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Wednesday 13 June 2012
Justice Department Transfers 1,000 Acres of Land <br /> in Cannon County, Tenn., to State of TennesseeRead the Press Release
WASHINGTON – The U.S. Department of Justice has transferred to the state of Tennessee approximately 1,000 acres of undeveloped land in Cannon County, Tenn., as a result of a federal criminal conviction of two individuals for distribution of marijuana.
The transfer was announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney William C. Killian for the Eastern District of Tennessee, Special Agent in Charge Harry S. Sommers of the Atlanta Division of the Drug Enforcement Administration (DEA) and U.S. Marshal Denny W. King for the Middle District of Tennessee.
The land, located on Short Mountain in Woodbury, Tenn., will be managed by the Tennessee Wildlife Resources Agency and will be known as the Headwaters Wildlife Management Area. Short Mountain is a critical habitat for plant and animal species, and contains the headwaters for three Tennessee watersheds. The property will be open to the public for small game hunting, hiking and wildlife viewing.
The land was forfeited to the United States as part of the 2007 federal criminal convictions of Morris Roller and Jeffory Carl Young for distribution of marijuana. Roller and Young are currently serving federal sentences of 200 and 224 months, respectively. The transfer was made under a law that allows the Justice Department to convey forfeited property to states for public use for recreation or conservation purposes upon request by the governor or chief executive officer of the state.
The Asset Forfeiture and Money Laundering Section of the Justice Department’s Criminal Division coordinated the transfer. The federal criminal investigation was assisted by the Tennessee Bureau of Investigation; Tennessee Alcohol Control Board; Warren County, Tenn., Sheriff’s Department; Hamilton County, Tenn., Sheriff’s Department; and Chattanooga, Tenn., Police Department.
“This land transfer highlights the benefits of asset forfeiture as a crime-fighting tool,” said Assistant Attorney General Breuer. “Our law enforcement efforts put an end to illegal drug production on this land and secured its preservation for years to come.”“The transfer of this property was accomplished through the cooperative efforts of local, state and federal government agencies,” said U.S. Attorney Killian. “This historic conveyance of forfeited property, which is the largest transfer for conservation purposes in the past 15 years by the federal government to a governmental entity, will leave a lasting legacy of this wildlife management area for the state of Tennessee and its citizens. Now, rather than being used for growing marijuana or violating other laws, it will be used for recreational activities such as hiking, fishing and hunting. Russ Dedrick, my predecessor as U.S. Attorney, is to be congratulated for arranging this donation of land.”
A dedication ceremony was held today on the land.
The Department of Justice Asset Forfeiture Program allows for the transfer of federally forfeited real property to serve various purposes including: supporting state recreational, preservation or historic purposes; supporting a continuing federal purpose; and assisting a state or local government, or a non-profit entity, in carrying out educational, drug treatment, rehabilitation, housing and other community-based initiatives. Through these real property transfers the Asset Forfeiture Program contributes to our communities nationwide.
Co-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
WASHINGTON – The former co-owner of a Houston-area home health care company was sentenced today 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).
Clifford Ubani, a former co-owner and chief financial officer at Family Healthcare Group, was sentenced by U.S. District Judge Nancy Atlas in the Southern District of Texas. In addition to his prison term, Ubani was sentenced to three years of supervised release and was ordered to pay $4.2 million in restitution jointly and severally with his co-defendants. In January 2011, Ubani pleaded guilty to one count of conspiracy to commit health care fraud, one count of conspiracy to pay illegal kickbacks to patient recruiters and 16 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 court documents and other evidence, Clifford Ubani 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. Ubani’s co-conspirators would then falsify documents to support the fraudulent payments from Medicare. Ubani also paid co-conspirators to sign fraudulent plans of care stating that the beneficiaries needed home health care when in fact they knew the beneficiaries were not home-bound and not in need of skilled nursing.
Ubani is the eighth defendant sentenced in connection with this scheme. Two other defendants, co-owner Princewill Njoku and patient recruiter Cynthia Garza Williams, await sentencing.
The sentences were announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney Kenneth Magidson of the Southern District of Texas; Special Agent-In-Charge Stephen L. Morris of the FBI’s Houston Field Office; Special Agent-in-Charge Mike Fields of the Dallas Regional Office of HHS’s Office of the Inspector General (HHS-OIG); and the Texas Attorney General’s Medicaid Fraud Control Unit (OAG-MFCU).
This case is being prosecuted by Trial Attorney Charles D. Reed and Deputy Chief Sam S. Sheldon of the Criminal Division’s Fraud Section. The case was investigated by the FBI, HHS-OIG, Texas OAG-MFCU and the Federal Railroad Retirement Board-OIG, and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Texas.
Since 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.
Assistant Attorney General Ronald Weich Announces Departure from Department of JusticeRead the Press Release
The Justice Department announced today that Assistant Attorney General for Legislative Affairs Ronald Weich will be leaving the department to join the University of Baltimore School of Law as its new dean. Assistant Attorney General Weich was appointed by President Obama and confirmed by the Senate in April, 2009.
Judith C. Appelbaum, who has served as a deputy assistant attorney general in the Office of Legislative Affairs (OLA), will serve as acting assistant attorney general following Weich’s departure.
“Ron’s leadership has been instrumental in realizing crucial legislative achievements, and I thank him for his tireless advocacy of department priorities,” said Attorney General Eric Holder. “I am proud of the work done by the Office of Legislative Affairs under Ron’s watch to advance legislation vital to ensuring justice.”
“Serving the department has been a tremendous privilege, and I’m pleased with OLA’s accomplishments over the last three years,” said Assistant Attorney General Weich. “We have worked effectively with Congress to advance the mission and goals of the Justice Department.”
Under the leadership of Assistant Attorney General Weich, the Office of Legislative Affairs has worked to strengthen the department’s relationship with Congress. The office has represented the department in connection with numerous legislative achievements on issues of central importance to the department, including the Fraud Enforcement and Recovery Act; the Matthew Shepard and James Byrd, Jr. Hate Crimes Prevention Act and the Tribal Law and Order Act.
The office also has worked to advance measures that have not yet been enacted, including the Violence Against Women Reauthorization Act of 2012, the FISA Amendments Extension Act and the Nuclear Terrorism Conventions Implementation Act.
Assistant Attorney General Weich also managed the department’s efforts to obtain Senate confirmation of numerous senior department officials, including the deputy attorney general, assistant attorneys general, law enforcement component heads, U.S. attorneys and U.S. marshals.
Prior to joining the Justice Department, Assistant Attorney General Weich served as chief counsel to Senate Majority Leader Harry Reid. He earlier served as counsel to Senators Edward M. Kennedy and Arlen Specter, and as a partner in the law firm of Zuckerman Spaeder LLP.
Additional information about the Office of Legislative Affairs is available at www.justice.gov/ola/ .
Admitted New England La Cosa Nostra Leader <br /> Sentenced to 108 Months in Federal PrisonRead the Press Release
WASHINGTON – Edward “Eddy” Lato, 65, of Providence, R.I., an admitted capo regime in the New England La Cosa Nostra (NELCN), was sentenced in U.S. District Court in Providence today to 108 months in federal prison for participating in racketeering extortion conspiracies of several Rhode Island adult entertainment businesses and of a car salesman and his wife.
U.S. District Court Judge William E. Smith also ordered Lato to serve three years of supervised release upon completion of his prison term. Lato pleaded guilty on March 13, 2012, to conspiracy to participate in a racketeering enterprise.
Lato’s sentence was announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; Peter F. Neronha, U.S. Attorney for the District of Rhode Island; Richard DesLauriers, Special Agent in Charge of the FBI’s Boston Field Office; Colonel Steven G. O’Donnell, Superintendent of the Rhode Island State Police; and Providence Public Safety Commissioner Steven M. Pare.
At the time of his guilty plea, Lato admitted to the court that he participated in a racketeering and extortion conspiracy that demanded and received between $800,000 and $1.5 million in “protection” payments from several adult entertainment businesses in Rhode Island from 1995 to 2009. He also admitted his participation in a conspiracy to extort $25,000 from a Rhode Island car salesman and his wife by using implied threats of violence. The wife ultimately withdrew $25,000 from a retirement account to satisfy the demand for payment.
Seven of the nine defendants named in superseding indictments and charged with participating in the racketeering and extortion conspiracy, including admitted longtime former NELCN underboss and boss Luigi Manocchio, have pleaded guilty. Manocchio was sentenced on May 11, 2012, to 66 months in federal prison.
The cases are being prosecuted by Assistant U.S. Attorney William J. Ferland for the District of Rhode Island and Trial Attorney Sam Nazzaro of the Criminal Division’s Organized Crime and Gang Section.
The matter was investigated by the FBI, Rhode Island State Police and the Providence Police Department.
Tuesday 12 June 2012
New York Certified Public Accountant Who Failed to Pay Employment Taxes Sentenced to Two Years in PrisonRead the Press Release
Silford Warren, a resident of Queens, N.Y., was sentenced today to 24 months in prison for failure to pay over employment taxes in connection with his ownership of Silford Warren, CPA PC., the Justice Department and Internal Revenue Service (IRS) announced today. Judge William F. Kuntz II of the U.S. District Court for the Eastern District of New York also ordered Warren to pay $184,263 in restitution to the IRS.
Warren, a Certified Public Accountant, pleaded guilty on Dec. 9, 2011 to a one-count information charging him with willful failure to pay over employment taxes on behalf of his accounting business. According to the criminal information and court filings, from 2006 through 2008, Warren under-reported his employees’ salaries on tax filings with the IRS. The restitution amount ordered by the court included the employment taxes that he failed to pay over from his employees and his obligation, as an employer, to pay over a matching portion of those employment taxes, as well as the tax loss resulting from his filing false corporate income tax returns for 2005 through 2008.
Kathryn Keneally, Assistant Attorney General of the Justice Department’s Tax Division, thanked special agents of IRS-Criminal Investigation, who investigated the case, and Tax Division Trial Attorneys Tino M. Lisella and Sean Delaney, who are currently on detail to U.S. Attorneys’ offices, and Assistant Chief Karen E. Kelly, who prosecuted the case.
Justice Department Files Lawsuit Against Florida Alleging Violations of the National Voter Registration ActRead the Press Release
WASHINGTON – The Department of Justice announced today that it has filed a lawsuit against the state of Florida and the Florida Secretary of State in his official capacity alleging that the state has violated its obligations under Section 8 of the National Voter Registration Act of 1993 (NVRA).
The complaint, filed today in the U.S. District Court for the Northern District of Florida, alleges that Florida has violated the NVRA by conducting a systematic program to purge voters from its voter registration rolls within the 90-day quiet period before an election for federal office established by the law. In addition, the complaint alleges that Florida’s use of inaccurate and unreliable voter verification procedures violates the requirement in Section 8 of the NVRA that any such program be uniform and nondiscriminatory.
“The Department of Justice has an overriding interest in protecting the rights of eligible citizens to register and vote free from unlawful burdens, while at the same time ensuring that ineligible persons do not register and vote in federal elections in violation of the law,” said Thomas E. Perez, Assistant Attorney General for the Justice Department’s Civil Rights Division. “The department is committed to enforcing the National Voter Registration Act so that these objectives are met.”
The lawsuit seeks a court order declaring that the defendants have failed to comply with the requirements of Section 8 of the NVRA, and enjoining Florida from taking any further steps in connection with this list purge program.“Congress enacted the NVRA against a historical backdrop in this country in which purge programs initiated close to elections prevented and deterred eligible citizens from casting ballots,” said Assistant Attorney General Perez. “The 90-day quiet period in the NVRA protects eligible voters from being dropped from the rolls right before an election. It appears that Florida has undertaken a new program for voter removal within this 90-day period that has critical imperfections, which lead to errors that harm and confuse eligible voters.”
More information about the NVRA and other federal voting laws is available on the Department of Justice website at www.justice.gov/crt/about/vot/. Complaints about discriminatory voting practices may be reported to the Voting Section of the Justice Department’s Civil Rights Division at 1-800-253-3931.
Related Materials:
Complaint (PDF)
ING Bank N.V. Agrees to Forfeit $619 Million for Illegal Transactions with Cuban and Iranian EntitiesRead the Press Release
WASHINGTON – ING Bank N.V., a financial institution headquartered in Amsterdam, has agreed to forfeit $619 million to the Justice Department and the New York County District Attorney’s Office for conspiring to violate the International Emergency Economic Powers Act (IEEPA) and the Trading with the Enemy Act (TWEA) and for violating New York state laws by illegally moving billions of dollars through the U.S. financial system on behalf of sanctioned Cuban and Iranian entities. The bank has also entered into a parallel settlement agreement with the Treasury Department’s Office of Foreign Assets Control (OFAC).
The announcement was made by Lisa Monaco, Assistant Attorney General for National Security; Ronald C. Machen, U.S. Attorney for the District of Columbia; Assistant Attorney General Lanny A. Breuer of the Criminal Division; District Attorney Cyrus R. Vance Jr., of the New York County District Attorney’s Office; James W. McJunkin, Assistant Director in Charge of the FBI Washington Field Office; Richard Weber, Chief, Internal Revenue Service (IRS) Criminal Investigation; and Adam J. Szubin, Director of the Office of Foreign Assets Control.
A criminal information was filed today in federal court in the District of Columbia charging ING Bank N.V. with one count of knowingly and willfully conspiring to violate the IEEPA and TWEA. ING Bank waived the federal indictment, agreed to the filing of the information and has accepted responsibility for its criminal conduct and that of its employees. ING Bank agreed to forfeit $619 million as part of the deferred prosecution agreements reached with the Justice Department and the New York County District Attorney’s Office.
According to court documents, starting in the early 1990s and continuing until 2007, ING Bank violated U.S. and New York state laws by moving more than $2 billion illegally through the U.S. financial system – via more than 20,000 transactions – on behalf of Cuban and Iranian entities subject to U.S. economic sanctions. ING Bank knowingly and willfully engaged in this criminal conduct, which caused unaffiliated U.S. financial institutions to process transactions that otherwise should have been rejected, blocked or stopped for investigation under regulations by OFAC relating to transactions involving sanctioned countries and parties.
“The fine announced today is the largest ever against a bank in connection with an investigation into U.S. sanctions violations and related offenses and underscores the national security implications of ING Bank’s criminal conduct. For more than a decade, ING Bank helped provide state sponsors of terror and other sanctioned entities with access to the U.S. financial system, allowing them to move billions of dollars through U.S. banks for illicit purchases and other activities,” said Assistant Attorney General Monaco. “I applaud the agents, analysts and prosecutors who for years pursued this case.”“Banks that try to skirt U.S. sanctions laws undermine the integrity of our financial system and threaten our national security,” said U.S. Attorney Machen. “When banks place their loyalty to sanctioned clients above their obligation to follow the law, we will hold them accountable. On more than 20,000 occasions, ING intentionally manipulated financial and trade transactions to remove references to Iran, Cuba and other sanctioned countries and entities. Today’s $619 million forfeiture – the largest ever – holds ING accountable for its wrongdoing.”
“For years, ING Bank blatantly violated U.S. laws governing transactions involving Cuba and Iran, and then used shell companies and other deceptive measures to cover up its criminal conduct,” said Assistant Attorney General Breuer. “Today’s resolution reflects a strong collaboration among federal and state law enforcement partners to hold ING accountable.”
“Investigations of financial institutions, businesses and individuals who violate U.S. sanctions by misusing banks in New York are vitally important to national security and the integrity of our banking system,” said New York County District Attorney Vance. “These cases give teeth to sanctions enforcement, send a strong message about the need for transparency in international banking and ultimately contribute to the fight against money laundering and terror financing. I thank our federal partners for their cooperation and assistance in pursuing this investigation.”
“Today, ING Bank was held accountable for their illegal actions involving the movement of more than $2 billion through the U.S. financial system on behalf of Cuban and Iranian entities subject to U.S. economic sanctions,” said FBI Assistant Director in Charge McJunkin. “Investigations of this type are complicated and demand significant time and dedication from agents, analysts and prosecutors. In this case, their steadfast tenacity brought this case through to today’s result, and we will continue to pursue these matters in diligent fashion.”
“In today’s environment of increasingly sophisticated financial markets, it’s critical that global institutions follow U.S. law, including sanctions against other countries,” said IRS Criminal Investigation Chief Weber. “The IRS is proud to share its world-renowned financial investigative expertise in this and other complex financial investigations. Creating new strategies and models of cooperation among our law enforcement partners to ensure international financial compliance is a top-priority of the IRS.”
“Our sanctions laws reflect core U.S. national security and foreign policy interests and OFAC polices them aggressively. Today's historic settlement should serve as a clear warning to anyone who would consider profiting by evading U.S. sanctions,” said OFAC Director Szubin. “We commend our federal and state colleagues for their work on this important investigation.”
The Scheme
According to court documents, ING Bank committed its criminal conduct by, among other things, processing payments for ING Bank’s Cuban banking operations through its branch in Curaçao on behalf of Cuban customers without reference to the payments’ origin, and by providing U.S. dollar trade finance services to sanctioned entities through misleading payment messages, shell companies and the misuse of ING Bank’s internal suspense account.
Furthermore, ING Bank eliminated payment data that would have revealed the involvement of sanctioned countries and entities, including Cuba and Iran; advised sanctioned clients on how to conceal their involvement in U.S. dollar transactions; fabricated ING Bank endorsement stamps for two Cuban banks to fraudulently process U.S. dollar travelers’ checks; and threatened to punish certain employees if they failed to take specified steps to remove references to sanctioned entities in payment messages.
According to court documents, this conduct occurred in various business units in ING Bank’s wholesale banking division and in locations around the world with the knowledge, approval and encouragement of senior corporate managers and legal and compliance departments. Over the years, several ING Bank employees raised concerns to management about the bank’s sanctions violations. However, no action was taken.
For decades, the United States has employed sanctions and embargoes on Iran and Cuba. Financial transactions conducted by wire on behalf of Iranian or Cuban financial institutions have been subject to these U.S. sanctions. The TWEA prohibits U.S. persons from engaging in financial transactions involving or benefiting Cuba or Cuban nationals and prohibits attempts to evade or avoid these restrictions. IEEPA makes it a crime to willfully attempt to commit, conspire to commit, or aid and abet in the commission of any violations of the Iranian Transaction Regulations, which prohibit the exportation of any services from the United States to Iran and any attempts to evade or avoid these restrictions. IEEPA and TWEA regulations are administered by OFAC.
The Investigation
The Justice Department’s investigation into ING Bank arose out of ongoing investigations into the illegal export of goods from the United States to sanctioned countries, including Iran. For instance, ING processed payments on behalf of one customer, Aviation Services International B.V. (ASI), a Dutch aviation company which was the subject of a U.S. Commerce Department-initiated criminal investigation, through the United States for trade services relating to the procurement by ASI of dual-use U.S. aviation parts for ASI’s Iranian clients. The ING Bank investigation also resulted in part from a criminal referral from OFAC, which was conducting its own probe of ING Bank.
ING Bank’s forfeiture of $309.5 million to the United States and $309.5 million to the New York County District Attorney’s Office will settle forfeiture claims by the Department of Justice and the state of New York. In light of the bank’s remedial actions to date and its willingness to acknowledge responsibility for its actions, the Department will recommend the dismissal of the information in 18 months, provided ING Bank fully cooperates with, and abides by, the terms of the deferred prosecution agreement.
OFAC’s settlement agreement with ING deems the bank’s obligations to pay a civil settlement amount of $619 million to be satisfied by its payment of an equal amount to the Justice Department and the state of New York. OFAC’s settlement agreement further requires the bank to conduct a review of its policies and procedures and their implementation, taking a risk-based sampling of U.S. dollar payments, to ensure that its OFAC compliance program is functioning effectively to detect, correct and report apparent sanctions violations to OFAC.
The case was prosecuted by Trial Attorney Jonathan C. Poling of the Justice Department’s National Security Division; Assistant U.S. Attorneys Ann H. Petalas and George P. Varghese, of the National Security Section of the U.S. Attorney’s Office for the District of Columbia; and Trial Attorney Matthew Klecka of the Criminal Division’s Asset Forfeiture and Money Laundering Section.
The case was investigated by the FBI’s Washington Field Office and the IRS-Criminal Investigation’s Washington Field Division, with assistance from the Treasury Department’s OFAC and the Commerce Department’s Bureau of Industry and Security.
The Department of Justice expressed its gratitude to Executive Assistant District Attorney, Chief of Investigation Division Adam Kaufmann; and Assistant District Attorneys Sally Pritchard and Garrett Lynch of the New York County District Attorney’s Office, Major Economic Crimes Bureau.
ING Bank N.V. Agrees to Forfeit $619 Million for Illegal Transactions with Cuban and Iranian EntitiesRead the Press Release
WASHINGTON – ING Bank N.V., a financial institution headquartered in Amsterdam, has agreed to forfeit $619 million to the Justice Department and the New York County District Attorney’s Office for conspiring to violate the International Emergency Economic Powers Act (IEEPA) and the Trading with the Enemy Act (TWEA) and for violating New York state laws by illegally moving billions of dollars through the U.S. financial system on behalf of sanctioned Cuban and Iranian entities. The bank has also entered into a parallel settlement agreement with the Treasury Department’s Office of Foreign Assets Control (OFAC).
The announcement was made by Lisa Monaco, Assistant Attorney General for National Security; Ronald C. Machen, U.S. Attorney for the District of Columbia; Assistant Attorney General Lanny A. Breuer of the Criminal Division; District Attorney Cyrus R. Vance Jr., of the New York County District Attorney’s Office; James W. McJunkin, Assistant Director in Charge of the FBI Washington Field Office; Richard Weber, Chief, Internal Revenue Service (IRS) Criminal Investigation; and Adam J. Szubin, Director of the Office of Foreign Assets Control.
A criminal information was filed today in federal court in the District of Columbia charging ING Bank N.V. with one count of knowingly and willfully conspiring to violate the IEEPA and TWEA. ING Bank waived the federal indictment, agreed to the filing of the information and has accepted responsibility for its criminal conduct and that of its employees. ING Bank agreed to forfeit $619 million as part of the deferred prosecution agreements reached with the Justice Department and the New York County District Attorney’s Office.
According to court documents, starting in the early 1990s and continuing until 2007, ING Bank violated U.S. and New York state laws by moving more than $2 billion illegally through the U.S. financial system – via more than 20,000 transactions – on behalf of Cuban and Iranian entities subject to U.S. economic sanctions. ING Bank knowingly and willfully engaged in this criminal conduct, which caused unaffiliated U.S. financial institutions to process transactions that otherwise should have been rejected, blocked or stopped for investigation under regulations by OFAC relating to transactions involving sanctioned countries and parties.
“The fine announced today is the largest ever against a bank in connection with an investigation into U.S. sanctions violations and related offenses and underscores the national security implications of ING Bank’s criminal conduct. For more than a decade, ING Bank helped provide state sponsors of terror and other sanctioned entities with access to the U.S. financial system, allowing them to move billions of dollars through U.S. banks for illicit purchases and other activities,” said Assistant Attorney General Monaco. “I applaud the agents, analysts and prosecutors who for years pursued this case.”“Banks that try to skirt U.S. sanctions laws undermine the integrity of our financial system and threaten our national security,” said U.S. Attorney Machen. “When banks place their loyalty to sanctioned clients above their obligation to follow the law, we will hold them accountable. On more than 20,000 occasions, ING intentionally manipulated financial and trade transactions to remove references to Iran, Cuba and other sanctioned countries and entities. Today’s $619 million forfeiture – the largest ever – holds ING accountable for its wrongdoing.”
“For years, ING Bank blatantly violated U.S. laws governing transactions involving Cuba and Iran, and then used shell companies and other deceptive measures to cover up its criminal conduct,” said Assistant Attorney General Breuer. “Today’s resolution reflects a strong collaboration among federal and state law enforcement partners to hold ING accountable.”
“Investigations of financial institutions, businesses and individuals who violate U.S. sanctions by misusing banks in New York are vitally important to national security and the integrity of our banking system,” said New York County District Attorney Vance. “These cases give teeth to sanctions enforcement, send a strong message about the need for transparency in international banking and ultimately contribute to the fight against money laundering and terror financing. I thank our federal partners for their cooperation and assistance in pursuing this investigation.”
“Today, ING Bank was held accountable for their illegal actions involving the movement of more than $2 billion through the U.S. financial system on behalf of Cuban and Iranian entities subject to U.S. economic sanctions,” said FBI Assistant Director in Charge McJunkin. “Investigations of this type are complicated and demand significant time and dedication from agents, analysts and prosecutors. In this case, their steadfast tenacity brought this case through to today’s result, and we will continue to pursue these matters in diligent fashion.”
“In today’s environment of increasingly sophisticated financial markets, it’s critical that global institutions follow U.S. law, including sanctions against other countries,” said IRS Criminal Investigation Chief Weber. “The IRS is proud to share its world-renowned financial investigative expertise in this and other complex financial investigations. Creating new strategies and models of cooperation among our law enforcement partners to ensure international financial compliance is a top-priority of the IRS.”
“Our sanctions laws reflect core U.S. national security and foreign policy interests and OFAC polices them aggressively. Today's historic settlement should serve as a clear warning to anyone who would consider profiting by evading U.S. sanctions,” said OFAC Director Szubin. “We commend our federal and state colleagues for their work on this important investigation.”
The Scheme
According to court documents, ING Bank committed its criminal conduct by, among other things, processing payments for ING Bank’s Cuban banking operations through its branch in Curaçao on behalf of Cuban customers without reference to the payments’ origin, and by providing U.S. dollar trade finance services to sanctioned entities through misleading payment messages, shell companies and the misuse of ING Bank’s internal suspense account.
Furthermore, ING Bank eliminated payment data that would have revealed the involvement of sanctioned countries and entities, including Cuba and Iran; advised sanctioned clients on how to conceal their involvement in U.S. dollar transactions; fabricated ING Bank endorsement stamps for two Cuban banks to fraudulently process U.S. dollar travelers’ checks; and threatened to punish certain employees if they failed to take specified steps to remove references to sanctioned entities in payment messages.
According to court documents, this conduct occurred in various business units in ING Bank’s wholesale banking division and in locations around the world with the knowledge, approval and encouragement of senior corporate managers and legal and compliance departments. Over the years, several ING Bank employees raised concerns to management about the bank’s sanctions violations. However, no action was taken.
For decades, the United States has employed sanctions and embargoes on Iran and Cuba. Financial transactions conducted by wire on behalf of Iranian or Cuban financial institutions have been subject to these U.S. sanctions. The TWEA prohibits U.S. persons from engaging in financial transactions involving or benefiting Cuba or Cuban nationals and prohibits attempts to evade or avoid these restrictions. IEEPA makes it a crime to willfully attempt to commit, conspire to commit, or aid and abet in the commission of any violations of the Iranian Transaction Regulations, which prohibit the exportation of any services from the United States to Iran and any attempts to evade or avoid these restrictions. IEEPA and TWEA regulations are administered by OFAC.
The Investigation
The Justice Department’s investigation into ING Bank arose out of ongoing investigations into the illegal export of goods from the United States to sanctioned countries, including Iran. For instance, ING processed payments on behalf of one customer, Aviation Services International B.V. (ASI), a Dutch aviation company which was the subject of a U.S. Commerce Department-initiated criminal investigation, through the United States for trade services relating to the procurement by ASI of dual-use U.S. aviation parts for ASI’s Iranian clients. The ING Bank investigation also resulted in part from a criminal referral from OFAC, which was conducting its own probe of ING Bank.
ING Bank’s forfeiture of $309.5 million to the United States and $309.5 million to the New York County District Attorney’s Office will settle forfeiture claims by the Department of Justice and the state of New York. In light of the bank’s remedial actions to date and its willingness to acknowledge responsibility for its actions, the Department will recommend the dismissal of the information in 18 months, provided ING Bank fully cooperates with, and abides by, the terms of the deferred prosecution agreement.
OFAC’s settlement agreement with ING deems the bank’s obligations to pay a civil settlement amount of $619 million to be satisfied by its payment of an equal amount to the Justice Department and the state of New York. OFAC’s settlement agreement further requires the bank to conduct a review of its policies and procedures and their implementation, taking a risk-based sampling of U.S. dollar payments, to ensure that its OFAC compliance program is functioning effectively to detect, correct and report apparent sanctions violations to OFAC.
The case was prosecuted by Trial Attorney Jonathan C. Poling of the Justice Department’s National Security Division; Assistant U.S. Attorneys Ann H. Petalas and George P. Varghese, of the National Security Section of the U.S. Attorney’s Office for the District of Columbia; and Trial Attorney Matthew Klecka of the Criminal Division’s Asset Forfeiture and Money Laundering Section.
The case was investigated by the FBI’s Washington Field Office and the IRS-Criminal Investigation’s Washington Field Division, with assistance from the Treasury Department’s OFAC and the Commerce Department’s Bureau of Industry and Security.
The Department of Justice expressed its gratitude to Executive Assistant District Attorney, Chief of Investigation Division Adam Kaufmann; and Assistant District Attorneys Sally Pritchard and Garrett Lynch of the New York County District Attorney’s Office, Major Economic Crimes Bureau.
Haji Bagcho Sentenced to Life in Prison on Drug<br /> Trafficking and Narco-Terrorism ChargesRead the Press Release
WASHINGTON – An Afghan national with ties to the Taliban was sentenced to life in prison today for conspiring to distribute heroin to the United States and for using drug proceeds to fund, arm and supply the Taliban, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and Administrator Michele M. Leonhart of the Drug Enforcement Administration (DEA).
Haji Bagcho, an Afghan national and large scale drug trafficker, was sentenced by U.S. District Judge Ellen S. Huvelle in the District of Columbia. In addition to his prison term, Bagcho was ordered to forfeit $254,203,032 in drug proceeds along with his property in Afghanistan.
“Haji Bagcho led a massive drug production and trafficking operation that supplied heroin in more than 20 countries, including the United States,” said Assistant Attorney General Breuer. “In 2006 alone, he conducted heroin transactions worth more than $250 million. Bagcho used the profits of his narcotics trafficking operation to support high-level Taliban commanders in Afghanistan. Today’s life sentence is an appropriate punishment for one of the most notorious heroin traffickers in the world.”
“This is DEA at its finest, working in close collaboration with our Afghan partners to end the long reign of this Afghan drug lord whose drug proceeds financed terror,” said DEA Administrator Leonhart. “One of the world’s most prolific drug traffickers who helped fund the Taliban will spend his remaining days behind bars in a U.S. prison due to the relentless efforts of DEA, our Afghan counterparts and our prosecuting partners.”
Bagcho was convicted by a jury on March 13, 2012, after a three week trial, of one count of conspiracy to distribute one kilogram or more of heroin, knowing and intending that it would be unlawfully imported into the United States; one count of distribution of one kilogram or more of heroin knowing and intending that it would be unlawfully imported into the United States; and one count of narco-terrorism. The trial, before Judge Huvelle, was only the second under the narco-terrorism statute since its enactment in 2006.
Bagcho was charged in a superseding indictment on Jan. 28, 2010, after his arrest and extradition to the United States from Afghanistan in May 2009.
The DEA, in cooperation with their Afghan counterparts, conducted the investigation, which revealed that Bagcho was one of the largest heroin traffickers in the world and manufactured the drug in clandestine laboratories along Afghanistan’s border region with Pakistan. According to information presented at trial, Bagcho, who had been operating his heroin business since at least the 1990s, sent the drug to more than 20 countries, including the United States. Proceeds from his heroin trafficking were then used to support high-level members of the Taliban in furtherance of their insurgency in Afghanistan.
With the help of cooperating witnesses, evidence showed that the DEA purchased heroin directly from Bagcho’s organization on two occasions, which Bagcho understood was destined for the United States. They also conducted several searches of residences belonging to Bagcho and his associates, recovering evidence consistent with drug trafficking. During one search, ledgers belonging to the defendant were found and were later introduced at trial. One ledger, cataloguing Bagcho’s activities during 2006 alone, reflected heroin transactions totaling more than 123,000 kilograms, worth more than $250 million. Based on heroin production statistics compiled by the United Nations Office of Drugs and Crime for 2006, the defendant’s trafficking accounted for approximately 20 percent of the total amount of heroin produced worldwide that year.
Over several years, evidence at trial established that Bagcho used a portion of his drug proceeds to provide cash, weapons and other supplies to the former Taliban governor of Nangarhar Province and two Taliban commanders responsible for insurgent activity in eastern Afghanistan, so that they could continue their “jihad” against western troops and the Afghan government.
The case was prosecuted by Trial Attorneys Matthew Stiglitz and Marlon Cobar of the Criminal Division’s Narcotic and Dangerous Drug Section. The case was investigated by the DEA Special Operations Division in the United States, with assistance from the DEA’s Foreign Deployed Advisory Support Team and Kabul Country Office in Afghanistan, the U.S. Embassy in Kabul, and in close cooperation with Afghan law enforcement. The Criminal Division’s Office of International Affairs and Asset Forfeiture and Money Laundering Section provided invaluable support.
Former Fort Deposit, Alabama, Police Officer Arrested for Stealing Money from Motorists and Obstructing JusticeRead the Press Release
Former Fort Deposit, Ala., Police Officer Carlos Tyson Bennett was arrested today on charges of stealing money from motorists on Interstate 65 in central Alabama and subsequently trying to conceal his criminal activity, announced the Justice Department.
Bennett, 36, of Greenville, Ala., was charged in an eight-count indictment returned by a federal grand jury in the Middle District of Alabama and unsealed today. He is charged with one count of conspiracy against rights, four counts of deprivation of rights under color of law, and three counts of obstruction of justice.
The indictment alleges that between April 2009 and July 1, 2009, Bennett conspired with a fellow officer to stop vehicles under the guise of legitimate law enforcement activity and to steal cash from drivers and passengers in violation of their constitutional right to be free from unreasonable seizures of property. The indictment further alleges four specific thefts in which Bennett, aided and abetted by the other officer, stole between $100 and $200 per victim. In addition, Bennett is charged with obstructing justice on three separate occasions. According to the indictment, Bennett also provided a fabricated story to a law enforcement official and sought to prevent the communication of information relating to these offenses to law enforcement officers.
If convicted, Bennett could face a maximum sentence of 10 years in prison and a fine of $250,000 on the conspiracy charge; one year in prison and a fine of $100,000 on each of the deprivation of rights charges; and 20 years in prison and a fine of $250,000 on each of the obstruction charges.
This case is being investigated by the Alabama Bureau of Investigation; the Butler County, Ala., Sheriff’s Office; and the Lowndes County, Ala., Sheriff’s Office. The case is being prosecuted by Assistant U.S. Attorney Monica Stump for the Middle District of Alabama and Trial Attorney Chiraag Bains from the Justice Department’s Civil Rights Division.
An indictment is merely an accusation, and the defendant is presumed innocent unless proven guilty.
Monday 11 June 2012
Minnesota Business Owner Pleads Guilty to Federal Excise Tax Crimes and Tax FraudRead the Press Release
Jason W. Leas, a resident of Crookston, Minn., and co-founder of Best Used Trucks of Minnesota Inc., pleaded guilty today to one count of failing to pay federal excise taxes, one count of failing to file a federal excise tax return and one count of filing a false individual federal income tax return for tax year 2007, the Justice Department and Internal Revenue Service (IRS) announced. Leas was charged by information filed on May 29, 2012. He entered his plea of guilty before U.S. District Court Senior Judge Richard H. Kyle in Duluth, Minn.
As alleged in the plea agreement, from 2004 through 2007, Best Used Trucks, which is located in Crookston, was a farm truck dealership that bought and sold used trucks, new trailers, new grain boxes and other heavy farm equipment, primarily to farmers throughout the Red River Valley of Minnesota and North Dakota. Beginning in 2004 and continuing through 2007, Leas and Best Used Trucks purchased and imported new end dump trailers, grain boxes, and gravel boxes from a Canadian manufacturer, which subjected the company to federal excise taxes upon selling them afterward. Leas admitted that he knew of his responsibility for paying the 12 percent federal excise tax on the sale of these trailers and related equipment, and his responsibility to file federal excise tax returns. Leas pleaded guilty to failing to file an IRS Form 720, Quarterly Federal Excise Tax Return for the third quarter of 2005, and failing to pay federal excise taxes of $9,636 for the first quarter of 2006. Leas admitted that he failed to pay over at least $80,088 in total federal excise taxes for ten quarters from 2004 through 2006.
Leas also pleaded guilty to willfully filing a false individual federal income tax return for the tax year 2007, which failed to report at least $120,151 in additional income with an additional tax due and owing of at least $36,872. The plea agreement alleged that from 2004 to 2007 Leas controlled two checking accounts in the name of Best Used Trucks of Minnesota. Leas used one of these accounts to both divert corporate receipts from Best Used Trucks, and to buy and sell equipment that was not part of Best Used Trucks’s ordinary business sales. Leas failed to report this income on his personal tax returns for four years, resulting in a total tax loss of at least $73,361.
“To build faith in our nation’s tax system, honest taxpayers need to be reassured that everyone is paying their fair share of taxes, whether it is in the form of income taxes or excise taxes,” said Kelly R. Jackson, Special Agent in Charge of the IRS Criminal Investigation Division, St. Paul Field Office. “The IRS-Criminal Investigation Division, together with the Department of Justice, will continue to investigate and prosecute those who violate our tax system.”
Leas is facing a potential maximum penalty of five years in prison for all three charges; three years for willfully filing a false income tax return, and one year each for the failure to file and failure to pay charges.
Kathryn Keneally, Assistant Attorney General for the Justice Department’s Tax Division, thanked Special Agents and Revenue Agents of IRS – Criminal Investigation, who investigated the case, and Tax Division Trial Attorneys Thomas W. Flynn and Dennis R. Kihm, who prosecuted the case.
Miami-Area Resident Sentenced to 46 Months in Prison for Participating in Medicare Fraud SchemeRead the Press Release
WASHINGTON – A Miami-area resident who helped pay illegal kickbacks and transported ineligible patients to a fraudulent mental health company was sentenced today to 46 months in prison for her role in a scheme to falsely bill Medicare, announced the Department of Justice, the FBI and the Department of Health and Human Services (HHS).
Leyanes Placeres, 32, was sentenced by U.S. District Judge Patricia A. Seitz in the Southern District of Florida. In addition to her prison term, Placeres was sentenced to three years of supervised release and was ordered to pay $2.7 million in restitution. Placeres pleaded guilty in March 2012 to one count of conspiracy to commit health care fraud and one count of conspiracy to pay and receive illegal kickbacks.
According to court documents, for more than one year, Placeres transported patients to American Therapeutic Corporation (ATC), a corporation that purported to operate partial hospitalization programs (PHPs) in seven different locations throughout south Florida and Orlando. A PHP is a form of intensive treatment for severe mental illness. The patients Placeres transported did not qualify for the services purportedly rendered by ATC. ATC then billed Medicare for false, fake and fictitious services for the patients transported by Placeres and others.
According to court documents, Placeres also facilitated on behalf of ATC the payment of hundreds of thousands of dollars in illegal kickbacks to owners and operators of assisted living facilities and halfway houses in order to obtain patients for ATC.
According to court filings, ATC’s owners and operators paid kickbacks to owners and operators of assisted living facilities and halfway houses and to patient brokers in exchange for delivering ineligible patients to ATC. Throughout the course of the fraud conspiracy, millions of dollars in kickbacks were paid in exchange for Medicare beneficiaries who did not qualify for PHP services. The ineligible beneficiaries attended treatment programs that were not legitimate so that ATC could bill Medicare for nearly $200 million in medically unnecessary services.
According to the plea agreement, Placeres’s participation in the fraud resulted in approximately $6.5 million in fraudulent billing to the Medicare program.
ATC, its management company, Medlink Professional Management Group Inc., and various owners, managers, doctors, therapists, patient brokers and marketers of ATC, were charged with various health care fraud, kickback, money laundering and other offenses in two indictments unsealed on Feb. 15, 2011. ATC, Medlink and more than 20 of the individual defendants charged in these cases have pleaded guilty or have been convicted at trial.
Today’s sentence was announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida; John V. Gillies, 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 A. Zink and James V. Hayes of the Fraud Section in the Justice Department’s Criminal Division. A related civil action is being handled by Vanessa I. Reed and Carolyn B. Tapie of the Civil Division and Assistant U.S. Attorney Ted L. Radway of the Southern District of Florida. The case was investigated by the FBI and HHS-OIG, and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida.
Since its inception in March 2007, the Medicare Fraud Strike Force operations in nine locations have charged more than 1,330 defendants who collectively have 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.
Justice Department to Monitor Elections in South CarolinaRead the Press Release
WASHINGTON – The Justice Department announced today that it will monitor primary elections on June 12, 2012, in Fairfield and Williamsburg Counties in South Carolina to ensure compliance with the Voting Rights Act of 1965. The Voting Rights Act prohibits discrimination in the election process on the basis of race, color or membership in a minority language group.
Under the Voting Rights Act, the Justice Department is authorized to ask the U.S. Office of Personnel Management (OPM) to send federal observers to jurisdictions that are certified by the attorney general or by a federal court order. Federal observers will be assigned to monitor polling place activities in Williamsburg County based on the attorney general’s certification. The observers will watch and record activities during voting hours at polling locations in these counties, and a Civil Rights Division attorney will coordinate the federal activities and maintain contact with local election officials.
In addition, Justice Department personnel will monitor polling place activities in Fairfield County. A Civil Rights Division attorney will coordinate federal activities and maintain contact with local election officials.
Each year, the Justice Department deploys hundreds of federal observers from OPM, as well as departmental staff, to monitor elections across the country. To file complaints about discriminatory voting practices, including acts of harassment or intimidation, voters may call the Voting Section of the Justice Department’s Civil Rights Division at 1-800-253-3931.
Visit www.justice.gov/crt/voting/index.php for more information about the Voting Rights Act and other federal voting laws.
Friday 8 June 2012
Statement of Attorney General Eric Holder on the Assignment of U.S. Attorneys to Lead Investigations of Possible Unauthorized Disclosures of Classified InformationRead the Press Release
Attorney General Eric Holder issued the following statement today on the assignment of U.S. Attorneys to lead investigations of possible unauthorized disclosures of classified information:
“Today, I assigned U.S. Attorney for the District of Columbia Ronald C. Machen Jr. and U.S. Attorney for the District of Maryland Rod J. Rosenstein to lead criminal investigations into recent instances of possible unauthorized disclosures of classified information.
“These two highly-respected and experienced prosecutors will be directing separate investigations currently being conducted by the FBI. I have every confidence in their abilities to doggedly follow the facts and the evidence in the pursuit of justice wherever it leads.
“In carrying out their assignments, U.S. Attorneys Machen and Rosenstein are fully authorized to prosecute criminal violations discovered as a result of their investigations and matters related to those violations, consult with members of the Intelligence Community and follow all appropriate investigative leads within the Executive and Legislative branches of government.
“I have notified members of Congress and plan to provide more information, as appropriate, to members of the Judiciary and Intelligence Committees.
“The unauthorized disclosure of classified information can compromise the security of this country and all Americans, and it will not be tolerated. The Justice Department takes seriously cases in which government employees and contractors entrusted with classified information are suspected of willfully disclosing such classified information to those not entitled to it, and we will do so in these cases as well.”
Justice Department Settles Lawsuit with United Airlines<br /> <br /> to Enforce Employment Rights of Air National GuardsmanRead the Press Release
The Justice Department announced today that it has reached a settlement with United Airlines Inc., resolving TenEyck LaTourrette’s allegation that the airline violated the Uniformed Services Employment and Reemployment Rights Act (USERRA) by under compensating his retirement plan during his military service. LaTourrette is currently a major serving in the Colorado Air National Guard and a first officer for United Airlines.
LaTourrette alleged that United Airlines based its pension contributions on a minimum monthly schedule, rather than using LaTourrette’s actual schedule during the 12 months preceding his military obligations, as required by USERRA. Among the protections provided by USERRA are provisions related to the pension benefits a service member receives from his civilian employer. As a general matter, Section 4318 under USERRA provides that a service member’s pension benefits will continue to accrue while he is on active duty. To that end, USERRA requires an employer to make contributions to the pension fund of a deployed reservist “in the same manner and to the same extent the allocation occurs for other employees during the period of service.”
“This nation relies on the members of our National Guard and reserve, and this settlement exemplifies our efforts to ensure that they can serve their nation without penalty from their employers,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division.
Under the terms of the settlement, United Airlines will fully compensate LaTourrette for all deficient pension payments, plus any associated earnings, in full satisfaction of any and all claims. The settlement, if approved by the court, would resolve all of the allegations that United Airlines violated USERRA with respect to LaTourrette’s pension claim.
The lawsuit was initially filed after the Veterans’ Employment and Training Service (VETS) of the Department of Labor referred LaTourrette’s complaint to the Justice Department upon completion of its investigation and failed settlement efforts. The Department of Labor and Justice Department work cooperatively together to protect the jobs and benefits of National Guard and Reserve service members upon their return to civilian life. More information about USERRA is available at www.dol.gov/vets/programs/userra/main.htm.
Related Materials:
LaTourrette v. United Airlines - Consent Decree
Former Alabama Resident Sentenced to 53 Months in Prison<br /> <br /> for Tax EvasionRead the Press Release
William Paul, a self-described “bishop,” was sentenced yesterday to 53 months in federal prison for tax evasion, the Justice Department and Internal Revenue Service (IRS) announced. Paul was convicted on Dec. 1, 2011, after a four-day jury trial, of four counts of evasion of his wife’s 2004 through 2007 individual income taxes and of one count of failing to file a tax return. On Nov. 16, 2011, his wife, Donna Paul, a board-certified physician, pleaded guilty to one count of tax evasion and one count of filing a false individual income tax return. She was also sentenced yesterday to three years of probation, including six months of home confinement and 200 hours of community service. U.S. District Judge Mark E. Fuller also ordered the Pauls to pay $85,396 in restitution to the IRS. Both William Paul and Donna Paul are former residents of Montgomery, Ala.
According to evidence introduced at trial and documents filed with Donna Paul’s plea agreement, Donna and William Paul owned and operated a medical practice in Montgomery, which was registered as a non-profit organization. The Pauls attempted to evade the assessment and payment of Donna Paul’s income by falsely characterizing her income as loans, by making false statements to IRS employees, and by deliberately causing the non-profit organizations to not file tax returns.
Evidence at trial further showed that Donna Paul did not timely file federal individual income tax returns for the years 2004 through 2007. On April 5, 2011, the day special agents from IRS-Criminal Investigation arrested her, Donna Paul filed four false individual income tax returns for tax years 2004 through 2007. She testified at trial that none of these tax returns included money she earned from her medical practice.
Based on testimony at trial, William Paul had not filed a federal income tax return since the 1980s. Donna Paul also testified that William Paul ran the business side of the medical practice, initially called “Rheumatology Specialists of Central Alabama,” then “Rheumatology Specialists Arthritis and Osteoporosis Center,” then “Children and Adult Arthritis and Osteoporosis Center.”
Kathryn Keneally, Assistant Attorney General of the Justice Department’s Tax Division, thanked special agents of IRS-Criminal Investigation, who investigated the case, Tax Division Trial Attorneys Justin Gelfand and Michael Boteler, who prosecuted the case, and George L. Beck Jr., U.S. Attorney for the Middle District of Alabama, and his entire office for their assistance in the prosecution.
American Samoa Department of Education Official Sentenced to 35 Months in Prison for Witness Tampering and Obstruction of JusticeRead the Press Release
WASHINGTON – Paul Solofa, the former chief financial officer for the Department of Education for the government of the U.S. Territory of American Samoa was sentenced today to 35 months in prison following his conviction earlier this year for his efforts to obstruct a federal grand jury and law enforcement investigation into a bribery scheme, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division.
The sentence was imposed by U.S. District Court Judge Reggie B. Walton in the District of Columbia. After a four-day trial in January 2012, a federal jury in the District of Columbia found Solofa, 50, guilty of one count of witness tampering and one count of obstruction of justice.
According to evidence presented at trial, in approximately early 2008, federal authorities began conducting an investigation into allegations of cash bribes and kickbacks paid by vendors to officials of the American Samoa Government in connection with the government’s purchase of school bus parts and services.
According to the trial evidence, Solofa met on April 3, 2009, with a school bus parts vendor who told Solofa that the FBI was interested in interviewing the vendor regarding the bus parts investigation. Solofa, in a recorded meeting, allegedly told the vendor that, “They cannot do anything with cash. Nothing. They cannot do anything with cash. They cannot track down you on cash. Because even if you say you gave me cash I'll tell them ‘no.’ They cannot take your word on cash. Because that’s hearsay. So you know, but the best thing for you to do is ‘nope, I never give them any cash, I never’ – because that will open up the whole operation . . . You get what I am saying. All you do is just tell them ‘no, yes, no, yes,’ period.”
In addition, according to the evidence presented at trial, Solofa met on April 14, 2009, with the same bus parts vendor, who told Solofa that a grand jury subpoena requiring production of specific documents and records, some of which related to Solofa and to the bus parts kickback scheme, would be issued shortly. After discussing how to respond, Solofa told the vendor that, as for documents he did not want to produce, “[t]he only way to do it with those copies is burn it. That way, they won’t see it, and you won’t worry that they might see it, you know. . . . Just burn it, and nobody has a copy.”
The head of the School Bus Division for the American Samoa Department of Education, Gustav Nauer, 47, was also convicted for his role in the bribery scheme. On June 4, 2012, Nauer was sentenced to 25 months in prison.
This case was prosecuted by Principal Deputy Chief Raymond N. Hulser and Trial Attorney Tim Kelly of the Public Integrity Section in the Justice Department’s Criminal Division. The case was investigated by the FBI; the Office of the Inspector General for the U.S. Department of Education; and the Office of the Inspector General for the U.S. Department of the Interior.
Thursday 7 June 2012
Two Northern California Real Estate Investors Agree to Plead Guilty to Bid Rigging at Public Foreclosure AuctionsRead the Press Release
Two Northern California real estate investors have agreed to plead guilty for their roles in conspiracies to rig bids and commit mail fraud at public real estate foreclosure auctions in Northern California, the Department of Justice announced.
Felony charges were filed today in the U.S. District Court for the Northern District of California in Oakland, Calif., against Douglas Ditmer of San Ramon, Calif. and Keith Slipper of Oakland.
To date, as a result of the department’s ongoing antitrust investigation into bid rigging and fraud at public real estate foreclosure auctions in Northern California, 24 individuals, including Ditmer and Slipper, have agreed to plead or have pleaded guilty.
“By agreeing not to compete with one another in the bidding process, these investors illegally profited and undermined the integrity of the real estate market,” said Scott D. Hammond, Deputy Assistant Attorney General of the Antitrust Division’s criminal enforcement program. “The conspiracy eliminated competition and prevented lenders and distressed homeowners from getting fair market prices for their property.”According to court documents, Ditmer and Slipper participated in conspiracies to rig bids and commit mail fraud by agreeing to stop bidding or to refrain from bidding for properties at public foreclosure auctions in Contra Costa and Alameda counties, Calif., negotiating payoffs with other conspirators not to compete, purchasing selected properties at public auctions at suppressed prices, and participating in second, private auctions open only to members of the conspiracy, where the property was awarded to the conspirator who submitted the highest bid.
The department said Ditmer conspired with others to rig bids and commit mail fraud at public real estate foreclosure auctions in Contra Costa County beginning as early as July 2008 and continuing until about January 2011, and in Alameda County beginning as early as June 2007 and continuing until about January 2011. Slipper conspired with others to rig bids and commit mail fraud at public foreclosure auctions in Contra Costa County beginning as early as June 2008 and continuing until about December 2010, and in Alameda County beginning as early as March 2009 and continuing until about May 2009
“The FBI continues to work closely with the Antitrust Division to target those individuals who engage in fraudulent bid rigging and other anticompetitive activities at foreclosure auctions,” said FBI Special Agent in Charge Stephanie Douglas of the San Francisco Field Office. “We are committed to bringing to justice those who engage in illegal and unfair practices that adversely impact legitimate home buyers and sellers.”
The department said that the primary purpose of the conspiracies was to suppress and restrain competition in order to obtain selected real estate offered at Contra Costa and Alameda county public foreclosure auctions at non-competitive prices. When real estate properties are sold at these auctions, the proceeds are used to pay off the mortgage and other debt attached to the property, with remaining proceeds, if any, paid to the homeowner. According to court documents, these conspirators paid and received money that otherwise would have gone to pay off the mortgage and other holders of debt secured by the properties, and, in some cases, the defaulting homeowner.
Each violation of the Sherman Act carries a maximum penalty of 10 years in prison and a $1 million fine for individuals. The maximum fine for the Sherman Act charges may be increased to twice the gain derived from the crime or twice the loss suffered by the victim if either amount is greater than $1 million. Each count of conspiracy to commit mail fraud carries a maximum sentence of 30 years in prison and a $1 million fine. The government can also seek to forfeit the proceeds earned from participating in the conspiracy to commit mail fraud.
The charges today are the latest cases filed by the department in its ongoing investigation into bid rigging and fraud at public real estate foreclosure auctions in San Francisco, San Mateo, Contra Costa and Alameda counties, Calif.
The ongoing investigation into fraud and bid rigging at certain real estate foreclosure auctions in Northern California is being conducted by the Antitrust Division’s San Francisco Office and the FBI’s San Francisco office. Anyone with information concerning bid rigging or fraud related to public real estate foreclosure auctions should contact the Antitrust Division’s San Francisco Office at 415-436-6660, visit www.justice.gov/atr/contact/newcase.htm or call the FBI tip line at 415-553-7400.
Today’s charges are part of efforts underway by President 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 on the task force, visit www.StopFraud.gov.**The fraud charge(s) referenced in this press release were subsequently dismissed on the government’s motion.**
Texas-based Medical Device Manufacturer Pays U.S. $34 Million<br /> to Settle False Claims Act AllegationsRead the Press Release
Orthofix Inc., a Texas-based manufacturer of medical devices, has agreed to pay the United States $34,234,263 to settle allegations under the civil False Claims Act relating to the company’s sale of bone growth stimulator devices, the Justice Department announced today. The company has also agreed to plead guilty to a felony of obstruction of a federal audit, and to pay a $7,765,737 criminal fine.
The civil settlement announced today resolves a whistleblower lawsuit that was filed by Jeffrey Bierman. That lawsuit alleged that the McKinney, Texas-based company improperly waived patient co-payments, thus misstating their true cost and resulting in overpayments by federal programs; paid kickbacks to physicians and their staffs in the form of “fitter fees,” referral fees and other comparable fees, to induce the use of Orthofix products; caused the submission of falsified certificates of medical necessity; and failed to advise patients of their right to rent rather than purchase Orthofix products.
“The Justice Department has longstanding concerns about kickbacks and the routine waiver of co-payments, because they can impose significant costs on federal health programs that are not medically justified,” said Stuart F. Delery, Acting Assistant Attorney General for the Civil Division. “The resolution of this matter yielded a substantial recovery for taxpayers, and should deter other companies from engaging in such conduct in the future.”
The company’s criminal guilty plea involved its failure to disclose information concerning its practices regarding certificates of medical necessity to a Medicare contractor during a June 2008 audit. Five individual Orthofix employees had previously pleaded guilty to criminal charges in connection with this matter.
“This resolution, and the entire investigation, which has involved prosecution of a number of individuals, including a high level executive, demonstrates the government's unflagging commitment to prosecuting corporate and individual medical device fraud, and particularly to protecting Medicare from those who prey on it by fraudulent means," said Carmen M. Ortiz, U.S. Attorney for the District of Massachusetts.
As part of the settlement, Orthofix also agreed to enter into a corporate integrity agreement with the Office of Inspector General of the Department of Health and Human Services, which provides for procedures and reviews to be put in place to avoid and promptly detect conduct similar to that which gave rise to this matter.
“Criminals intent on placing profits from federal health programs over and above compliance should expect to tangle with authorities,” said Susan J. Waddell, Special Agent in Charge of the Office of Inspector General of the U.S. Department of Health and Human Services New England region. “Orthofix blatantly ordered sales staff to disregard Medicare rules, and conveniently looked away when medical records were altered and even forged.”
Under the False Claims Act, private citizens can bring suit on behalf of the government and share in any amounts that are obtained through that legal action. Mr. Bierman will receive $9,243,251 as his share of the civil settlement amount.
This resolution is part of the government’s emphasis on combating health care fraud and another step for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced by Attorney General Eric Holder and Kathleen Sebelius, Secretary of the Department of Health and Human Services in May 2009. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover more than $7.5 billion since January 2009 in cases involving fraud against federal health care programs. The Justice Department’s total recoveries in False Claims Act cases since January 2009 are over $11.1 billion.
The case was handled by the Justice Department’s Civil Division, the U.S. Attorney’s Office for the District of Massachusetts and the Office of Inspector General of the Department of Health and Human Services. The claims settled by this agreement are allegations only, and there has been no determination of liability.
Justice Department Seeks to Intervene in Lawsuit Alleging Sex Discrimination Against Summit County, Ohio, and Summit County SheriffRead the Press Release
The Justice Department announced today that it has moved to intervene in Hawkins, et al. v. Summit County, Ohio, et al., a private lawsuit alleging sex discrimination by Summit County, Ohio, and the Summit County Sheriff, as well as other defendants. The United States’ complaint in intervention alleges that the county and sheriff discriminated against twenty female deputy sheriffs who filed charges of discrimination with the Equal Employment Opportunity Commission (EEOC) and other similarly-situated female deputies because of their sex and engaged in a pattern or practice of sex discrimination in violation of Title VII of the Civil Rights Act of 1964.
The complaint alleges that in January 2012, the county and sheriff implemented a sex-segregated job assignment system at the Summit County Jail in Akron, Ohio. Prior to January 2012, female deputies at the jail were allowed to hold job assignments performing intake and security-related functions regardless of the gender of the inmates being supervised. Under the new job assignment system, female deputies are limited to performing intake and security-related functions involving female inmate supervision only. As a result of the implementation of this new job assignment system, many female deputies lost their previous job assignments, previous shifts, were unable to pick their preferred job assignments or were unable to pick their preferred shifts. The complaint in intervention seeks a court order that would require the county and sheriff to utilize a lawful job assignment system and to develop and institute policies that would prevent its employees from being subjected to discrimination based upon sex. The relief sought would also include monetary relief for the 20 charging parties and other similarly situated female deputies as compensation for damages sustained as a result of the alleged discrimination.
“The Department of Justice will not tolerate discrimination in employment on the basis of sex,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “Through our partnership with the EEOC, the department continues its commitment to vigorously enforcing the right of employees to be free from sex discrimination in the work place.”
Twenty female deputies filed charges of sex discrimination with the Cleveland District Office of the EEOC. After investigating these charges, finding reasonable cause to believe that the charging parties were discriminated against because of their sex, and unsuccessfully attempting to conciliate the matter, the EEOC referred the charges to the Department of Justice. This lawsuit is brought by the Department of Justice as a result of a project designed to ensure vigorous enforcement of Title VII against state and local governmental employers by enhancing cooperation between the EEOC and the Civil Rights Division.
“The work of the commission is made more effective and efficient with interagency coordination,” said Jacqueline A. Berrien, chair of the Equal Employment Opportunity Commission. “Our ongoing project with the Justice Department helps to ensure that employees receive the full protection of the laws prohibiting workplace discrimination.”
“We are committed to working for equal opportunity for all,” said Steven M. Dettelbach, U.S. Attorney for the Northern District of Ohio. “Female deputies are capable of performing jobs they’re restricted from under Summit County’s current system, and this lawsuit is designed to end that discriminatory practice.”
Title VII prohibits discrimination in employment on the basis of sex, race, color, national origin or religion, and prohibits retaliation against an employee who opposes an unlawful employment practice, or because the employee has made a charge or participated in an investigation, proceeding or hearing under the Act. More information about Title VII and other federal employment laws is available at www.usdoj.gov/crt/emp/index.html.
The EEOC enforces federal laws prohibiting employment discrimination. Further information about the EEOC is available on its website at www.eeoc.gov.
Related Materials:
Summit County, Ohio, et al. - Memorandum in Support
Summit County, Ohio, et al. - Motion to InterveneJustice Department Files Complaint Against Forsyth County, North Carolina, Sheriff for Violating the Employment Rights of Army National Guard SoldierRead the Press Release
WASHINGTON – The Justice Department announced today the filing of a complaint in U.S. District Court for the Middle District of North Carolina against Forsyth County, N.C., and the county sheriff, William T. Schatzman, for violating the employment rights of North Carolina Army National Guard soldier Michael Russell under the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA).
The department’s complaint alleges that Sheriff Schatzman and Forsyth County violated USERRA by terminating Russell’s employment with the Forsyth County Sheriff’s Office (FCSO) without cause and without notice within one year after his reemployment following his return from active military duty. Russell, an Iraq War veteran who is currently serving with the Army National Guard in Afghanistan, had worked as a deputy sheriff and sergeant deputy sheriff with FCSO since 1989. In February 2010, Russell completed a one-year deployment to Iraq with the North Carolina Army National Guard and returned to his position with Forsyth County as a sergeant deputy sheriff. On Nov. 29, 2010, less than one year following Russell’s reinstatement to his position, Sheriff Schatzman and Forsyth County discharged Russell from his employment without cause.
According to the Justice Department’s complaint, Russell’s employment was terminated because of Sheriff Schatzman’s belief that Russell had supported the election campaign of another candidate for Forsyth County sheriff, Dave Griffith. Russell did not support Griffith’s campaign for Forsyth County Sheriff. With the objective of winning a motorcycle rather than the purpose of supporting Griffith’s campaign, Russell purchased raffle tickets, at total cost of $100, for a motorcycle raffle whose proceeds went to Griffith’s campaign. Sheriff Schatzman and Forsyth County failed to provide notice to Russell that purchase of tickets for a raffle sponsored by a campaign would constitute cause for discharge.
“The men and women who wear our nation’s uniform need to know that they will be protected from unjust terminations when they return from significant periods of military service,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The Civil Rights Division is committed to aggressive enforcement of USERRA to protect our brave service members, whose rights do not end with their first day back on the job.”
Russell initially filed a complaint with the Labor Department’s Veterans’ Employment and Training Service, which investigated the matter, determined that the complaint had merit and referred the matter to the Justice Department. The Justice Department’s Civil Rights Division subsequently decided to represent Russell in this matter and filed this lawsuit on his behalf.
USERRA prohibits employers from discriminating against service members with respect to employment opportunities based on their past, current or future uniformed service obligations. USERRA also provides service members, such as Russell, special protection from discharge from civilian employment after returning from uniformed service, such as a deployment. Under USERRA, if an individual served over 180 days before returning to civilian employment, then he or she may not be discharged from the civilian employment position within one year, except for cause. In order to discharge an individual for conduct during this protected period, an employer must show that it was reasonable to discharge the employee for that conduct, and that the employee had notice that the conduct would constitute cause for discharge.
Among other things, the suit seeks compensation for Russell’s lost wages and benefits and reinstatement of Russell’s employment with FCSO.
This case is being handled by the Employment Litigation Section of the Justice Department’s Civil Rights Division.
Additional information about USERRA can be found on the Justice Department websites www.usdoj.gov/crt/emp and www.servicemembers.gov, as well as the Labor Department website www.dol.gov/vets/programs/userra/main.htm.
Related Materials:
Complaint (PDF)
Four More Defendants Plead Guilty in Indiana to Participating in International Child Pornography Distribution RingRead the Press Release
WASHINGTON – Four men have pleaded guilty in the Southern District of Indiana for their participation in an international child pornography distribution ring, Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and First Assistant U.S. Attorney Josh Minkler of the Southern District of Indiana announced today.
The guilty pleas were entered yesterday in U.S. District Court in Indianapolis and are the result of “Operation Bulldog,” a multi-jurisdictional effort to dismantle and prosecute the members of the international child pornography distribution ring. A total of nine defendants have been prosecuted in the Southern District of Indiana for their participation in the group.
“This operation uncovered a dangerous and depraved group of criminals who were devoted to trading sexually explicit images of children under the age of five,” said Assistant Attorney General Breuer. “As a result of our investigation and prosecution, seven members of the group – including three of the four men who pleaded guilty yesterday – are now serving lengthy prison terms, and two others are awaiting sentencing. Child pornography rings pose a threat to children around the world, and we will continue to aggressively pursue those who participate in such groups.”“I applaud the work of the investigators and prosecutors on this case, who took a search warrant in Bloomington and successfully brought to justice defendants from all over the world,” said First Assistant U.S. Attorney Minkler. “More importantly, as a result of this 18 month operation, more than two dozen children here in Indiana and across the globe have been rescued from their tormentors.”
Shaun Kuykendall, 32, of South Carolina; Richard Szulborski, 21, of Pennsylvania; Javahn Algere, 23, of Louisiana; and Jeremy Labrec, 22, of Texas, pleaded guilty yesterday before U.S. Judge Jane Magnus-Stinson. In addition, Kuykendall was sentenced to 25 years in prison, Szulborski was sentenced to 15 years in prison and Algere was sentenced to 12 years in prison. Labrec will be sentenced at a later date.
On Nov. 17, 2010, the FBI and state and local law enforcement partners executed a federal search warrant at David Bostic’s residence in Bloomington, Ind. Investigators determined that Bostic, 26, possessed hundreds of images and videos depicting children engaged in sexually explicit acts, and that he had actively distributed this child pornography to other individuals through various means. According to court documents, investigators also discovered that Bostic had produced child pornography on multiple occasions over the previous two years, creating sexually explicit images of four minor females, all of whom were between the ages of two months and three years, as well as a minor male who was four years old. Evidence gathered at the scene demonstrated that Bostic had distributed the images of child pornography he produced to multiple individuals.
Bostic was arrested Nov. 17, 2010, and pleaded guilty to multiple charges in June 2011. He was sentenced on Nov. 22, 2011, to 315 years in prison, one of the longest sentences in Southern District of Indiana.
Following Bostic’s arrest, a review of the evidence determined that Bostic was a member of a large group of individuals trading sexually explicit images of children, primarily focused on child pornography depicting children under five years of age.
According to court documents, some of the images produced by Bostic depicting Indiana children were distributed among the members of the group. Within days of Bostic’s arrest, Operation Bulldog was launched to identify and apprehend the members of the group. Since then, more than 20 members of the group have been apprehended in the United States and abroad. WASHINGTON – Four men have pleaded guilty in the Southern District of Indiana for their participation in an international child pornography distribution ring, Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and First Assistant U.S. Attorney Josh Minkler of the Southern District of Indiana announced today.
The guilty pleas were entered yesterday in U.S. District Court in Indianapolis and are the result of “Operation Bulldog,” a multi-jurisdictional effort to dismantle and prosecute the members of the international child pornography distribution ring. A total of nine defendants have been prosecuted in the Southern District of Indiana for their participation in the group.
“This operation uncovered a dangerous and depraved group of criminals who were devoted to trading sexually explicit images of children under the age of five,” said Assistant Attorney General Breuer. “As a result of our investigation and prosecution, seven members of the group – including three of the four men who pleaded guilty yesterday – are now serving lengthy prison terms, and two others are awaiting sentencing. Child pornography rings pose a threat to children around the world, and we will continue to aggressively pursue those who participate in such groups.”“I applaud the work of the investigators and prosecutors on this case, who took a search warrant in Bloomington and successfully brought to justice defendants from all over the world,” said First Assistant U.S. Attorney Minkler. “More importantly, as a result of this 18 month operation, more than two dozen children here in Indiana and across the globe have been rescued from their tormentors.”
Shaun Kuykendall, 32, of South Carolina; Richard Szulborski, 21, of Pennsylvania; Javahn Algere, 23, of Louisiana; and Jeremy Labrec, 22, of Texas, pleaded guilty yesterday before U.S. Judge Jane Magnus-Stinson. In addition, Kuykendall was sentenced to 25 years in prison, Szulborski was sentenced to 15 years in prison and Algere was sentenced to 12 years in prison. Labrec will be sentenced at a later date.
On Nov. 17, 2010, the FBI and state and local law enforcement partners executed a federal search warrant at David Bostic’s residence in Bloomington, Ind. Investigators determined that Bostic, 26, possessed hundreds of images and videos depicting children engaged in sexually explicit acts, and that he had actively distributed this child pornography to other individuals through various means. According to court documents, investigators also discovered that Bostic had produced child pornography on multiple occasions over the previous two years, creating sexually explicit images of four minor females, all of whom were between the ages of two months and three years, as well as a minor male who was four years old. Evidence gathered at the scene demonstrated that Bostic had distributed the images of child pornography he produced to multiple individuals.
Bostic was arrested Nov. 17, 2010, and pleaded guilty to multiple charges in June 2011. He was sentenced on Nov. 22, 2011, to 315 years in prison, one of the longest sentences in Southern District of Indiana.
Following Bostic’s arrest, a review of the evidence determined that Bostic was a member of a large group of individuals trading sexually explicit images of children, primarily focused on child pornography depicting children under five years of age.
According to court documents, some of the images produced by Bostic depicting Indiana children were distributed among the members of the group. Within days of Bostic’s arrest, Operation Bulldog was launched to identify and apprehend the members of the group. Since then, more than 20 members of the group have been apprehended in the United States and abroad.
In addition to Bostic, Kuykendall, Szulborski, Algere and Labrec, the following defendants have pleaded guilty in the Southern District of Indiana: Danny L. Druck, 58, of Kentucky; Chris Reid, 37, of Michigan; Todd King, 41, of California. Reid was sentenced to 35 years in prison and Druck and King were each sentenced to eight years in prison. A plea agreement for another charged defendant, Nicholas King, 28, of Washington, has been filed in the Southern District of Indiana.
Additional defendants were identified in the course of this investigation and have been referred to federal prosecutors and law enforcement agencies in other districts across the country and around the world, including Sweden, Serbia, the Netherlands and the United Kingdom.
A total of more than two dozen children have been rescued as a result of Operation Bulldog. Efforts to identify additional defendants and victims in the United States and abroad are active and ongoing.
This case was investigated by the FBI, with local assistance from the Indiana State Police, the Kokomo, Ind., Police Department and the Brownsburg, Ind., Police Department.
The case was prosecuted by Assistant U.S. Attorney A. Brant Cook of the Southern District of Indiana and Trial Attorney Michael Grant of the Child Exploitation and Obscenity Section in the Justice Department’s Criminal Division.
The defendants sentenced were ordered to register as sex offenders and were sentenced to supervised release at the end of their prison term.
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.Co-Owner of Detroit-Area Therapy Company Sentenced to 30 Months for Medicare Fraud SchemeRead the Press Release
WASHINGTON – The co-owner of a Detroit-area physical and occupational therapy company was sentenced today to 30 months in prison for his leading role in a more than $1.9 million Medicare fraud scheme, announced the Department of Justice, the FBI and the Department of Health and Human Services (HHS).
Victor Jayasundera, 59, was sentenced by U.S. District Judge Avern Cohn in the Eastern District of Michigan. In addition to his prison term, Jayasundera was sentenced to three years of supervised release and was ordered to pay $855,484 in restitution, joint and several with his co-defendants.
Jayasundera pleaded guilty on Jan. 18, 2012, to the charges against him in a superseding indictment: one count of conspiracy to commit health care fraud and six counts of health care fraud. According to the superseding indictment, Jayausundera co-owned a company known as Jos Campau Physical Therapy with co-defendant Fatima Hassan. Jos Campau Physical Therapy did not have a Medicare provider number and was not entitled to bill Medicare for therapy services.
According to the superseding indictment and evidence presented at the trial of a co-defendant, Jos Campau paid kickbacks to recruiters who obtained Medicare beneficiary information and signatures needed to create fictitious physical and occupational therapy files. The Medicare beneficiaries pre-signed forms and visit sheets that were later falsified to indicate that they received therapy services that were never provided.
Jayasundera, a physical therapist, falsified patient evaluation forms and fictitious patient notes for physical therapy services that were never rendered. Jayasundera and his co-owner also hired and paid an occupational therapist and an uncertified occupational therapy assistant to falsify medical files. The occupational therapist created patient evaluation forms for beneficiaries whom she had never met, seen or evaluated. The uncertified therapy assistant fabricated and signed patient notes for occupational therapy visits. The uncertified therapy assistant did not provide the services reflected in the fictitious patient notes.
Jayasundera and his co-owner sold the fictitious physical and occupational therapy files to multiple fraudulent therapy companies that had obtained Medicare provider numbers. Those companies billed the fictitious files created by Jos Campau Physical Therapy to Medicare and paid kickbacks to Jos Campau Physical Therapy based on these billings. Jayasundera and his co-owner split the profits from the sale of the falsified files.
Between approximately June 2005 and May 2007, the false files created and sold by Jos Campau Physical Therapy resulted in the submission of approximately $1.9 million in fraudulent claims to the Medicare program for physical and occupational therapy services that were never rendered.
Jayasundera’s co-owner, Fatima Hassan, pleaded guilty on Aug. 25, 2011, for her role in the scheme, and on May 17, 2012, was sentenced to 48 months in prison. Carol Gant, the occupational therapist, and Vanessa Dowell, the uncertified occupational therapy assistant, also pleaded guilty in 2011. Tariq Mahmud, the owner of a Medicare provider company that bought and billed Jos Campau Physical Therapy’s fake files, was convicted at trial on Feb. 2, 2012, for his role in the scheme and is scheduled to be sentenced on July 19, 2012.
Today’s sentence was announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney for the Eastern District of Michigan Barbara L. McQuade; Special Agent in Charge Andrew G. Arena of the FBI’s Detroit Field Office; and Special Agent in Charge Lamont Pugh III of the HHS Office of Inspector General’s (OIG) Chicago Regional Office.
This case was prosecuted by Trial Attorney Catherine K. Dick and Assistant Chief Benjamin D. Singer of the Criminal Division’s Fraud Section. It was investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Michigan.
Since their inception in March 2007, the Medicare Fraud Strike Force operations in nine districts have charged more than 1,330 individuals who collectively have falsely billed the Medicare program for more than $4 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.
Wednesday 6 June 2012
Perth Amboy, New Jersey, to Upgrade Sewer System to Resolve Clean Water Act ViolationsRead the Press Release
WASHINGTON – The city of Perth Amboy, N.J., has agreed to make major improvements in its combined sewer system to protect people’s health and water quality under a legal agreement with the U.S. Environmental Protection Agency (EPA). Under the agreement, which was lodged by the Department of Justice in federal court today, the city will reduce the amount of sewage and other pollutants that flow out of 16 combined sewer points into the Raritan River and Arthur Kill. Combined sewer systems are sewers that are designed to collect rainwater runoff, domestic sewage and industrial wastewater in the same pipe.
Perth Amboy violated the Clean Water Act and its New Jersey Department of Environmental Protection discharge permit by failing to properly maintain and operate its sewer system, conduct regular inspections and have a pollution prevention plan in place. The city also violated a previously issued EPA order to address Clean Water Act violations.
“This settlement will require vital investments in sewer infrastructure that will help the city of Perth Amboy achieve compliance with the nation’s Clean Water Act. More than 70 percent of these repairs will take place in and benefit lower-income areas of the city,” said Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division of the Department of Justice. “This agreement will ensure that Perth Amboy’s combined sewer system is properly operated and maintained to minimize the number of untreated discharges to the Raritan River and the Arthur Kill.”
“Combined sewer overflows are a very serious public health and environmental problem in a number of New Jersey communities,” said Judith A. Enck, EPA Regional Administrator. “The improvements that Perth Amboy will make under the agreement with the EPA will improve water quality and protect community residents from exposure to raw sewage. Sewer upgrades made pursuant to this settlement are a long-term investment in public health and clean water.”
During periods of heavy rainfall or snow melt, the volume of wastewater in a combined sewer system can exceed the capacity of the sewer system or wastewater treatment plant. When this happens, combined sewer systems overflow and discharge sewage directly to nearby water bodies. These overflows can contain not only storm water, but also untreated human and industrial waste, toxic materials and debris. It is estimated that almost 370 million gallons of sewage flow into the Raritan River and Arthur Kill through Perth Amboy’s combined sewer system each year. Across New Jersey, 30 combined sewer systems discharge 23 billion gallons of sewage and other pollutants each year into all of New Jersey’s major water bodies.
Under the agreement, Perth Amboy will spend about $5.4 million for the repair, upgrade and expansion of the city's combined sewer system and will additionally pay a $17,000 penalty. The city has agreed to increase the amount of wastewater that reaches the treatment plant and reduce its combined sewer overflows into the Raritan River and Arthur Kill. In addition, under the agreement, Perth Amboy will conduct annual inspections of all of its combined sewer system control facilities and will develop and implement a combined sewer overflow pollution prevention plan.
In response to the EPA’s earlier enforcement efforts, Perth Amboy has already completed a thorough inspection and engineering assessment of its sewer system. As a result of that study, the city will develop a plan to fix problems identified and do further work to separate the pipes so that some pipes will only carry wastewater from buildings to the wastewater treatment plant instead of a combination of domestic wastewater and stormwater. Work already underway and work that will be conducted under today’s agreement will be completed by Dec. 31, 2016.
The consent decree is subject to a 30-day public comment period and final court approval. It can be viewed at www.justice.gov/enrd/Consent_Decrees.html.
For more information about the combined sewer overflow problem in New Jersey, visit www.epa.gov/region2/water/sewer-report-3-2011.pdf.
For more information about combined sewer overflow systems, visit http://estuaries.noaa.gov/Estuarylive/VideoGallery.aspx?ID=43.
Nevada Lobbyist Harvey Whittemore Indicted for Making Unlawful Campaign Contributions and Lying to InvestigatorsRead the Press Release
WASHINGTON – Nevada lobbyist and lawyer Harvey Whittemore was indicted today in the District of Nevada by a federal grand jury on charges that he made unlawful campaign contributions to an elected member of Congress, caused false statements to be made to the Federal Election Commission (FEC) and lied to the FBI, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and Daniel G. Bogden, U.S. Attorney for the District of Nevada.
F. Harvey Whittemore, 55, of Reno, Nevada, was charged with one count of making excessive campaign contributions, one count of making contributions in the name of others and two counts of making a false statement to a federal agency. Whittemore is scheduled to appear before a U.S. Magistrate Judge in Reno, Nevada, on June 7, 2012, at 3:00 p.m. PDT for arraignment. If convicted, Whittemore faces up to five years in prison and a $250,000 fine on each count.
“Mr. Whittemore allegedly used his family members and employees as conduits to make illegal contributions to the campaign committee of an elected member of Congress,” said Assistant Attorney General Breuer. “Furthermore, according to today’s indictment, he attempted to conceal his crimes by lying to the FBI. Our campaign finance laws establish maximum limits on individual contributions, and failure to adhere to those rules jeopardizes the integrity of our elections. We will continue to pursue those who engage in such conduct.”
“We remain committed to investigating and prosecuting illegal behavior that jeopardizes the integrity of our elections and corrupts our political process,” said U.S. Attorney Bogden. “Campaign finance laws exist to protect that process and criminal violations of those laws will be vigorously prosecuted by this office.”
Under federal law, it is illegal to contribute to a federal political campaign using a conduit in order to hide the identity of the true contributor. Federal law also sets limits on the amount that an individual can contribute to a campaign. In 2007, the maximum individual contribution was $2,300 for a primary election and $2,300 for a general election; thus, the maximum for one candidate was $4,600.
The indictment states that Whittemore was the chief executive of Company A. On about Feb. 21, 2007, Whittemore allegedly met with an elected member of Congress (identified in the indictment as Federal Elected Official 1), and agreed to try to collect $150,000 in contributions for the elected official’s campaign committee by March 31, 2007, which marked the end of a legally required quarterly reporting period. Aware of the strict limits on individual federal campaign contributions, Whittemore allegedly devised a scheme and plan whereby he used family members, employees of Company A, and their respective spouses, as prohibited conduits through which to funnel his own money to the federal elected official’s campaign committee under the guise of lawful campaign contributions. This scheme allowed Whittemore to make an individual campaign donation to the federal elected official in excess of the limits established by federal law. Whittemore allegedly concealed the scheme from the FEC, the elected official and the elected official’s campaign committee.
In March 2007, Whittemore allegedly solicited the employees, family members and their respective spouses to make the maximum campaign donations to the federal elected official and reimbursed the contributors with personal checks and wire transfers. The indictment alleges that Whittemore attempted to conceal some of the reimbursements he made to the contributors by telling the employees that they were bonuses. Whittemore also allegedly paid the contributors additional money on top of the reimbursements. If a conduit contributed $4,600, Whittemore reimbursed the individual $5,000; likewise if a couple contributed $9,200, he paid the couple $10,000.
On about March 28, 2007, Whittemore allegedly caused a Company A employee to transmit $138,000 in contributions to the federal elected official’s campaign committee, the vast majority of which were conduit contributions that Whittemore had personally funded in order to satisfy his pledge to the federal elected official. On April 15, 2007, the campaign committee then unknowingly filed false reports with the FEC stating that the conduits had made the contributions, when in fact, Whittemore had made them.
On about Feb. 9, 2012, Whittemore allegedly made false statements during an interview with FBI agents by claiming that he never made a request for campaign contributions; never asked employees of company A to contribute to the elected official’s campaign; never provided payments to anyone with the expectation that they would serve as reimbursements for campaign contributions; never spoke to any candidate about raising money for the candidate; and never gave money to family members to make political contributions.
The case is being investigated by the FBI and is being prosecuted by First Assistant U.S. Attorney Steven W. Myhre, Assistant U.S. Attorney Sue Fahami and Trial Attorney Eric G. Olshan of the Public Integrity Section in the Justice Department’s Criminal Division.
An indictment contains only charges and is not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
Home Health Agency Owner Pleads Guilty in Connection with Detroit Fraud SchemeRead the Press Release
WASHINGTON – Detroit-area resident Muhammad “Sib” Ahmad pleaded guilty today for his role in organizing a more than $13 million home health care fraud and money laundering scheme, announced the Department of Justice, the FBI and the Department of Health and Human Services (HHS).
Ahmad, 33, pleaded guilty today before U.S. District Judge Gerald E. Rosen of the Eastern District of Michigan to one count of conspiracy to commit health care fraud and one count of money laundering.
According to court documents, beginning in July 2008, Ahmad and his co-conspirators acquired ownership and control of three Detroit-area home health agencies: Physicians Choice Home Health Care LLC, First Care Home Health Care LLC and Quantum Home Care Inc. Ahmad admitted that these home health agencies billed Medicare for visits that never occurred. Between July 2008 and September 2011, Ahmad and his co-conspirators submitted or caused the submission of more than $13 million in fraudulent home health claims to the Medicare program by Physicians Choice, First Care, Quantum and a fourth home health agency owned by co-conspirators, Moonlite Home Care Inc. Medicare paid more than $12 million to the companies that Ahmad beneficially owned in whole or in part.
Ahmad admitted that he and his co-conspirators directed the payment of non-licensed individuals who represented themselves as doctors to Medicare beneficiaries. In addition, Ahmad admitted to paying and directing various medical professionals, including nurses, physical therapists and physical therapy assistants, to create fictitious patient files to document purported home health services that were never rendered.
Ahmad also admitted that he and his co-conspirators paid and directed the payment of kickbacks to beneficiary recruiters who obtained Medicare beneficiaries’ information needed to bill Medicare for home health services, including physical therapy and skilled nursing, which were never rendered. The Medicare beneficiaries sometimes pre-signed forms and visit sheets that were later falsified to indicate that they received home health services that they had never received. Other times, the Medicare beneficiaries’ signatures were forged on forms and visit sheets to indicate that they received home health services that, in fact, were never provided.
Additionally, Ahmad admitted that he incorporated a shell company known as Century Home Care for the purpose of laundering the proceeds of the health care fraud scheme.
Today’s guilty plea was announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney for the Eastern District of Michigan Barbara L. McQuade; Special Agent in Charge Andrew G. Arena of the FBI’s Detroit Field Office; and Special Agent in Charge Lamont Pugh III of the HHS Office of Inspector General’s (OIG) Chicago Regional Office.
This case was prosecuted by Trial Attorney Catherine K. Dick of the Criminal Division’s Fraud Section. It was investigated by the FBI and HHS-OIG, and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S.
Attorney’s Office for the Eastern District of Michigan.Since 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.
Autoliv Inc. and a Yazaki Corp. Executive Agree to Plead Guilty to <br /> Price Fixing on Automobile Parts Installed in U.S. CarsRead the Press Release
WASHINGTON – Stockholm-based Autoliv Inc. has agreed to plead guilty for its role in a conspiracy to fix prices of seatbelts, airbags and steering wheels installed in U.S. cars to one automobile manufacturer and a separate conspiracy to fix prices of seatbelts to another, the Department of Justice announced today. This is the first case filed relating to occupant safety systems sold to auto manufacturers as part of the department’s ongoing antitrust auto parts investigation. An executive of Japan-based Yazaki Corporation has also agreed to plead guilty for his role in a separate conspiracy to fix prices of automotive wire harnesses and related products installed in U.S. cars.Autoliv has agreed to pay a $14.5 million criminal fine and to cooperate with the department’s ongoing investigation. Kazuhiko Kashimoto, a Yazaki executive, has agreed to serve 14 months in a U.S. prison, to pay a $20,000 criminal fine and to cooperate with the department’s ongoing investigation. The plea agreements for both Autoliv and Kashimoto are subject to court approval.
“By meeting in secret and agreeing to allocate the supply of various automotive parts, the conspirators colluded to rip off automotive manufacturers in the United States and abroad,” said Scott D. Hammond, Deputy Assistant Attorney General of the Antitrust Division’s criminal enforcement program. “These conspiracies eliminated competition and resulted in inflated prices to automotive manufacturers for parts in cars sold to U.S. consumers.”
According to a two-count felony charge filed today in the U.S. District Court for the Eastern District of Michigan in Detroit, Autoliv engaged in conspiracies to rig bids for, and to fix, stabilize and maintain the prices of seatbelts, airbags and steering wheels sold to automakers in the United States and elsewhere.
According to court documents, Autoliv’s involvement in the conspiracy to fix prices of seatbelts, airbags and steering wheels lasted from at least as early as March 2006 until at least February 2011, and its involvement in the second conspiracy to fix prices of seatbelts lasted from at least as early as May 2008 to at least February 2011. Autoliv and its co-conspirators carried out the conspiracies by agreeing, during meetings and conversations, to allocate the supply of seatbelts, airbags and steering wheels on a model-by-model basis. The department said that Autoliv and the co-conspirators sold the occupant safety parts at noncompetitive prices to automakers in the United States and elsewhere.
According to a one-count felony charge also filed today in the U.S. District Court in Detroit, Kashimoto, along with co-conspirators, engaged in a conspiracy to rig bids for, and to fix, stabilize and maintain the prices of automotive wire harnesses and related products sold to a customer in the United States and elsewhere. Automotive wire harnesses are automotive electrical distribution systems used to direct and control electronic components, wiring and circuit boards. Related products include automotive electrical wiring, lead wire assemblies, cable bond, automotive wiring connectors, automotive wiring terminals, electronic control units, fuse boxes, relay boxes and junction blocks.
According to court documents, Kashimoto’s involvement in the automotive wire harness conspiracy lasted from on or about January 2000 until at least September 2007. During the time of the conspiracy, Kashimoto held various management positions in Columbus, Ohio, and Japan for the Honda Sales and Honda Business Unit of Yazaki. Kashimoto and his co-conspirators carried out the conspiracy by agreeing, during meetings and conversations, to allocate the supply of automotive wire harnesses on a model-by-model basis and to coordinate price adjustments requested by an automobile manufacturer in the United States and elsewhere. The department said that Kashimoto and the co-conspirators sold automotive wire harnesses at non-competitive prices and engaged in meetings and conversations for the purpose of monitoring and enforcing adherence to the agreed-upon bid-rigging and price-fixing scheme. In order to keep their conduct secret, Kashimoto and his co-conspirators used code names and met at private residences and remote locations, the department said in court documents.
Including Autoliv and Kashimoto, six companies and 10 individuals have been charged in the department’s ongoing investigation into price fixing and bid rigging in the auto parts industry. Furukawa Electric Co. Ltd, DENSO Corporation, Yazaki Corporation and G.S. Electech Inc. pleaded guilty and were sentenced to pay a total of more than $750 million in criminal fines. Fujikura Ltd has agreed to plead guilty. Additionally, seven of the individuals–Junichi Funo, Hirotsugu Nagata, Tetsuya Ukai, Tsuneaki Hanamura, Ryoji Kawai, Shigeru Ogawa and Hisamitsu Takada–have been sentenced to pay criminal fines and to serve jail sentences ranging from a year and a day to two years each. Makoto Hattori has agreed to plead guilty and Norihiro Imai has pleaded guilty and awaits sentencing.
Both Autoliv and Kashimoto are charged with price fixing in violation of the Sherman Act, which carries a maximum penalty of 10 years in prison and a $1 million fine for individuals and maximum penalty of a $100 million criminal fine for corporations. The maximum fine for both a company and an individual may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.
Today’s prosecution arose from an ongoing federal antitrust investigation into price fixing, bid rigging and other anticompetitive conduct in the automotive parts industry, which is being conducted by the Antitrust Division’s National Criminal Enforcement Section and the FBI’s Detroit Field Office with the assistance of the FBI headquarters’ International Corruption Unit. Anyone with information concerning the focus of this investigation is urged to call the Antitrust Division’s National Criminal Enforcement Section at 202-307-6694 visit www.justice.gov/atr/contact/newcase.htm, or call the FBI’s Detroit Field Office at 313-965-2323.
Acting Associate Attorney General Tony West and U.S. Attorney Michael W. Cotter Announce Pilot Initiative to Address Sexual Assault on Montana ReservationsRead the Press Release
CROW AGENCY, Mont. – Acting Associate Attorney General Tony West today joined U.S. Attorney Michael W. Cotter and Vice-Chairman of the Crow Nation Calvin Coolidge Jefferson to announce a multi-agency collaboration with tribal governments to establish sexual assault response teams (SARTs) in the six Montana reservations under federal jurisdiction.
The SART initiative in Montana is a pilot initiative stemming from the Justice Department’s commitment to build safe and healthy communities in American Indian and Alaska Native communities. SART teams, which could include federal and tribal prosecutors, victim specialists, advocates, tribal agencies and programs, local and federal law enforcement, and health care representatives will meet at least once monthly to address incidences of sexual assault that arise on each reservation and determine the best way to address each one. Each community will compose a team that reflects individual community needs.
Teams will be established on the six reservations under federal jurisdiction within the next six months. The teams will meet monthly to address incidences of sexual assault that arise on each reservation and determine the best way to address each one. The SART team will exist to provide culturally appropriate, timely, coordinated and thorough care to victims of sexual assault.
“Sexual violence against native women is one of the most devastating threats to native communities,” said Acting Associate Attorney General West. “It’s also an underreported crime. We hope this effort to establish SART teams in each Montana reservation will bring the kind of help, healing and justice to victims of sexual violence that will also strengthen the faith and confidence that native women have in their criminal justice system.”
“I commend the efforts of those who have worked to develop a culturally appropriate sexual assault response team, or SART, that meets the unique needs of the Crow people,” said Crow Tribe Vice-Chairman Jefferson. “My hope is that with a formalized SART on the Crow Reservation, our mothers and sisters will have access to justice and to recovery from being victims of these types of deplorable crimes. I want to encourage victims, survivors and their family members to come forward, to offer support to each other in the pursuit of justice and healing.”
“Together we can provide compassionate and innovative care to sexual assault survivors,” said U.S. Attorney Cotter. “I challenge the SARTs to not merely be reactive but also consider ways to intervene before the sexual assault occurs – through education and outreach. I am hopeful that the presence of SARTs on Montana reservations will provide another tool to improve intervention and care for sexual assault victims.”
American Indian and Alaska Native women are raped at rates higher than any other race. Despite the alarming rates, sexual assault is still the most underreported crime. Under the pilot project in Montana, the U.S. Attorney’s Office will work with tribal nations to develop culturally appropriate programs and adapt existing response models to create appropriate responses to sexual assault. SART establishes a multidisciplinary team that collaborates on the response to sexual assault cases. The team also adopts coordinated policies and procedures for the investigation, prosecution and provision of services in sexual assault cases. The U.S. Attorney’s Office for the District of Montana will be a resource for specific protocols, training opportunities and model memorandums of understanding (MOUs).
The SART initiative includes collaboration between the Department of Justice, Indian Health Service (IHS), the Bureau of Indian Affairs (BIA), and other federal agencies in partnership with tribes to increase services to victims of sexual assault in Montana by providing training opportunities for first responders. In April 2012, IHS sponsored a regional SART training in Billings, Mont., with participation from the Crow/Northern Cheyenne Hospital, Rocky Boy Health Clinic, Browning Hospital, Fort Peck IHS Service Unit and Crow Tribal Domestic Violence Program. IHS will host Sexual Assault Examiner training in Billings in July 2012, and will also make forensic equipment, such as digital cameras, available to all IHS and Tribal hospitals in 2012. The Department of Justice and IHS are collaborating on training for evidence collection and with the Department of the Interior on implementation of the Tribal Law and Order Act.
Participating reservations include the Blackfeet, Rocky Boy’s, Fort Belknap, Fort Peck, Crow and Northern Cheyenne.
Tuesday 5 June 2012
Texas Resident Sentenced to 15 Months in Prison for Scheme to Defraud the U.S. Export-import BankRead the Press Release
WASHINGTON – A Fabens, Texas, resident was sentenced today to 15 months in prison for his role in a scheme to defraud the Export-Import Bank of the United States (Ex-Im Bank) of more than $690,624.
The sentence was announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney Robert Pitman of the Western District of Texas; Osvaldo L. Gratacos, Inspector General of the Ex-Im Bank; and Acting Special Agent in Charge Dennis A. Ulrich of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI) in El Paso, Texas.
Hector Cuevas, 42, was also sentenced by Judge Kathleen Cardone in U.S. District Court in El Paso to three years of supervised release and was ordered to pay $553,148 in restitution and $690,624 in forfeiture. Cuevas pleaded guilty on Oct. 13, 2011, to conspiracy to commit wire fraud, wire fraud and money laundering conspiracy. Cuevas admitted that he participated in a scheme to defraud the Ex-Im Bank of more than $690,624.
According to court documents, Cuevas was the owner of CT Implement Inc., a farm equipment sales company in Fabens that purported to be in the business of exporting U.S. agricultural equipment to Mexico. During his plea hearing, Cuevas admitted that he helped others prepare and submit false applications, financial records and export documents to two lending banks to assist co-conspirators in Mexico in obtaining two Ex-Im insured loans purportedly for the purchase of equipment from Cuevas’ company. Once the loans were approved, Cuevas admitted that he acted as a money launderer by illegally transferring Ex-Im Bank insured proceeds to both borrowers and others in Mexico. Both loans defaulted and caused Ex-Im Bank to pay claims totaling $583,430 to the lending banks.
Ex-Im Bank is an independent federal agency that helps create and maintain U.S. jobs by filling gaps in private export financing. Ex-Im Bank provides a variety of financing mechanisms to help foreign buyers purchase U.S. goods and services.
The case is being prosecuted by Trial Attorneys Patrick Donley and William Bowne of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Steven Spitzer of the Western District of Texas, El Paso Office. The case was investigated by the Ex-Im Bank Office of Inspector General and ICE-HSI El Paso. The Financial Crimes Enforcement Network (FinCEN) also provided valuable assistance and financial analysis in this investigation.
Office on Violence Against Women Announces Agreements to Cross-Designate Tribal Prosecutors in Nebraska, New Mexico, Montana, North Dakota and South DakotaRead the Press Release
WASHINGTON – The Justice Department’s Office on Violence Against Women (OVW) announced today that four tribes in Nebraska, New Mexico, Montana, North Dakota and South Dakota will be awarded cooperative agreements to cross-designate tribal prosecutors to pursue violence against women cases in both tribal and federal courts.
The goal of the Tribal Special U.S. Attorney (SAUSA) program is to train eligible tribal prosecutors in federal law, procedure and investigative techniques to increase the likelihood that every viable criminal offense is prosecuted in tribal court, federal court or both. The program enables tribal prosecutors to bring violence against women cases in federal court and to serve as co-counsel with federal prosecutors on felony investigations and prosecutions of offenses arising out of their respective tribal communities.
“We know that violence against Native women has reached epidemic proportions,” said OVW Director Bea Hanson. “Restoring safety for Native women requires the type of sustained cooperation between the federal and tribal justice systems that we see in the jurisdictions participating in our Tribal SAUSA project.”
Through this special initiative, OVW will support salary, travel and training costs of four tribal SAUSAs, who will work in collaboration with the U.S. Attorneys Offices in the Districts of Nebraska, New Mexico, Montana, North Dakota and South Dakota. Specifically, OVW will award cooperative agreements to four federally recognized tribes to select qualified applicants in cooperation with the U.S. Attorney Offices to serve as cross-designated prosecutors. These prosecutors will maintain an active violence against women crimes caseload, in tribal and/or federal court, while also helping to promote higher quality investigations, improved training and better inter-governmental communication.
Tailored to meet the particular needs of the participating jurisdiction, these pilot programs are designed to improve the quality of cases, the coordination of resources and the communication of priorities both within and between the various law enforcement agencies working in this area.
The Tribal SAUSA Pilot Project was largely driven by input gathered from the Justice Department's 2009 Tribal Nation Listening Session on Public Safety and Law Enforcement, and its annual tribal consultation on violence against women. The Tribal SAUSA initiative is another step in the Justice Department's on-going efforts to increase engagement, coordination and action on public safety in tribal communities, and represents a partnership between OVW, the Executive Office of US Attorney's and the US Attorney's Offices in Montana, Nebraska, New Mexico, North Dakota and South Dakota.
The recipients of these awards are:
- Pueblo of Laguna in New Mexico
- Fort Belknap Tribe in Montana
- Winnebago Tribe in Nebraska
- Standing Rock Sioux Tribe, in North Dakota and South Dakota
Monday 4 June 2012
Los Angeles Physician Assistant Found Guilty for Role in $18.9 Million Medicare Fraud SchemeRead the Press Release
WASHINGTON – A Los Angeles physician assistant who worked at fraudulent medical clinics where he used the stolen identities of doctors to write prescriptions for medically-unnecessary durable medical equipment (DME) and diagnostic tests has been convicted of conspiracy, health care fraud and aggravated identity theft charges in connection with a $18.9 million Medicare fraud scheme, announced the Department of Justice, FBI and U.S. Department Health and Human Services (HHS).
On June 1, 2012, after a two-week trial in federal court in Los Angeles, a jury found David James Garrison, 50, guilty of one count of conspiracy to commit health care fraud, six counts of health care fraud and one count of aggravated identity theft. The trial evidence showed that Garrison worked at fraudulent medical clinics that operated as prescriptions mills and trafficked in fraudulent prescriptions and orders for medically-unnecessary power wheelchairs, DME and diagnostic tests that were used by fraudulent DME supply companies and medical testing facilities to defraud Medicare. Garrison wrote the prescriptions and ordered the tests on behalf of doctors whom he never met and who did not authorize him to write prescriptions and order tests on their behalf.The trial evidence showed that between March 2007 and September 2008, Garrison’s co-conspirator, Edward Aslanyan, and others owned and operated several Los Angeles medical clinics established for the sole purpose of defrauding Medicare. Aslanyan and others hired street-level patient recruiters to find Medicare beneficiaries willing to provide the recruiters with their Medicare billing information in exchange for expensive, high-end power wheelchairs and other DME, which the patient recruiters told the beneficiaries they would receive for free. Often, the solicited Medicare beneficiaries did not have a legitimate medical need for the power wheelchairs and equipment. The patient recruiters then provided the beneficiaries’ Medicare billing information to Aslanyan and others or brought the beneficiaries to the fraudulent medical clinics. In exchange for recruiting the Medicare beneficiaries, Aslanyan and others paid the recruiters a cash kickback for every beneficiary they recruited.
Many of the beneficiaries whose Medicare billing information was used at the medical clinics lived hundreds of miles from the clinics, including some beneficiaries who lived over 300 miles from the clinics. One witness testified that the clinics used beneficiaries who lived such long distances from the clinics because the Medicare billing numbers of Medicare beneficiaries who lived in and around Los Angeles had been used in other Medicare fraud schemes and, therefore, could no longer be used to bill Medicare.The evidence presented at trial showed that Garrison wrote prescriptions for power wheelchairs, which the beneficiaries did not need and did not use. In some cases, Garrison wrote power wheelchair prescriptions for beneficiaries he never examined and who never visited the clinics and, in one instance, prescribed a power wheelchair to a beneficiary who the evidence showed suffered from a mental defect and did not have the mental capacity to operate a power wheelchair. Several Medicare beneficiaries testified that they were approached by patient recruiters who convinced them to accept free power wheelchairs, but that they never went to the medical clinics and were never examined by Garrison.
Once Garrison wrote the power wheelchair prescriptions, Aslanyan and others sold them from $1,000 to $1,500 to the owners and operators of approximately 50 different fraudulent DME supply companies, which used the prescriptions to submit fraudulent power wheelchair claims to Medicare. The DME supply companies purchased the power wheelchairs wholesale for approximately $900 per wheelchair but billed the wheelchairs to Medicare at a rate of approximately $5,000 per wheelchair. Aslanyan also used the prescriptions Garrison wrote at Vila Medical and Blanc Medical Supply, another fraudulent DME supply company that Aslanyan owned and operated. When the owners and operators of the DME supply companies complained to Aslanyan and others about Garrison’s prescriptions looking the same, witness testimony established that Garrison changed the signature he used on the prescriptions.
In addition, the trial evidence showed that Garrison ordered the same medically-unnecessary diagnostic tests for every Medicare beneficiary, including tests for sleep studies, ultrasounds and nerve conduction. These tests were then billed to Medicare by fraudulent diagnostic testing companies that paid Aslanyan kickbacks to operate from the medical clinics.
Throughout the trial, evidence was introduced that showed that Garrison had admitted to writing prescriptions for power wheelchairs and ordered diagnostic tests on behalf of approximately six different doctors, and that he did not have a Delegation of Services Agreement with at least two of these doctors, as required by law.
As a result of this fraud scheme, Garrison, Aslanyan, and their co-conspirators submitted and caused the submission of over $18 million in false and fraudulent claims to Medicare, and received $10.7 million on those claims.
At sentencing, scheduled for Sept. 17, 2012, Garrison faces a maximum penalty of 72 years in prison and a $2 million fine. The aggravated identity theft conviction carries a mandatory two year prison sentence. In 2009 and 2010, Garrison was convicted on state charges of tax evasion and felonious possession of a firearm. Currently, Garrison is facing federal drug charges as a result of his alleged involvement with another medical clinic where medically-unnecessary prescriptions for Oxycontin were distributed. Garrison is scheduled for trial on the federal drug charges on Nov. 6, 2012. He is presumed innocent of the charges against him.
The jury’s verdict was announced by Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney André Birotte Jr. for the Central District of California; Tony Sidley, Assistant Chief of the California Department of Justice, Bureau of Medi-Cal Fraud and Elder Abuse; Glenn R. Ferry, Special Agent-in-Charge for the Los Angeles Region of the HHS Office of Inspector General (HHS-OIG); and Steven Martinez, Assistant Director in Charge of the FBI’s Los Angeles Field Office.
The case is being prosecuted by Trial Attorney Jonathan T. Baum of the Criminal Division’s Fraud Section and Assistant U.S. Attorney David Kirman of the Central District of California. The case is being investigated by the FBI.
The case was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Central District of California. The Medicare Fraud Strike Force operations are part of the Health Care Fraud Prevention & Enforcement Action Team (HEAT), a joint initiative announced in May 2009 between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country.
Since their inception in March 2007, strike force operations in nine districts have charged 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 HEAT, go to: www.stopmedicarefraud.gov.
Justice Department to Monitor Elections in California, New Mexico, South Dakota and WisconsinRead the Press Release
WASHINGTON – The Justice Department announced today that it will monitor elections on June 5, 2012, in the following jurisdictions to ensure compliance with the Voting Rights Act of 1965 and other federal voting rights statutes: Alameda, Fresno and Riverside Counties, Calif.; Cibola and Sandoval Counties, N.M.; Shannon County, S.D.; and the city of Milwaukee.
The Voting Rights Act prohibits discrimination in the election process on the basis of race, color or membership in a minority language group. In addition, the act requires certain covered jurisdictions to provide language assistance during the election process. Fresno County, Riverside County and the city of Milwaukee are required to provide assistance in Spanish. Cibola, Sandoval and Shannon Counties are required to provide language assistance to Native American voters. Alameda County is required to provide language assistance to Hispanic, Chinese, Vietnamese and Filipino voters.
Under the Voting Rights Act, the Justice Department is authorized to ask the U.S. Office of Personnel Management (OPM) to send federal observers to jurisdictions that are certified by the attorney general or by a federal court order. Federal observers will be assigned to monitor polling place activities in Shannon County based on the attorney general’s certification and in Alameda, Riverside and Sandoval Counties based on court orders. The observers will watch and record activities during voting hours at polling locations in these jurisdictions, and Civil Rights Division attorneys will coordinate the federal activities and maintain contact with local election officials.
In addition, Justice Department personnel will monitor polling place activities in Fresno County, Cibola County and the city of Milwaukee. Civil Rights Division attorneys will coordinate federal activities and maintain contact with local election officials.
Each year, the Justice Department deploys hundreds of federal observers from OPM, as well as departmental staff, to monitor elections across the country. To file complaints about discriminatory voting practices, including acts of harassment or intimidation, voters may call the Voting Section of the Justice Department’s Civil Rights Division at 1-800-253-3931.
Visit www.justice.gov/crt/voting/index.php for more information about the Voting Rights Act and other federal voting laws.
Former Arizona State Representative Sentenced to 27 Months in Prison for Wire Fraud and Tax Evasion Related to the Misuse of More Than $140,000 in Charity FundsRead the Press Release
WASHINGTON – Former Arizona State Representative Richard David Miranda was sentenced today to 27 months in prison for defrauding a charity of more than $140,000 and evading income tax related to those unlawfully obtained funds, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; Special Agent in Charge James L. Turgal of the FBI’s Phoenix Field Office; and Special Agent in Charge Dawn Mertz of the Internal Revenue Service-Criminal Investigation (IRS-CI) Phoenix office.
Miranda, 55, of Tolleson, Ariz., served as a member of the Arizona House of Representatives for the 13th District from 2011 until his resignation, effective Feb. 20, 2012. Miranda previously served as a member of the Arizona State Senate from 2002 until 2011, and the Arizona House of Representatives from 1999 until 2002. Since July 2002, Miranda also served as executive director of Centro Adelante Campesino Inc., a non-profit charitable organization that provided food, clothing and educational assistance to persons in need, including migrant farm workers, in and around Maricopa County, Ariz.
On March 14, 2012, Miranda pleaded guilty to a two-count information charging him with defrauding Centro of more than $140,000 and evading income tax related to those unlawfully obtained funds. As part of his plea agreement, Miranda agreed to resign from office. Miranda was also ordered to pay a total of $230,342 in restitution ($212,220 for funds he unlawfully obtained from Centro, along with an additional $18,122 he unlawfully obtained from the Arizona Latino Caucus Foundation).
During his plea, Miranda admitted that, in May 2005, he initiated a scheme to wind down Centro, sell Centro’s sole remaining asset (a building), and use the proceeds of the sale for personal expenses. To do so, Miranda removed the charity’s longstanding volunteer accountant as an authorized signer on the charity’s bank and credit union accounts, and assumed sole control of the charity’s accounts and financial records. He also told the volunteer accountant that the proceeds of the sale would be used to fund scholarships. In March 2007, the building was sold for $250,000, and on March 7, 2007, a significant portion of the profits of that sale, $144,576, were wired across state lines into Centro’s credit union account.
Miranda also admitted that within one week of the wire transfer, he began to withdraw the proceeds from Centro’s credit union account without the authorization or knowledge of Centro’s board of directors. For example, Miranda obtained two checks payable to himself totaling $37,000 and paid off personal credit card debts totaling more than $60,000. By Dec. 31, 2007, Miranda had withdrawn the remaining proceeds (approximately $46,836) using checks, withdrawals and electronic funds transfers, and used the funds to pay off additional personal debts and make numerous purchases for personal travel, services, clothing, food and household items. Miranda also failed to report the proceeds of the sale as income on his IRS Form 1040 for calendar year 2007.
This case is being prosecuted by Trial Attorneys Monique T. Abrishami and Brian A. Lichter of the Public Integrity Section in the Justice Department’s Criminal Division, and Assistant U.S. Attorney Frederick A. Battista of the District of Arizona. The case is being investigated by agents from the FBI Phoenix Field Office and IRS-CI Phoenix Office.
Former American Samoan Department of Education Employee Sentenced to 25 Months in PrisonRead the Press Release
WASHINGTON – A former official with the American Samoan Department of Education was sentenced to 25 months in prison today for his role in a bribery scheme, Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division announced.
Gustav Nauer, 47, was sentenced by U.S. District Judge David Alan Ezra in the District of Hawaii. Nauer was also ordered to pay $100,000 in restitution to the American Samoa Department of Education (ASDOE) and to serve three years of supervised release following his prison term.
According to court documents, Nauer worked as the head of the School Bus Division for the ASDOE until December 2010. In that position, Nauer was responsible for identifying repairs and parts required by school buses operated by ASDOE.
Nauer admitted that he conspired with another ASDOE official, Paul Solofa, to purchase “phantom” school bus parts that would never be delivered and actual school bus parts at inflated prices, all from a specific company. In exchange for this lucrative business, the bus parts company agreed to pay back most or all of the fraudulently obtained money to Nauer and Solofa in cash bribes to influence and reward Nauer and Solofa. Specifically, Nauer admitted that, from January 2003 until October 2006, he and Solofa received envelopes of cash totaling approximately $300,000.In January 2012, Solofa was convicted by a jury in Washington, D.C., of witness tampering and obstruction of justice. Solofa is scheduled to be sentenced on June 8, 2012.
This case is being prosecuted by Trial Attorney Timothy J. Kelly of the Public Integrity Section in the Justice Department’s Criminal Division. The investigation is being conducted by the FBI, the Department of Interior Inspector General and the Department of Education Inspector General.
El Departamento de Justicia Monitorizará las Elecciones en California, Nuevo México, Dakota del Sur y WisconsinRead the Press Release
WASHINGTON - El Departamento de Justicia anunció hoy que monitorizará las elecciones el 5 de junio de 2012, en las siguientes jurisdicciones para asegurar el cumplimiento de la Ley de Derechos Electorales de 1965 y otras leyes federales de derechos electorales: Condados de Alameda, Fresno y Riverside, Calif.; Condados de Cibola y Sandoval, N.M.; Condado de Shannon, S.D.; y la ciudad de Milwaukee.
La Ley de Derechos Electorales prohíbe la discriminación en el proceso electoral basada en la raza, el color de la piel o pertenencia a un grupo de idioma minoritario. Además, la ley exige que ciertas jurisdicciones cubiertas brinden asistencia idiomática durante el proceso electoral. El Condado de Fresno, Condado de Riverside y la ciudad de Milwaukee deben brindar asistencia en español. Los Condados de Cibola, Sandoval y Shannon deben brindar asistencia idiomática a electores indígenas estadounidenses. El Condado de Alameda debe brindar asistencia idiomática a electores hispanos, chinos, vietnamitas y filipinos.
Bajo la Ley de Derechos Electorales, el Departamento de Justicia está autorizado a pedirle a la Oficina de Administración de Personal de EE.UU. [U.S. Office of Personnel Management (OPM)] que envíe observadores federales a jurisdicciones certificadas por el secretario de justicia o por una orden judicial federal. Se asignarán observadores federales para la monitorización de actividades en los puntos de votación en el Condado de Shannon con base en la certificación del secretario de justicia y en los Condados de Alameda, Riverside y Sandoval en órdenes judiciales. Los observadores vigilarán y registrarán las actividades durante horarios de votación en los lugares de votación en estas jurisdicciones, y abogados de la División de Derechos Civiles coordinarán las actividades federales y mantendrán contacto con funcionarios electorales locales.
Además, personal del Departamento de Justicia monitorizará las actividades en los puntos de votación en el Condado de Fresno, Condado de Cibola y la ciudad de Milwaukee. Abogados de la División de Derechos Civiles coordinarán las actividades federales y se mantendrán en contacto con oficiales electorales locales.
Cada año, el Departamento de Justicia destaca a cientos de observadores federales de la OPM, así como personal del departamento, para que monitoricen las elecciones en todo el país. Para presentar quejas acerca de prácticas electorales discriminatorias, incluidos actos de acoso o intimidación, los electores pueden llamar a la Sección Electoral de la División de Derechos Civiles del Departamento del Justicia al 1-800-253-3931.
Para obtener más información sobre la Ley de Derechos Electorales y otras leyes electorales federales, visite www.justice.gov/crt/voting/index.php.
Arecibo, Puerto Rico, to Upgrade Sewer System to Resolve Clean Water Act ViolationsRead the Press Release
WASHINGTON – A settlement between the United States and the municipality of Arecibo, Puerto Rico, will resolve violations of the Clean Water Act and specifically violations of its Small Municipal Separate Storm Sewer System General Permit, the Department of Justice and the U.S. Environmental Protection Agency (EPA) announced today. This is the first judicial action addressing violations of this type of permit.
Arecibo’s violations include releases of storm water, untreated sewage and sewage sludge and other pollutants into the Rio Grande de Arecibo in violation of its permit and the Clean Water Act. Arecibo will pay a penalty of $305,643 and will invest an estimated $56 million in repairs and upgrades to its existing infrastructure.
Under the settlement, Arecibo is required to comply with its Municipal Separate Sewer System Permit and the Clean Water Act, improve its storm water management program, and build a new pump station and three retention basins. The new pump station and retention basins will enable Arecibo to better manage its storm water flow and prevent flooding in the downtown Arecibo area. Arecibo will further be required to repair, replace or construct storm sewer pipes as necessary and eliminate interconnections with the sanitary sewer systems. Replacing sewer pipe and eliminating interconnections will reduce discharges of sanitary wastes to the Rio Grande de Arecibo and eliminate sewer backups in residential homes.
“This settlement will bring significant improvements to the Arecibo sewer system and cleaner water that the people of Arecibo will enjoy for many years to come,” said Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division of the Department of Justice. “It is another example of how the vigorous enforcement of the Clean Water Act protects citizens from the very real health threats posed by discharges of sewage contaminated stormwater.”
“This settlement will benefit public health by dramatically reducing the amount of sewage and other pollutants that get into the Rio Grande de Arecibo,” said Judith A. Enck, Administrator for EPA’s Region 2 Office. “Today’s agreement requires an investment in protecting community residents from exposure to raw sewage and contaminated stormwater, now, and into the future.”
Municipal storm sewer systems collect rain from streets and drain to local rivers and streams. Sewage lines or industrial discharges can be improperly connected to the storm sewer, leading to raw sewage or other pollutants reaching water bodies. Discharges from municipal storm sewer systems can also include infiltration from cracked sanitary systems, spills collected by drain outlets, or paint or used oil dumped directly into a drain. These discharges contribute bacteria, heavy metals, toxics, oil and grease, solvents, nutrients, viruses and bacteria to receiving water bodies.
The consent decree is subject to a 30-day public comment period and final court approval. The consent decree can be viewed at www.justice.gov/enrd/Consent_Decrees.html.
To learn more about EPA’s enforcement of the Clean Water Act, visit:
www.epa.gov/compliance/civil/cwa/cwaenfstatreq.html.
Friday 1 June 2012
Virginia-based Defense Contractor Calnet to Pay $18.1 Million<br /> to Resolve False Claims Act LawsuitRead the Press Release
Calnet Inc. has agreed to pay the United States $18.1 million to resolve allegations that the company submitted false claims to the Department of Defense, the Justice Department announced today. Calnet Inc., an intelligence analysis, information technology and language services company, is headquartered in Reston, Virginia.<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />
The settlement with Calnet relates to three contracts under which the company supported the United States? war effort by providing translation and linguist services at Guantanamo Bay and several other facilities beginning in 2005.Calnet was a subcontractor on one of the contracts, and the prime contractor on the other two contracts.The United States alleged that Calnet overstated its provisional indirect or overhead rates on each of these contracts and thus submitted inflated claims for payment to the United States.
?Contractors are expected to comply with their statutory obligations and act in good faith when dealing with the United States government,? said Stuart F. Delery, Acting Assistant Attorney General for the Department of Justice?s Civil Division.?We will not tolerate false statements and failure to disclose information that is important to the government?s contracting processes.?
?We?re using every tool available to assure the integrity of government contracting,? said U.S. Attorney MacBride. ?This is one of several cases we have pursued to protect against procurement fraud in the Eastern District of Virginia.?
The settlement with Calnet resolves a lawsuit filed in the U.S. District Court for the Eastern District of Virginia under the False Claims Act by former Calnet employee, Kimthy Chao.Under the False Claims Act, private citizens can bring suit on behalf of the United States and share in any recovery obtained by the government.Mr. Chao?s share of the Calnet settlement will be $2,669,724.
This settlement was the result of a coordinated effort by the Department of Justice, Civil Division, Commercial Litigation Branch; the U.S. Attorney?s Office for the Eastern District of Virginia; the Defense Criminal Investigative Service and the Defense Contract Audit Agency.The claims settled by this agreement are allegations only and there has been no determination of liability.
U.S. Customs and Border Protection Officer Indicted in Miami for Civil Rights and Abusive Sexual Contact OffensesRead the Press Release
WASHINGTON – U.S. Customs and Border Protection Officer Paulo Morales, 47, was arrested today after having been indicted yesterday by a federal grand jury in the Southern District of Florida on charges of deprivation of civil rights and abusive sexual contact, announced Thomas E. Perez, Assistant Attorney General for the Civil Rights Division, and Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida.
The six-count indictment charges Morales with three felony counts of abusive sexual contact and three misdemeanor counts of deprivation of civil rights.
The indictment alleges that on various dates in January 2011, Morales, while working as an officer with U.S. Customs and Border Protection at the Miami International Airport, committed civil rights offenses and abusive sexual contact by the non-consensual groping of the breasts of three separate women, who were in the custody of Customs and Border Protection.
If convicted, Morales faces a maximum sentence of two years in prison for each count of abusive sexual contact and one year in prison for each count of deprivation of civil rights.
This case is being investigated by the Department of Homeland Security Office of Inspector General, and is being prosecuted by Assistant U.S. Attorney William White of the U.S. Attorney's Office for the Southern District of Florida and Trial Attorney Henry Leventis of the Civil Rights Division.
An indictment is merely an accusation, and the defendant is presumed innocent unless proven guilty.
Related Materials:
Indictment (PDF)
New England Organized Crime Associate Sentenced to Seven Years in Federal PrisonRead the Press Release
WASHINGTON – Richard Bonafiglia, 58, of Providence, R.I., an admitted associate of the New England La Cosa Nostra (NELCN) was sentenced in U.S. District Court in Providence today to 84 months in federal prison for his participation in a racketeering conspiracy to shakedown several Rhode Island adult entertainment businesses for protection money.
U.S. District Court Judge William E. Smith also sentenced Bonafiglia to serve three years of supervised release upon completion of his prison term. Bonafiglia pleaded guilty on Feb. 23, 2012, to one count of conspiracy to participate in a racketeering enterprise. Bonafiglia was charged along with eight other admitted or alleged leaders, members or associates of the NELCN with participating in a racketeering and extortion conspiracy and other acts of extortion.
Bonafiglia’s sentence was announced by Peter F. Neronha, U.S. Attorney for the District of Rhode Island; Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; Richard Deslauriers, Special Agent in Charge of the FBI’s Boston Field Office; Colonel Steven G. O’DonnellSuperintendent of the Rhode Island State Police; and Providence Public Safety Commissioner Steven M. Pare.
At the time of his guilty plea, Bonafiglia admitted that he was an associate of the NELCN and that he participated in the charged racketeering and extortion conspiracy. Bonafiglia admitted that since 2005, when he was hired to work at the Cadillac Lounge where he served as the eyes and ears of then admitted NELCN boss Luigi Manocchio, he participated in multiple acts of extortion by assisting other conspirators in their collection and receipt of monthly protection payments of up to $800,000 from the owners and operators of several adult entertainment businesses.
Seven of the nine defendants named in superseding indictments and charged with participating in the racketeering and extortion conspiracy, including admitted longtime former NELCN underboss and boss Luigi Manocchio and admitted capo regime Edward Lato, have pleaded guilty. Manocchio was sentenced on May 11, 2012, to 66 months in federal prison; Edward Lato is awaiting sentencing.
The cases are being prosecuted by Assistant U.S. Attorney William J. Ferland for the District of Rhode Island and Trial Attorney Sam Nazzaro of the Criminal Division’s Organized Crime and Gang Section.
The matter was investigated by the FBI, Rhode Island State Police and the Providence Police Department.
Maryland Business Owner Sentenced <br /> for Failing to Pay Employment TaxesRead the Press Release
Richard Stewart, a resident of Mitchellville, Md., was sentenced to 24 months in prison and ordered to pay $5,414,647 in restitution to the Internal Revenue Service (IRS) by U.S. District Judge Roger W. Titus for failing to pay over employment taxes in connection with his ownership of Montgomery Mechanical Services, the Justice Department and IRS announced today.
According to the plea agreement and criminal information, from at least 2003 through 2008, Stewart owned and operated Montgomery Mechanical Services, a company that installed plumbing, heating, and air condition in commercial buildings and that had offices in Baltimore and Capitol Heights, Md. From 2003 through at least 2008, Stewart did not collect, truthfully account for and pay over employment taxes of approximately $3,969,337 from his employees’ wages.
“It is wrong for any business owner to get an unfair competitive advantage by committing tax crimes,” said Assistant Attorney General Kathryn Keneally of the Justice Department’s Tax Division. “The sentence handed down today shows that those who willfully violate their employment tax obligations will not only be prosecuted, but risk severe punishment for their crimes, and they will still be held responsible for the taxes due, together with interest and civil penalties.”
“Business owners have an inescapable obligation to withhold income taxes for employees and remit those taxes to the Internal Revenue Service,” said Richard Weber, Chief, IRS Criminal Investigation. “IRS Criminal Investigation is committed to vigorously pursuing those who violate employment tax laws.”
The restitution order in the amount of $5,414,647 encompasses both the employment taxes that he failed to withhold from his employees and his obligation, as an employer, to pay over a matching portion of Federal Insurance Contributions Act taxes.
Assistant Attorney General Keneally thanked Special Agents of IRS-Criminal Investigation, who investigated the case, and Tax Division Trial Attorney Tino M. Lisella, who is currently on detail to a U.S. Attorney’s office, and former Tax Division Trial Attorney Jeffrey L. Shih, both of whom prosecuted this case.
Justice Department Settles Lawsuit with Pierce County, Washington, Alleging Employment DiscriminationRead the Press Release
The Justice Department announced today it has entered into a consent decree with Pierce County, Wash., that, if approved by the U.S. District Court for the Western District of Washington, will resolve allegations that the county discriminated against a female employee by retaliating against her in violation of Title VII of the Civil Rights Act of 1964. Title VII is a federal statute which prohibits employment discrimination on the basis of sex, race, color, national origin or religion and protects employees who file complaints under any of those bases.
The department’s complaint, filed today along with the consent decree, alleges that the county, through its agents at the Pierce County Assessor-Treasurer’s Office, discriminated against Administrative Officer Sally Barnes by retaliating against her because she engaged in activity protected under Title VII. The United States alleges in its complaint that Barnes was subjected to multiple adverse employment actions between Jan. 22, 2009 and Nov. 30, 2009, including the loss of her administrative officer and other supervisory duties, exclusion from important meetings and information necessary for the management of her division and an involuntary relocation to an undesirable work location.
“This consent decree sends the important message that discrimination and retaliation will not be tolerated,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “I am pleased that we were able to work with the county to arrive at a resolution that will put mechanisms in place to prevent and correct discrimination and retaliation in the workplace.”
Barnes initially filed charges of discrimination and retaliation with the Equal Employment Opportunity Commission (EEOC), which investigated the matter and determined there was reasonable cause to believe discrimination occurred, referring the matter to the Justice Department.
“Retaliation by supervisors, especially elected officials, has no place in the workforce,” said U.S. Attorney Jenny A. Durkan. “This settlement will ensure all Pierce County employees know their rights and can do their jobs without fear of being punished for contacting their human resources department about discrimination.”
Under the terms of the consent decree and settlement agreement, the county has agreed to award $400,000 to Barnes. In addition, the county is required to review and revise its Equal Employment Opportunity (EEO) policies to protect its employees from unlawful retaliation and must provide training on equal employment opportunity law and its anti-retaliation policies to all of its employees and officials at the Assessor-Treasurer’s Office.
The continued enforcement of Title VII is a priority of the Justice Department’s Civil Rights Division. Additional information about the Civil Rights Division is available on its website at www.justice.gov/crt/ and www.justice.gov/crt/emp/.
Related Materials:
Pierce County -Complaint
Pierce County - Proposed Consent Decree
Pierce County - Joint MotionFourteen Defendants Plead Guilty for Their Roles in Scheme to Fraudulently Control Home Owners Associations in Las VegasRead the Press Release
WASHINGTON – Fourteen individuals pleaded guilty yesterday in the District of Nevada for their roles in the scheme to fraudulently take control of various home owners’ associations (HOAs) in the Las Vegas area, Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, FBI Special Agent in Charge Kevin Favreau of the Las Vegas Field Office, Sheriff Doug Gillespie of the Las Vegas Metropolitan Police Department and Richard Weber, Chief of the Internal Revenue Service-Criminal Investigation (IRS-CI), announced today.
According to plea documents, the defendants each pleaded guilty to one count of conspiracy to commit mail and wire fraud. The defendants who pleaded guilty today include: Rosalio Alcantar, 60; Patrick Bergsrud, 43; Robert Bolten, 44; Glenn Brown, 52; Paul Citelli, 59; Michelle DeLuca, 51; Charles Hawkins, 51; Sami Robert Hindiyeh, 54; Lisa Kim, 47; Brian Jones, 38; Morris Mattingly, 51; Frank Sutton, 58; Anthony Roy Wilson, 34; and Jeanne Winkler, 44.
According to court documents, the fraud scheme operated from approximately August 2003 through February 2009 with various co-conspirators joining that scheme at different times. The conspirators operated the scheme to direct construction defect litigation and repairs at condominium complexes to a particular law firm and construction company.
In order to accomplish the scheme, certain co-conspirators identified HOAs that could potentially bring construction defect cases. Once identified, the co-conspirators enlisted real estate agents to identify condominium units within the HOA communities for purchase. The co-conspirators then enlisted individuals as straw purchasers to use their names and credit to purchase condominiums in the complexes. The defendants admitted that the co-conspirators provided the down payments and monthly payments to the straw purchasers, including HOA dues and mortgage payments, and that various false and misleading statements were made to secure financing for the properties. Certain co-conspirators operated and managed the payments associated with these properties. The payments were often wired between California and Nevada.
Bergsrud and Wilson admitted in their plea documents that they acted as real estate agents for the purpose of identifying units in HOA communities for use by the co-conspirators and to assist with the property transfer documents. Wilson also assisted the conspiracy by developing ways to increase capital, such as refinancing some of the units to recapture the down payments and other fees, and also in managing the finances for the properties. Bergsrud, Bolten, Citelli, Hawkins, Mattingly and Sutton admitted in their plea documents that they acted as straw purchasers at various condominium complexes.
Alcantar admitted that he opened, operated and managed five bank accounts on behalf of the co-conspirator construction company owner, using names of shell limited liability companies for the purpose of concealing the identity of the individuals funding the conspiracy. Alcantar managed the transfer of more than $8 million during the time period of the conspiracy, including deposits made from the co-conspirator construction defect attorney.
According to plea documents, on several occasions the co-conspirators transferred a partial interest in a particular condominium to another co-conspirator for the purpose of making it appear as if the co-conspirator was a bona fide homeowner in the community and could thereby stand for election to the HOA board of directors. Many of the straw purchasers and those who acquired a transferred interest in an HOA community agreed with co-conspirators to use their ownership interest to run for election to the respective HOA board of directors. It was through the boards of directors that the conspirators controlled the activities at the HOAs.
According to plea documents, Bergsrud, Hawkins, DeLuca, Mattingly and Sutton agreed to become board members at certain condominium complexes and thereafter breached their fiduciary duties to the homeowners, using their positions to vote in furtherance of the conspiracy.
To ensure the co-conspirators won the elections, the co-conspirators at times employed deceitful tactics, such as submitting fake and forged ballots. Some of these ballots were sent through the U.S. mail.
On several occasions, co-conspirators attempted to create the appearance that the elections were legitimate. This was done at times by hiring attorneys to run the HOA board elections as “special election masters,” to preside over the HOA board elections and supervise the counting of ballots. The “special election masters” were complicit and part of the conspiracy. They allowed co-conspirators to access the ballots for the purpose of opening the ballots and influencing the results to ensure certain co-conspirator candidates won the election.
Brown and Hindiyeh admitted in plea documents that they assisted in the HOA election rigging. Jones admitted that he acted as a special election master for certain HOA elections and allowed co-conspirators to access the ballots and alter the votes in favor of co-conspirator candidates. Wilson also admitted that he assisted in promoting the co-conspirator candidates in elections.
Once elected, the co-conspirator board members met with other co-conspirators in order to manipulate board votes and process, including the selection of property managers, contractors, general counsel, and attorneys to represent the HOA. Once hired, co-conspirators, including property managers and general counsel, often recommended that the HOA board hire the co-conspirator construction company for construction defect repairs and the co-conspirator law firm to handle the construction defect litigation.
Kim admitted that she agreed with the co-conspirators to become a property manager at a condominium complex. She knew the co-conspirator controlled board would manipulate their votes to hire her company. Kim used her position as the property manager to help the co-conspirators falsify ballots and retain their positions on the HOA board.
Winkler admitted in plea documents that she agreed to become the general counsel for the Vistana condominium complex. She bid for a position as general counsel knowing that she had a prior attorney-client and financial relationship with the co-conspirator construction company owner who intended to direct the board to award the construction defect repair contract to him. Winkler admitted that she used her position to handle legal matters for the HOA as directed by her co-conspirators and that she violated her fiduciary duties to the bona fide homeowners.
According to court documents, the defendants admitted that they were each given cash or things of value for their assistance in purchasing the properties, obtaining HOA membership status, rigging elections, or using their position to manipulate the HOA’s business to enrich the co-conspirators at the expense of the HOA and the legitimate homeowners.
The maximum prison sentence for conspiracy to commit mail fraud and wire fraud is 30 years.
Ten other individuals pleaded guilty in 2011 as part of the government’s ongoing criminal investigation of activities related to various Las Vegas HOAs.
The case is being prosecuted by Deputy Chief Charles La Bella and Trial Attorney Mary Ann McCarthy of the Criminal Division’s Fraud Section. The case is being investigated by the FBI and the Las Vegas Metropolitan Police Department, Criminal Intelligence Section.
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.
Five Sentenced for Their Roles in Stolen Identity Refund Fraud SchemeRead the Press Release
Fahim Suleiman and Muuad Salem were sentenced to prison today by U.S. District Court Judge James S. Gwin in connection with their roles as co-conspirators in a scheme to defraud the United States by obtaining false and fraudulent U.S. Treasury tax refund checks, the Justice Department and Internal Revenue Service (IRS) announced. According to documents filed with the court, the two participated in a conspiracy with others to file false United States income tax returns using personal identifying information, including names and Social Security numbers, of deceased taxpayers in order to obtain false tax refund checks that were subsequently sold and negotiated. Suleiman was sentenced to 64 months in prison, including a 24 month mandatory minimum sentence for aggravated identity theft. Salem was sentenced to 27 months in prison.
Judge Gwin had previously sentenced three co-conspirators. On May 29, 2012, Najeh Widdi was sentenced to 36 months in prison. Hanan Widdi and Hazem Woodi were sentenced on May 30, 2012, to prison terms of 21 months and 18 months, respectively. Judge Gwin ordered all five defendants to pay, jointly and severally, $177,744 in restitution to the IRS as part of their sentences.
Each of the defendants previously entered guilty pleas on March 13, 2012. Salem, Najeh Widdi and Woodi pleaded guilty to conspiracy to defraud the United States, conspiracy to commit mail fraud and one count of mail fraud; Hanan Widdi pleaded guilty to conspiracy to defraud the United States and conspiracy to commit mail fraud; and Suleiman pleaded guilty to conspiracy to defraud the United States, conspiracy to commit mail fraud, three counts of mail fraud and one count of aggravated identity theft.
Daxesj Patel also pleaded guilty on March 13, 2012 to two counts of submitting false claims for refund and one count of false statements. Patel is scheduled to be sentenced on June 8, 2012 by Judge Gwin.
“The Justice Department is working closely with the IRS to investigate and prosecute stolen identity refund fraud crimes,” said Assistant Attorney General Kathryn Keneally of the Justice Department’s Tax Division. “The sentences handed down in this and other cases show that identity thieves will pay a high price for their crimes.”
“The theft of anyone’s identity is a serious offense, but stealing the identities of the recently departed to defraud all the other taxpayers is particularly egregious,” said Steven M. Dettelbach, the U.S. Attorney for the Northern District of Ohio. “These sentences should cause anyone who would engage in this conduct to reconsider.”
“Individuals who commit refund fraud and identity theft of this magnitude deserve to be punished to the fullest extent of the law,” stated Richard Weber, Chief, IRS Criminal Investigation. “We, along with our law enforcement partners and the U.S. Attorney's Office, continue to do our part in protecting the sanctity and integrity of the tax system and those individuals whose identities were stolen, as well as a monetary loss against the U.S. Treasury.”
According to the indictment, from April 2009 to at least August 2011, Najeh Widdi, Hanan Widdi, Hazem Woodi, Muaad Salem, Fahim Suleiman, Daxesj Patel and other unnamed co-conspirators defrauded the United States by filing false and fraudulent tax returns, many in the names of recently deceased taxpayers. The co-conspirators directed the refunds to controlled locations in Florida. The U.S. Treasury checks generated by the false tax returns were sent by U.S. mail to co-conspirators located in Ohio. The Ohio co-conspirators then sold and distributed those Treasury checks for negotiation at various businesses and banking institutions. The IRS estimated that the scheme involved at least $1.7 million in fraudulently obtained tax returns. As part of their plea agreements, Suleiman, Hanan Widdi, Najeh Widdi, Salem and Woodi admitted that the fraud loss caused by their conduct was between $1 and 2.5 million and that the offenses involved more than ten victims.
The case was prosecuted by Assistant U.S. Attorney Gary D. Arbeznik and Trial Attorney Jessica W. Knight of the Tax Division, presently on detail to a U.S. Attorney’s office in Ohio. The investigation was jointly handled by the Cleveland Division of the FBI, IRS-Criminal Investigation and the U.S. Postal Service.
Doctors, Therapist and Recruiters from Miami-Area Mental Health Care Corporation Convicted for Participating in $205 Million Medicare Fraud SchemeRead the Press Release
WASHINGTON – A federal jury today convicted two Miami-area doctors, one Miami-area therapist and two others for their participation in a Medicare fraud scheme involving more than $205 million in fraudulent billings by American Therapeutic Corporation (ATC), a mental health care corporation, the Department of Justice, the FBI and the Department of Health and Human Services (HHS) announced today.
Dr. Mark Willner, Dr. Alberto Ayala and therapist Vanja Abreu (Ph.D.) were each found guilty of one count of conspiracy to commit health care fraud. Willner was acquitted of five other counts of health care fraud and Ayala was acquitted of two other counts of health care fraud. Hilario Morris and Curtis Gates were each found guilty of one count of health care kickbacks and were each acquitted of one count of conspiracy.
The jury was unable to reach a unanimous verdict as to a one conspiracy count against another therapist Lydia Ward (Ph.D.). The jury acquitted Nichole Eckert, a licensed mental health counselor (LMHC), of two counts of health care fraud and was unable to reach a unanimous verdict as to one conspiracy count against her.
The defendants were charged in an indictment returned on Feb. 8, 2011. ATC, the management company associated with ATC, and 14 individuals, including the ATC owners, have all previously pleaded guilty or have been convicted at trial.
Evidence at trial demonstrated that the defendants and their co-conspirators caused the submission of false and fraudulent claims to Medicare through ATC, a Florida corporation headquartered in Miami that operated purported partial hospitalization programs (PHPs) in seven different locations throughout South Florida and Orlando. A PHP is a form of intensive treatment for severe mental illness. The defendants and their co-conspirators also used a related company, American Sleep Institute (ASI), to submit fraudulent Medicare claims.
“The doctors, therapist and patient recruiters convicted today participated in a massive scheme to defraud the Medicare program,” said Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division. “They altered medical records, robo-signed patient files and recruited ineligible patients – all so that they could file fraudulent claims for reimbursement. We are determined to hold all people – from well educated professionals to common criminals – accountable for committing health care fraud.”
“Today’s verdict is a stark reminder that health care professionals, like any other link in the health care fraud chain, will be held criminally accountable if they engage in Medicare fraud,” said U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida. “A license to practice medicine is not a license to defraud the Medicare program.”
ATC billed Medicare for hundreds of millions of dollars in false and fictitious services, for thousands of patients who were not qualified, based on fraudulent documents created by Abreu and others and bogus certifications signed by Willner and Ayala. In addition, the evidence at trial showed that Morris paid illegal kickbacks to owners and operators of assisted living facilities, halfway houses, and to patient brokers in exchange for delivering ineligible patients to ATC and ASI. Evidence at trial also showed that Gates solicited and received illegal kickbacks in exchange for sending ineligible patients to ATC.
Throughout the course of the fraud conspiracy, tens of millions of dollars in kickbacks were paid in exchange for Medicare beneficiaries, who did not qualify for PHP services, to attend treatment programs that were not legitimate PHP programs. ATC and ASI billed Medicare for more than $205 million in services to patients who did not need the services and to whom the appropriate services were not provided. According to the evidence, co-conspirators personally altered, and caused the alteration of, patient files and therapist notes for the purpose of making it appear, falsely, that patients being treated by ATC were qualified for PHP treatments and that the treatments provided were legitimate PHP treatments.
Evidence further revealed that doctors at ATC, including Willner and Ayala, signed patient files without reading them or seeing the patients. Specifically, evidence was presented that Willner and Ayala would “robo-sign” patient files, meaning they would sign patient documents without having seen or treated the patients. The evidence also showed that Ayala signed files for services allegedly rendered during time periods when he was out of the country on vacation. Evidence further revealed that ATC then billed Medicare for more than $100 million in PHP treatment for these patients under the names of Willner and Ayala. Included in these false and fraudulent submissions to Medicare were claims for patients in neuro-vegetative states, along with patients who were in the late stages of diseases causing permanent cognitive memory loss – all of whom were ineligible for PHP treatment.
Willner, Ayala and Morris were remanded into custody.
ATC executives Lawrence Duran, Marianella Valera, Judith Negron, and Margarita Acevado were sentenced to 50 years, 35 years, 35 years, and 91 months in prison, respectively, for their roles in the fraud scheme. Sentencing for Willner, Ayala, Abreu, Morris and Gates has not yet been scheduled. The maximum penalty for each conspiracy count and each count of health care fraud is 10 years in prison. The maximum penalty for each count of health care kickbacks is five years in prison.
Today’s verdict was announced by Assistant Attorney General Breuer of the Criminal Division; U.S. Attorney Ferrer of the Southern District of Florida; John V. Gillies, 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 A. Zink, and James V. Hayes of the Fraud Section in the Justice Department’s Criminal Division. A related civil action is being handled by Vanessa I. Reed and Carolyn B. Tapie of the Civil Division and Assistant U.S. Attorney Ted L. Radway of the Southern District of Florida. The case was investigated by the FBI and HHS-OIG, and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida.
Since its inception in March 2007, the Medicare Fraud Strike Force operations in nine locations have charged more than 1,330 defendants who collectively have 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.
Thursday 31 May 2012
Woman Convicted of Tax Fraud Conspiracy in South Florida Sentenced to 51 Months in PrisonRead the Press Release
Nasheba Necia Hunte was sentenced today to 51 months in prison for her role in a conspiracy to defraud the Internal Revenue Service (IRS) and for filing false tax returns, the Justice Department and IRS announced. Hunte was also ordered to pay $229,305 in restitution to the IRS.
On March 16, 2012, Hunte and another individual, Elmo Antonio George, 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. Hunte and George 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. George is scheduled to be sentenced on June 29, 2012.
“People who cheat on their taxes are cheating their friends and neighbors and all other law-abiding taxpayers,” said Assistant Attorney General Kathryn Keneally of the Justice Department’s Tax Division. “They are committing a crime and, as the sentence today shows, risking serious jail time. And, in the end, they will still owe the taxes, together with interest and possible civil penalties.”
“The use of shell companies, false claims and aliases to perpetuate a fraudulent tax scheme isn't tax planning, it’s criminal activity,” said Richard Weber, Chief, IRS Criminal Investigation. “There is no secret formula that can eliminate a person’s tax obligations. Today’s sentence reinforces our commitment to every American taxpayer that we will identify and prosecute those who evade the payment of taxes.”
The indictment alleged that in February 2005, George incorporated Winco Holdings Inc. (Winco) 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 IRS-Criminal Investigation Special Agents attempted contact with Hunte, she affirmatively denied who she was to the Agents.
Assistant Attorney General Keneally thanked IRS-Criminal Investigation’s Atlanta Field Office, which investigated the case, and Tax Division Trial Attorneys Rebecca Perlmutter and Chad Edgar, who prosecuted the case on behalf of the United States. Assistant Attorney General Keneally also thanked Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida, and his entire office for their assistance in prosecuting the case.
Plastics Producer SABIC Agrees to Reduce Harmful Air Pollution from Leaking Equipment to Resolve Clean Air Act Violations in Indiana and AlabamaRead the Press Release
SABIC Innovative Plastics US LLC, and its subsidiary, SABIC Innovative Plastics Mt. Vernon LLC, have agreed to pay an approximately $1 million civil penalty and improve leak detection and repair practices to settle alleged violations of the Clean Air Act (CAA) at chemical manufacturing facilities in Mt. Vernon, Ind., and Burkville, Ala., the U.S. Department of Justice and the U.S. Environmental Protection Agency (EPA) announced today. Emissions of hazardous air pollutants (HAPs) from leaking equipment may cause serious health effects including cancer, reproductive issues and birth defects.
“This compliance program continues our efforts to control fugitive emissions and will require SABIC to upgrade its monitoring and maintenance practices to help prevent future violations,” said Robert G. Dreher, Principal Deputy Assistant Attorney General for the Environment and Natural Resources Division at the Department of Justice.
“Communities near large industrial facilities depend on EPA to protect public health and the environment by enforcing our nation’s environmental laws,” said Cynthia Giles, Assistant Administrator for EPA’s Office of Enforcement and Compliance Assurance. “Today’s settlement with SABIC will reduce the potential for future violations and protect residents in Indiana and Alabama from emissions of hazardous air pollutants.”
In addition to paying a penalty, SABIC will implement a comprehensive program to reduce emissions of HAPs from leaking equipment such as valves and pumps. The emissions, known as “fugitive” emissions because they are not discharged from a stack but rather leak directly from equipment, are generally controlled through work practices, like monitoring and repairing leaks. The settlement requires SABIC to implement enhanced work practices, including more frequent leak monitoring, better repair practices, and innovative new efforts designed to prevent leaks.
The program also requires SABIC to replace valves with new “low emissions” valves or valve packing material, designed to significantly reduce the likelihood of future leaks of HAPs. In response to EPA’s inspection of the Mt. Vernon facility, SABIC engineered HAP emission controls for hundreds of drains and trenches and the settlement further requires SABIC to control similar emissions from an oil/water separator. The estimated cost of these controls is almost $4 million. SABIC will also invest an additional $1.3 million to control HAP emissions from certain process vents as a supplemental environmental project. The compliance program and engineered controls will reduce HAP emissions by up to 136.7 tons per year.
According to the 15-count complaint, filed simultaneously with the settlement today in the Southern District of Indiana, SABIC allegedly violated CAA requirements to monitor and repair leaking equipment, demonstrate compliance with regulations applicable to chemical plants, and report known violations to EPA.
The consent decree is subject to a 30 day comment period and final approval by the court. A copy of the consent decree is available on the Department of Justice web site at www.usdoj.gov/enrd/Consent_Decrees.html .
More information about the settlement: www.epa.gov/compliance/resources/cases/civil/caa/sabic.html.
Minnesota-based St. Jude Medical Pays U.S. $3.65 Million to Settle<br /> <br /> Claims That It Overcharged for Implantable Cardiac DevicesRead the Press Release
St. Jude Medical Inc. has agreed to pay the United States $3.65 million to resolve civil allegations under the False Claims Act that the company inflated the cost of replacement pacemakers and defibrillators purchased by the Departments of Defense and Veterans Affairs, the Justice Department announced today. St. Paul, Minn.-based St. Jude Medical develops, manufactures and distributes cardiovascular and implantable neurostimulation medical devices.The settlement resolves allegations that St. Jude actively marketed its pacemakers and defibrillators by touting the generous credits available should a device need to be replaced while covered under warranty. At the same time, St. Jude allegedly knew that it failed to grant appropriate credits to the purchasers of devices in a large number of cases where a product was replaced while still under warranty. As a result, the United States contended that St. Jude submitted invoices to Department of Veterans Affairs hospitals and Department of Defense military treatment facilities that overstated the cost for replacement pacemakers or defibrillators.
“As medical device use becomes more prevalent, it is essential that device manufactures provide federal health care programs with the warranty discounts they are entitled to receive,” said Stuart F. Delery, Acting Assistant Attorney General for the Justice Department’s Civil Division. “If medical device manufacturers are actively concealing warranty credits from the government, the department will use all the tools at its disposal to hold them accountable.”
“Like any other customer, the government is entitled to get what it paid for,” said Carmen M. Ortiz, U.S. Attorney for the District of Massachusetts. “Where a vendor warrants that its products will last a certain amount of time and then does not honor warranty claims when the products fail early, actions like this are appropriate.”
The civil settlement resolves allegations initially brought by two whistleblowers in federal court in the District of Massachusetts under the qui tam, or whistleblower, provisions of the False Claims Act, which allow for private citizens to bring civil actions on behalf of the United States and share in any recovery. As part of today’s resolution, the whistleblowers will receive $730,000 from the settlement amount.
“The Department of Veterans Affairs, Office of Inspector General continues with its partners at the U.S. Attorney’s Office and other federal investigative agencies to combat fraud, waste, and abuse within the health care industry,” said Jeffrey G. Hughes, Special Agent in Charge, Department of Veterans Affairs, Office of Inspector General. “This civil settlement will return funds to VA to benefit our nation’s veterans.”
“The Defense Criminal Investigative Service is committed to working with the U.S. Department of Justice and the U.S. Department of Veterans Affairs, Office of Inspector General, to ensure that taxpayer dollars are properly spent and that the health care needs of our military members and their families are met,” said Edward Bradley, Special Agent-in-Charge, Defense Criminal Investigative Service, Northeast Field Office. “Today’s settlement demonstrates the importance of this collaborative effort to hold companies accountable when they fail to honor warranty discounts to which the U.S. Department of Defense is entitled.”
The settlement was the result of an investigation by the U.S. Attorney’s Office for the District of Massachusetts, the Justice Department’s Civil Division, and the Offices of Inspector General at the U.S. Department of Defense and Veterans Affairs. The claims settled by this agreement are allegations only, and there has been no determination of liability.
Justice Department Reaches $21 Million Settlement to Resolve Allegations of Lending Discrimination by Suntrust MortgageRead the Press Release
WASHINGTON – SunTrust Mortgage Inc., the mortgage lending subsidiary of the nation’s 11th-largest commercial bank, has agreed to pay $21 million to resolve a lawsuit by the Department of Justice that it engaged in a pattern or practice of discrimination that increased loan prices for many of the qualified African-American and Hispanic borrowers who obtained loans between 2005 and 2009 through SunTrust Mortgage’s regional retail offices and national network of mortgage brokers.
The settlement also requires SunTrust Mortgage to continue using policies and practices it adopted to prevent discrimination following the time period at issue in the lawsuit.
The settlement, which is subject to court approval, was filed today in federal court in Richmond, Va., where SunTrust Mortgage is headquartered. The settlement comes after a two-and-a-half-year investigation by the Department of Justice, which included reviewing internal company documents and data on more than 850,000 residential mortgage loans SunTrust Mortgage originated between 2005 and 2009. SunTrust Mortgage cooperated fully with the Justice Department’s investigation into its lending practices and agreed to settle this matter without contested litigation.
“Today’s settlement demonstrates that the Department of Justice takes seriously its responsibility to investigate mortgage lending practices during the mortgage boom years and, when the evidence shows the law was broken, to obtain compensation for victims of illegal conduct,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “We will, however, work constructively with responsible lenders like SunTrust Mortgage that are willing to take the necessary steps to ensure equal credit opportunity for all borrowers. We commend SunTrust Mortgage for taking action to implement strong fair lending policies even before they knew the full results of our investigation.”The settlement was filed in conjunction with the department’s complaint that alleges SunTrust Mortgage violated the Fair Housing Act and Equal Credit Opportunity Act by charging more than 20,000 African-American and Hispanic borrowers higher fees and interest rates than non-Hispanic white borrowers, not based on borrower risk, but because of their race or national origin. Specifically, the allegations involve loans made to African-American borrowers between 2005 and 2008 through the more than 200 retail offices directly operated by SunTrust Mortgage in the Southeastern and Mid-Atlantic portions of the United States. The allegations also involve loans made to African-American and Hispanic borrowers between 2005 and 2009 through SunTrust Mortgage’s national network of mortgage brokers.
“Racial and ethnic bias have no place in the lending market,” said Neil H. MacBride, U.S. Attorney for the Eastern District of Virginia. “We are pleased that SunTrust Mortgage is taking steps to compensate the victims and to ensure fair and equal access to credit in the future.”
SunTrust Mortgage’s business practice during the time periods covered by the lawsuit allowed its loan officers and mortgage brokers to vary a loan’s interest rate and other fees from the price it set based on the borrower’s objective credit-related factors. This subjective and unguided pricing discretion resulted in African-American and Hispanic borrowers paying more.
Prior to the settlement, SunTrust Mortgage had implemented policies that substantially reduced the discretion of its loan officers and mortgage brokers to vary a loan’s interest rate and other fees from the price it set based on the borrower’s objective credit-related factors, and that required the reasons for variations to be documented and reviewed by a supervisor. Those policies, operating in concert with rules imposed by the Federal Reserve in April 2011 and incorporated into the settlement, restrict compensating loan officers and mortgage brokers based on the terms or conditions of a particular loan. Today’s settlement requires SunTrust Mortgage to keep its improved policies in place for at least the next three years, as well as continuing to monitor its lending for signs of discrimination and providing monitoring reports to the United States.
The department’s investigation into SunTrust Mortgage’s lending practices began after a referral by the Board of Governors of the Federal Reserve to the Justice Department’s Civil Rights Division in December 2009 for potential patterns or practices of discrimination. SunTrust Mortgage’s parent company, Atlanta-based SunTrust Bank, is a member of the Federal Reserve System, and one of the nation’s largest regional banks with $178 billion in assets and more than 1,600 branches in seven states and the District of Columbia.
“Racial or other illegal discrimination has no place in our credit markets,” said Federal Reserve Board Governor Elizabeth A. Duke. “We are pleased that this settlement is designed to ensure fair access to credit.”
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF). President Obama established the interagency FFETF to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. For more information on the task force, visit www.StopFraud.gov.
A copy of the complaint and proposed settlement order, as well as additional information about fair lending enforcement by the Justice Department, can be obtained from the Justice Department website at www.justice.gov/fairhousing.
The proceeds of the settlement will be used to compensate the victims of SunTrust Mortgage’s discrimination, who were located in 34 states and the District of Columbia when the discrimination occurred. The proposed settlement provides for an independent administrator to contact and distribute payments of compensation at no cost to borrowers whom the Justice Department identifies as victims of SunTrust Mortgage’s discrimination. Borrowers who are eligible for compensation from the settlement will be contacted by the administrator. The department will make a public announcement and post contact information on its website once the administrator begins contacting victims. Individuals who believe that they may have been victims of lending discrimination by SunTrust Mortgage and have questions about the settlement may email the department at [email protected].
Related Materials:
Assistant Attorney General for the Civil Rights Division Thomas E. Perez Speaks on the Fair Lending Settlement with SunTrust Mortgage Inc.
Complaint (PDF)
Consent Order (PDF)Justice Department Files Lawsuit Against Las Vegas Casino for Unfair Documentary PracticesRead the Press Release
The Justice Department announced today that it filed a lawsuit against Tuscany Hotel and Casino LLC in Las Vegas, alleging that the company engaged in a pattern or practice of discrimination in the employment eligibility verification and re-verification process. The Immigration and Nationality Act (INA) requires employers to treat all authorized workers equally during the hiring, firing and employment eligibility verification process, regardless of their national origin or citizenship status.
The complaint alleges that Tuscany treated non-citizens differently from U.S. citizens during the employment eligibility verification and reverification process by requesting non-citizen employees to provide more or different documents or information than required during the initial employment eligibility verification process, and demanded specific documents during the reverification process. The complaint further alleges that Tuscany subjected lawful permanent residents to unnecessary reverification based on their citizenship status after requesting and entering into the payroll system the expiration date of their Permanent Resident Cards (green cards) for purposes of reverification.
“Employers must not treat authorized workers differently during the employment eligibility verification process based on their citizenship status or national origin,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The department vigorously enforces the anti-discrimination provisions of the INA so that authorized workers are treated fairly in the work place.”
The complaint, which seeks monetary and injunctive relief, was filed before the Office of the Chief Administrative Hearing Officer (OCAHO) of the Department of Justice and served on the company on May 29, 2012.
The Office of Special Counsel for Immigration-Related Unfair Employment Practices (OSC) is responsible for enforcing the anti-discrimination provision of the INA, which protects work authorized individuals from employment discrimination on the basis of citizenship status or national origin, including discrimination in hiring, firing and the employment eligibility verification (Form I-9) process. For more information about protections against employment discrimination under the immigration law, call the OSC’s worker hotline at 1-800-255-7688 (TDD 1-800-237-2525), the OSC’s employer hotline at 1-800-255-8155 (TDD 1-800-362-2735), sign up for a no-cost webinar at www.justice.gov/crt/about/osc/webinars.php or visit OSC’s website at www.justice.gov/crt/about/osc.
Former Tuscaloosa, Alabama Police Sergeant Charged with Civil Rights ViolationsRead the Press Release
A federal grand jury in Birmingham, Ala., today returned a five-count indictment charging former city of Tuscaloosa Police Sergeant Jason Glenn Thomas with federal civil rights offenses in connection with the aggravated sexual assault of a Tuscaloosa woman in 2011, announced Thomas E. Perez, Assistant Attorney General for the Civil Rights Division, Joyce White Vance, U.S. Attorney for the Northern District of Alabama, and Patrick J. Maley, Special Agent in Charge of the FBI Birmingham Field Office.
Thomas is charged with violating the constitutional rights of a Tuscaloosa woman by sexually assaulting her in March 2011. The indictment also charges Thomas with obstruction of justice based upon misleading statements that he provided to law enforcement officers during the investigation of the sexual assault allegations.
Thomas faces a possible maximum sentence of life in prison and a fine in excess of $1 million.
This case is being investigated by the Tuscaloosa resident agency of the FBI’s Birmingham Field Office, and is being prosecuted by Trial Attorney D.W. Tunnage of the Justice Department’s Civil Rights Division, along with Assistant U.S. Attorney George Martin for the District of Alabama.
An indictment is merely an accusation, and the defendant is presumed innocent unless proven guilty.