strength without losing malleability. The enhanced strength of maraging steel makes it particularly suited for use in gas centrifuges for uranium enrichment.
In March 2009, Khaki allegedly began communicating with an undercover U.S. federal agent posing as an illegal exporter of U.S. goods. The agent told Khaki that the U.S. company (referenced above) could not sell Khaki the maraging steel because doing so was illegal, but that he (the undercover agent) could potentially help export the steel for a fee. Khaki allegedly replied to the agent with questions about price and payment. In the months that followed, Khaki continued to communicate with the agent in an effort to acquire and export the maraging steel to Iran, noting in one instance, “you know and I know this material are [sic] limited material and danger goods…” Khaki also discussed his desire to make money from the transaction.
The indictment also alleges that in late 2008, Khaki reached out to an individual in China about procuring 20 tons of 7075-O aluminum alloy 80mm rods and 20 tons of 7075-T6 aluminum alloy 150 mm rods from the United States or Europe. In one communication, Khaki explained to the individual that the aluminum alloy had to be American made because his Iranian customer had previously found that Chinese aluminum alloy was of poor quality.
Khaki also allegedly sought to obtain mass spectrometers from the United States. In a May 2009 email request to the undercover federal agent, Khaki specified that one magnetic mass spectrometer he sought was for the isotopic analysis of gaseous uranium hexafluoride. Uranium hexafluoride is the chemical compound used in the gas centrifuge process to enrich uranium. Khaki and Yi also conspired to obtain other items from U.S. companies that can be used for gas centrifuges, including measuring instruments, pressure transducers, vacuum pumps and other accessories, according to the charges.
Efforts to Export to Iran Radioactive Materials
The indictment further alleges that Khaki sought to obtain radioactive source materials from the United States. In May 2009, for instance, Khaki sent an email to the undercover agent asking the agent to purchase radioactive sources and test materials from a U.S. company. Attached to the email was a list of products, including barium-133 source and europium-152 source, as well as contact information for the U.S. company.
In January 2011, Khaki contacted the undercover agent again requesting that he purchase various radioactive sources. In one email to the agent, Khaki allegedly sent a product catalogue for radioactive sources, including cobalt-57 source, and in another email he requested the agent purchase cadmium-109 source.
Exports to Iran of Lathes and Nickel Alloy Wire through Hong Kong, China
The indictment alleges the defendants caused the illegal export of lathes and nickel alloy 120 wire from the United States through China to Iran. In February 2009, Khaki asked Yi to contact a U.S. company about procuring two Twister Speed Lathes. Yi allegedly purchased these items and arranged for them to be shipped from the United States to Hong Kong and ultimately to Iran in June 2009.
In another transaction, on Jan. 26, 2009, Khaki allegedly asked a conspirator to contact a U.S. company about purchasing nickel alloy 120. At Khaki’s request, the conspirator sent a U.S. company an order for nickel alloy, falsely stating that a company in China was the purchaser. In June 2009, the U.S. company shipped the nickel alloy to Yi in Hong Kong, who shipped it on to Iran, according to the charges.
This investigation was conducted by U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigation (HSI) agents. Assistance was provided by authorities in the Philippines. The prosecution is being handled by the U.S. Attorney’s Office for the District of Columbia and Trial Attorney Brandon L. Van Grack of the Counterespionage Section of the Justice Department’s National Security Division. The Office of International Affairs in the Justice Department’s Criminal Division also provided assistance.
The public is reminded that an indictment contains mere allegations. Defendants are presumed innocent unless and until proven guilty in a court of law.
National President, National Vice President and 39 Members and Associates of the Devils Diciples Motorcycle Gang IndictedRead the Press Release
An indictment unsealed today in the Eastern District of Michigan charges 41 members and associates of the Devils Diciples Motorcycle Gang, including National President Jeff Garvin Smith and National Vice President Paul Anthony Darrah, for their alleged participation in a variety of criminal offenses, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney Barbara McQuade for the Eastern District of Michigan and FBI Acting Assistant Director Valerie Parlave.
Thirty-one defendants were arrested today in Michigan and Alabama and five defendants were previously in custody. More than 60 firearms and more than 6,000 rounds of ammunition were seized during this investigation. In addition, eight methamphetamine manufacturing laboratories were dismantled during the investigation.
The indictment alleges that the 41 Devils Diciples members and associates, including Smith and Darrah, participated in various criminal acts, including violent crimes in aid of racketeering, drug trafficking, illegal firearms offenses, obstruction of justice, illegal gambling and other federal offenses. Eighteen of the defendants, including Smith and Darrah, are charged with violations of the Racketeer Influenced and Corrupt Organizations (RICO) Act by conducting their illegal enterprise through a pattern of racketeering activity which included murder, robbery, extortion, drug trafficking, obstruction of justice and other federal and state offenses.
“For years, according to the indictment, the Devils Diciples have spread fear in cities throughout Michigan and around the country,” said Assistant Attorney General Breuer. “This violent criminal enterprise allegedly profits from drug trafficking and illegal gambling, and uses intimidation and violence to silence its adversaries and maintain control over its members. Today’s arrests of the Devils Diciples’ top leaders and 39 of the gang’s members and associates are an important step in our efforts to dismantle violent criminal enterprises across the country.”
“Removing violent criminal organizations from our community is essential to attaining the quality of life we expect and deserve,” said U.S. Attorney McQuade. “Federal law enforcement is using all legal tools available to prosecute violent criminal enterprises like this one.”
“Today’s law enforcement action takes violence off the streets,” said FBI Acting Assistant Director Valerie Parlave. “The FBI appreciates the strong law enforcement partnerships leading to this activity and will continue its commitment to state and local communities to address this violent, and often brutal, criminal threat across the U.S.”
According to the indictment, the Devils Diciples is a criminal enterprise with its national headquarters in Clinton Township, Mich. The Devils Diciples operates regional chapters located in cities throughout Michigan, Alabama, Arizona, California, Illinois, Indiana, Ohio and elsewhere. The Devils Diciples engage in criminal activities for financial gain, including distribution of narcotics, theft, transportation and sale of stolen motorcycles, conducting illegal gambling businesses, robbery, extortion and acts of violence.
According to the indictment, membership in the Devils Diciples is based in part on successfully completing a probationary period, followed by formal approval by one or more members or leaders. Members are required to own Harley Davidson motorcycles and are commonly referred to as “full patched members.” Full patched members are identified by a club name or nickname for the express purpose of concealing their identity and thwarting identification by law enforcement. Members are required to follow orders from leadership, including orders to assault or use threats and intimidation against others, to transport or distribute drugs, to lie to law enforcement or to hide or destroy evidence. Members are also required to follow the Devils Diciples by-laws and attend regular meetings referred to as “church.”
The indictment alleges that the Devils Diciples committed acts involving attempted murder, robbery, extortion, assault and threats of violence to maintain the territory of the organization and to protect the organization and its members from detection and prosecution by law enforcement authorities.
The indictment charges the 41 Devils Diciples members and associates with a variety of criminal offenses including violent crimes in aid of racketeering, drug trafficking, illegal firearms offenses, obstruction of justice and other federal offenses.
Specifically, the indictment alleges that in August 2003, Vincent John Witort and multiple other Devils Diciples members robbed, kidnapped and attempted to murder other members of the Arizona Chapter for violating Devils Diciples rules.
The indictment alleges that in 2004, Smith possessed state and federal law enforcement manuals regarding outlaw motorcycle gangs marked “For Official Use Only” and “Law Enforcement Sensitive” and numerous documents related to criminal matters involving members of the Devils Diciples, including police reports, search warrants, affidavits, indictments and witness interview transcripts.
Smith allegedly assaulted another individual in August 2008, for the purpose of maintaining and increasing position in the Devils Diciples enterprise. The indictment also alleges that in late 2008, Smith, Paul Anthony Darrah and Cary Dale Vandiver assaulted Scott Thomas Perkins with a metal pipe.
According to the indictment, in February 2009, Ronald Raymond Roberts, Christopher Raymond Cook and Wayne Russell Werth allegedly assaulted Danny Russell Burby Jr. with a box cutter and a bottle, after various Devils Diciples members circulated flyers containing a photograph of Burby and stating that Burby was a “snitch.”
The indictment also alleges that in January 2012, David Randy Drozdowski and Smiley Villa assaulted an individual they believed was a member of a rival motorcycle club for being present in Devils Diciples territory.
Sixteen of the members and associates named in the indictment are charged with conspiracy to conduct an illegal gambling business. The defendants operated slot machines located in several Devils Diciples clubhouses in Michigan, Arizona and Alabama to generate income for the criminal enterprise and its members.
The 41 defendants charged are:
1. Scott William Sutherland, aka “Scotty Z”
2. Ronald Raymond Roberts, aka “Rockin’ Ronnie”
3. David Thomas Roberts, aka “Detroit Dave”
4. Patrick Michael McKeoun, aka “Magoo”
5. Jeff Garvin Smith, aka “Fat Dog”
6. Paul Anthony Darrah, aka “Pauli”
7. Cary Dale Vandiver, aka “Gun Control”
8. Vincent John Witort, aka “Holiday”
9. Michael William Mastromatteo, aka “Iron Mike”
10. Vernon Nelson Rich, aka “Vern”
11. John Renny Riede, aka “Bear”
12. Victor Carlos Castano
13. Gary Lee Nelson
14. Michael Kenneth Rich, aka “Tatu”
15. Raymond Charles Melioli, aka “Romeo”
16. Timothy Paul Downs, aka “Space”
17. David Randy Drozdowski, aka “D”
18. Smiley Villa, aka “SA”
19. Dean Edward Jakiel, aka “Jesus”
20. Tony Wayne Kitchens, aka “Trouble”
21. Sylvester Gerard Wesaw, aka “Sly Dog”
22. Ronald Nick Preletz, aka “Polar Bear”
23. Howard Joseph Quant, aka “44”
24. Scott Thomas Perkins, aka “Scotty P”
25. Clifford Chansel Rhodes, II
26. David Roy Delong, aka “Reverend”
27. Christopher Raymond Cook, aka “Damien”
28. Michael John Palazzola, aka “Utica Mike”
29. Danny Russell Burby, Jr., aka “Thumbs”
30. Ronald Leon Lambert, aka “Crow”
31. Jason Joseph Cook, aka “Cookie”
32. Edward Allen Taylor, aka “Big Ed”
33. Salvatore Battaglia, aka Bando”
34. William Scott Lonsby, aka “Buckwheat”
35. Wayne Russell Werth
36. Lauri Ann Ledford
37. Jennifer Lee Cicola
38. Dean Anthony Tagliavia
39. Alexis Catherine May
40. Paula Mileha Friscioni
41. John Charles Scudder
An indictment is only a charge and is not evidence of guilt. Each defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
The case was investigated by the FBI, the Michigan State Police, the Macomb County Sheriff’s Office, and the County of Macomb Enforcement Team (COMET), with assistance from the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the St. Clair County Sheriff’s Office. The case is being prosecuted by the Organized Crime and Gang Section of the Justice Department’s Criminal Division and the U.S. Attorney’s Office for the Eastern District of Michigan.
Hazardous Waste Generators Agree to $56.4 Million Cleanup of Former Texas City, Texas, Waste Disposal SiteRead the Press Release
WASHINGTON – The Department of Justice and the U.S. Environmental Protection Agency (EPA) announced today an agreement with over three dozen companies and government agencies that will result in a $56.4 million cleanup of the “Malone Services Company” Superfund Site in Texas City, Texas, a former waste-disposal site near the shore of Galveston Bay.
“Cleanup under today’s settlement will address the threat from more than a quarter of a million cubic yards of contamination left behind by the site operators in tanks and in a large unlined earthen basin,” said Robert Dreher, Principal Deputy Assistant Attorney General of the Justice Department’s Environment and Natural Resources Division. “Through this agreement, the parties have avoided costly and time-consuming litigation and expedited a cleanup that will protect the health and safety of citizens of Texas City and the coastal environment along Swan Lake.”
The settlement, which is subject to court approval, requires a group of 27 companies to clean up the site, pay EPA $900,000 towards past and future costs, and reimburse the state of Texas for $796,726 in past costs. Among the companies doing the clean-up work are BP Products North America Inc., Pharmacia (formerly Monsanto), Marathon Oil Company, Exxon Mobil Corporation and BASF Corporation. Seventy-six entities, including the United States and the Texas Commission on Environmental Quality (TCEQ) are resolving their liability by paying cash to the group of 27. The United States, which shipped 1.62 percent of the waste, will pay $1,490,029. TCEQ, which shipped 0.00545 percent of the waste, will contribute $6,766. (EPA previously completed four rounds of administrative settlements with approximately 230 relatively small contributors of waste, so-called “de minimis” parties, collecting approximately $8.4 million. EPA will make at least $4.5 million from these and other recoveries available to the group of 27 companies carrying out the cleanup.)
“Once approved by the court, this settlement will reinforce the 'polluter pays' principle that is central to the Superfund program by obtaining a commitment for funds for cleanup work from the responsible parties at this site,” said EPA Acting Regional Administrator Sam Coleman. “This settlement ensures the cleanup of this site will continue, further protecting public health and the environment.”
The federal and state natural resource trustees for the site — the National Oceanic and Atmospheric Administration, the U.S. Department of the Interior represented by the U.S. Fish and Wildlife Service, TCEQ, the Texas Parks and Wildlife Department and the Texas General Land Office — determined that natural resources associated with upland-woodlands habitat, freshwater-marsh habitat and saltwater-marsh habitat, were injured by contamination. The parties that shipped waste to the site will pay the trustees a total of $3,109,000 to implement environmental restoration projects, which will be selected in the future by the trustees and described in a restoration plan on which public comment will be solicited.
The Malone Service Company operated a disposal facility for waste oil and waste chemicals between approximately 1964 and 1996. Hundreds of entities sent a total of approximately 481 million gallons of waste to the Site. Approximately 260,000 cubic yards of contaminated oily sludge is present in above-ground storage tanks and a multi-acre earthen impoundment. The consent decree requires that the oily sludge be solidified and placed into an on-site RCRA-Subtitle C-equivalent cell, along with contaminated soil. The groundwater will be monitored to confirm that the remedial action is preventing offsite migration.
The proposed settlement was lodged today in the U.S. District Court for the Southern District of Texas. The settlement is subject to a 30-day public comment period and final court approval. A copy of the proposed consent decree is available on the Justice Department web site at www.usdoj.gov/enrd/Consent_Decrees.html
Thursday 12 July 2012
Justice Department Reaches Settlement with Wells Fargo Resulting in More Than $175 Million in Relief for Homeowners to Resolve Fair Lending ClaimsRead the Press Release
The Department of Justice today filed the second largest fair lending settlement in the department’s history to resolve allegations that Wells Fargo Bank, the largest residential home mortgage originator in the United States, engaged in a pattern or practice of discrimination against qualified African-American and Hispanic borrowers in its mortgage lending from 2004 through 2009.
The settlement provides $184.3 million in compensation for wholesale borrowers who were steered into subprime mortgages or who paid higher fees and rates than white borrowers because of their race or national origin. Wells Fargo will also provide $50 million in direct down payment assistance to borrowers in communities around the country where the department identified large numbers of discrimination victims and which were hard hit by the housing crisis.
Additionally, Wells Fargo has agreed to conduct an internal review of its retail mortgage lending and will compensate African-American and Hispanic retail borrowers who were placed into subprime loans when similarly qualified white retail borrowers received prime loans. Compensation paid to any retail borrowers identified in the review process will be in addition to the $184.3 million to compensate wholesale borrowers who were victims of discrimination .
“The department’s action makes clear that we will hold financial institutions accountable, including some of the nation’s largest, for lending discrimination,” said Deputy Attorney General James M. Cole. “An applicant’s creditworthiness, and not the color of his or her skin, should determine what loans a borrower qualifies for. With today’s settlement, the federal government will ensure that African-American and Hispanic borrowers who were discriminated against will be entitled to compensation and borrowers in communities hit hard by this housing crisis will have an opportunity to access homeownership.”
The settlement, which is subject to court approval, was filed today in the U.S. District Court for the District of Columbia in conjunction with the department’s complaint, which alleges that between 2004 and 2008, Wells Fargo discriminated by steering approximately 4,000 African-American and Hispanic wholesale borrowers, as well as additional retail borrowers, into subprime mortgages when non-Hispanic white borrowers with similar credit profiles received prime loans. All the borrowers who were allegedly discriminated against were qualified for Wells Fargo mortgage loans according to Well Fargo’s own underwriting criteria.
The United States also alleges that, between 2004 and 2009, Wells Fargo discriminated by charging approximately 30,000 African-American and Hispanic wholesale borrowers higher fees and rates than non-Hispanic white borrowers because of their race or national origin rather than the borrowers’ credit worthiness or other objective criteria related to borrower risk.
“By reaching a settlement in this case, African-American and Hispanic wholesale borrowers who received subprime loans when they should have received prime loans or who paid more for their loans will get swift and meaningful relief,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “As one of the largest mortgage lenders in the country, Wells Fargo’s commitment to conduct an internal review of its retail lending and compensate African American and Hispanic retail borrowers who may have been improperly placed in subprime loans is significant. We will continue to work aggressively to ensure that all qualified borrowers have access to credit on an equal basis.”
The United States’ complaint alleges that African-American and Hispanic wholesale borrowers paid more than non-Hispanic white wholesale borrowers, not based on borrower risk, but because of their race or national origin. Wells Fargo’s business practice allowed its loan officers and mortgage brokers to vary a loan’s interest rate and other fees from the price it set based on the borrower’s objective credit-related factors . This subjective and unguided pricing discretion resulted in African-American and Hispanic borrowers paying more. The complaint alleges that Wells Fargo was aware the fees and interest rates it was charging discriminated against African-American and Hispanic borrowers, but the actions it took were insufficient and ineffective in stopping it.
The United States’ complaint also alleges that, as a result of Wells Fargo’s policies and practices, qualified African-American and Hispanic wholesale borrowers were placed in subprime loans rather than prime loans even when similarly-qualified non-Hispanic white borrowers were placed in prime loans. The discriminatory placement of wholesale borrowers in subprime loans, also known as “steering,” occurred because it was the bank’s business practice to allow mortgage brokers and employees to place a loan applicant in a subprime loan even when the applicant qualified for a prime loan . In addition, Wells Fargo gave mortgage brokers discretion to request exceptions to the underwriting guidelines, and Wells Fargo’s employees had discretion to grant these exceptions.
This is the second time that the Justice Department has alleged and obtained relief for borrowers who were steered into loans based on race or national origin, a practice that systematically placed borrowers of color into subprime mortgage loan products while placing non-Hispanic white borrowers with similar creditworthiness in prime loans. By steering borrowers into subprime loans from 2004 to 2008, the complaint alleges, Wells Fargo harmed those qualified African-American and Hispanic borrowers. Subprime loans generally carried higher-cost terms, such as prepayment penalties and adjustable interest rates that started with low initial teaser rates, and then increased significantly after two or three years, often making the payments unaffordable and leaving the borrowers at a much higher risk of default or foreclosure.
The department began its investigation into Wells Fargo’s lending practices in 2009 and received a referral in 2010 from the Office of the Comptroller of the Currency (OCC) which conducted its own parallel investigation of Wells Fargo’s lending practices in the Baltimore and Washington, D.C. metropolitan areas. The OCC found that there was reason to believe that Wells Fargo engaged in a pattern or practice of discrimination in these metro areas on the basis of race or color, in violation of the FHA and ECOA.
This case was prosecuted by the Fair Lending Unit in the Civil Rights Division’s Housing and Civil Enforcement Section in conjunction with the U.S. Attorney’s Office for the District of Columbia. Since the attorney general established the unit in early 2010, it has filed a complaint in or resolved 19 matters. By way of contrast, from 1993 to 2008, the department filed or resolved 37 lending matters, an average of a little more than two cases per year.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF). President Obama established the interagency FFETF to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. For more information on the task force, visit www.stopfraud.gov .
A copy of the complaint and proposed settlement order, as well as additional information about fair lending enforcement by the Justice Department, can be obtained from the Justice Department website at www.justice.gov/fairhousing .
The proposed settlement provides for an independent administrator to contact and distribute payments of compensation at no cost to borrowers whom the Justice Department identifies as victims of Wells Fargo’s discrimination. The department will make a public announcement and post contact information on its website once an administrator is chosen.
Updated January 17, 2013
The settlement provides for an independent administrator to contact and distribute payments of compensation at no cost to borrowers whom the Justice Department identifies as victims of Wells Fargo’s discrimination. The Department has approved Wells Fargo’s choice of Epiq Class Action & Claims Solutions, Inc. to administer the settlement on the parties’ behalf. Over the next few months, Epiq will contact borrowers who are eligible for compensation from the settlement. African-American and Hispanic borrowers who received loans originated by Wells Fargo between 2004 and 2009 and who believe that they may have been victims of lending discrimination by Wells Fargo and have questions about the settlement may contact Epiq, in English or Spanish, at 1-866-329-5282 or via email at [email protected]. The Department of Justice is in the process of providing Epiq information about borrowers who have contacted the Department since it announced the settlement, and Epiq will follow-up with those borrowers as appropriate.
Updated December 4, 2013
On November 25, 2013, the participation period ended for eligible victims to choose to participate in the settlement. In early 2014, the Settlement Administrator plans to mail a letter with the exact payment amount and a release form to those who returned the response form by the deadline. The Independent Settlement Administrator will mail checks on a rolling basis, upon receipt of a signed release form.
Updated March 28, 2014
In early 2014, the Settlement Administrator mailed a letter with the exact payment amount and a release form to those who returned the participation form by the deadline. The Independent Settlement Administrator will mail checks on a rolling basis, upon receipt of a valid, signed release form.
Related Materials:
Complaint
Borrower Letter Mailing Notice
Proposed Consent Decree
Settlement Administrator Selection Notice
Notice of Additional Monetary ReliefFormer Police Officer of Puerto Rico Sentenced to 40 Years in Prison for Role in Providing Security for Drug TransactionsRead the Press Release
A former police officer of Puerto Rico was sentenced today in San Juan to 40 years in prison for his role in providing security for drug transactions, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and Special Agent in Charge Joseph S. Campbell of the FBI’s San Juan Division.
Javier A. Diaz Castro, 30, was sentenced by U.S. District Judge Gustavo A. Gelpi for the District of Puerto Rico.
Diaz was convicted on Dec. 12, 2011, of two counts of conspiracy to possess with intent to distribute more than five kilograms of cocaine, two counts of attempting to possess with the intent to distribute more than five kilograms of cocaine, and two counts of possession of a firearm in furtherance of a drug transaction. Diaz was charged in an indictment unsealed on Oct. 6, 2010, along with 88 other law enforcement officers in Puerto Rico and 44 other individuals, as part of the FBI undercover operation known as Guard Shack. To date, 128 of the charged defendants have pleaded guilty or have been convicted at trial, including Diaz.
According to the evidence presented in court, on at least two occasions in 2010, Diaz provided security for what he believed were a series of illegal drug deals, but which in fact were part of the undercover FBI operation. Diaz, a 10-year veteran of the police force, was assigned to the frauds unit at the time of the transactions. According to information presented at trial, Diaz was brought into the scheme by another police officer of Puerto Rico.
In return for the security he provided, based on his departmental training and using his service weapon, Diaz received cash payments of $2,000 per transaction.
The case was prosecuted by Trial Attorneys Eric L. Gibson and Barak Cohen of the Public Integrity Section in the Justice Department’s Criminal Division. The case was investigated by the FBI. The U.S. Attorney’s Office for the District of Puerto Rico also participated in the investigation and prosecution of this case.
Former New Mexico Corrections Officer Pleads Guilty to Civil Rights Violations of InmateRead the Press Release
Sylvester Bruce, 44, a former corrections officer with Navajo Nation’s Shiprock Detention Center (SDC) in Shiprock, N.M., pleaded guilty today in federal court on charges related to the sexual abuse of an inmate during the summer and fall of 2010. Specifically, Bruce pleaded guilty to one count of violating the civil rights of the victim when he touched her breasts against her will. Bruce also pleaded guilty to making material false statements to the FBI when he denied taking pictures of inmates inside the cells of the SDC.
According to court documents, while the victim was incarcerated at SDC , Bruce repeatedly placed his hands under the victim’s shirt and bra, and grabbed her breasts, knowing that she did not consent to his actions. Bruce did so in areas of the jail that did not have surveillance cameras. Bruce further admitted that he lied to the FBI when he denied taking pictures of inmates in their cells, acknowledging that he had, in fact, photographed two female inmates asleep on a bed in their cell.
"Sexual assaults by corrections officers on those they are charged with keeping safe undermine the very foundation of our judicial system,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The Justice Department will vigorously prosecute these crimes and work to vindicate the rights of the courageous victims who report them."
Under the terms of the plea agreement, Bruce will be sentenced to a term of imprisonment of 12 months and a day. Bruce will also not be able to serve in a law enforcement capacity again and will submit to federal and state sex offender registration requirements.
“Our system of justice is clear and unequivocal - every law enforcement officer must follow the laws they are sworn to enforce. While the vast majority of officers perform their duties to protect the public with professionalism and integrity often under very dangerous conditions, there are an unscrupulous few who do not,” said Kenneth J. Gonzales, U.S. Attorney for the District of New Mexico. “Every person in lock-up, regardless of the charge or crime of conviction, is entitled to be safe and certainly should never be victimized by those responsible for guarding them. I commend the victim in this case for having the courage to step forward and assert her right to be free of sexual abuse, and for trusting the Department of Justice to protect her.”
“The FBI, as the lead agency for enforcing federal civil rights laws, will continue to vigorously investigate and bring to justice corrections officers who betray the great trust placed in them when they abuse the individuals in their custody,” said Carol K.O. Lee, Special Agent in Charge of the Albuquerque Division of the FBI. “I am proud of the fine work done by the FBI Special Agents in this case, and would like to express my gratitude for the assistance of the U.S. Justice Department's Civil Rights Division, the U.S. Attorney's Office, and the Navajo Department of Criminal Investigations.”
This case was investigated by the Farmington Resident Agency of the Albuquerque Division of the FBI and the Shiprock Division of the Navajo Nation Department of Public Safety, and was prosecuted by Assistant U.S. Attorney Mark Baker for the District of New Mexico and Fara Gold of the Justice Department’s Civil Rights Division.
El Departamento de Justicia Realiza Acuerdo Conciliatorio con Wells Fargo, de Más de 175 Millones de Dólares en Reparación para Propietarios de Vivienda, en Resolución de Reclamos de Otorgamiento Justo de Cr...Read the Press Release
WASHINGTON – El Departamento de Justicia presentó hoy el segundo mayor acuerdo conciliatorio de otorgamiento justo de préstamos de la historia del departamento, en resolución de alegatos de que Wells Fargo Bank, el mayor originador de hipotecas para vivienda de los Estados Unidos, exhibió un patrón o práctica de discriminación de prestatarios afroestadounidenses e hispanos en su otorgamiento de préstamos entre el 2004 y el 2009.
El acuerdo conciliatorio dispone una compensación de 125 millones de dólares para prestatarios mayoristas que fueron orientados hacia hipotecas del tipo subpreferenciales ("subprime") o pagaron cargos y tasas más altos que prestatarios de raza blanca, debido a su raza u origen nacional. Wells Fargo también proveerá 50 millones de dólares en asistencia directa para pagos iniciales a prestatarios en comunidades de todo el país, en lugares donde el departamento identificó grandes cantidades de víctimas de discriminación y que fueron fuertemente golpeados por la crisis de la vivienda.
Asimismo, Wells Fargo ha acordado llevar a cabo una revisión interna de su otorgamiento de préstamos minoristas y compensará a los prestatarios minoristas afroestadounidenses e hispanos que recibieron préstamos subpreferenciales ("subprime"), cuando prestatarios de raza blanca con calificaciones similares recibieron préstamos del tipo preferenciales ("prime"). La compensación pagada a cualquier prestatario minorista identificado en el proceso de revisión será por encima de los 125 millones de dólares para compensar a prestatarios mayoristas quienes fueron víctimas de discriminación.
“La acción del departamento deja claro que las instituciones financieras, incluyendo algunas de las más grandes de la nación, responderán por discriminar en el otorgamiento de préstamos”, dijo el Secretario de Justicia Adjunto James M. Cole. “La solvencia del solicitante, y no el color de su piel, debe ser el factor determinante del tipo de préstamo que le será otorgado. Con el acuerdo conciliatorio de hoy, el gobierno federal asegurará que los prestatarios afroestadounidenses e hispanos discriminados tendrán derecho a compensación y que los prestatarios de comunidades fuertemente golpeadas por esta crisis de vivienda tengan una oportunidad de ser propietarios”.
El acuerdo conciliatorio,el cual es sujeto a aprobación judicial, fue presentado hoy en el Tribunal Federal de Distrito para el Distrito de Columbia en conjunto con la demanda del departamento, la cual alega que entre el 2004 y el 2008, Wells Fargo discriminó al orientar a aproximadamente 4,000 prestatarios mayoristas afroestadounidenses e hispanos, así como prestatarios minoristas adicionales, hacia hipotecas subpreferenciales, cuando prestatarios de raza blanca no hispanos con perfiles de crédito similares recibieron préstamos preferenciales. Todos los prestatarios objeto de la discriminación alegada cumplían los requisitos para hipotecas de Wells Fargo, de acuerdo con los propios criterios de suscripción de Wells Fargo.
Asimismo, Estados Unidos alega que, entre el 2004 y el 2009, Wells Fargo cometió un acto de discriminación al cobrarles a aproximadamente 30,000 prestatarios mayoristas afroestadounidenses e hispanos cargos y tasas más altos que a prestatarios blancos no hispanos debido a su raza u origen nacional, en lugar de la solvencia de los prestatarios y otros criterios objetivos asociados al riesgo crediticio del prestatario.
“Al lograr un acuerdo conciliatorio en este caso, los prestatarios mayoristas afroestadounidenses e hispanos que recibieron préstamos subpreferenciales, cuando deberían haber recibido préstamos preferenciales, o que pagaron más por sus préstamos, recibirán compensación rápida y significativa”, dijo Thomas E. Perez, Secretario Auxiliar de la División de Derechos Civiles. “Como uno de los principales prestamistas hipotecarios del país, el compromiso de Wells Fargo de realizar una revisión interna de su otorgamiento de préstamos minoristas y compensar a prestatarios minoristas afroestadounidenses e hispanos a los que se les haya otorgado préstamos subpreferenciales indebidamente es importante. Seguiremos trabajando activamente para asegurar que todos los prestatarios aptos tengan acceso parajo al crédito”.
La demanda de los Estados Unidos alega que prestatarios mayoristas afroestadounidenses e hispanos pagaron más que prestatarios mayoristas blancos no hispanos, no basado en el riesgo financiero que presentaban, sino debido a su raza u origen nacional. La práctica comercial de Wells Fargo permitió que sus oficiales de préstamos y corredores hipotecarios variaran la tasa de interés de un préstamo y otros cargos respecto al precio que estableció basándose con base en factores crediticios objetivos del prestatario. Debido a esta libertad subjetiva y sin orientación, los prestatarios afroestadounidenses e hispanos pagaron más. La demanda alega que Wells Fargo sabía que los cargos y las tasas de interés que estaba cobrando discriminaban contra prestatarios afroestadounidenses e hispanos, pero que las acciones que tomó fueron insuficientes e ineficaces para poner fin al hecho.
La demanda entablada por los Estados Unidos también alega que, como resultado de las políticas y prácticas de Wells Fargo, se les otorgaron a prestatarios mayoristas afroestadounidenses e hispanos que reunían los requisitos necesarios, préstamos subpreferenciales en lugar de préstamos preferenciales, aunque se les otorgaron a prestatarios blancos no hispanos con calificaciónes similares préstamos preferenciales. El otorgamiento discriminatorio de los préstamos subpreferenciales, también conocido como “direccionamiento” [“steering”], contra prestatarios mayoristas ocurrió porque era la práctica comercial de Wells Fargo permitir que los corredores y empleados hipotecarios otorgaran un préstamo subpreferencial a un prestatario, aunque el prestatario cumpliera con los requisitos para un préstamo preferencial. Además, Wells Fargo les otorgó a los corredores hipotecarios la libertad de solicitar excepciones a las directrices de suscripción, y los empleados de Wells Fargo tenían la libertad de otorgar estas excepciones.
Esta es la segunda vez que el Departamento de Justicia alega y obtiene reparación para prestatarios que fueron direccionados a los que se les otorgaron préstamos basados en su raza u origen nacional, una práctica que sistemáticamente otorgó a prestatarios de color productos hipotecarios subpreferenciales ("subprime"), y otorgó a prestatarios blancos no hispanos con solvencia similar préstamos del tipo preferenciales ("prime"). Al orientar a prestamistas hacia préstamos subpreferenciales del 2004 al 2008, alega la demanda, Wells Fargo perjudicó a dichos prestamistas afroestadounidenses e hispanos calificados. Los préstamos subpreferenciales tenían, en general, costos más altos, tales como penalidades de pago prematuro y tasas de interés ajustables que comenzaban con tasas de interés iniciales bajas, y luego aumentaban repentinamente después de dos o tres años, haciendo, muchas veces, impagables las cuotas y colocando a los prestatarios bajo un riesgo mucho más alto de incumplimiento o ejecución hipotecaria.
El departamento inició su investigación de las prácticas de otorgamiento de préstamos de Wells Fargo en el 2009 y en el 2010 recibió una remisión de la Oficina del Controlador de la Moneda [Office of the Comptroller of the Currency (OCC, por sus siglas en inglés)] que realizó su propia investigación paralela de las prácticas de otorgamiento de préstamos de Wells Fargo en las áreas metropolitanas de Baltimore y Washington, D.C. La OCC encontró que había motivos para creer que Wells Fargo exhibió un patrón o una práctica de discriminación en estas áreas metropolitanas basándose en raza o color, violando las disposiciones de la la Ley de Vivienda Justa (FHA, por sus siglas en inglés) y la Ley de Igualdades de Oportunidad al Crédito (ECOA, por sus siglas en inglés).
Este caso fue enjuiciado por la Unidad de Otorgamiento Justo de Préstamos de la Sección de Vivienda y Cumplimiento de la Ley Civil de la División de Derechos Civiles, en conjunto con la Fiscalía Federal del Distrito de Columbia. Desde que el Secretario de Justicia de los Estados Unidos estableció la unidad a principios del 2010, la misma ha entablado demandas o resuelto 19 casos. En contraste, entre el 1993 y el 2008, el departamento entabló o resolvió 37 casos asociados a préstamos, un promedio de un poco más de dos casos por año.
El anuncio del día de hoy es parte de un esfuerzo en marcha de la Fuerza de Tarea Interagencia de Coacción contra el Fraude Financiero del Presidente Obama (Financial Fraud Enforcement Task Force, FFETF, por sus siglas en inglés). El Presidente Obama estableció la Fuerza de Tarea Interagencia de Coacción contra el Fraude Financiero para llevar a cabo una iniciativa enérgica, coordinada y proactiva para investigar y enjuiciar delitos financieros. La fuerza de tarea incluye a representantes de una amplia gama de dependencias federales, autoridades regulatorias, inspectores generales y miembros de las fuerzas del orden público estatales y locales, quienes, trabajando juntos, aprovechan un poderoso espectro de recursos de coacción penal y civil. La fuerza de tarea está trabajando para mejorar la labor en todo el poder ejecutivo federal, y con asociados estatales y locales, para investigar y enjuiciar los delitos financieros importantes, asegurar un castigo justo y eficaz para quienes cometan delitos financieros, combatir la discriminación en los mercados de préstamos y financieros y recuperar fondos para las víctimas de delitos financieros. Para obtener más información sobre la fuerza de tarea, visite www.stopfraud.gov.
Para obtener una copia de la demanda y de la orden de acuerdo conciliatorio propuesto, así como información adicional sobre la labor del Departamento de Justicia para hacer valer las leyes de otorgamiento justo de préstamos, visite el portal del Departamento de Justicia en www.justice.gov/fairhousing.
El acuerdo conciliatorio propuesto dispone que un administrador independiente se comunique con prestatarios identificados por el Departamento de Justicia como víctimas de discriminación por parte de Wells Fargo y distribuya sin ningún costo a los mismos pagos de compensación. El departamento realizará un anuncio público y publicará información de contacto en su portal en Internet una vez que se haya elegido el administrador. Los prestatarios elegibles para recibir indemnizaciones provenientes del acuerdo conciliatorio serán luego contactados por el administrador. Las personas que crean que pueden haber sido víctimas de discriminación en el otorgamiento de préstamos por parte de Wells Fargo y tengan preguntas sobre el acuerdo conciliatorio pueden enviar un mensaje de correo electrónico al departamento a [email protected].