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Wednesday 21 September 2011
Member of Rhode Island La Cosa Nostra Sentenced to 84 Months in Prison for Role in Murder-For-Hire CaseRead the Press Release
WASHINGTON – Anthony St. Laurent Sr., 70, was sentenced today to 84 months in prison for his role in an attempted murder-for-hire, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney Peter F. Neronha for the District of Rhode Island and Richard DesLauriers, Special Agent in Charge of the FBI’s Boston Field Office.
St. Laurent Sr. also was ordered by U.S. District Judge William E. Smith in federal court in Providence, R.I., to serve three years of supervised release following his prison term. St. Laurent Sr. previously acknowledged in a written plea agreement his participation in an extortion conspiracy outlined in a criminal complaint in which he, his wife Dorothy St. Laurent, his son Anthony St. Laurent Jr. and others extorted protection money from bookmakers in the Taunton, Mass.-area under the threat of violence. St. Laurent Sr. acknowledged in his plea agreement that he is a “made” member of the New England branch of the La Cosa Nostra (NELCN).
According to information presented in court, in 2006 and 2007, St. Laurent Sr. offered money to individuals, including some known to be violent criminals, to murder Robert “Bobby” DeLuca, another “made” member of the NELCN, in retaliation for Deluca having publicly accused St. Laurent Sr. of being a government informant. According to information presented in court, St. Laurent Sr. phoned an individual in Massachusetts to set up a meeting in Rhode Island on April 12, 2006, at which he solicited the individual to kill DeLuca.
Anthony St. Laurent Jr. was sentenced in December 2010 to 78 months in prison, followed by three years of supervised release, to include 500 hours of community service each year during the term of supervised release for his role in the extortion conspiracy. Dorothy St. Laurent was sentenced in December 2010 to three years of probation, the first six months of which were served in home confinement. She also was ordered to perform 500 hours of community service per year during the term of supervised release.
The case was prosecuted by Trial Attorney Sam Nazzaro of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorney William J. Ferland for the District of Rhode Island.
The matter was investigated by the FBI, with the assistance of the Rhode Island State Police and the Providence Police Department.
Last of 10 Las Vegas Defendants Sentenced for Falsifying Emissions Test RecordsRead the Press Release
WASHINGTON – William Joseph McCown, 49, of Las Vegas, was sentenced today before District Judge Lloyd D. George of the U.S. District Court for the District of Nevada. McCown was arrested in Las Vegas in June of 2010. McCown previously entered a plea of guilty in February of this year to one count of violating the Clean Air Act (CAA) by falsifying emissions testing results, announced the Environment and Natural Resources Division of the Department of Justice, the U.S. Attorney’s Office for the District of Nevada and the U.S. Environmental Protection Agency (EPA).
A grand jury in Las Vegas indicted McCown in January 2010 along with nine other defendants, all from different testing locations, accused of similarly submitting false tests to the Nevada Department of Motor Vehicles (NDMV). The cases came to the attention of Nevada authorities in 2008 when the NDMV’s in-house Information Technology Division built a vehicle identification database to find possible emissions testing fraud. NDMV discovered that in 2008 alone, there were more than 4,000 false vehicle emissions certificates issued in Las Vegas.
“The emissions testing program required by the EPA and implemented by the state of Nevada is critical for the reduction of harmful pollutants in our air,” said U.S. Attorney Daniel G. Bogden. “As these cases demonstrate, persons who try to circumvent the testing laws by submitting false documents and committing fraud will be prosecuted and face the possibility of prison time and fines.”
“Complete and accurate tests of vehicle emissions are necessary to protect the public from harmful air pollutants,” said Nick Torres, Special Agent in Charge of EPA’s criminal enforcement program in Nevada. “This defendant is the last of ten emissions inspectors who were convicted of knowingly falsifying emissions documents. EPA will continue working with its law enforcement partners to protect the public and the environment.”
EPA requires, under the CAA, that the state of Nevada conduct vehicle emissions testing in Carson County (Las Vegas) because the area is in serious nonattainment for carbon monoxide and ozone. The NDMV developed the Nevada Emissions Control Program to implement the vehicle emission inspection program required by EPA, and EPA approved the program as part of Nevada’s State Implementation Plan. The emission control program authorizes second generation on-board diagnostics emission tests (OBDII) for 1996 and newer gasoline-powered vehicles at more than 400 licensed inspection stations. New vehicles are exempt from testing for the first and second registration cycle.
To obtain a registration renewal, vehicle owners bring the vehicle to a licensed inspection station and pay up to a $46.00 fee, depending on the vehicle, for testing. State licensed emissions inspectors perform the OBDII inspections using an emissions analyzer purchased from a state contractor. The analyzer downloads data from the vehicle's computer via the OBDII connection, analyzes the data and provides a “pass” or “fail” result. The pass or fail result and vehicle identification data are reported on the Vehicle Inspection Report. In addition to recording the pass or fail result, the analyzer also logs, as part of the inspection report, the electronic vehicle identification number (E-VIN) from the vehicle’s computer. The E-VIN and the VIN affixed to the dash-plate on the vehicle should be the same.
By analyzing data Nevada DMV was able to detect so-called “clean-scanning,” a process whereby emissions inspectors enter identifying data for a vehicle that they want to pass the inspection and then connect the analyzer to a different vehicle that they know will pass the test. The analyzer and database both record a pass result for the inspection report under the VIN provided by the emissions inspector, but will show a mismatch between the reported VIN and the E-VIN downloaded directly from the vehicle.
Ultimately, 10 inspectors were targeted for prosecution based upon the number of clean-scans performed. Nine of these inspectors had more than 200 falsifications with one inspector reaching more than 750. Investigators included only “hard” as opposed to “soft” mismatches for prosecution. Soft mismatches are those where the vehicle used to clean-scan is the same manufacturer as the vehicle that cannot pass the test. Because the VIN numbers may appear similar, it could be argued that there is a transposition or database error. Hard mismatches occur where the two vehicles are of different makes and models. Testing a Toyota and giving a testing pass result to a Ford could never be attributed to a transpositional error.
All 10 defendants eventually pleaded guilty to CAA felonies. The sentences ranged from straight probation (three years for most, five years in one instance) to eight months of home confinement.
Mr. McCown conducted the most falsifications (758). Judge George sentenced McCown to four years of probation, a $4,000 fine and a $100 special assessment.
The case was investigated by the U.S. Environmental Protection Agency and the Nevada Division of Motor Vehicles. The case was prosecuted by Assistant U.S. Attorney, Roger Yang from the District of Nevada and Senior Trial Attorney J. Ronald Sutcliffe of the Environmental Crimes Section of the Justice Department’s Environment and Natural Resources Division.
Justice Department Settles Housing Discrimination Lawsuit in Waterloo, IowaRead the Press Release
WASHINGTON – The Justice Department today announced a $95,000 settlement to resolve a lawsuit alleging that the former manager of Park Towers Apartments in Waterloo, Iowa, sexually harassed female tenants at the complex.
The lawsuit alleges that Michael Nieman, the former on-site manager of Park Towers, sexually harassed female tenants in violation of the Fair Housing Act. The lawsuit further alleges that Elders Inc., which owned the building, and J.S. Property Management L.C., which managed the property, were liable for Nieman’s actions. Since the lawsuit was filed in 2010, in the U.S. District Court for the Northern District of Iowa, all of the defendants have ceased to work in the residential rental business.
The consent decree, pending approval by the court, will require the defendants to pay $80,000 to 10 victims and $15,000 to the United States as a civil penalty. The consent decree also prohibits the defendants from engaging in discrimination and contains a provision preventing Nieman from returning to work in the management, rental or maintenance of rental housing.
“Sexual harassment by a landlord or property manager violates a woman’s right to feel safe and secure in her home,” said Thomas E. Perez, Assistant Attorney General for the Justice Department’s Civil Rights Division. “This settlement sends the message that such harassment will not be tolerated, and that the Civil Rights Division will aggressively pursue landlords who engage in it.”
“This order ensures that Mr. Nieman will never again be in a position to harass and mistreat Iowans in need of housing,” said U.S. Attorney for the Northern District of Iowa Stephanie Rose. “It also serves as a warning to other landlords that they will be held accountable if they engage in or enable others to engage in acts of sexual harassment against tenants.”
This lawsuit arose as a result of complaints filed with the U.S. Department of Housing and Urban Development (HUD) by two former tenants. After investigating the complaints, HUD issued a charge of discrimination and referred the case to the Department of Justice.
“Harassment victims are not alone in the fight to protect their housing rights. HUD and the Department of Justice work vigorously to protect women and enforce their right to live free from discrimination,” said John Trasviña, HUD’s Assistant Secretary for Fair Housing and Equal Opportunity.
Fighting illegal housing discrimination is a top priority of the Department of Justice. The federal Fair Housing Act prohibits discrimination in housing based on race, color, religion, national origin, sex, disability and familial status. More information about the Civil Rights Division and the laws it enforces is available at www.usdoj.gov/crt . Individuals who believe that they may have been victims of housing discrimination can call the Housing Discrimination Tip Line at 1-800-896-7743, e-mail the Justice Department at [email protected] , or contact HUD at 1-800-669-9777.
Justice Department Sends to Congress Legislative Proposals to Strengthen Existing Laws Protecting ServicemembersRead the Press Release
WASHINGTON Late yesterday, the Justice Department sent to Congress a package of legislative proposals that will significantly enhance the department’s ability to protect the rights of members of the military and their families. The package contains three titles, with proposed amendments to each of the three servicemember civil rights statutes that the Civil Rights Division enforces. Each of these laws was enacted by Congress with broad, bipartisan support, and the proposals offered by the department will make the protections they provide even stronger.
“Our men and women in uniform and their families make sacrifices every single day for this country, and we have an obligation to take every possible measure to lessen burdens in their lives,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “These legislative proposals will give the department the tools to better protect the rights of servicemembers in the housing, lending, voting and employment contexts. We believe that this bill, if enacted, will improve the lives of those who have served so honorably to protect our freedom, our families and our nation.”
Title I of the proposal would amend the Servicemembers Civil Relief Act (SCRA). The SCRA suspends certain financial obligations of active duty servicemembers so that they can focus full attention on their military responsibilities without adverse consequences for themselves and their families. The relief authorized under the SCRA includes civil protections and the temporary suspension of legal proceedings in areas such as mortgage interest rate payments and foreclosure, rental agreements, and credit card and auto loans. This year the department reached its largest settlement ever under the SCRA, under which Bank of America/Countrywide will pay $20 million to resolve allegations that they illegally foreclosed upon servicemembers without court orders. The proposed legislation would further strengthen the department’s ability to enforce the SCRA by, for example, doubling the amount of civil penalties for those who violate servicemembers’ rights and permitting the Attorney General to issue civil investigative demands to obtain documents.
Title II would amend the Uniformed and Overseas Citizens Absentee Voting Act (UOCAVA). In 2009, Congress amended UOCAVA by passing the Military and Overseas Voter Empowerment Act (MOVE Act), which established new voter registration and absentee ballot procedures that states must follow in all federal elections to make sure that servicemembers and overseas voters have the opportunity to vote and to have their votes counted. During the 2010 general election, the Justice Department aggressively enforced the MOVE Act, ensuring thousands of military and overseas voters had the opportunity to cast their ballots despite the failure of some election officials to send out ballots on time. These activities constituted the largest enforcement effort by the Voting Section under any single statute in any federal election cycle.
To better address the delays in sending absentee ballots to military and overseas voters that occurred in the 2010 election cycle, and improve implementation of the MOVE Act’s new procedures, the Justice Department’s proposed amendments would, among other things, require states to submit pre-election reports on the status of ballot transmission to military and overseas voters; eliminate the waiver provision in favor of a uniform, nationwide standard that equally protects all military and overseas voters; require states that miss a deadline to mail ballots by express delivery; authorize civil penalties; and establish an express private right of action for individuals aggrieved under the act.
Title III would amend the Uniformed Services Employment and Reemployment Rights Act (USERRA). USERRA entitles servicemembers to return to their civilian employment upon completion of their military service with the seniority, status and rate of pay that they would have obtained had they remained continuously employed by their civilian employer. In ad dition, USERRA protects servicemembers from discrimination in the workplace based on their military service or affiliation. The Civil Rights Division has ramped up enforcement of USERRA in the last two and half years, filing 33 cases, which exceeds the number of cases filed in the previous four years. The department’s proposals would further strengthen protection of servicemembers’ employment rights by, for example, authorizing the department to investigate and bring suit to stop a pattern or practice of USERRA violations, and allowing the United States to serve as a named plaintiff in all suits filed by the department, as opposed to only those suits filed against state employers.
For more information about the department’s work on behalf of servicemembers, please visit www.servicemembers.gov.
Justice Department Charges South Carolina Landlord with Discrimination Against Families with ChildrenRead the Press Release
WASHINGTON – The Justice Department today filed a lawsuit against a Charleston, S.C.-area landlord for violating the Fair Housing Act by discriminating against families with children.
The lawsuit, filed in the U.S. District Court for the District of South Carolina, charges that John Wingard Altman, through published advertisements and statements to testers, maintains a policy or practice of discouraging families with children from living in the apartment complex he owns, located at 1211 Central Avenue, in Summerville, S.C. The allegations are based on evidence generated by the department’s Fair Housing Testing Program, in which individuals pose as renters to gather information about possible discriminatory practices.
“Housing discrimination against families with children has been illegal for more than 20 years, but it remains a persistent problem,” said Thomas E. Perez, Assistant Attorney General for the Justice Department’s Civil Rights Division. “The Justice Department will continue its vigorous enforcement of fair housing laws that protect the rights of families with children.”
“Housing is one of those fundamental needs and we simply will not tolerate unlawful discrimination in any form,” said William M. Nettles, U.S. Attorney for the District of South Carolina.
The lawsuit seeks a court order prohibiting future discrimination by the defendant, monetary damages for those harmed by the defendant’s actions and a civil penalty.
Individuals who may have information related to this lawsuit should contact the Justice Department toll-free at 1-800-896-7743, mailbox number 9998, or e-mail the Justice Department at [email protected] . The federal Fair Housing Act prohibits discrimination in housing on the basis of race, color, religion, sex, familial status, national origin and disability. More information about the Civil Rights Division and the laws it enforces is available at www.justice.gov/crt .
The complaint is an allegation of unlawful conduct. The allegations must still be proven in federal court.
Former Texas Correctional Officer Pleads Guilty to Using Excessive ForceRead the Press Release
SAN ANTONIO – A former Bexar County, Texas, Sheriff’s Office deputy pleaded guilty today in federal court in San Antonio to civil rights charges related to the use of excessive force against a detainee, the Justice Department announced.
Raymond Quintero, 33, pleaded guilty to willfully depriving a detainee of his constitutional right to be free from excessive force amounting to punishment.
“A law enforcement uniform does not give an officer the right to violate the civil rights of those under his supervision,” said Thomas E. Perez, Assistant Attorney General of the Civil Rights Division. “The Department of Justice will aggressively prosecute those law enforcement officials who violate the law and the public trust.”
During his guilty plea, Quintero, admitted that on Oct. 8, 2007, he was working as a detention officer at the Bexar County Adult Detention Center and was responsible for the custody, control, care and safety of inmates. On that date, Quintero threw a detainee against a closet wall. Quintero admitted that his conduct constituted excessive force and violated the detainee’s civil rights.
Sentencing has been scheduled for Dec. 29, 2011. Quintero faces up to 10 years in prison and a maximum fine of $250,000.
This case was investigated by Special Agent Mirella Rodriguez of the San Antonio Division of the FBI with assistance from the Bexar County Sheriff’s Office, and is being prosecuted by Assistant U.S. Attorney Bill Baumann of the Western District of Texas and Civil Rights Division Trial Attorney Christopher Lomax.
Federal Court Shuts Down South Florida Tax Return PreparerRead the Press Release
WASHINGTON – A federal court in Fort Lauderdale, Fla., has permanently barred Danesa Webb from preparing federal tax returns for others, the Justice Department announced today. In the civil injunction order issued by Judge William P. Dimitrouleas, the court found that Webb, of Broward County, Fla., prepared returns for her customers that falsely claimed several tax credits and reported false income and expenses. Webb did not contest the government’s allegations.
The court found that many of Webb’s customers were homeless and had no income, and that she “targeted and victimized unsuspecting distressed individuals with the promise of quick and easy cash.” According to the court’s order, Webb or her agents falsely told individuals that they were eligible for special credits or funds offered by the federal government, prepared tax returns for them with fabricated information and took a sizable portion of the tax refunds as a fee.
The court’s order states that one of the falsely-claimed tax credits was the first-time-homebuyer credit, which Congress enacted in 2008 to strengthen the real estate market and help the economy. Persons who had not owned a home in the previous three years could claim a credit of up to $8,000 against their federal income taxes if they bought a home after April 8, 2008. Congress later expanded the program to allow current homeowners to claim the credit for a purchase of a new home, under certain conditions. The credit has since expired.
According to the court’s order, Webb claimed the first-time-homebuyer credit on her customers’ tax returns even though she knew the customers had not bought new homes. The order also states that Webb claimed fabricated business deductions and education credits on some customers’ returns, and on other returns she failed to report the proper amounts of her customers’ incomes. At times, according to the order, Webb prepared returns for persons without those persons’ knowledge.
Return preparer fraud is identified by the Internal Revenue Service as one of the “Dirty Dozen” tax scams taxpayers are urged to avoid. In the past decade, the Justice Department’s Tax Division has obtained hundreds of injunctions to stop the promotion of tax fraud schemes and the preparation of fraudulent returns. Information about these cases is available on the Justice Departmentwebsite .
Alabama Defense Contractor and Its President to Pay $200,000 to Resolve False Claims Act AllegationsRead the Press Release
WASHINGTON – Future Research Corp., located in Huntsville, Ala., and its president, Jesse Nunn, have agreed to pay the United States $200,000 to settle claims that they inappropriately obtained contracts from the Navy, the Justice Department announced today. The contracts had been set aside for companies that qualified for the Small Business Administration’s (SBA) Historically Underutilized Business Zone (HUBZone) program. Future Research Corp. bid on and received the Navy contracts even though it was not qualified for the HUBZone program at that time.
Under the HUBZone program, companies that maintain their principal office in a designated HUBZone and employ 35 percent of their workforce from a HUBZone, among other requirements, can apply to the SBA for certification as a HUBZone small business company. HUBZone companies can then use this certification when bidding on government contracts. In certain cases, government agencies will restrict competition for a contract to HUBZone-certified companies.
The United States alleged that Future Research Corp. did not actually maintain its principal office in a designated HUBZone location in Huntsville at the time it bid on and received certain Navy contracts, but elsewhere in Huntsville in a location that was not designated as a HUBZone. Despite not properly qualifying for the HUBZone program, Future Research Corp. was awarded Navy contracts that had been set aside for qualified HUBZone companies based upon the false certifications the company and Nunn made to the Navy.
“HUBZone contracts should be used for their intended purpose: to support small business owners who are creating jobs in economically disadvantaged communities,” said Tony West, Assistant Attorney General for the Civil Division of the Department of Justice. “When non-qualified companies inappropriately obtain these contracts, we will take action.”
“The HUBZone program should provide capital to economically disadvantaged areas, increasing job creation and community development. Contractors obtaining these set-aside contracts with false statements take a vital opportunity away from targeted small businesses. The SBA Office of the Inspector General will continue to partner with the Department of Justice to aggressively pursue criminal and civil cases,” said SBA Inspector General Peggy E. Gustafson.
“This case represents the cooperative effort of SBA’s Offices of the General Counsel and the Inspector General and the Department of Justice to uncover and remedy fraud in our procurement programs,” said SBA General Counsel Sara Lipscomb.
Assistant Attorney General West thanked the Justice Department’s Civil Division, the SBA Office of General Counsel, the SBA Office of Inspector General and the Department of the Navy for the collaboration that resulted in the settlement announced today.
Tuesday 20 September 2011
United States and Belgium Sign Agreement to Prevent and Combat Serious CrimeRead the Press Release
BRUSSELS – Attorney General Eric Holder today joined Belgian Minister of Justice Stefaan De Clerck and Minister of Interior Annemie Turtelboom to sign an agreement on Preventing and Combating Serious Crime (PCSC), which will allow for the exchange of biometric and biographic data of suspected criminals between the United States and Belgium to bolster counterterrorism and law enforcement efforts while protecting individual privacy.
Under the agreement, Belgium and the United States will leverage state-of-the-art technology to share law enforcement data, including fingerprints, to better identify known terrorist and criminals during investigations and other law enforcement activities. The agreement authorizes the use of specific mechanisms for sharing vital information to help prevent serious threats to public security, and requires measures to ensure the protection and privacy of citizens in both countries. In fact, the PCSC contains numerous provisions pertaining to the handling, sharing, and retention of relevant data, all designed to ensure privacy and data protection.
Belgium is the 20th country with which the United States has signed an agreement to prevent and combat serious crime. Among the other international partners who have concluded similar agreements with the United States are Germany, the Netherlands, Finland, Spain, Estonia, Greece and South Korea. These agreements – negotiated by the Departments of Homeland Security, Justice and State – prevent individuals who commit serious crimes in one signatory country from continuing illicit acts in another, and reaffirm the strong commitment of the United States to reciprocal partnerships that advance the safety and security of the United States and its allies.
Massachusetts Man Sentenced to 60 Months in Prison for Child Pornography ChargesRead the Press Release
WASHINGTON – Stanley R. MacKinnon, 66, of Haverhill, Mass., was sentenced today to 60 months in prison and 10 years of supervised release for his receipt, attempted receipt and possession of child pornography, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division, U.S. Attorney Carmen M. Ortiz for the District of Massachusetts and Robert Bethel, Inspector in Charge of the U.S. Postal Inspection Service (USPIS).
MacKinnon was sentenced by U.S. District Judge Rya W. Zobel in Boston. On March 24, 2011, MacKinnon pleaded guilty to five counts of receipt and attempted receipt of child pornography and one count of possession of child pornography. The charges against him were the result of an ongoing national investigation by USPIS of individuals who purchase child pornography via U.S. mail. In pleading guilty, MacKinnon admitted to ordering and purchasing child pornography movies depicting prepubescent minors, and receiving the movies via U.S. mail. MacKinnon also admitted to possessing images of child pornography that he had produced approximately 30 years ago.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The case against MacKinnon was prosecuted by Assistant U.S. Attorney Michael I. Yoon of the District of Massachusetts and CEOS Trial Attorney Bonnie L. Kane of the Criminal Division. The case was investigated by USPIS and the Haverhill Police Department.
Justice Department Seeks to Shut Down Detroit Tax PreparerRead the Press Release
WASHINGTON – The United States has sued Crystal Ireland and her business, Master Mind Preparation, to bar them from preparing tax returns for others, the Justice Department announced today. According to the government complaint in the civil injunction suit, Ireland, who resides in Detroit, allegedly fails to comply with due-diligence requirements imposed by federal law on tax return preparers who claim the earned-income tax credit (EITC) on their customers’ tax returns. The suit also alleges that Ireland falsified her customers’ income in order to claim the maximum EITC for them.
The EITC is a refundable tax credit available to certain low-income individuals. Due to the method used to calculate the EITC, individuals with higher annual incomes may be entitled to larger credits, up to a certain point. According to the complaint, Ireland fabricated businesses and reported fake business income on her customers’ returns to obtain larger credit amounts.
The complaint alleges that the Internal Revenue Service (IRS) previously penalized Ireland for failing to comply with the due-diligence requirements, yet a follow-up investigation revealed continuing failures and fraudulent claims. The complaint also alleges that, of the returns prepared by Ireland and claiming the EITC for tax years 2007 through 2009 that the IRS examined, the IRS reduced or disallowed the EITC claim on 93 percent of those returns.
In the past decade, the Justice Department’s Tax Division has obtained hundreds of injunctions against preparers of false tax returns and tax fraud promoters. Information about these cases is available on the Justice Department website .
Former Milwaukee Police Officer Indicted for Sexual Assault While on DutyRead the Press Release
WASHINGTON –Former Milwaukee Police Officer Ladmarald Cates, 43, was indicted today by a federal grand jury for sexually assaulting a woman while he was on duty, announced the Justice Department.
On July 16, 2010, the victim called 911 to report a crime and request police assistance at her home. Cates was one of the officers who responded to her call. It is alleged that during the time Cates was to be investigating the victim’s complaint, he isolated the victim and sexually assaulted her while his partner and her family members were outside. Cates was also charged with using and carrying a firearm during and in relation to the sexual assault and possessing a firearm in further of the crime.
If convicted, the defendant faces a maximum penalty of life in prison and a fine of not more than $250,000.
An indictment is a formal accusation of criminal conduct, not evidence of guilt. The defendants are presumed innocent unless and until proven guilty.
This case was investigated by the FBI and the Milwaukee Police Department, and is being prosecuted by Assistant U.S. Attorney Mel Johnson of the Eastern District of Wisconsin and Civil Rights Division Trial Attorney Saeed Mody.
Former Executive of Auto Parts Retailer Sentenced to 24 Months in Prison for Fraud SchemeRead the Press Release
WASHINGTON – The former chief financial officer of CSK Auto Corp. was sentenced late yesterday to 24 months in prison for his role in a scheme to manipulate CSK’s earnings and double-bill CSK’s customers, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division; Special Agent in Charge James L. Turgal of the FBI’s Phoenix Field Office; Special Agent in Charge Dawn Mertz of the Internal Revenue Service-Criminal Investigation (IRS-CI) Phoenix office; and Inspector in Charge Pete Zegarac of the U.S. Postal Inspection Service (USPIS) for the Phoenix Division.
Don W. Watson, 55, of Gilbert, Ariz., was sentenced by U.S. District Judge Susan R. Bolton in the District of Arizona in Phoenix. In addition to his prison term, Watson was sentenced to three years of supervised release. Restitution will be determined by the court at a later date.
Watson pleaded guilty on May 13, 2011, to one count of conspiracy to commit securities and mail fraud. Watson admitted in his plea that, from 2001 to 2006, he and others conspired to misstate CSK’s income by concealing that the company had tens of millions of dollars in rebates from vendors that CSK had claimed as income that were never collected. As a result of the fraud scheme, CSK reported millions of dollars more in pre-tax income than it in fact earned. In addition, Watson admitted in his plea that he and others intentionally caused CSK to double-bill vendors millions of dollars that CSK was not owed.
According to court documents, CSK operated under the brand names Checker Auto Parts, Schucks Auto Supply and Kragen Auto Parts. During the time of the conspiracy, CSK was the largest specialty retailer of auto parts and accessories in the western United States and one of the largest such retailers in the entire United States.
According to court documents, CSK purchased hundreds of millions of dollars worth of auto parts every year. Its vendors gave CSK allowances, or rebates, for products CSK purchased in exchange for CSK using the allowances for marketing of the vendors’ products for sale in its stores. By reducing the cost to CSK of the products it purchased from vendors, the allowances increased CSK’s income. Watson admitted that, instead of writing off allowances that CSK had claimed but could not collect, he and others concealed the uncollectible amounts by causing vendor allowances from later years to be moved to cover the shortfalls in prior years and by causing vendors to be billed for allowances CSK was not owed.
As a result of the scheme, CSK misstated its receivables and pre-tax income in its annual reports (Forms 10-K) in fiscal years 2002, 2003 and 2004 by approximately $10 million, $23 million and $19 million, respectively.
In related actions, Edward W. O’Brien III, the former controller of CSK, and Gary M. Opper, the former director of credits and receivables at CSK, pleaded guilty to obstruction of justice in April 2009. Sentencings for O’Brien and Opper are scheduled for Nov. 7, 2011, before Judge Bolton. CSK recently entered into a non-prosecution agreement with the Department of Justice, in which it agreed to pay a penalty of $20.9 million and abide by conditions of the agreement for a period of two years. The U.S. Securities and Exchange Commission (SEC) conducted its own investigation, which resulted in a filed action against CSK and pending actions against Watson, O’Brien and Opper. The SEC also referred the conduct to the department.
The case was prosecuted by Deputy Chief Patrick Stokes and Trial Attorneys Jennifer R. Taylor and Andrew H. Warren of the Criminal Division’s Fraud Section. The case was investigated by the FBI, IRS-CI and the USPIS. The department thanks those agencies, as well as the SEC, for their substantial assistance in this matter.
Deportation Order Upheld Against Detroit-Area Man Who Shot Jews as Nazi Policeman During World War IIRead the Press Release
WASHINGTON – The Board of Immigration Appeals (BIA) has dismissed the appeal of John (Ivan) Kalymon of Troy, Mich., who was ordered removed from the United States earlier this year because of his participation in lethal acts of Nazi-sponsored persecution of Jews during World War II, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division and U.S. Immigration and Customs Enforcement (ICE) Director John Morton.
The BIA upheld a Detroit immigration judge’s Jan. 31, 2011, decision that Kalymon was removable for shooting Jews while serving voluntarily as an armed member of the Nazi-sponsored Ukrainian Auxiliary Police (UAP) in German-occupied L’viv, Ukraine.
“John Kalymon and his Ukrainian Police accomplices were indispensable participants in Nazi Germany’s campaign to exterminate the Jews of Europe during World War II,” said Assistant Attorney General Breuer. “Their actions ensured that tens of thousands of Jewish men, women and children were murdered in L’viv or rounded up and shipped to the Nazi death camp in Belzec or Nazi forced labor camps. The Justice Department remains steadfast in our resolve to ensure that Holocaust perpetrators are not granted safe haven in this country.”
“We hope upholding this removal order helps bring justice to the families who were victimized by the reprehensible acts that this man committed,” said ICE Director Morton. “The U.S. government will work tirelessly to identify and arrest those who have committed crimes against humanity so that they may not seek to gain safe haven in the United States.”
In January 2011, U.S. Immigration Judge Elizabeth Hacker ordered Kalymon removed from the United States. Kalymon, 90, immigrated to the United States from Germany in 1949 and became a U.S. citizen in 1955. In 2004, the Department of Justice filed a lawsuit in U.S. District Court in Detroit seeking revocation of his U.S. citizenship. Following trial, a federal judge granted that request in 2007, finding that Kalymon had participated in the rounding up and shooting of Jews during his voluntary 1941-44 service in the UAP. The judge further found that Kalymon concealed his UAP service when applying for his U.S. immigrant visa. The evidence included a seized Aug. 14, 1942, report, handwritten by Kalymon, in which he informed his UAP superiors that he had personally shot to death one Jew and had wounded another “during the Jewish operation” that day. The evidence also included other reports from Kalymon’s commander that Kalymon had fired his weapon during forcible round-ups of Jews, in the course of which Jews were killed and wounded. Judge Hacker ordered Kalymon deported to Germany, Ukraine, Poland or any other country that will admit him.
The BIA reviewed Judge Hacker’s decision and ruled that it agreed with the decision that “clear and convincing evidence” proffered by the Government “establishes the facts alleged” in the charging document.
“Ivan Kalymon was an integral part of the Nazi machinery of annihilation that ended the lives of more than 100,000 innocent men, women and children in L’viv,” said Eli M. Rosenbaum, Director of Human Rights Enforcement Strategy and Policy for the Criminal Division’s Human Rights and Special Prosecution Section (HRSP). “This case is one of more than a hundred cases successfully prosecuted by the Department of Justice against wartime Nazi perpetrators, and it reflects the government’s continuing commitment to pursuing justice on behalf of the victims of the Holocaust and other human rights crimes.”
The Department of Justice’s Criminal Division announced the formation of HRSP on March 30, 2010, as part of the U.S. government’s efforts to bring human rights violators to justice and deny those violators safe haven in the United States. The new section represents a merger of the Criminal Division’s former Domestic Security Section (DSS) and Office of Special Investigations (OSI).
This case is a result of the Justice Department’s ongoing efforts to identify, investigate and take legal action against former participants in Nazi persecution who reside in the United States. Since the inception of this program in 1979, the department has won cases against 107 individuals who assisted in Nazi persecution. In addition, 180 suspected Axis persecutors who sought to enter the United States have been blocked from doing so as a result of the department’s “watchlist” program, enforced in cooperation with the Department of Homeland Security. The removal case against Kalymon was litigated by HRSP Senior Trial Attorney William H. Kenety V, with assistance from Frank Ledda, Senior Chief Counsel in the Detroit Office of U.S. Immigration and Customs Enforcement (ICE).
Additional information about the Justice Department’s human rights enforcement efforts can be found at www.justice.gov/criminal/hrsp .
Bloomfield, Michigan, Business Owner Sentenced to Prison for Tax EvasionRead the Press Release
WASHINGTON – John Walter Kaber, a resident of Bloomfield, Mich., was sentenced to 37 months in prison for tax evasion, the Justice Department and Internal Revenue Service (IRS) announced today.
According to the plea agreement, Kaber was the owner of Merchant Processing, a business that installed credit card processing systems. Despite earning substantial income from Merchant Processing and incurring a tax liability on that income, Kaber failed to file timely U.S. Individual Income Tax Returns (IRS Forms 1040) for the 1991 and 2005 tax years. Kaber filed Forms 1040 for the 1992-1996 and 2000-2004 tax years that reflected a tax due and owing, but failed to pay the taxes due. Kaber also failed to pay a portion of the employment taxes that were due to the IRS during the 2000-2003 tax years.
Kaber’s total tax due and owing to the United States for the 1991-1996 and 2000-2005 tax years, including both income taxes and employment taxes, is $868,319.70. In addition to the prison term, the court ordered Kaber to serve two years of supervised release and ordered Kaber to pay $868,319.70 in restitution to the IRS.
According to the plea agreement, in order to carry out his tax evasion scheme and to conceal his income and assets from the IRS, Kaber, among other things, used his wife’s name to purchase and refinance two parcels of real property and to purchase a boat, boat slip and vehicle. Kaber also sought to prevent the IRS from collecting unpaid taxes from his bank accounts by, among other things, cashing checks rather than depositing them in the bank, depositing business receipts into his wife’s checking account, and removing his name from a joint bank account after it became subject to an IRS levy.
According to court documents, Kaber has an extensive criminal history that includes multiple convictions in Michigan for fraud-related offenses. Kaber was also the subject of a civil lawsuit in 2007, in which the United States District Court for the Eastern District of Michigan entered a judgment against him for his unpaid 1991-1996 federal income taxes.
This case was investigated by IRS-Criminal Investigation and was prosecuted by Tax Division Trial Attorney Melissa S. Siskind.
Additional information about the Justice Department’s Tax Division and its enforcement efforts may be found at www.justice.gov/tax.
Monday 19 September 2011
Statement of Attorney General Eric Holder on the 2010 Uniform Crime ReportRead the Press Release
WASHINGTON – Attorney General Eric Holder today issued the following statement on the release of the 2010 Uniform Crime Report, which showed a decline in violent crime across the United States for the second straight year:
“Safe communities are the foundation of our nation’s prosperity and I have made it a priority of this Department of Justice to protect the American public by aggressively fighting violent crime. The results of the 2010 Uniform Crime Report show that for the second straight year, our federal law enforcement agents continue to make progress on one of our core objectives -- fighting violent crime across this country.
“Working with our state, local and tribal partners, federal prosecutors and agents have increased community participation in our shared efforts to hold accountable those whose illegal actions bring fear into neighborhoods. We’ve targeted gang leadership in communities from Florida to New York, and from Tennessee to North Carolina. We’ve renewed our commitment to fighting organized crime, whether it is traditional La Cosa Nostra or Mexican drug cartels.
“Ensuring that law enforcement has the necessary resources is critical to continuing our aggressive fight against violent crime. We also recognize that enforcement alone will not prevent every future crime, which is why we’ve launched initiatives in communities across this country to fight recidivism and support reentry programs.
“Each crime that is solved, each victim that is helped and each criminal act that is prevented before it even occurs - all combine to create better law enforcement and most importantly, safer communities.”
Information about the 2010 Uniform Crime Report can be found at: www.fbi.gov/news/stories/2011/september/crime_091911/crime_091911
Ship Owners and Operators to Pay $44 Million in Damages and Penalties for 2007 San Francisco - Oakland Bay Bridge Crash and Oil SpillRead the Press Release
SAN FRANCISCO – Federal, state and Bay-area officials announced a comprehensive civil settlement with the owners and operators of the M/V Cosco Busan, resolving all natural resource damages, penalties and response costs that resulted from the ship striking the San Francisco-Oakland Bay Bridge in 2007, and subsequent oil spill in the San Francisco Bay. The event killed thousands of birds, impacted a significant portion of the Bay’s 2008 herring spawn, spoiled miles of shoreline habitat and closed the bay and area beaches to recreation and fishing.
The U.S. Department of Justice, the state of California, the city and county of San Francisco and the city of Richmond, Calif., signed and lodged a consent decree that requires Regal Stone Limited and Fleet Management Ltd., the owners and operators of the M/V Cosco Busan, to pay $44.4 million for natural resource damages and penalties and to reimburse the governmental entities for response costs incurred as a result of the 53,000 gallon oil spill that occurred when the vessel struck the bridge on Nov. 7, 2007.
Officials announced the agreement at a press conference today on Treasure Island, overlooking the site of the 2007 crash.
U.S. Secretary of the Interior Ken Salazar was joined by Assistant Attorney General Ignacia S. Moreno, head of the Justice Department’s Environment and Natural Resources Division; California Attorney General Kamala D. Harris; Natural Resources Secretary John Laird; National Oceanic and Atmospheric Administration (NOAA) Chief of Staff Margaret Spring; San Francisco City Attorney Dennis Herrer; and representatives of the California Department of Fish and Game, State Lands Commission; state and regional water boards; and the East Bay Regional Park District, among others.
“This settlement is great news for the Bay Area and for all who enjoy these lands and waters rich in beauty, wildlife, and recreational opportunities,” said Secretary Salazar. “With this settlement, we are seeing to it that those responsible for the spill are held accountable and that they pay their share for restoring and improving our precious natural resources and public lands.”
“The Cosco Busan oil spill had a major impact in the San Francisco Bay and beyond, oiling over 100 miles of shoreline,” said Assistant Attorney General Moreno. “This comprehensive settlement achieves full compensation for the significant natural resources that were injured as result of the Cosco Busan oil spill. It also forms the foundation for the complete restoration of precious lost natural resources, park system resources, and compensates for lost recreation uses for the benefit and enjoyment of the people of the San Francisco Bay Area and for all Americans.”
The federal and state natural resource trustees estimate that the spill killed 6,849 birds, impacted 14 to 29 percent of the herring spawn that winter, oiled 3,367 acres of shoreline habitat and resulted in the loss of more than one million recreational user-days. A result of a multi-governmental effort by federal and state agencies, and municipal governments, the settlement is expected to fully compensate (in addition to previously reimbursed costs) for the natural resources and other damages and costs resulting from the spill.
The portion of the settlement for lost human uses of the shoreline and the bay, $18.8 million, constitutes one of the largest human use recoveries for any oil spill in the United States. Of this, the National Park Service is receiving approximately $9.75 million to improve coastal access and facilities in the bayside, coastal and estuarine areas of Golden Gate National Recreation Area, San Francisco Maritime National Historical Park and Point Reyes National Seashore.
The remaining $9 million will be disbursed either directly to local government as part of the consent decree or through a grant program to fund shoreline recreational projects throughout the impacted spill areas.
On Nov. 30, 2007, just 23 days after the spill, the United States filed a lawsuit in federal court against Regal Stone Limited, Fleet Management Ltd. and John J. Cota seeking damages for resource injuries caused by the spill and for costs incurred cleaning up the spill. The U.S. asserted claims under the Oil Pollution Act, the National Marine Sanctuaries Act, the Park System Resource Protection Act and the Clean Water Act.
On Dec. 10, 2007, the city and county of San Francisco filed, and the city of Richmond later joined, an action in the Superior Court of California seeking damages and injunctive relief under state law and common law.
After investigating many of the impacts from the spill, on Jan. 7, 2009, the California Department of Fish and Game, State Lands Commission, and the Regional Water Quality Control Board – San Francisco Bay Region, filed a complaint in the Superior Court that included causes of action for natural resource damages under the Lempert-Keene-Seastrand Oil Spill Prevention and Response Act, the Oil Pollution Act various other state law provisions and common law. California asserted claims for civil liability and penalties and state costs incurred responding to the spill. Each of these actions is resolved by the settlement, which is subject to a 30-day public comment period that begins with the posting of a notice in the Federal Register. The consent decree will be available for viewing at www.justice.gov/enrd/Consent_Decrees.html.
“The Cosco Busan oil spill polluted the bay, killed wildlife and cost Bay Area residents millions of dol lars in economic opportunity,” said California Attorney General Harris. “ This settlement properly compensates the public affected by the oil spill and will fund the environmental restoration and recreational projects necessary to undo the damage done by the spill.”
“This settlement takes California a big step closer to healing the serious injuries the San Francisco Bay ecosystem suffered as a result of the spill,” said California Natural Resources Secretary Laird. “ For years to come, the restoration projects funded through this settlement will help recover habitat for wildlife and improve opportunities for visitors to enjoy the natural beauty of the Bay Area.”
“This consent decree represents a just conclusion to the sustained and unrelenting efforts by the various government attorneys, including the San Francisco City Attorney's Office, to recover full compensation for the costs this oil spill imposed on our taxpayers and the damage it did to recreational opportunities at our beaches and in the Bay,” said San Francisco City Attorney Dennis Herrera.
“Numerous NOAA scientists and experts worked on this oil spill – playing a critical role before, during, after this incident. Thanks to the hard work we have all done as federal, state and local partners, today we stand together in declaring the importance of maintaining a safe and efficient marine transportation system both for protection of our oceans and the economy,” said Margaret Spring, NOAA chief of staff. “In tough economic times we must remember that 69 million jobs are associated with healthy oceans and coasts. This settlement today once again emphatically states the importance of these jobs.”
In conjunction with the consent decree, the federal and state trustees will publish a separate notice in the Federal Register seeking comments on the Draft M/V COSCO BUSAN Damage Assessment and Restoration Plan (DARP). After considering comments from the public, the trustees will produce a final DARP selecting projects that will be funded with approximately $32 million from this settlement. About $5 million will be used to fund bird restoration, $4 million for habitat restoration, $2.5 million for fish and eelgrass restoration and $18.8 million for recreational use improvements. An additional $2 million will fund restoration planning, administration and oversight, with any unused funds to be spent toward more restoration. The draft plan will be available shortly for public comment. Two public meetings will be held to allow for a brief overview of the restoration plan and public comments to be made. Copies of the draft DARP, including injury assessment and restoration project details, are available at www.dfg.ca.gov/ospr/Science/cosco_busan_spill.aspx.
“This settlement marks an excellent collaboration of agencies at all levels to restore and preserve San Francisco Bay,” said Bruce Wolfe, the Executive Officer of the San Francisco Regional Water Quality Control Board. “But it also reminds us that the amount of oil spilled in this incident is the equivalent of what automobile traffic deposits in the bay every year. All of us, as stewards of the Bay, must be diligent in doing all we can to protect it.”
The settlement follows earlier criminal indictments brought by the Environmental Crimes Section of the Environment and Natural Resources Division of the U.S. Department of Justice and the U.S. Attorney’s Office for the Northern District of California. John J. Cota, the pilot of the Cosco Busan, and Fleet Management were criminally prosecuted. Cota pleaded guilty in 2009 and was sentenced to 10 months in prison for negligently causing the discharge and killing migratory birds. Fleet was sentenced in 2010 after pleading guilty in the criminal case to negligently causing the discharge and obstructing justice. Fleet was ordered to pay $10 million in criminal penalties, including $2 million for local environmental projects, for its role negligently causing the Cosco Busan oil discharge and obstruction of justice charges for a subsequent cover-up in which it falsified ship records after the crash. For more information: www.justice.gov/opa/pr/2009/July/09-enrd-698.html.
“The Northern District of California contains some of the most picturesque waterways in the country. Ship owners and operators cannot be allowed to take them for granted,” said U.S. Attorney Melinda Haag of the Northern District of California. “This settlement and the criminal cases we brought in 2008 against Fleet Management and Mr. Cota should send a strong message that the federal, state and local governments here will take action against anyone causing environmental harm to the San Francisco Bay.”
For more information and photos of the spill and response efforts, visit: www.dfg.ca.gov/ospr/Science/cosco_busan_spill.aspx and www.darp.noaa.gov.
Owner of Miami-Area Mental Health Company Sentenced to 35 Years in Prison for Orchestrating $205 Million Medicare Fraud SchemeRead the Press Release
WASHINGTON – Miami resident Marianella Valera, the owner of a mental health care company, American Therapeutic Corporation (ATC), was sentenced today to 35 years in prison for orchestrating a $205 million Medicare fraud scheme, announced the Department of Justice, the Department of Health and Human Services (HHS) and the FBI.
Valera, 40, was sentenced by U.S. District Judge James Lawrence King in the Southern District of Florida. Judge King ordered Valera to pay more than $87 million in restitution, jointly and severally with her co-defendants. Valera was also sentenced to three years of supervised release following her prison term. Lawrence Duran, another owner of ATC, was sentenced on Sept. 16, 2011, to 50 years in prison for his role in the fraud scheme. Duran’s sentence is the longest prison sentence ever imposed in a Medicare Fraud Strike Force case.
On April 14, 2011, Valera and Duran pleaded guilty to all counts charged in a superseding indictment, which was unsealed on Feb. 15, 2011. The superseding indictment charged Valera with 21 felony counts and Duran with 38 felony counts, including conspiracy to commit health care fraud, health care fraud, conspiracy to pay and receive illegal health care kickbacks, conspiracy to commit money laundering, money laundering and structuring to avoid reporting requirements. Valera and Duran were remanded to the custody of the U.S. Marshals Service after their arrest on Oct. 21, 2010, and have been detained since that time. Their assets were restrained at the time of their arrests through civil proceedings.
In pleading guilty, Duran and Valera admitted that they orchestrated and executed a scheme to defraud Medicare beginning in 2002 and continuing until they were arrested in October 2010. Duran and Valera submitted false and fraudulent claims to Medicare through ATC, a Florida corporation headquartered in Miami that operated purported 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. Duran and Valera also used a related company, American Sleep Institute (ASI), to submit fraudulent Medicare claims.
According to court documents, Duran, Valera and others paid bribes and kickbacks to recruit Medicare beneficiaries to attend ATC and ASI and billed Medicare for treatments purportedly provided to these recruited patients. According to court documents, the treatments were medically unnecessary or never provided at all. Duran and Valera supported the kickbacks through an extensive money laundering scheme that aimed to conceal the illicit conversion of Medicare payments to cash. The defendants and their co-conspirators used sophisticated measures to conceal their fraudulent activities from Medicare and from law enforcement.
As part of the fraud scheme, Duran, Valera and others paid kickbacks to owners and operators of assisted living facilities (ALFs) 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. The defendants and their co-conspirators actively recruited ALF and halfway house owners and operators and patient brokers to participate in the scheme. 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, to attend treatment programs that were not legitimate PHP programs so that ATC and ASI could bill Medicare for more than $205 million in medically unnecessary services.
According to the superseding indictment to which they pleaded guilty, Duran, Valera and others caused the alteration of patient files and therapist notes for the purpose of making it falsely appear that patients being treated by ATC qualified for PHP treatments. According to court documents, Duran and Valera also instructed employees and doctors to alter diagnoses and medication types and levels to make it falsely appear that ATC patients qualified for PHP services. Duran, Valera and co-conspirators caused doctors to refer ATC patients to ASI even though the patients did not qualify for sleep studies.
According to the superseding indictment to which they pleaded guilty, the defendants also engaged in a money laundering conspiracy to enrich themselves and to provide cash for the millions of dollars in kickbacks paid to recruit Medicare beneficiaries. According to court documents, Duran and Valera used another company they owned and operated, Medlink Professional Management Inc., to conceal the health care fraud and kickbacks from Medicare and law enforcement. Once Medicare paid ATC and ASI for the fraudulently billed services, Duran, Valera and others transferred millions of dollars to Medlink. They and others opened phony corporations to receive checks and wire transfers from both ATC and Medlink to convert that money into cash for their personal enrichment and for the payment of kickbacks. According to court documents, Duran, Valera and others cashed checks at different bank branches and different locations to conceal the true purpose of their activities and to evade reporting requirements.
On Aug. 23, 2011, a jury found co-conspirator Judith Negron, the third owner and operator of ATC, guilty of all 24 felony counts charged in the February 2011 superseding indictment. Co-conspirator Margarita Acevedo, also charged in the February 2011 superseding indictment, pleaded guilty on April 7, 2011, for her role in the fraud scheme. Today, Judge King sentenced Acevedo to 91 months in prison and three years of supervised release following her prison term. Avecedo was also sentenced to pay more than $72 million in restitution, jointly and severally with her co-defendants.
ATC and Medlink pleaded guilty in May 2011 to conspiracy to commit health care fraud. ATC also pleaded guilty to conspiracy to defraud the United States and to pay and receive illegal health care kickbacks. On Sept. 16, 2011, the two corporations were sentenced to five years of probation per count and ordered to pay restitution of $87 million. Both corporations have been defunct since their owners were arrested in October 2010.
Today’s sentence was announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida; Special Agent-in-Charge John V. Gillies of the FBI’s Miami Field Office; and Special Agent-in-Charge Christopher Dennis of the HHS Office of Inspector General (HHS-OIG), Office of Investigations Miami office.
The case was prosecuted by Trial Attorney Jennifer 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.
Former President of Fraudulent Florida Physical Therapy Company Sentenced to 24 Months in Prison for Medicare Fraud SchemeRead the Press Release
WASHINGTON – The former president and administrator of a fraudulent physical therapy company in Lakeland, Fla., was sentenced today to 24 months in prison for his role in a scheme to defraud Medicare, announced the Department of Justice, the Department of Health and Human Services (HHS) and the FBI.
Miami-area resident Adrian Chalarca, 24, also was sentenced by U.S. District Judge James D. Whittemore of the Middle District of Florida to serve three years of supervised release following his prison term and ordered to pay $82,765 in restitution, jointly and severally with his co-defendants. Chalarca pleaded guilty on June 10, 2011, before U.S. Magistrate Judge Mark A. Pizzo in Tampa, Fla., to one count of conspiracy to commit health care fraud.
According to court documents, Chalarca and his co-conspirators purchased Dynamic from its prior owners and transformed it into a fraudulent enterprise. Under Chalarca and others, Dynamic purported to provide physical therapy services to Medicare beneficiaries.
According to court documents, from fall 2009 to summer 2010, Chalarca submitted and caused the submission of $757,654 in fraudulent claims by Dynamic to the Medicare program. Chalarca admitted that he 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. Chalarca admitted that he knew the Medicare beneficiaries, on whose behalf claims were submitted to Medicare, never received the services.
All five defendants charged for their roles in the scheme at Dynamic have pleaded guilty. On Aug. 29, 2011, co-defendant Andres Cespedes was sentenced to 21 months in prison for his participation in the fraud scheme.
Today’s sentencing was announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s 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 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, 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.
Former Army Corps of Engineers Employee Pleads Guilty to Accepting Bribes from Iraqi ContractorsRead the Press Release
WASHINGTON - A former employee of the U.S. Army Corps of Engineers stationed in Baghdad, Iraq, pleaded guilty today to conspiring to receive bribes from Iraqi contractors involved in the U.S.-funded reconstruction efforts, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney Neil H. MacBride for the Eastern District of Virginia and Assistant Director in Charge James W. McJunkin of the FBI’s Washington Field Office.
Thomas Aram Manok, 50, of Chantilly, Va., pleaded guilty before U.S. District Judge Anthony J. Trenga in the Eastern District of Virginia. Sentencing has been scheduled for Dec. 9, 2011. Manok faces a maximum penalty of five years in prison.
According to court documents, Manok admitted to using his official position to conspire with Iraqi contractors to accept cash bribes in exchange for recommending that the Army Corps of Engineers approve contracts and other requests for payment submitted by the contractors to the U.S. government. According to court documents, in March and April 2010, Manok agreed to receive a $10,000 payment from one such contractor who had been involved in constructing a kindergarten and girls’ school in the Abu Ghraib neighborhood of Baghdad and had sought Manok’s influence in having requests for payment approved by the Corps of Engineers. According to court documents, Manok was to receive an additional bribe payment from the contractor once the contractor’s claim had been approved. Manok also admitted that he intended to conceal the payments from authorities by transferring them, via associates, from Iraq to Armenia.
This case was investigated by the FBI’s Washington Field Office, the Department of Defense Office of the Inspector General, the Army Criminal Investigation Command and the Defense Criminal Investigative Service, as participants in the International Contract Corruption Task Force. The case is being prosecuted by Assistant U.S. Attorney Paul J. Nathanson of the Eastern District of Virginia and Trial Attorney Mary Ann McCarthy of the Criminal Division’s Fraud Section.
Friday 16 September 2011
Saudi Arabia-Based Tamimi Global Company to Pay U.S. $13 Million to Resolve Criminal and Civil Allegations of Kickbacks and Illegal GratuitiesRead the Press Release
WASHINGTON – Saudi Arabia-based Tamimi Global Company Ltd (TAFGA) has agreed to pay the United States $13 million to resolve criminal and civil allegations that the company paid kickbacks to a Kellogg Brown & Root Inc. (KBR) employee and illegal gratuities to a former U.S. Army sergeant, in connection with contracts in support of the Army’s operations in Iraq and Kuwait. The civil matter was handled by the Justice Department’s Civil Division, and the criminal matter was handled by the U.S. Attorney’s Office for the Central District of Illinois.
The U.S. alleges that employees of TAFGA paid kickbacks to KBR to obtain subcontracts awarded under LOGCAP (Logistics Civil Augmentation Program) III – KBR’s prime contract with the U.S. Army to provide logistical support to the military in conflicts abroad, including Iraq and Afghanistan. LOGCAP III is the third generation of contracts under the program. KBR performs its obligations under the contract largely through subcontractors such as TAFGA.
The U.S. also alleges that employees of TAFGA paid illegal gratuities to Army Sergeant Ray Chase. Chase was responsible for Army food services at camps Doha and Arifjan (Zone 1) in Kuwait in 2002 and 2003. As alleged in the information, Chase received regular payments from TAFGA employees on account of official acts that he took while he served in Kuwait in 2002 and 2003. TAFGA has now admitted that its employees entered into a conspiracy to pay illegal gratuities to Chase.
TAFGA appeared today before Senior Judge Michael M. Mihm in the U.S. District Court for the Central District of Illinois in Peoria, Ill., on consideration of a deferred prosecution agreement (DPA) between TAFGA and the U.S. Attorney’s Office. Under the terms of that agreement, TAFGA will pay the United States $5.6 million as part of a deferred prosecution and institute a strict compliance program to ensure that the company and its employees will abide by the legal and ethical standards required for government contracts. If TAFGA meets its obligations under the agreement without violation for 18 months, the United States will dismiss the criminal charges.
As part of the criminal agreement, TAFGA admitted conspiring to pay kickbacks to former KBR subcontract manager Steven Lowell Seamans in return for favorable treatment in the award and performance of a subcontract to provide dining services at Camp Arifjan in Kuwait. The conspiracy lasted from October 2002 to March 2006. In related proceedings in March 2006, Seamans pleaded guilty to accepting $60,500 in kickbacks from TAFGA’s former director of operations in Kuwait, Mohammad Shabbir Khan, for the award of the Camp Arifjan subcontract. In June 2006, Khan pleaded guilty to paying Seamans $133,000 in kickbacks for the award of this and another subcontract. Both were sentenced to prison and ordered to pay restitution. In the DPA unsealed today, TAFGA also admitted that as part of the conspiracy charged its then employees made false statements to federal investigators about a phantom business deal to cover up wire transfers to Seamans transmitting the kickbacks. As alleged, this transaction also involved another former TAFGA operations director, Zubair Khan. Khan has been indicted in the Central District of Illinois, and that case is still pending.
With respect to the conspiracy involving Chase, TAFGA admitted that it is responsible for the misconduct of its employees who agreed to provide Chase illegal gratuities and in furtherance of that conspiracy provided Chase money and use of an apartment in Kuwait. All of these illegal gratuities were paid to Chase on account of official acts he performed, or was going to perform, at Camps Doha and Arifjan in Kuwait in relation to the war effort. In 2010, Chase pled guilty and was sentenced to prison for accepting approximately $1.4 million in illegal gratuities from various contractors, including TAFGA. Chase was prosecuted in the Central District of Illinois.
In a separate civil settlement agreement, TAFGA agreed to pay the United States an additional $7.4 million to resolve civil allegations that TAFGA paid kickbacks in return for favorable treatment in the award and performance of the Camp Arifjan subcontract, a subcontract for dining facilities at the Baghdad Palace in Iraq, and five smaller subcontracts for dining services and other logistical support in Iraq, including temporary personal services and installation of tent pads and a shower/laundry unit. The United States alleged that TAFGA’s conduct violated the False Claims Act and the Anti-Kickback Act.
“Kickbacks and collusion in military contracting corrode the process of supplying our men and women in uniform with the quality supplies they need and deserve,” said Tony West, Assistant Attorney General for the Justice Department’s Civil Division. “When we believe companies are engaging in wartime profiteering, we will not hesitate to act.”
TAFGA is the 13th defendant criminally charged by the LOGCAP Working Group, based in the Central District of Illinois and led by the U.S. Attorney’s Office. This district is also home to the Rock Island Arsenal in Rock Island, Ill., where LOGCAP III is administered by the Army Sustainment Command, giving the district jurisdiction over these cases.
“Our district was one of the first in the country to take on the challenge of prosecuting war zone cases involving fraud, bribes, and kickbacks that took place during the military conflict in Southwest Asia,” said U.S. Attorney Jim Lewis, Central District of Illinois. “Our commitment to prosecute these cases is rivaled only by our commitment to the men and women who serve in our armed forces. The agreements announced today will return $13 million to the American taxpayer and serve as an example of our long-term commitment to root out public corruption in every form, especially corruption perpetrated in war zones.”
The compliance program agreed to under the deferred prosecution agreement requires TAFGA to establish a new Kuwait management team as well as an ethics and compliance team with oversight over U.S. government contracts and subcontracts, to strengthen its code of business conduct, to modernize its standard operating procedures for financial and accounting functions, to institute a compliance hotline, and to retain a contract and compliance consultant to evaluate and monitor its compliance program.
These settlements are a direct result of the efforts of the interagency Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. It includes representatives from a broad range of federal agencies, including 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, 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.
The criminal case was prosecuted by Assistant U.S. Attorney Matthew J. Cannon and former Assistant U.S. Attorney Jeffrey B. Lang, the current and former lead prosecutors for the LOGCAP Working Group. Former Department of Justice Senior Trial Attorney Joseph Capone in the Fraud Section of the Criminal Division also worked on the case. The civil case was prosecuted by Assistant Director Judith Rabinowitz, Senior Trial Counsel John A. Kolar and Trial Attorney Kelley C. Hauser in the Justice Department’s Commercial Litigation Branch of the Civil Division.
Investigative agencies that participated in the investigations include the Internal Revenue Service Criminal Investigation Division, Chicago Field Office; the Defense Criminal Investigative Service, Central Field Office, Rock Island Post of Duty; U.S. Army Criminal Investigation Command, Major Procurement Fraud Unit, located at Rock Island Arsenal and the FBI, Springfield Division.
Owner of Miami-Area Mental Health Company Sentenced to 50 Years in Prison for Orchestrating $205 Million Medicare Fraud SchemeRead the Press Release
WASHINGTON – Miami resident Lawrence Duran, the owner of a mental health care company, American Therapeutic Corporation (ATC), was sentenced today to 50 years in prison for orchestrating a $205 million Medicare fraud scheme, announced the Department of Justice, the Department of Health and Human Services (HHS) and the FBI.
Duran, 49, was sentenced by U.S. District Judge James Lawrence King in the Southern District of Florida. Judge King ordered Duran to pay more than $87 million in restitution, jointly and severally with his co-defendants. Duran was also sentenced to three years of supervised release following his prison term. The sentencing hearing for Marianella Valera, the other owner of ATC, is scheduled for Sept. 19, 2011.
Two of the corporations that Duran and Valera used to commit the fraud scheme, ATC and Medlink Professional Management Group Inc., were sentenced today to five years of probation per count and ordered to pay restitution of $87 million. Both corporations have been defunct since their owners were arrested in October 2010.
On April 14, 2011, Duran and Valera pleaded guilty to all counts charged in a superseding indictment, which was unsealed on Feb. 15, 2011. The superseding indictment charged Duran with 38 felony counts and Valera with 21 felony counts, including conspiracy to commit health care fraud, health care fraud, conspiracy to pay and receive illegal health care kickbacks, conspiracy to commit money laundering, money laundering and structuring to avoid reporting requirements. Duran and Valera were remanded to the custody of the U.S. Marshals Service after their arrest on Oct. 21, 2010, and have been detained since that time. Their assets were frozen at the time of their arrests through civil forfeiture proceedings. ATC and Medlink pleaded guilty in May 2011 to conspiracy to commit health care fraud. ATC also pleaded guilty to conspiracy to defraud the United States and to pay and receive illegal health care kickbacks.
“For years, Mr. Duran stole millions of taxpayer dollars by defrauding Medicare and preying upon vulnerable citizens suffering from Alzheimer’s disease, dementia and substance abuse,” said Assistant Attorney General Lanny A. Breuer of the Criminal Division. “Instead of providing patients with the treatment they needed, Mr. Duran and his co-conspirators used them as props to fill their fraudulent mental health centers. As a further insult, Mr. Duran created an organization to lobby Congress for additional funds to support the mental health services his fraud scheme purported to provide. Today’s sentence – the longest ever imposed in a Medicare Fraud Strike Force case - reflects the reprehensibility of the defendant’s conduct, and is a powerful warning sign to others inclined to cheat the Medicare program.”
“For eight years, the defendant billed Medicare for hundreds of millions of dollars in mental health services that were not necessary or never provided,” said U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida. “We will not allow our scar ce Medicare dollars to be diverted from the sick and the elderly into the pockets of greedy fraudsters.”
“Today’s sentencing demonstrates to those who defraud taxpayers of millions of dollars through health care fraud schemes that the FBI and our partners remain committed to investigating and prosecuting such fraud to the fullest extent of the law,” said FBI Miami Division acting Special Agent in Charge Xanthie Mangum.
“Today’s sentencing is therapeutic for Americans fed up with those whose business plan is to steal from taxpayers,” said Christopher Dennis, Special Agent in Charge of the HHS Office of Inspector General’s region that covers Florida. “Mr. Duran thought he could enrich himself and beat the law. He will now have years and years behind bars to reflect on that mistake.”
In pleading guilty, Duran and Valera admitted that they orchestrated and executed a scheme to defraud Medicare beginning in 2002 and continuing until they were arrested in October 2010. Duran and Valera submitted false and fraudulent claims to Medicare through ATC, a Florida corporation headquartered in Miami that operated purported 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. Duran and Valera also used a related company, American Sleep Institute (ASI), to submit fraudulent Medicare claims.
According to court documents, Duran, Valera and others paid bribes and kickbacks to recruit Medicare beneficiaries to attend ATC and ASI and billed Medicare for treatments purportedly provided to these recruited patients. According to court documents, the treatments were medically unnecessary or never provided at all. Duran and Valera supported the kickbacks through an extensive money laundering scheme that aimed to conceal the illicit conversion of Medicare payments to cash. The defendants and their co-conspirators used sophisticated measures to conceal their fraudulent activities from Medicare and from law enforcement.
As part of the fraud scheme, Duran, Valera and others paid kickbacks to owners and operators of assisted living facilities (ALFs) 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. The defendants and their co-conspirators actively recruited ALF and halfway house owners and operators and patient brokers to participate in the scheme. 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, to attend treatment programs that were not legitimate PHP programs so that ATC and ASI could bill Medicare for more than $205 million in medically unnecessary services.
According to the superseding indictment to which they pleaded guilty, Duran, Valera and others caused the alteration of patient files and therapist notes for the purpose of making it falsely appear that patients being treated by ATC qualified for PHP treatments. According to court documents, Duran and Valera also instructed employees and doctors to alter diagnoses and medication types and levels to make it falsely appear that ATC patients qualified for PHP services. Duran, Valera and co-conspirators caused doctors to refer ATC patients to ASI even though the patients did not qualify for sleep studies.
According to the superseding indictment to which they pleaded guilty, the defendants also engaged in a money laundering conspiracy to enrich themselves and to provide cash for the millions of dollars in kickbacks paid to recruit Medicare beneficiaries. According to court documents, they used another company they owned and operated, Medlink, to conceal the health care fraud and kickbacks from Medicare and law enforcement. Once Medicare paid ATC and ASI for the fraudulently billed services, Duran, Valera and others transferred millions of dollars to Medlink. They and others opened phony corporations to receive checks and wire transfers from both ATC and Medlink to convert that money into cash for their personal enrichment and for the payment of kickbacks. According to court documents, Duran, Valera and others cashed checks at different bank branches and different locations to conceal the true purpose of their activities and to evade reporting requirements.
On Aug. 23, 2011, a jury found co-conspirator Judith Negron, the third owner and operator of ATC, guilty of all 24 felony counts charged in the February 2011 superseding indictment. Co-conspirator Margarita Acevedo, also charged in the February 2011 superseding indictment, pleaded guilty on April 7, 2011, for her role in the fraud scheme.
Today’s sentences were announced by Assistant Attorney General Breuer of the Justice Department’s Criminal Division; U.S. Attorney Ferrer of the Southern District of Florida; Special Agent-in-Charge Gillies of the FBI’s Miami Field Office; and Special Agent-in-Charge Dennis of the HHS Office of Inspector General (HHS-OIG), Office of Investigations Miami office.
The case was prosecuted by Trial Attorney Jennifer 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.
Former and Current Soldiers and Recruiter Indicted for Allegedly Obtaining Recruiting Bonuses Through Fraud SchemeRead the Press Release
WASHINGTON – Six current and former members of the U.S. military have been charged a 41-count indictment in San Antonio for allegedly defrauding various U.S. military components and their contractor of approximately $127,000 by fraudulently obtaining recruiting bonuses, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division.
Xavier Aves, 40, of San Antonio; Christopher Castro, 30, of San Antonio; Grant E. Bibb, 40, of Eagle Pass, Texas; Jesus Torres-Alvarez, 31, of El Paso, Texas; Paul Escobar, 31, of San Antonio; and Richard Garcia, 28, of San Antonio, were charged with one count of conspiracy in the indictment unsealed yesterday as to all the defendants. In addition, Aves is charged with 30 counts of wire fraud and 10 counts of aggravated identity theft. Castro, Bibb, Escobar and Garcia each are charged with five counts of wire fraud and two counts of aggravated identity theft. According to information presented in court, Aves, Bibb, Torres-Alvarez and Garcia are currently serving in the U.S. military while Castro and Escobar are former members of the military. The charges stem from an alleged scheme in which the defendants fraudulently obtained recruiting bonuses for soldiers whom they did not actually recruit.
The defendants were arrested on Sept. 14, and Sept. 15, 2011, by U.S. Army Criminal Investigation Command (CID) agents and made their initial appearances in U.S. District Court for the Western District of Texas. Aves, Castro, Escobar and Garcia appeared before U.S. Magistrate Judge John W. Primomo in federal court in San Antonio. Torres-Alvarez appeared before U.S. Magistrate Judge Robert Castaneda in El Paso and Bibb appeared before U.S. Magistrate Judge Victor Roberto Garcia in Del Rio, Texas.
According to the indictment, between 2005 and 2008, the U.S. Army, the U.S. Army Reserves and the National Guard Bureau entered into contracts with Document and Packaging Broker Inc. to administer recruiting bonus programs designed to offer monetary incentives to soldiers who recruited others to serve in the U.S. military. In addition, the Army managed its own recruiting bonus programs, which offered referral bonuses to soldiers who recruited other individuals to serve in the Army or Army Reserves.
Through these recruiting programs, a participating soldier could receive up to $2,000 in bonus payments for every person he recruited to serve in the U.S. military. Based on certain milestones achieved by the referred soldier, a participating soldier would receive the recruiting bonus payments in the form of direct deposits and pre-paid debit card payments.
According to the indictment, between February 2006 and February 2011, Aves, Castro, Bibb, Escobar and Garcia paid military recruiters, including Torres-Alvarez, for the names and social security numbers of potential future soldiers. Aves, Castro, Bibb, Escobar and Garcia allegedly created online accounts in their respective names and, using the information they obtained from military recruiters, claimed they were responsible for recruiting certain new soldiers to join the military, when in fact they did not recruit any of th ose people. As a result, Aves, Castro, Bibb, Escobar and Garcia allegedly received a total of approximately $127,000 in fraudulent recruiting bonuses. The indictment alleges that the defendants split the bonuses among themselves and recruited other soldiers to participate in the fraud scheme. According to the indictment, a portion of the bonuses were sent to the personal bank accounts of Aves’s girlfriend.
An indictment is merely a charge and defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
If convicted, the defendants face up to five years in prison on the conspiracy charge. Each wire fraud count carries a maximum penalty of 20 years in prison. For each count of aggravated identity theft, the defendants face a mandatory minimum sentence of two years in prison. Each charged count carries a maximum fine of up to $250,000, or twice the gross gain.
The case is being prosecuted by Trial Attorneys Edward J. Loya Jr. and Brian A. Lichter of the Criminal Division’s Public Integrity Section. The case is being investigated by agents from the San Antonio Fraud Resident Agency of the Major Procurement Fraud Unit, U.S. Army CID.
BP Amoco to Pay U.S. $20.5 Million to Resolve Allegations of Royalty Underpayments from Indian and Federal LandsRead the Press Release
WASHINGTON – BP Amoco Corp. (formerly Amoco Corp.), Amoco Production Company, BP Exploration & Oil Inc., BP America Inc., Atlantic Richfield Company and Vastar (the BP defendants) have agreed to pay the United States $20.5 million to resolve claims that the companies violated the False Claims Act by knowingly underpaying royalties owed on natural gas produced from federal and Indian leases, the Justice Department announced today.
Congress has authorized federal and Indian lands to be leased for the production of natural gas in exchange for the payment of royalties on the value of the gas that is produced. Each month companies are required to report to the U.S. Department of the Interior the amount of royalty that is due. This settlement resolves claims that the BP defendants improperly deducted from the royalty values they reported the cost of boosting gas up to pipeline pressures improperly reported processed gas as unprocessed gas to reduce royalty payments on federal and Indian leases, and improperly failed to perform “dual accounting” on certain federal leases.
The settlement explicitly excludes, and does not resolve, any claims the United States or the BP defendants have related to the Deepwater Horizon oil spill.
“Natural gas royalties provide an important source of income for the United States, Native Americans, and various states, and help support critical programs from which we all benefit,” said Tony West, Assistant Attorney General for the Civil Division of the Department of Justice. “Through cases like this, we are keeping our commitment to protect public lands and to ensure that companies who take non-renewable resources from those lands pay their fair share of royalties.”
“We remain committed to ensuring that energy companies accurately report production and pay the required royalties,” said Rhea Suh, Department of the Interior Assistant Secretary for Policy, Management and Budget. “We will continue to pursue every dollar due to taxpayers and the Federal Government from energy production that occurs on Federal and American Indian lands.”
The settlement arises from a lawsuit filed by Harrold Wright under the False Claims Act. Under the qui tam, or whistleblower, provisions of the act, private citizens may file actions on behalf of the United States and share in any recovery. Because Mr. Wright is deceased, his heirs will receive $5.3 million. The United States initially declined to intervene against the BP defendants, but intervened for the purpose of completing this settlement. Settlements in the case to date total approximately $270 million.
The investigation and settlement of these matters was jointly handled by the Justice Department’s Civil Division and the U.S. Attorney’s Office for the Eastern District of Texas, with assistance from the Department of the Interior’s Office of Natural Resources Revenue Office of the Solicitor and Office of Inspector General.
The case is U.S. ex rel. Wright v. Chevron USA, Inc. et al., 5:03-CV-264 (E.D. Tex.).
The Justice Department’s total recoveries in False Claims Act cases since January 2009 are more than $7.5 billion.
Thursday 15 September 2011
Two Former New Orleans Police Officers Sentenced in Connection with the Death of Raymond RobairRead the Press Release
WASHINGTON – Two former New Orleans Police Department (NOPD) officers were sentenced today in relation to the beating death of Raymond Robair and subsequent cover-up, the Justice Department announced today.
U.S. District Judge Eldon E. Fallon sentenced former NOPD Officer Melvin Williams to 262 months in prison for violating the civil rights of Robair by beating him to death, and for obstructing justice in the wake of that beating. Former NOPD Officer Matthew Dean Moore, who was working as Williams’ partner on the day of the beating, was sentenced to 70 months in prison for obstructing justice and for making false statements to the FBI during a federal investigation into Robair’s death. Williams was also ordered to pay $11,576 in restitution and Moore was sentenced to three years of supervised release.
“The New Orleans Police Department has been broken for some time, and this case shows just that,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “I hope that today’s sentences bring justice for the family of Raymond Robair and the entire community.”
“Today’s prison sentences are once again powerful messages that we in the Department of Justice will never tolerate the abuse of power or victimization of our citizens by anyone in law enforcement,” said U.S. Attorney for the Eastern District of Lousiana Jim Letten. “All of our citizens – and especially those among us who are most vulnerable – as well as the men and women who honor the badge of law enforcement every day deserve our respect and our protection.”
“Today’s sentences reflect the voice of the citizens, the jury which convicted these officers. Their voice clearly saying abusive behavior by our police officers will not be tolerated,” said Dave Welker, Special Agent in Charge for the FBI New Orleans Field Office. “The citizens deserve better as do the men and women of the NOPD who serve with fairness and honor.”
According to evidence presented at trial and at sentencing, Williams and Moore stopped Raymond Robair on a city street on the morning of July 30, 2005. While Moore restrained Robair, Williams kicked Robair in the side and struck him repeatedly with a metal baton. Robair suffered fractured ribs and a ruptured spleen, injuries that triggered massive internal bleeding. Williams and Moore transported Robair to Charity Hospital, where they falsely advised medical personnel there that Robair was suffering from a drug overdose. Robair continued to bleed internally as the hospital staff initially treated him as an overdose patient. Robair was pronounced dead at Charity Hospital shortly after his arrival on July 30, 2005.
After Robair’s death, an NOPD report, endorsed by Williams and Moore, provided a false account of the officers’ interactions with Robair and the staff at Charity Hospital. According to the report, the officers saw an unidentified man clutch his chest and fall to the ground, so they took the man to the hospital. The report did not mention Williams’ use of force on Robair. In March 2010, Moore falsely stated to the FBI that Williams never used force on Robair.
This case was prosecuted by Special Litigation Counsel Forrest Christian and Trial Attorney Jared Fishman of the Justice Department’s Civil Rights Division, along with Assistant U.S. Attorney Jordan Ginsberg for U.S. Attorney’s Office for the Eastern District of Louisiana.
Texas Federal Court Bars Two Men from Promoting Alleged Tax Scam Involving Fictitious Methane at LandfillsRead the Press Release
WASHINGTON - A federal court in Beaumont, Texas, has permanently barred two men from promoting an alleged tax fraud scheme involving bogus tax credits for the production of methane gas from landfills, the Justice Department announced today. Ronald Fontenot and Anthony Burrell consented to the civil injunction order against them without admitting wrongdoing. The order was signed by Judge Marcia A. Crone of the U.S. District Court for the Eastern District of Texas.
According to the government complaint , which was originally filed in Florida, the scheme involved bogus federal income tax credits available to producers of fuel from non-conventional sources. The government suit alleges that George Calvert and Gregory Guido of Florida, both previously enjoined and criminally convicted as a result of their involvement, concocted the scheme and promoted it through tax preparers like Fontenot and Burrell, who acted as sub-promoters to individual customers. The 32 defendants named in the civil injunction lawsuit allegedly helped customers claim more than $30 million in tax credits for the production and sale of fuel from landfill gas facilities that either did not exist or belonged to others. According to the complaint, Fontenot, of Lake Charles, La., and Burrell, of Livingston, Tex., are allegedly responsible for preparing federal income tax returns for customers that claimed at least $2.6 million in false tax credits.
Fontenot and Burrell are the 29th and 30th of the 32 defendants to be enjoined. The case against the two remaining defendants is pending. The order also requires Fontenot and Burrell to produce to the government a list identifying all customers for whom they prepared tax returns claiming the fuel credits between Jan. 1, 2003, and July 1, 2009.
In the past decade, the Justice Department’s Tax Division has obtained hundreds of injunctions against tax fraud promoters and tax return preparers. Information about these cases is available on the Justice Department website .
Justice Department Announces $2.7 Million in Grants for Six Sexual Assault Demonstration Initiative ProjectsRead the Press Release
WASHINGTON – The Department of Justice’s Office on Violence Against Women (OVW) today announced awards to six projects for a total of $2.7 million under the Sexual Assault Demonstration Initiative (SADI). The SADI is OVW’s first large scale project to determine best practices and needed action in reaching more sexual assault survivors and providing comprehensive sexual assault services.
The six demonstration sites, each receiving three year awards for $450,000 are: Gila River Indian Community, Sacaton, Arizona; Shelter, Inc., Alpena, Michigan; Doves, Inc., Gering, Nebraska; New York Asian Women’s Center, Inc., New York, New York; Family Violence and Rape Crisis Services, Pittsboro, North Carolina; and SafePlace, Olympia, Washington.
The goals of the initiative are to increase outreach to those populations experiencing sexual assault in their communities, but not currently accessing services; develop models of service provision that prioritize the needs of sexual assault survivors; and assess the efficacy of those steps in increasing the numbers and types of sexual assault survivors who access those newly enhanced services.
“Sexual assault is a complex crime that affects every sector of our society,” said Susan B. Carbon, Director of OVW. “Coordinated victim services, including emotional and medical support along with a well defined criminal justice response are vital to helping victims and their families heal. This demonstration initiative will provide support for the development of best practices that will significantly impact OVW’s future work and the work of our partners.”
Specifically, the SADI will enhance the range of service options for victims of sexual assault; improve the overall treatment of sexual assault victims; and enhance the skills and knowledge of advocates working with victims and survivors. The project will identify barriers to providing quality assistance and advocacy and document and disseminate solutions for replication.
At the conclusion of this project, key tools, methods and strategies will be developed in conjunction with the demonstration sites, and disseminated widely to the broader field of dual/multi-service agencies serving sexual assault survivors. Promising practices and innovative strategies will be made available through publications and trainings developed by OVW, the National Sexual Assault Coalition Resource Sharing Project and the National Sexual Violence Resource Center.
Director Carbon announced these awards today at the National Sexual Assault Conference (NSAC) in Baltimore. The NSAC provides advanced training opportunities for victim advocates and other professionals working to prevent intervene and heal sexual violence.
Former Indianapolis City-County Councilman Convicted for Soliciting a Bribe and Attempted ExtortionRead the Press Release
WASHINGTON – Former Indianapolis and Marion County, Ind., City-County Councilman Lincoln Plowman was convicted today by a federal jury of attempted extortion and soliciting a bribe, announced Assistant Attorney General Lanny A. Breuer for the Criminal Division and U.S. Attorney Joseph H. Hogsett of the Southern District of Indiana.
“Former Councilman Plowman betrayed the public’s trust by attempting to use his public office for personal gain. He attempted to trade official actions for cash and campaign contributions, but he was caught,” said Assistant Attorney General Breuer. “Corruption at any level of government flies in the face of the ideals upon which our democracy is built. We will simply not allow self-dealing by elected officials to go unpunished.”
Plowman, 48, was convicted by an Indianapolis jury of attempted extortion and soliciting a bribe between Aug. 11, 2009, and Dec. 22, 2009, while serving as a member of the City-County Council. According to evidence presented at trial, Plowman solicited an undercover FBI agent to pay $5,000 in cash and to make a $1,000 campaign contribution for Plowman’s benefit. In exchange for the payments, Plowman offered official actions and influence to facilitate the opening of a strip club in Indianapolis. At the time of the crimes, Plowman was a member of the Metropolitan Development Committee of the City-County Council. He was also a major with the Indianapolis Metropolitan Police Department.
Plowman faces a maximum penalty on the extortion charge of 20 years in prison and a $250,000 fine. He faces a maximum penalty on the bribery charge of 10 years in prison and a $250,000 fine. U.S. District Judge Larry J. McKinney ordered Plowman confined to his home pending sentencing.
The case is being prosecuted by Senior Trial Attorney Richard C. Pilger of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney Joe H. Vaughn for the Southern District of Indiana. The case was investigated by the FBI.
Former Colorado Resident Convicted in Pennsylvania of Conspiring to Defraud the Internal Revenue ServiceRead the Press Release
WASHINGTON – Donald Turner (aka Donald Wood), formerly of Littleton, Colo., was found guilty of conspiring to defraud the United States by a federal jury in the U.S. District Court for the Western District of Pennsylvania in Erie, Pa., the Justice Department and Internal Revenue Service (IRS) announced today. The Honorable Maurice B. Cohill, Senior District Judge, presided over the case.
According to testimony and evidence presented at trial, Turner promoted and sold memberships in First American Research (FAR) and a book entitled, “Tax Free! How the Super Rich Do It.” In 1991, Turner sold the program to Daniel Leveto, a Meadville, Pa., veterinarian. As part of the program, Leveto utilized various methods to conceal his income from the IRS as directed by Turner. One of these methods included the purported sale of Leveto’s veterinary business to an alleged offshore entity called Center Company. Leveto actually retained dominion and control over the veterinary business. The object of the conspiracy was to conceal and prevent the IRS from discovering and identifying income received by the Levetos and assets held by them. In June of 2005, a jury convicted Leveto of all counts, and he was subsequently sentenced to 46 months in prison.
Turner faces a maximum punishment of up to five years in prison and a $250,000 fine. Judge Cohill scheduled sentencing for Jan. 18, 2012.
The case was investigated by IRS-Criminal Investigation and prosecuted by Justice Department Tax Division trial attorneys Andrew Young and Thomas Voracek.
More information about the Tax Division and its enforcement efforts can be found at www.justice.gov/tax .
Bridgestone Corporation Agrees to Plead Guilty to Participating in Conspiracies to Rig Bids and Bribe Foreign Government OfficialsRead the Press Release
WASHINGTON — Bridgestone Corporation has agreed to plead guilty and to pay a $28 million criminal fine for its role in conspiracies to rig bids and to make corrupt payments to foreign government officials in Latin America related to the sale of marine hose and other industrial products manufactured by the company and sold throughout the world, announced Acting Assistant Attorney General Sharis A. Pozen of the Department of Justice’s Antitrust Division and Assistant Attorney General Lanny A. Breuer of the Department of Justice’s Criminal Division.
A two-count criminal information was filed today in U.S. District Court in Houston against Bridgestone, a Tokyo-headquartered manufacturer of marine hose and other industrial products, charging the company with conspiring to violate the Sherman Act and the Foreign Corrupt Practices Act (FCPA). According to the court document, Bridgestone conspired to rig bids, fix prices and allocate market shares of marine hose in the United States and elsewhere and, separately, conspired to make corrupt payments to government officials in various Latin American countries to obtain and retain business. The department said Bridgestone participated in the conspiracies from as early as January 1999, and continuing until as late as May 2007.
Under the terms of the plea agreement, which is subject to court approval, Bridgestone has also agreed to cooperate fully in the department’s ongoing investigations.
Marine hose is a flexible rubber hose used to transfer oil between tankers and storage facilities. During the bid rigging conspiracy, according to the court document, the cartel affected prices for hundreds of millions of dollars worth of marine hose and related products sold worldwide.
According to the antitrust charge, Bridgestone and its co-conspirators agreed to allocate shares of the marine hose market and to use a price list for marine hose in order to implement the conspiracy. Bridgestone and its co-conspirators agreed not to compete for one another’s customers either by not submitting prices or bids, or by submitting intentionally high prices or bids to certain customers. As part of the conspiracy, Bridgestone and its co-conspirators provided information received from customers in the United States and elsewhere about upcoming marine hose jobs to a co-conspirator who served as the coordinator of the conspiracy. Bridgestone received marine hose prices for customers in the United States and elsewhere from the coordinator of the conspiracy and then sold the marine hose to those customers at collusive and noncompetitive prices and then concealed the conspiracy through various means, including code names, private email accounts and telephone numbers.
The department also charged that, in order to secure sales of marine hose in Latin America, Bridgestone authorized and approved corrupt payments to foreign government officials employed at state-owned entities. Bridgestone’s local sales agents agreed to pay employees of state-owned customers a percentage of the total value of proposed sales. When Bridgestone secured a sale, it would pay the local sales agent a “commission” consisting of not only the local sales agent’s actual commission but also the corrupt payments to be made to employees of the state-owned customer. The local sales agent then was responsible for passing the agreed-upon corrupt payment to the employees of the customer.
Bridgestone is the fifth company to be charged in the Antitrust Division’s bid rigging investigation. To date, nine individuals have been convicted and sentenced to a total of 4,557 days in prison for their involvement in the marine hose conspiracy, including Misao Hioki, the former general manager of Bridgestone’s international engineered products department, who was sentenced to two years in prison on Dec. 10, 2008. Hioki also pleaded guilty and was sentenced for his role in the FCPA conspiracy.
Bridgestone is charged with conspiring to violate the Sherman Act, which carries a maximum $100 million criminal fine for corporations. Bridgestone is also charged with conspiring to violate the FCPA, which carries a maximum $500,000 fine for corporations. The maximum fine for each count may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.
Under t he plea agreement, the department recognized Bridgestone’s cooperation with the investigations, including conducting a worldwide internal investigation, voluntarily making employees available for interviews, and collecting, analyzing and providing to the department voluminous evidence and information. In addition, the plea agreement acknowledges Bridgestone’s extensive remediation, including restructuring the relevant part of its business, terminating many of its third-party agents and taking remedial actions with respect to employees responsible for many of the corrupt payments. Under the terms of the plea agreement, Bridgestone has committed to continuing to enhance its compliance program and internal controls. As a result of these mitigating factors, the department agreed to recommend a substantially reduced fine.
This case is being prosecuted by the Antitrust Division’s National Criminal Enforcement Section and the Criminal Division’s Fraud Section. In addition to the Antitrust and Criminal Divisions, the ongoing investigation is being conducted by the Defense Criminal Investigative Service (DCIS) of the Department of Defense’s Office of Inspector General, the U.S. Navy Criminal Investigative Service and the FBI. Law enforcement agencies from multiple foreign jurisdictions are also investigating or assisting in the ongoing matter.
Anyone with information concerning bid rigging or other anticompetitive conduct in the marine products industry is urged to call the Antitrust Division’s National Criminal Enforcement Section at 202-307-6694, visit www.justice.gov/atr/contact/newcase.htm or the Long Beach, Calif., Resident Agency of the DCIS at 562-256-2501. Anyone with information concerning corrupt payments to foreign officials is urged to e-mail the Criminal Division’s Fraud Section at [email protected] or to call 202-514-7023. To learn more about the department’s ongoing FCPA enforcement efforts, go to www.justice.gov/criminal/fraud/fcpa.
Bridgestone Corporation Agrees to Plead Guilty to Participating in Conspiracies to Rig Bids and Bribe Foreign Government OfficialsRead the Press Release
WASHINGTON — Bridgestone Corporation has agreed to plead guilty and to pay a $28 million criminal fine for its role in conspiracies to rig bids and to make corrupt payments to foreign government officials in Latin America related to the sale of marine hose and other industrial products manufactured by the company and sold throughout the world, announced Acting Assistant Attorney General Sharis A. Pozen of the Department of Justice’s Antitrust Division and Assistant Attorney General Lanny A. Breuer of the Department of Justice’s Criminal Division.
A two-count criminal information was filed today in U.S. District Court in Houston against Bridgestone, a Tokyo-headquartered manufacturer of marine hose and other industrial products, charging the company with conspiring to violate the Sherman Act and the Foreign Corrupt Practices Act (FCPA). According to the court document, Bridgestone conspired to rig bids, fix prices and allocate market shares of marine hose in the United States and elsewhere and, separately, conspired to make corrupt payments to government officials in various Latin American countries to obtain and retain business. The department said Bridgestone participated in the conspiracies from as early as January 1999, and continuing until as late as May 2007.
Under the terms of the plea agreement, which is subject to court approval, Bridgestone has also agreed to cooperate fully in the department’s ongoing investigations.
Marine hose is a flexible rubber hose used to transfer oil between tankers and storage facilities. During the bid rigging conspiracy, according to the court document, the cartel affected prices for hundreds of millions of dollars worth of marine hose and related products sold worldwide.
According to the antitrust charge, Bridgestone and its co-conspirators agreed to allocate shares of the marine hose market and to use a price list for marine hose in order to implement the conspiracy. Bridgestone and its co-conspirators agreed not to compete for one another’s customers either by not submitting prices or bids, or by submitting intentionally high prices or bids to certain customers. As part of the conspiracy, Bridgestone and its co-conspirators provided information received from customers in the United States and elsewhere about upcoming marine hose jobs to a co-conspirator who served as the coordinator of the conspiracy. Bridgestone received marine hose prices for customers in the United States and elsewhere from the coordinator of the conspiracy and then sold the marine hose to those customers at collusive and noncompetitive prices and then concealed the conspiracy through various means, including code names, private email accounts and telephone numbers.
The department also charged that, in order to secure sales of marine hose in Latin America, Bridgestone authorized and approved corrupt payments to foreign government officials employed at state-owned entities. Bridgestone’s local sales agents agreed to pay employees of state-owned customers a percentage of the total value of proposed sales. When Bridgestone secured a sale, it would pay the local sales agent a “commission” consisting of not only the local sales agent’s actual commission but also the corrupt payments to be made to employees of the state-owned customer. The local sales agent then was responsible for passing the agreed-upon corrupt payment to the employees of the customer.
Bridgestone is the fifth company to be charged in the Antitrust Division’s bid rigging investigation. To date, nine individuals have been convicted and sentenced to a total of 4,557 days in prison for their involvement in the marine hose conspiracy, including Misao Hioki, the former general manager of Bridgestone’s international engineered products department, who was sentenced to two years in prison on Dec. 10, 2008. Hioki also pleaded guilty and was sentenced for his role in the FCPA conspiracy.
Bridgestone is charged with conspiring to violate the Sherman Act, which carries a maximum $100 million criminal fine for corporations. Bridgestone is also charged with conspiring to violate the FCPA, which carries a maximum $500,000 fine for corporations. The maximum fine for each count may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.
Under t he plea agreement, the department recognized Bridgestone’s cooperation with the investigations, including conducting a worldwide internal investigation, voluntarily making employees available for interviews, and collecting, analyzing and providing to the department voluminous evidence and information. In addition, the plea agreement acknowledges Bridgestone’s extensive remediation, including restructuring the relevant part of its business, terminating many of its third-party agents and taking remedial actions with respect to employees responsible for many of the corrupt payments. Under the terms of the plea agreement, Bridgestone has committed to continuing to enhance its compliance program and internal controls. As a result of these mitigating factors, the department agreed to recommend a substantially reduced fine.
This case is being prosecuted by the Antitrust Division’s National Criminal Enforcement Section and the Criminal Division’s Fraud Section. In addition to the Antitrust and Criminal Divisions, the ongoing investigation is being conducted by the Defense Criminal Investigative Service (DCIS) of the Department of Defense’s Office of Inspector General, the U.S. Navy Criminal Investigative Service and the FBI. Law enforcement agencies from multiple foreign jurisdictions are also investigating or assisting in the ongoing matter.
Anyone with information concerning bid rigging or other anticompetitive conduct in the marine products industry is urged to call the Antitrust Division’s National Criminal Enforcement Section at 202-307-6694, visit www.justice.gov/atr/contact/newcase.htm or the Long Beach, Calif., Resident Agency of the DCIS at 562-256-2501. Anyone with information concerning corrupt payments to foreign officials is urged to e-mail the Criminal Division’s Fraud Section at [email protected] or to call 202-514-7023. To learn more about the department’s ongoing FCPA enforcement efforts, go to www.justice.gov/criminal/fraud/fcpa.
Baton Rouge, La., Tax Preparer Sentenced to Prison for Aiding in Preparation of False Tax ReturnsRead the Press Release
WASHINGTON - Melissa Edwards was sentenced by U.S. District Court Judge Brian A. Jackson to 30 months in prison based on her plea of guilty to one count of wilfully aiding and assisting in the preparation and filing of a false income tax return, the Justice Department and Internal Revenue Service (IRS) announced today. The court also ordered Edwards to serve a one-year term of supervised release following her prison term and to pay restitution to the IRS in the amount of $56,040. The case arises out of a March 31, 2010, indictment filed in the Middle District of Louisiana.
According to her plea agreement, Edwards, who worked at Jasmine and Melissa’s Tax Service in Baton Rouge, La., prepared fraudulent tax returns for 20 clients that reported falsely inflated telephone excise tax refund (TETR) credits in the total amount of $126,856. The TETR credit was a one-time credit available to taxpayers for the 2006 year. The sentencing court found that the tax loss, including all relevant conduct, was between $400,000, but less than $1 million.
John A. DiCicco, Principal Deputy Assistant Attorney General for the Department of Justice Tax Division, commended the IRS Special Agents who investigated this case and Tax Division Trial Attorneys Kevin C. Lombardi and Matthew J. Mueller and Assistant U.S. Attorney Rene Salomon of the Middle District of Louisiana, who prosecuted the case.
More information about the Justice Department’s Tax Division and its enforcement efforts is available at www.usdoj.gov/tax/ .
Alabama Real Estate Investors Agree to Plead Guilty to Conspiracy to Rig Bids for the Purchase of Real Estate at Public Foreclosure AuctionsRead the Press Release
WASHINGTON – Two Mobile, Ala., real estate investors and one real estate investment company have agreed to plead guilty today for their roles in a conspiracy to rig bids for the purchase of real estate at public foreclosure auctions in southern Alabama, the Department of Justice announced.
Three separate charges were filed today in U.S. District Court for the Southern District of Alabama in Mobile against Allen K. French, M & B Builders LLC and its co-owner, Harold H. Buchman.
According to the felony charges, the real estate investors participated in a conspiracy to rig bids by agreeing to refrain from bidding against one another at public real estate foreclosure auctions in Mobile County and surrounding areas.
The department said that the primary purpose of the bid-rigging conspiracy was to suppress and restrain competition to obtain selected real estate offered at public foreclosure auctions at noncompetitive prices. When real estate properties are sold at these auctions, the proceeds are used to pay off the mortgage and other debt attached to the property, with remaining proceeds, if any, paid to the homeowner.
“The Antitrust Division continues to vigorously pursue bid-rigging conspiracies at real estate foreclosure auctions, and will work with its law enforcement partners to ensure that the process is fair and open so that consumers will benefit from competition,” said Sharis A. Pozen, Acting Assistant Attorney General in charge of the Department of Justice’s Antitrust Division.
According to the court documents, the real estate investors conspired with others not to bid against one another at public real estate foreclosure auctions in southern Alabama, participating in a conspiracy for various lengths of time between May 2001 and March 2010. After the conspirators’ designated bidder bought a property at the public auctions, which typically take place at the county courthouse, the conspirators would generally hold a secret, second auction at which each participant would bid the amount above the public auction price he was willing to pay. The highest bidder at the secret, second auction won the property.
FBI Special Agent in Charge Lewis M. Chapman recognized the perseverance of agents and prosecutors in this complex investigation. Chapman stated, “ This investigation sends the message that real estate fraud including antitrust violations will continue to be pursued in these tough economic times, no matter how intricate the scheme.”
French, Buchman and M & B Builders were each charged with one count of bid rigging to obtain selected real estate at foreclosure auctions. M & B Builders also was charged with one count of conspiracy to commit mail fraud. According to court documents, M & B Builders used the U.S. mail in carrying out the conspiracy to defraud financial institutions by paying potential competitors not to bid competitively in the public auctions for foreclosed properties.
Each violation of the Sherman Act carries a maximum penalty of 10 years in prison and a $1 million fine for individuals and a $100 million fine for companies. The maximum fine for the Sherman Act charges may be increased to twice the gain derived from the crime or twice the loss suffered by the victim if either amount is greater than the statutory maximum. Each count of conspiracy to commit mail fraud against a company carries a maximum fine in the amount equal to the greatest of $1 million, twice the gross gain the conspirators derived from the crime, or twice the gross loss caused to the victims of the crime by the conspirators.
The Antitrust Division and the FBI have identified a pattern of collusive schemes among real estate investors aimed at eliminating competition at real estate foreclosure auctions, and today’s charges are part of the department’s ongoing effort to combat this conduct and restore competition to public auctions. The investigation into fraud and bid rigging at certain real estate foreclosure auctions in Southern Alabama is being conducted by the Antitrust Division’s Atlanta Field Office and the FBI’s Mobile Field Office, with the assistance of the U.S. Attorney’s Office for the Southern District of Alabama. Anyone with information concerning bid rigging or fraud related to public real estate foreclosure auctions should contact the Antitrust Division’s Atlanta Field Office at 404-331-7100 or visit www.justice.gov/atr/contact/newcase.htm.
Today’s charges are part of efforts underway by President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency task force to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. For more information on the task force, visit www.StopFraud.gov.
Wednesday 14 September 2011
North Carolina Man Pleads Guilty to Terrorism ChargeRead the Press Release
RALEIGH, N.C. – Dylan Boyd , aka “Mohammed,” pleaded guilty today in federal court in New Bern, N.C., to one count of aiding and abetting a conspiracy to provide material support to terrorists, announced Lisa Monaco, Assistant Attorney General for National Security; Thomas G. Walker, U.S. Attorney for the Eastern District of North Carolina; M. Chris Briese, Special Agent-in-Charge of the FBI Charlotte Division; and John F. Khin, Special Agent-in-Charge, Southeast Field Office, Defense Criminal Investigative Service (DCIS).
Boyd, 24, a U.S. citizen and resident of North Carolina, was first charged along with seven other defendants in a federal indictment returned on July 22, 2009. He was arrested on July 29, 2009, and the indictment was unsealed. On Sept. 24, 2009, a federal grand jury returned a superseding indictment in the case.
According to the superseding indictment, from before November 2006 through at least July 2009, Boyd aided and abetted other named defendants and others who conspired to provide material support and resources to terrorists, including currency, training, transportation and personnel. The object of the conspiracy, according to the indictment, was to advance violent jihad, including supporting and participating in terrorist activities abroad and committing acts of murder, kidnapping or maiming persons abroad.
The indictment alleges that, as part of the conspiracy, Boyd assisted other defendants as they prepared themselves to engage in violent jihad and were willing to die as martyrs. They also allegedly offered training in weapons and financing, and helped arrange overseas travel and contacts so others could wage violent jihad overseas. In addition, as part of the conspiracy, the defendants raised money to support training efforts, disguised the destination of such monies from the donors and obtained assault weapons to develop skills with the weapons. Some defendants also allegedly radicalized others to believe that violent jihad was a personal religious obligation.
At sentencing, Boyd faces a potential 15 years in prison followed by three years of supervised release for aiding and abetting a conspiracy to provide material support to terrorists.
Boyd’s father and co-defendant, Daniel Patrick Boyd, pleaded guilty on Feb. 9, 2011, to one count of conspiracy to provide material support to terrorists and one count of conspiracy to murder kidnap, maim and injure persons in a foreign country. Boyd’s brother and co-defendant, Zakariya Boyd, pleaded guilty on June 7, 2011, to one count of conspiracy to provide material support to terrorists. Trial for the remaining co-defendants in custody is scheduled for September 2011.
The investigation was conducted by the FBI Raleigh-Durham Joint Terrorism Task Force, which includes the FBI, the DCIS, the North Carolina Alcohol Law Enforcement, the Raleigh Police Department, the Durham Police Department and the North Carolina Information Sharing and Analysis Center.
The prosecution is being handled by Assistant U.S. Attorneys John Bowler and Barbara D. Kocher of the U.S. Attorney’s Office for the Eastern District of North Carolina, and Trial Attorney Jason Kellhofer of the Counterterrorism Section in the Justice Department’s National Security Division.
New Orleans Man Sentenced in Danziger Bridge CaseRead the Press Release
NEW ORLEANS - David Marion Ryder, a civilian who provided false information about the police-involved shooting on the Danziger Bridge in the wake of Hurricane Katrina, was sentenced today to eight months in prison, the Justice Department announced. Ryder was also sentenced to eight months of home detention following his prison sentence. Ryder, of Opelousas, La., pleaded guilty on April 28, 2010 to illegally possessing a firearm, and for lying to the FBI during the federal investigation of the shooting, which left two civilians dead and four seriously wounded.
“The defendant lied to federal investigators about a horrendous incident that occurred during a devastating time for New Orleans,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The department successfully uncovered the events from that day, and will continue to work with the people of New Orleans in restoring their trust in the police department.”
Ryder was armed and dressed as a law enforcement officer on Sept. 4, 2005, the day of the Danziger Bridge shooting. As a convicted felon, Ryder was prohibited from carrying a firearm. Immediately after the shooting, Ryder lied to New Orleans Police Department (NOPD) investigators, falsely claiming that he had seen a civilian, Lance Madison, firing a weapon at police officers. In fact, Ryder later admitted during his guilty plea in federal court that he had not seen anybody fire at police officers. Madison, whose brother Ronald was one of the two civilians killed during the shooting on the bridge, was arrested on Sept. 4, 2005, in part based on Ryder’s false statement. Madison was eventually released from custody, and a state grand jury later declined to bring charges against him.
During a federal investigation that culminated in the conviction of 10 NOPD officers involved in the shooting and a cover-up that followed, Ryder lied to FBI agents about what he had seen on the bridge. Ryder admitted during his plea hearing that he lied to the FBI when he initially claimed that a civilian running toward the Danziger Bridge had shot at him on Sept. 4, 2005.
During the federal investigation of the Danziger Bridge shooting, five NOPD officers pleaded guilty, admitting their roles in the cover-up and agreeing to cooperate with the prosecution. Five additional officers – Sergeant Kenneth Bowen, Sergeant Robert Gisevius, Sergeant Arthur “Archie” Kaufman, Officer Robert Faulcon and Officer Anthony Villavaso – were convicted at trial on Aug. 5, 2011. Bowen, Gisevius, Faulcon and Villavaso were convicted of civil rights and firearm offenses for unjustifiably shooting the six civilians on the bridge, and all five defendants were convicted of obstructing justice in the wake of the shooting.
The five officers convicted at trial will be sentenced in December. A sixth officer, former Sergeant Gerard Dugue, is scheduled to stand trial in January 2012.
This case was prosecuted by Deputy Chief Bobbi Bernstein and Trial Attorney Cindy Chung of the Civil Rights Division, along with Assistant U.S. Attorney Ted Carter of the U.S. Attorney’s Office for the Eastern District of Louisiana.
Montgomery, Ala., Man Pleads Guilty for Role in Two Tax Fraud and Identity Theft ConspiraciesRead the Press Release
WASHINGTON – Alchico Grant, a resident of Montgomery, Ala., pleaded guilty to his role in two tax fraud and identity theft conspiracies, the Justice Department and the Internal Revenue Service (IRS) announced today. In addition to pleading guilty to one count of conspiracy to defraud the government with respect to claims, Grant pleaded guilty to 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, Grant 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 used stolen identities to file more than 500 fraudulent tax returns claiming millions of dollars in false tax refunds over a two-year period in 2009 and 2010. According to the plea agreement, Grant agreed that the loss associated with this case was more than $2.5 million but less than $7 million. He also agreed that this offense involved more than 250 or more victims.
As part of the conspiracy, Grant opened up bank accounts to receive false tax refunds, recruited other individuals to open bank accounts to receive false tax refunds, and directed others to disburse the tax refunds via checks made payable to third-parties. Grant directed the third-parties to cash the checks and to provide a substantial portion of the money to him. Grant also instructed some of the third parties who cashed the checks to provide false statements to law enforcement. Grant pleaded guilty to one count of conspiracy to defraud the United States and two counts of theft of government property.
Alchico Grant 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, Grant and others used stolen identities to file false tax returns claiming fraudulent refunds. As part of the scheme to defraud, Grant purchased prepaid debit cards and other participants directed false tax refunds to those cards. Grant used the prepaid debit cards to obtain the false tax refunds. Grant pleaded guilty to one count of wire fraud and to one count of aggravated identity theft.
Sentencing has not yet been scheduled. Grant faces a minimum of two years in prison and a maximum of fifty-two years in prison, three years of supervised release, restitution and a maximum fine of $250,000, or twice the loss caused by the offense.
IRS-Criminal Investigation agents investigated this case, and Justice Department Tax Division trial attorneys Jason Poole and Michael Boteler, and Jared Morris, Assistant U.S. Attorney in the Middle District of Alabama are prosecuting the case.
More information about the Tax Division and its enforcement efforts can be found at: www.justice.gov/tax .
Justice Department Awards $118 Million to Enhance, Support Tribal Justice and SafetyRead the Press Release
IGNACIO, Colo.– The Department of Justice today announced grants to nearly 150 American Indian and Alaskan Native nations providing $118.4 million to enhance law enforcement practices, and sustain crime prevention and intervention efforts in eight purpose areas: public safety and community policing; methamphetamine enforcement; justice systems and alcohol and substance abuse; corrections and correctional alternatives; violence against women; elder abuse; juvenile justice; and tribal youth programs.
The awards are made under the department’s Coordinated Tribal Assistance Solicitation (CTAS), a single application for tribal-specific grant programs.
Associate Attorney General Tom Perrelli announced this funding during the department’s 19th annual Four Corners Indian Country Conference in Ignacio, Colo., to an audience of nearly 300 attendees of tribal and federal law enforcement, prosecutors, judges and advocates in the fields of safety and justice. Associate Attorney General Perrelli spoke about the Justice Department’s commitment to enhancing public safety in Indian Country and the importance of a streamlined grant application process for federal funding.
“I am pleased today to announce the Justice Department’s continued investment in programs that offer innovative and comprehensive approaches to public safety and justice in Indian Country,” said Associate Attorney General Perrelli. “Our government-to-government consultations have been critical to our understanding of how to better serve and support our tribal partners. By deepening our engagement with tribal governments, we have sought to help put an end to the unacceptable and sobering crime rates witnessed in Indian Country.”
The department developed CTAS and administered the first round of consolidated grants in September 2010 in response to shared views of tribal leaders that the department’s grant-making process was too cumbersome and needed increased flexibility. Today, tribes seeking funding for more than one purpose area can submit a single grant application, instead of multiple applications.
The grants are administered by the Office of Community Oriented Policing, Office of Justice Programs and the Office on Violence Against Women. The complete list of the fiscal year 2011 CTAS grantees, a CTAS fact sheet and other information about the consolidated solicitation is also available at www.justice.gov/tribal .
Soon after he came into office, Attorney General Eric Holder identified building and sustaining safe and secure tribal nations as one of the Department of Justice’s top priorities. In June of 2009, the department launched a wide-ranging initiative to strengthen public safety in Indian Country. Since that time, the department has taken a number of steps to deepen its commitment to Indian nations and to develop more effective partnership with tribal leaders, police, prosecutors, courts and advocates to address and combat crime.
Former Natchez County, Miss., Officer Sentenced for Theft and Civil Rights ViolationsRead the Press Release
WASHINGTON – DeWayne Johnson, 33, of Natchez, Miss., and a former Natchez Police Department officer, was sentenced yesterday to 30 months in prison by U.S. District Court Judge David Bramlette for crimes related to the theft and subsequent unlawful use of credit cards that belonged to a person in the custody of Johnson while he was on duty, the Department of Justice announced. Johnson was also sentenced to serve two years supervised release.
“Officers are tasked with the duty to protect and serve the public, and when they fail to do so, they violate the public’s trust,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The department will aggressively prosecute any officer that violates the constitutional rights of those in their custody.”
“This sentencing should not reflect negatively on law enforcement or the Natchez Police Department,” said John Dowdy, U.S. Attorney for the Southern District of Mississippi. “There are thousands of law enforcement officers who maintain the highest level of integrity and professionalism as they put their lives on the line every day, but when a cop goes bad and crosses the line, like this defendant, they will be prosecuted and punished just like the criminals they arrest every day.”
“The vast majority of law enforcement officers and officials both uphold and obey the law, wielding the power and authority granted to them with the utmost integrity,” said Daniel McMullen, Special Agent in Charge of the FBI in Mississippi. “The few who violate the trust of their communities, exploiting their government-granted powers, will be caught and tried like any other criminals. The FBI is committed to maintaining trust in law enforcement by holding those who abuse their power accountable.”
Johnson was convicted at trial on March 2, 2011, for violating the civil rights of an arrestee in his custody when he stole credit cards and debit cards belonging to the arrestee. Johnson subsequently entered a guilty plea on July 28, 2010, to conspiring with his cousin, Patricia A. Wilson, to commit identity theft, credit card fraud and bank fraud. Wilson 35, of Ferriday, La., entered a similar guilty plea on July 22, 2010.
According to court documents and evidence at trial, Johnson drove a man under arrest to jail, stopped his patrol car and stole credit and debit cards from the arrestee in his custody. Johnson gave one of the stolen cards to Wilson for personal purchases, and according to Wilson, Johnson used one of the stolen cards to buy sneakers at retail stores in Natchez and later admitted to her that he had tried to use a second stolen card. Evidence at trial showed that the cards were used at a gas station, restaurants and retail stores in Natchez and Vidalia, La.
Wilson was sentenced yesterday by U.S. District Court Judge Bramlette to two years probation.
These cases were investigated by the Jackson, Miss., Division of the FBI and the Mississippi State Office of the Attorney General, and were prosecuted by Trial Attorneys Erin Aslan and Kevonne Small and Fara Gold and AeJean Cha of the Civil Rights Division of the U.S. Department of Justice and Assistant U.S. Attorney Glenda Haynes of the U.S. Attorney’s Office for the Southern District of Mississippi.
Former Heber City, Utah, Resident Indicted in Salt Lake City for Presenting False Claims to the United StatesRead the Press Release
WASHINGTON – April Rampton, formerly a resident of Heber City, Utah, was indicted by a federal grand jury in Salt Lake City with 15 counts of presenting false claims to the United States, the Justice Department and Internal Revenue Service (IRS) announced today.
According to the indictment, in August 2008, Rampton, filed a false amended income tax return in her name claiming an income tax refund of $227,325. Rampton’s false claim was based on the use of false Forms 1099-OID, Original Issue Discount. Thereafter, from October 2008 through February 2009, Rampton caused 14 additional false federal income tax returns to be filed on behalf of other individuals. These other false tax returns also used false Forms 1099-OID and claimed federal income tax refunds totaling more than $3 million.
An indictment merely alleges that a crime has been committed, and a defendant is presumed innocent until proven guilty beyond a reasonable double. If convicted, Rampton faces a maximum of 75 years in prison.
The case is being investigated by IRS-Criminal Investigation and is being prosecuted by Justice Department Tax Division Trial Attorneys Michael Romano and Stuart Wexler.
Detroit-Area Gas Station Owner and His Bookkeeper Convicted of Tax CrimeRead the Press Release
WASHINGTON– A Detroit federal jury today returned a guilty verdict against Elsayed Kazem “Tom” Safiedine and Mary Fawaz, the Justice Department and the Internal Revenue Service (IRS) announced.
The jury found Safiedine and Fawaz guilty of conspiring to defraud the United States by impeding and impairing the lawful functions of the IRS. Safiedine is an officer and member of multiple business entities that operate and lease gas stations in the Detroit area. Fawaz was an officer of one of Safiedine’s business entities and also served as a bookkeeper and office manager for several of Safiedine’s businesses.
According to the evidence presented at trial, from 1998 through 2001, Safiedine and Fawaz arranged for third parties to negotiate checks from Sunoco Incorporated made payable to JSC Corporation, a business operated by Safiedine. The checks from Sunoco Incorporated which totaled $845,000, were not properly reported to the accountant for JSC Corporation and as a result, were not included as income on JSC’s corporate tax returns filed with the IRS. Safiedine and Fawaz participated in the sale of a gas station owned by one of Safiedine’s businesses. The gas station sold for $875,000. Safiedine and Fawaz, however, told their accountant that the gas station sold for only $700,000, resulting in an understatement of $175,000 on the business’s income tax return.
Safiedine and Fawaz each face a maximum penalty of five years in prison and a maximum fine up to $250,000. The court did not set a sentencing date.
Barbara L. McQuade, U.S. Attorney for the Eastern District of Michigan, and John A. DiCicco, Principal Deputy Assistant Attorney General for the Department of Justice, Tax Division, noted the contribution of the IRS Special Agents who investigated this case, Tax Division Trial Attorneys Mark W. Kotila and Tiwana L. Wright, who prosecuted the case, and Paralegal Kimberly Better, who assisted.
More information about the Justice Department’s Tax Division and its enforcement efforts is available at www.usdoj.gov/tax.
Californian Convicted for Evading More Than $150,000 in TaxesRead the Press Release
WASHINGTON – William H. Nurick was convicted of one count of attempted evasion of payment of individual income taxes for the tax year 1995 following a jury trial before U.S. District Judge Dale S. Fischer in Los Angeles, the Justice Department and Internal Revenue Service (IRS) announced today.
According to documentary evidence and testimony presented at trial, in May 2000 Nurick filed an amended 1995 individual income tax return admitting he had a liability of $106,542 and that he took affirmative acts to conceal his ownership and control of assets to deceive the IRS regarding his true ability to pay his balance due. The evidence proved that Nurick used various nominee entities to conceal his interest in and control over bank accounts and real and personal property.
According to trial testimony, in January 2001, Nurick transferred approximately $133,000 from an offshore bank account controlled by him in the name of NG Enterprises to a witness’s offshore bank account. Nurick then, in February 2001, asked the witness for a $140,000 “loan” which was secured by a deed of trust on real estate owned by Nurick in Fresno County, California.
The government’s evidence also proved that, in May 2001, Nurick submitted a false “Offer in Compromise” to the IRS offering to pay $10,000 as full payment for the taxes and interest owed on his then debt of $157,122 for 1995 taxes and interest. The evidence showed Nurick intentionally deceived the IRS by signing a false financial statement under penalties of perjury which included the following false information: that he had a personal net worth of approximately $17,800, a monthly income of $3,333 and monthly expenses of $3,315 (for a net income of $18 monthly), and business assets of only $1,000.
Nurick also failed to list a motor vehicle as an asset, a bank account in Costa Rica with a balance in excess of $200,000 on the day he signed the Offer in Compromise and falsely stated that the Genesis Fund distribution he reported on his 2000 Form 1040 was a “final disposition” when in fact he continued to receive substantial distributions from the Genesis Fund which he did not report to the IRS and which he could have used to pay his 1995 tax liability. According to evidence presented at trial, the Genesis Fund, also known as The Human Element (T.H.E.), was an investment fund which operated from approximately 1994 through 2002. The Genesis Fund literature described foreign currency trading as the principal activity of the fund. Distributions were made from the Genesis Fund during the time period 1994 through 2002. The distributions were not intended to be gifts, loans, or notes which were required to be paid back by the recipient.
The evidence at trial demonstrated that Nurick deliberately and systematically attempted to rid himself of assets between May 2000 and April 2001 in order to willfully evade payment of the balance owed to the IRS for his 1995 income taxes. The evidence proved that he received approximately $1.1 million in distributions from the Genesis Fund between 1995 and 2002, including substantial distributions received between May 2000 and April 2001 from which he could have easily paid the 1995 balance due and intentionally chose not to do so.
Nurick faces up to five years in prison and a $250,000 fine. Judge Fisher scheduled Nurick’s sentencing for Dec. 12, 2011.
Tuesday 13 September 2011
Louisiana Brothers Plead Guilty and Are Sentenced for Knowingly Killing Protected AlligatorsRead the Press Release
WASHINGTON— Two Louisiana brothers pleaded guilty today and were sentenced in U.S. District Court in Baton Rouge, La., for Lacey Act violations for their role in illegally killing American Alligators in violation of the federal Endangered Species Act and Louisiana law, the Department of Justice Environment and Natural Resources Division announced.
According to statements made in court, in October 2005 and in September 2006, Clint Martinez, 44, a licensed alligator hunter, and his brother, Michael Martinez, 47, a licensed alligator helper, guided out-of-state alligator sport hunters who were clients of an outfitter, to areas for which they did not have appropriate state authorization to hunt. In October 2005, the sport hunter clients killed a 10 foot, two-inch trophy-sized alligator. In September 2006, the sport hunter clients killed a 10 foot trophy-sized alligator and a 12 foot, six-inch trophy-sized alligator.
The Martinez brothers, both of Plaquemine, La., were sentenced to serve a three year term of probation during which they will be prohibited from hunting as follows: for one year of the probation the defendants will be prohibited from engaging worldwide in all hunting activities, including guiding, with any kind of weapon; for the remaining two years of probation the defendants will be prohibited from engaging worldwide in all commercial alligator hunting activities, including guiding. In addition, each defendant will pay a $5,000 fine, serve 200 hours of community service, and publish a statement in a newspaper setting forth a brief summary of the offense and its potential penalties, and apologizing for their illegal conduct.
American Alligator hunting is a regulated commercial activity in the state of Louisiana due to severe over-hunting up until the 1960’s, resulting in a drastic population decline. Specifically, the Endangered Species Act prohibits the taking of wild American Alligators unless in compliance with Louisiana’s laws and regulations. Louisiana law requires hunters and helpers to hunt only on property for which alligator tags are issued by the state. Each tag specifies an area where alligator hunting is to occur. By law, licensed hunters and helpers are expected to know what the licensed alligator hunter’s hide tags provide, and hunt only in the area specified for each tag. It is illegal to kill an alligator in an area for which the licensed hunter or helper does not have appropriate hide tags. These regulations setting limitations on alligator hunting have allowed for the alligator population levels in Louisiana to rebound to sustainable levels.
In addition to being listed as a threatened species on the U.S. list of Threatened and Endangered Species, the American alligator also is listed as a crocodilian species on Appendix II of the Convention on International Trade in Endangered Species (CITES). To better regulate trade in crocodilian species, the parties to CITES agreed to a program of requiring a uniquely numbered tag to be inserted into the skin of each animal immediately after it is killed. The tag is to remain with the skin as it travels in interstate or international commerce until it is manufactured into a final consumer product. The secretary of the Interior promulgated special rules for American alligators that implement the CITES tagging program and regulate the harvest of alligators within the United States.
The case is being prosecuted by Shennie Patel and Susan Park of the Environmental Crimes Section of the Justice Department’s Environment and Natural Resources Division. The case was investigated by the Law Enforcement Division of the Louisiana Department of Wildlife and Fisheries and the U.S. Fish and Wildlife Service’s Office of Law Enforcement.
Las Vegas Woman Pleads Guilty 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 (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, Special Agent in Charge Paul Camacho of the Internal Revenue Service-Criminal Investigation (IRS-CI), and Sheriff Doug Gillespie of the Las Vegas Metropolitan Police Department.
Marcella Triana, 35, pleaded guilty before U.S. District Judge Kent J. Dawson in the District of Nevada to one count of conspiracy to commit mail and wire fraud.
According to the plea agreement, Triana admitted that from at least as early as July 2005 until at least in or about February 2009, 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 Triana’s co-conspirators.
According to plea documents, in order to accomplish the scheme, co-conspirators used straw purchasers to obtain mortgage loans for units within HOA communities. Triana admitted that she agreed to act as a straw purchaser of a property in the Chateau Versailles condominium complex in Las Vegas. Triana admitted that her co-conspirators provided the down payment and monthly payments, including HOA dues and mortgage payments, for the property and were the true owners of the property. She admitted that she signed and submitted a fraudulent loan application and closing documents to a financial institution in order to finance and close on the property on behalf of her co-conspirators. According to plea documents, Triana’s co-conspirators managed and operated the payments associated with maintaining straw properties owned and controlled by co-conspirators by running a so-called “Bill Pay Program,” by which co-conspirators funded the properties through several limited liability companies at the direction of a co-conspirator. Many of the payments were wired from California to Nevada.
Triana also admitted that she agreed to run for election to the HOA board at Chateau Versailles. Once elected to the Chateau Versailles board, Triana breached her statutory fiduciary duty to the homeowners by accepting from her co-conspirators compensation, gratuities and other remuneration that improperly influenced, or reasonably appeared to influence, her decisions, resulting in a conflict of interest. Triana admitted that after being elected to the Chateau Versailles board and accepting payments from her co-conspirators, she voted in a manner directed by and favorable to her co-conspirators, including voting to hire a law firm and construction company designated by her co-conspirators to handle legal and construction work at the condominium.
Triana admitted that she also helped to manipulate the election process at the Park Avenue condominium complex and at other HOA communities to ensure that additional straw purchasers and co-conspirators won positions on the HOA boards and would vote as directed by co-conspirators.
Triana also admitted that she knew that co-conspirators manipulated the election process by creating fake labels and ballots, and supplying homeowner mailing lists to co-conspirators, which were used to create forged ballots for non-voting homeowners. According to plea documents, co-conspirators also used homeowner mailing lists to call out-of-state homeowners in order to gather information about their voting intentions, and to mail forged ballots from California to Las Vegas to make the forged votes for out-of-town homeowners appear to be legitimate.
Triana further admitted that in or about January 2009, after local and federal law enforcement officials executed search warrants at the homes and businesses of several of her co-conspirators, Triana, at the direction of a co-conspirator, further abused her power as a board member at Chateau Versailles by signing two checks on the account of the HOA payable to the co-conspirator. The checks totaled approximately $70,000. According to court documents, this money was used for the purpose of enriching the co-conspirator at the expense of bona fide homeowners.
Triana’s sentencing is scheduled for Dec. 14, 2011. 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, Assistant Chief Michael Bresnick 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.
Former North Carolinian Sentenced for Obstructing and Impeding the Internal Revenue ServiceRead the Press Release
WASHINGTON – Maurice Goulet was sentenced today in Charlotte, N.C., by U.S. District Court Judge Robert J. Conrad Jr. to six months in prison for his conviction for corruptly endeavoring to obstruct and impede the due administration of the internal revenue laws, the Justice Department and Internal Revenue Service (IRS), announced today. Goulet pleaded guilty on Feb. 7, 2011.
According to court documents, between at least June 1, 1999 and 2001, Goulet was involved with several cigarette businesses, including, Birdtown Enterprises, Consumer Direct Buyers Network LLC and Greenwood Ventures LLC. Beginning in or about 1999, he obtained and used a series of bogus entities to conduct the cigarette business and to divert and conceal his income and assets from the IRS. Between 1999 and 2001, none of these entities filed tax returns with the IRS.
Goulet further admitted that he took a variety of steps to further conceal his income and assets from the IRS for the purpose of obstructing and impeding the due administration of the Internal Revenue laws, including that he used these nominee entities to purchase assets, including two motor homes and a vehicle in nominee names and entities; he used false Employer Identification Numbers (EIN) on bank accounts; he caused a false lien to be placed on at least one asset; and he made false statements to a special agent with the IRS. Goulet also admitted that prior to 2005, the last personal income tax return, IRS Form 1040, that he filed with the IRS was in 1996.
In addition to the prison term, the court sentenced Goulet to six months of home confinement, one year supervised release and ordered him to pay restitution to the IRS in the amount of $170,717.
This case was investigated by IRS-Criminal Investigation and prosecuted by Assistant U.S. Attorney Mark Odulio of the Western District of North Carolina and Justice Department Tax Division Trial Attorney Caryn Finley.
Final Defendant Pleads Guilty for His Role in International Conspiracy Involving the Forced Labor of Eastern European Women in Detroit-Area Exotic Dance ClubsRead the Press Release
WASHINGTON – A naturalized U.S. citizen originally from Ukraine pleaded guilty today in federal court in Detroit, Mich., for crimes related to an international conspiracy to compel Eastern European women to work in exotic dance clubs in the Detroit metropolitan area, announced the Justice Department. Veniamin Gonikman, 56, who became a fugitive in 2005, was apprehended in Ukraine in January 2011. He is the ninth and final member of the charged conspiracy to be convicted.
According to information presented in court filings, between September 2001 and February 2005, Gonikman, together with his son, Aleksandr Maksimenko, a U.S. citizen, and Michael Aronov, a Lithuanian national, operated Beauty Search Inc., a business that brokered and managed Eastern European women who performed in exotic dance clubs in the Detroit area. The three men recruited a number of these women in Ukraine, facilitated their illegal entry into the United States, and then harbored them for commercial advantage and private financial gain. In 2001, Gonikman facilitated the smuggling into the United States of two young Eastern European women from Ukraine, through Mexico, into the United States, and ultimately to Detroit, where the women were compelled to serve as exotic dancers.
“Human trafficking is the equivalent of modern day slavery. It deprives the victims of their freedom and dignity and it has no place in our country,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The Justice Department is committed to the aggressive prosecution of those who rob individuals of their freedom for financial gain.”
“ This conviction brings the final member of this human trafficking ring to justice,” Barbara McQuade, U.S. Attorney for the Eastern District of Michigan. “These defendants treated human beings like a commodity, enticing Eastern European women to come to the United States illegally, then exploiting them for commercial advantage.”
“This conviction closes the door on a human trafficking organization responsible for wreaking havoc on the lives of women who came to the U.S. in pursuit of the American dream,” said Brian M. Moskowitz, Special Agent in Charge of the U.S. Immigration and Customs Enforcement ‘s (ICE) Homeland Security Investigations for Michigan and Ohio. “Unfortunately, we know there are still traffickers out there looking to exploit the most vulnerable among us. 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 this form of modern day slavery."
The lead defendants in this case, Maksimenko and Aronov, pleaded guilty in 2006 to forced labor, immigration, and money laundering charges. Maksimenko was sentenced to fourteen years in prison and ordered to pay $1,570,450 in restitution to the victims. Aronov was sentenced to seven-and-a-half years in prison and ordered to pay $1 million in restitution.
Six other defendants were also convicted in 2006 for their respective roles in the conspiracy, including: Duay Jado, a Greek national, who was sentenced to four years in prison for setting a victim’s car on fire to retaliate for her escape and to intimidate the other victims; two Ukrainian nationals, Eygeniy Propenko and Alexander Bondarenko, who were convicted of visa fraud to facilitate victims’ illegal entry into the United States; and Anna Gonikman-Starchenko, a Ukrainian national formerly married to Gonikman, Niki Papoutsaki, a Greek national formerly married to Aleksandr Maksimenko, and Valentina Maksimenko, a naturalized U.S. citizen also formerly married to Veniamin Gonikman, all three of whom pleaded guilty to obstruction-related charges.
Under the terms of Gonikman’s plea agreement, he faces a maximum sentence of 51 months in prison. Sentencing is scheduled for Jan. 26, 2012, before U.S. District Judge Victoria A. Roberts.
The case was investigated by ICE, the FBI, the Internal Revenue Service and the State Department. The case was prosecuted by Assistant U.S. Attorney Mark Chutkow and Trial Attorney Benjamin J. Hawk of the Civil Rights Division’s Human Trafficking Prosecution Unit. Peter Ziedas, Assistant U.S. Attorney, is handling the asset forfeiture part of the case.
Monday 12 September 2011
Two Alabamians Plead Guilty for Role in Tax Fraud ConspiracyRead the Press Release
WASHINGTON – Valerie Byrd and Isaac Dailey, both residents of Montgomery County, Ala., each pleaded guilty to one count of conspiring to defraud the United States, the Department of Justice and the Internal Revenue Service (IRS) announced today.
According to court documents, between February 2011 and April 2011, Byrd conspired with others to fraudulently obtain tax refunds. The conspiracy involved using stolen identities to file false income tax returns claiming refunds. Byrd opened up four bank accounts to receive tax refunds from the scheme. Thirty different refunds, issued in the name of 30 different individuals, were deposited into the bank accounts. To disburse these proceeds, Byrd would transfer the funds to her co-conspirators or withdraw cash. Byrd retained a portion of the proceeds for herself.
Isaac Dailey was previously indicted by a federal grand jury sitting in Montgomery, Ala., on Dec. 14, 2010, on a variety of charges stemming from a large-scale tax fraud and identity theft conspiracy based in Montgomery. According to court documents, the conspirators used stolen identities to file millions of dollars in false tax returns claiming fraudulent refunds over a two-year period in 2009 and 2010. Between January of 2009 and May of 2010, Dailey was responsible for funneling tens of thousands of dollars in false tax refunds to his co-conspirators. Dailey permitted his co-conspirators to deposit fraudulent tax refunds into his bank account. Dailey would withdraw the money, provide the funds to various co-conspirators and retain a portion of each of these transactions.
Sentencing has not yet been scheduled for either Byrd or Dailey. Both face 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 Justice Department’s Tax Division, and Assistant U.S. Attorney Jared Morris of the Middle District of Alabama are prosecuting the case.
Additional information about the Justice Department's Tax Division and its enforcement efforts may be found at www.justice.gov/tax.
Three Plead Guilty to Conspiracy to Provide Material Support to the Pakistani TalibanRead the Press Release
WASHINGTON – Three Pakistani citizens pleaded guilty today in the District of Columbia to conspiracy to provide material support to the Tehrik-e Taliban Pakistan (TTP), often referred to as the Pakistani Taliban, a designated foreign terrorist organization.
The guilty pleas were announced by Assistant Attorney General for National Security Lisa Monaco; Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney Ronald C. Machen Jr. for the District for District of Columbia; John Morton, Director of U.S. Immigration and Customs Enforcement (ICE); and John V. Gillies, Special Agent in Charge of the FBI Miami Division.
At a hearing today before U.S. District Judge John D. Bates in Washington, D.C., Irfan Ul Haq, 37; Qasim Ali, 32; and Zahid Yousaf, 43, each pleaded guilty to one count of conspiracy to provide material support to a designated foreign terrorist organization. At sentencing, which is scheduled for Dec. 9, 2011, each defendant faces a maximum sentence of 15 years in prison and a fine of up to $250,000. As part of their plea agreements, the defendants have agreed to a stipulated order of removal to Pakistan upon the completion of their criminal sentences.
“Today’s case underscores the threat posed by human smuggling networks that facilitate terrorist travel,” said Assistant Attorney General Monaco. “I thank the many agents, analysts and prosecutors who were responsible for this successful investigation.”
“These defendants sought to smuggle someone they believed to be a member of a terrorist organization from halfway around the world into the United States,” said Assistant Attorney General Breuer. “For financial profit, they were willing to jeopardize the safety and security of the American people. Human smuggling operations pose a serious risk to our national security, and we will continue to work closely with our law enforcement partners at home and abroad to combat this dangerous threat.”
“These criminals were willing to use their human smuggling network to help a terrorist slip across our border without any regard for the consequences,” said U.S Attorney Machen. “Ten years after 9/11, this case reminds us that we must remain aggressive to stop terrorists from infiltrating our homeland and harming our nation.”
“ICE Homeland Security Investigations (HSI) agents will continue to use every available resource to protect the American public from terrorist organizations and individuals who support them,” said ICE Director Morton. “Today’s announcement demonstrates our international resolve to ensuring that our nation is safer and more secure. I applaud the outstanding work conducted by our HSI attaché office in Ecuador who led this extensive investigation. I would also like to commend our HSI office in Atlanta, along with our law enforcement partners in the United States and Ecuador, who assisted us in this case.”
“These criminals said they didn’t care if the men they smuggled ‘swept floors or blow up’ something. As long as they got paid, they did not care if innocent people would be killed in a potential terrorist attack,” said FBI Special Agent in Charge Gillies. “The FBI’s number one priority is counterterrorism and we will continue to work with our partners to protect the U.S. and its people from harm.”
Ul Haq, Ali and Yousaf were arrested in Miami on March 13, 2011, on an indictment filed in the District of Columbia charging them with one count of conspiracy to commit alien smuggling. Based on the defendants’ guilty pleas to terrorism conspiracy charges, the government will dismiss at the sentencing hearing the charges of conspiracy to commit alien smuggling against the defendants.
Ul Haq, Ali and Yousaf admitted that between Jan. 3, 2011, and March 10, 2011, they conspired to provide material support to the TTP in the form of false documentation and identification, knowing that the TTP engages in terrorist activity and terrorism. According to court documents, Ul Haq, Ali and Yousaf conducted a human smuggling operation in Quito, Ecuador, that attempted to smuggle an individual they believed to be a member of the TTP from Pakistan into the United States. The TTP was designated as a foreign terrorist organization by the State Department on Sept. 1, 2010.
Court documents indicate that law enforcement agents directed confidential sources to ask the defendants, who were residing in Ecuador at the time, for their assistance in smuggling a fictitious person from Pakistan to the United States. Over the course of the ensuing negotiations, the defendants were made aware that the person to be smuggled was a member of the TTP who was blacklisted in Pakistan.
According to the court documents, the defendants agreed to move this person from Pakistan into the United States, despite his purported affiliation with the TTP. Ul Haq, according to the court documents, told the confidential sources that it was “not their concern” what the men “want to do in the United States – hard labor, sweep floor, wash dishes in a hotel, or blow up. That will be up to them.” The defendants accepted payment from the confidential sources for the smuggling operation and procured a false Pakistani passport for the purported TTP member.
The investigation was conducted by the HSI attaché office in Quito, Ecuador, with the HSI office in Atlanta, the Miami Division of the FBI and the Ecuadorian National Police.
The investigation was conducted under the Extraterritorial Criminal Travel Strike Force (ECT) program, a joint partnership between the Justice Department’s Criminal Division and HSI. The ECT program focuses on human smuggling networks that may present particular national security or public safety risks, or present grave humanitarian concerns. ECT has dedicated investigative, intelligence and prosecutorial resources. ECT coordinates and receives assistance from other U.S. government agencies and foreign law enforcement authorities.
The Criminal Division’s Office of International Affairs, the U.S. National Central Bureau of INTERPOL, the U.S. Customs and Border Protection, the U.S. Embassy in Quito and the Government of Ecuador provided invaluable support.
The case was prosecuted jointly by prosecutors from the Human Rights and Special Prosecutions Section of the Criminal Division, the Counterterrorism Section of the National Security Division and the U.S. Attorney’s Office for the District of Columbia.
Three Plead Guilty to Conspiracy to Provide Material Support to the Pakistani TalibanRead the Press Release
WASHINGTON – Three Pakistani citizens pleaded guilty today in the District of Columbia to conspiracy to provide material support to the Tehrik-e Taliban Pakistan (TTP), often referred to as the Pakistani Taliban, a designated foreign terrorist organization.
The guilty pleas were announced by Assistant Attorney General for National Security Lisa Monaco; Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney Ronald C. Machen Jr. for the District of Columbia; John Morton, Director of U.S. Immigration and Customs Enforcement (ICE); and John V. Gillies, Special Agent in Charge of the FBI Miami Division.
At a hearing today before U.S. District Judge John D. Bates in Washington, D.C., Irfan Ul Haq, 37; Qasim Ali, 32; and Zahid Yousaf, 43, each pleaded guilty to one count of conspiracy to provide material support to a designated foreign terrorist organization. At sentencing, which is scheduled for Dec. 9, 2011, each defendant faces a maximum sentence of 15 years in prison and a fine of up to $250,000. As part of their plea agreements, the defendants have agreed to a stipulated order of removal to Pakistan upon the completion of their criminal sentences.
“Today’s case underscores the threat posed by human smuggling networks that facilitate terrorist travel,” said Assistant Attorney General Monaco. “I thank the many agents, analysts and prosecutors who were responsible for this successful investigation.”
“These defendants sought to smuggle someone they believed to be a member of a terrorist organization from halfway around the world into the United States,” said Assistant Attorney General Breuer. “For financial profit, they were willing to jeopardize the safety and security of the American people. Human smuggling operations pose a serious risk to our national security, and we will continue to work closely with our law enforcement partners at home and abroad to combat this dangerous threat.”
“These criminals were willing to use their human smuggling network to help a terrorist slip across our border without any regard for the consequences,” said U.S Attorney Machen. “Ten years after 9/11, this case reminds us that we must remain aggressive to stop terrorists from infiltrating our homeland and harming our nation.”
“ICE Homeland Security Investigations (HSI) agents will continue to use every available resource to protect the American public from terrorist organizations and individuals who support them,” said ICE Director Morton. “Today’s announcement demonstrates our international resolve to ensuring that our nation is safer and more secure. I applaud the outstanding work conducted by our HSI attaché office in Ecuador who led this extensive investigation. I would also like to commend our HSI office in Atlanta, along with our law enforcement partners in the United States and Ecuador, who assisted us in this case.”
“These criminals said they didn’t care if the men they smuggled ‘swept floors or blow up’ something. As long as they got paid, they did not care if innocent people would be killed in a potential terrorist attack,” said FBI Special Agent in Charge Gillies. “The FBI’s number one priority is counterterrorism and we will continue to work with our partners to protect the U.S. and its people from harm.”
Ul Haq, Ali and Yousaf were arrested in Miami on March 13, 2011, on an indictment filed in the District of Columbia charging them with one count of conspiracy to commit alien smuggling. Based on the defendants’ guilty pleas to terrorism conspiracy charges, the government will dismiss at the sentencing hearing the charges of conspiracy to commit alien smuggling against the defendants.
Ul Haq, Ali and Yousaf admitted that between Jan. 3, 2011, and March 10, 2011, they conspired to provide material support to the TTP in the form of false documentation and identification, knowing that the TTP engages in terrorist activity and terrorism. According to court documents, Ul Haq, Ali and Yousaf conducted a human smuggling operation in Quito, Ecuador, that attempted to smuggle an individual they believed to be a member of the TTP from Pakistan into the United States. The TTP was designated as a foreign terrorist organization by the State Department on Sept. 1, 2010.
Court documents indicate that law enforcement agents directed confidential sources to ask the defendants, who were residing in Ecuador at the time, for their assistance in smuggling a fictitious person from Pakistan to the United States. Over the course of the ensuing negotiations, the defendants were made aware that the person to be smuggled was a member of the TTP who was blacklisted in Pakistan.
According to the court documents, the defendants agreed to move this person from Pakistan into the United States, despite his purported affiliation with the TTP. Ul Haq, according to the court documents, told the confidential sources that it was “not their concern” what the men “want to do in the United States – hard labor, sweep floor, wash dishes in a hotel, or blow up. That will be up to them.” The defendants accepted payment from the confidential sources for the smuggling operation and procured a false Pakistani passport for the purported TTP member.
The investigation was conducted by the HSI attaché office in Quito, Ecuador, with the HSI office in Atlanta, the Miami Division of the FBI and the Ecuadorian National Police.
The investigation was conducted under the Extraterritorial Criminal Travel Strike Force (ECT) program, a joint partnership between the Justice Department’s Criminal Division and HSI. The ECT program focuses on human smuggling networks that may present particular national security or public safety risks, or present grave humanitarian concerns. ECT has dedicated investigative, intelligence and prosecutorial resources. ECT coordinates and receives assistance from other U.S. government agencies and foreign law enforcement authorities.
The Criminal Division’s Office of International Affairs, the U.S. National Central Bureau of INTERPOL, the U.S. Customs and Border Protection, the U.S. Embassy in Quito and the Government of Ecuador provided invaluable support.
The case was prosecuted jointly by prosecutors from the Human Rights and Special Prosecutions Section of the Criminal Division, the Counterterrorism Section of the National Security Division and the U.S. Attorney’s Office for the District of Columbia.
Second California Aftermarket Auto Lights Distributor Agrees to Plead Guilty in Price-Fixing ConspiracyRead the Press Release
WASHINGTON – A second California aftermarket auto lights distributor has agreed to plead guilty for participating in a global conspiracy to fix the prices of aftermarket auto lights, the Department of Justice announced. Aftermarket auto lights are incorporated into an automobile after its original sale, often as repairs following a collision or as accessories and upgrades.
According to a one-count felony charge filed today in U.S. District Court in San Francisco, Maxzone Vehicle Lighting Corp. conspired with others to suppress and eliminate competition by fixing the prices of aftermarket auto lights. The department said that Maxzone, a wholly-owned subsidiary of the Taiwan-based aftermarket auto lights manufacturer Depo Auto Parts Industrial Co. Ltd., participated in the conspiracy from about April 2000 to about Sept. 3, 2008. Under the plea agreement, which is subject to court approval, Maxzone has agreed to pay a $43 million criminal fine and to assist the department in its ongoing investigation into the aftermarket auto lights industry.
According to the charge, Maxzone and co-conspirators participated in a conspiracy in which the participants met and agreed to charge prices of aftermarket auto lights at certain predetermined levels. According to the court documents, the participants in the conspiracy issued price announcements and price lists in accordance with the agreements reached, and collected and exchanged information on prices and sales of aftermarket auto lights for the purpose of monitoring and enforcing adherence to the agreed-upon prices. The department said that the conspirators met in Taiwan, the United States and elsewhere for their discussions.
Maxzone is the second U.S. distributor of aftermarket auto lights to be charged in connection with the department’s ongoing investigation into the aftermarket auto lights industry. On Aug. 30, 2011, the department announced that Sabry Lee (U.S.A.) Inc. was charged and had agreed to plead guilty. Three individuals have also been charged. Polo Shu-Sheng Hsu, the former president and chief executive officer of Maxzone, entered his guilty plea on March 29, 2011, and was sentenced to serve 180 days in prison and to pay a $25,000 criminal fine. Chien Chung Chen, aka Andrew Chen, the former executive vice president of Sabry Lee, pleaded guilty to his participation in the conspiracy on June 7, 2011. He is currently scheduled to be sentenced on Dec. 13, 2011. Homy Hong-Ming Hsu was arrested at Los Angeles International Airport on July 12, 2011, and indicted on July 19, 2011. Homy Hong-Ming Hsu is the vice chairman and second highest-ranking officer of a Taiwan manufacturer of aftermarket auto lights.
Maxzone is charged with violating the Sherman Act, which carries a maximum penalty of a $100 million criminal fine. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims, if either of those amounts is greater than the statutory maximum fine.
This case is part of an ongoing joint investigation of the Department of Justice Antitrust Division’s San Francisco Office and the FBI in San Francisco. Anyone with information concerning illegal or anticompetitive conduct in the aftermarket auto lights industry is urged to call the Antitrust Division’s San Francisco Field Office at 415-436-6660 or visit www.justice.gov/atr/contact/newcase.htm.
Maxim Healthcare Services Charged with Fraud, Agrees to Pay Approximately $150 Million, Enact Reforms After False Billings Revealed as Common PracticeRead the Press Release
NEWARK, N.J. – Maxim Healthcare Services Inc., one of the nation’s leading providers of home healthcare services, has entered into a settlement to resolve criminal and civil charges relating to a nationwide scheme to defraud Medicaid programs and the Veterans Affairs program of more than $61 million.
Today’s announcement was made by Tony West, Assistant Attorney General of the Civil Division of the Department of Justice; J. Gilmore Childers, Acting U.S. Attorney for the District of New Jersey; Tom ODonnell, Special Agent in Charge of the Health and Human Services Office of Inspector General (HHS-OIG) region covering New Jersey; Michael B. Ward, Special Agent in Charge of the FBI’s Newark, N.J., Field Office; and Jeffrey Hughes, Special Agent in Charge of the U.S. Department of Veterans Affairs, Office of the Inspector General (VA OIG), Northeast Field Office.
Maxim was charged today in a criminal complaint with conspiracy to commit health care fraud, and has entered into a deferred prosecution agreement (DPA) with the Department of Justice. The agreement will allow Maxim to avoid a health care fraud conviction on the charges if it complies with the DPA’s requirements. As required by the DPA, which will expire in 24 months if the company meets all of its reform and compliance requirements, Maxim has agreed to pay a criminal penalty of $20 million and to pay approximately $130 million in civil settlements in the matter, including to federal False Claims Act claims.
To date, nine individuals – eight former Maxim employees, including three senior managers and the parent of a former Maxim patient – have pleaded guilty to felony charges arising out of the submission of fraudulent billings to government health care programs, the creation of fraudulent documentation associated with government program billings, or false statements to government health care program officials regarding Maxim’s activities.
The criminal complaint accuses Maxim, a privately-held company based in Columbia, Md., with hundreds of offices throughout the United States, of submitting more than $61 million in fraudulent billings to government health care programs for services not rendered or otherwise not reimbursable. The investigation revealed that the submission of false bills to government health care programs was a common practice at Maxim from 2003 through 2009. During that time period, Maxim received more than $2 billion in reimbursements from government health care programs in 43 states based on billings submitted by Maxim.
“Fraudulent billing for services not rendered uses patients as pawns in a game of corporate greed that puts cash over care and wastes precious taxpayer dollars,” said Assistant Attorney General West. “At a time when we're all looking for ways to reduce public expenditures, settlements like this one recapture taxpayer dollars lost to fraud and abuse, and help ensure that funds are available for the vital health care programs and services that people depend on day in and day out.”
“Maxim, including senior executives, defrauded a system providing needed services to turn money meant for patient care into corporate profits,” said Acting U.S. Attorney Childers. “We will continue to prove our commitment to investigating and prosecuting both companies and individuals whose misconduct robs our nation’s health care programs and those who count on them. It is our hope that Maxim, in cleaning up its own house, will be a lighthouse influencing best practices across the industry.”
“Companies scheming to profit by deceiving patients and defrauding taxpayer-funded government health care programs can expect close scrutiny and aggressive investigation,” said HHS-OIG Special Agent in Charge ODonnell. “We will continue to carefully guard the nation’s vital health programs against those who put greed over patient care.”
“Health care fraud is a considerable problem in New Jersey with residents being victimized by an estimated $7.5 billion in care-related frauds in 2010,” said FBI Special Agent in Charge Ward. “The criminal conduct by Maxim in this instance was significant and systemic, which resulted in both the company and individuals being liable for their actions. The Newark Division of the FBI is committed to its stance of being among the most aggressive offices in pursuit and ultimate prosecution of health care fraud offenders.”
“Today’s announcement demonstrates the Department of Veterans Affairs Office of Inspector General’s commitment to focus investigative resources on companies that choose to pursue profit over the public’s health,” said VA OIG Special Agent in Charge Hughes. “VA OIG applauds the hard work of the Department of Justice and our law enforcement counterparts in bringing about this successful conclusion by aggressively pursuing and prosecuting those who committed fraud against our nation’s federal healthcare programs, including VA’s.”
As part of the DPA, Maxim has stipulated to a statement of facts which mirrors the language of the criminal complaint. In the event that Maxim fails to comply with the provisions of the DPA, Maxim has agreed that the U.S. Attorney’s Office may proceed with its prosecution of Maxim and use the agreed-upon statement of facts against it in the prosecution.
As detailed in the criminal complaint, Maxim, through its former officers and employees, falsely and fraudulently submitted billings to government health care programs for services not rendered or otherwise not reimbursable by government health care programs from 2003 through 2009. In order to conceal the fraud, Maxim’s former officers and employees engaged in various conduct during that time period, including creating or modifying time sheets to support billings to government health care programs for services not rendered. They also submitted billings through licensed offices for care actually supervised by offices which operated without licenses and whose existence was concealed from government health care program auditors and investigators. Additionally, they created or modified documentation relating to required administrative functions associated with billings submitted to government health care programs, including documentation reflecting required training and qualifications of caregivers.
The DPA obliges Maxim to continue cooperating in the government’s ongoing federal and state criminal investigation of former Maxim executives and employees responsible for the alleged conduct at issue, and to develop and operate an effective corporate compliance and governance program that includes adequate internal controls to prevent the recurrence of any improper or illegal activities.
The DPA requires Maxim’s acceptance and acknowledgment of full responsibility for the conduct that led to the government’s investigation.
The settlement requires payment of approximately $130 million to Medicaid programs and the Veterans Affairs program to resolve False Claims Act liability for false home healthcare billings to Medicaid programs and the Veterans Administration under civil agreements relating to this matter. The settlement resolves allegations that Maxim billed for services that were not rendered, services that were not properly documented, and services performed by 13 unlicensed offices. Maxim has agreed to pay approximately $70 million to the federal government and approximately $60 million to 42.
Also included in the settlement is a corporate integrity agreement with HHS-OIG, which requires additional reforms and monitoring under HHS-OIG supervision.
In addition, the company must also retain and pay an independent monitor, who will review Maxim’s business operations and regularly report concerning the company’s compliance with all federal and state health care laws, regulations, and programs. The monitor was selected by the U.S. Attorney’s Office, consistent with U.S. Department of Justice guidelines, after a review of monitor candidates and in consultation with the company. Maxim will be monitored by Peter Keith of the law firm Gallagher, Evelius & Jones, which is headquartered in Baltimore.
Prosecution of Individuals
According to documents filed in these cases and statements made in Trenton, N.J., federal court:
Gregory Munzel, 35, of Charleston, S.C., was employed as a regional account manager, reporting directly to a vice president, responsible for Maxim offices throughout the southeastern United States. He pleaded guilty on Dec. 4, 2009, to one count of making false statements relating to health care fraud matters. During his plea hearing, Munzel admitted that he was aware individuals he supervised were submitting time cards for work that had not actually been done – a practice Munzel said was in response to pressure from Maxim superiors to increase revenue. Munzel also acknowledged forging caregiver credentials such as CPR cards throughout his time at Maxim, in order to make it appear that the caregivers were properly credentialed, when they were not. Munzel indicated he learned the practice from his supervisors when he first joined Maxim, and that those under him engaged in the practice when he took on a leadership role with the company. Munzel is currently scheduled to be sentenced Sept. 29, 2011.
Bryan Lee Shipman, 38, of Athens, Ga., worked for Maxim for 13 years, the last eight as a regional account manager, reporting directly to a vice president. He pleaded guilty on June 17, 2010, to one count of health care fraud. During his plea hearing, Shipman acknowledged that Maxim’s Gainesville, Ga., office operated without a license from 2008 through 2009, and that he and others directed billings from that office to be submitted as if they were from another, licensed office to be approved for reimbursement by the Medicaid program. At one point, when Maxim employees believed a state regulator would be visiting the office, lower-level employees were directed to provide false information to the state regulator in an effort to prevent the Medicaid program from learning about the unlicensed operation of the office. Shipman said his superiors demanded levels of growth based “not on any market analysis, but simply on a belief that dramatic growth was necessary regardless of market conditions.” Shipman is currently scheduled to be sentenced Nov. 16, 2011.
Matthew Skaggs, 39, was employed as a regional account manager, reporting directly to a vice president, responsible for Maxim’s offices in Texas. He pleaded guilty on Sept. 23, 2010, to making false statements relating to health care fraud matters. During his plea hearing, Skaggs acknowledged having knowingly made false statements to a surveyor from Texas’ Medicaid Program, who was investigating the operation of an unlicensed Maxim office in Houston. Skaggs was sentenced on June 10, 2011, to a three-year term of probation and ordered to pay a $4,000 fine.
Andrew Sabbaghzadeh, 29, of Clay, N.Y., was employed as an account manager; and Jason Bouche, 27, of Paradise Valley, Ariz., was employed as a recruiter at Maxim’s Tempe, Ariz., office. They pleaded guilty to health care fraud on Nov. 4, 2009, and April 23, 2010, respectively. During their plea hearings, Sabbaghzadeh and Bouche acknowledged creating fraudulent time cards in order to bill government programs. They acknowledged that in some instances, Maxim employees cut signatures from legitimate time cards and pasted them onto forged time cards in order to submit them for reimbursement. Sabbaghzadeh is currently scheduled to be sentenced on Sept. 26, 2011; Bouche is currently scheduled to be sentenced on Nov. 17, 2011.
Donna Ocansey, 49, of Medford, N.J., was employed as a director of clinical services (supervising nurse) in Maxim’s Cherry Hill, N.J., office. She pleaded guilty on May 28, 2010, to making false statements relating to health care fraud matters. Ocansey, a registered nurse, had responsibility for, among other things, ensuring that Medicaid-required supervisory visits of patients were conducted periodically – meaning that a registered nurse periodically visited each patient to check each patient’s condition and the care the patient was receiving from Maxim Home Health Aides, who lack the skills and training of registered nurses. During her plea hearing, Ocansey acknowledged that she fabricated documentation in order to make it appear that other nurses had conducted Medicaid-mandated supervisory visits, when in fact they had not. Ocansey stated that she fabricated documentation in response to pressure from her superiors at Maxim, who expected her to make sure that all supervisory visits were completed without providing adequate resources for her to do so. Ocansey is currently scheduled to be sentenced Sept. 20, 2011.
Mary Shelly Janvier-Pierre, 42, of Lake Worth, Fla., and Sandy Cave, 39, of West Palm Beach, Fla., pleaded guilty to health care fraud on Feb. 1, 2010, and June 21, 2010, respectively. During their plea hearings, Janvier-Pierre, who had been employed by Maxim’s West Palm Beach office as a licensed practical nurse; and Cave, the mother of a former pediatric patient of Maxim, admitted to their roles in a scheme to fraudulently bill Medicaid through Maxim for services that were not rendered. Janvier-Pierre and Cave acknowledged that they agreed to submit billings as if Janvier-Pierre was taking care of Cave’s child, when in reality she was not. Janvier-Pierre and Cave then split the money Janvier-Pierre received for purportedly providing the care. As a result of the scheme, Maxim was paid more than $70,000 by Florida’s Medicaid program. Janvier-Pierre and Cave are scheduled to be sentenced on Sept. 21, 2011, and Oct. 24, 2011, respectively.
Marion Morton, 45, of North Charleston, S.C., was employed as a home health aide and personal care assistant by Maxim’s Charleston office. He pleaded guilty on May 3, 2010, to one count of making false statements relating to health care fraud matters. During his plea hearing, Morton acknowledged that, at the instruction of Maxim employees, he fabricated timecards reflecting work he had not done. On multiple occasions, Maxim submitted bills to Medicaid based on timecards which showed he worked more than 24 hours on certain days. Morton was sentenced on May 24, 2011, to a three-year term of probation and ordered to pay a $5,000 fine.
All of the defendants pleaded guilty before U.S. District Judge Anne E. Thompson in Trenton federal court.
The health care fraud charge to which Shipman, Sabbaghzadeh, Bouche, Janvier-Pierre and Cave pleaded guilty carries a maximum penalty of 10 years in prison and a maximum fine of $250,000, or twice the amount of loss caused by their offenses. The false statements relating to health care fraud matters charge to which defendants Munzel, Skaggs, Ocansey and Morton pleaded guilty carries a maximum penalty of five years in prison and a maximum fine of $250,000, or twice the amount of loss caused by their offenses.
Maxim’s Remedial Actions
The government’s willingness to enter into a DPA with Maxim is due, in significant part, to the company’s cooperation and the reforms and remedial actions the company has taken – beginning particularly in May 2009 – including significant personnel changes: terminating senior executives and other employees the company identified as responsible for the misconduct; establishing and filling of positions of chief executive officer, chief compliance officer, chief operations officer/chief clinical officer, chief quality officer/chief medical officer, chief culture officer, chief financial and strategy officer, and vice president of human resources; and hiring a new general counsel.
The company has identified and disclosed to law enforcement the misconduct of former Maxim employees, including providing information which has been critical in obtaining the convictions of some of the individuals who have pleaded guilty to date. The company has also significantly increased the resources allocated to its compliance program.
The settlement arises from a lawsuit filed under the False Claims Act. Under the qui tam, or whistleblower, provisions of the act, private citizens may file actions on behalf of the United States and share in any recovery. The whistleblower will receive approximately $15.4 million as his share of the recoveries from the federal government and the states.
The criminal complaint, DPA, civil settlement agreement and guilty pleas are the culmination of a multi-year investigation conducted jointly by special agents and investigators from HHS-OIG, under the direction of Special Agent in Charge ODonnell; FBI, under the direction of Special Agent in Charge Ward; and VA OIG, under the direction of Special Agent in Charge Hughes. The National Association of Medicaid Fraud Control Units (NAMFCU) and the Medicaid Fraud Control Units of the New Jersey, Virginia and Massachusetts Attorney General’s Offices also assisted in coordinating the settlements with the various states.
The government is represented in the prosecution of the criminal case by Assistant U.S. Attorney Jacob T. Elberg of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark; and in the civil agreement by Sara McLean of the Department of Justice’s Commercial Litigation Branch, Frauds Section and Assistant U.S. Attorney Alex Kriegsman of the U.S. Attorney’s Office’s Civil Division.
The government’s involvement in this case is part of the United States’ 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 $5.9 billion since January 2009 in cases involving fraud against federal health care programs. The Justice Department’s total recoveries in False Claims Act cases since January 2009 are more than $7.5 billion.