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Newest first across public DOJ and U.S. Attorney press releases.
Monday 11 July 2011
California Firm to Pay U.S. $400,000 to Resolve False ClaimsRead the Press Release
WASHINGTON – PRIDE Industries, and its subsidiary, PRIDE Industries One, has agreed to pay the United States $400,000 to resolve allegations that it knowingly submitted false claims relating to a contract to provide maintenance services at the Department of the Army’s Ft. Bliss Army Base in El Paso, Texas, the Justice Department announced today.
The maintenance contract at Ft. Bliss is part of the AbilityOne Program, which procures contracts for goods or services in order to provide employment opportunities to people who are blind or have other significant disabilities. Under this mandatory source program managed by the Committee for Purchase From People Who Are Blind or Severely Disabled, a federal agency, contractors must ensure that 75 percent of all direct labor hours are performed by severely disabled employees. Between 2007 and 2010, PRIDE, which is based in Roseville, Calif., employed a large number of temporary, non-disabled employees as part of its maintenance staff but did not count their hours as part of its overall ratio. Accordingly, PRIDE reported false ratio numbers to NISH, the central nonprofit agency designated by the committee to help oversee the AbilityOne Program, as well as to the committee itself.
In addition, PRIDE overcharged the Department of the Army under its maintenance contract by adding unallowable costs and charging too much for labor.
“Providing jobs for disabled workers is a critical purpose of the AbilityOne Program,” said Assistant Attorney General for the Civil Division Tony West. “This resolution demonstrates that the Department will vigorously pursue government contractors who overcharge on their contracts as well as misstate the number of non-disabled workers they actually employ.”
“Ensuring the integrity of federal contracting programs is one of the objectives of the Affirmative Civil Enforcement unit in the U.S. Attorney’s Office,” said U.S. Attorney for the Eastern District of California Benjamin B. Wagner. “Results like these help accomplish that objective.”
The government’s investigation of PRIDE was initiated by a lawsuit filed under the False Claims Act’s qui tam or whistleblower provisions, which permit private parties to sue for false claims on behalf of the United States and to share in any recovery. The whistleblowers in this case, Timothy Hediger and Lois Perez, will receive $68,000 of the settlement.
“Today’s announcement is a testament to our solid and continued partnership with the Department of Justice and other law enforcement agencies in the fight against fraud,” said James Podolak, director of the Army Criminal Investigation Command’s Major Procurement Fraud Unit. “This clearly demonstrates our continued commitment to rooting out fraud, large or small, in the Department of the Army and that our commitment is stronger than ever.”
The government’s investigation was conducted by the Justice Department’s Civil Division; the U.S. Attorney’s Office for the Eastern District of California; the Army Criminal Investigation Command’s Major Procurement Fraud Unit; the Defense Criminal Investigative Service; and the Defense Contract Audit Agency.
Friday 8 July 2011
U.S. Army Contractor Sentenced to 42 Months in Prison for Stabbing at Kandahar Airfield in AfghanistanRead the Press Release
WASHINGTON – A U.S. Army contractor was sentenced today to 42 months in prison for stabbing another individual with a knife at Kandahar Airfield in Afghanistan, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division, U.S. Attorney Neil H. MacBride for the Eastern District of Virginia and James W. McJunkin, Assistant Director in Charge of the FBI’s Washington Field Office.
Sean T. Brehm, 45, of Capetown, South Africa, was sentenced by U.S. District Judge Anthony J. Trenga in the Eastern District of Virginia. Brehm pleaded guilty in April 2011 to one count of assault resulting in serious bodily injury. Judge Trenga also sentenced Brehm to three years of supervised release to follow his prison term.
According to court documents, the stabbing took place on Nov. 25, 2010. At the time of the stabbing, Brehm was working as a contractor for DynCorp International LLC, a U.S. Army contractor in Afghanistan. According to court documents, the stabbing resulted in serious bodily injury to the victim, who was a contractor with the U.S. Agency for International Development. The victim underwent emergency surgery immediately following the incident.
Brehm was charged under the Military Extraterritorial Jurisdiction Act (MEJA), a statute that gives U.S. courts jurisdiction to prosecute crimes committed outside the United States by, among others, contractors or subcontractors of the Department of Defense.
The case is being prosecuted by Assistant U.S. Attorney Ronald L. Walutes Jr. for the Eastern District of Virginia and Trial Attorney James S. Yoon of the Criminal Division’s Human Rights and Special Prosecutions Section.
The case was investigated by the FBI’s Washington Field Office. The U.S. Army Criminal Investigation Division and the International Security Assistance Force Military Police conducted the military investigation. The Office of Military Justice for Regional Command - South and 10th Mountain Division, and the Office of the Staff Judge Advocate for Regional Command - South provided invaluable assistance.
Justice Department Reaches Agreement with Rappahannock, Virginia, on Bailout from the Voting Rights ActRead the Press Release
WASHINGTON – The Justice Department announced that it has reached an agreement with Rappahannock County, Va., that will allow for the county and its two political subdivisions, the Rappahannock County School District and the town of Washington, to bail out from their status as “covered jurisdictions” under the special provisions of the Voting Rights Act, and thereby exempt these jurisdictions from the preclearance requirements of Section 5 of the Voting Rights Act. The agreement is in the form of a consent decree filed today in the U.S. District Court for the District of Columbia, and must be approved by the court.
Under Section 5 of the Voting Rights Act, certain covered jurisdictions, determined according to Section 4 of the act, are required to seek preclearance for any changes in voting qualifications, standards, practices or procedures from the U.S. District Court for the District of Columbia or from the U.S. Attorney General, prior to their implementation. Section 4 of the act provides that a covered jurisdiction may seek to “bail out,” or remove itself from such coverage, and therefore be exempted from the preclearance requirements, by seeking a declaratory judgment before a three-judge panel in U.S. District Court for the District of Columbia. A bailout judgment can be issued only if the court determines that the jurisdiction meets certain eligibility requirements for bailout contained in the statute, including a 10-year record of nondiscrimination in voting-related actions. The act also provides that the attorney general can consent to entry of a judgment of bailout only if, based upon investigation, the attorney general is satisfied that the jurisdiction meets the eligibility requirements.
Rappahannock County filed its bailout action in the U.S. District Court for the District of Columbia on June 17, 2011. Counsel for the county contacted the attorney general prior to filing the action, indicating that the county was interested in seeking a bailout. The county provided the Justice Department with substantial information, and the department conducted an investigation to determine the county’s eligibility. Based on that investigation, the department is satisfied that the county meets the Voting Rights Act’s requirements for bailout.
“In this case, the department carefully evaluated the information provided by the county and conducted its own investigation, which has satisfied us that the county is eligible for a bailout,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “I appreciate the cooperation of county officials in providing the department with the information requested, and in moving toward a resolution of this matter in the way envisioned by the Voting Rights Act.”
The consent decree details the legal and factual basis for a bailout determination and, if approved by the court, will grant the county’s request. The court will retain jurisdiction of the action for 10 years and can reopen the action upon the motion of the attorney general or any aggrieved person alleging conduct by the county that would have originally precluded the county from bailing out if it had occurred during the 10-year period preceding entry of the consent decree.
Information about bailout, the Voting Rights Act, and other federal voting laws is available on the Department of Justice website at www.justice.gov/crt/voting/ . Complaints may be reported to the Voting Section of the Justice Department’s Civil Rights Division at 1-800-253-3931.
Iowa Company Pleads Guilty to Participating in Ready-Mix Concrete Price-Fixing ConspiracyRead the Press Release
WASHINGTON – An Iowa-based company pleaded guilty today to participating in a price-fixing conspiracy for the sales of ready-mix concrete, the Department of Justice announced.
According to a one-count felony charge filed on June 24, 2011, in U.S. District Court in Sioux City, Iowa, VS Holding Co., which formerly operated as Alliance Concrete Inc., a producer of ready-mix concrete with headquarters in Orange City, Iowa, participated in a conspiracy with another ready-mix concrete company to fix prices for ready-mix concrete sold in the northern district of Iowa. The department said the company participated in the conspiracy beginning at least as early as January 2006 and continuing until as late as January 2008.
Ready-mix concrete is a product comprised of cement, aggregate (sand and gravel), water and other additives. The concrete generally is produced in a concrete plant and is transported by concrete-mixer trucks to work sites, where it is used in various types of construction projects, including buildings and roads.
According to the court documents, Steven VandeBrake, the former president of VS Holding Co., participated in the conspiracy by engaging in discussions and reaching agreements regarding the conspirators’ prices for ready-mix concrete sold in the northern district of Iowa. VS Holding Co. then accepted payment for those sales at collusive and noncompetitive prices, the department said.
VS Holding Co. is charged with violating the Sherman Act, which carries a maximum fine of $100 million for corporations. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.
Today’s plea is the result of an ongoing federal antitrust investigation of the ready-mix concrete industry in Iowa and its surrounding states. As a result of the investigation, three individuals have been convicted and sentenced to serve prison time, and, including VS Holding Co., three ready-mix concrete companies have pleaded guilty and are awaiting sentencing.
The investigation is being conducted by the Antitrust Division’s Chicago Field Office, the FBI’s Sioux City Resident Agency and the Department of Transportation’s Office of the Inspector General, with the assistance of the U.S. Attorney’s Office in Sioux City. Anyone with information concerning bid rigging, price fixing or territorial allocation related to the ready-mix concrete industry in Iowa and its surrounding states should contact the Antitrust Division’s Chicago Field Office at 312-353-7530 or visit www.justice.gov/atr/contact/newcase.htm.
Georgia Couple Pleads Guilty to Human Trafficking ChargesRead the Press Release
WASHINGTON – Juna Gwedolyn Babb, 56, and Michael J. Babb, 55, both of Ellenwood, Ga., pleaded guilty today in federal court to felony offenses related to a scheme to compel the labor of a young woman from the Kingdom of Swaziland in southern Africa, announced the Department of Justice.
“Schemes like this one target the most vulnerable in our society,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The department is committed to prosecuting individuals who engage in acts that exploit individuals who wish to work in our country.”
“This case reminds us that modern day slavery is occurring in our communities,” said U.S. Attorney Sally Quillian Yates. “This young woman believed that she was only traveling to the United States for a brief visit to help with a wedding. Instead, she was compelled to labor for the defendants for more than two years. It is especially disturbing that the victim was exploited by a minister and his wife.”
“Human trafficking, while taking on many forms, consists primarily of those who prey on the vulnerabilities of others for personal gain,” said FBI Special Agent in Charge Brian D. Lamkin. “That was, in fact, the case in this matter as a young woman from Swaziland was being forced into labor and was unsure of who to turn to for help. The FBI continues to aggressively pursue all allegations of human trafficking matters and is proud of the role that it played in bringing this case to a successful conclusion.”
“Few crimes are more shocking than the trafficking of human beings in this country,” said Brock Nicholson, Special Agent in Charge of the U.S. Immigration and Customs Enforcement’s (ICE) Office of Investigations in Atlanta. “No one should have to live in a world of isolation and forced servitude. Together with our federal, state and local partners, ICE Homeland Security Investigations is committed to protecting those who cannot protect themselves.”
According to the indictment and information presented in court, in or about March 2005, Juna Babb, while visiting the Kingdom of Swaziland, invited the victim, then a 29 year-old cook, to travel to the United States to cater for a family wedding. In fact, there was no wedding, and Juna Babb instead intended to harbor the woman in the United States and compel her to work as a housekeeper in her home for little or no pay. Subsequently, upon the victim’s arrival at the defendant’s home in Ellenwood, Juna Babb concealed her from detection by law enforcement while compelling her housekeeping services from in or about June 2005, through in or about February 2007. During this time, Juna Babb also threatened the victim over the debt she owed for her travel to the United States, and with arrest and deportation because she was in the United States illegally.
Michael Babb, a minister, knew of his wife’s harboring of the victim, as well as the fact that Juna Babb was compelling the victim’s labor. However, Michael Babb failed to notify an authority of the United States as soon as possible of the alien harboring, and affirmatively concealed his wife’s crime by denying that the victim worked as the defendants’ housekeeper to special agents of the FBI.
Juna Babb pleaded guilty to the offense of harboring an alien for financial gain, which carries a maximum penalty of 10 years in prison. Michael Babb pleaded guilty to the offense of misprision of a felony for concealing his wife’s criminal conduct and for lying to federal agents. This offense carries a maximum penalty of three years in prison. The defendants each agreed to pay $25,000 in restitution to the victim for her unpaid labor.
This case was investigated by the FBI and ICE. The case was prosecuted by Assistant U.S. Attorneys Richard Moultrie Jr. and Stephanie Gabay-Smith, and Deputy Chief Karima Maloney and Trial Attorney Nicole Lee Ndumele of the Civil Rights Division.
Former Port Isabel Detention Officer Charged with Violating Civil Rights of DetaineeRead the Press Release
WASHINGTON – A federal indictment returned by a McAllen, Texas, grand jury on June 7, 2011, charging former Port Isabel Detention Center Lieutenant Raul Leal with using excessive force on a detainee, obstruction of justice and lying to a federal agent was unsealed today following Leal’s arrest, the Justice Department announced.
Leal, 31, formerly of Harlingen, Texas, and currently of Albany, Ga., was arrested by special agents of the Department of Homeland Security Office of Inspector General (DHS-OIG) in Albany today without incident. Leal made an initial appearance before a U. S. Magistrate Judge in Albany, Texas, and has been ordered released on bond. The case will be prosecuted in the Brownsville Division of the Southern District of Texas. Leal is expect ed to appear for arraignment on the charges on a date to be set by the court in the near future.
The three count indictment was a result of an investigation conducted by special agents of the McAllen Field Office of DHS-OIG regarding an incident which occurred on June 14, 2009, at the Port Isabel Detention Center. According to the indictment, on that date, Leal allegedly assaulted an immigrant detainee by kicking him in the face resulting in a fracture of the detainee’s orbital bone. The indictment also accuses Leal of obstruction of justice alleging he knowingly concealed, covered up, falsified and made false entries in a detention center report dated June 15, 2009, about the incident. Leal is also charged with making a false statement to DHS-OIG agents when in September 2009 he claimed that the detainee had sustained the facial fracture when the detainee’s face inadvertently struck his knee.
The violation of civil rights charge carries a maximum statutory sentence of 10 years in prison, upon conviction. Obstruction of justice carries a maximum sentence of 20 years in prison. Making false statements to a federal agent carries a maximum sentence of five years in prison, upon conviction. All three counts carry a maximum fine of up to $250,000.
Assistant U.S. Attorney Kebharu Smith of the Southern District of Texas and Civil Rights Division Trial Attorney Saeed Mody are prosecuting this case.
Co-Owner of Two Health Care Companies Convicted on Multiple Health Care Fraud ChargesRead the Press Release
WASHINGTON – The co-owner of two health care companies was convicted late yesterday on multiple health care fraud charges related to his participation in a scheme to defraud Medicare, announced the Departments of Justice and Health and Human Services (HHS).
A federal jury in the Central District of California found Evans Oniha, 49, guilty of one count of conspiracy to commit health care fraud, four counts of health care fraud and one count of false statements relating to health care matters. Camillus Ehigie, 50, who co-owned and operated the health care companies with Oniha, pleaded guilty on July 5, 2011, to multiple health care fraud charges in connection with his participation in the fraud scheme. Oniha and Ehigie were indicted in February 2011. The indictment also seeks forfeiture from the defendants.
Oniha and Ehigie co-owned Caravan Medical Supplies Inc., a durable medical equipment (DME) company, and Prosperity Home Health Services Inc., a purported home health agency. According to the indictment, from October 2002 to February 2011, Oniha and Ehigie conspired with others to defraud Medicare by paying “marketers” for access to Medicare beneficiary information and fraudulent prescriptions and other documents for DME and home health services. The defendants used the fraudulent documents obtained from the marketers to submit and cause the submission of false claims to Medicare for DME and home health services that were not medically necessary, and that often were not provided to Medicare beneficiaries. According to court documents, Oniha and Ehigie caused Caravan to submit approximately $5.8 million in fraudulent claims to Medicare for DME purportedly provided by Caravan. The defendants caused Prosperity to submit approximately $8 million in fraudulent claims to Medicare for home health services purportedly provided by Prosperity. According to court documents, Ehigie also owned another DME company, Osbed Medical Supply. Ehigie caused Osbed to submit $6.1 million in fraudulent claims to Medicare.
Oniha is scheduled to be sentenced on Sept. 19, 2011, and Ehigie is scheduled to be sentenced on Jan. 30, 2012.
The case is being prosecuted by Trial Attorney William G. Kanellis and Deputy Chief Charles La Bella of the Criminal Division’s Fraud Section. The case was investigated by the FBI and HHS Office of Inspector General (HHS-OIG) and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Central District of California.
Since its 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.
Thursday 7 July 2011
North Carolina Corporate Hog Farm and President Plead Guilty to Violating the Clean Water ActRead the Press Release
WASHINGTON – Freedman Farms, Inc. and its president, William B. Freedman, pleaded guilty yesterday in federal court in New Bern, N.C., to violating the Clean Water Act when they discharged hog waste into a stream that leads to the Waccamaw River, the Department of Justice’s Environment and Natural Resources Division and the U.S. Attorney’s Office for the Eastern District of North Carolina announced today.
After a week of trial that began on June 28, 2011, Freedman Farms pleaded guilty to a felony violation of the Clean Water Act for discharging hog waste into Browder’s Branch, a tributary to the Waccamaw River that flows through the White Marsh, a large wetlands complex. Freedman Farms, located in Columbus County, N.C., is in the business of raising hogs for market, and this particular farm had some 4,800 hogs. The hog waste was supposed to be directed to two lagoons for treatment and disposal. In December 2007, hog waste was discharged from Freedman Farms directly to Browder’s Branch. William Freedman pleaded guilty to a misdemeanor violation of the Clean Water Act for his role in the discharge.
“Owners and operators of concentrated animal feeding operations must comply with the nation’s Clean Water Act for the protection of America’s streams, wetlands, and rivers,” said Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division at the Department of Justice. “Freedman and his farm failed to do so and should be held accountable for polluting waterways and wetlands in Columbus County and the Waccamaw River watershed.”
“The hog industry is vital to North Carolina. However, we must protect our natural resources that affect other vital interests in our beautiful state,” said U.S. Attorney George E.B. Holding. “In order to assure the well-being of all, we must ensure that everyone takes care of these precious and finite resources.”
“Large farms and dairies can cause serious damage to the environment if they illegally discharge wastewater into nearby lakes, rivers, and streams,” said Maureen O’Mara, Special Agent in Charge of EPA’s criminal enforcement program for North Carolina. “That is why EPA has made addressing violations by concentrated animal feeding operations an enforcement priority. In this case, waste products from nearly five thousand hogs went directly into a sensitive wetland area, jeopardizing the safety and health of water and wildlife. This guilty plea demonstrates that farm owners must obey the law and will be held responsible for their actions.”
The Clean Water Act is a federal law that makes it illegal to knowingly or negligently discharge a pollutant into a water of the United States. The act includes as waters of the United States those that have a significant nexus to a traditional navigable water.
According to the plea agreement, the government and the corporate defendant have jointly asked the court to sentence Freedman Farms to pay $1.5 million, serve a term of five years’ probation, and publish a public apology. Under the plea agreement for William Freedman, the defendant faces up to one year in prison.
If the court decides to accept the plea agreement, the sentencing hearing for both defendants will take place on a date to be scheduled by the court, before U.S. Chief District Judge Louise W. Flanagan.
The case was investigated by the U.S. Environmental Protection Agency (EPA) Criminal Investigation Division and the North Carolina State Bureau of Investigation, with assistance from the EPA Science and Ecosystem Support Division. The case is being prosecuted by the Assistant U.S. Attorney Gaston Williams of the Eastern District of North Carolina, and Trial Attorney Mary Dee Carraway of the Environmental Crimes Section of the Justice Department’s Environment and Natural Resources Division.
JPMorgan Chase Admits to Anticompetitive Conduct by Former Employees in the Municipal Bond Investments Market and Agrees to Pay $228 Million to Federal and State AgenciesRead the Press Release
JPMorgan Chase & Co. has entered into an agreement with the Department of Justice to resolve the company’s role in anticompetitive activity in the municipal bond investments market and has agreed to pay a total of $228 million in restitution, penalties and disgorgement to federal and state agencies, the Department of Justice announced today.
As part of its agreement with the department, JPMorgan admits, acknowledges and accepts responsibility for illegal, anticompetitive conduct by its former employees. According to the non-prosecution agreement, from 2001 through 2006, certain former JPMorgan employees at its municipal derivatives desk, entered into unlawful agreements to manipulate the bidding process and rig bids on municipal investment and related contracts. These contracts were used to invest the proceeds of, or manage the risks associated with, bond issuances by municipalities and other public entities.
“By entering into illegal agreements to rig bids on certain investment contracts, JPMorgan and its former executives deprived municipalities of the competitive process to which they were entitled,” said Assistant Attorney General Christine Varney in charge of the Department of Justice’s Antitrust Division. “Today’s agreements ensure that JPMorgan will pay restitution to the municipalities harmed by its anticompetitive conduct, disgorge its profits from the illegal activity and pay penalties for the criminal conduct. We are committed to rooting out anticompetitive activity in the financial markets and our investigation into the municipal bond derivatives industry, which has led to criminal charges against 18 former executives, remains active and ongoing.”
Under the terms of the agreement, JPMorgan agrees to pay restitution to victims of the anticompetitive conduct and to cooperate fully with the Justice Department’s Antitrust Division in its ongoing investigation into anticompetitive conduct in the municipal bond derivatives industry. To date, the ongoing investigation has resulted in criminal charges against 18 former executives of various financial services companies and one corporation. One of these charged executives, James Hertz, is a former JPMorgan employee. Nine of the 18 executives charged have pleaded guilty, including Hertz.
The Securities and Exchange Commission (SEC), the Internal Revenue Service (IRS), the Office of the Comptroller of the Currency (OCC), the Federal Reserve Board (Fed) and 25 state attorneys general also entered into agreements with JPMorgan requiring the payment of penalties, disgorgement of profits from the illegal conduct and payment of restitution to the victims harmed by the manipulation and bid rigging by JPMorgan employees, as well as other remedial measures.
As a result of JPMorgan’s admission of conduct; its cooperation with the Department of Justice and other enforcement and regulatory agencies; its monetary and non-monetary commitments to the SEC, IRS, OCC, Fed and state attorneys general; and its remedial efforts to address the anticompetitive conduct, the department agreed not to prosecute JPMorgan for the manipulation and bid rigging of municipal investment and related contracts, provided that JPMorgan satisfies its ongoing obligations under the agreement.
In May 2011, UBS AG agreed to pay a total of $160 million in restitution, penalties and disgorgement to federal and state agencies for its participation in anticompetitive conduct in the municipal bond derivatives market.
The department’s ongoing investigation into the municipal bonds industry is being conducted by the Antitrust Division, the FBI and the IRS-Criminal Investigation. The department is coordinating its investigation with the SEC, the OCC and the Federal Reserve Bank of New York. The department thanks the SEC, IRS, OCC, Fed and state attorneys general for their cooperation and assistance in this matter.
The Antitrust Division, SEC, IRS, FBI, state attorneys general, OCC and Fed are members of the Financial Fraud Enforcement Task Force. President Obama established the interagency task force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. For more information about the task force, visit www.stopfraud.gov.
DOJ, FTC Announce Changes to Streamline the Premerger Notification FormRead the Press Release
WASHINGTON – Following a public comment period, the Department of Justice and the Federal Trade Commission (FTC) have made changes to reduce the filing burden and streamline the form parties must file when seeking antitrust clearance of proposed mergers and acquisitions under the Hart-Scott-Rodino (HSR) Act and the Premerger Notification Rules.
The revisions are part of ongoing efforts by the department and the FTC to review their regulations, ensure that the rules are necessary and up-to-date, and eliminate unnecessary or potentially overly burdensome reporting requirements for business. The changes will make the HSR form easier to complete, reduce the burden for most filers and make the premerger notification review program more effective for both agencies.
The revised HSR form deletes several categories of information that over time have proven unnecessary in a preliminary merger review. For example, HSR filers will no longer be required to provide copies of documents – whether in hard copy or via electronic link – filed with the Securities and Exchange Commission, report economic code “base year” data or give a detailed breakdown of all the voting securities to be acquired. The new form also will require filers to provide the department and the FTC with narrowly focused additional documents that will help expedite the merger review process.
The revised form changes certain kinds of required reporting, such as revenue information by the North American Industry Classification System (NAICS) code, and the identity of holders and holdings of the entities making a filing. In addition, new concepts are introduced that are designed to expedite the antitrust review, including reporting information about “associates” of the acquiring person. Changes also include minor revisions to the HSR Rules to address omissions from the 2005 Rule changes involving unincorporated entities.
The Revision Process
Last August the department and the FTC sought public comments on the proposed changes. The agencies worked together to modify the original proposal in response to these comments to clarify the proposed amendments and to ensure that they accurately reflect both agencies’ interests in streamlining the HSR form. This will reduce burdens on businesses while still enabling the department and the FTC to obtain the information and documents they need in their merger review process.
The revised Rules can be found at www.ftc.gov/os/fedreg/2011/07/110707hsrfrn.pdf.
Armor Group North America and Its Affiliates Pay $7.5 Million to Resolve False Claims Act AllegationsRead the Press Release
WASHINGTON - Armor Group North America Inc. (AGNA) and its affiliates have paid the United States $7.5 million to resolve allegations that AGNA submitted false claims for payment on a State Department contract to provide armed guard services at the U.S. Embassy in Kabul, Afghanistan, the Justice Department announced today. The settlement resolves U.S. claims that in 2007 and 2008, AGNA guards violated the Trafficking Victims Protection Act (TVPA) by visiting brothels in Kabul, and that AGNA’s management knew about the guards’ activities. The settlement also resolves allegations that AGNA misrepresented the prior work experience of 38 third country national guards it had hired to guard the Embassy, and that AGNA failed to comply with certain Foreign Ownership, Control and Influence mitigation requirements on the embassy contract, and on a separate contract to provide guard services at a Naval Support Facility in Bahrain.
The settlement resolves a whistleblower suit filed in the U.S. District Court for the District of Columbia. The lawsuit was initially filed under seal by James Gordon against AGNA, ArmorGroup International plc, G4S plc and Wackenhut Services Inc. under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private individuals, called “relators”, to bring lawsuits on behalf of the United States and receive a portion of the proceeds of a settlement or judgment awarded against a defendant. Mr. Gordon will receive $1.35 million of the settlement proceeds. During 2007 and early 2008, Mr. Gordon was employed by AGNA, as its director of operations.
The case remained under seal to permit the United States to investigate the allegations and determine whether it would join the lawsuit. Under the False Claims Act, the United States may recover three times the amount of its losses, plus civil penalties. On April 29, 2011, the
United States joined the suit.
“These contracts are put in place to provide essential support to personnel who are serving in our missions overseas,” said Tony West, Assistant Attorney General for the Civil Division. “The Department of Justice will actively pursue its legal remedies where contractors falsely claim taxpayer dollars for services that fall short of material requirements in their government contracts.”
“Americans deserve to know that their tax dollars are being spent wisely and consistent with our values,” said U.S. Attorney Ronald C. Machen Jr. “Our office has targeted government contractors who fail to meet their obligations to the American people. With this settlement, the U.S. Attorney’s Office for the District of Columbia has now recovered more than $140 million in False Claims Act cases so far this year.”
“The Department of State appreciates the work done by the Department of Justice and the Office of the Inspector General in bringing this case to resolution. The Department of State takes any allegation of contractor misconduct seriously and works as part of the inter-agency community to ensure it is adjudicated properly,” said Ambassador Eric J. Boswell, Assistant Secretary of State for Diplomatic Security.
The Deputy Inspector General for the Department of State, Harold Geisel, said, “We’re pleased with the successful resolution of this case, and I commend the dedication of our OIG investigators. Our efforts should reinforce to American taxpayers that oversight of their tax dollars is taken seriously.”
Assistant Attorney General West and U.S. Attorney Machen thanked the joint investigation team, which includes Special Agents with the Department of State Office of Inspector General, and representatives from the Department of State and the Department of the Navy, for their efforts in the investigation of this matter.
Wednesday 6 July 2011
Miami Contractor Sentenced to 18 Months in Prison for Employment Tax FraudRead the Press Release
MIAMI – Reynaldo Orozco was sentenced to 18 months in prison by U.S. District Court Judge Adalberto Jordan for filing a false employment tax return, the Justice Department and the Internal Revenue Service (IRS) announced today. Orozco was also ordered to pay $504,047 in restitution to the United States.
Orozco previously pleaded guilty to one count of filing a false employment tax return on March 22, 2011. According to court documents, during 2004 through 2007, Orozco owned and operated Rock Construction Builders Inc. (RCB), a construction business located in Miami-Dade County. Orozco admitted that he issued RCB corporate checks to various other corporations holding them out to be legitimate subcontractors. In truth, these corporations did not perform work for RCB. Orozco cashed the checks at local check cashing stores and used the bulk of the cash obtained in this manner to pay RCB employees. Orozco failed to report the cash wages on quarterly employment tax returns and failed to withhold and pay over employment taxes on the wages.
From 2004 through 2007, RCB failed to report approximately $3,294,426 in cash wages to the IRS. Based on the conduct described above, the United States Treasury suffered an employment tax loss of approximately $504,047.
Wilfredo A. Ferrer, U.S. Attorney for the Southern District of Florida, and John A. DiCicco, Principal Deputy Assistant Attorney General for the Justice Department’s Tax Division, commended the IRS Special Agents who investigated this case and Tax Division Trial Attorneys Matthew J. Mueller and Gregory E. Tortella, who prosecuted the case.
Louisiana Oil Refinery Vice-President Pleads Guilty to Air Pollution Causing Negligent EndangermentRead the Press Release
WASHINGTON – The vice-president and general manager of the Pelican Refinery in Lake Charles, La., today pleaded guilty to federal negligent endangerment charges under the Clean Air Act before U.S. District Judge Richard T. Haik in Lafayette, La., announced Ignacia S. Moreno, Assistant Attorney General of the Environment and Natural Resources Division of the Department of Justice, and Stephanie A. Finley, U.S. Attorney for the Western District of Louisiana.
Byron Hamilton, 66, oversaw operations at the Lake Charles refinery since 2005 from an office in Houston. According to the charges filed in federal court, Hamilton negligently caused the release of hazardous air pollutants, including hydrogen sulfide, an extremely hazardous substance, into the air which placed persons in imminent danger of death and serious bodily injury.
The federal investigation was initiated after a March 2006 inspection by the Louisiana Department of Environmental Quality and EPA when inspectors found unsafe operating conditions, including unpermitted releases of hydrogen sulfide, storage of crude oil in unrepaired storage tanks, failure to repair emissions monitoring and control equipment, and the use of plastic children’s swimming pools to contain petroleum leaks.
In pleading guilty, Hamilton acknowledged that his negligence in overseeing operations at the refinery was a proximate cause of the releases and associated risks. Hamilton faces up to one year in prison and a $200,000 fine for each of the two Clean Air Act counts.
According to a joint factual statement filed in federal court:
- The company that Hamilton managed had no company budget, no environmental department and no environmental manager;
- In order to comply with a permit issued under the Clean Air Act, the refinery was required to use certain key pollution prevention equipment, but that equipment was either not functioning, poorly maintained, improperly installed, improperly placed into service and/or improperly calibrated, such that there were releases of pollutants into the atmosphere and at the refinery;
- It was a routine practice for over a year to use a standard signal flare gun to re-light the process flare at the refinery which was designed to burn off toxic gasses and provide for the safe combustion of potentially explosive chemicals because the pilot light was not functioning properly;
- Sour crude oil was stored in a tank that was not properly placed into service and remained in the tank after the roof sank;
- A caustic scrubber designed to remove hydrogen sulfide from emissions was bypassed; and
- A continuous emission monitoring system (CEMS) designed to measure hydrogen sulfide levels in emissions was not working properly.
In 2005 and 2006, the Pelican refinery processed “sour” crude supplied by its owners that had high concentrations of hydrogen sulfide (H²S), a highly toxic and flammable gas inherent to sour crude oil refining. H²S is classified as an “extremely hazardous substance.” It has a characteristic odor of “rotten eggs” at low concentrations. Refinery workers reported smelling H²S as well as having their personal H²S monitors “go off” from time-to-time. Pelican Refining Company had no procedure to record, track, report or mitigate H²S releases. At higher concentrations H²S paralyzes the sense of smell so that its odor is no longer perceived and can result in death.
The government’s investigation of the Pelican Refinery is continuing. Under the Crime Victims’ Rights Act, crime victims are afforded certain statutory rights including the opportunity to attend all public hearings and provide input to the prosecution. Any person adversely impacted is encouraged to visit www.justice.gov/usao/law/vicwit/index.html to learn more about the case and the Crime Victims’ Rights Act or you may contact the Victim Witness Coordinator for the U.S. Attorney’s Office, Western District of Louisiana, Vicki Chance at 318-676-3600.
The investigation is ongoing and is being conducted by the EPA Criminal Investigation Division in Baton Rouge and the Louisiana State Police, with assistance from the Louisiana Department of Environmental Quality. The case is being prosecuted by U.S. Attorney Stephanie Finley and federal environmental prosecutors Richard A. Udell, Christopher Hale and Rocky Piaggione of the Environmental Crimes Section of the Environment and Natural Resources Division of the U.S. Department of Justice.
Justice Department Obtains Comprehensive Agreement Regarding the State of Delaware's Mental Health SystemRead the Press Release
WASHINGTON - The Justice Department today announced that it has entered into a comprehensive agreement with the state of Delaware that will transform Delaware’s mental health system and resolve violations of the Americans with Disabilities Act (ADA). The ADA and the Supreme Court’s landmark decision in Olmstead v. L.C. afford individuals with disabilities the right to receive services in the most integrated settings appropriate to their needs, and today’s agreement will ensure individuals in Delaware can exercise that right.
The Justice Department in 2008 began its investigation of Delaware’s state hospital, and modified the scope of the investigation in 2010 to focus on violations of the ADA throughout the mental health system. The state worked cooperatively with the Justice Department to negotiate an agreement resolving alleged violations of the ADA.
“Across the country we are enforcing the rights of people with disabilities, affirmed by the Supreme Court more than a decade ago, to live and receive services in their communities,” said Thomas E. Perez, Assistant Attorney General for Civil Rights. “The services that the state of Delaware has agreed to provide under this agreement will enable people with mental illnesses living in Delaware to reside successfully in their homes and communities, rather than entering costly segregated facilities. As states around the country work to breathe life into the rights promised by the ADA and Olmstead, this agreement demonstrates Governor Markell and Attorney General Biden’s vision and leadership.”
The agreement expands community mental health services so that Delaware can serve people with severe and persistent mental illness in the most integrated settings appropriate to those individuals’ needs. Over the next five years, Delaware will prevent unnecessary hospitalization by expanding and deepening its crisis services, including a hotline, crisis walk-in centers, mobile crisis teams, crisis apartments and short term crisis stabilization programs. Delaware will also provide assertive community treatment teams, intensive case management, and targeted case management to individuals living in the community who need support to remain stable. In addition, the state will offer scattered-site supported housing to everyone in the agreement’s target population who needs that housing support. Finally, Delaware will offer supports for daily life, including supported employment, rehabilitation services and peer and family supports.
The Civil Rights Division enforces the ADA, which authorizes the attorney general to investigate whether a state is serving individuals in the most integrated settings appropriate to their needs. Visit www.justice.gov/crt to learn more about the Olmstead decision, the ADA and other laws enforced by the Justice Department’s Civil Rights Division.
The agreement in this case protecting the rights of individuals with mental illness in Delaware are due to the efforts of the following Special Litigation Section attorneys: Jonathan Smith, Chief; Judy Preston, Deputy Chief; Alison Barkoff, Special Counsel for Olmstead Enforcement; David Deutsch and Deena Fox, Trial Attorneys. In addition, the division received support and assistance from Shannon Hanson, Assistant U.S. Attorney for the District of Delaware.
Coinciding with One-Year Anniversary of “Operation Stolen Dreams,” Three Loan Officers and a Title Agent Charged in $2.5 Million Reverse Mortgage and Loan Modification SchemeRead the Press Release
WASHINGTON – The Justice Department announced today the unsealing of a criminal information earlier today, charging four defendants – Louis Gendason, 42, of Delray Beach, Fla.; Kimberly Mackey, 46, of Pittsburgh; John Incandela, 24, and Marcos Echevarria, 29, both of Palm Beach, Fla. – with conspiracy to commit wire fraud involving a nation-wide reverse mortgage scam that defrauded elderly borrowers, financial institutions and the Department of Housing and Urban Development (HUD). A reverse mortgage allows borrowers, who are at least 62 years of age, to convert the equity in their homes into a monthly stream of income, or a line of credit. Three of the defendants made their initial appearances at the federal courthouse in Fort Lauderdale, Fla., earlier today. If convicted, the defendants each face a statutory maximum term of up to 30 years in prison and a fine of up to $1 million. These charges coincide with the one-year anniversary of “Operation Stolen Dreams,” the department’s anti-mortgage fraud enforcement initiative announced by Attorney General Eric Holder last June.
These latest charges demonstrate the department’s continued commitment to the identification and eradication of mortgage fraud. The scheme charged today contains many of the characteristics common to mortgage fraud around the country. The information charges Louis Gendason, John Incandela and Marcos Echevarria with using a Florida-based loan modification business known as Lower My Debts.com L.L.C. as a front to identify elderly borrowers who were financially-vulnerable. They are alleged to have in their capacity as loan officers at 1st Continental Mortgage LLC. solicited borrowers to refinance their existing mortgages with a reverse mortgage loan financed by Genworth Financial Home Equity Access Inc. To induce Genworth and HUD to fund and insure the reverse mortgage loans, the defendants allegedly changed the unwitting borrowers’ real estate appraisal reports to fraudulently represent equity in the properties. The information alleges that Gendason, Incandela and Echevarria originated fraudulent loans on properties located in seven different states between May 2009 and November 2010 exceeding $2.5 million.
As a further part of the charged conspiracy, a fourth defendant, Kimberly Mackey, a licensed title agent and proprietor of the Pittsburgh title agency Real Estate One Land Services Inc., fraudulently closed the Genworth loans by failing to pay off the seniors’ existing liens. Instead, Mackey wired nearly $1 million in Genworth loan proceeds to the business checking account for Lower My Debts.com. She conspired to conceal the fraudulent loan closings from financial institutions by preparing written settlement documents which falsely represented that the borrowers’ existing mortgages had, in fact, been paid off. In some instances, after Mackey wired the loan proceeds to bank accounts in Florida controlled by her co-conspirators, she is alleged to have assisted them with defrauding the banks holding the borrowers’ first mortgages by negotiating fake short sales. This was designed to induce these banks to release their valid liens on the seniors’ properties at a fraction of their existing loan balance. All of the defendants are accused of pocketing the illegally-obtained loan proceeds.
“Protecting Americans from financial fraud is one of our top priorities,” said Tony West, Assistant Attorney General of the Justice Department’s Civil Division. “With these charges, we are taking another important step in the effort we began with Operation Stolen Dreams by holding accountable those whom we believe lined their own pockets with money that should have gone to help vulnerable seniors.”
“These defendants preyed on senior citizens on fixed and modest incomes. While legitimate loan modifications and reverse mortgages are useful tools to help those who need it, we will remain vigilant to make sure these tools are not misused by those who seek to line their own pockets,” said Wifredo Ferrer, U.S. Attorney for the Southern District of Florida. “We urge potential borrowers to use caution when entrusting their homes and savings to those offering financial alternatives, including loan modifications and reverse mortgages.”
This case was investigated by agents from the HUD-Office of Inspector General; the Internal Revenue Service-Criminal Investigation; the U.S. Postal Inspection Service; the FBI Miami Field Office; and the state of Florida’s Office of Financial Regulation. The case was prosecuted by Trial Attorney Kevin J. Larsen from the Civil Division’s Office of Consumer Protection Litigation, along with Assistant U.S. Attorneys Jeffrey H. Kay and Thomas P. Lanigan from the U.S. Attorney’s Office for the Southern District of Florida.
Anyone with knowledge of such schemes is encouraged to contact the HUD hotline at 1-800-347-3735.
Initiated in June 2010, Operation Stolen Dreams targeted mortgage fraudsters throughout the country and was the largest collective enforcement effort ever brought to bear in confronting mortgage fraud. The operation was organized by the Mortgage Fraud Working Group of President Obama’s interagency Financial Fraud Enforcement Task Force, which was established to lead an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The President’s Financial Fraud Enforcement 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. Operation Stolen Dreams targeted 1,517 criminal defendants nationwide, included 525 arrests, and involved an estimated loss of more than $3 billion.
The operation also resulted in 191 civil enforcement actions and the recovery of more than $196 million. Combating mortgage fraud continues to be a primary focus of the Civil Division. Since the end of Operation Stolen Dreams last June, Civil Division attorneys have continued to vigorously pursue mortgage fraud cases throughout the country, working with our partners in the U.S. Attorneys’ Offices and various federal agencies, specifically including HUD.
Brooklyn Neurologist Pleads Guilty in Health Care Fraud SchemeRead the Press Release
WASHINGTON – Leonard Langman, M.D., a neurologist who owned and operated a Brooklyn, N.Y., medical clinic pleaded guilty today for his role in a scheme to defraud Medicare; the U.S. Department of Labor, Office of Workers’ Compensation Programs (OWCP); the New York State Workers’ Compensation Board (NYS-WCB); the New York State Insurance Fund (SIF) and various private health insurance carriers, announced the Departments of Justice and Health and Human Services.
Dr. Langman pleaded guilty before U.S. District Judge Kiyo A. Matsumoto in Brooklyn to one count of health care fraud.
According to court documents, from January 2006 to December 2009, Dr. Langman caused false and fraudulent claims to be submitted to Medicare, OWCP, NYC-WCB, SIF and others. Langman submitted claims for services that were not provided; misrepresented the services he provided by billing for a level of service higher than that which he performed; double-billed different health care benefit programs for the same service provided to the same beneficiary; and billed for services purportedly performed when he was out of the country.
At sentencing, Dr. Langman faces a maximum sentence of 10 years in prison. Sentencing is scheduled for Dec. 2, 2011.
The guilty plea was announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney Loretta E. Lynch for the Eastern District of New York and Special Agent-in-Charge Thomas O’Donnell of the Department of Health and Human Services, Office of Inspector General (HHS-OIG).
The case is being prosecuted by Trial Attorney James Hayes of the Criminal Division’s Fraud Section. HHS-OIG, the U.S. Postal Service, Office of Inspector General and the New York State Workers Compensation Board, Office of Inspector General conducted the investigation. 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 Eastern District of New York.
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, the HHS Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov .
Assistant Attorney General Varney Announces Departure from Antitrust DivisionRead the Press Release
WASHINGTON – Christine Varney, Assistant Attorney General of the Antitrust Division, announced her resignation from the Department of Justice today, effective as of Aug. 5, 2011.
“Christine Varney led the Antitrust Division with great distinction through a period when the department confronted a number of proposed mergers and other matters that could have led to higher prices, lower quality products and less innovation in a recovering economy. There is no doubt that her tireless work helped protect consumers and businesses from anticompetitive conduct and preserved competition in America’s economy,” said Attorney General Eric Holder. “I will miss her leadership.”
“I am grateful for my two and a half years of service as Assistant Attorney General of the Antitrust Division,” Assistant Attorney General Varney said. “From the start of my time here, it has been a tremendous privilege to work with the department’s leadership and the dedicated professionals in the Antitrust Division.”
Shortly after confirmation, Assistant Attorney General Varney withdrew a previous department report that lowered the enforcement standards under Section 2 of the Sherman Act.
Assistant Attorney General Varney next worked with the Federal Trade Commission (FTC) to update the Horizontal Merger Guidelines, including by hosting a series of workshops and receiving public comments on proposed revisions to the Guidelines. Most recently, Assistant Attorney General Varney released a new Merger Remedy Guide. These policy undertakings combine to bring new levels of transparency and certainty to antitrust enforcement in the United States.
Under Assistant Attorney General Varney’s leadership, the division enhanced its focus on large international cartel cases as well as financial institution price-fixing cases in the U.S. municipal bond market. As a result, these cases have brought a billion dollars in fines and restitution to the victims of those conspiracies. In the last fiscal year, the division brought 60 cases on the criminal side, charging 84 defendants. In that year, the division obtained over $550 million in fines, more than $24 million in restitution and prison sentences totaling over 71 years.
Under Assistant Attorney General Varney’s leadership, the Antitrust Division also challenged several proposed mergers or industry practices that, if allowed to proceed, would have diminished competition and harmed consumer welfare, including NASDAQ OMX Group Inc. and IntercontinentalExchange Inc.’s joint bid to acquire NYSE Euronext; API Healthcare Corporation’s proposed merger with Kronos Inc.; and Blue Cross Blue Shield of Michigan’s attempt to purchase Physicians Health Plan of Mid-Michigan (PHP). Other transactions including LiveNation/TicketMaster; Comcast/NBC; Google/ITA were significantly altered by the parties in order to secure division approval.
During Assistant Attorney General Varney’s tenure, the Antitrust Division also strengthened its partnerships with agencies around the government to successfully prosecute crimes against the competitive process and review transactions in regulated industries. Under her leadership, the division worked closely with the Federal Communications Commission, the Securities and Exchange Commission, the Internal Revenue Service, the Commodity Futures Trading Commission, the Department of Transportation, the Federal Energy Regulatory Commission, the FTC and state attorneys general on a variety of cross-cutting civil and criminal issues. This collaboration includes the division’s ongoing investigation to resolve anticompetitive activity in the municipal bond investments market as well as a number of civil enforcement and competition policy matters.
Under Assistant Attorney General Varney’s leadership, the department and the U.S. Department of Agriculture joined together to host a series of workshops around the country to discuss competition and regulatory issues faced by the agriculture industry. More than 4,000 attendees — many traveling great distances — attended workshops in Ankeny, Iowa; Normal, Ala.; Madison, Wis.; Fort Collins, Colo.; and Washington, D.C. More than 230 people during more than 10 hours of public testimony were heard. In addition, the department received in excess of 18,000 comments to the division’s website.
In her role as head of the U.S. Delegation to the Organisation for Economic Co-Operation and Development’s Competition Committee and Chair of its Working Party, Assistant Attorney General Varney brought focus to the issues of international due process, procedural fairness and transparency - a critical issue for businesses and consumers in a global economy.
Assistant Attorney General Varney joined the department in April 2009 after being confirmed by the U.S. Senate. She previously served in government from 1993 to 1997 as an assistant to President Bill Clinton and FTC’s Commissioner.
Tuesday 5 July 2011
Tennessee Man Sentenced to Life in Prison for Racially-Motivated KillingRead the Press Release
WASHINGTON– The Justice Department announced today that Dale Mardis, 57, was sentenced today to life in prison, with no possibility of parole, for the racially-motivated killing of Shelby County, Tenn., Code Enforcement Officer Mickey Wright. Mardis was sentenced by U.S. District Judge Bernice Donald.
Mardis pleaded guilty on March 21, 2011, to the racially-motivated killing of Officer Wright. Last week, federal prosecutors and investigators discovered that Mardis murdered another man, Henry Ackerman, in the summer of 1998. They confronted Mardis with the new information on July 1, 2011, and Mardis confessed to the second murder.
Judge Donald imposed the life sentence after Mardis dropped his objections to the sentencing recommendation and admitted that his killing of Wright was first-degree murder. In addition to agreeing to the federal life sentence, Mardis also agreed to plead guilty to first-degree murder for the murder of Ackerman in Shelby County Criminal Court, and to be sentenced to life for that killing as well.
Mardis murdered Mickey Wright on April 17, 2001, and was federally indicted for the killing in January 2008 after pleading no contest to a state court murder charge.
“This defendant committed a heinous act of hate-filled violence, and today's life sentence sends an unmistakable message that such conduct will not be tolerated in our society,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “I am hopeful that this sentence will bring some sense of justice for Mickey Wright's loved ones.”
“Although nothing can ever undo their tragic loss, Mickey Wright’s family can take some comfort that Dale Mardis will never again set foot outside of a prison and never again breathe free air,” said U.S. Attorney Edward L. Stanton, III. “This life sentence marks an important day for the Wright family and for all the people of Memphis. Dale Mardis’s fate proves to the community that hate-crime murders remain a top priority of my office and of the whole federal government.”
“Brutal hate crimes like the one committed by Dale Mardis tear at the fabric of our society, and the Memphis Office of the FBI, through its Civil Rights Task Force, will aggressively pursue those who commit such crimes, aiding victims and helping to heal communities in the process,” said Special Agent in Charge of the Memphis FBI Field Office Amy Hess.
The case was investigated by the FBI and the Shelby County Sheriff’s Department. FBI Special Agent Tracey Harris and former Shelby County Detective Sergeant Joe T. Everson were the lead investigators on the case. The case was prosecuted by U.S. Attorney Edward L. Stanton, III; Assistant U.S. Attorney Stephen C. Parker, head of the Civil Rights Unit at the U.S. Attorney’s Office; and Jonathan T. Skrmetti, who began work on the case as a Trial Attorney with the Civil Rights Division of the U.S. Department of Justice and who is now an Assistant U.S. Attorney in Memphis.
Justice Department Sues Nation’s Largest Mortgage Insurance Provider for Discrimination Against Women on Paid Maternity LeaveRead the Press Release
WASHINGTON – The Justice Department announced today that it has sued the Mortgage Guaranty Insurance Corporation (MGIC), the nation’s largest mortgage insurance company, and two of its underwriters, Elgina Cunningham and Kelly Kane, for violating the Fair Housing Act by discriminating against women on paid maternity leave.
The suit, filed on July 5, 2011, in the U.S. District Court for the Western District of Pennsylvania, alleges that MGIC required women on paid maternity leave to return to work before the company would insure their mortgages. Most mortgage lenders require applicants seeking to borrow more than 80 percent of their home’s value to obtain mortgage insurance, meaning MGIC’s denials to women on maternity leave could cost those women the opportunity to obtain a home loan.
“No woman should be denied the opportunity to receive a mortgage loan simply because she has just given birth,” said Thomas E. Perez, Assistant Attorney General for the Justice Department’s Civil Rights Division. “Our nation’s fair housing laws prohibit this kind of discrimination, and the Justice Department is committed to aggressive enforcement of those laws.”
“It defies belief that, in 2011, any institution would discriminate against a mother for legally and properly taking leave after the birth of a child,” said U.S. Attorney for the Western District of Pennsylvania David Hickton. “My office will not stand idly by while parents suffer discrimination in lending simply for taking maternity or paternity leave.”
This lawsuit arose as a result of a complaint filed with the U.S. Department of Housing and Urban Development (HUD) by a Wexford, Penn., loan applicant. After investigating the complaint, HUD issued a charge of discrimination and referred the case to the Department of Justice after the complainant elected to have the case heard in federal court. The suit alleges that the defendants’ conduct constitutes discrimination based on sex and familial status, and seeks a court order prohibiting future discrimination by the defendants, monetary damages for those harmed by the defendants’ actions and a civil penalty.
The federal Fair Housing Act prohibits discrimination in housing and mortgage lending based on race, color, religion, national origin, sex, disability and familial status. More information about the Civil Rights Division and the laws it enforces is available at www.usdoj.gov/crt. Individuals who believe that they may have been victims of housing or lending discrimination can call the Housing Discrimination Tip Line at 1-800-896-7743, e-mail the Justice Department at [email protected], or contact HUD at 1-800-669-9777.
Justice Department Settles Fair Housing Lawsuit Against Michigan Mobile Home Operators for Discrimination Against Families with ChildrenRead the Press Release
WASHINGTON – The Justice Department today announced the settlement of a lawsuit alleging that the owner and operators of a Monroe, Mich., mobile home park violated the Fair Housing Act by discriminating against families with children. The case was brought by the Justice Department’s Civil Rights Division and the U.S. Attorney’s Office for the Eastern District of Michigan.
“In today’s economy, it is more important than ever that working families with children have the fair access to housing guaranteed by law” said Thomas E. Perez, Assistant Attorney General for the Justice Department’s Civil Rights Division. “We are committed to the aggressive enforcement of our nation’s fair housing laws.”
“People who are struggling to find housing for their families should not have their choices limited by illegal advertisements and policies,” said Barbara L. McQuade, U.S. Attorney for the Eastern District of Michigan.
The lawsuit, filed today along with the settlement in the U.S. District Court for the Eastern District of Michigan in Detroit, alleged that Tel-Clinton Trailer Courts Inc. – the owner and operator of Shamrock Village Mobile Home Park in Monroe – engaged in a pattern or practice of violating the Fair Housing Act by maintaining policies that prevented families with more than one child from residing there. The lawsuit also named as defendants Eugene J. Ponzio, the president of Tel-Clinton, and Mildred E. Wampler, the resident manager at Shamrock Village.
Under the settlement agreement, which must still be approved by the U.S. District Court, the defendants will pay $27,500 in damages and civil penalties, including a fund for individuals who suffered damages as a result of the defendants’ conduct. The defendants will also develop and maintain non-discrimination policies at Shamrock Village and provide fair housing training to their employees.
The government’s lawsuit arose when a family contacted the Fair Housing Center of Southeastern Michigan, a private non-profit organization located in Ann Arbor, Mich., after Shamrock Village told them that they could not live there because they were expecting their second child. The Fair Housing Center conducted fair housing testing at Shamrock Village, which confirmed that the defendants discriminated against families with children. The family filed a separate lawsuit, which settled earlier this year.
The federal Fair Housing Act prohibits discrimination in housing on the basis of race, color, religion, sex, familial status, national origin and disability. More information about the Civil Rights Division and the laws it enforces is available at www.usdoj.gov/crt . Individuals who believe that they may have been victims of housing discrimination at Shamrock Village Mobile Home Park should call the Housing Discrimination Tip Line at 1-800-896-7743, mailbox number 9993, or the U.S. Attorney’s Office’s civil rights hotline at 313-226-9151 or email the Justice Department at [email protected] . Individuals who believe they may have been victims of housing discrimination may also contact Department of Housing and Urban Development at 1-800-669-9777.
Justice Department Announces Agreement Protecting the Rights of Chinese and Spanish-Speaking Voters in Alameda County, CaliforniaRead the Press Release
WASHINGTON — The Civil Rights Division and the U.S. Attorney’s Office for the Northern District of California announced today an agreement with Alameda County, Calif., to ensure compliance with provisions of the Voting Rights Act that require the county to provide election materials and information in Spanish and Chinese.
“The right to vote is the foundation of our democracy, and language barriers should never keep citizens from accessing that right,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “Today’s agreement ensures that Alameda County’s Spanish and Chinese-speaking citizens will be able to cast an effective ballot and successfully participate in the electoral process. I congratulate Alameda County for their earnest cooperation in resolving this matter.”
The consent decree with Alameda County, which must still be approved by the federal district court, provides for a comprehensive language assistance program for Spanish and Chinese limited English proficient voters, including the dissemination of election-related materials and information in Spanish and Chinese. The consent decree requires the presence of trained bilingual election officials at polling places on election day. Further, Alameda County must make sure that all Spanish and Chinese-language signage is displayed as prominently as the English-language signage at the polling places throughout the county. The consent decree also establishes that Alameda County will develop an advisory group of interested community members and organizations that will assist the county in determining how to most effectively provide election materials, information, and assistance to Spanish and Chinese-speaking voters. The consent decree also provides that federal observers may monitor election day activities in polling places in Alameda County.
The Voting Rights Act requires that jurisdictions determined by the Census Bureau to have a substantial population of minority-language citizens, such as Alameda County, provide voting materials and assistance in the covered minority language as well as in English. Enforcement of the protections of the Voting Rights Act is a significant priority for the Civil Rights Division. Information about the Voting Rights Act and other federal voting laws is available on the Department of Justice website at www.justice.gov/crt/voting/ . Complaints may be reported to the Voting Section of the Justice Department’s Civil Rights Division at 1-800-253-3931.
El Departamento de Justicia Anuncia Acuerdo para Proteger los Derechos de Electores de Habla Hispana y China en el Condado de Alameda, CaRead the Press Release
WASHINGTON – El Departamento de Justicia anunció hoy un acuerdo con el Condado de Alameda, CA, para asegurar el cumplimiento de las disposiciones de la Ley de Derechos Electorales que exigen que el condado provea materiales e información electorales en español y chino.
“El derecho al voto es la base de nuestra democracia, y las barreras idiomáticas jamás deben privar a los ciudadanos de ejercer ese derecho", dijo Thomas E. Perez, Secretario de Justicia Auxiliar a cargo de la División de Derechos Civiles del Departamento de Justicia. “El acuerdo de hoy asegura que los ciudadanos de habla hispana y china del Condado de Alameda puedan emitir un voto efectivo y participar con éxito en el proceso electoral. Felicito al Condado de Alameda por su cooperación enfática para resolver este asunto".
El Decreto por Consentimiento con el Condado de Alameda, el que aún requiere aprobación del Tribunal de Distrito, provee un programa de asistencia idiomática integral para electores hispanos y chinos con conocimientos limitados del idioma inglés, incluida la diseminación de materiales e información electorales en español y chino. El Decreto por Consentimiento exige la presencia de oficiales electorales bilingües capacitados en los lugares de votación el Día de Elecciones. Asimismo, el Condado de Alameda debe asegurar que todos los carteles en idioma español y chino estén en lugares tan visibles como los carteles en idioma inglés en los lugares de votación de todo el Condado. El Decreto por Consentimiento también establece que el Condado de Alameda desarrollará un Grupo Asesor de miembros de la comunidad y organizaciones interesados que ayudará al Condado a determinar cómo proveer materiales, información y asistencia electorales de la manera más eficiente a electores de habla hispana y china. El Decreto por Consentimiento también dispone que observadores federales pueden controlar las actividades el Día de Elecciones en los lugares de votación en el Condado de Alameda.
La Ley de Derechos Electorales exige que las jurisdicciones que el Buró de Censos determine que tienen una población sustancial de ciudadanos de idiomas minoritarios, tales como el Condado de Alameda, provean materiales electorales y asistencia en el idioma minoritario cubierto así como en inglés. El hacer valer las protecciones de la Ley de Derechos Electorales es una prioridad importante para la División de Derechos Civiles. Para obtener información sobre la Ley de Derechos Electorales y otras leyes federales electorales, visite el portal del Departamento de Justicia en www.justice.gov/crt/voting/. Se podrán presentar quejas a la Sección de Votación de la División de Derechos Civiles del Departamento de Justicia al 1-800-253-3931.
Friday 1 July 2011
Justice Department Seeks to Shut Down Louisiana Tax PreparersRead the Press Release
WASHINGTON – The United States has filed a lawsuit in federal court in New Orleans seeking to bar two women and their tax preparation companies from preparing federal tax returns for others, the Justice Department announced today.
The government’s civil injunction complaint alleges that Cathy Vinnett, her daughter Lashanda Vinnett (both of whom reside in Destrehan, La.), and their companies – M&C Tax Service, D&C Tax Service, River Parish Tax Professionals and Remarkable Tax Services – prepared federal tax returns for customers that claimed fraudulent tax refunds based on fabricated telephone excise tax credits, earned income tax credits and first time homebuyer tax credits. The suit alleges that the Vinnetts retained most of the resulting refunds for themselves, without telling their customers. According to the complaint, the bogus refund claims have resulted in a tax harm to the government that could be as much as $2.2 million.
Return preparer fraud is on the Internal Revenue Service’s list of the “Dirty Dozen” tax scams for 2011. Over 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 false tax returns. More information about these cases is available on the Justice Department website .
Federal Court Permanently Bars Detroit Woman from Preparing Federal Tax ReturnsRead the Press Release
WASHINGTON – A federal court has permanently barred Tracey R. Randolph from preparing federal tax returns for others, the Justice Department announced today. The civil injunction order, to which Randolph consented, was signed by Judge Mark Goldsmith of the U.S. District Court for the Eastern District of Michigan. The order requires Randolph to provide the government with a list of all persons for whom she prepared returns for tax years 2003 through 2009.
The government complaint in the case alleged that Randolph of Detroit included fabricated deductions for charitable donations, employee business expenses and other expenses on tax returns that she prepared since 2006. The complaint further alleged that Randolph instructed her customers under audit by the Internal Revenue Service (IRS) to give false statements and fabricated documents to the IRS in order to give the false impression that the bogus deductions claimed on the returns were legitimate.
The same federal court previously entered a permanent injunction against Machista Choice. According to the government complaint, Choice of River Rouge, Mich., was Randolph’s former business partner with whom she worked under the business names “Nedra’s Way Tax Service” and “Olivia’s Way Tax Service.” The complaint alleged that Choice also prepared tax returns that included fabricated deductions.
Return preparer fraud is one of the IRS’s “Dirty Dozen” tax scams for 2011. In the past decade, the Justice Department’s Tax Division has obtained injunctions against hundreds of tax return preparers and tax fraud promoters. Information about these cases is available on the Justice Department website .
Departments of Justice and Education Reach Agreement with Tehachapi, California, Public Schools to Resolve Harassment AllegationsRead the Press Release
WASHINGTON – The Departments of Justice and Education reached a settlement agreement with the Tehachapi Unified School District in Tehachapi, Calif., to resolve an investigation into the harassment of a middle school student based on his nonconformity with gender stereotypes. Title IV of the Civil Rights Act of 1964 and Title IX of the Education Amendments of 1972 each prohibit harassment based on sex, including harassment based on nonconformity with gender stereotypes and sexual harassment.
In September 2010, Jacobsen Middle School student Seth Walsh committed suicide at the age of 13. In October 2010, the Department of Education received a complaint alleging that Walsh had been the victim of severe and persistent peer-on-peer sex-based harassment while he was a student at Jacobsen. After receiving the complaint, the Department of Education initiated an extensive investigation into the circumstances leading to Walsh’s death and, together with the Department of Justice, worked collaboratively with the school district to resolve the violations.
The investigation found that Walsh suffered sexual and gender-based harassment by his peers. The investigation also found that Walsh was targeted for harassment for more than two school years because of his nonconformity with gender stereotypes, including his predominantly female friendships and stereotypically feminine mannerisms, speech and clothing. The departments determined that the harassment, which included ongoing and escalating verbal, physical and sexual harassment by other students at school, was sufficiently severe, pervasive and persistent to interfere with his educational opportunities. Despite having notice of the harassment, the district did not adequately investigate or otherwise respond to it. Based on the evidence gathered in the investigation, the departments concluded that the school district violated Title IX and Title IV.
Under the terms of the resolution agreement, the district will take a variety of steps to prevent sexual and gender-based harassment at all of its schools, to respond appropriately to harassment that occurs and to eliminate the hostile environment resulting from harassment. The district has agreed to revise its policies and regulations related to sexual and gender-based harassment and to retain a consultant to provide mandatory trainings on sexual and gender-based harassment for all students, administrators, teachers, counselors and other staff who interact with students. In addition, the district will assess the presence of sexual and gender-based harassment in its schools through school climate surveys, adopt appropriate actions to address issues identified by those surveys and form an advisory committee of administrators, students and parents to advise the district on school climate issues related to sex-based harassment.
“All students have the right to go to school without fearing harassment on the basis of their sex, including because they do not conform to gender stereotypes. Seth’s story and others like it sadly demonstrate that a school’s failure to address and prevent harassment can have tragic consequences,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “We commend the school district for working with the departments to address this matter effectively and encourage other school districts to take affirmative steps to ensure that all students can go to school without facing discrimination and harassment.”
“We know that if students aren't safe, then students aren't learning,” said Assistant Secretary of Education for Civil Rights Russlynn Ali. “Bullying, sexual harassment and gender stereotyping – of any student, including LBGT students -- have no place in our nation’s schools. We must work to stop those abusive behaviors when they take place, repair their harmful effects, and prevent them from happening in the future. Today's announcement is an important step in that direction.”
The enforcement of Title IV and Title IX are top priorities of the Justice Department’s Civil Rights Division. Additional information about the Civil Rights Division is available on its website at www.justice.gov/crt . Enforcement of Title IX is also a top priority of Department of Education’s Office for Civil Rights. Additional information about the Office for Civil Rights is available on its website at www2.ed.gov/about/offices/list/ocr/index.html .
Thursday 30 June 2011
Washington, D.C.-based Academy for Educational Development Pays More Than $5 Million to Settle False Claims Act AllegationsRead the Press Release
WASHINGTON – The Academy for Educational Development (AED) in Washington, D.C., has agreed to settle allegations that the company submitted false claims to the United States Agency for International Development (USAID) in connection with two cooperative agreements under which AED provided foreign assistance in Afghanistan and Pakistan, the Justice Department announced today. Although certain terms of the settlement are contingent on future events, the agreement ensures that the United States will receive more than $5 million, and potentially could receive more than $15 million, to settle these claims.
The government alleges that AED failed to ensure that its actions under two cooperative agreements with USAID complied with applicable regulations concerning competition in procurements, adherence to contract specifications, and supervision of its subcontractors. The government further alleges that AED failed to inform USAID that AED had discovered defects in AED’s systems of internal controls and that certain of AED’s subcontractors may have engaged in corruption and other wrongful activities.
The two cooperative agreements covered by the settlement are the Federally Administered Tribal Area Livelihood Development Program (FATA-LDP) in Pakistan and the Higher Education Project in Afghanistan. AED’s alleged misconduct resulted in substandard work and the government being overcharged for services and goods.
“Fraud in connection with critical assistance programs overseas not only wastes taxpayer dollars, but can also put lives at risk and undermine our foreign relations,” said Tony West, Assistant Attorney General for Civil Division of the Department of Justice. “Working with our federal partners, we will use the strong tools at our disposal to fight procurement fraud no matter where in the world it occurs.”
“When our government undertakes foreign assistance programs around the world, it must be able to trust its partners,” said U.S. Attorney Ronald C. Machen Jr. “Contractors cannot be allowed to turn a blind eye to requirements designed to prevent fraud and corruption. This settlement should make contractors realize how serious we are about preserving the integrity of foreign assistance programs.”
In 2009, USAID’s Office of Inspector General learned of AED’s allegedly wrongful conduct in connection with the company’s overseas operations. As a result of additional investigation, USAID in May 2010 terminated for cause the FATA-DP agreement, one of the two cooperative agreements covered by the settlement agreement. In December 2010, USAID suspended AED from doing additional business with the federal government.
“The investigation that led to the settlement agreement is an example of the ongoing partnership between U.S. law enforcement agencies and Pakistani officials to help protect U.S. taxpayers,” said USAID Inspector General Donald A. Gambatesa.
Assistant Attorney General West noted that the settlement was the result of a coordinated effort among the Justice Department’s Civil Division; the U.S. Attorney’s Office for the District of Columbia; USAID, including its Office of Inspector General; the International Corruption Unit of the FBI; and the Pakistan National Accountability Bureau.
United States Sues Seattle-Area Man to Bar Him from Promoting Alleged “Form 1099-OID” Tax Fraud SchemeRead the Press Release
WASHINGTON – The United States has sued a Seattle-area man to stop him from promoting an alleged tax fraud scheme, the Justice Department announced today. The government’s civil injunction complaint alleges that John Lloyd Kirk promotes the use of fabricated Internal Revenue Service (IRS) Forms 1099-OID to report fictitious income tax withholding. Kirk’s customers allegedly file federal tax returns claiming huge tax refunds based on the fake withholding.
According to the complaint, Kirk, who resides in Des Moines, Wash., promotes the scheme through his business, the Indian Nations Advocate Law Office. Kirk allegedly holds seminars in the western United States and sells DVDs of his seminars to promote the tax scam. The complaint states that at least 31 of Kirk’s customers have used the scheme to make fraudulent tax refund claims totaling approximately $8 million.
Claiming bogus tax refunds based on false Forms 1099-OID is one of the IRS’s “Dirty Dozen” tax scams for 2011. In the past decade, the Justice Department’s Tax Division has obtained injunctions against hundreds of tax fraud promoters and unscrupulous tax return preparers. Information about these cases is available on the Justice Department website .
Statement of the Attorney General Regarding Investigation into the Interrogation of Certain DetaineesRead the Press Release
“O n January 2, 2008, Attorney General Michael Mukasey appointed Assistant United States Attorney John Durham of the District of Connecticut to conduct a criminal investigation into the destruction of interrogation videotapes by the Central Intelligence Agency. On August 24, 2009, based on information the Department received pertaining to alleged CIA mistreatment of detainees, I announced that I had expanded Mr. Durham’s mandate to conduct a preliminary review into whether federal laws were violated in connection with the interrogation of specific detainees at overseas locations. I made clear at that time that the Department would not prosecute anyone who acted in good faith and within the scope of the legal guidance given by the Office of Legal Counsel regarding the interrogation of detainees. Accordingly, Mr. Durham’s review examined primarily whether any unauthorized interrogation techniques were used by CIA interrogators, and if so, whether such techniques could constitute violations of the torture statute or any other applicable statute.
“In carrying out his mandate, Mr. Durham examined any possible CIA involvement with the interrogation of 101 detainees who were in United States custody subsequent to the terrorist attacks of September 11, 2001, a number of whom were determined by Mr. Durham to have never been in CIA custody. He identified the matters to include within his review by examining various sources including the Office of Professional Responsibility’s report regarding the Office of Legal Counsel memoranda related to enhanced interrogation techniques, the 2004 CIA Inspector General’s report on enhanced interrogations, additional matters investigated by the CIA Office of Inspector General, the February 2007 International Committee of the Red Cross Report on the Treatment of Fourteen “High Value Detainees” in CIA Custody, and public source information.
“Mr. Durham and his team reviewed a tremendous volume of information pertaining to the detainees. That review included both information and matters that had never previously been examined by the Department. Mr. Durham has advised me of the results of his investigation, and I have accepted his recommendation to conduct a full criminal investigation regarding the death in custody of two individuals. Those investigations are ongoing. The Department has determined that an expanded criminal investigation of the remaining matters is not warranted.
“As I noted at the time I announced the expansion of Mr. Durham’s authority, the men and women in our intelligence community perform an incredibly important service to our nation, and they often do so under difficult and dangerous circumstances. They deserve our respect and gratitude for the work they do. However, I concluded based on information available to me then, and continue to believe now, that the Department needed to thoroughly examine the detainee treatment issue. I am confident that Mr. Durham’s thorough review has satisfied that need.”
Pittsburgh Resident Pleads Guilty to Racketeering ChargesRead the Press Release
WASHINGTON – A Pittsburgh man 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.
James Pendelton, 30, aka “Jim Bob,” pleaded guilty before Senior U.S. District Judge Gustave Diamond to one count of conspiracy to engage in a racketeering enterprise.
According to the guilty plea, Pendelton and others participated in a pattern of racketeering activity that included multiple acts involving robberies at gun point; attempted murders; distribution of controlled substances, including cocaine, heroin and crack cocaine; and obstruction of justice and witness intimidation.
According to court documents, Pendelton associated with 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, Pendelton was a “connect” for the gang, supplying gang members with cocaine and crack cocaine.
Pendelton 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, 17 members or associates of the Brighton Place/ Northview Heights Crips who were charged in this indictment have pleaded guilty to racketeering charges. Pendleton’s sentencing is scheduled for Oct. 12, 2011.
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.
Miami-Area Psychiatrist Pleads Guilty for Role in $200 Million Medicare Fraud SchemeRead the Press Release
WASHINGTON - A Miami-area psychiatrist pleaded guilty today in U.S. District Court in Miami for his part in a fraud scheme that resulted in the submission of more than $200 million in fraudulent claims to Medicare, the Department of Justice, FBI and Department of Health and Human Services (HHS) announced.
Dr. Alan Gumer, 64, of Tamarac, Fla., pleaded guilty to one count of conspiracy to commit health care fraud. Gumer was charged on Feb. 15, 2011, with one count of conspiracy to commit health care fraud and four counts of health care fraud.
According to court documents, Gumer was a psychiatrist at American Therapeutic Corporation (ATC), a Florida corporation headquartered in Miami. ATC purported to operate partial hospitalization programs (PHPs) in seven different locations throughout South Florida and Orlando. A PHP is a form of intensive treatment for severe mental illness.
Gumer admitted that he signed evaluations, notes and other documents in medical files for patients who did not need the treatment for which ATC billed Medicare. Specifically, as a psychiatrist, Gumer knew that the patients attending ATC did not need intensive mental health treatment, and that the treatments offered by ATC were not the type of intensive treatments a PHP should provide. Gumer admitted that he signed these files without examining the patients, or writing and reading the statements he was signing. Gumer also admitted to writing prescriptions for psychiatric medications for patients who did not need them in order to make it appear to Medicare that the patients qualified for PHP treatment. According to court documents, Gumer also referred hundreds of ATC patients to a related company, the American Sleep Institute (ASI), for unnecessary diagnostic sleep disorder testing.
According to court filings, Gumer’s co-defendants and ATC’s owners and operators paid kickbacks to owners and operators of assisted living facilities (ALFs) and halfway houses and to patient brokers in exchange for delivering ineligible patients to ATC and ASI. In some cases, the patients received a portion of those kickbacks. Throughout the course of the ATC and ASI conspiracy, millions of dollars in kickbacks were paid in exchange for Medicare beneficiaries, who did not qualify for PHP services, to attend treatment programs that were not legitimate PHP programs so that ATC and ASI could bill Medicare for more than $200 million in medically unnecessary services.
According to the plea agreement, Gumer’s participation in the fraud resulted in $19.3 million in fraudulent billing to the Medicare program. Sentencing for Gumer is scheduled for Jan 19, 2012. Gumer faces a maximum of 10 years in prison and a $250,000 fine.
ATC, its management company Medlink Professional Management Group Inc., and the owners and lead manager of ATC, Medlink and ASI, were charged with various health care fraud, money laundering and other offenses in a separate superseding indictment unsealed on Feb. 15, 2011. Two of the three owners and the lead manager, as well as both ATC and Medlink, have pleaded guilty and have admitted to the fraudulent scheme and that more than $200 million in billings were submitted to the Medicare program as a part of the scheme. They are scheduled for sentencing on Sept. 14, 2011, by U.S. District Court Judge James Lawrence King. The trial of the third owner charged in the separate superseding indictment is scheduled to begin on Aug. 15, 2011.
The remaining 17 co-defendants named in the indictment in which Gumer was charged are scheduled to stand trial on Nov. 7, 2011, before U.S. District Judge Patricia A. Seitz.
An indictment is merely an accusation and defendants are presumed innocent unless and until proven guilty in a court of law.
Today’s guilty plea was announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida; John V. Gillies, Special Agent-in-Charge of the FBI’s Miami field office; and Special Agent-in-Charge Christopher Dennis of the HHS Office of Inspector General (HHS-OIG), Office of Investigations Miami office.
The criminal case is being prosecuted by Trial Attorney Jennifer L. Saulino of the Criminal Division’s Fraud Section. The case was investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida.
Since its inception in March 2007, the Medicare Fraud Strike Force operations in nine locations have charged more than 1,000 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 .
Las Vegas Physician to Pay U.S. $5.7 Million to Resolve False Claims Act Allegations Related to Radiation Oncology Services and Other ProceduresRead the Press Release
WASHINGTON – Rakesh Nathu, a Las Vegas physician, has agreed to pay the United States $5.7 million plus interest to settle allegations that he submitted false claims to federal health care programs for various radiation oncology services, including intensity modulated radiation therapy, the Justice Department announced today. Intensity modulated radiation therapy is a sophisticated radiation treatment indicated for specific types of cancer where extreme precision is required to spare surrounding organs or healthy tissue.
The government alleges that Nathu submitted improper claims to Medicare, TRICARE and the Federal Employees Health Benefits Plan from 2007 through 2009 in which he double billed for several procedures affiliated with radiation treatment plans, billed for certain high reimbursement radiation oncology services when a different, less expensive service should have been billed and billed for medically unnecessary radiation oncology services.
“We expect that physicians who participate in federal health care programs will bill for their services accurately and honestly,” said Tony West, Assistant Attorney General for the Department’s Civil Division. “Double or excessive billing for procedures and services, as we've alleged here, won't be tolerated by the Department of Justice or the taxpayers who pay for it.”
“Patients, employees, and others who suspect billing fraud on the part of doctors should not hesitate to report such fraud to federal authorities,” said U.S. Attorney for the District of Nevada Daniel G. Bogden. “Persons who file dishonest claims with the government in order to enrich themselves will be investigated and aggressively pursued by the Department of Justice.”
Assistant Attorney General West also noted that the settlement with this physician was the result of a coordinated effort among the Justice Department’s Civil Division, the U.S. Attorney’s Office for the District of Nevada and the Department of Health and Human Services’ Office of Inspector General.
“This case is about stealing millions of dollars from taxpayers,” said Daniel R. Levinson, Inspector General of the Department of Health and Human Services. “And we’ll continue to fight this kind of unconscionable abuse of our Medicare program.”
This resolution is part of the government’s emphasis on combating health care fraud and another step for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced by Attorney General Eric Holder and Kathleen Sebelius, Secretary of HHS in May 2009. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover more than $5.7 billion since January 2009 in cases involving fraud against federal health care programs. The Justice Department’s total recoveries in False Claims Act cases since January 2009 are more than $7.3 billion.
Justice Department Sues to Stop Orange County, California, Man<br /> from Selling Billions in Fake Tax CreditsRead the Press Release
WASHINGTON – The United States has sued an Orange County, Calif., man to stop him from selling bogus tax credits, the Justice Department announced today. According to the civil injunction complaint filed in a Los Angeles federal court, Lamar Ellis of Brea, Calif., fraudulently claims to have billions of dollars in federal research tax credits that the government supposedly granted him for purported scientific breakthroughs. The complaint states that Ellis claims to be a retired medical doctor, researcher and inventor.
The complaint alleges that Ellis has advertised his purported ownership of fake tax credits on various websites and has issued phony documents to individuals purporting to give them credits that can be used to reduce their tax obligations. Ellis has allegedly partnered with the Southwest Louisiana Business Development Center, a community development entity, in an attempt to sell $24 billion of fictitious tax credits.
According to the complaint, in 1998 the U.S. Securities and Exchange Commission sued Ellis for his involvement in a fraudulent investment scheme involving Ellis’s claimed invention of a “detoxification system” that could purportedly detoxify people of drugs or alcohol in as little as 15 minutes. The complaint states that Ellis and his co-defendants allegedly offered to sell unregistered stock in Ellis’s company, Lamelli Inc., as part of that scheme. According to the complaint, a court found that they falsely claimed to investors that the detoxification system had been approved by the National Institutes of Health and that Lamelli had received a grant from the Food and Drug Administration. The government alleges that a court ordered Ellis to disgorge his profits from the fraud and to pay a penalty.
In the last decade, the Justice Department’s Tax Division has obtained hundreds of injunctions to stop tax fraud promoters and unscrupulous tax return preparers. Information about these cases is available on the Justice Department website .
Justice Department Sues James J. Williams Bulk Service Transport in Washington to Protect Employment Rights of Air Force ReservistRead the Press Release
WASHINGTON - The Department of Justice today filed a lawsuit on behalf of Dave Axtell, a U.S. Air Force reservist, against James J. Williams Bulk Service Transport Inc. (JJW), its parent company Trans-System Inc., and another Trans-System subsidiary, System TWT Transportation Inc. The lawsuit alleges that the companies violated the Uniformed Services Employment and Reemployment Rights Act (USERRA) by failing to promptly and properly reemploy Axtell in April 2009, after he returned from military service in support of Operation Enduring Freedom. The complaint also alleges that the defendants unlawfully terminated Axtell’s employment without cause shortly after he was reemployed.
Subject to certain conditions, USERRA requires employers to promptly reemploy returning service members in the positions they would have held had their employment been not interrupted by military service or in a position of like seniority, status and pay. In addition, any individual with Axtell’s length of absence for military service who is reemployed cannot be terminated, except for just cause, within one year after the date of reemployment.
JJW is a trucking company that specializes in hauling hazardous materials. According to the department’s complaint, filed in the U.S. District Court for the Western District of Washington in Tacoma, the defendant companies violated USERRA by not promptly or properly reemploying Axtell in his previous pre-service position as a driver supervisor, or in a position with comparable seniority status and pay. The defendants waited three months to reemploy Axtell, and thereafter employed him in an unsalaried, lower status position requiring longer hours. Defendants terminated Axtell’s employment without cause shortly after reemploying him, also in violation of USERRA.
In its lawsuit, the Justice Department seeks the lost wages and benefits that Axtell would have received if he had been properly reemployed in his pre-service position as a driver supervisor, or a comparable position, as well as damages resulting from the unlawful termination of his employment. The complaint also seeks double damages because the defendants’ actions constituted a willful violation of USERRA. The case will be litigated by the U.S. Attorney’s Office based in Seattle.
“The men and women who wear our nation’s uniform deserve the comfort of knowing that they do not have to sacrifice their civilian employment in order to serve our country,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The Civil Rights Division is committed to aggressive enforcement of USERRA to protect the rights of those who, through their bravery and sacrifice, secure the rights of all Americans.”
“Just as our dedicated men and women of the military protect our freedoms overseas, we must protect their interests here at home,” said U.S. Attorney for the Western District of Washington Jenny A. Durkan. “These soldiers have made many sacrifices, and the loss of a career or appropriate pay when they return home, cannot be allowed.”
The Labor Department’s Veterans’ Employment and Training Service investigated and attempted to resolve Axtell’s USERRA complaint before referring it to the Justice Department for litigation. “Our two agencies work closely together to ensure that our service members are treated right when they return from service” said Ray Jefferson, Assistant Secretary of Labor for Veterans’ Employment and Training.
The Justice Department’s Civil Rights Division has given a high priority to the enforcement of service members’ rights under USERRA. Additional information about USERRA can be found on the Justice Department’s websites at www.usdoj.gov/crt/emp and www.servicemembers.gov, as well as on the Labor Department’s website at www.dol.gov/vets/programs/userra/main.htm.
Justice Department Reaches Agreement to Protect Rights of Military and Overseas Voters in New MexicoRead the Press Release
WASHINGTON – The Justice Department today announced that it has reached a supplemental agreement with New Mexico officials to help ensure that military service members and U.S. citizens living overseas will have an opportunity to participate fully in the 2012 federal general election cycle. The agreement is part of an ongoing case brought in 2010 to ensure New Mexico’s compliance with the Uniformed and Overseas Citizens Absentee Voting Act (UOCAVA), which requires states to give uniformed service voters (both overseas and within the United States) and their families and overseas citizens a reasonable opportunity to vote absentee in all Federal elections.
Today’s agreement, which must still be approved by the U.S. District Court in New Mexico, will partially extend a court-ordered consent decree previously entered to remedy New Mexico’s UOCAVA violations during the period leading to the November 2010 federal general election. In accordance with the consent decree, New Mexico recently passed legislation designed to provide more time for local election officials to prepare and transmit absentee ballots to military and overseas voters. Today’s agreement requires New Mexico to closely monitor its counties’ UOCAVA compliance, provide assistance to its counties when necessary, and report back to the United States about its UOCAVA compliance during the 2012 federal election cycle.
“The Justice Department continues to vigorously enforce UOCAVA so that members of the uniformed services, their families and other citizens living overseas are able to exercise their right to vote and know their votes will be counted,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “I am pleased that New Mexico has continued to work cooperatively with the department to reach this agreement, which helps ensure that the state’s military and overseas voters can participate fully in upcoming federal elections.”
“Particularly at a time when so many of our military service men and women are in harm’s way while courageously serving their country overseas, it is imperative that they and other overseas citizens have a meaningful opportunity to participate in the election of our nation’s leaders, and to know that their votes will be counted,” said Kenneth J. Gonzales, U.S. Attorney for the District of New Mexico. “I commend the department’s Civil Rights Division for vigorously enforcing the voting rights of all American citizens, including our service men and women.”
More information about UOCAVA and other federal voting laws is available on the Department of Justice website at www.justice.gov/crt/about/vot/misc/activ_uoc.php . Complaints may be reported to the Voting Section of the Justice Department's Civil Rights Division at 1-800-253-3931.
Fraudulent Business Opportunity Owner Sentenced in MiamiRead the Press Release
WASHINGTON – Robert Nicol was sentenced this week in connection with a series of Utah-based business opportunity fraud ventures, the Justice Department and the U.S. Postal Inspection Service announced. Nicol was sentenced by Miami Federal District Court Judge Patricia A. Seitz to a term of 125 months in prison and three years of supervised release. He was ordered to pay more than $5.2 million in restitution to victims of his offense.
Beginning in approximately January 2003, Nicol and his accomplices promoted business opportunities to consumers across the country under the business name Table Top Vending Inc. and, later, Gold Star Vending Inc. Potential buyers were told that they would receive everything needed to operate a profitable business. The business involved placing table top games into restaurant and other locations and collecting the coins patrons fed into those games. Nicol and other salesmen falsely promoted the venture as a high profit business and told potential buyers to contact references, who claimed to operate highly successful table top games. References used fake names and lied about their experiences with the business opportunity. In reality, consumers lost more than $5 million to the scheme.
The U.S. Postal Inspection Service executed a search warrant on the offices of Gold Star Vending in February 2007. Robert Nicol later fled the country. In March 2010, Nicol was apprehended in a remote location in the Philippines and the Republic of the Philippines deported him back to United States to face the charges pending against him.
Nicol is the last of seven defendants to be convicted and sentenced in connection with Gold Star Vending. Others charged included Seth Lehrenbaum, who provided Nicol with fraudulent references for the scheme and Nicol’s son, Charles Nicol, who served as a Table Top Vending and Gold Star Vending salesmen. Lehrenbaum and Charles Nicol were sentenced to 78 months’ and 41 months in prison, respectively.
“This defendant used his business opportunity scam to target those trying to make an honest living, and then fled to the Philippines when his fraud was discovered,” said Tony West, Assistant Attorney General for the Civil Division of the Department of Justice. “As this stiff sentence demonstrates, we will see to it that fraudsters who cheat others to make a quick buck cannot escape justice.”
“In recent years, over 100 individuals have been convicted and sentenced for business opportunity fraud in this District,” said Wifredo Ferrer, U.S. Attorney for the Southern District of Florida. “Fraudulent telemarketers must realize that all financial fraud will be prosecuted vigorously.”
“Fraudsters can run but they cannot hide. Robert Nicol joins a growing number of business opportunity defendants the U.S. Postal Inspection Service, along with prosecutors, have brought to justice after being apprehended in other countries,” said Henry Gutierrez, U.S. Postal Inspector in Charge in Miami. “This investigation illustrates the Postal Inspection Service’s firm resolve to protect the American public from financial fraud through the mails.”
Assistant Attorney General West and U.S. Attorney Ferrer commended the investigative efforts of the Postal Inspection Service. The case was prosecuted by Trial Attorney Phil Toomajian and Assistant Director Richard Goldberg of the U.S. Department of Justice, Office of Consumer Protection Litigation.
Former United Nations Employee Charged in Connection with a $100,000 Fraud Scheme Involving Concurrent JobsRead the Press Release
WASHINGTON — A former employee of the United Nations (U.N.) was arrested today for allegedly obtaining more than $100,000 in salary payments as a result of holding jobs at the U.N. and the National Labor Relations Board (NLRB) at the same time, 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.
Jeffery K. Armstrong, 51, of South Riding, Va., was charged in a nine-count indictment unsealed today in the Eastern District of Virginia with wire fraud stemming from a scheme to defraud the U.N., an international organization committed to humanitarian and peace-keeping efforts, and the NLRB, an independent agency of the U.S. government.
According to the indictment, in March 2008 Armstrong took a leave of absence from his position as a supervisory security specialist with the Department of the Army to accept a full-time position at the U.N. in New York City. As an assistant chief of the Security and Safety Service within the Department of Safety and Security at the U.N., Armstrong was responsible for all physical security of U.N. facilities in New York City, among other functions. According to the indictment, Armstrong received an annual salary from the U.N. of approximately $160,000. The indictment alleges that in February 2009, after working at the U.N. for almost a year, Armstrong applied for a position as chief of the security branch within the Division of the Administration at the NLRB in Washington, D.C. According to the indictment, Armstrong began work at the NLRB on April 13, 2009, with an annual salary of approximately $121,000.
The indictment alleges that between the middle of April and the end of September 2009, Armstrong was an employee of both the U.N. and the NLRB, receiving more than $100,000 in salary payments from the two entities. Armstrong allegedly concealed his dual employment from both employers by, among other things, dissuading NLRB personnel from contacting his supervisor at the U.N., submitting incomplete or inaccurate employment forms to the NLRB, and causing to be mailed to the NLRB false correspondence suggesting that he no longer worked at the U.N. In addition, Armstrong allegedly submitted medical leave documentation to the U.N., indicating that he was unable to work and was undergoing medical treatment, despite his full-time employment at the NLRB. According to the indictment, Armstrong failed to notify his superiors at both entities of his concurrent employment.
Armstrong made his initial appearance this morning before U.S. Magistrate Judge Theresa C. Buchanan in Alexandria, Va. Arraignment is scheduled for July 7, 2011, before U.S. District Judge Gerald B. Lee.
If convicted, Armstrong faces 20 years in prison and a fine of $250,000 on each wire fraud count.
The case is being prosecuted by Eric G. Olshan of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney Karen L. Dunn of the U.S. Attorney’s Office for the Eastern District of Virginia. The case was investigated by the FBI’s Washington Field Office and the NLRB Office of Inspector General.
An indictment is merely an allegation, and a defendant is presumed innocent until proven guilty beyond a reasonable doubt.
Former Chairman of Taylor, Bean & Whitaker Sentenced to <br /> 30 Years in Prison and Ordered to Forfeit $38.5 MillionRead the Press Release
WASHINGTON – The former chairman and owner of Taylor, Bean & Whitaker (TBW) was sentenced today to 30years in prison and ordered to forfeit approximately $38.5million for his role in a more than $2.9 billion fraud scheme that contributed to the failure of TBW and Colonial Bank. At one time, TBW was one of the largest privately held mortgage lending companies in the United States and Colonial Bank was one of the 25 largest banks in the United States.
Lee Bentley Farkas was sentenced today by U.S. District Judge Leonie M. Brinkema in the Eastern District of Virginia. The sentence was announced by Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney Neil H. MacBride for the Eastern District of Virginia; Acting Special Inspector General Christy Romero for the Troubled Asset Relief Program (SIGTARP); Assistant Director in Charge James W. McJunkin of the FBI’s Washington Field Office; Michael P. Stephens, Deputy Inspector General of the Department of Housing and Urban Development (HUD-OIG); Jon T. Rymer, Inspector General of the Federal Deposit Insurance Corporation (FDIC-OIG); Steve A. Linick, Inspector General of the Federal Housing Finance Agency (FHFA-OIG); and Victor S. O. Song, Chief of the Internal Revenue Service-Criminal Investigation (IRS-CI).
On April 19, 2011, after a 10-day trial, a federal jury found Farkas, 58, of Ocala, Fla., guilty of 14 counts, including one count of conspiracy to commit bank, wire and securities fraud; six counts of bank fraud; four counts of wire fraud; and three counts of securities fraud. According to court documents and evidence presented at trial, Farkas and his co-conspirators engaged in a scheme that misappropriated more than $1.4 billion from Colonial Bank’s Mortgage Warehouse Lending Division (MWLD) in Orlando, Fla., and approximately $1.5 billion from Ocala Funding, a mortgage lending facility controlled by TBW. Farkas and his co-conspirators misappropriated this money to, among other things, cover TBW’s operating expenses. The fraud scheme contributed to the failures of Colonial Bank and TBW.
Six other individuals have pleaded guilty and have been sentenced for their roles in the fraud scheme. Catherine Kissick, a former senior vice president of Colonial Bank and head of the mortgage warehouse lending division MWLD was sentenced to eight years in prison. Desiree Brown, the former treasurer of TBW, was sentenced to six years in prison. Paul Allen, the former chief executive officer of TBW, was sentenced to 40 months in prison. Ray Bowman, the former president of TBW, was sentenced to 30 months in prison. Teresa Kelly , a former operations supervisor for Colonial Bank’s MWLD, and Sean Ragland, a former senior financial analyst at TBW, were each sentenced to three months in prison.
The Securities and Exchange Commission (SEC) has civil actions pending against Farkas, Brown, Kissick, Kelly and Allen in the Eastern District of Virginia.
“Lee Farkas’ boundless greed ultimately led not to a life of luxury, but to a prison cell,” said Assistant Attorney General Breuer. “Mr. Farkas orchestrated a fraud of staggering proportions, the effects of which are still being felt by the thousands of former employees of TBW and Colonial Bank, and shareholders of Colonial BancGroup. From a $28 million private jet and vacation homes in Maine and Key West, to expensive antique cars and restaurants, Mr. Farkas plundered his company and Colonial Bank to prop up his failing business and to feed his ostentatious lifestyle. When greed and risky behavior lead individuals to break the law, we will do everything in our power to investigate, prosecute and punish those responsible.”
“Today’s sentence ensures that Lee Farkas will spend the rest of his life in prison and is just punishment for a man who pulled off one the largest bank frauds in history,” said U.S. Attorney MacBride. “Between 2007 and August 2009, as the country faced one of the worst financial crises in recent history – largely sparked by fraudulent mortgage-related transactions – Farkas ramped up his scheme to rip off banks through sales of fake mortgage assets and by double-and triple-selling mortgage loans. By causing the failure of Colonial Bank and TBW, two significant players in the mortgage market, Farkas’s scheme affected those at the heart of the financial crisis, including major financial institutions, government agencies, taxpayers, and employees and investors.”
According to court documents and evidence presented at trial, the fraud scheme began in 2002, when Farkas and his co-conspirators ran overdrafts in TBW bank accounts at Colonial Bank in order to cover TBW’s cash shortfalls. Farkas and his co-conspirators at TBW and Colonial Bank transferred money between accounts at Colonial Bank to hide the overdrafts. Evidence presented at trial showed that after the overdrafts grew to more than $100 million, Farkas and his co-conspirators covered up the overdrafts and operating losses by causing Colonial Bank to purchase from TBW over time more than $1.5 billion in what amounted to worthless mortgage loan assets, including loans that TBW had already sold to other investors and fake pools of loans purportedly being formed into mortgage-backed securities. Farkas and his co-conspirators caused Colonial Bank to report these assets on its books at face value when in fact the mortgage loan assets were worthless. By August 2009, approximately $500 million in fake pools of loans remained on Colonial Bank’s books.
According to court documents and evidence presented at trial, Farkas and his co-conspirators at TBW also misappropriated more than $1.5 billion from Ocala Funding. Ocala Funding sold asset-backed commercial paper to financial institution investors, including Deutsche Bank and BNP Paribas Bank. Ocala Funding, in turn, was required to maintain collateral in the form of cash and/or mortgage loans at least equal to the value of outstanding commercial paper.
Evidence presented at trial established that Farkas and his co-conspirators diverted cash from Ocala Funding to TBW to cover its operating losses, and as a result, created significant deficits in the amount of collateral Ocala Funding possessed to back the outstanding commercial paper. To cover up the diversions, the conspirators sent false information to Deutsche Bank, BNP Paribas Bank and other financial institution investors and led them to falsely believe that they had sufficient collateral backing the commercial paper they had purchased. When TBW failed in August 2009, the banks were unable to redeem their commercial paper for full value. Farkas and his co-conspirators also caused approximately $900 million in loans to be held on Colonial Bank’s books when in fact the loans had already been sold to Freddie Mac and other investors.
According to court documents and evidence at trial, in the fall of 2008, Colonial Bank’s holding company, Colonial BancGroup Inc., applied for $570 million in taxpayer funding through the Capital Purchase Program (CPP), a sub-program of the U.S. Treasury Department’s Troubled Asset Relief Program (TARP). In connection with the application, Colonial BancGroup submitted financial data and filings that included materially false information related to mortgage loans and securities held by Colonial Bank as a result of the fraudulent scheme perpetrated by Farkas and his co-conspirators. Colonial BancGroup’s TARP application was conditionally approved for $553 million contingent on the bank raising $300 million in private capital.
Evidence at trial established that Farkas and his co-conspirators falsely informed Colonial BancGroup that they had identified sufficient investors to satisfy the TARP capital contingency. Farkas and his TBW co-conspirators diverted $25 million from Ocala Funding into an escrow account and falsely represented that the money was on behalf of capital raise investors. Farkas and his TBW co-conspirators caused Colonial BancGroup to issue a false and misleading financial statement to the SEC and a press release announcing the success of the capital raise. Ultimately, Colonial BancGroup did not receive any TARP funds.
Evidence at trial also established that Farkas and his co-conspirators caused Colonial BancGroup to file materially false financial data with the SEC regarding its assets in annual reports contained in Forms 10-K and quarterly filings contained in Forms 10-Q. Colonial BancGroup’s materially false financial data included overstated assets for mortgage loans that had little to no value that Farkas and his co-conspirators caused Colonial Bank to purchase. Farkas and his co-conspirators also caused TBW to submit materially false financial data to the Government National Mortgage Association (Ginnie Mae) in order to extend TBW’s authority to issue Ginnie Mae mortgage-backed securities.
According to court documents and evidence presented at trial, Farkas also personally misappropriated more than $38.5 million from TBW and Colonial Bank to finance his lifestyle, including purchasing multiple homes, scores of cars, a jet and sea plane, and restaurants and bars.
In August 2009, the Alabama State Banking Department, Colonial Bank’s regulator, seized the bank and appointed the FDIC as receiver. Colonial BancGroup also filed for bankruptcy in August 2009.
“During the housing and financial crisis, while many American taxpayers struggled just to keep their heads above water, Farkas lived in the lap of luxury using the more than $38 million that he stole from TBW and Colonial Bank,” said Acting Inspector General Romero of SIGTARP. “Farkas used the stolen money to buy a jet, expensive antique and collector cars including a Rolls Royce, and multiple vacation homes, all while masterminding a fraud of stunning scope. His fraud began to unravel when he tried to obtain TARP funds to fill the billions of dollars of holes at TBW and Colonial Bank. He failed and his fraud was discovered by SIGTARP and its law enforcement partners. Shameless in his duping of investors and regulators, he attempted to deceive taxpayers. The judge’s sentence today makes it clear that Farkas will leave his lavish lifestyle behind and spend his golden years locked up in prison.”
“Through his scheme, Lee Farkas and his co-conspirators victimized innocent people and in the process their actions led to the collapse of two major U.S. financial institutions, no doubt a contributing factor to the nation’s financial downturn,” said Assistant Director McJunkin. “Today’s sentence does not make the victims whole, but it does punish the major architect of these crimes.”
“Lee Farkas was the mastermind behind one of the largest fraud schemes in history involving a mortgage lending company. For more than eight years, Farkas perpetuated his scam to defraud banks, regulators and taxpayers,” said Deputy Inspector General Stephens of the HUD-OIG. “We remain firmly committed to rooting out fraud at all levels of an institution – from the bottom to the very top – and holding those who engage in such destructive activity ultimately accountable to the American people.”
“We are pleased to join our colleagues in announcing the sentencing of Lee Farkas, whose actions contributed to the failure of Colonial Bank, causing a $4.2 billion loss to the FDIC’s Deposit Insurance Fund,” said Inspector General Rymer of the FDIC-OIG. “We appreciate the collaborative relationships with law enforcement partners that led to the successful outcomes of this case, one of the largest bank fraud prosecutions of our time. We also acknowledge the efforts of our FDIC colleagues, who, acting in their receivership capacity, assisted the prosecution in unraveling the complexities of this fraud. The American public needs to know that those who undermine the integrity of the financial services system will be held accountable. We are committed to helping maintain confidence in the financial system, ensure the safety and soundness of FDIC-insured institutions, and protect the viability of the insurance fund.”
“In the midst of the worst housing finance crisis since the great depression, Lee Farkas led a scheme that defrauded Freddie Mac and, in turn, the American taxpayers who have invested over $ 63 billion in Freddie Mac to cover its losses,” said Inspector General Linick of the FHFA-OIG. “Today’s sentence makes it clear that mortgage-related fraud will not be tolerated.”
The case is being prosecuted by Deputy Chief Patrick Stokes and Trial Attorney Robert Zink of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Charles Connolly and Paul Nathanson of the Eastern District of Virginia. This case was investigated by SIGTARP, FBI’s Washington Field Office, FDIC-OIG, HUD-OIG, FHFA-OIG and the IRS-CI. The department recognizes the substantial assistance of the SEC. The department also recognizes the assistance of the Financial Crimes Enforcement Network (FinCEN) of the Department of the Treasury.
This prosecution was brought in coordination with 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 .
Federal Court Bars Alabama Woman from Preparing Federal Tax ReturnsRead the Press Release
WASHINGTON – A federal court has permanently barred Aurelia Sanderson Johnson from preparing federal tax returns for others, the Justice Department announced today. The civil injunction order, to which Johnson consented, was signed by Judge Mark E. Fuller of the U.S. District Court for the Middle District of Alabama. The court also ordered Johnson to provide a list of her customers to the government and to mail a copy of the court order to each person for whom she prepared a federal income tax return since Jan. 1, 2007.
According to the government complaint , Johnson, who resides and does business in Montgomery, Ala., employed at least two schemes on the returns she prepared for her customers in order to obtain false or overstated tax refunds. In one scheme, Johnson allegedly prepared returns reporting fictitious income or improperly reporting individuals as “qualifying children” in order to inflate or generate false earned income tax credits. In the second scheme, Johnson allegedly fabricated or inflated business expense deductions on her customers’ returns in order to reduce their taxable income and generate bogus refunds of withheld taxes.
Return preparer fraud is one of the Internal Revenue Service’s “Dirty Dozen” tax scams for 2011. In the past decade, the Justice Department’s Tax Division has obtained injunctions against hundreds of tax fraud promoters and unscrupulous tax return preparers. Information about these cases is available on the Justice Department website .
California Real Estate Investors Agree to Plead Guilty to Bid Rigging at Public Foreclosure AuctionsRead the Press Release
Eight California real estate investors have agreed to plead guilty for their roles in two separate conspiracies to rig bids and commit mail fraud at public real estate foreclosure auctions in Northern California, the Department of Justice announced.
Charges were filed today in U.S. District Court for the Northern District of California in Oakland, Calif., against Thomas Franciose of San Francisco; William Freeborn of Alamo, Calif.; Robert Kramer of Oakland, Calif.; Thomas Legault of Clayton, Calif.; David Margen of Berkeley, Calif.; Brian McKinzie of Hayward, Calif.; Jaime Wong of Dublin, Calif.; and Jorge Wong of San Leandro, Calif.
According to the felony charges, the real estate investors participated in a conspiracy to rig bids by agreeing to refrain from bidding against one another at public real estate foreclosure auctions in Contra Costa County and Alameda County, Calif. While some of the conspirators participated in the conspiracies in both Alameda and Contra Costa Counties, the collusive activity occurred independently in each county, and some individuals only participated in the conspiracy in one county.
“While the country faces unprecedented home foreclosure rates, the collusion taking place at these auctions is artificially driving down foreclosed home prices and is lining the pockets of the colluding real estate investors,” said Christine Varney, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. “The Antitrust Division will vigorously pursue these kinds of collusive schemes that eliminate competition from the marketplace.”
The department said that the primary purpose of the conspiracies was to suppress and restrain competition to obtain selected real estate offered at Alameda and Contra Costa County public foreclosure auctions at noncompetitive prices. When real estate properties are sold at these auctions, the proceeds are used to pay off the mortgage and other debt attached to the property, with remaining proceeds, if any, paid to the homeowner.
“Through the hard work and partnership between the FBI and the Antitrust Division, we have been able to secure a victory in our fight against bid-rigging and anticompetitive practices in foreclosure auctions,” said FBI Special Agent in Charge Stephanie Douglas of the San Francisco Field Office. “We continue to ask for the public’s assistance in identifying and reporting those engaged in this type of activity.”
According to the court documents, the real estate investors conspired with others not to bid against one another at public real estate foreclosure auctions in Northern California, participating in a conspiracy in various lengths of time between May 2008 and January 2011. After the conspirators’ designated bidder bought a property, the conspirators would hold a secret, private auction at which each participant would bid the amount above the public auction price he was willing to pay. The department said that the secret, private auctions took place at or near the courthouse steps where the public auctions were held. The highest bidder at the private auction won the property. According to the court documents, the difference between the public auction price and that at the second auction was the group’s illicit profit, and it was divided among the conspirators, often in cash.
In addition, the eight conspirators were charged with using the U.S. mail in carrying out their conspiracy to defraud financial institutions by paying potential competitors not to bid competitively in the public auctions for foreclosed properties, according to court filings.
Franciose, Jaime Wong and Jorge Wong were charged with one count each of bid rigging to obtain selected real estate at foreclosure auctions in Alameda County and one count each of conspiracy to commit mail fraud. Freeborn and Legault were charged with one count each of bid rigging to obtain selected real estate at foreclosure auctions in Contra Costa County and one count each of conspiracy to commit mail fraud. Kramer, Margen and McKinzie were each charged with two counts of bid rigging to obtain selected real estate at foreclosure auctions in Alameda and Contra Costa Counties and two counts each of conspiracy to commit mail fraud.
Each violation of the Sherman Act carries a maximum penalty of 10 years in prison and a $1 million fine for individuals. Each count of conspiracy to commit mail fraud carries a maximum sentence of 30 years in prison and a $1 million fine. The maximum fine for the Sherman Act charges may be increased to twice the gain derived from the crime or twice the loss suffered by the victim if either amount is greater than the $1 million statutory maximum.
The Antitrust Division and the FBI have identified a pattern of collusive schemes among real estate investors aimed at eliminating competition at real estate foreclosure auctions, and today’s charges are part of the department’s ongoing effort to combat this conduct and restore competition to public auctions. The investigation into fraud and bid rigging at certain real estate foreclosure auctions in Northern California is being conducted by the Antitrust Division’s San Francisco Office and the FBI’s San Francisco office. Anyone with information concerning bid rigging or fraud related to public real estate foreclosure auctions should contact the Antitrust Division’s San Francisco Office at 415-436-6660, visit www.justice.gov/atr/contact/newcase.htm or call the FBI tip line at 415-553-7400.
Today’s charges are part of efforts underway by President Barack Obama’s Financial Fraud Enforcement Task Force (FFETF). 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 on the task force, visit www.StopFraud.gov.
**The fraud charge(s) referenced in this press release were subsequently dismissed on the government’s motion.**
Arkansas Woman Pleads Guilty to Federal Civil Rights ViolationsRead the Press Release
WASHINGTON - Wendy Treybig, 31, of Evening Shade, Ark., pleaded guilty today to obstructing an investigation related to the Jan. 14, 2011, firebombing of the home of an interracial couple in Hardy, Ark., the Department of Justice announced.
Treybig, along with Jason Barnwell, 37, of Evening Shade; Gary Dodson, 32, of Waldron, Ark.; Jake Murphy, 19, of Waldron; and Dustin Hammond, 20, of Hardy, Ark., were indicted in April by a federal grand jury on civil rights charges and other federal charges stemming from their participation in the firebombing and subsequent cover-up. Murphy and Hammond have pleaded guilty and are awaiting sentencing.
Treybig admitted in court that she lied to FBI agents about her knowledge of what happened on the night of the incident. Treybig also admitted that she urged a friend to provide to the FBI a false story that would serve as an alibi for her co-defendants.
“Threatening a couple with violence because of their race will not be tolerated in our country,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The Justice Department will vigorously prosecute individuals that violate the rights of others because of race.
Treybig faces up to 20 years in prison. Barnwell and Dodson are scheduled to go to trial on Oct. 25, 2011.
This case was investigated by the Little Rock, Ark., Field Office of the FBI and is being prosecuted by Assistant U.S. Attorney John Ray White of the Eastern District of Arkansas and Trial Attorney Henry Leventis of the Civil Rights Division.
Wednesday 29 June 2011
Romanian Man Sentenced to 48 Months in Prison for Role<br /> in International Fraud Scheme Involving Online Auction WebsitesRead the Press Release
WASHINGTON – A Romanian man was sentenced today to 48 months in prison for his role in moving and hiding the illicit proceeds of an international fraud scheme, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney Patrick J. Fitzgerald for the Northern District of Illinois and U.S. Attorney Ronald C. Machen Jr. for the District of Columbia.
Adrian Ghighina, 33, of Bucharest, Romania, was sentenced by U.S. District Judge Matthew F. Kennelly in Chicago. Ghighina pleaded guilty in February 2011 to one count each of wire fraud and conspiracy.
According to court documents, Ghighina, who entered the United States legally in late 2004, acted as a “money mule” in a complex Internet fraud conspiracy. Ghighina’s co-conspirators, many of whom are in Romania, created fraudulent online auctions for expensive items such as cars, motorcycles and RVs on websites such as eBay, Craigslist and AutoTrader.com.
Victims who responded to these fraudulent listings were directed, in some cases by email or telephone, to transmit payment for the non-existent items using Western Union and bank wire transfers to accounts controlled by Ghighina.
Ghighina admitted that he moved from city to city, opening new accounts at various banks using false identification as part of the conspiracy. The victims never received the items for which they had paid. From approximately September 2005 until his arrest in October 2009 in Miami, Ghighina opened accounts and/or received funds in Illinois, the District of Columbia, Florida, New York, Arizona and elsewhere.
The sentence resolves two separate indictments against Ghighina, one from a federal grand jury in the Northern District of Illinois and a separate indictment from a federal grand jury in the District of Columbia. Ghighina also previously was convicted on related charges of wire and visa fraud in the Southern District of Florida and sentenced on those charges to 27 months in prison. Based on the plea agreement, the sentence imposed today will run concurrently with Ghighina’s sentence in the Florida case, for which he has already served 21 months in prison.
The Chicago case is being prosecuted by Assistant U.S. Attorney Brian Hayes with the Northern District of Illinois. The Washington case is being prosecuted by Special Assistant U.S. Attorney Joseph Springsteen for the District of Columbia. Mr. Springsteen also serves as a Trial Attorney with the Criminal Division’s Computer Crime and Intellectual Property Section (CCIPS). Assistance on the Washington case was also provided by CCIPS Trial Attorneys Gavin Corn and Mysti Degani. The Criminal Division’s Office of International Affairs provided assistance in this matter. This case is being investigated by the Chicago and Washington Field Offices of the FBI, as well as the Chicago Police Department and U.S. Immigration and Customs Enforcement’s Homeland Security Investigations.
Pittsburgh Crips Gang Member Sentenced to 72 Months in PrisonRead the Press Release
WASHINGTON – A Pittsburgh man was sentenced today to 72 months in prison for conspiring to conduct a racketeering enterprise related to his membership in a Pittsburgh Crips gang, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney David J. Hickton of the Western District of Pennsylvania.
Terrell Henson, 26, aka “50,” pleaded guilty on Feb. 1, 2011, before Senior U.S. District Judge Gustave Diamond to one count of conspiracy to engage in a racketeering enterprise.
According to the guilty plea, Henson and others participated in a pattern of racketeering activity that included multiple acts involving robberies at gun point; attempted murders; distribution of controlled substances, including cocaine, heroin and crack cocaine; and obstruction of justice and witness intimidation.
According to court documents, Henson 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 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, Henson served as a “hustler” for the gang. Hustlers were gang members who distributed controlled substances on behalf of the gang, in the territory controlled by the Northview Heights/ Brighton Place Crips.
Henson 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, 16 members 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.
Justice Department Reaches Agreement with Colorado State Courts to Remove Language BarriersRead the Press Release
WASHINGTON- The Justice Department today announced it has reached an agreement with officials of the Colorado Judicial Department to ensure that limited English proficient (LEP) individuals seeking services throughout Colorado’s state court system will have access to timely and competent language assistance.
The agreement resolves a Justice Department investigation of a complaint alleging that the Colorado Judicial Department, which receives federal funding, was not in compliance with Title VI of the Civil Rights Act of 1964, and the nondiscrimination provisions of the Omnibus Crime Control and Safe Streets Act of 1968. These two acts prohibit discrimination on the basis of race, color, national origin, sex or religion by recipients of federal assistance.
“Justice cannot be served without access and effective communication. This agreement shows that, even in tough economic times, this core principle can and must be attained,” Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “I thank Chief Justice Michael L. Bender, State Court Administrator Gerald Marroney and their staff for working cooperatively with the Justice Department to bring down barriers to justice.”
As part of the agreement with the Justice Department, Colorado’s chief justice has issued a comprehensive directive that provides for free and competent interpreter services in all criminal and civil proceedings, as well as court operations. Colorado state court officials consulted with judges, administrators, and community experts to shape a directive that is an example for all courts subject to civil rights laws that require meaningful access to court proceedings and other court operations, at no charge to LEP individuals .
In addition, the Colorado Judicial Department, in consultation with the department, will develop state and local language access plans addressing both oral interpretation and the translation of vital written documents. An existing Court Interpreter Oversight Committee will be expanded to include a Colorado Legal Services attorney, a prosecutor, a public defender, an advocate representing the interests of the language minority populations in Colorado and other members, all of whom shall have relevant experience in court language access issues. This committee will have the opportunity to provide feedback on the directive, the state and district plans, and implementation efforts.
Under the terms of the agreement signed today, the Justice Department will monitor Colorado’s compliance for a period of at least three years.
On Aug. 17, 2010, Thomas E. Perez, Assistant Attorney General for the Civil Rights Division, issued a letter to chief justices and administrators of state court clarifying the obligation of courts that receive federal financial assistance to provide oral interpretation, written translation and other language services to people who are LEP. The letter provided state courts additional guidance regarding the longstanding requirement to provide meaningful access, free of charge, to their programs and services for LEP persons through the provision of language services, pursuant to the prohibition against national origin discrimination contained in Title VI and the Safe Streets Act. .
The Civil Rights Division’s Federal Coordination and Compliance Section investigated this matter as part of its Courts Language Access Initiative. This multi-pronged initiative focuses on enforcement, technical assistance, outreach, resource identification and policy efforts to ensure meaningful access to courts receiving federal financial assistance.
For more information about Title VI and the Safe Streets Act, or to obtain copies of the Assistant Attorney General’s letter, visit www.lep.gov
El Departamento de Justicia logra acuerdo con los Tribunales del Estado de Colorado para eliminar barreras idiomáticasRead the Press Release
WASHINGTON – El Departamento de Justicia anunció hoy que ha logrado un acuerdo con funcionarios del Departamento Judicial de Colorado para asegurar que las personas con conocimientos limitados del idioma inglés [Limited English Proficient (LEP)] que busquen servicios en el sistema judicial de Colorado tengan acceso a asistencia idiomática competente en tiempo hábil.
El acuerdo resuelve una investigación realizada por el Departamento de Justicia de una demanda que alega que el Departamento Judicial de Colorado, el cual recibe fondos federales, no cumplía con el Título VI de la Ley de Derechos Civiles de 1964, y las disposiciones antidiscriminación de la Ley Amplia de Control de la Delincuencia y Calles Seguras de 1968. Estas dos leyes prohíben la discriminación debido a raza, color, origen nacional, sexo o religión por beneficiarios de asistencia federal.“No se puede hacer justicia sin acceso y comunicación eficaz. Este acuerdo demuestra que, inclusive en épocas de dificultades económicas, este principio central puede y debe cumplirse”, dijo Perez. “Agradezco al Juez Principal Michael L. Bender, al Administrador del Tribunal Estatal Gerald Marroney y a su equipo por trabajar en conjunto con el Departamento de Justicia para eliminar las barreras a la justicia”.
Como parte del acuerdo con el Departamento de Justicia, el Juez Principal de Colorado ha emitido una directiva integral que dispone el acceso a servicios de intérprete competentes y gratuitos en todos los procesos penales y civiles, así como en las operaciones de los tribunales. Funcionarios de los tribunales estatales de Colorado trabajaron en conjunto con jueces, administradores y expertos comunitarios en diseñar una directiva que fuera un ejemplo para todos los tribunales sujetos a las leyes de derechos civiles que exigen acceso sustancioso a procesos judiciales y otras operaciones judiciales, sin cargo para personas LEP.
Además, el Departamento Judicial de Colorado, en colaboración con el Departamento de Justicia [Department of Justice – DOJ], desarrollará planes estatales y locales de acceso idiomático, asociados tanto a la interpretación oral como la traducción de documentos escritos vitales. Se ampliará un Comité de Supervisión de Intérpretes Judiciales existentes, de modo a incluir un abogado de Servicios Legales de Colorado, un fiscal, un defensor público, un defensor que represente los intereses de las poblaciones de idiomas minoritarios en Colorado, y otros miembros, todos los cuales tendrán experiencia relevante en temas asociados al acceso idiomático judicial. Este comité tendrá la oportunidad de brindar opiniones sobre la directiva, los planes estatales y de distritos, y la labor de implementación.
Bajo los términos del acuerdo firmado hoy, el Departamento de Justicia vigilará el cumplimiento de Colorado por un periodo de al menos tres años.
El 17 de agosto de 2010, Thomas E. Perez, Secretario de Justicia Auxiliar de la División de Derechos Civiles, emitió una carta a los jueces principales y administradores de tribunales estatales aclarando la obligación de los tribunales que reciben asistencia financiera federal de brindar servicios de interpretación oral, traducción por escrito y otros servicios idiomáticos a personas LEP. La carta brindó orientación adicional a los tribunales respecto de la exigencia de larga trayectoria de brindar acceso sustancial, sin cargo, a sus programas y servicios a personas LEP a través de la prestación de servicios idiomáticos, de acuerdo con la prohibición de discriminar debido al origen nacional contenida en el Título VI de la Ley de Calles Seguras.
La Sección de Coordinación Federal y Cumplimiento de la División de Derechos Civiles investigó este asunto como parte de su Iniciativa de Acceso Idiomático Judicial. Esta iniciativa múltiple se centra en la coacción, la asistencia técnica, las campañas de alcance exterior, la identificación de recursos y formulación de políticas para garantizar el acceso sustancial a los tribunales que reciban asistencia financiera federal.
Para obtener más información sobre el Título VI y la Ley de Calles Seguras, o para obtener copias de la carta del Secretario de Justicia Auxiliar, visite www.lep.gov.
Tuesday 28 June 2011
Natchez, Mississippi, Police Officer Pleads Guilty to Conspiracy to Commit Identity Theft and FraudRead the Press Release
WASHINGTON – Natchez, Miss., Police Department Officer Dewayne Johnson, 33, pleaded guilty today to conspiring to commit identity theft, credit card fraud and bank fraud by agreeing with his cousin to illegally use credit and debit cards stolen from an arrestee in Johnson’s custody, the Department of Justice announced today.
“Law Enforcement officers are sworn to protect and serve our communities, and they must be held accountable when they commit crimes like this one,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The Justice Department is committed to prosecuting those officers that violate the Constitution.”
During his plea hearing, Johnson admitted that he took the debit and credit cards of an arrestee who was in his patrol car. Johnson further admitted that he gave his cousin, Patricia A. Wilson, at least one of the cards and knew that she used it to make personal purchases. He also admitted that he lied to the FBI about his involvement with the stolen cards.
Wilson, 34, of Ferriday, La., previously pleaded guilty to this same offense. Following a jury trial in March 2011, Johnson was convicted of violating the civil rights of the man in his custody by stealing his credit and debit cards.
Sentencing for Johnson is scheduled for Sept. 13, 2011. At sentencing, Johnson faces a maximum punishment of five years in prison for participating in the conspiracy and 12 months in prison for the civil rights offense based upon the theft.
Fellow Natchez Police Department Officer Elvis Prater, 36, was also charged with civil rights offenses related to the beatings of two men in police custody and with lying to the FBI. The jury acquitted Prater on one count, and failed to reach a verdict on the two remaining counts. Retrial of the charges against Prater will begin on July 25, 2011.
The charges set forth in an indictment are merely accusations and the defendant is presumed innocent until proven guilty.
The case was investigated by the Jackson, Miss., Division of the FBI and the Mississippi State Office of the Attorney General, and is being prosecuted by Fara Gold and AeJean Cha of the Civil Rights Division and Assistant U.S. Attorney Glenda R. Haynes of the U.S. Attorney’s Office for the Southern District of Mississippi. This case was formerly prosecuted by Erin Aslan and Kevonne Small of the Civil Rights Division.
Justice Department Signs Agreement with Van Buren County, Arkansas, to Ensure Civic Access for People with DisabilitiesRead the Press Release
WASHINGTON - The Justice Department today announced an agreement with Van Buren County, Ark., 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).
“Individuals with disabilities must have access to public facilities, programs, services and activities in order to participate equally in civic life,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “I commend Van Buren County officials for making this commitment to its residents with disabilities by agreeing to come into voluntary compliance with the ADA.”
PCA was initiated to ensure that persons with disabilities have an equal opportunity to participate in civic life, a fundamental part of American society. 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. The agreements are tailored to address the steps each community must take to improve access. This agreement is the 190th under the PCA initiative. According to census data, more than 28 percent of Van Buren County residents have a disability and will benefit from this agreement.
Under the agreement announced today, Van Buren County, Ark., will take several important steps to improve access for individuals with disabilities, such as:
- Making physical modifications to facilities surveyed by the department so that parking, routes into buildings, entrances, service areas and counters, restrooms, public telephones and drinking fountains are accessible to people with disabilities;
- Surveying other facilities and programs and making modifications wherever necessary to achieve full compliance with ADA requirements;
- Posting, publishing and distributing a notice to inform members of the public of the provisions of Title II of the ADA and their applicability to the county’s programs, services and activities;
- Training county staff in using the Arkansas Relay Service as a key means of communicating with individuals who are deaf, are hard-of-hearing or have speech disabilities;
- Undertaking the required planning and modifications to ensure equal, integrated access to emergency management for individuals with disabilities, including emergency preparedness, notification, evacuation, sheltering, response, clean up and recovery;
- Ensuring that the county’s official website and other web-based services are accessible to people with disabilities;
- Developing a method for providing information for interested persons with disabilities concerning the existence and location of the county’s accessible services, activities and programs;
- Installing signs at any inaccessible entrance to a facility directing individuals with disabilities to an accessible entrance or to information about accessing programs and services at other accessible facilities; and
- Implementing a comprehensive plan to improve the accessibility of sidewalks, transportation stops and pedestrian crossings by installing accessible curb ramps throughout Van Buren County.
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 three years from June 28, 2011, or until all actions required by the agreement have been completed, whichever is later. The department will actively monitor compliance with the agreement until all required actions have been completed.
People interested in finding out more about the ADA, today’s agreement with Van Buren County, Ark., the PCA initiative, or the ADA Best Practices Tool Kit for State and Local Governments can access the ADA website at www.ada.gov or call the toll-free ADA Information Line at (800) 514-0301 or (800) 514-0383 (TTY). A copy of the agreement is available at: www.ada.gov/van_buren_pca/van-buren_sa.htm .
Justice Department Reaches Settlement with Connecticut Early Learning Center to Ensure Equal Opportunity for Children with AutismRead the Press Release
WASHINGTON— The Justice Department today announced a settlement agreement with Beach Babies Learning Center LLC, located in Old Saybrook, Conn., to resolve allegations that the center terminated the enrollment of a then two-year-old child from its program because the child has autism. Based upon a c omprehensive medical history and physical examination, the child’s pediatrician confirmed that the child was healthy and could participate in the programs at the center.
Title III of the Americans with Disabilities Act (ADA) prohibits discrimination on the basis of disability, including autism, in early education and child care centers. Under the agreement, the center agreed to implement policies and procedures to ensure that children with disabilities are afforded a full and equal opportunity to participate in and benefit from the center’s programs. The center will also post a nondiscrimination policy at its facility and include the policy on its website. The center also agreed to pay monetary damages to the child’s parents.
“Ensuring that children with disabilities, and their families, have equal access to early education and child care centers goes to the heart of the ADA’s promises and protections,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “Beach Babies Learning Center cooperated with the department to address this matter through this agreement, and we hope that this agreement serves as a reminder to other education and child care providers about their responsibilities under the ADA.”
“Partnering with the Justice Department’s Civil Rights Division, the U.S. Attorney’s Office has embarked on a significant civil rights enforcement initiative,” stated U.S. Attorney David B. Fein. “Autism is just one of many serious disabilities that affect so many families in Connecticut, and the U.S. Attorney’s Office is committed to ensuring that every child has equal access to early learning centers, public and private, and can participate in all of the programs that are available .”
Under Title III of the ADA, private early learning and child care providers are prohibited from discriminating on the basis of disability, and must make reasonable modifications to policies, practices and procedures to afford individuals with disabilities the opportunity to participate and benefit from the early learning services . The providers should permit changes in schedules whenever necessary to accommodate early intervention services provided by outside therapists so long as they do not result in a fundamental alteration of the services.
The enforcement of the ADA 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.
HSBC India Client Indicted for Filing False Tax Returns and Failing to Report Foreign Bank AccountRead the Press Release
WASHINGTON – Dr. Arvind Ahuja of Greendale, Wis., was indicted today by a federal grand jury in Milwaukee on four counts of willfully filing materially false tax returns and four counts of failing to file Reports of Foreign Bank and Financial Accounts (FBARs), the Department of Justice and Internal Revenue Service (IRS) announced.
According to the indictment, Dr. Ahuja, a board-certified neurosurgeon, wire transferred and maintained millions of dollars in bank accounts in India and the Bailiwick of Jersey at The Hongkong and Shanghai Banking Corporation Ltd. (HSBC). In 2009, the HSBC bank account in India had a balance of $8,733,785. The indictment alleges that Dr. Ahuja failed to report these bank accounts to the IRS on his 2006-2009 tax returns. The indictment further alleges that Dr. Ahuja failed to report more than $1.2 million in interest income that he earned from his HSBC India account and failed to pay the taxes due on that income. For the 2006-2009 tax years, Dr. Ahuja also failed to file FBARs to report his foreign bank accounts to the Department of the Treasury.
As alleged in the indictment, U.S. citizens had an obligation to report to the IRS on Schedule B of their U.S. Individual Income Tax Return, Form 1040, whether they had a financial interest in, or signature authority over, a financial account in a foreign county in a particular year by checking “Yes” or “No” in the appropriate box and identifying the country where the account was maintained. They further had an obligation to report all income earned from foreign financial accounts on the tax return and to pay the taxes due on that income. Separately, U.S. citizens with a financial interest in, or signatory authority over, a foreign financial account worth more than $10,000 in a particular year, must also file an FBAR form with the Department of the Treasury disclosing such an account by June 30 of the following year.
Each false tax return charge carries a maximum penalty of three years in prison and a $250,000 fine. The failure to file FBAR charges each carry a maximum penalty of 10 years in prison and a $500,000 fine.
A trial date has not yet been set. An indictment is merely an allegation, and Dr. Ahuja is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
This case is being prosecuted by Senior Litigation Counsel John E. Sullivan and Trial Attorney Melissa S. Siskind, with the assistance of Assistant U.S. Attorney Tracy Johnson from the Eastern District of Wisconsin, and was investigated with the assistance of the IRS.
More information about the Tax Division and its enforcement efforts can be found at www.justice.gov/tax .
Former U.S. Army Sergeant Pleads Guilty to Stealing Equipment in Iraq and Receiving Proceeds from Sale on Black MarketRead the Press Release
WASHINGTON - A former U.S. Army sergeant pleaded guilty today to conspiring to steal U.S. Army equipment related to his work as a non-commissioned officer helping to train Iraqi army personnel in Mosul, Iraq, in 2008, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division.
Robert Ashley Nelson, 46, of San Antonio, Texas, pleaded guilty today before U.S. Magistrate Judge John Primomo in the Western District of Texas to a criminal information charging him with one count of conspiracy to steal public property. According to the court document, Nelson was deployed to Forward Operating Base Diamondback, Iraq, as the non-commissioned officer-in-charge of the Ninewa Operations Command Military Transition Team. This transition team helped train the Iraqi Army units stationed nearby.
While serving in Iraq, Nelson agreed with a U.S. Army translator to steal eight generators from a lot on base that held various pieces of used equipment. Once the generators were taken off the base, the translator arranged for them to be sold on the black market in Iraq. Nelson admitted that he received half of the proceeds of the sales of stolen equipment, with approximately $35,000 of the money being wired to Nelson’s account by the translator’s brother. In total, Nelson admitted receiving approximately $44,830 from this scheme. The investigation into this conspiracy continues.
At sentencing, Nelson faces up to five years in prison, as well as a maximum fine of $250,000 and up to three years of supervised release following a prison term. Additionally, Nelson has agreed to criminal forfeiture of $44,830 to the United States. Sentencing is scheduled for Oct. 5, 2011, at 1:30 p.m., CDT before U.S. District Judge Xavier Rodriguez.
This case is being prosecuted by Special Trial Attorney Christopher L. Peele of the Criminal Division’s Fraud Section, on detail from SIGIR. The case is being investigated by the Special Inspector General for Iraq Reconstruction, the Defense Criminal Investigative Service, the Army Criminal Investigations Division and others.
Final Defendant Sentenced to Seven Years in Prison for Participation in Child Pornography Distribution RingRead the Press Release
WASHINGTON – The fifth defendant charged in relation to an Internet-based child pornography trafficking ring that specialized in images depicting the sexual abuse of young girls was sentenced yesterday to seven years in federal prison, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division and U.S. Attorney for the Central District of California Andre Birotte Jr.
Kevin Kaller Wright, 44, of Santa Monica, Calif., was sentenced by U.S. District Judge Margaret M. Morrow.
Wright and four other people have pleaded guilty to being members of the Quest4More Internet bulletin board, whose members “advocated the sexual torture of children,” according to court documents. Quest4More, which was investigated by the U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI), was a secret bulletin board that allowed members to post and view pictures and videos, which often depicted very young children, sometimes being tortured or in bondage.
The defendants previously sentenced in this case are:
Michael Pharis, 51, of Las Vegas, was sentenced in December 2010 to 15 years in prison;
Daniel Murphy, 53, of Millville, N.J., was sentenced in March 2011 to 151 months in prison;
Paul Challender, 54 of Big Rapids, Mich., was sentenced in March 2011 to 151 months in prison; and
William Ho, 39, of Hacienda Heights, Calif., was sentenced in March 2011 to 135 months in prison.
All five men charged in this case pleaded guilty to one count of conspiracy to transport, receive, distribute and possess child pornography. They all admitted being part of the Quest4More bulletin board, which was used to distribute illegal images and videos depicting prepubescent children, including toddlers, engaged in various sexual and sadistic acts. The group also posted links to other sites with images of child sexual abuse. Law enforcement was alerted to the group following the arrest of one of its members in 2008.
The defendants each made hundreds of posts to the bulletin board. According to court documents, Wright did not post any pictures to the bulletin board, but made more than 400 written posts including commentary on other pictures and requests for additional pictures.
Wright was sentenced to 10 years of supervised release and the four other defendants were sentenced to a lifetime of supervised release following their prison terms.
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, as well as 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 Robert Dugdale of the Central District of California, and Trial Attorney LisaMarie Freitas of the Criminal Division’s Child Exploitation and Obscenity Section. The case was investigated by ICE HSI.