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Thursday 18 August 2011
Puerto Rican-based Shipping Company Sentenced to Pay $700,000 Penalty for Intentional Cover-Up of Oil PollutionRead the Press Release
WASHINGTON – Epps Shipping Company, a Liberian corporation doing business out of Carolina, Puerto Rico, was sentenced in federal court for violating the Act to Prevent Pollution from Ships (APPS) and making false statements to U.S. Coast Guard inspectors, announced Assistant Attorney General Ignacia S. Moreno and United States Attorney Rosa Emilia Rodriguez-Velez.
The company was sentenced to pay a $700,000 criminal penalty to include a $100,000 payment towards community service projects to rehabilitate and protect coral reefs in Guanica Bay, Puerto Rico. In addition, the company was placed on five years of supervised probation and will have to implement a comprehensive Environmental Compliance Plan to continuously monitor and evaluate pollution prevention from any ship it owns or operates.
“This sentence puts the international shipping industry on notice that there are serious consequences for violations of the Act to Prevent Pollution from Ships and making false statements to the United States Coast Guard,” said Ignacia S. Moreno, Assistant Attorney General of the Justice Department’s Environment and Natural Resources Division. “For its criminal violations of the law, Epps will pay a significant criminal penalty, serve five years of probation, institute an environmental compliance plan designed to prevent further violations, and will be subject to independent monitoring. Epps also will fund projects to protect coral reefs in Puerto Rico.”
Epps Shipping Company owned and controlled the M/V Carib Vision, a commercial ship that was engaged in the transportation of molasses throughout the Caribbean region. On Nov. 6, 2010, the U.S. Coast Guard conducted an inspection of the vessel in the port of San Juan, P.R. The Coast Guard learned from inspecting the engine room and interviewing crewmembers that the vessel’s Oil Water Separator and other pollution prevention equipment was inoperable and could not be used to treat the vessel’s oily waste prior to it being discharged overboard. The investigation revealed that prior to Nov. 6, 2010, the crew of the vessel used the emergency bilge discharge system to dump its oily waste directly overboard without first processing it through the ship’s pollution prevention equipment as required. All overboard discharges of oil or oily bilge wastewater are required to be recorded in the vessel’s Oil Record Book. None of these discharges were recorded in the Oil Record Book for the M/V Carib Vision.
“Today's sentence demonstrates the United States' steadfast commitment to safeguarding the marine environment,” said Rear Admiral William D. Baumgartner, Coast Guard Seventh District Commander. “We applaud the efforts of the many environmentally responsible companies, but will hold non-compliant corporations and their officers accountable for violating environmental laws. Coast Guard Sector San Juan investigators and the Coast Guard Investigative Service (CGIS) did a great job investigating and preparing this case. I am grateful for the hard work and dedication of the Department of Justice for bringing this case to a proper resolution.”
During the period of probation, Epps Shipping Company will be required to implement a comprehensive Environmental Compliance Plan (ECP) which will ensure that any ship owned or operated by Epps complies with all maritime environmental requirements established under applicable international, flag state, and port state laws. The ECP ensures that Epps’ employees and the crew of any vessel owned or operated by Epps are properly trained in preventing maritime pollution. An independent monitor will report to the court about Epps’ compliance with its obligations during the period of probation.
This case was investigated by the U.S. Coast Guard. The case was prosecuted by Marshal Morgan in the U.S. Attorney's Office in the District of Puerto Rico and by Ken Nelson in the Environmental Crimes Section of the Environment and Natural Resources Division of the Department of Justice.
Pittsburgh Crips Member and Associate Plead Guilty for Roles in Illegal Gang ActivityRead the Press Release
WASHINGTON - A Crips gang member and associate each pleaded guilty today in federal court in Pittsburgh to racketeering charges, announced Assistant Attorney General Lanny A. Breuer of the Justice Department's Criminal Division and U.S. Attorney David J. Hickton of the Western District of Pennsylvania.
Jamar Pharr, 27, of Pittsburgh, aka "Brownway," pleaded guilty to one count of conspiracy to engage in a racketeering enterprise before Senior U.S. District Judge Gustave Diamond in the Western District of Pennsylvania. Devon Shealey, 25, of Pittsburgh, pleaded guilty before Judge Diamond to one count of violence in aid of racketeering (VICAR).
In addition, yesterday Karl Anger, 22, aka "K-Loc," was sentenced by Judge Diamond to 58 months in prison for conspiracy to participate in a racketeering enterprise, consecutive to 72 months he is currently serving on a state court conviction for an aggravated assault shooting, for a total of 130 months in prison. The shooting was also charged in the federal indictment as part of the racketeering conspiracy. Anger pleaded guilty on Jan. 19, 2011, to the federal racketeering conspiracy charge.
According to court documents, members and associates of the gang participated in a pattern of racketeering activity that included robberies at gun point; attempted murders; distribution of heroin and crack cocaine; obstruction of justice and witness intimidation. The three defendants were members or associates of different gangs in the Northside area of Pittsburgh that formed an alliance in 2003 to expand the gang's drug trafficking territory and increase the gang's membership to better protect their territory and profits. Members of the gang, known as the Brighton Place/Northview Heights Crips, maintained exclusive control over drug trafficking in these neighborhoods through continuous violence and intimidation of rivals and witnesses. Gang members supported each other through payment of attorneys' fees and bonds, as well as payments to jail commissary accounts and support payments to incarcerated members' families.
Gang members had 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, Pharr was considered a respected member and leader in the enterprise. Pharr had a reputation for violence, and instructed other members and associates of the enterprise as to how to conduct the affairs of the enterprise, including how to possess and distribute firearms and controlled substances, and how to commit acts of violence and witness intimidation. Pharr also distributed controlled substances, including heroin.
According to Shealey's plea agreement, he was involved in shooting at a member of the Manchester OGs, in an effort to gain entry in the Crips gang. According to information presented at sentencing, Anger obstructed justice when he tried to convince the victim in his assault case not to testify.
At sentencing, Pharr and Shealey each face maximum prison sentences of 20 years. According to Shealey's plea agreement, his prison sentence on the VICAR charge to which he pleaded guilty will run concurrently with the 34 to 68 year sentence he is currently serving as a result of prior convictions for armed robbery, gun possession and witness intimidation Shealey is scheduled to be sentenced on Oct. 19, 2011, at 11:00 a.m., and Pharr on Dec. 15, 2011, at 10:00 a.m.
Pharr, Shealey and Anger are three of 26 defendants charged in February 2010 with being members or associates 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. To date, 23 members or associates of the Brighton Place/ Northview Heights Crips who were charged in this indictment have pleaded guilty to racketeering charges.
This case is being prosecuted by Assistant U.S. Attorneys Charles A. Eberle and Troy Rivetti 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.
Maryland Man Sentenced to 30 Months in Prison for Importing and Selling Counterfeit Cisco Computer Networking EquipmentRead the Press Release
WASHINGTON – Donald H. Cone, 48, of Frederick, Md., was sentenced today in Alexandria, Va., to 30 months in prison for his role in a sophisticated conspiracy to import and sell counterfeit Cisco-branded computer networking equipment, announced U.S. Attorney Neil H. MacBride for the Eastern District of Virginia and Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division.
U.S. District Court Judge Gerald Bruce Lee also ordered Cone to pay $143,300 in restitution and to serve three years of supervised release following his prison term. A federal jury convicted Cone and a co-conspirator, Chun-Yu Zhao of Chantilly, Va., in May 2011 after a three-week trial. Zhao will be sentenced on Sept. 9, 2011.
According to the evidence introduced at trial, Zhao, Cone and Zhao’s family members in China operated a large-scale counterfeit computer networking equipment business under the names of JDC Networking Inc. and Han Tong Technology (Hong Kong) Limited. JDC Networking Inc., located in Virginia, altered Cisco products by using pirated software, and created labels and packaging in order to mislead consumers into believing the products it sold were genuine Cisco products. To evade detection, Zhao used various names and addresses in importation documents, and hid millions of dollars of counterfeit proceeds through a web of bank accounts and real estate held in the names of family members in China.
The case was investigated by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations’ Washington, D.C., office, as well as the Office of the Inspector General from the General Services Administration. U.S. Customs and Border Protection made a criminal referral to ICE after intercepting counterfeit products from China destined for addresses associated with Cone, Zhao and JDC Networking Inc.
The case was prosecuted by Assistant U.S. Attorneys Jay Prabhu and Lindsay Kelly from the Eastern District of Virginia, and Senior Counsel Michael Stawasz from the Computer Crime and Intellectual Property Section in the Justice Department’s Criminal Division.
The sentencing announced today is an example of the type of efforts being undertaken by the Department of Justice Task Force on Intellectual Property (IP Task Force). Attorney General Eric Holder created the IP Task Force to combat the growing number of domestic and international intellectual property crimes, protect the health and safety of American consumers, and safeguard the nation’s economic security against those who seek to profit illegally from American creativity, innovation and hard work. The IP Task Force seeks to strengthen intellectual property rights protection through heightened criminal and civil enforcement, greater coordination among federal, state and local law enforcement partners, and increased focus on international enforcement efforts, including reinforcing relationships with key foreign partners and U.S. industry leaders. To learn more about the IP Task Force, go to www.justice.gov/dag/iptaskforce/ .
Justice Department Announces Agreement to Protect Prisoners from Life-threatening Conditions at Erie County, New York, FacilitiesRead the Press Release
WASHINGTON– The Justice Department announced today that it has filed a stipulated order of dismissal to resolve its lawsuit concerning conditions of confinement at the Erie County Holding Center (ECHC), a pre-trial detention center in Buffalo, N.Y., and the Erie County Correctional Facility (ECCF), a correctional facility in Alden, N.Y. The lawsuit, which the department filed on Sept. 30, 2009, in federal court in the Western District of New York, alleged that conditions at the facilities routinely and systemically deprive prisoners of constitutional rights through inadequate medical and mental health care, failures to protect prisoners from harm, and deficiencies in environmental health and safety.
“As the Supreme Court confirmed over 35 years ago, ‘There is no iron curtain drawn between the Constitution and the prisons of this country,’” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The relief that we have obtained through this agreement will ensure that prisoners in Erie County are no longer denied the basic constitutional rights that humanity affords to them. This agreement follows on the heels of last year’s settlement on suicide prevention to reverse the tide of years of neglect and harm at the Erie County facilities.”
“This is a historic agreement. As a result of the government’s lawsuit, the county of Erie will be making broad and significant changes that will ensure the prisoners at ECHC and ECCF will be afforded their rights under the Constitution, such as comprehensive mental health care and medical care and protection from harm,” said William J. Hochul, Jr., U.S. Attorney for the Western District of New York.
On June 22, 2010, the department resolved a portion of its lawsuit against Erie County regarding suicide prevention and related mental health care following a series of suicides that occurred after the United States filed suit. However, individuals with mental illness continued to suffer as a result of lack of appropriate treatment in ECHC and ECCF, and were also subjected to excessive uses of force by staff. The stipulated order entered by the court today requires Erie County to implement a comprehensive mental health program for its prisoners, including:
Screening and assessment of individuals by qualified mental health professionals within designated time periods;
Referral of individuals with mental health issues for treatment within designated time periods on an emergent, urgent or routine basis;
Provision of clinically appropriate mental health treatment at outpatient, residential and crisis levels of care; and
Implementation of medication administration policies to ensure that psychotropic medications are prescribed and delivered in a timely and clinically appropriate manner.
In order to implement this comprehensive mental health treatment program, Erie County has increased the number of mental health staff at its facilities. This stipulated order, coupled with the June 2010, stipulated settlement agreement, will afford individuals held at ECHC and ECCF with appropriate mental health care.
Erie County also has agreed to enhance its provision of medical care at the facilities, including maintaining complete and unified medical and mental health records at the location where each prisoner is actually housed, in order to ensure continuity of treatment and care. Erie County will also establish quality assurance reviews for its medical and mental health treatment programs to analyze and correct trends that present risk of harm to prisoners.
The stipulated order also includes comprehensive provisions aimed at addressing sexual abuse at ECHC and ECCF by changing the way the county investigates allegations of sexual abuse by prisoners and staff, including appointing a sexual abuse coordinator within the facilities, offering counseling services for victims of sexual abuse, and increasing training and awareness on prison rape and sexual violence. Additionally, the stipulated order includes provisions to ensure proper investigation of allegations of violence and excessive force.
Independent consultants will monitor compliance with the medical and mental health provisions of the stipulated order and the previously ordered suicide prevention settlement. The c ourt will retain the ability to enforce the terms of both settlements.
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 .
Former Owner of New York City Garment Assembly Company Pleads Guilty for Failing to Pay Employment TaxesRead the Press Release
WASHINGTON – David Chui, a resident of Queens, N.Y., pleaded guilty to failing to pay employment taxes in connection with his former ownership of a garment assembly business, the Justice Department and Internal Revenue Service (IRS) announced today.
According to the plea agreement and criminal information, from at least 2005 through 2008, Chui owned and operated New Shanghai Fashions, a garment assembler in Manhattan. Between the fourth quarter of 2005 and continuing through at least the third quarter of 2008, Chui did not collect, truthfully account for, and pay over employment taxes of nearly $220,000 from his employees’ wages. In addition, the plea agreement requires Chui to pay restitution to the IRS in the amount of $439,918.61, which encompasses both the employment taxes that he failed to withhold from his employees and his obligation, as an employer, to pay over a matching portion of those employment taxes.
Chui faces a maximum sentence of five years in prison, a maximum of three years supervised release and a fine of up to $250,000.
This case was investigated by IRS-Criminal Investigation and is being prosecuted by the U.S. Attorney’s Office for the Southern District of New York Complex Frauds Unit. Special Assistant U.S. Attorney and Department of Justice Tax Division Trial Attorney Tino M. Lisella is in charge of the prosecution.
Sentencing is tentatively scheduled for Nov. 18, 2011.
Wednesday 17 August 2011
U.S. Files Lawsuit Against Bollinger Shipyards for Material False Statements Made to the Coast GuardRead the Press Release
WASHINGTON - The United States has filed suit in U.S. District Court in Washington, D.C., against Bollinger Shipyards Inc., Bollinger Shipyards Lockport LLC and Halter Bollinger Joint Venture LLC, the Justice Department announced. The suit alleges that Bollinger, which is headquartered in Lockport, La., made material false statements to the Coast Guard under the Deepwater Program.
The government’s complaint alleges that Bollinger proposed to convert existing 110-Ft Patrol Boats (WPBs) into 123-Ft WPBs by extending the hulls 13 feet and making additional improvements. As a result of Bollinger’s misrepresentations about the hull strength of the converted vessels, the Coast Guard awarded a contract to convert eight Coast Guard 110 foot cutters to 123 foot cutters. The first converted cutter, the Matagorda, suffered hull failure when put into service. An investigation by the Coast Guard and the prime contractor, Integrated Coast Guard Systems, concluded that the calculation of hull strength reported by Bollinger to the Coast Guard prior to the conversion was false. Efforts to repair the Matagorda and the other converted vessels were unsuccessful. The cutters are unseaworthy and have been taken out of service.
“Companies which make false statements to win Coast Guard contracts do a disservice to the men and women securing our borders,” said Tony West, Assistant Attorney General for the Civil Division of the Department of Justice. “We will take action against those who undermine the integrity of the public contracting process by providing substandard equipment to our armed services personnel.”
The government’s suit seeks damages from Bollinger under the False Claims Act for the loss of the eight now unseaworthy vessels. The investigation of the case was conducted by the Department of Justice Civil Division, the Department of Homeland Security Office of the Inspector General and the Coast Guard.
Ohio Wildlife Officer Charged with Lacey Act CrimesRead the Press Release
WASHINGTON – A federal grand jury in Cincinnati, Ohio, returned a four-count indictment today, charging Allan Wright, 45, of Russellville, Ohio, with trafficking in and making false records for illegally harvested white-tailed deer (Odocoileus virginianus) in violation of the Lacey Act. Wright is employed as a wildlife officer for the Ohio Department of Natural Resources, Division of Wildlife.
Among other things, the Lacey Act makes it a crime for a person to knowingly transport or sell wildlife in interstate commerce when the wildlife was taken or possessed in violation of state law. The Lacey Act also makes it a crime for a person to knowingly make or submit a false record, account or label for wildlife which has been transported in interstate commerce.
The indictment charges that Wright knowingly sold and provided an Ohio resident hunting license to a South Carolina resident during the 2006 white-tailed deer season. According to the indictment, Wright falsely entered an Ohio address for the hunter in order to obtain a resident license. Ohio law makes it a crime to procure a hunting license by fraud, deceit, misrepresentation or any false statement. Ohio law also makes it a crime to hunt without a valid hunting license. The indictment charges that the hunter killed three white-tailed deer using the illegal license. Wright personally “checked in” the three deer, again providing the fraudulent Ohio address. The hunter then transported the deer back to South Carolina.
The indictment also alleges that Wright, using his authority as a wildlife officer, seized white-tailed deer antlers from a hunter who had killed a deer illegally during the 2009 white-tailed deer season. The indictment alleges that, rather than dispose of the antlers through court proceedings, Wright caused the antlers to be transported to another individual in Michigan. The indictment charges that Wright then filed an official state form which falsely reported that he had personally destroyed the antlers.
Two of the four counts charged in the indictment are felonies punishable by up to five years in prison and a $250,000 fine per count. The remaining two counts are misdemeanors punishable by up to one year in prison and a $100,000 fine per count.
An indictment is merely an accusation and a defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
The case is being investigated by the U.S. Fish & Wildlife Service, Office of Law Enforcement. The case is being prosecuted by Trial Attorney James B. Nelson of the Department of Justice’s Environmental Crimes Section of the Environment and Natural Resources Division.
Justice Department Requires Divestitures in Order for Regal Beloit Corporation to Proceed with Its Acquisition of A.O. Smith Corporation’s Electric Motor BusinessRead the Press Release
WASHINGTON – The Department of Justice announced today that it has reached a settlement that will require Regal Beloit Corporation (RBC) to divest its U.S. business for electric motors for pool and spa pumps to SNTech Inc. and to divest A.O. Smith Corporation’s (AOS) development work and related assets for draft inducers for high-efficiency furnaces to Revcor Inc., in order to proceed with RBC’s acquisition of AOS’s electric motor business. The department said that without the divestitures the acquisition would lead to higher prices, lower quality products, less customer service and less innovation in each of these markets.
The department said that the acquisition, as originally proposed, would combine two of the three leading suppliers of electric motors for pool and spa pumps in the United States. The acquisition also would have eliminated the most likely entrant into the market for draft inducers for furnaces with a thermal efficiency of 90 percent or greater (90+ draft inducers), a market in which RBC has a near monopoly.
The Department of Justice’s Antitrust Division filed a civil antitrust lawsuit today in U.S. District Court for the District of Columbia to block the proposed acquisition. 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 acquisition as originally proposed would have lessened the vigorous competition that currently exists among manufacturers of electric motors for pool and spa pumps resulting in higher prices and lower quality products,” said Sharis A. Pozen, Acting Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. “The acquisition also would have eliminated the firm best positioned to challenge Regal Beloit Corporation’s dominance in the market for draft inducers for high-efficiency furnaces.”
The department’s complaint alleges that the proposed acquisition would eliminate the significant competition between RBC and AOS in the already highly concentrated markets for electric motors for pool and spa pumps in the United States. The complaint also alleges that the proposed acquisition would eliminate the potential competition from AOS in the 90+ draft inducer market, in which RBC has a near monopoly.
The proposed settlement requires RBC to divest the assets used to design, manufacture and sell RBC motors used in pool and spa pump applications. The department has concluded that SNTech will integrate the divestiture assets into its current operations to create a viable competitor in the markets for electric motors for pool and spa pumps. The proposed settlement also requires that RBC divest the assets necessary to continue the design and development of AOS’s 90+ draft inducers. The department concluded that Revcor will integrate the divestiture assets into its current operations and replace the potential competition lost by RBC’s acquisition of AOS’s electric motor business. The divestitures to SNTech and Revcor will remedy the competitive concerns alleged in the complaint.
Electric motors sold for use in pool and spa pumps must be uniquely engineered and assembled to meet the size and performance specifications of the individual pump. In addition to size and energy efficiency, specification variables include the capacity of the impeller, speed, current/voltage, whether the motor is operated continually or sporadically, and whether the pump has more than one speed of operation.
Furnace draft inducers are specialized blowers for the movement of air and the expulsion of hot combustion gases produced by gas-fired furnaces. They perform an important safety function by extracting harmful combustion gases and venting those gases outside. Furnaces are classified according to their thermal efficiency, which is the percentage of energy used to heat the air and that is not lost with the vented combustion gases. Draft inducers are designed for the specific thermal efficiency of each furnace. More modern furnaces with higher thermal efficiency, typically referred to as 90 percent thermal efficiency or 90+, use draft inducers based on more advanced technology.
RBC, headquartered in Beloit, Wis., manufactures mechanical and electrical motion control and power generation products. RBC had revenues of approximately $2.2 billion in 2010.
AOS, headquartered in Milwaukee, is made up of two operating units: the water products business and the electric motor business. AOS is one of North America’s largest manufacturers of electric motors for residential and commercial applications. In 2010, AOS had revenues of approximately $1.5 billion, with approximately $700 million of that amount from electric motors and related products.
SNTech, headquartered in Phoenix, manufactures low-cost smart electric motors used in air moving applications.
Revcor, headquartered in Carpentersville, Ill., manufactures air moving products, including blowers and fans.
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.
Four Individuals Convicted in $4.7 Million Louisiana Medicare Fraud SchemeRead the Press Release
WASHINGTON – The owner of a Baton Rouge, La., durable medical equipment (DME) company, a medical doctor and two patient recruiters were each convicted late yesterday for their roles in a $4.7 million Medicare fraud scheme, announced the Department of Justice, the FBI, the Department of Health and Human Services and the Medicaid Fraud Control Unit (MFCU) of the Louisiana State Attorney General’s Office.
After a two-week trial, Nnanta Felix Ngari, Dr. Sofjan Lamid, Henry Lamont Jones and Ernest Payne were each convicted by a federal jury in the Middle District of Louisiana of one count of conspiracy to commit health care fraud and one count of conspiracy to defraud the United States and to pay and receive illegal health care kickbacks.
Ngari owned and operated Unique Medical Solution Inc., a Baton Rouge-area DME supplier that specialized in the provision of power wheelchairs to Medicare beneficiaries. Evidence at trial established that beginning in late 2003, Ngari paid recruiters, including Jones and Payne, to locate and solicit Medicare beneficiaries to attend “health fairs” hosted by Jones and Payne at churches and other locations. At the health fairs, doctors, including Dr. Lamid, prescribed the beneficiaries power wheelchairs that were medically unnecessary. The prescriptions were used by Ngari to submit false and fraudulent claims, on behalf of Unique, to Medicare. According to information presented at trial, the doctors, including Dr. Lamid, were paid illegal kickbacks by Payne and Jones based on the number of power wheelchair prescriptions generated at the health fairs. Jones and Payne were also paid kickbacks by Ngari on a per prescription basis.
Between 2003 and 2009, Unique submitted approximately $4.7 million in claims to Medicare for purported services. Medicare paid Unique approximately $2.5 million for these claims.
A sentencing date has not yet been scheduled. Both conspiracy counts carry a maximum penalty of 10 years in prison and a $250,000 fine.
The verdicts were announced by Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney Donald J. Cazayoux Jr. of the Middle District of Louisiana; Mike Fields, Special Agent-in-Charge of HHS-Office of Inspector General (OIG) Dallas regional office; David Welker, Special Agent-in-Charge of the FBI’s New Orleans Division; and Louisiana State Attorney General James Buddy Caldwell.
The case was prosecuted by Trial Attorneys Ben Curtis and David Maria of the Criminal Division’s Fraud Section. The case was investigated by the FBI, HHS-OIG and MFCU of the Louisiana State Attorney General’s Office. The case was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Middle District of Louisiana.
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 .
Former Worth County Sheriff Pleads Guilty to Violating the Civil Rights of Eight Women in MissouriRead the Press Release
WASHINGTON – The Department of Justice announced today that Neal Wayne “Bear” Groom, former sheriff of the Worth County, Mo., Sheriff’s Office, pleaded guilty to depriving eight Missouri women of their civil rights by coercing the women to expose parts of their bodies to him, which was in violation of the Fourth Amendment prohibition against unreasonable seizures .
As part of the plea, Groom admitted that while he was sheriff of Worth County, he coerced the women into exposing unclothed parts of their bodies to him and that he photographed some of the women, which in some cases included their exposed breasts. Groom used the guise of checking the women for injuries or evidence of drug injections to coerce the women into revealing different parts of their bodies to him. By pleading guilty, Groom admitted that he invaded the personal privacy of the victims by coercing them to expose their breasts to him for no legitimate law enforcement purpose.
Groom faces a maximum punishment of 12 months in prison and a potential fine of up to $100,000 for each of the eight counts.
“Such egregious misconduct by those entrusted to uphold our laws will not be tolerated,” stated Assistant Attorney General for the Civil Rights Division Thomas E. Perez. “The Department of Justice will continue to vigorously prosecute these cases.”
“Law enforcement officials are not above the law,” said U.S. Attorney for the Western District of Missouri Beth Phillips. “When they abuse their authority by violating the civil rights of the citizens they are sworn to protect, they will be held accountable.”
This case was investigated by the FBI and the Missouri State Highway Patrol, and is being prosecuted by Assistant U.S. Attorney David M. Ketchmark from the U.S. Attorney’s Office and Trial Attorney Shan Patel from the Civil Rights Division of the Department of Justice.
Tuesday 16 August 2011
Three Fishermen, Seafood Wholesaler and Associated Employees Indicted for Obstruction of Justice and the Illegal Harvest and Sale of New Jersey OystersRead the Press Release
WASHINGTON – A 15-count indictment returned by a federal grand jury in Camden, N.J., was unsealed today following the arrest of six individuals from New Jersey and Maryland, and the seizure or restraint of 10 oyster fishing boats in New Jersey, announced Ignacia S. Moreno, Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division, and Paul J. Fishman, U.S. Attorney for the District of New Jersey.
The indictment charges the six individuals and two related companies with creating false reports and records of harvested oysters, trafficking in illegally harvested oysters, obstruction of justice, and charges five of the individuals and the two companies with conspiracy to commit those crimes.
The individuals charged were Thomas Reeves, Todd Reeves, and Renee Reeves, of Port Norris, N.J.; Kenneth W. Bailey of Heislerville, N.J.; Mark Bryan of New Market, Md.; and Pamela Meloney of Secretary, Md. The charged businesses are Reeves Brothers in Port Norris, N.J., which is owned and operated by Thomas and Todd Reeves and Harbor House Seafood in Seaford, Del., which is co-owned by Mark Bryan.
According to the indictment, from 2004 through 2007, Thomas and Todd Reeves were oyster fishermen who owned the oyster dealer business Reeves Brothers where Renee Reeves worked. The Reeves would create reports and records required by state and federal law that claimed they harvested fewer oysters than they actually did, and they would take more oysters from the Delaware Bay than they were allowed under New Jersey law. The fair market retail value of the Reeves’ illegal harvest during this time was well in excess of $600,000, and they over-harvested their quota in some years by as much as 90 percent.
Also alleged in the indictment, to help hide their illegal harvest, the Reeves, and Mark Bryan and Pamela Meloney at Harbor House, would create and maintain records that falsely indicated the amount of oysters the Reeves actually sold to Harbor House. To help prevent the discovery of their actions, Bryan and Meloney provided to law enforcement officers investigating the matter records of Harbor House’s purchases from the Reeves that Bryan and Meloney knew were false.
The indictment alleges that Bryan and Meloney created false records of Harbor House’s purchases from another Port Norris area oyster fisherman, Kenneth W. Bailey. Like the Reeves, in 2006 and 2007, Bailey would create reports and records required by state and federal law that claimed he harvested fewer oysters than he actually did, and he would take more oysters from the Delaware Bay than allowed under New Jersey law.
The indictment identifies 10 vessels that were used by the Reeves and/or Bailey to engage in their illegal harvest, and that are therefore subject to forfeiture to the United States upon a conviction of some of the offenses charged in the indictment. To ensure that the vessels are available for forfeiture in the same condition that they presently are, five of these vessels (the Janet R, Amanda Laurnen, Miss Lill, Crab Daddy and Conch Emperor) were seized by the U.S. Marshals. The other five vessels (the Martha Meerwald, Louise Ockers, Linda W, Turkey Jack and Beverly Ray Bailey) have been made subject to a restraining order that prohibits their use or operation pending the outcome of the trial.
An indictment is merely an accusation, and a defendant is presumed innocent unless and until proven guilty in a court of law.
The maximum penalty for five of the obstruction of justice counts is up to 20 years in prison and a $250,000 fine, for the individuals. The maximum penalty for each of the remaining violations by the individuals includes up to five years in prison and a $250,000 fine. The maximum penalty for the corporations is up to five years of probation and a fine in an amount that is the greater of $500,000 or twice the gross gain, for each count.
The case was investigated by the National Oceanic and Atmospheric Administration, Office of Law Enforcement, and The New Jersey Department of Environmental Protection, Division of Fish and Wildlife. The case is being prosecuted by Wayne D. Hettenbach of the Environmental Crimes Section of the Justice Department’s Environment and Natural Resources Division, and Assistant U.S. Attorney Matthew T. Smith of the U.S. Attorney’s Office for the District of New Jersey.
Retired Army Colonel Sentenced to 12 Months in Prison for Bribery Scheme Involving Department of Defense Contracts in IraqRead the Press Release
WASHINGTON — A retired colonel in the U.S. Army was sentenced today to 12 months in prison for her role in a scheme to pay bribes for contracts awarded in support of the Iraq war, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division.
Levonda J. Selph, 57, was sentenced by U.S. District Judge Reggie B. Walton of the District of Columbia. In addition to her prison term, Selph was sentenced to three years of supervised release and was ordered to pay a $5,000 fine and $9,000 in restitution.
Selph pleaded guilty in June 2008 to an information charging her with one count of bribery and one count of conspiracy. According to the information, in 2005, then-Lt. Colonel Selph served as chair of a selection board for a $12 million contract to build and operate several Department of Defense warehouses in Iraq. Selph accepted fraudulent bids from a co-conspirator contracting firm, and helped that firm to win the contract award. In return for these actions, Selph accepted a vacation to Thailand and other things of value totaling approximately $9,000.
This case is being prosecuted by Trial Attorney Richard B. Evans of the Criminal Division’s Public Integrity Section and Trial Attorneys Mark W. Pletcher and Emily W. Allen of the Criminal Division’s Fraud Section and the Antitrust Division.
The case is being investigated by special agents of the Army Criminal Investigation Command; Defense Criminal Investigative Service; the Special Inspector General for Iraq Reconstruction; U.S. Immigration and Customs Enforcement’s Homeland Security Investigations; and the FBI Washington Field Office.
Phoenix Telemarketing Duo Indicted in Conspiracy Case Involving 25 Counts of Mail and Wire FraudRead the Press Release
SEARCH THE SITE August 16, 2011PHOENIX – Two people have been charged in a 26-count indictment with 15 counts of mail fraud, 10 counts of wire fraud and one count of conspiracy in connection with a fraud scheme involving an Arizona business entity known as The Results Group (TRG). Edward Longoria, 41 of Laguna Beach, Calif., and Amber Halvorson, 34, of Phoenix, self-surrendered to the U.S. Marshals Service on August 12, 2011.
According to the indictment, between June 2004 and November 2006, Longoria and Halvorson owned and operated TRG, through which they deceptively sold Internet-based business opportunities to victims throughout the United States. Victims paid TRG between $99 and $599 to design and build websites "affiliated" with online retail companies such as amazon.com, overstock.com and gambling-related websites. Victims were told they would receive commissions from the retailers when consumers purchased products through the victims' website.
The indictment alleges that the defendants misrepresented to victims they were likely to earn a substantial income, in some instances upwards of $50,000 per month, with little risk. Victims were also promised assistance from TRG "marketing coaches" and a money-back, satisfaction guarantee. Additionally, TRG contacted victims after the initial sale of the website, soliciting $1,000 to $10,000 for fraudulent advertising programs. Victims were led to believe that purchasing the advertisement would make their businesses more profitable. It is estimated that there are several thousand victims with losses exceeding $20 million.
Each wire and mail fraud count carries a potential sentence of 30 years in prison, because this case involves allegations of telemarketing fraud, and a potential fine of $250,000. The maximum penalty for the conspiracy count is five years and a $250,000 fine.
Potential victims of this scheme may track the progress of the case by visiting the following link located on the U.S. Attorney for the District of Arizona's website: http://www.justice.gov/usao/az/us_v_longoria_etal.html. Potential victims may also leave a voice message at 602-514-7679; calls will be returned by a victim witness specialist in the order in which they are received.
An indictment is simply the method by which a person is charged with criminal activity and raises no inference of guilt. An individual is presumed innocent until competent evidence is presented to a jury that establishes guilt beyond a reasonable doubt.
The investigation preceding the indictment was conducted the U.S. Postal Inspection Service. The prosecution is being handled by Peter Sexton and Dominic Lanza, Assistant U.S. Attorneys, District of Arizona, Phoenix.
CASE NUMBER: CR-11-1565-PHX (DGC)
RELEASE NUMBER: 2011-178(Longoria et al)Help us combat the proliferation of sexual exploitation crimes against children.
Justice Department Signs Agreement to Ensure Civic Access for People with Disabilities in MarylandRead the Press Release
WASHINGTON - The Justice Department today announced an agreement with Montgomery County, Md., and Maryland National Capital Park and Planning Commission (MNCPPC), to improve access to all aspects of civic life for persons with disabilities. The agreement was reached under Project Civic Access (PCA), the department’s wide-ranging initiative to ensure that cities, towns and counties throughout the country comply with the Americans with Disabilities Act (ADA).
“Access to public programs and facilities is a civil right, and individuals with disabilities must have the opportunity to participate in local government programs, services and activities on an equal basis with their neighbors,” said Roy L. Austin Jr., Deputy Assistant Attorney General for the Civil Rights Division . “Montgomery County has made significant progress towards achieving ADA compliance, and this agreement sets out a realistic plan for the county to accomplish its goal. Maryland National Capital Park and Planning Commission officials will be evaluating all of its parks for ADA compliance. I commend county and park officials for working with the Justice Department to provide equal access to all of its programs, services, and activities.”
As part of the PCA initiative, Justice Department investigators, attorneys and architects survey state and local government facilities, services and programs in communities across the country to identify the modifications needed for compliance with ADA requirements. Based on these surveys, agreements are tailored to address the steps each community must take to improve access. This agreement is the 194th under the PCA initiative.
Under the agreement announced today, Montgomery County and MNCPPC will take important steps to improve access to county programs for individuals with disabilities, such as:
Making physical modifications to facilities surveyed by the department so that parking, routes to buildings, entrances, service areas and counters, restrooms, public telephones and drinking fountains are accessible to persons with disabilities;
Implementing plans to survey all other county and MNCPPC facilities and programs and to make modifications wherever necessary to achieve full compliance with the ADA;
Providing effective communication;
Ensuring that county programs for victims of domestic violence and abuse are accessible to persons with disabilities;
Posting, publishing and distributing a notice to inform members of the public of the provisions of Title II and their applicability to the county’s programs, services and activities;
Administering a grievance procedure for resolving complaints of violations of Title II of the ADA;
Planning and preparing emergency management procedures to include individuals with disabilities, including emergency preparedness, notification, evacuation, sheltering, response, clean up and recovery, and making modifications to ensure equal and integrated access;
Ensuring that the county’s official website and other web-based services are accessible to people with disabilities; and
Implementing a comprehensive plan to improve the accessibility of the county’s sidewalks and pedestrian crossings by installing accessible curb ramps throughout Montgomery County.
Montgomery County was founded in 1776. Rolling land and small hills make up most of the county’s 497 square miles, with 15 square miles of water, including rivers, streams, lakes and reservoirs and 28,435 acres of parkland. Montgomery County is now the most populous county in the state of Maryland. According to census data, more than 107,000 Montgomery County residents have a disability. MNCPPC operates more than 53,000 acres of parkland, offering a variety of facilities, recreation and sporting fields. Their facilities include nature centers, conference centers and community centers. Historic sites, recreation buildings and group picnic areas are also found on the parkland.
Today’s agreement was reached under Title II of the ADA, which prohibits discrimination against individuals with disabilities by state and local governments. The agreement will remain in effect for six years from Aug. 16, 2011. The department will actively monitor compliance with the agreement until all required actions have been completed.
For more information on the PCA initiative or the ADA Best Practices Tool Kit for State and Local Governments, please visit the ADA website at www.ada.gov or call the toll-free ADA Information Line at 800-514-0301 or 800-514-0383 (TTY). People interested in finding out more about today’s agreement with Montgomery County and MNCPPC, please visit www.ada.gov/montgomery_co_pca/montgomery_co_sa.htm .
Justice Department Seeks to Require Iowa Construction Company<br /> to Pay Employment Taxes It Withholds from Employees’ WagesRead the Press Release
WASHINGTON - The United States has filed a lawsuit in an Iowa federal court against a Des Moines, Iowa, metro area company, Advanced Underground Construction LLC and its principal, William David Ward II, the Justice Department announced today. The civil injunction suit asks the court to stop the defendants’ alleged repeated failures to pay to the U.S. employment taxes that are withheld from employees’ wages.
The government complaint alleges that between the third quarter of 2004 and the present date, the defendants repeatedly failed to make required employment tax deposits to the United States for nine quarters, instead using taxes withheld from employees’ wages as working capital, a practice sometimes referred to as “pyramiding.” The government’s complaint further alleges that the defendants’ misconduct has resulted in a balance due to the government of more than $370,000.
According to the complaint, the defendants have made minimal payments of their tax debts, and government attempts to induce voluntary compliance have failed. The complaint seeks an injunction requiring the defendants to timely deposit and pay withheld employment taxes, and to timely file all employment tax returns.
California-Based Taleo Corp. Agrees to Pay U.S. $6.49 Million<br /> to Resolve False Claims Act AllegationsRead the Press Release
WASHINGTON - Taleo Corp. has agreed to pay the United States $6.49 million to resolve allegations that it knowingly caused false claims to be submitted to the Transportation Security Administration (TSA) of the Department of Homeland Security (DHS), the Justice Department announced today.
In 2002, CPS Human Resource Services contracted with TSA to perform human resource services. Taleo, which is based in Dublin, Calif., subcontracted with CPS to provide supporting software. Taleo’s subcontract stated that Taleo would charge its commercial list rates with certain discounts.
The United States alleged that Taleo's commercial list rates were usually based on a customer's actual number of employees, but that Taleo charged TSA a higher rate that was not based on the agency's actual number of employees. If Taleo had followed the normal procedure, the rate TSA was charged would have been lower.
“Those who do business with federal agencies must be honest and play by the rules,” said Tony West, Assistant Attorney General for the Civil Division of the Department of Justice. “We are committed to protecting taxpayer dollars by pursuing contractors who overcharge the government.”
The government’s investigation was conducted by the Justice Department’s Civil Division, the U.S. Attorney’s Office for the District of Columbia and DHS’ Office of Inspector General.
This settlement resolves allegations filed by a former Taleo employee under the whistleblower provisions of the False Claims Act, United States ex rel. Hetland v. Taleo Corp., No. 08-cv-0801 (CKK) (D.D.C.). The False Claims Act authorizes private parties to sue on behalf of the United States for fraud and to share in any recovery.
“This settlement demonstrates our office’s continued commitment to target companies that “pad” their prices in an attempt to “pad” their pockets,” said Ronald C. Machen Jr., U.S. Attorney for the District of Columbia. “This office is committed to protecting the public and recovering funds that were obtained through misrepresentations, fraud, and abuse.”
This settlement is part of the government’s aggressive efforts to combat fraud through the use of powerful enforcement tools such as the False Claims Act. The Justice Department's total recoveries in False Claims Act cases since January 2009 are more than $7.5 billion.
Monday 15 August 2011
Settlement Will Resolve Clean Air Act Penalties and Repay Portion of Clean up Costs from Danvers, Mass. Explosion in 2006Read the Press Release
WASHINGTON – The United States has reached agreement with the owners and a former operator of an inks and paint products manufacturing facility in Danvers, Mass., that exploded and burned in 2006 the day before Thanksgiving.
Under a consent decree lodged today by the U.S. Department of Justice on behalf of the Environmental Protection Agency (EPA), the owners and operator will pay the U.S. Government a projected $1.3 million, including cash and the net proceeds from sale of the facility property, assuming the property sells for its appraised value. Most of that recovery will go to reimburse EPA for its $2.7 million in costs of cleaning up hazardous waste after the explosion.
In addition, operator C.A.I. Inc. will pay EPA a penalty of $100,000 to settle allegations that conditions at the facility violated the General Duty Clause in Section 112(r) of the Clean Air Act. Today's consent decree resolves claims in a complaint against former operator C.A.I. and owners Sartorelli Realty LLC and Roy A. Nelson as Trustee of the Nelson Danvers Realty Trust. A separate consent decree with former operator Arnel Company Inc. was entered by the court in July 2011. The settlement amounts in both consent decrees were based on demonstrations by the settling defendants of limited financial resources.
“Failure to adhere to the Clean Air Act’s general duty obligations can lead to serious, potentially deadly accidents and harm to the environment,” said Ignacia S. Moreno, Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. “Today’s settlement underscores the importance of industry’s compliance with the law to ensure the protection of human health and the environment for the benefit of the American people.”
“This case demonstrates that a failure to implement basic safety mechanisms and follow obligations under the law can have dire consequences,” said Curt Spalding, regional administrator of EPA’s New England office. “The extent of damage from this explosion shows why it is so important that facilities follow basic chemical safety practices. Companies that fail to comply with laws that protect public health and our environment will be held accountable.”
EPA’s cleanup action and investigation were undertaken as a result of the explosion and chemical fire that occurred on Nov. 22, 2006, at the C.A.I. and Arnel industrial building in Danvers. On the night before Thanksgiving, a series of explosions demolished the manufacturing facility. C.A.I. and Arnel stored and used considerable quantities of ignitable and flammable substances in their manufacturing of solvent-based ink, paint, thinners and/or industrial coatings.
The explosion and subsequent fire destroyed the 12,000 square foot building, and the surrounding commercial and residential community experienced significant structural and property damage from the blast. Approximately 24 homes and six businesses were severely damaged and subsequently demolished; another 70 homes were damaged. An estimated 300 residents within a half-mile radius of the facility were evacuated by the Danvers fire department. Firefighting efforts lasted nearly 17 hours. While several people were injured and hospitalized, no fatalities occurred.
From Nov. 2006 to March 2007, EPA performed a removal of hazardous substances released or threatened to be released to the environment as a result of the explosion. EPA fenced off the site, took air samples, drained vats, totes and underground storage tanks, removed drums of chemicals, pumped off stormwater runoff, and removed soil, debris and scrap steel.
After the incident, EPA, in close coordination with other federal and state agencies, investigated the facility operators’ compliance with various federal laws, including the General Duty Clause of the Clean Air Act. Under the agreement, operator C.A.I. will pay EPA a penalty of $100,000 to settle EPA allegations that the following conditions at the facility, among others, contributed to the General Duty Clause violations: failure to identify the hazards of operating an ink mixing process overnight without proper ventilation; lack of appropriate ventilation, lack of vapor detectors and alarms to detect buildup of dangerous vapors while workers were not present, lack of automatic shut-off valves that could shut down processes if human operators forgot to do so, failure to have the proper fire permits, and lack of explosion venting construction.
C.A.I.’s penalty also resolved a claim under Section 114(a) of the Clean Air Act for failure to respond to an EPA request for information related to the company’s handling of extremely hazardous substances.
More Information:
The consent decree, lodged in the U.S. District Court for the District of Massachusetts, is subject to a 30-day public comment period and approval by the federal court. A copy of the consent decree will be available on the Justice Department website at www.usdoj.gov/enrd/Consent_Decrees.html .
The General Duty Clause of the Clean Air Act: www.epa.gov/osweroe1/docs/chem/gdc-fact.pdf .
Nautilus Hyosung Holdings Agrees to Plead Guilty to Obstruction of Justice for Submitting False Documents in a Merger InvestigationRead the Press Release
WASHINGTON – Nautilus Hyosung Holdings Inc. has agreed to plead guilty and pay a $200,000 criminal fine for obstruction of justice in connection with a premerger filing and investigation by the Antitrust Division, the Department of Justice announced today. Nautilus Hyosung Holdings, an automated teller machine (ATM) manufacturer, is a wholly-owned subsidiary of Korea-based Nautilus Hyosung Inc. (NHI). The false documents were submitted to the government by NHI on behalf of Nautilus Hyosung Holdings in contemplation of the acquisition of Triton Systems of Delaware Inc., a competing manufacturer of ATM systems. The department said that the parties abandoned the proposed acquisition of Triton before the Antitrust Division reached a decision whether to challenge the transaction.
According to a two-count felony charge filed today in U.S. District Court in Washington, D.C., in or about July and August 2008, NHI, as the parent company of Nautilus Hyosung Holdings, submitted false documents to the Department of Justice and the Federal Trade Commission (FTC) in conjunction with mandatory premerger filings made under the Hart-Scott-Rodino Antitrust Improvement Act. After receiving the premerger filings, the Antitrust Division opened a civil merger investigation of the proposed acquisition. The department said that in September 2008, NHI submitted additional false documents in response to a document request from the Antitrust Division.
According to court documents, an executive of a company affiliated with, and acting on behalf of, Nautilus Hyosung Holdings and NHI altered and directed other corporate employees to alter existing corporate documents with the intent to impair their integrity and availability for use in an official proceeding. The department said that, among other things, the alterations misrepresented and minimized the competitive impact of the proposed acquisition on the market for ATMs in the United States.
The Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, requires companies contemplating mergers and acquisitions valued above certain thresholds to make filings with the Department of Justice and the FTC. The federal antitrust agencies have authority to investigate and challenge such proposed transactions under Section 7 of the Clayton Act and Section 1 of the Sherman Act, if the transactions may substantially lessen competition or create a monopoly.
According to court documents, subsequent to these false submissions to the Antitrust Division in connection with its merger investigation, NHI and Nautilus Hyosung Holdings voluntarily disclosed that numerous documents had been altered before being submitted to the government. Since the time of that admission, NHI and Nautilus Hyosung Holdings have cooperated in the department’s criminal investigation of the full nature and scope of the alleged obstructive conduct, and have committed to continue their cooperation in the department’s ongoing investigation.
Nautilus Hyosung Holdings is charged with obstruction of justice, which carries a maximum criminal fine of $500,000 per count. Nautilus Hyosung Holding’s agreed-upon criminal fine of $100,000 per count is subject to court approval and takes into consideration the nature and extent of the company’s disclosure of wrongdoing and its cooperation in the department’s investigation.
The ongoing investigation is being conducted by the Antitrust Division’s National Criminal Enforcement Section. Anyone with information concerning anticompetitive conduct or obstruction of justice in antitrust matters is urged to call the Antitrust Division’s National Criminal Enforcement Section at 202-307-6694 or visit www.justice.gov/atr/contact/newcase.htm .
Michigan Woman Sentenced to Two Years in Prison for Selling More Than $400,000 in Counterfeit Business SoftwareRead the Press Release
WASHINGTON – A Michigan woman was sentenced today to two years in prison for selling more than $400,000 worth of counterfeit computer software, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney Barbara L. McQuade for the Eastern District of Michigan.
Jacinda Jones, 31, of Ypsilanti, Mich., also was ordered by U.S. District Court Judge David M. Lawson in Detroit to serve three years of supervised release following her prison term and to pay $441,035 in restitution. Jones pleaded guilty on April 20, 2011, to one count of criminal copyright infringement. According to documents filed in court, Jones grossed more than $400,000 between July 2008 and January 2010 by selling more than 7,000 copies of pirated business software at discounted prices through the website www.cheapdl.com. The software had a retail value of more than $2 million and was owned by several companies, including Microsoft, Adobe, Intuit and Symantec . Jones’ activities came to the attention of the U.S. Immigration and Customs Enforcement (ICE) agents, who made several undercover purchases of the pirated business and utility software.
The case was prosecuted by Assistant U.S. Attorney Terrence Berg of the U.S. Attorney’s Office for the Eastern District of Michigan and Trial Attorney Thomas Dougherty of the Computer Crime and Intellectual Property Section in the Justice Department’s Criminal Division. The investigation was conducted by National Intellectual Property Rights Coordination Center (IPR Center) in Crystal City, Va., and by ICE’s Office of Homeland Security Investigations in Detroit.
The sentencing announced today is an example of the type of efforts being undertaken by the Department of Justice Task Force on Intellectual Property (IP Task Force). Attorney General Eric Holder created the IP Task Force to combat the growing number of domestic and international intellectual property crimes, protect the health and safety of American consumers, and safeguard the nation’s economic security against those who seek to profit illegally from American creativity, innovation and hard work. The IP Task Force seeks to strengthen intellectual property rights protection through heightened criminal and civil enforcement, greater coordination among federal, state and local law enforcement partners, and increased focus on international enforcement efforts, including reinforcing relationships with key foreign partners and U.S. industry leaders. To learn more about the IP Task Force, go to www.justice.gov/dag/iptaskforce/ .
Braintree, Mass., Waste Facility Agrees to Spend More Than $1.7 Million to Settle Alleged Hazardous Waste ViolationsRead the Press Release
WASHINGTON – In a settlement valued at more than $1.7 million, Clean Harbors of Braintree Inc. has agreed to pay a significant penalty and perform additional projects, to settle a complaint filed by the U.S. Department of Justice on behalf of the Environmental Protection Agency (EPA), regarding numerous violations of hazardous waste management and emergency planning laws at the company’s Braintree, Mass., facility.
Under the settlement, Clean Harbors will pay a $650,000 penalty and will spend $1,062,500 on a Supplemental Environmental Project (SEP) consisting of planting approximately 1400 trees in low-income and historically-disadvantaged environmental justice areas in the city of Boston. It is expected that Clean Harbors will work with the city of Boston Parks and Recreation Department to implement the project over a two-year period.
Clean Harbors also will comply with an enhanced waste analysis plan that goes beyond what is currently required in its hazardous waste permit. This plan will help to ensure that the hazardous waste Clean Harbors receives and generates will be properly characterized and managed. Further, Clean Harbors has installed and will maintain a vapor collection system for its tanks that will collect and treat volatile organic compound (VOC) emissions, which contribute to smog.
“This agreement illustrates the commitment by the U.S. Department of Justice and EPA to protecting communities from the potential dangers of hazardous waste and to fulfilling important environmental justice goals,” said Ignacia S. Moreno, Assistant Attorney General of the Justice Department’s Environment and Natural Resources Division. “Under the settlement, Clean Harbors will take additional steps to ensure it properly characterizes and manages hazardous waste.”
EPA identified nearly 30 violations of both the Resource Conservation and Recovery Act (RCRA) and the Emergency Planning and Community Right-To-Know Act (EPCRA) at a site inspection of the Braintree Clean Harbors facility that took place in June 2007. Those violations included inadequate waste characterization, the failure to properly maintain its hazardous waste tanks, inadequate secondary containment, and improper storage of incompatible wastes. At the time of the inspection, many of the company’s hazardous waste tanks were deteriorating and in poor condition. EPA monitoring detected releases of VOC emissions from some of the tanks. In July 2007, EPA issued an administrative order directing Clean Harbors to immediately address numerous conditions identified during the inspection that could have posed a danger to human health or the environment. Clean Harbors came into compliance soon after the 2007 order. Inspectors from the Massachusetts Department of Environmental Protection (MassDEP) participated in the June 2007 inspection and provided support to EPA during the settlement process. In a separate consent order, MassDEP required Clean Harbors to replace all of the old storage tanks, as well as implement numerous other needed infrastructure upgrades at the facility. Clean Harbors has purchased and installed new hazardous waste tanks.
“This settlement underscores how important it is that companies and individuals handling and managing hazardous wastes carefully adhere to the protective requirements EPA and MassDEP have established for these substances,” said Curt Spalding, regional administrator of EPA’s New England office. “Complying with these standards helps reduce the possibility of a chemical release that could put the community and the environment at risk. I am also pleased that under this settlement a large number of trees will be planted, which will improve air quality and the quality of life for Boston citizens.”
“This project will assist the city of Boston's tree planting program, providing hundreds of additional street trees in the neighborhoods. Increasing the tree canopy will result in endless environmental benefits for our residents and is a priority,” said Mayor Thomas M. Menino.
The facility performs hazardous materials management and disposal services including drummed and bulk waste processing and consolidation, transformer decommissioning, PCB storage and processing, blending of waste used as supplemental fuel by cement kilns or industrial furnaces, and pretreatment of waste to stabilize it before it is sent to permitted landfills.
More Information on EPA Hazardous Waste Enforcement in New England: www.epa.gov/region1/enforcement/waste/index.html .
More information on the settlement: www.justice.gov/enrd/Consent_Decrees.html .
Friday 12 August 2011
Former Owners of Florida Airline Fuel Supply and Indiana Flight Management Services Companies Plead Guilty in Schemes to Defraud Ryan International AirlinesRead the Press Release
WASHINGTON – A former owner and operator of a Florida-based airline fuel supply service company and a former owner and operator of an Indiana-based flight management services company pleaded guilty today to participating in separate schemes to defraud Ryan International Airlines, a charter airline company located in Rockford, Ill., the Department of Justice announced. The charges announced today are the first to arise out of the Antitrust Division’s ongoing investigation into fraud and anticompetitive conduct in the airline charter services industry.
On July 21, 2011, James E. Murphy, the former owner and operator of a Florida aviation fuel supply company, and David A. Chaisson, the former owner and operator of an Indiana flight management services company, were charged in separate two-count felony charges in U.S. District Court in Fort Lauderdale, Fla. Murphy and Chaisson were charged with participating in different conspiracies with co-conspirators to defraud Ryan by making kickback payments to a procurement official at Ryan in exchange for the official awarding their respective companies business. Ryan provides air passenger and cargo services for corporations, private individuals, professional sports teams and the U.S. government, including the U.S. Department of Defense, the U.S. Department of Homeland Security and the U.S. Marshals Service.
According to court documents, from as early as October 2005 through at least September 2008, Murphy participated in a conspiracy in which Murphy paid more than $130,000 in kickbacks to a Ryan official responsible for procuring jet fuel for Ryan flights in exchange for the Ryan official providing aviation fuel contracts to Murphy’s company, and to two other aviation fuel supply companies where Murphy worked as a corporate bookkeeper.
In a separate conspiracy, according to court documents, from as early as January 2005 through at least July 2008, Chaisson paid the same Ryan official more than $60,000 in kickbacks, including payments based on fabricated invoices submitted by Chaisson’s company to Ryan. Chaisson’s company was responsible for managing the ground operations for Ryan flights.
Both Murphy and Chaisson are charged with one count of conspiracy to commit wire fraud and honest services fraud, as well as one substantive count of wire fraud. Each count carries a maximum sentence of 20 years in prison and a $250,000 criminal fine for individuals. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either amount is greater than the statutory maximum fine.
The investigation is being conducted by the Antitrust Division’s Atlanta Field Office and the National Criminal Enforcement Section and the U.S. Department of Defense’s Office of Inspector General, with assistance from the U.S. Attorney’s Office in Fort Lauderdale. Anyone with information concerning anticompetitive conduct in the airline charter services industry is urged to call the Antitrust Division’s Atlanta Field Office at 404-331-7100 or visit www.justice.gov/atr/contact/newcase.htm .
Former NASDAQ Managing Director Sentenced to 42 Months in Prison for Insider TradingRead the Press Release
WASHINGTON – Donald Johnson, a former managing director of the NASDAQ Stock Market, was sentenced today to 42 months in prison for engaging in insider trading on multiple occasions based on material, non-public information he obtained in his capacity as a NASDAQ executive. Johnson was also ordered to forfeit $755,066.
The sentence was announced today by Assistant Attorney General Lanny A. Breuer of the Criminal Division and U.S. Attorney for the Eastern District of Virginia Neil H. MacBride.
Johnson, 57, of Ashburn, Va., was sentenced by U.S. District Judge Anthony J. Trenga in the Eastern District of Virginia. Johnson pleaded guilty on May 26, 2011, to one count of securities fraud. In pleading guilty, he admitted that, from 2006 to 2009, he purchased and sold stock in NASDAQ-listed companies based on material, non-public information, or inside information, that he obtained through his position as an executive at NASDAQ.
“Mr. Johnson’s insider status at one of our nation’s largest securities exchanges gave him access to highly sensitive information, which allowed him to anticipate the rise and fall of certain stocks,” said Assistant Attorney General Breuer. “Armed with this insider information, Mr. Johnson made investing look easy. He pocketed hundreds of thousands of dollars. But he did it by exploiting his trusted position to gain an unfair – and illegal – advantage in the market. Today’s sentence should leave no doubt in the minds of investors inclined to cheat that insider trading is a serious crime, with serious consequences.”
“Insider trading is an insidious crime that threatens the integrity of our financial markets, especially when the illegal trades are made by a trusted securities exchange official,” said U.S. Attorney MacBride. “Mr. Johnson used his position at NASDAQ to make quick profits from sensitive information companies provided him. He learned what every other trader on Wall Street must now realize: We’re watching, and when you’re caught you’ll face serious time in prison.”
According to court documents, from August 2006 to September 2009, Johnson was a managing director on NASDAQ’s market intelligence desk in New York. The market intelligence desk provides trading analysis and market information to the companies that list on NASDAQ. According to court documents, Johnson monitored the stock of companies traded on NASDAQ and offered NASDAQ-listed companies information and analyses concerning trading in their own stock. To enable him to perform these services, NASDAQ-listed companies routinely entrusted Johnson with material, non-public information about their company, including advance notice of announcements concerning earnings, regulatory approvals and personnel changes. Johnson admitted that he repeatedly used this information to purchase or sell short stock in various NASDAQ-listed companies shortly before the information was made public. He would then generate substantial gains by reversing those positions soon after the announcement. According to court documents, in order to conceal his illegal trading, Johnson executed these trades in a brokerage account in his wife’s name. Johnson failed to disclose this account to NASDAQ in violation of NASDAQ rules.
Johnson admitted in his plea that he made illegal purchases and sales of stock in NASDAQ-listed companies on at least eight different occasions. In addition, at sentencing, Johnson did not dispute that he engaged in insider trading on a ninth occasion, and the court ordered forfeiture based on proceeds from all nine instances. The companies whose securities he traded were Central Garden and Pet Co.; Digene Corporation; Energy Conversion Devices, Inc.; Idexx Laboratories Inc.; Pharmaceutical Product Development Inc.; and United Therapeutics Corporation. According to court documents, Johnson traded ahead of important announcements by these companies. For example, in November 2007, Johnson used inside information related to successful trial results for United Therapeutics’ drug Viveta (now called Tyvaso) to purchase shares of United Therapeutics before the trial results were announced. Soon after the announcement, Johnson sold the shares and gained more than $175,000 in profits. According to court documents, in July 2009, Johnson again improperly used inside information he obtained from United Therapeutics about the approval of its drug Tyvaso to purchase the company’s shares before the approval was announced. He sold the shares after the announcement and gained more than $110,000 in profits.
The Securities and Exchange Commission (SEC) has filed a related civil enforcement action against Johnson in the Southern District of New York.
This case is being prosecuted by Trial Attorney Justin Goodyear of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Raymond E. Patricco Jr., of the Eastern District of Virginia. The department recognizes the substantial assistance of the SEC, which conducted its own investigation and referred the conduct to the department. The department also recognizes the substantial assistance of the U.S. Postal Inspection Service, which conducted the criminal investigation. The Financial Industry Regulatory Authority also provided assistance. Brigham Cannon, formerly a Trial Attorney of the Criminal Division, also assisted with the investigation.
This prosecution is part of efforts underway by President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. For more information about the task force visit: www.stopfraud.gov.
Former Member of Virginia House of Delegates<br /> Sentenced to 114 Months in Prison for Bribery and ExtortionRead the Press Release
WASHINGTON – Phillip A. Hamilton, a former member of the Virginia House of Delegates, was sentenced today to 114 months in prison after he was previously convicted of soliciting employees of Old Dominion University (ODU) for a paid position in exchange for introducing a budget amendment to fund the position, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney Neil H. MacBride for the Eastern District of Virginia.
“Phillip Hamilton traded on his influence in one of the oldest legislative bodies in the United States for a paid position at Old Dominion University, netting himself approximately $80,000 over two years,” said Assistant Attorney General Breuer. “Today he learned that betraying the trust of Virginia’s citizens and his fellow legislators has a much higher price. For his acts of bribery and extortion, he will now spend 114 months in prison – an example to public officials and the electorate that the Justice Department will vigorously pursue those who abuse their public office. The Criminal Division’s Public Integrity Section and our partners in the U.S. Attorneys’ Offices are committed to rooting out self-dealing by public officials and holding them accountable when they misuse their positions for personal gain.”
“Today is a sad day in the history of the Commonwealth,” said U.S. Attorney MacBride. “Phil Hamilton used his powerful influence as a 20-year state legislator to extort officials at ODU and became the first elected legislator in Virginia to be convicted of selling his position for personal gain. We hope his conviction and sentence will serve as a reminder to every elected official in the Commonwealth that they must uphold the public’s trust or face similar consequences.”
U.S. District Judge Henry E. Hudson also ordered Hamilton, 59, to serve two years of supervised release following his prison term and directed him to self surrender to authorities on or before Sept. 19, 2011. Hamilton was convicted by a jury in Richmond, Va., on May 11, 2011, of one count of federal program bribery and one count of extortion under color of official right.
Hamilton was elected in 1988 to represent the 93rd District in the Virginia House of Delegates, which includes Newport News and James City County, Va. As part of his duties, Hamilton sat on the Elementary & Secondary Education Subcommittee of the Virginia House Appropriations Committee.
According to the Jan. 5, 2011, indictment and evidence presented at trial, from August 2006 through February 2007, Hamilton solicited employees of ODU for a position as director for the ODU Center for Teacher Quality and Educational Leadership. The center’s objective was to train teachers for success in urban school environments. During this period, Hamilton simultaneously introduced a budget amendment that would establish and fund the center, including his salary as the director.
According to an email that Hamilton sent to an ODU official on Dec. 21, 2006, which was admitted as evidence at trial, Hamilton stated that the current budget did not include any funding for the center, his retirement payments from another source were being reduced in May 2007, and he would need to supplement his current income. Evidence at trial showed that an ODU official assured Hamilton in December 2006 and January 2007 that if ODU obtained funding from the Virginia General Assembly for the creation of the center, then Hamilton would have a job at the center. During this same period, in January 2007, Hamilton introduced a budget amendment in the House of Delegates to appropriate $1 million in fiscal year 2007-2008 (July 1, 2007 – June 30, 2008) for a “Center for Teacher Quality and Educational Leadership.” The amendment passed the full committee unanimously.
On Feb. 24, 2007, after a conference between the Virginia house and senate that resulted in an amendment to appropriate $500,000 to ODU for the center – for which Hamilton voted in favor - the budget bill was passed. The next day, according to evidence at trial, Hamilton and ODU officials exchanged emails about Hamilton receiving the director job. Approximately three people applied in response to a job posting for the position; however, none of them were interviewed. Hamilton, who was awarded the job, never submitted an application.
In June 2007, Hamilton and an ODU official signed an employee contract indicating, among other things, that Hamilton would direct the center and seek continual funding for the center. The contract also stated that Hamilton would be paid $40,000 per year. From approximately July 2007 through July 2009, Hamilton collected approximately $80,000 from ODU.
Evidence at trial showed that Hamilton took numerous steps to conceal this arrangement, including telling ODU officials not to mention his name in connection with the center to members of the Virginia Senate Finance Committee; advising an ODU official to tell a Virginia senate staffer that the official, and not Hamilton, was the director of the center; and unsuccessfully attempting to persuade ODU leadership not to release incriminating emails in response to a Freedom of Information Act request that ODU had received.
The case was prosecuted by Trial Attorney David V. Harbach II of the Criminal Division’s Public Integrity Section and Supervisory Assistant U.S. Attorney Robert J. Seidel Jr. of the Eastern District of Virginia. The case was investigated by the FBI.
Former Illinois Firefighter Sentenced to 30 Years in Prison<br /> for Child Exploitation ChargesRead the Press Release
WASHINGTON – A former Rochester, Ill., firefighter was sentenced today to 30 years in prison and lifetime supervised release for child exploitation charges, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division and U.S. Attorney for the Central District of Illinois James A. Lewis.
Justin D. Weaver, 27, was sentenced by U.S. District Judge Richard Mills in the Central District of Illinois. Weaver pleaded guilty on Jan. 27, 2011, to one count of production of child pornography, one count of possession of child pornography and one count of destruction of evidence. At his plea hearing, Weaver admitted to molesting a child under the age of 12 and producing child pornography of that molestation.
Weaver is also required to register as a sex offender in accordance with state and federal law.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The case was prosecuted by Assistant U.S. Attorney Elly Peirson of the Central District of Illinois and Trial Attorney Mi Yung Park of the Criminal Division’s CEOS. The case was investigated by the U.S. Immigration and Customs Enforcement; the Springfield, Ill., Police Department; the Adams County, Ill., Sheriff’s Department; and CEOS’s High Technology Investigative Unit.
Federal Court Shuts Down Chicago-Area Tax Return PreparerRead the Press Release
WASHINGTON – A federal court has permanently barred a woman and her suburban Chicago business from preparing federal tax returns for others, the Justice Department announced today. In the civil injunction order, issued by Judge William J. Hibbler of the U.S. District Court for the Northern District of Illinois, the court found that LaShawn Littrice and her South Holland, Ill., business, Diamond Accounting & Financial Services, falsified and manufactured expenses and deductions, and made false claims for the earned income tax credit on their customers’ tax returns. The court also found that Littrice filed returns using another return preparer’s identification number without that preparer’s knowledge.
According to the court order, an Internal Revenue Service (IRS) examination of 718 tax returns prepared by Littrice and Diamond Accounting found tax deficiencies on all but 20 of those returns. In papers filed with the court, the government estimated tax losses of nearly $12 million from the defendants’ misconduct.
The court also noted that in June 2010, Littrice was convicted of 14 counts of willfully aiding or assisting in preparing and presenting false and fraudulent tax returns and was sentenced to 42 months in prison.
The IRS has listed return preparer fraud as one of its “Dirty Dozen” tax scams for 2011. In the past decade, the Justice Department’s Tax Division has obtained hundreds of injunctions to stop the promotion of tax fraud schemes and the preparation of fraudulent tax returns. Information about these cases is available on the Justice Department website .
Thursday 11 August 2011
Virginia Woman Pleads Guilty in Relation to Staged Kidnapping in GuatemalaRead the Press Release
WASHINGTON – A Virginia woman pleaded guilty today in relation to a staged kidnapping in Guatemala, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division, U.S. Attorney Neil H. MacBride for the Eastern District of Virginia and John V. Gillies, Special Agent in Charge of the FBI Miami Division.
Sheena Flores, 34, of Manassas, Va., pleaded guilty before U.S. District Judge Gerald Bruce Lee to one count of transmitting in foreign commerce, with intent to extort money, a communication containing a threat to injure another person. At sentencing, scheduled for Oct. 21, 2011, Flores faces a maximum sentence of 20 years in prison.
According to court documents, in July 2010, Flores was living in Guatemala with a child under the age of two who was born in Guatemala. On July 6, 2010, from Guatemala, Flores contacted a family member in Manassas by telephone and reported that she and the child had been kidnapped by three men and that the men said that they wanted $5,000 in two hours or they were going to kill Flores and the child. Later that day, a family member of Flores in Manassas received numerous text messages from Flores’ cellular telephone in Guatemala threatening to kill Flores and the child if family members did not pay $10,000 in ransom by the next day. Believing that Flores and the child had in fact been kidnapped, a family member wired $3,000 from the Eastern District of Virginia to Guatemala. At the time that Flores reported the kidnapping and the ransom demands, Flores knew that she and the child had not been kidnapped and was simply attempting to extort money from her family.
The case is being prosecuted by Assistant U.S. Attorney Rebeca H. Bellows for the Eastern District of Virginia and Trial Attorney James S. Yoon of the Criminal Division’s Human Rights and Special Prosecutions Section. The Criminal Division’s Office of International Affairs provided assistance. The case is being investigated by the FBI’s Miami Division Extraterritorial Squad.
Three Men Charged in Louisiana for Civil Rights ViolationsRead the Press Release
WASHINGTON - The Justice Department today announced that three men were charged for their role in intentionally attempting to intimidate and interfere with African-American students who were attending Beekman Junior High School in Beekman, Morehouse Parish, La.
According to the bill of information filed in the District Court for the Western District of Louisiana, on or about Nov. 6, 2007, Brian Wallis, James Lee Wallis Jr. and Tony L. Johnson, acting together, tied a noose around a dead raccoon’s neck and hung it from the flagpole located in front of Beekman Junior High School. The bill of information further alleges that the three men hung the raccoon in the noose to intimidate and interfere with the African-American students because of their race and color and because they were attending Beekman Junior High School, which is a public school.
Johnson, Brian Wallis and James Lee Wallis Jr. face a maximum penalty of one year in jail.
On Sept. 24, 2010, a federal grand jury returned an indictment against Christopher Shane Montgomery, who initially claimed responsibility for the act, in connection with this incident. Based upon additional information developed during the course of this investigation, the charges against Montgomery have been dismissed.
This case was investigated by the FBI and is being prosecuted by Senior Litigation Counsel Mark Blumberg and Trial Attorney Christine M. Siscaretti of the Justice Department’s Civil Rights Division, and Assistant U.S. Attorney Mary J. Mudrick of the U.S. Attorney’s Office for the Western District of Louisiana, Shreveport Office.
A bill of information is merely an accusation, and the defendants are presumed innocent unless proven guilty.
The City of Newport, R.I., Will Upgrade Facilities and Pay Fine to Settle Clean Water ViolationsRead the Press Release
WASHINGTON – Under the terms of a settlement filed today in federal court, the city of Newport has agreed to eliminate illegal discharges of sewage into Narragansett Bay from its wastewater treatment plant and wastewater collection system. The city has also agreed to take actions to reduce the pollutants associated with storm sewer discharges to Easton’s Beach; purchase and distribute rain barrels to residents in order to capture stormwater for reuse; and take other actions to encourage low impact development.
The U.S. Environmental Protection Agency (EPA) estimates that Newport will spend about $25 million to address these issues. The city will also pay a $170,000 penalty to be split between the federal and state governments.
The settlement is the result of a federal and state enforcement action brought by the U.S. Department of Justice, on behalf EPA, the State of Rhode Island through the Rhode Island Department of Environmental Management, and the National Environmental Law Center on behalf of Environment Rhode Island and certain Rhode Island citizens. The consent decree alleged that Newport violated the federal Clean Water Act, including illegal discharges of sewage and stormwater containing bacteria and other pollutants that pose threats to human health and the environment.
Under this consent decree, Newport is required to develop a comprehensive, system wide plan to address discharge violations at its wastewater treatment plant and eliminate overflows from its wet weather sewage treatment facilities at Wellington Avenue and Washington Street and from other points in its collection system. Planned actions include identifying and removing extraneous sources of water from its collection system by eliminating stormwater connections and repairing or replacing leaky pipes. The city will also take measures to reduce the levels of bacteria in discharges from its storm sewer system to Easton’s Beach.
“Today’s agreement will help eliminate harmful overflows of sewage and stormwater by requiring comprehensive improvements to Newport’s aging sewer system – improvements that are required in order to bring the city into compliance with the Clean Water Act,” said Ignacia S. Moreno, Assistant Attorney General of the Justice Department’s Environment and Natural Resources Division. “Today, Newport joins a growing list of cities across the country that have met the challenge of upgrading their systems, and in doing so are improving public health and the environment for their residents.”
While negotiating this agreement, the city has been taking corrective action and working cooperatively with all federal, state and environmental parties involved.
“EPA expects all municipalities to pay attention to critical elements of their wastewater infrastructure,” said Curt Spalding, regional administrator of EPA’s New England office. “Maintaining these municipal assets reduces the risk of service disruptions, the environmental and economic impacts associated with untreated sewage discharges and avoids the potentially higher costs to repair or replace them when they fail. This settlement will ultimately result in significant improvements to water quality and create a cleaner and healthier environment for the Newport community.”
“Newport’s waters are treasured by all Rhode Islanders – they are vital to our ecology, economy, and quality of life,” said John Rumpler, senior attorney for Environment Rhode Island. “The city’s decision to take responsibility for ending its pollution will be appreciated for generations to come.”
The consent decree, filed in the U.S. District Court for the District of Rhode Island, is subject to a 30-day public comment period and approval by the federal court. Once it is published in the Federal Register, a copy of the consent decree will be available on the Justice Department Web site at www.justice.gov/enrd/Consent_Decrees.html .
EPA’s work enforcing the Clean Water Act in New England: www.epa.gov/region1/enforcement/water/index.html .
Mansfield, Texas, Man Admits to Theft of Government Property and Aggravated Identity TheftRead the Press Release
WASHINGTON – Thomas W. Richardson of Mansfield, Texas, pleaded guilty to one count of theft of government property and one count of aggravated identity theft before the Honorable Jane J. Boyle in Dallas, the Department of Justice and Internal Revenue Service (IRS) announced today.
Richardson admitted that within a two day period from April 15, 2006, to April 17, 2006, he filed or caused to be filed 29 fraudulent 2005 IRS Forms 1040, U.S. Individual Income Tax Returns, according to the written statement filed by Richardson. Each federal income tax return claimed a refund of between $215,801 and $473,832. Richardson admitted that the refunds claimed by all 29 tax returns totaled $7,922,657. Richardson further admitted that each tax return was filed claiming the married filing jointly election and listed two taxpayers, husband and wife. In each case the Social Security numbers reported on the tax returns were assigned to individuals and in most cases, the names on the tax returns matched the names of the individuals to whom the Social Security numbers were assigned. Richardson admitted that the tax returns were prepared without the authorization of the 58 taxpayers listed on the tax returns. All of the returns directed that the IRS pay the money to one of Richardson’s bank accounts. According to Richardson’s statement, the IRS paid out seven refunds for a total $1,865,401 between May 12, 2006 and May 19, 2006. All but $31,149 was recouped by the IRS.
Sentencing has been set for Dec. 1, 2011, and Richardson remains free on bail pending sentencing. Richardson faces a sentence of up to 12 years in prison, and a fine of $250,000.
James Jacks, U.S. Attorney for the Northern District of Texas, and John A. DiCicco, Principal Deputy Assistant Attorney General for the Justice Department’s Tax Division, commended the efforts of the IRS-Criminal Investigation agents who investigated the case and Tax Division Trial Attorneys Robert A. Kemins and Jed Silversmith, as well as Assistant U.S. Attorney Joe Revesz, who are prosecuting the case.
More information about the Tax Division and its enforcement efforts can be found at www.justice.gov/tax.
Former Russell County, Ala., Sheriff Deputy Pleads Guilty to Civil Rights Charge for Assaulting a Handcuffed ManRead the Press Release
WASHINGTON – The Justice Department announced today that Kirby Dollar, 37, a former detective with the Russell County Sheriff’s Office, pleaded guilty in federal court in Montgomery, Ala., for his role in the assault of a handcuffed man.
According to the information presented in court, on Nov. 26, 2010, Dollar participated in the assault of a man who w as in custody. At the time, the victim was handcuffed, lying on the ground and not resisting. The victim suffered serious bodily injury.
“Law enforcement officers are granted a great amount of power to carry out their critical public safety responsibilities. They cannot be allowed to abuse that power to violate the rights of individuals in their custody,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The Justice Department will vigorously prosecute those who cross the line to engage in acts of criminal misconduct.”
“This office will aggressively prosecute those who use their law enforcement powers to violate the civil rights of others while in their custody. I applaud the FBI and Alabama Bureau of Investigation for their prompt and thorough investigation of this matter,” said George L. Beck Jr., U.S. Attorney for the Middle District of Alabama.
“The FBI’s resources will always be devoted to ensure that civil rights protections are afforded to all citizens, said Lewis M. Chapman, Special Agent in Charge of the FBI’s Mobile, Ala., Field Office. “The public must have trust in those who enforce the law.”
Under the terms of the plea agreement, Dollar faces a maximum sentence of 57 months in prison.
The trial against Dollar’s co-defendant, Timothy Watford, is scheduled to begin on Aug. 22, 2011 . Watford is presumed innocent until proven guilty.
The case was investigated by the Mobile Division of the FBI and the Alabama Bureau of Investigation and is being prosecuted by Assistant U.S. Attorneys Nathan D. Stump and Jared H. Morris of the Middle District of Alabama, and Trial Attorney Benjamin J. Hawk of the Civil Rights Division.
Wednesday 10 August 2011
U.S. Marine Corps Gunnery Sergeant from South Carolina Pleads Guilty for Role in Scheme to Steal Military Equipment in IraqRead the Press Release
WASHINGTON – A U.S. Marine Corps (USMC) gunnery sergeant pleaded guilty today to conspiring to steal more than 70 electrical generators from two USMC bases in Iraq in 2008, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney Bill Nettles for the District of South Carolina.
Eric Scott Hamilton, 40, of Pelzer, S.C., pleaded guilty before U.S. District Judge J. Michelle Childs in the District of South Carolina to a criminal information charging him with two counts of conspiracy to steal public property.
According to court documents, Hamilton was stationed from May to September 2008 at Camp Fallujah, Iraq, where he was in charge of a military storage yard containing electrical generators and other equipment for use by USMC units in Iraq. Hamilton admitted that while he was stationed at Camp Fallujah, he entered into a scheme with a USMC officer to facilitate the theft of electrical generators from the base by private Iraqi contractors. Hamilton admitted that he identified the generators to be stolen, painted markings on them to designate them for theft by Iraqi contractors, and facilitated access to the storage yard by the contractors’ trucks to load and remove the generators. Hamilton also entered into a separate scheme with a private Iraqi contractor to facilitate that contractor’s theft of electrical generators from the base. Both of these theft schemes continued after the USMC closed Camp Fallujah in approximately October 2008 and relocated personnel there to Camp Ramadi, Iraq. According to court documents, Hamilton was assigned at Camp Ramadi from October to December 2008.
In pleading guilty, Hamilton admitted that he received more than $124,000 in payments from the USMC officer and the Iraqi contractor in return for facilitating the theft of more than 70 generators from Camps Fallujah and Ramadi. Hamilton received the funds through cash payments in Iraq, checks issued to Hamilton’s wife in the United States by the USMC officer’s wife, and wire transfer payments to a bank account in the United States. Hamilton sent home approximately $43,000 of the cash he received from the thefts at Camp Fallujah by concealing it among American flags contained in foot lockers that he mailed from Iraq to his wife. The investigation into this case continues.
At sentencing, Hamilton faces maximum penalties of five years in prison, a $250,000 fine and three years of supervised release following a prison term. As part of his guilty plea, Hamilton has agreed to pay $124,944 in restitution to the United States. A sentencing date has not yet been set by the court.
This case is being prosecuted by Special Trial Attorney David H. Laufman of the Criminal Division’s Fraud Section, on detail from the Special Inspector General for Iraq Reconstruction (SIGIR), and by Assistant U.S. Attorney William C. Lucius from the U.S. Attorney’s Office for the District of South Carolina. The case is being investigated by SIGIR and the Defense Criminal Investigative Service.
Los Angeles Jury Convicts Two Church Pastors and Their Employee of $14.2 Million Medicare Fraud SchemeRead the Press Release
WASHINGTON – Two pastors of a now defunct Los Angeles church and a woman they employed at their fraudulent durable medical equipment (DME) supply companies were convicted late yesterday of conspiracy and health care fraud charges in connection with a $14.2 million Medicare fraud scheme, announced the Departments of Justice and Health and Human Services (HHS).
After a two-week trial in federal court in Los Angeles, a jury found Christopher Iruke, 60; his wife, Connie Ikpoh, 49; and Aura Marroquin, 30, guilty of multiple charges. Iruke was found guilty of one count of conspiracy to commit health care fraud and 17 counts of health care fraud. Ikpoh and Marroquin were each found guilty of one count of conspiracy to commit health care fraud and four counts of health care fraud. Marroquin was found not guilty of one count of health care fraud. According to evidence presented at trial, Iruke, Ikpoh and Marroquin billed Medicare for power wheelchairs, orthotics and other DME that were not medically necessary or never provided.
“Mr. Iruke and his wife were persistent and brazen in their efforts to steal millions from the Medicare program,” said Assistant Attorney General Lanny A. Breuer of the Criminal Division. “They opened four different companies to perpetrate their fraud, recruited parishioners from their church and others to help carry it out, and then used the spoils to buy fancy cars and other luxuries. In short, they treated the Medicare program like a personal till. Yesterday, a jury in Los Angeles struck back, and now Mr. Iruke and his co-conspirators will find out the true cost of their shameful scheme.”
“This verdict sends a strong message of deterrence to all engaged in schemes to defraud Medicare,” said U.S. Attorney André Birotte Jr. for the Central District of California. “My office has worked closely with the Justice Department’s Medicare Fraud Strike Force to crack down on such crimes. We will continue to vigorously prosecute these cases in the future and we look forward to our continued partnership with the Strike Force in that effort.”
“Pastors Christopher Iruke and Connie Ikpoh abused their positions of trust and persuaded those who blindly trusted in them to steal millions of dollars from taxpayers and Medicare,” said Glenn R. Ferry, the Los Angeles Region’s Special Agent in Charge for the Office of Inspector General (OIG) of HHS. “These verdicts show yet again that Iruke, Ikpoh, and others like them, can count on being aggressively pursued and brought to justice.”
“These convictions will undoubtedly deter others from planning to abuse government programs created to help elderly and disabled Americans,” said Steven Martinez, Assistant Director in Charge of the FBI in Los Angeles. “The FBI is committed to continuing to identify individuals using small business as a front for a criminal enterprise at the expense of our health care system.”
According to evidence introduced at trial, Iruke and Ikpoh were pastors at Arms of Grace Christian Center, a church that operated from 5700 Crenshaw Boulevard in Los Angeles, where Iruke and Ikpoh also operated Pascon Medical Supply, a fraudulent DME supply company. Iruke and Ikpoh hired several of their parishioners at Arms of Grace to assist them in running Pascon and another fraudulent DME supply company, Horizon Medical Equipment and Supply Inc. Horizon was owned by Ikpoh, who also worked as a nurse at two Los Angeles-area hospitals.
According to evidence presented at trial, Iruke, Ikpoh, Marroquin and their co-conspirators used fraudulent prescriptions and documents that Iruke purchased from a number of illicit sources to bill Medicare for expensive, high-end power wheelchairs and orthotics that were medically unnecessary or never provided. These power wheelchairs cost approximately $900 per wheelchair wholesale, but were billed to Medicare at a rate of approximately $6,000 per wheelchair.
Evidence introduced at trial established that when it appeared to Iruke that he would have to close Pascon due to an audit by Medicare, Iruke convinced his sister, Jummal Joy Ibrahim, and a member of Arms of Grace, Asia Fowler, to allow him to use their names and identities to open two new fraudulent DME supply companies. These companies, Contempo Medical Equipment Inc. and Ladera Medical Equipment Inc., also operated from Los Angeles. After Pascon and Horizon closed, Iruke, Ikpoh, Marroquin and their co-conspirators continued to operate the fraud scheme from Contempo and Ladera.
Witnesses who sold fraudulent prescriptions and documents to Iruke testified that they and others paid cash kickbacks to street-level marketers to offer Medicare beneficiaries free power wheelchairs and other DME in exchange for the beneficiaries’ Medicare card numbers and personal information. These witnesses testified that they and their associates used this information to create fraudulent prescriptions and medical documents which they sold to Iruke and the operators of other fraudulent DME supply companies for $1,100 to $1,500 per prescription. One witness testified that Iruke was nicknamed the “Trash Man” because he purchased fraudulent prescriptions in bulk and took prescriptions that other DME supply company operators did not want, including prescriptions for beneficiaries who lived outside of Los Angeles. In some instances, Iruke and his co-conspirators used the Medicare card numbers and identities of beneficiaries who were dead to bill Medicare for DME.
Trial testimony established that Iruke took extensive efforts to conceal the fraud scheme and his involvement with the companies. One witness who worked at the companies testified that Iruke directed her and Marroquin to refer to the fraudulent prescriptions and documents he purchased as “donuts” or “jobs” because Iruke feared law enforcement was listening to their conversations. This witness also testified that Iruke directed her and Marroquin to lie to state and Medicare inspectors about his involvement with Contempo and Ladera when the inspectors visited the companies. Evidence introduced at trial established that during an August 2009 interview with federal law enforcement agents at Ladera, Marroquin lied repeatedly about how Ladera obtained business and Iruke’s involvement with the company.
Witness testimony established that shortly after agents visited Ladera, Iruke called a meeting at a park, and directed Marroquin and Darawn Vasquez, a member of Arms of Grace who worked at the supply companies, not to talk to law enforcement. Iruke provided Marroquin and Vasquez with cellular telephones, and directed them to use the phones in order to prevent law enforcement from intercepting their conversations. After this meeting, Iruke and Vasquez met at Arms of Grace, and shredded evidence of the fraud scheme. When the shredder overheated, Iruke and Vasquez flushed the evidence down the toilet.
Witness testimony and evidence introduced at trial also established that within a few weeks of the agents visiting Ladera, Iruke closed Contempo and Ladera, which prompted agents to serve Iruke and his attorneys with subpoenas for the files of the companies. Instead of producing the files, Iruke directed that the files be brought to an auditorium used by Arms of Grace, where Iruke, Ikpoh, Marroquin and others altered and destroyed documents within the files to remove evidence of the fraud scheme. Law enforcement agents found Marroquin with these files when they arrested her.
Evidence introduced at trial showed that as a result of this fraud scheme, Iruke, Ikpoh, Marroquin and their co-conspirators submitted more than $14.2 million in fraudulent claims to Medicare, and received approximately $6.6 million in reimbursement payments from Medicare. The evidence at trial showed that Iruke and Ikpoh diverted most of this money from the bank accounts of the supply companies to pay for the fraudulent prescriptions and documents which Iruke purchased to further the scheme, and to cover the leases on their Mercedes vehicles, home remodeling expenses and other personal expenses.
Iruke, Ikpoh and Marroquin were originally charged with Ibrahim, Vasquez and Fowler in an October 2009 indictment. Vasquez and Ibrahim pleaded guilty to conspiracy and false statement charges in February 2011 and March 2011, respectively, and are awaiting sentencing. The charges against Fowler were dismissed during trial.
U.S. District Court Judge Terry J. Hatter scheduled sentencing for Iruke, Ikpoh and Marroquin for Nov. 14, 2011. The maximum penalty for each conspiracy count and each fraud count is 10 years in prison.
The guilty verdicts were announced by Assistant Attorney General Breuer of the Criminal Division; U.S. Attorney Birotte for the Central District of California; Tony Sidley, Assistant Chief of the California Department of Justice, Bureau of Medi-Cal Fraud and Elder Abuse; Special Agent-in-Charge Ferry of the Los Angeles Region HHS-OIG; and Assistant Director Martinez in Charge of the FBI’s Los Angeles Field Office.
The case was prosecuted by Trial Attorney Jonathan Baum of the Criminal Division’s Fraud Section and Assistant U.S. Attorney David Kirman of the Central District of California. The case was investigated by HHS-OIG with assistance from the California Department of Justice. The case 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 Central District of California.
Since their inception in March 2007, 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 .
Justice Department Settles Allegations of Immigration-Related Employment Discrimination Against Summit Steel Fabricators in HoustonRead the Press Release
WASHINGTON – The Justice Department today reached a settlement agreement with Summit Steel Fabricators Inc. in Houston resolving allegations that the company engaged in a pattern or practice of discrimination against non-citizens in the employment eligibility verification process. According to the department’s findings, the company had a policy of requiring newly hired workers who are not U.S. citizens to present specific documentation, such as a permanent resident card or resident alien card, even if they had already presented other documents sufficient to establish their employment eligibility under federal law. U.S. citizens, by contrast, were not required to present any specific documents.
Under the terms of the settlement agreement, Summit Steel will alter its practices to ensure that citizens and non-citizens are treated equally in the employment eligibility verification process, and pay a civil penalty of $15,400. Summit Steel 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 three years.
“Employers have a responsibility to conduct the employment eligibility verification process in a non-discriminatory manner, and all workers have the right to look for work without facing discrimination based on their citizenship status,” 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 continuing to work with all employers to educate them about 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.
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.
Former TSA Employee Pleads Guilty to Federal Hate Crime for Assaulting Elderly Somali ManRead the Press Release
WASHINGTON – George Thompson, 64, a former employee of the Transportation Security Administration in Minneapolis, pleaded guilty today in federal court to violating the Matthew Shepard and James Byrd Jr. Hate Crimes Prevention Act by assaulting an 83-year-old Somali man on May 4, 2010, the Department of Justice announced today.
According to information presented during the plea hearing, Thompson targeted the elderly man because he had a red beard, which caused Thompson to believe that the victim was a Muslim and an African immigrant. Thompson admitted that he assaulted the man solely because the victim was Muslim and Somali. During the assault, Thompson yelled that the victim should go back to Africa.
“ As this successful prosecution makes clear, acts of violence targeted at individuals because of their race or religion will not be permitted in the United States, and will be prosecuted to the fullest extent of the law,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The department will continue to vigorously enforce the Matthew Shepard and James Byrd Jr. Hate Crimes Prevention Act, and all the laws under our jurisdiction, to protect the rights of all individuals.”
“Physical violence motivated by racial or religious hatred exacerbate fear and tear at the fabric of our society,” said B. Todd Jones, U.S. Attorney for the District of Minnesota. “When warranted by the facts and circumstances, we will vigorously prosecute these crimes, which are violations of federal law. Here in Minnesota we have vibrant and diverse communities and should be celebrating that fact, not assaulting people because of it.”
Thompson faces a maximum sentence of 10 years in prison for this crime.
This case was investigated by the Office of Inspector General at the Department of Homeland Security. The case was prosecuted by Assistant U.S. Attorney Ann M. Anaya and Trial Attorney Nicole Lee Ndumele of the Civil Rights Division.
Brooklyn Man Pleads Guilty to Online Identity Theft Involving More Than $700,000 in Reported FraudRead the Press Release
WASHINGTON – A Brooklyn, N.Y., man pleaded guilty today in U.S. District Court in Alexandria, Va., for his role in managing a credit card fraud operation that operated throughout the East Coast of the United States, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney Neil H. MacBride of the Eastern District of Virginia.
Jonathan Oliveras, 26, pleaded guilty before U.S. District Judge Gerald Bruce Lee in the Eastern District of Virginia to a two-count criminal information charging him with wire fraud and aggravated identity theft. Oliveras admitted to managing a scheme to purchase stolen credit card account information through the Internet from individuals believed to be in Russia. Oliveras also admitted to distributing the purchased information to individuals in the New York, New Jersey and Washington, D.C., metropolitan areas so that it could be used to make fraudulent purchases.
In pleading guilty, Oliveras admitted to illegally possessing information from 2,341 stolen credit card accounts as well as equipment to put that information onto counterfeit credit cards. According to information presented in court, companies have reported to the government more than 4,400 fraudulent charges totaling $770,674 on accounts illegally possessed by Oliveras. Oliveras also possessed 409 gift, debit or credit cards used as part of the scheme, which had a total stored value of $42,688.
Sentencing for Oliveras is scheduled Oct. 28, 2011, at 9:00 a.m. EDT. He faces a maximum penalty of 20 years in prison and a fine of $1,541,349 on the wire fraud charge, and two years in prison and a $250,000 fine on the identity theft charge.
The case is being prosecuted by Michael Stawasz, a Senior Counsel in the Criminal Division’s Computer Crime & Intellectual Property Section and Special Assistant U.S. Attorney in the Eastern District of Virginia, and Assistant U.S. Attorney Ryan Dickey of the U.S. Attorney’s Office for the Eastern District of Virginia. The case was investigated jointly by the Washington Field Offices of both the U.S. Secret Service and the FBI, with assistance from the New York and New Jersey Field Offices of both agencies .
Tuesday 9 August 2011
Pennsylvania Man Pleads Guilty to Terrorist Solicitation and Firearms OffenseRead the Press Release
WASHINGTON – Emerson Winfield Begolly, 22, of New Bethlehem, Pa., pleaded guilty today in Pittsburgh to soliciting others to engage in acts of terrorism within the United States and to using a firearm during and in relation to an assault on FBI agents.
The plea was announced by Lisa Monaco, Assistant Attorney General for National Security; David J. Hickton, U.S. Attorney for the Western District of Pennsylvania; Neil H. MacBride, U.S. Attorney for the Eastern District of Virginia; James W. McJunkin, Assistant Director in Charge of the FBI’s Washington Field Office; and Michael A. Rodriguez, Special Agent in Charge of the FBI Pittsburgh Division.
“Today’s guilty plea underscores the need for continued vigilance against homegrown extremism and use of the Internet to incite violence,” said Assistant Attorney General Monaco.
“Too often prosecutions arise only after a perpetrator commits actions ending in tragedy,” said U.S. Attorney Hickton. “On this occasion, I commend the FBI for taking proactive steps to protect the people of the United States before any such tragedy could occur. I am proud of the coordination and cooperation of the various offices involved in this investigation in bringing Mr. Begolly to justice efficiently.”
“Jihadist propaganda on the Internet is a serious threat to our safety, and today’s plea is the latest example of our Office’s efforts to aggressively identify and prosecute homegrown terrorists,” said Neil H. MacBride, U.S. Attorney for the Eastern District of Virginia. “Extreme radicalization can happen anywhere, and this case underscores the need for continued vigilance against homegrown terror threats.”
“On a daily basis, Americans are faced with a complex threat environment that includes homegrown extremists who use web forums to share information and incite violence,” said Assistant Director in Charge McJunkin and Special Agent in Charge Rodriguez. “As this case unfolded, the FBI in Washington, DC and Pittsburgh, in close coordination with the Department of Justice and U.S. Attorney’s offices in Pittsburgh and Alexandria, Virginia, worked quickly and effectively to eliminate the threat against U.S. citizens.”
According to information presented by the government in court, Begolly was an active administrator on the Ansar al-Mujahideen English Forum (AMEF), which is an internationally used Islamic extremist Internet forum. Using the pseudonym of Abu Nancy, Begolly systematically solicited jihadists to use firearms, explosives and propane tanks against targets such as police stations, post offices, Jewish schools and daycare centers, military facilities, train lines, bridges, cell phone towers and water plants.
In the summer of 2010, Begolly urged jihadists on the AMEF to “write their legacy in blood.” Begolly promised a special place in the afterlife for violent action in the name of Allah. Following the reported shootings in Northern Virginia at the Pentagon and the Marine Corps Museum in October 2010, Begolly posted a comment online that praised the shootings and hoped the shooter had followed his previous postings encouraging similar acts of violence. On Dec. 28, 2010, Begolly further solicited his AMEF audience to violence by posting a manual on how to manufacture a bomb.
Days later, on Jan. 4, 2011, FBI agents were assaulted by Begolly as they attempted to prevent him from reaching a loaded 9 mm semi-automatic handgun, which he had concealed on his body. While violently struggling with the agents, Begolly bit the agents on their fingers in an attempt to free himself to reach his firearm. His actions are consistent with a posting in which he urged his audience not to be taken alive by law enforcement, to always carry a loaded firearm, and to aggressively resist any law enforcement encounter including biting fingers if necessary.
Senior U.S. District Court Judge Maurice B. Cohill scheduled sentencing for Nov. 29, 2011.
These cases are being investigated by the FBI Washington Field Office and the FBI Pittsburgh Field Office. Assistant U.S. Attorney Neil Hammerstrom of the U.S. Attorney’s Office for the Eastern District of Virginia’s National Security and International Crime Unit; Assistant U.S. Attorney James Kitchen of the U.S. Attorney’s Office for the Western District of Pennsylvania; and Trial Attorney Stephen Ponticiello of the Counterterrorism Section in the Justice Department’s National Security Division are prosecuting the cases.
Four Florida Men Charged in Boston with Defrauding Homeowners in Home Loan Modification ScamRead the Press Release
WASHINGTON - Four Florida men were arrested today on charges that they defrauded homeowners in Massachusetts and elsewhere in connection with a home loan modification scam, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney Carmen M. Ortiz for the District of Massachusetts and Christy Romero, Acting Special Inspector General for the Troubled Asset Relief Program (SIGTARP).
A 20-count indictment was unsealed today in federal court in Boston, charging Christopher S. Godfrey, 42, of Delray Beach, Fla.; Dennis Fischer, 40, of Highland Beach, Fla.; Vernell Burris Jr, 51, of Boynton Beach, Fla.; and Brian M. Kelly, 34, of Boca Raton, Fla., with conspiracy, wire fraud, mail fraud and misuse of a government seal. The defendants were arrested today by SIGTARP agents and will make their initial appearances in U.S. District Court in West Palm Beach, Fla., tomorrow at 10 a.m. EDT.
According to the indictment, Godfrey was the president and Fischer was the vice president and treasurer of a Florida company called Home Owners Protection Economics Inc. (HOPE). Burris was the manager and primary trainer of HOPE telemarketers, while Kelly was one of the principal telemarketers as well as a trainer for other HOPE telemarketers.
The indictment alleges that from January 2009 through May 2011, the defendants made, and instructed their employees to make, a series of misrepresentations to induce financially distressed homeowners looking for a federally-funded home loan modification to pay HOPE a $400-$900 up-front fee in exchange for HOPE’s home loan modifications, modification services and “software licenses.” According to the indictment, these misrepresentations included claims that homeowners were virtually guaranteed, with HOPE’s assistance, to receive a loan modification under the Home Affordable Modification Program (HAMP), which is part of TARP and is a federally-funded mortgage assistance program. Additional misrepresentations to homeowners included that HOPE was affiliated with the homeowner’s mortgage lender, that the homeowner had been approved for a home loan modification, that homeowners could stop making mortgage payments while they waited for HOPE to arrange their loan modification and that HOPE would refund the customer’s fee if the modification was not successful. HOPE also claimed that it operated as a non-profit organization.
In exchange for these up-front fees, HOPE allegedly sent its customers, including homeowners in Massachusetts, a do-it-yourself application package that was nearly identical to the application the U.S. government provides free of charge. HOPE instructed customers to fill out the application and submit it to their mortgage lender. According to the indictment, the HOPE customers who did use the provided forms to apply on their own for loan modifications had no advantage in the application process, and, in fact, most of their applications were denied. Through these misrepresentations, HOPE was able to persuade thousands of homeowners collectively to pay more than $3 million in fees to HOPE.
Godfrey and Fischer were charged with one count of conspiracy, nine counts of wire fraud, nine counts of mail fraud and one count of misuse of a government seal. Burris and Kelly were charged with one count of conspiracy, nine counts of wire fraud and nine counts of mail fraud. Each count of conspiracy and misuse of a government seal carries a maximum penalty of five years in prison and a $250,000 fine. Each count of mail and wire fraud carries a maximum penalty of 20 years in prison and a $250,000 fine. All of the defendants face possible orders of restitution.
An indictment is merely an allegation and defendants are presumed innocent unless and until proven guilty in a court of law.
The case was investigated by SIGTARP and is being prosecuted by Assistant U.S. Attorney Adam Bookbinder in the Computer Crimes Unit at the U.S. Attorney’s Office, and Mona Sedky of the Computer Crime and Intellectual Property Section in the Justice Department’s Criminal Division.
Alabama Man Sentenced to 30 Months in Prison for Role in Tax Fraud ConspiracyRead the Press Release
WASHINGTON – Eric Bernard Caldwell, a resident of Montgomery County, Ala., was sentenced today to 30 months in prison, the Justice Department and the Internal Revenue Service (IRS) announced. Judge William Albritton of the Middle District of Alabama also ordered Caldwell to pay $386,100.41 in restitution to the IRS.
According to court documents, Caldwell was part of a conspiracy to file false federal tax returns using stolen identities. Caldwell would provide identity information to co-conspirator Ora Mae Adamson, who would file the returns, in exchange for a cut of the illicit refunds generated by the false tax returns.
During the period in which Caldwell was a member of the conspiracy, the group defrauded the United States of approximately $380,000. Two other members of the conspiracy have already been sentenced. Adamson was sentenced to 46 months in prison on March 10, 2011, while another co-conspirator, Jeffrey Leon Ceaser, was sentenced to 36 months in prison on March 2, 2011. In all, the conspiracy defrauded the United States of more than $600,000.
John A. DiCicco, Principal Deputy Assistant Attorney General for the Department of Justice’s Tax Division, and George L. Beck Jr., U.S. Attorney for the Middle District of Alabama, commended the IRS special agents who investigated this case and Tax Division Trial Attorneys Jason Poole and Michael Boteler who prosecuted the case.
More information about the Tax Division and its enforcement efforts can be found at www.justice.gov/tax .
Monday 8 August 2011
U.S. Files Complaint Against Education Management Corp. Alleging False Claims Act ViolationsRead the Press Release
WASHINGTON – The United States has intervened and filed a complaint in a whistleblower suit pending under the False Claims Act against Education Management Corp. (EDMC) and several affiliated entities, the Justice Department announced today. In its complaint, the government alleges that EDMC falsely certified compliance with provisions of federal law that prohibit a university from paying incentive-based compensation to its admissions recruiters that is tied to the number of students they recruit. Congress enacted the incentive compensation prohibition to curtail the practice of paying bonuses and commissions to recruiters, which resulted in the enrollment of unqualified students, high student loan default rates and the waste of program funds.
“Colleges should not misuse federal education funds by paying improper incentives to admissions recruiters,” said Tony West, Assistant Attorney General for the Civil Division of the Department of Justice. “Working with the Department of Education, we will protect both students and taxpayers from arrangements that emphasize profits over education.”
“Federal tax dollars must be protected from abuse,” said David J. Hickton, U.S. Attorney for the Western District of Pennsylvania. “This action against EDMC seeks to recover a portion of the $11 billion in federal student aid which EDMC allegedly obtained through false statements and which enriched the company, its shareholders and executives at the expense of innocent individuals seeking a quality education.”
The False Claims Act allows for private citizens to file whistleblower suits to provide the government information about wrongdoing. The government then has a period of time to investigate and decide whether to take over the prosecution of the allegations or decline to pursue them and allow the whistleblower to proceed. If the United States proves that a defendant has knowingly submitted false claims, it is entitled to recover three times the damage that resulted and a penalty of $5,500 to $11,000 per claim. When the government intervenes, the whistleblower can collect a share of 15 to 25 percent of the United States’ recovery.
The suit was originally filed by Lynntoya Washington, a former EDMC admissions recruiter, who later filed an amended complaint, jointly with Michael T. Mahoney, a former director of training for EDMC’s Online Higher Education Division. The states of California, Florida, Illinois and Indiana have also intervened as plaintiffs.
The suit is United States ex rel. Washington et al. v. Education Management Corp. et al., Civil No. 07-461 (W.D. Pa.).
This matter was investigated by the Commercial Litigation Branch of the Justice Department’s Civil Division; the U.S. Attorney’s Office for the Western District of Pennsylvania; and the Department of Education, Office of Inspector General.
Justice Department Reaches Settlement with Pickens County, Ala., Board of Education to Eliminate Racial DisparitiesRead the Press Release
WASHINGTON - The Department of Justice today announced that it has entered into a settlement agreement with private plaintiffs and the Pickens County, Ala., Board of Education that requires the board to institute a series of educational reforms designed to eliminate the remaining vestiges of its formerly segregated school system.
Under the terms of the agreement, the board, in collaboration with the state of Alabama, will develop policies and programs to eliminate observed racial disparities in student discipline, grade retention, graduation rates and post-graduate scholarships. The agreement further obligates the board to intensify its efforts to recruit minority applicants for faculty and administrative positions, and to take steps to ensure that the assignment of certified and non-certified staff to district schools does not result in nor reinforce racially identifiable schools.
In conjunction with the parties’ agreement, the state of Alabama will establish and operate an early learning center that will provide educational services to four-year old children in Pickens County at no cost to parents. The state has also agreed to provide substantial training and educational expertise to assist the board in executing its obligations under the agreement, as well as its desegregation obligations more broadly.
“Equal access to educational opportunities is a fundamental civil right. This creative and comprehensive remedial plan will enhance educational opportunities for all students and puts the Pickens County School District on a path to unitary status,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “I thank all parties for their cooperation in reaching this agreement. Importantly, the state of Alabama is willing to invest scarce resources in a school district that is demonstrably committed to fulfilling its desegregation obligations.”
“The citizens of our state benefit when parties come together, as here, to ensure that all children, regardless of race, have equal access to the best possible educational opportunities,” said U.S. Attorney Joyce White Vance of the Northern District of Alabama.
The enforcement of existing desegregation orders and Title IV of the Civil Rights Act is a top priority of the Justice Department’s Civil Rights Division. Additional information about the Civil Rights Division of the Justice Department is available on its website at www.justice.gov/crt .
Friday 5 August 2011
Two Telecommunications Executives Convicted by Miami Jury on All Counts for Their Involvement in Scheme to Bribe Officials at State-Owned Telecommunications Company in HaitiRead the Press Release
WASHINGTON—Joel Esquenazi and Carlos Rodriguez, former executives of Terra Telecommunications Corp., have been convicted by a federal jury on all counts for their roles in a scheme to pay bribes to Haitian government officials at Telecommunications D’Haiti S.A.M (Haiti Teleco), a state-owned telecommunications company. The jury reached its verdict yesterday after five hours of deliberations, following a two-and-a-half-week trial.
The convictions were announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney Wifredo A. Ferrer for the Southern District of Florida; and Special Agent in Charge Jose A. Gonzalez of Internal Revenue Service, Criminal Investigation Division (IRS-CID), Miami Field Office.
“These defendants authorized more than $800,000 in illegal bribe payments to Haitian officials in exchange for business advantages – a clear violation of the FCPA,” said Assistant Attorney General Breuer. “This verdict is another powerful example that bribery of government officials – whether at home or abroad – has serious consequences. In finding the defendants guilty on all charged counts, the jury sent an unmistakable message that paying off foreign officials does not, in fact, pay off.”
“These individuals conspired and made corrupt payments to foreign government officials for the purpose of securing business advantages for their company,” said U.S. Attorney Ferrer. “The FCPA helps to create a more level playing field in which businesses can compete fairly and sends the message that American businesses are simply not up for sale.”
“These convictions send a strong and clear message that we will aggressively pursue investigations on subjects that use shell companies to launder funds,” said IRS Special Agent in Charge Gonzalez. “IRS-CID will utilize its financial investigative expertise to unravel any complex money laundering scheme leaving no financial stones unturned.”
Joel Esquenazi, 52, of Miami, and Carlos Rodriguez, 55, of Davie, Fla., were convicted of one count of conspiracy to violate the Foreign Corrupt Practices Act (FCPA) and wire fraud; seven counts of FCPA violations; one count of money laundering conspiracy; and 12 counts of money laundering.
According to the evidence presented at trial, Esquenazi was the president and Rodriguez was the executive vice president of Terra, which was headquartered in Miami-Dade County, Fla. Haiti Teleco was the sole provider of land line telephone service in Haiti. Terra had a series of contracts with Teleco that allowed the company’s customers to place telephone calls to Haiti.
According to the evidence presented at trial, the defendants participated in a scheme to commit foreign bribery and money laundering from November 2001 through March 2005, during which time the telecommunications company paid more than $890,000 to shell companies to be used for bribes to Teleco officials. Esquenazi and Rodriguez authorized these bribe payments to successive directors of international relations at Teleco.
The purpose of these bribes, according to the evidence presented at trial, was to obtain various business advantages from the Haitian officials for Terra, including the issuance of preferred telecommunications rates, reductions in the number of minutes for which payment was owed, and the continuance of Terra’s telecommunications connection with Haiti. To conceal the bribe payments, the defendants used various shell companies to receive and forward the payments. In addition, they created false records claiming that the payments were for “consulting services,” which were never intended to be performed or actually performed.
Esquenazi was remanded to the custody of the U.S. Marshals. Rodriguez remains free on bond. Sentencing for both defendants currently is scheduled for Oct. 13, 2011.
On April 27, 2009, Antonio Perez, a former controller at Terra, pleaded guilty to one count of conspiracy to violate the FCPA and money laundering. On Jan. 12, 2010, he was sentenced to 24 months in prison, which he is currently serving.
On May 15, 2009, Juan Diaz, the president of J.D. Locator Services, pleaded guilty to one count of conspiracy to violate the FCPA and money laundering. He admitted to receiving more than $1 million in bribe money from telecommunications companies. On July 30, 2010, he was sentenced to 57 months in prison, which he is currently serving.
On Feb. 19, 2010, Jean Fourcand, the president and director of Fourcand Enterprises Inc., pleaded guilty to one count of money laundering for receiving and transmitting bribe monies in the scheme. On May 5, 2010, he was sentenced to six months in prison.
On March 12, 2010, Robert Antoine, a former director of international affairs for Haiti Teleco, pleaded guilty to one count of conspiracy to commit money laundering. He admitted to receiving more than $1 million in bribes from Miami-based telecommunications companies. On June 2, 2010, he was sentenced to 48 months in prison, which he is currently serving.
In a superseding indictment, Washington Vasconez Cruz, Amadeus Richers, Cinergy Telecommunications Inc., Patrick Joseph, Jean Rene Duperval and Marguerite Grandison are charged in a related scheme to commit foreign bribery and money laundering from December 2001 through January 2006. No trial date is currently set. An indictment is merely an accusation, and defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.
The conspiracy to commit violations of the FCPA and wire fraud count carries a maximum penalty of five years in prison and a fine of the greater of $250,000 or twice the value gained or lost. The FCPA counts each carry a maximum penalty of five years in prison and a fine of the greater of $100,000 or twice the value gained or lost. The conspiracy to commit money laundering count carries a maximum penalty of 20 years in prison and a fine of the greater of $500,000 or twice the value of the property involved in the transaction. The money laundering counts each carry a maximum penalty of 20 years in prison and a fine of the greater of $500,000 or twice the value of the property involved in the transaction. The indictment also seeks forfeiture which will determined by the court at a later date.
The government’s investigation is ongoing. The Department of Justice is grateful to the government of Haiti for continuing to provide substantial assistance in gathering evidence during this investigation. In particular, Haiti’s financial intelligence unit, the Unité Centrale de Renseignements Financiers (UCREF), the Bureau des Affaires Financières et Economiques (BAFE), which is a specialized component of the Haitian National Police, and the Ministry of Justice and Public Security provided significant cooperation and coordination in this ongoing investigation.
To learn more about the government’s FCPA enforcement efforts, go to www.justice.gov/criminal/fraud/fcpa.
The case is being prosecuted by Senior Trial Attorneys Nicola J. Mrazek and James M. Koukios of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Aurora Fagan of the U.S. Attorney’s Office for the Southern District of Florida. The Criminal Division’s Office of International Affairs also provided assistance in this matter. The cases were investigated by the IRS-CID Miami Field Office.
Two Chinese Defendants Plead Guilty in Brooklyn, N.Y., to Trafficking in Counterfeit PerfumeRead the Press Release
WASHINGTON – Two defendants, Shaoxiong Zhou, 42, and Shaoxia Huang, 33, both of Shantou, Guangdong, China, have pleaded guilty to trafficking in counterfeit perfume, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney Loretta E. Lynch for the Eastern District of New York.
Zhou pleaded guilty today before U.S. Chief Magistrate Judge Steven M. Gold in Brooklyn, N.Y., to one count of trafficking in counterfeit goods. Huang pleaded guilty before Magistrate Judge Gold on Aug. 3, 2011, to one count of trafficking in counterfeit goods.
In their guilty pleas, Zhou and Huang admitted offering to supply counterfeit perfume to prospective buyers at a Las Vegas trade show in August 2010. A cargo shipment containing counterfeit perfumes was ultimately purchased and shipped to the United States in 2011. That shipment, which was seized by U.S. Customs and Border Protection upon arrival in the United States, was found to contain more than 30,000 units of perfume bearing counterfeit marks and made to resemble fragrance products from several well-known brands, including Lacoste, Polo Black and Armani Code.
At sentencing, both defendants face maximum penalties of 10 years in prison and a $2 million fine. Sentencing dates have not been set by the court.
The case is part of a federal investigation of the importation and distribution of counterfeit perfume and cosmetics products being conducted by the Assistant Special Agent in Charge, John F. Kennedy International Airport, of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations. The case is being prosecuted by Senior Counsel Jason Gull of the Computer Crime and Intellectual Property Section in the Justice Department’s Criminal Division.
The guilty plea announced today is an example of the type of efforts being undertaken by the Department of Justice Task Force on Intellectual Property (IP Task Force). Attorney General Eric Holder created the IP Task Force to combat the growing number of domestic and international intellectual property crimes, protect the health and safety of American consumers, and safeguard the nation’s economic security against those who seek to profit illegally from American creativity, innovation and hard work. The IP Task Force seeks to strengthen intellectual property rights protection through heightened criminal and civil enforcement, greater coordination among federal, state and local law enforcement partners, and increased focus on international enforcement efforts, including reinforcing relationships with key foreign partners and U.S. industry leaders. To learn more about the IP Task Force, go to www.justice.gov/dag/iptaskforce/.
Pittsburgh Crips Leader Pleads Guilty to Racketeering ChargesRead the Press Release
WASHINGTON – Robert Colbert, of Pittsburgh, pleaded guilty today in federal court to charges of conspiring to conduct a racketeering enterprise, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney David J. Hickton of the Western District of Pennsylvania.
Robert Colbert, 30, aka “Ballz,” pleaded guilty to one count of conspiracy to engage in a racketeering conspiracy before Senior U.S. District Judge Gustave Diamond in the Western District of Pennsylvania.
According to the guilty plea, Colbert and others participated in a pattern of racketeering activity that included robberies at gun point; attempted murders; distribution of cocaine, heroin and crack cocaine; obstruction of justice and witness intimidation.
According to court documents, Colbert was a member 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. The Brighton Place Crips were formed in the early 1990s; in 2003, it formed an alliance with the Northview Heights/ Fineview Crips. This alliance expanded the gang’s drug trafficking territory, and increased the number of gang members and associates available to preserve and protect the gang’s power, territory and profits through violence.
The Brighton Place/Northview Heights Crips gang maintains exclusive control over drug trafficking in these neighborhoods through continuous violence and intimidation of rivals and witnesses. Members of the gang support each other through payment of attorneys’ fees and bonds, as well as payments to jail commissary accounts and support payments to incarcerated members’ families.
In addition, gang members had violent confrontations with members of the rival Manchester 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.”
According to court documents, Colbert was considered a respected member and leader in the enterprise, due to his reputation for violence, as well as his demonstrated ability to instruct other members and associates on how to conduct gang affairs, including the possession and distribution of firearms, acts of violence, the possession and distribution of controlled substances and acts of witness intimidation. Colbert was also a distributor of controlled substances, including crack cocaine.
Colbert is one 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. To date, 21 members or associates of the Brighton Place/ Northview Heights Crips who were charged in this indictment have pleaded guilty to racketeering charges.
This case is being prosecuted by Assistant U.S. Attorneys Charles A. Eberle and Troy Rive tti of the Western District of Pennsylvania and Trial Attorney Kevin Rosenberg of the Criminal Division’s Organized Crime and Gang Section. The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives; the City of Pittsburgh Bureau of Police; the Allegheny County, Penn., Police Department; and the Allegheny County Sheriff’s Office.
New Orleans Police Officers Convicted of Civil Rights Violations in Danziger Bridge CaseRead the Press Release
WASHINGTON – A federal jury today convicted five officers from the New Orleans Police Department (NOPD) on 25 counts in connection with the federal prosecution of a police-involved shooting on the Danziger Bridge in the days after Hurricane Katrina and an extensive cover-up of those shootings, the Justice Department announced today. The incident resulted in the death of two civilians and the wounding of four others. The defendants will be sentenced before U.S. District Court Judge Kirk Englehardt on Dec. 14, 2011.
Four officers – Kenneth Bowen, Robert Gisevius, Robert Faulcon and Anthony Villavaso – were convicted in connection with the shootings of multiple victims, two of whom died. The four officers and a supervisor, Arthur “Archie” Kaufman, also were convicted of helping to obstruct justice during the subsequent investigations.
The evidence at trial established that officers Bowen, Gisevius, Faulcon and Villavaso opened fire on an unarmed family on the east side of the bridge, killing 17-year-old James Brissette, and wounding Susan Bartholomew, 38; Leonard Bartholomew III, 44; the Bartholomew’s daughter, Lesha, 17; and the Bartholomew’s nephew, Jose Holmes, 19. The Bartholomew’s 14-year-old son ran away from the shooting and was fired at, but was not injured.
According to testimony, the second shooting occurred minutes later on the west side of the bridge, where officers shot at brothers Lance and Ronald Madison, killing Ronald, a 40-year-old man with severe mental disabilities. Witnesses testified that Faulcon shot Ronald Madison in the back as Ronald Madison ran away. Furthermore, Bowen stomped and kicked Ronald Madison while wounded, but not yet dead. Ronald Madison later died at the scene.
“The officers convicted today abused their power and violated the public’s trust during the aftermath of Hurricane Katrina – exacerbating one of the most devastating times for the people of New Orleans,” said Attorney General Eric Holder. “I am hopeful today’s verdict brings justice for the victims and their family members, helps to heal the community andcontributes to the restoration of public trust in the New Orleans Police Department.”
The four officers convicted of killing civilians face potential multiple life sentences. The officers face additional penalties for the remaining counts, which include charges related to a conspiracy to cover-up what had happened on the bridge, and conspiracies to file charges against two of the victims, Lance Madison and Jose Holmes, on the basis of false evidence.
According to testimony at trial, officers at the scene of the shooting arrested Lance Madison and charged him with eight counts of attempting to kill police officers. Officers collected no guns or shell casings on the day of the shooting, and 30 casings they collected more than a month later were fired by officers rather than civilians. Madison was held in jail for three weeks, but was eventually released without indictment.
The evidence at trial established that Kaufman joined the other four defendants in a conspiracy to cover-up what had happened on the bridge and to make the shootings appear justified. According to testimony, Kaufman obtained a gun from his home and claimed to have found the gun at the bridge on the day after the shooting, and he also made up witnesses and then created statements from the fictional witnesses to help justify the shooting. There was also testimony that Kaufman held a meeting in an abandoned and gutted out NOPD building, where he instructed officers involved in the shooting to get their stories straight before giving formal audiotaped statements about the shooting.
Kaufman, who concluded in a formal report that the shooting was justified and that Lance Madison and Jose Holmes should be arrested, was also found guilty of conspiring with other officers to have Madison and Holmes prosecuted on the basis of false evidence.
Kaufman faces a maximum penalty of 120 years in prison.
The trial follows guilty pleas by five former NOPD officers who admitted that they participated in a conspiracy to obstruct justice and cover-up what happened on Sept. 4, 2005. The officers include former Lieutenant Michael Lohman, former Detective Jeffrey Lehrmann, and former Officers Michael Hunter, Robert Barrios and Ignatius Hills, all of whom testified during the trial.
This case was investigated by the FBI’s New Orleans Field Office, and was prosecuted by Deputy Chief Bobbi Bernstein and Trial Attorney Cindy Chung of the Justice Department’s Civil Rights Division, along with Assistant U.S. Attorney Theodore Carter of the Eastern District of Louisiana.
New Approach Launched to Reduce Tribal Alcohol and Substance Abuse ProblemsRead the Press Release
WASHINGTON – Attorney General Eric Holder, Department of Health and Human Services (HHS) Secretary Kathleen Sebelius and Department of the Interior (DOI) Secretary Ken Salazar today announced a new federal framework to assist American Indian and Alaska Native communities in achieving their goals in the prevention, intervention and treatment of alcohol and substance abuse.
The framework, captured in a Memorandum of Agreement (MOA) signed by Attorney General Holder, Secretary Sebelius and Secretary Salazar was published in the Federal Register today: www.gpo.gov/fdsys/pkg/FR-2011-08-05/pdf/2011-19816.pdf. It was called for in the Tribal Law and Order Act of 2010, which President Obama signed into law in July 2010.
The MOA describes how the Office of Indian Alcohol and Substance Abuse established in HHS’ Substance Abuse and Mental Health Services Administration (SAMHSA) will coordinate tribal substance abuse programs across the federal government with a special emphasis on promoting programs geared toward reaching youth and offering alternatives to incarceration.
“A truly holistic approach is necessary when addressing substance abuse in Indian Country because we know that where alcohol and substance abuse are prevalent, public safety concerns are similarly prevalent,” said Attorney General Holder. “This new office will help further the commitment of the Justice Department and our partner agencies to build and sustain safe, secure and healthy tribal communities.”
“Alcoholism and addiction are among the most severe public health and safety problems facing American Indian and Alaska Native people,” said HHS Secretary Sebelius. “It doesn’t have to be this way. With help that is based in the rich Indian culture these conditions just like other heath conditions can be successfully prevented and treated.”
“There is a clear need to align, leverage, and coordinate federal resources so that we can best support tribal efforts to build healthy and safe communities,” said DOI Secretary Salazar. “This new office will serve as the federal focal point for this critically important work.”
An interdepartmental coordinating council will guide the overall direction of the new federal effort to improve its work with tribal communities beginning with determining the scope of the problem – identifying and assessing national, state, tribal and local alcohol and substance abuse programs and resources; and creating standards for programs.
“The collaboration among agencies and departments that got us to this announcement today is already paying off,” SAMHSA Administrator Pamela S. Hyde said. “Our work with tribal communities has resulted in a new $50 million budget proposal in 2012 for Tribal Prevention Grants, better understanding of law enforcement and judicial training needs, and serious new work and investments in suicide prevention in Indian country.”
Justice Department Sues to Shut Down Alabama Tax Return PreparerRead the Press Release
WASHINGTON – The United States has filed a lawsuit seeking to stop Lakeisha Pearson from preparing federal tax returns for others, the Justice Department announced today. The government’s civil injunction complaint alleges that Pearson of Birmingham, Ala., operated under the trade names “LGS Tax Service,” “PositiveEndeavors LLC” and “AGA Tax Service,” and improperly claimed the earned income tax credit (EITC) on her customers’ tax returns to generate false or overstated tax refunds. Pearson also allegedly failed to comply with legal requirements for determining her customers’ eligibility for the EITC and the amount of their EITC claims.
The EITC is a refundable federal income tax credit for low-to-moderate-income working individuals and families. When the credit exceeds the amount of taxes owed, it results in a tax refund to those who claim and qualify for the credit. To qualify for the credit, taxpayers must have earned income from employment, self-employment or another source and meet certain other requirements.
According to the complaint, Pearson prepared almost 2,000 tax returns for tax years 2008 through 2011, more than 92 percent of which claimed the EITC. Pearson allegedly prepared returns fraudulently reporting income or improperly claiming individuals as a “qualifying child” in order to inflate or generate false EITC claims for her customers. According to the complaint, the Internal Revenue Service (IRS) estimates that the harm to the government from Pearson’s misconduct could be as high as $8.3 million.
The IRS has listed return preparer fraud as one of its “Dirty Dozen” tax scams for 2011. In the past 10 years, the Justice Department’s Tax Division has obtained injunctions against hundreds of unscrupulous tax return preparers and tax fraud promoters. Information about these cases is available on the Justice Department website .
Thursday 4 August 2011
Two Mexican Nationals Plead Guilty to Conspiracy to Commit Sex TraffickingRead the Press Release
MIAMI – The Justice Department announced today that two Mexican nationals, Israel Cortes-Morales, 31, and Alberto Cortes-Castro, 30, pleaded guilty in federal district court in Miami to charges of conspiring to commit sex trafficking of Mexican women.
According to the information presented in court, from 1999 through December 2010, the defendants forced multiple victims from Mexico to engage in prostitution in the United States for the defendant’s financial benefit.
With false promises of a better life, legitimate employment and marriage, the defendants lured victims from their homes in Mexico, knowing that they would actually force the women to be prostitutes here. The victims were compelled, through threats, psychological coercion and other means, to work within a prostitution circuit that spanned the east coast of the United States, including Miami.
“Human trafficking of this kind deprives its victims of their freedom and dignity, and will not be tolerated in this country. We will aggressively prosecute any individual who exploits others in this way for their own personal gain,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division.
Sentencing has been scheduled for Oct. 28, 2011. The case against a third defendant, Ernesto Cortes-Castro, 25, remains pending.
Earlier this year, Mexican authorities successfully prosecuted a third defendant, Jorge Velasquez, 24, for his role in the sex trafficking conspiracy. Velasquez was sentenced in Mexico to 18 years and three months in prison. Mexico prosecuted Velasquez along with three other Mexican traffickers.
The case is being prosecuted by Assistant U.S. Attorneys Marlene Rodriquez and Roy Altman, and Benjamin Hawk, Trial Attorney in the Civil Rights Divisions Human Trafficking Prosecution Unit.
Peace Corps Volunteer Charged with Sexually Abusing Children in South AfricaRead the Press Release
WASHINGTON - A Peace Corps volunteer was arrested today and charged in a federal criminal complaint with traveling from the United States to South Africa to engage in illicit sexual conduct with multiple children who were all younger than six years of age.
The arrest and charge were announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney David B. Fein for the District of Connecticut; Kathy A. Buller, Peace Corps Inspector General; and Bruce M. Foucart, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) office in Boston.
The criminal complaint alleges that Jesse Osmun, 31, of Milford, Conn., traveled to South Africa on Jan. 29, 2010. On March 25, 2010, Osmun was sworn in as a Peace Corps volunteer and began service as a volunteer at the Umvoti Aids Center (UAC) in Greytown, South Africa. The UAC is a non-governmental organization that provides support to the residents of the Greytown area affected by the AIDS virus. UAC also provides education, food and other child development services to children between the ages of three and 15. The UAC also has a center for the younger children often referred to as the preschool.
According to the complaint, Osmun, while volunteering at the UAC preschool, sexually molested at least five minor girls, all of whom were under the age of six, for approximately one year. The complaint also alleges that Osmun engaged in illicit sexual conduct with one of the girls, who is approximately five-years-old, twice a week over the course of five months.
“Mr. Osmun is charged with a shocking breach of the power entrusted to him as a Peace Corps volunteer,” said Assistant Attorney General Breuer. “Allegedly, he repeatedly sexually abused five minor girls under the age of six -- horrific crimes. Along with the international operation we announced yesterday -- Operation Delego -- this case is another example that the Justice Department will do everything in its power to bring to justice those who would exploit children, whether at home or abroad.”
“This defendant is alleged to have sexually abused very young girls, sometimes in exchange for candy, while he served as a Peace Corps volunteer at an AIDS center in South Africa,” said U.S. Attorney Fein. “We are committed to prosecuting those who sexually exploit children, the most vulnerable in society, in this country and abroad. I want to commend the diligent, swift and coordinated efforts of the Peace Corps’ Office of Inspector General and ICE Homeland Security Investigations in investigating this matter and arresting this individual.”
“We are committed to vigorous investigation and prosecution of those who exploit the mission of the Peace Corps to prey on innocent victims,” said Peace Corps Inspector General Buller.
“This arrest represents the very essence of the determination of federal, state and local law enforcement authorities to capture an individual whose primary objective, allegedly, was to sexually abuse vulnerable children,” said ICE HSI Special Agent in Charge Foucart. “I hope that this arrest sends a clear message that we will continue to aggressively pursue individuals who engage in this behavior to ensure that there is no place to hide here in the United States or anywhere in the world.”
After being confronted by the UAC program manager in May 2011, Osmun resigned from the Peace Corps. Osmun returned to the United States on June 2, 2011.
Following Osmun’s arrest today at his Milford residence, he appeared before U.S. Magistrate Judge Holly B. Fitzsimmons in Bridgeport, Conn., and has been ordered detained.
If convicted of the charge of traveling outside of the United States to engage in sexual conduct with a minor, Osmun faces a maximum penalty of 30 years in prison and a fine of $250,000.
A complaint is an allegation, and the defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
This case is being investigated by the Peace Corps Office of Inspector General and ICE HSI. Investigative assistance has been provided by members of the South African Police Service (SAPS); ICE’s attaché office in Pretoria, South Africa; the ICE Cybercrimes Center in Fairfax, Va., and the U.S. Department of State’s regional security office in Durban, South Africa. The case is being prosecuted by U.S. Attorney Fein, Assistant U.S. Attorney Krishna R. Patel and Trial Attorney Bonnie Kane of the Criminal Division’s Child Exploitation and Obscenity Section.
Metropolitan St. Louis Sewer District in Missouri to Pay $4.7 Billion to Cut Sewer OverflowsRead the Press Release
WASHINGTON – The Metropolitan St. Louis Sewer District (MSD) has agreed to make extensive improvements to its sewer systems and treatment plants, at an estimated cost of $4.7 billion over 23 years, to eliminate illegal overflows of untreated raw sewage, including basement backups, and to reduce pollution levels in urban rivers and streams, the Department of Justice and the U.S Environmental Protection Agency (EPA) announced today. This injunctive relief is historic in its scope and importance to the people of St. Louis.
The settlement reached between the United States, the Missouri Coalition for the Environment Foundation and MSD, requires MSD to install a variety of pollution controls, including the construction of three large storage tunnels ranging from approximately two miles to nine miles in length, and to expand capacity at two treatment plants. These controls and similar controls that MSD has already implemented will result in the reduction of almost 13 billion gallons per year of overflows into nearby streams and rivers.
MSD will also be required to develop and implement a comprehensive plan to eliminate more than 200 illegal discharge points within its sanitary sewer system. Finally, MSD will engage in comprehensive and proactive cleaning, maintenance and emergency response programs to improve sewer system performance and to eliminate overflows from its sewer systems, including basement backups, releases into buildings and onto property.
“We are fully committed to vigorous enforcement of the Clean Water Act, and will continue to work in partnership with EPA to advance the goal of clean water for all communities in our nation’s cities,” said Ignacia S. Moreno, Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. “The people of St. Louis, including those who live in minority and low-income communities, will receive tangible, lasting benefits from this significant settlement.”
“St. Louis, America’s Gateway City, grew up alongside the Mississippi. Unfortunately, for too long it treated the river’s tributaries as a dumping ground for sewage,” EPA Regional Administrator Karl Brooks said. “By moving forward with this Clean Water Act settlement, the community is facing its responsibilities. This agreement will bring jobs and long-term economic investments while significantly improving the environment for future generations.”
Today’s settlement will also significantly advance the use of large scale green infrastructure projects to control wet weather sewer overflows by requiring MSD to invest at least $100 million in an innovative green infrastructure program, focused in environmental justice communities in St. Louis. Environmental justice communities include low income or minority communities who have suffered a disproportionate burden from air, water or land pollution. Green infrastructure involves the use of properties to store, infiltrate and evaporate storm water to prevent it from getting into the combined sewer system. Examples of potential green infrastructure projects include green roofs, bioretention, green streets, rain barrels, rain gardens and permeable pavement.
MSD, in conjunction with the city of St. Louis economic redevelopment authorities, will transform numerous vacant or abandoned properties to productive use – helping to revitalize disadvantaged communities and resulting in cleaner air and green space. MSD will conduct public education and outreach, and collaborate with local residents and neighborhood groups, including those representing minority and/or low-income neighborhoods, in selecting the locations of green infrastructure projects.
MSD has also committed to spending $230 million in a mitigation program to alleviate flooding and another $30 million in enhanced pipe lining program, both of which are focused exclusively in environmental justice areas. These programs and the pioneering green infrastructure program of the settlement will further the Department of Justice and EPA’s work to advance environmental justice.
In addition to improving its sewer system and treatment plants, MSD will spend $1.6 million on a supplemental environmental project to implement a voluntary sewer connection and septic tank closure program for low-income eligible residential property owners who elect to close their septic tanks and connect to the public sewer. MSD will also pay a civil penalty of $1.2 million to the United States.
MSD’s sewer system collects and treats domestic, commercial and industrial wastewater from a population of approximately 1.4 million in the city of St. Louis and nearly all of St. Louis County. The system covers more than 525 square miles, and includes seven wastewater treatment plants, 294 pumping stations and more than 9,630 miles of sewer lines, making it the fourth largest sewer system in the United States.
The settlement resolves the claims brought by the United States in a lawsuit filed in June 2007 which the Missouri Coalition for the Environment Foundation later intervened under the citizen suit provisions of the federal Clean Water Act. In that lawsuit, among other things, the United States alleged that on at least 7,000 occasions between 2001 and 2005, failures in MSD’s sewer system resulted in overflows of raw sewage into residential homes, yards, public parks, streets and playground areas.
Overflows pose a significant threat to public health and water quality because raw sewage can have high concentrations of bacteria from fecal contamination, as well as disease-causing pathogens and viruses. These overflows can occur in basements, backyards, city streets, and directly into stream and rivers. This settlement goes a long way in preventing these overflows.
Today’s settlement is the latest in a series of Clean Water Act settlements that will reduce the discharge of raw sewage and contaminated stormwater into United States’ rivers, streams and lakes. Keeping raw sewage and contaminated stormwater out of the waters of the United States is one of EPA’s National Enforcement Initiatives for 2011 to 2013. The initiative focuses on reducing discharges from sewer overflows by obtaining cities’ commitments to implement timely, affordable solutions to these problems, including the increased use of green infrastructure and other innovative approaches.
The settlement, lodged today in U.S. District Court for the Eastern District of Missouri, is subject to a 30-day public comment period and court approval. A copy of the consent decree and its appendices is available on the Department of Justice website at www.justice.gov/enrd/Consent_Decrees.html .
Las Vegas Real Estate Agent Pleads Guilty to Tax Fraud and Bankruptcy Fraud ChargesRead the Press Release
WASHINGTON – German A. Posada of Las Vegas pleaded guilty before U.S. District Judge Philip M. Pro to charges of filing a false 2004 individual income tax return and making a false statement in a bankruptcy proceeding, the Justice Department and the Internal Revenue Service (IRS) announced today.
According to court documents and statements made in court, Posada admitted to filing a false individual income tax return, Form 1040, for 2004 that under-reported the income from his business as a real estate agent in the Las Vegas area. Between 2003 and 2005, Posada earned commission income from International Realty and another realtor. He asked that International Realty issue some of his commission checks in the name of his then-girlfriend, and deposited those checks into a bank account in her name. Posada also admitted under-reporting his business income on his 2003 Form 1040 and failing to file a timely 2005 Form 1040, despite knowing of his legal duty to report the approximately $557,212 in income that he received in 2005.
According to court documents and statements made in court, in 2005, Posada filed for bankruptcy in the U.S. Bankruptcy Court for the District of Nevada. In his May, 13, 2005, bankruptcy petition, and again in his Aug. 2, 2005, amended petition, he made false statements, including that: he had no current income; he had received no income during the two years immediately preceding 2005; and 17 creditors held unsecured non-priority claims totaling $466,885 against him. Then, on Sept. 2, 2005, at a meeting of creditors, Posada falsely testified under oath before the bankruptcy trustee that he had received “one or two” and “probably two” commissions since May 13, 2005, when in fact he knew that he had received at least 19 commission checks totaling $130,575 during that time period.
As part of his plea agreement, Posada agreed to pay restitution to the IRS in the amount of $212,016, and to pay restitution to any victims of the bankruptcy fraud, in an amount to be determined by the court at sentencing.
Sentencing has been set for Dec. 5, 2011, and Posada remains free on bail pending sentencing, where he faces a maximum sentence of three years in prison on the tax charge and five years in prison on the bankruptcy fraud charge.
Principal Deputy Assistant Attorney General John A. DiCicco of the Justice Department’s Tax Division and U.S. Attorney for the District of Nevada Daniel G. Bogden commended the investigative efforts of the IRS Criminal Investigation agents who investigated the case and Tax Division trial attorneys John P. Scully and Thomas W. Flynn, who are prosecuting the case.
More information about the Tax Division and its enforcement efforts can be found at www.justice.gov/tax.