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Thursday 31 May 2012
Former National Guard Recruiter Pleads Guilty for Leading Role in Bribery <br /> <br /> and Fraud Scheme to Illegally Obtain Military Recruiting BonusesRead the Press Release
A former Army National Guard recruiter pleaded guilty today in the Western District of Texas for his lead role in a bribery and fraud conspiracy that caused more than $90,000 in losses to the National Guard Bureau, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division.
Former Sergeant Rafael L. Acosta Jr., 39, of San Antonio, Texas, pleaded guilty to one count of conspiracy to commit bribery and wire fraud. He was charged in a criminal information filed on May 25, 2012, in U.S. District Court for the Western District of Texas.
The case against Acosta arises from an investigation involving allegations that former and current military recruiters and U.S. soldiers in the San Antonio area engaged in a wide-ranging bribery and fraud scheme to illegally obtain recruiting bonuses. To date, the investigation has led to charges against a total of eight individuals, six of whom have pleaded guilty, including Acosta.
According to court documents, in approximately September 2005, the National Guard Bureau entered into a contract with Document and Packaging Broker Inc., to administer a recruiting program designed to offer monetary incentives to soldiers of the Army National Guard who referred others to join the Army National Guard. Through this program, a participating soldier could receive up to $2,000 in bonus payments for every person referred to join the Army National Guard. Based on certain milestones achieved by the referred soldier, a participating soldier would receive payments in the form of direct deposits and pre-paid debit card payments. To participate in the program, soldiers were required to have an online recruiting assistant account.
According to court documents, Acosta enlisted in the Army National Guard in approximately May 2007, and he served as a recruiter between approximately August 2007 and November 2009. Acosta admitted that, between approximately January 2008 and February 2010, he and other recruiters obtained the names and Social Security numbers of potential soldiers. Acosta and his co-conspirators used this information to claim that those co-conspirators were responsible for recruiting the potential soldiers, when in fact they were not.
Acosta admitted that he and others used the recruiting assistant accounts of five participating soldiers to receive the fraudulently obtained recruiting bonuses and that the majority of this money was then sent directly to bank accounts controlled by Acosta. Acosta further admitted that he divided the unlawful proceeds among his co-conspirators, including four soldiers who permitted Acosta to use their accounts and two other recruiters who provided information concerning potential soldiers.
The charge of conspiracy to commit bribery and wire fraud carries a maximum penalty of five years in prison and a maximum fine of $250,000, or twice the pecuniary gain or loss. Sentencing has been scheduled for Aug. 24, 2012, before Chief U.S. District Judge Fred Biery in San Antonio.
The case is being prosecuted by Trial Attorneys Edward J. Loya Jr. and Brian A. Lichter of the Criminal Division’s Public Integrity Section. The case is being investigated by agents from the San Antonio Fraud Resident Agency of the Major Procurement Fraud Unit of the U.S. Army Criminal Investigation Command.
El Departamento de Justicia Realiza Acuerdo Conciliatorio por 21 Millones de Dólares en Resolución de Alegatos de Discriminación en el Otorgamiento de Préstamos por Parte de SunTrust MortgageRead the Press Release
WASHINGTON - SunTrust Mortgage Inc., la subsidiaria de préstamos hipotecarios del 11º mayor banco comercial de la nación, ha acordado pagar 21 millones de dólares para resolver una demanda presentada por el Departamento de Justicia, por haber exhibido un patrón o práctica de discriminación que incrementó los precios de los préstamos para muchos de los prestatarios afroestadounidenses e hispanos calificados que obtuvieron préstamos entre 2005 y 2009 a través de las oficinas minoristas regionales y la red nacional de corredores hipotecarios de SunTrust Mortgage.
El acuerdo conciliatorio también exige que SunTrust Mortgage siga utilizando políticas y prácticas que adoptó para prevenir la discriminación después del período en cuestión en la demanda.
El acuerdo conciliatorio, el cual está sujeto a aprobación por parte del tribunal, fue presentado hoy en el tribunal federal de Richmond, Va., donde está ubicada la sede de SunTrust Mortgage. El acuerdo conciliatorio surge después de una investigación de dos años y medios por parte del Departamento de Justicia, la que incluyó examinar documentos y datos internos de la compañía asociados a más de 850,000 hipotecas para vivienda que originó SunTrust Mortgage entre 2005 y 2009. SunTrust Mortgage colaboró plenamente con la investigación del Departamento de Justicia de sus prácticas de otorgamiento de préstamos y aceptó realizar un acuerdo sin litigio contencioso.
“El acuerdo conciliatorio de hoy demuestra que el Departamento de Justicia toma en serio su responsabilidad de investigar las prácticas de otorgamiento de préstamos hipotecarios durante los años del auge hipotecario y, cuando las pruebas indican que se ha violado la ley, obtener compensación para las víctimas de conducta ilegal”, señaló Thomas E. Perez, Secretario Auxiliar de la División de Derechos Civiles. “Sin embargo, trabajaremos constructivamente con prestamistas responsables como SunTrust Mortgage que están dispuestos a tomar los pasos necesarios para asegurar igual oportunidad de crédito para todos los prestatarios. Felicitamos a SunTrust Mortgage por actuar para implementar políticas fuertes de otorgamiento justo de préstamos, inclusive antes de conocer los resultados completos de nuestra investigación”.
Se presentó el acuerdo conciliatorio en conjunto con la demanda del Departamento que alega que SunTrust Mortgage violó la Ley de Vivienda Justa y la Ley de Igualdad de Oportunidades de Crédito al cobrarles a más de 20,000 prestatarios afroestadounidenses e hispanos cargos y tasas de interés más altos que a los prestatarios blancos no hispanos, no basándose en el riesgo que presentaban como prestatarios, sino debido a su raza u origen nacional. Específicamente, los alegatos se refieren a préstamos realizados a prestatarios afroestadounidenses entre 2005 y 2008 a través de más de 200 oficinas minoristas directamente operadas por SunTrust Mortgage en las regiones Sudeste y Atlántico Central de los Estados Unidos. Los alegatos también se refieren a préstamos otorgados a prestatarios afroestadounidenses e hispanos entre 2005 y 2009 a través de la red nacional de corredores hipotecarios de SunTrust Mortgage.“La parcialidad racial y étnica no tiene lugar en el mercado de préstamos”, dijo Neil H. MacBride, Fiscal Federal para el Distrito Este de Virginia. “Nos complace que SunTrust Mortgage está tomando medidas para compensar a las víctimas y asegurar el acceso justo y equitativo al crédito en el futuro".
La práctica comercial de SunTrust Mortgage durante los períodos cubiertos por la demanda permitió que sus oficiales de préstamos y corredores hipotecarios variaran la tasa de interés de un préstamo y otros cargos del precio que había sido establecido basado en factores crediticios objetivos del prestatario. Debido a esta libertad subjetiva y sin orientación de establecer precios, los prestatarios afroestadounidenses e hispanos pagaron más.
Antes del acuerdo conciliatorio, SunTrust Mortgage había implementado políticas que reducían sustancialmente la libertad de sus oficiales de préstamos y corredores hipotecarios para variar la tasa de interés de un préstamo y otros cargos del precio que había sido establecido, basado en factores crediticios objetivos del prestatario, y que requerían que un supervisor documentara y examinara los motivos para las variaciones. Dichas políticas, compatibles con las reglas impuestas por la Reserva Federal en abril del 2011 e incorporadas en el acuerdo conciliatorio, restringen la compensación a oficiales de préstamos y corredores hipotecarios según los términos y condiciones de un préstamo específico. El acuerdo conciliatorio de hoy exige que SunTrust Mortgage conserve estas prácticas optimizadas durante, por lo menos, los próximos tres años y que siga monitoreando su otorgamiento de préstamos en busca de señales de discriminación y provea informes del monitoreo a los Estados Unidos.
La investigación por parte del Departamento de las prácticas de otorgamiento de préstamos de SunTrust Mortgage comenzó después que la Junta de Gobernadores de la Reserva Federal refiera los posibles patrones o prácticas discriminatorios a la División de Derechos Civiles del Departamento de Justicia en diciembre del 2009. La compañía madre de SunTrust Mortgage, SunTrust Bank, con sede en Atlanta, es miembro del Sistema de Reserva Federal y uno de los mayores bancos regionales de la nación con 178 billones de dólares en activos y más de 1,600 sucursales en siete estados y el Distrito de Columbia.
“La discriminación racial, u otra discriminación ilegal, no tiene lugar en nuestros mercados de crédito", señaló la Gobernadora de Junta de la Reserva Federal Elizabeth A. Duke. “Nos complace que este acuerdo haya sido diseñado para asegurar el acceso justo al crédito”.
El anuncio del día de hoy es parte de un esfuerzo en marcha de la Fuerza de Tarea Interagencial de Coacción contra el Fraude Financiero (en inglés: Financial Fraud Enforcement Task Force (FFETF)) del Presidente Obama. El Presidente Obama estableció la Fuerza de Tarea Interagencial de Coacción contra el Fraude Financiero para llevar a cabo una iniciativa enérgica, coordinada y proactiva para investigar y enjuiciar delitos financieros. La fuerza de tarea incluye a representantes de una amplia gama de dependencias federales, autoridades regulatorias, inspectores generales y miembros de las fuerzas del orden público estatales y locales, quienes, trabajando juntos, aprovechan un poderoso espectro de recursos de coacción penal y civil. La fuerza de tarea está trabajando para mejorar la labor en todo el poder ejecutivo federal, y con asociados estatales y locales, para investigar y enjuiciar los delitos financieros importantes, asegurar un castigo justo y eficaz para quienes cometan delitos financieros, combatir la discriminación en los mercados de préstamos y financieros y recuperar fondos para las víctimas de delitos financieros. Para obtener más información sobre la fuerza de tarea, visite www.StopFraud.gov.
Para obtener una copia de la demanda y de la orden de acuerdo conciliatorio propuesto, así como también información adicional sobre la labor del Departamento de Justicia para hacer valer las leyes de otorgamiento justo de préstamos, visite el portal del Departamento de Justicia en www.justice.gov/fairhousing.
Los fondos del acuerdo conciliatorio se utilizarán para compensar a las víctimas de discriminación por parte de SunTrust Mortgage, localizadas en 34 estados y el Distrito de Columbia cuando ocurrió la discriminación. El acuerdo conciliatorio propuesto dispone que un administrador independiente se comunique con prestatarios identificados por el Departamento de Justicia como víctimas de discriminación por parte de SunTrust Mortgage y distribuya a los mismos pagos de compensación sin ningún costo. El administrador se comunicará con los prestatarios que reúnan los requisitos para compensación bajo el acuerdo conciliatorio. El Departamento realizará un anuncio público y publicará información de contacto en su portal en Internet una vez que el administrador comience a comunicarse con las víctimas. Las personas que crean que pueden haber sido víctimas de discriminación crediticia por parte de SunTrust Mortgage y tengan preguntas acerca del acuerdo conciliatorio pueden enviar un correo electrónico a [email protected].
Wednesday 30 May 2012
South Florida Retired Businessman Pleads Guilty<br /> <br /> to Failing to Disclose Assets Held in Swiss BanksRead the Press Release
Wolfgang Roessel of Ft. Lauderdale, Fla., pleaded guilty today in the U.S. District Court in the Southern District of Florida to filing a false tax return for 2007, the Justice Department and Internal Revenue Service (IRS) announced.
According to the court documents, Roessel, a U.S. citizen, maintained bank accounts at UBS AG in Switzerland, which he failed to report on his 2002 through 2007 personal income tax returns. He also failed to file a Report of Foreign Bank and Financial Accounts (FBAR) for these same years. In 2002, Roessel opened a UBS numbered investment account in the nominee name of a foreign entity, Neptune Trust, with an opening balance of approximately $4–5 million. In around 2004, this account and subaccounts were transferred into the nominee name of another foreign entity, Cyan United, and traded in U.S. and foreign securities. The defendant met with a Swiss banker periodically to discuss the performance of his accounts.
Court records also established that, dating back to the 1980s and up through the late 2000s, Roessel held accounts at different times at Bank Wegelin and another Swiss bank (Bank A) into which he deposited foreign proceeds from his business, yet which he neither reported on his tax returns nor on the required FBARs. In the early 2000s, the foreign account at Bank A was put into the nominee name of Cyan United. A Swiss money manager made investments on Roessel’s behalf and met with the defendant periodically to discuss the performance of the account. In 2008 and 2009, during which period the defendant was aware of the government’s grand jury investigation into his foreign UBS accounts, the defendant disclosed only the existence of the UBS accounts on his tax returns for those years and did not report the other Swiss account.
The plea agreement includes a tax loss of $312,802.95 for 2002 through 2007, and an FBAR penalty owing to the U.S. Treasury of $5,750,933.99, which is 50 percent of the 2007 unreported foreign bank accounts year-end balance of over $11 million. Roessel faces a potential maximum prison term of three years and a fine of up to $250,000. A sentencing date has not been set.
Kathryn Keneally, Assistant Attorney General of the Justice Department’s Tax Division, and Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida, thanked Special Agents of IRS – Criminal Investigation, who investigated the case, and Tax Division Trial Attorney Rebecca Perlmutter and Assistant U.S. Attorney Randy Katz, who prosecuted the case.
Singapore Ship Operator and Engineers Plead Guilty to Crimes Related to Pollution from Cargo Ship Traveling to Mobile, AlabamaRead the Press Release
WASHINGTON – A ship management company headquartered in Singapore pleaded guilty and was sentenced today in federal court in Mobile for deliberately falsifying records to conceal pollution discharges from the ship directly into the sea. Target Ship Management Pte. Ltd., the operator of the M/V Gaurav Prem, pleaded guilty to a violation of the Act to Prevent Pollution from Ships for failing to properly maintain an oil record book as required by federal and international law, as well as making material false statements during a U.S. Coast Guard inspection of the ship at the port of Mobile in September 2011.
Payongyut Vongvichinakul, the ship’s chief engineer, and Pakpoom Hanprap, the ship’s second engineer, also pleaded guilty to violations of the Act to Prevent Pollution from Ships and are scheduled to be sentenced on July 19, 2012.
The company was sentenced to pay a $1 million criminal fine along with a $200,000 community service payment to the National Fish & Wildlife Foundation. The community service payment will be earmarked for projects in the Southern District of Alabama, including Mobile Bay. Target was also sentenced to three years probation. As a condition of the probation, ships operated or managed by Target that will or may call on the United States, must be subject to an environmental compliance plan supervised by outside auditors and the court.
“Deliberate pollution and acts to conceal it are serious crimes that we will continue to vigorously prosecute,” said Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division of the Department of Justice. “This significant criminal fine should send a message to shipping companies worldwide that those who pollute our oceans will be held accountable.”
“This case represents a tremendous win for our environment,” said Kenyen Brown, U.S. Attorney for the Southern District of Alabama. “The U.S. relies on vessel crews and their management companies to provide accurate logs and records when calling on U.S. ports to ensure oily wastes are discharged properly at sea. The U.S. is fully committed to prosecuting those cases where vessels cover-up improper oily waste discharges at sea through the use of falsified logs. This prosecution would not have been possible without the hard work of the U.S. Coast Guard at Sector Mobile and District Eight, Coast Guard Criminal Investigative Service, the Environmental Protection Agency Criminal Investigation Division and Department of Justice, Environmental and Natural Resources Division, Environmental Crimes Section.”
“This plea and sentence reflect the US Coast Guard's steadfast commitment to protecting the marine environment. We will continue to investigate violations of environmental law, working with partners at the Department of Justice, Environmental Protection Agency and others, to ensure the stewardship and health of our oceans," said Rear Admiral Roy A. Nash, Commander, Eighth Coast Guard District.”
“The oceans must be protected from shipping companies that look to cut corners by dumping waste improperly,” said Maureen O’Mara, Special Agent in Charge of EPA’s criminal enforcement program in Alabama. “The defendants in this case knowingly discharged oily waste from their vessel into the open water and tried to cover it up. Today’s guilty pleas demonstrate that the U.S. government will not tolerate the flagrant violation of its laws.”
According to papers filed in court, senior Target employees discharged and caused the overboard discharge of oily bilge waste from the M/VGaurav Prem on multiple occasions as the vessel sailed from South Korea to Mobile. The vessel departed South Korea on or about July 29, 2011, and underwent a Coast Guard inspection on Sept. 21, 2011, in Mobile. The discharges were not recorded in the vessel’s oil record book as required. The deliberate overboard discharges of oily waste were accomplished through the ship’s fixed bilge piping system and by using the ship’s general service pump in a manner that intentionally bypassed required pollution prevention equipment, including the ship’s oily water separator and oil content monitor, designed to detect and prevent discharges containing more than 15 parts per million (ppm) oil, the international standard. The bypass system used a “spool pipe” to connect the ship’s bilge system with the ship’s ballast system to make the illegal discharges from the vessel’s bilges and bilge holding tank.
Federal and international law requires that all ships comply with pollution regulations that include the proper disposal of oily water and sludge by passing the oily water through a separator aboard the vessel or burning the sludge in the ship’s incinerator. Federal law also requires ships to accurately record each disposal of oily water or sludge in an oil record book and to have the record book available for the U.S. Coast Guard when the vessel is within the waters of the United States.
The ship’s captain, Prastana Taohim, was convicted at a jury trial on May 17, 2012, for obstructing the Coast Guard’s inspection for similar but unrelated charges. At trial, it was found that Taohim ordered the ship’s chief officer to throw hundreds of plastic pipes into the ocean and not record the discharge in the ship’s garbage record book as required. Taohim then knowingly made the garbage record book available during the Coast Guard inspection on Sept. 21, 2011. The plastic pipes had previously contained insecticide and were used to fumigate a grain shipment. The jury also found the captain guilty of one count of obstruction of justice related to covering up the pollution by creating a false and fictitious garbage log. The captain is scheduled to be sentenced on Aug. 15, 2012.
This investigation was conducted by the U.S. Coast Guard Investigative Service, Mobile, and the U.S. Environmental Protection Agency Criminal Investigation Division, Gulf Breeze, Fla. Additional assistance was provided by the Coast Guard Sector Mobile and U.S. Coast Guard Eighth District Legal Office. The case was prosecuted by Trial Attorney David O’Connell of the Justice Department’s Environmental Crimes Section of the Environment and Natural Resources Division and Assistant U.S. Attorney Michael Anderson of the U.S. Attorney’s Office for the Southern District of Alabama.
New York Businessman Pleads Guilty<br /> to Filing False Corporate Tax ReturnRead the Press Release
Sung Soo Shin, of Staten Island, N.Y., president of Mission Design and Management Inc. (MDMI), pleaded guilty in the Eastern District of New York to filing a false corporate income tax return, for the fiscal year 2009, before U.S. District Court Judge Nicholas G. Garaufis, the Justice Department and the Internal Revenue Service (IRS) announced today.
According to the information and other documents filed in court, Sung Soo Shin caused MDMI to file false corporate tax returns understating its gross receipts by about $1.77 million for fiscal year 2007, $1.61 million for fiscal year 2008, and $2.35 million for fiscal year 2009. In total, Shin caused a tax loss of approximately $1,945,153.
Shin’s sentencing is set for Sept. 21, 2012. Shin faces a potential maximum sentence of three years in prison, restitution of more than $1 million and a fine of up to $250,000.
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 Mark Kotila and Mark McDonald for prosecuting the case.
National Science Foundation Program Director Pleads Guilty in Connection with Scheme to Conceal Received BenefitsRead the Press Release
WASHINGTON – A former program director at the National Science Foundation (NSF) pleaded guilty today in the Eastern District of Virginia to engaging in a scheme to conceal gifts and fraudulent payments he received, Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney Neil H. MacBride for the Eastern District of Virginia announced.
Dr. Shih Chi Liu, 73, of Silver Spring, Md., pleaded guilty before U.S. District Judge James C. Cacheris. Liu was charged in a criminal information filed today.
According to a statement of facts filed with his plea agreement, Liu served in various program director positions in the NSF Engineering Directorate from 1981 until December 2011. The NSF is an independent federal agency whose mission is to fund research and education in science and engineering disciplines. Liu was required in his official position to submit a yearly financial disclosure report detailing travel-related reimbursements and gifts totaling more than a particular amount that he received during the reporting period. In the years 2006, 2007, 2008, 2009 and 2010, Liu filed false reports that failed to report payments and gifts he had received. In doing so, he concealed that he had arranged for an accredited university to pay false invoices for services that the university did not receive, pocketing the fraudulently obtained money himself. He also concealed that he had received money for international travel from an accredited university, at times simultaneously requesting and receiving reimbursements from NSF for that same travel.
Liu faces a maximum penalty of five years in prison and a fine of $250,000 when he is sentenced on Aug. 22, 2012.This case was investigated by the NSF Office of the Inspector General. Deputy Chief Peter Koski and Trial Attorney Monique Abrishami of the Public Integrity Section in the Justice Department’s Criminal Division and Assistant U.S. Attorney Jasmine Yoon of the Eastern District of Virginia are prosecuting the case.
Justice Department Settles Religious Discrimination Lawsuit Against New York City Transit AuthorityRead the Press Release
The Justice Department announced today that it has reached a settlement with the New York City Transit Authority (NYCTA) to resolve allegations that the NYCTA is engaged in a pattern or practice of religious discrimination.
The Justice Department filed its complaint in September 2004 in the U.S. District Court for the Eastern District of New York. The complaint alleged that the NYCTA violated Title VII of the Civil Rights Act of 1964 by selectively enforcing its uniform headwear policies against employees who are unable to comply for religious reasons and by failing or refusing to reasonably accommodate those employees whose religious practices require an accommodation from the NYCTA’s uniform headwear policies. Title VII prohibits discrimination in employment on the basis of race, color, sex, national origin and religion.
According to the Justice Department’s complaint, the NYCTA had not enforced its uniform headwear policies prior to Sept. 11, 2001. However, beginning in or about March 2002, the NYCTA began to selectively enforce those policies against Muslim and Sikh employees, moving them or threatening to move them out of public contact positions because the employees, consistent with their sincerely held religious beliefs, refused to attach NYCTA logos to their khimars and turbans, respectively.
Under the terms of the settlement agreement, which must still be approved by the court, the NYCTA must: (1) adopt new uniform headwear policies, which would allow employees working in public contact positions to wear khimars, yarmulkes, turbans, kufis, skullcaps, tams and headscarves without attaching anything to the headwear; (2) implement and distribute a new religious accommodation policy consistent with Title VII’s requirement to reasonably accommodate the religious practices of all employees and prospective workers; and (3) provide guidance to and ensure that training is completed by the NYCTA personnel responsible for implementing the agency’s new religious accommodation policy and procedure. Additionally, the NYCTA will pay $184,500, divided among eight current and former NYCTA employees who were denied religious accommodations related to the NYCTA’s prior uniform headwear policies.
“This settlement agreement sends a clear message that the Department of Justice will not tolerate religious discrimination,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “I am pleased that the NYCTA has agreed to end its discriminatory practices that for years have forced employees to choose between practicing their religion and maintaining their jobs.”
The continued enforcement of Title VII has been and remains a priority for the Justice Department’s Civil Rights Division. Additional information about the Civil Rights Division is available at its website at www.usdoj.gov/crt.
Related Materials:
NYCTA Settlement Agreement
Justice Department Settles Lawsuit Against New Jersey Information Technology Company for RetaliationRead the Press Release
WASHINGTON – The Justice Department settled a lawsuit today against Whiz International LLC, an information technology staffing company in Jersey City, N.J., regarding allegations that the company violated the anti-discrimination provision of the Immigration and Nationality Act (INA) when it terminated an employee in retaliation for expressing opposition to Whiz’s alleged preference for foreign nationals with temporary work visas.
The complaint, which was filed May 22, 2012, alleged that the company directed an employee that served as a receptionist and a recruiter to prefer certain noncitizens in its recruitment efforts and then terminated the employee when she expressed discomfort with excluding U.S. citizens and lawful permanent residents from consideration. The anti-discrimination provision in the INA prohibits employers from retaliating against workers who oppose a practice that is illegal under the statute or who attempt to assert rights under the statute.
Under the terms of the settlement agreement, the company has agreed to pay $21,780 in monetary relief to the injured party, which included backpay and front pay, along with a $1,000 civil penalty. The company has also agreed to be subject to three years of monitoring and reporting by the Justice Department.
“We are pleased to reach a swift and just resolution of this case,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “Retaliation against employees for speaking up against potential civil rights violations will never be tolerated. The Civil Rights Division is committed to ensuring that U.S. citizens and other work-authorized individuals are not discriminatorily denied work opportunities.”
The Office of Special Counsel for Immigration-Related Unfair Employment Practices (OSC) is responsible for enforcing the anti-discrimination provisions of the INA, which protect U.S. citizens and certain work-authorized individuals from citizenship status discrimination. The INA also protects work-authorized individuals from national origin discrimination, over-documentation in the employment eligibility verification process and retaliation.For more information about protections against employment discrimination under the immigration laws, call the OSC’s worker hotline at 1-800-255-7688 (1-800-237-2525, TDD for hearing impaired), call the OSC’s employer hotline at 1-800-255-8155 (1-800-362-2735, TDD for hearing impaired), sign up for a no-cost webinar at www.justice.gov/crt/about/osc/webinars.php, email [email protected], or visit the website at www.justice.gov/crt/about/osc/.
Tuesday 29 May 2012
Self-proclaimed “Governor” of Alabama Sentenced to Ten Years in Federal Prison for Tax FraudRead the Press Release
Monty Ervin and Patricia Ervin, owners of Southern Realty in Dothan, Ala., were sentenced today to federal prison for conspiring to defraud the United States and tax evasion, the Justice Department and Internal Revenue Service (IRS) announced. After a two-week trial that began Oct. 25, 2011, a federal jury in Montgomery, Ala., convicted the Ervins of one count of conspiracy and three counts of tax evasion. The jury also convicted Patricia Ervin of one count of structuring transactions to avoid bank reporting requirements. Monty Ervin was sentenced to 120 months in prison; Patricia Ervin was sentenced to five years of probation, with the condition that she spend 40 consecutive weekends in jail. In sentencing the Ervins, the court found that Monty Ervin was the leader and organizer of the conspiracy and exercised control over Patricia Ervin.
Based on the evidence introduced at trial, the Ervins amassed hundreds of investment properties over the last decade, receiving more than $9 million in rental income. Despite receiving this income, the couple paid no federal income taxes. When confronted by the IRS in 2006, the Ervins proclaimed that they were not United States citizens, and as “sovereigns,” did not consider themselves subject to federal or state law.
The evidence established that Monty Ervin and Patricia Ervin also filed numerous documents in probate court renouncing their U.S. citizenship. In one such filing, Monty Ervin declared himself the “governor” of Alabama in its “original jurisdiction.” The Ervins had a license plate on their vehicle which law enforcement witnesses testified at trial was associated with a “sovereign citizens” organization.
The Ervins owned and managed Southern Realty, a property management company in Dothan. As the evidence showed at trial, the couple concealed their assets from the IRS by placing investment properties into the names of nominees – “trusts” and “trustees.” The “trustees” named on property deeds testified that they were not involved in the sale or purchase of the properties and that the Ervins “stamped” their signatures onto official property records. Patricia Ervin also structured deposits into Southern Realty’s bank account in an effort to evade federal currency reporting requirements.
In addition to hundreds of real estate investment properties, the evidence also showed that the Ervins had amassed beachfront condominium units in their own names including a $1.3 million unit they paid for in cash and, when investigated by the IRS, transferred those properties into the names of bogus “trusts” and “trustees.” Additionally, the government introduced into evidence $350,000 of gold coins said to have been buried in their yard.
The Ervins were indicted by a federal grand jury in Montgomery in February 2011. In March, Monty Ervin was arrested by a U.S. Marshal’s Service Fugitive Task Force in Naples, Fla., with a notebook containing the latitudinal and longitudinal coordinates of an island off the coast of Honduras.
“Tax defiers who flout the tax laws by concealing assets in bogus trusts risk criminal prosecution and substantial prison terms, as well as having to pay their back taxes, interest, and penalties,” said Kathryn Keneally, Assistant Attorney General of the Justice Department’s Tax Division.
“The legality of our income tax laws has been challenged repeatedly and the courts have consistently upheld these laws,” said Richard Weber, Chief, IRS Criminal Investigation. “Sentencings like the one returned against the Ervins send a loud and clear message that regardless of their opinions, people who defy the tax laws will be fully investigated, prosecuted and subjected to the full punishment of the law for their actions.”
In addition to prison time, U.S. District Judge Myron H. Thompson ordered the Ervins to pay $1,436,508 in restitution to the IRS.
Assistant Attorney General Keneally thanked special agents of IRS-Criminal Investigation for investigating the case, Trial Attorneys Justin Gelfand and Michael Boteler of the Justice Department’s Tax Division, and Assistant U.S. Attorney Todd Brown for prosecuting the case.
Romanian National Extradited to U.S. to Face Charges for Allegedly Participating in Multimillion Dollar Scheme to Hack into and Steal Credit Card Data from U.S. MerchantsRead the Press Release
WASHINGTON – Adrian-Tiberiu Oprea, 28, of Constanta, Romania, was extradited to the United States and appeared in federal court in New Hampshire today, to face federal charges relating to his alleged participation in an international multimillion dollar scheme to remotely hack into and steal payment card data from hundreds of U.S. merchants’ “point of sale” computer systems, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney John P. Kacavas of the District of New Hampshire.
In a four-count indictment unsealed on Dec. 6, 2011, Oprea, along with three other Romanian nationals, Iulian Dolan, Cezar Iulian Butu and Florin Radu, were charged with conspiracy to commit computer fraud, conspiracy to commit wire fraud and conspiracy to commit access device fraud. Oprea was extradited to the United States on May 25, 2012. He was arrested on Dec. 1, 2011, in Romania and remained in custody there prior to his extradition. Dolan and Butu were arrested upon their entry into the United States on Aug. 13 and Aug. 14, 2011, respectively, and remain in United States custody. Radu remains at large.
According to the indictment, from approximately 2008 until May 2011, Oprea, Dolan, Butu and Radu conspired to remotely hack into more than 200 U.S.-based merchants’ point-of-sale (POS) or “checkout” computer systems in order to steal customers’ credit, debit and gift card numbers and associated data (collectively referred to as “credit card data”). A POS system allows merchants to process customer purchases, including those made using credit, debit and gift cards, and typically includes a computer, monitor, integrated credit card processing system, signature capture device and a customer pin pad device. Merchant victims include more than 150 Subway restaurant franchises located throughout the United States, including in the District of New Hampshire, as well as more than 50 other identified retailers. According to the indictment, members of the conspiracy have compromised the credit card data of more than 80,000 customers, and millions of dollars of unauthorized purchases have been made using the compromised data.
If convicted, each defendant faces a maximum sentence of five years in prison for the conspiracy to commit computer fraud charge and for each conspiracy to commit access device fraud charge and 20 years in prison for conspiracy to commit wire fraud charge. They also face up to three years of supervised release, a fine of up to twice the amount of the fraud loss, and restitution.
The case was investigated by the U.S. Secret Service and is being prosecuted by Assistant U.S. Attorney Arnold H. Huftalen of the District of New Hampshire and Trial Attorney Mona Sedky of the Computer Crime and Intellectual Property Section in the Justice Department’s Criminal Division. The Office of International Affairs in the Justice Department’s Criminal Division provided substantial assistance. The department would like to thank Subway for its cooperation.
The charges contained in the indictment are allegations. The defendants are presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Owner of Hawaii Car Dealerships and Chief Financial Officer Plead Guilty to Tax CrimesRead the Press Release
Charles Alan Pflueger, owner of Pflueger Inc., Randall Kurata, the company’s chief financial officer, and Julie Kam, Pflueger’s executive assistant, pleaded guilty to filing false federal income tax returns before U.S. District Court Judge Leslie E. Kobayashi in Honolulu, the Justice Department and the Internal Revenue Service (IRS) announced today.
According to the indictment and other documents filed in Honolulu federal court, Charles Alan Pflueger, Randall Kurata, Julie Kam and others caused Pflueger Inc. to pay the personal expenses of Charles Alan Pflueger and others. The three defendants then caused Pflueger Inc. to improperly deduct the personal expenses as business expenses on Pflueger Inc.’s corporate tax returns. Pflueger caused another of his companies, Pacific Auto Distributors LLC, to pay additional personal expenses, and he did not report those payments as income on his personal tax returns.
Pflueger pleaded guilty to one count of filing a false individual federal income tax return for tax year 2005. Kam also pleaded guilty to one count of filing a false individual federal income tax return for tax year 2005 because she failed to report as income personal expenses that Pacific Auto Distributors LLC paid on her behalf.
Kurata pleaded guilty to one count of filing a false corporate federal income tax return for Pflueger Inc. for tax year 2003. Kurata admitted that from 2003 through at least 2005, he knew that Pflueger Inc. was paying for various individuals’ personal expenses, including Pflueger’s. Kurata further admitted that during 2003 he personally signed checks from Pflueger Inc. that paid individuals’ personal expenses. Kurata filed Pflueger Inc.’s corporate tax return for 2003 knowing that it was false in that it improperly deducted as business expenses significant personal expenses of Pflueger.
Pflueger and Kam’s sentencing is set for Jan. 31, 2013, and Kurata’s sentencing is scheduled for Dec. 20, 2012.
Kathryn Keneally, Assistant Attorney General for the Justice Department’s Tax Division thanked Special Agents of IRS - Criminal Investigation, who investigated the case, Assistant U.S. Attorney Leslie E. Osborne, Jr. and Tax Division Trial Attorneys Timothy J. Stockwell and Dennis R. Kihm, who prosecuted the case.
Mid-America Pipeline Company and Enterprise Products Operating to Pay $1 Million for Spills in Iowa, Kansas and NebraskaRead the Press Release
WASHINGTON – Mid-America Pipeline Company LLC (MAPCO), and Enterprise Products Operating LLC, of Houston, have agreed to pay a civil penalty of more than $1 million to the United States to settle violations of the federal Clean Water Act related to three natural gasoline pipeline spills in Iowa, Kansas and Nebraska.
As part of a consent decree lodged today in U.S. District Court in Omaha, Neb., and in addition to paying the $1,042,000 civil penalty, the companies have agreed to undertake various measures aimed at reducing external threats to their pipeline, enhance their reporting of spills, and spend at least $200,000 to identify and prevent external threats to the pipeline involved in the spills.
MAPCO owns and Enterprise operates the 2,769-mile West Red Pipeline, which transports mixed natural gasoline products between Conway, Kan., and Pine Bend, Minn. The settlement resolves Clean Water Act violations related to three spills that occurred along the pipeline:
- A March 29, 2007, rupture near Yutan, Neb., which caused the discharge of approximately 1,669 barrels of natural gasoline directly into an unnamed ditch and Otoe Creek.
- An April 23, 2010, rupture near Niles, Kan., which caused the discharge of approximately 1,760 barrels of natural gasoline directly into an unnamed ditch, Cole Creek, Buckeye Creek and the Solomon River.
- An Aug. 13, 2011, rupture near Onawa, Iowa, which caused the discharge of approximately 818 barrels of natural gasoline directly into the Missouri River.
“Pipeline ruptures and resulting spills can cause significant harm to the environment, so it is essential that pipeline owners and operators abide by federal laws intended to protect our land and waters,” said Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division of the Department of Justice. “This agreement will put into place important measures to prevent future spills and identify potential safety threats along MAPCO’s West Red Pipeline.”
“More than 20,000 miles of pipeline, carrying oil and petroleum products, cross the states of Iowa, Kansas, Missouri and Nebraska in EPA’s Region 7,” said Environmental Protection Agency Regional Administrator Karl Brooks. “A frequent cause of pipeline breaks is the action of third parties during farming and excavation. This settlement requires the defendants to honor a schedule of pipeline inspections on the ground and from the air, and reach out to local agencies, contractors and excavators to make sure they are more fully aware of pipeline locations and depths.”
“This settlement requires proactive vigilance to ensure that our soil and waterways are protected from contaminants,” said Deborah R. Gilg, U.S. Attorney for the District of Nebraska. “The agreement will result in safer pipeline operations and that will be good for Nebraska’s environment.”
In addition to the proactive inspections and outreach efforts, the settlement also requires MAPCO and Enterprise to spend $200,000 to relocate, cover, lower or replace pipeline segments; install new remote shutoff valves; install new physical protections such as fences or concrete barriers; and install other new equipment, structures or systems to prevent spills from reaching navigable waters.
The consent decree is subject to a 30-day public comment period and court approval. A copy of the consent decree is available on the Department of Justice web site at www.justice.gov/enrd/Consent_Decrees.html.
Learn more about EPA’s enforcement of the Clean Water Act:
www.epa.gov/compliance/civil/cwa/cwaenfstatreq.html.
Justice Department Announces Agreement to Protect Rights of Military and Overseas Voters in CaliforniaRead the Press Release
WASHINGTON – The Justice Department announced today that it has reached an agreement with California state officials to help ensure that military servicemembers, their family members and U.S. citizens living overseas have the opportunity to participate fully in California’s June 5, 2012, federal primary election.
The agreement was filed at the same time as a lawsuit brought under the Uniformed and Overseas Citizens Absentee Voting Act (UOCAVA). The Justice Department filed suit in response to the state’s failure to send absentee ballots to thousands of California’s eligible military and overseas voters for the June 5, 2012, federal primary election at least 45 days prior to the election, as required by UOCAVA. The complaint also alleges that the state failed to ensure that ballots were sent by the voters’ preferred method of transmission (by mail or electronically), as required by federal law.The agreement between the Justice Department and the California Secretary of State provides remedial options to afford affected military and overseas voters sufficient opportunity to receive, cast and return their ballots in time to be counted. Under the agreement, affected voters will be notified of their options to receive and return their ballots by electronic or other expedited methods, and they will be offered the option of returning their ballots by express delivery at no cost to the voter. The agreement recognizes the steps some counties already took to utilize express delivery for ballots that were not sent at least 45 days prior to the election.
“Members of our armed forces, their families and overseas citizens are entitled to a complete and meaningful opportunity to vote, and the Justice Department is committed to seeking full access to the ballot box for all voters – regardless of where they are on Election Day,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The California Secretary of State worked cooperatively with the department and agreed to implement measures that will ensure California’s military and overseas voters will have the opportunity to fully participate in June’s primary election and future federal elections.”
“Our fine men and women in uniform make tremendous sacrifices serving our nation every day,” said Benjamin B. Wagner, U.S. Attorney for the Eastern District of California. “This agreement ensures that military voters, as well as U.S. citizens who are overseas, need not sacrifice their right to vote.”
UOCAVA requires states to allow uniformed service voters (serving both overseas and within the United States) and their families and overseas citizens to register to vote and to vote absentee for all elections for federal office. In 2009, Congress enacted the Military and Overseas Voter Empowerment (MOVE) Act, which made broad amendments to UOCAVA. Among those changes was a requirement that states must transmit absentee ballots to voters covered under UOCAVA, by mail or electronically at the voter’s option, no later than 45 days before federal elections.
The agreement, which must be approved by the U.S. District Court in Sacramento, Calif., also commits the California Secretary of State to closely monitor and certify California counties’ transmission of UOCAVA ballots, conduct training of county election officials before the 2012 general election, provide assistance to its counties when necessary, and report back to the United States about its UOCAVA compliance for the 2012 federal general election and the 2014 federal election cycle. In addition, the agreement requires the California Secretary of State to take additional steps to ensure full compliance with UOCAVA in future federal elections, including investigating the cause of the late mailed ballots and then taking the actions necessary to prevent future violations. The California Secretary of State must provide status reports to the Department of Justice on those efforts.
More information about UOCAVA and other federal voting laws is available on the Department of Justice website at www.justice.gov/crt/about/vot/misc/activ_uoc.php. Complaints may be reported to the Voting Section of the Justice Department’s Civil Rights Division at 1-800-253-3931.Related Materials:
Consent Decree (PDF)
Complaint (PDF)Former Head of Worldwide Sales at California Valve <br /> Company Pleads Guilty to Foreign Bribery OffenseRead the Press Release
WASHINGTON – Paul Cosgrove, the former Head of Worldwide Sales at Rancho Santa Margarita, Calif.-based valve company Control Components Inc. (CCI) pleaded guilty today to violating the Foreign Corrupt Practices Act (FCPA), announced the Justice Department’s Criminal Division and the U.S. Attorney’s Office for the Central District of California.
Cosgrove, who resides in Laguna Niguel, Calif., pleaded guilty today before U.S. District Judge James V. Selna in Santa Ana, Calif., to a one-count superseding information charging him with making a corrupt payment to a foreign government official in China in violation of the FCPA. According to court documents, CCI designed and manufactured service control valves for use in the nuclear, oil and gas, and power generation industries worldwide. At sentencing, Cosgrove, 65, faces up to 15 months in prison. Sentencing is scheduled for Aug. 27, 2012.
On Apr. 8, 2009, Cosgrove and five other former executives of CCI were charged in a 16-count indictment for their roles in the foreign bribery scheme. The five other former CCI executives charged were Stuart Carson, CCI’s former president; Hong “Rose” Carson, CCI’s former director of sales for China and Taiwan; David Edmonds, CCI’s former vice president of worldwide customer service; Flavio Ricotti, the former CCI vice president of sales for Europe, Africa and the Middle East; and Han Yong Kim, the former president of CCI’s Korean office. On Apr. 28, 2011, Ricotti pleaded guilty to one count of conspiracy to violate the FCPA. On Apr. 17, 2012, Stuart Carson and Hong “Rose” Carson each pleaded guilty to one count of making a corrupt payment to a foreign government official in violation of the FCPA. The trial of Edmonds is scheduled for Jun. 26, 2012. The charges against Kim are pending. An indictment merely contains allegations and defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
In related cases, two defendants previously pleaded guilty to conspiring to bribe officers and employees of foreign state-owned companies on behalf of CCI. On Jan. 8, 2009, Mario Covino, the former director of worldwide factory sales for CCI, pleaded guilty to one count of conspiracy to violate the FCPA. On Feb. 3, 2009, Richard Morlok, the former CCI finance director, also pleaded guilty to one count of conspiracy to violate the FCPA. Stuart and Rose Carson, Covino, Morlok and Ricotti are scheduled to be sentenced later this year.
On July 31, 2009, CCI pleaded guilty to a three-count criminal information charging the company with conspiracy to violate the FCPA and the Travel Act, and two substantive violations of the FCPA. CCI was ordered to pay an $18.2 million criminal fine, placed on organizational probation for three years, and ordered to create and implement a compliance program and retain an independent compliance monitor for three years. CCI admitted that from 2003 through 2007, it made corrupt payments in more than 30 countries, which resulted in net profits to the company of approximately $46.5 million from sales related to those corrupt payments.
The case is being prosecuted by Deputy Chief Charles G. La Bella and Trial Attorney Andrew Gentin of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Douglas McCormick and Gregory Staples of the U.S. Attorney’s Office for the Central District of California. The case was investigated by the FBI’s Washington Field Office and its team of special agents dedicated to the investigation of foreign bribery cases.
Friday 25 May 2012
Miami Man Convicted for Obstruction of Justice and False Statements for Certifying Ships Safe for SeaRead the Press Release
WASHINGTON – A federal jury in Miami yesterday convicted a Miami-based ship surveyor for lying to the Coast Guard and for falsely certifying the safety of ships at sea, announced Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division at the Department of Justice; Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida; Rear Admiral William D. Baumgartner, Commander, 7th Coast Guard District; and Jonathan Sall, Special Agent in Charge, U.S. Coast Guard Investigative Service.
Alejandro Gonzalez, 60, of Miami-Dade County, Fla., was convicted by a federal jury in Miami of three counts of making false statements to the U.S. Coast Guard and one count of obstruction of an agency proceeding. The defendant faces a maximum statutory penalty of five years in prison on each count.
The jury found Gonzalez guilty of lying to U.S. Coast Guard inspectors and a criminal investigator during an interview in April 2009 about the dry-docking of the M/V Cala Galdana, a 68-meter cargo vessel, in San Juan, Puerto Rico. Gonzalez repeatedly claimed the vessel was dry-docked in Cartagena, Colombia, in March 2006, while evidence at the trial proved conclusively that the vessel was never in Colombia during 2006.
U.S. Coast Guard inspectors in San Juan discovered the vessel taking on water in August 2008 and requested information concerning the last dry-docking of the vessel. Gonzalez concocted a false story about the vessel being dry-docked in Colombia in 2006 when he knew it was not.
Gonzales was also convicted of falsifying documents in December 2009 for the M/V Cosette, a 92-meter cargo vessel. As the surveyor on behalf of Bolivia, Gonzalez certified the ship as safe for sea while the vessel was docked in Fort Pierce, Fla., in November 2009. When the vessel shortly thereafter arrived in New York City harbor, U.S. Coast Guard inspectors discovered exhaust and fuel pouring into the ship’s engine room, endangering the crew and the ship. For his action, Gonzalez was convicted of making a false statement and obstructing a U.S. Coast Guard Port State Control examination.
Assistant Attorney General Moreno and U.S. Attorney Ferrer commended the investigative efforts of the U.S. Coast Guard and the U.S. Coast Guard Investigative Services. The prosecution was handled by Assistant U.S. Attorney Jaime Raich and Trial Attorney Kenneth Nelson, of the Environmental Crimes Section of the Justice Department’s Environment and Natural Resources Division.
Sentencing is currently scheduled for Aug. 2, 2012, in Miami.
Justice Department to Monitor Elections in TexasRead the Press Release
The Justice Department announced today that it will monitor primary elections on May 29, 2012, in Fort Bend, Harris and Jefferson Counties in Texas, to ensure compliance with the Voting Rights Act of 1965 and other federal voting rights statutes. 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.
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 Fort Bend and Jefferson Counties based on the attorney general’s certification. In addition, Fort Bend is subject to a court order entered in 2009, which requires the jurisdiction to comply with the minority language and assistor of choice requirements of the Voting Rights Act, as well as the requirements of the Help America Vote Act. The observers will watch and record activities during voting hours at polling locations in these counties, 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 Harris 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.
Thursday 24 May 2012
U.S. Court Rules That Nation’s Auto Dealers Are Requiredto Provide Complete Data on Car Loan TermsRead the Press Release
WASHINGTON - A federal judge in Washington has ruled that automobile dealers who engage in certain three-party financing transactions must disclose certain information to consumers who take out car loans if they are offered less favorable terms, such as a higher interest rate, than the most favorable terms available to the majority of consumers. When a lender relies on a credit report in setting an unfavorable interest rate, a provision of the Fair Credit Reporting Act requires lenders to provide notice to the consumer and provide instructions on how the consumers can obtain a copy of their credit history report and, if necessary, dispute and correct any false or incomplete data. One of the purposes of the statute is to provide consumers with information that might be helpful in preventing identity theft.
Judge Ellen Huvelle upheld the Federal Trade Commission’s (FTC) determination that auto dealers must comply with this provision even when they engage in “three-party” financing transactions, in which the dealer agrees to extend financing to a consumer and then immediately assigns the loan to a third party, such as a bank or finance company.
In the FTC rulemaking proceeding, the National Automobile Dealers Association (NADA) argued that auto dealers engaging in these transactions should be exempt from providing this notice. NADA argued that, when only this third party, and not the car dealer, actually obtains the credit report, then the car dealer should be exempt from providing any disclosures to the consumers. The FTC rejected this argument and concluded that the auto dealers actually use the credit report even if they do not physically obtain it, and so must provide the notice to consumers. NADA sued the FTC, challenging this interpretation. The court agreed with the FTC’s position in its ruling.
“This ruling will make it easier for consumers to learn about unfavorable information in their credit reports. Not only will this give them an opportunity to correct any inaccuracies, but it also provides a key tool needed to combat identity theft or fraud,” said Stuart Delery, Acting Assistant Attorney General for the Civil Division. “The auto dealer is in the best position to provide this information because the dealer interacts directly with the consumer and establishes the credit terms in the agreement that it enters with the consumer.”
Under NADA’s interpretation, the consumer would never receive this disclosure – not from the dealer nor from the third-party finance company. In addition, all entities that extend credit to consumers could enter similar arrangements and thereby exempt themselves from giving consumers any disclosures relating to adverse information in consumer reports.
The Federal Trade Commission was represented in the case by Drake Cutini of the Consumer Protection Branch of the Justice Department’s Civil Division.
Residential Mortgage-Backed Securities (RMBS) Working Group Announces New Resources to Investigate RMBS MisconductRead the Press Release
WASHINGTON – The Residential Mortgage-Backed Securities (RMBS) Working Group announced new resources today in the ongoing effort to investigate misconduct, including the launch of a RMBS website to report fraud and the creation of a coordination team to facilitate the various investigations underway around the country.
The RMBS Working Group is a collaborative effort led by five co-chairs including Assistant Attorney General for the Criminal Division Lanny Breuer, Acting Assistant Attorney General for the Civil Division Stuart Delery, U.S. Attorney for the District of Colorado John Walsh, Director of Enforcement for the U.S. Securities and Exchange Commission (SEC) Robert Khuzami, and New York State Attorney General Eric Schneiderman. The working group and its members are focused on investigating potential false or misleading statements, deception or other misconduct by market participants in the creation, packaging and sale of mortgage-backed securities. While the working group and its members’ specific efforts are law enforcement sensitive and, therefore, must remain confidential, generally the working group continues to: identify specific RMBS offerings for priority investigation through the use of various forensic tools including risk-based analytics; analyze pending private RMBS litigation throughout the country for important evidentiary connections to existing law enforcement investigations; and convene operational meetings among investigators, attorneys, analysts and RMBS market experts and insiders.
"The RMBS website is a new call to those insiders who know about fraud that occurred in the RMBS market, who know it's time to expose that fraud, and who want to help us hold accountable those individuals and institutions who broke the law in pursuit of bigger paydays," said Acting Associate Attorney General Tony West. "Although the working group and its members have done a tremendous amount of investigative work already – including having issued more than 25 civil subpoenas – we know that hearing from insiders is particularly valuable. There are scores of people who worked in the RMBS market who acted responsibly but who also may have witnessed greed and misconduct that crossed the legal line and created havoc for investors, homeowners and our economy. We want to hear from them."
Acting Associate Attorney General West also noted that whistleblowers enjoy legal rights that protect their ability to speak out without the fear of retaliation. "When whistleblowers summon the courage to come to us, we will do everything we can to maintain their confidence and trust," he said.
Each co-chair agency brings investigative resources and existing RMBS investigations to the working group. To facilitate communication and coordination among the various agencies conducting RMBS investigations nationwide, the five co-chairs and the Task Force’s Executive Director have appointed a coordinating team. Matthew Stegman, a career white-collar prosecutor, is the RMBS Working Group’s Coordinator. In addition to the selection of Mr. Stegman, the coordinating team in Washington includes criminal prosecutors and civil attorneys, analysts and FBI investigators who are coordinating federal and state fraud investigations nationwide.
"The working group's approach to RMBS investigations is systematic and smart – cross-agency teams comprised of experienced prosecutors and investigators utilizing market experts and risk-based criteria to triage transactions for review, and bringing to bear the entire palette range of state and federal legal theories and remedies," said RMBS Working Group Co-Chair Robert Khuzami, Director of the SEC’s Division of Enforcement. “The numbers reveal the working group effort and commitment; the SEC alone brings to the effort more than 40 SEC staff from eight SEC offices trained in securitized products. The SEC teams bring substantial ongoing investigatory work to the effort as well. Since 2010, the SEC has issued over 300 subpoenas or document requests resulting in more than 30 million pages of documents with interviews or sworn testimony taken from over 180 witnesses, all focused on whether firms failed to disclose important information when selling RMBS securities.”
A broad coalition of state and federal officials have dedicated lawyers, investigators, analysts and staff – currently over 100 strong – actively engaged in RMBS investigatory work at the Department of Justice, the U.S. Attorneys’ Offices, the SEC, the New York State Attorney General’s Office, U.S. Department of Housing and Urban Development, U.S. Department of Housing and Urban Development’s Office of Inspector General, FBI, and Federal Housing Finance Agency’s Office of Inspector General, as a result of these focused efforts. Investigating and bringing complex white collar civil and criminal cases can be a time-consuming and challenging process, but the resources, enthusiasm and organization brought by the members of the RMBS Working Group have already resulted in substantial strides toward that goal.
“Over the last 100 days United States Attorneys across the country have responded enthusiastically to the call to address this important enforcement initiative,” said RMBS Working Group Co-Chair John Walsh, U.S. Attorney for the District of Colorado. “Dozens of Assistant U.S. Attorneys and other staff are actively engaged and we expect that the energy and resources for this effort will continue to grow.”
The working group will hold a two-day meeting at the Washington, D.C., headquarters of the SEC from May 31 to June 1, 2012. The group is expecting more than 180 attorneys, agents, investigators and analysts from working group member agencies and offices around the country to attend the event, both in person as well as by video at several SEC regional offices. This will be the third time the full working group has met, though the co-chairs and Executive Director of the Task Force have held formal weekly conference calls and have had more informal discussions on an almost-daily basis. The two-day event will be an opportunity for prosecutors, civil attorneys, regulators, state attorneys general, law enforcement agencies and true experts in the field to discuss and learn from ongoing investigations, identify new potential targets and successful legal theories, and coordinate strategies.
To report RMBS fraud, go to: http://www.stopfraud.gov/rmbs.html
About the RMBS Working Group:
The Residential Mortgage-Backed Securities (RMBS) Working Group of the Financial Fraud Enforcement Task Force was established by the Attorney General in late January 2012. The working group has been dedicated over the past 3 months to initiating, organizing, and advancing new and existing investigations by federal and state authorities into fraud and abuse in the RMBS market that helped precipitate the 2008 financial crisis. The RMBS Working Group is part of the Financial Fraud Enforcement Task Force (FFETF). The Executive Director of the Financial Fraud Enforcement Task Force is Michael J. Bresnick.
Justice Department Settles with Louisiana School District to Ensure Equal Opportunities for All StudentsRead the Press Release
The Department of Justice announced today that it entered into a settlement agreement with the Lincoln Parish School Board in Louisiana to ensure the school district reaches full compliance with its longstanding desegregation obligations. The agreement was approved by a judge today and is in the form of a consent order.
Under the agreement, the board will adopt a pairing plan for the four elementary schools currently serving grades K-5 in the Ruston attendance zone. The department had found significant racial disparities in the student demographics at three of those four schools. The pairing plan, which will be implemented by the start of the 2012-2013 school year, will create two schools serving grades K-2 and two schools serving grades 3-5. The board has also agreed to revise its student transfer policies. Once these measures are implemented, the racial disparities in the Ruston schools will be eliminated and the student bodies at every school in the district will be fully desegregated.
The consent order, if approved, will also dismiss the desegregation case in the areas of faculty and staff assignment, facilities, transportation and extracurricular activities. The department has determined that the board fully and successfully complied with its desegregation obligations in those areas. The board may seek dismissal of the student assignment issue in late 2013 upon successful implementation of the terms of the agreement. The department, board and other defendants are continuing to work to address other issues in the desegregation case, which was originally filed by the United States in 1966.
“The Lincoln Parish School Board is to be commended for taking aggressive steps to address and effectively resolve the remaining issues in this desegregation case,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The Civil Rights Division looks forward to continuing to work cooperatively with the board to implement this agreement and ensure all Lincoln Parish students have equal educational opportunities.”
The enforcement of the Equal Protection Clause and Title IV in school districts is a top priority of the Justice Department’s Civil Rights Division. Additional information about the Civil Rights Division of the Justice Department is available on its website at www.justice.gov/crt.
Justice Department Issues Further Guidance on Accessibility Requirements for Existing Swimming Pools at Hotels and Other Public AccommodationsRead the Press Release
The Justice Department released two technical assistance documents today regarding the application of the Americans with Disabilities Act (ADA) to swimming pools. The documents can be found at www.ada.gov//qa_existingpools_titleIII.htm and www.ada.gov/pools_2010.htm.
Many people with disabilities could benefit from the social, recreational and exercise benefits of swimming. However, until September 2010, there were no accessibility standards for swimming pools under the ADA. In September 2010, the department issued a regulation providing accessibility requirements for swimming pools. The rules were originally set to become effective on March 15, 2012. Newly constructed and altered pools must be fully accessible to people with disabilities as of March 15, 2012, by providing pool lifts, sloped entries, or other specified accessibility features. However, many pool owners had misunderstandings about how to apply the new accessibility requirements to pre-existing pools. Therefore, the department has extended the compliance date for existing pools to Jan. 31, 2013.
In its continuing effort to be responsive to both pool owners and the disability community, the department has now issued a technical assistance document addressing 19 common questions about accessibility requirements for existing pools. The document emphasizes the application of the requirement that pool owners remove accessibility barriers to the extent it is readily achievable to do so. The document explains, “Readily achievable means that it is easily accomplishable without much difficulty or expense. This is a flexible, case-by-case analysis, with the goal of ensuring that ADA requirements are not unduly burdensome, including to small businesses.”
Recognizing that some pool owners who attempted to comply with the rule before the original compliance date mistakenly believed that portable lifts were generally acceptable, the department also provides that it will not enforce the fixed elements of the 2010 standards against those owners of existing pools who purchased otherwise-compliant portable lifts prior to March 15, 2012, as long as those owners keep the lifts in position for use at the pool and operational during all times that the pool is open to guests.
Significant tax credits and deductions are available to help businesses of all sizes offset any costs of ADA compliance. The department is committed to providing technical assistance and education to ensure that covered entities and people with disabilities understand their rights and responsibilities under the ADA. The department has offered two live webinars on pool accessibility. Additional information about the ADA’s requirements, including the 2010 ADA standards, is available on the department’s ADA website at www.ada.gov. ADA specialists are also available on the ADA Information Line at 800-514-0301 (voice); 800-514-0383 (TTY). Specialists are available Monday through Friday from 9:30 a.m. until 5:30 p.m. EDT, except on Thursday, when the hours are 12:30 p.m. until 5:30 p.m.
California Woman Indicted for Allegedly Impersonating a Congressional AideRead the Press Release
WASHINGTON – An Atwater, Calif., woman was charged today in a one-count indictment filed in the Eastern District of California for impersonation of an officer or an employee of the United States, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division.
The indictment charges Susan Tomsha-Miguel, 51. An initial appearance and arraignment are scheduled for tomorrow at 9:00 a.m. before Magistrate Judge Dennis L. Beck.
According to the indictment, Tomsha-Miguel operated a tax consulting and bookkeeping business in Atwater. A client, who owned a commercial business in Merced, Calif., hired Tomsha-Miguel to resolve a tax dispute with the Internal Revenue Service (IRS). Tomsha-Miguel requested help with the tax problems from the office of U.S. Representative Dennis A. Cardoza, who represents the 18th Congressional District, which includes Merced County, as well as parts of San Joaquin, Stanislaus, Madera and Fresno Counties. According to the indictment, Representative Cardoza’s office agreed to help, and transmitted written material, including a form printed under his official Congressional letterhead, to Tomsha-Miguel. Some time thereafter, Tomsha-Miguel allegedly sent her client a counterfeit letter supposedly written under Representative Cardoza’s official letterhead and purportedly written and signed by an aide to Representative Cardoza. The letter falsely claimed that due to Tomsha-Miguel’s efforts on behalf of her client, Representative Cardoza’s aide had contacted an IRS official. The counterfeit letter claimed that the IRS official had agreed to make resolving the client’s tax dispute his “number one priority” after he returned from “Washington, D.C. for an emergency strategy meeting with the U.S. Treasury Secretary and others for a planning session in the event a budget does not get passed by both the House and Senate.” The indictment alleges that, in reality, the aide did not exist and Tomsha-Miguel had forged the letterhead by copying-and-pasting Representative Cardoza’s official letterhead onto a blank sheet of paper. The indictment further alleges that Tomsha-Miguel had written the letter from the non-existent aide herself and then sent it to her client in order to mislead her client into believing that she had succeeded in alleviating his tax problems.
Tomsha-Miguel faces a maximum sentence of three years in prison, a fine of $250,000, and supervised release.
An indictment is merely a charge, and a defendant is presumed innocent unless and until proven guilty.
The case is being prosecuted by Trial Attorney Barak Cohen of the Public Integrity Section in the Justice Department’s Criminal Division. The case is being investigated by the FBI.
Wednesday 23 May 2012
Statement of the Attorney General on Resignation of <br /> U.S. Attorney for the Northern District of Illinois <br /> Patrick FitzgeraldRead the Press Release
Attorney General Eric Holder issued the following statement today on the resignation of U.S. Attorney for the Northern District of Illinois Patrick Fitzgerald:
“Throughout his distinguished career as a prosecutor, United States Attorney Patrick Fitzgerald has served the American people and the citizens of Illinois with the utmost integrity and a steadfast commitment to the cause of justice.
“From his early consequential years in New York City confronting the terrorist threat to his strong leadership of the U.S. Attorney’s Office for the Northern District of Illinois, Pat has rightly earned a reputation over these last 24 years as a prosecutor’s prosecutor, overseeing significant cases involving public corruption, international terrorism and terrorism financing, corporate fraud, organized crime, and violent crime.
“A hallmark of Pat’s tenure has been his personal commitment to the Department’s mission and his willingness to accept the call of duty – whenever it came and whatever it required. In 2003, he was appointed as special counsel in the investigation into the disclosure of the identity of a covert employee of the Central Intelligence Agency that resulted in the indictment of I. Lewis “Scooter” Libby, then chief of staff and national security advisor to the Vice President. He also served as lead counsel in the trial, which resulted in Mr. Libby’s conviction on charges of perjury and obstruction of justice. In 2010, I appointed Pat as Special Attorney to supervise the investigation that resulted in the pending indictment, in the Eastern District of Virginia, of former CIA officer John Kiriakou for allegedly repeatedly disclosing classified information, including the name of a covert CIA officer and information revealing the role of another CIA employee in classified activities.
“Over the years, he has gained the trust of two presidents and the unwavering confidence of four Attorneys General, and I am deeply grateful to him for his service and his friendship over the years.”
Justice Department Recognizes Efforts to Rescue Children from Abuse and Prosecute PredatorsRead the Press Release
Deputy Attorney General James M. Cole paid tribute to four individuals today during the National Missing Children’s Day ceremony at the Justice Department’s Great Hall. Deputy Attorney General Cole presented awards to a special agent, a detective, a 30-year veteran of the postal service and a prosecutor for their extraordinary efforts to recover missing children, rescue children from abuse and prosecute sexual predators. This annual ceremony honors missing children, their families, child advocates and those dedicated to the well-being and safety of children.
“Protecting children is one of the important jobs we have,” said Deputy Attorney General Cole. “There is no rest for a parent who has lost a child, and there should be no rest for any of us who are in a position to help. There may not be any words we could offer that would ease their pain, but we can and will offer our support – and all the tools at our disposal to help families of missing and exploited children. I am honored to recognize those who work on the front lines to rescue children and bring them home safely.”
Melodee Hanes, Acting Administrator of the Office of Juvenile Justice and Delinquency Prevention, announced the release of AMBER Alert Best Practices a guide to enhance the ability of law enforcement, broadcasters and child protection officials to safely recover missing and abducted children. The guide details effective practices for training law enforcement, activating and broadcasting an AMBER Alert, disseminating information to the public and approaching family members of an abducted child. Acting Administrator Hanes also announced the release of two publications translated into Spanish:
· No estás solo: El camino del secuestro al empoderamiento You're Not Alone: The Journey From Abduction to Empowerment presenting the stories of child abduction survivors and how their lives changed after their traumatic experiences; and
· ¿Y yo? Cómo sobrellevar el secuestro de un hermano o una hermana What About Me? Coping with the Abduction of a Brother or Sister offering insight from siblings of abducted children.
Deputy Attorney General Cole and Acting Assistant Attorney General for the Office of Justice Programs Mary Lou Leary highlighted a number of Justice Department programs to protect children, such as Project Safe Childhood , the Internet Crimes Against Children Task Force Program, the National Center for Missing & Exploited Children and the AMBER Alert Program, which has led to the successful recovery of 584 abducted children since its creation in 1996.
Other speakers included Yvonne Pointer, the mother of an abducted and murdered daughter and an international educator on child abduction and youth violence, and Ernie Allen, President and CEO of the National Center for Missing & Exploited Children. Guests included families of missing children, child advocates and federal, state, local and tribal agency representatives who support programs to recover missing children.
During the ceremony, Deputy Attorney General Cole presented the following awards:
Attorney General’s Special Commendation: Recognizes the extraordinary efforts of an Internet Crimes Against Children (ICAC) task force, an ICAC affiliate agency, or an individual assigned to an ICAC task force or affiliate agency for making significant investigative or program contributions to the ICAC program.
Recipient: Special agent Tim Erickson, North Dakota Bureau of Criminal Investigation, whose investigation of a school technology administrator on child pornography charges resulted in the rescue of eight children from physical and sexual abuse and the arrest six individuals in five states and Canada on charges of sexual abuse and child pornography production.
Missing Children’s Law Enforcement Award: Recognizes the extraordinary efforts of a law enforcement officer who made a significant investigative or program contribution to the safety of children.
Recipient: Detective Randall Abbott, Hartford, Wis., Police Department, whose five-year investigation of a child neglect case led to multiple convictions and the safe recovery of an endangered girl.
Missing Children’s Citizen Award: Honors the extraordinary efforts of private citizens for their unselfish acts to safely recover missing or abducted children.
Recipient: H. Keith Ray, Letter Carrier, U.S. Postal Service, Oakville , Mo., who participated in a search in his community and found a missing child.
Missing Children’s Child Protection Award: Honorsthe extraordinary efforts of a law enforcement officer who made a significant investigative or program contribution to protect children from abuse or victimization.
Recipient Florida Assistant State Attorney Greg Schiller, Palm Beach County Sexual Predator Enforcement Unit, who secured a 25-year prison sentence for a sexual predator and worked to change Florida law to make intentional viewing of child pornography a crime.
Missing Children’s Art Contest Award:
Recipient: Elisa Martinez, a fifth-grader from Walter V. Long Elementary School in Las Vegas, who was selected as the 13th Annual National Missing Children’s Day Art Contest winner.
President Ronald Reagan proclaimed May 25, 1983, the first National Missing Children’s Day to remember Etan Patz, a six-year-old boy who disappeared from a New York City street corner on May 25, 1979. Missing Children’s Day honors his memory and the memories of children still missing.
Investment Club Manager Sentenced in Virginia to 12 Years in Prison for $40 Million FraudRead the Press Release
WASHINGTON – Alan James Watson, 47, of Clinton Township, Mich., was sentenced today to 12 years in prison for fraudulently soliciting and accepting $40 million from more than 900 members of his investment club, Cash Flow Financial LLC (CFF). Watson subsequently lost nearly all of the investors’ money through non-disclosed, high-risk investments. Victims were located in Virginia and nationwide. Watson was also ordered to forfeit $36,615,344.
U.S. District Judge Gerald Bruce Lee in the Eastern District of Virginia also sentenced Watson to three years of supervised release. Watson pleaded guilty to one count of wire fraud on Sept. 22, 2011.
The sentencing was announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney for the Eastern District of Virginia Neil H. MacBride; James W. McJunkin, Assistant Director in Charge of the FBI’s Washington Field Office; and Postal Inspector in Charge of Criminal Investigations Gerald O’Farrell of the U.S. Postal Inspection Service (USPIS).“Mr. Watson deceived members of his investment club from early on and drove his scheme deeper and deeper while investors remained none the wiser,” said Assistant Attorney General Breuer. “His lies destroyed lives, and today’s sentence ensures he will pay for his destructive actions. The 12-year prison sentence handed down today is a signal to fraudsters that criminal deception born from greed will not be tolerated.”
“The pitch Mr. Watson made to investors was a big fat lie, and he kept lying until his scheme collapsed and investors lost nearly everything,” said U.S. Attorney MacBride. “Based on these lies, investors recommended Mr. Watson’s club to their friends and family, and the damage to these relationships was just as harmful as the financial devastation itself.”
“More than 900 unwitting victims thought they had done their homework and calculated their investment wisely; instead, they were met with false documentation that yielded no return on their investment,” said FBI Assistant Director in Charge McJunkin. “Investigating white collar crime has been and will continue to be a priority for the FBI and our law enforcement partners, as demonstrated by this case and today’s sentence.”
According to court documents, Watson created CFF in 2004 and served as the club’s chief executive officer. From 2006 to 2009, Watson received almost $40 million from investors. Watson purported that the money would be invested through an equities-trading system developed by an expert consultant, Trade LLC, with a promised return on investment of 10 percent per month. In reality, Watson admitted that only $6 million of the $40 million was ever invested in Trade LLC, while the remaining $34 million was secretly invested in miscellaneous, high-risk ventures without the consent of investment club members. These high-risk investments resulted in a near complete loss of the $34 million.
According to court documents, despite the losses for the investors, Watson continued to create false monthly account statements showing net gains from their investments. In addition, Watson included “bonus” items on the account statements that appeared as trading profits, the result of a Ponzi scheme he orchestrated to use new investor funds to pay off earlier investors.
In March of 2009, Watson ceased investing in Trade LLC and re-deposited those funds in separate unauthorized ventures. In 2010, nearly a year after he had fully withdrawn finances from Trade LLC, Watson informed investment club members that he had not invested their money as promised, and that none of the reported returns had ever materialized. This resulted in a combined $40 million loss for investment club members.
The Commodity Futures Trading Commission (CFTC) has filed a related civil case in the Eastern District of Michigan.
This case was investigated by the FBI’s Washington Field Office, USPIS, the CFTC and the U.S. Securities and Exchange Commission. The department thanks these agencies for their substantial assistance in this matter.
Trial Attorney Kevin B. Muhlendorf of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Mark D. Lytle of the Eastern District of Virginia are prosecuting the case on behalf of the United States.
The investigation has been coordinated by the Virginia Financial and Securities Fraud Task Force, an unprecedented partnership between criminal investigators and civil regulators to investigate and prosecute complex financial fraud cases in the nation and in Virginia. The task force is an investigative arm of the President’s Financial Fraud Enforcement Task Force, an interagency national 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.
Georgia Tax Cheats Indicted for Conspiring to Defraud the United StatesRead the Press Release
Tyrone Devon Thompson, Aritha Currie, Julius Thompson, Tronda Thompson and Shonda Sneed were charged in an indictment by a federal grand jury in the Middle District of Georgia on a variety of counts stemming from a tax fraud scheme, the Justice Department and the Internal Revenue Service (IRS) announced today. The 22-count indictment charges all five with conspiring to defraud the United States and filing false claims against the United States. The indictment, which was returned on May 11, 2012, was unsealed following the defendants’ arrests.
According to the indictment, all of the defendants conspired together to file false federal income tax returns that sought fraudulent refunds. The defendants directed the IRS to directly deposit the false refunds into the bank accounts of the defendants. The bank accounts received at least $280,000 in false tax refunds.
An indictment merely alleges that crimes have been committed, and the defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted, all the defendants face a maximum potential sentence of five years in prison for the conspiracy charge and three years for each false claim count. All the defendants are also subject to fines and mandatory restitution if convicted.
Assistant Attorney General Kathryn Keneally of the Justice Department’s Tax Division commended the efforts of Special Agents of IRS - Criminal Investigation, who investigated the case, and Tax Division Trial Attorneys Charles Edgar and Justin Gelfand, who are prosecuting the case.
Final Defendant Sentenced for His Role in International Conspiracy Involving the Forced Labor of Eastern European Women in Detroit-area Exotic Dance ClubsRead the Press Release
Veniamin Gonikman, 56, a naturalized U.S. citizen originally from Ukraine, was sentenced today in federal court for his role in an international conspiracy to compel Eastern European women to work in exotic dance clubs in the Detroit metropolitan area. U.S. District Court Judge Victoria A. Roberts sentenced Gonikman to 36 months in prison followed by 3 years of supervised release. He is the ninth and final member of the charged conspiracy to be sentenced.
Gonikman became a fugitive in 2005 following the arrests of his co-conspirators, Aleksandr Maksimenko and Michael Aronov. He was apprehended in Ukraine in January 2011 and pleaded guilty to money laundering on Sept. 13, 2011. According to information presented in court filings, between September 2001 and February 2005, Gonikman, together with Maksimenko and Aronov, operated Beauty Search Inc., a business that brokered and managed Eastern European women who performed in exotic dance clubs in the Detroit area. The three men recruited a number of these women in Ukraine, facilitated their illegal entry into the United States, and then harbored them for commercial advantage and private financial gain. Gonikman obtained a share of the proceeds earned by the women and transferred the money to Ukraine in order to promote and carry on the Beauty Search business.
“Human trafficking is the equivalent of modern day slavery. It deprives the victims of their freedom and dignity and it has no place in our country,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The Justice Department is committed to the aggressive prosecution of those who rob individuals of their freedom.”
“This sentence brings the final member of this human trafficking ring to justice,” Barbara McQuade, U.S. Attorney for the Eastern District of Michigan. “These defendants treated human beings like a commodity, enticing Eastern European women to come to the United States illegally and then exploiting them for commercial advantage.”
"The defendants in this case preyed on young and vulnerable women from a foreign country. These women were brought to America with promises of education and travel, and instead forced to work in seedy strip clubs,” said Brian M. Moskowitz, Special Agent in Charge of Immigration and Customs Enforcement Homeland Security Investigations ( ICE-HSI) in Detroit. "After more than seven years of unyielding resolve on the part of our special agents and prosecutors, we are able to formally end this horrific chapter in the lives of the victims and allow them to now move on knowing that justice has prevailed."
“Justice has been served knowing that Gonikman, Maksimenko and Aronov are behind bars for their reprehensible behaviors,” said Erick Martinez, Special Agent in Charge of Internal Revenue Service Criminal Investigation. “These individuals took advantage of someone’s daughter, sister or granddaughter. The joint work and dedication of the law enforcement community shows that these crimes will not be tolerated.”
“This sentencing comes as the result of the hard work of the FBI and law enforcement partner agencies as well as federal prosecutors,” said FBI Special Agent in Charge Andrew G. Arena. “It sends the message that anyone who seeks to profit from human trafficking will be pursued and prosecuted vigorously. These despicable acts designed to enslave women have no place in our society.”
The lead defendants in this case, Maksimenko and Aronov, pleaded guilty in 2006 to forced labor, immigration, and money laundering charges. Maksimenko was sentenced to 14 years in prison and ordered to pay $1,570,450 in restitution to the victims. Aronov was sentenced to seven-and-a-half years in prison and ordered to pay $1 million in restitution.
Six other defendants were also convicted in 2006 for their respective roles in the conspiracy, including: Duay Jado, a Greek national, who was sentenced to four years in prison for setting a victim’s car on fire to retaliate for her escape and to intimidate the other victims; two Ukrainian nationals, Eygeniy Propenko and Alexander Bondarenko, who were convicted of visa fraud to facilitate victims’ illegal entry into the United States; and Anna Gonikman-Starchenko, a Ukrainian national formerly married to Gonikman, Niki Papoutsaki, a Greek national formerly married to Aleksandr Maksimenko, and Valentina Maksimenko, a naturalized U.S. citizen also formerly married to Veniamin Gonikman, all three of whom pleaded guilty to obstruction-related charges.
The case was investigated by ICE, the FBI, the IRS and the State Department. The case was prosecuted by Assistant U.S. Attorney Mark Chutkow and Trial Attorney Benjamin J. Hawk of the Civil Rights Division’s Human Trafficking Prosecution Unit. Assistant U.S. Attorney Peter Ziedas is handling the asset forfeiture part of the case.
Delaware Company Pleads Guilty to Unlawful Discharges of Oil in Jefferson Parish, LouisianaRead the Press Release
A Delaware company pleaded guilty today in federal court in the Eastern District of Louisiana to negligently discharging oil into the bayous of Jefferson Parish, Louisiana, the Department of Justice announced.
Cedyco Corporation, headquartered in Houston, pleaded guilty to three counts of violating the Federal Water Pollution Control Act (Clean Water Act). The Clean Water Act makes it a misdemeanor to negligently discharge harmful quantities of oil into navigable waters of the United States.
According to the plea agreement, Cedyco agreed to pay a criminal fine of $557,000. All of the fine money will be directed to the Oil Spill Liability Trust Fund to aid the U.S. Coast Guard in responding to future oil spills. Additionally, Cedyco also agreed to cease operations and divest itself of all hydrocarbon business interests in the state of Louisiana.
“Cedyco is being held accountable for its neglectful operations and poor management, which repeatedly resulted in illegal discharges of oil into the sensitive Louisiana bayou,” said Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division at the Department of Justice. “Those who are permitted to develop energy resources in proximity to delicate ecosystems must do so in a sound and responsible manner or they will be held accountable for violations of the law.”
“The protection of our precious environment is a critical mission which we take very seriously,” said Jim Letten, U.S. Attorney for the Eastern District of Louisiana. “Simply stated, we will not tolerate negligence by the companies which are required by law to operate facilities carefully in order to protect our people and environment.”
“It’s important that we hold polluters accountable for their actions, and the successful prosecution of Cedyco does this,” said Captain Peter Gautier, Commander of Coast Guard Sector New Orleans. “I applaud the efforts of our partner agencies and internal investigators for their tireless efforts in prosecuting this case. The Coast Guard, EPA, LDEQ and Department of Justice will continue to hold polluters responsible for their actions.”
“Our nation’s environmental laws are designed to protect oceans and inland waterways from illegal and harmful pollutant discharges,” said Ivan Vikin, Special Agent in Charge of EPA’s criminal enforcement program in Louisiana. “Today’s guilty plea sends a clear message that companies that refuse to operate lawfully and pollute our waters, threatening people's health and the environment, will be vigorously prosecuted.”
Cedyco owned and operated several hydrocarbon facilities, including fixed barges, platforms and wells, in the brackish bayous of South Louisiana. As a general matter, Cedyco’s facilities were poorly maintained and operated without plans and permits required by regulations issued by the Louisiana Department of Environmental Quality (LDEQ) as administrator of the federal Clean Water Act. Cedyco’s negligent operation and poor maintenance of three of its facilities in Jefferson Parish led to harmful discharges of oil into the navigable waters of the United States. The three facilities are the tank battery known as the “Bayou St. Denis facility,” the production and storage facility known as the “Bayou Dupont facility,” and the production well adjacent to the Bayou Dupont facility known as “Well #10.” Each facility will be addressed in turn.
“DEQ and its partners are dedicated to policing and enforcing environmental laws. Today’s actions further illustrate that commitment,” said LDEQ Secretary Peggy Hatch.
Cedyco’s Bayou St. Denis facility was a tank battery located south of the Barataria Waterway. A May 29, 2008, joint inspection by the U.S. Coast Guard (USCG) and LDEQ revealed that the facility was storing oil without the required Facility Response Plan, Spill Prevention and Control Plan, and LDEQ permit as required under Clean Water Act regulations. The condition of the facility was extremely poor with corroded pipes and spilled oil on the deck.
On June 15, 2008, enough oil was leaking from the facility that a sheen was visible on the surface of the water. A fisherman reported this sheen to the USCG, and a subsequent site visit by LDEQ on June 20, 2008, confirmed that oil was leaking into the adjacent waterway from the facility’s outfalls.
Cedyco’s Bayou Dupont facility is an oil storage and production platform located to the northeast of Bayou St. Denis, close to the Plaquemines Parish line. From Feb. 18, 2008, to May 19, 2008, Cedyco operated this facility without a Facility Response Plan, Spill Prevention and Control Plan, and LDEQ permit. A joint USCG and LDEQ inspection on Feb. 19, 2008, revealed that the facility was in extremely poor condition with pools of oily water and emulsified oil on the deck, as well as ample evidence of extensive corrosion and leaks. The required spill response equipment was either missing or defective. For example, an absorbent boom meant to soak up oil spills had a plant growing out of it. During rain events that took place from Feb. 19, 2008, through May 18, 2008, the deck oil made its way unimpeded into the bayou through unfiltered outfalls and cracks in the deck and containment structures. The sources of this oil were not only chronic leaks and occasional spills, but at times resulted from acute events such as the leak from the slop oil tank that occurred on May 18, 2008. The May 18 slop oil tank spill was observed by an LDEQ inspector who took photographs at the scene. During the charged period, the quantity of oil that was present on the deck of Bayou Dupont facility was sufficient to cause a sheen when rain caused the oil to wash into the adjacent waterway.
Cedyco’s Well #10 is located in an area of bayou adjacent to the Bayou Dupont facility. Cedyco did not properly maintain Well #10, and as a result of that negligence, the well began to leak on or about May 17, 2008. The leak continued for at least two days. Before it was contained with boom, the leak resulted in an oily sheen that was detected as far as two miles downstream from the well. The leaking oil also resulted in an emulsion being deposited on the adjacent shoreline.
The court set a sentencing date for Cedyco on Aug. 15, 2012.
The case was investigated by agents of CGIS and EPA-CID and by USCG and LDEQ inspectors. The case is being prosecuted by Christopher L. Hale of the Justice Department’s Environmental Crimes Section and Dorothy “Dee” Taylor of the U.S. Attorney’s Office in New Orleans.
Filed photo exhibits are available at the U.S Coast Guard website: http://cgvi.uscg.mil/media/main.php?g2_itemId=1627304 .
BP Agrees to Add More Than $400 Million in Pollution Controls at Indiana Refinery and Pay $8 Million Clean Air Act PenaltyRead the Press Release
WASHINGTON – The Department of Justice and the U.S. Environmental Protection Agency (EPA) announced that BP North America Inc. has agreed to pay an $8 million penalty and invest more than $400 million to install state-of-the-art pollution controls and cut emissions from BP’s petroleum refinery in Whiting, Ind. When fully implemented, the agreement is expected to reduce harmful air pollution that can cause respiratory problems such as asthma and are significant contributors to acid rain, smog and haze, by more than 4,000 tons per year.
The complaint alleges violations of Clean Air Act requirements at the Whiting refinery in connection with construction and expansion of the refinery, as well as violations of a 2001 consent decree with the company that covered all of BP’s refineries and was entered into as part of EPA’s Petroleum Refinery Initiative.
Today’s settlement will lead to the installation of innovative pollution controls on the largest sources of emissions at the Whiting refinery, including extensive new controls on the refinery’s flaring devices. Flaring devices are used to burn off waste gases. The more waste gases sent to a flare, and the less efficient the flare is when burning those gases, the more pollution that will occur. Under the settlement, BP will install new equipment that will limit the amount of waste gas sent to flaring devices in the first place, as well as implement innovative, cutting-edge controls to ensure proper combustion efficiency for any gases that are burned in a flaring device. These requirements, similar to those included in a recent settlement with Marathon Petroleum Corp., are part of EPA’s national effort to reduce emissions from flares at refineries, petrochemical and chemical plants.
In addition to the controls on the refinery’s flares, this settlement will also result in reduced emissions by imposing some of the lowest emission limits in refinery settlements to date, enhancing controls on wastewater containing benzene, and providing for an enhanced leak detection and repair program. Today’s settlement also requires the Whiting refinery to spend $9.5 million on projects at the refinery to reduce the emissions of green house gases.
BP will perform a supplemental environmental project in which they will install, operate and maintain a $2 million fence line emission monitoring system at the Whiting refinery and will make the data collected available to the public by posting the information on a publicly-accessible website. Fenceline monitors will continuously monitor benzene, toluene, pentane, hexane, sulfur dioxide, hydrogen sulfide and all compounds containing reduced sulfur.
“In this case, BP North America has not lived up to all of its obligations under an earlier settlement agreement and has committed new violations of the Clean Air Act at its Whiting refinery in Indiana,” said Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division of the Department of Justice. “This settlement secures a significant penalty, requires state-of-the-art controls, and is a fair and just resolution that will address BP’s violations. We will continue to hold BP accountable and ensure that it complies with the nation’s environmental laws.”
“Today's settlement will protect the residents of northwestern Indiana from harmful air pollution by requiring state-of-the-art pollution controls,” said Cynthia Giles, Assistant Administrator for EPA’s Office of Enforcement and Compliance Assurance. “BP's agreement to install fenceline monitoring will also ensure that residents have access to critical information about pollution that may be affecting their community.”
“This settlement was the product of both federal and state environmental enforcement entities and was enhanced by having environmental advocacy groups involved in the negotiations, including Save the Dunes, the Hoosier Chapter of the Sierra Club, the Hoosier Environmental Council, the Natural Resources Defense Council and the Environmental Law and Policy Center. Respect for our nation’s laws including the Clean Air Act is at the heart of this effort,” said Indiana Attorney General Greg Zoeller, whose office represented the state of Indiana and Indiana Department of Environmental Management in settlement negotiations.
BP Products North America Inc., headquartered in Warrenville Ill., engages in the exploration, development, production and marketing of oil and natural gas, and additionally operates petroleum refineries in California, Indiana, Ohio, Texas and Washington. BP North America Inc. is a subsidiary of BP p.l.c., headquartered in London, England. The Whiting Refinery has a refining capacity of approximately 405,000 barrels per day and is the 6th largest refinery in the United States.
The state of Indiana, the Sierra Club, Save the Dunes, the Natural Resources Defense Council, the Hoosier Environmental Council, the Environmental Law and Policy Center, the Environmental Integrity Project, Susan Eleuterio and Tom Tsourlis also joined in this settlement.
The consent decree is subject to a 30-day public comment period and final court approval. The consent decree may be viewed on the Department of Justice website www.justice.gov/enrd/Consent_Decrees.html.
Learn more about EPA’s civil enforcement of the Clean Air Act: www.epa.gov/compliance/civil/caa/index.html
Tuesday 22 May 2012
Ohio Insurance Salesman Guilty of Tax ChargesRead the Press Release
A jury convicted William A. Herder of Richland County, Ohio, yesterday on federal tax charges, the Justice Department and Internal Revenue Service (IRS) announced. Trial began on May 11, 2012, before U.S. District Judge Sara Lioi, sitting in Akron, Ohio. Herder was charged with corruptly endeavoring to impair and impede the due administration of the Internal Revenue laws, tax evasion and five counts of failure to file tax returns. He was convicted of all counts.
According to the evidence at trial, Herder sold insurance for Aflac Inc, a nationwide supplemental insurance provider, from an office in Mansfield, Ohio. Herder had not filed a timely or valid tax return in more than a decade. For the 2000 tax year, Herder filed a tax return on which he falsely claimed that he had not earned any income. Subsequently, Herder failed to file any tax returns for the 2001-2009 tax years, despite earning income and receiving numerous warnings and notices from the IRS. The evidence at trial showed that, to prevent the IRS from collecting his unpaid taxes, Herder attempted to conceal his assets and income. In 2003, Herder transferred title to his house to a bogus foundation he established in Utah called the “Mentor Foundation.” Herder also cashed out an Individual Retirement Account and a life insurance policy, converted large amounts of cash to silver coins, and paid expenses with cash and money orders, all in an effort to prevent the IRS from collecting his unpaid taxes.
In addition to failing to file valid tax returns and hiding his assets from the IRS, trial evidence showed Herder submitted numerous obstructive letters and documents to the IRS and the insurance companies he represented in an effort to prevent the IRS from assessing and collecting his taxes. In these letters, Herder falsely claimed, among other things, that the tax laws were not applicable to him. The evidence at trial showed that Herder obtained some of these materials from Joseph Flickinger, who was previously convicted and sentenced for a tax fraud conspiracy and later enjoined from preparing tax returns for others.
Following the jury verdict, Herder was taken into custody. Sentencing is scheduled for Aug. 23, 2012.
Assistant Attorney General Kathryn Keneally of the Justice Department’s Tax Division thanked special agents of IRS - Criminal Investigation, who provided valuable assistance in conducting the investigation, Tax Division Trial Attorneys Melissa S. Siskind and Jeffrey McLellan, who prosecuted the case, and Tax Division Trial Attorney Sean R. Delaney, currently on detail to a U.S. Attorney’s office, who assisted with the investigation.
Additional information about the Tax Division and its enforcement efforts may be found at www.justice.gov/tax .
Massachusetts Man Sentenced to 64 Months in Prison on Child Pornography ChargesRead the Press Release
WASHINGTON – A Massachusetts man was sentenced today to 64 months in prison and five years of supervised release for transportation, receipt and possession of child pornography, announced Assistant Attorney General for the Justice Department’s Criminal Division Lanny A. Breuer, U.S. Attorney for the District of Massachusetts Carmen M. Ortiz and Special Agent in Charge of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) in Boston Bruce M. Foucart.
Chris Allen Oake, 61, of Acton, Mass., was sentenced by U.S. District Judge Nathaniel M. Gorton in Boston. On Feb. 16, 2012, Oake pleaded guilty to one count of transportation of child pornography, two counts of receipt of child pornography, and one count of possession of child pornography.The charges against Oake were a result of “Operation Nest Egg,” a joint investigation led by the Child Exploitation and Obscenity Section (CEOS) in the Justice Department’s Criminal Division, the U.S. Attorney’s Office for the Southern District of Indiana, ICE-HSI and the U.S. Postal Inspection Service. Operation Nest Egg, launched in February 2008, targeted approximately 500 individuals located throughout the world for their involvement in an online group dedicated to trading images of child pornography.
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, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.The case was prosecuted by Assistant U.S. Attorney Michael I. Yoon of the District of Massachusetts and CEOS Trial Attorney Bonnie L. Kane. The case against Oake was investigated by ICE-HSI, CEOS’s High Technology Investigative Unit, Massachusetts State Police and the Acton Police Department.
Justice Department Files Lawsuit Against New Jersey Information Technology Company for RetaliationRead the Press Release
The Justice Department filed a lawsuit today against Whiz International LLC, an information technology staffing company in Jersey City, N.J., regarding allegations that the company violated the anti-discrimination provision of the Immigration and Nationality Act (INA) when it terminated an employee in retaliation for expressing opposition to Whiz’s alleged preference for foreign nationals with temporary work visas.
The complaint alleges that the company directed an employee that served as a receptionist and a recruiter, to prefer certain noncitizens in its recruitment efforts and then terminated the employee when she expressed discomfort with excluding U.S. citizens and lawful permanent residents from consideration. The anti-discrimination provision prohibits employers from retaliating against workers who oppose a practice that is illegal under the statute or who attempt to assert rights under the statute.
“Employers cannot punish employees who try to do the right thing and take reasonable measures to shed light on a practice they believe may be discriminatory,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “Employers must ensure that their practices conform to the anti-discrimination provision of the INA, and retaliation will not be tolerated.”The complaint seeks a court order prohibiting future discrimination by the respondent, monetary damages to the employee, as well as civil penalties.
The Office of Special Counsel for Immigration-Related Unfair Employment Practices (OSC) is responsible for enforcing the anti-discrimination provisions of the INA, which protect U.S. citizens and certain work-authorized individuals from citizenship status discrimination. The INA also protects work-authorized individuals from national origin discrimination, over-documentation in the employment eligibility verification process and retaliation.
For more information about protections against employment discrimination under the immigration laws, call 1-800-255-7688 (OSC’s worker hotline) (1-800-237-2525, TDD for hearing impaired), 1-800-255-8155 (OSC’s employer hotline) (1-800-362-2735, TDD for hearing impaired), sign up for a no-cost webinar at www.justice.gov/crt/about/osc/webinars.php, email [email protected], or visit the website at www.justice.gov/crt/about/osc/. Civil Rights Division Trial Attorney Liza Zamd represents the department in this matter.Former Pennsylvania Businessman Convicted of Filing False ReturnsRead the Press Release
Jonathon Felix, formerly of Villanova, Pa., was found guilty by a federal jury of willfully signing and filing false income tax returns, the Justice Department and Internal Revenue Service (IRS) announced today. U.S. District Court Judge for the Eastern District of Pennsylvania Petrese Tucker presided over the trial in Philadelphia.
According to testimony and evidence presented to the jury at trial, Felix operated a corporation called United Professional Plans Inc. (UPPI), located in Philadelphia, which he co-owned with his father until he passed away in 2000. The evidence showed that while operating UPPI, Felix removed significant funds from the company in various ways from 1999 through 2002, causing the failure of UPPI. Felix deposited these business funds into his personal accounts or used them for personal expenditures. Felix willfully signed and filed false individual income tax returns for those years that substantially under-reported his income and did not include the funds he appropriated from UPPI. Felix’s criminal conduct caused a tax loss to the IRS of about $390,000.
Felix faces a maximum potential sentence of 12 years in prison and a $1 million fine. Judge Tucker scheduled sentencing for Aug. 23, 2012.
Assistant Attorney General Kathryn Keneally of the Justice Department’s Tax Division and Zane David Memeger, U.S. Attorney for the Eastern District of Pennsylvania, thanked special agents of IRS - Criminal Investigation and the Labor Department’s Office of Inspector General, who provided valuable assistance in conducting the investigation, and Tax Division Trial Attorney Patrick J. Murray and Assistant U.S. Attorney Floyd Miller, who prosecuted the case.
More information about the Tax Division and its enforcement efforts can be found at www.justice.gov/tax .
Monday 21 May 2012
President of South Carolina-Based Firm Charged with Illegally Exporting Goods to IranRead the Press Release
WASHINGTON – Markos Baghdasarian, the president of Delfin Group USA, was arrested on Saturday, May 19, 2012, at the Hartsfield International Airport in Atlanta, just prior to boarding an international flight to the United Arab Emirates. Baghdasarian was charged by criminal complaint, issued in the District of South Carolina, with exporting goods from the United States to Iran without the required U.S. Department of the Treasury licenses and with making false statements on official government documents. If convicted of these charges, Baghdasarian could face a maximum of 20 years in federal prison. Baghdasarian made his first appearance before a magistrate judge in the Northern District of Georgia earlier today.
The arrest was announced by Lisa O. Monaco, Assistant Attorney General for National Security; William N. Nettles, U.S. Attorney for the District of South Carolina; John Morton, Director of U.S. Immigration and Customs Enforcement (ICE); and David W. Mills, Assistant Secretary for Export Enforcement, Bureau of Industry and Security, U.S. Department of Commerce.
According to the affidavit filed in support of the criminal complaint, Baghdasarian served as president of Delfin Group USA, which is a Russian-owned producer of synthetic motor oils, located in North Charleston, S.C. From as early as June 13, 2010, until Oct. 12, 2011, Baghdasarian is alleged to have engaged in prohibited transactions with customers in Iran, including Pars Oil, which is an oil company owned by the government of Iran. U.S. persons and companies are prohibited from engaging in commercial transactions involving Iran unless authorized by the U.S. Department of Treasury.As further detailed in the criminal complaint affidavit, in August 2011, Baghdasarian exported aviation engine oils and polymer valued at $850,000 to Iran. Baghdasarian is alleged to have concealed that Iranian customers were the true recipients of the shipment by falsely asserting in an official document that a business entity in the United Arab Emirates was the ultimate consignee for the goods.
This case was the product of an extensive investigation by ICE’s Homeland Security Investigations and the Department of Commerce, Office of Export Enforcement. The case is being prosecuted by Trial Attorney Ryan Fayhee of the Counterespionage Section in the Justice Department’s National Security Division and Assistant U.S. Attorney Alston Badger of the U.S. Attorney’s Office for the District of South Carolina, Charleston Division.Charges set forth in a criminal complaint are merely accusations and do not constitute proof of guilt. Every defendant is presumed to be innocent unless and until proven guilty.
Justice Department Settles with Home Depot to Enforce the Employment Rights of an Army National Guard SoldierRead the Press Release
The Justice Department announced today that it has reached a settlement with Home Depot U.S.A. Inc., to resolve allegations that the company violated the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA) when it terminated the employment of Army National Guard soldier Brian Bailey.
The department’s complaint alleged that Home Depot willfully violated USERRA by terminating Mr. Bailey’s employment because of his military service obligations. Mr. Bailey, an Iraq War veteran, worked at a Home Depot store in Flagstaff, Ariz., as a department supervisor while at the same time serving in the California Army National Guard. Throughout his employment with Home Depot, Mr. Bailey took periodic leave from work to fulfill his military obligations with the National Guard. According to the Justice Department’s complaint, Mr. Bailey was removed from his position as a department supervisor after Home Depot management officials at the Flagstaff store openly expressed their displeasure with his periodic absences from work due to his military obligations and further indicated their desire to remove him from his position because of those absences.
Under the terms of the settlement, embodied in a consent decree that has been submitted for approval to the federal district court, Home Depot will provide Mr. Bailey with $45,000 in monetary relief and make changes to its Military Leaves of Absence policy. The settlement further mandates that Home Depot review its Military Leaves of Absence policy with managers from the district where Mr. Bailey worked.
“This settlement demonstrates our vigilant protection of the employment opportunities of our service members, and our commitment to vigorous enforcement of the laws that protect them,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “ The department is pleased that we were able to work cooperatively with Home Depot to resolve this matter without the need for contested litigation.”
“This settlement not only compensates Mr. Bailey for employment opportunities he lost because of his military service, but it will also protect other members of our nation’s armed services employed by Home Depot through the required changes to the company’s Military Leaves of Absence policy and review of that policy with managers from the district where Mr. Bailey worked,” said Ann Birmingham Scheel, Acting U.S. Attorney for the District of Arizona.
This case was handled by the Employment Litigation Section of the Justice Department’s Civil Rights Division and the U.S. Attorney’s Office for the District of Arizona.
Civil rights enforcement is a priority of the Department of Justice. The rights of our service members are protected under USERRA, which prohibits civilian employers from discriminating against members of the military, including National Guard soldiers, with respect to employment opportunities based on their past, current, or future uniformed service obligations. Additional information about USERRA can be found on the Justice Department’s websites, www.usdoj.gov/crt/emp and www.servicemembers.gov , as well as the Labor Department’s website at www.dol.gov/vets/programs/userra/main.htm .
Related Materials:
Consent Decree
Justice Department Settles with Flint, Michigan, to Make Voting Accessible to People with DisabilitiesRead the Press Release
The Justice Department today announced a settlement under the Americans with Disabilities Act (ADA) with the city of Flint, Mich., to make all the city’s polling places more accessible for individuals with mobility impairments. The case was commenced based on a complaint from the Michigan Protection and Advocacy Service, and was investigated jointly by the Civil Rights Division and the U.S. Attorney’s Office in the Eastern District of Michigan.
Under the terms of the settlement, the city of Flint recognizes that accessible polling places are the cornerstone of its voting accessibility program and will make all of its polling places accessible to people with disabilities by the November 2012 elections. The settlement also requires that accessibility will be a major factor in the city’s choices of future polling places. To assist Flint to make its elections accessible, the Justice Department will provide technical assistance to the city in deciding whether a polling place location can be made accessible on Election Day.
“Voters with disabilities in the city of Flint will now have the opportunity to exercise their franchise in the same way as other voters in Flint,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “We applaud the city’s commitment in ensuring equal access to the polls before the upcoming fall elections.”
“Voting is the foundation of democracy. This agreement will help ensure that people with disabilities have the opportunity to cast their votes at polling places, alongside their neighbors, and have their voices heard.” said Barbara L. McQuade, U.S. Attorney for the Eastern District of Michigan.
More information about this settlement and the ADA is available at the Justice Department’s toll-free ADA Information line at (800) 514-0301 or (800) 514-0383 (TTY) and on the ADA website at www.ada.gov or contact the U.S. Attorney’s civil rights hotline at 313-226-9151.
Former Navy Seaman Convicted in Child Pornography CaseRead the Press Release
WASHINGTON – Former U.S. Navy Seaman James Driver, 24, of Midland, Mich., was convicted today by a federal jury in the Eastern District of Michigan on one count of possession of child pornography, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division.
According to court documents and testimony presented during the trial, the case originated from a Naval Criminal Investigative Service (NCIS) investigation into an individual, later identified as James Driver, suspected of possessing and distributing child pornography using a peer-to-peer file sharing network. Driver, who at the time was a U.S. Navy seaman stationed in Japan, admitted in an interview to being interested in child pornography for the past five years.
At sentencing, Driver faces a maximum sentence of 10 years in prison, a $250,000 fine and lifetime supervised release. Sentencing is scheduled for Sept. 6, 2012.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse, launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Child Exploitation and Obscenity Section (CEOS) of the Justice Department’s Criminal Division, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The case is being prosecuted by CEOS Trial Attorneys Thomas Franzinger and Mi Yung Park. The case was investigated by NCIS and CEOS’s High Technology Investigative Unit. Assistance was provided by the FBI’s Innocent Images Unit.
Former Haitian Government Official Sentenced to Nine Years in Prison for Role in Scheme to Launder BribesRead the Press Release
WASHINGTON – Jean Rene Duperval, a former director of international relations for Telecommunications D’Haiti S.A.M. (Haiti Teleco), a Haitian state-owned telecommunications company, was sentenced today to nine years in prison for his role in a scheme to launder bribes paid to him by two Miami-based telecommunications companies.
The sentence was announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney for the Southern District of Florida Wifredo A. Ferrer; and Special Agent in Charge Jose A. Gonzalez of Internal Revenue Service-Criminal Investigation (IRS-CI), Miami Field Office.
Duperval, 45, of Miramar, Fla., was sentenced by U.S. District Judge Jose E. Martinez in the Southern District of Florida. Judge Martinez also ordered Duperval to forfeit $497,331.
Duperval was convicted in March 2012 of two counts of conspiracy to commit money laundering and 19 counts of money laundering. He has been in custody since his conviction.
“Mr. Duperval took bribes in exchange for giving companies an unfair and illegal advantage in the marketplace, and then tried to hide these illicit transactions behind the cloak of shell corporations and fake invoices,” said Assistant Attorney General Breuer. “Just as we prosecute corrupt businesspeople under the FCPA, we will hold accountable corrupt foreign officials when they seek to launder the proceeds of that bribery through the U.S. financial system. Today’s nine-year prison sentence sends a strong message to foreign officials and others who would facilitate foreign corruption that they will face serious consequences.”“Duperval’s money laundering scheme was an attempt to conceal the payment of bribes to foreign officials to obtain an unfair business advantage in the marketplace,” said U.S. Attorney Ferrer. “Today’s sentence, however, helps level the playing field for all legitimate businesses that honestly compete in the marketplace for foreign or domestic business.”
“IRS Criminal Investigation continues to expand its international efforts to aggressively investigate those individuals who engage in money laundering and bribery schemes,” said IRS-CI Special Agent in Charge Gonzalez. “Individuals involved in corrupt international endeavors, as uncovered in this case, will get caught and this sentencing should serve as a strong warning to those considering similar conduct.”
Duperval was the director of international relations for Haiti Teleco, the sole provider of land line telephone service in Haiti. According to the evidence presented at trial, two Miami-based telecommunications companies had a series of contracts with Haiti Teleco that allowed the companies’ customers to place telephone calls to Haiti.
Duperval was convicted for participating in a scheme to commit money laundering from 2003 to 2006, during which time the telecommunications companies collectively paid approximately $500,000 to two shell companies to funnel the bribes to Duperval.
The purpose of these bribes, according to the evidence presented at trial, was to obtain various business advantages from Duperval, including the issuance of preferred telecommunications rates, a continued telecommunications connection with Haiti and the continuation of a particularly favorable contract with Haiti Teleco. To conceal the bribe payments, Duperval instructed the companies to forward the payments to the shell companies. To support these payments, the companies and their executives created false documents claiming that the payments were for “consulting services” or for “international minutes from USA to Haiti.” No actual services were performed. The funds were then disbursed from the shell companies for the benefit of Duperval and his family. To conceal the nature of these funds, Duperval falsely characterized these payments as “commissions” and “payroll.”Duperval was the seventh defendant involved in the corruption scheme to be sentenced, which includes the following individuals:
- On April 27, 2009, Antonio Perez, a former controller at one of the Miami-based telecommunications companies, pleaded guilty to one count of conspiracy to violate the Foreign Corrupt Practices Act (FCPA) and money laundering. On Jan. 12, 2010, he was sentenced to 24 months in prison.
- On May 15, 2009, Juan Diaz, the president of J.D. Locator Services, pleaded guilty to one count of conspiracy to violate the FCPA and money laundering. He admitted to receiving more than $1 million in bribe money from telecommunications companies. On July 30, 2010, he was sentenced to 57 months in prison, which he is currently serving.
- On Feb. 19, 2010, Jean Fourcand, the president and director of Fourcand Enterprises Inc., pleaded guilty to one count of money laundering for receiving and transmitting bribe monies in the scheme. On May 5, 2010, he was sentenced to six months in prison, which he is currently serving.
- On March 12, 2010, Robert Antoine, a former director of international affairs for Haiti Teleco, pleaded guilty to one count of conspiracy to commit money laundering. He admitted to receiving more than $1 million in bribes from Miami-based telecommunications companies. On June 2, 2010, he was sentenced to 48 months in prison, which he is currently serving.
- On Aug. 4, 2011, Joel Esquenazi and Carlos Rodriguez, who were the former president and vice-president, respectively, of one of the telecommunications companies, were convicted by a federal jury of one count of conspiracy to violate the FCPA and wire fraud, seven counts of FCPA violations, one count of money laundering conspiracy and 12 counts of money laundering. On Oct. 25, 2011, Esquenazi was sentenced to 15 years in prison, the longest sentence ever imposed in a case involving the FCPA. On the same day, Rodriguez was sentenced to 84 months in prison for his role in the bribery scheme. Both are currently serving their sentences.
In a second superseding indictment, Washington Vasconez Cruz, Amadeus Richers and Cecilia Zurita were charged in a related scheme to commit foreign bribery and money laundering from December 2001 through January 2006. The defendants are fugitives. An indictment is merely an accusation, and defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.
The Department of Justice is grateful to the government of Haiti for continuing to provide substantial assistance in gathering evidence during this investigation. In particular, Haiti’s financial intelligence unit, the Unité Centrale de Renseignements Financiers (UCREF), the Bureau des Affaires Financières et Economiques (BAFE), which is a specialized component of the Haitian National Police, and the Ministry of Justice and Public Security provided significant cooperation and coordination in this ongoing investigation.
To learn more about the government’s FCPA enforcement efforts, go to www.justice.gov/criminal/fraud/fcpa.
The case is being prosecuted by Assistant Chief James M. Koukios and Trial Attorney Daniel S. Kahn of the Criminal Division’s Fraud Section. The Criminal Division’s Office of International Affairs also provided assistance in this matter. These cases were investigated by the IRS-CI Miami Field Office.
Former Alexandria, Virginia, Resident Pleads Guilty to Corruptly Endeavoring to Impede the Internal Revenue ServiceRead the Press Release
Donald R. Megginson, a former resident of Alexandria, Va., pleaded guilty to corruptly endeavoring to obstruct and impede the due administration of the Internal Revenue laws, the Justice Department and Internal Revenue Service (IRS) announced today. Sentencing is scheduled for Aug. 22, 2012.
According to the plea agreement and statement of facts, Megginson formed D & B Tours Inc. at the suggestion of his longtime friend, Robert Turner. D & B Tours was a tour bus company. Megginson was in charge of the company’s paperwork and finances and Turner drove the tour bus, “Blue Ice.” Megginson, along with Turner and at least one other person, participated in a scheme to file false corporate income tax returns for 2001, 2002 and 2003 for D & B Tours with the IRS in order to get money from the government to which they were not entitled. These corporate returns claimed false refunds of more than $177,000 based upon fraudulently inflated federal fuel tax credits. Megginson received $70,000 as his share of the fraudulent refunds and he distributed the remaining monies to Turner and the other individual.
According to the court documents, Megginson also admitted that he failed to timely file tax returns in 1999 through 2006, despite receiving various notices from the IRS. When Megginson ultimately filed his 1999 through 2006 tax returns, he did not include payment for any taxes due, despite his owing substantial income tax for each of those years. Megginson also omitted from his 2004 tax return his share of the fraudulent proceeds that he had received from his role in the scheme to obtain false tax refunds. Megginson further admitted that, in October 2007, he filed an Offer in Compromise (OIC) with the IRS seeking to settle his individual income tax liability. Megginson admitted that he falsely stated that he had insufficient assets and income to pay his $60,000 tax liability and falsely omitted from the OIC a bank account he had with $600,000 in readily available funds from which he could pay his tax liability.
Megginson faces up to three years in prison, one year of supervised release, restitution and a fine of up to $250,000. Robert Turner previously pleaded guilty to corruptly endeavoring to obstruct and impede the due administration of the Internal Revenue laws and was sentenced on Aug. 12, 2011 to five years’ probation and $18,200 in restitution to the IRS.
Kathryn Keneally, Assistant Attorney General for the Justice Department’s Tax Division commended the investigative efforts of the IRS agents involved in this case, as well as Tax Division Trial Attorneys Caryn Finley and Jack Hinton, who are prosecuting the case on behalf of the United States.
More information about the Tax Division and its enforcement efforts is available at www.usdoj.gov/tax/.
Friday 18 May 2012
Ship’s Captain Convicted of Obstructing a Coast Guard InspectionRead the Press Release
WASHINGTON – The former captain of a Panama-flagged cargo ship that discharged hundreds of plastic pipes into the ocean, was convicted yesterday by a jury in Mobile, Ala., for obstructing a U.S. Coast Guard inspection of the vessel in the port of Mobile on Sept. 21, 2011. Prastana Taohim, 38, the captain of the M/V Gaurav Prem, was found guilty of two counts of obstruction of justice, announced Ignacia S. Moreno, Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division and Kenyen R. Brown, U.S. Attorney for the Southern District of Alabama.
At trial, witnesses testified that Captain Taohim ordered the ship’s chief officer to throw hundreds of plastic pipes into the ocean and not record the discharge in the ship’s garbage record book as required. The garbage record book is a required log regularly inspected by the U.S. Coast Guard. Taohim then knowingly made the garbage record book available during a Coast Guard inspection of the vessel in the Port of Mobile, Ala., on Sept. 21, 2011. The plastic pipes had previously contained insecticide and were used to fumigate a grain shipment. The discharge of plastic into the sea is prohibited under the International Convention to Prevent Pollution from Ships, known as MARPOL.
Taohim was found guilty in U.S. District Court in the Southern District of Alabama for obstructing the Coast Guard’s inspection of the ship. The jury also found the defendant guilty of one count of obstruction of justice related to covering up the pollution by creating a false and fictitious garbage log.
Sentencing is set for Aug. 15, 2012.
This investigation was conducted by the U.S. Coast Guard Investigative Service and the U.S. Environmental Protection Agency Criminal Investigation Division. Additional assistance was provided by the Coast Guard Sector Mobile, and U.S. Coast Guard Eighth District Legal Office. The case was prosecuted by Trial Attorney David O’Connell of the Justice Department’s Environmental Crimes Section of the Environment and Natural Resources Division and Assistant U.S. Attorney Michael Anderson of the U.S. Attorney’s Office for the Southern District of Alabama.
North Carolina Department of Corrections Probation Officer Indicted for Civil Rights ViolationsRead the Press Release
The Department of Justice announced that North Carolina Department of Correction’s Division of Community Corrections Probation Officer Willie James Steele Jr., 47, was indicted yesterday on civil rights charges for violating the constitutional rights of a female probationer that he was supervising by coercing her into sexual acts on two separate occasions. Steele was indicted by a federal grand jury on two counts of deprivation of rights under color of law and one count of using and carrying a firearm during and in relation to a crime of violence.
According to the indictment filed in the Western District of North Carolina, the Division of Community Corrections supervised offenders serving state probation in the state of North Carolina and provided courtesy supervision for offenders residing in this state but who had committed criminal offenses in other states. Steele supervised the victim, who had had her probation transferred from another state, and had the authority to recommend to a court or other agency that the victim be incarcerated or otherwise sanctioned if she violated the conditions of her probation.
The indictment alleges that Steele engaged in acts that resulted in bodily injury to the victim and constituted aggravated sexual abuse, and that Steele used and carried a firearm during and in relation to that offense. It also alleges that Steele deprived the victim of her constitutional right to bodily integrity on a second occasion.
This case was investigated by the FBI and the North Carolina State Bureau of Investigation, and is being prosecuted by Assistant U.S. Attorney Kenny Smith from the Western District of North Carolina and U.S. Department of Justice Civil Rights Division Trial Attorney Shan Patel.
Individuals who have additional information or believe they may have been a victim of Steele’s conduct are encouraged to call the FBI Charlotte Office at 704-672-6100.
Charges set forth in an indictment are merely accusations and do not constitute proof of guilt. Every defendant is presumed to be innocent unless and until proven guilty.
Justice Department Files Pregnancy Discrimination Lawsuit Against the Nevada Division of ForestryRead the Press Release
The Department of Justice today announced the filing of a lawsuit against the Nevada Division of Forestry (NDF) alleging that NDF discriminated against Ms. Tawnya Meyer, a former employee, when they fired her soon after she announced her pregnancy. According to the complaint, Ms. Meyer’s termination was in violation of Title VII of the Civil Rights Act of 1964, as amended. Title VII is a federal statute which prohibits employment discrimination on the basis of sex, including pregnancy.
The suit, filed in the Reno Division of the U.S. District Court for the District of Nevada, alleges that Ms. Meyer, a former dispatcher with the NDF, was successfully performing her job and that there were no complaints about her work until she announced her pregnancy. The complaint further alleges that NDF did not document any work related problems with Ms. Meyer’s performance, nor did it follow its own policies regarding terminations. Finally, according to the complaint, Ms. Meyer’s pregnancy was discussed as a reason for her termination by NDF managers. The United States’ complaint seeks a court order that would require NDF to develop and implement policies that would prevent its employees from being subjected to discrimination based upon sex. The relief sought would also include monetary relief for Ms. Meyer as compensation for damages that she sustained as a result of the alleged discrimination.
Ms. Meyer initially filed a charge of sex discrimination with the Equal Employment Opportunity Commission (EEOC) whose San Francisco office investigated the matter, determined that there was reasonable cause to believe discrimination occurred and referred the matter to the Department of Justice.
“No woman should have to make a choice between having a job and having a family,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “Federal law requires employers to maintain a workplace free of such discrimination.”
EEOC San Francisco District Director Michael Baldonado said, “Due to our agency’s ongoing partnership with the DOJ, this lawsuit has been filed to hold NDF accountable for pregnancy discrimination. Having a new child should be a joyous event, not one that leads to unemployment.”
The EEOC held a public meeting in Washington concerning pregnancy and caregiver discrimination. Material from this commission meeting can be found at www.eeoc.gov/eeoc/meetings/2-15-12/index.cfm .
The continued enforcement of Title VII is a priority of the Justice Department’s Civil Rights Division. Additional information about the Civil Rights Division of the Department of Justice is available on its website at www.usdoj.gov/crt .
Justice Department Extends Compliance Deadline for Existing Pools Under the 2010 ADA StandardsRead the Press Release
The Justice Department announced today an extension for existing swimming pools to comply with the 2010 Americans with Disabilities Act (ADA) Standards for Accessible Design. Existing pools must comply with the standards by Jan. 31, 2013.
On July 26, 2010, the 20th anniversary of the ADA, President Barack Obama announced newly revised ADA regulations. The regulations reflect the fundamental principle that all Americans with disabilities should have equal access and an equal right to participate fully in our society.
Requirements for existing swimming pools were originally extended on March 15, 2012, for 60 days. The department also published a notice of proposed rulemaking with a 15-day comment period on a possible extension in order to allow additional time to address misunderstandings regarding compliance with these ADA requirements. After reviewing the comments, the department determined that a further extension was necessary to provide additional time for compliance and to respond to concerns and misunderstandings about the standards. The department will also release a technical assistance document in the near future to assist pool owners with the requirements. More information on pool requirements can be found at www.ada.gov/pools_2010.htm .
Newly constructed or altered places of public accommodation, commercial facilities and state and local government facilities are required to comply with the ADA standards. Places of public accommodation in existing facilities are required to remove accessibility barriers to the extent it is readily achievable – meaning easy to accomplish without much difficulty or expense. State and local governments using existing facilities are required to ensure their programs, services and activities, when viewed in their entirety, are accessible.
These standards were adopted as part of the revised regulations for Title II and Title III of the ADA of 1990 and will make buildings and facilities accessible to more than 54 million Americans with disabilities. The standards can be found at www.ada.gov/2010ADAstandards_index.htm .
People interested in finding out more about the ADA or the 2010 ADA Standards for Accessible Design can call the toll-free ADA Information Line at 800-514-0301 (Voice) or 800-514-0383 (TTY), or access the ADA website at www.ada.gov .
Dreamboard Member Found Guilty in Louisiana for Participating in International Criminal Network Organized to Sexually Exploit ChildrenRead the Press Release
WASHINGTON – A Wisconsin man was found guilty yesterday in the Western District of Louisiana for his participation in an international criminal network, known as Dreamboard, dedicated to the sexual abuse of children and the creation and dissemination of graphic images and videos of child sexual abuse throughout the world, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney Stephanie Finley of the Western District of Louisiana and Director of U.S. Immigration and Customs Enforcement (ICE) John Morton.
John Wyss, aka “Bones,” 55, of Monroe, Wis., was found guilty of one count of engaging in a child exploitation enterprise, one count of conspiracy to advertise child pornography and one count of conspiracy to distribute child pornography. Evidence presented at trial revealed that Wyss had been an active member of Dreamboard, an online child pornography bulletin board, since January 2008 and had made numerous postings revealing that he had produced child pornography by capturing images of minors engaging in sexually explicit activity via webcam, including one video in which adult males were engaged in sexual intercourse with prepubescent girls.
Wyss was charged in an indictment unsealed on Aug. 3, 2011. The charges against Wyss are the result of Operation Delego, an ongoing investigation that was launched in December 2009 that targeted individuals around the world for their participation in Dreamboard. Dreamboard was a private, members-only, online bulletin board that was created and operated to promote pedophilia and encourage the sexual abuse of very young children, in an environment designed to avoid law enforcement detection.A total of 72 individuals, including Wyss, have been charged as a result of Operation Delego. To date, 55 of the 72 charged defendants have been arrested in the United States and abroad. Fourty-one individuals have pleaded guilty and Wyss was convicted after a four-day jury trial. Twenty-five of the 41 individuals who have pleaded guilty for their roles in the conspiracy have been sentenced to prison and have received sentences ranging between 15 and 37 years. Seventeen of the 72 charged individuals remain at large and are known only by their online identities. Efforts to identify and apprehend these individuals continue. Operation Delego represents the largest prosecution to date in the United States of individuals who participated in an online bulletin board conceived and operated for the sole purpose of promoting child sexual abuse, disseminating child pornography and evading law enforcement.
According to court documents and information presented at trial, Wyss and other Dreamboard members traded graphic images and videos of adults molesting children 12 years-old and under, often violently, and collectively created a massive private library of images of child sexual abuse. The international group prized and encouraged the creation of new images and videos of child sexual abuse – numerous Dreamboard members sexually abused children, produced images and videos of the abuse, and shared the images and videos with other members of Dreamboard.
“The jury found Mr. Wyss guilty of participating in a horrifying online community dedicated to the sexual exploitation of young children,” said Assistant Attorney General Breuer. “This community encouraged members throughout the world to produce images of extreme child sexual abuse and to share these images with one another. Mr. Wyss is the 42nd Dreamboard member to be convicted for his participation in the child exploitation enterprise. These convictions send a strong message to other child predators that they cannot hide their criminal acts on the internet.”
“This defendant, and people like him, who advertise, participate, distribute or exploit children to access child pornography work hard to evade law enforcement and disguise what they are doing,” said U.S. Attorney Finley. “Their sole purpose is to view children hurting for their own sexual satisfaction. We want them to know, that like Mr. Wyss, they will face serious consequences for their actions. Our office will continue to vigorously prosecute this type of criminal activity to the fullest extent of the law. We want the community to know that the U.S. Attorney’s Office and the Department of Justice, along with our federal, state and local partners, are committed to protecting children from these vile criminals.”
"Wyss and the other conspirators of the nightmare called Dreamboard mistakenly believed that they could commit heinous crimes against children and hide in the shadows,” said ICE Director Morton. “Criminals with this kind of depravity in mind should know that ICE's Homeland Security Investigations is ever vigilant. For every tactic taken to evade law enforcement, we will adapt our strategies to find them and prosecute them to the fullest extent of the law."
According to court documents and evidence presented at trial, Dreamboard members employed a variety of measures designed to conceal their criminal activity from detection by law enforcement. Members communicated using aliases or “screen names,” rather than their actual names. Links to child pornography posted on Dreamboard were required to be encrypted with a password that was shared only with other members. Members accessed the board via proxy servers, which routed Internet traffic through other computers so as to disguise a user’s actual location and prevent law enforcement from tracing Internet activity. Dreamboard members also encouraged the use of encryption programs on their computers, which password-protect computer files to prevent law enforcement from accessing them in the event of a court-authorized search.
Membership was tightly controlled by the administrators of the bulletin board, who required prospective members to upload child pornography portraying children 12 years of age or younger when applying for membership. Once they were given access, members were required continually to upload images of child sexual abuse in order to maintain membership. Members who failed to follow this rule would be expelled from the group.
According to court documents, Dreamboard members were divided into groups based on status and ranking. The highest level of membership was “Super VIP.”. Individuals who obtained that title had created new images of child pornography by molesting children and shared those images with the board administrators. The next level of membership was “Super VIP,” which was comprised of trusted members of the website. The next level after Super VIP was the VIP rank. Individuals in the lowest level of membership were called Members. Those in the lower ranks could only access a limited quantity of child pornography on the bulletin board. The higher the rank, the more material was available to the member. Individuals advanced to higher levels of membership by providing child abuse images that the individual had produced, providing a large number of images, or providing images that had never been seen before.
The bulletin board included rules of conduct, printed in English, Russian, Japanese and Spanish. The rules required prospective members to upload material depicting children under the age of 12 engaged in sexually explicit activity. Approved members were required to observe strict posting rules designed to encourage members to disseminate large quantities of child pornography, thwart efforts by law enforcement to identify members of the board, and encourage members to sexually abuse children in order to produce new material for the board. The board rules also required members to organize postings based on the type of content. One particular category was entitled “Super Hardcore.” The rules for that category described in graphic language that the only posts permitted were those involving adults having violent sexual intercourse with “very young kids” who were being subjected to both physical and sexual abuse and were obviously “in distress, and or crying.”
Operation Delego involved extensive international cooperation to identify and apprehend Dreamboard members abroad. Through coordination between ICE; the Department of Justice; Eurojust, the European Union’s Judicial Cooperation Unit; and dozens of law enforcement agencies throughout the world, 20 Dreamboard members across five continents and 14 countries have been arrested to date outside the United States, including two of the five lead administrators of the board. Those countries include Canada, Denmark, Ecuador, France, Germany, Guatemala, Hungary, Kenya, the Netherlands, the Philippines, Qatar, Serbia, Sweden and Switzerland. Numerous foreign investigations related to Operation Delego remain ongoing. The location and arrest of Dreamboard members abroad have led to the capture and investigation of other global targets.
Evidence obtained during the operation revealed that at least 38 children across the world were suffering sexual abuse at the hands of the members of the group. Efforts by federal, state, local and international law enforcement to locate and identify the victims of sexual abuse and exploitation by Dreamboard members are ongoing.
Operation Delego is a spinoff investigation from leads developed through “Operation Nest Egg,” the prosecution of another online group dedicated to the sharing and dissemination of child pornography. Operation Nest Egg was a spinoff investigation developed from leads related to another international investigation, “Operation Joint Hammer,” which targeted transnational rings of child pornography trafficking.
The case is being prosecuted by Assistant U.S. Attorney John “Luke” Walker of the Western District of Louisiana and Trial Attorneys Keith Becker and Anitha Ibrahim of the Child Exploitation and Obscenity Section (CEOS) of the Justice Department’s Criminal Division. The Criminal Division’s Office of International Affairs provided substantial assistance. The investigation was conducted by ICE-Homeland Security Investigations, the Child Exploitation Section of ICE’s Cyber Crime Center, CEOS, CEOS’s High Technology Investigative Unit and 35 ICE offices in the United States and 11 ICE attaches offices in 13 countries around the world, with assistance provided by numerous local and international law enforcement agencies across the United States and throughout the world.
The investigation was part of Operation Predator, a nationwide ICE initiative to identify, investigate and arrest those who prey on children, including human traffickers, international sex tourists, Internet pornographers and foreign-national predators whose crimes make them deportable.
ICE encourages the public to report suspected child predators and any suspicious activity through its toll-free hotline at 1-866-DHS-2ICE. This hotline is staffed around the clock by investigators.
Thursday 17 May 2012
Owner of Houston Health Care Company Convicted of Defrauding MedicareRead the Press Release
WASHINGTON – An owner of a Houston health care company was convicted yesterday by a jury in the Southern District of Texas in connection with a $750,000 Medicare fraud scheme, announced the Departments of Justice and Health and Human Services (HHS).
Philip Ware, 31, of Houston, was convicted of one count of conspiracy to commit health care fraud and four counts of substantive health care fraud.
The evidence presented at trial showed that Ware was an owner and operator of Preferred Plus Medical Supply. Preferred Plus maintained a valid Medicare provider number in order to submit Medicare claims for the costs of durable medical equipment (DME) and purported to provide orthotics and other DME to Medicare beneficiaries.
Preferred Plus submitted claims to Medicare for DME, including orthotic devices, which were medically unnecessary and/or not provided. Many of the orthotic devices were components of “arthritis kits” and purported to be for the treatment of arthritis-related conditions; however, the devices were neither medically necessary nor appropriate for such conditions. The arthritis kit generally contained a number of orthotic devices including braces for both sides of the body and related accessories such as heat pads. In total, from August 2008 through July 2009, Preferred Plus submitted approximately $750,000 in fraudulent claims to Medicare.
At sentencing, scheduled for Sept. 24, 2012, Ware faces a maximum sentence of 50 years in prison.
Ware’s co-owner of Preferred Plus, Simone Ball, previously pleaded guilty to one count of conspiracy to commit health care fraud. Ball’s sentencing is scheduled for Aug. 8, 2012.
The conviction was announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney for the Southern District of Texas Kenneth Magidson; Texas Attorney General Greg Abbott; Acting Special Agent-in-Charge Russell D. Robinson of the FBI’s Houston Field Office; and Special Agent-in-Charge Mike Fields of the Dallas Regional Office of HHS Office of Inspector General (HHS-OIG), Office of Investigations.
This case was prosecuted by Trial Attorneys David Maria, Ben O'Neil and Laura M.K. Cordova of the Fraud Section in the Justice Department’s Criminal Division. The case was brought as part of the Medicare Fraud Strike Force, supervised by the U.S. Attorney’s Office for the Southern District of Texas and the Criminal Division’s Fraud Section.
Since their inception in March 2007, Medicare Fraud Strike Force operations in nine districts have obtained indictments of 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, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.Justice Department Seeks to Shut DownSan Antonio Tax Return PreparersRead the Press Release
The United States has sued Pete Gutierrez and Jeanette Gutierrez, who do business as Fast Cash Refund Express and Fast Cash Refund Express Electronic Services, seeking to bar them and their companies from preparing any federal tax returns for others, the Justice Department announced today. In addition to the Gutierrezes, the civil injunction suit also named FCRE Inc., and Fast Cash Refund Express Electronic Tax Service LLC, as defendants.
According to the government complaint, the Gutierrezes, a married couple from San Antonio, use their companies to prepare federal tax returns for customers who claim false and exaggerated personal deductions, business deductions and education and energy tax credits in order to understate the customers’ tax liabilities unlawfully.
According to the complaint, of the tax returns prepared by the Gutierrezes through their companies for 2008 through 2010 that the Internal Revenue Service has audited, over 96 percent resulted in the customers owing additional taxes. The complaint alleges that the understatements of tax on these returns exceeded $2 million.
The government is also seeking a court order requiring the Gutierrezes to provide the government with a list of all persons for whom they have prepared federal tax returns since Jan. 1, 2007.
In the past 10 years, the Justice Department’s Tax Division has obtained injunctions against hundreds of unscrupulous return preparers and tax-fraud promoters. Information about these cases is available on the Justice Department website.
Related Documents:
Gutierrez Complaint
United States v. FCRE Inc., et al., Final Complaint for Permanent Injunction and Other Relief (PDF)Justice Department Releases Final Rule to Prevent, Detect and Respond to Prison RapeRead the Press Release
WASHINGTON - The Justice Department today released a final rule to prevent, detect and respond to sexual abuse in confinement facilities, in accordance with the Prison Rape Elimination Act of 2003 (PREA). This landmark rule sets national standards for four categories of facilities: adult prisons and jails, lockups, community confinement facilities and juvenile facilities. Today’s rule is the first-ever federal effort to set standards aimed at protecting inmates in all such facilities at the federal, state and local levels.
“The standards we establish today reflect the fact that sexual assault crimes committed within our correctional facilities can have devastating consequences – for individual victims and for communities far beyond our jails and prisons,” said Attorney General Eric Holder. “These standards are the result of a thoughtful and deliberative process – and represent a critical step forward in protecting the rights and safety of all Americans.”
The standards have three clear goals: to prevent, detect and respond to sexual abuse.
Prevent: To prevent sexual abuse, the standards require, among other things, that facilities:
- Develop and maintain a zero-tolerance policy regarding sexual abuse;
- Designate a PREA point person to coordinate compliance efforts;
- Screen inmates for risk of being sexually abused or sexually abusive, and use screening information to inform housing, bed, work, education and program assignments;
- Develop and document a staffing plan that provides for adequate levels of staffing and, where applicable, video monitoring;
- Train employees on their responsibilities in preventing, recognizing and responding to sexual abuse;
- Perform background checks on prospective employees and not hire abusers;
- Prevent juveniles from being housed with adult inmates or having unsupervised contact with adult inmates in common spaces;
- Ban cross-gender pat-down searches of female inmates in prisons and jails and of both male and female residents of juvenile facilities;
- Incorporate unique vulnerabilities of lesbian, gay, bisexual, transgender, intersex and gender nonconforming inmates into training and screening protocols;
- Enable inmates to shower, perform bodily functions and change clothing without improper viewing by staff of the opposite gender;
- Restrict the use of solitary confinement as a means of protecting vulnerable inmates; and
- Enter into or renew contracts only with outside entities that agree to comply with the standards.
Detect: To detect sexual abuse, the standards require, among other things, that facilities:
- Make inmates aware of facility policies and inform them of how to report sexual abuse;
- Provide multiple channels for inmates to report sexual abuse, including by contacting an outside entity, and allow inmates to report abuse anonymously upon request;
- Provide a method for staff and other third parties to report abuse on behalf of an inmate;
- Develop policies to prevent and detect any retaliation against those who report sexual abuse or cooperate with investigations; and
- Ensure effective communication about facility policies and how to report sexual abuse with inmates with disabilities and inmates who are limited English proficient;
Respond: To respond to sexual abuse, the standards require, among other things, that facilities:
- Provide timely and appropriate medical and mental health care to victims of sexual abuse;
- Where available, provide access to victim advocates from rape crisis centers for emotional support services related to sexual abuse;
- Establish an evidence protocol to preserve evidence following an incident and offer victims no-cost access to forensic medical examinations;
- Investigate all allegations of sexual abuse promptly and thoroughly, and deem allegations substantiated if supported by a preponderance of the evidence;
- Discipline staff and inmate assailants appropriately, with termination as the presumptive disciplinary sanction for staff who commit sexual abuse;
- Allow inmates a full and fair opportunity to file grievances regarding sexual abuse so as to preserve their ability to seek judicial redress after exhausting administrative remedies; and
- Maintain records of incidents of abuse and use those records to inform future prevention planning.
In addition, the standards require that each facility be audited every three years to assess compliance.
The standards set forth in the final rule are binding on the Federal Bureau of Prisons. With regard to states, those that do not comply with the standards are subject to a five percent reduction in funds they would otherwise receive for prison purposes from the department unless the governor certifies that five percent of such funds will be used to enable compliance in future years. No organization responsible for the accreditation of correctional facilities may receive any federal grants unless it adopts accreditation standards consistent with the standards set forth in the final rule.
The administration has also determined that PREA applies to all federal confinement facilities, including those operated by executive departments and agencies other than the Department of Justice. According to a presidential memorandum issued today, other federal departments with confinement facilities will work with the attorney general to issue rules or procedures that will satisfy the requirements of PREA, in recognition of the fact that each federal agency is accountable for the operations of its own facilities and, therefore, is best positioned to determine how to implement federal laws and rules that govern its operations and the safety of persons in its custody. Those agencies will work with the attorney general to propose, within 120 days of the date of the Presidential Memorandum, any rules or procedures necessary to satisfy the requirements of PREA, and to finalize any such rules or procedures within 240 days of their proposal.
Congress unanimously passed the Prison Rape Elimination Act in 2003 and created the National Prison Rape Elimination Commission to recommend a set of standards to the attorney general, after which it disbanded pursuant to the act. After receiving the commission’s recommendations in 2009, the attorney general convened an intradepartmental PREA working group that was tasked with reviewing the commission’s recommendations and collecting public feedback on the commission’s proposal. Last year the department published a draft rule for public comment.
The final rule reflects careful consideration of all public input, including over 1300 public comments on the proposed rule, as well as detailed analysis of anticipated benefits and costs, in light of PREA’s requirement that the standards not “impose substantial additional costs compared to the costs presently expended by federal, state and local prison authorities.” The department also is seeking additional comment on a standard that mandates specified staff-to-resident ratios in secure juvenile facilities.
To assist federal, state and local agencies in their compliance efforts, the department has funded the National Resource Center for the Elimination of Prison Rape to serve as a national resource for online and direct support, training, technical assistance, and research to assist adult and juvenile corrections, detention, and law enforcement professionals in combating sexual abuse in confinement. Focusing on areas such as prevention strategies, improved reporting and detection, investigation, prosecution, and victim-centered responses, it will identify promising programs and practices that have been implemented around the country and demonstrate models for keeping inmates safe from sexual abuse. The center will offer a full library, webinars and other online resources and will provide direct assistance through skilled and experienced training and technical assistance providers. The department also funds the National Center for Youth in Custody to assist facilities in addressing sexual safety for youth.
The department is also continuing grantmaking to support state and local demonstration projects aimed at combating sexual abuse in confinement facilities, through the Bureau of Justice Assistance. In addition, the National Institute of Corrections will develop electronic and web-based resource materials based on the standards set forth in the final rule.
The final rule is being sent to the Federal Register today for publication.
The rule may be read in its entirety at www.ojp.usdoj.gov/programs/pdfs/prea_final_rule.pdf.
The Executive Summary is available at www.ojp.usdoj.gov/programs/pdfs/prea_executive_summary.pdf.
The Regulatory Impact Assessment, which summarizes the costs and benefits of the rule, is available at www.ojp.usdoj.gov/programs/pdfs/prea_ria.pdf.
The Presidential Memorandum is available at www.whitehouse.gov/the-press-office/2012/05/17/presidential-memorandum-implementing-prison-rape-elimination-act.
For more information on the National Resource Center for the Elimination of Prison Rape, visit www.prearesourcecenter.org.
Justice Department Reaches Agreement with Wythe County, Virginia, on Bailout from the Voting Rights ActRead the Press Release
The Justice Department announced that it has reached an agreement with Wythe County, Va., that will allow for the county and its three political subdivisions, the Wythe County School District and the towns of Rural Retreat and Wytheville, to bail out from their status as “covered jurisdictions” under the special provisions of the Voting Rights Act, and thereby exempt these jurisdictions from the preclearance requirements of Section 5 of the Voting Rights Act. The agreement is in the form of a consent decree filed today in the U.S. District Court for the District of Columbia, and must be approved by the court.
Under Section 5 of the Voting Rights Act, certain covered jurisdictions, determined according to Section 4 of the act, are required to seek preclearance for any changes in voting qualifications, standards, practices or procedures from the U.S. District Court for the District of Columbia or from the U.S. Attorney General, prior to their implementation. Section 4 of the act provides that a covered jurisdiction may seek to “bail out,” or remove itself from such coverage, and therefore be exempted from the preclearance requirements, by seeking a declaratory judgment before a three-judge panel in U.S. District Court for the District of Columbia. A bailout judgment can be issued only if the court determines that the jurisdiction meets certain eligibility requirements for bailout contained in the statute, including a 10-year record of nondiscrimination in voting-related actions. The act also provides that the attorney general can consent to entry of a judgment of bailout only if, based upon investigation, the attorney general is satisfied that the jurisdiction meets the eligibility requirements.
Wythe County filed its bailout action in the U.S. District Court for the District of Columbia on May 3, 2012. Counsel for the county contacted the attorney general prior to filing the action, indicating that the county was interested in seeking a bailout. The county provided the Justice Department with substantial information, and the department conducted an investigation to determine the county’s eligibility. Based on that investigation, the department is satisfied that the county meets the Voting Rights Act’s requirements for bailout.
“After a thorough analysis of the information provided by the county and obtained through the department’s independent investigation, we believe the county has satisfied the bailout requirements,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The collaboration between the county and department assured the resolution of this matter in a manner envisioned by the drafters of the Voting Rights Act.”
The consent decree details the legal and factual basis for a bailout determination and, if approved by the court, will grant the county’s request. The court will retain jurisdiction of the action for 10 years and can reopen the action upon the motion of the attorney general or any aggrieved person alleging conduct by the county that would have originally precluded the county from bailing out if it had occurred during the 10-year period preceding entry of the consent decree.
Information about bailout, the Voting Rights Act, and other federal voting laws is available on the Department of Justice website at www.justice.gov/crt/voting/. Complaints may be reported to the Voting Section of the Justice Department’s Civil Rights Division at 1-800-253-3931.
Related Materials:
Joint Motion for Entry of Consent Judgment and Decree
Former U.S. Army Captain Pleads Guilty to Theft of Government Property at Camp Speicher, IraqRead the Press Release
WASHINGTON - A former captain in the U.S. Army pleaded guilty today to one count of theft of government property for stealing $48,000 from a safe at Camp Speicher, Iraq, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division.
Nicole E. Luvera, 29, of Newnan, Ga., pleaded guilty today before U.S. District Judge Amy Totenberg in Atlanta to a criminal information charging her with one count of theft of government property.
According to the court documents filed in this case, from July 2007 to September 2008, Luvera was the deputy disbursing officer on Camp Speicher in Iraq. Luvera was responsible for daily financial management and accounting of all money kept at Camp Speicher for the payment of obligations of the United States. In this capacity, Luvera had access to the vault and safes inside the vault in which all the money at Camp Speicher was kept. According to statements made at the plea hearing, Luvera admitted she knowingly and unlawfully stole and converted to her use and the use of others $8,000 not reflected in the official accounting record. Luvera also admitted that on a subsequent occasion, she devised an illegal mechanism to steal and convert another approximately $40,000 from the safe at Camp Speicher by fraudulently creating records to explain the absence of the money.
Luvera faces up to 10 years in prison and a fine of $250,000. In addition, Luvera has agreed to pay $48,000 in restitution to the U.S. Department of Defense. Sentencing is scheduled for Aug. 10, 2012.
The case is being prosecuted by Trial Attorney Mark W. Pletcher of the Justice Department’s Criminal Division and Trial Attorney Richard B. Evans of the Justice Department’s Public Integrity Section. The case is being investigated by the Army Criminal Investigation Division, the Defense Criminal Investigative Service, the Special Inspector General for Iraq Reconstruction and other members of the International Contract Corruption Task Force.
Defendants in Alabama Plead Guilty in Two Separate Stolen Identity Refund Fraud SchemesRead the Press Release
Three defendants in separate cases involving the use of stolen identities to file fraudulent tax returns have pleaded guilty in the Middle District of Alabama, the Justice Department and the Internal Revenue Service (IRS) announced today.
Crystal Sayles, of Montgomery County, Ala., pleaded guilty today to one count each of filing false claims, access device fraud, and aggravated identity theft. She also agreed to the forfeiture of a Mercedes Benz as part of her plea agreement. Sayles was indicted on 36 different counts on Jan. 19, 2012. According to her plea agreement, between January 2010 and July 2011, Sayles and others were involved with the filing of at least 482 fraudulent tax returns using stolen identities. These returns sought at least $2,181,879 in tax refunds. All of the returns had been filed through a tax preparation business called Simmons Financial, which Sayles opened in the name of another individual in order to conceal her own involvement. The indictment alleged that the refunds were often directed to prepaid debit cards and in the plea agreement, Sayles admitted to using a debit card loaded with a fraudulently obtained refund to receive cash.
In a separate case, Chiquanta Davis and Terrence Davis, both of Elmore County, Ala., each pleaded guilty to crimes related to another stolen identity refund fraud scheme. On May 11, 2012, Terrence Davis pleaded guilty to one count of theft of public funds, while on May 14, 2012, Chiquanta Davis pleaded guilty to one count each of conspiracy to defraud the government with respect to claims, theft of public funds, and aggravated identity theft. Chiquanta Davis also agreed to the forfeiture of a Cadillac Escalade as part of her plea agreement. Both had been charged in a superseding indictment filed on Jan. 19, 2012.
According to her plea agreement, Chiquanta Davis had been involved in stolen identity refund fraud since at least December 2009. In January 2010, she opened a bank account that received numerous fraudulently obtained tax refunds. A total of $1,458,600 in refunds were directed to this account in 2010, although many were intercepted and stopped by the IRS. Then in 2011, Chiquanta Davis assisted with the filing of numerous false tax returns using stolen identities. Between January and June of 2011, 192 false returns requesting $769,223 in refunds were filed from her home. These refunds were directed to various bank accounts, including her own account. According to his plea agreement, Terrence Davis’s bank accounts received over $100,000 in false tax refunds and he used a portion of the stolen proceeds for his own use.
Assistant Attorney General Kathryn Keneally of the Justice Department’s Tax Division thanked Special Agents of IRS - Criminal Investigation for investigating the cases, Tax Division Trial Attorneys Jason H. Poole and Michael Boteler, who prosecuted the cases, and George L. Beck, Jr., U.S. Attorney for the Middle District of Alabama, and his entire office for their assistance.
Additional information about the Tax Division and its enforcement efforts may be found at www.justice.gov/tax.
Co-Owner of Detroit-Area Physical Therapy Company Sentenced to 48 Months for Medicare Fraud SchemeRead the Press Release
The co-owner of a Detroit-area physical therapy company was sentenced today to 48 months in prison for her 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).
Fatima Hassan, 44, was sentenced by U.S. District Judge Avern Cohn in the Eastern District of Michigan. In addition to her prison term, Hassan was sentenced to three years of supervised release and ordered to pay $ 855,484 in restitution.
Hassan pleaded guilty on Sept. 15, 2011, to one count of conspiracy to commit health care fraud. According to the plea documents, i n 2005, Hassan incorporated a company known as Jos Campau Physical Therapy, which she owned with a co-defendant. Jos Campau Physical Therapy did not have a Medicare provider number and was not entitled to bill Medicare for therapy services.
According to court documents, Hassan 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.
Hassan and the co-owner of Jos Campau Physical Therapy 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. Additionally, Hassan’s co-owner, a physical therapist, falsified patient evaluation forms and fictitious patient notes for physical therapy services that were never rendered.
Hassan and the co-owner of Jos Campau Physical Therapy 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. Hassan and her co-owner split the profits from the sale of the falsified files.
Hassan admitted that, between approximately June 2005 and May 2007, she and her co-conspirators at Jos Campau Physical Therapy submitted or caused the submission of approximately $1.9 million in fraudulent claims to the Medicare program for physical and occupational therapy services that were never rendered.
Hassan’s co-owner, Victor Jayasundera, pleaded guilty on Jan. 18, 2012, for his role in the scheme and is scheduled to be sentenced on May 31, 2012.
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 June 11, 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, with assistance from Trial Attorney Niall M. O’Donnell. It was investigated by the FBI and HHS-OIG, and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Michigan.
Since 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