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Tuesday 25 October 2011
Department of Justice Seeks to Recover More Than $70.8 Million in Proceeds of Corruption from Government Minister of Equatorial GuineaRead the Press Release
WASHINGTON – The U.S. government has filed civil forfeiture complaints against approximately $70.8 million in real and personal property, which the government alleges is the proceeds of foreign corruption offenses and was laundered in the United States, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Immigration and Customs Enforcement (ICE) Director John Morton.
An amended civil forfeiture complaint has been unsealed in U.S. District Court in the Central District of California and a separate civil forfeiture complaint was filed today in the District of Columbia. According to the complaints, Teodoro Nguema Obiang Mangue (Nguema) used his position and influence as a government minister for Equatorial Guinea to acquire criminal proceeds through corruption and money laundering, in violation of both Equatoguinean and U.S. law. According to the complaints, Nguema is the son of Teodoro Nguema Obiang Mbasogo (Obiang), the president of Equatorial Guinea.
“The complaints announced today allege that, on a modest government salary, Minister Nguema amassed wealth of over $100 million,” said Assistant Attorney General Breuer. “While his people struggled, he lived the high life – purchasing a Gulfstream jet, a Malibu mansion and nearly $2 million in Michael Jackson memorabilia. Alleging that these extravagant items are the proceeds of foreign official corruption, the Department of Justice is seeking to seize them through coordinated forfeiture actions. Through our Kleptocracy Initiative, we are sending the message loud and clear: the United States will not be a hiding place for the ill-gotten riches of the world’s corrupt leaders.”
“This investigation was initiated by ICE Homeland Security Investigations (HSI) in an effort to identify Teodoro Nguema Obiang’s assets in the United States after he was suspected of obtaining his wealth from alleged illicit activities such as the misappropriation of public funds, theft, extortion and embezzlement of the nation’s natural resources,” said ICE Director Morton. “ICE HSI will continue to work with our law enforcement partners both here and abroad to hold these individuals accountable by denying them the enjoyment of their ill-gotten gains.”
According to the complaints, despite an official government salary of less than $100,000 per year, Nguema amassed more than $100 million during a period in which he and an inner circle of individuals who hold critical positions of political and economic power in Equatorial Guinea were the near-exclusive beneficiaries of the extraction and sale of that country’s natural resources . Under Equatoguinean law, the natural resources belong to the people of Equatorial Guinea. The complaints allege that Nguema used intermediaries and corporate entities to acquire numerous assets in the United States, including more than $1.8 million worth of Michael Jackson memorabilia, a $38.5 million Gulfstream G-V jet, a $30 million house in Malibu, Calif., and a 2011 Ferrari automobile valued at more than $530,000.
The cases are being handled by Senior Trial Attorney Janet C. Hudson and Trial Attorney Woo Lee of the Criminal Division’s Asset Forfeiture and Money Laundering Section. The investigation was conducted by ICE HSI Foreign Corruption Investigations Group and the HSI Asset Identification and Removal Group in Miami, with the assistance of the HSI Office of the Special Agent in Charge for Los Angeles.
The cases originated as part of the Justice Department’s Kleptocracy Asset Recovery Initiative, which targets and recovers the proceeds of foreign official corruption that have been laundered into or through the United States. As part of the initiative, the Justice Department will seek to forfeit and recover stolen funds for the benefit of the people of the country from which it was taken.
In 2003, ICE HSI established the Foreign Corruption Investigations Group in Miami to target corrupt foreign officials around the world that attempt to utilize U.S. financial institutions to launder illicit funds. The group conducts investigations into the laundering of proceeds emanating from foreign public corruption, bribery or embezzlement. The objective is to prevent foreign derived ill-gotten gains from entering the U.S. financial infrastructure, to seize identified assets in the United States and recover these funds on behalf of those affected by foreign official corruption.
Individuals with information about possible proceeds of foreign corruption in the United States, or funds laundered through institutions in the United States, should contact ICE HSI at 866-DHS-2ICE, [email protected] or 802-872-6199 if calling from outside the United States.
Monday 24 October 2011
Utah Man Pleads Guilty for His Role in Procurement Fraud SchemeRead the Press Release
WASHINGTON — A Utah man pleaded guilty today in federal court in Salt Lake City for his role in a bribery and fraud scheme involving federal procurement contracts, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney David B. Barlow for the District of Utah.
Jose Mendez, 50, of Farr West, Utah, pleaded guilty to one count of conspiracy to commit bribery and procurement fraud, one count of bribery and one count of procurement fraud. Mendez was originally charged in an indictment returned on Oct. 12, 2011, along with Sylvester Zugrav, 68, and Maria Zugrav, 66, owners of Atlas International Trading Company in Sarasota, Fla. The Zugravs are each charged with conspiracy to commit bribery and procurement fraud, and bribery.
According to court documents, while Mendez worked as a procurement program manager for the U.S. Air Force at Hill Air Force Base, in Ogden, Utah, he conspired to enrich himself and others by exchanging money and other things of value for non-public information and favorable treatment in the procurement process. According to the statement of facts, Mendez was offered approximately $1,240,500 in payments and other things of value throughout the course of the conspiracy. Mendez admitted that from approximately 2008 to August 2011, he received more than $185,000 in payments and other things of value, with promises of additional bribe payments if Atlas were to receive future contracts from the U.S. government.
In return for the bribes offered and paid, Mendez admitted he gave Atlas and the Zugravs favorable treatment during the procurement process, including disclosing government budget and competitor bid information, which helped Atlas and the Zugravs in winning contracts.
The maximum penalty for conspiracy is five years in prison and a $250,000 fine. The maximum penalty for procurement fraud is five years in prison and a $250,000 fine, while the maximum penalty for bribery is 15 years in prison and a $250,000 fine, or three times the monetary equivalent of the thing of value, whichever is greater. Mendez also faces forfeiture of his ill-gotten gains. Sentencing for Mendez is scheduled for Feb. 21, 2012, at 2:30 p.m.
The case is being investigated by the FBI and the Air Force Office of Special Investigations. The case is being prosecuted by Trial Attorneys Marquest J. Meeks and Edward P. Sullivan of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney Carlos A. Esqueda for the District of Utah.
Las Vegas Attorney Pleads Guilty to Charges Relating to Scheme to Fraudulently Control Condominium Homeowners’ Associations and Scheme to Commit Bank FraudRead the Press Release
WASHINGTON – A Las Vegas attorney pleaded guilty today for his role in a scheme to fraudulently gain control of condominium homeowners’ associations (HOAs) in the Las Vegas area so that the HOAs would direct business to a certain law firm and construction company, and for his role in a scheme to commit bank fraud, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, Special Agent in Charge Kevin Favreau of the FBI Las Vegas Field Office, Sheriff Doug Gillespie of the Las Vegas Metropolitan Police Department and Special Agent in Charge Paul Camacho of the Internal Revenue Service-Criminal Investigation (IRS-CI).
David Amesbury, 57, pleaded guilty before U.S. District Judge James C. Mahan in the District of Nevada to one count of conspiracy to commit mail and wire fraud, and one count of conspiracy to commit bank fraud. Amesbury is the eighth person to plead guilty in connection with the scheme to defraud HOAs in the Las Vegas area. Amesbury also pleaded guilty to participating in a scheme to submit false information to a bank with the intention of obtaining a bank loan for a café in downtown Las Vegas of which he was an owner.
Amesbury admitted that from approximately March 2008 until September 2008, he participated in a scheme to control various HOA boards of directors so that the HOA boards would award the handling of construction-related lawsuits and remedial construction contracts to a law firm and construction company designated by Amesbury’s co-conspirators.
Amesbury admitted that he agreed to run the HOA board elections at the Chateau Nouveau and Pebble Creek condominium complexes in Las Vegas in order to create the appearance that the elections were legitimate and were run by an independent attorney. However, Amesbury admitted he was paid $3,000 by co-conspirators for his assistance in rigging the elections at those HOAs.
Specifically, Amesbury admitted that he allowed the bona fide homeowners at Chateau Nouveau and Pebble Creek to mail their election ballots to his law office under the belief that he would keep them secure until the election. In fact, Amesbury allowed other co-conspirators to have access to the ballots and use his law office for the purpose of opening the ballots and pre-counting the number of votes entered for each candidate. This allowed Amesbury’s co-conspirators to know the number of fake ballots that needed to be created to ensure the co-conspirator up for election won the seat on the HOA board. Amesbury admitted that he ran the boards’ election meetings knowing that he allowed co-conspirators to tamper with the election ballots and that he failed to disclose his relationship to other conspirators to the HOA or its bona fide homeowners.
According to plea documents, the co-conspirators elected to the HOA boards used their positions to hire individuals and companies that would result in a personal financial benefit to the co-conspirators, including the co-conspirator law firm for construction defect litigation, and the co-conspirator construction company for remediation and construction defect repairs.
In connection with the bank fraud charge, Amesbury also admitted that between approximately October 2008 and July 2009, he and his co-conspirators met with loan officers from banks in the Las Vegas area, seeking refinancing of a loan for a breakfast and lunch café located in a downtown Las Vegas office building of which he was part owner. According to court documents, Amesbury failed to inform the banks that another individual operated the café on a day-to-day basis, and of the financial arrangement with that individual.
Amesbury admitted that he and his co-conspirators signed a loan application without informing the bank of the true business arrangement with the café operator, which included false financial statements, knowing that the bank would not issue a loan if the bank knew the true state of affairs.
Amesbury’s sentencing is scheduled for Jan. 23, 2012 at 10 a.m. The maximum sentence for conspiracy to commit mail fraud and wire fraud, as well as conspiracy to commit bank fraud, is 30 years in prison.
The case is being prosecuted by Deputy Chief Charles La Bella and Trial Attorneys Nicole H. Sprinzen and Mary Ann McCarthy of the Criminal Division’s Fraud Section. The case is being investigated by the FBI, IRS-CI and the Las Vegas Metropolitan Police Department, Criminal Intelligence Section.
This prosecution is part of efforts underway by President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. For more information about the task force visit: www.stopfraud.gov .
General Services Administration Employee Sentenced to Prison for Role in Bribery Scheme as Part of Multi-Year Corruption InvestigationRead the Press Release
WASHINGTON — A General Services Administration (GSA) customer service manager was sentenced today to 30 months in prison for his role in a bribery scheme related to payments he received for awarding GSA contracts to various government contractors, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, GSA Inspector General Brian D. Miller and Assistant Director in Charge James W. McJunkin of the FBI’s Washington Field Office. Eric M. Minor, 45, was sentenced by U.S. District Court Judge Ricardo M. Urbina of the U.S. District Court for the District of Columbia, who also ordered him to pay $118,000 in restitution.
Minor pleaded guilty in May 2011 to a one-count criminal information charging him with bribery. According to the information, from approximately October 2007 until November 2010, Minor served as a customer service manager in the District of Columbia and elsewhere. Minor was responsible for coordinating, planning, estimating, contracting and scheduling work for his field office – the Potomac Service Center – which is responsible for federal buildings and federal leased space in Virginia and the National Capital Region. During the relevant period, Minor devised and executed with others a scheme to obtain approximately $118,000 in cash kickback payments for himself from six government contractors in exchange for using his official position to retain their companies to perform maintenance and construction work at GSA facilities that he managed.
This case marks the culmination of a multi-year covert investigation into corruption by government employees and civilian contractors involved in the award and administration of GSA contracts in the Washington, D.C., metro area. The investigation resulted in the conviction of 11 individuals, including Minor, all of whom pleaded guilty to federal criminal offenses including bribery and conspiracy.
“As the result of this multi-year investigation, 11 federal workers and contractors have been convicted for participating in multiple bribery and kickback schemes,” said Assistant Attorney General Breuer. “Instead of serving taxpayers honestly, these government employees and contractors turned to corruption – steering business to favored individuals in exchange for kickbacks and using bribes to secure government contracts. Taxpayers have a right to know that their dollars are being put to good use, not to line the pockets of corrupt federal employees or contractors. We will continue to punish corrupt behavior wherever we find it.”
“For the past five years, our special agents have brought these corrupt officials to justice one by one,” said GSA Inspector General Miller. “The breadth of this network suggests that some officials believe it is okay to line their own pockets at the expense of taxpayers. We will not tolerate this attitude and will aggressively investigate any situation where ‘business as usual’ includes graft and corruption.”
“Today’s sentencing is a reminder that individuals who scheme to defraud the U.S. Government, violate the public’s trust and will be brought to justice,” said Assistant Director in Charge McJunkin of the FBI’s Washington Field Office. “Through the FBI’s liaison with our government partners, we are able to identify these fraudulent improprieties and bring the full force of the government against those who seek to use tax payer dollars for private gain.”
In addition to Minor, each of the following 10 individuals pleaded guilty to federal offenses relating to bribery and kickback schemes in the award and administration of GSA contracts, and each has been sentenced by U.S. District Court Judge Urbina for their illegal activities:
On Feb. 19, 2008, James Fisher pleaded guilty to one count of bribery related to his work as a planner and estimator for GSA at the White House Property Management Center in the District of Columbia. Fisher was sentenced on May 13, 2008, to 18 months in prison and ordered to pay $40,000 in restitution.
On Aug. 19, 2008, William Dodson pleaded guilty to one count of bribery related to his work as a building manager for GSA at the Potomac Annex in the District of Columbia. Dodson was sentenced on Sept. 10, 2009, to 15 months in prison and ordered to pay $26,200 in restitution.
On Oct. 6, 2008, Daniel Money pleaded guilty to one count of bribery related to his work as a government contractor at the U.S. Tax Court in the District of Columbia. Money was sentenced on Feb. 5, 2009, to 30 months in prison and ordered to forfeit $95,000.
On Aug. 14, 2008, Fred Timbol pleaded guilty to one count of conspiracy to defraud the United States related to his work as a facilities services officer at the U.S. Tax Court in the District of Columbia. Timbol was sentenced on March 5, 2009, to 18 months in prison and ordered to pay $24,143 in restitution.
On June 23, 2008, Oscar Flores pleaded guilty to one count of bribery related to his work as a government contractor at the U.S. Tax Court in the District of Columbia. Flores was sentenced on April 12, 2010, to six months of home confinement, three years of probation, and 300 hours of community service and was ordered to pay a $40,000 fine.
On May 12, 2008, Raj Singla pleaded guilty to one count of bribery related to his work as a mechanical engineer at the Wilbur J. Cohen Building in the District of Columbia. Singla was sentenced on May 27, 2010, to five years of probation and six months of home confinement and was ordered to perform 100 hours of community service. He was also ordered to pay a $75,000 fine and restitution of $74,000.
On Feb. 18, 2010, Suresh Malhotra pleaded guilty to one count of bribery related to his work as a general engineer and project manager for GSA in the District of Columbia. Malhotra was sentenced on May 27, 2010, to five years of probation and nine months of home confinement and was ordered to perform 100 hours of community service. He was also ordered to pay a $60,000 fine and restitution of $57,060.
On June 30, 2010, Tarsem Singh pleaded guilty to one count of bribery related to his work as a consultant for a government contractor working at GSA facilities in the District of Columbia. Singh was sentenced on Nov. 1, 2010, to five years of probation and six months of home confinement and was ordered to pay a $30,000 fine.
On Dec. 16, 2010, Narsinh J. Patel pleaded guilty to one count of bribery related to his work as a government contractor at GSA facilities in the District of Columbia. Patel was sentenced on March 10, 2011, to three years of probation, and was ordered to perform 250 hours of community service and pay a $10,000 fine.
On Jan. 29, 2009, Gary Thompson pleaded guilty to one count of bribery related to his work as a building manager for GSA at the Metropolitan Service Center in Maryland. Thompson was sentenced on Aug. 2, 2011, to nine months in prison, and was ordered to perform 100 hours of community service and forfeit $55,000.
This case is being prosecuted by Trial Attorneys Daniel A. Petalas, Richard B. Evans and Peter Koski of the Criminal Division’s Public Integrity Section. The case was investigated by special agents of the GSA-Office of Inspector General and the FBI’s Washington Field Office.
Arlington, Texas, Man Sentenced to 14 Months in Federal Prison for Arson at an Islamic CenterRead the Press Release
WASHINGTON — Henry Clay Glaspell, 34, of Arlington, Texas, was sentenced by U.S. District Judge Terry R. Means to 14 months in federal prison, following his guilty plea in February 2011 to a hate crime charge stemming from an arson of a children’s playground at the Dar El-Eman Islamic Center in Arlington in July 2010, the Justice Department announced today.
Glaspell admitted that he set fire to playground equipment at the mosque as part of a series of ethnically-motivated acts directed at individuals of Arab or Middle Eastern descent associated with the mosque. Glaspell further admitted that he stole and damaged mosque property, threw used cat litter at the front door of the mosque and shouted racial or ethnic slurs at individuals of Arab or Middle Eastern descent at the mosque on multiple occasions.
Judge Means ordered that Glaspell, who has been on bond, surrender to the Bureau of Prisons on Nov. 21, 2011.
“The defendant targeted Arab-Americans at a mosque where families worship peacefully and children play,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The Justice Department is committed to vigorously prosecuting hate crimes against all persons and incidents of this kind will not be tolerated in our country.”
“Religious freedom is one of our most cherished rights, and that right includes the ability to build places of worship and assemble, free from discrimination,” said U.S. Attorney Sarah R. Saldaña of the Northern District of Texas. “This office will continue to prosecute those who commit such reprehensible acts of hatred.”
This case was investigated by Arlington Police Department and the FBI. It was prosecuted by Trial Attorney Victor Boutros from the Justice Department’s Civil Rights Division and Assistant U.S. Attorney Alex Lewis of the Northern District of Texas, with assistance from the Tarrant County District Attorney’s Office.
Friday 21 October 2011
Virginia Woman Sentenced to 24 Months in Prison for Role in Extortion Scheme Involving Staged Kidnapping in GuatemalaRead the Press Release
WASHINGTON – A Virginia woman was sentenced today to 24 months in prison for her role in an extortion scheme involving a staged kidnapping in Guatemala, 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 John V. Gillies, Special Agent in Charge of the FBI’s Miami Division.
Sheena Flores, 34, of Manassas, Va., was sentenced by U.S. District Judge Gerald Bruce Lee in the Eastern District of Virginia. Flores pleaded guilty in August 2011 to one count of transmitting in foreign commerce, with intent to extort money, a communication containing a threat to injure another person. Judge Lee also sentenced Flores to three years of supervised release to follow her prison term and ordered her to pay $3,000 in restitution.
According to court documents, in July 2010, Flores was living in Guatemala with a child under the age of two who was born in Guatemala. Although Flores had no legal custody rights over the child, Flores had been taking care of the child in Guatemala while her husband was making arrangements to legally bring the child to the United States to live with him and Flores.
On July 6, 2010, from Guatemala, Flores contacted a family member in Manassas by telephone and reported that she and the child had been kidnapped by three men and that the men wanted $5,000 in two hours or they were going to kill Flores and the child. At the time that Flores reported the kidnapping and the ransom demands, Flores was attempting to extort money from her family with a hoax kidnapping and false threats, as she and the child had not been kidnapped.
Upon learning of the kidnapping and believing it to be true, the Flores’ family member called law enforcement authorities in Virginia. Shortly thereafter, FBI agents began investigating the kidnapping and members of the FBI’s Crisis Incident Response Group were dispatched to the family member’s house to monitor the situation and assist the family in negotiating with the kidnappers.
Also on July 6, 2010, Flores’ husband, who was in Manassas, received numerous text messages from Flores’ cellular phone in Guatemala, which repeatedly threatened that Flores and the child would be killed if he did not pay $10,000 in ransom by the next day. Believing that his wife and the child had in fact been kidnapped, Flores’ husband wired a partial ransom payment to Guatemala.
According to court documents, Flores enlisted the help of two men whom she believed were members of the violent gang MS-13 to help carry out the fake kidnapping. Flores and the child were found on July 13, 2010, with the assistance of Guatemalan police.
The case is being prosecuted by Assistant U.S. Attorney Rebeca H. Bellows for the Eastern District of Virginia and Trial Attorney James S. Yoon of the Criminal Division’s Human Rights and Special Prosecutions Section. The Criminal Division’s Office of International Affairs provided assistance.
The case was investigated by the FBI’s Miami Division Extraterritorial Squad, with support from the FBI Legal Attaché Office in San Salvador, El Salvador, and the FBI Transnational Anti-Gang Task Force in Guatemala.
United States and Osage Tribe Announce $380 Million Settlement of Tribal Trust LawsuitRead the Press Release
WASHINGTON – The United States has reached a final settlement of a long-running lawsuit by the Osage Tribe of Oklahoma regarding the United States’ accounting and management of the tribe’s trust funds and non-monetary trust assets. Ignacia S. Moreno, Assistant Attorney General of the Justice Department’s Environment and Natural Resources Division; the Interior Department’s Deputy Secretary David J. Hayes, Solicitor Hilary C. Tompkins, and Bureau of Indian Affairs Director Michael S. Black; the Treasury Department’s General Counsel George W. Madison, and the Osage Tribe’s Principal Chief John Red Eagle and other tribal officials commemorated the settlement during a ceremony at the Department of Interior’s headquarters in Washington today.
“This historic settlement resolves with finality long-standing trust accounting and trust management claims by the Osage Tribe,” said Assistant Attorney General Moreno. “This settlement is the outcome of dedicated efforts by the United States and the Osage Tribe to resolve years of costly and protracted litigation. Today, we come together in the spirit of partnership and mutual respect to recognize an important milestone on a path to a future marked by a stronger government-to-government and trust relationship. This settlement demonstrates the United States’ strong commitment to resolving pending tribal trust accounting and trust management cases in an expedited, fair and just manner.”
“Reaching a final settlement with the Osage Tribe has been a priority for this Administration, and it demonstrates President Obama's commitment to reconciliation and empowerment for American Indian nations,” said Interior’s Deputy Secretary Hayes. “The settlement process was fundamental to respecting the government-to-government relationship between the U.S. government and the Osage Tribe. This agreement marks a new beginning – one of just reconciliation, better communication and strengthened management of tribal trust assets.”
“This settlement is an historic, positive development for Indian country and a major step on the road to reconciliation following years of litigation between the Osage Tribe and the United States,” said Interior Solicitor Tompkins. “This administration has worked in good faith to reach a settlement that is both honorable and responsible. The settlement will allow the United States and the Tribe to foster, cultivate and strengthen their trust relationship as they move together into the future.”
Under the negotiated agreement, executed on Oct. 14, 2011, litigation will end regarding the Department of the Interior’s accounting and management of the tribe’s trust accounts, trust lands and other natural resources, including the tribe’s mineral estate. The United States will pay the tribe $380 million to compensate the tribe for its claims of historical losses to its trust funds and interest income as a result of the government’s management of trust assets. The parties also will implement measures that will lead to strengthened management of the tribe’s trust assets and improved communications between the Department of the Interior and the tribe, including procedures for delivery of periodic statements of account, annual audit information, and information relating to the management of the mineral estate to the tribe. Importantly, the agreement also provides dispute resolution provisions to reduce the likelihood of future litigation.
The Osage Tribe brought its trust accounting and trust management lawsuits in the U.S. Court of Federal Claims (CFC) in 1999 and 2000. Also, the tribe brought a trust accounting case in the U.S. District Court for the District of Columbia in 2004 and dismissed that case in 2010. The CFC litigation included numerous motions, extensive discovery, many rulings, and two trials over 12 years. Between 2006 and 2010, the tribe obtained two judgments from the CFC against the United States for about $331 million on various claims spanning the 1972-2000 period. A trial on significant claims remaining in this case was scheduled to begin in February 2012.
Seventh Guilty Plea in Connection with Scheme to Fraudulently Control Condominium Homeowners' AssociationsRead the Press Release
WASHINGTON – A Las Vegas woman pleaded guilty today for her role in a scheme to fraudulently gain control of condominium homeowners’ associations (HOAs) in the Las Vegas area so that the HOAs would direct business to a certain law firm and construction company, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division, Special Agent in Charge Kevin Favreau of the FBI Las Vegas Field Office, Sheriff Doug Gillespie of the Las Vegas Metropolitan Police Department and Special Agent in Charge Paul Camacho of the Internal Revenue Service-Criminal Investigation (IRS-CI).
Mary Ann Watts, 64, pleaded guilty before U.S. District Judge James C. Mahan in the District of Nevada to one count of conspiracy to commit mail and wire fraud. Watts is the seventh person to plead guilty in connection with the scheme to defraud HOAs in the Las Vegas area.
Watts admitted that from approximately the spring of 2006 until February 2009, as an employee or operator of property management companies in Las Vegas, she participated in a scheme to control various HOA boards of directors so that the HOA boards would award the handling of construction-related lawsuits and remedial construction contracts to a law firm and construction company designated by Watts’ co-conspirators.
According to plea documents, to accomplish the scheme, co-conspirators used straw purchasers to obtain mortgage loans for units within HOA communities and managed and operated the payments associated with maintaining the straw properties. The co-conspirator straw purchasers agreed to run for election to the respective HOA boards and were paid in cash, by check or promised things of value for their participation, resulting in a personal financial benefit.
According to plea documents, co-conspirators employed deceitful tactics in their attempts to win the board elections, including creating false phone surveys to gather information about voting intentions, using mailing lists to vote on behalf of out-of-town homeowners unlikely to participate in the elections, and submitting fake or forged ballots. The c o-conspirators also attempted to create the appearance that the elections were legitimate by hiring independent attorneys, or “special election masters,” to run the elections. However, these individuals were paid in cash, by check and promised things of value for their assistance in rigging the elections. Watts admitted that in November 2006, at the direction of co-conspirators, she participated in rigging an HOA election at the Vistana community in Las Vegas by ceding her role in the election as community manager and providing the election ballots to a co-conspirator attorney acting as a “special election master.”
According to court documents, once elected, the co-conspirator board members would meet with other co-conspirators to manipulate board votes, including the selection of property managers, contractors and general counsel for the HOA and attorneys to represent the HOA. The co-conspirators created and submitted fake bids for “competitors” to make the process appear to be legitimate while ensuring co-conspirators were awarded contracts.
According to plea documents, co-conspirator community managers and general counsel were paid in cash, by check or things of value for using their positions to gain inside information and recommend that the HOA board hire a co-conspirator for remediation and construction defect repairs and another co-conspirator for the construction defect litigation. Watts admitted that she employed co-conspirators and failed to disclose their conflict of interest to the HOA, in violation of her fiduciary duties.
Watts admitted that in August 2006, she agreed with other co-conspirators to open a new property management company, which would be owned and controlled by the co-conspirators, for the purpose of managing the HOA board at Vistana, as well as Chateau Versailles, Chateau Nouveau and other condominium complexes around the Las Vegas area. Watts admitted that she lived in a unit at Chateau Nouveau and received several months of free rent from her co-conspirators as a bonus for her participation in the scheme. Watts managed all of the company’s expenses and was reimbursed by a co-conspirator. Watts also admitted that she often issued her co-conspirator checks from the HOA’s account and paid several of the co-conspirators’ employees as if they were employed by the property management company in order to conceal the employees’ relationship with the co-conspirator.
Watts admitted that she also used her position as the community manager to allow co-conspirators to create and review the HOA board meeting agendas before the board meeting, so the co-conspirators could meet with the co-conspirator board members to pre-arrange how they would manipulate the upcoming votes. Watts then allowed her co-conspirators to call her phone to speak with the co-conspirator board members during board meetings in order to conceal their relationship.
Watts recommended that the HOA hire individuals and companies designated by her co-conspirators while concealing her and the company’s relationship with the co-conspirators from the bona fide homeowners. In or around November 2006, Watts, at the direction of a co-conspirator, called an emergency executive board meeting for the purpose of getting the board members’ signatures on the contract that was to award a co-conspirator with the construction defect litigation case before the next HOA board election was held.
Sentencing is scheduled for Jan. 20, 2012, at 10 a.m. The maximum sentence for conspiracy to commit mail fraud and wire fraud is 30 years in prison.
The case is being prosecuted by Deputy Chief Charles La Bella and Trial Attorneys Nicole H. Sprinzen and Mary Ann McCarthy of the Criminal Division’s Fraud Section. The case is being investigated by the FBI; the Las Vegas Metropolitan Police Department, Criminal Intelligence Section; and the IRS-CI.
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.
Pfizer to Pay $14.5 Million for Illegal Marketing of Drug DetrolRead the Press Release
WASHINGTON – American pharmaceutical company Pfizer Inc. has agreed to pay $14.5 million to resolve False Claims Act allegations related to its marketing of the drug Detrol, the Justice Department announced today. The settlement resolves the last of a group of 10 qui tam, or whistleblower, suits that were filed in the District of Massachusetts and two other districts, beginning in 2003. The other nine suits were settled or dismissed in 2009 as part of the government’s global resolution with Pfizer, under which the company agreed to pay $2.3 billion dollars to resolve civil claims and criminal charges regarding multiple drugs.
The current settlement addresses allegations that Pfizer illegally marketed Detrol, a drug for the treatment of overactive bladder, for use in male patients suffering from benign prostatic hypertrophy and several allied conditions, notably lower urinary tract symptoms and bladder outlet obstruction – all uses for which the Food and Drug Administration (FDA) had not approved the drug as safe and effective. Under the terms of the settlement, the $14.5 million recovery will be divided between the United States and participating state Medicaid programs, with $11,878,846 going to the federal government and $2,621,154 going to state Medicaid programs. Under the qui tam provisions of the False Claims Act, whistleblowers will receive a $3,282,019 share of the federal recovery.
“Whistleblowers play an important role in protecting taxpayer funds from fraud and abuse,” said Tony West, Assistant Attorney General of the Justice Department’s Civil Division. “Settlements like this one help maintain the integrity of FDA’s drug approval process and support important federal and state health care programs.”
“The United States is pleased that Pfizer has agreed to resolve the last of the pending cases that were not settled as part of the 2009 resolution and plea,” said Carmen Ortiz, U.S. Attorney for the District of Massachusetts. “We hope and expect that this is indicative of a commitment to move forward in compliance with the law, and we will continue to watch vigilantly to ensure that Pfizer complies with the law in its sales and marketing of drugs sold to the public.”
The case is U.S. ex rel. Wetherholt and Drimer v. Pfizer, which the United States declined to intervene in and was independently litigated by the relators. The United States subsequently participated closely in efforts to resolve the case.
This settlement is part of the government’s emphasis on combating health care fraud and another step for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced by Attorney General Eric Holder and Kathleen Sebelius, Secretary of the Department of Health and Human Services in May 2009. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover more than $6.3 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 exceed $8.1 billion.
Justice Department Sues U.S. FDA Employee and Former N.Y. Corrections Official to Block Alleged Tax-Fraud SchemeRead the Press Release
WASHINGTON - The United States has sued Rodney Chestnut and Nafeesah Hines to bar them from promoting an alleged tax fraud scheme, the Justice Department announced today. According to the civil injunction complaint, the scheme is based on a frivolous “redemption” theory, which promoters falsely claim allows taxpayers to obtain funds from supposed secret U.S. Treasury accounts. Scheme participants allegedly use Internal Revenue Service (IRS) forms, including Forms 1099-OID and 1099-A, to report large amounts of fictitious income tax withholding, in order to claim large tax refunds.
According to the complaint, Chestnut, of Middle Island, N.Y., is a former corrections captain who promotes the scheme and recruits participants, including some of his former co-workers at the New York City Department of Corrections. He allegedly prepares tax returns for his customers that fraudulently claim huge tax refunds based on the redemption theory.
The complaint also states that Hines, of Jamaica, N.Y., is an employee of the U.S. Food and Drug Administration who prepares or files false forms with the IRS, both for Chestnut’s customers as well as for others. According to the complaint, in 2009 and 2010 Hines prepared or filed more than 3,000 fraudulent forms that falsely reported over $54 million of purportedly withheld income taxes.
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.
Justice Department Requires Divestitures in Grupo Bimbo S.A.B. De C.V. and BBU Inc.'s Acquisition of the North American Fresh Bakery Business of the Sara Lee CorporationRead the Press Release
WASHINGTON — The Department of Justice announced today that it has reached a settlement with Grupo Bimbo S.A.B. de C.V., BBU Inc. and the Sara Lee Corporation that requires them to divest brands of sliced fresh bread and associated assets, in order to proceed with Grupo Bimbo and BBU’s acquisition of Sara Lee’s North American Fresh Bakery business. The department said that the acquisition, as originally proposed, would substantially lessen competition in the sale of bagged, sliced fresh bread sold in retail stores in the metropolitan and surrounding areas of San Diego, Los Angeles, San Francisco and Sacramento, Calif.; Kansas City, Kan.; Oklahoma City; Omaha, Neb.; and Harrisburg/Scranton, Penn.
BBU and Sara Lee are respectively the largest and third largest bakers and sellers of sliced fresh bread in the United States. BBU sells sliced bread and baked products under a variety of trade names, including Arnold, Oroweat, Brownberry, Thomas’, Entenmann’s, Boboli, Freihofer’s and Stroehmann’s. Sara Lee sells sliced bread under trade names that include the Sara Lee brand family (including Sara Lee, Sara Lee Classic, Sara Lee Soft & Smooth, Sara Lee Hearty & Delicious and Sara Lee Delightful) and EarthGrains.
The Antitrust Division filed a civil lawsuit today in U.S. District Court in Washington, D.C., to prevent Grupo Bimbo and BBU from acquiring Sara Lee’s North American Fresh Bakery business. At the same time, the department filed a proposed settlement that, if approved by the court, would resolve the competitive concerns alleged in the lawsuit.
“BBU and Sara Lee’s North American Fresh Bakery business aggressively compete head-to-head for sliced fresh bread sold in retail stores,” said Sharis A. Pozen, Acting Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. “Without the divestitures required by the department in eight geographic markets, the combination of BBU and Sara Lee’s North American Fresh Bakery business would likely lead to millions of Americans paying higher prices for sliced fresh bread.”
According to the complaint, Grupo Bimbo and BBU’s acquisition of Sara Lee’s North American Fresh Bakery business would substantially increase concentration in various geographic markets for the sale of fresh bread and eliminate substantial head-to-head competition between BBU and Sara Lee for sliced fresh bread sold in retail stores. BBU and Sara Lee compete for shelf and display space in retailers’ stores by, among other things, offering lower wholesale prices and larger promotional discounts, which lower the prices paid by consumers of sliced bread.
According to the complaint, in the San Diego, Los Angeles, Sacramento and Harrisburg/Scranton areas, BBU and Sara Lee are the two largest sellers of sliced bread. In the San Francisco area, BBU is the largest seller of sliced bread and Sara Lee is the third largest. In the Kansas City and Omaha areas, Sara Lee and BBU are respectively the first and third largest sellers of sliced bread; in the Oklahoma City area, Sara Lee and BBU are respectively the first and fourth largest. In the eight relevant geographic areas, BBU’s post-merger share would range from approximately 52 to 63 percent, with the combination resulting in highly concentrated markets. The department said that the loss of competition likely would have resulted in higher bread prices.
Under the proposed settlement, the companies must divest the rights to sell Sara Lee’s EarthGrains brand and brands in the Sara Lee family (Sara Lee, Sara Lee Classic, Sara Lee Soft & Smooth, Sara Lee Hearty & Delicious and Sara Lee Delightful) in the state of California; Sara Lee’s EarthGrains brand and BBU’s Mrs Baird’s brand in the Kansas City area; Sara Lee’s EarthGrains brand in the Oklahoma City area; Sara Lee’s EarthGrains and Healthy Choice brands in the Omaha area; and Sara Lee’s Holsum and Milano brands in the Harrisburg/Scranton area, as well as the associated manufacturing, distribution and marketing assets required to compete effectively in the sale of those brands in those areas.
Grupo Bimbo is a corporation organized under the laws of Mexico, with headquarters in Mexico City. It controls BBU, a Delaware corporation headquartered in Horsham, Penn., through which Grupo Bimbo carries out its baking business, including but not limited to sliced bread, in the United States. Grupo Bimbo had more than $8 billion in worldwide sales in 2009. In the same year, BBU’s sales in the United States totaled approximately $3.9 billion.
Sara Lee is a corporation organized under the laws of Maryland, with headquarters in Downers Grove, Ill. Sara Lee had more than $10 billion in worldwide revenues in fiscal 2010. In the same year, Sara Lee’s North American Fresh Bakery division had approximately $2.1 billion in sales.
The proposed settlement, along with the department’s competitive impact statement, will be published in the Federal Register, as required by the Antitrust Procedures and Penalties Act. Any person may submit written comments concerning the proposed settlement within 60 days of its publication to Joshua H. Soven, Chief, Litigation I Section, Antitrust Division, U.S. Department of Justice, 450 Fifth St., N.W., Suite 4100, Washington, D.C. 20530. At the conclusion of the 60-day comment period, the court may enter the settlement upon a finding that it is in the public interest.
Former United Nations Employee Found Guilty of FraudRead the Press Release
WASHINGTON – Jeffery K. Armstrong, 52, of South Riding, Va., was found guilty today by a federal jury on nine counts of wire fraud for obtaining more than $100,000 in salary payments by fraudulently holding concurrent jobs at the United Nations (U.N.) and the National Labor Relations Board (NLRB).
The guilty verdict was announced by 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; Assistant Director in Charge James W. McJunkin of the FBI’s Washington Field Office; and David P. Berry, Inspector General for the NLRB.
Armstrong was indicted on June 28, 2011, by a federal grand jury in the Eastern District of Virginia on nine counts of wire fraud for his scheme to defraud the U.N., an international organization committed to humanitarian and peace-keeping efforts, and the NLRB, an independent agency of the U.S. government.
According to evidence presented in the trial, in March 2008 Armstrong took a leave of absence from his position as a supervisory security specialist with the Department of the Army to accept a full-time position at the U.N. As an assistant chief of the Security and Safety Service at the U.N., Armstrong was responsible for all physical security of U.N. facilities in New York City, among other functions. According to evidence at trial, Armstrong received an annual salary from the U.N. of approximately $160,000. In February 2009, after working at the U.N. for almost a year, Armstrong applied for a position as chief of the security branch within the Division of the Administration at the NLRB in Washington, D.C. In April of 2009, Armstrong became a full time employee at the NLRB, with an annual salary of approximately $121,000.
From approximately April to September 2009, Armstrong was an employee of both the U.N. and the NLRB. Armstrong concealed his dual employment from both employers by, among other things, dissuading NLRB personnel from contacting his supervisor at the U.N., submitting incomplete or inaccurate employment forms to the NLRB, and causing to be mailed to the NLRB false correspondence suggesting that he no longer worked at the U.N. In addition, Armstrong submitted, and occasionally forged, medical leave documentation to the U.N., indicating that he was unable to work and was undergoing medical treatment, despite his full-time employment at the NLRB. According to evidence, Armstrong failed to notify his superiors at both entities of his concurrent employment and received more than $100,000 in concurrent salary.
Armstrong faces a maximum penalty of 20 years in prison when he is sentenced on Jan. 27, 2012.
This case was investigated by the FBI’s Washington Field Office and the NLRB Office of Inspector General. Trial Attorney Eric G. Olshan of the Criminal Division’s Public Integrity Section and Assistant United States Attorney Karen L. Dunn of the Eastern District of Virginia prosecuted the case on behalf of the United States.
Thursday 20 October 2011
Two Minnesota Women Convicted of Providing Material Support to Al-ShabaabRead the Press Release
Earlier today in federal court in the District of Minnesota, a jury found two Rochester, Minn., women guilty of providing material support to al-Shabaab, a designated terrorist organization.
Following a 10-day trial, the jury convicted Amina Farah Ali, 35, and Hawo Mohamed Hassan, 64, both naturalized U.S. citizens from Somalia, of one count of conspiracy to provide material support to a designated terrorist organization. In addition, Ali was convicted of 12 counts of providing material support to al-Shabaab, while Hassan was also convicted of two counts of making false statements to authorities.
Ali was detained by authorities following today's verdict. Hassan was also detained but will be shortly transferred to a half-way house.
The evidence admitted at trial established that the defendants provided support to al-Shabaab from Sept. 17, 2008, through July 19, 2010. Specifically, the evidence established that Ali communicated by telephone with al-Shabaab members in Somalia who requested financial assistance for al-Shabaab. Ali, Hassan and others raised money for al-Shabaab by soliciting funds door-to-door in Somali communities in Minneapolis, Rochester, and other cities in the United States and Canada. In addition, the defendants raised money by participating in teleconferences that featured speakers who encouraged donations to support al-Shabaab. Ali also raised funds under the false pretense that the funds were for the poor and needy.
Ali and others then transferred funds to al-Shabaab through various money remittance companies. Ali and others used false names to identify the recipients of the funds in order to conceal that the funds were being provided to al-Shabaab. The indictment lists 12 money transfers directed to al-Shabaab by Ali.
The defendants and others committed several overt acts in order to carry out the fund-raising conspiracy. For example, on Oct. 26, 2008, Ali hosted a teleconference during which an unindicted co-conspirator told listeners that it was not the time to help the poor and needy in Somalia; rather, it was time to give to the mujahidin. Ali and Hassan recorded $2,100 in pledges at the conclusion of the teleconference. On Feb. 10, 2009, Ali conducted another fund-raising teleconference during which she told listeners to "forget about the other charities" and focus on "the jihad."
On July 14, 2009, the day after the FBI executed a search warrant at her home, Ali telephoned her primary al-Shabaab contact, saying, "I was questioned by the enemy here . . . . they took all my stuff and are investigating it . . . do not accept calls from anyone." In addition, when Hassan was questioned by agents in an investigation involving international terrorism, she made false statements.
For their crimes, the defendants face a potential maximum penalty of 15 years in prison for the charge of conspiracy to provide material support to a designated terrorist organization. Ali also faces a potential 15 years for each count of providing material support to a terrorist organization, while Hassan faces a potential eight years for each count of making a false statement. U.S. District Court Chief Judge Michael J. Davis will determine their sentences at a future hearing, yet to be scheduled.
This case is the result of an investigation by the FBI's Joint Terrorism Task Force. It is being prosecuted by Assistant U.S. Attorney Jeffrey S. Paulsen and Steven Ward of the Counterterrorism Section of the Justice Department's National Security Division.
Two Indicted for Conspiracy to Provide Material Support to TerroristsRead the Press Release
WASHINGTON – Ali Charaf Damache, an Algerian man who resided in Ireland, and Mohammad Hassan Khalid, a Pakistani citizen and U.S. lawful permanent resident who resided in Maryland, have been charged with conspiracy to provide material support to terrorists in a superseding indictment returned today in the Eastern District of Pennsylvania.
The charges were announced by Lisa Monaco, Assistant Attorney General for National Security; Zane David Memeger, U.S. Attorney for the Eastern District of Pennsylvania; and Mark Giuliano, Executive Assistant Director of the FBI’s National Security Branch.
Damache, aka “Theblackflag,” 46, is charged in the superseding indictment with one count of conspiracy to provide material support to terrorists and one count of attempted identity theft to facilitate an act of international terrorism. Damache was arrested by authorities in Ireland in March 2010 where he is currently being held on unrelated charges. The United States intends to seek his extradition from Ireland to stand trial in the Eastern District of Pennsylvania. If convicted of the charges against him in the superseding indictment, Damache faces a potential sentence of 45 years in prison.
Khalid, aka “Abdul Ba’aree ‘Abd Al-Rahman Al-Hassan Al-Afghani Al-Junoobi W’at-Emiratee,” 18, is charged in the superseding indictment with one count of conspiracy to provide material support to terrorists. Khalid was arrested in Ellicot City, Md., on July 6, 2011, and is currently in custody in the Eastern District of Pennsylvania. If convicted of the charge against him in the superseding indictment, Khalid faces a potential sentence of 15 years in prison.
“Today’s indictment, which alleges a terrorist conspiracy involving individuals around the globe who connected via the Internet -- including a teenager and two women living in America -- underscores the evolving nature of violent extremism.” said Assistant Attorney General Monaco. “I thank the many agents, analysts and prosecutors who helped bring about this case.”
“Protecting the citizens of the United States from acts of terrorism is one of the highest priorities of the Department of Justice,” said U.S. Attorney Memeger. “This case demonstrates that we must remain vigilant within our communities to make sure that we bring to justice those terrorists, of any age or background, who seek to do great harm to our citizens.”
“This investigation highlights the diverse threat environment we face today,” said FBI Executive Assistant Director Giuliano. “As revealed in this case, individuals used the Internet to further their radicalization and contribute to the radicalization of others. The FBI is committed to disrupting individual and group plots and doing so in close coordination with our law enforcement, intelligence and private sector partners.”
The indictment alleges that, from about 2008 through July 2011, Damache and Khalid conspired with Colleen R. LaRose, Jamie Paulin Ramirez and others to provide material support and resources, including logistical support, recruitment services, financial support, identification documents and personnel, to a conspiracy to kill overseas. LaRose, aka “Fatima LaRose,” aka “JihadJane,” pleaded guilty in February 2011 in the Eastern District of Pennsylvania to conspiracy to provide material support to terrorists, conspiracy to kill in a foreign country, false statements, and attempted identity theft. Ramirez pleaded guilty in the Eastern District of Pennsylvania in March 2011 to conspiracy to provide material support to terrorists.
According to the indictment, Damache, Khalid and others devised and coordinated a violent jihad organization consisting of men and women from Europe and the United States divided into a planning team, a research team, an action team, a recruitment team and a finance team; some of whom would travel to South Asia for explosives training and return to Europe to wage violent jihad.
The indictment alleges that Damache, Khalid, LaRose and others recruited men online to wage violent jihad in South Asia and Europe. In addition, Damache, Khalid, LaRose and others allegedly recruited women who had passports and the ability to travel to and around Europe in support of violent jihad. The indictment further alleges that LaRose, Paulin-Ramirez and others traveled to and around Europe to participate in and support violent jihad; and that Khalid and LaRose and others solicited funds online for terrorists.
For example, the indictment alleges that in July 2009, Damache sent an electronic communication using the username “Theblackflag” to Khalid, asking Khalid to recruit online “some brothers that can travel freely . . . with eu passports . . . .[A]nd I need some sisters too.” Damache also allegedly advised Khalid that “sister fatima will be charge of other sister care . . . . [W]e have already organized every thing for her. . . .” The indictment further alleges that Paulin-Ramirez married Damache on the day she arrived with her minor child in Europe to live and train with jihadists, even though she had never met Damache in person, and that, while living together in Europe, the couple began training Ramirez’s minor child in the ways of violent jihad.
Among other things, the indictment further alleges that, in July 2009, Khalid posted or caused to be posted an online solicitation for funds to support terrorism on behalf of LaRose and later sent electronic communications to multiple online forums requesting the deletion of all posts by LaRose after she was questioned by the FBI. In August 2009, Khalid allegedly sent a questionnaire to LaRose in which he asked another potential female recruit about her beliefs and intentions with regard to violent jihad. In addition, Khalid allegedly received from LaRose and concealed the location of a U.S. passport that she had stolen from another individual.
This case was investigated by the FBI’s Joint Terrorism Task Force in Philadelphia, and the FBI Field Divisions in New York, Denver, Washington, D.C., and Baltimore. Authorities in Ireland also provided assistance in this matter.
The case is being prosecuted by Assistant U.S. Attorney Jennifer Arbittier Williams, in the Eastern District of Pennsylvania, and Matthew F. Blue, Trial Attorney from the Counterterrorism Section of the Justice Department’s National Security Division. The Office of International Affairs in the Justice Department’s Criminal Division also provided assistance.
The charges contained in an indictment are mere allegations and defendants are presumed innocent unless and until proven guilty.
Texas Resident Sentenced to 24 Months in Prison for Scheme to Defraud the U.S. Export-Import BankRead the Press Release
WASHINGTON – An El Paso, Texas, resident was sentenced today to 24 months in prison for his role in a scheme to defraud the Export-Import Bank of the United States (Ex-Im Bank) of more than $3.6 million.
The sentence was announced by Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney Robert Pitman of the Western District of Texas; Osvaldo L. Gratacos, Inspector General of the Ex-Im Bank; Special Agent in Charge Manuel Oyola-Torres of Homeland Security Investigations (HSI) in El Paso; Special Agent in Charge Rebecca Sparkman of the Internal Revenue Service-Criminal Investigation (IRS-CI) in Washington, D.C.; and Inspector in Charge Daniel S. Cortez of the U.S. Postal Inspection Service (USPIS) in Washington, D.C.
Gilberto Baez-Garcia, 35, was also sentenced by Judge Kathleen Cardone in U.S. District Court in El Paso to five years of supervised release and was ordered to pay $ 3,614,594 in restitution and $ 3,614,977 in forfeiture. Baez pleaded guilty on May 11, 2011, to conspiracy to commit wire and bank fraud, conspiracy to launder money and bank fraud. Baez admitted that he participated in a scheme to defraud the Ex-Im Bank of more than $3.6 million. Baez most recently resided in El Paso. He was arrested on June 4, 2010.
According to court documents, Baez was the co-owner of Valcomar Inc., an export company located in El Paso that purported to be in the business of exporting U.S. manufactured goods to Mexico. During his plea hearing, Baez admitted that he and another El Paso exporter created false documents so Baez could obtain a fraudulent Ex-Im Bank loan, which resulted in a $1,016,126 loss to the government. Baez also admitted that he and his co-conspirators assisted others to obtain fraudulent Ex-Im loans, which resulted in more than $2 million in losses to the government. According to court records, all of the Ex-Im loans involving Baez were fraudulent and Baez and others stole the loan proceeds by transferring funds to Mexico and elsewhere. As a result, the loans went into default and caused the Ex-Im Bank to pay claims losses to the lending banks in the amount of $3,614,594.
Ex-Im Bank is an independent federal agency that helps create and maintain U.S. jobs by filling gaps in private export financing. Ex-Im Bank provides a variety of financing mechanisms to help foreign buyers purchase U.S. goods and services.
The case is being prosecuted by Trial Attorneys Patrick Donley and William Bowne of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Steven Spitzer of the Western District of Texas, El Paso Office. The case was investigated by the Ex-Im Bank Office of Inspector General, HSI, IRS-CI and USPIS.
Sixth Guilty Plea in Connection with Scheme to Fraudulently Control Condominium Homeowners’ AssociationsRead the Press Release
WASHINGTON – A California man pleaded guilty today for his role in a scheme to fraudulently gain control of condominium homeowners’ associations (HOA) in the Las Vegas area so that the HOAs would direct business to a certain law firm and construction company, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division, Special Agent in Charge Kevin Favreau of the FBI Las Vegas Field Office, Sheriff Doug Gillespie of the Las Vegas Metropolitan Police Department and Special Agent in Charge Paul Camacho of the Internal Revenue Service-Criminal Investigation (IRS-CI).
Edward Lugo, 47, pleaded guilty before U.S. District Judge Lloyd D. George in the District of Nevada to one count of conspiracy to commit mail and wire fraud. Lugo is the sixth person to plead guilty in connection with the scheme to defraud HOAs in the Las Vegas area.
Lugo admitted that from approximately August 2003 until February 2009, he participated in a scheme to control various HOA boards of directors so that the HOA boards would award the handling of construction-related lawsuits and remedial construction contracts to a law firm and construction company designated by Lugo’s co-conspirators.
According to plea documents, to accomplish the scheme, co-conspirators used straw purchasers to obtain mortgage loans for units within HOA communities. Lugo agreed to act as a straw purchaser of a property at Mission Ridge and a property at Park Avenue, both HOA communities located in Las Vegas. In fact, Lugo’s co-conspirators were the true owners; they provided the down payments and monthly payments, including the HOA dues and mortgage expenses for the properties. Lugo admitted that he signed and submitted false and fraudulent loan applications and closing documents to financial institutions to finance and close on these properties on behalf of his co-conspirators.
Lugo admitted that he managed and operated the payments associated with maintaining many, if not all, of the straw properties owned and controlled by co-conspirators by running a so-called “Bill Pay Program.” At the direction of a co-conspirator, Lugo maintained several limited liability companies (LLC) for the purpose of opening bank accounts and concealing the funds for the Bill Pay Program. According to court documents, a co-conspirator transferred funds to the LLC accounts and Lugo used the funds to wire payments associated with the properties in Nevada.
Court documents indicate that Lugo and other co-conspirator straw purchasers agreed to run for election to the respective HOA boards. Lugo and the co-conspirators were paid in cash, check or promised things of value for their participation, resulting in a personal financial benefit to the co-conspirators. Lugo was elected to the HOA board at Park Avenue. He admitted that once he was on the board, he breached his statutory fiduciary duties to the homeowners by accepting from his co-conspirators compensation, gratuity and other remuneration that improperly influenced, or reasonably appeared to influence, his decisions, resulting in a conflict of interest. Lugo admitted that he voted in a manner directed by and favorable to his co-conspirators.
Lugo admitted that he and his co-conspirators employed deceitful tactics in their attempts to win the board elections, including creating false phone surveys to gather information about homeowners’ voting intentions, using mailing lists to vote on behalf of out-of-town homeowners unlikely to participate in the elections, and submitting fake and forged ballots. Co-conspirators also hired private investigators to find “dirt” on the bona fide candidates in order to create smear campaigns.
Lugo also admitted that he assisted in sending forged out-of-town homeowner ballots from California to Nevada to make it appear that the ballots were completed and mailed by bona fide homeowners residing outside Nevada.
According to plea documents, c o-conspirators also attempted to create the appearance that the elections were legitimate by hiring independent attorneys, or “special election masters,” to run the HOA board elections. However, these individuals were paid in cash, and by check and promised things of value, by or on behalf of Lugo’s co-conspirators for their assistance in rigging the elections.
Court documents indicate that, once elected, the co-conspirator board members would meet with other co-conspirators to manipulate board votes, including the selection of property managers, contractors and general counsel for the HOA and attorneys to represent the HOA. The co-conspirators created and submitted fake bids for “competitors” to make the process appear to be legitimate while ensuring co-conspirators were awarded contracts.
Lugo admitted that, at the direction of his co-conspirators, he worked at a property management compan y. Lugo and other co-conspirator property managers received and accepted cash, checks or things of value for using their positions to gain inside information and recommend that the HOA board hire a co-conspirator for remediation and construction defect repairs and another co-conspirator for the construction defect litigation.
Lugo’s sentencing is scheduled for March 22, 2012, at 10 a.m. The maximum sentence for conspiracy to commit mail fraud and wire fraud is 30 years in prison.
The case is being prosecuted by Deputy Chief Charles La Bella and Trial Attorneys Nicole H. Sprinzen and Mary Ann McCarthy of the Criminal Division’s Fraud Section. The case is being investigated by the FBI, IRS-CI and the Las Vegas Metropolitan Police Department, Criminal Intelligence Section.
This prosecution is part of efforts underway by President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. For more information about the task force visit: www.stopfraud.gov .
Department of Justice/Federal Trade Commission Issue Final Statement of Antitrust Policy Enforcement Regarding Accountable Care OrganizationsRead the Press Release
WASHINGTON – The Department of Justice and the Federal Trade Commission (FTC) today issued the final version of a joint policy statement detailing how the agencies will enforce U.S. antitrust laws with respect to new Accountable Care Organizations (ACOs). An ACO is an organization of health care providers that jointly offer services to reduce costs and improve the quality of patient care. Under the Affordable Care Act, ACOs will serve Medicare fee-for-service beneficiaries under the Medicare Shared Savings Program.
Some ACOs may operate in the commercial market as well as in the Medicare program. While ACOs may allow health care providers to innovate and improve care for both Medicare and commercially insured patients, under certain conditions ACOs could reduce competition and harm consumers through higher prices or lower quality care. Today’s guidance will help health care providers form procompetitive ACOs that benefit both Medicare beneficiaries and patients with private health insurance while protecting health care consumers from higher prices and lower quality. The Centers for Medicare and Medicaid Services (CMS) will also provide the agencies with data and information to help the agencies assess the competitive effects of all ACOs. The agencies will use this data and information, together with their traditional enforcement tools, to evaluate competitive concerns about an ACO’s formation or conduct and will take whatever enforcement action may be appropriate.
The Department of Justice and the FTC will continue to enforce vigorously the antitrust laws, consistent with the policy statement and with the goals of this innovative program to protect health care consumers from higher prices and lower quality care.
As proposed in a draft policy statement issued for public comment in March 2011, the agencies will not challenge as per se illegal a Shared Savings Program ACO that jointly negotiates with private insurers to serve patients in commercial markets if the ACO satisfies certain conditions. The ACO must comply with CMS’s eligibility criteria and use the same governance and leadership structures and clinical and administrative processes to serve patients in both Medicare and commercial markets. For ACOs that meet those criteria, the agencies will apply a “rule of reason” analysis in analyzing a potential antitrust violation.
The final policy statement also preserves an antitrust “safety zone” for certain ACOs, as described in the earlier proposed policy statement. With some exceptions, safety zone eligibility is based on the combined Primary Service Area (PSA) shares of ACO participants that provide a common service (e.g., the same physician specialty or the same inpatient service) to patients from the same PSA. To fall within the safety zone, an ACO’s independent participants that provide a common service must have a combined share of 30 percent or less of each common service in each participant’s PSA, where two or more participants provide that service to patients in that PSA.
The policy statement provides examples of conduct that, under certain circumstances, may raise competitive concerns. All ACOs should refrain from, and implement safeguards against, conduct that may facilitate collusion among ACO participants in the sale of competing services outside of the ACO. Further, for ACOs that may have market power, the policy statement identifies additional conduct that, depending on the circumstances, may prevent private insurers from obtaining lower prices and better quality services for their enrollees.
The Department of Justice and the FTC will offer voluntary expedited 90-day reviews for newly formed ACOs that are seeking additional antitrust guidance. The final policy statement includes detailed instructions for any newly formed ACO that wishes to take advantage of the voluntary expedited antitrust review process.
The final policy statementincorporates public input and differs from the original proposal in two significant respects:
- Expanded Coverage
The entire final policy statement, except voluntary expedited review, applies to all provider collaborations that are eligible and intend, or have been approved, to participate in the Medicare Shared Savings Program. The policy statement no longer applies only to collaborations formed after March 23, 2010 (the date on which the Affordable Care Act was enacted).
- Shift from Mandatory to Voluntary Review
Because the Medicare Shared Savings Program final rule no longer requires a mandatory antitrust review for certain collaborations as a condition of entry into the Shared Savings Program, the final policy statement no longer contains provisions relating to mandatory antitrust review.
The agencies have made other minor modifications to the policy statement in response to feedback received during the public comment period.
Wednesday 19 October 2011
Micronesian Couple Sentenced in State of Washington in Connection with Human Trafficking ViolationsRead the Press Release
WASHINGTON – Edk Kenit, 28, and Choimina Lukas, 30, a Micronesian couple living in Longview, Wash., were sentenced today for their roles in a scheme to compel the labor of an 18-year-old woman, also from Micronesia.
Kenit and Lukas were sentenced by U.S. Distrtict Judge Robert J. Bryan of the Western District of Washington. Kenit was sentenced to 40 months in prison followed by three years of supervised release. Lukas was sentenced to 20 months in prison followed by three years of supervised release.
On July 27, 2011, Kenit and Lukas each pleaded guilty to compelled servitude through the use or withholding of documents. Kenit and Lukas admitted in court that in March 2010 they recruited the victim to travel from Micronesia to be their domestic servant and arranged for her passport and travel to the United States. Immediately upon her arrival, Kenit and Lukas took control of the victim’s passport as part of their scheme to compel the victim to work as their domestic servant providing full-time childcare, cooking and cleaning services without compensation.
Kenit and Lukas also admitted that they obtained a Social Security card in the victim’s name which they concealed from her. The defendants caused the victim to obtain full-time employment at a local chicken processing plant and required that she cash her pay checks and give the earnings to them. This employment lasted for five months and was in addition to the domestic services the victim continued to provide. Kenit and Lukas admitted that throughout the scheme they isolated the victim by not permitting her to have friends, go out of the house unmonitored or participate in social gatherings unrelated to family activities. The entire scheme lasted nearly one year before the victim escaped.
“The defendants’ exploitation of a vulnerable young woman is reprehensible,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “Human trafficking is a scourge and the Justice Department will continue to vigorously prosecute persons who engage in such intolerable conduct.”
“These two defendants preyed on a young and vulnerable member of their own family. They brought her to this country with promises of education and travel, and instead forced her to work both in their home and at hard labor to support them economically,” said U.S. Attorney for the Western District of Washington Jenny A. Durkan. “Thankfully, an alert neighbor and the Longview Police Department were able to rescue the victim from this abuse.”
This case was investigated by Homeland Security Investigations, the Seattle Police Department High Risk Victims Unit and the Longview Police Department. Law enforcement received critical help from non-governmental organizations which specialize in providing services to victims of crime. The case is being prosecuted jointly by Assistant U.S. Attorney Ye-Ting Woo and Trial Attorney Daniel Weiss of the Civil Rights Division’s Human Trafficking Prosecution Unit.
Miami-Area Halfway House Owner Pleads Guilty to Fraud and Kickback SchemeRead the Press Release
WASHINGTON – The owner and president of a Miami-area halfway house company pleaded guilty today for her role in a kickback scheme that funneled patients to a fraudulent mental health provider, American Therapeutic Corporation (ATC), and its related company, the American Sleep Institute (ASI), announced the Department of Justice, FBI and Department of Health and Human Services (HHS).
Natalie Evans, 50, pleaded guilty before U.S. District Judge Jose E. Martinez in Miami to one count of conspiracy to commit health care fraud. Evans was the president of Vision of Hope Recovery Inc., which operated five halfway houses in Fort Lauderdale, Fla.
According to court documents, most of the residents at Evans’s halfway houses were recovering from drug and/or alcohol addictions, and some had recently been released from prison. ATC purported to operate partial hospitalization programs (PHPs) in seven different locations throughout south Florida and Orlando. A PHP is a form of intensive treatment for severe mental illness.
According to court documents, Evans agreed to provide Medicare beneficiaries from Vision of Hope halfway houses to ATC for PHP services. Evans admitted that she knew the beneficiaries at her halfway houses needed day treatment for addiction and not PHP services. Evans also knew that ATC fraudulently billed the Medicare program for the PHP services provided to the beneficiaries she referred to ATC. According to court documents, Evans gave patient information, such as Medicare numbers, to a co-conspirator and the patients were then transported to and from ATC by ATC employees.
According to court filings, ATC’s owners and operators paid kickbacks to owners and operators of assisted living facilities and halfway houses and to patient brokers in exchange for delivering ineligible patients to ATC and ASI. In some cases, the patients received a portion of those kickbacks. Throughout the course of the ATC and ASI conspiracy, millions of dollars in kickbacks were paid in exchange for Medicare beneficiaries who did not qualify for PHP services. The ineligible beneficiaries attended treatment programs that were not legitimate so that ATC and ASI could bill Medicare for more than $200 million in medically unnecessary services.
According to the plea agreement, Evans’s participation in the fraud resulted in more than $645,975 in fraudulent billing to the Medicare program. At sentencing, scheduled for Jan. 19, 2012, Evans faces a maximum of 10 years in prison and a $250,000 fine.
ATC, its management company Medlink Professional Management Group Inc., and various owners, managers, doctors, therapists, patient brokers and marketers of ATC, Medlink and ASI, were charged with various health care fraud, kickback, money laundering and other offenses in two indictments unsealed on Feb. 15, 2011. ATC, Medlink and nine of the individual defendants have pleaded guilty or have been convicted at trial. Other defendants are scheduled for trial April 9, 2012, before U.S. District Judge Patricia A. Seitz.
Today’s guilty plea was announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida; John V. Gillies, Special Agent-in-Charge of the FBI’s Miami field office; and Special Agent-in-Charge Christopher B. Dennis of the HHS Office of Inspector General (HHS-OIG), Office of Investigations Miami office.
The case is being prosecuted by Trial Attorneys Steven Kim and Jennifer L. Saulino 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 Settles Lawsuit Against Anti-Abortion Protestor for Face Act Violations in ColoradoRead the Press Release
WASHINGTON – The U.S. District Court for the District of Colorado has ordered that
Jo Ann Scott be permanently enjoined from using force, threat of force or physically obstructing any person because that person is or has been obtaining or providing reproductive health services. In addition, Scott will pay damages in the amount of $750 to each of the alleged victims for her use of force in 2010 outside the Planned Parenthood of the Rocky Mountains (PPRM) facility in Denver. The court order is the result of a consent decree entered into by Scott and the United States to resolve a civil complaint filed against her by the United States for violations of the Freedom of Access to Clinic Entrances (FACE) Act.The United States alleged in its complaint that Scott used force against a patient on April 2, 2010, and against a companion of a patient on June 9, 2010, with the intent to injure, intimidate or interfere with their efforts to obtain reproductive health services for themselves or their companions. The complaint also alleged that Scott’s husband, Kenneth Scott, violated FACE by engaging in 10 separate incidents in which he physically obstructed patients and staff who were attempting to enter or exit the PPRM. The lawsuit against Kenneth Scott is pending.
“Individuals who seek reproductive health services should be able to do so without fear of physical interference or intimidation by those that disagree with that choice. Likewise, family members and companions should be able to accompany others seeking such services without being subject to physical altercations,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The United States will vigorously enforce the law and seek the full relief the law provides to ensure access to reproductive services.”
This civil action was filed by the Civil Rights Division Special Litigation Section Deputy Chief Julie Abbate and Trial Attorneys Je Yon Jung and Aaron Fleisher.
Department of Justice Observes National Domestic Violence Awareness MonthRead the Press Release
WASHINGTON – In recognition of October’s designation as National Domestic Violence Awareness Month, the Department of Justice’s Office on Violence Against Women will host an event on THURSDAY, OCT. 20, 2011, at 10:00 A.M. EDT focused on the impact of domestic violence homicides on individuals, families and communities, illuminating the importance of the Violence Against Women Act.
Deputy Attorney General James M. Cole and Director of the Office on Violence Against Women Susan B. Carbon will deliver opening remarks and be joined by recognized victim advocates and experts in the field of domestic violence homicide. Speaker presentations and a panel discussion will be followed by a question and answer session. Resource information will be available for interested participants in conjunction with the program.
WHO: James M. Cole, Deputy Attorney General
Susan B. Carbon, Director, Office on Violence Against Women WHAT: National Domestic Violence Awareness Month Event WHEN: THURSDAY, OCT. 20, 2011
10:00 A.M. EDT WHERE: U.S. Department of Justice
The Great Hall
950 Pennsylvania Avenue, N.W.
Washington, D.C.
OPEN PRESSNOTE: All media must present government-issued photo I.D. (such as a driver’s license) as well as valid media credentials. Media must enter the department at the visitor’s entrance on Constitution Avenue between Ninth and Tenth Streets. Media may begin arriving at 9:00 A.M. EDT and cameras must be pre-set by 9:45 A.M. EDT. Press inquiries regarding logistics should be directed to the Office of Public Affairs at 202-514-2007.
Baytown, Texas, Man Sentenced to Life in Prison for Atascosa County, Texas MurderRead the Press Release
WASHINGTON – A Baytown, Texas, man was sentenced today to life in prison for his role in a homicide that took place in Atascosa County, Texas, in May 2008, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division and U.S. Attorney Robert Pitman for the Western District of Texas.
Jim Flint McIntyre, aka “Q-Ball,” 43, was sentenced by U.S. District Judge Xavier Rodriguez in the Western District of Texas. McIntyre pleaded guilty on Feb. 11, 2011, to committing a violent crime in aid of racketeering activity. McIntyre admitted that he participated in the murder of Mark Davis Byrd Sr. Judge Rodriguez also sentenced McIntyre to a concurrent prison term of 15 years for a weapons offense he pleaded guilty to in the Eastern District of Texas.
According to information presented in court, McIntyre was a member of the Aryan Brotherhood of Texas (ABT), a powerful, race-based, state-wide organization that operates inside and outside of state and federal prisons throughout Texas and the United States. The ABT enforces its rules and promotes discipline among its members, prospects and associates through murder, attempted murder, conspiracy to murder, assault, robbery and threats against those who violate the rules or pose a threat to the enterprise. Members, and oftentimes associates, are required to follow the orders of higher-ranking members, often referred to as “direct orders.”
According to court documents, Mark Davis Byrd Sr., was a prospect member of the ABT. Byrd was murdered by McIntyre and Michael Dewayne Smith, aka “Bucky,” for allegedly stealing drugs he was ordered to deliver to a customer on behalf of the ABT. According to court documents, Byrd was murdered as a result of a “discipline” ordered by Frank Lavelle Urbish Jr., aka “Thumper.” Byrd’s body was discovered in Atascosa County on May 4, 2008.
On May 11, 2011, Smith, 30, of Houston, pleaded guilty to murder and conspiracy to commit murder in the racketeering-related death of Byrd. Fellow gang member, Urbish, 39, of Pasedena, pleaded guilty to the same charges in June.
Urbish and Smith both face life in prison at sentencing. Sentencing for Urbish is scheduled for Feb. 29, 2012. Sentencing for Smith is scheduled for March 1, 2012.
This case is being investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), the Texas Rangers, the Texas Department of Public Safety, the Atascosa County Sheriff’s Department and the Beaumont Police Department.The case is being prosecuted by Trial Attorney David Karpel of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorney David Shearer of the Western District of Texas, in full cooperation with the Atascosa County District Attorney’s Office.
Tuesday 18 October 2011
Virginia Contractors Plead Guilty to Kickback SchemeRead the Press Release
WASHINGTON – Two Virginia contractors pleaded guilty today to participating in a scheme to steer contracts for repair and maintenance work at healthcare and nursing home facilities owned by Medical Facilities of America Inc. (MFA) to their now defunct plumbing business, the Department of Justice announced.
Donald R. Holland, a resident of Hardy, Va., and Larry R. Sumpter, a resident of Roanoke, Va., pleaded guilty in U.S. District Court in Roanoke to conspiring with another individual to steer contracts for repair and maintenance at MFA healthcare and nursing home facilities. According to a one-count felony charge filed today, from about June 1998 until at least December 2006, Holland and Sumpter, former co-owners of Virginia-based Hardy Plumbing & Heating Corp., conspired with an MFA employee who oversaw the bidding process for repair and maintenance contracts at MFA facilities in North Carolina and Virginia. The department said that the MFA employee steered contracts to Hardy Plumbing in return for kickbacks.
According to the court documents, Holland, Sumpter and the MFA employee created fictitious competitor bids that were higher than the quotes submitted by Hardy Plumbing to create the appearance of competition. The MFA employee also specified the amount Hardy Plumbing should quote to MFA as well as the amount of the kickback on each of the contracts. As a result of the kickback scheme, Holland and Sumpter paid more than $250,000 to the MFA employee and received gross revenues totaling more than $3 million in connection with MFA contracts that were subject to the scheme to defraud. The department said that as a result of the kickback scheme, MFA was deprived of competitive pricing to its financial detriment. According to the plea agreements, Holland and Sumpter have agreed to cooperate with the department’s ongoing investigation.
Holland and Sumpter are charged with conspiracy to commit mail fraud for the kickback scheme, which carries a maximum sentence of 20 years in prison and a $250,000 criminal fine. The maximum fines 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.
The pleas are the second and third to arise out of the department’s ongoing fraud investigation into the award of repair and maintenance contracts at facilities owned by MFA. On April 4, 2011, Edward T. Fodrey, a contractor and resident of Norfolk, Va., pleaded guilty in U.S. District Court in Norfolk to conspiring with others to steer contracts for repair, maintenance and renovation at MFA healthcare and nursing home facilities.
The investigation is being conducted by the Antitrust Division’s Philadelphia Field Office, the U.S. Attorney’s Office for the Western District of Virginia, the FBI in Roanoke and the Internal Revenue Service-Criminal Investigation in Roanoke. Anyone with information concerning fraudulent behavior relating to the award of contracts by MFA should contact the Antitrust Division’s Philadelphia Field Office at 215-597-7405 or visit www.justice.gov/atr/contact/newcase.htm.
FDA Chemist Pleads Guilty to Using Insider Information to Trade on Pharmaceutical Stocks Resulting in Almost $4 Million in ProfitsRead the Press Release
WASHINGTON – A Food and Drug Administration (FDA) chemist pleaded guilty today before U.S. District Court Judge Deborah K. Chasanow in the District of Maryland to one count of securities fraud and one count of making false statements, related to a $3.7 million insider trading scheme that spanned nearly five years.
The guilty plea was announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney for the District of Maryland Rod J. Rosenstein; James W. McJunkin, Assistant Director in Charge of the FBI’s Washington Field Office; and Elton Malone, Special Agent in Charge of the Department of Health and Human Services, Office of the Inspector General (HHS-OIG), Office of Investigations, Special Investigations Branch.
According to court documents and statements made during court proceedings, Cheng Yi Liang, 57, of Gaithersburg, Md., has been employed as a chemist since 1996 at the FDA’s Office of New Drug Quality Assessment (NDQA). Through his work at NDQA, Liang had access to the FDA’s password-protected internal tracking system for new drug applications, known as the Document Archiving, Reporting and Regulatory Tracking System (DARRTS), which is used to manage, track, receive and report on new drug applications. Liang reviewed DARRTS for information relating to the progression of experimental drugs through the FDA approval process. Much of the information accessible on the DARRTS system constituted material, non-public information regarding pharmaceutical companies that had submitted their experimental drugs to the FDA for review.
“Mr. Liang used inside information about pharmaceutical companies – information he had access to solely because of his position at the FDA – to pocket millions in illicit profits,” said Assistant Attorney General Breuer. “In a shocking abuse of trust, Mr. Liang exploited his position as a chemist in the FDA’s Office of New Drug Quality Assessment to cash in, using the accounts of relatives and acquaintances to hide his illegal trading. Now, like many others on Wall Street and elsewhere, he is facing the significant consequences of trading stocks on inside information.”
“Those who use privileged and valuable information for personal gain, break the trust placed in them as a government employee and the integrity of the research they conduct on behalf of the U.S. government,” said Assistant Director in Charge McJunkin of the FBI’s Washington Field Office. “This case is the result of long hours and hard work by the FBI and HHS-OIG Special Agents who are tasked with enforcing laws and regulations designed to ensure the fair operation of our financial markets.”
“Profiting based on sensitive, insider information is not only illegal, but taints the image of thousands of hard-working government employees,” said Special Agent in Charge Malone of the HHS-OIG Special Investigations Branch. “We will continue to insist that federal government employee conduct be held to the highest of standards.”
Liang admitted that from approximately July 2006 through March 2011, he used the inside information he learned from DARRTS and other sources to trade in the securities of pharmaceutical companies. Liang used accounts of relatives, including his son, and acquaintances to execute the trades (referred to as the controlled accounts). When the inside information was positive about a company’s product, Liang used the controlled accounts to purchase securities. When the inside information was negative, Liang would make trades in anticipation of the stocks’ downward movement. Liang admitted that he used these controlled accounts to execute trades to profit from the change in the company’s share price after the FDA’s action was made public, resulting in total profits and losses avoided of more than $3.7 million.
For example, on May 21, 2010, the FDA accepted Clinical Data Inc.’s application for Viibryd, an anti-depressant. According to court documents, on Jan. 6, 2011, HHS-OIG installed software on Liang’s work computer, allowing it to collect screen shots from that computer, which revealed Liang regularly accessed the DARRTS system and reviewed information regarding Clinical Data’s drug Viibryd. Between Jan. 6, 2011, and Jan. 20, 2011, Liang purchased a total of 46,875 shares of Clinical Data stock using the controlled accounts. After the markets closed on Friday, Jan. 21, 2011, news of the FDA’s approval of Viibryd was reported. Clinical Data’s stock, which had closed that day at approximately $15.03 per share opened the following Monday, Jan. 24, 2011, at approximately $24.76 per share. Liang then sold all 46,875 shares of Clinical Data stock in the controlled accounts, netting a total profit of approximately $384,300.
During the time he was employed by the FDA, Mr. Liang was required to file a Confidential Financial Disclosure form disclosing, among other things, investment assets with a value greater than $1,000 and sources of income greater than $200. During the time period of his insider trading scheme, Liang annually filed these forms and failed to disclose using the controlled accounts or his income from the illicit securities trading.
Sentencing is scheduled for Jan. 9, 2012, at 12:30 p.m. The maximum penalty for the securities fraud count is 20 years in prison and a fine of $5 million, or twice the gross gain from the offense. The maximum penalty for the false statement count is five years in prison and a fine of $250,000.
As part of his plea agreement, Liang has agreed to forfeit $3,776,152, including a home and condominium in Montgomery County, Md., along with funds held in 10 bank or investment accounts.
The U.S. Securities and Exchange Commission (SEC) is currently pursuing civil charges against Liang and several accounts he controlled. That action is still pending.
This case is being prosecuted by Trial Attorneys Kevin Muhlendorf and Thomas Hall of the Criminal Division’s Fraud Section, Assistant U.S. Attorney David Salem for the District of Maryland and Senior Trial Attorney Pamela J. Hicks of the Criminal Division’s Asset Forfeiture and Money Laundering Section. The case was investigated by the FBI’s Washington Field Office and the HHS-OIG.
This case is an example of the close coordination between the Department of Justice and the SEC. The department recognizes the substantial assistance of the SEC, specifically the Market Abuse Unit of the SEC’s Enforcement Division, which conducted its own investigation and referred the conduct to the department.
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.
Chinese National Pleads Guilty to Economic Espionage and Theft of Trade SecretsRead the Press Release
WASHINGTON – Kexue Huang, a Chinese national and a former resident of Carmel, Ind., pleaded guilty today to one count of economic espionage to benefit a component of the Chinese government and one count of theft of trade secrets.
The guilty plea was announced by Assistant Attorney General Lanny A. Breuer of the Criminal Division, Assistant Attorney General for National Security Lisa O. Monaco, U.S. Attorney Joseph H. Hogsett of the Southern District of Indiana, U.S. Attorney B. Todd Jones of the District of Minnesota, and Robert J. Holley, Special Agent in Charge of the Indianapolis Field Office of the FBI.
This is the first trade secret prosecution in Indiana under a provision of the Economic Espionage Act that prohibits trade secret theft intended to benefit a component of a foreign government. Since its enactment in 1996, there have been a total of eight such cases charged nationwide under the Economic Espionage Act.
Huang, 46, pleaded guilty to the charges before U.S. District Judge William T. Lawrence in the Southern District of Indiana. In July 2010, Huang was charged in an indictment filed in the Southern District of Indiana for misappropriating and transporting trade secrets to the People’s Republic of China (PRC) while working as a research scientist at Dow AgroSciences LLC. Today, a separate indictment filed in the District of Minnesota was unsealed, charging Huang with stealing a trade secret from a second company, Cargill Inc.
According to court documents, from January 2003 until February 2008, Huang was employed as a research scientist at Dow, a leading international agricultural company based in Indianapolis that provides agrochemical and biotechnology products. In 2005, Huang became a research leader for Dow in strain development related to unique, proprietary organic insecticides marketed worldwide.
As a Dow employee, Huang signed an agreement that outlined his obligations in handling confidential information, including trade secrets, and prohibited him from disclosing any confidential information without Dow’s consent. Dow employed several layers of security to preserve and maintain confidentiality and to prevent unauthorized use or disclosure of its trade secrets.
Huang admitted that during his employment at Dow, he misappropriated several Dow trade secrets. According to plea documents, from 2007 to 2010, Huang transferred and delivered the stolen Dow trade secrets to individuals in Germany and the PRC. With the assistance of these individuals, Huang used the stolen materials to conduct unauthorized research with the intent to benefit foreign universities that were instrumentalities of the PRC government. Huang also admitted that he pursued steps to develop and produce the misappropriated Dow trade secrets in the PRC, including identifying manufacturing facilities in the PRC that would allow him to compete directly with Dow in the established organic pesticide market.
According to court documents, after Huang left Dow, he was hired in March 2008 by Cargill, an international producer and marketer of food, agricultural, financial and industrial products and services. Huang worked as a biotechnologist for Cargill until July 2009 and signed a confidentiality agreement promising never to disclose any trade secrets or other confidential information of Cargill. Huang admitted that during his employment with Cargill, he stole one of the company’s trade secrets – a key component in the manufacture of a new food product, which he later disseminated to another person, specifically a student at Hunan Normal University in the PRC.
According to the plea agreement, the aggregated loss from Huang’s criminal conduct exceeds $7 million but is less than $20 million.
“Mr. Huang used his insider status at two of America’s largest agricultural companies to steal valuable trade secrets for use in his native China,” said Assistant Attorney General Breuer. “We cannot allow U.S. citizens or foreign nationals to hand sensitive business information over to competitors in other countries, and we will continue our vigorous criminal enforcement of economic espionage and trade secret laws. These crimes present a danger to the U.S. economy and jeopardize our nation’s leadership in innovation.”
“Today’s plea underscores the continuing threat posed by the theft of business secrets for the benefit of China and other nations,” said Assistant Attorney General Monaco.
U.S. Attorney Hogsett noted that it is the first time economic espionage has been charged in the Southern District of Indiana. Hogsett remarked that “as U.S. Attorney, I am committed to working with Hoosier businesses who have been victimized and doing everything within our influence to protect Hoosier companies.” Hogsett praised Dow for its cooperation with the investigation and prosecution, noting that “companies must first report and then work with federal investigators and prosecutors if we are to stem the illicit export of trade secrets vital to the economy not only of Indiana but the United States.” Hogsett also stated, “the dual prosecutions from Indiana and Minnesota should serve as a warning to anyone who is considering robbing American companies of their information and weaken the American economy by selling that information to foreign governments or others that he will face severe consequences. The federal agents and prosecutors who worked tirelessly in these two cases are to be commended for their hard work and dedication.”
FBI Special Agent in Charge Holley stated: “Among the various economic espionage and theft of trade secret cases that the FBI has investigated in Indiana, the vast majority involve an inside employee with legitimate access who is stealing in order to benefit another organization or country. This type of threat, which the FBI refers to as the Insider Threat, often causes the most damage. In order to maintain our competitive advantage in these sectors, industry must identify their most important equities, realize that they are a target, implement internal protection mechanisms to protect their intellectual property, and communicate issues of concern immediately to the FBI.”
At sentencing, Huang faces a maximum prison sentence of 15 years on the economic espionage charge and 10 years on the theft of trade secrets charge.
The case is being prosecuted by Assistant U.S. Attorney Cynthia J. Ridgeway of the Southern District of Indiana, Trial Attorneys Mark L. Krotoski and Evan C. Williams of the Criminal Division’s Computer Crime and Intellectual Property Section, and Assistant U.S. Attorney Jeffrey Paulsen of the District of Minnesota, with assistance from the National Security Division’s Counterespionage Section.
Monday 17 October 2011
South Florida Corrections Officers Convicted of Federal Civil Rights and Obstruction ChargesRead the Press Release
WASHINGTON – A federal jury in Miami convicted South Florida Reception Center (SFRC) Corrections Officers Alexander McQueen, 30, and Steven Dawkins, 30, of offenses related to the violation of civil rights of inmates at SFRC. McQueen was convicted of both conspiring to violate the civil rights of inmates and obstruction of justice, while Dawkins was convicted of obstruction of justice. A second jury was unable to reach a verdict with regard to co-defendant Guruba Griffin, 31, and acquitted co-defendant Scott Butler, 32.
According to evidence presented at trial, SFRC corrections officers physically abused inmates by choking, punching and striking them with wooden broom handles. The defendants further forced the inmates to fight one another. Additionally, McQueen and Dawkins falsified reports relating to these incidents.
“These corrections officers pledged to protect and serve, not to victimize and lie,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The criminal behavior of these officers undermines the dedicated efforts of the vast majority of officers who serve honorably. The Justice Department is committed to holding officers who engage in such criminal acts accountable.”
“When those who are sworn to uphold the law and protect others instead abuse their power and position, they undermine the public’s confidence in the justice system and our government institutions,” said Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida. “The U.S. Attorney’s Office and the Department of Justice are committed to promoting trust in our system of justice by protecting the rights of all citizens to be free from this type of abuse.”
McQueen faces a maximum of 10 years in prison on the civil rights conspiracy charge, and McQueen and Dawkins each face a maximum of 20 years in prison on the obstruction of justice charges. Sentencing is scheduled for Jan. 5, 2012, before U.S. District Judge Cecilia M. Altonaga.
In announcing the verdict, Assistant Attorney General Perez commended the FBI and the Inspector General’s Office, Florida Department of Corrections, for their investigation. The case is being prosecuted by Civil Rights Division Trial Attorney Henry Leventis and Senior Litigation Counsel Gerard Hogan with the assistance of Assistant U.S. Attorney Susan Rhee Osborne of the U.S. Attorney’s Office for the Southern District of Florida.
Former Owner of Airline Services Company Pleads Guilty in Scheme to Defraud Illinois-Based Ryan International AirlinesRead the Press Release
WASHINGTON – A former owner and operator of a Florida-based airline services company pleaded guilty today in U.S. District Court in West Palm Beach, Fla., to participating in a kickback scheme to defraud Ryan International Airlines, a charter airline company located in Rockford, Ill., the Department of Justice announced.
Robert A. Riddell, the former owner and operator of an airline security and ground services company, pleaded guilty to felony charges filed on Sept. 29, 2011, in U.S. District Court in Fort Lauderdale, Fla. The charges against Riddell stem from a scheme in which he made kickback payments to Wayne E. Kepple, the former vice president of ground operations for Ryan, while also splitting the proceeds of fraudulent invoices with him.
Ryan provides air passenger and cargo services for corporations, private individuals, professional sports teams and the U.S. government, including the U.S. Department of Defense, the U.S. Department of Homeland Security and the U.S. Marshals Service. Riddell’s company provided ground security and other ground services coordination for selected Ryan flights in Europe.
According to court documents, Kepple was in charge of contracting with providers of goods and services on behalf of Ryan and approving the invoices submitted by the providers to Ryan for payment. The department said that from March 2006 through at least August 2009, Riddell paid Kepple more than $330,000 in kickbacks, including payments based on fabricated invoices submitted by Riddell’s company to Ryan.
Riddell was charged with one count of conspiracy to commit wire fraud and honest services fraud, and one count of wire fraud. Each count carries a maximum sentence of 20 years in prison and a $250,000 criminal fine for individuals. 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 amount is greater than the statutory maximum fine.
Today’s plea is the third to arise out of the Antitrust Division’s ongoing investigation into fraud and anticompetitive conduct in the airline charter services industry. On Aug. 12, 2011, David A. Chaisson and James E. Murphy pleaded guilty to participating in different conspiracies to defraud Ryan by making kickback payments to Kepple in exchange for winning contracts for their respective companies.
The investigation is being conducted by the Antitrust Division’s Atlanta Field Office and the National Criminal Enforcement Section and the U.S. Department of Defense’s Office of Inspector General, with assistance from the U.S. Attorney’s Office for the Southern District of Florida. Anyone with information concerning anticompetitive conduct in the airline charter services industry is urged to call the Antitrust Division’s Atlanta Field Office at 404-331-7100 or visit www.justice.gov/atr/contact/newcase.htm.
Federal Court Bars Newark, N.J., Man from Preparing Federal Tax ReturnsRead the Press Release
WASHINGTON - A federal court in New Jersey has permanently barred Luvander Hollaway from preparing federal tax returns for others, the Justice Department announced today. The civil injunction order, to which Hollaway consented, was signed by Judge Stanley R. Chesler of the U.S. District Court for the District of New Jersey.
The government complaint in the case alleged that Hollaway, a resident of Newark, N.J., repeatedly failed to comply with due-diligence requirements imposed by federal law on tax preparers who claim the earned income tax credit (EITC) on their customers’ returns. According to the complaint, Hollaway also allegedly falsified reported income and listed fake dependents on his customers’ returns in order to claim the maximum EITC for them.
According to the complaint, the Internal Revenue Service (IRS) assessed penalties against Hollaway in 2006 for failing to comply with due-diligence requirements, and a follow-up IRS investigation in 2011 revealed continuing failures and fraudulent claims.
The court order requires Hollaway to produce to the government a list identifying all persons for whom he prepared federal tax returns or claims for refund since Jan. 1, 2009.
The IRS listed return-preparer fraud as one of its "Dirty Dozen" tax scams for 2011. In the past decade, the Justice Department’s Tax Division has obtained injunctions against hundreds of tax-return preparers and tax-fraud promoters. Information about these cases is available on the Justice Department website.
Friday 14 October 2011
United States and European Union Antitrust Agencies Issue Revised Best Practices for Coordinating Merger ReviewsRead the Press Release
WASHINGTON – The Department of Justice, Federal Trade Commission (FTC) and the European Commission today issued an updated set of “best practices” that they use to coordinate their merger reviews. The agencies also celebrated the 20th anniversary of the United States-European Union bilateral antitrust agreement.
Following their annual antitrust consultations earlier today, Sharis A. Pozen, Acting Assistant Attorney General for the Department of Justice’s Antitrust Division, Jon Leibowitz, Chairman of the FTC, and Joaquín Almunia, European Union (EU) Vice-President and Competition Commissioner, praised the success of the cooperation agreement, and noted that international coordination and cooperation have steadily increased over 20 years. The agencies reaffirmed their commitment to cooperation and coordination in order to benefit consumers and business.
The 1991 agreement, which was signed in Washington, D.C. on September 23, provided for mutual notification of enforcement activities affecting each other’s important interests; exchange of non-confidential information and regular meetings among the agencies; cooperation and coordination of enforcement activities; consideration of requests by one party to pursue enforcement activities against anticompetitive conduct affecting the interests of the requesting party; and taking into account at all stages of enforcement, the important interests of the other party.
“In a world of multiple competition regimes, the strength of the U.S.-E.U. relationship and the depth of cooperation between the U.S. agencies and the European Commission serve as a model for the sound enforcement of competition laws,” said Acting Assistant Attorney General Pozen. “The revised best practices on U.S./E.U. merger cooperation are a prime example of how our working relationship will go forward with cooperation, trust and respect as its guiding principles. I have no doubt that our relationship will continue to grow, building on the 20 years of cooperation under the ground-breaking bilateral agreement of 1991.”
“Over the last two decades we’ve learned a lot about how to work together to preserve competition and protect consumers on both sides of the Atlantic, while at the same time enabling firms to pursue their mergers and acquisitions without undue delay,” said FTC Chairman Jon Leibowitz. “These updated best practices will ensure that we continue these efforts effectively and efficiently.”
The best practices, originally issued in 2002, provide an advisory framework for interagency cooperation when one of the U.S. agencies and the European Commission’s Competition Directorate review the same merger. The revised U.S.-E.U. best practices:
- Provide more guidance to firms about how to work with the agencies to coordinate and facilitate the reviews of their proposed transactions;
- Recognize that transactions that authorities in the U.S. and Europe review may also be subject to antitrust review in other countries; and
- Place greater emphasis on coordination among the agencies at key stages of their investigations, including the final stage in which agencies consider potential remedies to preserve competition.
The heads of the three agencies also marked the U.S.-E.U. cooperation agreement’s anniversary by hosting a high-level symposium reviewing 20 years of U.S.-E.U . competition agency cooperation on Oct.13, 2011.
The symposium brought together many senior officials who were responsible for the adoption of the 1991 agreement, with present and former senior officials from all three agencies, along with leading academic experts, practitioners and business executives from both jurisdictions. The symposium highlighted the agreement’s success in expanding communication and understanding among the agencies; enlarging the scope of cooperation and coordination in merger, cartel and single-firm conduct investigations; coordinating approaches to global antitrust developments; pursuing convergence on better procedures and substantive analysis; and helping to overcome the rare difference in outcomes.
The symposium also reflected on the future of transatlantic cooperation in a global economy with more than 120 competition agencies, and how U.S.-E.U. cooperation might serve as a model in the global context.
The United States also has cooperation agreements with: Australia, Brazil, Canada, Chile, China, Germany, Israel, Japan, Mexico and Russia.
Montgomery, Alabama, Woman Pleads Guilty to Two Tax Fraud and Identity Theft ConspiraciesRead the Press Release
WASHINGTON – Veronica Dale, a resident of Montgomery, Ala., pleaded guilty today to two tax fraud and identity theft conspiracies, the Justice Department and the Internal Revenue Service (IRS) announced. In addition to pleading guilty to two counts of conspiracy to defraud the government with respect to claims, Dale pleaded guilty to two counts of filing false, fictitious or fraudulent claims with the United States; two counts of theft of government money, property or records; one count of wire fraud; and one count of aggravated identity theft.
Along with four other defendants, Dale was indicted by a federal grand jury sitting in Montgomery on Dec. 14, 2010, on a variety of charges stemming from a large-scale tax fraud and identity theft conspiracy based in that city. According to the indictment, plea agreement and other court documents, the conspirators were part of a scheme that spanned from 2009 through 2010 and involved fraudulently obtaining tax refunds by filing false tax returns using stolen identities.
In her plea agreement, Dale admitted that she filed more than 500 fraudulent returns that sought at least $2.5 million in refunds. Dale also admitted that the returns were filed using the names of Medicaid beneficiaries, whose personal information she had obtained earlier when employed by a company that serviced Medicaid programs. According to court documents, Dale directed the refunds claimed by the fraudulent returns to an array of different bank accounts she and various co-conspirators controlled. All four co-defendants charged in the indictment - Alchico Grant, Laquanta Grant, Leroy Howard and Isaac Dailey - have already pleaded guilty, as have two other co-conspirators, Wendy Delbridge and Betty Washington, who pleaded guilty to criminal informations.
Veronica Dale and others were also charged in a separate superseding indictment by a federal grand jury in the Middle District of Alabama unsealed on Sept. 7, 2011, on a variety of counts stemming from another identity theft and tax fraud scheme. According to the indictment, plea agreement and other court documents, in 2011, Dale and others used stolen identities to file false tax returns claiming fraudulent refunds. In her plea agreement, Dale admitted that this scheme involved a fraud loss of between $400,000 and $1 million and that she provided the lists of Medicaid recipients she had obtained to a co-conspirator to use in the conspiracy. All of the co-defendants in this indictment – Alchico Grant, Melinda Clayton and Stephanie Adams, have also pleaded guilty, included most recently Adams, who pleaded guilty on Oct. 13, 2011.
Stephanie Adams pleaded guilty to one count of conspiring to defraud the United States with respect to claims. In her plea agreement, Adams admitted that between January and April 2011 she conspired with others to defraud the United States by filing false tax returns using stolen identities. Adams further admitted that she provided a co-conspirator with two bank accounts to receive the false refunds; almost $140,000 in false refunds were directed by Adams’s co-conspirators to the two bank accounts. When refunds were deposited, Adams retained a portion of the funds and distributed the rest of the money to her co-conspirators.
Sentencing has not yet been scheduled for either Dale or Adams. Dale faces a minimum of two years in prison, a maximum of 62 years in prison, three years of supervised release, restitution and a maximum fine of $1.75 million, or twice the loss caused by the offense. Adams faces a maximum of 10 years in prison, three years of supervised release, restitution and a maximum fine of $250,000, or twice the loss caused by the offense.
The cases were investigated by special agents of the IRS - Criminal Investigation. Trial attorneys Jason H. Poole and Michael Boteler of the U.S. Department of Justice, Tax Division, and Todd Brown, Assistant U.S. Attorney for the Middle District of Alabama are prosecuting the cases.
Additional information about the Justice Department’s Tax Division and its enforcement efforts may be found at www.justice.gov/tax.
Attorney General Holder Hosts Summit Focused on Prevention, Deterrence and Interdiction of Child Sexual ExploitationRead the Press Release
WASHINGTON –Attorney General Eric Holder today convened a panel of experts from Facebook, Microsoft and the National Center for Missing and Exploited Children to discuss concrete ways to prevent and deter child sexual exploitation at a national summit entitled, “A Call to Action: Protecting Children from Sexual Exploitation.” Attorney General Holder, who has made one of the department’s key priorities the protection of those most vulnerable including children and other victims of human trafficking and exploitation, hosted three expert panels to explore solutions to this grave crime.
“We have convened some of the world’s top experts in the field to find bold, effective and collaborative solutions to keep our children safe from all forms of exploitation and abuse,” Attorney General Eric Holder said. “By focusing on prevention and deterrence, as well as proven enforcement and prosecution strategies, we can advance our efforts to protect children in need and at risk, and to bring offenders to justice.”
The summit brought together hundreds of attendees from law enforcement, industry and child advocacy organizations. That collaboration delivers on a key goal laid out in the department’s National Strategy for Child Exploitation Prevention and Interdiction which launched last year. In the strategy, the department pledged to seek innovative solutions to this problem from inside and outside the government. This summit shows the department’s commitment to these kinds of innovative collaborations.
An important deliverable from the summit will include recommendations by the expert panelists that the attorney general will consider in the department’s fight to stop child exploitation and abuse.
The Department of Justice is committed to the safety and well-being of our children and has placed a high priority on protecting children and combating the sexual exploitation of minors. Through initiatives like Project Safe Childhood, the Internet Crimes Against Children Task Forces and the Innocence Lost National Initiative, the number of investigations and prosecutions of those who sexually exploit children have dramatically increased. The department will continue to deliver on its goals laid out in the National Strategy, and will continue to work with all our partners, federal, state, local, industry and child advocacy organizations to protect the nation’s children.
Thursday 13 October 2011
United States Files Suit to Stop Florida Woman from Promoting Form 1099-OID Tax Fraud SchemeRead the Press Release
WASHINGTON – The United States has sued Judy Grace Sellers to bar her from promoting an alleged scheme involving fraudulent tax refund claims, the Justice Department announced today. The government’s amended complaint for a civil injunction alleges that Sellers, of Chipley, Fla., helps her customers create false documents to support a fraudulent “Secured Party Creditor” argument. According to the lawsuit, this frivolous argument maintains that the federal government has created a “strawman” for each U.S. citizen and an account exists at the Treasury Department for the strawman. Sellers allegedly assists her customers in preparing documents to obtain funds from their supposed Treasury accounts.
According to the amended complaint, this scheme, also called the “commercial redemption” scheme, involves Sellers’s customers filing fraudulent tax returns with false Internal Revenue Service (IRS) Forms 1099-OID. The government alleges that the forms falsely claim huge amounts of tax withholding and that the returns claim large tax refunds based on the false withholding amounts.
Sellers’s customers have allegedly filed federal income tax returns claiming false refunds exceeding $6 billion. The amended complaint states that, in 2008, Sellers referred some customers to Teresa Marty for assistance with the Form 1099-OID submission process. The complaint alleges that, in 2009, the U.S. District Court for the Eastern District of California barred Marty from preparing federal tax returns for others as a result of her participation in the Form 1099-OID 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 .
Two Charged with Conspiracy and Filing False Tax Returns in a Corporate Scheme Based in South FloridaRead the Press Release
WASHINGTON – Elmo Antonio George and Nasheba Necia Hunte were indicted today by a federal grand jury in the Southern District of Florida on charges of conspiring to defraud the Internal Revenue Service (IRS) and with filing false tax returns for 2005 and 2006 which claimed false refunds totaling more than $1.2 million, the Justice Department and the IRS announced.
According to the indictment, between January 2003 and at least October 2008, George and Hunte conspired to defraud the IRS by, among other acts, incorporating and using Winco Holdings Inc. Winco had no employees and paid no money to employees for wages, and prepared and filed false individual, employment and corporate tax returns, as well as false promissory notes with the IRS. According to the indictment, George and Hunte also transferred ownership of property to each other and to corporate entities to conceal the proceeds of their fraud.
If convicted, George and Hunte each face a maximum of five years in prison for the conspiracy charge and a maximum of three years in prison for each false tax return charge, for a total of 11 years. Each defendant also faces a maximum of $750,000 in fines.
An indictment merely alleges that a crime has been committed, and a defendant is presumed innocent until proven guilty beyond a reasonable doubt.
This case was investigated by the IRS-Criminal Investigation and is being prosecuted by Tax Division Trial Attorneys Rebecca Perlmutter and Charles Edgar.
Owners of Fraudulent Lakeland, Florida, Physical Therapy Company Sentenced to 42 and 46 Months in PrisonRead the Press Release
WASHINGTON – Miami-area residents Angel Gonzalez and Jorge Zamora, who were the owners and operators of a fraudulent physical therapy company in Lakeland, Fla., were sentenced yesterday and today to 42 months in prison and 46 months in prison, respectively, for their leading roles in a scheme to defraud Medicare, announced the Department of Justice, the FBI and the Department of Health and Human Services (HHS).
U.S. District Judge James D. Whittemore of the Middle District of Florida also sentenced Gonzalez and Zamora to three years of supervised release following their prison terms and ordered them to pay $82,765.84in restitution, jointly and severally with their co-defendants.
On June 10, 2011, Gonzalez, 43, pleaded guilty before U.S. Magistrate Judge Mark A. Pizzo in Tampa, Fla., to one count of conspiracy to commit health care fraud. Zamora, 48, pleaded guilty before Judge Pizzo on July 14, 2011, to the same charge.
In pleading guilty, Gonzalez and Zamora admitted they were the owners and operators of Dynamic Therapy Inc. According to court documents, Gonzalez, Zamora and their co-conspirators purchased Dynamic from its prior owners and transformed it into a fraudulent enterprise that purported to provide physical therapy services to Medicare beneficiaries.
From fall 2009 to summer 2010, Gonzalez and Zamora submitted and caused the submission of $757,654 in fraudulent claims by Dynamic to the Medicare program. Gonzalez and his co-conspirators paid and caused the payment of kickbacks and bribes to Medicare beneficiaries in order to obtain their Medicare billing information and used it to submit claims to Medicare for physical therapy services that were never provided. According to court documents, Gonzalez, Zamora and others also stole the identities of a physical therapist and Medicare beneficiaries to submit additional false claims to Medicare. In pleading guilty, Gonzalez and Zamora admitted that they knew the Medicare beneficiaries, on whose behalf claims were submitted to Medicare, never received the services billed to Medicare.
All five defendants charged in the Dynamic Therapy fraud scheme have pleaded guilty and have been sentenced to prison terms for their roles in the fraud scheme. On Aug. 29, 2011, Andres Cespedes was sentenced to 21 months in prison; on Sept. 19, 2011, Adrian Chalarca was sentenced to 24 months in prison; on Oct. 11, 2011, Ariel Chong was sentenced to six months in prison.
The sentences were announced by Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney Robert E. O’Neill of the Middle District of Florida; Steven E. Ibison, Special Agent-in-Charge of the FBI’s Tampa Division; and Christopher Dennis, Special Agent-in-Charge of the HHS Office of Inspector General (HHS-OIG), Office of Investigations’ Miami Office.
This case was prosecuted by Acting Assistant Chief Benjamin D. Singer of the Criminal Division’s Fraud Section and Special Assistant U.S. Attorney Christina M. Burden of the Middle District of Florida. The case was investigated by the HHS-OIG, Defense Criminal Investigative Service and FBI, 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 Middle District of Florida.
Since their inception in March 2007, Medicare Fraud Strike Force operations in nine locations have charged more than 1,140 defendants who collectively have falsely billed the Medicare program for more than $2.9 billion. In addition, the HHS Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to www.stopmedicarefraud.gov .
Justice Department Settles Religious Discrimination Lawsuit Against Berkeley School District in IllinoisRead the Press Release
WASHINGTON — The Department of Justice announced today that it has entered into a consent decree with the Board of Education of Berkeley School District 87 in Berkeley, Ill. that, if approved by the court, will resolve a religious accommodations lawsuit filed in December 2010. In its lawsuit, the United States alleged that the school district violated Title VII of the Civil Rights Act of 1964 by failing to reasonably accommodate the religious practices of Safoorah Khan, a Muslim teacher at McArthur Middle School.
“Employees should not have to choose between practicing their religion and their jobs,” said Thomas Perez, Assistant Attorney General for the Civil Rights Division. “ The facts of this case show the consequences of an employer refusing to engage in any interactive process to understand and work with an employee to find an accommodation of the employee’s religious beliefs that will not cause undue hardship to the employer. We are pleased that Berkeley School District has agreed to implement a training program that puts into place an interactive process to ensure that each request for a religious accommodation will be considered on a case-by-case basis and granted if it poses no undue hardship on the school district.”
The government’s complaint, filed in the U.S. District Court for the Northern District of Illinois in Chicago, alleged that Ms. Khan requested an unpaid leave of absence in December 2008 to perform Hajj, a pilgrimage required by her religion, Islam. According to the complaint, Berkeley School District denied Ms. Khan a reasonable accommodation of her religious practice, compelling Ms. Khan to choose between her job and her religious beliefs, thus forcing her discharge. The United States also alleged that the school district maintains a policy under which it refuses to grant leave to non-tenured teachers as an accommodation for their religious practices if the leave requested is not already provided for in the school district’s leave policy.
The lawsuit was based on a charge of discrimination filed by Ms. Khan with the Chicago District Office of the Equal Employment Opportunity Commission (EEOC). After investigating Ms. Khan’s charge, finding reasonable cause to believe that Berkeley School District had discriminated against Ms. Khan, and unsuccessfully attempting to conciliate the matter, the EEOC referred the charge to the Department of Justice.
Under the terms of the consent decree, Berkeley School District will pay $75,000 to Ms. Khan for lost back pay, compensatory damages and attorneys’ fees. Berkeley School District also is required to develop and distribute a religious accommodation policy consistent with Title VII’s requirement to reasonably accommodate the religious beliefs, practices and/or observances of all employees and prospective employees. In addition, Berkeley School District is required to provide mandatory training on religious accommodation to all board of education members, supervisors, managers, administrators and human resources officials who participate in decisions on religious accommodation requests made by its employees and prospective employees.
This is the first lawsuit brought by the Department of Justice as a result of a pilot project designed to ensure vigorous enforcement of Title VII against state and local governmental employers by enhancing cooperation between the EEOC and the Civil Rights Division.
“As the favorable resolution of this case demonstrates, closer collaboration between the EEOC and the Department of Justice will strengthen the enforcement of this nation’s civil rights laws,” said Jacqueline A. Berrien, Chair of the EEOC. “Our partnership is critical to ensuring that workplaces are free of bias.”
Title VII prohibits discrimination in employment on the basis of gender, race, color, national origin or religion, and prohibits retaliation against an employee who opposes an unlawful employment practice, or because the employee has made a charge or participated in an investigation, proceeding or hearing under the Act. More information about Title VII and other federal employment laws is available on the Department of Justice website at www.usdoj.gov/crt/emp/index.html .
The EEOC enforces federal laws prohibiting employment discrimination. Further information about the EEOC is available on its website at www.eeoc.gov.
Georgia Woman Sentenced to 140 Months in Prison for Human Trafficking of Two Young Women from NigeriaRead the Press Release
ATLANTA- Bidemi Bello, 42, formerly of Suwanee, Ga., was sentenced today in Atlanta by U.S. District Judge William S. Duffey Jr. on human trafficking charges including forced labor, trafficking with respect to forced labor, document servitude, harboring for financial gain and procurement of naturalization unlawfully, the Department of Justice announced today. Bello was sentenced to 140 months in prison to be followed by three years of supervised. Bello was also ordered to be deported from the United States upon completion of her federal sentence. Bello was convicted of these charges on June 10, 2011, after a trial.
“Holding other human beings against their will in servitude is a violation of human rights that will not be tolerated in our free society,” stated Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “We are committed to combating human trafficking in all its forms, vindicating the rights of trafficking victims and bringing human traffickers to justice.”
“This case is nothing short of shocking,” said U.S. Attorney for the Northern District of Georgia Sally Quillian Yates. “Bello enslaved two young women through physical abuse, false promises, and threats of jail made to them and their families. Our office is working aggressively to root out human trafficking and to hold these criminals accountable.”
Brian D. Lamkin, Special Agent in Charge, FBI Atlanta Field Office, said, “This defendant lacked any compassion for her victims in that the defendant in this matter, being an immigrant to the U.S. herself, knew that her victims were particularly vulnerable to exploitation. The FBI is proud of the role that it played in bringing this matter to justice and urges anyone with information regarding Human Trafficking activity to contact its nearest FBI Field Office.”
“This sentencing closes the door on a shocking case of modern day slavery,” said Brock Nicholson, Special Agent in Charge of U.S. Immigration and Customs Enforcement Homeland Security Investigations (ICE-HSI) in Atlanta. “Human trafficking deprives victims of their freedom and dignity and it has no place in our world. Cases like this one serve to strengthen our resolve to protect and defend those who may not be able to evade or escape the grip of human trafficking.”
The facts presented at trial showed that on two separate occasions, Bello returned to her home country of Nigeria and recruited two young women to return with her to the United States to work as her nanny and maid. The first victim, identified in court as “Laome,” traveled with Bello in October 2001 when she was 17-years-old, using a fraudulent British passport the defendant had obtained for her. The second victim, identified in court as “Dupe,” traveled with an associate of Bello’s to the United States in November 2004 when she was 20, also using a fraudulent British passport. Each victim testified that she never held her own travel documentation and did not know how the passports had been obtained.
Bello had promised the young women and their families that she would send them to school in the United States. She also promised to pay a salary to one of the young women in exchange for her services. Those promises were not kept. Instead, Bello physically and emotionally abused both young women, controlled their access to the outside world, and routinely treated them inhumanely. Testimony at trial from the victims described the degrading treatment they received at the hands of Bello. If Bello decided the house was not clean enough, she beat them; if Bello decided the victims did not respond fast enough to her crying child, she beat them; if Bello felt that they had been disrespectful, she beat them. Bello used a large wooden spoon, shoes, electric cords and her hands to inflict this physical abuse. One young woman took pictures of her injuries with a disposable camera and the pictures of her cut and bloodied lip were admitted as evidence during Bello’s trial.
The evidence showed that while Bello’s upscale home had multiple bedrooms and bathrooms, she made the young women sleep on the floor or a couch, would not let them use the shower, and did not allow the them to eat the food they cooked, but were instead forced to eat food that had spoiled and was moldy. Laome testified that she often threw up from the food Bello made her eat, and that on at least one occasion, Bello made her eat that vomit.
The evidence also showed that the victims were sleep deprived, and forced to be on call for Bello’s child all night. The women were given ceaseless tasks and forced to use primitive methods for washing and cutting grass because Bello would not let the young women use modern appliances such as the washing machine, dishwasher or the lawn mower.
Several witnesses corroborated the victims’ stories and evidence showed that Bello also hid her crime from a Georgia Department of Family and Children’s Services investigator who came to her home upon hearing allegations of child abuse. Further, Bello never sent the young women to school as she had promised and never gave them any money for their years of work. The young women were totally dependent on Bello for all their basic necessities and she isolated them from others.
The women finally escaped with assistance from community members who were friends of Bello. The first victim, Laome, escaped from Bello, by hiding in the back of a woman’s car, who covered her with blankets and drove her away while Bello attended a party. The second victim, Dupe escaped by saving up $60, that was given to her by friends of Bello, and calling a cab. She was assisted by pastors at a church in Marietta after taking the cab to the church.
Bello became a U.S. citizen while she committed the crime of human trafficking.
Victims of human trafficking, on the other hand, are protected by U.S. laws from such abuse, regardless of where they come from or how they come to be in the United States. Upon being identified as victims of human trafficking, both Laome and Dupe were given T-visas provided by the U.S. government and allowed to remain in the United States to assist in the prosecution of Bello. Anyone who knows of a potential victim of human trafficking should report these offenses to the FBI at 404-679-9000 or at 1-888-373-7888 or to ICE-HSI at 866-DHS-2-ICE (866-347-2423) or online at www.ice.gov .
This case was investigated by Special Agents of the FBI, the Department of Homeland Security, ICE and special agents with the U.S. State Department, Diplomatic Security Services.
Assistant U.S. Attorney Susan Coppedge from the Northern District of Georgia and Civil Rights Division Criminal Section Deputy Chief Karima Maloney prosecuted the case.
Former Department of Defense Employee Pleads Guilty to Submitting False Travel Claims Totaling Nearly $500,000Read the Press Release
WASHINGTON – A former civilian employee of the Armed Forces Institute of Pathology (AFIP), a component of the Department of Defense, pleaded guilty today in Washington, D.C., to making more than $485,000 in false travel claims using the Defense Travel System, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division.
John R. Brock, 52, of Crofton, Md., pleaded guilty today before U.S. District Court Judge Robert L. Wilkins in U.S. District Court for the District of Columbia to a criminal information charging him with one count of making a false claim against the United States. According to court documents, Brock worked as a budget analyst within the Resources Management Department of the AFIP from 2007 through 2011. As part of his guilty plea Brock admitted that, from September 2008 through April 2011, he submitted 99 false travel vouchers totaling $485,535 for expenses that were never incurred. He admitted that he submitted the claims through the Defense Travel System using the profile of a former AFIP employee.
At sentencing, scheduled for Jan. 3, 2012, Brock faces up to five years in prison and a $250,000 fine, as well as supervised release following any prison term. Brock is also subject to criminal forfeiture totaling $485,535.
This case is being prosecuted by Trial Attorney Richard B. Evans of the Criminal Division’s Public Integrity Section, and is being investigated by the U.S. Army Criminal Investigation Command, the Defense Criminal Investigative Service and the FBI’s Washington Field Office.
El Departamento de Justicia anuncia la Fuerza de Tarea de Defensa de la NiñezRead the Press Release
WASHINGTON - El Subsecretario de Justicia Tom Perrelli anunció hoy el establecimiento de la Fuerza de Tarea Nacional sobre Niños Expuestos a la Violencia del Secretario de Justicia. La fuerza de tarea es parte de la iniciativa de Defensa de la Niñez del Secretario de Justicia, un proyecto que surgió de la necesidad de responder a los niveles epidémicos de exposición a la violencia que enfrentan los niños de nuestra nación.
"Nuestra visión de la justicia debe comenzar con prevenir la delincuencia antes que comience, proteger a nuestros niños y acabar con los ciclos de violencia y victimización. Cada joven merece la oportunidad de crecer y desarrollarse libre del temor a la violencia", señaló el Subsecretario de Justicia Perrelli. "La fuerza de tarea desarrollará conocimientos y creará concientización acerca del problema difundido de la exposición de los niños a la violencia. Esto acabará por mejorar nuestros hogares, ciudades, pueblos y comunidades".
Después de haberse divulgado las conclusiones apremiantes de la primera Encuesta Nacional sobre Niños Expuestos a la Violencia (2009), el Secretario de Justicia de los Estados Unidos Eric Holder lanzó la iniciativa Defensa de la Niñez en septiembre de 2010. Los objetivos de la iniciativa son prevenir la exposición de los niños a la violencia como víctimas y testigos, reducir los efectos negativos vividos por los niños expuestos a la violencia, y desarrollar conocimientos sobre e incrementar la concientización sobre este asunto.
La Fuerza de Tarea de Defensa de la niñez está compuesta por 14 expertos líderes de diversas áreas y perspectivas, incluidos facultativos, defensores de niños y familias, expertos académicos y clínicos habilitados. Joe Torre Vicepresidente Ejecutivo de Operaciones de Béisbol del Béisbol de Liga Nacional, fundador de la Fundación Joe Torre Safe at Home®, y testigo de violencia doméstica cuando niño, será el co-presidente de la fuerza de tarea.
A lo largo del año, la Fuerza de Tarea de Defensa de la Niñez realizará cuatro audiencias públicas en todo el país para aprender de facultativos, formuladores de políticas, académicos y miembros de la comunidad acerca de la extensión y naturaleza del problema de la exposición de los niños a la violencia en los Estados Unidos, como víctimas y como testigos. La fuerza de tarea también identificará prácticas prometedoras y estrategias comunitarias y de programación utilizadas para prevenir y responder a la exposición de los niños a la violencia.
Las audiencias tendrán lugar en Baltimore; Albuquerque, N.M.; Miami y Detroit. La primera audiencia de la fuerza de tarea se realizará en Baltimore el 29 y 30 de noviembre de 2011, en la Escuela de Leyes Francis King Carey de la Universidad de Maryland.
La Fuerza de Tarea de Defensa de la Niñez emitirá un informe final al Secretario de Justicia de los Estados Unidos, en el que presentará sus conclusiones y recomendaciones para una política integral. El informe servirá de guía para prevenir la exposición de los niños a la violencia y para mitigar los efectos negativos vividos por los niños expuestos a la violencia en todos los Estados Unidos.
Los miembros de la fuerza de tarea incluyen los siguientes:
Co-presidente: Joe Torre, Presidente de la Fundación "Safe at Home". El Sr. Torre, Vicepresidente Ejecutivo para Operaciones de Béisbol de la Liga Nacional de Béisbol y ex gerente de los Los Angeles Dodgers y New York Yankees, creó su fundación para educar a estudiantes, padres, maestros y docentes sobre los efectos de la violencia doméstica.
Padre Gregory Boyle, S.J., Fundador de Homeboy Industries. El Padre Boyle se ordenó como cura jesuita en 1984 y es miembro de la Junta Asesora del Centro Nacional Antipandillas [National Gang Center].
Dra. Sharon W. Cooper, Médica y CEO de Pediatría Forense y del Desarrollo, P.A. La Dra. Cooper es consultora y miembro del directorio del Centro Nacional para Niños Desaparecidos y Explotados [National Center for Missing and Exploited Children].
Sarah Deer, Ciudadana de la Nación Muscogee (Creek) de Oklahoma. La Profesora Deer es profesora auxiliar en la Escuela de Leyes William Mitchell y su beca se centra en la intersección de la ley tribal y los derechos de las víctimas.
Deanne Tilton Durfee, Directora Ejecutiva del Consejo Interagencias del Condado de Los Ángeles sobre Abuso y Negligencia Infantiles. La Srta. Tilton Durfee es, también, presidente del Centro Nacional sobre Revisión de Mortalidad Infantil.
Dra. Thea James, Médica, Directora del Programa de Abogacía de Intervención en la Violencia de Massachusetts del Boston Medical Center. La Dra. James es profesora auxiliar de medicina de emergencia en la Escuela de Medicina del Boston Medical Center/Universidad de Boston.
Kevin Jennings, CEO de Be the Change. El Sr. Jennings fundó la Red de Educación Gay, Lesbiana y Heterosexual [Gay, Lesbian and Straight Education Network (GLSEN)].
Alicia Lieberman, Ph.D., Directora de la Red de Tratamiento Temprano del Trauma [Early Trauma Treatment Network]. La Dra. Lieberman es la Presidente de Cátedra Subvencionada Irving B. Harris de Salud Mental Infantil en el Departamento de Psiquiatría de UCSF y directora del Programa de Investigación del Trauma Infantil, San Francisco General Hospital.
Robert Listenbee, J.D., Jefe de la Unidad Juvenil de la Asociación de Defensores de Filadelfia [Defender Association of Philadelphia]. El Sr. Listenbee es, también, miembro del Comité de Justicia Juvenil y Prevención de la Delincuencia de la Comisión de Pensilvania sobre el Delito y la Delincuencia.
Robert Macy, Ph.D., Fundador, Director y Presidente del Centro Internacional de Capacidad de Recuperación de Desastres-Boston [International Center for Disaster Resilience-Boston]. El Sr. Macy también es fundador y director ejecutivo de la Fundación de Niños de Boston y co-director de la División de Recuperación de Desastres en el Beth Israel Deaconess Medical Center.
Steven Marans, Ph.D., Director del Centro Nacional para Niños Expuestos a la Violencia. El Dr. Marans es Profesor de Psiquiatría Infantil, Profesor de Psiquiatría, Escuela de Medicina de Yale University, y también director del Centro de Traumas Violentos en la Niñez de Yale University.
Jim McDonnell, Jefe de Policía, Departamento de Policía de Long Beach, California. El Jefe McDonnell enseña temas de política pública en la Universidad de California, Los Ángeles, y prestó servicios en el Departamento de Policía de Los Ángeles durante 28 años.
Georgina Mendoza, J.D., Abogada Adjunta Senior y Directora de Seguridad Comunitaria de la Ciudad de Salinas, Calif. La Srta. Mendoza ha participado en la Red de Prevención de Pandillas de las Ciudades de California en los últimos cuatro años y es líder de Salinas en el Foro Nacional sobre la Violencia Juvenil de la Casa Blanca.
General Retirado Antonio Taguba, Presidente de TDLS Consulting, LLC, y Presidente de Pan Pacific American Leaders and Mentors (PPALM). El General Taguba estuvo en servicio activo durante 34 años, los que incluyeron su servicio como Comandante General Adjunto del Comando de Componentes de Tierra de las Fuerzas de Coalición [Coalition Forces Land Component Command (CFLCC)/ARCENT/Tercer Ejército de EE.UU., y fue destacado a Kuwait e Irak durante la Operación Libertad Iraquí.
Para obtener más información sobre la iniciativa de Defensa de la Niñez del Secretario de Justicia de los Estados Unidos Holder, la Fuerza de Tarea de Defensa de la Niñez, y las audiencias a realizarse, visite www.justice.gov/defendingchildhood.
Department of Justice Announces the Defending Childhood Task ForceRead the Press Release
WASHINGTON – Associate Attorney General Tom Perrelli today announced the establishment of the Attorney General’s National Task Force on Children Exposed to Violence. The task force is part of the Attorney General’s Defending Childhood initiative, a project arising from the need to respond to the epidemic levels of exposure to violence faced by our nation’s children.
“Our vision of justice must start with preventing crime before it happens, protecting our children, and ending cycles of violence and victimization. Every young person deserves the opportunity to grow and develop free from fear of violence,” said Associate Attorney General Perrelli. “The task force will develop knowledge and spread awareness about the pervasive problem of children’s exposure to violence – this will ultimately improve our homes, cities, towns and communities.”
Following the release of the compelling findings of the first National Survey on Children Exposed to Violence (2009), Attorney General Eric Holder launched the Defending Childhood initiative in September 2010. The goals of the initiative are to prevent children’s exposure to violence as victims and witnesses, reduce the negative effects experienced by children exposed to violence, and develop knowledge about and increase awareness of this issue.
The Defending Childhood Task Force is composed of 14 leading experts from diverse fields and perspectives, including practitioners, child and family advocates, academic experts and licensed clinicians. Joe Torre, Major League Baseball Executive Vice President of Baseball Operations, founder of the Joe Torre Safe at Home® Foundation, and a witness to domestic violence as a child himself, will serve as the co-chair of the task force.
Over the course of the year, the Defending Childhood Task Force will conduct four public hearings around the country to learn from practitioners, policymakers, academics and community members about the extent and nature of the problem of children’s exposure to violence in the United States, both as victims and as witnesses. The task force will also identify promising practices, programming and community strategies used to prevent and respond to children’s exposure to violence.
Hearings will take place in Baltimore; Albuquerque, N.M.; Miami; and Detroit. The first hearing of the task force will be held in Baltimore on Nov. 29, and 30, 2011, at the University of Maryland Francis King Carey School of Law.
The Defending Childhood Task Force will issue a final report to the attorney general presenting its findings and comprehensive policy recommendations. The report will serve as a blueprint for preventing children’s exposure to violence and for mitigating the negative effects experienced by children exposed to violence across the United States.
The members of the task force include the following:
Co-chair: Joe Torre, Chairman of the Joe Torre Safe at Home Foundation. Mr. Torre, Major League Baseball’s Executive Vice President for Baseball Operations and former manager of the Los Angeles Dodgers and the New York Yankees, created his foundation to educate students, parents, teachers and school faculty about the effects of domestic violence.
Father Gregory Boyle, S.J., Founder of Homeboy Industries. Fr. Boyle was ordained as a Jesuit priest in 1984 and serves as a member of the National Gang Center Advisory Board.
Sharon W. Cooper, M.D., CEO of Developmental & Forensic Pediatrics, P.A. Dr. Cooper serves as a consultant and board member of the National Center for Missing and Exploited Children.
Sarah Deer, Citizen of the Muscogee (Creek) Nation of Oklahoma. Professor Deer is an assistant professor at William Mitchell College of Law and her scholarship focuses on the intersection of tribal law and victims’ rights.
Deanne Tilton Durfee, Executive Director of the Los Angeles County Inter-Agency Council on Child Abuse and Neglect. Ms. Tilton Durfee also serves as chairperson of the National Center on Child Fatality Review.
Thea James, M.D., Director of the Boston Medical Center Massachusetts Violence Intervention Advocacy Program. Dr. James is assistant professor of emergency medicine at Boston Medical Center/Boston University School of Medicine.
Kevin Jennings, CEO of Be the Change. Mr. Jennings founded the Gay, Lesbian and Straight Education Network (GLSEN).
Alicia Lieberman, Ph.D., Director of the Early Trauma Treatment Network. Dr. Lieberman is Irving B. Harris Endowed Chair of Infant Mental Health at UCSF Department of Psychiatry and director of the Child Trauma Research Program, San Francisco General Hospital.
Robert Listenbee, J.D., Chief of the Juvenile Unit of the Defender Association of Philadelphia. Mr. Listenbee also serves as a member of the Juvenile Justice and Delinquency Prevention Committee of the Pennsylvania Commission on Crime and Delinquency.
Robert Macy, Ph.D., Founder, Director, and President of the International Center for Disaster Resilience–Boston. Dr. Macy is also the founder and executive director of the Boston Children’s Foundation and serves as co-director of the Division of Disaster Resilience at the Beth Israel Deaconess Medical Center.
Steven Marans, Ph.D., Director of the National Center for Children Exposed to Violence. Dr. Marans is Harris Professor of Child Psychiatry, Professor of Psychiatry, Yale University School of Medicine, and also serves as director of the Childhood Violent Trauma Center at Yale University.
Jim McDonnell, Chief of Police, Long Beach Police Department, California. Chief McDonnell teaches public policy issues at University of California, Los Angeles, and served with the Los Angeles Police Department for 28 years.
Georgina Mendoza, J.D., Senior Deputy Attorney and Community Safety Director for the City of Salinas, Calif. Ms. Mendoza has been involved in the California Cities Gang Prevention Network for the past four years and serves as the Salinas lead in the White House’s National Forum on Youth Violence.
Retired Major General Antonio Taguba, President of TDLS Consulting, LLC, and Chairman of Pan Pacific American Leaders and Mentors (PPALM). General Taguba served 34 years on active duty, including serving as Deputy Commanding General for Support, Coalition Forces Land Component Command (CFLCC)/ARCENT/Third U.S. Army, forward deployed to Kuwait and Iraq during Operation Iraqi Freedom.
For more information about Attorney General Holder’s Defending Childhood initiative, the Defending Childhood Task Force, and the upcoming hearings, please visit www.justice.gov/defendingchildhood.
Attorney General Holder Joins White House in Honoring “Champions of Change”Read the Press Release
WASHINGTON – Attorney General Eric Holder was joined today by Senior Counselor for Access to Justice Mark Childress at a White House “Champions of Change” event to honor and recognize the work of legal leaders from communities large and small who are dedicating their professional lives to closing the justice gap in America. The event, co-sponsored by the White House Office of Public Engagement and the Department of Justice Access to Justice Initiative, featured 16 leaders from across the country who were recognized for their work in public interest law and providing legal services to people throughout the country who cannot afford them.
“It’s a privilege to be among so many remarkable individuals who – because of their commitment to progress and to using their skills and talents to improve the lives of others – have been designated by President Obama as Champions of Change,” said Attorney General Holder. “Across the country, their work is allowing us to address and overcome our most pressing legal challenges and live up to our nation’s highest ideals.”
Students, professors, clinicians, pro bono directors and law librarians from 118 law schools nationwide submitted discussion questions and viewed the event via live-stream on the Internet. The discussion included conversations on issues such as how to pursue a career in public interest law; how best to assist disadvantaged members of society through legal knowledge and skills; and how to help specific segments of the population, such as tribal members, individuals facing foreclosure and those needing legal representation.
Recipients of the White House’s “Champions of Change” honors are:
- Laura K . Abel is acting director of the Justice Program at the Brennan Center for Justice at New York University School of Law. The Justice Program works to ensure that low-income families and people with limited proficiency in English can participate meaningfully in legal proceedings when they are facing criminal charges, domestic violence, eviction from their homes, the loss of subsistence benefits and other life-changing events.
- Todd Belcore is an Equal Justice Works fellow at the Sargent Shriver Center on Poverty Law in Chicago, focusing on litigating, organizing, educating and crafting legislation to ensure that individuals with criminal records are not unjustly denied employment or occupational licenses. Belcore is a graduate of the Northwestern University School of Law, where he served as president of the public service organization SERV and, later, as the student bar association president. In these roles, he was able to significantly increase the amount of exposure law students had to public interest and public service.
- Martha Bergmark is the founding president/CEO of the Mississippi Center for Justice, a nonprofit, public interest law firm created in 2002 to advance racial and economic justice. In the aftermath of Hurricane Katrina, the center mobilized unprecedented volunteer resources to meet the daunting legal needs of low-income hurricane survivors and to ensure an equitable recovery. In 2010, a landmark settlement of center litigation restored $132 million to housing recovery for hurricane survivors previously excluded from Mississippi’s recovery programs. The center currently leads a five-state, 12-program consortium of legal aid providers representing victims of the Deepwater Horizon oil drilling disaster.
- Deb Ellis directs New York University (NYU) School of Law’s Public Interest Law Center (PILC) and its Root-Tilden-Kern Scholarship Program for students committed to public interest careers, and is herself an NYU Law and Root alumna. Prior to leading PILC, Ellis had a distinguished public interest career, including legal director of the NOW Legal Defense and Education Fund, where she argued Bray v. Alexandria Women’s Health Clinic before the U.S. Supreme Court. She also served as legal director of the American Civil Liberties Union (ACLU) of New Jersey and as a staff attorney at the ACLU Women’s Rights Project and at the Southern Poverty Law Center.
- Paula S. Gómez and David G. Hall were recognized for their work in leading the Medico-Legal Partnership Rio Grande Valley, which is helping children and families in Brownsville, Texas, by integrating legal assistance into the medical setting. Gómez has served as the executive director of the Brownsville Community Health Center since 1984, a 17-provider community and migrant health center primarily situated in Brownsville with two school-based clinics and two other satellite clinics as well. These sites served almost 20,000 users and offered almost 90,000 patient visits last year. Hall is currently the executive director of Texas RioGrande Legal Aid. He has held this position since 1975 and, under his leadership, the organization has become the largest legal aid provider in Texas and third largest in the United States.
- Nan Heald has been the executive director of Pine Tree Legal Assistance in Portland, Maine, since 1990. Through the creative use of funding opportunities and other leveraged support, her leadership has enabled Pine Tree to strengthen and expand legal services to diverse client populations and in new areas of law, and to make justice more accessible for all the people of Maine.
- Lillian Johnson serves as the executive director of Community Legal Services, Arizona’s largest nonprofit civil legal aid program. She has held this position since 1982, after relocating from the Chicago area, where she began her career in civil legal aid.
- Addison Parker was co-litigation director of Appalachian Research and Defense Fund of Kentucky Inc. (AppalRed) and director of AppalRed’s Stop Foreclosure Clinic until his retirement in June 2011 after 32 years of service. AppalRed provides free legal assistance to low income persons in 37 counties, located primarily in the Appalachian hill country of Eastern Kentucky.
- Michael Pinard is the director of the Clinical Law Program at the University of Maryland Francis King Carey School of Law, one of the top-rated clinical programs in the country. With his colleague Sherrilyn Ifill, Professor Pinard co-founded the Reentry Clinic. This clinic focuses on identifying and easing the various obstacles that individuals with criminal records – and, by extension, their families and communities – confront during the reentry process and beyond.
- Deborah L. Rhode is the Ernest W. McFarland Professor of Law at Stanford Law School and Director of the Stanford Center on the Legal Profession in Palo Alto, Calif. She is the author of more than 20 books and 200 articles, many focusing on access to justice, pro bono service and reforming the legal profession.
- Thomas A. Saenz is the president and general counsel of MALDEF , where he leads the civil rights organization’s five offices in pursuing litigation, policy advocacy and community education to promote the civil rights of Latinos living in the United States.
- Brad Smith is Microsoft’s general counsel and executive vice president. He leads the company’s Department of Legal and Corporate Affairs. He is being recognized as the co-chair, with actress and humanitarian Angelina Jolie, of the board of directors of Kids in Need of Defense (KIND). KIND is a national organization dedicated to the facilitation of pro bono representation to the thousands of unaccompanied children who enter the United States alone each year to flee violence, human rights abuses, natural disasters, and economic deprivation. Just two and a half years into its operations, KIND has assisted more than 3,000 children and trained 3,200 pro bono attorneys in seven cities.
- David Stern has served for the last 19 years as executive director of Equal Justice Works in Washington, D.C., the nation’s leading creator of public interest opportunities for law students and lawyers to help those in need. During his tenure, Stern has been the main motivator for expanding the organization’s scope of services and has developed innovative programs that enable attorneys and law students to provide pro bono legal services to vulnerable populations, including families facing foreclosure, victims of domestic violence, immigrant communities, those struggling to access public services and targets of civil rights violations.
- Jo-Ann Wallace is the president and CEO of the Washington, D.C.-based National Legal Aid & Defender Association (NLADA). Recognizing the gap between rich and poor is greater than any time in our history, under her leadership NLADA will commemorate its centennial by launching a bold new strategy for changing justice in America: Blueprint for Justice: Rethink. Retool. Rebuild.
- Ron J. Whitener graduated from the University of Washington Law School in 1994, and worked as a tribal attorney for the Squaxin Island Tribe (of which he is a member) representing the tribal government in treaty rights defense, tribal governance, Indian health and tribal economic development. In 2000, he became director of the Northwest Indian Law Clinic at the UW Law School representing low-income Natives in criminal and civil cases. In 2002, he changed the clinic to the Tribal Court Public Defense Clinic, focused solely on training law students to practice public defense in tribal courts.
The White House Champions of Change program works to highlight ordinary Americans doing extraordinary things in their communities. Every week the White House will invite the Champions of Change to the White House to share their ideas to win the future. Beginning on Oct. 17, 2011, the legal leaders’ individual stories will be highlighted at www.whitehouse.gov/champions . In addition, the website will include the Champions’ blogs, as well as entries from each of the 118 participating law schools describing their commitment to public service.
The Access to Justice Initiative was launched by the Department of Justice in March 2010. The initiative seeks to ensure that the justice system is fair and accessible to all, irrespective of wealth and status, and that the justice system delivers fair outcomes efficiently. Its staff works within the department, across federal agencies, and with state, local and tribal justice system stakeholders to increase access to counsel and legal assistance, and for improvements to the justice delivery systems that serve people unable to afford lawyers. Additional information on the initiative is available at: www.justice.gov/atj .
Wednesday 12 October 2011
Virginia Man Accused of Acting as Unregistered Agent of Syrian Government and Spying on Syrian Protestors in AmericaRead the Press Release
WASHINGTON – Mohamad Anas Haitham Soueid, 47, a resident of Leesburg, Va., has been charged for his alleged role in a conspiracy to collect video and audio recordings and other information about individuals in the United States and Syria who were protesting the government of Syria and to provide these materials to Syrian intelligence agencies in order to silence, intimidate and potentially harm the protestors.
The charges were announced by Lisa Monaco, Assistant Attorney General for National Security; Neil MacBride, U.S. Attorney for the Eastern District of Virginia; and James McJunkin, Assistant Director in Charge of the FBI Washington Field Office.
Soueid, aka “Alex Soueid” or “Anas Alswaid,” a Syrian-born naturalized U.S. citizen, was charged by a federal grand jury on Oct. 5, 2011, in a six-count indictment in the Eastern District of Virginia. Soueid is charged with conspiring to act and acting as an agent of the Syrian government in the United States without notifying the Attorney General as required by law; two counts of providing false statements on a firearms purchase form; and two counts of providing false statements to federal law enforcement.
Soueid was arrested on Oct. 11, 2011, and will make an initial appearance before U.S. Magistrate Judge Theresa C. Buchanan today at 2:00 p.m. If convicted, he faces a maximum penalty of 15 years in prison on the conspiracy and foreign agent charges, 15 years in prison on the firearms purchase charges and 10 years in prison on the false statement charges.
“Today’s indictment alleges that the defendant acted as an unregistered agent of the Syrian government as part of an effort to collect information on people in this country protesting the Syrian government crack-down. I applaud the many agents, analysts and prosecutors who helped bring about today’s case,” said Assistant Attorney General Monaco.
“The ability to assemble and protest is a cherished right in the United States, and it’s troubling that a U.S. citizen from Leesburg is accused of working with the Syrian government to identify and intimidate those who exercise that right,” said U.S. Attorney MacBride. “Spying for another country is a serious threat to our national security, especially when it threatens the ability of U.S. citizens to engage in political speech within our own borders.”
“Our national security is threatened when foreign governments use unregistered agents in an attempt to influence and intimidate those who live here lawfully,” said FBI Assistant Director in Charge McJunkin. “Their alleged acts desecrate the values cherished in our fair and open society. The FBI will be counted on to detect and deter unregistered agents who attempt clandestine activities on behalf of a foreign political power and work to bring them swiftly to justice.”
According to the indictment, since March 2011, Soueid has acted in the United States as an agent of the Syrian Mukhabarat, which refers to the intelligence agencies for the Government of Syria, including the Syrian Military Intelligence and General Intelligence Directorate. At no time while acting as an agent of the government of Syria in this country did Soueid provide prior notification to the Attorney General as required by law, the indictment alleges.
Under the direction and control of Syrian officials, Soueid is accused of recruiting individuals living in the United States to collect information on and make audio and video recordings of protests against the Syrian regime – including recordings of conversations with individual protestors – in the United States and Syria. He is also charged with providing the recordings and other information to individuals working for the Mukhabarat. According to the indictment, Soueid and others conspired to use this information to undermine, silence, intimidate and potentially harm those in the United States and Syria who engaged in the protests.
The indictment states that in late June 2011, the Syrian government paid for Soueid to travel to Syria, where he met with intelligence officials and spoke with President Bashar al-Assad in private.
He returned to the United States in early July 2011, and he was searched and questioned at Dulles International Airport upon his arrival. The indictment states that Soueid communicated with his “boss,” an unindicted co-conspirator (or UCC-1) who was working for the Mukhabarat, soon after to alert him of the search and questioning and to assure the individual that the airport encounter would not “stop the project.”
In addition to the recordings, Soueid is accused of providing the Mukhabarat contact information, including phone numbers and email addresses, for protestors in the United States. In a handwritten letter sent to UCC-1, Soueid allegedly expressed his belief that violence against protestors – including raiding their homes – was justified and that any method should be used to deal with the protestors. The indictment also alleges that Soueid provided information regarding U.S. protestors against the Syrian regime to an individual who worked at the Syrian Embassy in Washington, D.C.
On Aug. 3, 2011, FBI agents interviewed Soueid, and the indictment accuses him of lying to the agents when he denied that he had collected information on U.S. persons and transmitted that information to the government of Syria. In addition, Soueid allegedly made further false statements when he denied to FBI agents that he had directed someone to audio or videotape a conversation, meeting, rally or protest, or that he was aware of any individual taking photographs or videotaping people. He also allegedly made false statements when he denied that he had ever been an agent of the Syrian government or a foreign intelligence officer.
The indictment states that the day following the interview, Soueid asked UCC-1 to inform the Mukhabarat about his FBI interview.
In addition, the indictment alleges that, when purchasing a Beretta pistol on July 11, 2011, Soueid listed a false current residence address on a firearms purchase application and in records that were kept by a licensed firearms dealer.
This investigation is being conducted by the FBI’s Washington Field Office with assistance from the Loudon County, Va., Sheriff’s Office. The prosecution is being handled by Assistant U.S. Attorneys Dennis Fitzpatrick and Neil Hammerstrom of the U.S. Attorney’s Office for the Eastern District of Virginia and Trial Attorney Brandon L. Van Grack of the Counterespionage Section of the Justice Department’s National Security Division.
The public is reminded that an indictment contains mere allegations and that a defendant is presumed innocent unless and until proven guilty.
Statement of Attorney General Eric Holder on Guilty Plea by Umar Farouk AbdulmutallabRead the Press Release
WASHINGTON – Attorney General Eric Holder today issued the following statement on the guilty plea by Umar Farouk Abdulmutallab in the Eastern District of Michigan:
“Umar Farouk Abdulmutallab pleaded guilty today to all counts of an eight-count criminal indictment charging him for his role in the attempted Christmas Day 2009 bombing of Northwest Airlines flight 253 from Amsterdam to Detroit.
“Contrary to what some have claimed, today’s plea removes any doubt that our courts are one of the most effective tools we have to fight terrorism and keep the American people safe. Our priority in this case was to ensure that we arrested a man who tried to do us harm, that we collected actionable intelligence from him and that we prosecuted him in a way that was consistent with the rule of law. We will continue to be aggressive in our fight against terrorism and those who target us, and we will let results, not rhetoric, guide our actions.”
“Northwest Airlines flight 253 carried 281 passengers and 11 crewmembers, all of whom could have been killed or injured had this plot been successful. Today, Umar Farouk Abdulmutallab is being held accountable for the attempted murder of 291 innocent people and he will face a potential sentence of life in prison at sentencing on Jan. 12, 2012.”
“I want to thank all those who worked on this important investigation, particularly prosecutors from U.S. Attorney’s Office for the Eastern District of Michigan, the Counterterrorism Section of the Justice Department’s National Security Division, as well as the many investigators and analysts from the Detroit Joint Terrorism Task Force, which is led by the FBI and includes U.S. Customs and Border Protection, U.S. Immigration and Customs Enforcement, the Federal Air Marshal Service, and other law enforcement agencies.”
Owner of Houston Health Care Company Sentenced to 33 Months in Prison for Medicare FraudRead the Press Release
WASHINGTON – The owner and operator of a Houston durable medical equipment (DME) company was sentenced yesterday in Houston federal court to 33 months in prison for his role in a Medicare fraud scheme, announced the Department of Justice, the FBI and the Department of Health and Human Services (HHS).
Bassey Monday Idiong, 32, of Humble, Texas, was sentenced by U.S. District Judge Vanessa D. Gilmore. In addition to his prison term, Idiong was sentenced to two years of supervised release and was ordered to pay $527,023 in restitution.
Idiong pleaded guilty on March 1, 2010, to one count of conspiracy to commit health care fraud and five counts of health care fraud. Idiong owned and operated B.I. Medical Supply LLC.
According to court documents, Idiong paid patient recruiters kickbacks in exchange for the names of beneficiaries for whom bills could be submitted to Medicare. B.I. Medical billed Medicare for expensive, rigid orthotics and braces that were packaged together and referred to as an “arthritis kit,” at a cost of approximately $4,000 per kit. B.I. Medical then supplied the beneficiaries with different, less expensive products that were not medically necessary. Court documents indicate that in one instance, B.I. Medical billed Medicare for an arthritis kit that included two knee braces for a beneficiary who had only one leg. In total, B.I. Medical submitted approximately $846,000 in fraudulent claims to Medicare.
The sentence was 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), Office of Investigations; Joseph J. Del Favero, Special Agent-in-Charge of the Chicago Field Office of the Railroad Retirement Board Office of Inspector General; and the Texas Attorney General’s Medicaid Fraud Control Unit (MFCU).
The case was prosecuted by Trial Attorneys Laura Cordova, Katherine Houston and Jennifer Saulino 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, 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 .
Oil Company Pleads Guilty to Clean Air Act and Obstruction of Justice Crimes in LouisianaRead the Press Release
WASHINGTON – Pelican Refining Company LLC, pleaded guilty today to felony violations of the Clean Air Act and to obstruction of justice charges in federal court in Lafayette, La., announced Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division at the Department of Justice, Stephanie A. Finley, U.S. Attorney for the Western District of Louisiana, and Cynthia Giles, Assistant Administrator for the U.S. Environmental Protection Agency’s Office of Enforcement and Compliance Assurance.
If the court sentences according to the terms in today’s plea agreement, Pelican will pay $12 million in criminal penalties, including $2 million in community service payments that will go toward various environmental projects in Louisiana, including air pollution monitoring. Pelican would be banned from future refinery operations unless and until it implements an environmental compliance plan, which includes external auditing by independent firms and oversight by a court appointed monitor. It would mark the largest ever criminal fine in Louisiana for violations of the Clean Air Act.
In pleading guilty, officials of Pelican, headquartered in Houston and operating a refinery in Lake Charles, La., admitted that the company had violated numerous aspects of its permit to operate. The violations were discovered during a March 2006 inspection by the Louisiana Department of Environmental Quality (LDEQ) and the EPA, which identified numerous unsafe operating conditions. Pelican also pleaded guilty to obstruction of justice for submitting materially false deviation reports to LDEQ, the agency that administers the federal Clean Air Act in Louisiana.
Pelican has admitted to the following:
- Pelican had no company budget, no environmental department and no environmental manager;
- In order to comply with a permit issued under the Clean Air Act, the refinery was required to use certain key pollution prevention equipment, but that equipment was either not functioning, poorly maintained, improperly installed, improperly placed into service and/or improperly calibrated;
- It was a routine practice for over a year to use an emergency flare gun to re-light the flare tower at the refinery which was designed to burn off toxic gasses and provide for the safe combustion of potentially explosive chemicals; because the pilot light was not functioning properly, employees would take turns trying to shoot the flare gun to relight the explosive gasses;
- Sour crude oil was stored in a tank that was not properly placed into service and remained in the tank after the roof sank;
- A caustic scrubber designed to remove hydrogen sulfide from emissions was bypassed; and
- A continuous emission monitoring system (CEMS) designed to measure the hydrogen sulfide levels in refinery emissions was not working properly.
“Pelican had demonstrated a manifest disregard for accepted practices that are designed to protect human health and the environment,” said Assistant Attorney General Moreno. “Today, Pelican faces significant penalties for its egregious violations of its Clean Air Act permit and for submitting false information to state officials.”
“Louisiana is the sportsman’s paradise, and this corporation seriously jeopardized our precious environment. The citizens of our community should be appalled by such blatant environmental crimes. Going forward, this refinery will not be able to operate unless it is in full compliance with the law,” said U.S. Attorney Finley.
“Facilities that operate in our backyards have a responsibility to follow our nation's environmental laws, like the Clean Air Act, which is designed to protect the air we breathe and the local environment,” said Assistant Administrator Giles. “Today’s guilty plea shows that businesses that choose to ignore these critical safeguards and put their employees and the public at risk will face serious consequences.”
“Our nation’s environmental laws are designed to protect the air we breathe, the water we drink, and the local environment,” said Ivan Vikin, Special Agent in Charge of EPA’s criminal enforcement program in Louisiana. “Corporations have a responsibility to follow these laws and not cut corners. Today's action shows that if a business chooses to ignore these critical safeguards, putting employees and the public at risk, it can expect to pay a substantial price.”
“It’s unfortunate that an individual or business would skirt the law and put human health and the environment at risk, especially given the progress the state has made in improving air quality,” said Louisiana Department of Environmental Quality Secretary Peggy Hatch. “Hopefully, the efforts of LDEQ and its state, federal and local partners, will demonstrate that it can be very costly to put the people and environment at risk by disregarding state and federal regulations.”
“This case illustrates the level of cooperation between the investigative resources within our state and federal law enforcement partners,” said Colonel Mike Edmonson, Louisiana State Police Superintendent. “Louisiana's Environmental Crimes Task Force, consisting of investigators assigned from state police, LDEQ and EPA, remains committed to investigating and bringing to justice those persons or entities that violate the nation’s environmental laws and regulations.”
Byron Hamilton, the Pelican vice-president who oversaw operations at the Lake Charles refinery since 2005 from an office in Houston pleaded guilty on July 6, 2011, to negligently placing persons in imminent danger of death and serious bodily injury as a result of negligent releases at the refinery. Hamilton faces up to one year in prison and a $200,000 fine for each of the two Clean Air Act counts.
The government’s investigation of the Pelican Refinery is continuing. Under the Crime Victims’ Rights Act, crime victims are afforded certain statutory rights, including the opportunity to attend all public hearings and provide input to the prosecution. Any person adversely impacted is encouraged to visit www.justice.gov/usao/law/vicwit/index.html to learn more about the case and the Crime Victims’ Rights Act or you may contact the Victim Witness Coordinator for the U.S. Attorney’s Office, Western District of Louisiana, Vicki Chance at 318-676-3600.
The criminal investigation is being conducted by the EPA Criminal Investigation Division in Baton Rouge and the Louisiana State Police, with assistance from the Louisiana Department of Environmental Quality. The case is being prosecuted by U.S. Attorney Stephanie Finley, Richard A. Udell, Senior Trial Attorney and Trial Attorney Christopher Hale, both with the Environmental Crimes Section of the Environment and Natural Resources Division of the U.S. Department of Justice.
Copies of the Joint Factual Statement and Photographs filed in Court can be obtained by calling the contacts listed above or at the following link: www.epa.gov/compliance/criminal/investigations/pelican-exhibits.pdf
Husband and Wife Indicted for Investment Fraud SchemeRead the Press Release
WASHINGTON – A former FBI special agent and his wife were charged in an indictment unsealed yesterday for their roles in an alleged $1.3 million investment fraud scheme, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney for the Eastern District of Virginia Neil H. MacBride; Special Agent in Charge Michael Morehart of the FBI’s Richmond, Va., Field Office; and Keith A. Fixel, Inspector in Charge of the U.S. Postal Inspection Service (USPIS), Charlotte Division.
John Robert Graves, 52, and Sara Turberville Graves, 44, both of Fredericksburg, Va., are charged in the Eastern District of Virginia with one count of conspiracy to commit mail and wire fraud, one count of mail fraud and four counts of wire fraud. John Graves was also charged with three counts of Investment Adviser Act fraud and one count of making false statements. The Graves made their initial appearance in U.S. District Court in Richmond yesterday.
According to the indictment, John Graves founded Brook Point Management (BPM) in 2003 and served as president of BPM, a corporation through which he sold insurance, performed estate and tax planning services and recruited and advised investment clients. He was a certified financial planner and held numerous securities industry registrations, including the Series 7 and Series 65 registrations. Graves is a former FBI special agent who resigned from the FBI in 1999. The indictment alleges that between approximately June 2008 and July 2011, John Graves, Sara Graves and others devised and executed a scheme to defraud approximately 11 investors located in central Virginia of approximately $1.3 million.
As alleged in the indictment, John and Sara Graves raised investor funds through misrepresentations about the safety and security of the investments, as well as misrepresentations and omissions regarding their use of investor money. According to the indictment, John and Sara Graves used investor funds to, among other things, pay back previous investors who requested access to their money; purchase real estate in Partlow, Va.; and pay personal expenses, including credit card bills and time share dues. John Graves allegedly continued to make misrepresentations even after the scheme was uncovered, through false and misleading statements to the investors and to investigators from the U.S. Securities and Exchange Commission (SEC), FBI and USPIS.
The Graves face a maximum penalty of 20 years in prison for each count of conspiracy, mail and wire fraud, as well as a fine of up to $250,000 or twice the loss to the victims. In addition, John Graves faces a maximum penalty of five years in prison for each count of Investment Adviser Act fraud and a fine of up to $10,000 per count and five years in prison for the false statement count and a fine of up to $250,000.
This case was investigated by the FBI and USPIS. The department thanks these agencies, and the SEC, for their assistance. The case is being prosecuted by Trial Attorney Kevin B. Muhlendorf of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Jamie L. Mickelson of the Eastern District of Virginia.
A criminal indictment contains only charges and is not evidence of guilt. A defendant is presumed to be innocent until and unless proven guilty.
The investigation has been coordinated by the Virginia Financial and Securities Fraud Task Force, an unprecedented partnership between criminal investigators and civil regulators to investigate and prosecute complex financial fraud cases in the nation and in Virginia. The task force is an investigative arm of the President’s Financial Fraud Enforcement Task Force, an interagency national task force.
President Obama established the 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 .
Florida Couple and Utah Man Indicted for Alleged Roles in Procurement Fraud Scheme Involving Foreign Military MaterialsRead the Press Release
WASHINGTON — Three individuals were charged in an indictment returned today by a federal grand jury in Utah for their alleged roles in a bribery and fraud scheme involving federal procurement contracts, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney David B. Barlow for the District of Utah.
The four-count indictment returned today in U.S. District Court in Salt Lake City charges Sylvester Zugrav, 68, and Maria Zugrav, 66, both of Sarasota, Fla., and Jose Mendez, 49, of Farr West, Utah, with conspiracy to commit bribery and procurement fraud. The Zugravs and Mendez also are each charged with bribery. In addition, Mendez is charged with procurement fraud.
According to the indictment, Mendez worked as a program manager for the U.S. Air Force Foreign Materials Acquisition Support Office (FMASO). The mission of FMASO is to purchase foreign military materials on behalf of their customers, which are various U.S. military divisions. The materials are acquired outside of the United States by third party companies, or vendors, and then purchased by FMASO on behalf of its customers. There are a limited number of vendors permitted to contract for the sale of foreign materials to FMASO, one of which is Atlas International Trading Corporation (Atlas). According to the indictment, Sylvester and Maria Zugrav were the principals of Atlas.
According to the indictment, the Zugravs and Mendez conspired to enrich one another by exchanging money and other things of value for non-public information and favorable treatment in the procurement process. The Zugravs allegedly offered Mendez approximately $1,240,500 in payments and other things of value throughout the course of the conspiracy. The Zugravs allegedly made bribe payments to Mendez in three different ways: cash payments via FedEx to Mendez’s home address; in-person payments of cash and other things of value; and electronic wire transfers to a bank account in Mexico opened by and in the name of Mendez’s cousin. According to the indictment, from approximately 2008 to August 2011, the Zugravs gave Mendez and a person close to him more than $185,000 in payments and other things of value, with promises of additional bribe payments if Atlas were to receive future contracts for the sale of foreign materials to FMASO customers.
In return for the bribes offered and paid, Mendez allegedly gave Atlas and the Zugravs favorable treatment during the FMASO procurement process, including disclosing government budget and competitor bid information, which helped Atlas and the Zugravs in winning FMASO contracts.
According to the indictment, Mendez and Sylvester Zugrav allegedly communicated offers and requests for bribes in person and through email, and took steps to conceal their activity, using covert email addresses, password-protected computer documents, code words and false names. Within the encrypted documents, Mendez adopted the name “Chuco” and Sylvester Zugrav used the name “Jugo,” and they referred to cash as “literature.”
The Zugravs and Mendez each are charged with one count of conspiracy to commit bribery and procurement fraud, and one count of bribery. Mendez is also charged with one count of procurement fraud for disclosing non-public information to a separate FMASO vendor other than Atlas.
The maximum penalty for conspiracy is five years in prison and a $250,000 fine. The maximum penalty for procurement fraud is five years in prison and a $250,000 fine, while the maximum penalty for bribery is 15 years in prison and a $250,000 fine, or three times the monetary equivalent of the thing of value, whichever is greater. The indictment also seeks forfeiture from all three defendants, if convicted.
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.
The case is being investigated by the FBI and the Air Force Office of Special Investigations, Office of Special Projects. The case is being prosecuted by Trial Attorneys Marquest J. Meeks and Edward P. Sullivan of the Criminal Division’s Public Integrity Section, and Assistant U.S. Attorney Carlos A. Esqueda for the District of Utah.
Tuesday 11 October 2011
Two Men Charged in Alleged Plot to Assassinate Saudi Arabian Ambassador to the United StatesRead the Press Release
WASHINGTON – Two individuals have been charged in New York for their alleged participation in a plot directed by elements of the Iranian government to murder the Saudi Ambassador to the United States with explosives while the Ambassador was in the United States.
The charges were announced by Attorney General Eric Holder; FBI Director Robert S. Mueller; Lisa Monaco, Assistant Attorney General for National Security; and Preet Bharara, U.S. Attorney for the Southern District of New York.
A criminal complaint filed today in the Southern District of New York charges Manssor Arbabsiar, a 56-year-old naturalized U.S. citizen holding both Iranian and U.S. passports, and Gholam Shakuri, an Iran-based member of Iran’s Qods Force, which is a special operations unit of the Iranian Islamic Revolutionary Guard Corps (IRGC) that is said to sponsor and promote terrorist activities abroad.
Both defendants are charged with conspiracy to murder a foreign official; conspiracy to engage in foreign travel and use of interstate and foreign commerce facilities in the commission of murder-for-hire; conspiracy to use a weapon of mass destruction (explosives); and conspiracy to commit an act of international terrorism transcending national boundaries. Arbabsiar is further charged with an additional count of foreign travel and use of interstate and foreign commerce facilities in the commission of murder-for-hire.
Shakuri remains at large. Arbabsiar was arrested on Sept. 29, 2011, at New York’s John F. Kennedy International Airport and will make his initial appearance today before in federal court in Manhattan. He faces a maximum potential sentence of life in prison if convicted of all the charges.
“ The criminal complaint unsealed today exposes a deadly plot directed by factions of the Iranian government to assassinate a foreign Ambassador on U.S. soil with explosives,” said Attorney General Holder. “Through the diligent and coordinated efforts of our law enforcement and intelligence agencies, we were able to disrupt this plot before anyone was harmed. We will continue to investigate this matter vigorously and bring those who have violated any laws to justice.”
“The investigation leading to today’s charges illustrates both the challenges and complexities of the international threat environment, and our increased ability today to bring together the intelligence and law enforcement resources necessary to better identify and disrupt those threats, regardless of their origin,” said FBI Director Mueller.
“The disruption of this plot is a significant milestone that stems from months of hard work by our law enforcement and intelligence professionals,” said Assistant Attorney General Monaco. “I applaud the many agents, analysts and prosecutors who helped bring about today’s case.”
“As alleged, these defendants were part of a well-funded and pernicious plot that had, as its first priority, the assassination of the Saudi Ambassador to the United States, without care or concern for the mass casualties that would result from their planned attack,” said U.S. Attorney Bharara. “Today’s charges should make crystal clear that we will not let other countries use our soil as their battleground.”
The Alleged Plot
The criminal complaint alleges that, from the spring of 2011 to October 2011, Arbabsiar and his Iran-based co-conspirators, including Shakuri of the Qods Force, have been plotting the murder of the Saudi Ambassador to the United States. In furtherance of this conspiracy, Arbabsiar allegedly met on a number of occasions in Mexico with a DEA confidential source (CS-1) who has posed as an associate of a violent international drug trafficking cartel. According to the complaint, Arbabsiar arranged to hire CS-1 and CS-1’s purported accomplices to murder the Ambassador, and Shakuri and other Iran-based co-conspirators were aware of and approved the plan. With Shakuri’s approval, Arbabsiar has allegedly caused approximately $100,000 to be wired into a bank account in the United States as a down payment to CS-1 for the anticipated killing of the Ambassador, which was to take place in the United States.
According to the criminal complaint, the IRCG is an arm of the Iranian military that is composed of a number of branches, one of which is the Qods Force. The Qods Force conducts sensitive covert operations abroad, including terrorist attacks, assassinations and kidnappings, and is believed to sponsor attacks against Coalition Forces in Iraq. In October 2007, the U.S. Treasury Department designated the Qods Force for providing material support to the Taliban and other terrorist organizations.
The complaint alleges that Arbabsiar met with CS-1 in Mexico on May 24, 2011, where Arbabsiar inquired as to CS-1’s knowledge with respect to explosives and explained that he was interested in, among other things, attacking an embassy of Saudi Arabia. In response, CS-1 allegedly indicated that he was knowledgeable with respect to C-4 explosives. In June and July 2011, the complaint alleges, Arbabsiar returned to Mexico and held additional meetings with CS-1, where Arbabsiar explained that his associates in Iran had discussed a number of violent missions for CS-1 and his associates to perform, including the murder of the Ambassador.
$1.5 Million Fee for Alleged Assassination
In a July 14, 2011, meeting in Mexico, CS-1 allegedly told Arbabsiar that he would need to use four men to carry out the Ambassador’s murder and that his price for carrying out the murder was $1.5 million. Arbabsiar allegedly agreed and stated that the murder of the Ambassador should be handled first, before the execution of other attacks. Arbabsiar also allegedly indicated he and his associates had $100,000 in Iran to pay CS-1 as a first payment toward the assassination and discussed the manner in which that payment would be made.
During the same meeting, Arbabsiar allegedly described to CS-1 his cousin in Iran, who he said had requested that Arbabsiar find someone to carry out the Ambassador’s assassination. According to the complaint, Arbabsiar indicated that his cousin was a “big general” in the Iranian military; that he focuses on matters outside Iran and that he had taken certain unspecified actions related to a bombing in Iraq.
In a July 17, 2011, meeting in Mexico, CS-1 noted to Arbabsiar that one of his workers had already traveled to Washington, D.C., to surveill the Ambassador. CS-1 also raised the possibility of innocent bystander casualties. The complaint alleges that Arbabsiar made it clear that the assassination needed to go forward, despite mass casualties, telling CS-1, “They want that guy [the Ambassador] done [killed], if the hundred go with him f**k ‘em.” CS-1 and Arbabsiar allegedly discussed bombing a restaurant in the United States that the Ambassador frequented. When CS-1 noted that others could be killed in the attack, including U.S. senators who dine at the restaurant, Arbabsiar allegedly dismissed these concerns as “no big deal.”
On Aug. 1, and Aug. 9, 2011, with Shakuri’s approval, Arbabsiar allegedly caused two overseas wire transfers totaling approximately $100,000 to be sent to an FBI undercover account as a down payment for CS-1 to carry out the assassination. Later, Arbabsiar allegedly explained to CS-1 that he would provide the remainder of the $1.5 million after the assassination. On Sept. 20, 2011, CS-1 allegedly told Arbabsiar that the operation was ready and requested that Arbabsiar either pay one half of the agreed upon price ($1.5 million) for the murder or that Arbabsiar personally travel to Mexico as collateral for the final payment of the fee. According to the complaint, Arbabsiar agreed to travel to Mexico to guarantee final payment for the murder.
Arrest and Alleged Confession
On or about Sept. 28, 2011, Arbabsiar flew to Mexico. Arbabsiar was refused entry into Mexico by Mexican authorities and, according to Mexican law and international agreements; he was placed on a return flight destined for his last point of departure. On Sept. 29, 2011, Arbabsiar was arrested by federal agents during a flight layover at JFK International Airport in New York. Several hours after his arrest, Arbabsiar was advised of his Miranda rights and he agreed to waive those rights and speak with law enforcement agents. During a series of Mirandized interviews, Arbabsiar allegedly confessed to his participation in the murder plot.
According to the complaint, Arbabsiar also admitted to agents that, in connection with this plot, he was recruited, funded and directed by men he understood to be senior officials in Iran’s Qods Force. He allegedly said these Iranian officials were aware of and approved of the use of CS-1 in connection with the plot; as well as payments to CS-1; the means by which the Ambassador would be killed in the United States and the casualties that would likely result.
Arbabsiar allegedly told agents that his cousin, who he had long understood to be a senior member of the Qods Force, had approached him in the early spring of 2011 about recruiting narco-traffickers to kidnap the Ambassador. Arbabsiar told agents that he then met with the CS-1 in Mexico and discussed assassinating the Ambassador. According to the complaint, Arbabsiar said that, afterwards, he met several times in Iran with Shakuri and another senior Qods Force official, where he explained that the plan was to blow up a restaurant in the United States frequented by the Ambassador and that numerous bystanders could be killed, according to the complaint. The plan was allegedly approved by these officials.
In October 2011, according to the complaint, Arbabsiar made phone calls at the direction of law enforcement to Shakuri in Iran that were monitored. During these phone calls, Shakuri allegedly confirmed that Arbabsiar should move forward with the plot to murder the Ambassador and that he should accomplish the task as quickly as possible, stating on Oct. 5, 2011, “[j]ust do it quickly, it’s late . . .” The complaint alleges that Shakuri also told Arbabsiar that he would consult with his superiors about whether they would be willing to pay CS-1 additional money.
This investigation is being conducted by the FBI Houston Division and DEA Houston Division, with assistance from the FBI New York Joint Terrorism Task Force. The prosecution is being handled by Assistant U.S. Attorneys Glen Kopp and Edward Kim, of the Terrorism and International Narcotics Unit of the U.S. Attorney’s Office for the Southern District of New York, with assistance from the Counterterrorism Section of the Justice Department’s National Security Division. The Office of International Affairs of the Justice Department’s Criminal Division and the U.S. State Department provided substantial assistance. We thank the government of Mexico for its close coordination and collaboration in this matter, and for its role in ensuring that the defendant was safely apprehended.
The charges contained in a criminal complaint are mere allegations and defendants are presumed innocent unless and until proven guilty.
Texas Natural Gas and Oil Drilling Contractor Pleads Guilty to Negligent Violation of Clean Water Act in OklahomaRead the Press Release
WASHINGTON – Integrated Production Services, LLC, (IPS), a Houston-based natural gas and oil drilling contractor, pleaded guilty today to a negligent violation of the Clean Water Act in federal court in Muskogee, Okla., announced Assistant Attorney General Ignacia S. Moreno for the Justice Department’s Environment and Natural Resources Division, and Mark Green, U.S. Attorney for the Eastern District of Oklahoma.
In entering the plea, which is subject to approval by the court, IPS has agreed to pay a $140,000 criminal fine and to make a community service payment of $22,000 to the Oklahoma Department of Wildlife Conservation for ecological studies and remediation of Boggy Creek, located in eastern Oklahoma. IPS will serve a two-year period of probation, during which it will be required to implement and perform an environmental compliance program at a cost of $38,000, to train IPS employees regarding proper hazardous waste handling and spill response procedures.
In May 2007, IPS was performing drilling operations at the Pettigrew natural gas well site in Atoka County, Okla. The company’s operations included hydraulic fracturing, which entails the use of drills and hydrochloric acid to penetrate through bedrock and substrata in order to access natural gas reserves. On May 24, 2007, a tank at the site leaked hydrochloric acid onto the bermed surface of the well, which also was flooded due to recent heavy rainfall. Rather than taking the necessary steps to properly remove the rainwater from the site, Gabriel Henson, an IPS supervisor, drove a company pickup truck through the earthen berm, causing the discharge of the rainwater and an estimated 400-700 gallons of hydrochloric acid into Dry Creek, a tributary of Boggy Creek.
On July 20, 2011, Henson pleaded guilty to a misdemeanor violation of the Clean Water Act. Henson is awaiting sentencing. He faces up to one year in prison and a $100,000 fine.
“As hydraulic fracturing occurs with increasing frequency across the country, companies and individuals involved in those operations must adhere to the laws that protect human health and the environment and level the playing field for responsible businesses,” said Assistant Attorney General Moreno. “We recognize the critical importance of developing domestic sources of energy responsibly, and will continue to vigorously prosecute illegal conduct.”
“This was a case of a corporate employee making a careless decision that caused the release of dangerous hydrochloric acid into our waters,” said U.S. Attorney Green. “Whether to expedite oil production or to save corporate expense, these types of actions cannot be justified nor can they be tolerated. This office will pursue all legal remedies necessary to prevent and/or punish such actions.”
“Hydrochloric acid is a highly corrosive substance. Its release into a tributary of Boggy Creek was a serious threat to the environment,” said Ivan Vikin, Special Agent-in-Charge of the U.S. Environmental Protection Agency’s (EPA) criminal enforcement program in Oklahoma. “Today’s guilty plea demonstrates that companies will be held responsible for environmental crimes.”
This case was investigated by the U.S. EPA Criminal Investigation Division and the Oklahoma Attorney General’s Office of Inspector General. The case is a joint prosecution between the U.S. Attorney’s Office for the Eastern District of Oklahoma and the Environmental Crimes Section of the U.S. Department of Justice, Environment and Natural Resources Division.
Pennsylvania Man Convicted of Tax CrimesRead the Press Release
WASHINGTON – Dennis Glick of Huntington Valley, Penn., was found guilty today by a federal jury in Philadelphia of corruptly endeavoring to obstruct and impede the Internal Revenue laws and willfully preparing false tax returns, the Justice Department and Internal Revenue Service (IRS) announced today. District Judge Petrese Tucker presided over the case.
According to testimony and evidence presented at trial, Glick, a certified public accountant, prepared materially false tax returns for his client Jonathon Felix, previously indicted for the years 1999 through 2002. The evidence showed that Glick did this in 2004, despite knowing that Felix was the owner of an S corporation called United Professional Plans Inc. (UPPI) and that Felix had removed such significant funds from UPPI during these years that he caused UPPI to lose its clients and close down.
Glick falsified Felix’s tax returns by including fabricated management fee figures on these returns to get to a “break even point”—i.e., to yield a small refund in each year. In addition, the testimony and evidence proved that when federal law enforcement agents asked Glick about these management fees, he lied about what he did on two occasions. Glick’s criminal conduct caused a tax loss of over $400,000 to the IRS.
Glick faces a maximum punishment of up to 15 years in prison and a $1.25 million fine. Judge Tucker scheduled sentencing for Jan. 9, 2012.
The case was investigated by IRS-Criminal Investigation and the Department of Labor’s Office of Inspector General and prosecuted by Assistant U.S. Attorney Floyd Miller and Justice Department Tax Division Trial Attorney Patrick J. Murray.
More information about the Tax Division and its enforcement efforts can be found at www.justice.gov/tax .
Ohio Man Found Guilty for His Participation in Online Child Pornography Bulletin BoardRead the Press Release
WASHINGTON – Billy Wade Carroll, 51, of Dayton, Ohio, was found guilty today in U.S. District Court in Riverside, Calif., for his participation in an online child pornography bulletin board, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division, U.S. Attorney André Birotte Jr. of the Central District of California and Assistant Director in Charge Steve Martinez of the FBI’s Los Angeles Field Office.
A federal jury in the Central District of California found Carroll guilty of one count of conspiracy to advertise, solicit, transport, distribute, receive and possess child pornography and one count of committing a child pornography offense while being required to register as a sex offender in Ohio.
Today’s conviction is the result of an international investigation into the “Lost Boy” online bulletin board. Federal authorities, working in conjunction with a coalition of international law enforcement agencies, shut down the Lost Boy bulletin board more than two years ago. As a result of the investigation, 16 U.S. members of the bulletin board have been identified, charged and arrested for their roles in the bulletin board and to date, 15 of those defendants, including Carroll, have been convicted.Evidence presented at trial established that from at least September 2007 until January 2009, Carroll was an active member of the bulletin board and made more than 100 posts. He supplied images of child pornography for other members to download and also made requests on the board seeking out particular images to help supplement his child pornography collection.
The Lost Boy bulletin board, according to court documents and proceedings, was dedicated to men who have a sexual interest in young boys and was established to provide a forum to trade child pornography. Lost Boy had a thorough vetting process for new members, who were required to post child pornography to join the organization. Once accepted, members had to continue to post child pornography to remain in good standing and not be removed from the board. According to court documents, Lost Boy members advised each other on techniques to evade detection by law enforcement, which included using screen names to mask identities and encrypting computer data.
According to court documents and proceedings, law enforcement authorities discovered the Lost Boy bulletin board after receiving information from Eurojust, a judicial agency of the European Union (EU) facilitating the coordination of investigations and prosecutions among EU member states. Eurojust provided U.S. law enforcement with leads obtained from Norwegian and Italian authorities indicating that a North Hollywood, Calif., man was communicating with an Italian national about child pornography and how to engage in child sex tourism in Romania. Acting on the information from Europe, the FBI executed search warrants that led to the discovery of the Lost Boy network. Further investigation revealed that Lost Boy had 35 members, 16 of whom were U.S. nationals. Other members of the network were located in countries around the world, including Belgium, Brazil, Canada, France, Germany, New Zealand and the United Kingdom.
In addition to the charges against the 16 U.S. members of the bulletin board, the Lost Boy investigation has led to the identification and arrest of six other individuals who allegedly engaged in child molestation. The investigation also led to the identification of 27 U.S. victims of child abuse, some of whom were portrayed in images posted to the Lost Boy bulletin board.
International law enforcement efforts involving European law enforcement, the Brazilian Federal Police and other agencies have identified child molestation suspects in South America, Europe and New Zealand. Three suspects in Romania, one in France and another in Brazil have been charged, and offenders have been convicted in Norway and the United Kingdom. Law enforcement efforts have also identified dozens of child victims located in Norway, Romania, Brazil and other nations.
The investigation into the Lost Boy bulletin board was led by the FBI and the U.S. Postal Inspection Service, in conjunction with the Los Angeles-based Sexual Assault Felony Enforcement (SAFE) Team. The High Technology Investigative Unit of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), along with Eurojust, have provided invaluable assistance during the investigation.
The case is being prosecuted by Assistant U.S. Attorneys Joey L. Blanch and Yvonne Garcia of the Central District of California and Trial Attorney Andrew McCormack of the Criminal Division’s CEOS.