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Tuesday 20 December 2011
Fort Lauderdale, Florida-Area Halfway House Operator Pleads Guilty to Fraud and Kickback SchemeRead the Press Release
WASHINGTON – The manager and operator of a Fort Lauderdale, Fla.-area halfway house pleaded guilty yesterday for his role in a Medicare fraud kickback scheme that funneled patients to a fraudulent mental health provider, American Therapeutic Corporation (ATC), announced the Department of Justice, FBI and the Department of Health and Human Services (HHS).
Butler Moultrie, 46, pleaded guilty before U.S. Magistrate Judge Barry L. Garber in Miami to one count of conspiracy to commit health care fraud.
According to court documents, most of the residents at Moultrie’s halfway house were recovering from drug and/or alcohol addictions. Nevertheless, Moultrie agreed to refer Medicare beneficiaries who resided at his halfway house to ATC purportedly to receive intensive mental health services called partial hospitalization program (PHP) treatment in exchange for illegal health care kickbacks. Moultrie knew that such kickbacks were illegal, and he knew that ATC fraudulently billed the Medicare program for the PHP services. Moultrie knew that no doctor had prescribed PHP treatment for his patient referrals, and he knew that his residents required drug and/or alcohol addiction treatment rather than mental health services.
According to court filings, ATC’s owners and operators paid kickbacks to owners and operators of assisted living facilities and halfway houses, including Moultrie, and to patient brokers in exchange for delivering ineligible patients to ATC and its related company, the American Sleep Institute (ASI). In some cases, the patients received a portion of those kickbacks. Throughout the course of the ATC conspiracy, millions of dollars in kickbacks were paid in exchange for Medicare beneficiaries who did not qualify for PHP services. The ineligible beneficiaries attended treatment programs that were not legitimate so that ATC and ASI could bill Medicare more than $200 million in medically unnecessary services.
According to the plea agreement, Moultrie’s participation in the fraud resulted in approximately $1.9 million in fraudulent billing to the Medicare program. At sentencing, scheduled for Feb. 21, 2012, Moultrie faces a maximum of 10 years in prison and a $250,000 fine.
Robert and Nikki Jenkins, two other managers and operators of halfway houses in Fort Lauderdale, were sentenced yesterday for referring beneficiaries to ATC in exchange for health care kickbacks. U.S. District Chief Judge Federico A. Moreno in Miami sentenced Robert Jenkins to 24 months in prison and Nikki Jenkins to 15 months in prison. Another halfway house operator, Irene Trematerra, was sentenced last week by U.S. District Judge Ursula Ungaro to 18 months in prison for her role in providing beneficiaries to ATC in exchange for kickbacks.
ATC, its management company Medlink Professional Management Group Inc., and various owners, managers, doctors, therapists, patient brokers and marketers of ATC, Medlink and ASI, were charged with various health care fraud, kickback, money laundering and other offenses in two indictments unsealed on Feb. 15, 2011. ATC, Medlink and nine of the individual defendants have pleaded guilty or have been convicted at trial. Other defendants are scheduled to begin trial on April 9, 2012, before U.S. District Judge Patricia A. Seitz.
The guilty plea and sentences were announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida; John V. Gillies, Special Agent-in-Charge of the FBI’s Miami Field Office; and Special Agent-in-Charge Christopher B. Dennis of the HHS Office of Inspector General (HHS-OIG), Office of Investigations Miami Office.
These cases are being prosecuted by Trial Attorneys Steven Kim and Jennifer L. Saulino of the Criminal Division’s Fraud Section. The cases were investigated by the FBI and HHS-OIG and were brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida.
Since its inception in March 2007, the Medicare Fraud Strike Force operations in nine locations have charged more than 1,140 defendants that collectively have 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, 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 .
Former Des Moines, Iowa, Police Officers Indicted for Civil Rights Violations and Obstruction of JusticeRead the Press Release
WASHINGTON – A federal grand jury in Des Moines, Iowa, returned an indictment today charging two former Des Moines Police Department Officers Mersed Dautovic and John Mailander with violations of federal criminal laws related to an incident involving an alleged assault against a civilian on Sept. 13, 2008, the Justice Department announced today.
Count one of the indictment charges Dautovic with a criminal civil rights violation for allegedly assaulting a man during a routine traffic stop. Specifically, the indictment charges that Dautovic physically assaulted the man with a baton, resulting in bodily injury to the victim. Count two of the indictment charges both Dautovic and Mailander with obstructing justice by falsifying a written statement about the incident.
Dautovic was arrested today and appeared this afternoon before U.S. Magistrate Judge Celeste F. Bremer in the Southern District of Iowa. A detention hearing has been scheduled for 2:30 p.m. on Wednesday, Dec. 21, 2011, and trial has been scheduled for Jan. 30, 2011.
Upon conviction, the civil rights count in the indictment carries a maximum sentence of 10 years in prison. The obstruction count carries a maximum sentence of 20 years in prison. Each count also carries a maximum fine of $250,000.
This case is being investigated by the FBI’s Des Moines Division, and is being jointly prosecuted by the U.S. Attorney’s Office for the Southern District of Iowa and trial attorneys from the Civil Rights Division of the Department of Justice.
An indictment is only an accusation and the defendants are presumed innocent unless and until proven guilty.
Federal Court Bars Alabama Woman from Preparing Tax ReturnsRead the Press Release
WASHINGTON – A federal court in Mobile, Ala., has permanently barred Delois Warren from preparing federal tax returns for others, the Justice Department announced today. Judge Kristi K. DuBose of U.S. District Court for the Southern District of Alabama issued the permanent injunction order.
The government complaint in the case alleged that Warren of Greensboro claimed bogus earned-income tax credits and first-time-homebuyer credits for her customers through her business, Branjalo Tax Service. According to the complaint, Warren prepared income tax returns for some customers falsely claiming that they were engaged in profitable businesses in order to maximize refunds based on the earned-income tax credit. The complaint also states that Warren claimed the first-time-homebuyer credit on at least 190 returns in 2009. In examples cited in the complaint, Warren claimed the credit for as much as $8,000 for customers who did not purchase houses in 2008.
The civil injunction order requires Warren to mail a copy of the order to all persons for whom she has prepared a federal tax return since Jan. 1, 2007, and to give the government a list of those customers.
In the last decade, the Justice Department’s Tax Division has obtained hundreds of injunctions to stop tax fraud promoters and unscrupulous tax return preparers. Information about these cases is available on the Justice Department’s website .
Chinese Perfume Importer Sentenced in Brooklyn to 12 Months in Prison for Trafficking in Counterfeit PerfumeRead the Press Release
WASHINGTON – A Chinese perfume importer was sentenced in Brooklyn yesterday to 12 months in prison for trafficking in counterfeit perfume, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney Loretta E. Lynch for the Eastern District of New York.
Shaoxiong Zhou, 42, of Shantou, Guangdong, China, was sentenced by U.S. District Judge Sandra L. Townes in the Eastern District of New York. Judge Townes also ordered Zhou to pay $20,000 in restitution.
Zhou pleaded guilty Aug. 5, 2011, to one count of trafficking in counterfeit goods. Zhou admitted that he offered to supply counterfeit perfume to prospective buyers at a Las Vegas trade show in August 2010. Zhou also admitted that he shipped a cargo container of counterfeit perfume to a facility in Staten Island, N.Y., in January 2011. That shipment, which was seized by U.S. Customs and Border Protection upon arrival in the United States, was found to contain approximately 37,000 units of perfume bearing counterfeit marks and made to resemble fragrance products from several well-known brands, including Lacoste, Polo Black and Armani Code.
Zhou and codefendant Shaoxia Huang were arrested March 2, 2011, in Las Vegas and have been in custody since that time. Huang pleaded guilty Aug. 3, 2011, to one count of trafficking in counterfeit goods, and was sentenced on Dec. 7, 2011, to nine months in prison and was ordered to pay $20,000 in restitution.
The case is part of a federal investigation of the importation and distribution of counterfeit perfume and cosmetics products being conducted by U.S. Immigration and Customs Enforcement - Homeland Security Investigations. The case is being prosecuted by Senior Counsel Jason Gull of the Computer Crime and Intellectual Property Section 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 Charged in Multi-Million Dollar Stock FraudRead the Press Release
WASHINGTON – An attorney for a South Carolina health care device company, Signalife, was arrested on Dec. 18, 2011, at Los Angeles International Airport on charges related to his alleged role in a multi-million dollar market manipulation fraud scheme, Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division announced today.
An indictment unsealed yesterday in U.S. District Court for the Southern District of Florida charges attorney Mitchell J. Stein, 53, of Hidden Hills, Calif., and Boca Raton, Fla., with one count of conspiracy to commit mail fraud and wire fraud, three counts of mail fraud, three counts of wire fraud, three counts of securities fraud, three counts of money laundering and one count of conspiracy to obstruct justice. The indictment also seeks forfeiture of the proceeds of the offenses.
The indictment alleges that Stein engaged in a scheme to artificially inflate the stock price of Signalife Inc. by creating the false impression of sales activity for the company. Signalife, now known as Heart Tronics, was a publicly traded company that purportedly sold electronic heart monitoring devices. According to the indictment, Stein’s wife held approximately 85 percent of the shares of Signalife.
The indictment alleges that Stein and his co-conspirators created fake purchase orders and related documents from fictitious customers and then caused Signalife to issue press releases and file documents with the Securities and Exchange Commission (SEC) trumpeting these fictitious sales. The indictment also alleges that in a further effort to create the false appearance of sales activity, Stein arranged to have Signalife products shipped to and temporarily stored with an individual who had not purchased any products.
The indictment further alleges that Stein and his co-conspirators sold shares of Signalife stock at inflated prices, disguising the fact that they were doing so by placing the shares in purportedly blind trusts. In addition to selling shares in that manner, Stein and his co-conspirators allegedly also caused Signalife to issue additional shares to third parties so that those third parties could sell the shares and remit the proceeds of those sales to Stein and his co-conspirators.
According to the indictment, Stein also conspired to obstruct an SEC investigation into Heart Tronics by testifying falsely and arranging for others to testify falsely in an effort to conceal the fraud scheme.
If convicted, Stein faces up to 20 years in prison on each count of mail fraud, wire fraud, securities fraud, and conspiracy to commit mail and wire fraud, as well as up to 10 years in prison on each count of money laundering and up to five years in prison on the conspiracy to obstruct justice count.
The SEC conducted a parallel investigation and today announced its filing of a civil enforcement action against Stein and others. The department thanks the SEC for its substantial assistance in this matter.
This continuing investigation is being conducted by the U.S. Postal Inspection Service, with assistance from the Office of the Special Inspector General for the Troubled Asset Relief Program. This case is being prosecuted by Trial Attorneys Andrew H. Warren and Albert B. Stieglitz Jr. of the Criminal Division’s Fraud Section.
An indictment is a formal accusation of criminal conduct, not evidence. A defendant is presumed innocent unless and until convicted through due process of law.
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 .
Aon Corporation Agrees to Pay a $1.76 Million Criminal Penalty to Resolve Violations of the Foreign Corrupt Practices ActRead the Press Release
WASHINGTON – Aon Corporation, a publicly traded corporation headquartered in Chicago and one of the largest insurance brokerage firms in the world, has entered into an agreement with the Department of Justice to pay a $1.76 million penalty to resolve violations of the Foreign Corrupt Practices Act (FCPA), announced Assistant Attorney General Lanny A. Breuer of the Criminal Division.
According to the non-prosecution agreement, Aon’s United Kingdom subsidiary, Aon Limited, administered certain training and education funds in connection with its reinsurance business with Instituto Nacional De Seguros (INS), Costa Rica’s state-owned insurance company. The supposed purpose of the funds was to provide education and training for INS officials. However, between 1997 and 2005, Aon Limited used a significant portion of the funds to reimburse INS officials for non-training related activity, including travel with spouses to overseas tourist destinations, or for uses that could not be determined from Aon’s books and records. Many of the invoices and other records for trips taken by INS officials did not provide any business purpose for the expenditures, or showed that the expenses were clearly not related to a legitimate business purpose.
As part of the agreement, Aon admitted that Aon Limited’s accounting books and records related to the funds, which were consolidated into Aon’s books and records, did not accurately and fairly reflect the purpose for which the expenses were incurred. Aon also admitted that it failed to devise and maintain an adequate system of internal accounting controls with respect to foreign sales activities sufficient to ensure compliance with the FCPA.
In addition to the monetary penalty, the agreement requires that Aon Corporation adhere to rigorous compliance, bookkeeping and internal controls standards and cooperate fully with the department.
The department entered into a non-prosecution agreement with Aon as a result of Aon’s extraordinary cooperation with the department and the U.S. Securities and Exchange Commission (SEC); its timely and complete disclosure of improper payments in Costa Rica and other countries that it discovered during its thorough investigation of its global operations; its early and extensive remedial efforts; the prior financial penalty of £5.25 million that Aon Limited paid to the United Kingdom’s Financial Services Authority (FSA); and the FSA’s close and continuous supervisory oversight over Aon Limited. These factors also led to a substantially reduced monetary penalty.
Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa .
In a related matter, Aon Corporation reached a settlement with the SEC and agreed to pay approximately $14.5 million in disgorgement and prejudgment interest. The SEC settlement was filed today.
This case is being handled by Trial Attorney Andrew Gentin of the Fraud Section in the Justice Department’s Criminal Division with assistance from the FBI’s Washington Field Office’s dedicated FCPA squad. The department acknowledges and expresses its appreciation for the assistance provided by the SEC’s Division of Enforcement.
Monday 19 December 2011
US, Canada and Mexico Antitrust Officials Participate in Trilateral Meetings in Mexico to Discuss Antitrust EnforcementRead the Press Release
WASHINGTON – The heads of the antitrust agencies of the United States, Canada and Mexico – Acting Assistant Attorney General Sharis A. Pozen of the Department of Justice’s Antitrust Division, Chairman Jon Leibowitz of the Federal Trade Commission, Canadian Commissioner of Competition Melanie Aitken and President Eduardo Perez Motta of the Mexican Federal Competition Commission – met today to reaffirm their commitment to effective enforcement cooperation. The discussions covered a wide range of enforcement and policy issues, including updates on merger policy and enforcement in the three jurisdictions and the sharing of recent experience in areas of mutual enforcement interest.
“Working with our antitrust colleagues across both United States borders to ensure that antitrust enforcement is effective is good for businesses and consumers,” said Acting Assistant Attorney General Pozen. “The department values its close law enforcement relationships with Canada and Mexico, and I look forward to our continued efforts to work together to combat anticompetitive activity that affects North America.”
The United States, Canada and Mexico are parties to a series of bilateral antitrust cooperation agreements that commit their antitrust agencies to cooperate and coordinate with each other in order to make their antitrust policies and enforcement as consistent and effective as possible. The three nations also are parties to the North American Free Trade Agreement, which includes a competition chapter that provides for cooperation among them in antitrust investigations.
Statement of Attorney General Eric Holder on the 2011 Preliminary Uniform Crime ReportRead the Press Release
WASHINGTON – Attorney General Eric Holder today issued the following statement on the release of the FBI’s Preliminary Uniform Crime Report showing a continued decrease in violent crime nationwide. The results show that the number of violent crimes reported in the first six months of 2011 declined 6.4 percent when compared with figures from the first six months of 2010.
“Safe neighborhoods are the underpinning of our nation’s prosperity, and this Department of Justice has made protecting the American people from violent crime a top priority. The results of the 2011 Preliminary Uniform Crime Report show that the decline in violent crime in recent years continued in the first half of 2011.
“Working with our state, local and tribal partners, federal prosecutors and agents have increased community participation in our shared efforts to hold accountable those whose illegal activity spread fear into our communities. We have targeted violent criminals involved in gang-related activity from Florida to California, organized crime networks in cities across this country and drug trafficking organizations that extend beyond our borders.
“Ensuring that law enforcement has the necessary resources is critical to continuing our aggressive fight against violent crime. Although we can all be encouraged that violent crime rates continue to decline nationwide, it is clear that we must remain vigilant and more work remains to be done. In recent months, we have seen an alarming spike in law enforcement fatalities and the number of line-of-duty law enforcement deaths. This is appalling and unacceptable. And it is why we will continue making investments to provide life-saving equipment, training and information-sharing capabilities to our courageous men and women in the field.
“We also recognize that enforcement alone will not prevent every future crime, which is why we’ve launched initiatives in communities across this country to fight recidivism and support reentry programs. We will continue to support our state, local and tribal partners and to implement the tough, smart policing policies that we know make a difference in the fight against violent crime."
The report can be found here: http://www.fbi.gov/news/stories/2011/december/crime-stats_121911/crime-stats_121911.
Nurse, Administrator and Two Recruiters for Miami Home Health Companies Sentenced to Prison in $25 Million Health Care Fraud SchemeRead the Press Release
WASHINGTON – Two patient recruiters, a nurse and an administrator for two Miami home health care companies were sentenced today for their participation in a $25 million home health Medicare fraud scheme, announced the Department of Justice, the FBI and the Department of Health and Human Services (HHS).
The defendants were sentenced by U.S. District Judge Joan A. Lenard in the Southern District of Florida.
- Licet Diaz, 49, was sentenced to 87 months in prison, three years of supervised release and ordered to pay $7.8 million in restitution.
- Fidel Castro, 49, was sentenced to 30 months in prison, three years of supervised release and ordered to pay $550,000 in restitution.
- Ignacio Angulo, 48, was sentenced to 18 months in prison, two years of supervised release and ordered to pay $190,000 in restitution.
- Barbara Gonzalez, 38, was sentenced to six months in prison, two years of supervised release and ordered to pay $40,000 in restitution.
Castro, Gonzalez, Angulo and Diaz each pleaded guilty earlier this year to one count of conspiracy to commit health care fraud. They were each ordered to pay their restitution jointly and severally with co-defendants.
According to court documents, Castro and Gonzalez were patient recruiters for ABC Home Health Care Inc., a Miami home health care agency that purported to provide home health and physical therapy services to Medicare beneficiaries. Angulo was a nurse and patient recruiter for Florida Home Health Care Providers Inc., another related Miami home health care agency. Diaz was an administrator for ABC and Florida Home Health. According to court documents, ABC and Florida Home Health only existed to defraud Medicare.
Castro, Gonzalez and Angulo admitted that beginning in approximately January 2006 and continuing until approximately March 2009, they recruited Medicare beneficiaries who would allow ABC and Florida Home Health to bill Medicare for home health care and therapy services that were medically unnecessary and/or never provided. Castro, Gonzalez, and Angulo solicited and received kickbacks and bribes from the owners and operators of ABC and Florida Home Health in return for recruiting patients. Castro, Gonzalez and Angulo knew that the patients they recruited did not qualify for the services billed to Medicare and that the files for the recruited patients were falsified to make it appear that the patients qualified for the services.
According to court documents, Angulo, a licensed practical nurse, along with his co-defendant nurses, falsified patient files for Medicare beneficiaries to make it appear that the beneficiaries qualified for home health care and therapy services. Angulo admitted that he knew the beneficiaries did not qualify for and did not receive the services. The files were falsified so that Medicare could be billed for medically unnecessary therapy and home health related services.
According to plea documents, Diaz distributed kickback payments to the patient recruiters on behalf of the owners of ABC and Florida Home Health. Diaz worked in the offices of ABC and Florida Home Health and was aware that office staff manipulated the patient files and nursing notes for patients at ABC and Florida Home Health.
As a result of the participation of Castro, Gonzalez, Angulo and Diaz in the illegal scheme, the Medicare program was billed approximately $550,000, $40,000, $190,000 and $7.8 million, respectively, for purported home health care services that were not medically necessary and/or were not provided.
The sentences 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.
New Jersey Solid Waste Management Facility Sentenced After Illegally Dumping in Upstate New YorkRead the Press Release
WASHINGTON – Lieze Associates, dba Eagle Recycling, of New Jersey, was sentenced today in federal court in Utica, N.Y., following their guilty plea to conspiring to violate the Clean Water Act and to defrauding the United States, the U.S. Attorney’s Office for the Northern District of New York and the Department of Justice Environment and Natural Resources Division announced today.
Eagle Recycling was sentenced to pay a $500,000 criminal fine and more than $70,000 in restitution and cleanup costs. The judge also imposed three years corporate probation and ordered that its recycling facility formulate, fund and implement an environmental compliance plan to prevent future environmental violations at their North Bergen, N.J., operation.
According to the charges and plea agreement, Eagle Recycling and other co-conspirators engaged in a multi-year scheme to illegally dump 8,100 tons of pulverized construction and demolition debris that was processed at Eagle Recycling’s North Bergen solid waste management facility and then transported to a farmer’s property in Frankfort, N.Y. Eagle Recycling and other conspirators then concealed the illegal dumping by fabricating a New York State Department of Environmental Conservation (DEC) permit and forging the name of a DEC official on the fraudulent permit.
This case was investigated by criminal investigators with the New York State Environmental Conservation Police, Bureau of Environmental Crimes; special agents from the EPA's Criminal Investigation Division and the Internal Revenue Service; and investigators from the New Jersey State Police Office of Business Integrity Unit, the New Jersey Department of Environmental Protection and the Ohio Department of Environmental Protection. The case is being prosecuted by Assistant U.S. Attorney Craig A. Benedict of the Northern District of New York and Todd W. Gleason of the Environmental Crimes Section of the Environment and Natural Resources Division of the U.S. Department of Justice.
Michigan Tax Defiers Sentenced to Jail for Tax Fraud SchemeRead the Press Release
WASHINGTON - David A. Cusumano of Plymouth, Mich., and Henry Nino, a resident of Northville, Mich., were sentenced today following their pleas of guilty to tax evasion, the Justice Department and Internal Revenue Service Criminal Investigation (IRS-CI) announced today. District Court Judge Gerald E. Rosen, presiding in Detroit, sentenced Cusumano to 15 months and Nino to 18 months in prison. Judge Rosen also imposed three years of supervised release for each defendant.
According to court documents, Cusumano was a mechanical engineer who worked at various companies throughout Michigan. Nino was an electrician with an automotive company. Despite earning substantial income in their respective jobs, for multiple years, Cusumano and Nino failed to file income tax returns and failed to pay taxes due and owing to the IRS, Cusumano during the calendar years 2003-2008 and Nino during the calendar years 2004-2008. Both men successfully prevented their employers from withholding federal income taxes from their wages by submitting false IRS Forms W-4 to their employers on which they falsely claimed they were “exempt” from income tax withholding. A Form W-4 is a document that an employee submits to an employer to assist the employer in withholding the correct amount of income taxes from the employee’s pay.
The plea agreements state that in addition to failing to file income tax returns and submitting false Forms W-4 to their employers, the two men also attempted to prevent the IRS from determining their tax liabilities and collecting their unpaid taxes by participating in several obstructive schemes. Both men paid tax fraud promoters, including a Florida-based organization called American Rights Litigators/Guiding Light of God Ministries to submit frivolous and obstructive correspondence to the IRS and to the defendants’ employers, including false complaints that wrongly accused IRS employees of criminal activity. Cusumano and Nino also submitted multiple fake financial instruments to the IRS in a failed attempt to pay off their outstanding tax debts.
Court documents state that Nino also attempted to prevent the IRS from collecting his unpaid taxes for the years 1996, 1997 and 2000-2003 by, among other things, transferring title of his personal residence to a nominee entity called the Michigan Natural Group, using money orders to make mortgage payments and cashing paychecks rather than depositing them in a bank account.
Cusumano caused a tax loss to the government of $390,145. Nino’s conduct resulted in a tax loss of $366,088. Under the terms of their plea agreements, both are required to make restitution to the IRS in the amount of their unpaid taxes.
This case was investigated by Special Agents from IRS-CI, and prosecuted by Trial Attorneys Jeffrey A. McLellan and Melissa S. Siskind of the Justice Department’s Tax Division.
Justice Department Recovers $3 Billion in False Claims Act Cases in Fiscal Year 2011Read the Press Release
WASHINGTON – The Justice Department secured more than $3 billion in settlements and judgments in civil cases involving fraud against the government in the fiscal year ending Sept. 30, 2011, Tony West, Assistant Attorney General for the Civil Division, announced today. This is the second year in a row that the department has surpassed $3 billion in recoveries under the False Claims Act, bringing the total since January 2009 to $8.7 billion – the largest three-year total in the Justice Department’s history.
The $3 billion total for fiscal year 2011 includes a record $2.8 billion in recoveries under the whistleblower provisions of the False Claims Act, which is the government’s primary civil remedy to redress false claims for federal money or property, such as Medicare benefits, payments on military contracts, and federal subsidies and loans. The department has recovered more than $30 billion under the False Claims Act since the act was substantially amended in 1986. The 1986 amendments strengthened the act and increased the incentives for whistle blowers to file lawsuits on behalf of the government. That in turn led to an unprecedented number of investigations and greater recoveries.
“Twenty-eight percent of the recoveries in the last 25 years were obtained since President Obama took office,”Assistant Attorney General West said. “These record-setting results reflect the extraordinary determination and effort that this administration, and Attorney General Eric Holder in particular, have put into rooting out fraud, recovering taxpayer money and protecting the integrity of government programs.”
Assistant Attorney General West noted that the $3 billion recovered this year included $2.4 billion in recoveries involving fraud committed against federal health care programs. Most of these recoveries are attributable to the Medicare and Medicaid programs administered by the Department of Health and Human Services (HHS). They also include the TRICARE program administered by Department of Defense (DoD), the Federal Employees Health Benefits program administered by the Office of Personnel Management and Veterans Administration health programs.
Fighting health care fraud is a top priority for the Obama Administration. On May 20, 2009, the Attorney General and HHS Secretary Kathleen Sebelius announced the creation of an interagency task force, the Health Care Fraud Prevention and Enforcement Action Team (HEAT), to increase coordination and optimize criminal and civil enforcement. Since January 2009 alone, the department has used the False Claims Act to recover more than $6.6 billion in federal health care dollars. This is more recovered under the act than in any other three-year period.
The historic $2.8 billion recovered in whistle blower cases came from suits filed under the qui tam, or whistleblower, provisions of the False Claims Act. These provisions allow private citizens, known as relators, to file lawsuits on behalf of the government. In the 25 years since the False Claims Act was substantially amended, whistle blowers have filed more than 7,800 actions under the qui tam provisions. Qui tam suits hit a peak of 638 this past year, after hovering in the 300s and low 400s for much of the decade.
Assistant Attorney General West thanked the courageous citizens who have come forward to report fraud, often at great personal risk: “We are tremendously grateful to whistle blowers who have brought fraud allegations to the government’s attention and assisted us in this public-private partnership to fight fraud,” he said.
In 1986, Senator Charles Grassley and Representative Howard Berman led successful efforts in Congress to amend the False Claims Act, including enhancements to the qui tam provisions to encourage whistle blowers to come forward with allegations of fraud. In this 25th anniversary year of the 1986 amendments, Assistant Attorney General West paid tribute to the bill’s sponsors, saying that “without their foresight, the breadth of the recoveries we announce here today would not have been possible.” He also expressed his gratitude to Senator Patrick J. Leahy, chairman of the Senate Judiciary Committee, and to Senator Grassley and Representative Berman for their support of the Fraud Enforcement and Recovery Act of 2009, which made additional improvements to the False Claims Act and other fraud statutes.
Assistant Attorney General West also applauded Congress’ passage of the Affordable Care Act (ACA) in 2010, which reenforced the government’s ability to redress fraud in the nation’s health care system. Among many other changes, the ACA amended the False Claims Act to provide additional incentives for whistle blowers to report fraud to the government and strengthened the provisions of the federal health care Anti-Kickback Statute.
Enforcement actions involving the pharmaceutical industry were the source of the largest recoveries this year. In all, the department recovered nearly $2.2 billion in civil claims against the pharmaceutical industry in fiscal year 2011, including $1.76 billion in federal recoveries and $421 million in state Medicaid recoveries. These cases included $900 million from eight drug manufacturers to resolve allegations that they had engaged in unlawful pricing to increase their profits. Additionally, GlaxoSmithKline PLC paid $750 million to resolve criminal and civil allegations that the company knowingly submitted, or caused to be submitted, false claims to government health care programs for adulterated drugs and for drugs that failed to conform with the strength, purity or quality specified by the Food and Drug Administration.
Adding to its successes under the False Claims Act, the department obtained 21 criminal convictions and $1.3 billion in criminal fines, forfeitures, restitution, and disgorgement under the Food, Drug and Cosmetic Act (FDCA). The FDCA’s criminal provisions are enforced by the Civil Division’s Consumer Protection Branch.
In addition to health care, the department continued its aggressive pursuit of fraud in government procurement and other forms of financial fraud, including grant, housing and mortgage fraud that emerged in the wake of the financial crisis. In November 2009, President Obama established the Financial Fraud Enforcement Task Force to hold accountable the individuals and corporations who contributed to the crisis as well as those who would claim illegal advantage through false claims for funds intended to stimulate economic recovery. Of the $3 billion in fiscal year 2011 recoveries, these non-war related procurement and consumer-related financial fraud cases accounted for nearly $358 million.
Overall, the department recovered $422 million in fiscal year 2011 in procurement fraud cases, including $89.3 million in recoveries in connection with the wars in Southwest Asia. This brings civil fraud recoveries in connection with the wars in Southwest Asia since January 2009 to $153.4 million, and the total amount recovered in procurement fraud cases during that time to $1.5 billion, again a greater amount than in any previous three-year period.
Assistant Attorney General West expressed his deep appreciation for the dedicated public servants who contributed to the investigation and prosecution of these cases. These individuals include attorneys, investigators, auditors and other agency personnel throughout the Civil Division, the U.S. Attorneys’ Offices, HHS, DoD and the many other federal and state agencies.
Justice Department Issues Statements Regarding AT&T Inc.'s Abandonment of Its Proposed Acquisition of T-Mobile USA Inc.Read the Press Release
WASHINGTON – Deputy Attorney General James M. Cole and Acting Assistant Attorney General for the Antitrust Division Sharis A. Pozen issued the following statements today after AT&T Inc. abandoned its proposed acquisition of T-Mobile USA Inc. from its parent company, Deutsche Telekom AG:
Deputy Attorney General Cole:
“This result is a victory for the millions of Americans who use mobile wireless telecommunications services. A significant competitor remains in the marketplace and consumers will benefit from a quick resolution of this matter without the unnecessary expense of taxpayer money and government resources.”
Acting Assistant Attorney General Pozen:
“Consumers won today. Had AT&T acquired T-Mobile, consumers in the wireless marketplace would have faced higher prices and reduced innovation. We sued to protect consumers who rely on competition in this important industry. With the parties’ abandonment, we achieved that result.”
On Aug. 31, 2011, the department filed a lawsuit in U.S. District Court for the District of Columbia, to block the transaction, which would have combined two of the only four wireless carriers with nationwide networks. State attorneys general from California, Illinois, Massachusetts, New York, Ohio, Pennsylvania, Puerto Rico and Washington joined the United States as co-plaintiffs. The department coordinated its review of the proposed transaction with the Federal Communications Commission.
Illinois Company to Pay $500,000 Fine for Violating Do Not Call Provisions of the Telemarketing Sales RuleRead the Press Release
WASHINGTON – Americall Group Inc. (AGI), a Naperville, Ill., telemarketing company specializing in sales for financial service and insurance companies, has agreed to settle charges that AGI violated “do not call” provisions of the Telemarketing Sales Rule, the Justice Department announced today. Under the settlement agreement, AGI will pay $500,000 in civil penalties. In addition, AGI will be subject to a court injunction barring the company from violating the Telemarketing Sales Rule in the future and subjecting the company to potential contempt sanctions if it does.
Under the Telemarketing Sales Rule, consumers are allowed to add their names to a telemarketer’s internal do-not-call list even where the consumer has a pre-existing business relationship with the company or is not listed on the national Do Not Call Registry. The complaint against AGI, filed in November 2011, alleged that the company did not honor basic do-not-call requests unless consumers used specific language beyond what the law requires. This case marks the first time the government has pursued this type of alleged misconduct in a Telemarketing Sales Rule case. The complaint further alleged that AGI violated the Telemarketing Sales Rule by transmitting names other than its own or those of its clients to consumer caller ID devices.
The case was referred to the Department of Justice by the Federal Trade Commission (FTC), which oversees and investigates violations of the Telemarketing Sales Rule. More than 3,000 consumer complaints concerning Telemarketing Sales Rule violations by AGI led the FTC to investigate the company.
Along with the civil penalty, AGI agreed to an injunction barring the company from violating the Telemarketing Sales Rule in the future.
“Sometimes we don’t want to be bothered by unsolicited, unwanted sales calls--that’s why we have the Telemarketing Sales Rule,” said Tony West, Assistant Attorney General for the Civil Division of the Department of Justice. “And that’s why companies that ignore consumers’ wishes and play games with the telemarketing rules will be held accountable.”
The case, United States v. Americall Group Inc., was filed in the Northern District of Illinois.
Assistant Attorney General West thanked the FTC for its assistance with this matter. The Consumer Protection Branch of the Justice Department’s Civil Division brought the case on behalf of the United States.
Florida Loan Officer Sentenced in Connection with $2.5 Million Reverse Mortgage and Loan Modification SchemeRead the Press Release
WASHINGTON – A Florida loan officer was sentenced today by U.S. District Court Judge William P. Dimitrouleas in Ft. Lauderdale, Fla., for his participation in a nationwide $2.5 million reverse mortgage fraud scheme, the Justice Department announced.
John Incandela, 25, of Palm Beach, Fla., was sentenced to 41 months in prison, three years of supervised release and ordered to pay over $1.9 million in restitution. Louis Gendason, 42, of Delray Beach, Fla., is scheduled to be sentenced on Jan. 20, 2012.
A reverse mortgage, also known as a Home Equity Conversion Mortgage, allows borrowers who are at least 62 years of age to convert the equity in their homes into a monthly stream of income, or a line of credit. Unlike the traditional mortgage loan scenario, in which borrowers make monthly payments to a mortgage lender in satisfaction of their outstanding loan, in a reverse mortgage loan scenario, the mortgage lender purchases borrowers’ equity and makes installment payments to the borrower.
According to the information and statements made during the August 2011 hearing in the case, from May 2009 through November 2010, the defendants engaged in a reverse mortgage scheme that defrauded unwitting borrowers, Genworth Financial Home Equity Access Inc. and the Federal Housing Administration (FHA). Working as a loan officer, Incandela, along with co-defendant Marcos Echevarria, 29, of Palm Beach, solicited seniors to refinance their existing mortgages with a reverse mortgage loan financed by Genworth. To qualify the borrowers for these loans, co-defendant Gendason altered real estate appraisals to fraudulently inflate the value of the borrowers’ properties. In fact, however, none of the borrowers had sufficient equity in their properties to qualify for a reverse mortgage. The defendants then submitted the fraudulently inflated appraisals to Genworth. Based on the false documentation, Genworth approved and the FHA insured more than $2.5 million in reverse mortgage loans.
As part of the scheme, co-defendant Kimberly Mackey, 47, of Pittsburgh, a licensed title agent, fraudulently closed the Genworth loans and did not pay off the borrowers’ existing mortgage loans. Mackey attempted to conceal the fraudulent loan closings by preparing false settlement documents that showed that the existing mortgages had, in fact, been paid off. The defendants divided up the loan proceeds and used the money for their personal benefit. On Nov. 3, 2011, Mackey and Echevarria received prison sentences of 60 and 24 months, respectively, for their roles in the scheme.
The defendants further engaged in a loan modification scheme to conceal the existence of the Genworth reverse mortgage transactions from the original mortgage lenders, whose loans remained unpaid. To this end, Gendason, Incandela and Mackey conspired to create fictitious offers to buy some of the borrowers’ properties, in the form of “short sales.” A short sale is a sale of real estate in which the sale proceeds are less than the balance owed on the loan to the mortgage lender, but avoids foreclosure and related costs. In other instances, to hide the existence of the Genworth reverse mortgage loan from the original lenders, the defendants made monthly mortgage payments to the borrowers’ original lenders.
“The masterminds of this mortgage fraud scheme targeted elders who were looking for a little financial security in their golden years,” said Tony West, Assistant Attorney General for the Justice Department’s Civil Division. “This sentence--the third in this case--sends a strong message to those tempted to defraud consumers: these crimes do not pay.”
The case was investigated by the U.S. Department of Housing and Urban Development Office of Inspector General, the U.S. Postal Inspection Service, the FBI and the Florida’s Office of Financial Regulation, with assistance from the U.S. Secret Service and Genworth Financial Home Equity Access. The case was prosecuted by Kevin J. Larsen, a Trial Attorney in the Justice Department’s Consumer Protection Branch, and Assistant U.S. Attorneys Jeffrey H. Kay and Thomas Lanigan of the Southern District of Florida.
Department of Justice Releases Investigative Findings on the East Haven, Connecticut, Police DepartmentRead the Press Release
WASHINGTON – Following a thorough investigation, the Justice Department today announced its findings that the East Haven Police Department (EHPD) has engaged in a pattern or practice of discrimination against Latinos in violation of the Constitution and federal law.
Launched in September 2009, the investigation was conducted under provisions of the Violent Crime Control and Law Enforcement Act of 1994, the Omnibus Crime Control and Safe Streets Act of 1968, and Title VI of the Civil Rights Act of 1964.
Specifically, the investigation found that EHPD intentionally targets Latinos for traffic enforcement and treats Latino drivers more harshly after traffic stops in violation of the Fourteenth Amendment, Title VI and the Safe Streets Act. The investigation further found that EHPD has willfully enabled discrimination by failing to put in place basic law enforcement practices and procedures used by law enforcement agencies across the country to prevent discrimination.
The Department of Justice findings are based on:
- a statistical analysis demonstrating that Latino drivers are disproportionally targeted for traffic stops;
- an analysis of traffic stops showing that officers use non-standard and, in some cases, unacceptable, justifications for stops that are not employed against non-Latino drivers, and post-stop treatment that shows EHPD treating Latino drivers more punitively than non-Latino drivers;
- serious incidents of abuse of authority and retaliation against individuals who criticize or complain of EHPD’s discriminatory treatment of Latinos; and
- a failure to remedy a history of discrimination and a deliberate indifference to the rights of minorities, including EHPD’s failure to guide, train, supervise and discipline officers engaged in unlawful discrimination.
The department also found a number of serious deficiencies in EHPD’s management, oversight and accountability systems that have enabled discriminatory policing by EHPD officers. These deficiencies include:
- a failure to collect and report traffic stop data in accordance with state racial profiling laws;
- a failure to implement policies prohibiting discrimination;
- a failure to hold officers accountable through internal investigations;
- a failure to provide limited English proficient Latinos with appropriate language access; and
- a failure to abide by individuals’ consular rights.
In addition, although not making formal findings, the department noted two areas of serious concern regarding allegations of use of excessive force and unconstitutional searches and seizures. The department also expressed concern with EPHD leadership creating and condoning a hostile and intimidating environment for anyone seeking to provide relevant information in this investigation.
“These findings show that the East Haven Police Department systematically violated the constitutional rights of people it is supposed to serve and protect. By failing to have in place the most basic systems designed to protect individuals from unlawful discrimination, EHPD has fallen short of its obligations,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The recommendations we make will put the police department on a path towards correcting the serious deficiencies that have long plagued the department and regaining the community’s trust.”
“The residents of East Haven should not have to choose between effective crime-fighting and constitutional policing,” said U.S. Attorney David Fein. “By addressing the serious deficiencies we uncovered, EHPD will not only ensure constitutional policing, but will also give the men and women of EHPD the support they need to combat crime effectively.”
The Justice Department’s comprehensive and independent investigation was conducted by department attorneys, investigators and police executives and other experts who interviewed EHPD officers and residents in East Haven. The investigation also involved exhaustive review of documents and data, including EHPD policies and procedures, incident reports and traffic stop activity. This civil investigation was separate from any ongoing criminal investigations of EHPD.
Federal law permits the attorney general to initiate a civil action in the name of the United States against the town of East Haven, EHPD and its officials to remedy the pattern or practice of misconduct and ensure compliance with the Constitution and federal law. The department will work with town officials to obtain voluntary compliance through a court-enforceable agreement that will lead to sustainable reforms. Should EHPD and East Haven choose to not cooperate in reaching an agreed-upon remedy, the department may seek relief unilaterally from the federal courts.
This investigation was conducted by the Special Litigation Section of the Civil Rights Division in coordination with the U.S. Attorney’s Office for the District of Connecticut and with the assistance of expert police consultants. Starting tomorrow, members of the community who may wish to provide information to the department in furtherance of this investigation may call 1-855-202-1830 or email [email protected]
The findings letter can be found at www.justice.gov/crt/about/spl/easthavenpd.php. For more information on the Justice Department’s Civil Rights Division, please visit www.justice.gov/crt.
Friday 16 December 2011
Patient Recruiter Pleads Guilty in Health Care Fraud ConspiracyRead the Press Release
WASHINGTON – A patient recruiter for Alliance Healthcare Services L.P., a Dallas home health care agency, pleaded guilty yesterday for her participation in a scheme to defraud Medicare and Medicaid, announced the Department of Justice, the FBI and the Department of Health and Human Services (HHS). Four co-owners of Alliance pleaded guilty last week for their roles in the fraud scheme.
Ollie Futrell, 56, of Garland, Texas, pleaded guilty yesterday before U.S. District Judge Jane J. Boyle in the Northern District of Texas to one count of conspiracy to commit health care fraud. Ernest Amadi and his wife, Edith Amadi, both of Wylie, Texas, pleaded guilty to the same charge on Dec. 6, 2011. George Opurum and his wife, Agatha Opurum, both of Richardson, Texas, also pleaded guilty to conspiracy to commit health care fraud on Dec. 8, 2011. The five defendants were indicted and arrested in February 2011. This case was the first case to be prosecuted by the Medicare Fraud Strike Force in Dallas.
According to court documents, Ernest Amadi, 53, was the chief executive officer and administrator of Alliance, and George Opurum, 60, was the chief financial officer and alternate administrator of Alliance. Edith Amadi, 49, and Agatha Opurum, 53, were both nurses at Alliance.
As part of the conspiracy, from November 2008 through mid-February 2011, Alliance submitted claims to Medicare for home health services purportedly provided to Medicare beneficiaries. According to court documents, Alliance employees, including the owners, falsified Medicare documentation and skilled nursing notes indicating that the patients were homebound and eligible for home health care services. In fact, the majority of Alliance patients were not eligible for the services because they were not homebound. According to court documents, Alliance employees and owners falsified time sheets and patient visit logs for services that were not adequately rendered or were never provided at all. Alliance then billed Medicare as if the services were adequately provided.
According to court documents, Alliance owners conspired with Futrell to recruit Medicare patients for the company so Alliance could increase its Medicare billing and revenue. Futrell was paid cash by Alliance owners. She agreed to pay patients kickbacks so that they would continue to use Alliance. Often, Futrell paid patients $100 per month to continue to receive home health care from Alliance. Alliance owners knew about, and at times facilitated, these kickbacks.
Each defendant faces a maximum sentence of 10 years in prison, a $250,000 fine and restitution. Ernest and Edith Amadi are scheduled to be sentenced on April 19, 2012. George and Agatha Opurum are scheduled to be sentenced on April 5, 2012. Ollie Futrell is scheduled to be sentenced on April 26, 2012. All sentencings will be before Judge Boyle.
The guilty pleas were announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney Sarah R. Saldaña of the Northern District of Texas; Special Agent in Charge Robert E. Casey Jr. of the FBI’s Dallas Field Office; Special Agent in Charge Mike Fields of the Dallas Regional Office of HHS’s Office of the Inspector General (HHS-OIG); and the Texas Attorney General’s Medicaid Fraud Control Unit (MFCU).
The case is being prosecuted by Assistant U.S. Attorney Katherine E. Pfeifle of the Northern District of Texas and Trial Attorney Benjamin A. O’Neil of the Fraud Section in the Justice Department’s Criminal Division. The case was investigated by the FBI, HHS-OIG and the Texas Attorney General’s MFCU.
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.
Members and Associates of Barrio Azteca Gang Plead Guilty and Are Sentenced in El Paso, Texas, for Roles in Racketeering Conspiracy and Related CrimesRead the Press Release
WASHINGTON – An associate of the Barrio Azteca (BA) gang was sentenced today for her participation in a money laundering conspiracy. Yesterday, a BA gang member pleaded guilty, and three additional gang members and associates were sentenced to prison for their respective roles in a racketeering and drug trafficking conspiracy.
The guilty plea and prison sentences were announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney Robert Pitman for the Western District of Texas, FBI Assistant Director of the Criminal Investigative Division Kevin Perkins and Administrator Michele M. Leonhart of the U.S. Drug Enforcement Administration (DEA).
Desiree Gamboa Cardona, 30, of El Paso, was sentenced today before U.S. District Judge Kathleen Cardone to 12 months and one day in prison. Cardona, a BA associate, pleaded guilty on Aug. 2, 2011, to conspiracy to commit money laundering.
BA gang member Santiago Lucero, 38, aka “Sonny,” of El Paso, pleaded guilty yesterday before U.S. District Magistrate Judge Norbert J. Garney in the Western District of Texas, El Paso Division, to racketeering conspiracy. A sentencing date has not yet been set by the court. At sentencing, Lucerno faces a maximum penalty of life in prison.
Jesus Espino, 33, and Delia Cervantes, 44, aka “Guera,” both of El Paso, were sentenced yesterday by Judge Cardone to 30 years and 70 months in prison, respectively. Espino, a gang member, pleaded guilty on Sept. 22, 2011, to participating in a racketeering conspiracy and Cervantes, a gang associate, pleaded guilty on July 20, 2011, to conspiracy to possess with intent to distribute heroin and conspiracy to import heroin.
BA associate Lorenzo Espino, 41, aka “Lencho” and “Oso,” of El Paso, also was sentenced yesterday by Judge Cardone to 151 months in prison. Lorenzo Espino pleaded guilty on Sept. 22, 2011, for his role in the racketeering conspiracy.
According to court documents, the Barrio Azteca gang began in the late 1980s as a violent prison gang and has expanded into a transnational criminal organization. The BA is primarily based in West Texas; Juarez, Mexico; and throughout state and federal prisons in the United States and Mexico. The gang has a militaristic command structure and includes captains, lieutenants, sergeants, soldiers and associates – all with the purpose of maintaining power and enriching its members and associates through drug trafficking, money laundering, extortion, intimidation, violence, threats of violence and murder.
According to court documents, members and associates of the BA have engaged in a host of criminal activity committed since Jan. 1, 2003, including drug trafficking, extortion, money laundering, kidnapping and murder, including the March 13, 2010, murders in Juarez of U.S. consulate employee Leslie Ann Enriquez Catton, her husband Arthur Redelfs and Jorge Alberto Salcido Ceniceros, the husband of a U.S. consulate employee.
The BA profits by importing heroin, cocaine and marijuana into the United States from Mexico. Gang members and associates also allegedly charge a “street tax” or “cuota” on businesses and criminals operating in their turf. These profits are used to support gang members in prison by funneling money into prison commissary accounts of gang leaders and to pay for defense lawyers or fines. The “cuota” profits are also allegedly reinvested into the organization to purchase drugs, guns and ammunition.
According to information presented in court, as a BA officer, Jesus Espino helped coordinate the distribution of marijuana, cocaine and heroin in the Western District of Texas and elsewhere. Lorenzo Espino assisted in the distribution of heroin while Cervantes distributed heroin and paid street tax to the BA for protection. Cardona helped distribute BA proceeds to members incarcerated in the state and federal prison systems.
Thirty-five members and associates of the BA gang, including Lucero and 14 others who have pleaded guilty, were charged in a third superseding indictment unsealed in March 2011 with various counts of racketeering, murder, drug offenses, money laundering and obstruction of justice. Trial is set to begin April 6, 2012.
The case is being prosecuted by Trial Attorney Joseph A. Cooley of the Criminal Division’s Organized Crime and Gang Section, Trial Attorney Brian Skaret of the Criminal Division’s Human Rights and Special Prosecutions Section and the U.S. Attorney’s Office of the Western District of Texas - El Paso Division. The U.S. Attorney’s Office for the District of New Mexico provided significant assistance in this case, including Assistant U.S. Attorney Sarah Davenport. Valuable assistance was provided by the Criminal Division’s Offices of International Affairs and Enforcement Operations.
The case was investigated by the FBI’s El Paso Field Office. Special assistance was provided by the DEA; the Bureau of Alcohol, Tobacco, Firearms and Explosives; Immigration and Customs Enforcement; the U.S. Marshals Service; U.S. Customs and Border Protection; Federal Bureau of Prisons; U.S. Diplomatic Security Service; the Texas Department of Public Safety; the Texas Department of Criminal Justice; El Paso Police Department; El Paso County Sheriff’s Office; El Paso Independent School District Police Department; Texas Alcohol and Beverage Commission; New Mexico State Police; Dona Ana County, N.M., Sheriff’s Office; Las Cruces, N.M., Police Department; Southern New Mexico Correctional Facility and Otero County Prison Facility New Mexico.
Louisiana Man Indicted for Corruptly Interfering with the IRS and Filing False Tax ReturnsRead the Press Release
WASHINGTON – An indictment was unsealed today charging Jack Ray Carr of Baton Rouge, La., with one count of corruptly interfering with the due administration of the Internal Revenue laws, four counts of filing false income tax returns, and one count of aiding and assisting in the preparation of a false income tax return, the Justice Department, Internal Revenue Service (IRS), and Treasury Inspector General for Tax Administration (TIGTA) announced.
According to the indictment filed against him, Carr corruptly endeavored to obstruct and impede the tax laws by filing false documents and tax returns with the IRS and by attempting to intimidate IRS employees. The indictment also alleges that Carr made and subscribed to false federal income tax returns, IRS Forms 1040, for 2001, 2002, 2003 and 2005. In particular, the tax return Carr filed for 2005 falsely reported $112,142 of federal income tax withholdings based on fictitious IRS Forms 1099-OID (Original Issue Discount) attached to the Form 1040.
An indictment is merely a formal charge by the grand jury. The defendant is presumed innocent unless and until proven guilty in a U.S. District Court.
This case was investigated by IRS Criminal Investigation and TIGTA. It is being prosecuted by Trial Attorneys Matthew Mueller and Gregory Bailey of the Justice Department’s Tax Division.
Additional information about the Tax Division and its enforcement efforts may be found at www.usdoj.gov/tax/ . Additional information about tax fraud schemes to watch out for may be found on the IRS-Criminal Investigation website.
Justice Department Will Not Challenge Worker Rights Consortium's Designated Suppliers Program for Collegiate ApparelRead the Press Release
WASHINGTON — The Department of Justice today announced that it will not challenge a proposal by the Worker Rights Consortium to implement the Designated Suppliers Program. According to the Worker Rights Consortium, the Designated Suppliers Program is designed to enable colleges and universities to ensure that apparel with their school names and insignia is made in factories that provide fair labor conditions for their employees, including paying their employees a living wage.
The department’s position was stated in a business review letter to counsel for the Worker Rights Consortium from Sharis A. Pozen, Acting Assistant Attorney General in charge of the Department of Justice’s Antitrust Division.
The Worker Rights Consortium is a nonprofit corporation that was formed to improve working conditions and labor standards. According to the proposal by the Worker Rights Consortium, the Designated Suppliers Program will establish the proposed licensing terms that will require licensees and any factory that manufactures collegiate apparel to adhere to specified fair labor standards. The terms will include a requirement that licensees pay the factories with which they contract a sufficient amount that the factories can pay their employees a living wage, and that the licensees ensure that the factories guarantee workers the freedom to engage in collective bargaining.
In issuing the letter, Acting Assistant Attorney General Pozen stated that, “The Designated Suppliers Program can be viewed as procompetitive in that it may facilitate competition in a new area, by providing assurances that apparel was produced under conditions meeting the Designated Suppliers Program standard.”
Based on the representations made by the Worker Rights Consortium, the department said that the proposal is unlikely to lessen competition in the collegiate apparel sector. Incorporation of the proposed licensing terms is optional and up to each school and licensee, and is unlikely to have a substantial effect on licensing competition among potentially participating schools. The department said that it also is unlikely to have a substantial effect on downstream competition for apparel sales. Moreover, the factories affected by the proposed licensing terms are likely to constitute only a tiny portion of the labor market, making significant anticompetitive effects in that market unlikely.
Under the department’s business review procedure, a person or organization may submit a proposed action to the Antitrust Division and receive a statement as to whether the division currently intends to challenge the action under the antitrust laws based on the information provided. The department reserves its right to challenge the proposed action under the antitrust laws if it produces anticompetitive effects.
A file containing the business review request and the department’s response may be examined in the Antitrust Division’s Antitrust Documents Group, U.S. Department of Justice, 450 Fifth Street, N.W., Suite 1010, Washington, D.C. 20530. After a 30-day waiting period, the documents supporting the business review will be added to the file, unless a basis for their exclusion for reasons of confidentiality has been established under the Business Review Procedure.
Justice Department Releases Investigative Findings on the Seattle Police DepartmentRead the Press Release
WASHINGTON– Following a comprehensive investigation, the Justice Department today announced its findings that the Seattle Police Department (SPD) has engaged in a pattern or practice of excessive force that violates the Constitution and federal law. A letter detailing the findings was delivered to Seattle Mayor Michael McGinn and Police Chief John Diaz.
The investigation, launched on March 31, 2011, and conducted by the Civil Rights Division’s Special Litigation Section and the U.S. Attorney’s Office for the Western District of Washington, focused on whether SPD engages in unconstitutional or unlawful policing through either (1) the use of excessive force or (2) discriminatory policing. The Justice Department found reasonable cause to believe that SPD engages in a pattern or practice of excessive force, in violation of the Fourth Amendment of the U.S. Constitution and the Violent Crime Control and Law Enforcement Act of 1994. The Justice Department does not make a finding that SPD engages in a pattern or practice of discriminatory policing, but the investigation raised serious concerns that some of SPD’s policies and practices, particularly those related to pedestrian encounters, could result in unlawful discriminatory policing. These practices undermine SPD’s ability to build trust among segments of Seattle’s diverse communities.
The Justice Department’s investigation involved an in-depth review of SPD documents, as well as extensive community engagement. The department reviewed thousands of pages of documents, including written policies and procedures, training materials, and internal reports, data, video footage and investigative files. Justice Department attorneys and investigators also conducted interviews with SPD officers, supervisors and command staff, and city officials; and conducted hundreds of interviews with community members and local advocates.
Throughout the investigation, the Justice Department provided feedback and technical assistance to SPD, and in response, SPD has already begun to implement a number of remedial measures. To create lasting reform, SPD must continue to develop and implement new force policies and protocols, and to train its officers on how to conduct effective and constitutional policing. In addition, SPD must implement systems that ensure accountability, foster police-community partnerships, and eliminate unlawful bias.
“Our investigation has revealed that inadequate systems of supervision and oversight have permitted systemic use of force violations to persist at the Seattle Police Department,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “Our findings should serve as a foundation to reform the police department and to help restore the community’s confidence in fair, just and effective law enforcement. The problems within SPD have been present for many years and will take time to fix, but we look forward to continuing our positive partnership with the people of Seattle, Mayor Michael McGinn, Police Chief John Diaz, and his officers to create and implement a comprehensive blueprint for sustainable reform.”
“The solution to the problems identified within the Seattle Police Department will require strong and consistent leadership along the chain of command, effective training and policies, and vigilant oversight,” said Jenny A. Durkan, U.S. Attorney for the Western District of Washington. “This investigation and its findings provide a clear path forward. Ongoing efforts by the city and department to address these findings will not only ensure that obligations under the Constitution are met, but will improve public confidence in the department and enhance its ability to serve the people of Seattle.”
Based on a randomized, stratified and statistically valid sample of SPD’s use of force reports from Jan. 1, 2009, to April 4, 2011, factual findings include:
- When SPD officers use force, they do so in an unconstitutional manner nearly 20 percent of the time;
- SPD officers too quickly resort to the use of impact weapons, such as batons and flashlights. When SPD officers use batons, 57 percent of the time it is either unnecessary or excessive;
- SPD officers escalate situations, and use unnecessary or excessive force, when arresting individuals for minor offenses. This trend is pronounced in encounters with persons with mental illnesses or those under the influence of alcohol or drugs. This is problematic because SPD estimates that 70 percent of use of force encounters involve these populations.
The Justice Department also found that a number of long-standing and entrenched deficiencies have caused or contributed to these patterns or practices of unlawful or troubling conduct, including the following:
- Deficiencies in oversight, policies and training with regard to when and how to (1) use force, (2) report uses of force and (3) use many impact weapons (such as batons and flashlights);
- Failure of supervisors to provide oversight of the use of force by individual officers, including appropriate investigation and review of uses of force (notably, among the approximately 1,230 use of force reports from January 2009 to April 2011, only five were referred for “further review” at any level within SPD);
- Ineffective systems of complaint investigation and adjudication;
- An ineffective early intervention system and disciplinary system;
- Inadequate policies and training with regard to pedestrian stops and biased policing; and
- A failure to collect adequate data to assess biased policing allegations.
Resolution of these findings will require a written, court-enforceable agreement that sets forth remedial measures to be taken within a fixed period of time.
This investigation was conducted jointly by the Special Litigation Section of the Civil Rights Division and the U.S. Attorney’s Office for the Western District of Washington, with the assistance of law enforcement professionals, including former police chiefs.
The findings letter can be found at www.justice.gov/crt/about/spl/seattlepd.php . For more information on the Justice Department’s Civil Rights Division, please visit www.justice.gov/crt . If you have any comments or concerns, please feel free to contact us at [email protected] .
Iraqi National Pleads Guilty to 23-Count Terrorism Indictment in KentuckyRead the Press Release
BOWLING GREEN, KY -- Iraqi citizen Waad Ramadan Alwan pleaded guilty to federal terrorism charges today in U.S. District Court before Senior Judge Thomas B. Russell, announced Lisa Monaco, Assistant Attorney General for National Security; David J. Hale, U.S. Attorney for the Western District of Kentucky; and Elizabeth A. Fries, Special Agent in Charge of the FBI Louisville Division.
Alwan, 30, a former resident of Iraq, pleaded guilty to all counts of a 23-count indictment charging him with conspiracy to kill U.S. nationals abroad; conspiracy to use a weapon of mass destruction (explosives) against U.S. nationals abroad; distributing information on the manufacture and use of improvised explosive devices (IEDs); attempting to provide material support to terrorists and to al-Qaeda in Iraq; as well as conspiracy to transfer, possess and export Stinger missiles. Alwan was indicted by a federal grand jury in Bowling Green, Ky., on May 26, 2011.
Alwan faces a maximum sentence of life in prison under the sentencing guidelines and a mandatory minimum of 25 years in prison. His sentencing is scheduled for April 3, 2012, at noon in federal court in Bowling Green before Judge Russell.
Alwan’s co-defendant, Mohanad Shareef Hammadi, 24, is charged in the same indictment with attempting to provide material support to terrorists and to al-Qaeda in Iraq, as well as conspiracy to transfer, possess and export Stinger missiles. Hammadi has entered a plea of not guilty to all charges and is presumed innocent unless and until proven guilty. A trial date for him has not been scheduled. Hammadi and Alwan were first arrested on criminal complaints on May 25, 2011.
“The successful investigation, arrest, interrogation and prosecution of Mr. Alwan demonstrates the effectiveness of our intelligence and law enforcement authorities in bringing terrorists to justice and preventing them from harming the American people,” said Assistant Attorney General Monaco. “I applaud all the dedicated professionals in the law enforcement and intelligence communities who are responsible for this successful outcome.”
According to the plea agreement and other court documents filed in this case, from about 2003 through 2006, Alwan knowingly conspired to kill U.S. nationals in Iraq. During this period, Alwan was in Iraq where he conspired with others to plant and detonate numerous IEDs against U.S. troops in Iraq. For instance, Alwan admitted that he and his co-conspirators planted an IED in a road near the Salah ad Din province in Iraq in an attempt to kill U.S. troops that traveled on this particular road. In addition, the FBI found two latent fingerprints belonging to Alwan on a component of a separate IED that was recovered by U.S. forces in Iraq in 2005.
Alwan also admitted today that from about October 2010 through May 2011, he knowingly taught and demonstrated to another individual in Kentucky how to manufacture and use an IED. Specifically, Alwan drew diagrams of different types of IEDs and also provided detailed oral instructions on how to manufacture and use those IEDs. He provided these diagrams with the intent that they be used to train others in the construction and use of such IEDs for the purpose of killing U.S. nationals overseas, including officers and employees of the United States.
In addition, Alwan admitted that from about September 2010 through May 2011, while in Kentucky, he knowingly attempted to provide material support and resources to terrorists and to al-Qaeda in Iraq, including money, weapons, and expert advice and assistance. On multiple occasions, for example, Alwan transferred money believing it would be provided to al-Qaeda in Iraq for the purpose of murdering U.S. employees or U.S. nationals overseas. In addition, he also transferred Stinger surface-to-air missile launcher systems, rocket-propelled grenade launchers, C4 plastic explosives, grenades, machine guns and sniper rifles, believing these items would be provided to al-Qaeda in Iraq for the purpose of murdering of U.S. employees or U.S. nationals overseas.
Finally, Alwan admitted that on March 16, 2011, while in Kentucky, he conspired with another individual to transfer, receive, possess and export two Stinger surface-to-air missile launcher systems.
Neither the bomb-making instructions, nor the Stinger missiles nor the other weapons or money transferred by Alwan while in Kentucky were actually provided to al-Qaeda in Iraq, but instead were carefully controlled by law enforcement as part of an undercover operation.
“Today in open court, Waad Alwan admitted to engaging in terrorist activities both here in the United States and in Iraq. He acknowledged he had built and placed numerous improvised explosive devices (IEDs) aimed at killing and injuring American soldiers in Iraq, and he admitted that he tried to send numerous weapons from Kentucky to Iraq to be used against American soldiers,” said U.S. Attorney Hale. “Bringing Alwan to justice is the result of a comprehensive effort by many in our law enforcement and intelligence communities. The FBI agents of the Louisville Division, along with the federal and local law enforcement members of the Joint Terrorism Task Forces here in Kentucky and our many other partners are to be commended. Their collaborative effort successfully thwarted the ongoing intentions of an experienced terrorist. The guilty plea today sends a strong message to anyone who would attempt similar crimes that they will face the same determined law enforcement and prosecution efforts.”
This case is being investigated by the Louisville Division of the FBI. Assisting in the investigation were members of the Louisville and Lexington Joint Terrorism Task Forces, U.S. Immigration and Customs Enforcement, U.S. Marshals Service, U.S. Department of Defense, U.S. Citizenship and Immigration Services and the Bowling Green Police Department.
This prosecution is being handled by Assistant U.S. Attorneys Mike Bennett and Bryan Calhoun from the U.S. Attorney’s Office for the Western District of Kentucky and Trial Attorney Larry Schneider from the Counterterrorism Section of the Justice Department’s National Security Division.
Department of Justice Files Lawsuit Alleging Employment Discrimination by Florida Home Health Care CompanyRead the Press Release
WASHINGTON – The Justice Department filed a motion to intervene in a lawsuit yesterday against Home Care Giver Services Inc., a Florida corporation that provides home health aides, certified nursing assistants, licensed practical nurses and registered nurses to customers who seek home-based care givers. The Justice Department’s complaint alleges that the company discriminated against a U.S. citizen when it terminated her based on her national origin. The Immigration and Nationality Act’s (INA) anti-discrimination provision prohibits employers from discriminating against workers based on national origin or citizenship status in the hiring or firing process.
The charging party — a Colombian native — has been a U.S. citizen since she moved to Florida in 1978. Fluent in English, she began working for Home Care Giver Services Inc. in November 2010. According to the department’s findings, the company subjected her to insults and derogatory statements about her accent and Hispanic heritage and eventually terminated her in January 2011 because of her national origin.
“Discriminating against an employee based on his or her ancestry is completely contrary to the values and laws of our nation,” said Thomas E. Perez, Assistant Attorney General in charge of the Civil Rights Division. “The Justice Department is committed to vigorously enforcing the anti-discrimination provisions of the INA, including those protecting employees from discrimination based on their national origin.”
The charging party filed a lawsuit with the Office of the Chief Administrative Hearing Officer (OCAHO) within the Executive Office for Immigration Review on Sept. 14, 2011. Because the charging party has already filed a complaint, the Justice Department seeks to intervene in the existing lawsuit. The Justice Department’s lawsuit is being prosecuted by Phil Telfeyan and Byron Wong, trial attorneys.
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 has jurisdiction over national origin discrimination cases involving employers employing four to 14 employees. The Equal Employment Opportunity Commission has jurisdiction over national origin discrimination cases involving larger employers. 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), 1-800-255-8255 (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/osc.
CEO of Comcast Brian Roberts to Pay $500,000 Civil Penalty for Violating Antitrust Premerger Notification RequirementsRead the Press Release
WASHINGTON – Comcast Corporation’s CEO Brian L. Roberts will pay a $500,000 civil penalty to settle charges that he violated premerger reporting and waiting requirements when he acquired Comcast voting securities, the Department of Justice announced today.
The Justice Department’s Antitrust Division, at the request of the Federal Trade Commission, filed a civil antitrust lawsuit today in U.S. District Court in Washington, D.C., against Roberts for violating the notification requirements of the Hart-Scott-Rodino (HSR) Act of 1976. At the same time, the department filed a proposed settlement that, if approved by the court, will settle the charges.
Roberts is also chairman of the board of Comcast, a leading provider of cable television services headquartered in Philadelphia.
According to the complaint, Roberts failed to comply with the antitrust premerger notification requirements of the HSR Act before acquiring voting securities of Comcast as part of his compensation as chairman and chief executive officer of Comcast beginning on Oct. 22, 2007, which resulted in his holding more than $119.6 million of Comcast stock. On Aug. 25, 2009, Roberts made a corrective filing for Comcast voting securities he had acquired. Although this is the first time Roberts has been charged with an HSR Act violation, previously he had twice made corrective filings regarding transactions that he acknowledged were reportable under the HSR Act, asserting that the failures to file and observe the waiting period were inadvertent.
The Hart-Scott-Rodino Act of 1976, an amendment to the Clayton Act, imposes notification and waiting period requirements on individuals and companies over a certain size before they consummate acquisitions resulting in holding stock or assets above a certain value, which was $59.8 million in 2007 and is currently $66 million.
Federal courts can assess civil penalties for premerger notification violations under the HSR Act in lawsuits brought by the Department of Justice. For a party in violation of the HSR Act before Feb. 10, 2009, the maximum civil penalty is $11,000 a day for each day it is in violation of the Act. For a party in violation of the HSR Act on or after Feb. 10, 2009, the maximum penalty is $16,000 a day.
Thursday 15 December 2011
Three Pittsburgh Crips Members Sentenced to Prison on Racketeering ChargesRead the Press Release
WASHINGTON – Dominique Steele, Nicky Evans and Jamar Pharr, of Pittsburgh, were sentenced this week in federal court 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.
Jamar Pharr, 27, aka “Brownway,” was sentenced today by Senior U.S. District Judge Gustave Diamond to 10 years in prison. Pharr pleaded guilty on Aug. 18, 2011, to one count of conspiracy to engage in a racketeering enterprise.
Dominique Steele, 21, aka “C-Flack,” was sentenced yesterday to 15 years in prison by Judge Diamond. Steele pleaded guilty on Aug. 25, 2011, to one count of conspiracy to engage in a racketeering enterprise and one count of discharging a firearm in furtherance of a crime of violence.
Nicky Evans, 31, aka “Yamma,” was sentenced yesterday to 88 months in prison. Evans pleaded guilty on Aug. 23, 2011, to one count of conspiracy to engage in a racketeering enterprise.
According to the guilty pleas, Steele, Pharr, Evans and others participated in a pattern of racketeering activity that included robberies at gun point; attempted murders; distribution of cocaine, heroin and crack cocaine; and obstruction of justice and witness intimidation.
According to court documents, Pharr and Steele were members of the Northview Heights/ Fineview Crips, while Evans was a member of the Brighton Place Crips. The Brighton Place Crips were 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 Crips were formed in the early 1990s; in 2003, it formed an alliance with the Northview Heights/ Fineview Crips. This alliance expanded the gang’s drug trafficking territory, and increased the number of gang members and associates available to preserve and protect the gang’s power, territory and profits through violence.
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 and bonds, as well as payments to jail commissary accounts and support payments to incarcerated members’ families.
In addition, gang members had violent confrontations with members of the rival Manchester OG’s and other street gangs operating in the Northside Section of Pittsburgh. Members and associates obtained greater authority and prestige within the enterprise based on their reputation for violence and their ability to obtain and sell a steady supply of illegal drugs. According to court documents, the Brighton Place/Northview Heights Crips gang members identify themselves by wearing blue, flashing Crips gang hand signals, and using phrases such as “Cuz,” “C-Safe,” “Loc” and “G.K.”
Steele, Evans and Pharr are three of the 26 defendants charged in February 2010 with being members or associates of the Brighton Place/Northview Heights Crips, a racketeering enterprise. This prosecution resulted from a Project Safe Neighborhoods Task Force investigation that began in 2005. To date, all members or associates 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 Rive tti of the Western District of Pennsylvania and Trial Attorney Kevin 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.
Texas Oil Company Sentenced to Pay $12 Million for Clean Air Act and Obstruction Crimes in LouisianaRead the Press Release
WASHINGTON – Pelican Refining Company LLC, was sentenced today to pay $12 million for felony violations of the Clean Air Act and obstruction of justice charges in federal court in Lafayette, La., announced Stephanie A. Finley, U.S. Attorney for the Western District of Louisiana, Ignacia S. Moreno, Assistant Attorney General of the Environment and Natural Resources Division of the Department of Justice, and Cynthia Giles, Assistant Administrator for the U.S. Environmental Protection Agency’s (EPA) Office of Enforcement and Compliance Assurance.
“This corporation operated without even the most basic requirements of an environmental compliance plan and endangered the public and its own employees by implementing unsafe practices in violation of its permit and reporting requirements,” said Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division of the Department of Justice. “Today's plea demonstrates that the Justice Department will continue to vigorously prosecute those who violate environmental and workplace safety laws.”
“This conviction sends a message to all those who threaten Louisiana’s precious environment that if they ignore their duty to adhere to the environmental laws, they will be investigated, prosecuted, fined and sentenced accordingly,” said U.S. Attorney Finley. “My office takes these violations very seriously, and we will continue to aggressively prosecute these types of cases. I particularly want to thank EPA, the Louisiana Department of Environmental Quality and the state police for helping to bring these serious crimes to light and assisting in the investigation and prosecution of Pelican and the responsible individuals.”
“Facilities have a responsibility to protect their employees and local residents by following our nation’s environmental laws,” said Cynthia Giles, Assistant Administrator for EPA’s Office of Enforcement and Compliance Assurance. “Corporations that choose to cut corners and ignore these critical safeguards will face significant consequences.”
Pelican was sentenced today by U.S. District Court Judge Richard T. Haik Sr. to pay a $12 million penalty, which includes a $10 million criminal fine and $2 million in community service payments that will go toward various environmental projects in Louisiana, including air pollution monitoring. The criminal fine is the largest ever in Louisiana for violations of the Clean Air Act. Pelican is also prohibited from future operations unless it implements an environmental compliance plan, which includes independent quarterly audits by an outside firm and oversight by a court appointed monitor.
In a joint factual statement filed in court, Pelican, headquartered in Houston, admitted that the company had knowingly committed criminal violations of its operating permit at the refinery located in Lake Charles, La. The violations were discovered during a March 2006 inspection by the Louisiana Department of Environmental Quality (LDEQ) and the EPA, which identified numerous unsafe operating conditions. Pelican also pleaded guilty to obstruction of justice for submitting materially false deviation reports to LDEQ, the agency that administers the federal Clean Air Act in Louisiana.
Pelican admitted to the following:
- Pelican had no company budget, no environmental department and no environmental manager;
- In order to comply with a permit issued under the Clean Air Act, the refinery was required to use certain key pollution prevention equipment, but that equipment was either not functioning, poorly maintained, improperly installed, improperly placed into service and/or improperly calibrated;
- It was a routine practice for over a year to use an emergency flare gun to re-light the flare tower at the refinery designed to burn off toxic gases and provide for the safe combustion of potentially explosive chemicals; because the pilot light was not functioning properly, employees would take turns trying to shoot the flare gun to relight the explosive gasses;
- Sour crude oil was stored in a tank that was not properly placed into service and remained in the tank after the roof sank;
- A caustic scrubber designed to remove hydrogen sulfide from emissions was bypassed;
- A continuous emission monitoring system (CEMS) designed to measure the hydrogen sulfide levels in refinery emissions was not working properly; and
- Pelican provided false information to the states of Louisiana and Texas concerning the laboratory testing of asphalt.
Byron Hamilton, the Pelican vice-president who oversaw operations at the Lake Charles refinery since 2005 from an office in Houston pleaded guilty on July 6, 2011, to the crime of negligently placing persons in imminent danger of death and serious bodily injury in violation of the Clean Air Act as a result of negligent releases at the refinery. Hamilton faces up to one year in prison and a $200,000 fine for each of the two Clean Air Act counts. On Oct. 31, 2011, Pelican’s former asphalt facilities manager, Mike LeBleu, also pleaded guilty to a negligent endangerment charge under the Clean Air Act.
The government’s investigation of the Pelican Refinery continues. Under the Crime Victims’ Rights Act, crime victims are afforded certain statutory rights, including the opportunity to attend all public hearings and provide input to the prosecution. Any person adversely impacted is encouraged to visit www.justice.gov/usao/law/vicwit/index.html to learn more about the case and the Crime Victims’ Rights Act or you may contact the Victim Witness Coordinator for the U.S. Attorney’s Office, Western District of Louisiana.The criminal investigation is being conducted by the EPA Criminal Investigation Division in Baton Rouge and the Louisiana State Police, with assistance from the Louisiana Department of Environmental Quality. The case is being prosecuted by U.S. Attorney Finley, Senior Trial Attorney Richard A. Udell and Trial Attorney Christopher Hale of the Environmental Crimes Section of the Environment and Natural Resources Division of the U.S. Department of Justice.
Photos:
www.epa.gov/compliance/criminal/investigations/pelican-exhibits.pdf.The Joint Factual Statement:
www.epa.gov/compliance/criminal/investigations/pelican-jfs-10-21-11.pdf.More information on EPA’s criminal enforcement program: www.epa.gov/compliance/criminal/index.html.
Maryland Business Owner Pleads Guilty for Failing to Pay Employment TaxesRead the Press Release
WASHINGTON – Richard Stewart, a resident of Mitchellville, Md., pleaded guilty today for failing to pay over employment taxes in connection with his ownership of Montgomery Mechanical Services, the Justice Department and Internal Revenue Service (IRS) announced today.
According to the plea agreement and criminal information, from at least 2003 through 2008, Stewart owned and operated Montgomery Mechanical Services, a company that installed plumbing, heating and air conditioning in commercial buildings and that had offices in Baltimore and Capitol Heights, Md. From 2003 through at least 2008, Stewart did not collect, truthfully account for and pay over approximately $3,969,337 of Federal Insurance Contribution Act (FICA) taxes and federal income tax withholdings, commonly known as trust fund taxes, from his employees’ wages. According to the terms of the plea agreement, Stewart is required to pay restitution to the IRS in the amount of $5,414,647, which encompasses both the trust fund taxes that he failed to pay and his obligation, as an employer, to pay over a matching portion of FICA taxes.
Stewart faces a potential maximum sentence of five years in prison and a fine of up to $250,000.
The case was investigated by IRS-Criminal Investigation. Trial Attorneys Tino M. Lisella and Jeffrey L. Shih of the Justice Department’s Tax Division handled the prosecution.
Sentencing is tentatively scheduled for April 23, 2012 before the Honorable Roger W. Titus in Greenbelt, Md.
Former America’s Most Wanted Fugitive Sentenced in Virginia to 105 Years in Prison for Leading International Conspiracy to Defraud the MilitaryRead the Press Release
WASHINGTON – Roger Charles Day Jr., a former America’s Most Wanted fugitive, was sentenced today to 105 years in prison for his role in leading an international conspiracy to defraud the Department of Defense (DOD) of more than $11.2 million by supplying nonconforming and defective parts for military aircraft, vehicles and weapons systems.
The sentence was announced today by U.S. Attorney Neil H. MacBride of the Eastern District of Virginia; Assistant Attorney General Lanny A. Breuer of the Criminal Division; Special Agent in Charge Robert E. Craig of the Defense Criminal Investigative Service (DCIS) Mid-Atlantic Field Office; and Special Agent in Charge Edward T. Bradley of the DCIS Northeast Field Office.
Day, 47, formerly of Long Valley, N.J., was also ordered by U.S. District Judge John Gibney to forfeit 3,496 ounces of gold bars and coins, two sport utility vehicles and $2.1 million, which together represents his proceeds from the scheme. In addition, Judge Gibney ordered Day to pay a $3 million punitive fine and $6.2 million in restitution to the Defense Logistics Agency (DLA), the DOD entity that Day defrauded.
On Aug. 25, 2011, Day was found guilty on all counts, following a nine-day jury trial. Day was charged in August 2008 with conspiracy to commit wire fraud, wire fraud, conspiracy to engage in international money laundering and conspiracy to smuggle gold out of the United States. Day was extradited from Mexico in December 2010 following his arrest in Cancun, Mexico, resulting from a story which aired on America’s Most Wanted pertaining to Day.
“Mr. Day’s greed put the men and women in the U.S. military in harm’s way,” said U.S. Attorney MacBride. “He is a serial fraudster who made millions by exploiting the military supply chain during a time of armed conflict. Today’s sentence ensures that he will never again put our military in danger again.”
“Mr. Day orchestrated a complex, multi-year fraud scheme that jeopardized the safety of our nation’s military personnel,” said Assistant Attorney General Breuer. “He operated this scheme from outside the United States, in an attempt to escape justice, and he deliberately provided defective equipment to the Department of Defense. Today’s lengthy prison sentence reflects the seriousness of Mr. Day’s reckless crimes.”
“The sentencing of Roger Day to 105 years in prison culminates a highly successful investigation and represents an unprecedented sentence for a product substitution investigation by the Defense Criminal Investigative Service with audit support by the Defense Contract Audit Agency. Through his many schemes to defraud the Department of Defense, Day exploited the Department’s complex acquisition process,” said DCIS Special Agents in Charge Bradley and Craig in a joint statement. “It is unpardonable that individuals endeavor to enrich themselves by stealing from the U.S. taxpayer through fraud, especially by denying critical goods to our warfighters combating terrorism in a hostile overseas environment. The Defense Criminal Investigative Service remains resolute in our commitment to aggressively investigate these crimes and to support their prosecution to the fullest.”
According to the evidence at trial and court documents, over a four-year period, Day led a conspiracy to bid on and win contracts to provide parts to the U.S. military for military aircraft, vehicles and weapons systems through the DLA, including through the DLA’s Defense Supply Center in Richmond, Va. The parts included “critical application items,” which are essential to weapons system performance or to the preservation of the lives and safety of operating personnel.
In the course of the scheme, Day and other conspirators, operating in the United States, Canada, Mexico and Belize, formed at least 18 separate companies that posed as legitimate contractors and collectively used a computer program to win nearly 1,000 lucrative contract awards for the various companies. Day and his conspirators then shipped defective parts to the DOD on more than 300 of those contracts, receiving more than $4.4 million in payment on parts that Day purchased for less than $200,000.
In all known cases, the parts sent by Day and his conspirators could not be used for their intended purpose. In one instance, a U.S. Air Force master sergeant at Patrick Air Force Base in Florida was unable to perform necessary testing of missile detection systems on HC-130 aircraft for a period of seven weeks because of a defective Day-supplied part. In another instance, technicians at Robins Air Force Base in Georgia who had requested a new part for the radar control panel of a C-130 aircraft received a bogus part supplied by Day and were required to instead take a used part from another aircraft to complete the necessary repair.
Day and his co-conspirators compounded the fraud by concealing their identities through the use of multiple nominee companies and by assuming others’ identities to operate the companies. When DOD requested proof that the companies had purchased and intended to supply the correct parts from approved manufacturers, Day and others submitted fabricated documents that falsely represented that the correct parts had been purchased. When DOD debarred several of the companies from doing further business with the military, Day directed his conspirators to discontinue bidding through those companies and instead form and use new companies.
According to evidence presented at trial, to conceal the proceeds of the scheme and to prevent recovery, Day directed his conspirators to transfer the scheme’s proceeds to offshore bank accounts and ultimately to purchase more than 3,500 ounces (more than $2.2 million) in gold bars and coins.
Before starting his most recent scheme, Day was sentenced in August 1999 in the District of New Jersey to 97 months in prison for a similar scheme to defraud the DOD and other government agencies, and Day was sentenced in October 1999 in New Jersey state court to 84 months in prison for schemes to defraud the city of Newark, N.J. and the Newark Board of Education. While serving his federal sentence, Day filed hundreds of billions of dollars of fraudulent default judgments against more than 100 people who Day claimed had prosecuted him unfairly, including the prior case’s investigating agents, the prosecuting attorneys, Day’s former defense counsel and the U.S. district judge who sentenced him in New Jersey.
Prior to Day’s trial, five defendants in this conspiracy pleaded guilty. Nathan Francis Victor Carroll was sentenced on Nov. 8, 2007, to 94 months in prison and was ordered to pay nearly $3.7 million in restitution. Gregory Allen Stewart was sentenced on April 29, 2008, to 75 months in prison and was ordered to pay nearly $3.7 million in restitution. Susan Crotty Neufeld was sentenced on May 14, 2008, to five years of probation and ordered to pay $47,600 in restitution for the gold coins she received. Juerg Mehr was sentenced to five years of probation on March 27, 2009. Glenn Teal was sentenced on Sept. 22, 2009, to 90 days in prison.
This case was investigated by the Defense Criminal Investigative Service, with assistance from the Defense Contract Audit Agency. The case was prosecuted by former Assistant U.S. Attorney John S. Davis and Assistant U.S. Attorney Elizabeth C. Wu of the Eastern District of Virginia and Special Assistant U.S. Attorney and Fraud Section Trial Attorney Ryan S. Faulconer of the Justice Department’s Criminal Division. The Criminal Division’s Office of International Affairs provided assistance.
Federal Court Bars Operator of New Jersey Tax Firm from Preparing Federal Tax ReturnsRead the Press Release
WASHINGTON - A federal court has permanently barred Carmen Gonzalez from preparing federal tax returns for others, the Justice Department announced today. The civil injunction order, to which Gonzalez consented without admitting wrongdoing, was signed by Judge Joel A. Pisano of the U.S. District Court for the District of New Jersey. According to the government complaint, Gonzalez, of Allentown, Pa., operates Carmen Tax Services in New Brunswick, N.J.
The complaint alleged that Gonzalez repeatedly failed to comply with due-diligence requirements imposed by federal law on tax preparers who claim the earned income tax credit (EITC) on their customers’ returns. According to the complaint, Gonzalez also falsified deductions and listed bogus dependents on her customers’ returns in order to claim the maximum EITC for them.
The court order requires Gonzalez to send a letter to all customers for whom she prepared a federal tax return since Jan. 1, 2005, informing them that she has agreed to the injunction and is no longer permitted to prepare tax returns for others.
The Internal Revenue Service has listed return preparer fraud as one of its “Dirty Dozen ” tax scams for 2011. In the past decade, the Justice Department’s Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers and tax fraud promoters. Information about these cases is available on the Justice Department website .
El Departamento de Justicia Divulga Resultados de la Investigación de la Oficina del Alguacil del Condado de MaricopaRead the Press Release
WASHINGTON - Después de una investigación exhaustiva, el Departamento de Justicia anunció hoy sus conclusiones en la investigación de derechos civiles en curso sobre la Oficina del Alguacil del Condado de Maricopa [Maricopa County Sheriff’s Office (MCSO)]. El Departamento de Justicia encontró causa razonable para creer que la MCSO, bajo el liderazgo del Alguacil Joseph M. Arpaio, ha exhibido un patrón o práctica de conducta indebida que viola la Constitución y la ley federal. La investigación, abierta en junio de 2008, fue realizada de acuerdo con la Ley de Control de Delitos Violentos y Coacción Legal de 1994 y el Título VI de la Ley de Derechos Civiles de 1964, y las normas de implementación del Título VI.
 El Departamento de Justicia encontró causa razonable para creer que ocurrió un patrón o práctica de conducta inconstitucional y/o violaciones de la ley federal en varias áreas, entre las que se incluyen:
- Prácticas de acción policial discriminatorias, entre las que se incluyen paradas, detenciones y arrestos ilícitos de hispanos;
- Represalias ilegales contra personas que hacían ejercicio de su derecho de la Primera Enmienda de criticar las políticas o prácticas de la MCSO, incluidas, entre otras, prácticas relacionadas con el tratamiento discriminatorio dado a los hispanos; y
- Prácticas carcelarias discriminatorias contra presidiarios hispanos con conocimientos limitados del idioma inglés, al castigarlos y negarles servicios críticos.
El Departamento de Justicia encontró una serie de deficiencias sistémicas antiguas y enraizadas que provocaron o contribuyeron para estos patrones de conducta ilícita, incluidos:
- Ausencia de implementación de políticas que orientaran a los delegados respecto de prácticas policiales;
- Permitir que unidades especializadas utilizaran prácticas inconstitucionales;
- Capacitación inadecuada;
- Supervisión inadecuada;
- Un sistema disciplinario, de supervisión y de rendición de cuentas por actos propios ineficaces; y
- Falta de supervisión y responsabilización externas suficientes.
Además de estas conclusiones formales de patrones o prácticas, la investigación reveló áreas adicionales de gran preocupación, incluidas:
- Uso de fuerza excesiva;
- Prácticas policiales con el efecto de comprometer significativamente la capacidad de la MCSO de proteger adecuadamente a los residentes hispanos; y
- Falta de investigación adecuada de alegatos de agresiones sexuales.
Si bien no hubo hallazgos formales de violaciones de patrón o práctica en conexión con estos temas, la investigación continúa en curso.
“La indiferencia sistemática de la MCSO respecto de protecciones constitucionales básicas ha creado un muro de desconfianza entre la oficina del Alguacil y grandes segmentos de la comunidad, lo cual compromete significativamente la capacidad de la misma de proteger y servir al pueblo", dijo Thomas E. Perez, Secretario de Justicia Auxiliar de la División de Derechos Civiles. “Los problemas están profundamente enraizados en la cultura de la MCSO, y se ven agravados por la tendencia de a MCSO a las represalias contra las personas que dicen lo que piensan”.
La investigación exhaustiva e independiente del departamento consistió en un análisis profundo de las prácticas de la MCSO, así como la participación extensa de la comunidad. Abogados, investigadores y expertos del Departamento realizaron entrevistas con más de 400 personas, incluidos 75 supervisores y delegados actuales y anteriores de la MSCO, entre los que se incluyó el Alguacil Arpaio y 150 actuales y anteriores presidiarios de la MCSO. Además, el departamento analizó miles de páginas de documentos. Muchas de las entrevistas y gran parte de este análisis se demoró cuando la MCSO se negó a proveer los documentos y el acceso requeridos. Finalmente, la MCSO brindó el acceso y los documentos requeridos después de que el departamento entabló una demanda bajo el Título VI en septiembre de 2010.
Abordar los hallazgos de la investigación, y reformar la MCSO, requiere un compromiso sostenido para con un cambio estructural, cultural e institucional de largo plazo. La MCSO debe desarrollar e implementar nuevas políticas y procedimientos, y capacitar a sus agentes en servicios policiales eficaces y constitucionales. Además, la MCSO debe implementar sistemas para garantizar la responsabilización y eliminar la parcialidad ilícita de todos los niveles de la toma de decisiones asociadas a la aplicación de la ley.
El departamento buscará obtener un acuerdo con fuerza ejecutoria judicial e intentará trabajar con la MCSO y funcionarios del Condado de Maricopa en el desarrollo y la implementación de un plan de reforma integral con la supervisión judicial necesaria para corregir las violaciones de la Constitución y la ley federal. “La acción policial eficaz y la acción policial constitucional van de la mano.  El desarrollo y la implementación de reformas significativas ayudarán a reducir el delito, asegurando el respecto por la Constitución y garantizando que el pueblo del Condado de Maricopa confíe en el compromiso de la MSCO hacia hacer valer la ley de manera justa y efectiva", dijo Thomas E. Perez. “Esperamos resolver las inquietudes detalladas en nuestras conclusiones de manera conjunta; sin embargo, no hesitaremos en tomar la acción legal correspondiente si la MCSO elige una línea de acción diferente”.
Esta investigación fue conducida por la Sección de Litigios Especiales de la Sección de Coordinación y Cumplimiento Federales de la División de Derechos Civiles con la asistencia de profesionales de las fuerzas del orden público, incluidos ex jefes de la policía, un asesor en prácticas carcelarias y un asesor en análisis estadístico. Los miembros de la comunidad del Condado de Maricopa que deseen brindar información al Departamento para el avance de esta investigación pueden llamar al 1-877-613-2137 o enviar un mensaje de correo electrónico a [email protected].
Se puede encontrar el informe entero en http://www.justice.gov/crt/about/spl/mcso.php. Para obtener más información sobre la División de Derechos Civiles del Departamento de Justicia, visite www.justice.gov/crt.
NO RESPONDA ESTE MENSAJE. SI TIENE PREGUNTAS, POR FAVOR, UTILICE LOS CONTACTOS EN EL MENSAJE O LLAME A LA OFICINA DE ASUNTOS PÚBLICOS AL 202-514-2007.
Department of Justice Releases Investigative Findings on the Maricopa County Sheriff’s OfficeRead the Press Release
WASHINGTON– Following a comprehensive investigation, the Justice Department today announced its findings in the ongoing civil rights investigation of the Maricopa County Sheriff’s Office (MCSO). The Justice Department found reasonable cause to believe that MCSO, under the leadership of Sheriff Joseph M. Arpaio, has engaged in a pattern or practice of misconduct that violates the Constitution and federal law. The investigation, opened in June 2008, was conducted under the provisions of the Violent Crime Control and Law Enforcement Act of 1994 and Title VI of the Civil Rights Act of 1964, and the Title VI implementing regulations.
The department found reasonable cause to believe that a pattern or practice of unconstitutional conduct and/or violations of federal law occurred in several areas, including:
- Discriminatory policing practices including unlawful stops, detentions and arrests of Latinos;
- Unlawful retaliation against individuals exercising their First Amendment right to criticize MCSO’s policies or practices, including but not limited to practices relating to its discriminatory treatment of Latinos; and
- Discriminatory jail practices against Latino inmates with limited English proficiency by punishing them and denying them critical services.
The Justice Department found a number of long-standing and entrenched systemic deficiencies that caused or contributed to these patterns of unlawful conduct, including:
- A failure to implement policies guiding deputies on lawful policing practices;
- Allowing specialized units to engage in unconstitutional practices;
- Inadequate training;
- Inadequate supervision;
- An ineffective disciplinary, oversight and accountability system; and
- A lack of sufficient external oversight and accountability.
In addition to these formal pattern or practice findings, the investigation uncovered additional areas of serious concern, including:
- Use of excessive force;
- Police practices that have the effect of significantly compromising MCSO’s ability to adequately protect Latino residents; and
- Failure to adequately investigate allegations of sexual assaults.
While no formal findings of pattern or practice violations have been made in connection with these issues, the investigation remains ongoing.
“MCSO’s systematic disregard for basic constitutional protections has created a wall of distrust between the sheriff’s office and large segments of the community, which dramatically compromises the ability to protect and serve the people,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The problems are deeply rooted in MCSO’s culture, and are compounded by MCSO’s penchant for retaliation against individuals who speak out.”
The department’s thorough and independent investigation involved an in-depth review of MCSO practices, as well as extensive community engagement. Department attorneys, investigators and experts conducted interviews with more than 400 individuals including, 75 current and former MCSO supervisors and deputies, including Sheriff Arpaio, and 150 former and current MCSO inmates. In addition, the department reviewed thousands of pages of documents. Many of the interviews and much of this review was delayed when MCSO refused to provide required documents and access. MCSO finally provided the required access and documents after the department filed a lawsuit under Title VI in September 2010.
Addressing the findings, and reforming MCSO, requires a sustained commitment to long term structural, cultural and institutional change. MCSO must develop and implement new policies and procedures and train its officers in effective and constitutional policing. In addition, MCSO must implement systems to ensure accountability, and eliminate unlawful bias from all levels of law enforcement decision making.
The department will seek to obtain a court enforceable agreement and will attempt to work with MCSO and Maricopa County officials to develop and implement a comprehensive reform plan with the judicial oversight needed to address the violations of the Constitution and federal law.
“Effective policing and constitutional policing go hand in hand. Developing and implementing meaningful reforms will assist in reducing crime, ensuring respect for the Constitution, and ensuring that the people of Maricopa County have confidence in MCSO’s commitment to fair and effective law enforcement,” said Thomas E. Perez. “We hope to resolve the concerns outlined in our findings in a collaborative fashion, but we will not hesitate to take appropriate legal action if MCSO chooses a different course of action.”
This investigation was conducted by the Special Litigation Section and the Federal Coordination and Compliance Section of the Civil Rights Division with the assistance of law enforcement professionals, including former police chiefs, a jail practices consultant and a consultant on statistical analysis. Members of the Maricopa County community who may wish to provide information to the department in furtherance of this investigation may call 1-877-613-2137 or email [email protected] .
The full report can be found at www.justice.gov/crt/about/spl/mcso.php For more information on the Justice Department’s Civil Rights Division, please visit www.justice.gov/crt
Court Enters Consent Decree Resolving Food, Drug & Cosmetic Act Allegations Against Idaho DairyRead the Press Release
WASHINGTON – The U.S. District Court for the District of Idaho has entered a consent decree against G&H Dairy LLC., Jesus M. Hurtado, Gilbert M. Hurtado and John J. Gomez to resolve allegations of violations of the Federal Food, Drug and Cosmetic Act, the Justice Department announced today. The government’s action results from a series of inspections by the Food and Drug Administration (FDA) of G&H Dairy’s farms from 2009 to 2011.
The defendants, who are primarily in the dairy business, also sell cows for slaughter as food. Dairy farmers are required to maintain systems to ensure that their use of animal drugs is safe and conforms with the law. Among other things, they are required to wait a certain period of time before they may release food-producing animals treated with drugs for slaughter. Failure to do so may result in excess drugs in the tissues of these animals, above safe limits. This may harm consumers by causing allergic reactions and by contributing to the spread of antibiotic-resistant bacteria.
Between June 2006 and October 2009, the U.S. Department of Agriculture’s Food Safety and Inspection Service identified seven incidents of excess drug residues in culled G&H dairy cows that were sold for slaughter. Following these reports, the FDA inspected the dairy farm and found that G&H had used animal drugs in ways that caused these excess tissue residues in animals sold for slaughter as food. The inspections also revealed that G&H failed to maintain complete records concerning the medication of its animals. FDA issued a warning letter to the farm concerning these violations in 2009. After negotiations with the government, G&H and its principals have agreed to resolve its civil liability through a consent decree.
Under the consent decree, the defendants’ medication practices must be confirmed by the FDA as compliant with the law before G&H may sell cows for slaughter. In addition, the defendants are required to create and maintain documentation to address the problems that the FDA discovered during its inspections.
“It’s important to the health and safety of the American people that our farms adequately monitor and record how they using medications with their food-producing livestock, because failure to do so puts people at risk,” said Tony West, Assistant Attorney General for the Civil Division of the Department of Justice. “Today’s consent decree requires G&H Dairy to establish procedures and keep documentation that will help ensure American consumers receive foods that are safe for themselves and their families.”
The matter was handled by Trial Attorneys Shannon Pedersen and David Sullivan of the Justice Department’s Consumer Protection Branch and Assistant Chief Counsel Julie Doam of the Office of the General Counsel, Food and Drug Administration.
California Building Materials Manufacturer Agrees to Pay $1.4 Million to Settle Clean Air Act ViolationsRead the Press Release
WASHINGTON – The Department of Justice and the U.S. Environmental Protection Agency (EPA) announced today that CalPortland Company (CPC), a major producer of Portland cement and building materials in the United States, has agreed to pay a $1.425 million penalty to resolve alleged violations of the Clean Air Act at its cement plant in Mojave, Calif. In addition to the penalty, CPC will spend an estimated $1.3 million on pollution controls that will reduce harmful emissions of nitrogen oxides (NOx) and sulfur dioxide (SO2), pollutants that can lead to childhood asthma and smog.
“This settlement will bring state of the art controls to a major source of air pollution and secures significant reductions in harmful pollutants,” said Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division of the Department of Justice. “The Mojave plant is one of the largest emitters of nitrogen oxide pollution in California. As a result of the Clean Air Act compliance requirements in the consent decree, residents in the surrounding region will enjoy cleaner and healthier air.”
“Air pollution from cement plants can travel significant distances downwind, crossing state lines and creating region-wide air quality and health problems,” said Cynthia Giles, assistant administrator for EPA’s Office of Enforcement and Compliance Assurance. “Today’s settlement will ensure the proper pollution controls are installed to reduce emission levels and protect communities across the Southwest.”
The $1.425 million penalty is one of the largest settlements for a single cement facility.
The plant is located in Kern County, Calif., which has some of the worst air pollution in the country. The pollutants covered in the settlement contribute to the formation of ground-level ozone or smog. Exposure to even low levels of ozone can cause respiratory problems, and repeated exposure can aggravate pre-existing respiratory diseases.
“The citizens of Kern County deserve to have clean and healthy air,” stated Benjamin B. Wagner, U.S. Attorney for the Eastern District of California. “The significant penalty that the defendant will pay, along with the pollution controls it is installing, underscore the commitment of this office and the Justice Department to protecting the air our children breathe and the environment they live in.”
The government’s complaint alleges that CPC made significant modifications to its plant, resulting in increased emissions of NOx, SO2 and carbon monoxide, without first obtaining a Clean Air Act-required permit and without installing necessary pollution control equipment. Major sources of air pollution are required to obtain such permits before making changes that would result in a significant emissions increase of any pollutant.
The settlement ensures that the proper equipment, estimated to cost $1.3 million to install and $500,000 per year to operate, will be installed to reduce future emission levels. These measures are expected to reduce pollution each year from the plant by at least 1,200 tons of NOx and 360 tons of SO2.
Since 2005, EPA has been focusing on improving compliance with the new source review provisions of the Clean Air Act among industries that have the potential to cause significant amounts of air pollution, including the cement manufacturing industry.
EPA is continuing its commitment to reducing air pollution from cement plants by making it one of EPA’s National Enforcement Initiatives for 2011-2013. SO2 and NOx, two key pollutants emitted from cement plants, 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 CalPortland facility, particularly communities disproportionately impacted by environmental risks and vulnerable populations, including children.
The proposed consent decree was lodged with the U.S. District Court for the Eastern District of California, and will be subject to a 30-day public comment period. 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/calportland.html .
More about EPA’s National Enforcement Initiatives:
www.epa.gov/compliance/data/planning/initiatives/index.html .
Army Captain Pleads Guilty in Virginia to Submitting<br /> False Housing and Travel ClaimsRead the Press Release
WASHINGTON – A captain in the U.S. Army pleaded guilty today in federal court in Alexandria, Va., to making more than $68,000 in false housing and travel claims, 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.
Lisa A. Dean, 38, of Alexandria, pleaded guilty before U.S. District Court Judge Gerald Bruce Lee in the Eastern District of Virginia to a criminal information charging her with two counts of making a false claim against the United States. According to court documents, Dean was stationed in Bamberg, Germany, from 2002 to 2010. Dean admitted that, beginning in 2003, she submitted false housing allowance forms claiming that her dependent mother was living in San Francisco, when in fact she was living in Arizona where the housing rates were lower. Dean admitted that from August 2006 through September 2011, she received a total of $58,167 in excess housing allowance for her mother to which she was not entitled. Dean also admitted that in the fall of 2010, she submitted false travel vouchers claiming that she moved her mother from San Francisco to her new duty station in Alexandria, when in fact no such move occurred. Dean was paid $10,222 as a result of the false travel vouchers.
Dean faces up to five years in prison and a $250,000 fine for each offense, as well as a term of supervised release following her prison term. Dean is also responsible for restitution in the amount of $68,389. Sentencing has been scheduled for Feb. 17, 2012.
This case is being prosecuted by Trial Attorney Richard B. Evans of the Criminal Division’s Public Integrity Section and Charles F. Connolly, Assistant U.S. Attorney in the U.S. Attorney’s Office of the Eastern District of Virginia. The case is being investigated by the Army Criminal Investigation Command.
Wednesday 14 December 2011
US Clean Water Act Settlement in Chicago to Reduce Sewage OverflowsRead the Press Release
WASHINGTON – The Department of Justice, the U.S. Environmental Protection Agency (EPA), and the Illinois Attorney General’s Office today announced a Clean Water Act (CWA) settlement with the Metropolitan Water Reclamation District of Greater Chicago (MWRD) to resolve claims that untreated sewer discharges were released into Chicago area waterways during flood and wet weather events. The settlement will safeguard water quality and protect human health by capturing stormwater and wastewater from the combined sewer system, which services the city of Chicago and 51 communities.
“These much needed upgrades to Chicago’s sewer infrastructure will reduce combined sewage overflows and the public’s exposure to harmful pathogens,” said Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division of the Department of Justice. “The use of innovative green infrastructure in the city’s urban core will reduce runoff and flooding, and improve the quality of the environment where people live.”
“Today’s settlement will prevent polluted stormwater runoff from flowing through Chicago area neighborhoods and into local waterways,” said Cynthia Giles, Assistant Administrator for EPA’s Office of Enforcement and Compliance Assurance. “Combining innovative stormwater management practices, like rain gardens, with necessary infrastructure overhauls will protect people’s health and provide area residents with improved recreational opportunities.”
“This settlement mandates that MWRD make critical structural changes to improve the quality of Chicago’s waterways,” said Illinois Attorney General Lisa Madigan. “By requiring green infrastructure projects, the agreement will also help reduce runoff and flooding for Chicago area residents.”
“This consent decree requires MWRD to invest in green roofs, rain gardens and other green infrastructure to prevent basement flooding in the neighborhoods that are most severely impacted by sewer overflows,” said EPA Region 5 Administrator Susan Hedman. “The enforceable schedule established by this consent decree will ensure completion of the deep tunnel and reservoir system to control untreated sewage releases into Chicago area rivers and Lake Michigan.”
Under the settlement, the Metropolitan Water Reclamation District will work to complete a tunnel and reservoir plan to increase its capacity to handle wet weather events and address combined sewer overflow discharges. The project will be completed in a series of stages in 2015, 2017 and 2029. The settlement also requires MWRD to control trash and debris in overflows using skimmer boats to remove debris from the water so it can be collected and properly managed, making waterways cleaner and healthier.
MWRD is also required to implement a green infrastructure program that will reduce stormwater runoff in areas serviced by MWRD by distributing rain barrels and developing projects to build green roofs, rain gardens or use pervious paving materials in urban neighborhoods. MWRD has also agreed to pay a civil penalty of $675,000.
Raw sewage contains pathogens that threaten public health, leading to beach closures and public advisories against fishing and swimming. This problem particularly affects older urban areas, where minority and low-income communities are often located. Keeping raw sewage and contaminated stormwater out of the waters of the United States is one of EPA’s National Enforcement Initiatives for 2011 to 2013. The initiative focuses on reducing discharges from sewer overflows by obtaining cities’ commitments to implement timely, affordable solutions to these problems, including the increased use of green infrastructure and other innovative approaches.
The proposed consent decree will be subject to a 30-day public comment period. A copy of the consent decree will be available on the Justice Department website: www.justice.gov/enrd/Consent_Decrees.html.
Learn more about EPA’s National Enforcement Initiatives: www.epa.gov/compliance/data/planning/initiatives/initiatives.html#msos.
Three Patient Recruiters for Miami Home Health Companies Sentenced to Prison in $25 Million Health Care Fraud SchemeRead the Press Release
WASHINGTON – Two patient recruiters for a Miami health care agency were sentenced today to 18 and 12 months in prison, respectively, for their participation in a $25 million home health Medicare fraud scheme, announced the Department of Justice, the FBI and the Department of Health and Human Services (HHS).
U.S. District Judge Joan A. Lenard in Miami sentenced Oscar Martinez, 54, to 18 months in prison, three years of supervised release and ordered Martinez to pay $390,000 in restitution. Judge Lenard sentenced Lesder Casanova, 40, to 12 months in prison, three years of supervised release and ordered Casanova to pay $195,000 in restitution.
In addition, on Dec. 12, 2011, co-conspirator patient recruiter Raul Alvarez, 48, was sentenced by Judge Lenard to 10 months in prison for his role in the fraud scheme. Alvarez was also sentenced to three years of supervised release and ordered to pay $118,000 in restitution.
Alvarez, Martinez and Casanova each pleaded guilty earlier this year to one count of conspiracy to commit health care fraud. They were each ordered to pay their restitution jointly and severally with co-defendants.
According to court documents, Casanova was a patient recruiter for ABC Home Health Care Inc., a Miami home health care agency that purported to provide home health and physical therapy services to Medicare beneficiaries. Alvarez and Martinez were patient recruiters for Florida Home Health Care Providers Inc., another related Miami home health care agency. According to court documents, ABC and Florida Home Health only existed to defraud Medicare.
Alvarez, Martinez and Casanova admitted that beginning in approximately January 2006 and continuing until approximately March 2009, they recruited Medicare beneficiaries who would allow ABC and Florida Home Health to bill Medicare for home health care and therapy services that were medically unnecessary and/or never provided. Alvarez, Martinez and Casanova solicited and received kickbacks and bribes from the owners and operators of ABC and Florida Home Health in return for the recruited patients. According to their pleas, Alvarez, Martinez and Casanova knew that the patients they recruited did not qualify for the services billed to Medicare. In addition, the defendants knew that the patient files for their recruited patients were falsified in order to make it appear that the patients qualified for the services.
As a result of the participation of Alvarez, Martinez and Casanova in the illegal scheme, the Medicare program was billed approximately $118,000, $390,000 and $195,000, respectively, for purported home health care services that were not medically necessary and/or were not provided.
Last week, Dr. Jose Nunez was sentenced to 40 months in prison for his role in the fraud scheme and two nurses, Luisa Morciego and Eneida Fry, were each sentenced to 24 months in prison for their roles in the scheme. Another patient recruiter, Vincente Guerra-Nistal, was sentenced to 18 months in prison in October 2011.
The sentences 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 Miami.
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.
Philip Morris and R.J. Reynolds Settle with Justice Department over Tobacco-Industry Document DatabasesRead the Press Release
WASHINGTON – The country’s two biggest tobacco companies have agreed to improve public access to internal tobacco-industry documents and to pay $6.25 million into a court fund that will go to support the country’s largest online collection of tobacco documents, the Justice Department announced today. The agreement is part of the United States’ landmark case against the country’s largest cigarette companies, filed in federal court in Washington. The settlement is with Philip Morris USA and its parent Altria Group, and with R.J. Reynolds Tobacco Company.
The agreement resolves a dispute between the tobacco companies and the United States about the online document databases that the court ordered in 2006. The court ruled then that Philip Morris, R.J. Reynolds and other cigarette companies had suppressed internal documents, information and research, as part of a broad campaign to deliberately deceive the American people about smoking’s health effects, nicotine addiction, manipulating cigarette design to increase addiction, light- and low-tar cigarettes and marketing to youth. As a result, the court ordered the companies to provide public access to all documents they turned over in all smoking-and-health lawsuits in the United States for the next 15 years, through online document websites and through a hard-copy archive known as the Minnesota Depository.
The agreement today resolves a longstanding dispute over certain obligations the tobacco companies have with respect to these online databases. The agreement requires Philip Morris and R.J. Reynolds to pay a total of $6.25 million into a court fund over the next four years. The court fund will turn the money over to the University of California - San Francisco (UCSF), which runs the Legacy Tobacco Documents Library, http://legacy.library.ucsf.edu . The UCSF collection went online in 2000, and provides Internet access to more than 13 million internal tobacco company documents, many of them originally revealed during lawsuits against individual tobacco companies. Researchers have published hundreds of peer-reviewed articles about the tobacco industry’s actions and internal knowledge, based on documents uncovered in the UCSF collection. The money UCSF receives under this proposal will be used to improve access to and the functionality of its online database of tobacco documents.
“To prevent future wrongdoing, the court ordered the tobacco companies to make all documents they disclosed in certain types of lawsuits publicly available for the next 15 years and to pay more than $6 million to maintain the document database,” said Tony West, Assistant Attorney General for the Civil Division of the Department of Justice. “This agreement helps make sure that these documents will be accessible to researchers, journalists, students, lawyers, the government and the public at large – anyone who is interested in learning more about the defendants’ efforts to mislead consumers about the effects of smoking.”
The proposed consent order will not become final until it is reviewed and signed by the court.
Trial Attorneys Daniel Crane-Hirsch and Josh Burke of the Civil Division’s Consumer Protection Branch represented the United States.
Owners of Houston Mental Health Company and Assisted Living Facility Indicted for Alleged Roles in $90 Million Medicare Fraud SchemeRead the Press Release
WASHINGTON – Two owners of a Houston mental health care company, Spectrum Care P.A., and the owner of a Houston assisted living facility were arrested today on charges related to their alleged participation in a $90 million Medicare fraud scheme, announced the Department of Justice, the Department of Health and Human Services (HHS) and the FBI.
Mansour Sanjar, 78, Cyrus Sajadi, 64, and Chandra Nunn, 33, all of Houston, were arrested today in Houston and are expected to make their initial appearances in federal court today and tomorrow. An indictment filed in the Southern District of Texas charges Sanjar, Sajadi and Nunn with conspiracy to commit health care fraud and conspiracy to pay and receive illegal health care kickbacks.
“These defendants allegedly participated in a scheme to cheat the Medicare program out of more than $90 million,” said Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division. “The indictment alleges that Spectrum billed Medicare for mental health services when patients were actually watching movies, playing bingo or engaging in other activities. Our efforts over the past three years to combat Medicare fraud have been unprecedented, and today’s arrests are another example.”
“This case is another excellent example of the partnership and cooperation between the U.S. Attorney’s Office, the Department of Justice and our investigating agencies,” said U.S. Attorney Kenneth Magidson of the Southern District of Texas . “We will continue to work closely with each other to ensure those who engage in such fraudulent health care practices are brought to justice.”
According to the indictment, Sanjar and Sajadi orchestrated and executed a scheme to defraud Medicare beginning in 2006 and continuing until their arrest today. Sanjar and Sajadi owned Spectrum Care P.A., a Houston mental health company that purportedly provided partial hospitalization programs (PHP). A PHP is a form of intensive outpatient treatment for severe mental illness. Sanjar and Sajadi allegedly submitted false and fraudulent claims to Medicare through Spectrum.
According to the indictment, Nunn owned a Houston assisted living facility. The indictment alleges that Sanjar and Sajadi paid kickbacks to Nunn and other owners and operators of assisted living facilities and to patient brokers in exchange for delivering ineligible Medicare beneficiaries to Spectrum. In some cases, the patients received a portion of those kickbacks.
Sanjar and Sajadi allegedly billed Medicare for treatments purportedly provided to these recruited patients. According to the indictment, the treatments were medically unnecessary or never provided at all. The indictment alleges that Spectrum billed Medicare for more than $90 million in medically unnecessary services.
Today’s arrests were announced by Assistant Attorney General Breuer of the Justice Department’s Criminal Division; U.S. Attorney Magidson of the Southern District of Texas; Special Agent in Charge Stephen L. Morris of the FBI’s Houston Field Office; Special Agent in Charge Mike Fields of the Dallas Regional Office of HHS’s Office of the Inspector General (HHS-OIG), the Texas Attorney General’s Medicaid Fraud Control Unit (MFCU); Joseph J. Del Favero, Special Agent in Charge of the Chicago Field Office of the Railroad Retirement Board, Office of Inspector General (RRB-OIG); and Scott Rezendes, Special Agent in Charge of Field Operations of the Office of Personnel Management, Office of Inspector General (OPM-OIG).
The case is being prosecuted by Trial Attorneys Laura Cordova and Allan J. Medina and Acting Deputy Chief Sam S. Sheldon of the Criminal Division’s Fraud Section with assistance from Trial Attorneys Jennifer Ambuehl and Aixa Maldonado-Quinones of the Criminal Division’s Asset Forfeiture and Money Laundering Section. The case was investigated by the FBI, HHS-OIG, MFCU, RRB-OIG and OPM-OIG and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Texas.
Since their inception in March 2007, Medicare Fraud Strike Force operations in nine locations have charged more than 1,140 defendants 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, 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.
Former Police Officer of Puerto Rico Convicted for Role in Providing Security for Drug TransactionsRead the Press Release
WASHINGTON – A former police officer of Puerto Rico has been convicted by a federal jury in San Juan, Puerto Rico, for his role in providing security for drug transactions, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and Special Agent in Charge Joseph S. Campbell of the FBI’s San Juan Division.
Javier A. Diaz Castro, 30, was convicted on Dec. 12, 2011, of two counts of conspiracy to possess with intent to distribute more than five kilograms of cocaine, two counts of attempting to possess with the intent to distribute more than five kilograms of cocaine, and two counts of possession of a firearm in furtherance of a drug transaction. Diaz was charged in an indictment unsealed on Oct. 6, 2010, along with 88 other law enforcement officers in Puerto Rico and 44 other individuals, as part of the FBI undercover operation known as Guard Shack.
According to the indictment and information presented in court, on at least two occasions in 2010, Diaz provided security for what he believed were a series of illegal drug deals, but which in fact were part of the undercover FBI operation. Diaz, a 10-year veteran of the police force, was assigned to the frauds unit at the time of the transactions. According to information presented at trial, Diaz was brought into the scheme by another police officer of Puerto Rico.
In return for the security he provided, based on his departmental training and using his service weapon, Diaz received cash payments of $2,000 per transaction.
U.S. District Judge Gustavo A. Gelpi scheduled sentencing for March 19, 2012. At sentencing, Diaz faces a mandatory minimum sentence of 20 years in prison and a maximum penalty of life in prison.
The case was prosecuted by Trial Attorneys Eric L. Gibson and Barak Cohen of the Criminal Division’s Public Integrity Section. 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.
Florida Man Sentenced to More Than 19 Years in Prison <br /> for Transportation of Child PornographyRead the Press Release
WASHINGTON – Walter Rufus Stanley Waters Jr. of New Port Richey, Fla., was sentenced today to 19 years and seven months in prison and a lifetime of supervised release for transportation of child pornography, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division, U.S. Attorney Robert E. O’Neill of the Middle District of Florida and Special Agent in Charge Steven E. Ibison of the FBI’s Tampa Field Office.
Waters was sentenced by U.S. District Judge Elizabeth A. Kovachevich in Tampa, Fla.
In September 2011, Waters, 46, pleaded guilty to one count of transportation of child pornography. According to court documents and proceedings, in August 2010, Waters uploaded multiple images and videos of child pornography to a social networking site. A search warrant was subsequently executed at Waters’s residence. Waters admitted that he downloaded and possessed multiple images of child pornography. He also admitted to uploading the images to various websites.
This case was investigated by the FBI. The case was prosecuted by Trial Attorney Andrew M. McCormack of Child Exploitation and Obscenity Section (CEOS) in the Justice Department’s Criminal Division and Assistant U.S. Attorney Jennifer Peresie of the Middle District of Florida. The Seattle Police Department provided assistance in the investigation.
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.
CD and DVD Counterfeiter and Supplier Both Sentenced in Atlanta to PrisonRead the Press Release
WASHINGTON – Two individuals were sentenced this week in Atlanta for their involvement in a counterfeit DVD and CD ring, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney Sally Quillian Yates for the Northern District of Georgia.
Charles Ndhlovu, 34, was sentenced on Dec. 12, 2011, by U.S. District Judge William S. Duffey Jr. to 51 months in prison and Scott Ahn, 42, was sentenced yesterday by Judge Duffey to 19 months in prison. Ndhlovu and Ahn also were ordered to serve three years of supervised release following their prison terms. Ahn was ordered to pay $25,000 in restitution to the Recording Industry Association of America and $15,000 in restitution to the Motion Picture Association of America.
Ahn pleaded guilty on Jan. 14, 2010, to one count of conspiracy to commit criminal copyright infringement, to traffic in counterfeit goods and to traffic in counterfeit labels. Ndhlovu was convicted by a federal jury on July 28, 2011, of one count of trafficking in counterfeit labels and two counts of criminal copyright infringement.
“These sentences send an important message that criminal counterfeiting will not be tolerated,” said Assistant Attorney General Breuer. “The sale of counterfeit goods and the theft of intellectual property harm businesses, consumers and artists alike. We will continue to investigate and prosecute individuals who seek to profit illegally by stealing the works of others, including those who knowingly support the criminal activity.”
“These defendants mass-produced hundreds of thousands of counterfeit music CDs and DVD movies in a pirating operation that appeared to be the largest of its kind in the southeastern United States,” said U.S. Attorney Yates. “Their victims included consumers, who were not getting genuine products, as well as the thousands of Americans who earn their livelihoods from the legitimate creation of their art.”
“The wholesale theft of intellectual property and copyrighted material as was seen in this case simply cannot be tolerated,” said Brian D. Lamkin, Special Agent in Charge, FBI Atlanta Field Office. “The FBI is well positioned to investigate such criminal enterprises which attempt to profit off of the creativity and hard work of others and will continue to work with its various law enforcement partners to bring such individuals to justice.”
“The theft of intellectual property undermines our economy and deprives our creative artists of the full value of their work,” said Brock D. Nicholson, special agent in charge of U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI) for Georgia and the Carolinas. “Protecting legitimate business interests is a priority for HSI and our law enforcement partners. We are dedicated to protecting the jobs, the income and the tax revenue that disappear when criminals and criminal organizations traffic in stolen content for their own profit.”
According to evidence at trial, Ndhlovu reproduced thousands of infringing copies of copyrighted CDs and DVDs, purchased corresponding counterfeit labels and packaging, and assembled the final product that he ultimately sold. Evidence at trial also showed that Ndhlovu reproduced thousands of CDs and DVDs per week for distribution. Ahn assisted in supplying Ndhlovu with blank DVDs and CDs knowing that Ndhlovu and others intended to reproduce infringing copies of copyrighted music and movies onto such digital media.
The sentenced defendants were among 13 charged by a federal grand jury on May 19, 2009, in an indictment alleging various copyright, trademark and counterfeit goods offenses. Five other defendants were sentenced earlier this year. One was placed on probation for a year; the other four were sentenced to prison terms ranging from two to five years. The court found that Ahn conspired with co-defendants and others to reproduce and distribute hundreds of thousands of copyright infringing music CDs and movie DVDs which, if legitimate, would have been worth more than $3.7 million.
The case was prosecuted by Assistant U.S. Attorney Brian Pearce in the Northern District of Georgia and Senior Counsel John H. Zacharia of the Computer Crime and Intellectual Property Section in the Justice Department’s Criminal Division. The case was investigated by special agents of the FBI and the ICE-HSI, together with officers of the Atlanta Police Department Organized Crime Unit; Fulton County, Ga., Sheriff’s Office; College Park, Ga., Police Department; and East Point, Ga., Police Department. Assistance was provided by the Recording Industry Association of America and the Motion Picture Association of America.This case is part of efforts being undertaken by the Department of Justice Task Force on Intellectual Property (IP Task Force) to stop the theft of intellectual property. Attorney General Eric Holder created the IP Task Force to combat the growing number of domestic and international intellectual property crimes, protect the health and safety of American consumers, and safeguard the nation’s economic security against those who seek to profit illegally from American creativity, innovation and hard work. The IP Task Force seeks to strengthen intellectual property rights protection through heightened criminal and civil enforcement, greater coordination among federal, state and local law enforcement partners, and increased focus on international enforcement efforts, including reinforcing relationships with key foreign partners and U.S. industry leaders. To learn more about the IP Task Force, go to www.justice.gov/dag/iptaskforce.
Bridgeport, Conn., Man Involved in 2005 Triple Murder Sentenced to Life in PrisonRead the Press Release
WASHINGTON - A Bridgeport, Conn., man was sentenced on Monday by U.S. District Judge Stefan R. Underhill to life in prison for his role in the murder of three Bridgeport residents in August 2005, said Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney David B. Fein for the District of Connecticut
Azikiwe Aquart, aka “Z” and “Ziggy,” 32, pleaded guilty on Aug. 26, 2011, to three counts of murder in aid of racketeering. In pleading guilty, Aquart admitted that he agreed to participate in what he believed would be a robbery with his brother and others. Aquart admitted that after he and his co-conspirators entered the apartment, he murdered James Reid, while other participants in the crime murdered Tina Johnson and Basil Williams.
According to court documents, statements made in court and evidence introduced during the spring 2011 trial of Azibo Aquart, Azikiwe Aquart’s brother, Azibo Aquart was the founder and leader of a drug trafficking group that primarily sold crack cocaine out of an apartment building on Charles Street in Bridgeport. Azibo Aquart and his associates participated in acts of violence, such as threats and assaults, to maintain their control over the group’s drug distribution activities at the Charles Street Apartments. In the summer of 2005, Azibo Aquart and his associates became involved in a drug trafficking dispute with Johnson, a resident of Charles Street Apartments who sometimes sold smaller quantities of crack cocaine without the approval of Azibo Aquart. On the morning of Aug. 24, 2005, Azibo Aquart, Azikiwe Aquart and others entered an apartment at the Charles Street housing facility and murdered Johnson, her boyfriend Reid and her friend Williams. The three victims were bound with duct tape and brutally beaten to death with baseball bats.
On May 23, 2011, after a month-long trial, a federal jury in New Haven, Conn., found Azibo Aquart guilty of the murders of Johnson, Reid and Williams. On June 15, 2011, the jury voted unanimously to impose the federal death penalty against Azibo Aquart for his role in the murders.
This case was investigated by the FBI, Bridgeport Police Department, Connecticut State Police, Connecticut Department of Correction’s Intelligence Unit, U.S. Immigration and Customs Enforcement - Homeland Security Investigations, U.S. Marshals Service, Bridgeport States Attorney’s Office and U.S. Attorney’s Office.
This case is being prosecuted by Assistant U.S. Attorneys Tracy L. Dayton, Peter D. Markle, Alina P. Reynolds of the U.S. Attorney’s Office for the District of Connecticut, and Trial Attorney Jacabed Rodriguez-Coss of the Criminal Division’s Capital Case Unit.
Attorney General Holder Appoints Eight New U.S. Attorneys to Advisory CommitteeRead the Press Release
WASHINGTON - Attorney General Eric Holder announced today the appointments of eight new U.S. Attorneys to serve two-year terms on the Attorney General’s Advisory Committee (AGAC): Laura E. Duffy of the Southern District of California; Timothy J. Heaphy of the Western District of Virginia; Brendan V. Johnson of the District of South Dakota; Pamela C. Marsh of the Northern District of Florida; Carmen Milagros Ortiz of the District of Massachusetts; Robert L. Pitman of the Western District of Texas; James L. Santelle of the Eastern District of Wisconsin; and Carter M. Stewart of the Southern District of Ohio. Their terms are effective Jan. 1, 2012.
“These U.S. Attorneys bring a wealth of experience and diversity to the AGAC, and I will be relying on each of them for their wise counsel as we continue to work together with our law enforcement partners to advance the department’s efforts to preserve our national security, reduce violent crime and gang violence, promote civil rights, and ensure fairness in the marketplace,” said Attorney General Holder.
The Attorney General’s Advisory Committee, created in 1973, represents the voice of the U.S. Attorneys and plays a crucial role in advancing the department’s law enforcement mission as well as advising the Attorney General on policy, management and operational issues impacting the Offices of the U.S. Attorneys.
A brief bio on each appointee is below:
Laura E. Duffy was presidentially appointed U.S. Attorney for the Southern District of California on June 2, 1010. Previously she served as an Assistant U.S. Attorney in the district as Deputy Chief of the General Crimes Section (2008-2010) as well as in the Narcotics Enforcement Section (1997-2007). Prior to joining the U.S. Attorney’s Office, she served in the Department of Justice’s Criminal Division as a trial attorney in the Narcotics and Dangerous Drug Section (1994-1997) and Money Laundering Section (1993-1994).
James L. Santelle was presidentially appointed U.S. Attorney for the Eastern District of Wisconsin on Jan. 4, 2010. Prior to his appointment, Santelle served as the Justice Attaché in the U.S. Embassy, Baghdad, Iraq (2006-2008). Previously, he served as Chief of the Civil Division in the Western District of Michigan (2004-2005), and Principal Deputy Director for the Executive Office for U.S. Attorneys (1999-2001). From 1985-2010, he served in various positions in the Eastern District of Wisconsin. U.S. Attorney Santelle serves as chair of the Advisory Committee’s Security Working Group.
Carter M. Stewart was presidentially appointed U.S. Attorney for the Southern District of Ohio on Sept. 30, 2009. Previously he served as a Litigation Associate with Vorys, Sater, Seymour and Pease LLP (2005-2009); Assistant U.S. Attorney for the Northern District of California (2003-2005); and Litigation Associate with Bingham McCutchen LLP (1999-2002). U.S. Attorney Stewart chairs the Advisory Committee’s Child Exploitation and Obscenity Working Group.
Brendan V. Johnson was presidentially appointed U.S. Attorney for the District of South Dakota on Oct. 16, 2009. Prior to his appointment, he was a Partner with Johnson, Heidepriem, Abdallah and Johnson LLP (2005-2009); Deputy State’s Attorney in Minnehaha County, S.D., (2003-2005); and Legal Advisor to Tim Johnson for Senate (2002). U.S. Attorney Johnson serves as chair of the Advisory Committee’s Native American Issues Subcommittee.
Pamela C. Marsh was presidentially appointed U.S. Attorney for the Northern District of Florida on June 25, 2010. Previously she served as Counsel for Akerman Senterfitt (2006-2010); Assistant U.S. Attorney for the Middle District of Florida (1999-2006); Associate with Akerman Senterfitt (1997-1999); and Associate with Annis, Mitchell, Cockey, Edwards & Roehn, P.A. (1996-1997).
Robert L. Pitman was presidentially appointed U.S. Attorney for the Western District of Texas on Oct. 3, 2011. Prior to his appointment, he served as a U.S. Magistrate Judge in the Western District of Texas (2003-2011). Previously he served in the district as Deputy U.S. Attorney (2001-2003); Interim U.S. Attorney (2001); Austin, Texas, Division Chief (1997-2001); and Assistant U.S. Attorney (1990-1996). He also served as Attorney Advisor in the General Counsel’s Office, Executive Office for U.S. Attorneys (1996-1997), and as an Associate with Fulbright & Jaworski LLP (1989-1990).
Carmen Milagros Ortiz was presidentially appointed U.S. Attorney for the District of Massachusetts on Nov. 6, 2009. Prior to her appointment she served as an Assistant U.S. Attorney for the district (1998-2010). Previously she served in the District Attorney’s Office for Middlesex County, Mass., as Director of District Courts (1992-1994) and Director of Training (1991-1992); Legal Counsel for the Committee on Foreign Relations with the U.S. Senate (1992); Training Coordinator and Program Associate for the Center of Criminal Justice at Harvard Law School (1988-1991); Attorney with the Law Offices of Marinelli & Morisi (1988-1989); Assistant District Attorney in Middlesex County (1983-1988); and a trial attorney in the Honors Program at the Department of Justice (1981-1983). U.S. Attorney Ortiz chairs the Advisory Committee’s Health Care Fraud Working Group.
Timothy J. Heaphy was presidentially appointed U.S. Attorney for the Western District of Virginia on Oct. 16, 2009. Previously he was a Partner with McGuire Woods LLP (2006-2009); Deputy Managing U.S. Attorney for the district (2003-2005); Assistant U.S. Attorney for the District of Columbia (1994-2003); and an Associate with Morrison & Foerster LLP (1992-1994). U.S. Attorney Heaphy chairs the Advisory Committee’s LECC/Victim/Community Issues Subcommittee.
The following is a list of the full 2012 Advisory Committee:
Paul J. Fishman, U.S. Attorney, District of New Jersey, Chair
Loretta E. Lynch, U.S. Attorney, Eastern District of New York, Vice Chair
Steven M. Dettelbach, U.S. Attorney, Northern District of Ohio
Laura E. Duffy, U.S. Attorney, Southern District of California
Stephanie A. Finley, U.S. Attorney, Western District of Louisiana
Timothy J. Heaphy, U.S. Attorney, Western District of Virginia
Brendan V. Johnson, U.S. Attorney, District of South Dakota
Pamela Cothran Marsh, U.S. Attorney, Northern District of Florida
Carmen Milagros Ortiz, U.S. Attorney, District of Massachusetts
Robert L. Pitman, U.S. Attorney, Western District of Texas
Stephanie M. Rose, U.S. Attorney, Northern District of Iowa
James L. Santelle, U.S. Attorney, Eastern District of Wisconsin
Carter M. Stewart, U.S. Attorney, Southern District of Ohio
Benjamin B. Wagner, U.S. Attorney, Eastern District of California
John F. Walsh, U.S. Attorney, District of Colorado
Sally Quillian Yates, U.S. Attorney, Northern District of Georgia
Ronald C. Machen, U.S. Attorney, ex officio District of Columbia
James Lang, Criminal Chief, ex officio District of Massachusetts
John Parker, Civil Chief, ex officio , Northern District of Texas
Tuesday 13 December 2011
Three Hitachi-LG Data Storage Executives Agree to Plead Guilty for Participating in Bid-Rigging and Price-Fixing Conspiracies Involving Optical Disk DrivesRead the Press Release
WASHINGTON – Three Korean Hitachi-LG Data Storage Inc. (HLDS) executives have agreed to plead guilty and to serve prison time in the United States for their participation in a series of conspiracies to rig bids and fix prices for the sale of optical disk drives, the Department of Justice announced today.
According to the felony charges filed today in U.S. District Court in San Francisco, Young Keun Park, Sang Hun Kim and Sik Hur, aka Daniel Hur, conspired with co-conspirators to suppress and eliminate competition by rigging bids for optical disk drives sold to Dell Inc. and Hewlett-Packard Company (HP) and/or fixing prices for optical disk drives sold to Microsoft Corporation. The three HLDS executives participated in the conspiracies at various times between approximately November 2005 and September 2009. Under the plea agreement, Park and Kim each have agreed to serve eight months in prison and Hur has agreed to serve seven months in prison. Each has also agreed to pay a $25,000 criminal fine. HLDS is a joint venture between Hitachi Ltd., a Japanese corporation, and LG Electronics Inc., a Republic of Korea corporation.
“Today’s plea agreements demonstrate the Antitrust Division’s continued commitment to protect competition in the high tech industry,” said Sharis A. Pozen, Acting Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. “The division will continue to pursue and prosecute those who participate in bid-rigging and price-fixing conspiracies that harm businesses and consumers in the optical disk drive industry.”
Optical disk drives are devices such as CD-ROM, CD-RW (ReWritable), DVD-ROM and DVD-RW (ReWritable) that use laser light or electromagnetic waves to read and/or write data and are often incorporated into personal computers and gaming consoles.
Under the plea agreements, which are subject to court approval, Park, Kim and Hur have also agreed to assist the government in its ongoing investigation into the optical disk drive industry.
According to the charges, from approximately November 2005 until September 2009, Park participated in the conspiracies as HLDS’s vice president and chief marketing officer in charge of optical disk drive sales. The department said that Park had supervisory responsibility for HLDS’s Dell, Microsoft and HP accounts. The department said that Kim participated in the conspiracies at various times as HLDS’s team leader in charge of the HP and Dell accounts and deputy chief marketing officer from approximately November 2005 until September 2009. According to the charges, Hur participated in HP-related conspiracies at various times as HLDS’s team leader, account leader and account manager in charge of the HP account from approximately November 2005 until June 2009.
According to the court documents, Dell hosted optical disk drive procurement events in which bidders would be awarded varying amounts of optical disk drive supply depending on where their pricing ranked. From approximately February 2009 to September 2009, Park and Kim participated in a series of conspiracies involving meetings and conversations with co-conspirators to discuss bidding strategies and prices of optical disk drives. As part of the conspiracies, Park, Kim and co-conspirators submitted bids at collusive and noncompetitive prices and exchanged information on sales, market share and the pricing of optical disk drives to monitor and enforce adherence to the agreements.
The department said that from approximately June 2007 to March 2008, Park and co-conspirators participated in a conspiracy involving meetings and conversations in Taiwan and the Republic of Korea to discuss and to fix the prices of optical disk drives sold to Microsoft. As part of the conspiracy, Park and co-conspirators also exchanged information on the sales of optical disk drives to monitor and enforce adherence to the agreed-upon prices.
According to the court documents, HP also hosted optical disk drive procurement events in which participants would be awarded varying amounts of optical disk drive supply depending on where their pricing ranked. From approximately November 2005 to June 2009, Kim, Park, Hur and co-conspirators participated in a series of conspiracies involving meetings and discussions to predetermine bidding strategies and prices of optical disk drives, resulting in the submission of collusive and noncompetitive bids for HP’s procurement events. Kim, Par, Hur and co-conspirators also exchanged information on sales, market share and the pricing of optical disk drives to monitor and enforce adherence to the agreements
This is the department’s second round of charges resulting from its ongoing investigation into the optical disk drive industry. On Nov. 8, 2011, HLDS pleaded guilty in U.S. District Court in San Francisco to 14 counts of violating the federal antitrust laws between approximately June 2004 and September 2009. HLDS also pleaded guilty to one count of participating in a scheme to defraud in connection with an April 2009 procurement event. On the same day, HLDS was sentenced to pay a $21.1 million criminal fine and has agreed to assist the department in its ongoing investigation into the optical disk drive industry.
Park, Kim and Hur are charged with multiple violations of the Sherman Act. Each count carries a maximum fine of $1 million and up to 10 years in prison. The maximum fine 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.
This case is part of an ongoing joint investigation of the Department of Justice Antitrust Division’s San Francisco Office and the FBI in San Francisco and Houston. Anyone with information concerning illegal or anticompetitive conduct in the optical disk drive industry is urged to call the Antitrust Division’s San Francisco Field Office at 415-436-6660 or visit www.justice.gov/atr/contact/newcase.htm .
Retired Army Major Sentenced to 24 Months in Prison for Engaging in Money Laundering Related to Contracting in Support of Iraq WarRead the Press Release
WASHINGTON - A retired major in the U.S. Army was sentenced today to 24 months in prison for engaging in money laundering of criminally derived property totaling $400,000, which he received from a contractor following his deployment to Kuwait, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division.
Charles Joseph Bowie Jr., 45, of Georgetown, Texas, was sentenced by U.S. District Judge Xavier Rodriguez in the Western District of Texas, San Antonio Division. In addition to his prison term, Bowie was sentenced to three years of supervised release and was ordered to pay $400,000 in restitution.Bowie pleaded guilty in May 2011 to a criminal information charging him with one count of engaging in monetary transactions in property derived from specified unlawful activity. According to court documents, Bowie, a major in the U.S. Army at the time, served in Kuwait from April 2004 to April 2005, in support of Operation Iraqi Freedom. While in Kuwait, Bowie conspired with John Cockerham, also a U.S. Army major at the time, who directed a government contractor to pay Bowie money in exchange for the award of a bottled water contract. As part of his guilty plea, Bowie admitted that he entered into a sham consulting agreement with the contractor in an effort to conceal the four $100,000 payments he received from the contractor between July 2005 and February 2006.
On Jan. 31, 2008, Cockerham pleaded guilty to participating in a bribery and money laundering scheme. He was sentenced on Dec. 2, 2009, to 210 months in prison and ordered to pay $9.6 million in restitution.
This case is being prosecuted by Criminal Division Trial Attorneys Richard B. Evans of the Public Integrity Section and Mark W. Pletcher of the Fraud Section. Assistant U.S. Attorney Susan Biggs for the Western District of Texas, San Antonio Division, is providing assistance in the case.The case is being investigated by the Army Criminal Investigation Command, the Defense Criminal Investigative Service, the FBI, the Internal Revenue Service, the Special Inspector General for Iraq Reconstruction, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations and the International Contract Corruption Task Force.
Justice Department Resolves Citizenship Status Discrimination Charge Against Pennsylvania Employer Sernak FarmsRead the Press Release
WASHINGTON – The Justice Department announced today that it has reached a settlement agreement with S.W.J.J. Inc., or Sernak Farms, based in Weatherly, Penn., to settle allegations that Sernak engaged in discrimination on the basis of citizenship status by preferring to hire temporary visa holders over U.S. citizen applicants and adversely treating its U.S. citizen employees. The underlying charge was filed by Philadelphia Legal Assistance on behalf of eight U.S. citizens residing in Puerto Rico.
The Department of Justice investigation indicated that Sernak hired three foreign national workers under the H2-A visa program without considering hiring three of the eight U.S. citizens because of the belief that H2-A visa holders are more diligent than U.S. workers. Of the five U.S. citizens it did hire, the department’s investigation suggested that Sernak treated them differently than Sernak’s foreign national employees in their terms and conditions of employment, and then dismissed them because of their citizenship status. The Immigration and Nationality Act (INA) generally prohibits employers from hiring or terminating employees because of their citizenship status.
Under the terms of the settlement, Sernak has agreed to pay $30,000 in back pay to the eight injured parties, who are U.S. citizens residing in Puerto Rico. Sernak has also agreed to provide its employees training on the anti-discrimination requirements of the Immigration and Nationality Act (INA), adopt nondiscrimination policies with respect to recruitment and hiring, and maintain and submit records to the Department of Justice for the three-year term of the agreement.
“All workers who are authorized to work in the United States have the right to look for a job without encountering discrimination because of their immigration status or national origin,” said Thomas E. Perez, Assistant Attorney General for the Justice Department’s Civil Rights Division. “We are glad to have reached a settlement with Sernak and we look forward to continuing our work with public and private employers to educate them about anti-discrimination protections and employer obligations under the law.”
The Office of Special Counsel for Immigration-Related Unfair Employment Practices (OSC) is responsible for enforcing the anti-discrimination provision of the INA, which prohibits employers from discriminating against work-authorized individuals on the basis of citizenship status or national origin in hiring, firing, recruitment or referral for a fee. Attorneys Richard Crespo and A. Baltazar Baca represented OSC in this matter.
For more information about protections against employment discrimination under federal immigration law, call OSC’s worker hotline at 1-800-255-7688 (1-800-237-2525, TDD for hearing impaired), OSC’s employer hotline at 1-800-255-8155 (1-800-362-2735, TDD for hearing impaired), or 202-616-5594; email [email protected] ; or visit the website.
Justice Department Enters into a Consent Decree with Bolivar County, Miss., SheriffRead the Press Release
WASHINGTON – The Department of Justice announced today that it has entered into a consent decree that, if approved by the court, will resolve the department’s claims that H.M. Grimmett, sheriff of Bolivar County, Miss., retaliated against Robert E. Brown, a former employee of the sheriff.
The government’s complaint, which was filed along with a consent decree in the U.S. District Court for the Northern District of Mississippi, alleges that the sheriff, through the acts of Warden Thomas Taylor, subjected Mr. Brown to discrimination in violation of Title VII of the Civil Rights Act of 1964. Specifically, the complaint alleges that Mr. Brown was terminated by Warden Taylor from his position as chief of security at the Bolivar County Regional Correctional Facility (BCRCF) because Mr. Brown filed a charge of discrimination with the Equal Employment Opportunity Commission (EEOC).
Under the terms of the consent decree, the sheriff will implement policies and procedures addressing employment discrimination and the avenues by which BCRCF employees may submit complaints of discrimination. The sheriff will also use, at the sheriff’s expense, the Outreach, Education and Training Section of the EEOC’s Birmingham District Office to provide live training to all of the sheriff’s employees with supervisory responsibilities on the law of equal employment opportunity, including Title VII’s prohibition against subjecting persons who engage in activity protected under Title VII to retaliation. Additionally, the sheriff will pay Mr. Brown a $53,500 monetary award.
“Title VII protects employees from retaliation when they oppose employment discrimination. The Department of Justice is committed to enforcing Title VII’s anti-retaliation provisions, which are critical to its anti-discrimination protections,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “A person cannot be terminated from his position for filing a charge of discrimination.”
“All workers have the right to go to work without facing discrimination and without having to suffer retaliation for engaging in protected activity under Title VII,” said Felicia C. Adams, U.S. Attorney for the Northern District of Mississippi. “We hope this case sends a strong message that this type of activity is unacceptable and that the Department of Justice will vigorously pursue such violations of Title VII.”
Additional information about the Civil Rights Division is available on its website at www.justice.gov/crt .
Greek Shipping Company, Master and Chief Engineer of M/V Agios Emilianos Convicted for Intentional Cover-Up of Oil Pollution and Obstruction of JusticeRead the Press Release
WASHINGTON – Ilios Shipping Company S.A., pleaded guilty in federal court in New Orleans for violating the Act to Prevent Pollution from Ships (APPS) and obstruction of justice, announced Assistant Attorney General Ignacia S. Moreno and U.S. Attorney Jim Letten.
Ilios operated the M/V Agios Emilianos, a 738 foot, 36,573 ton bulk carrier cargo ship that hauled grain from New Orleans to various ports around the world. According to the plea agreement, from April 2009 until April 2011, oily bilge waste and sludge was routinely discharged from the vessel directly into the sea without the use of required pollution prevention equipment. During that time, the crew intentionally covered up the illegal discharges of oil waste by falsifying the vessel’s oil record book.
The master of the vessel, Valentino Mislang, previously pleaded guilty to conspiracy to obstruct justice for his role in destroying evidence and instructing crewmembers to lie to the Coast Guard during an inspection of the vessel in April 2011. According to Mislang, a senior manager of Ilios directed the destruction of computer records and ordered Mislang to tell crewmembers to lie to the Coast Guard.
The chief engineer of the vessel, Romulo Esperas, previously pleaded guilty to conspiracy to obstruct justice for his role in falsifying the vessel’s oil record book and directing the discharge of oily bilge waste and sludge directly into the sea. According to Esperas, a senior manager of Ilios directed him to discharge the vessel’s oily waste into the sea and refused to provide funding for the proper discharge of the oily waste to shore-side facilities.
All discharges of sludge or oily bilge waste from a vessel are required to be recorded in the vessel’s oil record book. However, none of the illegal discharges were recorded in the oil record book for the M/V Agios Emilianos.
According to Mislang and Esperas, the company directed them to use a complex system to create the impression that the vessel was consuming the maximum amount of fuel under its charter agreements when in fact it was not. The result was that charterers would overpay Ilios for fuel. Mislang would send daily fuel consumption reports: one to Ilios reporting actual fuel consumption and another to the charterer reporting maximum possible fuel consumption. When the vessel was in port, Esperas would direct that engineers install false sounding tubes into the vessel’s fuel tanks so that when the charterer measured the quantity of fuel in the tank, the soundings would show the tank emptier than it actually was.
If the court accepts the terms of the plea agreement, Ilios will pay an overall criminal penalty of $2 million, $250,000 of which will be in the form of an organizational community service payment to the National Fish and Wildlife Foundation and used to fund projects aimed at the restoration of marine and aquatic resources in the Eastern District of Louisiana. Ilios will also be required to implement an environmental compliance plan, which will ensure that any ship operated by Ilios complies with all maritime environmental requirements established under applicable international, flag state, and port state laws. The plan ensures that Ilios’s employees and the crew of any vessel operated by Ilios are properly trained in preventing maritime pollution. An independent monitor will report to the court about Ilios’s compliance with its obligations during the period of probation.
This case was investigated by the U.S. Coast Guard Investigative Service and the Environmental Protection Agency-Criminal Investigation Division. The case was prosecuted by Emily Greenfield from the U.S. Attorney's Office of the Eastern District of Louisiana and by Ken Nelson of the Environmental Crimes Section of the Environment and Natural Resources Division of the Department of Justice.
Eight Former Senior Executives and Agents<br /> of Siemens Charged in Alleged $100 Million Foreign Bribe SchemeRead the Press Release
WASHINGTON – Eight former executives and agents of Siemens AG and its subsidiaries have been charged for allegedly engaging in a decade-long scheme to bribe senior Argentine government officials to secure, implement and enforce a $1 billion contract with the Argentine government to produce national identity cards, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney Preet Bharara for the Southern District of New York and Ronald T. Hosko, Special Agent in Charge of the FBI, Washington Field Office’s Criminal Division.
The defendants charged in the indictment returned late yesterday are:
- Uriel Sharef, a former member of the central executive committee of Siemens AG;
- Herbert Steffen, a former chief executive officer of Siemens Argentina;
- Andres Truppel, a former chief financial officer of Siemens Argentina;
- Ulrich Bock, Stephan Signer and Eberhard Reichert, former senior executives of Siemens Business Services (SBS); and
- Carlos Sergi and Miguel Czysch, who served as intermediaries and agents of Siemens in the bribe scheme.
The indictment charges the defendants and their co-conspirators with conspiracy to violate the Foreign Corrupt Practices Act (FCPA) and the wire fraud statute, money laundering conspiracy and wire fraud.
“Today’s indictment alleges a shocking level of deception and corruption,” said Assistant Attorney General Breuer. “The indictment charges Siemens executives, along with agents and conduits for the company, with committing to pay more than $100 million in bribes to high-level Argentine officials to win a $1 billion contract. Business should be won or lost on the merits of a company’s products and services, not the amount of bribes paid to government officials. This indictment reflects our commitment to holding individuals, as well as companies, accountable for violations of the FCPA.”
“As alleged, the defendants in this case bribed Argentine government officials in two successive administrations and paid off countless others in a successful effort to secure a billion dollar contract,” said U.S. Attorney Bharara. “When the project was terminated, they even sought to recover the profits they would have reaped from a contract that was awarded to them illegitimately in the first place. Bribery corrupts economic markets and creates an unfair playing field for law-abiding companies. It is critical that we hold individuals as well as corporations accountable for such corruption as we are doing today.”
“Backroom deals and corrupt payments to foreign officials to obtain business wear away public confidence in our global marketplace,” said FBI Special Agent in Charge Hosko of the Washington Field Office’s Criminal Division. “The investigation into this decades-long scheme serves as an example that the FBI is committed to curbing corruption and will investigate those who try to advance their businesses through foreign bribery.”
According to the indictment, the government of Argentina issued a tender for bids in 1994 to replace an existing system of manually created national identity booklets with state of the art national identity cards (the DNI project). The value of the DNI project was $1 billion. In 1998, the Argentine government awarded the DNI project to a special-purpose subsidiary of Siemens AG.
The indictment alleges that during the bidding and implementation phases of the project, the defendants and their co-conspirators caused Siemens to commit to paying nearly $100 million in bribes to sitting officials of the Argentine government, members of the opposition party and candidates for office who were likely to come to power during the performance of the project. According to the indictment, members of the conspiracy worked to conceal the illicit payments through various means. For instance, Bock made cash withdrawals from Siemens AG general-purpose accounts in Germany totaling approximately $10 million, transported the cash across the border into Switzerland and deposited the funds into Swiss bank accounts for transfer to officials. Bock, Truppel, Reichert and other conspirators also allegedly caused Siemens to wire transfer more than $7 million in bribes to a bank account in New York disguised as a foreign exchange hedging contract relating to the DNI project. Over the duration of the conspiracy, the conspirators allegedly relied on at least 17 off-shore shell companies associated with Sergi, Czysch and other intermediaries to disguise and launder the funds, often documenting the payments through fake consulting contracts.
In May 1999, according to the indictment, the Argentine government suspended the DNI project, due in part to instability in the local economy and an impending presidential election. When a new government took power in Argentina, and in the hopes of getting the DNI project resumed, members of the conspiracy allegedly committed Siemens to paying additional bribes to the incoming officials and to satisfying existing obligations to officials of the outgoing administration, many of whom remained in influential positions within the government.
When the project was terminated in May 2001, members of the conspiracy allegedly responded with a multi-faceted strategy to overcome the termination. According to the indictment, the conspirators sought to recover the anticipated proceeds of the DNI project, notwithstanding the termination, by causing Siemens AG to file a fraudulent arbitration claim against the Republic of Argentina in Washington, D.C. The claim alleged wrongful termination of the contract for the DNI project and demanded nearly $500 million in lost profits and expenses. Members of the conspiracy allegedly caused Siemens to actively hide from the tribunal the fact that the contract for the DNI project had been secured by means of bribery and corruption, including tampered witness statements and pleadings that falsely denied the existence of corruption.
In related actions, the indictment also alleges that members of the conspiracy continued the bribe scheme, in part to prevent disclosure of the bribery in the arbitration and to ensure Siemens’ ability to secure future government contracts in Argentina and elsewhere in the region. In four installments between 2002 and 2007, members of the conspiracy allegedly caused Siemens to pay approximately $28 million in further satisfaction of the obligations. Conspirators continued to conceal these additional payments through various means. For example, Sharef, Truppel and other members of the conspiracy allegedly caused Siemens to transfer approximately $9.5 million through fictitious transactions involving a Siemens business division that had no role in the DNI project. They also caused Siemens to pay an additional $8.8 million in 2007 under the legal cover of a separate arbitration initiated in Switzerland by the intermediaries to enforce a sham $27 million contract from 2001 between SBS and Mfast Consulting, a company controlled by their co-conspirator intermediaries, which consolidated existing bribe commitments into one contract. The conspirators caused Siemens to quietly settle the arbitration, keeping all evidence of corruption out of the proceeding. The settlement agreement included a provision preventing Sergi, Czysch and another intermediary from testifying in, or providing information to, the Washington arbitration.
Siemens’s corrupt procurement of the DNI project was not exposed during the lifespan of the conspiracy, and, in February 2007, the arbitral tribunal in Washington sided with Siemens AG, awarding the company nearly $220 million on its DNI claims, plus interest. On Aug. 12, 2009, following Siemens’ corporate resolutions with the U.S. and German authorities – new management of Siemens caused Siemens AG to forego its right to receive the award and, as a result, the company never claimed the award money.
The indictment charges the defendants with conspiracy to violate the anti-bribery, books and records and internal control provisions of the FCPA; conspiracy to commit wire fraud; conspiracy to commit money laundering; and substantive wire fraud.
The charges announced today follow the Dec. 15, 2008, guilty pleas by Siemens AG and its subsidiary, Siemens S.A. (Siemens Argentina), to criminal violations of the FCPA. As part of the plea agreement, Siemens AG and Siemens Argentina agreed to pay fines of $448.5 million and $500,000, respectively.
In a parallel civil action, the Securities and Exchange Commission (SEC) announced charges against executives and agents of Siemens. The department acknowledges and expresses its appreciation of the significant assistance provided by the staff of the SEC during the course of these parallel investigations.
Today’s charges follow, in large part, the laudable actions of Siemens AG and its audit committee in disclosing potential FCPA violations to the department after the Munich Public Prosecutor’s Office initiated an investigation. Siemens AG and its subsidiaries disclosed these violations after initiating an internal FCPA investigation of unprecedented scope; shared the results of that investigation; cooperated extensively and authentically with the department in its ongoing investigation; and took remedial action, including the complete restructuring of Siemens AG and the implementation of a sophisticated compliance program and organization.
The department and the SEC closely collaborated with the Munich Public Prosecutor’s Office in bringing this case. The high level of cooperation, including sharing information and evidence, was made possible by the use of mutual legal assistance provisions of the 1997 Organization for Economic Cooperation and Development Convention on Combating Bribery of Foreign Public Officials in International Business Transactions.
The case is being prosecuted by Principal Deputy Chief Jeffrey H. Knox of the Criminal Division’s Fraud Section, and by Assistant U.S. Attorneys Jason P. Hernandez and Sarah McCallum of the U.S. Attorney’s Office for the Southern District of New York. The Fraud Section of the Justice Department’s Criminal Division and the Complex Frauds Unit of the U.S. Attorney’s Office for the Southern District of New York are handling the case. The case was investigated by FBI agents who are part of the Washington Field Office’s dedicated FCPA squad. The Criminal Division’s Office of International Affairs provided significant assistance in this matter.
Monday 12 December 2011
Virginia Contractor Pleads Guilty to Kickback Scheme and Subscribing to a False Tax ReturnRead the Press Release
WASHINGTON — A Virginia contractor pleaded guilty today to participating in a scheme to steer contracts to him for repair, maintenance and renovation work at healthcare and nursing home facilities owned by Medical Facilities of America Inc. (MFA), the Department of Justice announced.
According to a two-count felony charge filed today in U.S. District Court for the Western District of Virginia, Gary L. Johns, a resident of Salem, Va., conspired with other individuals to steer contracts for repair, maintenance and renovation at MFA healthcare and nursing home facilities throughout Virginia from about March 2006 until at least December 2006. The department said that as part of the conspiracy, an MFA employee who oversaw the bidding process for repair, maintenance and renovation contracts at MFA facilities steered contracts to Johns’ company, Salem Commercial Design, in return for kickbacks. According to the plea agreement, which is subject to court approval, Johns has agreed to cooperate with the department’s ongoing investigation.
According to the court document, the MFA employee created fictitious competitor bids that were higher than the quotes submitted by Johns and other co-conspirator venders, to create the false appearance of competition. The MFA employee directed subordinates to solicit quotes only from Johns. Johns paid more than $124,000 in kickbacks to the MFA employee and received MFA contracts totaling more than $1 million. The department said that as a result of the kickback scheme, MFA was deprived of competitive pricing to its financial detriment. Johns was also charged with making and subscribing to a false 2006 tax return, which is the year in which Johns received payment on the MFA contracts.
Johns is charged with conspiracy to commit mail fraud for the kickback scheme, which carries a maximum penalty of 20 years in prison and a $250,000 criminal fine. Johns is also charged with making and subscribing to a false tax return, which carries a maximum penalty of three years in prison and a $250,000 criminal fine, together with the cost of prosecution. The maximum fines for each of these charges 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 maximums.
The charge is the latest to arise out of the department’s ongoing fraud investigation into the award of repair, maintenance and renovation contracts at facilities owned by MFA. The investigation is being conducted by the Antitrust Division’s Philadelphia Field Office, the U.S. Attorney’s Offices for the Western District of Virginia, the FBI in Roanoke, Va., and the Internal Revenue Service-Criminal Investigation in Roanoke. Anyone with information concerning fraudulent behavior relating to the award of contracts by MFA should contact the Antitrust Division’s Philadelphia Field Office at 215-597-7405 or visit www.justice.gov/atr/contact/newcase.htm.