Latest Records
Newest first across public DOJ and U.S. Attorney press releases.
Friday 17 June 2011
Fifth Member of CD and DVD Counterfeiting Ring in Atlanta Sentenced to 38 Months in PrisonRead the Press Release
WASHINGTON – Ibrahim Diallo, 27, of Atlanta, was sentenced to 38 months in prison today by U.S. District Judge William S. Duffey Jr., in Atlanta for his involvement in a counterfeit DVD and CD ring, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney Sally Quillian Yates for the Northern District of Georgia. Diallo was also sentenced to three years of supervised release and ordered to pay $3,867 in restitution, jointly and severally with his co-defendants.
“Mr. Diallo and his co-conspirators trafficked in counterfeit CDs and DVDs that would have been worth millions of dollars on the open market, to the detriment of artists, retailers, producers and others,” said Assistant Attorney General Breuer. “The Justice Department has never been more committed than it is today to investigating and prosecuting these crimes, and this case exemplifies our determination to make sure that counterfeiters and other intellectual property criminals are appropriately punished.”
“The victims in this case are the thousands of Americans who earn their livelihoods from the legitimate creation and performance of popular music and movies,” said U.S. Attorney Quillian Yates. “This group of defendants stole from them by mass-producing counterfeit music CDs and DVD movies in a pirating operation that may have been the largest of its kind in the Southeastern United States.”
Diallo pleaded guilty on Sept. 1, 2009, to one count of conspiracy to commit criminal copyright infringement, to traffic in counterfeit goods and to traffic in counterfeit labels. At the plea hearing, Diallo admitted that he sold pirated CDs and DVDs along with counterfeit labels and packaging. Diallo admitted to selling, and conspiring to sell, thousands of pirated CDs and DVDs per week.
Diallo was one of 13 individuals charged in a May 19, 2009, indictment alleging various copyright, trademark and counterfeit goods offenses. In February 2011, four of Diallo’s co-conspirators were sentenced for their involvement in the piracy ring. Mamadou Sadio Barry, 40, was sentenced to 60 months in prison; Moussa Baradji, 29, was sentenced to 50 months in prison; Sedikey Sankano, 42, was sentenced to 24 months in prison; and Won Ahn, 69, was placed on probation for one year. Barry, Baradji and Sankano also were ordered to serve three years of supervised release following their prison terms. Barry and Baradji were ordered to pay $70,894 in restitution and Sankano was ordered to pay $3,867 in restitution. The court found that these defendants were responsible for distributing illegal copies of products that, if legitimate, would have been valued at more than $2 million.
The case was prosecuted by Assistant U.S. Attorney Brian Pearce in the Northern District of Georgia and Senior Counsel John H. Zacharia of the Criminal Division’s Computer Crime and Intellectual Property Section. The case was investigated by special agents of the FBI and the Department of Homeland Security, Immigration and Customs Enforcement, together with officers of the Atlanta Police Department Organized Crime Unit; the College Park, Ga., Police Department; and the East Point, Ga ., Police Department. Assistance was provided by the Recording Industry Association of America and the Motion Picture Association of America.
The sentence announced today is an example of efforts being undertaken by the Department of Justice Task Force on Intellectual Property (IP Task Force). Attorney General Eric Holder created the IP Task Force to combat the growing number of domestic and international intellectual property crimes, protect the health and safety of American consumers, and safeguard the nation’s economic security against those who seek to profit illegally from American creativity, innovation and hard work. The IP Task Force seeks to strengthen intellectual property rights protection through heightened criminal and civil enforcement, greater coordination among federal, state and local law enforcement partners, and increased focus on international enforcement efforts, including reinforcing relationships with key foreign partners and U.S. industry leaders. To learn more about the IP Task Force, go to www.justice.gov/dag/iptaskforce .
El Departamento de Justicia Llega a un Acuerdo Conciliatorio con Nixon State Bank para Resolver Alegatos de Discriminación en PréstamosRead the Press Release
WASHINGTON – El Departamento de Justicia anunció hoy que Nixon State Bank de Nixon, Texas, establecerá políticas de precios uniformes, llevará a cabo capacitación de empleados y pagará casi 100,000 dólares como parte de un acuerdo conciliatorio para resolver alegatos de que adoptó un patrón o práctica de discriminación en base al origen nacional.
El acuerdo conciliatorio, que está sujeto a aprobación del tribunal, fue presentado junto con la demanda del Departamento de Justicia en el Tribunal Federal de Distrito del Distrito Oeste de Texas. La demanda alega que Nixon cobraba mayores precios en préstamos sin garantía para consumidores realizados a prestatarios hispanos en las sucursales de Nixon, lo que viola la Ley de Igualdad de Oportunidades de Crédito [Equal Credit Opportunity Act (ECOA)].
“Un acceso justo e igualitario al crédito es crucial y las entidades crediticias tienen la responsabilidad de implementar protocolos para garantizar que todos sus programas de préstamos cumplan con la ley y no discriminen”, dijo Thomas E. Perez, Asistente Fiscal General de Justicia de la División de Derechos Civiles. “La División de Derechos Civiles está comprometida a hacer valer los préstamos justos para detener los abusos en todo el espectro de mercados crediticios. Nos complace saber que este acuerdo conciliatorio compensará a las víctimas de esta conducta discriminatoria y felicitamos a Nixon por trabajar en cooperación con el Departamento de Justicia para llegar a una resolución correcta de este caso”.
“Toda forma de discriminación es intolerable, lo que incluye el préstamo de dinero”, declaró el Fiscal Federal John E. Murphy. “Las tasas que los clientes pagan por los créditos deben basarse únicamente en factores directamente relacionados con su capacidad crediticia, sin importar su raza u origen nacional”.
“La Corporación Federal de Seguros de Depósitos Bancarios [Federal Deposit Insurance Corporation (FDIC)] está comprometida a garantizar que los bancos que supervisa cumplan con leyes de préstamos justos, entre ellas la Ley de Igualdad de Oportunidades de Crédito”, dijo Mark Pearce, Director de la División de Protección de Inversionistas y Consumidores. “Este caso específico subraya los peligros de establecer precios discrecionales en productos de préstamo. Agradecemos la colaboración del Departamento de Justicia para tratar este asunto”.
Antes de mediados de 2009, Nixon no tenía una directriz escrita para precios en los préstamos en el caso de sus préstamos sin garantía para consumidores, sino que los agentes de préstamos del banco podían manejar todos los aspectos de la transacción del préstamo sin garantía para consumidores con amplia discreción. La demanda del Departamento de Justicia alega que esta política tenía un impacto dispar en los prestatarios hispanos.
Nixon comenzó a desarrollar políticas de precios uniformes a fines de 2009, que incluían la implementación de una matriz de tasas uniformes para los préstamos sin garantías para consumidores. Como parte del acuerdo conciliatorio, Nixon revisará estas y otras políticas de precios para garantizar que el precio cobrado por sus préstamos esté fijado de manera no discriminatoria de acuerdo con los requisitos de la ECOA. El acuerdo conciliatorio también le exige a Nixon que pague casi 100,000 dólares a las víctimas hispanas de la discriminación, controle sus préstamos en busca de disparidades basadas en el origen nacional y les brinde capacitación sobre igualdad de oportunidades crediticias a sus empleados. El acuerdo también le prohíbe al banco discriminar en base al origen nacional en cualquier aspecto de una transacción de crédito.
La demanda se originó en una remisión de 2010 a la División de Derechos Civiles del Departamento de Justicia por parte de la FDIC. Nixon es un miembro de la FDIC.
La División de Derechos Civiles, la Fiscalía Federal del Distrito Oeste de Texas y la FDIC son miembros de la Fuerza de Tarea de Coacción contra el Fraude Financiero. El Presidente Obama estableció la Fuerza de Tarea Interagencia de Coacción contra el Fraude Financiero para llevar a cabo una iniciativa enérgica, coordinada y proactiva para investigar y enjuiciar los delitos financieros. La fuerza de tarea incluye a representantes de una amplia gama de dependencias federales, autoridades regulatorias, inspectores generales y miembros de las fuerzas del orden público estatales y locales, quienes, trabajando juntos, aprovechan un poderoso espectro de recursos de coacción penal y civil. La fuerza de tarea está trabajando para mejorar la labor en todo el poder ejecutivo federal, y con asociados estatales y locales, para investigar y enjuiciar los delitos financieros importantes, asegurar un castigo justo y eficaz para quienes cometan delitos financieros, combatir la discriminación en los mercados de préstamos y financieros y recuperar fondos para las víctimas de delitos financieros. Para obtener más información sobre la fuerza de tarea, visite www.StopFraud.gov.
Para obtener una copia de la demanda, así como también información adicional sobre la labor del Departamento de Justicia para hacer valer las leyes de otorgamiento justo de préstamos, visite el portal del Departamento de Justicia en www.justice.gov/fairhousing.
Departments of Justice, Health and Human Services Highlight Joint Efforts to Combat Health Care Fraud in PhiladelphiaRead the Press Release
WASHINGTON – U.S. Attorney General Eric Holder and the Department of Health and Human Services (HHS) Secretary Kathleen Sebelius visited Philadelphia today where they participated in the sixth regional health care fraud prevention summit. The summits bring together a wide array of federal, state and local partners, beneficiaries, providers and other interested parties to discuss innovative ways to eliminate fraud within the U.S. health care system.
The summits are part of a larger effort on behalf of the Obama Administration to root-out waste, fraud and abuse within the U.S. health care system.
“In communities across the country, and particularly here in Philadelphia, health care fraud schemes are being aggressively and permanently shut down. That’s, in large part, because of the great work being led by Health Care Fraud Prevention and Enforcement Action Team,” said Attorney General Eric Holder. “Not only have we secured record recoveries totaling billions of dollars, we have raised awareness about these crimes and improved the ability of consumers and victims to report suspected fraud schemes. Through this initiative, we have forged partnerships necessary to ensure the strength and integrity of our most essential health care programs.”
“Today, we continue to work with patients to protect their information, with providers to strengthen screening standards, and with private insurers to share strategies about how to prevent fraud,” said HHS Secretary Kathleen Sebelius. “The Affordable Care Act gives us new resources to eliminate waste and kick criminals out of the health care system. As long as we continue to aggressively put these tools to work preventing and prosecuting fraud, we can continue to protect and strengthen Medicare’s future.”
Joining Attorney General Holder and Secretary Sebelius at the University of the Sciences in Philadelphia were Assistant Attorney General Tony West of the Civil Division and U.S. Attorney Zane D. Memeger for the Eastern District of Pennsylvania. The summit featured educational panels aimed at identifying best practices for providers, law enforcement, and beneficiaries in preventing health care fraud. The summit also showcased the success of public-private partnerships in curbing fraudulent schemes.
The U.S. Attorney’s Office for the Eastern District of Pennsylvania continues to show its strength as one of the leading offices in the nation for health care fraud recoveries, bringing in a record $2.7 billion for the Department of Justice in the past two calendar years. The office set a new record in 2009 when it announced the $1.415 billion joint civil and criminal resolution with pharmaceutical manufacturer Eli Lilly over the company’s off-label marketing of the drug Zyprexa. At the time, it was the largest monetary settlement against a single company.
Investments in fraud detection and enforcement have been shown to pay for themselves many times over, and the Administration’s tough stance against fraud is already yielding results. In FY 2010, more than $4 billion was returned to the Medicare Health Insurance Trust Fund, the U.S. Department of the Treasury and others as a result of enforcement activities targeting false claims and fraud perpetrated against government health care programs. This was an increase of $1.4 billion, or 56 percent, over FY 2009. The $4 billion recovered in FY 2010 includes recoveries from the $2.5 billion in settlements and judgments obtained in FY 2010 by the Department of Justice in False Claims Act matters alleging health care fraud. This is an unprecedented level of funds obtained in a single year and represents a 53 percent increase over FY 2009, in which $1.63 billion was obtained.
The summits are part of the overall joint health care fraud fighting effort undertaken jointly by the Departments of Justice and Health and Human Services through the Health Care Fraud Prevention and Enforcement Action Team (HEAT). As one part of HEAT’s efforts, Medicare Fraud Strike Force operations have expanded from South Florida and Los Angeles to a total of nine health care fraud hot spots including Houston; Detroit; Brooklyn, N.Y.; Baton Rouge, La.; Tampa, Fla.; Chicago; and Dallas. The Strike Force is a partnership between the Criminal Division’s Fraud Section, U.S. Attorneys’ Offices, HHS’ Office of Inspector General, FBI, and other federal, state and local law enforcement partners.
On June 8, 2010, President Obama announced this nationwide series of regional fraud prevention summits as part of a multi-faceted effort to crack down on health care fraud. The Philadelphia summit was the sixth in a series. Previous summits were held in Miami (July 16, 2010), Los Angeles (Aug. 26, 2010), New York (Nov. 5, 2010), Boston (Dec. 16, 2010) and Detroit (March 15, 2011).
The recently enacted Affordable Care Act provides additional tools and resources to fight fraud in the health care system by providing an additional $350 million over the next ten years through the Health Care Fraud and Abuse Control Account. The Act toughens sentencing for criminal activity, enhances screenings and enrollment requirements, encourages increased sharing of data across government, expands overpayment recovery efforts, and provides greater oversight of private insurance abuses. For information on the 2009 Health Care Fraud and Abuse Control Program Report, please visit: www.justice.gov/dag/pubdoc/hcfacreport2009.pdf.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to www.stopmedicarefraud.gov .
Antitrust Division Issues Updated Merger Remedies GuideRead the Press Release
WASHINGTON – The Department of Justice today released an updated version of the Antitrust Division’s Policy Guide to Merger Remedies. The policy guide is a tool for Antitrust Division staff to use in analyzing proposed remedies in its merger matters. It also provides transparency into the division’s approach to merger remedies for the business community, the antitrust bar and the broader public.
Although the updated policy guide reflects changes in the merger landscape, the goal of the Antitrust Division remains the same – to provide an effective remedy to eliminate the anticompetitive effects of a proposed transaction, the department said.
“In every case, the Antitrust Division focuses on the specific facts of the proposed transaction. We are prepared to clear a merger, block a merger or accept a remedy that maintains efficiencies as long as the result eliminates any competitive harm,” said Assistant Attorney General Christine Varney of the Department of Justice’s Antitrust Division. “In the current environment of increasing transnational mergers and complex vertical transactions, the Antitrust Division must be ever nimble in its efforts to ensure that any remedies effectively preserve competition, promote innovation and protect consumers. The updated policy guide takes into account these changes.”
The updated policy guide highlights the role of the Antitrust Division’s recently created Office of the General Counsel, which will be principally responsible for enforcing division consent decrees. The updated policy guide also reflects the changes in the merger landscape and the lessons the division has learned from the remedies it has entered into since the issuance of the original guide in 2004, ensuring that it accurately details the division’s merger remedy practices.
The policy guide states that effective merger remedies typically include structural or conduct provisions, or a combination. In horizontal merger matters, the division continues to rely predominantly on structural remedies, sometimes in combination with conduct remedies. However, the division has found that in many vertical transactions tailored conduct relief can prevent competitive harm while allowing the merger’s efficiencies to be realized.
The key principles the Antitrust Division applies in analyzing merger remedies remain the same:
- Effectively preserving competition is the key to an appropriate merger remedy;
- Remedies should focus on preserving competition, not protecting individual competitors; and
- A remedy must be based on careful application of legal and economic principles to the particular facts of a specific case.
A copy of the Policy Guide is available on the Department of Justice’s website: www.justice.gov/atr/public/guidelines/272350.pdf
Thursday 16 June 2011
Swift Beef Company to Pay $1.3 Million Penalty for Clean Water Act and State Law Violations at Its Grand Island, Nebraska Beef Processing PlantRead the Press Release
WASHINGTON – Swift Beef Company, a subsidiary of JBS S.A, the world’s largest beef producer, has agreed to pay $1.3 million to the United States and state of Nebraska to settle alleged violations of the federal Clean Water Act and Nebraska state law at its Grand Island, Neb., beef processing plant, the U.S. Department of Justice and the U.S. Environmental Protection Agency (EPA) announced today.
Swift has already spent over $1 million at its Grand Island plant in implementing measures to reduce pollutants in its wastewater as required by its discharge permits issued by the state of Nebraska under the Clean Water Act.
“Swift will pay a significant penalty for its illegal discharges of wastewater that caused interference with the local water treatment system and damage to the aquatic ecosystem of the Wood and Platte rivers,” said Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division of the Department of Justice. “The same industry that puts food on American dinner tables must also comply with the Clean Water Act that keeps our country’s waterways healthy, safe and clean.”
“Protection of our waterways is one of our highest priorities,” said Deborah R. Gilg, U.S. Attorney for the District of Nebraska. “Fouling our Nebraska water demands a harsh penalty to deter others from doing so. We appreciate the collaboration among federal and state agencies that accomplished this.”
The Nebraska Department of Environmental Quality issued Swift a permit under the Clean Water Act that allowed Swift to discharge wastewater containing limited amounts of pollutants directly to the Wood River and to the city of Grand Island’s publicly owned treatment works (POTW). The permit prohibited Swift from discharging pollutants that would interfere with the POTW’s treatment process and also required Swift to monitor and report its discharges. According to the complaint, in which Nebraska joined as a co-plaintiff, Swift violated its permit on numerous occasions between 2006 and 2011 by discharging pollutants in excess of the permitted limits and that caused interference with the Grand Island’s POTW’s treatment process. Some of these violations resulted in a 2008 fish kill in a 16 mile stretch of the Wood River and a 7.5 mile length of the Platte River. An estimated 10,000 fish were killed. The complaint alleges that Swift also violated its permits’ reporting requirements as well as effluent limitations in an emergency order issued by the state of Nebraska in April 2008.
Swift is headquartered in Greeley, Colo. Swift’s Grand Island beef processing plant slaughters, fabricates and packages approximately 5,800 head of beef per day. The plant also conducts blood drying, rendering and hide pickling. The Grand Island plant has approximately 2,700 employees.
After the fish kill in 2008, Swift undertook voluntary improvements to its treatment system to prevent future upsets at Grand Island’s POTW and to protect aquatic life and beneficial uses, such as fishing, swimming and boating in the Wood and Platte rivers. The expansion of Swift’s anaerobic treatment system and installation of centrifuges will result in annual pollutant reductions of 1,281,150 pounds of carbonaceous biological oxygen demand (CBOD), 579,438 pounds of total suspended solids (TSS) and 340,195 pounds of oil and grease.
“EPA Region 7 worked effectively with Nebraska's Department of Environmental Quality to investigate and remedy this unacceptable pollution of the state's premier river,” said EPA Region 7 Administrator Karl Brooks. “This kind of teamwork typifies EPA's commitment to partnership with states and illustrates this region's dedication to clean water and public health.”
The consent decree requires Swift to pay more than $1.3 million in civil penalties and damages to natural resources, including a $1.2 million civil penalty for its Clean Water Act violations that will be split evenly between the U.S. and Nebraska. In addition, Swift will pay Nebraska $100,000 for violations of a state 2008 administrative order and will pay the Nebraska Game and Parks Commission $4,705 for resource damages to restock waters with fish and clams.
This case was brought as part of the National Pretreatment Program, which is a cooperative effort of federal, state and local regulatory environmental agencies established to protect water quality. The program seeks to protect POTWs from the introduction of pollutants that may interfere with plant operation or that may pass through untreated. By reducing the level of pollutants discharged by industry into municipal sewage systems, the pretreatment program protects America's multi-billion-dollar public investment in treatment infrastructure. Eighty-five categories of industrial users are subject to numerous self-implementing regulations.
Learn more about EPA’s civil enforcement of the Clean Water Act: http://www.epa.gov/compliance/civil/cwa/cwaenfprog.html
The consent decree is subject to a 30-day public comment period and approval by the federal court. A copy of the consent decree is available on the Justice Department Web site at www.justice.gov/enrd/Consent_Decrees.html
Justice Department Reaches Settlement with Midwest BankCentre Regarding Alleged Lending Discrimination in St. LouisRead the Press Release
WASHINGTON –Midwest BankCentre will open a full-service branch in an African-American neighborhood and invest approximately $1.45 million in majority African-American areas of the St. Louis metropolitan area as part of a settlement to resolve allegations that they engaged in a pattern or practice of discrimination on the basis of race and color, the Justice Department announced today.
The settlement, which remains subject to court approval, was filed in conjunction with the department’s complaint in the U.S. District Court for the Eastern District of Missouri. The complaint alleges that Midwest BankCentre violated the Fair Housing Act and the Equal Credit Opportunity Act, which prohibit financial institutions from discriminating on the basis of race and color in their mortgage lending practices. The lawsuit alleges that Midwest BankCentre has served the credit needs of the residents of predominantly white neighborhoods in the Missouri portion of the St. Louis metropolitan area to a significantly greater extent than they have served the credit needs of majority African-American neighborhoods. Those neighborhoods are in and to the north and west of the city of St. Louis. They are easily recognized because t he Missouri portion of the St. Louis metropolitan area has long had highly-segregated residential housing patterns, especially for African-Americans.
“Lending discrimination deprives communities of access to credit and leaves the residents of minority neighborhoods vulnerable to predatory lenders. This type of discrimination is part of the web of intolerable practices that stripped vast amounts of wealth from communities of color in the last decade,” said Thomas E. Perez, Assistant Attorney General for the Justice Department’s Civil Rights Division. “We are pleased that Midwest BankCentre has begun working with community groups and agreed to invest and take creative steps to build credit in an area that has been long been neglected by the banking community.”
“Racial or other illegal discrimination has no place in our credit markets,” said Federal Reserve Board Governor Elizabeth A. Duke. “We are pleased that this settlement is designed to expand fair access to credit.”
Under the settlement, Midwest BankCentre will invest $900,000 in a special financing program to increase the amount of credit the bank extends to majority African-American areas in the Missouri portion of the St. Louis metropolitan area, spend $300,000 for consumer education and credit repair programs, and spend $250,000 for outreach to potential customers and promotion of their products and services. Midwest BankCentre will also open a full-service branch in a majority African-American area within the Missouri portion of the St. Louis metropolitan area and conduct fair lending training for its employees. The agreement also prohibits Midwest BankCentre from discriminating on the basis of race or color in any aspect of a residential real estate-related or credit transaction.
The lawsuit originated from information gathered by the Metropolitan St. Louis Equal Housing Opportunities Council and provided to the Department of Justice in 2009, as well as a 2010 referral by the Board of Governors of the Federal Reserve System to the Justice Department’s Civil Rights Division. As part of the settlement, Midwest will pay $25,000 to compensate the Metropolitan St. Louis Equal Housing Opportunity Council for the resources that it diverted to this matter. Midwest BankCenter is a member of the Federal Reserve System.
The Civil Rights Division and the Board of Governors of the Federal Reserve System are members of the 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 on the task force, visit www.StopFraud.gov .
A copy of the complaint, as well as additional information about fair lending enforcement by the Justice Department, can be obtained from the Justice Department’s website at www.justice.gov/fairhousing .
Five Alabama Tax Return Preparers Charged with Tax FraudRead the Press Release
WASHINGTON – A group of five tax return preparers were indicted in the Middle District of Alabama on tax fraud charges, the Justice Department and Internal Revenue Service (IRS) announced today. James E. Moss, who owned and operated “Flash Tax,” was charged with four of his employees by a grand jury sitting in Montgomery, Ala. Moss along with Lutoyua N. Thompson, Chiquita Q. Broadnax, Avada L. Jenkins and Melinda M. Lambert were each charged with one count of conspiracy to defraud the United States and 27 counts of assisting in the preparation of false tax returns.
According to the indictment, the group conspired to knowingly place false information on taxpayers’ returns in order to obtain higher tax refunds from the IRS. The indictment further alleges that the group sought at least $129,266 in fraudulent tax refunds from the IRS.
An indictment merely alleges that a crime has been committed, and a defendant is presumed innocent until proven guilty beyond a reasonable doubt. If convicted, each defendant faces a maximum of 86 years in prison.
The case is being investigated by IRS-Criminal Investigation and is being prosecuted by Assistant U.S. Attorney Todd Brown and by Tax Division Trial Attorneys Charles M. Edgar, Jr. and Michael Boteler.
More information about the Justice Department's Tax Division and its enforcement efforts is available at www.justice.gov/tax/ .
Federal Court Bars Firm with Offices in Pennsylvania and Virginia from Promoting Stock-Loan Tax SchemeRead the Press Release
WASHINGTON – A federal court has permanently barred HedgeLender LLC from promoting a stock-loan tax scheme, the Justice Department announced today. According to court findings, HedgeLender, which maintained offices in Philadelphia and Reston, Va., promoted a scheme purportedly allowing owners of appreciated stock to obtain cash through purported loans without reporting or paying tax on capital gains.
In entering a permanent injunction order against the firm, Judge T.S. Ellis III of the U.S. District Court for the Eastern District of Virginia found that HedgeLender knowingly made false statements when it told potential customers that these “HedgeLoan” transactions were true loans secured by the customers’ stock. In reality, the court found, the stock was sold immediately, and the funds provided to the customers were sales proceeds, not loan proceeds, and therefore subject to federal income tax on capital gains at the time of receipt. According to the court, HedgeLender caused the sale of more than $268 million in securities through the HedgeLoan scheme, and it promoted the program even after the U.S. Securities and Exchange Commission sued two of its owners, who agreed to stop promoting a similar stock-loan product.
The order announced today is the latest in a series of federal court decisions finding that purported stock-loan transactions like the HedgeLoan scheme are actually sales and not loans. In November 2009, a California federal court enjoined the developer of a similar scheme, the Derivium 90 percent loan program. The government complaint against HedgeLender also named two alleged owners of HedgeLender, Daniel Stafford and Fred R. Wahler, Jr., as well as William Chapman and two companies he allegedly owned, Alexander Capital Markets LLC and Alexander Financial LLC. All five of those defendants previously agreed to permanent injunctions without admitting the allegations in the complaint.
In the past decade, the Justice Department’s Tax Division has obtained hundreds of injunctions against tax return preparers and tax fraud promoters. Information about these cases is available on the Justice Department website .
Department of Justice on Behalf of Partner Agencies Releases Solicitation to Build Capacity in Distressed NeighborhoodsRead the Press Release
WASHINGTON – The Department of Justice’s Bureau of Justice Assistance (BJA) today announced the Building Neighborhood Capacity Program (BNCP) Training and Technical Assistance (TTA) Coordinator Solicitation, part of an innovative approach to build capacity in distressed neighborhoods. The BNCP, a core component of the Administration’s Neighborhood Revitalization Initiative (NRI), seeks an experienced TTA coordinator to help an initial group of five neighborhoods build capacity for revitalization and resiliency to prevent and fight crime.
Led by the White House Domestic Policy Council, the NRI brings together the Departments of Housing and Urban Development (HUD), Education, Justice, Health and Human Services and Treasury to align federal programs supporting neighborhood revitalization and to implement interagency pilot programs, such as BNCP. This solicitation is announced on behalf of the NRI and funded through the Departments of Justice, HUD and Education.
“While there are different streams of federal aid available to neighborhoods in need, some communities lack the capacity to qualify for and use this assistance,” said U.S. Attorney General Eric H. Holder, Jr. “This program will build capacity in those neighborhoods, so residents, businesses and leaders are better able to collectively solve problems, identify, access and leverage existing resources, and put improvements in place. Given fiscal realities, this is a significant step towards ensuring that all Americans have access to safe, healthy neighborhoods with affordable housing, good jobs, quality schools and essential services.”
BNCP complements traditional, program-based public and private investment, especially federally-funded programs. An interagency federal team led by the NRI will provide guidance and manage BNCP activities. BJA will oversee the coordinator in consultation with the NRI team.
“This partnership will help build the capacity of community-based organizations to ensure that there is a great school at the center of every neighborhood,” said U.S. Secretary of Education Arne Duncan. “Education is everyone's responsibility, and all of us in the federal government and the local level have to work together to build strong schools and communities.”
“Through the work of this federal partnership, local communities will be better equipped to bring affordable housing, jobs and education to neighborhoods that were once plagued with high poverty, blight and distress,” said Shaun Donovan, U.S. Secretary of Housing and Urban Development. “Problems in housing, school quality and public safety are inextricably connected in neighborhoods -- and working across silos at the federal level is crucial to achieving any success.”
“The NRI recognizes that interconnected problems require interconnected solutions,” said Laurie O. Robinson, Assistant Attorney General for the Office of Justice Programs. “By breaking down the silos that often exist in federal assistance, this initiative empowers communities to more easily and fully leverage available, existing resources and effect lasting, meaningful change in distressed neighborhoods.”
More information about the Neighborhood Revitalization Initiative is available at www.whitehouse.gov/sites/default/files/nri_description.pdf. The BNCP TTA Coordinator solicitation can be found at www.ojp.usdoj.gov/BJA/grant/11BNCTTAsol.pdf.
The Office of Justice Programs (OJP), headed by Assistant Attorney General Laurie O. Robinson, provides federal leadership in developing the nation’s capacity to prevent and control crime, administer justice, and assist victims. OJP has six bureaus and offices: the Bureau of Justice Assistance; the Bureau of Justice Statistics; the National Institute of Justice; the Office of Juvenile Justice and Delinquency Prevention; the Office for Victims of Crime; and the Office of Sex Offender Sentencing, Monitoring, Apprehending, Registering, and Tracking (SMART). More information about OJP and its components can be found at www.ojp.gov.
Chief Engineer Sentenced in Maryland for Obstructing Investigation into the Illegal Overboard Discharge of Oily WasteRead the Press Release
WASHINGTON – Dimitrios Grifakis, 57, of Kallithea, Greece, was sentenced today by U.S. District Judge Marvin J. Garbis to six months in prison, followed by two years of supervised release, for obstructing a Coast Guard inspection that took place in May 2010 aboard a Liberian-operated cargo ship M/V Capitola at the Port of Baltimore. Grifakis was then the Chief Engineer of the Capitola.
In a related case, Cardiff Marine Inc., the Liberian-registered shipping company and operator of the Capitola previously pleaded guilty to obstructing a Coast Guard examination and violating the Act to Prevent Pollution from Ships. The company was sentenced in February 2011 to pay a $2.4 million fine, and to serve three years probation, subject to an environmental compliance plan that includes audits by an independent third party auditor.
The sentence was announced by U.S. Attorney for the District of Maryland Rod J. Rosenstein; Ignacia S. Moreno, Assistant Attorney General, Environment & Natural Resources Division, U.S. Department of Justice; Rear Adm. Dean Lee, Commander of the U.S. Coast Guard's 5th District; Special Agent in Charge Otis E. Harris, Jr. of the Coast Guard Investigative Service-Chesapeake Region; and Acting Special Agent in Charge Christian Spangenberg of Environmental Protection Agency’s (EPA) Criminal Investigation Division.
According to Grifakis’ guilty plea and other court documents, the investigation into the M/V Capitola was launched on May 3, 2010, at the Port of Baltimore, after a crew member informed a clergy member, who was on board the Capitola on a pastoral visit, that there had been “monkey business in the engine room,” which involved a “magic pipe.” The “magic pipe” proved to be a bypass hose that allowed the dumping of waste oil overboard, circumventing pollution prevention equipment required by law. The crew member asked the minister to alert the Coast Guard which triggered an inspection of the Capitola.
At his plea hearing, Grifakis admitted that from about March 2009 through May 3, 2010, he repeatedly ordered his subordinates to illegally pump oil-contaminated waste directly into the ocean, most commonly through the “magic pipe.” However, during the investigation, Grifakis falsely denied having ordered anyone to pump oily waste overboard and falsified documents to hide these discharges from inspectors in ports visited by the Capitola.
Every ship that enters the U.S. is required to have an accurate oil record book that records the ship’s operation related to oil, including the handling and disposal of oil contaminated waste. Grifakis presented an oil record book to the U.S. Coast Guard that was intentionally falsified to conceal the illegal overboard discharges of oil contaminated waste. An oil record book is required under U.S. law and the International Convention for the Prevention of Marine Pollution from Ships, also known as the MARPOL Protocol, which regulates the discharge of pollutants from vessels at sea. The objective of MARPOL is to preserve the marine environment through the complete elimination of intentional pollution by oil and other harmful substances and the minimization of accidental discharge of such substances. The United States is one of the one hundred and sixty-nine nations that are parties to MARPOL.
Grifakis also obstructed the investigation by concealing certain ship’s records and then denying that such records existed. Specifically, he concealed the Capitola’s daily sounding record, which is a daily measurement of the contents of the ship’s waste tanks. This record would have been useful during the Coast Guard’s inspection of the Capitola in that it could have shown when the levels of the waste tanks changed, which could be compared to entries in the oil record book. Sudden, unexplained drops in the measurements could have indicated specific dates when wastes were discharged overboard. The daily sounding record was not produced to the Coast Guard. Grifakis also directed other members of the engine room crew to lie to investigators and claim that the Capitola did not have a daily record of soundings.
This prosecution was made possible through the combined efforts of the U.S. Coast Guard Sector-Baltimore, the Coast Guard Investigative Service-Baltimore, Coast Guard Fifth District Legal Office, Coast Guard Office of Maritime and International Law, Coast Guard Office of Investigations and Analysis, and EPA Criminal Investigation Division with assistance from U.S. Customs and Border Protection. The cases were prosecuted by Justin S. Herring, Assistant U.S. Attorney in Maryland and Thomas T. Ballantine, Environmental Crimes Section of the Environment and Natural Resources Division of the U.S. Department of Justice.
Alabama Women Sentenced for Roles in Tax Fraud ConspiracyRead the Press Release
WASHINGTON – Betty Washington, a resident of Montgomery County, Ala., was sentenced today to 21 months in prison and ordered to pay restitution in the amount of $1,440,632 for conspiring to file false claims for refunds, the Justice Department announced. Wendy Delbridge, also of Montgomery County, was sentenced to five days in jail time and six months home confinement for her role in the same conspiracy and ordered to pay restitution in the amount of $45,219. Both women pleaded guilty in January 2011.
According to court documents, between October 2009 and September 2010, Washington conspired with others to fraudulently obtain tax refunds. The conspiracy involved using stolen identities to file false income tax returns claiming refunds. At the behest of co-conspirator Alchico Grant, Washington opened up a bank account at a local bank to receive tax refunds from the scheme. Sixteen different refunds, issued in the name of 16 different individuals, were deposited into the bank account. When the bank closed the account because of the suspicious nature of the deposits, Washington opened new bank accounts at a credit union in her name and in the name of Central Alabama Financial Services. Over the course of several months, more than 300 false refunds were deposited into these bank accounts, totaling more than $1.4 million in fraudulent refunds. To distribute the fraudulent refunds, Washington wrote checks and obtained official checks payable to various co-conspirators and associates and withdrew refund money in cash as well. She retained a portion of the refunds for herself.
Delbridge played a similar role. At co-conspirator Veronica Dale’s direction, she also set up a bank account at a local bank to receive fraudulent refunds. When the bank closed the account because it was receiving tax refunds that were not in Delbridge’s name, she opened a new bank account at a credit union. Between February 2010 and June 2010, the two bank accounts received more than $50,000 in false tax refunds, which Delbridge withdrew in cash and provided to Dale. In return, Delbridge was paid a portion of the fraudulently obtained refunds.
Along with three other co-defendants, Dale and Grant were indicted in December 2010 for their roles in the conspiracy. Grant was indicted a second time in April 2011 for again being involved in a scheme to fraudulently obtain tax refunds using stolen identities. On April 28, 2011, Grant’s pretrial release was revoked and he was ordered detained. Both Dale and Grant are currently awaiting trial.
Internal Revenue Service-Criminal Investigation agents investigated these cases, and Justice Department Tax Division Trial Attorneys Jason Poole and Michael Boteler, along with Assistant U.S. Attorney Jared Morris, are prosecuting the cases.
For more information about the Tax Division and its enforcement efforts, visit www.justice.gov/tax/ .
Wednesday 15 June 2011
Three Defendants Plead Guilty in Honolulu in Connection with Human Trafficking Scheme That Exploited 600 Thai WorkersRead the Press Release
WASHINGTON – Bruce Schwartz, 53, Sam Wongsesanit, 40, and Shane Germann, 42, have pleaded guilty to human trafficking violations involving the Los Angeles based recruiting company Global Horizons, the Justice Department announced today. Schwartz pleaded guilty to conspiring to commit forced labor, and Germann and Wongsesanit pleaded guilty to conspiring to commit document servitude.
In a superseding indictment unsealed on Jan. 18, 2011, eight defendants were charged in connection with a scheme to lure approximately 600 Thai nationals to enter the United States under the federal agricultural guest worker program between 2001 and 2007. According to the indictment, the defendants conspired to coerce the agricultural labor and services of the Thai nationals by fraudulently inducing the recruits to incur substantial debts secured by the workers’ homes and family land, then confiscating the workers’ passports, and threatening to repatriate the victims to face destitution, homelessness and other serious harm if they did not remain in the defendants’ service for meager earnings.
“These defendants pleaded guilty to participating in the largest human trafficking scheme ever seen by the Department of Justice,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The department is committed to prosecuting cases of human trafficking, both large and small, in order to protect some of the most vulnerable people in our country.”
“Through successful prosecution of those who take advantage of immigrant workers, we strive to ensure that the United States continues to be a land of economic opportunity, as it has for generations of workers preceding them,” said Florence T. Nakakuni, U.S. Attorney for the District of Hawaii.
Schwartz, Wongsesanit and Germann each face maximum sentences of five years in prison. Another associate of the defendants, Podjanee Sinchai, was charged and convicted in Thailand with recruitment fraud and sentenced to four years in prison.
The case is being investigated by the Honolulu Division of the FBI, with the assistance of the Los Angeles Division of the FBI; the Norfolk, Va., Division of the FBI; the Buffalo, N.Y., Division of the FBI; the Department of Homeland Security, Immigration and Customs Enforcement state offices in Los Angeles, Provo, Utah, and Washington; and the U.S. Department of State, Office of Diplomatic Security Field Office in Los Angeles. The victims are receiving assistance from the Thai Community Development Center in Los Angeles; Utah Legal Services in Salt Lake City; and Florida Rural Legal Services in Ft. Myers, Fla.
This case is being prosecuted by Senior Special Counsel Susan French and Trial Attorney Kevonne Small of the Civil Rights Division’s Human Trafficking Prosecution Unit, and Assistant U.S. Attorney Susan Cushman of District of Hawaii.
Montgomery, Alabama, Woman Pleads Guilty for Role in Tax Fraud and Identity Theft ConspiracyRead the Press Release
WASHINGTON – Laquanta Grant, a resident of Montgomery, Ala., has pleaded guilty to one count of conspiring to file false claims for refunds, the Justice Department announced today.
Along with four other defendants, Grant was indicted by a federal grand jury sitting in Montgomery on Dec. 14, 2010, on a variety of charges stemming from a large-scale tax fraud and identity theft conspiracy based in that city. According to the indictment and other court documents, the conspirators used stolen identities to file millions of dollars in false tax returns claiming fraudulent refunds over a two-year period in 2009 and 2010. During the conspiracy, Laquanta Grant was responsible for funneling well over a hundred thousand dollars in fraudulent refunds to her co-conspirators.
In February 2009, Grant caused another person (W.D.) to open a bank account that was used to deposit the fraudulent tax refunds. The false refunds were provided to co-conspirator Veronica Dale and others. Between March 2010 and May 2010, Grant accompanied W.D. to ensure that W.D. withdrew the fraudulent refunds from the bank account and provided the monies to Grant and her co-conspirators. Between March 2010 and July 2010, Grant received more than $100,000 in checks from Betty Washington, who was also helping move fraudulent refunds, and provided some of the money to Alchico Grant and others. Laquanta Grant retained a portion of the false refunds.
Washington pleaded guilty to a criminal information charging her with conspiring to defraud the United States on Jan. 5, 2011. Her sentencing is set for June 16, 2011. The case against Dale and several other co-conspirators is awaiting trial.
A sentencing date for Laquanta Grant has not been set. She faces a maximum of 10 years in prison, three years of supervised release, restitution and a maximum fine of $250,000, or twice the loss caused by the offense.
IRS-Criminal Investigation agents investigated this case, and Justice Department Tax Division trial attorneys Jason Poole and Michael Boteler, and Jared Morris, Assistant U.S. in the Middle District of Alabama are prosecuting the case.
More information about the Tax Division and its enforcement efforts can be found at: www.justice.gov/tax .
Former Executive of Illinois Refuse Container Repair Company Sentenced to Serve 16 Months in Prison for Conspiring to Defraud the City of ChicagoRead the Press Release
WASHINGTON — A former vice president of an Illinois refuse disposal container repair company was sentenced today to serve 16 months in prison and to pay a $40,000 criminal fine for his role in a conspiracy to commit mail and wire fraud in connection with bids on a contract with the city of Chicago, the Department of Justice announced.
Steven Fenzl, a California resident, was also sentenced by U.S. District Court Judge Ruben Castillo to pay $35,302 in restitution for his participation in a conspiracy to defraud the city of Chicago on a contract for the repair of refuse carts from as early as November 2004 to as late as September 2008. Fenzl, along with his business partner Douglas E. Ritter, was charged in an indictment filed on April 21, 2009, in U.S. District Court in Chicago. Fenzl was found guilty by a jury on Sept. 28, 2010, of one count of conspiracy to commit mail and wire fraud, two counts of mail fraud and one count of wire fraud. Ritter, an Illinois resident, pleaded guilty to the conspiracy on June 3, 2010, and was sentenced on May 10, 2011, to serve 16 months in prison and to pay $35,303 in restitution.
According to the indictment, Fenzl, Ritter and their co-conspirator conspired to deceive city of Chicago officials about the number of legitimate, competitive bids submitted for the contract. Specifically, Fenzl and his co-conspirators fraudulently induced other companies to submit bids for the contract at prices determined by Fenzl and his co-conspirators and greater than the price for which Fenzl’s company had submitted a bid. The department said that included in these bids were fraudulent documents indicating that, if awarded the contract, the bidder would enter into subcontracts to purchase goods or services for a specified percentage of the contract from a minority-owned business and a women-owned business, as required by the city of Chicago. According to the indictment, Fenzl and his co-conspirators also fraudulently certified to the city on Fenzl’s company’s bid that it had not entered an agreement with any other bidder relating to the price named in any other bid submitted to the city for the contract.
Today’s sentencing resulted from an investigation of the refuse cart repair industry being conducted by the Antitrust Division’s Chicago Field Office and the city of Chicago’s Office of Inspector General.
Anyone with information concerning bid rigging or other anticompetitive conduct involving government or private contracts with the city of Chicago is urged to call the Antitrust Division’s Chicago Field Office at 312-353-7530 or visit www.justice.gov/atr/contact/newcase.htm.
Federal Jury Imposes Death Sentence Against Connecticut Drug Dealer Convicted of Murder and Related ChargesRead the Press Release
WASHINGTON - A federal jury in New Haven, Conn., today voted unanimously to impose the federal death penalty against Azibo Aquart for his role in the murder of three individuals, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney David B. Fein for the District of Connecticut.
On May 23, 2011, the jury found Aquart, aka “Azibo Smith,” “Azibo Siwatu Jahi Smith,” “D,” “Dreddy” and “Jumbo,” 30, of Bridgeport, Conn., guilty of the Aug. 24, 2005, murders of Tina Johnson, 43; James Reid, 40; and Basil Williams, 54. The trial, before U.S. District Judge Janet Bond Arterton, began on April 20, 2011. The jury voted to impose the federal death penalty on four of the six counts of conviction. The court has not yet scheduled a date for imposition of the sentence.
According to the evidence submitted at trial, Aquart was the founder and leader of a drug trafficking group that primarily sold crack cocaine out of an apartment building located at 215 Charles Street in Bridgeport. Aquart and his associates participated in acts of violence, such as threats and assaults, to maintain their control over the group’s drug distribution activities at the Charles Street apartments. In the summer of 2005, Aquart and his associates became involved in a drug trafficking dispute with Johnson at the Charles Street apartments. According to evidence submitted at trial, Johnson sometimes sold smaller quantities of crack cocaine without the approval of Aquart.
According to the evidence submitted at trial, on the morning of Aug. 24, 2005, Aquart and others entered Johnson’s apartment, bound Johnson, her boyfriend Reid, and her friend Williams with duct tape and brutally beat the victims to death with baseball bats. Aquart and others then drilled the front door of the apartment shut from the inside.
In addition to witness testimony, the government offered extensive forensic evidence gathered from Johnson’s apartment, including fingerprints and evidence that contained DNA from Aquart and his co-conspirators. According to evidence presented at trial, Aquart’s fingerprint was found on a piece of duct tape recovered from the crime scene.
The jury found Aquart guilty of conspiring to commit murder in aid of racketeering and committing the racketeering murders of Johnson, Reid and Williams. The jury also found Aquart guilty of committing three counts of drug-related murder, and one count of conspiracy to possess with intent to distribute 50 grams or more of cocaine base (crack cocaine).
This case was investigated by the FBI; the Bridgeport Police Department; the Connecticut State Police; the Connecticut Department of Correction’s Intelligence Unit; U.S. Immigration and Custom Enforcement, Homeland Security Investigations; the U.S. Marshals Service; the Bridgeport State Attorney’s Office and the U.S. Attorney’s Office.
This case is being prosecuted by Assistant U.S. Attorneys Tracy L. Dayton, Peter D. Markle and Alina P. Reynolds of the U.S. Attorney’s Office for the District of Connecticut, and Trial Attorney Jacabed Rodriguez-Coss of the Criminal Division’s Capital Case Unit.
Tuesday 14 June 2011
United States Files Suit Against Florida-Based Bay Area Sleep Associates LLC and Its OwnerRead the Press Release
WASHINGTON – The United States has filed a complaint under the False Claims Act (FCA) against Bay Area Sleep Associates LLC, dba SomnoMedics LLC, and its owner, Edward Killmer Jr., the Justice Department announced today. The complaint, filed today in U.S. District Court for the Middle District of Florida, alleges that the defendants violated the FCA by knowingly submitting, or causing to be submitted, to the United States false claims for payments from multiple federal health care programs.
The government’s complaint alleges that beginning no later than 2004, the defendants hired unlicensed sleep technicians to perform sleep tests at one or more of their facilities. Medicare regulations require that diagnostic testing services performed at independent diagnostic testing facilities such as SomnoMedics must be performed by a technician licensed or certified by a state or national credentialing body in order to be reimbursed by Medicare. The complaint alleges that SomnoMedics utilized unlicensed sleep technicians to perform sleep tests on Medicare and TRICARE beneficiaries, but knowingly requested payment for these services despite being fully aware that SomnoMedics failed to comply with federal program reimbursement regulations.
“Providers who participate in federal health care programs must play by the rules, not cut corners,” said Tony West, Assistant Attorney General for the Justice Department’s Civil Division. “Billing the government for diagnostic tests performed by unlicensed technicians, as we allege here, is unfair to patients and a misuse of taxpayer dollars.”
“The United States Attorney’s Office is committed to taking the steps necessary to protect Medicare and other federal health care programs from fraud,” said Robert E. O’Neill, U.S. Attorney for the Middle District of Florida. “By bringing FCA cases such as this, we hope to recover funds obtained through the fraud and deter others from attempting similar schemes.”
This lawsuit was originally filed under the qui tam or whistleblower provisions of the FCA by William Revels, a former sleep study technician. Under those FCA provisions, a private party, known as a relator, can file an action on behalf of the United States and receive a portion of the recovery. In May of this year, the United States intervened in part of the lawsuit, and today filed its own complaint. Under the FCA, the United States may recover three times the amount of its losses plus civil penalties.
The government’s complaint is part of the United States’ emphasis on combating health care fraud and another step for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced by Attorney General Eric Holder and Kathleen Sebelius, Secretary of the Department of Health and Human Services in May 2009. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover more than $5. 8 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 $ 7.4 billion.
Contractor Sentenced to 37 Months in Prison<br /> for Death of Afghan National in Kabul, AfghanistanRead the Press Release
WASHINGTON – Christopher Drotleff, 31, of Virginia Beach, Va., was sentenced today to 37 months in prison for his role in shooting and killing an Afghan national while on an unauthorized convoy in Kabul, Afghanistan, on May 5, 2009, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney Neil H. MacBride of the Eastern District of Virginia and James W. McJunkin, Assistant Director in Charge of the FBI’s Washington Field Office. U.S. District Judge Robert G. Doumar also ordered Drotleff to serve three years of supervised release following his prison term.
On March 11, 2011, Drotleff and Justin Cannon, 29, of Corpus Christi, Texas, were convicted of involuntary manslaughter while working as contractors for the U.S. Department of Defense in Afghanistan. Cannon and Drotleff were acquitted of other charges, including second-degree murder, assault resulting in serious bodily injury and firearms offenses. Cannon is scheduled to be sentenced on June 27, 2011.
“Mr. Drotleff’s criminal conduct led to a tragic loss of innocent life,” said Assistant Attorney General Breuer. “We hope that today’s sentence will bring some measure of comfort to the victims’ families. Reckless violence by those who are employed by our armed forces abroad endangers the lives of innocent civilians and undermines the trust that our international partners have placed in our military efforts. Mr. Drotleff’s conduct stands in stark contrast to the actions of the many brave men and women who serve this country honorably.”
“Christopher Drotleff recklessly fired his nine millimeter pistol at unarmed Afghan civilians, killing two people and shattering the lives of many more,” said U.S. Attorney MacBride. “General Petraeus reminded us that Mr. Drotleff’s senseless killing not only took innocent lives but also seriously harmed our mission in Afghanistan and put the lives of American military and civilians in danger. The jury’s verdict and today’s sentence shows that no one is above the law – even in a combat zone – and that the reckless use of force will be punished.”
“International investigations are very complex, frequently dangerous and take a tremendous amount of dedication and effort on the part of our Special Agents,” said Assistant Director in Charge McJunkin of the FBI’s Washington Field Office. “The FBI in general and the Washington Field Office in particular, is both willing and able to deploy anywhere in the world to investigate violations of U.S. law no matter where they occur or who commits them.”
Cannon and Drotleff were charged under the Military Extraterritorial Jurisdiction Act (MEJA) in a superseding indictment filed on Aug. 5, 2010. Cannon and Drotleff were Department of Defense contractors employed by a subsidiary of Xe (formerly known as Blackwater Worldwide).
According to evidence presented at trial, on May 5, 2009, both men left their military base without authorization to transport local interpreters. The evidence at trial established that, after the lead vehicle in the convoy crashed and was overturned on the side of the road, Cannon and Drotleff fired multiple shots into the back of a civilian car that had attempted to pass the accident scene. The passenger of the car was fatally shot and the driver was seriously injured. An individual who happened to be walking his dog in the area was also killed in the shooting. The jury found the defendants guilty of involuntary manslaughter for the death of Romal Mohammad Naiem, the front-seat passenger. They were acquitted of charges relating to the death of the person walking his dog and injuries to the driver.
According to court records, as contractors, Cannon and Drotleff provided training to the Afghan National Army for the Islamic Republic of Afghanistan in the use and maintenance of weapons and weapons systems.
The case is being prosecuted by Trial Attorney Robert McGovern of the Criminal Division’s Human Rights and Special Prosecutions Section and Assistant U.S. Attorneys Randy C. Stoker and Alan M. Salsbury from the U.S. Attorney’s Office for the Eastern District of Virginia - Norfolk Division. The case was investigated by the FBI’s Washington Field Office and the U.S. Army Criminal Investigation Command.
Monday 13 June 2011
Nigerian Citizen Convicted in Atlanta for Trafficking Young Women from Nigeria to Work for Her as NanniesRead the Press Release
ATLANTA – Bidemi Bello, 41, a former resident of Suwanee, Ga., and a citizen of Nigeria, was convicted on eight counts by a federal jury late on Friday on charges of two counts of forced labor, two counts of trafficking for forced labor, one count of document servitude, one count of alien harboring and two counts of making false statements in an application to become a U.S. citizen. The trial lasted one week.
“The defendant both physically abused and psychologically intimidated these women for her own personal gain,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The Department of Justice will continue to vigorously prosecute individuals who force persons to do work against their will.”
U.S. Attorney for the Northern District of Georgia Sally Quillian Yates said of the case, “The evidence showed that this was a case of modern day slavery hidden within an expensive home in an upscale neighborhood. The two women who were abused here thought they were going to be nannies; instead they were treated inhumanely. The laws of the United States protect all victims from such abuse, regardless of where they came from or how they came to be in the United States.”
Brian D. Lamkin, Special Agent in Charge, FBI Atlanta Field Office, said, “The FBI worked very hard to not only apprehend Ms. Bello, who had previously fled the U.S., but to provide the much needed assistance to the victims, one of whom hadn't seen her parents in ten years. The close coordination with the many law enforcement agencies and the U.S. Attorney's Office in bringing Ms. Bello to justice is a testament to those agents that work these difficult and emotionally exhausting human trafficking cases.”
“Few crimes are more shocking than the trafficking of human beings in this country,” said Brock Nicholson, Special Agent in Charge of U.S. Immigration and Customs Enforcement's Homeland Security Investigations (ICE HIS). ”No one should have to live in a world of isolation and forced servitude. Together with our federal, state and local partners, ICE HSI is committed to protecting those who cannot protect themselves.”
According to evidence and testimony at trial, the jury heard from two victims who had been separately recruited in Nigeria by Bello’s offer to come to the United States to work as her nanny. In return, Bello promised she would send the young women to school in the United States, and for one victim, she promised to pay her as well. The first victim, identified in court as “Laome,” traveled with Bello in October 2001 when she as 17 years old, using a fraudulent British passport the defendant had obtained for her. The second victim, identified in court as “Dupe,” traveled with an associate of Bello’s to the United States in November 2004, when she was 20, also using a fraudulent British passport.
The evidence showed that once in the United States, Bello became verbally and physically abusive to both young women. She beat them for not cleaning well, beat them for not responding fast enough to her crying child and beat them if they talked back to her. The young women testified Bello beat them with a large wooden spoon, shoes, electric cords and her hands. One young woman was able to take pictures of her injuries with a disposable camera and in the pictures the jury saw her cut and bloodied lip from when Bello hit her while wearing rings.
Two witnesses, one a friend and one a relative of Bello, also testified about the abuse they witnessed. One woman described seeing Laome with bruises and swollen eyes from defendant’s abuse. Both women counseled Bello to stop abusing the girls. One of the women testified she told Bello about a criminal prosecution in Maryland of a couple for “modern day slavery.” Bello refused to stop her abuse and send the young women home, telling her friend, “I will not live in fear.” This friend helped the first victim, Laome, escape from Bello, by hiding her in the back of another woman’s car, who covered her with blankets, and drove her away. Bello then traveled back to Nigeria for the second victim, Dupe.
The evidence showed that even though Bello’s upscale home had multiple bedrooms and bathrooms, Bello made the young women sleep on the floor or a couch, and would not let them use the shower, but instead required them to bathe with the water in one bucket. Even though the young women cooked all of Bello’s meals, they were not allowed to eat the food they cooked, as Bello made them eat cheaper food or, sometimes, food that had spoiled and was moldy. Laome testified that she often threw up from the food Bello made her eat, and that at on at least one occasion, Bello made her eat that vomit.
The evidence also showed that the victims were sleep deprived, and forced to be on call for Bello’s child all night. The women were given ceaseless tasks such as mopping the floor with rags; washing a privacy fence in Bello’s backyard; cutting the grass with a tool called a cutlass, described as a long knife blade with a wooden handle; and washing the clothes and linens by hand in a bucket. Bello would not let the young women use modern appliances such as the washing machine, dishwasher or the lawn mower. The evidence showed that Bello never sent the young women to school as she had promised and never gave them any money for their years of work. Bello made the young women totally dependent on her for all their basic necessities and would not let them interact with anyone without Bello being present. Dupe finally saved up $60, given to her by friends of Bello, and called a cab. She was assisted by pastors at a church in Marietta, Ga., after taking the cab to the church.
Bello moved out of the United States during the investigation. She was indicted on the charges in September 2010. She was found and arrested at Bush Intercontinental Airport in Houston upon re-entering the United States.
Sentencing for Bello has been set for Aug. 24, 2011, before U.S. District Judge William S. Duffey Jr. The two forced labor charges and the two labor trafficking charges carry a maximum sentence of 20 years in prison and a fine of up to $250,000. The two document servitude counts carry a maximum sentence of five years in prison and a fine of up to $250,000. Lastly, the alien harboring count carries a maximum sentence of 10 years in prison and a fine of up to $250,000.
This case is being investigated by Special Agents of the FBI, ICE HSI and special agents with the U.S. State Department, Diplomatic Security Services. Assistant U.S. Attorney Susan Coppedge and Civil Rights Division’s Criminal Section Deputy Chief Karima Maloney are prosecuting the case.
Hecla Mining Company to Pay $263 Million in Settlement to Resolve Idaho Superfund Site Litigation and Foster CooperationRead the Press Release
WASHINGTON – A settlement has been reached with Hecla Mining Company to resolve one of the largest cases ever filed under the Superfund statute. Under the settlement, Hecla will pay $263.4 million plus interest to the United States, the Coeur d’Alene Tribe and the state of Idaho to resolve claims stemming from releases of wastes from its mining operations. Settlement funds will be dedicated to restoration and remediation of natural resources in the Coeur d’Alene Basin. The agreement, which was lodged in federal district court in Idaho today, brings closure to that lawsuit and establishes a strong basis for future cooperation between Hecla and the governments in the Coeur d’Alene Basin.
The lawsuit was originally brought against Hecla and other mining companies by the Coeur d’Alene Tribe in 1991 and was joined by the United States in 1996. The state of Idaho joined the lawsuit today in order to participate in the settlement and resolve its claims against Hecla. The lawsuit sought damages for injuries to natural resources such as clean water, fish and birds caused by millions of tons of mining wastes that had been released into the South Fork of the Coeur d’Alene River and its tributaries. The U.S. Environmental Protection Agency and Idaho have been performing cleanup work in the Coeur d’Alene Basin since the early 1980s, and the suit also sought to recover cleanup costs.
Prior to reaching this settlement with Hecla, the United States, the tribe and Idaho had settled their claims against other defendants named in lawsuits regarding historic mine releases in the Coeur d’Alene Basin. The current case history included a 78-day trial in 2001 by the United States and the tribe against ASARCO and Hecla on liability issues. ASARCO, the other primary defendant named in the lawsuit, reached settlement with the United States in 2008 while it was emerging from Chapter 11 bankruptcy. After the ASARCO settlement, U.S. District Judge Edward J. Lodge postponed the second phase of the trial against Hecla to allow time to reach a settlement.
The settlement also includes a process for coordinating Hecla’s future mining operations with cleanup activities in the Coeur d’Alene Basin.
“The resolution of these longstanding claims of the Coeur d’Alene Tribe, the state of Idaho and the United States at the Bunker Hill Superfund Site demonstrates the federal government's vigor in enforcing the nation's environmental laws.” said Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division at the Department of Justice. “This agreement will help pay for the U.S. government’s clean-up activities, secures natural resource damages, and will restore critical habitats to fish and wildlife in the Coeur d'Alene River Basin.”
“This settlement means cleanup and mining can now move forward together in the Silver Valley,” said Dennis McLerran, EPA Regional Administrator in Seattle. “Today's agreement not only provides more money for cleanup, but helps lay the foundation for a stronger future: one built on mining stewardship, a healthier environment and a growing, vibrant economy.”
The Bunker Hill Superfund site is one of the nation’s largest and most contaminated Superfund sites. At one time, the Upper Basin, or Silver Valley, was one of the largest silver producing districts in the world. As a result, the basin has been contaminated by the release of metals like lead and arsenic, which are widespread. EPA began cleanup at the site in the 1980s, focusing on protecting human health. Although measurable improvements in public and environmental health have been achieved, widespread contamination remains a challenge and cleanup work will continue for many years.
“Twenty years ago tribal leaders were convinced that not enough was being done to clean up the Coeur d’Alene Basin following a century of mining activity in the Silver Valley. Against all odds, the tribe made an unpopular decision to bring one of the largest superfund lawsuits in our nation’s history,” said Chief J. Allan, Chairman of the Coeur d’Alene Tribe. “Today we honor Henry SiJohn, Lawrence Aripa and Richard Mullen, three former leaders who were instrumental in that decision and who all passed away before they could see the results of their remarkable determination. As we move from litigation to restoration, I’m certain they are smiling down on us today. The tribe is hopeful that this settlement marks a new chapter in the stewardship of the land we all hold dear. The tribe stands together with the United States, the state of Idaho and Hecla to restore our natural resources while we continue to provide economic prosperity to the region.”
“This settlement brings decades of litigation to a close and provides a clear path to continue restoring the health of the environment, economy and communities of the Coeur d’Alene Basin,” Idaho Governor C.L. “Butch” Otter said.
The federal agencies responsible for the affected natural resources see this settlement as an opportunity.
“This settlement provides substantial funding that the trustees will use to restore habitat for fish, birds and other natural resources that have been injured for many decades by mining wastes,” said Rachel Jacobson, Acting Assistant Secretary for Fish, Wildlife, and Parks at the U.S. Department of Interior.
Maggie Pittman, Acting Forest Supervisor for the Idaho Panhandle National Forests agreed. “Our agencies brought this case to ensure restoration of the Coeur d’Alene River Basin for the communities it serves, and that is what this settlement provides.”
The consent decree, lodged in the U.S. District Court for the District of Idaho, is subject to a 30-day public comment period and approval by the federal court. A copy of the consent decree is available on the Justice Department Web site at www.justice.gov/enrd/Consent_Decrees.html .
Former U.S. Army Major Pleads Guilty to Bribery<br /> Related to Contracting in Support of Iraq WarRead the Press Release
WASHINGTON - A former U.S. Army major pleaded guilty today to bribery related to his work as a contracting officer’s representative in Kuwait from 2004 to 2006, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division.
Derrick L. Shoemake, 49, of Moreno Valley, Calif., pleaded guilty today before U.S. District Court Judge Dolly M. Gee in the Central District of California to a criminal information charging him with two counts of bribery. According to the court document, Major Shoemake was deployed to Camp Arifjan, Kuwait, as a contracting officer’s representative in charge of coordinating and accepting delivery of bottled water in support of U.S. troops in Iraq. While serving in Kuwait, Shoemake agreed to assist a contractor with his delivery of bottled water. In return, the contractor paid Shoemake a total of approximately $215,000, most of which was delivered to Shoemake’s designee in Los Angeles. Shoemake received an additional $35,000 from a second contractor for his perceived influence over the award of bottled water contracts in Afghanistan. In total, Shoemake admitted receiving approximately $250,000 from these two government contractors in 2005 and 2006.
Shoemake faces up to 15 years in prison for each bribery count, as well as a fine of $250,000 or three times the monetary equivalent of the thing of value. Additionally, Shoemake has agreed to criminal forfeiture of $250,000 to the United States. A sentencing date has not yet been scheduled by the court.
As a result of this investigation 17 individuals, including Shoemake, have pleaded guilty or been found guilty at trial for their roles in the schemes at Camp Arifjan.
This case is being prosecuted by Trial Attorney Richard B. Evans of the Criminal Division’s Public Integrity Section, and Trial Attorneys Mark W. Pletcher and Emily W. Allen of the Criminal Division’s Fraud Section. The case is being investigated by the Army Criminal Investigations Division, the Defense Criminal Investigative Service, the FBI, the Special Inspector General for Iraq Reconstruction, the Internal Revenue Service, U.S. Immigration and Customs Enforcement and others.
Friday 10 June 2011
Two Officers of Fraudulent Physical Therapy Company<br /> Plead Guilty in Tampa, Fla., to Medicare FraudRead the Press Release
WASHINGTON – Two Miami-area residents who were officers of a fraudulent physical therapy company in Lakeland, Fla., pleaded guilty today for their roles in a scheme to defraud Medicare, the Departments of Justice and Health and Human Services (HHS) announced.
Angel Gonzalez, 43, and Adrian Chalarca, 24, each pleaded guilty before U.S. Magistrate Judge Mark A. Pizzo in Tampa, Fla., to one count of conspiracy to commit health care fraud.
According to court documents, Gonzalez was the owner and vice president of Dynamic Therapy Inc. and Chalarca was the president and administrator of the company. Gonzalez, Chalarca and their co-conspirators purchased Dynamic from its prior owners and transformed it into a fraudulent enterprise. Under Gonzalez and Chalarca, Dynamic purported to provide physical therapy services to Medicare beneficiaries.
According to court documents, from fall 2009 to summer 2010, Gonzalez and Chalarca submitted and caused the submission of $757,654 in fraudulent claims by Dynamic to the Medicare program. Gonzalez and Chalarca admitted that they paid and caused the payment of kickbacks and bribes to Medicare beneficiaries in order to obtain their Medicare billing information and used it to submit claims to Medicare for physical therapy services that were never provided. According to court documents, Gonzalez and others also stole the identities of a physical therapist and Medicare beneficiaries in order to submit additional false claims to Medicare. Gonzalez and Chalarca admitted that they knew the Medicare beneficiaries, on whose behalf claims were submitted to Medicare, never received the services billed to Medicare.
Another vice president of Dynamic, Andres Cespedes, pleaded guilty in May 2011 for his participation in the fraud scheme.
At sentencing, Gonzalez and Chalarca each face a maximum penalty of 10 years in prison and a $250,000 fine. A sentencing date has not yet been scheduled.
Today’s guilty pleas were announced by Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney Robert E. O’Neill of the Middle District of Florida; Steven E. Ibison, Special Agent-in-Charge of the FBI’s Tampa Division; and Christopher Dennis, Special Agent-in-Charge of the HHS Office of Inspector General (HHS-OIG), Office of Investigations’ Miami Office.
This case was prosecuted by Acting Assistant Chief Benjamin D. Singer of the Criminal Division’s Fraud Section and Special Assistant U.S. Attorney Christina M. Burden of the Middle District of Florida. The case was investigated by the HHS-OIG, Defense Criminal Investigative Service and FBI, and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Middle District of Florida.
Since their inception in March 2007, Medicare Fraud Strike Force operations in nine locations have charged more than 1,000 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 .
South Florida Corrections Officers Indicted on Federal Civil Rights and Obstruction ChargesRead the Press Release
WASHINGTON - The Justice Department announced today the indictment of South Florida Reception Center (SFRC) officers Alexander McQueen, 30; Guruba Griffin 31; Scott Butler, 32; and Steven Dawkins, 30, on charges of conspiring to violate the civil rights of inmates at SFRC. McQueen and Dawkins are also charged with obstruction of justice.
The indictment alleges that on Feb. 25, 2009, defendants McQueen, Griffin, Butler and Dawkins conspired to violate the civil rights of inmates at SFRC by physically abusing inmates and forcing them to fight one another. The indictment further alleges that defendants McQueen and Dawkins filed false reports to obstruct an investigation into the prisoner abuse, and that McQueen attempted to corruptly persuade a witness.
If convicted, each defendant faces a maximum penalty of 10 years in prison on the felony civil rights charge. Additionally, McQueen and Dawkins face maximum penalties of 20 years in prison on their respective obstruction charges.
An indictment is merely an accusation, and the defendants are presumed innocent unless proven guilty.
This case was investigated by the FBI and the Inspector General’s Office, Florida Department of Corrections, and is being prosecuted by Assistant U.S. Attorney Susan Rhee Osborne of the U.S. Attorney’s Office for the Southern District of Florida and Senior Litigation Counsel Gerard Hogan and Trial Attorney Henry Leventis of the Civil Rights Division.
Jackson County, Michigan, Man Charged with Gun Crime and Obstructing the Internal Revenue ServiceRead the Press Release
WASHINGTON – A Detroit grand jury has returned a superseding indictment charging Karl Herrington, of Parma, Mich., with being a felon in possession of six different firearms, the Department of Justice, the Treasury Inspector General for Tax Administration (TIGTA) and the Internal Revenue Service (IRS) announced. Herrington is charged with possessing the firearms on May 25, 2011, which was the day of his arrest on two counts of corruptly endeavoring to obstruct the administration of the Internal Revenue laws and five counts of filing false tax forms with the IRS.
According to the superseding indictment, Herrington was previously convicted of a felony offense. On May 25, 2011, when he was arrested on the underlying tax charges, Herrington possessed six different firearms, including five shotguns and a magnum rifle.
According to the superseding indictment, Herrington submitted false forms to the IRS to intimidate and harass state and local government officials and employees. These included Forms 1099-OID falsely reporting that Herrington paid original issue discount, which is taxable as interest, to law enforcement personnel and judges involved in a criminal case against him in Jackson County. In that case, Herrington was charged with being an accessory after the fact for harboring his wife, who was wanted for outstanding arrest warrants.
The superseding indictment also alleges that Herrington sent false Forms 1099-OID to federal attorneys prosecuting a criminal tax case against his wife in the Northern District of Ohio in order to interfere with that case. Among the false tax forms Herrington is accused of filing was an individual income tax return for himself falsely reporting federal tax withheld of more than $8 million.
If convicted, Herrington faces a maximum potential sentence of 31 years in prison, a maximum fine of $1.5 million and forfeiture of the firearms. An indictment is merely an allegation, and Herrington is presumed innocent unless and until proven guilty beyond reasonable doubt in a court of law.
Tax Division Trial Attorneys Kenneth Vert and Jeffrey McLellan are litigating the case for the United States.
Hedge Fund Manager of A&O Entities Convicted in $100 Million Fraud SchemeRead the Press Release
WASHINGTON – Adley H. Abdulwahab, 35, of Houston, was convicted by a federal jury today for his role in a $100 million fraud scheme with more than 800 victims across the United States and Canada.
The conviction was announced today by U.S. Attorney for the Eastern District of Virginia Neil H. MacBride and Assistant Attorney General Lanny A. Breuer of the Criminal Division.
“Today’s quick verdict found Mr. Abdulwahab guilty of a $100 million fraud and stealing the life savings of elderly retirees and hundreds of others who have seen everything they worked years for disappear,” said U.S. Attorney MacBride. “This case, involving victims in dozens of states, clearly demonstrates that a national fraud case can have real implications to everyday people. That is why we created the Virginia Financial and Securities Fraud Task Force last year to go after national cases that impact ordinary citizens on Main Street as well as Wall Street.”
“Mr. Abdulwahab participated in a $100 million fraud scheme, cheating more than 800 victims across the United States and Canada,” said Assistant Attorney General Breuer. “While lying to investors about his education and criminal history, he was off buying fancy cars with their money. Today, a jury let him know that financial crime has consequences, and that investment fraud will not be tolerated.”
On Sept. 7, 2010, a federal grand jury returned an 18-count indictment against Abdulwahab and two other principals of A&O Resource Management Ltd. and various related entities that acquired and marketed life settlements to investors. Today, Abdulwahab was convicted on all counts, including: one count of conspiracy to commit mail fraud, five counts of mail fraud, one count of conspiracy to commit money laundering, five counts of money laundering and three counts of securities fraud. The Court will set the sentencing at a later date. At sentencing, Abdulwahab faces up to 20 years in prison on each count except the securities fraud counts, on which he faces up to five years in prison.
Abdulwahab’s co-defendant, Christian Allmendinger, 39, was convicted by a jury on March 23, 2011. Allmendinger will be sentenced on Aug. 14, 2011. Evidence at Abdulwahab’s trial established that during his involvement with the company, A&O obtained approximately $100 million from approximately 800 investors, many of whom were elderly.
According to court records and evidence at trial, Abdulwahab was part owner of A&O and was active in the day-to-day management of the companies, as well as in the marketing of A&O life settlement investment products to investors. He and others engaged in a scheme to defraud investors by making misrepresentations about such things as A&O’s prior success, its size and office locations, its number of employees, the risks of its investment offerings, and its safekeeping and use of investor funds. Abdulwahab also lied to investors about having a college degree in Economics, as well as failing to disclose to investors that he previously pleaded guilty to a felony forgery of a commercial instrument in a state court in Texas. Evidence at trial showed that Abdulwahab routinely used investor funds for personal enrichment, including a lavish home, a Ferrari and a BMW.
When state regulators began to scrutinize A&O’s investment products, Abdulwahab and others manufactured a sham sales transaction to “sell” A&O to a shell corporate entity named Blue Dymond and later to another shell corporate entity named Physician’s Trust. However, A&O and Physician’s Trust was still secretly controlled by Abdulwahab and his co-conspirators.
Five individuals have pleaded guilty in connection with the A&O fraud scheme: David White, the former President of A&O; Brent Oncale, former vice president of A&O; Russell E. Mackert, an attorney for A&O; Eric M. Kurz, a wholesaler of A&O investment products; and Tomme Bromseth, an A&O sales agent in the Richmond area.
This investigation was conducted by the U.S. Postal Inspection Service, Internal Revenue Service, and FBI, with significant assistance from the Texas State Securities Board and the Virginia Corporation Commission. These cases are being prosecuted by Assistant U.S. Attorneys Michael S. Dry and Jessica Aber Brumberg from the Eastern District of Virginia and Trial Attorney Albert B. Stieglitz Jr., of the Criminal Division’s Fraud Section.
The investigation has been coordinated by the Virginia Financial and Securities Fraud Task Force, an unprecedented partnership between criminal investigators and civil regulators to investigate and prosecute complex financial fraud cases in the nation and in Virginia. The task force is an investigative arm of the President’s Financial Fraud Enforcement Task Force, an interagency national task force.
President Obama established the Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.
Former Treasurer and President of Taylor, Bean & Whitaker<br /> Each Sentenced to Prison for Fraud SchemeRead the Press Release
WASHINGTON – The former treasurer and the former president of Taylor, Bean & Whitaker (TBW) were sentenced today to 72 months in prison and 30 months in prison, respectively, for their roles in a more than $2.9 billion fraud scheme that contributed to the failures of TBW and Colonial Bank. TBW was one of the largest privately-held mortgage lending companies in the United States in 2009.
Desiree Brown, the former treasurer of TBW, and Raymond Bowman, the former president of TBW, were each sentenced today by U.S. District Judge Leonie M. Brinkema in the Eastern District of Virginia. The sentences were 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, Acting 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).
Brown, 45, of Hernando, Fla., pleaded guilty in February 2011 to one count of conspiracy to commit bank, wire and securities fraud. Bowman, 45, of Braselton, Ga., pleaded guilty in March 2011 to one count of conspiracy to commit bank, wire and securities fraud and one count of making false statements to federal agents. Both admitted to conspiring with Lee Bentley Farkas, the former chairman of TBW, and others, to fraudulently obtain funding for TBW to cover expenses related to operations and servicing payments owed to third-party purchasers of loans and/or mortgage-backed securities.
Farkas was convicted on April 19, 2011, on 14 counts of fraud for his role in masterminding the scheme, which was one of the largest bank frauds in the country. Farkas is scheduled to be sentenced on June 27, 2011. The Securities and Exchange Commission (SEC) has a civil action pending against Farkas in the Eastern District of Virginia.
Co-conspirators Paul Allen, the former chief executive officer of TBW; Catherine Kissick, a former senior vice president of Colonial Bank and head of its Mortgage Warehouse Lending Division (MWLD); Teresa Kelly, a former operations supervisor for Colonial Bank’s MWLD; and Sean Ragland, a former senior financial analyst at TBW, have also pleaded guilty for their participation in the scheme.
“Raymond Bowman and Desiree Brown used their positions as high-level executives at TBW to help Lee Farkas perpetrate a sprawling $2.9 billion fraud,” said Assistant Attorney General Breuer. “Their crimes contributed to the failure of Colonial Bank and the collapse of TBW, harming hundreds of shareholders, investors and employees. Today’s prison sentences reflect the seriousness of their conduct, while also recognizing the substantial assistance they ultimately provided to the government in investigating and prosecuting Mr. Farkas and other co-conspirators.”
“These TBW executives helped pull off one of the largest, longest-running bank fraud schemes in history that led to the collapse of Colonial Bank and TBW,” said U.S. Attorney MacBride. “They knew that without their fraud scheme, TBW would fail. They helped Lee Farkas do what they knew was wrong, and now they will pay for their crimes. At the same time, these defendants agreed to cooperate with the government and that cooperation was clearly taken into account in the sentences imposed today.”
According to court documents and information presented at trial, Bowman and Brown participated in the scheme from 2003 through August 2009. The fraud scheme caused Colonial Bank and Colonial BancGroup to purchase tens of millions of dollars of worthless assets, caused Colonial BancGroup to report false information in its financial statements, and artificially inflated the value of TBW’s mortgage servicing rights.
According to court documents and information presented at trial, TBW began running overdrafts in its master bank account at Colonial Bank because of TBW’s inability to meet its operating expenses, which included payroll, servicing payments owed to third-party purchasers of loans and/or mortgage-backed securities and other obligations. In or about 2002, Farkas, Bowman and other co-conspirators, engaged in a series of fraudulent actions to cover up the overdrafts, first by sweeping overnight money from one TBW account with excess funds into another, and later through the fictitious “sales” of mortgage loans to Colonial Bank, a fraud scheme the conspirators dubbed “Plan B.” Brown joined the conspiracy in late 2003 shortly after Plan B commenced. The conspirators accomplished Plan B by selling Colonial Bank mortgage loans that did not exist or that TBW had already committed or sold to other third-party investors.
As Plan B evolved, co-conspirators at TBW also caused TBW to engage in sham sales of groups of mortgage loans, known as “pools,” to Colonial Bank that other entities already owned. As a result, false information was entered on Colonial Bank’s books and records, giving the appearance that the bank owned interests in legitimate pools of mortgage loans, when in fact the pools had no value and could not be securitized or sold. Additionally, the conspirators, including Brown, caused TBW to misappropriate more than $1.5 billion in collateral from Ocala Funding LLC, a mortgage lending facility owned by TBW. The misappropriation caused Colonial Bank and the Federal Home Loan Mortgage Corporation (Freddie Mac) to falsely believe that they each had an undivided ownership interest in thousands of the same loans worth hundreds of millions of dollars.
According to court documents, the fraud scheme also included an effort by certain conspirators in the fall of 2008 to obtain $570 million in taxpayer funding through the Capital Purchase Program (CPP), a sub-program of the U.S. Treasury Department’s TARP. In connection with the application, Colonial BancGroup submitted financial data and filings that included materially false information related to mortgage loan and securities assets held by Colonial Bank as a result of the fraudulent activity at TBW. Colonial BancGroup never received the TARP funding.
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.
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
Former NSA Senior Executive Pleads Guilty to Unauthorized Access of Government ComputerRead the Press Release
WASHINGTON - Former National Security Agency (NSA) senior executive Thomas A. Drake pleaded guilty today in U.S. District Court in Baltimore to a one-count criminal information charging him with unauthorized access of an NSA computer, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division.
Drake, 54, pleaded guilty before U.S. District Court Judge Richard D. Bennett to the misdemeanor offense of intentionally exceeding the authorized access of a computer. Sentencing is scheduled for July 15, 2011, at 3:00 p.m. EDT.
“Today, Thomas Drake admitted that he illegally accessed classified NSA computer systems to obtain information that he then provided to another person who had no authorization to receive it As today’s guilty plea shows, in cases involving classified information, we must always strike the careful balance between holding accountable those who break our laws, while not disclosing highly-sensitive information that our intelligence agencies conclude would be harmful to our nation’s security if used at trial,” said Assistant Attorney General Breuer. “Individuals who are granted special access to our nation’s most sensitive information cannot unilaterally decide to disregard the law and agreements they make with the government on how that information may be handled.”
According to the statement of facts, Drake worked as an employee of the NSA from August 2001 through April 2008. In connection with his employment, Drake was granted a Top Secret clearance and had access to classified computer systems, such as the NSA’s internal intranet or NSANet. Drake received various security briefings regarding the handling restrictions and requirements involving official NSA information, and knew that the NSA restricted the use of and access to its computers and NSANet for official use only.
According to the statement of facts, from approximately February 2006 through March 2007, Drake intentionally accessed NSANet, obtained NSA information and provided the information to another person not permitted or authorized to receive it.
Also today, in exchange for the defendant’s guilty plea, the government filed a motion to dismiss, at the time of sentencing, the pending indictment against Drake. Drake was charged in an April 2010 indictment with willful retention of classified information, obstruction of justice and false statements.
According to the government’s motion, pre-trial rulings by the court under the Classified Information Procedures Act (CIPA) would have required that highly classified information appear, without substitution, in exhibits made publicly available at trial. The NSA concluded that such disclosure would harm national security. According to the filing, in CIPA litigation, the parties indicate what classified information they reasonably expect to disclose thorough evidence, and the court makes determinations on how and what classified information may be used at trial. The government then must make a determination whether the disclosure of that classified information could harm national security, and accordingly how the prosecution is impacted.
The case is being prosecuted by Senior Litigation Counsel William M. Welch II of the Criminal Division and Trial Attorney John P. Pearson of the Criminal Division’s Public Integrity Section. This case was investigated by the FBI and the NSA Office of Security & Counterintelligence. The National Security Division also provided assistance in this matter.
Danish Pharmaceutical Novo Nordisk to Pay $25 Million<br /> to Resolve Allegations of Off-Label Promotion of NovosevenRead the Press Release
WASHINGTON – Novo Nordisk Inc., a Danish pharmaceutical manufacturer, has agreed to pay $25 million to resolve its civil liability arising from the illegal promotion of its hemostasis management drug, NovoSeven, the Justice Department announced today. The Food and Drug Administration (FDA) approved NovoSeven to treat certain bleeding disorders in hemophiliacs. Once approved by the FDA, a manufacturer may not market or promote a drug for any use not specified in its new drug application and approved by the FDA. Such unapproved uses are also known as “off-label” uses.
The U.S. subsidiary, Novo Nordisk Inc., which is located in Princeton, N.J., promoted NovoSeven to health care professionals for off-label uses, including as a coagulatory agent for trauma patients, general surgery, cardiac surgery, liver surgery, liver transplants and intra-cerebral hemorrhage. As a result of this unlawful promotion, Novo Nordisk caused false claims to be submitted to government health care programs that were not reimbursable by those programs. Medicare and Medicaid paid for off-label prescriptions throughout the United States as a result of Novo’s focused campaign to influence doctors and hospitals. The federal share of the civil settlement is $21,425,790.59, and the state Medicaid share of the civil settlement is $3,574,209.41.
“Pharmaceuticals should be marketed only for uses that the FDA has approved as safe and effective,” said Tony West, Assistant Attorney General for the Civil Division of the Department of Justice. “The off-label promotion alleged here not only wasted taxpayer dollars, but also undermined the FDA’s important role in ensuring that drugs are properly marketed to government agencies and members of the public.”
The settlement resolves a whistleblower lawsuit filed under the qui tam or whistleblower provisions of the False Claims Act that is pending in the District of Maryland: U.S. ex rel. Black and Montiel v. Novo Nordisk, Inc. As part of today’s resolution, the whistleblowers will receive payments totaling more than $3.5 million from the federal share of the civil recovery.
“Federal law prohibits pharmaceutical manufacturers from marketing drugs for unapproved uses, and restricts them from creating a financial incentive for doctors that may conflict with the interests of their patients,” added United States Attorney for the District of Maryland Rod J. Rosenstein. “Drugs should be marketed only for purposes for which they have been deemed safe and effective and prescribed only because they are expected to benefit the patient.”
Also as part of the settlement, Novo Nordisk has agreed to enter into an expansive corporate integrity agreement with the Office of Inspector General of the Department of Health and Human Services. That agreement provides for procedures and reviews to be put in place to avoid and promptly detect conduct similar to that which gave rise to this matter.
“Our separate Novo Nordisk corporate integrity agreement requires company board members to assure their compliance program is effective,” said Daniel R. Levinson, Inspector General of the Department of Health & Human Services. “This should focus high-level attention on preventing future off-label drug promotion. As an added measure, an independent review organization will provide extensive monitoring.”
The civil settlement was reached by the Justice Department’s Civil Division and the U.S. Attorney’s Office for the District of Maryland. The Corporate Integrity Agreement was negotiated by the Office of Inspector General of the Department of Health and Human Services. Investigative support was provided by Department of Defense Criminal Investigative Services, U.S. Army Criminal Investigation Command, Major Procurement Fraud Unit and the Office of Inspector General of the Department of Health and Human Services. Assistance also was provided by the National Association of Medicaid Fraud Control Units and offices of various state Attorneys General.
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 the Department of Health and Human Services in May 2009. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover more than $5.7 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 over $7.3 billion.
Thursday 9 June 2011
U.S. Subsidiary of Belgian Pharmaceutical Manufacturer Pleads Guilty to Off-Label Promotion; Company to Pay More Than $34 MillionRead the Press Release
WASHINGTON – The U.S. subsidiary of Belgian pharmaceutical manufacturer UCB SA. pleaded guilty today to the off-label promotion of its epilepsy drug Keppra and will pay more than $34 million to resolve criminal and civil liability arising out of its illegal conduct, the Justice Department announced today.
Under the terms of the plea agreement before the U.S. Court for the District of Columbia, UCB Inc., which has its headquarters in Smyrna, Ga., pleaded guilty to a misdemeanor in connection with the company’s misbranding of Keppra, in violation of the Food, Drug and Cosmetic Act. Keppra was approved by the Food and Drug Administration (FDA) as an anti-epileptic drug, for the treatment of seizures in adults and children suffering from epilepsy. Keppra is not approved for the treatment of migraine, headache, psychiatric conditions or pain conditions. Once approved by the FDA, a manufacturer may not market or promote a drug for any use not specified in the FDA-approved product label. These uses are also known as unapproved or “off-label” uses.
The government alleged that UCB promoted the sale of Keppra for off-label use in the treatment of migraine by generating and disseminating posters representing that Keppra was safe and effective for treating migraine based on purportedly independent investigator-initiated studies. The posters did not disclose UCB’s sponsorship of these studies or that UCB’s own clinical trial had failed to demonstrate that Keppra was effective in treating migraine. UCB will pay a $7.55 million criminal fine for the misbranding of Keppra and an asset forfeiture of $1.078 million.
In addition, UCB will pay $25.7 million to resolve civil allegations under the False Claims Act that the company illegally promoted Keppra and caused false claims to be submitted to government healthcare programs for a variety of off-label uses that were not medically accepted indications and therefore not covered by those programs, including headache, migraine, pain, bipolar, mood disorders and anxiety. The federal share of the civil settlement is $15,871,208, and the state Medicaid share of the civil settlement is $9,893,322.
“Patients have a right to know that the drugs they are prescribed have been approved by the FDA as safe and effective for a particular use,” said Tony West, Assistant Attorney General for the Civil Division of the Department of Justice. “Off-label promotion of pharmaceuticals undermines the FDA’s important role in protecting the public and is a drain on taxpayer dollars.”
“UCB put its pursuit of profits ahead of its obligations to patients,” said Ronald C. Machen Jr., U.S. Attorney for the District of Columbia. “Today’s guilty plea and UCB’s $34 million payout should remind drug companies that try to cleverly design off-label marketing schemes that we will not allow them to compromise patient safety.”
“This settlement demonstrates the ongoing efforts to pursue violations of the False Claims Act and recover taxpayer dollars for Medicaid and other federal health care programs,” noted Dwight C. Holton, U.S. Attorney for the District of Oregon. “Our office will continue to work with whistleblowers and law enforcement to stop health care fraud.”
The civil settlement resolves two whistleblower lawsuits filed under the qui tam, or whistleblower, provisions of the False Claims Act that are pending in Washington, D.C., and Oregon: United States ex rel. Root v. UCB, Civil Action No. 1:07-cv-1056, and United States ex rel. Maly v. UCB, Inc., Civil Action No. 1:08–cv-1161. As part of today’s resolution, the whistleblowers will receive payments totaling more than $2.8 million from the federal share of the civil recovery.
Also as part of the resolution accepted by the court, UCB has entered into an expansive corporate integrity agreement (CIA) with the Office of Inspector General of the Department of Health and Human Services. That agreement provides for procedures and reviews to be put in place to avoid and promptly detect conduct similar to that which gave rise to this matter.
“Patients have a right to be prescribed drugs based on sound medical judgment - not on drug company payoffs or off-label promotions,” said Daniel R. Levinson, Inspector General of the Department of Health & Human Services. “Taxpayers shouldn't have to pay for unlawful conduct.”
“Today’s guilty plea and settlement is evidence of the government’s continued commitment to hold pharmaceutical companies accountable when they undermine the drug approval process by promoting drugs for uses not approved by the FDA as safe and effective," said Acting Director Kathleen Martin-Weis of FDA’s Office of Criminal Investigations. “We will continue to join forces with the Department of Justice and our law enforcement counterparts to seek this kind of criminal resolution when pharmaceutical companies put profits ahead of the public health and safety.”
The criminal case was handled by the U.S. Attorney’s Office for the District of Columbia and the Justice Department’s Office of Consumer Protection Litigation. The civil settlement was reached by the U.S. Attorney’s Offices for the District of Columbia and the District of Oregon and the Commercial Litigation Branch of the Justice Department’s Civil Division. The CIA was negotiated by the Office of Inspector General of the Department of Health and Human Services. The investigation was conducted by the Department of Veterans Affairs Office of Inspector General, the FBI’s Washington Field Office and FDA Office of Criminal Investigations. Assistance was provided by the National Association of Medicaid Fraud Control Units and the offices of various state Attorneys General.
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 the Department of Health and Human Services in May 2009. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover more than $5.7 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.
Tyler, Texas, Tax Preparer Sentenced for Filing False Tax ReturnsRead the Press Release
WASHINGTON -- Charles Hollie, a resident of Tyler, Texas, was sentenced by U.S. District Judge Michael H. Schneider to 24 months in prison for filing false tax returns, the Justice Department and Internal Revenue Service (IRS) announced today. Judge Schneider also ordered Charles Hollie to pay $84,668 in restitution to the IRS and to serve one year of supervised release. Hollie was indicted for aiding and assisting in the preparation of false tax returns on April 7, 2010, and subsequently pleaded guilty to aiding and assisting in the preparation of false tax returns on November 9, 2010.
According to the indictment, plea agreement and other court documents, between 2004 and 2007, Hollie worked as an independent contractor at the Tyler and Athens offices of Preferred Choice Income Tax, holding himself out to the public as a Tax Consultant and expert in preparing individual income tax returns. Hollie prepared more than 1,300 returns that claimed fictitious itemized deductions, home businesses, Earned Income Credits and–in the case of each return for the 2006 tax year–inflated telephone excise tax refund (TETR) credits, a one-time credit available to taxpayers to refund excise taxes paid on long distance and bundled service for the 41-month period from February 2003 to August 2006.
John A. DiCicco, Principal Deputy Assistant Attorney General of the Justice Department’s Tax Division and John M. Bales, U.S. Attorney for the Eastern District of Texas commended the IRS Criminal Investigation special agents who investigated the case as well as Tax Division Trial Attorney Pete Madriñan and Assistant U.S. Attorney Gregg Marchessault, who prosecuted the case.
Additional information about the Justice Department’s Tax Division and its enforcement efforts can be found at www.usdoj.gov/tax .
Tahawwur Rana Guilty of Providing Material Support to Terror Group and Playing Supporting Role in Denmark Terror ConspiracyRead the Press Release
CHICAGO — A Pakistani native who operated a Chicago-based immigration business was convicted today of participating in a conspiracy involving a terrorism plot against a Danish newspaper and providing material support to a terrorist organization based in Pakistan. The defendant, Tahawwur Hussain Rana, was found guilty by a federal jury that deliberated two days following a trial that began May 16, 2011, in U.S. District Court. The jury acquitted Rana of conspiracy to provide material support to the November 2008 terrorist attacks in Mumbai, India, that killed more than 160 people, including six Americans.
Rana, 50, a Canadian citizen, was convicted of one count of conspiracy to provide material support to the terrorism plot in Denmark and one count of providing material support to a designated foreign terrorist organization, Lashkar e Tayyiba (Lashkar.) He faces a maximum sentence of 30 years in prison on the two counts combined and remains in federal custody without bond. U.S. District Judge Harry Leinenweber ordered the defense to file post-trial motions by Aug. 15. 2011. No sentencing date was set.
“Today’s verdict demonstrates our commitment to hold accountable not only terrorist operatives, but also those who facilitate their activities. As established at trial, Tahawwur Rana provided valuable cover and support to David Headley, knowing that Headley and others were plotting terror attacks overseas,” said Todd Hinnen, Acting Assistant Attorney General for National Security. “We will not rest in our efforts to identify and bring to justice those who provide support to terrorists.”
“The message should be clear to all those who help terrorists — we will bring to justice all those who seek to facilitate violence,” said Patrick J. Fitzgerald, U.S. Attorney for the Northern District of Illinois.
“The effort to combat terrorism and bring justice to the victims is a global effort, requiring the cooperation and collaboration of many countries and many people. We are grateful for our role and that of the Chicago Joint Terrorism Task Force in bringing some measure of justice,” said Robert D. Grant, Special Agent-in-Charge of the Chicago Office of the FBI.
Rana is the second defendant to be convicted among a total of eight co-defendants who have been indicted in this case since late 2009. Co-defendant David Coleman Headley, 50, pleaded guilty in March 2010 to all 12 counts against him, including aiding and abetting the murders of the six American victims. Headley, who is facing a maximum sentence of life in prison, has cooperated with the government since he was arrested in October 2009, and testified as a government witness at Rana’s trial.
The six remaining defendants are all believed to be in Pakistan.
Headley testified that he attended training camps in Pakistan operated by Lashkar, a designated foreign terrorist organization, on five separate occasions between 2002 and 2005. In late 2005, Headley received instructions from members of Lashkar to travel to India to conduct surveillance, which he did five times leading up to the Mumbai attacks three years later that killed more than 160 people and wounded hundreds more.
In the early summer of 2006, Headley and two Lashkar members discussed opening an immigration office in Mumbai as a cover for his surveillance activities. Headley testified that he traveled to Chicago and advised Rana, his long-time friend since the time they attended high school together in Pakistan, of his assignment to scout potential targets in India. Headley obtained approval from Rana, who owned First World Immigration Services in Chicago and elsewhere, to open a First World office in Mumbai as cover for his activities. Rana directed an individual associated with First World to prepare documents supporting Headley’s cover story of opening a First World office in Mumbai, and advised Headley how to obtain a visa for travel to India, according to Headley’s testimony, as well as emails and other documents that corroborated his account.
Starting Nov. 26, 2008, and continuing through Nov. 28, 2008, 10 attackers trained by Lashkar carried out multiple assaults with firearms, grenades and improvised explosive devices against multiple targets in Mumbai, including the Taj Mahal and Oberoi hotels, the Leopold Café, the Chabad House and the Chhatrapati Shivaji Terminus train station, each of which Headley had scouted in advance. The six Americans killed during the three-day siege were Ben Zion Chroman, Gavriel Holtzberg, Sandeep Jeswani, Alan Scherr, his daughter Naomi Scherr and Aryeh Leibish Teitelbaum.
Regarding the Denmark terror plot, Headley admitted that in early November 2008, he met with a Lashkar member in Karachi, Pakistan, and was instructed to conduct surveillance of the Copenhagen and Aarhus, Denmark, offices of the Danish newspaper Morgenavisen Jyllands-Posten in preparation for an attack in retaliation for the newspaper’s publication of cartoons depicting the Prophet Mohammed.
In late 2008 and early 2009, after reviewing with Rana how he had performed surveillance of the targets attacked in Mumbai, Headley testified that he advised Rana of the planned attack on the Danish newspaper and his intended travel to Denmark to conduct surveillance of its facilities. Headley obtained Rana’s approval and assistance to identify himself as a representative of First World and gain access to the newspaper’s offices by falsely expressing interest in placing advertising for First World in the newspaper. Before departing Chicago, Headley and Rana caused business cards to be made that identified Headley as a representative of the Immigration Law Center, the business name of First World, according to the evidence at trial.
The government’s evidence also included transcripts of recorded conversations, including those in September 2009, when Headley and Rana spoke about reports that co-defendant Ilyas Kashmiri, an alleged Pakistani terrorist leader, had been killed in a drone attack and the implications of his possible death for the plan to attack the newspaper. In other conversations, Rana told Headley that the attackers involved in the Mumbai attacks should receive Pakistan’s highest posthumous military honors. In the late summer of 2009, Rana and Headley agreed that funds that had been provided to Rana could be used to fund Headley’s work in Denmark, and the trial evidence showed that Rana, pretended to be Headley in sending an email to the Danish newspaper.
The government is being represented by Assistant U.S. Attorneys Daniel Collins, Victoria J. Peters and Sarah Streicker, with assistance from the Counterterrorism Section of the Justice Department’s National Security Division. Federal prosecutors in Los Angeles are working jointly with their counterparts in Chicago on the broader investigation into the Mumbai attacks. The investigation has been conducted by the Chicago Joint Terrorism Task Force, led by the Chicago Office of the FBI, with assistance from the FBI offices in Los Angeles and Washington, D.C., as well as both U.S. Customs and Border Protection and the U.S. Immigration and Customs Enforcement (ICE) Office of Homeland Security Investigations.
Owner of Illinois Technology Company Sentenced to Serve 12 Months and a Day in Prison for Role in Conspiracy to Defraud the Federal E-Rate ProgramRead the Press Release
WASHINGTON - An owner of an Illinois-based technology company was sentenced today to serve one year and a day in prison for his participation in a conspiracy to defraud the federal E-Rate program, the Department of Justice announced.
Barrett C. White was also sentenced by U.S. District Court Judge Eldon Fallon to pay a $4,000 criminal fine for conspiring to defraud the E-Rate program by providing bribes and kickbacks to school officials in multiple states. White was charged with the conspiracy in U.S. District Court in New Orleans on Nov. 18, 2010, and he pleaded guilty on March 3, 2011.
As a result of the Antitrust Division’s investigation into fraud and anticompetitive conduct in the E-Rate program, including today’s sentencing, a total of seven companies and 24 individuals have pleaded guilty, been convicted at trial or entered civil settlements. Those companies and individuals have been sentenced to pay criminal fines and restitution totaling more than $40 million. Sixteen individuals, including White, have been sentenced to serve prison time.
According to court documents, White participated in the conspiracy beginning on or about February 2004 through August 2005. The department said that White offered and delivered bribes and kickbacks to school officials responsible for the procurement of Internet access services. In return for those payments, E-Rate contracts were awarded to his co-conspirators’ companies. White’s co-conspirators, Gloria Harper and Tyrone Pipkin, have also pleaded guilty to the conspiracy in separate charges and await sentencing.
The E-Rate program was created by Congress in the Telecommunications Act of 1996 and is administered by the Universal Service Administrative Company, under the oversight of the Federal Communications Commission (FCC). The program provides subsidies to economically disadvantaged schools and libraries. Depending on the financial needs of the applicant schools, the program pays 20 to 90 percent of the cost for Internet access and telecommunications services, as well as internal computer and communications networks.
Today’s sentencing resulted from an investigation by the Department of Justice Antitrust Division’s Dallas Field Office, the FBI’s Dallas Field Office and the FCC’s Office of Inspector General, with assistance from the U.S. Attorney’s Office for the Eastern District of Louisiana. Anyone with information concerning violations of the E-Rate program is urged to call the Antitrust Division’s Dallas Field Office at 214-661-8600 or visit www.justice.gov/atr/contact/newcase.htm.
Justice Department Reaches Agreement with City of Bedford, Virginia, on Bailout Under the Voting Rights ActRead the Press Release
WASHINGTON – The Justice Department has reached an agreement with the city of Bedford, Va., that, if approved by the court, will allow for the city’s bailout from its status as a “covered jurisdiction” under the special provisions of Voting Rights Act, and thereby exempt the city from the preclearance requirements of Section 5 of the act. The agreement is in the form of a consent decree filed yesterday in the U.S. District Court for the District of Columbia.
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 in Washington, D.C., or from the U.S. Attorney General, prior to their implementation. Section 4 of the act provides that a covered jurisdiction may seek to “bailout,” 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 in Washington, D.C. Such a bailout judgment can only be issued 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 if, based upon investigation, the attorney general is satisfied that the jurisdiction meets the eligibility requirements.
The city of Bedford, Va., filed its bailout action in U.S. District Court in Washington, D.C. on March 4, 2011. City officials had contacted the attorney general prior to filing its action, indicating that the city was interested in seeking bailout. The city provided the Justice Department with substantial information, and the department conducted an investigation to determine the city’s eligibility. Based on that investigation, the department is satisfied that the city meets the Voting Rights Act’s requirements for bailout.
“In this case, the department carefully evaluated the information the city provided to us and conducted our own investigation, which has satisfied the department that the city is eligible for a bailout,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “I appreciate the cooperation of city officials in providing the department with substantial information, and 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, will grant the city’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 city that would have originally precluded the city 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.
Justice Department Reaches Agreement with California Irrigation District on Bailout from the Voting Rights ActRead the Press Release
WASHINGTON – The Justice Department announced that it has reached an agreement with Alta Irrigation District, a special district in California, that, if approved by the court, will allow for the district to bail out from its status as a “covered jurisdiction” under the special provisions of the Voting Rights Act, and thereby exempt the district from the preclearance requirements of Section 5 of the Voting Rights Act. The district covers part of several counties, including part of Kings County, which is a jurisdiction subject to Section 5. If granted, this would be the first such bailout for a covered jurisdiction in California. The agreement is in the form of a consent decree filed today in the U.S. District Court for the District of Columbia.
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.
Alta Irrigation District filed its bailout action in the U.S. District Court for the District of Columbia on April 20, 2011. District officials had contacted the attorney general prior to filing its action, indicating that the district was interested in seeking a bailout. The district provided the Justice Department with substantial information, and the department conducted an investigation to determine the district’s eligibility. Based on that investigation, the department is satisfied that the district meets the Voting Rights Act’s requirements for bailout.
“In this case, the department carefully evaluated the information provided by the district, and conducted its own investigation, which has satisfied us that the district is eligible for a bailout,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “I appreciate the cooperation of district officials in providing the department with information that we have 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, will grant the district’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 district that would have originally precluded the district 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.
Justice Department Files for Receivership in Virgin Islands Prison Conditions CaseRead the Press Release
WASHINGTON - The Justice Department today filed a motion for appointment of a receiver in the U.S. District Court, St. Croix, USVI, to remedy 25 years of non-compliance with court orders by the Virgin Islands Bureau of Corrections (BOC) regarding unconstitutional conditions of confinement at the Golden Grove Adult Correctional and Detention Facility. The United States brought the original complaint under the Civil Rights of Institutionalized Persons Act (CRIPA).
The department is unaware of any other instance where the Civil Rights Division has sought receivership of a correctional facility.
Despite ongoing efforts by a special master appointed in 2006 by the court to remedy contempt findings, violence at the prison has escalated over the past several months, including multiple stabbings. Alarming amounts of contraband continue to enter in the prison, including weapons, drugs, street clothing and electronics.
The receiver sought by the United States would address numerous ongoing deficiencies, including the BOC’s failure to: maintain adequate staffing, write and train staff on policies and procedures, appropriately classify and separate violent prisoners, systematically prevent and detect contraband, provide adequate medical and mental health care, and provide humane living conditions.
“The deplorable conditions at Golden Grove continue to deteriorate after years of non-compliance with court orders,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “While it is always our preference to work with agencies to make necessary changes, this agency has left us with no choice but to seek the drastic measure of receivership.”
“Receivership is the last resort. We arrive at this juncture only after spending the last 25 years exhausting every other viable alternative,” said Ronald W. Sharpe, U.S. Attorney for the District of the Virgin Islands. “We cannot continue to allow prisoners to live in unsafe, filthy and hazardous conditions without constitutionally required medical and mental health care.”
Civil Rights Division Special Litigation Section Special Counsel Laura Coon and Trial Attorneys Andrew Barrick and Emily Gunston and Virgin Islands Assistant U.S. Attorney Angela Tyson-Floyd lead the department’s enforcement of this civil matter.
Former Detective and Tax Preparer Convicted of Tax Fraud in FloridaRead the Press Release
WASHINGTON – Inuka Rhaheed, owner of First Premium Financial Services and a former detective with the Fort Pierce, Fla., Police Department, and Wilens Bertrand, a tax preparer at First Premium, on charges of conspiracy to defraud the United States. The jury also found Rhaheed guilty of two counts, and Bertrand guilty of one count, of preparing false tax returns
Today’s convictions were announced by Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida; John A. DiCicco, Principal Deputy Assistant Attorney General of the Justice Department’s Tax Division; and Rhonda A. Diffenbach, Acting Special Agent in Charge, Internal Revenue Service – Criminal Investigation (IRS-CI).
Rhaheed’s wife and business partner, Jacqueline Rhaheed, pleaded guilty to one count of conspiring to defraud the United States on June 2, 2011.
According to evidence introduced at trial, Inuka and Jacqueline Rhaheed owned and worked at First Premium Financial Services, a tax preparation business with offices in Fort Pierce and Vero Beach, Fla. Wilens Bertrand worked at the Ft. Pierce office of First Premium Financial Services as a tax preparer.
According to the testimony of some of First Premium’s clients, the defendants placed false deductions on client tax returns without the clients’ knowledge or consent. In addition, evidence revealed that First Premium prepared and filed approximately 5,500 tax returns for the 2006-2008 tax years and that approximately 98 percent of those returns made a claim for a tax refund. The resulting total tax loss to the United States, based on expert testimony at trial, was at least $500,000.
According to evidence presented during the trial, clients paid a minimum fee of $300 for tax preparation services at First Premium. Clients included many law enforcement officers, who went to First Premium because they knew Rhaheed was a former law enforcement officer and trusted him and his business to prepare their taxes. In addition, other clients testified that they went to First Premium because of they had heard through word of mouth that First Premium allowed deductions that other tax preparation services would not consider.
Sentencing for all three defendants is scheduled for Sept. 8, 2011 in Fort Pierce. At sentencing, Inuka Rhaheed faces a maximum sentence of 11 years in prison; Wilens Bertrand faces a maximum sentence of eight years in prison; and Jacqueline Rhaheed faces a maximum sentence of five years in prison.
U.S. Attorney Wifredo A. Ferrer and Principal Deputy Assistant Attorney General John A. DiCicco of the Justice Department’s Tax Division commended the investigative efforts of the IRS-CI for their work investigating this case. The case is being prosecuted by Justin Gelfand, Trial Attorney with the U.S. Department of Justice’s Tax Division and Assistant U.S. Attorney Diana M. Acosta of the Southern District of Florida.
Foreign National Pleads Guilty for Role in International Money Laundering Scheme Involving $1.4 Million in Losses to VictimsRead the Press Release
WASHINGTON – A Romanian national pleaded guilty today in U.S. District Court in the District of Columbia for leading a money laundering network for a transnational criminal group based in Eastern Europe, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division. According to court documents, in less than one year, the criminal conspiracy netted approximately $1.4 million from U.S. victims.
Roman Teodor, 36, a resident of Romania, pleaded guilty before U.S. District Court Judge Paul L. Friedman to conspiracy to commit money laundering. Teodor voluntarily surrendered to U.S. authorities on April 10, 2011. At sentencing, scheduled for Aug. 29, 2011, Teodor faces a maximum of 20 years in prison.
According to court documents, Teodor participated in a scheme that operated from July 2005 through November 2006, and involved the posting of fraudulent advertisements on eBay and other websites offering expensive vehicles and boats for sale that the conspirators did not possess. When the U.S. victims expressed interest in the merchandise, they were contacted directly by an email from a purported seller. According to court documents, the victims were then instructed to wire transfer payments through “eBay Secure Traders” — an entity which has no actual affiliation to eBay, but was used as a ruse to persuade the victims that they were sending money into a secure escrow account pending delivery and inspection of their purchases. Instead, the victims’ funds were wired directly into bank accounts in Hungary, Slovakia, the Czech Republic and Poland that were controlled by Teodor’s co-conspirators.
Teodor was originally charged on Jan. 9, 2008, along with five additional defendants: Georgi Vasilev Pletnyov, Ivaylo Vasilev Pletnyov, Nikolay Georgiev Minchev, Georgi Boychev Georgiev and Antoaneta Angelova Getova. On Dec. 2, 2009, Ivaylo Vasilev Pletnyov and Nikolay Georgiev Minchev were sentenced to 48 months and 30 months in prison, respectively, for their roles in the money laundering conspiracy. On Oct. 8, 2010, Georgi Boychev Georgiev was sentenced to 15 months in prison for his role in this scheme. On April 11, 2011, Georgi Vasilev Pletnyov pleaded guilty to one count of conspiracy to commit wire fraud and one count of conspiracy to commit money laundering. His sentencing is scheduled for Aug. 22, 2011. The United States continues to work with foreign counterparts in Bulgaria regarding Antoaneta Angelova Getova.
This investigation was conducted by the FBI – Hungarian National Bureau of Investigation Organized Crime Task Force located in Budapest, Hungary (Budapest Task Force). The Budapest Task Force was established by the FBI in April 2000 to address the increasing threat of Eurasian organized crime groups to the United States.
The case is being prosecuted by Trial Attorney Lisa Page of the Criminal Division’s Organized Crime and Gang Section. The Criminal Division’s Office of International Affairs provided significant assistance on this case.
Federal Agencies Announce National Initiative to Combat Immigration Services ScamsRead the Press Release
WASHINGTON – The U.S. government unveiled today a multi-agency, nationwide initiative to combat immigration services scams . The Departments of Justice and Homeland Security (DHS), and the Federal Trade Commission (FTC) are leading this historic effort.
This initiative targets immigration scams involving the unauthorized practice of immigration law (UPIL), which occurs when legal advice and/or representation regarding immigration matters is provided by an individual who is not an attorney or accredited representative.
“ We are dedicated to protecting vulnerable immigrants from those who seek to exploit them,” said U.S. Citizenship and Immigration Services (USCIS) Director Alejandro Mayorkas. “Through our sustained outreach, enforcement and education efforts, and our close collaboration with our federal, state and local partners, we will provide the communities we serve with the help needed to combat this pernicious problem.”
This initiative is set upon three pillars—enforcement, education and continued collaboration—designed to stop UPIL scams and prosecute those who are responsible; educate immigrants about these scams and how to avoid them; and inform immigrants about the legal immigration process and where to find legitimate legal advice and representation.
“This coordinated initiative targets those who prey on immigrant communities by making promises they do not keep and charging for services they are not qualified to provide,” said Tony West, Assistant Attorney General for the Civil Division of the Department of Justice. “We are attacking this problem both through aggressive civil and criminal enforcement and by connecting qualified lawyers with victims who are trying to navigate a complicated immigration system.”
The Department of Justice, through U.S. Attorneys’ Offices and the Civil Division’s Office of Consumer Protection Litigation, is investigating and prosecuting dozens of cases against so-called “notarios.” In the last year, the department has worked with investigators at the FBI, U.S. Immigration and Customs Enforcement (ICE) and USCIS, and with state and local partners, to secure convictions—with sentences up to eight years in prison and forfeiture and restitution of more than $1.8 million. This is in addition to the many actions at the state and local levels that have been filed against individuals and businesses engaged in immigration services scams.
ICE has also long been pursuing immigration services fraud cases in part through its 18 Document and Benefit Fraud Task Force offices across the country. In a recent case in West Palm Beach, Fla., ICE Homeland Security Investigations agents arrested an individual on May 26, 2011, who had posed as an attorney and processed more than 3,000 fraudulent immigration applications.
“Notarios and other illegal immigration service providers take advantage of unsuspecting immigrants trying to navigate the immigration system,” said ICE Director John Morton. “ICE will continue to work with our federal, state and local partners to combat notario fraud and protect the integrity of the legal immigration system.”
Meanwhile, FTC has made it easier for consumers to alert law enforcement about these scams by creating a new Immigration Services code in the Consumer Sentinel Network, its online consumer complaint database. “This is a central location for consumers to report complaints and for our law enforcement partners to find and share information about scams,” said FTC Commissioner Edith Ramírez.
Sentinel, as the network is called, is a secure online database that holds more than 6 million consumer fraud complaints. Shared with more than 2,000 law enforcement entities including ICE, the Department of Justice and now USCIS, it has become the primary repository for complaints involving allegations of immigration services scams. Sentinel will serve as an investigative tool for USCIS Fraud Detection and National Security officers, and will bolster communication between organizations on immigration services scam-related cases.
The initiative’s education component will focus on empowering immigrant communities to avoid unscrupulous individuals and businesses engaged in UPIL. USCIS’s efforts will be primarily aimed at providing immigrants with the information they need to make informed choices when seeking legal advice and representation on immigration matters, and reminding them that The Wrong Help Can Hurt.
Today, USCIS unveiled a new brochure, a poster, public service announcements for use on radio and in print publications, billboard and transit ads, and a new Web resource center that includes a video. All printed materials are available in English and Spanish, and materials in 12 additional languages are available online. To bolster this outreach effort, the Department of Justice’s Executive Office for Immigration Review (EOIR) and FTC will produce and distribute educational materials for different populations that may be affected by immigration services scams.
As part of the initiative’s emphasis on providing qualified legal assistance to this vulnerable population, EOIR’s Recognition and Accreditation program, the Justice Department, USCIS and FTC are working together to increase the number of EOIR-recognized organizations and accredited representatives, particularly in underserved areas. O rganizations and representatives seeking to provide lawful immigration services must be recognized by EOIR
“EOIR is hard at work to increase access for our government partners, nonprofit organizations, and individuals in immigration proceedings,” said EOIR Director Juan P. Osuna. “Through a combination of efforts, including reporting fraud, educating the public and dedicated outreach, we are bolstering our efforts toward growing a force of legitimate legal services providers and getting rid of fraudsters.”
EOIR is improving its Recognition and Accreditation Program by increasing communication with the public, providing easier application processing, and giving timely, accurate information to the public regarding which organizations have representatives available to represent individuals in proceedings.
The department’s Civil Division and Access to Justice Initiative are involved in an effort to train more attorneys to handle the cases of immigration fraud victims. As a result of these efforts, the department announcedthat nongovernmental organizations, working with local partners, will organize a pro bono legal clinic in Baltimore later this summer to assist victims of an enforcement action announced by the FTC today. Driven by a continuing dialogue with the department, the New York City Bar Association, the New York State Bar Association, the New York Office of the Attorney General and nongovernmental organizations, a legal training program will be launched this summer in New York City to expand the pool of lawyers who can assist in immigration matters.
For more information about USCIS’s education initiative, please visit www.uscis.gov/avoidscams or follow us on Twitter, YouTube and the USCIS blog, The Beacon.
A list of federal, state and local immigration services cases and additional information regarding EOIR’s Recognition and Accreditation Program are available on the Department of Justice’s website.
To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). Like the FTC on Facebook and follow them on Twitter.
Federal Agencies Announce National Initiative to Combat Immigration Services ScamsRead the Press Release
WASHINGTON – The U.S. government unveiled today a multi-agency, nationwide initiative to combat immigration services scams . The Departments of Justice and Homeland Security (DHS), and the Federal Trade Commission (FTC) are leading this historic effort.
This initiative targets immigration scams involving the unauthorized practice of immigration law (UPIL), which occurs when legal advice and/or representation regarding immigration matters is provided by an individual who is not an attorney or accredited representative.
“ We are dedicated to protecting vulnerable immigrants from those who seek to exploit them,” said U.S. Citizenship and Immigration Services (USCIS) Director Alejandro Mayorkas. “Through our sustained outreach, enforcement and education efforts, and our close collaboration with our federal, state and local partners, we will provide the communities we serve with the help needed to combat this pernicious problem.”
This initiative is set upon three pillars—enforcement, education and continued collaboration—designed to stop UPIL scams and prosecute those who are responsible; educate immigrants about these scams and how to avoid them; and inform immigrants about the legal immigration process and where to find legitimate legal advice and representation.
“This coordinated initiative targets those who prey on immigrant communities by making promises they do not keep and charging for services they are not qualified to provide,” said Tony West, Assistant Attorney General for the Civil Division of the Department of Justice. “We are attacking this problem both through aggressive civil and criminal enforcement and by connecting qualified lawyers with victims who are trying to navigate a complicated immigration system.”
The Department of Justice, through U.S. Attorneys’ Offices and the Civil Division’s Office of Consumer Protection Litigation, is investigating and prosecuting dozens of cases against so-called “notarios.” In the last year, the department has worked with investigators at the FBI, U.S. Immigration and Customs Enforcement (ICE) and USCIS, and with state and local partners, to secure convictions—with sentences up to eight years in prison and forfeiture and restitution of more than $1.8 million. This is in addition to the many actions at the state and local levels that have been filed against individuals and businesses engaged in immigration services scams.
ICE has also long been pursuing immigration services fraud cases in part through its 18 Document and Benefit Fraud Task Force offices across the country. In a recent case in West Palm Beach, Fla., ICE Homeland Security Investigations agents arrested an individual on May 26, 2011, who had posed as an attorney and processed more than 3,000 fraudulent immigration applications.
“Notarios and other illegal immigration service providers take advantage of unsuspecting immigrants trying to navigate the immigration system,” said ICE Director John Morton. “ICE will continue to work with our federal, state and local partners to combat notario fraud and protect the integrity of the legal immigration system.”
Meanwhile, FTC has made it easier for consumers to alert law enforcement about these scams by creating a new Immigration Services code in the Consumer Sentinel Network, its online consumer complaint database. “This is a central location for consumers to report complaints and for our law enforcement partners to find and share information about scams,” said FTC Commissioner Edith Ramírez.
Sentinel, as the network is called, is a secure online database that holds more than 6 million consumer fraud complaints. Shared with more than 2,000 law enforcement entities including ICE, the Department of Justice and now USCIS, it has become the primary repository for complaints involving allegations of immigration services scams. Sentinel will serve as an investigative tool for USCIS Fraud Detection and National Security officers, and will bolster communication between organizations on immigration services scam-related cases.
The initiative’s education component will focus on empowering immigrant communities to avoid unscrupulous individuals and businesses engaged in UPIL. USCIS’s efforts will be primarily aimed at providing immigrants with the information they need to make informed choices when seeking legal advice and representation on immigration matters, and reminding them that The Wrong Help Can Hurt.
Today, USCIS unveiled a new brochure, a poster, public service announcements for use on radio and in print publications, billboard and transit ads, and a new Web resource center that includes a video. All printed materials are available in English and Spanish, and materials in 12 additional languages are available online. To bolster this outreach effort, the Department of Justice’s Executive Office for Immigration Review (EOIR) and FTC will produce and distribute educational materials for different populations that may be affected by immigration services scams.
As part of the initiative’s emphasis on providing qualified legal assistance to this vulnerable population, EOIR’s Recognition and Accreditation program, the Justice Department, USCIS and FTC are working together to increase the number of EOIR-recognized organizations and accredited representatives, particularly in underserved areas. O rganizations and representatives seeking to provide lawful immigration services must be recognized by EOIR
“EOIR is hard at work to increase access for our government partners, nonprofit organizations, and individuals in immigration proceedings,” said EOIR Director Juan P. Osuna. “Through a combination of efforts, including reporting fraud, educating the public and dedicated outreach, we are bolstering our efforts toward growing a force of legitimate legal services providers and getting rid of fraudsters.”
EOIR is improving its Recognition and Accreditation Program by increasing communication with the public, providing easier application processing, and giving timely, accurate information to the public regarding which organizations have representatives available to represent individuals in proceedings.
The department’s Civil Division and Access to Justice Initiative are involved in an effort to train more attorneys to handle the cases of immigration fraud victims. As a result of these efforts, the department announcedthat nongovernmental organizations, working with local partners, will organize a pro bono legal clinic in Baltimore later this summer to assist victims of an enforcement action announced by the FTC today. Driven by a continuing dialogue with the department, the New York City Bar Association, the New York State Bar Association, the New York Office of the Attorney General and nongovernmental organizations, a legal training program will be launched this summer in New York City to expand the pool of lawyers who can assist in immigration matters.
For more information about USCIS’s education initiative, please visit www.uscis.gov/avoidscams or follow us on Twitter, YouTube and the USCIS blog, The Beacon.
A list of federal, state and local immigration services cases and additional information regarding EOIR’s Recognition and Accreditation Program are available on the Department of Justice’s website.
To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). Like the FTC on Facebook and follow them on Twitter.
Wednesday 8 June 2011
Ship Operator Pleads Guilty to Crimes Related to Pollution from Cargo Ship Traveling to Corpus Christi, TexasRead the Press Release
WASHINGTON -- A ship management company headquartered in Greece that operated a 29,414 - ton cargo ship that made calls in multiple ports in Texas pleaded guilty and was sentenced late yesterday in federal court in Corpus Christi for deliberately concealing pollution discharges from the ship directly into the sea and for failing to notify the U. S. Coast Guard of numerous safety hazards on board the vessel.
Noka Shipping Company Ltd., the operator of the M/V Florin, pleaded guilty to a violation of the Act to Prevent Pollution from Ships for failing to properly maintain an oil record book as required by federal and international law, as well as, a violation of the Ports and Waterways Safety Act, for failing to report a hazardous condition on board to include excessive amounts of oil in the vessel’s machinery spaces and bilges, excessive oil leaks on the vessel’s main engine and generators, an authorized oil drainage system for the engine room and oil in the vessel’s fire suppression system.
The company was sentenced to pay a $750,000 criminal fine along with a $150,000 community service payment to the congressionally-established National Marine Sanctuary Foundation. The money will be designated for use in the Flower Garden and Stetson Banks National Marine Sanctuary, headquartered in Galveston, Texas, to support the protection and preservation of natural and cultural resources located in and adjacent to the sanctuary.
Noka was also sentenced to five years probation. As a condition of the probation, all ships owned or managed by Noka will be barred from entering U.S. ports and territorial waters for five years.
“Senior officers allowed hazardous conditions to prevail aboard the M/V Florin and maintained false records that concealed the deliberate discharge of oily waste into the ocean in violation of the Act to Prevent Pollution from Ships,” said Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division at the Department of Justice. “Now Noka will not only pay a significant criminal penalty for breaking laws that help protect our oceans from pollution, but they also will lose the privilege and the profit of conducting commerce in U.S. ports for five years.”
“Pollution prevention acts were put in place to protect our natural resources now and for future generations,” said José Angel Moreno, U.S. Attorney for the Southern District of Texas. “It is more than disheartening to see companies knowingly and purposely dumping oil-contaminated waste into those resources; it violates the law. We take those violations seriously and shipping companies will be held accountable.”
“America's waterways are America's treasures and we are committed to protecting them,” said Rear Adm. Roy A. Nash, Eighth District Coast Guard commander. “When companies knowingly fail to adhere to marine anti-pollution laws and create hazardous conditions on their vessels, it affects each and every one of us. The Coast Guard will continue to aggressively enforce these laws and will not rest until all vessels comply with them. I am grateful for the hard work, dedication, and professionalism exhibited by Coast Guard Sector Corpus Christi, the Coast Guard Investigative Service, the U.S. Department of Justice Environmental Crimes Section and the U.S. Attorney's Office for the Southern District of Texas.”
U.S. Coast Guard Investigative Service Special Agent in Charge Damon Rodriguez, Gulf Region, added: “The collaborative efforts on this case by the Department of Justice, the United States Coast Guard and the Coast Guard Investigative Service should send a clear message to those who knowingly violate our nation's environmental laws that such actions will not be tolerated.”
According to the joint factual statement, from at least June 15, 2010 until Sept. 27, 2010, senior engineering officers on board the M/V Florin acting on behalf of Noka used the vessel’s fixed piping system and fire main pump to bypass pollution prevention equipment to discharge oily bilge waste directly overboard into the sea.
Federal and international law requires that all ships comply with pollution regulations that include the proper disposal of oily water and sludge by passing the oily water through a separator aboard the vessel or burning the sludge in the ship’s incinerator. Federal law also requires ships to accurately record each disposal of oily water or sludge in an oil record book, and to have the record book available for the U.S. Coast Guard when the vessel is within the waters of the United States. The M/V Florin called on ports in Corpus Christi and Houston between June 15, 2010 and Sep. 27, 2010.
According to court documents, the engineers knowingly failed to make the required entries into the oil record book including the fact that oily waste had been discharged directly into the ocean using the fire pump and circumventing the internationally required pollution control equipment. The senior engineers also made false entries in the oil record book to conceal the fact that the pollution control equipment had not been used. The crewmembers then attempted to conceal the discharges on Sept. 27, 2010 during a Coast Guard boarding at the port in Corpus Christi, by providing the falsified oil record book to the boarding crew.
With regard to the failure to report the vessel’s safety issues the company knew that before coming to the United States that it was under a legal obligation to notify the Coast Guard of any hazardous condition. According to court documents the vessel was boarded by Coast Guard inspectors on June 15, 2010 in Houston, whereby numerous safety deficiencies were discovered and required to be corrected. However, these deficiencies were not corrected and Noka failed to report these conditions upon the vessel returning to the port of Corpus Christi on Sept. 27, 2010.
The investigation was conducted by the Coast Guard Sector Corpus Christi, Texas and Coast Guard Investigative Service in Corpus Christi. The case is being prosecuted by Assistant U.S. Attorney Jeffrey S. Miller from the U.S. Attorney’s Office in Corpus Christi and Trial Attorney David O’Connell from the Justice Department’s Environmental Crimes Section.
New England Commercial Fisherman Charged with Lacey Act Crimes for Illegally Harvesting Striped BassRead the Press Release
WASHINGTON – Daniel B. Birkbeck, 46, of North Stonington, Conn., was charged today in federal court with trafficking in and falsifying records for illegally harvested Atlantic Striped Bass (Morone saxatilis).
Commercial fishing for striped bass in both Massachusetts and Rhode Island is governed by a quota system overseen by the Atlantic States Marine Fisheries Commission. This quota system was enacted in response to declining Striped Bass populations. Since 2003, Rhode Island’s commercial striped bass quota has been 243,625 pounds and Massachusetts’s commercial striped bass quota has been 1,159,750 pounds. As a result, the Massachusetts commercial striped bass season is open longer than the Rhode Island season.
Among other things, the Lacey Act makes it a crime for a person to knowingly transport and sell fish in interstate commerce when the fish was taken or possessed in violation of state law. The Lacey Act also makes it a crime for a person to knowingly make or submit a false record, account, or label for fish which has been transported in interstate commerce.
The indictment, filed today in U.S. District Court in Boston, charges that Birkbeck, who is licensed as a commercial fisherman in both Rhode Island and Massachusetts, harvested striped bass in Rhode Island waters after the Rhode Island commercial fishing season had closed and transported those fish to a fish dealer in Massachusetts for sale during the 2009 and 2010 commercial fishing seasons. The indictment charges that Birkbeck then falsely reported to the Massachusetts Division of Marine Fisheries that he had legally harvested the striped bass in Massachusetts waters. The indictment charges that Birkbeck illegally harvested and sold 12,140 pounds of striped bass.
If convicted, Birkbeck faces a maximum penalty of five years’ in prison and a $250,000 fine per count, as well as forfeiture of the automobile and boat that he used to illegally harvest and transport the striped bass from Rhode Island to Massachusetts for sale.
An indictment is merely an accusation and a defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
The case is being investigated by the National Oceanic and Atmospheric Administration Office of Law Enforcement and the U.S. Fish & Wildlife Service Office of Law Enforcement. The prosecution is being handled by the Environmental Crimes Section of the Justice Department’s Environment and Natural Resources Division.
New England Commercial Fisherman Charged with Lacey Act Crimes for Illegally Harvesting Striped BassRead the Press Release
WASHINGTON – Daniel B. Birkbeck, 46, of North Stonington, Conn., was charged today in federal court with trafficking in and falsifying records for illegally harvested Atlantic Striped Bass (Morone saxatilis).
Commercial fishing for striped bass in both Massachusetts and Rhode Island is governed by a quota system overseen by the Atlantic States Marine Fisheries Commission. This quota system was enacted in response to declining Striped Bass populations. Since 2003, Rhode Island’s commercial striped bass quota has been 243,625 pounds and Massachusetts’s commercial striped bass quota has been 1,159,750 pounds. As a result, the Massachusetts commercial striped bass season is open longer than the Rhode Island season.
Among other things, the Lacey Act makes it a crime for a person to knowingly transport and sell fish in interstate commerce when the fish was taken or possessed in violation of state law. The Lacey Act also makes it a crime for a person to knowingly make or submit a false record, account, or label for fish which has been transported in interstate commerce.
The indictment, filed today in U.S. District Court in Boston, charges that Birkbeck, who is licensed as a commercial fisherman in both Rhode Island and Massachusetts, harvested striped bass in Rhode Island waters after the Rhode Island commercial fishing season had closed and transported those fish to a fish dealer in Massachusetts for sale during the 2009 and 2010 commercial fishing seasons. The indictment charges that Birkbeck then falsely reported to the Massachusetts Division of Marine Fisheries that he had legally harvested the striped bass in Massachusetts waters. The indictment charges that Birkbeck illegally harvested and sold 12,140 pounds of striped bass.
If convicted, Birkbeck faces a maximum penalty of five years’ in prison and a $250,000 fine per count, as well as forfeiture of the automobile and boat that he used to illegally harvest and transport the striped bass from Rhode Island to Massachusetts for sale.
An indictment is merely an accusation and a defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
The case is being investigated by the National Oceanic and Atmospheric Administration Office of Law Enforcement and the U.S. Fish & Wildlife Service Office of Law Enforcement. The prosecution is being handled by the Environmental Crimes Section of the Justice Department’s Environment and Natural Resources Division.
Maryland Couple Charged with Domestic Servitude of Filipina WomanRead the Press Release
WASHINGTON- A federal grand jury in Greenbelt, Md., indicted Alfred Edwards and Gloria Edwards, both of Upper Marlboro, Md., on charges arising from a scheme to compel the labor and domestic service of a Filipina national.
The indictment was announced by Assistant Attorney General Thomas E. Perez of the Department of Justice Civil Rights Division, U.S. Attorney for the District of Maryland Rod J. Rosenstein and Special Agent in Charge Richard A. McFeely of the FBI.
“Human trafficking robs victims of their freedom and dignity and it will not be tolerated in our nation,” said Assistant Attorney General Perez. “We will prosecute all cases of human trafficking to the fullest extent of the law.”
The U.S. Attorney’s Office will continue to work with the Justice Department’s Civil Rights Division and federal and state agencies and nonprofit organizations, in conjunction with Maryland’s Human Trafficking Task Force, to locate human trafficking victims and prosecute perpetrators,” said U.S. Attorney Rosenstein.
According to the five count indictment, the couple enticed the victim to come to the United States to work as their domestic servant. According to the indictment, the defendants lured the victim, an impoverished, uneducated, mother of eight children, using false promises of a salary that would support her children in the Philippines. The defendants procured a fraudulent visa to allow the victim to enter the United States; confiscated the victim’s documents after she arrived; and compelled her labor for 13 hours a day over a period of 10 years, using a scheme of threats, assaults, withholding of documents, withholding of pay and a peonage contract to coerce the victim’s continued service.
The defendants are also charged with immigration violations.
The charges in the indictment are merely accusations and all defendants are presumed innocent until convicted in a court of law.
If convicted, the defendants each face a maximum sentence of up to 50 years in prison and $250,000 in fines.
This case is being investigated by the Baltimore Division of the FBI and prosecuted by Assistant U.S. Attorney Jonathan Lenzner and Senior Special Counsel Susan French of the Civil Rights Division’s Human Trafficking Prosecution Unit.
Justice Department Opens Investigation into the <br /> Portland, Oregon, Police BureauRead the Press Release
PORTLAND, Ore., – The Justice Department announced today that it has opened a civil investigation into allegations of use of excessive force by members of the Portland, Ore., Police Bureau (PPB), in accordance with the pattern or practice provision of the Violent Crime Control and Law Enforcement Act of 1994.
The Justice Department will seek to determine whether there are systemic violations of the Constitution or federal law by officers of the PPB. During the course of the investigation, the Justice Department will consider all relevant information, particularly the efforts that Portland has undertaken to ensure compliance with federal law. The Justice Department has taken similar steps involving a variety of state and local law enforcement agencies, both large and small, in jurisdictions such as New York, Ohio, New Jersey, Pennsylvania, the District of Columbia, Louisiana and California.
Today’s announcement is separate from any potential federal criminal investigation involving PPB.
The Department of Justice’s Civil Rights Division, Special Litigation Section and the U.S. Attorney’s Office for the District of Oregon are jointly investigating this matter. The department welcomes any information from the community. If you have any comments or concerns, please feel free to contact us at [email protected] or 1-877-218-5228.
Florida Radiology Clinic and Former Owners to Pay $3 Million to Resolve Medicare False Claims Act AllegationsRead the Press Release
WASHINGTON – Midtown Imaging LLC, a radiology clinic, and its former owners Midtown Imaging P.A. and PBC Medical Imaging have agreed to pay $3 million to resolve allegations that the clinic violated the False Claims Act, the Justice Department announced today. The West Palm Beach clinic is alleged to have submitted false claims to Medicare during the period 2000 through 2008 by entering into certain leasing and professional services agreements with referring physicians and physician groups that violated the Anti-Kickback Statute and Stark Law.
The Anti-Kickback Statute, among other things, prohibits offering, paying, soliciting or receiving remuneration to induce referrals of items or services covered by Medicare, Medicaid or other federally-funded programs. The Stark Law prohibits a hospital from profiting from patient referrals made by a physician with whom the hospital has an improper financial arrangement. Both the Anti-Kickback Statute and the Stark Law are intended to ensure that a physician’s medical judgment is not compromised by improper financial incentives and are based solely on the best interests of the patient.
“The Justice Department is committed to investigating cases that threaten the integrity of the Medicare program,” said Tony West, Assistant Attorney General for the Justice Department’s Civil Division. “The department will continue to protect patients by pursuing federal health care providers that have improper financial relationships with referring physicians.”
“We are deeply satisfied with today’s settlement and encourage potential whistleblowers to come forward with evidence of wrongdoing affecting the Medicare program,” said Wifredo Ferrer, U.S. Attorney for the Southern District of Florida. “We are committed to fighting fraud and abuse to help preserve scarce Medicare funds for those who need it the most, the sick and the elderly.”
Midtown Imaging was named as a defendant in a suit brought in 2009 by two former Midtown Imaging radiologists under the whistleblower provisions of the False Claims Act, which permit private citizens with knowledge of fraud against the government to bring a lawsuit on behalf of the United States and to share in any recovery. The lawsuit alleged that Midtown Imaging entered into prohibited financial relationships with certain physicians and physician groups. Under the civil settlement announced today, the whistleblowers, Dr. Teresa M. Cortinas and Dr. Walter E. Wojcicki, will receive $600,000.
The case was handled by the U.S. Attorney’s Office for the Southern District of Florida and the Commercial Litigation Branch of the Justice Department’s Civil Division. The investigation was conducted by the Department of Health and Human Services (HHS) Office of Inspector General.
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 the 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.
Tuesday 7 June 2011
Patient Recruiter Sentenced to 77 Months in Prison in Connection with $9 Million Medicare Fraud Scam in DetroitRead the Press Release
WASHINGTON – Miami resident Reynel Betancourt, 51, was sentenced today to 77 months in prison for his participation in a $9 million Medicare fraud scheme, announced the Departments of Justice and Health and Human Services (HHS).
U.S. District Judge Cecilia M. Altonaga of the Southern District of Florida also sentenced Betancourt to three years of supervised release following his prison term and ordered him to pay approximately $6 million in restitution, jointly and severally with his co-defendants. Betancourt was originally charged by indictment in the Eastern District of Michigan and after his arrest in Miami, he consented to have his case transferred to the Southern District of Florida for his plea and sentencing.
Betancourt pleaded guilty on March 29, 2011, to one count of conspiracy to commit health care fraud and to one count of money laundering conspiracy. According to the plea documents, beginning approximately in March 2006, Betancourt entered into an agreement with the owners of Dearborn Medical Rehabilitation Center (DMRC) to recruit patients for DMRC, a business that purported to provide infusion and injection therapy services to Medicare patients.
Betancourt admitted to paying patients to sign paperwork claiming that they had received injection therapy services and specialty medications that they did not receive. DMRC billed the Medicare program for more than $9 million in purported infusion therapy treatments, which Betancourt admitted were not medically necessary and not provided. Additionally, Betancourt admitted that he laundered the proceeds of the Medicare fraud conspiracy through two sham corporations that he created solely for the purpose of concealing the fraud proceeds.
The sentencing was announced by Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney Barbara L. McQuade for the Eastern District of Michigan; Special Agent in Charge Andrew G. Arena of the FBI’s Detroit Field Office; and Special Agent in Charge Lamont Pugh III of the HHS Office of Inspector General’s (HHS-OIG) Chicago Regional Office.
The case was prosecuted by Assistant U.S. Attorney Philip A. Ross and Special Assistant U.S. Attorney Thomas W. Biemers of the Eastern District of Michigan and Trial Attorney Gejaa T. Gobena 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 Eastern District of Michigan.
Since their inception in March 2007, Medicare Fraud Strike Force operations in nine locations have charged more than 1,000 defendants who collectively have falsely billed the Medicare program for more than $2.3 billion. In addition, the HHS Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.
North Carolina Man Pleads Guilty to Terrorism ChargeRead the Press Release
RALEIGH, N.C. – Zakariya Boyd, aka “Zak,” pleaded guilty today in federal court in New Bern, N.C., to one count of conspiracy to provide material support to terrorists, announced Todd Hinnen, Acting Assistant Attorney General for National Security; George E.B. Holding, U.S. Attorney for the Eastern District of North Carolina; M. Chris Briese, Special Agent-in-Charge of the FBI Charlotte Division; and John F. Khin, Special Agent-in-Charge, Southeast Field Office, Defense Criminal Investigative Service (DCIS).
Boyd, 22, a U.S. citizen and resident of North Carolina, was first charged along with seven other defendants in a federal indictment returned on July 22, 2009. He was arrested on July 29, 2009 and the indictment was unsealed. On Sept. 24, 2009, a federal grand jury returned a superseding indictment in the case.
According to the superseding indictment, from before November 2006 through at least July 2009, Boyd conspired with the other named defendants and others to provide material support and resources to terrorists, including currency, training, transportation and personnel. The object of the conspiracy, according to the indictment, was to advance violent jihad, including supporting and participating in terrorist activities abroad and committing acts of murder, kidnapping or maiming persons abroad.
The indictment alleges that, as part of the conspiracy, Boyd and other defendants prepared themselves to engage in violent jihad and were willing to die as martyrs. They also allegedly offered training in weapons and financing, and helped arrange overseas travel and contacts so others could wage violent jihad overseas. In addition, as part of the conspiracy, the defendants raised money to support training efforts, disguised the destination of such monies from the donors, and obtained assault weapons to develop skills with the weapons. Some defendants also allegedly radicalized others to believe that violent jihad was a personal religious obligation.
“With his plea today, Zakariya Boyd will be held accountable for his role in this conspiracy to provide material support to terrorism. This case is yet another example of an individual who joined the terrorist cause from within our borders and underscores the dedication of prosecutors, analysts and agents at all levels of our government who work tirelessly to identify such individuals and bring them to justice,” said Acting Assistant Attorney General Hinnen.
U.S. Attorney Holding said, “Today, Mr. Boyd stepped into an American courtroom and was afforded the rights and privileges of a system of which he would have destroyed. His decision to plead guilty sets him on a different path -- a path consistent with the rights and safety of the citizens of the United States, both at home and abroad.”
“This case shows extremists in this country are just as willing to do us harm as those overseas. The FBI and our law enforcement partners will keep seeking out and stopping anyone who plans to attack the United States,” said FBI Special Agent-in-Charge Briese.
“The Defense Criminal Investigative Service continues to partner with the Raleigh FBI JTTF to bring these home grown terrorists to justice,” said DCIS Special Agent-in-Charge Khin. “In concert with other law enforcement partners, DCIS protects America’s national security interests by aggressively investigating threats to the safety and security of Department of Defense personnel and facilities.”
At sentencing, Boyd faces a potential 15 years in prison followed by three years of supervised release for conspiring to provide material support to terrorists.
Boyd’s father and co-defendant, Daniel Patrick Boyd, pleaded guilty on Feb. 9, 2011, to one count of conspiracy to provide material support to terrorists and one count of conspiracy to murder kidnap, maim and injure persons in a foreign country. Trial for the remaining co-defendants in custody is scheduled for September 2011.
The investigation was conducted by the FBI Raleigh-Durham Joint Terrorism Task Force, which includes the FBI, the DCIS, the North Carolina Alcohol Law Enforcement, the Raleigh Police Department, the Durham Police Department and the North Carolina Information Sharing and Analysis Center.
The prosecution is being handled by Assistant U.S. Attorneys John Bowler and Barbara D. Kocher of the U.S. Attorney’s Office for the Eastern District of North Carolina, and Trial Attorney Jason Kellhofer of the Counterterrorism Section in the Justice Department’s National Security Division.
Connecticut Man Sentenced to 310 Months in Prison on Child Sex Trafficking ChargesRead the Press Release
WASHINGTON – Jarell Sanderson, of New Britain, Conn., was sentenced today to 310 months in prison on child sex trafficking charges, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division and U.S. Attorney David B. Fein of the District of Connecticut.
Sanderson, 31, pleaded guilty on Jan. 20, 2011, to one count of conspiracy to commit sex trafficking of children and two counts of sex trafficking of children before U.S. District Judge Mark R. Kravitz in New Haven, Conn. Sanderson also was sentenced to five years of supervised release following his prison term.
According to court documents and statements made in court, Sanderson and co-defendant Hassanah Delia recruited two 14-year-old girls to work as prostitutes. In July 2009, Sanderson and Delia transported the girls to hotels in Hartford and East Hartford, Conn., where the girls engaged in sexual conduct with men in exchange for money that was paid either to Sanderson or Delia. The men who paid to engage in sexual conduct with the girls had responded to an advertisement placed on a website by Sanderson by calling a phone that was answered by Delia, who then set up appointments for the girls.
Delia, of East Hartford, Conn., pleaded guilty to two counts of sex trafficking by force, fraud or coercion on Dec. 7, 2010. Delia’s sentencing is scheduled for June 23, 2011.
Sanderson will be required to pay restitution to the minor victims in an amount to be determined after further court proceedings.
The case is being prosecuted by Assistant U.S. Attorney David E. Novick and Trial Attorney Alecia Riewerts Wolak of the Criminal Division’s Child Exploitation and Obscenity Section. The investigation was conducted by the FBI and the East Hartford Police Department.
Cincinnati Man Pleads Guilty to Selling More Than $1 Million in Counterfeit Tax Preparation SoftwareRead the Press Release
WASHINGTON – A Cincinnati man pleaded guilty yesterday to selling more than $1 million worth of counterfeit financial and tax preparation software through an Internet auction site, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney Carter Stewart for the Southern District of Ohio; Tracey E. Warren, Acting Special Agent in Charge for the Internal Revenue Service-Criminal Investigation (IRS-CI); Dugan T. Wong, Assistant Inspector in Charge for the U.S. Postal Inspection Service; and J. Mark Batts, Acting Special Agent in Charge for the FBI’s Cincinnati Division.
Brandon C. Davis, 31, pleaded guilty before U.S. District Judge Herman J. Weber in the Southern District of Ohio to one count of mail fraud , one count of copyright infringement and two counts of filing a false income tax return.
According to court documents, Davis purchased by downloading or on a CD, Quicken and Turbo Tax software manufactured by Intuit Inc., with accompanying labels and packaging that were protected by copyright. Davis copied the original software multiple times to CDs, without permission, and created counterfeit packaging and labeling for the CDs. According to court documents, Davis sold the counterfeit Intuit software on eBay, received payment and then mailed the counterfeit software to the purchaser via the U.S. Postal Service. Within the packaging, Davis sometimes included a false disclaimer claiming that he was merely acting as a broker for another seller. Davis also falsely represented on the online eBay auctions that he was selling original Intuit software, but instead he sold counterfeit Intuit software, usually at prices below manufacturer’s suggested retail price.
Davis failed to report the income from the counterfeit software sales when he filed his income tax returns for 2008 and 2009.
At sentencing, Davis faces maximum penalties of 20 years in prison for the mail fraud charge, five years in prison for the copyright infringement charge and up to three years in prison for each tax charge. Davis agreed to a money judgment and tax lien of $80,074 and to pay restitution in an amount to be determined by the court. He also agreed to forfeit all computer items used to manufacture and distribute the fake software, a 2006 Hummer and $192,117 that was seized from his bank accounts. Sentencing is scheduled for Sept. 22, 2011.
The case is being prosecuted by Assistant U.S. Attorney Timothy S. Mangan of the Southern District of Ohio and Trial Attorney Tara M. Swaminatha of the Criminal Division’s Computer Crime and Intellectual Property Section.
The enforcement action announced today is an example of efforts being undertaken by the Department of Justice Task Force on Intellectual Property (IP Task Force). Attorney General Eric Holder created the IP Task Force to combat the growing number of domestic and international intellectual property crimes, protect the health and safety of American consumers, and safeguard the nation’s economic security against those who seek to profit illegally from American creativity, innovation and hard work. The IP Task Force seeks to strengthen intellectual property rights protection through heightened criminal and civil enforcement, greater coordination among federal, state and local law enforcement partners, and increased focus on international enforcement efforts, including reinforcing relationships with key foreign partners and U.S. industry leaders. To learn more about the IP Task Force, go to www.justice.gov/dag/iptaskforce
California Man Pleads Guilty to Filing False Liens Against Federal EmployeesRead the Press Release
WASHINGTON – Thanh Viet Jeremy Cao of Rancho Santa Margarita, Calif., pleaded guilty today in Las Vegas before Judge Kent J. Dawson to six counts of filing false liens against employees and officers of the federal government, the Justice Department, the Internal Revenue Service (IRS) and the Office of the Treasury Inspector General for Tax Administration (TIGTA) announced.
According to the plea agreement, Cao was a named defendant in a civil fraud action brought by the Securities and Exchange Commission (SEC) related to an investment scheme; he was also identified as the owner of an asset seized by the U.S. Secret Service related to this fraud. Cao was additionally under investigation by the U.S. Attorney’s Office for the Southern District of California and the U.S. Secret Service for criminal offenses arising from the investment scheme, and also was under investigation by the IRS-Criminal Investigation Division for tax returns he prepared for himself and others that claimed large refunds based upon fictitious tax withholdings.
In response to these proceedings and investigations, Cao filed 22 false liens in the public records of the state of Nevada and Clark County, Nev., against SEC attorneys, U.S. District Court Judges, U.S. District Court Magistrate Judges, the U.S. Attorney for the Southern District of California, Assistant U.S. Attorneys, U.S. Secret Service special agents and special agents of the IRS. Each lien alleged that the lien victims were “debtors” of Cao for hundreds of millions of dollars. According to the plea agreement, Cao admitted that all 22 liens were false and agreed that the liens should be expunged from the public record.
Sentencing is scheduled for Sept. 21, 2011 in Las Vegas.
This case was investigated by IRS-Criminal Investigation and TIGTA, and prosecuted by Trial Attorneys Christopher Strauss and Joseph Rillotta of the Department of Justice’s Tax Division.
More information about the Justice Department’s Tax Division and its enforcement efforts can be found at www.usdoj.gov/tax.
Monday 6 June 2011
Project Safe Childhood Operation Announced Following Indiana Man’s Guilty Plea to Multiple Child Exploitation OffensesRead the Press Release
WASHINGTON – David R. Bostic, of Bloomington, Ind., pleaded guilty today to multiple charges of sexual exploitation of children relating to his participation in an international conspiracy to sexually exploit children through the trading of child pornography, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division, U.S. Attorney Joseph H. Hogsett of the Southern District of Indiana and Michael Welch, Special Agent in Charge for the FBI’s Indianapolis Division. To date, a related operation has led to the identification and apprehension of 20 suspects in the United States and abroad and the rescue of more than a dozen children.
Bostic, 25, pleaded guilty before U.S. District Court Judge Jane Magnus-Stinson in the Southern District of Indiana. Law enforcement agents arrested Bostic on Nov. 17, 2010, following the execution of a search warrant at his residence in Bloomington, which uncovered evidence that Bostic produced child pornography and was a member of a group that traded sexually explicit images of children, primarily babies and toddlers. Within days of his arrest, an operation was launched to identify and apprehend other members of the group.
According to court documents, Bostic engaged in the sexual exploitation of children on multiple occasions to produce sexually explicit images of the minors, including four females, between the ages of two months and three years, as well as a male who was four years old. Bostic distributed the images to the group with whom he traded child pornography.
“David Bostic and his co-conspirators committed horrific acts of abuse and exploitation against infants and toddlers, and then distributed images of these acts to others around the world,” said Assistant Attorney General Breuer. “The crimes to which Mr. Bostic pleaded guilty today are among the most heinous imaginable, and we are aggressively pursuing others in connection with this operation. We will deal swiftly and harshly with predators who exploit the most vulnerable in our society.”
“Among the most important missions of this office is to keep Hoosier children safe from those who would prey upon them,” said U.S. Attorney Hogsett. “The production of child pornography is a heinous crime against a child, because it perpetuates the sexual abuse of that child for as long as the images exist, particularly where, as here, the images are distributed to like minded individuals. This then fuels the twisted fantasies of those individuals, and endangers children around them.”
“This investigation required the cooperation of local, state, federal and international law enforcement partners,” said Special Agent in Charge Welch. “These partners will continue to aggressively pursue those who would do harm to the most innocent victims of all and to ensure there is no safe haven on the internet for pedophiles.”
Bostic is charged in two separate cases filed under seal in February 2011 and unsealed today at his plea hearing. A criminal information charges Bostic with 36 counts of the sexual exploitation of children for his production of child pornography and one count of possession of child pornography. An indictment charges Bostic with one count of conspiracy to distribute child pornography, one count of conspiracy to sexually exploit children through the international trading of child pornography, 22 counts of distribution of child pornography and five counts of sexual exploitation of children. The indictment also charges Domminich Shaw, 31, a resident of the United Kingdom; Richard Szulborski, 20, of East Texas, Penn.; Shaun Kuykendall, 32, of Summerville, S.C.; and two other individuals currently charged only as Person 1 and Person 3.
Bostic pleaded guilty to all counts in the criminal information and indictment. Bostic faces a minimum sentence of 15 years in prison and maximum sentence of 30 years in prison for each count of sexual exploitation of children and conspiracy to commit sexual exploitation of children, 10 years in prison for each count of possession of child pornography, and 20 years in prison for each count of distribution of child pornography and conspiracy to distribute child pornography. Bostic also faces a lifetime of supervised release and up to a $250,000 fine.
The other defendants charged in the indictment are pending trial. They are presumed innocent and are entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.
This case is being prosecuted by Assistant U.S. Attorneys Steven D. DeBrota and A. Brant Cook of the Southern District of Indiana and Trial Attorney Michael Grant of the Child Exploitation and Obscenity Section (CEOS) of the Justice Department’s Criminal Division. The case was investigated by the FBI; the Indiana State Police; the Kokomo, Ind., Police Department; and the Brownsburg, Ind., Police Department.
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 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 .