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Tuesday 30 August 2011
Statement of Attorney General Eric Holder on the Resignation of U.S. Attorney for the District of Arizona Dennis BurkeRead the Press Release
WASHINGTON - Attorney General Eric Holder issued the following statement today on the resignation of U.S. Attorney for the District of Arizona Dennis Burke:
“United States Attorney Dennis Burke has demonstrated an unwavering commitment to the Department of Justice and the U.S. Attorney’s office, first as a line prosecutor over a decade ago and more recently as United States Attorney.
“Under his leadership, the office has made great progress in its pursuit of justice with the creation of special units focusing on civil rights enforcement and rule of law, as well as more robust outreach to key communities, particularly in Indian Country. The office’s quick response to the devastating shootings in January that claimed the lives of several people and critically injured Congresswoman Gabrielle Giffords was crucial in arresting and charging the alleged shooter.
“I am grateful to Dennis for his dedication and service to the Department of Justice over these many years and commend his decision to place the interests of the U.S. Attorney’s office above all else.”
Six MS-13 Gang Members in San Francisco Convicted of Racketeering ChargesRead the Press Release
WASHINGTON – After a five-month trial, a federal jury today convicted six members of La Mara Salvatrucha, or MS-13, in federal court in San Francisco of racketeering (RICO) conspiracy and related charges, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney Melinda Haag for the Northern District of California and Director John Morton of U.S. Immigration and Customs Enforcement (ICE). One defendant was acquitted of the charges against him.
The evidence presented during trial showed that the defendants were part of the violent, transnational gang known as MS-13, which claimed part of the Mission District of San Francisco as its territory and operated in the Bay Area since the 1990s. Since its inception, MS-13 members warred with rival gang members and sought to extort payments from other criminals in its territory. However, beginning in 2007, under the leadership of Marvin Carcamo, Angel Noel Guevara, and later, Moris Flores, the violence increased dramatically as the gang sought to expand its reach. The prosecution presented evidence of more than a dozen shootings and stabbings carried out by MS-13 members in the years leading up to the Oct. 22, 2008, arrest of the majority of the gang’s members, including four murders that occurred in 2008. The evidence presented at trial also showed how the defendants, with others, conspired to commit a variety of crimes to further the goals of the gang, including attacking and killing rival gang members and others who defied or challenged MS-13.
“These defendants committed senseless acts of violence and spread fear throughout San Francisco, all in the name of MS-13,” said Assistant Attorney General Breuer. “Above all else, they showed allegiance to their murderous gang. Today’s guilty verdicts, coming after five months of trial, are evidence of our relentless efforts to stop violence in its tracks, and put an end to MS-13’s brutal reign. These convictions, together with prior guilty pleas, have substantially impacted the gang’s ability to operate in San Francisco. We will continue to investigate and prosecute violent street gangs wherever we find them.”
“Today’s verdicts should send a strong message to anyone who thinks gang membership gives them the power to intimidate, threaten, steal or kill,” said U.S. Attorney Haag. “Acts of senseless violence will not be tolerated. You will be caught and you will be prosecuted to the fullest extent of the law.”
“The jury’s verdict sends a resounding message about the shared resolve of law enforcement and the public to protect our communities from the crime and violence perpetrated by transnational gangs such as MS-13,” said ICE Director Morton. “Our goal in these enforcement actions is to disrupt a gang’s illegal activities, dismantle the organization, and stop them from further organized and vicious violence. With this investigation and resulting prosecutions, we’ve crippled this criminal enterprise and defused much of the threat posed by what was once one of the Bay Area’s most dangerous street gangs.”
The defendants convicted today are Marvin Carcamo, 31, aka “Cyco” and “Psycho;” Angel Noel Guevara, 30, aka “Peloncito;” Moris Flores, 22, aka “Slow” and “Slow Pain;” Guillermo Herrera, 22, aka “Sparky” and “Shorty;” Jonathon Cruz-Ramirez, 22, aka “Soldado;” and Erick Lopez, 23, aka “Spooky.” These defendants were among an initial group of 29 individuals charged in an indictment unsealed on Oct. 22, 2008, alleging various racketeering, narcotics and firearms-related offenses.
Among other charges, Lopez was convicted of the racketeering murders of Ernad Joldic and Phillip Ng that occurred in the early morning hours on March 29, 2008. The evidence presented at trial established that Lopez, seeking to retaliate for the shooting of a fellow MS-13 member earlier that night, shot and killed Ng and Joldic, mistakenly believing that the victims were rival Norteno gang members.
Among other charges, Herrera and Cruz-Ramirez were convicted of the July 11, 2008, racketeering murder of Armando Estrada near 20th and Mission Streets. Herrera was identified as the gunman by an eyewitness, who testified that the gunman pulled down the bandana that masked his face and laughed immediately after the shooting. Cruz-Ramirez was also convicted for helping to plan the murder and serving as the getaway driver for Herrera. The evidence showed that Estrada was a “niero,” or someone who sold counterfeit identifications and other items, and that Herrera and Cruz-Ramirez killed Estrada as a result of MS-13’s attempts to extort protection money from “nieros” in the gang’s territory.
Lopez, Herrera and Cruz-Ramirez each face a mandatory minimum of life in prison on the racketeering murder convictions.
Lopez, Herrera and Cruz-Ramirez were also convicted of three racketeering-related conspiracies as well as various firearms offenses, as were the other three convicted defendants – Marvin Carcamo, Moris Flores and Angel Noel Guevara. Each of these three defendants was a leader of MS-13 in San Francisco in 2007 or 2008 and was linked to different murders committed by the gang. Carcamo and Guevara, who led the gang in 2007 until their arrest late that year, were linked to the May 2, 2007, murder of David Pollock in San Francisco, with the murder weapon recovered from Carcamo’s home. Flores, who was leader of MS-13 following the arrests of Carcamo and Guevara, was involved in Lopez’s retaliatory hunt for rival gang murders that led to the murder of Ng and Joldic. In addition, he also helped coordinate Herrera and Cruz-Ramirez’s flight from the scene of Estrada’s murder, as well as the destruction of evidence after that murder. Evidence at trial also showed that Flores ordered younger members to “hunt” for rival gang members on July 31, 2008, which led to the stabbing murder of 14-year old Ivan Miranda.
In addition, Guevara was convicted of three racketeering attempted murders that occurred Dec. 26, 2007, when he and an accomplice attacked three separate individuals with knives during a 30-minute spree of violence that began at 24th and Shotwell Streets and ended at Silver Avenue and Mission Street.
Flores, Guevara and Carcamo each face a maximum penalty of life in prison as well as a mandatory minimum of five years in prison, which would be served consecutively to the prison term on the RICO conspiracy charge. Sentencing for all six defendants is scheduled for Nov. 30, 2011, before U.S. District Judge William Alsup.
The case is being prosecuted by Assistant U.S. Attorneys W.S. Wilson Leung, William Frentzen and Christine Wong of the Organized Crime Strike Force of the U.S. Attorney’s Office for the Northern District of California, and Trial Attorney Theryn G. Gibbons of the Criminal Division’s Organized Crime and Gang Section. The case was investigated by ICE Homeland Security Investigations and the San Francisco Police Department.
Pittsburgh Crips Gang Member Sentenced to 10 Years in PrisonRead the Press Release
WASHINGTON – A Pittsburgh man was sentenced today to 10 years in prison for conspiring to conduct a racketeering enterprise related to his membership in a Pittsburgh Crips gang, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney David J. Hickton of the Western District of Pennsylvania.
Rayshawn Malachi, 26, aka “Melly Mel,” pleaded guilty on April 28, 2011, before Senior U.S. District Judge Gustave Diamond to one count of conspiracy to engage in a racketeering enterprise.
According to the guilty plea, Malachi and others participated in a pattern of racketeering activity that included multiple acts involving robberies at gun point; attempted murders; distribution of controlled substances, including cocaine, heroin and crack cocaine; and obstruction of justice and witness intimidation.
According to court documents, Malachi was a member of the Northview Heights/ Fineview Crips, a criminal street gang that operated in the Northview Heights public housing venue on the North Side of Pittsburgh. The Northview Heights Crips gang was formed around 2001-2002. In 2003, it formed an alliance with the Brighton Place Crips. The alliance expanded the gang’s drug trafficking territory, and increased the number of gang members and associates available to preserve and protect the gang’s power, territory and profits through violence.
The Brighton Place/Northview Heights Crips gang maintains exclusive control over drug trafficking in these neighborhoods through continuous violence and intimidation of rivals and witnesses. Members of the gang support each other through payment of attorneys’ fees and bonds, as well as payments to jail commissary accounts and support payments to incarcerated members’ families.
In addition, gang members have violent confrontations with members of the rival Manchester OGs and other street gangs operating in the Northside area of Pittsburgh. Members and associates obtained greater authority and prestige within the enterprise based on their reputation for violence and their ability to obtain and sell a steady supply of illegal drugs. According to court documents, the Brighton Place/Northview Heights Crips gang members identify themselves by wearing blue, flashing Crips gang hand signals, and using phrases such as “Cuz,” “C-Safe,” “Loc” and “G.K.”
According to court documents, Malachi was considered a “hustler” for the enterprise, which meant he distributed controlled substances, including heroin and crack cocaine.
Malachi is one of 26 defendants charged in February 2010 with being members or associates of the Brighton Place/Northview Heights Crips gang. This prosecution resulted from a Project Safe Neighborhoods Task Force investigation that began in 2005. There are no further pending charges against the 26 individuals originally indicted in the case.
This case is being prosecuted by Assistant U.S. Attorneys Charles A. Eberle and Troy Rive tti of the Western District of Pennsylvania and Trial Attorney Kevin L. Rosenberg of the Criminal Division’s Organized Crime and Gang Section. The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives; the City of Pittsburgh Bureau of Police; the Allegheny County, Penn., Police Department; and the Allegheny County Sheriff’s Office.
Las Vegas Man Pleads Guilty in Connection with Fraud Scheme to Gain Control of Condominium Homeowners’ AssociationsRead the Press Release
WASHINGTON – A Las Vegas man pleaded guilty today for his role in a fraud scheme to gain control of condominium homeowners’ associations (HOA) in the Las Vegas area so that the HOAs could 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 and Sheriff Doug Gillespie of the Las Vegas Metropolitan Police Department.
Steven Wark, 54, pleaded guilty before U.S. District Judge Lloyd D. George in the District of Nevada to one count of conspiracy to commit mail and wire fraud.
According to the plea agreement, Wark admitted that in May 2005 he joined a fraud scheme that had operated from as early as approximately August 2003 through approximately February 2009. Wark admitted that he participated the scheme to control various HOA boards of directors so that the HOA boards could award the handling of construction-related lawsuits and remedial construction contracts to a law firm and construction company designated by Wark’s co-conspirators.
According to court documents, in order to accomplish the scheme, co-conspirators used straw purchasers to purchase mortgage loans for units within HOA communities. Wark admitted that he agreed to become a principal and managing partner of a business entity for the sole purpose of purchasing a condominium unit at the Vistana Condominiums complex in Las Vegas under the business’s name and gain an ownership interest in the Vistana HOA community. Wark admitted that he did not have any real interest in the business entity and his co-conspirators provided the down payment and monthly payments, including HOA dues and mortgage payments, for the condominium and were the true owners of the property.
Wark also admitted that he agreed to run for election to the HOA board at Vistana. Once elected to the Vistana board, Wark breached his statutory fiduciary duty to the homeowners by accepting from his co-conspirators compensation, gratuities and other remuneration that improperly influenced, or reasonably appeared to influence, his decisions, resulting in a conflict of interest. According to plea documents, Wark’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. Wark admitted that after being elected to the Vistana board and accepting payments from his co-conspirators, he subsequently voted in a manner directed by and favorable to his co-conspirators.
Wark admitted that he also acted as the co-conspirators’ campaign consultant to help ensure the co-conspirators were elected to the HOA boards. According to plea documents, another tactic that co-conspirators used to rig certain HOA board elections was to prepare forged ballots for out-of-town homeowners and either cause them to be transported or mailed to California and thereafter to have the ballots mailed back to Las Vegas from various locations around California so as to make it appear that the ballots were completed and mailed by bonafide homeowners residing outside Nevada.
Wark admitted that he was given cash payments and received an interest in the Vistana condominium by or on behalf of his co-conspirators for his assistance in purchasing the property, obtaining HOA membership status and using his position to manipulate the HOA’s business to enrich the co-conspirators at the expense of the HOA and the bona fide homeowners.
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 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 .
Justice Department Settles Fair Housing Lawsuit Against Mississippi NewspaperRead the Press Release
WASHINGTON – A Gulfport, Miss., newspaper has agreed to pay $15,000 to settle a lawsuit filed by the Justice Department alleging that the newspaper published advertisements for housing that discriminated against families with children, the Justice Department announced today.
The Justice Department’s lawsuit was filed in the U.S. District Court for the Southern District of Mississippi in December 2010. The lawsuit alleges, among other things, that Penny Pincher, a weekly want-ad newspaper distributed along Mississippi’s Gulf Coast, engaged in a pattern or practice of violating the Fair Housing Act or denied rights protected by the act by accepting and publishing 10 advertisements for rental housing that stated illegal preferences against families with children.
“Housing discrimination against families with children is a problem that newspapers must not perpetuate by publishing discriminatory advertising,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “Today’s settlement shows our commitment to enforcement of fair housing laws that protect families with children.”
“Protecting families with children from discrimination on the basis of familial status is one of the basic tenets of the Fair Housing Act,” said John Dowdy, U.S. Attorney for the Southern District of Mississippi. “Our office is committed to ensuring that media outlets such as newspapers do not run ads which violate that principle. Aggressive enforcement of the Fair Housing Act to prevent discrimination against families with children remains a priority of my office.”
“Newspaper ads that discriminate against families with children are illegal and unacceptable,” said John Trasviña, Department of Housing and Urban Development (HUD) Assistant Secretary for Fair Housing and Equal Opportunity. “HUD and the Department of Justice will ensure that publications fulfill their obligation under the Fair Housing Act to reject discriminatory advertisements that limit housing opportunities for families with children.”
This lawsuit arose as a result of complaints filed with HUD by a fair housing group and a woman with three children who was searching for housing for her family. The woman’s search led her to Penny Pincher, in which she read an ad offering a house for rent with the proviso, “no children.” She contacted the fair housing group, Gulf Coast Fair Housing Center, which conducted testing of the property advertised and monitored the advertisements published by Penny Pincher. After HUD investigated the complaints, it issued three charges of discrimination, and the matters were referred to the Justice Department.
Under the settlement, which must still be approved by the U.S. District Court, Penny Pincher will pay $10,000 in damages to Gulf Coast Fair Housing Center, $1,500 in damages to the individual affected by the ad and $3,500 in a civil penalty to the United States. The settlement also requires Penny Pincher to adopt a non-discrimination policy, to provide its employees with fair housing training, and to provide periodic reports to the Justice Department. The case continues against other defendants.
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 . Individuals who believe that they 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.
Former Washington, D.C., Tax Return Preparer Pleads Guilty to Preparing False Income Tax ReturnsRead the Press Release
WASHINGTON – Onuoha “Iggy” Nwokoro pleaded guilty in federal district court in Washington, D.C., to willfully aiding and assisting in the preparation of a false income tax return for 2004, the Justice Department and Internal Revenue Service (IRS) announced today.
According to court documents, from January 2005 through April 2007, Nwokoro operated BBC Tax Services, also known as BBC Tax and Medical Billing Services, a tax preparation business in Washington, D.C. For tax years 2004, 2005 and 2006, Nwokoro prepared and electronically filed tax returns for his clients that included fictitious business income and expenses for what purported to be a computer systems business. Nwokoro admitted to preparing at least 41 false returns, causing a tax loss of at least $532,939. According to the plea agreement, Nwokoro also admitted that his own 2004, 2005 and 2006 personal tax returns were false in that they under-reported his income by $585,537.
Judge Richard J. Leon, who is presiding over the matter, set a sentencing date of Nov. 18, 2011 at 10:00 a.m. Nwokoro faces a maximum sentence of three years in prison and a $250,000 fine.
The case was investigated by IRS - Criminal Investigation and is being prosecuted by Tax Division Trial Attorneys Jorge Almonte and Jeffrey B. Bender. The case is CR-11-104.
Additional information about the Justice Department’s Tax Division and its enforcement efforts is available at www.usdoj.gov/tax.
Department of Justice Announces New Acting Director of ATF and Senior Advisor in the Office of Legal PolicyRead the Press Release
WASHINGTON – The Department of Justice today announced the appointments of U.S. Attorney for the District of Minnesota B. Todd Jones to serve as Acting Director of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and ATF Acting Director Kenneth Melson to become Senior Advisor on forensic science in the Office of Legal Policy (OLP).
“As a seasoned prosecutor and former military judge advocate, U.S. Attorney Jones is a demonstrated leader who brings a wealth of experience to this position,” said Attorney General Eric Holder. “I have great confidence that he will be a strong and steady influence guiding ATF in fulfilling its mission of combating violent crime by enforcing federal criminal laws and regulations in the firearms and explosives industries.”
Jones will continue to serve in the capacity of U.S. Attorney when he assumes the role of ATF acting director on Aug. 31, 2011.
A veteran of the Justice Department, Jones has served as U.S. Attorney for the District of Minnesota under two presidential administrations. He first served from 1998 to 2001. He was nominated again in 2009 by President Obama and has been in that role since being confirmed that year.
In 2009, the Attorney General appointed him to serve as chair of the Attorney General Advisory Committee (AGAC), a group of U.S. Attorneys appointed to advise the Attorney General on policy, management and operational issues affecting U.S. Attorneys’ Offices throughout the country. Jones previously served as a member, vice chair and chair of the AGAC from 1999 to 2001.
During his several years as a federal prosecutor, Jones conducted grand jury investigations and has been the lead trial lawyer in many federal prosecutions involving drug trafficking, firearms, financial fraud and violent crime.
Throughout his career, Jones has served as a partner with Robins, Kaplan, Miller & Ciresi (2001-2009); a partner with Greene Espel, PLLP (2001; 1994-1997); First Assistant U.S. Attorney for the District of Minnesota (1997-1998); and Assistant U.S. Attorney (1992-1994).
Following admission to the Minnesota bar, Jones went on active duty in the U.S. Marine Corps, where he served as both a trial defense counsel and prosecutor in a number of courts martial proceedings.
Jones received his B.A. from Macalester College in 1979 and his J.D. from the University of Minnesota Law School in 1983.
Melson will join OLP on Aug. 31, 2011, in his new role as senior advisor where he will focus on issues relating to policy development in forensic science.
“Ken brings decades of experience at the department and extensive knowledge in forensic science to his new role and I know he will be a valuable contributor on these issues,” said Attorney General Holder. “As he moves into this new role, I want to thank Ken for his dedication to the department over the last three decades.”
He is a past president and distinguished fellow of the American Academy of Forensic Sciences, and currently participates on behalf of the department on the American Society of Crime Laboratory Directors/Laboratory Accreditation Board. He has been an adjunct professor at George Washington University for almost 30 years teaching both law and forensic science courses.
Melson was appointed acting director of ATF in 2009. Prior to that, he was director of the Executive Office for U.S. Attorneys and served several years in the U.S. Attorney’s Office for the Eastern District of Virginia.
Melson received his B.A. from Denison University in 1970 and his J.D. from George Washington University in 1973.
California Aftermarket Auto Lights Distributor Agrees to Plead Guilty in Price-Fixing ConspiracyRead the Press Release
WASHINGTON – A California aftermarket auto lights distributor has agreed to plead guilty today for its participation 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, Sabry Lee (U.S.A.) Inc. conspired with others to suppress and eliminate competition by fixing the prices of aftermarket auto lights. The department said that Sabry Lee, a U.S. distributor for a Taiwan producer of aftermarket auto lights, participated in the conspiracy from about September 2003 until about September 2005. Under Sabry Lee’s plea agreement, which is subject to court approval, the company has agreed to pay a $200,000 criminal fine and to assist the department in its ongoing investigation into the aftermarket auto lights industry.
According to the charge, Sabry Lee 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.
Sabry Lee is the first corporation to be charged in connection with the department’s ongoing investigation into the aftermarket auto lights industry. Three individuals have also been charged. Polo Shu-Sheng Hsu, the former president and chief executive officer of a U.S. distributor of aftermarket auto lights, 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.
Sabry Lee 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.
Monday 29 August 2011
Special Master Sheila L. Birnbaum Announces Final Rule to Govern 9/11 Victim Compensation FundRead the Press Release
NEW YORK – With the 10-year anniversary of Sept. 11, 2001, approaching, September 11th Victim Compensation Fund (VCF) Special Master Sheila L. Birnbaum today announced the final rule governing the fund. Since issuing the proposed regulations in June 2011, Special Master Birnbaum has reviewed formal comments and met with, and received feedback from, hundreds of New York-area residents, workers and first responders at town hall meetings held in New York and New Jersey.
The rule is expected to be published in the Federal Register later this week, and it will go into effect when the VCF opens its doors on Monday, Oct. 3, 2011. Comprehensive information about filing claims will be available at that time.
“ As I stated when I was first appointed to this position by the Attorney General, my goal is for the Victim Compensation Fund to be fair, transparent, and easy to navigate for those who have been affected the most by the devastating events of September 11th,” said Special Master Birnbaum. “I have benefited ‒ and the fund has been made stronger ‒ from the constructive suggestions and insights of the hundreds of area residents, workers and first responders I have spoken with during this process.”
Based on a review of the comments, as well as available scientific and medical evidence, Special Master Birnbaum announced a number of changes to the regulations for the final rule, including the expansion of the geographic zone recognized as a 9/11 crash site to include the area south of Canal Street. As a result, the initial zone of coverage will include the World Trade Center (WTC), Pentagon and Shanksville, Pa., sites; the buildings that were destroyed; the area south of Canal Street in lower Manhattan; and the routes of debris removal.
The rule also clarifies the types of fees and charges that would come within the caps on amounts that a claimant’s representative may charge in connection with a claim made to the fund.
With respect to the list of physical injuries and conditions governing eligibility for awards, Special Master Birnbaum reiterated her commitment to follow available scientific and medical evidence. In an email to potential VCF claimants and interested parties, Special Master Birnbaum wrote: “After considering all of the comments and the available scientific and medical evidence, I have decided that it is important, and consistent with the intentions of Congress, that I continue to rely on the medical judgment made by the WTC Health Program.”
Birnbaum was appointed as special master by Attorney General Eric Holder on May 18, 2011, and has spent the months since her appointment meeting with the men and women who will be most affected by the VCF.
The James Zadroga 9/11 Health & Compensation Act reactivated the September 11th Victim Compensation Fund that operated from 2001-2003. The act expands the pool of claimants to include first responders and other individuals who experienced latent physical injuries associated with the attacks or with debris removal.
Individuals who wish to either read the final rule in its entirety or receive communications regarding the VCF should visit: www.justice.gov/vcf .
Ohio Homebuilder Sentenced to 22 Years in Prison for Tax Fraud, Bank Fraud, Money Laundering and Obstruction of Justice SchemesRead the Press Release
WASHINGTON - Thomas E. Parenteau of Hilliard, Ohio, was sentenced today to 22 years in prison for conspiring with his wife, his mistress and their accountant, to commit tax fraud and money laundering, the Justice Department and Internal Revenue Service (IRS) announced. Parenteau was also sentenced for conspiring to obstruct justice and tamper with witnesses.
In addition to the prison term, U.S. District Court Judge Michael H. Watson ordered that Parenteau serve five years of supervised release and pay $1,100 in special assessments. Judge Watson also ordered Parenteau to pay restitution to the IRS and to the defrauded banks and that the amount would be determined in the next 90 days. The court further ordered Parenteau to forfeit to the United States an amount of nearly $15 million, consisting of his father’s life insurance policies and two money judgments.
According to court testimony and documents presented during the eight-week trial in the Southern District of Ohio, Parenteau and his co-conspirators defrauded the IRS out of nearly $1 million and defrauded banks into lending more than $40 million to Parenteau, his nominees and others. The evidence proved that Parenteau, who operated and controlled a number of Columbus, Ohio-area businesses, and Dennis G. Sartain, Parenteau’s accountant, prepared and filed with the IRS four false income tax returns for Parenteau’s mistress, Pamela McCarty, who is the mother of his two children. The false returns generated more than $850,000 in fraudulent refunds that she ultimately gave to Parenteau.
In addition, Parenteau, his wife Marsha Parenteau, Sartain and McCarty engaged in a scheme designed to defraud banks out of millions of dollars by falsely inflating the purchase prices of the homes that Parenteau built and sold. Parenteau paid large concealed or disguised kickbacks to the buyers after their purchases. The Parenteaus, along with McCarty, also fraudulently obtained $18 million in loans against a 27,000-square-foot home, by falsely representing their income and submitting other false documents regarding the renovation to the home. Parenteau used these funds to make more than $6 million in premium payments on four life insurance policies worth $23 million on the life of Thomas Parenteau’s father, who passed away on April 4, 2009.
Finally, after learning of the IRS investigation into the tax, bank fraud and money laundering schemes, Parenteau, McCarty, Sartain and others engaged in a scheme to obstruct justice by concealing computers, creating false documents, destroying or altering evidence, tampering with a witness, lying to federal and local investigators, and otherwise obstructing justice.
“Mr. Parenteau’s sentence, and those of his co-conspirators, serve as a reminder to the public that those who illegally seek to avoid their duties and responsibilities as taxpayers will face severe consequences,” John A. DiCicco, Principal Deputy Assistant Attorney General for the Justice Department’s Tax Division said. “The Justice Department and the IRS will continue to investigate and aggressively prosecute tax cheats.”
“Schemes like this one can undermine our financial institutions, siphon taxpayer dollars and weaken our housing markets,” Acting U.S. Attorney for the Southern District of Ohio Mark T. D’Alessandro said. “The agents and prosecutors should be commended for their thorough investigation involving tens of thousands of documents and for following the paper trails that led to the unraveling of the fraud.”
“Today’s sentence marks the successful end of an investigation that uncovered a complicated fraudulent scheme that generated millions of dollars through a tangled financial web of lies,” said Tracey E. Warren, Acting Special Agent in Charge, IRS-Criminal Investigation, Cincinnati Field Office. “Investigating the financial aspects of the violations, hits criminals where it hurts the most - it deprives them of their profits and ultimately puts them out of business. Today's sentence is a direct result of the excellent partnership IRS, the Department of Justice Tax Division and the U.S. Attorney’s office has in combating violations of Federal law.”
Earlier this year, Sartain was sentenced to 131 months in prison for his conduct; Marsha Parenteau was sentenced to 33 months in prison; and McCarty was sentenced to up to 24 months in prison. The investigation led to the convictions of as many as 12 people in total.
Principal Deputy Assistant Attorney General DiCicco and Acting U.S. Attorney D’Alessandro commended the investigative efforts of the IRS agents involved in this case, as well as Tax Division Trial Attorneys Richard M. Rolwing and Sean O’Connell, who prosecuted the case. In addition, Principal Deputy Assistant Attorney General DiCicco thanked the U.S. Attorney’s Office’s Forfeiture Paralegal Michele Gwinn and the department’s Asset Forfeiture and Money Laundering Section Legal Advisor Steve Schlesinger and Senior Trial Attorney Jean Weld for providing assistance on the forfeiture claims.
More information about the Tax Division and its enforcement efforts can be found at www.justice.gov/tax .
Nebraska Man Arrested on Wire Fraud and Obstruction of Justice ChargesRead the Press Release
WASHINGTON – An Omaha, Neb., man was charged in an indictment unsealed today for allegedly trying to solicit corrupt payments from an individual in return for a promised reduction in the individual’s ultimate prison sentence, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division.
Austin Galvan, 29, was charged in a two-count indictment unsealed today in the District of Nebraska with one count of wire fraud and one count of obstruction of justice. He was arrested on Aug. 26, 2011, by FBI agents and made his initial appearance today before U.S. Magistrate Judge Thomas Thalken in federal court in Omaha.
According to the indictment, Galvan told an associate who was facing federal criminal charges in the District of Nebraska that he, Galvan, had a law enforcement contact in Nebraska who could secure a substantial reduction in his associate’s prison sentence in exchange for corrupt payments. Galvan, in fact, had no such contact.
According to the indictment, in conversations with his associate in May and June 2010, Galvan urged him not to cooperate with federal authorities. Galvan allegedly assured his associate that his contact was in a position to help secure a reduction in the associate’s prison sentence, provided that corrupt payments were made. Galvan also gave his associate what he claimed were official documents given to him by his purported law enforcement contact. According to the indictment, Galvan provided his associate with an audio recording of a court hearing that he claimed his purported law enforcement contact had given him. In fact, Galvan had downloaded the recording from the Public Access to Court Electronic Records system, or PACER. The indictment also alleges that Galvan provided his associate with what he claimed was the business card of a federal judge who would assist in securing the sentence reduction, when in fact no federal judge was involved.
Galvan’s associate was sentenced in March 2011 to 10 years in prison after pleading guilty to conspiracy to distribute methamphetamine and to being a felon in possession of a firearm.
An indictment is merely an allegation, and a defendant is presumed innocent unless proven guilty beyond a reasonable doubt in a court of law.
If convicted, Galvan faces up to 20 years in prison on the wire fraud charge and up to 10 years in prison on the obstruction charge. He also faces maximum fines of $250,000 for each count.
The case is being prosecuted by Trial Attorneys Kevin Driscoll, Barak Cohen and Brian Lichter of the Criminal Division’s Public Integrity Section. The case is being investigated by the FBI.
Justice Department Settles Lawsuit with the Puerto Rico Department of Justice Regarding Employment Rights Under the ADARead the Press Release
WASHINGTON – The Justice Department today settled a lawsuit with the Puerto Rico Department of Justice (PRDOJ) to protect the rights of employees with disabilities under the Americans with Disabilities Act (ADA). The settlement resolves a complaint that the PRDOJ discriminated against an employee with a disability by failing to provide her with a reasonable accommodation, as required by the ADA.
The complaint alleged that the PRDOJ relocated an employee who uses a wheelchair to an office building that the PRDOJ knew did not provide the employee with accessible bathrooms or accessible parking. As a result, the employee was forced to seek help from others to park and enter her place of work, and she resorted to intentionally dehydrating herself at work because she could not access the office bathrooms, according to the complaint.
“The Americans with Disabilities Act protects the right of every American to work without facing these types of indignities and hurdles,” said Thomas Perez, Assistant Attorney General for the Civil Rights Division. “This settlement reinforces the Civil Rights Division’s commitment to ensuring the promise of equal employment opportunity for all individuals with disabilities.”
The settlement agreement, which must be approved by the district court in San Juan, requires the PRDOJ to pay $45,000 to the aggrieved employee; to provide training to employees on the requirements of the ADA; and to adopt policies to ensure that the PRDOJ does not require employees with disabilities to attend meetings at, or to be relocated to, an inaccessible office location.
Title I of the ADA prohibits employers, such as the PRDOJ, from discriminating against a qualified individual on the basis of disability in regard to job application procedures; hiring, advancement, or discharge; employee compensation; job training; and other terms, conditions, and privileges of employment. In addition, a n employer is required to make a reasonable accommodation to the known disability of an employee if it would not impose an “undue hardship” on the operation of the employer’s business. Reasonable accommodations are adjustments or modifications provided by an employer to enable people with disabilities to enjoy equal employment opportunities.
Those interested in finding out more about federal disability rights statutes can call the Justice Department’s toll-free ADA Information Line at 800-514-0301 or 800-514-0383 (TDD), or access the ADA website at www.ada.gov .
Justice Department Requires Divestiture in Order for General Electric Company to Proceed with its Acquisition of Converteam Group SASRead the Press Release
WASHINGTON — The Department of Justice announced today that it has reached a settlement that will require General Electric Company (GE) to divest Converteam Group SAS’s Electric Machinery Holding Company in order to proceed with its acquisition of Converteam. The department said that the transaction, as originally proposed, would substantially lessen competition in the development, manufacture and sale of low-speed synchronous electric motors (LSSMs) used in the North American oil and gas industry, resulting in higher prices, less favorable terms of sale and decreased quality of service. LSSMs drive the low-speed reciprocating compressors that oil refineries use for hydrogen compression to support various refinery operations.
The Department of Justice’s Antitrust Division filed a civil antitrust lawsuit today in U.S. District Court in Washington, D.C., to block the proposed transaction. At the same time, the department filed a proposed settlement that, if approved by the court, would resolve the competitive concerns alleged in the lawsuit.
“The divestiture will preserve the benefits of competition for refinery customers in the United States,” said Sharis A. Pozen, Acting Assistant Attorney General in charge of the Justice Department’s Antitrust Division. “As originally proposed, the acquisition would have lessened the competition that currently exists among manufacturers of low-speed synchronous electric motors.”
According to the complaint, the acquisition would remove a significant competitor in the development, manufacture and sale of LSSMs to oil refinery customers in North America. GE and Converteam have consistently bid against each other on LSSM projects since 2007, benefiting customers. The department said that the proposed acquisition would eliminate many customers’ preferred alternative to GE and reduce from three to two – or for some bids, from two to one – the number of suppliers of LSSMs in North America.
The proposed settlement requires GE to divest Converteam’s Electric Machinery Holding Company, which includes its Minneapolis manufacturing facility that produces all of its LSSMs, as well as all of the tangible and intangible assets associated with the business. The department said that the divestiture will eliminate the anticompetitive effects of the acquisition in the North American market for LSSMs by establishing a new, independent and economically viable competitor.
GE is a New York corporation with its headquarters in Fairfield, Conn. GE’s subsidiary, GE Energy manufactures a full range of electric motors, including LSSMs. GE’s facility in Peterborough, Canada, manufactures LSSMs sold in North America. In 2010, GE’s worldwide revenues were $150 billion and revenues from its Peterborough large motor and generator facility were $139.1 million.
Converteam is headquartered in Massy Cedex, France. Converteam manufactures and assembles medium-voltage large electric motors in facilities located in France, the United Kingdom and the United States. In 2010, Converteam’s worldwide revenues were $1.5 billion and revenues from its Minneapolis facility were $47.7 million.
As required by the Tunney Act, the proposed settlement, along with a competitive impact statement, will be published in the Federal Register. Any person may submit written comments concerning the proposed settlement during a 60-day comment period to Maribeth Petrizzi, Chief, Litigation II Section, Antitrust Division, U.S. Department of Justice, 450 Fifth Street, N.W., Suite 8700, Washington, D.C. 20530. At the conclusion of the 60-day comment period, the U.S. District Court for the District of Columbia may approve the proposed settlement upon finding it is in the public interest.
Justice Department Releases Findings of Unconstittuional Conditions at Miami-Dade Jail FacilitiesRead the Press Release
WASHINGTON – Following a comprehensive investigation, the Justice Department has announced its findings that the Miami-Dade County Corrections and Rehabilitation Department (MDCR) has engaged in a pattern or practice of constitutional violations in the jail facilities operated by MDCR. MDCR operates the nation’s eighth largest jail system and holds an average of 7,000 prisoners.
The investigation, initiated on April 2, 2008, was conducted in accordance with the Civil Rights of Institutionalized Persons Act (CRIPA). CRIPA authorizes the Justice Department to seek a remedy for a pattern or practice of conduct that violates the constitutional rights of prisoners in adult detention and corrections facilities. The extensive investigation focused on the protection of prisoners from harm in all six jail facilities operated by MDCR.
The Justice Department concluded that MDCR corrections facilities violate the constitutional rights of prisoners through:
- Inadequate medical care;
- Inadequate mental health care, including improper suicide prevention;
- Use of excessive force by MDCR staff on prisoners;
- Inadequate protection from prisoner violence; and
- Environmental health and sanitation deficiencies at several of the MDCR facilities.
“Our findings show that due to the unconstitutional operation of the MDCR jail facilities, prisoners have suffered grievous harm, including death. The systemic failures of the jail facilities have resulted in prisoners living in inhumane and shocking conditions,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The Justice Department is committed to remedying these deficiencies, and we look forward to working with MDCR to develop and implement comprehensive reforms.”
The comprehensive 40-page findings letter illustrates how unconstitutional conditions at the jail have resulted in serious harm to prisoners, including death. There have been at least eight prisoner suicides since 2007, one as recently as March 2011. Thousands of other prisoners have suffered, and are suffering, harm from constitutionally inadequate mental health care.
Since 2008, at least another five prisoners have died from MDCR’s failure to identify and treat prisoners withdrawing from drugs or alcohol. The Justice Department also found that MDCR fails to provide adequate intake screening, initial health assessments and acute care for newly incarcerated prisoners. In addition, MDCR neither monitors nor adequately treats prisoners with chronic illness. MDCR also has failed to provide medications to prisoners with HIV, medically necessary tests to prisoners with diabetes and hypertension, and seizure medications to prisoners with histories of seizures.
The department’s investigation also revealed that MDCR corrections officers openly engage in abusive and retaliatory conduct, frequently resulting in injuries to prisoners. In particular, there is a disturbing and distinct trend of MDCR corrections officers reacting to low-level aggression from prisoners (e.g., abusive language or passive resistance to an order) by slapping or punching the prisoner in the head and verbally provoking the prisoner to physically respond.
Inadequate supervision places staff, as well as prisoners, at risk. MDCR lacks meaningful supervision in housing units, leading to dangerous and violent conditions. In fact, in the six month period just prior to the initial Justice Department on-site investigation, MDCR reported more than 300 incidents of prisoner-on-prisoner assaults in one of its six facilities, nearly 250 such incidents in another facility, and approximately 125 such instances in yet another facility.
This investigation was conducted by the Special Litigation Section of the Civil Rights Division with the assistance of the U.S. Attorney’s Office for the Southern District of Florida. In addition, the team consulted with experts in the fields of corrections, custodial medical and mental health care, suicide prevention, and environmental health and sanitation.
Additional information about the Special Litigation Section of the Justice Department’s Civil Rights Division can be found at www.usdoj.gov/crt/split/index.html .
Justice Department Obtains $70,000 Settlement in Housing Discrimination Lawsuit Against New Orleans LandlordsRead the Press Release
WASHINGTON – The Justice Department announced today that New Orleans landlords Betty Bouchon, the Bouchon Limited Family Partnership and Sapphire Corp., have agreed to pay $70,000 in damages and civil penalties to settle a lawsuit alleging they unlawfully denied housing to African-American prospective renters at a 16-unit apartment building located in New Orleans. The settlement must still be approved by the U.S. District Court for the Eastern District of Louisiana.
“In these challenging economic times, it is more important than ever that all Americans be able to rent or buy housing they can afford, and not face discrimination because of the color of their skin,” said Thomas E. Perez, Assistant Attorney General for Civil Rights. “This settlement demonstrates the Department’s commitment to ensuring equal housing opportunity for persons in the city of New Orleans and throughout the United States.”
“The right of all of our citizens to enjoy fair and equal access to housing opportunities is guaranteed by our laws,” said U.S. Attorney for the Eastern District of Louisiana Jim Letten. “The U.S. Department of Justice is committed to fiercely protecting those rights in order to insure the quality of life all Americans deserve. I am once again grateful to Assistant Attorney General Tom Perez and the Civil Rights Division for their partnership in this and other critical endeavors in defending these precious civil rights.”
The settlement would resolve a lawsuit filed today by the department alleging that the defendants discriminated against African-Americans seeking housing at the apartment building in violation of the federal Fair Housing Act. The allegations are based on fair-housing testing conducted by the Greater New Orleans Fair Housing Action Center (GNOFHAC). The lawsuit alleges that the building manager, Betty Bouchon, failed to return phone calls from African-American testers while returning phone calls from white testers, made statements to white testers indicating that she would not rent to African-Americans, and falsely told an African-American tester than an apartment was not available for rent when in fact it was available.
Under the terms of the settlement, the defendants will pay $50,000 to GNOFHAC and a total of $20,000 in civil penalties to the United States. The settlement also requires the defendants to adopt non-discriminatory policies and procedures, keep detailed records of inquiries from prospective tenants and of rental transactions, and submit periodic reports over the four year term of the settlement. GNOFHAC filed a separate lawsuit, which is pending in the U.S. District Court for the Eastern District of Louisiana.
Fighting illegal housing discrimination is a top priority of the Justice Department. 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 should call the Housing Discrimination Tip Line at 1-800-896-7743, mailbox number 9998 or e-mail the Justice Department at [email protected]. Individuals who believe they may have been victims of housing discrimination may also contact HUD at 1-800-669-9777. Further information about the Fair Housing Act is available at www.usdoj.gov/fairhousing or at www.hud.gov.
Friday 26 August 2011
Solicitor General Donald B. Verrilli Appoints Sri Srinivasan as Principal Deputy Solicitor GeneralRead the Press Release
WASHINGTON – Solicitor General Donald B. Verrilli today announced the appointment Sri Srinivasan as Principal Deputy Solicitor General. The principal deputy handles some of the United States’ most important cases before the Supreme Court and serves as a key advisor to the Solicitor General.
“I am very pleased Sri will be returning to the Solicitor General’s office in this important role. He is one of the country’s leading advocates before the Supreme Court, and will bring to his new position both a deep knowledge of the Supreme Court and of the office and its responsibilities and traditions,” said Solicitor General Donald B. Verrilli Jr. “He will be an invaluable asset to the Department of Justice and to the work we do to protect and defend the interests of the American people.”
Since 2007, Srinivasan has been a partner in O’Melveny and Myers LLP in Washington, D.C., and chairs the firm’s appellate and Supreme Court practice. At O’Melveny and Myers, Srinivasan argued multiple cases before the U.S. Supreme Court spanning multiple topics including criminal law and procedure, immigration law, banking law, education law, administrative law and federal contracting law. In addition, Srinivasan also possesses a wealth of experience on the federal and state court levels addressing patent and intellectual property law, antitrust law, federal preemption and tax law.
From 2002 to 2007, Srinivasan served as assistant to the U.S. Solicitor General at the U.S. Department of Justice in Washington, D.C. From 1998 to 2002, he worked at O’Melveny and Myers. Prior to that, Srinivasan served as a U.S. Supreme Court law clerk for the Honorable Sandra Day O’Connor and for the Honorable J. Harvie Wilkinson III of the U.S. Court of Appeals for the Fourth Circuit.
Srinivasan is a lecturer at Harvard Law School, where he co-teaches a course on Supreme Court and appellate advocacy. He is a published author and has received many awards and recognitions including being named The National Law Journal’s 50 Most Influential Minority Lawyers in America in 2008.
Srinivasan earned his J.D. from Stanford Law School, his M.B.A. from Stanford Business School and his A.B. from Stanford University.
Leader of International Conspiracy Convicted of Defrauding the Military and Smuggling GoldRead the Press Release
WASHINGTON – Roger Charles Day Jr. was found guilty late yesterday of leading an international conspiracy to sell more than $4.4 million in nonconforming and defective parts to the Department of Defense (DOD).
The guilty verdict was announced today by U.S. Attorney Neil H. MacBride of the Eastern District of Virginia; Assistant Attorney General Lanny A. Breuer of the Criminal Division; Special Agent in Charge Robert E. Craig of the Defense Criminal Investigative Service (DCIS) Mid-Atlantic Field Office; and Special Agent in Charge Edward T. Bradley of the DCIS Northeast Field Office.
After a nine-day trial, Day, 47, formerly of Long Valley, N.J., was found guilty by the jury on all counts. Day was charged in July 2008 with conspiracy to commit wire fraud, wire fraud, conspiracy to engage in international money laundering, and conspiracy to smuggle gold out of the United States. Day was extradited from Mexico in December 2010. Day’s sentencing is scheduled for Dec. 15, 2011.
“The evidence showed that Mr. Day, a serial criminal, used other people like commodities to aid and assist his criminal enterprise,” said U.S. Attorney MacBride. “He sent the military bogus parts to critical application items, which were essential to ensuring the performance of our warfighters and the safety of our military personnel. The verdict shows that criminals such as Mr. Day will be brought to justice even when they orchestrate complex crimes.”
“Mr. Day masterminded a sophisticated and dangerous conspiracy to profit from the sale of defective parts to the U.S. military,” said Assistant Attorney General Breuer. “He foolishly put our nation’s security at risk for the sake of personal riches. Yesterday, a Richmond jury convicted Day for his cowardly crimes, and now he faces the prospect of significant prison time.”
“Over the past two decades, Roger Day has perpetrated a number of schemes in attempts to defraud the Department of Defense,” said DCIS Special Agents in Charge Craig and Bradley in a joint statement. “Yesterday’s guilty verdict on all counts brings justice to bear on his criminal activity once again. It is regrettable that even at a time when this country continues to fight terrorism in a hostile environment overseas, individuals such as Day are willing to attempt to enrich themselves through corrupt activity, at the expense of our brave men and women in the Armed Forces. The Defense Criminal Investigative Service stands committed to aggressively investigate these crimes and to support their prosecution to the fullest.”
According to the evidence at trial and court documents, over a four-year period Day led a conspiracy to bid on and win contracts to provide parts to the U.S. military through the Defense Logistics Agency (DLA), including through the DLA’s Defense Supply Center in Richmond, Va. The parts included “critical application items,” which are essential to weapons system performance or operation or to the preservation of life or safety of operation personnel. Under DOD’s procurement procedures, contractors were permitted to submit electronic invoices upon shipment of the needed parts, and were paid electronically by the Defense Finance and Accounting Service.
In the course of the scheme, Day and other conspirators, operating in the United States, Canada, Mexico and Belize, formed at least 18 separate companies that posed as legitimate contractors and collectively used a computer program to win nearly 1,000 lucrative contract awards for the various companies. Day and his conspirators then shipped defective parts to the DOD on more than 300 of those contracts, receiving more than $4.4 million in payment on parts that Day purchased for less than $200,000. In all known cases, the parts sent by Day and his conspirators could not be used for their intended purpose.
Day and his co-conspirators compounded the fraud by concealing their identities through the use of multiple nominee companies and by assuming others’ identities to operate the companies. When DOD requested proof that the companies had purchased and intended to supply the correct parts from approved manufacturers, Day and others submitted fabricated documents that falsely represented that the correct parts had been purchased. When DOD debarred several of the companies from doing further business with the military, Day directed his conspirators to discontinue bidding through those companies and instead formed and used new companies.
According to evidence presented at trial, to conceal the proceeds of the scheme and to prevent recovery, Day directed his conspirators to transfer the scheme’s proceeds to offshore bank accounts and ultimately to purchase more than 3,500 ounces (more than $2.2 million) in gold bars and coins. Day further directed his conspirators to bring the gold bars and coins to his residence in Lo De Marcos, Mexico. On one occasion he directed them to hide the gold bars in the modified bumper of a 1979 Toyota LandCruiser and on another occasion in the rear hatch door panel of a 1971 Austrian Pinzgauer military transport vehicle.
At sentencing, Day faces a maximum of 20 years in prison for each count of conspiracy to commit wire fraud and each count of wire fraud, 10 years in prison for each count of conspiracy to engage in international money laundering, and five years in prison for each count of conspiracy to smuggle gold out of the United States.
Prior to Day’s trial, five defendants in this conspiracy pleaded guilty. Nathan Francis Victor Carroll was sentenced on Nov. 8, 2007, to 94 months in prison and was ordered to pay nearly $3.7 million in restitution. Gregory Allen Stewart was sentenced on April 29, 2008, to 75 months in prison and was ordered to pay nearly $3.7 million in restitution. Susan Crotty Neufeld was sentenced on May 14, 2008, to five years of probation and ordered to pay $47,600 in restitution for the gold coins she received. Juerg Mehr was sentenced to five years of probation on March 27, 2009. Glenn Teal was sentenced on Sept. 22, 2009, to 90 days in prison.
This case was investigated by DCIS, with assistance from the Defense Contract Audit Agency. Assistant U.S. Attorneys John S. Davis and Elizabeth C. Wu of the Eastern District of Virginia and Special Assistant U.S. Attorney and Trial Attorney Ryan S. Faulconer of the Criminal Division’s Fraud Section prosecuted the case. The Criminal Division’s Office of International Affairs provided assistance.
Justice Department Settles Allegations of Immigration-Related Employment Discrimination Against Kinro Manufacturing Inc.Read the Press Release
WASHINGTON – The Justice Department today reached a settlement agreement with Kinro Manufacturing Inc. in Goshen, Ind., resolving allegations that the company engaged in a pattern or practice of discrimination against work-authorized non-citizens in the employment eligibility verification process. The company, a manufacturer of components for recreational vehicles and manufactured homes, is a subsidiary of Kinro Inc., which is wholly owned by White Plains, N.Y.-based Drew Industries Inc.
According to the department’s findings, the company subjected newly hired non-U.S. citizens to excessive demands for documents issued by the Department of Homeland Security in order to verify their employment eligibility, but did not require U.S. citizens to show any specific documentation . The charging party, a lawful permanent resident, filed his charge of discrimination after he was required to provide additional proof of his employment eligibility not required by law before he could begin work at the company. The Immigration and Nationality Act’s (INA) anti-discrimination provision prohibits employers from placing additional documentary burdens on work-authorized employees during the hiring and employment eligibility verification process based on their citizenship status or national origin.
Under the terms of the settlement agreement, Kinro Manufacturing will alter its practices to ensure that citizens and non-citizens are treated equally in the employment eligibility verification process, pay a $25,000 civil penalty and $10,000 in back pay to the injured party. Kinro Manufacturing has also agreed to train its human resources personnel about employers’ responsibilities to avoid discrimination in the employment eligibility verification process, to produce Forms I-9 for inspection and to provide periodic reports to the department for one year.
“Federal law protects people who are authorized to work in the United States from facing barriers and discrimination when they are seeking employment,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “We are pleased to have reached a settlement in this matter, and we look forward to partnering with other employers to ensure they are in compliance with their obligations under federal law.”
The Civil Rights Division’s Office of Special Counsel for Immigration-Related Unfair Employment Practices (OSC) is responsible for enforcing the anti-discrimination provision of the INA, which protects work authorized individuals against discrimination in hiring, firing and recruitment or referral for a fee on the basis of citizenship status and national origin. The INA also protects all work-authorized individuals from discrimination in the employment eligibility verification process and from retaliation.
The United States was represented in this matter by Ronald Lee, OSC Trial Attorney, and German Bonilla, OSC Equal Opportunity Specialist.
For more information about protections against employment discrimination under federal immigration law, call OSC’s worker hotline at 1-800-255-7688 (1-800-237-2515, TDD for hearing impaired), OSC’s employer hotline at 1-800-255-8155 (1-800-237-2515, TDD for hearing impaired), or 202-616-5594; e-mail [email protected]; or visit OSC’s website at www.justice.gov/crt/about/osc.
Justice Department Files Lawsuit Alleging Religious Discrimination by City of Lilburn, Georgia, Against Muslim GroupRead the Press Release
WASHINGTON – The Justice Department filed a complaint today against the city of Lilburn, Ga., alleging that the city violated the Religious Land Use and Institutionalized Persons Act of 2000 (RLUIPA) when it rejected the Dar-E-Abbas Shia Islamic Center’s requests for rezoning to construct a mosque. Both parties have agreed to a consent decree that will be filed on Aug. 29, 2011.
The city twice rejected the Islamic Center’s applications to rezone property it owned to build a mosque in November 2009 and December 2010. The government’s lawsuit alleges that the city’s denials of the rezoning applications were based on the religious bias of city officials and to appease members of the public who opposed the construction of a mosque because of religious bias. The complaint further alleges that the city treated the Islamic Center differently than it treated non-Muslim religious groups that regularly have been granted similar rezoning requests.
The department notified the city of its intention to file a lawsuit for violations of RLUIPA in June 2011, and the city and the United States have been engaged in pre-suit negotiations to settle the lawsuit since that time. On Aug. 16, 2011, the city approved rezoning for the Islamic Center that was substantially similar to the rezoning request the Islamic Center made in 2010.
“Religious freedom is among our most fundamental rights. Under federal law, cities may not use their zoning laws to discriminate against religious groups seeking to build places of worship,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The department acknowledges and commends the city’s decision to ultimately approve the rezoning, and it is pleased that the city has agreed to enter into a decree with the United States that helps ensure that freedom of religion in the United States is a reality for persons of all faiths.”
U.S. Attorney for the Northern District of Georgia Sally Quillian Yates said, “Religious freedom requires that local government decisions impacting the exercise of that freedom be free of discrimination. The city of Lilburn twice failed to approve rezoning permits to allow building a mosque, and the complaint alleges that the rejection was because the applicants are Muslims. We are pleased that the city is settling the lawsuit and that the rezoning issue is being resolved.”
Under the agreement, the city may not impose different zoning or building requirements on the Islamic Center or other religious groups, and will publicize its non-discrimination policies and practices. The city also agreed that its leaders, managers and certain other city employees will attend training on the requirements of RLUIPA. In addition, the city will adopt new procedures that clarify its complaint process for zoning and permitting decisions regarding houses of worship, and will report periodically to the Justice Department.
RLUIPA, enacted in 2000, prohibits religious discrimination in land use and zoning decisions. Persons who believe that they been subjected to religious discrimination in land use or zoning may contact the Housing and Civil Enforcement Section of the Justice Department’s Civil Rights Division at 1-800-896-7743. More information about RLUIPA, including a report on the first 10 years of its enforcement, may be found at www.justice.gov/crt/about/hce/rluipaexplain.php .
Florida Owner of Construction Business Sentenced to 60 Months in Prison for Employment Tax FraudRead the Press Release
WASHINGTON - Richard Rosaire Routhier of Lake Worth, Fla., was sentenced to 60 months in prison and ordered to pay $1,243,574 in restitution to the Internal Revenue Service (IRS), the Justice Department and the IRS announced today. On April 25, 2011, Routhier pleaded guilty to a one-count information charging him with conspiring to defraud the IRS. According to the information, Routhier and others conspired to defraud the United States and unlawfully enrich themselves by paying employees in cash and not withholding and paying over employment taxes to the U.S. Treasury.
According to court documents, Routhier owned and operated Drymension Inc., a custom drywall installation and framing contracting company in Lake Worth. From 2002 through 2008, the defendant caused Drymension checks to be issued to several shell corporations. These entities, while purporting to be legitimate subcontractors, existed only on paper and did not do any work for Drymension. The checks written to shell corporations totaled approximately $9,132,516. The checks were cashed at local check cashing stores and Routhier used the cash to pay Drymension employees. Routhier neither withheld from the cash wages nor paid over to the IRS the employment and income taxes as required by law.
Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida, and John A. DiCicco, Principal Deputy Assistant Attorney General for the Department of Justice, Tax Division, thanked the IRS Special Agents who investigated this case and Tax Division Trial Attorneys Matthew J. Mueller, Jason H. Poole and Assistant Chief Gregory E. Tortella who prosecuted the case.
Department of Justice Will Not Challenge the Producers Guild of America's Proposed Use of Certification MarkRead the Press Release
WASHINGTON – The Department of Justice announced today that it will not challenge the Producers Guild of America’s proposed use of a voluntary certification system for film producers. Based on the representations made by the Guild, the department said that the proposed voluntary certification system is unlikely to reduce competition among producers or film studios for producer services and could provide clarity to the film industry and the public.
The Department of Justice’s position was stated in a business review letter to counsel for the Guild from Sharis A. Pozen, Acting Assistant Attorney General in charge of the Department of Justice’s Antitrust Division.
With this certification, the Guild aims to distinguish those who perform what it considers to be the full range of producer’s duties on a film from those financiers, actors, lawyers or others in the entertainment industry who may bargain for a generic producer credit in return for their services. The Guild proposes using the certification “p.g.a.” after a person’s name in the work’s credits to clarify who performed the producing functions on a film as defined by the Guild’s specifications. According to the Guild, a producer who earns the “p.g.a.” certification will have been involved in all phases of development of a work, from its conceptual stage all the way through post-production and marketing.
“The Producers Guild’s certification program may benefit the film industry and the public by providing a way to discern who performed the full range of producer functions on a film,” said Acting Assistant Attorney General Pozen. “The Guild’s certification program may make it easier to identify some of the key executives in bringing a film to theaters.”
Based on the representations and information provided by the Guild, the department determined that the Guild’s proposal is not likely to harm competition in the provision of producer services. Participation in the certification program is voluntary for both producers and movie studios, and the certification program does not restrain in any way the ability of studios to hire producers without “p.g.a” certification or of producers without certification to work in the film industry.
Under the department’s business review procedure, an organization may submit a proposed action to the Antitrust Division and receive a statement as to whether the division currently intends to challenge the action under the antitrust laws based on the information provided. The department reserves its right to challenge the proposed action under the antitrust laws if it produces anticompetitive effects.
A file containing the business review request and the department’s response may be examined in the Antitrust Division’s Antitrust Documents Group, U.S. Department of Justice, 450 Fifth Street, N.W., Suite 1010, Washington, D.C. 20530. After a 30-day waiting period, the documents supporting the business review will be added to the file, unless a basis for their exclusion for reasons of confidentiality has been established under the Business Review Procedure.
Bridgeport, Conn., Man Admits to Participating in the Murder of Three Individuals in 2005Read the Press Release
WASHINGTON – Azikiwe Aquart, also known as “Z” and “Ziggy,” pleaded guilty today in Bridgeport, Conn., to three counts of murder in aid of racketeering stemming from his role in the murder of three Bridgeport residents in August 2005, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney David B. Fein for the District of Connecticut.
Azikiwe Aquart, 31, of Bridgeport, pleaded guilty before U.S. District Judge Stefan R. Underhill.
According to court documents, statements made in court and evidence introduced during Azibo Aquart’s trial in the spring of 2011, Azibo Aquart, who is Azikiwe Aquart’s brother, was the founder and leader of a drug trafficking group that primarily sold crack cocaine out of an apartment building located at 215 Charles Street in Bridgeport. Azibo Aquart and his associates participated in acts of violence, such as threats and assaults, to maintain their control over the group’s drug distribution activities at the Charles Street Apartments. In the summer of 2005, Azibo Aquart and his associates became involved in a drug trafficking dispute with Tina Johnson, a resident of 215 Charles Street who sometimes sold smaller quantities of crack cocaine without the approval of Azibo Aquart. On the morning of Aug. 24, 2005, Azibo Aquart, Azikiwe Aquart and others entered Apartment 101 at 215 Charles Street and murdered Tina Johnson, 43, her boyfriend James Reid, 40, and friend Basil Williams, 54. The three victims were bound with duct tape and brutally beaten to death with baseball bats.
Today, Azikiwe Aquart specifically admitted that he had agreed to participate in what he believed would be a robbery with his brother and others and, after entering the apartment he murdered James Reid, while other participants in the crime murdered Tina Johnson and Basil Williams.
During the trial of Azibo Aquart, in addition to witness testimony, the government offered extensive forensic evidence gathered from the apartment, including fingerprints and evidence that contained DNA from the Aquarts and others.
Judge Underhill has scheduled Azikiwe Aquart’s sentencing for Nov. 14, 2011, at which time Aquart faces a mandatory life prison term on each of the three counts of murder in aid of racketeering.
On May 23, 2011, after a month-long trial, a federal jury in New Haven, Conn., found Azibo Aquart guilty of the murders of Johnson, Reid and Williams. On June 15, 2011, the jury unanimously determined that Azibo Aquart should be sentenced to death for committing both the racketeering murders and drug-related murders of Johnson and Williams, but could not reach a unanimous decision as to an appropriate penalty, life in prison or death, for the racketeering murder and drug-related murder of Reid.
U.S. District Judge Janet Bond Arterton will schedule a sentencing date for Azibo Aquart after the submission of post-trial motions.
This case was investigated by the FBI, Bridgeport Police Department, Connecticut State Police, Connecticut Department of Correction’s Intelligence Unit, ICE Homeland Security Investigations, U.S. Marshals Service, Bridgeport States Attorney’s Office and U.S. Attorney’s Office.
This case is being prosecuted by Assistant U.S. Attorneys Tracy L. Dayton, Peter D. Markle, Alina P. Reynolds of the District of Connecticut and Trial Attorney Jacabed Rodriguez-Coss of the Capital Case Unit of the Department of Justice’s Criminal Division.
Barrio Azteca Gang Member Extradited from Mexico to the United States to Face Charges Related to U.S. Consulate Murders in Juarez, MexicoRead the Press Release
WASHINGTON –Miguel Angel Nevarez, aka “Lentes” and “94,” a member of the Barrio Azteca (BA) gang, has been extradited to the United States from Mexico to face a variety of charges including those related to his alleged participation in the March 13, 2010, murders of three individuals with ties to the U.S. Consulate in Ciudad Juarez, Mexico, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney John Murphy of the Western District of Texas, Assistant Director Kevin Perkins of the FBI and Administrator Michele M. Leonhart of the Drug Enforcement Administration (DEA).
Nevarez, 30, arrived in the United States yesterday and made his initial appearance today before a U.S. Magistrate Judge in the Western District of Texas (El Paso Division). Nevarez had been in the custody of Mexican authorities pending extradition since his arrest on Oct. 30, 2010.
On March 2, 2011, Nevarez and 34 co-defendants were charged in an a third superseding indictment returned by a federal grand jury in El Paso with conspiracy to commit racketeering, drug distribution, drug importation and money laundering. The indictment also charges Nevarez with conspiracy to commit murder in a foreign country, murder in aid of racketeering activity and federal firearm charges, based on the March 13, 2010, murders in Juarez, Mexico, of U.S. Consulate employee Leslie Ann Enriquez Catton, her husband Arthur Redelfs and Jorge Alberto Salcido Ceniceros, the husband of a U.S. Consulate employee.
The Department of Justice expresses its gratitude and appreciation to the government of Mexico for its cooperation and assistance in the apprehension and extradition of Nevarez.
“Mr. Nevarez is charged with participating in the senseless murders of three individuals with ties to the U.S. consulate in Ciudad Juarez,” said Assistant Attorney General Breuer. “Today’s extradition is a sign of the sustained commitment of the Justice Department and our Mexican law enforcement partners to seeing justice served, and to ending the cycle of violence that gangs like Barrio Azteca cause on both sides of the border.”
“The extradition of Nevarez is another big step in our efforts to bring to justice those accused of the murders of Ms. Enriquez, her husband Mr. Redelfs, and Mr. Salcido,” stated U.S. Attorney Murphy. “According to the indictment, these wanton acts of violence were part of a pattern and practice of the Barrio Azteca which engaged in scores of murders in furtherance of their racketeering enterprise. We appreciate all of the assistance provided by the government of Mexico during the investigation and prosecution of this case. We will vigorously pursue prosecution of all of the defendants named in this indictment and look forward to the continuing cooperation of our partners in Mexico.”
“ The FBI appreciates the continued cooperation of our counterparts in Mexico in this endeavor to bring justice for the families who lost loved ones,” said FBI Assistant Director Perkins. “Working with our local, state, federal, and international law enforcement partners is an important and effective way to combat the violence perpetrated by organized criminal enterprises, and individuals such as Mr. Nevarez.”
“DEA has and will continue to pursue the Barrio Azteca Gang, which is responsible for ruthless violence in Mexico and the United States,” said DEA Administrator Leonhart. “Miguel Angel Nevarez now faces justice in America for his alleged crimes, including his role in the senseless murders of U.S. citizens and those who protect and serve our country. Nevarez’s extradition demonstrates our strong partnership with the government of Mexico and our shared commitment to combat drug trafficking while protecting citizens on both sides of the border.”
According to the indictment, Nevarez was a member or associate of the Barrio Azteca criminal enterprise, which began in the late 1980s as a violent prison gang and has expanded into a transnational criminal organization. The BA is primarily based in West Texas; Juarez, Mexico; and throughout state and federal prisons in the United States and Mexico. The gang has a militaristic command structure and includes captains, lieutenants, sergeants and soldiers – all with the purpose of maintaining power and enriching its members and associates through drug trafficking, money laundering, extortion, intimidation, violence, threats of violence and murder.
To increase its power and influence, the indictment alleges that the BA formed an alliance with the Vicente Carrillo-Fuentes (VCF) drug trafficking organization in Mexico. As part of this alliance, the BA conducts enforcement operations against VCF rivals and the VCF provides illegal drugs to the BA at discounted prices.
The indictment alleges a variety of criminal acts committed by members and associates of the BA since Jan. 1, 2003, including drug trafficking, extortion, money laundering, kidnapping and murder.
All but four of the 35 individuals charged in the third superseding indictment are currently in custody in the United States or Mexico. Eduardo Ravelo aka “Tablas,” Luis Mendez aka “Alex,” April Cardoza and Yolanda Barba Chavira aka “Yoli” are currently at large. The United States has filed provisional arrest warrants with the government of Mexico for the arrest of Ravelo and Mendez in connection with this case. Ravelo is currently one of the FBI’s Top Ten Most Wanted Fugitives, and the FBI is offering a reward of up to $100,000 for information leading directly to his arrest.
An indictment is merely an allegation, and a defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
If convicted, Nevarez faces a maximum penalty of life in prison.
The case is being prosecuted by Trial Attorneys Joseph A. Cooley from the Criminal Division’s Organized Crime and Gang Section and Brian Skaret of the Criminal Division’s Human Rights and Special Prosecutions Section and attorneys from the U.S. Attorney’s Office for the Western District of Texas. The Criminal Division’s Office of International Affairs provided significant assistance in the extradition. The U.S. Attorney’s Office for the District of New Mexico also provided assistance in this case, which was investigated by the FBI and DEA.
Arkansas Man Pleads Guilty to Civil Rights Offenses Related to Firebombing of Mixed-Race Couple’s HomeRead the Press Release
WASHINGTON - Jason Walter Barnwell, 37, of Evening Shade, Ark., pleaded guilty in U.S. District Court in Little Rock, Ark., to charges related to his involvement in the Jan. 14, 2011, racially motivated firebombing of the home of a mixed-race couple in Hardy, Ark. Barnwell pleaded guilty to one count of civil rights conspiracy and one count of use of fire during the commission of a felony in connection with the incident. Barnwell also pleaded guilty to one count of possession of a firearm by a convicted felon for illegally possessing a firearm on March 16, 2011, the Department of Justice announced today.
Barnwell, along with Gary Dodson, 32, of Waldron, Ark.; Jake Murphy, 19, also of Waldron; Dustin Hammond, 20, of Hardy; and Wendy Treybig, 31, of Evening Shade, were indicted in April 2011 by a federal grand jury on civil rights charges and other federal charges stemming from their participation in the racially motivated firebombing and subsequent attempt to obstruct a federal investigation.
During the plea proceedings, Barnwell admitted that on the night of Jan. 14, 2011, while at a party at his house, he, Murphy, Hammond and Dodson devised a plan to firebomb the victims’ house. Thereafter, all four men drove from Barnwell’s residence to the victims’ house in Hardy. When they arrived, Barnwell, Murphy and Hammond constructed three Molotov cocktails and threw them at the house. The victims’ house sustained some damage; however, the victims were not injured. Barnwell also admitted to illegally possessing a firearm after he had been convicted of a felony.
“We simply will not tolerate racially-motivated violence in this country,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The Justice Department will vigorously prosecute individuals who commit such heinous acts.”
“This joint investigation by the Federal Bureau of Investigation and the Bureau of Alcohol, Tobacco, Firearms and Explosives; along with the Arkansas State Police; the Hardy and Waldron Police Departments; and the Scott and Sharp County Sheriff’s Offices demonstrates how seriously all levels and branches of law enforcement consider these acts of prejudice, intolerance, and intimidation,” said Christopher R. Thyer, U.S. Attorney for the Eastern District of Arkansas. “ We are committed to protect the civil rights of all citizens of the Eastern District of Arkansas.”
Barnwell faces a maximum penalty of 35 years in prison. Sentencing has been set for Dec. 20, 2011. Murphy, Hammond and Treybig previously pleaded guilty for their involvement in this matter. Gary Dodson is scheduled to go to trial on Oct. 25, 2011.
This case was investigated by the Little Rock Division of the Federal FBI and is being prosecuted by Assistant U.S. Attorney John Ray White of the Eastern District of Arkansas and Trial Attorney Henry Leventis of the U.S. Department of Justice Civil Rights Division.
Thursday 25 August 2011
Statement of Attorney General Eric Holder on Lawsuit Challenging the Voting Rights Act of 1965Read the Press Release
WASHINGTON – Attorney General Eric Holder released the following statement regarding a lawsuit filed today by the State of Arizona challenging the constitutionality of the Voting Rights Act of 1965:
“The Voting Rights Act plays a vital role in our society by ensuring that every American has the right to vote and to have that vote counted. The Department of Justice will vigorously defend the constitutionality of the Voting Rights Act in this case, as it has done successfully in the past. The provisions challenged in this case, including the preclearance requirement, were reauthorized by Congress in 2006 with overwhelming and bipartisan support. The Justice Department will continue to enforce the Voting Rights Act, including each of the provisions challenged today.”
Oregon Man Charged with Hate Crime for Arson at MosqueRead the Press Release
WASHINGTON – The Justice Department announced today that a federal grand jury in Eugene, Ore., has indicted Cody Crawford, 24, of Corvallis, Ore., on federal hate crime and arson charges for intentionally setting fire to the Salman Alfarisi Islamic Center.
According to the indictment, Crawford is charged with one count of damaging religious property and one count of arson. Crawford allegedly set fire to the mosque during the early morning hours of Nov. 28, 2010, less than two days after authorities arrested an individual in connection with the Portland Christmas Tree Lighting terror plot. The indictment alleges that Crawford set the fire because of the race, color or ethnic characteristics of individuals associated with the mosque.
“Burning a house of worship because of hatred toward members of one religion is not just an attack on that religion; it is an attack on our core American values,” said Assistant Attorney General Thomas E. Perez of the Department’s Civil Rights Division. “The Civil Rights Division will aggressively protect the rights of all persons to worship without fear of violence or intimidation.”
“Freedom of religion is essential to who we are as Americans,” said U.S. Attorney for the District of Oregon Dwight C. Holton. “We will not tolerate attacks based on faith.”
“The ability to live, work and worship freely, without fear or intimidation, is the very foundation of our society. We cannot allow any person to threaten the rights of those citizens we are sworn to protect,” said Greg Fowler, Special Agent in Charge of the FBI in Oregon. “Today’s arrest demonstrates our continued commitment to the FBI’s core mission: to protect our community and to protect the rights of all Americans as guaranteed by the U.S. Constitution.”
If convicted, Crawford faces a minimum of 10 years in prison and a maximum of 30 years in prison.
This case is being investigated by the Portland Division of the FBI, the Corvallis Police Department and the Corvallis Fire Department, in conjunction with the Benton County District Attorney; Bureau of Alcohol, Tobacco, Firearms and Explosives; Benton County Sheriff’s Office; and the Monmouth and McMinnville Police Departments. It is being prosecuted by Assistant U.S. Attorney William E. (Bud) Fitzgerald for the District of Oregon and Trial Attorney Fara Gold of the Civil Rights Division of the U.S. Department of Justice.
An indictment is merely an accusation, and the defendant is presumed innocent unless proven guilty.
Michigan Man Convicted of Obstructing the Internal Revenue Service in IRS Form 1099-OID Schemes and Gun CrimeRead the Press Release
WASHINGTON – Karl Herrington, of Parma, Mich., was convicted of two counts of corruptly endeavoring to obstruct the administration of the Internal Revenue laws, four counts of filing false tax forms with the Internal Revenue Service (IRS) and one count of being a felon in possession of six different firearms, the Justice Department, the Treasury Inspector General for Tax Administration (TIGTA) and the IRS announced today. The jury returned guilty verdicts on the tax charges on Aug. 24, 2011, and a guilty verdict on the gun charge today.
According to the evidence at trial, Herrington submitted false forms to the IRS to intimidate and harass state and local government officials and employees. These included Forms 1099-OID falsely reporting that Herrington paid original issue discount, which is taxable as interest, to law enforcement personnel and judges involved in a criminal case against him in Jackson County, Mich. In that case, Herrington was charged with being an accessory after the fact for harboring his wife, who was wanted for outstanding arrest warrants.
Further, the evidence established that Herrington sent false Forms 1099-OID to federal attorneys prosecuting a criminal tax case against his wife in the Northern District of Ohio in order to interfere with that case. Among the false tax forms Herrington is accused of filing was an individual income tax return for himself falsely reporting federal tax withheld of more than $8 million.
Herrington was also convicted of possessing firearms on May 25, 2011, which was the day of his arrest on two counts of corruptly endeavoring to obstruct the administration of the internal revenue laws and five counts of filing false tax forms with the IRS. According to the evidence at trial, Herrington was previously convicted of a felony offense. On May 25, 2011, when he was arrested on the underlying tax charges, Herrington possessed six different firearms, including five shotguns and a magnum rifle.
Herrington faces a maximum potential sentence of 21 years in prison and a maximum fine of $1.5 million. U.S. District Court Judge Stephen J. Murphy III of the Eastern District of Michigan ordered that Herrington be detained immediately following his conviction. A sentencing date has not been scheduled.
TIGTA and IRS-Criminal Investigation investigated this case and Tax Division Trial Attorneys Kenneth Vert and Jeffrey McLellan prosecuted the case for the United States.
More information about the Tax Division and its enforcement efforts can be found at www.justice.com/tax.
Former Department of Defense Employee Sentenced to Prison for Stealing Financial Assistance Funds Intended for Service MembersRead the Press Release
WASHINGTON – A former civilian employee of the Department of Defense was sentenced today to nine months in prison for conversion of Army Emergency Relief (AER) funds while he was employed at Camp Humphreys in the Republic of Korea, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division.
Tyrone L. Ellis, 56, of Columbus, Ga., was sentenced by U.S. District Judge Clay D. Land of the Middle District of Georgia. In addition to his prison term, Ellis was sentenced to two years of supervised release and was ordered to pay $9,250 in restitution.
Ellis pleaded guilty in May 2011 to one count of conversion. Ellis was indicted on Oct. 27, 2010, for this criminal conduct. As part of his guilty plea, Ellis admitted that, as an assistant AER officer at Camp Humphreys in 2005 and 2006, he approved grants for a dozen soldiers in financial need that were in excess of the amounts they required. Ellis also admitted that after he approved these grants, he manipulated the soldiers to return some of the grant money to him. In total, Ellis requested and received approximately $9,250 back from the grant recipients, which he converted to his own use. AER is funded primarily through donations from active and retired soldiers. For many soldiers, AER is their only source of funds for emergency expenses such as flights home to visit sick family members. Ellis also admitted making false statements to investigators when questioned about the allegations in 2006.
This case was prosecuted by Trial Attorneys John P. Pearson and Richard B. Evans of the Criminal Division’s Public Integrity Section, and was investigated by the Army Criminal Investigation Division, with assistance from the Defense Criminal Investigative Service and U.S. Army Audit Agency.
Final Charged Pittsburgh Crips Members Plead Guilty to Racketeering CrimesRead the Press Release
WASHINGTON – The last two defendants charged for their racketeering crimes as part of the Crips gang in Pittsburgh pleaded guilty today in U.S. District Court in Pittsburgh, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney David J. Hickton of the Western District of Pennsylvania.
Lamon Street, 20, aka “M-Dot,” and Dominique Steele, 21, aka “C-Flack,” pleaded guilty before Senior U.S. District Judge Gustave Diamond to one count of conspiracy to engage in a racketeering enterprise. Steele also pleaded guilty to using a firearm during and in retaliation for a crime of violence. Nicky Evans, 31, aka “Yamma,” pleaded guilty on Aug. 22, 2011, to one count of conspiracy to engage in a racketeering enterprise.
In addition, Vance Pearson, 25, aka “Vinny P,” and Phillip Turner, 23, aka “Philly-C,” were sentenced this week to 100 months and 154 months in prison, respectively, after pleading guilty on Apr. 26 and Apr. 28, 2011, respectively, to conspiracy to engage in racketeering activity.
“The Brighton Place/Northview Heights Crips gang ruled certain neighborhoods in Pittsburgh, spreading violence and fear in their communities,” said Assistant Attorney General Breuer. “This extensive investigation has taken dangerous Crips leaders, members and associates off the streets and put them in prison, where they belong. Violent street gangs should take note, and know that we are determined to break their vice grip on communities, while ensuring that they face justice for their crimes.”
“Today’s pleas successfully resolve charges against the final members of the criminal conspiracy which was contributing to the victimization of law abiding citizens in our community,” said U.S. Attorney Hickton. “Justice has been served. The public welfare has been protected. This outstanding result was achieved by virtue of the great cooperation of all of our law enforcement partners, this office and the U. S. Department of Justice in Washington, D.C.”
According to the guilty pleas, Street, Steele, Evans and others participated in a pattern of racketeering activity that included robberies at gun point; attempted murders; distribution of cocaine, heroin and crack cocaine; and obstruction of justice and witness intimidation.
According to court documents, Steele, Pearson and Turner were members of the Northview Heights/ Fineview Crips, a criminal street gang that operated in the Northview Heights public housing venue on the North Side of Pittsburgh. Street and Evans were members of the Brighton Place Crips, a criminal street gang that controlled an area of Brighton Place and Morrison Street, also known as the Mad Cave, and Federal Street in the Northside area of Pittsburgh. In 2003, the Northview Heights/ Fineview Crips and Brighton Place Crips formed an alliance. The alliance expanded the gang’s drug trafficking territory, and increased the number of gang members and associates available to preserve and protect the gang’s power, territory and profits through violence.
The Brighton Place/Northview Heights Crips gang maintains exclusive control over drug trafficking in these neighborhoods through continuous violence and intimidation of rivals and witnesses. Members of the gang support each other through payment of attorneys’ fees and bonds, as well as payments to jail commissary accounts and support payments to incarcerated members’ families.
In addition, gang members had violent confrontations with members of the rival Manchester OGs, and other street gangs operating in the Northside Section of Pittsburgh. Members and associates obtained greater authority and prestige within the enterprise based on their reputation for violence and their ability to obtain and sell a steady supply of illegal drugs. According to court documents, the Brighton Place/Northview Heights Crips gang members identify themselves by wearing blue, flashing Crips gang hand signals, and using phrases such as “Cuz,” “C-Safe,” “Loc” and “G.K.”
Evans, Street, Steele, Turner and Pearson are five of 26 defendants charged in February 2010 with being members of, and conducting racketeering activity through, the Brighton Place/Northview Heights Crips gang. This prosecution resulted from a Project Safe Neighborhoods Task Force investigation that began in 2005. With today’s guilty pleas, there are no pending charges left against the 26 defendants originally charged in the indictment.
This case is being prosecuted by Assistant U.S. Attorneys Charles A. Eberle and Troy Rive tti of the Western District of Pennsylvania and Trial Attorney Kevin Rosenberg of the Criminal Division’s Organized Crime and Gang Section. The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives; the City of Pittsburgh Bureau of Police; the Allegheny County, Penn., Police Department; and the Allegheny County Sheriff’s Office.
Detroit-Area Clinic Owner Sentenced to 48 Months in Prison for Medicare Fraud Schemes Totaling More Than $15 MillionRead the Press Release
WASHINGTON— An owner of three Detroit-area clinics was sentenced to 48 months in prison today for his role in schemes that attempted to defraud the Medicare program of more than $15 million, the Departments of Justice and Health and Human Services (HHS) announced.
Jose Rosario, 54, was sentenced by U.S. District Judge Gerald E. Rosen in the Eastern District of Michigan. In addition to the prison term, Rosario was sentenced to three years of supervised release and was ordered to pay, jointly and severally with other defendants in the case, $10.7 million in restitution. Judge Rosen ordered the sentence to run consecutive to a 46 month sentence that Rosario received in the Southern District of Florida in July 2011, in connection with an unrelated mortgage fraud case.
Rosario pleaded guilty on Aug. 18, 2009, to one count of conspiracy to commit health care fraud. According to court documents, Rosario acknowledged that in approximately September 2006, he and a co-defendant incorporated Sacred Hope Medical Center Inc. in Michigan. Sacred Hope purported to specialize in providing injection and infusion therapy services to Medicare patients. Rosario admitted that he and the co-defendant were the owners of the clinic, and agreed to split the profits generated there evenly between them.
According to court documents, during the time that Sacred Hope was open, the clinic routinely billed the Medicare program for services that were medically unnecessary and/or never provided. Rosario admitted that he knew the clinic purchased only a small fraction of the medications that the clinic billed to Medicare. Rosario admitted he participated in hiring co-conspirators to falsify the medical files to make the treatments purportedly provided at Sacred Hope appear legitimate, when in fact he knew they were not.
Rosario also admitted that Medicare beneficiaries were not referred to Sacred Hope by their primary care physicians or for any legitimate medical purpose. Rather, they were recruited to come to the clinic through the payment of kickbacks. In exchange for the kickbacks, the beneficiaries visited the clinic and signed documents falsely indicating that they had received the services billed to Medicare. According to information contained in the plea documents, kickbacks came in the form of cash and prescriptions for narcotic drugs.
In addition to the conduct at Sacred Hope, Rosario admitted to being a part owner of Dearborn Medical Rehab Center (DMRC), another infusion clinic, and to playing similar roles at a third Detroit-area infusion clinic, Xpress Center. Rosario admitted that he was fully aware that the DMRC and Xpress Center routinely billed the Medicare program for services that were medically unnecessary and, in many instances, never provided. Rosario admitted that the purpose of the DMRC and Xpress Center was not to provide legitimate health care to patients, but rather to defraud the Medicare program.
Between approximately March 2006 and March 2007, Rosario admitted to causing the submission of approximately $15.3 million in false and fraudulent claims to Medicare for services purportedly provided at Sacred Hope, DMRC and Xpress Center. Based on the fraudulent claims, approximately $10.7 million was paid.
Today’s sentence was announced by Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney for the Eastern District of Michigan Barbara L. McQuade; Special Agent in Charge Andrew G. Arena of the FBI’s Detroit Field Office; and Special Agent in Charge Lamont Pugh III of the HHS Office of Inspector General’s (HHS-OIG) Chicago Regional Office.
This case was prosecuted by Assistant Chief Benjamin D. Singer and Trial Attorney Gejaa T. Gobena of the Criminal Division’s Fraud Section, and Assistant U.S. Attorney John K. Neal of the Eastern District of Michigan. The case was investigated by the FBI and HHS-OIG, and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Michigan.
Since its inception in March 2007, Medicare Fraud Strike Force operations in nine districts have charged 1,000 defendants that collectively have billed the Medicare program for more than $2.3 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 HEAT team, go to: www.stopmedicarefraud.gov.
Detroit Occupational Therapist Pleads Guilty to Medicare Fraud SchemeRead the Press Release
WASHINGTON – A Detroit-area occupational therapist pleaded guilty today for her participation in a Medicare fraud scheme, announced the Departments of Justice and Health and Human Services (HHS).
Carol Gant, 66, pleaded guilty before U.S. District Judge Avern Cohn in the Eastern District of Michigan to one count of conspiracy to commit health care fraud. At sentencing, Gant faces a maximum penalty of 10 years in prison and a $250,000 fine.
According to the plea documents, Gant was an occupational therapist who worked for Jos Campau Physical Therapy, which purported to provide physical and occupational therapy services. In 2005, Gant was hired by Jos Campau Physical Therapy to create and sign falsified occupational therapy files. Gant created patient evaluation forms for Medicare beneficiaries whom she had never met, seen or evaluated.
Gant admitted that she hired an uncertified occupational therapy assistant, who fabricated and signed notes for occupational therapy patient visits that the assistant purported to perform. Gant paid the uncertified assistant for creating these fictitious patient visit notes and countersigned them. Gant also filled out patient discharge paperwork. Gant provided no services to the patients whose files she created and countersigned. Gant was paid for each patient file that she created. Gant knew that neither she nor the uncertified occupational therapy assistant were providing occupational therapy services to the beneficiaries as stated in the falsified files.
Gant admitted that between approximately June 2005 and May 2007, she and her co-conspirators at Jos Campau submitted or caused the submission of fraudulent claims to the Medicare program. Gant submitted or caused to be submitted approximately $897,512 in claims for occupational therapy services that were never rendered.
Today’s guilty plea was announced by Assistant Attorney General Lanny A. Breuer of the Criminal Division, U.S. Attorney for the Eastern District of Michigan Barbara L. McQuade, Special Agent in Charge Andrew G. Arena of the FBI’s Detroit Field Office, and Special Agent in Charge Lamont Pugh III of the HHS Office of Inspector General’s (OIG) Chicago Regional Office.
This case was prosecuted by Trial Attorney Catherine K. Dick of the Criminal Division’s Fraud Section. It was investigated by the FBI and HHS-OIG, and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Michigan.
Since their inception in March 2007, Strike Force operations in nine locations have charged more than 1,000 individuals who collectively have falsely billed the Medicare program for more than $2.3 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 HEAT team, go to: www.stopmedicarefraud.gov.
Wednesday 24 August 2011
Vice Lord Gang Members in Tennessee Convicted for Roles in Two Murders and Multiple Attempted MurdersRead the Press Release
WASHINGTON – A federal jury has convicted three Vice Lord gang members for their various roles in the murder of two individuals, and attempted murders of additional victims, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney Jerry E. Martin for the Middle District of Tennessee.
Roger Wayne Battle, 30, aka “T-Wayne,” of Nashville, Tenn.; Jessie Lobbins, 26, aka “Jessie Oliver” and “Trap,” of Memphis, Tenn.; and Gary Eugene Chapman, 32, aka “Wheat,” of Morristown, Tenn., all were convicted yesterday in U.S. District Court in Nashville.
Battle was found guilty on 57 charged counts, including for the murder of Moss James Dixon and Brandon Harris, aka “Chicago.” He also was convicted on charges of conspiracy to murder and attempted murder in aid of racketeering related to 13 additional victims; carrying and using firearms during and in relation to crimes of violence; and conspiracy to distribute cocaine and marijuana.
Lobbins was found guilty on six counts, including for his role in Harris’s murder; conspiracy to commit murder in aid of racketeering; carrying and using firearms during and in relation to crimes of violence; assault with a dangerous weapon resulting in serious bodily injury of a federal inmate in aid of racketeering; and tampering with a witness.
Chapman was found guilty on 29 counts, including conspiracy to commit murder; assault with a dangerous weapon; carrying and using firearms during and in relation to crimes of violence; and conspiracy to distribute marijuana.
“Mr. Battle and his co-defendants committed brutal acts of violence in the name of the Vice Lords gang,” said Assistant Attorney General Breuer. “Yesterday, a Tennessee jury emphatically rejected their pattern of murder and mayhem. Gang violence too often begets more gang violence, leading to ruthless retaliations, instilling fear among innocent civilians, and causing harm to mere bystanders. We cannot, and we will not, slow down in our efforts to hold members of violent criminal enterprises like the Vice Lords to account for their crimes.”
“We will continue to vigorously pursue those who choose to become involved in violent gangs and wreak havoc on our communities,” said U.S. Attorney Jerry Martin. “The verdicts in this case clearly demonstrate the dedication and commitment of our prosecutors and law enforcement partners to rid our communities of violent offenders. Middle Tennessee will certainly be a safer place without the presence of these individuals.”
According to evidence presented at trial, Battle was the leader of the Traveling Vice Lords, holding the rank of Five Star Universal Elite and controlling Middle and East Tennessee. The murders and attempted murders were a result of Battle and other members of the Traveling Vice Lords and the Conservative Vice Lords seeking revenge for the killing of Donnell Valentine, aka “Hitman,” the leader of the Conservative Vice Lords in Murfreesboro, Tenn.
In the early morning hours of Nov. 10, 2007, according to evidence presented at trial, multiple fights between members of the Vice Lords and the Gangster Disciples erupted at a party held at the Armory in Murfreesboro. Valentine believed that during the course of the fighting, Antwan Butler, aka “Tweezy,” had not come to his aid. Butler was a fellow member of the Traveling Vice Lord gang. Failure to come to Valentine’s aid was a violation of Vice Lords’ rules, as Butler held a lower rank than Valentine’s Five Start Universal Elite rank. As a result, Valentine complained to Battle, who then decided to “put” Butler out of the gang, meaning he would no longer be a member of the Vice Lords.
According to evidence presented at trial, that same day, Butler was lured to an apartment at the Rutherford Woodlands apartment complex in Murfreesboro where he was beaten by Battle, Chapman and Valentine to the point of being unrecognizable by family members. Christopher Imes, a co-defendant, was also present. After the beating, Butler told family and friends, including Kevin Herrin, aka “Light Skin,” that Battle, Chapman, Imes and Valentine had beaten him.
That same night, members of the Traveling Vice Lords, including Battle, Chapman, Imes and members of the Conservative Vice Lords, including Valentine, Samuel Gaines, aka “Born Ready,” and Frederick Carney, aka “Little Fred,” went to a club called The Drink, in Murfreesboro. There, Herrin and others approached the Vice Lords and a fight erupted. During the course of the fight, Valentine was shot and killed.
As a result of the assault and murder at The Drink, Battle, Chapman, Imes, Demarco Smith, Danielle Hightower, Curtis Green (Battle’s cousin), Carney and Gaines conspired to retaliate against people they believed had been involved in the assault and murder by shooting at locations where they thought those individuals lived. According to evidence presented at trial, while the targets were people at the fight, the Vice Lords were willing to shoot anyone staying in a house where their targets were visiting or living.
According to evidence presented at trial, five retaliatory shootings then occurred around Murfreesboro, including at the following locations:
- On Nov. 13, 2007, at 431 East State Street, five people were in a house when shots were fired, including two individuals hit by the gunfire;
- On Nov. 14, 2007, at 907 West Main Street, four people were in a house, including Dixon who was shot and died two weeks later as a result of his injuries;
- On Nov. 18, 2007, at 1401 Eagle Street, three people were in a house when shots were fired, though none were injured; and
- On Jan. 1, 2008, at 424 Castleview Street, three people were in a house when shots were fired, including two individuals hit by the gunfire.
The fifth retaliatory shooting, on Feb. 10, 2008, was carried out by Battle and Lobbins and resulted in Harris’ death. According to evidence presented at trial, Harris was a member of the Mikey Cobras, a gang aligned with the Vice Lords. Battle believed that Harris had made statements regarding Battle having some involvement in the death of Valentine. Subsequently, Battle lured Harris to O’Charley’s, a restaurant on Bell Road in Nashville, under the guise of a drug transaction. Lobbins accompanied Battle to the location. Battle and Lobbins then led Harris, in a car driven by Gaines, to Rice Road in Antioch, Tenn., where Battle and Lobbins then shot Harris to death. According to evidence presented at trial, Battle admitted in a call from jail with Chapman to killing Harris, saying that he could only “let it slide for so long” and that he (Battle) had “personally demonstrated,” meaning that Battle had personally killed Harris.
Eight individuals have pleaded guilty to various crimes related to their involvement in the Vice Lord gang. Smith and Imes each pleaded guilty to conspiracy to commit murder and to the murder of Dixon. Hightower pleaded guilty to conspiracy to commit murder and assault. Gaines pleaded guilty to conspiracy to commit murder related to the retaliatory shootings that occurred from Nov. 13, 2007, to Jan. 1, 2008. Delregus Alexander pleaded guilty to conspiracy to use and carry firearms during and in relation to crimes of violence related to the retaliatory shootings on Jan. 1, 2008. Curtis Green pleaded guilty to conspiracy to commit murder. These six individuals are currently awaiting sentencing. Carney was a juvenile at the time of the shootings, and has subsequently been convicted of federal charges unrelated to these events and serving a prison sentence. Herrin has subsequently been convicted of federal charges unrelated to these events and is currently in prison.
Battle and Lobbins face mandatory life prison sentences. Chapman faces a maximum penalty of life in prison. Chief U.S. District Court Judge Todd J. Campbell scheduled sentencing for Jan. 27, 2012.
The investigation was a joint operation conducted by the Bureau of Alcohol, Tobacco, Firearms, and Explosives; the Murfreesboro Police Department; and the Metropolitan Nashville Police Department. The case was prosecuted by Assistant U.S. Attorney Van S. Vincent for the Middle District of Tennessee and Trial Attorney Cody L. Skipper of the Criminal Division’s Organized Crime and Gang Section.
Three New Jersey Investors Plead Guilty to Bid Rigging at Municipal Tax Lien AuctionsRead the Press Release
Three financial investors who purchased municipal tax liens at auctions in New Jersey pleaded guilty today for their roles in a conspiracy to rig bids at tax liens auctions held by municipalities, the Department of Justice announced.
Charges were filed today in U.S. District Court for the District of New Jersey in Newark, N.J., against Isadore H. May of Margate, N.J.; Richard J. Pisciotta Jr. of Long Beach Township, N.J.; and William A. Collins of Medford, N.J.
According to the felony charges, from at least 2003 through approximately February 2009, the investors participated in a conspiracy to rig bids at auctions for the sale of municipal tax liens in New Jersey by agreeing to allocate among certain bidders which liens each would bid on. The investors proceeded to submit bids in accordance with their agreements and purchased tax liens at collusive and non-competitive interest rates.
“The collusion taking place at these auctions is artificially raising the interest rates that financially distressed home and property owners must pay, and is lining the pockets of the colluding investors,” said Sharis A. Pozen, Acting Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. “The Antitrust Division will vigorously pursue these kinds of collusive schemes that eliminate competition from the marketplace.”
The department said that the primary purpose of the conspiracy was to suppress and restrain competition to obtain selected municipal tax liens offered at public auctions at non-competitive interest rates. When the owner of real property fails to pay taxes on that property, the municipality in which the property is located may attach a lien for the amount of the unpaid taxes. If the taxes remain unpaid after a waiting period, the lien may be sold at auction. State law requires that investors bid on the interest rate delinquent homeowners will pay upon redemption. By law, the bid opens at 18 percent interest and, through a competitive bidding process, can be driven down to zero percent. If a lien remains unpaid after a certain period of time, the investor who purchased the lien may begin foreclosure proceedings against the property to which the lien is attached.
According to the court documents, May, Pisciotta and Collins conspired with others not to bid against one another at municipal tax lien auctions in New Jersey. Because the conspiracy permitted the conspirators to purchase tax liens with limited competition, each conspirator was able to obtain liens which earned a higher interest rate. Property owners were therefore made to pay higher interest on their tax debts than they would have paid had their liens been purchased in open and honest competition.
Each violation of the Sherman Act carries a maximum penalty of 10 years in prison and a $1 million fine for individuals. The maximum fine for a Sherman Act violation 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 $1 million statutory maximum.
Today’s charges are part of efforts underway by President Barack Obama’s Financial Fraud Enforcement Task Force (FFETF). President Obama established the interagency FFETF to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. For more information on the task force, visit www.StopFraud.gov.
The ongoing investigation is being conducted by the Antitrust Division’s New York Field Office and the FBI’s Atlantic City, N.J., office. Anyone with information concerning bid rigging or fraud related to municipal tax lien auctions should contact the Antitrust Division’s New York Field Office at 212-335-8000, visit www.justice.gov/atr/contact/newcase.htm or contact the Atlantic City Resident Agency of the FBI at 609-677-6400.
Minnesota Transit Constructors to Pay U.S. $4.6 Million to Resolve False Claims Act LiabilityRead the Press Release
WASHINGTON - Minnesota Transit Constructors Inc. (MnTC), a joint venture comprised of Granite Construction, C.S. McCrossan Inc. and Parsons Transportation Group, as well as a number of subcontractors, have agreed to pay the United States $4.6 million to resolve allegations that they knowingly submitted false claims related to a federally-funded transit construction project in Minneapolis, the Justice Department announced today. The United States alleges that the companies falsely claimed that they had used Disadvantaged Business Enterprises (DBEs) for part of the work on the project when they had not. The U.S. Department of Transportation’s (DOT) DBE program provides assistance to businesses owned by minorities and women, as well as socially and economically disadvantaged individuals, to participate in federally-funded construction and design projects.
MnTC was the prime contractor on the project to design and build the Hiawatha Light Rail Transit System, a light-rail line linking downtown Minneapolis-St. Paul International Airport and the Mall of America. To obtain and maintain their contract, MnTC and its subcontractors were required to comply with the DBE regulations and to accurately report their DBE contracting. MnTC claimed that materials and services for the project were provided by DBEs, when in fact they were provided by non-DBE subcontractors and the DBEs were merely extra participants used to make it appear as if a DBE had performed the work.
“The Disadvantaged Business Enterprises program helps businesses owned by minorities and women work on federal construction projects,” said Tony West, Assistant Attorney for the Civil Division of the Department of Justice. “Those who make misrepresentations in order to participate in this program and obtain federal funds take advantage both of the taxpayers and the businesses that the program is designed to assist.”
“When businesses misrepresent those working with them to obtain government contracts, they violate the law and economically harm subcontractors who already face numerous disadvantages in the workplace,” added B. Todd Jones, U.S. Attorney for the District of Minnesota. “This resolution helps to correct that injustice in this instance.”
The government’s claims were based upon an investigation conducted by the Justice Department’s Civil Division, the U.S. Attorney’s Office for the District of Minnesota, DOT’s Office of Inspector General and the Federal Transit Administration.
“Disadvantaged Business Enterprise (DBE) fraud harms the integrity of the DBE program and law-abiding contractors , including many small businesses, by defeating efforts to ensure a level playing field in which all firms can compete fairly for contracts,” said Michelle McVicker, regional Special Agent-in-Charge of the DOT’s Office of Inspector General. “Our agents and investigators will continue to work with the Secretary of Transportation, the Administrator of Federal Transit and prosecutorial colleagues to expose and shut down DBE fraud schemes that adversely affect public trust and DOT-funded transit programs throughout Minnesota and elsewhere.”
“This violation of law is not acceptable and the Federal Transit Administration will remain vigilant in cracking down on unscrupulous behavior wherever it occurs,” said Administrator Peter Rogoff, Federal Transit Administration. “The spirit and intent of this law is to help level the playing field for small and disadvantaged businesses so they may continue to achieve success while strengthening our economy and our transit systems.”
The Justice Department’s total recoveries in False Claims Act cases since January 2009 have topped $7.5 billion.
Michigan Man Pleads Guilty to Illegal Importation of Polar Bear Trophy from CanadaRead the Press Release
WASHINGTON – Rodger Dale DeVries, 73, a resident of Jenison, Mich., has pleaded guilty to illegally importing a polar bear trophy mount in 2007 from Canada into Michigan in violation of the Marine Mammal Protection Act (MMPA), announced Ignacia S. Moreno, Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division and Donald A. Davis, U.S. Attorney for the Western District of Michigan.
According to the plea agreement, the defendant obtained a license from the Nunavut Territory in Canada to hunt and kill a polar bear from the Foxe Basin in November 2000. DeVries knew that polar bears from the Foxe Basin could not be imported into the United States, so the defendant had the polar bear trophy stored in Canada.
The MMPA prohibits importation of polar bear trophies or parts unless the Secretary of the Interior has made a determination that, in doing so, the region would still maintain sustainable population levels. The Secretary has not made such a determination for the Foxe River Basin, and therefore, DeVries’ importation violated the MMPA. Since May of 2008 when polar bears were listed as “threatened” under the Endangered Species Act, the MMPA automatically prohibited the importation of polar bear parts or trophies for personal use from any part of Canada.
On July 3, 2007, DeVries traveled to Canada. He picked up the polar bear trophy from a storage unit, and, along with his two minor grandsons, put the polar bear trophy in his own boat and traveled from a boat harbor in Ontario, Canada, across the border to port in Raber Bay, Mich. A few days later, the defendant moved the trophy to his home and then sold the boat.
“The polar bear is an ecological and cultural treasure of the American and Canadian Arctic,” said Assistant Attorney General Moreno. “We will not tolerate the illegal importation of polar bear trophies and will fully prosecute all violations of federal law.”
Mr. Devries entered the plea on Aug. 22, 2011, before U.S. Magistrate Judge Timothy P. Greeley in Grand Rapids, Mich. The sentencing is currently scheduled for Sep. 8, 2011.
The maximum statutory sentence for this criminal violation is one year in prison and a maximum fine of $100,000.
The case was investigated by the U.S. Fish and Wildlife Service’s Office of Law Enforcement, and prosecuted by U.S. Attorney Davis and David Kehoe of the Justice Department’s Environment and Natural Resources Division, Environmental Crimes Section.
Massachusetts Man Arrested and Charged in Child Pornography CaseRead the Press Release
WASHINGTON – A Lowell, Mass., man charged with transportation and possession of child pornography made his initial appearance today in U.S. District Court in Boston, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division, U.S. Attorney Carmen M. Ortiz of the District of Massachusetts and Special Agent in Charge Richard DesLauriers of the FBI Boston Division.
William H. Noble, 46, of Lowell, was charged in an indictment unsealed yesterday with one count of transportation of child pornography and one count of possession of child pornography. Noble was arrested yesterday in the District of Massachusetts.
According to the indictment, in April 2009, Noble allegedly transported visual depictions of minors engaging in sexually explicit conduct. The indictment also alleges that Noble possessed additional images of child pornography.
In a separate indictment unsealed in the District of Massachusetts on Aug. 17, 2011, Steven Saunders, 28, was charged with one count of possession of child pornography. Saunders, a current resident of Chula Vista, Calif., and a former resident of Groton, Mass., was arrested on Aug. 17, 2011, in the Southern District of California. According to the indictment, on April 15, 2009, Saunders allegedly possessed visual depictions of minors engaging in sexually explicit conduct.
The maximum sentence for each count of possession of child pornography is 10 years in prison, lifetime supervised release and a $250,000 fine. The maximum sentence for each count of transportation of child pornography is 20 years in prison, lifetime supervised release and a $250,000 fine.
These cases are being prosecuted by Trial Attorney Thomas Franzinger of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS) and Assistant U.S. Attorney Michael I. Yoon of District of Massachusetts Major Crimes Unit. The cases are being investigated by the FBI. The Groton Police Department is also investigating the case against Noble.
These cases were brought as part of Project Safe Childhood. In February 2006, the Department of Justice created Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. Led by the U.S. Attorneys’ Offices and the Criminal Division’s CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend, and prosecute individuals who exploit children, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov/.
The details contained in the indictments are allegations. The defendants are presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Iowa Company Pleads Guilty to Participating in Ready-Mix Concrete Price-Fixing and Bid-Rigging ConspiracyRead the Press Release
WASHINGTON - An Iowa ready-mix concrete company pleaded guilty today to participating in a price-fixing and bid-rigging conspiracy for the sales of ready-mix concrete, the Department of Justice announced.
According to a one-count felony charge filed on Aug. 15, 2011, in U.S. District Court in Sioux City, Iowa, Great Lakes Concrete Inc., a producer of ready-mix concrete with headquarters in Spencer, Iowa, participated in a conspiracy with another ready-mix concrete company to fix prices and rig bids for ready-mix concrete sold in the northern district of Iowa. The department said the company participated in the conspiracy beginning at least as early as January 2008 and continuing until as late as August 2009.
Ready-mix concrete is a product comprised of cement, aggregate (sand and gravel), water and other additives. The concrete generally is produced in a concrete plant and is transported by concrete-mixer trucks to work sites, where it is used in various types of construction projects, including buildings and roads.
According to court documents, Kent Robert Stewart, the president of Great Lakes Concrete, participated in the conspiracy by engaging in conversations and reaching agreements regarding the conspirators’ price lists and project bids for ready-mix concrete sold in the northern district of Iowa. Great Lakes Concrete then accepted payment for those sales at collusive and noncompetitive prices, the department said. On May 24, 2010, Stewart pleaded guilty in U.S. District Court in Sioux City to participating in a conspiracy to fix prices and rig bids of the sale of ready-mix concrete, and, on Feb. 8, 2011, was sentenced to serve a year and a day in prison and to pay a $83,427.09 criminal fine.
Great Lakes Concrete is charged with violating the Sherman Act, which carries a maximum fine of $100 million for corporations. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.
Today’s guilty plea arose from an ongoing federal antitrust investigation of the ready-mix concrete industry in Iowa and surrounding states. As a result of the investigation, three individuals have been convicted and sentenced to serve prison time, and, including Great Lakes Concrete, four ready-mix concrete companies have pleaded guilty and are awaiting sentencing.
The investigation is being conducted by the Antitrust Division’s Chicago Field Office, the FBI’s Sioux City Resident Agency and the U.S. Department of Transportation’s Office of the Inspector General, with the assistance of the U.S. Attorney’s Office in Sioux City. Anyone with information concerning bid rigging, price fixing or territorial allocation related to the ready-mix concrete industry in Iowa and its surrounding states should contact the Antitrust Division’s Chicago Field Office at 312-353-7530 or visit www.justice.gov/atr/contact/newcase.htm.
Google Forfeits $500 Million Generated by Online Ads & Prescription Drug Sales by Canadian Online PharmaciesRead the Press Release
PROVIDENCE, R.I – Online search engine Google Inc. has agreed to forfeit $500 million for allowing online Canadian pharmacies to place advertisements through its AdWords program targeting consumers in the United States, resulting in the unlawful importation of controlled and non-controlled prescription drugs into the United States, announced Deputy Attorney General James M. Cole; Peter F. Neronha, U.S. Attorney for the District of Rhode Island; and Kathleen Martin-Weis, Acting Director of the U.S. Food and Drug Administration’s Office of Criminal Investigations (FDA/OCI). The forfeiture, one of the largest ever in the United States, represents the gross revenue received by Google as a result of Canadian pharmacies advertising through Google’s AdWords program, plus gross revenue made by Canadian pharmacies from their sales to U.S. consumers.
The shipment of prescription drugs from pharmacies outside the United States to customers in the United States typically violates the Federal Food, Drug and Cosmetic Act and in the case of controlled prescription drugs , the Controlled Substances Act. Google was aware as early as 2003, that generally, it was illegal for pharmacies to ship controlled and non-controlled prescription drugs into the United States from Canada.
The importation of prescription drugs to consumers in the United States is almost always unlawful because the FDA cannot ensure the safety and effectiveness of foreign prescription drugs that are not FDA-approved because the drugs may not meet FDA’s labeling requirements; may not have been manufactured, stored and distributed under proper conditions; and may not have been dispensed in accordance with a valid prescription. While Canada has its own regulatory rules for prescription drugs, Canadian pharmacies that ship prescription drugs to U.S. residents are not subject to Canadian regulatory authority, and many sell drugs obtained from countries other than Canada which lack adequate pharmacy regulations.
“The Department of Justice will continue to hold accountable companies who in their bid for profits violate federal law and put at risk the health and safety of American consumers,” said Deputy Attorney General Cole. “This settlement ensures that Google will reform its improper advertising practices with regard to these pharmacies while paying one of the largest financial forfeiture penalties in history.”
“This investigation is about the patently unsafe, unlawful, importation of prescription drugs by Canadian on-line pharmacies, with Google’s knowledge and assistance, into the United States, directly to U.S. consumers,” said U.S. Attorney Neronha. “It is about taking a significant step forward in limiting the ability of rogue on-line pharmacies from reaching U.S. consumers, by compelling Google to change its behavior. It is about holding Google responsible for its conduct by imposing a $500 million forfeiture, the kind of forfeiture that will not only get Google’s attention, but the attention of all those who contribute to America’s pill problem.”
“Today’s agreement demonstrates the commitment of the Food and Drug Administration to protect the US consumer and hold all contributing parties accountable for conduct that results in vast profits at the expense of the public health,” said FDA/OCI Acting Director Martin-Weis. “The result of this investigation has been a fundamental transformation of Internet pharmacy advertising practices, significantly limiting promotion to US consumers by rogue online pharmacies. This accomplishment could not have been possible without the resourceful commitment of the Rhode Island United States Attorney’s Office, as well as the tireless efforts of our law enforcement partners detailed to the OCI Rhode Island Task Force.”
An investigation by the U.S. Attorney’s Office in Rhode Island and the FDA/OCI Rhode Island Task Force revealed that as early as 2003, Google was on notice that online Canadian pharmacies were advertising prescription drugs to Google users in the United States through Google’s AdWords advertising program. Although Google took steps to block pharmacies in countries other than Canada from advertising in the U.S. through AdWords, they continued to allow Canadian pharmacy advertisers to target consumers in the United States. Google was aware that U.S. consumers were making online purchases of prescription drugs from these Canadian online pharmacies, and that many of the pharmacies distributed prescription drugs, including controlled prescription drugs, based on an online consultation rather than a valid prescription from a treating medical practitioner. Google was also on notice that many pharmacies accepting an online consultation rather than a prescription charged a premium for doing so because individuals seeking to obtain prescription drugs without a valid prescription were willing to pay higher prices for the drugs.
Further, from 2003 through 2009, Google provided customer support to some of these Canadian online pharmacy advertisers to assist them in placing and optimizing their AdWords advertisements, and in improving the effectiveness of their websites.
In 2009, after Google became aware of the investigation by the Rhode Island U.S. Attorney’s Office and the FDA/OCI Rhode Island Task Force of its advertising practices in the online pharmacy area, and as a result of that investigation, Google took a number of steps to prevent the unlawful sale of prescription drugs by online pharmacies to U.S. consumers. Among other things, Google began requiring online pharmacy advertisers to be certified by the National Association of Boards of Pharmacy’s Verified Internet Pharmacy Practices Sites program, which conducts site visits; has a stringent standard against the issuance of prescriptions based on online consultations; and, most significantly, does not certify Canadian online pharmacies. In addition, Google retained an independent company to enhance detection of pharmacy advertisers exploiting flaws in the Google’s screening systems.
Under the terms of an agreement signed by Google and the government, Google acknowledges that it improperly assisted Canadian online pharmacy advertisers to run advertisements that targeted the United States through AdWords, and the company accepts responsibility for this conduct. In addition to requiring Google to forfeit $500 million, the agreement also sets forth a number of compliance and reporting measures which must be taken by Google in order to insure that the conduct described in the agreement does not occur in the future.
The investigation of Google had its origins in a separate, multimillion dollar financial fraud investigation unrelated to Google, the main target of which fled to Mexico. While a fugitive, he began to advertise the unlawful sale of drugs through Google’s AdWords program. After being apprehended in Mexico and returned to the United States by the U.S. Secret Service, he began cooperating with law enforcement and provided information about his use of the AdWords program. During the ensuing investigation of Google, the government established a number of undercover websites for the purpose of advertising the unlawful sale of controlled and non-controlled substances through Google’s AdWords program.
The investigation was led by Assistant U.S. Attorneys Andrew J. Reich and Richard B. Myrus of the District of Rhode Island, and FDA/OCI Special Agent Jason Simonian. The FDA/OCI Rhode Island Task Force is comprised of law enforcement agents and officers from FDA/OCI; Internal Revenue Service – Criminal Investigation; U.S. Immigration and Customs Enforcement-Homeland Security Investigations; U.S. Postal Inspection Service; Rhode Island State Police; Rhode Island National Guard; Rhode Island Department of the Attorney General; East Providence Police; and North Providence Police. Corbin A. Weiss, Senior Counsel with the Criminal Division’s Computer Crime & Intellectual Property Section, and Sarah Hawkins, FDA Senior Counsel, assisted the Rhode Island U.S. Attorney’s Office in this matter.
Former “Most Wanted” Health Care Fraud Fugitives Plead Guilty to $9.1 Million Detroit Medicare Fraud SchemeRead the Press Release
WASHINGTON - Two sisters who owned a fraudulent Detroit-area medical clinic and who are former “Most Wanted” health care fraud fugitives pleaded guilty today in Miami for their leading roles in a $9.1 million Medicare fraud scheme, announced the Department of Justice, the FBI and the Department of Health and Human Services (HHS).
Caridad Guilarte, 54, and Clara Guilarte, 57, each pleaded guilty before U.S. District Judge Cecilia M. Altonaga to one count of conspiracy to commit health care fraud and one count of conspiracy to commit money laundering. The sisters were charged in an indictment unsealed in June 2009 and were placed on the HHS Office of Inspector General (HHS-OIG) Most Wanted Fugitives list. They were arrested on March 13, 2011, by law enforcement authorities in Colombia and were returned to the United States on March 14, 2011.
In pleading guilty, the Guilarte sisters admitted that in approximately March 2005, they opened Dearborn Medical Rehabilitation Center (DMRC), in Dearborn, Mich., with the express intent to defraud the Medicare program. DMRC routinely billed Medicare for exotic and expensive medications that were medically unnecessary and were never provided. Although they billed Medicare for millions of dollars of these medications, the Guilartes admitted that they and their co-conspirators at the clinic had purchased only a small fraction of the medications.
The Guilartes admitted that Medicare beneficiaries were not referred to DMRC by their primary care physicians, or for any other legitimate medical purpose, but were recruited to come to the clinic through the payment of cash kickbacks. In exchange for those kickbacks, the Medicare beneficiaries would visit the clinic and sign documents indicating that they had received the services billed to Medicare. Patients were prescribed medications not based on need, but based on what medications were likely to generate the greatest reimbursements from Medicare.
According to court documents, Caridad and Clara Guilarte laundered the proceeds of the health care fraud through shell corporations in order to conceal the source and ownership of the funds stolen from Medicare.
The Guilartes admitted that between approximately March 2005 and March 2007, they caused the submission of approximately $9.1 million in false and fraudulent claims to the Medicare program for services purportedly provided at DMRC. Medicare paid approximately $6 million on those claims.
The defendants consented to have their case transferred to the Southern District of Florida for plea and sentencing. Caridad Guilarte also consented to the forfeiture of $464,096 seized from bank accounts she controlled.
At their sentencing, scheduled for Nov. 3, 2011, the Guilartes face a maximum of 10 years in prison for each count of conspiracy to commit health care fraud and 20 years in prison for each count of conspiracy to commit money laundering.
The guilty pleas were announced by Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney Barbara L. McQuade for the Eastern District of Michigan; U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida; Inspector General Daniel R. Levinson of the HHS-OIG; and Special Agent in Charge Andrew G. Arena of the FBI’s Detroit Field Office.
The case is being prosecuted by Trial Attorney Gejaa T. Gobena of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Philip A. Ross of the Eastern District of Michigan and Adam Schwartz of the Southern District of Florida. The Criminal Division’s Office of International Affairs provided assistance. 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. Attorneys’ Offices for the Eastern District of Michigan and the Southern District of Florida.
Since their inception in March 2007, Medicare Fraud Strike Force operations in nine locations have charged more than 1,000 defendants who collectively have falsely billed the Medicare program for more than $2.3 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 .
Florida Woman Charged with Witness Tampering, False Statements and Obstruction of Justice in Relation to Her Husband’s DisappearanceRead the Press Release
WASHINGTON – A Gainesville, Fla., woman was charged in a seven-count indictment filed yesterday in the Northern District of Florida for her alleged role in the obstruction of a multinational investigation into the disappearance of her husband, James Hogan, then an employee in the U.S. Consulate in Curacao, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division, U.S. Attorney Pamela Cothran Marsh for the Northern District of Florida, Ambassador Eric J. Boswell of the Bureau of Diplomatic Security and John V. Gillies, Special Agent in Charge of the FBI’s Miami Field Office.
Abby Beard Hogan, 50, was charged with two counts of making false statements to federal law enforcement officials, one count of witness tampering and four counts of obstruction of justice. According to the indictment, on the night of Sept. 24, 2009, James Hogan, an employee at the U.S. Consulate in Curacao, a Caribbean island that was part of the Netherlands Antilles, left his home on foot and subsequently disappeared. The next day, a diver located his blood-stained clothing on a local beach. American officials and the government of Curacao and the Kingdom of the Netherlands opened an investigation into the disappearance of James Hogan.
The indictment alleges that, during the course of the investigation, Abby Hogan repeatedly provided false information to U.S. law enforcement about the time period before James Hogan’s disappearance and withheld relevant information. Abby Hogan allegedly denied, among other things, that she was having an extramarital affair and that she and her husband had argued about the affair on the night of Sept. 24, 2009. Additionally, the indictment alleges that Abby Hogan deleted multiple emails discussing the events leading up to and surrounding her husband’s disappearance. The indictment also alleges that Abby Hogan instructed at least one person to conceal information from investigators.
The indictment is merely an allegation, and a defendant is presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Abby Hogan faces a maximum of five years in prison for each false statement count and 20 years in prison for each count of witness tampering and obstruction of justice.
The case is being prosecuted by Senior Trial Attorney Teresa Wallbaum of the Criminal Division’s Human Rights and Special Prosecutions Section and Assistant U.S. Attorney Frank Williams for the Northern District of Florida. The Criminal Division’s Office of International Affairs provided assistance. The case is being investigated by the U.S. Department of State, Diplomatic Security Service and the FBI’s Miami Field Office and Legal Attache Office in Bridgetown, Barbados. Assistance was also provided by Curacao law enforcement authorities.
Tuesday 23 August 2011
Owner of Miami-Area Mental Health Care Corporation Convicted on All Counts for Orchestrating $205 Million Medicare Fraud SchemeRead the Press Release
WASHINGTON – A federal jury today convicted a Miami-area owner of a mental health care company, American Therapeutic Corporation (ATC), for orchestrating a fraud scheme that resulted in the submission of more than $205 million in fraudulent claims to Medicare, announced the Department of Justice, FBI and Department of Health and Human Services (HHS).
After a six-day trial, a jury in the Southern District of Florida found Judith Negron, 40, guilty of 24 felony counts, including conspiracy to commit health care fraud, health care fraud, conspiracy to pay and receive illegal health care kickbacks, conspiracy to commit money laundering, money laundering and structuring to avoid reporting requirements. Negron was charged in a superseding indictment unsealed on Feb. 15, 2011.
“Judith Negron and her co-conspirators masterminded one of the largest fraud schemes ever prosecuted by the Medicare Fraud Strike Force,” said Assistant Attorney General Lanny A. Breuer of the Criminal Division. “They brazenly submitted more than $200 million in fraudulent claims to the Medicare program. Ms. Negron may have thought she could scam the American taxpayer with impunity. Today a Miami jury showed her otherwise, and now she has found out that the price of Medicare fraud is extremely high.”
“Through bribery, kickbacks, and the creation of false patient files and other documents, Negron and her co-conspirators submitted hundreds of millions of dollars in fraudulent claims to Medicare for community mental health treatments for ineligible patients,” said U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida. “After a week-long trial, a jury convicted Negron of orchestrating this massive fraud scheme. She and her co-defendants now face the prospect of lengthy prison sentences. The U.S. Attorney’s Office will continue to lead the battle against Medicare fraud and abuse.”
Evidence at trial demonstrated that Negron, along with ATC co-owners Lawrence Duran and Marianella Valera, masterminded and executed a scheme to defraud Medicare beginning in 2002 and continuing until they were arrested in October 2010. Duran and Valera pleaded guilty to all charges against them in April 2011. Evidence at trial established that the three owners 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. Negron and her co-conspirators also used a related company, American Sleep Institute (ASI), to submit fraudulent Medicare claims.
According to the evidence at trial, Negron, Duran, Valera and others paid bribes and kickbacks to owners and operators of assisted living facilities (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. Throughout the course of the conspiracy, millions of dollars in kickbacks were paid in exchange for Medicare beneficiaries, who did not qualify for PHP services, to attend treatment programs that were not legitimate PHP programs, so that ATC and ASI could bill Medicare for more than $200 million in unnecessary or illegitimate services.
According to the evidence, Negron and her co-conspirators used another company they owned and operated, Medlink Professional Management Group Inc., to conceal the fraud and kickbacks scheme from Medicare and law enforcement. Once Medicare paid ATC and ASI for the fraudulently billed services, Duran, Valera and others transferred the money to Medlink. Evidence at trial showed that Negron and her co-conspirators used Medlink to pay millions of dollars in kickback payments by using an extensive money laundering scheme.
Evidence at trial demonstrated that Negron signed kickback checks to patient recruiters whose only jobs at ATC were to provide patients from halfway houses or assisted living facilities. Evidence at trial also established that Negron and others caused the alteration of patient files and therapist notes for the purpose of making it falsely appear that patients being treated by ATC qualified for PHP treatments and that the treatments provided were legitimate PHP treatments. For instance, evidence established that Negron would “robo-sign” patient files, meaning she would sign patient documents as a supervising therapist without having treated the patients. The evidence also showed that Negron signed files as though she had been in two places at once, in Boca and Homestead, Fla., at the same time. Evidence further revealed that Negron knew doctors were similarly signing patient files without reading them or seeing the patients. In some cases, Negron provided the doctors with the files for their signature. According to evidence presented at trial, Negron and her co-conspirators billed Medicare for PHP treatment, including group psychotherapy, provided to a patient who was in a neuro-vegetative state, who would not lift her head or respond. The evidence also showed that Negron and her co-conspirators caused doctors to refer ATC patients to ASI even though the patients did not qualify for sleep studies.
According to evidence at trial, the defendant and her co-conspirators concealed the fraud scheme by, among other things, creating false medical records in patient charts, concealing kickback payments as “transportation” payments, and creating sham companies with fake employee files to launder money.
Following today’s verdict, U.S. District Judge James Lawrence King remanded Negron into custody. A sentencing date for Negron has not yet been scheduled.
Duran and Valera have been in federal custody since their arrests in October 2010 and are scheduled to be sentenced on Sept. 14, 2011, at 9:30 a.m. Negron, Duran and Valera each face a maximum of 10 years in prison for each count of conspiracy to commit health care fraud and each count of health care fraud; five years in prison for each count of conspiracy to pay and receive health care kickbacks; 20 years in prison for each count of conspiracy to commit money laundering; 10 to 20 years in prison for each count of money laundering; and 10 years in prison for each count of structuring to avoid reporting requirements. The defendants’ assets were frozen at the time of their arrests through civil forfeiture proceedings.
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 and is also scheduled for sentencing on Sept. 14, 2011.
Today’s guilty verdict was announced by Assistant Attorney General Breuer; U.S. Attorney Ferrer; John V. Gillies, Special Agent-in-Charge of the FBI’s Miami Field Office; and Special Agent-in-Charge Christopher Dennis of the HHS Office of Inspector General (HHS-OIG), Office of Investigations Miami office.
The criminal case is being prosecuted by Trial Attorney Jennifer L. Saulino and Acting Assistant Chief Benjamin D. Singer of the Criminal Division’s Fraud Section. A related civil action is being handled by Vanessa I. Reed and Carolyn B. Tapie of the Civil Division and Assistant U.S. Attorney Ted L. Radway of the Southern District of Florida. The case was investigated by the FBI and HHS-OIG, and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida.
Since their inception in March 2007, Medicare Fraud Strike Force operations in nine locations have charged more than 1,000 defendants that collectively have billed the Medicare program for more than $2.3 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 .
Miami-Area Medical Equipment Company Owners Sentenced to Prison for Medicare Fraud SchemeRead the Press Release
WASHINGTON – The husband and wife owners and operators of a Miami-area medical equipment company were sentenced today to 70 months and 37 months in prison, respectively, for participating in a durable medical equipment (DME) health care fraud scheme, announced the Department of Justice, the FBI and the Department of Health and Human Services (HHS).
Obel Martinez, 39, and Damaris Gil, 30, previously pleaded guilty on May 24, 2010, before U.S. District Judge Donald M. Middlebrooks in Miami to one count of conspiracy to commit health care fraud. Martinez and Gil were owners and operators of OM Best Help Corporation, a company they admitted to incorporating for the purpose of defrauding the Medicare program.
In addition to their prison terms, Judge Middlebrooks sentenced Martinez and Gil each to three years of supervised release. Martinez and Gil also were ordered to pay $474,662 in restitution jointly and severally with each other.
According to plea documents, Martinez and Gil, through OM Best, submitted false and fraudulent claims to Medicare for DME and other medical items and services that were medically unnecessary and not prescribed by a doctor or licensed health care provider. Martinez and Gil used without authorization the Medicare billing identifiers of licensed medical doctors and represented to Medicare that the doctors had prescribed the DME and medical services in question, when they had not. Martinez and Gil knew that the Medicare beneficiaries, on whose behalf claims were submitted to Medicare by OM Best, never received the DME or services purportedly provided by OM Best.
According to court documents, Martinez and Gil submitted approximately $1.1 million in false claims to Medicare. Medicare paid $474,662 to OM Best based on these fraudulent claims.
Today’s sentences were announced by Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida; John V. Gillies, Special Agent-in-Charge of the FBI’s Miami field office; and Special Agent-in-Charge Christopher Dennis of the HHS Office of Inspector General (HHS-OIG), Office of Investigations Miami office.
This case was prosecuted by Trial Attorney Sarah M. Hall of the Criminal Division’s Fraud Section. The case was investigated by the FBI and HHS-OIG, and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida.
Since their inception in March 2007, Medicare Fraud Strike Force operations in nine locations have charged more than 1,000 defendants who collectively have falsely billed the Medicare program for more than $2.3 billion. In addition, 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.
Miami-Area Doctor Pleads Guilty in $25 Million Health Care Fraud SchemeRead the Press Release
WASHINGTON – A Miami-area medical doctor who owned two medical offices pleaded guilty today for his participation in a $25 million home health Medicare fraud scheme, announced the Department of Justice, FBI and the Department of Health and Human Services (HHS).
Jose Nunez, 63, pleaded guilty before U.S. District Judge Joan A. Lenard in Miami to one count of conspiracy to commit health care fraud. According to plea documents, Nunez provided home health care and therapy prescription referrals to ABC Home Health Care Inc. and Florida Home Health Care Providers Inc., Miami home health care agencies that purported to provide home health and therapy services to Medicare beneficiaries.
Nunez admitted that he knew co-conspirators at ABC and Florida Home Health operated the agencies in order to bill the Medicare program for expensive physical therapy and home health care services that were medically unnecessary and/or were never provided. The medically unnecessary services were prescribed by Nunez and other doctors.
According to court documents, beginning in approximately January 2006, and continuing until approximately March 2009, Nunez prescribed medically unnecessary services, including home health and therapy prescriptions, plans of care and medical certifications in exchange for kickbacks and bribes. The kickbacks and bribes were paid to Nunez by nurses, patient recruiters and the owners and operators of ABC and Florida Home Health. According to plea documents, Nunez furthered the scheme by falsifying patient files with descriptions of non-existent medical conditions for the Medicare beneficiaries, including hand tremors, unsteady gait and poor vision. These symptoms were included to make it appear that the patients were unable to self-inject insulin and were homebound, thus appearing to qualify for home health care benefits under the Medicare program. Nunez knew that the files were falsified so that Medicare could be billed for medically unnecessary therapy and home health-related services. As a result of Nunez’s participation in the illegal scheme, the Medicare program was billed approximately $1.5 million for purported home health care services that were medically unnecessary and/or were never provided.
Three other co-conspirators – Lisandra Alonso, Luisa Morciego and Vicente Guerra – have pleaded guilty for their roles in the fraud scheme.
Sentencing has been scheduled for Dec. 5, 2011.
The charge of conspiracy to commit health care fraud carries a maximum prison sentence of 10 years. The defendant also faces fines and terms of supervised release, as well as forfeiture of any property or proceeds derived from his criminal activities.
Today’s guilty plea was announced by Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida; John V. Gillies, Special Agent-in-Charge of the FBI’s Miami field office; and Special Agent-in-Charge Christopher Dennis of the HHS Office of Inspector General (HHS-OIG), Office of Investigations Miami office.
This case is being prosecuted by Trial Attorney Joseph S. Beemsterboer of the Criminal Division’s Fraud Section. The case was investigated by the FBI and HHS-OIG, and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida.
Since their inception in March 2007, Strike Force operations in nine locations have charged more than 1,000 individuals who collectively have falsely billed the Medicare program for more than $2.3 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 .
Monday 22 August 2011
Justice Department to Monitor Elections in MississippiRead the Press Release
WASHINGTON – The Justice Department announced today that it will monitor primary runoff elections on Aug. 23, 2011, in Bolivar, Noxubee, Tunica and Wilkinson Counties in Mississippi to ensure compliance with the Voting Rights Act of 1965. The Voting Rights Act prohibits discrimination in the election process on the basis of race, color or membership in a minority language group.
Under the Voting Rights Act, the Justice Department is authorized to ask the U.S. Office of Personnel Management (OPM) to send federal observers to jurisdictions that are certified by the attorney general or by a federal court order. Federal observers will be assigned to monitor polling place activities in Bolivar, Noxubee and Wilkinson Counties based on the attorney general’s certification. The observers will watch and record activities during voting hours at polling locations, and Civil Rights Division attorneys will coordinate the federal activities and maintain contact with local election officials.
In addition, Justice Department personnel will monitor polling place activities in Tunica County. A Civil Rights Division attorney will coordinate federal activities and maintain contact with local election officials.
Each year, the Justice Department deploys hundreds of federal observers from OPM, as well as departmental staff, to monitor elections across the country. To file complaints about discriminatory voting practices, including acts of harassment or intimidation, voters may call the Voting Section of the Justice Department’s Civil Rights Division at 1-800-253-3931.
Visit www.justice.gov/crt/voting/index.php for more information about the Voting Rights Act and other federal voting laws.
Justice Department Settles Allegations of Immigration-Related Employment Discrimination Against Missouri Pork ProducerRead the Press Release
WASHINGTON — The Justice Department today reached a settlement with Farmland Foods Inc., a major producer of pork products in the United States, resolving allegations that it engaged in a pattern or practice of discrimination by imposing unnecessary and excessive documentary requirements on non-U.S. citizens and foreign-born U.S. citizens when establishing their authority to work in the United States. Farmland Foods, a subsidiary of Smithfield Foods Inc., is headquartered in Kansas City, Mo. The settlement resolves the lawsuit between the United States and Farmland filed in June 2011.
The lawsuit, initiated by the Civil Rights Division’s Office of Special Counsel for Immigration Related Unfair Employment Practices (OSC), was based on an OSC investigation revealing that Farmland required all newly hired non-U.S. citizens and some foreign-born U.S. citizens at its Monmouth, Illinois plant to present specific and, in many cases, extra work-authorization documents beyond those required by federal law. In the case of non-U.S. citizens, Farmland required the presentation of a specific work-authorization document issued by the Department of Homeland Security, such as a permanent resident card or an employment authorization document, rather than allowing the employee to choose which document(s) to present from the list of acceptable documents on the Employment Eligibility Verification Form I-9. Farmland also required additional work authorization documents, generally by requiring social security cards, even when employees had already produced other documents establishing work authority. In the case of foreign-born naturalized U.S. citizens, Farmland sometimes required evidence of citizenship, such as certificates of naturalization or U.S. passports, even when those individuals had other means of proving their work authority. Farmland’s demand for specific or excessive documents to establish work authority violated the anti-discrimination provision of the Immigration and Nationality Act (INA).
In addition to ending its impermissible document requests and modifying its employment eligibility verification process, Farmland has agreed to pay $290,400 in civil penalties, the highest civil penalty paid through settlement since enactment of the INA’s anti-discrimination provision in 1986. Farmland also agreed to monitoring and reporting provisions, as well as training for their human resources personnel.
“The Justice Department is committed to protecting the right of all work-authorized employees, regardless of their citizenship or immigration status, to work without having to overcome extra and discriminatory hurdles during the hiring process,” said Thomas E. Perez, the Assistant Attorney General in charge of the Civil Rights Division. “We are pleased to have reached this agreement, and we will continue to rely upon both public education and focused enforcement to prevent and deter employers from engaging in discriminatory I-9 practices. ”
The lawsuit, filed before the Office of the Chief Administrative hearing officer (OCAHO) within the Executive Office for Immigration Review, was prosecuted by Erik Lang and Phil Telfeyan, OSC Trial Attorneys, based on an investigation conducted by Alexandra Vince, an OSC Equal Opportunity Specialist.
The Office of Special Counsel for Immigration Related Unfair Employment Practices is responsible for enforcing the anti-discrimination provision of the INA, which protects work authorized individuals against employment discrimination on the basis of citizenship status or national origin discrimination, including discrimination in hiring, firing and the employment eligibility verification (Form I-9) process. For more information about protections against employment discrimination under federal immigration law, call OSC’s worker hotline at 1-800-255-7688 (1-800-237-2515, TDD for hearing impaired) or OSC’s employer hotline at 1-800-255-8155 (1-800-237-2515, TDD for hearing impaired), e-mail [email protected] or visit OSC’s website at www.justice.gov/crt/about/osc .
High-Ranking Member of Mexican Gulf Cartel Extradited to the United States to Face Drug Conspiracy ChargesRead the Press Release
WASHINGTON – Aurelio Cano-Flores, aka “Yankee” and “Yeyo,” a high-ranking member of the Mexican Gulf Cartel, has been extradited to the United States from Mexico to face drug conspiracy charges, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and Administrator Michele M. Leonhart of the Drug Enforcement Administration (DEA).
Cano-Flores, 39, made his initial appearance today before U.S. Magistrate Judge John M. Facciola in the District of Columbia, after being extradited to the United States on Aug. 19, 2011. Cano-Flores was ordered detained in federal custody pending trial. Cano-Flores had been in the custody of Mexican authorities pending extradition since his arrest on June 10, 2009.
Cano-Flores was charged, along with 19 other defendants, in a superseding indictment returned on Nov. 4, 2010. He is charged with conspiracy to manufacture and distribute five kilograms or more of cocaine and 1,000 kilograms or more of marijuana for importation into the United States.
“As charged in the indictment, Cano-Flores led the Gulf Cartel’s drug trafficking activities in Camargo, Mexico,” said Assistant Attorney General Breuer. “Cano-Flores was allegedly responsible for ensuring that multi-ton quantities of cocaine, heroin and marijuana were shipped into the United States, and that the illegal drug proceeds were subsequently funneled back into Mexico. Together with our counterparts across the border, the Justice Department is committed to bringing cartel leaders and associates to justice for their crimes, and the violence and destruction they cause.”
“Today we have brought to a court of law Aurelio Cano-Flores, a major drug trafficker connected to the extreme violence of the Los Zetas and Gulf Cartels and who allegedly is responsible for transporting multi-ton quantities of drugs into the United States,” said DEA Administrator Leonhart. “This is part of a concerted, combined, and coordinated effort by Mexico and the United States to target the command and control of the drug trafficking cartels. This extradition is another example of our enduring commitment to bring to justice violent criminals who deny justice to others, and whose drugs are a threat to both our nations.”
According to court documents, Cano-Flores was a high-ranking member of the Gulf Cartel when it worked in close partnership with Los Zetas, collectively known as “The Company.” The Gulf Cartel allegedly transported shipments of cocaine and marijuana by motor vehicles from Mexico to cities in Texas for distribution to other cities within the United States. The indictment alleges that Cano-Flores, his co-defendants and others organized, directed, and carried out various acts of violence against Mexican law enforcement officers and rival drug traffickers to retaliate against and to intimidate anyone who interfered with, or who were perceived to potentially interfere with, the cocaine and marijuana trafficking activities of the Gulf Cartel.
According to the indictment, from June 2006 until his arrest, Cano-Flores’s role was to oversee drug trafficking activities in Camargo, Nuevo Leon, Mexico, including procuring for distribution significant quantities of cocaine, heroin and bulk marijuana. Cano-Flores also is alleged to have coordinated the movement of illegal narcotics from Mexico into the United States as well as the repatriation of drug proceeds into Mexico. The Gulf Cartel controls most of the cocaine and marijuana trafficking through the Matamoros, Mexico, corridor to the United States. Los Zetas began as the enforcement wing of the Gulf Cartel, but has emerged in recent years as an independent drug trafficking organization.
On April 15, 2009, under the Foreign Narcotics Kingpin Designation Act, the President identified Los Zetas as a Significant Foreign Narcotics Trafficker. On July 20, 2009, the U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) also identified the leadership of Los Zetas, Heriberto Lazcano-Lazcano and Miguel Angel Trevino Morales, as Significant Foreign Narcotics Traffickers. Both men are named as co-defendants in the indictment charging Cano-Flores. On July 25, 2011, an executive order was issued that blocks the transfer, payment or export of property belonging to certain transnational criminal organizations, including Los Zetas.
The department expressed its gratitude and appreciation to the government of Mexico for its cooperation and assistance in the apprehension and extradition of Cano-Flores.
An indictment is merely an allegation, and a defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
If convicted, Cano-Flores faces a mandatory minimum of 10 years in prison and a maximum penalty of life in prison.
The case is being prosecuted by trial attorneys from the Criminal Division’s Narcotic and Dangerous Drug Section. The Criminal Division’s Office of International Affairs provided significant assistance in the extradition. The investigation in this case was led by the DEA’s Houston Field Division and the DEA Bilateral Investigation Unit.
Department of Health and Human Services Employee Pleads Guilty to Theft of Government FundsRead the Press Release
WASHINGTON — An employee of the Department of Health and Human Services (HHS) pleaded guilty today in U.S. District Court in Asheville, N.C., to theft of approximately $114,494 in government funds, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division.
Jihan S. Cover, 33, of Arden, N.C., pleaded guilty before Magistrate Judge Dennis L. Howell in the Western District of North Carolina to a one-count criminal information charging her with theft of government property. According to the criminal information, filed Aug. 11, 2011, Cover has worked as a purchasing agent with the National Institutes of Health (NIH), National Cancer Institute (NCI), a subdivision of HHS, from 2006 through the present. Cover’s sole job function involved procuring authorized items and services for NIH/NCI using assigned government credit cards or purchase cards.
According to court documents, between June 2009 and December 2010, Cover, who received regular training in the proper use of purchase cards, admitted using and causing to be used NIH/NCI purchase cards assigned to her in more than 250 unauthorized personal transactions totaling approximately $114,494.
According to the plea agreement, Cover used and caused the purchase cards to be used to make more than 170 personal purchases totaling approximately $16,000 from Amazon.com for toys, exercise equipment, books, clothes and other personal items. Almost all of these items were shipped to Cover’s residence in Arden. In addition, Cover admitted to using the purchase cards to pay off more than $29,000 in balances she accrued with various cash advance and payday loan vendors. Cover also made more than $47,000 in payments to personal accounts she created on PayPal, an online payment website.
In addition, Cover admitted that she tried to conceal her actions by submitting various dispute forms to the bank servicing her purchase cards, claiming that she did not recognize certain charges or did not authorize them, when in fact, she knowingly made or caused to be made the personal charges. During the guilty plea hearing, Cover admitted that in January and June 2011, she lied to investigators, claiming that she had reimbursed the personal transactions she made with her NIH/NCI purchase cards using her personal bank account, which in fact she knew she had not done. Previously, when confronted by her supervisor at NIH/NCI regarding suspicious transactions, Cover claimed falsely that she had been the victim of identity theft, when in fact she knew that she had caused the transactions.
At sentencing Cover faces up to 10 years in prison and a $250,000 fine. The government is also seeking forfeiture of $114,494. A sentencing date has not been set.
This case is being prosecuted by Trial Attorney Eric G. Olshan of the Criminal Division’s Public Integrity Section. This case was investigated by the HHS Office of Inspector General.
Friday 19 August 2011
Justice Department Opens Investigation into the Antelope Valley Stations of the Los Angeles County Sheriff’s DepartmentRead the Press Release
LOS ANGELES – The Justice Department has opened a civil investigation into allegations of discriminatory policing by Los Angeles County Sheriff’s Department (LASD) members based in the cities of Lancaster and Palmdale, Calif. The investigation will focus on allegations that the Lancaster and Palmdale stations of the LASD are engaged in a pattern or practice of discrimination on the basis of race or national origin in violation of the Violent Crime Control and Law Enforcement Act of 1994, and the anti-discrimination provisions of the Omnibus Crime Control and Safe Streets Act of 1968, Title VI of the Civil Rights Act of 1964 and the Fair Housing Act.
The Justice Department will seek to determine whether there are systemic violations of the Constitution or federal law, including the Fair Housing Act, by deputies of these LASD stations. The investigation will focus on allegations that the LASD has sought to identify during routine traffic stops individuals who use Housing Choice Vouchers, commonly known as Section 8, to subsidize housing costs for low income families. In addition, the investigation will examine allegations that t he LASD has conducted warrantless searches of African-American families’ homes under the auspices of housing authority compliance inspections, and that housing authority investigators based in the Lancaster and Palmdale sheriff’s stations have been accompanied by sheriff’s deputies as they conduct routine housing contract compliance checks. At times, it is alleged that the deputies approach the Section 8 recipient’s home with guns drawn and in full SWAT armor and conduct searches and questioning themselves, unrelated to the housing program.
In addition, the Justice Department has an ongoing investigation under the Fair Housing Act of the cities of Palmdale and Lancaster, as well as of the Housing Authority of the County of Los Angeles, to determine whether there has been a systematic effort to discriminate against African-Americans and Latinos.
During the course of the investigation of the LASD, the Justice Department will consider all relevant information, particularly the efforts that LASD has undertaken to ensure compliance with federal law. The Justice Department has taken similar steps involving a variety of state and local law enforcement agencies, both large and small, in jurisdictions such as New York, Ohio, New Jersey, Pennsylvania, the District of Columbia and Louisiana.
This matter is being investigated by attorneys from the Special Litigation Section and Housing and Civil Enforcement Section of the Department of Justice’s Civil Rights Division. The department welcomes any information from the community. If you have any comments or concerns, please feel free to contact the department at 1-877-218-5228 , or via email at [email protected].
Businessman Pleads Guilty in Utah to Tax ChargeRead the Press Release
WASHINGTON - Scott Robertson pleaded guilty before U.S. Magistrate Judge Brooke C. Wells in Salt Lake City to one count of making and subscribing a false tax return for 2003, the Department of Justice and the Internal Revenue Service (IRS) announced today.
According to the plea agreement, beginning in at least 2000 and continuing until at least 2007, Scott Robertson was the chief executive officer and co-owner of Infinia Healthcare LLC, which owned several long-term care facilities in Utah, Arizona, Kansas and Minnesota. During this same time period, Robertson had ownership interest in a number of other entities affiliated with Infinia Healthcare, including Robertson Properties-Two and Maryland Capital LLC.
According to the plea agreement, between 2003 and 2005, Robertson earned substantial income from Infinia Healthcare through unofficial, non-salary payments. Robertson filtered some of these payments through Maryland Capital LLC to his personal bank accounts and failed to accurately report this additional income to the IRS. He further admitted that he filed a false U.S. Individual Income Tax Return, Form 1040, for tax year 2003 with the IRS, knowing that the return substantially understated the total income he earned from Infinia Healthcare and its affiliates and substantially understated the tax due and owing for 2003. According to the plea agreement, Robertson agreed that the tax loss is more than $200,000 but less than $400,000.
Robertson faces a maximum sentence of three years in prison and a fine of $250,000.
This case was investigated by the IRS-Criminal Investigation in Salt Lake City and is being prosecuted by Justice Department Tax Division Trial Attorneys Monica B. Edelstein and Kimberly M. Shartar.
Additional information about the Justice Department’s Tax Division and its enforcement efforts may be found at www.usdoj.gov/tax.
Thursday 18 August 2011
Two Men Plead Guilty to Racially-Motivated Assault in New MexicoRead the Press Release
ALBUQUERQUE - Paul Beebe and Jesse Sanford of Farmington, N.M., pleaded guilty today in U.S. District Court in Albuquerque, N.M., to federal hate crime charges related to a racially-motivated assault on a 22-year-old developmentally disabled man of Navajo descent, the Department of Justice announced. A third defendant, William Hatch, of Fruitland, N.M., pleaded guilty in June 2011 to conspiracy to commit a federal hate crime.
Beebe, Hatch and Sanford were indicted by a federal grand jury in November, 2010 on one count of conspiracy and one count of violating the Matthew Shepard and James Byrd Jr. Hate Crimes Prevention Act (Shepard/Byrd Act). They were the first defendants ever to be charged under this law, which was enacted in October 2009. Beebe pleaded guilty to one count of violating the Shepard/Byrd Act, and Sanford pleaded guilty to one count of conspiracy to commit a violation of the Shepard/Byrd Act.
“Deplorable, hate-filled incidents like this one have no place in a civilized society,” said Assistant Attorney General for the Civil Rights Division Thomas Perez. “The Justice Department is committed to using all the tools in our law enforcement arsenal, including the Matthew Shepard and James Byrd Jr. Hate Crimes Prevention Act, to prosecute acts of hate.”
“ No one anywhere, but especially in a state like New Mexico that prides itself on its ethnic, racial and cultural diversity, should be victimized because of what he or she happens to be,” said U.S. Attorney for the District of New Mexico Kenneth J. Gonzales. “The young victim in this case was assaulted, branded and scarred because he happens to be a Native American – that simply is inexcusable and criminal. Today’s guilty pleas demonstrate the law enforcement community’s resolve to bring to justice anyone who victimizes a person because of the color of their skin or ethnic heritage.”
During the plea hearing, Beebe and Sanford admitted that Beebe took the victim to his apartment, which was adorned in racist paraphernalia, including a Nazi flag and a woven dream catcher with a swastika in it. After the victim had fallen asleep, the defendants began defacing the victim’s body by drawing on him with blue, red and black markers. Once the victim awoke, Beebe branded the victim, who sat with a towel in his mouth, by heating a wire hanger on a stove and burning the victim’s flesh, causing a permanent deep impression of a swastika in his skin. The defendants used a cell phone to create a recording of the victim in which they coerced him to agree to be branded.
The defendants also admitted that they defaced the victim’s body with white supremacist and anti-Native American symbols, including shaving a swastika in the back of the victim’s head and using markers to write the words “KKK” and “White Power” within the lines of the swastika. The defendants further mocked the victim’s heritage by drawing an ejaculating penis and testicles on the victim’s back, telling him that they were drawing his “native pride feathers,” all the while recording the incident on a cell phone to later play for law enforcement, as “proof” that the victim consented to their acts.
“As the primary federal agency responsible for investigating allegations regarding violations of federal civil rights statutes, the FBI stands committed to protecting the freedoms of all Americans,” said Carol K.O. Lee, Special Agent in Charge of the Albuquerque Division of the FBI. “We remain dedicated to working with our state and local partners to aggressively investigate hate crimes and other civil rights violations. I would like to commend the Civil Rights Division of the U.S. Department of Justice, U.S. Attorney Kenneth Gonzales, the San Juan County District Attorney’s Office and the Farmington Police Department for their work on this case. I also am proud of the FBI agents who investigated this crime and helped bring the defendants to justice.”
These guilty pleas were the result of a cooperative effort between U.S. Attorney’s Office for the District of New Mexico, the U.S. Department of Justice Civil Rights Division and the San Juan, N.M., County District Attorney’s Office. This case was investigated by the Albuquerque Division of the FBI in cooperation with the Farmington Police Department. It is being prosecuted by Assistant U.S. Attorney Roberto Ortega for the District of New Mexico and Special Litigation Counsel Gerard Hogan and Trial Attorney Fara Gold of the Civil Rights Division.