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Monday 12 December 2011
Tennessee Construction Company and Georgia Department of Transportation Agree to Pay $1.5 Million Penalty to Resolve Clean Water Act ViolationsRead the Press Release
WASHINGTON – Wright Brothers Construction Co., of Charleston, Tenn., and the Georgia Department of Transportation (GDOT) have agreed to pay a $1.5 million penalty and spend more than $1.3 million to offset environmental damages to resolve alleged violations of the Clean Water Act (CWA), the Department of Justice and the Environmental Protection Agency (EPA) announced today. The civil penalty is one of the largest ever under the CWA provisions prohibiting the unauthorized discharge of dredged or fill material into waters of the United States.
The complaint alleges that between 2004 and 2007, Wright Brothers, with approval from GDOT, piped and buried all or portions of seven primary trout streams in violation of the CWA. Wright Brothers was hired by GDOT to dispose of excess soil and rock generated during two GDOT highway expansion projects in northeast Georgia. The contracts between GDOT and Wright Brothers specifically required Wright Brothers to obtain written environmental clearance from GDOT prior to using any site as a fill site. GDOT approved sites that included streams considered to be waters of the United States.
Burying and piping streams can destroy valuable aquatic habitat and threatens water quality. The reduced water quality may have adversely impacted downstream trout populations, which are a major recreational resource to the region. All of the streams that were filled are tributaries of either Lake Burton or Tallulah Falls Lake.
“Construction projects, including important expansions of highway infrastructure, must be conducted in full compliance with the Clean Water Act, which protects our nation’s waterways, aquatic habitats and recreational resources from harm,” said Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division of the Department of Justice. “This settlement will restore and mitigate pollution of area streams for the benefit of the people of Georgia.”
“Dumping dirt and waste rock into our nation’s waters threatens water quality and aquatic habitats,” said Cynthia Giles, Assistant Administrator for EPA’s Office of Enforcement and Compliance Assurance. “Today’s settlement will restore damaged streams, protecting trout habitat and recreational opportunities for the people of northeastern Georgia.”
“Through this enforcement action, we are sending a strong message about the importance of protecting headwater streams in the Southeast,” said Gwendolyn Keyes Fleming, EPA Region 4 Regional Administrator. “The streams impacted by the violations are designated by the state of Georgia as primary trout streams, which provide essential cold water habitat for a variety of species, support the robust recreational fishing industry in north Georgia, and thereby impact the health and well-being of many families.”
In Atlanta, U.S. Attorney Sally Quillian Yates said, “The citizens of Rabun County deserve to have our tributaries and streams kept free of unauthorized fill material and similar pollutants. This significant monetary agreement underscores the commitment of this office and the Justice Department to our water supply, its life sources and the environment.”
Under the settlement, Wright Brothers and GDOT must perform injunctive relief measures, including purchasing 16,920 mitigation credits at an estimated retail cost of $1.35 million to offset the impacts to waters of the United States that cannot be restored. The credits must be purchased from mitigation banks servicing the area in which the violations occurred. A mitigation bank is a wetland, stream or other aquatic resource area that has been set aside for the purpose of providing compensation for impacts to aquatic resources that occurred under a federal, state or local permit.
Wright Brothers and GDOT will also remove piping from and restore the bed and bank of 150 feet of stream channel that was impacted from their disposal activities. The estimated cost of this work is $25,000. When complete, the restorative measures required under the settlement will mitigate the 2,800 feet of stream impacted by the CWA violations.
The settlement is subject to a 30 day comment period and final court approval. A copy of the consent decree will be available on the Justice Department website: www.justice.gov/enrd/Consent_Decrees.html.
More on this settlement: www.epa.gov/compliance/resources/cases/civil/cwa/wrightbrothers.html.
Minnesota-Based Medtronic Inc. Pays US $23.5 Million to Settle Claims That Company Paid Kickbacks to PhysiciansRead the Press Release
WASHINGTON – Medtronic Inc. of Fridley, Minn., has agreed to pay the United States $23.5 million to resolve allegations that it violated the False Claim Act by using physician payments related to post-market studies and device registries as kickbacks to induce doctors to implant the company’s pacemakers and defibrillators, the Justice Department announced today.
Post-market studies are intended to assess the clinical performance of a medical device or drug after that device or drug has been approved by the Food and Drug Administration. Registries are collections of data maintained by a device manufacturer concerning its products that have been sold and implanted in patients.
The United States contends that Medtronic caused false claims to be submitted to Medicare and Medicaid by using two post-market studies and two device registries as vehicles to pay participating physicians illegal kickbacks to induce them to implant Medtronic pacemakers and defibrillators. Although Medtronic collected data and information from participating physicians, each of the studies and registries required a new or previous implant of a Medtronic device in each patient, and in each case Medtronic paid participating physicians a fee ranging from approximately $1,000 to $2,000 per patient. The United States contends that Medtronic solicited physicians for the studies and registries in order to convert their business from a competitor’s product and/or persuade the physicians to continue using Medtronic products.
“Patients who rely on their healthcare providers to implant vital medical devices expect that those decisions will be made with the patients’ best interests in mind,” said Tony West, Assistant Attorney General for the Civil Division. “Kickbacks, like those alleged here, distort sound medical judgments with financial incentives paid for by the taxpayers.”
“Medicare and Medicaid beneficiaries depend on their physicians to make decisions based on sound medical judgment, especially when they are choosing which pacemaker or defibrillator to implant,” said B. Todd Jones, U.S. Attorney for the District of Minnesota. “Medical device manufacturers must not be permitted to use improper payments to cloud that judgment.”
“Today’s settlement highlights one of the key purposes of the Anti-Kickback law – to ensure that the judgment exercised by health care providers in treating Medicare and Medicaid patients is not influenced by unlawful payments,” said Benjamin Wagner, U.S. Attorney for Eastern District of California.
“Patients trust that decisions to implant certain pacemakers or other medical devices are based on their own health interests and not influenced by kickbacks,” said Daniel R. Levinson, Inspector General of the Department of Health and Human Services. “Companies distorting medical decision-making through kickbacks can expect that OIG investigators and our law enforcement partners will actively investigate and prosecute such unlawful conduct.”
The settlement resolves allegations contained in two whistleblower lawsuits filed under the qui tam provisions of the False Claims Act that are pending in Minnesota and California, respectively. As part of today’s resolution, the whistleblowers will receive payments totaling more than $3.96 million from the federal share of the recovery.
This resolution is part of the government’s emphasis on combating health care fraud and another step for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced by Attorney General Eric Holder and Kathleen Sebelius, Secretary of the Department of Health and Human Services in May 2009. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover nearly $6.5 billion since January 2009 in cases involving fraud against federal health care programs. The Justice Department’s total recoveries in False Claims Act cases since January 2009 are more than $8.5 billion.
This settlement was the result of an investigation by the Justice Department’s Civil Division, the U.S. Attorney’s Office for the District of Minnesota, the U.S. Attorney’s Office for the Eastern District of California, the Office of Inspector General at the U.S. Department of Health and Human Services and the FBI.
Longtime Associate of the New England La Cosa Nostra <br /> Sentenced to 30 Months in Prison for Extortion and Racketeering ConspiracyRead the Press Release
WASHINGTON – Thomas Iafrate, 70, of Johnston, R.I., was sentenced today in U.S. District Court in Providence, R.I., to 30 months in prison for participating in an extortion and racketeering conspiracy involving “protection” payments from several Rhode Island businesses, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney Peter F. Neronha for the District of Rhode Island.
Iafrate also was sentenced by U.S. District Judge William E. Smith to three years of supervised release. Iafrate pleaded guilty on July 21, 2011, to one count of conspiracy to participate in a racketeering enterprise. Iafrate admitted to the court that he was an associate of the New England La Cosa Nostra (NELCN).
According to information presented in court, Iafrate was an associate of the NELCN enterprise while working as a longtime bookkeeper for various Providence adult entertainment businesses, including the Satin Doll, Cadillac Lounge and Northeast Sales. Iafrate participated in the racketeering conspiracy by setting aside and by delivering extortion payments to members of the NELCN, including co-defendant Luigi Manocchio, on behalf of the owners. All three businesses were owned by the same people.
Four alleged members and associates of the NELCN, including an alleged former boss, were charged with crimes involving racketeering, extortion and related crimes in a superseding indictment unsealed in Providence on March 1, 2011. Iafrate was initially charged in an indictment unsealed in January 2011 as part of a coordinated nationwide takedown of organized crime figures. At that time, 91 leaders, members and associates of seven organized crime families of La Cosa Nostra were charged with federal crimes in four judicial districts, including Rhode Island.
The superseding indictment charged longtime NELCN boss Luigi Manocchio, aka “Louie,” “Baby Shacks,” “the Professor” and “the Old Man,” and Iafrate with racketeering conspiracy, extortion conspiracy and extortion. Richard Bonafiglia and Theodore Cardillo also are charged with racketeering conspiracy and extortion conspiracy. A second superseding indictment returned on Sept. 22, 2011, charged Edward Lato, aka “Eddy”; Alfred Scivola, aka “Chippy”; Raymond R. Jenkins, aka “Scarface”; and Albino Folcarelli aka “Albie” related to their alleged participation in the NELCN. An indictment is merely an allegation and defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Manocchio, Bonafiglia, Lato, Scivola, Jenkins and Folcarelli are detained while awaiting trial. Cardillo is free on bond while awaiting trial.
The cases against the eight defendants are being prosecuted by Trial Attorney Sam Nazzaro of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorney William J. Ferland of the District of Rhode Island.
The matter was investigated by the District of Rhode Island’s Organized Crime Task Force, which includes law enforcement agents from the FBI, Rhode Island State Police, the Providence Police Department and the Internal Revenue Service’s Criminal Investigations Division.
Houston-Area Tax Return Preparer Pleads GuiltyRead the Press Release
WASHINGTON – Eddye Lovely of Tomball, Texas, pleaded guilty today to three counts of aiding and assisting in the preparation of false tax returns, the Justice Department and Internal Revenue Service (IRS) announced. Lovely appeared before U.S. District Judge Nancy F. Atlas in Houston.
According to the plea agreement, Lovely owned and operated a Houston return preparation business, called “The Tax Master,” at which he prepared false income tax returns that included certain false Schedule A itemized deductions that the client did not make and fraudulent Schedule C business losses that the clients did not operate.
After Lovely was indicted in April 2011 on 14 counts of aiding and assisting in the preparation of false tax returns, he persisted in the preparation of false tax returns despite a court order requiring him not to prepare any tax returns while on release in the case. According to the plea agreement, after his release, Lovely aided and assisted in the preparation of materially false 2010 tax returns for two additional clients. These tax returns were materially false in that they featured fabricated Schedule C losses for businesses that the taxpayers did not own or operate, as well as false or inflated Schedule A deductions for charitable contributions and/or job search costs.
The tax loss associated with the three counts to which Lovely pleaded guilty is $74,964. Lovely faces a maximum prison sentence of nine years and a fine of up to $750,000. Judge Atlas set sentencing for Feb. 29, 2012.
The case was investigated by IRS-Criminal Investigation and prosecuted by Trial Attorneys Tracy Gostyla and Kathryn Ward of the Justice Department’s Tax Division.
More information about the Tax Division and its enforcement efforts is available at www.usdoj.gov/tax/.
Former US Army National Guard Captain Sentenced to 15 Months in Prison for Receiving Bribes at Bagram Airfield, AfghanistanRead the Press Release
WASHINGTON – A former captain in the U.S. Army National Guard was sentenced today in federal court in Chicago to 15 months in prison for receiving bribes from military contractors in return for the award of Department of Defense (DOD) contracts during his deployment to Bagram Airfield, Afghanistan, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division.
John Mihalczo, 47, of Homosassa, Fla., was sentenced by U.S. District Judge Matthew F. Kennelly of the Northern District of Illinois. In addition to his prison term, Mihalczo was sentenced to one year of supervised release and was ordered to pay $115,000 in restitution to the Department of Defense.
Mihalczo pleaded guilty in June 2009 to a criminal information charging him with three counts of bribery. According to the information and other documents filed in the case, Mihalczo was deployed to Bagram Airfield from March 2003 until March 2004. Mihalczo was, among other things, the motor pool officer, who controlled a large fleet of leased vehicles, as well as a contracting officer’s representative, who oversaw the delivery of various goods at Bagram Airfield, including concrete barriers.
While serving in Afghanistan, Mihalczo accepted approximately $35,000 in cash and money orders from two different military contractors in return for exercising his influence in the award of DOD contracts. Mihalczo also participated in another scheme with another military contractor, in which Mihalczo fraudulently verified the delivery of concrete barriers that were never delivered to Bagram Airfield. As part of this scheme, Mihalczo and the military contractor split $80,000 in overpayments made by DOD. In total, the loss to the United States from these offenses was at least as much as $115,000. Mihalczo is the ninth defendant sentenced in this investigation. Nine additional defendants remain to be sentenced.
This case is being prosecuted by Trial Attorney Mark W. Pletcher of the Criminal Division’s Fraud Section , and investigated by the Army Criminal Investigations Division, the Defense Criminal Investigative Service and the Department of the Air Force, Office of Special Investigations, with assistance from the Special Inspector General for Afghanistan Reconstruction.
Assistant Attorney General Breuer Recognizes Criminal Division Employees and Others at Annual Criminal Division Awards CeremonyRead the Press Release
WASHINGTON – Assistant Attorney General for the Criminal Division Lanny A. Breuer today recognized current and former Criminal Division employees and others for their outstanding achievements in public service at the Annual Criminal Division Awards Ceremony.
“The dedicated public servants we are recognizing today have each made significant achievements in furthering the mission of the Justice Department,” said Assistant Attorney General Breuer. “They have worked tirelessly to help protect our communities and keep our nation safe. We are grateful for their extraordinary contributions to the department and to the country.”
Assistant Attorney General Breuer presented the Henry E. Petersen Memorial Award to former chief of the Computer Crime and Intellectual Property Section (CCIPS), Michael M. DuBose. The Petersen Award is the highest award given by the Criminal Division. It recognizes exceptional service by an individual who has made a lasting contribution to the division. The award honors the memory of Henry Petersen – Assistant Attorney General of the Criminal Division during the Watergate era and a former chief of the Organized Crime and Racketeering Section in the 1960s.
Mr. DuBose served for more than 20 years in the federal government. He has held numerous positions throughout the Justice Department and the Criminal Division. Most recently, he served as a deputy chief and chief of CCIPS. His leadership in intellectual property (IP) led to an 800 percent increase in IP prosecutions over a four-year period. Mr. DuBose oversaw numerous important prosecutions, including the prosecution of Albert Gonzalez, the leader of the largest credit card data breach in history. Mr. DuBose improved the department’s efforts on computer forensics and collection of electronic evidence, helping to develop CCIPS’s Cybercrime Laboratory into an internationally respected and renowned resource for prosecutors. Mr. DuBose retired from the Department of Justice in the fall of 2011.
Assistant Attorney General Breuer presented the John C. Keeney Award for Exceptional Integrity and Professionalism to Paul O’Brien, director of the Criminal Division’s Office of Enforcement Operations. John C. Keeney served in the Department of Justice for nearly 60 years, under 12 U.S. presidents and 23 attorneys general, retiring in September 2010 as Deputy Assistant Attorney General for the Criminal Division. The John C. Keeney Award recognizes an employee who has demonstrated outstanding professionalism and integrity over a sustained period of time or an employee who has displayed extraordinary strength of character in a unique situation, as Mr. Keeney displayed during his years of service to the federal government.
Mr. O’Brien joined the department as an Assistant U.S. Attorney for the Western District of Tennessee in 1995, following his service in the U.S. Marine Corps, and has since served the department in several capacities. He has supervised and prosecuted complex narcotics and money laundering cases, as well as fraud, corruption, child pornography, firearms, counterfeiting and immigration offenses. In February 2010, Mr. O’Brien was appointed to the position of director of the Office of Enforcement Operations in the Criminal Division.
The Mark M. Richard Memorial Award was presented to Kenneth Harris, associate director of the Criminal Division’s Office of International Affairs. The award was created in memory of Mark M. Richard, who served the Criminal Division from 1967 to 2007, and is given to a Criminal Division employee in recognition of extraordinary vision and leadership in fighting international crime. Mr. Richard saw the crucial importance of making law enforcement a central part of our foreign policy.
Mr. Harris received this award for his work in improving international cooperation in the fight against crime and terrorism. Over the last 15 years, he has played a critical role in negotiating many of the most significant law enforcement treaties and agreements to which the United States is a party.
Assistant Attorney General Breuer also presented the Assistant Attorney General’s Awards to multiple recipients in recognition of individual and group performance in fulfilling the Criminal Division’s mission, priorities and management goals.
The Assistant Attorney General’s Award for Exceptional Service was presented to Hank Walther, Benton Curtis, Sam Sheldon and Benjamin Singerof the Criminal Division’s Fraud Section for their extraordinary efforts in leading the investigation and prosecution of Medicare fraud in Medicare Fraud Strike Force cities across the country. This team oversaw the two largest health care fraud takedowns in the United States and the prosecution of more than 300 defendants this fiscal year. They were responsible for expanding the strike force from seven to nine cities this year and supervising a team of approximately 20 prosecutors.
The second Exceptional Service award was presented to the group responsible for the successful investigation and prosecution of Lee Bentley Farkas: Patrick Stokes, Robert Zink, Charles Reed, Brigham Cannon and Jennifer Gindin of Criminal Division’s Fraud Section; Jeannette Gunderson of the Criminal Division’s Asset Forfeiture and Money Laundering Section; Charles Connolly, Paul Nathanson and Lisa Porter of the U.S. Attorney’s Office in the Eastern District of Virginia; Aileen Hudgins, Ed Slagle and Chasity Gatsonof the Office of the Special Inspector General for the Troubled Asset Relief Program; Peter Emerzian, Paul Conlon and Kari Meyerof the Office of the Special Inspector General for the Federal Housing Finance Agency; John Crawford and Lance Endyof the Office of the Inspector General for the Federal Deposit Insurance Corporation; David Mosakowski, Timothy Mowery and Keith Williams of the Office of the Inspector General of the Department of Housing and Urban Development; and Scott Turner, John Gardner and Katherine Alfaro of the FBI.
The Farkas case is one of the most significant criminal prosecutions brought in the wake of the financial crisis. It involved the sale of billions of dollars in fake mortgage loan assets, causing approximately $3.5 billion in aggregate losses to a variety of institutional and individual victims. After a 10-day jury trial, Farkas was convicted of 14 counts of conspiracy, wire fraud, bank fraud and securities fraud. Farkas was sentenced to 30 years in prison, ordered to forfeit more than $35 million and ordered to pay restitution to victims totaling approximately $3.5 billion. Six co-conspirators were also convicted and sentenced to prison for their roles in the scheme.
The final Exceptional Service award was presented to Mark Anthony Maldonadoand Marlon Cobar of the Criminal Division’s Narcotic and Dangerous Drug Section for their extraordinary work in establishing a groundbreaking program and associated initiatives to address the security threat posed by the major Mexican drug cartels. These two attorneys worked with the Mexican government to establish fully vetted and trained investigative teams of Mexican law enforcement agents and prosecutors to work closely with Justice Department prosecutors and U.S. federal law enforcement. These accomplishments are part of the Criminal Division’s efforts to increase cooperation with our Mexican partners and enhance their law enforcement capacity.
The Assistant Attorney General’s Award for Distinguished Service was presented to Kirby Heller and Deborah Watsonof the Criminal Division’s Appellate Section for their exceptional work in the successful appeal of sanctions imposed upon federal prosecutors in the case of Dr. Ali Shaygan.
The Award for Distinguished Service was also presented to Andrea Sharrin, Christopher Merriam, Jason Gull and John Zachariaof the Criminal Division’s CCIPS for their work on developing critical law enforcement tools for combating intellectual property crime. Through a combined program of legislative drafting and education, and highly skilled inter- and intra-agency efforts, this team helped ensure that law enforcement’s ability to adequately address intellectual property crime is both appropriately preserved and enhanced.
Another Award for Distinguished Service was presented to t he core team of U.S.-based prosecutors, special agents, computer forensic specialists and intelligence analysts responsible for the transnational enforcement operation targeting an online child pornography bulletin board entitled “Lost Boy.” The recipients include: James Fottrell, Johnathan Bridbord , Richard Kaplan , Andrew McCormack and James Silver of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS); Adrienne Mitchell, Catherine Connell , David Brassanini , Steven Garrard, Mark Zimmerman, Michael Osborn and Monique Bueno of the FBI; Brian Bone of the U.S. Postal Inspection Service; and Joey Blanch and Yvonne Garcia of the U.S. Attorney’s Office for the Central District of California.
The members of the Lost Boy bulletin board and the individuals with whom they associated are responsible for the sexual exploitation of more than 200 children around the world. Prior to the Lost Boy investigation, most of these individuals had never been arrested. As a result of the investigation , child sex offenders throughout the world are in custody and no longer pose a danger to children. Many of the child victims have been identified and rescued, and the enterprise that facilitated their abuse and victimization has been dismantled.
The Distinguished Service Award also was presented to the team responsible for the prosecution of three Pakistani citizens who pleaded guilty to conspiring to provide material support to a designated foreign terrorist organization. Recipients include: William Ho-Gonzalez and Stephen Curran of the Criminal Division’s Human Rights and Special Prosecutions Section; Lolita Lukose of the National Security Division; John Han and Anthony Asuncion of the U.S. Attorney’s Office for the District of Columbia; Heather Hodges, the former U.S. Ambassador to Ecuador; Gabriel Garcia, Cesar Cabrera, William Hunter and Francisco Estupinan of U.S. Immigration and Customs Enforcement (ICE) in Quito, Ecuador; Anthony Ruffule, Jeffrey Klinko and Sir Streeter of ICE Atlanta; Mohammad Yousaf of ICE Islamabad; Daniel Johns, Joel Dugan, Courtney Scharn, Shedrick Curry and Laura Garcia of the FBI; Shawn Bray, Kevin Smith, Emily Genung and Kathleen O’Connell of INTERPOL; Magdalena Boynton of the Criminal Division’s Office of International Affairs; and Jeannette Arocho of ICE U.S. Southern Command. The investigation led to the arrest of the three Pakistani citizens after they agreed to and took steps to help smuggle a person they believed to be a Pakistani Taliban member into the United States.
Another Award for Distinguished Service was presented to Michelle Swaney, Jennifer Hodge and Michelle Hill of the Criminal Division’s Office of Enforcement Operations for their exceptional efforts in modernizing and improving the operations of the Electronic Surveillance Unit. This unit reviews requests from U.S. attorneys’ offices for approval to seek court orders to conduct wiretaps in major federal investigations. This management team decreased Title III review turnaround time, increased the quality and consistency of the Title III review process and improved training and communication with the field.
The Award for Distinguished Service was also presented to Charles Bennett Jr., of the Criminal Division’s International Criminal Investigative Training Assistance Program (ICITAP), for advancing and sustaining an effective working partnership with host nation law enforcement officials, and expanding ICITAP’s scope of development activities in Pakistan. Mr. Bennett worked closely with Pakistan officials to help build their law enforcement capacity to combat crime and terrorism.
The final Distinguished Service Award was presented to Cody Skipper of the Criminal Division’s Organized Crime and Gang Section and Van Vincent of the U.S. Attorney’s Office in the Middle District of Tennessee for their exceptional work in an 11-defendant racketeering and firearms case involving the national street gang known as the Traveling Vice Lords. Mr. Skipper and Mr. Vincent led a team of local and federal law enforcement officers who worked seamlessly together and obtained convictions for all of the racketeering counts, including those involving murders and attempted murders, triggering life sentences for three defendants.
Assistant Attorney General Breuer presented the Excellence in Management Award to Kevin Carwile, chief of the Criminal Division’s Capital Case Unit (CCU), and Todd Simpson, the director of the Information Technology (IT) staff in the Criminal Division’s Office of Administration. The award recognizes individuals in the division who exhibit innovative thinking, business acumen and proven leadership in administration and management.
Under Mr. Carwile’s leadership, CCU trial attorneys now prosecute capital cases in courts throughout the nation against the most violent criminals involved in truly heinous crimes. Today, CCU trial attorneys are involved in some capacity in more than 80 percent of the cases in which the attorney general has directed the department to seek the death penalty. These cases are among the most challenging the department litigates given the crimes at issue and the complexities of the capital process.
Mr. Simpson is recognized for the remarkable progress and unprecedented changes he has brought to the Criminal Division. He has implemented many efficiencies in the division’s IT system, including remote connectivity, web hosting, efficient use of the network operations center, Blackberry service improvements and overall system stability. His contributions include saving the division more than $5 million.
Assistant Attorney General Breuer presented the Award for Outstanding Contributions by a New Employee to Jennifer Saulino in the Criminal Division’s Fraud Section. The newly established award recognizes the outstanding contributions of a new employee with fewer than five years of service to the Criminal Division.
Ms. Saulino joined the division’s Fraud Section in January 2010. Her efforts greatly contributed to the success of the Medicare Fraud Strike Force. She investigated and prosecuted more than 20 defendants in connection with the American Therapeutic Corporation case, a $200 million community mental health care case; tried three criminal health care fraud cases; and obtained three of the largest health care fraud prison sentences in United States’ history.
The Lois B. Bundy Exceptional Service Award for Administrative Support was presented to Danny Foster of the Criminal Division’s Public Integrity Section. This award recognizes a present or former non-attorney employee whose administrative support has made a lasting contribution to the Criminal Division by best exemplifying the commitment, dedication, interpersonal skills, sensitivity, keen judgment and enthusiasm that Ms. Bundy displayed during her distinguished 34 years of service in the Criminal Division.
Mr. Foster has been a critical member of the Public Integrity Section team for more than 12 years. He is relied upon for everything related to administration in the section, and he is integral to the success of the Public Integrity Section’s mission. Mr. Foster provides invaluable support to the Section, working nights, weekends, holidays and anytime that the attorneys need help.
ICE Homeland Security Investigations (HSI) AttachéGabriel Garcia was also recognized with a Certification of Appreciation for his invaluable contributions to the Extraterritorial Criminal Travel Strike Force program, a joint partnership between the Criminal Division and ICE HSI. Mr. Garcia was one of the primary architects in the establishment and development of the program and has overseen significant disruptions and dismantlement of human smuggling networks.
Friday 9 December 2011
US Files Lawsuit in Miami to Block Promotion of Tax Fraud SchemeRead the Press Release
WASHINGTON - The United States has sued Sharon Angulo and Claudia Zuloaga to bar them from promoting an alleged tax fraud scheme and from preparing federal tax returns for others, the Justice Department announced today.
The civil injunction suit, filed in the Southern District of Florida, alleges that Angulo and Zuloaga, both of Miami, help customers use Internal Revenue Service (IRS) Forms 1099-OID to report fictitious income tax withholding. According to the government complaint, the customers file federal tax returns claiming tax refunds based on the fake withholding. The complaint states that the defendants have prepared or assisted in the preparation of at least 19 tax returns reporting false withholding and claiming fraudulent tax refunds totaling more than $3 million.
The government’s complaint asks the court to require Angulo and Zuloaga to pay the U.S. Treasury the funds they received from customers who paid them a percentage of the tax refunds received through the scheme. The complaint also asks the court to order the defendants to provide the government with a list of all persons who have purchased any products, services or advice from Angulo and Zuloaga in the past three years as part of the scheme.
Claiming bogus tax refunds based on false Forms 1099-OID is one of the IRS’s Dirty Dozen Tax Scams for 2011 . In the past decade, the Justice Department’s Tax Division has obtained injunctions against hundreds of tax fraud promoters and unscrupulous tax preparers. Information about these cases is available on the Justice Department website .
New Orleans Police Officer Convicted of Obstruction of Justice and PerjuryRead the Press Release
WASHINGTON – Ronald Mitchell, 33, an officer with the New Orleans Police Department (NOPD), was convicted today of obstructing justice and committing perjury during the course of a federal civil suit related to the shooting death of civilian Danny Brumfield in September 2005, announced the Department of Justice.
According to evidence presented at trial, Mitchell gave false deposition testimony during the course of a federal civil lawsuit filed by Danny Brumfield’s wife against the city of New Orleans by intentionally providing false and misleading information regarding the events that took place regarding the fatal shooting. Evidence proved that Mitchell shot and killed Danny Brumfield on Sept. 3, 2005, on Convention Center Boulevard in New Orleans. During a deposition in November 2007, Mitchell gave sworn testimony claiming that immediately after the shooting, he exited the patrol car and checked Brumfield’s vital signs.
However, the jury found that Mitchell’s deposition testimony was false and was given in order to attempt to influence the outcome of the civil suit by misleading the plaintiff’s attorneys. Mitchell knew that he never exited the car to check Brumfield’s vital signs or render aid to the victim.
The jury convicted Mitchell of one count of obstructing justice and one count of committing perjury. Another defendant, Ray Jones, 34, was acquitted of one count of obstructing justice and one count of committing perjury.
“Rather than upholding his oath as a public official, this officer lied and obstructed justice to cover-up the true facts regarding the tragic death of Mr. Brumfield,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The Justice Department is committed to holding officers who engage in criminal conduct accountable, and is continuing in the ongoing process of restoring the community’s confidence in the New Orleans Police Department.”
“Today’s verdict is further evidence of our commitment, in partnership with the Department of Justice Civil Rights Division, the FBI and the New Orleans Police Department to fairly and aggressively challenge corruption within NOPD’s ranks – for our citizens and our community,” said Jim Letten, U.S. Attorney for the Eastern District of Louisiana . We will never tolerate either abuses or deceit by anyone charged with the protection of the public.”
Mitchell faces a maximum penalty of up to 20 years in prison for obstructing justice and up to five years for committing perjury. Sentencing is scheduled for March 7, 2012.
This case was investigated by the New Orleans Field Office of the FBI, and is being prosecuted by Assistant U.S. Attorney Michael Magner for the Eastern District of Louisiana and Trial Attorney Christopher Lomax of the Justice Department’s Civil Rights Division.
Iowa Insurance Agent to Pay US to Resolve False Claims Allegations on the Federal Crop Insurance ProgramRead the Press Release
WASHINGTON – Russell Hawley and Hawley Insurance Inc. of Vail, Iowa, have agreed to pay the United States $834,897.50 to settle allegations that they caused false claims to be submitted to the Federal Crop Insurance Corporation, the Justice Department announced today.
The settlement resolves a lawsuit filed under the False Claims Act against Russell Hawley, the principal owner of Hawley Insurance, in federal district court in Sioux City, Iowa. The lawsuit alleged that Hawley submitted forged crop insurance applications and other false documents to a private insurance company designated by the United States to sell federally-reinsured crop insurance policies. The government was required to pay out on these policies when the insured crops failed.
“We expect insurance agents who participate in the federal crop insurance program to submit honest and accurate information,” said Tony West, Assistant Attorney General for the Department’s Civil Division. “The department is committed to protecting the integrity of the federal crop insurance program by aggressively pursuing false statements and claims at every level.”
“This settlement shows the continuing commitment by the U.S. Attorney’s Office for the Northern District of Iowa to investigate and recover any improper payments under the Federal crop insurance program and to partner with our colleagues in the Civil Division when necessary to remedy crop insurance fraud,” said Stephanie Rose, U.S. Attorney for the Northern District of Iowa.
Michael Hand, Deputy Administrator for the U.S. Department of Agriculture’s Risk Management Agency, Compliance Division, stated, “this case confirms that insurance agents who participate in the federal crop insurance program are responsible for the policy documents that they submit on behalf of farmers.”
Assistant Attorney General West noted that the settlement with Hawley and Hawley Insurance was the result of a coordinated effort among the Justice Department’s Civil Division, the U.S. Attorney’s Office for the Northern District of Iowa, the U.S. Department of Agriculture’s Office of Inspector General and the Risk Management Agency.
Identity Thief Sentenced in Virginia to 12 Years in Prison for Managing East Coast Credit Card Fraud RingRead the Press Release
WASHINGTON – A Brooklyn, N.Y., man was sentenced today in U.S. District Court in Alexandria, Va., to 12 years in prison for operating a credit card fraud ring that used counterfeit credit cards encoded with stolen account information up and down the East Coast of the United States, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division and U.S. Attorney Neil H. MacBride for the Eastern District of Virginia.
Jonathan Oliveras, 26, was sentenced by U.S. District Judge Gerald Bruce Lee. In addition to his prison term, Oliveras was ordered to forfeit $770,646 and to serve three years of supervised release. Oliveras pleaded guilty on Aug. 10, 2011, to one count of wire fraud and one count of aggravated identity theft.
In his plea, Oliveras admitted that he managed a ring of co-conspirators who used stolen credit card account information in New York, New Jersey and the Washington, D.C., area. According to court documents, Oliveras sent payments to individuals he believed to be in Russia for the stolen account information. Oliveras then distributed the stolen account information, which was re-encoded onto plastic cards and used to purchase gift cards. The gift cards were used to buy merchandise that ultimately was returned for cash.
Federal and local law enforcement executing a search warrant in July 2010 at Oliveras’ apartment found, among other things, credit card encoding equipment and more than 2,300 stolen credit card numbers. According to court documents, credit card companies have identified thousands of fraudulent transactions using the account numbers found in Oliveras’ possession, totaling more than $750,000.
The case was prosecuted by Michael Stawasz, a Senior Counsel in the Criminal Division’s Computer Crime & Intellectual Property Section and Special Assistant U.S. Attorney in the Eastern District of Virginia, and Assistant U.S. Attorney Ryan Dickey of the U.S. Attorney’s Office for the Eastern District of Virginia. The case was investigated jointly by the Washington Field Offices of both the U.S. Secret Service and the FBI, with assistance from the New York and New Jersey Field Offices of both agencies.
Former New York Con Ed Manager Sentenced to Serve 70 Months in Prison for Fraud, Bribery and Tax CrimesRead the Press Release
WASHINGTON — A former Consolidated Edison of New York (Con Ed) manager was sentenced today to serve 70 months in prison for participating in schemes to accept approximately $807,000 in bribes from two Con Ed industrial pipe supply vendors, the Department of Justice announced.
James M. Woodason of Edison, N.J., was also sentenced in U.S. District Court in Manhattan by Judge Denise L. Cote to pay a $12,500 criminal fine and to pay $342,000, as well as from 10 to 20 percent of Woodason’s total compensation and benefits earned through his employment with Con Ed during the charged periods, for a total of approximately $528,000 in restitution to be paid by Woodason and his co-conspirators to Con Ed on a joint and several basis. On Nov. 19, 2010, Woodason, a former department manager of purchasing at Con Ed, pleaded guilty to a four-count felony charge alleging that he accepted bribe payments from two industrial pipe supply vendors, in exchange for steering contracts to each of those vendors.
According to court documents, Woodason was responsible for purchasing and awarding contracts for millions of dollars in goods and services and managing inventory on behalf of Con Ed. Woodason accepted approximately $297,000 from one vendor in a bribery scheme that took place from approximately November 2003 through approximately August 2008. Woodason accepted approximately $45,000 in bribe payments from another vendor in a bribery scheme that took place from approximately January 2009 until approximately August 2010. The department said that Woodason had also agreed to take an additional $465,000 in bribes from that vendor.
According to court documents, in addition to two separate conspiracies, Woodason also pleaded guilty to one count of bribery for receiving a $20,000 cash bribe payment related to the 2009-2010 conspiracy and to one count of income tax evasion for failing to report bribes he received as income in the tax years 2004 through 2008.
On Aug. 5, 2010, Woodason was arrested in connection with this investigation by special agents of the FBI and the Internal Revenue Service (IRS)-Criminal Investigation.
Following the terms of his plea agreement, Woodason also paid $155,109 owed to the IRS as a result of the schemes and did not contest forfeiture of a $20,000 cash bribe payment found in the search of his home on the day of his arrest.
Con Ed is a regulated utility headquartered in Manhattan. It provides electric service to approximately 3.2 million customers and gas service to approximately 1.1 million customers in New York City and Westchester County, N.Y. Con Ed received more than $10,000 in federal funding each year between 2003 through 2010. Con Ed cooperated with the department’s investigation.
Including Woodason, a total of four individuals and two companies have been charged as part of this investigation. The remaining five defendants are awaiting sentencing.
These charges arose from an ongoing federal antitrust investigation of bid rigging, bribery, fraud and tax-related offenses in the power generation industry. The investigation is being conducted by the Antitrust Division’s New York Field Office, with the assistance of the FBI and the IRS-Criminal Investigation. Anyone with information concerning bid rigging, bribery, tax offenses or fraud in the power generation industry should contact the FBI’s New York Division at 212-384-3720 or the Antitrust Division’s New York Field Office at 212-335-8000, or visit www.justice.gov/atr/contact/newcase.htm.
Former Army Corps of Engineers Employee Sentenced to 20 Months in Prison for Accepting Bribes from Iraqi ContractorsRead the Press Release
WASHINGTON - A former employee of the U.S. Army Corps of Engineers stationed in Baghdad, Iraq, was sentenced today in the Eastern District of Virginia to 20 months in prison for conspiring to receive bribes from Iraqi contractors involved in the U.S.-funded reconstruction efforts, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney Neil H. MacBride for the Eastern District of Virginia and Assistant Director in Charge James W. McJunkin of the FBI’s Washington Field Office.
Thomas Aram Manok, 51, of Chantilly, Va., was sentenced by U.S. District Judge Anthony J. Trenga. In addition to his prison term, Manok was sentenced to three years of supervised release. Judge Trenga ordered a forfeiture hearing to be held on Jan. 13, 2012. Manok pleaded guilty on Sept. 19, 2011.
Manok admitted to using his official position to conspire with Iraqi contractors to accept cash bribes in exchange for recommending that the U.S. Army Corps of Engineers approve contracts and other requests for payment submitted by the contractors to the U.S. government. According to court documents, in March and April 2010, Manok agreed to receive a $10,000 payment from one such contractor who had been involved in constructing a kindergarten and girls’ school in the Abu Ghraib neighborhood of Baghdad and had sought Manok’s influence in having requests for payment approved by the U.S. Army Corps of Engineers. According to court documents, Manok was to receive an additional bribe payment from the contractor once the contractor’s claim had been approved. Manok also admitted that he intended to conceal the payments from authorities by transferring them, via associates, from Iraq to Armenia.
This case was investigated by the FBI’s Washington Field Office, the Department of Defense Office of the Inspector General, the Army Criminal Investigation Command and the Defense Criminal Investigative Service, as participants in the International Contract Corruption Task Force. The case is being prosecuted by Assistant U.S. Attorney Paul J. Nathanson of the Eastern District of Virginia and Trial Attorney Mary Ann McCarthy of the Criminal Division’s Fraud Section.
This prosecution is part of efforts underway by President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. For more information about the task force visit: www.stopfraud.gov.
Brooklyn Accountant Pleads Guilty to Tax CrimesRead the Press Release
WASHINGTON – Silford Warren, of Queens, N.Y., pleaded guilty to failing to pay over employment taxes in connection with his ownership of Silford Warren, CPA PC, the Justice Department and Internal Revenue Service (IRS) announced today.
U.S. District Court Judge William F. Kuntz presided over the plea hearing in the U.S. District Court in Brooklyn, N.Y. The plea agreement and filed criminal information indicated that Warren under-reported his employees’ salaries to the IRS from 2006 through 2008. Moreover, Warren did not collect, truthfully account for, and pay over employment taxes of approximately $108,000.
According to the plea agreement, Warren is required to pay restitution to the IRS in the amount of $184,263. The restitution amount includes taxes owed by his failing to pay over the employment taxes due to the IRS and the amount of tax resulting from Warren’s filing of false corporate income tax returns for 2005 through 2008.
Warren faces a potential maximum sentence of five years in prison and a fine of up to $250,000. Sentencing is tentatively scheduled for May 4, 2012.
The announcement of Warren’s plea was made by Loretta E. Lynch, U.S. Attorney for the Eastern District of New York; John A. DiCicco, Principal Deputy Assistant Attorney General for the Justice Department’s Tax Division; and Charles R. Pine, Special Agent-in-Charge of the New York Field Office of the IRS-Criminal Investigation (IRS-CI).
U.S. Attorney Lynch and Principal Deputy Assistant Attorney General DiCicco thanked the IRS-CI agents who investigated the case and Tax Division Trial Attorneys Tino M. Lisella and Sean R. Delaney who are prosecuting the case.
Thursday 8 December 2011
Wachovia Bank N.A. Admits to Anticompetitive Conduct by Former Employees in the Municipal Bond Investments Market and Agrees to Pay $148 Million to Federal and State AgenciesRead the Press Release
WASHINGTON – Wachovia Bank N.A., which is now known as Wells Fargo Bank N.A., has entered into an agreement with the Department of Justice to resolve the company’s role in anticompetitive activity in the municipal bond investments market and has agreed to pay a total of $148 million in restitution, penalties and disgorgement to federal and state agencies, the Department of Justice announced today.
As part of its agreement with the department, Wachovia admits, acknowledges and accepts responsibility for illegal, anticompetitive conduct by its former employees. According to the non-prosecution agreement, from 1998 through 2004, certain former Wachovia employees at its municipal derivatives desk entered into unlawful agreements to manipulate the bidding process and rig bids on municipal investment and related contracts. These contracts were used to invest the proceeds of, or manage the risks associated with, bond issuances by municipalities and other public entities.
“The illegal conduct at Wachovia Bank corrupted the bidding practices for investment contracts and deprived municipalities of the competitive process to which they were entitled,” said Sharis A. Pozen, Acting Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. “Today’s resolution achieves restitution for the victims harmed by Wachovia’s anticompetitive conduct and ensures that Wachovia disgorges its ill-gotten gains and pays penalties for its illegal conduct. We are committed to ensuring competition in the financial markets and our investigation into anticompetitive conduct in the municipal bond derivatives industry continues.”
Under the terms of the agreement, Wachovia agrees to pay restitution to victims of the anticompetitive conduct and to cooperate fully with the Justice Department’s Antitrust Division in its ongoing investigation into anticompetitive conduct in the municipal bond derivatives industry. To date, the ongoing investigation has resulted in criminal charges against 18 former executives of various financial services companies and one corporation. Nine of the 18 executives charged have pleaded guilty.
The Securities and Exchange Commission (SEC), the Internal Revenue Service (IRS), the Office of the Comptroller of the Currency (OCC) and 26 state attorneys general also entered into agreements with Wachovia requiring the payment of penalties, disgorgement of profits from the illegal conduct and payment of restitution to the victims harmed by the manipulation and bid rigging by Wachovia employees, as well as other remedial measures.
As a result of Wachovia’s admission of conduct; its cooperation with the Department of Justice and other enforcement and regulatory agencies; its monetary and non-monetary commitments to the SEC, IRS, OCC and state attorneys general; and its remedial efforts to address the anticompetitive conduct, the department agreed not to prosecute Wachovia for the manipulation and bid rigging of municipal investment and related contracts, provided that Wachovia satisfies its ongoing obligations under the agreement.
Earlier this year, JPMorgan Chase & Co. and UBS AG also entered into agreements with the Department of Justice and other federal and state agencies to resolve anticompetitive conduct in the municipal bond derivatives market. In July 2011, JPMorgan agreed to pay a total of $228 million in restitution, penalties and disgorgement to federal and state agencies for its role in the conduct. In May 2011, UBS AG agreed to pay a total of $160 million in restitution, penalties and disgorgement to federal and state agencies for its participation in the anticompetitive conduct.
The department’s ongoing investigation into the municipal bonds industry is being conducted by the Antitrust Division, the FBI and the IRS-Criminal Investigation. The department is coordinating its investigation with the SEC, the OCC and the Federal Reserve Bank of New York. The department thanks the SEC, IRS, OCC and state attorneys general for their cooperation and assistance in this matter.
The Antitrust Division, SEC, IRS, FBI, state attorneys general and OCC are members of the Financial Fraud Enforcement Task Force. President Obama established the interagency task force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. For more information about the task force, visit www.stopfraud.gov.
Three Charged with Fraud in Florida Foreclosure Rescue SchemeRead the Press Release
WASHINGTON – Lisa Wright, 46, and Cathy Saffer, 52, of Pompano Beach, Fla., were charged today with a conspiracy to defraud homeowners and banks in a foreclosure rescue scheme, announced the Department of Justice. Also charged was Barrington Coombs, 57, a certified public accountant of Weston, Fla., who participated in the scheme. A federal grand jury in the Southern District of Florida returned an indictment charging Wright and Saffer with one count of conspiracy, three counts of mail fraud and three counts of wire fraud. The grand jury charged Coombs with one count of conspiracy and one count of wire fraud.
The indictment states that Wright and Saffer operated an alleged business called Foreclosure Solution Specialists (FSS) from 2006 to 2009. Through FSS, Wright and Saffer allegedly targeted homeowners facing foreclosure, advertising that FSS could assist those homeowners in remaining in their homes. According to the indictment, when contacted by distressed homeowners seeking assistance, Wright and Saffer misrepresented to those homeowners that their homes would be sold to investors. Wright and Saffer also allegedly claimed that customers could remain in their homes after the sales and promised them an opportunity to repurchase the homes at a later date. According to the indictment, rather than selling the homes to legitimate investors, Wright and Saffer designed sham sales to straw purchasers whom they paid to participate in the scheme.
The indictment further alleges that Wright and Saffer made numerous misrepresentations on loan applications regarding the purchasers’ net worths, incomes and employment histories in order to induce lenders to fund loans. The indictment alleges that, as part of the scheme, Wright and Saffer paid Coombs to sign a letter which falsely vouched for the fraudulent information on various loan applications.
According to the indictment, these sham sales drew equity out of the homes, which Wright and Saffer pocketed for their own purposes. After doing so, Wright and Saffer allowed the loans to go into foreclosure. Homeowners ultimately lost all of the equity in their homes, and most of the victims were forced to move out of their homes.
“Protecting Americans from financial fraud is one of our top priorities,” said Tony West, Assistant Attorney General for the Civil Division of the Department of Justice. “Foreclosure rescue scams, like the one alleged here, are especially insidious because they seek to take advantage of those most at risk of losing everything. These charges demonstrate that we will aggressively prosecute individuals who we believe prey on homeowners struggling in these tough financial times.” This investigation is part of the Department of Justice’s continued nationwide focus on mortgage fraud.
Charges contained in the indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
The case was investigated by the FBI. The case is being prosecuted by Christopher E. Parisi, a Trial Attorney at the Civil Division’s Consumer Protection Branch.
Sixth San Francisco MS-13 Member Sentenced to Life in PrisonRead the Press Release
WASHINGTON – The sixth San Francisco-area member of La Mara Salvatrucha (MS-13) convicted in August 2011 on racketeering related charges was sentenced today to life in prison, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney Melinda Haag of the Northern District of California and Clark Settles, Special Agent in Charge for U.S. Immigration and Custom Enforcement’s (ICE) Homeland Security Investigations (HSI) in San Francisco.
Guillermo Herrera, aka “Sparky,” 21, was sentenced by U.S. District Judge William Alsup in the Northern District of California. Herrera and his five codefendants were convicted by a jury on Aug. 30, 2011, after a five-month trial. Codefendants Marvin Carcamo, aka “Cyco,” 31; Angel Noel Guevara, aka “Peloncito,” 31; Moris Flores, aka “Slow Pain,” 22; Erick Lopez, aka “Spooky,” 23; and Jonathon Cruz-Ramirez, aka “Soldado,” 22, were all sentenced to life in prison on Nov. 30, 2011.
“Mr. Herrera and his fellow MS-13 gang members spread fear and violence throughout the Bay Area,” said Assistant Attorney General Breuer. “They committed horrific acts of assault and murder on behalf of their criminal enterprise. Today’s sentence marks another important step forward in our steadfast efforts to protect Americans from violent crime.”
“Hopefully these sentences help to bring closure to the victims and family members who suffered needlessly from the senseless acts of violence that these individuals committed,” U.S. Attorney Haag said. “These individuals terrorized a community. For their crimes, they will spend the rest of their lives behind bars.”
“While nothing can make amends for the suffering this defendant and his fellow gang members caused, the court’s actions ensure these cold-blooded criminals will never again be able to hold our communities hostage to fear,” said Special Agent Settles. “And though this longstanding case is drawing to a close, HSI’s efforts are ongoing as we continue to work closely with local law enforcement to identify, attack and dismantle transnational street gangs that are attempting to stake out turf in the Bay Area.”
MS-13 is a violent, transnational gang organized in local chapters called “cliques.” Herrera was a member of the 20th Street clique of MS-13.
According to evidence presented at trial, the 20th Street clique has operated in the Mission District of San Francisco since the 1990s, and grew more violent and aggressive as membership increased and the gang expanded. The 20th Street clique primarily warred with rival gang members, but also engaged in extortion and narcotics distribution. The evidence at trial showed that Herrera joined the 20th Street clique of MS-13 in 2007 and participated in the extortion or “taxing” of a group of individuals who sold fraudulent documents on MS-13 turf, centered at 20th and Mission Streets. MS-13 members demanded a portion of the profits these individuals earned and used violence and threats of violence to obtain their percentage.
According to evidence presented at trial, on July 11, 2008, Herrera shot and killed Armando Estrada, one of many individuals MS-13 extorted. Cruz-Ramirez drove Herrera to 20th and Mission Streets, where Herrera spotted Estrada, chased him and shot him in the back of the head at close range with a shotgun. The motive for the murder was for MS-13 to maintain control over the group it extorted, a group that had resisted 20th Street members the previous day. Both Cruz-Ramirez and Herrera were convicted of the racketeering murder of Armando Estrada.
On Nov. 29, 2011, in a separate trial, a jury convicted 20th Street member Danilo Velasquez of multiple racketeering offenses. Velasquez’s codefendant, Luis Herrera, aka “Killer,” and brother of Guillermo Herrera, pleaded guilty mid-trial to seven racketeering related counts, including use of a firearm causing the murder of Moises Frias. Luis Herrera is scheduled to be sentenced by Judge Alsup on Jan. 24, 2012. Velasquez is scheduled to be sentenced on Feb. 14, 2012, and faces a maximum sentence of life in prison.
These cases were prosecuted by Trial Attorney Theryn Gibbons of the Organized Crime and Gang Section in the Justice Department’s Criminal Division and Assistant U.S. Attorneys W.S. Wilson Leung, Wil Frentzen, Andrew Scoble and David Hall of the Strike Force and Violent Crimes Section of the Northern District of California. The cases were investigated by ICE HSI, with the assistance of the San Francisco Police Department and the Daly City Police Department.
San Diego Investment Manager Indicted in Utah for Alleged Role in $25 Million Fraud SchemeRead the Press Release
WASHINGTON – A San Diego, Calif., investment manager was arrested today on charges filed in district court in Salt Lake City for his alleged role in a $25 million investment fraud scheme, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney David B. Barlow for the District of Utah, Special Agent in Charge David Johnson of the FBI’s Salt Lake City Field Office and Special Agent in Charge Paul A. Camacho of the Internal Revenue Service-Criminal Investigation (IRS-CI) Las Vegas Field Office.
An indictment unsealed today in the District of Utah charges Robert L. Holloway, 54, with four counts of wire fraud and one count of making and subscribing a false income tax return. He was arrested this morning in San Diego, Calif., and made his initial appearance in the Southern District of California.
According to the indictment, Holloway operated an investment entity named US Ventures LC, which was founded in 1999. Holloway served as the chief executive officer and managing partner of US Ventures. The indictment alleges that from October 2005 until at least April 2007, Holloway recruited investors for US Ventures by making false representations about the investment entity. According to the indictment, Holloway falsely claimed that US Ventures used proprietary trading software that was consistently profitable; that US Ventures had more than $32 million under management and generated returns of 0.8 percent per trading day; and that US Ventures would retain a 30 percent share of investors’ profits as a management fee. The indictment alleges that US Ventures raised more than $25 million from investors for its trading activities.
During the course of US Ventures’ existence, Holloway allegedly generated and distributed reports to investors containing false daily returns on their investments, which did not disclose that US Ventures was in fact steadily losing money. According to the indictment, between October 2005 and April 2007, US Ventures lost more than $10 million in trading. The indictment alleges that the “profit” figures on the investor reports were entirely fabricated. Holloway and US Ventures also made “profit distributions” to investors that consisted of funds solicited from new investors, not actual profits.
The indictment also alleges that Holloway misappropriated investors’ funds for a variety of personal expenses, including supporting his then-wife’s eBay business and Holloway’s lifestyle. During 2006 alone, Holloway diverted more than $1.2 million in investor funds to a business account used for his personal use despite the fact that, as alleged in the indictment, he falsely filed a false personal tax return for 2006 in which he claimed a gross income of only $27,500.
The maximum penalty for wire fraud is 20 years in prison and a fine of $250,000 for each count. The maximum penalty for the tax evasion charge is three years in prison and a fine of $100,000.
An indictment is merely an accusation, and a defendant is presumed innocent unless proven guilty in a court of law.
This case is being prosecuted by Trial Attorney Thomas B.W. Hall and Deputy Chief Charles La Bella of the Fraud Section in the Justice Department’s Criminal Division and Assistant U.S. Attorney Mark Y. Hirata for the District of Utah. The case was investigated by the FBI’s Salt Lake City Field Office and the IRS-CI’s Las Vegas Field Office. The department thanks the Commodity Futures Trading Commission and the Securities and Exchange Commission for their assistance in the investigation.
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.
Peruvian Artifact RepatriatedRead the Press Release
WASHINGTON - A gold Moche monkey head was returned to the government of Peru today in a repatriation ceremony at the Peruvian Embassy in Washington, D.C., announced Assistant Attorney General Lanny A. Breuer of the Criminal Division and U.S. Attorney Charles M. Oberly III for the District of Delaware.
The Moche culture flourished in Peru from the first through eighth centuries AD. Moche nobility were buried in tombs with important symbols of power, often made of gold. Due to the dry climate, the bodies and artifacts have been preserved through the years. In 1987, the royal tombs were discovered in northern Peru, including the Sipan region. Shortly thereafter, tomb raiders descended on the sites, looking for gold. They found it, including the gold monkey head (circa 300 AD). The monkey head ended up in a private collection in the United States. The collector subsequently donated the monkey head to the Museum of New Mexico, Palace of the Governors in Santa Fe, N.M.
The Museum of New Mexico entered into a memorandum of understanding with the government of Peru to return the monkey head to its rightful place in Peru.
“This repatriation is the result of the joint efforts of this office, the FBI Art Crime Team, the Department of Justice Office of International Affairs, the New Mexico Attorney General’s Office and the Museum of New Mexico,” said U.S. Attorney Charles M. Oberly III. “I commend all parties for their efforts in producing this positive outcome. In particular, I commend the Museum of New Mexico for its selfless and noble action in returning this invaluable artifact to Peru. Artifacts like this Moche monkey head represent the history not only of the source country, in this case Peru, but the history of all mankind. We hope that this repatriation will help repair at least some of the damage caused by the looting of Moche sites.”
This matter was investigated by Assistant U.S. Attorney David L. Hall, who has an extensive history in handling cases involving ancient artifacts,who became involved in the investigation in 2007 in his capacity as special prosecutor, FBI Art Crime Team. The Criminal Division’s Office of International Affairs provided significant assistance in this matter.
Owner of Miami-Area Mental Health Company Sentenced to 35 Years in Prison for Orchestrating $205 Million Medicare Fraud SchemeRead the Press Release
WASHINGTON – The owner of a fraudulent Miami-area mental health care company, American Therapeutic Corporation (ATC), was sentenced today to 35 years in prison for orchestrating a $205 million Medicare fraud scheme, announced the Department of Justice, the FBI and the Department of Health and Human Services (HHS).
Judith Negron, 40, was sentenced by U.S. District Judge James Lawrence King in the Southern District of Florida. Judge King ordered Negron to pay more than $87 million in restitution, jointly and severally with her co-defendants. Negron was also sentenced to three years of supervised release following her prison term. Two other owners of ATC, Lawrence Duran and Marianella Valera, were sentenced in September 2011 to 50 and 35 years in prison, respectively, for their roles in the scheme. These sentences are the three longest prison sentences ever imposed in a Medicare Fraud Strike Force case.
On Aug. 24, 2011, after a six-day trial, a federal jury in the Southern District of Florida found Negron guilty of 24 felony counts, including conspiracy to commit health care fraud, health care fraud, conspiracy to pay and receive illegal health care kickbacks, conspiracy to commit money laundering, money laundering and structuring to avoid reporting requirements.
Evidence at trial demonstrated that Negron, along with Duran and Valera, masterminded and executed a scheme to defraud Medicare beginning in 2002 and continuing until they were arrested in October 2010. Evidence at trial established that the three owners submitted false and fraudulent claims to Medicare through ATC, a Florida corporation headquartered in Miami that purportedly operated partial hospitalization programs (PHPs) in seven different locations throughout South Florida and Orlando. A PHP is a form of intensive treatment for severe mental illness. Negron and her co-conspirators also used a related company, American Sleep Institute (ASI), to submit fraudulent Medicare claims.
According to the evidence at trial, Negron, Duran, Valera and others paid bribes and kickbacks to owners and operators of assisted living facilities and halfway houses and to patient brokers in exchange for delivering ineligible patients to ATC and ASI. In some cases, the patients received a portion of those kickbacks. Throughout the course of the conspiracy, millions of dollars in kickbacks were paid in exchange for Medicare beneficiaries, who did not qualify for PHP services, to attend treatment programs that were not legitimate PHP programs, so that ATC and ASI could bill Medicare for more than $205 million in unnecessary or illegitimate services.
According to the evidence, Negron and her co-conspirators used another company they owned and operated, Medlink Professional Management Group Inc., to conceal the fraud and kickback scheme from Medicare and law enforcement. Once Medicare paid ATC and ASI for the fraudulently billed services, Duran, Valera and others transferred the money to Medlink. Evidence at trial showed that Negron and her co-conspirators used Medlink to pay millions of dollars in kickback payments by using an extensive money laundering scheme.
Evidence at trial demonstrated that Negron signed kickback checks to patient recruiters whose only jobs at ATC were to provide patients from halfway houses or assisted living facilities. Evidence at trial also established that Negron and others caused the alteration of patient files and therapist notes for the purpose of making it falsely appear that patients being treated by ATC qualified for PHP treatments and that the treatments provided were legitimate PHP treatments. For instance, evidence established that Negron would “robo-sign” patient files, meaning she would sign patient documents as a supervising therapist without having treated the patients. The evidence also showed that Negron signed files as though she had been in two places at the same time, in Boca Raton and Homestead, Fla. Evidence further revealed that Negron knew doctors were similarly signing patient files without reading them or seeing the patients. In some cases, Negron provided the doctors with the files for their signature. According to evidence presented at trial, Negron and her co-conspirators billed Medicare for PHP treatment, including group psychotherapy, provided to a patient who was in a neuro-vegetative state, who would not lift her head or respond. The evidence also showed that Negron and her co-conspirators caused doctors to refer ATC patients to ASI even though the patients did not qualify for sleep studies.
Negron has been in federal custody since her conviction.
ATC and Medlink pleaded guilty in May 2011 to conspiracy to commit health care fraud. ATC also pleaded guilty to conspiracy to defraud the United States and to pay and receive illegal health care kickbacks. The corporations were sentenced to five years of probation per count and ordered to pay restitution of $87 million. Both corporations have been defunct since their owners were arrested in October 2010. A top manager, Margarita Acevedo, was sentenced in September 2011 to 91 months in prison.
Today’s sentence was announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida; Special Agent-in-Charge John V. Gillies of the FBI’s Miami Field Office; and Special Agent-in-Charge Christopher Dennis of the HHS Office of Inspector General (HHS-OIG), Office of Investigations Miami office.
The case was prosecuted by Trial Attorney Jennifer L. Saulino and Acting Assistant Chief Benjamin D. Singer 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 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.
Justice Department and States Address Prisoner RecidivismRead the Press Release
The Department of Justice’s Office of Justice Programs (OJP) today sponsored a forum of policymakers from all 50 states to focus on improving success rates for people released from prison. The event positioned states to set goals, or to expand on existing goals, for reducing recidivism through cost-effective strategies in their communities.
“In this time of economic challenges, we must continue to use every tool and strategy at our disposal to protect the American people while reducing costs to taxpayers,” said Attorney General Eric Holder. “Today’s national forum demonstrates the Justice Department’s firm commitment to working with its partners in the states and non-governmental organizations to improve public safety by supporting efforts to assist formerly incarcerated people as they return to their communities to become productive members of our society.”
In partnership with the Council of State Governments, the Association of State Correctional Administrators, the Public Welfare Foundation and the Pew Center on the States, OJP’s Bureau of Justice Assistance (BJA) is working with all 50 states to identify and pursue cost-effective strategies on their investments in public safety. Following today’s forum, participants will begin setting measurable goals for reducing recidivism; creating plans to achieve these goals by drawing on the latest research and experiences from the field; and identifying benchmarks state and federal policymakers can use to track progress.
“Evidence-based strategies integrated with federal support provide states with the opportunity to increase public safety while saving money,” said OJP Assistant Attorney General Laurie O. Robinson. “Today’s forum allows corrections directors and policymakers to come together to brainstorm ideas and set measurable goals for significant reductions in recidivism.”
A Pew Center on the States report presented today demonstrated that reducing states’ recidivism rates by just 10 percent could collectively save states more than $635 million a year in averted prison costs. Experts pointed to research showing how certain strategies can help reduce recidivism, including concentrating supervision and treatment resources on those most likely to reoffend.
“The Bureau of Justice Assistance has directed considerable energy and resources to supporting local programs and state-level policy changes that make better use of limited public dollars,” said BJA Director Denise E. O’Donnell. “It’s now our hope that government agencies and community-based organizations will adopt evidenced-based strategies to reduce recidivism.”
The Office of Justice Programs (OJP), headed by Assistant Attorney General Laurie O. Robinson, provides federal leadership in developing the nation’s capacity to prevent and control crime, administer justice and assist victims. OJP has six bureaus and offices: the BJA; the Bureau of Justice Statistics; the National Institute of Justice; the Office of Juvenile Justice and Delinquency Prevention; the Office for Victims of Crime; and the Office of Sex Offender Sentencing, Monitoring, Apprehending, Registering, and Tracking (SMART). More information about OJP and its components can be found at www.ojp.gov
Houston Investment Manager Indicted in Utah for Alleged Role in $72 Million Fraud SchemeRead the Press Release
WASHINGTON – An investment manager based in Houston was arrested today on charges filed in federal court in Salt Lake City for his alleged role in a $72 million investment fraud scheme, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney David B. Barlow for the District of Utah, Special Agent in Charge David Johnson of the FBI’s Salt Lake City Field Office and Special Agent in Charge Paul A. Camacho of the Internal Revenue Service-Criminal Investigation (IRS-CI) Las Vegas Field Office.
An indictment unsealed today in the District of Utah charges Robert J. Andres, 60, with five counts of wire fraud. He was arrested this morning in Houston and is expected to make his initial appearance tomorrow in the Southern District of Texas.
According to the indictment, Andres operated Winsome Investment Trust, an investment entity, and served as its sole manager, attorney and trustee. The indictment alleges that from October 2005 until at least January 2011, Andres recruited investors for Winsome by misrepresenting Winsome’s assets and asset allocation and the way in which funds were invested.
Between October 2005 and April 2007, Andres allegedly raised more than $39 million from Winsome investors by disseminating false and misleading Winsome balance sheets and by representing to investors that Andres would invest all of their funds in a trading program or a mostly automated trading business.
The indictment alleges that between April 2007 and January 2011, Andres used false and misleading information to raise an additional $32 million from new investors. Furthermore, Andres allegedly failed to disclose that new investors’ funds would be used to pay earlier investors. The indictment also alleges that Andres used new investor funds to make purported “profit” payments to earlier investors to create the false impression that Winsome was profitable. During this period, Andres allegedly misappropriated approximately $2.2 million in investor proceeds for personal use, including hotel bills and living expenses.
The maximum penalty for each count of wire fraud is 20 years in prison and a fine of $250,000 for each count.
An indictment is merely an accusation, and a defendant is presumed innocent unless proven guilty in a court of law.
This case is being prosecuted by Trial Attorney Thomas B.W. Hall and Deputy Chief Charles La Bella of the Fraud Section in the Justice Department’s Criminal Division and Assistant U.S. Attorney Mark Y. Hirata for the District of Utah. The case was investigated by the FBI’s Salt Lake City Field Office and the IRS-CI Las Vegas Field Office. The department thanks the Commodity Futures Trading Commission and the Securities and Exchange Commission for their assistance in the investigation.
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.
Four Romanian Nationals Charged with Allegedly Participating in Multimillion Dollar Scheme <br /> to Hack into and Steal Credit Card Data from U.S. MerchantsRead the Press Release
WASHINGTON – Four Romanian nationals were charged in an indictment unsealed yesterday in federal court for their alleged participation in an international multimillion dollar scheme to remotely hack into and steal payment card data from hundreds of U.S. merchants’ point of sale computer systems, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney John P. Kacavas of the District of New Hampshire and Special Agent In Charge Steven Ricciardi of the U.S. Secret Service, Boston Field Office.
Adrian-Tiberiu Oprea, 27, of Constanta, Romania; Iulian Dolan, 27, of Craiova, Romania; Cezar Iulian Butu, 26, of Ploiesti, Romania; and Florin Radu, 23, of Rimnicu Vilcea, Romania,were charged in a four-count indictment filed in the District of New Hampshire with conspiracy to commit computer fraud, wire fraud and access device fraud. Oprea was arrested last week in Romania and is currently in custody there. Dolan and Butu were arrested upon their entry into the United States on Aug. 13 and Aug. 14, 2011, respectively, and remain in United States custody. Radu remains at large.
According to the indictment, from approximately 2008 until May 2011, Oprea, Dolan, Butu and Radu conspired to remotely hack into more than 200 U.S.-based merchants’ point-of-sale (POS) or “checkout” computer systems in order to steal customers’ credit, debit and gift card numbers and associated data (collectively referred to as “credit card data”). A POS system allows merchants to process customer purchases, including those made using credit, debit and gift cards, and typically includes a computer, monitor, integrated credit card processing system, signature capture device and a customer pin pad device. Merchant victims include more than 150 Subway restaurant franchises (which is less than 1 percent of all Subway restaurants), located throughout the United States, including in the District of New Hampshire, as well as more than 50 other identified retailers. According to the indictment, members of the conspiracy have compromised the credit card data of more than 80,000 customers, and millions of dollars of unauthorized purchases have been made using the compromised data.
If convicted, the defendants face a maximum of five years in prison for each count of conspiracy to commit computer related fraud, 30 years in prison for each count of conspiracy to commit wire fraud and five years in prison for each count of conspiracy to commit access device fraud. They also face fines up to twice the amount of the fraud loss and restitution.
The case was investigated by the U.S. Secret Service and is being prosecuted by Assistant U.S. Attorney Arnold H. Huftalen of the District of New Hampshire and Trial Attorney Mona Sedky of the Computer Crime and Intellectual Property Section in the Justice Department’s Criminal Division. The Office of International Affairs in the Justice Department’s Criminal Division provided assistance. Subway Headquarters assisted in the investigation.
The details contained in the indictment are allegations. The defendants are presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Former U.S. Air Force Master Sergeant Sentenced to 40 Months in Prison for Receiving Bribes in Return for the Award of Contracts at Bagram Airfield, AfghanistanRead the Press Release
WASHINGTON – A former Master Sergeant in the U.S. Air Force was sentenced yesterday to 40 months in prison for conspiring to and receiving bribes from military contractors in return for the award of Department of Defense contracts during his deployment to Bagram Airfield, Afghanistan, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division.
Patrick W. Boyd, 44, of Gainesville, Fla., was sentenced by U.S. District Judge Matthew F. Kennelly of the Northern District of Illinois. In addition to his prison term, Boyd was sentenced to one year of supervised release and was ordered to pay $130,000 in restitution.
Boyd pleaded guilty in June 2008 to a superseding indictment charging him with three counts of conspiracy to commit bribery and three counts of bribery. According to the superseding indictment and other documents filed in the case, Boyd served as a warranted contracting officer in Afghanistan from September 2004 to January 2005. While serving in Afghanistan, Boyd and his co-conspirators made separate agreements with three military contractors – Naweed Bakhshi Company, Northern Reconstruction Organization and Top’s Construction – to receive $30,000 cash from each company in return for the award of particular contracts. Boyd then awarded contracts for concrete bunkers and barriers and asphalt paving services to the contractors. The contractors each delivered $30,000 to Boyd’s co-conspirators, who divided the bribe monies among themselves and Boyd. Boyd is the eighth defendant sentenced in this investigation. Ten additional defendants remain to be sentenced in the Northern District of Illinois and the District of Hawaii.
On Dec. 6, 2011, Judge Kennelly sentenced former Lieutenant Robert Moore, one of Boyd’s conspirators, to 15 months in prison and one year of supervised release and ordered Moore to pay $120,000 in restitution. In addition to his participation in the corrupt award of contracts in return for money, Moore also conspired to and received bribes for fraudulently verifying the receipt of concrete bunkers and barriers that were, in fact, never delivered to Bagram Airfield. Another conspirator, former Major Christopher West, will be sentenced on Dec. 20, 2011.
In a related case, on Dec. 5, 2011, Judge Kennelly sentenced Sergeant Sheryl Ayeni to one year in prison and one year of supervised release and ordered Ayeni to pay $30,000 in restitution. Ayeni, who served at Bagram Airfield at the same time as Boyd, Moore and West, received approximately $30,000 in bribe money in return for permitting payment of a local Afghan military contractor in U.S. dollars, which is a violation of relevant Department of Defense regulations.
This case is being prosecuted by Trial Attorney Mark W. Pletcher of the Criminal Division’s Fraud Section , and investigated by the Army Criminal Investigations Division, the Defense Criminal Investigative Service and the Department of the Air Force, Office of Special Investigations, with assistance from the Special Inspector General for Afghanistan Reconstruction.
Former Los Angeles Resident Pleads Guilty in Plot to Attack Seattle Military Processing CenterRead the Press Release
SEATTLE – A former Los Angeles man pleaded guilty today in connection with the June 2011 plot to attack a military installation in Seattle, announced Jenny A. Durkan, U.S. Attorney for the Western District of Washington; Lisa Monaco, Assistant Attorney General for National Security; and Laura M. Laughlin, Special Agent-in-Charge of the FBI Seattle office.
Walli Mujahidh, aka "Frederick Domingue, Jr.," 32, pleaded guilty to conspiracy to murder officers and agents of the United States, conspiracy to use weapons of mass destruction and unlawful possession of a firearm. If the plea agreement is accepted by the court, Mujahidh will be sentenced to between 27 and 32 years in prison under the terms of the agreement. Following the prison term, Mujahidh will be on federal supervised release for the rest of his life. Mujahidh is scheduled to be sentenced by U.S. District Judge James L. Robart on April 16, 2012.
“This defendant tried to carry out a plot to kill American servicemen and women, and other innocent citizens who happened to be at the federal facility on the day of the planned attack,” said U.S. Attorney Durkan. “I applaud the FBI, Seattle Police Department and the Joint Terrorism Task Force for their work in disrupting this plot and bringing Walli Mujahidh to justice. I also want to thank the many leaders of the Muslim Community who have worked with my office to ensure that acts of a few are not used to condemn the faith of many.”
“Today’s plea underscores the threat posed by homegrown violent extremists and the need for continued vigilance to detect and dismantle their plots. I applaud the many agents, analysts and prosecutors who worked together to thwart this planned attack before anyone was harmed,” said Assistant Attorney General Monaco.
“The FBI is pleased that Mr. Mujahidh accepted responsibility for his actions, but this case remains a chilling reminder that there is constant work to be done,” said FBI Special Agent-in-Charge Laughlin. “The FBI’s Joint Terrorism Task Force continues to work tirelessly to detect, disrupt and dismantle threats to our community.”
The other defendant in the case, Abu Khalid Abdul-Latif, aka “Joseph Anthony Davis,” 33, of Seattle, remains scheduled for trial in May 2012.
Law enforcement first became aware of the plot when a citizen alerted them that he/she had been approached about participating in the attack and supplying firearms to the conspirators. The person then agreed to work with law enforcement, which began monitoring Abdul-Latif and Mujahidh. Since early June, the conspirators were captured on audio and videotape discussing a violent assault on the Military Entrance Processing Station (MEPS). The MEPS is where each branch of the military screens and processes enlistees. In addition to housing many civilian and military employees, the building houses a federal daycare center.
In his plea agreement, Mujahidh admits that he became aware of the planned attack in May 2011, and in early June was making plans to travel to Seattle from Los Angeles to participate in the attack. Mujahidh arrived in Seattle on June 21, 2011, and in a meeting with a person who was working with law enforcement, Mujahidh suggested going into the MEPS with machine guns and grenades and killing everyone there.
The next day, the person working with police brought some firearms, which had been rendered inoperable by law enforcement, to a meeting with Mujahidh and Abdul-Latif. The men were arrested after they took possession of the weapons. Mujahidh is prohibited from possessing firearms due to a felony conviction in California for theft.
The case is being prosecuted by the U.S. Attorney’s Office for the Western District of Washington, with assistance from the Counterterrorism Section of the Justice Department’s National Security Division.
The investigation is being conducted by the FBI’s Joint Terrorism Task Force, which has investigators from federal, state and local law enforcement. The Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF) contributed significant expertise to this investigation.
Cargolux Airlines International Executives Plead Guilty for Fixing Surcharge Rates on Air Cargo ShipmentsRead the Press Release
WASHINGTON — Two executives of Luxembourg-based Cargolux Airlines International S.A. have each pleaded guilty and agreed to serve 13 months in prison for participating in a conspiracy to fix cargo rates for international air shipments, the Department of Justice announced.
Ulrich Ogiermann, the former president and CEO, and current employee of Cargolux, and Robert Van de Weg, the senior vice president of sales and marketing for Cargolux, pleaded guilty today to the charges contained in an indictment filed on Oct. 28, 2010, in U.S. District Court in West Palm Beach, Fla. Ogiermann and Van de Weg pleaded guilty to conspiring with others to suppress and eliminate competition by fixing and coordinating certain surcharges, including security and fuel surcharges, charged to customers located in the United States and elsewhere for air cargo shipments including shipments to and from the United States. According to the indictment, Ogiermann participated in the conspiracy from at least as early as October 2001 until at least February 2006, and Van de Weg participated in the conspiracy from at least as early December 2003 until at least February 2006. Under the plea agreements, Ogiermann and Van de Weg have also each agreed to pay a $20,000 criminal fine and to cooperate with the department’s ongoing investigation.
Air cargo carriers transport a variety of cargo shipments, such as heavy equipment, perishable commodities and consumer goods, on scheduled international flights.
Including Ogiermann and Van de Weg, a total of 22 airlines and 21 executives have been charged in the Justice Department’s ongoing investigation into price fixing in the air transportation industry. To date, more than $1.8 billion in criminal fines have been imposed and four executives have been sentenced to serve prison time.
Ogiermann and Van de Weg are charged with price fixing in violation of the Sherman Act, which 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.
Today’s guilty pleas are the result of a joint investigation into the air transportation industry being conducted by the Antitrust Division’s National Criminal Enforcement Section and the Atlanta Field Office, the FBI’s Atlanta Field Office, the Department of Transportation’s Office of Inspector General and the U.S. Postal Service’s Office of Inspector General. Anyone with information concerning price fixing or other anticompetitive conduct in the air transportation industry is urged to call the Antitrust Division’s National Criminal Enforcement Section at 202-307-6694, visit www.justice.gov/atr/contact/newcase.htm or call the FBI’s Atlanta Field Office at 404-679-9000.
Bloods Gang Member Pleads Guilty to Federal Racketeering ChargesRead the Press Release
WASHINGTON – A Nashville, Tenn., man pleaded guilty today in federal court to charges of conspiring to participate in racketeering activity related to his membership in the Bloods gang criminal enterprise , announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney for the Middle District of Tennessee Jerry E. Martin.
William Walden, 23, aka “Wild Bill,” pleaded guilty before U.S. District Judge Aleta Trauger in the Middle District of Tennessee to one count of conspiracy to participate in racketeering activity.
According to court documents, Walden and other Bloods gang members and associates agreed to commit multiple acts of murder, robbery and narcotics trafficking on behalf of the Bloods gang. Walden and numerous Bloods gang members met on a regular basis at various locations throughout the Middle District of Tennessee, including Shelby Park, Cedar Hill Park and the Galaxy Star Drug Awareness and Gang Prevention Center in Nashville, to report on gang-related business, collect dues, commit disciplinary actions against fellow gang members, discuss acts of violence against rival gang members and initiate or “jump in” new members by beating them for a period of time, among other things.
Walden admitted to being a Bloods member and to engaging in specific criminal activity in support of the criminal enterprise, such as possessing cocaine with an intent to sell it, possessing a Glock 9mm semi-automatic firearm and assaulting Bloods gang member Joedon Bradley during a gang meeting at the Galaxy Star Drug Awareness and Gang Prevention Center. These acts occurred at various times during March and June 2010.
Sentencing is scheduled for March 23, 2012. The plea agreement states that the appropriate sentence is a term of 10 years in prison.
The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives; the Metropolitan Nashville Police Department; the Gallatin, Tenn., Police Department; with assistance from the U.S. Marshals Service and the Davidson County, Tenn., District Attorney’s Office.
The case is being prosecuted by Assistant U.S. Attorney Scarlett Singleton of the Middle District of Tennessee and Trial Attorney Cody L. Skipper of the Organized Crime and Gang Section in the Justice Department’s Criminal Division.
Wednesday 7 December 2011
Virginia Man Pleads Guilty in Scheme to Conceal Pakistan Government Funding for His U.S. Lobbying EffortsRead the Press Release
WASHINGTON – Syed Ghulam Nabi Fai, 62, a U.S. citizen and resident of Fairfax, Va., pleaded guilty today to conspiracy and tax violations in connection with a decades-long scheme to conceal the transfer of at least $3.5 million from the government of Pakistan to fund his lobbying efforts in America related to Kashmir.
The guilty plea was announced by Lisa Monaco, Assistant Attorney General for National Security; Neil MacBride, U.S. Attorney for the Eastern District of Virginia; John DiCiccio, Principal Deputy Assistant Attorney General for the Tax Division; James McJunkin, Assistant Director in Charge of the FBI Washington Field Office; and Jeannine Hammett, Acting Special Agent in Charge of the Internal Revenue Service (IRS) Criminal Investigation’s Washington, D.C., Field Office.
At a hearing before U.S. District Court Judge Liam O’Grady in the Eastern District of Virginia, Fai pleaded guilty to a two-count criminal information. Count one of the information charges Fai with conspiracy to: 1) falsify, conceal and cover up material facts he had a duty to disclose in matters within the jurisdiction of executive branch agencies of the U.S. government; and to 2) defraud the Treasury Department by impeding the lawful functions of the IRS in the collection of revenue. Count two of the information charges Fai with endeavoring to impede the administration of tax laws.
Fai, who was arrested on July 19, 2011, faces a maximum potential sentence of five years in prison for the conspiracy count and a maximum three years in prison for the tax violation. Judge O’Grady set sentencing for March 9, 2012. As part of his plea agreement, Fai has agreed to forfeit his interest in $142,851.32 seized by the government in July 2011.
Fai served as the director of the Kashmiri American Council (KAC), a non-governmental organization in Washington, D.C., that held itself out to be run by Kashmiris, financed by Americans and dedicated to raising the level of knowledge in the United States about the struggle of the Kashmiri people for self-determination. But according to court documents, the KAC was secretly funded by officials employed by the government of Pakistan, including the Inter-Services Intelligence Directorate (ISI).
“Syed Fai today admitted his role in a decades-long scheme to conceal the fact that the government of Pakistan was secretly funding his efforts to influence U.S. policy on Kashmir,” said Assistant Attorney General Monaco.
“For the last 20 years, Mr. Fai secretly took millions of dollars from Pakistani intelligence and lied about it to the U.S. government,” said U.S. Attorney MacBride. “As a paid operative of ISI, he did the bidding of his handlers in Pakistan while he met with U.S. elected officials, funded high-profile conferences and promoted the Kashmiri cause to decision-makers in Washington.”
“The Tax Division is committed to prosecuting any individual who illegally uses the tax-exempt status of charitable entities to promote or conceal federal crimes,” said Principal Deputy Assistant Attorney General DiCiccio.
“Mr. Fai purposefully hid financial transactions from the U.S. government, with intentions that his scheme to fund lobbying efforts by a foreign government would go unnoticed,” said FBI Assistant Director in Charge McJunkin. “The FBI will detect and defeat those who attempt to surreptitiously exert foreign influence on our government by using agents who conceal their foreign affiliation.”
“The illegal activity in this case, including tax charges and abuse of charitable organizations, harms all Americans, as we all have to pay our fair share for the government services and protections that we enjoy,” said IRS Special Agent in Charge Hammett.
The Scheme
Today, Fai admitted that, from 1990 until about July 18, 2011, he conspired with others to obtain money from officials employed by the government of Pakistan, including the ISI, for the operation of the KAC in the United States, and that he did so outside the knowledge of the U.S. government and without attracting the attention of law enforcement and regulatory authorities.
To prevent the Justice Department, FBI, Department of Treasury and the IRS from learning the source of the money he received from officials employed by the government of Pakistan and the ISI, Fai made a series of false statements and representations, according to court documents. For example, Fai told FBI agents in March 2007 that he had never met anyone who identified himself as being affiliated with the ISI and, in May 2009, he falsely denied to the IRS on a tax return for the KAC that the KAC had received any money from foreign sources in 2008.
In addition, according to court documents, Fai sent a letter in April 2010 to the Justice Department falsely asserting that the KAC was not funded by the government of Pakistan. Later that year, Fai falsely denied to the IRS that the KAC had received any money from foreign sources in 2009. In July 2011, Fai falsely denied to FBI agents that he or the KAC received money from the ISI or government of Pakistan.
In fact, Fai repeatedly submitted annual KAC strategy reports and budgetary requirements to Pakistani government officials for approval. For instance, in 2009, Fai sent the ISI a document entitled “Plan of Action of KAC / Kashmir Centre, Washington, D.C., for the Fiscal Year 2010,” which itemized KAC’s 2010 budget request of $658,000 and listed Fai’s plans to secure U.S. congressional support for U.S. action in support of Kashmiri self-determination.
Fai also admitted that, from 1990 until about July 18, 2011, he corruptly endeavored to obstruct and impede the due administration of the internal revenue laws by arranging for the transfer of at least $3.5 million to the KAC from employees of the government of Pakistan and the ISI.
According to court documents, Fai accepted the transfer of such money to the KAC from the ISI and the government of Pakistan through his co-defendant Zaheer Ahmad and middlemen (straw donors), who received reimbursement from Ahmad for their purported “donations” to the KAC. Fai provided letters from the KAC to the straw donors documenting that their purported “donations” to the KAC were tax deductible and encouraged these donors to deduct the transfers as “charitable” deductions on their personal tax returns. Fai concealed from the IRS that the straw donors’ purported KAC “donations” were reimbursed by Ahmad, using funds received from officials employed by the ISI and the government of Pakistan.
This investigation is being conducted by the FBI’s Washington Field Office and the IRS Criminal Investigation’s Washington Field Office.
The prosecution is being handled by Assistant U.S. Attorneys Gordon Kromberg and Daniel Grooms of the U.S. Attorney's Office for the Eastern District of Virginia; Trial Attorney John Gibbs of the Counterterrorism Section of the Justice Department’s National Security Division; and Special Assistant U.S. Attorney Allison Ickovic from the Justice Department’s Tax Division.
Virginia Man Convicted for Filing a False Refund Claim Based on Fraudulent IRS formsRead the Press Release
WASHINGTON - Richard Jaensch, a self-employed plumber residing from Annandale, Va., was found guilty today by a federal jury sitting in Alexandria, Va., of one count of corruptly endeavoring to impede the Internal Revenue Service (IRS), one count of filing a false claim for a refund, and four counts of failing to file tax returns for 2004 through 2007, the Justice Department and the IRS announced today.
Jaensch faces a potential maximum prison sentence of 12 years and a fine of up to $900,000 when he is sentenced on March 2, 2012.
According to evidence introduced at trial, Jaensch failed to file personal income tax returns between 2002 and 2007, despite the fact that he was required to do so by law. The first tax return he filed after 2002 was a false 2008 tax return claiming a $774,052 refund based on false Forms 1099-OID that the defendant submitted to the IRS. Over the years, to obstruct the IRS, Jaensch filed numerous frivolous documents and pleadings in Fairfax County, Va.; provided false information to the IRS; and filed a false 2008 federal income tax return, IRS Form 1040.
The evidence also showed that Jaensch caused his wife to present letters to her employer directing them to stop withholding federal income taxes from her salary. The IRS began levying his wife’s paycheck and bank accounts to satisfy her outstanding tax liability and Jaensch continued his obstructive conduct by filing or causing his wife to file correspondence with the IRS claiming that the IRS could not instruct her employer to withhold taxes from her paycheck.
Jaensch’s wife, Janet Jaensch, was a former high-level civilian employee in the Department of the Navy during the time that she was not filing tax returns at her husband’s direction. She pleaded guilty to willfully failing to file a tax return and will be sentenced on Dec. 13, 2011.
This case was investigated by the IRS-Criminal Investigation’s Washington Field Office. Assistant U.S. Attorney Gene Rossi from the U.S. Attorney’s Office for the Eastern District of Virginia and Trial Attorneys Jason Poole and Caryn Finley of the Justice Department’s Tax Division prosecuted the case on behalf of the United States.
More information about the Justice Department’s Tax Division and its enforcement efforts is available at www.usdoj.gov/tax/.
Operator of Detroit School and Day Care Pleads Guilty to Tax EvasionRead the Press Release
WASHINGTON – Robert G. Murdock, 64, of Southfield, Mich., pleaded guilty today to tax evasion, the Justice Department and Internal Revenue Service (IRS) announced. According to documents filed with the court, Murdock owned and operated a children’s day care center in Detroit called Kids Expectations, a Detroit elementary school called Metropolitan Academy of Detroit, and a payroll company called Metro Teaching Staff at various times from 1997 through 2007. During this period, Murdock accumulated unpaid federal payroll tax liabilities for his three businesses. When the IRS attempted collection actions such as levying on the corporate bank accounts, Murdock would incorporate new entities, often with similar names, obtain new Employer Identification Numbers for them from the IRS, and open new bank accounts, all for the purpose of moving assets out of the reach of the IRS.
According to the plea agreement, Murdock also evaded his personal taxes by filing false documents with the IRS and paying for personal expenditures out of business bank accounts and providing false information to IRS employees.
Murdock faces a potential maximum prison sentence of five years, a fine of up to $250,000 and restitution to the IRS of $200,000. Sentencing was set for Feb. 14, 2012.
Barbara McQuade, U.S. Attorney for the Eastern District of Michigan; John A. DiCicco, Principal Deputy Assistant Attorney General for the Justice Department’s Tax Division; and Erick Martinez, Special Agent In-Charge, IRS-Criminal Investigation made the announcement.
The case was investigated by Special Agents of the IRS - Criminal Investigation Division. Trial Attorney Shawn T. Noud of the Tax Division and Assistant U.S. Attorney Ross MacKenzie prosecuted the case.
Additional information about the Justice Department's Tax Division and its enforcement efforts may be found at www.justice.gov/tax .
Melville, N.Y., Business Owner Pleads Guilty to Failure to Pay over Employment TaxesRead the Press Release
WASHINGTON - Louis Alba pleaded guilty today in U.S. District Court in Central Islip, N.Y., to failing to pay over to the Internal Revenue Service (IRS) employment taxes, the Justice Department and IRS announced today.
According to court documents, Alba owned and operated CDJ Builders Corporation, a construction business in Melville that operated at construction sites in the New York Metropolitan area. Alba admitted that between 2004 and 2010, CDJ failed to pay over to the IRS approximately $779,387 in Federal Insurance Contributions Act (FICA) taxes and federal income taxes that CDJ withheld from its employees’ paychecks.
Alba faces a potential maximum sentence of five years in prison and a $250,000 fine. Judge Leonard D. Wexler, who is presiding over the matter, has not set a sentencing date.
The case was investigated by IRS - Criminal Investigation and is being prosecuted by Trial Attorneys Mark Kotila and Jeffrey B. Bender of the Justice Department’s Tax Division. The case is CR-11-730.
Additional information about the Tax Division and its enforcement efforts is available at www.usdoj.gov/tax .
Louisiana Man Sentenced to 10 Years in Prison for Operating Coffee Vending Business Fraud in FloridaRead the Press Release
WASHINGTON – Manuel Rodriguez, 47, of Lafayette, La., was sentenced today to 120 months in prison and three years supervised release for committing fraud in connection with a coffee machine business opportunity scheme, the Justice Department and the U.S. Postal Inspection Service announced. Additionally, he was ordered to pay more than $1.1 million in restitution. On Sept. 28, 2011, a federal jury in Fort Lauderdale, Fla., found Rodriguez guilty after a two-week trial. The jury found Rodriguez guilty on all seven counts submitted to it, one count of conspiracy and six counts of wire fraud.
At trial, witnesses testified that Rodriguez engaged in his scheme through the operation of three Florida companies: M & D Gourmet Coffee Inc. of Boca Raton, Fla.; Coffee Heaven LLC of Deerfield Beach, Fla.; and Divino Trio Coffee & Vending Company of Ft. Lauderdale. The jury heard testimony that the defendant and a co-conspirator made similar misrepresentations to consumers in connection with each of these companies with the same effect – a loss of tens of thousands of dollars per consumer.
Specifically, victims at trial testified that the defendant and his businesses offered a business package that included coffee machines, locations in which to place those machines, and on-going support and assistance in the operation of a coffee machine business. Witnesses explained that they lost amounts from $15,000 to $192,000 in the scheme. They testified that the defendant told them that their machines would sell enough coffee to recoup their investment in 12 to 18 months, and that this representation was false.
Victims also told the jury that while the defendant promised that the coffee machines would be placed in high-quality locations that would generate numerous sales, what was delivered were poor locations which generated few, if any, sales. Some victims testified that they received no machines at all.
“The court’s sentence should give fair warning to fraudsters who pad their pockets by imposing financial hardship on innocent victims,” said Tony West, Assistant Attorney General for the Justice Department’s Civil Division. “If you exploit consumers, we will be aggressive in our efforts to prosecute and hold you accountable.”
“We are committed to vigorously prosecuting financial fraud,” said Wifredo Ferrer, U.S. Attorney for the Southern District of Florida. “Fraudulent telemarketers must realize that they will be pursued and brought to justice.”
“The Postal Inspection Service has investigated scores of individuals and dozens of companies like the ones involved here,” said U.S. Postal Inspector in Charge, Henry Gutierrez, based in Miami. “Those investigations have led to felony convictions and significant terms of incarceration. The American public must remain vigilant to avoid sophisticated schemes that try to take advantage of our natural desire to prosper by owning businesses like this one.”
Assistant Attorney General West commended the investigative efforts of the U.S. Postal Inspection Service and the Federal Trade Commission. The case was prosecuted by attorneys John Claud and Matthew Ebert of the Justice Department’s Consumer Protection Branch.
Client of UBS and Swiss Cantonal Bank Indicted for Conspiracy to Defraud the IRSRead the Press Release
WASHINGTON – A federal grand jury in Fort Lauderdale, Fla., has returned an indictment charging Amir Zavieh of San Francisco with conspiring to defraud the Internal Revenue Service (IRS), the Justice Department and IRS announced today.
According to the indictment, Zavieh, a naturalized U.S. citizen, opened a secret Swiss bank account with UBS AG in Zurich, Switzerland, in March 1989. In 2000, Zavieh executed a document that directed UBS not to disclose his identity and ownership of the account to the IRS. Zavieh concealed the secret account at UBS by placing his domestic assets in the name of a nominee and failing to file income tax returns. One year in which Zavieh did file an income tax return, he failed to report on the return either the secret Swiss account or the income generated by that account.
The indictment further alleges that Zavieh closed his secret UBS account in 2009 after his former UBS banker, Renzo Gadola, advised Zavieh that Martin Lack, Gadola’s former colleague at UBS and then-business partner, could transfer the contents on the UBS account to a new account to be opened at a Swiss cantonal bank. Further, Gadola advised Zavieh to transfer only Swiss Francs from UBS to the cantonal bank in order to avoid detection.
The indictment also alleges that Gadola and Lack managed Zavieh’s secret account at the Swiss cantonal bank until Lack demanded that Zavieh provide him with a Form W-9 which would document that Zavieh was the owner of the account and subject to U.S. taxation. Zavieh refused and Lack transferred management of the secret Swiss account to another Swiss asset manager, who would not require Zavieh to provide a Form W-9.
According to the indictment, Zavieh fabricated a false story about the ownership of the assets in the secret Swiss accounts at UBS and Cantonal Bank in order to conceal the defendant’s ownership and control of assets and income from the IRS. He also made false statements to federal law enforcement agents regarding his ownership and control of the secret Swiss accounts.
On Dec. 22, 2010, Renzo Gadola, a citizen and resident of Switzerland, pleaded guilty to a one-count information charging him with conspiring to defraud the IRS. He has been cooperating with the Justice Department and IRS in providing information about his former U.S. clients who evaded their income taxes and his former Swiss colleagues who assisted those U.S. taxpayers. On Nov. 18, 2011, Senior District Judge James L. King sentenced Gadola to 60 months probation and ordered him to return to the United States at least once each year to assist the Justice Department in its ongoing investigations of illegal cross border banking.
On Aug. 2, 2011, a federal grand jury in Fort Lauderdale, returned an indictment charging Lack, a citizen and resident of Switzerland, with conspiring to defraud the IRS. According to that indictment, Lack assisted numerous U.S. customers to conceal their assets and income through the use of secret Swiss bank accounts. To date, Lack has not been arrested and remains at large.
As alleged in the indictment, U.S. citizens have an obligation to report to the IRS on Schedule B of their U.S. Individual Income Tax Return, Form 1040, whether they had a financial interest in, or signature authority over, a financial account in a foreign county in a particular year by checking “Yes” or “No” in the appropriate box and identifying the country where the account was maintained. They further have an obligation to report all income earned from foreign financial accounts on the tax return and to pay the taxes due on that income. Separately, U.S. citizens with a financial interest in, or signatory authority over, a foreign financial account worth more than $10,000 in a particular year, must also file an Foreign Bank and Financial Accounts form with the Treasury disclosing such an account by June 30 of the following year.
The conspiracy count carries a maximum penalty of five years in prison and a $250,000 fine.
This case is being prosecuted by Trial Attorneys Mark F. Daly and Michelle M. Petersen and Senior Litigation Counsel Kevin Downing of the Justice Department’s Tax Division, and Assistant U.S. Attorney Bertha Mitrani of the U.S. Attorney’s Office for the Southern District of Florida and was investigated with the assistance of the IRS.
An indictment is only an allegation of criminal conduct and is not evidence of guilt. A person is presumed innocent until and unless proven guilty beyond a reasonable doubt in a court of law.
Attorney General Holder Announces Financial Fraud Enforcement Task Force Executive DirectorRead the Press Release
U.S. Attorney General Eric Holder today announced the appointment of Michael J. Bresnick as the new executive director of President Barack Obama’s Financial Fraud Enforcement Task Force.
“I am pleased that Michael will bring his wealth of experience and energy to this critical mission,” said Attorney General Holder. “The task force is a powerful weapon in the Department of Justice’s ongoing battle against financial fraud like mortgage scams, Ponzi schemes and other predatory behaviors that victimize our families, friends and neighbors and wreak havoc on our financial system.”
Bresnick spent the last eight years investigating and prosecuting complex fraud cases at the federal level. Bresnick began his career as a federal prosecutor in 2003 as an assistant U.S. attorney in Philadelphia, where he prosecuted a wide variety of criminal cases, including financial fraud, health care fraud, public corruption and Racketeer Influenced and Corrupt Organization Act (RICO) offenses.
Most recently, Bresnick worked in the Criminal Division of the U.S. Department of Justice as an assistant chief in the Fraud Section. In that capacity, Bresnick supervised a team of attorneys in the Financial Institution and Public Sector Unit, which investigates and prosecutes a broad range of financial crimes, including mortgage fraud and bank fraud.
“I am excited about this opportunity and am looking forward to working with Attorney General Holder, Deputy Attorney General Cole and the task force members to continue the important business of combating financial fraud on behalf of the American people,” said Bresnick. “We will build on the accomplishments of the past two years and work proactively with our federal, state and local partners to identify new financial fraud schemes that hurt consumers and threaten the safety and soundness of our financial institutions.”
Before he began his career as a federal prosecutor, Bresnick worked for five years in the New York office of the law firm Weil, Gotshal & Manges LLP where his practice focused on white collar crime and business litigation.
Bresnick clerked for Judge Conrad K. Cyr of the U.S. Court of Appeals for the First Circuit as well as Judge Morton A. Brody of the U.S. District Court for the District of Maine. He earned his law degree from the University of Maine School of Law and his bachelor’s degree from Bowdoin College.
President Obama created the Financial Fraud Enforcement Task Force by executive order on Nov. 17, 2009, to improve efforts across the government and with state and local partners in investigating and prosecuting those who helped bring about the last financial crisis as well as those who would attempt to take advantage of the efforts at economic recovery. The task force is designed to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. The task force has established financial fraud coordinators in every U.S. attorney’s office around the country to help make these broad mandates a reality on the ground.
Since its formation, task force members have made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Task force members have charged an increased number of mortgage fraud cases, trained more than 100,000 professionals responsible for awarding and overseeing Recovery Act funds and held regional summits around the country to discuss strategies, resources and initiatives as well as to meet with communities most affected by the financial crisis.
Learn more about the Financial Fraud Enforcement Task Force at www.stopfraud.gov .
Arkansas Man Pleads Guilty to Civil Rights Offenses for Involvement in the Firebombing of Interracial Couple's HomeRead the Press Release
WASHINGTON - Gary Dodson, 32, of Waldron, Ark., pleaded guilty today in U.S. District Court in Little Rock, Ark., to one count of civil rights conspiracy, one count of interference with housing rights due to race and one count of possession of an unregistered firearm/destructive device for his involvement in the Jan. 14, 2011, racially motivated firebombing of the home of an interracial couple in Hardy, Ark.
Dodson, along with Jason Barnwell, 37, of Evening Shade, Ark.; Jake Murphy, 19, of Waldron; Dustin Hammond, 20, of Hardy, Ark.; and Wendy Treybig, 31, of Evening Shade, were indicted in April by a federal grand jury on civil rights charges and other federal charges stemming from their participation in the racially motivated firebombing and their attempts to obstruct a federal investigation.
During the plea proceedings, Dodson admitted that on the night of Jan. 14, 2011, while at a party at Barnwell’s house in Evening Shade, he, Murphy, Hammond and Barnwell devised a plan to firebomb the victims’ house. Dodson then drove all four men from Barnwell’s residence to the victims’ house in Hardy. When they arrived, Barnwell, Murphy and Hammond constructed three Molotov cocktails and threw them at the house. They damaged the victims’ house, however, the victims were not injured.
“The victims’ home was attacked and their safety threatened because of their race. Such violence and intimidation has no place in our society,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The Justice Department will continue to vigorously prosecute individuals who commit such atrocious acts of hate.”
“Today’s plea begins the final chapter in a terrible story begun less than a year ago on the night of Jan. 14, 2011, in a small Northeast Arkansas community,” said Christopher R. Thyer, U.S. Attorney for the Eastern District of Arkansas. “Racially motivated violence, more than any other type, tears at the very fabric of what makes America and Arkansas great. We should be celebrating our diversity rather than committing acts of violence because of it. When it occurs, my office will vigorously prosecute it.”
Dodson faces a maximum penalty of 30 years in prison. Sentencing has been set for April 6, 2012. Barnwell, Murphy, Hammond and Treybig have already pleaded guilty for their involvement in this matter.
This case was investigated by the Little Rock Office of the FBI and the Little Rock Office of the Bureau of Alcohol, Tobacco, Firearms and Explosives, with assistance from the Arkansas State Police, the Hardy and Waldron Police Departments, and the Scott and Sharp County Sheriff’s Offices. It is being prosecuted by Assistant U.S. Attorney John Ray White of the Eastern District of Arkansas, and Trial Attorneys Cindy Chung and Henry Leventis of the U.S. Department of Justice Civil Rights Division.
Tuesday 6 December 2011
Thirteen Alleged Latin Kings Members in North Carolina Indicted on Federal Racketeering ChargesRead the Press Release
WASHINGTON - Thirteen alleged members of the Almighty Latin King and Queen Nation (Latin Kings) have been indicted by a federal grand jury in Greensboro, N.C., for allegedly conspiring to participate in a racketeering enterprise, announced Assistant Attorney General for the Criminal Division Lanny A. Breuer and U.S. Attorney for the Middle District of North Carolina Ripley Rand.
According to the indictment, the defendants are members of the Latin Kings, a violent street gang with members operating in North Carolina since at least 2005. The traditional power centers of the Latin Kings are the Chicago and New York metropolitan areas, with thousands of members scattered across the United States and overseas.
“The indictment unsealed today alleges a pattern of violent criminal activity by Latin Kings members in North Carolina,” said Assistant Attorney General Breuer. “Criminal street gangs like the Latin Kings endanger communities across the country. We are working hard with our federal, state and local law enforcement partners to bring gang members and their associates to justice.”
“We have no tolerance for violent crime in North Carolina,” said U.S. Attorney Rand. “The investigation in this case is part of a coordinated effort between federal, state and local law enforcement to combat violent street gang activity. We will continue to work together to keep our neighborhoods safe, and we will not allow violent street gangs to dictate what happens in our communities.”
“These arrests today are an outstanding example of the tireless work of the Safe Streets Task Force. The gang’s attempt to portray the Latin Kings as a public service organization did not deter the FBI and our law enforcement partners from uncovering their scheme,” said Chris Briese, the Special Agent in Charge of the FBI Charlotte Division.
According to the indictment, the Latin Kings were allegedly formed in North Carolina by Jorge Peter Cornell, aka “King Jay,” who allegedly became a member of the Latin Kings while he was residing in New York City. When Cornell moved to the Middle District of North Carolina, he allegedly formed a tribe and became the “Inca” for the entire state of North Carolina. It is alleged that, through violence, threats of violence and coercion, Cornell gained control of all of the Latin Kings tribes in North Carolina, including chapters in Greensboro, Charlotte, Durham and Raleigh.
The unsealed indictment also alleges that Cornell, in an attempt to disguise the criminal activities of the Latin Kings and frustrate law enforcement attempts to investigate and prosecute the gang’s members, orchestrated a public relations campaign to falsely portray the Latin Kings as a public service organization. Cornell allegedly made public statements for peace between Greensboro street gangs and regularly held media events with community leaders to publicly advocate for the dissolution of Greensboro Police Department’s gang unit during the same period of time that he allegedly plotted to murder or assault rival gang members, including other Latin Kings, and was involved in other gang-related criminal activities.
The indictment charges the following defendants with conspiracy to participate in the racketeering activities of the Latin Kings:
- Jorge Peter Cornell, 35, aka “King Jay;”
- Russell Lloyd Kilfoil, 25, aka “King Peaceful” and “Jonathan Hernandez;”
- Randolph Leif Kilfoil, 26, aka “King Paul;”
- Jason Paul Yates, 31, aka “King Squirrel;”
- Luis Alberto Rosa, 24, aka “King Speechless;”
- Wesley Anderson Williams, 19, aka “King Bam;”
- Steaphan Acencio-Vasquez, 20, aka “King Leo;”
- Marcelo Ysrael Perez, 26, aka “King Lyrix” and “King Sacrifice;”
- Samuel Isaac Velasquez, 22, aka “King Hype;”
- Charles Lawrence Moore, 26, aka “King Toasty;”
- Richard Lee Robinson, 22, aka “King Focus;”
- Irvin Vasquez, 22, aka “King Dice;”
- Carlos Coleman, 19, aka “King Spanky.”
The indictment also charges Perez with a violent crime in aid of racketeering and using a firearm during the commission of a violent crime. The indictment alleges that Latin Kings members committed a wide range of crimes in order to further their racketeering scheme, including armed robberies, kidnappings, arson and assaults.
The indictment was returned under seal on Nov. 29, 2011, and unsealed today after 12 of the defendants were arrested or placed under detainer while in custody on other charges.
Initial appearances for six defendants arrested today in North Carolina will be held in Greensboro federal court at 4 p.m. before U.S. Magistrate Judge P. Trevor Sharp. Williams was arrested in Las Vegas and will appear in federal court there.
Perez is the only defendant not in custody and the FBI Safe Streets Task Force, Guilford County, N.C., Sheriff’s Deputies and the Greensboro Police Department are searching for him. Please call the FBI’s Charlotte Field Office at 704-672-6100 or the Greensboro-Guilford County Crime Stoppers at 336-373-1000 if you have any information on the whereabouts of Perez.
The case is being prosecuted by the U.S. Attorney’s Office for the Middle District of North Carolina and the Criminal Division’s Organized Crime and Gang Section. The case is being investigated by the FBI, the Guilford County Sheriff’s Department and the Greensboro Police Department.
Each of the defendants faces a maximum sentence of life in prison. An indictment is not evidence of guilt. All defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
St. Louis-Based KV Pharmaceutical to Pay $17 Million<br /> to Settle False Claims AllegationsRead the Press Release
WASHINGTON - KV Pharmaceutical Company, which was the St. Louis-based parent company of now-defunct Ethex Corporation, will pay $17 million to resolve False Claims Act allegations that Ethex failed to advise the Centers for Medicare and Medicaid Services (CMS) that two unapproved products did not qualify for coverage under federal health care programs, the Justice Department announced today. Ethex is alleged to have submitted false quarterly reports to the government related to a pair of drugs, Nitroglycerin Extended Release Capsules (Nitroglycerin ER) and Hyoscyamine Sulfate Extended Release Capsules (Hyoscyamine ER).
Nitroglycerin ER is a single entity coronary vasodilator containing controlled release nitroglycerin that was used for treating angina pectoris (chest pain due to lack of oxygen supply to the heart muscle). Hyoscyamine Sulfate ER is an antispasmodic medication that has been used to treat various stomach, intestinal and urinary tract disorders that involve cramps, colic or other painful muscle contractions. While the active ingredients in Nitroglycerin and Hyoscyamine Sulfate ER had been in products on the market for many years, the Food and Drug Administration (FDA) made determinations in the late 1990s that resulted in the drugs being ineligible for reimbursement by government health care programs such as Medicaid.
The United States alleges that Ethex misrepresented the regulatory status of both drugs and failed to advise CMS that these unapproved drugs did not qualify for coverage under federal health care programs. As a result, the government contends, Ethex knowingly caused false claims to be submitted for Nitroglycerin ER and Hyoscyamine Sulfate ER. Ultimately, neither drug ever received full regulatory approval for safety and effectiveness, and neither product is currently on the market.
“Today’s settlement underscores our commitment to pursuing pharmaceutical companies that allegedly provide false information to obtain taxpayer dollars for unapproved and ineffective drugs,” said Tony West, Assistant Attorney General for the Justice Department’s Civil Division.
“This False Claims Act agreement shows that the Department of Justice will not allow manufacturers to evade the drug approval process and expect the government to pay for less than effective drugs,” said Carmen Ortiz, U.S. Attorney for the District of Massachusetts.
“This settlement sends a strong message to those who seek to put the health of American patients at risk by distributing and promoting drugs which have not been approved by the FDA,” said Ilisa Bernstein, acting director of the Office of Compliance in FDA's Center for Drug Evaluation and Research.
The settlement resolves allegations against Ethex in a multi-defendant whistleblower actions captioned United States ex rel. Constance Conrad v. Ethex Corp., et al., No. 02-11738-RWZ (D. Mass.). The federal share of the settlement is $10,158,695, and the state Medicaid share of the settlement is $6,841,305. The lawsuits were brought under the qui tam, or whistleblower, provisions of the False Claims Act, which allow private parties with knowledge of fraud to sue on behalf of the United States and share in any recovery. Under the settlement, the whistleblower will receive a total of $1,523,804 from the federal share and additional amounts from the state share.
The case was investigated by the Justice Department’s Civil Division, the U.S. Attorney’s Office for the District of Massachusetts, the Office of Inspector General of the Department of Health and Human Services (HHS) and the FDA.
This resolution is part of the government's emphasis on combating health care fraud and another step for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced by Attorney General Eric Holder and Kathleen Sebelius, Secretary of HHS in May 2009. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover nearly $6.5 billion since January 2009 in cases involving fraud against federal health care programs. The Justice Department's total recoveries in False Claims Act cases since January 2009 are more than $8.5 billion.
Seven Charged in in Florida in $120 Million National Tax Fraud SchemeRead the Press Release
WASHINGTON – Seven individuals have been charged with participating in filing false tax returns that resulted in a $120 million tax fraud scheme, the Justice Department announced today. Penny Jones, a resident of Rigby, Idaho; Christopher Marrero of Davie, Fla.; Michael D. Beiter, Jr., formerly a resident of Coral Springs, Fla.; David Clum Jr. of Whites Creek, Tenn.; Dale Peters, a resident of San Mateo, Calif., Laura Barel, a resident of Lauderhill, Fla.; and John Michael Smith, Jr. of Hidden Hills, Calif., have been charged with participating in the scheme to file false tax returns.
Jones and Marrero appeared in federal court today in Fort Lauderdale, Fla. Both entered not guilty pleas before U.S. Magistrate Judge Lurana S. Snow. Barel had been previously charged by a criminal complaint in May 2011. Arraignments are pending for Beiter, Clum, Peters and Smith.
According to the indictment, the false return scheme was national in scope, causing the filing of tax returns for at least 180 clients from 30 different states, requesting more than $120 million worth of fraudulent tax refunds. The indictment alleges that the defendants and clients of the scheme collectively filed more than 380 tax returns, mostly from tax year 2008 but also for other tax years, reporting the amount of their personal debt obligations as both income and as federal tax withholding.
The indictment also alleges that the defendants held seminars in Florida and Tennessee in which they recruited potential clients. The indictment and other publicly filed documents allege that clients paid $750 to have defendants prepare a tax return reporting this type of “OID” income, and that clients agreed to share 10 percent of their tax refund with defendants.
Previously, in a separate case in Fayetteville, Ark., a client of the scheme, Philip Butcher, formerly of Rogers, Ark., was charged with filing false claims for tax refunds. According to the indictment in that case, Butcher filed two tax returns reporting his loans as OID income and tax withholding, claiming tax refunds totalling $1,456,696. The Internal Revenue Service (IRS) paid Butcher $672,781.
Jones was previously enjoined by a federal court from preparing tax returns.
If convicted, Jones, Beiter, Clum and Peters each face 215 years in prison, Barel faces 25 years, Marrero faces 30 years and Smith faces 75 years. All of the defendants are also subject to fines and mandatory restitution if convicted.
The announcement was made by Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida; John A. DiCicco, acting Principal Deputy Assistant Attorney General of the Justice Department’s Tax Division; and Jose A. Gonzalez, Special Agent in Charge, IRS-Criminal Investigation (IRS-CI), Miami Office.
These cases were investigated by Special Agents of the IRS - CI. Trial attorneys Jed Silversmith and Jonathan Marx of the Tax Division, and Assistant U.S. Attorney Bertha Mitrani are prosecuting the case.
An indictment is only an accusation and a defendant is presumed innocent until proven guilty beyond a reasonable doubt.
More information about the Tax Division and its enforcement efforts can be found at www.justice.gov/tax.
Owners of Houston Health Care Company Sentenced to Prison for Medicare FraudRead the Press Release
WASHINGTON – Two owners of a Houston durable medical equipment (DME) company were each sentenced to prison today for their roles in a Medicare fraud scheme, announced the Department of Justice, the FBI and the Department of Health and Human Services (HHS).
U.S. District Judge David Hittner in the Southern District of Texas sentenced Kemmie Houston to 63 months in prison and Sharon Beal to 51 months in prison. In addition to their prison terms, Houston and Beal were sentenced to two years of supervised release and were ordered to pay $403,704 in restitution, jointly and severally.
Beal, 48, and Houston, 43, pleaded guilty in June 2011 to one count of conspiracy to commit health care fraud.
According to court documents, Beal and Houston owned and operated STK Consultants. STK maintained a Medicare provider number to submit Medicare claims for the costs of DME and purported to provide orthotics, power wheelchairs, power wheelchair accessories and other DME to Medicare beneficiaries. According to court documents, Beal and Houston caused STK to submit claims to Medicare for DME that was medically unnecessary and/or not provided, including orthotic devices that were components of “arthritis kits.” The arthritis kit generally contained a number of devices including braces for both sides of the body and related accessories such as heat pads. In total, from August 2005 through August 2010, STK submitted approximately $851,212 in fraudulent claims to Medicare.
The sentences were announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney Kenneth Magidson of the Southern District of Texas; Special Agent-In-Charge Stephen L. Morris of the FBI’s Houston Field Office; Special Agent-in-Charge Mike Fields of the Dallas Regional Office of HHS’s Office of the Inspector General (HHS-OIG) and the Texas Attorney General’s Medicaid Fraud Control Unit (MFCU).
The case was prosecuted by Trial Attorney Laura M.K. Cordova and Assistant Chief Sam S. Sheldon of the Criminal Division’s Fraud Section. The case was brought as part of the Medicare Fraud Strike Force, supervised by the U.S. Attorney’s Office for the Southern District of Texas and the Criminal Division’s Fraud Section.
Since their inception in March 2007, Medicare Fraud Strike Force operations in nine 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.
New Zealand Fishing Company Indicted for Enviromental Crimes and Obstruction of JusticeRead the Press Release
WASHINGTON – A federal grand jury in Washington, D.C., has returned a seven-count indictment charging Sanford Ltd. with violating the Act to Prevent Pollution from Ships (APPS), conspiracy and obstruction of justice, announced Assistant Attorney General Ignacia S. Moreno and United States Attorney Ronald C. Machen Jr.
Sanford Ltd. is a New Zealand based company that operates the Fishing Vessel (F/V) San Nikunau, a vessel that routinely delivers tuna to a cannery in American Samoa. The indictment describes a conspiracy where the crew of the vessel routinely discharged oily bilge waste from the vessel directly into the sea during its fishing voyages since at least 2007. Sanford Ltd. was also charged with violating the APPS for failing to accurately maintain an oil record book for the vessel and with obstruction of justice for presenting false documents and deceiving the Coast Guard during an inspection.
If convicted, Sanford Ltd. could be fined up to $500,000 per count or twice the gross gain or loss that resulted from the criminal conduct. The indictment also seeks criminal forfeiture from Sanford Ltd. of more than $24 million for proceeds derived by Sanford Ltd. as a result of the criminal conduct.
An indictment is merely a formal charge that a defendant has committed a violation of criminal laws and every defendant is presumed innocent until and unless proven guilty.
This case was investigated by the U.S. Coast Guard. The case is being prosecuted by the U.S. Attorney's Office for the District of Columbia and by the Environmental Crimes Section of the Environment and Natural Resources Division of the Department of Justice.
Justice Department Settles with Kentucky Apartment Complex Involving Allegations of Disability-based Housing DiscriminationRead the Press Release
The Justice Department today announced a settlement of its lawsuit against the owners, developers, architect and civil engineers of Park Place Apartments, a 276-unit complex in Louisville, Ky., resolving allegations that those involved in the design and construction of the complex discriminated against people with disabilities. Under the settlement, which must still be approved by a federal district judge in Louisville, the defendants will pay all costs related to making the apartment complex accessible to persons with disabilities and pay $275,000 to compensate 29 individuals who have been harmed by the inaccessible housing.
“The Fair Housing Act requires equal access to housing for persons with disabilities,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division, “and this comprehensive resolution will ensure equal access at this apartment complex and compensate those injured by the defendants’ failure to provide accessible housing.”
“Our office is committed to ensuring that all Kentucky residents have equal access to housing,” stated David J. Hale, U.S. Attorney for the Western District of Kentucky. “We will continue to build on our record of enforcing fair housing laws and remove these barriers that are discriminatory to Kentuckians with disabilities.”
The defendants responsible for the payments and retrofits are Kevin Cogan, Doris Cogan, Edwynn Burkle, George Clark, the Estate of James A. Hall, A. Bayus Inc., Mindel Scott & Associates Inc. +and A. Stanley Willett. The retrofitting includes modifying walkways, removing steps, providing accessible curb ramps and providing accessible walks to site amenities, such as the clubhouse, pool, mailbox and trash facilities. It also requires the defendants to reconfigure thermostats and outlets to accessible heights, increase door widths and reconfigure bathrooms and kitchens.
The lawsuit arose from a complaint that was filed with the Department of Housing and Urban Development (HUD) by a former resident of Park Place Apartments, who is represented by the Lexington Fair Housing Council, a Kentucky-based non-profit organization that enforces federal, state and local fair housing laws. HUD referred the matter to the Justice Department, which conducted its own investigation and subsequently filed the lawsuit in August 2010.
The federal Fair Housing Act prohibits discrimination in housing based on race, color, religion, national origin, sex, disability and familial status. More information about the Civil Rights Division and the laws it enforces is available at www.justice.gov/crt . Individuals who believe that they may have been victims of housing discrimination can call the Housing Discrimination Tip Line at 1-800-896-7743, email the Justice Department at [email protected] , or contact HUD at 1-800-669-9777.
Justice Department Files Lawsuit Alleging Immigration-Related Employment Discrimination by University of California, San Diego Medical CenterRead the Press Release
WASHINGTON – The Department of Justice announced today the filing of a lawsuit against the University of California, San Diego Medical Center, alleging that the medical center discriminated in the employment eligibility verification process against people who are authorized to work in the United States.
The department’s independent investigation revealed that the medical center engaged in a pattern or practice of subjecting newly hired non-U.S. citizens to excessive demands for documents issued by the Department of Homeland Security in order to verify and re-verify their employment eligibility, but did not require U.S. citizens to show any specific documentation. The Immigration and Nationality Act’s (INA) anti-discrimination provision prohibits employers from placing additional documentary burdens on work-authorized employees during the hiring and employment eligibility verification process based on their citizenship status or national origin.
“All workers who are authorized to work in the United States have the right to work 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 committed to vigorously protecting authorized workers from discrimination in the hiring process and ensuring that employers uphold their obligations under the law.”
The complaint seeks a court order prohibiting future discrimination by the respondent, monetary damages for any individuals harmed by the respondent’s actions, and civil penalties.
The Civil Rights Division’s Office of Special Counsel for Immigration-Related Unfair Employment Practices (OSC) is responsible for enforcing the anti-discrimination provision of the INA, which protects work-authorized individuals against discrimination in hiring, firing and recruitment or referral for a fee on the basis of citizenship status and national origin. The INA also protects all work-authorized individuals from discrimination in the employment eligibility verification process and from retaliation.
The United States is represented in this matter by Luz V. Lopez-Ortiz and Ronald Lee, OSC Trial Attorneys.
For more information about protections against employment discrimination under federal immigration law, call OSC’s worker hotline at 1-800-255-7688 (1-800-237-2515, TDD for hearing impaired), OSC’s employer hotline at 1-800-255-8155 (1-800-237-2515, TDD for hearing impaired), or 202-616-5594; e-mail [email protected]; or visit OSC’s website at www.justice.gov/crt/about/osc.
Ivory Smuggler Pleads Guilty in New YorkRead the Press Release
WASHINGTON – Lin Feng Xu, 31, an antique dealer in China, has pleaded guilty to smuggling and to violating the Endangered Species Act in connection with the illegal export of African elephant ivory in his carry-on luggage.
According to documents filed in federal court in Brooklyn, N.Y., today, a Transportation Security Administration (TSA) security officer at JFK International Airport in Queens, N.Y., alerted inspectors with the U.S. Fish & Wildlife Service on Sept. 17, 2011, that Xu, a Chinese national, was carrying suspected wildlife items in his carry-on luggage based on x-ray screening. When questioned about 18 carved art objects apparently made of ivory, Xu initially stated that he did not know what they were made from and that they had been purchased for approximately $3,000 to 4,000 at U.S. auction houses. In pleading guilty, Xu has admitted that he knew that the carvings were ivory and that they had a value of approximately $50,000. Also, Xu knew that it was a crime to export ivory from the United States without required documents and approval, according to papers filed in Court. Xu packed the ivory carvings in aluminum foil in order to conceal their outline from x-ray screening.
According to an expert examination of the ivory carvings, most are newly carved ivory and not genuine antiques. The African elephant is listed as a threatened species under the U.S. Endangered Species Act (ESA) and is also protected by the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES), an international treaty regulating trade on endangered species to which the United States is a party. The global demand for antiques and art made of or containing elephant ivory is believed to have resulted in a significant impact on the species and given life to a thriving black market. Despite international efforts to control the ivory trade and stop the decline of elephant populations, prices and demand remain high, thus causing continued elephant poaching and illegal ivory finding its way into international and domestic markets.
Xu was charged with a felony count for illegal smuggling that carries a maximum term of 10 years in prison and a fine of up to $250,000 or twice the gross gain from the offense. Xu was also charged with a misdemeanor violation of the ESA for knowingly engaging in trade of ivory specimens, contrary to the provisions of CITES, which carries a maximum sentence of one year in prison and a fine of up to $100,000, or twice the gross gain from the crime.
The Xu investigation was conducted by Special Agents of the U.S. Fish & Wildlife Service, Northeast Regional Office of Law Enforcement, with assistance from U.S. Fish & Wildlife Service Wildlife Inspectors, U.S. Immigration and Customs Enforcement, and the TSA. The case is being prosecuted by Senior Trial Attorney Richard A. Udell of the U.S. Department of Justice Environmental Crimes Section, Environment and Natural Resources Division, and Assistant U.S. Attorney Doug Pravda of the U.S. Attorney’s Office for the Eastern District of New York.
Former Worth County, Missouri, Sheriff Sentenced for Violating Civil Rights of Eight WomenRead the Press Release
The Department of Justice announced today that Neal Wayne “Bear” Groom, former sheriff in Worth County, Mo., was sentenced in Kansas City, Mo., for violating the civil rights of eight women while he was working as a law enforcement officer. On Aug. 17, 2011, Groom pleaded guilty to coercing the women to expose parts of their bodies to him, in violation of the Fourth Amendment prohibition against unreasonable searches. Magistrate Judge Sarah W. Hays sentenced Groom to 18 months in prison and one year of supervised release for the eight counts of conviction.
As part of the plea, Groom admitted that while he was sheriff of Worth County, he coerced the women into exposing unclothed parts of their bodies to him and that he photographed several of the women’s exposed or partially covered breasts. Groom mostly used the guise of checking the women for injuries related to domestic violence assaults or checking them for evidence of drug injections to coerce them into revealing different parts of their bodies to him. Groom admitted that he conducted the searches for no legitimate law enforcement purpose.
“The conduct in this case was particularly egregious in that it targeted potential victims of crime,” stated Assistant Attorney General for the Civil Rights Division Thomas E. Perez. “There is no place for such abuse of power in law enforcement, and the Department of Justice will continue to investigate and prosecute these cases across the country.”
U.S. Attorney for the Western District of Missouri Beth Phillips said, “We will not tolerate law enforcement officers who take advantage of the individuals whom they are sworn to protect. Such individuals shake the public’s confidence in law enforcement and thus harm not only the victims they target but also the community at large.”
This case was investigated by the FBI and the Missouri State Highway Patrol, and is being prosecuted by Assistant U.S. Attorney David M. Ketchmark from the U.S. Attorney’s Office and Trial Attorney Shan Patel from the Civil Rights Division of the Department of Justice.
Doctor and Two Nurses Sentenced to Prison for Roles in $25 Million Miami Health Care Fraud SchemeRead the Press Release
WASHINGTON – Two nurses and a doctor were sentenced yesterday in Miami federal court 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 following defendants were sentenced by U.S. District Judge Joan A. Lenard in Miami:
- Jose Nunez, 63, a medical doctor, was sentenced to 40 months in prison and was ordered to pay $1.1 million in restitution.
- Luisa Morciego, 40, a registered nurse, was sentenced to 24 months in prison and was ordered to pay $296,000 in restitution.
- Eneida Fry, 46, a licensed practical nurse, was sentenced to 24 months in prison and was ordered to pay $395,000 in restitution.
Nunez, Morciego and Fry were also each sentenced to three years of supervised release. The defendants were ordered to pay restitution jointly and severally with the co-defendants in this case and in a separate but related Medicare fraud case.
Morciego, Nunez and Fry each pleaded guilty to one count of conspiracy to commit health care fraud.
According to plea documents, Nunez was a medical doctor at two Miami-area medical offices that he owned and operated. Nunez referred patients to ABC Home Health Care Inc. and Florida Home Health Care Providers Inc., Miami home health care agencies that purported to provide home health and therapy services to Medicare beneficiaries. According to court documents, ABC and Florida Home Health billed the Medicare program for expensive physical therapy and home health services that were not medically necessary and/or never provided. Prescriptions, plans of care (POCs) and medical certifications for medically unnecessary therapy and services were issued through Nunez’s offices and other doctors’ offices in return for kickbacks and bribes. Nunez falsified patient files with descriptions of non-existent medical conditions, such as hand tremors, unsteady gait and poor vision, to make it appear that beneficiaries qualified for home health and therapy services.
From approximately January 2006 through March 2009, Nunez referred approximately 43 Medicare beneficiaries for medically unnecessary services to ABC and Florida Home Health. The medically unnecessary referrals, POCs and medical certifications resulted in approximately $1.5 million in fraudulent billings to Medicare, of which approximately $1.1 million was paid.
According to court documents, Morciego and Fry worked at ABC and Florida Home Health. Morciego and Fry, along with their co-defendant nurses, falsified patient files for Medicare beneficiaries to make it appear that the beneficiaries qualified for home health care and therapy services, when, in fact, they did not. Morciego, Fry and their co-defendant nurses did so by, among other things, describing in the nursing notes and patient files symptoms that were nonexistent. Morciego and Fry knew that these files were falsified to bill Medicare for unnecessary services, which they knew was in violation of federal criminal laws.
Fry’s additional role in the scheme was to recruit Medicare beneficiaries who would allow ABC and Florida Home Health to bill Medicare for services that were medically unnecessary and/or never provided. Fry solicited and received kickbacks and bribes from the owners and operators of ABC and Florida Home Health in return for allowing the agencies to bill Medicare on behalf of the recruited patients. Fry knew that the patients she recruited did not qualify for the services billed to Medicare and that their files were falsified to make it appear that they did qualify for the services.
As a result of Morciego’s and Fry’s participation in the illegal scheme, the Medicare program was billed approximately $296,000 and $395,000, respectively, for purported home health care services that were unnecessary and/or never provided.
The sentences were announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida; 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 .
Detroit-Area Clinic Owner Pleads Guilty in Connection with Medicare Fraud SchemeRead the Press Release
WASHINGTON – A clinic owner pleaded guilty today for her participation in a Detroit-area Medicare fraud scheme, announced the Department of Justice, the FBI and the Department of Health and Human Services (HHS).
Dora Binimelis, 53, of Miami, pleaded guilty before U.S. District Judge Arthur J. Tarnow in the Eastern District of Michigan to one count of conspiracy to commit health care fraud. At sentencing, Binimelis faces a maximum penalty of 10 years in prison and a $250,000 fine.
According to the plea documents, Binimelis was an owner of Blessed Medical Clinic, which purported to be a medical clinic that specialized in diagnostic testing. Binimelis admitted that the clinic defrauded Medicare by billing for expensive and medically unnecessary tests. The owners and operators of Blessed paid patient recruiters, who paid cash bribes to Medicare beneficiaries. In exchange for the cash bribes, the beneficiaries agreed to attend the clinic where they provided their Medicare provider numbers and other information, which was used to bill Medicare for unnecessary tests and services. According to her plea, Binimelis knew that the purpose of the clinic was not to treat sick patients, but to make money by defrauding Medicare. Binimelis provided diagnostic testing equipment and the capital infusion to open Blessed. In exchange for her contributions, she received a share of the Medicare fraud proceeds. According to court documents, Blessed billed Medicare $2.4 million for medically unnecessary diagnostic tests.
Today’s guilty plea was announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney for the Eastern District of Michigan Barbara L. McQuade; Special Agent in Charge Andrew G. Arena of the FBI’s Detroit Field Office; and Special Agent in Charge Lamont Pugh III of the HHS Office of Inspector General’s (OIG) Chicago Regional Office.
This case is being prosecuted by Assistant U.S. Attorney Philip A. Ross of the Eastern District of Michigan, with assistance from Acting Assistant Chief Benjamin D. Singer 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 Eastern District of Michigan.
Since their inception in March 2007, the Medicare Fraud Strike Force operations in nine districts have charged more than 1,140 individuals who collectively have falsely billed the Medicare program for more than $2.9 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.
Alpha Natural Resources Inc. and Department of Justice Reach $209 Million Agreement Related to Upper Big Branch Mine ExplosionRead the Press Release
Alpha Natural Resources Inc. has agreed to make payments and safety investments totaling $209 million in connection with the criminal investigation of the April 5, 2010, explosion at the Upper Big Branch mine (UBB) in Montcoal, W.Va., announced Attorney General Eric Holder, U.S. Attorney R. Booth Goodwin II for the District of West Virginia and officials with the FBI and Department of Labor’s Office of Inspector General.
The explosion at the UBB mine claimed the lives of 29 coal miners and injured two others. At the time of the explosion, the mine was owned by Massey Energy Company, whose operations came under Alpha’s control in a June 1, 2011, merger.
“The tragedy at Upper Big Branch will never be forgotten, and the families affected by it will never be made completely whole again. Today’s agreement represents the largest-ever resolution in a criminal investigation of a mine disaster and will ensure appropriate steps are taken to improve mine safety now and will fund research to enhance mine safety in the future,” said Attorney General Holder. “While we continue to investigate individuals associated with this tragedy, this historic agreement – one of the largest payments ever for workplace safety crimes of any type – will help to create safer work environments for miners in West Virginia and across the country.”
“There should never be another UBB, and this announcement is aimed squarely at that goal. For far too long, we've accepted the idea that catastrophic accidents are an inherent risk of being a coal miner. That mindset is unacceptable,” said U.S. Attorney Goodwin. “Collectively, these requirements will set a new standard for what can and should be done to protect miners. We look forward to a future in which coal mining is as safe as any other occupation.”
As part of the non-prosecution agreement, Alpha will invest at least $80 million in mine safety improvements at all of its underground mines, including those formerly owned by Massey. Alpha will also place $48 million in a mine health and safety research trust, to be used to fund academic and non-profit research that will advance efforts to enhance mine safety. In addition, the company will pay restitution of $1.5 million to each of the families of the 29 miners who died at UBB and to the two individuals who were injured, for a total restitution payment of $46.5 million. Alpha also will pay a total of up to $34.8 million in penalties owed to the Mine Safety and Health Administration (MSHA), including all penalties that arise from the UBB accident investigation.
The remedial safety measures included in the agreement include the following:
- Installation of digital monitoring systems in all its underground mines to continuously monitor compliance with ventilation requirements and to ensure mines are free of potentially explosive methane gas;
- Implementation of a plan to ensure that each of its underground mines has the personnel and resources necessary to meet all legal requirements concerning incombustible material and accumulations of coal dust and loose coal;
- Purchase state-of-the-art equipment to monitor its mines for explosive concentrations of coal dust and use that equipment in all its underground mines;
- Purchase next-generation rock dusting equipment (pending MSHA approval), further enhancing its ability to combat explosion hazards;
- Installation of oxygen cascading systems to help miners make their way to safety if a serious accident should occur; and
- Building of a state-of-the-art training facility and implementation of a full training curriculum to train Alpha miners, which will be available to other mining companies.
The agreement announced today is the largest-ever resolution in a criminal investigation of a mine disaster. It addresses only the corporate criminal liability of the former Massey, not potential criminal charges for any individual. The criminal investigation of individuals associated with Massey remains ongoing.
Monday 5 December 2011
Two New Jersey Men Charged with Allegedly Trafficking Counterfeit PerfumeRead the Press Release
WASHINGTON – Two New Jersey men were charged in an indictment unsealed on Dec. 1, 2011, in the Eastern District of New York for their alleged roles in a conspiracy to import and traffic in counterfeit perfume, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney Loretta E. Lynch of the Eastern District of New York.
Sanjay Anandani, 34, of Clinton, N.J., was arrested on Dec. 1, 2011, in Secaucus, N.J., and made his initial appearance before U.S. Magistrate Judge Robert M. Levy in the Eastern District of New York. Rohit Rohit, 28, of Edgewater, N.J., surrendered to authorities on Dec. 2, 2011, and made his initial appearance before U.S. Magistrate Judge Cheryl L. Pollack in the Eastern District of New York.
According to the indictment, Anandani and Rohit conspired with each other and others to traffic in counterfeit perfume. The indictment alleges that Anandani and Rohit imported three shipping containers with counterfeit perfume during 2009 and 2010, as well as 4,600 fragrance boxes bearing counterfeit perfume trademarks.
The two-count indictment filed in the Eastern District of New York charges each defendant with conspiracy to traffic in counterfeit goods and trafficking in counterfeit goods. The conspiracy charge carries a maximum penalty of five years in prison and a $250,000 fine. The trafficking charge carries a maximum penalty of 10 years in prison and a $2,000,000 fine.
Criminal indictments are only charges and are not evidence of guilt. All defendants are presumed innocent until and unless proven guilty by proof beyond a reasonable doubt in a court of law.
The indictment 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/.
This case was investigated by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI). The case is being prosecuted by Senior Counsel Jason Gull of the Computer Crime and Intellectual Property Section of the Justice Department’s Criminal Division.
The ICE HSI-led National Intellectual Property Rights Coordination Center (IPR Center) is one of the U.S. government’s key weapons in the fight against criminal counterfeiting and piracy. The IPR Center uses the expertise of its 19 member agencies to share information, develop initiatives, coordinate enforcement actions, and conduct investigations related to IP theft. Through this strategic interagency partnership, the IPR Center protects the public's health and safety, the U.S. economy and the war fighters. To report IP theft or to learn more about the IPR Center, visit www.IPRCenter.gov.
Friday 2 December 2011
Statement of the Department of Justice's Antitrust Division on Its Decision to Close Its Investigation of Google Inc.'s Acquisition of Admeld Inc.Read the Press Release
WASHINGTON – The Department of Justice’s Antitrust Division issued the following statement today after announcing the closing of its investigation into the proposed acquisition of Admeld Inc., an online display advertising service provider, by Google Inc.:
“The Antitrust Division obtained extensive information from Google, Admeld and a wide range of market participants in connection with its merger investigation of the proposed transaction. After a thorough review of the evidence, the division concluded that the transaction is not likely to substantially lessen competition in the sale of display advertising.
“Although the Antitrust Division concluded that this particular transaction was unlikely to cause consumer harm, the division will continue to be vigilant in the enforcement of the antitrust laws to protect competition in display and other forms of online advertising.
“The division’s investigation focused on the potential effect of the proposed transaction on competition in the display advertising industry. Both Google and Admeld provide services and technology to web publishers that facilitate the sale of those publishers’ display advertising space. Google is a diversified software company whose offerings for publishers include an advertising exchange, an advertising network and an ad server. Admeld operates a supply-side platform (SSP) that helps publishers optimize the yield from their display advertising inventory.
“The investigation determined that web publishers often rely on multiple display advertising platforms and can move business among them in response to changes in price or the quality of ad placements. This use of multiple display advertising platforms, commonly called “multi-homing,” lessens the risk that the market will tip to a single dominant platform. In addition, there have been recent SSP and advertising exchange entrants in the display advertising industry. These were significant considerations in the division’s decision to close the investigation.
“Given Google’s significant presence in search, as previously noted during our 2010 investigation involving Microsoft/Yahoo! and 2008 investigation involving Google/Yahoo!, the Antitrust Division also carefully evaluated whether Google’s acquisition of Admeld would enable Google to extend its market power in the Internet search industry to online display advertising through anticompetitive means. The division will continue to rigorously enforce the antitrust laws to ensure that transactions affecting evolving markets such as display and other forms of online advertising, as well as search, do not inhibit competition or innovation in any way.
“Google Inc., based in Mountain View, Calif., operates the largest Internet search engine in the world and one of the largest display advertising platforms. Google derives revenue primarily from advertising, both as a publisher itself and as an intermediary between advertisers and other publishers. Aside from advertising-related products, Google’s software offerings include a smartphone operating system, web-based email and mapping programs. In 2010, Google had revenues of approximately $29 billion.
“Admeld Inc., established in 2007 and based in New York City, operates one of the largest SSPs in the display advertising industry. Admeld offers a combination of services that include usage of its own advertising exchange, facilitating interaction with advertising networks and general advisory services. In 2010, Admeld raised approximately $30 million.”
The division provides this statement under its policy of issuing statements concerning the closing of investigations in appropriate cases. This statement is limited by the division’s obligation to protect the confidentiality of certain information obtained in its investigations. As in most of its investigations, the division’s evaluation has been highly fact-specific, and many of the relevant underlying facts are not public. Consequently, readers should not draw overly broad conclusions regarding how the division is likely in the future to analyze other collaborations or activities, or transactions involving particular firms. Enforcement decisions are made on a case-by-case basis, and the analysis and conclusions discussed in this statement do not bind the division in any future enforcement actions. Guidance on the division’s policy regarding closing statements is available at www.justice.gov/atr/public/closing/index.html.
New Guidance Supports Voluntary Efforts to Promote Diversity and Reduce Racial Isolation in EducationRead the Press Release
WASHINGTON – Today, the Departments of Justice and Education released two new guidance documents – one for school districts and one for colleges and universities – detailing the flexibility that the Supreme Court has provided to educational institutions to promote diversity and, in the case of elementary and secondary schools, reduce racial isolation among students within the confines of the law.
The guidance makes clear that educators may permissibly consider the race of students in carefully constructed plans to promote diversity or, in K-12 education, to reduce racial isolation. It recognizes the learning benefits to students when campuses and schools include students of diverse backgrounds.
“Diverse learning environments promote development of analytical skills, dismantle stereotypes, and prepare students to succeed in an increasingly interconnected world,” said Attorney General Eric Holder. “The guidance announced today will aid educational institutions in their efforts to provide true equality of opportunity and fully realize the promise of Brown v. Board of Education.”
“Racial isolation remains far too common in America’s classrooms today and it is increasing,” said Education Secretary Arne Duncan. “This denies our children the experiences they need to succeed in a global economy, where employers, co-workers, and customers will be increasingly diverse. It also breeds educational inequity, which is inconsistent with America’s core values.”
The guidance is primarily based on three Supreme Court decisions, Parents Involved in Community Schools v. Seattle School District No. 1 , Grutter v. Bollinger and Gratz v. Bollinger , which specifically addressed the consideration of race by educational institutions. In addition, the guidance provides numerous examples of options that schools and postsecondary institutions can consider to further diversity or reduce racial isolation. For K-12 schools, the guidance discusses school and program siting, drawing school attendance boundaries, grade realignment and restructuring feeder patterns, among other options. The guidance for postsecondary institutions describes how race can be taken into account in admissions, in pipeline programs, in recruitment, and in mentoring, tutoring, retention and support programs as efforts to achieve diversity.
The guidance lays out legal standards under the Equal Protection Clause of the Fourteenth Amendment and Titles IV and VI of the Civil Rights Act of 1964, which are enforced by the Departments. Previous guidance issued by the Bush Administration in 2008 is being withdrawn today.
To review the guidance, please visit: www.justice.gov/crt/about/edu/guidance.php .
For more information about the Department of Education’s Office for Civil Rights, please visit www2.ed.gov/about/offices/list/ocr/index.html?src=oc . For more information about the Educational Opportunities Section of the Department of Justice’s Civil Rights Division, please visit www.justice.gov/crt/edo/ .
Former Chicago Police Officer Pleads Guilty to Racketeering and Related Charges for Involvement with Latin Kings GangRead the Press Release
WASHINGTON – Antonio C. Martinez Jr., 40, a former Chicago police officer, pleaded guilty today to racketeering conspiracy and related charges, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney David Capp of the Northern District of Indiana.
Martinez pleaded guilty before U.S. District Judge Rudy Lozano to conspiracy to commit racketeering activity; conspiracy to distribute more than five kilograms of cocaine and more than 1,000 kilograms of marijuana; robbery; and using a firearm while committing these federal crimes. Martinez was charged, along with 14 additional defendants, in a third superseding indictment unsealed on Nov. 18, 2011. To date, 21 individuals, including Martinez, have been charged for crimes related to their membership or association with the Almighty Latin Kings and Queen Nation (Latin Kings) gang.
Martinez admitted that he committed a series of robberies from 2004 to 2006 at the direction of the Latin Kings, using his position as a Chicago police officer to facilitate the robberies. Martinez admitted that he was wearing his Chicago Police Department badge and department-issued weapon when he committed the robberies, which included those of drug traffickers in Rockford, Ill.; Chicago; and East Chicago, Ind. In one instance, Martinez admitted to participating in the armed robbery at the home of a deceased Latin Dragon gang leader in Hammond, Ind. In addition, Martinez admitted that he picked up and delivered packages of cocaine on multiple occasions for two Latin Kings leaders.
Sentencing is scheduled for June 14, 2012. At sentencing, Martinez faces a maximum penalty of life in prison.
The investigation of Martinez was conducted by the Chicago City Public Corruption Task Force, a Chicago Police Department- Internal Affairs and FBI Chicago law enforcement initiative. The investigation of the remaining defendants was conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives; the Drug Enforcement Administration; FBI; U.S. Immigration and Custom Office of Homeland Security Investigations; the National Gang Targeting, Enforcement & Coordination Center; the National Gang Intelligence Center; the Chicago Police Department; the East Chicago Police Department; the Griffith, Ind., Police Department; the Hammond Police Department; the Highland, Ind., Police Department; and the Houston Police Department.
The cases are being prosecuted by Trial Attorney Joseph A. Cooley of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorney David J. Nozick of the Northern District of Indiana.