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Thursday 5 January 2012
Man Pleads Guilty in $3.4 Million Las Vegas Mortgage Fraud SchemeRead the Press Release
WASHINGTON – The secretary of Las Vegas-based CPT Real Estate Investments pleaded guilty yesterday for his role in a $3.4 million mortgage fraud scheme involving victims in the Las Vegas area, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney Daniel G. Bodgen for the District of Nevada.
Hugo Patrick Coutelin, 62, a resident of Santa Fe, N.M., pleaded guilty before U.S. District Judge Kent J. Dawson in the District of Nevada to conspiring to commit wire fraud, mail fraud and bank fraud. The conspiracy charge carries a maximum penalty of 30 years in prison. Coutelin is scheduled to be sentenced on April 18, 2012.
Coutelin was charged in an indictment on June 16, 2010, along with Michael Perry, 59, director of CPT; Jeff Thomas, 32, president of CPT; and Linda Marie Kot, 58, a real estate agent.
According to court documents, from April 2006 through November 2006, Coutelin and his co-defendants conspired to execute a fraudulent scheme in which they recruited and caused to be recruited straw buyers and bailout buyers, acted as straw buyers themselves and falsified mortgage loan applications with federally insured financial institutions. Coutelin caused false information to be included on straw buyers’ loan applications regarding the borrowers’ place of employment, income, assets and intent to occupy the properties so that straw buyers would qualify for loans for which they would not otherwise qualify. Coutelin knew that false information was included on straw buyers’ loan applications and also knew that material facts were concealed from the lender.
According to the indictment, Coutelin caused material misstatements to be made on loan applications for seven properties, leading to the disbursement of loans in the amount of approximately $3.4 million.
Coutelin was arrested on June 17, 2010, in New Mexico and was released pending trial.
On Dec. 28, 2011, Perry pleaded guilty to one count of conspiracy to commit wire fraud, mail fraud and bank fraud, and is scheduled to be sentenced on March 28, 2012. On Feb. 1, 2011, Thomas pleaded guilty to one count of bank fraud, and is scheduled to be sentenced on Feb. 22, 2012. Kot is scheduled to begin her trial on Feb. 6, 2012.
An indictment is a formal accusation of criminal conduct, not evidence. A defendant is presumed innocent unless and until convicted.
This continuing investigation is being conducted by the FBI. This case is being prosecuted by Fred Medick of the Fraud Section in the Justice Department’s Criminal Division and Matt Klecka of the Asset Forfeiture and Money Laundering Section in the Justice Department’s Criminal Division.
Home Health Agency Owner Pleads Guilty in Connection with Detroit Fraud SchemeRead the Press Release
WASHINGTON - Detroit-area resident Tausif Rahman pleaded guilty today for his role in organizing a $14 million Detroit-area home health care fraud and money laundering scheme, announced the Department of Justice, the FBI and the Department of Health and Human Services (HHS).
Rahman, 37, pleaded guilty today to one count of conspiracy to commit health care fraud and one count of money laundering before U.S. District Judge Gerald E. Rosen of the Eastern District of Michigan. At sentencing on April 30, 2012, Rahman faces a maximum penalty of 30 years in prison and a $750,000 fine.
According to court documents, beginning in July 2008, Rahman and his co-conspirators acquired ownership and control of three Detroit-area home health agencies: Physicians Choice Home Health Care LLC, First Care Home Health Care LLC and Quantum Home Care Inc. Rahman admitted that these home health agencies billed Medicare for visits that never occurred. Between July 2008 and September 2011, Rahman and his co-conspirators submitted or caused the submission of more than $14 million in fraudulent home health claims to the Medicare program by Physicians Choice, First Care, Quantum and a fourth home health agency owned by co-conspirators: Moonlite Home Care Inc. Medicare paid more than $13.4 million to Physicians Choice, First Care and Quantum, the companies that Rahman beneficially owned in whole or in part.
Rahman admitted that he paid and directed the payment of kickbacks to doctors for home health care services that were never rendered. He also directed the payment of non-licensed individuals who represented themselves as doctors to Medicare beneficiaries. In addition, Rahman admitted to paying and directing various medical professionals, including nurses, physical therapists and physical therapy assistants, to create fictitious patient files to document purported home health services that were never rendered.
Rahman also admitted that he paid and directed the payment of kickbacks to beneficiary recruiters who obtained Medicare beneficiaries’ information needed to bill Medicare for home health services, including physical therapy and skilled nursing, which were never rendered. The Medicare beneficiaries sometimes pre-signed forms and visit sheets that were later falsified to indicate that they received home health services that they had never received. Other times, the Medicare beneficiaries’ signatures were forged on forms and visit sheets to indicate that they received home health services that they never received.
Additionally, Rahman admitted that he incorporated a shell company known as Geo Rehab LLC for the purpose of laundering the proceeds of health care fraud. More than 97 percent of the Medicare payments received by Physicians Choice were transferred into Geo Rehab’s account, over which Rahman had sole control. Rahman admitted that his co-conspirators similarly created shell companies for the purpose of receiving the proceeds of health care fraud from Rahman’s shell company.
Today’s guilty plea was announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney for the Eastern District of Michigan Barbara L. McQuade; Special Agent in Charge Andrew G. Arena of the FBI’s Detroit Field Office; and Special Agent in Charge Lamont Pugh III of the HHS Office of Inspector General’s (OIG) Chicago Regional Office.
This case was prosecuted by Trial Attorney Catherine K. Dick of the Criminal Division’s Fraud Section. It was investigated by the FBI and HHS-OIG, and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Michigan.
Since their inception in March 2007, the strike force operations in nine districts have charged more than 1,140 individuals who collectively have falsely billed the Medicare program for more than $2.9 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.
Florida Man Pleads Guilty to Transportation of Child PornographyRead the Press Release
WASHINGTON – A Largo, Fla., resident pleaded guilty today in the Middle District of Florida to one count of transportation of child pornography, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division, U.S. Attorney for the Middle District of Florida Robert E. O’Neill and Special Agent in Charge Steven E. Ibison of the FBI’s Tampa Field Office.
James Charles Cafferty, 45, pleaded guilty before U.S. Magistrate Judge Thomas G. Wilson.
According to court documents and proceedings, Cafferty, who was a special agent for the Department of State’s Bureau of Diplomatic Security, purchased memberships in several child pornography websites. A subsequent search warrant executed at Cafferty’s home revealed hard drives containing thousands of child pornography files. Cafferty admitted during an interview that he had shipped these hard drives from London to his home in Largo.
Cafferty faces a mandatory minimum sentence of five years in prison and a maximum sentence of 20 years in prison, as well as the possibility of lifetime supervised release. Cafferty also faces a fine of $250,000.
This case was investigated by the FBI, the Department of State’s Bureau of Diplomatic Security and the Largo Police Department. The case is being prosecuted by Assistant U.S. Attorney Colleen Murphy Davis for the Middle District of Florida and Trial Attorney Andrew M. McCormack of the Child Exploitation and Obscenity Section (CEOS) in the Justice Department’s Criminal Division.
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 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.
Delaware Man Sentenced to 30 Years in Prison<br /> for Production and Transportation of Child PornographyRead the Press Release
WASHINGTON – A Wilmington, Del., man was sentenced yesterday to 30 years in prison for production and transportation of child pornography, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney Charles M. Oberly III for the District of Delaware and John P. Kelleghan, Special Agent in Charge of U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI) in Philadelphia.
Leonard Wasylyk, 49, was also sentenced to lifetime supervised release and will be required to register as a sex offender in any jurisdiction in which he lives, works or attends school. Wasylyk pleaded guilty in September 2011.
According to statements made and documents filed in court, an undercover agent from the Wilmington office of the Department of Homeland Security identified Wasylyk during an online undercover investigation into a private peer-to-peer network being used to trade images of child pornography. After downloading computer files containing child pornography from Wasylyk’s home computer, federal agents arrested him and executed a search warrant at his residence on Dec. 9, 2010. Law enforcement agents recovered a computer from Wasylyk’s bedroom that contained more than 60,000 images and more than 700 movies of child pornography, mostly featuring prepubescent and teenage boys engaged in sexual acts with each other or with adult males. Data recovered from Wasylyk’s computer revealed that he established an elaborate private online network of more than 150 child sex offenders with whom he traded images of child pornography and bragged about his multiple molestations of victims.
During the forensic review of Wasylyk’s computer, agents discovered more than 60 images of a young boy engaged in sexually explicit conduct with Wasylyk in the bedroom of his Wilmington residence. Agents subsequently identified the child and located him. The child reported that when the child was 12 and 13 years old, Wasylyk sexually abused him and produced the sexually explicit images while babysitting him. The forensic analysis also revealed that Wasylyk distributed the sexually explicit images of the child that he produced to other child sex offenders while bragging about having molested the boy.
The investigation revealed that Wasylyk also sexually abused, or assisted another sex offender in abusing, at least three other young boys. In March of 2009, Wasylyk was placed on the Pennsylvania Statewide Central Register of Child Abuse stemming from his abuse of two young boys he babysat in January 2009. Forensic data from Wasylyk’s seized computer revealed that a digital camera seized from Wasylyk’s bedroom had been used, in May 2004, to photograph another prepubescent child engaged in sexually explicit conduct with another child sex offender.
This case is being investigated by the ICE-HSI. This case is being prosecuted by Assistant U.S. Attorney Edward J. McAndrew of the District of Delaware and Trial Attorney Thomas Franzinger of the Child Exploitation and Obscenity Section in the Justice Department’s Criminal Division.
Wednesday 4 January 2012
Justice Department Settles with University of California San Diego Medical CenterRead the Press Release
WASHINGTON – The Justice Department today reached agreement with the University of California San Diego Medical Center, resolving a complaint filed on Dec. 6, 2011, alleging that the medical center failed to comply with proper employment eligibility verification processes for non-citizens who are authorized to work in the United States.
Specifically, the department’s complaint alleged that the medical center subjected newly hired non-U.S. citizens to excessive demands for documents issued by the Department of Homeland Security in order to verify their employment eligibility, but did not require the same of U.S. citizens. T he Immigration and Nationality Act’s (INA) anti-discrimination provision prohibits employers from placing unfair documentary burdens on work-authorized employees during the hiring and employment eligibility verification process based on their citizenship status or national origin.
The medical center has taken appropriate action to ensure compliance with INA’s anti-discrimination provision and has received Department of Homeland Security/U.S. Immigration & Customs Enforcement (ICE) training on the proper use of work authorization documents.
Under the terms of the settlement agreement, the medical center agrees to implement new employment eligibility verification policies and procedures that treat all employees equally regardless of citizenship status. In addition, the medical center has agreed to pay a civil penalty of $115,000, conduct supplemental training of its human resources personnel on their responsibilities to avoid discrimination in the employment eligibility verification process and work with the department to ensure compliance with proper employment eligibility verification processes across all University of California campuses, medical centers and facilities.
“Federal law protects people who are authorized to work in the United States from facing barriers and discrimination when they are seeking employment,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “I commend medical center officials on their cooperation in working with us to reach this resolution. We look forward to working with the University of California to ensure best practices in the employment eligibility verification process across the University of California system.”
The Civil Rights Division’s Office of Special Counsel (OSC) for Immigration-Related Unfair Employment Practices is responsible for enforcing the anti-discrimination provision of the INA, which protects work authorized individuals against discrimination in hiring, firing and recruitment or referral for a fee on the basis of citizenship status and national origin. The INA also protects all work-authorized individuals from discrimination in the employment eligibility verification process and from retaliation.
The United States was represented in this matter by Luz V. Lopez-Ortiz and Ronald Lee, OSC Trial Attorneys.
For more information about protections against employment discrimination under federal immigration law, call OSC’s worker hotline at 1-800-255-7688 (1-800-237-2515, TDD for hearing impaired), OSC’s employer hotline at 1-800-255-8155 (1-800-237-2515, TDD for hearing impaired), or 202-616-5594; email [email protected] ; or visit OSC’s website at www.justice.gov/crt/about/osc .
Former Employee of Government Contractor Pleads Guilty<br /> in Oklahoma to Child Pornography ChargeRead the Press Release
WASHINGTON – A former employee of a government contractor pleaded guilty today to a child exploitation charge under the Military Extraterritorial Jurisdiction Act (MEJA), announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney for the Northern District of Oklahoma Thomas Scott Woodward.
Keith Strimple, 57, of Tulsa, Okla., pleaded guilty before U.S. District Judge Gregory Frizzell in the Northern District of Oklahoma to one count of attempted possession of a visual depiction of a minor engaging in sexually explicit conduct.
According to court documents and proceedings, Strimple worked as an employee of a government contractor between April and September 2007 at a U.S. military facility at Camp Fallujah, Iraq. During that time period, Strimple admitted that he searched for and downloaded videos of minors that he believed to be as young as 12 years old engaging in sexually explicit conduct and downloaded such images using the contractor’s computer system.
MEJA gives U.S. courts jurisdiction to prosecute crimes committed outside the United States by, among others, employees of a government contractor whose work supports a military mission.
At sentencing, scheduled for April 11, 2012, Strimple faces a maximum penalty of 10 years in prison.
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), 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 investigated by the Naval Criminal Investigative Service and CEOS’ High Tech Investigations Unit, with assistance from the FBI in Tulsa.
The case is being prosecuted by CEOS Trial Attorney Keith Becker and Assistant U.S. Attorney Matthew Cyran of the Northern District of Oklahoma.
Tuesday 3 January 2012
US Files Complaint Against National Chain of Hospice Providers Alleging False Claims on the Medicare ProgramRead the Press Release
WASHINGTON – The United States has intervened and filed a complaint in a whistleblower suit against AseraCare Hospice, the Justice Department announced today. Golden Gate Ancillary LLC, dba AseraCare Hospice, is a for-profit business with approximately 65 hospice providers in 19 states, including Alabama, Georgia, Pennsylvania and Wisconsin. In its complaint, filed in U.S. District Court for the Northern District of Alabama, the government alleges that AseraCare violated the False Claims Act when it misspent millions of taxpayer dollars intended for Medicare recipients who have a prognosis of six months or less to live and need hospice care.
While elderly patients may qualify for a variety of other medical services paid by Medicare, for-profit hospice companies like AseraCare are entitled to receive Medicare dollars only for Medicare recipients who are terminally ill. When a business admits a Medicare recipient to hospice care, that individual is no longer entitled to receive services that would help to cure his or her illness. Instead, the individual receives what is called palliative care, or care that is aimed at relieving pain, symptoms or stress of terminal illness, which includes a comprehensive set of medical, social, psychological, emotional and spiritual services. In this lawsuit, the government contends that AseraCare Hospice knowingly submitted false claims to Medicare for hospice care for patients who were not terminally ill.
“Medicare benefits, including the hospice benefits, are intended only for those individuals who are appropriately qualified,” said Joyce White Vance, U.S. Attorney for the Northern District of Alabama. “We must protect the public welfare and tax-funded benefits programs.”
The whistleblower suit was originally filed by Dawn Richardson and Marsha Brown, former employees of AseraCare Hospice, and named United States ex rel. Richardson and Brown v. Golden Gate National Senior Care LLC dba Golden Living et al., No. 2:09-cv-00627 (N.D. Ala.). The False Claims Act allows private citizens with knowledge of fraud to file whistleblower suits on behalf of the United States and to share in any recovery. If the United States intervenes in an action and proves that a defendant has knowingly submitted false claims, it is entitled to recover three times the damage that resulted and a penalty of $5,500 to $11,000 per claim.
“Congress intended that the hospice care benefit be used during the last several months of an individual’s life,” said Daniel R. Levinson, Inspector General of the Department of Health and Human Services. “We will continue to recover misspent Medicare funds from companies that abuse the hospice benefit."
This matter was investigated by the Commercial Litigation Branch of the Justice Department’s Civil Division, the U.S. Attorney’s Office for the Northern District of Alabama, the U.S. Attorney’s Office for the Eastern District of Wisconsin and the Department of Health and Human Services’ Office of Inspector General.
Maersk Line to Pay Us $31.9 Million to Resolve False Claims Allegations for Inflated Shipping Costs to Military in Afghanistan and IraqRead the Press Release
WASHINGTON– Maersk Line Limited has agreed to pay the government $31.9 million to resolve allegations that it submitted false claims to the United States in connection with contracts to transport cargo in shipping containers to support U.S. troops in Afghanistan and Iraq, the Justice Department announced today. The government alleges that Maersk, a wholly-owned American subsidiary of Denmark-based A.P. Moller Maersk, knowingly overcharged the Department of Defense to transport thousands of containers from ports to inland delivery destinations in Iraq and Afghanistan.
The government contends that Maersk inflated its invoices in various ways. For example, Maersk allegedly billed in excess of the contractual rate to maintain the operation of refrigerated containers holding perishable cargo at a port in Karachi, Pakistan, and at U.S. military bases in Afghanistan; allegedly billed excessive detention charges (or late fees) by failing to account for cargo transit times and a contractual grace period; allegedly billed for container delivery delays improperly attributed to the U.S. government; allegedly billed for container GPS-tracking and security services that were not provided or only partially provided; and allegedly failed to credit the government for rebates of container storage fees received by Maersk’s subcontractor at a Kuwaiti port.
“Our men and women in uniform overseas deserve the highest level of support provided by fair and honest contractors,” said Tony West, Assistant Attorney General for the Civil Division of the Department of Justice. “As the Justice Department’s continuing efforts to fight procurement fraud demonstrate, those who put profits over the welfare of members of our military will pay a hefty price.”
The settlement resolves allegations against Maersk that were filed in San Francisco by Jerry H. Brown II, a former industry insider. The lawsuit was filed under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private individuals called “relators” to bring lawsuits on behalf of the United States and receive a portion of the proceeds of a settlement or judgment awarded against a defendant. The relator in this action will receive $3.6 million as his statutory share of the proceeds of this settlement. In 2009, the United States resolved the relator’s allegations against shipping company APL Limited and its parent company for $26.3 million.
“Contractors that submit false claims for monies they are not owed cost the government millions of dollars every year,” said Melinda Haag, U.S. Attorney for the Northern District of California. “This settlement should send a strong signal that the government is committed to safeguarding taxpayer funds by ensuring that contractors operate ethically and responsibly.”
The settlement with Maersk was the result of a coordinated effort among the Commercial Litigation Branch of the Justice Department’s Civil Division; the U.S. Attorney’s Office for the Northern District of California; the Defense Criminal Investigative Service of the Department of Defense; the Army’s Criminal Investigation Command; and the Defense Contract Audit Agency of the Department of Defense.
“Aggressively investigating any allegation of fraudulent practices, such as those taken by Maersk Line Limited in order to profit at the expense of the safety and welfare of America’s Warfighters – especially those serving in dangerous locations such as Iraq and Afghanistan – as well as the security of the United States, is the Department of Defense Inspector General’s and the Defense Criminal Investigative Service’s highest priority,” said James Burch, Deputy Inspector General for Investigations, Department of Defense Office of Inspector General. “The settlement with Maersk was only made possible through our partnership with the Army Criminal Investigation Command and the hard work by attorneys from the Department of Justice and auditors from the Defense Contract Audit Agency.”
“We are fully committed to tirelessly pursuing all those who knowingly submit false claims with respect to military contracts, particularly while our nation’s finest are at war,” said Major General David Quantock, the Provost Marshal General of the U.S. Army and Commanding General of the U.S. Army Criminal Investigation Command. “Our commitment is to ensure taxpayer dollars are not wasted or stolen. During the last 10 years alone, Army CID Special Agents have been instrumental in recovering and returning $2.1 billion dollars to the Treasury and the Army from fraudulent practices involving contractors.”
Former Department of Defense Employee Sentenced to 30 Months in Prison for Submitting False Travel Claims Totaling Nearly $500,000Read the Press Release
WASHINGTON – A former civilian employee of the Armed Forces Institute of Pathology (AFIP), a component of the Department of Defense, was sentenced today to 30 months in prison for making more than $485,000 in false travel claims using the defense travel system, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division.
John R. Brock, 52, of Crofton, Md., was sentenced by U.S. District Judge Robert L. Wilkins in the District of Columbia. In addition to his prison term, Brock was sentenced to three years of supervised release, ordered to pay $485,535 in restitution and ordered to forfeit three sail boats and two residential properties.
Brock pleaded guilty in October 2011 to a criminal information charging him with one count of making a false claim against the United States. According to court documents, Brock worked as a budget analyst within the Resources Management Department of the AFIP from 2007 through 2011. As part of his guilty plea, Brock admitted that in 2008 he used the profile of a former AFIP employee to submit a false travel voucher for $5,525 in expenses that were never incurred. Brock also admitted that from September 2008 through April 2011, he submitted 99 false travel vouchers through the defense travel system totaling $485,535.
This case was prosecuted by Trial Attorney Richard B. Evans of the Criminal Division’s Public Integrity Section and was investigated by the U.S. Army Criminal Investigation Command, the Defense Criminal Investigative Service and the FBI’s Washington Field Office.
Former Assisted Living Facility Chain CEO Pleads Guilty to Tax Fraud ConspiracyRead the Press Release
WASHINGTON - Ronald E. Burrell, former chief executive officer of Caremerica Inc., pleaded guilty today to conspiring to defraud the Internal Revenue Service (IRS), the Justice Department announced. His sentencing hearing is scheduled for April 9, 2012. Burrell is a resident of Wilmington, N.C.
According to the charging document, Burrell co-owned and operated a chain of assisted living facilities (ALFs) in North and South Carolina. The ALFs were managed by Caremerica Inc., a company based in Leland, N.C., that Burrell also partly owned and operated. Burrell was the president and CEO for Caremerica, the Caremerica ALFs and other related companies. As a corporate officer, Burrell was responsible for ensuring that the Caremerica companies collected, reported and paid over federal employment taxes to the IRS. However, with Burrell at the helm, the Caremerica companies accrued more than $4.5 million in employment tax liabilities between approximately 2003 and 2006. Among other things, Burrell filed, or caused to be filed, false IRS forms that reported full payment of the employment taxes due, when in fact only a small fraction of the taxes, or none at all, were paid.
The charging document further alleges that in 2003, Burrell acquired partial ownership of Partners Pharmacy Services Inc. (PPS), which provided prescription drug and related services to the Caremerica ALFs. In April 2005, Burrell sold PPS to a subsidiary of Omnicare Inc. At the closing, Burrell received $1.6 million. The PPS sale proceeds were disbursed at a time when the IRS was attempting to collect unpaid employment taxes from the Caremerica companies, as well as from Burrell personally. To prevent the IRS from discovering the PPS proceeds, Burrell took active steps to conceal them.
At his hearing before Judge James C. Fox, sitting in Wilmington, Burrell agreed that he should be ordered to pay restitution of $4.8 million.
This case was investigated by IRS-Criminal Investigation. It is being prosecuted by Trial Attorneys Adam Hulbig, Todd Ellinwood and Kevin Lombardi of the Justice Department’s Tax Division.
Assistant Attorney General Laurie Robinson Announces Departure from Office of Justice ProgramsRead the Press Release
The Assistant Attorney General for the Office of Justice Programs (OJP), Laurie Robinson, announced today that she would be leaving her position at the end of February. Assistant Attorney General Robinson was confirmed by the Senate in November, 2009. She previously served for nearly seven years as assistant a general for OJP during the 1990s, making her the longest-serving head in the agency's 44-year history.
Principal Deputy Assistant Attorney General Mary Lou Leary will serve as acting assistant attorney general following Robinson's departure.
“Laurie Robinson has helped transform OJP’s role in the criminal and juvenile justice field, bringing scientific rigor, a true sense of partnership, transparency, and accountability to the agency,” said Attorney General Eric Holder. “I am proud of her service to OJP’s constituents, the Department of Justice and the Obama Administration and personally grateful for her friendship and her many contributions to ensuring true justice for all Americans. The United States is a safer and fairer nation due to her efforts.”
“One of the reasons I can think about leaving now is that we have made substantial progress towards goals I set in 2009,” Assistant Attorney General Robinson said. “With the attorney general's support, we have made real progress in building strong partnerships with law enforcement and other parts of the state, local and tribal criminal and juvenile justice field. We have put science front and center and focused on evidence-based approaches. And we've made it a priority to ensure OJP's grant process is fair, accessible to our stakeholders, and accountable to Congress and the public in terms of managing scarce federal dollars.”
Science has been a primary focus during Robinson's tenure. In 2009 she launched an Evidence Integration Initiative (E2I) to better integrate evidence into OJP's programs and policy decisions and improve translation of evidence into practice. Assistant Attorney General Robinson was responsible, as part of E2I, for OJP's launching last June a “what works” clearinghouse, crimesolutions.gov, and the appointment of a Science Advisory Board for OJP, chaired by leading criminologist Alfred Blumstein. Congress has also provided support for OJP's evidence-based programs, including a 2 percent set-aside in OJP's 2012 appropriation for research and statistics spending.
Under Assistant Attorney General Robinson's leadership, OJP has also spearheaded new initiatives in a number of important areas, emphasizing innovative partnerships with the agency’s federal, state, local and tribal stakeholders. In law enforcement, OJP’s Bureau of Justice Assistance created the attorney general’s VALOR program, which provides critical nationwide training to prevent and respond to the ambush-style violence against law enforcement officers. In juvenile justice, Assistant Attorney General Robinson played a leading role in developing the White House’s National Forum on Youth Violence Prevention, the attorney general’s Defending Childhood program, and along with the Department of Education, the Supportive School Discipline Initiative. In corrections, she supported the creation of the attorney general’s federal interagency Reentry Council, a cabinet-level effort to ensure those returning from prison become productive, law-abiding citizens. For crime victims, OJP’s Office for Victims of Crime is spearheading the Vision 21 Initiative to expand the vision and impact of the victim services field. In consultation with tribal leaders, OJP also partnered with the Office of Community Oriented Policing Services and the Office on Violence Against Women to streamline the grant application and awards process for American Indian and Alaska native communities, creating a single application for multiple purpose areas and facilitating comprehensive planning.
In the area of grant management, Assistant Attorney General Robinson made improving oversight in this area a top priority, with a focus on transparency and rigorous supervision of the grants process. She required for the first time, for example, that all OJP funding decisions be posted on the agency's website, oversaw the introduction of a new high risk grantee monitoring program, and drove a focus on competition in the grants award process. During her tenure, OJP was able to ensure that 100 percent of its $2.7 billion under the Recovery Act was obligated in a timely manner without the addition of any new staff.
Assistant Attorney General Robinson has spent her professional career as a leader in the criminal justice field. Immediately prior to coming back to the Department of Justice, she was director of the Master of Science program at the University of Pennsylvania's Department of Criminology.
Additional information about the Office of Justice Programs is available at www.ojp.gov .
Friday 30 December 2011
Justice Department Settles Allegations of Citizenship Status Discrimination and Retaliation Against Georgia Rug ManufacturerRead the Press Release
WASHINGTON – The Justice Department announced a settlement today with Garland Sales Inc., a Georgia rug manufacturer, resolving allegations that it engaged in discrimination by imposing unnecessary documentary requirements on individuals of Hispanic origin when establishing their eligibility to work in the United States, and that it retaliated against a worker for protesting his discriminatory treatment. According to the settlement, Garland has agreed to pay $10,000 in back pay and civil penalties, and to undergo training on proper employment eligibility verification practices.
In its complaint, the department alleged that the charging party, a naturalized U.S. citizen of Hispanic descent, applied for a job with Garland in May 2009. At the time of hire, he presented his unexpired driver’s license and an unrestricted Social Security card—a combination of documents sufficient to prove his identity and his authorization to work in the United States. The complaint alleged that Garland demanded that the he provide his “green card,” even though U.S. citizens do not have green cards. After Garland made further requests for documents, the worker objected to the company’s demands, and Garland then rescinded the job offer. The worker, along with another individual who was denied employment with Garland when the company rejected the individual’s valid documentation, will receive full back pay out of the $10,000 settlement.
The department’s complaint also alleged that Garland required newly hired non-U.S. citizens and foreign-born U.S. citizens to present specific and additional work authorization documents beyond those required by federal law. The Immigration and Nationality Act (INA) requires employers to treat all authorized workers in the same manner during the hiring process, regardless of their national origin or citizenship status.
“Employers may not treat authorized workers differently during the hiring process based on their national origin or citizenship status,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “It is also illegal when employers take action against workers for asserting their federally protected rights, and that type of behavior will be vigorously investigated and prosecuted.”
The Office of Special Counsel (OSC) for Immigration Related Unfair Employment Practices is responsible for enforcing the anti-discrimination provision of the INA, which protects work authorized individuals from employment discrimination on the basis of citizenship status or national origin discrimination, including discrimination in hiring and the employment eligibility verification (Form I-9) process. For more information about protections against employment discrimination under the immigration law, 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), or 202-616-5594; [email protected], or visit OSC’s website at www.justice.gov/crt/about/osc
CDR Financial Products and Its Owner Plead Guilty to Bid-Rigging and Fraud Conspiracies Related to Municipal Bond InvestmentsRead the Press Release
A Beverly Hills, Calif.,-based financial products and services firm, and its founder and owner pleaded guilty today in the Southern District of New York for their participation in bid-rigging and fraud conspiracies related to contracts for the investment of municipal bond proceeds and other related municipal finance contracts, the Department of Justice announced.
Rubin/Chambers, Dunhill Insurance Services, also known as CDR Financial Products, and David Rubin, CDR founder and owner, pleaded guilty before U.S. District Judge Victor Marrero in the Southern District of New York. Rubin and CDR, along with Zevi Wolmark, also known as Stewart Wolmark, the former chief financial officer and managing director of CDR, and Evan Andrew Zarefsky, a vice president of CDR, were indicted on Oct. 29, 2009. The trial for Wolmark and Zarefsky is scheduled to begin on Jan. 3, 2012, in the Southern District of New York.
Rubin and CDR each pleaded guilty to participating in separate bid-rigging and fraud conspiracies with various financial institutions and insurance companies and their representatives. These institutions and companies, or “providers,” offered a type of contract, known as an investment agreement, to state, county and local governments and agencies throughout the United States. The public entities were seeking to invest money from a variety of sources, primarily the proceeds of municipal bonds that they had issued to raise money for, among other things, public projects. Rubin and CDR also pleaded guilty to one count of wire fraud in connection with those schemes.
“Mr. Rubin and his company engaged in fraudulent and anticompetitive conduct that harmed municipalities and other public entities,” said Sharis A. Pozen, Acting Assistant Attorney General in charge of the Justice Department’s Antitrust Division. “Today’s guilty pleas are an important development in our continued efforts to hold accountable those who violate the antitrust laws and subvert the competitive process in our financial markets.”
According to court documents, CDR was hired by public entities that issue municipal bonds to act as their broker and conduct what was supposed to be a competitive bidding process for contracts for the investment of municipal bond proceeds. Competitive bidding for those contracts is the subject of regulations issued by the U.S. Department of the Treasury and is related to the tax-exempt status of the bonds.
During his plea hearing, Rubin admitted that, from 1998 until 2006, he and other co-conspirators supplied information to providers to help them win bids, solicited intentionally losing bids, and signed certifications that contained false statements regarding whether the bidding process for certain investment agreements complied with relevant Treasury Regulations. Additionally, Rubin admitted that he and other co-conspirators solicited fees from providers, which were in fact payments to CDR for rigging or manipulating bids for certain investment agreements so that a particular provider would win that agreement at an artificially determined price.
“Mr. Rubin and his firm were trusted with public money and confidence to assist municipalities with issuing bonds,” said FBI Assistant Director in Charge Janice K. Fedarcyk. “Contrary to his agreement and the law, Mr. Rubin shirked his responsibilities while defrauding taxpayers. Thankfully, this bid-rigging scheme, where Mr. Rubin decided the winners and losers, is over.”
“IRS is the federal agency responsible for compliance with tax laws applicable to the issuance of tax-exempt municipal bonds,” said Special Agent in Charge Charles R. Pine of the Internal Revenue Service-Criminal Investigation (IRS-CI) New York Field Office . “Today’s guilty pleas by David Rubin and CDR are the result of a coordinated effort by the Department of Justice and IRS-Criminal Investigation. Depriving municipalities of investment earnings and diverting arbitrage via illegal agreements and kickbacks will not be tolerated. IRS-Criminal Investigation agents will continue to investigate fraud in the municipal bond market and recommend prosecution against those who have participated in the fraudulent scheme.”
The bid–rigging conspiracy with which Rubin is charged carries a maximum penalty of 10 years in prison and a $1 million criminal fine. The fraud conspiracy with which Rubin is charged carries a maximum penalty of five years in prison and a $250,000 criminal fine. The wire fraud charge with which Rubin is charged carries a maximum penalty of 20 years in prison and a $250,000 criminal fine. The maximum fines for each of these offenses may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.
CDR faces a maximum criminal fine on the bid-rigging charge of $100 million. The fraud conspiracy and wire fraud offenses with which CDR is charged each carry a maximum criminal fine of $500,000. The maximum fines for each of these offenses may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.
Rubin is the tenth individual to plead guilty in an ongoing federal investigation into the municipal bonds industry, which is being conducted by the Antitrust Division’s New York Field Office, the FBI and IRS-CI.
In addition, Dominick Carollo and Peter S. Grimm, formerly of GE Funding Capital Market Services, and Steven E. Goldberg, formerly of GE Funding Capital Market Services and FSA, were indicted on July 27, 2010, and are scheduled to begin trial in April 2012. Three former UBS employees, Peter Ghavami, Gary Heinz and Michael Welty, were indicted on Dec. 9, 2010.
Today’s guilty pleas are part of efforts underway by President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. For more information about the task force, visit www.stopfraud.gov.
Anyone with information concerning bid rigging and related offenses in any financial markets should contact the Antitrust Division’s New York Field Office at 212-335-8000, the FBI at 212-384-5000, or IRS-CI at 212-436-1761, or visit www.justice.gov/atr/contact/newcase.htm.
Thursday 29 December 2011
Magyar Telekom and Deutsche Telekom Resolve Foreign Corrupt Practices Act Investigation and Agree to Pay Nearly $64 Million in Combined Criminal PenaltiesRead the Press Release
WASHINGTON – Magyar Telekom Plc., a Hungarian telecommunications company, and Deutsche Telekom AG, a German telecommunications company and majority owner of Magyar Telekom, have agreed to pay a combined $63.9 million criminal penalty to resolve a Foreign Corrupt Practices Act (FCPA) investigation into activities by Magyar Telekom and its subsidiaries in Macedonia and Montenegro, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney Neil H. MacBride for the Eastern District of Virginia.
The department filed a criminal information against Magyar Telekom and a two-year deferred prosecution agreement in U.S. District Court for the Eastern District of Virginia today. The three-count information charges Magyar Telekom with one count of violating the anti-bribery provision of the FCPA and two counts of violating the books and records provisions of the FCPA. At the time of the charged conduct, Magyar Telekom’s American Depository Receipts (ADRs) traded on the New York Stock Exchange (NYSE). As part of the deferred prosecution agreement, Magyar Telekom agreed to pay a $59.6 million penalty for its illegal activity, implement an enhanced compliance program and submit annual reports regarding its efforts in implementing the enhanced compliance measures and remediating past problems.
According to court documents, Magyar Telekom’s scheme in Macedonia stemmed from potential legal changes being made to the telecommunications market in that country. In early 2005, the Macedonian government tried to liberalize the Macedonian telecommunications market in a way that Magyar Telekom deemed detrimental to its Macedonian subsidiary, Makedonski Telekommunikacii AD Skopje (MakTel). Throughout the late winter and spring of 2005, Magyar Telekom executives, with the help of Greek intermediaries, lobbied Macedonian government officials to prevent the implementation of the new telecommunications laws and regulations.
Magyar Telekom eventually entered into an agreement with certain high-ranking Macedonian government officials to resolve its concerns about the legal changes. In the secret agreement, a so-called “protocol of cooperation,” Macedonian government officials agreed to delay the entrance of a third mobile license into the Macedonian telecommunications market, as well as other regulatory benefits. Magyar Telekom executives signed two copies of the protocol of cooperation, each with high-ranking officials of the different ruling parties of Macedonia. The Magyar Telekom executives then kept the only executed copies outside of Magyar Telekom’s company records.
According to court documents, in order to secure the benefits in the protocol of cooperation, the Magyar Telekom executives engaged in a course of conduct with consultants, intermediaries and other third parties, including through sham consultancy contracts with entities owned and controlled by a Greek intermediary, to pay €4.875 (approximately $6 million) under circumstances in which they knew, or were aware of a high probability that circumstances existed in which, all or part of such payment would be passed on to Macedonian officials. The sham contracts were recorded as legitimate on MakTel’s books and records, which were consolidated into Magyar Telekom’s financials. Deustche Telekom, which owned approximately 60 percent of Magyar Telekom, reported the results of Magyar Telekom’s operations in its consolidated financial statements.
Additionally, the criminal information charges Magyar Telekom with falsifying its books and records in regard to its activity in Montenegro. According to the court filing, Magyar Telekom made improper payments in connection with its acquisition of a state-owned telecommunications company in Montenegro. These payments were documented on Magyar Telekom’s books and records through the execution of four bogus contracts. For example, two of the contracts were backdated and concealed the true counterparties, and no legitimate services were provided under the contracts even though the contracts were for €4.47 million.
The department today also entered into a two-year non-prosecution agreement with Magyar Telekom’s parent company, Deutsche Telekom, for its failure to keep books and records that accurately detailed the activities of Magyar Telekom. Deutsche Telekom, which is headquartered in Germany, agreed to pay a $4.36 million penalty in connection with the inaccurate books and records and to enhance its compliance program. At the time of the conduct, Deutsche Telekom’s ADRs traded on the NYSE.
Both agreements acknowledge Magyar Telekom and Deutsche Telekom’s voluntary disclosure of the FCPA violations to the department and the leadership of Magyar Telekom’s audit committee in pursuing a “thorough global internal investigation concerning bribery and related misconduct.” In addition, the agreements highlight that the companies have already undertaken remedial measures and have committed to further remedial steps through the implementation of an enhanced compliance program.
In a related matter, the U.S. Securities and Exchange Commission (SEC) announced civil charges against Magyar Telekom and Deutsche Telekom as well as three former Magyar Telecom executives. Magyar Telekom and Deutsche Telekom consented to the entry of a permanent injunction against FCPA violations. Magyar Telecom agreed to pay $31.2 million in disgorgement and prejudgment interest.
The case is being prosecuted by Trial Attorney Liam Brennan of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Charles Connolly and Robert Wiechering of the U.S. Attorney’s Office for the Eastern District of Virginia. The department also acknowledges the significant contributions to this investigation by Assistant U.S. Attorney Jerrob Duffy, formerly of the Fraud Section. Significant assistance was provided by the FBI Washington Field Office’s dedicated FCPA squad, the SEC Division of Enforcement, the Criminal Division’s Office of International Affairs and international legal partners in Switzerland, Germany, Greece, Hungary and the Republic of Macedonia.
Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa .
GE Healthcare Inc. Pays U.S. $30 Million to Resolve False Claims Act AllegationsRead the Press Release
GE Healthcare Inc. has paid the United States $30 million, plus interest, to settle allegations that a company it acquired in 2004, Amersham Health Inc., had violated the False Claims Act by causing Medicare to overpay for Myoview, a radiopharmaceutical used in certain cardiac diagnostic imaging procedures, the Justice Department announced.
Myoview is distributed in multi-dose vials of powder. In a process known as reconstitution, nuclear pharmacies mix the powder with a radioactive agent to prepare individual doses that are injected into patients as part of the cardiac imaging procedures. Certain Medicare payment rates for Myoview were based, in part, on the number of doses available from vials of Myoview. The government alleges that Amersham Health provided false or misleading information to Medicare regarding the number of doses available from vials, causing Medicare to pay for Myoview at artificially inflated rates.
“It’s important for drug manufacturers to provide accurate pricing information to Medicare so that taxpayers aren't overcharged for medicines purchased with their dollars,” said Tony West, Assistant Attorney General for the Justice Department’s Civil Division. “As this case demonstrates, we remain committed to ensuring that Medicare funds are expended efficiently and appropriately.”
The allegations arise from a lawsuit that was brought under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private citizens with knowledge of fraud against the government to bring an action on behalf of the United States and to share in any recovery. The whistleblower in this suit, James Wagel, will receive $5.1 million from the government’s recovery.
Barbara L. McQuade, U.S. Attorney for the Eastern District of Michigan, said, “Drug companies should be aware that we are scrutinizing records to detect all forms of health care fraud. We hope that vigorous civil and criminal enforcement will deter companies from defrauding taxpayers in the future.”
This resolution is part of the government’s emphasis on combating health care fraud and another step for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced by Attorney General Eric Holder and Kathleen Sebelius, Secretary of the Department of Health and Human Services in May 2009. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover more than $6.6 billion since January 2009 in cases involving fraud against federal health care programs. The Justice Department’s total recoveries in False Claims Act cases since January 2009 are over $8.6 billion.
Essroc Cement Company to Pay $1.7 Million Penalty to Resolve Clean Air Act ViolationsRead the Press Release
WASHINGTON – The Department of Justice and the U.S. Environmental Protection Agency (EPA) today announced that Essroc Cement Company has agreed to pay a $1.7 million penalty and invest approximately $33 million in pollution control technology to resolve alleged violations of the Clean Air Act (CAA) at six of its portland cement manufacturing plants. The settlement will protect Americans’ health by reducing more than 7,000 tons of harmful nitrogen oxides (NOx) and sulfur dioxide (SO2) pollution each year that can lead to childhood asthma, acid rain and smog. Essroc has also agreed to spend $745,000 to mitigate the effects of past excess emissions from its facilities.
“These comprehensive measures at multiple Essroc facilities will achieve substantial reductions in harmful air pollution and result in cleaner, healthier air for many people across the country,” said Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division of the Department of Justice. “This will bring Essroc into compliance with the nation’s Clean Air Act and marks significant progress in addressing the nation’s largest sources of air pollution and protecting the most vulnerable among us, especially children and the elderly, from respiratory and other health problems.”
“EPA is committed to cutting illegal air pollution from the largest sources of emissions,” said Cynthia Giles, assistant administrator for EPA’s Office of Enforcement and Compliance Assurance. “The pollution controls required by today’s settlement will reduce harmful air pollutants, protecting communities across the nation.”
Under the settlement, Essroc will install state of the art pollution control technology to control SO2 and NOx at five of its plants and demonstrate a selective catalytic reduction system (SCR) system at two long wet kilns in its Logansport, Ind., plant. If successful, these will be the first SCRs used on long wet kilns anywhere in the world. Essroc will also permanently retire its sixth plant, located in Bessemer, Pa. This plant is currently out of operation and its permanent retirement will ensure that the facility does not restart without proper permitting under the CAA.
The settlement also requires Essroc to spend $745,000 on a mitigation project to replace old engines in several off-road vehicles at its plant sites. The replacement engines are estimated to achieve approximately a 50-80% reduction in nitrogen oxides in each engine.
Reducing air pollution from cement plants is one of EPA’s National Enforcement Initiatives for 2011-2013. SO2 and NOx, two key pollutants emitted from cement plants, have numerous adverse effects on human health and are significant contributors to acid rain, smog and haze. These pollutants are converted in the air into fine particles of particulate matter that can cause severe respiratory and cardiovascular impacts, and premature death. Reducing these harmful air pollutants will benefit the communities located near the Essroc plants, particularly communities disproportionately impacted by environmental risks and vulnerable populations, including children.
The states of Indiana and West Virginia, and the Commonwealths of Pennsylvania and Puerto Rico, are also signatories to this consent decree.
The settlement was lodged today in the U.S. District Court for the Western District of Pennsylvania and is subject to a 30-day public comment period and final court approval. A copy of the consent decree will be available on the Justice Department website: www.justice.gov/enrd/Consent_Decrees.html.
More information on the settlement: www.epa.gov/compliance/resources/cases/civil/caa/essroc.html.Learn more about EPA’s National Enforcement Initiatives: http://www.epa.gov/compliance/data/planning/initiatives/index.html.
Accused Killer of Mexican Toddler Extradited to Tijuana, MexicoRead the Press Release
WASHINGTON – Joshua Moses Morales, 36, of San Diego, was extradited to Mexico today, where he is wanted to stand trial for the alleged 2009 killing of a toddler in Tijuana, Baja California, announced U.S. Attorney Benjamin B. Wagner of the Eastern District of California and Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division.
According to the extradition request submitted by Mexico, Morales is charged with aggravated homicide after allegedly sexually abusing and killing the two-year old daughter of his girlfriend on Feb. 6, 2009. The alleged killing occurred when the girlfriend was at work and had left her daughter with Morales at their Tijuana apartment. Later that evening, the toddler was taken to a local hospital where she was pronounced dead due to alleged severe bodily trauma. Morales, who is a U.S. citizen, then allegedly fled to the United States.
The U.S. Marshals Service arrested Morales in Corcoran, Calif., in February 2010. In April 2011, following an extradition hearing in federal court in Fresno, Calif., the court certified his extraditability to Mexico. Morales then filed a writ of habeas corpus challenging the court’s findings and his continued detention, and the court denied that writ in December 2011.
“Continued cooperation with Mexican law enforcement agencies to improve public safety in both countries has been a priority for the U.S. Department of Justice,” said U.S. Attorney Wagner. “This case exemplifies that kind of cooperation. By working together, we ensure that fugitives cannot evade justice simply by crossing the border.”
“We will continue to work with Mexican authorities to ensure that dangerous criminals are not allowed to seek safe haven in Mexico or the United States,” said Assistant Attorney General Breuer. “The extradition of Mr. Morales reflects the Justice Department’s steadfast commitment to our law enforcement partnership with Mexico.”
This case was handled by Assistant U.S. Attorney Ian Garriques of the Eastern District of California and Senior Trial Attorney Valinda Jones of the Office of International Affairs in the Justice Department’s Criminal Division. Assistance was also provided by the U.S. Marshals Service.
Wednesday 28 December 2011
Statement of Attorney General Holder on Increase in Law Enforcement Officer FatalitiesRead the Press Release
WASHINGTON – The National Law Enforcement Officers Memorial Fund today released preliminary fatality statistics for 2011, which show a 13 percent increase in the number of federal, state and local officers who died in the line of duty, from 153 in 2010 to 173 in 2011. The data shows that 68 officers lost their lives in firearms-related incidents, 64 officers were killed in traffic-related incidents and 41 deaths were attributed to other causes.
“This is a devastating and unacceptable trend. Each of these deaths is a tragic reminder of the threats that law enforcement officers face each day – and the fact that too many guns have fallen into the hands of those who are not legally permitted to possess them,” said Attorney General Eric Holder. “Departments across the country have mourned the loss of too many dedicated colleagues and friends, but my colleagues and I at the Justice Department are determined to turn back this rising tide. I want to assure the family members and loved ones who have mourned the loss of these heroes that we are responding to this year’s increased violence with renewed vigilance and will do everything within our power – and use every tool at our disposal – to keep our police officers safe.”
The Department of Justice is advancing officer safety with critical new programs including the Officer Safety Initiative, which provides training programs and information-sharing platforms. In addition, in partnership with the Justice Department’s Community Oriented Policing Services (COPS) Office, the Justice Department’s Bureau of Justice Assistance (BJA) has established the Officer Safety & Wellness Working Group. This forum gains and shares information and insight to help enhance programs, policies and initiatives related to officer safety and wellness.
The department also is standing behind its commitment to police officers with significant strategic investments to numerous officer safety programs, including BJA’s Bulletproof Vest Partnership program. Since January 2011, 16 officers have been saved due to protective vests purchased in part with funding from this program . In FY 2011, the BJA reimbursed jurisdictions across the United States more than $23 million for 79,684 bullet- and stab-resistant vests.
In addition to this life-saving program, the department also is supporting officer safety through programs such as the Preventing Violence Against Law Enforcement and Ensuring Officer Resilience and Survivability ( VALOR) program. VALOR is designed to prevent violence against law enforcement officers and ensure officer resilience and survivability following violent encounters during the course of their duties. VALOR provides training and technical assistance to state, local and tribal law enforcement in a variety of ways, and will conduct and disseminate analysis of violent encounters in various forms, including after-action reviews and lessons learned publications.To date, 538 officers have been trained through the program, and more than 100 incidents where officers were forced to use their firearm have been analyzed. VALOR also includes funding that has been allocated to develop training and technical assistance programs – and resources like the Officer Safety Toolkit, which the department released this year to help officers learn how to anticipate and survive violent encounters. Since its release, approximately 5,000 print and electronic copies of the toolkit have been distributed nationwide.
The Justice Department also has made significant investments to help launch the Center for the Prevention of Violence Against the Police and to provide additional support for the families of law enforcement officers, especially in times of tragedy. The department also has expanded its Smart Policing Initiative, which fights crime with innovative and evidence-based strategies, granting 16 new awards in FY2011 and bringing the total number of agencies participating to 31.
For more information on BJA, including the Officer Safety Initiative, the Bulletproof Vest Partnership program, the VALOR program and the Center for the Prevention of Violence Against the Police and the Smart Policing Initiative go to www.ojp.usdoj.gov/BJA . For more information on COPS, go to www.cops.usdoj.gov
Justice Department Reaches Settlement with Virginia-Based BAE Systems Ship Repair Inc.Read the Press Release
WASHINGTON – The Justice Department announced today that it reached a settlement with BAE Systems Ship Repair Inc., a leading provider of ship repair services, to settle allegations that its subsidiary, BAE Systems Southeast Shipyards Alabama LLC, engaged in a pattern or practice of discrimination by imposing unnecessary and additional documentary requirements on work-authorized non-U.S. citizens when establishing their eligibility to work in the United States.
The department alleges, based on an extensive investigation, that since at least Jan. 1, 2009, BAE Southeast Alabama imposed different and greater requirements in the Form I-9 employment eligibility verification process on lawful permanent residents as compared to U.S. citizen employees by requiring all newly hired lawful permanent residents to present Permanent Resident Cards, commonly known as “green cards,” as a condition of employment. The investigation was initiated after BAE Southeast Alabama suspended a lawful permanent resident even though he had presented valid documents sufficient under the Immigration and Nationality Act (INA) to establish his work authorization on three separate occasions. The INA requires employers to treat all authorized workers in the same manner during the employment eligibility verification process, regardless of their national origin or citizenship status.
“Employers may not treat authorized workers differently during the employment eligibility verification process based on their citizenship status,” said Thomas E. Perez, Assistant Attorney General in charge of the Civil Rights Division. “Federal law prohibits discrimination in the employment eligibility verification process, and the Justice Department is committed to enforcing the law.”
According to the settlement agreement, BAE agreed to ensure that the employment eligibility verification policies and procedures of all its subsidiaries comply with the law, to train its human resources personnel about employers’ responsibilities to avoid discrimination in the employment eligibility verification process, and to produce Forms I-9 for inspection for three years. BAE also agreed to pay $53,900 to the United States. The lawful permanent resident who was suspended was previously reinstated and fully compensated by BAE.
The Office of Special Counsel (OSC) for Immigration-Related Unfair Employment Practices is responsible for enforcing the anti-discrimination provision of the INA, which protects work authorized individuals from employment discrimination on the basis of citizenship status or national origin discrimination, including discrimination in hiring and the employment eligibility verification (Form I-9) process. OSC was represented in this matter by Equal Opportunity Specialist Joann Sazama and Trial Attorney Ronald Lee. For more information about protections against employment discrimination under the immigration law, 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), or 202-616-5594; email [email protected] ; or visit OSC’s website at www.justice.gov/crt/about/osc .
Former Navajo Police Department Officer Indicted in New Mexico on Civil Rights ChargesRead the Press Release
WASHINGTON – A federal grand jury in Albuquerque, N.M., today indicted a former police officer with the Navajo Police Department on charges related to the sexual abuse of a woman who was in his custody on Jan. 25, 2009, announced the Department of Justice.
Lawrence Etsitty Jr., 30, was charged in count one of the indictment with violating the civil rights of the victim when he groped, touched and kissed her against her will, while she was restrained in handcuffs. Count two of the indictment charges Etsitty, with making false statements to the FBI.
An indictment is merely an accusation, and the defendant is presumed innocent unless proven guilty.
Anyone with information regarding this matter is encouraged to call the FBI at 505-889-1300.
This case is being investigated by the Albuquerque Division of the FBI and is being prosecuted by Fara Gold of the Criminal Section of the Civil Rights Division of the U.S. Department of Justice.
California Federal Court Blocks Bogus Tax Credit SchemeRead the Press Release
WASHINGTON– A federal court in Los Angeles has permanently barred Lamar Ellis of Brea, Calif., from promoting a scheme involving sales of bogus federal tax credits, the Justice Department announced today. According to the government’s complaint , Ellis fraudulently claimed to have billions of dollars in federal research tax credits that the United States supposedly granted him for purported scientific breakthroughs.
The suit alleged that Ellis advertised the sale of these bogus credits on the Internet and issued phony documents to people purporting to give them credits that could reduce their tax obligations. The government also alleged that Ellis partnered with the Southwest Louisiana Business Development Center, a nonprofit organization in Jennings, La., to try to sell $24 billion of the fictitious credits.
The civil injunction order entered against Ellis bars him from telling prospective customers that he can transfer tax credits to them. He is also required to give the government a list of the names, addresses and social security or tax identification numbers of everyone to whom he purported to distribute tax credits.
In the last decade, the Justice Department’s Tax Division has obtained hundreds of injunctions to stop tax fraud promoters and unscrupulous tax preparers. Information about these cases is available on the Justice Department website .
Friday 23 December 2011
Private Security Guard Convicted for Role in Providing Security for Drug TransactionRead the Press Release
WASHINGTON – A former private security guard was convicted by a federal jury yesterday in San Juan, Puerto Rico, for his role in providing security for a drug transaction, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney Rosa E. Rodriguez-Velez of the District of Puerto Rico and Special Agent in Charge Joseph S. Campbell of the FBI’s San Juan Field Office.
Ricardo Amaro-Santiago, 39, was convicted of conspiracy to possess with intent to distribute more than five kilograms of cocaine, attempting to possess with the intent to distribute more than five kilograms of cocaine and possession of a firearm in furtherance of a drug transaction. Amaro-Santiago was charged in an indictment unsealed on Oct. 6, 2010, along with 89 law enforcement officers in Puerto Rico and 44 other individuals, as part of the FBI undercover operation known as Guard Shack.
According to the indictment and information presented in court, in May 2010, Amaro-Santiago provided security for what he believed was an illegal drug deal, but which in fact was part of the undercover FBI operation. According to information presented at trial, Amaro-Santiago was employed as a private security guard, but posed as a Puerto Rico police officer during the transaction. Information presented at trial also revealed that Amaro-Santiago was brought into the scheme by a co-defendant who was a police officer of Puerto Rico.
In return for the security he provided, Amaro-Santiago received a cash payment of $1,000.
U.S. District Judge Gustavo A. Gelpi scheduled sentencing for April 2012. At sentencing, Diaz faces a mandatory minimum sentence of 15 years in prison and a maximum penalty of life in prison.
The case was prosecuted by Trial Attorneys Marquest J. Meeks and Tracee Plowell of the Public Integrity Section in the Justice Department’s Criminal Division. The case was investigated by the FBI. The U.S. Attorney’s Office for the District of Puerto Rico also participated in the investigation and prosecution of this case.
Pennsylvania Husband and Wife Sentenced to Prison for Fraudulent Commercial Driver’s Licenses SchemeRead the Press Release
WASHINGTON – A Pennsylvania husband and wife were sentenced yesterday to 30 months and 24 months in prison, respectively, for their participation in a scheme to provide out-of-state residents with Pennsylvania driver’s licenses and Pennsylvania commercial driver’s licenses (CDL), Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney Zane David Memeger of the Eastern District of Pennsylvania announced today.
Vitaliy Kroshnev, 49, and his wife Tatyana, 46, of Richboro, Penn., were sentenced by U.S. District Judge Norma L. Shapiro. In addition to the prison terms, Judge Shapiro ordered three years of supervised release for each defendant and a forfeiture money judgment of $445,450.
Vitaliy and Tatyana Kroshnev owned and operated the International Training Academy (ITA). From 2007 to 2010, they arranged for hundreds of non-residents of Pennsylvania to fraudulently obtain Pennsylvania commercial driver’s licenses through the ITA. The Kroshnevs paid other members of the conspiracy, who lived in Pennsylvania, to allow out-of-state ITA clients to use the in-state home addresses as proof of Pennsylvania residency. They also employed corrupt translators to ensure Russian-speaking applicants passed the written portion of the CDL test, regardless of the applicants’ actual knowledge.
The couple pleaded guilty to conspiracy to produce and aiding and abetting the production of an identification document without lawful authority. Vitaliy Kroshnev also pleaded guilty to making a material false statement and conspiracy to commit immigration fraud.
The case was investigated by the FBI and the U.S. Department of Transportation Office of Inspector General. The case was prosecuted by Assistant U.S. Attorneys Frank Labor and Michelle Morgan of the Eastern District of Pennsylvania and Trial Attorney Margaret Vierbuchen of the Organized Crime and Gang Section in the Justice Department’s Criminal Division.
GE Funding Capital Market Services Inc. Admits to Anticompetitive Conduct by Former Traders in the Municipal Bond Investments Market and Agrees to Pay $70 Million to Federal and State AgenciesRead the Press Release
GE Funding Capital Market Services Inc. entered into an agreement with the Department of Justice to resolve the company’s role in anticompetitive activity in the municipal bond investments market and agreed to pay a total of $70 million in restitution, penalties and disgorgement to federal and state agencies, the Department of Justice announced today.
As part of its agreement with the department, GE Funding admits, acknowledges and accepts responsibility for illegal, anticompetitive conduct by its former traders. According to the non-prosecution agreement, from 1999 through 2004, certain former GE Funding traders entered into unlawful agreements to manipulate the bidding process on municipal investment and related contracts, and caused GE Funding to make payments and engage in other related activities in connection with those agreements through at least 2006. These contracts were used to invest the proceeds of, or manage the risks associated with, bond issuances by municipalities and other public entities.
“GE Funding’s former traders entered into illegal agreements to manipulate the bidding process on municipal investment contracts,” said Sharis A. Pozen, Acting Assistant Attorney General in charge of the Justice Department’s Antitrust Division. “This anticompetitive conduct harmed municipalities, as well as taxpayers. Today’s resolution requires GE Funding to pay penalties, disgorgement and restitution to the victims of its illegal activity. We will continue to use all the tools at our disposal to uphold our nation’s antitrust laws and ensure competition in the financial markets.”
Under the terms of the agreement, GE Funding agreed to pay restitution to victims of the anticompetitive conduct and to cooperate fully with the Justice Department’s Antitrust Division in its ongoing investigation into anticompetitive conduct in the municipal bond derivatives industry. To date, the ongoing investigation has resulted in criminal charges against 18 former executives of various financial services companies and one corporation. Nine of the 18 executives charged have pleaded guilty.
The Securities and Exchange Commission (SEC), the Internal Revenue Service (IRS) and 25 state attorneys general also entered into agreements with GE Funding requiring the payment of penalties, disgorgement of profits from the illegal conduct and payment of restitution to the victims harmed by the bid manipulation by GE Funding employees, as well as other remedial measures.
As a result of GE Funding’s admission of conduct; its cooperation with the Department of Justice and other enforcement and regulatory agencies; its monetary and non-monetary commitments to the SEC, IRS and state attorneys general; and its remedial efforts to address the anticompetitive conduct, the department agreed not to prosecute GE Funding for the manipulation of bidding for municipal investment and related contracts, provided that GE Funding satisfies its ongoing obligations under the agreement.
JPMorgan Chase & Co., UBS AG and Wachovia Bank N.A. also reached agreements with the Department of Justice and other federal and state agencies to resolve anticompetitive conduct in the municipal bond derivatives market. On May 4, 2011, UBS AG agreed to pay a total of $160 million in restitution, penalties and disgorgement to federal and state agencies for its participation in the anticompetitive conduct. On July 7, 2011, JPMorgan agreed to pay a total of $228 million in restitution, penalties and disgorgement to federal and state agencies for its role in the conduct. On Dec. 8, 2011, Wachovia Bank agreed to pay a total of $148 million in restitution, penalties and disgorgement to federal and state agencies for its participation in the anticompetitive conduct.
The department’s ongoing investigation into the municipal bonds industry is being conducted by the Antitrust Division, the FBI and the IRS-Criminal Investigation. The department is coordinating its investigation with the SEC, the Office of the Comptroller of the Currency and the Federal Reserve Bank of New York. The department thanks the SEC, IRS and state attorneys general for their cooperation and assistance in this matter.
The Antitrust Division, SEC, IRS, FBI and state attorneys general are members of the Financial Fraud Enforcement Task Force. President Obama established the interagency task force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. For more information about the task force, visit www.stopfraud.gov.
Bloods Gang Member Pleads Guilty to Federal Racketeering ChargesRead the Press Release
WASHINGTON – Kerry Pettus, aka “Lil Kerry,” 23, of Nashville, Tenn., pleaded guilty to charges related to his membership in the Bloods gang criminal enterprise , Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney for the Middle District of Tennessee Jerry E. Martin announced today.
Pettus pleaded guilty on Dec. 21, 2011, before U.S. District Judge Aleta Trauger in the Middle District of Tennessee to one count of conspiracy to participate in racketeering activity and one count of possessing a firearm in furtherance of a crime of violence.
According to court documents, Pettus and other Bloods gang members and associates agreed to commit multiple acts of murder, robbery, narcotics trafficking and bribery on behalf of the Bloods gang. Pettus and numerous Bloods gang members met on a regular basis at various locations throughout the Middle District of Tennessee, including Shelby Park, Cedar Hill Park and the Galaxy Star Drug Awareness and Gang Prevention Center in Nashville, to report on gang-related business, collect dues, commit disciplinary actions against fellow gang members, discuss acts of violence against rival gang members and initiate or “jump in” new members by beating them for a period of time, among other things.
Pettus admitted to being a Bloods member and to engaging in multiple acts in support of the criminal enterprise, including: possessing firearms, shooting rival gang members, possessing crack cocaine with the intent to sell it and receiving fraudulent documentation of court-ordered community service hours from Lonnie Greenlee, co-founder of the Galaxy Star Drug Awareness and Gang Prevention Center, in exchange for money. These acts occurred at various times from March until May 2010.
Twenty-four co-defendants have pleaded guilty for their participation in the criminal enterprise. Pettus is scheduled to be sentenced on March 16, 2012. The plea agreement states that the appropriate sentence is a term of 20 years in prison.
The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives; the Metropolitan Nashville Police Department; the Gallatin, Tenn., Police Department; with assistance from the U.S. Marshals Service and the Davidson County, Tenn., District Attorney’s Office.
The case is being prosecuted by Assistant U.S. Attorney Scarlett Singleton of the Middle District of Tennessee and Trial Attorney Cody L. Skipper of the Organized Crime and Gang Section in the Justice Department’s Criminal Division.
Thursday 22 December 2011
US Obtains Injunction Against Chicago Food Processing Firm After Alleging Unsafe Food Production PracticesRead the Press Release
CHICAGO — The United States today obtained an agreed permanent injunction against a Chicago food processing firm, Triple A Services Inc., and three of its executives after filing a federal lawsuit alleging that Triple A’s ready-to-eat sandwiches and produce were not being prepared in compliance with federal regulations to protect food against contamination. A consent decree approved today by U.S. District Judge William J. Hibbler prevents the company from distributing any food products, except those that are pre-packaged when they enter its facility and leave in the same unwrapped condition, until it obtains approval from the Food and Drug Administration (FDA), which initiated the enforcement action.
Triple A Services prepares, processes, packs and distributes ready-to-eat food products that are sold to the public, including through mobile catering services. Also named as defendants were Triple A executives Thomas J. Whennen, chief executive officer; Scott C. Whennen, president; and David A. Frisco, general manager.
The lawsuit and decree were announced by Tony West, Assistant Attorney General for the Civil Division and Patrick J. Fitzgerald, U.S. Attorney for the Northern District of Illinois.
The FDA is not aware of any illnesses that have occurred as a result of the allegedly contaminated food products.
The lawsuit, also filed today, alleges violations of the Federal Food, Drug and Cosmetic Act and was brought on behalf of the FDA after its investigators found evidence of violations over the course of inspections between July 6 and Aug. 24, 2011, as well as during previous inspections since 2001. At the conclusion of the August 2011 inspection, FDA provided the firm with notice of deficiencies which needed correction. The most recent inspection revealed the presence of Listeria monocytogenes (L. Monocytogenes or L. mono) in the facility. Inspections in 2001 and 2002 also revealed the presence of L. mono in the facility. L. mono is of particular concern with respect to ready-to-eat products such as those produced by Triple A. It can cause the disease listeriosis, which is serious and even fatal in high-risk groups such as infants, the elderly and persons with impaired immune systems.
The company and its officials have agreed, without further litigation, to cease distribution of certain products until FDA approval is obtained and for agreeing to take other measures such as hiring sanitation and food processing experts to remedy certain deficiencies in its manufacturing process before resuming food processing operations.
“The violations FDA uncovered in this case posed health and safety risks to consumers,” said Assistant Attorney General West. “Companies that process the food we eat must comply with the rules that keep us safe or face being shut down.”
According to the lawsuit, Triple A was in violation of the FDA’s current “good manufacturing practice” regulations, which specify methods and controls that food processors like Triple A must follow to ensure that their products do not present a potential threat to public health. During inspections over a 10-year period, the FDA found, among other things, that Triple A did not have a written plan for handling seafood products, stored food improperly, failed to eradicate a pest problem, did not fix water leakage problems, and did not address employee cleanliness issues. Both the presence of L. mono in Triple A’s facility and the company’s failure to comply with the regulations renders all food products produced under those conditions in the facility adulterated under the Federal Food, Drug, and Cosmetic Act.
To obtain FDA approval to resume food processing operations, Triple A and its sanitation and food processing experts must demonstrate to FDA’s satisfaction that it has corrected the L. Mono and other problems in its facility and has instituted procedures to ensure that there will be no recurrence of those or any other problems that could present a threat to public health. If the defendants fail to comply with the consent decree, the FDA may order them to stop manufacturing and distributing food, recall products, or take other corrective action. The defendants could also be ordered to pay $2,500 per day if they fail to comply with the decree.
Consumers with food safety questions may call the FDA’s toll-free Food Safety Hotline at 888-SAFEFOOD (888-723-2366), and any problems may be reported to the FDA consumer complaint coordinator in their geographic area. Contact numbers may be found at www.fda.gov/opacom/backgrounders/complain.html .
The government is being represented by Assistant U.S. Attorney Donald Lorenzen in the Northern District of Illinois and Trial Attorney Carol Wallack of the Department of Justice’s Consumer Protection Branch.
Principal and Co-Owner of North Carolina Company Pleads Guilty to Defrauding Commodities Trading InvestorsRead the Press Release
WASHINGTON – The principal and co-owner of Integra Capital Management LLC, a North Carolina company, pleaded guilty today for his role in a commodities trading investment scheme that allegedly raised more than $3.2 million, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division and U.S. Attorney Anne M. Tompkins of the Western District of North Carolina.
Nicholas Cox, 34, a North Carolina resident, pleaded guilty before U.S. Magistrate Judge David Keesler in Charlotte, N.C., to one count of conspiracy to commit mail fraud, five counts of mail fraud and one count of conspiracy to commit money laundering. Cox was charged in an indictment returned on May 17, 2011, by a federal grand jury in the Western District of North Carolina.
According to plea documents, between September 2006 and January 2009, Cox and his co-conspirator, Rodney Whitney, who was also a principal and co-owner of Integra, engaged in a scheme to defraud investors in commodity trading pools operated by Cox and Whitney through Integra. According to the indictment, Integra was established for the purpose of pooling investors’ funds in commodity pools, and investing in commodity futures and foreign currency exchange (forex) trading.
Whitney pleaded guilty on March 21, 2011, before U.S. Magistrate Judge David S. Cayer to one count of conspiracy to commit mail and wire fraud and one count of conspiracy to commit money laundering.
The case is being prosecuted by Trial Attorneys Nicole H. Sprinzen and Luke B. Marsh of the Criminal Division’s Fraud Section and Benjamin Bain-Creed of the U.S. Attorney’s Office for the Western District of North Carolina. The case is being investigated by the U.S. Postal Inspection Service.
This prosecution is part of efforts underway by President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. For more information about the task force visit: www.stopfraud.gov.
Pittsburgh Crips Gang Members Sentenced to Prison for Racketeering ChargesRead the Press Release
WASHINGTON – Two members of the Pittsburgh Crips criminal enterprise were sentenced yesterday in federal court to 154 and 120 months in prison, respectively, on charges of conspiring to conduct a racketeering enterprise, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney David J. Hickton of the Western District of Pennsylvania.
Terrance Clark, 22, aka “Doo Wop,” was sentenced to 154 months in prison and three years of supervised release and Lamon Street, 20, aka “M-Dot,” was sentenced to 120 months in prison and three years of supervised release. Clark and Street each pleaded guilty to one count of conspiracy to engage in a racketeering conspiracy earlier this year.
According to the guilty plea, Clark, Street and others participated in a pattern of racketeering activity that included multiple acts involving gun point robberies; attempted murders; drug distribution, including cocaine, heroin and crack cocaine; and obstruction of justice and witness intimidation.
According to court documents, Clark was a member of the Northview Heights/ Fineview Crips, a criminal street gang operating out of the Northview Heights public housing facility in the Northside neighborhood, and in the nearby Fineview neighborhood. The gang had been operating in Northside since 2002, when in 2003 it formed an alliance with the Brighton Place Crips to expand the gang’s drug trafficking territory and increase the gang’s capability for violence. Street was a member of the Brighton Place Crips, a criminal street gang that controlled an area of Brighton Place and Morrison Street, also known as the Mad Cave, and Federal Street in the Northside area of Pittsburgh.
The Brighton Place/Northview Heights Crips gang maintains exclusive control over drug trafficking in these neighborhoods through continuous violence and intimidation of rivals and witnesses. Members of the gang support each other through payment of attorneys’ fees, bond, jail commissary accounts and support of incarcerated members’ families.
In addition, the Brighton Place/Northview Heights Crips gang maintains an ongoing feud with the Manchester Original Gangsters, a criminal street gang located in the Manchester area of the Northside Section of Pittsburgh. Brighton Place/Northview Heights Crips gang members identify themselves by wearing blue, using Crips gang hand signals, and using phrases such as “Cuz,” “C-Safe,” “Loc,” and “G.K.” Members and associates of the enterprise obtained greater authority and prestige within the enterprise based upon their reputation for violence and their ability to obtain and sell a steady supply of illegal drugs.
According to court documents, Clark and Street each acted as a “hustler” or distributor of heroin, cocaine and crack cocaine for the gang. Clark also acted as a “soldier” or enforcer for the gang, providing protection for the enterprise through the commission of violent crimes.
Also yesterday, co-defendant Hosea Ghafoor was sentenced to 18 months in prison.
Clark, Street and Ghafoor are among 26 defendants charged in February 2010 with being members of, and conducting racketeering activity through, the Brighton Place/Northview Heights Crips gang. This prosecution resulted from a Project Safe Neighborhoods Task Force investigation that began in 2005. To date, all members of the Brighton Place/ Northview Heights Crips who were charged in this indictment have pleaded guilty to racketeering charges.
This case is being prosecuted by Assistant U.S. Attorneys Charles A. Eberle and Troy Rivetti of the Western District of Pennsylvania and Trial Attorney Kevin L. Rosenberg of the Criminal Division’s Organized Crime and Gang Section. The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives; the City of Pittsburgh Bureau of Police; the Allegheny County, Penn., Police Department; and the Allegheny County Sheriff’s Office.
Massachusetts Man Sentenced to 166 Months in Prison for Arson of African-American ChurchRead the Press Release
BOSTON – A Springfield, Mass., man was sentenced to prison today in federal court for civil rights charges stemming from the arson of a predominantly African-American church in retaliation for the election of Barack Obama as the first African-American president of the United States, announced the Department of Justice. Michael Jacques, 27, was sentenced in Boston by U.S. District Judge Michael A. Ponsor to 166 months in prison, followed by four years of supervised release. Jacques was also ordered to pay more than $1.5 million in restitution.
The sentencing was announced by Thomas E. Perez, Assistant Attorney General of the Justice Department’s Civil Rights Division; U.S. Attorney for the District of Massachusetts Carmen M. Ortiz; Guy Thomas, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) – Boston Field Division; Richard DesLauriers, Special Agent in Charge of the FBI Boston Field Office; Colonel Marian J. McGovern, Superintendent of the Massachusetts State Police; Hampden County District Attorney Mark Mastroianni; and Springfield Police Commissioner William J. Fitchet.
On April 14, 2011, following a jury trial, Jacques was found guilty of conspiracy against civil rights, damage or destruction of religious property and use of fire to commit a felony for his involvement in the church arson.
According to evidence presented at Jacques’s trial, in the early morning hours of Nov. 5, 2008, within hours of President Barack Obama being elected, Jacquesand his co-conspirators agreed to burn down, and did burn down, the Macedonia Church of God in Christ’s newly constructed building where religious services were to be held for its predominantly African-American congregation. The building was approximately 75 percent completed at the time of the fire, which destroyed nearly the entire structure, leaving only the metal superstructure and a small portion of the front corner intact.
“This sentence sends a powerful message that racial violence and intimidation have no place in our society,” said Assistant Attorney General Perez. “The department will continue to use every tool in its law enforcement arsenal to prosecute acts of hate like this one.”
“As evidenced in this case, hate crimes victimize not only individuals but entire communities,” said U.S. Attorney Ortiz. “We remain committed to protecting our communities from violence motivated by bigotry and prejudice, and ensuring that justice is served to victims. I hope that today’s sentence sends a strong message that we will bring all of our resources to bear in order to protect the civil liberties of every citizen.”
Jacques’s co-conspirators, Benjamin Haskell and Thomas Gleason, pleaded guilty to civil rights charges on June 16, and June 22, 2010, respectively. Haskell was sentenced to nine years in prison on Nov. 1, 2010. Gleason is scheduled to be sentenced on Jan. 18, 2012.
The case was investigated by the ATF in Springfield; the FBI in Springfield; the Massachusetts State Police; the Springfield Police Department and the Hampden County District Attorney’s Office. It was prosecuted by Assistant U.S. Attorneys Paul H. Smyth and Kevin O’Regan of U.S. Attorney’s Office in Springfield and Nicole Lee Ndumele, Trial Attorney in the Civil Rights Division.
Justice Department Requires Deutsche Börse to Divest Its Interest in Direct Edge in Order to Merge with NYSE EuronextRead the Press Release
WASHINGTON – The Department of Justice announced today that it will require Deutsche Börse AG to direct its subsidiary International Securities Exchange Holdings Inc. (ISE) to sell its 31.5 percent stake in Direct Edge Holdings LLC and agree to other restrictions in order for Deutsche Börse to proceed with its planned $9 billion merger with NYSE Euronext, one of the two largest and most prestigious stock exchange operators in the United States. Direct Edge is the fourth largest stock exchange operator in the country. The department said that the transaction, as originally proposed, would have substantially lessened competition for displayed equities trading services, listing services for exchange-traded products, including exchange-traded funds, and real-time proprietary equity data products in the United States.
The department’s Antitrust Division filed a civil antitrust lawsuit today in U.S. District Court in Washington, D.C., to block the proposed acquisition. At the same time, the division filed a proposed settlement that, if approved by the court, would resolve the lawsuit and the department’s competitive concerns. In addition to the required divestiture of the ownership stake in Direct Edge held by Deutsche Börse ’s subsidiary, the proposed settlement prohibits immediately NYSE and Deutsche Börse from participating in the governance or business of Direct Edge.
“Without the divestiture and other restrictions obtained by the Justice Department, a combined NYSE and Deutsche B örse entity could influence the actions of Direct Edge, and thereby lessen the zeal of an aggressive and innovative exchange competitor,” said Sharis A. Pozen, Acting Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. “The remedy ensures that participants in the markets for U.S. equities exchange products and services will continue to receive the full benefits of robust competition in the form of competitive prices and increased innovation.”
According to court documents, Deutsche Börse’s subsidiary, ISE, owns 31.5 percent of Direct Edge and has significant governance rights, including certain key voting and special veto rights and the right to appoint three members to Direct Edge’s board of managers, and one member to each of the corporate boards of Direct Edge’s two exchanges.
Under the terms of the proposed settlement, Deutsche Börse’s subsidiary, ISE, will divest its interest in Direct Edge within two years. NYSE and Deutsche Börse are also required to provide a written plan, prior to closing their transaction, explaining the steps they will take to remove any Deutsche Börse affiliate from governance of Direct Edge until the divestiture occurs. Within two calendar days of closing the transaction, any Deutsche Börse-affiliated officer, director, manager, employee, affiliate or agent must resign from the board of all Direct Edge entities.
The merging parties are also prohibited from suggesting or nominating any candidate for election to the board of any Direct Edge entities or having any officer, director, manager, employee or agent serve as an officer, director, manager or employee with or for any Direct Edge entities. Under the proposed settlement’s terms, the merging parties cannot vote, exert or attempt to exert any influence, or even participate in nonpublic Direct Edge meetings or receive any nonpublic information from Direct Edge, except to the extent necessary to fulfill the requirements of the proposed settlement or financial reporting obligations. The merging parties must also continue to provide certain contractual services to Direct Edge, subject to a firewall.
The divestiture of the interest in Direct Edge and related restrictions resolve the department’s concerns about the merger’s effects on the markets for U.S. equities exchange products and services. The department’s Antitrust Division and the European Commission communicated extensively throughout the course of their respective investigations, with frequent contact between the investigative staffs, aided by waivers provided by the merging parties.
“The open dialogue between the Antitrust Division and the European Commission was very effective and allowed each agency to conduct its respective investigation while mindful of ongoing work and developments in the other jurisdiction,” said Acting Assistant Attorney General Pozen.
Deutsche Börse is organized under the laws of the Federal Republic of Germany with its principal place of business located in Eschborn, Germany. Deutsche Börse, through a series of subsidiaries, owns ISE, a Delaware corporation with its principal place of business in New York which holds a 31.5 percent equity interest in Direct Edge Holdings LLC.
NYSE is a publicly traded Delaware corporation with its principal place of business located in New York. NYSE was created by the merger between NYSE Group Inc. and Euronext N.V. in 2007. In the United States, it operates the New York Stock Exchange, NYSE Arca and NYSE Amex. NYSE also generates revenue from a wide variety of exchange-related businesses, including securities listings, trading, data licensing and technology licensing. In 2010, NYSE earned more than $3 billion in total revenues from sales within the United States.
Direct Edge Holdings LLC, which is not a party to the United States’s lawsuit, is a Delaware limited liability company with its principal place of business in Jersey City, New Jersey. Direct Edge is the fourth largest stock exchange operator in the United States and owns the leading EDGA and EDGX electronic stock exchanges.
As required by the Tunney Act, the proposed settlement, along with the department’s competitive impact statement, will be published in the Federal Register. Any person may submit written comments concerning the proposed settlement during a 60-day comment period to James Tierney, Chief, Networks and Technology Section, Antitrust Division, U.S. Department of Justice, 450 Fifth Street, N.W., Suite 7100, Washington, D.C. 20530. At the conclusion of the 60-day comment period, the court may enter the final judgment upon a finding that it serves the public interest.
Innospec Agent Sentenced to 30 Months in Prison for Bribing Iraqi Officials and Paying Kickbacks Under the U.N. Oil for Food ProgramRead the Press Release
WASHINGTON – A former agent for Innospec Inc., a U.S. company, was sentenced today to 30 months in prison and ordered to pay a $250,000 fine for his participation in a conspiracy to defraud the United Nations Oil for Food Program (OFFP) and to bribe former Iraqi government officials in connection with the sale of a chemical additive used in the refining of leaded fuel, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division.
Ousama Naaman, 62, of Abu Dhabi, United Arab Emirates, was indicted on Aug. 7, 2008, in U.S. District Court for the District of Columbia. Superseding charges were filed on June 24, 2010. Naaman was arrested on July 30, 2009, in Frankfurt, Germany, and extradited to the United States. He pleaded guilty on June 25, 2010, to one count of conspiracy to commit wire fraud, violate the Foreign Corrupt Practices Act (FCPA) and falsify the books and records of a U.S. issuer, and one count of violating the FCPA.Naaman and his companies were the Iraqi agents of Innospec Inc. On March 18, 2010, Innospec pleaded guilty to a 12-count indictment charging wire fraud in connection with its payment of kickbacks to the Iraqi government under the OFFP, as well as FCPA violations in connection with bribe payments it made to officials in the Iraqi Ministry of Oil.
F rom 2001 to 2003, acting on behalf of Innospec, Naaman offered and paid 10 percent kickbacks to the then-Iraqi government in exchange for five contracts under the OFFP. Naaman negotiated the contracts, including a 10 percent increase in the price to cover the kickbacks, and routed the funds to Iraqi government accounts in the Middle East.
In addition, Naaman admitted to paying and promising to pay more than $6.8 million in bribes from 2004 to 2008, in the form of cash, travel and entertainment, to officials of the Iraqi Ministry of Oil and the Trade Bank of Iraq to secure sales of tetraethyl lead in Iraq, as well as to secure more favorable exchange rates on the contracts. Naaman provided Innospec with false invoices to support the payments, and those invoices were incorporated into the books and records of Innospec. Naaman earned $2.7 million in commissions on the contracts and would have earned an additional $5.3 million had the final contract not been halted as a result of the investigation.
In addition to bribes actually offered and paid to Iraqi officials, Naaman convinced Innospec to pay him $750,000 for additional bribes that Naaman never paid, instead keeping the money for himself.
Naaman separately settled civil charges on Aug. 5, 2010, with the U.S. Securities and Exchange Commission (SEC) for the same misconduct. Naaman disgorged $877,096 in profits and prejudgment interest in connection with the settlement. The SEC civil penalty of $438,038 will be satisfied in part by his criminal fine.
The case was prosecuted by Trial Attorney Kathleen M. Hamann and Assistant Chief Nathaniel B. Edmonds of the Criminal Division’s Fraud Section. The case was investigated by the dedicated FCPA squad at FBI’s Washington Field Office and the Counter Proliferation Investigations Unit of the Washington Field Office of U.S. Immigration and Customs Enforcement. Significant assistance was provided by the Criminal Division’s Office of International Affairs and the SEC’s FCPA Unit.
The Innospec matter has been investigated with assistance from the SEC and in cooperation with the Department of the Treasury’s Office of Foreign Assets Control and the United Kingdom’s Serious Fraud Office.
Former Grant Administrator and Legal Assistant of American Samoa Non-Profit Legal Aid Corporation Plead Guilty to Stealing More Than $150,000 in Federal Grant FundsRead the Press Release
WASHINGTON – A former grant administrator and her daughter pleaded guilty yesterday to stealing more than $150,000 in federal grant funds awarded to a non-profit corporation in the U.S. territory of American Samoa, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division.
Julie Matau, 49, of San Francisco, pleaded guilty to one count of wire fraud before U.S. District Judge Claudia Wilken. Andrea Matau, 28, also of San Francisco, pleaded guilty to one misdemeanor count of theft of federal funds before Judge Wilken. A federal grand jury in the Northern District of California returned an indictment against Julie and Andrea Matau on Dec. 16, 2010. A third defendant, David Wagner, pleaded guilty on March 11, 2011, in the Eastern District of Missouri.
According to court documents, U’una’i Legal Services Corporation (ULSC) was a nonprofit corporation operating in American Samoa from approximately 1998 to 2007. During this period, ULSC was the only nonprofit organization in American Samoa that was dedicated to providing free legal services to victims of domestic violence, dating violence, stalking and sexual abuse. Between approximately August 2005 and September 2007, ULSC received more than $1.2 million in federal grant funds from the U.S. Department of Justice’s Office of Violence Against Women and the Legal Services Corporation.
According to court documents, David Wagner served as ULSC’s acting executive director, and Julie Matau served as ULSC’s grant administrator, from May 2005 and September 2007. Julie Matau, with Wagner, was responsible for submitting applications for federal grant funding, managing the federal grant funds awarded to ULSC and arranging for employee payroll checks to be issued. Andrea Matau worked as one of ULSC’s legal assistants and reported directly to Julie Matau.
According to their guilty pleas, between September 2005 and September 2007, Julie Matau and Wagner arranged for themselves, Andrea Matau, and relatives of Julie and Andrea Matau to receive federal grant funds to which they were not legally entitled. According to court documents, Julie Matau unlawfully received $65,649 in federal grant funds; Andrea Matau unlawfully received $24,634 in federal grant funds; Wagner unlawfully received $31,292 in federal grant funds; and the Mataus relatives received $38,188.
Julie Matau admitted that she knew that she and others had no legal entitlement to receive these federal grant funds and that their receipt of the federal funds violated the terms and conditions of the grants. Julie Matau also admitted that she had no intention of repaying the money to ULSC or the federal government, or of requiring others to repay the money. Andrea Matau admitted that she participated in the theft by receiving money to which she was not lawfully entitled and by permitting Julie Matau to deposit her unlawful payments in Andrea’s personal bank account and their joint bank accounts. In his guilty plea, Wagner admitted to receiving “salary advances” and other payments to which he was not lawfully entitled, and to signing blank checks for Julie Matau. Wagner is awaiting sentencing.
The charge of wire fraud carries a maximum prison sentence of 20 years and a maximum fine of $250,000. The misdemeanor charge of theft of federal funds carries a maximum prison sentence of one year and a maximum fine of $100,000. Sentencing has been scheduled for March 27, 2012, before Judge Wilken.
The case is being prosecuted by Trial Attorneys Edward J. Loya Jr. and Monique T. Abrishami of the Criminal Division’s Public Integrity Section. Senior Trial Attorney Mary K. Butler and Trial Attorney Maria N. Lerner, also of the Public Integrity Section, participated in the investigation of this matter. The case is being investigated by special agents of the Department of Justice’s Office of Inspector General and the Legal Services Corporation’s Office of Inspector General, with assistance from special agents of the FBI-Honolulu Division, American Samoa Resident Agency.
Former Army National Guard Major Sentenced to 60 Months in Prison for Receiving Bribes at Bagram Airfield, AfghanistanRead the Press Release
WASHINGTON – A former Major in the U.S. Army National Guard who was deployed to Bagram Airfield, Afghanistan, was sentenced to 60 months in prison for receiving bribes from military contractors in exchange for fraudulently verifying the receipt of concrete bunkers and barriers that were never received, Assistant Attorney General Lanny A. Breuer of the Criminal Division announced today.
Christopher P. West, of Chicago, was sentenced on Dec. 20, 2011, by U.S. District Judge Matthew F. Kennelly of the Northern District of Illinois in Chicago. In addition to his prison term, West was sentenced to two years of supervised release and was ordered to pay $500,000 in restitution to the United States Department of Defense.
West pleaded guilty in June 2009 to a superseding indictment charging him with eight counts of bribery, conspiracy and fraud. According to court documents, West was deployed to Bagram Airfield from March 2004 until March 2005. West and Lieutenant Robert Moore had sole responsibility over ordering, receiving and verifying the receipt of bunkers and barriers at Bagram, which, at the time, served as the central receiving point for all bunkers and barriers in Afghanistan. West and Moore conspired with the bunker and barrier contractors at Bagram to fraudulently inflate the number of bunkers and barriers delivered to Bagram, and to profit in the resulting overpayments made by DOD.
According to court documents, the contractors fraudulently billed the DOD for bunkers and barriers never delivered to Bagram. West and Moore fraudulently verified on material inspection and receiving reports that the contractors had delivered the inflated number of bunkers and barriers. As a result, the contractors were able to receive payment for the falsely inflated number of bunkers and barriers. Upon receiving payment, the contractors paid West and Moore a portion of the money received.
In addition, according to the superseding indictment and other documents filed in this case, West, Moore and co-conspirator Sergeant Patrick Boyd awarded contracts to three different contractors in return for $30,000 each, which the conspirators split among themselves.
West is the eighth defendant sentenced in this investigation. Ten additional defendants remain to be sentenced, some in the Northern District of Illinois and others in the District of Hawaii.
West’s co-conspirators, Robert Moore and Patrick Boyd, were sentenced to 15 months and 40 months in prison, respectively, for their roles in this criminal activity. Sergeant Sheryl Ayeni was also sentenced recently to one year in prison for the receipt of $30,000 in return for her official acts as a vendor pay agent at Bagram during 2004 and 2005. Also arising from this investigation, John Mihalczo was sentenced to 15 months in prison for accepting approximately $115,000 in bribes at Bagram between 2003 and 2004.
This case is being prosecuted by Trial Attorney Mark W. Pletcher of the Criminal Division’s Fraud Section , and investigated by the Army Criminal Investigations Division, the Defense Criminal Investigative Service and the Department of the Air Force, Office of Special Investigations, with assistance from the Special Inspector General for Afghanistan Reconstruction.
Wednesday 21 December 2011
Two Las Vegas Men Sentenced to 20 and 25 Years in Prison for <br /> Cocaine Distribution and Money Laundering ConspiracyRead the Press Release
WASHINGTON – Two Las Vegas men were sentenced yesterday in the District of Nevada to 20 and 25 years in prison for their roles in an international cocaine distribution and money laundering conspiracy, Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney Daniel G. Bogden of the District of Nevada announced today.
U.S. District Judge Gloria M. Navarro sentenced Jose Lopez-Buelna, aka “Miguel,” 51, to 20 years in prison, and Erik Dushawn Webster, 47, to 25 years in prison. Lopez-Buelna and Webster were also sentenced to five years of supervised release.
Lopez-Buelna pleaded guilty on Feb. 16, 2011, to conspiracy to distribute five kilograms or more of cocaine, conspiracy to launder money and two counts of money laundering. Webster was convicted by a federal jury on Feb. 18, 2011, of conspiracy to distribute five kilograms or more of cocaine and conspiracy to launder money.
At the sentencing hearings, the court found that the drug distribution conspiracy in this case involved 150 kilograms or more of cocaine.
According to court documents and trial testimony, from 2007 through October 2009, Lopez-Buelna and co-defendant Jesus Gastelum recruited various individuals, including Webster and others, to drive motor homes outfitted with sophisticated, lead-lined, hidden compartments throughout the United States, Mexico and Canada. The hidden compartments were used to store large amounts of cocaine and drug proceeds. Lopez-Buelna and Gastelum ordered the motor home drivers to make stops at various destinations, including Atlanta, Chicago, New York and Montreal, where the cocaine was unloaded and bulk cash was loaded into the hidden compartments. The motor home drivers then transported these proceeds from the cocaine distribution back to Mexico. Testimony at trial also indicated that Webster recruited additional motor home drivers to drive a motor home registered in his name across the U.S./Mexico border and back to various destinations in the United States.
Gastelum was charged with conspiracy to distribute five kilograms or more of cocaine, conspiracy to launder money, money laundering and other charges. He remains a fugitive in this case.
Another co-defendant charged in the conspiracy, Adolph Vargas, aka “Adolph Vargas Ibarra,” aka “Al,” pleaded guilty in January 2011 to conspiracy to distribute five kilograms or more of cocaine and one count of money laundering. Vargas was sentenced in November 2011 to 97 months in prison followed by two years of supervised release.
On July 22, 2011, the court entered a final forfeiture order in the case against all of the defendants. The forfeiture order included two recreational vehicles, two .38 caliber semi-automatic pistols, various vehicles and more than $4 million, all of which represented drug proceeds that law enforcement recovered during the course of the investigation of this case.
The case was investigated by the FBI, the Drug Enforcement Administration, the Las Vegas Metropolitan Police Department and the Internal Revenue Service - Criminal Investigation.
The case was prosecuted by Trial Attorneys Marty Woelfle and Margaret Honrath of the Criminal Division’s Organized Crime and Gang Section, with substantial assistance from the U.S. Attorney’s Office for the District of Nevada.
North Carolina Businessman Guilty of Failing to Pay More Than $15 Million in Payroll Taxes for Temporary Staffing CompaniesRead the Press Release
WASHINGTON - Bruce Gregory Harrison III was convicted yesterday following a jury trial in federal court in Winston-Salem, N.C., announced the Department of Justice. Harrison had been charged in a 63-count indictment with large-scale payroll tax fraud and failure to file individual income tax returns. The evidence at trial proved that Harrison failed to pay over more than $15 million dollars in federal taxes withheld from the pay of his thousands of employees in the years 2004-2006 and 2009.
“Mr. Harrison not only defrauded his own employees, but he defrauded the American people as well,” said Ripley Rand, U.S. Attorney for the Middle District of North Carolina. “This sort of conduct is intolerable, especially during these difficult economic times, and we will do everything we can to make sure it is punished accordingly.”
“Honest, hard-working taxpayers count on their payroll deductions for Social Security and Medicare being paid over to fund their retirement and health care needs,” said John A. DiCicco, Principal Deputy Assistant Attorney General for the Justice Department’s Tax Division. “They should rest assured that those who would steal those funds will be prosecuted to the fullest extent of the law.”
“The IRS-Criminal Investigation Division takes these violations of law very seriously. Payroll tax fraud results in the loss of tax revenue to the United States government and the loss of future social security or Medicare benefits for the employees,” said Victor S.O. Song, Chief of the Internal Revenue Service (IRS) – Criminal Investigation.
According to the trial evidence and other documents filed in the case, Harrison, a resident of Greensboro, N.C., did business under various corporate names including U.S.A. Staffing and Compensation Management Inc. He owned or controlled temporary staffing companies operating in at least nine states. Harrison’s staffing companies were headquartered in Guilford County, N.C., and contracted with client businesses to provide temporary workers. Harrison’s companies promised to assume full responsibility for the payment of wages and the withholding and transmitting of taxes to the IRS for those employees. Instead, Harrison failed to account for and pay over in excess of $15 million in federal payroll taxes for the employees of those companies. The evidence at trial showed that Harrison caused false bank statements to be presented to auditors to conceal the nonpayment of the payroll taxes.
Harrison was also convicted of corruptly endeavoring to obstruct the IRS by means of false statements to IRS revenue officers. Evidence established he had used company funds to purchase personal residences, to buy a yacht and to finance commercial motion pictures, including National Lampoon’s Pucked and Home of the Giants. Harrison was also convicted of failing to timely file his own income tax returns for 2004, 2005 and 2006. Following the jury verdict, Chief Judge James A. Beaty Jr. ordered Harrison detained. Sentencing is scheduled for April 6, 2012, at 9:30 a.m. in Winston-Salem.
U.S. Attorney Rand and Principal Deputy Assistant Attorney General DiCicco commended Assistant U.S. Attorneys Frank Chut and Terri-Lei O’Malley and Tax Division Trial Attorney Jeffrey McLellan, and the IRS Agents who assisted them, in successfully prosecuting the case.
Justice Department Settles Lawsuit with Commonwealth of Massachusetts and City of Brockton, Mass., to Enforce Employment Rights of U.S. Army ReservistRead the Press Release
WASHINGTON - The Justice Department announced today that the city of Brockton, Mass., promoted U.S. Army Reservist Brian Benvie on Dec. 16, 2011, to the position of lieutenant in the city’s police department, and that the commonwealth of Massachusetts has afforded him retroactive seniority and $32,356.84 of backpay in that position. The promotion and other related relief satisfy the terms of a settlement agreement entered after the Department of Justice filed a complaint in U.S. District Court for the District of Massachusetts on Dec. 16, 2010. The complaint alleged that the entities violated the Uniformed Services Employment and Reemployment Rights Act (USERRA) when they refused to permit Benvie to take the October 2008 lieutenants’ promotional exam, thereby denying him proper reemployment with the seniority, status and benefits he would have enjoyed but for his military service.
Subject to certain conditions, USERRA requires employers to promptly reemploy returning service members in the positions they would have held had their employment not been interrupted by military service, or in a position of like seniority, status and pay.
The department’s complaint alleged that the city and the commonwealth violated 38 U.S.C. §§ 4312-13, among other ways, by: failing to recognize and give full effect to Benvie’s retroactive promotion date to sergeant – the date he would have been promoted to sergeant but for his military service. The complaint also alleged that this failure to fully recognize Benvie’s retroactive promotion date to the sergeant position subsequently led the defendants to refuse to permit Benvie the opportunity to take the October 2008 lieutenants’ promotional exam, thereby continuing to deny Benvie proper reemployment with the seniority, status and benefits he would have enjoyed but for his military service.
“The men and women who bravely serve our nation in the armed forces should not have to sacrifice their civilian career opportunities to do so. Employers have a legal obligation to ensure returning service members are placed back into the appropriate position and status, when they return from military duty, as required by law,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The Civil Rights Division is committed to protecting the rights of those who, through their courage and sacrifice, secure the rights of all Americans.”
“Our service members must be able to serve their nation and its citizens with the confidence that they will not face discrimination in employment when they return,” said Carmen Ortiz, U.S. Attorney for the District of Massachusetts. “The United States Attorney’s Office remains committed to protecting the rights of the many brave soldiers in the Commonwealth of Massachusetts.”
The case was litigated by Assistant U.S. Attorneys Sonya Rao and Jennifer Serafyn in the U.S. Attorney’s Office for the District of Massachusetts, in collaboration with the Employment Litigation Section of the Civil Rights Division of the Justice Department. The case stems from a referral from the U.S. Labor Department following an investigation by its Veterans’ Employment and Training Service.
The Justice Department’s Civil Rights Division and the U.S. Attorney’s Offices have given a high priority to the enforcement of service members’ rights under USERRA. Additional information about USERRA can be found on the Justice Department’s websites at www.justice.gov/crt/emp and www.servicemembers.gov , as well as on the Labor Department’s website at www.dol.gov/vets/programs/userra/main.htm .
Justice Department Requires Divestiture in $7.9 Billion Merger of Exelon Corporation and Constellation Energy GroupRead the Press Release
WASHINGTON — The Department of Justice announced that it will require Exelon Corporation and Constellation Energy Group Inc. to divest three electricity generating plants in Maryland in order to proceed with their $7.9 billion merger. The department said that the transaction, as originally proposed, would substantially lessen competition for wholesale electricity, ultimately increasing electricity prices for millions of consumers in the mid-Atlantic region.
The department’s Antitrust Division filed a civil lawsuit today in U.S. District Court in Washington, D.C., to block the proposed transaction. At the same time, the department filed a proposed settlement that, if approved by the court, would resolve the department’s competitive concerns and the lawsuit.
“Competition in wholesale electricity markets is vital to the economic well-being of consumers and businesses,” said Sharis A. Pozen, Acting Assistant Attorney General for the Antitrust Division. “These divestitures will preserve that critical competition for the benefit of electricity customers throughout the mid-Atlantic.”
According to the complaint, the merger would create one of the largest electricity companies in the United States with total assets of $72 billion and annual revenues of $33 billion, and would combine the assets of two large competitors in the mid-Atlantic region. Together, the companies would own between 22 and 28 percent of the generating capacity in the densely populated mid-Atlantic area encompassing Delaware, the District of Columbia, New Jersey, eastern Pennsylvania, and parts of Maryland and Virginia. The department said that the combination of the assets would enhance the incentive and ability of the merged firm to raise wholesale electricity prices and reduce output.
Under the terms of the proposed settlement, the merged firm must divest three electricity plants, which in total provide more than 2,600 megawatts of generating capacity. The plants to be divested are Brandon Shores and H.A. Wagner in Anne Arundel County, Md., and C.P. Crane in Baltimore County, Md.
Exelon is incorporated in Pennsylvania and has its headquarters in Chicago. Exelon owns the PECO utility of Philadelphia and the Commonwealth Edison utility of Chicago. Exelon had $18.6 billion of revenues in 2010.
Constellation is incorporated in Maryland and has its headquarters in Baltimore. Constellation owns the BG&E utility of Baltimore. Constellation had $14.3 billion of revenues in 2010.
As required by the Tunney Act, the proposed settlement and the department’s competitive impact statement will be published in the Federal Register. Any person may submit written comments concerning the proposed settlement during a 60-day comment period to William H. Stallings, Chief, Transportation, Energy and Agriculture Section, Antitrust Division, U.S. Department of Justice, 450 Fifth St. N.W., Suite 8000, Washington, D.C. 20530, 202-514-9323. At the conclusion of the 60-day comment period, the U.S. District Court for the District of Columbia may enter the proposed settlement upon finding that it is in the public interest.
Justice Department Reaches $335 Million Settlement to Resolve Allegations of Lending Discrimination by Countrywide Financial CorporationRead the Press Release
The Department of Justice today filed its largest residential fair lending settlement in history to resolve allegations that Countrywide Financial Corporation and its subsidiaries engaged in a widespread pattern or practice of discrimination against qualified African-American and Hispanic borrowers in their mortgage lending from 2004 through 2008.
The settlement provides $335 million in compensation for victims of Countrywide’s discrimination during a period when Countrywide originated millions of residential mortgage loans as one of the nation’s largest single-family mortgage lenders.
The settlement, which is subject to court approval, was filed today in the U.S. District Court for the Central District of California in conjunction with the department’s complaint which alleges that Countrywide discriminated by charging more than 200,000 African-American and Hispanic borrowers higher fees and interest rates than non-Hispanic white borrowers in both its retail and wholesale lending. The complaint alleges that these borrowers were charged higher fees and interest rates because of their race or national origin, and not because of the borrowers’ creditworthiness or other objective criteria related to borrower risk.
The United States also alleges that Countrywide discriminated by steering thousands of African-American and Hispanic borrowers into subprime mortgages when non-Hispanic white borrowers with similar credit profiles received prime loans. All the borrowers who were discriminated against were qualified for Countrywide mortgage loans according to Countrywide’s own underwriting criteria.
“The department’s action against Countrywide makes clear that we will not hesitate to hold financial institutions accountable, including one of the nation’s largest, for lending discrimination,” said Attorney General Eric Holder. “These institutions should make judgments based on applicants’ creditworthiness, not on the color of their skin. With today’s settlement, the federal government will ensure that the more than 200,000 African-American and Hispanic borrowers who were discriminated against by Countrywide will be entitled to compensation.”
The settlement resolves the United States’ pricing and steering claims against Countrywide for its discrimination against African Americans and Hispanics.
The United States’ complaint alleges that African-American and Hispanic borrowers paid more than non-Hispanic white borrowers, not based on borrower risk, but because of their race or national origin. Countrywide’s business practice allowed its loan officers and mortgage brokers to vary a loan’s interest rate and other fees from the price it set based on the borrower’s objective credit-related factors . This subjective and unguided pricing discretion resulted in African American and Hispanic borrowers paying more. The complaint further alleges that Countrywide was aware the fees and interest rates it was charging discriminated against African-American and Hispanic borrowers, but failed to impose meaningful limits or guidelines to stop it.
“Countrywide’s actions contributed to the housing crisis, hurt entire communities, and denied families access to the American dream,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “We are using every tool in our law enforcement arsenal, including some that were dormant for years, to go after institutions of all sizes that discriminated against families solely because of their race or national origin.”
The United States’ complaint also alleges that, as a result of Countrywide’s policies and practices, qualified African-American and Hispanic borrowers were placed in subprime loans rather than prime loans even when similarly-qualified non-Hispanic white borrowers were placed in prime loans. The discriminatory placement of borrowers in subprime loans, also known as “steering,” occurred because it was Countrywide’s business practice to allow mortgage brokers and employees to place a loan applicant in a subprime loan even when the applicant qualified for a prime loan . In addition, Countrywide gave mortgage brokers discretion to request exceptions to the underwriting guidelines, and Countrywide’s employees had discretion to grant these exceptions.
This is the first time that the Justice Department has alleged and obtained relief for borrowers who were steered into loans based on race or national origin, a practice that systematically placed borrowers of color into subprime mortgage loan products while placing non-Hispanic white borrowers with similar creditworthiness in prime loans. By steering borrowers into subprime loans from 2004 to 2007, the complaint alleges, Countrywide harmed those qualified African-American and Hispanic borrowers. Subprime loans generally carried higher-cost terms, such as prepayment penalties and exploding adjustable interest rates that increased suddenly after two or three years, making the payments unaffordable and leaving the borrowers at a much higher risk of foreclosure.
The settlement also resolves the department’s claim that Countrywide violated the Equal Credit Opportunity Act by discriminating on the basis of marital status against non-applicant spouses of borrowers by encouraging them to sign away their home ownership rights . The law allows married individuals to apply for credit either in their own name or jointly with their spouse, even when the property is owned by both spouses. For applications made by married individuals applying solely in their own name between 2004 and 2008, Countrywide encouraged non-applicant spouses to sign quitclaim deeds or other documents transferring their legal rights and interests in jointly-held property to the borrowing spouse. Non-applicant spouses who execute a quitclaim deed risk substantial uncertainty and financial loss by losing all their rights and interests in the property securing the loan.
In addition, the settlement requires Countrywide to implement policies and practices to prevent discrimination if it returns to the lending business during the next four years. Countrywide currently operates as a subsidiary of Bank of America but does not originate new loans.
The department’s investigation into Countrywide’s lending practices began after referrals by the Board of Governors of the Federal Reserve and the Office of Thrift Supervision to the Justice Department’s Civil Rights Division in 2007 and 2008 for potential patterns or practices of discrimination by Countrywide.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF). President Obama established the interagency FFETF to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. For more information on the task force, visit www.StopFraud.gov .
A copy of the complaint and proposed settlement order, as well as additional information about fair lending enforcement by the Justice Department, can be obtained from the Justice Department website at www.justice.gov/fairhousing.
Florida-Based Defense Contractor Pays US $4.75 Million to Resolve Allegations Related to Defective Bomb FuzesRead the Press Release
WASHINGTON - Kaman Precision Products Inc., an Orlando, Fla., defense contractor, will pay the United States $4.75 million to resolve allegations that the company submitted false claims for non-conforming fuzes sold to the U.S. Army for use in “bunkerbuster” bombs, the Justice Department announced today. In addition, the settlement requires Kaman to adhere to a compliance program and to dismiss administrative claims that it had made against the Army after the termination of its contract.
The lawsuit, filed in the Middle District of Florida by the United States under the False Claims Act for breach of contract, alleged that the company knowingly substituted a component in four lots of fuzes that made them unsafe for use in military operations. Specifically, the United States’ allegations relate to FMU-143 fuzes for use in hard target penetration warheads, colloquially referred to as “bunkerbuster” bombs.
The government alleged that Kaman knowingly substituted non-conforming bellows motors for the specified motors in four lots of fuzes supplied to the military, and that the non-conforming parts could cause the fuzes to fire prematurely, creating a hazard for military personnel and causing misfires of the warheads. The military discovered the parts substitution and quarantined the defective fuzes.
Today’s settlement resolved those claims, as well as other administrative claims that the Army brought after it terminated Kaman’s contract for the company’s violation of its contractual obligations.
“The Department has zero tolerance for defense contractors who put the lives of our military personnel in danger,” said Tony West, Assistant Attorney General for the Civil Division. “When this type of misconduct is alleged, we will actively pursue legal remedies to reclaim taxpayer dollars as well as ensure the safety of our men and women in uniform.”
“Integrity in the procurement process is fundamental to our nation’s security and the safety of our military personnel,” said Robert E. O’Neill, U.S. Attorney for the Middle District of Florida. “This settlement represents a significant achievement in our long standing commitment to the enforcement of civil laws in the area of defense contracting.”
This settlement resulted from the efforts of the U.S. Attorney’s Office for the Middle District of Florida; the Commercial Litigation Branch of the Justice Department’s Civil Division; the Defense Criminal Investigative Service; the Army Criminal Investigation Command; and the U.S. Army Legal Services Agency Contract and Fiscal Law Division.
El Departamento de Justicia Llega a un Acuerdo Conciliatorio por 335 Millones de Dólares en Resolución de Alegatos de Discriminación en el Otorgamiento de Préstamos por Parte de Countrywide Financial Corpora...Read the Press Release
WASHINGTON - El Departamento de Justicia realizó hoy el mayor acuerdo conciliatorio de la historia asociado al otorgamiento justo de préstamos, en resolución de alegatos que Countrywide Financial Corporation y sus subsidiarias demostraron un patrón o práctica extendidos de discriminación contra prestatarios afroestadounidenses e hispanos calificados, en el otorgamiento de sus préstamos hipotecarios del 2004 al 2008.
El acuerdo conciliatorio dispone el pago de 335 millones de dólares en indemnizaciones a víctimas de la discriminación por parte de Countrywide durante un período en el que Countrywide originó millones de hipotecas para vivienda como uno de los mayores prestamistas hipotecarios de viviendas unifamiliares del país.
El acuerdo conciliatorio, sujeto a aprobación del tribunal, fue presentado hoy en el Tribunal Federal de Distrito para el Distrito Central de California, en conjunto con la demanda del departamento, la que alega que Countrywide discriminó al cobrarles a más de 200,000 prestatarios afroestadounidenses e hispanos cargos y tasas de interés más altos que a prestatarios blancos no hispanos, tanto en sus préstamos minoristas como mayoristas. La demanda alega que se les cobraron a estos prestatarios cargos y tasas de interés más altos debido a su raza u origen nacional, y no debido a la solvencia de los prestatarios u otros criterios objetivos relacionados con el riesgo que presentaban. Los Estados Unidos también alega que Countrywide discriminó al otorgar hipotecas de tipo "subprime" (subpreferenciales) a miles de prestatarios afroestadounidenses e hispanos, cuando prestatarios blancos no hispanos con perfiles de crédito similares recibieron préstamos de tipo "prime" (preferenciales). Todos los prestatarios objeto de discriminación cumplían los requisitos para hipotecas de Countrywide, de acuerdo con los propios criterios de suscripción de Countrywide.
"La acción del departamento contra Countrywide deja claro que no vacilaremos en responsabilizar a todos los prestamistas, incluyendo a los más importantes del país, por discriminación en el otorgamiento de préstamos", dijo el Secretario de Justicia de EE.UU. Eric Holder. "Los prestamistas nunca deben tomar una determinación basada en el color de la piel de la persona, sino basada en la solvencia de dicha persona. Con el acuerdo conciliatorio de hoy el gobierno federal se asegura que más de 200,000 prestatarios afroestadounidenses e hispanos que fueron objeto de discriminación por parte de Countrywide serán indemnizados".
El acuerdo conciliatorio resuelve los cargos de los Estados Unidos contra Countrywide asociados con la fijación de precios y el direccionamiento debido a su discriminación contra afroestadounidenses e hispanos.
La demanda de los Estados Unidos alega que prestatarios afroestadounidenses e hispanos pagaron más que prestatarios blancos no hispanos, no basado en el riesgo financiero que presentaban, sino debido a su raza u origen nacional. La práctica comercial de Countrywide permitió que sus oficiales de préstamos y corredores hipotecarios variaran la tasa de interés de un préstamo y otros cargos respecto al precio establecido basado en factores crediticios objetivos del prestatario. Debido a esta libertad subjetiva y sin orientación, los prestatarios afroestadounidenses e hispanos pagaron más. Asimismo, la demanda alega que Countrywide sabía que los cargos y tasas de interés que estaba cobrando discriminaban contra prestatarios afroestadounidenses e hispanos, pero falló en imponer límites o directrices concretos para impedirlo.
"Las acciones de Countrywide contribuyeron a la crisis de vivienda, hirieron comunidades completas y denegaron acceso al sueño americano a familias", dijo Thomas E. Perez, Secretario Auxiliar de la División de Derechos Civiles. "Estamos usando todas las opciones en nuestro arsenal, incluyendo algunas que habían estado inactivas por años para responsabilizar a instituciones de todo tamaño que discriminaron contra familias sólo por su raza u origen nacional".
La demanda de los Estados Unidos también alega que, como resultado de las políticas y prácticas de Countrywide, se les otorgaron a prestatarios afroestadounidenses e hispanos calificados préstamos tipo "subprime" en lugar de préstamos "prime", aunque se les otorgaron a prestatarios blancos no hispanos con calificaciones similares préstamos tipo "prime". El otorgamiento discriminatorio de los préstamos "subprime", también conocido como "direccionamiento" ["steering"], ocurrió porque era la práctica comercial de Countrywide permitir que los corredores hipotecarios y empleados otorgaran un préstamo "subprime" a un prestatario, aunque el prestatario cumpliera con los requisitos para un préstamo tipo "prime". Además, Countrywide les otorgó a los corredores hipotecarios la libertad de solicitar excepciones a las directrices de suscripción y los empleados de Countrywide tenían libertad para otorgar dichas excepciones.
Esta es la primera vez que el Departamento de Justicia alega y obtiene reparación para prestatarios a los que se les otorgaron préstamos basados en su raza u origen nacional, una práctica que sistemáticamente otorgó a prestatarios de color productos hipotecarios "subprime", y otorgó a prestatarios blancos no hispanos con solvencia similar préstamos tipo "prime". La demanda alega que al orientar a prestamistas hacia préstamos "subprime" del 2004 al 2007, Countrywide perjudicó a dichos prestamistas afroestadounidenses e hispanos calificados. Los préstamos tipo "subprime" tenían, en general, costos más altos, tales como penalidades de pago prematuro y tasas de interés ajustables que aumentaban repentinamente después de dos o tres años, haciendo impagables las cuotas y colocando a los prestatarios bajo un riesgo mucho más alto de ejecución hipotecaria.
El acuerdo conciliatorio también resuelve el alegato del departamento que Countrywide violó la Ley de Igualdad de Oportunidades de Crédito al discriminar debido al estado civil de cónyuges no solicitantes de los prestatarios, al incentivarlos a que renunciaran a sus derechos como propietarios de la vivienda. La ley permite que personas casadas soliciten crédito, ya sea en su propio nombre o conjuntamente con su cónyuge, aunque ambos cónyuges sean propietarios de la propiedad. En los casos de solicitudes presentadas por personas casadas solicitando únicamente en su propio nombre entre 2004 y 2008, Countrywide incentivó a los cónyuges no solicitantes a que firmaran escrituras de traspaso de propiedad u otros documentos, transfiriendo sus derechos legales e intereses en la propiedad conjunta al cónyuge prestatario. Los cónyuges no solicitantes que firmen un traspaso de propiedad corren el riesgo de incertidumbre y pérdidas financieras sustanciales al perder todos sus derechos e intereses en la propiedad que garantiza el préstamo.
Asimismo, el acuerdo conciliatorio exige que Countrywide implemente políticas y prácticas para prevenir la discriminación si retoma la actividad de otorgamiento de préstamos durante los próximos cuatro años. Actualmente, Countrywide opera como una subsidiaria de Bank of America, pero no otorga préstamos nuevos.
La investigación de las prácticas de otorgamiento de préstamos de Countrywide realizada por el departamento comenzó después que la Junta de Gobernadores de la Reserva Federal [Board of Governors of the Federal Reserve] y la Oficina de Supervisión de Préstamos [Office of Thrift Supervision] refirieran en el 2007 y 2008 probables patrones o prácticas de discriminación por parte de Countrywide a la División de Derechos Civiles del Departamento de Justicia.
El anuncio del día de hoy es parte de un esfuerzo en marcha de la Fuerza de Tarea Interagencia de Coacción contra el Fraude Financiero del Presidente Obama. El Presidente Obama estableció la Fuerza de Tarea Interagencia de Coacción contra el Fraude Financiero para llevar a cabo una iniciativa enérgica, coordinada y proactiva para investigar y enjuiciar delitos financieros. La fuerza de tarea incluye a representantes de una amplia gama de dependencias federales, autoridades regulatorias, inspectores generales y miembros de las fuerzas del orden público estatales y locales, quienes, trabajando juntos, aprovechan un poderoso espectro de recursos de coacción penal y civil. La fuerza de tarea está trabajando para mejorar la labor en todo el poder ejecutivo federal, y con asociados estatales y locales, para investigar y enjuiciar los delitos financieros importantes, asegurar un castigo justo y eficaz para quienes cometan delitos financieros, combatir la discriminación en los mercados de préstamos y financieros y recuperar fondos para las víctimas de delitos financieros. Para obtener más información sobre la fuerza de tarea, visite www.StopFraud.gov. Se puede obtener una copia de la demanda y la orden de acuerdo conciliatorio propuesto, así como información adicional sobre la aplicación de las leyes de préstamos justos por el Departamento de Justicia, en el portal del Departamento de Justicia en Internet, www.justice.gov/fairhousing.
Defendant Charged with Alleged Participation in the Murder of ICE Special Agent Jaime Zapata and the Attempted Murder of ICE Special Agent Victor Avila Is Extradited from Mexico to the United StatesRead the Press Release
WASHINGTON – Julian Zapata Espinoza, also known as “Piolin,” has been extradited from Mexico to the United States to face charges for his alleged participation in the murder of U.S. Immigration and Customs Enforcement (ICE) Special Agent Jaime Zapata and the attempted murder of ICE Special Agent Victor Avila on Feb. 15, 2011, in Mexico.
The charges and extradition were announced today by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney Ronald C. Machen Jr. for the District of Columbia; Kevin Perkins, Assistant Director for the FBI Criminal Investigative Division; and ICE Director John Morton.
On April 19, 2011, a federal grand jury in the District of Columbia returned a four-count indictment against Zapata Espinoza, charging him with one count of murder of an officer or employee of the United States, for the murder of ICE Special Agent Zapata; one count of attempted murder of an officer or employee of the United States and one count of attempted murder of an internationally protected person, both for the attempted murder of ICE Special Agent Avila; and one count of using, carrying, brandishing and discharging a firearm during and in relation to a crime of violence causing death.
“Julian Zapata Espinoza (“Piolin”) allegedly participated in the murder of ICE Special Agent Jaime Zapata and the attempted murder of ICE Special Agent Victor Avila,” said Assistant Attorney General Breuer. “The indictment unsealed today, and the successful extradition of Piolin to the United States, reflect the Justice Department’s vigorous and determined efforts to seek justice for Agents Zapata and Avila. We will continue to work closely with our law enforcement partners in Mexico to hold violent criminals accountable.”
“This prosecution exemplifies our unwavering effort to prosecute those who committed this heinous offense against U.S. law enforcement agents,” said U.S. Attorney Machen. “We will not rest until those responsible for the murder of Agent Zapata and the wounding of Agent Avila are brought to justice.”
“The extradition of Julian Zapata Espinoza to face charges in the U.S. is a significant development in the ongoing investigation into the murder of Special Agent Jaime Zapata and attack on Special Agent Victor Avila,” said Kevin Perkins, Assistant Director for the FBI Criminal Investigative Division. “This extradition would not have been possible without the dedicated efforts of all involved in this case. The FBI, DHS and the Department of Justice will continue its pursuit of justice for the Zapata family.”
“The extradition and charges filed against Zapata Espinoza is an important step in bringing Jaime and Victor’s alleged shooters to justice,” said ICE Director Morton. “All of us at ICE are encouraged by today’s action and appreciate the unwavering work and support of all our law enforcement partners in this case. Our hearts and prayers continue to go out to Jaime’s family and his close colleagues within the ICE community. ICE will continue to see that Jaime and Victor’s work is done by continuing our efforts with all involved in working on this case.”
The indictment was unsealed today, when Zapata Espinoza made his initial appearance before U.S. District Chief Judge Royce Lamberth of the District of Columbia. Zapata Espinoza was ordered detained without bail. His next appearance in court is scheduled for Jan. 25, 2012.
The case is being investigated by the FBI, with substantial assistance from ICE, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Drug Enforcement Administration, the U.S. Customs and Border Patrol, the Diplomatic Security Service and the U.S. Marshals Service. The investigation was also coordinated with the assistance of the Government of Mexico.
The case is being prosecuted by the Organized Crime and Gang Section and the Narcotic and Dangerous Drugs Section of the Justice Department’s Criminal Division and the U.S. Attorney’s Office for the District of Columbia. The Office of International Affairs of the Justice Department’s Criminal Division provided substantial assistance.
An indictment is a formal charging document and defendants are presumed innocent until proven guilty.
Chinese National Sentenced to 87 Months in Prison for Economic Espionage and Theft of Trade SecretsRead the Press Release
WASHINGTON – Kexue Huang, a Chinese national and a former resident of Carmel, Ind., was sentenced today to 87 months in prison and three years of supervised release on charges of economic espionage to benefit components of the Chinese government and theft of trade secrets.
The sentencing was announced by Assistant Attorney General Lanny A. Breuer of the Criminal Division, Assistant Attorney General for National Security Lisa O. Monaco, U.S. Attorney Joseph H. Hogsett of the Southern District of Indiana, U.S. Attorney B. Todd Jones of the District of Minnesota, and Robert J. Holley, Special Agent in Charge of the Indianapolis Field Office of the FBI.
This is the first prosecution in Indiana for foreign economic espionage. Since its enactment in 1996, there have been a total of eight cases charged nationwide under the Economic Espionage Act.
“Mr. Huang stole valuable trade secrets from two American companies and disseminated them to individuals in Germany and China,” said Assistant Attorney General Breuer. “Economic espionage and trade secret theft are serious crimes that, as today’s sentence shows, must be punished severely. Protecting trade secrets is vital to our nation’s economic success, and we will continue vigorously to enforce our trade secret and economic espionage statutes.”
“The theft of American trade secrets for the benefit of China and other nations poses a continuing threat to our economic and national security,” said Lisa Monaco, Assistant Attorney General for National Security. “Today’s sentence demonstrates our commitment to detect, prosecute and hold accountable those engaged in these illegal activities.”
“The United States Attorney’s Office takes seriously its obligation to protect Hoosier businesses from economic espionage,” U.S. Attorney Hogsett said. “I thank the federal agents and prosecutors who helped bring this landmark case to a successful conclusion.”
“The Kexue Huang investigation and prosecution is an excellent example of how law enforcement and American corporations can work together to protect our corporations from economic espionage and the theft of extremely valuable trade secrets,” FBI Special Agent in Charge Holley stated. “Dow Agrosciences and the FBI cooperated extensively to make this important investigation a success. Economic espionage is a crime that undermines the competiveness of our corporations and our national interest in protecting intellectual property. The FBI will continue to work collaboratively with the private sector to aggressively investigate those individuals that seek to harm our country’s economic interests by stealing our intellectual property and thereby undermining our competitive economic position in the world.”
Huang, 46, was sentenced by the U.S. District Judge William T. Lawrence in the Southern District of Indiana. On Oct. 18, 2011, Huang pleaded guilty to one count of an indictment filed in the Southern District of Indiana for misappropriating and transporting trade secrets from Dow AgroSciences LLC with the intent to benefit components of the People’s Republic of China (PRC). Huang also pleaded guilty to one count of an indictment filed in the District of Minnesota for stealing a trade secret from a second company, Cargill Inc.
According to court documents, from January 2003 until February 2008, Huang was employed as a research scientist at Dow, a leading international agricultural company based in Indianapolis that provides agrochemical and biotechnology products. In 2005, Huang became a research leader for Dow in strain development related to unique, proprietary organic insecticides marketed worldwide.
As a Dow employee, Huang signed an agreement that outlined his obligations in handling confidential information, including trade secrets. The agreement prohibited him from disclosing any confidential information without Dow’s consent. Dow employed several layers of security to preserve and maintain confidentiality and to prevent unauthorized use or disclosure of its trade secrets.
Huang admitted that during his employment at Dow, he misappropriated several Dow trade secrets. According to plea documents, from 2007 to 2010, Huang transferred and delivered the stolen Dow trade secrets to individuals in Germany and the PRC. With the assistance of these individuals, Huang used the stolen materials to conduct unauthorized research with the intent to benefit foreign universities that were tied to the PRC government. Huang also admitted that he pursued steps to develop and produce the misappropriated Dow trade secrets in the PRC, including identifying manufacturing facilities in the PRC that would allow him to compete directly with Dow in the established organic pesticide market.
According to court documents, after Huang left Dow, he was hired in March 2008 by Cargill, an international producer and marketer of food, agricultural, financial and industrial products and services. Huang worked as a biotechnologist for Cargill until July 2009 and signed a confidentiality agreement promising never to disclose any trade secrets or other confidential information of Cargill. Huang admitted that during his employment with Cargill, he stole one of the company’s trade secrets – a key component in the manufacture of a new food product, which he later disseminated to another person, specifically a student at Hunan Normal University in the PRC.
In the plea agreement, Huang admitted that the aggregated loss from the misappropriated trade secrets exceeds $7 million but is less than $20 million.
The case is being prosecuted by Assistant U.S. Attorney Cynthia J. Ridgeway of the Southern District of Indiana, Trial Attorneys Mark L. Krotoski and Evan C. Williams of the Criminal Division’s Computer Crime and Intellectual Property Section (CCIPS), and Assistant U.S. Attorney Jeffrey Paulsen of the District of Minnesota, with assistance from the National Security Division’s Counterespionage Section. Significant assistance was provided by the CCIPS Cyber Crime Lab and the Office of International Affairs in the Justice Department’s Criminal Division.
The sentence announced today is an example of the type of efforts being undertaken by the Department of Justice Task Force on Intellectual Property (IP Task Force). Attorney General Eric Holder created the IP Task Force to combat the growing number of domestic and international intellectual property crimes, protect the health and safety of American consumers, and safeguard the nation’s economic security against those who seek to profit illegally from American creativity, innovation and hard work. The IP Task Force seeks to strengthen intellectual property rights protection through heightened criminal and civil enforcement, greater coordination among federal, state and local law enforcement partners, and increased focus on international enforcement efforts, including reinforcing relationships with key foreign partners and U.S. industry leaders. To learn more about the IP Task Force, go to www.justice.gov/dag/iptaskforce/.
Attorney General Holder Announces New Federal Bureau of Prisons DirectorRead the Press Release
Attorney General Eric Holder today announced the appointment of Charles E. Samuels Jr. as the director of the Federal Bureau of Prisons (BOP).
“I am pleased that Charles will continue to build upon 23 years of distinguished service at the department,” said Attorney General Holder. “I am confident that Charles will provide the kind of effective and innovative leadership that will increase efficiency, further expand prisoner development and reentry programs, and allow for transparency and accountability at the Federal Bureau of Prisons – while remaining true to the BOP’s core mission of protecting public safety.”
“I am very honored to be appointed by Attorney General Holder to serve as the director for the Federal Bureau of Prisons and will continue to work with the great staff at every level of the BOP to meet our mission to protect society and provide meaningful life skills and reentry programs for our inmate population,” said Samuels. “I also look forward to working with the leadership and others in the Department of Justice, throughout the federal government and in states and local communities to further the department’s goals and objectives.”
In his current position as assistant director of the Correctional Programs Division for the BOP, which he has held since January 2011, Samuels oversees all inmate management and program functions, including intelligence and counterterrorism initiatives; security and emergency planning; inmate transportation; case management; mental health and religious services; private prisons; and community corrections. Samuels is also responsible for inmate skills development and reentry initiatives, and shares the attorney general’s commitment to reduce recidivism by preparing incarcerated people to return to their communities and become productive members of society.
Samuels began his career with the BOP as a correctional officer in 1988. He was promoted to a number of positions within the BOP including correctional programs administrator and executive assistant for the Northeast Regional Office. Samuels has served as associate warden at the Federal Correctional Institutions at Otisville, N.Y. and Beckley, W.Va.; ombudsman in the BOP’s Central Office; warden at the Federal Correctional Institutions at Manchester, Ky. and Fort Dix, N.J.; and senior deputy assistant director of the Correctional Programs Division.
Samuels is a native of Birmingham, Ala. He received his Bachelor of Science in Social and Behavioral Sciences from the University of Alabama in Birmingham. Samuels is a graduate of the Harvard University Executive Education Program.
The mission of the Federal Bureau of Prisons is to protect society by confining offenders in the controlled environments of prisons and community-based facilities that are safe, humane, cost-efficient and appropriately secure, while providing work and other self-improvement opportunities to assist offenders in becoming law-abiding citizens.
Alabama Woman Sentenced to 94 Months in Prison for Stealing Identities of Student Loan BorrowersRead the Press Release
WASHINGTON – Janika Fernae Bates, a resident of Millbrook, Ala., was sentenced today in the Middle District of Alabama to 94 months in federal prison for stealing identities of student loan borrowers and providing them to a co-conspirator, who used them to file false tax returns, the Justice Department and Internal Revenue Service (IRS) announced.
On Sept. 23, 2011, a jury in Montgomery, Ala., convicted Bates of identity theft, wire fraud, aggravated identity theft and conspiracy to make false claims for tax refunds.
According to evidence introduced at the five day trial, Bates obtained the names and Social Security numbers of student loan borrowers from the databases at her former employer and conspired to use the stolen identifying information to steal money from the government and from a bank. Several victims testified that they did not consent to the use of their names and Social Security numbers on tax returns and they testified that they did not receive any money from refunds generated from the false documents filed with the IRS. Evidence also revealed that Bates and her co-conspirator, Keshia Brayboy, fraudulently obtained refund anticipation loans from a bank predicated on the fraudulently filed tax returns. Brayboy pleaded guilty in 2009 to filing a false tax return and served two years in federal prison.
U.S. District Judge Myron H. Thompson also ordered Bates to pay $246,064 in restitution to HSBC Taxpayer Financial Services and $30,211 in restitution to the IRS.
Principal Deputy Assistant Attorney General John A. DiCicco of the Justice Department’s Tax Division commended the IRS Criminal Investigation special agents who investigated this case, Tax Division Trial Attorneys Justin Gelfand and Jason Poole, who are prosecuting the case, and U.S. Attorney George L. Beck Jr. and his entire office for their assistance.
Tuesday 20 December 2011
Washington Man Sentenced to 32 Years for Attempted Bombing of Martin Luther King Unity MarchRead the Press Release
SPOKANE, Wash. – The Justice Department announced today that Kevin William Harpham, 37, of Colville, Wash., has been sentenced to 32 years in prison for the placement of the improvised explosive device alongside the planned Martin Luther King Jr. Day Unity March held on Jan. 17, 2011, in Spokane, Wash. Harpham will serve the rest of his life under court supervision after he is released from prison. Harpham pleaded guilty in Sept. 7, 2011, to two counts of a superseding indictment; attempted use of a weapon of mass destruction and attempt to cause bodily injury with an explosive device because of actual or perceived race, color and national origin of any person.
On March 9, 2011, Harpham was arrested for placing the explosive device alongside the Unity March. The march was attended by approximately 2,000 individuals, including racial minorities. The explosive device placed by Harpham was capable of inflicting serious injury or death, according to laboratory analysis conducted by the FBI. Harpham admitted that he is a white supremacist and white separatist, and that he placed the explosive device at the march with the intent to cause bodily injury to the person or persons in order to further his racist beliefs.
“Acts of hate like this one have no place in our country in the year 2011, but yet, unfortunately, we continue to see attempted violence in our communities due to racial animus,” said Assistant Attorney General for the Civil Rights Division Thomas Perez. “The Justice Department is committed to enforcing the Matthew Shepard and James Byrd Jr. hate Crimes Prevention Act, and all the tools in our law enforcement arsenal, to prosecute such egregious crimes.
“This case underscores the continuing threat from those who seek to express their hatred through violence and the serious consequences these individuals face for such actions,” said Lisa Monaco, Assistant Attorney General for National Security. “The sentence handed down today is the culmination of an outstanding investigation conducted jointly by federal, state and local law enforcement officials.
Michael C. Ormsby, U.S. Attorney for the Eastern District of Washington, said, “I commend the law enforcement efforts at all phases of the investigation and prosecution of this matter. This was one of the most thorough investigations that I have ever seen and involved multi-levels of law enforcement and multiple offices and other professionals. Our office received significant assistance from the Civil Rights Division and National Security Division of the Justice Department. All who participated should be thanked and congratulated, this was truly a team effort.” U.S. Attorney Ormsby also added, “It is very important that Mr. Harpham receive the significant sentence that he did today to send the message to our community that hate and violence will not be tolerated.”
“Today, Mr. Harpham faces the consequences of his hate-filled act. A prototypical “lone wolf” such as Mr. Harpham presents a particularly vexing threat—with nothing foreshadowing a carefully planned attack,” said Laura M. Laughlin, Special Agent-in-Charge of the FBI Seattle office. “However, the actions of everyday citizens, the Spokane Police Department, the Spokane Explosives Disposal Unit, and the round-the-clock work of Joint Terrorism Task Force and its local, state, and federal members unraveled Mr. Harpham’s plan and swiftly brought him to justice. We will continue to tirelessly disrupt and rapidly apprehend others who attempt to express their hatred though violence.”
This investigation was conducted by the Inland Northwest Joint Terrorism Task Force comprised of the FBI, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the U.S. Marshals Service, the Federal Air Marshal Service, the U.S. Border Patrol, the Department of Homeland Security – Homeland Security Investigations, the Spokane Police Department, the Spokane County Sheriff’s Office and the Washington State Patrol, and with assistance from Stevens County Sheriff’s Office and Washington State Employment Security Department. The Stevens County Road Department also provided significant assistance.
United States Seeks Forfeiture of Property Related to Federal Firearms Smuggling and Money Laundering ChargesRead the Press Release
WASHINGTON – A 10-count civil forfeiture complaint was filed yesterday in the District of New Mexico seeking forfeiture of assets related to a gun shop in Deming, N.M., whose owner and employees were previously indicted on charges related to firearms smuggling and money laundering, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney Kenneth J. Gonzales of the District of New Mexico and Dennis A. Ulrich, acting special agent in charge of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) in El Paso, Texas.
The complaint alleges that, between April 2010 and July 2011, property associated with New Deal Shooting Sports was used in connection with, among other things, a conspiracy to make false statements in connection with the acquisition of firearms and to illegally export firearms to Mexico, a conspiracy to engage in money laundering, and a conspiracy to facilitate the trafficking of narcotics.
According to the complaint, New Deal was owned and operated by Rick Reese. Rick Reese, his wife, Terri Reese, and their two adult sons, Ryin and Remington Reese, worked at New Deal selling firearms, ammunition and other supplies. The complaint alleges, among other things, that the Reeses sold firearms and ammunition to individuals, knowing that these firearms and the ammunition were being illegally sent to Mexico. As set out in the complaint, the investigation of the Reeses included an undercover investigation by federal law enforcement officials. During the undercover investigation, the Reeses sold firearms and ammunition to confidential sources who were working with law enforcement and to undercover law enforcement agents posing as straw purchasers, believing that the confidential sources and agents intended to illegally smuggle the firearms and ammunition to Mexico.
On Aug. 30, 2011, Rick Reese, Terri Reese, Ryin Reese and Remington Reese were arrested on charges contained in a 30-count indictment filed in the District of New Mexico. An indictment is merely a charge and defendants are presumed innocent unless proven guilty.
The civil forfeiture complaint seeks forfeiture of the real property associated with New Deal, and approximately: 1,428 firearms; 1,975,262 rounds of assorted ammunition; 535 canisters of smokeless powder; 4,757 ammunition magazines; $117,823 in gold and silver coins; four vehicles registered to the New Deal; assorted body armor; 17 gun safes; approximately $11,019 from New Deal bank accounts and approximately $106,449 in cash; and one ammunition reloading bench. The properties, except for the real property associated with New Deal, were seized pursuant to seizure warrants issued by a U.S. Magistrate Judge for the District of New Mexico on Aug. 26, 2011, and executed by HSI agents on Aug. 30, 2011. The seized properties are currently in the custody of HSI officials.
The civil case is being prosecuted by Trial Attorneys Jean Weld, Pam Hicks and Kristen Warden and Deputy Chief Frederick Reynolds of the Asset Forfeiture and Money Laundering Section in the Justice Department’s Criminal Division and Assistant U.S. Attorneys Steve Kotz, Nathan Lichvarcik and Maria Y. Armijo of the District of New Mexico. The related criminal case is being prosecuted by Assistant U.S. Attorneys Lichvarcik and Armijo. The case was investigated by U.S. Immigration and Customs Enforcement Homeland Security Investigations with support from the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), the U.S. Marshals Service, U.S. Border Patrol, U.S. Customs and Border Protection, New Mexico State Police and the Dona Ana County Sheriff’s Office.
U.S. Bureau of Prisons Employee Pleads Guilty in Florida to Sexual Abuse of a WardRead the Press Release
WASHINGTON – Bureau of Prisons employee Jack Chris Jackson, 45, pleaded guilty today to the charge of sexual abuse of a ward, announced the Department of Justice.
During the plea proceedings, Jackson admitted to having a sexual relationship with an inmate at the Federal Correctional Institute (FCI) in Miami. This inmate was in Jackson’s custodial and supervisory authority at FCI.
“We will not tolerate corrections officers engaging in this behavior with institutionalized persons,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The Justice Department will vigorously prosecute individuals who abuse their position and authority in this manner.”
U.S. Attorney for the Southern District of Florida Wifredo A. Ferrer added, “This correction officer abused his official position. This conduct is an intolerable breach of trust that not only endangers the safety of inmates but also compromises prison security. Our office will prosecute all official corruption cases to the fullest extent of the law.”
Jackson faces a maximum sentence of 15 years in prison. Sentencing has been set for March 19, 2012.
This case was investigated by the FBI and the Department of Justice Office of Inspector General, and is being prosecuted by Assistant U.S. Attorney Susan Rhee Osborne of the U.S. Attorney’s Office for the Southern District of Florida and Trial Attorney Henry Leventis of the Civil Rights Division.
Twelve Charged in Cleveland for Assaulting Practitioners of the Amish ReligionRead the Press Release
WASHINGTON - The Justice Department announced today that a federal grand jury in Cleveland returned a seven-count indictment charging 10 men and two women, all residents of Ohio, with federal crimes arising out of a series of religiously-motivated assaults on practitioners of the Amish religion. The indictment addresses five separate assaults that occurred between September through November 2011. In each assault, defendants forcibly removed beard and head hair from the victims with whom they had ongoing religious disputes. As set forth in the indictment, the manner in which Amish men wear their beards and Amish women wear their hair are symbols of their faith.
“Every American has the right to worship in the manner of his or her choosing without fear of violent interference,” said Assistant Attorney General for the Civil Rights Division Thomas E. Perez. “The Civil Rights Division will aggressively investigate allegations of religiously motivated violence.”
“For nearly 500 years, people have come to this land so that they could pray however and to whomever they wished,” said U.S. Attorney for the Northern District of Ohio Steven M. Dettelbach. “Violent attempts to attack this most basic freedom have no place in our country.”
“One of our most fundamental rights is freedom of religion,” said Stephen Anthony, Special Agent in Charge of the FBI – Cleveland Field Office. “The FBI, along with our law enforcement partners, are committed to protecting this fundamental right against those who would use violence and intimidation to attack it.”
The indictment charges Samuel Mullet Sr., Johnny S. Mullet, Daniel S. Mullet, Levi F. Miller, Eli M. Miller, Emanuel Shrock, Lester Miller, Raymond Miller, Freeman Burkholder, Anna Miller and Linda Shrock with conspiracy to violate the Matthew Shepard-James Byrd Hate Crimes Prevention Act, which prohibits any person from willfully causing bodily injury to any person, or attempting to do so by use of a dangerous weapon, because of the actual or perceived religion of that person, and Title 18, U.S. Code, Section 1512, which prohibits obstruction of justice, including witness tampering and the destruction or concealment of evidence. The indictment also charges various groups of defendants with each separate assault, and charges Samuel Mullet Sr., Lester Mullet, Levi Miller and Lester Miller with concealing or attempting to conceal various items of tangible evidence, including a camera, photographs and an over-the-counter medication that was allegedly placed in the drink of one of the assault victims.
According to the indictment, Samuel Mullet Sr. is the Bishop of the Amish community in Bergholz, Ohio, while the remaining defendants are all members of that community. Mullet Sr. exerted control over the Bergholz community by taking the wives of other men into his home, and by overseeing various means of disciplining community members, including corporal punishment. As a result of religious disputes with other members of the Ohio Amish community, the defendants planned and carried out a series of assaults on their perceived religious enemies. The assaults involved the use of hired drivers, either by the defendants or the alleged victims, because practitioners of the Amish religion do not operate motor vehicles. The assaults all entailed using scissors and battery-powered clippers to forcibly cut or shave the beard hair of the male victims and the head hair of the female victims. During each assault, the defendants restrained and held down the victims. During some of the assaults, the defendants injured individuals who attempted to intervene to protect or rescue the victims. Following the attacks, some of the defendants participated in discussions about concealing photographs and other evidence of the assaults.
The maximum potential penalty for the conspiracy count is five years in prison. The maximum penalty for the hate crime charges is life in prison. The maximum penalty for the obstruction charge is 20 years in prison.
This case is being investigated by the Cleveland Division of the FBI and is being prosecuted by Assistant U.S. Attorneys Thomas Getz and Bridget M. Brennan of the U.S. Attorney’s Office for the Northern District of Ohio and Deputy Chief Kristy Parker of the Civil Rights Division’s Criminal Section.
A criminal complaint is merely an accusation. All defendants are presumed innocent of the charges until proven guilty beyond a reasonable doubt in court.
Three Operators of Miami Home Health CompanyPlead Guilty in $60 Million Health Care Fraud SchemeRead the Press Release
WASHINGTON – Three operators of a Miami health care agency pleaded guilty yesterday for their participation in a $60 million home health Medicare fraud scheme, announced the Department of Justice, the FBI and the Department of Health and Human Services (HHS).
Roberto Gonzalez, 61, Olga Gonzalez, 57, and their son, Fabian Gonzalez, 39, each pleaded guilty before U.S. District Judge Ursula Ungaro in the Southern District of Florida to one count of conspiracy to commit health care fraud.
According to the court documents, Roberto Gonzalez was the president and Olga Gonzalez was the vice president of Nany Home Health Inc., a Florida home health agency that purported to provide home health care and physical therapy services to eligible Medicare beneficiaries. Their son, Fabian, was head of the Quality and Assurance Department for Nany.
According to plea documents, the Gonzalezes conspired with patient recruiters, including Miami-area “staffing agencies,” for the purpose of billing the Medicare program for unnecessary home health care and therapy services. These recruiters and “staffing agencies” recruited patients to Nany, and provided prescriptions, Plans of Care (POCs) and certifications for medically unnecessary therapy and home health services for Medicare beneficiaries. In return, the Gonzalezes and their co-conspirators paid these staffing agencies and patient recruiters kickbacks and bribes. The Gonzaleses then used these prescriptions, POCs and medical certifications to fraudulently bill the Medicare program for home health care services, knowing that their behavior violated federal criminal laws.
According to plea documents, nurses and office staff at Nany falsified patient files, including by documenting non-existent “symptoms” for Medicare beneficiaries to make it appear that the beneficiaries qualified for home health care and therapy services when, in fact, the beneficiaries did not actually qualify for such services. The fictitious symptoms, which suggested that the patients were unable to self-inject insulin and were homebound, formed the basis for the false claims for home health care benefits and medically unnecessary therapy filed under the Medicare program.
From approximately January 2006 through November 2009, Roberto, Olga and Fabian Gonzalez, and their co-conspirators submitted approximately $60 million in false and fraudulent claims to Medicare and Medicare paid approximately $40 million on those claims.
The pleas were announced by Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida; John V. Gillies, Special Agent-in-Charge of the FBI’s Miami Field Office; and Special Agent-in-Charge Christopher Dennis of the HHS Office of Inspector General (HHS-OIG), Office of Investigations Miami Office.
This case is being prosecuted by Trial Attorney Joseph S. Beemsterboer of the Criminal Division’s Fraud Section. The case was investigated by the FBI and HHS-OIG, and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida.
Since their inception in March 2007, Medicare Fraud Strike Force operations in nine locations have charged more than 1,140 defendants who collectively have falsely billed the Medicare program for more than $2.9 billion. In addition, the HHS Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov .
Justice Department Settles Lawsuit Alleging Retaliation by the Town of Rome, WisconsinRead the Press Release
WASHINGTON – The Justice Department today announced that it has reached a consent decree with the town of Rome, Wis., to resolve allegations that the town retaliated against an employee after she made a complaint of discrimination based on sex.
In addition to reaching the consent decree, the Justice Department also filed a complaint in U.S. District Court for the Western District of Wisconsin specifically alleging that the town of Rome violated Title VII of the Civil Rights Act of 1964 by retaliating against a female police officer for complaining about what she reasonably believed to be sex discrimination. Title VII of the Civil Rights Act of 1964 prohibits discrimination in employment on the basis of race, color, sex, national origin and religion. Title VII also prohibits an employer from retaliating against an individual for opposing any employment practice that would violate Title VII, for filing a discrimination charge or for assisting in the investigation of such a charge.
According to the Justice Department’s complaint, Jolene Orlowski complained to Rome’s chief of police that she was being discriminated against because of her sex. Within two weeks of Orlowski’s complaint of sex discrimination, Rome terminated her employment. According to the Justice Department’s complaint, Rome terminated Orlowski in retaliation for opposing what she reasonably believed was unlawful sex discrimination.
Under the terms of the consent decree, which must still be approved by the federal court, the town must offer to reemploy Orlowski as a police officer. The town must also pay her $351,891 in monetary relief, including back pay with interest, outstanding tuition reimbursements and compensatory damages. In addition, the town must review and adopt appropriate policies to protect its employees from discrimination and retaliation, and conduct training of its police department personnel to ensure that they properly handle future complaints of discrimination.
“If employees reasonably believe that sex discrimination has occurred in the workplace, the employees must be able to bring that concern to management’s attention without fear of the employer retaliating against them for speaking out,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “Title VII not only protects those who have suffered discrimination, it also protects those who alert the employer to discrimination in the workplace. We will not tolerate public employers retaliating against their employees who report claims of unlawful discrimination.”
John W. Vaudreuil, U.S. Attorney for the Western District of Wisconsin, stated, “This consent decree with the town of Rome reaffirms—once again—the Justice Department’s commitment to aggressively enforcing federal anti-discrimination laws. Discrimination in all its forms is unacceptable.”
The continued enforcement of Title VII has been a priority of the Justice Department’s Civil Rights Division. Additional information about the Civil Rights Division of the Justice Department is available on its website at www.usdoj.gov/crt/.