Latest Records
Newest first across public DOJ and U.S. Attorney press releases.
Wednesday 11 July 2012
Owner of Insulation Service Company Pleads Guilty to Million Dollar Bid-Rigging and Fraud <br /> Conspiracies at New York City HospitalRead the Press Release
WASHINGTON — The owner of a former New York City insulation service company pleaded guilty today to a three-count indictment charging him with conspiring to rig bids on contracts for re-insulation services to New York Presbyterian Hospital (NYPH), conspiring to defraud the Internal Revenue Service (IRS) and filing a false tax return, the Department of Justice announced.
David Porath pleaded guilty in the U.S. District Court in Manhattan to charges originally filed under seal on Feb. 18, 2010. At the time of the indictment, Porath was living in Israel. He was extradited and returned to the United States on Feb. 16, 2012. According to the indictment, between early 2000 and March 2005, Porath and his co-conspirators engaged in a bid-rigging conspiracy whereby they created the illusion of a competitive bidding process at NYPH by preparing and submitting fictitious, intentionally high bids so that Porath’s company would be awarded the contracts for re-insulation services for having the “low” bid.
“By submitting intentionally high, non-competitive bids, the co-conspirators deceived NYPH and distorted the competitive market,” said Acting Assistant Attorney General Joseph Wayland in charge of the Department of Justice’s Antitrust Division. “The division will continue to apprehend and bring to justice those who rig bids and thereby deprive the public of the benefits afforded by a truly competitive bidding process.”
The indictment further charged that between October 2000 and February 2005, Porath conspired with Andrzej Gosek, the owner of a Pennsylvania-based asbestos abatement company, and others, to defraud the IRS and to subscribe to false tax returns. Porath gave Gosek checks made out to companies in Brooklyn, purportedly for work done at NYPH by the Brooklyn companies as sub-contractors to Porath’s company. However, the companies had not performed the work. The checks totaled approximately $229,100 in 2000; $1.19 million in 2001; $760,000 in 2002; $50,000 in 2003; and $125,000 in 2004.
The Brooklyn companies cashed the checks and Gosek delivered the cash, less approximately five percent, back to Porath. Based upon these checks to the Brooklyn companies, Porath took false deductions on his company’s and his personal federal tax returns, allowing Porath to fraudulently reduce his taxable income. The indictment also charged Porath with filing a false federal tax return on or about Feb. 17, 2005, which substantially understated his income.
The bid-rigging charge carries a maximum penalty of 10 years in prison and a $1 million fine. The tax fraud conspiracy charge carries a maximum penalty of five years in prison and a $250,000 fine. The false subscription charge carries a maximum penalty of three years in prison and a $100,000 fine. The maximum fine for each of these charges may be increased to twice the gain derived from the crimes or twice the loss suffered by the victims of the crimes, if either of those amounts is greater than the statutory maximum fine.
Including Porath and Gosek, who pleaded guilty in November 2010, 15 individuals and six companies have been convicted of or pleaded guilty to charges arising out of this federal antitrust investigation of bid rigging, fraud, bribery and tax-related offenses relating to the award of contracts by the facilities operations department of NYPH.
The investigation was conducted by the Antitrust Division’s New York Field Office with the assistance of the FBI and the Internal Revenue Service - Criminal Investigation’s New York Field Office. The Office of International Affairs in the Justice Department’s Criminal Division also provided assistance. Anyone with information concerning bid rigging, bribery, tax offenses or fraud related at NYPH should contact the Antitrust Division’s New York Field Office of the at 212-335-8000, visit www.justice.gov/atr/contact/newcase.htm , or call the FBI’s New York Division at 212-384-1000.
New York Member of the Internet Piracy Group “IMAGiNE”<br /> Pleads Guilty to Copyright Infringement ConspiracyRead the Press Release
A New York man pleaded guilty today to conspiring to willfully reproduce and distribute tens of thousands of infringing copies of copyrighted works without permission, including infringing copies of movies before they were commercially released on DVD. The 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 Virginia Neil H. MacBride and Special Agent in Charge John P. Torres of U.S. Immigration and Customs Enforcement Homeland Security Investigations (ICE-HSI) in Washington, D.C.
Gregory A. Cherwonik, 53, of Canandaigua, N.Y., pleaded guilty to one count of conspiracy to commit criminal copyright infringement. The plea was entered before U.S. District Judge Arenda L. Wright Allen in the Eastern District of Virginia. Cherwonik faces up to five years in prison, a fine of $250,000 and three years of supervised release.
Cherwonik was indicted on April 18, 2012, along with three other leading members of the IMAGiNE Group, an organized online piracy group seeking to become the premier group to first release Internet copies of new movies only showing in theaters.
According to court documents, Cherwonik and his co-conspirators sought to illegally obtain and disseminate digital copies of copyrighted motion pictures showing in theaters. Cherwonik admitted that he helped to create a new website for the IMAGiNE Group hosted on a computer server located in France. Cherwonik ordered receivers and recording devices for the purpose of secretly using them in movie theaters to capture the audio sound tracks of copyrighted movies (referred to as “capping”). After obtaining, editing and filtering audio sound tracks and uploading them to servers utilized by the IMAGiNE Group, his co-conspirators used software to synchronize the audio file with an illegally obtained video file of a movie to create a completed movie file suitable for sharing over the Internet among members of the IMAGiNE Group and others. Mr. Cherwonik also admitted that the IMAGiNE Group’s conduct resulted in a readily provable and reasonably foreseeable infringement amount of more than $400,000.
A co-defendant, Sean Lovelady, pleaded guilty on May 8, 2012, to one count of conspiracy to commit criminal copyright infringement. Another co-defendant, Willie Lambert, pleaded guilty to the same charge on June 22, 2012. Charges remain pending against co-defendant Jeramiah Perkins. He is innocent until proven guilty beyond a reasonable doubt in a court of law.
The investigation of the case and the arrests were conducted by agents with ICE-HSI. Assistant U.S. Attorney Robert J. Krask of the Eastern District of Virginia and Senior Counsel John H. Zacharia of the Computer Crime and Intellectual Property Section (CCIPS) in the Justice Department’s Criminal Division are prosecuting the case. Significant assistance was provided by the CCIPS Cyber Crime Laboratory and the Office of International Affairs in the Justice Department’s Criminal Division.
This case is part of efforts being undertaken by the Department of Justice Task Force on Intellectual Property (IP Task Force) to stop the theft of intellectual property. Attorney General Eric Holder created the IP Task Force to combat the growing number of domestic and international intellectual property crimes, protect the health and safety of American consumers, and safeguard the nation’s economic security against those who seek to profit illegally from American creativity, innovation and hard work. The IP Task Force seeks to strengthen intellectual property rights protection through heightened criminal and civil enforcement, greater coordination among federal, state and local law enforcement partners, and increased focus on international enforcement efforts, including reinforcing relationships with key foreign partners and U.S. industry leaders. To learn more about the IP Task Force, go to www.justice.gov/dag/iptaskforce .
This investigation was supported by the HSI-led National Intellectual Property Rights Coordination Center (IPR Center) in Washington. The IPR Center is one of the U.S. government’s key weapons in the fight against criminal counterfeiting and piracy. As a task force, the IPR Center uses the expertise of its 20 member agencies to share information, develop initiatives, coordinate enforcement actions and conduct investigations related to IP theft. Through this strategic interagency partnership, the IPR Center protects the public's health and safety, the U.S. economy and our war fighters.
Justice Department Files Complaint Alleging Retaliation by Robertson Fire Protection District in MissouriRead the Press Release
The Justice Department today filed a lawsuit against the Robertson Fire Protection District (RFPD) in North Saint Louis County, Mo., for unfairly retaliating against a firefighter who provided testimony against the RFPD, in violation of Title VII of the Civil Rights Act of 1964, as amended. Title VII is a federal statute which prohibits retaliation for opposing instances of employment discrimination.
According to the complaint, filed in the U.S. District Court for the Eastern District of Missouri, Steve Wilson, who is a firefighter, was subjected to acts of retaliation by RFPD after he provided testimony in support of a Title VII case brought by the department in 2007 on behalf of two former African-American firefighters. Wilson's deposition testimony in 2008 described how RFPD Chief David Tilley asked Wilson to participate in discriminatory conduct and how Wilson refused to do so. The lawsuit alleges that RFPD retaliated against Wilson after he provided the testimony about the discriminatory conduct that occurred in RFPD.
“Employees who refuse to participate in discriminatory activity and provide testimony against their employers’ unlawful discrimination should be applauded, not punished,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “Title VII not only protects those who have suffered discrimination, it also protects those who oppose discrimination in the workplace. We will not tolerate public employers retaliating against their employees who participate in the investigations and lawsuits necessary to combat unlawful discrimination.”
The continued enforcement of Title VII has been a priority of the Justice Department’s Civil Rights Division. Additional information about the Civil Rights Division of the Justice Department is available on its website at www.usdoj.gov/crt/.
Related Materials:
Robertson Complaint
Justice Department Files Complaint Against Two Texas State Agencies for Pay DiscriminationRead the Press Release
The Justice Department today filed a lawsuit against the Texas Department of Agriculture (TDA) and Texas General Land Office (GLO) alleging that both state agencies are liable for discrimination against three female employees on the basis of sex, in violation of Title VII of the Civil Rights Act of 1964, as amended, which occurred at Texas Department of Rural Affairs (TDRA). Title VII is a federal statute which prohibits employment discrimination on the basis of sex, race, color, national origin or religion.
The lawsuit, filed in U.S. District Court in the Western District of Texas, alleges that the TDA and GLO, both of which assumed responsibilities of the now defunct TDRA, discriminated against three women in Program Specialist VII positions by paying them significantly less than their male colleagues for performing substantially the same work.
According to the complaint, the TDRA analyzed the salaries of all Program Specialist VIIs in the Disaster Recovery Division, found that the salaries of the women fell significantly short of those of men in comparable positions, and raised the women’s salaries. However, after the TDRA concluded that pay disparities existed between men and women, it did not raise women’s salaries to be comparable to the wages made by their male counterparts, nor did it compensate the women for the substantial amount of time their salaries were undervalued.
The suit also alleges that the women were subject to retaliation through the agency’s termination of their employment as an outgrowth of their claims of sex discrimination in compensation.
The complaint seeks declaratory and injunctive relief requiring the TDA and GLO to ensure that policies are in place to prevent their employees from being subjected to discrimination and retaliation, as well as monetary damages for the total time the women's salaries were undervalued, both after the raise and throughout the entire time of the women's employment in the Program Specialist VII position. The U.S. Equal Employment Opportunity Commission (EEOC) has also filed a lawsuit against the TDA and GLO alleging violations of the Equal Pay Act. The department will collaborate with the EEOC in seeking remedies.
“This lawsuit highlights the critical need for continued attention to equal pay issues in this country,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The wage gap between women and men persists, and the Civil Rights Division is committed to using all the tools available under this nation’s employment discrimination laws to ensure equal pay for equal work. We are pleased to collaborate with the EEOC in this critical enforcement effort.”
The continued enforcement of Title VII has been a priority of the Justice Department’s Civil Rights Division. Additional information about the Civil Rights Division of the Justice Department is available on its website at www.usdoj.gov/crt .
Related Materials:
U.S. v. Texas Department of Agriculture and Texas General Land Office Complaint
Tuesday 10 July 2012
Virginia Man Charged with Tax CrimesRead the Press Release
A Newport News, Va., federal grand jury has indicted Jeffrey Charles for conspiring with his daughter and son-in-law to defraud the United States, the Justice Department and the Internal Revenue Service (IRS) announced today. Charles is charged with one count of conspiracy, three counts of aiding and assisting in the preparation of false tax returns and one count of filing a false tax return. The court has not yet set a trial date.
According to the indictment, Charles conspired with his daughter and son-in-law to impair and impede the IRS in ascertaining, computing, assessing and collecting federal income taxes. The indictment also alleges that Charles aided and assisted in the preparation of three false tax returns in his daughter’s name for tax years 2000, 2001 and 2005, and attached false documents to each tax return. As alleged in the indictment, Charles also filed a false tax return in his own name for tax year 2006 in which he allegedly falsely reported earning $0.00 income.
An indictment merely alleges that a crime has been committed, and a defendant is presumed innocent until proven guilty beyond a reasonable doubt. If convicted, Charles faces a maximum of 17 years in federal prison and a maximum fine of $1.25 million.
The case is being investigated by IRS Criminal Investigation and is being prosecuted by Assistant U.S. Attorney Brian Samuels of the Eastern District of Virginia and Trial Attorney Justin K. Gelfand of the Justice Department’s Tax Division.
Two Individuals Sentenced to Prison for Participating in Kickback Scheme at New York Presbyterian HospitalRead the Press Release
WASHINGTON — Two individuals and three corporations were sentenced in the U.S. District Court in Manhattan by Judge George B. Daniels today to serve time in prison and to pay criminal fines for their participation in an eight-year conspiracy involving kickbacks in excess of $2.3 million to defraud New York Presbyterian Hospital (NYPH), the Department of Justice announced. The individuals and the corporations were convicted after a four-week trial in February 2012.
Michael Yaron, the owner of two of the companies convicted for their roles in the conspiracy—Cambridge Environmental & Construction Corp, doing business as National Environmental Associates (Cambridge/NEA) and Oxford Construction & Development Corp.—was sentenced to serve 60 months in jail, and to pay a $500,000 criminal fine. Cambridge/NEA and Oxford Construction were each sentenced to pay a $1 million criminal fine.
Moshe Buchnik, the president of an asbestos abatement company that also did business at NYPH, was sentenced to serve 48 months in jail, and to pay a $500,000 criminal fine for his role in the conspiracy.Artech Corp., a company owned by a relative of Santo Saglimbeni, a former vice president of facilities operations at NYPH, was also sentenced to pay a $1 million criminal fine.
Two additional charged co-conspirators, Saglimbeni and Emilio “Tony” Figueroa, a former director of facilities operations at NYPH, who were convicted along with Yaron, Buchnick, Cambridge/NEA, Oxford Construction and Artech, are scheduled to appear in court on July 31, 2012.
“The sentences imposed today are consistent with the seriousness of the crimes for which the individuals and companies were found guilty,” said Acting Assistant Attorney General Joseph Wayland in charge of the Department of Justice’s Antitrust Division. “Today’s sentences hold accountable the unlawful conduct of those involved in illegal kickback conspiracies.”The department said the scheme to defraud NYPH centered on Saglimbeni, who with the assistance of Figueroa, awarded asbestos abatement, air monitoring and general construction contracts to Yaron, Buchnik and their companies in return for more than $2.3 million in kickbacks. The kickbacks were funneled by Yaron to Saglimbeni through Artech Corp., a sham company Saglimbeni created in his mother’s name in order to conceal the kickbacks.
Yaron, Buchnik, Saglimbeni, Figueroa, Cambridge/NEA, Oxford Construction and Artech, were each convicted of conspiracy to defraud NYPH. Additionally, Yaron, his companies, Buchnik, Saglimbeni and Artech were also convicted of a substantive wire fraud violation.
The sentences announced today resulted from a federal antitrust investigation of bid rigging, fraud, bribery and tax-related offenses in the award of construction, maintenance and service contracts to the facilities operations department of NYPH. Including today’s sentencings, 14 individuals and six companies have been convicted of or pleaded guilty to charges arising out of this investigation.
The investigation was conducted by the Antitrust Division’s New York Field Office with the assistance of the FBI and the Internal Revenue Service - Criminal Investigation’s New York Field Office. Anyone with information concerning bid rigging, bribery, tax offenses, or fraud at NYPH should contact the Antitrust Division’s New York Field Office of the at 212-335-8000, visit www.justice.gov/atr/contact/newcase.htm or the FBI’s New York Division at 212-384-1000.
Monday 9 July 2012
Telecommunications Firm to Pay Us $1 Million<br /> <br /> to Settle Alleged Violations of the Trade Agreements ActRead the Press Release
ADC Telecommunications Inc. will pay the United States $1 million to resolve allegations that the company submitted false claims to federal agencies when it sold telecommunications goods manufactured in countries prohibited by the Trade Agreements Act (TAA).
From October 2005 through December 2008, ADC manufactured and sold telecommunications hardware, such as communication modems, extender modules and shelf adapters to various federal agencies through its General Services Administration (GSA) Multiple Award Schedule contract. This settlement resolves allegations disclosed by the company that it knowingly manufactured and sold products from countries such as China that do not have reciprocal trade agreements with the United States and are not on the list of designated countries. The client government agencies included a number of federal agencies, including the Departments of Defense, Homeland Security and Interior.
Compliance with the TAA is required by GSA Multiple Award Schedule contracts. Goods purchased under these contracts must be manufactured in one of a list of designated countries deemed to trade fairly with the United States.
“Protecting the federal procurement process is central to the mission of the Department of Justice,” said Stuart Delery, Acting Assistant Attorney General for the Department of Justice’s Civil Division. “It is incumbent upon contractors that supply products to federal agencies to abide by the legal requirements designed to protect U.S. trade interests.”
“This settlement demonstrates this office’s commitment to ensure that products sold to the government are made in countries that respect and adhere to our nation’s trade policies,” said Ronald C. Machen Jr., the U.S. Attorney for the District of Columbia. “We expect all companies who do business with the United States to understand and comply with the laws that govern their transactions.”
GSA Inspector General Brian Miller stated “We appreciate ADC's cooperation in the OIG’s investigation of this matter.”
This matter was jointly handled by the GSA Office of the Inspector General, the Justice Department’s Civil Division and the U.S. Attorney’s Office for the District of Columbia.
Justice Department Settles Lawsuit Against Pennsylvania Department of Corrections Regarding Alleged Violation of Us Army Reservist’s Reemployment RightsRead the Press Release
The Justice Department announced today that it has reached a settlement in its lawsuit against the Pennsylvania Department of Corrections (PDOC). The settlement, filed with the U.S. District Court for the Middle District of Pennsylvania, resolves allegations that PDOC violated the reemployment rights of U.S. Army Reservist David C. Fyock under the Uniformed Services Employment and Reemployment Rights Act (USERRA).
The department’s complaint, which was filed on Oct. 27, 2011, alleges PDOC violated USERRA by failing to retroactively promote Fyock from a corrections officer 1 to a corrections officer 2 position at the State Correctional Institution Mercer in Mercer, Pa., based on his successful performance on a make-up promotional examination after returning from a military deployment. According to the complaint, Fyock’s score on the make-up examination was higher than the score of any person promoted to any of the 13 vacant corrections officer 2 positions filled based on the May 2007 promotional test he missed.
Under the terms of the settlement, Fyock will receive a promotion to corrections officer 2 (sergeant), as well as back pay and other benefits.
Subject to certain conditions, USERRA requires employers to promptly reemploy returning service members in the positions they would have held had their employment not been interrupted by military service, or in positions of like seniority, status and pay.
“The Civil Rights Division is committed to protecting the reemployment rights of the men and women who serve our country in uniform,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “No service member should have to forego an opportunity for advancement in his or her civilian career due to military service.”
“This office strongly supports the rights of service members and the objective of the statute which is to help veterans reclaim their rightful positions in the workforce after they complete their military service,” said Peter J. Smith, U.S. Attorney for the Middle District of Pennsylvania.
This matter was litigated by Assistant U.S. Attorneys Melissa Swauger and Timothy Judge of the Civil Division of the U.S. Attorney’s Office for the Middle District of Pennsylvania in collaboration with attorneys from the Justice Department’s Civil Rights Division. The case stems from a referral from the U.S. Labor Department's Veterans' Employment and Training Service.
The Justice Department's Civil Rights Division has given a high priority to the enforcement of service members' rights under USERRA. Additional information about USERRA can be found at www.servicemembers.gov.
Former Civilian Contractor Sentenced to 24 Months in Prison<br /> for Role in Scheme to Steal and Sell Military Equipment in IraqRead the Press Release
A former U.S. civilian contractor was sentenced today to 24 months in prison for conspiring to steal military generators in Iraq and selling them on the black market, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney Thomas G. Walker for the Eastern District of North Carolina.
David John Welch, 36, of Hope Mills, N.C., was sentenced by U.S. District Judge W. Earl Britt in the Eastern District of North Carolina. Welch was also sentenced to three years of supervised release following his prison term and was ordered to pay $160,000 in restitution to the Department of Defense. Welch pleaded guilty on April 2, 2012, to a criminal information charging him with conspiracy to steal property under the control of a government contractor.
According to court documents and information presented at his plea hearing, Welch was the operations and maintenance manager of a U.S. government contractor on Victory Base Complex in Baghdad. In this capacity, Welch had the ability to influence the distribution and movement of military equipment as well as U.S. government equipment. In addition, Welch was in charge of overseeing the movement of generators from the compound to the Defense Reutilization & Marketing Office (DRMO). In October 2011, Welch and a co-conspirator entered into a scheme to steal and later sell approximately 38 generators on the black market in Iraq to unknown co-conspirators by diverting these generators from the DRMO to an undisclosed location off-base in Iraq. After the generators were stolen from the compound, Welch’s co-conspirator provided him with four stacks of $100 bills, totaling approximately $38,600.
This case is being prosecuted by Special Trial Attorney Mark Grider of the Criminal Division’s Fraud Section, on detail from Special Inspector General for Iraq Reconstruction (SIGIR), with assistance from Assistant U.S. Attorney Banumathi Rangarajan of the U.S. Attorney’s Office for the Eastern District of North Carolina. The case is being investigated by the FBI, SIGIR and the Major Procurement Fraud Unit of the U.S. Army Criminal Investigation Command.
Five Individuals Charged in Connection with Death of a Customs and Border Protection Border Patrol Agent, <br /> $1 Million FBI Reward AnnouncedRead the Press Release
An indictment charging five individuals involved in the death of U.S. Border Patrol Agent Brian Terry was unsealed today in Tucson, and a reward of up to $1 million from the FBI for information leading to the arrest of four fugitives, was announced by Department of Justice officials.
According to the indictment, Manuel Osorio-Arellanes, Jesus Rosario Favela-Astorga, Ivan Soto-Barraza, Heraclio Osorio-Arellanes and Lionel Portillo-Meza are charged with crimes including first degree murder, second degree murder, conspiracy to interfere with commerce by robbery, attempted interference with commerce by robbery, use and carrying a firearm during a crime of violence, assault on a federal officer and possession of a firearm by a prohibited person. A sixth defendant, Rito Osorio-Arellanes, is charged only with conspiracy to interfere with commerce by robbery.
The 11-count third superseding indictment, which was handed up by a federal grand jury in the District of Arizona on Nov. 7, 2011, alleges that on Dec. 14, 2010, five of the defendants (Manuel Osorio-Arellanes, Jesus Rosario Favela-Astorga, Ivan Soto-Barraza, Heraclio Osorio-Arellanes and Lionel Portillo-Meza) engaged in a firefight with Border Patrol agents. During the exchange of gunfire, Agent Terry was shot and killed. The indictment alleges that the defendants had illegally entered the United States from Mexico for the purpose of robbing drug traffickers of their contraband. In addition to the murder of Agent Terry, the indictment also alleges that the five defendants assaulted Border Patrol Agents William Castano, Gabriel Fragoza and Timothy Keller, who were with Agent Terry during the firefight.
“Agent Terry served his country honorably and made the ultimate sacrifice in trying to protect it from harm, and we will stop at nothing to bring those responsible for his murder to justice,” said Attorney General Eric Holder. “This investigation has previously resulted in one defendant being charged with Agent Terry’s murder and taken into custody, and today’s announcement reflects the department’s unrelenting commitment to finding and arresting the other individuals responsible for this horrific tragedy so that Agent Terry’s family, friends and fellow law enforcement agents receive the justice they deserve.”
U.S. Attorney for the Southern District of California Laura E. Duffy said, “ Agent Terry died in the line of duty while protecting his country. But he was more than a federal agent – he was a son, a brother, a co-worker and a friend to many. The indictment unsealed today reflects the progress our dedicated law enforcement team has made piecing together this complex murder case. But there is more work to be done and we will not rest until we bring justice to the family of Brian Terry.”
“U.S. Border Patrol Agent Brian Terry made the ultimate sacrifice in December of 2010, while protecting our border,” stated James L. Turgal Jr., FBI Special Agent in Charge, Phoenix Division. “Today’s announcement is an important step forward in the pursuit of justice for Border Patrol Agent Terry and his family. It is our hope that the publicity surrounding this case will lead to information concerning the whereabouts of the remaining four fugitives. The FBI and our law enforcement partners will continue to pursue those individuals responsible for the murder of Border Patrol Agent Brian Terry.”
Manuel Osorio-Arellanes has been in custody since his arrest the night of the shooting. Rito Osorio-Arellanes has been in custody since Dec. 12, 2010, when he was arrested by Border Patrol agents on immigration charges. The indictment is being unsealed today in order to seek the public’s assistance in locating the fugitive defendants.
This case is being prosecuted in federal court in Tucson by attorneys from the Southern District of California, Special Attorneys Todd W. Robinson, David D. Leshner, and Fred A. Sheppard. The U.S. Attorney’s Office for the District of Arizona is recused. This case is being investigated by the FBI.
An indictment is a formal charging document and defendants are presumed innocent until the government meets its burden in court of proving guilt beyond a reasonable doubt.
Anyone with information concerning the whereabouts of the fugitives should contact the FBI's Phoenix field office at (623) 466-1999. You may also contact your local FBI office or the nearest American Embassy or Consulate.
Thursday 5 July 2012
CEO of Axius Inc. and Finance Professional Indicted for Alleged Roles in Scheme to Bribe Stock Brokers and Manipulate Stock PricesRead the Press Release
WASHINGTON – The chief executive officer (CEO) of Axius Inc., a Nevada corporation, and a finance professional were indicted today on multiple charges for their alleged roles in a scheme to bribe stock brokers and manipulate the share price of Axius stock, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney Loretta E. Lynch for the Eastern District of New York.
Roland Kaufmann, a Swiss citizen and the CEO of Axius, and Jean-Pierre Neuhaus, a Swiss citizen and finance professional, were each charged in an indictment filed today in the Eastern District of New York with one count of conspiracy to commit securities fraud and to violate the Travel Act, one count of securities fraud, one count of wire fraud, one count of violating the Travel Act, one count of conspiracy to commit money laundering and one count of money laundering. According to court documents, Axius is incorporated in Nevada and its principal offices are in Dubai, United Arab Emirates. Axius is a “holding company and business incubator” that develops other businesses.
“As CEO of Axius, Mr. Kaufmann allegedly conspired with Mr. Neuhaus to fraudulently manipulate the value of his company’s stock,” said Assistant Attorney General Breuer. “According to today’s indictment, he attempted to bribe stock brokers into artificially propping up the value of Axius stock. With our partners in the U.S. Attorneys’ Offices, the Criminal Division’s Fraud Section is pursuing a nationwide effort to investigate and prosecute fraudulent conduct in our securities markets.”
“Rather than rely on the market to set the true value of Axius’ stock, the defendants allegedly sought to buy the best price possible through bribery and deception,” said U.S. Attorney Lynch. “Their scheme stood to enrich themselves at the expense of the investing public. We will vigorously investigate and prosecute any such corruption in the securities markets.”
“Conspiring to inflate the price of Axius shares artificially was likely to result in unjust enrichment for the defendants and undeserved losses for investors,” said Assistant Director-in-Charge Janice K. Fedarcyk of the FBI in New York. “Market-driven fluctuations in share prices are risks investors have to accept. Illegal manipulations become the subject of FBI investigations.”
The indictment alleges that Kaufmann, 60, agreed with Neuhaus, 55, to defraud investors in Axius common stock by bribing stock brokers and manipulating the share price. As part of the scheme, they enlisted the assistance of an individual they believed to have access to a group of corrupt stock brokers; this individual was in fact an undercover law enforcement agent. Kaufmann and Neuhaus believed that the undercover agent controlled a network of stockbrokers in the United States with discretionary authority to trade stocks on behalf of their clients.
The indictment alleges that Kaufmann and Neuhaus instructed the undercover agent to direct brokers to purchase Axius shares that were owned or controlled by Kaufmann in return for a secret kickback of approximately 26 to 28 percent of the share price. Kaufmann and Neuhaus allegedly instructed the undercover agent as to the price the brokers should pay for the stock, and Kaufmann specifically instructed the undercover agent that the brokers would have to pay gradually higher prices for the shares they were buying. The indictment alleges that Kaufmann and Neuhaus directed the undercover agent that the brokers were to refrain from selling the Axius shares they purchased on behalf of their clients for a one-year period. By preventing sales of Axius stock, Kaufmann and Neuhaus allegedly intended to maintain the fraudulently inflated share price for Axius stock.
Kaufmann and Neuhaus were originally charged in a criminal complaint filed in the Eastern District of New York on March 8, 2012. They were arrested on March 8, 2012. No investors were actually defrauded in the undercover operation.
In a related action, the Securities and Exchange Commission (SEC) today filed a civil enforcement action against Kaufmann and Neuhaus in the Eastern District of New York. The department thanks the SEC for its cooperation in this matter.
This case is being prosecuted by Trial Attorney Justin Goodyear of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Shannon Jones of the Eastern District of New York. The case was investigated by the FBI and the Internal Revenue Service.
This prosecution is part of efforts underway by President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. For more information about the task force visit: www.stopfraud.gov.
Alabama Woman Pleads Guilty in Stolen Identity<br /> Tax Refund Fraud CaseRead the Press Release
Jacqueline Slaton pleaded guilty today in the Middle District of Alabama to one count of filing a false tax return and one count of aggravated identity theft, the Department of Justice and the Internal Revenue Service (IRS) announced. Slaton was indicted in April 2012.
According to her plea agreement, between December 2011 and March 2012, Slaton filed at least 102 fraudulent federal and state income tax returns using stolen identities, claiming a total of $154,904 in fraudulent income tax refunds. Slaton had the tax refunds directed to prepaid debit cards and had the cards mailed to various addresses on a U.S. carrier’s route. A postal employee agreed to collect the prepaid debit cards for a fee.
Sentencing has not yet been scheduled. Slaton faces a mandatory minimum of two years in prison, and a maximum potential sentence of seven years in prison, up to three years of supervised release, mandatory restitution and a fine of up to $500,000 or twice the loss caused by her offenses.
Kathryn Keneally, Assistant Attorney General for the Justice Department’s Tax Division, thanked special agents of IRS - Criminal Investigation, who investigated the case, and Tax Division Trial Attorneys Jason H. Poole and Michael Boteler and Assistant United States Attorney Jared Morris, who prosecuted the case.
Additional information about the Tax Division and its enforcement efforts may be found at www.justice.gov/tax.
Tuesday 3 July 2012
Louis Dreyfus Energy Services Pays $4 Million to Resolve Allegations That It Violated the False Claims ActRead the Press Release
Louis Dreyfus Energy Services has paid the United States $4,084,000 to settle allegations that it violated the False Claims Act by failing to pay money owed on natural gas acquired from the Department of the Interior, the Justice Department announced today. Louis Dreyfus, which is based in Connecticut, is an energy company that is involved in merchandising, transportation, trading and storage of natural gas.
The settlement agreement resolves contentions by the United States that from December 2004 to March 2008, Louis Dreyfus Energy Services made false claims or misleading statements to the Department of the Interior involving contracts to buy natural gas produced from federal oil and gas leases in the Gulf of Mexico. Starting in 2004, Louis Dreyfus agreed to pay the Interior Department for natural gas based on a price associated with the delivery of the gas at a fixed point along a natural gas pipeline. After its contracts with the Interior Department were executed, the company requested and received a discount in the price it would pay the Interior Department for the natural gas obtained under the contracts. The United States contends that this price discount applied only when there was a complete or near-complete constraint in the natural gas pipeline such that Louis Dreyfus was unable to transport natural gas along the pipeline. However, the energy services company claimed and obtained the price discounts even on days when it was able to ship natural gas along the pipeline. Thus, the United States contends that Louis Dreyfus was not entitled to the price discounts that it sought and received from the Department of the Interior.
“Companies that deal with the United States have to live up to their commitments, whether they relate to the use of the nation’s natural resources or to other government programs or benefits,” said Stuart F. Delery, Acting Assistant Attorney General for the Justice Department’s Civil Division. “The American taxpayers will not tolerate those that claim price discounts from the United States to which they are not entitled.”
“Oil and natural gas companies must understand that using false or misleading claims to get a better price is unfair and unlawful. For companies that make such claims, there are significant consequences,” said John Walsh, U.S. Attorney for the District of Colorado.
“This settlement is a message to industry and the public that federal government agencies, working together, are focused on the promise that the American taxpayers will get their fair share of all monies owed from public resources,” said Mary L. Kendall, Acting Inspector General of the Department of the Interior.
“Energy companies have a responsibility to respect the public trust in their efforts to help fuel this nation’s energy needs,” said Paul Mussenden, the Department of the Interior’s Deputy Assistant Secretary for Natural Resources Revenue Management. “It is imperative they honor that trust and pay the appropriate revenues that are due to American taxpayers for these precious natural resources.” Mussenden added that “ONRR will remain diligent in its efforts to collect every dollar due to the public and the U.S. Government.”
In addition to resolving the company’s False Claims Act liability, the settlement today also resolves certain administrative claims between the Interior Department’s Office of Natural Resources Revenue and Louis Dreyfus.
The investigation and settlement of this matter were jointly handled by the U.S. Attorney for the District of Colorado, the Justice Department’s Civil Division, the Office of Natural Resources Revenue, the Department of the Interior’s Office of the Solicitor and the Energy Investigations Unit of the Department of the Interior’s Office of Inspector General. The claims settled by this agreement are allegations only. There has been no determination of liability.
Justice Department Files Lawsuit Against Corpus Christi, Texas, Police Department for Sex DiscriminationRead the Press Release
WASHINGTON – The Justice Department today filed a lawsuit against the city of Corpus Christi, Texas, alleging that the city’s police department engaged in a pattern or practice of employment discrimination against women in violation of Title VII of the Civil Rights Act of 1964. The lawsuit challenges the police department’s use of a physical ability test for the hiring of entry-level police officers. According to the complaint, the physical test used by the city between 2005 and 2011 had the effect of excluding qualified women from consideration for hire as entry-level police officers and did not screen candidates for job-related skills.
Title VII prohibits employment practices that result in a disparate impact on various bases, including sex, unless the employer can prove that such practices really test for what the job requires. The complaint alleges that the challenged physical ability test does not meet this standard and, thus, qualified women have been unnecessarily kept out of entry-level police officer jobs.
“This complaint demonstrates that employment practices that unnecessarily exclude qualified candidates on account of sex are unacceptable,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The Justice Department is looking forward to working with the city to resolve this matter in a way that eliminates the use of the unlawful physical ability test and gives women who were screened out of the process an opportunity to become Corpus Christi police officers.”
In the lawsuit, the Justice Department seeks a court order that would require the city to stop using the challenged physical ability test, develop hiring procedures that comply with Title VII and provide relief that makes victims whole, including offers of hire, retroactive seniority and back pay to individual women who have been harmed as a result of the city’s use of the test.
Additional information about Title VII and other federal employment laws is available on the Civil Rights Division’s website at www.justice.gov/crt/.
Department of Justice Will Not Challenge Proposed<br /> Collaboration of Nuclear Power Plant OperatorsRead the Press Release
WASHINGTON – The Department of Justice today announced that it will not challenge a proposal by seven nuclear power plant operators to share resources and coordinate best practices and other operational activities through a proposed venture to be named the STARS Alliance LLC. The members of the proposed STARS Alliance each operate single nuclear electric generation plants of a similar design – pressurized water reactors – and vintage.
The department’s position was stated in a business review letter to counsel for the STARS Alliance, from Joseph Wayland, Acting Assistant Attorney General in charge of the Department of Justice’s Antitrust Division.STARS members propose to share best practices and resources such as personnel, parts and equipment, as well as coordinate contingency planning, including coordinated responses to new Nuclear Regulatory Commission requirements adopted in the aftermath of the nuclear disaster in Fukushima, Japan. None of the proposed activities involve the procurement of goods and services or the sale or purchase of electric power. Membership and participation in all of the activities of the proposed STARS joint venture is voluntary.
In issuing the letter, Acting Assistant Attorney General Wayland stated, “To the extent that the proposed cooperative activities increase efficiencies that result in lower costs, increased output or increased safety, the proposed conduct could have a procompetitive effect.”
The department noted that the cooperative activities STARS proposes to undertake should not have any adverse effect on competition. STARS members would represent 13 of the 69 operating commercial nuclear pressurized water reactors in the United States and 13 of the 104 operating commercial nuclear reactors in the United States. The STARS members, for the most part, are in separate geographic areas and do not compete against each other for the sale of electricity. In the two instances where members both have reactors in the same electricity transmission organization, the members’ nuclear units are not likely to have an impact on price. The members will be prohibited from sharing competitively-sensitive pricing or marketing information.
The STARS Alliance participants are: Union Electric Co., with its Callaway plant in Missouri; Arizona Public Service Co., with its Palo Verde plant in Arizona; Luminant Generation Company LLC, with its Comanche Peak plant in Texas; Pacific Gas and Electric Co., with its Diablo Canyon plant in California; Southern California Edison Co., with its San Onofre plant in California; STP Nuclear Operating Co., with its STP plant in Texas; and Wolf Creek Nuclear Operating Co., with its Wolf Creek plant in Kansas.
Under the department’s business review procedure, an organization may submit a proposed action to the Antitrust Division and receive a statement as to whether the division currently intends to challenge the action under the antitrust laws based on the information provided. The department reserves the right to challenge the proposed action under the antitrust laws if it produces anticompetitive effects.
A file containing the business review request and the department’s response may be examined in the Antitrust Documents Group of the Antitrust Division, U.S. Department of Justice, 450 Fifth Street, N.W., Suite 1010, Washington, D.C. 20530. After a 30-day waiting period, the documents supporting the business review will be added to the file, unless a basis for their exclusion for reasons of confidentiality has been established under the Business Review Procedure.
Alabama Woman Pleads Guilty to Tax FraudRead the Press Release
Wanda Davis pleaded guilty in the Middle District of Alabama today to one count of filing a false tax return, the Justice Department and the Internal Revenue Service (IRS) announced.
According to court documents, from 2007 to 2011, Davis prepared false tax returns for clients while working at Davis Fast Tax and Davis Tax Service in Montgomery, Ala. Davis included false and inflated deductions as well as fictitious businesses on her clients’ tax returns resulting in inflated refunds to which the client was not entitled. By her actions, Davis sought over $200,000 in false tax refunds.
Sentencing has not yet been scheduled. Davis faces a maximum potential sentence of three years in prison, up to three years of supervised release, mandatory restitution and a fine of up to $250,000 or twice the loss caused by her offenses.
This case was investigated by special agents of IRS – Criminal Investigation. Trial Attorneys Michael Boteler and Jason Poole of the Justice Department’s Tax Division are prosecuting the case with the assistance of the U.S. Attorney’s Office in the Middle District of Alabama.
Additional information about the Tax Division and its enforcement efforts may be found at www.justice.gov/tax.
Monday 2 July 2012
Two Former Soldiers Sentenced for Their Participation in Fraud Scheme to Obtain $244,000 in Military Recruiting Referral BonusesRead the Press Release
WASHINGTON – Christopher Castro, 31, of San Antonio, Texas, and Ernest Gonzales, 51, also of San Antonio, were sentenced for their participation in a conspiracy to obtain approximately $244,000 in fraudulent recruiting referral bonuses from various U.S. military components and their contractor, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division.
On June 29, 2012, Chief U.S. District Judge Fred Biery sentenced Christopher Castro to one year and a day in prison, to be followed by three years supervised release. Ernest Gonzales was sentenced on June 29, 2012, by Chief Judge Biery to five years probation. Chief Judge Biery also ordered Castro and Gonzales to pay $244,000 in restitution, to be paid jointly and severally.
Castro pleaded guilty to conspiracy to commit wire fraud on Nov. 3, 2011. Gonzales pleaded guilty to conspiracy to commit wire fraud on Jan. 28, 2010.
According to court documents filed in U.S. District Court for the Western District of Texas, Castro served at different times in the Army National Guard and the Army Reserves from February 2007 through February 2008. Castro also served as a civilian contract recruiter from June 2007 through October 2009. Gonzales has served at different times in the Army National Guard and the Army Reserves from June 2005 to present.
According to court documents, between 2005 and 2008, the U.S. Army, the U.S. Army Reserves and the National Guard Bureau entered into contracts with Document and Packaging Broker Inc. to administer recruiting bonus programs designed to offer monetary incentives to soldiers who referred others to join the U.S. military. In addition, the Army managed its own recruiting bonus programs, which offered bonuses to soldiers who referred other individuals to join the Army or the Army Reserves. To participate in the recruiting bonus programs, an eligible soldier needed to establish an online Recruiting Assistant (RA) or Sponsor account. Through these recruiting programs, a participating soldier could receive up to $2,000 in bonus payments for every person he referred to serve in the U.S. military.
Castro and Gonzales admitted that they participated in a fraud scheme whereby active duty and civilian contract recruiters provided RAs and Sponsors with the names and Social Security numbers of “walk-in” soldiers—or persons who decided to join the military without being referred by anyone. Using this information, the RAs and Sponsors claimed credit for referring these potential soldiers to join the military, when in fact they did not refer them. As part of the fraud scheme, the RAs and Sponsors split the bonus payments with the recruiters and others who provided the potential soldiers’ personal identifying information.
In total, Castro, Gonzales and their co-conspirators received at least $244,000 in fraudulent recruiting referral bonuses according to court documents. Castro personally received $26,000 in fraudulent recruiting referral bonuses using RA accounts in his name and an RA account in his relative’s name. In his capacity as a civilian contract recruiter, Castro admitted that he also sold the names and Social Security numbers of potential soldiers to a co-conspirator, in return for a portion of the fraudulent recruiting referral bonuses obtained by Aves and others. Gonzales personally received $17,000 in fraudulent recruiting referral bonuses using his RA account and permitted a co-conspirator to receive an additional $18,000 in fraudulent recruiting referral bonuses through Gonzales’s RA account.
This case arose from an investigation concerning allegations that former and current soldiers and military and civilian contract recruiters in the San Antonio area engaged in a wide-ranging scheme to obtain fraudulent recruiting referral bonuses. To date, eight individuals have been charged, six of whom have pleaded guilty. The investigation is ongoing. The individuals who have pleaded not guilty are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
The case is being prosecuted by Trial Attorneys Edward J. Loya Jr. and Brian A. Lichter of the Criminal Division’s Public Integrity Section. The case is being investigated by agents from the San Antonio Fraud Resident Agency of the Major Procurement Fraud Unit, U.S. Army CID.
GlaxoSmithKline to Plead Guilty and Pay $3 Billion to Resolve Fraud Allegations and Failure to Report Safety DataRead the Press Release
Global health care giant GlaxoSmithKline LLC (GSK) agreed to plead guilty and to pay $3 billion to resolve its criminal and civil liability arising from the company’s unlawful promotion of certain prescription drugs, its failure to report certain safety data, and its civil liability for alleged false price reporting practices, the Justice Department announced today. The resolution is the largest health care fraud settlement in U.S. history and the largest payment ever by a drug company.
GSK agreed to plead guilty to a three-count criminal information, including two counts of introducing misbranded drugs, Paxil and Wellbutrin, into interstate commerce and one count of failing to report safety data about the drug Avandia to the Food and Drug Administration (FDA). Under the terms of the plea agreement, GSK will pay a total of $1 billion, including a criminal fine of $956,814,400 and forfeiture in the amount of $43,185,600. The criminal plea agreement also includes certain non-monetary compliance commitments and certifications by GSK’s U.S. president and board of directors. GSK’s guilty plea and sentence is not final until accepted by the U.S. District Court.
GSK will also pay $2 billion to resolve its civil liabilities with the federal government under the False Claims Act, as well as the states. The civil settlement resolves claims relating to Paxil, Wellbutrin and Avandia, as well as additional drugs, and also resolves pricing fraud allegations.
“Today’s multi-billion dollar settlement is unprecedented in both size and scope. It underscores the Administration’s firm commitment to protecting the American people and holding accountable those who commit health care fraud,” said James M. Cole, Deputy Attorney General. “At every level, we are determined to stop practices that jeopardize patients’ health, harm taxpayers, and violate the public trust – and this historic action is a clear warning to any company that chooses to break the law.”
“Today’s historic settlement is a major milestone in our efforts to stamp out health care fraud,” said Bill Corr, Deputy Secretary of the Department of Health and Human Services (HHS). “For a long time, our health care system had been a target for cheaters who thought they could make an easy profit at the expense of public safety, taxpayers, and the millions of Americans who depend on programs like Medicare and Medicaid. But thanks to strong enforcement actions like those we have announced today, that equation is rapidly changing.”
This resolution marks the culmination of an extensive investigation by special agents from HHS-OIG, FDA and FBI, along with law enforcement partners across the federal government. Moving forward, GSK will be subject to stringent requirements under its corporate integrity agreement with HHS-OIG; this agreement is designed to increase accountability and transparency and prevent future fraud and abuse. Effective law enforcement partnerships and fraud prevention are hallmarks of the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which fosters government collaboration to fight fraud.
Criminal Plea Agreement
Under the provisions of the Food, Drug and Cosmetic Act, a company in its application to the FDA must specify each intended use of a drug. After the FDA approves the product as safe and effective for a specified use, a company’s promotional activities must be limited to the intended uses that FDA approved. In fact, promotion by the manufacturer for other uses – known as “off-label uses” – renders the product “misbranded.”
Paxil: In the criminal information, the government alleges that, from April 1998 to August 2003, GSK unlawfully promoted Paxil for treating depression in patients under age 18, even though the FDA has never approved it for pediatric use. The United States alleges that, among other things, GSK participated in preparing, publishing and distributing a misleading medical journal article that misreported that a clinical trial of Paxil demonstrated efficacy in the treatment of depression in patients under age 18, when the study failed to demonstrate efficacy. At the same time, the United States alleges, GSK did not make available data from two other studies in which Paxil also failed to demonstrate efficacy in treating depression in patients under 18. The United States further alleges that GSK sponsored dinner programs, lunch programs, spa programs and similar activities to promote the use of Paxil in children and adolescents. GSK paid a speaker to talk to an audience of doctors and paid for the meal or spa treatment for the doctors who attended. Since 2004, Paxil, like other antidepressants, included on its label a “black box warning” stating that antidepressants may increase the risk of suicidal thinking and behavior in short-term studies in patients under age 18. GSK agreed to plead guilty to misbranding Paxil in that its labeling was false and misleading regarding the use of Paxil for patients under 18.
Wellbutrin: The United States also alleges that, from January 1999 to December 2003, GSK promoted Wellbutrin, approved at that time only for Major Depressive Disorder, for weight loss, the treatment of sexual dysfunction, substance addictions and Attention Deficit Hyperactivity Disorder, among other off-label uses. The United States contends that GSK paid millions of dollars to doctors to speak at and attend meetings, sometimes at lavish resorts, at which the off-label uses of Wellbutrin were routinely promoted and also used sales representatives, sham advisory boards, and supposedly independent Continuing Medical Education (CME) programs to promote Wllbutrin for these unapproved uses. GSK has agreed to plead guilty to misbranding Wellbutrin in that its labeling did not bear adequate directions for these off-label uses. For the Paxil and Wellbutrin misbranding offenses, GSK has agreed to pay a criminal fine and forfeiture of $757,387,200.
Avandia: The United States alleges that, between 2001 and 2007, GSK failed to include certain safety data about Avandia, a diabetes drug, in reports to the FDA that are meant to allow the FDA to determine if a drug continues to be safe for its approved indications and to spot drug safety trends. The missing information included data regarding certain post-marketing studies, as well as data regarding two studies undertaken in response to European regulators’ concerns about the cardiovascular safety of Avandia. Since 2007, the FDA has added two black box warnings to the Avandia label to alert physicians about the potential increased risk of (1) congestive heart failure, and (2) myocardial infarction (heart attack). GSK has agreed to plead guilty to failing to report data to the FDA and has agreed to pay a criminal fine in the amount of $242,612,800 for its unlawful conduct concerning Avandia.
“This case demonstrates our continuing commitment to ensuring that the messages provided by drug manufacturers to physicians and patients are true and accurate and that decisions as to what drugs are prescribed to sick patients are based on best medical judgments, not false and misleading claims or improper financial inducements,” said Carmen Ortiz, U.S. Attorney for the District of Massachusetts.
“Patients rely on their physicians to prescribe the drugs they need,” said John Walsh, U.S. Attorney for Colorado. “The pharmaceutical industries’ drive for profits can distort the information provided to physicians concerning drugs. This case will help to ensure that your physician will make prescribing decisions based on good science and not on misinformation, money or favors provided by the pharmaceutical industry.”
Civil Settlement Agreement
As part of this global resolution, GSK has agreed to resolve its civil liability for the following alleged conduct: (1) promoting the drugs Paxil, Wellbutrin, Advair, Lamictal and Zofran for off-label, non-covered uses and paying kickbacks to physicians to prescribe those drugs as well as the drugs Imitrex, Lotronex, Flovent and Valtrex; (2) making false and misleading statements concerning the safety of Avandia; and (3) reporting false best prices and underpaying rebates owed under the Medicaid Drug Rebate Program.
Off-Label Promotion and Kickbacks: The civil settlement resolves claims set forth in a complaint filed by the United States alleging that, in addition to promoting the drugs Paxil and Wellbutrin for unapproved, non-covered uses, GSK also promoted its asthma drug, Advair, for first-line therapy for mild asthma patients even though it was not approvedor medically appropriate under these circumstances. GSK also promoted Advair for chronic obstructive pulmonary disease with misleading claims as to the relevant treatment guidelines. The civil settlement also resolves allegations that GSK promoted Lamictal, an anti-epileptic medication, for off-label, non-covered psychiatric uses, neuropathic pain and pain management. It further resolves allegations that GSK promoted certain forms of Zofran, approved only for post-operative nausea, for the treatment of morning sickness in pregnant women. It also includes allegations that GSK paid kickbacks to health care professionals to induce them to promote and prescribe these drugs as well as the drugs Imitrex, Lotronex, Flovent and Valtrex. The United States alleges that this conduct caused false claims to be submitted to federal health care programs.
GSK has agreed to pay $1.043 billion relating to false claims arising from this alleged conduct. The federal share of this settlement is $832 million and the state share is $210 million.
This off-label civil settlement resolves four lawsuits pending in federal court in the District of Massachusetts under the qui tam, or whistleblower, provisions of the False Claims Act, which allow private citizens to bring civil actions on behalf of the United States and share in any recovery.
Avandia: In its civil settlement agreement, the United States alleges that GSK promoted Avandia to physicians and other health care providers with false and misleading representations about Avandia’s safety profile, causing false claims to be submitted to federal health care programs. Specifically, the United States alleges that GSK stated that Avandia had a positive cholesterol profile despite having no well-controlled studies to support that message. The United States also alleges that the company sponsored programs suggesting cardiovascular benefits from Avandia therapy despite warnings on the FDA-approved label regarding cardiovascular risks. GSK has agreed to pay $657 million relating to false claims arising from misrepresentations about Avandia. The federal share of this settlement is $508 million and the state share is $149 million.
Price Reporting: GSK is also resolving allegations that, between 1994 and 2003, GSK and its corporate predecessors reported false drug prices, which resulted in GSK’s underpaying rebates owed under theMedicaid Drug Rebate Program. By law, GSK was required to report the lowest, or “best” price that it charged its customers and to pay quarterly rebates to the states based on those reported prices. When drugs are sold to purchasers in contingent arrangements known as “bundles,” the discounts offered for the bundled drugs must be reallocated across all products in the bundle proportionate to the dollar value of the units sold. The United States alleges that GSK had bundled sales arrangements that included steep discounts known as “nominal” pricing and yet failed to take such contingent arrangements into account when calculating and reporting its best prices to the Department of Health and Human Services. Had it done so, the effective prices on certain drugs would have been different, and, in some instances, triggered a new, lower best price than what GSK reported. As a result, GSK underpaid rebates due to Medicaid and overcharged certain Public Health Service entities for its drugs, the United States contends. GSK has agreed to pay $300 million to resolve these allegations, including $160,972,069 to the federal government, $118,792,931 to thestates, and $20,235,000 to certain Public Health Service entities who paid inflated prices for the drugs at issue.
Except to the extent that GSK has agreed to plead guilty to the three-count criminal information, the claims settled by these agreements are allegations only, and there has been no determination of liability.
“This landmark settlement demonstrates the Department’s commitment to protecting the American public against illegal conduct and fraud by pharmaceutical companies,” said Stuart F. Delery, Acting Assistant Attorney General for the Justice Department’s Civil Division. “Doctors need truthful, fair, balanced information when deciding whether the benefits of a drug outweigh its safety risks. By the same token, the FDA needs all necessary safety-related information to identify safety trends and to determine whether a drug is safe and effective. Unlawful promotion of drugs for unapproved uses and failing to report adverse drug experiences to the FDA can tip the balance of those important decisions, and the Justice Department will not tolerate attempts by those who seek to corrupt our health care system in this way.”
Non-monetary Provisions and Corporate Integrity Agreement
In addition to the criminal and civil resolutions, GSK has executed a five-year Corporate Integrity Agreement (CIA) with the Department of Health and Human Services, Office of Inspector General (HHS-OIG). The plea agreement and CIA include novel provisions that require that GSK implement and/or maintain major changes to the way it does business, including changing the way its sales force is compensated to remove compensation based on sales goals for territories, one of the driving forces behind much of the conduct at issue in this matter. Under the CIA, GSK is required to change its executive compensation program to permit the company to recoup annual bonuses and long-term incentives from covered executives if they, or their subordinates, engage in significant misconduct. GSK may recoup monies from executives who are current employees and those who have left the company. Among other things, the CIA also requires GSK to implement and maintain transparency in its research practices and publication policies and to follow specified policies in its contracts with various health care payors.
“Our five-year integrity agreement with GlaxoSmithKline requires individual accountability of its board and executives,” said Daniel R. Levinson, Inspector General of the U.S. Department of Health and Human Services. “For example, company executives may have to forfeit annual bonuses if they or their subordinates engage in significant misconduct, and sales agents are now being paid based on quality of service rather than sales targets.”
“The FDA Office of Criminal Investigations will aggressively pursue pharmaceutical companies that choose to put profits before the public’s health,” said Deborah M. Autor, Esq., Deputy Commissioner for Global Regulatory Operations and Policy, U.S. Food and Drug Administration. “We will continue to work with the Justice Department and our law enforcement counterparts to target companies that disregard the protections of the drug approval process by promoting drugs for uses when they have not been proven to be safe and effective for those uses, and that fail to report required drug safety information to the FDA.”
“The record settlement obtained by the multi-agency investigative team shows not only the importance of working with our partners, but also the importance of the public providing their knowledge of suspect schemes to the government,” said Kevin Perkins, Acting Executive Assistant Director of the FBI’s Criminal, Cyber, Response and Services Branch. “Together, we will continue to bring to justice those engaged in illegal schemes that threaten the safety of prescription drugs and other critical elements of our nation’s healthcare system.”
“ Federal employees deserve health care providers and suppliers, including drug manufacturers, that meet the highest standards of ethical and professional behavior,” said Patrick E. McFarland, Inspector General of the U.S. Office of Personnel Management. “Today’s settlement reminds the pharmaceutical industry that they must observe those standards and reflects the commitment of Federal law enforcement organizations to pursue improper and illegal conduct that places health care consumers at risk.”
“Today’s announcement illustrates the efforts of VA OIG and its law enforcement partners in ensuring the integrity of the medical care provided our nation’s veterans by the Department of Veterans Affairs,” said George J. Opfer, Inspector General of the Department of Veterans Affairs. “The monetary recoveries realized by VA in this settlement will directly benefit VA healthcare programs that provide for veterans’ continued care.”
“This settlement sends a clear message that taking advantage of federal health care programs has substantial consequences for those who try,” said Rafael A. Medina, Special Agent in Charge of the Northeast Area Office of Inspector General for the U.S. Postal Service. “The U.S. Postal Service pays more than one billion dollars a year in workers' compensation benefits and our office is committed to pursuing those individuals or entities whose fraudulent acts continue to unfairly add to that cost.”
A Multilateral Effort
The criminal case is being prosecuted by the U.S. Attorney’s Office for the District of Massachusetts and the Civil Division’s Consumer Protection Branch. The civil settlement was reached by the U.S. Attorney’s Office for the District of Massachusetts, the U.S. Attorney’s Office for the District of Colorado and the Civil Division’s Commercial Litigation Branch. Assistance was provided by the HHS Office of Counsel to the Inspector General, Office of the General Counsel-CMS Division and FDA’s Office of Chief Counsel as well as the National Association of Medicaid Fraud Control Units.
This matter was investigated by agents from the HHS-OIG; the FDA’s Office of Criminal Investigations; the Defense Criminal Investigative Service of the Department of Defense; the Office of the Inspector General for the Office of Personnel Management; the Department of Veterans Affairs; the Department of Labor; TRICARE Program Integrity; the Office of Inspector General for the U.S. Postal Service and the FBI.
This resolution is part of the government’s emphasis on combating health care fraud and another step for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by Attorney General Eric Holder and Kathleen Sebelius, Secretary of HHS. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. Over the last three years, the department has recovered a total of more than $10.2 billion in settlements, judgments, fines, restitution, and forfeiture in health care fraud matters pursued under the False Claims Act and the Food, Drug and Cosmetic Act.
Court documents related to today’s settlement can be viewed online at www.justice.gov/opa/gsk-docs.html .
Related Materials:
Remarks by the Deputy Attorney General James M. Cole at the GSK Press Conference
Remarks by Acting Assistant Attorney General for the Civil Division Stuart F. Delery at the GSK Press ConferenceFormer Georgia Correctional Officer Pleads Guilty to Conspiring with Other Officers to Assault and Injure InmatesRead the Press Release
WASHINGTON – Willie Redden, 24, of Albany, Ga., a former member of the Correctional Emergency Response Team (CERT) at Macon State Prison in Oglethorpe, Ga., pleaded guilty today to conspiring with other correctional officers to violate the civil rights of inmates in 2010, the Justice Department announced.
In connection with his guilty plea, Redden admitted that he and other correctional officers assaulted and injured inmates in separate incidents at Macon State Prison in 2010. Redden indicated that correctional officers beat these inmates in order to punish them. One inmate was beaten until he was unresponsive and had to be transported from Macon State Prison in an ambulance.Redden further acknowledged that he and other correctional officers tried to cover up CERT’s role in beating and injuring inmates. Redden stated that more senior officers told him to write a false report and to stick to their cover story when speaking with investigators.
“Mr. Redden admitted today that instead of lawfully carrying out his public safety responsibilities, he conspired with fellow officers to assault inmates and then cover up those assaults,” said Assistant Attorney General for the Civil Rights Division Thomas E. Perez. “The Justice Department will continue to vigorously prosecute officers who cross the line and engage in criminal misconduct.”
“When people are incarcerated, the sentence they are required to serve is their time locked up in prison,” said U.S. Attorney for the Middle District of Georgia Michael J. Moore. “It is not a part of their sentence that they be subjected to beatings by the correctional officers. The Department of Justice and I share a zero tolerance policy for those who violate another’s civil rights.”
Redden faces a maximum penalty of five years in prison. His sentencing date has not yet been set.
This case is being investigated by the FBI and is being prosecuted by Special Litigation Counsel Forrest Christian and Trial Attorney Tona Boyd of the Civil Rights Division of Department of Justice, with the assistance of the U.S. Attorney’s Office for the Middle District of Georgia.
Florida Man Convicted in Child Pornography CaseRead the Press Release
WASHINGTON – James E. Price III, 42, of Plantation, Fla., was convicted on June 29, 2012, by a federal jury on one count each of distribution and possession of child pornography, Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida, announced today.
According to court documents and three days of testimony during the trial, the case originated from a South Florida Internet Crimes Against Children Task Force (ICAC) investigation into an individual suspected of possessing and trading child pornography using a peer to peer file sharing network. The individual was later identified as Price. A search warrant was executed on Price’s residence, where agents discovered a hard drive hidden behind boxes in the home. Subsequent examination revealed that the hard drive was protected by encryption and contained hundreds of images and videos of child pornography.
Price faces a maximum term of 10 years in prison for the possession of child pornography charge and 15 years in prison for the distribution charge, a maximum fine of $250,000 on each count, and the possibility of lifetime supervised release. Price is scheduled to be sentenced on Oct. 10, 2012, at 10:00 a.m before U.S. District Judge Kathleen M. Williams.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse, launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The case is being prosecuted by Assistant U.S. Attorneys Marc Anton and Mark Dispoto of the Southern District of Florida and by Trial Attorney Thomas Franzinger of CEOS in the Justice Department’s Criminal Division. The case was investigated by the South Florida ICAC, including the Martin County, Fla., Sherriff’s Office; the Broward County, Fla., Sherriff’s Office; and the Fort Lauderdale Police Department, with assistance from the CEOS High Technology Investigative Unit.
Asheville, North Carolina, Resident Pleads Guilty to Participating in $63 Million Medicare Fraud SchemeRead the Press Release
WASHINGTON – An Asheville, N.C., resident pleaded guilty today in U.S. District Court in Miami for her role in a health care fraud scheme that resulted in the submission of more than $63 million in fraudulent claims to Medicare and Medicaid in Miami and Hendersonville, N.C., announced the Department of Justice, the FBI and the Department of Health and Human Services (HHS).
Serena Joslin, 31, a Licensed Psychological Associate, pleaded guilty before U.S. District Judge Cecilia M. Altonaga in Miami to one count of conspiracy to commit health care fraud. Joslin admitted to participating in a fraud scheme that was orchestrated through an entity called Health Care Solutions Network (HCSN). HCSN operated purported partial hospitalization programs (PHPs), a form of intensive mental health treatment for severe mental illness, in both Miami and Hendersonville.
According to an indictment unsealed on May 2, 2012, HCSN obtained Medicare beneficiaries to attend HCSN for purported PHP treatment that was unnecessary and, in many instances, not provided. HCSN obtained those beneficiaries by paying kickbacks to owners and operators of assisted living facilities (ALFs) or by otherwise recruiting them from ALFs and nursing homes. According to court documents, Joslin admitted that she was aware that HCSN recruited patients who were inappropriate for PHP treatment. Nevertheless, Joslin agreed with other HCSN employees to, among other things, fabricate therapy notes and other medical records, and to direct therapists to fabricate therapy notes and other medical records, all to make it appear as if HCSN patients received appropriate PHP services. Joslin was aware that fraudulent claims to Medicare would be submitted on behalf of these patients.
At sentencing, scheduled for Jan. 11, 2013, Joslin faces a maximum of 10 years in prison and a $250,000 fine.
Eight other charged defendants, including the owner and operators of HCSN, await trial before Judge Altonaga. Defendants are presumed innocent until proven guilty at trial.
Today’s guilty plea was announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida; Xanthi C. Mangum, Acting Special Agent-in-Charge of the FBI’s Miami Field Office; and Special Agent-in-Charge Christopher B. Dennis of the HHS Office of Inspector General (HHS-OIG), Office of Investigations Miami office.
The case is being prosecuted by Trial Attorneys Steven Kim, William Parente and Allan Medina of the Criminal Division’s Fraud Section. The case was investigated by the FBI, HHS-OIG and Medicaid Fraud Control Unit and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida.
Since their inception in March 2007, Medicare Fraud Strike Force operations in nine locations have 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, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.
Arizona-based Nextcare Inc. to Pay US $10 Million<br /> <br /> to Resolve False Claims Act AllegationsRead the Press Release
NextCare Inc., an Arizona-based company, has agreed to pay $10 million to settle federal and state allegations that it submitted false claims, the Justice Department announced today. NextCare is an owner of a chain of urgent care facilities with locations in Arizona, Colorado, Texas, North Carolina, Ohio and Virginia.
The settlement resolves allegations that NextCare submitted false claims to Medicare, TRICARE and the Federal Employees Health Benefits Program, as well as the Medicaid programs of Colorado, Virginia, Texas, North Carolina and Arizona, by billing for unnecessary allergy, H1N1 virus and respiratory panel testing. The United States also alleged that NextCare inflated billings for urgent care medical services in the years under review, a practice known as upcoding.
“This settlement demonstrates the Justice Department’s commitment to ensuring that federal health care dollars are spent appropriately,” said Stuart Delery, Acting Assistant Attorney General for the Civil Division. “Health care providers who administer unnecessary services or who overcharge for care will be held accountable.”
Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina, noted that, “Today’s $10 million settlement with NextCare demonstrates our commitment to putting a stop to improper billing practices that exploit Medicare and drain vital resources from our health care system. NextCare’s upcoding and unnecessary medical testing wasted taxpayers’ dollars. This is a strong message to companies and individuals who engage in such conduct. We are here, we are watching, and we will use all of our resources to safeguard the integrity of important public programs and protect consumers across the nation.”
Daniel R. Levinson, Inspector General of the Department of Health and Human Services (HHS-OIG), added, “P roviders who subject beneficiaries to unnecessary medical testing, as alleged against NextCare, compromise the well-being of their patients and squander Federal health care funds .”
As a condition of the settlement, NextCare Inc. is also required to enter into a Corporate Integrity Agreement with HHS-OIG under which the company will be monitored for a period of five years to ensure that in the future it complies with all federal healthcare program rules.
The allegations resolved by today’s settlement were initially raised in a lawsuit filed against NextCare by former NextCare employee Lorin Cohen. Under the False Claims Act, private citizens acting as relators can bring suit on behalf of the United States and share in the recovery. Ms. Cohen will receive $1.614 million as her share of the recovery.
This resolution is part of the government’s emphasis on combating health care fraud and another step forward for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, a collaborative effort launched in May 2009 by Attorney General Eric Holder and Kathleen Sebelius, Secretary of the Department of Health and Human Services (HHS). Settlements such as this one emphasize both the Department of Justice and HHS's commitment to the reduction and prevention of Medicare and Medicaid financial fraud. Through the False Claims Act alone, the Justice Department has recovered more than $7.7 billion since January 2009 in cases involving fraud against federal health care programs. The Justice Department's total recoveries in False Claims Act cases since January 2009 are over $11.3 billion.
This matter was handled jointly by the Civil Division of the United States Department of Justice, the U.S. Attorney’s Office for the Western District of North Carolina, the FBI, the North Carolina Attorney General’s Office, the Office of Inspector General of the Department of Health and Human Services (HHS-OIG), the TRICARE Management Activity and the Office of Personnel Management (OPM), which administers the FEHBP. The claims settled by this agreement are allegations only, and there has been no determination of liability.
Friday 29 June 2012
US Announces Clean Air Act Settlement with Wisconsin Utility – Dairyland Power Cooperative to Reduce Emissions by More Than 29,000 Tons AnnuallyRead the Press Release
WASHINGTON – The Department of Justice and the U.S. Environmental Protection Agency (EPA) today announced a Clean Air Act settlement with Dairyland Power Cooperative (DPC) that will cover the utility’s three power plants in Alma and Genoa, Wis. DPC has agreed to invest approximately $150 million in pollution control technology that will protect public health and resolve violations of the Clean Air Act. The settlement will also require that DPC spend $5 million on environmental mitigation projects and pay a civil penalty of $950,000.
“This settlement will improve air quality in Wisconsin and downwind areas by significantly reducing releases of sulfur dioxide, nitrogen oxide and other harmful pollutants,” said Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division of the Department of Justice. “This agreement also demonstrates the Justice Department’s commitment to enforcing the New Source Review provisions of the Clean Air Act, which help ensure cleaner air for those communities located near large sources of air pollution.”
“EPA is committed to protecting communities by reducing air pollution from the largest sources of emissions,” said Cynthia Giles, assistant administrator for EPA’s Office of Enforcement and Compliance Assurance. “The pollution reductions and the significant investment in local environmental projects under this agreement will ensure that the people of Wisconsin and neighboring states have cleaner, healthier air.”
Under the settlement, DPC must install pollution control technology on its three largest units and will be required to comply with stringent emission rates and annual tonnage limitations. The settlement also requires DPC to permanently retire three additional coal-fired units at the Alma plant, which have been out of operation since last year. The permanent retirement of these units will ensure that they do not restart without first complying with the Clean Air Act. The actions taken by DPC to comply with this settlement will result in annual reductions of sulfur dioxide (SO2) emissions by 23,000 tons and nitrogen oxides (NOx) emissions by 6,000 tons from 2008 levels, in addition to significant reductions of particulate matter emissions. This settlement covers all seven coal-fired boilers at DPC’s three power plants.
The settlement also requires DPC to spend $5 million on projects that will benefit the environment and human health in communities located near the DPC facilities. DPC must pay $250,000 each to the U.S. Forest Service and the National Park Service, to be used on projects to address the damage done from DPC’s alleged excess emissions. At least $2 million will be spent on a major solar photovoltaic development project. The remaining mitigation funding will be spent on one or more of the following projects; 1) installation of solar photovoltaic panels, 2) home weatherization projects, and 3) the replacement of DPC’s standard vehicle fleet with cleaner burning vehicles. The Sierra Club is a party to the settlement, which will also resolve violations alleged by Sierra Club in related litigation.
Reducing air pollution from the largest sources of emissions, including coal-fired power plants, is one of EPA’s National Enforcement Initiatives for 2011-2013. SO2 and NOx, two key pollutants emitted from power plants, have numerous adverse effects on human health and are significant contributors to acid rain, smog and haze. These pollutants are converted in the air to fine particles of particulate matter that can cause severe respiratory and cardiovascular impacts, and premature death. Reducing these harmful air pollutants will benefit the communities located near DPC facilities, particularly communities disproportionately impacted by environmental risks and vulnerable populations, including children. Because air pollution from power plants can travel significant distances downwind, this settlement will also reduce air pollution outside the immediate region.
This is the 22nd judicial settlement secured by the Justice Department and the EPA, and the 23rd settlement overall, as part of a national enforcement initiative to control harmful emissions from power plants under the Clean Air Act’s New Source Review requirements. The total combined sulfur dioxide and nitrogen oxides emission reductions secured from these settlements will exceed nearly 2 million tons each year once all the required pollution controls have been installed and implemented.
The settlement was lodged in the U.S. District Court for the Western District of Wisconsin, and is subject to a 30-day public comment period and final court approval. The settlement can be viewed at www.justice.gov/enrd/Consent_Decrees.html
More information about the settlement: www.epa.gov/compliance/resources/cases/civil/caa/dairyland.html
More information about EPA’s enforcement initiative: www.epa.gov/compliance/data/planning/initiatives/2011airpollution.html
Three Albuquerque Men Indicted on Federal Civil Rights and Obstruction ChargesRead the Press Release
A federal grand jury in Albuquerque has issued a seven-count indictment charging three corrections officers at the Bernalillo County Metropolitan Detention Center (MDC) with various crimes related to the assault of an inmate housed at MDC on Dec. 21, 2011, and subsequent attempts to cover up and impede the investigation of the assault.
The indictment was announced today by Thomas E. Perez, Assistant Attorney General for the Civil Rights Division; Kenneth J. Gonzales, U.S. Attorney for the District of New Mexico; and Carol K.O. Lee, Special Agent in Charge of the FBI Albuquerque Field Office.
Demetrio Juan Gonzales, 39, is charged with violating the civil rights of the victim when, while in the identification office of MDC, he delivered knee-strikes to the victim without provocation or resistance on the part of the victim. Likewise, Gonzales is also charged with violating the civil rights of the victim when he struck and choked the victim while in the shower area of MDC.
Kevin James Casaus, 23, is charged with violating the victim’s civil rights when he shoved and struck the victim while in the shower area. He is also charged with obstruction of justice and falsification of records, first for making false statements to detectives of the Bernalillo County Sheriff’s Office (BCSO) and then for falsifying his incident report. Both Gonzales and Casaus are no longer employed by MDC.
Matthew David Pendley, 25, is charged with obstruction of justice for making false statements to BCSO detectives and also for tampering with evidence by cleaning up blood from the shower area.
A conviction for violating a person’s civil rights carries a maximum penalty of 10 years in prison and a $250,000 fine. A conviction for obstruction of justice carries a maximum penalty of 20 years in prison and a $250,000 fine.
An indictment is merely an accusation, and the defendants are presumed innocent unless proven guilty.
This case is being investigated by the Albuquerque Division of the FBI and is being prosecuted by Assistant U.S. Attorney Mark T. Baker for the District of New Mexico and Trial Attorney Fara Gold of the Civil Rights Division of the U.S. Department of Justice.
Second Owner of Houston-area Home Health Care Agency Sentenced to 108 Months in Prison for Role in $5.2 Million Medicare FraudRead the Press Release
The former co-owner of a Houston-area home health care company was sentenced in Houston to 108 months in prison for his participation in a $5.2 million Medicare fraud scheme, announced the Department of Justice, the FBI and the Department of Health and Human Services (HHS).
Princewill Njoku, a former co-owner and administrator at Family Healthcare Group, was sentenced yesterday by U.S. District Judge Nancy Atlas in the Southern District of Texas to 108 months in prison, followed by three years of supervised release. Njoku was ordered to pay $5.1 million in restitution jointly and severally with his co-defendants. In January 2011, Njoku pleaded guilty to one count of conspiracy to commit health care fraud, one count of conspiracy to pay illegal kickbacks to patient recruiters and sixteen counts of paying such illegal kickbacks.
According to court documents and other evidence presented to the court, Family Healthcare Group, a Houston home health care company, purported to provide skilled nursing to Medicare beneficiaries. According to the evidence, Princewill Njoku paid co-conspirators to recruit Medicare beneficiaries for the purpose of Family Healthcare Group filing claims with Medicare for skilled nursing that was medically unnecessary or not provided. Njoku and his co-conspirators then falsified documents to support the fraudulent payments from Medicare.
Njoku is the ninth defendant sentenced in connection with this scheme, including Njoku’s co-owner, Clifford Ubani, who also received a 108 month sentence earlier this month. One remaining defendant awaits sentencing.
The sentence was announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney Kenneth Magidson of the Southern District of Texas; 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 (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 their inception in March 2007, Medicare Fraud Strike Force operations in nine locations have charged more than 1,330 defendants who collectively have falsely billed the Medicare program for more than $4.4 billion. In addition, the HHS Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov
Pennsylvania Man Charged with Fraud in Ambulance SchemeRead the Press Release
A Churchville, Pa., man was arrested today on charges contained in a 23-count indictment for his alleged role in a scheme to defraud Medicare by billing for fraudulent ambulance services, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney Zane D. Memeger.
An indictment unsealed today charges William V. Hlushmanuk, aka “Bill Le,” 35, of Churchville, Pa., with 21 counts of health care fraud, one count of conspiring to commit health care fraud and one count of aiding and abetting in a false statement relating to a health care matter.
The indictment alleges that between 2006 and April 2011, Hlushmanuk and others devised a scheme to defraud Medicare of more than $5.4 million dollars. According to the indictment, Hlushmanuk used a straw owner to fraudulently open Starcare Ambulance because he was otherwise ineligible to own the company. Starcare primarily transported dialysis patients and fraudulently billed Medicare for patient transport for patients who could walk and whose transportation by Medicare was not medically required. The scheme involved transports in vans and fraudulent representations to Medicare’s administrative contractor, Highmark Medicare Services, to induce them to pay for these services. The indictment seeks forfeiture of $5,443, 315, as well as a 2006 Hummer.
If convicted of all charges, Hlushmanuk faces a statutory maximum sentence of 10 years in prison on each of the health care fraud and conspiracy counts, five years for aiding and abetting in false statements relating to health care fraud, a three year term of supervised release, and a fine of up to $250,000.
The case was investigated by the FBI and the U.S. Department of Health and Human Services Office of Inspector General. It is being prosecuted by Trial Attorney Sam G. Nazzaro of the Organized Crime and Gang Section in the Justice Department’s Criminal Division.
An indictment contains charges and defendants are innocent until proven guilty beyond a reasonable doubt.
Man Sentenced to 71 Months for South Florida Tax ConspiracyRead the Press Release
Elmo Antonio George was sentenced today to 71 months in prison for his role in a conspiracy to defraud the Internal Revenue Service (IRS) and for filing false tax returns, the Justice Department and IRS announced.
On March 16, 2012, George and another individual, Nasheba Necia Hunte, were convicted by a jury sitting in Ft. Lauderdale, Fla., for a conspiracy to defraud the IRS that spanned from as early as January 2003 through at least April 2007. George and Hunte were also each convicted of two counts of filing false 2005 and 2006 individual income tax returns, on which they claimed false tax refunds for themselves. Hunte was sentenced to 51 months in prison on May 31, 2012.
The indictment alleged that in February 2005, George incorporated Winco Holdings Inc. in Florida. George and Hunte were the only officers of Winco and despite having no employees and paying no wages, the defendants filed employment tax returns on behalf of Winco for quarters in 2005, 2006 and 2007, that falsely claimed substantial quarterly employment tax withholdings for Winco employees. None of the withholding amounts were paid over to the IRS. In February 2007, a fraudulent check for $1,676,991.16 was written from Winco’s bank account to the U.S. Treasury for Winco’s employment tax obligations. The check was signed “contact maker for authority to pay.”
The indictment also alleged that the defendants filed corporate tax returns for Winco for tax years 2005 and 2006 that reported fictitious partnership losses. These fictitious losses then “passed through” to the defendants’ individual income tax returns along with the false Winco wage and withholding amounts. These withholding amounts generated false refunds for both defendants for tax years 2005 and 2006.
The evidence at trial established that the IRS remitted refunds to George and Hunte totaling approximately $241,807 for tax year 2005. George’s refund was deposited into a joint bank account of another entity, Dikingdom Inc. With the false refund, the defendants bought a home for $145,500 for cash in Villa Rica, Ga. To conceal the purchase of this property and the proceeds of the fraud, George deeded the property to an alias named the Overseer of Dikingdom. George also falsely claimed that a church owned the property. According to evidence presented in court, the total intended tax loss was over $1 million.
The evidence also established that less than one week after IRS-Criminal Investigation tried to contact the defendants, Hunte changed her home address in her employment contact documents from Villa Rica, Ga., to a non-existent address. When special agents of IRS-Criminal Investigation attempted contact with Hunte, she affirmatively denied who she was to the agents.
Kathryn Keneally, Assistant Attorney General for the Justice Department’s Tax Division, thanked special agents of IRS – Criminal Investigation, who investigated the case, and Tax Division Trial Attorneys Rebecca Perlmutter and Chad Edgar, who prosecuted the case.
Former New Mexico Sheriff’s Deputy Indicted for Using Excessive ForceRead the Press Release
WASHINGTON – A federal grand jury in Albuquerque, N.M., returned a one-count indictment charging former San Juan County, N.M., Sheriff’s Deputy R. Dale Frazier, 56, with unlawfully assaulting a man with a dangerous weapon.
The indictment was announced today by Thomas E. Perez, Assistant Attorney General for the Civil Rights Division; Kenneth J. Gonzales, U.S. Attorney for the District of New Mexico; and Carol K.O. Lee, Special Agent in Charge of the FBI Albuquerque Field Office.The indictment, which was returned on June 27, 2012, charges Frazier with one count of violating the victim’s right to be free from the use of unreasonable force by a police officer.
According to the indictment, Frazier unlawfully assaulted a man on March 17, 2011, in Farmington, N.M., by striking him in the head, neck and body with a flashlight. The repeated strikes by Frazier resulted in bodily injury to the victim.
If convicted, Frazier faces a maximum penalty of 10 years in prison and a $250,000 fine.
This case is being investigated by the Albuquerque Division of the FBI. It is being prosecuted by Trial Attorney Sheldon L. Beer of the Justice Department’s Civil Rights Division and Assistant U.S. Attorney Mark Baker for the District of New Mexico.
An indictment is merely an accusation, and the defendant is presumed innocent unless proven guilty.
Former Florida Salesperson Sentenced to Jail for Tax Fraud ConspiracyRead the Press Release
Dr. Ellen Meredith Stubenhaus, previously of Lake Worth, Fla., and later an expatriate living in Costa Rica, was sentenced to 60 months in prison today by U.S. District Judge M. Casey Rodgers in Tallahassee, Fla., the Justice Department and Internal Revenue Service (IRS) announced. Stubenhaus, who was extradited from Costa Rica to the United States in September 2011, had previously pleaded guilty to conspiracy to defraud the United States. In addition to her jail sentence, Stubenhaus was sentenced to three years of supervised release and ordered to pay restitution of $373,549 to the IRS.
According to the plea agreement and court records, Stubenhaus was a salesperson with Pinnacle Quest International (also known as PQI or Quest International). PQI was a multi-level marketing organization that operated a marketplace for a variety of vendors. Trial evidence in related cases showed that over a six year period between 2002 and 2008, PQI had over 11,000 members throughout the United States.
Stubenhaus admitted in court records that several PQI vendors sold bogus theories and strategies for tax evasion. She utilized the services and schemes of these fraudulent vendors to conceal her own income from selling PQI vendor products and PQI memberships. She also admitted to helping the principals of PQI conceal PQI’s income.
As Stubenhaus admitted in the statement of facts, one of the vendors operating under the PQI umbrella was the Southern Oregon Resource Center for Education (SORCE), which assisted its customers in the creation of a series of nominee business entities in the United States and Panama. The CEO of SORCE, Eugene “Gino” Casternovia, is serving a seven year prison sentence after being convicted at trial of conspiracy to defraud the United States and to commit wire fraud and conspiracy to commit money laundering. His case is currently on appeal.
Court documents also showed that another PQI vendor was MYICIS, a computerized “warehouse bank.” MYICIS was a single bank account in which customers secretly pooled their money under the control of a single individual, Wayne Hicks. MYICIS had 3,000 clients and approximately $100 million in deposits over a three-year period. MYICIS was promoted to PQI’s clients as a method to hide their assets from the IRS as a result of the secret, pooled nature of the account. Wayne Hicks is currently serving a five year sentence after pleading guilty to conspiracy to defraud the United States.
According to the plea agreement and statement of facts, Stubenhaus established nominee corporations in Panama using the services of SORCE. She then opened a sub-account within the MYICIS warehouse bank in the name of one of her offshore corporations. Substantial portions of the income Stubenhaus earned from selling PQI memberships and PQI’s various vendor products was routed through the warehouse bank account, thereby concealing it from the depository bank and from the IRS. From there, Stubenhaus wired significant amounts of money offshore. She also used the warehouse bank to transfer significant sums to the principals of PQI, representing the organization’s share of the profits from Stubenhaus’s sales of PQI memberships. Stubenhaus also did not file federal income tax returns nor pay income taxes while she was affiliated with PQI.
Kathryn Keneally, Assistant Attorney General for the Justice Department’s Tax Division, commended the efforts of special agents of the IRS, who conducted the nationwide investigation of PQI, and Tax Division Trial Attorney Jonathan Marx, who prosecuted the case.
Barrio Azteca Leader Sentenced to Life in Prison and Two Barrio Azteca Soldiers Sentenced to 20 and 30 Years in PrisonRead the Press Release
WASHINGTON – A leader and two soldiers in the Barrio Azteca (BA), a transnational border gang allied with the Juarez Cartel, were sentenced in El Paso, Texas, to life, 30 and 20 years in prison, respectively, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney Robert Pitman for the Western District of Texas, FBI Special Agent in Charge Mark Morgan of the FBI’s El Paso Office and Administrator Michele M. Leonhart of the U.S. Drug Enforcement Administration (DEA).
Hector Galindo, 38, aka “Silent,” of El Paso, currently serving a 25-year Texas state sentence for murder, was sentenced to life prison. Ricardo Gonzales, 44, aka “Cuate,” of Anthony, N.M., was sentenced to 30 years in prison, and Adam Garcia, 35, aka “Bad Boy,” of El Paso, was sentenced to 20 years in prison. Galindo, Gonzales and Garcia were charged in a 12-count third superseding indictment unsealed in March 2011. They were sentenced yesterday in the Western District of Texas. Galindo, Gonzales and Garcia pleaded guilty to conspiracy to commit racketeering (RICO) on Jan. 26, 2012, Jan. 18, 2012, and Jan. 29, 2012, respectively.
According to court documents and information presented in court, Galindo was a top Lieutenant in the BA. While incarcerated in the Texas Department of Corrections, he served as the right hand man to BA Captain Manuel Cardoza. In that role, Galindo maintained communication with other BA Captains and Lieutenants in the United States and Mexico and was specifically in charge of BA operations in Texas. Evidence was presented that Gonzales and Garcia were BA soldiers, whose duties included distributing drugs, picking up money from dealers and enforcement operations within their area of responsibility.
“As members of the Barrio Azteca gang, Hector Galindo, Ricardo Gonzales and Adam Garcia participated in a brutal criminal enterprise dedicated to spreading fear and violence on both sides of the border,” said Assistant Attorney General Breuer. “These prison sentences send a strong message that even the most powerful and ruthless gangs cannot evade justice. Our prosecution of the Barrio Azteca gang, including for the U.S. Consulate-related murders in Juarez, Mexico, in 2010, has led to convictions against 24 gang members and leaders. We will continue aggressively to pursue the Barrio Azteca and other gangs so that communities in the United States and Mexico can live free from the violence and destruction of organized crime.”
“These sentences represent the FBI’s commitment to the aggressive pursuit of criminal enterprises such as the Barrio Aztecas whose presence pose a significant risk to citizens on both sides of the border,” said FBI Special Agent in Charge Morgan. “Through the ongoing and joint efforts of the law enforcement community we will continue the fight to bring to justice predators such as Galindo, Gonzales and Garcia.”
“This investigation highlights an unfortunate reality: leaders within growing trans-national prison and street gangs like the Barrio Azteca continue to promote violence and manage their drug trafficking activities even after the cell door closes,” said DEA Administrator Leonhart. “However, the successful prosecutions of Galindo, Gonzales and Garcia, and the conviction of other Barrio Azteca members reinforce another reality: that wherever these dangerous organizations operate, DEA and its partners will aggressively follow, investigate and prosecute.”
A total of 35 BA members and associates based in the United States and Mexico were charged in the third superseding indictment for allegedly committing various criminal acts, including racketeering, narcotics distribution and importation, retaliation against persons providing information to U.S. law enforcement, extortion, money laundering, obstruction of justice and murder, including the 2010 Juarez consulate murders. Of the 35 defendants charged, 33 have been apprehended, including April Cardoza, who was found in Juarez, Mexico, last week. Twenty-four of those defendants have pleaded guilty, one defendant committed suicide while imprisoned during his trial and six others are pending extradition from Mexico. U.S. and Mexican law enforcement are actively seeking to apprehend the two remaining fugitives in this case, including Luis Mendez and Eduardo Ravelo, an FBI Top Ten Most Wanted Fugitive.
Today’s sentencing by U.S. District Judge Kathleen Cardone of the Western District Court of Texas marks the closure of the case against the U.S.-based defendants charged in the superseding indictment. Twenty-one of 22 U.S.-based defendants have pleaded guilty and have been sentenced, including another BA Lieutenant Roberto Angel Cardona, who was also sentenced to life by Judge Cardone on Feb. 17, 2012. The remaining U.S.-based defendant, Ramon Renteria, aka “Spooky,” took his own life while in prison during his trial. Witnesses testified that Renteria was a BA Captain, the highest rank of the Barrio Azteca, and the only U.S.-based Captain not currently serving a life sentence in prison.
According to court documents and information presented in court throughout this case, the Barrio Azteca is a violent street and prison gang that began in the late 1980s and expanded into a transnational criminal organization. In the 2000s, the BA formed an alliance in Mexico with “La Linea,” which is part of the Juarez Drug Cartel (also known as the Vincente Carrillo Fuentes Drug Cartel or “VCF”). The purpose of the BA-La Linea alliance was to battle the Chapo Guzman Cartel and its allies for control of the drug trafficking routes through Juarez and Chihuahua. The drug routes through Juarez, known as the Juarez Plaza, are important to drug trafficking organizations because they are a principal illicit drug trafficking conduit into the United States.
According to evidence presented in court, witnesses testified to the brutality of the BA. Inside and outside of prison, the gang thrives on violence – from gang beatings to drive-by shootings to murder – all in order to discipline its own members or fight against rivals. Testimony also indicated that the BA is well-organized and militaristic in structure. Its members, or “soldiers,” are governed by captains, various lieutenants and numerous sergeants in the United States and Mexico.
Witnesses also testified that the sale of illegal drugs is the life-blood of the BA. Evidence was presented that since 2003 the BA has trafficked hundreds of kilograms of cocaine and heroin. Because of the BA’s alliance with the Juarez Drug Cartel, the gang receives illegal drugs at low cost and profits on its importation, sale and distribution within the United States.
Witnesses also testified to the Barrio Azteca’s practice of extorting “quota” or taxes on non-BA drug dealers who sold illegal narcotics in El Paso and the greater West Texas and Eastern New Mexico area. Specifically, during today’s hearing, one witness recalled an instance in which Gonzales tried to collect an extortion fee from a New Mexico drug dealer, and when the dealer refused to pay, Gonzalez pulled a gun, put it to dealer’s head, and threatened to kill him.
When quota is collected by the BA, members and leaders deposit the money into the commissary accounts of incarcerated BA leaders, often using fake names or female associates to send the money by wire transfer. Galindo was one of the ranking members of the BA who would receive laundered funds and disperse it within the Texas State prison system to further the criminal goals of the enterprise.
Witnesses also testified to the extensive communication web of the BA, including utilizing coded letters, contraband cell phones within state and federal prison facilities, and distribution of membership rosters and hit lists. Witnesses specifically implicated Galindo, then incarcerated in the Coffield Unit of the Texas Department of Criminal Justice, as the central leader within the organization who kept track of membership records, hit lists and gang treaties for the BA. To update those lists, members and other leaders would contact Galindo on his contraband prison cell phone to verify the status of persons claiming to be BA members and ensure that they were in good standing with the criminal organization. Those not in good standing were targeted by the BA for assault or murder.
The case is being prosecuted by Trial Attorney Joseph A. Cooley of the Criminal Division’s Organized Crime and Gang Section, Trial Attorney Brian Skaret of the Criminal Division’s Human Rights and Special Prosecutions Section and Assistant U.S. Attorney George Leal of the Western District of Texas - El Paso Division. The U.S. Attorney’s Office for the District of New Mexico provided significant assistance in this case, including by Assistant U.S. Attorney Sarah Davenport. Valuable assistance was provided by the Criminal Division’s Offices of International Affairs and Enforcement Operations.
The case was investigated by the FBI’s El Paso Field Office, Albuquerque Field Office (Las Cruces Resident Agency), DEA Juarez and DEA El Paso. Special assistance was provided by the Bureau of Alcohol, Tobacco, Firearms and Explosives; Immigration and Customs Enforcement; the U.S. Marshals Service; U.S. Customs and Border Protection; Federal Bureau of Prisons; U.S. Diplomatic Security Service; the Texas Department of Public Safety; the Texas Department of Criminal Justice; El Paso Police Department; El Paso County Sheriff’s Office; El Paso Independent School District Police Department; Texas Alcohol and Beverage Commission; New Mexico State Police; Dona Ana County, N.M., Sheriff’s Office; Las Cruces, N.M., Police Department; Southern New Mexico Correctional Facility and Otero County Prison Facility New Mexico.
Barrio Azteca Leader Extradited from Mexico to United States to Face Charges Related to the U.S. Consulate Murders in Juarez, MexicoRead the Press Release
An alleged leader of the Barrio Azteca (BA), a transnational border gang allied with the Juarez Cartel, was extradited from Mexico to the United States to face charges related to the March 2010 U.S. Consulate murders in Juarez, Mexico, Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney Robert Pitman for the Western District of Texas, FBI Special Agent in Charge Mark Morgan of the FBI’s El Paso Office and Administrator Michele M. Leonhart of the U.S. Drug Enforcement Administration (DEA) announced today.
Arturo Gallegos Castrellon, aka “Benny,” arrived in the United States yesterday and made his initial appearance today before U.S. Magistrate Judge Robert Castaneda in El Paso, Texas. Gallegos Castrellon was charged in a 12-count third superseding indictment unsealed in March 2011.
“We allege that Gallegos Castrellon participated in the U.S. Consulate shootings in March 2010,” said Assistant Attorney General Breuer. “His extradition to the United States is an important step forward in our pursuit of justice for the victims of those tragic murders in Juarez, Mexico. Innocent men and women on both sides of our border with Mexico should not have to live in fear of Barrio Azteca and other violent criminal gangs.”
“The extradition represents the FBI’s unwavering commitment to track down individuals who continue to commit senseless and unconscionable acts of violence against the citizens of our community in furtherance of their criminal enterprise,” said FBI Special Agent in Charge Morgan. “Today’s action stands as a shining example of effective coordination and collaboration with the law enforcement community within El Paso, as well as the Government of Mexico, to ensure the border will not act as an obstacle to justice being served.”
A total of 35 BA members and associates based in the United States and Mexico were charged in the third superseding indictment for allegedly committing various criminal acts, including racketeering, narcotics distribution and importation, retaliation against persons providing information to U.S. law enforcement, extortion, money laundering, obstruction of justice and murder. Of the 35 defendants, 10 Mexican nationals, including Gallegos Castrellon, were charged with the March 13, 2010, murders in Juarez, Mexico, of U.S. Consulate employee Leslie Ann Enriquez Catton, her husband Arthur Redelfs and Jorge Alberto Salcido Ceniceros, the husband of a U.S. Consulate employee.
Of the 35 defendants charged, 33 have been apprehended, including April Cardoza, who was found in Juarez, Mexico, last week. Twenty-four of those defendants have pleaded guilty, one defendant committed suicide while imprisoned during his trial and six others are pending extradition from Mexico. U.S. and Mexican law enforcement are actively seeking to apprehend the two remaining fugitives in this case, Luis Mendez and Eduardo Ravelo, an FBI Top Ten Most Wanted Fugitive.
According to court documents and information presented in court throughout this case, the Barrio Azteca is a violent street and prison gang that began in the late 1980s and expanded into a transnational criminal organization. In the 2000s, the BA formed an alliance in Mexico with “La Linea,” which is part of the Juarez Drug Cartel (also known as the Vincente Carrillo Fuentes Drug Cartel or “VCF”). The purpose of the BA-La Linea alliance was to battle the Chapo Guzman Cartel and its allies for control of the drug trafficking routes through Juarez and Chihuahua. The drug routes through Juarez, known as the Juarez Plaza, are important to drug trafficking organizations because they are a principal illicit drug trafficking conduit into the United States.
The gang has a militaristic command structure and includes captains, lieutenants, sergeants and soldiers – all with the purpose of maintaining power and enriching its members and associates through drug trafficking, money laundering, extortion, intimidation, violence, threats of violence and murder.
According to court documents, Gallegos Castrellon allegedly participated in BA activities, including narcotics trafficking and acts of violence by BA members, both in Mexico and the United States. Gallegos Castrellon allegedly participated in the March 2010 murders in Juarez, Mexico, of U.S. Consulate employee Leslie Ann Enriquez Catton, her husband Arthur Redelfs and Jorge Alberto Salcido Ceniceros, the husband of a U.S. Consulate employee.
If convicted, Gallegos Castrellon faces a maximum penalty of life in prison. He is presumed innocent until proven guilty beyond a reasonable doubt.
Gallegos Castrellon’s extradition is the result of close coordination between U.S. law enforcement and the government of Mexico in the investigation and prosecution of this case. The cooperation and assistance of the government of Mexico was essential to achieving the successful extradition.
Yesterday, three of Gallegos Castrellon’s co-defendants were sentenced by U.S. District Judge Kathleen Cardone of the Western District Court of Texas to 20 years, 30 years and life in prison. The sentencings mark the closure of the case against the U.S.-based defendants charged in the superseding indictment. Twenty-one of 22 U.S.-based defendants have pleaded guilty and have been sentenced, including another BA Lieutenant Roberto Angel Cardona, who was also sentenced to life by Judge Cardone on Feb. 14, 2012. The remaining U.S.-based defendant, Ramon Renteria, aka “Spooky,” took his own life while in prison during his trial. Witnesses testified that Renteria was a BA Captain, the highest rank of the Barrio Azteca, and the only U.S.-based Captain not currently serving a life sentence in prison.
The case is being prosecuted by Trial Attorney Joseph A. Cooley of the Criminal Division’s Organized Crime and Gang Section, Trial Attorney Brian Skaret of the Criminal Division’s Human Rights and Special Prosecutions Section and Assistant U.S. Attorney George Leal of the Western District of Texas - El Paso Division. The U.S. Attorney’s Office for the District of New Mexico provided significant assistance in this case, including by Assistant U.S. Attorney Sarah Davenport. Valuable assistance was provided by the Criminal Division’s Offices of International Affairs and Enforcement Operations.
The case was investigated by the FBI’s El Paso Field Office, Albuquerque Field Office (Las Cruces Resident Agency), DEA Juarez and DEA El Paso. Special assistance was provided by the Bureau of Alcohol, Tobacco, Firearms and Explosives; Immigration and Customs Enforcement; the U.S. Marshals Service; U.S. Customs and Border Protection; Federal Bureau of Prisons; U.S. Diplomatic Security Service; the Texas Department of Public Safety; the Texas Department of Criminal Justice; El Paso Police Department; El Paso County Sheriff’s Office; El Paso Independent School District Police Department; Texas Alcohol and Beverage Commission; New Mexico State Police; Dona Ana County, N.M., Sheriff’s Office; Las Cruces, N.M., Police Department; Southern New Mexico Correctional Facility and Otero County Prison Facility New Mexico.
Thursday 28 June 2012
Witness in Identity Theft and Tax Trial Sentenced in Alabama <br /> <br /> to 15 Months in Prison for Perjury and Lying to a Federal AgentRead the Press Release
Nacretia Lewis was sentenced today to 15 months in federal prison for perjury and lying to a federal agent, the Justice Department and Internal Revenue Service (IRS) announced. She was also ordered to serve one year of supervised release following her release from prison.
On March 27, 2012, after a two-day jury trial, Lewis was convicted of one count of perjury and one count of lying to a federal agent. Based on evidence introduced at trial, Lewis earlier appeared as a witness in a September 2011 trial in the Middle District of Alabama, and testified falsely in favor of an alibi defense offered by the defendant, Janika Fernae Bates. Specifically, Lewis was convicted of lying about being with Janika Fernae Bates at a place other than NCO Financial Systems Inc., their workplace on Jan. 20, 2011, at precisely the same time other witnesses placed Bates at NCO fleeing from federal law enforcement attempting to execute a federal arrest warrant.
The evidence further showed that after her false testimony at trial, Lewis met with federal agents and again lied about her whereabouts and Bates’ whereabouts on Jan. 20, 2011. Despite Lewis’ false alibi testimony at the Bates trial, Janika Fernae Bates was convicted of 13 felony counts related to stolen identity refund fraud and sentenced to 94 months in federal prison.
Kathryn Keneally, Assistant Attorney General for the Justice Department’s Tax Division, thanked special agents of IRS – Criminal Investigation, who investigated the case, and Tax Division Trial Attorneys Justin Gelfand and Jason Poole, who prosecuted the case.
United Technologies Subsidiary Pleads Guilty to Criminal Charges for Helping China Develop New Attack HelicopterRead the Press Release
BRIDGEPORT, Conn. – Pratt & Whitney Canada Corp. (PWC), a Canadian subsidiary of the Connecticut-based defense contractor United Technologies Corporation (UTC), today pleaded guilty to violating the Arms Export Control Act and making false statements in connection with its illegal export to China of U.S.-origin military software used in the development of China’s first modern military attack helicopter, the Z-10.
In addition, UTC, its U.S.-based subsidiary Hamilton Sundstrand Corporation (HSC) and PWC have all agreed to pay more than $75 million as part of a global settlement with the Justice Department and State Department in connection with the China arms export violations and for making false and belated disclosures to the U.S. government about these illegal exports. Roughly $20.7 million of this sum is to be paid to the Justice Department. The remaining $55 million is payable to the State Department as part of a separate consent agreement to resolve outstanding export issues, including those related to the Z-10. Up to $20 million of this penalty can be suspended if applied by UTC to remedial compliance measures. As part of the settlement, the companies admitted conduct set forth in a stipulated and publicly filed statement of facts.
Today’s actions were announced by David B. Fein, U.S. Attorney for the District of Connecticut; Lisa Monaco, Assistant Attorney General for National Security; John Morton, Director of U.S. Immigration and Customs Enforcement (ICE); Ed Bradley, Special Agent in Charge of the Northeast Field Office of the Defense Criminal Investigative Service (DCIS); Kimberly K. Mertz, Special Agent in Charge of the FBI New Haven Division; David Mills, Department of Commerce Assistant Secretary for Export Enforcement; and Andrew J. Shapiro, Assistant Secretary of State for Political-Military Affairs.The Charges
Today in the District of Connecticut, the Justice Department filed a three-count criminal information charging UTC, PWC and HSC. Count One charges PWC with violating the Arms Export Control Act in connection with the illegal export of defense articles to China for the Z-10 helicopter. Count Two charges PWC, UTC and HSC with making false statements to the U.S. government in their belated disclosures relating to the illegal exports. Count Three charges PWC and HSC with failure to timely inform the U.S. government of exports of defense articles to China.
While PWC has pleaded guilty to Counts One and Two, the Justice Department has recommended that prosecution of UTC and HSC on Count Two, and PWC and HSC on Count Three be deferred for two years, provided the companies abide by the terms of a deferred prosecution agreement with the Justice Department. As part of the agreement, the companies must pay $75 million and retain an Independent Monitor to monitor and assess their compliance with export laws for the next two years.
The Export Scheme
Since 1989, the United States has imposed a prohibition upon the export to China of all U.S. defense articles and associated technical data as a result of the conduct in June 1989 at Tiananmen Square by the military of the People’s Republic of China. In February 1990, the U.S. Congress imposed a prohibition upon licenses or approvals for the export of defense articles to the People’s Republic of China. In codifying the embargo, Congress specifically named helicopters for inclusion in the ban.
Dating back to the 1980s, China sought to develop a military attack helicopter. Beginning in the 1990s, after Congress had imposed the prohibition on exports to China, China sought to develop its attack helicopter under the guise of a civilian medium helicopter program in order to secure Western assistance. The Z-10, developed with assistance from Western suppliers, is China’s first modern military attack helicopter.
During the development phases of China’s Z-10 program, each Z-10 helicopter was powered by engines supplied by PWC. PWC delivered 10 of these development engines to China in 2001 and 2002. Despite the military nature of the Z-10 helicopter, PWC determined on its own that these development engines for the Z-10 did not constitute “defense articles,” requiring a U.S. export license, because they were identical to those engines PWC was already supplying China for a commercial helicopter.
Because the Electronic Engine Control software, made by HSC in the United States to test and operate the PWC engines, was modified for a military helicopter application, it was a defense article and required a U.S. export license. Still, PWC knowingly and willfully caused this software to be exported to China for the Z-10 without any U.S. export license. In 2002 and 2003, PWC caused six versions of the military software to be illegally exported from HSC in the United States to PWC in Canada, and then to China, where it was used in the PWC engines for the Z-10.
According to court documents, PWC knew from the start of the Z-10 project in 2000 that the Chinese were developing an attack helicopter and that supplying it with U.S.-origin components would be illegal. When the Chinese claimed that a civil version of the helicopter would be developed in parallel, PWC marketing personnel expressed skepticism internally about the “sudden appearance” of the civil program, the timing of which they questioned as “real or imagined.” PWC nevertheless saw an opening for PWC “to insist on exclusivity in [the] civil version of this helicopter,” and stated that the Chinese would “no longer make reference to the military program.” PWC failed to notify UTC or HSC about the attack helicopter until years later and purposely turned a blind eye to the helicopter’s military application.
HSC in the United States had believed it was providing its software to PWC for a civilian helicopter in China, based on claims from PWC. By early 2004, HSC learned there might an export problem and stopped working on the Z-10 project. UTC also began to ask PWC about the exports to China for the Z-10. Regardless, PWC on its own modified the software and continued to export it to China through June 2005.
According to court documents, PWC’s illegal conduct was driven by profit. PWC anticipated that its work on the Z-10 military attack helicopter in China would open the door to a far more lucrative civilian helicopter market in China, which according to PWC estimates, was potentially worth as much as $2 billion to PWC.
Belated and False Disclosures to U.S. Government
These companies failed to disclose to the U.S. government the illegal exports to China for several years and only did so after an investor group queried UTC in early 2006 about whether PWC’s role in China’s Z-10 attack helicopter might violate U.S. laws. The companies then made an initial disclosure to the State Department in July 2006, with follow-up submissions in August and September 2006.
The 2006 disclosures contained numerous false statements. Among other things, the companies falsely asserted that they were unaware until 2003 or 2004 that the Z-10 program involved a military helicopter. In fact, by the time of the disclosures, all three companies were aware that PWC officials knew at the project’s inception in 2000 that the Z-10 program involved an attack helicopter.
Today, the Z-10 helicopter is in production and initial batches were delivered to the People’s Liberation Army of China in 2009 and 2010. The primary mission of the Z-10 is anti-armor and battlefield interdiction. Weapons of the Z-10 have included 30 mm cannons, anti-tank guided missiles, air-to-air missiles and unguided rockets.
“PWC exported controlled U.S. technology to China, knowing it would be used in the development of a military attack helicopter in violation of the U.S. arms embargo with China,” said U.S. Attorney Fein. “PWC took what it described internally as a ‘calculated risk,’ because it wanted to become the exclusive supplier for a civil helicopter market in China with projected revenues of up to two billion dollars. Several years after the violations were known, UTC, HSC and PWC disclosed the violations to the government and made false statements in doing so. The guilty pleas by PWC and the agreement reached with all three companies should send a clear message that any corporation that willfully sends export controlled material to an embargoed nation will be prosecuted and punished, as will those who know about it and fail to make a timely and truthful disclosure.”“Due in part to the efforts of these companies, China was able to develop its first modern military attack helicopter with restricted U.S. defense technology. As today’s case demonstrates, the Justice Department will spare no effort to hold accountable those who compromise U.S. national security for the sake of profits and then lie about it to the government,” said Assistant Attorney General Monaco. “I thank the agents, analysts and prosecutors who helped bring about this important case.”
“This case is a clear example of how the illegal export of sensitive technology reduces the advantages our military currently possesses,” said ICE Director Morton. “I am hopeful that the conviction of Pratt & Whitney Canada and the substantial penalty levied against United Technologies and its subsidiaries will deter other companies from considering similarly ill-conceived business practices in the future. American military prowess depends on lawful, controlled exports of sensitive technology by U.S. industries and their subsidiaries, which is why ICE will continue its present campaign to aggressively investigate and prosecute criminal violations of U.S. export laws relating to national security.”
“Today’s charges and settlement demonstrate the continued commitment of the Defense Criminal Investigative Service (DCIS) and fellow agencies to protect sensitive U.S. defense technology from being illegally exported,” said DCIS Special Agent in Charge Bradley. “Safeguarding our military technology is vital to our nation’s defense and the protection of our war fighters both home and abroad. We know that foreign governments are actively seeking U.S. defense technology for their own development. Thwarting these efforts is a top priority for DCIS. I applaud the agents and prosecutors who worked tirelessly to bring about this result.”
“Preventing the loss of critical U.S. information and technologies is one of the most important investigative priorities of the FBI,” said FBI Special Agent in Charge Mertz. “Our adversaries routinely target sensitive research and development data and intellectual property from universities, government agencies, manufacturers, and defense contractors. While the thefts associated with economic espionage and illegal technology transfers may not capture the same level of attention as a terrorist incident, the costs to the U.S. economy and our national security are substantial. Violations of the Arms Export Control Act put our nation at risk and the FBI, along with all of our federal agency partners, are committed to ensuring that embargoed technologies do not fall into the wrong hands. Those who violate these laws should expect to be held accountable. An important part of the FBI’s strategy in this area involves the development of strategic partnerships. In that regard, the FBI looks forward to future coordination with UTC and its subsidiaries to strengthen information sharing and counterintelligence awareness.”
“Protecting national security is our top priority,” said Assistant Secretary of Commerce for Export Enforcement Mills. “Today’s action sends a clear signal that federal law enforcement agencies will work together diligently to prevent U.S. technology from falling into the wrong hands.”
Assistant Secretary Shapiro, of the State Department’s Bureau of Political and Military Affairs, said, “Today’s $75 million settlement with United Technologies Corporation sends a clear message: willful violators of U.S. arms export control regulations will be pursued and punished. The successful resolution of this case is the byproduct of the tireless work of our compliance officers and highlights the relentless commitment of the State Department to protect sensitive American technologies from being illegally transferred.”
U.S. Attorney Fein commended the many agencies involved in this investigation, including ICE’s Homeland Security Investigations (HSI) in New Haven; the DCIS in New Haven; the New Haven Division of the FBI; the Department of Commerce’s Boston Office of Export Enforcement. He also praised the Office of the HSI Attaché in Toronto, which was essential to the initiation and investigation of this matter, and the State Department’s Office of Defense Trade Controls Compliance in the Bureau of Political-Military Affairs, for its critical role in the global resolution of this matter.
The prosecution is being handled by Assistant U.S. Attorneys Stephen B. Reynolds and Michael J. Gustafson from the U.S. Attorney’s Office for the District of Connecticut, with assistance from Steven Pelak and Ryan Fayhee of the Counterespionage Section of the Justice Department’s National Security Division.
U.S. and Canada Announce the Release of the Beyond the Border: Statement of Privacy PrinciplesRead the Press Release
WASHINGTON—The United States and Canada today announced they are delivering on key commitments under the U.S.-Canada Beyond the Border Action Plan by releasing a joint Statement of Privacy Principles. These principles reflect the commitment of the United States and Canada to protecting privacy, and underscore the importance of information sharing to the security of both nations.“These privacy principles reflect the shared commitment of the United States and Canada to implement our Beyond the Border Action Plan,” said Attorney General Eric Holder. “Timely and efficient information sharing between the United States and Canada is critical to the national security of both nations. These principles reflect our two nations’ continued shared commitment to protecting our collective security without sacrificing the fundamental rights and civil liberties that both our countries value.”
“The release of these principles is an important milestone in the implementation of the Beyond the Border Action Plan,” said Secretary of Homeland Security Janet Napolitano. “They represent both the United States’ and Canada’s commitment to sharing information, while simultaneously protecting the fundamental privacy principles upon which both our nations were built ”
The Statement of Privacy Principles concerning the provision, receipt and use of personal information exchanged between the U.S. and Canada will inform and guide all information sharing arrangements and initiatives under Beyond the Border Action Plan. Implementing the privacy principles will promote the flow of accurate, relevant and necessary information to address shared threats to national security.
Developed collaboratively by privacy officials from the Department of Homeland Security, the Department of Justice, Public Safety Canada and Justice Canada, the privacy principles are based on commonly understood privacy protections and fair information practices; and are consistent with the laws of each country
The United States and Canada will collaborate regularly, through the Beyond the Border Executive Steering Committee and other avenues, on the application of the Statement of Privacy Principles.
On Feb. 4, 2011, President Obama and Prime Minister Harper announced the U.S.-Canada joint declaration, Beyond the Border: A Shared Vision for Perimeter Security and Economic Competitiveness. It articulates a shared vision where both our countries work together to address threats at the earliest point possible, while facilitating the legitimate movement of people, goods and services into our countries and across our shared border.
The Beyond the Border Action Plan consists of 32 separate initiatives. It calls for enhancements to programs that help trusted businesses and travelers move efficiently across the border; introduces new measures to facilitate movement and trade across the border while reducing the administrative burden for business; and invests in improvements to our shared border infrastructure and technology. By expediting lawful trade and commerce into and across our shared border, the United States and Canada seek to enhance our economic competitiveness, create jobs and support economic growth.
For more information, please visit www.dhs.gov or www.justice.gov.
Two Alabama Real Estate Investors and Their Company Indicted for Conspiracies to Rig Bids and Commit Mail Fraud for thePurchase of Real Estate at Public Foreclosure AuctionsRead the Press Release
A federal grand jury in Mobile, Ala., returned an indictment today against two real estate investors and their company, charging them with participating in conspiracies to rig bids and commit mail fraud at public real estate foreclosure auctions held in southern Alabama, the Department of Justice announced today.
The department said the father and son real estate investors, Robert M. Brannon of Laurel, Miss., and Jason R. Brannon of Mobile, respectively, and their Mobile-based company, J & R Properties LLC, conspired with others not to bid against one another at public real estate foreclosure auctions in southern Alabama. The indictment, returned in the U.S. District Court for the Southern District of Alabama, charges that after a designated bidder bought a property at a public auction, which typically takes 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.
The Brannons and J & R Properties were 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. Jason Brannon, Robert Brannon and J & R Properties are charged with participating in the bid-rigging and mail fraud schemes from as early as October 2004 until at least August 2007.
“Today’s indictment underscores the commitment of the Antitrust Division to prosecute those who illegally profit on the real estate market at the expense of distressed homeowners,” said Scott D. Hammond, Deputy Assistant Attorney General of the Antitrust Division’s Criminal Enforcement Program. “The division will pursue vigorously those who engage in collusive schemes to eliminate competition in the marketplace.”
FBI Acting Special Agent in Charge Patrick Kiernan reaffirmed 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.”
Each violation of the Sherman Act carries a maximum penalty of 10 years in prison and a $1 million fine for individuals, and a $100 million fine for companies. 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 victim 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 of $250,000 for individuals, and a fine of $500,000 for companies. The fine may be increased to 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. To date, five individuals—Harold H. Buchman, Allen K. French, Bobby Threlkeld Jr., Steven J. Cox and Lawrence B. Stacy—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. 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 Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency task force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets and recover proceeds for victims of financial crimes. For more information on the task force, visit www.StopFraud.gov.
Statement of Attorney General Eric Holder<br /> on the U.S. House of Representatives VoteRead the Press Release
Attorney General Eric Holder issued the following statement today:
“Today’s vote is the regrettable culmination of what became a misguided – and politically motivated – investigation during an election year. By advancing it over the past year and a half, Congressman Issa and others have focused on politics over public safety. Instead of trying to correct the problems that led to a series of flawed law enforcement operations, and instead of helping us find ways to better protect the brave law enforcement officers, like Agent Brian Terry, who keep us safe – they have led us to this unnecessary and unwarranted outcome.
“During this time, the men and women of the Department of Justice – and I – have remained focused on what should and must be our government’s top priority: protecting the American people.
“When concerns about Operation Fast and Furious first came to light, I took action – and ordered an independent investigation into what happened. We learned that the flawed tactics used in this operation began in the previous administration – but I made sure that they ended under this one. I also made sure that agents and prosecutors around the country knew that such tactics must never be used again. I put in place new policies, new safeguards, and new leadership to make certain of this – and took extraordinary steps to facilitate robust congressional oversight. Let me be very clear – that was my response to Operation Fast and Furious. Any suggestion to the contrary simply ignores the facts.
“I had hoped that Congressional leaders would be good-faith partners in this work. Some have. Others, however, have devoted their time and attention to making reckless charges – unsupported by fact – and to advancing truly absurd conspiracy theories. Unfortunately, these same members of Congress were nowhere to be found when the Justice Department and others invited them to help look for real solutions to the terrible problem of violence on both sides of our Southwest Border. That’s tragic, and it’s irresponsible. The problem of drugs and weapons trafficking across this border is a real and significant public safety threat – and it deserves the attention of every leader in Washington.
“In the face of these and other challenges, the Justice Department has continued to move forward in fulfilling its critical law enforcement responsibilities. Whether it is with regard to prosecuting financial and health care fraud, achieving a record mortgage settlement, taking aggressive action in protecting the most vulnerable among us, or challenging proposed voting changes and redistricting maps that could disenfranchise millions of voters – this Department of Justice has not been afraid to act.
“Some of these enforcement decisions were not politically popular and help to explain the action taken today by the House. As Attorney General, I do not look to do that which is politically expedient – on behalf of the American people whom I am privileged to serve, I seek justice.
“In recent weeks, the Justice Department secured its seventh conviction in the most serious terrorist plot our nation has faced since 9/11. And just two days ago, the Department awarded more than $100 million in grants to save or create law enforcement jobs, including more than 600 jobs for recent veterans.
“This is the kind of work that leaders in Washington should be striving together to advance. At a time when so many Americans are in need of our help, I refuse to be deterred from it. And I will not let election-year politics and gamesmanship stand in the way of continued progress.
“Today’s vote may make for good political theater in the minds of some, but it is – at base – both a crass effort and a grave disservice to the American people. They expect – and deserve – far better.
“As a result of the action taken today by the House, an unnecessary court conflict will ensue. My efforts to resolve this matter short of such a battle were rebuffed by Congressman Issa and his supporters. It’s clear that they were not interested in bringing an end to this dispute or obtaining the information they claimed to seek. Ultimately, their goal was the vote that – with the help of special interests – they now have engineered.
“Whatever the path that this matter will now follow, it will not distract me or the men and women of the Department of Justice from the important tasks that are our responsibility. A great deal of work for the American people remains to be done – I’m getting back to it. I suggest that those who orchestrated today’s vote do the same."
Miami-Area Patient Recruiters Sentenced to Prison for Roles in $200 Million Medicare Fraud SchemeRead the Press Release
Two Miami-area patient recruiters were sentenced to 84 months and 63 months in prison, respectively, for recruiting Medicare beneficiaries as part of a $200 million Medicare fraud scheme, the Department of Justice, the FBI and the Department of Health and Human Services announced today.
James Edwards was sentenced today to 84 months in prison and three years of supervised release and Nelson Fernandez was sentenced yesterday to 63 months in prison and three years of supervised release. In addition, Fernandez was sentenced to pay $13.1 million in restitution, joint and several with co-conspirators, and Edwards was sentenced to pay $4.1 million in restitution, joint and several with co-conspirators. Edwards and Fernandez were both sentenced by U.S. District Judge Patricia A. Seitz.
Fernandez, 43, pleaded guilty to the scheme on Aug. 2, 2011, and Edwards, 65, pleaded guilty on July 13, 2011. Both admitted to serving as patient brokers for American Therapeutic Corporation (ATC). ATC, its management company, Medlink Professional Management Group Inc., and a related company, the American Sleep Institute (ASI), were Florida corporations headquartered in Miami. ATC operated purported partial hospitalization programs (PHPs) in seven different locations throughout South Florida and Orlando. A PHP is a form of intensive treatment for severe mental illness. ASI purported to provide diagnostic sleep disorder testing.According to court documents, Fernandez and Edwards recruited patients to attend ATC’s PHP program in exchange for per patient, per day kickbacks. Based on their recruiting, Fernandez admitted to causing $8 million in fraudulent submissions to Medicare and Edwards admitted to causing $8.16 in fraudulent bills to Medicare. Both Fernandez and Edwards admitted that they knew the patients they recruited for ATC were not qualified to receive PHP treatment. Both men also admitted to recruiting ineligible patients for ASI’s sleep studies. Fernandez additionally admitted to causing $14.7 million in fraudulent bills to Medicare in a separate home health services scheme in which he used some of the same patients that he brokered to ATC. Edwards additionally admitted to causing $4.1 million in fraudulent bills to Medicare in a separate PHP scheme.
According to court filings, ATC’s owners and operators paid millions of dollars in kickbacks to owners and operators of assisted living facilities and halfway houses and to patient brokers in exchange for delivering ineligible patients to ATC and ASI. In some cases, the patients received a portion of those kickbacks. According to court filings, to obtain the cash required to support the kickbacks, the co-conspirators laundered millions of dollars of payments from Medicare. According to court filings and evidence admitted at trials of co-defendants, ATC and ASI also did not provide the treatment billed to Medicare and co-conspirators fabricated documents in patient files to hide the ineligible patients and inappropriate treatment.
ATC, Medlink, and various owners, managers, doctors, therapists, patient brokers and marketers of ATC, Medlink and ASI, were charged with various health care fraud, kickback, money laundering and other offenses in two indictments unsealed on Feb. 15, 2011. ATC, Medlink and 19 of the individual defendants have pleaded guilty or have been convicted at trial. Other defendants are scheduled for trial on Oct. 22, 2012, before Judge Seitz. A defendant is presumed innocent unless proven guilty beyond a reasonable doubt in a court of law.
The sentences were announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida; Xanthi C. Mangum, Acting Special Agent-in-Charge of the FBI’s Miami Field Office; and Special Agent-in-Charge Christopher Dennis of the HHS Office of Inspector General (HHS-OIG), Office of Investigations Miami office.
The criminal case is being prosecuted by Trial Attorneys Jennifer L. Saulino, Robert Zink, and James Hayes of the Criminal Division’s Fraud Section. A related civil action is being handled by Vanessa I. Reed and Carolyn B. Tapie of the Civil Division. The case was investigated by the FBI and HHS-OIG, and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida.
Since their inception in March 2007, Medicare Fraud Strike Force operations in nine locations have charged more than 1,330 defendants who collectively have falsely billed the Medicare program for more than $4 billion. In addition, the HHS Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.Department of Justice Forfeits More Than $400,000 <br /> in Corruption Proceeds Linked to Former Nigerian GovernorRead the Press Release
WASHINGTON – The Department of Justice has forfeited $401,931 in assets traceable to Diepreye Solomon Peter Alamieyeseigha, a former Governor of Bayelsa State, Nigeria, Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Immigration and Customs Enforcement (ICE) Director John Morton announced today.Alamieyeseigha was the elected governor of the oil-producing Bayelsa State in Nigeria from 1999 until his impeachment in 2005. As alleged in the U.S. forfeiture complaint, Alamieyeseigha’s official salary for this entire period was approximately $81,000, and his declared income from all sources during the period was approximately $248,000. However, while governor, Alamieyeseigha accumulated millions of dollars worth of property located around the world through corruption and other illegal activities. After his impeachment in Nigeria, Alamieyeseigha pleaded guilty in Nigeria for, among other things, failure to disclose a bank account in Florida and also pleaded guilty on behalf of his shell companies to money laundering violations. As further alleged in the complaint, the funds forfeited were held in an investment account in Boston that was fraudulently opened in the name of Nicholas Aiyegbemi and were traceable to the undisclosed Alamieyeseigha account in Florida.
On June 13, 2012, U.S. District Court Judge Rya W. Zobel of the District of Massachusetts granted a motion for a default judgment and forfeiture order filed by the Criminal Division’s Asset Forfeiture and Money Laundering Section. This forfeiture order was executed today and allows the United States to dispose of the forfeited funds in accordance with federal law.
“With a declared income of less than $250,000, Mr. Alamieyeseigha accumulated millions of dollars worth of property over a six-year period,” said Assistant Attorney General Breuer. “Today’s announcement – the first forfeiture judgment obtained under our Kleptocracy Asset Recovery Initiative – sends a powerful message about the United States’ commitment to rooting out corruption far and wide. Foreign corrupt officials are on notice that we will not permit them to stash their corruption proceeds on American soil.”
“This investigation was initiated by ICE’s Homeland Security Investigations (HSI) Asset Identification & Removal Group (AIRG) in Baltimore, in an effort to recover Diepreye Solomon Peter Alamieyeseigha’s assets after he was convicted of money laundering offenses in Nigeria,” said ICE Director Morton. “HSI’s AIRG will continue working with the Department of Justice to aggressively seek to recover illicit proceeds gained through foreign corruption and to protect the U.S. financial system from being utilized by criminals.”
This is the first forfeiture judgment obtained under 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.
In a separate pending civil forfeiture case filed in the District of Maryland, the Justice Department is seeking forfeiture of additional property traceable to Alamieyeseigha, a private residence worth more than $600,000 in Rockville, Md. The complaint alleges that the property was involved in money laundering.
The case was prosecuted by Assistant Deputy Chief Daniel H. Claman and Trial Attorney Tracy Mann of the Criminal Division’s Asset Forfeiture and Money Laundering Section. Additional assistance was provided by the Assistant U.S. Attorney Mary Murrane of the District of Massachusetts. The case was investigated by ICE’s HSI AIRG in Baltimore.
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].
Wednesday 27 June 2012
Texas Resident Convicted on Charge of Attempted Use of <br /> Weapon of Mass DestructionRead the Press Release
Khalid Ali-M Aldawsari, 22, a citizen of Saudi Arabia and resident of Lubbock, Texas, was convicted by a federal jury today on an indictment charging one count of attempted use of a weapon of mass destruction in connection with his purchase of chemicals and equipment necessary to make an improvised explosive device (IED) and his research of potential U.S. targets, including persons and infrastructure.
The verdict, which was reached in the Northern District of Texas, was announced by Sarah R. Saldaña , U.S. Attorney for the Northern District of Texas; Lisa Monaco, Assistant Attorney General for National Security; and Diego G. Rodriguez, Special Agent in Charge of the FBI Dallas Field Division.
Sentencing has been scheduled for October 9, 2012, in Amarillo. Aldawsari, who was lawfully admitted into the United States in 2008 on a student visa and was enrolled at South Plains College near Lubbock, faces a maximum sentence of life in prison and a $250,000 fine. He was arrested on Feb. 23, 2011 on a criminal complaint and later charged in a March 9, 2011 federal indictment with attempting to use a weapon of mass destruction.
According to court documents and evidence presented during trial, at the time of his arrest last year, Aldawsari had been researching online how to construct an IED using several chemicals as ingredients. He had also acquired or taken a substantial step toward acquiring most of the ingredients and equipment necessary to construct an IED and he had conducted online research of several potential U.S. targets, the affidavit alleges. In addition, he had allegedly described his desire for violent jihad and martyrdom in blog postings and a personal journal.
“While many people are responsible for thwarting Aldawsari’s threat and bringing him to justice, we owe a debt of gratitude to all the members of the North Texas Joint Terrorism Task Force, and especially to the hundreds of hard-working and dedicated FBI agents, analysts, linguists and others,” said U.S. Attorney Saldaña. “Their efforts, coupled with the hard work and excellent cooperation from the Lubbock Police Department and the Texas Tech Police Department, are the reason we were able to stop this defendant from carrying out a catastrophic act of terrorism.”
“As this trial demonstrated, Aldawsari purchased ingredients to construct an explosive device and was actively researching potential targets in the United States. Thanks to the efforts of many agents, analysts and prosecutors, this plot was thwarted before it could advance further,” said Assistant Attorney General Monaco. “This case serves as another reminder of the need for continued vigilance both at home and abroad.”
“ Today’s guilty verdict shows how individuals in the United States with the intent to do harm can acquire the knowledge and materials necessary to carry out an attack,” said SAC Rodriguez. “Our success in locating and preventing Mr. Aldawsari from carrying out an attack is a result of cooperation within the law enforcement and intelligence communities, particularly, the North Texas Joint Terrorism Task Force, the Texas Tech Police Department, the Lubbock Police Department, and the Lubbock County Sheriff’s Office, but also a demonstration of information sharing across FBI divisions, as well as assistance from the community. I want to thank the dedicated agents, officers and analysts, the computer forensics team and linguists that worked diligently on this investigation as well as prosecutors serving in the U.S. Attorney’s Office in the Northern District.”
The government presented evidence that on Feb. 1, 2011, a chemical supplier reported to the FBI a suspicious attempted purchase of concentrated phenol by a man identifying himself as Khalid Aldawsari. Phenol is a toxic chemical with legitimate uses, but can also be used to make the explosive trinitrophenol, also known as T.N.P., or picric acid. Ingredients typically used with phenol to make picric acid, or T.N.P., are concentrated sulfuric and nitric acids.
Aldawsari attempted to have the phenol order shipped to a freight company so it could be held for him there, but the freight company told Aldawsari that the order had been returned to the supplier and called the police. Later, Aldawsari falsely told the supplier he was associated with a university and wanted the phenol for “off-campus, personal research.” Frustrated by questions being asked over his phenol order, Aldawsari cancelled his order, placed an order with another company, and later emailed himself instructions for producing phenol. In December 2010, he had successfully purchased concentrated nitric and sulfuric acids.
Aldawsari used various email accounts in researching explosives and targets, and often sent emails to himself as part of this process. He emailed himself a recipe for picric acid, which was described in the email as a “military explosive” and also emailed himself instructions on how to convert a cell phone into a remote detonator and how to prepare a booby-trapped vehicle using household items. Aldawsari also purchased many other items, including a Hazmat suit, a soldering iron kit, glass beakers and flasks, a stun gun, clocks and a battery tester.
Excerpts from a journal found at Aldawsari’s residence indicated that he had been planning to commit a terrorist attack in the United States for years. One entry describes how Aldawsari sought and obtained a particular scholarship because it allowed him to come directly to the United States and helped him financially, which he said “will help tremendously in providing me with the support I need for Jihad.” The entry continues: “And now, after mastering the English language, learning how to build explosives and continuous planning to target the infidel Americans, it is time for Jihad.”
In another entry, Aldawsari wrote that he was near to reaching his goal and near to getting weapons to use against infidels and their helpers. He also listed a “synopsis of important steps” that included obtaining a forged U.S. birth certificate; renting a car; using different driver’s licenses for each car rented; putting bombs in cars and taking them to different places during rush hour; and leaving the city for a safe place.
Aldawsari conducted research on various targets and e-mailed himself information on these locations and people. One of the documents he sent himself, with the subject line listed as “Targets,” contained the names and home addresses of three American citizens who had previously served in the U.S. military and had been stationed for a time at Abu Ghraib prison in Iraq. In others, Aldawsari sent himself the names of 12 reservoir dams in Colorado and California and listed two categories of targets: hydroelectric dams and nuclear power plants. He also sent himself an email titled “Tyrant’s House,” in which he listed the Dallas address for former President George W. Bush. Aldawsari also conducted research that indicated he considered using infant dolls to conceal explosives and the possible targeting of a nightclub with an explosive concealed in a backpack.
This case was investigated by the FBI’s Dallas Joint Terrorism Task Force, with assistance from the Lubbock Police Department and the Texas Tech Police Department. The prosecution is being handled by Assistant U.S. Attorneys Jeffrey R. Haag, Denise Williams, James T. Jacks and Matthew J. Kacsmaryk and Trial Attorney David Cora from the Counterterrorism Section of the Justice Department’s National Security Division.
Oregon Man Sentenced in Boston to 36 Months in Prison for<br /> Helping Thousands Steal Internet ServiceRead the Press Release
WASHINGTON – A Redmond, Ore., man was sentenced today to 36 months in prison for his participation in a scheme to help thousands steal internet service, Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney Carmen Ortiz of the District of Massachusetts announced.
Ryan Harris, 29, was sentenced by Chief U.S. District Judge Mark L. Wolf in the District of Massachusetts. In addition to his prison term, Harris was sentenced to three years of supervised release. He was also ordered to pay a $50,000 fine and $152,370 in restitution. Harris was convicted by a jury on March 1, 2012, of seven counts of wire fraud.
The evidence presented at trial established that Harris was the owner of TCNISO, a company that distributed products enabling users to steal Internet service. From 2003 through 2009, Harris developed and distributed hardware and software tools that allowed his customers to modify their cable modems so that they could disguise themselves as paying subscribers and obtain Internet service without paying. The products included a “packet sniffer,” which Harris dubbed “Coax Thief.” “Coax Thief” surreptitiously intercepted (or “sniffed”) Internet traffic so that the user obtained the media access control addresses and configuration files of surrounding modems. TCNISO and Harris also offered ongoing customer support, primarily through forums hosted on the TCNISO website, to assist customers in their cable modem hacking activities. Harris gained $400,000 to $1 million in sales revenue.
The case was investigated by the Boston Field Offices of the FBI and the Internal Revenue Service-Criminal Investigation and was prosecuted by Trial Attorney Mona Sedky of the Computer Crime & Intellectual Property Section in the Justice Department’s Criminal Division and Assistant U.S. Attorney Adam J. Bookbinder of the District of Massachusetts’s Computer Crimes Unit.
Operator of Payroll Companies Charged in North Carolina<br /> <br /> with Federal Fraud and Money Laundering CrimesRead the Press Release
Arthur S. Weiss was indicted by a grand jury for tax fraud, wire fraud, mail fraud, bank loan fraud, money laundering and bankruptcy fraud, the Justice Department and Internal Revenue Service (IRS) announced today. The indictment was returned yesterday in the Middle District of North Carolina.
According to the indictment, Weiss operated professional employer organizations (PEOs), which provided payroll-related services to client companies. For his client companies, Weiss agreed to pay the employees, withhold and remit federal and state taxes, prepare and file the federal and state employment tax returns, and provide workers compensation insurance (WCI). Weiss did pay the employees and withhold the employment taxes, but he failed to remit the employment taxes, keeping them for his personal use.
From 2004 to 2011, Weiss failed to file employment tax returns and failed to pay over to the IRS employment taxes of over $4 million. In addition, Weiss collected WCI premiums from his clients but failed to obtain adequate WCI protection, and diverted WCI premiums for his personal use.
The indictment also alleges that Weiss used a portion of his fraud proceeds to purchase expensive jewelry. During a trip to Europe, Weiss fraudulently reported four pieces of jewelry lost or stolen, and received $177,480 from his insurance company. The jewelry was later seized during a search at his former residence in Marion, N.C.
According to the indictment, Weiss also committed bank loan fraud. In order to receive four loans from a bank, Weiss provided numerous personal income tax returns to the bank. Each of the returns Weiss provided to the bank included significantly greater income than the returns actually filed with the IRS. The indictment also alleges that Weiss filed two false personal income tax returns, and lied under oath in his bankruptcy proceeding.
Each of the 13 wire fraud, 10 mail fraud and four bank loan fraud counts against Weiss carries a maximum of 30 years in prison upon conviction. Weiss faces a maximum potential prison sentence of 10 years upon conviction for each of the two money-laundering counts. The bankruptcy fraud count carries a maximum sentence of five years. As to the tax charges, the count of corrupt interference with the Internal Revenue laws and each count of filing a false tax return carry a maximum of three years imprisonment upon conviction. Each of the 33 charges alleged in the indictment also carries a maximum $250,000 fine upon conviction.
The case was investigated by IRS-Criminal Investigation, the FBI and the North Carolina Industrial Commission’s Fraud Unit. The case is being prosecuted by Assistant U.S. Attorney Clifton Barrett and Trial Attorney Todd Ellinwood of the Justice Department’s Tax Division.
An indictment is a formal accusation of criminal conduct, not evidence. A defendant is presumed innocent unless convicted through due process of law.
Miami-Area Resident Pleads Guilty toParticipating in $63 Million Medicare Fraud SchemeRead the Press Release
WASHINGTON – A Miami-area resident pleaded guilty today in U.S. District Court in Miami for her role in a health care fraud scheme that resulted in the submission of more than $63 million in fraudulent claims to Medicare and Medicaid, announced the Department of Justice, the FBI and the Department of Health and Human Services (HHS).
Sarah Da Silva Keller, 27, pleaded guilty before U.S. District Judge Marcia G. Cooke in Miami to one count of conspiracy to commit health care fraud. Keller admitted to participating in a fraud scheme that was orchestrated by the owner and operators of Health Care Solutions Network (HCSN), which operated purported partial hospitalization programs (PHPs), a form of intensive mental health treatment for severe mental illness.
According to an indictment unsealed on May 2, 2012, HCSN paid kickbacks to owners and operators of assisted living facilities in exchange for referring Medicare beneficiaries to HCSN for PHP treatment that was unnecessary and, in many instances, not provided. According to court documents, Keller admitted that she falsified records at the direction of others so that HCSN could bill Medicare for patients who did not receive the services from HCSN. Keller knew that the falsification of these records was part of a plan for HCSN to commit health care fraud.
At sentencing, scheduled for Oct. 17, 2012, Keller faces a maximum of 10 years in prison and a $250,000 fine for each count.
Nine other charged defendants, including the owner and operators of HCSN, await trial before U.S. District Judge Cecilia M. Altonaga. Defendants are presumed innocent until proven guilty at trial.
Today’s guilty plea was announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida; Xanthi C. Mangum, Acting Special Agent-in-Charge of the FBI’s Miami Field Office; and Special Agent-in-Charge Christopher B. Dennis of the HHS Office of Inspector General (HHS-OIG), Office of Investigations Miami office.
The case is being prosecuted by Trial Attorneys Steven Kim, William Parente and Allan Medina of the Criminal Division’s Fraud Section. The case was investigated by the FBI, HHS-OIG and Medicaid Fraud Control Unit and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida.
Since their inception in March 2007, Medicare Fraud Strike Force operations in nine locations have 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, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.
Justice Department Announces Lawsuit to Protect Rights of Military and Overseas Voters in GeorgiaRead the Press Release
The Justice Department announced today that it has filed a lawsuit against the state of Georgia and its chief election official seeking relief to help ensure that military service members, their family members and U.S. citizens living overseas have the opportunity to participate fully in Georgia’s Aug. 21, 2012, federal primary runoff election and all future federal runoff elections.
The lawsuit, brought under the Uniformed and Overseas Citizens Absentee Voting Act (UOCAVA), was filed in federal district court in Atlanta. The lawsuit alleges that Georgia’s procedures are inadequate to ensure that its eligible military and overseas voters can participate fully in the state’s Aug. 21, 2012, federal primary runoff election, should one be necessary. The lawsuit seeks an order requiring Georgia to take all steps necessary to ensure that all affected UOCAVA voters are afforded a full opportunity to participate in the upcoming federal primary runoff election and all future federal elections.
“Our uniformed service members and overseas citizens deserve a full opportunity to participate in all elections of our nation’s leaders including runoff elections for federal office in states where they are held” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “This suit seeks relief to ensure that Georgia’s military and overseas voters, many of whom are members of our armed forces and their families serving our country around the world, will be provided the opportunity guaranteed by UOCAVA to receive, mark and return their ballots in the upcoming primary runoff election, as well as all future federal runoff elections.”
“We are committed to protecting the right of Georgia service members, including those serving our country overseas, to vote in our elections,” said Sally Quillian Yates, U.S. Attorney for the Northern District of Georgia.
UOCAVA requires states to allow uniformed services voters (serving both overseas and within the United States) and their families and overseas citizens to register to vote and to vote absentee for all elections for federal office. In 2009, Congress enacted the Military and Overseas Voter Empowerment (MOVE) Act, which made broad amendments to UOCAVA. Among those changes was a requirement that states transmit absentee ballots to voters covered under UOCAVA, by mail or electronically at the voter’s option, no later than 45 days before federal elections.
The action was necessary because under Georgia’s election calendar official runoff election ballots will not be available to be sent until after UOCAVA’s deadline of July 7, 2012, the 45th day before this year’s primary runoff election. The requested relief will help ensure that Georgia’s service members and overseas voters will be able to have their votes counted in the upcoming primary runoff election, and that the right UOCAVA provides to be sent a ballot 45 days in advance of an election is guaranteed in all future runoff elections for federal office.
More information about UOCAVA and other federal voting laws is available on the Department of Justice website at www.justice.gov/crt/about/vot/misc/activ_uoc.php. Complaints may be reported to the Voting Section of the Justice Department’s Civil Rights Division at 1-800-253-3931.
Related Materials:
Complaint
PI MotionFormer Peace Corps Volunteer Pleads Guilty in Connecticut to Sexually Abusing Children in South AfricaRead the Press Release
WASHINGTON – A Milford, Conn., man pleaded guilty today in Hartford to sexually abusing four minor girls while he was a volunteer with the U.S. Peace Corps in South Africa, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney David B. Fein of the District of Connecticut, Peace Corps Director Aaron S. Williams and Special Agent in Charge Bruce M. Foucart of the U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI) in New England.
Jesse Osmun, 32, pleaded guilty before Chief U.S. District Judge Alvin W. Thompson to one count of traveling from the United States to South Africa and engaging in illicit sexual conduct with children.
“While serving as a Peace Corps volunteer in South Africa, Mr. Osmun committed horrific, unforgivable crimes,” said Assistant Attorney General Breuer. “He was supposed to be helping young children in need, many of whom were orphans, but instead, he preyed upon them, sexually abusing several young girls under the age of six. He betrayed the Peace Corps and the children he had traveled to South Africa to help. For his predatory conduct, he faces up to 30 years in prison.”
“Our investigation demonstrated that this defendant sexually abused young girls while he served as a Peace Corps volunteer in South Africa,” said U.S. Attorney Fein. “This was a reprehensible crime, an extraordinary abuse of trust and an unconscionable violation of the Peace Corps mission. I commend the Peace Corps Office of Inspector General (OIG), ICE Homeland Security Investigations and the South African Police Service for their prompt and thorough investigation of child sexual abuse. Their efforts undoubtedly protected children from future harm and removed a dangerous child predator from society.”
“The crimes of this former volunteer are reprehensible,” said Peace Corps Director Williams. “The Peace Corps has no tolerance for abuse of any kind, and our deepest sympathies are with all the victims involved. I am thankful to the Peace Corps OIG, the Department of Justice, ICE Homeland Security Investigations and the South African Police Service for conducting a well coordinated investigation that brought about swift justice in this case. The Peace Corps is committed to ensuring that the children affected by these crimes receive proper care and treatment.”
“This investigation represents the very essence of the determination of federal, state and local law enforcement authorities to capture and prosecute an individual whose primary objective was to sexually abuse vulnerable children,” said HSI Special Agent in Charge Foucart. “I hope that this guilty plea sends a clear message that we will continue to aggressively pursue individuals who engage in this behavior to ensure that there is no place to hide here in the United States or anywhere in the world. I want to thank our partners at the U.S. attorney's office for their tireless efforts and collaboration in this investigation.”
According to court documents and statements made in court, Osmun was sworn in as a Peace Corps volunteer in March 2009 and began his service at a non-governmental organization (NGO) in South Africa that provides education, food and other services to children, many of whom are orphans. In May 2011, Osmun resigned from the Peace Corps after being confronted by the program director of the NGO with allegations of sexual abuse. He returned to the United States on June 2, 2011. Shortly thereafter, Peace Corps OIG and ICE HSI agents, working with members of the South African Police Services, began investigating the allegations of abuse.
According to court documents, the investigation revealed that, while volunteering at the NGO, Osmun enticed four young girls, all of whom were under the age of six, to engage in illicit sexual conduct with him. Osmun persuaded the children to engage in this conduct by playing games with them and providing them with candy. Osmun sexually abused one of the victims approximately two times a week over the course of approximately five months.
On Aug. 4, 2011, Osmun was arrested at his home in Milford. He has been detained since his arrest.
Judge Thompson scheduled sentencing for Sept. 19, 2012. Osmun faces a maximum sentence of 30 years in prison and a fine of up to $250,000.
U.S. Attorney Fein noted that the government is seeking restitution from the defendant, and that the Department of Justice, the Peace Corps and the U.S. Embassy in South Africa are working together to ensure that a fund will be available to provide assistance to the victims in this case.
“Supporting victims of child exploitation is a priority for this United States Attorney’s Office and for the Department of Justice,” said U.S. Attorney Fein. “Our work does not end with the apprehension and conviction of those who sexually exploit children but extends appropriately to the welfare of the child victims.”
This case is being investigated by the Peace Corps OIG and ICE HSI. Investigative assistance has been provided by members of the South African Police Service Directorate for Priority Crime Investigations; ICE’s attaché office in Pretoria, South Africa; the ICE Cybercrimes Center in Fairfax, Va.; the U.S. Department of State’s regional security office in Durban, South Africa; and the South Africa National Prosecuting Authority. The case is being prosecuted by U.S. Attorney David B. Fein, Assistant U.S. Attorney Krishna R. Patel and Trial Attorney Bonnie Kane of the Child Exploitation and Obscenity Section in the Justice Department’s Criminal Division.
Federal Court Shuts Down South Florida Tax Return PreparerRead the Press Release
A federal court in Miami has permanently barred Kenia Marrero of Miami, and her company, Kenia Immigration Services, from preparing federal tax returns for others, the Justice Department announced today. The civil injunction order, to which Marrero consented without admitting the allegations against her, was signed by Judge José E. Martinez of the U.S. District Court for the Southern District of Florida.
The government complaint in the case alleged that Marrero prepared federal income tax returns for customers that fraudulently understated their tax liabilities by using fabricated deductions, business expenses, and first-time-homebuyer credits. The complaint alleged that Marrero offered immigration services, including obtaining work permits and visas, and used that customer base to obtain tax-preparation customers. According to the complaint, the harm to the United States from Marrero’s misconduct could be as much as $1.4 million.
The Internal Revenue Service lists return preparer fraud as one of the Dirty Dozen Tax Scams for 2012 . In the past decade the Justice Department’s Tax Division has obtained hundreds of injunctions to stop the promotion of tax-fraud schemes and the preparation of fraudulent returns. More information about these cases is available on the Justice Department website .
Barclays Bank PLC Admits Misconduct Related to Submissions for the London Interbank Offered Rate and the Euro Interbank Offered Rate and Agrees to Pay $160 Million PenaltyRead the Press Release
WASHINGTON – Barclays Bank PLC, a financial institution headquartered in London, has entered into an agreement with the Department of Justice to pay a $160 million penalty to resolve violations arising from Barclays’s submissions for the London InterBank Offered Rate (LIBOR) and the Euro Interbank Offered Rate (EURIBOR), which are benchmark interest rates used in financial markets around the world, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and Assistant Director in Charge James W. McJunkin of the FBI’s Washington Field Office.
As part of the agreement with the Department of Justice, Barclays has admitted and accepted responsibility for its misconduct set forth in a statement of facts that is incorporated into the agreement. According to the agreement, Barclays provided LIBOR and EURIBOR submissions that, at various times, were false because they improperly took into account the trading positions of its derivative traders, or reputational concerns about negative media attention relating to its LIBOR submissions. The Justice Department’s criminal investigation into the manipulation of LIBOR and EURIBOR by other financial institutions and individuals is ongoing. The agreement requires Barclays to continue cooperating with the department in its ongoing investigation.
“LIBOR and EURIBOR are critically important benchmark interest rates,” said Assistant Attorney General Breuer. “Because mortgages, student loans, financial derivatives, and other financial products rely on LIBOR and EURIBOR as reference rates, the manipulation of submissions used to calculate those rates can have significant negative effects on consumers and financial markets worldwide. For years, traders at Barclays encouraged the manipulation of LIBOR and EURIBOR submissions in order to benefit their financial positions; and, in the midst of the financial crisis, Barclays management directed that U.S. Dollar LIBOR submissions be artificially lowered. For this illegal conduct, Barclays is paying a significant price. To the bank’s credit, Barclays also took a significant step toward accepting responsibility for its conduct by being the first institution to provide extensive and meaningful cooperation to the government. Its efforts have substantially assisted the Criminal Division in our ongoing investigation of individuals and other financial institutions in this matter.”
“Barclays Bank’s illegal activity involved manipulating its submissions for benchmark interest rates in order to benefit its trading positions and the media’s perception of the bank’s financial health,” said Assistant Director in Charge McJunkin. “Today’s announcement is the result of the hard work of the FBI Special Agents, financial analysts and forensic accountants as well as the prosecutors who dedicated significant time and resources to investigating this case.”
Barclays was one of the financial institutions that contributed rates used in the calculation of LIBOR and EURIBOR. The contributed rates are generally meant to reflect each bank’s assessment of the rates at which it could borrow unsecured interbank funds. For LIBOR, the highest and lowest 25% of contributed rates are excluded from the calculation and the remaining rates are averaged to calculate the fixed rates. For EURIBOR, the highest and lowest 15% are excluded and the remaining 70% are averaged to calculate the fixed rates.
Futures, options, swaps, and other derivative financial instruments traded in the over-the-counter market and on exchanges worldwide are settled based on LIBOR. Further, mortgages, credit cards, student loans and other consumer lending products often use LIBOR as a reference rate. According to the agreement, an individual bank’s LIBOR or EURIBOR submission cannot appropriately be influenced by the financial positions of its derivatives traders or the bank’s concerns about public perception of its financial health due to its LIBOR submissions.
According to the agreement, between 2005 and 2007, and then occasionally thereafter through 2009, certain Barclays traders requested that the Barclays LIBOR and EURIBOR submitters contribute rates that would benefit the financial positions held by those traders. The requests were made by traders in New York and London, via electronic messages, telephone conversations and in-person conversations. The employees responsible for the LIBOR and EURIBOR submissions accommodated those requests on numerous occasions in submitting the bank’s contributions. On some occasions, Barclays’s submissions affected the fixed rates.
In addition, between August 2005 and May 2008, certain Barclays traders communicated with traders at other financial institutions, including other banks on the LIBOR and EURIBOR panels, to request LIBOR and EURIBOR submissions that would be favorable to their or their counterparts’ trading positions, according to the agreement.
When the requests of traders for favorable LIBOR and EURIBOR submissions were taken into account by the rate submitters, Barclays’s rate submissions were false and misleading.
Further, according to the agreement, between approximately August 2007 and January 2009, in response to initial and ongoing press speculation that Barclays’s high U.S. Dollar LIBOR submissions at the time might reflect liquidity problems at Barclays, members of Barclays management directed that Barclays’s Dollar LIBOR submissions be lowered. This management instruction often resulted in Barclays’s submission of false rates that did not reflect its perceived cost of obtaining interbank funds. While the purpose of this particular conduct was to influence Barclays’s rate submissions, as opposed to the resulting fixes, there were some occasions when Barclays’s submissions affected the fixed rates.
The agreement and monetary penalty recognize Barclays’s extraordinary cooperation. Barclays made timely, voluntary and complete disclosure of its misconduct. After government authorities began investigating allegations that banks had engaged in manipulation of benchmark interest rates, Barclays was the first bank to cooperate in a meaningful way in disclosing its conduct relating to LIBOR and EURIBOR. Barclays’s disclosure included relevant facts that at the time were not known to the government. Barclays’s cooperation has been extensive, in terms of the quality and type of information and assistance provided, and has been of substantial value in furthering the department’s ongoing criminal investigation. Barclays has made a commitment to future cooperation with the department and other government authorities in the United States and the United Kingdom.
Assistant Attorney General Breuer further stated, “As today’s agreement reflects, we are committed to holding companies accountable for their misconduct while, at the same time, giving meaningful credit to companies that provide full and valuable cooperation in our investigations.”
In addition, Barclays has implemented a series of compliance measures and will implement additional internal controls regarding its submission of LIBOR and EURIBOR contributions, as required by the Commodity Futures Trading Commission (CFTC). Barclays will also continue to be supervised and monitored by the FSA.
The agreement and monetary penalty further recognize certain mitigating factors to Barclays’s misconduct. At times, Barclays employees raised concerns with the British Bankers’ Association, the United Kingdom Financial Services Authority (FSA), the Bank of England, and the Federal Reserve Bank of New York in late 2007 and in 2008 that the Dollar LIBOR rates submitted by contributing banks, including Barclays, were too low and did not accurately reflect the market. Further, during this time, notwithstanding Barclays’s improperly low Dollar LIBOR submissions, those submissions were often higher than the contributions used in the calculation of the fixed rates.
As a result of Barclays’s admission of its misconduct, its extraordinary cooperation, its remediation efforts and certain mitigating and other factors, the department agreed not to prosecute Barclays for providing false LIBOR and EURIBOR contributions, provided that Barclays satisfies its ongoing obligations under the agreement for a period of two years. The non-prosecution agreement applies only to Barclays and not to any employees or officers of Barclays or any other individuals.
In a related matter, the CFTC brought attempted manipulation and false reporting charges against Barclays, which the bank agreed to settle. The CFTC imposed a $200 million penalty and required Barclays to implement detailed measures designed to ensure the integrity and reliability of its benchmark interest rate submissions.
The FSA issued a Final Notice regarding its enforcement action against Barclays, and has imposed a penalty of £59.5 million against it.
The case is being handled by Deputy Chief Daniel Braun, Assistant Chiefs Rebecca Rohr and Robertson Park, Trial Attorney Alexander Berlin, and Special Trial Attorney Luke Marsh of the Criminal Division’s Fraud Section. The investigation is being conducted by the FBI’s Washington Field Office, jointly with the Antitrust Division of the Department of Justice.
The Department acknowledges and expresses its appreciation for the significant assistance provided by the CFTC’s Division of Enforcement, which referred the conduct to the Department, as well as the FSA’s Enforcement and Financial Crime Division.
This agreement is part of efforts underway by President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. For more information about the task force visit: www.stopfraud.gov.
Related Materials:
Agreement
Statement of Facts
Tuesday 26 June 2012
US Settles Complaint Against Wisconsin Livestock Companyfor Improper Medication PracticesRead the Press Release
The United States has filed suit in the U.S. District Court for the Eastern District of Wisconsin against Dan Nolan Livestock LLC. and its owner Daniel W. Nolan to block them from violating the Food, Drug and Cosmetic Act (FDCA) in connection with their alleged unlawful use of new animal drugs in cows slaughtered for food. The Justice Department filed the suit on behalf of the Food and Drug Administration (FDA).
The defendants have agreed to settle the litigation and be bound by a Consent Decree of Permanent Injunction that enjoins them from committing violations of the FDCA. The proposed consent decree has been filed with the court and is awaiting judicial approval.
The government’s action results from a series of inspections of the Bonduel, Wis.-based livestock company, which revealed, according to the FDA, that the defendants failed to maintain treatment and sales records for their animals and that, in the previous year, they sold an animal for slaughter containing excessive and illegal antibiotic drug residues in its edible tissues. The complaint also alleges that the defendants have dispensed prescription new animal drugs on more than one occasion without a lawful order from a veterinarian.
The complaint states that excess drug residues in animal tissues can harm consumers by causing allergic reactions and by contributing to the spread of antibiotic-resistant bacteria. Both FDA and the U.S. Department of Agriculture (USDA) have warned the defendants that their conduct violates the FDCA. Nonetheless, according to the complaint, the most recent FDA inspection, concluded in November 2011, documented the continuing nature of the defendants’ violations, and established their responsibility for the illegal drug residues found in edible tissue sampled by the USDA in January 2011.
The government’s complaint asserts that the defendants have introduced adulterated food into interstate commerce, caused new animal drugs to become misbranded and adulterated while held for sale after shipment in interstate commerce, and failed to comply with statutory and regulatory requirements concerning the extra-label use of new animal drugs. The consent decree, to which the defendants agreed, requires that Dan Nolan Livestock cease operations and be allowed to resume its business only after it has documented to the FDA’s satisfaction that it has corrected all of the problems observed by the agency’s inspections and has instituted procedures to ensure that there will be no recurrence of those or any other violations that could present a threat to the consuming public.
“When farms fail to maintain appropriate controls concerning the medication of food-producing animals, they jeopardize the public health,” said Stuart F. Delery, Acting Assistant Attorney General for the Justice Department’s Civil Division. “Today’s filing is intended to make certain that Dan Nolan Livestock will put in place the procedures and documentation necessary to help ensure that consumers receive safe foods for their family table.”
Mr. Delery thanked the FDA for referring the case to the Department of Justice. Andrew Clark, of the Consumer Protection Branch, prosecuted the case together with Sonia Nath of FDA’s Office of the General Counsel. The U.S. Attorney’s Office for the Eastern District of Wisconsin joined in the prosecution of the matter.
A complaint is merely a set of allegations that, if the case were to proceed to trial, the government would need to prove by a preponderance of the evidence.
Two Women Plead Guilty in Maryland to Civil Rights ViolationsRead the Press Release
Two Baltimore women pleaded guilty today for their involvement in a racially-motivated conspiracy to interfere with an African family’s housing rights by hanging a dead raccoon on the family’s porch, the Justice Department announced.
Dena Whedbee, 42, and her daughter Brittany Whedbee, 20, each pleaded guilty in the District of Maryland to one count of conspiracy to deprive a person of civil rights and one count of violating the Fair Housing Act.
According to their plea agreement, in April 2010, Dena Whedbee and Brittany Whedbee conspired with Joshua Wall, Billy Pratt and another co-conspirator to hang a dead raccoon from a noose on the porch of a family from Africa, in order to frighten the family and interfere with their housing rights. Dena Whedbee admitted that she and another co-conspirator found the dead raccoon, and that Wall, Pratt and the other conspirator used the raccoon to carry out their plan on the night of April 29, 2010. Both Dena and Brittany Whedbee also admitted that they encouraged their co-conspirators to hang the raccoon on the family’s porch.
The defendants face a maximum penalty of 10 years in prison and a $250,000 fine for conspiracy to deprive a person of civil rights and one year in prison and a $100,000 fine for violating the Fair Housing Act. U.S. District Judge Ellen L. Hollander has scheduled sentencing for Dec. 14, 2012.
Billy Pratt, 24, of Baltimore, and Joshua Wall, 20, of Essex, Md., previously pleaded guilty for their involvement in the conspiracy. Their sentencings are scheduled for Aug. 17, 2012.
This case was investigated by Special Agent Mia Winkley of the FBI, and is being prosecuted by Trial Attorney Angie Cha of the Justice Department’s Civil Rights Division and Assistant U.S. Attorney P. Michael Cunningham.
New York-based GSA Contractor Ward Diesel Filter Systems<br /> <br /> Pays US $628,000 to Resolve False Claims Act LiabilityRead the Press Release
Ward Diesel Filter Systems Inc. has agreed to pay the United States $628,000 to resolve allegations that it knowingly submitted false claims to federal agencies under a contract to provide diesel exhaust filtering systems for fire engines through the General Services Administration’s (GSA) Multiple Award Schedule program, the Justice Department announced today.
Ward Diesel, which is headquartered in Elmira, N.Y., manufactures filtering systems for diesel engines on fire trucks. The company had provided the systems to the Department of the Army, Department of the Navy, Department of Interior, as well as the Air Force, Marine Corps and Department of Energy.
Ward Diesel’s contract required it to truthfully provide its commercial pricing information to GSA during the contracting process. The contract required Ward Diesel to identify a group of most-favored customers, and to provide more favorable prices to GSA than it offered to those most-favored customers. In addition, Ward Diesel’s contract with GSA required Ward Diesel to notify GSA of any additional discounts to the most-favored customers during the life of the contract. The United States alleged that Ward Diesel failed to fulfill these obligations, thereby routinely overcharging government agencies that purchased diesel filter systems from Ward Diesel though its GSA contract.
“In these tight times of fiscal responsibility, knowingly overcharging government agencies that are trying to do more with less is particularly inappropriate and harmful to the agencies’ missions,” said Acting Assistant Attorney General Stuart F. Delery. “This resolution demonstrates that the department will vigorously pursue government contractors who overprice their products at the expense of the American taxpayers.”
“This is another example of our commitment to rooting out those who attempt to defraud the government. Companies that choose to do business with the United States must play by the rules. When they fail to do so, this office will do its utmost to enforce the law and protect taxpayers’ money,” said John P. Kacavas, U.S. Attorney for the District of New Hampshire.
The government’s investigation of Ward Diesel was initiated by a lawsuit, U.S. ex rel. Siska v. Ward Diesel Filter Systems, Inc., No. 10-0111-JL (D. NH), filed under the False Claims Act’s qui tam or whistleblower provisions, which permit private parties to sue for false claims on behalf of the United States and to share in any recovery. The whistleblower in this case, Ted Siska, will receive $94,200 of the settlement.
Acting Assistant Attorney General Stuart F. Delery and U.S. Attorney John P. Kacavas commended the many agencies that participated in the government’s investigation, including the Civil Division of the U.S. Department of Justice, the U.S. Attorney’s Office for the District of New Hampshire, the Inspector General of the GSA, the Defense Criminal Investigative Service, the Defense Contract Audit Agency, Air Force Criminal Investigation Division, Air Force Office of Special Investigations and Navy Criminal Investigative Service. The claims settled by this agreement are allegations only, and there has been no determination of liability.
Mortgage Fraud Summits Arm Distressed Homeowners with Information to Protect Them from ScamsRead the Press Release
The Department of Justice, the Department of Housing and Urban Development’s (HUD) Office of Inspector General and the Federal Housing Finance Agency’s Office of Inspector General, among other federal and state partners, are holding mortgage fraud summits in Las Vegas and Los Angeles today to help protect homeowners in areas hit hardest by these scams. The summit originally planned to be held in Tallahassee, Fla., will be rescheduled due to severe weather in the area. The summits, organized by President Obama’s Financial Fraud Enforcement Task Force’s (FFETF) Mortgage Fraud Working Group, are an opportunity for homeowners to learn about common mortgage fraud schemes and how to avoid becoming a victim.
Additionally today, the Treasury Department’s Financial Crimes Enforcement Network (FinCEN), an active member of the FFTEF, issued its first quarter 2012 update of mortgage loan fraud suspicious activity reports that shows California, Florida and Nevada leading the nation in the number of mortgage fraud suspicious activity report subjects per person. Financial institutions report suspected illegal activity to FinCEN, which then collects, analyzes and makes the information available to state, federal and local law enforcement investigators. For more information on FinCEN’s first quarter 2012 update of mortgage loan fraud suspicious activity reports, visit: www.fincen.gov/news_room/rp/files/MLF_Update_Q1_2012_508.pdf
California, Florida and Nevada have consistently ranked among the highest in mortgage fraud cases and suspected mortgage fraud according to data collected by the FBI in its “2010 Mortgage Fraud Report Year in Review.” The Department of Justice has remained vigilant in seeking and prosecuting mortgage fraud, resulting in a 92 percent increase in mortgage fraud prosecutions across the nation since fiscal year 2009. In fiscal years 2010 and 2011, alone, the department indicted more than 2,100 individuals for mortgage-fraud related crimes.
“Preventing, detecting and prosecuting mortgage fraud is a top priority of the Financial Fraud Enforcement Task Force and its Mortgage Fraud Working Group members,” said FFETF Executive Director Michael Bresnick. “It’s more important than ever that we arm homeowners with the information they need to recognize the predators up front and empower them to avoid falling victim to these devastating scams. That’s why the task force is holding these summits in states hit hardest by the foreclosure crisis.”
The Nevada Mortgage Fraud Summit will take place today from 12:30 p.m. to 5:30 p.m. PDT in the Lloyd George Federal Courthouse located at 333 Las Vegas Boulevard South in Las Vegas. Multiple federal, state and local officials, including Nevada Attorney General Catherine Cortez-Masto, will discuss mortgage fraud trends and schemes in southern Nevada, the impact of mortgage fraud on the community and ways in which people can avoid becoming a victim of a mortgage fraud offense.
“We are continuing to work with our federal, state and local law enforcement partners to investigate and bring to justice the persons who are taking advantage of the housing crisis in Nevada to defraud financial institutions, distressed homeowners and homebuyers,” said U.S. Attorney for the District of Nevada Daniel G. Bogden.
For more information on the Las Vegas summit, visit: www.justice.gov/usao/nv/
The California Mortgage Fraud Summit is taking place today from 9:00 a.m. to 1:00 p.m. PDT in the 300 N. Los Angeles Street Federal Building in downtown Los Angeles. The summit involves a wide variety of officials and practitioners dedicated to mortgage fraud enforcement and prevention from the FBI, HUD, Federal Trade Commission, California Attorney General’s Office, California State Bar, California Department of Real Estate and other federal, state, county and local agencies, including the Los Angeles County Department of Consumer Affairs.
“The Central District of California’s Mortgage Fraud Summit is focused on bringing together resources at every level of both the public and private sectors and at developing a seamless integration of dedicated federal, state and local resources to fight mortgage fraud, raise fraud awareness and ultimately protect homeowners and their families,” said U.S. Attorney for the Central District of California André Birotte Jr.
For more information on the summit in Los Angeles, please contact Bruce Riordan at 213-894-0480.
The summit being rescheduled in Tallahassee will cover recent trends in mortgage fraud and the impact of mortgage fraud on victims. A broad range of representatives from federal and state law enforcement, consumer groups and financial institutions are expected to participate in this conference.
“Mortgage fraud, indeed any fraud against consumers, weakens our economy not only by the loss it causes but also by decreasing consumer confidence in our economy. That, in turn, hurts our country,” said U.S. Attorney for the Northern District of Florida Pamela Marsh.
For more information on the summit in Tallahasse, please contact Ginger Golden-Bouk at 850-444-4000.
Struggling homeowners can become the targets of fraudsters posing as foreclosure rescue or loan modification experts. Typically these con artists claim they can help struggling homeowners save their home from foreclosure for an upfront fee, even though advance fees are generally prohibited by law and loan counseling and modification services are generally provided free from the lender or from a HUD counseling center. The scams take many forms. Some scammers ask the homeowners to transfer title to their property, make mortgage payments to someone other than the lender, or stop making mortgage payments altogether. Others use false filings in the U.S. Bankruptcy Courts to temporarily stop the foreclosure process, while still others create websites containing false government logos and bold promises to avoid foreclosure in order to deceive the at-risk homeowner. Unfortunately, these fraudsters take the homeowner’s money and any remaining equity in the house and run, leaving the homeowner penniless and more likely to be foreclosed.
If you are behind on your mortgage and seeking assistance, please call toll-free, 888-995-HOPE (4673) for free, comprehensive foreclosure assistance and housing counseling services.
For more information on protecting yourself from mortgage, loan, lending and related fraud, visit: www.stopfraud.gov/protect-mortgage.html
President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force, chaired by Attorney General Eric Holder, includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. For more information about the FFETF, visit www.stopfraud.gov